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Official: State close to taking control of North Las Vegas’ finances

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Richard Brian / Special to the Sun

City leaders ceremoniously break ground on a new North Las Vegas City Hall on June 4, 2009. Tossing dirt were, from left: contractor Paul Schmitt, vice president of Whiting-Turner, architect Michael Winters, City Manager Gregory Rose, Councilwoman-elect Anita Wood, Mayor Pro Tem William Robinson, Councilwoman Stephanie Smith, Councilman Robert Eliason, Mayor-elect Shari Buck and Mayor Michael Montandon.

Updated Friday, July 8, 2011 | 2:46 p.m.

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Sen. John Lee, D-North Las Vegas

Financially troubled North Las Vegas is in danger of having its finances taken over by the state, according to the Senate chairman of the Legislature's Government Affairs Committee.

State Sen. John Lee, D-North Las Vegas, said, "No one wants to say 'receivership,' but it might be the only way to save my community."

State law allows the Department of Taxation to take over local government finances in the case of a "severe financial emergency." Lee called the state's taking control of the city's purse a "last resort."

"I think the City Council wants it to be a last resort," Lee said. "I think they're trying to make a last final ditch attempt at preserving their autonomy."

The city of North Las Vegas is losing $165,000 a week after a judge issued a temporary restraining order preventing the layoff of public safety employees.

In a fiscal emergency, the state's taxation director could force cuts or tax increases, according to sources. It's unclear whether the state would assume any debt or have to pay for city services, with one observer noting that this was largely "uncharted territory."

North Las Vegas spokeswoman Juliet Casey said that the City Council on Wednesday was presented with six options to cut costs, including privatizing services, making further layoffs to non-public safety employees and raising property taxes. The council will be presented with a list of recommendations, including additional layoffs, at a meeting currently scheduled for July 20.

If none of those steps are taken, Casey said, the state could come in for "technical assistance" on the city finances, at least initially. The city could request technical assistance from the state, but still retain control of the decision making.

Al Noyola, acting finance director for North Las Vegas, said giving the state control of the city's finances would be a last option. "We do have some serious financial problems. ... We have a series of options we're exploring. It's in no one's best interest for the state to come in. The best option is for the city of North Las Vegas to work hand-in-hand with the state."

Noyola noted that the state could not undo current city contracts with employee unions.

North Las Vegas has seen steep declines in tax revenues during the recession, while the city has seen costs escalate as it pays for big projects planned in anticipation of continued growth. Casey said the city is on pace to come up short on payroll in the financial quarter starting in October.

"The financial crisis taking place in the city of North Las Vegas is not exaggerated," Lee said. He said the state could take over financial responsibility, and force union contracts to be renegotiated or taxes to be raised. The City Council and city manager would have to enact the changes, he said.

Lee added, "I don’t blame any single person for what happened to them. They had the sanitation district, new city hall, the economy. It was a perfect storm."

While local governments have been financially strapped and forced to make big cuts in recent years, this would be the first time a Southern Nevada municipality has been taken over by the state. In 2006, the state took control of White Pine County's finances because of financial defaults.

Dale Erquiaga, senior adviser to Gov. Brian Sandoval, said the governor's office is monitoring the North Las Vegas situation and waiting to see what action the City Council takes. "The decisions are still in North Las Vegas' hands," he said.

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  1. North Las Vegas has about 225,000 people in it. I guess they each need to cough up about ONE DOLLAR a week to keep their city floating. Is that to much to ask? ;-)

    You can always disband and become Clark County again. That way you won't be suing yourself.

  2. There really is one person to blame here. It's Shari Buck. She's the last remaining member who voted for the Platinum Parachute for the man that mismanaged the More Cops money, former City Manager Gregory Rose. She approved the record Union Contracts. She's the last person that voted for the new City Hall, ordered the Waste Water Treatment plant to start dumping into Sloan Channel.

    While it's true the City started with it's hands tied behind it's back due to the tax distribution formula that dates back to 1981, Mayor Buck's mismanagement of the City has led it to the brink of extinction.

  3. I think it's time to end this grand experiment known as the City of North Las Vegas. Being the redheaded stepchild of Clark county with the highest property taxes and crime rates isn't a recipe for success.

    Thank you Mayor Buck for laying down to the public unions and squeezing every last penny out of NLV's citizens. Let's just call this a "strategic" foreclosure and call it a day. Make sure you turn off the lights in the new city hall before you leave!

    RIP North Las Vegas. 1946 - 2011?

  4. Our local police union won't keep us safe but they are more than happy to bankrupt us.

  5. @ls1...

    "Take away the 150 million new city hall and the 300 million water treatment plant and there is plenty of money to run the city."

    There you have it.
    Buuuut nooooo;
    Blame it on the Police Union.

  6. How much was that shopping spree for the furniture again???

  7. "Take away the 150 million new city hall and the 300 million water treatment plant and there is plenty of money to run the city."
    --------

    And do what with the sewage at what cost?

  8. Let's unincorporate the city and turn it over to Clark County. Eliminate a group of politicians, bureaucrats and chiefs.

  9. newnvres,

    Do you *really* think being Tom Collins even more would better? Not too mention Chris G? (Though I wouldn't mind having Sisolak having a say in our affairs.)

    Another downside is that we would have to deal with Metro and Sheriff Doug. You think our crime rate is high now? Think what our murder rate would go to when Metro responds to a call.

  10. How pathetic! North Las Vegas city counsel you need to take care of business, stop delaying action and make the tough choices. In other words, do your jobs.

  11. Prediction: With the help of the courts who shove the police and firemen down our throats, and the same courts who nullify council election decisions, are things really looking up in North Las Vegas? If the courts do not turn around, we'll have our police and firemen, but no City--it will all drop into political quicksand. Wagner, Montandon and Buck are driving this City into the fires of hell.

  12. CNLV labor gave about 25% for 3 years, fire gave 5% for 6 months, police will get a 4% increase. The police are the highest paid PD in the valley , when you account for benefits. I understand that being a police office is a dangerous job. however how greedy is it to get a pay increase when your already the highest in the valley. How greedy is it to get an pay raise when everyone else is getting pay cuts or laid off . How ridiculous to have the signs set up on the road sides saying they "cant guarantee our safety" when did they ever! that there is no consequence for criminals in NLV. Then to have the police union say its not a scare tactic, when its SO obvious that it is. Police officers are suppose to have a higher moral character, we are suppose to trust them. Their actions and greed are an ugly thing and the police are showing their faces. Since 50% of the cities budge is police and fire, metro should take over the police function alleviating that portion from the budge, allowing millions to bring the city out of its debt. Mayor buck will support the police and let the city go down the toilet. I hope the citizens of CNLV understand how important police are when they have no parks, pot holes in the street, no street lights or water. When sewer is backing up in their homes. currently the city has about 1300ish employees of which 850 are fire and police.