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January 30, 2015

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As state eyes takeover, 5 reasons North Las Vegas is in financial trouble


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.

Last week, state officials said they might have to take control of North Las Vegas’ finances. City officials acknowledged that if things continue the way they are, the city won’t be able to make payroll starting in October.

Such a move would be a first for a Southern Nevada city, or any large Silver State city for that matter.

Some have blamed firefighters and police unions for North Las Vegas’ plight. The city was set to move forward with cost-saving layoffs before the police union sued. District Judge Nancy Allf halted the layoffs, agreeing with the officers’ union that the city would violate the employment contract if it went ahead. That ruling is expected to bolster another lawsuit, by firefighters, trying to prevent 35 layoffs.

The result: The city says it is spending $165,000 a week ($8.6 million annually) that it could have saved by cutting its police and fire workforce. (Note: The city and its firefighters agreed to a 5 percent salary reduction Monday, a move that will save $2 million and the jobs of 35 firefighters).

But a city doesn’t reach the brink of insolvency because of one hardheaded union, or even two. Recent and past moves by city officials, the unions and residents have led to this fix. North Las Vegas, once among nation’s fastest-growing cities, has seen steep declines in tax revenue during the recession, while its operating costs have risen to pay for big projects planned in anticipation of continued growth.

Here is a review of some of the missteps:

    • North Las Vegas City Hall
      Photo by Justin M. Bowen

      A new City Hall

      First proposed during the boom, in 2005, the city didn’t break ground on the building — whose announced price tag rose from $113 million in 2005 to $135 million in September 2009 — until June 2009. By then, the Great Recession had come down on the city with its full weight.

      The Silver Nugget, located near the City Hall site, postponed $200 million in renovations because of the poor economy, nine months before the city broke ground. Mayor Mike Montandon and acting Mayor Shari Buck were among the city officials to turn the first shovels of dirt. The old city hall, built in 1966 when the population was 35,000 versus 216,000 in 2009, was deemed too small for the growing municipality. The Sun could not immediately obtain debt payment figures for the facility from city staff. Then again, that might not be a problem soon: One of the budget-saving measures being considered is selling the building to a private company, then leasing it back. Many businesspeople are expected to visit North Las Vegas officials this week to look at purchasing the new City Hall, sources say.

    • Wastewater in Sloan Channel
      Photo by Steve Marcus

      Sewage treatment plant

      The North Las Vegas Water Reclamation Facility was also proposed in 2005, when 1,300 people were moving into North Las Vegas every month. Officials broke ground in January 2009. Officials said the plant would save the city a total of about $240 million by 2030 — the city said it paid Las Vegas $35,000 a day to treat its wastewater. The plant is now mired in a lawsuit because it is discharging treated water, which residents say is foul-smelling, into the county-owned Sloan Channel without permission. Built for about $300 million, the plant will cost city taxpayers about $18 million a year for decades. But again this might not be a problem in the near future, as the city is also thinking about selling the utility to private industry.

    • North Las Vegas Police Bilboard
      Photo by Justin M. Bowen

      Union troubles

      North Las Vegas hoped to draw more businesses and jobs, and the taxes that go with them, by building a safe, business-friendly community. But the police union may have hurt those hopes by bolstering an impression that the city is unsafe. The union has lined city streets with A-frame signs: “Warning: Due to recent police layoffs, we can no longer ensure your safety!” One person close to the process in North Las Vegas told the Sun, “As a businessperson, and without a dog in this fight, I look at all the crap going on and I don’t want to be a part of that, and I don’t want my business to be a part of that.”

      The irony: The city had an unsafe reputation for many years with a fully staffed police department and without signs advertising it.

    • Gensler Rob Cousins
      Photo by Paul Takahashi

      The “new” North Las Vegas — on hold

      Worldwide architectural firm Gensler won a $500,000 contract from North Las Vegas in January to develop a vision/master plan that would buff the city’s dull exterior in an effort to make it a hub for international business. In March, Gensler said "forget it." They gave up rather than deal with the political fallout. Mayor Shari Buck and Steve Horsford, state Senate majority leader, had called the project a waste of money. Others saw the project’s demise as another loss for the city. “North Las Vegas threw its chance away,” Otis Harris, a developer whose company had a public-private partnership with the city to create the master plan, told the Las Vegas Review-Journal.

    • Day 2 - 2011 Legislative Session
      Photo by Sam Morris/Las Vegas Sun

      Close to bankruptcy

      Talk of the state taking control of the city’s finances isn’t inspiring confidence. And that’s probably an appropriate response.

      Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, described what could happen if the state Taxation Department has to step in: “The law says the residents have to make up the difference (in the city’s debt) ... The residents would lose. They already have one of the highest tax rates in the state and they’d likely have to pay more ... Taxation would be looking at $30 million in debt that the city, the residents, need to pay off in three years. Senior citizens’ property taxes would go up and their home values would decline. How are they going to pay and what additional services would they get? And who is held accountable? It’s just really unfair.”

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    1. Now reality needs to set in for all involved in this stupid war of money and lack there of. The fire union took a dose of reality now it is time for the NLVPOA and the supervisors union to take a dose too. The city council, Buck, Robinson (now Goynes-Brown), Eliason, Cherchio (Wagner?) and Woods need to take a huge dose of reality. It was with the approval of the council to allow all of the projects and the union contracts that have led to the demise of the city. So now that the Golden Goose has dried up and can't lay anymore golden eggs, what are you going to do to right the ship? I sometimes wonder who the council was listening to when they took all the bad advice to give the approval for all the items listed in this article. Other questions come to mind, "Why would anyone want to be elected to serve on the city council of this sinking ship?" and "Why would Montandon file a lawsuit to prevent an election so that they could get their people into office?" Hmmmm? Maybe the state should go a step further and audit the city without using the local auditor that NLV uses that only tells the city what it wants to hear. Then audit their personal finances and holdings of all past and present mayors and council persons. It could be surprising....

    2. Excellent article! All the problems about North Las Vegas in a nutshell.

    3. Right on, isthis4real!!!

      The leadership at the City of North Las Vegas have played the spectulator game, that life will only keep building and building (in a unsustainable fashion). Pure carelessness, yet truly reflects the kind of citizens electing these leaders. What can anyone expect?

      This is reflects a greater lesson our very own USA government is currently facing though. A 2-party system that has been hard wired into a "nation building" mentality, when in fact and reality, we need skilled leadership that can "MAINTAIN" a country that has been built. We have money, dollars that have zero backing and therefore imaginary value. That must change in a global economy, and will with coming events.

      The City of North Las Vegas shoved the Waste Water Treatment Plant upon the Clark County Neighborhoods that it is now built. The residents had virtually little to NO say, and the few, were straw interests, and have since left town....makes you wonder, huh? And now, folks are getting word that their properties are WORTH nearly 1/3 less value!!! Please don't tell me that we were NOT HARMED!

      Drive down East Carey Avenue, across from Martin Luther King, Jr. Park, and see the disgraceful lack of landscaping. Every other WWTP in Las Vegas Valley has a reasonable landscape except this one! Truly, this area has been discriminated against and the property owners harmed both economically and environmentally!

      Consider my words owned,copyrighted, and patented by me at this point, especially about comments on government"nation building & maintaining mentality." Thank you.

    4. This just about sums it all up. The City is mired in a host of issues that took years to create. Clearly most of this foolishness was caused by the prior City Council - led by former Mayor Mike Montandon and current Mayor Shari Buck.

      I think a better hope that for the residents of North Las Vegas is for the state to dissolve the City Charter and for the city to merge with Las Vegas.

    5. Just wondering IF anyone was awake during this last Nevada State 76th Legislative Session, when the State of Nevada was CUTTING PERSONNEL POSITIONS right and left?

      And you all want the State of Nevada, ladened with its own version of insolvency, to dissolve and manage the City of North Las Vegas?

      Come on people, think it through, now.

    6. In 2005 for the betterment of their city their ideas were sound. Since they did not get them started until 20098 and the downturn had taken over they should have used common sense and put all the major projects on hold. That was their biggest mistakes. Their debt service will eat them alive at this point.

      If the people of North Vegas want to remain North Vegas they are going to have to raise their property taxes. They will have to pay their own way. The rest of the people in Nevada are not going to pick up the tab for this one.

      Those signs placed around North Vegas. Someone should look into that. You can not place signs on public or private property without permission. You also can not put up signs without sign permits. Make the Union pull their permits and there is more money for the city.

      staralioflundnv, I admire you for your chosen profession but you can not get a patent on words. Stick to what you know, law is not one of them and it makes you look silly.

    7. It seems to me that $135 million is what done in the finances not the unions, It's the city wanting the unions to pay for it. This whole thing was mismanaged. Without the $135 million dollar encumbrance the city would still be in the black, Even with out the lost revenues so in reality it was the decision to go forward with this city hall project "With Anticipation of growth" That didn't come to fruition. It was a gamble on black but red came up. Can someone post the pay scale of the fireman and police officers in comparison to the state pay scale for the same because it's the difference of those scales that is being projected as the cause for this debacle.