Henderson OKs $498 million budget with cuts, employee buyouts

By Paul Takahashi

Tuesday, May 17, 2011 | 10:59 p.m.

The Henderson City Council on Tuesday unanimously approved a $498.4 million budget for fiscal 2012, bridging a $19 million shortfall with the help of a fourth round of its Voluntary Employee Severance Plan.

The $1.5 million severance program is a buyout for city employees, which has saved Henderson about $17 million since it was implemented in 2008. City officials said they expect between 15 and 20 employees to take the buyout this year; more than 200 city employees have left Henderson through the severance program since 2008.

Although Henderson has retained its AA+ Standard & Poor’s bond rating, the city needs to find additional ways to cut costs, said city Finance Director Richard Derrick. Since the city adopted budget reduction plans in 2008, Henderson has cut $105 million from its budget.

“Hopefully it will be another success for the city,” Derrick said. “We’ve saved million of dollars to date; it’s been quite successful.”

Henderson is asking its departments again to cut expenditures by about 15 percent, which is expected to generate about $7 million to be added back into the city’s general fund.

The city is also counting on receiving about $2 million in excess consolidated tax returns after it approved an inter-local agreement Tuesday night that would change the state distribution formula.

The state consolidated tax revenue — made up of six taxes, including those on the sale of cigarettes and liquor — is divvied up among municipalities throughout the state, according to the distribution formula.

Despite the projected additional consolidated revenue, Henderson’s base allocation of the consolidated tax revenue is projected to be $73.1 million in 2012, which is below 2004 levels.

Furthermore, projected property tax revenue for 2012 is $61.4 million, about the same amount the city garnered in 2006 and nearly $20 million lower than its peak in 2009.

City Council members expressed gratitude to its unions for making concessions to balance the budget, and said they will continue to monitor the city’s finances as state budget projections change.

“We appreciate the hard work (of city employees),” Mayor Andy Hafen said. “I think this council has been faced with some very stiff decisions. I think we have taken them very seriously and will continue to (in the future).”