County may have millions hidden under the cushions

By Joe Schoenmann

Sunday, Nov. 6, 2011 | 2 a.m.

During this recession, public employee unions have contended that Clark County has money hidden in accounts that only its top finance people are able to find.

That theory has been bandied about by unions seeking to prevent cuts to their pay and benefits. The argument tends to go something like: We know you have this hidden money, so quit acting like you’re so poor.

The county groans at the suggestion, like some urban legend it just can’t disprove.

Something happened in the Clark County Commission last week that raised the question again.

With the Service Employees International Union and the county seeking the help of a mediator in contract negotiations, was it the union that brought it up?

No, it was a county commissioner. Steve Sisolak asked questions about an item on the agenda that seemed innocent enough: abolishing the County Transportation Improvement Fund and transferring any “residual” money to the Public Works Capital Improvement Fund, also known as “Fund 4420.”

How much money was left in the Transportation Improvement Fund?

Let’s have some background first. The fund was established from the proceeds of a $36 million general obligation bond in 1994. That bond was paid off seven years ago. Over those seven years, money remaining in the fund collected interest and grew to a pretty large sum: $1.9 million.

And no one knew about this money? Even if they did know, could it be used for salaries and benefits — things the unions seek to maintain?

County staff said every budget filed every year — an inches-thick document — lists every fund and every amount in those funds. That document is available to the public. Staff also says, however, that the 1994 bond was for transportation improvements so any leftover money also has to be used for similar capital projects.

What does the SEIU say?

Nick Di Archangel, SEIU spokesman, said he wasn’t surprised that “there’s money lurking in a fund somewhere.”

“We have said the money is there and the county has said it isn’t,” he added. “They tell us, ‘show it to us.’ Well, we don’t have to show it to them, they’re doing the work for us.”

What did Sisolak say?

He was surprised that so much money had been sitting idle for so many years. “I honestly don’t know how many funds the county has,” he said after the meeting. He also isn’t convinced the money can only be used for capital improvements.

“I was told that, but nobody told me why,” he said. “I just can’t seem to get answers to all of this. I don’t think staff is hiding anything, I just don’t think they’re used to someone asking questions.”

Then does the county have “more money than God,” as the saying goes, or at least enough to keep the SEIU members happy?

The county’s last contract offer was to reduce merit pay from the current rate of 4 percent to 1 percent in the first year; then 3 percent in the second (these would apply to about 70 percent of the union membership; the remaining 30 percent have topped out).

Also, the county wanted no increase in pay ranges. In exchange, the county wanted to eliminate longevity pay for new hires only. The union said no and asked for 1.5 percent increases in pay and for pay ranges to rise.

So the county would give some money in the short term. What’s the benefit?

Longevity pay costs the county about $35 million a year. The long-term goal is to eliminate longevity, county staff says, and to make the compensation structure more sustainable.

Firefighters are the only other large union that still offers longevity pay to new hires.

The county also points out that property tax revenues have dropped to 2006 levels and consolidated tax revenues are at 2004 levels, while average wages for SEIU employees have risen 12.6 percent since 2009.

County Manager Don Burnette said Clark County is no different from local businesses: “No business in Southern Nevada can afford to dramatically increase their average employee wages in the face of steep revenue declines.”