Tentative budget has NLV tapping into surplus

By Jeff Pope

Wednesday, April 1, 2009 | 10:45 p.m.

Declining tax revenues are cutting into North Las Vegas’ savings but the city has enough money to cover rising expenses for 2009-2010, City Manager Gregory Rose said.

Rose presented the city’s proposed $846 million budget for the upcoming fiscal year to City Council on Wednesday that shows expenses growing by $4.4 million -- even after the city slashed $14.1 million from the current fiscal year.

With sales and property taxes suffering, a slowdown in construction and rising unemployment, the city will have to cut into its $36 million surplus to cover the additional spending.

“It’s always darkest before the dawn,” Rose said. “We are in a position today of actually balancing our budget at this time. We have had good success because we have stored funds away.”

The budget maintains current funding of services without layoffs, eliminates 100 vacant positions funds new parks and improvements, but reduces the general fund balance from 18 percent to 12 percent.

The city budgeted for a 5 percent decline in property taxes and revenues from development fees remaining flat because of the construction slowdown.

The proposed budget is partly dependent upon the city reaching a new agreement with its unions to save $13.2 million and forgo layoffs, Rose said.

Council members will receive the final proposed budget on May 19, which if adopted, begins July 1.

The city should plan for weaker returns on city investments and less state-shared revenue while the demand for services increases through at least 2010, said Jeremy Aguero, a principal in the Las Vegas research firm Applied Analysis.

Key indicators of the Southern Nevada economy are negative and show no signs of improving, he told the council.

“We have lost $1.7 billion worth of taxable retail spending in Southern Nevada alone over the 12 months ending December 2008,” he said. “New home prices continue to fall significantly (down 25.7 percent since peak) and have yet to be fully reflected in our property tax rolls.”

Aguero said the city should expect the overall economy to level off in 2010 followed by modest increases in revenue in 2011 and 2012.