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November 23, 2014

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Union pay raise ruling could cost NLV $42 million it doesn’t have

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Steve Marcus

North Las Vegas Mayor John Lee gives the North Las Vegas State of the City Address at Aliante Casino in North Las Vegas, Jan. 16, 2014.

North Las Vegas’ anticipated budget deficit for the upcoming year could more than double as a result of a recent district court ruling on union pay raises, city officials revealed during a special city council meeting Tuesday night.

A district court judge ruled in January that the city did not have the authority to suspend collectively bargained union raises as part of a fiscal emergency declared in June 2012.

The maneuver bought the city some short-term budget relief, but the unfavorable ruling means the city could be forced to pay out a settlement ranging from $25 million to $42 million, a hit that would be felt during the upcoming budget year for fiscal year 2015, which starts in July.

That payment adds to an existing $18 million structural deficit the city was already struggling to solve, compounding the problems facing Mayor John Lee and the new management team he’s put in place since taking office in July 2013. Overall, the city’s expenses are expected to outpace revenues by $150 million to $300 million through 2021 unless significant changes are made.

Despite the dire outlook, Lee and other council members remained optimistic during Tuesday’s budget update, confident that transparency about the challenges facing the city will allow for potential solutions to emerge.

“It’s a good day because we’re coming forward, we’re looking for a new start, a fresh start. The region needs to know this,” Lee said of the city’s financial state. “I have no doubt in my mind that we can pull out of this.”

Solving the city’s budget woes won’t be easy and could require painful measures like layoffs or property tax hikes.

Lee and other officials haven’t laid out specific plans for tackling the deficit yet, but more details will have to emerge in the coming months as the city finishes its budget planning ahead of a June 2 deadline when it must be filed to the state.

“I haven’t said no to anything but I’m also not saying yes to anything until I get more information,” Lee said of potential measures.

One bright spot for the city has been higher than expected consolidated tax revenues over the first half of the current fiscal year, which coupled with internal cost-cutting measures will free up at least $2 million that can be put toward next year’s deficit, staff said Tuesday night.

“We’re really trying to turn over every rock and look every place we can to increase our revenues,” interim city manager Jeff Buchanan said. “At the same time, each manager, each director collectively is doing their very best to watch every dollar that is spent.”

The city plans to hold another special city council meeting to discuss the budget at 6 p.m. Feb. 18 at North Las Vegas City Hall, 2250 Las Vegas Blvd. North.

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