Published Friday, March 7, 2014 | 2:04 p.m.
Updated Friday, March 7, 2014 | 3:53 p.m.
North Las Vegas has a little more than a month to solve an $18 million budget deficit it’s facing or risk intervention from the state to help fix its finances.
During a hearing today, members of the Committee on Local Government Finance told city officials they wanted to see a clear plan for closing the city’s deficit when it submits its tentative budget next month.
North Las Vegas Mayor John Lee blamed “poor leadership in the past” for the city’s financial dilemma.
“We need to produce more revenue,” he said. “Give me more time.”
City officials, including Lee and acting Director of Finance Darren Adair, said they were confident North Las Vegas would be able to balance its budget but that doing so would require cooperation and concessions from the city’s unions.
The city is negotiating with its public safety unions to settle a lawsuit stemming from the suspension of pay raises during a fiscal emergency declared in 2012.
As the result of a recent District Court ruling in their favor, union members are owed about $25 million for pay raises the city froze. But North Las Vegas only has about $7.7 million available to settle the dispute.
Negotiations also are ongoing over several union contracts that expire in June.
“We’ve had very positive discussions,” Adair said.
If the city can’t strike a deal with the unions and balance its budget, it faces intervention from the State Department of Taxation through a declaration of a “severe financial emergency,” a measure that could worsen the city’s financial standing in the long run.
If the state were to take over the city’s finances, it could raise property taxes beyond what the city is allowed to impose.
That would allow the city to raise more revenues, but it would also mean pain for property owners, who already pay the highest tax rate in the valley. Any increase in property taxes would be limited to a maximum of five years.
“What we’d be doing is kicking the can down the road until about 2020 and then we go off the cliff,” committee Chairman Marvin Leavitt said. “We have not, in the meantime, resolved (North Las Vegas’s) financial problems.”
The city council is expected to discuss union negotiations at its March 19 meeting. It’s tentative budget must be completed by April 15.