Las Vegas Sun

October 16, 2017

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With revenue down, Henderson approves furloughs, more buyouts

The Henderson City Council approved a furlough program and a second round of employee buyouts Tuesday night to make up for free-falling revenue projections.

The city had already made several budget cuts, tapped into reserve accounts and bought out 66 employees to make up for a projected $53 million shortfall in the current budget year and prepare for anticipated lean years ahead.

But after dismal tax revenues for the month of December came in, Finance Director Steve Hanson projected an additional $4 million revenue shortfall for this year and each of the next three budget years.

Hanson said the city’s consolidated tax revenue, which makes up nearly half of the general fund, was down 22 percent from the previous December, the largest decrease in the 22 straight months that the figure has been declining when compared to the same month in the previous year.

Hanson said he was caught off guard by the sheer size of the drop. “It was a real shocker to us,” he said.

The furlough program and second round of buyouts, when combined with a change in the holiday pay structure for city employees already in place and another labor-related change that will be proposed next month, will save the city $4 million per year, Hanson said.

“We are balanced as of today,” Hanson said.

However, as was the case with previous cuts in recent months, city officials didn’t rule out additional action.

“Obviously, none of us can predict when we’ll find the bottom of this trough we’re in,” Mayor James B. Gibson said. “If there’s anything we should do, it’s pray that we’ll find the bottom.”

Gibson also asked Hanson to evaluate the possibility of suspending the city’s matching contributions to retirement accounts of nonunion employees.

“I think it’s something that has given us a great benefit in recruitment,” Gibson said. “But I think the time has come for us to do more than what we’ve done thus far.”

The furlough program will begin March 23 and allow employees to take up to 12 days of unpaid leave, acting Human Resources Director Fred Horvath said. Employees will only be allowed to take the leave if no one else will have to work overtime to cover in their absence, he said.

The second round of buyouts will target a new group of employees — those whose age and years of service to the city, when added together, equal 60 or more, Horvath said. The first round of buyouts required a total of 65 years.

No one who was eligible for the first round will be eligible in the second round, Horvath said. The one exception to the 60-year rule is for employees of the beleaguered Development Services Center, which has seen revenues plummet as building permit applications have all but ceased to come in. Any employee of the Development Services Center, which already has lost 57 percent of its staff to transfers, buyouts and attrition, will be eligible for the buyout.

Only 25 employees will be allowed to take the buyout. The terms will be the same as they were in the first round: two weeks of pay for every year with the city and three months of medical benefits.

Gibson said he hopes the city will maintain its commitment to the reserve fund and make rebuilding it the first priority after the recession passes. He credited the reserve fund for enabling the city to manage the current situation.

“We’re still a very strong city,” he said. “A lot of that has to do with the fact that we spent more than a decade preparing. But that’s not to say we’re not hurting.”

Jeremy Twitchell can be reached at 990-8928 or [email protected].

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