Las Vegas Sun

January 21, 2019

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Union: City spending too much on mob museum

LVCEA says city put $11.5M into museum while cutting 200 city jobs

Mob Museum location

The largest city employees union in Las Vegas complained today that the city was putting $11.5 million into the economic "magic beans" of the mob museum, when it could be using the money to save employees from losing their jobs in June.

However, the city, in response, says the $42 million museum now under construction will bring in more than 200 new jobs during its construction phase and about 92 jobs when it opens.

The city also says studies show it will bring in about $20 million in revenue to the city's budget coffers for the next 10 years.

The back and forth is the latest in the Las Vegas City Employees Association's struggle to save jobs that the Las Vegas City Council plans to cut in its 2010 fiscal year budget, which begins July 1.

Mayor Oscar Goodman and the council have told union members they could save jobs if they would agree to no automatic increase next year in cost-of-living benefits, longevity pay or step increases, plus take an 8 percent cut in salaries and benefits.

The city has received a few offers from the LVCEA and the city's other three unions, but none that would cut so deeply into employees' salaries.


The LVCEA complained that Goodman gave a media tour today of the Mob Museum, saying "It's evident where the City of Las Vegas' priorities are during these historic economic lows."

The union said the city took a $15 million loan out of the city's Sanitation Enterprise fund, of which $11.5 million is going to the mob musuem.

"Now is not the time for the city to go on a spending spree," Don King, union president, said in the press release.

"We have repeatedly tried to negotiate concessions that are fair to both the residents and employees of the city of Las Vegas, but with no avail," King said.

"The City is threatening 200 jobs, many of which are the jobs of single parents or one-income households; demanding 8 percent wages cuts across the board; putting a hold on everything else, yet placing its time and energy on spending $11.5 million of taxpayers' money on a mob museum," King said. "City Hall has bought the magic beans. It's absolutely unconscionable to destroy city employees' lives to build a mob museum right now. What is our mayor and council thinking?"

The union said the city had initially spent $7.5 million to get the mob museum going in 2006.

"It's time for citizens to know how much the LVCEA is willing to be part of the financial solution, but is being repaid with nothing but contempt by some of our elected officials," King said. "On top of all of this, the city has $53 million in hidden reserves and another $27 million in office supplies!! It's ridiculous."

Asked to respond, Diana Paul, senior public information officer for the city, provided this statement from the city:

"Today’s tour was intended to update the media on the progress of construction on the Mob Museum, which has created new jobs and is expected to generate millions in new revenue to the city when completed. The City Council has voted to support the project because there is confidence the museum will significantly help the local economy, not hurt it. The museum is expected to cost approximately $42 million to construct and is being funded through local, state and federal grants.

"Of the total amount, approximately $12.4 million is from general fund sources and $8.3 million is from matching local, state and federal grants that were awarded following the city’s financial commitment from its general fund, as well as a Redevelopment Agency funding source that can only be spent on projects located in the city’s redevelopment area. General funds were allocated for the museum in 2004, prior to the economic downturn. It’s the city’s general fund that covers the wages and benefits of the vast majority of its employees.

"The general fund is primarily supported with property and sales taxes, both of which are down. The city cannot transfer funds from other funding sources, such as grants, to support general fund allocations like wages and benefits. According to findings in a November 2009 study by Applied Analysis of Las Vegas, the Mob Museum is expected to generate a combined economic output of more than $62.3 million during construction and employ approximately 227 direct and indirect workers during construction.

"The museum will permanently employ approximately 92 people; 52 directly attributable to its operations and 40 additional jobs throughout the local economy. In addition, the project is expected to generate a total economic output of approximately $20.2 million during the same 10-year study period. Stated otherwise, for every dollar generated by the museum, a total of $1.95 will be generated throughout the regional economy.

"Especially during this economic downturn, it is important that the city support projects that create new jobs and will help bring much-needed dollars to our community."

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