Sunday, July 28, 2019 | 2 a.m.
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Compared with the opening of something like a municipal park or aquatic center, an increase in a city’s credit rating isn’t the kind of news that residents tend to get excited about.
But North Las Vegas’ recent announcement that Moody’s had boosted its rating two notches to A2 status — immediately followed by S&P Global Ratings’ raising the city’s bond rating to A-level status — definitely provided a point of pride for the city’s residents.
The rise from junk bond status to stability in recent years is a testament to the vision and hard work of the elected leaders and administrators, and to the wisdom of the voters who put those individuals in place.
It means that the city will see lower interest payments on bonds, which will help it control its operating expenses and continue to avoid tax increases for residents. The city recently refinanced its water and wastewater bonds, which will save $460,000 in interest payments annually.
Steps like those, combined with ongoing efficiency measures in municipal operations, have allowed the city to start restoring services that were scaled back during the recession, including park maintenance, library hours and others that officials say will be announced soon. So while the credit rating isn’t a shimmering new pool, it will improve the quality of life in the community.
The rating also offers a source of comfort for residents, as it’s based on assessments not only of overall economic health but of the city government’s financial stability.
“The ratings reflect our view of the city’s strong management, with good financial policies and practices under our … methodology,” S&P announced in raising the city’s rating.
This wasn’t something that happened naturally. Yes, Southern Nevada’s overall recovery from the recession had something to do with it, but North Las Vegas’ rebound has been quicker and steeper than other cities that were hit hard beginning in 2008.
This is a city that slashed about half of its staff between 2009 and 2014, and was in grave danger of insolvency.
Its quick return to pre-recession credit ratings wouldn’t have occurred without the efforts of Mayor John Lee, the city council and administrative team members such as City Manager Ryann Juden.
Juden helped Lee develop a long-range strategic plan for the city’s turnaround prior to the mayor’s first campaign for office in 2013, and he’s been integral in carrying out that plan. Key elements of the strategy included diversifying and strengthening the city’s revenue streams by attracting new businesses, and making city government more efficient.
“We had a growth strategy — we were not going to go back to the residents for more taxes; we were going to build a new tax base,” Juden said in a recent interview.
Toward that goal, the city boosted its economic development efforts and adopted business-friendly approaches like streamlining the building permit process. It identified several key development assets — the Veterans Affairs medical center complex, Nellis Air Force Base and the Apex industrial park — and built its marketing efforts around them.
As a result, development has skyrocketed. The annual permit valuation zoomed from $175 million in 2012 to $470 million in five years, while valuation of commercial and industrial construction went from $8 million in 2010 to $188 million in 2017.
This past spring, Amazon opened a 2.4 million-square-foot fulfillment center that serves as a poster project for the city’s strategy. It took less than nine weeks for the company to obtain permitting for the project and begin construction, which North Las Vegas officials say was a record for the company.
Other elements of the turnaround happened externally. A case in point came in 2015, when the city championed a bill in the Nevada Legislature regarding use of excess money from utility fees to support public safety, parks and other services. Lawmakers in 2011 passed a bill requiring governments to stop that practice within 10 years, the rationale being that the extra money should be invested in utility improvements or be returned to the residents paying the utility bills. But the 2015 bill created a new pathway that allowed cities to adopt a longer-range phase-out plan with state approval.
That was crucial for North Las Vegas. The city has been steadily reducing its transfers but still needs to make them to maintain other critical services. Despite its staffing reductions, the cost-saving measures it’s put in place and the diversification of its revenue streams, the city continues to operate close to the bone.
In getting a longer runway to end the transfers, Juden said, the city eased a key concern among bond analysts.
“Before then, the reports you’d see would say, ‘We like the management, we like the direction and we like that you’re achieving your goals, but what are you going to do in 2021 when you’re no longer allowed to transfer these utility funds?’ ” he said.
The city’s rebound hasn’t been without bumps — including friction with unions and a management shakeup that ended with Juden being named city manager in April 2018 — but the city’s overall trajectory has been sharply upward.
It’s been remarkable to watch, in no small part because Lee and the leadership team have brought an innovative, outsider approach to government. Juden, for instance, came to city government after serving as a political consultant and had never aspired to be a city manager. He joined the city as chief of staff in 2013 and served as assistant city manager until his promotion last year.
But the team’s sensibilities have resulted in some fresh ideas. When North Las Vegas resumed doing parking enforcement recently, for example, it placed its emphasis on removing nuisance vehicles from residential streets instead of ticketing cars at parking meters in order to improve the quality of life in neighborhoods.
“It’s about property values,” Juden said. “It’s part of our economic development efforts, because that’s what economic development is about — it’s about increasing property values, it’s about beautification of the community.”
It’s not municipal business as usual, but it’s paid off in North Las Vegas. Not only have municipal leaders steered the city out of financial disaster, they’ve done it without raising taxes.
City residents have a right to be proud.
