Feature Stories - October 2008

Industry Focus: City Hall

Recently, 10 of Nevada’s top public officials gathered at the office of Holland & Hart, LLP to discuss present challenges, the state of the economy, how municipalities are weathering the economic depression and being leaders in sustainable development and green building. Connie Brennan, publisher of Nevada Business Journal, served as moderator for NBJ’s monthly event that brings leaders together to discuss issues pertinent to their professions. Following is a condensed version of the roundtable discussion.

 
Most Pressing Issues

Municipalities often face very different challenges than those of the private sector, but financial anxieties still top the list.


Connie Brennan: What is the biggest challenge you are presently facing?

Jeff Wells: The biggest issues revolve around the budget.

Shauna Hughes: The need to understand bankruptcy laws. In all the years that I have been City Attorney, I have never dealt with bankruptcy projects that the City of Henderson is so directly involved in.

Bud Cranor: One thing that is concerning is the uncertainty of the future and also the loss of leadership. We have elected officials that have really good institutional knowledge, but we’re going to be losing that with the term limits decision.

Bristol Ellington: The economy.

Phil Rosenquist: There is almost a perfect storm of bad things happening these days. It is not just the state of the economy, but combine what is happening with fuel and you are looking at some potentially dire long-term consequences.

Travis Chandler: Boulder City’s perspective is a little bit different because we have a pretty established policy of limited growth that is quite different from the rest of the state. We are seeing some projects being put on hold in terms of sources of revenue due to the City’s inability to pass along fees to new development.

Bill Wells: We are afraid of the state coming to the cities and looking to our budgets to help solve problems.

Susan Holecheck: Transportation issues. Just knowing that there are no highway funds is of grave concern to Mesquite. Additionally, I have never seen a state that has needed leaders as desperately as we do.

Virginia Valentine: The biggest challenge for us is that in spite of this economic downturn, we still have an increase in the demand for services and the expectation of services. Meeting this demand is this climate is our greatest challenge.

Andrea Anderson: When the Hoover Dam Bypass Bridge is completed, all the trucks that have been re-routed into Laughlin are going to come back over the bridge and right into Boulder City. There is going to be a great deal of congestion and while NDOT is trying to make some changes to the highway, it is still going to bottleneck pretty badly.

Layoffs

The group discussed how city officials must address work force reductions very differently than private business due to legislative initiatives and union concerns.


Brennan: Has the economy affected staff positions?

Ellington: In our development service center, which is an enterprise fund, we have not had to layoff, but we have voluntarily frozen vacant positions.

Holecheck: We have not had to layoff either, in fact we are actually still hiring. Mesquite has been cresting that storm pretty well.

Bill Wells: I think the City can really help this whole economic situation a lot if they just continue doing business as usual if they've got the resources to do so in their budget.

Anderson: In Boulder City, in our last budget, we did approve one new position, but we are not filling positions that become vacant. We really don't want to lay people off so we are just holding the line and hopefully we can stay there.

Valentine: We have been maintaining, I think we had about 350 vacancies and so we use those vacancies as our safety valve on managing the work force. One of the things that came out in the recent Chamber Analysis was that the state’s municipalities generally have fewer employees per thousand than other areas of the country.

Jeff Wells: If you did a pure statistic, it would say we added almost 90 new positions last year. Virtually every one of those positions was mandated by the Legislature because they were associated with the courts or the justice community.

Robbing From Peter

The city leaders discussed what they are most apprehensive about with regards to the State of Nevada and what they might do with budget shortfalls.


Jeff Wells: We are worried about what the Legislators might be thinking of doing this coming session, in regards to looking to the cities budgets for assistance with their own budget shortfalls.

Hughes: Absolutely.

Chandler: We hear the Legislature in the last session has looked at mandating rules for affordable housing. This would have a dramatic impact on Boulder City. It may force us to at strike some of our ordinances from the books.

Jeff Wells: Let’s talk about the State taking money. Last session they took three cents out of five cents. The money they took meant there was going to be a delay on what we can do about funding for future projects on the Beltway, the part that's county funded at least, because the State has already taken that money. Now the promise was that that money would be diverted to state highway projects, still within Clark County. That's good, but we had hoped to have the State pay for those projects and we would still have the money to pay for the county projects and get both, as opposed to trading one project for the other project. That's the kind of thing that we're worried about for the next session.

Salaries & Benefits

Municipalities are known for offering richer benefits and retirement plans to their employees, the group discussed the reasons and associated stigmas.


Brennan: Why is it that the government provides salaries and benefits greater than what most businesses can afford?

Hughes: Our hands are tied when we negotiate labor contracts. It goes to the last, best offer and the arbitrator picks one or the other. It's a disastrous system but it’s the way we’ve all dealt with it for years. This process is definitely an explanation for part of the problem of inflated salaries and benefits.

Holecheck: In Mesquite, even though there were a couple of years we did not give pay raises to our public works people, the simple fact is, we are located in between Las Vegas and St. George, and if we want to attract experienced, qualified people, we are going to have to be pretty close to a percentage that is being offered in Las Vegas or St. George.

Anderson: We have the same problem in Boulder City. We compete with Henderson, Las Vegas and the County salaries. If we don’t keep our salary levels competitive, we lose people.

Jeff Wells: If you compare parallel positions, say secretaries, in the public sector versus the private sector, you would see that yes, the municipalities are a little out of whack, but some public works positions do not have a comparable private sector position, a firefighter for example, and it would be unfair to compare those types which is what people often do.

Recruitment of Talent

The group discussed the challenges and barriers they face in finding and keeping qualified individuals.


Brennan: Do municipalities have a difficult time recruiting talent?

Valentine: The difficulty depends on the talent needed. There are positions that we have a very difficult time filling and there are positions where we get 2,000 applicants. In the past, the hard to fill positions are engineers, architects and planners. Recently though we are finding it hard to recruit experienced social workers.

Jeff Wells: I.T. people are the hardest to find.

Valentine: Agreed, I.T. people are a challenge. This is one area where we compete probably the most with the private sector. That makes these positions the hardest to fill.

Holecheck: Building and planning positions have been the hardest to fill for Mesquite.

Anderson: One other aspect of hiring in Nevada is when you hire someone from out-of-state, which we often do when we need a department head. We get applicants from Indiana, Illinois and Kentucky, they come out here and the salary looks fine and then they look at our housing costs and they can’t afford to live here. That is a detriment to the state and presents real challenges to finding qualified people.

Four-Day Work Weeks

There has been a lot of debate surrounding the benefits and drawbacks of municipalities operating on a four-day work week. The city leaders shared their insights on this trend, offering both the benefits and opinions of infeasibility for some government operations.


Hughes: The City of Henderson instituted a four-day work week in the mid-80s when there was an economic downturn. It was a labor decision basically, a way to compromise on a union required salary increase we could not afford. Over the years we have absolutely saved money, particularly in our energy costs.

Ellington: We’ve saved approximately $5.6 million a year just from going to a four-day work week for the City of Henderson.

Holecheck: We just recently changed to a four-and-a-half. Labor negotiations generated the decision as well and we are now beginning to see a lessening of the utility costs. Governor Huntsman of Utah said that all of Utah is going to a four-day-work week. So it's beginning to catch on and I think people are beginning to realize what a benefit it affords.

Cranor: The four-day work week has been a benefit for us and we are still able to provide the same level of service. It has been especially useful with attracting people to work for the City.

Anderson: Boulder City is on a four-day work week also and it seems to work just fine.

Valentine: The County has some departments where they are able to offer four-day work weeks for the employees. We generally offer alternative work weeks, but in terms of not having the doors open every day of the week, I think it would be very challenging, just by virtue of having 38 different departments doing 38 different things trying to impose something like that county-wide, I think might be impractical.

Green Building

The participants agreed that municipalities should be leaders in sustainable development and green building, but that capacity and resources are often harsh realities to this goal.


Brennan: Do you believe our municipalities have a responsibility to be a leader in green building?

Ellington: All of our new buildings are going to be LEED certified and we are making attempts at going back and retrofitting our existing buildings.

Holecheck: For Mesquite, I can tell you that we work with the Utility of Overton Power District. Our Planning and Building Department is working very closely on questions such as; do we need changes in ordinances or codes? Currently, when a contractor or developer comes into the Building Department in Mesquite, we actually give them a packet of available Web sites they can go to for tax credits. So yes, we have begun to look at being more ‘green.’

Cranor: There are a lot of different areas that we are looking at in the City for renewable energy and sustainability. We are doing a lot of things to our Utilities Service Department, for example we have converted a million square feet of turf within the City to xeriscape.

Holecheck: I think we can be the leaders. I think municipalities can show people that it is easier than they think being ‘green.’ We added solar at our recreation building and also replaced grass with artificial turf, so I would definitely say we are making progress.

Transportation

Tax revenues are depressed and are expected to continue to decrease in the future, dramatically affecting highway funds. The leaders voiced their concerns and frustrations.


Brennan: What do you see as being the most concerning regarding transportation issues?

Holecheck: Our transportation needs are going to take a public/private partnership. With monies so tight it is really the only option.

Anderson: The federal funds aren’t going to be there like they were in the past. We have such a need for highway improvements, whether it is our bypass in Boulder City, the corridor to California that gets so crowded or just the bottlenecks we have in the town completing the I-215 Beltway. These are huge projects and we are going to have to find other ways to fund them than the traditional methods of the past.

Rosenquist: I think there is a ‘good news bad news’ thing going on right now. The bad news, especially in regard to road maintenance, is we have got the mileage of the fleet continuing to increase. Then you combine that with the gas prices which are causing people to drive less and less. That means less gallons of gas sold, less taxes on those gallons of gas and that's where all road maintenance funds come from. Those tax revenues are going to be continuing to go down in the future. Now the good news is that if you do have any money to build anything currently, the bids come in really good due to the slow down in the economy.

Holecheck: For those of us like Las Vegas and Mesquite, who depend on tourism, roads are critical to that interplay between Nevada and California.

Jeff Wells: I think future expansion to ease the overcrowding might be delayed depending on how much money has been taken and will be taken.

Ellington: I am concerned about all of the approvals for more high-rise, mixed-use and multi-family towers that are going to drastically increase the density of the urban area and our lack of a good mass transit system.