Financial "State of Emergency" Declared in Nevada

Posted by - Monday, June 25th, 2012

A law in the state of Nevada has allowed one city to declare an unlikely state of emergency.

Though the law specifies situations “such as riot, military action, natural disaster or civil disorder,” in North Las Vegas the disaster is fiscal emergency.

The city has been struggling for years with financial problems, and some wonder why officials didn't see this coming. With a hard blow by the recession and declining property taxes complimenting rising expenses, jobs and salaries are falling.

Foreclosures abound at a rate of roughly one in 195 homes.

And the city has a budget gap of $30 million.

The declaration of emergency is unusual in a situation like this, even if it will save the city approximately $9 million. But City Council member Wade Wagner assured Fox News it was entirely necessary:

“We are in a fiscal emergency. North Las Vegas is ground zero basically for foreclosures in the nation. There are only a handful of places that have been hit as hard as North Las Vegas. So because our property taxes have declined so much, we really had to invoke this.”

The city grew in the decade between 2000 and 2010, actually doubling its population. Spending increased on community construction projects like parks and recreation centers. And suddenly the city has found itself in its own hole, grasping for a way out.

Labor unions may be affected by the move. City officials are faced with the necessity to choose between layoffs, particularly in the public safety sector, and the suspension of union contracts.

If union contracts are withheld, the city will have to raise pay, something that cannot be done without eliminating an estimated 217 jobs.

But residents of the city would forgo a heavy public safety sector if it meant the libraries and recreation centers stuck around.

Unions, meanwhile, have been fighting to maintain their contracts without losing their jobs. A union of police supervisors is actually attempting to sue the city.

From Front Page Mag:

The union contends that “the city's attempt to use its financial mismanagement to declare an emergency...is an unlawful attempt at breaching the NLVPSA's labor agreement through a mechanism of statutory misinterpretation when the city could not obtain its desired results through good faith bargaining.” They want the court to force the city to “completely honor” its agreement with the union. In addition, they want damages representing any losses incurred by union members, plus interest, and attorney's fees.

The city is struggling to resolve the fiscal issues in the best manner possible, with officials, residents, and unions all engaged in the battle. For now, North Las Vegas, Nevada's third-largest city, remains a disaster area.

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