The North Las Vegas City Council made a courageous move on June 1 by standing up to the powerful public employee unions and giving the city manager the authority to discard portions of collective bargaining agreements in order to prevent devastating layoffs.
The firefighters and police unions had negotiated generous contracts with the city when property taxes were high and rising. Now that the housing market has collapsed and property tax revenues are lower, North Las Vegas is facing a $33 million budget deficit for the fiscal year beginning July 1. The city said the only way it could submit a balanced budget as required by law was to lay off 217 employees, including 57 firefighters.
The city didn’t have many options. Nevada law doesn’t allow a city to declare bankruptcy. Allowing the state to take over its finances, besides being a nightmare for its future economic development, would pretty much guarantee tax increases for already strapped North Las Vegas property owners and businesses.
City Manager Tim Hacker proposed an unconventional alternative based on Nevada Revised Statute 288.150, which says: “[A] local government employer is entitled to take whatever actions may be necessary to carry out its responsibilities in situations of emergency such as a riot, military action, natural disaster or civil disorder. Those actions may include the suspension of any collective bargaining agreement for the duration of the emergency.”
The city manager made a good case that North Las Vegas was facing an emergency that would place its citizens in danger, because laying off so many firefighters and police officers would threaten the city’s ability to provide life-saving services. Even Jeff Hurley, president of the local firefighters union, was quoted as saying, “We’re at a point where we can no longer provide adequate service to our citizens.”
It seems like in that case, the union would be willing to accept the city’s offer, which extends the firefighters’ salary freeze for another two years and discontinues a program allowing union members to sell back their unused days off. The city also asked for the option to furlough firefighters if necessary.
Are North Las Vegas firefighters insisting on cost-of-living increases because they’re underpaid compared to firefighters in other cities? Far from it. In fact, firefighters in North Las Vegas are not only paid more than average workers in their city, but they earn much more than firefighters elsewhere. Nevada Policy Research Institute (NPRI) conducted a study in August 2011 showing that Nevada firefighters are the highest-paid in the nation. Earnings for a full-time firefighter in North Las Vegas averaged $111,822 in 2010. Add in a benefits package totaling more than $52,000, and you arrive at total compensation of more than $164,000. I think most workers in North Las Vegas wouldn’t mind having their wages frozen at that number for a couple of years. And, according to NPRI, “These large retirement contributions allow a firefighter who joins at age 20 to retire by age 45 while drawing retirement benefits equal to 90 percent of his pay for the rest of his life.”
We all pay for the over-the-top compensation that union firefighters receive due to their sweetheart contracts. Apparently, their union bosses don’t care that other public employees may have to be laid off, or that public safety will suffer, as long as their members get what they want.
Of course, the unions will take this issue to court, and chances are they will win. But it’s encouraging that at least for one short period of time, one small group of people stood up to the unions. Good work, Tim Hacker and North Las Vegas!
Originally published in Nevada Business Magazine: http://www.nevadabusiness.com/2012/07/north-las-vegas-refuses-to-bow-down-to-union-pressure/