Because of the downturn in the economy, the city of Las Vegas, like other state and local governments across the country, is facing some budget challenges. The city's primary sources of revenue, sales taxes and consolidated taxes, are down dramatically. City leadership could see this trend developing several months ago, so last spring the City Council directed the staff to undertake an initiative we've called the Fundamental Service Review (FSR). The effort was to assess what the city of Las Vegas should or should not be doing as an organization, and where the organization could save money. Employees at all levels of the organization were asked to provide suggestions and solutions.

Unlike the federal government, the city cannot operate with a deficit budget. The same as any business or household, the revenues of the city must outpace expenses. To assure that will happen, the city is looking to cut about $30 million from the budget in the next fiscal year, and as much as $150 million over the next five years. The city is already cutting $20 million from the current fiscal year's budget.

On Oct. 6, the City Council held a special all-day meeting to discuss a staff report on the FSR and give direction on how to deal with our declining revenues. The mayor and City Council unanimously approved the following direction to city staff:
1.FSR efficiency reductions that do not result in reductions in fulltime staff
        Eliminate $4.5 million in vacant positions
        Eliminate $1.9 million in non-labor costs
2. Implement an additional $20 million in non-labor budget reductions in the current fiscal year
3. Pursue organizational restructuring and strategic service changes that do not cause reductions in fulltime staff
4. Suspend the 12% city reserve fund balance policy allowing the fund balance (reserve) to drop to 10%
5. Phase in fee increases over the next several years
7. Delay capital improvement projects that will require additional staffing for one to two years
8. Work with city's four labor units to reduce the annual growth in employee compensation

Additionally, the mayor gave direction for the staff to report on the progress made by Dec. 3, 2008.

To see the agenda for the Oct. 6 special City Council meeting, listen to the audio recording of the meeting or view the entire FSR report prepared by the city staff visit the Meetings and Agenda Web page.