The City of Las Vegas, Nevada Budget Process
Sarah Molda
Missouri State University

The City of Las Vegas, Nevada Budget Process
In accordance with Nevada state Law, City governments in Nevada are created either by general law or special charter. The City of Las Vegas is a special charter city, and operates under a council-manager form of government as proscribed by Nevada Revised Statutes (NRS) Chapter 268, with our mayor elected at-large and six City Council members representing the 6 single member wards that represent the City. The vision of the City of Las Vegas is to be
“a world-class, vibrant, affordable, economically and ethically diverse, progressive city where citizens feel safe, enjoy their neighborhoods and access their city government. Its mission is to provide residents, visitors and the business community with the highest quality municipal services in an efficient, courteous manner and to enhance the quality of life thorough planning and visionary leadership.” (City of Las Vegas)

The Las Vegas city council oversees the general administration, makes policy, and sets budget. The council appoints a professional City Manager who is charged with the running day-to-day operations, with the City Managers office being responsible for the administration and operation of all municipal services for the City of Las Vegas as well as the oversight for all redevelopment and economic development. The City Manager's staff also tracks the progress of various projects, and maintains intergovernmental relationships with the federal, state and other local governments.

The City of Las Vegas Annual budget is prepared in accordance with Chapter 354 of the Nevada Revised Statutes. On or before April 15 of each year, the Las Vegas city council is required to prepare a tentative budget for the following fiscal year on forms prescribed by the Department of Taxation for the use of local governments. In accordance with NRS 354.600 the budget is required to include detailed estimates of the revenues, balances in other funds and other sources of financing for the budget year. As outlined by NRS 354.604 the city of Las Vegas is required to maintain: Governmental funds to include a General Fund; Special Revenue Fund; Capital Projects Fund; Debt Service Fund; and a Permanent Fund. Proprietary Funds: to include an Enterprise Fund; and Internal Service Fund, and the following Fiduciary Funds: Pension and Other Employee Benefits Funds; Investment Trust Funds; Private-Purpose Trust Funds; and Agency Funds.
Also included in the tentative budget; the City Council must include a list of any existing contracts, the projected expenditures for the contracts in the next 2 fiscal years and the reasons for the use of the people or services. The tentative budget is then submitted to the county auditor and filed for public record and inspection with the county clerk, and the city council secretary. A copy of the tentative budget is submitted to the Department of Taxation. At the time of filing, the City Council is obligated to provide notice of the time and place of a public hearing on the tentative budget. The notice is required to be published once in a local newspaper no more than 14 days and no less than 7 days prior to the date of the hearing. According to NRS 354.596 the notice of public hearing must state: The time and place of the public hearing, that a tentative budget has been prepared on appropriate forms and in the detail as outlined by the Department of Taxation, as well as disclose places where copies of the tentative budget are on file and available for public inspection.
The Department of Taxation will examine the documents submitted by the City Council for compliance with the law and with appropriate regulations, before submitting a written certificate of compliance or a written notice of lack of compliance at least 3 days before the public hearing. If the documents fail then written notice must indicate the manner in which the submitted documents fail to comply with law or appropriate regulations.
At the public hearing, the City Council will indicate any changes to be made in the tentative budget and votes to adopt a final budget by majority rule of all members of the council. If the city council fails to adopt a final budget on or before the required date of June 1 of each year, the budget adopted and used for certification of the combined ad valorem tax rate by the Department of Taxation for the current year, automatically becomes the budget for the following fiscal year. If a budget is adopted by default, the city council cannot reassess the budget without approval of the Department of Taxation. The final budget must be certified by a majority of all members of the city council, and a copy of it, together with an affidavit of proof of publication of the notice of the public hearing, is then transmitted to the Nevada Tax Commission.

Las Vegas was one of the cities hardest hit by the downturn of the housing market with 2012 marking the sixth consecutive year of home value declines. Home prices in the Las Vegas Valley have fallen more than 60 percent from peak values and foreclosure sales make up more than half of all home sales. The collapse of the housing sector meant that the City of Las Vegas lost approximately half of the City's taxable assessed value since 2009. (Final Budget 2012) Likewise, property tax revenues have been similarly affected, with the budget estimating that FY 2013 will bring in approximately 30 percent below that of 2009 levels. Another reason for the depreciated property tax revenue is a Nevada state law (NRS 354.59811) that caps the rate at which property taxes can increase: the city cannot raise property taxes beyond a self-imposed limit that is 11.2 cents per $100 below the allowable State imposed limit. When approved the overall FY 2013 Budget was expected to be $10.4 million short of expenditures, (Toplikar 2012) and the City Council made the decision to use money from the reserves to bridge the gap.
In past years the City of Las Vegas has had the need to cut positions and make major concessions in wages and benefits that lead to the city transitioning from a five-day to a four-day work week (Toplikar 2011). Instead the City has chosen to take more a stringent approach to the management of vacant positions. All vacant positions were evaluated and re-justified. Those positions approved by the City Council were funded at a discount to recognize expected vacancies and turnover, and any savings from vacancies was earmarked for use to help fund one-time costs or replenish fund balance (City of Las Vegas)
According to the FY 2013 Final Budget Report, The budget for the General Fund amounts to $468.8 million. Consolidated Taxes, makes up 50.7 percent of revenue and represents sales, cigarette, liquor, and motor vehicle tax revenues that is collected by the State and then distributed to counties and cities based on “a five-year backward averaging formula that considers assessed valuation and population” (City of Las Vegas). The second-largest revenue source is property tax, which makes up 16.9 percent of the cities revenue base is forecast to be $88.9 million, followed by licenses and permit fees at $74.7 million.

Table 1: FY 2013 Las Vegas Final Budget General Fund Revenues Overview REVENUES | | Property Taxes | $ 88,915,000.00 | Other Taxes | $ 3,912,965.00 | Licenses & Permits | $ 74,761,790.00 | Intergovernmental Resources | $ 431,637,997.00 | Charges for Services | $ 40,561,124.00 | Fines & Forfeits | $ 19,748,425.00 | Special Assessments | $ 1,120,000.00 | Miscellaneous | $ 12,466,157.00 | Total Revenues | $ 673,123,458.00 |

The Budget for Special Revenue Funds category totals $157 million. These funds are received from specific revenue sources meaning their use is limited to specified purposes. The majority of the revenues funding these programs are from intergovernmental sources, which also fund the City’s self-insurance, which includes workers compensation, liability and property damage insurance and employee benefit programs. A major expenditure for the City of Las Vegas falls to law enforcement. Serving both the City and Clark County jointly, the City is responsible for a portion of the Metropolitan Police Department (Metro) annual budget. For FY 2013, the cities share of Metro’s budget was $116.2 million. The city’s Detention & Enforcement Department also received funding of $3.8 million in revenue from other governmental entities in part because the facility is being used to house detainees the City, mainly by the Clark County, the US Marshals and Boulder City Police Department due to overcrowding or lack of their own facilities.

Table 2: FY 2013 Las Vegas Final Budget General Fund Expenditures Overview EXPENDATURES | | General Government | $ 122,595,671.00 | Judicial | $ 27,769,538.00 | Public Safety | $ 346,471,423.00 | Public Works | $ 141,546,469.00 | Health | $ 3,578,350.00 | Welfare | $ 100,000.00 | Culture & Recreation | $ 118,321,615.00 | Economic Development & Assistance | $ 52,982,702.00 | Debt Service-Principle | $ 31,626,049.00 | Interest Cost/Fiscal Charges | $ 27,287,193.00 | Total Expenditures | $ 872,279,010.00 |

Table 3: FY 2013 Las Vegas Final Budget
General Fund Balance Total Revenues | 673,123,458.00 | Total Expenditures | 872,279,010.00 | Excess of Revenues over (under) Expenditures | (199,155,552.00) | | | OTHER FINANCING RESOURCES | | Opersting Transfers In | 97,825,279.00 | Operating Transfers Out | (96,698,271.00) | Total Other Finaincing Resources | 1,127,008.00 | Excess of Revenues over (under) Expendatures and other Sources (Net Income) | (198,028,727.00) | FUND BALANCE JULY 1, Beginning of Year | 419,312,952.00 | FUND BALANCE JUNE 30, End of Year | 221,284,225.00 | TOTAL ENDING FUND BALANCE | 221,284,225.00 |

Other noteworthy expenditures include Professional Services, Utilities, Communication & Transport, Maintenance & Repairs, Vehicle & Equip Maintenance, General Supplies, Building Maintenance, and reimbursement to other Government Entities. A graphical representation (Images 1 and 2) showing Cost vs. Budget for all the General Fund Expenditures can be found on Page 9 and 10 of this paper taken from the City of Las Vegas website (http://www.lasvegasnevada.gov).
When conducting the research for this paper it was my intent to visit and speak with someone at City Hall, however, due to the City’s migration to a four-day workweek (Monday-Thursday), and Friday being the only day I had available to go down town, that unfortunately did not pan out. As a result all of my research was done online using the City website which I found rather difficult to navigate through in terms of finding current and relevant information. I’m assuming that one of the positions they may have cut in past years was that of their web designer, as a large portion of the data available is 3-5 years old, and quite obviously outdated. One of my main concerns with this is that although approved by the City Council there is no link to the FY 2014 Budget that goes into effect on 1 July of this year. | |

Image 1: City of Las Vegas Cost vs. Budget Graphical Representation

Image 2: City of Las Vegas Cost vs. Budget

References
City of Las Vegas. FY 2013 Final Budget. (n.d.). (Official City of Las Vegas Web Site). Retrieved June 20, 2013, from http://www.lasvegasnevada.gov

City of Las Vegas. Cost vs. Budget. (2013) (Official City of Las Vegas Web Site). Retrieved June 20, 2013, from http://www.lasvegasnevada.gov/government/25713.htm

TITLE 21—CITIES AND TOWNS NRS: CHAPTER 268 - LOCAL FINANCIAL ADMINISTRATION (n.d.). Nevada Legislature.

TITLE 31—PUBLIC FINANCIAL ADMINISTRATION NRS: CHAPTER 354 - LOCAL FINANCIAL ADMINISTRATION. (n.d.). Nevada Legislature.

Toplikar, D. (2011, April 6). Las Vegas looking at nearly $8 million budget deficit next year. Las Vegas Sun
Retrieved from http://www.lasvegassun.com/news/2011/apr/06/city-las-vegas-looking-nearly-8-million-budget-def/#ixzz2X0z19lpV.

Toplikar, D. (2012, May 15). Las Vegas City Council approves relatively ‘flat’ budget for 2013. Las Vegas Sun
Retrieved from: http://www.lasvegassun.com/news/2012/mar/28/las-vegas-city-budget-include-25-million-captial-p/#ixzz2WzD8wOJg