[media id=13 width=320 height=240]
[media id=2 width=320 height=240]
The West Wendover city employees union reportedly rejected a ten percent across the board pay cut proposed by the city administration to a plug massive deficit in the city’s budget informed sources told the Advocate.
Hit by a combination of over building, the Great Recession and an ‘unexpected’ 10 percent drop in population West Wendover is facing a sea of red ink, that must be drained before the start of the next fiscal year and cannot be fixed by printing more money.
“By law we have to balance our budget,” said Mayor Donnie Andersen. “And we have to work together to do it.”
At the heart of the city’s fiscal woes is the mortgage payments on the new city hall.
Originally slated to cost $5.5 million when first proposed four years ago the building was let out to bid for $7.5 million last year and since then additional cost is pushing the total cost of the project to the $8 million mark and perhaps beyond it.
But as the cost of the project increase the revenues projected to pay off the building loans either fell or were not realized at all.
With the onset of national recession two years ago, an estimated steady long term increase in tax revenue looks at least overly optimistic.
According to projections the General Fund revenue growth was expected to generally increase for the next 11 years.
Most of that increase was contingent on the Peppermill’s planned expansion and the company’s construction of a new mega casino/resort.
Those plans were however shelved shortly before construction on the new city hall began, first temporarily and then indefinitely. Now with the downturn in its third year prospects that West Wendover will see a new mega resort or dim to say the least.
The gloom however did not dissuade the council not only from going full speed ahead on the city hall but also with expanding city payroll and staff as well as pursuing city beautification projects that included building a still mostly vacant industrial park, Victorian style street lights and approving a new sewer plant.
In addition to those fiscal woes the city was hit with even more bad news this month when the US census reported that there are now 4,410 people in Wendover a drop of 6.6 percent from the 4,721 counted in 2000 and more importantly a drop of more than 10 percent from its estimated population of a bout 5,000 from the state demographers office.
West Wendover share in a number of state funds is either directly or indirectly determined on a per capita basis. Fewer people mean fewer dollars and the city is already strapped for cash.
In other words the hole West Wendover dug itself got a lot deeper.
While past commitment cannot be forgotten or forgiven the only options the city may have to balance its budget are to either to cut the pay of all its employees, layoff some of its employees, or raise taxes.
West Wendover has one of the largest staff and the biggest payroll of cities its size in the state.
West Wendover city workers make about the same as their counterparts in Elko.
The base salary of West Wendover City manager Chris Melville is less than $2,000 from being six figures and when benefits are taken into account, West Wendover has almost a dozen employees making in excess of $100,000.. The top three salaries paid in the West Wendover Police Department total about $400,000 in wages and benefits a year.
Over four times the size of West Wendover, Elko City salaries average just about five percent higher than those offered paid by West Wendover. And in several cases West Wendover city employees make much more than their counterparts in Elko.
If the local union turns down the request for a pay cut or only agrees to a much smaller one the council could still be left with a rather large deficit to manage and no painless way to do it.
And as a political force the local employees union is a power to be reckoned with. With spouses and adult children Wendover city employees make up between a fifth to a fourth of the electorate in the last election.
But while pay cuts could be seen as a stab in the back by the local employees union the alternative tax increase my be an even worse option for the council.
No matter where the hike is implemented it will hit the fragile Wendover casino industry, including the city largest tax payer, the Peppermill.
Like the rest of the Nevada gaming industry Wendover was devastated by the recession and while the rest of the nation begins an albeit feeble recovery gaming is still struggling.
Any new tax even one on consumption such as gasoline is sure not to be welcomed by the industry which has already cut expenditures to the bone.
A new consumption tax may also not be effective with Wendover, Utah across the border. If say a new gas tax pushes the price of a gallon above what could be had a block away in Utah most drivers could make a run for the border.
The only tax sure to increase city coffers would be a property tax hike. West Wendover has not increased its share of ad valorem in ten years but the expected opposition from the gaming industry and the populace at large could make that move just as unpalatable as a salary cut.