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Boulder City councilwoman finds ways to cut $360,000

Posted by: By Mike Trask

Posted: April 18, 2008

It was time-consuming work, but City Councilwoman Linda Strickland figures it ultimately could be worth about $9,000 an hour to Boulder City — if her colleagues go along with her proposed $360,000 in cuts in next year’s $24 million budget.
“I spent literally about 40 hours going through line by line,” Strickland said.
Her proposals include a 10 percent decrease in travel and training spending in all departments. She also proposes trimming nine employees’ car allowances.
Strickland said she thinks training can be accomplished more efficiently and questioned the need for car allowances in a small city where you can walk to most places.
Strickland also had proposed cutting the city’s one-person public information office, noting that other small towns in Nevada do not have public information officers. However, after she got little support from other council members, the department and its roughly $100,000 annual budget is off the chopping block.
•••
North Las Vegas residents upset over plans to build hundreds of apartments in their neighborhood have two months to prepare for their next battle.
The Planning Commission’s review of a controversial 660-unit apartment complex at Deer Springs Way and Revere Street was delayed this week until May 28.
The project is the second apartment complex proposed by Pardee Homes within a half-mile area. Last week, the City Council voted 3-2 to allow plans for a 320-unit complex to proceed at Centennial Parkway and Revere.
Council members and the city attorney said a 1988 development agreement with Pardee forces the city to allow single-family, commercial or multifamily development on several parcels in the Eldorado community.
If the city were to try to stop the apartments, it likely would lose an expensive court battle, officials say. But some residents, who fear that the introduction of so many apartments in an area filled with single-family homes could harm property values, have been urging the city to fight the apartments at all costs.
The Planning Commission will make a decision on the site review plan. Its decision can be appealed to the City Council, and almost certainly will be.
•••
Boulder City held a series of meetings this year to discuss establishing stricter rules for parking RVs and other large vehicles on city streets.
Some residents say the vehicles are eyesores that pose safety hazards for pedestrians and drivers.
The City Council decided the only change needed was for police to start enforcing existing parking laws. The city code allows registered vehicles to be parked indefinitely in front of their owners’ homes. But they cannot be parked elsewhere in the city for more than a day.
Police have been issuing warnings to the owners of illegally parked vehicles. By this summer, the warnings will be replaced by tickets.
The city is considering taking another safety step.
The council has asked a safety committee to consider making some of the city’s narrow residential streets one way to make it easier for drivers to navigate around parked RVs.

INFLATION SQUEEZE: Prices for food still climbing

Posted by: By ELLEN SIMON

Posted: April 18, 2008

NEW YORK -- Steve Tarpin can bake a graham cracker crust in his sleep, but explaining why the price for his Key lime pies went from $20 to $25 required mastering a thornier topic: global economics.
He recently wrote a letter to his customers and posted it near the cash register listing the factors:
• Dairy prices driven higher by conglomerates buying up milk supplies.
• Heat waves in Europe and California.
• Demand from emerging markets.
• The weak dollar.
The owner of Steve's Authentic Key Lime Pies in Brooklyn said he didn't want customers thinking he was "jacking up prices because I have a unique product. I have to justify it."
U.S. consumers wrestle with the worst food inflation in 17 years, and analysts expect new data on Wednesday to show it's getting worse. That's putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases.
U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the past 15 years, the U.S. Department of Agriculture says. The agency says 2008 could be worse, with a rise of as much as 4.5 percent.
Higher prices for food and energy are again expected to play a leading role in pushing the government's consumer price index higher for March.
Analysts say Wednesday's Department of Labor report will show the Consumer Price Index rose at a 4 percent annual rate in the first three months of the year, up from last year's rise of 2.8 percent.
For the U.S. poor, any increase in food costs sets up an either-or equation: Give something up to pay for food.
"I was talking to people who make $9 an hour, talking about how they might save $5 a week," said Kathleen DiChiara, president and CEO of the Community FoodBank of New Jersey. "They really felt they couldn't. That was before. Now, they have to."
For some, that means adding an extra cup of water to their soup, watering down their milk, or giving their children soda because it's cheaper than milk, DiChiara said.
In the Las Vegas Valley, organizations that help feed needy families also are feeling that pinch.
"It's a very hard time," said Sharon Mann of Catholic Charities of Southern Nevada. "We're expecting the summer to be even worse."
Mann said the charity's Community Food Pantry, which hands out free bags of food to families, has seen a 60 percent rise in need since last year.
"It's because of everything -- foreclosures, gas prices, growth, food prices," Mann said. "When June and July hit, you add air conditioning costs. We're seeing a progression of food needs, and it's tough to keep it on the shelves."
Mann said Catholic Charities handed out 624 bags of groceries in March to families who visited the campus at 1501 Las Vegas Blvd. N.
U.S. households still spend a smaller chunk of their expenses for food than in any other country, 7.2 percent in 2006, according to the USDA. By contrast, the figure was 22 percent in Poland and more than 40 percent in Egypt and Vietnam.
In Bangladesh, economists estimate 30 million of the country's 150 million people could be going hungry. Haiti's prime minister was ousted over the weekend after food riots there.
Still, the higher U.S. prices seem eye-popping after years of low inflation. Eggs cost 25 percent more in February than they did a year ago, according to the USDA. Milk and other dairy products jumped 13 percent, chicken and other poultry nearly 7 percent.
USDA economist Ephraim Leibtag explained the jumps in a recent presentation to the Food Marketing Institute, starting with the factors everyone knows about: sharply higher commodity costs for wheat, corn, soybeans and milk, plus higher energy and transportation costs.
The other reasons are more complex. Rapid economic growth in China and India has increased demand for meat there, and exports of U.S. products, such as corn, have set records as the weak dollar has made them cheaper. That's lowered the supply of corn available for sale in the U.S., raising prices here. Ethanol production has also diverted corn from dinner tables and into fuel tanks.
Soybean prices have risen as farmers switched more of their acreage to corn. Drought in Australia has affected the price of bread, as it led to tighter global wheat supplies.
The jump has left people in the food business to do their own explaining. Twin Cafe Caterers in lower Manhattan posted a letter on its deli cooler: "Due to the huge increase of the gas, the electricity, the water and all the other utilities, we had to raise the prices a little bit." It went on to say that all its food prices have risen, too.
For some Americans, the resulting increases might be barely perceptible.
For the poorest U.S. families, the higher costs might mean going hungry. A family of four is eligible for a maximum $542 a month in food stamps, which never lasted the whole month before, DiChiara said.
"Now food stamps go fewer and fewer days of the month," she said.
The Food Bank got a letter of its own from a vendor. Its grim message: Sorry, but prices will be increasing 20 percent because of food inflation.
Review-Journal writer Lynnette Curtis contributed to this report.

Audit: Take-home vehicles issued to county officials who don’t need them

Posted by: By Tony Cook

Posted: April 18, 2008

Nineteen Clark County workers — many of them supervisors — were given round-the-clock county vehicles they do not need, an internal county audit found.
The county’s 106 take-home vehicles are intended to be for workers who frequently respond to emergencies at night and on weekends, but auditors found that many responded to after-hours calls only a few times a year — and in 11 cases not at all.
None of the 19 workers was called back more than five times during the 2005-2006 period covered by the audit.
In fact, payroll records and emergency call logs suggest that when some workers and supervisors did get after-hours calls, they didn’t respond for days or contacted someone else to resolve the situation, according to the audit.
One notable name popped up among those who didn’t need their vehicles — Clark County Assessor Mark Schofield.
“Since his work is performed only during office hours and he does not respond to emergencies, it is unnecessary for him to maintain his 24-hour, unmarked vehicle,” auditors wrote.
Schofield said he decided before the audit started in February 2007 to put the county-owned 1998 Ford Explorer back into his office’s vehicle pool. He’d purchased a personal vehicle in January 2007, he said, but didn’t return the Explorer to the county’s Automotive Services Department until late February or early March 2007.
The audit also found that, under state law, six vehicles — including Coroner Michael Murphy’s and County Fire Chief Steve Smith’s — should not be unmarked, a designation reserved primarily for law enforcement vehicles.
The county can apply for unmarked vehicle status from the state, but must provide justification. Auditors couldn’t find any such paperwork and the county’s automotive services manager said he was unaware of the state law governing the issue.
Additionally, more than a dozen employees were not taxed for their personal use of county vehicles. Others were taxed, but improper calculations were used.
Laughlin Town Manager Jacquelyne Brady, for example, drove a county-owned 2004 Chevrolet Blazer but did not submit mileage logs to the county’s payroll department. Because she drove the vehicle for personal use, the county adjusted her tax form to reflect an additional $15,000 in taxable income.
In a written response to the audit, County Chief Financial Officer George Stevens said future applications for take-home vehicles will require documentation showing how often the employee is called in after hours.
County officials think the coroner’s vehicle should remain unmarked, but the fire chief has decided to mark his vehicle, Stevens said.
Despite the audit’s unfavorable findings, the results show improvement since a previous audit.
A 1999 review found that 60 of 79 round-the-clock vehicles were assigned mostly to managers and senior-level supervisors who didn’t really need the vehicles for emergency responses.
“This practice results in a significant unnecessary expense to the county,” auditors said at the time.

Analyst says economy will stay down for most of 2008

Posted by: BY HUBBLE SMITH

Posted: April 18, 2008

One thing Jeremy Aguero has learned as a research analyst is that tomorrow looks a lot like today.

He examined four periods of economic downturns in Las Vegas, including the past 12 months, and found that nearly every key indicator dropped each time.

The only exceptions this time are total employment and visitor volume, both of which gained modestly, the principal of the Applied Analysis financial consultancy said during 2008 Las Vegas Perspective, an economic forum held April 3 at the Rio.

Population growth, taxable spending and new housing permits are all down in Las Vegas and the unemployment rate is up to 5.4 percent, he said.

"When will we hit the bottom? I get asked that a lot," Aguero said. "November 2008."

That's a fairly optimistic outlook considering the onslaught of negative economic news. Jobless claims rose to more than 400,000 last week, the highest level in two years. Clark County had a record 6,152 preforeclosure filings in March. Soaring gasoline prices threaten to limit visitation to Las Vegas and cut into disposable income.

Consumer-based businesses are "rightsizing" as spending slows, Aguero said.

"Businesses are going to have to find a sustainable equilibrium when consumers don't have that $50,000 equity to take out of their homes," he said.

The housing market will hover around the bottom for the next six to nine months, following the "U" shape that Home Builders Research President Dennis Smith alluded to at his recent housing outlook, Aguero said.

Expect a full recovery of the housing market by 2010 and likely a shortage of residential units by the end of that year, reversing today's glut of 23,000 homes for sale. Aguero said Las Vegas will need a quarter million new residential units over the next three years as 40,000 to 100,000 jobs are added to the economy.

The 39 million visitors who come to Las Vegas each year will pick up the slack in some areas of the local economy, Aguero said.

"They pay a lot of taxes. Don't tell them," Aguero said. "They gamble, we tax them. They eat, we tax them. They stay in a hotel room, we tax them. We tax them when they get off the plane and we tax them again when they get on the plane."

Nevada Development Authority President Somer Hollingsworth, meanwhile, said 50 percent to 60 percent of the state's general fund comes from the resort industry. It's an incredible revenue source that's helped Las Vegas weather past recessions better than other parts of the nation, he said.

The development authority's efforts to diversify the economy are working, Hollingsworth said. In 1999, 24 percent of the local work force was in gaming and hotels. That number dropped to about 19 percent in 2007.

The five-year employee economic impact from that diversification is $5.2 billion he said.

Aguero presented demographics that might surprise some people. Las Vegas gets knocked for low-paying service jobs, yet the median household income here is $53,000, compared with the national median of $48,000.

Although the rate of population growth is the lowest it's been in a decade, there are still about nine people an hour moving to Las Vegas, Aguero said. Also, 31 percent of households in Las Vegas speak a language at home other than English.

Hubble Smith writes for the Business Press' sister publication, the Las Vegas Review-Journal. He can be reached at hsmith@reviewjournal.com or 383-0491.

Layoffs not driven by downturn, casino says

Posted by: By Liz Benston

Posted: April 18, 2008

MGM Mirage sought to quell fears Tuesday that it is slumping badly in the economic downturn, saying the layoffs it announced this week had little to do with declining business.
The vast majority of the roughly 400 manager positions cut companywide would have occurred even if the economy were booming, MGM Mirage Chief Operating Officer Jim Murren said. The economic downturn did increase the number of layoffs, however, Murren said.
“I don’t want to minimize the fact that the economy has affected MGM,” he said. “We’d prefer to have the economy we had in ’07 and ’05.”
The company’s swift move to clarify its layoff announcement indicates the level of concern among investors and the casino industry and its workers about Las Vegas during the downturn. Business is off on the Strip, although so far the declines have been relatively small.
MGM Mirage is Nevada’s largest casino company. Murren said its cost-cutting initiative began shortly after he was promoted to chief operating officer — a move that triggered a top-down reorganization of a company that had previously been run as two separate entities, MGM Grand Resorts and Mirage Resorts.
MGM Mirage was formed from MGM Grand’s acquisition of Steve Wynn’s Mirage Resorts in 2000. In 2005, MGM Mirage swallowed Mandalay Resort Group by divvying up Mandalay properties between the two operating units.
“We found many redundancies that were a hangover from the Mirage and Mandalay acquisitions,” Murren said. “We extracted a lot of value from these deals ... but there was a substantial amount of further benefit that we couldn’t have accomplished under the old corporate structure.”
Besides the layoffs, the company has streamlined its interactions with vendors and has reorganized several departments, including technology, purchasing, design and construction, which are like “major companies in themselves,” Murren said. “This is one chapter in a very long process that will be happening as long as I’m here.”
The layoffs, identified after months of analysis, affect about 50 corporate-level managers, with the remainder working at individual properties. About 5,000 of MGM Mirage’s roughly 67,000 employees are management level.
The company hopes to generate more than $200 million in savings and additional revenue each year from the initiative, Murren said.
However, some Las Vegas veterans say the damage from layoffs isn’t worth the benefits. In an interview Tuesday, Steve Wynn said he has no plans to lay off workers and has never done so, preferring more gradual moves such as cutting payroll through attrition, reducing hours of workers and seeking volunteers for days off when business is slow.
“It’s a bad idea, in my opinion, because the people who don’t get laid off think, ‘Who’s next?’ It frightens the workforce,” Wynn said.
Business is slower at Wynn’s high-end property because even the wealthiest customers are being more cautious with their money. But layoffs aren’t necessary because the company has cut its workforce by 300 through attrition, Wynn said.
At Harrah’s Entertainment, about 100 workers lost their jobs when Bally’s closed its buffet recently because business was slow. Harrah’s had laid off as many as 500 corporate-level managers as part of its own efficiency effort, which occurred over many months ending in mid-2007. The cutbacks, like those at MGM Mirage, were controversial.
Harrah’s employees thought the layoffs stemmed from the company’s desire to be more attractive to investors, but executives vehemently denied any connection to the coming acquisition by private equity companies. Executives said the cuts were intended to reduce a bloated workforce and had been in the works before acquisition talks began.
MGM Mirage says business volume in the first quarter was up slightly from a year ago. Harrah’s also suggests that volumes appear to be improving rather than declining.
The dominant locals casino operators Station Casinos and Boyd Gaming Corp. have laid off workers because of the economic slowdown. Neither company has quantified the layoffs, though analysts say they were expected because the mortgage crisis has disproportionately hurt the Las Vegas economy.
How the economy is affecting rank-and-file workers on the Strip is less clear.
The Culinary Union, which represents more than 50,000 workers on the Strip, said layoffs and reduced hours through January and February were largely typical for the time of year.
The effect of the economic slowdown on workers will become more clear in coming weeks because workers who were let go during slower months would expect to be rehired now, when business typically picks up again, Culinary Union Political Director Pilar Weiss said.

Washoe County ponders future court complex

Posted by: RGJSTAFF REPORT • APRIL 15, 2008

Posted: April 18, 2008

Washoe County commissioners are starting to plan a $240 million-$280 million courts complex to be built in downtown Reno over the next 20 to 30 years.

The complex would be on part of the county’s Pioneer Inn property south of the Washoe County Court House on Virginia Street.
The county assembled the three acres before voters in 2000 overwhelmingly rejected a $86 million bond sale to build it. The land is used for parking.
In future workshops, officials will decide whether to renovate existing courts buildings downtown in five or six years and how much of the three acres to use for courts. More space could be required if family courts are moved to the site from 1. S. Sierra St. Another issue is whether to add two floors at 1 S. Sierra St.
Financing would ranges from conventional debt financing using existing resources, ballot initiatives, legislative appropriations or seeking authorization to raise taxes.