North Las Vegas Needs Labor Vote on Budget, Moody’s SaysJames Nash
North Las Vegas may avoid a takeover by the state of Nevada if public employee unions ratify discounted settlements on an estimated $25 million judgment against the city for breaching labor agreements, Moody’s Investors Service said.
Nevada’s fourth-largest municipality reached tentative agreements with its unions for about $7.7 million in compensation, clearing the way for a balanced budget to be submitted for state review, Moody’s said yesterday. Spending cuts of as much as 20 percent would be required if unions reject the plan, Moody’s said.
The city had forecast a $24 million budget shortfall, equivalent to about 15 percent of operating revenue, according to Moody’s.
North Las Vegas, with $420 million of general-obligation debt rated Ba3, three steps below investment grade, faced insolvency after a Nevada District Court in January ordered the city to retroactively pay raises it had withheld after declaring a fiscal emergency two years ago.
“State intervention is less likely in the near term,” Moody’s analyst Peter Liberatore wrote in a credit note. “However, union members need to ratify discounted settlements assumed in the city’s tentative budget to alleviate fiscal pressures.”