City May Declare a ‘Fiscal Emergency’ to Void Union Contracts

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In North Las Vegas, a financially battered city with many abandoned homes, the city council will consider declaring a fiscal emergency.

When cities declare emergencies, the reason is generally a natural disaster of one kind of another — tornado, flood, fire — or at the very least a man-made event that puts people in imminent physical danger, like a riot. But officials in the town of North Las Vegas are looking to use a law designed for those sorts of emergencies to address its fiscal crisis.

According to the Associated Press and the Las Vegas Review-Journal, the city council in North Las Vegas — a municipality of some 200,000 residents located to the north and east of the gambling mecca, and the fourth largest city in Nevada – will vote this week on a proposal by City Manager Tim Hacker that would declare the town a financial disaster area. If it passes, the move would allow the city to void union contracts. But more importantly, it could set a precedent for other cities to do the same.

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The city is trying to force a number of unions to give up scheduled raises and benefits so it can cut spending and balance its budget. North Las Vegas officials have said that in order to deal with the city’s financial woes, it will either have to lay off hundreds of cops and firefighters or manage the crisis through actions legitimized through emergency law. They argue that layoffs would jeopardize public safety, so another approach is needed.

While city officials argue that the financial situation is so bad that emergency action is needed, it’s unclear whether the move would be legal.

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It appears that North Las Vegas would be the first U.S. city to use a state of emergency to address financial issues. One public affairs professor told the Las Vegas Review-Journal: “It’s very unique. … It would be rare for something other than a fire, flooding, a 9/11-type situation.” Other officials say that some cities have laws allowing them to suspend unions’ collecting bargaining contracts during crises just like this one. Still, union officials are already saying that they would take legal action if the measure passes.

Considering the situation many U.S. cities are in, the idea has been batted around elsewhere. Recently an article in the online journal California Public Employee Relations analyzed the legal basis for declaring a fiscal emergency and the criteria public agencies would need to meet for the move to pass legal muster, including proving that an actual emergency exists; showing that an agency has taken reasonable steps to address the issue before declaring an emergency; and demonstrating that the moves serve an important public purpose and that they’re tailored to deal with that specific emergency.

Already a number of city council members have publicly backed the move, which will be voted upon on Friday. If it’s approved, expect a long fight both inside and outside of the courtroom.

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