Las Vegas suburb finds it's out of aces

NORTH LAS VEGAS, Nev. —The alarming billboards appeared overnight on the street corners and empty lots of North Las Vegas, the hardest recession-hit city in the hardest-hit state in the nation.

"Warning: Due to recent police layoffs, we can no longer guarantee your safety!"

The billboards were put up by the North Las Vegas Police Officers Association.

Once the country's fastest-growing city, the middle-class haven of 220,000 outside Las Vegas is now teetering on the brink of insolvency. The state is threatening to take over the city.

The billboards came down after a court blocked mass police or fire layoffs, but the problems remain in the state's fourth-largest city. Property values have plummeted. After spending more than it earned for four consecutive years, the city will not be able to make payroll come October, state auditors said.

"Every single local government has problems. ... The way it looks to me is that their problems are much more severe," said Martin Leavitt, who oversees a state board investigating the city's financial predicament.

North Las Vegas mirrors Nevada's downfall in many ways. As construction cranes erected new casinos across Las Vegas starting two decades ago, would-be homeowners flocked to the suburb for its affordable prices.

The population nearly quadrupled, from fewer than 60,000 in 1990 to 223,394 last year. North Las Vegas earned the fastest-growing city title in 2007. Nevada was the fastest-growing state during the decade.

This year, the state leads the nation in bankruptcies, foreclosures and unemployment.

The collapse in North Las Vegas was sudden.

In 2005, more than 8,000 houses were built in the city. New construction dropped to 2,800 houses in 2008. Thousands of businesses within the city closed their doors as residents lost their houses, according to city records. Last year, about one in 15 homes in North Las Vegas was in foreclosure.

The city added more than 400 employees to keep pace with growth from 2006-08. That number and hundreds more were dismissed within three years. In all, North Las Vegas has eliminated more than 800 positions since 2009, when it had 2,260 full-time employees.

"We are sailing and there are days when the wind is in your back and there are days when the wind is in your face," Mayor Shari Buck said. "You just have to keep moving forward."

The state has given the city two months to close a $4 million budget gap. The city is required by law to operate with a balanced budget, but projections show it will have a $74 million deficit by 2015.

If a solution isn't found by October, the state could take over and begin a process that could take years to get the city back on stable footing, Leavitt said. A rarely used law would allow the state to manage spending, effectively sidelining the city council.