Reno staff say proactive cuts and hiring freezes close current-year shortfall; next-year budget still faces roughly $25 million gap

Reno finance officials told the City Council on April 9 that the city expects a roughly $8.6 million general-fund revenue shortfall for the current fiscal year but also projects about $10 million in expenditure savings, creating a small positive variance for the year.

The shortfall is primarily tied to weaker-than-budgeted consolidated tax (C Tax) receipts, franchise fees and licenses and permits, Finance Director Vicki Bamgaren said: "we're projecting that we're gonna have a revenue shortfall in the current year of about $8,600,000." Bamgaren added that work across departments to hold vacant positions and trim operating expenses produced roughly $10 million in savings.

Why it matters: City leaders said the combination of early spending restraint and hiring freezes has kept the budget balanced for the current year, but the outlook for fiscal 2026 remains challenging after the final property-tax numbers arrived. Bamgaren told the Council that final property tax growth came in at 6 percent versus the 7.7 percent used during the preliminary budget build — a change that added about $1.6 million to the projected shortfall. Using the most recent numbers, the city has a roughly $25 million budget gap to close for FY2026.

Key details - Current-year: Finance presented a revenue shortfall estimate of about $8.6 million and estimated $10 million in expenditure savings (roughly $6 million of that in salary and benefits from frozen vacancies), producing an estimated $1.5 million positive variance for the year. - Next year: Final property-tax figures reduced expected growth to 6 percent (down from 7.7 percent), widening the previously reported budget gap to about $25 million. - Proposed balancing strategy: staff previewed a package that relies in part on about $8 million in available one-time funds, proposed reductions of roughly $17.6 million (mostly capital and operating), and an additional savings plan that includes freezing 20 currently vacant positions (estimated to save about $3.2 million) plus reductions to memberships, boards and commissions and council discretionary items.

Council reaction and next steps Council and staff said they will continue the budget workshops: the next scheduled workshop is May 5 with final budget adoption later in the month. Manager Jackie Bryant and Bamgaren briefed members that staff expects to propose a mix of one-time funding and recurring reductions and that some savings will be achieved by holding vacant positions, delaying capital and tightening operating budgets.

What remains unresolved Bamgaren and the manager noted there are still labor contract uncertainties and an unresolved federal FLSA issue that could change the final numbers. Council members asked for more detail on room‑tax allocations and whether some room‑tax funds could be reallocated to core municipal functions; staff pointed to a city ordinance (Ord. 5985) that governs some downtown room‑tax uses and said staff would return with clarifying legal language and options at upcoming workshops.

Ending Staff emphasized the budget presentation was an update and that more refined proposals for closing the FY2026 gap will be brought to council in the remaining workshops. Councilmembers asked staff to provide more detailed, itemized lists of proposed capital and operating reductions before the May 5 workshop so members could assess programmatic impacts in advance.