Reno council opens FY2026 budget workshop; finance director outlines $24 million baseline gap and short-term fixes

The Reno City Council on March 5 opened its first FY2026 budget workshop as Director of Finance Vicki Van Buren presented a baseline showing general‑fund revenues of about $317 million and a projected budget gap of roughly $24 million if the city maintains current staffing and service levels.

Van Buren said the budget “is the tool that turns strategic goals into reality,” and told council members the gap stems mainly from flat consolidated (sales) tax revenues, slower growth than expected in other receipts, and rising salary and benefit costs that now make up about three‑quarters of general‑fund spending.

Why it matters: the gap affects core city services and staffing. Van Buren and City Manager Bryant emphasized the priority of avoiding layoffs while narrowing the gap; staff proposed using one‑time capital funds, reducing nonessential capital spending, holding some vacancies and trimming services and supplies to limit impacts on public safety and day‑to‑day operations.

Van Buren said the city is seeing essentially zero growth in consolidated tax after a multi‑year runup around COVID stimulus years. By contrast, property tax—about 28% of general‑fund revenues for the city—has continued to grow and is projected near 7–8% this year. “Without growth in those areas, really the other areas don't grow that much,” Van Buren told the council.

The finance director walked the council through the numbers: the adopted baseline for next year assumes current staffing and contractual obligations; salary and benefits represent about 76% of general‑fund expenditures and are projected to rise further, in part because of recent PERS rate increases. Staff presented a menu of options that, combined, would close most of the gap but not all: department‑level reductions to services and supplies (estimated roughly $3 million), eliminating contingency ($1 million), reduced capital and fleet replacement funding, and use of available one‑time balances (about $8 million identified) to smooth the shortfall.

After applying those measures staff estimated the remaining shortfall at about $3.7 million, not including three pending items noted by Van Buren (IAFF bargaining‑unit reopeners, the FLSA overtime study, and any further PERS changes). “The goal from the beginning has been to keep people employed—that has been the priority,” City Manager Bryant said during council discussion.

Council members pushed staff on details and next steps. Councilmember Rees asked for continued frequent financial updates and praised the staff for early actions that reduced the current‑year deficit. Councilmember Anderson and others noted declines in franchise fees (utility and cable franchise receipts) and urged caution before considering fee increases because state law caps some franchise limits.

Key staff estimates and proposals discussed at the workshop (staff figures presented to council): - General‑fund total resources (baseline): approximately $317 million. - Baseline gap before policy choices: roughly $24 million. - Identified reductions and one‑time offsets: roughly $20 million (including $8 million of one‑time capital/sale of property balances, $4 million in service/supply reductions, $4 million in benefit savings from vacant positions and other measures, and reduced fleet/capital replacement). After those items staff estimated a remaining gap of $3.7 million. - Current full‑time positions (citywide): about 1,500; general fund: about 1,200; about 848 positions classified as public safety (police, fire, dispatch), representing roughly two of every three general‑fund positions. - Salary and benefits share of general‑fund expenditures: about 76% in the current baseline, rising toward 80% under certain allocations. - Consolidated (sales) tax: currently trending flat (0% growth for the year in the state reporting used by staff); the state’s projection for next year used in the baseline was 2%. - Property tax: trending about 7–9% this year (staff used ~7.7% in the draft baseline), driven by new development on the tax rolls even though Nevada’s property tax system limits annual increases for existing properties.

Staff proposals for council guidance included: directing departments to hold nonessential positions vacant where feasible; implementing a 5% reduction in services and supplies across departments (estimated ~$3 million); deferring some capital projects and reducing fleet replacement funding for one year; using identified one‑time funds and reserve balances to reduce near‑term budget pressure; and returning in April/May with final recommendations for budget adoption and a specific list of position freezes or program reductions if revenues do not improve.

Council action: after discussion the council voted to direct staff to move forward with development of the FY2026 budget and fee schedule based on council feedback. The motion passed with an affirmative vote by the council (motion carries). Staff will return with updates, including a March financial briefing, a March 26 presentation on the sewer enterprise fund, an April 9 financial update, and a May 5 workshop that will include capital project priorities and a May 21 public hearing on budget adoption.

What’s next: staff will bring revised projections and more detail on specific program impacts, position‑freeze proposals, and longer‑term implications of flat consolidated tax revenues. Van Buren and the manager said they will continue monthly briefings to council and will bring the mayor and council a recommended prioritization of reductions and one‑time options before the May public hearing.

Ending: Council members acknowledged the limited near‑term options and emphasized the importance of protecting public‑safety staffing while asking staff for clear, prioritized proposals about program reductions or temporary freezes to resolve the remaining gap.