Finance director warns of multi‑year revenue shortfall, estimates $74 million lost growth since 2023

Finance Director Vicky Van Buren gave the Reno City Council a monthly update Aug. 27 that painted a cautious picture of the city’s general fund outlook, saying a prolonged slowdown in revenue growth has produced a compounding loss measured in the tens of millions of dollars.

Van Buren told councilmembers that four revenue sources — consolidated (sales) tax, property tax, franchise fees and business licenses/permits — provide most general‑fund growth. Consolidated tax (the city’s single largest discretionary revenue) has softened since 2022 and has not demonstrated the historic compounding growth the city relies on to fund services.

Using city models, Van Buren estimated that the cumulative loss of expected revenue growth from fiscal 2023 through fiscal 2027 is roughly $74 million. She explained the problem in plain terms: the city is not only missing current‑year revenue but losing the compounding growth that would have funded future services and pay increases.

Key figures and operational steps she described: - The city used one‑time funding to help balance budgets earlier in the cycle and, for the current budget, used about $9.5 million of one‑time funds and adopted $16 million in reductions to balance fiscal 2026 projections. - For fiscal 2025 (closing), Van Buren said consolidated tax was tracking flat or about 2% below the prior year as of May; a final closeout and audit are scheduled and staff expect to present unaudited results in late September and audited statements in December. - The finance office is planning monthly briefings and a deeper review of expenditures as the city builds the fiscal 2027 budget.

Van Buren emphasized that the city has tightened spending during the current fiscal year, holding many department service and supply budgets flat and using vacancy control to limit hires while continuing essential services. She noted that labor costs remain the largest single driver of the general fund and that modest revenue shortfalls can widen over time if compounding growth does not return.

Councilmembers asked for additional detail and follow‑up: Councilmember Martinez asked whether the city was doing everything possible to reduce costs and whether department spending‑control was underway; Van Buren said departments have been held to flat service‑and‑supply budgets and that a 5% reduction in those budgets was implemented during the last budget cycle. Councilmember Durer asked whether state reporting changes affected June receipts; Van Buren said the consolidated‑tax softening preceded the state’s accounting system change but acknowledged the state’s reporting shift has complicated month‑to‑month reconciliation and required the finance office to triangulate other economic indicators.

Ending

Van Buren concluded that the city is not in a recession but faces prolonged weaker growth and that staff will return with updated results, tighter spending analyses and fiscal‑year 2027 budget options. Councilmembers urged continued transparency and asked staff to present scenarios for worst‑case revenue performance so council can consider options early.