Reno finance chief warns of multi‑million dollar shortfall, proposes fee increases and vacancy savings

Finance Director Vicky Van Buren told the Ward 5 Neighborhood Advisory Board that the city's slow revenue growth has produced a persistent budget gap and that leaders must choose between reducing services, raising revenue or both. "There's cut expenses. You can increase revenues or you can do a combination of both," Van Buren said, summarizing the limited options available.

Van Buren described the city's fund-accounting structure and said the adopted total city budget is just over $1 billion, with the general fund about $321,000,000. She said recent years of flat consolidated-tax (CTAC) receipts and declines in franchise fees have removed compounding growth the city once expected and left the city more reliant on one-time sources to balance budgets. "We had a gap when we put everything together about $24,000,000 last year," she said, adding that the current adopted budget used about $9.5 million in one‑time funds and $16 million in reductions to balance that gap.

For the fiscal year 2027 projection, Van Buren said the city is working to close a remaining deficit she estimated at about $4.4 million while holding current staffing levels and the 28 positions that remain frozen. The department has also built a vacancy-savings assumption into next year's estimates to capture savings when positions are unfilled rather than relying on one-time funds later.

Van Buren described a suite of options under consideration to shore up reserves. One concrete item she said she will ask council to consider is increasing the sanitation (waste management) franchise fee that the city controls from 8% to 14%, which she estimated would generate about $5 million annually. Van Buren said that change would translate to roughly a $4 increase per quarter for a typical 96‑gallon residential bin, or about $16 a year per household.

She also described longer‑term risk in the city's 10‑year projection: without substantial revenue changes or spending reductions, the model shows the city's fund balance declining toward cash‑flow stress levels. Van Buren highlighted tools the city used this year — zero‑based budgeting across departments, deferring some long‑term liability contributions, and continuing to freeze positions when needed — and said council must weigh options that could include franchise‑fee changes, state-level tax reform or other measures that are outside city control.

Board members asked questions about the role of CTAC (consolidated tax), the influence of tourism, the causes of the spike in 2021 revenues and tradeoffs of raising franchise fees. Van Buren said the 2021 CTAC surge largely stemmed from pandemic-era federal and state spending flowing through the economy and cautioned that flat revenues are nearly as damaging as a sharp drop because they remove compounding future growth. On redevelopment incentives such as those used in the Grand Sierra redevelopment agreement, Van Buren explained that tax-increment financing channels new growth in a redevelopment area to a redevelopment agency to fund capital projects rather than delivering immediate general-fund revenue.

The board did not vote on any budget items at the meeting. Van Buren said she will bring a specific franchise‑fee item to the city council agenda for consideration at an upcoming meeting.