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The city of Reno’s budget forecasters know things are going to be bad as the coronavirus pandemic squeezes the city’s biggest sources of revenue.
They just don’t know how bad.
Playing a big guessing game, Reno Finance Director Deborah Lauchner told the city council Wednesday it may need to address at least a $6.5 million hole in this year’s budget and at least a $20 million hole in the budget that takes effect July 1.
But that’s just one of three possible budget scenarios that she is crafting.
“We do have a doomsday scenario and an OK scenario,” she said.
Lauchner didn’t say how much the “doomsday scenario” would cost the city.
No specifics were discussed on how to deal with any of three possibilities as Lauchner repeatedly told council members she will be shooting in the dark until at least late May when the first data on actual collections will be available.
“As we sit here today, how much cash on hand do we have…how long can we keep the lights on?” Councilwoman Neoma Jardon asked.
“I don’t know how long we can keep the lights on,” Lauchner said. “I don’t know what is going to happen with those revenues. I can’t really tell you that in this point in time.”
Lauchner stressed that the city still has cash on hand. The uncertainty is what will happen with future tax revenue.
“Nobody really knows,” she said.
On March 17, Gov. Steve Sisolak order casinos to close and also shut down non-essential businesses. The closures will affect city revenue from sales, gaming, room and property taxes.
But hard data won’t be available until May.
Hiring freeze at city, aid from feds should help. Layoffs are a last resort
To prepare, the city has implemented a hiring freeze. Savings from the vacant police and fire positions will be about $6 million, Lauchner said. The city also has a $2.9 million rainy day fund and will be receiving an unknown amount of aid from the federal stimulus package.
Lauchner said layoffs will be a last resort, but it’s important for the city to maintain the ability to reduce its workforce. To that end, she wants the city to reject a federal grant it had been counting on to help fund eight firefighter positions.
If the city accepts the SAFER grant, it will have to maintain a certain number of positions, limiting its ability to lay off firefighters.
The city’s budget for next fiscal year is due to the state in May. The council had been planning to present a mostly flat budget.
Now it could be at least $20 million short. Lauchner recommended waiting to amend that budget until this fall when the city is expected to have better data on revenue collections.
But council members wanted to begin taking steps now, and scheduled another budget discussion for its meeting on April 8..
Councilman Devon Reese said the city should be “aggressively conservative” now.
“We know that revenue is going to decrease,” he said. “We know it is not going to look pretty for us.”
Anjeanette Damon is the government watchdog reporter for the RGJ. You can reach her at firstname.lastname@example.org or follow her on Twitter @AnjeanetteDamon. If you care about shining a bright light on decisions made by your elected officials, please consider subscribing to the Reno Gazette Journal.
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