Reno Faces Tight Budget, but Plans No Layoffs

While the downturn in the economy is reducing expected revenues, Renoâ's City government was well enough prepared that it can continue delivering services at current levels with no proposed layoffs, Reno City Manager Charles McNeely told the City Council Wednesday.

McNeely explained that the City of Reno retains at least a four percent balance in its General Fund each year, and up to six percent in a stabilization fund to prepare for economic downturns or unanticipated expenses.

McNeely also described close oversight over expenditures like training and travel, and policies to maximize salary savings when people retire or leave a position vacant.

In 2002, the City of Reno had 7.5 employees for every 1,000 residents.

Today the City employees 7.2 people for every 1,000 residents.

Yet during that time period demands for City services like public safety, street repair and recreation have increased.

If current trends continue, including a slowing of revenues based on sales tax and residential construction permits, McNeely expects a $3.3 million shortfall in anticipated revenues by June, 2008.

The Manager outlined a plan to delay filling vacant positions and postpone capital projects, to create $5 million in savings in the current fiscal year. This formula leaves $1.7 million to address any unanticipated shortfalls.

Saving more than the City is expected to need is consistent with McNeelyâ's long-term conservative financing philosophy. He explained to the City Council that budgeting conservatively even during the housing boom prepared the City of Reno to handle bumps in the economy without resorting to layoffs or drastic, across-the-board budget cuts.

McNeely will report to the City Council again in a few months, to review the action plan and provide an update on the situation at that time.

The presentation is available online here:

...or easily accessible by visiting and clicking on the news release entitled "City Faces Tight Budget, but Plans no Layoffs."