Reno's Fiscal State Improving; City Manager Makes Address

RENO, NV - After years of economic uncertainty and budget cuts, Reno city officials say we have hit the bottom and can expect better times ahead.

In Monday's State of the City address, City Manager Andrew Clinger says for the first time since 2007, the budget is stable and they will not need to dip into reserve funds. In fact he expects a marginal increase in revenue.

"We're projecting a 2 percent growth in the sales tax" Clinger said. "I think it's a conservative number. I think the sales tax is doing much better than that."

Officials are concerned about some revenue bonds, but they say those won't affect the general budget.

"We've got those revenue bonds that are troublesome," Mayor Bob Cashell said. "But we've worked with the bond holders and we're working it out. Everything else is current and up to date."

What Reno really needs is a revenue makeover and Clinger says downtown is already heading in the right direction.

"Gaming is great but we all know we need to do other things," Clinger said.

He points to the proposed conversion of the downtown Post Office into retail space, as well as Apple's decision to open a data center in the area as steps that will draw people to Reno.

"We need to get companies to come to Reno and invest in Reno," he said. "You know if we have these jobs down here, businesses and people will have a reason to be here other than gaming.

Despite Clinger insisting next year's budget is balanced, many people on our KOLO 8 News Now's Facebook page cry foul. But Mayor Cashell says critics are misinformed.

"People who are saying this isn't true either didn't come to the meeting or didn't ask questions or they're just making stuff up in their heads," Cashell said.

The mayor invited anyone who is concerned about the fiscal state of Reno to come down and talk to him. He said he is more than happy to point to the facts.

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Here is the address from City Manager Andrew Clinger:

Thank you to Mayor for introduction. Good evening to City Council.
I welcome the opportunity to deliver my first State of the City address to you and the Reno community. From now on this will be an annual occurrence. One of the hallmarks of my leadership to date has been a fundamental commitment to transparency and accountability. I believe that good government should be open government, and that open
government requires regular and frank communication. My comments tonight will cover the highlights of the fiscal year that just closed and then look forward to what the next fiscal year and future years hold
When I became the City Manager in June 2011, the City was facing a precarious financial future. The Council’s primary mandate to me at that time was to stabilize our finances and get the City on solid ground. I’m here to say that mandate has been fulfilled. The good news is that the City’s finances for FY 12-13 are on stable ground. I have heard people say the City is going bankrupt. That is not the case. This year – for the first year since 2007 – our adopted
budget will not drain any reserves. It doesn’t call for any employee layoffs or program cuts.

Now I want to review how far we’ve come. This time last year we were contemplating another reduction in force and we had been relying on one-time budget fixes. Our bond rating was in serious jeopardy. We were unsure what measures to take to reverse what appeared to be a downward spiral. At the direction of the City Council and under my leadership, the City reviewed all its programs and practices. Staff rolled up their sleeves and looked for new efficiencies and
innovations:
• I realigned several departments, to focus on accountability and sustainability.
• We reached agreements with most of our bargaining groups, which included significant wage and benefit reductions.
• All departments re-examined their core services and identified ways to deliver those services more efficiently and effectively.
• City operations are now more streamlined and performance-driven.
• Reno is becoming a strategy-focused organization. This means that we know what we want to accomplish, and we direct our limited resources to achieve those outcomes.

These efficiencies flowed into the FY 12-13 budget. Although it’s lean, it will still fund core City services relating to public safety and economic development, which the Council made a priority. For example, we will add 12 new police officers and undertake a pilot
parking project in the Midtown neighborhood. We will also fund senior programs and the Triage Center, which contribute to our community’s quality of life.

Let me reiterate: Our budget is balanced. We are not facing a crisis. But we do face some challenges. Those challenges relate to our long term debt. The City of Reno has approximately $540 million in bonds, a reduction of $26 million over the last year, but still an issue to address as part of our long-term financial stability. Most of this debt, $375 million, is in the form of revenue bonds that have dedicated
sources of revenue and do not threaten the City’s General Fund. In some instances the dedicated revenue has not been as high as the City and the bond buyers anticipated when the bonds were issued.
We will continually monitor our bonds and work with the bond holders to ensure the commitments made by the City are kept, and we are meeting our obligations.

As the City Manager I directed a complete review of our bonds. As a result we identified actions we can take to improve our position. One action is that the City of Reno is part of arbitration with Goldman Sachs regarding some auction rate security bonds. As we move forward we will continue to work with our creditors and I will continue to keep the City Council and community informed about the City’s long term financial security.

Another important challenge we will address this year is the unfunded liabilities facing Reno. Many of you have read about cities around the country changing various pensions and benefits as a means to bring those costs more into line with projected revenues. Reno is no different. We need to carefully analyze and potentially revisit how our benefits are structured so that the City will have a sound fiscal base as we move into the future. We must take the next logical step to begin to fund these liabilities much like a pension plan versus the "pay as you go" strategy we currently employ. Our long-term sustainability is crucial to provide citizens with the essential services they need.

I am being clear and frank with you because I believe that is the best way for the community to understand, and begin to resolve the problems we face. Our pledge is that we will keep you fully informed. As our analyses and findings unfold, we will provide regular updates to the City Council and to our residents. My commitment to open government and transparency led the City to launch several new
initiatives this year to give residents unprecedented access to information about their local government.

One example is the Online Checkbook. Launched last February, it gives residents the ability to see year-to-date expenditures in each department of the City. By clicking on an individual department, citizens can view the various programs and services offered along
with the amounts spent for their implementation.

In the near future, we will roll out two new links: one will show City employees’ salary and benefits, and another will be a staff directory with direct contact information. As an extension of open government, City Hall itself will become more open to citizens in the near future.
This summer we will remove the staff-only entrances so the public will be free to enter the building from First Street and from the parking garage next door. We will co-locate key services that the public uses every day, like sewer payments and building permits, on the second floor of City Hall, with dedicated and fully accessible parking on the same level. This will create a one stop permit shop for our residents and business owners. Over the next year the public will see other new developments, too. In advancing our commitment to transparency and open government, the public will soon, for the first time, have access to information about how well each of our programs
meets the community’s goals. We will develop an online tool so that citizens will be able to see, with one click, how well we deliver key services. For example, how quickly we respond to citizen complaints, how many code enforcement issues we resolve, and how many neighborhood streets we improve.

Tomorrow we kick off the rehabilitation of Moana Springs in the southwest. The community is invited to a ‘demolition party’ that will be the first step in creating multipurpose flat fields and hopefully, down the road, a new aquatic center. This project is the result of an effective public-private partnership which was spearheaded by the community and Council members Sferrazza and Zadra.

On the north side of town, we plan the restoration of the City’s newest park - Beaumont, the former Northgate golf course into open space and a City park. I’m also excited about the future of the Post Office site. After more than 20 years of discussion, a local developer has purchased the Post Office. He will restore this beautiful historic building to its former glory, and renovate it into a vibrant commercial center. Under the terms we negotiated he is required to preserve the historical aspects of the building as he plans to use the space to its full potential. And his plans also require final approval by the City Council. And of course the Virginia Street Bridge replacement, which has been in development for the last few years, will move forward. Thank you to all the residents who participated in the design process. This long-awaited project represents the Council’s focus not only on
infrastructure, but public safety and economic development as well.
We are positioning Reno for a future with a more diversified economy. One illustration of this is Apple’s recent decision to locate their new data center and business office here in the Truckee Meadows. This is a $1 billion investment over ten years. It shows that, working together as a region and with our state and local partners, Reno can attract
investment. Companies like Apple are betting on the future of Reno, and I couldn’t agree with them more.

Looking ahead, Reno is in a unique position. Judging from recent trends we’ve seen with respect to consolidated tax revenues and property values, it appears that the worst of the Great Recession is coming to an end. We’ve hit the bottom and will now start our slow
climb back. From now on, the question becomes: how do we re-grow? What does our community want its City government to be? What should we focus on this year, next year and five years from now?

I’d like to take a moment here to say thank you to those who make local government work. The City staff have worked hard through these difficult years. Even facing economic uncertainty, their dedication to improve the quality of life in Reno never diminished. The many volunteers we rely on every day do so much of the City’s work. From Parks and Recreation programs to public safety, the important services we provide are improved tremendously by these civic-minded residents. And finally, I want to thank the Reno City Council. This particular group of people’s representatives has served together for many years, under the leadership of Mayor Robert A. Cashell. They have led this community through good times and bad, and they have
left an enduring imprint on the life of Reno, Nevada.

I welcome the opportunities that lie ahead. I firmly believe that the lessons we learned during the last five years can be put to good use. Reno is my home. I grew up in northern Nevada and graduated from the University of Nevada, Reno. My children attend Reno schools and play sports on Reno fields. I, along with all the other City staff, am part of this community and have a vested interest in its success. With leadership and a clear, shared vision, Reno has the ability, the talent and the can-do spirit to position itself as the 21st century’s Biggest Little City in the World.


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