2014 State of the City
✯ ✯ ✯ ✯ City of Reno ✯ ✯ ✯ ✯
2014 State of the City
August 27, 2014 at 11 a.m., Reno City Hall
Mayor, Bob Cashell:
On behalf of the entire Reno City Council, I’d like to welcome everyone to this year’s State of the City. Thank you all for being here.
Today we’re going to give you a snapshot of where we are as a city government, tell you about the progress we have made over the past fiscal year, and provide you with a look at what’s next for The Biggest Little City in the World.
I’d like to acknowledge how much of an honor it’s been serving as the City of Reno Mayor for the past 12 years. It’s been a pleasure working alongside a dedicated group of Council Members, City Managers, and City employees. I thank you all for your support and wish our future Mayor and Council Members the best. Before I introduce our City Manager, I will call for public comment.
… Without further ado, I’m happy to introduce Reno City Manager Andrew Clinger.
City Manager, Andrew Clinger:
Good morning citizens, community leaders, and staff. Thank you for being here today, or for tuning in to Reno’s 2014 State of the City address. We invite you to participate in the conversation by using the hashtag #SOTCReno on social media.
It has been a year of solid achievements and progress for the City of Reno that we can all be proud of. But before we get into the accomplishments, I would like to talk about where we are today and address some of the challenges that we face.
Where We Are Today
Let’s begin by giving you a financial overview.
For Fiscal Year 2015, the City of Reno’s General Fund expenditures are estimated at $170 million. Public safety is one of our top priorities; as approximately 68 percent of the General Fund is allocated to the police and fire departments. The remaining 32 percent is distributed to departments such as Parks and Recreation, Municipal Court, Public Works, and others.
The City Council originally adopted a budget in May that struck an appropriate balance between fiscal stability and providing essential public services. However, our course was altered in late June, when the District Court issued a ruling that prohibited the City from moving forward with layoffs that were previously authorized by the City Council. The City of Reno has appealed the District Court’s decision to the Nevada Supreme Court.
In anticipation that these legal proceedings may take several months to resolve, the City Council approved a plan in July to reallocate nearly $2 million to fund 21 firefighter positions through the end of this fiscal year. While these budget-balancing measures have addressed the problem in the short term, we recognize they are not sustainable in the long run.
Although these recent developments have redirected our budget process, a primary goal remains long-term financial health for this organization. For starters, we’re paying off $3.7 million in City Hall debt, which frees up over $1 million annually in our General Fund.
This year, we have budgeted to increase the General Fund balance, and we are projecting to reach 7 percent by the end of this fiscal year. We aim to achieve an 8.3 percent ending fund balance, which constitutes one month of operating expenses.
The City continues to plan for a solid financial future.
As for the City’s revenues, we are projecting $170 million for the current fiscal year. Two of our major sources of revenue come from Property Tax and Consolidated Tax. Consolidated Tax is made up primarily of sales tax. These two revenue streams represent 53 percent of our total revenue.
The City’s Property Tax has stabilized at $43.9 million, the same as it was the previous year. Meanwhile, Consolidated Tax is trending up and projected at $47.7 million; however, it is important to note that we remain well below 2008 levels, when General Fund revenues peaked at more than $180 million.
The City’s assessed valuation stands at $6.3 billion, a 7.7 percent rise over the prior year. Reno’s stock is on the rise, a positive sign that we’re climbing out of one of the worst recessions in our region’s history.
In addition, Reno’s population has increased every year since 2010 and is estimated by the state demographer to be more than 232,000 residents. We’re also seeing an increase in visitors. Washoe County greeted more than 4.5 million tourists in 2013, up significantly from 2011 levels. To give further context, with reduced resources we are providing services to a larger population.
Another indicator of positive growth is a declining regional unemployment rate. Reno recently recorded annual job growth of 3.6 percent, adding more than 7,000 jobs. Of those additional jobs, 2,000 were in the construction sector. July 2014 numbers showed an unemployment rate of 7.3 percent in Reno/Sparks, a decrease from our peak in 2010 of 13 percent.
In conjunction with the Economic Development Authority of Western Nevada, economic development continues to be a top priority for the City of Reno. Businesses ranging from Fortune 500 companies to emerging entrepreneurs continue to pinpoint Reno as an economically competitive choice for companies looking to start up, expand, or relocate.
Single-family home sales are more promising than they’ve been since 2009, now averaging 60 sales per month. Our own City of Reno building data is also reflective of a healthy economy. The City issued permits for nearly 700 single-family homes last year, up 55 percent from the previous year and the most since 2008.
Washoe County’s K through 12 graduation and educational statistics compare favorably to national standards. A study earlier this year by the Buckley Education Groups showed that Washoe County ranked 15th in the nation for college readiness and 12th for AP test takers.
These successes are also evident in our higher education institutions. The University of Nevada recorded a record number of more than 3,700 graduates last year. Its Complete College America program will add even more skilled professionals to our local workforce. Already recognized as a Tier 1 University by U.S. News & World Report, the University is projected to be ahead of its goal to grow to 22,000 students by 2021.
Truckee Meadows Community College’s curriculum supports local industries by creating unique programs that meet the needs of local employers and our region’s evolving workforce.
In summary, our economy is recovering, our population is growing, our education options are exceptional, and residential and commercial building are trending upward.
However, our future is not without its challenges.
For starters, we carry what many would consider to be significant bond debt at more than $500 million. It’s important to make the distinction that less than 25 percent of our debt is a burden on the City’s General Fund. The majority of the debt is funded by dedicated revenue sources that exist solely for the purpose of paying down that debt. Further, our overall debt levels have decreased dramatically since 2009.
In an effort to continue to improve our General Fund debt position, we’re using a portion of one-time funds to pay off $1.2 million in golf course bonds and $3.7 million in City Hall debt. We’ve also made efforts to restructure our bond portfolio. These measures will result in long-term savings of $4.3 million to the General Fund and $1.5 million to the Street Fund. These are steps in the right direction, and we will continue to analyze and restructure our debt as appropriate.
In addition, retiree health benefits — commonly referred to as OPEB — represent a $210 million unfunded liability. Currently we’re using a “pay-as-we-go” model, which only pays for the actual yearly expenses and puts nothing aside to satisfy this long-term cost. However, this year we have established an OPEB Trust Fund and budgeted $4.3 million toward this significant expenditure. But that’s still well under our current annual required contribution of $17.6 million.
Further, our worker’s compensation liability, primarily for heart and lung, sits at $39 million. This is another area of critical need that we need to address in future budgets.
We must have the cooperation of our collective bargaining groups to achieve long-term solutions. Cooperation and compromise will be important factors in solving these fiscal stability problems as a public organization.
Deferred maintenance is another area of great concern. For example, some of our city parks are in desperate need of repairs and revitalization. Unfortunately, expenditures are outpacing revenues, threatening our ability to properly maintain our assets.
Along with deferred maintenance, we have an aging infrastructure, with our downtown as a primary example. We’re actively working with our regional partners on this, such as participating with the University and the Regional Transportation Commission in a collaborative planning initiative. The University’s new master plan will cover the future development of the campus, its connection to downtown, and the supporting transportation infrastructure.
Part of the revitalization of downtown includes caring for our homeless citizens. The City of Reno has worked with the City of Sparks, Washoe County, and Volunteers of America since 2008 to operate the Community Assistance Center shelters. Together, we’re focused on assisting people in recovering from homelessness. In the last year, we've formed a task force of the government agencies that fund the shelters to evaluate their operations and make recommendations about programs and services that will support recovery.
A task force has also proven successful in tackling another important issue: city-wide graffiti. More than a year ago, a number of Reno citizens and property and business owners approached the City Council to express their concerns that graffiti in our community had reached a “tipping point.” The proliferation of graffiti prompted the Council to form a citizen’s task force to examine graffiti issues in our community. The City will embark on implementing the task force recommendations in the upcoming fiscal year.
These are some of the serious issues we face as a city government and why it’s imperative that we need to work together to plan for our future. These challenges demand real solutions with a shared vision and based on the collaborative spirit in our community today, I’m confident we will get there.
What We’ve Accomplished
Now, I’d like to share with you just a few of our successes over the past fiscal year in relation to the four City Council priorities, which are to Promote a Sustainable Vibrant Economy, Provide Efficient and Responsive City Services, Provide Safe and Livable Neighborhoods, and Enhance Communications and Community Engagement.
Creating and promoting a sustainable and vibrant economy has been a key City of Reno priority since 2010. Both internally and externally, the City has pursued initiatives to make our community more business-friendly, diverse, and attractive for economic development.
First, in support of the startup sector, the City piloted a new financing program this year called the Reno Accelerator Fund. Through an allocation of $200,000 from the Community Development Block Grant funding, eight promising startups were funded $20,000 each, with an additional eight startups to receive awards in the near future. We also facilitated the disbursement of State Catalyst Funds to local businesses Garlock Printing and Lincoln Cutting System.
Next, the City of Reno is proud of its commitment to arts, culture, and special events. We believe that a strong public art and events program spurs economic development and enhances our neighborhood identities. Earlier this year, Council approved the allocation of nearly $200,000 to 40 nonprofit arts organizations and unanimously approved changes to the Reno Municipal Code that protect artisans’ First Amendment rights. In addition, City Council approved the allocation of more than $275,000 to 35 special events.
Another Council priority is to Provide Efficient and Responsive City Services. We have continued to explore process improvements that will allow us to provide high-quality services to our constituents along with cost-saving efficiencies.
One example is that the City strategically transferred the operational responsibility of Rosewood Lakes Golf Course by leasing the course to First Tee of Northern Nevada, a local nonprofit organization. The partnership relieves the City of some of the annual financial burden of operating the course and provides an affordable golf experience geared toward youth and seniors. Transitioning the course to First Tee is projected to save the City of Reno approximately $694,000 annually.
We recently initiated concentrated efforts to simplify the permit process, making it more friendly and supportive by adding weekend and expedited inspections and extending the daily hours of the permitting office from six to nine hours. Earlier this year, we took the additional step of reducing permitting fees in the areas of planning and engineering to be more regionally competitive.
The City’s current budget includes an important core-services analysis to identify efficiencies in our Parks and Recreation and Public Works departments. With the results of the analysis, we will recommend efficiencies in operational areas such as staffing and data-driven models of service delivery.
Finally, in a collaborative effort with Washoe County and the City of Sparks, we are currently in the process of introducing a new regional online permit review system that will make it easier to obtain or renew business licenses.
A third Council priority is to Provide Safe and Livable Neighborhoods. In addition to police and fire services, we recognize that well-maintained streets, a vibrant downtown, public art, parks, and recreation services are important to our constituents.
In response to a community survey conducted in 2013, the City recently began a new Downtown Pride Program, a public-private partnership. The program is focused on improving downtown by working with property owners to enhance its physical appearance. In collaboration with High Sierra Industries, a local workforce development organization, the City is instituting a walk-and-clean program.
Continuing on downtown improvements, residents and visitors will be further protected by an expanded Police Special Assessment District. We’ve also implemented police walking patrol operations with an emphasis on community interaction. The creation of a Community Safety and Service Team has resulted in a reduction of calls for service and improved quality of life in the downtown corridor.
Through another public-private partnership, the City opened a new fire station in Damonte Ranch, replacing a temporary station strategically located in south Reno. Private investment paid for a majority of the project, built the station, and donated the land. Therefore, of the $3.1 million total cost of the project, the City’s General Fund contribution is a mere 17 percent.
The fourth Council priority is to Enhance Communications and Community Engagement. We recognize that we would not be able to broadcast our message, nor would we be able to receive valuable feedback, without a strong communications plan.
In December of 2013, the City of Reno unveiled a redesigned website. The change furthers the effort to put Reno on the map as one of the most innovative and citizen-focused cities in the nation. A City of Reno app was developed for the “on-the-go” citizen who desires instant information about their local government. The City has also ramped up its efforts on social media, all in an effort to stay ahead of the communications demands of the modern era.
You may recall that we recently introduced the Think Reno campaign to provide a more convenient way for citizens to share ideas with the City of Reno. To date, hundreds of users have shared their ideas with us at Reno.gov/ThinkReno or by attending one of our Think Reno forums. One popular idea submission was to strengthen the connection between the University and downtown.
In support of that idea, the City leased a downtown building to the University for the opening of the new Innovation Center. The Center establishes a bridge for collaboration involving the University and its faculty and students, business and industry, and economic development organizations. In tandem, it will contribute to the vibrancy of downtown and further the “college town” concept by connecting the University to downtown and to Midtown.
Let me emphasize that we have accomplished all of these things with less resources and staff. At one point in 2009 the City of Reno employed more than 1,600 people; now we employ just less than 1,100. To put that into perspective, in five years we have seen a reduction of nearly one third of our workforce.
In spite of the resource challenges, the City of Reno continues to deliver our core services. In 2013, dispatch answered more than 400,000 9-1-1 calls, the Reno Police Department responded on scene to 125,000 calls, and the Reno Fire Department responded to 37,000 calls. Parks and Recreation continues to maintain 2,500 acres of parks, and Public Works serves 680 miles of roads.
In summary, the economic downturn required us to decrease our staffing levels substantially while continuing to provide these core services. I recognize that our staff continues to demonstrate their ability to be innovative, effective, and accountable. And, I’d like to take this opportunity to recognize our City of Reno employees for all they do to make Reno a great city.
Where We’re Going
While it’s easy to focus on the present, we are equally excited for the future.
We will continue to make innovative improvements that create an environment that attracts and retains technology-based companies to do business in The Biggest Little City.
The City of Reno is looking forward to initiating some important new projects and programs. For one, we will be breaking ground on the Virginia Street Bridge replacement after 15 years of extensive community outreach and planning. Its construction will require approximately 12 to 18 months to complete, and its design will improve walkability and flood prevention.
We are excited at the prospect of kicking off Think Reno 2035, the start of our community-based master planning process that will help identify our collective vision and update the City of Reno’s strategic plan for the next 20 years. Now that the City and the region are on the path to recovery and economic growth, we will seek community-wide input to ensure we achieve the best and brightest future for our citizens.
In another collaborative effort, Reno’s 2013 Smarter Cities Challenge Grant award from IBM has evolved into the 2014 Smarter Region effort. Eleven private and public entities have partnered to gather information that will be used to frame the region's new economic development identity. Regional elected policy makers will gather at the next Smarter Region workshop on October 15th to chart the course for that new identity.
Those are just a few of the factors that illustrate a bright future ahead for Reno and the rest of the region.
In conclusion, we are already a great City, and we will keep it that way through groundbreaking innovation, smart and efficient government, and regional collaboration.
We continue to gain attention on a national level. That’s why we’re showing up on lists such as Best Places to Live, Most Entrepreneurial Metropolitan Area, America’s Coolest Riverwalks, and Best National Universities.
The City of Reno’s Annual Report — our companion piece to this presentation — is also available. Those of you in the audience should have received a copy, and you can also view it at Reno.gov/AnnualReport.
Thank you, again, for being here today or for tuning in. Although we have some challenging days ahead, I believe our future is promising. The City Council, myself, and the rest of the City of Reno employees will continue to work with our regional partners and our residents to make Reno an even greater city.
State of the City word cloud courtesy of the Reno Gazette-Journal.