Reno's budget is in trouble. Here's how top mayoral candidates say they'll fix it.

For the first time in a dozen years, Reno's mayoral race is open, but the winner will have to tackle a likely seismic issue: long-term budget trouble.

The next mayor's term will run until 2030, the same year the city budget is on track for cash flow issues, meaning they'll have less money than they need to comfortably sustain daily operations. The city's finance director earlier this year said it is "a very long-term problem" with no easy fixes.

It's a problem playing out across the country. Local governments are confronting dried up revenue streams and expiring pandemic relief dollars, on top of rising costs for everything from insurance to retirement benefits. In Nevada, the problems are even harder to fix because local governments do not control the rates of the taxes that bring in the most money.

"Costs are outpacing the revenue growth," city Finance Director Vicki Van Buren told council members earlier this year. "Revenue growth is very slow."

The Reno mayor is one of seven members on the city council — meaning the mayor cannot unilaterally make budget decisions — but their overall vision for the city plays a key role in what should and should not be prioritized. Nine candidates have filed for termed-out Mayor Hillary Schieve's nonpartisan seat; the top two vote-getters in June's primary election will proceed to the general election ballot.

The Nevada Independent spoke with the top mayoral candidates (based on fundraising and endorsements) to learn more about how they would approach the budget debacle. And while some similarities emerged — they are open to combining certain services with other local governments and vowed to protect areas such as fire and police — they largely had different opinions on what should be done to right the ship.

Kate Marshall, who previously held roles as state treasurer and lieutenant governor, wants to audit all city operations to see where holes or repetition is occurring, as well as bolster the city's grant operations. 

Council Member Kathleen Taylor said "there are a lot of nice to haves" that the city could do away with. 

And Council Member Devon Reese wants to coordinate with officials in other governments on ways to bring more money into city coffers and decrease costs.

George "Eddie" Lorton, a repeat candidate for mayor, declined an interview. Lorton's website says he would raise revenue by selling off city-owned surplus properties and putting these properties on the tax rolls. 

The other mayoral candidates are Tim Ross, Greg "Nutt" Nuttle, Jesse Razo, Corinthia Yancey and John Wayne Zink. The Reno Gazette-Journal also published a closer look at all the candidates' backgrounds and policy positions.

Budget breakdown

The city's annual budget is about $320 million, and 60 percent comes from property and consolidated tax revenues, with rate limits set at the state level. The consolidated tax is a combination of six different taxes, including those on sales and liquor, and the revenues are distributed from the state government to local entities.

The property tax in Reno is $3.66 per $100 of assessed value, which is the maximum allowed under a state law that could only be increased by the Legislature.

The third-largest source of revenue is charges on services such as garbage, electricity and cable TV. However, the city only has control over garbage fees, and council members approved modest increases earlier this year to increase revenue.

For two years in a row, the city has confronted a budget deficit. Because its hands are largely tied when it comes to increasing revenue, the other option is cutting down expenses. The city froze or unfunded 28 positions to get out of the most recent budget deficit, but officials emphasized the need for structural changes sooner rather than later.

Based on the latest city estimates, the starting balance of the general fund — the city's primary operating budget — is set to decrease by about 40 percent in the next few years. In about four years, the starting balance will be less than 10 percent of the total budget size, which has officials worried that they won't be able to bankroll daily operations while the city waits for money to come in.

"We've been able to weather the storm up to this point, but now we're at a point where we really need to look long term and to look for some long-term solutions," Van Buren, the city finance director, said in January. "Going year to year, even a couple years out, it's not going to solve the problem."

To cut or not to cut?

More than 80 percent of city expenses are for staff salaries and benefits, while the rest is largely for city services and supplies. More than 60 percent of all expenses are for police and fire programs.

Taylor and Reese don't want to touch those programs.

"The city needs to be focusing on police, fire, infrastructure," Taylor said. "Essential services are always going to be my priority."

Reese added: "You always, always, always prioritize our core services. That's public safety."

Marshall said her priority is also essential services — but only when it comes to those out in the field.

"I'm talking about the policeman that shows up at your door or is on the street, the firefighter who's on the truck," Marshall said. "I'm not talking about management overhead."

Any staffing cuts will have to go through the city's collective bargaining process. Out of the nearly 2,000 city employees, all but 200 are unionized.

Marshall added she isn't interested in curtailing "frontline workers," such as janitors and city employees who interact with the public on a daily basis. But she added there has been an increase in city department employee count over time.

"It may very well be that all those are critical, but it may also be — both can be true — that we can't afford that," Marshall said.

Asked about the staffing picture, Reese defended the city's past measures to cut costs, such as freezing positions. He did not specify where else he would find cuts if needed, but that he would prioritize public safety initiatives.

"I don't think that we can balance the budget on the back of our employees," he said. "We're not trying to overpay anybody, but we are trying to make sure that we get the best people because those people end up staying."

Taylor said there are opportunities to cut back on spending. She pointed to recent city discussions on a Fourth of July parade — which has a price tag of $105,000 — and the dilapidated, historic Lear Theater as examples of things the city should not be prioritizing.

"In my mind, those are wants and nice to haves," Taylor said.

What about auditing?

Marshall also wants to conduct an audit of city programs. 

The city is already required to conduct audits of its finances, and it has a third-party group conduct internal audits, who have recently been analyzing the financial and operational details of 22 city departments. This summer, they are bringing forward information on department risk level, which is based on factors such as financial status and reputation, Van Buren said. The council will then determine which audits should be completed in the next year.

"You need to determine whether various programs are, based on their funding, delivering," said Marshall, who has touted her work as state treasurer to eliminate no-bid contracts and offshore accounts.

Meanwhile, Reese and Taylor support bolstering the city's existing audit practices.

During an April city council meeting, Reese emphasized that the city's budget is already audited, and that auditors have not found evidence of expenses such as no-bid contracts.

Taylor added in an interview that "we get a document of everything that we've spent on."

Relationships with other governments

The candidates are open to consolidating certain city departments with regional counterparts.

Read More: Merging Washoe's fire departments flopped in the past. Here's why they may try again.

But there's renewed headway because of an ongoing study — required by the Legislature — into a potential merge. Findings are expected by the end of the year.

Reese said consolidating departments — even beyond fire services to areas such as parks and recreation — could help stabilize the budget.

"In some ways, governments are very good about building silos and maintaining kingdoms," he said. "I am not about that."

Taylor added that she wants to make sure any arrangement wouldn't increase costs for Renoites.

The city also receives a limited amount of tax revenue actually generated in the city — the rest goes to entities such as the state and school district — so Reese wants to work with other governments to change that dynamic.

However, Reese also acknowledged the city is only one part of the puzzle.

"It's not the kind of power that is a hammer," he said. "It's more like the power that is a scalpel."

Candidates also want to strengthen relationships with the Legislature with the hopes of passing tax reform to bring more money to the city. However, Marshall also accused the city of not taking full advantage of tax revenues, such as money for blighted buildings.

"If the city is not using the tools the state currently provides, it makes it difficult to go to the state and ask for more," Marshall said.