The Reno City Council has passed a resolution that would allow for some city employees to be fired. The reduction in force authorizes the Reno City Manager to take all necessary steps and actions to reduce staff.
"Unfortunately, in an organization where the majority, over 80%, of our general fund costs are people, eliminating those positions is one of the only things that we can do to address the real structural and economic problems that we are seeing right now," said Jackie Bryant, Reno City Manager.
This comes after the city identified eight people who could be laid off. However, the city initially said this would not happen.
"No one wanted to be here; we've been working hard to reduce expenses in a variety of ways, but we are at this point today. It became apparent over the last 60 days that our revenues are continuing to decline or stay flat while our expenses are increasing," Bryant said.
The resolution passed Wednesday did see some changes. Instead of giving the city manager the authority for the entire fiscal year, it's only for the first quarter, or 90 days. Also, the city's finance director will have to give reports on where things stand every month to the council.
The city says they are looking at a $25 million deficit for the next fiscal year and that they are turning every stone to help fix it.
"As we plan for the next budget year, if consumer spending doesn't increase, the city does not receive the revenue necessary to sustain operations as they currently exist, and that's because of the compounding cost on the cost side of this piece," said Vicki Van Buren, Director of Finance with the City of Reno.
Those eight layoffs only account for $1.6 million. So, the city will have to find more ways to close that roughly $23 million funding gap.
The layoff efforts, they say, are to proactively get ready for the future, particularly the 2027 fiscal year.
About 81% of the city's expenses go to salaries and benefits. The general fund has seen slowed growth from increases for its C-Tax, which is the city's number one source of revenue.
"Since the pandemic, following that time frame, we've had a lot of disruption in the economy," Van Buren said. "And so what we saw is normal growth for revenue growth prior to the pandemic is not what we're seeing after the pandemic."
The resolution gives the city manager the authority to lay off workers without going to the city council, but she told 2 News Nevada it is far more productive to keep an open dialogue.
"We have to start now making some reductions, so I identified eight positions where I think we could spread the work out and be a little bit more efficient, and hopefully that's just the beginning and we don't have to go much further, but there is no guarantee on where our revenues are," she said.
Another thing that was brought up in the meeting was the Public Employees' Retirement System (PERS). Those benefits increase every two years. The city pays for those contributions.
"It's the things we can't control," said Councilmember Naomi Duerr, Ward 2, during the meeting. "We have staff, we don't know how much PERS goes up or how they do their calculations, and we have zero control."
A majority of city employees work in unions and have collective bargaining agreements. Leaving a small portion of where the manager can make cuts.
"There are only two levers that we can pull," Bryant said. "We can say we're going to freeze positions. Or with the reduction in force authorization, we can eliminate positions. Once identified, civil service takes over the process for that. But no, we do not have the authority. And it would be illegal to try and remove certain benefits or salaries from collective bargaining agreements that have already been negotiated."
The City of Reno has said in multiple meetings that they will prioritize jobs in public safety to not be involved in those cuts.
