Due to both unplanned and increasing emergency response costs and abruptly declining revenues due to business closures, Washoe County says it is experiencing significant financial impacts from the COVID-19 pandemic.
Today, the Washoe County Board of Commissioners were presented with the County Manager’s recommended Fiscal Year 2021 Budget totaling $714.6 million. The County’s General Fund represents $355.5 million, or 50 percent of the total budget.
The economic outlook, nationwide and in Washoe County from to the COVID-19 global pandemic, is unprecedented. During the last six weeks, 33.5 million unemployment claims were filed in the U.S., which is more than three times as many claims as were filed during the Great Recession.
In the State of Nevada, the unemployment rate as of April 25, was 19.9%, the highest in the State’s history.
From mid-March through June 30, 2020, the County’s General Fund budget shortfall is estimated to total $24.6 million. In addition, the financial impact for Fiscal Year 2021, which begins July 1, is projected to be $40.5 million, for a total budget shortfall over 15 months of more than $65 million.
Washoe County has implemented measures to shore up this shortfall with the following goals in mind:
- Maintain services to the community with a focus on protecting public health
- Keep employees working
- Use cash reserves wisely
The immediate measures include a hiring freeze, a purchasing freeze, reallocation of budgeted contingency, deferral of budgeted capital improvement projects that have not yet begun, use of stabilization reserves, and fund balance.
In the Fiscal Year 2021 recommended Budget, the hiring and purchasing freezes will continue, along with the following measures to address a projected General Fund shortfall in revenue of $37 million:
• Deferral of over $8 million in capital projects
• Reallocation of $5 million of contingency budget
• Reduction of $2.5 million in pre-funded Other Post-Employment Benefits contribution
• Use of $505,000 of Marijuana Fund revenue
• Other personnel cost savings totaling $5 million
• Use of General Fund balance (cash reserves) of $15.7 million
Going forward, there are continuing concerns about the financial impacts on the County if revenue shortages become prolonged, and costs increase due to pending litigation, and possible loss of funding and unfunded mandates resulting from the State’s possible upcoming special legislative session.
On May 11, Governor Sisolak declared a state of fiscal emergency arising from the strain the COVID-19 pandemic has put on public services in the State of Nevada. The financial impact to Washoe County during the fiscal year will be closely monitored and further budget reductions may be necessary.
The Board of County Commissioners will hold a public hearing to adopt the final budget on May 19, 2020 during the next scheduled meeting.