WASHOE COUNTY BUDGET SHORTFALL PRESS RELEASE Media Contact: Kimberly Evans For Immediate Release tel. (775) 328-2730 Website: www.washoecounty.us 07-054 BOARD OF COMMISSIONERS CONCUR WITH RECOMMENDATIONS TO SLOW SPENDING TO MEET PROJECTED REVENUE SHORTFALLS Reno, Nevada. February 13, 2007. The Washoe County Board of Commissioner voted to accept the recommendations proposed by staff to slow spending to meet a projected $12 million revenue shortfall in the 2006-07 budget. The projected budget shortfall is primarily due to two significant events: 1) consolidated tax revenues (principally sales taxes) are slowing down and as of December 31, 2006 were 9.1% below budget, and 2) a recent State Supreme Court decision regarding Incline property taxes could potentially reduce property tax revenues by $4.6 million. Washoe County Director of Finance John Sherman said, "The goal in making the following recommendations is to minimize the impact these two events will have upon our current budget by implementing some spending constraints now. We hope that slowing expenditures gradually now will reduce the likelihood of dramatic expenditure reductions next fiscal year." Some of the spending constraints that have been used in the past that the Board approved today include: 1) Reduce capital outlay spending. Achieve an overall 25% reduction in this area and ask that departments defer all non-emergency capital outlay. Deferring some budgeted capital projects that have not yet started construction will yield approximately $2.7 million in savings. Emergency items will still be considered for possible funding. 2) Reduce services and supplies expenditures by 5%. In past years, actual expenditures have always been below budgeted expenditures by nearly 6% which has provided a cushion if revenues fall short of budget. However, with 7 months into the 2006-07 fiscal year, actual expenditures are tracking 100% of budgeted expenditures leaving little cushion for declining revenues. 3) Add 30 days to hiring process. By adding on an additional 30 days to the hiring process of vacant positions, savings will approach $1 million. Departments will work with Human Resources to determine their individual impact. By adding 30 days to the recruitment process already in place, officials hope to avoid a hiring freeze next year. 4) Reduce overtime and temporary worker expenses. As of December 31, 2006, about 60% of the 2006-07 overtime budget had already been spent ($1.8 million compared to $3 million budgeted). Departments work with Human Resources to ensure that if current vacancies are extended by 30 days and the vacancies are not compensated for with overtime or hiring of temporary workers as this would defeat the effort to realize salary savings. .