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State of the City Mayor LeRoy Goodman Economic Outlook & Status Report on Fernley’s Actions to Address Economic Conditions January 18, 2012 ---PAGE BREAK--- 2 Presentation Overview Current Economic Climate Actions Taken By the City Ongoing Fiscal Inequity - Structural Deficit CTAX (Consolidate Tax) ---PAGE BREAK--- 3 Today’s Message The new economy requires government to continue to provide services to our residents with less revenue. Fiscal equity is key for the City of Fernley to address ongoing deficits. ---PAGE BREAK--- 4 Current Economic Climate The prolonged recession has redefined the economy 14.2%± unemployment rate over the last two years Fernley hit hard in housing sector Average home has lost nearly half its value Nevada #1 in nation for foreclosures CTAX revenue at pre 2000 levels ---PAGE BREAK--- 5 Actions Taken To Address Economic Climate In the last three years, local governments including Fernley, have faced significant budget challenges. To date, these challenges have been meet with a number of strategies to reduced our budget. ---PAGE BREAK--- 6 Actions Taken To Address Economic Conditions √ Layoffs √ Use of Reserves √ Streamline Organization √ Reduction of Supplies √ Reduction of Capital Investments √ Wage & Benefit Concessions √ Early Retirement Incentives √ Reduction of Service Levels √ Freeze Vacant Positions Actions taken by City last three budget years: 2011/2012; 2010/2011; 2009/2010 From 71 FTE’s to 51 FTE’s No Cost of Living (COLA) increases last 4 years No Merit increases last 3 years COLA & Merit freeze next year Reduced employee health package from 80/20 to 70/30 Employee Costs (all groups) Wages, Retirement (PERS), Health Benefits - Make up about 75% of operating costs and for some services up to 90% of costs Less employees = Less capacity to provide services to residents ---PAGE BREAK--- 7 Actions Taken To Address Economic Conditions Budget cuts saved residents $800,000 in the General Fund City Council borrowing $800,000 from the General Fund to pay Water & Sewer Bond shortfall Implemented water service assessment fee to address future shortfalls Implemented user fees for city parks & facilities Focusing on economic development & attracting jobs in Fernley ---PAGE BREAK--- 8 Water Treatment Plant ---PAGE BREAK--- 9 Actions Taken To Address Economic Conditions Focusing on Economic Development & Attracting Jobs in Fernley Community Assessment – over 500 respondents Resident Priorities 1 Economic Development 2 Water 3 Youth Economic Development Framework/Plan AB-449 Establishing an Economic Organization ---PAGE BREAK--- 10 Actions Taken To Address Economic Conditions Focusing on Economic Development & Attracting Jobs in Fernley Streamlining the city development & building process BET Center – Business & Entrepreneur Technology Center: Business training Job search assistance 700+ Since BET Center Opened Sept 2011 220 have found jobs Skills training WNC Access to technology for residents ---PAGE BREAK--- 11 Actions Taken To Address Economic Conditions Working with Legislators for Federal Assistance Water lease Infrastructure improvements Working to re-coup Fernley Resident’s Fair Share of Tax Revenue Met with Lyon County Met with Dept. of Taxation Submitted Bill Draft Request (BDR) to State for fair share (fiscal equity) of Consolidated Tax (C-Tax) ---PAGE BREAK--- 12 Cigarette Tax Liquor Tax General Services Tax Real Property Transfer Tax Supplemental City- County Relief Tax Distribution to the County Level Basic City-County Tax Relief C-Tax was implemented by the State of Nevada in 1997 to combine the distribution of six different taxes: What is Consolidated Tax/C-Tax? ---PAGE BREAK--- 13 Why Should Fernley Receive a Base Adjustment to C-Tax? How Much of Your Taxes Come to Fernley? How the State Distributes C-Tax: Each entity/local government has a base allocation that was determined when C-Tax was established in 1997. PROBLEM – the City of Fernley was not incorporated in 1997. In 2001 Fernley received approx. $100,000 with a population of 9000 residents. In 2010/11 Fernley received $145,663 with a population of 20,000 residents. COMPARABLY: Mesquite, Nevada population 16,500 received $6,800,000 (6.8 million) in 2010/11 from the State. ---PAGE BREAK--- 14 C-Tax Distribution from State of Nevada -Like & Smaller Size Cities CITY/TOWN POPULATION ASSESSED VALUE 10/11 BASE PER CAPITA FERNLEY 18929 $448,105,998.00 $145,663.00 $7.70 PAHRUMP 38247 $1,288,454,586.00 $621,363.00 $16.25 GARDNERVILLE 5250 $170,082,824.00 $250,000.00 $47.62 BATTLE MTN. 2967 $35,093,697.00 $197,000.00 $66.40 TONOPAH 2580 $31,623,274.00 $261,800.00 $101.47 MINDEN 3229 $161,233,552.00 $332,200.00 $102.88 YERINGTON 3138 $58,857,733.00 $375,900.00 $119.79 CALIENTE 1106 $13,022,428.00 $138,875.00 $125.57 FALLON 9113 $211,228,851.00 $1,336,000.00 $146.60 LOVELOCK 2411 $21,144,902.00 $367,300.00 $152.34 GABBS 316 $6,977,956.00 $75,800.00 $239.87 MESQUITE 20677 $636,455,142.00 $6,000,000.00 $290.18 BEATTY 880 $17,444,268.00 $314,100.00 $356.93 WEST WENDOVER 4945 $132,856,379.00 $1,847,000.00 $373.51 WINNEMUCCA 7593 $160,955,779.00 $2,941,000.00 $387.33 BOULDER CITY 16064 $564,973,634.00 $7,000,000.00 $435.76 ELKO CITY 18428 $390,874,792.00 $8,900,000.00 $482.96 CARLIN 2345 $26,840,273.00 $1,246,000.00 $531.34 WELLS 1515 $23,230,378.00 $806,000.00 $532.01 JACKPOT 1184 $31,109,700.00 $967,750.00 $817.36 TOTALS/AVERAGES 160917 $4,430,566,146.00 $34,123,751.00 $212.06 2009 ---PAGE BREAK--- 15 Why Should Fernley Receive a Base Adjustment to C-Tax? How Much of Your Taxes Come to Fernley Per Assessed Value City of Fernley $.003 Per Capita City of Fernley $7.70 Per Assessed Value Gabbs $.0109 Yerington $.0119 Carlin $.0464 Per Capita Fallon $146.60 Mesquite $290.18 Elko $482.96 ---PAGE BREAK--- 16 Why Should Fernley Receive a Base Adjustment to C-Tax? How Much of Your Taxes Come to Fernley PER CAPITA $239.87 $356.93 $125.57 $817.36 $532.01 $531.34 $152.34 $101.47 $66.40 $119.79 $102.88 $373.51 $47.62 $387.33 $146.60 $435.76 $482.96 $7.70 $290.18 $16.25 $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 $900.00 GABBS BEATTY CALIENTE JACKPOT WELLS CARLIN LOVELOCK TONOPAH BATTLE MTN. YERINGTON MINDEN WEST WENDOVER GARDNERVILLE WINNEMUCCA FALLON BOULDER CITY ELKO CITY FERNLEY MESQUITE PAHRUMP PER CAPITA State Average per person = $200.00 Fernley gets $7.70 ---PAGE BREAK--- 17 How Much C-Tax Come back to Fernley Compared to Other Cities in Nevada? 10/11 BASE CALIENTE, $138,875.00 FERNLEY, $145,663.00 FALLON, $1,336,000.00 GARDNERVILLE, $250,000.00 ELKO CITY, $8,900,000.00 MESQUITE, $6,000,000.00 WINNEMUCCA, $2,941,000.00 BOULDER CITY, $7,000,000.00 YERINGTON, $375,900.00 ---PAGE BREAK--- 18 Why Should Fernley Receive a Base Adjustment to C-Tax? The City is actively seeking an fair adjustment to its allocation within the Consolidated Tax Distribution. In negotiations with the Dept. of Taxation the City requested an administrative adjustment (Denied). During the 2011 Legislative Session the City’s BDR died in Committee. Only alternative remaining is to pursue legal action. ---PAGE BREAK--- 19 Fair Distribution of C-Tax to Fernley Could... Help pay water & sewer bond debt shortfall Provide $ millions to our General Fund ---PAGE BREAK--- 20 Fair Distribution of C-Tax to Fernley Could... Provide funds for improvements to our streets Provide funding for improvements to our downtown corridor ---PAGE BREAK--- 21 Fair Distribution of C-Tax to Fernley Means...Fernley recouping its Fair Share, Fiscal Equity.