Cityhood faces financial challenge
December 16, 2004
During a discussion with Indian Hills residents and officials concerning cityhood, Meridian Business Advisors consultant Candace Evart said incorporation of the redevelopment area is the “gorilla in the room.”
“The decision concerning incorporation of those redevelopment areas is huge, with respect to the city going forward,” she said. “If those revenues aren’t flowing into the new city, we’d have to take another look at the budget.”
In her review of the budget figures generated by District Manager Jim Bentley, Evart incorporates a proposed redevelopment district east of Highway 395, in addition to the current west side redevelopment into the new city.
Without the property taxes generated by both the existing and proposed commercial areas in north Douglas County, Evart expects the new city would lose an estimated $742,500 in annual revenues, or about 19 percent of the proposed city’s new budget.
“The way the budget is set up cityhood looks feasible,” Evart said. “This study allows the people of Indian Hills to make a much more reasoned decision, but those assumptions are problematic.”
Incorporation of those commercial areas will require dissolution of the current redevelopment district and Evart expressed concerns about the complexity of the process. Douglas County has put a lot of money into the redevelopment district and she does not know if dissolution is the wisest course.
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Designed to improve infrastructure without raising property taxes, redevelopment provides improvements specifically for underdeveloped or blighted urban areas through bonding, or a number of other financial avenues.
Indian Hills resident Ron Lynch challenged the new budget’s staffing, saying personnel numbers for the fire and police departments are adequate.
“We now have nine personnel rotating through the fire department. This budget starts with nine and goes to 12,” said Bentley. “We now have one cop. This budget starts with eight, including five patrol deputies, a chief of police, a lieutenant and clerks.
“I come from the old school,” Bentley said. “I don’t see the chief of police behind a desk. He would be in a car.”
The proposed budget for the new city includes 49 positions, 32 more than the District’s current total of 17, Indian Hills officials said.
Indian Hills trustee Charles Swanson said government is a service organization and one of the big questions, is labor costs.
“Without making sure those labor costs are in the comfort zone, this whole thing could fall apart,” he said.
In a previous interview, County Manager Dan Holler said salaries as stated in this budget are adequate or a little low, but none are underestimated.
Evart called Bentley’s original budget “bare bones.”
“Bentley has a sharp pencil and that concerned me, so I added a 7 percent contingency
fund,” she said.
About $222,000 are included in the contingency fund the first year, increasing to $289,000 by the fifth year, according to the budget as presented.
“It’s a little insurance. When you’re branching out like this, I think you need that,” Evart said.
Once the budget director in Washoe County, Evart has more than 20 years’ experience in local government financial analysis, both as a practitioner and a consultant. A director in the firm, she manages government financial analysis services and casino feasibility studies.
She holds a bachelor of arts from the University of California at Berkeley and a Master of Business Administration from the University of Nevada, Reno.
Susie Vasquez can be reached at firstname.lastname@example.org or 782-5121, ext. 211.
Cityhood has been a hot topic for Douglas County residents since Indian Hills officials unveiled their first study, compiled by County Manager Jim Bentley in August. Bentley’s study promised a 13.3 percent decrease in taxes over the first 10 years and Meridian concurred.
In an October assessment, Douglas County Manager Dan Holler disagreed. Incorporation could mean an estimated $2 million budget deficit by the second year, ballooning to $25 million in 10 years.
Holler also predicted increased water rates and loss of services.