Good afternoon.

Thank you everybody for your patience.

This will begin we'll call to order the preliminary budget hearing for March seventeenth.

Good afternoon, Manager Schiller.

Hi.

Good afternoon again.

Your first item is public comment.

Anyone wishing to speak during the first time set aside for public comment, please come forward at this time.

Seeing no one, we'll close the first public comment period.

Commissioners, your next items, uh approval of the agenda.

I move to approve the agenda.

There's a motion for approval.

Please cast your vote.

That motion passes.

Commissioners moving to business.

Your next items to receive a report regarding the Clark County fiscal year two thousand twenty-seven general fund budget and direct staff accordingly.

Good afternoon, Commissioners.

For the record, Jessica Colvin.

As you know, I've been out of the office quite a bit over the last few weeks, so they've had to work extra hard to get this presentation ready for you today.

So with that, I will um this presentation is really to go over the general fund.

And the reason why the general fund um is really the most important fund when you're looking at the Clark County budget, is when you look it is the one fund that has their primary sources of discretionary revenue.

Um it supports a wide range of departments and agencies.

And so what we provided here for you is, you know, many people who are watching may not know is that the county provides regional services like a typical county would to two point four million residents.

And so those services are to the left.

Um and that'll be to all of our incorporated cities as well as unincorporated Clark County.

But in addition, which makes Clark County unique is that we also provide those municipal or city-like services to over a million residents and unincorporated Clark County, and those are all those services and departments to the right.

If Clark County, unincorporated Clark County were incorporated, it would be by far the largest city in southern in Nevada.

I also highlighted for you just to stress the importance of the general fund is in gold and asterisk, are all of those departments or agencies that have a high dependency on the general fund for their operating budgets each year.

This is just a snapshot of the breakout of our general fund revenues.

You can see consolidated tax revenue as our largest source of revenue, followed by property taxes, and then licenses and permit revenue.

And our general fund operating expenditures are broken out just by function for you.

And as a reminder, if you look in your packet, there is a tab in there that reports all the departments that fall under each function, if that's helpful.

One thing I wanted to note here is that we've broken out public safety with Metro and Detention, and then all of our other public safety departments.

Those are going to include family services, the fire department, juvenile justice service, coroner, public guardian, and public administrator.

And it may look like the budget, usually we have a little bit over 50% is dedicated to public safety.

It may look like we're seeing a decline in that area.

However, that's only because we reallocated or recategorized clinical services, which is a new department from family services and JJS, and they're now reported in the health function.

So the budget begins with revenues.

And in forecasting our revenues, we rely on Department of Taxation's revenue projections, but we also look at our local trends as well.

And the first trend that we look at is our the change in visitor volume.

Hospitality, as everybody knows, is our primary economic driver in this area.

And so visitor volume will have a significant impact for the county, will mostly be consolidated tax revenue.

And you can see we started seeing trends in a decline in visitor volume in fiscal year 2025, and year to date through January visitor volume is declined 7%.

In addition, we've presented this in prior budget hearings related to the number this is the number of deeds recorded.

And this is just a good indicator of the real estate transactions that are transpiring in the county.

And this helps us when we're developing our future trends or expectations for property tax and assessed values.

And so when you look at the number of deeds recorded, we're seeing recurring declines year over year, and those declines are increasing up to or down to another 7.1% in fiscal year 2026 on top of the previous year's declines.

The number of building permits were down 8% and now trending close to 17% down in fiscal year 2026 from the previous year.

And this is an indication of future growth in the pipeline that would impact consolidated tax revenue, property tax revenue, and business license revenue.

One thing I wanted to note on in building permits is the building fund is an enterprise fund.

When you look at their budget currently, we're not but the budgeted revenues are not expected to cover the budgeted expenditures.

Typically the fund will have vacancy savings, and they have built up a number of reserves over the last couple of years, and the board has committed those reserves to be used for future capital projects in the building department.

Since it is an enterprise fund, it is supposed to be self-sufficient and has no reliance on the general fund.

I wanted to bring it to your attention because we the building department has been asked to provide additional funding, whether it's to UNLV or provide fee decreases.

My recommendation to the BFAT committee has been that those reserves stay in place of the building fund because it'll allow flexibility for the board, whether it's needed for capital projects, but we may need to defer those capital projects in order to subsidize operations if we continue to see a decline in the number of permits or the workload at the building department.

Something that was an unanticipated, and you'll see this later in our rep on our report on revenues was a decline in business license fee revenue in fiscal year 2025.

We went back and saw that the actual number of business license applications declined 5.8% and is continuing continuing to trend at a material pace at 21.6%.

In addition, franchise fee revenues have decreased, which are primarily driven by the cost of energy as well as by usage.

We'll be meeting with the business license department just to get a better understanding of what's driving this.

But as far as our projections going forward for fiscal year 2026, we've reduced our projections from budget, and we've continued that projection, just assuming a modest CPI increase equal to CPI.