Carson City could take money it had set aside for an auto dealer and use it to help deal with the expected budget shortfall over the next several years.
City Manager Larry Werner said the city should look at putting $4.8 million the city had planned to use to keep Michael Hohl's three dealerships and RV center in Carson City toward balancing the city's budget.
The plan also includes using $8 million in reserves, closing the city landfill Sunday to people who self-haul, making the city auditor a part-time position and slightly increasing a water and sewer fee.
The board of supervisors will vote on the plan at their meeting Thursday.
Using the planned incentive isn't the only option the city has to deal with budget issues including a $3.5 million shortfall this year in the city's main fund, called the general fund, Werner said, but money shouldn't be sitting in a fund when the city is short on money and staff.
"We need to do something with it," he said.
The city needs to be conservative about how much revenue it will bring in, he said, and, under his plan, should be able to work on infrastructure projects and start filling the 31 suspended staff positions by 2013 or 2014.
Hohl was not available for comment Tuesday, but has said the incentive, which he expects to be some sort of tax rebate, will help with relocation costs when he builds a new dealership on South Carson Street for his Honda and Subaru auto business.
He also owns land on the north side of Douglas County, which some in the city say is a reason to finish the incentive deal with him soon.
The city gave auto dealer Dick Campagni a $3.6 million grant in 2005 to buy land on South Carson Street for a new Toyota dealership under an agreement in which he also promised to keep his four dealerships in Carson City for at least 15 years.
Campagni will be at the supervisors meeting Thursday to talk about a change in the agreement that would give him until the end of 2009, instead of the end this year, to build the new dealership.
The city has been working with Hohl for five years, Supervisor Richard Staub said, and Hohl expects a fair and reasonable incentive to help him build his new dealership that could cost around $30 million.
He's "keeping his options open" for future plans, however, Staub said, and could look to his land in Douglas County if the city doesn't offer an incentive, putting a dent in the major stream of sales taxes auto dealers send to the city even though auto sales have been slow this year.
"It's not an option for him to leave," Staub said.
The city has options with the incentive, however, said Supervisor Shelly Aldean.
It could bond for the incentive, she said, and then both be able to deal with the budget and keep Hohl in Carson City.
- Contact reporter Dave Frank at dfrank@nevadaappeal.com or 881-1212.