Redevelopment Area 1

Expenditures of $51,824 were approved in the FY15 Final Budget of the Redevelopment Area 1 Revolving Fund (3401).  Actual FY15 expenditures will come in higher due to unbudgeted costs related to properties owned by the Agency in Victorian Square:

• Soil contamination remediation ($150,000) – Hydrocarbons were found in the soil of a Victorian Square property owned by the Redevelopment Agency by a potential purchaser of the property.  Costs to mitigate this contamination could reach $150,000.
• On-call legal services ($45,000) – Cost to help prepare an exclusive development agreement and purchase/sale agreements.
• Other administrative costs including appraisal fees, survey services and title research fees ($42,000) – Includes costs for preparation of parcel map and establishing fair market value for properties to be sold or exchanged by the Redevelopment Agency.

Today we are seeking to provide FY15 appropriations in the Redevelopment Areas 1 Revolving Fund (3401) in the amount of $237,000 which should be sufficient to cover the unbudgeted items listed.

Redevelopment Area 2

Expenditures of $50,000 were approved in the FY15 Final Budget of the Redevelopment Area 2 Revolving Fund (3601).  On October 27, 2014, Council approved a professional services contract in the amount of $84,530 for the a prevailing wage review at the proposed Walmart property in Legends.  Council was notified at that time that a budget augmentation would be brought back at a later date to provide the necessary appropriations to cover this contract.

Today we are seeking to provide FY15 appropriations in the Redevelopment Area 2 Revolving Fund (3601) in the amount of $84,530 to cover the prevailing wage service contract.

The provisions of NRS 354.598005 govern the procedures and requirements for augmenting or amending a budget; given that anticipated resources available exceed those estimated.  Available resources are defined in NAC 354.410, and include unappropriated ending fund balances of Capital Projects Funds.  As evidenced in the FY14 audited ending fund balance of the Redevelopment Area 1 Revolving Fund and the Redevelopment Area 2 Revolving Fund, sufficient resources are available for this augmentation.

To augment the budget, NRS 354.598005 requires the governing body adopt a resolution providing for the augmentation.  This requirement applies to all fund types.  NAC 354.420 requires a “Revised Revenue Schedule” (included as Attachments A1 and A2 with this agenda item) be submitted along with the resolution to the State of Nevada Department of Taxation. 

Both of these funds receive ad valorem taxes.  Per NRS 354.598005(1)(a), before augmenting a fund to which ad valorem taxes are allocated as a source of revenue, we must also publish notice of our intention to act on the resolution in a newspaper of general circulation for at least one publication.  No vote may be taken on the resolution until 3 days after the publication of the notice.  We have complied with this requirement by publishing the notice in the Reno Gazette Journal within the required timeframe.

Attached is a resolution to augment the Redevelopment Area 1 and Area 2 Revolving Funds. 

Augmentation of the budget will be effective upon delivery of an executed copy of the resolution to the Department of Taxation.  Delivery must be before June 30, 2015

Council could decide not to adopt the resolution to augment the FY15 budget.  This could cause expenditures in the Redevelopment Area 1 and Area 2 Revolving Funds to exceed appropriations, and would therefore be a violation of NRS 354.626.  The violation would be noted in the audited financial statements.

Council could decide to adopt the resolution to augment the FY15 budget and provide appropriations of $237,000 in Redevelopment Area 1 Revolving Capital Projects Fund and $85,430 in Redevelopment Area 2 Revolving Capital Projects Fund.

I move to adopt Resolution No. R-SRA-130 to augment the FY15 budget in Redevelopment Area 1 Revolving Fund and Redevelopment Area 2 Revolving Fund.