Certain capital projects were approved on the FY15 and FY14 Capital Improvement Plan (CIP), but were not completed in FY15, and the budget authority lapsed.  The FY16 budget will be augmented to re-appropriate those funds.  See Attachment A for a list of the specific projects.

The provisions of NRS 354.598005(1) 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, an opening balance which is larger than anticipated in a Special Revenue Fund or revenues in excess of budget in a Special Revenue Fund.   Now that the FY15 audit is complete, we have determined that sufficient resources are available for this augmentation. 

Per NRS 354.598005(4) and NAC 354.481, an Enterprise Fund or Internal Service Fund may be augmented if “expenses do not cause a deficit in the equity balance of the fund.”  This augmentation will not cause a deficit in the equity balance of the Sewer Enterprise Fund or the Motor Vehicle Maintenance Internal Service Fund.

To augment the budgets, NRS 354.598005 requires the governing board adopt a resolution providing for the augmentations.  This requirement applies to all fund types.  NAC 354.420 requires a “Revised Revenue Schedule” (included as Attachment B1 though B4 with this agenda item) be submitted along with the resolution to the State of Nevada Department of Taxation.  This requirement applies only to Governmental Fund Types.  Enterprise and Internal Service fund augmentations, per NRS 354.598005(4), do not require the submission to the Nevada Department of Taxation.   Therefore, there is no “Revised Revenue Schedule” included for the Sewer Enterprise Fund or the Motor Vehicle Maintenance Internal Service Fund .

In order to complete these previously approved CIP projects and not violate NRS budgeting requirements, it is necessary to augment the FY16 budget.  Resources are available in the appropriate funds.  Attached is a resolution to augment the City’s Capital Projects funds, one Special Revenue Fund (Street Cut Fund), one Enterprise Fund (Sewer) and one Internal Service Fund (Vehicle Maintenance). 

Augmentation of the Governmental Funds’ budgets will be effective upon delivery of an executed copy of the resolution to the Department of Taxation.  Delivery must be before June 30, 2016.  Augmentation of the Enterprise and Internal Service Fund budgets will be effective upon Council approval of the resolution.

Council could decide not to adopt the resolution to augment the FY16 budget.  This could cause expenditures in the 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 FY16 budget and provide necessary appropriations for the previously approved, prior year CIP projects.

I move to adopt Resolution No. 3290 to augment the FY16 Capital Projects Funds, Special Revenue Fund, Enterprise Fund and Internal Service Fund budgets.