Council Chambers, Legislative Building, 745 Fourth Street, Sparks, NV
Public Hearing and Action Items Unrelated to Planning and Zoning: 10.1
The City has three grant funds:
• The Community Development Block Grant Entitlement Fund was established to process transactions related to the Community Development Block Grants as awarded by the U. S. Department of Housing and Urban Development.
• The Community Development Block Grant Fund was established to process transactions related to the Community Development Block Grant Program Income and is also used to track the Washoe County Home Consortium housing program.
• The Sparks Grants & Donation Fund was established to account for monies from all other governmental fund grant awards, donations and other designated use awards.
Each of these funds processes transactions for grants that are operated on a reimbursement basis and as such, may cause the fund to experience periods of ‘negative’ cash. When that happens the fund is considered to have participated in an interfund loan per NAC 354.290 as revised in 2010
NRS 354.6118 requires the City hold a public hearing before such a loan is made to determine, that a sufficient amount of money is available for the loan and the money is not restricted as to its use, and that the loan of the money will not compromise the economic viability of the fund from which the money is loaned, and establish the amount of time the money will be on loan from the fund, and the terms and conditions for repaying the loan, and the rate of interest, if any, to be charged for the loan.
The ability to predict cash needs of a grant fund and hold a public hearing before grant expenditures are made is not practicable. Therefore approval of a resolution authorizing an interfund loan from the General Fund to one or more of the three grant funds of the City, as needed, is requested.
Over the last five years (fiscal year 2012 to June 2016), the Community Development Block Grant Fund has experienced negative cash situations on 1,441 out of 1,818 days (79 percent). The amount of the interfund loans range from $7.37 to $280,151.56. It takes approximately one week to receive reimbursement of qualified expenditures.
While the other two grant funds do not often experience negative cash situations, it is prudent to obtain authorization for all funds that may need this type of loan.
Approving this resolution will reduce the likelihood of violation findings, related the the General fund, from our audit of fiscal year ending 06/30/2017.
It is anticipated that an interest free loan of up to $300,000 from the General Funds non restricted assets for a period of 30 days or less would not compromise the economic viability of the General Fund during fiscal year 2017.
In order for Council to be able to accurately determine that a loan can be made from a fund with sufficient unrestricted money and that the loan does not compromise the economic viability of the loaning fund, Council will be required to approve a resolution similar to this each year.
1.Council could approve the resolution authorizing an interfund loan to the Community Development Block Grant Entitlement Fund, and/or the Community Development Block Grant Fund, and/or the Sparks Grants & Donations Fund, from the General Fund as needed. Interfund loans from the General Fund to any of the three grant funds, would be authorized. Therefore, no violation of NRS would be noted in relation to this issue.
2. Council could deny authorization of an interfund loan to the Community Development Block Grant Entitlement Fund, and/or the Community Development Block Grant Fund, and/or the Sparks Grants & Donations Fund, from the General Fund as needed. Future violations of NRS will be noted in the City’s Comprehensive Annual Financial Report (CAFR).
I move to approved Resolution No. 3298 to authorize an interfund loan to the grant funds of the City of Sparks.
Res No 3298 to authorize interfund loan 1101 to 1203.pdf