On April 24, 2019 the City Council approved the FY20 - FY24 Capital Improvement Plan (CIP).  Listed in year two (FY21) of that CIP document, was a project called Sanitary Sewer Upgrade Projects - Prater Way and McCarran Blvd in the amount of $1,974,105.  It was anticipated that a portion of this project would be done in coordination with the RTC as part of their East Prater Way Rehabilitation project and that the RTC portion would begin in FY21.  However, RTC will be ready to begin that portion of the project in FY20 so an interlocal cooperative agreement (ICA) to commit Sparks's cost share immediately precedes this  item on the meeting agenda for February 24, 2020.  There are no budget appropriations in FY20 for this project as it was to be budgeted in FY21 upon approval of the FY21 Budget.  Therefore,a budget augmentation is being brought forward to provide appropriations in FY20 should that ICA be approved.

Per NRS 354.598005(4) and NAC 354.481, an Enterprise 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.

NRS 354.598005 requires the governing board adopt a Resolution providing for the budget augmentations.  This requirement applies to all fund types.

The FY20 budget augmentation will be effective upon delivery of an executed copy of the Resolution to the Department of Taxation, which must occur before June 30, 2020.

1.  Council may reject the Resolution to augment the FY20 budget.  Rejecting the augmentation but approving the ICA, could cause expenditures in the Sewer Enterprise Fund to exceed appropriations, and would therefore be a violation of NRS 354.626.  The violation would be noted in the audited financial statements, and written explanations of the budget violation would need to be provided to the Department of Taxation which ultimately may refer the issue to the Nevada Attorney General for possible prosecution.

2.  Council may adopt the Resolution to augment the FY20 budget and provide approriations of $1,152,000 in the Sewer Enterprise Fund.

I move to adopt Resolution No. 3356 to augment the FY20 budget of the Sewer Enterprise Fund by $1,152,000 to provide FY20 appropriations for sewer and storm drain upgrades on E. Prater Way in coordination with work being performed by the Regional Transportation Commission (RTC).