Certain capital projects were approved in prior year Capital Improvement Plans (CIP), but were not completed in FY19, and the budget authority lapsed.  The FY20 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 (this is an alternative method for Capital Projects Funds) or revenues in excess of budget in a Special Revenue Fund.  With the FY19 audit 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, Development Serives Enterprise Fund or the Motor Vehicle 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.  In addition, NAC 354.420 requires a “Revised Revenue Schedule” (included as Attachment B1 though B7 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 Fund augmentations, per NRS 354.598005(4), do not require the submission of the form to the Nevada Department of Taxation.   Therefore, there is no “Revised Revenue Schedule” included for the Sewer Enterprise Fund, Development Services Enterprise Fund or the Motor Vehicle Internal Service Fund.

In order to complete these previously approved CIP projects and not violate NRS budgeting requirements, it is necessary to augment the FY20 budget.  Resources are available in the appropriate funds.  Attached is a Resolution to augment the City’s Capital Projects Funds, two Enterprise Funds (Sewer and Development Services), and the Motor Vehicle Internal Service Fund.

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, 2020.  Augmentation of the Enterprise and Internal Service Fund budgets will be effective upon Council approval of the Resolution.

Should this resolution to augment the budgets not be adopted, expenditures in the various funds could exceed appropriations, causing a violation of NRS 354.626.  The violation would be noted in the audited financial statements , and a written explanation of the violation would need to be submitted to the Nevada Attorney General for prosecutorial consideration.

1. Council may adopt the Resolution to augment the FY20 budget and provide necessary appropriations for the previously approved, prior year CIP projects.

2. Council may reject the Resolution and provide further direction to the City Manager.

I move to adopt Resolution No. 3359 to augment the FY20 Capital Projects Funds, Enterprise Funds and Internal Service Fund by $12,048,498 to provide appropriations for capital projects approved, but not completed in prior years.