2012 2:00:00 PM

Monday, May 14, 2012 2:00 PM
Sparks Council Chambers, 745 4th Street, Sparks, NV

General Business: 6.6

Title: Discussion and possible direction on the Bill Draft Request (BDR) submittal for the 2013 Nevada Legislative Session and other matters related thereto

Petitioner/Presenter: Adam Mayberry/Adam Mayberry

Recommendation: No recommendation - Staff is seeking specific direction on the City's BDR selection

Financial Impact: N/A

Business Impact (Per NRS 237):
A Business Impact Statement is not required. This is a rule but emergency action is necessary to protect the public health and safety (requires a unanimous vote of the City Council and cannot be in effect for more than six months).

Agenda Item Brief: Staff is seeking specific direction on the City's BDR selection.

Background: At the January 31, 2012 City Council Workshop, discussions on possible bill draft requests (BDR) led to the following background and analysis on the first two topics noted. Subsequent public discussions on the budget have also led to review of other possibilities. The City has an opportunity to submit a single BDR, due by September 1, 2012.

Analysis: Resetting property depreciation rate upon sale of property In an effort to stabilize property taxes, on January 31, 2012, the City Council discussed the possibility of proposing a BDR that would reverse tax depreciation at the point of sale. Currently, buildings are depreciated at 1.5 percent per year up to 50 years, for a total of 75 percent. When a home is sold, the depreciated value stays intact. After further review, re-setting the depreciation rate if a home is sold would require an amendment to the Nevada Constitution. In fact, this topic was introduced by the Nevada League of Cities as Assembly Joint Resolution Number 1 (AJR 1) during the 2011 Session. The bill proposed to amend the Nevada Constitution “related to the assessment and collection of property taxes to authorize the Legislature to provide by law the calculation of the taxable value of improvements to real property upon the transfer, sale or conveyance of the property.” In short, AJR 1 would allow the legislature to enact a statue which provides for a calculation of taxable value upon a sale of a property. AJR 1 passed both the Assembly and Senate and will return to the 2013 Session. As a matter of background, the Nevada Constitution can be amended via three different paths: a legislatively-referred constitutional amendment, a constitutional convention, or an initiated constitutional amendment. AJR 1 is a legislatively-referred constitutional amendment which must pass by a majority of members from both chambers in two legislatives sessions. The measure is then brought to a vote of the people, and if approved by a majority of voters, becomes a constitutional amendment. Charter Committee At the January 31 council workshop, there was general discussion addressing the City Charter. Questions raised included why the Sparks City Charter is governed by a Charter Committee, how the City could provide more flexibility to change the make-up of the Charter Committee, or removing the Charter Committee all together. Sparks’ City Charter, (approved by the legislature in 1975), has a unique history as to why it has been structured the way it is today, as all the chartered cities in the state do. A City Charter represents the cumulative changes made by a city and/or the Legislature moving the operational guidelines from that of a General Law city to a city with its own operating rules, as approved by the Legislature. Some functions of a charter may work well in one City, and not in another. Additionally, some charters require committees that are independent of the City’s governing body such as Sparks, while others have advisory committees. While there are some similarities from city charter to city charter, there can also be significant differences. The differences in City Charters reflect the efforts of that particular city to ask for and receive permission from the Legislature to operate differently from other local entities. The matrix attached provides a comparison of the state’s city charters with changes incorporated from the last legislative session. To change the make-up or authority of the Sparks Charter Committee would require a change to the City Charter and approval by the State Legislature. Nevada Revised Statute 266.050 outlines the steps to surrender a Charter. In short, a petition has to be signed by 15 percent of the voters of the City and then the question whether or not to dissolve the Charter has to appear on the ballot. The dissolution of the Charter would then have to be approved by a majority of the voters. This process is not controlled by the Council or the Charter Committee, but the voters. It should be noted that State Legislators have used the Sparks City Charter Committee as a glowing example of how Charter Committees should be structured and operated. Increasing statutorily the ending fund balance There has been discussion internally on increasing statutorily the ending fund balance that is not subject to negotiations from 8.3 percent to 16.6 percent. After further review, the rule derives from the Nevada Administrative Code (NAC), as opposed to the Nevada Revised Statue (NRS). Changing the NAC is a different process than NRS. It would not require a BDR, but rather working with the Committee on Local Government Finance. The Financial Services Director has been in contact with the Committee and will attempt to engage the committee in this effort. NAC 354.660 Ending balance not subject to negotiations. (NRS 354.107) A budgeted ending fund balance of not more than 8.3 percent of the total budgeted expenditures, less capital outlay, for a general or special revenue fund which receives revenue from property taxes or the Local Government Tax Distribution Account is not subject to negotiations with other local governments or employee organizations. Removal of Health Care as mandatory collective bargaining item NRS 288, section 150(2)(f) lists insurance benefits as a mandatory item to be negotiated with recognized employee organizations. Recent budget discussions have focused on controlling the City’s insurance benefit costs which are equivalent to 10 percent of the City’s general fund budget. Reducing the City’s insurance benefit expense would contribute to putting the City on a path to fiscal sustainability. As a matter of information, other mandatory negotiated items under NRS 288 include: sick leave, vacation leave, holidays, other paid or nonpaid leaves of absence, total hours of work required of an employee on each workday or workweek, total number of days’ work required of an employee in a work year, discharge and disciplinary procedures, recognition clause, the method used to classify employees in the bargaining unit, deduction of dues for the recognized employee organizations, protection of employees in the bargaining unit from discrimination because of participation in recognized employee organizations consistent with the provisions of this chapter, grievance and arbitration procedures for resolution of disputes relating to interpretation or application of collective bargaining agreements, duration of collective bargaining agreements, and safety of the employee. Conclusion In the interest of complying with the BDR submission deadline of September 1, 2012, it is staff’s desire to have a Council approved BDR no later than July 1, 2012. Staff is seeking specific direction which could include the Charter Committee’s proposed changes to the City Charter as a BDR, or not submitting a BDR for the 77th session of the legislative session.

Alternatives:

Recommended Motion: In the interest of complying with the BDR submission deadline of September 1, 2012, it is staff’s desire to have a Council approved BDR no later than July 1, 2012. Staff is seeking specific direction which could include the Charter Committee’s proposed changes to the City Charter as a BDR, or not submitting a BDR for the 77th session of the legislative session.

Attached Files:

CityCh handout-letter sz.xlsx

CityCh handout-letter sz.pdf

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