On Friday, March 25, the Fallon City Council held a 9 a.m. special meeting. The members reviewed and approved corrective action be taken to correct and prevent further violations of the Nevada Administrative Code and the Nevada Revised Statutes. A violation of each state codified regulation by the city was reported in Note 2 of the city's 2021 Annual Comprehensive Financial Report.
According to NAC 354.750, an inventory of all equipment and other personal property constituting capital assets of the city must be conducted every two years. Last year, the inventory was not completed in time. City staff with expertise in their respective areas are in the process of conducting the physical inventory to ensure its accuracy. An overall count will then be presented to the Clerk/Treasurer and Chief of Staff for review and inspection, targeting its completion in May 2022.
Per NRS 354.626, during fiscal year 2021 the city's Electric Enterprise Fund and Landfill Enterprise Fund both had expenses that exceeded their budgeted appropriations.
It was noted in the city's plan of correction that the Electric Fund's purchase costs have increased significantly due to market and climate conditions. The billing to purchase energy runs two months behind, so May and June have to be estimated to meet the budget augmentation fiscal year deadline. Even though that augmentation was approved, it was not enough to meet actual cost increases for those two months. The plan of correction calls for staff to be more conservative with the May and June estimates.
The Landfill Fund exceeded its appropriation for the landfill closure cost liability which is updated annually by the city's landfill consultant. Here too, cost calculations are not completed until months after the end of the fiscal year. This past year actual calculated costs went beyond the budgeted amount due to inflation and the number of tons received at the landfill. The plan of correction stated the city staff to be more conservative with the landfill closure cost estimates.
City Clerk/Treasurer Sean Richardson addressed the Council to discuss the corrective actions the city is taking to ensure these violations do not occur again saying, “The enclosed memo to the mayor and council outlines the details of the plan of correction for each violation. If approved, this plan of correction will be forwarded to the Department of Taxation to comply with the statutory requirement.”
Councilwoman Karla Kent asked, “The plan states that staff will be more conservative with their estimates. But would it be conservative as the word, or would it be more liberal? I think they need to be higher with their estimates.” Richardson replied, “Yes, higher is what I was going for, and before I send it over to the Department of Taxation, I can change that.”
The council unanimously approved the corrected plan of correction to prevent any further violations.
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