Because here most people think that a local government’s budgets ensure that the public is protected from inappropriate financial manipulation because they: are mandated¹ by the State; must be balanced²; and, are reviewed by the State Department of Taxation (“NDOT”), here we examine what constitutes a “budget” given “the devil is in the details.”³ After all, isn’t a budget’s intent to provide the confidence the public requires to conclude its local government is not guilty of financial “monkey business?” So with that said,

The Local Government Budget And Finance Act⁴ (“LGBFA”): was enacted⁵, in part, to “provide specific methods enabling the public, taxpayers and investors to be apprised of the financial preparations, plans, policies and administration⁶ of all local governments,”⁷ and (expressly) includes…districts organized pursuant to Chapter…318…of NRS.”⁸

As Aforesaid, The LGBFA⁴ Expressly Requires IVGID “to Adopt a Final Budget:”⁹ 

What Exactly is a “Budget“ For LGBFA⁴ Purposes? NRS 354.492 instructs that the term “budget” represents a local government’s¹⁰ “plan…of financial operation embodying estimates of proposed expenditures and expenses for a given period; and, the proposed means of financing them.”

What a Local Government‘s¹ “Budget“ is Intended to Accomplish: According to NRS 354.472(1), “the purposes of NRS 354.470 to 354.626, inclusive, are:

(a) To establish standard methods and procedures for the preparation, presentation, adoption and administration of (the) budgets of all local governments;

(b) To enable local governments to make financial plans for programs of both current and capital expenditures, and to formulate fiscal policies to accomplish these programs;

(c) To provide for estimation and determination of revenues, expenditures and tax levies;

(d) To provide for the control of revenues, expenditures and expenses in order to promote prudence and efficiency in the expenditure of public money;” And most importantly,

“(e) To provide specific methods enabling the public, taxpayers and investors to be apprised of the financial preparations, plans, policies and administration of all local governments.”

Budgets Are Important Because They Appropriate Public Monies¹¹:

A Local Government Must First Adopt a Tentative Budget: On or before April 15¹² of each year, NRS 354.596(1) instructs that “the officer charged by law…or the governing body (of a local government)…shall cause to be prepared…a tentative budget for the ensuing fiscal year.”

Public Hearing/Tax Commission/NDOT Oversight: “The tentative budget for the following fiscal year must be submitted to the county auditor and filed for public record and inspection in the office of: (a) the clerk or secretary of the governing body; and (b) the county clerk.”¹³ In addition, “a copy of the tentative budget must be submitted: (a) to the Department of Taxation.”¹² “At the time of filing the tentative budget, the governing body (of a local government) shall give notice of the time and place of a public hearing on the tentative budget.”¹⁴ “At the time and place advertised for public hearing…on or before June 1 of each year¹⁵…a majority of all members of (a local government’s)…governing body…must…certif(y a)…final budget.”¹⁶ Once adopted, that budget “must be transmitted to the Nevada Tax Commission” and “distributed as determined by the” NDOT purportedly for oversight.

The Consequences if a Local Government Fails to Timely Adopt a Budget: NRS 354.598(2) instructs that “should the governing body fail to adopt a final budget that complies with the requirements of law and the regulations of the Committee on Local Government Finance (‘CLGF’) on or before the required date, the budget adopted and used for certification of the combined ad valorem tax rate by the Department of Taxation for the current year¹⁷, adjusted as to content and rate in such a manner as the Department of Taxation may consider necessary, automatically becomes the budget for the ensuing fiscal year. When a budget has been so adopted by default, the governing body may not reconsider the budget without the express approval of the Department of Taxation.”

So now you the reader know!

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1. NRS 354.598(2) mandates that most “local government(s), specifically including IVGID [see NRS 354.474(1)(a)], “shall adopt a final budget…before June 1 of each year.”
2. See NRS 354.598(5) which instructs that “no governing body may adopt any budget which appropriates for any fund any amount in excess of the budget resources of that fund.” Accordingly, the District’s “financial planning addresses the…fundamental principle of a balanced budget. (Therefore) at a minimum, the District processes support…a balanced operating budget, encourage…commitment to a balanced budget under normal circumstances, and provide…for disclosure when a deviation from a balanced operating budget is planned or…occurs” (see Board Policy No. 6.1.1.1).
3. This was a pet phrase of the District’s former General Manager (“GM”), Steve Pinkerton.
4. See NRS 354.470.
5. See NRS 354.472(1).
6. That would be audited financial statements [see NRS 354.624(1)].
7. That includes the Incline Village General Improvement District (“IVGID”) given NRS 354.474(1)(a) instructs that “the provisions of NRS 354.470 to 354.626, inclusive, apply to all local governments (expressly including)…every political subdivision or other entity which has the right to levy or receive money from ad valorem or other taxes [General Improvement District (“GID”) Boards have the “power and authority to levy and collect general (ad valorem) taxes on and against all taxable property within the(ir) district(s)” (see NRS 318.225)], or any mandatory assessments (GID Boards have the power to impose “special assessments upon lands and premises…specially benefited”{(see NRS 318.350(1)}].
8. IVGID was organized pursuant to the provisions of former NRS 318.055(1)(a) which instructs “the formation of…(GIDs) may be initiated by: a resolution adopted by the Board of (Washoe) County Commissioners” (“County Board”). Such resolution was Bill 57 of Ordinance 97 which was adopted by the County Board on May 20, 1961.
9. See NRS 354.598(2).
10. NRS 354.474(1)(a) defines “local government” as “every political subdivision or other entity which has the right to levy or receive money from ad valorem or other taxes or any mandatory assessments, and includes, without limitation…districts organized pursuant to chapter…318.” As elsewhere discussed, the Incline Village General Improvement District (“IVGID”) was organized pursuant to NRS 318 [“adoption of (an) ordinance creating the district shall finally and conclusively establish the regular organization of the district against all persons, which district shall thenceforth be a governmental subdivision of the State of Nevada” {see NRS 318.075(1)}], and has the right to levy its own ad valorem taxes (see NRS 318.225).
11. NRS 354.598(4) instructs that “upon the adoption of the final budget…the several amounts stated in it as proposed expenditures are appropriated for the purposes indicated in the budget.”
12. See NRS 354.596(2).
13. See NRS 354.596(1).
14. See NRS 354.596(3).
15. Unlike State mandated audits [see NRS 354.624(1)], there is no provision in the NRS for extensions of time to fulfill this certification requirement.
16. See NRS 354.598(3).
17. In other words, the tentative budget [see NRS 354.598(3)].