Word of the RSCVA's request for repayment of the sum reached city officials late Friday afternoon. In reaction, officials have forwarded the issue on to the Sparks city attorney's office for review and to determine how to approach the debt.
Tourism and marketing committee members Councilman Ron Schmitt, Councilman Ron Smith and John Ascuaga's Nugget CEO Stephen Ascuaga met with two RSCVA representatives Tuesday to find possible recommendations to make to the Sparks City Council on the matter.
"I don't think it's prudent to have this bombshell dropped on us," said Schmitt, chairman of the committee. "We need to postpone any expenditures until legal gets involved. The (city) attorneys are looking at it to see what implications come of it."
The accounting oversight stemmed from a 2003 change to the Nevada Revised Statutes that directed the RSCVA to fund the city of Sparks at no more than $200,000 per fiscal year.
According to Michael Thomas, executive director of marketing for the RSCVA, the overpayment deals with fiscal years 2006, 2007 and 2008, during which Sparks received $436,587.
The debt is cause for concern for the city, which could lose all but $60,000 of its special events budget.
"It's too early to know what the implications are," said Sparks spokesman Adam Mayberry. "What (Schmitt) attempted to do today is to buy more time to further review the situation and get a better handle on the projections. He felt the appropriate thing to do was just to hold off on the allocation of other funds until we review the situation further, get a better understanding of the true impacts and likely to reconvene."
According to information provided by the city manager's office, last year the tourism and market committee funded the full $200,000 to:
• Nevada Hispanic Services for Cinco de Mayo — $30,000
• John Ascuaga's Nugget for Star-Spangled Sparks and the Best in the West Nugget Rib Cook-Off — $60,000
• Roadshows, Inc. for Spring Fever Rally — $15,000
• Sparks Chamber of Commerce for Star-Spangled Sparks — $20,000
• City-sponsored events Arts in Bloom ($15,000), Farmer's Market ($30,000) and Hometowne Christmas ($30,000)
"We wouldn't anticipate (these events) would go away," said Stan Sherer, director of Sparks Parks and Recreation.
But quality of the events would be affected, he added.
The city funding of these events help in a variety of ways, from event set-up to clean-up and public safety, Sherer said.
Sparks events typically have drawn many demographics of tourists, particularly among the western region. Waning economic conditions are casting a shadow over this year's projections.
The RSCVA also has lower expectations for visitors in 2009. The region's tourism authority forecasts a 19.2 percent decline in room tax revenues this approaching fiscal year and subsequently is trimming about $7.5 million from its budget.
Tom Smith, vice president of finance for the RSCVA, told the committee Tuesday that he and CEO Ellen Oppenheim met with Sparks City Manager Shaun Carey.
"We certainly are amenable to working out the terms," he said. "This was an oversight. We're not pointing fingers by any means."
The Nevada Revised Statutes designates two streams of funding for the city of Sparks, Thomas said. One source of that funding is used for the redevelopment of Victorian Square. After the change to Nevada law in 2003, payments to Sparks' tourism committee should have been capped at $200,000 per year. But the RSCVA paid about $321,305 in 2006, $362,512 in 2007 and $352,769 in 2008, the RSCVA said Monday.
Oppenheim released a written statement expressing a willingness to work with Sparks officials to resolve the matter.
“This is an unfortunate finding given the challenging economic landscape facing the travel and tourism industry today," Oppenheim said. "The RSCVA will work with the city of Sparks to identify a fair and equitable schedule to repay the funds.”
Now the RSCVA awaits an answer from the city.
"We realize this was an oversight and want to work in a way with the city that is proactive and collaborative and try to make it be the least impactful," he said. "We realize this is not good timing."
Mayberry said the RSCVA has an important role in regional tourism, and despite occasional differences with the city the success of both entities is important.
"We still need to work closely together," he said. "I think we're fairly confident that we can work out an appropriate resolution for the overpayment issue."
The Sparks City Council has requested that the state Legislature pass AB98, which would redirect all future new room tax revenues generated in the city of Sparks to city coffers for its own tourism promotion activities. Under current law, all room tax revenue generated in Sparks goes to the RSCVA.
Schmitt was frustrated with the situation Tuesday.
"As chairman, as an elected official, I'm pretty taken aback at how they presented this to the city," Schmitt said Tuesday. "We were not given a phone call. ... I'm taken aback. I think there's a lack of respect for the regional partnership.
"I'm sorry I'm angry about it," Schmitt went on. "I've had some conversation with the business community and they feel it was not handled well."