Regents running out of time to pay off school debt

Jennifer Knight

Monday, Dec. 10, 2001 | 9:10 a.m.

Less than six months away from a critical deadline to pay off a multimillion-dollar court settlement, the Board of Regents decided Friday to leave a plan to bail out the Fire Science Academy in Carlin hanging for another month.

Regents voted 9-1 to table a plan that would sell $31 million in revenue bonds to pay off the academy's debts. The University of Nevada, Reno, which runs the academy, defaulted on $230,000 in loan payments last year and must repay the entire debt by May 1 or risk paying $5 million in penalties.

If regents don't act during a special meeting scheduled for Jan. 12, the university system could miss the deadline. It takes three meetings to approve the issuance of a bond.

UNR President John Lilley presented a plan to settle the debt. Although the original proposal raised student registration fees by $7 per credit hour over three years, he presented regents with an alternate option to reduce that amount to $3 per credit hour over three years.

That revenue would cover the interest payments on the bonds, while the original proposal would have generated an additional $8.5 million to reopen the academy.

Regent Mark Alden declared that by introducing the alternate proposal, the board was in violation of the state's open meeting law, despite Ray's advice to the contrary.

Regent Doug Hill, who cast the dissenting vote, said the indecision of his collegues was unacceptable under the circumstances.

"This is a breach of our fiduciary duty," Hill said.

"I'm just offering to postpone this until January so we can talk about it in detail," Chairwoman Thalia Dondero said.

Presuming regents decide to proceed with the sale of bonds on Jan. 12, they must then schedule a second meeting to approve a bond contractor to put the bonds on the market. In a third meeting the bond contractor would present the regents a plan to sell the bonds.