School District braces for shortfall

Terry Webster

Friday, Nov. 9, 2001 | 9:26 a.m.

As the local economy declines, so does the Clark County School District's financial outlook, officials said.

District officials are reviewing ways to cut $3.2 million in administrative costs in an effort to balance the 2001-2002 budget. Plans call for a 10 percent reduction in administrative costs, including accounts payable or staffing.

School Board members this morning began to try to determine what caused the shortfall and how to fix it.

"Here we are cutting again," Superintendent Carlos Garcia said before the meeting. "We don't like doing it. It's not fun to do."

The district has until Jan. 1, 2002, to file a final amended budget for 2001-2002.

And as planning begins for the 2002-2003 budget, the outlook remains grim. A $10 million shortfall is expected.

Chief Financial Officer Walt Rulffes warned the School Board that local economic woes as a result of the terrorist attacks are trickling down to the district. The attacks prompted a reduction in tourist travel to Las Vegas, the base of its economy.

"The district's main revenues result from sales taxes, gaming taxes and property taxes," Rulffes stated in a memo to the School Board.

"We are becoming increasingly concerned that the economic downturn may affect future revenue sources not only for Nevada, but also for the district. We have already been notified by the Department of Education that (aid) payments will be delayed due to state cash flow problems."

The school construction program may even take a hit. The district builds roughly one new school per month.

"School construction bonds are funded, in large part, by room taxes," Rulffes stated. "Early predictions indicate a likely reduction in that source of revenue."

Added to the new budget issues are a few old ones: Potential cuts to arts and athletics and increasing the busing limit for high school students from two to three miles. These issues also came up during planning for the 2001-2002 budget. Ultimately, though, the programs were preserved.

One suggestion calls for the district to apply for special grant funding to help maintain arts and athletics.

On another matter, school officials began looking at recommendations made by an independent audit conducted by Kafoury, Armstrong & Co.

One of the findings of the audit is that the district is not in compliance with cash management of individual programs funded by federal grants, a concern raised for the third consecutive year. One criticism in this area is that record-keeping does not allow for the computation of interest income. Additionally, the interest income is not being reported to the grantor agency, according to the audit.