Higher yields hoped to be squeezed out of investments

Thursday, Jan. 17, 2002 | 9:39 a.m.

CARSON CITY -- Gov. Kenny Guinn wants the state to work with the Clark and Washoe county school districts to determine whether they can increase the return on their investments to help offset pending budget shortfalls.

The governor said every avenue must be explored to produce additional revenue for the state and schools. The big financial crunch, he said, will come next fiscal year, which begins July 1.

State education officials said this week the Clark County School District could face a budget shortfall next fiscal year of up to $15 million; the Washoe school district could face a $7 million deficit.

The latest estimates regarding state government call for a shortfall in excess of $10 million this fiscal year. There has been no official estimate for next fiscal year.

The governor Wednesday asked state Treasurer Brian Krolicki to work with both school districts. He said he wants to look at the rates of interest the three governments are collecting on their investments in an attempt to learn whether improvements can be made.

He said the state may be able to help the schools realize a higher yield on their investments, or the state could learn from the local districts.

If the three combined their investments, Guinn said, they may be able to get a "better deal" or a higher interest rate than they are currently earning.

Krolicki said the Clark County School District has a $600 million portfolio; his office, $2 billion. In addition, there is about $500 million in a local government investment program.

The discussion came during a meeting of the state Board of Finance, which agreed with Krolicki to issue $51 million in bonds to partially pay for construction of projects for the state and the University and Community College System of Nevada.

Krolicki said $17 million of that $51 million would be used for refinancing to gain a lower interest rate on existing bonds. That will save about $1.5 million in interest payments, he said.

Guinn asked Krolicki to learn whether additional steps can be taken to save money on bonds that have already been issued at a high interest rate.

Krolicki replied, "We've been shaking the trees as hard as we can."