In desperate times, School District dips into reserve fund

By Emily Richmond (contact)

Monday, Dec. 15, 2008 | 2 a.m.

In 2006 the Clark County School District crowed that its bond rating had been elevated to “AA3” from “AA2” — just two notches below the highest possible rank.

In raising the rating, Moody’s Investors Services cited the district’s meeting its “emergency” reserve requirements.

On Thursday the School Board voted to pull $22 million from its reserve fund to help offset $120 million in budget cuts. It’s a move that could compromise the district’s bond rating.

District policy is to have 2 percent of its operating budget in reserve, which is projected to be about $44 million.

The fund allows the district to continue operating should the state’s regular payments be unexpectedly delayed. The $44 million would last about 5.5 days.

“We’re very concerned any time we ask you to waive this policy,” Jim McIntosh, the district’s deputy chief financial officer, told the School Board. “But we are in a very extreme situation.”

School Board members echoed McIntosh’s concerns, particularly the potential effect it could have on the district’s next bond campaign.

A higher bond rating can mean the district’s school construction dollars will stretch further, ultimately saving money for taxpayers. Higher-rated bonds typically attract more interested buyers, resulting in more competitive bids. And the district would also spend less on bond insurance premiums.

Fortunately, the district doesn’t plan to ask voters to support a new capital improvement plan until 2010. This year’s campaign was put on hold because of slower enrollment growth and the overall economy.

Restoring the reserve funds before the next bond campaign will be “a top priority for us,” McIntosh told the School Board.

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The district plans to drop a popular program that helps students improve their time management and study skills, and replace it with a cheaper in-house substitute.

AVID, or Advancement Via Individualized Determination, is a trademarked program created in the early 1980s by a San Diego teacher. This year, about 2,500 Clark County students participate at 32 middle and high schools. The program was on the cut list approved by the School Board Thursday, to save $2 million annually.

Jhone Ebert, associate superintendent for curriculum and instruction, said most of the money was spent on teachers and training. The district will try to replicate some of AVID’s “best practices” on its own, Ebert said.

Block scheduling also went on the chopping block Thursday. Students at 18 high schools follow a modified schedule that allows them to take more elective classes. The schedule requires additional teachers.

Unlike the case with AVID, there’s no means of duplicating even a portion of the program without the funding.

Before the School Board vote, Georgann Ray spoke in favor of block scheduling, saying it has made a world of difference in her daughter’s experience at Centennial High School. During a recent college tour, a professor was impressed that her daughter had taken eight science classes, and said she would be well prepared for the rigors of higher education.

“I was proud to say we are from the Clark County School District,” Ray said.

The district has been able to afford block scheduling at only 18 high schools, at a cost of $11 million, raising questions of fairness. But Way said that’s not a reason to deny even some students the opportunity to excel.

“Not all schools have the magnet programs, not all schools have JROTC,” Ray said. “But whoever we can give those benefits to, let’s give them. We don’t want everyone to be average.”

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There is some good news for district.

The nation’s top high schools include seven Clark County campuses, according to the latest rankings by U.S. News & World Report.

The magazine gave schools gold, silver or bronze honors using a formula that measured academic achievement on standardized tests. Also factored in were student demographics, including socioeconomic status and ethnicity.

Schools were judged on the width of the achievement gap for minority and low-income students, compared with their more affluent white classmates.

Las Vegas Academy and Advanced Technologies Academy, two of the district’s most honored magnet programs, earned silver honors, as did Coronado High School in Henderson. The three dual-credit campuses that allow district students to take classes at the College of Southern Nevada each received bronze honors. Boulder City High School also had a bronze rating.