Little-known fund’s $100 million might save jobs, programs

By Joe Schoenmann

Wednesday, Aug. 5, 2009 | 2 a.m.

Service employees listened intently last week as number-crunchers said Clark County will begin the next fiscal year $115 million in the red — a deficit that could lead to job cuts among their union’s 9,500 county workers.

But officials also offered some hope in the brainstorming session during which administrators and employees discussed how to trim the county budget.

The layoffs of social service workers, maintenance employees and security personnel — and corresponding service reductions — could be avoided, officials said, if the county takes the unusual step of moving money from a special account for capital projects and equipment purchases and uses it for operating costs.

State law typically prevents governments from using tax dollars set aside for capital projects on salaries. But the $101 million in Fund 437, as the special account is known, was taken from the county’s general fund and therefore carries no such prohibition, officials said.

The existence of Fund 437 surprised some county commissioners, who have been calling on county staff to find a way to spare cuts in social services as demand for assistance increases during the recession.

“No one ever knew about it,” said Commissioner Chris Giunchigliani, adding that she was irked by that fact. “It’s kind of like the hidden little fund to store this extra money in.”

Fund 437 is designated for dozens of projects that can be postponed, officials said.

About $5.6 million, for example, is targeted for the demolition of a county building on Bridger Avenue. About $1.6 million is set aside for vehicle replacements. There is $1.5 million for a Las Vegas Justice Courtroom expansion. The fund also includes $1.2 million for safety surfaces in parks, about $500,000 for deferred maintenance and $139,000 for a “trash enclosure.”

Not every dime could be tapped for operating costs. Much of it is needed to make payments for work that has been completed. But officials said many millions could be used.

The fund was intended as a sort of savings account of last resort, said Guy Hobbs, who was Clark County’s fiscal director in the early 1980s, when Fund 437 was created.

“It gives the county a secondary hedge in times of fiscal volatility. That said, when it’s gone, it’s gone,” Hobbs said.

In the past, dipping into the fund for operating expenses was rare “because revenues grew so rapidly,” Hobbs said. “But what I’m seeing them go through now — particularly with the raping and pillaging by the Legislature, which is absolutely unprecedented — I can understand the idea.”

Mike Ward, researcher for the county Service Employees International Union, said the commissioners should use the fund to preserve services as they continue trying to trim costs.

“Nevada is already near the bottom in what we spend on service employees,” Ward said. “And they’re going to let it go lower than that?”

The county contends it has been hard hit by both the economy and moves by the state Legislature. To balance the state budget, lawmakers decided to take 4 cents of every $100 in property tax revenue from Clark County — worth about $60 million over the next two years. County administrators are still sorting out the effects of that loss.

But Giunchigliani said she thinks $11 million to $15 million from Fund 437 could be used to save social service programs that have been hurt by the decline in tax revenue. She said she isn’t troubled that it would be a short-term solution because the Legislature has promised that its property-tax grab will expire in two years.

If commissioners decide to tap the fund, she added, it could take weeks to sort out.

If, for example, they seek to take money from the roofing fund, they might expect an argument from county staff about why the funding should stay where it is.

Commissioner Steve Sisolak said using the money for county costs might hurt private businesses that rely on county contracts. “Will taking from this fund hurt someone who does business with the county? I don’t know the answer to that yet,” he said.

Also unresolved is whether the money could be used to boost the Social Service Department budget. Commissioners spent more than an hour Tuesday debating whether state law caps how much money the county can spend on such programs.

“It’s not a bad idea” to use Fund 437, Commissioner Susan Brager said. “But I think we need to be very, very careful that we’re not harming anything or other areas by doing this.”

The idea certainly has some appeal, especially among county workers on the brink of losing their jobs.