County cash crisis confirmed

Nye County officials received confirmation of their projected cash-flow shortfall fears during an audit presentation at a County Commission meeting Tuesday.

Revenues tied to property and consolidated tax have dropped nearly $3.1 million, a larger deficit than first projected by Nye County last year. The two taxes account for more than half of the county’s general fund revenue.

Independent auditor Dan McArthur reported no evidence of noncompliance or other matters that are required to be reported under government standards. But, he said, he could offer no opinion on the county’s response to deficiencies.

Deficiencies cited include prompt reconciliation of the general ledger, timely recording of capital assets and timely investment income allocation completion. The county was also notified that though revenues are recorded by the treasurer, those entries should also be reviewed by the comptroller. McArthur noted that the county had taken measures to correct each of the deficiencies, but was unable to fully implement corrective action by the June 30, 2014 end-date for the audit.

McArthur said a portion of the decline in the property tax was due, in part, to a net proceeds shortfall. Net proceeds, he said, are difficult to budget for.

To compound the problem, he said, the county is limited in its ability to raise additional revenue by the three-percent property tax cap. Adding insult to injury is the fact that consolidated tax is “driven by consumers and the commission has no control over that.”

In response to a question by Commissioner Dan Schinhofen, McArthur said that he did not see an issue or problem with the way properties were assessed. However, McArthur added a county audit does not target individual offices, which would create a more detailed account of specific issues.

An audit, he explained, examines the internal controls that the county has in place, and “sample” tests those controls. An audit would not be able to determine if properties were accurately assessed.

McArthur said, based on similar situations in other municipalities, that the solution to reducing those budget line item shortfalls, is with new construction.

McArthur recommended that the board develop a short and long-term plan to deal with the shortfalls and their impact to cash flow and the general fund in the future.

An audit of the town of Pahrump’s 23 funds revealed auditor concerns about the viability of the ambulance service based on long-term deficits. Ambulance service is costing the town approximately $715,000 more than it generates in revenue. Consistent shortfalls began approximately four years ago.

Similar to the recommendation to the commission for the county budget, McArthur suggested the commission, who now provides financial oversight to the town of Pahrump, implement a financial plan to address the viability of ambulance service.

McArthur reported that no violations or instances of non-compliance were detected in the town audit.

Amidst the prognosis of the county’s dire fiscal situation, a 4 - 1 vote allowed for the inter-departmental promotion in the assessors’ office of an unfilled chief deputy assessor position.

The position comes with a budget line item of approximately $117,662, which staff said would reflect no more than a $5,000 increase. The promotion does not add an additional employee to the budget, they explained. Commissioner Donna Cox opposed the measure.

Commissioner Dan Schinhofen echoed chairperson Lorinda Wichman’s concerns that six additional new hire proposals would require employees to be laid off.

Sheriff Sharon Wehrly and District Attorney Angela Bello advocated that unfilled positions in their offices be filled.

At the suggestion of County Manager Pam Webster, the commission authorized the recruitment for four unfilled positions pending budget impacts and confirmation.

Webster said she hopes to have additional budget information available in February.

The next meeting of the Nye County commission will be held on at the County Commission Chambers located at 101 Radar Road, Tonopah on Feb. 3 at 10 a.m.