On January 26, Nye County representatives were asked to appear before the state Committee on Local Government Finance (CLGF) in either Carson City or Las Vegas. We chose to appear before the majority of the committee members (5) in Carson City. Nye County Comptroller Amy Fanning, myself, Commissioners Frank Carbone and Lorinda Wichman were present in Carson City.
Nye County prepared a presentation to the CLGF. It documented the conditions we had been facing over the past 5 years. Assessed valuations of property in Nye County had dropped $588 million since 2010. Revenue in the General Fund has dropped by $4.4 million during that period. At 3 percent per year recovery, it would take until 2026 to reach that level again. Nye County has had to make major adjustments to accommodate those income reductions, including cutting staff by 84 people, employee voluntary furlough days, closing a jail in Tonopah, reducing funding to Cooperative Extension, Senior Nutrition, and the animal shelters in the county. In May of 2014, the comptroller at the time walked off the job in the midst of the difficult budget actions. This was just days before the state-mandated Budget Hearing for the Fiscal Year 2015.
County staff worked with myself for countless hours to assemble the required documents and data to support the budget hearing which was held as scheduled and the budget for 2015 was approved. In June, a month later, Nye County learned Round Mountain Gold would be paying additional net proceeds to the county of over $3 million, which was the result of an audit conducted for the FY11 and FY12 periods. In a special meeting of the Board of County Commissioners, an increase to the budget of the general fund was approved of over $1.5 million. During the next months with a new comptroller and ultimately a 100 percent turnover in the finance departments, the documents recording the budget increase to the Department of Taxation were overlooked. As a result, the financial statements for the year had to show budget overruns in the general fund to the originally approved budget, when in actuality, the county under-ran the budget approved on June 27 by $750,000.
Nye County revenue doesn’t come in on a monthly basis. Sales tax income is distributed by the state to the county 2 months after it is collected. In other words, the county receives the sales tax for January in March or April. Twenty-six percent of the annual revenue for the general fund is received in the last month of the fiscal year, and the last 2 months of sales tax income ($2 million) is received after the end of the fiscal year. This creates cash flow issues during the year when we are trying to issue payroll and pay the standard bills for operations. The county moved cash from an unrestricted fund, (emergency fund) during periods of cash flow shortages. This movement of cash did not increase the approved budget in any way, it merely paid the bills until the budgeted revenue was received and returned to the emergency fund. The movement of the money in itself is not an NRS violation, but the county did not document the money transfer according to Department of Taxation regulated documentation and reporting.
Over the past 10 years, one Nye County elected official overran his budget by over $6 million. At times where the county was experiencing severe reductions in income, the general fund was not able to sustain previous reserves in light of these overruns.
Neither county management nor the county commissioners can prevent an elected official from overrunning their budgets. This was pointed out to the CLGF by Commissioner Wichman. The Committee had no answer to her statements. The budgets submitted to the Department of Taxation over the past 3 years included low ending fund balances and had been accepted by the department. In late 2015, the BoCC took action to dissolve the endowment funds and move the money from the emergency fund to the general fund as a committed balance, thus resolving the low general fund balance issue. In addition, non-compliance issues created by the lack of timely reports and interest allocations by the treasurer are also out of the control of the BoCC, however Terry Rubald did address that the timeliness of the reports has significantly improved but has not realized the NRS required 30 days.
Significant improvements in the internal controls of fixed assets have been accomplished by Nye County, but we were not successful in completing the tagging of the assets. The improvements to the internal controls were reported by Dan McArthur, independent auditor for Nye County, at the audit report delivered on January 19, 2016. The audit report was included in the backup to the CLGF but achieved improvements were not addressed.
County management assured the committee that Nye County will work with the Department of Taxation to remedy these issues and cooperate to ensure proper documentation is completed and submitted in a timely manner.
By recommending the county be placed under the condition of fiscal watch, the committee offered “help” to the county, although Committee Chairman Marvin Leavitt did not define how the help would materialize.
The committee also recommended a fiscal watch for the Northern Nye County Hospital District. Since the closure of the hospital in Tonopah in September of 2015, there have been no medical services available for over a 100-mile radius, including any kind of trauma care for injuries occurring on Highway 95. Former Town of Tonopah Manager James Eason spoke to the committee about the fact that a hospital model cannot sustain in a rural setting. The hospital district was set up to help fund a hospital, but since that model is not sustainable, the communities have been very vocal about desiring an alternative medical model proposed by Renown, a nonprofit provider of extensive medical services in the Reno area. Renown is proposing an urgent care facility that might be able to ultimately provide trauma care to central Nevada through telemedicine and on sight providers.
Members of staff for the town of Tonopah and the county, in conjunction with the BoCC have been working tirelessly to ensure medical care to the rural communities of central Nevada and Nye County. We need “help” to make this happen, not prevent it. We need to be able to make existing law work toward, not prohibit, the needs of the people. To this end, we will not stop until we are successful. We are committed to that goal.
We are short-handed, but the staff we have at all levels is always willing to step up to the challenge and get the job done.
Pam Webster is the Nye County manager, a position appointed by the Board of County Commissioners.