The council approved an additional $4.22 million in spending due to cost overruns in several funds
CLARK COUNTY —The 2018 version of the Clark County Council wrapped up the year approving $4.22 million in overspending that had escaped notice.
“We have adequate funds,” said County Manager Shawn Henessee, “but what we’re looking for is the authority to spend those funds.”
The overspending came as an unpleasant surprise for Henessee.
“There was a combination of factors that got us to this point,” he told the council. “There was a failure of software in the first part, but in the end it’s fundamentally a management issue that we’re taking a number of steps to make sure that this doesn’t happen again.”
Those steps include more training, and fund managers assigned to verify that the software is properly tracking expenses.
“The software should not have allowed expenditures to go forward, and should have flagged it,” Henessee said, “but also, more importantly, we should have been keeping track on it, the human element.”
Henessee said the added spending would not impact the county’s general fund balance, which is mandated under state law.
The largest amount was $2.25 million for clean-up at the decommissioned Camp Bonneville military site. The U.S. Army is funding the clean-up, which is expected to last another 18 months, so the council simply needed to authorize spending the money, though the Army will refund the county.
“We just need to have the authority adjusted to be able to take this revenue the Army gives us for the cleanup in order to pay the contract for the cleanup of the unexploded ordnance,” said Henessee.
The next highest expense was a $1 million for liabilities in the county’s healthcare self-insurance fund. Henessee said premiums, claims, and legal expenses ended up about 3 percent higher than expected. Still, he said revenues for the fund have increased, so the county has the money to cover the added cost.
The council was also asked to approve an additional $80,000 for Tri-Mountain Golf Course, which is owned by the county but operated by a third party. Henessee said Tri-Mountain actually saw record sales in 2018, but that meant increased expenses for ordering food, drink, and other items to be sold. The fund was expected to be covered under the budget.
A total of $75,000 was also needed to support the replacement of computer hardware and software. Henessee said that the county has increased replacement of Windows 10 machines, contributing to the overrun. The fund has enough money to cover the added expense.
Henessee said he does expect the county to need to use its line of credit to cover at least part of an $820,000 cost overrun in a fund that pays for maintenance and operations. The cost of utilities, maintenance, and service contracts have increased, contributing to the unexpected cost overrun.
“Absolutely, and I’ll be holding people accountable so that they understand that, in the end, my responsibility is going to be to assure that we’re not overspending our budget authority,” Henessee told the council, “because if we’re going to be in this situation, this needs to go through a regular process, with a supplemental, not on the last day of the biennium.”
The council voted earlier this year to transition back from a biennial budget, to an annual one.
“I do think that our discovering this is, in part, because we’re in the process of converting from biannual to annual,” said Jeanne Stewart, who was wrapping up her last day as District 1 councilor. “Otherwise this would have been handled in a different process at a different time.”
Henessee agreed, saying that he doesn’t believe the unexpected last minute spending authorization is something that has happened regularly.
“It can still happen in an annual budget. I certainly don’t expect it to happen again,” he said. “If it does, then we take care of it through the supplemental process.”
Councilor John Blom added that he was thankful the issue had been discovered and brought out this way, rather than being brought up during an audit of the county’s expenses.
The council unanimously approved the correction to the budget before wrapping up its work for 2018. The new council members had been sworn in just before the emergency, but won’t have their first meeting until next week.