Fire center ran up $4.27 million deficit

When it finally shut down this fall, the Fire Science Academy near Elko was $4.27 million in the red.

And regents were told Thursday that, if the University of Nevada, Reno loses litigation over canceling its contract to operate the center, it could wind up costing another $22 million.

UNR Finance Vice President Ashok Dingra told the board even with the loans from the UNR Foundation and other campus sources totaling $1.75 million, the operation lost $2.36 million in its two-year life.

The center was finally shut down recently because gasoline used to create practice fires at the facility is spilling into the ground and contaminating groundwater at the center just west of the Carlin Tunnels on Interstate 80.

The university has canceled its contract and stopped making the $233,000-a-month payments to All Star Investments. All Star built the center and the university agreed to lease it for 20 years. But the campus and All Star are in litigation over whether UNR should be forced to honor the contract to operate the center.

Dingra told regents the center lost $104,386 in its first partial year of operation. But during Fiscal 1999-2000, the center went $3.8 million in the red and added another $326,240 before it was shut down this fiscal year.

Regent Steve Sisolak said he thinks the university has good legal arguments for closing the operation and canceling the contract to operate it but that he's still concerned about the potential liability.

"What with the interest and penalties, it could be astronomical," he said. "I don't think anybody knows what the biggest figure could be."

The regents, meeting as the finance committee, also received a report showing a $2.8 million shortfall in predicted revenues for the UNLV Dental School.

The school was budgeted for up to $3.2 million by the 1999 Legislature under a plan by Sen. Ray Rawson, R-Las Vegas, that was designed to create a self-supporting dental training operation. According to the fiscal report, only $387,903 was generated.

But regents were told most of that was because the actual dental practices designed to generate the revenue for the school didn't actually get going until this year. One started in January and the second in July, according to UNLV officials who predicted the bottom line would look much better by next year.