Article Archive
Betting on the Future
Nevada fire academy weighs financial options
Volume 23, No. 6

Nevada Fire AcademyDenise Baclawski, executive director of the University of Nevada, Reno Fire Science Academy near Elko, NV, is short and direct when asked what message she most wants to convey to industrial responders about the well-publicized financial problems facing the academy.

"Don't give up on us because if you do, we will close," Baclawski told Industrial Fire World. "This is when we need our clients to show support through enrollments and bookings."

A decision on closing the academy in response to a state budget crisis has been postponed by university regents until December to allow more time for academy supporters to pursue possible funding partnerships with industry.

Regardless of that decision, Baclawski said University of Nevada, Reno president Dr. Milton Glick has committed to honoring all training contracts and to maintain open enrollment through June 2009.

"We appreciate the clients and the support we have received," Baclawski said. "Across the board we have received nothing but encouragement and understanding."

The debate over closure is the latest episode in the ongoing financial saga that has engulfed FSA since its move from Stead near Reno to the Elko area in 1999. A projected state budget shortfall approaching $1 billion has pushed funding issues for many state operations, including the academy, to critical mass.

"They are looking at every program and we're not holding our own," Baclawski said. "They can't afford for us to continue to lose money."

FSA presently owes $27.1 million in long term capital debt and $12 million in accumulated operating and construction deficits. An enrollment that has increased to more than 4,600 participants annually has yet to make a substantial dent in that amount.

"Any small business would be happy to grow at 20 percent a year as we have over the last six years," Baclawski said. "At some point, if you allowed it to continue, we would get there - it's just not really fast enough given the budget situation."

Glick and the Nevada System of Higher Education's board of regents have been reviewing the financial stability and future of the academy in the wake of a report by an advisory council chaired by former Nevada governor Kenny Guinn. That report recommended closure of the facility.

Closing the academy is not a bloodless option for the state. The cost of shutting the facility is estimated at $3.5 million.

"If you look at it from a purely financial perspective, it seems logical to close it," Baclawski said. "But the problem is there are very few training facilities like this in the world. We represent 35 to 40 percent of the industrial training capacity available today. If you take that off the market, there is going to be a problem."

In July, Baclawski began sharing the information about the council's recommendations with FSA clients.

"I didn't feel we could close without involving the various companies that we have been serving the last 36 years," she said. "Without exception, all of them said, 'You cannot close - there are only a few places where we can receive this required training.'"

FSA established a stakeholder working group, a combination of clients, representatives of various industries, local elected officials and others. That group requested that a final decision be delayed until December to allow time to draft a long term financial plan to make the academy economically stable.

"Nobody wants to prop up the academy forever," Baclawski said. "Everybody is willing to pitch in for a couple of years, but the plan has to push us over this hump and make us financially sustainable."

The working group has identified seven key elements that address the short-term debt concerns of the university while laying groundwork for future stability. These include current tuition rates, enrollment numbers, operating costs, capital improvement needs, collaborative agreements with other training institutions and federal, state and local funding.

Tuition cost for certain courses may increase to better recover the cost associated with them, Baclawski said. Also being discussed is an interim surcharge for corporate customers that would be phased out as the plan progresses.

"In the short run, they would be willing to give to the university to assist us with our short term financial problems," Baclawski said.

Resolving these issues is anything but a simple business decision, said Pat Peavler, an emergency response coordinator for ConocoPhillips and leader of the working group.

"The current situation of the FSA is not an overnight event," he said. "With that said, nor will the long range solution be instantaneous either. The task force has identified solutions that make an immediate and substantial impact in closing the gap toward sustainability as well as solutions which will require time for development and implementation."

Implementation of the plan has already begun. The Elko County Board of Commissioners approved a contribution of $25,000 per year for the next five years to support FSA. This approval comes on the heels of the Carlin City Council's recent pledge of $2,000 per year for the next five years, along with an agreement to evaluate ways to reduce FSA's monthly water bills.

Local businesses that supply services to the academy, such as hotel rooms and meals, have discounted their goods.

"The Elko Convention and Visitors Authority is assessing what they might be able to give," Baclawski said. "Our goal for that element is between $75,000 and $100,000 a year."

FSA and the Texas Engineering Extension Services' Emergency Services Training Institute in College Station, TX, share the limelight as the two most prominent industrial fire training schools in the U.S. Baclawski said she has been in talks with Les Bunte, ESTI director, regarding federal funding opportunities the facilities could share.

"We are assessing ideas about some joint cooperative programs," Baclawski said. "We are also looking at federal funding as an opportunity for both schools and maybe a couple of others to form some sort of consortium."

Aside from sustainability and offsetting any future operating losses, FSA needs to establish a capital improvement fund, she said.

"As you can imagine, when you're having financial problems you're not investing in the facility the way you should be," Baclawski said.

In Stead, former home of FSA, urban development restricted burning to eight months a year. The academy relocated to a new 426-acre facility in the Ruby Mountain region of northern Nevada. Unfortunately, the business plan covering that relocation was "extremely optimistic," Baclawski said.

"We had a tried-and-true annual enrollment of 2,200 people annually at Stead," she said. "Our new facility required 7,200 students to be sustainable. It was a classic 'If you build it, they will come' scenario and that didn't happen."

After only 18 months of operation, FSA closed when groundwater contamination was traced to the academy's inadequate wastewater treatment system. The academy did not reopen until 2002.

At present, FSA is operating on a shoestring, she said. Nine positions are currently unfilled. Priorities are safety and client-focused services.

The stakeholders' working group makes its final report to Glick on Oct. 27. A presentation based on that report will be made to the board of regents in early December.

"What we're looking for is a nod from the president and approval from the board to implement the plan," Baclawski said. "Then we're hoping that over three to five years this plan will take care of some interim financial needs and produce long term financial stability through partnerships, sponsorships and federal funding."


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