Storey County’s Fiscal Year Starts Without Tesla
As we reported earlier, Storey County’s budget for Fiscal Year 2018-2019 was approved by County Commissioners McBride, Gilman, and McGuffey at a 1.7 million dollar deficit. It appears as if three years into Nevada Governor Sandoval and TRIC Executive Lance Gilman’s “Deal of the Century”, the luster is wearing thin. This could have had contributed to Jack McGuffey being voted out of a job on June 12th.
In spite of the amazing amount of money that Commissioner Gilman made when the Tesla executives bamboozled Governor Sandoval and the Nevada Legislature in 2015 with the passing of SB1, Storey County hasn’t fared as well. As we reported, Storey County revenues are lower today than they were in Fiscal Year 14-15 before Tesla’s circus act came to town. In our article, we document how Tesla is in a tremendous cash burn and is losing roughly $25,000 per car. Now that they are making 5000 Model 3s a week, that flames from that cash burn at TRIC can be seen all the way up here in Virginia City.
County Manager Pat Whitten tried all month to get a meeting set up with Tesla to renegotiate the Service Agreement that Tesla made with the county so we could afford the special fire truck and all the inspectors and County employees it takes to support the “Alien Dreadnaught”. But the Tesla employee Whitten was dealing with was one of the casualties of the 9% decimation that hit Tesla employees last month.
This Puts The County In A $1.7 Million Dollar Pinch. Thank You Musk and Gilman.
When we reported that the Storey County Budget would be $1.7 million in the red, County Commissioner Marshal McBride took to the local fish wrapper and called me a liar (for telling the truth, go figure). Now that the Tesla Services Agreement has expired, my sources tell me that the county will be forced to send an invoice to Tesla and hope they pay it in a timely fashion. Based on the tons and tons of information out there regarding the cash flow of the company, I’m guessing the invoice will get put behind the gazillions of other invoices from car part suppliers and payroll checks that need to cash this week.
Keep in mind, the Tesla Services agreement that just expired was for only $1.2 million dollars. Even if Tesla stepped up and renewed the agreement at the last minute, our budget would still be roughly half a million upside down.
Where Do We Go From Here?
So what happens next? Comptroller Gallagher said in the County Commissioner meeting last month without the money coming in from Tesla, “hard decisions will need to be made”. As in cuts in spending or county heads on the chopping block. In spite of this, Storey County continues to create position after position after position after position after position. These recent help wanted ads will add an estimated $325,000 to the already upside down budget.
The (cash) burning question must be asked? Will make up this difference? There can be only two ways; fire employees or raise taxes.
Which one do you see happening first?