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ROBERT SIEGEL, HOST:

This month, schools across the nation are preparing for the new school year and looking for creative ways to supplement budgets. Well, here's an alternative to the more conventional bake sale - as Capital Public Radio's Ky Plaskon reports, one school district in Nevada is turning to liquor and prostitution.

KY PLASKON, BYLINE: The corner bar is inside historic Piper's Opera House, on a steep hillside in Virginia City, Nevada. Upstairs is a stage with lots of community events, including one thrown by a local brothel.

UNIDENTIFIED MAN: Welcome you to the third annual new year's on the Comstock. It is brought to you by Mustang Ranch

PLASKON: While this party is sponsored by the brothel, there is no prostitution on this night. But there is a new benefactor -

UNIDENTIFIED MAN: All the proceeds tonight going to the Virginia City School System. So it's a good cause.

PLASKON: That's right - the Mustang Ranch Brothel is raising money for the school district on school property. Recently the district bought Piper's Opera House and rents it to the bar and makes it available for events, including one by the brothel. It also uses the auditorium for student drama and music programs. Storey County School District Superintendent Robert Slaby says buying the opera house was a good deal for students. He could've built a new arts facility but instead, saved historic Piper's Opera House from bankruptcy, at less than half the cost of a new facility.

ROBERT SLABY: Kids can be on the same stage as some of the greatest actors of the turn-of-the-century were on - literally use the same furniture, the same dressing room as they did. And we just thought that was very unique.

PLASKON: Income from the bar, brothel and other events are helping maintain Piper’s and make $2 million worth of needed renovation

SLABY: The facility is what, 160 years old. It's falling apart and we have to spend money to keep it up.

PLASKON: Slaby says the venue is booked with events every weekend. Financial records provided by the district show the building is breaking even - the bar and events bring in $66,000 a year - that's compared to just $13,000 that it's allocating for building operation from Storey County government.

SLABY: If schools were adequately funded, we wouldn't have to do all these other things. It's the responsibility of government to serve the children. We have to have a better system of financing public education in our country. That's what we need to do.

CHRISTY MCGILL: It sounds crazy, right?

PLASKON: Christy McGill is executive director of the Healthy Communities Coalition of Lyon and Storey Counties.

MCGILL: I would hate for school districts to say hey, we're economically stressed -let's go open a bar you know, we have this extra building here.

PLASKON: She says she would like to see the bar leave but she also says the bar and brothel aren't contributing to underage drinking, and this economic activity is reality in this county.

MCGILL: Whether we like it or not, the brothels and the bars are a big part of rural Nevada economic development and you know, how do we explain that to our children? Well, it's not easy.

PLASKON: Nevada ranks 37th in the nation for per-student funding. In Virginia City, Nevada, that means when students graduate on the Piper's Opera House stage each spring, they can thank not only taxpayers, but a bar and brothel too. For NPR News, I'm Ky Plaskon in Virginia City, Nevada.

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