Budget Constraints Cut Into Public Works Projects

A legislative subcommittee decided yesterday to cut or delay several building and maintenance projects due to budget constraints. The Interim Finance Committee (IFC) today will vote whether to approve the recommendations made by the subcommittee.

A plan to retrofit part of High Desert State Prison in Indian Springs to create the Southern Regional Medical Facility was canceled, although Nevada Department of Corrections Director Greg Cox said he may request funding for the facility as well as a long-term care facility in the northern part of the state at the next legislative session.
“We can manage for now,” said Cox. “The long-term care facility would reduce overall medical costs, but we are managing our population quite well through our ‘True Grit’ program, which is a model for other states.”
Parking lots in the state’s capitol complex in Carson City as well as the Bradley Building and the Buildings and Grounds building in Las Vegas will be minimally maintained until they can be replaced because the pavement has deteriorated significantly.
“The idea right now is to make them last through minimal maintenance and come back for removal and replacement,” said Gus Nunez, administrator of the Public Works Division. “We could see those pavements last another five years.”
Nunez explained that pavement deteriorates more quickly as it ages, and the cost of maintaining it then skyrockets unless it is maintained regularly from the start.
“Three or four years ago it looked like we could go in and save it,” said Nunez. “We didn’t catch it in time. Unfortunately, by the time we looked at it and got it into the CIP (capital improvement projects) it was too late.”
Nunez said the lots can be kept safe through patching when needed until they are replaced. He also said that was the first time in his 10 years with the department that parking lots had decayed beyond repair.
The problem may recur, however, as the paving program was not funded when the department’s current budget was approved this legislative session.
“My concern is we try to save money and put off three projects one year and three projects the next and suddenly we have five projects that have to be done for safety reasons and we still don’t have the money,” said Assemblyman Tom Grady, R-Yerington, a member of the subcommittee. “I don’t want this to crash down on us all at once.”
Six completed projects came in more than $993,000 under budget and another eight projects have been bid a total of $11.8 million under their projected budgets. But most of those savings were in money not yet borrowed through bonding. And they came at the expense of contractors.
“We like good news,” said Assemblyman David Bobzien, D-Reno, the subcommittee chair. “But was it due to over-projecting or more favorable bids?”
Nunez said the state received 10 to 20 bids per project when as recently as 2007 only three to four contractors would bid a project.
“It dropped prices considerably,” he said.
But Nunez said the number of bidders per project is dropping again, a reflection of more contractors going out of business. This means a likely a return to costlier projects for the state.
“The price of materials and labor keep going up, so the only thing going down is the margins for these businesses,” said Nunez on the subject of contractors being forced to close their doors.
An earlier cancellation of a portion of one project, the installation of a panic alarm system at the Dini-Townsend Hospital in Sparks, allowed almost $84,000 to be transferred to other 2009 projects. That means all those projects, save one, will be fully funded before Nevada issues more bonds this fall.
The IFC will take up these measures and others tomorrow during a 9 a.m. meeting held in the Grant Sawyer building in Las Vegas and the Nevada Legislature in Carson City.