Is Las Vegas getting short shrift on capital projects?

Gov. Brian Sandoval’s proposed budget calls for more than $345 million in new infrastructure spending, a record sum and one that has some grumbling about spending priorities.

Most of the money will go toward “deferred maintenance” — leaky roofs, air conditioning replacement and other upgrades to state-owned buildings throughout Nevada.

But it also includes a handful of major new construction projects, including a Northern Nevada veteran’s nursing home, a National Guard readiness center in North Las Vegas, and an 87,000-square-foot engineering building at the University of Nevada, Reno (UNR) with an $83 million price tag.

That new engineering building project (the university and state plan to split the cost) has raised some eyebrows among Southern Nevada legislators, who listed a $41 million community college health sciences building in Henderson as one of their top legislative priorities.

The bulk of proposed infrastructure spending is in Northern Nevada, but that’s because there are more state-owned buildings there than in Las Vegas. More than $237 million of the proposed spending is going to projects in Reno, Carson City and other sparsely-populated rural areas of the state, with $76 million dedicated to projects in the Las Vegas area, where nearly three-fourths of the population lives.

Jockeying over spending priorities is typical of the budget process, and the governor’s recommended budget isn’t set in stone. While state officials say that fulfilling every agency’s wish list is unrealistic (state agencies initially requested about $1.2 billion in new projects), several legislative leaders and lobbyists are planning to push for the building’s inclusion.

Priorities

Like other state agencies, the Nevada System of Higher Education submits its wish list of construction projects as part of the state’s routine two-year budget cycle.

So why was a project at UNR —Sandoval’s alma mater — given priority over projects proposed by Southern Nevada community colleges?

The expanded engineering school was actually second on the priority list — funding for $2.8 million in furniture and other indoor fixtures at the new UNLV Hotel College (the state and school plan to split the cost) was first. Behind the engineering school were an education building at Nevada State College (estimated cost of $28.9 million) and a health sciences building at the College of Southern Nevada’s Henderson campus (estimated to cost $41 million, including $4.3 million for planning).

Nevada’s higher education chancellor is in charge of developing the list of spending priorities, and is then approved by the democratically elected Board of Regents before being submitted to the state public works division and governor.

Former Chancellor and UNR graduate Dan Klaich (who resigned last year after a Las Vegas Review-Journal investigation found that he possibly misled lawmakers who were revamping the higher education funding formula) wrote in memorandums to the board that the governor and Legislature looked most closely at two factors: space shortages at higher education facilities and their development progress.

“With limited capital funds available a strong preference was expressed for shovel ready projects that created jobs immediately rather than planning projects,” he wrote in an April message to the regents.

“Based on the criteria above, I believe the UNR Engineering Building stands out,” he added.

Not all the regents agreed. Four of them voted against the recommended list, including Regent Trevor Hayes, who represents a Las Vegas-area district and said the state should first focus on addressing existing teacher and health care worker shortages.

“I didn’t disagree that there was a good need for an engineering school,” he said. “To me that seemed like for future growth, and that would serve new companies coming to the state and I figured we had an obligation to first serve those people who already live here.”

NSHE’s recommendations didn’t match up with the priorities of the Southern Nevada Forum — a bipartisan group of Las Vegas lawmakers and business interests that meet before the legislative session to identify broadly supported policies. The group recommended the health sciences building at the College of Southern Nevada as one of its “workforce development” priorities.

Ultimately, all recommendations are just that — recommendations. The governor has the final say, but Sandoval’s chief of staff Mike Willden said state agency priorities get deference.

“The university system doesn’t get all the dollars,” he said. “We have to spread it around to multiple agencies. That was the governor’s priority, to have that engineering building, and the Board of Regents’ priority, too.”

University of Nevada Reno president Marc Johnson called the project a “must-do” for the university, and said about $21 million in donations have been lined up to fund the building. The school will fund the other half of its $41.5 million share by reallocating student fees that fund construction at the school.

Johnson brushed away notions of a regional bias, saying that a large percentage of the school’s engineering students came from Clark County and that many return there after graduation.

“There always a North-South skirmish, but I hope that there is a majority in the Legislature that looks at the overall development of the Nevada System of Higher Education serving the whole state,” he said. “We serve so many Clark County students up here that I think it would serve the interest of entire state to develop northern universities, northern community colleges just like they do southern universities and southern community colleges.”

Southern response

Still, southern legislators plan to make Las Vegas community college construction a priority. Democratic Senate Majority Leader Aaron Ford raised the topic Wednesday during a budget hearing, questioning higher education officials as to why they didn’t include it higher on their priority list.

“I mentioned it today not for the fun of it,” he said in an interview on Wednesday. “I mentioned it because it’s an important topic and we intend to get it addressed.”

Las Vegas Metro Chamber of Commerce lobbyist Paul Moradkhan said his group was generally happy with how much the proposed budget spent on higher education, but still planned to have conversations with lawmakers about supporting other construction funding.

“We’ll definitely have conversations with folks, but also really for us it’s also focusing on workforce alignment,” he said.

Lawmakers have authority to fiddle with the proposed budget, and Willden said it’s possible that the state could have enough bonding capacity left over, especially if other projects aren’t approved, to cover planning costs for additional projects.

“It may be easy to find $5 million in that overall budget,” he said. “Five million out of $345 million dollars is a fraction.”

Feast after famine

The State Public Works Division, which gives recommendations to the governor based on priorities submitted by each state agency, prioritizes infrastructure spending first by legal requirements (like ADA compliance), then by maintenance needs and continuation of past spending projects. New construction comes in last.

Sandoval, elected in the immediate aftermath of the Great Recession, didn’t have a lot of construction money to work with during most of his two terms in office. Total spending on capital improvements went from a low of $53 million in the 2011 session to $215 million in the last two-year budget cycle.

Deferred maintenance makes up 68 of the 92 proposed projects, which is roughly $117 million of the proposed infrastructure spending.

John Barrowman, deputy director of support services at the Nevada Department of Corrections, said much of the maintenance spending was backlogged over the past several budget cycles.

“A lot of this is avoidance,” he said. “This maintenance is being done before the catastrophe happens.”

Of the 11 proposed new construction projects, four are in Carson City, three are in the Las Vegas area, three are in the Reno area and one is at a state correctional facility at Indian Springs in Southern Nevada. They include:

  • Two separate projects at the historic Stewart Indian School in Carson City. The proposed budget calls for $4.6 million to finish construction of a welcome and cultural center at the school and $1.2 million for a roof replacement and stabilization of the campus’s historic gym. Preservation of the school, which operated from the 1890 to 1980, has been a priority for Sandoval, and the state’s Indian Commission has applied for it to become a National Historic Landmark.
  • $36 million to finish construction of a Northern Nevada Veteran’s Home in Sparks. State officials say the facility could be opened by the time Sandoval leaves office, and that construction expenses will eventually be reimbursed by the federal government.
  • Several major renovations at Nevada Department of Corrections facilities, including $11.2 million to make the Northern Nevada Correctional Center in Carson City ADA compliant. Other proposed expenditures includes $6.6 million for systems and renovations at the Southern Desert Correctional Center facility in Indian Springs.
  • A $42 million new Department of Motor Vehicles building in south Reno. Washoe County has doubled in population since the area’s only full-service DMV facility opened in 1979, and state DMV officials testified last week that more than 1,500 parking citations have been issued and hundreds of customer cars have been towed due to overcrowding.

Willden said the glut of northern construction projects was a factor of pressing needs outside of the Las Vegas area, but that the state wasn’t hanging its main population center out to dry.

“We always hear the bias, but I don’t really think there is a bias,” he said. “I think we evaluate where the need is and then go that direction. And most of the time, in my history, the lead place is typically the south.”

Democratic Assemblywoman Irene Bustamante Adams, who represents a Las Vegas-area district, said she hadn’t noticed any regional bias but that her “antennas are up” to keep a close eye on spending priorities.

“I have to watch and make sure because on paper it kind of looks like it balances it out — the justification that this is how much we gave to the (UNLV) medical school so that’s why we’re justifying giving this amount to engineering,” she said. “But if you add things up proportionally, it may skew one way versus another.”

Photo courtesy Ken Lund on Flickr