No money available for capital improvements

After being told Nevada will have no money available for capital improvement projects in 2011-2012, the Public Works Board on Wednesday told staff to cut their recommended list of projects to just those that are absolutely critical.

Director of Administration Andrew Clinger told the board that not only is there no general fund money available, projections say there will be no capacity for new state bonds until 2019.

The state's general fund revenue shortfall is expected to exceed $3 billion. Clinger said it's very unlikely there will be any money from the state treasury for construction projects.

The other source of revenue for Public Works projects is general obligation bonds. The state relies on 17 cents of the property tax revenue collected statewide to bond for construction of buildings and other capital projects.

But, according to a working group including experts from the budget office, legislative fiscal division, taxation, education and the treasurer's office, property tax revenue is expected to fall almost 19 percent next fiscal year and another 3 percent the year after that before flattening out. That is the result of a nearly 40 percent decline in property values from their peak in the fall of 2007.

Clinger told the board, "Based on projections, we do not have the ability to issue any new bonds anytime in the near future."

He said the good news is the state can make its current bond payments.

Public Works Manager Gus Nunez said he agrees with Clinger's gloomy assessment of the financial situation, but that some spending will be absolutely necessary.

"I don't think, in my opinion, the state can afford not to keep up its facilities," he said.

If basic maintenance and repairs aren't done, he told the board "the state would be facing a lot of emergencies and buildings shut down."

Agencies originally asked for a total of 204 projects this coming biennium totaling $427.9 million in state funds.

But the board ordered that list chopped back to just the most critical projects.

Nunez also said Public Works will need some added money to finish off work already in progress.

The top of the list includes $54.5 million in state funding for critical maintenance, fire and life safety projects plus $9.1 million in other money, followed by $15.4 million in work such as roof repairs.

Another $14.6 million is needed for mandatory Department of Corrections projects. The bulk of that money, $10.8 million, will expand the Southern Desert Correctional Center's core facilities including the kitchen/-dining area.