Posts Tagged ‘public works’

Budget Constraints Cut Into Public Works Projects

By Anne Knowles | 7:07 am August 31st, 2011

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.

Minorities And Women Could Gain Bidder Preference In Assembly Bill

By Andrew Doughman | 5:48 pm March 25th, 2011

CARSON CITY – A proposal in the state Assembly would give minority-owned or women-owned businesses a five percent bidder preference for state public works projects under $100,000

Assemblywoman Dina Neal, D-North Las Vegas, advanced the bill in a Assembly Government Affairs hearing today.

Her bill, with amendments, would allow businesses that qualify under federal standards as a “small, disadvantaged business enterprise” would get the bidder preference.

Like the preference currently available for disabled veterans who own businesses, a 5 percent bidder preference would artificially make a bid lower by 5 percent, thus making the bid more competitive.

Neal cited 2002 ownerships statistics from Nevada that show few minority or women business owners in the construction industry.

Minorities and women comprise large numbers of the population, but their numbers are not reflected in the number of business owners in Nevada.

“We at least want to provide the opportunity for groups that may be able to bond collaboratively together to start to become part of public works in a real way,” Neal said. “…There may be a need at this point to level the playing field so they may equally participate.”

Nevada Assemblywoman Dina Neal, D-North Las Vegas, talks with lobbyist Jack Mallory during a hearing at the Legislature. Photo by Cathleen Allison/NevadaPhotoSource.com

Others, however, took issue with changing the bidding procedure to favor disadvantaged businesses, many of which are owned by women and minorities.

“I always thought you did a job based on the ability of the individual,” said Assemblyman John Ellison, R-Elko. “Nobody should take a precedent over anybody else.”

Ellison said that this bill would put others at a disadvantage.

“Maybe it’s a little simplistic, but we’d just like to be in an environment where it is a meritocracy,” said Assemblyman Ed Goedhart, R-Amargosa Valley.

Neal, however, disagreed. She said that a meritocracy is theoretically ideal, but it is not what Nevada has now. She said her bill would level the playing field for small, disadvantaged businesses.

“There’s nothing in this bill that compromises the quality of the contractor here,” said Assemblywoman Teresa Benitez-Thompson, D-Reno.

The committee did not vote on the bill today.

***UPDATE 3/26/11: A mention of the  $100,000 cap for the bidder preference was left out of the original version and has been added.

 

Some Say Democrats’ Jobs Bill “Not A Jobs Bill”

By Andrew Doughman | 10:17 am March 7th, 2011

RENO – When the bottom fell out of the construction industry, some lucky ones kept working.

CC Myers, a California company, has benefited from a portion of a $393 million contract to extend Interstate 580 between Reno and Carson City. They are building the 120-foot-tall bridge spanning Galena Creek.

Work there has continued apace as vehicles zooming through the valley below have increasingly carried unemployed Nevadans.

So while Nevada continues to have the nation’s highest unemployment rate, Nevada taxpayers are paying a California company to build a bridge in Nevada.

Assemblywoman Debbie Smith, D-Sparks, wants to change that. She has introduced a bill that Democrats have labeled “Nevada Jobs First,” a jobs bill Democrats wanted to roll out within the first 30 days of the legislative session to prove they were no-nonsense about putting Nevadans back to work.

The bill would make companies bidding on state construction contracts employ at least 50 percent Nevadans and use vehicles and materials from Nevada, ostensibly bolstering the numbers of Nevadans in the ranks at construction sites.

But while CC Myers may be a Californian company, that does not mean they are employing Californians.

The company contends that more than 80 percent of the workers building the Galena Creek bridge are Nevadan.

CC Myers is not the only company employing Nevadans in numbers well above the threshold Smith’s bill sets.

Sundt Construction of Arizona is in the finals months of constructing a $30 million health sciences building at the University of Nevada, Reno

Tim Krump, the project’s manager, said 86 percent of the subcontracted firms working at the construction site are Nevadan and 100 percent of the vehicles used at the site are registered in-state.

The work site at UNR abounds with logos. A Sparks electric company has a trailer just beyond a fence erected by a Minden company. An Incline Glass machine sits idle next to a dumpster from a Sparks company. Even the portable toilets next to the Sundt offices are emblazoned with the logo of a Reno company.

Great numbers of out-of-state companies do not seem to be snatching Nevadan’s taxpayer dollars through state-funded public works projects.

The Nevada Department of Transportation, a major source of the state’s construction work, has awarded just a handful of contracts to out-of-state contractors within the past few years, said Scott Magruder, NDOT spokesman.

He said companies who bid low to secure a contract often have a low profit margin. They cannot afford to bring in many out-of-state workers.

“It is more cost-effective to use local laborers or professionals just because it can be very costly to mobilize equipment and personnel,” Magruder said.

Smith said that she has heard testimony from people who have driven by construction sites where all the vehicles bore license plates from other states.

But Gus Nunez at the Nevada State Public Works board also said that very few projects now go to out-of-state contractors.

He said more out-of-state workers may have come to Nevada during the boom days prior to 2007.

To create the housing bubble, developers had beckoned workers to come to Nevada to build, build, build.

But these days, more than 91,000 construction workers in Nevada are out of work.

At VanWoert Bigotti Architects, Brad VanWoert said he has had to reduce his workforce by 50 percent during the past two years.

His firm has done many public works projects in the past.

These days, the firm does see some competition from out of state. With the industry starving, anybody jumps at a fine-looking contract.

The low-bid environment, though, would force any out-of-state firm to hire Nevadans to save money, he said.

“This is not a big deal,” he said of Smith’s bill. “It’s a nice statement … it is not a jobs bill. For us to design for a job, there has to be a job.”

The problem is, there are not many jobs. Nunez said the state public works board is planing for less than $50 million in new construction projects during the next biennium. That’s down from $810 million during 2007 and $545 million this year.

The Nevada Department of Transportation had $594 million apportioned for construction during 2009, but that money was not all for new projects. The Interstate 580 expansion alone ate $100 million of that.

The federal stimulus is also winding down, and Congress seems to have no appetite for new spending.

“The real impact of the bill depends on public agencies to come up with projects to build,” Krump said.

The bill would affect the bidding process for projects going out to bid now. But that would also not immediately create construction jobs.

VanWoert said design firms would have to draw up the plans for projects before construction workers were employed.

Bill would provide funding for construction jobs

Another Smith bill would enable school districts to use money for construction that they normally keep in reserve to pay debt. She has said it would create jobs renovating schools and create a better learning environment for school children who all too often have to try to learn in old, decrepit classrooms.

But if the plan sounds familiar, that is because Gov. Brian Sandoval is also counting on the money in his budget. Sandoval would punch a hole in his own budget by signing Smith’s bill into law.

Smith’s bidding preference bill is stalled in the Senate. The bill has support from those who see a future benefit from the proposal if out-of-state workers ever swarm back to Nevada.

Krump also said that the bill would help solidify in statute what companies like his already do.

But for now, changing the rules for a bidding preference does not seem to be a way to create many jobs.

“There’s no work,” VanWoert said.

Senate Panel Hears Jobs Proposal, But Call For Tax Increases Faces Opposition

By Sean Whaley | 3:20 pm February 9th, 2011

CARSON CITY – Construction industry groups advocating for a tax increase to fund public works projects around the state to help put people back to work made their pitch to a legislative committee today, but the Building Jobs Coalition proposal faces opposition from Gov. Brian Sandoval.

More than 100 construction workers, some of whom have been looking for work for the past two years, marched around the Legislative Building before crowding into a hearing room to support the plan.

The coalition notes that over the past three years, the construction industry has lost 54,900 jobs in Las Vegas and 12,000 in the Reno-Sparks area.

Sen. Ruben Kihuen, D-Las Vegas, chairman of the Senate Select Committee on Economic Growth and Employment, said at the start of the hearing that creating jobs in Nevada is the No. 1 priority for the 2011 Legislature.

Steve Holloway, executive vice president of the Associated General Contractors of Las Vegas, told the panel the Legislature has the chance to address the underlying economic crisis or “simply exacerbate the problem by applying another short-term fix as was done in the two previous legislative sessions and as the newly elected governor proposed in his State of the State address.”

Holloway said Sandoval’s plan to use $425 million in excess school bond reserve funds to help fund school district operating budgets will conservatively result in the loss of 5,000 more private sector jobs.

But much of the Building Jobs Coalition plan, which calls in part for the creation of a Nevada Job Bonds Support Fund, a stable, dedicated revenue source for capital construction projects, is in conflict with Sandoval’s opposition to any call for new taxes or fees.

The coalition says one option lawmakers should consider for creating such a fund would be a tax increase, either a one-quarter of a cent sales tax, a ten cent property tax levy, or an “infrastructure” surcharge imposed on all licensed vehicles.

When the coalition first released its plan last month, the Sandoval Administration responded: “The governor supports the goal of job creation, but believes it is best accomplished by private sector growth. The strategy of spending public money we don’t have may yield short-term gains for some, but do long-term damage to the economy as a whole.

“Since this is the first we’ve heard of the proposals, we are reviewing them with interest. The governor’s top priority is building and fostering a business environment which creates new jobs without adding to the tax burden or spending money Nevada doesn’t have.”

Most Republican lawmakers are also opposed to any tax increases being considered this session, putting the jobs proposal on a rocky path to success.

Senate Majority Leader Steven Horsford, D-Las Vegas, has embraced the plan, saying it would build on a similar measure passed in the 2010 special session which lifted the sunset on a temporary sales tax increase that was passed by voters in 2002. The revenue projected as a result of the repeal was used to issue bonds to construct public works projects.

Horsford today noted that former Gov. Jim Gibbons, who also advocated against any tax increases in his term, supported the measure.

Horsford said SB5 generated $169 million for 20 infrastructure projects that have created 2,500 private sector construction jobs.

In his opening remarks at the start of the session Monday, Horsford said: “I call on this Legislature to make the Creating Nevada Jobs Initiative a top priority within the first 30 days of this session, and the governor should sign it so we can quickly put as many as 5,000 Nevadans back to work. It can be done.”

Two of the handful of lawmakers who voted against SB5 last year include Sandoval’s Chief of Staff Heidi Gansert, who was Assembly minority leader at the time, and Sen. Don Gustavson, R-Sparks, who was in the Assembly at the time. Gustavson is a member of the Senate select committee.

Some of the projects the coalition says are ready to build include a new county jail for Churchill County at a cost of $50 million, and flood control improvements on the Muddy River in Clark County at a cost of $40 million to $50 million.

The private sector construction industry in Nevada is not expected to recover anytime soon.

Jeremy Aguero, principal analyst with the Las Vegas firm Applied Analysis, told the panel there won’t be another major hotel-casino project built on the Las Vegas Strip for the next seven to 10 years.

Members of the coalition include the Associated Builders and Contractors, the Builders Association of Northern Nevada, Electrical Workers Local 401, the National Association of Minority Contractors and many others.

Audio clips:

Sen. Majority Leader Steven Horsford is urging the Legislature to pass a job creation package within 30 days:

020911Horsford3 :17 can be done.”

Horsford says the select committee is focusing on the critical issue of jobs:

020911Horsford2 :05 back to work.”

Horsford says the Jobs Coalition plan would build on a successful measure from 2010:

020911Horsford1 :24 hit industry, construction.”

Steve Holloway, executive vice president of the Associated General Contractors of Las Vegas, says the Legislature has the chance to address the underlying economic crisis or go for a short-term fix:

020911Holloway :17 the State address.”

Coalition Calls For Tax Hike To Fund Public Construction Projects To Create Jobs

By Sean Whaley | 5:46 pm January 20th, 2011

CARSON CITY – A coalition of construction industry groups today advocated for a tax increase to fund public works projects around the state to help put people back to work.

The Building Jobs Coalition presented its proposal, called the “Creating 100,000 Jobs” report, in press conferences in both Las Vegas and Reno.

The proposal will likely face significant challenges, however, with Gov. Brian Sandoval’s vow not to raise taxes, and from critics of Nevada’s prevailing wage law.

Described as a working draft, the coalition notes that the current economic downturn in Nevada has required the private sector to cut 179,400 jobs. The construction industry has cut its workforce by more than 50 percent.

The white paper offers five strategies to turn this around, the first being the creation of a Nevada Job Bonds Support Fund, a stable, dedicated revenue source for capital construction projects.

One option lawmakers should consider for creating such a fund would be a tax increase, either a one-quarter of a cent sales tax, a ten cent property tax levy, or an “infrastructure” surcharge imposed on all licensed vehicles, the coalition says.

Assuming $100 million in annual proceeds, this would increase bonding capacity to $1 billion over 20 years, enough to support 11,500 jobs and break ground on the hundreds of millions of dollars in state and local projects that have been on hold due to lack of funding but that are ready to build, the coalition says.

Pat Pusich, a Reno architect and the coalition’s co-chairman, said: “Without a comprehensive plan for exploiting its strengths and correcting its deficiencies, Nevada could find its position as an attractive place to live, work, invest and conduct business usurped as the nation’s economy heals.”

Senate Majority Leader Steven Horsford, D-Las Vegas, offered this statement on the proposal: “With nearly 15 percent of Nevadans looking for work, creating jobs is the top priority for everyone in our state. Any ideas to create jobs are welcome and needed. I’m thrilled that this collection of industry leaders has taken the initiative and I’ll be looking at their ideas closely.”

Sandoval on Wednesday reiterated his intent to veto any legislation that contains a tax increase, saying the Nevada business community cannot afford it.

Businesses are doing their fair share, and “they are doing whatever it takes to keep people employed,” he said. But talk of potential tax increases on the part of the Legislature is a concern in the business community, Sandoval said.

“They appreciate my position but there is a legislative session coming up,” he said. “So they are going to be watching very closely to see what the tax policy in this state is going to be.”

Specifically in response to the proposal, the Sandoval administration today said:

“The governor supports the goal of job creation, but believes it is best accomplished by private sector growth. The strategy of spending public money we don’t have may yield short-term gains for some, but do long-term damage to the economy as a whole.

“Since this is the first we’ve heard of the proposals, we are reviewing them with interest. The governor’s top priority is building and fostering a business environment which creates new jobs without adding to the tax burden or spending money Nevada doesn’t have.”

Sen. James Settelmeyer, R-Gardnerville, said the requirement that most public works jobs pay the prevailing wage is another concern with the proposal.

He cited a water quality project on the Carson River that Douglas County officials wanted to pursue with Question 1 bond funds approved by voters in 2002 for parks, water and wildfire needs. The project could have been done for $119,000, but because it exceeded the $100,000 threshold for capital projects, it fell under the prevailing wage law. The final estimated cost was $185,000 and there wasn’t enough money to do the project, Settelmeyer said.

The prevailing wage is set by an annual survey of both public and private construction projects. But with most of the projects in recent years being public works that must pay the prevailing wage, the surveys are skewed and labor rates are going up, he said.

“If we want to put people back to work, I’d rather put two guys back to work for $40 an hour each than give one guy $80 an hour, Settelmeyer said. “I’d rather help two families.”

It’s not right that prevailing wage rates are being pushed up each year while state workers are asked to take a pay cut, he said.

Settelmeyer, formerly a member of the Assembly, protested Nevada’s new prevailing wage rates along with several colleagues when they were announced last year by the Labor Commissioner, but the rates were allowed to take effect.

The Legislature, in a special session in February 2010 called to erase an $800 million shortfall, approved legislation removing a sunset on a voter-approved Clark County tax hike to use for bonding purposes for public works jobs.

The coalition says it is working with key lawmakers to pursue its proposals in the upcoming session.

Some of the projects the coalition says are ready to build include a new county jail for Churchill County at a cost of $50 million, and flood control improvements on the Muddy River in Clark County at a cost of $40 million to $50 million.

Members of the coalition include the Associated Builders and Contractors, the Builders Association of Northern Nevada, Electrical Workers Local 401, the National Association of Minority Contractors and many others.

Audio clips:

Gov. Brian Sandoval says the business community cannot afford a tax increase:

012011Sandoval1 :26 keep people employed.”

Sandoval says the business community is waiting to see what the Legislature does regarding taxes:

012011Sandoval2 :19 going to be.”

Sandoval says he will veto any budget with a tax increase:

012011Sandoval3 :06 will veto it.”