Treasurer's office finds money for capital improvements

By restructuring and refinancing the state's bond debt, Treasurer Kate Marshall's office has come up with at least $85 million in bonding capacity - enough money to handle critical maintenance and capital improvement projects during the next budget cycle.

The Public Works Board was told two weeks ago that because of the recession and declining property values around the state, the state wouldn't have any money available for capital improvement projects.

Director of Administration Andrew Clinger told the Public Works Board that falling property values mean an estimated 19 percent drop in property tax collections next year followed by 3 percent more the following year. As a result, he said there won't be any new bond capacity for the state. In fact, Clinger said the state might not be able to issue new bonds until 2019.

Despite that warning, Public Works Manager Gus Nunez put together a list of $82.76 million in projects "we feel need to be done for code, life/safety or to keep the buildings in operation."

He told the Public Works Board he was hoping the treasurer's office could find a way to free up some bonding capacity because not doing those projects could not only expose the state to liability but cost much more money by not fixing things like roofs until they get much worse.

He apparently got his wish this week. A presentation prepared by Marshall's analysts estimates the refunding and restructuring efforts will provide about $35 million in debt capacity this fiscal year and between $25-$35 million in each of the following two years.

She said, however, the $85-$105 million total can't be used all at once because "we don't know what's going to happen next year."

"We might need it," she said.

Nunez said the bulk of the critical needs are for such things as replacement and repair of heating and air systems, roof repairs, leaky walls and foundations. In addition, there are several security projects at Nevada's prisons, the largest of which is expansion of core facilities at Southern Desert Correctional Center.

He said the prison designed to handle 750 inmates has been expanded to provide beds for 2,100. But the core including the dining hall, kitchen, laundry and other such central units hasn't been expanded. It would cost $10.9 million for that project.

SDCC also would get a new perimeter security fence for $3.8 million. The fence actually saves the state money, Nunez said, because it will eliminate the need to man the towers at the prison, saving $1 million a year.

Northern Nevada Correctional Center in Carson City needs a new HVAC system in its medical center.

The list approved by the board includes numerous other smaller projects that may now be able to move forward.

But the amount Marshall's analysts believe can be generated still is far less than the $427.9 million in state funding agencies and the university system requested in construction and maintenance work.