Public Works: The Survivors Arena

As the economic recession continues to take its toll on the Silver State, it’s not exactly business as usual for public works in Nevada. Although individuals who plan and execute these public ventures are gamely trying to meet demand for services, they are finding themselves in a much more competitive environment that requires increased efficiency, but often with a paucity of revenues. As a result, planners and builders are learning to be more creative in how projects are staged, designed and bid. “We’re looking at things from every angle that we can,” explains Dan St. John, public works director for Washoe County. “Our revenue streams aren’t as predictable and they’re down.”

Shrinking revenues have caused a necessary swing from left to right when planning projects. “We were liberal in projecting revenues and now it’s more conservative,” explains Denis Cederburg, director of public works for Clark County. In addition, financial shortfalls have put a damper on anticipated outcomes. “We’re also adjusting our expectations,” St. John says. Planners and builders have come to realize they frequently don’t have the luxury of building an entire project at one time. “We see more projects that have been broken up into phases,” Cederburg says. And many needed public works projects have simply been put off or shelved indefinitely due to lack of funding.

Competitive Bidding

With private construction still severely stalled, public works projects are attracting record numbers of bidders. “The biggest change [since the recession] is where you may have seen three to five bidders, now you’ll see 12 to 14,” says Cam Walker, director of business development for McCarthy Building in Las Vegas. “It creates a more competitive environment. Some people may be too competitive just to keep the doors open. This also moves down into the sub contractors.” Even though most contractors have cut back and many others have gone under, those who are still bidding jobs are determined to hold onto their businesses. “These people know how to make a living. They’ve built up a group of people who have expertise. They’re going to try and keep going,” explains John Madole, executive director of the Association of General Contractors (AGC) in Reno.

Although the seemingly cutthroat bidding environment may have negative consequences for some bidders, the flip side is that it can result in savings for the entities that request the bids. “Architects and engineers are realizing what the economic environment is like,” Cam Walker says. A lot of work is being done for 65 to 70 cents on the dollar, according to some contractors. “There’s more competition and we’re able to do more with less,” says Cederburg. Even at that cost savings, however, some governmental entities are still not able to go to bid for their projects. “It’s too bad the government can’t take [more] advantage of it,” Madole says.

Despite the capricious nature of funding, work continues on public works projects all around the state. Although not as flamboyant as in the years of record growth, an eclectic variety of new buildings, infrastructure and renovations can be seen in many communities.

The scarcity of money for new construction has also put increased focus on the importance of maintenance and upgrades to existing facilities. “We still have to do the things that have to be done,” St. John explains. “We’re keeping the basics going.”

McCarran’s Terminal 3

At a cost of around $2.4 billion, the Terminal 3 (T3) project at McCarran International Airport is probably the most exciting superstar of public works projects in Southern Nevada. On track to open the middle of next year, the terminal will span nearly 1.9 million square feet over three stories while adding 14 gates along with ticket counters, baggage claim, parking, security checkpoints and retail outlets. Six of T3’s gates are designed to handle international flights with the capacity of processing as many as 2,000 travelers per hour and servicing up to five wide body jets simultaneously. In addition to facilitating the increase in foreign flights, T3 is designed to ease overall airport congestion by adding more passenger processing space and facilitating passenger movement to and from Concourse D via an underground tram.

Because of the scope and complexity of the project, T3 has been broken into six construction units which include the early civil package, the central utility plan, the parking garage, the apron improvement package, the roadways package and the T3 building package. Airlines that will call T3 home next year include Alaska, Jet Blue, Sun Country and Virgin America as well as all international carriers that service McCarran.

Although annual passenger numbers are down from a peak of 47 million in 2007 to a projected 42 million next year, the Clark County Department of Aviation (which owns and operates the airport) believes the expansion is needed to improve service and to accommodate future growth. “Customer service levels will be improved,” says department director Randall Walker. “From an international standpoint, we’re peaked out on capacity.” Because the department prides itself on long-range planning, the T3 project was already underway when the economy turned negative. “T3 has been in the master plan for 20 years. We plan a long time out,” he says.

Unlike many other public works projects, T3 is a completely self-financed construction project. “We’re self-sustaining and don’t take money from anywhere else,” Randall Walker says. Rather than looking to outside sources for revenue, such as tax dollars, the airport has a fairly dependable pot of money contributed by airlines, concessions and capital bonds.

Although T3 is the most talked about project at the airport, other capital improvements at the facility include new runway status lights, an overhaul of C Concourse, roof replacements at A and B Concourses, additional aircraft parking and a new air cargo center. “We have to maintain a high level of service in the whole airport,” Randall Walker explains. “The first and last look [for visitors] to Las Vegas is at McCarran and it needs to be a positive experience.”

Other Construction

Aside from completing the parking structure at T3, McCarthy Building is working on a $20-million renovation of Valley High School and a $30-million facelift at Clark High School along with the $49-million expansion of Clark County Water Reclamation District’s main facility on Flamingo Road. “It’s one of the most advanced waste water systems in Nevada,” Cam Walker says. However, due to lack of funding, work has been stalled on the Advanced Clinical Training and Research Center which will consolidate the University of Nevada Health Sciences System programs at the UNLV Shadow Lane Campus when it is eventually built.

Cederburg says that important construction on flood control continues on projects at the Flamingo Wash, Duck Creek Channel and along the Boulder Highway. In addition, Southern Nevada Water Authority continues work on the Lake Mead Intake No. 3 Connector Tunnel and Nevada Energy and Great Basin Transmission forge ahead on the One Nevada Transmission Line. Public works revenue has also been spent for recreation at Charlie Frias Park, the Laughlin Regional Heritage Greenway Trail Project and at Sunset Regional Park.

Northern Nevada Projects

Although Washoe County has planned public works needs of around $308 million over the next five years, St. John expresses frustration that not all of the funding is secure. Critical needs include additional court facilities and a new or renovated medical examiners building. The county was creative in delivering a new courtroom in existing space at 75 Court Street in downtown Reno this year, but has had to shelve plans for a new Sparks Justice Court facility. “The project had to come to a screeching halt,” St. John says. Other areas of concern include sewer and water treatment plants and flood control projects, according to Madole.

In an effort to maintain existing facilities and to operate more efficiently, Washoe County is conducting energy audits throughout the county. Inspectors are looking at mechanical systems and structures for ways to upgrade in order to realize energy savings. The main branch of the Washoe County Library system, for example, will be the benefactor of a $1.1-million renovation of its mechanical system. The county is also involved in five environmental improvement projects totaling $11.5 million at Incline Village, Lake Tahoe. The work, which includes storm water storage, shoulder treatments, erosion control and drainage upgrades, will be completed in 2015. “We’re a partner in making sure Tahoe remains blue,” St. John explains. The largest project currently in the bid process is for 12 miles of new public roads to be built in Spanish Springs using $12 million provided by a special assessment of property owners.

One of the most important ongoing facets of public works in any community is the need to maintain pavement. Although St. John says Washoe County needs around $7-8 million annually to continue the investment in basic work such as slurry seals and overlays, he says he is concerned that probably only half of that will be available in the immediate future. “We’re doing the best we can, but we’re losing ground. We’re digging ourselves a hole because buildings and roads don’t maintain themselves,” he says.

Nevada Department of Transportation (NDOT)

While most public works in Nevada have been forced to run lean and mean in the past couple of years, NDOT has managed to escape most of the carnage, at least for now. “So far NDOT hasn’t really had any major revenue shortfalls since a majority of highways funds come from gas taxes,” says Scott Magruder, public information officer for NDOT. “The only two major projects that are a priority, but currently unfunded in the state are the estimated $400-million Boulder City Bypass and the $100-million final phase of the Carson City Freeway.” He acknowledges, however, that gas tax revenues will be affected by people driving less and owning more fuel efficient cars. “NDOT is doing everything it can to cut costs without compromising safety or quality of highways. It has been a challenge, but one that every state’s department of transportation is experiencing during these tough economic times.”

It’s pretty much a given that public works projects are important to the quality of life in Nevada’s communities. What isn’t clear is how to continue funding the work as we move forward in uncertain economic times. Magruder says NDOT is exploring public/private partnerships that involve tolling and fees based upon vehicle miles traveled. Others have suggested raising developer fees and gas taxes.

The only factors we can be certain of is that the debate will go on as public works projects will continue to be needed and revenues will persist in falling short. Regardless of how they might be funded, however, Madole emphasizes the critical importance of these projects to the overall future of the Silver State. “The investment in public works expresses confidence in Nevada’s future and that we’ll deliver a good quality of life,” he says.