The Nevada Department of Transportation Board of Directors was told Monday it needs to plan for $143 million in budget cuts this biennium because of declining highway fund revenues caused by the pandemic.
Deputy NDOT Director Cole Mortensen said so far this fiscal year, the department has identified $28.5 million in administrative cuts and in projects that will be postponed because they aren’t ready to send out to bid this fiscal year.
He said staff is recommending another $44.3 million in cuts by putting off work on I-80 in Elko and the downtown Ely reconstruction project that is worth a total of $29.8 million in federal, state and local money.
That would increase total reductions for the remainder of this fiscal year — which ends June 30 — to $72.8 million.
Despite Gov. Steve Sisolak’s admonition that going against NDOT staff recommendations doesn’t work out well most of the time, a majority of the board voted to save the Ely project.
Lt. Gov. Kate Marshall made the motion to adopt Option 2, which will delay a list of nine projects that are primarily maintenance and preservation projects instead of putting off the Ely project. She said the downtown Ely project will solve a potential flooding issue in the historic mining town and is already “shovel ready.”
She was joined by board member Stephen Ascuaga who said not only is the Ely work ready to go, the project has substantial local and other financial support.
“I’d really like to salvage the Ely project if possible,” he said.
Sisolak said staff is concerned that putting off the projects in Option 2 will result in much greater costs down the road because of continued deterioration.
He also pointed out that Phase 1 of the Ely project won’t fix the potential flooding issue.
Marshall countered that they can’t get to Phase 2, which does deal with the drainage, until they do Phase 1.
Sisolak did, however, object to the construction and installation of three “Welcome to Ely” signs each costing $100,000 that are included in the Ely project.
“That’s a completely inappropriate expenditure at this time,” he said pointing to the budget cuts not only NDOT but the state as a whole must make because of the economic shutdown due to the coronavirus. “We’re going to be cutting education.”
Marshall agreed with him on that point and, in her motion, called for removal of those three signs from the bid, which will be formally awarded to Q&D Construction.
Member Virginia Valentine joined Sisolak saying she too believes the board should trust its technical staff.
But Controller Catherine Byrne joined Marshall and Ascuaga for a 3-2 majority.
Option 2, however, doesn’t save the department as much money as Option 1, cutting spending by a total of $63.4 million instead of $72.8 million. That includes $28.5 in projects already identified plus the $34.8 million those nine projects will cost.
In addition, the board approved plans to issue a total of $160 million in bonds the coming fiscal year. That includes $100 million in highway revenue bonds to be used statewide and $60 million in fuel revenue indexing bonds that can only be used where the money to pay them off is raised — Clark County.