State might not have emergency fund, official says

CARSON CITY -- Heaven help the state employees in an office where the furnace goes out next winter.

As of now, there is no money set aside in Gov. Brian Sandoval's proposed two-year budget for emergencies, state Public Works Manager Gus Nunez said Tuesday.

"If you have a boiler or a chiller that fails, or a heating, ventilation or air-conditioning system failure, you have to address it, or shut down the building," Nunez said after a meeting of the Legislature's Interim Budget Subcommittee.

Because the state's ability to bond to get money for building projects has dropped with declining property values, Nunez's agency is scheduled to have only $28 million in additional money to spend over the next two years on state building and renovation projects. Most of that money will go to replace roofs on older buildings, install new locks on prison cells and other repairs to buildings.

But there is no money at this point for emergencies that tend to crop up at the most inopportune times.

Nunez said he hopes the Legislature will put money into a rainy day fund or some other special project fund to deal with emergencies such as broken furnaces and clogged sewer lines.

He said he does not expect his agency will receive much money in coming years to build state offices, university facilities or other buildings or to deal with emergencies.

That's because state law limits the amount of bond revenue the state can secure for building projects to 2 percent of the total assessed value of the state.

Private values have declined so much that there no longer is any excess bonding capacity that the state can tap. Analysts project only 1 percent annual growth in property values over the next eight years.

Nunez told the committee that $374 million is now needed to handle repairs and renovations to existing buildings.

"It isn't that this is not important," said Senate Majority Leader Steven Horsford, D-Las Vegas. "We just don't have a lot of money to talk about (using for building projects)."

The Public Works staff has been reduced from a peak of 81 workers before the recession to 34 today, Nunez said.

He said his agency used to contract for private workers to do some of its work, but now all work is performed in-house.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.