Nevada lawmakers approved funding to build two new academic buildings at Southern Nevada colleges, but they’re also raising questions about why the projects’ price tags effectively doubled from what was proposed last session — and why the state appears to have no real strategy for keeping building costs in line with projections.
The Assembly Ways and Means and Senate Finance Committees voted Tuesday evening to approve a $62 million education building at Nevada State College in Henderson and a $77 million health and sciences building at the College of Southern Nevada. Both projects derive a majority of their funding from the state, with $6 million each from other funds such as private gifts.
But when lawmakers voted in 2017 to approve planning funds for the projects, the estimate of the total construction cost was far lower. The education building was estimated to be $26 million and the health sciences building was expected to be $41 million.
“Fiscal staff would note that State Public Works does not appear to have a formal process in which costs are compared to the advanced planning costs or a formal process for how construction costs are controlled to deliver a construction project within the original planning costs,” Kristina Shea, the committee’s fiscal analyst, told lawmakers on Monday.
Members of the committee expressed frustration that the actual costs are so far off from the estimates.
“There’s a huge concern about Public Works’ ability to implement cost-containment measures on our projects,” Republican Sen. Ben Kieckhefer said in an interview. “I was ready to spike major projects in the [capital improvement program] just because the cost projections that came in this session were double what they brought to us last session.”
Lawmakers including Democratic Sen. Chris Brooks questioned whether cost hikes are being wrongly attributed to “inflation” when they are actually changes in fundamental design and upgrades to the building. The Legislature budgeted for 10 percent construction inflation in Southern Nevada (each year), although even that doesn’t account for why both academic buildings grew about 100 percent in price in two to three years.
In the end, despite extended discussion about the escalating costs, the projects were both approved. Democratic committee Chairwomen Joyce Woodhouse and Maggie Carlton had emphasized the importance of both projects to ramping up the state’s teacher and nurse workforce.
“I think we just agreed that [they were] really important projects for workforce development in two areas of critical need and will support the continued growth of those institutions,” Kieckhefer said.
Patty Charlton, vice president of the College of Southern Nevada’s Henderson campus, said she was thrilled that lawmakers gave the go-ahead to a 73,000-square-foot planned new health sciences building, which has been years in the making. It will help the school add some 2,500 slots for students studying in nursing, phlebotomy and other science fields, with an estimated opening date of fall 2021.
Charlton said there were no significant design changes to the building’s design since the previous estimate last session. She chalked much of the increase to “current environment that we’re experiencing right now,” including the ongoing construction of the Raiders stadium and the Resorts World casino that are taking up construction labor.
“We’ve not had three two billion-dollar projects running in Southern Nevada in the entire 38 years that I’ve been here,” she said. “It’s a wonderful, exciting time, but it does present some challenges.”
The Nevada State College education building is set to include classrooms and faculty offices. Fiscal analysts attributed the cost hike for that building to a need to rebuild a parking lot, soil conditions, water pressure issues and the costs of complying with the City of Henderson’s planning requirements. The project scope was expanded to include a speech pathology clinic and an operational preschool that will be able to serve 60 children at any given time.
President Bart Patterson said that the original estimates were based on the costs of completing two academic buildings on the campus that started in 2013 and totaled $47 million. He said there was nothing extravagant about the education building.
“Obviously we had no intention of trying to increase the costs,” he said. “I don’t have a good answer for what you could do at the front end” to contain the costs.
Brooks, however, said with “some of the unknowns should have been known” about the project.
The college, which is the second-fastest-growing baccalaureate institution in the entire country, is celebrating that the building endeavor is going forward.
“The subcommittee’s unanimous approval yesterday strongly affirmed Nevada’s commitment to producing more homegrown teachers that are here to stay," the college said in a statement on Tuesday. "The new building for our School of Education will help us address current capacity issues as a result of unprecedented growth at the College, build-out new programs such as data sciences and early childhood education as well as dramatically increase the number of licensure-ready graduates over the next decade to meet the demands of the state.”
Brooks and other legislators are seeking quarterly updates from the State Public Works Board, which manages major state construction projects, in hopes of understanding what’s driving cost hikes on building projects. In the meantime, the budget committees decided to forego planning expenditures for a public safety building and a new building at the Grant Sawyer state office complex in Las Vegas, which would have marked a significant commitment to going through with those projects worth tens of millions of dollars.
“We can have a deeper conversation with the State Public Works Board about what their cost containment strategies are, what their estimating practices are, so we can quit being wrong,” Brooks said. “There’s a tremendous amount of money that’s dedicated to planning, pre-planning of a building, and I think I personally really want to have a good understanding that we know what it’s eventually going to cost before we spend the initial monies to plan for it.”
Updated at 8:40 a.m. on May 22, 2019 to add comment from Nevada State College.