Legislative subcommittee approves $1.154 billion CIP package; debate centers on Hobart Dam and Las Vegas forensic facility location

The joint legislative subcommittee on K-12, higher education and the capital improvement program on Feb. 4 approved a package of 71 capital projects totaling $1,154,000,000 for the 2025'27 biennium with a mix of general obligation bonds, federal funds and general fund appropriations.

Julie Waller of the Legislative Counsel Bureau fiscal analysis division presented the subcommittee's closing recommendations, which proposed $760,700,000 in state general obligation bonds (including $1.7 million in reallocated bond proceeds), $201,700,000 in general fund appropriations, $167,400,000 in federal funds, $9,900,000 in highway fund appropriations and $6,700,000 in state GO bonds repaid by highway fund appropriations.

Notable projects the subcommittee recommended include:

- CIP 25C01: construction of a 300-bed, approximately 303,700-square-foot forensic psychiatric facility in Las Vegas to serve individuals awaiting adjudication and those needing competency restoration, recommended to be funded with $381,000,000 in state general obligation bonds.

- CIP 25C02: replacement buildings at Desert Regional Center in Las Vegas to support the new forensic facility and replace aging structures, $38,000,000 in state GO bonds.

- CIP 25C03: construction of a 128-bed single-occupancy skilled nursing facility for veterans in North Las Vegas, a 156,700-square-foot project with total funding of $223,200,000 (recommended split: $78,100,000 in state GO bonds and $145,100,000 in federal funds).

- CIP 25C26: purchase and improvements of five office buildings on or near the McCarran Complex in Las Vegas, $71,200,000 in state GO bonds.

- CIP 25C27: purchase of a 79,248-square-foot office building in Reno for state use. Based on a recent appraisal, the subcommittee recommended $20,200,000 for that purchase, a $4,000,000 reduction from the governor's recommendation.

Waller said the subcommittee recommended funding 20 construction projects ($833.2 million), nine planning projects ($20.6 million), 28 maintenance projects ($241.9 million) and 14 statewide projects ($57.9 million). The subcommittee also recommended that fiscal staff include standard language in the 2025 CIP bill to allow work program revisions for bond repayment costs without interim finance committee approval, consistent with prior biennia.

Hobart Dam debate

Members pressed state officials on CIP project C05, the Hobart Dam reconstruction. Chief innovation officer Jack Robb and project staff including Jack Crowell, Brian Walker and Will Lewis described a prioritization for dam work: Marlette Lake and an East Slope system are already under construction and the agencies warned that attempting all three projects simultaneously could disrupt water service in Story County and Carson City.

"Hobart does need to be rebuilt," Jack Robb said, adding the office recognizes the dam as a priority but asked to defer construction until the other two major projects are further along. Brian Walker, the project manager, said a construction schedule for Hobart would target major work in 2026 with likely bleed into early 2027 if funded now. Walker summarized the risk: "we wouldn't have brought the project ... to this committee ... if we didn't feel serious about it being a project that does need to happen. I do wanna kinda soften that a little bit. It's not ... an emergency situation for us." Staff noted they can implement temporary drawdowns or emergency siphons if safety required.

Several committee members, including the chair, expressed concern and urged that bonding authority be preserved so Hobart could proceed when ready. The committee discussed bonding timing and the fact that state bond issuances are scheduled to match project cash needs rather than being issued in a single lump sum.

State office purchase negotiation

Officials also described negotiations on the Reno office purchase (C27). Jack Robb said the state-funded appraisal came in at $20,000,000 and the seller planned to commission a second appraisal; he asked the committee to restore $2,000,000 of previously removed funds as negotiation wiggle room. The committee ultimately adopted an amendment to add $2,000,000 back to the office purchase authority.

DHHS facilities and maintenance

The committee reviewed MO2, a $22.5 million portfolio of Department of Health and Human Services facility maintenance subprojects (plumbing, HVAC, electrical and other deferred maintenance at several DHHS campuses). The subcommittee recommended removing $10,000,000 from the initial recommendation pending further long-range planning. Agency staff said the remaining funding would be prioritized to essential items to maintain licensing and operations while they explore long-term alternatives including potential nonprofit partnerships or property sales.

Public comment: Las Vegas forensic facility location

During public comment the committee heard multiple speakers from Las Vegas neighborhoods near the proposed forensic facility site oppose the project location and ask for additional studies. Matthew Womble said the project lacked "the same type of due diligence" that would be required for a large private development and called for traffic, environmental and neighborhood impact studies before funding. Other callers and in-person speakers raised similar concerns about proximity to schools, traffic, potential environmental issues (including reports of lead and asbestos), public safety and the scale of the project relative to the surrounding residential area.

Final action

A motion to adopt the subcommittee's closing report with amendments (including funding shifts in attachment F from general fund to bonding for certain long-life projects, the non-approval of a set of specific projects listed in the motion, specified reductions for two statewide items, and adding $2,000,000 back to C27) was made and seconded. After a brief clarification on reductions to S04 and S07, the motion carried unanimously.

The committee closed the meeting with instructions to fiscal staff to make any necessary technical adjustments and to present further detail as needed to the joint full committees.