Officials hope $75 million will leverage much more for ‘public purpose’ projects
(Ronda Churchill/Nevada Current)
The elusive idea of “Infrastructure Week” circulated by the Trump Administration promising a trillion-dollars to fix the nation’s deteriorating and neglected roads, bridges and airports never quite materialized.
Nevada’s “Infrastructure Week,” which kicked off in mid-August with the launch of the State Infrastructure Bank, though substantially smaller in scope, seems to be actually taking shape.
In an interview last week, Nevada Treasurer Zach Conine said a federal infusion of money from the American Rescue Plan Act, which could be further boosted if the federal bipartisan infrastructure bill passes, means the state bank could start approving projects later this year that would address long-overlooked infrastructure problems.
Although the initial and broad idea for the bank was created in 2017, it wasn’t funded. Lawmakers earlier this year seeded it with $75 million, enabling it to eventually provide loans and state assistance to statewide projects, from repairing roads to creating affordable housing.
“When it was first created, the State Infrastructure Bank was really a transportation vehicle,” Conine said. “Originally it was created because we were all waiting for infrastructure week, which never quite showed up.”
Both Gov. Steve Sisolak and Conine have promoted the expansion of the infrastructure bank as a way to produce projects that ultimately create jobs.
Sisolak told lawmakers he anticipated the bank could lead to 16,000 construction jobs being created by the end of 2023, but didn’t elaborate on where those projections came from.
During the legislative session, Sisolak projected the bank could launch up to $200 million in new infrastructure investment by the end of the year.
But the bank, which held its first meeting Aug. 16, is just getting started.
The bank’s board, which Conine is part of, is conducting a national search from an executive director while also establishing bylaws and determining the rubric for how projects will be vetted, loan terms and other details.
Conine called it a bit of a chicken and egg situation.
“We need to bring in an executive director but at the same time we need to create the bylaws and rubric for determining which projects and how projects will be compared to each other,” he said.
The legislation authorizing the bank doesn’t specify when details need to be finalized. Nor does the law provide a timetable for approving projects.
When it’s up and running, the bank will be able to loan money to projects “and use the state’s ability to borrow money very cheaply and leverage other sorts of capital,” Conine said.
“It loans money to projects, which then pays them back,” he said. “Because it’s a state bank, it’s for public purpose, it doesn’t have the same profit incentives that a regular bank will have. It allows us to loan money more cheaply. It also allows us to figure out the best possible way to finance a project.”
The bank could also leverage capital and attract outside investment.
The U.S. House is scheduled to take up the $1.1 trillion bipartisan infrastructure package, which makes investments in roads, bridges, broadband and water treatment and other traditional “hard” infrastructure, sometime before Oct. 1. It could bring an estimated $4 billion in funding to Nevada.
Senate Democrats also proposed a $3.9 trillion budget resolution package, which the House intends to pass in tandem with the infrastructure bill, that could provide additional state funding for multiple purposes, including affordable housing projects and mental health services.
When federal funds have previously been allotted to Nevada, Conine said the state often ran into an issue of how to use those funds. The bank could help coordinate the allocation of federal dollars more quickly and effectively.
“What has happened historically in Nevada is that our federal delegation does a great job of bringing home the revenue, the bacon comes home, and when it gets here we don’t have a plan because we haven’t invested in those planning services,” he said.
The bank won’t be restricted to selected projects focused on traditional infrastructure.
Lawmakers made revisions to the infrastructure bank during the 2021 session to include “social infrastructure,” meaning proposals could now include projects and programs addressing affordable housing and homelessness, food insecurity, public education and health care.
In mid-August, Sisolak toured an affordable housing project, health center and a geothermal energy plant to get a better sense of the types of projects that could be funded.
Conine said the Nevada Recovers Listening Tour, which kicked off Aug. 3, is designed to garner community input on how the state should spend the $6.7 billion in total recovery funds provided by ARP.
“I think the definition of infrastructure has broadened and we wanted to make sure we included things like broadband and affordable housing,” Conine said. “We wanted to make sure that the bank could be there as a tool in order to get things done that Nevadans needed, and that we weren’t constrained by some sort of statutory language that would keep us doing one project but not the other.”
He added there is a list of numerous capital projects submitted by municipalities throughout the state focusing on water treatment, road expansions and affordable housing projects that could be considered.
Those ideas still need to be vetted and approved, which likely won’t happen until the fall.
“We have already had projects come in through the governor’s request for projects to be accelerated,” Conine said. “We will go back to those agencies once the bank sets up that rubric, because we will want to get into a standardized rubric so we can try to compare apples to apples.”
A rubric hasn’t been established yet, but Conine said the idea is to allow for some flexibility when determining projects.
“(Are you) going to build projects in Nevada and focus on union labor, prevailing wage, et cetera?” Conine said. “You’re going to build projects that help Nevada. Part of the rubric is determining how many Nevadans does this project help in the short term and the long term. How many jobs does it create and what else does it help to open up? Does it fit within the larger process of building the Nevada we deserve?”
The bank’s loan procedures, he added, might also take into consideration projects that “deal with systemic underinvestment.”
Other considerations would include if there are matching grants or federal dollars that could accompany the proposal.
“Through the infrastructure bill, let’s say there is something that says, ‘hey, spend a dollar of state money to get $10 to build X, Y, Z,’ we’re going to look hard at building X, Y, Z,” Conine said. “If there is a match out there or some other program that these dollars could leverage into, those will be prioritized for projects where there aren’t additional dollars. We are trying to make our money go as far as possible.”
Conine anticipates the first proposals to be approved will focus more on more well-established projects before looking at ideas that touch more nuanced and complicated fixes around housing, food security and health care.
As the bank’s borrowers begin to pay back loans, Conine said the bank will be “able to spread our wings a little bit and look for other ways to help.”
“At the beginning, the first work of the infrastructure bank is going to be to identify programs and investments that would get paid back and make sure we don’t create a $75 million one-shot loan program,” he said. “I think in the beginning, we will cut our teeth on projects that are easily understandable, where the revenue stream is very, very clear, and risk-averse projects.”
Even if the bipartisan infrastructure bill or the Democrats’ budget resolution package fail to pass Congress, Conine said the state can look at other places such as trying to leverage private dollars and other federal grants.
“And for some reasons even those don’t happen, we still have $75 million we can go help people with,” he said. “The scale of the work, like any other bank, changes based on the amount of capital available. But the work and the importance of the work, that doesn’t get less important.”
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