Nevada Supply Chain Analysis
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Financial Advisory Gaming & Hospitality Public Policy Research Real Estate Advisory [Year] Regional & Urban Economics NEVADA COVID-19 COORDINATED ECONOMIC RESPONSE PLAN: SUPPLY CHAIN ANALYSIS PREPARED FOR THE: & DECEMBER 2020 Prepared By: & 7219 West Sahara Avenue Spatial Economic Concepts Suite 110-A Las Vegas, NV 89117 Main 702-967-3188 www.rcgecon.com December 31, 2020 Mr. Michael Brown Executive Director Governor’s Office of Economic Development State of Nevada 808 W. Nye Lane Carson City, Nevada 89703 Re: Nevada COVID-19 Coordinated Economic Response Plan: Supply Chain Analysis (“Study/Report”) Dear Mr. Brown: The Consulting Team (“CT’) of RCG Economics LLC (“RCG”) and Spatial Economic Concepts (“SEC”) is pleased to submit the referenced study to the Governor’s Office of Economic Development (“GOED”) and the Nevada State Treasurer’s Office (“STO”) relative to the Nevada COVID-19 Coordinated Economic Response Plan by the State of Nevada (“the State or Nevada”) for an analysis of Nevada’s supply chain and last-mile delivery services in the aftermath of the COVID-19 pandemic. According to GOED: “The COVID-19 pandemic has resulted in a number of adverse effects on the State of Nevada’s economy, as the State has been faced with disruptions to existing supply chain infrastructure. The strain placed on the supply chain throughout the public health emergency has resulted in significant delays for the delivery of essential products and lifesaving prescription medications for Nevada residents.” This Study focuses on the steps that Nevada can take to improve its supply chain infrastructure to adequately respond to the COVID-19 pandemic and contains the following elements. A portion of this Study is focused on existing rail lines and the possible extension to a Northern-Southern rail line Nevada Our Report is comprised of several tasks, including: 1. A discussion of Nevada’s existing supply chain network and the weaknesses that were highlighted by the COVID- 19 pandemic. 2. A review of best practices that other states and government entities are employing with regard to improved supply chain logistics and delivery services through the following. 3. A high-level “feasibility analysis” for developing the following infrastructure components in Nevada to address growing supply chain issues as a result of COVID-19. 4. An overview of the infrastructure components and financial resources needed prior to the development of improved rail transportation, last-mile delivery services, and other supply chain improvements. 5. A high-level analysis of how a Nevada State Infrastructure Bank could leverage federal funding alongside private investment for infrastructure improvements to support improved supply chain infrastructure and last-mile delivery services. Mr. Michael Brown December 31, 2020 Page 2 6. An overview of existing statutes to develop recommendations for possible changes that will allow for sustained growth, improvements, and efficiencies in Nevada’s supply chain network. Standard Assumptions This work scope was performed according to the “Standard Assumptions & Limiting Conditions” detailed in an attachment to this letter. Use & Nature of Report & Methodologies The distribution of the Study is limited to GOED and STO. If either entity intends to reproduce and distribute our Report, it must be reproduced in its entirety. All ideas, developments, computer models, methodologies, innovations, inventions and copyrightable work (hereinafter “Inventions and Works”), which the CT conceived and were used during the period of this Study, and which either (a) are within the scope of the CT’s businesses or investigations, or (b) are supported by the use of materials, facilities or information paid for or provided by the CT are the exclusive property of the CT. In this regard, the State agrees to credit the CT for its work. The results of the CT’s services under this engagement are the property of GOED and STO. Copies of all documents including writings and computer or machine-readable data, which describe or relate to the services performed pursuant to this consulting assignment, or the results thereof, are the property of the State will be provided upon request. However, the State will not provide the CT’s Inventions and Works to any third party or use the same for the benefit of any third party, except with the prior written consent of the CT. The Study is in the form of a narrative report along with any appropriate tables, graphs and maps. The CT is not responsible for statements or interpretations made by the State relating to the Study. If you have any questions, please do not hesitate to contact us at your convenience by phone at 702-967-3188 ext. 101 or by email at [email protected]. Regards, RCG Economics LLC Attachment Mr. Michael Brown December 31, 2020 Page 3 Exhibit Standard Assumptions & Limiting Conditions 1. The CT prepared this Study and summaries of significant assumptions from information provided by GOED, STO and other third parties regarding the Nevada supply chain. The CT does not express any guarantees that the projections presented herein will be realized, given the uncertainties of future events. 2. The Study and associated research involved assembling data for this Study by RCG from its internal databases and third-party sources. The CT’s work effort also involved performing certain other procedures with respect to this Study without expressing any other form of assurance about the assumptions underlying them. 3. This Study presents, to the best of our knowledge and belief, the State’s expected economic development planning strategies. This Study is also based on current and anticipated industry and economic conditions, reflecting those conditions expected to exist and the course of action expected to be taken by the State during its economic planning assuming the hypothetical assumptions developed during the course of this assignment. 4. GOED and the STO are responsible for representations about they’re strategic plans and expectations, and for disclosure of significant information that might affect the ultimate realization of the Study results. 5. This Study is based on historical and current third-party economic and economic development information. Therefore, the actual results achieved may vary from the results of the CT’s analysis. Thus, variations could be material and have an impact on the conclusions stated in this Study. Even if the hypothetical assumptions were to occur, there will usually be differences between the estimated and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. These could include major changes in industry and economic conditions; significant increases or decreases in interest rates and/or terms or availability of financing/funding; and/or major revisions in current state and/or federal tax laws or regulations. 6. The results of the research included in this Study apply only to the effective date of this Study. The success of Nevada’s economic development planning will be affected by many related and unrelated economic conditions within a local, regional, national and/or world context the CT assumes no liability for any unforeseen change in the economy, tax policies or the availability of project/program funding. Accordingly, the CT has no responsibility to update this Study for events and circumstances occurring after the date of this Study. 7. Information, estimates and opinions furnished to us and contained in this Study, or utilized in the formation of this Study was obtained from third party sources considered reliable and believed to be true and correct. However, no representation, liability or warranty for the accuracy of such items is assumed by or imposed on us, and are subject to corrections, errors, omissions and withdrawal without notice. 8. The working papers for this assignment will be retained in the the CT’s files and will be made available for your reference will make them available to support this Study as required. Those services will be performed for an additional professional fee. 9. The CT did not perform an audit, review or examination or any other attest function (as defined by the AICPA) regarding any of the third-party historical industry and economic benchmarks information used in its work on this matter. Therefore, the CT does not express any opinion or any other form of assurance with regard to the same, in the context of its work. NEVADA COVID-19 COORDINATED ECONOMIC RESPONSE PLAN: SUPPLY CHAIN ANALYSIS TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................................................................................................ I-1 II. NEVADA: THE CURRENT SITUATION ............................................................................................................................... II-1 A. The Historical Setting ............................................................................................................................................. II-1 B. Economic and Infrastructure Linkages ................................................................................................................ II-2 C. Digital Nomads ........................................................................................................................................................ II-7 III. SUPPLY CHAINS ..................................................................................................................................................................