MINUTES OF MEETING

      ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS

 

      Sixty-seventh Session

      January 28, 1993

 

 

 

The Assembly Committee on Government Affairs was called to order by Chairman Val Z. Garner at 8:34 a.m., Thursday, January 28, 1993, in Room 330 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

COMMITTEE MEMBERS PRESENT:

 

      Mr. Val Z. Garner, Chairman

      Mr. Rick C. Bennett, Vice Chairman

      Mrs. Kathy M. Augustine

      Mr. Douglas A. Bache

      Mrs. Marcia de Braga

      Mrs. Vivian L. Freeman

      Mr. Lynn Hettrick

      Mrs. Erin Kenny

      Mrs. Joan A. Lambert

      Mr. James W. McGaughey

      Mr. Roy Neighbors

      Mrs. Gene W. Segerblom

      Mr. Wendell P. Williams

 

COMMITTEE MEMBERS ABSENT:

 

      None

 

GUEST LEGISLATORS PRESENT:

 

      Assemblyman Myrna Williams, District 10.

 

STAFF MEMBERS PRESENT:

 

      Ms. Dana Bennett

 

OTHERS PRESENT:

 

      Ande Engleman, Nevada Press Association; Sharon Murphy, Management Services Officer, Gaming Control Board: Mike Johaneson, Legislative Advocate, Service Employees International Union; Kathryn Greene, Director of Purchasing, Washoe County School District; John L. Balentine, Washoe County Purchasing; Andrew J. Urban, Jr. Assistant City Attorney, City of Henderson; Michell Bero, Program Assistant, Nevada Association of Counties; Nancy Howard, Administrative Assistant, Nevada League of Cities; John Sherman, Management Analyst, Washoe County.

 

ASSEMBLY BILL NO. 90 -  Restricts employment of certain former public officers and employees of executive branch of government.

 

Assemblyman Myrna Williams, District 10, explained AB 90 as a 1 year "cooling off" bill relating to public employment, providing regulators.  She said "cooling off" currently existed in the gaming industry, but it now was a question of making the matter public policy.  She then named all the states with similar legislation.  As there had been some problems with the bill, she suggested striking Section 1, subsection 3, subsection (b), as a means to correct them.  She added Section 1, subsection 3, subsection (c), clearly showed employees were not being addressed, and Section 2 took care of a grandfathering provision.  She then explained why grandfathering was necessary.

 

Ande Engleman, Nevada Press Association, supported AB 90, stating the concept was consistent with what was happening on the federal level.

 

Sharon Murphy, Management Services Officer, Gaming Control Board, spoke on behalf of Bill Bible, Chairman, Gaming Control Board who was attending a Gaming Commission meeting.  She supported AB 90 saying it was appropriate, good public policy, and a furtherance of public confidence and trust in its public agencies.  She mentioned the Gaming Control Board and Commission members were under a 1 year "cooling off" period and found the bill to be a furtherance of the same concept.  Ms. Murphy said deleting subsection 3, subsection (b), eliminated much of her testimony, stating why it had been a problem.  She also suggested the bill should be extended to include the Gaming Control Board's Division Chief, Deputy Chief and equivalent positions.

 

Mike Johaneson, Legislative Advocate, Service Employees International Union, supported the bill, particularly as amended.

 

Mrs. Lambert was unclear which specific employees in each agency would be covered and wanted to know if there was a way to delineate, by agency, which employees should be covered by this bill.

 

Mrs. Williams suggested talking to legal counsel for clarification of subsection (c), stating the intent was the person who was actually the regulator or involved in the regulating process.

 

 

The hearing on AB 90 was closed.  Chairman Garner asked Dana Bennett to meet with Mrs. Williams, legal counsel, or Kim Morgan to work out the details for the appropriate amendment.  Action on the bill was delayed until then.

 

ASSEMBLY BILL NO. 9 -   Revises provisions governing local governmental purchasing of commonly used items and perishable commodities.

 

Kathryn Greene, Director of Purchasing, Washoe County School District, representing the Northern Nevada Consortium for Public Purchasing, explained the purpose of the bill was to clarify language, specifically to define aggregate amount.

 

Mr. Neighbors said under current law it was not necessary to advertise for bids if the amount was under $10,000.  Between $5,000 and $10,000 one could, informally, contact 2 or 3 people, get an estimate, and work from the information obtained.  In addition, one could advertise a bid anytime but it would mean legal work and delays, especially if small items were involved.  His question now was, "If you start the year off and you need $8,000 worth of paper which is all you are budgeted for, later in the year you find you need an additional $5,000 worth of paper, how do you intend to handle it?"

 

Mrs. Greene referred to Section 2, "the estimated aggregate amount" and said, "We are not mind readers.  We cannot foresee what we don't know.  But we all keep records of purchases and histories of purchases by our agencies, so if we look back and see, consistently, we have seen this item exceeding the $10,000 limit then we realize this is something that needs to be bid."

 

Mr. Neighbors continued by stating he had worked with the State Purchasing Act, and said, "You buy $9,000 in January and you think that is all you need.  Later in the year you need $2,000, are you saying you go to bid?" 

 

Mrs. Greene answered no, adding the history would be reviewed over a number of years.  She continued, "If we are seeing $8,000 in the first year, $7,000 the second year, then the next year $12,000, the third year we may consider bidding it because it's risen above the $10,000 limit."  It could be a purchase would have to be made later in the year, but the purpose was to be consistent, so everyone worked from the same background.

 

Mr. Bache said he was not exactly clear as to what the problem was or why a change in law was being requested.  Mrs. Green pointed out the law specified "aggregate" amount but no time period which "aggregate" was supposed to cover.  Therefore, no consistency existed as to when an item should go to bid.  The change would clarify the period of time to be covered.  She then added, "It is not a significant problem, we consider this rather minor, but we feel it would be more consistent for all public agencies to.  Because we hear from our vendors, 'Why are you going to bid for this item, other agencies don't,' or maybe they do.  At different times of the year perhaps they bid it, perhaps they don't.  We feel it would be more consistent professionally to all be working from the same base."

 

Mr. Bache asked if aggregate was defined in the statutes.  Mrs. Greene referenced Section 2.

 

Mr. Williams wanted to know if there was any protection in the law to deal with the person who deliberately spent $6,000, then later came back and wanted another $7,000 to avoid the $10,000 limit.

 

Mrs. Greene replied she thought the bill set the standard which would prevent that type of thing from happening by encouraging departments to plan the entire year.

 

Mr. Williams said he understood the intent but still wanted to know what would happen to those persons who would deliberately underpurchase one time and, later, purchase again.

 

Mrs. Greene did not think it was anything anyone would prosecute, but they could certainly show them in law there was some foundation for avoiding the practice.

 

Mr. Williams then wanted to know what would happen to a person if the bill passed and they made a practice of, deliberately, underpurchasing the $10,000 limit to avoid going out for bid.

 

Mrs. Greene replied it would be up to the purchasing officer to point out to the person the practice was something they should decline from doing.  But if it did occur, the basis would have been established, whereas, at this time there was none.

 

Mrs. Augustine mentioned a Bill Draft Request (BDR) she had submitted and wanted to know if AB 9 was similar to her BDR.  A discussion followed and it was determined her BDR had nothing to do with AB 9.

 

Mr. Hettrick followed up Mr. Williams earlier comments and clarified how the new language would follow up on underpurchasing in the years following the first year.  Mrs. Greene concurred with his explanation.

 

Mr. Neighbors made it clear he found no fault with the current purchasing act and stated his reasons why.  Mrs. Greene then stated the purpose of centralized purchasing and said the change in the language was to define and clarify what "aggregate" meant.

 

Mr. Neighbors gave an example of a county which he had been in and how the new language would have affected it.  The delay would have been 3 or 4 weeks for delivery on an item which could have been purchased by an informal bid over the telephone.  He felt the new language created an administrative headache for small purchases.

 

Mrs. Greene next pointed to line 24, page 2, and said the change was to remove "by a county or district hospital" in order to allow other agencies to have the same ability to purchase perishable goods on the spot market.  Market conditions did not easily allow for the bidding process in perishable goods.

 

Mr. Bennett stated the items could be of a sizeable dollar amount.  Mrs. Greene agreed and identified the items as fresh produce and fruit.  She added meat, bread and milk were purchased on an annual contract.  Mr. Bennett wanted to know if several vendors were used.  Mrs. Greene replied yes, adding, "In perishable goods, by the time you have gotten a quotation, the goods are gone and digested by somebody but not by a public agency.  The product is no longer available."

 

Mr. Hettrick asked if language should be added to define perishable goods, using dated items as an example to support why.  Mrs. Greene thought it was a good suggestion saying she would be glad to look into it.

 

John L. Balentine, Purchasing Contracts Administrator, Washoe County Purchasing, supported AB 9.  He too testified it was a language cleanup bill, a bill setting time frame standards by which aggregate contracts could be measured fiscally.

 

Andrew J. Urban, Jr. Assistant City Attorney, City of Henderson, for the record wanted to confirm, "Our city, being a small entity, utilizes Nevada Revised Statute (NRS) 332.195, the Joinder statute, which allows us to piggyback on to purchases from Clark County in the state, that this rearrangement of the statute and this language expansion will not inhibit our ability to purchase various items under Clark County's contracts or under the State of Nevada's contracts."  He then gave examples of the items currently purchased under each contract.  He continued, "That is our main concern.  We get the economies of scale when Clark County or the State of Nevada goes out and obtains those unit prices for products."

 

Mr. Balantine replied AB 9 would not affect the Joinder provisions at all as it only set a time frame.

 

Ande Engleman, Nevada Press Association, reminded everyone every single branch of local government would be affected.  She too asked to see the definition of perishable goods included. She felt this might be abused and gave an illustration how it could be defended in court if no definition existed.  She mentioned she was concerned about the fiscal year portion because of elections departments which were based on a calendar year.  Again she gave an example of how it might create a problem in harmony with Mr. Williams earlier concerns.  In closing, she supported Mr. Neighbors fears regarding how AB 9 might affect rural counties and asked they be taken into consideration rather than limiting the viewpoint from just the larger counties' perspective.

 

Michell Bero, Program Assistant, Nevada Association of Counties, stated she was neither for or against AB 9 but wanted to know what the ramifications would be for the local government who purchased in the manner suggested by Mr. Williams earlier

queries.  She said, "Many of the local governments may have the capability to estimate if they are right about the $10,000 mark as to whether they should go to bid or not.  In some of the rural areas it's easier for them to make a run to Reno 2 or 3 times a year, to go to the Office Depot and pick up their paper supplies, etc., rather than going to contract.  I would hope this legislation, if passed, would not limit their ability to continue to do that."

 

Nancy Howard, Administrative Assistant, Nevada League of Cities expressed the same concerns brought up at the hearing and asked to go on record as stating, "Please review it and take into consideration the limitations that rural areas of the state have on them when they are purchasing."

 

Mr. Hettrick asked Ms. Howard how she would change the language to cover the concern she expressed to allow rural counties to purchase.  She replied she did not see a problem with the way purchases were being done at this time, and she did not want to see a limitation put on the counties where they might be locked into a contract if they were right on the line.  Again she pointed to the counties' current ability to purchase from an office supply store at a lower price than the contracted price.  She closed by saying the league had been caught off guard by AB 9 and had not had a chance to consult with the entities to ask for direction on the matter, and suggested it might be best to do so.

 

Michell Bero asked if it would be possible to change the language to a 12 month period saying it would help address some of the issues.  Mrs. Augustine replied some of the expressed concerns would be addressed in the bill she was presenting and suggested a meeting to discuss them further.

 

John Sherman, Management Analyst, Washoe County, wanted to clarify a statement made by Ms. Engleman.  The Washoe County Registrar of Voter's Office was, in fact, budgeted as other county departments and was on a fiscal year rather than a calendar year.

 

Mr. Neighbors summed up the various changes to the law and when they occurred.  His question then was, "Why wouldn't you, under the current law or any law, try to get the best price for your people?  It's there.  Is there anybody in the room who is going to stand up and say, 'No, I am going to wait until later to purchase something.'  I don't think you will be a purchasing agent or working for county government.  I just feel the current law is sufficient and does that job."

 

Vice Chairman Bennett closed the hearing on AB 9 and assigned Mr. Neighbors to work with all interested parties on fine tuning the bill.

 

Mr. Hettrick explained the status of AB 26 and said he anticipated seeing something from the Secretary of State's office soon.

 

Mr. Bennett reported AB 12 had been worked out and the amendment was in Bill Drafting.

 

There being no further business to come before committee, the meeting was adjourned at 9:35 a.m.

 

      RESPECTFULLY SUBMITTED:

 

 

                             

      BETTY WILLS

      Committee Secretary 

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Assembly Committee on Government Affairs

January 28, 1993, 1993

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