MINUTES OF THE JOINT HEARING OF

      ASSEMBLY COMMITTEE ON WAYS AND MEANS

      AND

      SENATE COMMITTEE ON FINANCE

 

      Sixty-seventh Session

      February 16, 1993

 

 

The joint hearing of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order by Chairman Morse Arberry, Jr., at 8:10  a.m., on Tuesday, February 16, 1993, in Room 119 of the Legislative Building, Carson City, Nevada.  Exhibit A is the agenda and Exhibit B is the attendance roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Mr. Morse Arberry, Jr., Chairman

      Mr. Larry L. Spitler, Vice Chairman

      Mrs. Vonne Chowning

      Mr. Joseph E. Dini, Jr.

      Mrs. Jan Evans

      Ms. Christina R. Giunchigliani

      Mr. Dean A. Heller

      Mr. David E. Humke

      Mr. John W. Marvel

      Mr. Richard Perkins

      Mr. Robert E. Price

      Ms. Sandra Tiffany

      Mrs. Myrna T. Williams

 

SENATE COMMITTEE MEMBERS PRESENT:

 

      Senator William J. Raggio, Chairman

      Senator Raymond D. Rawson, Vice Chairman    (Excused)

      Senator Lawrence E. Jacobson

      Senator Bob Coffin

      Senator Diana M. Glomb                          (Excused)

      Senator William R. O'Donnell

      Senator Matthew Q. Callister

 

COMMITTEE MEMBERS ABSENT:

 

      None

 

STAFF MEMBERS PRESENT:

 

      Mark Stevens, Fiscal Analyst

      Dan Miles, Fiscal Analyst

      Gary Ghiggeri, Deputy Fiscal Analyst

      Bob Guernsey, Deputy Fiscal Analyst

 

 

 

INFORMATION TECHNOLOGY ADVANCEMENT DIVISION - PAGE 188

 

Karen Kavanau, Director of the Department of Data Processing (DDP), introduced Dave Lawson, the Chief Accountant for the department.  She explained Judy Matteucci, Budget Director, would like to explain the mechanics of the transfer of staff. 

 

Ms. Matteucci called attention to Exhibit C which had been distributed to the committee members.  She advised the committees Exhibit C actually referred to the second budget which would be heard that morning, Information Technology Contracting Services.  It was hoped to clarify the mechanics of how this particular budget was built, how the various positions were brought in and to make it clear how this was accomplished.

 

The first page of Exhibit C lists a number of steps in the process and the additional pages are further explanations of the documentation used to reach the numbers used.  Ms. Giunchigliani had asked about the Nevada Department of Transportation (NDOT) the previous day, so this budget was chosen as the example.  Step one was to identify the positions to be transferred or pooled into Information Technology Services (ITS).  Ms. Matteucci stated this was a two-step process.  First a listing of the classifications related to either data processing or telecommunications was collected from the Department of Personnel.  She referred to Exhibit C, at Example A, which were the identifications received from the Department of Personnel as to employees who met the computer analyst trainee or comparable positions.  Payroll documentation (Example B) which exists for every state agency, was a position-by-position calculation as to salaries and fringe benefits.  At the bottom of the page and continuing on the next several pages, are those 40 positions within the NDOT which have been identified by the Department of Personnel as being involved in telecommunications or data processing.  The support costs for these positions were next identified, Ms. Matteucci remarked.  Example C represents those support costs.  In budget account no. 1365, the average cost per position for operating was $714.  In budget account no. 1385, the average cost was $1,723.  The actual amount determined by the budget division for operating costs relative to each position was $1,000 based on the current DDP accounts.

 

Ms. Matteucci referred to in-state travel and said in account no. 1365, the average cost was $89 and in account no. 1385, the cost was $24.  The budget division chose the figure of $90 as the $24 figure was unrealistic.  In the training category, the average for budget account no. 1365 was $157 and $122 in account no. 1385.  The figure of $160 was chosen for the average training seminar cost for a data processing or telecommunications person.  The figure of $160 was then multiplied by 40, the number of positions.  The total cost of the 40 positions and the support costs for those positions were then moved to the data processing category in the transportation budget.  Essentially, there was $1,861,993 in salaries for the 40 identified positions; $3,600 in-state travel; $40,000 operating expenses and $6,400 training for a total cost of $1,914,793.  This amount was transferred into the NDOT data processing category.

 

Ms. Matteucci commented the Information Technology Consolidation Assessment, a report done by KPMG Peat Marwick, provided the rationale and explained the benefits of consolidation.  The report recommended positions which should be eliminated.  A total listing of all positions in DDP was not obtained from the Department of Personnel.  Ms. Matteucci indicated Example D of Exhibit C identified all the positions which were brought into the ITS budget.  She pointed out the first position listed, the director of DDP.  There was only one position identified and the position in FY94 and FY95 was "reorged out."  Essentially, the value of that position had been eliminated.  Ms. Matteucci explained in reviewing the position listing, if there was a change in the number of positions, one could determine exactly which position and then determine the value of each position recommended to be eliminated.  Most of the eliminations are the managerial/ administrative positions in the ITS budget.  At the bottom of the last page of Example D, the total position count before reorganization savings was 245.75.  The total starting position count for the Systems and Programming Division, the director's office, the Planning and Telecommunication Division (the existing budgets for both telecommunications and DDP) were 64, which means a net total of 181.75 positions were added.  It was recommended by Ms. Matteucci the value of 28 positions be removed, multiplied by the support costs ($35,000) plus the savings from those 28 positions ($1,086,047) added to the $35,000 equals $1,121,047.  If the total savings were divided by the total positions added, each position cost could be reduced by $6,168 in the budgets transferring positions in.  Using the same formula, in FY95, the total savings would be $12,524.

 

Ms. Matteucci referred back to the first page of Exhibit C, item 6.  The average savings of $6,168 multiplied by 40 positions in NDOT equals $246,720 subtracted from the NDOT's data processing general ledger, which was the value of both the positions and their operating and attendant costs.  In the first year, the NDOT payment to DDP (or the ITS budget) had been reduced by $246,000 in NDOT and $500,960 in the second year.  There are some savings as a result of the consolidation and as a result of the positions shown on Example D, a savings of approximately $733,970 will be made over the biennium.  Every budget with positions transferred will be done in the same way.  When positions are seen to be transferred out into ITS, Ms. Matteucci suggested the members refer to the data processing category.  There the new money, minus the savings of $6,168 the first year and $12,000 for the second year can be located.  Essentially, the agency will be making payments to support the ITS budget through its data processing category.

 

Ms. Giunchigliani asked if the value of salary was just the salary or the salary with the benefits attached.  Ms. Matteucci replied its value was based on just the salary.  Ms. Giunchigliani inquired who defined the data processing related positions.  She pointed out there was no clear job descriptions for some of the positions.  Ms. Kavanau responded the Department of Personnel does have specific classification class codes for data processing, telecommunications and communications as defined by personnel in its occupational series.  Ms. Kavanau was aware this was not a complete list.  The positions transferred into ITS were only those readily identifiable in the personnel series class codes.  The transfers will continue to be refined throughout the next biennium.  The flip side was there may be positions, particularly in the microcomputer specialist arena, which should more appropriately be classified on the user side rather than microcomputer specialists.  This was only the first step, Ms. Kavanau stated.

 

Senator O'Donnell inquired what indicators were used to remove the 28 positions.  Ms. Matteucci responded one of four areas KPMG looked at specifically was the consolidation of the information technology services in this state.  A copy of the report from KPMG had been distributed to the committee in which they identified the positions which they considered redundant or duplicative once all the positions were located in a central area.  Ms. Matteucci advised the committee KPMG did not have the full range of positions from the Department of Personnel when the review took place in December.

 

Senator O'Donnell referred to the computer specialists listed on Example D of Exhibit C.  He indicated concern regarding the deletion of 15 computer system specialists.  He pointed out it appeared those were paid a larger salary than other positions which had not been eliminated, and inquired if the higher paid employees were being forced out.  Ms. Matteucci stated the group Senator O'Donnell was referring to was involved in communications as opposed to data processing.  She explained that group consisted of coordinators, directors, managers and supervisors.  Essentially, KPMG suggested that level of management was unnecessary.  This was a proposal which would be phased in and the positions would not all be eliminated in October, 1993, but throughout the biennium and beyond as more efficiency was achieved.  Senator O'Donnell offered a word of caution--if the staff was to be reduced, he advised the budget director to make her case before the committees now as opposed to facing a lawsuit down the road due to the elimination of a level of managers.  Ms. Matteucci stated she was comfortable justifying the staff reductions due to duplication.

 

Senator Coffin inquired if a pro forma analysis had been prepared for the agencies concerning age, sex and minority composition.  Ms. Matteucci replied no.  Senator Coffin mentioned the axiom of the last hired, the first fired under this scenario.  The women and minorities brought in to satisfy affirmative action requirements could be the first to go.  Ms. Matteucci responded the demographic makeup could be looked into once the agencies were reorganized.  She agreed, however, this might be a problem.  However, in the communications field, she did not feel this was much of a problem, but the data processing field was a different issue.

 

Ms. Giunchigliani stated the movement of positions was becoming clearer.  She called attention to those employees who will be retiring and for those who are not vested, if there was a way to ensure retirement.  Ms. Giunchigliani stated she did not want career-seeking employees penalized by the elimination of their jobs.  Ms. Matteucci agreed and stated an early retirement package had been proposed which would hopefully encourage some of those at the top to retire, precluding the bumping issue.

 

Ms. Tiffany pointed out there were some large data centers in the state, NDOT, DMV and other agencies.  She stated she knew the Peat Marwick study recommended where a certain level of data centers already existed, to leave them alone.  For instance, if NDOT was to centralize within their own agency, Ms. Tiffany commented she saw no benefit for that system to be brought into the mainstream data processing system.  Ms. Kavanau commented the Peat Marwick study proposed data center consolidations.  The question arose in the report that if a certain level of programming and application support personnel were already at an agency, should they be left.  If 20 different systems professionals were asked, there would be 20 different answers.  The perfect configuration does not exist.  There were reasons pro and con to have application support staff centralized and decentralized.  The most important fact about centralization was staff could be reallocated as needed, but if the staff was assigned to a specific agency, they could not be reallocated.  The most practical reason for placing application staff in the agency was the ability of getting the staff as close to the user as possible.  However, cost was an important factor regarding the placement of staff.  Ms. Kavanau concluded in her opinion most of the data centers could be collapsed into one.  Ms. Tiffany disagreed.  She commented the systems people, Unisys, IBM, HP, etc., are not as transportable.  Their expertise cannot be applied one to the other.  Ms. Kavanau explained there was a lot of cost benefit analyses which needed to be considered before a final decision was reached.  One of the reorganization possibilities would be computers centralized in one location so the management personnel could be maximized, but the systems personnel would be retained.  Ms. Tiffany said she was very uncomfortable with the complexity of the issue and the attempt to sort it out in 90 days.  Ms. Kavanau agreed 90 days was short.  She pointed out if there was a start now, the first wave could be completed in calendar year 1993.  However, the authority does not now exist to start.

 

Mrs. Evans referred to the comments regarding retirement and the buying of time.  She inquired where the expense would show in the budget.  Ms. Matteucci replied she had no idea how many people would want to take advantage of such an offer.  She suggested it be a statutory contingency expense.  There will be a bill which funds the statutory contingency and there will be changes in it to reflect this retirement expense for a limited window of time.  It was a contingent expense which may or may not occur.  A ballpark figure had been arrived at of approximately $500,000.  The Department of Personnel was asked to run a tally of those employees with either 23 years or 28 years, thinking that two more years would buy up to 25 or 30 years.  The result was the largest group of people in that category were with the NDOT.  Mrs. Evans requested the calculations be provided to the fiscal staff.

 

Senator Callister pointed out the plan was presumed by Ms. Matteucci to be implemented in 90 days while Ms. Kavanau stated it would take one year.  He asked what impact that would have on the calculated savings built into the budget.  Ms. Matteucci replied the first wave of positions would be eliminated on October 1.  The second wave of eliminations would not occur until the second year of the biennium.  Contrary to the perception, the entire process would not occur within the 90-day period.  This was an aggressive program and Ms. Matteucci stated she would like to get a feel from the committees as to what they wanted to do.  Senator Callister asked what the impact would be if the legislature decided they did not want to go with the consolidation.  Ms. Matteucci replied the calculated savings would be approximately $1.1 million in the first year and $2 million in the second year of the biennium, with $700,000 saved in general fund dollars.

 

INFORMATION TECHNOLOGY ADVANCEMENT - PAGE 188

 

Ms. Kavanau distributed three charts to the committee which are attached as Exhibit D.  She referred to chart 1 and explained the left side represented the three divisions within the Department of Data Processing and the organizations involved in the consolidation of staff.  The right side of the chart represents the four budget accounts being presented today.

 

Under the current organizational structure, budget account 1370 was the planning and research division.  It would be replaced by account 1344 which was a new division named Information Technology Advancement (ITA) and would be located in the Department of Finance.  The Facility Management Division would be renamed the Information Processing Services Division in the Department of Administration.  All of the remaining information technology staff would be assigned to either Information Technology Contract Services or Information Delivery and Customer Services in the new Department of Administration.

 

Ms. Kavanau emphasized the governor was not proposing the transfer of personnel to DDP.  Employees from DDP and from a number of other agencies would be transferred into a new agency and the department would no longer exist.  Under the existing structure, no single agency was accountable for the state's information technology.  As a result, there had been a focus on agency-specific solutions and policies rather than statewide.  Millions of dollars were being spent on too many different types of systems without any executive overview.

 

Ms. Kavanau referred to chart 2 of Exhibit D and remarked it appeared confusing which was exactly the case.  The chart represented the status of financial data in Nevada today.  For example, to check the status of a purchase, nearly every database would have to be accessed in one way or another.  Each database had a different inquiry procedure to obtain the information.  This was not a cost efficient system, it was possible to link all the systems together, but it would be expensive.

 

Chart 3 represents what had been recommended by Peat Marwick.  A single database where information could be accessed by multiple agencies.  Information could be accessed through single inquiry process and the state would no longer pay for inefficient and unnecessary extra data communications.  Ms. Kavanau called attention to NRS 242 which mandated the most cost-effective and efficient data processing possible should be utilized.  As long as the state has fragmented and multiple databases, and agencies making policy-level decisions for information technology, Ms. Kavanau remarked the state would not meet its mandate.

 

The benefits of consolidation were many including consistency, reduction of expenditures, statewide standards, reduced facility maintenance costs, etc.  Ms. Kavanau stressed that until the state was willing to stop the proliferation of independent systems and stop exempting state agencies, there would continue to be runaway costs and there would be no statewide strategic direction.

 

Mr. Heller referred to Exhibit D, chart 3, and asked if there were any agencies who were exempt to consolidation.  Ms. Kavanau replied there were approximately eight agencies which were exempt from using the data processing services pursuant to NRS 242.  The statute gives these agencies free rein to do exactly what they want, including designing and operating their own databases.  Mr. Heller asked if that should be changed.  Ms. Kavanau replied absolutely.  He inquired if legislation had been prepared.  Ms. Kavanau stressed she was ready when he was.

 

Ms. Tiffany stated she was looking at total costs.  She commented if the system was put on a single data host, first there would have to be a database structure to accommodate all the stems.  She asked if such a thing existed.  Ms. Kavanau replied it does, DB II was installed and operational.  Ms. Tiffany mentioned the hardware in the original collection areas must be custom programmed to convert that data to the central database.  Ms. Kavanau acknowledged that was correct.  Ms. Tiffany inquired if that cost was built into the budget.  Ms. Kavanau said no, she did not believe the process would be completed in the next two years, a plan must be created.  After the data centers were consolidated, the next task addressed would be what data repositories would be created and where they would reside.  However, those costs were not specifically reflected in the budget, the process must go one step at a time.  Ms. Tiffany remarked that would be a large-ticket item but she did not disagree with the direction the agency wanted to go.  Ms. Kavanau agreed.  To further explain what Ms. Tiffany had asked, Ms. Kavanau mentioned cost benefit.  She stated a number of different systems had been supported by the legislature and she wondered if it would be worth connecting those systems together or if it would be more cost-effective in the long term to leave the systems the way they were and pay for the data communication.  She did not claim to have the answer, but explained it was the national trend, particularly in state governments, to consolidate data centers to save money.

 

Mrs. Evans complemented the charts and stated they illustrate what Ms. Kavanau was trying to accomplish.  She stated there was concern about the plan to move the systems and asked if the discussion on the three month time table should even be continued.  Having some previous limited experience on a smaller scale, Mrs. Evans stated she did not believe the move could be done in three months.  She emphasized a new timetable should be put together.  Ms. Kavanau explained the new ITA division in the Department of Finance has been committed to the ITS people in the Department of Administration as their first project to help create a plan.  There would be 13 people from ITA working on the consolidation plan.  Secondly, there were many costs which were unknown and potential areas of revenue.  If data centers were consolidated and it was decided to eliminate some hardware, there would be revenues to be realized which was not reflected in the budget.

 

Senator Raggio said when the issue was studied during the interim committee on SCR 2 of the 66th session, the conclusion reached was there should be a consolidation of management only and Senator Raggio believed Ms. Kavanau had specifically concurred there should not be a consolidation of data centers.  Ms. Kavanau stated that was incorrect.  Her testimony had been to go slow and look at certain things such as the university system.  Senator Raggio pointed out if she did not, that was the conclusion drawn by the committee from the information at hand.  Ms. Kavanau commented when the Peat Marwick study was recommended, she had been trying to gather information as to whether consolidation was the appropriate thing to do.  Frankly, her conclusion after studying the information she had gathered, was the consolidation could be done.  However, the three month schedule was a little too aggressive.  For example, there are three data centers who use the same type of equipment.  The Employment Security Department, NDOT and the state mainframe in DDP all use the same type of IBM equipment.  He inquired what the reasoning was to exempt gaming, the Public Service Commission and others.  Ms. Kavanau stated she understood gaming had asked to be excluded for the time being, but they wanted their data system looked at over the next biennium to consider consolidation.  The Public Service Commission should have been included, but Ms. Kavanau believed the problem was the agency does not have employees in the classified service in the data processing series.  The data processing support staff was in the unclassified service.  When the first roll up of positions occurred for the agency, nothing fell out for PSC.  It is well known they have data processing activities occurring and Ms. Kavanau agreed they should be included.  SIIS, PERS and the university system are the only other three exempted agencies.  To her knowledge, the exemptions resulted from the fact the agencies respond to a different authority than other state agencies.  They answer to boards and the governor does not have the direct managerial control over those three entities which he does over the rest of the state.  Senator Raggio stated the governor had control over the controller.  Ms. Kavanau replied NRS 242.115 does include the controller in standards, policies and regulations so the controller was not exempt.  The controller was exempt from services and the interpretation of those services has varied greatly from one agency to another. 

 

Chairman Arberry referred to the two charts in Exhibit D.  He asked if all the savings would take place over the two years.  Ms. Kavanau stated the pie charts were for the long term.  He asked if there was a figure for the long term savings.  He stated the idea looked good, but he was concerned in ten years down the road, the savings would deteriorate.  Ms. Kavanau emphasized if the process was not started now, it would not happen.  There were long term advantages and cost benefits should be prepared for presentation to the legislature.  Chairman Arberry reiterated if there would be savings over the long haul.  Ms. Kavanau replied there absolutely would be savings.

 

Ms. Giunchigliani stated focus had been lost and that was the key.  The issue now was efficiency and down the road, it would be cost savings.  She commented she had reviewed some previous consolidation reports and consolidation had been recommended 20 years ago for the data processing center.  She believed the legislature would be irresponsible if it did not prepare a plan, and stick to that plan over the long term.  She explained she had served on the committee regarding SCR 2 of the 66th session and had requested information regarding the location of the different computer systems in order to begin an analysis of consolidation.  There was some consideration given to asking state agencies not to purchase additional equipment.  Ms. Kavanau replied one of the concerns was that agencies would be making significant investments this fiscal year which would impact the cost effectiveness of consolidation.  She emphasized during the next few months the committees should take caution in approving data processing expenditures if they choose to go with consolidation.

 

Senator Callister commented over the past four years there had been significant and chronic cost overruns in each new system implemented.  He remarked the planning and research division appeared to just get a name change by being moved into the Department of Finance.  He asked how that would address the delivery of service.  He also called attention to the planning division being transferred to the Department of Finance but the delivery of service was under the Department of Administration.  He suggested those divisions should be under the same entity for continuity, unless there was an explanation as to the division.  Ms. Kavanau replied it does just appear to be a transfer of the planning division, but in actuality it was not.  The planning division in the current Department of Data Processing does not have the authority to set statewide standards and planning direction.  The two areas which came to mind immediately were "voice" or telephone service which was located in general services and  microwave service located at the Nevada Highway Patrol (NHP) and twelve agencies who make policy decisions regarding two-way radio.  Ms. Kavanau stressed it was the idea to create statewide, enterprise-wide standards and planning function.  This could not be done when there was more than one agency setting standards.  The proposed ITA division was much different, although it should draw on the knowledge, skills and abilities of the DDP personnel.  It was Ms. Kavanau's understanding the personnel would be transferred into the new division and augmented by additional personnel.

 

In addition, Ms. Kavanau continued, the positioning of the ITA division in either administration or finance would work either way.  The biggest concern was the fact there exists very strong leadership in both departments and they differ in their opinions.  Ms. Kavanau hoped that would not be a problem.  Senator Callister agreed, however, he asked the subcommittees assigned to this issue to look into it very carefully.  By focusing on consolidation, he felt there could be a problem missing a larger concern--how to avoid the clear pitfalls of the existing system.  Data processing has consistently been the most troublesome area of state government.

 

Mr. Price added his compliments to Ms. Kavanau and the charts prepared by her office.  A picture is worth a thousand words.  He referred to chart 2 and commented about the two way street between the Legislative Counsel Bureau (LCB) and accounts payable history.  He asked if the information in both places could be accessed by both.  Ms. Kavanau explained the accounts payable history file was located on the state mainframe and was used by state agencies in connection with the controller.  She asked Pam Case, Chief of the Facility Management Division, to explain further.  Ms. Case said the access was basically one way.  The audit division of LCB on a routine basis audits the accounts payable history.  In order for them to do so, that information was placed on the mainframe where they would have access.  Mr. Price asked if the accounts payable history would have access to information at the LCB.  Ms. Case replied no, they would not and could not have access. 

 

Mr. Price referred to chart 3 where there were arrows between the governor, administration, legislature, LCB, etc., directed to the executive information system.  He inquired if that would mean there would be no access to other parts of the program.  Ms. Kavanau replied no, the executive information system was a nomenclature for a variety of things.  If there was a request for a specific item, a search would be made and information would be presented to the requestor.

 

Mr. Price pointed out Ms. Kavanau had mentioned those agencies who were exempt.  He requested a statement from each of the exempt agencies as to why they should or should not be a part of the system.

 

Chairman Arberry requested Ms. Kavanau to begin her budget presentation.  She stated the mission of ITA was to develop strategic plans, policies, standards and procedures to ensure effective and efficient use of information technology and to promote the appropriate use of that technology within state government.  The division would have three bureaus:  Planning and Quality Assurance to develop and maintain the statewide strategic plan and to perform compliance reviews; Policies and Standards to develop statewide policies and standards on issues such as security, disaster recovery and system development; and Guidance to research new technologies and advise agencies accordingly.  The division would be funded by assessment to the ITS division in the Department of Administration and by SIIS.

 

The budget request was for 14 positions in all: one chief, two senior analysts, nine analysts, one management assistant and one accountant.  Ms. Kavanau explained the budget showed one position request which was for the accountant.  It was an existing position in another agency.

 

Ms. Kavanau remarked the in-state travel category would be used primarily for conferences and compliance reviews.  A breakdown of the operating expenses can be found on Exhibit D.  Most of the expenses were extrapolations performed by the budget division as an average being currently experienced.  Ms. Kavanau wished to explain the rather large line item in the operating category under contractual services, Gartner Group.  The Gartner Group was one of two or three nationally renown research organizations.  There was no doubt the proposed consolidation was new to everyone and it was important to have the flexibility to draw from experience on the outside.  The Gartner Group was an idea of the type of research organization which the state might draw on.  Those funds might also be used to acquire consulting services on any other issues which will be faced in consolidation.

 

Chairman Arberry requested an explanation of the 10.75 positions recommended by the governor.  Ms. Kavanau stated she believed the position request came from the Peat Marwick study.  They identified the three bureaus and recommended the staffing levels for those bureaus.  The 10.75 positions represents three quarters of a year's worth of 14 positions.  The existing full time accountant and new positions in FY94 for nine months and in FY95 for all twelve months.  The figure represented 14 positions, but the positions were phased in the first year.

 

Ms. Giunchigliani inquired what the actual dollar amount was for contract services.  Ms. Kavanau explained it was $75,000 in the first year and $100,000 the second year.  Gartner Group subscriptions vary in price according to need.  There were approximately 12-13 major thrusts of technological research information.  Subscribers pay to have access to that information of approximately $7,000-$15,000 per year per primary topic.  Ms. Giunchigliani asked if that would be found in the operating category as she could not tell from the budget format.  Ms. Kavanau replied that was correct, on page 189 of the Executive Budget, the figure of $124,125 included $75,000 in the first year and the $100,000 was found in the $154,423 figure for FY94-95.

 

Ms. Tiffany called attention to the three performance indicators she would like to have added to the budget if the same made sense to Ms. Kavanau.  One would be the time or number of days to fill a request; two, open positions--date of hire, date of training and date of effectiveness; and three, the programs which cannot be tackled due to lack of staff.  Ms. Tiffany wanted this information to determine if the agency was performing the desired services to its customers.  Ms. Kavanau stated the difficulty with the first request, the number of days, was every agency request was different and could take anywhere from one day or six months to fill.

 

Ms. Kavanau referred to the equipment category on page 189 of the Executive Budget, which includes office furniture in both years and the installation of a telephone system.  She pointed out the training category and explained the zeros represented the extrapolated amounts for personnel attending technical seminars.  These were seminars which people in the advancement division must attend in order to learn what was going on outside Nevada.

 

The data processing expense reflects the purchase of 14 personal computer work stations with the associated software, Ms. Kavanau continued.  It was hoped the automation of certain planning functions would provide state agencies with the ability to prepare a budget electronically rather than by hard copy to allow quicker modification.  Ms. Kavanau corrected a performance indicator by referring to item 4, projected FY94 of 185, and stated it should be zero rather than 185.

 

Mrs. Evans inquired if the new positions were classified or unclassified.  Ms. Kavanau replied the information she had received was the division would be totally unclassified except for the two clerical positions.  Mrs. Evans remarked the information which had come to staff did not so indicate and she requested clarification.  Forrest Thorne, Deputy Budget Administrator, responded that based on the duties requirements, the positions would be classified as exempt merit, with a professional exemption.

 

Senator Raggio referred to the performance indicators and inquired where the 185 agencies figure was obtained.  He asked if that was the number of surviving agencies in state government.  Ms. Kavanau replied there were actually approximately 250 agencies, but some went through the process in tremendous detail in the last round and it was not expected to hear from every state agency this time.  In light of the reorganization, it was anticipated there would be many more questions from the agencies.

 

Chairman Arberry commented there were some existing positions from the DDP Planning Division which were not being transferred to the ITA pursuant to the Peat Marwick recommendations.  He asked Ms. Kavanau to explain.  Ms. Kavanau responded she was under the impression those positions would be transferred into the division.  

Senator Raggio inquired where the corrections to budget account nos. 1344 and 1365 had originated.  Mr. Thorne replied there were two corrections, one to the ITA budget which had just been discussed.  There was an expenditure category omitted with the transfer to the Department of Finance, the Budget and Planning Division.  As indicated earlier, the budget and planning division will be providing the administrative support for the Department of Finance. 

 

The second correction appears in the following budget, said Mr. Thorne.  Since the ITA budget was supported by an assessment on ITS, that budget was adjusted accordingly.

 

INFORMATION TECHNOLOGY CONTRACTING SERVICES - PAGE 264

 

Ms. Kavanau advised the committees the mission of the Information Technology Services Division was to provide information processing, information delivery infrastructure and system support service while improving the quality, productivity and overall efficiency of state government operation by leveraging a consolidated investment in information technology.  This budget represented the blending of staff from several agencies into a new service organization.  There were a number of assumptions on which the budget was based.  The ITS division would have complete authority over all information technology-related equipment, software, personnel and contracts despite the fact this was not reflected in the budget.  Ms. Kavanau explained the reason was there had not been enough time to ferret out all those expense items.

 

The second assumption was significant reorganization savings could only be achieved through data center consolidation.  This issue surfaced during the interim subcommittee of SCR 2 of the 66th session.  As pointed out by Senator Raggio, the subcommittee recommended DDP evaluate the feasibility of consolidating data centers.  Ms. Kavanau continued the ITA staff will be available to assist ITS in its consolidation activities.  Another assumption was that any new costs resulting from consolidation were provided elsewhere in the Executive Budget.  Chairman Arberry inquired as to what "elsewhere" meant.  Mr. Thorne replied the costs were as yet largely unknown for the consolidation of the data centers.  There was no specific allowance made for that in the other budgets because the costs were unknown.  There was the assumption this would not happen immediately but would take some time to implement.  Mr. Thorne added if there was data center consolidation and up- front costs, he asked for some flexibility in being able to adjust those individual budgets accordingly.  It was expected through consolidation, there would be some offsetting savings on the operational side.  Chairman Arberry acknowledged the consolidation was a massive operation and inquired how long it took to put the plan together.  Mr. Thorne replied they had worked with KPMG over a period of a few months but the only part of the consolidation which they addressed in any effective manner was the personnel issue due to the limited time available.  As had been indicated by Ms. Kavanau, the next biennium would largely be the planning process for the consolidations which will ultimately take place.  In the next biennium, Mr. Thorne hoped to be back before the committees with a detailed and longer term plan for the consolidation.  Chairman Arberry reiterated how long it took to put the consolidation plan together, a month, week or days.  Mr. Thorne answered they had a little over one month.

 

Ms. Kavanau related the identification and movement of personnel was not yet complete.  There are a number of employees performing information technology tasks but who were not classified as such and therefore were not included in the transfer.  There were also some employees who may more appropriately be classified outside the information technology series and assigned back to their original agencies.

 

Ms. Kavanau continued the ITS division was envisioned as having three primary components:  (1) Information Processing Services or the data center(s); (2) Information Technology Contract Services which was primarily applications support; and (3) Information Delivery Systems which included telephone, network design and implementation, help desk and other customer services.

 

The ITS division would operate on a fee-for-service basis.  The revenues in this proposed budget reflect microwave user fees formerly attributed to the NHP and application services fees formerly paid to DDP's System and Programming Division.

 

Mr. Price stated he had concern moving some of the positions into NDOT budgets where much of the funding came from the federal government and was to be used on highway functions.  He asked if there would be a written contract regarding technical services between NDOT and DDP in the event there were questions.  Ms. Kavanau agreed there certainly should be service level agreements with customers.  Currently, the DDP had such an agreement with other agencies.  There were work orders or service level agreements signed by both the customer and by DDP.  With reference to the federal issue, Ms. Kavanau explained Tennessee had a centralized data center where it had assumed the data processing for its agencies, which would be the equivalent to the Employment Security Department in Nevada, as well as their department of transportation.  The key element was to present a very clean schedule of cost allocations when cost reimbursement was sought in order to prove the costs were associated with that particular agency and no one else. 

 

Mrs. Evans emphasized she was very excited about the project and she could see great potential for the data center consolidation.  However, she was concerned about the amount to be done and in order for the legislature to close budgets, there must be a reworking of the plan.  There had been a lot of evidence presented during the hearing on the time which will be required to implement the system.  She commented more concrete plans were required, a more carefully worked plan implemented over a longer period of time.

 

Ms. Kavanau continued the base expenditures in this account reflect the consolidation of all information technology operational personnel and their support expenses.  The figures reflected in the expenditure line represent a combination of the former System and Programming Division of the DDP, NHP Communications Board and the Automation Division of the DMV.  The personnel category reflected the consolidation of staff from a number of state agencies and included a $3.3 million "reorganization savings" during the biennium.

 

The out-of-state category, Ms. Kavanau explained, would be used for the annual attendance at several conferences and to travel to federal installations to purchase surplus equipment.  Chairman Arberry remarked there had been a very big jump from just under $700 up to $3,300 and asked for an explanation.  Ms. Kavanau replied the $3,373 figure recommended by the governor represents the combination of the three divisions previously mentioned.  The $696 figure requested by the agency reflected only the Systems and Programming Division in DDP.  The larger figure adds in the out-of-state travel requested by NHP Communications Board and the Automation Division of the DMV.

 

Ms. Kavanau remarked the in-state travel represents maintenance, repair and installation of microwave and data networks throughout the state which was based on the same consolidation.  These funds also support meetings between staff members and inspection of various installation sites.

 

The operating expenses represent the net total of FY92 expenditures in DDP's System and Programming Division, the NHP Communications Board and the DMV's Automation Division.  In addition, Ms. Kavanau said, it includes an allocation to cover routine expenses such as supplies and telephones for the added staff which have been transferred from agencies and the addition of ten modems to be used in the new DMV offices in Elko.  From this total figure, the anticipated reorganization savings, or average amount per capita based on the number of positions recommended to be deleted during the biennium, has been subtracted.  Also subtracted was an "interfund transfer" which represented an assessment by the Administrative Services Division for accounting and purchasing activities performed on ITS's behalf.

 

Chairman Arberry requested further clarification of the data processing expense.  He remarked there was a large increase, nearly $300,000 in FY93-94.  Ms. Kavanau stated the increase resulted from the consolidation of the three agencies as previously mentioned.  The same increase applies to the computer facilities line item.

 

Mr. Dini pointed out the reserve rose from $625,000 to $908,000 and asked if it was a contingency fund or a reserve for the next biennium.  Ms. Kavanau explained it reflected the same reserve which had existed in the three divisions involved in this consolidation which had been combined.  Because the divisions were self-funded coming into this new agency, the figure represented the reserves from prior years.

 

Ms. Kavanau referred to the maintenance category and explained there were six separate factors funded by this budget item:  (1) an additional program/analyst III position for the Employment Security Department; (2) an additional program/analyst II position for Risk Management's new BISON group benefits system; (3) automation costs for the DMV offices in Minden/Gardnerville, Winnemucca and West Las Vegas; (4) increased costs to support a growing number of microwave users; (5) costs to support the increased information processing experienced by the Welfare Division; and (6) changes in allocation of information processing costs to the Welfare Division.  The personnel expenses were for the two new positions.

 

Out-of-state travel represents an increased travel budget to allow for the purchase of more federal surplus equipment.  The budget was formerly with the NHP.  Ms. Kavanau remarked the in-state travel represented increased travel requirements to maintain the growing microwave user base, resumption of normal maintenance of mountain tops previously deferred, growth in user base at the DMV and a $90 allocation per year for each of the two new positions.  This figure represented the per capita average used consistently throughout the budget.

 

Operating expenses represented funds to cover microfiche disposal activities and $1,000 each year to provide routine expenditures for each of the two new positions.  The computer facility costs arise from a combination of two factors, the increased processing charges incurred by the Welfare Division due to its caseload increases and a change in the Welfare Division's method of payment.

 

As a result of the last legislative session, Ms. Kavanau continued, the manner in which Welfare was billed for DDP services was altered for the FY92-93 biennium.  The net result was Welfare was not paying its fair share of costs and other state agencies were paying instead.  According to Welfare, the change caused the state, in addition to inequities in billing, to lose over $1 million in cost reimbursement.  Therefore, the recommendation was to reverse the change back to the original procedure.

 

Ms. Giunchigliani cited the personnel issue in the original budget where 241 positions were transferred.  She asked for a discussion of the alleged reorganization savings.  Mr. Thorne replied 233 positions represented the base or existing positions.  In addition to that, there were 14 positions recommended.  Ms. Giunchigliani referred to budget account 1344 and asked if Mr. Thorne felt the transfer of positions and the savings from the general fund of $700,000 were accurate figures.  Mr. Thorne replied affirmatively. 

 

Ms. Tiffany mentioned the needs of Welfare, DMV and other agencies.  She asked if it would be more cost effective to add more personnel and move into the medical management arena rather than putting money into a transitional system.  Ms. Kavanau pointed out she had some serious reservations about getting into a medical management system at the present time.  There was no doubt a new system was needed and money was being lost everyday for lack of a new system.  However, experienced staff, not only in welfare but in state government was the key.  This staff was stretched about as far as possible at the present time.  More personnel from the outside was not the solution, there was need to develop the NOMADS project before another massive project was started.  Ms. Tiffany stated she understood the answer, but she was not convinced it was the solution.  She disliked the idea of throwing $500,000 away for a six-nine month transition.  Ms. Kavanau suggested Ms. Tiffany was actually discussing welfare reform.  The estimate to upgrade the old welfare system was approximately $500,000 in data processing costs.  Ms. Tiffany inquired if extra staff would help reduce that figure during the transition stage.  Ms. Kavanau believed that would not really help.  It was a question of timing, was it the committee's desire to upgrade the existing welfare system and build welfare reform into the new system or let the old system go away and not invest the money in a new system for another two years?  Ms. Tiffany remarked she was seeking advice regarding the addition of personnel and how best to save money in programs.  Ms. Kavanau explained a lot of positions were being moved in different directions.  There must be coordination in this move to analyze the personnel, their skills, where they should be located and when the end result has been obtained, determine if additional personnel should be added.  Ms. Tiffany wanted to make sure there was enough personnel to get the job done, but also to do a better job.  There had been many complaints from agencies there was not enough staff to provide services.  Ms. Kavanau declared that was absolutely correct.  There was a perception the DDP was understaffed.  She did not know what the reorganization would do for that perception or for reality, but she did not feel more staff was the appropriate solution.

 

Senator Jacobsen asked if at later date a tracking chart could be provided as to where the positions would land.  Ms. Kavanau replied she would provide that information.

 

Ms. Kavanau referred to the NOMADS project and stated it was the data processing support for Welfare's new system.  As a result of consultations with other states, an estimate of four new positions which the governor had recommended was determined to be needed.  These employees would be involved in the development and implementation of the NOMADS system and would be part of the support team once it was installed and operational.  Chairman Arberry inquired as to what experience these employees would have or the standards necessary to develop the plan.  Ms. Kavanau introduced Jeff Chilton, Chief of the Systems and Programming Division.  Mr. Chilton indicated his staff had been working with the Welfare staff over the last few years and had traveled to states such as Arizona, Connecticut, Delaware, Kansas, New Mexico, Ohio, Tennessee and Vermont and also talked to the state from which the system will be transferred, Rhode Island.  Additionally, they have attended conferences specifically for the transfer of similar systems from one state to another and seminars to discuss all facets of the transfer.  Chairman Arberry requested this information be provided to the committees in writing.  Mr. Chilton stated he would.

 

Ms. Kavanau moved to the enhancement for microcomputer support.  As the committees may be aware, DDP implemented and completed its first full round of information systems planning where information plans had been collected from every state agency.  This information was compiled into the Biennial State Information Systems Plan which was on file with the Fiscal Analysis Division.  This was the first report prepared by DDP and was specifically for the use of the legislature.  All the plans submitted by state agencies were reviewed and the nine microcomputer requests to support existing positions were noted.  It had been felt if those positions were centralized rather than having them in agencies, it would be possible to reduce the positions to four.  Therefore, four microcomputer specialists had been requested to support the ever-growing PC and PC/LAN community in state government.  Those positions would not be filled, Ms. Kavanau assured the committees, until such time as the existing microcomputer specialists had been analyzed and appropriately allocated.  The request was made before the final results had been received from Peat Marwick.

 

Senator O'Donnell commented he thought it was incongruent that four positions would be requested when in earlier testimony, Ms. Kavanau had stated there should be centralization, elimination of PCs and go more to a mainframe system.  Ms. Kavanau apologized if she had given that impression to the committees and emphasized there was no intent to eliminate PCs.  There was a large community of very valid PC and PC/LAN networks in state government.  Senator O'Donnell inquired what database the PCs would be accessing.  Ms. Kavanau pointed out it would depend on what the system would be used for.  Ms. Case added the issue was one of analyzing the situation.  PCs could be used as a work station off any system or as a stand alone unit.  The PCs were not as likely to go away as a larger computer system in a consolidation effort.  Either way, they will still require some support and was an area without a lot of management or control in state government.  The PCs will most probably be used predominately as an intelligent work station with the ability to access information off a host computer.

 

Mr. Spitler asked if the state agencies scheduled to have microcomputer support had budgeted for the same.  Ms. Kavanau said the budget division had assured them there was enough funding in those agencies to pay for the services.  Mr. Spitler questioned if the agencies had provided detail to DDP based on what their projected needs were and DDP then priced the needs out.  Ms. Kavanau apprised Mr. Spitler the recommendations had been based on the information system's plans.  The actual allocations had been performed by the budget division.  Mr. Spitler requested detailed work sheets from those agencies who will be using the microcomputer support.

 

Ms. Kavanau referred to enhancement 701 training to support the new ES/9000.  The state invested in a new mainframe computer which had been installed in January of 1992.  She desired continuance of some highly technical training for the ES/9000. 

 

Mrs. Evans commented she was delighted to see statewide E-mail which was a wonderful device.  She inquired if all agencies would be able to communicate with all other agencies through the use of E-mail when the system was fully operational.  Ms. Kavanau responded the advantage to this particular software would integrate existing E-mail systems rather than cause replacement.  It was envisioned that in two-four years most of the primary agencies would be connected and the balance would be phased in. 

 

Enhancement 702 contract services was the Master Services Agreement.  Ms. Kavanau advised this was a pass-through number only which represented the authority DDP would have to contract with vendors on behalf of the requesting agencies.  The assumption was this $1 million was in another budget and will pass through this budget.  Ms. Kavanau clarified there were many agencies creating contracts with vendors outside DDP which has created many difficulties for state government.

 

Under enhancement 704, Ms. Kavanau summarized there were approximately 30 PCs in the existing DDP Systems and Programming Division for which 486 upgrades had been requested.  Enhancement 705 was in direct response to the Wildlife Division's LISA system.  As was painfully aware, systems have not been developed in the best of fashions.  Ms. Kavanau advised in her opinion one of the most critical factors was making sure the designer and developer had the skill to elicit the information on an ongoing basis from the user in order to build the correct system.  The joint application development was a technique devised to train developers to get that information.  In the past, the user would define what they thought they needed and the programmer would develop what they thought they heard and several months later a program would be developed which was not what was required.  This technique would allow the state to avoid very expensive rework and was well worth the investment.

 

Ms. Kavanau stated enhancement 712 was the result of a consolidation into this organization from Waste Management and Emergency Management Support.  The federal government had provided some computer equipment for the Department of Environmental Protection.  This budget will provide the staff required to utilize the equipment as well as to oversee the integration of the OASIS emergency management system into a statewide communication network and to provide coordination of the many state emergency information systems.  Four positions had been requested, two to design, develop and implement the environmental protection system on the hardware which had been provided by the federal government.  Another position, communications officer, would coordinate the many state emergency information systems and a systems administrator to integrate what had been developed on OASIS and integrate it into the statewide network.  At the present time, the systems were separate and had created an inefficient utilization of resources.  Senator O'Donnell asked where the $170,000 originated.  Ms. Kavanau replied the funds were coming from the federal government, the FEMA agency.

 

Mr. Dini inquired how much of the funding relates to the OASIS project.  Ms. Kavanau understood it was strictly for the personnel cost of a system administrator.  Mr. Dini asked what the funding was and how long it would be before the project was finished.  Ms. Kavanau replied she was not that familiar with the project.  Mr. Dini requested a written response to his questions, the total cost and time frame for completion.  Ms. Matteucci stated she would provide that information.

 

INFORMATION PROCESSING SERVICES - PAGE 275

 

Ms. Kavanau pointed out this budget was formerly the DDP Facility Management Division and was the state's "central" data center.  She drew the committees' attention to the fact the personnel expenses appear higher because full staffing was assumed.  There were several vacancies in FY92.

 

Chairman Arberry referred to the equipment line item and requested  explanation.  Ms. Kavanau replied this was primarily the repayment on the new ES/9000, the FY94-95 figure was significantly higher than FY92 because payments on the computer did not begin until mid-fiscal year 1992.  Chairman Arberry asked that a breakdown be provided to staff. 

 

The state's mainframe will require some upgrading to accommodate the Welfare Division's added caseloads and Taxation's new automated collection system, Ms. Kavanau told the committees.  The costs were reflected in Maintenance 200 and related to expanding main memory and storage capacity in computer and related expenses. 

 

Senator O'Donnell inquired if the upgrading had taken into consideration a hardware purchase for the necessary disk space in order to prevent degradation of the existing system.  Ms. Kavanau replied affirmatively and Ms. Case could provide an explanation.  Ms. Case remarked every year prior to the budget process DDP tried to estimate through their customers what their growth had been and what any projected growth would be.  From that estimation, the amount of disk space and memory capabilities had been established.  That information had been plugged into the budget figures.  Welfare has had some significant growth as well as Taxation and the state-wide E-mail growth had been incorporated.  Senator O'Donnell inquired if the existing system would facilitate the transition from the old system to the new system.  Ms. Case said it would.  It was difficult to estimate the amount of disk space which would be required through the consolidation, but the issue was the amount of disk space which could be added over a period of years.  The details of the systems were unknown, but Ms. Case stated she was comfortable the system was able to be expanded and upgraded.  Senator O'Donnell requested a personal tour of the facility.  Ms. Case replied he could anytime.

 

Ms. Kavanau explained decision item 581 represented the costs associated with upgrading the main frame computer ES/9000 and to accommodate the development of Welfare's new NOMADS system, which was in addition to those costs just discussed.

 

Ms. Kavanau proceeded to enhancements 701 which was the disaster recovery plan.  While the central data center had extensive backup and restoration policies and procedures, it did not have a disaster recovery plan in place.  Ms. Kavanau stated this was a significant weakness.  As data was centralized, the Information Processing Services Bureau must be able to respond in case of disaster or failure.  Two items of cost were included.  First was the use of a consultant to inventory statewide risks and needs, identify preventative measures and produce documented specifications which would be used to search for and select an alternate site or "hot site."  The hot site will serve as the state's data center in case of emergency.  The second item of cost was the purchase of specialized software to automate the tracking of the thousands of state information technology assets.  This software was a critical component of a disaster recovery program and would significantly enhance the ability to track warranty and replacement issues.

 

Mr. Spitler asked if this was identical to phase 1, an attempt to identify what currently existed in the system.  Ms. Kavanau replied that was correct.  Mr. Spitler inquired what the total long range cost would be for a fully implemented disaster recovery program.   Ms. Kavanau responded she did not know the cost because she knew the program would not be recommended during this legislative session.  A couple of consulting firms had been contacted and they provided the agency with a plan to break the program down into more palatable pieces.  What was before the committees was strictly the perspective from DDP, from those customers directly related to the state's data center.  The second phase would include inventorying the balance of the state agencies.  When the time comes to cost out the program for the next biennium, it would have to be determined what functions state employees were able to do and what would have to be contracted outside.  The cost would vary according to how much vendor time was used and how expensive that vendor was.

 

Mr. Spitler inquired if the disaster recovery plan was being considered for the existing system, and if so, would more funding be required when the new system was implemented.  Ms. Kavanau replied no, phase one must be completed in any event.  The state mainframe had its own customers and phase one only addressed those customers.  Mr. Spitler stated he was concerned about what the long range cost would be.  He requested an analysis at a later time of the total cost in other jurisdictions to complete a disaster recovery plan.  Ms. Kavanau pointed out there was a large compatible mainframe in Clark County.  DDP had an excellent relationship with Clark County and they had a volunteer reciprocal arrangement with them.  She would like to see a statewide disaster recovery program and there has been strong interest in such a program.  Tremendous savings could be realized if all or most of the public jurisdictions were part of one plan.

 

Senator Raggio inquired if the recommendation of $45,000 was the cost of the consultant.  Ms. Kavanau replied yes.  The figure was a direct quote from a company out of Las Vegas, but several consultants had been contacted and this was an average amount.  Senator Raggio asked if the consultant would devote his attention to the disaster recovery program.  Ms. Kavanau responded yes.

 

Ms. Kavanau referred to the enhancement 702 training category.  She explained the funding was for the continuation of training in the use of the ES/9000 mainframe computer.  The same type of training had been previously addressed in the ITS budget, and this funding was for systems training.  Chairman Arberry pointed out there was funding for only part of FY93 and none recommended for FY94.  Ms. Kavanau explained that was correct.  When all the figures were in, there was not enough funding for FY94.  Chairman Arberry called attention to Ms. Kavanau's statement the bid from IBM included $130,000 credit for training staff at the user agencies.  Ms. Kavanau replied when the ES/9000 had been purchased, a credit of $130,000 was included for training.  Ms. Case added all the credit had been expended plus some additional funding out of the budget for FY92.  The training was focused on the immediate needs of converting from the old system to the new system.  Some initial security and applications programmers' training had also been completed.  However, Ms. Case stated the bulk of the training funds had not been used as fast as desirable and the funding was not included during the second half of the biennium.

 

Senator Jacobsen inquired if most of the training was done in-house and how many were in each class.  Ms. Case responded in-house training was preferable as it was less expensive.  The average number of students allowed per class was 14.  One of the IBM classes had been held three different days, each accommodating 14 students.

 

Ms. Kavanau referred to enhancement 703, the costs associated with replacing magnetic tapes which had aged beyond their shelf life.  The funds had been budgeted in FY92, but there had not been enough time to get to the project.  The funding has again been requested for this purpose.

 

Enhancement 704 was an automated problem-tracking software, Ms. Kavanau advised.  Even without the consolidation, manual tracking had become almost impossible and customers were not getting the response they need.  Ms. Tiffany requested performance indicators be built into the budget regarding tracking.  Ultimately, it would be desirable to see the cost go down and there would be no way to assess that information unless there was an indicator.  Ms. Kavanau emphasized that was a good idea and an indicator would be implemented.

 

Ms. Kavanau stated enhancement 705 was funding to replace the existing Halon fire suppression system.  The EPA had identified Halon as a hazardous material and the Public Works Board had recommended removal.  Enhancement 706 was for the replacement of broken furniture.  Mr. Price inquired if Prison Industries was used for furniture replacements.  Ms. Kavanau replied affirmatively.

 

In closing, Ms. Kavanau stated it was necessary to permit ITS personnel to consult early with state agencies before budgets were formulated.  Because ITS was a fee-for-service organization, including consulting services, agencies resisted advice because they were not budgeted to pay for the ITS consulting service.  As a result, the data processing professionals had not become involved early enough.  Meanwhile, agencies may be traveling down the wrong path.  She strongly recommended the creation of a mechanism whereby agencies could receive the technical advice they need when they need it.

 

Chairman Raggio asked if the recommendations in the budget and the suggestions presented today by Ms. Kavanau were followed, where would the state be two years from now.  He also asked what assurances she could give regarding the development of the master plan and consolidation.  Ms. Kavanau emphasized there was every reason to believe a concerted, consolidated biennial state plan for strategic direction and information technology would be in place in two years.  There was already a biennial state plan which reflected where the DDP and the desires and needs of state agencies would be integrated into an overall plan.  The plan in 1995 should include where the state was going, what was being attempted and a reasonable timetable.  Ms. Kavanau stated there would be some broad-ranging standards which the DDP had been attempting to develop with other state agencies.  The difficulty was there was no one decision-making agency.  The consolidation of personnel should occur immediately upon approval by the legislature.  Senator  Raggio inquired if the consolidation would be feasible with the positions as outlined in the plan.  Ms. Kavanau pointed out it was reasonable to expect the numbers given to be achieved if the consolidation of a majority of the data centers occurred.  She asserted it was a very doable plan and she was convinced it was the direction the state must take.  There was some hesitation as to the timing being exactly right.  Common platforms such as the Employment Security Department and NDOT would be looked at first.  These agencies use the same type of equipment as DDP and therefore, they would be the most logical to look at first from a technical perspective.  In two years, Ms. Kavanau expected to see significant data center consolidation.  The state had kept up with the modernization of equipment and the recommendation by the governor was adequate, though not generous.  The software development would be the slowest as it was the most expensive.  There would be savings through the consolidation over the long term, but it would be expensive.

 

Mrs. Williams asked if there was a mechanism built in which would accommodate growth in all agencies.  Would there be enough personnel to handle the added growth and had it been factored in.  Ms. Kavanau replied the added growth would be hard to measure.  Based on what was known today, what had been projected was a reasonable figure, without knowing what the legislature would approve.

 

Senator Jacobsen remarked two years ago there had been concern about the proliferation of computer equipment in all the state agencies.  He asked if the space or back-up electrical supply was adequate.  Ms. Kavanau did not know if the computers themselves would be transported to a new location or if the applications on those computers would be transferred and the older equipment sold.  There would not be an adequate answer until an analysis was completed.

 

Senator Callister mentioned he shared the healthy skepticism of the other committee members.  He commented if the consolidation did not take place, there would be no centralized authority, no standardization, no statewide plan, strategy or design, and he speculated there would be more costly mistakes.  He asked what would be the best way to encourage the other agencies to pre-plan, using the resources of DDP, to avoid the problems of the past.  He wondered if that could be accomplished using a system of other than fee-for-services to encourage the agencies to participate.  In any event, there would be no savings to the state at all without some form of consolidation.

 

Mrs. Evans acknowledged there had been a great deal of discussion regarding funding, movement of equipment and personnel from one place to another, etc.  She called attention to the fact no mention had been made of the human element involved.  There did not seem to be any plan to discuss the mitigation of displaced workers or disruption of the work force and how the personnel would make adjustments to their new work assignments.  It appeared the workers were being treated without due care and much like interchangeable parts.  She was optimistic about the future, but she did have concerns about the agencies involved and their personnel.  Ms. Kavanau replied she was hopeful the Departments of Administration and Personnel could create a fair and equitable program where attrition would take care of most of the personnel losses.

 

INFORMATION DELIVERY AND CUSTOMER SERVICES - PAGE 282

 

Chuck Slavin, Director of the Telecommunications Division, explained information delivery was what most considered telecommunications.  The budget as presented represented the telecommunications division as it stood that day, but did not include the telecommunications personnel who had been allocated into the contract services budget.

 

Referring to the revenue portion of the budget, Mr. Slavin remarked the largest line item was telephone, watts and toll which was derived from all state agency direct distance dialed calls, dedicated circuits released from interexchange carriers, AT&T, Sprint, Nevada Bell, Centel, etc. and revenue derived from a surcharge on credit card phones.  The personnel expenses consisted of two state operators who receive calls from the general public and connect them with the appropriate state agency, one service representative and one clerk.  The clerk essentially replaces two half-time state operators in Elko who had been terminated.  Mr. Slavin stated there had been two additional positions in the budget.  As part of the reorganization, his position and another had been relocated to the contract services budget, but had since been returned to another area of this budget.  Mr. Slavin called attention to page 282 of the Executive Budget, the expenditures category, under line item data processing, the figure of $133,306 represents two staff positions and miscellaneous operating expenses which would apply to Mr. Slavin and one other.  Ms. Kavanau added this area was not particularly clear as people would be moving in and out between Information Technology Contract Services and Information Delivery Systems as needed.  The personnel in charge of budget account 1355 would have other employees available to them when needed and those employees would be drawn in and out of the account.  Ms. Kavanau clarified Mr. Slavin's position and that of another employee would be charged to Information Processing Services but they would also be on the personnel side in the Information Technology Contract Services budget.  This particular budget will swell and decline depending upon customer needs.

 

Senator O'Donnell asked if Mr. Slavin had the same type of computer as the ITS employees.  Mr. Slavin explained the agency had just recently acquired an RS/6000, an IBM mini system to use for all state agency billing and to track service order activity and telephone equipment assets.  Senator O'Donnell inquired when the computer had been acquired.  Mr. Slavin replied last biennium.  Senator O'Donnell questioned if the staff would be migrating back and forth between the ITS budget and this budget would they have to be trained on both computer systems.  Ms. Kavanau answered that was correct.  Ms. Matteucci pointed to Exhibit C, example D, which summarized the telecommunications positions, and added those positions were now in the ITS budget.  This was done to prevent confusion as to the location of personnel.  If the reorganization was approved as it now existed, those positions would move into this budget, Information Delivery and Customer Services.

 

Mr. Price offered his compliments to the state operators and said they were very pleasant to deal with.  He inquired if the telecommunications system at the legislature was the same as other agencies.  Mr. Slavin replied that was correct.  Mr. Price asked if price comparisons had been done with Sprint and some of the other telephone companies to obtain cheaper services.  Mr. Slavin stated considerable attention was given to the overall network costs and configurations.  In terms of long distance service, competitive bids had been put out approximately 18 months ago and there was great success in reducing costs associated with long distance calls, not only for direct dial, but for credit cards as well.  Mr. Slavin pointed out there was very little correlation between the cost and what was billed to state agencies, which was part of the reason for going to a new billing system to better associate the costs of doing business with the requisite revenue derived to support the operation.  Until the new billing system comes on line, there will likely be charges from Carson City to Las Vegas, for example, which were not totally representative of what the actual costs were.

 

Mrs. Williams asked why the Watts line, which had been available to legislators some years ago was not available now.  She would rather deal with the Watts line than having a telephone allowance provided.  The allowance was taxable and does not fall in the same category as per diem, even though the allowance was used to call constituents.  She reiterated why the Watts line was not available.  Mr. Slavin knew of no reason why it was not available and suggested it might be a operational issue rather than a technology issue.  Perhaps a change in the way business was conducted would solve both problems.

 

Chairman Arberry asked if there was any public testimony on the previous budgets.

 

Nile Carson, Deputy Chief of Administrative Services for the Reno Police Department, stated he did not specifically oppose the consolidation as a whole, but there were concerns with the consolidation of data processing in the area of the DMV/NHP computer system.  There were many resources involved and expended on the existing system to include participation in the governor's implementation advisory board and the technical implementation teams to make the systems work.  Deputy Chief Carson informed the committees, in response to a question from Senator Raggio, the technical teams responsible for criminal histories have just finished imputing all the Nevada Revised Statutes so criminal dispositions could be tracked.  Additionally, the same team had met with judges, prosecutors and local agencies in the states who have agreed to enter their own dispositions for tracking.  Deputy Chief Carson stated the main concern regarding consolidation was the reduction of staff and dilution of services.  He felt the new systems would not come on line as quickly and fully as necessary.  There was also a concern regarding timeliness.  At the present time, background checks on persons being arrested could be carried out with great speed.  The officer on the street must have immediate access to criminal histories in order to determine if the right person was at hand, should more questions be asked, etc.  The timeliness of the system was a major concern with consolidation.  If the speed becomes diluted, there would be increased problems with the officer on the street. 

 

Senator O'Donnell asked if the information available to police officers during a traffic stop was confidential or public information.  Deputy Chief Carson stated criminal history was confidential.  Senator O'Donnell asked if there was a separate computer for criminal histories.  Deputy Chief Carson stated there was a separate computer which acted as a switch for communications from this state through NCIC and a separate computer for criminal histories.  The NHP and the UNS agencies were both exempted under NRS 242 when the DDP was created and operate under separate mainframes from the rest of the state.  Senator O'Donnell asked if that was due to confidentiality and the highly sensitive data involved.  Deputy Chief Carson stated he did not know and had been unable to research the issue thoroughly, but some types of information would be severely restricted.

 

Senator Raggio asked what the effect would be on the officers and others needing immediate information.  Ms. Kavanau pointed out there should be no effect at all.  There were a number of customer agencies, for example the Welfare Division, which have much confidential data.  The real issue was how the system was installed and utilized.  There was a federal regulation which had strict control over confidential information.  What needed to be ensured was not only responsiveness but security.  It does not matter where the computer is located, what was important was the security procedures in place and the responsiveness of the personnel involved.  Senator Raggio understood Deputy Chief Carson's concern was the limited number of people involved.  Ms. Kavanau explained it had not been decided whether the computer and system should be transferred into the facility, eliminated, or the applications transported outside.  What she felt was important was whether the system should be located where the personnel was located.  Senator Raggio inquired if this response addressed Deputy Chief Carson's concerns.  Deputy Chief Carson responded the greatest problem was the dilution or lack of people.  There were changes which should be made to the system, but had not been made due to lack of personnel.  The system had the potential of being diluted even further.  Applicant fees to fund and the absolute authority over the type of software used were other concerns.

 

Mr. Perkins recognized and shared the same concerns with Deputy Chief Carson and the fact the officer on the street would not receive necessary information in a timely fashion.  However, he did not feel the level of service being received today would be affected.  Deputy Chief Carson stated he only raised the possibility because of the many times the state switch was down for maintenance, especially during graveyard shifts.  He also was concerned about input of information.  There was a timeliness issue because of the wait for printouts.  Mr. Perkins stated the responsibility for data input was the responsibility of the local entities, and he suggested that was where the concern should lie.  Ms. Kavanau stated the DDP was not where Deputy Chief Carson's concerns should be.  The delays were being experienced with the DMV.

 

WILDLIFE - PAGE 1603

 

William Molini, Director of the  Department of Wildlife, explained the department was responsible for the protection, maintenance and enhancement of Nevada's diverse wildlife resource.  The wildlife in Nevada included some 700 vertebrate species, including 129 species of mammals, 367 species of birds, 134 fish, 54 reptiles and 15 amphibians.  The agency's mission was to protect and manage these many species of wildlife for their aesthetic, scientific, educational, recreational and economic benefit to the people of the state of Nevada.  Mr. Molini remarked a substantial portion of the department's work was directed toward the approximately 90 species of wildlife consumed through hunting, fishing and trapping.  Approximately 90 percent of the $14 million budget was derived from user fees and taxes directly generated by sportsmen.  He pointed out the department was very involved with the management of all wildlife and their habitats as wildlife was believed to be a key indicator of environmental quality.

 

Mr. Molini said the department delivers a comprehensive program of wildlife management, including game management, non-game management, fishery management, wildlife and boating law enforcement, habitat protection, maintenance and enhancement, and public education and information.  There are three fish hatcheries and one rearing station statewide which annually produce in excess of two million fish.  Thirteen wildlife management areas are managed consisting of approximately 350,000 acres, some of which was federal land which had been withdrawn for wildlife purposes.  The department maintained a substantial fleet of vehicles which included four-wheel drive trucks, snowmobiles, fish trucks, dump trucks, other heavy equipment, a large number of boats, two jet ranger helicopters and other equipment which provided essential tools in carrying out the mission of the department.

 

The oversight of the department is provided by the Board of Wildlife Commissioners, Mr. Molini added.  The nine-member board established and promulgated regulations and was appointed by the governor for a three-year term.  Four members represent sportsmen, two members represent the general public and one each represent ranching, farming and conservation.  In addition, there were 17 county wildlife advisory boards appointed independently by their respective county commissions.  These boards provide input to the commission regarding hunting and fishing seasons and bag limits.

 

Chairman Arberry asked under the reorganization plan what benefit the hunters, fisherman and general public derive from the combination of the two agencies.  Mr. Molini replied the proposal was to combine the current Department of Wildlife with the current Division of State Parks and place the new Division of Parks and Wildlife under the Department of Natural Resources.  Mr. Molini believed the intent in that move was to enhance operational efficiency.  There was potential for efficiency, but he had concerns whether it would diminish the department's capability to carry out its job.  It would depend on how the enabling legislation was crafted and under the current organizational chart, Mr. Molini did not see any inherent diminution of the department's ability to do its job.  He believed it was important when framing legislation, the license and fee revenues be identified to remain in the wildlife account and not be diverted.  If the revenues were diverted for other purposes, such as park purposes, the federal reimbursements would be jeopardized.  These reimbursements make up approximately 37 percent of the department's budget.  It would be difficult to say what amount of enhanced delivery of service or efficiency would occur, but there was the potential for savings.

 

Mr. Marvel inquired what was the function of the two boards, Wildlife and Parks.  Mr. Molini replied under the most recent organizational charts, the proposal would essentially eliminate the Board of Wildlife Commissioners and the Park Advisory Board and wrap them into a Natural Resources Board.  This board would retain regulatory authority which the Wildlife Board now has.  Mr. Marvel asked if the boards would be combined or if one would be eliminated.  Mr. Molini answered the initial intent was to combine the two boards.  However, most importantly in the most current diagram, the Natural Resources Board must retain some regulatory authority.  He remarked it was important to the constituent groups, the hunters and fisherman who provide most of the revenue, to have a board to speak to who had regulatory powers concerning hunting and fishing seasons and regulations.  Ms. Matteucci added there were no specifics for combining the two boards, but it was imperative the Natural Resources Board have regulatory authority.  The specific membership on the Natural Resources Board had not yet been determined and it would need to be discussed with the legislature.  Input would also be desirable from the hunters and fisherman concerning regulatory issues.  Mr. Marvel commented the Natural Resources Board appeared to control water rights from the appearance of the reorganization chart.  Ms. Matteucci pointed out the Natural Resources Board answered to the director, but would not be making water allocation decisions.  Mr. Marvel inquired if the duties of the Natural Resources Board would be spelled out.  Ms. Matteucci stated it would be in the reorganization bill.

 

Mrs. Williams asked if there was an indication of any additional endangered species in the state.  She pointed out there had been a major economic impact regarding the desert tortoise.  Mr. Molini explained Nevada was uniquely situated in that the state was ranked fifth nationally in the number of currently threatened and endangered species and a candidate for species listed as threatened or endangered. 

 

Senator O'Donnell called attention to page 1606 of the Executive Budget, the personnel line item, and the governor's recommendation for zero expenses.  Ms. Matteucci explained positions had been requested but none had been recommended in the enhancement category.  She referred the senator to the base budget on page 1604 of the Executive Budget where 190.28 positions had been recommended.

 

Senator O'Donnell referred to the performance indicators and the number of fish planted in FY92.  He pointed out in FY93 there had been a decrease of almost 727,000 fish.  Mr. Molini indicated the figures reflected a difference in stocking.  On an experimental basis, the department was stocking trout in Lake Mead.  Larger, catchable fish must be stocked due to the voracious striped bass population.  That situation reflected less numbers of fish.  In other waters, large numbers of fingerling fish were stocked which might average ten fish to the pound as compared to two catchable fish per pound.  It was a decrease in total numbers, but not in pounds of fish.

 

Mr. Molini directed the committees to revenues.  The governor had recommended $600,670 in general fund support, which had been recommended by the SCR 36 interim committee of the 66th Session which studied funding for the agency.  In the past biennium, funding was available to support the non-game program and the conservation/education program as services were delivered to a broad range of people other than sportsmen.  Because of the broad state policy that certain classes of people such as juniors/ seniors/handicapped were given low cost, and in the case of Native Americans, free licenses, there should be some reimbursement for the lost revenue.  This was essentially the concept of the general fund revenues in the department and constitutes somewhat over four percent of the total budget.  There were two major categories of federal funds, Mr. Molini continued, the Pittman-Robertson federal aid and wildlife restoration and Dingell-Johnson federal aid and fisheries restoration.  Those funds were derived by a surcharge on firearms, ammunition and fishing tackle, some motorboats and some boating fuel tax.  The funds were redistributed to the states on the basis of the size of the state, the number of paid hunting and fishing licenses, which made up a fairly substantial portion of the department's revenue.  That money, however, must be matched 25 percent state to 75 percent federal money.  The other revenue category had several sources of funds, including licenses and fees, which had been estimated at $4.1 million.  This estimate had been made nearly one year ago and it was thought to be a conservative estimate.  $4.4 million had been collected in licenses and fees during the previous year, but there had been some unique chronological circumstances facing the state.  Due to the six years of drought, the mule deer population was going into the winter period in fairly poor condition and since then there had been substantial snow accompanied by cold temperatures.  The major deer herds in northeastern Nevada, where the snow had been substantial and temperatures of -30( were recorded at Wildhorse Reservoir, had been affected.  It was anticipated there would be a substantial decline in the deer herd over the winter period.  Mr. Molini pointed out in 1988 there had been a high in the number of tags issued, but in 1992, the number of tags issued was down 43 percent.  Most states were not on the restrictive quota system Nevada operated under and they sold tags to match the demand.  Nevada was unable to operate that way because in 1975 it had been decided to develop a quota management system which was renown nationally as one of the better management systems for big game in the country.  However, the system affected the revenues generated.  Mr. Molini indicated there was the possibility of another 50 percent decline in tags between last year and this year.  Therefore, the revenue projected at $4.1 million in licenses and fees would not come in at the projected level.

 

Other major items in the revenue category were gifts and donations of $300,000, a mining fee assessment of $500,000, the obligated reserve of $1.1 million and the unobligated reserve of $850,000.  Mr. Molini said the agency transfers related to the Department of Tourism, $200,000 for the efforts by the Department of Wildlife to enhance tourism.  There was justification for this transfer to the tune of $150 million in expenditures surrounding hunting, fishing and wildlife-associated recreation.  Also included in those agency transfers was $100,000 from the trout stamp account, which was for operation of the hatchery system.  $1 million from the boat account was simply a transfer to pay salaries for the positions in boating safety, in an effort to keep the salaries in one budget account.  The employees in the boating safety positions work both in boating and wildlife programs.  In addition, park and wildlife bonds amount to revenues of $200,000.

 

Senator Raggio stated he did not have the same detailed information in the new budget format and asked for a breakdown of the "other" revenue line item, in particular, the difference between $4.5 million actual in FY92 to the projections of $7.5 million in FY94-95.  Mr. Molini responded there was a substantial amount of money from other sources.  Senator Raggio asked what amount constituted license fees for the two years.  Mr. Molini replied $4.1 million each year and last year, the actual revenue received was $4.4 million.  The remaining major revenue sources were:

 

 

                                                  FY93-94           FY94-95

Application fees, the $5

 nonrefundable fee                              $  307,650  $  357,650

Gifts and donations                                300,000     300,000

Mining assessment fee                        500,000     500,000

Miscellaneous (interest on deposits,

sale of surplus property, duck

stamps, etc.)                                      277,483     296,390

Obligated reserve                         1,128,791  1,128,791

 

Mr. Molini added the gifts and donations generally come to $300,000 or more each year.  The obligated reserve included fees remaining in the reserve from duck stamps, Nevada Bighorns Unlimited, and other items of obligated expenditures.  The obligated reserve also appeared in the expenditure category.  Senator Raggio inquired if those figures were realistic for the biennium.  Mr. Molini expressed the same concern and had looked at the figures carefully.  However, he felt the figures were reasonable.

 

In terms of expenditures relative to personnel, Mr. Molini explained the department was down somewhat from the work program and what had been requested.  There was some impact from reorganization on the number of positions authorized.  Currently, the department was authorized 205 positions, but had never been at that level due to fiscal constraints, the hiring freeze, etc.  Reorganization would authorize 7.5 additional positions.  At the present time, the department maintained its own mountaintop repeaters and its own communication network for those employees who were scattered from Searchlight to Mountain City operated by two communications technicians.  Those technicians would move to the new telecommunications section in the ITS budget.  The boat registration function would move to the DMV and there would be 5.5 positions which would move with that function.

 

Mr. Marvel called attention to the 5.5 positions to be moved and asked if their sole function was to register boats or were there other duties which would have to be assumed by someone else.  Mr. Molini answered their primary function was to register boats, but certainly other functions were performed by those employees and those duties would have to be absorbed.  Mr. Marvel asked if Mr. Molini would provide that information at a later time.

 

Mr. Molini acknowledged the balance was tight for this budget.  He called attention to the enhancement category on page 1606 of the Executive Budget.  The personnel expenses line item shows a request for five positions and one of those was for boat registration.   The remaining four positions work with the mining industry.  Mr. Molini commented during the last session a bill had been introduced to generate the revenues for those positions and had the full support of the mining industry.  He had testified separately before each of the money committees about the benefits of adding two biologists and three wardens.  There was one biologist assigned to one region and it was desirable to have two more biologists for each of the other regions to work directly with mining and environmental impact statements and other mining-related issues.  Mr. Molini stated he had been unable to convince the legislature the funds should be used for these positions and the money went into the revenue category.  He repeated his request for the funding for those positions because an agreement had been reached with the mining industry to provide those positions.  The bulk of that revenue from this last year was now carried in the obligated reserve.  Approximately $150,000 of the $500,000 had been expended.

 

WILDLIFE - BOATING PROGRAM - PAGE 1611

 

Mr. Molini introduced Terry Crawforth, Deputy Director of the Department of Wildlife, and asked him to review the budget.  Mr. Crawforth explained the Department of Wildlife was the boating agency in the state of Nevada.  The boating section registers and titles boats, provides for boating safety controls, boater education programs, develops boating access sites and repairs existing sites.  A program had also been entered into to provide navigational aids to support safer boating on state waters.  Mr. Crawforth advised funding originated from the U.S. Coast Guard, a federal grant to all the states.  In addition, the agency received titling and registration money, a portion of the state gasoline fuel tax, Wallop-Brough federal dollars for boating access and a few dollars from gifts, excess property sales, interest, etc.  The budget for this biennium was basically the same program as had been presented over the last several years.  Mr. Crawforth pointed out there were some elements in the enhancement categories which addressed operating and equipment, which primarily reflected the number of vacancies and the funds which had not been used.  The majority of those positions have now been filled and the operating costs would be greater.

 

Mr. Crawforth referred to the building construction line item on page 1612 of the Executive Budget in the enhancement category.  During the last biennium approximately $800,000 of boating access projects were completed.  This activity would continue at the present rate and cost.  The usual approach was to contract with local governments to develop boating access sites, however, the federal government and state park service had been enlisted to help develop a number of sites for this coming biennium.

 

One major area which had already been mentioned by Mr. Molini was the transfer of boat registration and titling to the DMV which constituted 5.5 positions, three in Reno, 2.5 in Las Vegas.  Mr. Crawforth pointed out the department took in approximately $1.1 million from those registrations and titles.  Half of that amount was returned to the county school districts and the DMV would retain approximately $350,000 of those funds for their expenses and the remainder of somewhat over $200,000 would be returned to the Department of Wildlife for enforcement and education.

 

Mr. Marvel called attention to the county's share of the registration fee and asked if it was taken out ahead of time.  Mr. Crawforth replied the counties had not been directly involved with the registration of boats.  Two sessions ago, the legislature changed the laws concerning boat registration and property taxes on boats.  These charges were combined into a registration fee which the Department of Wildlife collected so a boater would not have to go to the county assessor to pay his property tax, the Department of Wildlife to pay his registration fees and to the DMV to pay the registration on the trailer.  Mr. Crawforth explained in order to make it easier for the boater, the program collects all the monies now and based on a certain formula, sends the counties their portion which goes directly to the school districts.  Mr. Marvel asked if that would occur with the reorganization.  Mr. Crawforth replied yes, the only difference would be the DMV would collect those funds and send them to the counties.

 

Mr. Price commented the department had made it easy for the consumer by making licenses available in stores where fishing and hunting supplies were purchased rather than having to go to a public office.  Mr. Crawforth acknowledged there were licensed agents who sold the majority of the hunting and fishing licenses.  Boat license agents issue a ten-day operating certificate which allows the boater time to get to the Department of Wildlife to have the boat titled and registered.  Mr. Price stated his concern was by moving this portion of the department to the DMV it would be inconvenient for the user.  Mr. Crawforth stated he did not feel this would make much difference in boat registration. 

 

Referring to the building construction item and the building of launch sites, Mr. Price stated he was not aware this was a function of the department and asked how the request for site construction was arranged.  Mr. Crawforth indicated for instance the ramp at Lake Mead which had recently been constructed had been requested by the federal government and had been paid for with a combination of federal funds and state fuel tax dollars which had come through this agency.  Small sites in rural Nevada had been installed and the department was now working with state parks for a boat landing at Cave Rock.  Mr. Price inquired if the problems launching boats at Lake Tahoe had been resolved.  Mr. Crawforth responded the permits were in progress at the Cave Rock landing and there would be an improved facility, the first phase being completed by May, and a launch site expanded to twice its present size which should be done by the end of this summer. 

 

Mr. Price asked if funds were received from private organizations such as Ducks Unlimited.  Mr. Molini answered funds were received into the Department of Wildlife, but not into the boating program.  In fact, the Nevada Bighorns Unlimited funded a full-time position located in Las Vegas.  They pay for most of the trapping and transporting operations, always in excess of $100,000 per year.  Approximately $50,000-$60,000 comes from the Carson Valley Chukker Club and the Nevada Chukker Foundation out of Winnemucca.  The Rocky Mountain Elk Foundation also made contributions. 

 

Chairman Arberry requested an explanation of the transfer to parks line item under the expenditure category.  Mr. Crawforth advised this was a continuation of the repairs and improvements at Cave Rock landing as well as some improvements at Sand Harbor.  Chairman Arberry pointed out Mr. Crawforth had said this was a continuation of repairs, but the recommendation was for one year only.  Mr. Crawforth replied the first phase of the project was done this fiscal year.

 

Ms. Tiffany understood there was a fairly sophisticated application system for the Department of Wildlife.  She asked when the duties were transferred to the DMV, would that application and hardware be transferred in total or in part.  Mr. Crawforth replied the boat registration and titling system was a model for the United States and most states have a system similar to Nevada.  This system was on the DDP mainframe and Mr. Crawforth assumed it would move to the DMV.  Ms. Tiffany inquired if there were some functions which would be lost due to the move and what would be the impact.  Mr. Crawforth replied no, funds would be received from boating registration fees to deal with boating safety and education.

 

WILDLIFE ACCOUNT - TROUT MANAGEMENT - PAGE 1614

 

Mr. Molini said this budget could be simply described as being in good shape and paying off.  The bond used to build the new Mason Valley hatchery had been reduced to $100,000 per year to help with hatchery operations.  Approximately $400,000 per year was generated  from trout stamps, which funds were used to retire the bonds for trout management.  While the reserve was declining some and required close monitoring, Mr. Molini advised the committees the budget was healthy.  If that was the case, Chairman Arberry inquired, why had the operating expenses been reduced from $300,000 to $100,000.  Mr. Molini explained that was due to the declining reserve balance.  He indicated it was desirable to keep a sufficient amount in the reserve balance to pay the bond redemption in any given year.  The annual income from trout stamp sales should pay the bond redemption.  There had been some decline, although not precipitous, over the course of the drought.  Some of the northern reservoirs had dried up and fishing was not available, however, with the weather this winter, he felt there would be a resurgence and he was not overly concerned.

 

The hearing paused for lunch and upon the committees' return, Mr. Stevens pointed out the Legislative Fiscal Report had been distributed to all the members.  The report had just been completed and basically presented the general fund revenue estimates and the projected general fund balance as well as information on the capital improvement program and the rest of the governor's recommendations contained in the Executive Budget.

 

NEVADA TAHOE REGIONAL PLANNING - PAGE 1637

 

Cheryl Lau, Secretary of State and Chairman of the Nevada Tahoe Regional Planning Agency (NTRPA), commented the NTRPA was created at the same time as the Tahoe Bi-State Compact to regulate and control casino growth.  The major function of the NTRPA is to review approximately 38-40 Tahoe basin casino construction plans per year and to ensure their building modifications comply with the Nevada Revised Statutes.  Other functions include writing ordinances, offering advice to casinos and their attorneys regarding building practices in the basin and coordinating functions between the casinos and the Tahoe Regional Planning Agency (TRPA).

 

Ms. Lau referred to page 1637 of the Executive Budget and pointed out the most drastic change was a decrease of $6,000 in the general fund from the agency request of $10,000 to the recommendation by the governor of $4,000.  This $6,000 figure was used basically for the professional services of the contractor who reviews plans.   The $4,000 recommended by the governor was for clerical services, office supplies, rent, postage, printing and copying, ads, travel and telephone used by the plans reviewer.

 

Ms. Lau then referred to the enhancement category and the $5,000 figure in general funds.  This increase had been requested by the plans reviewer because the $10,000 in the category just previously mentioned would not cover the professional services of the plans reviewer and all the other services previously mentioned.  Ms. Lau recognized the state was under budget constraints, however, it was important there was no decrease in services due to the Bi-State Compact.  Ms. Lau commented Pam Wilcox from State Lands had assured Ms. Lau financial help would come from the State Lands budgets to defray the loss of the $6,000.  This funding would be used to provide the clerical support and the professional services being eliminated from the NTRPA budget.  Ms. Lau stated there would be no loss of independence from NTRPA, State Lands will provide the staff services and NTRPA will retain its autonomy as a board.  Ms. Lau remarked she had been assured by Ms. Wilcox the service level to the basin constituents would be the same or better with this working relationship.  The deputy attorney general for NTRPA was the same deputy assigned to State Lands.  The transition will be guided by the plans reviewer, she was very knowledgeable about the position and she would help with the shift.  Ms. Lau informed the committees if this transition does not work, she would be back before the committees in order to find a way to maintain that service for their constituents.  However, she felt this transfer would work.

 

Chairman Arberry inquired if NRS 278 would have to be amended to reflect the changes in the Department of Natural Resources.  Ms. Lau replied she did not believe so as the same concerns had been raised two years ago and it was felt an amendment would not be required if the agency was put under State Lands.  Pam Wilcox, Administrator of the Division of State Lands, explained the statute simply allows NTRPA to set up its own staff arrangements.  Up until the budget cuts in the mid-1980s, the staff services were in fact performed by the Department of Conservation and Natural Resources and it was only during the time period, between the 1980s and now, those services were performed by a contract employee.  Chairman Arberry asked how many applications had been received for the expansion of gaming and how many were anticipated for the coming biennium.  Ms. Lau stated she would get that information.  She was aware the plans reviewer scrutinized approximately 38-40 contracts; however, the more detailed contracts come under line item plan review fees in the base expenditures category at page 1637 of the Executive Budget.  This figure represented contractual expenses.  When construction plans are more detailed and beyond the expertise of the plans reviewer, NTRPA contracts with a private engineering firm and the casino pays the reviewing expenses which have been contracted out.  Chairman Arberry questioned when the plans were reviewed by the NTRPA staff or others, were the casinos charged for the service.  Ms. Lau replied affirmatively, this was the reasoning behind the $17,526 actual and the $19,000 work program.  The casinos pay for those more explicit plans.  Chairman Arberry inquired if there would be an increase in these services.  Ms. Lau responded there was an increase of $1,474 in the enhancement expenditures plan review line item.  She referred the chairman to page 1637 of the Executive Budget.

 

Ms. Wilcox indicated in the fiscal year just ended, the total for plan reviews brought in had been only $13,300, of which $11,526 was actually expended.  Therefore, the $17,000 should be adequate; however, if not, the monies do not come from the general fund and a work program change could be sought.

 

Senator Jacobsen inquired who was the deputy attorney general for the NTRPA.  Ms. Lau replied Mark Ghan.

 

Mr. Dini called attention to the narrative which indicated funding was available for taking over TRPA should one of the states decide to withdraw.  Ms. Lau stated if TRPA withdrew, it would appear the autonomy of the NTRPA would remain intact and this would be the legal stance taken by NTRPA.  She stated she could obtain a more specific legal answer from Deputy Ghan.  Mr. Dini explained to the members of the committee that NTRPA existed before TRPA, and when the TRPA compact was approved by Congress, NTRPA was substantially dissolved with the exception of the function to review casino plans.  The compact provided the casinos could only have limited expansion per year and would have to stay within the limits in place when the compact was formed.  It was an important agency to help the casinos obtain a fair chance in developing plans.  Ms. Lau clarified she was going along with the plan because the casinos must be assured there was no decrease in services, which would remain the same or better.  Ms. Lau stated she was comfortable with that after the reassurances received from Ms. Wilcox, there will be very close interaction between the chairman of NTRPA, Ms. Wilcox and the casinos to ensure the services are the same or better.

 

AIR QUALITY - PAGE 1507

 

Lew Dodgion, Administrator of the Division of Environmental Protection, explained the bureau of air quality operated programs on the control of air quality throughout the state.  In accordance with NRS 445.401-445.701, the federal Clean Air Act and the Nevada Administrative Code, regulations were adopted by the State Environmental Commission.  Mr. Dodgion explained NRS 445.401 declared it was the public policy of the state of Nevada and the purpose of the statute was to achieve and maintain levels of air quality to protect human health and safety, prevent injury to plant and animal life, prevent damage to property, preserve visibility and scenic, aesthetic and historic values of the state.  The bureau operates the complete air quality programs consisting of permitting, monitoring inspection, enforcement and planning in all counties except Clark and Washoe counties.  Clark and Washoe counties were responsible for the air quality programs within their boundaries with two exceptions; the counties may not regulate power plants which generate electricity by using steam produced by the burning of fossil fuels, and the state runs a mobile source control program, the automotive emission control program.  Assembly Bill 812 of the 66th session expanded the mobile source control programs operated by the state to include light duty diesel inspection and maintenance, heavy duty smoking vehicle programs and an alternate fuels program for the conversion of public fleets in the two counties to vehicles fueled with alternate fuels.  The Inspection and Maintenance (I&M) program operated in the two counties will be required to be changed slightly in Washoe County and changed substantially in Clark County due to the requirements of the federal Clean Air Act Amendments of 1990.  An enhanced I&M program would be instituted in Clark County because of the level of carbon monoxide pollution in that area. 

 

Mr. Dodgion remarked the bureau's programs were funded by a federal grant, by permit fees and a transfer from the pollution control fund maintained by the DMV as it was associated with the I&M program.  During this fiscal year and those in the past, the bureau has had general fund appropriations.  Permit fees were deposited into the general fund and a general fund appropriation returned those monies to the bureau.

 

The federal Clean Air Act Amendments of 1990 require that states charge sufficiently to run the mandated permitting programs and the fees be deposited into a dedicated fund to be used only for air quality control programs.  Mr. Dodgion maintained in the next biennium, a shift to fees would be requested and those fees would be placed into a dedicated fund; therefore, there will no longer be any general fund appropriations for the program.  A bill draft had been requested to set up the fund as well as the authority to establish the I&M program for Clark County.

 

Mr. Marvel asked if the parameters had been set for the fee schedule or if they could be arbitrarily raised.  Mr. Dodgion explained the current statute establishes authority for the State Environment Commission to set fees for permit programs.  The fees are in place and Mr. Dodgion remarked it was not anticipated at this time to adjust the fees during the next biennium.  Two years from now, when the federal permitting program has been established under the Clean Air Act, the fees would have to be raised substantially.  He did not anticipate, however, this would be the case in the next two years.  Mr. Marvel questioned if there would be any guidelines, not an arbitrary assessment, in order to give the payor an idea of the assessment.  Mr. Dodgion responded affirmatively.  The fees would be set at an exact rate but only after extensive public hearings.  The fees could not be brought into the budget without approval from the Interim Finance Committee or the entire legislature. 

 

Mr. Dini commented he had watched the EPA grow from 1969, when the counties were allowed to have the agency.  He asked if there was a specific reason why the governor wanted to create a separate agency which had not yet been explained to the committees.  He said it appeared to operate well in the current structure and was well balanced.  Mr. Dodgion stated the recommendation to create the department resulted from the study by Peat Marwick.  He understood there was an attempt to consolidate all the functions which deal with environmental protection and then elevate environmental protection to department status to emphasize its importance.  He pointed out the state has relatively open spaces, clean air, clean water and he believed these things created a good lifestyle in the state and would attract quality industry to the state.  Mr. Dodgion expressed the need to protect those things, both from the standpoint of economic growth and to maintain the good quality of life presently in existence.

 

Mr. Dini commented 68 percent of the population of the state was in one county, 20 percent in another county and each county has their own method of dealing with air quality.  He suggested the bureau should primarily help these two counties.  Mr. Dodgion said each of the two counties run their own air pollution programs, but do not run any other programs.  He stated the bureau works closely with both county health districts concerning hazardous waste, solid waste and other programs.  Under the federal Clean Air Act, the state is charged with the responsibility of achieving standards in those two counties.  If the counties fail to do their jobs, the sanctions the federal government will apply will come through the state.

 

Mr. Marvel asked if there would be any change in the Environmental Commission through reorganization.  Mr. Dodgion answered no, the representatives presently on the commission would remain the same.

 

Mr. Dodgion referred to the base budget and commented the personnel expenses rise from $820,000 to $901,000.  This increase was due primarily to increased positions coming in 1992, due to inability to fill them because of the hiring freeze and budget constraints.  In 1993, the figure reflects full staffing for the base positions.  The same was true for in-state and out-of-state travel, Mr. Dodgion explained.  There was an extensive out-of-state travel budget for all divisions to coordinate programs with the federal environmental protection agencies.  The bureau participates in the National Air Pollution Association of States and an active role is taken in the Western States Air Pollution Control Association.  The in-state travel seemed quite high, Mr. Dodgion commented, and there is an increase going into 1993.  He explained this was again due to lack of full staffing on board.  Air pollution programs are run state-wide and extensive travel was required to monitor and conduct investigations and inspections.

 

Chairman Arberry referred to the transfer item of $9,800 and requested an explanation.  Mr. Dodgion stated the funds had been transferred from the DMV and he assumed the same had been transferred back.  He explained dollars were received from the I&M fund and were then transferred back to balance.

 

Chairman Arberry called attention to the equipment line item wherein costs were expended, but not requested or recommended for the next biennium.   The chairman pointed out in previous years funding had been requested for equipment and during the next biennium, there was no request at all.  Mr. Dodgion responded the equipment item was not necessarily a base and does not show in the base for FY94-95.  He referred to the enhancement category and pointed out there were some equipment expenditures.  In 1993, some additional grant monies were acquired and there were fairly large expenditures.  It has been nearly 15 years since the bureau has had a substantial equipment budget for monitoring equipment, and the equipment was woefully outdated.  Mr. Dodgion explained there was an attempt to update the equipment and to obtain sufficient monitoring equipment for carbon monoxide and ozone monitors to determine the actual air quality, other than just particulate matter, in other areas of the state.  Mr. Dodgion called attention to page 1509 of the Executive Budget, the increase in equipment from $26,000 in the first year to $30,000 in the second year.

 

Chairman Arberry requested an explanation of the $139,000 reversion.  Mr. Dodgion replied the bureau had gone through reductions due to general fund shortfalls.  Approximately $21,000 had been reduced in personnel by not filling a position authorized on October 1, 1992.  Out-of-state travel had been reduced by $2,000 and in-state travel by $5,000.  A very large cut was derived from operating, $45,000 which had been programmed for special air quality studies and investigations, should the need for the studies arise.  Equipment costs were reduced by $60,000, which had been budgeted for monitoring equipment, data processing had been cut by $2,000 and training by $3,600.

 

Mrs. Williams inquired if the bureau would be able to meet the emission goals with the reductions as illustrated by Mr. Dodgion.  She called attention to the cuts in in-state travel and surmised these funds would have been used for monitoring purposes.   She asked what areas suffer as a result of the mandates of the federal government and the needs of the people of Nevada.  Mr. Dodgion replied there was a need for extensive in-state travel and the greatest need was in the area of timely response.  He said immediate investigations have suffered, they are delayed and a particular investigation will be combined with another inspection so they can be accomplished in one trip.  Mrs. Williams inquired what Mr. Dodgion's view would be regarding his ability to perform necessary functions in the future under the new plan.  Mr. Dodgion responded under the reorganization, there would be adequate resources to complete inspections and investigations in a timely manner.

 

Mr. Dodgion pointed out the maintenance category reflected a few dollars for inflation and operating expenses.  The occupational studies category relates to a number of engineers in the bureaus who were impacted by the engineering/occupational study.  Mr. Dodgion explained the main increases in the budget were in the enhancement 700 category.  Two new positions were being requested, both being environmental specialists.  The funding will be derived from an increase in the federal grant.  The positions were needed due to the increased work load, the increase in the number of sources requiring regulation as well as the fact Carson City had operated its own air quality program until this last year.  Looking at the requirements of the Clean Air Act and the amount of work involved, the city chose to return the operation to the bureau.  The two positions were requested in order to keep up with the permitting and inspection requirements derived from the increased work load.  Mr. Dodgion stated during the last two years, approximately 1,100 permits were processed and 1,700 permits have been projected over the next biennium.  Chairman Arberry inquired where the two new positions would be located.  Mr. Dodgion replied he anticipated placing both positions in Carson City.  There is an air pollution specialist in the Las Vegas office, but as the office develops, additional positions may be moved to Las Vegas.

 

Mrs. Williams asked if there was only one position in the Las Vegas office.  Mr. Dodgion explained 13 staff positions were located in the Las Vegas office, one assigned to air pollution duties.  He reminded the committees that Clark County operates the majority of air pollution programs in Las Vegas.

 

Mr. Dodgion referred to the in-state and out-of-state travel, remarking the figures seemed disproportionate for two positions.  However, this was due to the lack of full staffing in FY92.  The increases in travel and operating were associated with full staffing.

 

Chairman Arberry requested an itemized list of the recommended equipment based on AB 812 of the 66th session.  Mr. Dodgion remarked the equipment was primarily smoke meters for the heavy duty vehicle program.  He agreed to provide the breakdown.

 

Mr. Price asked if the state Environmental Commission was an existing commission.  Mr. Dodgion replied yes, the commission had been in existence since 1971 and its budget would be presented later today.

 

Mr. Perkins requested more information on the cost of implementing the inspection programs mandated by AB 812 of the 66th session.  Mr. Dodgion replied the heavy duty vehicle smoking program was mandated by AB 812 of the 66th session which requires Nevada to adopt a program substantially similar to that of California wherein vehicles would be stopped along roadways.  This would require coordination with the NHP in order to pull the vehicle over and check the level of smoke coming from the stack of a diesel truck.  The program and regulations have been adopted by the state Environmental Commission with a one-year trial program to develop data to determine where the level of emissions should be set for diesel trucks.  The emissions studies from California were done at sea level and there was no information for higher altitudes.  When the program is up and running, it will be operated by the DMV as part of the I&M program.  Mr. Dodgion pointed out the program for light duty vehicles was much the same.  The Environmental Commission has adopted the rules and regulations for that program and set the emissions standards.  The DMV has established regulations for conducting the actual physical tests and they are obtaining personnel to conduct tests which should be functioning by July 1.

 

GAS POLLUTION STANDARDS - PAGE 1512

 

Robert Gronowski, Director of the Division of Plant Industry under the Department of Agriculture, explained the Gas Pollution Standards budget was added to the Department of Agriculture in the last legislative session by the passage of AB 812 of the 66th session.  This legislation amended NRS 590.070 and mandated the Nevada Department of Agriculture adopt standards relating to internal combustion engines similar to the laws and rules of California.  Mr. Gronowski remarked the Department of Agriculture had been previously responsible for fuel standards which concerned the American Society of Testing and Management.  This standard made the automobile engine operate properly and the changes in the law mandated that California standards be considered.  The Department of Agriculture monitors fuel regulations because the chemistry division had worked with other petroleum products in the past and was capable of expanding their expertise to comply with the American Society of Testing Material Fuel Standards.  The laboratory could also look at those components of the air which pollute.  The monies to fund the pollution control standards come via AB 812 of the 66th session from testing of vehicles by the DMV and those funds are transferred to the Department of Agriculture.  With this revenue, one additional chemist was hired and two inspectors to assist the other weights and measurers inspectors who currently gather fuel samples and investigate violations.  Of concern during the hearings on AB 812 of the 66th session, fuel from California would be imported which did not meet California standards and that substandard fuel would be dumped in Nevada.  Some of this has occurred, and in addition there is an intentional blending of fuels in Nevada to escape taxes and make extra money for the companies who are doing so. 

 

Mr. Gronowski explained 940 samples were taken last year and 42 violations of fuel standards were discovered.  There was one administrative hearing, 19 tanks were pumped out, and the fuel moved out of the state.  There is a tremendous profit incentive to blend back into fuels things which are not taxed.  These products are difficult to identify and could only now be identified due to the receipt of funds from the DMV.  New equipment was purchased for use in detection of products being put into fuel.  The worst fuel blending violations are occurring in Las Vegas as the most amount of fuel is being sold there.  Once the fuel has been blended and consumed, there is a definite increase in air pollution, which is already a problem in Las Vegas.

 

Under reorganization, Mr. Marvel asked where the laboratory would move, if at all.  Mr. Gronowski replied the lab would stay with the Department of Agriculture and rent is paid to a private party. 

 

Mr. Price asked if the weights and measures division was under Mr. Gronowski's control.  Mr. Gronowski replied yes, along with chemistry and agriculture field inspections, etc.  Mr. Price asked what portion of the work of the weights and measures division being transferred to the highway division would fall under highways.  Mr. Gronowski replied less than one percent.

 

Mr. Gronowski indicated the base budget request was to continue the salary of the additional chemist provided by AB 812 of the 66th session and the two weights and measures inspectors who assist taking fuel samples and conducting investigations.  It must be realized, Mr. Gronowski commented, that two people cannot do all that work.  The other weights and measures inspectors are integrated into the fuel sampling duties.  The operating category provides funding for the laboratory at its current level.   The enhancement category reflects a request concerning the critical issue of the environment in an effort to improve air quality.  This category also includes additional out-of-state travel for chemists to attend fuel standards meetings in California.  There is an office in Las Vegas which has space available which could be expanded into a laboratory.  There is a petroleum chemist on staff whose position is paid from a different fund who could be transferred into the Las Vegas laboratory.  At the present time, fuel samples collected must be shipped to the laboratory in Reno and if the sample is found to be in violation, by the time the results are available, the fuel has already been sold in Las Vegas.  It was the intent to stop the sale of the fuel.  The agency has the authority, if they had the facilities, to halt the sale in approximately one hour.  Mr. Gronowski stated the enhancements category would cover improvements to the structure and fixtures in the Las Vegas office.  Unfortunately, the $31,000 needed for these improvements was not included in the enhancement category.  However, Mr. Gronowski pointed out he had been assured by the budget office they had intended to include the $31,000 to improve the laboratory in the operating budget.

 

Mr. Spitler questioned if the laboratory in Las Vegas would actually be funded.  Mr. Gronowski commented he had requested $31,000 to improve the Las Vegas laboratory, however, due to the budget format change and other circumstances, this funding request had not been included in the current budget.  Ms. Matteucci confirmed from the audience the laboratory would be funded.  Chairman Arberry inquired what would occur without the funding.  Mr. Gronowski replied the fuel samples would continue to be shipped to the Reno office and the fuel sold before the results were available.  The seller could still be prosecuted and fined $2,000 per day for the first violation, $4,000 per day for the second violation and $6,000 per day for the third violation.  The fine was not a great deterrent because the value of the tax savings was greater than the fine and in addition, the fuel was sold before the violation was confirmed.  Mr. Gronowski remarked it was important to fund the second laboratory and prevent dissemination of harmful fuels.

 

Mr. Spitler acknowledged expeditious analysis of fuel was important as the fuel was literally pumped out of the tanks before the analysis was complete.  He asked if the budget office would provide a revised budget showing this additional funding.  Ms. Matteucci indicated it would be provided.

 

Mr. Price inquired if there was a portable laboratory which could be utilized.  Mr. Gronowski replied California has such a system but it was very expensive.  If the laboratory was funded, the tests could be run in approximately one hour.

 

Mrs. Chowning mentioned there were no performance indicators for this budget and she inquired how many fines had been issued.  Mr. Gronowski replied last year one fine amounted to $45,000, but at the time, the sophisticated equipment authorized by AB 812 of the 66th session had not been purchased.  Over the next couple of days, 14 fuel violation hearings would be held in Las Vegas regarding misblended fuels.  Mrs. Chowning asked if there had been no performance indicators due to the fact there had only been one fine issued last year.  Mr. Gronowski responded the performance indicators submitted explained the 940 fuel samples collected in 1992, the 42 fuel violations in those 940 samples and the 19 tanks of gasoline which were pumped out and removed from the state.  Mrs. Chowning inquired where the funds collected through fines were directed.  Mr. Gronowski replied the funds go to the school district in the county where the violation was found, all the violations have been in Las Vegas.

 

Mrs. Williams inquired how Nevada's standards compared to those in California.  Mr. Gronowski answered Nevada had adopted California's phase one fuel standards and would be considering phase two standards which had just been passed in California this last summer.  Phase two would include such things as removing carcinogens, etc.  Mrs. Williams asserted there was no time to waste in adopting phase two.  Mr. Gronowski agreed there would be no delay in the efforts to adopt phase two to curtail the air pollution in Las Vegas and Washoe County.  Fuel blenders were attempting to defraud people in California, Nevada and Arizona.  The three states have a fuel monitoring group which meets regularly to share information.

 

Senator Jacobsen inquired what happened to the fuel pumped out of the tanks.  Mr. Gronowski explained the NHP escorts the fuel trucks out of state to return the fuel to the refinery.

 

MOTOR VEHICLE POLLUTION CONTROL - PAGE 1515

 

Ray Sparks, Chief of the Registration Division of the Department of Motor Vehicles and Public Safety, explained the Motor Vehicle Pollution Control budget is presently administered by the registration division.  The budget will be transferred to the new Department of Environmental Protection under reorganization.

 

The state Environmental Commission has promulgated and the DMV has approved rules which establish a program for the control of emissions from motor vehicles in Clark and Washoe Counties.  Emission standards have been established and annual inspections are required to verify compliance.  Inspection requirements are enforced by requiring that evidence of compliance be submitted before a motor vehicle may be registered.  Under the program, Mr. Sparks continued, the emission inspection stations and emission inspectors are required to be licensed.  Inspection equipment and testing protocol requirements are established by regulations.  Training is provided for the license division inspectors and public information is disseminated.  The mission program funds a number of investigators who perform a consumer protection function by investigating complaints against stations and inspectors and generally conduct supervision of the industry.  The program provides for the establishment of an advisory committee on control of emissions from motor vehicles.  Finally, the program includes a program to award grants from the pollution control fund to local government air pollution control agencies.

 

The pollution control fund is a special revenue fund, Mr. Sparks commented, and is supported by the fees charged for certificates of emission control compliance and license fees for emission stations and inspectors.  Currently, there are a total of 61 positions funded in this budget account. 

 

The recommended budget continues the staffing level for the diesel inspection program which was approved in a recent Interim Finance Committee hearing.  Additionally, 16 positions currently residing in the DMV technician series are transferred from this budget account to the registration division.  The Department of Administration proposes to move a microcomputer specialist to the new data processing agency being organized.

 

There are a number of fund transfers included in this budget, said Mr. Sparks.  There is a transfer to the NHP to pay the cost of the visible smoke enforcement program and includes anticipated grants to the local air pollution control agencies during the next biennium.

 

Senator Coffin inquired if there was truth in advertising for those people doing inspections.  He called attention to those inspectors who advertise that those who do not pass inspection do not have to pay.  Senator Coffin inquired if there was some control over those inspectors.  Mr. Sparks replied a large priority was identifying those emission stations who were involved in fraudulent activity.  The principal effort was determining those stations who were either issuing a passing emissions certificate for a vehicle which did not pass or the opposite, failing a vehicle that should pass.  The advertising is clearly misleading in that if an emissions station tests a vehicle which fails the test, the emissions station still collects the $6 certificate fee.  The test fee may be waived, but the test is certainly not free to the consumer, a minimum of $6 would be charged.  Senator Coffin asked how the "bad apples" were weeded out.  Mr. Sparks stated the requirements to become an emissions inspector primarily deal with analyzers and equipment.  Inspectors are required to post a $5,000 bond with the state, but the entry requirements could be considered to be not very onerous.  Senator Coffin requested the number of licenses revoked be an addition to the performance indicators.  He also requested a list of those licenses which have been revoked and the penalties imposed.  Mr. Sparks indicated he would provide that information and commented, in addition, a program had been initiated to assess administrative fines for violations by licensees as an enforcement mechanism.

 

Mr. Spitler referred to the grants which go to the counties and asked if there were any restrictions on the grants.  Mr. Sparks replied the grant monies must be used for programs and projects related to mobile source emission problems, but beyond that, the local entities have broad discretion as to what type of activities are funded.  Mr. Spitler inquired if programs were mainly educational or practical in stopping pollution.  Mr. Sparks responded there was no restriction, but both types of activities have been funded through the grants.

 

Mr. Heller called attention to the expenditure of $5.7 million in this budget which the performance indicators state was used for improvement of air quality and requested an explanation.  Mr. Sparks explained the program was one which was performed in close coordination with the Division of Environmental Protection.  This budget was responsible for the inspection and maintenance program--how the tests were performed, what type of equipment was used for the tests, the type of vehicles tested, etc.  The environmental standards or performance indicators are deferred to the Environmental Protection Agency to provide expertise.  Mr. Sparks stated he did not have staff who would be considered truly environmental, their function was more on the mechanical side.  Mr. Heller stated there should be some way to justify the expenditure of $5 million in this budget which the performance indicators do not reflect.  Mr. Sparks agreed.  Another rationale for the expenditure of these funds was the risk to the state of sanctions from the federal government if the state does not comply with the federal programs.  Under the Clean Air Act amendments of 1990, the state may well have to substantially revise the emission inspection program as it exists today.  For example, Clark County may be virtually forced into a centralized inspection program which is in contrast with the current decentralized program.  Essentially, rather than the 100 or so independent emission stations in Clark County performing these tests, the state would perform all the testing in that area.  While the federal government is not mandating that type of centralized testing program, they make it very difficult for the state to maintain a decentralized program.

 

Mr. Spitler mentioned Senate Bill 547 and asked what the status was on the pilot programs.  Mr. Sparks commented they were in the process of implementing the pilot program where license emission stations would be able to renew certain vehicle registrations.  Approximately 45 license stations have expressed an interest in participating in that program and they have been sent the application package which explains the bonding requirements and computer hardware requirements needed for participation.  Four stations will be selected in Clark County and two in Washoe County and it was hoped the program would be fully implemented in April of this year.

 

WATER AND MINING - PAGE 1528

 

Lew Dodgion, Administrator of the Division of Environmental Protection, stated this budget account covers three bureaus within the division--Water Pollution Control, Mining Regulation and Reclamation and Water Quality Planning.  The bureaus operate programs statewide for the control of water pollution, both surface and groundwater, in accordance with the requirements of NRS 445.131-445.354, the federal Clean Water Act, federal Safe Drinking Water Act, and regulations as promulgated by the state Environmental Commission.

 

Mr. Dodgion explained NRS 445.132 states it should be the policy of the state to maintain the quality of the waters of the state system for the public's health and enjoyment, the propagation and protection of terrestrial and aquatic life, the operation of existing industries, the pursuit of agriculture and the economic development of the state.  The programs operated by the Bureau of Water Pollution Control include the construction grants program for construction of publicly owned waste water treatment facilities, which had been virtually phased out.  In addition, the state revolving loan fund was being phased in to replace the construction grants program and was capitalized by federal grants to provide low-interest loans to municipalities for treatment plant construction.  Money from the repayment of loans maintains the perpetual fund to keep this program going.  The bureau also operates permit programs, including the national pollution discharge elimination system permits, groundwater permits, storm water and general permits, subdivision review, treatment plant operator training and certification programs.

 

The Bureau of Water Quality Planning operates programs which include water quality planning as required by the Clean Water Act, section 208, setting of water quality standards for surface waters, water quality monitoring, non-point source control projects, wellhead protection programs, clean lakes projects, groundwater protection planning and doing water quality studies.

 

Mr. Dodgion added the Bureau of Water Mining Regulation and Reclamation operates programs to protect the state's water resources from the impacts of mining and to ensure proper reclamation of disturbed lands in accordance with NRS 445.131- 445.354 and NRS 519A.010-519.415.  The bureau operates standard programs including permitting, monitoring, plan and spec review, inspection and enforcement.  The mining programs were developed with extensive cooperation from environment groups and the mining industry.  The regulation program has been viewed as a model by the federal Environmental Protection Agency and other states.

 

Mr. Marvel asked if there was any duplication areas in these programs with the federal agencies.  Mr. Dodgion referred to reclamation areas and indicated he worked very closely with federal land managers, the Bureau of Land Management and the Forest Service to avoid duplication in that area.  With reference to protecting water quality, there was no duplication, the federal agencies do not operate those programs.

 

Mr. Dodgion advised the bureaus were funded by a general fund appropriation, a number of federal grants and the various permit fees.  There has been a large increase in the availability of federal funds for FY92-93 due to a large amount of grant money becoming available for clean lakes projects and for non-point source projects.  This grant money passes through the agency to local municipalities, such as TRPA, to perform erosion control projects and clean lakes studies.  The increase in expenditures from FY92-93 reflects full staffing in 1993.

 

Mr. Dini mentioned the expenditures category and inquired if the "transfer to 3173" line item referred to mining monies being transferred to another agency.  Mr. Dodgion replied this transfer was the indirect cost assessed to each of the bureaus to support the division's administrative unit and was applied uniformly based on direct salaries for each of the programs in the division. 

 

Senator Coffin mentioned there had been some complaints of the cost of protecting the environment from damage by the mining industry.  The cost of production was becoming perilously close to a break-even point and some mines were contemplating closure.  Mr. Dodgion replied the large quantities of cyanide solutions and heavy metals, other than gold and silver, which are leached out of the ore certainly represent a very real threat to the groundwaters of the state and to wildlife resources and must be regulated.  The industry recognized this problem, and there was a good working relationship between the state and the Nevada Mining Association and the small miners and prospectors across the state.  The program for regulation and reclamation was staffed at about the right level, one new clerical position had been requested for that program.  Within the next two to three years, Mr. Dodgion believed there would be no need for modification of the permit fees for the industry.  The agency's goal was to encourage compliance with the rules and environmental regulations but to have a good working relationship as well.

 

Senator O'Donnell referred to page 1528 of the Executive Budget where the government recommended $2.1 million in the base resources category.  He requested an explanation of the source of those funds.  Mr. Dodgion replied that figure represented various fees charged for water pollution programs, reclamation fees to the mines, permit fees, sewer treatment plant fees, etc.  Senator O'Donnell asked if there was an interest in raising fees.  Mr. Dodgion responded all the fees for water pollution programs have been set by the Environmental Commission.  At this time, there was no anticipation to modify any of the fees within the next biennium. 

Senator O'Donnell referred to the reserve line item in the expenditures category and requested an explanation of the large amount of funds in the reserve.  Mr. Dodgion called attention to the FY92-93 work program reserve of $686,627.  The majority of that reserve was from the mining programs not being fully staffed at the time the programs were initiated.  There is a small reserve in all the fee programs which will zero out during this biennium.  Senator O'Donnell requested further explanation from Ms. Matteucci.  Ms. Matteucci cited the base budget and the discrepancy between what the agency requested and the governor's recommendation.   The full amount of $686,000 was carried forward and represented approximately $200,000 more than what had been proposed by the agency during the first year.  As Mr. Dodgion pointed out, there were expenditures reducing that reserve.  For instance, on page 1529 of the Executive Budget, there is a figure of -$5,175.  Essentially, the various components of the budget must be added together to determine the total reserve.  There was a zero reserve figure on page 1530 under the enhancement category, but Ms. Matteucci commented unless the figures were properly calculated, that zero figure might not necessary result.  The major difference shows the full amount of $686,000 in the base budget had been carried forward, but not quite that amount had been carried forward, which was approximately $200,000 higher.  Senator O'Donnell asked if the reserve was thereby an incorrect figure.  Ms. Matteucci replied that was not the case, it was a matter of how to show the reserve.  In past sessions the full reserve had not been carried forward.  In this budget, the full reserve has been carried forward, with the knowledge the agency may spend down the reserve and there may not be enough money available to carry forward.  Each agency would be able to tell the committees whether the reserve figures were accurate.  Ms. Matteucci stated it was not a matter whether the figures were right or wrong, but an issue of display.

 

Mr. Dodgion stated five new positions were being requested under the enhancement category for the three bureaus.  A management assistant II was being requested for each bureau and an environmental engineer II each for the Bureau of Water Pollution Control and the Bureau of Water Quality Planning.  With respect to the management assistant II, all three of the bureaus have a single clerical position and suffer from lack of clerical support.  The result was the professional technical staff doing clerical work, answering telephones, filing, etc., which was not cost effective.  In the Bureau of Water Quality Planning there is a backlog in triennial reviews for water quality standards.  Streams and their water quality standards require review every three years.  There are also new federal mandates for water quality standards.  In the Bureau of Water Pollution Control, there is a backlog in permits and inspections.  The engineer II position was needed in order to reduce that backlog.

 

The enhancements reflect full staffing for FY93-94 as opposed to partial staffing in FY92.  Out-of-state travel is coordinated with the federal EPA for participation in the National Water Pollution Association and participation in the Colorado River Basin Salinity Control Forum.  Mr. Dodgion said extensive in-state travel is required for inspections, monitoring and enforcement actions.

 

Mr. Perkins understood the management assistant II was necessary to help with the backlog of permits.  He asked if that one person would be able to take care of the backlog or if additional professional or technical personnel would be required to assist.  Mr. Dodgion replied in the Bureau of Water Quality Planning, the location of the laboratory certification program, the amount of work had been underestimated.  The addition of the clerical position would free the technical staff to return to their assigned duties.

 

Mr. Heller inquired if the boards Mr. Dodgion had been describing were part of the governor's reorganization plan.  Mr. Dodgion answered the bureaus he had been describing were not part of the governor's reorganization scheme; he had done some reorganization of his own within the water bureau.

 

Mrs. Williams asked what effect the increased mining activity has had on the water and mining budget and if the agency was prepared to handle the additional work load.  Mr. Dodgion commented the price of gold has dropped and some of the operations were becoming somewhat marginal.  There was not much exploration or new facilities coming on line at the present time and the existing operations were choosing to expand rather than explore.  These factors have been taken into consideration but the work load from permitting a number of new smaller facilities has become a task of modifying permits for expansions at the larger facilities.  At the present time, there is adequate staffing to handle the work load. 

 

RECYCLING PROGRAM - PAGE 1545

 

Jim Hawke, Director of the Office of Community Services, explained to the committees the funding for this budget sunsets on March 15, 1993.  Senate Bills 97 and 98, under consideration by the legislature at the present time, must be enacted by March 15 to continue the sunset date until the end of the fiscal year.  The recycling program as well as the Environmental Protection Agency's (EPA) waste management program are administered using fees collected from tire sales in Nevada.

 

The recycling programs had somewhat of a late start.  Although legislation was enacted in the last session, the bills from the money committees had not arrived in time to build the costs into the budget.  The issue was brought before the Interim Finance Committee and ultimately, final approval was gained on March 20, 1992, to implement the recycling programs as funded and enacted by that legislation.  Mr. Hawke stated the program had gotten off to a very fast start.  There are two employees in the program who, unfortunately, received layoff notices recently because the future of the program had not been ensured past March 15.  It was hoped the positions would not be eliminated and the notification was only a formality.

 

Mr. Hawke remarked the revenue collected from the tire tax has been less than anticipated.  With the transfer of collection responsibilities to the Department of Taxation and the improvement in collection activity, the budget would come closer to estimations.  If the recycling fees do not generate the projected revenue, base budgets have been created to maintain the staff and to reduce other programs in order to operate with somewhat less revenue than anticipated.  Mr. Hawke added the budget also provides for grants to nonprofit and other organizations to encourage education in recycling.  The enhancement portion of the budget reflects the grants previously mentioned and funds transferred from the EPA.

 

Senator Jacobsen stated he had been impressed with the products made from recycled materials.  However, the public awareness to use recycled products was not what it could be.  He asked if there was some plan to heighten the public's appreciation of recycled products.  Mr. Hawke emphasized that was correct, closing the loop by using recycled products was very important.  Developing markets was a challenge and there has been great effort to use the materials collected in Nevada to make new products in Nevada.

 

Mrs. Chowning asked what had been accomplished with the $370,000 over the biennium as shown in the performance indicators and inquired what action had been taken regarding the sunset provision on March 15.  Mr. Hawke replied the sunset date had been addressed and SB 97, as amended, will eliminate the sunset date and create a program for solid waste management and recycling.  With reference to the performance indicators, Mr. Hawke explained since the program began in March of 1992, there was not much accomplished to date on which to report.  However, what information was available would be provided.

 

WASTE MANAGEMENT AND FEDERAL FACILITIES - PAGE 1548

 

Mr. Dodgion commented this budget included three bureaus within the division, the Bureau of Waste Management, Bureau of Chemical Hazards and Bureau of Federal Facilities.  The Bureau of Waste Management programs are operated as required by NRS 444.440-444.645, 459.400-459-600, 459.800-459.856, the federal Resource Conservation and Recovery Act and the regulations as adopted by the state Environmental Commission.  The programs within this bureau include hazardous waste management and solid waste management with some elements of planning, permitting, inspection and enforcement.  Also included are underground storage tank programs and the leaking underground storage tank trust fund.  This trust fund is capitalized by a federal grant to investigate leaks from underground storage tanks.  When the responsible party cannot be identified, the site can be investigated and cleaned up using monies from the trust fund. 

 

The Bureau of Chemical Hazard programs are governed by the same statutes as water pollution and the Comprehensive Environmental Response Compensation and Liability Act.  The programs include the chemical catastrophe prevention program, SB 641 of the 66th session, which applies to facilities which handle highly hazardous substances within the state and requires registration, safety reports and assessment of risks through the analysis of hazards.  Also included is a corrective action program which has been established to oversee all the remediation environmental cleanups throughout the state and a superfund program.  The petroleum claims fund was set up with a 6/10ths cent per gallon tax on petroleum products to provide insurance to underground storage tank operators and provide monies to clean up leaking underground tanks.  The program had been working quite well, Mr. Dodgion expressed, and to date $15.5 million had been paid out in cleanup costs.

 

The Bureau of Federal Facilities coordinates corrective actions at the Departments of Defense and Energy facilities throughout the state.  The bureau is responsible for permitting and compliance monitoring of all active air pollution, water pollution and waste management facilities for Department of Energy facilities.  Regarding Department of Defense facilities, the bureau oversees corrective and cleanup action on those facilities.  To date, approximately 300 Department of Defense sites have been identified which need to be cleaned up, including facilities at Nellis Air Force Base and Fallon.  The Nevada Test Site is a Department of Energy facility which has been identified in addition to another 1,000 sites requiring action.

 

Mr. Dodgion explained there are no general funds in this budget, the bureaus are funded by federal grants and fees.  Most of the fee revenue originates from the hazardous waste management fund, which is supported by disposal fees.

 

The base budget shows a large increase in the revenue category.  The other line item represents solid waste fees and the huge increase is tied to AB 320 of the 66th session, which is the recycling bill and the $1 tire fee previously mentioned by Mr. Hawke.  The agency transfers in the revenue category are from the hazardous waste management fund and the petroleum fund.  Mr. Dodgion referred to the work program for FY93, the grants and recycle line items, and stated both expenditures were initiated by AB 320 of the 66th session, which mandated at least $200,000 in grants must be directed to counties for recycling projects.

 

Mr. Dodgion explained the agency was requesting eight new positions for the three bureaus, seven positions scheduled to come on board in FY94 and one in FY95.  There is a difference of two positions in what had been requested and the governor's recommendation.  Those recommendations are data processing positions which should appear in the DDP budget, but the Waste Management budget reflects those positions under the data processing expenditures category.  Two of the positions would be placed into the Bureau of Chemical Hazards Corrective Action Program and two in the Chemical Catastrophe Prevention Program.  There are currently three positions in the prevention program, the environmental engineer IV position had been reduced to 25 percent in order to make the position the bureau chief, who will oversee several programs.  Therefore, the actual increase for this program will be 1.25 positions.  Additional staff will be required for this program during the upcoming biennium because the actual evaluation of hazards at facilities will be initiated.  Assessments, evaluations and inspections will be required at the facilities.  There are 46 facilities which now fall into this program and in all probability, 10-15 more will be added over the biennium. 

 

Two positions have been requested for the corrective action program, one in each year of the biennium.   The corrective action branch oversees remediation activities at all sites which are not related to the underground storage tank program or to mine sites, explained Mr. Dodgion.  This program would handle such things as extensive soil and groundwater contamination as a result of releases from various sources.  There are currently approximately 100 open corrective action cases and the number is increasing.   New positions are requested, including an environmental engineer II, to review clean-up plans, monitor the cases and perform site inspections.  In conjunction with this program, Mr. Dodgion requested $500,000 in operating contract funds from the hazardous waste management fund to retain a consultant contractor to perform site investigations and cleanups where a responsible party cannot be found or refuses to do the work or cannot complete the work in a timely manner.

 

There are four positions requested for the Bureau of Waste Management, two in the hazardous waste program, an environmental engineer III in the solid waste program and an environmental engineer II for the leaking underground storage tank program.  The federal Resource Conservation Recovery Act and other federal regulations are demanding increasingly complex requirements for permitting, monitoring and inspection of hazardous waste management facilities.  As more contaminated sites are discovered, the bureau is required to issue permits for the cleanup activities.   Additional staff is needed to process these permits in a timely manner to ensure the remediation goes forward.  These positions will also provide facilities inspection services and will be funded by federal grant and hazardous waste management fund fees.

 

Mrs. Williams inquired if there would be enough money to meet the federal match requirements after consolidation of the various bureaus.  Mr. Dodgion replied affirmatively, under the budget as proposed.

 

Senator Jacobsen asked if there would be enough room in existing buildings for the additional employees.  Mr. Dodgion explained there would be enough room in the Sheehan Building for the new positions requested.  Senator Jacobsen asked if he had considered the facilities at Stewart where nearly half the buildings are empty.  Pete Morros, Director of the Department of Conservation and Natural Resources, understood the division of Public Safety was at the Stewart facility and had occupied most of the buildings.  Mr. Morros stated there was a ten-year lease on the buildings currently being occupied by the department and all agencies within the department are finally housed in one location.  He indicated he would not like to see that change.  Senator Jacobsen inquired what was the square foot rental charge.  Mr. Morros responded the rent was approximately just over $1 per square foot.

 

Mrs. Williams commented she understood 10-year leases could not be entered into because they would affect the debt limit.  Mr. Morros replied he was unsure of that situation.  Ms. Matteucci added she would look at the specifics of the lease, but she had been informed there was an "out" clause.

 

 

 

ENVIRONMENTAL PROTECTION ADMINISTRATION - PAGE 1553

 

Mr. Dodgion explained this budget consisted of the division administrator, legal services, accounting personnel, grants management, staff support for the Environmental Commission and clerical support.  The administrative unit provides directional policy and services to each of the bureaus and programs.  The budget is funded by an indirect cost assessment applied to the direct salaries of all division programs, therefore, there is no general fund appropriation associated with this budget.  The Department of Interior Office of the Inspector General is consulted annually for a fixed rate, carry forward, indirect cost which is adjusted into the current year's rate and can be seen in the FY93 work program.

 

With reference to the positions requested, the two positions recommended by the governor reflect the director for the Department of Environmental Protection and the agency request for an office manager in the Las Vegas office.

 

The general increases in the enhancement category reflect two new positions being requested for the administration office, an accounting specialist and account clerk III.   The division has experienced a great deal of growth in programs and personnel over the past few years without a corresponding adjustment in administration, particularly personnel management and accounting.  There has been an increase of programs related to AB 812 of the 66th session, the alternative fuels program; AB 456 of the 66th session, the general purpose water program; AB 320 of the 66th session, the recycling bill; and AB 641 of the 66th session, the chemical catastrophe bill.

 

Chairman Arberry called attention to the reorganization plan and the doubling of the work force to 254 employees and asked how Mr. Dodgion proposed to cope with the growth.  Mr. Dodgion stated under the reorganization, the director will have to evaluate each program and each budget in order to determine what administrative support is required or what has been brought together in order to mesh all the programs.  The administrative division as it now exists cannot provide support to all other programs under the reorganization plan.

 

Mr. Heller inquired where the performance standards were for the agency.  Mr. Dodgion replied all the bureaus had performance indicators.  During the last session, there was only one budget account and the performance indicators covered the entire division, then the division was broken into four budget accounts.  No performance indicators had been established for the administration division.  All the performance indicators for the other budgets, however, apply equally to the administration division.  Mr. Dodgion felt it would be prudent to add performance standards to this division in the future.

 

STATE ENVIRONMENTAL COMMISSION - PAGE 1558

 

Mr. Dodgion explained the Environmental Commission is an 11-member body established by NRS 445.451 and consists of the director of the Department of Wildlife, the State Forester, Fire Marshal, State Engineer, executive director of the Department of Agriculture, executive director of the Department of Minerals, a member of the state Board of Health and five members appointed by the governor, one of whom must be a person who is a general engineering or building contractor licensed pursuant to NRS Chapter 624, and a person who possesses expertise in performing mining reclamation.  The governor appoints the chairman of the commission from among the members.

 

The commission adopts the plans, rules and regulations necessary to implement environmental programs required by state and federal law.  This includes programs for the protection of air and water quality and management of solid and hazardous wastes and mine and land reclamation.  The commission acts as an appellate board for division actions such as permit decisions and enforcement actions.  In effect, if a person feels aggrieved by a permit decision or enforcement action from the division, he can appeal that decision or action to the commission.   The commission meets as a whole four to six times per year and meets four to six times a year as a three-member panel to hear appeals.  Commission staffing is provided by the Division of Environment Protection through the administrative unit.

 

The budget as presented provides salaries of $80 per day for those commission members who are not state employees, and provides in-state travel and operating to carry out the business of the commission.

 

Senator Raggio commented under the reorganization plan, the commission would be under the Department of Environmental Protection.  He asked if there would be any changes in the jurisdiction or the authority of the commission.  There was a feeling there would be some limitation being imposed on the commission's authority.  Mr. Dodgion pointed out the commission's authority over air, water and environmental programs was firm.  Under the reorganization, a transfer of authority from such areas as the I&M program with the DMV, the consumer health protection services from the Health Division, and the gas and pollution programs would have to be made in order for the commission to have jurisdiction over those programs.  An evaluation would then be made to determine if additional resources would have to be directed to the commission in order for them to carry out their responsibilities.  This budget established adequate resources for them to discharge their responsibilities under the current statutory structure.

 

NEVADA NATURAL HERITAGE - PAGE 1629

 

Glenn Clemmer, Program Manager for the Nevada Natural Heritage, stated this agency was located within the Department of Natural Resources.  The agency maintains a database on endangered, threatened and sensitive species for the state.  Unfortunately, Nevada ranks in the top ten states having the most sensitive species.  The data on these species is maintained by three people and the information is computerized for quick retrieval for use by the private and public sector alike.

 

Mr. Clemmer stated the budget is based primarily on transfer funds from the Department of Wildlife, monies from Question 5 park bonds, and federal grants.

 

Mr. Marvel inquired how long the Question 5 money would last.  Mr. Clemmer replied four years, and another source would have to be located.  A great deal of the money in the budget is allocated for travel in an effort to collect material to maintain the database.

 

Senator O'Donnell stated he had great concern there were only three positions in the agency and $10,000 in enhancements for travel.  He referred to page 1630 of the Executive Budget and the governor's recommendation of $10,000 in FY93-94 and $8,500 in FY94-95.  Mr. Clemmer clarified the actual recommendations were a total of $6,100 in each year of the biennium in the expenditures category.  One staff member from the office essentially stays in the field for the months of March through July, during the flowering season, and he receives a disproportionate share of the travel funds.

 

Mrs. Williams asked how many endangered species of plants and animals were in Nevada and if Mr. Clemmer anticipated more being added to the list in the future.  Mr. Clemmer stated the Wildlife Department maintains a list of plants and animals which fall into category one and two, approximately 200 plants and 100 animals.  Mr. Clemmer indicated he would provide that information.

 

Mr. Humke asked why there were no performance indicators.  Mr. Clemmer replied performance indicators had been submitted and had been based on information which had been added to the database.  He said he would provide the information directly to the committees.

 

Senator Coffin asked if the agency actively looks for endangered species.  Mr. Clemmer replied they respond to requests from federal agencies and federal biologists.  Senator Coffin asked what determining factors were used regarding endangered species.  Mr. Clemmer stated if something was rare in Nevada, it may actually be common in California, Idaho or other states.  This was one of the benefits of communicating with other states.  Species are ranked according to population in-state as well as out-of-state.  Of primary interest is the global occurrences of species and that is the real indicator if a species is rare, threatened or endangered.  Senator Coffin asked if there were any projects on hold due to threatened species of plants or animals.  Mr. Clemmer stated at the present time he was unaware of any projects on hold.  His primary interest was being able to send a red flag to developers and conservation planners that there could be a problem.  Senator Coffin asked if there was occasion to withhold mining permits or water supply permits.  Mr. Clemmer stated he was unaware of any such withholding.  Mr. Morros commented the program was effective in providing the necessary data rapidly and timely so the new mining projects are not hindered, especially where large tracts of federal lands are involved.  Mr. Clemmer added the goal was to keep the most up-to-date database so current information could be drawn upon.

 

Mr. Heller mentioned Nevada was in the top ten states concerning endangered species and asked if the state was in the top ten in spending for these endangered species.  Mr. Clemmer replied he believed Nevada was in the lowest ten in comparison to California, which has approximately 30 employees in a similar system.  Nevada has a very small program to cover a great number of species over a great deal of territory.  Mr. Heller inquired what the disadvantage was of having such a low spending level.  Mr. Clemmer replied the greatest lag was upgrading the database.  Requests are responded to promptly but the goal was to do a better job.

 

Mr. Spitler asked if the agency had been functioning for a longer period of time, ten years for instance, and had been adequately funded, would the catastrophe surrounding the desert tortoise, causing construction to come to a complete halt, have arisen.  Mr. Clemmer hoped in the future this situation would be prevented due to the work of the agency.  At the present time, there are two species of concern near Beatty and the aspiration was to keep those species off the list.  Government and private programs could be instituted to protect the habitat of those endangered species.

 

 

 

 

TAHOE REGIONAL PLANNING AGENCY - PAGE 1635

 

David Ziegler, Executive Director of the Tahoe Regional Planning Agency (TRPA), introduced Jim Dana, Finance Director and Wayne Chimarusti, Chairman of the Board.  Last spring TRPA had the opportunity to work closely with the legislative committee to investigate the functioning of the Tahoe Regional Planning Compact.  This committee contributed to a higher level of communication and understanding between the legislature and the agency.

 

To summarize the agency request, Mr. Ziegler stated they were requesting $1.5 million, down four percent from the current biennium and down $96,000 from the governor's recommendation.   The request includes an additional $4,000 to support travel to monthly TRPA board meetings.  The unusual request for less funds than recommended by the governor can be directed to the statute governing the Tahoe Regional Planning Compact which prescribes a two-thirds/one-third funding formula between California and Nevada for budget requirements.  The recently released governor's budget in California includes a slightly lower level of funding than the governor's budget in Nevada.  Mr. Ziegler commented he was reluctantly requesting an appropriation which was approximately $96,000 lower than the governor's recommendation. 

 

Mr. Dana provided the committee members with Exhibit E, an overview of the governor's recommendations and the resulting agency request.  In past hearings, there had been a request for this detail of revenue and expenses and thus it had been provided. 

 

Mr. Ziegler remarked if the legislature was to consider a cost of living adjustment for public employees in this biennium, he asked the TRPA be included in that authorization.  This issue has been complicated in the past because of the cost split between California and Nevada; however, Mr. Ziegler asked they be considered.  Chairman Arberry commented the governor had recommended a five percent cost of living increase over each year of the biennium, $30,000 for FY93-94 and $61,000 for FY94-95.  He asked for the breakdown of calculations.  Mr. Dana answered the figures had been calculated by combining all current salaries, merit step increases and a five percent adjustment was added on that figure.  The five percent increase in FY93-94 had been carried forward into FY94-95 with an additional five percent which doubled the agency request.  The governor included the increase in the enhancement category, but California had declined to provide funding.  The decrease in the agency request in Nevada was based on not getting a cost-of-living adjustment.

 

Senator O'Donnell asked if there was a requirement that Nevada fund one-third of the budget or if the budget could be augmented if so desired.  Mr. Ziegler replied the statute requires the agency request be on the one-third/two-thirds basis.  The statute is silent as to whether the state could augment above that level.  In the past, when minor discrepancies have occurred, the agency has been told to live with the difference.

 

Senator Raggio inquired if there was any existing litigation involving the compact.  Mr. Ziegler responded the legal caseload included 12 active cases; six cases had been recently resolved.  One of the more prominent cases was King v. TRPA, a case involving outdoor advertising and billboards at Tahoe, which had been recently settled.  The airport litigation between TRPA and the City of South Lake Tahoe lasted for seven years and was settled last summer.  Another prominent case involved a wrongful death issue wherein TRPA was sued for the drowning deaths of two children in South Lake Tahoe.  The federal district court in Reno dismissed the very large inverse condemnation cases brought by the Tahoe Sierra Preservation Council.  The council has appealed the decision to the Ninth Circuit and it remains on appeal.

 

Senator Raggio inquired as to the status of the proposed loop road around Stateline.  Mr. Ziegler answered the loop road was an element of the regional transportation plan and an application to construct a loop road would be consistent.  In addition, it was consistent with the redevelopment plan for the City of South Lake Tahoe which was approved a couple of years ago.  It is hoped the plan will come to fruition.  Senator Raggio inquired what the delay was.  Mr. Ziegler replied there had been problems with redevelopment on the California side.  One of the cornerstones of redevelopment, the Hodge property at Ski Run Boulevard, was in bankruptcy and was close to foreclosure.  Therefore, the revenues to support the redevelopment bonds on the California side were not finalized and there would have to be a renegotiation of the redevelopment plans and reallocation of the bond revenues and revenue stream to pay off the bonds.  Senator Raggio inquired as to the likelihood of the renegotiation and the outcome.  Mr. Ziegler stated it would be a difficult negotiation.  He had been asked last week to enter a negotiation to modify the redevelopment plan and the redevelopment agreement.  The time frame for resolution should be during calendar year 1993.

 

Mr. Price asked if each of the figures in the budget represented Nevada's one-third of the total cost.  Mr. Ziegler stated that was correct.  Mr. Price inquired how many employees were involved in the TRPA.  Mr. Ziegler responded 49.

 

Senator O'Donnell commented the last interim study of the TRPA revealed when citizens were fined for violations by the TRPA, the funds received did not go into the general fund, but went to the TRPA base budget directly.  He was concerned if there was litigation involving a large sum of money, the state or the local community would be responsible for payment.  He believed the legislature should fund this litigation in an effort to avoid the TRPA having to cite citizens in order to raise the revenue.  Mr. Ziegler stated he had no comment.  Senator Raggio indicated his concern was the $600,000 over the biennium in legal fees.  There does not appear to be any major pending litigation and Senator Raggio asked why the high figure.  Mr. Ziegler remarked there was a legal budget of $300,000 per year, one full-time and one part-time staff attorney.  Some of their work was not related to litigation, but preventative in nature and related to interpretation of statutes.  In addition, outside counsel has been retained to handle the major cases.  Barring any catastrophe in the next four months, Mr. Ziegler projected the legal fees would be kept within budget.  However, in 1990 when Kelly v. TRPA went to court in Minden, the legal budget was drastically exceeded, cash reserves were tapped into and funds were drawn from the general fund.  Senator Raggio inquired if there was a reserve account, because it did not appear so from the budget.  Mr. Ziegler answered there was an attempt to complete each fiscal year with approximately $100,000 in reserve.

 

Mr. Dini asked if there was a possibility that Congress would pass a bill sent to them some years ago to change the make-up of the Nevada delegation to the agency.  Mr. Ziegler commented his agency had supported that change and during testimony before the Assembly Government Affairs Committee approximately two weeks ago, the committee was presented with resolutions of support from the TRPA governing board.  It was the desire of Nevada to amend the compact, but what will happen in Washington was an unknown factor.

 

Mr. Dini commented since Mr. Ziegler had been on the board of this agency, the atmosphere had been much better, one of cooperation with everyone and the property owners felt much more comfortable than in the past.  As a legislator, Mr. Dini stated he felt much better about the way the agency was handled.  To explain, this agency had been very controversial since 1981 before Mr. Ziegler arrived.

 

Senator O'Donnell inquired if either attorney general from California or Nevada became involved in TRPA litigation.  Mr. Ziegler replied no.

 

There being no further business, Chairman Arberry adjourned the hearing at 4:15 p.m.

 

                                          Respectfully submitted,

 

 

      ______________________________

                                          Reba Coombs, Secretary

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Senate Committee on Finance and

Assembly Committee on Ways and Means

February 16, 1993

Page 1