MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
February 25, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 8:00 a.m., on Thursday, February 25, 1993, in Room 351 of the Legislative Building, Carson City, Nevada. Exhibit A is the hearing agenda, 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
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
VOCATIONAL REHABILITATION - PAGE 1017
Mr. Stephen Shaw, Administrator of the Rehabilitation Division for the Department of Human Resources, gave a brief overview of the Division of Rehabilitation. Mr. Shaw stated the mission of the division was to plan, implement and coordinate an array of programs and activities of prevention, assessment, training, treatment and placement necessary to enable Nevadans with functional disabilities, especially those with the most severe disabilities, to work and live independently and drug free. The Rehabilitation Division directed services provided through the Bureau of Alcohol and Drug Abuse, the Bureau of Disability Adjudication, the Bureau of Services to the Blind, the Bureau of Vocational Rehabilitation and Developmental Disabilities. There were very different delivery systems within the various bureaus. For instance, in the Bureau of Vocational Rehabilitation, state employees delivered services throughout the state and in the case of the Bureau of Alcohol and Drug Abuse, services were delivered by organizations who received pass-through funds. There was a wide range of funding mixes ranging from 100 percent state funding to 100 percent federal funding and everything in between.
Mr. Shaw continued the governor's proposal for State Industrial Insurance System (SIIS) reform and government reorganization had significantly affected the budget request of the Rehabilitation Division. Three significant changes included transferring the Bureau of Alcohol and Drug Abuse to the Health Division; transferring the Rehabilitation Division from the Department of Human Resources to a new department of Employment, Training and Rehabilitation with the attendant reorganization savings; and transferring the responsibility for the vocational rehabilitation of injured workers from SIIS to the Rehabilitation Division along with the assignment of resources necessary to accomplish the job. The governor's recommendation for the state general fund support to the programs of the Rehabilitation Division was 22 percent or $2.8 million less for the coming biennium than was appropriated by the legislature for the current biennium. However, Mr. Shaw maintained, the division's non-state funding resources had been increased by $2.4 million. He acknowledged some of the state funding received could not be offset with federal funds because there was no provision, particularly in the Deaf Resources Center.
Mr. Shaw noted it had been very difficult to cut the division's budgets as there was not much fat. It had been necessary to prioritize the 14 disability groups and the decisions had been difficult. The core services were preserved and new programs were cut. New programs had not been implemented except the Traumatic Brain Injury Program which was deferred until FY 93.
Mr. Shaw commented some of the budgets included new or expanded initiatives, but the expansions relied on support from non-state resources or the budget did not meet the definition of expansion. The division had chosen to aggressively look for other methods of doing business in light of the budget reductions. New federal programs had been entered into where money had been recouped as never before. A cooperative agreement had been entered into with SIIS pursuant to the mandates of SB 7 of the sixty-sixth session to generate revenues in the rural areas. A conscious strategy had been established to capture redistribution savings. Mr. Shaw explained that at the end of the federal fiscal year, if any state was not able to match its federal allocation for the vocational rehabilitation program, the remaining funds were redistributed to states which could match the funds. Nevada had set itself up during the entire year to bring as much of those funds into the state as possible. In previous years, $10,000-$400,000 had been brought into Nevada.
In addition, Mr. Shaw stated the division had turned its focus to outcome rather than process. As an example, the Bureau of Alcohol and Drug Abuse programs used to concentrate on the utilization rate, the number of individuals enrolled in programs, the number of beds filled, etc. But what happened to the client after release from the outpatient programs had not been monitored in the past.
The Vocational Rehabilitation budget provides all services for the Bureau of Vocational Rehabilitation. Services provided by the bureau were generally limited to those necessary to assist a person with a disability to achieve or maintain competitive employment. The ratio of funds was 78.7 percent federal dollars, 21.3 percent state dollars. Mr. Shaw stated this program had been initiated in 1920 in Nevada and had continued through this date. The cost effectiveness of this program had ranged from every dollar which went into the program to a return of $11. The Berkeley Planning Institute, a conservative fiscal planning institute, recommended the bureau receive only $4 for every dollar contributed.
The major feature of this budget was incorporation of funding for the governor's proposal to transfer responsibility for the vocational rehabilitation of injured workers from SIIS to the Rehabilitation Division. Mr. Shaw indicated funding was provided for three-quarters of FY 94 in the sum of $14.8 million and all of FY 95, at $19.3 million.
Mr. Shaw stated he would discuss the proposal without the SIIS inclusion so the committee could understand what had happened to the division without clouding the issues. The biennial comparison of all funds without SIIS were up $133,000 from the last biennium. This was due to maximizing federal revenue and the aggressive pursuit of other funds. The biennial comparison with state funds was down $534,757. There were no requests for new positions, outside the SIIS requests, in fact there was a request for a decrease of four half-time positions in the medical area. One enhancement, a high school out-reach program, was totally federally funded. If SIIS was included in the request, the biennial comparison at the federal level was up $34.3 million and the state level remained the same, down $534,757. A net of 74 new positions have been recommended, which included the SIIS positions and the decrease of positions in the medical area.
The major features were located on page 1018 of the Executive Budget, enhancement 200. Mr. Shaw commented that independent of SIIS, the agency had proposed to serve the Laughlin area. The agency had entered into a tri-state cooperative agreement with Arizona and California. In the Laughlin area in particular, there had been controversy between the three states as to who actually would provide services. The agreement had ensured all three states would provide full case services to people with disabilities.
Mr. Marvel asked if the new positions recommended through the SIIS consolidation would be paid for with SIIS funds. Mr. Shaw indicated that was correct. Mr. Marvel asked how those funds would be accounted for. Mr. Shaw replied the SIIS funds would be separated from other general fund or federal dollars the agency received. Mr. Marvel commented the premium payers would be very interested in how those funds were spent. If the consolidation occurred, Mr. Shaw said, the accounting would be very important and the agency had the data system to track various funding sources.
Chairman Arberry called attention to the expenditures category on page 1017 of the Executive Budget, and asked Mr. Shaw to address the equipment line item which had an agency request of $3,000 while the governor had recommended $17,800. Mr. Shaw introduced John Orr, Deputy Administrator for the Rehabilitation Division. Mr. Orr replied $14,826 which was shown in the revenue category as an agency transfer was three-quarters of a year's support for the SIIS responsibility. That support was spread throughout the budget. The $14,800 difference would be used to purchase telephones and some basic office equipment for the 74 new positions. Chairman Arberry asked Mr. Orr to provide the committee with a breakdown of the $17,800 figure. Mr. Orr replied he had a complete breakdown of the SIIS funds and how they were spread throughout the budget. He presented the committee with Exhibit C.
Chairman Arberry asked for an explanation of the case services line item where the funding request and recommendation differed by approximately $12 million. Mr. Shaw agreed this was a large difference and included approximately 3,500 new SIIS clients. The original budget proposal submitted in September did not include or envision the responsibility for SIIS. Chairman Arberry asked if the 3,500 clients would be in addition to the existing clients. Mr. Shaw stated that was correct. The budget was originally built on the Legislative Counsel Bureau 1990 audit which included 3,587 clients served by vocational rehabilitation in SIIS. This was the source used to build the budget. The information received from SIIS and recently from Senate Finance revealed the actual clientele being served was 3,451.
Chairman Arberry referred to the data processing line item and requested an explanation of the jump from the agency request to the governor's recommendation. Mr. Orr responded this increase was again related to the SIIS transfer. The funds would be used to purchase a PC unit which was compatible with the division network for each of the 47 counselors and four supervisors which were included in the SIIS component.
Ms. Giunchigliani asked what positions, excluding the 47 counselors and four supervisors, would encompass the 74 new positions. Mr. Shaw replied 23 would be rehabilitation technicians, four of which were supervisors. The total number transferred would be 79, 74 positions in this budget and five accounting specialists which will be placed in the administrative budget. The four counselor supervisors was a very slim figure. The only way this could be effectively handled would be to build on the existing structure. The entire SIIS proposal was built on the existing structure.
Ms. Giunchigliani asked what happened to the nursing positions. Mr. Shaw remarked when the Peat Marwick study on reorganization became available, the governor challenged the agency to include any ideas they might have. This transfer was originally proposed by the Rehabilitation Division. The budget was built on the number and type of positions needed by the division, independent of SIIS. If the reorganization was approved, the division would hire the necessary positions. If there were people in SIIS who qualified for those positions, they would be hired. Forrest Thorne, Deputy Budget Administrator, added the nurses had been dropped contingent upon SIIS implementing a tightly controlled managed care program. Those case management services which would be normally provided by nurses would be provided by the managed care contractor. Ms. Giunchigliani commented that would be contingent upon how the contract was written, which was still under discussion. Mr. Thorne said that was correct. If this plan did not come to fruition, some of those positions would have to be reinstated. Ms. Giunchigliani remarked in the Coopers & Lybrand report, a report which formulated a different management system, the nurses would be part of the recommended positions.
Ms. Giunchigliani inquired how many and what type of facilities were located in the state. She indicated her reason for asking was the possibility of using alternative sites. Mr. Shaw replied offices were located in every major metropolitan area and in most of the rural areas. Carson City was considered a rural area along with Fallon, Winnemucca, Elko, Ely and Hawthorne. Ms. Giunchigliani asked if the Jean Hanna Clark facility could be used in the southern part of the state because of the additional SIIS clients. Mr. Shaw indicated a proposal had not been put together and he had been asked not to do so. However, additional offices were located in Henderson, Las Vegas, the main office located on Belrose and five out-reach offices in Las Vegas. In Reno, there was a central office and three out-reach offices. Ms. Giunchigliani asked if these offices were built into their budget in regard to assessments, equipment and all other impacts the SIIS proposal would have on the agency. Mr. Shaw indicated that was correct.
Mrs. Williams mentioned there had been a discussion as to the best way to handle the differences between vocational rehabilitation and medical rehabilitation. She inquired if any conclusion had been reached on the issue as they were two completely different types of rehabilitation. Mrs. Williams also expressed her concerns regarding the location on Belrose and dealing with SIIS clients. The offices were located on the second floor with access via a narrow stairway which would be difficult to negotiate. Mr. Shaw remarked his agency dealt with disabled people every day. The elevators at the office were enlarged to accommodate the disabled. The offices were actually located on the first and second floor and had been for some years. They were in complete compliance with the Americans With Disabilities Act which had some very strict requirements.
Mrs. Williams reiterated her concerns of medical versus vocational rehabilitation. They were two very different kinds of rehabilitation and she asked if the agency was prepared to handle both types. She could not understand why the Jean Hanna Clark facility was ruled out as another facility for SIIS clients needing medical rehabilitation. Ms. Giunchigliani stated the rehabilitation issue was before the Assembly Labor and Management Committee. The facility was under-utilized and currently had vocational assessment capability, but was primarily used for physical therapy. The physical therapy component would remain with the system. The possibility should be explored to have the physical therapy service utilized for the vocational component which was in existence at Jean Hanna Clark. Mrs. Williams explained her subcommittee would encompass rehabilitation and she was interested in knowing why a state-of-the-art medical rehabilitation center would not be utilized. Mr. Shaw responded in northern Nevada there was no Jean Hanna Clark facility. SIIS rehabilitation service in northern Nevada was purchased--in other words, it was privatized. The budget contained a breakdown on the amount spent on private physicians. He explained he was not familiar with the services provided by Jean Hanna Clark and this had not been included in the SIIS proposal. Rather than hire a physical therapist, occupational therapist or physician, the services were purchased.
Mr. Shaw pointed out four people had been laid off recently, two physicians and two registered nurses. The positions had been in the rehabilitation budget for a number of years, for so long that the effectiveness of medical staff utilization had not been considered for some time. After a study, it was discovered an average of $140 was being paid for a general medical examination. The same service could be purchased from the private sector for $70-$100. In addition, the medical staff were located in the central offices in Las Vegas and Reno. What had been originally envisioned would be for the client to be walked down the hall to the medical staff and be immediately given a physical examination. It soon became apparent there were too many clients and instead of getting the examination then, an appointment would have to be made for two weeks later, which was very inconvenient, especially for a client living across town. In addition to providing better service to the client, a doctor's appointment could be made earlier and closer to the client's home by using the private sector.
Mr. Shaw remarked he was not sure if the Jean Hanna Clark facility could be used or could provide better services. If there was a request to look into the facility, he would do so. Mrs. Williams commented her concern was the agency would not be dealing with the same population as before. The needs of the agency and the needs for service would be entirely different than in the past. Mr. Orr added he believed Mrs. Williams had put her finger on the main issue regarding SIIS rehabilitation and what the division's role would be. SIIS was an insurance company which was created to protect employers, the premium payers, from tort liability. As an insurance company, it was responsible for the immediate trauma care and post-trauma care and treatment. The Rehabilitation Division was not an insurance company, but a jobs program to put people to work. The element of SIIS which had been assigned to rehabilitation and to find work for clients was very different from this agency's rehabilitation function. Mr. Orr believed the delivery system of this agency would better serve that population from a job standpoint, not from medical rehabilitation or therapy. He felt that was an issue the legislature would have to deal with this session. Mrs. Williams remarked this was an area which would have to be examined in more depth in subcommittee.
Chairman Arberry asked what services would be provided in Laughlin. Mr. Shaw replied there was a full case service budget there to serve people with disabilities in Laughlin. This was again independent of the SIIS proposal. There had been no allocation of positions to specific geographic areas, but in all likelihood, there would be a counselor stationed full time in Laughlin. A great area of service need had been found in Laughlin where there was no presence. This budget proposed a presence which would be funded with federal dollars.
Chairman Arberry asked for a breakdown on the projected clients and their needs in the area. Mr. Shaw replied he had no breakdown. The need was based on the participation in the tri-state task force during the last year and a half and hearing the residents of Laughlin complain over the lack of services offered by the state. A demographic break-out of the estimates of people with disabilities, without reason to believe Laughlin was any different, showed there needed to be a presence by the state and particularly from the Rehabilitation Division. A half-time counselor had been funded from the Bureau of Alcohol and Drug Abuse who was located in Laughlin. There was an attempt to service that major area, but what exactly was needed was unknown at this time. A contract had been entered into with the University of Nevada to do a full scale needs assessment and survey throughout the state. This would reveal the needs of Laughlin, Battle Mountain, Las Vegas, etc., and would be broken down by types of disability and needs. Chairman Arberry asked if, under the assumption this was approved, there was a location or office in which to work. Mr. Shaw believed the city of Laughlin was providing space to meet with clients at the present time. There were no case service dollars to put behind the counselor or fund the necessary needs. Chairman Arberry asked if any announcements would be made to inform the general public the services would be provided. Mr. Shaw said if the budget was approved, everything in their power would be done to treat Laughlin like every other area in the state. Technically, the state was out of compliance with the Vocational Rehabilitation Program, a statewide program, by not servicing Laughlin.
Mr. Price inquired if the services received depended to any degree upon the employment location or resident location. He pointed out in Laughlin, many people worked in the casinos but lived across the river. Mr. Shaw replied the federal law which governed this program stated there would be no residency requirement. Mr. Price concluded residents could receive services from both areas. Mr. Shaw stated an informal agreement was made between California, Arizona and Nevada to ensure clients did not receive services from all three states. He remarked residents of Bullhead, Arizona were served by Nevada because federal regulations stated services could not be precluded on the basis of residency. Mr. Shaw did not object to this practice because Arizona residents contributed to the state through gaming and other revenues.
Mr. Marvel asked if case service, $13 million and $17 million, would be contract services. Mr. Shaw replied services were purchased from the private sector because the agency did not have health care specialists on staff. He asserted the program worked well and had been in existence since the 1920's.
Mr. Marvel commented the program simulated a contract and the costs were known before the services were rendered. Mr. Shaw replied the agency purchased services by the least costly method. Purchases were made from the private sector, non-profit or government agencies. For this particular program, services were most often purchased from the private sector. Mr. Marvel concluded all costs associated with the program were definitive.
Mr. Shaw emphasized the medical unit privatized services which made them available at the least costly method. He asserted through privatization the agency was able to save the state substantial sums of money. Of all of the issues in the Department of Education, Health and Human Services budgets, this was the most important.
Mrs. Evans asked where the new employees, rehabilitation counselors and technicians, would be located. Mr. Shaw explained a taskforce would allocate personnel when federal grants and requirements were known. Many of the new employees could work in conjunction with existing employees in the outreach centers. A new facility in Reno, approved last session, was scheduled to open March 10, 1993, which would provide space for several of the new employees.
Mrs. Evans asked when the transition would be complete and begin serving the public. Mr. Shaw replied October 1, 1993. Mrs. Evans asked for an outline of the transition plan. Mr. Shaw stated the plan had been developing since December, 1992 and would continue to change as a result of legislation. He would provide a copy of the transition plan to the committee.
Mrs. Evans asked if the timetable for the transition was realistic. Mr. Shaw replied the transition would be difficult between July and October and would not be completed easily because of the volume of clients and rehabilitative services. He stressed the agency would do its best to have a smooth transition, however, he was certain there would be some challenges involved. He noted the agency had an existing vocational rehabilitation counselor who SIIS contracted with because there were no delivery systems in the rural areas. Although Reno's population was 250,000, SIIS had no rehabilitation counselors located there. This method was inefficient because either counselors or clients had to travel to provide or receive services. He contended SIIS did not have an adequate delivery system to serve clients in the metropolitan areas. Mr. Shaw added the original agency proposal submitted to the governor simply expanded existing services and the agency did not want to duplicate services provided by SIIS. Mr. Shaw felt a fiduciary trust and wanted to bring the situation to the attention of the legislature and the public. The agency's proposal would serve the injured worker more efficiently at a lower cost to the premium payer than SIIS.
Mrs. Evans asked for an explanation of the accounting procedure for agency transfers in this account. Mr. Thorne explained the initial transfer would be from SIIS to the Benefits Services account and then to rehabilitation. Mr. Shaw noted the state currently had two rehabilitation systems. Approximately one-third of the disabled persons had a secondary disability and SIIS only served primary industrial injuries. Therefore, clients with secondary disabilities were referred to the Rehabilitation Division. Currently, the agency was servicing over 200 SIIS clients, many of whom had a secondary disability. Mr. Shaw agreed employers, through SIIS, should not have to pay premiums for secondary disabilities. However, the Rehabilitation Division provided comprehensive vocational rehabilitation and the source or cause of the injury was not an issue.
Mr. Heller asked how the agency defined a successfully rehabilitated client. Mr. Shaw explained a successfully rehabilitated client was federally defined as achieving competitive employment in less than a 60-day period. The agency was currently performing a retention study to look at the progress after one year of employment.
Mr. Heller asked why client eligibility had dropped significantly since 1992. He noted 65 percent of applicants were determined to be eligible in FY 92; the same projection dropped to 43 percent in FY 95. Mr. Orr answered vocational rehabilitation was an eligibility program as opposed to an entitlement program. The eligibility requirements were twofold: (1) clients must have a medically documented disability which constituted a substantial impediment to employment; and (2) the provision of rehabilitation service would benefit the client in terms of employability. If a client's disability did not constitute a barrier to employment, he/she would be ineligible for the program. Another client might apply for services not related to vocational rehabilitation. Mr. Orr explained eligibility projections for the next biennium should have been adjusted to reflect the number of actual clients served in FY 92. Mr. Shaw stated prisoners routinely applied for services and were denied because they were not disabled. Occasionally, disabled applicants were denied services because their disability did not impede employment. Mr. Heller concluded projections for the next biennium had not been adjusted for the actual number of clients served in FY 92 and were therefore invalid. Mr. Orr disagreed and explained performance indicators for the coming biennium were adopted before FY 92 was closed. Therefore, the number of clients served in FY 92 was not known. He agreed the agency should have adjusted projections to reflect the number of clients served in FY 92. He noted the Senate Finance Committee requested revised performance indicators which projected the number of clients to be served if the SIIS function was transferred. Mr. Heller requested a copy of the revised performance indicators.
Mr. Heller noted the agency's projections for successful rehabilitation increased from 25 percent to 41 percent over the next biennium. He asked the bench mark the agency used to project successful rehabilitation. Mr. Orr replied a percentage bench mark was not used. He explained three years ago when Mr. Shaw became administrator, the agency disposed of the work they were not proud of, such as qualifying a client who needed a hearing aid as a successful rehabilitation. Mr. Shaw interjected successful rehabilitation projections were twice as high three years ago because they were based on a broad definition of successful rehabilitation.
Ms. Tiffany asked for a description of the client tracking system. Mr. Shaw replied the agency's tracking system was extensive and could track the progress of clients from training through employment. Ms. Tiffany noted a $250,000 data processing recommendation to assist in the transfer of SIIS claimants. She asked if the existing data processing system could be utilized for SIIS claimants. She asserted a 51 personal computer (PC) local area network was very large. Mr. Orr replied the current system was able to accommodate a 51 PC network or larger.
Ms. Tiffany asked who was developing the software for the system. Mr. Orr replied the case management system was being developed through a firm in New Hampshire. The software system had been adopted by Oregon and New Hampshire agencies and was being customized for Nevada. Ms. Tiffany asked if the additional PCs were needed since the software would be loaded on existing PCs. Mr. Orr replied the additional PCs would provide service for SIIS functions. He added the program would also be loaded onto existing PCs. The PCs were imperative because 74 positions were being added to the budget for the SIIS functions. He noted the current data tracking system was on a mainframe.
Ms. Tiffany asked if the SIIS data tracking system was on a PC or a mainframe and how the agency planned to transfer existing case information. Mr. Orr replied he could not answer the question at this time because they had not received information from SIIS. Ms. Tiffany asked how the agency requested additional equipment for the SIIS function, if information about the system had not been received. Mr. Orr explained new equipment budget estimates were based on the cost of including the SIIS function into the existing data processing system at the Rehabilitation Division. Ms. Tiffany stated a possible loss or duplication of information could occur as a result of insufficient planning. Mr. Shaw asserted the agency had not received information from SIIS. Ms. Tiffany stressed no purpose was served by the data processing budget if the function of the system was unknown. Mr. Shaw replied the agency had knowledge of their own system and based data processing requests on that information. Ms. Tiffany replied the agency had to integrate the two systems and was isolating itself from the SIIS data processing system.
Mrs. Williams commented the SIIS system according to Mr. Orr was set up to protect employers. However, she argued the system was set up to assist and protect injured workers as well. SIIS was not just an insurance company for the businesses of Nevada.
SOCIAL SECURITY ADMINISTRATION-
VOCATIONAL REHABILITATION (SSAVR) - PAGE 1024
Mr. Shaw explained the budget consisted of four programs which were managed out of the administrator's office: (1) Social Security Reimbursement Program; (2) Client Assistant Program; (3) Drug Addicts and Alcoholic Referral and Monitoring Program; and (4) In-Service Training Grant. Only the In-Service Training Grant utilized state funds required for a 90 percent federal 10 percent state match. The budget account was created with the consent of the legislature in 1990 to capture federal funds payable to the state agency as reimbursement for costs associated with returning social security, supplemental security and disability insurance to beneficiaries who obtained gainful employment. To date, the program brought in $311,000 at a total cost of $153,000. The profit was used to provide support for the following: (1) Personal Care Attendant Program; (2) Deaf Resources Center (3) In-Service Training; (4) Vocational Rehabilitation and to support the relocation of the Reno district office. A change in federal restrictions for the use of the money would limit future benefit to Rehabilitation Division programs, Bureau of Services to the Blind and Bureau of Vocational Rehabilitation. The Client Assistant Program (CAP) provided assistance and advocacy for clients of various division programs. CAP was funded entirely by federal funds. Federal reports recognized Nevada's CAP as one of the best in the nation.
Mr. Shaw noted in three and one-half years only five lawsuits had been filed against the division, three of which had not been resolved. He attributed the lack of lawsuits to the CAP program because it acted as a client advocate and ombudsman. He planned to expand the program if the SIIS responsibility was transferred to the agency.
The Drug and Alcoholics (D&A) program was created in FY 93 pursuant to a contract with the Social Security Administration. The program reimbursed the agency for costs associated with monitoring people who were on social security disability for drug or alcohol abuse. An agency caseworker monitored the recipients to ensure they continued treatment.
The In-Service Training Grant was a continuing federal grant to the agency to provide developmental training to state employees engaged in vocational and other rehabilitation. There were no new positions requested in the budget. Mr. Shaw noted state funding was transferred from two other budgets and consolidated in the Social Security Administration-Vocational Rehabilitation account.
Chairman Arberry noted in-service training performance indicators and asked if the item should be revisited in the budget since a new training assistant position was going to coordinate additional training classes. Mr. Orr stated the performance indicator was based on a federal report the agency had been concerned about from the start. He explained the report included information that the agency provided training to 597 employees in 1992 when, in fact, the agency had trained only 226 employees. The problem was the way the federal government calculated the number of training events. The number of training events would not increase because the number of employees and the budget available to provide training would not increase.
Chairman Arberry asked what impact the new training assistant would have on the number of training events. Mr. Orr explained the primary function of the position would be to maintain files, process paperwork and arrange training events and locations. In the past these functions had been performed by other members of the staff; however, due to staff reductions this was no longer possible. Mr. Shaw clarified the federal government would be charged for these functions rather than absorbing the functions in other areas of the agency.
Mrs. Williams asked if the agency provided in-service training to employees of other agencies performing similar functions for the federal social security administration. Mr. Shaw explained the SSAVR reimbursement program, which was fully funded through reimbursements from social security, funded a research analyst position which had been developed as a resource for the division's staff and any other staff which dealt with social security issues. A library of resource material was being developed and was freely distributed to other agencies.
Mrs. Williams repeated her previous question and asked if the in-service training was extended to employees of other agencies which dealt with related social security issues. Mr. Orr explained the federal grant required the training manager position to spend not less than 80 percent of its time performing in-service training for the vocational rehabilitation program. Mr. Orr explained if the agency had available space, other agencies were invited to attend training events.
Mrs. Williams asked why a decrease in the number of training events, from 597 to 405, had occurred. Mr. Orr restated the projections should have been revised to reflect FY 92 actual. Mrs. Williams requested a copy of the revised performance indicators. Mr. Shaw interjected the agency had joined the Nevada Workforce Agencies which was a conglomeration of agencies dealing with employment issues such as Welfare, the Employment Security Department (EDS), SIIS and the Job Training Partnership Act. The purpose of the group was to participate in training programs offered by each agency.
HEARING DEVICES PROGRAM - PAGE 1029
Mr. Shaw explained the account was a repository for telephone surcharges collected by the Public Service Commission (PSC) for the purpose of distributing telecommunication devices for the deaf (TDD) and operation of the statewide TDD relay system. The budget was subject to PSC approval and would be presented at the PSC's April 1, 1993, meeting. There were no general fund appropriations or additional positions requested for the budget. The significant increase in the budget resulted from Americans with Disabilities Act (ADA) compliance requirements. The current TDD relay system was close to full compliance with ADA requirements, with Nevada being one of the few states with a system online. If the budget was approved by the PSC, Nevada's TDD relay system would be capable of international calls and would be in full compliance with ADA requirements. The money was collected by the agency and distributed to private organizations. The TDD relay system was operated by Sprint.
Mrs. Williams asked if the agency made the application to the PSC for increased funding. Mr. Shaw said the applications would be processed by April 1, 1993. He supported additional administrative funds to the Deaf Resource Center. He stated Nevada's TDD relay system was a model for the rest of the United States.
COMMUNITY BASED SERVICES - PAGE 1033
Mr. Shaw stated the budget passed through funds to local private agencies to provide services through local community based grant sub-recipient agencies. Included in this program were programs for support of employment, employment expansion, and assistive technology. Dropped from the account during the budget reductions was state support for the Deaf Resources Center and Supportive Employment Follow-Along. The biennial comparison for all funds was up $5,766. The governor removed all state funding from the account which was a $170,000 general fund decrease.
Mr. Shaw stated funding had been cut from all 13 disability groups. He noted the Senate Finance Committee had requested a full position paper and explanation of all budget reductions which would also be provided to the Assembly Ways and Means. He noted the TDD relay system funding increased from $6,000 to $80,000 for the Deaf Resources Center. Mr. Shaw explained the state had previously funded sign language interpreters; however, the ADA required the private sector provide the service.
Mrs. Williams asked for an explanation of the natural support concept. Mr. Shaw explained initial supportive employment services could utilize federal funds. However, these funds could not be used to provide long-term follow up support care. Natural support was defined as a coworker, relative or neighbor willing to provide long-term service to the disabled. Mr. Shaw explained the responsibility for the program had been passed on to the community based providers.
Chairman Arberry asked for an explanation of the $110,000 general fund reduction in the account. Mr. Orr explained the reduction was to the Deaf Resource Center which resulted in a $65,000 reduction to the Nevada Association for the Handicapped in Las Vegas, and a $45,000 reduction to the Northern Nevada Center for Independent Living. The allocations originally provided TDD distribution and relay services, interpreters services and community advocacy and referral services. It was the opinion of members of the agency that support provided by the PSC for the TDD distribution and relay system softened the impact of the budget cuts. The ADA requirement for private sector sponsored interpreters also softened the impact of the budget cuts. Additionally, reductions in the advocacy and referral network were partially offset through the Independent Living Center by a federal Title VI-A grant. Mr. Orr clarified he was not attempting to suggest the Deaf Resources Center services were unaffected by the budget cuts, only that the impact of the reductions had been lessened. Mr. Shaw interjected if funds became available the Deaf Resources Centers would be a top priority.
SERVICES TO THE BLIND - PAGE 1038
Mr. Shaw explained the account contained funds from various sources to support programs such as vocational rehabilitation, social services under Title XX, independent living for both the general constituency and particular services for the elderly blind, recreation and the low vision clinics. When the budget was prepared a 20 percent match requirement for the elderly blind was anticipated but not confirmed. Since that time a ten percent state match was required for FY 94 and beyond which would require approximately $21,000 in state funds in FY 94 and $28,000 thereafter. He noted these two allocations had not been included in the budget. Biennial comparison of all funds showed a reduction of $107,000 in this budget. A biennial comparison of state funds showed a reduction of $392,000 or 25 percent of the general fund support. There was one annualized position in this budget which was the rehabilitation coordinator for the rural district in Fallon. An increase in federal funding in the elderly blind grant was anticipated.
BLIND BUSINESS ENTERPRISE PROGRAM - PAGE 1044
Mr. Shaw explained this budget supported the Bureau of Services to the Blind, whereby legally blind persons operated small businesses built and maintained by the program with the guidance and support of program staff. All activities were funded by program income and were independent of state and federal support. The budget portrayed the accumulation of five years of planning whereby accumulated reserves would be invested in major developments in Boulder City and Las Vegas. The program had 25 facilities. Mr. Shaw was proud to inform the committee the program did not utilize federal or state funds and assisted legally blind persons to become independent, productive individuals. The average salary for a blind vendor was approximately $35,000. He noted it was the only program of its kind in the United States which did not depend on tax support.
DEVELOPMENTAL DISABILITIES - PAGE 1050
Mr. Shaw explained the federally funded program supported the Governor's Developmental Disabilities Counsel and provided start up and limited continuing support for community based programs serving developmentally disabled Nevadans. During the present biennium, start up funding provided by the account would fund the construction of a 28-unit housing project in Las Vegas. Start up funding for the project was $40,000 in federal funds. The total value of the project was $1.2 million. Clark County donated the property for the project and the private sector pledged to contribute a $78,000 per year rent subsidy over the 20-year lifetime of the project. A similar project was planned for construction in Reno which would utilize similar financing.
Mr. Shaw referred to a letter addressed to the committee from John Chambers, Chairman of the Nevada Council on Developmental Disabilities (Exhibit D) which requested an adjustment to the out-of-state travel category. Mr. Orr explained the agency requested a $5,471 increase in out-of-state travel which was not recommended by the governor. The letter petitioned the committee for funding. Mr. Orr explained out-of-state funds would allow travel to the National Developmental Disabilities Counsel Conference and Planning sessions.
Mrs. Williams asked if the rent charges for the Nouthern Nevada Children's Home would be paid to the Children's Division. Mr. Orr explained an agreement had been reached between Community Based Services and the Developmental Disabilities program and Child and Family Services whereby the programs would pay $.50/square foot per year in building rent to the Children's Division. The building rent had been inadvertently omitted from the budget. Mr. Shaw requested the budget office split a $6,300 per year rent allocation between this account and the Community Based budget account. Rochelle Summers, Principal Budget Analyst, explained rent had not been allocated to the budget because free rent had been anticipated. Subsequently the budget office was informed rent would be charged for seven months of FY 94 and a full year in FY 95. She noted the Developmental Disabilities budget account would be revised to reflect $3,360 in FY 94 and $5,760 in FY 95 in the operating category for building rent. Ms. Summers suggested reducing the grants category to make the rent adjustment.
Ms. Giunchigliani asked if adjustments would have to be made to both this account and the Community Based Services accounts. Ms. Summers explained rent for the Community Based Services would be absorbed within the account.
Mr. Shaw asserted building renovations made to the cottages at the Northern Nevada Children's Home were a good example of efficient and innovative government. He explained building renovations were completed by a disabled contractor and prison laborers. He asserted this type of innovative thinking made government more efficient.
Chairman Arberry asked where the building was located. Mr. Shaw replied on the campus of the Northern Nevada Children's Home.
FINANCIAL ASSISTANCE FOR PHYSICALLY DISABLED - PAGE 1055
Mr. Shaw explained the program contained state funded support for the Personal Care Attendant Program whose goal was to avoid institutionalization of persons with severe disabilities by providing in-home attendant care. Services were provided through community based providers. Mr. Shaw asserted increased payroll and insurance costs had deflated the purchasing power of the state funds originally calculated to serve 100 persons per year. Even with $140,000 in one-time supplemental funds from the division the program would only provide assistance to 76 persons in FY 93. The governor's recommendation would augment the state support by the amount of the one-time supplement but would serve only 64 persons in each year of the biennium. Mr. Shaw noted this was the only program unaffected by budget reductions. The division allocated money from other accounts and froze available positions to maintain the level of the current program. He explained as a result of an ESD and SIIS ruling the personal care attendants were no longer considered private contractors. Therefore, community based agencies were required to hire them as employees which increased overhead costs. He asserted the need for the program was greater than the services available. The disabled persons that rely on the program insisted that services not be reduced.
Mrs. Williams asked the impact of waiting lists and increased costs of reducing the number of participants in the program. Mr. Orr stated the current waiting list consisted of 78 persons, 42 in the north and 36 in the south. He indicated the waiting list underestimated the number of individuals in need of services because applicants became frustrated with the waiting list and did not apply. The Developmental Disabilities Council estimated there were 6,750 Nevadans that could benefit from the program.
Mrs. Williams asked if the agency was able to estimate the number of persons who, as a result of not receiving in-home care, moved to residential care. Mr. Orr stated the division had anecdotal evidence indicating this conclusion; however, when applicants dropped off of the formal tracking system, they were no longer officially monitored. Mrs. Williams asked if information could be extrapolated to demonstrate the cost of participation in the Personal Care Attendant Program and residential care. Mr. Orr stated with some effort and participation from other agencies the information could be gathered and analyzed. Mrs. Williams suggested circulating a waiting list through all agencies offering residential care. Mr. Shaw stated the agency would attempt to provide the information.
Ms. Giunchigliani asked if grant funds for United Cerebral Palsy funded a portion of the budget. Mr. Shaw confirmed the grant funded $500,000 in each year of the biennium.
Mr. Perkins asked if it was possible to determine the number of residential care participants eligible for the Attendant Care Program. Mr. Shaw explained the Welfare Division offered two similar programs both of which were paid by Medicaid. Mr. Shaw stated Nevada had the best personal care attendant program in the United States. With cooperation, the number of eligible participants could be derived.
Mrs. Williams asserted all of the programs served distinct populations. Participants in the Attendant Care Program were only physically impaired, while participants in the other programs could have several barriers to independent living. Mr. Shaw agreed the populations did vary. He commented many of the participants in the Attendant Care Program were full-time workers. He explained if the attendant care was not available, participants would become unemployed and have to receive social security disability.
Mr. Marvel stated he was in favor of the program because it was highly cost effective and kept people out of institutions.
Ms. Giunchigliani asked if a lawsuit from an independent contractor was the cause of increased overhead costs for the Attendant Care Program. Mr. Shaw stated the SIIS/ESD ruling resulted from a personal care attendant work injury. When the attendant filed a SIIS claim, no account was found. A subsequent ruling from SIIS required the establishment of an account. Ms. Giunchigliani asked for additional information on the ruling. She concluded the Personal Care Attendant Program budget had not received budget reductions, however, available space in the program had been reduced as a result of increased overhead costs. Mr. Shaw noted when Personal Care Attendants (PCAs) were contacted, there were more complaints, lower quality of care and a higher personnel turnover rate. He asserted quality of care would be reduced if the program returned to contracted PCAs.
TRAUMATIC HEAD INJURY PROGRAM - PAGE 1057
Mr. Shaw commented on the bipartisan agreement made between the executive and legislative branch for this budget. The program was a success. He explained the southern Nevada facility avoided budget reductions by delaying the implementation of the program. The program was started in April, 1993, with federal funds from the Developmental Disabilities Council and other resources. He commented Chairman Arberry and Mrs. Williams were instrumental in implementing the program.
Mr. Shaw indicated the facility saved the state $4,000 per day through contracted privatization. Surrounding proprietary rehabilitation hospitals were lowering rates to compete with the facility. The contractor planned to duplicate the facility in Reno in the current biennium with no additional costs. The program was attempting to return two NRS 395 recipients to the state. Current out-of-state charges were $320,000 and $290,000 per year for the recipients. If out-of-state charges were avoided for one recipient it would pay for the Traumatic Head Injury facility for one year.
Chairman Arberry requested the agency to submit a report on the success of the program as it related to the NRS 395 program recipients.
Chairman Arberry asked for an update on the facility planned for construction in Reno. Mr. Shaw explained construction on the project would not begin until the contractor was sure it was financially secure. Mr. Shaw noted the agency requested a ten percent decrease in the account. He would provide information on the project at a later date.
Ms. Giunchigliani asked why the budget had been reduced by ten percent. Mr. Shaw replied with the exception of the Personal Care Attendant Program, all of the Department of Education, Health and Human Services budgets had been reduced. Ms. Giunchigliani asked how many clients were being served. Mr. Shaw replied it was a 15 space day-treatment program with an eight bed residential capacity. The contractors were negotiating another eight bed facility which would increase the capacity to 16 beds. Ms. Giunchigliani asked if there was respite funding in the budget. Mr. Shaw replied respite care had been in the Personal Care Attendant Program but was not utilized because of the budget reductions. Mr. Orr explained the contractor agreed to proceed with the same level of service and build new capacity in Reno in spite of the reductions. Mr. Shaw stated this was a good example of how privatization worked for the benefit of disabled Nevadans.
ALCOHOL AND DRUG REHABILITATION - PAGE 847
Elizabeth Breshears, Chief, Bureau of Alcohol and Drug Abuse (BADA), explained the program was the primary treatment and prevention center in the state. They provided no direct services, instead the agency accredited drug treatment programs and ensured quality of care. The agency provided training to professionals in the substance abuse field and technical assistance to prevention and treatment programs. The agency certified drug and alcohol counselors and program administrators. All of the above duties utilized approximately ten percent of the budget. The remainder was awarded on a competitive basis to community based, non-profit programs. The agency funded 65 prevention programs and 64 treatment programs in 29 agencies.
Ms. Breshears stated BADA funding was severely cut during the last biennium. She explained acquisition of additional federal funds, Alcohol Drug Abuse and Mental Health Services Block Grant (ADMS), delayed budget reductions to direct treatment and programming centers supported by BADA. During the same period three of the treatment centers BADA assisted were destroyed in the Las Vegas, Rodney King riot. The ADMS grant funded over 40 percent of the BADA budget. Some of the services for the program would be reduced because of new federal unfunded mandates.
Mrs. Evans asked for an explanation of the new federal unfunded mandates. Ms. Breshears replied the net increase from new federal allocations was $25,000; therefore, mandates attached to funding would exceed the net gain. Mrs. Evans requested information about the new federal mandates.
Mrs. Williams asked why BADA was proposed for transfer to the Health Division. Ms. Breshears explained under the proposed reorganization, the focus of the Rehabilitation Division would be jobs. The governor's office wanted to ensure the drug treatment and prevention remained meaningful and recommended the agency as part of the Department of Human Resources. The transfer to the Health Division was recommended because federal mandates required BADA to perform primary health care such as HIV and tuberculosis testing/treatment and prenatal care for pregnant, addicted women. Mr. Shaw added drug and alcohol abuse was being perceived as a public health issue.
Mrs. Williams asked for additional information on the latch-key program. Ms. Breshears stated despite budget reductions, services in the after school program were not reduced. Additional Title VI-A funds totaling $98,000 were transferred to the program.
Ms. Tiffany asked for a description of the population served by the BADA program, specifically, were participants long or short-term residents. Ms. Breshears replied demographics such as education and economic status were available; however, residency information was not. Ms. Tiffany suggested adding residency and employment history information to the demographics.
Mr. Marvel asked where the alcohol tax program was located in the Executive Budget. Ms. Breshears replied the budget was on page 854. Mr. Marvel asked if the revenue from the program was reflected in the BADA budget account. Ms. Breshears explained all revenue from the alcohol tax program went directly to the community based programs mentioned earlier. Therefore, the BADA account did not reflect the revenue from the alcohol tax program.
Mrs. Williams asked if BADA provided medical rehabilitation services. Ms. Breshears replied they did not. Mr. Shaw explained ADMS prohibited medical model treatment, however, social model detoxification was permitted and performed by BADA.
PUBLIC TESTIMONY
Kevin Quint, President, Nevada Association of State Alcohol and Drug Abuse Programs, represented the non-profit alcohol and drug abuse treatment centers funded by BADA in Nevada. Mr. Quint explained the viability of providers depended on accreditation from BADA. He recognized BADA was being mandated by federal block grant regulations to provide additional services with fewer staff members. He urged the committee to avoid decreasing BADA staff.
Mr. Quint asserted after treatment, drug and alcohol abuser relapse was common. On average, recovery took four to five treatment episodes. Long-term studies revealed patients five years post- treatment had a higher rate of employment and utilized fewer criminal justice, social and health care services. He explained a $1 treatment investment returned $11 to society. He asserted in order to realize savings, adequate funding for treatment programs must be available. Mr. Quint requested comparable treatment funding over the next biennium. He argued, left untreated, the drug and alcohol abuse population had the capacity to bankrupt the health care, social services and criminal justice systems.
COMMITTEE TO HIRE HANDICAPPED - PAGE 1116
Kathy Olson, Executive Director, Governor's Committee on Employment of People with Disabilities, explained the purpose of the committee was to assist disabled persons in Nevada to become independent productive members of society. The committee consisted of volunteers from the public and private sectors. The committee advised the governor's office on various employment issues, provided technical assistance to employers and employees, developed and disseminated public education materials, formally recognized outstanding contributions which increased employment opportunities for disabled persons and coordinated special programs to eliminate attitudinal and architectural barriers to employment. The committee was affiliated with the Presidents Committee on People with Disabilities. The committee was composed of ten voluntary members appointed by the governor representing business, industry and persons with disabilities. Additionally, there were 18 advisory members appointed by the chairman of the committee.
With the help of committee members and policy development, Ms. Olson pointed out, the Imperial Palace was named as the National Employer of the Year in 1991. Over 13 percent of the Imperial Palace workforce was made up of disabled employees. The committee assisted employers by rewriting job descriptions and providing information about the ADA. Architects and engineers utilized committee services to ensure building designs provided adequate accessibility to disabled individuals.
Three staff members supported the committee: an executive director, regional representative in Las Vegas and a management assistant in Reno. A new revenue item included in the base budget was Gifts and Donations which would require the committee to raise $31,000 in FY 94 and $41,000 in FY 95. The committee was hopeful funds could be raised by charging for training and services. This would require an amendment to the committee's executive order. The committee planned to develop a fee schedule for various activities such as assisting companies with ADA overview, training, site reviews, rewriting job descriptions and reviewing blueprints.
Ms. Giunchigliani asked if the committee would be more visible to the public after the proposed reorganization. Ms. Olson replied the proposed reorganization would not change the committee's level of visibility. However, the Committee would have a closer working relationship with other employment agencies. Ms. Giunchigliani commended the committee on its excellent program.
Ms. Olson noted a $3,000 recommendation for ADA requirements such as professional interpreter services and postage for information packets mailed to employers throughout the state.
There being no further business, Chairman Arberry adjourned the hearing at 10:50 a.m.
Respectfully submitted,
______________________________
Reba Coombs, Secretary
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Assembly Committee on Ways and Means
February 25, 1993
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