MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
March 2, 1993
The Assembly Committee on Ways and Means was called to order by Vice Chairman Larry Spitler, at 8:03 a.m., on Tuesday, March 2, 1993, in Room 352 of the Legislative Building, Carson City, Nevada. EXHIBIT A is the Meeting Agenda. EXHIBIT B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
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:
Mr. Morse Arberry, Jr., Chairman (Excused)
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
Jeanne Botts, Program Analyst
STATE PARKS -- PAGE 1619
Mr. John Richardson, Administrator of State Parks, introduced himself. Mr. Marvel asked if Mr. Richardson's overview would include a discussion on Question 5 projects. Mr. Richardson stated he would provide an update. Mr. Spitler requested a discussion of Question Five at the end of the budget presentation and questions.
Mr. Richardson stated the budget includes three major sources of revenues: general fund, motor fuel tax or marina tax, and the user fees collected throughout the system. He indicated the budget supports 23 parks throughout the state, 73 permanent positions as well as seasonal salaries. The main difference between the proposed budget and the previous budget is the loss of 14 total positions. He emphasized there are no equipment funds recommended in the upcoming biennium. The remainder of the budget provides operating funds for the state parks including maintenance supplies, uniform allowances, vehicle upkeep, etc. He stated he was not familiar with the new proposal concerning boards and commissions, but did understand the new National Resources Board would be regulatory. He assumed the board members would be pleased because a number of them were more interested in serving on a regulatory board. He stated the change would not be a disadvantage.
He pointed out major maintenance on page 1621 has been reduced from $5 million down to $568,000. He stressed nearly all of the projects submitted earlier were maintenance projects and have been reduced from 28 to 5. He indicated the enhancement of $61,000 is for maintenance to buildings and grounds. He called attention to the bottom of 1621 which lists the major maintenance projects. These include the South Fork fencing is recommended as a result of mitigation for wetlands to fence out the cattle from the area; the Cave Rock boat launch estimated at $250,000 with $200,000 provided by the Department of Wildlife; Cathedral Gorge has a number of projects including the leach field for the comfort station; comprehensive revitalization of the older Cave Lake Campground; the Spring Mountain Ranch reservoir dredging, cleaning and resealing; modifications and repairs of the Sand Harbor boat launch, where $80,270 indicated is one-fourth of the total project and depends on additional support from the Department of Wildlife; and enlargement of the parking area at Sand Harbor.
Mr. Spitler noted maintenance has previously been a number one priority of the state system. He asked on page 1619 with the decrease in employee base from 82 to 73, what kind of impact would be anticipated in the ability to maintain parks adequately. Mr. Richardson stated the loss of five total positions would cause serious concern. He explained projects will need to be deferred. He pointed out the Senate Finance Committee requested a comprehensive list of all deferred maintenance which is about 200+ projects and how long each project has already been deferred. He remarked he would provide the same list to the Ways and Means Committee upon completion. Mr. Spitler inquired if this list would identify the exact kind of impacts as a result of deferment. Mr. Richardson responded impact was not requested by Senate, but he would include this information for Ways and Means.
Mr. Spitler commented as the state encourages more park usage, more wear and tear will occur. He noted the popularity of parks by the general public and their expectations of orderly parks and facilities demand adequate staffing. Mr. Spitler requested these types of impacts be included in Mr. Richardson's report, project by project or park by park.
Mr. Marvel asked how the closure of the Honor Camps would impact the Park system. Mr. Richardson explained the Senate Finance Committee had also requested an analysis, park by park, on the projected reductions and the impact of those reductions. He stated he would also forward the analysis to Ways and Means. He indicated he was not aware of exactly which honor camps would be closed and he is working on the impact in relation to the pending information.
Mr. Marvel asked why it would cost $240,000 to clean out the Spring Mountain pond. Mr. Richardson stressed the higher cost was the result of material disposal. He reiterated the large amount of silt will need to be trucked out from the site. He noted the sealing of the pond added cost because a simple seal solution would be inadequate. The final analysis cannot be completed until the dredging and materials removal is done and core samples can be taken. The estimates are based on historic data.
Ms. Giunchigliani asked if the positions recommended for elimination are administrative or worker positions. Mr. Richardson replied three clerical, three rangers, five maintenance workers, two planning and development positions and one radio technician are slated to be deleted as reorganization savings. Ms. Giunchigliani remarked the budget is essentially gutted. She indicated last session the state finally achieved the level of making parks a priority and moved toward better maintenance. Now, with the heavy snowfall, there would be additional impact on the parks over and above what was previously anticipated. Ms. Giunchigliani stressed there was no money or positions in this budget to implement the level of maintenance necessary. She asked if Mr. Richardson had discussed, conceptually, how the reorganization was going to affect parks.
Ms. Giunchigliani asked Mr. Thorne, Budget Division, if the intent was some of the Department of Wildlife's staff would be utilized to work on Park maintenance or what is envisioned for Parks. Mr. Thorne replied the purpose of bringing Parks and Wildlife together is to eliminate overlapping and make maximum use of the limited funds for maintenance projects. He noted whether this will involve using Department of Wildlife personnel, he was not aware at this time. Ms. Giunchigliani requested a delineation of what functions were overlapped between the two divisions and a statement from the Department of Wildlife as to the linking of the programs. Mr. Thorne remarked this should come from the Department of Wildlife directly.
Mrs. Williams wondered what would occur with seasonal employees. Mr. Richardson responded they would be reduced from previous years. He stated $600,000 for FY94 and $500,000 for FY95 for seasonal employees was recommended so reductions in staff would need to occur. Mrs. Williams pointed out the previous legislature's concerns over seasonal employees being employed for more than nine months which removed them from the seasonal category. She asked if the problem had been addressed. Mr. Richardson stated it had and noted the Legislature had supported the conversion of most of those seasonal to permanent, but all of those have been lost and therefore, no gain was achieved.
Mr. Spitler commented in 1991 the Legislature had looked at seasonal workers where some stayed three months in one area then moved for three months to another, thereby following the seasons with the Parks but were maintained as seasonal workers, not full time. He asked if the issue has been addressed so moving people to circumvent the system was no longer occurring. Mr. Richardson responded this was not the issue as he understood it. Rather, he noted, the situation involved those workers who were not moved around, but were being moved from position to position control number versus from park to park. He explained a number of positions are still moving from park to park, but the exact months worked was not known. He stated he would check into the issue.
Mr. Spitler queried if all Park Improvement allocations for 1989 and 1991 would be expended by June 30, 1993. Mr. Richardson replied yes, unless there were extenuating circumstances he was unaware of, all funds would be spent. Mr. Spitler reiterated Mr. Richardson foresaw no reversions or continued legislation to extend any projects from 1989 or 1991. Mr. Richardson emphasized none which he was aware of at this time. He noted extenuating circumstances could include snow not melting at South Fork early enough to start construction.
Mrs. Evans noted, under Revenues, the federal land and conservation funds seemed to be shrinking. Mr. Richardson pointed out they have been for a number of years and have gone from $3 million in 1978 to $164,000 in 1991. He stated he did not know what would be occurring with those funds. Mrs. Evans asked how those funds were earned. Mr. Richardson replied it was dependent on the level of funding Congress approved. He explained Congress has been allocating more funds to federal projects with the Forest Service, Parks Service, BLM and the such, therefore less funds are allocated to the states. He mentioned there is currently discussion, with the new President, of increasing funds to the states, but no action has been taken yet.
Mrs. Evans noted the drop in user fees, especially the drop in visitation at Floyd Lamb State Park and Spring Mountain Ranch. Mr. Richardson responded he could not explain the decreases of approximately 50,000 and about 30,000 visitors. He mentioned he had talked with the District Ranger and they believed there was no reason other than a couple of weekends of bad weather which can drop visitation rates quickly. Mr. Richardson indicated if visitation rates were analyzed over a ten-year period, substantial increases would be noted. The visitation for 1992 was 258,000, for 1991 it was 306,000 and for 1990 it was 320,000. He speculated weather could have been the factor.
Mrs. Williams asked how many seasonal workers transfer from park to park. Mr. Richardson was not aware of the current number and would provide it for the committee. Mrs. Williams wondered if there had been an increase in fees and if it was a factor in the decline of users. Mr. Richardson replied there had been no fee increase and the decline in users had been primarily due to the decreased water level in Northern Nevada reservoirs. He explained Lahontan Reservoir at its peak usage was 450,000 visitors and had dropped to 133,000. The other reservoirs have shown a 50 to 75 percent reduction in visitation.
Mrs. Williams commented on the South Fork project. The state built a $40 million dam which has never had any water in it. Then there was a request to build a water playground and subsequent maintenance. She asked how all this came about. Mr. Pete Morros, Director of the Department of Conservation and Natural Resources, explained the timing related to the completion of the South Fork dam and the extended drought has been primarily responsible for the inability to get water into the reservoir. He used the analogy there has been no money to fill the budget, likewise there has been no water to fill the reservoir. He stated the reservoir's capacity is 40,000 acre feet. Through acquisition of the Tamara water rights with the reservoir lands and some temporary changes, water has been borrowed from other entities in order to have the 10,000 acre feet currently in the reservoir. He stressed this situation should end with the current winter snowpack. He emphasized the desire to fill the reservoir and test the dam's holding ability, although its integrity is not in question. Mr. Morros noted the drought impacted all the state's reservoirs. Rye Patch Reservoir had to be drained. Lahontan Reservoir was down to the point where the fishery was barely surviving. Tahoe has been below its natural rim for nearly two years.
Mrs. Williams stated she understood the reservoir impacts, but did not understand the maintenance, fencing and water/recreation park requests in the middle of the drought. She stressed her concern of building a park around a dam and reservoir which have not even been tested. Mr. Morros reiterated it was part of the overall project for the South Fork development. The whole thrust of the project was to create a recreational facility which would be available to citizens of the state and that included a park facility. He pointed out the drought will not last forever and hopefully it is over. The water theme of the South Fork development should now become a reality. Mr. Richardson explained the fencing was specifically related to the Corps of Engineers 404 permit to keep the cattle out of the wetlands. He noted over the past year, approximately 88,000 people visited the area and its popularity has been building since the reservoir is filling up. He projected it will be one of the premier recreation areas in the state once everything is in place and Mother Nature settles down.
Mr. Marvel emphasized South Fork is a great, viable recreation area in spite of the drought. He noted it was the only place in Northern Nevada where visitors could launch a boat and waterski over the past summer. Mr. Marvel asked, with the budget cuts, will the projected vacancy savings be reachable. Mr. Richardson replied what may have to be done, as in the past, once a position becomes vacant it is left open. If a vacancy does not occur, the seasonal salaries would have to be reduced.
Mr. Spitler asked Mr. Richardson to discuss Question Five and provide a summary of the current status of the issues involved.
Mr. Richardson explained when the division testified in the 1991 session, they outlined a number of projects in terms of planning and development and the $350,000 planning funds allocated. Those planning funds would be utilized for the Spring Mountain projects already approved and the Danburg Ranch feasibility study. He elaborated the Danburg Ranch study has not yet been completed because the owner of the property is not well and does not want any planning or developing studies done until she is able to be present with the planning team. He stated the other projects slated to use the planning funds are Round Hill and the master plan for Big Bend. In addition, the legislature authorized the division to move forward on acquisition of three properties along the Carson River: Ghighlia Ranch, Amerogen Ranch, and DePaoli Ranch. Mr. Richardson indicated they have completed negotiations on the properties and should finalize them within the next few weeks.
He pointed out collaboration with Wildlife is continuing on the Little Washoe Lake property. The properties at Walker Lake will not be acquired because the owner does not wish to sell. He remarked the IFC provided the first authorization in September 1992 of the sale of bonds for the plans and specifications for all of the South Fork projects. The second authorization of bond sales would be for the actual construction of the facilities. At South Fork, the division had indicated the funds would be utilized to develop the day and overnight facilities. The legislature approved funds for the water system and planning which is currently underway, bids were let and a contractor is on line to begin upon cooperation of the weather.
Mr. Richardson stated the planning funds would be used at Walker Lake to improve the boat launch facilities and build both day-use and comfort station facilities. These plans are nearing completion and will be done by June 1993. A summary on the Old Las Vegas Mormon Fort will be submitted to the committee. Mr. Richardson indicated the final report is scheduled for completion March 31, 1993 and will be submitted to the committee then. Funds allocated for the Kershaw-Ryan State Park were for plans, specifications and first-phase development. Plans are completed and the project will go to bid soon with construction beginning when the snow melts. The Spring Mountain plans and specifications are completed and on hold until the second-phase of bond sales.
Mr. Spitler asked when the next bond sale would occur. Mr. Richardson indicated it would occur possibly when the economy improves. Mr. Thorne stated, assuming the economic conditions are appropriate, the bonds are scheduled for sale in April 1993.
Mr. Marvel asked how much was left in the total bond account. Mr. Richardson indicated Clark County had only been allocated $600,000 of its $13 million; Washoe County has spent all of its bond funds, and he was not sure the status of the Department of Wildlife's Question 5 allocation. He believed the Parks allocated 50 percent and he was not sure of the exact amount, but would provide that amount to the committee. Mr. Dini stated there was $34.2 million allocated to State Parks, $13.5 million in bonds had already been sold and $13.2 million was left from Clark County for the Wetlands Park.
Mr. Price asked what the current procedures were for naming of state parks. Mr. Richardson recommended the names with approval by Mr. Morros and inquired if any parks in Southern Nevada were slated for name changes. Mr. Richardson indicated there were none.
Mr. Humke noted the Park Advisory Committee has no salary costs and inquired if this was a change from the past. Mr. Richardson stated it was a change and the board was scheduled to be consolidated into the Natural Resources Board. He was not aware of what the future structure would be, but it would be more regulatory versus advisory as it was currently. Mr. Humke asked if the costs would be contained in the Department of Wildlife budget. Mr. Richardson indicated he did not know. Mr. Thorne remarked the support for the Natural Resources Board was included in the Department of Natural Resources budget. Mr. Humke wondered if the Park Advisory Committee's input would get lost in the proposed budget and asked Mr. Richardson to speculate on the committee's proposed role. Mr. Richardson was unable to speculate because he did not know what the proposed structure of the board would be.
Mr. Humke noted under performance indicators, page 1623 number 7, the number of interpretive programs seemed to have a high projected number for FY92 with a decline through the next few years. He asked what would cause this. Mr. Richardson reiterated this was primarily due to lack of staff. The number of programs offered and the number of people on staff are directly correlative.
Mr. Humke wondered why Mr. Richardson did not put on the slide show of a statewide pictorial tour of the parks this year. Mr. Richardson replied most of the committee members had already seen the slide show and he thought they would be bored. Mr. Humke seriously disagreed and indicated it assisted the committee especially since they are unable to look at all the parks in the state. Mr. Richardson stated, on invitation, he would be glad to provide the show.
Mrs. Evans asked the Administration what the long-term goals were for the Parks Division, especially the master plan overall and where the Administration wants the Park System to go. She commented the people comfortably passed Question Five in 1990, the Legislature provided additional funds for maintenance in 1991, tourism is still the state's number one industry, and the indicators show parks are important and part of what Nevada is all about. She stressed the state is falling back significantly with cuts in positions, equipment budgets, etc. and the result is a gross-mixed signal. Mr. Thorne replied he was not sure how to respond. He stated the parks, as with most other agencies, given the tight funding, cannot be funded for the type of maintenance required or the full range of services. He indicated he was unable to respond to the issue of where the parks rank in the overall scheme of things, but he would try to find out.
Mr. Richardson responded from his perspective, the Parks Division knows where they are going and what needs to be accomplished. He stressed they had completed a series of master plans throughout the state and included public input in the final plans. When funds become available, the list is ready for assigning funds to specific projects. He emphasized, as indicated earlier, there is a tremendous backlog in maintenance projects, never mind the new projects. All the next biennium requests are maintenance related projects.
He stressed Question Five was a new project list for the most part, but there is some maintenance included, such as Floyd Lamb Park and Spring Mountain Ranch. Mrs. Evans questioned how far the legislature should move with some of the plans in Question Five given what has happened and reductions that keep occurring. Mr. Richardson recognized some of the projects need new people just to be available while others do not. The Question Five projects which do not need staff can be moved. The projects which need staffing should not be pursued until there is someone there to protect the initial and ongoing investment.
Mrs. Evans stated she is not convinced that by merging the Parks Division with the Department of Wildlife, that Wildlife staff will assist in the parks projects.
Mr. Dini asked the Budget Division if part of Question Five bonds were sold and loaned to Clark County which required repayment. Mr. Thorne replied this was correct. Mr. Dini requested a status report on how the loan was being repaid. Mr. Thorne stated he would. Mr. Dini stated there had been previous discussion on making Topaz Lake a part of the state park system. He asked if a feasibility study had been done. Mr. Richardson indicated at a county commission meeting two months ago the issue was discussed, and the county commissioners directed the parks director to look into the opportunities which might exist for a private concessionaire. He was unaware of the status of the investigation. He gave a brief presentation to the Commissioners and it seemed that the most acceptable option at that time for the county was private concessions.
Mr. Marvel asked if there were any BDRs for revenue enhancement, such as fees on recreational vehicles, railroad cars, etc. Mr. Richardson responded there were a number of fee enhancements recommended by the subcommittee studying parks, but whether or not the BDRs will be approved, he could not say. Mr. Marvel inquired if the Parks Division had thought of raising fees and what did senior citizens pay. Mr. Richardson responded the raising of fees had been explored and senior citizens are not charged. He pointed out charging senior citizens was one of the recommendations made by the committee and he was waiting to see if this legislation would surface.
Mr. Spitler made the point the legislature builds buildings but cannot afford to put furniture in them or open a nice new park but does not have the money to provide the necessary staff. He stressed this should be looked at when funding things in general. Also, from a budget standpoint, the budget office needs to be cognizant that parks are only as good as the public has access to them. He stated the Parks Division has done a stellar job with what they have had to work with.
Mr. Richardson acknowledged no one was more excited about the budget at the end of last session than the Parks Division because it was the first time in a long time they felt they would be able to make some major steps forward in terms of staff and in dollars authorized. He reiterated, sadly, it did not happen and they were very disappointed.
Mr. Spitler asked for Public Testimony.
Mr. Frank Smith introduced himself. He stated he was present to put in a kind word for state parks, Fort Churchill in particular. As background and explanation, he noted he had been a seasonal park ranger since 1989 working at Lahontan State Recreation Area and at Fort Churchill State Historic Park where he is currently a volunteer.
He pointed out he was representing himself only, to give some insight on state parks which would be lacking from official facts and figures and different from what a member of the general public could supply. He stated some of the committee knew him as a Libertarian and might find it ironic any of that group would testify for a government expenditure of any kind. He emphasized, however, in his opinion, while most agencies do something to the people, state parks does things for the people.
He testified, state parks is an operation which, like any, functions on an equation based on labor hours to services ratio. Operational needs are difficult to predict because demand for recreation varies so highly. When demand does fall, however, labor hours are not wasted, and are spent in performing planned improvements to facilities.
He pointed out the end of the drought would mean an increase in public demand for recreational services which are, by and large, supplied by seasonal personnel. These basic services concern collection of fees and those related to safety and health of visitors. He stressed, faced with a major loss of seasonal budgets and a stricture that no parks will be closed, could only mean a decrease in fee collection and basic services when, at the end of the drought, demand will be the highest in several years. He stated it would appear this approach is the proverbial "penny-wise and pound-foolish" one, given more visitation and opportunity for increased fee collection.
He specifically addressed the situation at Fort Churchill stating, in the past there had been a park supervisor, a seasonal ranger, and a park aide for the peak season. In 1992, 120 special events had been hosted in a seven-month period. These events ranged from Living History Talks, Environmental Living Programs for Washoe County Schools, Ruins Tours for the public, and hosting many different groups in the park's group area.
He explained the loss of all or part of the seasonal budget would result in a decrease in the number of events to maintain basic service levels necessary to park operations.
He drew attention to the fact that in 1992, a capital improvement project was completed at Fort Churchill at a cost of just under a quarter of a million dollars. Construction included a new shop and office, a cannon shelter and improvements to existing facilities. He stated after moving out of the visitor center, there are plans to create a Period Room representing the Post Commander's headquarters in the 1860's. He stated this would be funded, in part, by the Nevada Civil War Volunteers.
He remarked, as authorized by the passage of Question Five in 1990, negotiations to purchase three privately owned ranches between the Fort and Lahontan reservoir were coming to fruition and all indications show parks will manage an additional 3,000 acres when the purchase is completed.
He stressed at the time when demand for programs has risen and there is more to manage, to lessen labor hours in the equation would mean a decreased response to demand. This means Fort Churchill would host fewer events and perhaps would have to close the revenue generating Group Area, but certainly offer fewer programs. Services previously provided cannot be, thus jeopardizing the good will and public relations built over the years.
Mr. Smith asked the committee's support in securing a full-time interpretive ranger position at Fort Churchill, one specializing in historical research and presenting programs unique to this park. Failing that, he requested his position be made a nine-month position. He indicated it was to be supported for six-months, but with the shrinking budget it was made four months the past two seasons and he has volunteered since September. He stressed he could vouch for the fact there was more than enough work to fill whatever position level was approved.
He pointed out some committee members might think what state parks is doing is nice but not a necessity or even that it is frivolous. But he asserted if committee members could see the eyes of understanding in school children as they make adobe bricks by hand and learn something of a soldier's life on the frontier; if they could hear some of the over 72,000 visitors who have stated "Fort Churchill is the Jewel in the Crown of State Parks"; if they could witness folks learning about Fort Churchill's unique place in Nevada's history on a daily basis, there would be no debate or hesitation about providing adequate funding.
He maintained having built parks for the people, it is necessary for the state to fund them properly for the people.
He summarized, state parks has an opportunity to continue to respond to public demands at Fort Churchill, to bring history alive and make it real to large numbers of school children and the general public. He reiterated to have such an opportunity and not seize it would be most unfortunate.
Mr. Smith thanked the committee for their time and attention. (Written testimony included as EXHIBIT D.)
W.I.C.H.E. ADMINISTRATION -- PAGE 172
Mr. Paul Page, Vice President for Development, University of Nevada - Reno, Executive Commissioner for the W.I.C.H.E. Commission, introduced himself. He explained W.I.C.H.E. is a state agency governed by NRS 397. W.I.C.H.E. is made up of three commissioners appointed by the Governor to four-year terms and administered by a director and a Management Assistant II. The program operates under two budget accounts: budget account 2995 is the administrative account and is funded by the General Fund and budget account 2661 is the Loan and Stipend account funded through General Fund appropriation and repayment of loans.
Mr. Page stated the primary focus is to provide Nevada students access to education in the professional disciplines which are not available through the state's educational system. Each field of study is funded by a support fee which is paid directly to the school on behalf of the students. The student is required to repay 25 percent of his support and to return to Nevada to practice in the profession one year for each year which he or she received support. He indicated this program is placed under Higher Education, but will remain independent and will not be affected by the reorganization. He emphasized the Commissioners are pleased with the way the program is being administered and proud to say the loan collection is going extremely well. He asked Kathalie Koche, Director of W.I.C.H.E., to present the budget.
Ms. Koche stated there are no new surprises in the budget. She elaborated the Governors recommended level is based on the FY92 funding level. There are two changes in operating expenses: an increase in regional dues to W.I.C.H.E., $73,200 to $75,000 and a request for a quarter-time Attorney General position. She explained the Attorney General's office had been very cooperative over the last biennium and the two offices worked as a team in collection of defaulted loans. The quarter-time position would additionally cover court and legal costs for publications. She reiterated, as in the last session, she has chased down delinquent W.I.C.H.E. debtors from Nova Scotia to Hawaii and sometimes there are extraordinary expenses in the publication process.
Ms. Koche addressed a portion of the performance indicators. She explained W.I.C.H.E. handles a loan portfolio of about $7.5 million. The stipend/grant portion is $4.3 million and the student loan, mandatory 25 percent payback is $3.2 million. She indicated in FY91, after the aggressive collection campaign, W.I.C.H.E. Loan exceeded their collections by 62 percent. In FY92, the projection for collections was exceeded by 55 percent.
Ms. Koche elaborated the percentage of default is holding to about $200,000 per fiscal year which represents about 15 students. This is because the majority of the students are in health-related fields which have the higher amount of funding for support fees. She stated they make up the largest portion of the fifteen which are referred to the Attorney General for collection. Ms. Koche pointed out she has talked with the Controller's Office and out of the twenty or so accounts referred to the Attorney General, collection success was approximately 55 percent for under repayment status. She indicated two or more students are still being located and two or three have filed bankruptcy.
Mr. Spitler commented, regarding the request for Attorney General services, an agency which is 100 percent funded by the General Fund, allocations for Attorney General support are provided in the Attorney General's budget. He asked why this does not occur in this agency. Mr. Hataway replied the position was kept in the W.I.C.H.E. budget because it deals primarily with loans which were originally from General Fund appropriations, but W.I.C.H.E. is different from the typical General Fund agencies. He pointed out the agency needs to count on the Attorney General's office to collect some of the delinquencies and the Budget Office believed it would be more appropriately reflected within the W.I.C.H.E. account.
Mr. Spitler inquired if this conforms with all the requirements of cost allocation in terms of how the agency relates to federal government. Mr. Hataway responded yes, it is not one of the agencies the Attorney General specifically identified. He explained the Attorney General originally requested a half-time attorney and after negotiations a quarter-time position was recommended. He pointed out in the Attorney General's office there are two non-general appropriation line items: one for the cost allocation program and the other for charges to agencies on an intermittent basis which are the occupational boards. W.I.C.H.E. would fall under the latter. Mr. Spitler stated it was still confusing why the state would charge a general fund agency for something which the general fund supports. Mr. Hataway indicated there were other functions besides the actual Attorney General's costs. These include legal notification in courts and processing of legal documents through the court system. The combination of these costs as well as the actual Attorney General's time originally came from general appropriation, but the office is trying to get the cost back into the system. Mr. Hataway reiterated the budget office believed the cost was best placed directly into the W.I.C.H.E. budget.
Mr. Spitler requested the budget office provide to the committee a breakdown of the exact costs Mr. Hataway was indicating and a rationale of why it is being paid for differently in this general fund agency. Mr. Hataway added the state is trying to protect a $7.5 million loan portfolio to get the money back which ultimately benefits the general fund. He indicated the budget office would provide the information requested.
Mr. Marvel asked for information outlining the balance of outstanding loans. Ms. Koche replied total loans outstanding represents $7.5 million. Mr. Marvel asked for an explanation as to why a non-Nevada citizen could establish preference over a Nevada citizen for W.I.C.H.E. support. Ms. Koche stated W.I.C.H.E. has a residency law in Nevada and the W.I.C.H.E. statute which requires a Nevada resident to have a one-year residency prior to the October 30 deadline. She explained there was a New York Supreme Court decision which specifically stated it was discrimination to not allow for nonnationals (foreign nationals) to apply for W.I.C.H.E. As a result of that decision, she indicated she had been precluded from excluding any one from applying for W.I.C.H.E. funding who is not a United States citizen. Therefore, she indicated, support is provided to people from the Philippines, Iran, Saudi Arabia, Chile and a number of the current applicants are from Asian counties. She pointed out, because of the Supreme Court decision and as a result of the advice from the Deputy Attorney General, W.I.C.H.E. funds must be allotted in this manner.
Mr. Marvel inquired as to the number of awards being used by non-United States citizens. Ms. Koche replied she would provide that for the committee. She estimated the number to be between 15 and 18 which was dependent on the applicant pool in the year dealt with. She elaborated Dentistry is currently a popular field with foreign nationals as with other health-related fields except for veterinary medicine.
Mr. Humke asked Ms. Koche to have the Deputy Attorney General provide a copy of the New York Supreme Court case she cited and have them prepare a memorandum to this committee analyzing the case. He asked, regarding the 55 percent success rate in going after delinquent persons, how was it measured and how was success defined. He wondered if it was full payment or was it simply finding the person and starting the collection process. Ms. Koche responded no, the persons are under repayment or have paid their loan off in full, and the success rate would be considered after they have been located. An example is a dental student who stayed in California to practice dentistry. He then decided he did not like dentistry, bought a yacht and took a trip around the world. He has relocated in California. He will begin repayment soon.
She summarized the performance indicators consider repayment payment in full for anybody who has been a pass through through the Controller's Office. She pointed out this was implemented this last biennium. Ms. Koche remarked W.I.C.H.E. never used the Controller's Office as a pass through for collections of debt. The agency certifies the debt and is the first contact to the student after which the debt transferred to the Attorney General's Office for collection. At that time, it comes back through W.I.C.H.E. and is determined to be either an under repayment or paid in full. She stated that is how the 55 percent is arrived at on those 20 or so students who have been referred through the default process.
Mr. Humke pointed out some of the performance indicators look good, but nothing is entered. He noted specifically page 174, number five. Ms. Koche indicated W.I.C.H.E. was not out of balance on any of the funding levels. Mr. Hataway explained the zero should probably be zero percent because the number indicates the amount of loans in an out-of-balance condition. It is W.I.C.H.E.'s goal to be at zero percent. Mr. Humke maintained this was a "cream puff" performance indicator because the legislature can always project the budget will be balanced.
Mr. Humke inquired on page 175, number one "Percentage of Default of Graduating Respondents," if the zeros indicated the same thing as above. Ms. Koche responded there has been a zero default rate on all questionnaires sent out, because other resources are utilized and all individuals have responded to the requests.
Mr. Humke asked if Nevada is the only state in W.I.C.H.E. with a practice requirement. Ms. Koche replied Arizona also requires practice and Colorado has some form of this requirement. She indicated Nevada is the only state with both practice and payback requirements. Mr. Humke asked Ms. Koche to discuss this policy. Ms. Koche clarified it is not a W.I.C.H.E. policy, but it is successful for the Nevada program because this program is partially funded on revenue from loan repayments. She remarked other states, such as Montana, Hawaii, Alaska, have contacted her regarding the repayment policy because they have been experiencing budget cuts and are considering the payback policy as a means of recruiting health professionals to their rural areas.
Mr. Humke asked if it was difficult to measure the practice requirement related to returning and actually opening a practice. Ms. Koche stated she goes directly to the licensing boards, locates their placement, in addition to the regional W.I.C.H.E. practice questionnaires and followup. She indicated she has had no difficulty verifying practices and even has gone so far as to drive by where an individual works or lives to make sure everything is copacetic.
Mrs. Williams stated last session she had some problems with W.I.C.H.E. and those problems have not been resolved. She pointed out as the financial situation has gotten worse the problems have only increased. She asked how much was spent per student for education. Regarding all the health professions, she commented UNLV had a physical therapy program, occupational therapy was questionable, and the library program is going away because there will be a library degree in the state. She asked what other health professions are being offered or are there any other health professions that are not offered besides optometry and dentistry?
Ms. Koche replied W.I.C.H.E. funds currently eight professional fields (optometry, pharmacy, veterinary medicine, occupational therapy, physical therapy, law and library studies). Mrs. Williams asked if there was a physical therapy degree at UNLV. Ms. Koche stated she has had discussions with Pat Whitaker at UNLV. She is in charge of graduate college admissions and has assured Ms. Koche that the physical therapy program is beginning the fall of 1993. Therefore, Ms. Koche has not requested any funding for physical therapy for the next biennium.
Mrs. Williams inquired if the number of these students returning to Nevada to practice can be calculated. Ms. Koche indicated regional W.I.C.H.E. takes a statistical count and has stated Nevada has approximately a 68 percent return on all W.I.C.H.E. fields except for law. She stated regional W.I.C.H.E. has to revise the whole process of their questionnaires for law students.
Mrs. Williams wondered, as discussed in the last session, regarding the weighting, how the students are selected and whether or not need was a factor when W.I.C.H.E. has two students who are equally qualified. Ms. Koche indicated she has implemented a process never done before called a first-time borrower's meeting. She explained, prior to her taking over the directorship for Nevada W.I.C.H.E., these students applied, sometimes by phone. This new meeting is mandatory and she has been able to determine in the interview process that W.I.C.H.E. has met a certain amount of need. During the last biennium W.I.C.H.E. supported a single parent and a grandmother.
Mrs. Williams asserted an interview does not really measure anything but the circumstances of their life. It does not established their financial condition. Mrs. Williams wanted to know if W.I.C.H.E. has utilized need, not from a personal interview but as a factor in determining who gets W.I.C.H.E. funds. She pointed out somebody who can go out and buy a yacht and go around the world because he did not like dentistry after Nevada has paid maybe $90,000 for his education was not somebody who needed the state to pay for his education.
Mr. Page replied they have two W.I.C.H.E. scores: GPA and test scores. There is no need factor in the selection. After a student realizes he has to come back to practice and has to repay the loan, W.I.C.H.E. is finding the student finds the money and decides not to take the W.I.C.H.E. scholarship.
Mrs. Williams reiterated the same discussion occurred two years ago and she suggested the students repay only 25 percent. She had also suggested to some of the students who do not get W.I.C.H.E. have the same GPAs, have the same scores, but also have need. Therefore, there is no request for diminution of the quality of the student. She pointed out, at the last session, this committee asked that need be weighted in when the decisions were made to select the students. She emphasized that once again, as we've seen so many times, not just with W.I.C.H.E., what the Legislature has asked for is totally ignored by agencies.
Mr. Page disagreed with Mrs. Williams comments stating there was a discussion, but he never, ever received notice that the Ways and Means Committee asked that need be a factor in the selection. Nor was any indication received from the Senate Finance Committee. He acknowledged the disagreement over need and his office has gone back to W.I.C.H.E. regional office. He explained no other state grants W.I.C.H.E. loans weighting on need. "We're talking about merit and that's what we've been doing."
Mrs. Williams remarked no one has suggested in any way to erode the merit factor. She explained if two students have all the same academic qualifications and one can afford to buy a yacht and the other one cannot, then that is what should be looked at. Government has an obligation when dealing with taxpayer money.
Mr. Heller read the program's mission which states it is to assist Nevada citizens to provide access to professional study and pointed out the performance indicators do not tell how well W.I.C.H.E. is assisting Nevada citizens. He asked for the number of applications received, how many were denied and how many are on a waiting list. Ms. Koche replied she has a list of applicants over the biennium, but the program is legislatively regulated to a certain number of slots to be filled.
Mr. Heller pointed out the committee's purpose is to present policy and it is difficult to make quality decisions as to the number of slots to assign for W.I.C.H.E. when the number of applicants and denials are not known. Ms. Koche stated for 1993-94 for example, there were 14 applicants in Dentistry for three slots and there were 57 applicants in Law for 12 slots. She would provide a full list to the committee. Mr. Heller requested these statistics be included as performance indicators.
Mr. Price stated W.I.C.H.E. obviously is a fine program, but over the years there have been various small controversies one of which has been raised complaints about the need factor. He asked if the state could request legislation that would set up the requirements for Nevada citizens to include a need factor. Ms. Koche replied she did not know.
Mr. Price inquired who decides the rules and sets policy. He asked if it was the compact or the state or the state's W.I.C.H.E. Board. Mr. Page answered, at the present time, it is the W.I.C.H.E. Nevada commissioners with the outlines and guidance of the state. Mr. Price pointed out there is no law, rule or compact, agreement that would prohibit having a need factor. Mr. Page replied that was correct.
Mr. Price inquired if the Board has ever discussed the option or have they ever made a conscious decision to continue awarding solely on merit and ignore need. He wondered if there has ever been a vote by the Board. Mr. Page responded it had been discussed many times. It has also been discussed with the regional W.I.C.H.E. office and with the top two other states. It has been the view of the Commission that the way it is being done is proper and should continue. The need versus merit issue is generally discussed every two years.
Mr. Price commented no formal action has been taken. Mr. Price reiterated no one has made a motion or made a positive decision up or down. Mr. Page concurred.
Ms. Koche asserted in the first-time borrower's meeting of all the students (which included some parents) interviewed thus far, only two have indicated need was not a factor for them to go to graduate school. She elaborated out of the number of interviews which she performed, which is 45 slots a year for the students and then some alternates, maybe only two have indicated they would decline W.I.C.H.E. based on the fact they do not need it. Most of the other students have indicated they would not go to school without W.I.C.H.E. support. She noted this was not based on historical data. She could only speak for the last biennium.
Ms. Giunchigliani commented on the program mission statement in regard to assisting Nevada citizens. She asked if none of Nevada's higher education system offered programs in either dentistry, law, occupational therapy, optometry, pharmacy or veterinary medicine. Ms. Koche replied that was correct. Ms. Giunchigliani noted if the discussion is on assisting Nevada citizens, then just because there is a New York ruling, it should be revisited because otherwise W.I.C.H.E. is not meeting the goal their mission statement asserts.
Ms. Giunchigliani reiterated two years ago the committee had discussed the need issue and apparently it has been discussed in the past regarding the needs requirement. She emphasized she, too, had a problem with its exclusion. She noted, since the W.I.C.H.E. commissioners do not want to take action, maybe the Legislature is going to have to take the action regarding this concern.
Ms. Giunchigliani inquired why only 25 percent is required as a payback. Ms. Koche answered the payback requirement is set by the Legislature. Ms. Giunchigliani asserted the legislature could explore full payback such as with National Direct Student Loans or increased work in residence to lower the payback. She asked if other options had been discussed depending on length of service, etc. to increase the payback levels. Ms. Koche mentioned there is currently a practice reduction requirement if a student in the health professions practices in a rural Nevada area. She stated the only variation regarding the 25 percent payback is the loan offset/pro bono program where the dental students treat indigent children of certain school districts. She noted 196 students were referred last year alone to dental students in Clark County. Ms. Giunchigliani suggested alternatives should be explored. She asserted a loan is intended to be paid back and just 25 percent or one year's service does not pay the loan back.
Ms. Giunchigliani commented two years ago another Assemblyman had suggested the publication of the names of individuals in loan default and she suggested addressing that issue again. She reiterated these are taxpayer monies and, at some point, the delinquent students need to be held responsible for those dollars invested in them by the state or, perhaps, publish a thank you to those who have repaid their 25 percent and service commitments. Ms. Giunchigliani questioned why the program should even exist if it is not, number one, dealing with Nevada citizens and, number two, if additional payback is not being pursued and, number three, if the issue of need is not addressed.
W.I.C.H.E. LOAN & STIPEND -- PAGE 176
Ms. Koche stated the budget reflects the cuts in Physical Therapy slots due to the UNLV program beginning in 1993. There is a reduction in Law from 15 to 12 slots. The Graduate of Library Science has been eliminated because it will be offered at UNR as a telecourse from the University of Arizona. There is a one slot reduction in veterinary medicine and there is a three-slot reduction recommended in the pharmacy program. Ms. Koche stated the rationale used in choosing certain field reductions was the demand. She indicated there is a demand for all fields, but in order to meet the targeted budget reductions, she looked at the job market, projected profession growth, and the loan repayment capability of all student loans.
Mr. Spitler asked if the reserve level will be adequate to meet the needs projected. Ms. Koche deferred to the budget office. Mr. Hataway replied the budget office believes the reserve, based upon the progressive nature of W.I.C.H.E.'s collection practice over the last biennium, will be adequate. He noted, for 1994, the reserve balance is approximately 20 percent of the total resources available and it drops to approximately 8 percent for 1995. He explained the legislature approved a reserve for FY93 at $138,000 and the projected reserve will be several times that amount and the budget division recently processed another work program to increase the authority for Ms. Koche to collect even more. Mr. Hataway asserted, at this stage, the reserve level of $77,000 is reasonable. Based on the current revenue level, it could be a little higher.
Mr. Spitler asked W.I.C.H.E. to provide for the committee: (1) how dues paid to the W.I.C.H.E. regional office are spent particularly looking at the higher-level administrative costs and (2) the waiting list for people wanting to get into the various programs. He noted there seems to be a disproportionate number of students going into law. He asked what other areas of study Nevada students are having a difficult time getting into in terms of the programs not available here and need to be pursued in other states.
Mr. Marvel asked if any applicants are directed to the Sally May program. Ms. Koche replied, as a backup program, students are referred there because W.I.C.H.E. funds can be applied to tuition only and other federal loans are recommended to offset other costs. She explained veterinary medicine students have provided her with feedback that they get other student loans at the federal level such as Stafford which may be through Sally May. She pointed out some of the veterinary medicine students are graduating with a debt of nearly $100,000.
Mrs. Williams commented she supported this type of program and it is important for students to have this available. She reiterated her motives are to bring something back to the State of Nevada as she proposed last session with a greatly resisted bill which would have helped with budgets because some manpower would have been available. She explained this is what the President is currently attempting. She concluded regarding the comment of "this is the way it has always been done, etc.," the current legislature is facing enormous changes because the way it has previously been done has not been good enough. She suggested to Ms. Koche to also look in terms of not just helping the legislature in the process, but also as a way to help Nevada students.
DEPARTMENT OF ADMINISTRATION --
MAIL SERVICES -- PAGE 224
Mr. Mike Meizel, Administrator of Buildings and Grounds, introduced himself. He explained Buildings and Grounds oversees Mail Services which provides interoffice and all other types of mail services within the state. He stated there are three mailrooms: Las Vegas, Reno, and Carson City.
Mr. Meizel testified the budget is funded from a percentage paid by agencies on all outgoing mail. He stated additional revenue comes from folding and inserting services in Carson City. Some agencies, such as the Department of Motor Vehicles and the Department of Taxation, ask for monthly folding and inserting services for mailings. He emphasized this is a base budget with no recommended changes. During the last interim, an additional position was requested of IFC and it was approved. This position is incorporated within the proposed budget. No additional staff is necessary at this time. He pointed out they track their business which does grow every year through pieces of mail, but additional staff each biennium is not needed in proportion to the growth. He said there are no enhancements within the budget.
DEPARTMENT OF ADMINISTRATION
BUILDINGS AND GROUNDS -- 294
Mr. Meizel stated Buildings and Grounds is charged with facilities maintenance of various state office buildings throughout the state, however they have no maintenance responsibilities for any of the institutions or DOT, ESD or SIIS buildings. The primary funding source is from rents charged to agencies within the state buildings. The rent rate is projected to drop over the next biennium primarily because during the last biennium and the next biennium there will be additional square footage. He explained the new Las Vegas State Office Building is slated to open in 1995. He noted both the Supreme Court and State Library buildings were opened over the last biennium. He emphasized when the base of square footage is increased, the rent rate decreases.
Mr. Meizel stated the position listing contains some changes. The difference between the 1992-93 work program of 79.68 positions to 75 positions currently reflects the unfilled positions over the past biennium. One was a middle management position, the other three were custodial/grounds type positions and they were not needed due to a change in how services are provided. He explained the change from 75 positions to 57 positions is a reorganization recommendation. Thirteen positions are capital police officers moving to the Department of Public Safety and five are accounting positions moving to the Division of Administrative Services within the Department of Administration.
Mr. Dini asked if, going out to public bid had been considered for providing capitol police services. Mr. Meizel stated that had been considered and it is done in Las Vegas at the Bradley Building. He indicated it was considerably cheaper, but they did not believe adequate service could be provided to the constitutional officers with private security as is provided in house. He explained in-house officers have full peace officer powers and this was an important consideration because publicly contracted officers could not have full police powers.
Mr. Spitler inquired as to the proposed status of the Governor's Mansion and noted it was not identified in this budget. Mr. Meizel explained this budget deals primarily with state office buildings. There is a mansion maintenance budget separate from this budget. Mr. Spitler asked if Mr. Meizel's area provides services for the Governor's Mansion. Mr. Meizel indicated they do provide advisory services. The Mansion maintains its own staff for buildings and grounds. Mr. Meizel noted his budget does inventory the mansion and is involved with some CIP items such as painting and structural elements. In an advisory capacity, in cooperation with Public Works, they recommend basic maintenance. They do not do any grounds maintenance.
Mr. Spitler stated he was under the impression Buildings and Grounds had a $20,000 appropriation in 1991. Mr. Meizel responded that was correct and they recommended the funds be discontinued. Mr. Spitler asked for what purpose those funds had been proposed. Mr. Meizel testified they had provided a variety of services at the mansion in the last biennium, but he did not believe the services warranted $20,000. Mr. Spitler asked Mr. Meizel to provide a list of the services his area had previously done for the mansion and what services the $20,000 was to provide. Mr. Spitler queried if the budget office would be picking up the cost and service needs, what will not be done, and what will need to be picked up through another agency budget.
Mr. Meizel discussed the budget enhancements. He stated the largest enhancement is in relation to the Las Vegas State Office Building. The maintenance position for the building will be shared with the Department of Motor Vehicle Building. All operating costs for the building including grounds, custodial and maintenance will be privatized so no positions will be included in this budget.
Under building and property renovation, he stated, are items related to the yearly Building Inspection Program which results in a biennial list of necessary maintenance items within the upcoming biennium. He stressed a list had been provided to the committee outlining the various tasks planned. He emphasized some of the items on the list are included under Public Works such as roofs, sidewalk repairs, parking lot sealing, while others will be included in Buildings and Grounds. Mr. Meizel also included a list of what was accomplished in this area over the last biennium.
Mr. Spitler asked if building completion is on schedule. Mr. Meizel stated the Las Vegas Office Building is scheduled to go to bid and is on target. Mr. Spitler wondered what the plans for the Fremont School are. Mr. Meizel indicated the basic plan is to locate state agencies at this site. One agency would be the Department of Education mainly because of its size, and it is more economical and efficient for the state to deal with one agency than a myriad of small agencies. He stated there would be renovation over the next year prior to agency placement.
Mr. Spitler asked Mr. Meizel to address the general fund payback. Mr. Meizel pointed out the total item requested included both the Las Vegas Buildings and Grounds Facility Building and the old SIIS Building in Las Vegas which currently houses state agencies. The recommended item in the General Fund payback is for the Facilities Building only, not for the SIIS building. Mr. Spitler asked why the payback did not include the Las Vegas SIIS building. Mr. Meizel indicated it was the budget office's recommendation.
Mr. Thorne replied the budget office recommended the SIIS Building payback be eliminated. There was some concern over the equity of singling out one building for payback out of the Building and Grounds budget in particular. He explained if the equity issue was to be addressed it would be done with the Las Vegas Office Building coming on-line and requesting a payback for that building would severely impact the rental rate the agencies pay. He emphasized the Administration will be recommending a change to eliminate the payback.
Mr. Meizel discussed the Reorganization of Agency, Remodel and Move costs as a result of the reorganization plan. He stated all costs are estimated.
Mr. Spitler emphasized the committee had asked this question earlier. He asked, if everything in reorganization was approved, are all costs related to moves included, such as telephone, furniture additions, moving in, etc., and will all costs be defined. Mr. Meizel stated basically all costs are included in the Building and Grounds budget according to the Budget Division. Mr. Spitler reiterated no agency will have a cost identified within their budget for reorganization moves. Mr. Thorne replied yes, this is what the budget office attempted to do, but what is unknown is which agencies may require a more complex computer line installation, for example, and that would not be known until moving. He stated those types of details may have a partial cost to the agencies.
Mr. Spitler commented it is difficult to project the moving costs, but the amount indicated seems very small compared to some of the projected moves. He remarked Mr. Meizel may well be back to the IFC for work programs to cover hidden costs.
Mr. Marvel asked what is included in the Building Property Renovation line item. Mr. Meizel elaborated: the Bradley Building, Las Vegas, $28,000 for carpeting; the Highway Patrol Building, Las Vegas, for carpeting and for painting and sand blasting of exterior walls; DMV, Las Vegas, for carpeting, ceiling tiles and grid replacement, floor tiling replacement; DMV, Reno, carpet and tile replacement; Capitol Building, $14,000 for marble floor refinishing; Kincaid Building, Carson City, $77,000 for carpeting and $9,000 for window resealing.
Mr. Price commented would it be easier to blow up the Kincaid Building and start from scratch. Mr. Meizel stated the Kincaid Building is currently in the best shape ever and the state has spent a large amount of money for air conditioning, ventilating, etc., to provide a better working environment.
Mr. Perkins commented, in regard to the Water Resources Budget, the agency was requesting approximately $3,000 to provide telephones for the Elko office because Buildings and Grounds would no longer be providing them. He asked if this was the case and, if so, why. Mr. Meizel noted within the Telecommunications section in the Department of General Services, they are doing away with the old leased equipment which Elko has. He explained the section will no longer have operators or switchboards within buildings and the Elko system is quite old. Each agency will now be responsible for purchasing its own phone system which is not unlike what currently occurs in the majority of state agencies. He emphasized Elko is a hold-over from the system of twenty years ago. Telecommunications used to charge a fee to the agencies and provide a switchboard operator through the fee. Now the agency is responsible for its own system.
Mr. Marvel asked if the potential additional costs from the President's proposed energy tax had been factored in. Mr. Meizel stated this had not been factored in. Mr. Thorne replied the budget office had not either since they are just proposals and nothing concrete is available. He indicated the Budget Division is waiting on action at the federal level before determining the impacts and costs. Mr. Marvel pointed out the state may be caught significantly short. Mr. Thorne recognized the federal government has caught the state short before.
DEPARTMENT OF NATURAL RESOURCES
MARLETTE LAKE -- PAGE 1597
Mr. Meizel explained the Marlette Lake water system provides water to Carson City, the state facilities and Storey County. He explained it sells raw water to Storey County and the Carson Water Treatment Plant. There are two reservoirs within the system and a series of pipelines. The state acquired the system in 1963 along with some state park lands on that mountainside. He pointed out Marlette Lake is really a facility which requires routine maintenance just to keep the water going. He stated no additions to the budget are recommended and the budget is a base budget as it has been for a number of years. There is one Water Master. Services are purchased from Buildings and Grounds in the form of different labor throughout the year, mainly in the summer. At different times with demands for pumping water due to drought, a diesel pump was used and a cost was incurred for diesel fuel. Carson City's growth has resulted in a higher draw from the system, while Storey County's demand has remained constant.
DEPARTMENT OF NATURAL RESOURCES
CARSON WATER TREATMENT PLANT -- PAGE 1600
Mr. Meizel stated the water treatment plant buys raw water from the Marlette Lake system and sells it to Carson City and state facilities after treatment. He explained, essentially, the state is charging for treatment of water. Distribution to Carson City is through an interlocal agreement through one pipe and state facilities are drawn from the city source. Raw water is purchased for 21 cents per 1,000 gallons and treated water is sold for 61 cents per 1,000 gallons. The difference is the cost of treatment. There is one full-time plant operator included and services are purchased from Buildings and Grounds throughout the year.
Mr. Price asked where the water for the legislature building comes from and why it is so awful. Mr. Meizel stated the Marlette Lake water is only a partial amount of the city water. The city has other sources which are combined with water from Marlette Lake. He suggested it was due to the time water sits in this building. The water here is essentially the same as that at the Carson Nugget. Mr. Price pointed out the water tastes better at the Nugget so perhaps it is because this buildings does not circulate the water enough.
Mr. Dini indicated in the "old days" the city had water directly from Marlette Lake and it was really bad. He noted it has significantly improved since then. He pointed out Marlette Lake is also a another valuable resource to the Department of Wildlife because it is where the brood stock for the hatcheries is located. Every year eggs are harvested and taken to the hatchery in Mason Valley and Yerington to hatch fish for the state's streams and lakes. Therefore, Marlette Lake has a dual purpose.
Mr. Dini asked if there were any problems at Marlette Lake with security. Mr. Meizel replied essentially no. There is a small degree of vandalism, but not a high level considering the high degree of traffic. He emphasized it is an incredible recreation area for this region and, as Mr. Dini pointed out, it has multi-uses. In addition to the brood stock, there are nearly 300 visitors a day hiking and riding bicycles through the area in the summer. He maintained the purchase of the Marlette Lake water system and surrounding lands was probably one of significant foresight on the state's part.
Mr. Spitler asked the Buildings and Grounds administration and the Budget Division to reference AB826 of the Sixty-sixth session where in section 18 it clearly states "commencing on July 1, 1993 the Buildings and Grounds Division of the Department of General Services shall repay in annual installments to the State Treasurer for deposit in the state general fund, the cost of project 8517 Purchase and Remodel of the SIIS Building in Las Vegas."
Mr. Spitler inquired if they planned to submit a bill to repeal this. Mr. Thorne responded yes and he understood the amendment to that bill's language will be part of the CIP bill. Mr. Spitler emphasized it had not yet been submitted to the legislature which has to draft the bill. He requested the Budget Office to have someone look into it because, as presented, the budget would be in noncompliance with AB826 of the Sixty-sixth session.
Mr. Dini commented a new audit came out yesterday on the Department of Human Resources Division of Child and Family Services. He indicated his desire for the subcommittee to observe that the state has missed collecting approximately half a million dollars in allocation from the federal government which should have been received. He stated the subcommittee or this committee should make due notice to the agency they still have an opportunity to receive the money and should pursue it. He explained $150,000 from more aggressive case management and $290,000 additional federal 4-E funding would offset general fund appropriation if retroactive. Mrs. Evans replied she has the audit report and the funds will be pursued.
Vice Chairman Spitler adjourned the hearing at 10:25 a.m.
RESPECTFULLY SUBMITTED:
_________________________
Kerin E. Putnam
Committee Secretary
??
Assembly Committee on Ways and Means
March 2, 1993
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