MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
May 6, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 7:42 a.m., on Thursday, May 6, 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. 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
ASSEMBLY BILL 407- Authorizes use of alternative financing for retrofitting of buildings occupied by state or local governmental entities to make use of energy more efficient.
ASSEMBLY BILL 408- Requires establishment of program to track use of energy in buildings owned by state.
ASSEMBLY JOINT
RESOLUTION 26 - Proposes to amend Nevada Constitution to clarify exemption from debt limitation of money borrowed to retrofit state buildings to make use of energy more efficient.
Assemblyman Robert Sader, District 32, explained AB 407, AB 408 and AJR 26 were products of the Interim Finance Committee subcommittee on energy conservation measurers. He noted the Governor had incorporated the findings of the subcommittee in the Capital Improvement Program. He expressed the hope the committee would approve this legislation in order to allow the energy conservation program to move forward.
Mr. Sader explained changes in technology within the energy conservation industry and programs in other state and local governments could prove beneficial to Nevada. The chief focus of the subcommittee was retrofitting energy-saving concepts to existing state buildings. The cost of retrofitting the buildings would be offset by savings resulting from energy conservation. He noted contractors were becoming more willing to enter into "package" contracts to design, recommend, finance and construct energy-saving improvements and be compensated from the cost savings created. The contractor would provide guarantees and bonds as assurance the savings would be realized. The package could include the cost of independent consultants to the contractor. The state would not have to make a capital investment in the project prior to construction and there would be very little risk if the project was handled properly.
Mr. Sader stated Washoe County School District was pioneering this concept in Nevada and was currently involved in a district-wide energy retrofit program. The subcommittee was proposing a program modeled after the Washoe County School District experience.
Mr. Sader said the subcommittee's major findings were that there was a need for energy retrofits in state buildings and a significant amount of money could be saved. He expressed confidence the costs of the $5 million program proposed for the coming biennium could be recouped within a three to four year time period. The subcommittee recommended funding retrofit projects with payback periods of two years or less with one-shot financing through redistribution of existing appropriations from utility expenditures to capital improvements.
Mr. Sader indicated the subcommittee had discovered there was a question about whether retrofit projects would have to be applied to the state's debt limit. AJR 26 dealt with this question by requesting a constitutional amendment to exempt financing for energy-conservation programs from the debt limit. The subcommittee also recommended instituting a friendly test case immediately following enactment of this legislation to determine if the Supreme Court held financing for energy-conservation programs to apply to the state's debt limit. Such a holding by the Supreme Court would negate the need to pursue a constitutional amendment.
Mr. Sader explained AB 407 implemented the shared savings projects concept, made changes in installment contract language currently contained in the statutes to authorize the package contracts and instituted a program for state and local governments to do energy conservation retrofits under the package concept.
Mr. Sader noted the Administration had been very cooperative with the subcommittee and agreed with their findings. The Capital Improvements Program included $5 million to fund energy conservation programs. He explained the $5 million would not be allocated and spent for the energy conservation projects. Rather, it represented the portion of the bonded indebtedness which must be reserved in order to proceed, pending determination of whether or not the financing actually fell within the debt limit.
Mr. Sader reported there was a fiscal note attached to AB 408. AB 408 would fund a computer program to track energy use. Without this basic information it would be difficult to analyze where to implement energy conservation projects and evaluate savings. He noted there were $10,000 in grant funds available for this purpose in the first year of the biennium. Projected energy savings in the second year of the biennium would be adequate to cover the second year costs. Thus, there would be no need to allocate General Fund money to cover the fiscal note.
Mr. Sader reported the Supreme Court had suggested an amendment to AB 407. The Supreme Court building was not owned by the Supreme Court and maintenance was the responsibility of the Buildings and Grounds Division. Therefore, the Supreme Court did not have the authority to designate an energy retrofit coordinator for buildings occupied by the judiciary. The amendment would allow the Supreme Court to request the Governor to appoint a liaison trained in facility management to assist and make recommendations to the court's energy retrofit coordinator.
Mr. Sader introduced Ms. Denice Tsuda of Sierra Pacific Power Company. He noted Sierra Pacific had been involved in other energy retrofit programs and had been very helpful to the subcommittee.
Ms. Tsuda stated Sierra Pacific Power Company supported AB 407. She noted funding was often the key element in making energy efficiency a reality and AB 407 represented a potential savings for all taxpayers resulting from efficient energy use. She pointed out there were several considerations which would impact energy savings resulting from retrofitting older buildings. Sierra Pacific had found there were definite opportunities to realize energy savings by retrofitting buildings over ten years old. She added in older buildings there could also be problems with asbestos and hazardous waste materials.
Mrs. Evans asked how the Legislative Commission's Building Subcommittee viewed changes in the legislative building in light of the existing design to remodel and expand the building. Mr. Sader answered the existing legislative building was viewed as a model project. He noted there were asbestos problems as well as questions of intermittent use which led the Building Subcommittee to choose not to retrofit the legislative building under the proposed program.
Mrs. Evans asked if the legislature should proceed with plans to remodel the legislative building. Mr. Sader answered when building use changed, the cost effectiveness of retrofitting was questionable. Changes in room configurations and functions would have to be taken into consideration in retrofitting the legislative building.
Mr. Dini noted the Building Subcommittee on energy conservation measures had reviewed this question. It was prepared to proceed with some lighting and air conditioning work during the interim on a piecemeal basis until adequate funding was available.
Mr. Marvel questioned whether the subcommittee had reviewed energy use at the prisons. Mr. Sader replied the subcommittee review had been done with the help of the Buildings and Grounds Division. He said it was his general perception the prisons represented fertile ground for energy conservation projects; however, the prisons were not within the jurisdiction of Buildings and Grounds. Mr. Dean Borges, Buildings and Grounds Division, noted energy audits of the prisons were conducted in the early 1980s.
Mr. Marvel asked if it was too late to retrofit the prison buildings. Mr. Sader responded retrofitting the prisons was still a viable project.
Mr. Marvel inquired whether energy conservation was included in the design of the Lovelock prison. Mr. Richard Knapp, Public Works Board, replied the Lovelock prison as well as other new facilities were designed to comply with building code requirements for energy conservation.
Mr. Dini noted there had been a co-generation project at the prison approximately six years ago. The contractor on that project had gone out of business before the work was completed. He questioned if anything was being done with that project. Mr. Borges said there were presently no plans to complete the co-generation project. He noted questions regarding financing of that project would be addressed by these bills.
Mr. Dini inquired whether the state was pursuing co-generation. Mr. Borges replied he was not aware of any planned co-generation projects.
Mr. Sader explained while there was some technical expertise within the state system, there was not the level of expertise which was available within the private sector. Additionally, state employees were constrained by time limitations and other responsibilities which did not allow them to develop creative programs. He suggested if the Legislature wished to pursue co-generation, it would have to appoint another interim committee or develop a program.
Ms. Giunchigliani urged adoption of this legislation. She noted a similar study had been performed several years ago but the recommendations were not implemented. She said the Legislature had to move forward in order to save money over the long term. She added energy savings should also be a consideration in plans for new construction.
Mr. Spitler asked if the plan was simply to reserve $5 million against the debt limit rather than to issue bonds for $5 million. Mr. Sader said Mr. Spitler's understanding was correct.
Mr. Spitler asked Budget Division staff how this reservation of the $5 million would be accomplished. Mr. P. Forrest "Woody" Thorne, Deputy Budget Administrator, Budget Division, said he believed the bonds would have to be issued. He was awaiting confirmation from bond counsel on this question. The Capital Improvement Program recommendation was to reserve and reallocate bonds which were already issued but not being used for their original purpose.
Mr. Spitler said it was his understanding the bonds would not have to be issued and the $5 million would not be applied to bonded indebtedness.
Mr. Sader said bonds might actually have to be issued but the proceeds would not be spent.
Mr. Spitler asked if the state would be paying interest on the bonds and increasing property taxes to secure the bonds. Mr. Thorne responded the state would be paying interest; however, the interest payments would be offset by interest earned on the bond proceeds being held.
Mr. Spitler questioned whether the interest earned would fully cover the cost of issuing the bonds or if the cost of issuing the bonds would be a factor to consider in calculating the cost to retrofit the buildings. Mr. Thorne replied the interest earned would not offset the entire cost of issuing the bonds.
Mr. Spitler noted there were no inflationary increases on utilities projected in the Executive Budget for fiscal year 1994-95. He noted the energy savings would be used to pay the contractor for the retrofit. Mr. Thorne answered the savings would be shared. The entire savings would not be paid to the contractor. Projected energy savings were expected to be greater than inflation in the second year of the biennium.
Mr. Spitler inquired whether the savings from the retrofitted buildings were projected to cover inflationary increases in utilities for all other buildings owned and operated by the state. Mr. Thorne said it was uncertain what total energy savings would be.
Mr. Spitler said he supported the program but the figures in the Executive Budget appeared to be incorrect.
Mr. Heller asked how long the state would hold the bond proceeds. Mr. Thorne said he did not know the answer to the question.
Mr. Heller noted the state could face a large arbitrage penalty from the federal government. If the bond proceeds were not spent, the federal government could confiscate any interest earned. He asked how the state was prepared to deal with this possibility. Mr. Thorne said he did not know the answer to the question. He said there could be an arbitrage impact on the earned interest, depending on how long the bond proceeds were held.
Mr. Thorne noted AJR 24 of the Sixty-sixth Legislative Session accomplished the same purpose as AJR 26. AJR 24 allowed the state to enter into installment and lease-purchase agreements if the state's obligations under those agreements were extinguished by the failure of the Legislature to appropriate money for ensuing biennia for payments coming due. AJR 24 would cover long-term obligations of the state without being specific to retrofit projects.
BUDGET CLOSINGS
SOUTHERN NEVADA CHILDREN'S HOME - PAGE 1005
Mrs. Evans reminded the committee a number of questions had been raised at the May 1, 1993, hearing regarding the proposal to privatize the Southern Nevada Children's Home. She introduced Mr. Jerry Carlin, Director, Department of Human Resources, and Mr. John Sarb, Administrator, Division of Child and Family Services, to explain the proposal.
Mr. Sarb said it was his understanding the committee was concerned about what would happen if no bids were received in response to the request for proposal. He said it was unlikely no bids would be received as privatization of the facility was an attractive proposition for a non-profit operator because there would be no capital expenditure required on their part. The facility was basically a turnkey operation. However, if there should be no bidders to the original request for proposals, there was time to revise the request for proposals. In the alternative, the cottages could be leased individually.
Mr. Spitler asked for background on the decision to privatize the facility. Mr. Sarb replied the facility was an anachronism in many respects. The state was not receiving good value for service at this facility. The state was paying between $62 and $70 per day per child for a level of service which could be purchased for $35 to $45 per day.
Mr. Spitler asked what drove the cost difference. Mr. Sarb responded the current high cost was due to the salaries paid to state employees to operate the facility and the physical plant costs associated with the 13-acre campus and 10 buildings.
Mr. Sarb noted the state had two options. It could either lower costs or place children in the facility who warranted the expenditure, that is, more seriously emotionally and behaviorally disturbed children. He noted if more seriously troubled children were placed in the facility, there would be an impact on the Boulder City school system, which would also have to accommodate those children.
Mr. Spitler inquired if the facility was full. Mr. Sarb indicated two cottages were closed. He said there were few children placed in care who did not have some behavioral or emotional problems. The focus of child welfare has been to keep children who don't need that type of care out of care.
Mr. Spitler asked if the remaining five cottages were full. Mr. Sarb replied there was a total of 35 children in the five cottages. Each cottage could house 10 children. Mr. Sarb stated 10 children were too many for a cottage couple to manage if they were dealing with emotionally or behaviorally disturbed children.
Mr. Spitler questioned whether the request for proposal had been released. Mr. Sarb said the request for proposal had either gone out in the past few days or would go out in the next few days.
Mr. Spitler inquired whether any operators had expressed interest in the cottages. Mr. Sarb said several expressions of interest to operate in Nevada were received each month. There were presently two operators who had expressed strong interest.
Mr. Spitler asked where building and grounds maintenance was included within the Executive Budget. Mr. Sarb answered the plan was to have the operator become responsible for routine maintenance. The state would retain the responsibility for maintenance consistent with capital improvement projects, including roof repair, etc.
Mr. Spitler noted the intent to privatize the operation did not negate the overall responsibility of the state to maintain the buildings. Mr. Sarb said it did not.
Mr. Spitler asked the projected cost to maintain the buildings and campus. Mr. Sarb said he could not answer the question.
Mr. Spitler inquired about the current status of the buildings. Mr. Sarb responded the buildings were in reasonably good condition.
Mr. Spitler asked who would administer the contract to measure the quality of service delivered. Mr. Sarb replied contract administration would be handled by the treatment services unit and purchase placement unit within the Division of Child and Family Services.
Mr. Spitler inquired whether contract administration costs were already projected in the Executive Budget. Mr. Sarb said those costs were included in the budget.
Mr. Spitler indicated he was very disappointed with this proposal and he did not support the decision.
Mrs. Williams noted there had been problems in the past when St. Jude's had taken over operation of a facility in a similar fashion to that being proposed. St. Jude's found it could not operate the facility for less than the cost to the state. She agreed with Mr. Spitler that this proposal was not a good idea.
Mrs. Williams stated she had requested the names of specific people who were interested in operating the facility and Mr. Sarb had provided only a general, conceptual response. Additionally, she expressed concern about where children--especially siblings--would be placed if the proposal was unsuccessful. She said she doubted a private operator could operate the facility for less money than the state. Even if a private operator could run the facility for less money, she questioned the quality of care which would be provided. Mr. Sarb said he did not agree with Mrs. Williams' statement.
Mrs. Williams asked if there were other residential treatment homes in southern Nevada which could absorb the residents of the Southern Nevada Children's Home in the event the facility was closed.
Mr. Carlin stated he wished to respond to the points raised by Mrs. Williams. He said St. Jude's problems had been the result of attempting to operate its own school system in addition to the residential facility. St. Jude would have been able to operate the facility successfully without the school.
Mr. Carlin noted the state's cost of operating the Southern Nevada Children's Home had been driven up by the Fair Labor Standards Act (FLSA) requirements for compensating staff. The state now had to pay staff up to 100 percent more than it paid them only a few years ago for the same service. The private sector was not bound by those FLSA requirements and could pay less for staff of equal quality.
Chairman Arberry said his understanding was it would cost the state $1.3 million to continue operating the facility over the coming biennium. Mr. Carlin said Chairman Arberry's understanding was correct.
Mr. Humke asked why there was disparate treatment of the Southern Nevada Children's Home and the Northern Nevada Children's Home where children were relocated to community foster care and the buildings were put to alternative use. He suggested much of the expense of operating the Southern Nevada Children's Home was tied to maintaining the low-intensity use of the facility. Mr. Carlin responded the Northern Nevada Children's Home was scheduled for demolition according to the long-term program to develop the Capitol Complex. The northern Nevada facility did not merit the type of expensive renovation which would be required to maintain the facility for alternative use.
Mr. Humke noted he considered both facilities "orphanages", which he intended as a derogatory term, because it referred to an old-fashioned concept of caring for children. He pointed out that Mr. Sarb had indicated a cottage housing 10 children was not a manageable unit. He suggested even if the facility was managed by a private contractor, it was still outdated.
Mr. Carlin said Mr. Humke's point was well taken. The Southern Nevada Children's Home reflected an outmoded philosophy of care and treatment. If the state was able to construct a new facility, it would not construct a facility of this type. He noted the large population base in southern Nevada created a much higher level of need for emergency care than occurred in northern Nevada. One of the planned utilizations for the Southern Nevada Children's Home was as an alternative to placement in high-cost temporary care.
Mr. Humke noted a private contractor would also have to comply with FLSA requirements. He suggested the risk of noncompliance was being shifted from the state to the contractor. Mr. Carlin stated contractors had the ability to negotiate salaries. The state was locked into the current salary structure.
Mr. Perkins inquired whether the physical plant costs borne by the contractor would be the same as those currently paid by the state. Mr. Sarb said it was expected the cost of the contractor's service would still be higher than what normally would be paid. The cost to contract the services was projected at $55 per day. He noted $55 per day was preferable to $70 per day.
Mr. Perkins said his understanding of FLSA was there were options within the act to deal with scheduling problems without having to pay overtime.
Mr. Perkins expressed concern about the quality of care decreasing if the facility was privatized. He suggested if the only issue was reduction in salaries, the division was attempting to resolve the matter in the wrong way. He said he knew many of the cottage parents and they were not filling those positions in order to become wealthy but because they truly cared for the children. He said this was a state responsibility and should not be shifted to a private contractor.
Ms. Giunchigliani inquired when the decision to privatize was made. Mr. Sarb stated the decision had been made in response to a letter from two sets of cottage parents to Senator Raggio requesting consideration of privatization. He said the letter had been sent over a year ago.
Ms. Giunchigliani noted the letter was sent at approximately the time of the decision in the Benzler case. She submitted this proposal appeared to be retaliatory. She also noted it appeared the state was unwilling to negotiate with the current cottage parents.
Ms. Giunchigliani questioned what the current philosophy of care was. Mr. Carlin responded the current philosophy was to group children in as small a unit as possible to maintain a more home-like environment rather than an institutional ward-type environment. Additionally, it was believed children should not be moved away from the stable environments provided by their communities and school districts. Children were currently being moved from Las Vegas to Boulder City where they were not familiar with teachers and other children. Ms. Giunchigliani suggested the state could work with the school districts to transport children to their own school.
Ms. Giunchigliani asked if there were other facilities operating according to the new philosophy. Mr. Carlin said the state contracted for approximately 2,000 children according to the new philosophy.
Ms. Giunchigliani noted the housing groups at the Southern Nevada Children's Home could be diminished from 10 to a more manageable number. Mr. Carlin said that could be done but the costs would go up proportionately.
Ms. Giunchigliani asked if placements were made through juvenile court. Mr. Sarb said most of the children were referred by juvenile court. They were in state custody as a result of abuse or neglect.
Ms. Giunchigliani questioned whether psychological services were provided to the children. Mr. Sarb said out-patient counseling was provided as needed.
Ms. Giunchigliani reiterated Mrs. Williams' request for a list specifically identifying interested contractors.
Ms. Giunchigliani expressed frustration that the Executive Budget reflected the proposal as if it were already accomplished even though no bids had been let and no contractors had been solicited. She added there should have been a transition period during which to consider this proposal. She inquired what would happen to the children if this plan was not realized. Mr. Carlin said there was no plan to disenfranchise the children. There was no intent to close the facility. He noted approximately 2,000 children were currently placed with private, non-profit providers.
Ms. Giunchigliani said the proposal meant the state would retain the same out-moded method of operation and simply shift the operation to a private provider.
Mr. Carlin stated the proposal was an effort to reduce costs. He noted the state had a responsibility to recognize the burgeoning population of abused and neglected children and limited resources with which to provide services. The $200,000 savings realized from this proposal would go a long way towards providing services to more children.
Ms. Giunchigliani said she did not see the savings reinvested in any of the agency budgets. In many instances costs were simply being shifted to the counties or cities. She said this proposal was indicative of the state's short-sightedness in dealing with problems associated with growth and urbanization.
Mr. Carlin agreed there were underlying problems but in times of tight budget constraints it was necessary to deal with the short-term rather than long-term preventive programs.
Ms. Giunchigliani suggested the state could be progressive and locate revenue sources to properly fund programs.
Mrs. Williams said she would also like to see a list of residential placements in southern Nevada which could accommodate the children from the Southern Nevada Children's Home in the event the proposal was not successful.
Mrs. Williams questioned whether the capital improvement costs of maintaining the facility were included within the budget. Mr. Carlin said there would be no additional costs. Mr. Carlin said the capital improvement costs which the state would remain responsible for were never included in this budget account.
Mrs. Williams suggested the contractor should assume the responsibility for the capital improvement costs was well as day-to-day maintenance if the intent of privatization was to relieve the state of the burden of spending those dollars. Mr. Carlin reiterated those costs were set aside from the Executive Budget as a part of the Capital Improvement Program.
Mr. Price noted he had never been a proponent of privatizing services which were the state's responsibility. He indicated he did not understand how a contractor could operate the program better than the state could if the state was running the program efficiently. Mr. Carlin reiterated the contract would be let to a non-profit provider. The major reason the contractor could operate the facility for reduced costs was the rate of salaries paid to state employees pursuant to FLSA.
Mr. Price pointed out the Garcia decision established a standard of FLSA compliance for the public sector equal to that of the private sector. He questioned whether the state was precluded from entering into independent contractor agreements with the current cottage couples.
Mr. Carlin stated FLSA did not permit him to lay people off and then hire them back at a different salary. Mr. Price said he respectfully disagreed with Mr. Carlin's statement. There were legal and moral ways to revise the salary structure for cottage couples. Mr. Carlin stated the Legislature had the authority to lay the staff off but the agency administrators did not. He said he was very receptive to bids for privatization from the current cottage couples. He reiterated there were no plans to close the facility. If no bids were received, the agency would seek support from the Interim Finance Committee.
Mr. Price commented he was not in favor of classifying cottages couples as exempt merit employees in order to avoid paying proper remuneration to them.
Mrs. Evans asked when the bid would be let. Mr. Sarb said the request for proposal had recently gone out or would be going out within a week. The due date for proposals was June 30, 1993.
Mrs. Evans noted most of the questions raised at this meeting were raised, in one form or another, by the subcommittee. One of the grave considerations of this issue clearly was the fiscal impact of the state continuing to operate the Southern Nevada Children's Home. She said she was relieved of some anxiety by Mr. Carlin's commitment not to close the facility without coming to the Legislature for further direction.
MRS. EVANS MOVED TO CLOSE THE SOUTHERN NEVADA CHILDREN'S HOME BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. HUMKE SECONDED THE MOTION.
Mr. Dini said this was a difficult decision for him to make. He noted he had not been in favor of closing the Northern Nevada Children's Home and was not in favor of closing this institution. He added he had never been a real proponent of privatization. He pointed out the facility was currently being operated by a quality staff. He expressed the hope that the children would be taken care of under the Governor's recommendation. He explained he would cast his vote with the assumption that if more revenue became available prior to the end of the session, the budget closure would be reversed and funding would be provided to continue the current operation.
Mrs. Williams stated she would be voting against the motion. She suggested this matter had not been carefully thought out. She said she did not understand why the request for proposals was only now being let and the due date would occur following the close of the session. This project certainly could have been undertaken earlier in order to provide more accurate information to the Legislature. She said it was irrelevant whether costs were being funded in this budget or another budget, the funding was still being made with state dollars. She expressed doubt there would be an actual savings from this plan.
Mrs. Williams stated while she agreed the methods for dealing with children needed to be modernized, modernization was something that had to be phased in and prepared for.
Ms. Giunchigliani stated this proposal was indicative of the bureaucratic non-vision of many state agencies. It showed no planning or foresight and was reactive rather than proactive. She said she would be voting against the motion.
Mr. Perkins said he would not be supporting the motion. He noted no specific bidders had shown interest in the proposal even though it had been publicized for several months.
Mr. Price indicated he would be voting against the motion.
Mrs. Chowning said she was torn by this decision. She indicated she was reversing her vote made in the subcommittee. She explained during the subcommittee hearing she had requested a contingency plan from the agency. No contingency plan had been provided.
Chairman Arberry called for a roll call vote.
MR. SPITLER NO
MRS. CHOWNING NO
MR. DINI YES
MRS. EVANS YES
MS. GIUNCHIGLIANI NO
MR. HELLER YES
MR. HUMKE YES
MR. MARVEL YES
MR. PERKINS NO
MR. PRICE NO
MS. TIFFANY YES
MRS. WILLIAMS NO
CHAIRMAN ARBERRY YES
THE MOTION CARRIED BY A VOTE OF 7 TO 6.
BUDGET CLOSED.
BUDGET CLOSINGS
WICHE ADMINISTRATION - PAGE 172
WICHE LOAN AND STIPEND - PAGE 176
Mrs. Williams requested these budgets be held until written confirmation that need will be factored into WICHE grants was received by the committee.
Chairman Arberry agreed to hold the budgets. He expressed his opinion the WICHE program should be abolished.
SENIOR CITIZEN PROPERTY TAX ASSISTANCE - PAGE 212
Mr. Stevens reminded the committee rebates had been prorated to 80 percent in the current fiscal year by the Department of Taxation. Continuing at the 80 percent level in the coming biennium would require additional general funds of $12,865 in the first year and $311,955 in the second year. The Governor's recommendation would support assistance at approximately 76 percent in the first year of the biennium and 71 percent in the second year. Estimates for paying 100 percent would require an additional $745,000 in the first year of the biennium and an additional $1 million in the second year.
MR. MARVEL MOVED TO CLOSE THE SENIOR CITIZEN PROPERTY TAX ASSISTANCE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. PERKINS SECONDED THE MOTION.
Ms. Giunchigliani noted the committee had requested the Department of Taxation to draft language creating a minimum level of assistance to which the budget could be prorated. She questioned whether that language had been received. Mr. Stevens said he did not recall receiving draft language from the Department of Taxation. He noted the issue could be dealt with in the appropriations act.
Ms. Giunchigliani pointed out this account was created to help needy seniors and she could not support the motion.
Mrs. Williams said she had played an instrumental part in this and similar programs. She said it would be difficult for her to support reducing assistance below 80 percent.
MRS. WILLIAMS MOVED TO AMEND THE MOTION TO CLOSE THE BUDGET TO PROVIDE 80 PERCENT ASSISTANCE.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. MR. MARVEL, MR. HUMKE AND MS. TIFFANY WERE OPPOSED.
THE MOTION TO APPROVE THE MOTION AS AMENDED CARRIED. MR. MARVEL, MR. HUMKE AND MS. TIFFANY WERE OPPOSED.
STATE PRINTING OFFICE - PAGE 214
Mr. Stevens noted the Governor recommended moving this and other accounts from the Department of General Services to the Department of Finance and Administration. He commented the administrative account within the Department of Finance and Administration was proposed to be funded by assessments against the various divisions within the department. Therefore, adjustments to these accounts might be required following finalization of the reorganization plan.
Fiscal staff recommended issuing a letter of intent to the State Printing Office requiring a $16,700 General Fund repayment in the first year of the biennium for advance planning for a Printing Office addition. If the cost of advance planning changed, the budget would be adjusted accordingly.
MR. MARVEL MOVED TO AMEND THE STATE PRINTING OFFICE BUDGET TO INCLUDE A $16,700 GENERAL FUND REPAYMENT IN FISCAL YEAR 1993-94 AND CLOSE THE BUDGET AS AMENDED.
MR. HUMKE SECONDED THE MOTION.
Ms. Giunchigliani inquired whether the State Printing Office would be privatized. Mr. Stevens said privatization was not contemplated in the Executive Budget.
Ms. Giunchigliani noted she had received several complaints regarding the State Printing Office.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
PRINTING OFFICE EQUIPMENT PURCHASE - PAGE 218
Mr. Stevens noted this account included a balance forward. An additional $26,848 was required as an additional balance forward in the second year of the biennium. If the committee chose not to fund the additional $26,848, the agency could appear before the Interim Finance Committee to request a work program adjustment.
MRS. WILLIAMS MOVED TO CLOSE THE PRINTING OFFICE EQUIPMENT PURCHASE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
RECORDS MANAGEMENT - MICROGRAPHIC - PAGE 220
Mr. Stevens indicated he had no comments on this account.
MR. MARVEL MOVED TO CLOSE THE RECORDS MANAGEMENT - MICROGRAPHIC BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
MAIL SERVICES - PAGE 224
Mr. Stevens indicated he had no comments on this account.
MR. PERKINS MOVED TO CLOSE THE MAIL SERVICES BUDGET AS RECOMMENDED BY THE GOVERNOR.
MRS. WILLIAMS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
MOTOR POOL - PAGE 228
Mr. Stevens noted advance planning for underground fuel storage in the Capitol Complex was contemplated within this account. Costs were projected at $1,020. Fiscal staff recommended including this amount as a General Fund repayment and issuance of a letter of intent to adjust the amount based on actual expenditures.
Mr. Stevens noted if the Capital Improvements Program subcommittee chose not to fund the proposed carwash facility in southern Nevada, the proposed General Fund repayment would have to be amended.
MR. HUMKE MOVED TO AMEND THE MOTOR POOL BUDGET TO INCLUDE A $1,020 GENERAL FUND REPAYMENT AND CLOSE THE BUDGET AS AMENDED.
MR. SPITLER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
MOTOR POOL VEHICLE PURCHASE - PAGE 234
Mr. Stevens indicated he had no comments on this account.
MRS. WILLIAMS MOVED TO CLOSE THE MOTOR POOL VEHICLE PURCHASE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MS. TIFFANY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
INDIAN COMMISSION - PAGE 1013
Mr. Stevens explained the Governor recommended including this function within the Department of Human Resources. He noted there was a question of whether to relocate the agency from Reno to Carson City. The agency had indicated a preference for remaining in Reno. The Governor recommended relocating the agency to the Kinkead Building in Carson City.
Mr. Dini asked if there was any fiscal impact associated with the relocation. Mr. Stevens replied the agency would have to move from its current location regardless of whether it stayed in Reno or not. He explained $400 for moving and telephone expenses might have to be added to the budget. Approximately $100 for non-state owned building rent would have to be added in the first year of the biennium and $900 would have to be added in the second year. He noted there would be less square footage in the Reno office than in the Carson City office.
MR. DINI MOVED TO AMEND THE INDIAN COMMISSION BUDGET TO ALLOW THE AGENCY TO REMAIN IN RENO AND CLOSE THE BUDGET AS AMENDED.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
STATE MUSEUM, CARSON CITY - PAGE 1124
Mr. Stevens noted the Governor recommended funding the director's position, which was currently vacant. The personnel expenses associated with the assistant director's position were recommended by the Governor for reorganization savings. He pointed out the assistant director had been performing the director's duties for some time. Fiscal staff recommended funding the assistant director position and placing the director's salary in reorganization savings. Doing so would generate a General Fund savings of $12,554 in the first year of the biennium and a cost of $489 in the second year.
Chairman Arberry commented the Governor recommended eliminating the exhibit program from this budget. He suggested adding $1,000 to this account to fund the exhibit program.
Ms. Giunchigliani inquired if the Museum would still have to raise fees to fund the exhibit program if the budget was amended. Mr. Stevens replied a fee increase was included in the Executive Budget.
MS. GIUNCHIGLIANI MOVED TO AMEND THE STATE MUSEUM, CARSON CITY BUDGET TO ELIMINATE FUNDING FOR THE DIRECTOR POSITION, RETAIN FUNDING FOR THE ASSISTANT DIRECTOR POSITION AND INCLUDE AN ADDITIONAL $1,000 TO FUND THE EXHIBIT PROGRAM AND CLOSE THE BUDGET AS AMENDED.
MR. HELLER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
STATE MUSEUM, LAS VEGAS - PAGE 1139
Mr. Stevens noted the Governor did not recommend funding for the director's position.
MS. GIUNCHIGLIANI MOVED TO AMEND THE STATE MUSEUM, LAS VEGAS BUDGET TO FUND THE DIRECTOR'S POSITION AND CLOSE THE BUDGET AS AMENDED.
MR. SPITLER SECONDED THE MOTION.
Mr. Dini asked Budget Division staff who would operate the program if there was no director. Mr. Thorne said he did not have detailed information about this account.
Mrs. Chowning asked if fee increases should be included in this budget. Mr. Stevens noted the director of the Museum had recommended not raising fees because visitation figures were down and fee increases could be detrimental.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
HISTORIC PRESERVATION - PAGE 1147
Mr. Stevens pointed out the Governor's reorganization plan called for transferring this account from the Department of Conservation and Natural Resources to the Department of Museum, Libraries and Arts. Fiscal staff recommended several adjustments to this budget.
Mr. Stevens explained fiscal staff did not believe the 60 percent/ 40 percent federal/state match met Executive Budget projections. He recommended deleting travel and operational savings. Additionally, the agency was scheduled to move into state-owned building space. Fiscal staff recommended adding state-owned building rent in the amount of $8,500 in the first year of the biennium and $11,000 in the second year and decreasing other building rent by $12,500 in the first year and $17,000 in the second year. In addition, fiscal staff recommended increasing survey and planning grants and reducing federal dollars in the reserve account by $1,467 in each year of the biennium. The General Fund impact would be plus $352 in the first year of the biennium and minus $293 in the second year.
MR. MARVEL MOVED TO AMEND THE HISTORIC PRESERVATION BUDGET TO DELETE TRAVEL AND OPERATIONAL SAVINGS, REDUCE BUILDING RENT EXPENSE, INCREASE GRANT FUNDING AND REDUCE THE RESERVE ACCOUNT AND CLOSE THE BUDGET AS AMENDED.
MRS. CHOWNING SECONDED THE MOTION.
Ms. Giunchigliani noted the administrator was performing clerical functions because the division was understaffed. She asked if the historical marker program had been eliminated. Mr. Stevens said the historical marker program was not recommended in the Executive Budget. Historically, $10,000 to $15,000 per year had been provided for that program.
Ms. Giunchigliani asked Budget Division staff to explain the rationale for deleting the historical marker program. Mr. Thorne indicated it was a low-priority program.
Ms. Giunchigliani inquired why the division was understaffed. Mr. Thorne replied the Governor felt clerical staffing would be adequate once the division was consolidated with the Department of Museum, Libraries and Arts.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
HIGH LEVEL NUCLEAR WASTE - PAGE 1534
Mr. Dini inquired whether this account would be affected by the Governor's planned reorganization. Mr. Stevens stated this account currently resided within the Governor's Office. The Governor recommended placing this function within the Department of Environmental Protection.
Mr. Dini requested holding this budget until after the Natural Resources Committee hearing on May 7, 1993. Chairman Arberry agreed to hold this budget.
OFFICE OF THE GOVERNOR - PAGE 1
Mr. Stevens stated the Executive Budget contemplated the Governor's Office taking over office space currently occupied by the Employee-Management Relations Board (EMRB) in Las Vegas. The committee had retained the EMRB in the budget. Therefore, a rent adjustment of minus $4,900 in the first year of the biennium and minus $4,988 in the second year was required in this account.
MR. MARVEL MOVED TO AMEND THE OFFICE OF THE GOVERNOR BUDGET TO REDUCE BUILDING RENT AND CLOSE THE BUDGET AS AMENDED.
MR. HUMKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
LIEUTENANT GOVERNOR - PAGE 14
Mr. Stevens indicated fiscal staff had received a letter from the Lieutenant Governor requesting a funding for a photocopy machine ($4,565 plus 5 percent) and a computer monitor and program software ($1,510).
MR. DINI MOVED TO AMEND THE LIEUTENANT GOVERNOR BUDGET TO ADD FUNDING FOR A PHOTOCOPY MACHINE, A COMPUTER MONITOR AND SOFTWARE AND CLOSE THE BUDGET AS AMENDED.
MR. MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
CRIME PREVENTION - PAGE 30
Mr. Stevens noted there was a General Fund increase in this account resulting from vacancy savings. An additional $7,000 in operating expenses was included in the Executive Budget to cover the cost of printing reports and brochures.
Mr. Humke asked if there was a position which was not filled in this budget. Mr. Stevens said he was unsure if there was a position vacancy. He noted there had been a position reclassification in this account.
Mr. Humke stated he would recommend deleting this account if there was a vacant position.
Ms. Giunchigliani noted there were no performance indicators included in this budget to demonstrate the purpose of the program and how it was working.
Mr. Perkins questioned the need for the state to be involved in a crime prevention program when the issue was so extensively dealt with at other levels.
Chairman Arberry asked the committee to hold this budget for action at a later time.
SECRETARY OF STATE - PAGE 52
Mr. Stevens said fiscal staff had asked the Secretary of State to identify the positions in the budget which were funded by expedite fees. Based on the information received from the Secretary of State, fiscal staff recommended increasing expedite fees approximately $70,000.
Mr. Stevens noted the committee had indicated it wished elected officials to retain computer positions within their budgets in spite of the consolidation of data processing positions under the Governor's reorganization proposal. He stated there was one microcomputer specialist position included in this budget. If this position was retained and a corresponding adjustment was made to the data processing budget, the General Fund appropriation would be reduced by approximately $70,000.
Ms. Giunchigliani inquired about the education information officer position. Mr. Thorne explained the position was being moved from the Securities Division budget to the Secretary of State budget and physically relocated from Las Vegas to Carson City. He noted the Secretary of State had indicated it would be more beneficial to have that position in the Carson City office. Ms. Giunchigliani suggested the population increase in southern Nevada warranted retaining the position in Las Vegas.
Ms. Giunchigliani asked if the salary for the deputy chief position would be increased. Mr. Stevens replied a salary increase had been requested but it was not included in the Executive Budget. Normally, salary increases would be dealt with by the salary subcommittee.
Mrs. Williams expressed objection to moving the education information officer position from Las Vegas to Carson City.
Chairman Arberry suggested this budget be held for action at a later time.
STATE TREASURER - PAGE 61
Mr. Stevens noted the Treasurer had requested the committee's consideration on a number of items. The Treasurer requested assuming the unclaimed property function. The committee had recommended retaining the unclaimed property function within the Department of Business and Industry. The Treasurer also requested a new cash management position to improve interest income returns. The annual cost of the position would be approximately $62,952. The Treasurer indicated the cash management position could generate a minimum of $250,000 per year in additional interest income.
Mr. Stevens stated the Treasurer had provided new revenue projections which were approximately $2 million less than the initial projections made in late 1992.
Mr. Stevens pointed out there was also a microcomputer specialist position included in this budget. The Treasurer wished to reclassify that position to a cash management analyst.
Ms. Giunchigliani asked for clarification about the $2 million decrease in revenue projections. Mr. Thorne stated the adjusted revenue projections were down approximately $4 million. Mr. Stevens explained interest income was not as great as had been anticipated. The Fiscal Division and the Budget Division would be adjusting their revenue projections as well.
Mr. Heller pointed out personnel expenses were reduced a tremendous amount from the work program. The Treasurer was attempting to reallocate staff to the best advantage.
MR. HELLER MOVED TO AMEND THE STATE TREASURER BUDGET TO ADD A CASH MANAGEMENT POSITION AND RETAIN THE MICROCOMPUTER SPECIALIST POSITION AND CLOSE THE BUDGET AS AMENDED.
MR. MARVEL SECONDED THE MOTION.
Ms. Giunchigliani asked if the staffing level would remain at 17 positions. Mr. Stevens replied the 17 positions included in the Executive Budget contemplated the transfer of the microcomputer specialist position.
Ms. Giunchigliani inquired whether there were position vacancies in this budget. Mr. Stevens answered there were currently three vacant positions in the budget.
Mr. Heller suggested deleting one of the vacant positions.
Mr. Stevens pointed out only 14 of the 17 positions could be funded with this budget.
Mrs. Chowning asked if the telephone system in the Treasurer's Office would be updated. Mr. Stevens said funding for the telephone system was not included in the budget. He said the Treasurer had indicated he considered the cash management and microcomputer specialist positions to be his highest-priority issues. Mr. Thorne noted the budget included an enhancement item for telephone system replacement.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
MUNICIPAL BOND BANK REVENUE - PAGE 70
Mr. Stevens indicated he had no comments on this budget.
MR. PERKINS MOVED TO CLOSE THE MUNICIPAL BOND BANK REVENUE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MR. HELLER SECONDED THE MOTION.
MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
MUNICIPAL BOND BANK DEBT SERVICE - PAGE 73
Mr. Stevens indicated he had no comments on this budget.
MR. MARVEL MOVED TO CLOSE THE MUNICIPAL BOND BANK DEBT SERVICE BUDGET AS RECOMMENDED BY THE GOVERNOR.
MRS. WILLIAMS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
BUDGET CLOSED.
Chairman Arberry requested a committee introduction of a bill expanding the jurisdiction of the Taxicab Authority.
MR. PERKINS MOVED FOR COMMITTEE INTRODUCTION.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
There being no further business, the meeting was adjourned at 10:35 a.m.
RESPECTFULLY SUBMITTED:
_________________________
C. Dale Gray
Committee Secretary
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Assembly Committee on Ways and Means
May 6, 1993
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