MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
March 19, 1993
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:05 a.m., on Friday, March 19, 1993, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator William R. O'Donnell
Senator Matthew Q. Callister
COMMITTEE MEMBERS ABSENT:
Senator Diana M. Glomb (Excused)
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Jeanne Botts, Program Analyst
Dee Crawford, Committee Secretary
OTHERS PRESENT:
Judy Matteucci, Director, Department of Administration
P. Forrest (Woody) Thorne, Deputy Budget Administrator, Department of Administration
Fernando Romero, Executive Director, Nevada Equal Rights Commission
Elias Ghanem, Ph.D., Chairman, Nevada Athletic Commission
Sandy Johnson, Office Assistant, Nevada Athletic Commission
Frankie Sue Del Papa, Attorney General
Luther Mack, Commissioner, Nevada Athletic Commission
David Perlman, Administrator, Commission on Postsecondary Education
Sandra Pardo, Administrator, Taxicab Authority
Tom Cahill, Director, Colorado River Commission
Doug Beatty, Chief Financial Manager, Colorado River Commission
Karen Galatz, Vice Chairman, Colorado River Commission
Senator Raggio announced Senator Glomb has been excused from the meeting.
Office of Equal Rights - Page ll03
Fernando Romero, Executive Director, Nevada Equal Rights Commission, came forward to testify and announced he has been the incumbent in this position since July 6, l992. He informed the committee he received a telephone call from the district director at the Los Angeles district office of the United States Equal Employment Opportunity Commission advising him that, due to lack of closure of cases, Nevada lost its HUD [Housing and Urban Development] contract, totalling $l00,000. He stressed the fact that immediately his agency budget was affected by a reduction of $l22,000. He offered the information he was advised by the budget office that he could not ask for any further positions for his agency. He proclaimed, "In fact, they were going to cut three positions from one budget and two from another that had already been approved by the legislature and by the Governor."
He professed the current budget could perhaps be "lived with...however, it is not going to do what the Nevada Equal Rights Commission is really set out to do."
He offered the example that, aside from managing discrimination complaints, the agency oversees complaints relevant to housing issues, as well as discrimination regarding public accommodations. Further, the agency is mandated to conduct training workshops relative to discrimination in employment and the workplace. He explained, "To do this, of course, I need the staff...and I also need the funds in order for staff to travel to places like Winnemucca, Elko, Carson City, Reno and Las Vegas." He voiced his opinion the budget, as presented, was somewhat unrealistic.
He urged legislative authorization to change the Nevada housing laws to be commensurate with the United States HUD statutes and regulations. He explained the process would allow the agency to, once again, take part in the HUD contract. Recapture of the HUD contract would ensure the agency would be compensated for its efforts in the housing discrimination cases it manages. He also requested to allow the agency to charge for its training efforts. He advised, "I've been told by the budget office that, unfortunately because of the way the budget is, I can no longer conduct training. It is under the Nevada Revised Statutes that I do conduct training." Mr. Romero stressed he was not soliciting the agency budget be augmented, he was requesting the privilege of the agency to generate supplemental funding through its training efforts and the HUD affiliation.
Senator Raggio asked Mr. Romero to readdress the instance surrounding loss of the HUD funding.
Mr. Romero explained:
From what I am able to understand from the original director of that agency, apparently the Nevada Equal Rights Commission was told that it was not complying fully to the housing laws; and they wanted copies of the state laws to ensure that we were equivalent to the federal laws. That was never submitted and, in fact, cases for which the Nevada Equal Rights Commission should have been paid...documentation was not submitted and consequently the funds were withheld. The contract, in essence, was withdrawn.
Senator Raggio queried whether that funding source would have funded three positions.
Mr. Romero replied it would have funded two positions and added, "Unfortunately the money is not there. She is more than willing to give us another opportunity....The only problem that stands in the way is the equivalency of our state laws to the federal laws."
Senator Raggio asked if any effort was being made to address the equivalency issue.
Mr. Romero stated a deputy attorney general in southern Nevada is currently working on the matter.
Senator Raggio asked Mr. Romero about the opinion of the deputy attorney general assigned to the Nevada Equal Rights Commission regarding the likelihood Nevada law will be in compliance with the federal law so that funding could be restored.
Mr. Romero stated the "likelihood is good...." He stated he expects to have an official opinion by the end of this month.
Senator Raggio professed the legislature made an enhanced commitment to the agency last session by adding staff positions. He voiced his sorrow to learn those same positions have now been eliminated.
Senator Raggio asked what other emergencies have been experienced by the agency.
Mr. Romero answered the agency has an active inventory of over l,700 cases and the backlog is tremendous.
Senator Raggio interjected to ask how that compares to the inventory 2 years ago.
Mr. Romero reported the inventory has increased by 300. He added that in August, one of the investigators accepted a promotional position in private industry. The vacated position was not filled until 8 months later. He explained the agency has been functioning with four investigators in southern Nevada and three in northern Nevada. The southern Nevada investigators carry an average of over 300 active cases and northern Nevada investigators manage l50 active cases. He offered the statistic the national estimate is ll4 cases.
Mr. Romero announced the agency receives over 5,000 complaints per month. Turning to the agency performance indicators, Mr. Romero explained there has been no previous cross-training of agency staff. He explained documentation was difficult to ascertain regarding the status of the office, as the accountant retired 2 weeks previous to Mr. Romero's date of employment. He offered the following information:
We have no computerized system, so between the time a person comes in, and the time an information investigation commences, there are cases that are not documented. There is a whale of a backlog stuck between that period of time, which is approximately 5 or 6 months....That's where we found approximately...500 cases....
Senator Raggio queried whether the agency's performance indicators, as outlined on the Executive Budget, were incorrect.
Mr. Romero responded in the affirmative.
Senator Raggio requested Mr. Romero submit a new list of accurate performance indicators to the committee. Senator Raggio asked, "On a scale of l to l0, how would you judge the efficiency and capability of this office, when you compare it to its mission statement?"
Mr. Romero responded the capability is "certainly a 9, but not a l0, because I have good staff, but...the direction has...not been there [but] the capability is quite high...."
Senator Raggio asked, "Are you including in that the staff that is being authorized here? How effective will that staff be?"
Mr. Romero insisted:
The staff cannot be too effective if the caseload keeps growing, and it's going to keep growing because of the population increase. We have l3,000 jobs opening in the next year and one-half, and we have the advent of the l99l Civil Rights Act. We also have more females filing sexual harassment cases. In one year, those cases grew by 23 percent. I see it growing dramatically and I really do need at least, at the present, three investigators, two clerical and two computerized systems....
Senator Raggio asked, "Are any of those included in the budget, as recommended?"
Mr. Romero responded, "No...We did ask for them, but they were cut from both budgets."
Senator Raggio asked for clarification regarding the HUD funding and queried whether funding was rejected because "application was not submitted for the money?"
Mr. Romero responded in the affirmative.
P. Forrest (Woody) Thorne, Deputy Budget Administrator, Department of Administration, stepped forward to clarify earlier testimony:
Of the positions requested in the first budget, the 9.5 [positions]...were recommended. In the second budget, there were ll positions, however, three of them are currently vacant and they were eliminated because the funding wasn't there from the federal government.
Senator Raggio asked, "Does that include the...positions funded by HUD?"
Mr. Thorne responded in the affirmative.
Senator Raggio asked Mr. Thorne, "Are you aware what he [Mr. Romero] just stated that money may become available?"
Mr. Thorne responded:
Yes, if there is a submission from his office to provide us with the information on what correction is necessary to the statutes to restore that, we will be happy to submit that. However, we've been trying to get that information from his office since, at least, September.
Senator Raggio affirmed comments by Mr. Thorne and elucidated:
The budget office has been saying they've been trying to get this since last September. I don't want to belabor this, but something is remiss here. Somebody isn't doing what should be done...to get this thing done. Let's get it done, that would be at least two positions, even if they're specialized....
Senator Coffin referenced the l99l Executive Budget and indicated material submitted to the Senate Committee on Finance by Delia Martinez, previous director of the Nevada Equal Rights Commission, indicated the caseload was increasing at about l0 percent per year, previous to l99l. "She expected it to increase at l0 percent, cases filed over the closure rate, in the future, if no staff were added," he offered. Continuing, Senator Coffin averred:
She gave us a projection on how many people she needed to be able to cut that closure into, at least, a positive ratio. We added sufficient people to do that, so I think in terms of the indicators, the indicators are pointing in the direction we were warned they would point if we didn't add any people. So we did add people and then they were taken away in the budget reductions.....If this agency doesn't get any additional staff, the blame for that must lay directly with the budget office. I think it's important for the budget office not to let its people hang out to dry here, when it's basically the budget office's decision to withhold spending money that the legislature appropriated. I realize you didn't have the money, but you could have taken it from other places, and this is the reason this agency is behind.
Mr. Thorne explained all state agencies suffered from budget reductions as a result of lack of revenue. "This agency certainly isn't the only one that you've seen that has suffered from those budget reductions," he protested.
Senator Coffin countered:
Mr. Thorne, let me tell you this. That it's not the agency that is suffering, it's the thousands of people out there that are not receiving equal rights treatment. That's what is suffering....If we don't get more people in this agency, a lot more women and older men, then others are going to continue to suffer unequal treatment at the hands of various segments of the public. That's the whole point of this mission. If we can't increase these, we might as well dissolve the agency. It was your department's decision to cut those budgets, and you did. You should at least be helping to offer some solution to the problem.
Senator Raggio invited Mr. Romero to report back to the Senate Committee on Finance, in l0 days, regarding the effort being made to reinstate the HUD funding. Senator Raggio also suggested Mr. Romero meet immediately with his deputy attorney general concerning the HUD compliance issue. Senator Raggio directed Mr. Romero to meet with the budget office staff to determine if the budget could be adjusted to accommodate the needs of the agency. It was announced the agency budget would be rescheduled for hearing within l0 days.
Senator Jacobsen expressed his desire that Mr. Jerry Halloway, Chairman of the Nevada Equal Rights Commission, be present at the rescheduled hearing.
Athletic Commission - Page 569
The Nevada Athletic Commission has jurisdiction over all boxing contests, full contact karate, wrestling matches and exhibitions conducted in Nevada. The commission collects fees from the sale or lease of radio, television, and motion picture rights and promotes the state as a host for these events. The Nevada Athletic Commission consists of five members appointed by the Governor and currently operates with a staff of two positions, after the executive director position was eliminated as part of the overall budget reductions. The l989 legislature added a .50 cent surcharge on all tickets to professional boxing matches in the state to support amateur boxing programs. As indicated under the Base budget revenue titled Other, anticipated collections of upwards to $50,000 will be accomplished in each of the coming 2 years.
Elias Ghanem, Ph.D., Chairman, Nevada Athletic Commission, distributed Exhibit C, 1993-1995 Budget Presentation, to the committee and testified while referencing that document. He pointed out the budget was reduced by 20 percent, or $37,600, and abolishment of the executive director position resulted in an additional reduction of $55,l23, with a total reduction this fiscal year of $92,723. The working budget, he pointed out, was $ll9,0ll. Dr. Ghanem requested that funding be reinstated. He cited the following argument that funding earmarked to pay the independent contractors was reduced to $l8,800, while the agency has already expended $l3,000 this fiscal year. He opined the independent contractors are vital to all boxing matches and explained they are in the dressing rooms, as well as corners of the boxing ring, to ensure compliance of the law, as well as to ensure the safety and welfare of the boxers, respectively.
Dr. Ghanem pointed out the Nevada Athletic Commission generated over $l million from the month of June l992 to the present time.
Dr. Ghanem drew the committee's attention to salaries paid to executive director positions in other states. Those salaries
far exceed the funding allocated for Nevada's executive director, he pointed out. He requested the salary of the executive director be increased to an appropriate level of $55,000 annually. He also requested the executive director position be filled by July l, l993, instead of October l, l993, as proposed by the budget office, explaining an important boxing agenda was forthcoming.
Senator Raggio asked if the commission would be able to secure an incumbent by July l, l993.
Dr. Ghanem responded in the affirmative and explained they have received 55 applications and avowed the position could be filled within 24 hours.
Senator Raggio pointed out if there are 55 applicants willing to accept the executive director position at the current established salary, why does the commission feel it is necessary to enhance it.
Dr. Ghanem responded:
We have had applicants that have said they will take half the salary. We have had applicants that said they will take $l0,000 for that position. We want a very honorable someone [person] who can have the position full-time where we don't have to worry about his integrity, his honesty, because boxing...has a lot of rumors going around it. We have to have the right judges...and the right referees....A lot of casino bets are put on those fighters, and we would like to have somebody with integrity, but somebody who can really run the office well.
Continuing, Dr. Ghanem pointed out during the last fiscal year, the overtime earned by classified employees totalled 369 hours. During the current fiscal year, the total reached 356 overtime hours. The agency desires to compensate each classified employee for l00 overtime hours for both Fiscal Year l994 and l995. The need to compensate the employees stems from the small staffing level and busy schedule of events, he opined, and explained many of the events the agency regulates are held on evenings, weekends and holidays.
Dr. Ghanem stated additional funding has been requested in the In-State Travel category to allow the commissioners to be compensated for travel in conjunction with commission meetings. The commissioners have paid their own per diem and travel since January l992, he disclosed. It was acknowledged the commissioners have also relinquished board pay since January l992.
Senator Raggio asked what does the recommended $5,200 per year in travel expenses cover.
Dr. Ghanem answered it covers room and board for the commissioners who are required to be present at the fights.
Senator Raggio pointed out the agency only requested $5,200 and asked for explanation.
Sandy Johnson, Office Assistant, Nevada Athletic Commission, came forward to respond. She testified that originally the agency requested $7,000 annually.
Senator Raggio interjected to point out the Executive Budget does not indicate the agency originally requested $7,000.
Ms. Johnson referred the committee to the Enhancement program of the budget. She explained the agency requested the additional $2,400, which was recommended by the Governor. "With that figure, we can then fund paying the commissioner's way back and forth to the meetings again," she contended.
Ms. Johnson explained she received direction from the budget office that the agency not increase their budget over the existing $ll9,000. She stated an Enhancement program was submitted for the executive director, additional in-state travel plus $l,200 for inspectors and "$8,000 for a one-eighth time attorney general." There has been no funding for equipment over the last biennium, she explained. She contended, "We're afraid for our computer system, which has no service contract and is 5 years old, is going to have a problem or we're going to run out of memory." She estimated $2,000 to $3,000 would cover the cost to acquire additional memory for the computer and purchase of a service contract.
Senator Raggio asked Ms. Johnson to provide an estimate for enhancement of the agency's computer system.
Frankie Sue Del Papa, Attorney General, came forward to testify. She distributed Exhibit D, memorandum dated March l8, 1993, to the committee and testified while referencing that document. She asserted there are some "real and potentially precarious challenges that the commission faces."
Referencing the agency's budget, Ms. Del Papa opined it is critical to the commission to have a full-time executive director. She declared some of the problems the agency is facing is due to understaffing. She expressed concern over the nonexistent investigative capabilities of the agency. She suggested to review and strengthen the governing statutory provisions relative to the Nevada Athletic Commission.
Senator Raggio asked what would be the feasibility of hiring a part-time investigator to perform background research on all promoters and managers to ensure there are no unsavory elements involved.
Ms. Del Papa interjected:
It's probably practical....One avenue would be to put an investigator, part-time in our office, or match up another part-time position, because their work, unfortunately, is very concentrated in short periods of time. It's not a day-to-day thing. When they have a big event, there's a real intense period of time where you need to marshal your forces to take care of that event....
She suggested to use former FBI agents as investigators.
Senator Raggio asked if the Office of the Attorney General has adequate staff to assist in the investigative process.
Ms. Del Papa answered the Office of the Attorney General does not have adequate staff to assist. However, she stated, "Our office would probably be the best place to do it, because of the interaction we have with the [Nevada] Athletic Commission...."
Senator Raggio opined the work load would not justify adding a full-time incumbent to either agency.
Ms. Del Papa offered the suggestion to hire a part-time individual.
Senator Raggio advocated it would be difficult to fill a part-time position.
Ms. Del Papa disagreed and described the concept whereby two half-time positions could be split between two agencies.
Senator Raggio pointed out the Office of the Attorney General does not currently operate at a sufficient staffing level and asked, "So, if we add a half-time position, who is that going to be?"
Ms. Del Papa responded, "You either look to see if you can match a one-half position. There are other agencies, including non-General Fund agencies...."
Senator Raggio interjected, "What it means is, to do a half-time for them, you're suggesting that we really have to add a full position some place."
Ms. Del Papa countered, "No, I'm not suggesting that. I think we need to take a look at it to see if there is a capability to add a full-time position. But even if we had a half-time position, we could work something out in this regard."
Senator Coffin suggested to Dr. Ghanem that boxing be considered as entertainment rather than a sporting event.
Dr. Ghanem responded the commission has worked diligently to ensure boxing is physically very safe in the State of Nevada. He declared the commission has turned away judges it considered untrustworthy.
Senator Callister distributed copies of Exhibit E, Las Vegas Review Journal newspaper commentary regarding Nevada's boxing regulators, to the committee and expressed concern over a pending United States investigation regarding allegations of involvement by characters of unsavory reputations and the careers of licensed fighters. Senator Callister pointed out the article referenced comments by John Redlein, deputy attorney general, and he opined:
These are extraordinary comments to make when you're talking about your own client. I would invite somebody's response as to whether these are just rumors...or if, in fact, these are grave concerns....I can think of nothing more imperative than maintaining the absolute integrity of boxing in Nevada.
Ms. Del Papa provided background information by explaining she requested a briefing statement from John Redlein, deputy attorney general, who has represented the Nevada Athletic Commission for several years. She stated:
...You've got commissioners, good business people. Dedicated citizens of the state who have been donating their time as a public service in this area....It's a complicated issue because you've got a situation that is very critical to the State of Nevada. Boxing is an important industry...and it brings in a lot of money. Yet you look at a budget that has been cut...at understaffing...at people who are having to function in a different capacity than what they were appointed to....Now you have a Senate investigation. The Senate is looking at, not an investigation into Nevada, they're looking at boxing nationally. One of the things they're interested in is a federal boxing commission....The memo [from Mr. Redlein] was drafted for me, as attorney general, to tell me about certain areas that have concern. I share those concerns....and I'm here today to tell you that first, and foremost, I think this commission is understaffed. I think it is imperative...that we have an...adequately compensated executive director. I think it's imperative we beef up investigations. We can talk all we want about part-time, full-time [positions]....Because, as of today, they have none....
Luther Mack, Commissioner, Nevada Athletic Commission, provided testimony professing all the commissioners were very dedicated individuals. He said, "It's unfortunate that we have the imposition, financially, to pay our own way. I know I spend about $l0,000 to $l2,000 a year travelling back and forth attending various events...."
Senator Raggio assigned Senators Callister and Rawson as a subcommittee to review the budget of the Nevada Athletic Commission.
Postsecondary Education Regulations - Page 580
David Perlman, Administrator, Commission on Postsecondary Education, explained the commission is charged with the responsibility of protecting Nevada students by providing regulation and oversight of the proprietary schools in Nevada. The commission also contracts with the Veterans Administration to provide approval and monitoring of institutions at which veterans use their educational benefits. They currently have licensed 96 vocational and l3 degree-granting institutions. Mr. Perlman stated, "Each school enrolls approximately l5,000 new students annually and collects tuition receipts of approximately $27 million."
It was reported the commission is supported by a combination of General Fund appropriations and federal reimbursements from a Veterans Administration [VA] contract. It was explained the amount of the VA contract is difficult to project because all states draw from a single source of $l2 million and, if the $l2 million cap is exceeded, states are allocated only a percentage of their request.
Mr. Perlman stated the performance indicators reflect a snapshot of the agency's daily routine and reveal the general nature of the work load. The commission collects private school licensing fees for deposit to the General Fund, it was explained. Mr. Perlman informed the committee that legislation has been introduced to raise fees for a change in ownership and/or to add a new degree or program and for initial issuance or renewal of agents' permits. The bill would add a $l,000 fee for applications by unlicensed, out-of-state institutions to employ agents in Nevada and a $5 charge for transcripts held by the administrator of the agency. In addition to fees charged for an initial license, each licensed institution is charged a fee of $4, for each student, at the time of the student's initial enrollment. Fees were increased in l989 to offset 75 percent of the cost of l.5 new staff members, as well as the cost of moving the office to Las Vegas, where most of the institutions are located. Now, fees are again being increased, but one half-time position has been abolished, he announced.
Mr. Perlman informed the committee that, due to reductions in military strength, the VA has developed an outreach program that requires increased participation by the commission. The United States Department of Education has implemented a program, similar to the VA, in which they will contract with an entity in each state to monitor and perform oversight of institutions participating in grants and guaranteed student loans, it was reported. Within the next couple of months, Mr. Perlman stated, the Governor will be requested by the Secretary of Education to appoint individuals to perform the duties of the state postsecondary review entity. If the Commission on Postsecondary Education is selected by Governor Miller, the agency will be required to make numerous regulation changes and possibly add one or more new full-time positions, he disclosed.
Mr. Perlman professed the agency has taken on a more aggressive posture in its role as regulator, which demands increased personnel time. For example, he explained, the results of background investigations were not being returned to the administrator as required, due to the confidentiality of their nature. In February l993 the commission commenced processing all required background investigations. While that change utilizes an inordinate amount of staff time, he stated, it proved successful, as approximately 50 percent of the applicants were identified as having criminal convictions.
Senator Raggio asked if the problem of "diploma mills" has been eliminated.
Mr. Perlman responded it is under control. "I don't think it will ever be eliminated," he opined.
Taxicab Authority - Page 584
Sandra Pardo, Administrator, Taxicab Authority, distributed Exhibit F, State of Nevada Taxicab Authority, Programs and Awards, and Exhibit G, State of Nevada Taxicab Authority, Taxicab Industry Statistics, (Exhibit G - Original on File in the Research Library) to the committee.
The Taxicab Authority, supported entirely by fees it collects, was not impacted by the budget reduction plan, other than the hiring freeze, she announced. Under the reorganization plan, this agency would become a branch of the Division of Business Regulation in the proposed Department of Business and Industry.
This agency regulates the taxicab industry in Clark County and is funded through assessments on taxi drivers for permits, renewals and trip charges and an allocation fee on each cab. The majority of the income, it was explained, is generated from a l5-cent charge for each trip, which is estimated to raise $l.5 million annually. In addition, the agency receives funding from the Clark County Airport for part of the cost of operating the Airport Taxicab Control Officer Program; this revenue source is expected to provide approximately $500,000 each year.
The l99l legislature increased spending for the subsidized transportation program for senior citizens and the handicapped to $300,000 per year. The subsidized transportation program sells coupon books, worth $20 in cab fares, to qualified riders for $l0. The program is currently operated by one coordinator and one volunteer. The agency's increased emphasis on this program has resulted in a 75 percent increase over the prior biennium in the number of registered participants. The number of coupon books issued, for example, has increased from 400 in FY l987-l988 to l4,400 in FY l99l-l992.
It was explained $48,000 per year has been requested under the category Professional Services to pay for processing fingerprint cards through the Federal Bureau of Investigation Identification Division in Washington, D.C., via the Nevada Criminal History Repository, and for court reporters, which are required at board meetings, public hearings and appeals. The agency is expecting increased activity in the coming biennium as Clark County comes out of the recession and faces the opening next year of three major resort facilities.
A significant decrease in the In-State Travel category is accompanied by a corresponding increase in the Operating category in the current biennium, because the agency replaced specially equipped, marked patrol vehicles leased from the State Motor Pool Division with five vehicles purchased by the agency.
Ms. Pardo proudly announced the agency was issued a national award from the National Clearinghouse on Licensure, Enforcement and Regulation for programs of driver awareness, special service vans training and video, green distress light and video installation, dispatcher/telephone personnel training and video and technical improvements for driver safety, as outlined in Exhibit F.
Senator Jacobsen asked if the taxicab drivers were CPR [cardiopulmonary resuscitation] certified.
Ms. Pardo replied no and explained it was due to a liability issue.
Colorado River Commission - Page 1491
Tom Cahill, Director, Colorado River Commission, testified from written testimony, as outlined in Exhibit H.
It was explained one of the major goals of the Colorado River Commission, in conjunction with the Southern Nevada Water System and its participant members, is to aggressively pursue other sources of water to ensure a long-term water supply for southern Nevada. Concepts being explored through the Colorado River Basin include increasing flow into the Colorado River through river augmentation programs, such as weather modification and increasing Nevada's available water supply from the river through inter- and intra-basin water transfers and exchanges.
Mr. Cahill explained the goals and objectives of the commission are mandated by statute and various contractual commitments dictate necessary activities, programs and objectives. These activities are accounted for and funded through three enterprise funds and one special revenue fund.
Senator Raggio turned the gavel over to Senator Rawson.
It was explained, the special revenue fund comprises the general governmental activity of the commission. The revenue sources are administrative charges received from power and water sales, with some interest earnings received from the treasurer's investment of commission cash balances. Payroll expenses for all commission staff are recorded in this fund, as are all general expenses for the purchase of office supplies and equipment and commission operational expenses.
Senator Rawson referenced the performance indicators on page l495 and asked for information regarding the contractual limit.
Mr. Beatty replied the contractual limit is 299,000 acre feet in consumptive use.
Senator O'Donnell referenced page l49l and pointed out $l80,000 was transferred to the Office of the Attorney General. He asked, in terms of that transfer, what is actually being transferred and will it necessitate additional staff being hired by the attorney general.
Mr. Beatty referenced the category titled Agency Request, listed under Operating expenses, in the amount of $l75,434, and said it includes the cost allocation from the attorney general for two full-time deputies.
Research and Development - Page l499
This fund was established for the purpose of defraying the costs of engineering studies, analyses, negotiations and other efforts in protecting the interests of the state in the development and acquisition of water and power. An administrative charge for the sale of power is the primary funding source for this budget account, it was pointed out.
The agency requested to increase both the revenues and corresponding expenditures for contract services, for both years of the biennium, by an additional $l50,000 under the Enhancement category, as well as $l50,000 in the Salary and Operating Costs, for both years of the biennium.
Senator O'Donnell asked for an explanation of the requested increase in the aforementioned categories.
Mr. Cahill explained customers have requested the acquisition of another transmission facility. He stated the acquisition will necessitate an increase to the surcharge.
Senator O'Donnell asked if the calculation will be included in the rate base.
Mr. Cahill responded in the affirmative.
Senator O'Donnell asked if that action would require a rate hearing before the Public Service Commission.
Mr. Cahill stated the commission would not be involved in a rate hearing. He explained funding for the commission is derived from a surcharge being placed on the services performed.
Karen Galatz, Vice Chairman, Colorado River Commission, interjected to explain the transmission line of the substation is presently controlled by the Western Area Power Administration (WAPA). Expressing her opinion, Ms.Galatz stated WAPA has an arbitrary procedure for setting rates. She opined it is a one-way process for rate setting, with no accountability, so the rates have been escalating at significant levels without input from local customers. Therefore, the local customers have requested the Colorado River Commission to purchase the facility. She concluded that by purchasing the power line and redesigning the facility, they would have control over the rate process, the design needs and specific growth needs of southern Nevada. She insisted the surcharge is designed to finance the efforts to acquire the power lines, but the goal is to reduce the power rates.
Senator Rawson pointed out no performance indicators were listed for this budget and requested they be sent to Dan Miles, Fiscal Analyst.
Alfred Merritt Smith Water Treatment Facility - Page l505
This fund provides for operational costs associated with the treatment of Colorado River water taken from Lake Mead.
Federal Pumping and Transmission Facility - Page l497
This fund provides for the cost associated with delivery of the treated Colorado River water to customers. Together, the Alfred Merritt Smith Water Treatment Facility and Federal Pumping and Transmission Facility comprise the Southern Nevada Water System. This system accounts for the activities of the commission in wholesale marketing of the major portion of Nevada's Colorado River allocation to the southern Nevada area.
Power Marketing Fund - Page l50l
This fund accounts for the purchase and sale of Nevada's share of hydropower from various generating plants on the Colorado River. Funding for this account is provided through the sale of power.
Fort Mohave Development Fund - Page l503
The Fort Mohave Development Fund records the activities of the commission land-related activities for the Fort Mohave transfer area. Funding is provided primarily through proceeds from the sale of land.
Doug Beatty, Chief Financial Manager, Colorado River Commission, testified from written testimony, as outlined in Exhibit I. He explained approximately l5,000 acres of land have been purchased by the commission in the Laughlin, Nevada area. Four thousand acres have been sold or auctioned to various entities, he stated.
There being no further business to come before the committee, Senator Rawson adjourned the meeting at l0:l0 a.m.
RESPECTFULLY SUBMITTED:
Dee Crawford,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
??
Senate Committee on Finance
March 19, 1993
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