MINUTES OF THE
SENATE COMMITTEE ON FINANCE
Sixty-seventh Session
April 23, 1993
The Senate Committee on Finance was called to order by Vice Chairman Raymond D. Rawson, at 8:00 a.m., on Friday, April 23, 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 Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Bob Coffin
Senator Diana Glomb
Senator William R. O'Donnell
Senator Matthew Q. Callister
COMMITTEE MEMBERS ABSENT:
Senator William J. Raggio, Chairman (Excused)
STAFF MEMBERS PRESENT:
Dan Miles, Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Jeanne L. Botts, Program Analyst
Marion Entrekin, Committee Secretary
OTHERS PRESENT:
Tom Stephens, Manager, State Public Works Board
Darrel R. Daines, State Controller, Office of the State Controller
Mary Sanada, Manager, Accounting Services, Office of the State
Controller
Karen Kavanau, Director, Department of Data Processing
Robert L. Seale, State Treasurer, Office of the State Treasurer
Jean Baecher-Brown, Director, Child Nutrition, State Department
of Education
John E. Neill, Chief, Fiscal Services, Department of Prisons
Eugene T. Paslov, Ph.D., Superintendent of Public Instruction,
State Department of Education
Gloria Dopf, Director, Special Education, State Department of Education
Ruth Abersturi, Supervisor, Student Support Services, Carson City
School District
Marcia Bandera, Dirctor of Instruction, Elko County School
District
Senator Rawson invited Tom Stephens, Manager, State Public Works Board, to deliver a special report before the committee.
Mr. Stephens stated in December 1992 building nine at the Nevada Mental Health Institute, Sparks, Nevada, sustained wind and snow damage during severe weather conditions that resulted in destruction of a portion of the 20,000-square-foot roof on this building. He pointed out that the roof had been repaired and rebuilt approximately 2 years ago, but the winds removed about a 2,000-square-foot portion of it. In early January 1993 inspectors from the State Public Works Board looked at the roof along with the roofing manufacturer and a representative from Van Dyne and Sons Roofing who performed the repair services to this roof 2 years ago. At that time, Mr. Stephens said his office was advised poor adhesion had been used on the roof, and the roofing company acknowledged a construction defect. Van Dyne and Sons Roofing proceeded to perform temporary repairs to the roof, and the roofing manufacturer, with whom the state has a bond, inspected the roof.
Mr. Stephens further testified in about the latter part of January 1993 his office began to receive letters from the roofer [Van Dyne and Sons Roofing] and the roofing manufacturer stating the damage caused to the roof was due to an act of God, there was no problem with the original construction, and they were not responsible.
Mr. Stephen's office discussed the situation with the Office of the Attorney General who sent letters and arranged a meeting with the manufacturer and the roofing company. It is the contention of the State Public Works Board that poor or faulty construction caused the portion of the roof to blow off.
On April 17, 1993, a different portion of this roof blew off during another severe windstorm. After an inspection performed by the roofing manager for the state, a meeting was held with a committee of the State Public Works Board who decided legal action would be considered. Mr. Stephens pointed out this would not achieve the immediate repairs needed to the roof prompting the agency to view the damages sustained as an act of God. The agency then contacted the Risk Management Division for insurance coverage although they will still try to recover damage costs from the roofer.
Mr. Stephens mentioned in both instances in which portions of the roof blew off, severe weather conditions with very high winds prevailed. He felt the roof should have withstood the high winds but admits this is a matter that will have to be litigated.
The Risk Management Division has assured the State Public Works Board that the repairs will be done on the portion of the roof that was lost during the windstorms. However, they will not address other damage to the roof.
Mr. Stephens said his office has hired a different roofing company, Universal Roofing Company, to perform temporary repairs and the original roofer will be omitted from the process. The cost to the state was $1,500 for the temporary repairs. They also have an estimate of $18,000 to do the permanent repairs. These costs will be paid by the Risk Management Division. However, his office will pursue restitution of the damage costs from the roofer and the roofing manufacturer because it is believed the specifications and design of the roof accomplished by the state was in order.
Senator Rawson noted at the time of installation, the roof was guaranteed to sustain winds up to 90 miles per hour.
Senator Rawson asked if his understanding was that the roof was designed by the state.
Mr. Stephens answered in the affirmative stating Lyle Woodward did the design on the roof as he did on building eight next door that did not sustain any damages whatsoever during these severe weather conditions. He added the design is a standard design in accordance with all the manufacturer's specifications, and the roofing manufacturer certified the design and bonded the roof.
Mr. Stephens commented the roofing manufacturer has not questioned the design of the roof but felt unusual weather conditions led to the damages sustained to the roof.
Senator Rawson remarked the committee's concern is whether or not funds should be allocated beyond what will be paid through the Risk Management Division since the Nevada Mental Health Institute has been contemplating moving out of the building. He further remarked if funds are required beyond the amounts that will be paid by the Risk Management Division, this should be decided right away since there is equipment housed within the damaged structure that must be protected.
Mr. Stephens emphasized he believes the problems began at the time of the original construction of this roof, but the roof can be fixed and the state will proceed with the repair process that will be paid through the Risk Management Division and warranty funds.
Senator Coffin noted it is important for the State Public Works Board to continue to maintain a list of contractors with failure rates or with whom the state has had conflict, to avoid utilization of their services at a future date.
Mr. Stephens agreed and said the roofing manufacturer will be removed from their list of approved providers since it is expected the manufacturer should stand behind their work, and this one did not.
Senator Jacobsen remarked he has been trying to establish an inmate-roofing crew to be supervised by the Division of Forestry to perform temporary repairs only. He asked Mr. Stephens if the State Public Works Board would utilize the services of such a crew.
Mr. Stephens answered he had a discussion with Mike Meizel, Administrator, Buildings and Grounds Division, regarding the utilization of an inmate crew; and they concluded such a crew could be used to perform cleaning and light repair work in areas throughout the state. He further commented with the new high-technology roofs requiring special training to perform repairs, an inmate crew would not be as useful.
Senator Rawson opened the meeting for discussion of Senate Bill (S.B.) 273.
SENATE BILL 273: Makes appropriation to office of state controller for expenses relating to assessment of need for statewide accounting system.
Darrel R. Daines, State Controller, Office of the State Controller,
began his testimony concerning S.B. 273 by reading from prepared text, Exhibit C.
Senator Rawson noted the controller's office wishes to lease the FAMIS (Financial Accounting Management Information System) general ledger system and would request funding from the Interim Finance Committee for this purpose. He asked what the cost of the lease would be on an annual basis.
Mr. Daines said over a 5-year period it would cost approximately $800,000 or about $200,000 per year. This would depend upon what is added to the FAMIS system and the amount of help his office may require from the consultants (Peat Marwick Management Consultants).
Senator Rawson asked if the funding for this project is included in the budget for the controller's office.
Mr. Daines answered during the 1991 session of the legislature, funds were allocated to enlarge the computer facility for his office and along with this allocation, they were granted broad control over how the funds would be spent. Fortunately, Mr. Daines stated, his office was able to spend well below the original cost estimate and the amount allocated to acquire equipment. At that point, his office intended to use the balance of the money not spent to upgrade the system. They are now asking for permission to enter into a contract with Peat Marwick Management Consultants to review their present accounting system and make recommendations for improvements that will benefit the state.
Senator Rawson asked how the Office of the State Controller will interface with the Department of Administration or (the new) Department of Finance regarding this issue.
Mr. Daines said the only system they are dealing with at this time involves only the general-ledger system within the controller's office. It is not going to change what the budget office or other agencies see in the information provided.
Mr. Daines commented there are many subsystems available in the new FAMIS general-ledger system but his office does not plan to purchase these right away because they are not interested in trying to develop a new state accounting system all at once. His office prefers to phase in additional subsystems as necessary.
Senator Rawson asked if this is a general-ledger account that will reflect every check that has been written on the state's account. Mr. Daines responded in the affirmative.
Senator Rawson then inquired, "Will the agencies be able to obtain feedback from your office as to where they are in their budget, or are we duplicating this though the budget office?"
Mr. Daines replied his office is not duplicating efforts through the budget office. In fact, he emphasized, they will be improving the information available due to an expansion of their processing system.
Senator Rawson asked if the accounting system would be on the Hewlett Packard system, and Mr. Daines replied it would be.
Senator Rawson asked if other computer devices being implemented in the state, particularly in the budget office, will network with the equipment in the controller's office. Mr. Daines responded there will be an ability to network totally with the equipment in his office.
Senator Jacobsen asked if it was necessary to spend $150,000 for a study to determine the feasibility of the new accounting system. He would rather see the state spend this money for equipment than for a study in conjunction with Peat Marwick Management Consultants.
Mr. Daines answered the Peat Marwick Management Consultants have assured his office they can furnish their FAMIS system to operate on Hewlett Packard computers. He felt it would be more effective for them to perform this study to prove to his office what their FAMIS system can do since it currently is not designed to operate on Hewlett Packard equipment.
Mr. Daines added, "I want them to prove they can implement this system since it could result in a tremendous savings...millions of dollars...if what they told us is correct. I feel more comfortable spending $150,000 to see what we have before committing another $800,000."
Senator Jacobsen stated at a recent subcommittee meeting regarding purchasing issues, he became aware that if the agencies and departments are allowed to do their own direct purchasing, this will require voluminous assessment by the controller's office of the purchase orders. He asked Mr. Daines if the controller's office will be able to handle this additional work load.
Mr. Daines answered if the centralized purchasing system is changed, his office will require additional people to capture the data. Currently, purchasing information is flowing into his office on a tape disk both for the fixed-asset inventory and all of the purchases. If individual agencies perform their own purchasing, this will generate paperwork for them and about 5,000 documents each month that will require input by his office into the computer. He added this will be a step backwards for his office, but it would indicate the need for his office to hire at least one additional keypunch operator.
In response to a question by Senator Glomb regarding a study of the computer system in the controller's office, Mr. Daines said his office has already conducted that study with the agencies that have an accounting system available; and they have determined the new FAMIS system marketed by Peat Marwick Management Consultants appears to be the most effective system. That firm will be conducting a feasibility study of the FAMIS system operation in the controller's office environment.
Senator Glomb felt it was not a good idea to purchase equipment from the same firm performing an assessment of need.
Mr. Daines explained the agency was not buying equipment. He further commented the Peat Marwick group will only write the software that will enable the FAMIS system to operate on the existing Hewlett Packard equipment already in the controller's office rather than on a piece of equipment this firm designed to operate with the FAMIS system.
Senator Glomb then wanted to know what kind of assessment the Peat Marwick firm will be conducting.
In an attempt to clarify the Peat Marwick study, Senator Rawson called attention to S.B. 273 that states, "..an assessment of the need for a new statewide accounting system or for changes to the current system..."
Mary Sanada, Manager, Accounting Services, Office of the State
Controller, responded the assessment that would be performed would be to conduct a study on all of the equipment now in operation in the controller's office to determine if the FAMIS system would be compatible for the state's needs and handle all of the peculiarities of state reporting. Ms. Sanada said in replacing their software, her office does not want to cause an upheaval within all of the agencies. They want to keep everything as similar to the users as possible and just change what is happening inside the box while giving the controller's office better capabilities for propitiating their reporting operation that they do not have now with the existing system.
Ms. Sanada summarized the study will look at all of the pieces of the state accounting system now in place to determine if the new software will accommodate all of those needs.
Senator Glomb remarked, "...but it will only look at your office [system]?"
Ms. Sanada replied the study will look at the core system which is most of the state's system. She pointed out the system currently "talks" to systems from the Department of Transportation, Employment Security Department, Budget Division, and to purchasing and payroll systems operational within the state system. The new- core package her office is talking about installing will simply replace the programs that are currently running in-house which are all programs that were written in-house. However, the existing programs have inadequacies that Ms. Sanada said makes their job difficult. The intention of the controller's office is to have minimal impact on what all the other agencies are doing and part of this study will have to prove the controller's office will still be able to accept purchasing and payroll data as well as all of the input from other agencies. This study will also have to prove that the controller's office will be able to give data back to the respective agencies.
Senator Glomb concluded she still has reservations about the study and asked how this study will interface with all of the agencies within the state and their data needs.
Karen Kavanau, Director, Department of Data Processing, said she wished to discuss four points and testified:
First in response to Senator Jacobsen's comment about preferring to skip the [$150,000] assessment....Many of the very expensive assessments done in the past have not been valuable. If done correctly a needs' assessment should define the needs, assure compatibility, and appropriateness of the solution.
Secondly, I agree with Senator Glomb that the vendor who has something to gain...and let us not lose sight of the fact that the FAMIS system does belong to Peat Marwick....If the controller purchases that product it will be purchased from Peat Marwick and it is those same people that will come in and prove that is the right system to buy.
Third, I disagree with the definition of the assessment that the controller's office is intending to perform. According to Ms. Sanada, they are going to look at the core system and match the fit between their old general ledger and the new one. That is not the purpose of a feasibility analysis. A feasibility analysis should go in without an end solution in mind, define the need, what business processes are not being done correctly or on time....It should then talk to the users and anybody that has an interface to the system and then document those needs and go out with an RFP [Request for Proposal]...I am not suggesting an RFP is the solution in this case. In reading materials I have been given by the controller's office, I do not believe that is the direction that this assessment is going in.
Finally, I would like to say that pursuant to Nevada Revised Statutes (NRS) 242.111 and (NRS) 242.115, elected officials must follow regulations, policies, and procedures as set forth by the Department of Data Processing. As such, this study would be performed through, not necessarily by, the Department of Data Processing consistent with Regulation Nevada Administrative Code (NAC) 242.120 which is a regulation that the department just recently adopted which talks specifically to the contents of a feasibility study....As long as those statutes stand firm, I would definitely want to be involved in this. I do not have a problem with them performing a feasibility analysis which is the appropriate thing to do. I just do not think the definition they are using is the one that suits what they need to do. We certainly would not allow any of our customers where we are developing a system to perform an assessment like that and assume that does define the need....I do not think it does define the need.
Robert L. Seale, State Treasurer, Office of the State Treasurer,
wished to testify in support of S.B. 273. He remarked that while the passage of S.B. 273 is probably not the perfect solution, he believes the accounting system presently in place is inadequate and, in his opinion, has been inadequate for sometime.
Mr. Seale commented:
I am responsible for managing the state's cash. We have a portfolio that this morning was at $1 billion....I have no modern data-processing equipment other than two pieces of equipment in my office that I supplied to allow me to do my job. The controller and I have been working together very well, and we have been able to hold together an incredibly inadequate system in the treasurer's office. Much of our portfolio was managed by hand....This, while it is not the best solution, is a solution. In terms of cost, let us focus on just what we can do in the treasurer's office. If I have a mechanism for seeing the money more quickly, investing that money more quickly out of some of my 350 bank accounts...this action you might take could be paid for just out of the increased earnings in the treasurer's office.
Senator Rawson stated he believed it would be the committee's intention to see that they protect the important functions of the constitutional offices in a manner that will interface with the rest of the state and accomplish the state's work in a more efficient manner.
Senator Rawson assigned S.B. 273 to Senator O'Donnell for the subcommittee on data processing to review and report their findings to the general committee in order to process the bill. Senator Coffin also agreed to work with Senator O'Donnell regarding this assignment.
Senator Jacobsen stated it would be an advantage to have the committee visit the Office of the Controller and the Office of the
State Treasurer to view their accounting operation and computer equipment.
Mr. Daines wished to conclude his testimony in support of S.B. 273 by stating:
Our options are two...I can come to you with a request for $10 million or $12 million to do this job right...the right way to do it...or we can continue to do what we have been doing which is to hold things together until the state gets enough money to cut loose with that kind of money because that is what is being spent....Illinois is spending $32 million on their accounting system. This [passage of S.B. 273] is the cheapest way for us because I do not know where you are going to get the money to do this any other way.
Senator Rawson closed the hearing on S.B. 273 and asked the subcommittee to report their findings as soon as possible.
Senator Rawson opened the hearing on Senate Bill (S.B.) 87.
SENATE BILL 87: Expands eligible participants in program of nutrition provided through schools.
Jean Baecher-Brown, Director, Child Nutrition, State Department
of Education, testified before the committee in support of S.B. 87 by reading from prepared testimony, Exhibit D, which has as an attachment a list of public and private nonprofit schools, institutions, child-care centers, camps, and service organizations throughout the State of Nevada.
Senator Rawson asked how many additional people will be served by expanding the eligible participants for the nutrition program.
Ms. Baecher-Brown replied this expansion may not change the number of individuals being served, but the concern of the department is they are serving adults under the grants but the terminology of the law as presently written does not indicate that.
Senator Rawson asked if there are any groups that will be picked up as a result of the name change to "Programs of Nutrition".
Ms. Baecher-Brown answered, "No, not necessarily unless we were to bring in other grants."
Senator Rawson asked if the program is funded through federal funds only.
Ms. Baecher-Brown said it is also partially funded through state and local funds to meet federal matching and maintenance of effort requirements.
Senator Coffin asked the amount of the state matching funds.
Ms. Baecher-Brown said for the National School Lunch Program it is $588,732, which is a flat amount since it is not figured on a percentage basis.
Senator Rawson asked how much federal money is received.
Ms. Baecher-Brown said the department anticipates receiving about $21 million in the next biennium. They have received about $18 million for the current biennium. She added the minimum for Maintenance of Effort is approximately $62,000.
Ms. Baecher-Brown said the nutrition programs are up for reauthorization in 1994 and the state matching funds and maintenance of effort requirements could be changed at that time.
Senator Jacobsen asked if there is a requirement for a payment from a student or adult.
Ms. Baecher-Brown said under the National School Lunch Program children who are eligible for reduced-price meals or those who are not needy would pay for meals. Under the Child and Adult Care Food Program the children do not directly pay and adults in care centers also do not directly pay. There is no change for those who are under the Nutrition Education and Training Program. The gross income of the families of children who receive meals free under the National School Lunch and School Breakfast program cannot be more than 133 percent of the poverty level.
Senator Rawson closed the hearing on S.B. 87 and opened the hearing on Senate Bill (S.B.) 385.
SENATE BILL 385: Increases required balance of prison revolving account.
John E. Neill, Chief, Fiscal Services, Department of Prisons, stated the department has asked that their current prison-revolving account, which contains $5,000, be increased to $10,000. He explained the main purpose of the prison-revolving account is to pay gate money which is the release money for inmates leaving the confines of the Department of Prisons.
Senator Rawson asked if this issue had been discussed during budget hearings for the department.
Mr. Neill said gate money had been discussed during budget hearings but not the requested increase to $10,000 for the prison-revolving account.
Mr. Neill continued to say that in 1979, when a prison-revolving account was first introduced, there were 845 releases. In fiscal year 1992 there were 3,076 releases. The department has now reached the point of not having adequate funds to cover the number of releases they have each year. The fund averaged a payment of $26.30 per inmate in fiscal year 1992, but that amounted to $80,891 for 3,076 releases.
Mr. Neill said the department is experiencing continuing growth of their prison system and with or without the Facilities Capacity Act, they will still continue to grow.
In response to a question by Senator Jacobsen, Mr. Neill stated the prison-revolving account is a very simple account placed in a checking account with the First Interstate Bank of Nevada from which the department writes a check to the inmate upon release. Nobody has control of this account except the Department of Prisons.
Senator Rawson asked Mr. Neill if the Facilities Capacity Act is passed, does he anticipate that funds in excess of $10,000 would be needed.
Mr. Neill responded if the act is passed they anticipate the release of 865 inmates the first year of the biennium and 473 the second year of the biennium and $10,000 will be an adequate amount to cover the gate money costs.
Senator Rawson asked if this number of inmates released is in addition to the number of releases in those years.
Mr. Neill replied the 865 and 473 releases would be in addition to the regular releases.
Senator Glomb asked the amount of the gate money.
Mr. Neill replied the department is allowed to pay up to $100 to an inmate leaving the system. They first determine if the inmate has at least $200 in their own savings account; and if so, the department is not required to give that inmate any additional money upon leaving the prison system. If the inmate has under $200 in their savings account, a one-way bus ticket is purchased for them; and per diem is given to cover the number of days required to reach their destination.
Senator Glomb wished to point out that when a child leaves a foster care environment at age 18, the state does not provide that foster child with even $26.30. She understands the Department of Prisons cannot simply turn an inmate out in the streets with no funds but feels it is unfair that nothing is provided to a foster child upon leaving a foster care home.
Senator Coffin asked how long it has been since the $100 gate money
was raised, and if there has been any thought about raising this amount by a significant level to help cut down on the crime rate of those released who may be forced to steal due to lack of money.
Mr. Neill said the department tries to make certain when an inmate is released on parole, this individual will have a job to go to and an adequate living arrangement. However, they have not given consideration to a drastic increase in the gate money.
Senator Coffin suggested the possibility of raising the gate money to $500 and disbursing it over a 3-month period.
Mr. Neill commented at the present time, even though the department has the ability to give them $100, they do not even do that. The department only gives them a one-way bus ticket and meals to get home. Once they are released from prison jurisdiction, the department no longer has control of that individual.
Senator Coffin replied, "We find these guys on the streets pretty quick, and I have been in the prisons enough to know...."
Senator Rawson closed the meeting on S.B. 385 and opened the hearing for discussion on Senate Bill (S.B.) 265.
SENATE BILL 265: Makes various changes regarding program for education of handicapped persons.
Eugene T. Paslov, Ph.D., Superintendent of Public Instruction State Department of Education, wished to voice his support of S.B. 265 reflecting the department's request to change the language in Chapter 395 of Nevada Revised Statutes (NRS) to be consistent with similar changes requested in Chapter 388 of Nevada Revised Statutes. His written testimony (Exhibit E) was read for the record.
Dr. Paslov distributed Exhibit F - Original on file in Research Library to the committee and explained this report summarizes the activities of NRS 395 students who have received support due to severe disabilities that required a specialized-educational program that is beyond the scope of some school districts in Nevada.
It is Dr. Paslov's belief that the in-state placement for seriously handicapped children remains the first priority of the Department of Education as well as increasing the in-state capacity in the schools to better serve these children.
Senator Rawson referred to page 1 of Exhibit F and noted in fiscal year 1979-1980 there were 44 seriously handicapped students who received NRS 395 support, but in fiscal year 1985-1986 the number of students dropped to 11 then went up to 36 students in fiscal year 1991-1992. He opined this paralleled the budget trend in those years and asked what underlying strategies have been used, if any, to cause this to occur.
Gloria Dopf, Director, Special Education, State Department of Education, replied:
In the time frame surrounding the 1979-1980 budget year the department had requested the utilization of discretionary units which are the state-funding mechanism for programs to be available to the State Board of Education...a specific number and the number was different than currently available...with the priority of those units to be targeted back to programs to low-instance students and programs that would help bring some youngsters back from out-of-state placements and keep some youngsters from needing out-of-state placements. During this time frame the program in the Clark County School District for traumatic brain-injured youngsters was initially funded out of the discretionary unit and now continued to be funded out of the basic unit....One of the mechanisms that had been utilized was the discretionary state unit at the board's discretion.... The federal dollars have been prioritized for districts to use to try to keep the students in the in-state programs.
Dr. Paslov referred to Exhibit F, page 1, and pointed out that even though the number of students has fluctuated from a high of 44 in 1979 to a low of 11 in 1985 and is now up to 36, the percentage of severely handicapped students has only fluctuated by a fraction of a percentage since 1979.
Senator Glomb admits the department does not have much choice but to send severely handicapped children out-of-state since there are no facilities in-state for them and asked what is happening between the Department of Education and the Division of Child and Family Services to develop in-state resources for these youngsters.
Ms. Dopf said when the department goes through a review process for an NRS 395 student, they work in conjunction with the children's division staff to try to locate the programs within the state to make a placement, which is their first priority.
Dr. Paslov commented the department closely works with the school districts because Chapter 395 of NRS provides for the superintendent to place severely handicapped children out of their school district or out-of-state to another school district that would have the capability of providing services. In the larger districts and even working in consortium with several rural schools districts, the department has tried to build their capability for providing special services to four Nevada youngsters out of the school district of residence. The department has utilized some of their federal funds for that purpose.
It is Dr.Paslov's belief that the state needs to devote whatever resources are available to build up the in-state capacity for dealing with severely handicapped children.
Senator Rawson asked Dr. Paslov if any thought had been given to a case study on a small number of severely handicapped children to arrive at an estimate of the services actually available within the State of Nevada, and if it would save the state money if these handicapped individuals could be returned to Nevada. He believes this type of study would be helpful.
Ms. Dopf replied the department has performed an analysis of the costs, but due to the variability per youngster it was difficult to arrive at any conclusions for the whole program based on what happened to a given youngster.
Senator Coffin noted the state must provide services to handicapped children until they either graduate from some level of school or reach age 22, and he asked approximately how many have graduated from some level of school.
Ms. Dopf stated most of the severely handicapped children do graduate from the program with an equivalent or adjusted diploma that shows the completion of the goals and objectives for their Individualized Education Plan (IEP). Some of them remain in residence in the state where they are receiving their program and at the age of 18 become a resident of that state as well. Those individuals in the sensory-impairment area due to the loss of vision or hearing, do receive standard diplomas as part of their course completion.
Senator Coffin opined graduation is an amorphous term in the law and these individuals usually do not graduate from what is considered a high school or are trained to the level of receiving a standard high school diploma.
Senator Coffin asked what happens to the young adults upon completion of their program or attainment of age 22, whichever occurs first.
Ms. Dopf said the department has not performed follow-up studies relating specifically to the NRS 395 children, but in conjunction with the University of Oregon, the department has embarked on a study regarding students receiving special education.
Senator Coffin said he would like to have information concerning the NRS 395 children because they cost the state the most money and expressed concern this information was not available at the present time. He suggested the department perform studies and have the information available at the time of the next legislative session.
Ms. Dopf stated in tracking the quarterly reports submitted for the Interim Finance Committee, it has become clear that in the course of a year many of the severely handicapped youngsters do return to their school district programs and become a part of the special-education or regular-education population. They have only a handful of children that must remain in the NRS 395 program until graduation or age 22. These individuals usually remain in an adult-care facility and are tracked and usually become productive members of the community in workshops and supported-employment areas.
Dr. Paslov stated in 1995 the department will be prepared to provide information regarding the number of youngsters that are returned to the school districts to receive a regular diploma, the number of youngsters who receive adjusted diplomas, and the number of young adults who must enter into an independent-living arrangement.
Dr. Paslov believes there is a moral and ethical question that is before policy makers in regard to this particular client group. He stated this regards a very small number of individuals who are seriously handicapped and some that are extremely handicapped and may need the care of society throughout the rest of their adult life. The question is whether the state should provide for the care of these individuals for an indefinite period of time.
Senator Coffin called attention to the fact that the state has a tremendous investment in these handicapped children and feels disturbed the Department of Education does not have conclusive data available at this time regarding their development upon release from the program at 22 or graduation. His concern is that the money spent on the NRS 395 children might be better spent on day care for the children as opposed to a formal education or spending it on the rest of the student population.
Senator Rawson commented:
Why don't we work on a figure that is really a break-even point for sending out or keeping [a handicapped child] in the state....You would use the worse-case-scenario of someone who has to be institutionalized in a mental-retardation facility. Housing would run about $20,000 and a one-on-one instructor would probably run $45,000 for the type of skills needed. It would be in the $65,000 to $75,000 range. Then when we see a case that would cost over that amount...why? What are we gaining? ....It may well be if space is made available a special instructor could handle two students. That may not be building a program for children with autism because we may have only one case the first year we could put into a program....It might be beneficial to us and certainly the state would benefit if we began using that money to build the infrastructure in our state.
Ms. Dopf pointed out the recommendation Mr. Paslov made to use a portion of federal funds to bring a handicapped child home where services could then be provided would be a cost savings to the state.
Senator Rawson mentioned it had been argued that services provided in a home-care environment cost less than in a hospital, but when home care is authorized, the state usually ends up paying for both home care and hospital care since the individual(s) usually need both types of care. Since there is a reluctance to use home-care services due to the possibility of added hospital costs, Senator Rawson asked Dr. Paslov and Ms. Dopf to provide the committee with suggestions on how home-care services could be accomplished within the state's budget allowance.
Senator Rawson noted many of the changes to S.B. 265 are technical changes, and general discussion ensued with Dr. Paslov regarding this bill at which time he referred to a slight change in the wording of the bill reflected on page 2, line 5.
Ms. Dopf explained the change addresses the utilization of federal funds for the NRS 395 children to build services in-state. To accomplish this, the department is recommending the addition to a portion of section 3, subsection 2, of S.B. 265, to read, "making arrangements for the unique special education and related services required to return the students placed under the benefits of NRS 395 to the state."
In response to Senator Glomb's request, Ms. Dopf discussed the Blasco Facility located in Las Vegas, Nevada, established with private funds from donations provided by the Joe and Mary Blasco family. The Department of Human Resources is now responsible for the operation of this facility containing three or four residential beds for use of autistic children. Although there were three children who were identified as autistic and located out-of-state, the department was unable to obtain agreement by the school district and the parents to bring these children back to this facility due to the unique needs of the children.
Senator Rawson commented at some point the state will have to defend their ability to perform whatever is legally required to retain severely handicapped children in the state rather than resort to out-of-state placement in all cases.
Ruth Abersturi, Supervisor, Student Support Services, Carson City School District, stated she was representing the Special Education Advisory Committee and wished to go on record in opposition of the use of federal dollars to support the placement of NRS 395 children. She explained the money for this program must be taken from money available for the school districts to support their on-going needs.
Ms. Abersturi remarked if it is felt federal dollars must be used, the committee recommends these dollars be tracked to a particular child so that when the child is once again returned to the school district within the State of Nevada, the money could then be used to provide for support services for that child in the school district.
Senator Rawson asked Dr. Paslov if S.B. 265 were to pass, would this allow the state to provide for the care of a severely handicapped child in the child's home; and Dr. Paslov answered in the affirmative.
Senator Rawson asked if the department could come up with an average value for the placement of a child under the NRS 395 program and track that to the school district involved.
Dr. Paslov answered this could be done.
Directing his question to Ms. Abesturi, Senator Coffin said he believes her idea of having the money follow the children makes sense and asked if she was aware of any studies that show the success of the mandated program allowing the parents to veto plans by the state.
Ms. Abesturi responded she was not aware of such studies but commented the courts have ruled more often than not in favor of the parents.
Marcia Bandera, Director of Instruction, Elko County School District, said she believes the Department of Education can provide the committee with information about how the students that have been placed under the NRS 395 program have progressed. She explained the Department of Education requires each treatment and placement facility to provide, on an annual basis, what the progress of a handicapped student is. She also believes the school districts that have a student that has been placed out-of-state can provide some factual information about how well the student is doing.
Senator Rawson closed the hearing for discussion on S.B. 265.
Dan Miles, Fiscal Analyst, Fiscal Division, Legislative Counsel Bureau, reviewed with the committee Exhibit G, "LCB Fiscal Division Comparative Revenue Data 2% Sales and Gaming Percentage Fees."
The meeting was adjourned at 10:17 a.m.
RESPECTFULLY SUBMITTED:
Marion Entrekin,
Committee Secretary
APPROVED BY:
Senator Raymond D. Rawson, Vice Chairman
DATE:
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Senate Committee on Finance
April 23, 1993
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