MINUTES OF THE JOINT MEETING OF THE

      ASSEMBLY SELECT COMMITTEE ON GOVERNMENT REORGANIZATION

      AND

      SENATE SPECIAL COMMITTEE ON GOVERNMENT REORGANIZATION

 

      Sixty-seventh Session

      February 3, 1993

 

 

The Joint Assembly and Senate Select Committee on Government Reorganization was called to order by Vice Chairman Rawson, at 4:30 p.m., on, February 3, 1993, in Room 119 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

SENATE COMMITTEE MEMBERS PRESENT:

 

Senator Ann O'Connell, Chairman

Senator Raymond D. Rawson, CoChairman

Senator William J. Raggio

Senator Dean A. Rhoads

Senator Randall J. Townsend

Senator Bill R. O'Donnell

Senator R. Hal Smith

Senator Mike McGinness

Senator Mark A. James

Senator Thomas J. Hickey

Senator Bob Coffin

Senator Diana Glomb

Senator Matthew Q. Callister

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Mr. Val Garner, Cochairman

Mr. Robert M. Sader, Cochairman

Mr. Morse Arberry, Jr., Vice Chairman

Mr. Rick Bennett

Mr. Joseph E. Dini, Jr.

Mrs. Vivian L. Freeman

Ms. Christina R. Giunchigliani

Mr. William D. Gregory

Mr. Dean A. Heller

Mrs. Joan A. Lambert

Mr. John W. Marvel

Mr. Gene T. Porter

Mr. Robert E. Price

Mr. Larry L. Spitler

Mrs. Myrna T. Williams

Mr. Wendell P. Williams

 

 

 

 

 

STAFF MEMBERS PRESENT:

 

Tanya Morrison, Committee Secretary

 

 

 

OTHERS PRESENT:

 

Judy Matteucci, Director, Department of Administration

Tom Stephens, Manager, Public Works Board

Karen Kavanau, Director, Department of Data Processing

Chuck Slaven, Director, Telecommunications Division

 

 

 

 

CoChairman Rawson called the meeting to order at 4:30 p.m..  CoChairman Rawson explained the Department of Administration would speak on the reorganization of the departments of general services, constructions and facilities and information and technology. 

 

Senator O'Connell stated the cochairmen of this select committee had received several comments on the need or lack of need to rehash what the money committees have been hearing in the mornings.  She explained the committee would like to direct and focus this committee more on the policy side as opposed to the financial side.  Senator O'Connell requested Mrs. Matteucci and the department heads who would testify at this meeting focus their comments more on the department would be accomplishing by the reorganization plan.  She explained as a policy committee, they are interested in the function of the agency, who the individuals are that the agency serves and with this plan would the agencies be better able to serve that constituency.

 

Mr. Sader stated he would like to add to Senator O'Connell's comments saying the committee requests the testifiers direct their comments and questions to the overall issues, the grand scheme of the mission, efficiency, accountability and so forth of the organization plan and he further requested the testifiers avoid to the extent possible any discussions or questions which would normally be heard in Assembly Committee on Ways and Means or Senate Committee on Finance.

 

Judy Matteucci, Director, Department of Administration, spoke to the committee regarding the Governor's reorganization plan.  She stated:

 

      I think, trying to keep in mind the guiding principles of this particular committee I would like, once again, to review with you what the purposes of the consolidation and reorganization efforts are and certainly what they were when the Governor asked the Commission on Reorganization to take a look at the structure of government.  He purposely chose business men that were successful business men and women of the State of Nevada so they could bring a fresh, outside look at our structure.  This was done as a result of really two things.  First, recognition in the economy of what the private industry is having to do.  They have been streamlining, they have been making themselves more efficient.  I don't think the newspaper, a day goes by that you don't see in the newspaper major restructuring by major companies.  And the Governor felt that private businessmen and women that he chose to help him look at the structure of government, but could help him develop an efficient, effective, streamlined situation or structure for government that would simply do many things.  Most of all make both the governmental structure more accountable to him and accountable to the taxpayers.  Also he, as many other governors, was inspired by the reinventing government book and the main purpose in that book is that people in bureaucracy are really not lazy, are not the typical folks people like to blame on government workers looking for the easy way out, not working very hard.  They are, in fact, very innovative and energetic people who have decided to dedicate their careers to public service.  But, because of the accountability measures as they've accumulated over the past years in government and the bureaucratic structures that have grown around them, they are forced to do things that perhaps aren't as efficient as they can be in the private sector.  So, we essentially gave both of those concerns to the commission and asked them to look at the structure with an eye toward empowering his department directors to be able to help him in being creative and managing government.  One of the first and perhaps the most important thing they looked at was reducing the span of control.  Now, I know you have probably seen this more times than you care to but this picture is worth a thousand words.  This is the current structure of state government.  When the Governor calls a cabinet meeting he calls almost every one of the department heads or office heads or board of commission heads to his side to sit there and talk about whatever the issues are.  And as you can imagine we have a very large square table.  We hold these meetings up in the old assembly chambers and there is not much discussion.  There cannot be much discussion with this many people really at the table simply because you couldn't get through a topic so we don't really get as much give and take with the Governor as many department directors would like.  This is, as you can see (Exhibit C), the new structure that is being proposed by the Governor's reorganization.  It is designed to group like functions together so that when the Governor, when he talks to his agency head can get input relative to a particular area and be speaking to one person and expect that person to talk down and with the division heads, the agency heads, the bureau heads and the sections heads and get his mission across and help him accomplish whatever strategic direction that he says.  Along the same lines what the reorganization study attempted to do was to build on the existing resources, to build on the current strengths of state government.  A classic example, I believe, of how that perhaps is done is one of the proposed new departments, the Department of Employment Training and Rehabilitation.  Now, those of you on the money committees and those of you on the [Senate Committee on] Government Affairs is very aware of where we have all sorts of training programs sprinkled throughout state government.  There is a Job Training Partnership Act [JTPA] that is detailed out of the Governor's Office.  The JTPA extends into the Department of Education.  The Welfare Division has employment and training programs, the Employment Security Department has employment and training programs plus many, many more.  Vocational Rehabilitation is all aimed toward trying to get people with disabilities employable.  All of those functions then are all aiming at the same thing with a slightly different twist and what the commission looked at was to build upon the current strengths and try to bring those groups together so they could move forward in a common direction.  Also, what one of the guiding principles of the study committee was to make government more responsive to those served and I can use the same example that I just talked about.  If you are someone that is in need of employment or rehabilitation, right now you really don't know where to go.  We've got strange bureaucratic names attached to individual programs that frankly are grouped together under the Governor's reorganization that make it very much easier for you as a private citizen, as  a welfare mother who is looking for work, [to] try and find the right department so that they can get the services that they need.  Another, I'll just leave that.  Another example of what the commission attempted to do was group similar functions to improve coordination now.  Again, employment training and rehabilitation is an excellent example.  You had an example last evening in the Department of Taxation grouping audit functions together.  There is no point or it can be very expensive and redundant if you have several agencies to the same function and that was what we were trying to accomplish in the Department of Taxation recommendation.  Another thing that the consultants and the commission wanted to do was to shift the focus of government from input to output, again to hold department directors accountable for accomplishing their missions.  A very big part of this are the performance measures and the way we measure an agency that is successful.  I think there is in this new thinking of the way that we do government really, has some good deal of risk because instead of just keeping your head down low and just doing things the right way it encourages new department directors to try innovative things with the idea that they can improve their performance within the same dollars or the approximate same dollars they have available.  Again, empowering managers and staff to get the job done, very important and we are going to talk today about one of the major suggestion that came forward to the Governor as he met with state employees about one of the restrictions that they believe stops them or halts them in getting their missions accomplished efficiently and that is the way that we do state purchasing.  And I will talk about that in a moment but there were a number of suggestions that came forward from state employees when the Governor met with them that are incorporated in this recommendation.  We have gotten additional input from the consultants in some of those areas because it is something we are not aware of.  It is not business as usual.  It is new thinking and it is handling business the way it is being handled in other governmental jurisdictions and certainly in the private sector.  And finally, to get back where I started, the efforts here were to try to parallel the efforts of the private sector to streamline management costs.  The point that we were trying to do was not necessarily downsize government but to right-size government.  So with that, Mr. Chairman, unless there are any questions, I would like to begin with looking where we left off yesterday at the proposed Department of Administration.

 

Mrs. Matteucci referred the committee to Exhibit C and explained the proposals step-by-step. 

 

After some discussion on Exhibit C Mrs. Matteucci handed the committee information on purchasing, see Exhibit D.  She went through the document with the committee.  Mrs. Matteucci explained how the departments are limited specifically by commodity on how much can be spent for each item as seen in Exhibit E. 

 

Ms. Giunchigliani asked Mrs. Matteucci if the state has a plan to utilize the equipment held by the state in warehouses.  She also asked if the state has a policy regarding donating old equipment or furniture to charities.  Mrs. Matteucci stated the statutes are fairly restrictive as to how the state can dispose of excess property which is tied up by the federal government.  She explained there is some property which can be sold, but the funds must be returned to the fund of origin.

 

 

 

Mrs. Matteucci continued to explain Exhibit D with the committee.  The committee members had some discussion with Mrs. Matteucci.  After the discussion, Mrs. Matteucci moved the discussion along to construction and public works.

 

Tom Stephens, Manager, Public Works Board, addressed the committee on construction and public works.  He stated:

 

      I am here to talk about the reorganization which would rename the division that I am in, facilities and construction.  There are five departments listed on your form below facilities and construction which is in the chart [Exhibit C] for the Department of Administration.  Those are Facilities Administration which is the present Department of the Public Works Board, Architectural Engineering and other present department and public works board facility or construction supervision which is the Department of Public Works Board and then two new areas, insurance and loss prevention and facilities maintenance. Maybe before I start I should say I have had years of experience in facilities maintenance and from that experience I have learned that nobody in their right mind would volunteer to take on that function and we certainly didn't step forward as volunteers to do that.  There is always going to be a roof leaking somewhere, there is always going to be a toilet that doesn't flush right, a door that doesn't stick, people who are too hot, too cold, janitorial services that are not up to snuff and your phone is constantly going to ring.  However, it does make a lot of sense that the people who are doing the planning, the programming and the construction of new facilities also be charged with the maintenance and operation of those facilities and I think that is a much more common example than the one we have presently where buildings and grounds is completely separated from the folks who are constructing the buildings.

 

Senator Rawson asked if this division would have a public board and would it be placed in the hierarchy of leadership. 

 

Mr. Stephens stated the Public Works Board would still be charged with the responsibility of carrying out the Capitol Improvements Program and all of the money and contracting that is associated with that.  He explained the day-to-day operations of the Constructions Facilities Division would come under the Department of Administration.  He stated Public Works Department has planning, designing and construction. And he explained Buildings and Grounds has operation, maintenance and leasing.  

 

Mr. Stephens stated he felt the greatest advantages in the proposed combinations are to the facility maintenance area, the buildings and grounds area.  He stated the Public Works Board has the expertise to administer a large privately done program.  He explained with the consolidation of some of these departments there will be improved space utilization for the state and lower utility bills.

 

Mrs. Matteucci addressed the committee again and stated she would like to go over the Information Technology Services. 

 

Karen Kavanau, Director, Department of Data Processing, spoke to the committee on the plan for her department.  She explained the Governor is proposing to blend all information technology personnel into two divisions.  She stated they are the Information Technology Advancement Division in the Department of Finance and the Information Technology Services Division of the Department of Administration.  She pointed out the classifications included in the consolidation are data processing, telecommunications and communications. 

 

Mrs. Kavanau read from written testimony, see Exhibit F.

 

Senator Rawson asked Mrs. Kavanau's department would be dealing with telecommunications from the standpoint of satellite?  Mrs. Kavanau stated both of the divisions would be dealing with all technologies, all platforms.

 

Senator Rawson stated Nevada has a fair investment going into school districts in microwave transmission and a lot of interest in developing programs in higher education and distance learning and he asked if some of these services could be consolidated.

 

Mrs. Kavanau answered:

 

      There are possibilities for consolidation in almost all of the technological areas.  What we have discovered is, we have a lot of state agencies going in different directions, possibly using the same technology, possibly using different and the purpose of this is to make sure that everyone involved in making information technology decisions is fully informed as to what everyone else is doing, what strategic directions there are, what standards are in place so that whatever anyone does it is in keeping and consistent with your intent and with administrations intent.

 

Senator Rawson stated he would like to see a common standard to enable communications between areas of government and hopefully, through cooperative agreements share in the technology.

 

Mrs. Kavanau continued reading from Exhibit F.  There was some discussion between the committee and Mrs. Kavanau.

 

Senator Rawson stated some of the agencies may have concerns with taking away their ability to control their own database.

 

Mrs. Kavanau explained by centralizing the staff it is possible to ensure documentation is available and it is standard so any user can utilize the equipment without memorizing ten different access methodologies.  She stated financial information would be more easily accessed through one source rather than having to go through five different agencies to find out if the transaction has been processed.

 

 

Senator Rawson asked if her department was making a significant effort to ensure security from catastrophic events.  Mrs. Kavanau stated the Information Technology Advancement Division in the Department of Finance will be responsible for establishing parameters for statewide security and disaster recovery.  She added that department will still require specific security as well and she stated, in fact, they are pursuing that with all state agencies right now by establishing security committees to make them aware of the need for tighter security. 

 

Mr. Price stated the members on the Assembly Ways and Means Committee had some concern from the constitutional officers and the Controller's Office regarding an agency or employees having control of the information from their offices which they feel constitutionally responsible for and what the ramifications of that could be.

 

Senator Rawson suggested they may have to spell out what some of the divisions would be.

 

Mrs. Kavanau stated they were already looking at that situation.  She explained they need to decide where the data should reside.  She pointed out it would make more sense to have it in a centralized location.  She added, if on the other hand that data is agency or entity specific then it appropriately belongs where the user needs it and nobody else should have access to this information.

 

Mr. Spitler stated it was his understanding we need legislation to define public information and the electronic dissemination of such.  He asked if Mrs. Kavanau's agency is planning to come forward with any legislation during this session of the legislature which might clear this up.  Mr. Spitler explained he understands its applicability not only to some businesses who want to disseminate information from a lot of different sources, however, he stated interagencies have frequent

 

 

problems regarding what information can or cannot be shared.  He inquired as to whether or not the legislature needs to clear anything up this legislative session which might make the pathway a little easier as these state agencies implement these proposals.

 

Mrs. Kavanau stated this was discussed during an interim subcommittee from Senate Concurrent Resolution (S.C.R.) 90 of the Sixty-sixth Session.

 

SENATE CONCURRENT RESOLUTION OF          

THE SIXTY-SIXTH SESSION:                  Directing the Legislative Commission to study the laws governing public records and books.

 

Mrs. Kavanau stated one of the issues which surfaced was the fact electronic records is government data and what do we do when people want direct on-line access to the data networks.  She stated not only should we let them have access, but what can be done about security when thousands of individuals have access to your network which is why there needs to be some legislation on this issue.  She pointed out there is nothing in the statutes currently that address that issue.  Mrs. Kavanau told the committee what she needs from them is to tell her what to do regarding guidelines for access to data.

 

Senator Rawson stated the State of Nevada is on the threshold of some major authority or power because he feels information is power and he pointed out the legislature would be remiss if they did not address that issue in this session. 

 

Chuck Slaven, Director, Telecommunications Division, spoke to the committee on the consolidation of telecommunications functions.  He stated this is not a new proposal.  He maintained consolidation within corporate America of telecommunications functions was largely completed in the 1980s.  He told the committee at least one management consulting firm revealed in a survey the average savings realized from that consolidation was in the neighborhood of 20 percent,  Mr. Slaven explained in 1991 the National Association of Telecommunications Directors surveyed state governments on several telecommunications issues.  He noted of the states responding, 57 percent of the states had completed telecommunications reorganizations within the last 3 years.  Of the remaining 43 percent, many had already completed consolidation prior to that survey.  Mr. Slaven told the committee the primary reason for consolidation was for increased efficiency, better coordination and better accountability.  He explained to the committee since the other states have completed this consolidation, apparently they have also taken a look at the efficiency of the state system and come to the same conclusion as the State of Nevada. 

 

Mr. Slaven told the committee, in 1987, the Assembly Concurrent Resolution 68 of the Sixty-fourth Session, directed the Department of General Services to complete a study of statewide telecommunications needs.  The completed study had two recommendations, one of which was to consolidate the telecommunications functions into one organization.

 

ASSEMBLY CONCURRENT RESOLUTION 68 OF

THE SIXTY-FOURTH SESSION:                       Requires director of Department of General Services to conduct interim study relating to telecommunications.

 

Mr. Slaven stated the second recommendation was in 1988 the State of Nevada Emergency Response Commission financed a private sector study of radio requirements in the state and one of the six recommendations from this study was to consider the development of a consolidated Radio Communication Study to support the needs of all state agencies.

 

Mr. Slaven explained to the committee members who were not knowledgeable of the telecommunications industry, there have been several major changes to the industry over the past 10 years.  He stated the first was the telecommunications markets have become more competitive as a result of federal regulatory and court decisions that first allowed and then promoted competition.  Secondly, in an agreement between the United States Justice Department and AT&T resulted in the now, well known, divestiture of 22 local bell telephone companies.  He stated the last was rapid advances in changes in technology have put a tremendous burden on those who must not only understand the technology but must know how and when to apply it.

 

Mr. Slaven told the committee with regard to the proposed reorganization, he sees this as simply completed the process which has already been started.  He explained without the reorganization the state can expect to continue dealing with many of the same problem areas identified in the 1987 report of the Council of State Policy and Planning Agencies. 

 

Mr. Slaven emphasized the reorganization plan is to help develop criteria which will measure the quantity and quality of services delivered and to provide telecommunications services to state agencies in a more efficient and economic manner than can be achieved by the agencies acting independently. 

 

Chairman Garner asked Mr. Slaven what was the present scope of the telecommunication activity in the state.  Mr. Slaven stated there are four primary areas.  The first would be traditionally known as customer premise equipment which includes telephones, telephone systems, FAX machines, modems, video conferencing equipment, pagers and cellular radios.  He stated the second element would be local access which is typically the local service or the service received from the local telephone company.  He explained the third area would be known as transport which is basically moving information from one community to another.  And finally the fourth element is mobile communications which the state depends on quite heavily.

 

Mr. Garner told Mr. Slaven the information he was after was who presently is involved or participating in telecommunications.  Mr. Slaven stated the Telecommunications Division, Department of Data Processing and he stated there are at least six independent two-way mobile communications systems within the state.  He explained each of these systems is separate unto itself and serves only the agency in question.  He stated additional players would be the State Industrial Insurance System which has developed some of their own network requirements and he explained about every large state agency has at one time or another deployed some type of telecommunications network to serve agency specific requirements. 

 

Mr. Garner asked if all of the agencies mentioned would be included under the umbrella called the Telecommunications area.  Mr. Slaven stated that was correct.  Mr. Garner asked if there was going to be anything left out and Mr. Slaven stated he hoped not.

 

Mr. Garner asked if the legislative telecommunications would be included under this telecommunications umbrella.  Mr. Slaven stated the legislature is independent. 

 

Mrs. Lambert asked if this consolidation will improve maintenance in the rural areas.  Mr. Slaven stated this would indeed improve the maintenance of remote radio sites. 

 

Mrs. Matteucci told the committee she would finish the explanation of the Finance and Administration function.  She explained the last department under this category is the Department of Finance.  The consultants stated this department which is under the Department of Administration is too spread out in order for the state to concentrate on the financial aspects of budgeting, forecasting and tracking of debt issuance and also the necessary planning efforts which make any kind of a strategic planning effort successful.  So what they suggested is essentially breaking out the budget and planning divisions out of the current Department of Administration and move them into the Department of Finance and that is the operation organizational structure.

 

Mrs. Matteucci touched briefly on the budget and planning, internal audit and benefit services concepts.  She stated the budgeting and planning with a six-analyst staff which was ravaged by budget cuts as was everybody else and she stated they are simply concentrating on getting the budget done.  She explained they have not had the kind of attention they need to plan and outline the strategic issues which are affecting the state so they can develop an effective plan for the 3 to 5 year period.  She stated they tried to keep up with that during the last biennium, but frankly she stated they have not done as well as they could.  She stated they are also unable, with their current staff and with the organizational structure they currently have, to develop an issue-scanning ability to sit down and talk much better with agencies about what their current issues are and then communicate that formally throughout state government so they all identify what are the problems.  Mrs. Matteucci stated the Budget and Planning Division would encompass that particular area and would provide a much better opportunity to be prepared for what the future offers. 

 

She stated the Internal Audit Division has essentially three functions.  The first is overseeing establishment of internal control procedures.  She stated what they need in the Internal Audit Division is somebody who is capable of verifying that the performance measures sent to them quarterly by the agencies are real.  She iterated there has to be some measure by which there is some way to see if the agency is accomplishing its mission.  Finally, she stated, the Internal Audit Division can get a feel for agencies who are having trouble and not processing their documents correctly simply by seeing the paperwork and paper flow.

 

Mrs. Matteucci explained benefit services.  She stated as a result of the work with the group insurance program and the current benefits committee there is a potential for a really good buy in medical services if the state continues to expand the pool of individuals they have.  She stated she has recommended that the Benefits Services Division continue to explore medical contracts negotiations not only for state employees but for small employers, for retirees who do not have access to a retirement system now.  She stated they can all be pooled separately so no group has to pick up the liability for any of the other groups which is similar to what Karen Kavanau was talking about in data processing where groups can protect each other by pooling them.  She explained each of the groups can enjoy the benefits of large purchase buying in the medical marketplace. 

 

Mrs. Matteucci told the committee this concluded the overview of the Department of Administration as it is proposed in the Governor's Reorganization. 

 

There being no further business, Cochairman Rawson adjourned the meeting at 6:20 p.m..

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                      RESPECTFULLY SUBMITTED:

 

 

 

                                                      _________________________

                                                      Tanya Morrison,

                                                      Committee Secretary

 

 

 

 

 

APPROVED BY:

 

 

 

 

 

____________________________________

Senator Ann O'Connell, Chairman

 

DATE:_______________________________

 

 

 

____________________________________

Senator Raymond D. Rawson, Chairman

 

DATE:_______________________________

 

 

 

____________________________________

Assemblyman Val Garner, Chairman

 

DATE:_______________________________

 

 

??

 

 

 

 

 

 

 

Joint Committee on Government Reorganization

February 3, 1993

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