The Committee on Government Affairs was called to order at 8:00 a.m., on Tuesday, February 16, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Douglas Bache, Chairman

Mr. John Jay Lee, Vice Chairman

Ms. Merle Berman

Mrs. Vivian Freeman

Ms. Dawn Gibbons

Mr. David Humke

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Bonnie Parnell

Ms. Gene Segerblom

Mr. Kelly Thomas

Ms. Sandra Tiffany

Ms. Kathy Von Tobel

Mr. Wendell Williams

GUEST LEGISLATORS PRESENT:

Assemblywoman Sharron E. Angle, Assembly District 29

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

• BDR 21-332 – Deletes certain requirements for incorporation of cities by

general law (A.B. 254).

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• BDR 31-1201 – Requires biennial report by director of department of

administration on status of internal accounting and administrative

controls in certain state agencies (A.B. 255).

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• BDR 20-1272 – Increases number of members on board of county

commissioners in certain counties (A.B. 256).

• BDR S-1310 – Requires Department of Personnel to add steps to pay

Bru Ethridge, Supervisor, Notary Division, office of Secretary of State, State of Nevada, testified by reading from prepared text (Exhibit C). She stated A.B. 127 made three changes to existing law. First, section 1 made investigations conducted by the secretary of state into complaints received about notaries confidential until those investigations were concluded. However, if necessary, the secretary of state could share information about a confidential investigation with law enforcement agencies.

Ms. Ethridge explained section 2 clarified the same requirements imposed on non-resident notaries would apply to court reporters who resided in states bordering Nevada and applied to the secretary of state to become non-resident notaries with limited powers.

Ms. Ethridge said section 4 increased the fee notaries could charge for notarizing a signature. The current fee did not adequately compensate for the service, and the proposed increase would make Nevada’s notary fees either equal to or less than the fees bordering states allowed their notaries to charge.

Assemblywoman Segerblom asked whether an individual who was not a citizen of the United States could be appointed a notary. Ms. Ethridge replied affirmatively. She explained an individual who was not a United State’s citizen but was a resident alien, approved by immigration, could be appointed a notary.

Mr. Neighbors asked what costs were entailed in a notary’s services. He pointed out most banks provided notary services free of charge, and most notary transactions took no more than 4 minutes. Ms. Ethridge replied a notary was mandated by law to establish the identity of the signatory of a document being notarized, to keep a detailed journal of his notarial activities, and to retain that journal for 7 years after he ceased to be a notary. In addition, the secretary of state required a notary to keep his address current with the secretary of state’s office and charged a fee to make an address change. Also, if a notary changed his address from one county to another, he was required to purchase a new notary stamp. Ms. Ethridge explained often an individual who sought a notary’s services had no idea what the notary was supposed to do, and it could require as much as 15 or 20 minutes to accomplish a transaction.

Mr. Neighbors pointed out a notary was generally concerned only with the identity of a signatory, not with what was being signed, and they historically kept records. He reiterated most notary services were provided free of charge. Ms. Ethridge responded many private institutions provided such services only for their clients; therefore, the general public was forced to seek them elsewhere.

Assemblyman Mortenson asked whether Nevada’s state or local governments had employees who were notaries. Ms. Ethridge replied many state and local governmental agencies had employees who were notaries.

Mr. Mortenson stated he believed the law governing ethics prohibited government employees, in the course of performing their duties, from accepting money from private citizens. Ms. Ethridge responded a notary who worked for the State of Nevada did not charge members of the public a fee to perform notarial services. However, performing such services placed a burden on state employees who had other responsibilities. She pointed out, individuals engaged in private business, for instance a secretarial service which charged clients $15 per hour, who had to interrupt activities undertaken on behalf of a client to act as a notary for someone else, did not believe the current $2.00 fee was adequate compensation.

Mr. Mortenson asked whether a private citizen could acquire the services of a notary free of charge at the secretary of state’s office. Ms. Ethridge replied affirmatively. She said a private citizen could go to any government agency which employed a notary and allowed him to notarize signatures for the general public and obtain notary services free of charge.

Mr. Humke disclosed he was a notary public in Nevada; however, he did not believe he would benefit from A.B. 127 any more than anyone else would with respect to its increase in notary fees. He said he never charged a fee as a notary.

Chairman Bache referred to proposed change in section 3, subsection 2, and asked what purpose would be accomplished by addition of the words "including, without limitation, a court reporter." Ms. Ethridge replied that language meant a notary public of limited powers must follow the same procedures all other notaries were required to follow.

Chairman Bache asked how long it had been since notary fees were last increased. Ms. Ethridge replied the last increase occurred in 1993, when those fees were increased from $.50 to $2.00.

Assemblywoman Gibbons asked what was required and what cost was incurred to become a notary. Ms. Ethridge responded to become a notary, an individual must be at least 18 years of age, and either must be a resident of Nevada or legal alien or must both reside in a state bordering Nevada and work in Nevada. A court reporter could also become a notary. The fees to become a notary were $35.00, payable to the secretary of state’s office, and $15.00 payable to the county clerk. Those fees must be paid every 4 years. In addition, a notary must purchase his own journal and stamp, and could, if he wished, purchase errors and omissions insurance. Any time a notary changed either his name or his county of residence, he must purchase a new stamp reflecting the change.

Nancyann Leeder, Nevada Attorney for Injured Workers, State of Nevada, testified. She said she did not oppose making an investigation by the secretary of state into complaints against a notary confidential. However, she wished to call the committee’s attention to a problem.

Ms. Leeder said several years ago the legislature became aware of attacks on state workers and made changes to law related to attacks on state workers, such as increased penalties. She pointed out existing statutory language, set forth in section 3, subsection 3, of A.B. 127, made it permissible for the residence address and telephone number of a peace officer to be kept confidential. She proposed A.B. 127 be amended by adding the words "or state worker" after the words "peace officer." Many members of her staff, both attorneys and secretaries, were notaries public and might be required to notarize an affidavit by a client or another attorney. Currently, the residence addresses and telephone numbers of those staff members appeared on their notary documents.

Chairman Bache asked Ms. Leeder to confirm her only concern about A.B. 127 was that home addresses of the Nevada Attorney for Injured Workers’ staff not be made a matter of public record. Ms. Leeder replied affirmatively.

Chairman Bache suggested the situation about which Ms. Leeder was concerned would also apply to employees of local governments. Ms. Leeder responded she had no knowledge of the problems those employees might encounter other than the problem encountered by workers’ compensation employees.

Chairman Bache closed the hearing on A.B. 127.

Assemblywoman Kathy Von Tobel, Assembly District 20, testified. She submitted a map of Clark County (Exhibit D) and explained she represented constituents in the northern half of the county, and Assemblywoman Gene Segerblom represented constituents in southern lower half. Between them, Ms. Segerblom and she represented the constituents in all of Clark County’s outlying, unincorporated towns.

Ms. Von Tobel said in the course of representing constituents in unincorporated towns, she attended many town advisory boards’ meetings and heard residents of unincorporated towns express frustration that their voices were not always heard regarding zoning and land use issues. Although she sponsored A.B. 142 because of that frustration, she would be unable to vote to pass the bill in its present form.

Ms. Von Tobel explained statutes dealing with unincorporated towns treated those towns differently from one another, as to the form of government they could employ, based on the county in which they existed. Unincorporated towns in Clark County could employ only town advisory boards or citizens advisory councils as their form of local government.

Ms. Von Tobel referred to situations in Mt. Charleston and Sunrise Mountain in which citizens of those communities were successful in opposing proposed development that would have encroached on their life-style. She maintained every town she represented faced a similar situation, and although citizen participation in government was good, citizens of unincorporated towns often believed their voices were not heard. Statistics from Clark County reflected final votes of Clark County’s Board of County Commissioners often favored decisions made at the town level. Therefore, some of town citizens’ belief they were not being heard might be based on perception and result from the Board of Commissioners having opposed a town’s decision on a single, main, land use issue in the course of a year.

Ms. Von Tobel said the purpose of A.B. 142 was to attempt to correct the situation of unincorporated towns in Clark County being unable to chose the form of government under which they would operate. She pointed out in effect, the bill added another layer of government. If the legislature chose to do that, it could do so by amending Nevada Revised Statutes (NRS) to allow all " . . . counties in Nevada . . . " to operate under the various forms of government already provided by statute, rather than directing specific counties to operate under specific forms of government.

Ms. Von Tobel stated according to Brenda Erdoes, Legislative Counsel, the statutes governing Nevada’s unincorporated towns imposed three layers of bureaucracy, based on population. Although Ms. Erdoes told her it would be best to simplify matters by treating all 17 of Nevada’s counties identically, she understood there might be a compelling reason for Clark County to be treated differently from other counties and was open to debate on that issue.

Assemblywoman Sharron E. Angle, Assembly District 29, testified. She expressed belief the issue before the committee was one of great importance. She explained Washoe County contained several rural communities whose residents chose to purchase property consistent with a rural lifestyle; issues of city annexation and relentless development threatened that lifestyle. She maintained fear of taxation without representation united residents of the county’s rural areas in an effort to attain a degree of self-determination.

Ms. Angle declared over the years, residents of Washoe County’s rural communities experienced increasing frustration from dealing with overburdened and unresponsive city and county governments. She said the committee would hear testimony of numerous incidents in which government had disenfranchised citizens of rural towns in favor of a developer’s money. Those citizens were threatened with development, down zoning, higher density zoning, annexation, and usurpation of their local autonomy.

Ms. Angle expressed belief A.B. 142 was a good bill in spite of the flaws pointed out by Ms. Von Tobel. She said citizens of Washoe County’s rural towns believed the bill would give them a voice in government. She asserted the legislature should pass A.B. 142 because it provided citizens throughout Nevada with justice and fair access to government. She maintained it was a basic tenant of government that the best government was that closest to people. A.B. 142 would provide citizens of towns and townships with a voice in their local governments.

Ms. Angle submitted a copy of a letter from Brent J. Harper, Chairman of Verdi Citizen’s Advisory Board, expressing support of the philosophy expressed by A.B. 142 (Exhibit E), and a petition signed by citizens of Cold Springs (Exhibit F). She also submitted a letter from Nan Nesbitt (Exhibit G) which addressed issues which fell on deaf ears when brought before the county commission and city council and the attitude expressed by the planning commission that it would do what it wished regardless of the citizenry’s opinion.

Ms. Angle said she was encouraged by " . . . this interim study . . . " and believed it was good to study how to provide citizens of rural areas more autonomy.

Mr. Mortenson asserted there were instances when citizens of a particular area were extremely concerned about a pending zoning application, and commissioners ignored recommendations made by both that area’s town board and the commission’s own staff. He strongly believed there was need to examine the issue exemplified by those instances. He declaimed he would hate to see town boards elected because that would impose another layer of government. He supported creation of an interim committee to study how to implement the intent behind A.B. 142.

Ms. Von Tobel stated she had no desire to create additional layers of government. However, there was a need to give a voice in local government to citizens of unincorporated towns in Clark County and Washoe County, which were treated differently than unincorporated towns in other counties. Unincorporated towns in Clark County and Washoe County lacked the ability to pursue an elected, town board form of government; statutes to provide that ability already existed.

Ms. Von Tobel cited Pahrump as an example of a community that elected a town board as its form of government. She said she was not suggesting small towns would necessarily want a town board government; however, she believed they should have a choice as to their form of government. She asserted it was wrong for statutes to exist which precluded unincorporated towns in Clark County and Washoe County from having the same opportunity as unincorporated towns in other counties.

Ms. Von Tobel referred to the provision of A.B. 142 commencing on page 6, line 19. She explained because most town advisory boards served small towns and had little business to conduct, those boards met only once a month. Applicants for variance and special use permits had been known to ascertain when a town’s advisory board meeting was to be held and purposely schedule their hearings with the planning commission for a time after that meeting. The excuse they used for not appearing before the town board was it met only once a month, they had just missed the meeting, they would now have to wait an entire month before the board could hear their issue, and their application must be heard sooner. In that way, they bypassed the town advisory board.

Ms. Von Tobel asserted town boards were the first level of government which should consider issues related to zoning variances and special use permits. Town advisory boards constituted citizen participation, and it was citizens who had the most to either win or lose with respect to zoning variances and special use permits. She maintained Washoe County agreed applicants for zoning variances and special use permits should appear before a town’s local government, before appearing before the county’s planning commission, to allow citizens to determine if those zoning variances or special use permits would or would not be good for their neighborhoods.

Ms. Von Tobel said she and Washoe County agreed upon the language contained in the provision commencing on page 6, line 19, of A.B. 142. After an applicant appeared before a town’s local government, that local government would then notify the county’s planning commission, in writing, that the applicant had so appeared and the local government had made a decision on his application.

Ms. Segerblom asked what the population of Verdi was. Ms. Angle replied she believed it was approximately 3,000. She said Verdi had a beautiful, panoramic landscape threatened by development.

Ms. Angle stated the northern valleys now had the Alturas power-line, an unsightly project constructed over citizens’ protests. Citizens in the Stead area were facing construction of a racetrack and were told if they did not want the racetrack, the city would annex the area and construct the racetrack regardless of their wishes.

Ms. Angle asserted even if the legislature decided to conduct an interim study, citizens of unincorporated areas must be given some voice in what occurred in their areas. She pointed out it would require 2 years to conduct an interim study, during which time the process of development and the problems citizens of unincorporated areas faced would continue.

Mr. Neighbors suggested the issue with which A.B. 142 dealt affected so much of Nevada the bill should, perhaps, be either re-referred to the legislative Committee to Study the Distribution among Local Governments of Revenue from State and Local Taxes or made the subject of an interim study.

Mr. Neighbors asked Ms. Angle if she believed town boards should have planning powers. Ms. Angle replied she would like town boards to be able to impact planning. It was her understanding planners merely informed community advisory boards of what they planned to do and did not care to have input from those boards. What community advisory boards wanted was the ability to impact the planning process and express their communities’ desires. Ms. Angle suggested a community advisory board should have some veto power in the planning process through which to express the opinion something was not good for its community.

Mr. Neighbors informed the committee the Supreme Court rendered a decision which said a town advisory board could not have planning powers.

Assemblywoman Freeman pointed out discussions of doing what A.B. 142 proposed raised both taxation and regional planning issues and said she would not support the bill as written. However, she would support implementation of an interim study.

Mr. Lee disclosed he owned property in Mt. Charleston. He maintained various levels of government currently reviewed planning matters in Mt. Charleston to-wit the town board, the comprehensive planning board committee, the planning commission, and the county commission. He suggested if citizens did not like what commissioners did, citizens could vote them out of office.

Mr. Lee asserted the crux of A.B. 142 was to ensure citizens appeared before their town boards. He asked Ms. Von Tobel if the essence of A.B. 142 was a desire for notice of planning matters at the level of town board government. Ms. Von Tobel responded, "That is the one portion, as I stated, that . . . the county agrees with me. The rest of the bill, as I stated, I couldn’t even pass as written once I talked to Brenda Erdoes."

Ms. Von Tobel said she agreed with Mr. Neighbors and Mrs. Freeman A.B. 142 should be the subject of an interim study to determine the best way to assist Nevada’s unincorporated towns. She pointed out Clark County’s unincorporated towns were its fastest growing areas. She explained town advisory boards were currently the only local government option available to unincorporated towns in Clark County and Washoe County. Those towns did not have the option of having an elected town board. She asked, rhetorically, whether there was some compelling reason why Clark County and Washoe County should be treated differently than other counties in Nevada and asserted that question should be argued in a larger forum than the Assembly Committee on Government Affairs. She said her purpose in sponsoring A.B. 142 was merely to generate dialog.

Mr. Lee asked if he was correct the provision of A.B. 142 on page 6, lines 19 through 24, expressed Ms. Von Tobel’s wishes. Ms. Von Tobel responded by nodding her head in affirmation.

Mr. Mortenson referred to Mr. Lee’s comment about citizens’ ability to vote commissioners out of office and suggested there was a problem with that proposition. He pointed out Mt. Charleston, for example, was so small and the area served by a county commissioner was so large, that a negative vote by citizens of Mt. Charleston had virtually no impact. He suggested increasing the size of the county commission would reduce the size of the areas county commissioners represented. He maintained it would be better for commissioners to represent smaller areas and get to know the citizens in those areas.

Ms. Von Tobel referred to the map of Clark County (Exhibit D) and pointed out representation on the county’s board of commissioners was divided among four county commissioners. She said Mr. Mortenson was correct there was never a voting block large enough to remove a county commissioner if small towns were dissatisfied with their representation on the county commission. She asserted citizens of towns she represented did not consolidate their efforts. They were primarily content to live in their small, rural areas, merely wanted a modicum of self-determination and failed to recognize the need to band together. They needed to do something to consolidate their efforts.

Patricia Puchert, a private citizen, testified. She endorsed A.B. 142. She explained she resided in an unincorporated area of Washoe County and had lived there for 13 years. The area was both rural and semi-rural and her family moved there because they liked country living. The area received no city services, its lots consisted of 1/3 acre to four-acre parcels, and possession of horses was permitted on parcels larger than one acre. She maintained the lifestyle in her area was wonderful.

Ms. Puchert said a town board would provide her area with a layer of strong, local government and enhance the rural lifestyle of citizens of the area. The area needed a layer of government that would voice the desires of its citizens.

Ms. Puchert stated her neighbors were concerned about their area being annexed into a city and experiencing greater density, higher buildings, more traffic, and resultant crime. She asserted if her area was annexed, property taxes would soar. She explained most of the area’s residents had lived there for 25 to 30 years, were retired, and lived on fixed incomes. She contended if the area was annexed, those residents would be forced to move because of tax increases imposed to pay for city services they did not use. Their concern was to preserve their rural lifestyle.

Ms. Puchert said she belonged to a neighborhood group which worked for 2 ½ years " . . . trying to devise some property advice for a particular area near me . . ." where it was rumored a casino was to be built. She declaimed developers cared nothing about residents of the area; their motivation was greed. Although " . . . the county group . . . " concurred with her neighborhood group, the city gave notice it planned to annex the neighborhood. When her neighborhood group approached the city’s planning board, it was treated very rudely. She maintained the planning board cared nothing for residents of her area. Those residents needed a voice and a layer of government to give them that voice.

Ms. Puchert referred to Mr. Lee’s comment about the ability to vote a county commissioner out of office. She conceded that could be done but maintained residents of unincorporated areas had no voice about what was done by cities within their county of residence. She reiterated she believed a town board form of local government would provide residents of rural areas with a strong voice and assist them to continue in their rural lifestyle.

Mr. Humke asked whether Ms. Puchert agreed with Ms. Von Tobel A.B. 142 should be subjected to an interim study or was content with the bill in its present form. Ms. Puchert replied she had mixed feelings. She knew there was need to improve the bill’s language; however, time was of the essence. Each week residents of her area received notices of meetings pertaining to annexation, city planning, or other matters.

Serge Puchert, a private citizen, testified from his place in the audience, saying only that he supported A.B. 142.

Randy Robison, a private citizen, testified. He informed the committee he was a long time resident of Bunkerville and former resident of Mesquite. He said he supported both A.B. 142 and Ms. Von Tobel’s desire to have the bill made the subject of an interim study.

Mr. Robison explained Bunkerville was adjacent to Mesquite and separated from it by a bridge. He stated the population of Mesquite was growing at an annual rate of slightly more than 30 percent, and some of its population spilled over into Bunkerville, impacting the quality of life in Bunkerville.

Mr. Robison said Bunkerville currently had a town board form of government, and the county’s board of county commissioners was generally supportive of Bunkerville’s town board. He explained occasionally, a developer would approach the county commission, and the commission would inquire whether the developer had first approached the town board. If not, the commission would remand the developer’s matter to the town board. The developer could, thereafter, pursue approval of the county commission or appeal to the commission to override the decision of the town’s advisory board.

Mr. Robison maintained allowing unincorporated towns the option of an elected town board would increase their political stature without adversely affecting county government authority. He said growth in Clark County was of great concern to residents of the county’s outlying areas. Many people were attracted to those areas, and the activity of developers impacted the quality of life in both Mesquite and Bunkerville. Mr. Robison said it would be beneficial if town boards had a greater voice at the level of county government and more qualified representation at the local government level.

Ms. Segerblom asked whether Bunkerville was able to control its growth or, instead, was being overrun by Mesquite’s growth. Mr. Robison replied Bunkerville experienced some impact from Mesquite’s growth, and Bunkerville’s population had reached approximately 1,100. He said a new school recently opened in Bunkerville and had already reached its student capacity. Sixty percent of the school’s student population was comprised of students from Mesquite.

B. R. "Ike" Eichbaum, Ph.D., testified. He explained he was testifying on behalf of many people from areas such as Hidden Valley, Virginia Foothills, Sierra Manor, Pleasant Valley, Washoe Valley, and the Mount Rose area who were unable to attend the meeting. He said he was a member of the board of South Hills Improvement Association.

Dr. Eichbaum said when he first came to Nevada, 30 years ago, he saw the need for planning and became head of a Washoe County property owners association whose purpose was to develop a good regional plan and zoning plan. The plan was developed but never used. Recently citizens of Washoe County formed a group called Citizens for Responsive Government that was successful in bringing about election of one county commissioner. However, when the group approached the city council or regional planning commission, it was ignored.

Dr. Eichbaum explained a plan for " . . . the southwest corridor . . . " was developed over a period of 2 ½ years and approved by the Washoe County Board of County Commissioners. However, 8 days later, the city made attempts to place the area under its sphere of influence because one property owner, who owned 83 acres of land, was unhappy with restrictions placed on him by the plan. He asserted proponents of the plan were treated very rudely when they approached the city council. He read aloud from a letter, whose author he declined to identify, expressing chagrin at the behavior of certain individuals and approbation of the behavior of others.

Dr. Eichbaum asserted citizens of Washoe Valley sought either status as a township or something to provide a buffer with the city. Those citizens were content with Washoe County’s services and saw no need " . . . to be thrust into – with people like this that treat us like that . . . ." He urged the committee to do something to provide citizens of Washoe Valley an opportunity to have quality of life. He equated the city of Reno to Adolph Hitler with respect to the city’s attempts to annex territory.

David Vickery, a private citizen, testified by reading from prepared text (Exhibit H). He informed the committee he moved to Washoe County’s northern valley to take advantage of its country atmosphere and the beauty of its open space. He contended neither the city of Reno nor Washoe County allowed citizens of his area a voice in plans for the area and cited examples. He said those citizens needed a voice in what occurred in their community and did not want to be dictated to regarding the use to which their land would be put.

Mr. Vickery said he supported A.B. 142 being made subject to an interim study; however, citizens of his area needed "something."

James Spinello, a representative of Clark County, testified. He introduced Thom Reilly, Director of Administrative Services, Clark County, whose department, he said, worked more closely than any other county department with the various town boards in southern Nevada.

Ms. Spinello complimented Ms. Von Tobel on her work on some of the issues raised before the committee.

Mr. Spinello stated Clark County supported integration of town boards and citizens’ advisory counsels in decision-making at the level of county government. However, review of NRS 269 showed neither A.B. 142 as written nor the powers held by a town board form of government would either prevent or correct some of the problems brought before the committee. For instance, a town board could not prevent a city from annexing area it governed.

Mr. Spinello pointed out NRS 269 enabled town boards to do many things a county commission could do with respect to issues such as: police and fire services; gaming and other businesses; exclusive franchises; roads and traffic; and ordinances.

Mr. Spinello pointed out most provisions of NRS 269 were passed into law in 1871. At that time, travel was not as rapid as now, gaining access to county governments placed an onerous burden on people who lived in remote areas, and town boards provided a good, alternative form of government. However, when considering modern, particularly urban counties " . . . some of these same issues are somewhat different than they could be." In light of the powers NRS 269 provided, Clark County believed the issue A.B. 142 addressed was sufficiently complex to warrant an interim study.

Thom Reilly, Director of Administrative Services, Clark County, testified. He acknowledged the efforts of both Ms. Von Tobel and Ms. Segerblom as advocates for citizens of Clark County’s rural areas.

Mr. Reilly said over the past several years, Clark County worked with its urban town boards in automating their capability to access and acquire in a more timely manner information on zoning and other issues and to communicate directly with the county’s staff. At Ms. Von Tobel’s instigation, the county began to hold quarterly meetings with all its town boards, both urban and rural.

Mr. Reilly declaimed one of the most exciting results of dialogue about involving town advisory boards more fully in town government was the Clark County Board of County Commissioners’ approval of a mechanism through which all county zoning and variance issues would be presented to the appropriate town boards. Orientation meetings would be held with all town boards in the county to discuss how that mechanism would work. Another result of that dialogue was use of a coordinator to work closely with town boards in the county’s northwest area. Town boards in other areas voiced a desire for something similar, and the county assigned another coordinator for the western half of the county.

Mr. Reilly explained the quarterly meetings the county held with its town boards provided an opportunity for dialogue and sharing of issues. The county wished to automate rural town boards’ information systems when its budget permitted.

Mr. Reilly claimed it was important to note Clark County currently had nine advisory "structures," five of which were citizen advisory councils. Those citizen advisory councils, in particular, adamantly opposed " . . . any other type of taxation."

Mr. Reilly said there was currently a mechanism through which unincorporated areas could incorporate and become cities. Many unincorporated areas did not incorporate because they lacked the requisite revenue base. He cited Sandy Valley as an example and said its citizen advisory council resisted becoming a town advisory board because it did not want the community to incur an extra tax. The county had been working with the citizen advisory council which was actively discussing acquisition of an enhanced 911 system. The county informed the council the county would assess a .005 tax base for the system, which would generate approximately $800 from the entire town. Mr. Reilly said, "It’s costing us $13,000 to run this, and I don’t think they’re going to pass it. We’re going to put this on the next election for a vote, but they’re pretty adamant against that."

Mr. Reilly maintained dealing with the county’s rural areas, revenue issues, and urban areas’ concerns about subsidizing services for rural areas constituted a balancing act. However, involving rural areas more in government was a great concept, and Clark County was working closely with its rural areas to develop that concept.

Mrs. Freeman pointed out Nevada’s state laws affected the northern and southern parts of the state equally and asked why the town board form of government was utilized so frequently in Clark County. She specifically asked whether rapid growth in the county’s outlying areas was one reason that form of government was utilized so frequently. Mr. Reilly replied in addition to rapid growth, he believed the uniqueness of some of the county’s areas and a desire to protect them was a basis for utilizing town boards.

Mr. Reilly explained when Clark County’s rural areas made recommendations on land use issues, those recommendations were nearly always followed. He maintained the county’s rural areas enjoyed a great deal of autonomy. He suggested bringing together the chairmen of many of the county’s rural town boards would result in increased utilization of town boards in the county.

Mrs. Freeman asked whether Clark County’s county commission held much dialog with advisory boards in the county. Mr. Reilly replied two members of the Clark County Board of County Commissioners were invited, on a rotating basis, to attend the quarterly meetings the county held with its town boards.

Mrs. Freeman referred to Mr. Reilly’s testimony about Clark County’s cost to provide 911 services as compared to revenue the county received and asked how the county addressed taxation issues. Mr. Spinello responded one of Clark County’s concerns about A.B. 142 and a reason the county believed the bill required an interim study was its impact on taxation.

Mr. Spinello pointed out A.B. 142 established no "minimum" and, therefore, could result in severe fragmentation of either of Clark County’s urban areas.

Mr. Reilly suggested another issue to be considered in any interim study of A.B. 142 was the fact a town board form of government must have some resource through which to be self-sufficient in its provision of services.

Mr. Reilly said the University of Nevada Las Vegas’ public administration class visited all Clark County’s town boards to examine the issues those boards developed. Town boards in urban areas dealt almost entirely with zoning issues while town boards in rural areas addressed a wide range of issues affecting their communities.

Ms. Segerblom asked whether there were town mangers in Clark County’s rural areas. Mr. Reilly replied affirmatively and named three individuals who served in such capacity for specific areas of Clark County.

Ms. Segerblom asked whether the community of Prim had a citizen advisory board. Mr. Reilly replied Prim was not currently "represented" but might be headed toward establishing a separate board for its community.

Chairman Bache turned the meeting over to Vice Chairman Lee.

Mr. Mortenson commented Mr. Reilly and Mr. Spinello discussed activities Clark County undertook to either enhance the effectiveness or mitigate the problems of town boards, such as insuring every issue affecting a community was presented to its town board and providing town board coordinators. He stated both those activities were available to Spring Valley in 1990 and asserted for the most part, the problem to be considered did not consist of any of the matters Mr. Reilly and Mr. Spinello addressed in their testimony.

Mr. Mortenson said town boards and county commissioners agreed on most zoning issues. It was when county commissioners decided to violate the zoning ordinance of a particular area people became upset and appeared to have no voice in the matter. He contended often even though a county planning board agreed with a town board on a zoning issue, and the county commission’s staff recommended against a particular zoning ordinance, the county commission would nonetheless vote to establish that zoning ordinance. He maintained in such instances, there was usually a powerful developer behind what occurred, and town boards needed some insulation against such powerful developers.

Ms. Von Tobel conceded Mr. Mortenson had a point. However, she said, because town boards in rural areas met only once a month, it probably occurred more frequently in rural than urban areas that zoning applicants failed to appear before town board’s regarding zoning applications. She agreed something should be worked out so zoning applicant’s would have time to attend town board meetings and not be able to use the excuse they would be far behind in the application process if they were forced to wait an additional month to attend such a meeting.

Ms. Von Tobel asked whether she was correct town boards in urban areas met twice a month. Mr. Reilly replied some met twice a month and others once.

Ms. Von Tobel said the issue of zoning applicants circumventing town boards was a burning issue with every town board whose meeting she attended. She contended zoning applicants should first approach the local government of a town in which they planned to engage in development before approaching a higher level of government.

Vice Chairman Lee turned the meeting over to Chairman Bache.

Chairman Bache closed the hearing on A.B. 142.

• BDR 20-633 – Clarifies authority of board of county commissioners to act at meeting held outside county seat (A.B. 261).

• BDR 23-638 – Revises definition of "public officer" for purposes of provisions governing ethics (A.B. 260).

George Pyne, Executive Officer, Public Employees’ Retirement System (PERS), testified, primarily by reading from prepared text (Exhibit I). He explained A.B. 189 was "housekeeping" bill. Although the bill established some cost elements, they were not significant enough to require an increase in PERS’ contribution rates.

Mr. Pyne reviewed various section of A.B. 189. He explained section 1, subsection 3, modified the definition of "compensation" to clarify retirement contributions, for the most part, would be based only on an employee’s base pay and items specifically enumerated in the Retirement Act as subject to contribution. Prior to 1975, contributions were made on nearly all taxable forms of compensation, which resulted in abuses and unpredictability of plan costs. Many public employees worked significant amounts of overtime in the final years prior to their retirement to increase their retirement benefits. In 1975, legislation was passed to address that problem, and the Retirement Act currently enumerated both items that were and items that were not subject to contribution payments. However, current statutory language made it difficult to determine whether new forms of compensation, such as educational incentives and lunchtime pay, were subject to contribution payments. The statutory change being discussed would have no cost impact on public employers’ current reporting methods or on their employees.

Mr. Pyne said section 2, subsection 1(d), made the position of gaming commissioner eligible to participate in PERS. He explained the historical basis for gaming commissioners being precluded from PERS participation and the reason PERS believed it appropriate they now be included. He said section 11 established any member of the gaming commission appointed prior to July l, 1999, had the option to either participate or not participate in PERS while any member appointed after that date would be required to participate.

He stated section 2, subsection 2, allowed the retirement board to establish standards for determining what constituted a full-time work schedule for retirement reporting purposes. An interim study found certain public employees, who worked non-traditional workweeks, were not receiving full-time service credit in PERS even though they worked the equivalent of or in excess of the standard 80 hours in a biweekly pay period. The purpose of that section was to ensure public employees who worked the equivalent of full-time work schedules received full-time credit in the retirement system.

Mr. Pyne explained section 3, subsection 3, allowed cash rollovers from various retirement accounts for the purchase of service credit in the retirement system.

Mr. Pyne said section 4, subsection 3, pertained to calculation of retirement benefits for certain locally elected officials. The Retirement Act provided benefits for PERS members whose public service consisted of both regular service and service as an elected official were to be calculated separately for each of those periods of service. That provision was based on the policy part-time service should not result in a retirement benefit equal to that earned through full-time service.

He cited a hypothetical example of a public employee who served as a county commissioner for 10 years and, thereafter, served as an accountant in public service for 10 years. He explained the retirement benefits earned by that employee for each of those 10-year periods were first calculated separately and then added together. The basis for that method of calculation was the legislature’s belief, in the 1970s, that county commissioners or city councilmen, who received perhaps $50 to $1,000 per month for their services, should not have the time they served for that low salary added to the time they served in full-time public service and thereby receive a benefit for which they did not pay.

He pointed out times had changed. Many elected officials claimed some elective offices had evolved into the equivalent of full-time employment, and the amount of money some elected officials were paid strongly suggested their positions were equivalent to full-time positions. A survey conducted by PERS indicated positions held by some elected officials might be equivalent to full-time positions while those held by others were not.

Mr. Pyne maintained continuing to calculate benefits separately for service in some locally elected positions did not recognize the evolution of those positions into positions of full-time employment. PERS believed it best to treat elected service as regular service only if the average salary for the entire period of elected service was equal to or greater than the average salary of a regular PERS member during the same time period. The proposed change in practice would impose no additional cost on employers.

Mr. Pyne said section 5, subsection 4, deleted statutory language that said a school year consisted of the period from September 1st to August 31st for the purpose of computing service credit for school employees. He pointed out many school employees now worked a school year consisting of a different time frame.

He explained the amendment effected by section 6, subsection 3, would allow a retired employee who was re-employed and then enrolled in the retirement system for at least 5 years to have both his periods of service combined for the purpose of calculating his new retirement benefit. Currently, the benefit earned for each period of service was calculated separately and then added together. Often an employee’s rate of pay was greater during his second period of service than during his first, and combining both periods of service would result in a higher retirement benefit.

Mr. Pyne explained the reason for the 5-year re-enrollment requirement. PERS was initially concerned about combining separate periods of employment in calculating a new retirement benefit because it feared a retired employee might return to work only long enough to increase his average compensation. His new benefit would then be subsidized by all other PERS members. After discussing the issue with its actuary and reviewing practices in other states, PERS believed re-enrollment in PERS for a minimum of 5 years would establish a re-employed retiree was not attempting to abuse the system but was continuing his career in public service. The 5-year re-enrollment requirement would also ensure the actuarial integrity of the system was maintained.

Mr. Pyne stated section 7, subsection 2, deleted certain statutory language pertaining to spousal benefits paid from the police and firemen’s retirement fund. Currently, upon the death of a retired employee who received an allowance from that fund, the person who was his spouse both at the time of his retirement and the time of his death was entitled, at age 50, to receive a benefit equal to 50 percent of his allowance. The language section 7, subsection 2, deleted from statute pertained to the requirement the surviving spouse must be married to the retired employee at the time of his death in order to receive the benefit. The only purpose the requirement appeared to serve was to foster continued marriage, which could be viewed as social engineering. Deletion of the requirement would create no actuarial impact on the retirement system.

Ms. Gibbons posed a hypothetical situation in which a police officer and his spouse divorced a week prior to his retirement, sometime during the ensuing week the police officer remarried and then retired, and a week later he died. She asked what would happen in that situation. Mr. Pyne posed a different hypothetical situation in which a police officer elected the spousal benefit plan when he retired, he was retired for some years, and he and his spouse were both over age 50. Upon the retired officer’s death, his spouse would be entitled to a benefit equal to ½ of his pension. However, under current law, as soon as the retired officer and his spouse divorced, his spouse, who might for years have anticipated receipt of the surviving spouse benefit, lost her right to that benefit. His remarriage would have no bearing on the situation. He would receive his allowance for his lifetime, and upon his death it would cease.

Ms. Segerblom disclosed she was a member of PERS. She referred to Mr. Pyne’s previous testimony about section 2, subsection 1(d), and asked how long a member of the gaming commission would have to serve in that capacity to be eligible for PERS benefits. Mr. Pyne replied a gaming commissioner would be subject to the 5 year vesting requirement.

Ms. Segerblom asked whether legislators were required to have 10 years service to be vested in the system. Mr. Pyne replied affirmatively.

Mr. Mortenson referred to Mr. Pyne’s testimony regarding PERS’ initial concern about combining separate service periods to calculate new retirement benefits for retired employees who returned to public service. He referred also to Mr. Pyne’s further testimony PERS’ actuary advised if an employee returned to work for a period of 5 years, combining his service periods to calculate his retirement benefit would not create much drain on the retirement system. He asked whether Mr. Pyne believed an employee who worked 20 years at a very low paying job and, subsequently, worked only 5 years at a high paying job would be subsidized by the retirement system if his service periods were combined when computing his new retirement benefit. Mr. Pyne responded there could instances in which that would occur. However, on balance, the impact to the plan would be negligible.

Mr. Mortenson said, "Negligible, but on the high side." Mr. Pyne concurred.

Mr. Mortenson asked why the current method of calculating a new retirement benefit should not be retained. Mr. Pyne replied some retirees approached PERS’ with the argument they did not necessarily leave public service on their own accord. They were, perhaps, forced to resign or were fired relatively late in their public service careers, had a difficult time finding a job, and decided to draw their PERS pension for a source of income. However, they continued to seek an opportunity to continue their careers in public service, found new jobs, realized their PERS benefits would be suspended, and re-enrolled in PERS. Those employees merely wanted all their periods of service considered as continuous service. He reiterated his previous testimony about PERS’ concern that a retired employee might return to public service for a relatively short period of time in order to spike his retirement benefit and how the 5-year service requirement addressed that concern.

Mr. Mortenson referred to the situation Mr. Pyne discussed regarding elected officials. He suggested an elected official might work for a low salary for a long period of time while serving in that capacity and thereafter, be employed in a high-paying public service job for a short period of time. He asked whether combining those service periods when calculating the retirement benefit due such an individual would not impose a huge drain on the retirement system. Mr. Pyne replied the service periods would be calculated separately unless during the period during in which he served as an elected official, the individual’s salary was equal to or greater than that of a regular member of PERS.

Mr. Mortenson contended Mr. Pyne testified an elected official’s salary would always be greater than the salary of a regular member of PERS. Mr. Pyne replied that was not always the case. Mr. Mortenson asserted it would be the case in Nevada’s large counties. Mr. Pyne responded affirmatively. He said he believed there were individuals currently serving as county commissioners who made more money in that capacity than they previously made as full-time state employees. He asserted there was no reason to calculate such individuals’ retirement benefits separately for each period of service.

Chairman Bache indicated he wished to clarify Mr. Mortenson’s concern. He explained if a public employee was employed first in one position and then in another, with no break in service, his service time in both positions would be added together to calculate his retirement benefit. The only difference between that situation and the one being discussed was imposition of a period of retirement. He asked whether he was correct PERS was attempting to eliminate differentiation between those two situations with respect to calculation of benefits. Mr. Pyne replied affirmatively.

Ms. Von Tobel disclosed her husband was a recipient of PERS benefits. She referred to Mr. Pyne’s testimony regarding the benefit for a surviving spouse of a retired member of PERS’ police and firemen’s fund. She said her husband’s former spouse received part of his benefit, and as she understood current law, if her husband died, his former spouse would no longer receive part of his benefit. She asked, "Is that what we’re changing." Mr. Pyne replied the proposed change applied only to members of PERS’ police and firemen’s fund and would eliminate only the requirement the spouse of such a member must be married to him at the time of his death in order to receive 50 percent of his retirement allowance.

Ms. Von Tobel expressed confusion. She said her husband had the choice of electing an option that provided her with a benefit equal to his full retirement allowance if he died. She asked whether members of PERS’ police and firemen’s fund had no such option. Mr. Pyne replied they did have such an option, as well as an option which would provide their spouses a benefit equal to 50 percent of their retirement allowance. He suggested Ms. Von Tobel’s husband might have taken a reduced retirement benefit in order to provide her with a benefit equal to his entire retirement allowance in the event he predeceased her. Members of PERS’ police and firemen’s fund were not required to take a reduced benefit in order to provide income protection to their spouses in the event of their deaths; rather, they paid an additional contribution to PERS in order to provide that benefit. The proposed change would remove the restriction a retired member of the police and firemen’s fund and his spouse must be married at the time of his death in order for his spouse to receive a benefit.

Mr. Humke asked Mr. Pyne to again explain the effect of section 3 of A.B. 189. Mr. Pyne replied currently, a member of PERS who had at least 5 years of service could purchase up to 5 years additional service credit. When a member did that, it constituted an after-tax contribution to PERS. PERS ascertained the Internal Revenue Code allowed certain individuals who had individual retirement accounts or other accounts similar to the ones they would have in a retirement system similar to PERS to remove money from those accounts and purchase service credit in PERS retirement plan with no tax consequence. The purpose of section 3 was to encourage retirement savings.

Mr. Humke referred to section 4, subsection 3, and asked whether PERS envisioned that section to deal with a county commissioner, councilman, or mayor who first worked in some other position of public service and then returned to public service in his capacity as an elected official. Mr. Pyne replied the section dealt primarily with situations in which an elected official served in that capacity for some period of time and, either before or afterward, served as a full-time employee of the state. He reiterated his previous testimony about how retirement benefits were calculated in such a situation and the fact, currently, an elected official’s rate of pay might be greater than his rate of pay as a full-time state employee. The purpose of section 4, subsection 3, was to provide equity.

Mr. Humke posed a hypothetical situation in which an individual worked as a road maintenance worker for the Nevada Department of Transportation (NDOT), retired, and was subsequently elected as a county commissioner. He asked whether in his capacity as a county commissioner, that individual was "unretired" for PERS’ purposes. Mr. Pyne responded the equation became more complicated when retirement was introduced as a factor.

Mr. Pyne posed a hypothetical situation in which, as an active member of PERS, the individual was a road maintenance worker, never retired and received a retirement benefit but, instead, went directly from the position of road maintenance worker to that of county commissioner. In such a situation, his period of service in both capacities would be combined for the purpose of calculating his retirement benefit. In PERS’ perception the individual was merely changing jobs " . . . because this position is now paying $50,000 a year or whatever the case may be." However, if the individual retired from his position as an NDOT employee, was retired for some period of time, and was then elected as a county commissioner, he could re-enroll in PERS and earn additional service credit. If his position as a county commissioner paid a salary greater than the average salary earned by a regular member of PERS, and he worked in that position for at least 5 years, his service periods would be added together to calculate his retirement benefit. However, if his salary as a county commissioner was less than the salary of the average regular member of PERS, his service periods would be treated separately in calculating his new retirement benefit.

Mr. Humke asked whether members of city councils and county commissions throughout Nevada were treated alike. Mr. Pyne replied they were currently treated alike pursuant to the Retirement Act, which was what PERS wanted to change. PERS wanted to recognize the fact in Clark County, Las Vegas, Reno, Washoe County, and some other jurisdictions, there were currently elected officials who earned a salary equal to the average salary of a regular PERS member. It was unfair to those elected officials to treat their service in an elected capacity separately from their other periods of public service.

Mr. Humke asked whether section 4 of A.B. 189 would be effective July 1, 1999. Mr. Pyne replied affirmatively.

Mr. Humke asked whether section 4 would lack retroactivity. Mr. Pyne again replied affirmatively.

Ms. Segerblom asked whether she was correct a public employee with 5 years of service who bought an additional 5 years of service must be 60 years old in order to retire. Mr. Pyne replied she was correct. He explained the minimum age at which a public employee with 5 years service credit could retire with no penalty was 65. If such an employee bought an additional 5 years service credit, he would then have 10 year of service credit, and his minimum retirement age would be 60.

Ms. Berman said a councilman told her he received only " . . . half-time credit . . .." She asked whether A.B. 189 remedied that situation. Mr. Pyne said he believed the term "half-time" credit might not be appropriate. However, the councilman might have been alluding to the fact his service credit was not treated as part of his service as a regular member of PERS, which was the situation PERS was attempting to address through A.B. 189.

Mr. Pyne resumed his explanation of various sections of A.B. 189. He said sections 8 and 9 increased the base sums dependent children and certain surviving spouses of PERS members received when such members died prior to retirement. PERS periodically reviewed benefits paid to "flat-rate survivor benefit recipients," who were the surviving spouses and children of deceased PERS members who died with less than 10 years of service. Unlike other plan benefits, which were tied to a member’s average wage, those benefits consisted of a fixed monthly sum and currently were $400 per month for a surviving spouse and $350 per month for surviving children. Because those benefits were not tied to a member’s average compensation, their base amount did not increase over time with inflation, and 1995 was the last legislative year in which the base amount of those benefits was increased. The consumer price index had increased approximately 12 percent since December 1993, the year used to justify the increases granted in 1995. Based on that increase, PERS recommended a prospective increase in the base amount of the benefits to $450 per month for a surviving spouse and $400 per month for surviving children.

Mr. Pyne proposed A.B. 189 be amended to provide a $50 per month increase in the survivor benefit provided for dependent parents pursuant to NRS 286.677. He said the proposed increase was omitted from the bill through oversight and explained dependent parents were eligible for survivor benefits only if there were no other eligible survivors.

Mr. Pyne stated section 9, subsection 1, removed statutory language which said benefits for certain surviving spouses would cease upon remarriage. The remarriage restriction applied only to the flat dollar benefit and not to other survivor benefits. PERS believed the restriction was archaic and might penalize the very people survivor benefits were designed to assist. PERS believed the retirement system should be neutral on issues of public policy when they imposed no impact on the pension policy underlying the retirement system.

Mr. Pyne said the actuarial cost of the proposed increase in survivor benefits and removal of the remarriage restriction were not sufficiently significant to cause an increase in retirement contribution rates as defined in the Retirement Act.

Mr. Pyne stated section 10 allowed the surviving spouse of a deceased, vested member of PERS who had at least 15 years of service to receive benefits under "retirement option 2" rather than "retirement option 3." He explained the "option 2" benefit provided the maximum financial protection for a surviving spouse available under PERS’ pension plan. Through section 10, PERS again attempted to address the financial difficulty experienced by the surviving family of a deceased PERS member. The "option 2" benefit was paid in recognition of career service by a Nevada public employee, and PERS believed reducing the threshold for that benefit from 20 years to 15 years was consistent with statutory intent. The actuarial cost of the change was minimal and, when added to the cost of other proposed benefit improvements, would not result in increased retirement contribution rates.

Ms. Von Tobel posed a hypothetical situation in which a portion of a PERS recipient’s retirement benefit was paid to a former spouse under "option 2," and the recipient died. She asked whether A.B. 189 would ensure the former spouse would continued to receive that benefit if he or she remarried. Mr. Pyne replied the latter part of his testimony did not address the situation in which a public employee retired after 20 or 30 years of service and named their spouse or someone else as their beneficiary; rather it addressed the situation in which a PERS member died before retirement. The retirement statute provided the surviving spouse of such a member would receive a benefit of $400 per month; how many ex-wives or ex-husbands such a member had was of no consequence. Currently, the statute provided if a surviving spouse who was the recipient of that benefit remarried, the benefit ceased.

Chairman Bache closed the hearing on A.B. 189.

There being no further business to come before the committee, Chairman Bache adjourned the meeting at 10:25 a.m.

RESPECTFULLY SUBMITTED:

Sara Kaufman,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: