The joint hearing of the Assembly Committee on Ways and Means and Senate Committee on Finance, Sub-Committee on Public Safety/ Natural Resources/ Transportation was called to order at 8:00 AM, on Tuesday, February 16, 1999. Chairman Chris Giunchigliani presided in Room 2134 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.

ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:

Ms. Chris Giunchigliani, Chairman

Mrs. Vonne Chowning

Mr. Richard Perkins

Mr. Robert Price

ASSEMBLY SUBCOMMITTEE MEMBERS ABSENT:

Mr. John Marvel (Excused)

STAFF MEMBERS PRESENT:

Chairman Giunchigliani commenced the hearing, commenting public comment would not be heard during the meeting of the subcommittee. In order for the public to have ample time to testify, a special hearing would be held on February 25, 1999, for that purpose. In addition, she stated public comment concerning a seeing-eye dog program, drug use, and rehabilitation programs within the prison system would also be heard. Testimony from the Las Vegas area would be teleconferenced.

Chairman Giunchigliani reminded the audience that those testifying before the subcommittee were under oath and it was illegal to provide false testimony to a legislative body. She warned if she believed testimony to be false, she would interrupt the proceedings and swear in those testifying.

Before beginning discussion on the budget accounts for the Department of Prisons (DOP), Chairman Giunchigliani highlighted the major policy issues she wished to see addressed:

• The transfer of female inmates out of state;
• The opening dates for Phase I and Phase II of Cold Creek State Prison (CCSP);
• The closure of the Southern Nevada Correctional Center (SNCC);
• The privatization of prison medical care;
• Taylor vs. Wolfe compliance;
• Prison population and emergency capacity projections;
• Employee vacancy turnover rates;
• The sale of the Ely State Prison (ESP).

Prior to addressing the budget, Robert Bayer, Director of the Department of Prisons, introduced Janet Johnson, Chief of Fiscal Services, Glenn Whorton, Chief of Classification and Planning, and Rex Reed, Research Analyst for the department.

Chairman Giunchigliani directed Mr. Bayer to first explain the continuation of investigator positions as approved by the 1997 legislature, as there were no performance indicators available. Second, she instructed Mr. Bayer to report on the performance and cost-savings of the new video teleconferencing system. Third, she advised Mr. Bayer to provide more accurate projections for prison population between FY 2000 and FY 2001. The department had predicted a
5 percent increase in population, however it failed to explain to what cause that trend was attributed. Fourth, she asked Mr. Bayer to comment on present and future impacts of SB 416 of the Sixty-ninth Legislative Session upon the projected growth of the inmate population. She wondered if additional legislation to modify any negative impacts related to it needed introduction.

In response to Chairman Giunchigliani’s first question, Mr. Bayer stated the performance indicators for the new criminal investigator positions were related to the Inspector General section of the department. Although not submitted in The Executive Budget, performance indicators were available and would be provided to Mr. Ghiggeri as requested.

Still, because a letter of intent had been issued during the previous legislative session specifically requesting performance measures in that area, Chairman Giunchigliani strongly urged Mr. Bayer to illuminate all available indicators on those positions at that time.

Mr. Bayer disclosed the mission of the Office of the Inspector General was to develop and implement comprehensive programs in three divisions: Audit, Inspections, and Investigations. Through those programs, the office would ensure the department was in compliance with all applicable rules and regulations related to audit and inspection activities. Specifically, Investigations programs would address risks related to the safety of staff, inmates, and the general public.

Concentrating first on the Audit Division, Mr. Bayer explained the main objective of the office was to identify key controls during the course of each audit and to effectively communicate those controls to auditing management. The second objective was to identify high-risk areas during the course of each audit, using the percentage of risk assessment generated as an outcome measure. Third, the Audit Division was responsible for communicating audit results to the audit and to management and was also responsible for reaching consensus concerning audit recommendations. Fourth, the audit division verified auditee compliance with accepted recommendations.

Next, Mr. Bayer described the goals and objectives for the Inspections section of the office. Primarily, the objective in that area was to manage the Governor’s Early Return to Work Program. He said the indicators for Inspections had already been discussed and claims costs from on the job injuries over the past 3 years had been reduced by over $1 million per year. Furthermore,
Mr. Bayer noted the department did not carry the record of being the agency with the highest number of claims for industrial accidents. The department had a cost-effective safe agency.

In terms of safety and health, Mr. Bayer explained the Inspections Division ensured compliance with applicable laws and regulations in all areas throughout the prison system. The division was also responsible for improving the work environment and for the reduction of on the job injuries. Last, Inspections risk management team identified potential losses generated through liability claims against the department.

Moving on to the third division, Mr. Bayer explained civil, criminal, and internal investigations related to DOP were conducted through the Investigations Division. Investigations identified the existence of security threat groups or gangs, as well as developed and implemented a comprehensive gang tracking program and a drug interdiction program within the prison system.

Supplementing those activities, Investigations also identified gang membership, the type of drugs entering the prison system, drug trafficking, and other types of criminal activity being committed with the prison system.

Specifically requesting a comparative analysis between past and present figures Chairman Giunchigliani asked how many actual investigations had been conducted. Mr. Bayer replied he did not have those figures with him at present, however he would furnish them to subcommittee members in the future. Chairman Giunchigliani then emphasized the need for figures depicting the results of those investigations, such as figures revealing the types of drugs entering the system, as well as the resultant changes to department policy. For example, she assumed a gang member was identified upon entering the system and she wondered if the subsequent classification changed, and if so, how it was changed to meet department specifications.

In the last few years, Mr. Bayer noted a greater number of arrests and prosecutions had been made. Even more alarming, a greater degree of illegal drug use within the system was also more apparent. He thought the greater availability of drugs amongst inmates could be attributed to visitors, to deliveries to the prisons, as well as to staff usage. Chairman Giunchigliani noted staff training should be addressed later on in the department’s presentation because it was an area that seemed to lend itself to a higher rate of drug use in the prison population.

Next, Mr. Bayer moved on to the issue of video teleconferencing. He explained the new program was running and available to the Parole Board. For instance, hearings from ESP to Carson City, Reno, and Las Vegas had already been held.

Chairman Giunchigliani requested a figure for the amount of usage the new system had received and the cost-savings the department had realized as a result of its implementation. However, Mr. Bayer replied cost-savings from the video teleconferencing system were difficult to calculate because agencies outside of DOP, such as the Parole Board, were also utilizing the system. Accordingly, she expected the Parole Board and other users to generate a figure for cost-savings based on savings in staff time and travel time.

Mr. Bayer next spoke to the impact of Senate Bill 416 of the Sixty-ninth Session upon the department and its ability to make accurate projections concerning the prison population. He felt the issue was complex because the integration of the S.B. 416 classified inmates had occurred at a slower rate than anticipated; integration had occurred at 2.5 percent per month. Currently, the department had just surpassed the 50 percent level for the proportion of the prison system’s population now sentenced under that legislation.

Mr. Bayer then informed committee members a comparison study depicting the average length of stay in the prison system, at a particular moment in time, had been undertaken. Resulting from the variation in sentence structure, the amount of cells required had increased exponentially making the study of the impact of the legislation more complex. Although, the average length of stay was about 3.5 months more per inmate, Mr. Bayer thought the figure could be deceptive because some inmates remained past the period of study. Thus he reiterated the effects of the legislation wouldn’t be felt for another 5 to
10 years.

Adding to Mr. Bayer’s testimony, Mr. Whorton referred to a PowerPoint presentation, which isolated figures of old inmate population and the population of prison inmates affected by S.B. 416. He noted those figures demonstrated the slow process of integration.

Chairman Giunchigliani then asked when the department would achieve
100 percent integration. Mr. Whorton replied the 100 percent integration level of the S.B. 416 inmates could be reached in 1 to 2 years. Chairman Giunchigliani followed by asking Mr. Whorton if the department had worked with Carlos Concha, Chief of the Division of Parole and Probation, concerning probation violation and its classification as a new crime. Mr. Whorton qualified an individual was classified as an S.B. 416 inmate if the individual violated probation with a new offense. To avoid double counting an inmate in statistical calculations, a choice between the two classifications had been made.

Chairman Giunchigliani next asked Mr. Whatnot to expound upon the apparent downturn in female inmate population growth. Mr. Whorton pronounced the female inmate population in the last year grew by over 19 percent. Nevertheless, since September 1998, the actual in-house female inmate population had declined. He felt the discrepancy in rates demonstrated the difficulty in projecting a small volatile population. In terms of raw numbers and percentages, the addition or subtraction of a few inmates could alter projections significantly. Moreover, he felt the short-term decline in female inmate population was driven by a decline in inmate intake.

Chairman Giunchigliani wondered if increases in harsh sentencing could be attributed to the greater prevalence of female judges in the court system.
Mr. Whorton admitted some speculation attributed the increase to the increased prevalence of female judges. However, Mr. Whorton found that prison population growth was attributed to demographic changes and changes in the proportion of women committing more serious offenses. In any case,
Mr. Whorton felt the trend was a national trend not specific to Nevada only.

Chairman Giunchigliani next asked what caused the intake in the female prison population. Unfortunately, Mr. Whorton replied that the department could not reliably determine the cause of the intake due to the volatile nature of the population.

Chairman Giunchigliani then observed females tended to enter the prison population due to drug offenses and prostitution. She offered an explanation to the increased trend in the female inmate population could be derived from an increase in the number of women committing more violent crimes. If that was the case, she inquired if any rehabilitation program had been developed to divert less violent offenders from the general prison population in order to increase available bed space.

Once again referring to a PowerPoint chart, Mr. Whorton pointed out the number of women committing violent crimes was less than the amount of male inmates in the same category while the number of women committing drug related offenses was higher. He submitted specific programs were in operation at the Southern Nevada Women’s Correctional Facility (SNWCF) to deal with drug rehabilitation.

Mr. Bayer added the trend in female incarceration had increased nationally and was directly related to factors like mandatory sentencing. After reviewing intake summaries and crime reports, he found crimes committed by female, who had played a secondary role to a male partner, received a more lenient sentence. In all, the prison intake rate was a reactive issue that local governments could only adjust to and respond to with the best means it had available. Mr. Bayer encouraged further study concerning the issue.

Chairman Giunchigliani reviewed the statistics for the crimes committed female inmates and concluded an effective method of rehabilitation needed to be developed so that bed space could be diverted for more hardened criminals.

Next, Chairman Giunchigliani cited the 1998 bed inventory of 8,810 beds. She asked when the department’s ability to sustain operations beyond emergency capacity would be inhibited. She felt the department needed to provide committee members with an alternate plan should they decide not to approve the department’s budget request to send inmates out of state.

In response, Mr. Whorton displayed a chart for the "Female Master Plan." DOP planned on converting beds at NNCC from male to female to accommodate additional female inmates. He elaborated because of the tremendous growth in the female population last year, some women housed at the Northern Nevada Correctional Center (NNCC) returned to Southern Nevada Women’s Correctional Facility (SNWCF) on January 13, 1999. The department had also operated the Silver Springs Conservation Camp (SSCC) at emergency capacity of
152 inmates. The department also planned to place 100 female offenders out of state by July 1999. Mr. Bayer felt the transfer depended largely on short run changes in the population of the female inmates. In recent months, the decline in population seemed to diminish the need for the transfer. He repeated the department’s difficulty in planning long run solutions due to the static nature of short-term population projections or trends.

Chairman Giunchigliani restated an alternative plan needed to be developed if the female population continued to decline. She wondered if there was an alternate facility in state that could house those inmates.

In reply, Mr. Bayer advised negotiations with Corrections Corporation of America (CCA) to expand the SNWCF had been undertaken to provide more elastic options for the department to pursue. Regardless, Chairman Giunchigliani felt that was not a feasible alternate plan, but added costs to the state. She wanted to know if cells were currently available at any of the prison facilities in Nevada to house those women. Mr. Bayer did not know where those cells could be found. Five female inmates could be housed in Minden for $41 per day, yet even with that, additional beds were needed and could not be located in state.

Rather than mothballing the SNCC facility, Chairman Giunchigliani asked if SNCC could be kept open and converted to house those female inmates.
Mr. Bayer opined there were neither enough minimum custody female inmates to justify converting the facility nor was there enough bed space for male inmates to justify the conversion of SNCC.

Chairman Giunchigliani stressed the department’s inadequate projections were the primary sources of confusion for committee members. She wished to understand why the department proposed closing SNCC while the opening of CCSP was delayed. She wanted a clear idea of the department’s plans for housing its inmates.

Mr. Whorton explicated the difficulty in housing female inmates stemmed from the generally small size of its population. For instance, when the department used the Unit 6 at NNCC, 37 inmates were housed out of the facilities 60 beds. At SNCC, a conversion from a male to female institution would overextend the operations at the other male incarceration facilities, all of which were already operating over emergency capacity. Until CCSP was opened, Mr. Whorton did not think the male institutions would be able to operate with a surplus of beds. The department’s housing plans were hinged upon the opening of CCSP, and he felt other housing plans would require an extraordinary amount of work.

Using the PowerPoint chart, Mr. Whorton called attention to male inmate population growth. Assuming the closure of SNCC, he pointed out that prior to the opening of Phases I, II, and III of CCSP, the male population would be housed over emergency capacity. Once CCSP opened, population growth would fall and then eventually plateau throughout the remaining phases of construction.

On the other hand, an alternate chart depicting prison population projections while the SNCC facility remained operational revealed a large surplus in capacity would be retained throughout all phases of CCSP’s construction. Essentially, DOP’s master plan predicted that by June or August 2000, the department would have greater flexibility in terms of housing its inmates.

Chairman Giunchigliani asked when SNCC would re-open. Mr. Whorton clarified the first chart projected population figures assuming the closure of SNCC, whereas the second chart projected population growth with the SNCC operational. He said SNCC was not scheduled to re-open should the plan to close the facility be implemented.

Chairman Giunchigliani asked what the department intended to do with SNCC once it was closed. Mr. Bayer said the department had explored a variety of possibilities. First, he said the facility could be maintained to reopen should population growth projections prove inaccurate in future.

Chairman Giunchigliani interjected to clarify that the mothball project would cost $500,000.

Mr. Bayer continued to explain the second alternative was to solicit lessees for the facility who would subsequently invest capital in its maintenance and repair. That alternative would provide the department with a steady flow of capital. Chairman Giunchigliani inquired if Mr. Bayer had been able to contact any interested parties. Mr. Bayer then replied affirmatively. CCA and the Federal Bureau of Prisons had expressed interest in leasing SNCC.

Chairman Giunchigliani noted the sale of the ESP had also been referred to in previous sessions and said she wished Mr. Bayer to provide concrete information concerning offers of sale or other modes of interest.

Next, Mr. Price asked if the department operated any co-ed facilities similar to those he had inspected in other states. Mr. Whorton said male and female inmates had been housed together only in very specific circumstances, generally in restitution centers and pre-release centers. Aside from co-ed restitution centers the department had never operated a co-ed prison facility. In the past, the department had used various housing units at male incarceration facilities to house female inmates on a temporary basis. One such instance occurred when the department remodeled the old Nevada Women’s Correctional Center. In general though, women were not allowed to fraternize with the general male prison population and the inmates were housed at NNCC. Mr. Whorton explained that recourse had been difficult because programming and rehabilitation opportunities were reduced and that inmates had to be guarded much more closely.

Mr. Price then wondered if there was a way to convert the SNCC facility into a co-ed facility with structural modifications. Mr. Bayer reasoned should the female inmate population remain volatile, he hoped a private corporation would open the SNCC as a women’s prison into which the department could place its female population overflow. Regardless, he held a completely co-ed facility was not the best option for the SNCC facility.

Senator Neal next expressed concern over the fact that the department had been operating most of its facilities at emergency capacity for over 1 year. He also asked how inmate classifications were divided amongst the department’s institutions.

Mr. Whorton explained the inmate population was divided by custody levels and placed in corresponding security level institutions. Maximum-security inmates were housed at the ESP. The other female and male institutions were multi-level facilities where close custody inmates and medium custody inmates were housed together.

Mr. Whorton added the medium custody inmate comprised the largest part of the prison population. Medium-security inmates were individuals the department expected to operate within the confines of rules and regulations within the confines of the facility. If those individuals were placed outside of the secure confines, he said they would either violate the law or exist as a high risk. On the other hand, Mr. Whorton specified minimum-security prisoners were inmates expected to venture outside the secure confines without violating regulations and who would be released within 18 months. Those offenders occupied minimum-security facilities such as conservation camps and restitution centers.

Obviously Mr. Whorton stated the security levels of the departments institutions varied according to the type of prison population housed there. Broken down by classification, 54 percent of the male inmate population was medium custody, 22 percent was close custody and 20 percent was minimum custody. The remaining percentage of inmates was defined as undecided because those inmates had yet to complete the intake process and had not been assigned to the classification committee.

Senator Neal then asked if the minimum custody inmate was further classified according to the type of crime committed. Mr. Whorton replied statutory restrictions existed prohibiting the placement of sex offenders in minimum-security facilities. Furthermore he would be surprised if a minimum custody inmate was serving time for first or second-degree murder because of their high potential for violence. Also, violent offenders generally served life sentences and the classification committee could not predict their release date.
Mr. Whorton emphasized any violent offender placed in minimum custody would have to meet statutory criteria.

Senator Neal restated his question. He wondered if violent and non-violent crimes were distinguished in the prison system. Mr. Whorton admitted a person incarcerated for first-degree murder could occupy the same cell as an individual serving an extended sentence for writing bad checks. The department attempted to incarcerate prisoners at the lowest custody level at which their behavior could be controlled. In many cases though, an inmate serving time for murder was a non-violent person when isolated from drugs and alcohol and could be classified at a lower custody level.

Senator Neal advised a means, which reduced capacity, should be developed immediately, especially when the prison was operating over emergency capacity.

Mr. Bayer stated the department had a limited impact upon deterrent programs and community outreach programs. Despite suggestions made by the department in the past, Mr. Bayer believed return-to-custody facilities, day facilities, half-way houses, or facilities where an offender may be placed in lieu of revocation, should be designed to alleviate the problem of overcrowding in prisons.

Then Chairman Giunchigliani maintained issues related to the classification and custody of inmates revealed the larger dilemma the department faced segregating prison population statistics. For example, she cited the current minimum capacity level for females, which was at 34 percent. By 2003, the department predicted a minimum capacity level of 47 percent. She wanted to know what factors were driving those projections.

First, Mr. Whorton clarified those figures indicated the actual number of inmates assigned to minimum custody, rather than the level of minimum capacity. Second, the recent opening of the SNWCF decreased the capacity of minimum-security female inmates because of an alternate classification system. He claimed the department was working to increase the percentage of female inmates in minimum custody.

Next, Senator Jacobsen asked Mr. Bayer to clarify his proposal to rent SNCC to a private corporation and to house excess inmates under their control. Preserving the department’s flexibility to adjust to possible prison population overflow, Mr. Bayer answered the department hoped to continue to use the SNCC facility. Beneficially by leasing the facility, the department would have priority to any beds over other clients. Additionally, a lease agreement could include stipulations for the maintenance and upkeep of the facility.

Senator O’Donnell remarked the savings from mothballing the SNCC facility exceeded the benefits of keeping the facility fully operational. He felt the most logical solution was to house prisoners at the minimum level of emergency capacity and to use SNCC as an escape valve, even if the beds had to be leased. Also, he recognized that judges, not DOP, determined the sentencing for inmates in the state. The department had neither the authority nor the responsibility to determine which inmates could be incarcerated by house arrest and which inmates required incarceration in a correctional institution. He told Chairman Giunchigliani to make requests for the alteration of the sentencing structure to the judges themselves, not to DOP.

Although, Chairman Giunchigliani appreciated Senator O’Donnell’s comments, she reminded him similar questions had been asked in previous sessions as well as in previous legislation. Also, as a result of Parole and Probation (P&P) statistics, the number of house arrests seemed to have declined. She felt the legislature should progressively seek areas where solutions could be found to problems like prison overcrowding.

Senator O’Donnell directed Chairman Giunchigliani to design legislation concerning regulations requiring non-violent female offenders to be placed under house arrest if she so desired. However, he firmly believed neither the Chairman nor other committee members could request those regulations from the DOP.

Because the DOP had greater understanding of its facilities and its ability to manage certain situations, Chairman Giunchigliani stressed that she wanted the department to provide information on a variety of scenarios or ideas in lieu of transporting female offenders out of state or requesting an expansion at SNWCF. She emphasized committee members must be apprised of all available alternatives.

Mr. Bayer quickly commented that Chairman Giunchigliani’s previous comments provided substantial support for Governor Guinn’s proposal to create a Department of Corrections. He felt an entity separate from the DOP could more effectively streamline organization and address flaws within sentencing structure. The department simply could not affect the model P&P used for assigning beds or delivering sentences.

Next, Mr. Bayer resolved the department could engineer a plethora of alternatives to transferring female offenders out of state. However, due to the format of budget requests, the department had been forced to submit what it felt was the best solution to the problem at hand. He then shared the Sentencing Commission had taken testimony from all of the agencies within the department to design the most effective proposal to manage the criminal justice system.

Returning to departmental projections, Chairman Giunchigliani called attention to the department’s projected bed capacities and its actual resources. She did not feel she had a competent understanding of how those figures matched.

Addressing her confusion in regard to departmental projections on bed space, Mr. Bayer stated if SNCC remained open, the department would have a surplus of 1,000 beds. Although, the department could not expand a facility on a bed by bed basis, expansion was less expensive than building the "core" of a new facility. Future planning, incorporating both surplus and scarcity circumstances, had to be instituted. Moreover, he contended the operation of two facilities, SNCC and the new facility at Cold Creek, which produced a 1,000 bed surplus at SNCC, was not economically efficient because it required covering the expenses for two facilities and their staff. Mothballing SNCC was the most sensible solution because it did not exceed the costs of operating both prisons simultaneously and it did not encounter the same difficulty the department anticipated in recruiting staff. On the other hand with the department’s proposal, DOP could operate under the same staffing requirement.

Mr. Bayer also argued feasible alternatives were difficult to develop, as most proposals were open to speculation. For example, the future status of the SNCC facility was tenuous as it depended upon both the department’s ability to secure a workable rental agreement as well as future department need.

Mr. Bayer articulated the new prison at Cold Creek was more secure and better designed to deal with inmates effectively and it should be used to its full capacity. Furthermore, the option to transfer 188 inmates temporarily from the Nevada State Prison (NSP) to Cold Creek would also be available in order to renovate the sagebrush area of NSP.

Chairman Giunchigliani asked if the renovation of the NSP was an approved Capitol Improvement Project (CIP). Mr. Bayer replied affirmatively.

Mr. Whorton recalled the sagebrush area renovation was an element of the department’s master plan for its male inmates. He noted that immediately after the opening of Phase II at CCSP in August 2000, beds at NSP would be reduced for two months while the renovation was being completed.

Chairman Giunchigliani reminded Mr. Bayer the department was behind in schedule for the opening of Phase I, which was to have occurred in June 1999. Mr. Bayer admitted the original proposals for the CCSP project had designated a July 1999 opening date. However, over the course of several years that date had changed to schedule the opening of Phase I for June 2000. But Chairman Giunchigliani contended previous CIP’s had indicated the project was firmly committed to a July 1999 date. She expressed severe concern that the design for the project involved in a legal suit and was dissatisfied to learn the project was also drastically over budget.

Mr. Bayer replied the construction of CCSP was under the control of the Public Works Board (PWB) not the DOP. Therefore, he could offer no comment in regard to the project’s tardy progress. He then noted that although on-going litigation by one firm had yet to be resolved, the construction process had not been impeded by that factor. Instruction had been given to department staff to minimize obstacles to construction as much as possible.

Following Mr. Bayer’s response, Chairman Giunchigliani asked what caused construction to be slowed. Again, Mr. Bayer responded he could make no comment, as he did not understand how the PWB had managed the project.

Then Chairman Giunchigliani quizzed Mr. Bayer if he had made any changes to the construction plans after PWB had issued approval.

Mr. Bayer conceded design changes to elements, not incorporated in the plans, had been submitted several times. Working with the architects in 1997,
Mr. Bayer said he had also initialed changes to the original plans. In fact the department was still trying to adjust those elements. However, Mr. Bayer did not feel he had the expertise to comment on the projects slow progress.

Chairman Giunchigliani needed clarification if Mr. Bayer had played no role concerning design changes and the subsequent construction slowdown. In other words did he feel DOP had been isolated from the projects design and implementation process? Mr. Bayer replied negatively, that was not the case. He stated he had been involved on the selection committee for the architect and he stressed the department had spent a tremendous amount of time evaluating the projects design. As a result, he noted costly errors had been detected.

Chairman Giunchigliani understood when an architect was selected for a project, decisions were deferred to DOP, especially when the selected company had never even designed a prison. She averred the debate revolved around the constant modifications made to construction plans, which had been based on the Lovelock and Ely facilities and for which she felt the department was solely responsible. Due to the tenuous nature of the project’s progress and to the frequent changes made to its schedule, she again demanded that alternatives to the closure of the SNCC facility be presented by DOP to committee members.

Not trying to be evasive, Mr. Bayer repeated that Chairman Giunchigliani’s remarks confirmed the need to eliminate the bid process and to allow the department head to sole source the project. He felt construction would proceed more quickly and efficiently.

Chairman Giunchigliani disagreed with Mr. Bayer and stated to sole source a project with the same firm, which was already behind in performance and over budget, was in fact a poor means of spending taxpayer dollars.

Next, Chairman Giunchigliani referred to testimony given by Mr. Bayer in 1997 where he requested greater bed capacity that would provide the department with "flexibility to discipline inmates and control their movement much more effectively." She recalled Mr. Bayer had advised greater bed capacity would allow for maintenance and remodel projects that had been funded. Therefore the Chair wondered if the department had taken advantage of such flexibility and what department policy changes were made as a result. She understood that surplus beds would facilitate flexibility within the system to shift inmates based on custody classifications.

Mr. Bayer responded the department had not had surplus beds available in the last two years. However he suspected if CCSP project had progressed on time, plans for using the flexibility offered by surplus capacity would have been readily apparent. For example, the sagebrush area renovation at NSP would have been an effect of such surplus capacity. Thus, because the CCSP project was slowed, that renovation would be consequently postponed until the opening of Phase II.

Next, Mr. Bayer held the greater security offered by the new facility at Cold Creek, would produce greater leeway so that maximum custody inmates could be shifted to other facilities in order to complete the maintenance projects at NSP.

Chairman Giunchigliani asked how the department would use its flexibility if surplus beds were to exist in the future. Mr. Bayer replied with the opening of

CCSP, flexibility would be used as a management tool. Additional bed space had been found at the Lovelock Correctional Center (LCC) and Warm Springs Correctional Center (WSCC). Once those facilities were staffed adequately, those beds would be utilized.

Chairman Giunchigliani thought if SNCC was kept open, the department would have would that flexibility and surplus capacity. Yet, because of the capacity offered by CCSP, Mr. Bayer replied surplus capacity would be achieved with or without the SNCC facility.

Chairman Giunchigliani next inquired if the fencing element of the CCSP design had been scaled out of current construction designs. Referring to a blueprint of the entire Cold Creek facility, Mr. Bayer walked committee members through both Phase I and Phase II of the construction design. Although the fence and towers of the prison were integral components to Phase I, they were listed in Phase II of the design. Mr. Bayer then assured committee members the tower and fence would be finished prior to the completion of Phase I. Phase II would also complete any other projects necessary to the opening of the prison.

But Chairman Giunchigliani wondered how Phase II could be completed without adequate funding. She felt the department was taking a risk by assuming money was available for Phase II. She then questioned the operational capacity of Phase I, since the fencing and tower specifications were provided for in Phase II.

Mr. Bayer affirmed those tasks could not be completed until money was appropriated. Without a sufficient appropriation of funds to meet Phase II needs, Mr. Bayer felt PWB might be able to use funds from the Phase I budget to construct some portion of the fencing and tower designs.

Chairman Giunchigliani repeated an itemized list from PWB and from the department, which detailed tasks needed to be finished and the associated costs and dates of completion for Phase I needed to be submitted. She reiterated committee members needed more assurance as to when a secure facility at CCSP would actually come on-line.

Next, the Chair asked Mr. Bayer to explain how the department felt Phase II should be funded. Mr. Bayer replied Phase II funding was requested for The Executive Budget.

Mr. Perkins followed by asking how long Phase II could be postponed if the SNCC facility was kept open. Mr. Whorton responded the scenario had not been thoroughly evaluated. Still, he would be able to provide more accurate information regarding the issue the following day. Mr. Perkins then strongly advised the department to assess all available alternatives should the
$50 million required to fund Phase II fail to exist. He felt retaining SNCC was the most logical solution to a shortage in capacity if the new facility could not be completed in time.

Mr. Bayer reflected upon those comments and stated if CCSP was not open in time, obviously the department would re-evaluate its position towards SNCC. At the present time, though, Mr. Bayer believed the department should continue on the present course of action, which anticipated a July 2000 Phase I opening at CCSP. Acknowledging the possible funding shortfalls and their consequences, Mr. Bayer reminded committee members the most cost-beneficial proposals were put forward in budget documentation. Accordingly, DOP was convinced the closure of SNCC was the best solution available.

Next, Chairman Giunchigliani asked Mr. Whorton to return to the issue of population predictions. As an example, she cited an average population of 10,444 in 2001in relation to a 5 percent population increase, and asked if DOP was comfortable with those projections. Mr. Whorton contended the male population projections were reasonable estimates of the actual level of population growth. On the other hand, he stressed population projections, for the female inmate population, were more ambiguous.

Trying to confirm Mr. Whorton’s statement, Chairman Giunchigliani then tried to confirm Mr. Whorton’s statement and again questioned the department’s confidence in the predicted population trends. Mr. Whorton replied the compounded annual growth rate was 5.82 percent for the male population, consistent with past growth levels. Whereas levels for male inmates would grow by 500 inmates over the following year, female inmates could grow by only 42 inmates. However, because of the immediate decline experienced by the female population in recent months, Mr. Whorton felt its population growth would be much less than anticipated.

Joining the discussion, Mr. Arberry felt the projection formularies alongside the passage of S.B. 416 would affect those predicted growth ratios. In answer
Mr. Whorton explained the population statistics, predicted by the National Council on Crime and Delinquency, included the effects of that legislation. The assumptions for the population projections were based upon the type of offender within the system. Also, the singular impact of S.B. 416 inmates was isolated in a distinct pro-grant rate, which was separated from inmates serving under he old sentencing laws. He stated that as the proportion of S.B. 416 inmates increased in the system, those statistics would be less difficult to predict.

Mr. Perkins requested a time period for when DOP absolutely needed the space CCSP would be able to provide. Depending upon the scenario adopted,
Mr. Whorton explained the date would vary. Currently, prison populations had surpassed the emergency capacity threshold and he felt they could continue to operate under that circumstance for some time. An absolute date was too subjective an element to designate specifically. Mr. Perkins redirected his question and asked how long DOP could sustain operations with SNCC operational if legislators decided CCSP should be delayed. He felt cost savings could be achieved by operating SNCC for as long as possible because it required fewer staff. However, Mr. Whorton insisted SNCC operations were not as cost efficient as opening the core structure at CCSP. He maintained if CCSP were mothballed instead of SNCC, the department would have to expend an exorbitant amount of money maintaining CCSP. He believed it was senseless to allow a never been used facility to lie fallow. Additionally, he argued the new facility at Cold Creek was more efficient to operate, safer for staff and inmates, and much more secure than SNCC.

Also, Mr. Bayer reasoned that since the department was already over-capacity the need for CCSP was obvious. He argued prison management problems were the consequence of the relationship between prison overcrowding and the lack of a resource base large enough to support additional population.

Mr. Perkins then asked if there was an adequate inventory of SNCC’s assets so that they could be transferred and used at other facilities. Mr. Bayer articulated if the budget requests and decision to mothball SNCC were approved, equipment from SNCC could not be transferred because of its age and unreliability. However, some equipment from SNCC needed to be retained for its maintenance.

Next, Chairman Giunchigliani asked how much longer DOP could operate over emergency capacity. Because beds could not be built on a bed by bed basis and because DOP could not predict exactly how many new inmates would be incarcerated per month, Mr. Bayer did not feel the department could operate over emergency capacity much longer. Critically, Chairman Giunchigliani remarked the issue was the driving force behind the DOP’s budget and felt that DOP’s response to the issue needed refinement.

Mr. Whorton added that if Phase I of CCSP was further delayed, unconventional housing would have to be sought to house the inmate overflow by FY 2000. In point of fact, inmate overflow would become by the date the department proposed to open CCSP. Mr. Bayer explained the department’s plan was to open the new facility by July 2000 with 1,008 beds.

The Chair then inquired if a wing in the LCC facility was still mothballed.
Mr. Bayer responded one-half of a housing unit existed at LCC however due to recruiting difficulty it was not staffed. Chairman Giunchigliani asked how many beds were available in the half unit. Double bunked at full capacity, Mr. Bayer thought the unit could hold approximately 125 inmates.

Senator Jacobsen felt as experts, DOP should be able to develop consistent, clear priorities and possible solutions to staffing and housing shortages.
Mr. Bayer replied the department’s requests were parallel to The Executive Budget’s recommendations. He maintained completing CCSP, transferring female inmates out of state, and closing SNCC were the best solutions to the department’s current difficulties. If a firm could be found that wished to lease the SNCC facility from the state in order to generate revenue, Mr. Bayer said it would be pursued. However because of the uncertainty of that option,
Mr. Bayer left it out of the department’s master plans.

Chairman Giunchigliani asked when the plan to lease the SNCC facility was developed. Mr. Bayer indicated the plan had evolved from budget recommendations made in December 1998. Mr. Bayer said the plan to lease SNCC could successfully help develop efficiencies within the department operations and budget constraints.

Chairman Giunchigliani stated she appreciated Mr. Bayer’s honesty, however she noticed that the plan to lease SNCC was not part the department’s original budget proposal. She felt that indicated the original budget proposal had not anticipated the closure of SNCC at all. Mr. Bayer confirmed the closure of SNCC was not part of the original budget request. Nevertheless, he found that when Phase I and Phase II of the CCSP project, which each opened a 1,000-bed wing, were transformed into three separate phases, an additional 500 beds were revealed. Thus, the department was changed its strategy regarding SNCC. He emphasized consolidating prison operations by closing SNCC and utilizing Cold Creek prison to the maximum capacity was the most effective strategy for the department to pursue.

Chairman Giunchigliani criticized the department’s failure to explore other viable alternatives because it forced the issue on committee members in terms of appropriating funds in a cost-effective and safe manner. She opined the plan had not been well devised, especially as it appeared in a last minute effort to organize budget requests. She stressed committee members must have information concerning a variety of scenarios in order to effectively and efficiently allocate funds.

Mr. Arberry also requested Mr. Bayer to develop an alternate plan for the proposed budget by mid-March. He asserted DOP had been asked to evaluate all possible alternatives last December and to present those alternatives to the legislature by February. To his dissatisfaction, this had not been done. Therefore, Mr. Arberry exclaimed the department would have the following two months to create an alternative plan. He felt the department had falsely assumed committee members would accept the current proposal because it had been incorporated in the Governor’s "State of the State" address. Concluding his remarks, Mr. Arberry ordered Mr. Bayer to return to the committee, in the designated timeframe, with a thorough and well-devised alternative plan to the department’s budget request. He firmly declared committee members would not be forced to adopt the department’s proposal.

In reply, Mr. Bayer stated the department’s current proposal was the best proposal and he stood behind it regardless of whether the Governor made a similar recommendation.

Mr. Arberry reminded Mr. Bayer that his opinion was not supported by all of the 63 legislators of the Nevada Legislature. He explained Chairman Giunchigliani’s questions and comments during the hearing had been conducted in an effort to coerce Mr. Bayer to find other alternatives to the department’s proposal.
Mr. Arberry criticized Mr. Bayer for delivering a proposal to legislators that attempted to box committee members into adopting it. Out of respect for committee members and DOP, Mr. Arberry again directed suggested that
Mr. Bayer find an alternate plan to consolidating SNCC and CCSP operations. He felt legislators and DOP could meet on a middle ground.

Returning to the budget presentation, Chairman Giunchigliani cited an M-200 request for $363,365 for the equipment. She asked if those funds were included in the department’s CIP requests. She wanted to know whether or not those funds supported only positions or if CIP costs were incorporated.
Janet Johnson, Chief of Fiscal Services for DOP, answered the M-200 request referred to start-up equipment, which had been a one-shot appropriation in the previous session. Due to budget restrictions in the current fiscal year, that money had been reverted. Consequently, the department was requesting that the funds be reallocated in the coming biennium.

Debbie Bridge, Data Processing Manager for DOP, added the department’s data processing request for the first year of the biennium was $58,000. Chairman Giunchigliani interrupted to ask Ms. Bridge to comment upon the M-200 data processing request for CCSP. Ms. Bridge answered data processing requests for CCSP were not included in the CIP requests. She clarified the data processing funds existed in the one-shot appropriation, which the department had requested to be reallocated in the coming biennium.

The Chair then asked if the equipment requested would adequately meet the needs of the planned number of positions. Ms. Bridge believed adjustments based on the SNCC closure would affect that figure. Chairman Giunchigliani asked if the equipment and positions requested in M-200 were only for CCSP. Ms. Bridge replied affirmatively and stated she would return statistics on the number of positions the M-200 would support later on in the session.

Next, Chairman Giunchigliani turned to Year 2000 compliance. Ms. Bridge explained a few difficulties mainly in the telephone switches, which had been purchased in 1991 for five institutions, existed. The switches themselves were Year 2000 compliant, however the software used to complete call accounting, voice mail, and audix systems were not compliant.

Moving to decision unit E-379, which comprised the inmate drug-testing program, Chairman Giunchigliani pointed out the unit requested $599,000 from the previous biennium to be carried over for the program. She asked why none of the funds requested in the previous biennium had been spent and why the department asked for those funds to be returned in the current budget proposal.

Ms. Johnson responded only $20,000 had been spent on the inmate drug-testing program due to a delay in start-up operations. Operating currently, the Inspector General’s office had requested additional program expenditures for 1999. She explained the money for the program was re-requested for FY 2000 and FY 2001 primarily as a result of Violent Offender Incarceration and Truth-In-Sentencing (VOITIS) federal grant. She explained the VOITIS grant, used for the construction of prisons, would be in jeopardy if the drug-testing program were to be eliminated.

Chairman Giunchigliani inquired if VOITIS had a state match requirement.
Ms. Johnson replied it did not, but the department ran the risk of losing what the grant had already provided. Chairman Giunchigliani then asked Ms. Johnson to report back to committee members concerning the dollar amount the grant provided.

Since September 1998, Mr. Bayer explained the inmate drug-testing program allowed for monthly testing of 5 percent of the total inmate population by taking alternate samples of inmates in treatment programs. Annually, the program tested 10 percent of the total inmate population. Those figures would be submitted as performance indicators by the Inspector General’s office.

Chairman Giunchigliani interjected with two questions. First, she asked what the actual number of inmates tested per month was to accurately understand the program’s penetration rate. The department had projected the program would test 490 inmates a month by 2001, yet it provided no indicator for the number of inmates currently tested per month. Second, she wondered if the program cost much less than previously anticipated because only $20,000 had been expended since September 1998.

In reply, Ms. Johnson noted the $20,000 expenditure resulted from the delayed start and she wasn’t sure it that amount could be tied into the 5 percent penetration rate.

Chairman Giunchigliani then asked if the $20,000 expenditure was used for equipment purchases or lab fees. Mr. Bayer explained equipment had been provided to the department for testing purposes, but the department had to purchase reagents for the tests. He noted if confirmatory tests for prosecutions were needed, the department had to send test results to a certified lab at a considerably higher expense. Because Chairman Giunchigliani still expressed confusion in regard to how the funds were then used, Mr. Bayer informed her that each test cost $7 to $8, while a confirmatory test cost $27.50 per test.

Chairman Giunchigliani requested Mr. Bayer to provide a detailed breakdown as to how those funds were expended. Additionally, she directed Mr. Bayer to search for alternate federal grants, which could be used instead of General Fund money, to fund the drug-testing program.

Mr. Perkins next inquired what results the drug-testing program had revealed. Mr. Bayer answered 15 percent of the tests performed had positive results. Interestingly enough, he remarked test results from inmates involved in a substance abuse program at Warm Springs were 100 percent negative.
Mr. Bayer specified if an inmate refused to take the test or received positive results, disciplinary measures were taken, including restrictions on visitors and "good time." He also mentioned spot checks had also been performed to ensure the testing mechanism was working properly.

Chairman Giunchigliani then asked Mr. Bayer to provide committee members with the exact figure of the federal government’s provision of funds directed towards illegal aliens. Finally, she thought Mr. Bayer should provide committee members with assurances related to any other departmental programs that had been implemented in the last year.

Continuing with his presentation of the budget for the Director’s Office
Mr. Bayer called attention to the new positions requested. First, funding for a prison chaplain in southern Nevada was recommended in M-200. DOP currently employed two chaplains, one housed at NNCC while the other was housed at ESP to service the rural areas and remote camps. He articulated with an increase in prison population, necessitated the need a chaplain in the southern part of the state. He believed prison chaplains were an invaluable part of the prison administrative organization because religion was an important aspect to rehabilitation.

Second, Mr. Bayer apprised committee members funding for a sewage treatment operator was also budgeted. The position would be responsible for maintaining sewage treatment facilities as well as the water system for the Southern Desert Correctional Center (SDCC) facility and CCSP. The new 3,000-bed facility was about to come online, the increased demand placed upon the water and sewage systems in that region would be obvious. Mr. Bayer felt an expert was needed in that area to preclude any technical difficulties or inconsistencies with OSHA regulations.

Third, due to the volume of staff set to be relocated in the southern region of the state, Mr. Bayer felt the budget request for a personnel officer was also merited. He noted a stronger administrative presence needed to be made in southern Nevada due to the high concentration of growth of the prison population in the region. Subsequently, a fourth position, a management assistant position, was also recommended in M-200 to support the operations of the personnel officer.

Fifth, a computer network specialist was requested in the budget account. The network specialist would complement inmate classification and planning processes. Previous audits of the classification system had recommended the addition of a network specialist. Additionally, the position would serve as the assistant computer manager to NCIS, responsible for documenting the technical development of the classification database and serving as staff back-up for the computer manager. Aside from basic programming experience, he mentioned the position would require extensive knowledge of Novell and a familiarity with the database called Revelation. Although DOP had not always been able to provide legislators within immediate answer to questions concerning inmate classification process, population projections, or sentence management, the department had done an outstanding job in improving its ability to communicate those statistics. Thus, network specialists and computer managers were vital ingredients to the department’s continued success in that area.

Mr. Bayer said the sixth and seventh positions requested in the budget account were two correctional officer positions responsible for inmate transportation in southern Nevada. They would assist with local and long haul transports.

Chairman Giunchigliani requested Mr. Bayer to provide documentation in regard to the numbers determining the need for those requests, especially for the correctional officer positions. She wished to know how many transports were completed and what the department expected future need to be in order to justify funding those positions.

In terms of accreditation, Chairman Giunchigliani asked if any of Nevada’s correctional institutions had been through an accreditation process and if they hadn’t, why that was so. Mr. Bayer replied the SNWCF was accredited according to the requirements of the contract with CCA and were just recently certified formally.

Chairman Giunchigliani then asked what costs were associated with accreditation. Mr. Bayer answered the costs were between $8,000 to $11,000 per facility to accredit assuming no changes were required. Chairman Giunchigliani wondered why accreditation had not been pursued for any of Nevada’s other correctional institutions. Mr. Bayer told committee members accreditation was not always the most desirable process due to the associated costs. He explained the decision whether or not to pursue accreditation was purely budgetary, especially in years of shortfall. When the department was asked to trim its budget into a more lean, efficient proposal, he felt accreditation was not absolutely necessary. In fact, he said in a period when pay raises were frozen accreditation took a back seat.

If such was the case, Chairman Giunchigliani wondered by what criteria accredited institutions were judged. Mr. Bayer explained accreditation evaluated a variety of areas within the prison system. He noted performance based measurements were increasingly being used as the standards for evaluation.

Following an intense process, facilities that were evaluated for accreditation had to meet certain percentage of requirements and provide substantial documentation that recommended changes had been implemented. Even factors such as cell square footage, lighting, and the number of showers per cellblock were considered.

Chairman Giunchigliani remarked most of those considerations were driven by policy factors such as quality level, regulations, and classification standards. She then asked if the departments sole reason for postponing accreditation was cost driven or if was it due to a fear the institutions would not receive accreditation. Mr. Bayer conceded some institutions probably would not receive accreditation due to the physical plant. Yet, it was because the department did not place a high value on accreditation, that it was not pursued. Chairman Giunchigliani acknowledged DOP had requested funds for accreditation for LCC and had been denied. Mr. Bayer said that request was an item that had survived the first round of budget negotiations, however after it was dropped during the budget trimming process.

Mr. Perkins asked if it would be beneficial to seek accreditation for litigation reasons or insulation from liability. He also felt long run benefits of accreditation would outweigh the short-term costs, especially if it could ameliorate difficulties related to staff. Mr. Bayer agreed with Mr. Perkins and used the Ely State Prison’s medical system as an example of the positive effects of accreditation. The private corporation, responsible for the prison’s medical service, sought accreditation in June 1998. In fact, the sole purpose of requiring the private corporation to receive medical accreditation was to guarantee a certain level of performance. Similarly, the state’s contract with CCA for the SNWCF included an accreditation requirement.

Senator O’Donnell echoed Mr. Perkin’s comments. He felt accreditation served as a type of audit in the prison system. Furthermore, he believed the accreditation process could shed a new light on how Nevada’s prison system operated.

Chairman Giunchigliani concurred with Senator O’Donnell and thought the accreditation process should be phased in for some of the correctional institutions. Accreditation forced an entity to critically review its rules and policies as well as the use of its facilities. Specific to the prison system, accreditation would guide training and operate as a secondary oversight.

Mr. Bayer noted two of the department’s wardens were accredited auditors who could provide additional insight into committee member’s questions related to accreditation.

Mr. Perkins suggested accreditation would coerce greater legislative support. He reasoned that in order to maintain accreditation legislators would have to grant a greater amount of funding in budget requests. He felt accreditation would serve as an excellent tool for the director of the department to utilize in arguing for greater budgetary support. Additionally, Mr. Perkins contended accreditation would permit an audit of the prison system by an unbiased third party.

Mr. Bayer opened discussion on prison medical care by beginning with the issue of privatization. A complicated budget, Mr. Bayer explained the department had prepared a comparative study of a privatized versus non-privatized budget. He cited E-128 decision unit where medical privatization was isolated to reveal a projected saving of approximately $2.28 million in the first year of the biennium and $2.37 million in the second year. He reiterated the focal point of the medical budget would revolve around the issue of privatization.

Generally, Mr. Bayer considered two factors before deciding privatization was the most optimal solution. First, while evaluating privatization as an option,
Mr. Bayer felt bids for service should fairly compete with the quality of services provided by state employees. In most literature, he found private companies claimed a 10 percent savings over state controlled operations.
He acknowledged though that Nevada already had a privatized, accredited system at ESP in Ely. He found the medical service area of that institution had maximized savings less than the 10 percent figure. Therefore he concluded private measures of cost savings were not absolute. .

So, after maximizing the effects of budget reduction strategies used during the course of the year, Mr. Bayer explained the department was left with a solid base budget. Still, the department felt it needed to be trimmed further and reduced the budget request further by an arbitrary 8 percent. He anticipated the resulting budget would be the target private companies should be expected to reach. He also thought greater cost reductions would result from increased competition amongst those companies submitting bids in the process.

If those companies did not bid for the medical services contract in as cost-effective approach as DOP currently operated its medical services, Mr. Bayer stated the department would not privatize. Accordingly, the anticipated savings at the 8 percent level would be restored in the budget. He noted by the end of December 1998, the department had evaluated its budget and arbitrarily chose an 8 percent projected savings figure as a reasonable measure for private companies to achieve.

Chairman Giunchigliani then called attention to the department’s total actual medical costs, which were $28,196,706 million for 1997 to 1998, and compared it to the Governor’s recommendation for $30.5 million. She asked if privatization was expected to save approximately$5 million over the biennium. Mr. Bayer replied affirmatively. Following his response, Chairman Giunchigliani desired to know how prison mental health costs impacted total medical costs.

Mr. Bayer replied the answer to that question was convoluted because the medical model used by the department could not completely isolate normal medical staff from mental health staff. Sometimes both medical and mental health staff performed reciprocal functions. Additionally, costs such as office space costs made it difficult to clearly understand how mental health costs determined the total level of prison medical costs.

Chairman Giunchigliani wondered how the department could expect greater accountability from private companies if the department itself could not internally track specific costs. Mr. Bayer said privatization of both mental health and normal medical services would occur under the same method. However, Chairman Giunchigliani was concerned the alleged cost-savings justifying the privatization of medical service at ESP did not exit to merit the entire privatization of prison medical care. Furthermore, she exclaimed the private corporation, responsible for ESP’s medical sector, did not provide such figures either. If the motive for privatization was greater efficiency while maintaining quality, documentation of the cost savings from privatization should be available. She also felt mental health would be a significant contributor to prison medical care costs because of the Taylor vs. Wolfe decision and that DOP should be able to segregate those cost from the total amount. Questioning Mr. Bayer’s testimony, she asked if he did not know how to segregate those costs.

Mr. Bayer answered the Chairman was partially correct. He elaborated that during the 15-year duration of the Taylor vs. Wolfe litigation, the court’s demanded a percentage calculation of psychologists per number of inmates. Driving prison mental health system costs until 1995, that percentage calculation also combined regular medical care with mental health care. For instance, the portion of time a day a psychiatrist spent performing purely medical duties versus mental health duties was indeterminable. Thus, costs did not easily separate.

If prison medical care was privatized however, Mr. Bayer said accountable measures of cost savings performance could be produced. Assuming the budget proposal was passed and an 8 percent cost savings was realized,
Mr. Bayer hypothesized that in a fiscal sense, 8 percent of what would have otherwise been spent on the medical budget would have been saved. Measures assessing the quality of care provided by the private company would be calculated by ten state-employed positions that would spot check and audit the prison medical care division.

Chairman Giunchigliani repeated her question to Dr. Ted D’Amico, Medical Director for DOP. She wondered how the medical division tracked for accountability, especially concerning some of the mental health audit accounts. Moreover, she asked how the division complied with the consent decree, if there was not a way to measure the division’s performance in meeting the mental health needs of inmates.

Dr. D’Amico informed committee members the division did in fact internally track its mental health services. Mental health care was provided by hired psychologists and psychiatrists as well as by some members of the Forensics division, who supervised a variety of custody chores. He explained the division did not go outside the prison system for any mental health medical support.

Housing two mental hospitals, both in northern and southern Nevada, the division kept a close eye to its compliance with the Taylor vs. Wolf decision. As a result of that decision, the division had been placed under enormous pressure to design a prison mental health system second to no other system nationwide. Services from both psychiatrists and psychologists were tracked on an hourly basis to determine performance. Likened to social security,
Dr. D’Amico indicated the state had felt the Taylor vs. Wolfe decision had been such a problem that it should not be questioned in any way. In his extensive experience, privatization trimmed the area of psychiatry extensively. He felt if privatization were to occur, DOP should monitor mental health services carefully. Because private corporations were under budgetary constraints, DOP would have to ensure that cost-cutting measures did not infringe upon the quality of the mental health care.

Chairman Giunchigliani agreed with Dr. D’Amico and remarked that generally with privatization, staffing was cut or the quality expectations of staff was lowered. Because psychiatrists and psychologists for the prison system were difficult to recruit in Nevada, hired mental health care staff was not licensed in many instances. She thought cost cutting in that division had already been done by allowing well qualified, but unlicensed individuals to provide care. She reasoned a privatized company couldn’t possibly trim costs any further without impinging upon the minimum standard for the quality of care precedented by Taylor vs. Wolfe.

Dr. D’Amico added positions, which had been approved by legislators, were filled carefully. Chairman Giunchigliani asked if there were any staff openings currently. Dr. D’Amico replied affirmatively, however, at the present time the division did not need to fill any additional mental health positions.

Phil Nowak, Medical Administrator for DOP, then took up the issue of the relative costs or share of resources attributed to mental health. He apprised committee members department staff assigned to mental health had begun to track the use of prescription drugs and to document the ancillary aspects of treatment, both of which were not yet available on a roster. He explained that due to overlap between regular medical care and mental health care the department had not previously followed those expenses. Answering Chairman Giunchigliani’s question concerning the departments ability to isolate mental health care costs, Mr. Nowak felt the department could track those expenses.

In order to increase accountability in prison medical care, Dr. D’Amico remarked the division reorganized itself. For instance, the division had been able to acquire a greater number of licensed staff in the mental health area to match the number of licensed physicians in the normal medical area. He also noted the division would soon conduct a month-by-month analysis of accountability measures and would submit a detailed breakdown of the division’s expenditures according to the type of care provided. Next, in regard to prescription drug usage, Dr. D’Amico explained he had restructured the protocol that the division used to administer drugs. Prescriptions on each item were required, rather than a bulk distribution of medication.

Chairman Giunchigliani interrupted to ask if chemotherapy was considered a pharmaceutical and if so, did the division bill accordingly. Dr. D’Amico confirmed chemotherapy was a pharmaceutical, but it was not billed as a prescription drug because it was administered in a hospital setting.
A prescription program was usually written for chemotherapy treatment and those drugs were provided within a hospital by nursing staff. He also mentioned usage of those drugs was tracked differently than were other prescription drugs.

Chairman Giunchigliani next asked how dialysis was tracked. Dr. D’Amico explained dialysis was contracted out to an outside company and could be tracked more specifically by date and method. Chairman Giunchigliani asked if Correctional Medical Services (CMS) was billed for the costs of those services.

Mr. Nowak relayed the division did not bill CMS for chemotherapy services with respect to inmates from ESP. Chairman Giunchigliani wondered why CMS was not billed for those services. Mr. Nowak explained the CMS contract, in effect until June 1999, required the DOP obligation to extend to the cost prescription drugs including chemotherapy. Chairman Giunchigliani asked if the re-negotiation of the contract would retain that stipulation and if it would change the terms of the expenditure cap. Mr. Nowak said the Request-For-Proposal (RFP) which was awaiting response addressed both provisions. First, the new contract would shift the burden of responsibility of providing prescription drugs to the would-be vendor. Secondly, he indicated the private corporation’s liability with regard to medical costs would not be capped.

Chairman Giunchigliani noted the new privatization contract was a component of the current RFP, of which CMS was one of three possible vendors. She asked Mr. Bayer to confirm his previous testimony stating the department had not previously segregated health care costs and the department could not track other costs. She asked if part of his plan was to begin tracking all health related costs to better understand the breakdown of the total actual prison medical care costs.

Repeating his previous response, Mr. Bayer said he would retrieve those figures, even though they would not be 100 percent accurate. He argued it was impossible to totally segregate mental health costs from regular medical costs. Chairman Giunchigliani felt Mr. Bayer’s argument did not support his claim that privatization would save the department 8 percent. She could not understand how cost savings could be realized if the department could not explain the primary determinants of total medical costs.

In reply, Mr. Bayer explained the department’s budget request was founded upon a number, which it felt adequate to sustain department operations in addition to funds for enhancements. The bid amount for privatization was based upon the budget request made by the department. Mr. Bayer contended the private vendor should be able to provide medical services below the cost to the department itself. If the private vendor was able to bid 8 percent less than the department’s budget request, he believed savings would consequently follow. Moreover, he told committee members detailing the specific determinants of total medical costs was unnecessary if the private vendor bid below the department’s budget request because savings would already be apparent.

Chairman Giunchigliani speculated if the private vendor’s bid would be sufficient to maintain the quality operation of prison medical care or if the vendor would increase its charges once the bid had been awarded. She cited past testimony that shed light on the efforts of division staff to save several million dollars.

Dr. D’Amico relayed the prison medical care system had been managed in two ways. In one instance, the system was replete with an excellently trained staff but was fiscally irresponsible. Dr. D’Amico stated he had been charged to develop a fiscally sound organization that was more accountable than it had been in the past. As a result, in the past year the staff accustomed itself to a new order of operations.

Prior to an audit review of the division, Dr. D’Amico said he and some members of the staff evaluated problem areas and designed ways to correct them. One of the largest problem areas was the division’s system for distributing prescription drugs. Thus a strict formulary of drug usage and more rigid restrictions concerning "Top 20" drugs and their costs were implemented. In that area, the most costly drugs were either psychiatric drugs or Human Immunodeficiency Virus (HIV) drugs. In fact, reductions in costs, totaling $20,000 per month, have been documented.

Dr. D’Amico said the division had also been able to cut costs in the area of outside medical expenditures. He explained by establishing better relationships with local hospitals and physicians and by reducing unnecessary, elective medical procedures, tremendous cost savings were achieved. Additionally,
Dr. D’Amico said prison medical care was reorganized into a system liken to managed care. He then noted accountability measures for each prison medical facility including the Regional Medical Facility (RMF) could be produced.
Dr. D’Amico concluded as a result of those initial efforts to trim costs, savings were achieved and would increase in time.

Chairman Giunchigliani commended the division’s initiative and willingness to augment their operations in order to rectify a problem within the division. Chagrined, she felt DOP’s decision to privatize medical services after an obvious effort had been made by employees to correct the division’s problems was sending a negative message to other state employees. Grappling with the issue, Chairman Giunchigliani felt that if greater efficiency was the goal, a more reasonable approach would be to give employees the opportunity to develop an alternate proposal to privatization.

First, Mr. Bayer stated from a budget perspective, he truly believed medical services would be provided more cost efficiently by private corporations due to an incentive that did not operate in the public sector. He remarked in regard to any other budget request, such as employee salary increases, fiscal issues were paramount to other issues in the discussion. Second, Mr. Bayer reminded committee members, publicly employed physicians and medical staff incurred a greater liability to the state because of various grievances. Those grievances obstructed the efficient operation of the system. Additionally, he felt a private company could better isolate and track the determinants of medical costs and could better answer the questions from committee members. Overall, he felt, from a budget perspective, privatization was the best solution. Obviously, if fiscal savings could not be proven there would be no cause to privatize the system.

Following Mr. Bayer’s comments, Mr. Price asked if Mr. Bayer was familiar with the Total Quality Management (TQM) process which utilized employee input to more efficiently manage corporate units. Mr. Bayer replied affirmatively. Appreciative of Mr. Bayer’s past responses to written questions, Mr. Price directed Dr. D’Amico to submit a copy of his original notes concerning the "D’Amico 5-year Plan." Reminding those testifying that they were under oath, Mr. Price asked Dr. D’Amico if there was an unofficial outline of his plan.
Dr. D’Amico replied a copy would be sent to Mr. Price that afternoon.

Dr. D’Amico then took a moment to explain that a director’s analysis of a situation required long run planning. The "D’Amico 5-year Plan" was compilation of Dr. D’Amico’s visions for the department in the long run. For instance, he felt a medical immediate care unit was a necessary creation. Also, he felt monthly reports were needed to assess division accountability. He further elaborated that in order to remove the veil of complacency away from state employees, he met with division staff and warned them of the consequences of continued division inefficiencies. At that meeting,
Dr. D’Amico explained he verbally relayed his 5-year plan to employees. He felt his staff responded excellently to his warnings and the division’s operations had subsequently improved.

During public testimony at the Legislative Commission’s Budget Subcommittee meeting in January, employee references to Dr. D’Amico’s 5-year Plan referred only to the verbal directions he had given employees during his staff meeting. At that point in time, a documented plan did not exist. Since then, Dr. D’Amico wrote out the main points of his plan in an official format and it was supplied to Mr. Bayer.

Mr. Price stated he was interested in the original notes from Dr. D’Amico, not the revised document provided to Mr. Bayer. Mr. Price explained he desired
Dr. D’Amico to provide, in its original form, the outline for the future management of DOP medical care. Lacking experience in the budgetary process, Dr D’Amico explained some components of his original plan had dramatic impacts upon the budget.

When approached with the existence of a 5-year plan, he had requested a document detailing the plan. When he did receive documentation of the 5-year plan, it post-dated the testimony employees had given. Mr. Bayer then stated he would like to provide committee members with a copy of the 5-year plan that he had received. He related it was a one-page hand written document that contained general notes for each year of the plan. He argued that hand written document not a 5-year plan was the basis for the public testimony in January.

Mr. Bayer asserted the development of that document was misleading and unfair because only e few staff members knew of its existence. Furthermore, He declared the medical employees who he had trusted had inappropriately "bootlegged" that information out of DOP.

Mr. Price remarked that during 150-year history of the state former directors and agency heads had learned the logic behind working with legislators as well the logic behind cooperating with the Office of the Governor. Corroborating Mr. Arberry’s previous remarks, Mr. Price felt there was a benefit to providing legislators with information concerning the full array of policy solutions related to the problem at hand.

Chairman Giunchigliani also spoke to the issue of public testimony of the 5-year plan during the January budget overview. She reminded committee members and Dr. D’Amico that she had requested a formalized version of the plan and he had replied that though it had not been completed at that time, it was in the process of being developed. Next, she felt Mr. Bayer had focused too much on whether or not he approved of the plan’s ideas and concepts, instead of concentrating on the fact that staff had motivated themselves to improve division operations. She then articulated the issue concerning the written versus the formalized version of the plan was not pertinent to the discussion either. Either way both documents, the original and the formalized, were information she had not been able to receive from the department. Additionally, she suggested Mr. Bayer might work more consistently with his employees to break the cycle of rumors floating through his department.

Mr. Bayer told committee members he had been unaware of existence of any
5-year plan at the time of the department’s budget overview during the Legislative Commission’s Budget Subcommittee meeting in January. He then defended his reputation as a director who had consistently worked with legislators during the budget process. He explained he had submitted all of the information available to him to committee members. He had not attempted to conceal documents or delay the process. He reiterated the formalized plan had been developed after the budget overview and had not been made available to him so that he could submit it to committee members. He insisted any documentation of a formal 5-year plan had been created after it had been the subject of public testimony at that hearing.

Dr. D’Amico responded to Mr. Bayer’s remarks. First, when he had been hired for the position of Medical Director, he did not have the understanding that he was to prepare the prison medical care system for privatization. He believed his objectives were to run the system efficiently and to trim costs. In fact, he noted he had introduced the concept of privatization to the state fifteen years earlier and believed that it was a sound policy. He even mentioned that had state officials accepted his plan to privatize the division year’s ago, the state would not have encountered the Taylor vs. Wolfe lawsuit.

Second, he admitted the prison medical system had been a system with a veil of complacency surrounding its employees and had provided bad medical care resulting in litigation. However, he felt the division had learned how to avoid those problems and improve the quality of care provided.

Third, he remarked the division had developed a system liken to managed care in order to trim costs. Even though the division continued to run on past performance indicators rather than future indicators, Dr. D’Amico hoped the division would continue to improve and evolve into more of a managed care operation.

Fourth, Dr. D’Amico recognized the merits of privatizing prison medical care. In fact, he could see no reason why privatization would not be able to solve. Regardless, the employees of the state were developing equally efficient methods, similar to a system of managed care, that would offer considerable savings. State employees were not given the option to compete with private vendors for a bid price.

Dr. D’Amico then admitted state employees could not match the proposed budget for a private vendor within two years, however he concluded he could continue to produce cost savings in a managed care atmosphere with little problem.

Chairman Giunchigliani commended Dr. D’Amico for his honesty and forthrightness. She felt his public and private sector experience were invaluable. She also criticized the department for its lack of adequate planning. Dr. D’Amico’s plan may not have been the panacea, but it was an embryonic strategy that should continue to move forward. She felt constancy in a strategic or long term plan was positive, but short-term objectives should be a consideration as well.

Next, Chairman Giunchigliani voiced concern that DOP’s limited experience with privatized contractor’s allowed for minimal collection of information by the department on inmate health care costs. The lack of data made it difficult to determine if contracting out for inmate health care was a cost-effective alternative. She contended once DOP developed data collection methods, which provided sufficient reliable information, privatization would be considered for review.

Finally, before addressing the individual budget requests in the department, Chairman Giunchigliani expressed frustration with the department and exclaimed committee members were constantly being boxed into adopting a budget proposal without having adequate information to assess what alternatives would actually be best for the state.

Delving into the specific budget requests in Prison Medical Care, Budget Account 3706, Chairman Giunchigliani asked if Dr. D’Amico had been involved with the formulation of the budget. Dr. D’Amico responded that he had been consulted during the budget process, however he had not played a role in the revised budget for privatization.

Chairman Giunchigliani then asked if a mental health unit existed at ESP.
Dr. D’Amico explained a medical unit was comprised of only one psychiatrist at ESP. Chairman Giunchigliani thought the CMS contract stipulated the provision of a mental health unit at ESP. Dr. D’Amico stated although he was unfamiliar with the specifics of the contract, the division attempted to support mental health care at ESP in every way possible. The Chair surmised where CMS had not provided mental health care, as the contract stipulated, the state had absorbed those costs unnecessarily and thus directly impacted the budget. She then asked Mr. Bayer if CMS was exempt from providing mental health care.

Mr. Bayer said CMS was not exempt in its contract with the state from serving the mental health needs of ESP inmates. He then asked Dr. Donald Molde, Mental Health Director for DOP, to speak on the issue of the mental health care at ESP.

Dr. Molde said ESP had never been a full-service psychiatric institution because it was not intended to be so in the contract. The contract only required an Extended Care Unit (ECU) or a transitional living space to be put in place for mentally ill inmates.

Next, when the state had realized that it couldn’t recruit staff to work in Ely, Chairman Giunchigliani wondered who negotiated the medical privatization contract for ESP. Mr. Bayer said the department’s first attempt to contract privatization resulted from the coordinated efforts of himself, the medical director at the time, the Office of the Attorney General, Dr. Molde, and the Risk Management Division. Chairman Giunchigliani asked how quickly the contract was developed. Mr. Bayer said the RFP was developed in January 1995 and bids were received. Almost 11 months later, the contract was developed and implemented. Chairman Giunchigliani noted the CMS contract was up for re-negotiation. She was concerned the privatization contract would be developed before the issue had been thoroughly analyzed. Furthermore, she did not see efficiencies resulting from an unfulfilled contract where the state was forced to pay for shortfalls in contracted service. She also felt staffing patterns and cost effects from high standards of care mitigated the benefits of privatization.

As Mr. Bayer recalled the submission of the last RFP occurred during the Taylor vs. Wolfe litigation. Because federal Courts believed RMF had the capacity to care for Nevada’s maximum custody inmates, the privatization contract did not disrupt the precedent set by the courts and continued referring inmates to RMF for medical care.

Chairman Giunchigliani then asked if CMS had taken control of the medical unit at ESP prior to the decision in Taylor vs. Wolfe. He answered the RFP had been submitted during the course of the litigation. He then reiterated that RMF had the staff and the security to handle any inmate from ESP with mental health problems. Chairman Giunchigliani agreed the facility could handle maximum custody inmates, but she argued that it did so at cost to the state, not CMS. CMS did not reimburse the state fully for care given to ESP inmates at RMF. Thus, she saw no benefit to the state from privatizing medical services at ESP.

Foremost, Mr. Bayer pointed out the privatization contract for medical service at ESP did require CMS to reimburse the state for services rendered to ESP inmates at RMF. Chairman Giunchigliani quickly asked how many inmates had been transferred to RMF since privatization of prison health care at ESP or any other facility for mental health care and how much had DOP billed CMS for those services. Mr. Bayer deferred response to Dr. Molde.

Dr. Molde could not respond to the specific number of inmates transferred from ESP to RMF since privatization, yet he admitted a few inmates who had needed mental health care services that ESP could not provide were transferred. Although Chairman Giunchigliani remarked the numbers were not as important as the issue itself, she believed accurate numbers were needed to make a quality comparison between the privatized and non-privatized systems. She asked Dr. Molde to collect statistics concerning the number of inmates transferred from ESP to a state operated medical facility and to break the statistics down by the type of care received.

Next, Chairman Giunchigliani asked how many registered nurses the ESP contract required. Mr. Nowak stated he would provide Chairman Giunchigliani with a staffing chart that indicated the contract’s staffing requirements. In addition to the staffing chart, Chairman Giunchigliani requested information on staffing vacancies and fines charged to CMS for not meeting its contractual obligations.

Mr. Perkins turned to the issue of staffing vacancies under the present system and asked how far below the minimum staffing requirement DOP currently operated. Mr. Bayer said 289 out of 330 approximate full time employee positions had been filled. Mr. Perkins then asked what savings would be realized if the remaining 41 positions were eliminated. Mr. Nowak recalled from the most current budgetary report, vacancy savings year-to-date were $614,000. That number reflected the cumulative year-to-date pattern of vacancy, which at certain times could have higher or lower than the current vacancy level. Mr. Perkins noted the 41 vacant positions were 12 percent to 13 percent below what had been authorized for staffing.

In reply, Mr. Bayer argued vacancy savings were built into the budget and anticipated. Also elimination of those positions was a poor idea because a vacancy in one area might be an area the department was desperately trying to fill. Moreover, spending in another budget category would offset those savings due to overtime salaries.

Mr. Nowak also added vacancy savings were not unusual and he confirmed those vacancy savings were offset because the department filled vacancies, especially critical coverage areas like nursing, with contract nursing staff.

Dr. D’Amico commented that although the division had been allotted funds to hire more physicians and specialized staff, the most critical area in terms of staffing needs was in nursing. Even in the area of psychiatry, Dr. D’Amico felt the division had no immediate need for an increase in physicians, but an increase nursing staff was in demand. More important, the total number of new positions recommended in The Executive Budget did not need to be filled until the opening of CCSP.

Mr. Perkins articulated the division was already 41 positions below what had been authorized. If privatization was expected to realize a $5 million savings over the biennium, he believed similar cost savings could also be realized from reducing the number of authorized positions.

Dr. D’Amico noted that only 12 positions critically needed to be filled in order to maintain operations.

Chairman Giunchigliani clarified the 12 critical positions were taken from the total 140 positions that had already been counted in the division’s vacancy savings.

Mr. Nowak explained the authorized number of full-time employees for the medical division was 319. The difference between the number of authorized positions and the number of positions, which had already been filled, amounted to 29 vacancies. Chairman Giunchigliani asked Dr. D’Amico if he believed only 12 out of the 29 positions needed to be filled. Dr. D’Amico repeated the division desperately needed to fill 12 positions over the next six months.

Chairman Giunchigliani then asked if the division’s expenses for vacancy savings were budgeted at $835,120, had been based on those 29 vacant positions. Mr. Nowak replied affirmatively. However, he said nursing agency usage and overtime offset total vacancy savings.

Dr. D’Amico related the division was requiring each facility to provide accountable documentation of overtime costs and staffing of nurses from agencies. Also the division had recently realigned its method of staffing prison medical facilities in order to meet the expectations of the department.

Next, Mr. Bayer referred to a report, which compared the salary of a prison medical employee to actual earnings, in order to illustrate the significant effect of overtime on employee earnings. For instance, an employee salaried at $33,400 per year had actually earned $49,100 in the last year due to overtime usage. Mr. Bayer concluded vacant positions dramatically increased overtime costs. In fact if overtime usage could be minimized, the division could save at least $200,000.

In past Dr. D’Amico argued, the division had experienced difficulty in hiring qualified nurses within an optimal timeframe. Lags in the employment process turned applicants away from the division. Dr. D'Amico believed a substantial effort must be made to increase the community’s confidence in the department’s ability to manage human resources and to acquire the necessary trained staff.

Following Dr. D'Amico's comments Chairman Giunchigliani cited an average timeframe of 53 days to process prospective employee applications. She asked if Mr. Bayer required his approval for all new hires. Mr. Bayer stated all new hires until January 01, 1999, had been processed through the Office of the Director first. He explained past problems in hiring, such as frequently changing job responsibilities, motivated him to maintain tighter oversight in human resources. Once, he was able to achieve a confidence level in the division’s ability to hire staff appropriately, Mr. Bayer said he loosened that requirement. Additionally, Mr. Bayer noted prospective applications processed through his office had a 24-hour turnover.

Chairman Giunchigliani asked if Mr. Bayer had required approval of all prospective medical applicants during his entire tenure as director. More specifically, she asked why it took the department 52 to 116 days to hire a correctional nurse. Mr. Bayer explained those figures indicated the time it took for an applicant to be interviewed to the time the person was hired. Furthermore, he argued the bottleneck or the lag had not occurred in his office.

Next, Chairman Giunchigliani turned her attention to the issue of the Consumer Price Index (CPI) submitted by Preferred Provider Organizations (PPO’s). She wondered if the percentage determination of an adjustment could be re-calculated to include inmate driven costs in order to determine if potential savings were visible. Mr. Nowak replied that re-calculation would be possible. Chairman Giunchigliani felt it would be helpful as differences existed between alternate PPO's and their respectively determined CPI.

Pointing out a change in TPA’s, Chairman Giunchigliani asked if outside medical costs and problems tracking billings continued to plague the division.
Mr. Nowak felt the division’s confidence in their billings had improved. Billings were more timely and the numbers, reflecting the level of outside medical cost, were ameliorated. The Chair asked that those figures be included as part of the division’s performance indicators in the next budget.

The Chair then asked what types of mechanisms were created to limit access to outside medical care. Initially, Dr. D’Amico replied all patient consultations had been reviewed and approved by him. However, the process had shifted away from a micro-managed system to a system of self-sufficient facilities that could evaluate outside consultations. Appropriately, he noted the way by which the division brought consulting doctors on-site diminished outside medical costs. With six to seven consulting physicians to be brought on-site per month, relations with Carson-Tahoe Hospital had dramatically improved. Except in the case of costly procedures or medications, those consultations did not require approval by Dr. D’Amico. Furthermore he said in the southern part of the state, a four-bed ward in the University Medical Center in Las Vegas had been constructed to gauge hospital visits and consultations. This allowed better control over consulting physicians in a more secure facility.

Chairman Giunchigliani then asked if the division monitored outside medical care through contracted rates. Dr. D’Amico replied affirmatively and commended Carson Tahoe Hospital for their cooperation and their assistance.

The last issue in this budget account, Chairman Giunchigliani felt was the diversion of maximum custody inmates to the medium custody RMF facility. Mr. Bayer explained RMF was designed for all inmate classifications, including close custody inmates. Yet, Chairman Giunchigliani felt that by diverting inmates from ESP, which she felt should have been part of CMS’s contract responsibility, a higher level of care and security was required at the facility, thereby impacting the budget. Even though Mr. Bayer felt RMF was designed for that purpose, Chairman Giunchigliani insisted that when RMF serviced a greater number of close custody inmates, the state was forced to absorb costs derived from more intensive security and staff measures. More importantly, the state covered expenses for which CMS should have been responsible.

Regardless of whether close custody inmates were sent to RMF, Mr. Bayer contended staffing and security measures, in place at RMF, would remain unaltered. He repeated the facility had been designed and staffed at a level that could handle all inmate classifications. If contracting for privatization was successful, the private company would manage RMF so that billing questions would be eliminated. DOP would continue to staff only the security component to RMF.

Chairman Giunchigliani criticized DOP for what she felt was a poor job of monitoring the back-charges accrued by CMS when they diverted inmates to RMF. Mr. Bayer disagreed and felt CMS had not been diverting inmates, but that RMF had been used as intended.

Chairman Giunchigliani then remarked that CMS did not use the hospital at Ely but diverted even those inmates who had required simple medical care, to RMF. Although, Mr. Bayer felt that accusation was false, he pledged to investigate the issue further. Even if that was the case, he argued the hospital at Ely was not equipped to handle many medical problems. However, Chairman Giunchigliani felt problems like broken wrists or hips could be adequately dealt with at the medical facility in Ely. If problems such as those had been diverted to RMF, she emphasized the state had been subsidizing CMS for services for which the state had already contracted to pay.

Mr. Bayer reminded Chairman Giunchigliani a spending cap would not be included in the new contract. Currently, if CMS went over the $300,000 spending cap annually, he felt the state should utilize the RMF facility to realize overall savings. Once, the private vendor had unlimited liability they would be responsible for all costs regardless of the facility used. Chairman Giunchigliani noted those assumptions were based on the successful completion of a privatization contract for total prison medical services.

As the hearing continued, Dr. D’Amico explained the $12 million RMF facility had lacked accountability. Consequently certain mechanisms were put in place to track the facilities users, its expenses, the services rendered there, and to predict future needs. Then Chairman Giunchigliani expressed appreciation for Dr. D’Amico’s effort to increase accountability within the prison medical care system.

Next, Chairman Giunchigliani returned to the re-negotiation of the CMS contract. The CMS contract with ESP would still be up for negotiation if committee members failed to approve total privatization. Mr. Bayer explained the contract was being bid in two distinct ways. One bid was being submitted for the privatization of the entire system, whereas a second bid was being submitted for solely the ESP portion. There would be no spending cap in either bid.

Based on what private vendors had budgeted, Chairman Giunchigliani pondered how the state’s budget would be impacted. She cited the private vendor’s recommendation for $2,064.66 per inmate in 2000 and $2,589.45 in 2001 and asked if those projections would remain static given the fact the removal of a spending cap would drive a private companies costs upward. Mr. Nowak replied he was unsure how the state’s budget would be impacted however he would research the issue more thoroughly and return to committee members with an answer at a later date.

Corroborating previous remarks made by Senator Coffin concerning indemnification, Chairman Giunchigliani, too, believed long run cost savings could be captured from indemnification and she suggested that Mr. Bayer work with Dr. D’Amico to explore the plausibility of indemnification further.
Dr. D’Amico replied the division would be studying indemnification with Mr. Bayer to assess cost-efficiency.

For further clarification, Mr. Price then asked if DOP had furnished the total costs for inmate transfers from ESP to RMF or other state operated medical facilities. Referring to past transfers, Mr. Price told Mr. Bayer he believed some of those medical procedures should have been handled at the medical facility at Ely rather than RMF. In regard to transfer costs, Mr. Price wondered if transportation or ambulance expenses and expenses related to providing security during the inmate’s transfer had been included in the total transfer calculation.

Dr. D’Amico explained the new accountability mechanisms employed at RMF, calculated those costs and compared the costs of using outside medical care versus using physicians on-site for procedures such as chemotherapy. Each facility had been instructed to track all costs, including the costs associated with inmate transportation.

In regard to the viability of the medical facility at Ely, Dr. D’Amico related staffing difficulties had precluded it from full operational capacity. Urgency and fear of liability, in some case had also required the transfer of inmates who would have otherwise been treated at Ely. Dr. D’Amico thought Ely had improved its relationship with local physicians and was able to handle difficult cases. Still heavy surgical procedures were treated at RMF due to the lack of infirmary capability at Ely.

Additionally, Mr. Nowak clarified the internal tracking of ESP inmates who had been transferred to facilities in Carson City or southern Nevada did not include calculations of outside costs related to ambulatory expenses or University Medical Center expenses. Those expenses required an entirely different method of accounting.

Mr. Price then reminded Mr. Nowak that for the purposes of the money committees, information that tracked such outside costs would be appropriate in determining the division’s actual need.

Chairman Giunchigliani also thought, as the state was liable for those outside medical costs under the current contract, those statistics should be isolated from the total cost figures.

Closing the hearing on the Prison Medical Care Budget Account, Chairman Giunchigliani commended Dr. D’Amico and his staff for their honesty. She hoped after the confusion over the 5-year Plan, no one would feel they had been retaliated against because notes had been written instead of typed. She hoped employees would continue to work with their supervisors to develop innovative and efficient solutions to the department’s difficulties.

BUDGET ACCOUNT 3715, PAGE PRISONS 22

First, Chairman Giunchigliani probed the projected costs for the proposed mothballing of the SNCC facility. She asked if the $586,891 cost projection had been reviewed by PWB to determine the projection’s accuracy. She then repeated Mr. Perkins suggestion that an itemized list of the property’s assets be made available for leasing purposes.

Ms. Johnson responded the mothball projection could be re-evaluated. Nevertheless, she explained it represented two positions, a heat plant operator and an electrician, which were needed to maintain the facility. Other maintenance costs related to pest control contracts were also included.

Chairman Giunchigliani thought only $371,000 out of the total requested $586,891 were related to utility costs. Again, she asked if the cost projection had been evaluated by PWB. She also inquired how the mothball procedure had been carried out at LCC.

Mr. Bayer explained the high utility costs were related to a guaranteed minimum rate, offered to the utility corporation, as part of the prison’s development. He then deferred response to Assistant Director of DOP, John Slansky.

Mr. Slansky explained when LCC was mothballed it had been a brand new institution and DOP had made commitments to Southwest Gas and to Sierra Pacific Power Company to use their service for the installation of gas lines and power substation. Continued use of a base unit of power and gas service was thus guaranteed. Mr. Slansky stated he was uncertain as to how the service agreement had been designed for SNCC, but he said the agreement could be clarified by PWB. Additionally, he felt SNCC could receive a utility contract similar to that which LCC had received.

Chairman Giunchigliani then requested the actual numbers, which would be utilized in such an agreement, in order to close the budget. Regardless of the mothball project, she was curious to see what rates the utilities companies charged.

Next, Mr. Perkins commented the ratio of disciplinarians to inmates for the SNCC was 1.56. In FY 1998 the number of incidents in which an inmate had been disciplined for misconduct was 941and it was projected to drop to 880 by 2001. He wondered what created the disciplinarian to inmate ratio and why there was a disparity between institutions.

To answer Mr. Perkin’s question, Mr. Bayer stated the performance indictor depicting the number of incidents an inmate was disciplined was an actual figure. The figure depended upon a plethora of factors such as facility size, classification levels present, concentration of inmates per cellblock, visible security, or whether the facility housed mentally impaired inmates. For instance, Mr. Bayer believed that because SNCC housed a greater number of mentally impaired inmates on psychotropic medications, the number of incidents of misconduct were greater than in other institutions. In short, Mr. Bayer repeated because each facility was unique, a targeted ratio was not used. The figures only represented actual numbers observed by management.

Mr. Perkins responded he did not believe the ratio should be used as a performance indicator. Performance indicators were objective goals that the department attempted to reach. He was concerned the number of incidents in which an inmate was disciplined for misconduct predicted a downward trend, yet the number of disciplinarians per inmate was rising. He did not feel those figures provided an objective or goal with which committee members could measure the efficiency of the institution.

Chairman Giunchigliani supported Mr. Perkin’s comment and she cited previous concerns about performance indicators arguing that legislators had suggested the revision of rules so that they were more consistently applied. Descriptors defining disciplinary reactions and penalties would be more appropriate measures of the department’s efficiencies, rather than the actual number of incidents occurring.

Mr. Bayer argued with almost 10,000 inmates, statistics were complex and were difficult to break out by incident. Redirecting her question Chairman Giunchigliani asked how the department evaluated its wardens and their operation of the institutions. She was specifically concerned with how staff was hired, how incidents of misconduct were handled, and how patterns of problem behavior were studied and treated. Those factors impacted the operation of a facility by driving both the types of rehabilitation programs created and the areas where staff was directed. Moreover, the issue concerning appropriate performance indicators reflected previous concerns over accreditation. She felt those issues could capture the activities of a facility, allowing for a more accurate understanding of where funds should be concentrated.

Referring to the 1993 Legislative Session Senator O’Donnell reminded committee members the first items cut from the budget were items within the DOP and Mental Health budgets. He felt this occurred because the individuals affected by such budget cuts were not voting members of society. He argued that during budget reviews of budgets, which had been downsized, committee members should treat those departments with more respect as they operated with a minimal amount of resources in the first place. In fact, after the budget cuts in 1993, the DOP had never been funded back to its normal level. Therefore, Senator O'Donnell warned committee members to act with caution and to be cognizant of the efforts of the department’s staff as they performed their duties with almost no reward.

Chairman Giunchigliani submitted committee members had not attempted in any way to cut DOP’s budget, but had acted to ensure that budget accounts were funded properly. She also relayed the importance of ensuring that safety and bed space provided for the most violent criminals was commensurate with the public’s comfort level. In addition, she argued the first budget area cut in the 1993 Legislative Session concerned education, followed by mental health.

BUDGET ACCOUNT 3716, PAGE PRISONS 27

Chairman Giunchigliani’s main concern in the Warm Springs Correctional Center (WSCC) budget account related to the number of correctional officers employed.

Mr. Bayer replied WSCC employed 107.2 positions. Correctional staff employed 93.2 positions, including lieutenants and the warden. As of February 02, 1999, 100 out 107 positions had been filled.

Chairman Giunchigliani next asked how long the DOP’s new-hire training program lasted. Mr. Bayer replied, as required by statute, correctional officers underwent 160 hours of training. Following the training period, the correctional officer was employed as a probationary trainee for the period of one year. In that time, the employee shifted from position to position in order to work with more experienced staff in each of the areas in the prison. After one year, the employee was then classified as a Correctional Officer I and a permanent employee.

Chairman Giunchigliani asked how hiring and training requirements were developed. She also wondered what type of background screening had taken place preceding the hiring process. Mr. Bayer answered the Department of Personnel was in charge of the hiring function. He also explained NCIS background checks were run to eliminate candidates with previous felonies, arrests, or convictions.

Highlighting a specific incidence, Chairman Giunchigliani interrupted to inquire if a correctional officer with a felony charge on record had been hired. Mr. Bayer was unaware of that instance. He admitted some correctional officer’s had had previous arrests or difficulties with a personnel law, however he did not know of any felonies.

If that was the case, the Chair wondered if the Department of Personnel would have referred a prospective applicant, who was on probation, to DOP for a correctional officer position. Mr. Bayer explained the Department of Personnel issued a general test to screen applicants and also required applicants to meet other requirements. If the applicant had been able to meet all of the Department of Personnel's qualifications and passed the test, they were then referred to DOP for an interview. He indicated a background check, a random drug test, a physical examination, and a fitness examination for prospective applicants was only completed after the applicant had been referred to DOP. The entire process required several weeks to process due to coordinating physicals with physicians.

Chairman Giunchigliani wondered if the physical examination had been recently added to DOP’s hiring protocol. Mr. Bayer answered the physical had always been a requirement. He elaborated the physical exam tested an applicants physical ability versus their overall health status. Although a more rigorous physical test was currently used than had been used in the past, Mr. Bayer noted no gender or age biases affected the outcome of the tests. He also noted the tougher physical requirements had been promulgated by Peace Officers Standards and Training (POST), effective November 1997.

Chairman Giunchigliani questioned whether those new requirements impeded the selection of quality candidates or aided the DOP’s ability to adequately staff its facilities. Mr. Bayer responded the new standards weeded out candidates who may have been hired under the old physical standards. On the other hand, the new correctional officers hired under the new testing standards were in much better physical shape. He felt this explained why the department had experienced a decrease in costs concerning work-related injuries.

Returning to the issue of background checks, Chairman Giunchigliani felt they should be performed before the candidate was referred to the department. In reply, Mr. Bayer stated additional staff and equipment would be required for the Department of Personnel to carry out background checks. Chairman Giunchigliani emphasized a correctional officer should be held to a higher standard and wanted to ensure that no officer who had been hired had a previous record of criminal misconduct.

Out of the 89 positions at WSCC, the Chair then wondered how many were trainees. Mr. Bayer could not provide an answer at the time. Chairman Giunchigliani thought if the facility had an overwhelming number of trainees, security at the facility might be compromised.

The Chair next called attention to the Residential Substance Abuse Treatment (RSAT) program and expressed concern over the lack of performance indicators. She wondered how the Therapeutic Community, authorized in 1998, had performed thus far. Mr. Bayer explained a series of performance indicators were being postponed until the first class of the program graduated in April 1999. Subsequently, Mr. Bayer felt only after long-term tracking, could the true success of the program be evaluated.

In terms of the program’s usage, Mr. Bayer said 15 percent of a random sample of inmates, collected from the entire prison system population, tested positive for drug use. Yet since the treatment program had been instituted none of the 85 participants, so far, had tested positive for drug use.

Next, Mr. Bayer explained how RSAT operated and how it would be evaluated. First, he noted the course of the program ran between 6 to 12 months and did not distinguish between the category of drug user. Furthermore, Mr. Bayer said program participants applied to the program, as dictated in statute, and were screened for suitability and given psychopathy tests to ensure they would benefit from the program. The factors currently tracked for an assessment of the program’s performance included:

• Treatment contractor program reports;
• The number of admissions, terminations, program completions;
• The number of participants in group session by type;
• The number of individual sessions by type and
• The number of participant treatment days as a ratio of the number of total possible days.

Additionally, the RSAT Director’s Quarterly Reports would make statistics available concerning participant’s monthly urinalysis results and disciplinary violation summaries.

Next, Chairman Giunchigliani asked what proportion of the number of inmates testing positive for drug use, had applied to participate in RSAT. Only serving 85 inmates, she felt that the program’s penetration rate was lower than expected and the $750,000 program cost expensive. She wondered if those inmates might be transferred to drug court instead. She also requested statistics, which illustrated how cost efficient RSAT was in terms of its penetration rate.

Mr. Bayer reminded the Chair the program was funded federally and by state matching funds. Therefore, the program was restricted to certain parameters concerning release dates and drug use. He also noted other substance abuse treatment programs were also in place within the system.

Chairman Giunchigliani first inquired why the contract monitor had been removed from SNWCF and wondered how the private vendor contract was supervised. In reply, Mr. Bayer explained a contract monitor, Lynn Emerson, had been in place since the opening of the facility, however she had been transferred to the CCSP facility as an Administrative Services Officer. DOP was searching for a new contract monitor for SNWCF who would be employed in a contract position rather than as state employee. Because of project delays at the Cold Creek facility, though, the department was in the unusual position of having a valuable employee who was as yet unable to perform her duties. Thus, the department retained Ms. Emerson on-site at SNWCF until a new monitor could be found.

If such was the case, Chairman Giunchigliani expected DOP to provide an inventory of the property’s assets, vacant positions, procedures, post-orders, and adjustments of medical co-pays. Mr. Bayer responded he would provide committee members with as much information as was available to him.

The Chair further inquired if penalties existed for the private vendor’s failure to provide contracted services. Mr. Bayer replied affirmatively. She then requested the department to provide information concerning the amount of penalties assessed to date.

Turning to the medical care provided to women inmates at the facility, she asked what type of physical exams CCA provided. Mr. Bayer deferred response to Dr. D’Amico. Chairman Giunchigliani quickly interjected to inquire how many vacancies SNWCF had at its facility. She related the per diem rate charged should be reduced if vacancies were visible. Mr. Bayer responded he would provide vacancy figures at a later time.

Dr. D’Amico then took up the issue of inmate physicals at SNWCF. He noted changes in CCA protocol and medical subcontracting had been made. Currently all physicals were performed by in-house former DOP physicians and CCA nurses.

As a result of those changes, he felt the experience was mixed. Intake evaluations had initially been confusing and had resulted in some minor problems. However, after evaluating inmates who had been transferred to Silver Springs Conservation Camp (SSCC) from SNWCF, Dr. D’Amico had uncovered faults in the CCA physical procedures, particularly involving improperly performed pap-smears and breast exams and improper documentation. He noted if at intake at SSCC, an inmate physical was revealed to have been performed improperly, the inmate was then transferred back to SNWCF and impacts on the costs to the state were documented. Consequently, the division billed CCA for any costs related to shortfalls in their performance of medical physicals. Though he noted an improvement, at least in the inmates coming to SSCC from SNWCF, yet he could not state confidently that the improvement was attributed to a tightening of CCA’s operation. He remarked the issue would be investigated further.

Following Dr. D’Amico, the Chair wondered if CCA employed a gynecologist. Dr. D'Amico explained a gynecologist had been contracted by CCA initially to complete physical exams, however that person had been terminated and he was unsure if CCA had hired a new gynecologist. Dr. D'Amico repeated he had only seen an inconsistent improvement in the performance of inmate physicals.

Chairman Giunchigliani asked in what timeframe the study of CCA’s medical procedure would be completed. Dr. D’Amico replied the study would be completed within the next 60 days.

Next, the Chair inquired to what extent CCA reimbursed the state for mental health care. Dr. D’Amico could not provide an answer. Chairman Giunchigliani then asked if DOP understood the mechanism CCA used to calculate mental health costs. Mr. Bayer replied that because CCA had unlimited medical liability, the department did not know how CCA calculated medical costs. If CCA could not provide adequate care for an inmate, they were responsible for finding a facility that could provide treatment.

Chairman Giunchigliani questioned how the classification system was designed, as she did not understand how an inmate was assigned to the conservation camp system. Specifically, she wondered how DOP insured the correct type of inmate was sent to a conservation camp like Silver Springs. Mr. Bayer explained that regardless, of the privatized management of SNWCF, the state maintained control over the classification process. He noted the department reviewed each inmate’s case before they were transferred to a conservation camp.

The Chair clarified the department had approved all inmate transfers including a pregnant inmate who had been transferred to SSCC to work. Mr. Bayer responded the division had not realized the inmate was pregnant when she was transferred to SSCC. Chairman Giunchigliani stated the transfer had occurred because proper testing measures had not been performed by CCA. Mr. Bayer added the department did not screen pap-smear tests for pregnancy.

Even Dr. D’Amico admitted one of the division’s problems was a failure to screen all female inmates for pregnancy. Private companies did not require a Pap smear to be performed either. Chairman Giunchigliani felt the performance of those tests were essential to the prediction of long-term costs. Dr. D’Amico repeated the tests, which had been performed, were completed improperly. Additionally, he had not been close enough to evaluate the issue fully.

Chairman Giunchigliani then suggested the division standardize the requirements for an intake physical, regardless of private versus public status. Thus when negotiating a contract with a private company, the division would have a better idea of future impacted costs, especially in such a case where state reassumed control of SNWCF. She requested the contract manager to provide information regarding quality assurance programs in place at SNWCF.

Taking issue with contract negotiations, Chairman Giunchigliani remarked the state needed to be aggressive in the initial phases of negotiation due to eventual impacts to the state’s budget.

Next, Chairman Giunchigliani referred to the American Correctional Association accreditation, which had not been granted to SNWCF until late in the year.
Mr. Bayer explained accreditation cycles and the opening of the facility had not coincided. For that reason the SNWCF was not accredited until later in the year. Chairman Giunchigliani asked if the department had a copy of the accreditation report itself. Mr. Bayer replied negatively, explaining a report had never been provided. Chairman Giunchigliani felt a copy of such a report would be useful especially in order to understand what criteria were evaluated.

The final issue in the SNWCF budget Chairman Giunchigliani reminded Mr. Bayer was the proposed transfer of inmates out of state or the 250-bed expansion. As the rate of increase in female inmates began to taper, she requested DOP to compile a list of all alternatives available.

Mr. Bayer pointed out the SNWCF facility was a multi-level custody facility.

Chairman Giunchigliani next inquired if debt incurred from the current contract would be re-negotiated if the expansion was approved. Mr. Bayer articulated the entire institution could be re-financed if the department so chose. He had encouraged CCA to use their money to finance the expansion so that there would be no capital outlay for the state. The issue, however, was complex and do no definite answer could be provided. Mr. Bayer was uncertain as to how CCA would ultimately react to the negotiation. Chairman Giunchigliani emphasized committee members needed a solid assessment of CCA’s decision as soon as possible.

The Chair returned to the topic of the proportion of the inmate population at SNWCF placed outside the facility into conservation camps or restitution facilities in order to divert the cell needs. She argued the issue needed further investigation.

The main question in the Northern Nevada Correctional Center (NNCC) budget was related to the repair of the control panel in Unit 7 as funded by E-850. Chairman Giunchigliani felt the project should be funded as a CIP instead of from the department’s budget. John Slansky answered funding for the control panel at Unit 7 at NNCC could come from the CIP. Because the existing control panel was not operating correctly, he felt replacement of the control panel was a critical need. However, Chairman Giunchigliani’s only concern was that the project should be included as a CIP.

First, Chairman Giunchigliani addressed the issue of the employee turnover rate. She felt the issue was a concern for all of the department’s institutions, not just NSP.

Second, the Chair asked if the department had coordinated a construction timetable with PWB for the sagebrush area. Mr. Slansky remarked the sagebrush area was in a section of he prison, which was constructed in 1925. The sagebrush area was directly under the warden’s office and through that area a network of utility infrastructures needed to be remodeled. Mr. Slansky explained those infrastructural units controlled the utilities for the cell house. The department’s plan was to empty the cell house once the CCSP facility had opened and to begin the remodel of the sagebrush area. Chairman Giunchigliani wondered how the plan would proceed should money for the project not be re-allocated. She articulated money for the sagebrush remodel had been set aside by the 1995 Legislature and was due for reversion June 30, 1999. She asked why the plan had not been implemented sooner. Mr. Slansky explained the project had not been initiated due to the department’s inability to transfer inmates; no other bed space was available at other facilities. Chairman Giunchigliani remarked the mothballed wing at LCC had been available and could have been used. Mr. Slansky admitted 84 cells were available for use, but the department had been unable to recruit enough staff to supervise the unit. Also, to complete the sagebrush remodel, 250 beds would have to be made available elsewhere and LCC did not have that capability anyway. Chairman Giunchigliani assumed the budget recommended those funds to be rolled over into the 2000 and 2001 biennium. Mr. Bayer replied affirmatively and for that reason he argued the completion of the CCSP facility was critical. Chairman Giunchigliani however interrupted to remind Mr. Bayer that the delay in the completion of CCSP was the department’s responsibility. The design had been constantly changed and as a result the project could be delayed even further than June 2000. Acknowledging the Chair’s comment, Mr. Bayer insisted that continually operating facilities at emergency capacity obstructed the completion of remodel and reconstruction projects.

Next, Chairman Giunchigliani asked how the department planned to employ NSP staff once the remodel project was underway. First, Mr. Slansky clarified the NSP was not overstaffed. Second, he remarked although the department had not decided how they would re-assign NSP staff, he imagined that during the time the remodel was underway, the department could catch up on training activities. Chairman Giunchigliani suggested Mr. Slansky develop a plan to utilize NSP personnel during the remodel.

Chairman Giunchigliani asked if a Bill Draft Request (BDR) had been submitted for the delay of the reversion of those project funds. Ms. Johnson believed the Budget office had submitted a BDR to have those funds extended. Chairman Giunchigliani followed to ask if those funds could be diverted until the opening of CCSP. Ms. Johnson did not believe those funds could be diverted because a large portion of the funds were related to start-up costs and advance purchases. Chairman Giunchigliani then requested a detailed list of the start-up costs.

The second major issue in the budget was the regional warden concept. Chairman Giunchigliani believed the purpose of the regional warden was to assist other wardens in the management of facilities in both the northern and southern parts of the state. She submitted the DOP director and the various deputy directors should perform the proposed responsibilities of the regional warden.

Mr. Bayer replied those functions were certainly a part of his job. However, the concept of a regional warden was directed towards alleviating stress caused by the growing prison population in the state. Chairman Giunchigliani asked if wardens were unclassified staff. Mr. Bayer replied negatively, the medical director was the only unclassified staff member. She then asked who evaluated the wardens. Mr. Bayer stated the assistant director of operations evaluated the wardens. The Chair clarified if concern was expressed about the operation of any of those institutions, the director’s office would be held accountable. Mr. Bayer replied that it did. Chairman Giunchigliani then concluded before DOP recommended a regional warden, the department should utilize personnel and employee relations to evaluate its prison managers.

Mr. Bayer contended he could not cover the breadth of Nevada’s prison system. He felt DOP had the thinnest administrative staff in the country. Chairman Giunchigliani wondered who would then monitor ESP when its warden was offsite. The two well-trained assistant wardens would assume supervisory controls when the warden was offsite. Still, Chairman Giunchigliani felt it was an issue for the Department of Personnel.

Next, she asked if the department recommended a 5 percent salary differential between the two individuals. Mr. Bayer replied affirmatively, the wardens had been receiving that differential already. Ms. Johnson added the wardens had received the salary differential during the 1999 fiscal year. Chairman Giunchigliani was surprised that DOP had started to compensate the wardens with the 5 percent salary differential before it had even been approved by the legislature. Ms. Johnson explained the request had been submitted to the Department of Administration very early on and it had been applied on a temporary basis. Chairman Giunchigliani was discontented that the legislature would have to assume blame then if committee members did not approve that allocation in the budget. She also felt the 5 percent income differential would come at the expense of other employees who were not receiving any kind of pay raise. Since the 5 percent figure was already built into the base of the budget it could be doubled unfairly.

Mr. Perkins remarked the structure of DOP should have the flexibility to implement measures, which would facilitate efficiency. Nevertheless, he did not feel the department provided the justification for regional wardens or additional assistant directors. At the level of management, in which a warden operates, oversight should decrease.

First, the Chair inquired why the facility needed two onsite bakers. Mr. Slansky explained the CCSP would be baking for the other southern institutions. Furthermore the population of the CCSP would be too great a burden for one baker to handle. The volume of work necessitated the commencement of bakery operations from 3:00 a.m. into the after noon hours. Mr. Slansky predicted overlapping shifts in order to keep up with the baking needs of the Southern Desert Correctional Facility (SDCC) and CCSP, which amounted to a population of over 3,000 inmates. Chairman Giunchigliani remarked the transfer of one baker from SDCC to CCSP left a gap and she inquired how that position would be filled. Mr. Bayer explained the two baker’s operating from CCSP would be baking for both southern facilities. Although he believed there would be cost-savings, he would provide committee members with numbers justifying the transfer of the positions.

Chairman Giunchigliani turned to the employee vacancy rate at ESP. She cited the turnover rate of 18.12 percent predicted for both years and she inquired what plan the department had in place to correct the turnover rate problem. Mr. Bayer said a 5 percent salary increase built into custody staff salary at ESP as one of the incentives to decrease employee turnover. Additionally, the department had advertised on the Internet, attended job fairs, changed hiring practices, and purchased interstate advertising. He mentioned some western states, like Arizona had hired a consultant to study the problem and they would share the results of their study as soon as they were available.

Chairman Giunchigliani asked if DOP performed exit interviews with staff before they left. As a result of exit interviews, Mr. Bayer believed most employees left the state prison system for higher paying jobs with county facilities. Also, the opening of new detention facilities in Las Vegas had also attracted a significant number of ESP employees. Mr. Bayer said he would provide a summary of the reasons employees left ESP.

Following Mr. Bayer, the Chair commented the vacancy shortage in combination with a tight work schedule without breaks and the remote rural area would contribute to employee burn out. She felt the department should be working to eliminate the difficult job conditions especially with overtime reliance. Mr. Bayer expressed his frustration with the problem itself. Neither did he want to overwork employees to ensure an adequate staffing level nor did he want to endanger public safety by understaffing the facility. He felt it was a catch-22 situation.

Besides a 5 percent pay increase for custody employees, Chairman Giunchigliani wondered what other incentives the department offered to keep employees at ESP. Mr. Bayer stated a personnel study had been conducted after the last legislative session. When the budget for the department had been devised the
5 percent pay increase reflected a number within the band of the recommended pay increase on a statewide level.

Chairman Giunchigliani turned next to the issue of the sale of ESP. Mr. Bayer articulated the issue concerning the sale of ESP had surfaced many times over the past few years. He felt two factors would influence the sale of ESP. First, to sell ESP, the property would have to be withdrawn from the federal property, on which it was built, and re-sold to the buyer of the institution. Chairman Giunchigliani asked what would occur if the federal government purchased ESP. Mr. Bayer believed ESP would continue to be used in the manner for which it was intended should the federal government purchase the facility.
A withdrawal would not be necessary in that case. The second factor influencing the sale of ESP was the gap in institutional coverage left by its sale; a plan for replacing the institution had to be developed first before a plan for sale could be implemented. Furthermore he argued ESP was one of the best operating maximum-security facilities in the country.

Still, Chairman Giunchigliani felt the department should solicit input from companies who had expressed interest in purchasing ESP. A decision would not necessarily follow, however she felt committee members needed as much information as could be gathered concerning the issue. The sale of ESP was still a policy decision for the legislature and the Governor to approve. The state had come to a crossroads: opportunities were available that would slip away if they were not seriously considered at that point. For example, ancillary problems that increased costs, such as long-term staff hiring problems at LCC and ESP, merited the study of the possible sale of ESP. In part those problems were the result of the state’s decision to locate prisons in rural areas as a means of economic development.

Mr. Bayer commented the legislature create a working group to study laws in relation to such as sale. For example, if the state sold ESP to a mid-western company who subsequently used the property to house maximum-security inmates from that region, a new criminal element would be introduced into the state. All the nuances of the law concerning prisons should be investigated fully before proceeding blindly with an offer of sale.

Chairman Giunchigliani agreed with Mr. Bayer and suggested that at some point in time, a group of legislators with expert knowledge in the area should convene to study the possibility.

Mr. Slansky added the ESP warden, Warden McDaniel, had conducted exit interviews with each staff member who had decided to leave ESP. Some of the issues addressed were the prison’s remote location, difficulty shopping and low pay. He did not believe a pattern existed, however he assured the Chair, DOP was concerned with the problem. Chairman Giunchigliani asked if the wardens from the other facilities in Nevada conducted a similar exit interview.
Mr. Slansky replied affirmatively.

Mr. Price quizzed if questions asked during the exit interviews had been standardized and documented in a filing system so that their cumulative result could be studied. Mr. Slansky related Warden McDaniel personally conducted exit interviews at ESP and thoroughly documented responses, but he was unable to disclose the items placed in personnel files. Mr. Price suggested a standardized form of exit interview be developed that ensured confidentiality. Chairman Giunchigliani supported Mr. Price’s suggestion and commented an employee who expected a future recommendation from the warden might respond more honestly if the exit interview was conducted through a more confidential mechanism, such as by mail.

Mr. Bayer stated a form was completed and signed at the personnel office in addition to other exit paperwork. He felt reasons for discontinuing employ at ESP could be reconstructed from that paperwork in the former employee’s personnel file. Chairman Giunchigliani was surprised the signed exit interview was placed in the personnel file. Therefore, Mr. Bayer explained for litigation or rehire purposes it was necessary for the department to understand why an individual left employment with DOP previously. Chairman Giunchigliani felt the issue should be pursued in another subcommittee.

Then the Chair quickly reminded Mr. Bayer to detail a list of duties he would delegate to the regional warden should the concept be approved.

As issues concerning CCSP had been adequately addressed in previous budget accounts, Chairman Giunchigliani noted additional informational requests concerning the CCSP budget would be transmitted in writing. She also reminded Mr. Bayer to pursue all aspects of the litigation to inform committee members who was suing whom and for what purposes.

Again, the Chair expressed concern over high employee turnover rates at LCC. Additionally, she wondered when the housing unit was expected to open.
Mr. Slansky indicated the delayed opening of the housing unit was directly tied to staffing difficulty. A significant number of new officers at LCC were currently being trained and he hoped the new unit would be opened in the near future. The vacancy rate at LCC was declining however, Mr. Slansky remarked he was uncertain as to how many staffing vacancies were left at LCC. He also noted the LCC warden was actively recruiting at the Fallon Naval Base as well as locally within Perishing County.

According to Chairman Giunchigliani, the employee vacancy at LCC consisted of 38 positions. Mr. Slansky deferred to Mr. Bayer. Mr. Bayer explained 233 positions out of 264 positions total had been filled. In terms of custody positions only 189 positions out of 215 positions had been filled.

Next, Chairman Giunchigliani called attention to the $6 Remote Area Differential (RAD) which had been recommended in the budget. Although he did not have the figure at hand, Mr. Slansky acknowledged RAD funding had been recommended. Chairman Giunchigliani thought the RAD had been designed for all employees regardless of whether they commuted to work. Ms. Johnson explained the RAD was designed for all commuting employees, but she was unsure if someone living in the town area was restricted.

Following discussion concerning the RAD, the Chair asked why employees at ESP were receiving a 5 percent income differential while employees at LCC were receiving only a $6 RAD. She felt the areas had similar employee vacancy problem. Ms. Johnson explained the situation at ESP was different; those employees were expecting a 5 percent increase in salary rather than the addition of RAD. Given the similarities between the two facilities Chairman Giunchigliani was uneasy about the salary discrepancies and the significant differences in incentive offered to retain staff.

Mr. Bayer then attempted to elucidate the rational behind those discrepancies. In Ely, there were no other remote areas from which employees commuted. Employees either lived in Ely or they didn’t. Thus the total amount of benefits offered to employees at ESP was greater. On the other hand, LCC employees commuted from other areas such as Fernley or Fallon, justifying the $6 RAD. Dismayed, the Chair interrupted the $6 RAD was an inadequate amount for even commuters to LCC and asked that the amount of the RAD be recalculated.

Last, the Chair revisited the debate concerning the occupancy of LCC and its mothballed wing. She noted LCC was scheduled to operate 210 beds over capacity, yet it could not staff the wing needed to do so. She wondered what alternative plan the department had if the mothballed wing could not be opened. Mr. Bayer responded after the opening of Phase I at CCSP, those beds would be filled. Yet, Chairman Giunchigliani did not understand how the department expected to recruit new staff by offering a paltry $6 RAD. In addition, she argued the capacity offered by CCSP was still an uncertain goal and might not be available when the department had planned. Mr. Bayer pledged to provide documentation of the various contingencies and alternatives the department could develop concerning the opening of CCSP and the mothball of SNCC. Furthermore, he said the department competed with neighboring labor markets in other states to the best of its ability and would attempt to staff the mothballed wing at LCC as quickly as possible. Capacity, though, had to be built around the beds the department had available.

Appreciating the magnitude of DOP's dilemma, Chairman Giunchigliani opined the budget had been based on the opening of the LCC wing plus the addition of emergency capacity. She did not see how the department’s proposal changed the situation and she felt a variety of plans should be considered before making a decision.

Mr. Bayer hoped the RAD and the 5 percent income differential at ESP would be adequate to entice individuals to work for LCC and ESP. Chairman Giunchigliani suggested DOP poll former employees to determine if a $6 RAD was an appropriate incentive.

Placing the $6 RAD into better perspective, Mr. Price related a personal experience where he had been employed as an apprentice electrician in 1955 and had received a commuting allowance of $8 a day. Comparatively, he felt $6 a day was inadequate.

Mainly, the Chair wondered what amount the center had collected in restitution fees, as the department’s performance indicators did not provide that information. She also wondered if restitution centers were expensive facilities to operate.

Mr. Bayer explained the restitution center in southern Nevada was leased while the department owned the facility in northern Nevada. He could not firmly state whether the facilities were expensive to operate as he felt operation had to be balanced against the client income. For that reason, Chairman Giunchigliani remarked performance indicators illustrating how much in restitution fees had been collected were needed.

Next, the center had a 1998 bed-count of 51 and the department had predicted 60. The Chair inquired what the full capacity of the facility was. Mr. Slansky said the center had operated with 60 beds for a number of years. As a consequence of the high commensurate growth in prison population, Chairman Giunchigliani followed the state should investigate the use of restitution centers for diversionary programs seta aside for inmates of the appropriate classifications.

The Chair’s main concern was that inmates of the correct custody level were being transferred to camps such as the Stewart Conservation Camp. Also, she needed assurance the proper amount of work was being extracted from the inmates as well as documentation concerning employee turnover and staffing qualifications. Last, she requested information concerning the recidivism rates at the boot camp program. She wondered how DOP measured the performance of the program.

Mr. Bayer commented the DOP had experienced difficulties with the statute requiring an inmate, diverted to the boot camp program, to spend a maximum of 180 days. Frequently, Mr. Bayer explained staff had been recommending to judges that an inmate re-complete the program. For that reason, the true recidivism rate could not be tracked. He noted that he would request assistance from the courts to eliminate the problem.

Again, Chairman Giunchigliani felt the department should provide documentation concerning the custody levels of inmates transferred to the facility as well as their health status. Additionally, she was confused by the disparity between the camp’s employee turnover rate of 30.77 percent in 1999 and its projected turnover rate in 2000, which dropped down to 16.77 percent.

Ms. Johnson said the employee turnover rate for 1999 had been a projection from the previous legislative session.

Concerning the sagebrush area remodel project, Ms. Johnson clarified a BDR had not yet been submitted. However, the Budget Division would check with PWB to determine if money was available in the CIP fund.

Finally, Chairman Giunchigliani summarized the areas where she felt the department should either provide information or submit alternatives to the department’s current plan.

Mr. Bayer asked if committee member desired copies of the original notes he believed Dr. D’Amico had brainstormed his 5-year Plan. Chairman Giunchigliani replied that information should be delivered to Mr. Price.

Senator Jacobsen made a final comment concerning the plan to mothball SNCC. He offered up the idea to utilize the honor camp, which was located nearby the SNCC property, to maintain the facility while it was mothballed.

Chairman Giunchigliani too made a recommendation to organize a tour of DOP facilities for the legislators. Also, a meeting date would be posted in the future to specifically address the concerns of the public. Any testimony on ideas or programs would be welcome.

The meeting was adjourned at 1:45 p.m.

RESPECTFULLY SUBMITTED:

Janine Toth,

Committee Secretary

APPROVED BY:

_____________________________________________

Assemblywoman Chris Giunchigliani, Chairman

Senator Lawrence Jacobsen, Chairman

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