Mr. Morse Arberry Jr., Chairman

Ms. Jan Evans, Vice-Chair

Mr. Bob Beers

Mrs. Barbara Cegavske

Mrs. Vonne Chowning

Mrs. Marcia de Braga

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. John Marvel

Mr. David Parks

Mr. Bob Price

None

Mark W. Stevens, Fiscal Analyst

Gary Ghiggeri, Principal Deputy Fiscal Analyst

Debbie Zuspan, Committee Secretary

The Chair recognized Roy Neighbors, Assemblyman, District # 36, who represented Nye, Mineral, Esmeralda, and Lincoln Counties. Mr. Neighbors introduced Erik Levin, a law clerk for The Honorable John Davis, District Judge.

Mr. Neighbors explained A.B. 38 was an act related to district courts that provided an additional judge for the Fifth Judicial District, authorized the Board of County Commissioners to establish one or more locations within the county for a district court to conduct court in addition to the county seat, and provided other matters properly relating thereto.

A.B. 38 made changes to three Nevada Revised Statutes. First, NRS 1.050 was amended to allow for the addition. Second, NRS 3.015 was amended to require two district judges. Third, NRS 3.100 was amended to establish one or more additional locations within the county for the district to hold court. Additionally, section four required the additional district judge for the Fifth Judicial District Court be selected at the general election to be held November 7, 2000, and take office on January 1, 2001. The term of the judge expired January 6, 2003.

Mr. Neighbors referred committee members to letters of support from both the Nye County Board of Commissioners and the Town of Pahrump (Exhibit C) and said the Nevada Judges Association also supported the legislation. He advised the Fifth Judicial District included Nye County, Esmeralda County and Mineral County. The legislation had been drafted in response to a huge population explosion. Pahrump currently had a population in excess of 32,000. A four-lane highway into Pahrump from Las Vegas would be completed in the year 2000 and the population explosion was expected to continue. Mr. Neighbors explained that when an individual in Pahrump was called to district court, it meant a 350-mile round trip to Tonopah. While district court judges were paid by the state, all other expenses were incurred by the county. He said the county commissioners were in the process of building a courthouse in Pahrump that would have courtrooms available for the new district judge. Those facilities would also serve Laughlin, Mesquite, Jackpot, Wendover, and others.

The Chair recognized Erik Levin who referred committee members to a series of handouts beginning with a fiscal note (Exhibit D). Mr. Levin advised there was a handwritten notation made in the margin of the fiscal note which indicated the amendments made in the Judiciary Committee would shift the costs outward by 18 months. Pages 2 and 3 of Exhibit D were graphs and figures reflecting the increased caseload in the district from 1990 through 1997. He said the most important figure could be found on the lower left-hand corner of page 2 which reflected an increase of 109 percent in the criminal caseload. He explained criminal cases were those that consumed the most amount of court time. Referring committee members to page 3 of Exhibit D, Mr. Levin said Nye County was the third largest county in the United States. When Mineral and Esmeralda Counties were added, the total geographical area for a judge to travel was enormous. In addition to the caseload, the current judge in the district was also the only person available to handle all the administrative tasks associated with running the judiciary in the district.

The Chair recognized Mr. Neighbors who referred committee members back to page 4 of Exhibit D and pointed out the Seventh Judicial District with a population of 16,790 had two judicial positions. The Fifth Judicial District had a population of 37,770 and only one judicial position.

The Chair recognized Mr. Marvel who asked if the honor camp in Tonopah had impacted the docket. Mr. Levin responded that it probably did, but he did not know to what extent.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 38 closed.

The Chair recognized Assemblywoman Marcia deBraga, Assembly District # 35 who explained A.B. 246 required payment for all accrued unused sick leave of state employees under certain circumstances. The bill simply stated that upon the retirement of an employee, his termination through no fault of his own, or his death, he or his beneficiaries were entitled to payment for the employees unused sick leave. She added the caps for years of service had been removed. There was a fiscal note for the bill and there were different opinions as to whether or not it would have a serious impact on the budget. She thought it would be difficult to quantify, because if everyone took the sick leave they had coming, there would be no option but to pay for it.

Mrs. deBraga said the goal of the bill was to prevent benefits from being taken away from state employees. It did not seem fair to give employees benefits as part of their employment package and then prevent them from receiving those benefits.

The Chair recognized Gary Wolff, Business Agent, Nevada Highway Patrol Association. Mr. Wolff provided the following verbatim testimony:

Mr. Wolff broke from his verbatim testimony and referred committee members to old language regarding the issue which made an employee pay back money within the first 30 days of retirement. Also not taken into account, he said, was any provision for a special sick leave account. Often, when an employee left state service, they lost the entire special sick leave account and only the regular sick leave account was applied. As Mrs. deBraga had pointed out, the caps had been removed. Continuing with his verbatim testimony:

Mr. Wolff referred committee members to Exhibit E, which reflected two examples of cost factors relating to A.B. 246. He said he knew committee members would be seeing several fiscal notes related to the legislation. The fact was, however, no one would know what was going to happen with the plan until it had been implemented for a few years.

Example 1 of Exhibit E reflected a trooper with 25 years of service and 1,200 hours of sick leave on the books. The 1,200 hours equaled 150 days, or approximately 7 months. Using a current pay grade 36, step 15, the cost would be $3,600 per month times 7 months for a total payout of $25,200. The total buyout of $25,200 equaled approximately $1,000 per year for each year of service, or $83 per month.

Mr. Wolff pointed out an agency’s savings actually began when a new employee was hired to replace the trooper with 25 years. He said fiscal notes never reflected the salary savings the state received on a new employee. A new employee would immediately make $954 less per month than the trooper making $3,600 per month. In the first year, the salary savings alone would equal $11,448. He pointed out it would not take long to recover the $25,000 payout.

Example 2 of Exhibit E reflected a trooper with 25 years and close to retirement. That trooper became ill with 1,200 hours of sick leave on the books (1,200 hours equals 150 days, or 7 months). Based on the fact that trooper knew he would only receive approximately 2.2 months pay for his unused sick leave, plus he would continue to earn 12 hours per month sick leave for each of the 7 months, he was off, and would continue to earn vacation and retirement credit, he elected to use all of his sick leave. Using that example, the trooper would receive his full salary of $26,935 plus 7 additional months of vacation pay of $2,027, for a total of $28,965, a net loss to the state of $3,765.

Mr. Wolff explained over the last three years there had been three troopers in hospice situations that had died of cancer. Because their families needed the money and could not take the hit in loss of pay, all three troopers burned their sick leave balances down to the last dollar. One of the trooper’s wives had told Mr. Wolff it was very unfortunate they could not buy the trooper out because they could have used the extra money for medical bills. Another example was a Sergeant that had a heart attack. He could not return to work and was off seven months prior to his retirement. That meant until his retirement, that position could not be filled.

Referring committee members back to Example 1 of Exhibit E, Mr. Wolff pointed out the cost to the state was not that great when applied over several years. The maximum amount a person would receive was $8,000. That equaled $320 per year of service, or $26 per month over 25 years. He believed the payment of unused sick leave was good business. He pointed out companies all over the United States had implemented programs of that type.

The Chair recognized Ms. Giunchigliani who recalled a situation in Clark County where she was contacted by a gentlemen who was within two years of retirement and had suffered a heart attack and his employer was unable to find a job placement for him. The employer terminated the person. She said Clark County had introduced a bill to allow employees in those cases to purchase their retirement and thought committee members may be interested in seeing a copy of that legislation. She alluded to her own situation of having approximately 300 days accrued within the school district for which there was no provision for payment. She was aware there were counties that had negotiated to buy retirement service. When she had contacted the Public Employees Retirement System (PERS), they commented that type of buyout became a taxable event to the employee at some point in time and PERS would have to be notified. She said committee members needed to know at what dollar amount purchase of retirement would become a taxable event.

The Chair recognized Mrs. deBraga who said she had a constituent who became very ill and had to leave his employment very early. He had donated his accrued sick leave to the risk pool. While that sick leave had not been used by anyone else, the employee was unable to retrieve it for his own use.

The Chair recognized Mr. Marvel who asked how the buyout of sick leave would be factored into future budget projections. Don Hataway, Deputy Budget Administrator, Department of Administration Budget Division, responded there was a process where an agency could go to the Board of Examiners to get reimbursed for certain terminal leave. A bill had been introduced by the Department of Administration that would increase those limits. The maximum limit at that time was $3,500 yet an agency could incur $8,000. He said for terminal leave, terminal comp time, or any other special account, the department made no budget provisions. Mr. Marvel asked if the buyout of sick leave would have a major impact on agency budgets. Mr. Hataway said it would depend on those individuals terminating at any given period of time and, in some cases, an agency’s budget would be impacted. He said if the agency did not have the ability to receive compensation from the Board of Examiners up to a certain limit, or could not absorb the cost within their other vacancy savings or other parts of their budget, a supplemental appropriation would be required. He recalled in his experience at least one case where an agency had to approach the legislature for a supplemental appropriation to cover that type of excess cost. Mr. Hataway explained it would be virtually impossible to factor in a buyout of sick leave on an agency-budget basis.

In answer to Ms. Giunchigliani’s earlier question, Mr. Wolff said the bill not only provided for the payoff of a lump sum, but provided a provision where an employee could buy retirement time with the funds. Medical insurance could also be purchased with the funds.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 246 closed.

The Chair recognized Assemblywoman Marcia deBraga, Assembly District # 35. Mrs. deBraga explained A.B. 274 asked for $25,500,000 for construction and renovation of schools in White Pine County. The good news was those figures had been amended down to $19,500,000. The total sum represented one modular school in remote Pleasant Valley, a new school in Lund, and the total renovation of a very substandard school in Ely.

Mrs. deBraga said she was sure committee members would hear opposing testimony that would address bonding problems, whether or not the state should be involved in school construction, and the dangerous precedent of the state aiding school districts in financial difficulty. Committee members would also hear the questions the very important bill would raise. Specifically, the bill asked how a school district that did not have the ability to raise taxes or to sell bonds, and whose revenue was declining, could maintain and construct school buildings for its students. Mrs. deBraga said since before the start of this legislative session, the citizens of White Pine County had been working together to bring their message to committee members. Parents, teachers, administrators, and students had been in the halls of the legislature every week regarding the issues at hand.

Mrs. deBraga referred committee members to (Exhibit F), a letter from a student in an elementary school in White Pine County, one of several she had received from students. She said the student wrote a very fine letter which discussed all the problems inherent with White Pine County and other rural school districts that had no ability to repair their school buildings.

The Chair recognized Mark Shellinger, Superintendent, White Pine County School District. Mr. Shellinger referred committee members to (Exhibit G), (Original on file at the Research Library of the Legislative Counsel Bureau) titled "AB274, School Construction in Nevada, State Participation."

Mr. Shellinger said White Pine County was excited about advancements made in the areas of student performance -- test scores were exciting. There was a very good curriculum. Most importantly, he said, families, children, staff, and board members were all working together for a common purpose. White Pine had moved forward as a school district. Financially, White Pine’s "house" was more than in order. He said the money White Pine had was used correctly, but there was very little to use. He realized committee members were all painfully aware of that situation and had helped in terms of trying to improve the situation.

Mr. Shellinger was before committee members to discuss school construction and whether or not the state should be involved. He began the discussion by providing an overview of the history of school construction in the State of Nevada. Nationally, 48 of the 50 states were involved in school construction directly in one way or another. While the State of Nevada was not currently involved in school construction, it had been in the past. He explained the 48 states that were involved in school construction, without exception, became involved because the courts forced the state into it because of equity issues, i.e., a situation where a county could not build a school. He said that was not an equitable situation for the other students in that county versus the rest of the state. Nevada had a record of being involved in school construction and it would not be setting a precedent to assist a district at that point.

In 1955, Mr. Shellinger continued, there was a law in the Nevada Revised Statutes that dealt with construction relief. It was specifically aimed at assisting counties that were unable to build a new school. That legislation was the result of the Peabody Study and was in place until 1979. In 1979, Governor O’Callaghan raised the issue that the state needed to take a more comprehensive look at school construction issues, and another study was performed. No legislative action followed that study. He said in 1979 a bill was enacted called the Account for Assistance for school construction. That account was funded with $1 million and was intended to assist school districts and, in fact, schools were completed by applying for the funds directly from the state both in Washoe and Lincoln Counties. In 1981, the Account for Assistance bill was amended to allow school districts to approach the legislature, not to ask for a building, but instead, for equipment for a building, and another $1 million was added to the fund. In 1983, the legislation was repealed. Since that time, Mr. Shellinger explained, there had been a number of interim studies in 1993, 1995, and 1998. The 1997 legislature passed A.B. 217 (1997) that charged the state with the formation of a commission on school construction planning. That commission issued a report that dealt with two subjects. The first was to determine construction needs statewide. In that report, White Pine ranked first, and was the only district with unhoused students. The second issue was how districts funded their school construction. The commission had been charged with the responsibility for developing a plan to fund school construction. For White Pine, the plan was simple. The commission said it simply was not possible, given the fiscal situation in the county. The commission was unable to develop a plan for White Pine.

Mr. Shellinger felt he was addressing committee members regarding school construction because White Pine had no place else to go. The Nevada Constitution made it very clear that the state had a responsibility for public instruction. He said White Pine as a school board, a board of trustees, and a school district, truly had nowhere else to go. It had exhausted all avenues available to raise funds for new schools. There were students that could not be educated in Nevada but had to be bused into Utah. Mr. Shellinger said he was somewhat chagrined to read the Nevada Revised Statutes passed last session (1997) that required boards of trustees to approach the legislature and let them know if there was a problem in terms of equality and equity in public education. He said really, White Pine had no choice but to ask for assistance from the legislature. He wanted committee members to know White Pine had students for whom Nevada could not provide an education. White Pine felt the legislature had the responsibility and authority to subsidize school construction. Committee members were reminded Nevada’s Constitution guaranteed all Nevadan’s a K-12 education.

Mr. Shellinger explained the families in Pleasant Valley had been very cooperative. They understood the difficult situation, but knew that in order to make that situation better, state assistance would be required.

Since the time construction relief was repealed in Nevada, there had been direct state involvement. Mr. Shellinger said committee members were probably aware of the situation in Mineral County where a new school was needed at Schurz. The federal government was willing to pay for most of the cost. The voters in Mineral County, even though they had the bonding capacity to build a new school, said no. The legislature stepped in and in 1995 made a direct appropriation to build the school. White Pine felt that action on the part of the legislature made good sense and was the right thing to do in that equity-issue situation. He said there were also direct appropriations to finish schools in both Alamo and Lincoln Counties in 1995. Mr. Shellinger said the 1997 legislature provided for technology centers to be built in both Carson City and Clark Counties. He pointed out those facilities were on school district property and used by school district students during the day, and community colleges in the evenings. The state had begun to get involved in school construction in a very specific way.

Mr. Shellinger said the White Pine County School District was before committee members to request assistance with school construction. White Pine voters had shown time and time again they would support new schools. The county had $6 million in approved bonds that would expire due to the lack of tax capacity. He pointed out the tax cap could be raised to $4.50 and the county would still be unable to use the bonds. It was not a problem White Pine could easily solve and felt state involvement was required in order to serve its unhoused students. Secondly, White Pine wanted committee members to look at K-12 facility needs in the same way they looked at higher education needs. He pointed out the Nevada Constitution made a very clear case that K-12 students had to come first. Lastly, he said schools were all state facilities under the law.

Mr. Shellinger told committee members White Pine was asking for $3.5 million to build a modular school in Pleasant Valley and $4.4 million to replace a school in Lund. He said the Supreme Court in Nevada made a very interesting point about Lund in 1975, saying there had to be a school in every community, a school could not just be closed. In order to stay within the boundaries of the Supreme Court decision, and to comply with engineering studies, the school in Lund had to be replaced. Finally, they were asking for $11.6 million to either replace or seriously renovate White Pine Middle School that was built in 1913. White Pine was asking for a total of $19.5 million for those projects.

Mr. Shellinger said the next part of the presentation would be given by Paul Johnson, Finance Officer, White Pine County School District. Mr. Johnson would be talking to committee members about the financial situation in White Pine County and why it was not possible for the county to solve the problem itself.

The Chair recognized Paul Johnson, Finance Officer, White Pine County School District. Mr. Johnson shared the improvements that had occurred in the financial operation of the district. He said the White Pine County Board of Education had adopted as policy, a formal cash-management plan. That plan took the district’s estimated annual revenue and projected those monies for each month the district was to receive money in the proper amount. Actual receipts were then compared with budgeted receipts. Any material deviation was researched to determine the fiscal impact for the balance of the year. Mr. Johnson said that research was important. The district had faced adverse economic conditions during the last three years and had been able to change its budget during the year to create a positive ending fund balance. He said it was important to note that, because of the district’s financial situation, it was allowed to budget to a zero ending fund balance. If the district did not effectively manage its resources during the year, it would not be able to create a positive ending fund balance at the end of the year.

Mr. Johnson said the district had done everything it could with existing debt to create economic gains. The district had refinanced its state guaranteed loan and realized an economic gain of $77,776. White Pine was the first district to take advantage of the School Bond Guarantee Law and realized an economic gain of $547,417. Most importantly, he said, if the district was not at the tax cap of $3.64, it would have realized a savings of 5 cents on its combined tax rate.

Mr. Johnson explained the finance officer position worked directly with the superintendent and the board on all financial issues. A tri-party system had been created consisting of a board, a finance officer, and a superintendent, all reviewing the same financial information. Last year, he explained, the district made a change to a site-based budget which had been a great tool for the district to create community awareness and staff involvement with the budget process. Site budgets made more individuals accountable for the fiscal operations of the district. The staff and community were heavily involved in all aspects, which included a principal’s advisory committee that reviewed policies and made recommendations to the board. The advisory committee also had direct input on formulation of the budget. Mr. Johnson said the district’s operating cash had been repositioned to maximize its interest earnings. He explained the district had a money market account and, when necessary, it had transferred funds into its operating checking account. That repositioning had increased the district’s earnings by approximately 40 percent.

Mr. Johnson said annual audits of the district for three consecutive years had disclosed no material weaknesses in procedures. Fiscal Year 1997 and 1998 audits stated the district was a "low-risk" auditee. There were strong financial internal controls in place to manage the district’s funds effectively.

Continuing, Mr. Johnson addressed White Pine County’s assessed values. In 1996-97, the district peaked at approximately $200 million. Even at that peak, the district was at a $3.64 tax cap. The district had declined 18 percent from that time. He said the graph on page G-28 of (Exhibit G) was reflective of the county’s recessive economy and showed taxable sales in FY 1998 at half of that in FY 1996.

The Chair recognized Mrs. deBraga, who asked Mr. Johnson to address the issue of why a county like White Pine had a certain dependency on the mining fluctuations, how projections were made based upon projected income from these properties, and how those projections may be devalued because of the variations in gold and copper prices. Mr. Johnson said in FY 1996 and FY 1997, the district had original budget projections of $217 million and had developed its budget accordingly. In the third quarter of the year, material deviations were discovered between the district’s ad valorem cash receipts and projections. Upon investigation, the district received a confirmation letter from the Department of Taxation that said its original projection of $217 million was actually $12 million too high. Part of the change was due to an error on the district’s part, and part was from local mining entities approaching the Board of Equalization and requesting a devaluation. The devaluation resulted in a $300,000 adjustment to the district’s budget in FY 1997 in order to complete the year. The $300,000 represented approximately 3 percent of the district’s total General Fund revenue.

The Chair recognized Mr. Goldwater who asked if White Pine County had petitioned the Tax Commission to go above the $3.64 cap. Mr. Johnson said the district was currently operating under the statute of a severe financial emergency. Based on that emergency status, the Tax Commission had the authority, if necessary, to bump the cap to $4.50, but that had not been done. Mr. Shellinger explained that bumping the cap to $4.50 would still not solve the district’s problem and that was the reason it had not requested the Tax Commission to do so. Referring committee members to page G-29 of Exhibit G, Mr. Johnson explained the district had been at $3.64 since FY 1996. During those years, the district had the luxury of a
voter-approved capital improvement levy of 50 cents, a pay-as-you-go levy. In FY 1998, the district was only able to receive three quarters of that amount because it had to do a buy-down as the result of the district’s tax cap exceeding the $3.64. In FY 1999, preliminary budget drafts showed district demand at $4.04. If the capital projects levy were included, that amount would have been $4.45, 4 cents higher than the expanded cap for districts in severe financial emergency. Mr. Johnson said the district would have had the money to maintain its capital improvements and projects, but would not have had the capacity to bond for the construction of buildings.

The Chair recognized Mr. Goldwater who asked how much bonding capacity was required. Mr. Johnson said the bill requested bonds in the amount of $19.5 million to construct three facilities.

The Chair recognized Mr. Price who questioned the fall-off in sales tax and asked if one of the mines in the area had closed. Mr. Johnson said the sales tax directly related to the increase in assessed values. He explained there had been increased construction retail sales that were converted into assessed values because one of the large mining operations had entered a substantial construction phase. When the construction company left, retail sales fell.

Again referring committee members to page G-29 of Exhibit G, Mr. Johnson pointed out the City of Ely and the Town of Ruth were over the $4.40 tax cap. Even after removing the debt and pay-as-you-go levies, the combined rates for the City of Ely and the Town of Ruth would exceed the $3.64 tax cap and the capacity would still not exist for the district to bond for new construction.

Mr. Shellinger said the next portion of the presentation would be given by Carole Hilton, Vice Principal at White Pine Middle School. Ms. Hilton would show committee members the issues in terms of the need for new construction and how the district determined those buildings needed to be replaced, and the study that was used.

The Chair recognized Caroline Hilton, parent and Assistant Principal, White Pine Middle School. Ms. Hilton showed committee members pictures of district facilities. She said most facilities were located in Ely, but also served Lund, Baker, Great Basin National Park, and Pleasant Valley. Lund was a facility with a priority IV replacement. The Pleasant Valley area was on the Nevada/Utah border. Students of Pleasant Valley were educated in Utah and spent over an hour each day being bused to school on a dirt road.

Ms. Hilton said White Pine County School District had 16 active school buildings, 8 of which were over 20-years-old. Slightly under half of the district’s student population were schooled in 86-year-old buildings or older. Three percent of the district’s students were unhoused. Ms. Hilton explained the district’s facilities and boundaries committee had developed its priorities and listed unhoused students as number one. There were 75 unhoused students, some of whom were pre-school students. Lund was the second priority and there were 77 students in its junior and senior high schools. Third was the project at White Pine County Middle School, attended by 400 students. Ms. Hilton showed committee members pictures of the main area of Pleasant Valley and of the road students traveled to West Desert in Utah. The road was about a lane and a half wide and covered three counties and two states.

She reiterated the second priority for the district was Lund Junior/Senior High School and said Lund was an area of hand-me-downs. A modular from the old middle school had been brought in to relieve the overcrowding at Lund. Another hand-me-down building had been brought from the mine in the Ruth and Kimberly areas that was no longer being used by Kenecott. That building was used as the science building, health facility, and the music building. Ms. Hilton was embarrassed to say that while Nevada’s supreme court justices said the county must provide a quality education to its students, hand-me-downs were all the district was able to provide.

White Pine’s third priority was the old high school, located on main street, and originally built in 1913. Ms. Hilton showed committee members pictures of the building taken this winter and also one from 1939. She pointed out there were not a lot of changes. The building’s claim to fame was its 325 stairs.

Continuing, Ms. Hilton said the district had contracted an architectural firm to give the district the real figures. A study was performed on both the middle school and the Lund school. The on-site building evaluation looked at all the conditions to include physical, site analysis, and educational suitability. The company used a Building Assessment System (BASYS) that looked at both the interior and exterior building, mechanical systems, safety/building codes, and provisions for the handicapped. A score was then developed based on conditions and components. She said it was no surprise to the district that the score for Lund was 38, replacement recommended. White Pine Middle School scored a 36, also replacement recommended. She pointed out Pleasant Valley was not even listed in the study because there was nothing to evaluate. Ms. Hilton stressed the fact the issue was students and equity for those students.

The Chair recognized Mr. Price who questioned if handicapped requirements were met at the old high school in view of the numerous steps. Mr. Shellinger said the district had been very careful to make sure all schools met ADA (American’s with Disabilities Act) requirements, as well as health and safety issues. A great deal of money had been taken from the district’s General Fund monies, normally intended for operation, to meet ADA requirements. At the school Mr. Price had referred to, the district had moved classes to a physical level in the building that allowed students access to classes.

Mr. Shellinger advised committee members the next part of the district’s presentation would be given by Dave Costello. Mr. Costello had been the school board president since the fiscal collapse of the school district in 1995, and was currently serving as a member of the board.

The Chair recognized Mr. Costello who said he was born and raised in White Pine County. He was before committee members to talk about unhoused students. He pointed out that although children lived in White Pine County, they would not receive a Nevada education. The district was asking committee members to make it the state’s priority to provide all Nevada K-12 students with a school facility.

Mr. Costello said the board he sat on always wondered how they would pay for school projects. One option might be to replace proposed technical schools with schools for unhoused students. While tech centers were wonderful, he pointed out they were built for students that already had a school. White Pine County School District was asking committee members to provide funding to build a school for students that did not have one. The district was also asking for K-12 to be made a priority. Another option may be the use of tobacco settlement monies. Mr. Costello said there were currently four states that had opted to take tobacco monies and use those funds towards school construction. Those states were Maryland, Michigan, Oklahoma, and Colorado. He pointed out another option would be direct appropriation. The district was not asking for new money, just a rearrangement of monies that had already been appropriated. Finally, Mr. Costello thanked committee members on behalf of the district for listening to the presentation and for its help in resolving these issues and showing the legislature’s commitment to Nevada’s children. The goal of the White Pine County School District was to be the best school district in the State of Nevada.

The chair recognized Mr. Marvel who asked if the district had recently completed a new middle school. Mr. Shellinger clarified a new high school had been completed three years ago. Mr. Marvel asked the total cost of the project and Mr. Shellinger responded the cost was $10 million. Mr. Marvel asked what affect the new high school had on the tax rate. Mr. Shellinger said the tax rate was 32 cents for bonding for school construction. He said the economy did not exist in White Pine County to generate the funds necessary, in terms of taxes, to have the capacity to build schools. Mr. Marvel said he was distressed by the fact voters in White Pine County had approved the construction of the new high school even though it took the district over the cap. Mr. Shellinger explained the bonding approval at that time was for a new high school and a new middle school. In building the new high school, the district thought it would be possible to stay under the cap based on the new mine, BHP, creating an economic engine in White Pine County that would generate the necessary tax capacity. He pointed out had the new high school not been constructed, the district would be in an even more serious situation.

Mr. Marvel asked if the district got "caught" with the payback of net proceeds. Mr. Shellinger said he did not like the term "caught" because the cash management program allowed the district to analyze financial information and make necessary adjustments. Each week the district looked at actual revenue and adjusted its budget accordingly. He explained the district’s budget had to be adjusted 15 times during the last three years because of those kinds of issues, but the district ended each year with a surplus.

Addressing Chairman Arberry, Mr. Shellinger said there were several individuals present who wanted to share their experiences. First was Mary Peterson, Superintendent of Instruction, State of Nevada.

The Chair recognized Ms. Peterson who said, as committee members were aware, the Constitution of the State of Nevada, Article II, Section II, established the legislature shall provide for a uniform system of common schools. The funding formula on the operating side had withstood many tests of equity. When it came to school construction, however, the questions were much larger. Ms. Peterson reminded committee members of what the Nevada Constitution said about a system of uniform schools and provided the following verbatim testimony:

Ms. Peterson told committee members she had the privilege of visiting the schools in Lund and was sorry to report that they would not fit the definition of "decent facilities," nor would White Pine Middle School. She said the children in Lund were beautifully behaved, groomed, well taken care of and obviously loved. The school floors were shiny and she guessed they could be eaten off of as long as the roof did not leak. The facilities in question were not decent and would not withstand a test in the court as decent facilities.

To address the concerns about school construction in the state, the legislature passed A.B. 353 (1997). That bill created the State Planning Commission for new construction, design, maintenance and repair of school facilities. The commission was charged with two primary responsibilities. One was to assess the condition of school facilities throughout the state.

Ms. Peterson explained the commission hired ISES Corporation to produce a report called "A Summary of Public School Facility Conditions Throughout the State of Nevada." Page H-2 of (Exhibit H), summarized the findings of ISES Corporation regarding the facilities in the White Pine County School District. She said ISES Corporation had worked on its project together with officials of the district.

The second major responsibility of the commission was to analyze whether school districts could fund existing facility needs, construction of new facilities, and capital replacement and repair. Ms. Peterson said Howarth & Associates was hired by the district to perform that analysis and assessment. Page H-4 of Exhibit H provided a summary of results of the Howarth & Associates assessment. She said some of the numbers had been updated with information provided in earlier testimony. Committee members’ attention was drawn to the conclusion of Howarth & Associates, page H-6 of Exhibit H. That conclusion said that, due to the small tax base of the county, any other revenue stream other than property or sales tax was unlikely to provide much in the way of funding. The district would require that voter-approved tax levies were exempt from the capital replacement and repair in order to issue general obligation bonds. Finally, the report concluded state assistance would be required to fund the district’s needs. Ms. Peterson explained Howarth & Associates went through each district’s facility assessment systematically and made financing recommendations.

For all the reasons stated, i.e., the Constitutional requirement for uniform public schools, the obvious link between improved learning and the environment, and the recommendations of the State Commission, Ms. Peterson hoped committee members would carefully consider A.B. 274. She asked committee members to also consider the recommendations that Howarth & Associates made for school construction state-wide. Page H-6 of Exhibit H included the overall summary and conclusions of Howarth and Associates as provided to the legislature.

The Chair recognized Mr. Goldwater who asked if Ms. Peterson had visited Ruby Thomas, Robert E. Lake, and Sunrise Acres schools in the middle of Las Vegas. He asked how those schools compared to those in Lund and whether or not they would fit the definition of a decent facility. Ms. Peterson said she had visited those locations and each location, compared to Lund, would meet the definition of a decent facility. Although she had not visited all of the sites mentioned within the last year, she believed those schools would meet the Constitutional test. She said there had been considerable renovation at Sunrise Acres. Mr. Goldwater said there were leaky roofs at Robert E. Lake, and the school was nowhere near the status of Ernest Becker Middle School. Ms. Peterson recognized there were issues with the inner-city schools of Las Vegas, but said there was no comparison to the schools in Lund, which were much needier.

The Chair recognized Mr. Hettrick who said he lived in Douglas County and was aware that children living in California were bused to schools in Nevada. He said it was not an uncommon practice and was done because a district could not afford to build a school for existing population. Mr. Hettrick asked if the potential for growth in Pleasant Valley was such that it required a school for 77 students. Mr. Shellinger replied Pleasant Valley was the only area of White Pine County that was showing significant growth every year. Student population growth was between 3 percent and 6 percent. He said the entire west desert area of Utah and the Pleasant Valley area of Nevada had been an area to which a substantial number of families were moving. The district did not expect that growth pattern to change. Mr. Hettrick asked what business supported the families living in Pleasant Valley. Mr. Shellinger responded ranching, farming, and construction. While the actual construction was performed outside of Pleasant Valley, the construction company was located at one of the communes in that area.

Mr. Hettrick had done some math and said when he divided $3.5 million by 77 students, it represented $45,000 per student to build a school. He said if the district wanted to use true modulars, they could be bought at a cost of approximately $28,000 apiece. It seemed to Mr. Hettrick that the cost was exceedingly high and he asked if land costs were involved. Mr. Shellinger said the Bureau of Land Management (BLM) would actually give White Pine County the land for the Pleasant Valley school and a site had already been identified. Page G-52 of Exhibit G was a report from the engineering company. The school would be built for 150 students K-12 to deal with the growth issue in Pleasant Valley. He said the school board had a cooperative arrangement with the Tintic School Board in Utah that ran the West Desert School. Mr. Shellinger explained the West Desert School’s enrollment consisted of 60 percent Nevada students. Responding to Mr. Hettrick’s comment, Mr. Shellinger said he knew there were many situations of students being bused from one place to another. He pointed out, however, those were voluntary situations. The parents of the students in Pleasant Valley wanted their children to have a Nevada education. The district’s test scores were higher than the Tintic schools. Mr. Hettrick said the district should be very proud of its accomplishments in terms of the turnaround in test scores and the financial management area. While committee members were not being negative about what the district was trying to accomplish, a request for $19 million in a year where no funds existed would be difficult to fund. He said it would be necessary to bring the project in at a reasonable level in order for committee members to be able to consider funding. Even at that, committee members may not be able to justify funding. Mr. Hettrick asked what would happen to the district’s request if the tax cap were raised to $4.50 and how much would be required from the state to cover the balance of the request. Referring committee members back to his earlier testimony, Mr. Johnson explained the tax demand for the preliminary budget drafts exceeded $4. As the economy recessed, that tax rate had to increase every single year to bring in the same dollar amounts. He said if assessed values did not decline, the district would have approximately 50 cents it could possibly assess. Mr. Hettrick asked how large a bond the 50 cents would support and Mr. Johnson replied approximately $10 million. He pointed out that amount would change if the economy worsened. Mr. Hettrick asked how an increase of 15 cents in the state’s cap would affect the bonding requirement. Mr. Johnson said as the district assessed a debt rate, that debt rate also increased the demand and decreased the amount available to the district through local governments. Mr. Shellinger reminded committee members the school district had to give up its 50 cent pay-as-you-go to get the county down to the $3.64 cap. He said if committee members looked at the report prepared by the Nevada Commission on School Construction they would see that an increase in the cap would not create the bonding capacity necessary to complete the projects. He said the legislature was dealing with the situation where the county could not complete the projects on its own and had turned to the state for help. Mr. Hettrick said no one was arguing the point the district was in need of help. He was trying to get to the bottom-line number that may allow the legislature to help. Mr. Hettrick pointed out the legislature did not control the fact there was no excess money in the upcoming biennium. The district would have to provide every possible scenario to generate the lowest dollar amount.

The Chair recognized Mr. Marvel who asked how many school districts would be in the same predicament in the future. Mr. Peterson responded the analysis that had been done regarding A.B. 353 indicated that White Pine was not the only school district in Nevada up against some real issues with school construction. Committee members were encouraged to look at the final conclusion and recommendations provided in the analysis. He said there were state-wide solutions that would alleviate the need to deal with each situation on a district-by-district basis. Mr. Marvel asked if the budget office had the opportunity to study the analysis. He was concerned if the legislature was going to be changing state policy by getting the state involved with school construction.

The Chair recognized Don Hataway, Deputy Budget Administrator, Department of Administration, Budget Division. Mr. Hataway said before single-county issues were addressed, there was the need to address the issues on a comprehensive basis and develop an overall state policy. Parameters outlined in the state policy would then be applied on a county-by-county basis.

The Chair recognized Mr. Shellinger who said A.B. 353 identified three counties that could not construct schools on their own, but identified only one county, White Pine, that had unhoused students. He said the White Pine County School District was suggesting as policy that when a county did not have the ability to construct schools on its own, and had unhoused students, the state should provide assistance.

Mr. Goldwater said if he were looking at the issue of state-assisted school construction on a long-term basis he would suggest working with Nevada’s Congressional delegation to develop a program that would provide if the Federal Government owned a percentage of the land, monies would be available for the purpose of school construction on that land. Over the long term, Mr. Goldwater felt the solution needed to come from a federal government program, very tightly crafted, that addressed those problems. He imagined every small county in Nevada would face the problem of school construction as the economy turned down. Ms. Peterson said there was some federal money available for school construction, however it was very targeted. The only district in Nevada eligible for those monies was a district in Clark County that had school empowerment zones. Mr. Goldwater explained he was not talking about an existing program, but rather the development of new federal legislation to solve the problem. He felt the problem was particular to Nevada and was caused by federal ownership of Nevada’s lands. Mr. Shellinger added the legislation for school construction assistance proposed by President Clinton would not have helped White Pine County School District because it required a substantial local match.

The Chair recognized Bob Hadfield who was appearing before committee members as a representative of the White Pine County Board of Commissioners and as Executive Director of the Nevada Association of Counties. The White Pine County Board of Commissioners strongly urged committee members to support and pass A.B. 274 to help the school district and the people of White Pine County. As the Executive Director of the Nevada Association of Counties, Mr. Hadfield said he had been predicting that this type of situation was going to occur in Nevada for quite some time, particularly in the smaller counties.

Mr. Hadfield wanted to make committee members aware the declining assessed valuation problem in White Pine County was not confined to that county, that it was happening in other rural counties as well. The changes being proposed for centrally assessed properties and how intangible properties were addressed could have another significant impact on the assessed valuation of the rural counties. There was not much of a tax base in the rural counties. He said Lincoln County had 98 percent of its land federally held. Churchill County lost 2 ½ percent of its privately-held land to a land exchange through the Del Webb Corporation in Clark County several years ago. Mr. Hadfield said the association had been working with Nevada’s Congressional delegation to craft legislation that would provide some benefit and measure of equality in the area of school construction. He agreed with Mr. Goldwater with his feeling the federal government had some role to play in the broader issue of tax base and tax capacity for the State of Nevada. The smaller counties could not survive on the current tax base. The association recognized and supported the need for adequate school facilities and understood that if Nevada’s youth was not well-educated, the future of the counties was not good either. He said as the competing tax entity in the county, left with the struggle of trying to figure out how the county itself could survive in an assessed valuation decline, it was inexorably married to the school districts in their capital construction needs. There needed to be a creative solution involving the counties, the state, and the Federal Government. County governments were already having a difficult time hanging on to meet their own responsibilities.

Mr. Hadfield said even if the tax rate were increased to $4.50, the problem with the bonded indebtedness in that rate still placed the county at risk for an operating rate because the debt rate would take precedent over an operating rate. If there were no real growth or declining growth in assessed valuation, the county would have to cut services. He said Mineral County built a new school with a bond issue. There was a substantial decline in assessed valuation and Mineral County had to cut its General Fund budget last year. That situation spoke to the need for a comprehensive review and understanding that the tax structure of the State of Nevada and the tax capacity of the State of Nevada at the local level did not necessarily meet the unique needs of the various regions of the state. He said the presentation given by White Pine County School District clearly demonstrated that without state involvement, or major changes in the tax policy, counties would not be able to sustain what existed in most of the state, and perhaps even in the urban areas if there was a downturn. The good news was Nevada had seen such rapid growth and huge assessed valuation growth overall statewide, the State of Nevada had not been hit. Four of the smaller counties, however, had lost assessed valuation.

Mr. Hadfield said Nevada could not wait two more years for a solution to this problem. While counties had been trying to piece together solutions, they had, in fact, ended up with continuing and growing problems.

The Chair recognized Ms. Cegavske who asked how much of the $3.64 property tax was used for the schools. She also asked if the reconstruction of the three schools in the White Pine County School District was on the same property as existing facilities. She explained Las Vegas was looking at the bond money that had just passed to reconstruct older buildings on existing property. Mr. Shellinger said 32 cents to 35 cents of the $3.64 property tax was used for schools. He said the Bureau of Land Management was going to let the district use its land in the Pleasant Valley area to construct a school. It would involve a long-term lease. The district would use land it already owned for the Lund school, and White Pine Middle School would be rebuilt on the existing site.

The Chair recognized Mr. Marvel who said it would be difficult to make a decision if there were going to be major changes to tax policy in the State of Nevada. Mr. Hadfield responded he was aware of at least two measures, one of which was a NAACO measure being held at the association’s request on the tax cap issue. The second measure would provide flexibility to local areas to address the issues of school construction. The association’s hope was that both bills would be heard in Senate Taxation as the beginning of a dialog on the issue of the tax cap and what could or could not be done to provide additional flexibility in the rural communities that had declining assessed values. He pointed out even in those districts that did not require a new school, if the assessed value continued to decline, their school operating rates would decline.

Mr. Shellinger told committee members the State Association of School Boards, which included all 17 counties in Nevada, had unanimously agreed to support the issue for White Pine County. Those entities felt unhoused students in counties that had no way to build schools should come first. Lastly, Mr. Shellinger shared a story about a third-grader in Pleasant Valley named Mary Ann. Last May the district had the opportunity to take three individuals from the Legislative Counsel Bureau to Pleasant Valley; namely Jeanne Botts, Mindy Braun, and Lu Chen. The group experienced three flat tires on the way. A third-grader in the gymnasium raised her hand at the end of the presentation and said, "Mr. Shellinger, can we have a jar?" and I said, "what?" and she said, "could I have a jar?" and I said "a jar?" and she said "yes, a jar" and I said, "what for Mary Ann?" and she said, "so we can help Nevada buy us a school." Mr. Shellinger said that jar existed today and families living in Pleasant Valley contributed what they could.

The Chair recognized Mike Walden, an employee of White Pine County School District. Mr. Walden said he had worked for 5-years at Pleasant Valley. He said one thing committee members must understand about the Pleasant Valley school was that it was 100 miles from Wendover, and 100 miles from Delta, Utah. That meant it was 100 miles from nowhere. The pictures of the roads committee members had been shown did not adequately tell the story of how bad it was to transport those students. He added the last three valedictorians from the school in Utah came from Pleasant Valley, and the next valedictorian would also come from Pleasant Valley.

The Chair recognized Debbie Lani, a resident of Lund, Nevada. Her family were farmers and ranchers. Her great-grandfather, John L. Whipple, had brought 2,000 head of cattle into the valley for the Mormons. Ms. Lani said her commitment was to her family. She had been working very hard during the last three years on committees and was very excited about the direction of the White Pine County School District. The district had great needs to educate its children. She explained rural living was a wonderful way of life. The community had done many things to help its schools. The county commissioners had helped the schools as had the district.

The Chair recognized Mr. Price who asked how many students were actually being bused to Utah. Mr. Shellinger said that number was 77, pre-school through 12^th grade.

The Chair recognized Mr. Goldwater who had looked at the distribution of the total property tax and saw that half of the ad valorem went to White Pine County. He said it would give him peace-of-mind as a state legislator in making a decision on this issue if he knew exactly where in White Pine County that money was going. He also wanted to know what issues in the county would have a higher priority than education. Mr. Hadfield said the consulting firm of Hobbs Ong & Associates had been working with White Pine County representatives to help figure out how the county would survive.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 274 closed.

The Chair recognized Assemblywoman Kathy Von Tobel who said David Leavitt, a government teacher at Virgin Valley High School in Mesquite had asked her to sponsor the bill. Ms. Von Tobel appreciated the many members of the legislature that had signed on to the bill by realizing the importance of high school students experiencing the legislature first-hand.

Ms. Von Tobel explained the Close Up Foundation was a national organization. She referred committee members to (Exhibit I), a compilation of information she had printed off the internet, and provided the following verbatim testimony from that information:

Ms. Von Tobel said two students had brought letters to her from their fathers outlining issues that affected them in Bunkerville and Mesquite that she would look into. Those students had been able to deliver the letters personally. Continuing with her verbatim testimony:

The Chair recognized Molly Bundy, a student at Virgin Valley High School. Ms. Bundy was appearing before committee members in support of A.B. 312. She told committee members the best way to learn something was by doing it yourself. She said being able to come to Carson City had been the best experience. She felt she had learned more in four days than she would have in several months in the classroom. Ms. Bundy urged committee members’ support of A.B. 312. She felt it was a great investment that allowed students to gain knowledge and respect for Nevada.

The Chair recognized Lisa Smith who explained she had recently moved to Nevada from Utah. She said she noticed many differences in Nevada. History and heritage were big issues in Utah, and she had not noticed the same in Nevada. Before she moved to Nevada, she did not know who the governor was. She said she saw news from southern Nevada, but not northern Nevada. The trip to Carson City was awesome. She had learned a great deal. Of the ten students that had traveled to Carson City, seven had moved to Nevada and three had lived in Nevada their entire lives. Out of the 10 students, only two had ever traveled to northern Nevada. Ms. Smith said the trip was a great opportunity for learning. Educating Nevada’s students, she said, gave them great pride in their state. She realized that only a select few would be able to travel to Carson City, but those students would become leaders. She urged committee members to support A.B. 312.

The Chair recognized Ms. Cegavske who asked how students were selected for the program, were there any qualifications, did their parents have to sign documents, how they found out about the program, and where did the funding come from. Mr. Leavitt said the Close Up Foundation’s biggest emphasis was on travel to Washington, D.C. While there had been local programs for quite some time, as far as he was aware, the program being requested was the first in Nevada to affiliate with the Closeup Foundation. He said there was no history as this was the first year for that particular program. Mr. Leavitt was hopeful the program would expand statewide. This year represented a pilot program in his school alone. As far as selection, the program was open to any student that would like to participate. The hope was to keep the program inexpensive enough to allow a broad range of students to apply. Selection was generally based on interest. He said obviously anyone who taught history or government would encourage their students to participate.

Ms. Cegavske asked how many students had come from his school and Mr. Leavitt said they had brought 10 students. There were 400 to 500 students attending the high school. He had traveled to Washington, D.C. with a group last year and, upon his return, learned Nevada had no such program. He felt the program would be extremely valuable and this trip had proved that.

The Chair recognized Ms. Evans who asked how the program would go "statewide." Mr. Leavitt said that was one of the reasons they had requested the $10,000. He said between now and the next legislative session, committees would be formed and publications explaining the program would be distributed to schools throughout the state. He envisioned the program would consist of four to five days and include trips to designated sites and other group activities. Newsletters would be generated and registration forms would be printed. A website would also be developed almost immediately. Most of the $10,000 would be used to start the program. The program would eventually become self-sustaining and there would be no continued need for money from the state. Participating schools would actively seek support from the business community. Mr. Leavitt said the students would be asked to contribute remaining costs which would, hopefully, be minimal.

In terms of the $10,000, Ms. Evans asked how that figure had been determined. Mr. Leavitt said he had estimated costs and added a few dollars above that to arrive at the $10,000 figure. Mr. Leavitt’s hope was the startup of the program would not require the entire $10,000. Any unused money would be returned to the General Fund. Mr. Leavitt guaranteed the responsible spending of funds. Ms. Evans requested a breakdown of the budget for the startup program.

The Chair recognized Mr. Goldwater who asked if he had heard correctly that Nevada had never participated in that type of program. Mr. Leavitt said Nevada had state participation in Close Up through trips to Washington, D.C. There had been various programs started to bring students to the state legislature and to the state capitol. He had been advised by Close Up’s state program representative that there was no record of a registered Nevada program. The program would bring students together from all geographical areas of Nevada, and they would be informed about their government process and its history.

The Chair recognized Mr. Beers who said Close Up was a great program. Addressing the students, Mr. Beers said perhaps one of them would be so inspired to actually become a legislator in the future. He explained the legislature had many financial priorities to juggle and did not know if, in the final analysis, the program would be funded. Regardless of that decision, Mr. Beers hoped the program would be carried forward. He told Mr. Leavitt about the Advanced Technologies Academy (ATA) which he should be able to contact through the school district. Mr. Beers said ATA would probably put together a website for the program at no charge.

The Chair recognized Mrs. deBraga, who asked if the program was statewide. Mr. Leavitt explained at that point it involved only Virgin Valley High School. The $10,000 would be used to develop the program statewide.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 312 closed.

The Chair recognized Lorne J. Malkiewich, Director, Legislative Counsel Bureau. Mr. Malkiewich explained A.B. 321 was an appropriation to the legislative fund for additional equipment and software for information systems for the Legislative Counsel Bureau (LCB). Mr. Malkiewich referred committee members to (Exhibit J), a detailed description of the computer projects appropriation. He said the appropriation could be found within The Executive Budget. Rather than have the budget of information systems fluctuate like a roller coaster, there was a separate appropriation request for the needs of information systems for the next biennium. He said LCB had worked with its subcommittee on computer applications to develop the proposal, and during the interim, worked on reallocating or reprioritizing the expenditure. He said last session the appropriation was for $1.2 million. The current request was for $874,000.

The Chair recognized Allan Smith, Manager, Information Systems, Legislative Counsel Bureau. Mr. Smith said Exhibit J reflected a number of projects that had been identified as areas that either needed to be continued, or that information systems would venture into with respect to computer-related projects.

One exception was the upgrade of the existing telephone system. He explained the executive branch had started a program to replace the existing system with a Lucent Technologies system. The Legislative Counsel Bureau had become part of that replacement program. As information systems had looked at the implementation of the system, there were several issues of concern. Those issues regarded security and the ability to have adequate phone lines, and the assignment and deassignment of phone lines as needed. He said the security issue dealt with the fact that anyone within the state system could access voice mail messages. By purchasing a stand-alone system, that access would be blocked.

Mr. Smith said the next item was that of reapportionment. The $225,000 request was for the purchase of software and hardware for the 2001 legislative session redistricting process. He said information services intended to supply the same support it had in 1991 whereby there were four stations available, two for each house, and one for each caucus in each house. Also included would be support stations in the Research Division, Information Systems, and the Las Vegas office.

The third item Mr. Smith brought forth was the front desk upgrade at a cost of $145,000. As committee members realized, there were a few issues outstanding with regards to the new computer system application at the front desk. Other issues involved upgrade of the software products, particularly the data base software.

The last items Mr. Smith brought to committee members’ attention were found on the second page of Exhibit J, and had not been included in the initial request for funds. One was the replacement of the wireless system at a cost of $100,000. The antennas and network cards for the existing wireless system were no longer manufactured and there was a concern information systems would be unable to maintain the system in the upcoming session. The $100,000 was based on the maximum cost for full replacement of the existing system with a wired network. A wired network would require extending current network wiring to all committee member seats in all committee rooms, completing wiring in chambers, and additional switches and hubs to allow for necessary connection points in committee rooms, chambers, and each legislator’s office.

The Chair recognized Vice-Chair Evans who asked if the replacement system would be new or an upgrade. Mr. Malkiewich recalled in 1991 it had been the intent of LCB to develop a system that would be compatible with equipment existing in 2001. By 1995 it became apparent that was not possible. The technologies had advanced to such a degree that LCB would not want to use a ten-year-old dinosaur. It was his understanding some old plotters may be used, but the majority of the equipment would be new. The new equipment would be at a fraction of the cost of software used eight years ago. Mr. Smith explained there were several issues involved with the new system. First, the company that was selected for software in 1991, ESRI, no longer supported its wireless application. He said information systems was looking at a new system that would use ESRI’s GIS software as a base, yet performed the redistricting of population and tiger files. There were three companies that provided that kind of service. The price for the software varied from the $5,000 to $10,000 range up to about $100,000. Mr. Evans asked how soon the issue needed to be resolved. Ms. Smith said work was already underway with the phase II position of redistricting. That amounted to the collection of information and providing that information to the Census Bureau. The Census Bureau would then give information systems the districting information. He said information services would require some lead time in terms of a final which it hoped would be made within the next year.

The Chair recognized Mr. Beers who asked how much the redistricting systems cost ten-years-ago. Mr. Smith said that information would be provided. Mr. Beers wanted to explore the use of a proxy server for internet usage. A proxy server would speed up access for the legislators and staff. Mr. Smith said one of the reasons a proxy server was not in use was the issue of availability of information in terms of public access.

Mr. Malkiewich said he recognized adding $180,000 to an appropriation was not something committee members were willing to do. The subcommittee on computer applications looked at priorities in the interim. If it was determined money was saved from one of the other projects, the replacement of the wireless system and digital recording of committee meetings would be the priorities.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 312 closed.

The Chair recognized Lorne J. Malkiewich, Director, Legislative Counsel Bureau. Mr. Malkiewich explained one of the duties of the Legislative Counsel Bureau was to sell the Nevada reports. NRS 345.025 required the Legislative Counsel Bureau to reprint those reports that were either out of print or in limited supply. He said inventory was assessed during each legislative session and the division determined the number of documents to be printed. The appropriation request of $76,350 was included in The Executive Budget.

The Chair recognized Mr. Marvel who asked how much money was generated from publications. Mr. Malkiewich said no money was generated from reports. In fact, the Legislative Counsel Bureau had, in the past, approached the Interim Finance Committee for an adjustment to the price. He said if the Legislative Counsel Bureau (LCB) was breaking even on reports, it was doing well. Basically, the program saved the state money. LCB had a publications unit that provided Nevada Revised Statutes to the people of Nevada and already had a system in place to sell books to attorneys. It made sense for LCB to handle the sale of all Nevada reports and combine the overhead with its own.

The Chair asked if there was further testimony in opposition to, or in favor of, the legislation. There being none, the Chair declared the hearing on A.B. 322 closed.

The Chair recognized Jacqueline Sneddon, Chief Clerk of the Assembly, to present the budget for this agency. With Ms. Sneddon was Jan Thomas, Secretary of the Senate. Ms. Sneddon explained the interim budget represented funding for the office of Chief Clerk of the Assembly and the Secretary of the Senate whose staff was responsible during the interim period for finalizing the work of the preceding session, preparing for the next session, assisting legislators, and providing information and help to the public as needed.

Ms. Sneddon referred committee members to (Exhibit K), a handout which listed some of the interim responsibilities. She explained the base budget included four current permanent positions and reflected the out-of-state travel for those positions to attend professional meetings and training seminars. Also in Exhibit K was a list of those affiliations and the costs inherent to that travel. Under the maintenance portion of the budget, a request was being made for the upgrade for the two senior clerical staff, one in each house. Ms. Sneddon explained the responsibility of those positions had increased over the years to include more job duties and decision-making responsibilities. The upgrade would bring those positions in-line with like positions at the Legislative Counsel Bureau (LCB). A request was also being made for two administrative assistant positions hired during the interim to be established as permanent, full-time positions, one in each house. Ms. Sneddon said now that programming was being done in-house, it was important to have a coordinated effort between information services and the front desk systems to ensure all technical and procedural responsibilities were met. Those positions would be dedicated to the preparation of camera-ready information and indexing of the finalized journal.

The Chair recognized Lorne J. Malkiewich, Director, Legislative Counsel Bureau (LCB), to present the budget for that agency.

Mr. Malkiewich explained he would present the overall budget and the budget of the Legislative Commission and the Administrative Division. He would then turn the floor over to the division chiefs for presentation of their separate budgets.

He referred committee members to page L-1 of (Exhibit L), a copy of The Executive Budget and said a comparison of 1998-99 work program to the 2000-01 agency request reflected an increase in the appropriation of approximately 6.7 percent. The overall appropriation increased approximately 8 percent. Mr. Malkiewich explained the vast majority of the increase in LCB’s budget was in the area of workload changes. He did not feel the 8 percent increase was an unreasonable request.

Page L-3 of Exhibit L was the budget for the Legislative Commission. Mr. Malkiewich said the commission’s budget was basically flat. The total appropriation for the last biennium compared to the current biennium was almost identical. The total represented a reduction of three tenths of one percent. He said the only area reflecting a budgeted increase was in the area of the annual financial audit of the legislative and contingency funds. That item reflected a $2,000 increase because LCB had not engaged in the bid process for four years.

Page L-5 of Exhibit L was the budget for the Legislative Committee on Education. Mr. Malkiewich said that budget had been reduced substantially. He said there had been a log of start-up costs in the figures reflected during the last biennium that were not continued in this biennium. The expenditure line reflected money to support the expenses of the committee for the next biennium.

Page L-6 of Exhibit L would begin the budget of LCB, starting with the Administration Division. Mr. Malkiewich said (Exhibit M) would reflect the performance indicators of the various divisions of LCB. Page M-2 of Exhibit M were the performance indicators for the administrative division and included customer satisfaction indicators, as well as volume and overall indicators. The volume measures showed committee members the increased work volume over time. The administrative division budget showed only a 2.2 percent increase in appropriation. Mr. Malkiewich explained there was no large increase this biennium compared to the major increase request of the last biennium as the result of the building addition. He said the administrative division, director’s office, achieved only 7.4 percent of its performance indicators from the last biennium. Those indicators had intentionally been set high. The division was not shooting for average service, rather, exceptional service. He felt that was the only way the division could stay at the level of service the legislature had come to expect.

Referring committee members back to page L-7 of Exhibit L, Mr. Malkiewich said Decision Unit M-200 proposed the addition of 3 full-time staff; one Janitor position at grade 23, and two Media Service Technicians at grade 32. LCB had underestimated the need for janitorial services when the building was finished. Additionally, media services was the most rapidly-expanding area. Between video conferencing and sound systems in the committee rooms, media services work had increased substantially.

Mr. Marvel asked the interim duties of those positions. Mr. Malkiewich explained the duties were similar and included work for interim committee meetings. He explained meetings were held constantly in the various committee rooms. Mr. Marvel asked if LCB was reimbursed by outside entities when they used the committee rooms at LCB, and Mr. Malkiewich said no. LCB was, however, reimbursed for videoconferencing. He said for the most part it was other state agencies that used the committee rooms. The University System had used Room 3137 during the interim to conduct night classes. Having the ability to use LCB’s committee rooms alleviated the need for other agencies to include those types of usage costs in their budgets, thereby saving the state money.

Mr. Malkiewich pointed out the other increase that appeared under Decision Unit M-200, was in utilities. He explained the reason those numbers had increased substantially was LCB had a very low base year and did not want to count on having another in which its utility costs were quite so low. The M-300 Decision Unit included an upgrade for the Chief of the Legislative Police from grade 37 to grade 39 to correspond with the upgrade given to the Chief of the Capitol Police during the last legislative session. He said detailed justification of all upgrades requested in the budgets of LCB would be provided to committee members.

Decision Unit E-710 reflected the upgrade of 34 personal computers. In summary, Mr. Malkiewich explained LCB’s information systems unit worked with division chiefs to determine which obsolete equipment required replacement. To save money, LCB generally purchased the computers used during session for use by its staff. Committee members would be provided with the background information regarding that request. Also included in that decision unit was a request for funds to replace a passenger van used by the legislative police at a cost of $26,000. Decision Unit E-720 was requesting funds to purchase a Bobcat Loader for the grounds unit at a cost of $26,900. The loader was a tremendously flexible piece of equipment and would replace worn out equipment. He said also included in that decision unit was a request for $6,240 to purchase two defibrillators and additional monitors for the legislative police. Mr. Malkiewich explained if the defibrillator could be used within two minutes after a heart attack, the save rate went from 16 percent to 80 percent.

The Chair recognized Mr. Goldwater who said the 1997 legislature had passed legislation to protect casinos from liability regarding the use of defibrillators. He felt the individuals using the defibrillators would be open to liability. The state would not be protected under the Good Samaritan provision, nor would they have much immunity. Mr. Malkiewich said people within the various divisions of LCB would be trained in first aid and emergency response and, specifically, in the use of the defibrillators. He assured committee members the liability issue would be covered.

Decision Unit M-730, maintenance of buildings and grounds, had actually been cut from LCB’s last budget. Mr. Malkiewich said LCB’s interpretation of budget instructions was for maintenance figures to be shown in the base budget as an enhancement. The actual expenditure in FY 1998 was shown in the base. FY 1998 expenses were $239,147, which included $117,635 for asbestos abatement. Decision Unit E-845 represented the payoff of unused sick leave and annual leave in the amount of $44,000 in anticipation of the retirement of four staff persons. He said additional funds has also been requested for staff to attend technical training classes.

Page L-11 of Exhibit L was the budget summary. The summary reflected an increase in number of positions from 69 to 72.

Referring to page L-10 of Exhibit L, the Chair commented the legislature was not in the habit of funding the buyout of unused sick and annual leave for most state agencies. Mr. Malkiewich said LCB was aware the four individuals would be retiring and would pay the accrued leave balances off even if they had to pay them out of salary savings.

Mr. Malkiewich introduced Gary Crews, Legislative Auditor, Audit Division, Legislative Counsel Bureau, to present the budget for that division. Mr. Crews explained the division’s budget was relatively flat. An increase of approximately 5.9 percent had been requested in total expenditures over the first year of the biennium, and 5.2 percent in the second year of the biennium. He said those increases were primarily driven by the request for additional staff; two Deputy Legislative Auditors, one in each year of the biennium. The division had also requested two university interns. He pointed out only two positions had been added since 1987 and resources had been stretched as far as possible.

Referring committee members to Decision Unit M-200, Mr. Crews explained that request represented the two new positions alluded to in earlier testimony. That decision unit also requested an increase in in-state travel to conduct audits in the amount of $10,870.

The Chair recognized Mr. Marvel who asked the turnover rate of the division. Mr. Crews responded there had not been any turnover in the division for approximately 18 months. Prior to that, there had been extensive turnover. Mr. Marvel asked if the two new Deputy Legislative Auditors would be Certified Public Accountants (CPAs). Mr. Crews said he did not know at that time. He said the division had tried to balance its staff and over the last few years had reduced the number of CPAs. The division had been trying to recruit individuals with a Master’s Degree in economics, MPA’s, MBA’s and so on. Mr. Crews felt a blended staff worked well with the type of audits the division performed.

The M-200 decision unit also requested an additional $15,415 for an expected increase in computer facility usage. Many audits dealt with agencies such as Human Resources, Employment Security, and Taxation, all of which had major computer applications.

The M-300 decision unit included a requested upgrade of the division’s two clerical positions; the office manager from grade 31 to 33, and an audit secretary from grade 29 to 31.

The E-710 decision unit provided for the authority to replace eight laptop computers in FY 2001. The purchase of six portable printers in FY 2000 was also included. Mr. Crews said the division attempted to turn over its computers every three years to keep up with the changing technology. Decision Unit E-720 requested authority for the division to purchase nine portable printers and accompanying cases in FY 2001. Most audit staff worked in the field and had a need for printers. Decision Unit E-845 requested authority to purchase off-the-shelf statistical and audit software in both years of the biennium.

Mr. Crews said the division’s basic thrust was additional staff.

Mr. Malkiewich introduced Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), to present the budget for that division. Mr. Stevens referred committee members to pages M-7 and M-8 of Exhibit M and said the division would like any suggestions from committee members as to how it could improve its performance indicators. The new indicators provided by the division included the new satisfaction survey information that reflected how the legislators rated division services. He said the other performance indicators were more work process related, i.e., the number of budget highlights, bill explanations, fiscal notes, reports, and interim studies completed. Those indicators also included completion time frames.

Mr. Stevens referred committee members to page L-17 of Exhibit L and explained the division’s overall budget reflected a 3.5 percent increase in the upcoming biennium compared to the current biennium. The division had made a number of base budget adjustments that included the annualization of in-state and out-of-state travel and operating expenses because the education accountability section staff had not been hired until half-way through the year. Some one-time remodeling costs for the relocation of the audit division staff to the second floor of the staff office building had also been removed from the division’s budget.

Mr. Stevens explained Decision Unit M-100 reflected inflation factors. The workload changes in Decision Unit M-200 reflected annualized costs for training of the education accountability section. That decision unit also provided for contract costs. There were three or four areas that required monies for contract purposes.

The Chair recognized Mr. Marvel who referred to Decision Unit M-100 and asked if $205 would suffice. Mr. Stevens said the division had used existing criteria to develop that amount. Mr. Malkiewich added the Legislative Counsel Bureau had followed the budget instructions in calculating inflation for the different categories.

Returning committee members’ attention to Decision Unit M-200, Mr. Stevens explained the majority of the funds represented contract service dollars to be used by the education accountability staff in conjunction with the Academic Standards Council and Education Technology Commission. He said there were a number of contracts this fiscal year which allowed the Academic Standards Council to utilize some outside expertise to review its work product. The division would recommend the continuation of those funds in the amount of approximately $40,000 in each year of the biennium.

Mr. Stevens explained Decision Unit E-710 requested replacement of four personal computers, three of which were 486 machines, and one was a Pentium. Decision Unit E-720 requested $2,000 in each year of the biennium for replacement equipment, file cabinets, and bookcases. Finally, Decision Unit E-845 requested funds for carpet replacement in the amount of approximately $30,000. Mr. Stevens explained the division was on the third floor of the staff office building and was the last division remaining with the original carpet. The first and second floors had been re-carpeted. If reductions needed to be made in the division’s budget, the current carpet would probably last another two years.

Mr. Malkiewich introduced Brenda Erdoes, Legislative Counsel, Legislative Counsel Bureau (LCB) to present the budget for that division. Ms. Erdoes referred committee members to page L-23 of Exhibit L. She explained the majority of the increase in maintenance in the division’s budget was the request for four new positions. Except for one attorney, those positions were all continuing session hires. Two of the positions were paralegals. Those positions had been a great asset during this session and she believed would continue to be a great asset during the interim. Ms. Erdoes explained the division had tried to switch as many tasks as possible from attorneys to paralegals. She felt productivity would continue to increase with the use of paralegals. The division had also asked for a proofreader. The volume of pages had increased greatly both during session and in the interim. She said there were more and longer administrative regulations which had caused the division a great deal of work during the interim. The fourth position was an attorney. During the last interim the division had not met its statutory regulation deadlines on a regular basis. From the survey of legislators’ needs, it appeared the division was not getting its opinions back as quickly as they would like.

The Chair recognized Mr. Marvel who asked what the turnover rate was with regard to paralegals. Ms. Erdoes replied there had not been much of a turnover rate. Those positions had worked out very well. She said one young man had left the division to attend law school.

The Chair recognized Mr. Price who asked the competency level of the paralegals hired by the division. Mr. Erdoes said the division’s paralegals had an excellent knowledge of the law and paid great attention to detail. The division had very good luck with providing its paralegals with additional legal training.

Ms. Erdoes explained Decision Unit M-300 requested 13 upgrades to its technical and clerical staff. Nine of the upgrades were related to clerical positions that had been ignored for some time. Those positions were related to word processing. She explained those positions used to perform straight typing and comparison proofreading only. Now, those positions had been cut back and the division used computers. Ms. Erdoes pointed out the division provided a great deal of training to those positions only to have them move on to positions that compensated them for that knowledge. She said the division found itself in the position of continually retraining. The other four upgrades were related to the transfer of duties from attorneys to other staff within the division. For example, she said, the oversight of the paralegals used to be done by attorneys. That function was now performed by the editors.

Decision Unit E-710 requested money for office equipment and computers. The recommendations of information services had been followed to generate the requested dollar amount. Decision Unit E-845 requested funding to allow the division to produce a new publication, the "Traffic Manual." Distribution for that publication was at 1,600. Ms. Erdoes did not feel extra time would be incurred by staff to accomplish that task because the division already published the Nevada Revised Statutes. The price the manual would be sold for would cover the cost of printing.

Vice-Chair Evans asked the criteria used to determine upgrades and referred committee members back to Decision Unit M-300. She pointed out that of the 50 plus positions in the division, 13 would be scheduled for upgrade. Ms. Erdoes said the division had evaluated its needs and, in view of the high turnover rate in its technical services unit, was attempting to compensate staff for its level of training and thereby keep them on board for longer than a year at a time. She explained the one-grade increases reflected the transfer of additional duties. One example of transfer of additional duties involved work related to the development and distribution of the Nevada Register.

The Chair recognized Mr. Marvel who said it was important not to have disparity between divisions. Mr. Malkiewich said it was always a problem trying to keep positions comparable between divisions.

Vice-Chair Evans said one concern of the committee was the condensed legislative session and its impact on the Legal, Fiscal, and Research Divisions of LCB. She realized the real pressure was on the staff of those three divisions to do more in less time. Committee members would be interested in knowing the impact of a limited session on LCB staff. Mr. Malkiewich said one area in which they hoped to receive relief was that of bill draft limits. He said LCB would be introducing a bill through the Legislative Commission that would address bill draft limits for next session to provide a more reasonable flow of work.

The Chair recognized Ms. Chowning who, after looking at figures provided by the division, noticed the difference in bills and resolutions delivered had decreased approximately 10 percent, while the research had increased 29 percent. She said she wanted to believe the 10 percent decrease was the result of excellent research. Not taken into consideration was the 6-month versus 4-month time frame.

Mr. Malkiewich introduced Bob Erickson, Research Director, Research Division, Legislative Counsel Bureau (LCB) to present the budget for that division. Mr. Erickson said there would be three major factors impacting and driving the division’s budget over the next two-year period. The first was the upcoming redistricting and reapportionment effort. That project would start immediately and involve several staff members. The second factor was the continued growth in the numbers of requests received from legislators. There had been a 29 percent increase from the past biennium to the current biennium. Another growth area related to the thorny, difficult kinds of problems legislators received from their constituents and other issues that did not lend themselves to an easy answer. The third factor was the committee on high level radioactive waste. The division had received funding for that committee in the past but would not in the future. The dollar amount to keep the committee going was approximately $50,000.

Mr. Erickson explained Decision Unit M-200 requested three new staff positions; a Principal Research Analyst that would work primarily to coordinate and direct the efforts related to constituent information. He said there needed to be a better way to address those kinds of inquiries. That position would assist, in some degree, with the reapportionment effort. The second position was a Sr. Research Analyst. That staff person would have a significant role in working with the interim committee on redistricting and then through the next legislative session. The Sr. Research Analyst would also pick up some of the extra workload that had been generated through the growth in demand for division services. The final position was a Sr. Research Secretary. The secretary would primarily serve the two new staff positions, and also function as a public contact person.

Decision Unit M-300 requested the authority to reclassify a Principal Research Secretary from a grade 31 to a grade 33. Mr. Erickson said only one upgrade was proposed within the division. The duties of the office manager had gotten broader and it was anticipated that position would pick up some of the slack in the area of personnel evaluations for the secretarial work force in the division, time and leave records, and other related duties.

Finally, Decision Unit E-710 requested the authority for computer upgrades and the upgrade of laptops that had been purchased in 1996 or, as an alternative, the purchase of new laptops. That cost would be incurred in the year 2001.

Mr. Erickson said the division had received rather high marks in its performance indicators and that information was available for review in Exhibit M.

The Chair asked committee members be provided with a priority list of the new positions requested.

Mr. Malkiewich addressed the last three budgets; the Legislative Committee on High-Level Radioactive Waste, the Legislative Committee on Workers’ Compensation, and the Industrial Insurance Researcher which were positions housed within the Research Division. Since there were no longer pass-through monies from the Office for Nuclear Projects, it had become necessary for LCB to absorb 100 percent of the costs of operating that committee. He explained the Legislative Committee on Workers’ Compensation was funded by a transfer of funds from the Division of Industrial Relations and represented a continuation of existing programs.

There being no further business, the meeting was adjourned at 11:00 a.m.

RESPECTFULLY SUBMITTED:

Debbie Zuspan,

Committee Secretary

APPROVED BY:

Assemblyman Morse Arberry Jr., Chairman

DATE: