The Subcommittee on Human Resources/K-12 was called to order at 8:15 a.m., on Tuesday, April 20, 1999. Senator Raymond Rawson, Chairman, presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:

Mrs. Jan Evans

Mr. Joseph Dini, Jr.

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Parks

Senator Raymond Rawson, Chairman

Senator Bob Coffin

Senator Bernice Mathews

Senator William Raggio

SUBCOMMITTEE MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Chairman Rawson advised there were a number of budgets scheduled and the subcommittee would commence with the hearing for MH/MR Administration.

Bob Guernsey, Principal Deputy Fiscal Analyst, Legislative Counsel Bureau (LCB), advised the subcommittee that the budget included proposed technical adjustments, which would adjust computer prices, and would transfer in a Clinical Program Manager to allow for the collection of Title XIX funding of approximately $10,000 each year of the biennium.

The budget had been previously reviewed by the subcommittee, and Mr. Guernsey noted there were two issues under consideration. The first issue dealt with funding for the Psychiatric Resident program. The Executive Budget eliminated funding in the amount of $174,720 each year for the program, which had been funded in the division’s administration budget and transferred to the medical school based upon the billable hours worked by the psychiatric residents. According to Mr. Guernsey, at its last meeting the subcommittee requested the division work with the medical school to ascertain if there was a way to potentially reduce the program cost of $174,000 each year of the biennium. Also, to look at the possibility of capturing additional federal funds to offset the services provided by the psychiatric residents, possibly in the medical clinic or the outpatient treatment area.

Chairman Rawson instructed Dr. Brandenburg to come forward and discuss whether or not the cost of the program could be reduced, and the possibility of generating billing revenue. When the state committed to such a resident program, there were residents in the "pipeline," there was faculty to consider, and Chairman Rawson did not feel the legislature could easily "step out" of the program. He indicated the subcommittee should look at the possibility of managing the program economically, as he felt it would be in everyone’s best interest to save the resident program.

Carlos Brandenburg, Ph.D., Administrator, Division of Mental Hygiene and Mental Retardation, informed the subcommittee he had met with the appropriate persons to discuss the possibility of accessing federal match funds for the program. Currently, the Nevada Mental Health Institute was drawing Medicaid and Medicare as part of the cost allocation reported. The resident program was part of that, and the information received by Michael Torvinen, Administrative Services Officer IV, was that the division was at the maximum in that particular federal program.

Dr. Brandenburg explained the only other area the division could possibly explore was in vacancy savings. He stated Mr. Torvinen had completed an analysis for the last 2½ years of the division’s involvement with the resident program, which resulted in approximately $12,600 in vacancy savings; the subcommittee might want to consider reallocating that savings, thereby bringing the total budget down from $174,000 to $162,400. Dr. Brandenburg noted if the subcommittee needed specific information regarding that savings, Mr. Torvinen was present at the hearing.

Chairman Rawson invited Dr. Grant Miller, Residency Training Director, Department of Psychology, University of Nevada, Reno Medical School, to come forward and explain to the subcommittee what the benefits of the residency program were, along with any other insights he might wish to convey.

Dr. Miller stated the involvement at the Nevada Mental Health Institute made the program a much better residency. Exposure to patients at the institute was good for residents in terms of exposure to severe psychiatric disorders. He felt patients also benefited from the program because there was more contact with the resident doctors, thereby improving the care.

Chairman Rawson inquired how many residents were in the program. Dr. Miller advised the program was accredited for 16 residents, 4 in each year of the 4-year program. Chairman Rawson then asked if there was a contractual responsibility to those residents when they entered the program, and also asked if funding were cut from the budget, would the residency program continue. Dr. Miller noted it would be very difficult, and he felt the quality of the residency would certainly be negatively impacted. What would that do to the school generally, accreditation- wise, et cetera, when it started losing residency programs, inquired Chairman Rawson. According to Dr. Miller, it would negatively effect the school in general because the accreditation standards for such as internal medicine and family practice demanded that students be involved in, or "rub shoulders" with psychiatric residency, so it improved the quality of other residency programs within the university.

Chairman Rawson asked about the benefits to patients. Dr. Miller responded that there were benefits to patients for a number of reasons. He felt the staff psychiatrist’s level of quality improved, the teaching staff psychiatrists who came to the institute improved, and education was emphasized to a greater extent in that setting, so the standard of psychiatric services improved. Further, Dr. Miller stated the patients, of course, were the ones who would ultimately benefit from that quality of care. Chairman Rawson noted when the subcommittee reviewed the issue in the past, it wanted the residency program because it felt such a program would raise the standard of patient care, and would generally require a higher level of hospital competency. Also, there had been some accreditation problems and it would help recruit psychiatrists because of the joint appointment with the university. Chairman Rawson indicated he felt none of those things had changed, and did not think the subcommittee wanted to drop the program.

Senator Mathews agreed with Chairman Rawson, stating the subcommittee needed to look at the program seriously. Thinking back to her days in the nursing field, Senator Mathews noted nursing students also completed rotations at the institute. She indicated it was always beneficial when there was a teaching situation, both for the institution and for the patients. It kept everyone on their toes because there were students who observed and then reported their observations. Senator Mathews felt such programs improved the service for everyone, and the university could not afford to lose such a program.

Senator Raggio inquired if the approximately $174,000 each year was strictly the stipend for the residents; Dr. Brandenburg replied in the affirmative. The narrative portion of The Executive Budget indicated the residency program would be terminated unless the university wanted to pick up the funding, which Senator Raggio felt put the legislature in almost a "Hobson’s choice" situation, and he inquired why that decision had been made.

According to Senator Raggio, the university had already been curtailed in its funding, let alone on the growth factors, and he advised he found it hard to understand terminating a program in the middle. Senator Raggio stated there was a residency program in psychiatry in place at the university, and now the university was being told if they wanted the program to continue they had to pay for it. It seemed to him there was a moral commitment to keep the program functioning, unless Dr. Brandenburg reported the program was of no value to the institute. The program undoubtedly was of value to the students, as it allowed them and the university to continue psychiatric residency, and Senator Raggio indicated he was under the impression the program was of considerable value to the institute.

Don Hataway, Deputy Budget Administrator, Budget Division, reported the division did "wrestle" with the fiscal situation, in an attempt to put as much money as necessary into the caseload growth of the other divisions within Human Resources, and the psychiatric residency program was simply one area that was targeted. From his experience with the university, Mr. Hataway explained the medical school budget was fully funded, and the shortfall experienced in the budget for the university was on the enrollment, or campus budgets.

Senator Raggio stated he understood there were some areas in the medical school budget that were underfunded as well. Mr. Hataway stated there were enhancement items that, obviously, the budget division did not fund. The rationale was that the state was providing a teaching site for the Medical School, which was a benefit to its psychiatric residency program. Also, noted Mr. Hataway, the school did fund residency from its operating budget in other programs, so the Budget Division felt the psychiatric residency program would possibly be something of a priority to them also; he indicated it was a two-way street. He stated the school also had offline funding sources through private, non-profit organizations, so the Budget Division felt if the state provided the teaching site, it would benefit the Mental Hygiene, Mental Retardation Division.

While he would not disagree with Mr. Hataway, Senator Raggio emphasized it was a departure from what the state had done in the past. Mr. Hataway advised he understood, but that was the thought process behind the decision, and if the subcommittee felt the psychiatric residency program was a priority that needed to be added back into the budget, then the Budget Division would comply.

Senator Raggio stated he would move that the Psychiatric Residency program be placed on the priority list, as he felt it was a matter of high priority. Chairman Rawson advised the subcommittee was not yet ready to accept a motion, and called for further discussion.

Mrs. Evans agreed that the subcommittee had expressed concerns during previous meetings over the issue, and she had recently met with the effected parties in order to discuss what action might be taken to perhaps reduce the General Fund "hit," because that was what the subcommittee was protecting. Clearly, it had been outlined that it was harmful to an educational program to lose a residency, and it would also have an impact on staffing and patient care. Mrs. Evans felt there were some important considerations for the subcommittee. Dr. Brandenburg and Mr. Torvinen were able to come up with an approximately $12,000 reduction from vacancy savings, and were also looking at some possibilities which might arise from the Medicare issue. However, Mrs. Evans advised, she understood if that were the case, the institute would have to go through additional accrediting or review for proper designation to see whether or not Medicare funds could be channeled in. Unfortunately, that could not be done in the few weeks remaining in the session, and would take several months to complete. It would not effect the budget closing by the subcommittee, but might hold prospects for the future.

Senator Mathews mentioned that there was no cost for the nursing students who rotated through the program, except for institutional costs from the colleges they represented. She wanted to caution the subcommittee that when budgets were reduced for the medical school, it indirectly reduced budgets in all of the health care areas that used the institute for residency rotation. If the institute was not accredited, and did not have a residency program, all health care areas would be effected. It was the only institution in the northern part of the state that offered space in psychiatric training for nurses, and Senator Mathews advised she wanted to caution the subcommittee that it was not just doctors who would be effected, but the other health groups also. If the institute were not accredited, nursing students would not be able to take their boards. Further, she noted, whatever happened with the residency program would create a "domino" effect.

Dr. Miller explained the budget for the resident programs came from each of the participating institutions. The medical school did play a part in funding his position as the Residency Director, but did not fund the resident’s salary and benefits. He noted West Hills Hospital, Reno Veterans Administration Hospital, Nevada Mental Health Institute, and various rural mental health clinics all paid a "piece," and that was how residencies were traditionally funded. They did not come under the medical school budget.

Chairman Rawson stated the subcommittee did understand that, and thanked Dr. Miller for his testimony. There was another issue to be discussed by the subcommittee, and that was regarding the Accountant Technician position, which was also lost in the budget. Chairman Rawson stated in the attempt to capture additional revenue, that might be an important position.

Mr. Guernsey explained The Executive Budget was constructed eliminating several positions, which had remained vacant for an extended period of time. There were four positions within the Division of Mental Health, Mental Retardation which were eliminated as part of that process. One of those positions, stated Mr. Guernsey, was an Accountant Technician within the division’s administration budget. He noted the division had been attempting to recruit a person to fill that position through the Department of Personnel. The division was attempting to reclassify the position when the hiring freeze went into effect, and The Executive Budget was in the process of being constructed. The division had provided additional information and appealed the elimination of the position, and was requesting a Management Analyst II position be added back into the budget. Mr. Guernsey stated it appeared an integral part of the position’s duties would be tied to the Rural Mental Retardation Services budget, and would be involved in the Title XIX waiver program. He pointed out that the annual cost of that position was approximately $44,800.

Mrs. Evans announced she would like to close the budget if at all possible, and felt the discussion had gone as far as it could with the agency at the present time. She noted Charlotte Crawford, Director, Department of Human Resources, had participated in earlier discussions and was attempting to work with Medicaid. Mrs. Evans stated she did not feel there was anything else the subcommittee could achieve in terms of additional sources of funding to support the budget for the psychiatric residency program.

Mrs. Evans disclosed she was an employee of the University of Nevada, Reno, however, closing the budget would have no effect on her position.

Mr. Hettrick stated he was under the impression the subcommittee was considering adding the $174,000 figure to the "wish list" and, while he did not have a problem with restoration of the position, he requested clarification regarding the funding.

Chairman Rawson stated the figure the subcommittee was considering for funding the program was $162,400, and inquired if there was a second to the motion.

Mr. Dini noted the transfer of a Clinic Program Manager from Rural Mental Retardation, and inquired what that transfer would mean to the rural program. Dr. Brandenburg advised the transfer would allow the division to actually realize some additional Medicaid funding for the position, which would allow coordination of the Quality Assurance (QA) functions throughout rural clinics in a more centralized manner, actually streamlining the entire process. He felt Mr. Dini would be pleased with the program.

Mr. Hettrick once again requested clarification regarding the vacancy savings, and would the subcommittee be required to take additional action, or were the vacancy savings already included in the budget. Dr. Brandenburg advised the $162,400 was sufficient, because the $12,600 vacancy savings were included in that figure.

Senator Raggio indicated he would support the motion, even though he had suggested placing the funding matter on the priority list. First of all, he felt it would send a terrible signal to pull the funding from a residency program, and looking ahead, if the priority list was addressed in a responsible manner, a savings could be realized. On that premise, Senator Raggio conveyed he would support the motion.

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Mr. Guernsey informed the subcommittee the next three budgets were the Regional Mental Retardation budgets, and he would provide some history for the subcommittee. The State of Nevada lost a lawsuit, Perry vs. Crawford, which dealt with individuals with conditions related to mental retardation, who were Title XIX eligible in other states, however, were not recognized as such by the State of Nevada. The Executive Budget was constructed to fully fund persons with related conditions. Mr. Guernsey stated under M-600, The Executive Budget provided funding in support of 187 clients with related conditions, and definitely recognized and addressed the needs of those individuals. It also provided for a full array of services, case management, jobs, day training, community training centers, and residential care.

In addition, Mr. Guernsey advised, The Executive Budget was constructed at the time when the Budget Division was facing some fairly severe revenue restrictions. The budget also took the client waiting list into consideration, however, did not have sufficient funding to deal with it in total. The Budget Division reviewed the list, applied a utilization rate, and funded 25 percent of that waiting list. He noted the projected residential unmet waiting list would consist of 187 clients by the end of FY 2001.

Mr. Guernsey stated there were three plans for the subcommittee’s consideration.

• The Medicaid budget was constructed with 54 new ICF/MR small beds. The division indicated it only needed 30 beds, therefore, the funding for the remaining 24 ICF/MR small beds could be utilized in an attempt to meet some additional waiting list demands. The plan would fund 25 percent of the potential waiting list, but would still leave 187 potential clients in need of residential services.

The subcommittee previously instructed the division to review the issue again, and Dr. David Luke, Associate Administrator for Mental Retardation, Sierra Regional Center, Dr. Brandenburg, and Mr. Torvinen, along with other staff members, worked together with Ms. Crawford and the department staff on that review. Mr. Guernsey noted there was potential litigation facing the state in reference to the lengthy client waiting list, and the National Disabilities Advocacy and Law Center (NDALC) indicated they would pursue litigation if a client remained on a waiting list in excess of 90 days. That was based upon litigation filed in the State of Florida which required the state to provide ICF/MR small bed services to a full array of clients. Mr. Guernsey related ICF/MR small beds were extremely expensive with costs from $225 to $350 a day, which equated to approximately $10,500 per month.

• The next plan for subcommittee review would reduce funding for the 24 ICF/MR small beds in the Medicaid budget, which the division advised were not necessary. In addition, stated Mr. Guernsey, Dr. Luke and his staff reviewed the services provided at the regional center by state staff and at state expense, and felt six ICF/MR small beds could be eliminated in Las Vegas. Those beds were being operated by state employees, and funds could be reallocated to other residential services to meet the needs of clients. The plan also called for elimination of two units, consisting of 6 beds each, on the Northern Nevada campus and reallocation of those funds to meet the needs of the clients. Mr. Guernsey suggested division staff review the plans for the subcommittee.

Chairman Rawson noted he would support the division or "waiver" plan, which would totally eliminate the 54 new ICF/MR small beds from the Medicaid Budget, and place clients in the community in three levels of supported living arrangements, which would leave 45 unserved projected placements. He felt that plan addressed the issue of the waiting list, and asked the division to inform the committee if it should be made aware of any negative aspects of the plan.

Mr. Torvinen explained when the division was asked to suggest ways to reduce the waiting list, particularly the time frame, Dr. Luke formulated the "waiver" or "division" plan, which was the third plan for the subcommittee’s review.

• The plan would provide residential placements to 142 additional clients over the biennium, while at the same time freeing up approximately $1.6 million in General Fund money. In accordance with the plan, the division would close 18 state run ICF/MR beds, and that would move the division closer to its extended vision of providing services in the community, rather than institutional settings. It would also eliminate funding in the Medicaid budget in support of the 54 ICF/MR small beds.

Mr. Torvinen advised the division had created a third level of supportive living arrangement service, called the Intensive Service Plus (ISP) level. It was somewhat more expensive, with the main difference being in the use of licensed staff to provide those services to clients. He noted that, in itself, would create a higher cost, but would still be substantially less than the cost of an ICF/MR bed. Further, explained Mr. Torvinen, the plan essentially would take 113 people and put them in the service in the first year of the biennium. The division assumed each of those people would average approximately 6 months in placement during the first year, and then remain in placement the entire second year. That was the division’s method of reducing the time a client would spend on the waiting list. Mr. Torvinen noted it would be impossible to estimate the waiting period until the plan was actually implemented, and it would be measured at that point.

Mrs. Evans declared the "waiver" plan was a breakthrough, and a great leap forward for mental retardation services; she stated she was delighted with what Dr. Luke had accomplished. The subcommittee had reviewed the other two plans at previous meetings, neither of which seemed to meet the need. She felt the subcommittee had been provided with a new approach to the problem, and she thought clients would be very well served by the program, and thanked the division.

Chairman Rawson inquired if there were further questions. He asked if clients would also receive community treatment center services, job services, and family support services with that option. Mr. Torvinen stated that day training services for all clients were built into the "waiver" option, but there might be some limitations to the family support; however, he felt, for the most part, sufficient services had been built into the cost.

Dr. Brandenburg reported the only real down side to the option that the subcommittee should be aware of was when the 18 beds were eliminated, the division would lose 25.5 staff positions. Dr. Luke had assured him that just through the natural attrition factor, the division would be able to take care of or place 22.5 staff, so it would really not be an overwhelming issue. Dr. Brandenburg felt the most important outcome was the reduction of the time spent on the waiting list.

Mr. Guernsey noted the motion included all three Regional Mental Retardation Services budgets. He also noted the budget for Resident Placement had been discussed with the Budget Division during last session, and it was requested that the account be re-titled Rural Mental Retardation Services. He indicated the subcommittee might wish to ask the Budget Division to re-title that budget at the next opportunity, because it was a more descriptive term in reference to the program.

According to Mr. Guernsey, there was a total savings of $890,000 from the three budgets through reallocation of charges included in unit M-300 for occupational increases. Those were fully charged to the General Fund, and should have been a split with Medicaid. Further, he noted there was an update for computer prices, and the final adjustment on the three budgets dealt with a rate increase for case management services. Mr. Guernsey stated, since the subcommittee’s motion included all three budgets, he felt members should be aware of the additional adjustments. Chairman Rawson indicated the subcommittee understood.

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Mr. Guernsey informed the subcommittee that unit M-200 provided an increase of $108,054 each year to serve 30 additional families. The program would provide an average payment of $289 per month, with the average caseload being 217. Further, he noted, there were no recommended adjustments to the budget. The division had requested that the Home Care budget be re-titled by the Budget Division to Family Preservation Program, which the division felt was a more descriptive title for the service provided.

Mrs. Evans asked about the re-titling requests; Mr. Guernsey advised Budget Account 3167, Resident Placement would be re-titled Rural Mental Retardation, and Home Care, Budget Account 3166, would be re-titled Family Preservation Program. He indicated he would work with the Budget Division in an attempt to change those budget titles in The Executive Budget. Mr. Guernsey did not feel it would create a problem. Mrs. Evans then asked if re-titling was discussed during the 1997 session. Mr. Guernsey replied in the affirmative, and stated he thought the change was requested through a letter of intent, however, found it was not.

Senator Raggio inquired if the Home Care budget was the program to keep severely or profoundly mentally retarded persons in a home setting and, if so, asked what a family would do if there was an incident where that person required hospitalization for a period of 1 or 2 days. Dr. Luke stated the Home Care program was part of the overall service package, and provided a financial supplement on a monthly basis. If there were families with additional needs, they would be case managed, and might also receive respite funding to allow for temporary out-of-home placement. Families could also access jobs or day training support in appropriate situations. Dr. Luke reiterated the Home Care program was only part of the division’s services.

Senator Raggio questioned if a family was caring for a profoundly mentally retarded person in the home, and an incident occurred where that person required hospitalization for a number of days, would that create a major problem, and was there a physician or a contact person available to those families. Dr. Luke replied if it was a behavioral psychiatric issue, psychiatric hospitals were utilized, and the division had agreements with them so that they would handle immediate issues; the division would then follow-up in terms of placement or other necessary action.

Senator Raggio stated he was not hearing the answer to his question. He advised he knew the Home Care program was of value, both to the person and the caregivers, as well as the entire program. Senator Raggio indicated he was asking a practical question. If, for example, he was a caregiver to a mentally retarded person who became very disruptive, what options would be available to him as a caregiver. Electing to respond was Dr. Brandenburg, who advised the caregiver would contact the case manager, who would triage the client either into one of the institutional beds, or one of the psychiatric beds. Further, he noted that there was constant interface in cases. Senator Raggio stated he needed some assurance that for programs where institutionalization was avoided there was a plan in place, such as a case manager who could be contacted any day of the week. Dr. Brandenburg assured Senator Raggio that case managers were available any time, because the division was extremely motivated to keep those clients in the community, so it provided as many services and resources to the caregivers as possible. Dr. Brandenburg stated assistance was available 24 hours a day, 7 days a week.

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Mr. Guernsey advised the budget supported the food service operation, providing meals for the three agencies on the southern Nevada campus: Southern Mental Retardation Services, Las Vegas Mental Health Center, and Southern Nevada Child and Adolescent Services. The budget included a new Dietitian for Child and Adolescent Services position, in order to provide an expanded level of support to the new 56-bed juvenile treatment facility. The cost-per-meal was constructed to increase from the current $3.61 per prepared meal to $3.67 in FY 2000, and $3.73 in FY 2001. The facility also provided prepared snacks, which was recommended to increase from the current $1.03 per prepared snack to $1.05 in FY 2000, and $1.07 in FY 2001. Mr. Guernsey indicated staff would submit closing the budget as recommended by the Governor.

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Chairman Rawson inquired if subcommittee members had any questions or concerns about the community training centers, and invited Ed Guthrie to address the committee.

Ed Guthrie from Opportunity Village explained it was the largest community training center in the State of Nevada, and had been providing vocational training and employment services for people suffering from mental retardation since 1954. Further, he stated, the center now served over 500 clients. He addressed the rate increase for meals and snacks in the food service budget, which had also been done by the 1997 Legislature, and indicated there had been no rate increase for services for jobs and day training, or for residential providers during last session or the current session. Mr. Guthrie stated for 6 of the last 8 years, there had been no fee increase for that service, although the price of meals increased. He felt the services provided by Opportunity Village were equal to, or perhaps greater than, the meal service that was provided on the institutional campuses, and hoped the subcommittee would allow the rate to be passed on to the center’s staff. By regulation, he explained, 80 percent of the funding received for community training center rates had to be used for wages and benefits to direct service staff. Mr. Guthrie related any increase provided by the legislature would go to the direct service staff who provided the day-to-day services to those individuals in the program. Senator Rawson advised the subcommittee would ask LCB staff to work with Mr. Guthrie regarding the specifics of such action.

Larry Peri, Sr. Program Analyst, LCB, advised the budget was previously heard by the subcommittee on February 9 and March 19, 1999. The base budget recommended the continuance of 10.75 full-time equivalent positions. According to Mr. Peri, in addition all revenue and expenditures associated with the MAXIMUS contract had been removed from the base budget, as the current contract expired July 30, 1999.

Decision unit E-908 was important, advised Mr. Peri, because it recommended the transfer out of all costs associated in the budget account with the Family Resource Center program into a new, independent budget account. Mr. Peri went on to explain there were two very minimal technical adjustments recommended by staff in decision unit E-130, which recommended a new Management Analyst IV position due to commence October 1, 1999. There was also a recommendation to reduce the state owned building rent by $285, which simply reflected three quarters of the first year. All costs represented in that decision unit had been reduced by 25 percent to mirror that 9-month time frame. Mr. Peri added the other minor adjustment was simply a reduction of $286 in software prices per revisions from the Purchasing Division

Mr. Peri advised the subcommittee might wish to consider adjustment of the recommended amount of in-state travel in the Family Resource Center Program. The budget currently recommended $7,195 in each year of the 1999-2001 biennium. There were currently two positions in the program, a professional and clerical position, and Mr. Peri advised the year to date expenses recorded for in-state travel in FY 1999 totaled $1,910. The actual amount of in-state travel expended in FY 1998 was $4,970, and the subcommittee might wish to consider reducing the recommended amount of in-state travel to that actual amount of $4,970. If so, that would result in a reduction of $2,225 in each year of the biennium in General Fund support.

Chairman Rawson inquired about the MAXIMUS contract, wondering what would occur if the legislature extended that contract, and what kind of revenue could be saved in the General Fund. Mark Roberts, Administrative Services Officer, Director’s Office, Department of Human Resources, noted the department had not asked MAXIMUS to prepare any revenue projections for the next biennium and he did not have that information available.

Chairman Rawson indicated he did not know what had been done in the past, but he felt the subcommittee should build some funding into the budget, and if there was a reason the department did not want to continue the MAXIMUS contract, it should notify the subcommittee. Mr. Roberts remarked there was no reason not to continue the contract, and the decision was based on the current revenue projections facing the department regarding reversion. The department had been asked what the opportunity would be in contracting with MAXIMUS, and while there was an assessment of opportunities, there had not been a baseline option of what might be available regarding revenue. Chairman Rawson asked if it would be possible before the end of session for the department to provide information regarding the contract. Mr. Roberts stated he could not answer that question. Chairman Rawson asked Mr. Peri to supply the subcommittee with figures that might accomplish renewal of the contract.

Mrs. Evans asked Mr. Roberts how long the department had been working with MAXIMUS, and requested the date of the first contract. Mr. Roberts estimated the department began negotiations with MAXIMUS in December of 1996. Mr. Evans then asked since that time, had the department realized funds because of the contract and, if so, could Mr. Roberts furnish a dollar amount. In other words, she explained, because the department had hired MAXIMUS, was it able to recoup a certain amount of additional federal dollars. Mr. Roberts replied he had provided some information to LCB staff, however, he would estimate approximately $7 million was generated to date through MAXIMUS, and the counties had recorded about $3,2 to $3.7 million to date. Mrs. Evans noted the direct benefit to the state had been approximately $7 million, and in excess of $3 million to the counties.

Mrs. Evans indicated she had recently spoken with Charlotte Crawford, Director, Department of Human Resources, regarding the contract. Ms. Crawford indicated it would take about 2 months to sort out the particulars, because the department needed to ascertain what part of the dollar amount it had recaptured, and what part was attributable to the efforts of MAXIMUS. Further, Ms. Crawford advised the department needed to establish a baseline, which would take time to complete. Ms. Evans pointed out she clearly understood why there was no information immediately available. Mr. Roberts stated when the department approached the Interim Finance Committee (IFC), it was September, October, or November when there was sufficient information to build a projection regarding what the department could earn during the Fiscal Year.

Ms. Evans advised she would ask the subcommittee to give careful consideration to allowing for such a time lag, thereby setting an effective date for access to funding appropriated through the MAXIMUS contract of October 1 or even January 1, 2000. She felt the subcommittee could ask that somewhere in the neighborhood of $500,000 be built into the budget, thereby reducing the General Fund appropriation accordingly. Ms. Evans suggested once again that access to the funding be delayed. She stated in the short time frame the state had worked with MAXIMUS, it recouped $7 million and the counties recouped over $3 million. She felt $500,000 was a modest amount and did not feel it would harm the agency to build that into its budget, especially if it was done on a delayed basis.

Chairman Rawson asked for Mr. Roberts’ opinion regarding that funding. Mr. Roberts advised his fear would be based on what MAXIMUS had done to date and its intentions for exploring initiatives during the next biennium. If those initiatives did not come to fruition, what were the department’s options to secure additional funding after the delayed date established by the subcommittee. Chairman Rawson advised the subcommittee might delay even longer in order for the savings to be available, and there was always the option of IFC. Don Hataway, Deputy Budget Administrator, Budget Division, testified as long as there was an understanding that the department could approach IFC for a contingency fund allocation if the revenue did not materialize, he could foresee no problems.

Mrs. Evans stated one of the points the subcommittee might consider was to include the MAXIMUS funds in an account other than the Director’s Office of the Department of Human Resources, because that was not a large account; it was less than $700,000. Within the department, in one of the other budgets, she would urge consideration of the $500,000 as an offset to the General Fund. Further, she noted LCB fiscal staff could work with Mr. Roberts in an effort to clarify the matter.

Senator Raggio stated it was his understanding that the MAXIMUS contract would expire July 1, 1999, and asked what would be involved in extending that contract. Was there a financial commitment, other than payment of a contingency fee. Mr. Peri noted the only requirement would be that the state would pay a contingency fee for any revenue found. Senator Raggio asked if it had to be something developed by MAXIMUS; Mr. Peri answered that MAXIMUS had to develop, and the state had to agree that they developed it before paying the fee. Senator Raggio then requested clarification of the FY 1998 figures, and had MAXIMUS brought in $5.5 million. Mr. Peri replied in the affirmative. In FY 1999, did the budget anticipate $7.5 million in revenue from MAXIMUS, asked Senator Raggio. Mr. Peri replied that was correct. To date, explained Mr. Peri, the revenue totaled just over $3 million. Senator Raggio stated his concern was if the subcommittee anticipated $500,000 from MAXIMUS into an appropriate account within the department’s budget, and if that revenue was not generated, the department would be committed to approaching IFC to request the additional funding. Senator Raggio stated he needed more information regarding the budget account where the $500,000 would be placed, and whether or not it was in a program that would absolutely require that funding.

Mr. Roberts testified he was very reluctant to give the subcommittee a guarantee that the revenue would be forthcoming, not based on MAXIMUS’s performance, but based on the areas it wanted to explore and find new initiatives for revenues. Senator Raggio then asked if MAXIMUS had indicated if they were retained beyond July 1, 1999, there was the likelihood there would be some revenue sources forthcoming. Mr. Roberts replied in the affirmative, that MAXIMUS had indicated there were some initiatives to be explored in the Health Care Division. Senator Raggio then asked why the subcommittee needed to put that $500,000 into the department’s budget, instead of instructing it to approach IFC with any new revenue generated by MAXIMUS. Mr. Roberts stated that was what had been done in the past. Senator Raggio inquired if that would be a better way to handle the situation. Mr. Roberts replied, on behalf of the department, it had been done that way in the past, and worked much better because the exact numbers were available.

Chairman Rawson stated MAXIMUS had been successful enough in the past to ensure a reasonable likelihood it would secure revenue. He felt $500,000 was a conservative or "safe" estimate for inclusion in the department’s budget, and it would allow the subcommittee to more accurately budget available funding.

Mrs. Evans stated it was not her intention to unduly burden the department, however, she felt that there were budget accounts within the department that could absorb the revenue.

Chairman Rawson reminded the subcommittee that the motion would include the adjustments proposed by staff, and also would include an in-state travel figure of $5,000, rather than the $4,970. Also, that the $500,000 allocation be included for each year of the biennium. Mr. Roberts asked the subcommittee to include a letter of intent to the department, which would allow it the opportunity to approach IFC if unforeseen circumstances arose. Mrs. Evans and Mr. Marvel agreed with the requested additions to the motion.

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Mr. Peri advised the budget was previously heard by the subcommittee on February 9, 1999, and there were no technical adjustments recommended by staff.

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According to Mr. Peri, the account was new and all costs associated with the Family Resource Centers program were transferred into the new budget account. Further, he reported, there were no adjustments recommended by staff, other than the one previously approved in the director’s office budget for a reduction in in-state travel. One recommendation for the subcommittee’s consideration was a letter of intent. Mr. Peri explained when the program was first approved by the 1995 Legislature, a letter of intent was issued regarding the reporting requirement. The 1997 Legislature continued the letter, which required that on or before September 30 of each year, the Department of Human Resources provide a report to the IFC concerning the expenditure of all funds during the preceding Fiscal Year for the program. It was recommended that letter of intent continue.

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The budget was heard by subcommittee on February 18 and April 8, 1999. Mr. Peri noted the budget was reviewed for closing, however, was held pending clarification of the potential for additional Title IV-E revenue. Mr. Peri announced the Division of Child and Family Services (DCFS) reviewed that revenue source, and had provided a suggested adjustment to the federal Title IV-E revenue that could be placed into the budget account, which consisted of $65,256 in FY 2000, and $69,149 in FY 2001. If approved by the subcommittee, those figures would directly offset the General Fund respectively by those amounts.

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Previous subcommittee hearings were held on February 18 and March 19, 1999, and Mr. Peri stated the base budget continued expenditure amounts in the upcoming biennium at the same level as actual FY 1998 expenditures. The M-200 decision unit would add $198,580 in each year of the biennium for outpatient treatment, which would increase total funding to the legislatively approved amount for FY 1999 of $200,000. Mr. Peri noted several technical adjustments were recommended. In the base budget, the staff recommendation was to consider reducing the General Fund by $40,000 in each year of the biennium to properly reflect funding for the Community Corrections Grant category. The Community Corrections Grant program was approved by the 1997 Legislature to address what was termed the juvenile "detention backup issue." When that program was legislatively approved, it was primarily funded through the General Fund, however, did include $40,000 in each year of the biennium from the Federal Office of Juvenile Justice and Delinquency Prevention (OJJDP) funds.

Mr. Peri explained the base budget did not accommodate that funding shift and it was recommended that it be restored, with OJJDP funds increased and the General Fund reduced by the like amount. In order for that to happen, decision unit M-201 would similarly need to be reduced by $40,000 in OJJDP funds in each year of the biennium to accommodate the adjustment made in the base budget.

The first issue for subcommittee consideration was whether or not to reduce the total of $200,000 that had been recommended in each year of the biennium for outpatient treatment grants to the counties. In FY 1998, Mr. Peri reported the amount expended was $1,420 from the $200,000 available, and in FY 1999, the originally approved amount of $200,000 was reduced by $85,000 which was reserved for reversion to the General Fund, leaving $115,000 available in the current Fiscal Year. The amount encumbered or expended in total thus far in FY 1999 from the $115,000 available was $75,467. Therefore, Mr. Peri advised the subcommittee might wish to consider adjusting that recommended figure of $200,000 for each year of the biennium.

The second issue for the subcommittee’s consideration was the possibility of funding an update to the 1992 Needs Assessment of Juvenile Corrections for the State of Nevada that was completed by the National Council on Crime and Delinquency (NCCD). Mr. Peri advised there was an appropriation provided by the 1991 Legislature that authorized a needs assessment to be performed on the state’s juvenile justice population, and it had been nearly 10 years since the study was completed. The ACR 57 Interim Committee, which studied the system of juvenile justice in Nevada, recommended the 1992 needs assessment be updated. The interim committee did request a bill draft, resulting in A.B. 36, which was introduced and did contain a $100,000 General Fund appropriation for that update. If the subcommittee chose to fund the update of the needs assessment via the budget account, Mr. Peri acknowledged A.B. 36 would not be necessary.

According to Mr. Peri, the final suggestion to the subcommittee was the continuation of a letter of intent for the Community Corrections Block Grant program. The 1997 Legislature, upon approving the program, issued a letter of intent to the DCFS, which required a semi-annual report to the IFC. That report was to detail the distribution and use of those grant funds by the respective judicial districts in designing and implementing programs on the local level that reduced or limited commitments to the state’s juvenile training centers.

Senator Raggio noted he needed amplification regarding the suggestion of the needs assessment update. Apparently, the last needs assessment was conducted in 1992, and A.B. 36 proposed updating the assessment for the amount of $100,000. Was there an existing contract to perform the assessment update, asked Senator Raggio and, if so, what did it include. Mr. Peri stated it was anticipated that the update would be handled via contract. The 1991 Legislature approved approximately $40,000 to complete the study, which was expended almost in its entirety. During the interim between the 1997 session and the current session, the ACR 57 Interim Committee studied the needs assessment closely, and contacted NCCD, the organization that completed the initial needs assessment for the state in 1992. Mr. Peri explained NCCD provided a "ball park" estimate of $80,000 to $100,000 to the interim committee for a contract to update that study.

Senator Raggio inquired what a needs assessment would include. Mr. Peri replied the 1992 assessment examined data on both the county and state level regarding commitments and, more importantly, tried to project the population the State of Nevada could anticipate encountering in the juvenile justice system for the upcoming 10-year period. The projection included male and female populations, age groupings, categories of offenses, so the state could more properly plan the sanctions, facilities needed, and interventions that should be planned for the future accommodation of the juvenile justice population. NCCD also chided the state for its lack of data, as it could not make informed projections because of the inconsistent data being generated on both the state and county levels. Due to legislation passed during the 1995 session, there was now a uniform juvenile justice data collection system, which required that all arrest and commitment data be reported in a consistent manner.

Senator Raggio indicated he thought there was a process in place to develop that type of consistent reporting. Mr. Peri stated the process had begun, but was not implemented with 100 percent compliance and in the best manner possible. He advised it was the raw data the NCCD, or another consulting firm that specialized in projections, would hope to utilize for information. Senator Raggio then asked if the first needs assessment was completed for $40,000, and now required an update, why would the cost be $100,000. According to Mr. Peri, that was a "ball park" figure. Senator Raggio advised if the subcommittee was going to consider a needs assessment, he felt another $40,000 study would be sufficient.

Mrs. Evans noted the ACR 57 Interim Committee was not able to determine the funding amount that would be needed, and the $100,000 figure represented the upper level funding. In 1992 when the $40,000 was allocated, NCCD said there were many aspects of the system that needed examination, but they could not include all aspects for that amount of money. Mrs. Evans further advised the interim committee had been working with the National Council of Juvenile and Family Court Judges in Reno, and if the legislature wanted to update the needs assessment, as recommended by the interim committee and the national consultant, the council would assist with that update.

Mrs. Evans stated it was difficult to provide an exact figure, and she did not feel the assessment would use the entire $100,000 allocation. The subcommittee could pick a figure for the update, however, she felt adequate funding was necessary to ensure a quality study of the strengths and deficiencies of the juvenile justice program. Some of the issues noted by the interim committee were: personnel; facilities; adequacy of substance abuse programs; mental health; and the extent of gang activity within the state. Those issues would increase the scope of the proposed study, rather than "tweaking" the results from the 1992 needs assessment. Mrs. Evans explained if the subcommittee wished to reduce that $100,000 figure, she would have no objections; however, suggested that the funding not drop too low, in order to facilitate a complete study. The $100,000 allocation was not arrived at by using a scientific method, and was not a figure that was produced by a Request for Proposal (RFP). In fact, noted Mrs. Evans, the interim committee’s recommendation was that the state continue working through the National Council of Juvenile and Family Court Judges in Reno, because the council had expressed an interest in working with the legislature, and could provide and tap resources directly. Mrs. Evans suggested picking a figure that was at a comfort level for subcommittee members, one which would allow the study to expend up to that amount, however, not exceed the ceiling amount.

Senator Raggio emphasized that whatever amount was allocated by the legislature would end up being the cost charged for the study. For example, if the appropriation was in the amount of $100,000, the study would cost $100,000. He advised in 1992 the study cost $40,000, and allowing for cost increases, he would suggest $50,000 would be sufficient for the update. He did not think the state was beholden to NCCD to complete the study, and advised they were not the only or "omnipotent" group.

Ms. Evans reiterated the interim committee had urged the state to work through the National Council of Juvenile and Family Court Judges, which acted as a consultant to that committee, providing excellent technical support; further, she reported, the council was willing to continue working with the legislature.

Mr. Hettrick noted there was $200,000 approved by the Governor in his budget for a reason, and while the figures started low for the original needs assessment, at the rate of growth, it would quickly increase for the update. He felt the study should be funded, and hoped the fact that better data was being provided would produce a better study, even for an amount less than $100,000. Mr. Hettrick stated he would support an allocation of $50,000 to $60,000 for the study.

Senator Raggio stated the $200,000 allocation had not been utilized and he did not hear any compelling reason to keep the figure at $150,000. In FY 1999, only $75,000 had been expended, and he felt $100,000 would be adequate in decision unit M-200, and $50,000 to study and/or update the needs assessment. The division could approach the IFC if it could not find someone to complete the update for that amount. Senator Raggio indicated the subcommittee should be more responsible with funding. Mrs. Evans requested that Stephen Shaw, Administrator, DCFS, address the subcommittee regarding further budget reductions.

Mr. Shaw testified a reduction in the budget was called for, however, he would not like to see the figure drop below $115,000 for each year of the biennium, as the program was in an upward curve. Approximately 1 month ago, 60 juveniles had gone through the program for sex offender outpatient treatment, and those juveniles did not enter the state’s custody. He advised there was a direct savings to the state because there were less juveniles in custody. Mr. Shaw also advised the $40,000 figure for the earlier study was federally subsidized, and he would request $60,000 to $65,000 for the needs assessment study.

Mrs. Evans stated she would amend her motion to a figure of $115,000 in each year of the biennium. Senator Raggio suggested $85,000 each year, and asked Mr. Shaw if that would be sufficient. Mr. Shaw noted the division would function with whatever funding level the legislature approved. Chairman Rawson then asked Mrs. Evans if she wished to amend her motion.

Mrs. Evans asked for input from Mr. Shaw regarding the ceiling figure for the needs assessment study. She reiterated she was not looking to spend money unnecessarily, but 10 years ago, the legislature was told that many components of the study could not be done adequately at the $40,000 level. Mrs. Evans noted the interim committee had added areas to the update it wanted reviewed, which were not included in the original study. She was concerned about dropping the ceiling too low, and advised she would be concerned about lowering the ceiling below $60,000, in order to allow for a quality update without cutting corners as was done in 1992.

Mr. Shaw stated he shared Mrs. Evans’ concerns. Once again, he advised the committee the original study was federally subsidized. Further, he was not immovable regarding the use of NCCD to complete the needs assessment update. The division’s intention was to RFP the study, and select the lowest bidder. There were so many areas that needed to be included in the new study, such as looking at the offense behind commitment to institutions. The division suspected there was more behind such commitments within juvenile records, and had found that to be correct. Also, Mr. Shaw indicated the original study did not look at the state’s community based services.

Chairman Rawson suggested the subcommittee vote on Mrs. Evans original motion, which set the ceiling figure for the study at $60,000 and the amendment to the M-200 decision unit which would set a cap of $85,000 for each year of the biennium.

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The budget was previously heard by subcommittee on February 18 and March 19, 1999. Mr. Peri stated the base budget continued the actual FY 1998 expenditures for out-of-state placements, contract secure juvenile correctional placements, and the state share of the Spring Mountain and China Spring Youth Camps in each year of the upcoming biennium. Decision unit E-350 recommended $65,619 in each year of the biennium to restore the China Spring expenditure level to the FY 1999 work program level of $1,100,880. Decision unit E-352 recommended additional funding of $216,474 in FY 2000 for additional out-of-state and in-state placements with Rite of Passage (ROP). That money was from the federal Juvenile Accountability Block Grant budget, which had been closed by the subcommittee with the recommended transfer intact.

Mr. Peri went on to explain there was no additional funding recommended in the second year of the biennium for any contract secure placements or out-of-state placements, in anticipation of the construction of the new secure juvenile facility scheduled to open on June 1, 2000 in southern Nevada. Also, Mr. Peri advised, there were no technical adjustments recommended in the budget account by staff, however, there were some issues for the subcommittee’s consideration:

• It was suggested the subcommittee review the total amounts recommended for out-of-state placement and contract placements within the budget. The total expended in those two areas in the base year, FY 1998 was $728,713. The total available in FY 1999 was $668,202. The subcommittee should note that the original legislatively approved amount for FY 1999 was $1,087,500. That was reduced by $419,298, which was placed in the reserve for reversion category. That left the $668,202 currently available. The recommendations before the subcommittee totaled $945,187 for an 11-month period in FY 2000, pending the anticipated opening of the secure juvenile facility. The $945,187 recommended was $216,974 more than the amount spent in FY 1998 and $276,985 more than was available in the current fiscal year. Year to date, the expenditures recorded for those placements totaled $468,256. Any reductions or adjustments to the recommended amount would be an offset to the General Fund.

• The second issue for the subcommittee’s review concerned the China Spring Youth Camp in Douglas County. During the February 18 subcommittee hearing, China Spring representatives presented a revised budget, requesting additional funding above and beyond the Governor’s recommendation for the upcoming biennium. The additional funding request was for an additional $79,081 in FY 2000, and $118,008 more in FY 2001. The revised budget indicated the increases were necessary in order to maintain current levels of services. Some of the increases were due to salary expenses. There was a 2.5 percent cost of living adjustment (COLA) proposed for Douglas County employees, increased utility and motor pool costs, psychological expenses, and administration and overhead, charged to the China Spring Youth Camp facility by the county, which was similar to the statewide cost allocation recovery plan. At the previous hearing, several members expressed concern about funding COLA’s for Douglas County and also concern for the administration and overhead costs included in the budget. Historically, those costs for administration and overhead recovery, specifically for the China Spring Camp, had been denied by the legislature. At any rate, the subcommittee might wish to consider the request for Douglas County. Whatever the decision of the subcommittee, the formula that had been in existence since 1989 would be followed. That basically was 36.83 percent state funded, and the remaining 63.17 percent of expenses were spread to all counties that participated in the China Spring funding formula, with the exception of Clark County, where the Spring Mountain Youth Camp was located.

• The last item for the subcommittee’s consideration was during the initial budget hearing, the administrator of DCFS requested flexibility in the expenditure of the out-of-state and contract placement funds for juvenile correctional placements. Further, it was requested that the flexibility be included for both years of the upcoming biennium. Currently the recommended allocation was for FY 2000, not the entire biennium. The intent was to allow youths in placement to continue programming and not pull those youths out of programs to meet the date of completion of the secure juvenile facility. To summarize, i.e., if a juvenile was in the middle of a program, to allow for completion of that program prior to placement in another facility. There was no money available in FY 2001, and if the subcommittee were to approve the request, the Appropriations Act would, most likely, require specific language giving the administrator the authority to carry forward any unexpended General Fund allocations from the first year into the second year of the biennium.

Chairman Rawson inquired if it was reasonable to cut back $250,000 per year for out-of-state placements, recognizing that costs might, or might not, go up. Mr. Peri advised the recommended amount was approximately $950,000, and if the subcommittee reduced it by $250,000, it would leave a balance of $700,000, which would compare to the amount spent in the base year of $728,000, and would compare to the amount available in the current year of $668,000. Mr. Peri advised that was one benchmark the subcommittee could consider. He reiterated the total allocation historically provided for out-of-state placements had never been fully expended.

Mr. Shaw advised in category 17, correctional placement, the figure of $312,000 in the work program for FY 1999, was an artificial figure. Mr. Shaw explained because the division was mandated to revert funds, it had ceased placements with ROP, not because it wanted to, but rather because there was no other choice. The total of $945,000 for FY 2000 for both out-of-state and other correctional placements was not unreasonable, stated Mr. Shaw. Recently the division saw changes in judgements and the number of placements was again rising. He stated he would like to have the full amount, however, he could deal with $100,000 in cuts; any further cuts would simply leave the program with insufficient funding.

Mr. Dini stated he was worried about placements being cut during the second year of the biennium, because ROP was already experiencing problems due to a drop in placements. Mr. Dini inquired if the requested flexibility would allow the division to place juveniles at ROP if it had to, or was there another clause needed to ensure placement if necessary, and if financing was available. Mr. Shaw replied he would like the ability to use the funding for out-of-state placements and correctional placements interchangeably. He stated he had no desire to send anyone out-of-state unless it was absolutely necessary. If there were a more appropriate in-state placement, such as ROP, he would like to be able to use the funding over both years of the biennium for in-state placements as well, if that proved to be an appropriate placement for the youth. Mr. Shaw emphasized the division would not situate a child in an inappropriate placement, and it would still need placement for the extremely hardcore cases. He reported ROP had already advised the division it would not accept those hardcore cases. Mr. Shaw reiterated he would like to have the flexibility to spend the funding in either category.

Chairman Rawson queried the subcommittee regarding approval of the requested flexibility between the in-state and out-of-state categories. Senator Raggio indicated he would recommend $800,000 per year authority, and the requested flexibility. Mr. Shaw stated he felt $850,000 would cover the need; Senator Raggio again stated $800,000 more than covered what had been expended in the past. Mr. Shaw indicated, with all due respect, the subcommittee should consider the juvenile hall backlog, along with the fact that the division was able to keep that down because it had sufficient funds, however, since January, the backlog had, once again, been on the rise. Senator Raggio advised he would support the $850,000 figure.

Chairman Rawson noted the subcommittee also needed to address the 2.5 percent COLA for the Douglas County employees at the China Spring facility.

Mrs. Evans stated she was concerned about the COLA for Douglas County employees, and she felt it was a somewhat delicate issue for the subcommittee, because there was no salary increase proposed for state employees. She reiterated she did have some concerns about that issue, and would prefer not to fund the COLA for county employees. The other item of concern to Mrs. Evans was the county’s cost allocation recovery program, $22,005 in FY 2000 and $22,665 in FY 2001. Mrs. Evans noted the legislature had not approved such funding traditionally, and those items were not allowed in the past. She felt the subcommittee should remove those two requests from the budget.

Senator Raggio agreed with Mrs. Evans, and felt it would be inconsistent as far as the state’s portion of the salary. If the counties involved wanted to pay the increase via their share through the existing formula, that would be appropriate, however, he did not feel the state could finance the county’s COLA for its employees, or the cost allocation recovery program.

Mr. Hettrick indicated according to the numbers he had, the 2.5 percent COLA would amount to approximately $30,000 per year and the cost recovery would be approximately $22,000, and asked if the request would be reduced by approximately $52,000 per year. Mr. Peri advised that was probably accurate, however, he could not provide the specific COLA costs, but he felt Mr. Hettrick’s figures were accurate.

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Chairman Rawson welcomed the Carson City Boy Scout Troop 145 to the hearing, noting it was Boy Scout Government Day at the Legislature, and explained the hearing process regarding budgets.

The next item for subcommittee consideration was Youth Parole Services.

Mr. Peri noted the budget was similarly heard by the subcommittee on February 18 and March 19, l999. The base budget reflected the continuation of 38.53 full-time equivalent positions, and also reflected the elimination of two full-time equivalent positions associated with the Intensive Aftercare Program (IAP), due to the loss of federal funding. No new positions were recommended in the budget.

According to Mr. Peri, The Executive Budget recommendations included:

• An increase in decision unit M-200 of $649,621 in each year of the biennium for the Transitional Community Reintegration (TCR) program, which was initiated by the 1997 Legislature in response to the juvenile detention backup issue. The contract services expenditures in that program in FY 1998 were $714,000 out of $1,460,000 available and legislatively approved. The recommendation in the decision unit of $649,621 added to the actuals would increase the amount for contract services to $1,363,000 in each year of the biennium.

• Decision unit M-201 recommended an increase of $395,210 in each year of the biennium for detention center rate increases by Clark and Washoe Counties. Those funds would be used to pay the cost of state paroled youth who were picked up for new violations and held in detention until a parole revocation hearing was held. Those costs were approved by the 1997 Legislature at $257,605 in each year of the current biennium. In FY 1998 the costs were augmented by a $200,000 transfer from the TCR program, and in FY 1999, the costs were augmented by a $157,095 transfer from the program. If the current recommendation by the Governor was approved, the amount available for detention costs would increase to $869,755 in each year of the biennium, a 238 percent increase over the original FY 1998 legislatively approved amount of $257,605.

Mr. Peri advised there were also technical adjustments suggested by staff:

1. The division had received recent notice that IAP funding of $100,000 would more than likely be available in the first year of the upcoming biennium. Staff had input that $100,000 in the budget, and along with some balance forward funds, the program could continue, authority wise, during the first year of the upcoming biennium. The recommended adjustment would continue the two federally funded positions, and would add $20,000 in the IAP operating category.
2. E-275 would reduce voice mail lines from 48 to 38 for the upcoming biennium. In testimony before the subcommittee, the agency indicated that only 38 lines were necessary, which would result in a small reduction to the General Fund of $1,350 in FY 2000 and $1,200 in FY 2001.
3. E-378 would make a small reduction in the cost of body armor vests recommended in the budget. The budget recommended $500 per vest, and the most recent price from the Department of Motor Vehicles/Public Safety (DMV/PS) was $383 each. That difference would reduce the General Fund by $3,627.
4. E-379 recommended a small adjustment for remodeling in the Reno and Las Vegas Youth Parole Offices, for an $8,160 reduction to the General Fund in FY 2000. During budget hearings, the agency indicated the Reno office remodel of $5,000 could be eliminated and did provide an updated estimate for the Las Vegas office remodel, which was budgeted at $25,000, suggesting it could be reduced by $3,160.
5. E-711 would properly align the cost recommended for the upgrade of a Xerox machine cost-per-copy agreement for the Reno office. The amount recommended in the budget was $2,400 in FY 2000. The adjustment would place the cost in the operating expenditure category rather than the equipment purchase category, and balance the amount to indicate $1,200 in each year of the biennium.

Senator Coffin addressed the body armor vests, noting not all vests were the same, and asked if there was a difference in the type requested versus those purchased by DMV/PS. He then asked if the DMV/PS vests were for Highway Patrol troopers. Mr. Peri stated the invoice he had reviewed, and the LCB program analyst he spoke to about the vests, both indicated those were for troopers. Senator Coffin then asked if parole officers used a different type of protection. Mr. Peri replied he was not sure.

Chairman Rawson advised the $500 figure was probably an estimate, and now the agency had the actual price. Mr. Shaw stated he had no knowledge regarding the vests, and the Chief of Parole Services was aware of the adjustment in price.

Mr. Dini said he recently heard a radio announcement regarding the President’s $25 million initiative to purchase vests for law enforcement, with the price reported as $450 per vest, and noted perhaps that was the national average. Chairman Rawson suspected what the President was referring to were vests with metal or ceramic inserts, and also vests that would be used for higher threat level incidents.

Chairman Rawson suggested the subcommittee take action on the proposed staff adjustments before continuing with other issues contained in the budget. Referring to decision unit M-201, which recommended a 238 percent increase for the cost of state parole youth being picked up for new violations and held in detention, Chairman Rawson inquired if there was any work that could be done with that increase.

Mrs. Evans wondered if Mr. Peri had additional information for the subcommittee that related back to decision units M-200 and M-201, as she felt perhaps there were adjustments that could be made. Chairman Rawson advised Mr. Peri to continue his explanation.

Mr. Peri advised the first issue for the subcommittee’s consideration was the amounts recommended in the TCR program in each year of the biennium. The total amount recommended for contract services in each year of the upcoming biennium was $1,363,000, compared to the $1,460,000 approved by the 1997 Legislature for each year of the current biennium. Mr. Peri stated, once again, in FY 1998 the $1,460,000 allocation was reduced by a $200,000 transfer to the detention cost category. In the current Fiscal Year, the $1,460,000 was reduced by a $97,000 transfer to the reserve for reversion, and by a $157,095 transfer to the detention cost category, leaving $1,205,905 available in FY 1999. According to Mr. Peri, the subcommittee could consider reducing or adjusting that recommended amount of $1,363,000 in each year to more closely approximate the amount available in FY 1999. That adjustment could be a combination of a number of things:

• A $97,000 reduction would bring the figure down to $1,266,000;
• A $157,095 reduction would bring it down to $1,205,905, which was what was currently available; or,
• The subcommittee could choose to leave the figure at $1,363,000 as recommended by the Governor.

Mr. Peri noted any action by the subcommittee would be a reduction to the General Fund.

The second item for the subcommittee’s consideration, explained Mr. Peri, was consideration of a possible reduction in detention costs by the recommended amount of $33,685 in each year of the biennium. A reduction in the recommended amount would more closely mirror the projected costs of $414,700 in FY 1999. Once again, Mr. Peri noted the agency augmented the total original legislatively approved amount of $257,605 by $157,095 at the April 8, 1999 IFC meeting for a total of $414,700. The FY 1998 actuals of $448,000, minus the $33,685, would equal the $414,700. In essence, stated Mr. Peri, that became more or less a revised actual based on more recent experience in the current fiscal year. He noted the agency indicated that the FY 1999 costs were somewhat lower due to its ability to move clients on youth parole status from detention centers in a shorter time frame, 30 days versus 60 to 80 days as experienced in FY 1998. Any changes to the recommended amounts would result in reduction to the General Fund.

Also, stated Mr. Peri, funds collected by the various counties for detention costs were deposited directly into their general fund and apparently were not used for any detention center improvements or programming. The subcommittee had previously talked about considering a non-supplanting clause in the Appropriations Act to insure that any state funds collected for detention did not supplant existing county resources.

Continuing, Mr. Peri advised the last suggestion was for the subcommittee to consider issuing a letter of intent to the division, allowing it to approach the IFC in FY 2001 if federal funding for the IAP did not continue. That was done by the 1997 Legislature because there was uncertainty as to the available funding in FY 1999. If funding had not developed, the division was given that letter to allow it to approach the IFC, and the subcommittee might want to continue that letter of intent for FY 2001.

Mr. Shaw explained the IAP should be sufficiently funded for an additional year, but he was relatively certain there would be no federal funding for the second year, however, the division would attempt to obtain that funding. He would appreciate being given the flexibility to approach IFC if the funding did not materialize. He noted there was a position, Deputy for Youth Corrections, that did not receive funding in the Governor’s budget. The Assembly Ways and Means and Senate Finance Committees instructed the Juvenile Justice Commission to complete a series of studies to recommend whether or not Corrections should be removed from the division. The commission’s recommendation was that Corrections belonged in the division, but also recommended that a Deputy of Youth Corrections position be funded. Mr. Shaw indicated the ACR 57 Interim Committee also made such a recommendation. His suggestion would be that any savings from the division’s budget be redirected to that position.

Mr. Hettrick inquired what the cost would be for the position. Mr. Shaw informed the subcommittee that approval of the position was also included in A.B. 519, but was currently unfunded. The division could not create the position without funding, which he believed would be approximately $80,000 for FY 2000 and $100,000 for FY 2001.

Chairman Rawson advised members he felt the budget could be closed without committing to that position, because the bill would supply the funding, and it could also be considered when the Unclassified Pay Bill was reviewed. Mr. Shaw remarked he would agree with that action, and simply wanted consideration for the position.

• A LETTER OF INTENT REGARDING FUNDING FOR THE IAP FOR FY 2001;

• SUGGESTED REDUCTION OF $97,000 IN EACH YEAR OF THE BIENNIUM IN THE TCR PROGRAM;

• REDUCTION OF DETENTION COSTS BY $33,685 IN EACH YEAR OF THE BIENNIUM;

• A LETTER OF INTENT TO THE COUNTIES REGARDING FUNDS COLLECTED FOR DETENTION COSTS, STIPULATING THOSE FUNDS BE USED FOR DETENTION CENTER IMPROVEMENTS AND PROGRAMMING; AND,

• ALSO INCLUDING ALL TECHNICAL ADJUSTMENTS.

Mr. Goldwater inquired if the "letter of intent" to the counties included in Mrs. Evans’ motion would be an actual letter of intent, or would it be a non-supplanting clause in the Appropriations Act. Mrs. Evans advised she would amend her motion, deleting reference to a letter of intent to the counties, and including:

Mr. Goldwater stated he would agree with the amendment and his second would stand. Chairman Rawson also instructed staff to advise the subcommittee of the outcome of the recommended Deputy of Corrections position in A.B. 519, or in the Unclassified Bill. To further clarify the issue of the TCR program, Mr. Peri asked for reaffirmation that the amount of reduction would result in available funding of $1,205,905 in each year of the biennium, which would mirror the amount currently available in FY 1999. The second item of clarification was the reduction of detention costs by $33,685 per year, which would be reduced from the total Governor’s recommendation of $869,755; Chairman Rawson stated that was correct. Chairman Rawson then inquired if Mr. Shaw felt the division could "live" with the figures proposed by the subcommittee. Mr. Shaw replied in the affirmative.

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Mr. Peri stated the budget was heard by the subcommittee on February 18 and March 19, 1999. There were several recommendations regarding some minor equipment adjustments. More importantly, Mr. Peri indicated, decision unit E-900 recommended the transfer of the Home Activity Program for Parents and Youngsters (HAPPY) out of the budget to the Northern Nevada Child and Adolescent Services budget; all base and maintenance and a total of 9.62 full-time positions were recommended for that transfer.

Chairman Rawson commented that persons from HAPPY had been present at prior hearings, and tended to let the subcommittee know if they were unhappy. He then inquired if the transfer was acceptable.

Mrs. Evans requested clarification of the transfer of HAPPY, and also the recommended transfer of the First Step Program to the Southern Nevada Child and Adolescent Services, and inquired why there was such a problem finding a "home" for those programs. Further, she noted there were concerns that the best place for the First Step Program would be in Mental Retardation, and the best place for HAPPY was within the Special Children’s Clinic. She asked for an explanation of why those programs were being recommended for transfer, and what would be the net effect of those transfers.

Responding to Mrs. Evans request, Jim Baumann, Administrative Services Officer IV for DCFS, advised there were no program staff present to respond to the questions. However, he noted Mr. Peri had asked the same questions of the division, and the response was that the operational support services would be more efficiently processed at a regional level rather than through one statewide office. The gist of the benefits related to transfer of the programs was logistical, and there was no cost benefit listed in the response to LCB staff. Chairman Rawson asked if there had been any concerns voiced by persons involved with HAPPY. Mr. Baumann related he had not heard anything from DCSF, but could not speak for the director’s office. Mr. Roberts reported those staff members in Reno, who were involved in a conference call with federal officials and were unable to attend the hearing, had reported to him they were satisfied with the transfer.

Mrs. Evans stated she hoped those transfers would be permanent, because the programs were constantly being moved. Further, she asked why the early childhood direct services positions were assigned to DCFS, however, the early childhood administrative positions remained in the director’s office, inquiring how that would help the agency. Mr. Roberts stated he was not familiar enough with the program to provide answers to those questions, however, based on the outlines he had seen, most program and supervision staff remained with the program, while the upper management staff remained in administration

According to Mrs. Evans, she received a letter from a constituent who was familiar with the area, which stated in part, "DCFS already has the most inadequate infrastructure in terms of FTE’s of any state agency. Some of those early childhood admin positions need to follow the direct service positions." It was one of those issues where the legislature might be accused of micromanaging the agency, but Mrs. Evans again asked why all the administrative programs stayed with the director’s office, thereby leaving the agency understaffed, without sufficient number of personnel to complete the work. Mr. Roberts advised he was not of the opinion that when HAPPY and the First Step Program transferred they would be understaffed. He offered to work with Mr. Peri to build an outline which showed individually where positions would be assigned. Mrs. Evans acknowledged she would be grateful for that information.

Continuing his presentation, Mr. Peri noted there were recommended adjustments in the base budget, which would properly align the Federal Education of the Handicapped and rural respite grant categories with the available federal revenue. In FY 2000, the suggestion would be that the General Fund be reduced by $1,961, and in FY 2001 it be increased by $688. Secondly, Mr. Peri advised, in E-900, the transfer out decision unit for HAPPY, staff would suggest the revenue transfers be adjusted to accommodate the suggested or recommended transfer out of that program. That would result in a decrease in General Fund support being transferred out of the account of $2,267 in FY 2000, and $2,349 in FY 2001. Mr. Peri explained federal revenue sources would be adjusted to net an increase in the same amounts. Correspondingly, stated Mr. Peri, if the transfers were approved as recommended in the budget, the similar adjustments would be required in the Northern Nevada Child and Adolescent Services budget. In that account, the General Fund need transferring in would be reduced by those same amounts, $2,267 and $2,349. Federal revenue in that account would need to be increased by the same amount.

Mr. Peri stated at the February 4, 1999 IFC meeting, the agency requested and received approval to augment child care development block grant funds within the budget account by $44,054 in FY 1999. The Executive Budget did not contemplate or carry forward that additional funding in either year of the upcoming biennium. Upon review, LCB Fiscal Analysis Division noted that money was available within the Welfare Division in the child care area, and the additional $44,054 could be continued in each year of the upcoming biennium. If the subcommittee chose to do that, Mr. Peri explained, it was suggested the General Fund be reduced by the same amount, and staff would work with the Budget Division and DCFS to properly distribute that money within the budget accounts.

Chairman Rawson suggested closing the budget with instruction to staff to work out the details regarding the transfers.

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Mrs. Evans informed Mr. Baumann there was concern about the agency’s recent LCB audit, which indicated lack of internal controls on payments to foster care, supervision and monitoring, and noted the problems with computer access. Further, she hoped those issues would be looked at very seriously because, clearly, such issues were not in the best interest of the division’s clients; also, it appeared to be very costly in some cases. Mrs. Evans instructed Mr. Baumann to carry that information back to the agency.

Mr. Baumann disclosed the division did take those recommendations very seriously, and many of them were being addressed with the development of the Unified Nevada Information Technology for Youth (UNITY) system, which had controls and approvals in place. The system was now being documented by the policy and procedures standardization team, which was part of the UNITY project. The goal of the division was to have that documentation complete by January 2000, with many policies and procedures online in the system to assist social workers in the field with identification of appropriate policies and procedures to follow. According to Mr. Baumann, the division did take those issues seriously and was currently working on them.

Mrs. Evans stated the division was always straining with budget overruns, and hopefully the internal controls would contribute to addressing that problem by watching those dollars more carefully. Mr. Baumann advised since LCB auditors had reviewed the division, it had implemented some controls, and cut back the length of stay in both transitional care and emergency shelter care.

Chairman Rawson informed the subcommittee the next budget for review would be Education State Programs.

Jeanne Botts, Senior Program Analyst, LCB, stated the Education State Programs account provided state funding to carry out responsibilities for education conferred at the state level by the Nevada Constitution and state law. That included the activities of the State Board of Education, the Superintendent of Public Instruction, the management of the Department of Education, and statewide school issues.

In terms of positions in the budget account, 3.25 full-time employees were recommended for elimination; 2.75 by the Governor and .50 by fiscal staff. Ms. Botts explained two positions and clerical support, 2.5 full-time employees added by A.B. 266 of the 1997 Legislature for cultural diversity and American Indian education programs, and the 2 half-time clerical positions were not recommended for continued funding by the Governor. Ms. Botts would recommend the budget close without those positions, as A.B. 357 included an appropriation to continue them. The bill was in the Assembly Committee on Ways and Means, and needed to be amended to include the department’s new estimates of $198,304 and $200,732 for the upcoming biennium.

Ms. Botts reported the Governor recommended deleting a .25 clerical position that was added in 1995, and which had been vacant almost continuously since it was created. She would also suggest deleting a half-time Management Assistant II position that had been vacant since July 1998. To shift some of the burden off the financially strapped Budget Account 2720, Education Support Services, Ms. Botts would recommend transferring in one-half of the Management Assistant II position, which would provide clerical support for the Deputy for Fiscal Services. The deputy’s salary was split between two budget accounts, 2720 and 2673. That transfer would similarly split his secretary’s salary between those two budgets. Ms. Botts explained that had been done, not only to take some of the burden off budget account 2720, but also all of the other top management positions within the department had their secretaries budgeted in the same manner as the supervisors.

The position of Early Childhood Consultant added last session in the department’s budget request had been continued by the Governor, however, the funding for the state-funded Even Start program was not recommended. Ms. Botts would suggest if the subcommittee wanted to add funding for early childhood, it might be accomplished through a separate bill, or another mechanism, to allow the budget to close.

Further, Ms. Botts recommended adding $14,400 in each year of the biennium to cover the expenses of the Commission of Educational Technology, which was an ongoing group that had not been continued in The Executive Budget. She advised it was also suggested that a letter of intent be sent to the department to continue reporting quarterly to the IFC regarding its out-of-state travel.

Ms. Botts stated she had recently received a request from Douglas Thunder, Deputy Superintendent, Administrative and Fiscal Services, that approximately $18,000 be added to the budget account to pay for the department’s charges from LCB for reviewing regulations. Nevada Revised Statutes (NRS) 233B.063 allowed LCB to charge agencies for the review of regulations, unless the agency’s budget was supported entirely from the General Fund. Most of the regulations adopted by the department were paid either from the Education State Programs account, or the Proficiency Testing account, which were not entirely General Fund supported, and included small amounts of revenues from the sale of printed materials. Fiscal staff did not recommend adding General Fund revenue to the department’s budget to pay for the review of regulations, since it was not intended that General Fund agencies should pay for such reviews. Ms. Botts pointed out that regulations of the Commission on Professional Standards in Education were paid from Budget Account 2705, Teacher Licensing and Education, which was supported by licensing fees.

Mr. Goldwater pointed out he felt it was a mistake to fund the Even Start program through a one-shot appropriation, and did not feel the program should be a victim of tight budget times.

Ms. Botts noted the amount of money provided by the 1997 session for the Even Start program was $828,000 in each year of the biennium. Chairman Rawson stated that Mary Peterson, Superintendent of Public Instruction, had previously indicated that $500,000 would be an appropriate amount; Ms. Botts stated that was correct, $500,000 per year.

Senator Coffin asked if the motion would leave the positions open but unfunded for cultural diversity and the American Indian education programs. He indicated he was attempting to ascertain the rationale for the motion neglecting to address those issues. Senator Coffin noted the legislature funded those positions on a one-shot basis, and the department then placed them in the permanent budget. The legislature anticipated the positions would be continued when legislation was passed in 1997, but it appeared they became the first targets for the new administration. He thought the subcommittee’s intent would be to keep those positions. If the positions were approved without funding, the bill would also have to pass, which would have a different appearance than it would if the positions were left vacant.

Ms. Botts pointed out that when those positions were added last year, there was a specific provision in the law that the effectiveness of the program would be evaluated by the legislature before the positions and the program were continued. She felt that was why they were not continued by the Budget Division, and why she would recommend they be handled through the bill. Senator Coffin inquired how long the department had to evaluate the effectiveness of the program and positions it barely had time to fill. Ms. Botts noted the positions were not filled until February, though they were authorized to begin on October1. She was not stating the program should not be continued, but simply explaining the rationale behind the decision not to include the positions in the budget.

Mr. Hataway advised that A.B. 357 also contained the evaluation issue, and the Budget Division would interpret that as not permanent until the evaluation was completed. He felt the bill would require an amendment, or the subcommittee could add the positions back into the budget. Senator Coffin inquired if the positions were currently filled; Ms. Botts answered in the affirmative.

Senator Mathews referred to Senator Coffin’s question regarding how long the department had to evaluate the positions, and she would recommend the subcommittee leave the positions in the budget; she noted she only seconded the current motion to allow for discussion. In light of Mr. Hataway’s testimony that the bill also contained the evaluation stipulation, the positions would again become temporary, and she did not want to see that happen. Senator Mathews advised she would withdraw her second to the original motion, in order for the motion to include continuance of the positions.

Mr. Goldwater stated he would amend his motion to include funding for the positions for cultural diversity and American Indian education programs, and revise the Even Start suggested $828,000 figure down to the $500,000 figure that was provided by the department. Senator Rawson asked if the net effect of the amended motion would add $1 million to the budget. Ms. Botts replied 2.5 positions would cost approximately $200,000 each year and the Even Start program would be $500,000 each year, which would total $700,000 each year of the biennium, or $1.4 million over the biennium.

Mrs. Evans mentioned the Assembly Committee on Ways and Means did hear A.B. 357 and the two persons presently filling those positions were present at that hearing. She advised she regretted the Senators were not privy to their presentation, because it came across clearly that the programs were very worthwhile, and they had accomplished a great deal, even in such a short period of time. Mrs. Evans thought the Senators should hear the presentation from those persons before making a decision.

Senator Mathews commented in light of the growth of minority groups or people of color in the state, which the two positions were directed at, it was very crucial to maintain those programs. She also noted most states had such programs.

Senator Coffin stated while the subcommittee could push through the added $1.4 million to the budget, he felt uncomfortable in doing so without first hearing the presentation from the persons currently filling those positions, and perhaps it was not a budget the subcommittee should close.

Chairman Rawson inquired if the subcommittee would be willing to hold the motion until its next meeting. Mr. Hettrick agreed with Senator Coffin, and felt the program was at risk because the subcommittee had not yet heard the testimony, which was compelling. The subcommittee was considering a significant amount of money that would be closely reviewed.

Mr. Goldwater emphasized that was the reason the original motion did not include the two positions. The subcommittee then requested they be included, and now it would not vote on the budget. At the very least, he felt if the subcommittee would consider the Even Start program without including the positions, it could move forward. Chairman Rawson stated if the subcommittee was willing to hold the budget, it could pick up the discussion and request the testimony from the persons filling the positions at the next meeting. He did not want to jeopardize the budget.

Mr. Goldwater advised he would withdraw his motion. Chairman Rawson felt the subcommittee was sympathetic to both the positions and the Even Start program, and did not want to see either one in jeopardy.

Mrs. Evans announced the subcommittee would be reviewing the Distributive School Account (DSA) the next day, along with the holdover of the Department of Education budgets, and the testimony from the two persons currently holding the positions. Chairman Rawson stated if it was not possible to arrange the testimony for that meeting, the subcommittee would proceed with the DSA hearing.

There being no further testimony to come before the subcommittee, Chairman Rawson adjourned the hearing at 11:00 a.m.

RESPECTFULLY SUBMITTED:

Carol Thomsen,

Committee Secretary

APPROVED BY:

Senator Raymond Rawson, Chairman

DATE:

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Assemblywoman Jan Evans, Chairman

DATE:_______________________________________