The SubCommittee on Ways and Means was called to order at 8:00 AM, on Wednesday, April 28, 1999. Chairman Raymond Rawson presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Mrs. Jan Evans, Chairwoman

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Parks

ASSEMBLY COMMITTEE MEMBERS ABSENT:

None

None

STAFF MEMBERS PRESENT:

Ginny Wiswell, Program Analyst began budget closings for the Department of Human Resources, by first addressing the Maternal Child Health (MCH) budget account. She felt the outstanding issue concerning this budget account was the manner in which the committee would choose to allocate funding that was made available to the program through Budget Amendment 49. She recalled that there had been a one-time Maternal Child Health block grant allocation that was left in the agency’s budget. Therefore, she stated the subcommittee needed to decide how those funds should be allocated.

Ms. Wiswell then identified three options that had been discussed during the previous subcommittee hearing.

Chairman Rawson interjected his concern that money used for pediatric dental care would be lost. He thought the funds should remain in the MCH budget account but that the monies should be directed towards dental treatment in conjunction with other dental programs in the university system. He thought that this would decrease the waiting lists for treatment of children with special cranio-facial problems.

Yvonne Silva, Administrator for the Health Division responded to the Chair’s concern by clarifying that the MCH funds were the unobligated MCH block grant funds that were once used for dental services. She mentioned that the Nevada Check-Up program limited the number of children eligible for MCH block grant funds to be used for treatment, thereby creating a larger problem. She indicated however that those same children were then eligible through the Nevada Check-Up program for dental services. Thus because of the conditions of the two programs, she thought that Chairman Rawson’s suggestion for the method of allocation of the MCH funds was not feasible.

Ms. Silva thought the subcommittee should instead, earmark those funds for a specific project, which could provide preventative dental care. Given the fact that the funds were allocated as a one-shot appropriation, she thought the money would be wisely spent. Alternatively, Ms. Silva suggested that the funds be used in the area of health education as it related to special projects that promoted sound oral hygiene.

She repeated that directing those funds towards the treatment of dental problems would be an inefficient use of those funds as MCH block grant funds must be the "payer of last resort."

Chairman Rawson then asked if the funds could be directed in conjunction with existing dental programs in the university system. He thought there was a fragmented, yet concerted effort within the state to deal with dental problems. The Chair thought that if there were more centralized controls over those programs, funds and effort would not be wasted.

The Chair noted that he had not suggested transferring the funds to the university system in toto, but desired to see the funds tied to or coordinated with the existing programs within the university system.

Ms. Silva stated that she did not object to the Chair’s suggestion. In fact, she felt it was the department’s responsibility to use the knowledge, which was provided by the MCH advisory board to assist in that endeavor in terms of coordinating or directing those funds in a partnership with the university.

Chairman Rawson also wondered if the "payer of last resort" function would be obstructed if the funds were diverted to decrease the waiting lists at the Special Children’s Clinic.

Ms. Silva responded that the unobligated funds had not been included in the department’s proposal to alleviate the waiting lists at the Special Children’s Clinic. She opined that if the MCH block grant funds were used to reduce the waiting lists, the department would have to return to the Legislature in the following biennium to request an augmentation of its General Fund allocation as the MCH funds would have been used. Alternatively, the department would face eliminating the services and programs the Check-Up program now provided.

Chairman Rawson then remarked that the block grant funds had been intended to assist in the provision of dental care. He expressed his displeasure that the potential loss of those funds would adversely affect dental care services.

Assuaging his concerns, Ms. Silva reassured Chairman Rawson that the funds would be directed to work with UNR on oral health issues.

Mr. Goldwater then asked Ms. Silva to re-examine the issue of the waiting lists at the Special Children’s Clinic.

In reply, Ms. Silva reviewed that the waiting lists at the Special Children’s Clinic, at the time of the budget’s conception, were comprised of 71 children awaiting services at the Reno facility and 72 children awaiting service at the facility in Las Vegas. In terms of treatment waiting time, she reported that in Reno the waiting time equaled 4 months, while in Las Vegas the treatment waiting time equaled 6 months. Currently, she noted that the waiting list for the Reno facility totaled 73 children, while the waiting list at the Las Vegas clinic had grown to 102 children.

Ms. Silva then explained that the advent of the Nevada Check-Up program allowed the Children with Special Health Care Needs program to avoid requesting additional General Fund dollars to reduce the clinic’s waiting lists. Instead, the funds were re-directed from the Children with Special Health Care Needs program and those children would subsequently be covered by the Nevada Check-Up program.

Therefore, she explained the department had provided the subcommittee with a scenario that proposed to re-classify and transfer seven full-time equivalents (FTE’s) from the Children with Special Health Care Needs program to the Las Vegas Special Children’s Clinic along with funds for operating costs and for related therapies. Consequently, she maintained the waiting lists would be reduced to a waiting period of two weeks for an initial appointment after
6 months. Ultimately, she hoped that treatment waiting lists would be reduced from 6 months to 8 weeks.

Ms. Silva recommended that the Reno clinic, utilize additional dollars available in Category 12, to create two and a half FTE’s. Those FTE‘s would be used at the Reno clinic to pare down the waiting period to 1-week for initial services and 7 weeks for treatment services.

She repeated that the department advised that the MCH funds allocated in Budget Account 3222 be re-directed to Budget Account 3208, which was the Special Children’s Clinics budget account.

Mr. Goldwater expressed his approval of the department’s proposal to reduce the waiting lists at the Special Children’s Clinic.

The Chair then asked if Ms. Silva had been apprised of the options recommended to address the unobligated balance of the MCH block grant funds.

Ms. Silva replied that as long as the balance was related to one-time expenses, the department did not object to the subcommittee’s recommendations. She reiterated that oral health had been a priority for the Maternal and Child Health Advisory Board and the department was eager to see special projects and health education activities directed towards oral health.

Ms. Evans concurred with Mr. Goldwater’s concern over the waiting lists at the Special Children’s Clinics, especially in Las Vegas. She felt that the waiting period was an inordinate amount of time for a child to wait for treatment. She then clarified that the transfer of the FTE’s was the crucial ingredient to the department’s prescription for the unduly long waiting lists.

Ms. Silva answered that not only the transfer of the FTE’s but the costs related to the transfer were vital to the elimination of those waiting lists. She repeated that aside from the seven FTE’s, funds emanating from Category 12 would be used to cover general operating costs as well as for related therapies. She felt that it was unreasonable to transfer staff without providing for the operating costs and incurred therapy needs.

Chairman Rawson then asked if the change would be revenue neutral. Ms. Silva responded affirmatively and stated that when the department reviewed the impact of the Nevada Check-Up program, they were able to uncover $880,000 that could be transferred. Furthermore, the cost of the proposal to transfer FTE’s and associated costs in Las Vegas, and to create two and a half FTE’s in Reno, came within that $880,000 range.

The Chair commented that vacant positions were perceived in the department. He suggested that Ms. Silva report back to the Interim Finance Committee (IFC) with the department’s completed plan for eliminating the waiting lists at the Special Children’s Clinics.

Chairman Rawson asked if two of the FTE’s would be transferred immediately. Ms. Silva answered two of the department’s positions had been sent to the Department of Personnel for re-classification. She believed the department would be successful in finding positions for the remaining five positions the department proposed to transfer. As soon as those positions were vacant, the positions would be re-classified. She stated that the department hoped to have all of the positions re-classified by July 01, 1999.

Senator Rawson then mentioned that a decision unit for special equipment had been designated for the Special Children’s Clinics and asked fiscal staff to explain its purpose.

Ms. Wiswell responded that decision unit E-720 for the Special Children’s Clinics was a continuation of the infrastructural and computer hardware upgrades that had been proposed in a previous legislative session.

THE MOTION CARRIED UNANIMOUSLY.

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Steve Abba, Senior Program Analyst, described the budget account for the Nevada Check-Up program. He stated the program currently had 5,500 children enrolled and receiving services. Based upon current enrollment trends, the threshold of 10,000 enrolled children would be reached by February 2000.

Mr. Abba recalled The Executive Budget was predicated upon the enrollment of 10,000 children per month. Mr. Abba noted in FY 2000, the average monthly caseload would be between 8,700 to 9,000 children monthly, which was less than the monthly average of 10,000 children the agency had budgeted for. Regardless, Mr. Abba felt that it was important to understand the enrollment trends projected for FY 2001 would far surpass the budgeted enrollment figure of 10,000 children per month that had been budgeted for in the program’s budget account.

In order to close the budget account, Mr. Abba recommended reducing the program’s funding in FY 2000 in an amount equal to the medical coverage costs for 750 children and augmenting the budget for FY 2001 by the same amount. This would be done in order to appropriately align the agency’s budget with the current enrollment projections and growth figures for FY 2001.

In addition, Mr. Abba mentioned that the division had prepared scenarios concerning the costs of expanding the program’s enrollments beyond 10,000 children in the second year of the biennium.

The first option, Mr. Abba said reflected the costs of adding 500 additional children for FY 2001. For this option, the additional General Fund costs were estimated at $218,855. He indicated that the Title XXI cover 65 percent of the program’s costs in addition to the increase in premium revenue, which would stem from the expansion in the program’s enrollment.

Mr. Abba explained the second option would provide funding for the addition of 1,000 children. He said the additional coverage would cost a total $1.3 million in FY 2001. The General Fund ‘s share would amount to $441,000.

Alternatively, he stated the third option would support the enrollment of an additional 1,500 children in FY 2001. He related that the additional costs of this option would total $2 million and of that total the General Fund cost would be $661,000.

In order to clarify the purpose for expanding the program’s enrollment, Mr. Abba used the first option as an example. He illustrated that the addition of 500 children would add to the base figure of 10,000 children. However, in addition to that amount, the program would add the 750 children who were expected to be transferred from FY 2000. Thus the program would serve approximately 11,250 children per month.

In the same manner, he explained option two would add 1,000 children to the base figure of 10,000 children in addition to the expected transfer of 750 children from FY 2000. Consequently, this alternative would allow the program to serve 11,750 children per month. Thus and so, option three would cover 12,250 children.

Mr. Abba noted that it was difficult to predict the number of children who would be enrolled in the Nevada Check-Up program because it was in a nascent stage of development and the enrollment was experiencing a continuous cycle of growth. However by January 2000, he thought that the second and third options would realize the expected enrollment figures. If at that time the enrollment cap was being pressed, he said the program would have a variety of other options to manage the situation.

Ms. Evans commented that the program’s budget had caused the subcommittee great anguish during the present legislative session. She expressed her concern that the program would meet and exceed the 10,000 children enrollment cap during the biennium. She felt the subcommittee should consider the second option as a middle road to avoid risking a budget shortfall should enrollment numbers increase beyond expectation. Moreover, she believed the second option would serve as a cushion, giving the program more leeway in budgetary terms if enrollment numbers increased.

Chairman Rawson also commented upon the subcommittee’s difficulty in approximating the number of kids eligible for the Nevada Check-Up program. He thought there was a minimum of 30,000 children in the state who were in need of the program’s services. Moreover, he felt that it was unfortunate that the state had an insufficient amount of resources to address the needs of the Nevada Check-Up program as he felt it provided valuable services. Therefore he corroborated Ms. Evans support for the second option as well.

SPEAKER DINI SECONDED THE MOTION.

Senator Raggio asked if, under option two, the program would obtain the flexibility to move the enrollment goals backward or forward within the enrollment cap.

Chairman Rawson replied affirmatively as the program needed the flexibility to adjust enrollment figures between years.

THE MOTION CARRIED UNANIMOUSLY.

Mr. Abba noted that the division would include language in the Appropriations and Authorization Act to allow the division to move monies between fiscal years to provide the flexibility that the program needed that reflected the

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Mr. Abba stated the sole issue to address prior to closing Budget Account 3158 was related to the sunset of the Division of Health Care Financing & Policy at the end of the current fiscal year. Mr. Abba noted that Assembly Bill 429 had been submitted to remove the sunset provision from the division. He reported the Nevada Assembly had passed A.B. 429 and was currently awaiting passage in the Senate Committee on Human Resources and Facilities.

Mr. Abba stated the legislation to extend the division however did not extend the Billed Charge Master program. The Billed Charge Master program was due to sunset by June 30,1999 as required by previous legislation. Accordingly, the sunset provision for the Billed Charge Master program was built into The Executive Budget, eliminating two positions within the division.

Mr. Abba stated the elimination of those two positions would create a problem for the division because those positions performed other duties ancillary to the responsibilities required by the Billed Charge Master program. The management analyst position functioned as the division’s Network Administrator in addition to maintaining the charge master data base program. The clerical position provided clerical support to both the division’s cost containment as well as to the division’s administrative office.

One scenario he felt the subcommittee should consider was the option of funding the two positions by an alternative funding mechanism in lieu of elimination. Currently, under the Billed Charge Master program, those positions were funded by an assessment against the six large hospitals in the state. Those assessments ranged from a $33,000 assessment to Sunrise Hospital to a $6,000 assessment made to the Mountainview Hospital.

Under the alternative funding proposal, he related the division proposed combining the costs into one sum totaling $92,000 in FY 2000 and $96,000 in FY 2001, as the positions performed other duties related to cost containment functions. Under the health care cost containment component those position’s costs would be picked up via an assessment against the 832 health insured regulated industries of the state. In doing so, the costs of those two positions would be spread out over a larger base.

Mr. Abba noted that if the salary costs for the two positions were incorporated into the annual cost containment fee, the assessment to the industry would have to be increased by approximately $110 to $903. This calculation was based upon the 832 insurers licensed in the state.

Chairman Rawson expressed his approval of the fiscal staff’s recommendation to remove the sunset provision from the Division of Health Care Financing & Policy as the division had proven its potential benefit to the state. Yet, he advised the subcommittee to leave the sunset provision concerning the Billed Charge Master Program, as the state was no longer utilizing information collected by the program. He contended that the program came at a significant expense to the state.

In regard to the staff recommendation concerning the two eliminated positions, the Chair felt that spreading the costs amongst the 832 health insurers in the state was a reasonable suggestion.

Rebecca Ward, Budget Analyst for the Department of Administration, testified that the Budget Division supported the Fiscal Division’s proposal concerning the two positions.

Ms. Evans clarified that the subcommittee was to vote on changing the target of the assessment from hospitals to health insurers. If this was not done, she asked if General Fund monies would be used to support the two positions.

Mr. Abba affirmed Ms. Evans statement, clarifying that if the subcommittee did not choose to alter the cost containment assessment, a General Fund allocation would be required to continue the positions. There would be some offset however as the positions were also entitled to some Medicaid match dollars.

The Chair commented that there seemed to be a reasonable case to continue the positions within the division. Ms. Evans concurred.

MS. EVANS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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Mr. Abba recommended that the budget account for Homemaking Services be closed as the Governor recommended. He explained the subcommittee had already approved of the concept of taking the program and transferring it to the Division of Aging Services budget account. After the current biennium, the Homemaking Services budget account would consequently disappear.

SPEAKER DINI SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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Mr. Abba indicated that there were several technical adjustments made to the Welfare Administration budget account.

The first adjustment, made to the base budget, was to align General Fund support to the cost allocation agreed to during the base budget review process. General Fund support was to be reduced by 48.02 percent and would save $88,000 in General Fund support over the biennium.

Other adjustments were made to decision units M-200 and M-584, which would reduce costs for issuing food stamps based on the revised food stamp caseload projections. In addition other adjustments were made to decision units M-825, E-710, and E-720 which were made to reduce computer hardware costs to current prices provided by the State Purchasing Division.

Next, Mr. Abba highlighted the important issues that needed further decision before the budget account could be closed. Decision unit M-200, recommended three new positions and their support costs for the up-coming biennium. The first position was a Social Welfare Program Specialist, which was recommended to support program tracking and reviews, customer service such as responding to client complaints and for developing and re-writing procedures in response to changes in Welfare policy. Also, a new Quality Control Specialist was recommended to assist with federally mandated case reviews, corrective action measures, special targeted reviews, and supportive services. Finally a new Computer Network Specialist was added to install, operate, maintain, and troubleshoot networks, PCs, printers, and communication devices. This would produce a reduced staff ratio to computer hardware of 221:1 for the Welfare Division should the new position be approved. Based upon the information provided by the Welfare Division, Mr. Abba thought the new positions were reasonable requests.

Next, he addressed decision unit M-582, which recommended two new positions, a Social Welfare Program Specialist and a Program Assistant to comply with the more stringent federal reporting requirements. He explained that the requirements mandated that states report disaggregated data that was caseload specific. That data was then used to determine the state’s work participation rate and potential eligibility for Temporary Assistance to Needy Families (TANF) performance bonuses.

Mr. Abba related that the data required was very time consuming to collect. In fact, a total of 1,700 hours of staff time, including 400 hours of overtime, was set aside for the task of accumulating the disaggregated data statistics. Thus, after evaluating those statistics, the Fiscal Division believed the addition of the two positions was warranted.

Senator Raggio asked if the Welfare Division could provide assurances that they could meet the report deadline if the positions were approved.

In reply, Myla Florence, Administrator of the Welfare Division, assured the Senator that the positions would enable the division to submit the report statistics in a timely manner.

In regard to decision unit M-583, Mr. Abba related that the decision unit provided for the additional costs for issuing food stamps to legal aliens who had their food stamp benefits eliminated with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 and subsequently restored with the passage of the Agricultural Research, Extension, and Education Act.

Next, he identified adjustments made to decision unit M-584, which provided funding for the implementation of an Electronic Benefits Transfer (EBT) system as mandated by the PRWORA. He clarified that the federal legislation had mandated that states develop an electronic transfer system by October 1, 2002.

He noted that a cost benefit analysis report would not be available until after the termination of the Seventieth Legislative Session. However, he stated the information provided by that report would be useful in helping to determine which direction to head with EBT.

Mr. Abba related that the costs of the EBT system were estimated to be higher due to the increased costs associated with the issuance of food stamps per transaction. He mentioned that the current method of issuing food stamps was through direct mail or through an over the counter.

Mr. Abba explained that the recommended budget provided $270,000 in FY 2000 for a quality assurance contractor, and Master Services Agreement programmers who were contracted to develop an efficient implementation plan for the EBT system. He related that there had been concern over whether or not those funds were needed. But based upon the fact that the cost-benefit analysis was not currently available to the Fiscal Division, fiscal staff recommended that the funding be provided under the condition that a letter of intent be issued to the Welfare Division. Specifically, the letter would instruct the division to return to the IFC once the cost-benefit report was finished and EBT alternatives were evaluated. Afterwards he stated the committee would have a better idea of how the $270,000 allocation was to be used.

The funding designated for the second year of the biennium was the additional monies currently projected to run the EBT system versus the direct mail or over-the-counter system. Mr. Abba noted there might be adjustments to that expenditure because the implementation process was predicated upon an October 2002 implementation date. Therefore, he stated that staff recommended that the decision unit be approved as recommended.

Senator Raggio clarified the date upon which the federal government mandated the implementation of an EBT system. Mr. Abba replied the system was required to be in place by October 1, 2002. The decision unit would provide support for the commencement of the implementation of the EBT system.

Senator Raggio was still concerned that the federal mandate, which sanctioned tardy compliance, might put the state at risk should the Welfare Division lag in its development of the EBT system. He needed assurance that the committee would not be misled into believing the division could meet the targeted date.

Ms. Florence responded to Senator Raggio’s concerns by stating that the Welfare Division had reserved their right to request a waiver from the U.S. Secretary of Agriculture if the division determined as a result of the cost-benefit report that it was not cost-efficient to implement an EBT system. Thus, she did not feel failing to implement the system by October 2002 would cause the state to be penalized.

Based upon information given to him by fiscal staff, Senator Raggio was of a different opinion. He understood that the U.S. Department of Agriculture (USDA) did not expect to grant such waivers to any state, as they had indicated there was no justification in doing so.

Ms. Florence replied that she was unaware of such information. She articulated that the USDA desired every state to implement an EBT system. But recently some states had already exceeded their cost cap. She felt the Welfare Division’s hesitancy concerning this issue would benefit the state, by determining the cost effectiveness of the EBT implementation. She did not contend with the fact that the EBT system would benefit the division’s clientele and the federal government. The federal government in particular saved money by requiring the implementation of the EBT system.

Ms. Florence continued to explain that the delay resulted from the USDA requirement that the state complete a 3-month study of persons involved in food stamp issuance. It was expected that the study would support additional costs, which increased the monthly cost per case. Consequently, following the study, the EBT system would be cost beneficial.

Chairman Rawson then commented that he felt it was important to apprise the IFC of that report.

Senator Raggio asked if there was real potential for a waiver to be issued. He maintained that the cost-benefit report should be received before the subcommittee voted to approve the entire implementation process. He was still concerned that sanctions or penalties would ensue as a result of the division’s delay in developing an EBT.

Ms. Florence responded that the cost-benefit study needed to be completed before the division could pursue any alternative regarding the EBT system, including its implementation or the decision to request a waiver from the USDA.

Mr. Abba then addressed decision units, M-825, E-710, and E-720. Specifically, M-825 provided funding for the replacement of 126 personal computers that were not Year 2000 compliant. Decision unit E-710 provided for funding of the replacement equipment which included a leased copier, 35 data drops each fiscal year, Novell licensing agreements, 97 personal computers that were Year 2000 compliant, three laptops, one laser printer, and baluns. He added that decision unit E-720 provided for new equipment that included side chairs, partitions, a microfiche reader, one laser printer, three fax machines, one file server, and three hubs. He mentioned that technical modifications had been made to align computer hardware prices with the State Purchasing Division’s price list.

Mr. Abba related that the budget did not include adjustments to the Nevada Operations Multi Automated Data Systems (NOMADS) component. That issue would have to be dealt with at a later date.

SENATOR RAGGIO SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Ms. Evans then commented that she had heard rumor of the progress the division was making concerning the NOMADS system. She wondered if Ms. Florence could confirm rumors, which indicated the division had been working closely with various counties to develop a plan that looked achievable.

Ms. Florence replied that the rumors described by Ms. Evans were accurate in that much progress had been made since the Governor had become personally involved in the issue.

Ms. Evans acknowledged Ms. Florence’s diligence and effort as well as the leadership that had been provided by the Governor. She asked when the division expected to prepare a report to fiscal staff in order to prepare the budget closing sheets.

Ms. Florence responded the Governor was in the process of finalizing some issues. She anticipated that a report could be submitted to the committee within a few days.

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Mr. Abba explained that the budget was based upon a significant reduction in the TANF caseload compared to the FY 1998 actual figures. However, he reported that the Welfare Division had re-projected the TANF caseload in February. As a result a more significant reduction in the TANF caseload was predicted for the FY 2000 - FY 2001 biennium.

He then highlighted a table that had been provided by fiscal staff, which illustrated The Executive Budget’s current recommendations regarding TANF caseload and it’s associated cash assistance costs. For FY 2000, the budget had been predicated upon a caseload of 22,942 average monthly recipients. A caseload of 21,917 was used to calculate the TANF budget for FY 2001.

Mr. Abba observed that the revised caseload projections reduced those caseload estimates by approximately 5,000 recipients per month. Under the revised the category, he specified the caseload for FY 2000 was anticipated to be 17, 877 average monthly recipients while a caseload of 16,975 average monthly recipients was projected for FY 2001.

Next, he explained that the technical adjustments reflected in the TANF budget moved the cash assistance costs for the reduced caseload from the Cash Assistance Expenditure category to the TANF "rainy day reserve" category. The reductions to be placed in the reserve fund amounted to $7.3 million in
FY 2000 and $7.4 million in FY 2001.

Mr. Abba stated that previously, if there had been a caseload reduction, fiscal staff would have been able to recommend a reduction of half of the associated costs from the General Fund. However, as a result of the Welfare Reform Act, the state was required to maintain a certain expenditure level. Therefore, fiscal staff currently recommended the reduction of the Cash Assistance Expenditure category and moving the entire amount, which was comprised of TANF block grant monies, into the reserve category.

He felt this plan was reasonable because a strong reserve fund should be set aside to support additional caseload cash assistance costs should the division realize higher than anticipated caseloads for the upcoming biennium. For example, for every increase of one thousand recipients, there was an associated cost of $1.3 million. Without a health reserve, those costs would have to be paid through General Fund monies.

Chairman Rawson commented that the associated cost per 1,000-unit increase was a monthly cost. He calculated that a 1,000-unit increase in the TANF caseload would total almost $14 million per year.

Mr. Abba corrected that the cost of the increase was an annual cost, not a monthly expenditure. Furthermore, he cautioned that an increase of 1,000 recipients per month was a probable occurrence and that it could happen quickly.

Ms. Evans clarified that the savings, which would result from a diminished caseload, were funneled towards the reserve so that, should caseloads begin to increase during the biennium, the reserve could be used to support the increase.

Mr. Abba affirmed Ms. Evans’ understanding of staff’s recommendation for the reserve fund.

Senator Raggio noted that block grant funds could also be used for NOMADS development if they were somehow related to welfare reform. Thus depending upon the final decisions concerning NOMADS, savings from caseload reductions could be used for NOMADS.

Mr. Abba confirmed Senator Raggio’s statement and explained that currently, the NOMADS category, M-581 in the Welfare Administration budget account, included a $1 million allocation for employment and training activities related to welfare reform. If NOMADS incurred additional costs, the TANF reserve fund could be utilized.

Ms. Evans opined that the committee should exercise caution concerning the depletion of the TANF reserve. She held that because its budget had been capped, subsequently restraining the division form requesting additional budgetary support, the reserve account should have sufficient resources to accommodate possible increases in the TANF enrollment.

However, Senator Raggio noted that the Governor had projected both a $9.6 million and $8.6 million allocation already in the TANF reserve fund. He thought the addition of $7 million in both years of the biennium appeared extravagant. He thought the reserve would be adequate enough to manage potential caseload increases as well as ancillary NOMADS costs.

Mr. Abba then continued, addressing decision unit M-202, which provided
$1.7 million each year to contract for case management services for employed TANF recipients in Clark County. He said the division’s current contract for FY 1999 provided for those services and had been included in The Executive Budget because at the time of the budget’s inception the contract had not been in place. The services that were provided were job retention case management services, which were given to newly employed TANF recipients. He also noted that the division already had such a contract in place for Washoe County.

Decision units E-256 and E-257, transferred TANF block grant funds in the amount of $1.1 million to the Purchase of Social Services budget to replace the loss of Title XX funding. Federal regulations allowed states to use a portion of their TANF block grant funding for this purpose.

Decision unit E-350 was a proposal by the Welfare Division concerning welfare reform. The proposal would provide a $187 monthly cash assistance increase for a component of their TANF population called "non-needy caretakers." Currently, about 1,700 non-needy caretakers comprised the TANF caseload component. Additionally, he explained the proposal would increase the cash assistance payments from $288 per case to $475 per case.

Mr. Abba reminded the subcommittee of previous concerns over the proposal’s cost. He related the cost of the proposal for the first year of the biennium was estimated at $1.9 million, while the second year costs were estimated at $3.7 million. The first year cost was less that the second year cost because of the delayed start date. The total biennial cost of the proposal was $7.5 million.

Thus, Mr. Abba related that per the subcommittee’s previous cost concerns, fiscal staff had developed three alternatives. The first alternative phased in the $187 increase over two years in equal installments of $93. The effective dates of the increase would be January 1, 2000 and January 1, 2001. Under this scenario, Mr. Abba stated the payment increase would reduce the cost of the proposal by $946,000 in FY 2000 and $930,000 in FY 2001. He then noted that phasing in the proposal over a two-year period would delay the full cost of the program until FY 2001 and FY2001.

The second alternative, on the other hand, would phase-in the increase over a 4-year period. This would reduce costs by $2.3 million in FY 2000 and
$3.7 million in FY 2001. This would delay the full costs of the proposal over the next two biennia.

Alternative three, he explained provided a different approach to granting cash assistance increase to the non-needy caretaker. Instead of providing monthly cash assistance increase, this option provided a semi-annual incentive payment similar to incentive payments that were provided to foster care parents. A $350 incentive payment would be paid twice each year realizing savings of $2.5 million in FY 2000 and $3.8 million in FY 2001.

Mr. Abba stated that all three of the scenarios had taken on a different context as a result of the reductions in the predicted TANF caseload. He thought that cost concerns might have diminished as a consequence of those reductions.

Senator Raggio then inquired as to how the increase would be funded. Mr. Abba replied that the division had proposed to pay the entire cost of the increase with TANF block grant funds. If one of the alternatives were selected, the resultant savings would also be placed in the TANF reserve fund.

Next, Senator Coffin requested clarification of the definition of the non-needy caretaker. Mr. Abba replied that a non-needy caretaker did not receive cash assistance for themselves but for the children under their care.

Mr. Abba next took up decision unit E-351, which included the second welfare reform proposal included in the TANF budget. This proposal requested a $350 job retention incentive for TANF recipients who remained employed for a continuous period of 6 months. The division rewarded the individual with a $350 payment, which they felt would provide motivation to remain employed as well as to maintain self-sufficiency.

Mr. Abba related that in order to receive this one-time payment, the individual was required to maintain contact with the division and would help them in tracking the whereabouts of the individual.

Next, addressing decision unit E-352, Mr. Abba stated that savings were requested to reinstate the diversion program that had been approved during the 1997 Legislative Session. Called the Self-sufficiency Grant, the proposal provided a one-time payment equal to 3 months of cash assistance payments to a select number of TANF applicants. He then disclosed that the budget was based upon a 40 case per month workload.

Mr. Abba noted that a number of issues delayed the implementation of the grant program in the current biennium. He observed that the division had worked with a number of entities to rectify those concerns. Therefore, he felt the proposal seemed reasonable.

In regard to decision unit E-353, The Executive Budget provided $120,000 each year to contract for second chance homes. The homes would be placements for teenage parents who could not live in their parents or guardian’s home due to an unhealthful living situation. The division would work with the teenage parent and locate them in the second chance homes.

He described the homes as structured placements that provided supervision and training of parenting, budgeting, health and nutrition skills.

Senator Raggio stated that the most important issue concerned decision unit
E-350. He wondered if the cash assistance provided to the non-needy caretakers was reflected in The Executive Budget in the line item on cash assistance payments.

Mr. Abba replied affirmatively.

Senator Raggio continued that the decision facing the subcommittee concerned the method by which the increase in cash assistance to non-needy caretakers was to be provided. He thought that it might be more of an incentive if the increase was issued in a lump sum semi-annually, even though it provide less money in the long run.

However, he thought that alternative one, which phased in the payment over a two-year period would be the best option to take. He repeated that the first alternative would save $930,000 in the first year of the biennium and
$1.8 million in the second year. Phasing the payment over a four-year period was too long a time frame.

Ms. Evans also commented that the increase in cash assistance to the non-needy caretaker was justified. She recalled that the item was linked to the Welfare Field Services Budget Account 3233. In that account the Professional Development Center for Northern Nevada had been discussed in relation to the savings incurred from the phase-in approach which was proposed for the assistance increase. She thought those savings could be used to offset the start-up costs of the center. Not only clients would benefit, but also employees who would receive comprehensive training as a result of those savings.

Therefore, she suggested that the subcommittee give careful thought to adding the stipulation that savings which would result from the phasing in of the cash assistance increase, be used to support the Professional Development Center of Northern Nevada. Ms. Evans then stressed that improvement to the Center was greatly needed.

SENATOR RAGGIO SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

* * * * * * * * *

Mr. Abba began by stating the Welfare Field Services budget account contained several technical adjustments.

First he addressed decision unit E-125, which recommended two new Social Worker Supervisor positions to reduce the current supervisor-to-worker ratio from 1:16 to 1:8. He noted that neither the Budget Division nor the Fiscal Analysis Division budgeted caseload or staffing ratios in the Welfare Administration budget, however in the case of Welfare Field Services, he contended the budgeting of staffing ratios was appropriate.

Within Welfare Field Services, there were 32 Social Workers within the division’s administrative structure and two Social Work Supervisors. Mr. Abba explained that this was because the 24 Social Worker Positions had been added in the Sixty-ninth Legislative Session without an addition in supervisory staff. He related that if the two positions were approved, the supervisor-to-worker ratio would be reduced. He felt this was a reasonable request.

Decision unit E-350 recommended a new Social Welfare Manager IV position and its support costs to assist the Deputy Administrator for Programs and Field Operations in overseeing district management staff in the division’s various district offices. The new position would effectively act as a Field Supervisor over eight District Office Managers who were located in Clark County and various rural areas within the state.

In addition, Mr. Abba envisioned the new position would provide more active on-site supervision and guidance to the district management staff in areas of personnel administration and policy implementation at the field level. The position would be responsible for establishing field operations performance standards, reviewing and monitoring performance progress and monitoring the utilization of staff resources as variations in caseloads occurred. The position would also be responsible for ensuring that quality control standards and reviews would be acted upon to control case processing error rates, and for acting on customer service and client complaints. Based upon that information, Mr. Abba suggested that the request seemed justifiable. He noted the cost of the position would be supported by TANF block grant funds.

Next, Mr. Abba explained that the increased costs of using Peace Officer Standards and Training (POST) certified security guards were reflected in decision unit E-375. He noted that Assembly Bill 319 of the Sixty-ninth Legislative Session required POST-certified security guards to be used at state facilities. The recommended budget was based on the cost of using POST-certified guards was at $25 per hour, however the State Purchasing Division entered into a contract for those services statewide at an hourly cost of $16.50. Mr. Abba disclosed there were closing modifications to reduce the anticipated cost to the $16.50 level. This provided for savings of $100,000 over the biennium. He then stated that the hours of service would not be changed and the coverage would remain at the requested level.

He then relayed that decision Unit E-710 was the replacement equipment module for the budget. Monies were recommended for chairs, side chairs, folding tables, calculators, file cabinets, and bookcases. The decision unit also requested two replacement vehicles in Pahrump and Reno and 84 replacement desks.

A technical modification had been made to reduce the cost of the 84 replacement desks that were used in The Executive Budget. Thus based on that information, Mr. Abba felt the request appeared reasonable.

Chairman Rawson interjected to suggest that the agency receive information on prison industries, who had the ability to order manufactured equipment.

Mr. Abba reminded the subcommittee that the establishment of the Northern Nevada Professional Development Center (PDC) of Northern Nevada located in Reno was not recommended for funding in this budget. The budget closing proposal would establish a center in Reno similar to the one in place in Southern Nevada, but on a smaller scale. The facility would only have two training rooms and a PC lab for 20 students. Also, depending upon the division’s experience at the Las Vegas facility, the center in Reno also proposed housing a childcare facility on the premises.

He added that the building would require additional leased building space and infrastructural costs for a file server and related computer equipment, a telephone system, and outfitting costs for furnishings. Anticipating an
October 1999 move-in date, the total costs for the center in Reno was projected at $357,000 in FY 2000. Used to match federal funds, the state General Fund appropriation of those costs was $104,000 in FY 2000 and $56,000 in FY 2001. TANF block grant funds and federal food stamp monies would provide the remainder of the funding.

Senator Raggio asked why the appropriations designated for the second year of the biennium were less than the first.

Mr. Abba replied that during the first year of the biennium, funding was designated for outfitting costs whereas during the second year of the biennium funding was designated for leasing and security costs. He then referred to information provided by staff, which detailed the total cost of the project broken down by specific line items.

Ms. Evans then wondered how the agency planned to address childcare issues at the northern Nevada center.

Ms. Florence responded that the division was in the process of developing the childcare portion of the Professional Development Center in Las Vegas. Therefore, she recommended that the agency wait to acquire more experience in managing a childcare operation at that facility before it committed itself to operating a childcare center at the facility in northern Nevada. Potential funding for a childcare center at the Reno-based center out of the existing childcare budget was available, as the division had recently applied for a federal grant to subsidize the training for southern Nevada. Consequently, she believed the center in Northern Nevada would have funds for childcare as well.

Ms. Evans then asked if the addition of a childcare center at the facility in Reno was likely to occur in the upcoming biennium.

Ms. Florence responded that the childcare portion of the PDC center in Reno could be added in the forthcoming biennium assuming that the childcare center in Las Vegas was operating smoothly.

SENATOR MATTHEWS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

* * * * * * * * *

Mr. Abba stated that since the last budget hearing the Fiscal Division had received a request from the Welfare Division through the Budget Division to re-appropriate $601,595 for FY 2000 for the development of a super-system.

He stated the Welfare division would reserve that appropriation in FY 1999. He reminded subcommittee members that the super-system was a stand-alone system separate from NOMADS, but that it had bridging capabilities to accept Nomads information on eligibility. The system was a PC based system that would have Internet connectivity and would be used to track welfare-to-work recipients as well as for the division’s various employment and training activities. Additionally, the system would be used to track individuals who participated in the Self-sufficiency grant program and would follow the different criteria that TANF recipients agreed to in their personal responsibility plans, which were an integral part of the welfare eligibility process.

He indicated that the closing adjustments recommended by the Fiscal Division proposed to re-appropriate $501,575 instead of $601,575 as had been requested. The reason for the $100,000 difference was attributed to the fact that the program had hard state and certified matching capability. He relayed that certified match funds were available through the Department of Training, Rehabilitation, and Employment Claim and Employment program. He disclosed that the division had used certified match funds from that program in the amount of $116,000 through December 1998. Therefore, fiscal staff assumed that the program could apply for $25,000 per quarter from that particular account to be used as certified match funds, allowing for a $100,000 reduction of the state’s portion.

Additionally, he pointed out that in FY 2001, no budget was reflected because the program existed as a 3-year grant only and federal monies were associated with that grant cycle. Most likely, Mr. Abba stated that unspent carry forward monies would be available for FY 2001 from FY 2000. Moreover, he articulated that a one-time performance bonus had been set aside for states designated as high-performing states. As Nevada was anticipated to be one of those states that qualified, Mr. Abba thought there was a chance that the division could receive up to $793,000. Although he did not think it was feasible to budget those monies, he felt it was reasonable to expect that because of the carry forward monies and the strong likelihood that the state received bonus monies, staff recommended that a letter of intent be issued to the Welfare Division to report back to the IFC on the status of the program. He added that the program should also report to IFC concerning the responses to request-for-proposals (RFPs) for the super-system to identify the total costs of the system.

Ms. Evans asked for the Welfare Division’s assurance that the super-system would link to NOMADS so that the system would be interactive.

Ms. Florence verified that the systems would be compatible as the division had already developed a bridge for ENT information to the Legacy system. She explained that the interaction between NOMADS and the new super-system would involve a similar kind of development. Technical solutions were available and they negated the need for further development. Furthermore, she maintained that the purpose of designing the super-system was to create a tool that was compatible with the equipment and systems already in place.

SPEAKER DINI SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

* * * * * * * * *

In order to close Budget Account 3267, Mr. Abba addressed the base budget request and decision units M-200, M-201, E-350, and E-355 jointly. He explained that each of those decision units had alternate component parts to the childcare funding which was recommended in the budget.

He explained that The Executive Budget included approximately $45 million in childcare funding for the upcoming biennium. This included $8.4 million in state funds for each fund too.

Specifically, decision unit M-200 included additional federal childcare funding and state match funds to reduce the current waiting list of 3,900 children by 950 children. He reminded the subcommittee that there was a significant amount of additional childcare money available that had not been anticipated at the budget’s inception. In fact, the Welfare Division had reported that there was $1.2 million in Federal Childcare Discretionary funding that would be available for both fiscal years of the biennium. The money did not require a state match.

Additionally, Mr. Abba related that an additional $1.1 million in federal childcare matching money was also available, but this money required either a state or certified match. Members of the subcommittee had directed the division to work with Nevada Association of Counties (NACO) and various local agencies to see if certified match funds were available. As a result, Mr. Abba reported the division had been able to identify sufficient federal childcare matching funds allotted to Nevada. He also relayed that the various agencies had indicated a willingness to certify the match of a total of $1,134,739 to obtain the additional federal matching funds. He noted the closing adjustments incorporated the additional discretionary money and federal matching funds.

So as a result of the availability of those sources of support plus the increased monetary support which was included in decision unit M-200, the childcare waiting list was expected to be reduced by 2,350 children. Those were children designated as the division’s highest priority in need of childcare. Those children belonged to families who were at the 185 percent of need level standard.

Mr. Abba then mentioned that awaiting lists for families awaiting childcare services would still exist. Nevertheless, he believed that the potential for additional federal monies did exist.

In decision unit, M-202, The Executive Budget called for the addition of a Management Analyst position and its support costs to work in the childcare program. At the time two positions were responsible for the oversight of all of the childcare funding which was distributed through out the state. Based upon the recent growth of childcare funding, Mr. Abba justified the addition of the position.

Next, Mr. Abba addressed the base decision unit alongside decision units
M-203, M-593, and E-352. He explained that each of those decision units dealt with the NEON program, which provided for employment education, training, and supportive services to TANF cash assistance recipients. NEON participation was a mandatory condition of eligibility for what was termed "all non-exempt TANF applicants and recipients."

Mr. Abba related that the budget was predicated on serving a portion of the non-exempt TANF cash recipients and based upon the new caseload projections the budget would serve almost 100 percent of those recipients with the exception of the first year. Therefore a small amount of additional money was needed to serve each one of those recipients.

He indicated that in the budget closing remarks, he had included $22,000 in
FY 2000 to allow the division to serve 100 percent of the NEON mandatory population.

Mr. Abba then pointed out that decision unit E-352 provided $496,000 each year in TANF block grant funds to expand NEON supportive services. The expansion would allow the division to reimburse NEON participants for actual mileage going to and from work activities, vehicle repairs, vehicle registration, vehicles insurance, and relocation expenses when a participant accepted a job offer.

The closing adjustments to the account included the additional funds requested for FY 2000 for allowing 100 percent of the projected caseload to use NEON services. In FY 2001, however, there was an over-budgeted amount for the projected number of clients. Therefore, he recommended that the money be retained within the NEON program, allowing the division to target the harder core clients and to provide additional training services.

Next, he stated decision unit E-125 provided for a new Employment and Training supervisor. He articulated that the addition of this position would allow the division to reduce the supervisor to worker ratio from 1:10 to 1:8. But because the Welfare Division was not budgeted according to caseload or staffing standards, fiscal staff requested additional justification.

Mr. Abba noted that the current supervisor to staff worker ratio for the Belrose and Owens offices was 1:10 whereas the ratio at the Charleston office was 1:8. Also, the Henderson office had a supervisor to staff worker ratio of 1:8, while the Reno office had one supervisor for every nine workers. Outside of that component, Mr. Abba stated that there were additional staff workers who were supervising rural district offices.

Thus, he contended that the supervisor to staff worker ratio appeared to be at a manageable level. In fact, only two offices had a ratio of one supervisor for every ten staff workers. Subsequently, he informed subcommittee members that the Welfare Division wished to locate the new supervisory position in the Belrose Office, rendering the supervisor to staff worker ratio at a level of 1:5.

On the other hand, if the supervisor position was reconfigured in some manner to provide services to the Belrose, Owens, and Charleston offices, the supervisor to staff worker ratio would drop to 1:7. Mr. Abba articulated that the division’s need for an additional supervisor position was not critical.

Next, decision unit E-353 addressed the Food Stamp Training and Employment component to the program. This unit comprised the additional federal money that was used for the Able Body Adults without Dependents program. Currently, the division contracted out the program’s services with Job Opportunities in Nevada. Mr. Abba stated that the division had been approved to continue that structure through FY 1999.

Ms. Evans then directed Ms. Florence to verify the amount of money available in federal match funds for childcare. She was uncertain as to the exact amount of funds available to the state. She repeated that in a previous hearing, the Welfare Division had reported that there would be in excess of $1 million in federal money if a certified match could be found.

Ms. Florence responded that $1.3 million would be available in certified match funds from the federal government. She then added that several proposals had been submitted to increase the availability of childcare monies in the up-coming biennium. Therefore, she reiterated that the Welfare Division would continue to identify matching sources as the biennium progressed.

Ms. Evans then thanked the League of Cities and NACO for their cooperation with the Welfare Division. She thought that through their cooperative efforts, in excess of $1.3 million had been identified and she hoped those dollars would be used to their maximum potential. Next, she asked if any funds were available through the division’s childcare to assist Child Protective Services, as the need for greater support to childcare was substantial.

Mike Willden Deputy Administrator, Welfare Division, answered that money was used in two ways to assist in child welfare. First, funds were funneled through TANF Emergency Assistance grants, which were given to counties to spend in areas like childcare. Second, he identified Childcare Development Funds, which were passed through to the Economic Opportunity Board in Clark County and to the Children’s Cabinet in Washoe County to support direct childcare. Moreover, he indicated that a portion of those funds assisted foster parents to obtain childcare. In fact, the needs of foster parents were considered a priority and were usually the first in line to receive additional funds.

Ms. Evans asked if those funds targeted TANF clients only or if they were also used to support Child and Protective Services.

Mr. Willden replied that none of the funds went directly to the Division of Child and Family Services, but went to the division’s contractors. Also, the funds were not only used to assist TANF families, but other low-income, "at-risk" families in need of childcare support as well.

Mr. Willden then added that the division desired to identify local needs before the new funds, which had been derived from the certified match process, could be designated for a specific initiative. For example, he observed that additional support was needed in the area of child welfare and foster parent care.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

* * * * * * * * *

Larry Peri, Senior Program Analyst, Fiscal Division, presented the budget closing review for the Purchase of Social Services budget account. He began by noting that the budget had been heard by the Joint hearing of Assembly Ways and Means and Senate Finance Subcommittee on Human Resources/K-12 on February 9, 1999.

He then cited the two technical adjustments made to the account. The first adjustment reduced Title XX revenue in the first year of the biennium by $184 and by $297 in the second year of the biennium. Subsequently, an increased transfer from the Children’s Trust Account in the Division of Child and Family Services would be used to offset the reduction of those funds. Mr. Peri added that the adjustment correctly reflected the 20 percent salary transfer, which consisted of salary and fringe costs for a Social Welfare Program Specialist position in the account. That position administered the Title XX grant program and the Children’s Trust Account.

The second technical adjustment made to decision E-352 reduced the Title XX transfer to the newly combined Homemaker and Elder Protective Services budget by $86,334 in FY 2000 and by $83,877 in FY 2001 to eliminate excess Title XX revenue that had been incorrectly recommended for that budget. In fact in that account, Medicaid revenue had been removed and Title XX funds had been inserted unnecessarily.

Mr. Peri then added that $27, 285 in FY 2000 and $31,701 in FY 2001 had been designated to be transferred out to the Aging Services budget. He said that budget included Title XX revenue recommended to be drawn in, however the Title XX budget did not have that money going out. As a result, he observed that the committee would incur excess expenditure authority of $59,049 in FY 2000 and $52,176 in FY 2001. He then suggested that the excess expenditure authority could be added to an existing budget account.

Senator Rawson then repeated that the current budget was out of balance, as it had an excess of Title XX funds. However, he noted that there were limitations concerning where those funds could be used. He thought that nearly 4,000 hours of service could be purchased to alleviate some of the extensive waiting lists in the state.

Ms. Evans thought a strong case could be made for returning the funds into the Homemaking Services budget where they were needed. She thought that the motion should include a provision that added excess funds to the Homemaker and Elder Protective Services budget account.

Next, Mr. Peri stated the program’s budget had been substantially scaled back from the budget that had been approved for the current biennium. He pointed out that during a previous subcommittee hearing, certain questions had been raised concerning the $75,000 allocation for each year of the biennium for a media services contract. Also at issue, was the subcommittee’s request for information on a cost benefit analysis and an evaluation of the program. As the agency’s response had been just recently received, Mr. Peri stated that a summary of the response was not available.

Mr. Peri articulated that staff made no technical adjustments to this budget account. However, two issues were identified that needed clarification by the subcommittee. The first issue concerned the revenues that funded the account. Mr. Peri elaborated that although General Fund monies funded the account, a small amount of Child Care Development Fund monies also supported the budget account. He reported that the budget allocated $505,098 in Child Care Development funds in FY 2000 and $480,859 in FY 2001. He felt the subcommittee might wish to consider increasing the allocation of those funds during the second year of the biennium by $24,239 to equal the amount allocated in FY 2000. This would be based upon the availability of those child care funds and any increase would offset the program’s General Fund allocation.

Mr. Peri identified the second issue as the potential reduction of in-state travel monies of $34,158 in each year of the biennium. He referenced that in
FY 1999, year-to-date expenditures were recorded in the amount of $28,766 out of the $52,778 available. That amount had been accrued by 14 full-time equivalent (FTE) staff. He indicated that in the upcoming biennium, the Governor had recommended a reduction in staff. Thus, Mr. Peri suggested reducing the travel allocation to one-half of what had been recommended for FY 1999. Thus, if the reduction were made, the budget would be reduced by $7,769 annually from $34,158 to $26,389.

Chairman Rawson expressed that the subcommittee still had questions concerning a customer satisfaction survey and the $75,000 media services allocation.

Charlotte Crawford, Director of the Department of Human Resources, first apologized for the tardy response to the concerns addressed during the previous subcommittee hearing.

Second she stated that after reviewing previous testimony and The Executive Budget, she found the department had not accurately expressed the request for funds related to an independent data collection and evaluation system. She clarified that although the term evaluation may have been ambiguously defined at that time, the intent of the contract was to develop a data collection system that would allow an on-going measurement of the program, a long-term contract, Ms. Crawford thought it had been understood that the long-term benefits could not be measured in the initial biennium or possibly in the first two biennia.

Ms. Crawford then related to the subcommittee that the department had contracted with the university for the purpose of identifying the indicators and developing a system of data collection. The contract also intended to develop a network to collect and portray the data on a forward basis. Subsequently, the data that had been collected as a result of the contract was reported to IFC. It indicated the number of families that used social services, the types of services they used, and family income by location.

She repeated that the data reported to IFC, were the measurements that had been part of the contract with the university to work with Family-to-Family staff. Therefore the report submitted by the department had been based on those figures. Ms. Crawford emphasized that the department had not asked the university to independently assess the performance of the program, but to accumulate a set of data elements that would support a long-term evaluation of the program.

Again, she apologized for the misunderstanding concerning the definition of the term "evaluation." However, she hoped that her present testimony had clarified the matter to the subcommittee members.

Chairman Rawson asked if the New Baby Center’s included drop-in childcare. Ms. Crawford replied that drop-in childcare was a component to some of the services provided by the centers.

The Chair then asked if the department could manage with the reduction in travel expenses. Ms. Crawford then deferred response to Mark Roberts, Administrative Services Officer for the Department of Human Resources. Mr. Roberts answered that the agency’s travel expenses were built upon the travel expenses of 14 staff members. Out of the seven staffers that remained after the budget cut, he indicated that six of those staff members would be travelling. He did not feel it was a true 50 percent reduction in staff and requested that the amount of in-state travel funds granted to the agency remain at the amount of $34,158. Regardless, he stated that the agency could live with whatever amount the subcommittee chose to allocate.

Mr. Goldwater then expressed his displeasure at the manner in which the budget had been cut. He stated that although the search for quantifiable measures used to justify the program’s services was commendable from a budgetary standpoint, he felt there were many intangible issues that raised some concern. After listening to testimonials concerning the frustrations which had been averted as a result of the services provided by Family-to-Family, he felt those results could not be quantified. For that reason, he indicated that he would not vote to approve the budget.

Chairman Rawson then asked if Child Care block grant funding was available during the first year of the biennium. Mr. Roberts replied affirmatively. Child Care block grant funds were available during both years of the biennium

Senator Raggio thought that the speaker’s motion to close the budget should be amended to include a deletion of the media services contract funds from the budget. He reiterated that as the subcommittee had not received information concerning the viability of the contract, the funding was not deserved. Furthermore, he felt the program was well known and did not need such a significant advertising contract. Therefore he felt that the motion should indicate that the $75,000 advertising contract be reduced by half to $37,500.

Mr. Dini accepted Senator Raggio’s amendment to his motion to close the budget account.

Mr. Peri first addressed an adjustment made to the base budget that had been an issue with the subcommittee in previous hearings. He stated the reduction in federal Victims of Crime Act grant funding, which resulted in a total of 3.49 FTE positions being deleted had been a source of contention. This would potentially reduce services in the Family Preservation Program.

As discussed in the subcommittee hearing on March 19, 1999, the Welfare Division of Child and Family Services had indicated that they had reached an agreement with Washoe County, wherein the county would apply for the grant funds and would continue to provide services for the Family Preservation Program. Therefore, no reduction in services in that program was anticipated.

Mr. Peri then took up several technical adjustments made to the budget account. First, in the base budget, Mr. Peri suggested that the General Fund appropriation be reduced by $38,284 in FY 2000 and by $38,963 in FY 2001. By increasing federal Title IV-B Subpart II grant funds to the federal fiscal year 1998 level. Additionally, he noted there were two half-time positions in the budget that received full benefits and there were also similar positions in the Child Care budget account. The same incumbents filled both positions and the budget provided group insurance in both accounts. The Fiscal Division did not reduce group insurance in the Child Care budget because it was a smaller budget. However, in the case of Budget Account 3145, fiscal staff recommended that the group insurance duplicate payment be removed in both years of the biennium.

The second technical adjustment recommended in the account was made to decision unit M-625. The decision unit recommended funding for the Hepatitis B vaccinations. Fiscal staff suggested that the amounts in the account reflect what had been recommended in the Youth Parole budget account in The Executive Budget, which amounted to $105 for a three shot series.

More importantly, Mr. Peri noted that the budget account was funded primarily by a cost allocation method that utilized a combination of federal Title IV-E and state General Fund revenue. The budget had been constructed using a "64 percent IV-E penetration rate", which was defined as the number of IV-E eligible cases as a percentage of the total number of cases.

Mr. Peri explained that fiscal staff had worked with the Division to determine the average penetration rate for the last five quarters, ending March 31, 1999. That rate averaged 74.25 percent.

He suggested the subcommittee could consider increasing the IV-E recovery rate by 3 percent each fiscal year. This would increase the rate from 64 percent to 67 percent in the first year of the biennium and up to 70 percent in the second year of the biennium. Any increase in federal IV-E revenue would be a direct offset to the General Fund. Also, the Division estimated that a General Fund savings of $265,440 in FY 2000 and $558,225 in FY 2001 would ensue if the penetration rate used in the budget was increased by 3 percent in each year of the biennium.

Chairman Rawson wondered what the lowest rate of participation was if the average participation rate was 74.25 percent. Mr. Peri replied that in the five quarters reviewed, each quarter had a participation rate above 70 percent. He thought that six or seven quarters back the rate was into the high 60 percent range.

Speaker Dini then interjected upon problems the agency’s Yerington office had experienced. He said there were only two caseworkers and one half-time secretary. The speaker wished to have it reflected in the budget that the half-time clerical position be increased to a full-time position.

Steve Shaw, Administrator, Division of Child and Family Services, explained that 2 years ago, the division had experienced a low point in IV-E revenue of 17 percent and they were budgeted at 38 percent. After making changes to the program’s operation, federal revenue was raised to its current level above 70 percent. He requested that the agency be budgeted according to the Governor’s recommendation, which was 64 percent.

Mr. Shaw reiterated that IV-E funds were tied to poverty level and to Aid to Families with Dependent Children (AFDC) guidelines. Furthermore, he reported that the agency was in the process of opening three new offices in the Las Vegas area with federal grant money. The location of those offices was dependent upon the concentration of clients and their IV-E eligibility in different areas.

In the past, particularly with Medicaid, Mr. Shaw related that workers targeted Medicaid eligible clients in order to earn revenue. He did not feel that action was in the state’s best interest and that it was poor public policy to chase federal dollars in such a manner. Finally, he mentioned that only one state exceeded Nevada in earning federal revenue and since the money was placed in a reserve account the subcommittee and IFC retained authority over those funds.

Chairman Rawson wondered if the agency could approach IFC if additional funds were needed.

Sherie Blackwell, representing the budget division, affirmed the Chair’s understanding and stated that the Budget Division had reviewed the revised estimates based upon the last five quarters. As long as the Division could return to IFC if the penetration rate changed, the Budget Division saw no problem with the recommendation of the budget’s closing.

Assemblyman Hettrick commented that the subcommittee needed to recognize the significant increase in federal funds that had been made in recent years. He was concerned that the positive factors within the budget account would be overshadowed by the potential for the division to return to IFC and be chastised should a higher percentage of federal revenue not be reached.

Chairman Rawson commented that the issue did make subcommittee members nervous. He thought the division should have access to those resources now and he felt that if the division approached IFC in the interim, subcommittee members should remember the issues addressed in the present hearing.

Ms. Evans stated that the subcommittee would have to augment a substantial amount of funds in DCFS for debt service for the new juvenile correctional facility. Furthermore, she stated that legislation existed which made changes to DCFS, calling for a deputy for youth corrections. She felt the time had come for that position to be added to the agency’s budget.

Ms. Evans then asked if Mr. Shaw would speak to the issue of the lack of administrative positions within the division. She felt that the reassignment of DCFS positions from the Chapter I should not have occurred and that the positions should have remained in the Director’s office. She had discussed the issue with Mr. Shaw and had calculated his need for administrative positions. Ms. Evans remarked that the subcommittee desired to have the issue revisited, especially in terms of placing the appropriate number of positions back into the budget, because those positions had originally belonged to the division.

Mr. Peri articulated that three technical adjustments were recommended for the budget account. First, he suggested that the in-state travel allocation be reduced by $4,110 in each year of the biennium to remove training related travel from the in-state travel category. He explained there had been a new training expenditure category created in the budget which contained more than adequate training related travel funds.

The second technical adjustment affected decision units E-175, E-176, E-178, E-179, and E-270. Adjustments were made to software costs based upon revised prices. Also, decision unit E-720 also made adjustments to hardware costs.

The third technical adjustment in decision unit E-179 reduced in-state travel by $2,665 in FY 2000. Mr. Peri explained this adjustment was based upon the October 1999 delayed start-up date of the two new positions that had been recommended.

Lastly, Mr. Peri informed subcommittee members that during a previous subcommittee hearing the division had informed the subcommittee that the contractor for the project, BDM International, would not be able to fully complete all of the deliverables that had been scheduled for the current year and that a minimum 7 to 10 week delay could be expected in the project. The issue was discussed on how to accomplish those deliverables without adjusting the budget and an agreement was reached between the Budget Division and DCFS, which took available monies and allowed them to be carried forward to FY 2000. No adjustments were needed in the budget and subsequently the deliverables would be completed in FY 2000.

Mr. Peri explained that moved the date of the roll out to the end of January 2000, versus the original date of October 1999.

Also known as the child welfare budget account, Mr. Peri explained that the account contained one technical adjustment. Fiscal staff recommended that the room, board, and transportation transfer from the Child Welfare Trust budget account be increased by $53,139 in FY 2000 and $53, 203 in FY 2001. This was based upon revised estimates of children’s benefits and increased Treasurer’s Interest Distributions that would be collected within the Child Welfare Trust account and then transferred to the Youth Community Services budget to assist in the cost of the children’s care.

Mr. Peri also suggested an accounting only change that would split a revenue general ledger by $188,575 in each year of the biennium. This would allow the division to separately identify and track child support payments that went directly into this account. As a result, the General Fund would be reduced by $50,322 in FY 2000 and $50,386 in FY 2001. Furthermore, he said there was no change to the bottom line expenditure level in this budget account.

Chairman Rawson then commented that there had been tremendous progress in the agency’s effort to reduce the 106 out-of-state placements to 21.

Mr. Peri related that the budget account was a new account that had been designed to accommodate expenditures that were related to the new juvenile correctional facility, which was proposed to be constructed in southern Nevada and scheduled to open in June 2000.

He felt the major issue for consideration by the subcommittee was related to a revision that had been submitted by the Budget Division to reflect the final figures of the financing package. The revision added interest expense payments for the Debt Service payment to FY 2000 and increased the amount initially over what had been recommended in FY 2001. Principal payments were removed and the revision indicated that interest only payments would be made in the biennium.

Mr. Peri added that a contract monitor was recommended to be added to the budget. The monitor would be a state employee who would monitor and work on-site at the facility observing the treatment plan and the care given to the youth at the facility. Funding for the position would come from a $4,800 per month contract services change assessed to the operator of the facility.

Associated operating and equipment and other incidental costs were also requested for the new position. The total General Fund impact of the revision was $513,014 that must be added in FY 2000 and $26,602 that needed to be added in FY 2001.

Mr. Peri articulated that there was one technical adjustment made to decision unit E-900. The adjustment aligned the various revenue sources, which supported the transfer in of the Home Activity Program for Parents and Youngsters (HAPPY) program. The transfer consisted of the positions coming from the Chapter I Special Education budget. He stated that General Fund support was reduced by $35,096 in FY 2000 and by $35,178 in FY 2001. Federal funds, which consisted of Child Care Development Funds, Medicaid Rehabilitation Option, and Medicaid Case Management funds, were also adjusted accordingly.

SPEAKER DINI SECONDED THE MOTION.

Ms. Evans then interjected to direct the division to report back to the subcommittee concerning the HAPPY and First Step programs in the next biennium. She was not convinced that the current handling of those two programs was wise. Moreover, she felt the transfer needed to be monitored closely to determine the appropriate placement of both HAPPY and First Step.

Chairman Rawson appreciated Ms. Evan’s concerns and emphasized the importance of revisiting the issue during the next legislative session.

THE MOTION CARRIED UNANIMOUSLY.

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Mr. Peri explained that there were two technical adjustments to the budget account. Similar to the previous budget, he stated decision unit E-904 was adjusted to properly align revenue transfers out of the Chapter I Special Education budget for the First Step program. As a result, the General Fund was reduced by $11,225 in each year of the biennium, while Child Care Development Fund revenue increased by the same amount.

He stated the second technical adjustment, M-201, recommended motor pool amounts from the in-state travel category to the Project Crisis expenditure category, which amounted to $3,708 in each year of the biennium.

Mr. Peri then highlighted issues for the subcommittee to consider. First, he related that the Oasis Family Learning Homes were significantly underutilized. Out of eight homes, four had been left vacant due to the chronic problem associated with the recruitment and retention of Professional Teaching Parents. Since The Executive Budget recommended full costs and staffing for those homes, three options were identified by the division to deal with the underutilization. The first option would employ Mental Health Technicians working in three 8-hour shifts and would open three of the four vacant homes.

The second option was a Teaching Parent Relief model, which would employ Teaching Parent Relief III’s. Opening all four of the vacant homes, this option was the least expensive.

The third option combined the use of Mental Health Technicians and Teaching Parent Relief III’s. The division had identified this option as the second most costly model, which would open three homes.

Mr. Peri stated that each of the three options would not require additional General Funds, however it would require the collection of additional Medicaid revenue. Without that, each of the three options would be more costly than what was already recommended in The Executive Budget.

The second major issue, Mr. Peri felt was the potential Medicaid revenue shortfall in the next two years of the biennium. He related that the division was awaiting a decision on their request for a "Family of One" eligibility ruling. If this designation was approved it would allow the Division to assume custody of non-DCFS custody children and to receive Medicaid revenue for services that were provided at the Desert Willow Treatment Center. If not approved, a potential $1.8 million shortfall would exist in each year of the 1999-2001 biennium. The request would require a state Medicaid Plan change.

Chairman Rawson asked what locations or areas would be served if more homes were opened.

Mr. Shaw answered that the division planned on opening 18 homes. At the present time he thought that they could fill 12 homes. In addition to the people on the waiting lists, he stated the division could use option number three as a step-down for the Desert Willow Treatment Center to help integrate those children into the community. When children entered the Oasis campus-style homes they attended community schools. Therefore he felt it would be a nice transition. Furthermore, the option would allow the center to assume care of much more difficult children in a safe manner.

Ms. Blackwell interjected that the Budget Division concurred with the recommendation to approve option number three.

The third major issue was that the division was also facing a potential shortfall of approximately $300,000 in FY 1999 even if the "Family of One" eligibility designation was allowed.

Chairman Rawson then asked if more General Fund revenue would be needed to fund the requested option.

Jim Baumann, Chief Fiscal Officer, Division of Child and Family Services, replied that he did not believe the option would require an increase in General Fund dollars. The division needed the additional Medicaid authority.

Mr. Peri then added that the potential shortfall in the next biennium would not materialize if the division was successful in their request for the Family of One eligibility ruling. He thought a public hearing had been noticed for an amendment to the state Medicaid plan.

Mr. Shaw then reported that the division had submitted a public notice indicating changes made to the state Medicaid plan. The division had also communicated with federal officials in region nine and he stated that they needed additional information to determine if the changes would become problematic.

Chairman Rawson directed the division to keep committee members apprised of the situation concerning the Family of One ruling. If the decision returned unfavorably, he stated that the budget could be re-opened and the subsequent shortfall addressed properly.

If the request was not approved, Mr. Shaw noted that the potential shortfall would amount to $1.8 million per year in the biennium.

SENATOR MATHEWS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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Ms. Evans then closed the hearing by acknowledging the work of Mr. Shaw who had worked with the division for the last two years. She noted that the subcommittee appreciated his leadership and his extensive effort to improve the operation of the agency.

RESPECTFULLY SUBMITTED:

Janine Marie Toth,

Committee Secretary

APPROVED BY:

Senator Rawson, Chairman

DATE:

Assemblywoman Jan Evans, Chairman

DATE: