The Assembly Ways and Means and Senate Finance Joint Subcommittee on
Public Safety, Natural Resources, and Transportation was called to order at
7:55 a.m., on Tuesday, May 11, 1999. Chairwoman Chris Giunchigliani presided in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

ASSEMBLY SUBCOMMITTEE MEMBERS PRESENT:

Chris Giunchigliani, Chairwoman

Mrs. Vonne Chowning

Mr. John Marvel

Mr. Richard Perkins

SENATE SUBCOMMITTEE MEMBERS PRESENT:

Senator Neal

Senator O’Donnell

Senator Jacobsen

Mr. Bob Price (Excused)

STAFF MEMBERS PRESENT:

The Chair recognized Gary Ghiggeri, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. Mr. Ghiggeri explained committee members would be considering the balance of the prison budget accounts that had not been closed and he would summarize the major assumptions and changes that had been made.

He advised the medical care budget reflected not privatizing services and was continued as a state-operated program throughout the budgets. The Southern Nevada Correctional Center (SNCC) would be closed effective September 1, 2000, to coincide with the opening of phases I and II of the Cold Creek State Prison (CCSP). That closure would mothball 613 beds at SNCC and provide for 890 beds at CCSP. Savings and costs had been distributed among the various budget accounts based upon that activity.

Mr. Ghiggeri told committee members savings were incurred in the Director’s Office Budget in both years of the biennium by approximately $453,000 by increasing the level of funding received from the Federal Government for housing illegal aliens. Staff was recommending that language be placed in the Appropriations Act to allow the Department of Prisons (NDOP) to borrow funds from the General Fund for "cash flow purposes" pending receipt of the federal money. NDOP currently had authority to borrow up to $1 million for "cash flow purposes" and it was possible that amount would need to be increased based on the size of the federal grant award.

Mr. Ghiggeri told committee members the other notable action in the revenue side of this budget was regarding the elimination of approximately $2 million in General Fund costs for housing an average of 107 female inmates out-of-state in FY 2000. Revised inmate population projections indicated those funds would not be required. Committee members were made aware that approximately $631,000 in additional funding was required at the Southern Nevada Women’s Correctional Facility to house an average of 41 additional inmates. He noted there would be an average of 541 inmates housed at the Southern Nevada Women’s Correctional Facility compared to the 500 inmates contemplated in the Governor’s budget.

Mr. Ghiggeri advised committee members there were a number of technical adjustments. Staff had made the following recommendations:

• Separate employee physicals from employee drug tests to allow for better monitoring.

• Additional funding was being recommended for maintenance contracts for video teleconferencing.

• A delay in the hiring of the sewage treatment plant operator at CCSP based upon the delayed opening of that facility. The original hire date was envisioned to be January 2000 and was now expected to be August 2000.

• Training, equipment, and data processing equipment reflected in this budget account was to be extracted and placed in separate legislation funded either with FY 2000 dollars or FY 2001 dollars. The funding would be made available to the NDOP to utilize in both fiscal years of the biennium. This extraction was reflected in this budget and the medical care budget and totaled approximately $2.9 million. That amount would be placed in a one-shot appropriation.

• A recommendation to transfer the year 2000 funding into a separate category and increase that funding by approximately $48,000 based upon problems that had been identified by the NDOP.

• Employee physical funding of approximately $78,000 per year was being added for physicals for employees of the Ely State Prison and Ely Conservation Camp. The funding in the new medical contract for those facilities did not provide for staff physicals.

The Chair recognized Mr. Marvel who asked for reaffirmation from the NDOP that phases I and II at CCSP would be opened as scheduled. The Chair recognized Robert Bayer, Director, Department of Prisons (NDOP). Mr. Bayer told committee members he had been informed by Eric Raecke, Manager, State Public Works Board (SPWB) that the construction for phase I was still on track for a June 23, 2000 completion date and phase II would be completed August 1, 2000. The facility would open August 1, 2000.

The Chair told Mr. Bayer because of the contingency on the sole-source contract NDOP would be asked to negotiate heavy penalties if phase II of CCSP were not completed on time.

The Chair recognized Mrs. Chowning who asked if the name of CCSP would be changed. Mr. Bayer told committee members NDOP was considering several other names and anticipated the name would be changed. Mrs. Chowning told Mr. Bayer committee members strongly recommended the name be changed.

The Chair recognized Senator Jacobsen who questioned the functionality of the prison board. Mr. Bayer pointed out the functionality of the prison board changed with every new administration. He said he had received good direction from the board and felt that direction would increase over the biennium. Senator Jacobsen felt the board was not constituted appropriately and questioned the need for the Secretary of State to be on the Board. The Chair pointed out any change in the board would require a Constitutional amendment.

The Chair recognized Mr. Ghiggeri who reiterated to committee members the statewide medical care had not been recommended for privatization. However, he said, the continued privatization of medical care for inmates housed in the Ely area was recommended.

Deleted from this budget and recommended for funding via separate legislation was one-shot funding in the amount of approximately $557,000 for equipment and $30,000 for startup supplies for the Cold Creek State Prison (CCSP).

Mr. Ghiggeri advised the delay in the opening of CCSP had resulted in salary savings of approximately $67,000 in FY 2000 and $81,000 in FY 2001 for the
17 new positions recommended for CCSP. He explained the existing medical staff from SNCC were being transferred to CCSP to augment the staffing.

The reduction in the medical inflation factor in FY 2000 to 4.2 percent rather than 8.4 percent resulted in savings of approximately $260,000 in FY 2000 and $271,000 in FY 2001. Increased costs for the Ely medical contract required additional General Fund support of approximately $373,000 in FY 2000 and $260,000 in FY 2001. Funding of approximately $1.2 million in FY 2000 and
$1.3 million in FY 2001 had been included as payments from inmates and/or the Inmate Welfare Fund for co-pay or A.B. 389 related costs. That funding compared to approximately $1.2 million that had been included in The Executive Budget for FY 2000 and approximately $1.4 million in FY 2001. Additionally, Mr. Ghiggeri told committee members the Inmate Welfare Fund budget account would include recommended repayments of approximately $400,000 per year to cover prior-year medical costs owed to the General Fund for co-pay or A.B. 389 related medical costs.

The Chair recognized Mr. Marvel who asked if the CMS contract would expire in 1999 and if the $300,000 cap would be removed. Mr. Bayer responded the contract ended June 30,1999 and would be replaced by a new program if medical care were not privatized. He explained the bid requested an estimate for the Ely system and that there was no cap. Mr. Marvel asked if there would be savings as the result of the elimination of the cap. Mr. Ghiggeri said that while he had not seen the new contract, it was his understanding it removed the cap and provided for the contractor to provide prescription drugs. That was one reason the cost for the new contract had increased. He had not yet determined if the new contract would save money. Mr. Marvel asked the number of times the cap had been exceeded and Mr. Ghiggeri responded the cap was cumulative and was exceeded the first contract year and had borderlined each year thereafter. The Chair pointed out to committee members the Appropriations Act would have to include transitory language regarding the fact the NDOP medical system would not be privatized.

The Chair recognized Senator Jacobsen who felt it was important to draft a letter of intent for NDOP to report back to the Interim Finance Committee (IFC) on a quarterly basis regarding the status of its medical care system. The Chair recommended a letter of intent be drafted to the NDOP to track its medical plan.

Mr. Ghiggeri told committee members the Southern Nevada Correctional Center (SNCC) would be mothballed effective September 1, 2000. The anticipated delayed construction at the Cold Creek State Prison (CCSP) required additional General Fund support of approximately $522,000 in FY 2000 and approximately $1.2 million in FY 2001. Savings had been realized in the CCSP prison budget that would offset the cost in FY 2000.

Mr. Ghiggeri advised committee members the Governor, in his State of the State address, had proposed leasing SNCC. No revenue had been included in
The Executive Budget for leasing that facility. Similarly, SNCC’s budget account did not include revenue from the lease of the facility. Mr. Bayer indicated NDOP had provided staff three letters of interest from for-profit companies that had expressed an interest in leasing SNCC. Verbal interest had also been expressed by one federal agency. Mr. Ghiggeri told committee members he had checked with the legal division of the Legislative Counsel Bureau concerning statutory problems that may exist with leasing the facility. The legal division had suggested that a careful review of NRS 212 be conducted and that perhaps transitory legislation be reviewed and approved to facilitate the leasing of the facility over the next biennium to include escapes of inmates, crimes committed by inmates, and clear definitions of liability and responsibility in the operating of the facility. The Chair told Mr. Bayer the preference would be for a governmental agency to lease the facility.

The Chair recognized Mr. Marvel who asked if there would be separate wardens at CCSP and Southern Desert Correctional Center (SDCC) and Mr. Bayer said that there would.

The Chair recognized Senator Jacobsen who said while he was still not "sold" on the closure of the SNCC, he wanted to ensure the honor camp at southern Nevada would not be affected. Mr. Bayer ensured him the staffing at that facility would remain sufficient. He had been dealing with the site selection office of the Federal Bureau of Prisons that had expressed a high level of interest in SNCC. Senator Jacobsen pointed out that camp produced more revenue than other honor camps and he did not want to see that jeopardized.

The Chair advised the Assembly had closed SNCC’s budget, with some support from the Senate, not to close the facility and she had agreed. She said had CCSP opened on schedule there would be no debate regarding the closure of SNCC.

Mr. Ghiggeri told committee members the only notable adjustment regarding this budget account was the increase in utility costs of approximately $208,000 in FY 2000 and $211,000 in FY 2001. He pointed out there was an almost corresponding reduction in the utilities for the Nevada State Prison (NSP) that would offset those adjustments. However, there would be a net increase of approximately $48,000 in FY 2000 and approximately $15,000 in FY 2001. Previously, Mr. Ghiggeri advised, the utilities were billed off one meter. Since the opening of the expanded Warm Springs Correctional Center (WSCC) an effort had been made to meter the costs separately.

Mr. Ghiggeri explained this budget account as presented in The Executive Budget provided for an expansion of 250 beds; however, the information he would provide to committee members did not contemplate that expansion. Additional funding would be provided in FY 2000 to house approximately
41 additional inmates. The funding in FY 2001 was reduced by approximately $4.3 million and provided for an average inmate population of 420 in FY 2001 with the balance of the minimum-security inmates being housed at the Jean Conservation Camp.

Mr. Ghiggeri told committee members the most notable adjustment to this budget account was the extension of the Stickney consent agreement that involved 24 correctional officer and 1 correctional caseworker positions. Those positions, as provided in The Executive Budget were included in this budget account as follows:

• Correctional officers - November through the end of August FY 2000

• Correctional caseworker – December through the end of August FY 2000

The delay in construction of the CCSP necessitated the need for the Northern Nevada Correctional Center (NNCC) to operate for an extended period of time over emergency capacity. Mr. Ghiggeri pointed out NDOP was running approximately 300 male inmates under projections and that if the institution did not have to operate over emergency capacity, corresponding funding should not be expended for other purposes.

Mr. Ghiggeri said this budget included $325,000 to repair the locks in unit 7. Staff was recommending that amount be extracted from this budget account and placed in the capital improvements program. An estimate provided by the SPWB indicated the cost would increase almost $100,000, $39,000 of which represented inspection and plan checking and a contingency fund of approximately $60,000. He advised SPWB would review its estimate.

The Chair recognized Mr. Marvel who asked if there had been lock repair approved during the 1997 session. Mr. Ghiggeri advised several doors in housing units at NNCC had been replaced. He explained unit 7 was the Lovelock prototype unit that had been funded by the 1989 session. In addition to problems with the door locks in that unit, there had been problems with the control panel. The manufacturer of that control panel had since gone out of business.

Mr. Ghiggeri explained the significant change in this budget was the reduction in utility items as had been discussed in the Warm Springs Correctional Center budget. The reduction was due to an attempt to segregate the costs between the two institutions. Additionally, some of the water and sewer costs were higher in the first year of the biennium and lower in the second year of the biennium due to the fact they were billed on a gallonage basis.

He explained the three correctional officers at NSP who provided for the operation of the facility above emergency capacity had been extended through the end of August 2000. That extension was related to the delayed opening of the CCSP. Mr. Ghiggeri told committee members the Regional Warden reclassification had been deleted at the direction of the subcommittee.

Mr. Ghiggeri told committee members the only adjustment worthy of note in this budget account was the delay in the transfer of the positions in in-take and bakery to the CCSP from May 2000 to August 2000 due to the delay in the opening of that institution. That delay resulted in increased costs in this budget account and savings in the CCSP budget account.

Mr. Ghiggeri explained the significant change in this budget account was the addition of approximately $570,000 in the first year of the biennium and $582,000 in the second year of the biennium to fund a 5 percent pay increase for all custody officers at the facility to aid in the recruitment and retention of employees. He advised the pay increase had been recommended by the Governor in Budget Amendment #2. Additionally, the "regional warden" reclassification had been deleted.

Mr. Ghiggeri advised committee members the utility cost for the operation of the sewage aerators that had been funded in a 1995 capital improvement project for $117,000, were estimated to cost approximately $35,000 per year to operate. He said NDOP should be encouraged to monitor the power usage of the aerators and report that information back to the Fiscal Analysis Division of the Legislative Counsel Bureau on either an annual or quarterly basis.

Mr. Ghiggeri advised committee members the only adjustments that had been made by staff related to the delay in the opening of the facility. He said there were a total of 337 custody and maintenance positions that had been recommended in The Executive Budget. 142 of those positions were from the Southern Nevada Correctional Center (SNCC), 5 from the Southern Desert Correctional Center (SDCC), and 190 new positions had been recommended to operate the facility.

The Chair asked if the employees of CCSN lived in Jean, Nevada, would they be entitled to travel pay. Mr. Ghiggeri advised employees of CCSN, SDCC, Jean Conservation Camp, and Indian Springs Conservation Camp all received $6 per day remote area differential (RAD) pay.

Mr. Ghiggeri told committee members Budget Amendment #114 had been provided on April 28, 1999, and requested the positions that had been deleted from this budget account be added back at a cost of $260,248 in FY 2000 and $42,114 in FY 2001. Those positions were warden, administrative services officer, storekeeper, facility supervisor, and management assistant II. He said The Executive Budget originally deleted those positions based on the premise the existing warden and related staff would transfer from SNCC.

Mr. Ghiggeri told committee members the most significant adjustment to this budget account was the addition of $437,000 in FY 2000 and approximately $451,000 in FY 2001 to provide a 5 percent salary differential to all custody officers at the facility. He said one of the Governor’s budget revisions had recommended a $6 per day remote area differential (RAD) pay for all employees. At one of its last meetings the subcommittee agreed to provide RAD pay for custody officers only to include correctional officers, sergeant, lieutenant, associate warden of operations, and the warden.

Mr. Ghiggeri told committee members there were no notable adjustments other than the conversion of the facility from male to female effective
September 1, 2000.

Mr. Ghiggeri advised committee members Silver Springs Conservation Camp was budgeted to operate above emergency capacity similar to the level recommended in The Executive Budget until September 2000. He said the expansion to 48 beds was not being recommended based on the reduction in the inmate population projections. Similarly, the additional utility costs in the second year of the biennium had been deleted.

Mr. Ghiggeri told committee members this budget account contained reprojections of the profits of operation based on the activity level and the profits in FY 99. The recommendation to increase the markups in the stores from 24 percent above cost to 28 percent above cost in FY 2000 and to
32 percent above cost in FY 2001 was continued. He said it was estimated additional revenue generated from those increased markups would be approximately $387,000 in FY 2000 and $859,000 in FY 2001.

The Governor’s recommendation to transfer all positions and costs not related to the operation of the inmate stores to the inmate welfare account was also continued.

Mr. Ghiggeri advised committee members this budget account operated to secure items for inmates such as recreational supplies, satellite TV equipment, law libraries, literacy programs, and other items that would benefit all inmates. As had been noted in the Offenders’ Store Fund budget account, the cost of personnel and other items not related to the inmate store had been transferred to this budget account. Additionally, Mr. Ghiggeri said the subcommittee should note that recent correspondence from NDOP indicated this budget account anticipated repayment to the General Fund of costs for medical care for prior fiscal years in the amount of $398,000 per year in each year of the
1999-2001 biennium. He pointed out those costs were recent estimates that could be adjusted based on further review.

Mr. Ghiggeri told committee members staff was recommending the costs to operate the various law libraries be returned to individual categories to facilitate tracking of operational costs. He pointed out the costs of operating the law libraries at various facilities differed.

The Chair recognized Senator Neal who questioned the duplication of several categories. Mr. Ghiggeri provided the following clarification:

• Category 15 corresponded to SNCC;
• Category 16 corresponded to WSCC;
• Category 17 corresponded to NNCC;
• Category 18 corresponded to NSP;
• Category 38 corresponded to the Inmate Law Library account;
• Category 39 corresponded to the Wells Conservation Camp;
• Category 49 corresponded to the Silver Springs Conservation Camp;
• Category 51 corresponded to the Ely State Prison; and
• Category 59 corresponded to the Lovelock State Prison.

Mr. Ghiggeri said staff was recommending that inmate labor costs for those inmates who worked in the law libraries also be funded from this budget account rather than the General Fund.

Senator Neal then asked for clarification regarding Decision Unit M-200, category 15. Mr. Ghiggeri explained that category provided for the transfer of the law library operation from SNCC to CCSP.

Mr. Ghiggeri requested permission of the subcommittee to adjust several of the NDOP budgets that had previously been closed regarding the inmate labor portion of the law libraries cost and also some telephone costs for operation of the inmate store fund. He said staff had attempted, where possible, to fund those activities from non-General Fund sources.

Mr. Ghiggeri told committee members the only staff adjustments to this budget account had been technical in nature. He explained Decision Unit M-200 reflected an increase in anticipated revenue based upon funding in the Department of Motor Vehicles and Public Safety budget account for population growth for sales of license plates. Staff added approximately $496,000 in the second year of the biennium in Decision Unit E-175 based on anticipated revenue from the re-issuance of all license plates.

Based on staff’s estimates, the Prison Industry program would receive $.50 per license plate on re-issued license plates. That revenue would be split between
FY 2001 and FY 2002. Staff was recommending that additional revenue be accounted for separately and set in a separate reserve.

Mr. Ghiggeri pointed out NDOP had anticipated significant increases in profits in this budget. Sales were anticipated to increase from $3.4 million in FY 98 to approximately $4.8 million in FY 2000 and $5.7 million in FY 2001.

The Chair recognized Mr. Marvel who said he hoped the motion to close this budget would include the development of a reserve license plate fund.
Mr. Marvel commented the anticipated increase in profits seemed optimistic. The Chair asked for a report from NDOP explaining how the increased profit figures were derived.

The Chair recognized Senator Jacobsen who applauded Assemblyman Marvel’s participation as chairman of the Prison Industry Committee and felt that committee should be retained for oversight purposes.

The Chair recognized Ms. Chowning who asked for reassurance regarding NDOP’s book telemarketing program and questioned payments made with credit cards. As she recalled, sales were only made to commercial clients. Mr. Bayer assured committee members that inmates had no access to credit card numbers.

Mr. Ghiggeri told committee members the only adjustments staff was recommending was to the reserve account to "line up" the repayments to the General Fund. Also included in this budget account were DoIT assessments and statewide cost allocation adjustments.

Mr. Ghiggeri advised committee members the only adjustments staff had made to this budget account were technical in nature.

The Chair recaptured the following letters of intent to accompany the motion to close these budgets:

• That NDOP create an employment contract for new hires that would include a 1-week rotation factor. A voluntary program could be set up for current employees.

• That NDOP develop an alternative scheduling program with employees’ input to review the 12-hour day.

• Regarding sole-source funding, that a heavy penalty be assessed for work not completed by identified deadlines. SPWB and NDOP to work out the language for that penalty.

• That NDOP develop an intergovernmental agreement between themselves and the Department of Parole and Probation to develop a program for post-approval pre-release, i.e., halfway houses, transitional housing, restitution, etc.

• That NDOP ensure CMS is being billed for its placements outside of Ely, tracking that billing, and ensuring inflation factors are included in those billings.

• That NDOP track prison medical costs and plan and report on a quarterly basis to the Interim Finance Committee.

• That the Appropriations Act include language stating the privatization of NDOP’s medical care would not go forward.

Addressing committee members, the Chair said she would entertain a motion to close the above-listed budget accounts as staff had recommended and include the seven letters of intent as listed above.

• DIRECTOR’S OFFICE, BUDGET PAGE PRISONS-1
• PRISON MEDICAL CARE, BUDGET PAGE PRISONS-11
• SOUTHERN NEVADA CORRECTIONAL CENTER, BUDGET PAGE PRISONS-22
• WARM SPRINGS CORRECTIONAL CENTER, BUDGET PAGE PRISONS-27
• SOUTHERN NEVADA WOMEN’S CORRECTIONAL FACILITY, BUDGET PAGE PRISONS-31
• NORTHERN NEVADA CORRECTIONAL CENTER, BUDGET PAGE PRISONS-34
• NEVADA STATE PRISON, BUDGET PAGE PRISONS-39
• SOUTHERN DESERT CORRECTIONAL CENTER, BUDGET PAGE PRISONS-44
• ELY STATE PRISON, BUDGET PAGE PRISONS-50
• COLD CREEK STATE PRISON, BUDGET PAGE PRISONS-54
• LOVELOCK CORRECTIONAL CENTER, BUDGET PAGE
  PRISONS-59
• JEAN CONSERVATION CAMP, BUDGET PAGE PRISONS-95
• SILVER SPRINGS CONSERVATION CAMP, BUDGET PAGE PRISONS-99
• OFFENDERS’ STORE FUND, BUDGET PAGE PRISONS-111
• INMATE WELFARE ACCOUNT, BUDGET PAGE PRISONS-118
• PRISON INDUSTRY, BUDGET PAGE PRISONS-126
• PRISON DAIRY, BUDGET PAGE PRISONS-137
• PRISON INDUSTRIES CAPITAL PROJECT, BUDGET PAGE PRISONS-141

The Chair commended Mr. Ghiggeri on his presentation of the prison budgets. The Chair told committee members there was an approximate General Fund cost increase of $65,000 in FY 2000, but an approximate General Fund savings of
$1.7 million in FY 2001.

The Chair told committee members she was working with the Governor’s staff and others regarding a possible piece of legislation that would deal with the drug court and the establishment of diversion programs. She said that legislation may include drug court diversion dollars, the possibility of a planning grant for rural judges to establish drug courts, and the elimination of the sentencing commission.

The Chair said additional issues still under consideration included:

• The requirement of statutory changes regarding the leasing of the Jean facility.

• The decriminalization of marijuana.

• The possibility of a 120-day release program.

The Chair recognized Mrs. Chowning who stated the drug court provided excellent results and a recidivism rate of 20 percent. She said the acupuncture, counseling, and follow-through had been very successful.

The Chair recognized Senator Jacobsen who told committee members he had a piece of legislation pending that would create a review committee comprised of three Assemblymen, three Senators, Mark Stevens and Bob Guernsey from the Fiscal Analysis Division of the Legislative Counsel Bureau, and one representative from the budget office to tour the various NDOP facilities.

There being no further business, the meeting was adjourned at 8:50 a.m.

RESPECTFULLY SUBMITTED:

Debbie Zuspan,

Committee Secretary

APPROVED BY:

Assemblywoman Chris Giunchigliani, Chairman

DATE:

Senator Lawrence Jacobsen, Chairman

DAT _______________________________________