The Joint Subcommittee on Human Resources/K-12 was called to order by Chairman Raymond D. Rawson, at 8:00 a.m., on Wednesday, February 24, 1999, in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SENATE COMMITTEE MEMBERS PRESENT:

Senator Raymond D. Rawson, Chairman

Senator Bob Coffin

Senator Bernice Mathews

Senator William J. Raggio

Ms. Jan Evans, Chairman

Mr. Joseph E. Dini, Jr.

Mr. David E. Goldwater

Mr. Lynn C. Hettrick

Mr. David R. Parks

STAFF MEMBERS PRESENT:

Steve Abba, Program Analyst

Johnnie L. Willis, Committee Secretary

OTHERS PRESENT:

Jon L. Sasser, Lobbyist, Attorney at Law, Nevada Legal Services

May Shelton, Lobbyist, Director of Social Services, Washoe County

Senator Rawson opened the meeting with an overview from Myla C. Florence, Administratrator, Welfare Division, Department of Human Resources, on the Welfare Division.

Welfare Division – Overview

Ms. Florence opened her testimony by mentioning Nevada has received national attention for several of the programs that have been implemented since the last legislative session. She said these accomplishments would be pointed out to the subcommittee as they come up in the review of the budgets.

Ms. Florence said the Welfare Division has been visited by Columbia University, American Public Human Services Association, Mid-America Consulting, and Maximus. She noted the division has made favorable impressions on these agencies concerning the direction Nevada is heading with welfare reform. Ms. Florence said Nevada is still in the beginning stages of welfare reform. She said that in two years she would very much like to report substantial progress in welfare reform; however, progress will depend on how the division adapts to the program. Ms. Florence said it will also depend on how well the division is able to utilize the flexibility the Governor and the Legislature have provided to meet the requirements of some very challenging issues. She stated the division is keeping a close eye on the development of welfare reform and is trying to use the flexibility provided.

Ms. Florence directed the subcommittee’s attention to the report "Nevada State Welfare Division: Performance Indicators" (Exhibit C. Original is on file in the Research Library.) and noted the Welfare Division does far more tracking than is reflected in the budget documents. She said the budget documents primarily reflect outcome indicators, but the division covers a number of process and input indicators. Ms. Florence said that in the joint meeting of the money committees (meeting of the Budget Subcommittee of the Legislative Commission on January 20, 1999) the Welfare Division provided a budget presentation document which showed the highlights of the proposed budgets and included charts and graphs that outlined what the division is accomplishing.

HR, Welfare Administration – Budget Page WELFARE-1 (Volume 2)

Budget Account 101-3228

Ms. Florence said the division received legislative approval in the last session to separate the Welfare Field Services budget from the Welfare Administration budget. She said that as a result this budget provides for the administrative components of the office, which include investigations and recovery staff, fiscal staff, program specialist staff, and automated systems projects. This budget has funding for 105 full-time positions. Ms. Florence indicated most of the positions are located in the Carson City office, although a few are stationed in the Las Vegas offices.

Ms. Florence continued her presentation with an explanation of the performance indicators for the administrative unit of the Welfare Division. She said the Welfare Division has exceeded the projected 1998 goal of 96 percent accuracy for Temporary Assistance to Needy Families’ (TANF) "case integrity." She stated this is largely due to the generous "disregard policy" the state uses to help remove some of the budgeting errors that could occur. Ms. Florence noted this policy has had the dual effect of providing work incentives for clients and improving the division’s accuracy rate. However, she said the Food Stamp program has more cases with earnings than it had before, resulting in more error-prone cases.

Ms. Florence explained that errors creep into the indicators because of the ever-changing requirements for eligibility for noncitizens, and able-bodied adults without dependent children (ABAWDs). She noted these continual changes have created confusion for the eligibility workers and have made it difficult for them to react to the changes right away. Ms. Florence stated that due to the division’s "reinvestment efforts," however, the estimated accuracy rate for Fiscal Year (FY) 1998 is 91.2 percent. She said the division has begun to improve its accuracy rate and believes it will be well within national tolerance estimates for 1999. She noted the national tolerance estimates are well below the 91.2 percent rate the division achieved for 1998.

Ms. Florence said the division has exceeded its projected accuracy rate in Medicaid quality control. She said Medicaid quality control has been an area where the division has "met the target."

Ms. Florence noted the results from the Medicaid Estate Recovery Program have also exceeded the projected recovery of $570,000 in 1998. She stated the projected recovery amount is attributable to cases that have been identified as possible recovery cases. She said actions have been taken towards recovery. Ms. Florence said the division expects the recovery program to remain at current levels because it is not proposing any new staff for the biennium.

Ms. Florence said that in 1998 the number of investigations was below the projected number. She said this was due to staff being assigned to collect "disaggregated data."

Ms. Florence reiterated the base budget for this unit provides for 105 positions. She said there is a 3.45 percent vacancy savings rate applied to the salary category. She explained the Nevada Operation of Multiple Automated Data Systems (NOMADS) has been moved from the base budget to a separate module, except for recurring fixed costs.

Ms. Florence stated this module provides funding for the addition of three positions needed to meet the increased demand of caseload dynamics, and their associated costs. She said the division is requesting a Social Welfare Program Specialist, a Quality Control Specialist I, and a Computer Network Technician I, which will lower the equipment-to-support personnel ratio from a 257:1 ratio to a 221:1 ratio. Ms. Florence said the Gartner Group (a consulting firm that researches and analyzes Year 2000 computer conversion problems) recommends a 75:1 ratio, which places the division well above the recommended ratio.

Senator Rawson asked whether the division is required to maintain vacancy savings. Ms. Florence answered she believes the 3.5 percent rate was based on historical data. She said all agencies are required to achieve their targeted vacancy savings goals. She commented the division felt this was a reasonable target. The senator asked how many positions the ratio actually represents. Ms. Florence replied it represents 105 positions.

Senator Rawson asked Ms. Florence to explain more fully the need for the Social Welfare Program Specialist. Ms. Florence replied the position is primarily for constituent inquiries and customer service. She said this position will also assist with program reviews, policy development, and program interpretations for field workers. She explained the division would like to use this position to centralize client inquiries that historically have been directed to many different staff members. Ms. Florence said the division believes it can provide better client service and better documentation of "trend" areas that may be important in programmatic determina-tions or considerations.

Senator Rawson asked whether the Health Resources and Cost Review is in this budget or in a different budget. Ms. Florence answered the Health Resources and Cost Review is in the Medicaid budget.

Senator Rawson asked whether there was an increased demand for quality control. Ms. Florence responded yes. She noted the division is focused on program integrity. She explained the quality control unit for the division is about 50^th in the nation for staffing-to-caseload ratios. Senator Rawson asked how well the unit’s quality control is performing. Ms. Florence replied the unit’s quality control is exceptional. She said the federal government has reviewed the division’s evaluation of the unit.

Senator Rawson noted three computer network technician positions were granted the division last session to be located in Las Vegas and Reno and he wondered whether these positions had been filled and where the positions are located. Ms. Florence answered yes. She said the positions have been filled and are located in Las Vegas and Reno. She stated she believes the division has two vacancies at present and is in the process of recruiting to fill them. She explained that in consideration of the hiring freeze, the division has received permission from the budget office to fill these positions.

Ms. Florence said the demands on the computer network technicians have been overwhelming. She noted there are often client-server problems, application training, or security issues to be handled in addition to the upkeep of the equipment. She reiterated the division is well beyond the recommended equipment-to-personnel ratio.

Senator Rawson said he understood the IBM contract is nearing its completion and asked Ms. Florence to update the subcommittee on how the Welfare Division plans to handle the vacancies the completion of the contract will leave. He asked whether the division will be renewing the IBM contract or is making other arrangements. He also asked whether the Welfare Division will be able to meet the September 30 implementation date. Ms. Florence responded she would like to move on to that module.

Ms. Florence said the division is still striving for a September 30 implementation date, but if the federal government requires it to have 100 percent of its child support cases entered by that date she does not believe the division will be able to do so. She said the division is continuing to explore what alternatives it has in case conversion.

Ms. Florence said the budget makes provision for a continuation of contract services with DoIT (Department of Information Technology) staff and master services agreement (MSA) staff. She said the division would like to keep the contract services as flexible as possible for obtaining state staff at current salary rates.

Ms. Florence explained the current budget may be impacted by the funding study being performed by the Department of Information and Technology.

She said the division has had discussions with IBM regarding transition issues. Ms. Florence stated IBM submitted a draft transition plan to the division. However, the budget would provide funds for obtaining needed skilled personnel through the first year of the biennium, and in the second year of the biennium the division would be completely transitioned with full DoIT and MSA support.

Senator Rawson asked how the division plans to utilize the 20 IBM contract staff from now through September 30, and whether the division is planning to accelerate the program with IBM. He said the subcommittee was not satisfied to hear the division probably would not make the September 30 implementation date and asked whether there is a way to accomplish this goal. Ms. Florence replied the division is evaluating ways to accomplish this goal at present. Over 2,000 eligibility cases have been entered into the system, and 100 child support cases have also been entered.

Senator Rawson asked where the cases are located. Ms. Florence responded the child support cases are in Douglas County, Washoe County, and all Storey County. (All of Storey County’s cases are among those entered into the system.) Senator Rawson asked whether the Storey County district attorney "was pleased." Ms. Florence responded the district attorney does not administer the cases in Storey County.

Senator Rawson stated a few of the district attorneys had approached him concerning their dissatisfaction with the data received from NOMADS. Ms. Florence responded the division has held discussions with the district attorneys of Douglas, Clark, and Washoe Counties. She said the difficulty with a statewide system like NOMADS is that it does not provide the flexibility a county-operated system gives. However, she said, because of the federal mandate this system must be implemented. Ms. Florence said District Attorney Richard Gammick from Washoe County, Assistant District Attorney Michael D. Davidson from Clark County, and District Attorney Scott Doyle from Douglas County have participated on a statewide steering committee which has been discussing these issues. She said the district attorneys recognize that the 66 percent federal funding the counties receive to operate their programs is contingent on the NOMADS program being fully implemented.

Ms. Florence explained that under the current plan, March 18 is the next major milestone date, which is the date the next delivery of program code is due. The division plans to test the program code from March through June. Ms. Florence noted that if the program code works as it is supposed to, then the division can look for ways to shorten the testing period. She said if the testing period could be shortened then the division would have a longer case-conversion period prior to September 30, 1999. Ms. Florence said one of the alternatives the division is looking at for case conversion involves potential "tag teams." These teams would be from the administrative staff and would go to an assigned area and convert the caseload information as quickly as possible.

Ms. Florence pointed out there is a problem with a worker using two systems simultaneously. She said the users are able to handle NOMADS easily as the system provides eligibility verification or employment verification by automated interfaces rather than by the worker having to send a written document and wait for its return. However, Ms. Florence said, since the system is doing so many search verifications it delivers a large amount of alerts to the worker. She said that consequently the worker is using a major amount of his or her day to handle the alerts from NOMADS. She explained this results in the worker having trouble finding time to coordinate the use of the old legacy system for those cases not yet included in NOMADS. Ms. Florence asserted the division does not have all the answers on how to meet those challenges. She commented the division is continually evaluating what opportunities for inputting cases it may have. Ms. Florence said the division is examining the criteria it uses for closing cases that have had no activity, so the volume of cases needing to be converted will be reduced.

Senator Rawson asked how heavy the penalties will be if the department does not meet the deadline. Ms. Florence replied the penalty in the first year was $411,000, in the second year it will be $1.2 million, and in Federal Fiscal Year (FFY) 2000 it will be $3.6 million. She said that for any year the division comes into compliance the penalty will be reduced by 90 percent. She explained that in 1999 this would reduce the penalty to $124,000, and in 2000, to $360,000. Senator Rawson asked whether the funds should come out of the Welfare Division’s budget if the division does not make the target date. Ms. Florence responded that as she has indicated in every forum, the division intends to pursue IBM for any penalty imposed. She emphasized it is her intent to keep this issue out of the Office of the Attorney General; nevertheless, attorneys may end up arguing the issue. She said the allocation to the State of Nevada for the Department of Human Resources would still be reduced if the target date is not met, even though the issue ends up being argued by attorneys.

Senator Rawson said the Welfare Division might be hit hard by such a large penalty, because with the present budget conditions the state could not make up the deficit from other agencies. He stated that what is a difficult job now may become nearly impossible if the penalties are imposed. He remarked the subcommittee understands that Ms. Florence needs to feel she will not be sanctioned; however, the subcommittee also knows the division needs to ask for enough funds to get the program up and running. Senator Rawson said the attitude of the Legislature is that Ms. Florence should tell the legislators what is needed, because the Legislature does not want these sanctions to be imposed. Ms. Florence stated she recognized the support of the Legislature, and throughout all the Welfare Division’s assessments the division will try to solve the problem within the existing budgets. Senator Rawson stated that to obtain recovery from IBM the division should have the best deputy attorney general the state has to work on it right now. He said things are not going to change in the next 6 months. Ms. Florence said the division might need to ask for an adjustment because of the penalties since they affect the child support budget.

Senator Rawson said the IBM contract is ending and asked how the division is going to handle the problems. He asked, "Is the division going to negotiate with IBM or absorb the costs?" Ms. Florence responded the division has had some discussions with IBM about transitioning issues, but the division is not in "hard negotiations" with IBM. Senator Rawson responded, "It is time." Ms. Florence said she understands.

Senator Rawson said the U.S. Department of Health and Human Services is withholding funds now and asked whether Ms. Florence has any idea when the feds will respond to the division’s corrective action plan. Ms. Florence answered the federal representatives have indicated they would like to meet with the division about the revised advanced planning document. She said the planning document was submitted January 29, 1999. She mentioned she had indicated to the federal representatives the need for emergency funding. Ms. Florence said the federal representatives replied they hope to expedite the review of the advanced planning document update so they can release funding at the time of the review. Senator Rawson asked whether July is the target date. Ms. Florence asserted the division is striving for March. She said the division believes the federal government owes the state $1.2 million in addition to what it has withheld. She stated there is a reconciliation process that is going on between the Welfare Division staff and the federal government staff. She explained the federal agency has had a number of staff turnovers, which causes reservations about its interpretation and documentation on this issue.

Senator Rawson asked whether the state has its congressional delegation involved in this issue. Ms. Florence responded, "Not at this time, although, the delegation has been involved over the years."

Ms. Evans asked whether the division is likely to experience a cash flow problem in child support enforcement. Ms. Florence responded the division is currently experiencing a cash flow problem.

Ms. Evans, referring to the situation with the district attorneys, asked whether the attorneys are sending people to the Welfare Division for training or the division is sending people to the attorneys. Ms. Florence responded the district attorney’s staff designates people to take classes as they are scheduled. She noted the division has also conducted flexible training for agencies that have unique training needs. Ms. Florence stated the division is trying to be responsive to the district attorneys’ needs and to accommodate them with the resources the division has while still moving forward with NOMADS.

Ms. Evans inquired about the response time from the mainframe system and asked what DoIT is doing to handle this problem. Ms. Florence suggested the question could be better answered by Marlene Lockard (director of DoIT). She said she is aware of the problem of delayed response from the mainframe. She said she has been told that all the other applications are being moved from the drive where NOMADS resides, to other drives. Ms. Evans stated it must be a frustrating situation for the counties to be waiting for a response from the system. Ms. Florence said some of the earlier response problems have been resolved. She said the system is "looping" and will not return needed data for 4 to 6 hours, and until those problems are identified they cannot be resolved. Ms. Evans said the subcommittee will follow up with Marlene Lockard on this issue.

Senator Rawson told Ms. Florence that the subcommittee needs to know all of the contractor specifics and that staff will follow up with the division to obtain the needed information. He said he understands the division is just now negotiating or discussing these issues with IBM, but the Senate Committee on Finance and the Assembly Committee on Ways and Mean need to know the specifics and the methodology used to come up with the estimates. He stated the committees need this information before closing the budgets. Ms. Florence pointed out the Governor is still evaluating the options. Senator Rawson said, "Yes, the Governor has the right to do that, but the clock is ticking on the Legislature and the Legislature disposes; the Governor proposes, the Legislature disposes."

Ms. Florence said this module provides funding for the addition of two full-time positions and their associated cost needed to meet the federally mandated disaggregated data reporting requirements.

Ms. Florence explained the federal government uses the disaggregated data to report state performance concerning work participation rates. She said this data will also be used for evaluating high performance bonuses and will be used to evaluate additional penalties if the data is not reported timely and accurately. Ms. Florence said this issue has been a real struggle for the division. She stated that during the early initiation of this program there were data transmission and data interpretation problems between the division’s staff and the federal government’s staff. She said the division is still reconciling 1998 data that is due to be submitted February 26, 1999.

Ms. Florence further testified the division has been using field staff and central office staff to provide the requested data, and to validate the federal reports and "turn around documents." She said that having gone through this process the division believes strongly the two positions requested are essential to protect Nevada’s interests concerning how the requested data is used. Ms. Florence said the requested positions would also free the staff used for this project to do their regularly assigned work. She said the request for disaggregated data from the federal government is expected to expand by about three times the volume if the existing regulations are imposed. She stated the Welfare Division staff is still arguing some points of the regulations because of the tremendous amount of personnel hours required to obtain the requested data.

Ms. Evans commented that it sounds like a nightmare and asked whether the division needs personnel with more of a statistical background, rather than a Social Welfare Program Specialist and a Program Assistant III. Ms. Florence responded the statistical staff Welfare already has can deal with information that is coordinated and organized by the Social Welfare Program Specialist and input by the Program Assistant III. She said the program specialist would need to have the specific program information to interpret what are countable activities concerning work rates, to determine the different statistics for two-parent families compared to one-parent families, and to interpret the other parameters the division must use. Ms. Florence said the division believes the program knowledge is more essential to the program specialist than is statistical knowledge. She reiterated other statistical staff would support the position.

Mr. Hettrick, referencing previous comments, asked how much cash flow is involved and where the division is getting the funds. Robert Anderson, Deputy Administrator, Administrative Services Officer, Welfare Division, Department of Human Resources, responded the Welfare Division has approached the cash flow problem in "a three-tiered kind of attack." He said the first approach was to isolate expenditures that could be held until April 1, 1999, which is the expected date of the next grant award. He noted some vendors are willing to wait for this date to receive payment for services. Mr. Anderson said the second approach was to bring in TANF funds to cover the disregard and pass-on payments, which totaled about $1.5 million. He said the third approach was to use the IRS (Internal Revenue Service) intercepts that will be coming in during the next several months. Mr. Anderson said the division does have a cash flow problem but is capable of managing it until April 1, 1999, when the grant award should be received.

Mr. Hettrick asked the total dollar amount of the grant award. Mr. Anderson replied the division is hoping to "catch up" about $6 million, so the total fourth-quarter grant award for the state fiscal year would be about $14 million. Mr. Hettrick asked whether the withhold was $6 million. Mr. Anderson replied the withhold is on the NOMADS portion of the Child Support Enforcement Title IV-D (IV-D) expenditures, which is being covered in the Welfare Administration budget with general funds. He said the $6 million is for the program and administrative costs of the child support budget.

Ms. Florence explained that under U.S. Senate Bill 1150, benefits are restored for about 2,254 legal immigrants. She said module M-583 provides funds to accommodate this change.

Ms. Florence said the module provides funds to implement an electronic benefits transfer (EBT) system for food stamps via commercial debit card mandated by the Food Stamp Act of 1977, as amended through Public Law 104-193, August 22, 1996. She said this law is to be fully in force by October 1, 2002. Ms. Florence said that during the last session the division was awarded a position to begin the groundwork for this project. She said the position was filled and the division has contracted with Phoenix Planning to further assess the state’s cost effectiveness in terms of meeting the federal requirement for an EBT system. She stated, "The second year of the biennium the transaction cost nets out the beginning of a phase-in approach to EBT from transaction costs in the base budget under the current system with Continental Currency Services, Inc."

Ms. Evans asked how the transaction costs "break out" in the electronic system versus cost per transaction versus the existing system. Ms. Florence said the estimated transaction cost under EBT would be $1.65 per month for each case. She said that will probably change, based upon how the contract is negotiated with the EBT vendor. She said the vendors have a menu of services such as staff training or client training and the means by which the division is going to issue the cards. Ms. Florence said all of these items would have an impact on the end contract. She said the current Continental Currency Services, Inc. cost averages about $0.78 per transaction, and whether or not an EBT is cost-effective in Nevada will be an issue. She noted Nevada has a very low transaction cost with the current vendor. Ms. Florence explained the federal government "views" the cost-effectiveness by including its cost. She stated the federal government is requiring all the states to go to an EBT system. Ms. Florence said the advantage Nevada has is that the system has been initiated in other states, and some of the problems have already been documented and are in the process of being solved where possible.

Ms. Evans said the Legislature anticipated the electronic system would be substantially less than a paper-intensive system. She asked about the $270,000 for a quality assurance contractor at 1,800 hours, $150 an hour, and wondered how the cost estimate was developed. She stated that DoIT services for contract support and contract monitoring amount to about half that price. Ms. Florence responded the division has changed its proposed direction since the budget was formulated. She said the division would now like to use the funds to obtain a DoIT/MSA for developing the interfaces and for either DoIT services or an MSA for quality assurance. She said the estimated hours were calculated on other states’ experience with developing the EBT systems. She said the two primary issues are development of the interfaces and development of some level of quality assurance, but not the full 1,800 hours originally estimated.

Ms. Evans asked whether it is possible to request a waiver if the state is not able to lower the transaction costs. Ms. Florence responded, "Yes, there is [such] a provision." Ms. Evans asked whether other states have requested waivers. Ms. Florence replied no one has requested a waiver. She said the division received correspondence from the U.S. Department of Agriculture (USDA) saying that since no state has requested a waiver, the USDA assumes all states will have an operating EBT by the October 1, 2002. Ms. Florence said the division replied that Nevada wants to preserve its right to request a waiver. She said this is because the division has not completed the analysis of whether or not it is in the state’s best interest to pursue the EBT issue. Ms. Evans wondered whether it would be more difficult for a small state like Nevada to achieve cost savings than a larger state could because of the difference in the volume of transactions. Ms. Florence said the reason Nevada joined the Western States Alliance was for the menu-pricing structure, which gives Nevada a chance at savings. She said contractors are looking at declining caseloads, which is making the market fluctuate drastically.

Ms. Florence said some states are also looking at EBTs for TANF benefits and possibly for child support. She reiterated that volume is the key here for negotiating with vendors.

Ms. Florence said this module provides funds for replacement of 126 computers that are not Year 2000-compliant. She said the computers are old 486s and it would not be cost-effective to try to update them.

Ms. Florence stated this module also provides for the replacement of computers, along with data drops, software licensing and agreements, and miscellaneous small equipment.

Senator Rawson asked whether the division is asking for a new mainframe. Ms. Florence responded, "I hope not."

Ms. Florence said this module provides funding for a file server for the Desert Inn office that was not included in the requests of last session. She said it also provides funds for networking equipment and additional equipment for the Henderson office.

Ms. Florence explained six positions were mistakenly left in the Welfare Field Services budget last session when the division was reorganized. She said this module requests the transfer of the six positions and their associated operating costs to the Welfare Administration budget.

Ms. Florence said the Governor’s recommendation for Welfare Administration is about $26.2 million in the first year of the biennium and $20.9 million in the second year.

Senator Rawson asked whether there is any deviation from the Governor’s recommendation in this budget. Ms. Florence said the deviation from the Governor’s budget is primarily the annualizing of personnel from the 1995 and the onetime expenditures for equipment. She said the annualizing of personnel and the expenditure for equipment costs total about $5 million in the first year of transitioning of NOMADS.

HR, Welfare Field Services – Budget Page WELFARE-11 (Volume 2)

Budget Account 101-3233

Ms. Florence said the Welfare Field Services budget is very much like the Welfare Administration budget. She said this budget provides funds for 22 district offices.

Ms. Florence stated the performance indicators relate to the number of TANF applications processed. She said the division believes there will be a significant drop in cases for the years 2000 and 2001. She noted the application level has remained the same although there has been a drop in caseload. Ms. Florence said the division receives approximately 2,000 applications a month for TANF. She reiterated that although the number of applications is about the same, the division believes the number of applications that are processed and approved will decline. Ms. Florence said the average case-processing time exceeded expectations of 22.4 days in Fiscal Year (FY) 1998.

Ms. Florence said the drop in food stamp applications is attributable to federal rule changes. She said the average time for processing food stamp applications remains about 19 days.

Ms. Florence explained the division believes there may be a reporting problem with the fifth performance indicator. She said reapplications and normal applications might be combined and this is showing up as taking 31 days to process. She explained that the average processing time is 19 days and it does not make sense that 25 percent of the cases are taking longer than 30 days. Ms. Florence said the division is trying to reconcile these figures.

Senator Rawson asked whether Ms. Florence is aware of the state contract for security. He said the division has allowed $9.50 an hour, but the new state figures are $10 for unarmed security and $16.50 for armed security. Ms. Florence said the change is in M-371. She said the division used an estimate of $25 an hour and that figure may have to be adjusted downward.

Ms. Florence said this module provides funds for two full-time Social Work Supervisor II positions. She said the addition of these positions will reduce the supervisor-to-worker ratio from 1:16 to 1:8.

Ms. Florence explained the division is proposing a Field Supervisor Manager position to reduce the Deputy Administrator of Program and Field Operations’ extent of control over staff from 1:13 down to 1:6.

Ms. Florence said one of the recurring complaints from the district offices’ staff is that the district offices need more proactive management, direction, and guidance. She said the district staff would like to have a hands-on person to deal with reviewing the district offices’ program effectiveness. She said that in the past the division had four positions to deal with different sectors of the division, which were the Aid to Dependent Children program, the Medicaid program, the Food Stamps program, and the social services programs. Ms. Florence pointed out the division’s administrative unit cannot focus on policy development and still be responsive to the day-to-day district office needs.

HR, Welfare/TANF – Budget Page WELFARE-18 (Volume 2)

Budget Account 101-3230

Ms. Florence explained this is the budget that accounts for a majority of the TANF block grant. She said the block grant flows through several budget accounts throughout the Welfare Division. She noted the expenditures in this account are primarily for cash assistance and for contracts with nonprofit organizations providing services under the TANF program.

Ms. Florence pointed out the first performance indicator and said this one measures the number of TANF recipients per 1,000 persons in the population. She said the national statistics do not reflect what is happening in Nevada. Ms. Florence said Nevada is still the fastest-growing state in the nation and consequently a better measure of how the state compares nationally is the number of recipients per 1,000 persons in the population. She explained that Nevada is doing a good job of getting people to work and getting child support into households. Ms. Florence said the first performance indicator went from 15.2 in 1998 to 10.5 in 2001.

Senator Rawson asked whether Ms. Florence could relate those numbers to the national numbers. Ms. Florence responded the division could perform some comparisons. Senator Rawson commented that with Nevada’s growth the national figures should still be favorable because there are more jobs open. Ms. Florence offered to provide what information could be gathered.

Senator Rawson requested Ms. Florence to explain how the caseloads are projected and what is projected. Ms. Florence replied the division uses May 1998 data for the August projections and then readjusts in November, and often reprojects in March 1999. She said the division’s budget and statistics unit calculates those projections, which have been well within the 4 to 5 percent deviation margin. Ms. Florence repeated her earlier reference to the presession hearing of the Legislative Commission’s Budget Subcommittee (January 20, 1999) during which the division supplied a packet of all caseload projections and graphs through the year 2001. She said the current trends are the decline in TANF and Food Stamps, with increases in postmedical participation and other medical categories. Ms. Florence stated the overall caseload has not declined although the division shows significant declines in two caseload areas.

Senator Rawson asked whether the No. 3 performance indicator takes into account time-limit cases that are pending. Ms. Florence replied those are what the division calls its "smiley faces." The anticipated declines due to time limit are included in the indicators. She said the division is not just "cutting people off," it is moving these cases into the workforce.

Mr. Goldwater said the caseload projections are declining, but the reserve that is built into the budget does not move at all. He asked Ms. Florence whether the division has considered increasing the reserve. Ms. Florence pointed out she had spoken of investing some of those savings into supportive services. She said the division is also proposing within the Welfare/TANF budget an increase to nonneedy caretakers, persons who do not have a legal obligation to care for a grandchild or a niece or a nephew but are doing so. Ms. Florence explained that the investment of some of the caseload dollars is also appropriate.

Mr. Goldwater said he had spoken on this subject to Ms. Florence during the last session, and he did not believe she had quite answered his question. He said he realizes the Welfare Division wants to use the caseload savings dollars for the investments Ms. Florence had documented before, but he questioned whether the division should be reserving more since it is projecting less. Ms. Florence responded the recommended amount of the reserve based on the American Public Human Service Association guidelines is $21.4 million. She said she does not believe any state has reached that level, but clearly, whatever is not needed for helping people get off supportive services should be directed toward the reserve. Ms. Florence said she believes the division has issues that are in need of TANF funding. Mr. Goldwater said he understands, but the subcommittee is particularly concerned about this and if the division is in need the funding must come from the General Fund.

Senator Rawson asked whether the division has planned for a possible significant downturn in the state’s economy, which would cause a sharp rise in the number of applicants. He stated the Legislature and the division need to forestall going to the General Fund as long as possible. Ms. Florence responded she believes the concern nationally is what the states, legislatures, and agency administrators will do. She stated that since the very beginning of welfare reform the economy has been good. She said providing for the reserve is one area the division supports.

Ms. Florence said the division is also looking at whether there are other state expenditures that could be considered "maintenance of effort" to bring the state to the 100 percent matching rate. She said what is unclear to her is whether the state has to maintain the 100 percent maintenance of effort year to year in order to access the federal contingency fund, or just the year prior to the emergency need. Ms. Florence said the division is investigating whether the state can qualify other state General Fund expenditures to maintain the 100 percent maintenance of effort to access the federal contingency funds.

Senator Rawson commented he felt it important to have a plan. He noted that when he came to the Legislature in 1985 there were reserves in almost every budget category and almost every agency. He said there was a policy decision which resulted in the reduction of the agencies’ reserves. He explained that in order to cushion the state from the "spend down" of the agencies’ reserves the state has built a budget stabilization account; however, the state does not "get as much for the dollar" as it does for matched federal funds. He emphasized to Ms. Florence it is appropriate that the Welfare Division keep a plan in mind for emergency situations.

Ms. Evans asked Ms. Florence whether the agency is tracking those who leave TANF and stop collecting benefits. Ms. Florence responded there are two issues involved regarding follow-up. She said the first issue is the contract with the University of Nevada, Reno (UNR) to do a longitudinal study of people who leave welfare. She noted the university is in the final stages of planning what survey methodology will be included and how it will be analyzed. Ms. Florence said the second point is the job retention contract in the TANF budget. She said the division has contracts with Job Opportunities in Nevada (JOIN) in northern Nevada and S.T. Gregg & Associates in southern Nevada. She stated those agencies are providing case management services to people who no longer receive TANF benefits. Ms. Florence said the contract in northern Nevada began in May 1998, and the contract in southern Nevada began in December 1998. She said the data which has been researched about those who no longer receive TANF benefits reflects that 76 percent retained employment and 21 percent received a wage increase. She said the division is trying to track these individuals to determine what kind of jobs they are obtaining and what wages they are receiving.

Ms. Florence said that concerning the UNR study the division hopes to learn whether there is an impact on the child welfare system and whether there is an impact on other nonprofit organizations and counties. She said the UNR study will be a scientific, research-based study.

Ms. Evans inquired what percentage of the caseload represents those who have significant barriers to self-sufficiency. Ms. Florence said that two years ago the division estimated 16 to 18 percent; however, the division is now projecting perhaps 25 to 30 percent. She said that as the caseload declines those individuals who are harder to serve are the ones still using services. She noted these individuals need to receive significant attention in terms of the support services and training which the division provides through its programs. Ms. Florence said that to go along with the support services and training programs there is also the Welfare to Work budget, which has specifically targeted U.S. Department of Labor funds to further support the harder-to-serve population.

Ms. Evans asked whether the division has done any preliminary evaluation of the components such as victims of domestic violence problems, substance abuse problems, and others. Ms. Florence replied the division has not done any "deep" research. She explained that in the last few months a lot of the division’s time has been used to issue request for proposals (RFPs), negotiate contracts, and perform similar kinds of activities. Ms. Florence said Nevada is one of three states visited by Columbia University and the American Public Human Services Association. She said Nevada was chosen because the division has screening procedures "to look at people with problems" so that the division can try to link them with the appropriate resources, and the division has already established contracts with organizations that provide the resources. Ms. Florence noted that concerning the domestic violence question, the federal government was surprised at the number of disclosures made by individuals who may be victims of domestic violence and that the reports show domestic violence is not a barrier for these individuals’ compliance with program requirements.

Ms. Evans said she would like to have feedback from the community organizations that provide substance abuse treatment, domestic violence shelters, counseling, or other community services.

Ms. Evans noted there was a question or concern at the end of last session regarding recipients in higher education programs who would have to drop out because of the work requirement of the TANF system. The assemblywoman asked whether this issue has been reexamined. Ms. Florence replied, "Quite frequently." She said the division has been meeting with interested parties and researching how other states are handling this problem. Ms. Florence said research indicates that states may provide supportive services but that does not include paying for the education, and most do require participation in work as well. She said there are some "state only" programs. She said if an individual is in a secondary education program that may fit with a responsibility plan for self-sufficiency and does not jeopardize the work requirements, then the division can count 1 year toward the work participation requirement. She said the division is trying to address this problem on a case-by-case basis rather than by establishing a separate program.

Senator Rawson asked whether the division has any data on the new decision units E-350 and E-351 that indicate whether these programs will work effectively, or whether the units would just drain resources since the full cost will be $9.6 million.

Ms. Florence stated E-350 is the unit that provides funds for nonneedy caretakers. She said that through the Legislature the division has done a lot over the years to address the issue of income of TANF recipients who can work and have a generous earning disregard in addition to grant payment, so that the income available to those households has increased beyond the basic grant payment. She said what the department has not addressed is the 16.5 percent of the caseload who are grandparents, aunts, uncles or siblings caring for a dependent child but having no financial obligation to do so. She said these grant payments have not increased since 1992 except for the across-the-board payment. Ms. Florence noted these individuals could access the child welfare programs at a cost of double of what is proposed in unit E-350. She said the division has been asked whether there is any national information on this issue and whether the division can assure the child welfare caseload will not be impacted. She said the answer is no. No other state the division is aware of has separately addressed this population. Ms. Florence said the division believes there is an issue here that will begin to impact national caseloads and the division would like to be proactive on this issue. She said the division does not want to worry five years from now about families shuffling children to the child welfare/foster care system. She stated the division believes the grant payment to be a proper investment in these individuals who have no financial or legal obligation to care for these children.

Senator Rawson said he understands all the humane reasons for doing this, but wondered whether there are any models for evaluation. Ms. Florence said the division has not seen any examples to study.

Ms. Florence said this unit is also a new initiative where the division is proposing a $350 job retention incentive for clients who complete 6 months of continuous employment. She said the purpose of this incentive is to keep clients reporting to the Welfare Division so the division may include the statistics of those individuals who tend to no longer report to Welfare after employment. She said the statistics are needed to contribute toward qualifying the state for high-performance bonus awards.

Ms. Florence said this program was proposed and funded during the last session; however, the division was unable to implement the program to the point of being able to include it in the base budget. She explained that this inability to implement the program was primarily due to data system issues. Ms. Florence said the division believes there is still a need for the program and hopes to get the data system issues resolved before the new biennium, or at least during the next biennium.

Ms. Florence said this unit provides funding for "second chance homes" for teen parents who may reside in situations that are not appropriate. She said this unit’s funding would enable the division to provide contracts with a provider for supervised living arrangements in addition to supportive services.

Ms. Florence said the division is projecting an $8.6 million ending balance for the "rainy day fund."

HR, Welfare to Work – Budget Page WELFARE-24 (Volume 2)

Budget Account 101-3226

Ms. Florence explained this is a new program, which was authorized in the Balanced Budget Act of 1997 to complement the TANF block grant program. She said there was concern on the part of the President and Congress that the states would "cream" those easiest-to-employ people and not devote sufficient resources to families which may have a history of long-term welfare dependency or educational and family issues, or chemical dependency.

Ms. Florence said Nevada is unique in that the welfare agency is administering the Welfare to Work (WtW) block grant. She said that in other states it is usually the labor agency administering those funds. She noted the division had a federal representative visit the agency that is performing a review of Nevada’s program. Ms. Florence explained that although the program has been problematic and very slow getting started, the federal representative indicated Nevada is well ahead of other states in implementing this program. She said that what has been initiated through private industry councils is a complex process and the results are just beginning to come in.

Ms. Florence noted the proposed budget does not include funding for 2001. She said that is because there is uncertainty of federal funding, although the President’s upcoming budget provides for continuation of the program.

Ms. Florence stated the delivery of services to eligible clients has begun. She noted the federal representative indicated that because the Welfare Division does the certification for eligibility for services, Nevada has a large pool of clients already certified for the Welfare to Work program.

Ms. Florence remarked it was her understanding that other states programs have not advanced as far as Nevada’s program because of a breakdown in communication between the agencies administering the TANF program and the Welfare to Work agencies. She said the division believes spending will pick up for this program. Ms. Florence said 177 people are being serviced at present and 2,976 people have been certified for the program. She said that as a result, Nevada has a pool of people who are certified eligible to access the services of the Welfare to Work program.

Ms. Florence said the advantage of being certified for the program is that once an individual is certified he or she is certified for life. There is no time limitation on an eligible certification. Ms. Florence said even if an individual has met his or her time limit for TANF, the person may still be eligible for services from the Welfare to Work program.

Ms. Florence asserted the division was pleased the President’s budget recommended funding for the Welfare to Work program be continued. She said the division has also been advised that if there are unexpended funds from the year 2000 which could be carried forward to 2001, then the division could ask the Interim Finance Committee (IFC) and the Governor’s Office to carry it forward.

Ms. Florence said that based on information from the federal reviewer, the division might have a good chance of receiving bonus money for this program. She said the bonus would be limited to 25 percent of the total block grant, which would amount to approximately $775,000 that may be available to the state in 2001.

Ms. Florence said the division believes it has all the processes and procedures in place. She said that under the law the funding must be passed to the Private Industry Councils (PICs) to be distributed to local service grantees. She said this process is very time-consuming.

Senator Rawson asked, "Where the state does not have matched dollars for this program, do you see any other avenues of obtaining them?" Ms. Florence responded it depends on how quickly the service and expenditure levels pick up. She said the division is trying to be flexible; if there should be federal funds that could be accessed by additional matching, then the division is going to explore that opportunity. Ms. Florence stated that at the time the budget was constructed, the division did not have enough data to fully calculate this potential. She said the division believes local programs may have some matching funds that could be used to attract federal funds.

Ms. Evans, summarizing, said if the state had more matching funds then it could get more federal funds. She said there is an additional $700,000 available and the state would need $325,000 for matching funds. She asked what qualifies as an in-kind match. Ms. Florence replied the division is currently using the Claimant Employment Program (CEP) through the Employment Security Division (ESD) as an allowable in-kind match. Ms. Evans asked whether the $400,000 is the CEP funds the division is planning to use as in-kind match funds. Ms. Florence responded yes. Ms. Evans asked whether the $400,000 has been certified. Ms. Florence responded, "Not all of them." Ms. Evans asked where these funds will be used.

Robert J. Anderson, Administrative Services Officer, Welfare Division, Department of Human Resources, answered Ms. Evans’ question. He said the division is reconciling expenditures that could be certified through CEP based on matches between the division’s eligible clients and people who have been served by ESD. He said the division uses that certification to earn a 2-to-1 match of federal funds and allows the PICs to use those funds for future service provisions. He stated the division is trying to perfect the matching process and is looking at ways to determine other indirect cost factors that are included in case management for those program-eligible services. Mr. Anderson said the division is trying to determine whether there are other avenues that could be used to pick up more matching funds, which would allow the state to earn more 2-to-1 dollars.

Ms. Evans said that apparently JOIN has made good progress in northern Nevada in awarding provider service contracts. However, she said Nevada Business Services (NBS) in southern Nevada has been slow in selecting service providers. She asked what is happening in southern Nevada and said that with "the numbers" in southern Nevada the program should be accelerated there. Ms. Florence said the structure of southern Nevada is not as mature as northern Nevada’s structure. She said JOIN was able to foresee what was going to happen regarding Service Delivery Areas (SDAs) and PICs and formulated a nonprofit organization to perform work outside the Job Training Partnership Act (JTPA) even before WtW began. She said that as a result, JOIN was better prepared to deal with this new funding source than was the PIC in southern Nevada. She stated that in fact the PIC in southern Nevada has looked to JOIN in northern Nevada for the best way to organize itself and to learn what type of governing structure it needs to put in place. She said the division has been working with Mr. Brewer, who is the chairman of the Private Industry Council in southern Nevada, and other interested parties to help move things along.

Ms. Evans asked; "Is there a timetable for southern Nevada? Is the division pushing them? Is it telling them what the expectations are? And how can the division get things moving?" She also asked whether the PICs work with the workforce development boards. Ms. Florence responded the timeline for adding providers to deliver services is in the new RFP that should be responded to by March. She said there is also the 3-year availability of funds. She explained the workforce development board is made up of community members. These members may also be representatives of the PICs and may be on either the state or the local workforce development boards. Ms. Florence said this situation will be reorganized under the Workforce Investment Act.

Ms. Florence said the focus is shifting away from the old JTPA model of training only, and is moving toward collaborative community efforts for targeting labor demands in a community and providing training to meet those labor demands.

Ms. Evans said that clearly this is "the key element" for self-sufficiency. She inquired how the changes will be initiated, and whether the information would come through the Department of Employment, Training and Rehabilitation (DETR). Ms. Florence replied the "workforce investment part" would, but for WtW the Welfare Division has a collaborative relationship with DETR on this project. She said DETR’s staff and the Welfare Division’s staff join in program monitoring and data gathering. Ms. Evans stated to Ms. Florence the subcommittee would like her to contact Nevada Business Services and express the concerns of the subcommittee about the speed of their work. She further stated the subcommittee would like a report from NBS stating "where they are at in their plan, what their timetables are, and what they hope to accomplish and by when." She emphasized the subcommittee needs this information while the Legislature is in session and before the budgets are closed.

Ms. Florence next addressed the Employment and Training budget, noting it is closely related to the TANF and Welfare to Work budgets.

HR, Employment and Training – Budget Page WELFARE-41 (Volume 2)

Budget Account 101-3267

Ms. Florence said this is another budget account that includes TANF funds. She said the three major components of the Employment and Training program are the New Employees of Nevada (NEON) program, the Food Stamp Employment and Training program, and the Child Care Assistance program.

Ms. Florence said that except for the fifth indicator, the performance indicators show the agency exceeded projections. She said regarding the fifth indicator the percentage of active NEON participants was below projections, and this was due to a change in the reporting methods. She said the definition of a NEON participant is narrower than it was previously. Senator Rawson asked whether the change in the NEON participant definition is the two-parent work participation. Ms. Florence replied no. She explained it has to do with what are countable activities versus noncountable activities.

Senator Rawson noted the state did not meet its goal for two-parent participation, although he noted the penalty is very small. He asked whether the division expects the penalty to increase and whether it would influence other potential penalties the state may receive. Ms. Florence responded the division intends to appeal the U.S. Department of Health and Human Services (HHS) determination that Nevada did not meet the rate. She said that using the disaggregated data module in Welfare Administration, the division believes the information used for determining Nevada did not meet its two-parent participation goal is flawed. Ms. Florence said the division also reviewed the cases within that population and determined that some cases may have been counted which should not have been, "because of a minor child or other reasons." She said the division believes Nevada will achieve the two-parent rate with the caseload reduction factors that are included in these calculations, and intends to do so in the future as well.

Ms. Florence explained this module is a significant change for the Employment and Training budget. She said this module was intended to deal with the childcare waiting list. She noted M-200 and M-201 support each other in that both are to increase funding for childcare.

Ms. Florence said M-200 would provide services for 600 potential clients in northern Nevada and 350 potential clients in southern Nevada, and M-201 would provide services for an additional 1,550 potential clients. She said these two modules would service approximately 2,500 hundred clients; however, the waiting list contains approximately 3,873 clients. She said this leaves the agency still below the current demand level.

Senator Rawson asked whether the agency services those most in need first from the waiting list. He said his impression was that there may be some people receiving this benefit who may not be in "the most needy" category. He said he did not believe the division could end services to these people now, but a close look at the "priority" list could show there may only be 800 to 850 of them on the waiting list. Ms. Florence said the priority listing is 185 percent of need. She explained the total number on the waiting list would include people who are beyond the 185 percent of need and will not get services.

Senator Rawson asked whether the division has considered a minor copay for those who are over the 185 percent of need. Ms. Florence said there is an existing copay for individuals who are not at the bottom level where there are no services. Senator Rawson asked whether the division has considered reviewing the level of need for those clients already receiving services. Ms. Florence said the childcare statewide steering committee has been reviewing all the options with regard to identifying the highest-priority needs or whether there should be a time limit for those who are beyond 185 percent of need. She said they have not recommended any changes in these areas at this point.

Senator Rawson commented he was surprised to see what the state’s obligation is in this regard. He noted the state matches these funds very well. He said if the use of the state funds were maximized, the total spent for childcare would be $44 million. Ms. Florence said that since the program came to the Welfare Division the funding has in effect been tripled. She said also that since the time the division prepared the budget, about $2 million in additional federal funds have become accessible. About $1.2 million in matching funds would be needed to obtain the federal funds. Ms. Florence said the division is trying to assess this issue, but in her opinion the demand for childcare will always exceed the funding available.

Ms. Florence said the challenge the division has in trying to use the steering committee is providing funds for travel and to attend meetings. She said there is a module in the budget that provides additional support for the committees travel and meetings.

Senator Rawson asked whether the division has a breakdown of the ages of children receiving this support and how many are in early childhood or pre-kindergarten. He asked whether there are other programs to provide childcare for these children. He said this issue should be investigated. Ms. Florence said the division has that information and will provide it to the subcommittee.

Ms. Florence said M-202 provides for a position to assist with what has become a $19 million to $20 million program from a $5 million to $6 million program. She said the position would also work with the Children’s Cabinet in northern Nevada and the Economic Opportunity Board in southern Nevada. She stated these agencies are the contacts that coordinate the local system for childcare.

Ms. Florence said this module provides funding to meet the federal participation rate requirements for state TANF programs.

Ms. Florence said this module provides funds for the addition of a full-time Employment and Training Supervisor position and associated cost to establish the supervisor-to-worker ratio at 1:8.

Senator Rawson asked Ms. Florence to explain module E-352 before going on with this unit.

Ms. Florence said this unit provides supportive service funding outside of the current criteria for TANF recipients who are in need of vehicle repair or relocation to work sites. Senator Rawson asked whether this was specifically to support those who are going to work or who are engaged in work-related activities. Ms. Florence replied, "Correct, or for relocation to get them in an area where jobs may be available." Senator Rawson asked whether this was part of the mandatory work requirement. Ms. Florence responded, "Yes." She said this is very similar to the self-sufficiency grant used to divert people from welfare, but this would be targeted to people on welfare who have a need which TANF lacks the funding to meet. Ms. Florence said this unit request was based on field input where frontline workers perceived that, for example, a client could get off welfare if he or she could get his or her vehicle fixed or could be relocated to where there are job possibilities. She said the transportation system in Las Vegas is such that the client may not be able to get to work for a 3 p.m. shift without starting on a bus at 9 a.m. Senator Rawson asked whether the division has the staff resources to pick up this additional caseload requirement. Ms. Florence responded it is in the existing caseload but deals with the unique needs of some clients. Senator Rawson said it is expanded responsibility on the caseload. Ms. Florence replied the eligibility workers very much want to see this module funded. She said it was developed from meetings with staff concerning what the current issues are as the division moves forward in welfare reform.

Senator Rawson said the Legislature has never formulated a ratio for this unit; the Welfare Division may have but the Legislature has not. He said the subcommittee would like to know whether the division is going to have a reorganization, where the supervisors are located now, where they will be, what difference this change will make, and how important it is. Ms. Florence responded this is tied to the division’s current efforts to bring the TANF workers, employment and training workers, and supervisor into common groups. She said the division’s goal is a 1:6 ratio, but to move from 1:10 to 1:8 would greatly enhance the support. She remarked this goal was based on field input, which indicated the work is complicated and the workers need the support. Senator Rawson asked whether part of this was "due to the state’s information systems (Department of Information Technology)." Ms. Florence replied, "This is the one thing I cannot attribute to Information Systems."

Ms. Florence said this module provides funding to contract with providers of Food Stamps Employment and Training services statewide, which will include program components for the Food Stamps Able-Bodied Adults Without Dependents (ABAWD) populations as well as the non-ABAWD population. She said that due to the changes in federal requirements, the focus is on the population without children and 80 percent of the funding goes to ABAWDs; but the division’s focus is dependent children and self-sufficiency for their parents. Ms. Florence said this is why the division has moved to contracting for the ABAWDs population rather than providing the services in-house.

HR, Child Support Enforcement Program – Budget Page WELFARE-28 (Volume 2)

Budget Account 101-3238

Ms. Florence said this budget includes as a companion a new budget, account 101-3239, which will provide for the collection and distribution of all child support payments collected in the state. She said this includes cases in which people are receiving casework support under Child Support Enforcement Title IV-D or not, wherever the order is issued.

Ms. Florence explained that the major changes in the child support program outside of the state disbursement unit are for district attorneys’ offices and project increases in child support collections. She said there is a request in this unit for an increase of approximately $1.7 million for county district attorney reimbursement.

Ms. Florence explained this unit recommends funding to cover the cost of projected federal penalties for not meeting NOMADS certification requirements by October 1, 1997. She said the $52,650 was based on the optimistic view of meeting certification requirements within this year. She stated that whether or not the division will meet certification needs to be established.

Ms. Florence explained this module provides funding to establish and run the State Disbursement Unit, which was approved for the division by the Interim Finance Committee (IFC) on December 14, 1998, and which is mandated under the Social Security Act 454B. This unit also provides funding to retain the Management Analyst IV position and for all associated costs.

Senator Rawson said the subcommittee would like to know how this unit is doing, whether it is cost-effective, and whether it would cost the state a lot to run this unit. Ms. Florence responded the division has a very aggressive schedule for the implementation of the State Disbursement Unit. She said the contract RFP has been issued. Senator Rawson inquired whether this aspect is what some of the district attorneys are upset about. Ms. Florence replied no, the district attorneys’ dissatisfaction has more to do with the NOMAD systems, although this does take away some of their flexibility. Ms. Florence explained that all collections need to come into one central location and then be disbursed within 2 working days. Senator Rawson asked whether Clark County will be the collection station. Ms. Florence said the division will be using Clark County’s personnel together with state personnel. She said Clark County has 70 percent of the caseload and the facilities in place to accomplish the goals of the disbursement unit.

Ms. Florence noted a separate account was established because there will be about $100 million running through this account.

Ms. Florence explained this unit reflects the division’s potential $725,000 reduction in incentive payments resulting from the implementation of federal changes in the methodology used to determine incentive payments. She said there is a statewide cap of $2.5 million available, and then "various weights" are applied to the five areas on which the incentive payments will be calculated. Ms. Florence said that based on current county performance the projected reduction is $725,000; however, the counties are aware of the change in incentive payments and are working to improve performance.

Senator Rawson noted the state must obtain a waiver to allow the local districts to collect these payments and then distribute them out to the local units. He asked whether there are any problems with the program and whether the division has a report on it. Ms. Florence replied the program is "doing okay." Senator Rawson asked whether the division expects any problems. Ms. Florence responded there are none that she is aware of. She said the counties verbally indicated they would comply with the state’s requests.

Senator Rawson asked whether the $100 million would have a significant impact on Medicaid spending or TANF spending. Ms. Florence replied these collections will be distributed to custodial parents. Senator Rawson asked whether any of the clients would end their TANF or Medicaid need as a result of receiving regular child support payments. Ms. Florence responded yes. Senator Rawson asked whether the state expects the caseloads to drop, and whether this is reflected in the budget. Ms. Florence replied that as far as TANF goes, the division does not have the child support variable; however, the division has put more "up front" emphasis on child support as clients apply for welfare benefits. She said the reductions the division is seeing cannot be fully attributed to increased child support collections.

Senator Rawson stated that for a lot of these people the child support payment will not bring their income high enough to end welfare benefits, but it should make a difference to some. Ms. Florence said, "The objective in welfare reform is not only to pursue employment but [to] pursue child support collections." She said the division has put child support staff in the district welfare offices to conduct orientation and to explain the importance of cooperating with the child support requirements.

Senator Rawson asked whether the division has an estimate on what percentage of obligations is being collected now. Mr. Willden said that under the Child Support Enforcement section of Exhibit C, which is divided by years, the indicator "Percent Of Cases With Orders Verses Total Cases" shows that Child Support Enforcement is collecting on about 42 percent of cases with a court order.

HR, Assistance to Aged and Blind – Budget Page WELFARE-39 (Volume 2)

Budget Account 101-3232

Ms. Florence said, "The state has opted to provide a state supplement to aged and blind individuals, not supplementing the disabled who are receiving supplemental security income."

Ms. Florence stated this unit is to provide funding to meet caseload growth and to deal with the changes in the federal processing costs. She said that each year the federal government increases the amount of the processing fee. She explained this decision unit would provide funding to increase the processing fee to $7.80 a check in FY 2000 and to $8.10 a check in FY 2001. She said this decision unit also continues the 6 percent increase to Adult Group Care Facilities.

Mr. Goldwater asked what the unfunded decision unit is in this budget. Ms. Florence said the division has recommended bringing the supplement to the 1982 level.

Senator Rawson asked what the personnel turnover has been in the Welfare Division in the last 4 or 5 years and wondered whether it has been significant or unexpected. Ms. Florence said that actually the division’s turnover is less than the statewide average, even in the eligibility component. She offered to provide the figures to staff.

Ms. Evans inquired what cash grant a family of three would receive from TANF. Ms. Florence replied the amount would be $348. Ms. Evans asked when this grant was last increased. Ms. Florence said it was increased in 1991 to $371 and then reduced to $348 in 1992 when the recession hit. Ms. Evans commented this is a long time without any increase. Ms. Florence said that is why the division proposed the increase to the nonneedy caretaker. She stated that what has been provided, for those who are able to work, is the 100 percent disregard of earnings for the first 3 months and 50 percent for the next 9 months. She said the disposable income level has in effect increased for that group.

Jon L. Sasser, Attorney at Law, Lobbyist, Nevada Legal Services, spoke on budgets concerning women and children. He said this is an unusual session for advocates who work with women and children in dealing with programs operated by the Welfare Division. He stated that in the past there have been concrete goals for proposals brought to the committee. Mr. Sasser said the proposal in the past would have been to increase the grant level or to advocate "fill the gap" budgeting which evolved into income disregards. He said that for the last two sessions the welfare advocates have been involved in welfare reform. He reiterated this is an unusual session "due to being in the early stages of the [TANF] grant experiment," and the results are just beginning to come in. Mr. Sasser said the advocate’s goal this session is to do as much possible to understand what is happening with welfare reform and call that to the attention of the Legislature.

Mr. Sasser said the state has experienced a decrease in caseload of almost 50 percent, as Ms. Florence mentioned. He said it disturbs the advocates that the state has lost half of the welfare caseload and does not know what has happened to these individuals. Noting the longitudinal study is still being put together, he said 50 percent of that caseload is gone and the state will never know what happened to them "in terms of" the study. Mr. Sasser said this fact is somewhat frightening and disturbing to the advocates.

Mr. Sasser noted that people are showing up at food banks in increasing numbers despite the fact the economy is doing well. He asked, "Why this is going on?" and answered that the state does not really know why. "Is it a result to some degree of welfare reform, or not?" he asked.

Mr. Sasser said that although Ms. Florence and her staff have put together an extensive study of performance indicators, there is one piece of the puzzle still missing. He said that despite the good economy and welfare reform, just as many people are showing up at the door, about 2,000, as did in the past. He restated that the number of people asking for assistance has not dropped significantly.

Mr. Sasser pointed out that "once people get in the door, the length of time they stay on the program has also been pretty flat for the last few years. That has not increased significantly." He said what has increased is the number of people who "knock at the door and don’t get in." He stated the number of people whose applications are denied or who dropped out in the application process seems to be the major reason why the caseloads have fallen. He said the state does not have an analysis of the situation concerning these individuals and does not know where they have gone or what happens to them. Mr. Sasser stated this might be an area for the subcommittee to focus on before the session is over. He remarked the state should "get a handle on" this section of the population.

Mr. Sasser emphasized he wanted to voice his support for the grant increase to nonneedy caretakers. He said it is long overdue, and these individuals do a "yeoman’s job of stepping up to the plate" without much help from the state.

Jan Gilbert, Lobbyist, Northern Nevada Coordinator, Progressive Leadership Alliance of Nevada, said she wished to speak about the childcare issue. She said the waiting list of 3,800 people is made up of people at risk of going on welfare.

Ms. Gilbert said the alliance had a long talk with Ms. Florence and Mr. Willden regarding higher education. Ms. Gilbert said there are some people who are in the last stages of finishing college and cannot access childcare. She said Mr. Willden explained to the alliance about a committee that analyzes who is eligible to "access those few dollars."

Ms. Gilbert acknowledged that "it looks like a lot of dollars, but in reality, [lack of] childcare is the block to the success that people [could] have." She said when a person pays $600 a month for childcare, a $6-an-hour job cannot pay for food, rent, and childcare too. She stated she could not emphasize enough that the waiting lists for childcare need to be looked at. Ms. Gilbert said the committee needs to choose between whether those who come to Welfare’s orientations for NEON or Medicaid have a childcare facility in which to leave their children, or whether the childcare grant goes to the person going on job searches, or whether the childcare grant goes to the person already working at a job. She said this is a difficult choice. She asserted that what ends up happening is, the Welfare Division has this huge waiting list of people who are "all needy" and many of those people do pay on a sliding scale even though they are getting childcare.

Ms. Gilbert said the Interim Finance Committee put money into a professional development center in southern Nevada for training on childcare. She said it is just starting to come on-line, and the alliance is very excited about it. She said the development center makes it possible for parents to bring their children to their meeting and drop them off, providing access to childcare that they normally do not have. Ms. Gilbert said she would like to ask the committee to consider putting in a northern Nevada professional development center as well. She said she thought the development center was a "fabulous" idea and she was glad the committee funded the southern Nevada development center. She said she knows the Welfare Division is excited about seeing the progress of that center.

Senator Rawson said he would like staff to obtain information for the subcommittee on the southern Nevada development center, where it is located and what the budget is.

Ms. Gilbert said the other item that continues to come to her attention as a block grant commissioner who looks at the Title XX dollars is the flow of TANF funds out of the TANF budget into the Title XX budget. She was aware this is allowable on a federal level but said it really bothers her sense of what is right. She said TANF funds should stay in the TANF budget because the Welfare Division needs those dollars. Ms. Gilbert said that in the Governor’s recommended budget there will be $1 million that flows out of the TANF budget and covers the Title XX dollars, which are being reduced by the federal government. She said she feels this is poor planning. She emphasized that any TANF savings which are a result of the successes Ms. Florence spoke about should be funneled back into the TANF system to make it a working system. Ms. Gilbert said the savings could go into the childcare development center. She stated the transfer of funds to Title XX continues to happen and voiced the opinion this is short-sighted.

May Shelton, Lobbyist, Director of Social Services, Washoe County, said Ms. Florence and her staff have done a great job implementing welfare reform. She said the Welfare Division asked the frontline workers what they needed to do to enhance the program. Senator Rawson commented it was a novel idea to ask what the clients really need. Ms. Shelton agreed that yes, it is very novel, and the job retention incentives are a good idea. She said that in 1997, the Legislature helped to get the county transfers, and this year Ms. Florence has included it in budget account 101-3230.

Ms. Shelton said that in the HR, Welfare/TANF budget, account 101-3230, increasing nonneedy caretaker supplements is beneficial because this is a good resource for the child protective workers. She said placement of children with relatives rather than in foster care is very viable. She stated the $90 increase would increase the daily rate from $7.60 to $10.70. Ms. Shelton said she has criticized the foster care payments being $12 a day for children under the age of 12, and $14.40 for children ages 13 and up. She said that is still low. Ms. Shelton stated this is less than what it would cost to board a medium-size dog. She remarked this increase is a good start, and with the Adoptions and Safe Families Act coming, those who work in child protection and child welfare are going to have to work faster to get children into permanent placements. She said relative placement is one of those places. Ms. Shelton said it takes about 26 days to get a nonneedy caretaker approved, whereas it would probably take 2 to 3 months to get a foster care license for a relative. She said that under the Adoptions and Safe Families Act there will be more stringent requirements to get a relative licensed.

Susan Meuschke, Executive Director, Nevada Network Against Domestic Violence, said the Welfare Division recognizes that domestic violence is a barrier to individuals getting off welfare while also recognizing that welfare can be a way of getting out of a violent relationship. She said Ms. Florence and her staff have been proponents of putting together funds to make sure services are available to domestic violence victims, but complete use of the funds has not been allocated under this budget category. Ms. Meuschke said the Nevada Network Against Domestic Violence has done research to identify what the problems are. She explained that most victims of domestic violence are looking for crisis intervention services, services that are going to occur right away. She said that if one of these individuals enters the welfare office and identifies domestic violence as an issue, that person will need service right away. Ms. Meuschke said this individual may not receive a card for 20 to 40 days, and although the individual may be receiving services during that time, the way the grant is structured the programs have not been reimbursed for those services.

Ms. Meuschke said the Nevada Network has spoken with the Welfare Division and the division is exploring the possibility of changing the state plan, holding public hearings to address those issues, and perhaps retrobilling. She said the Nevada Network has identified other issues that are being discussed with the Welfare Division concerning the referral process and how it occurs. She stated the Nevada Network needs to assess whether there are things they need to do to help facilitate that process. Ms. Meuschke said the Nevada Network also needs to make sure domestic violence victims who need services are getting those services, although there are many victims of domestic violence who do not need service or are not impeded in the welfare-to-work process.

Ms. Evans said the subcommittee would like to have a report on the progress of the discussions between Ms. Florence and her staff and the Nevada Network Against Domestic Violence’s representatives about working out some of the problems with the program.

Lisa Guzman, Lobbyist, Nevada Empowered Women’s Project, spoke about childcare. She said she understands there is a huge difficulty in trying to prioritize the childcare waiting list. She noted that recipients of TANF are first in line to receive childcare assistance. However, she said, her concern is that there is a very long childcare waiting list and for those who are not on TANF the wait for childcare assistance can be 2 years or more. Ms. Guzman said her concern is that these families who are waiting for childcare assistance and are struggling to make ends meet with low-wage jobs are going to find themselves on the welfare rolls. She said there may not be an easy solution to this dilemma, but there needs to be an effort to work on this issue; otherwise, there will be families cycling on and off the welfare system because of the high cost of childcare.

Senator Rawson adjourned the meeting at 11 a.m.

RESPECTFULLY SUBMITTED:

Johnnie L. Willis,

Committee Secretary

APPROVED BY:

Senator Raymond D. Rawson, Chairman

DATE:

Assemblywoman Jan Evans, Chairman

DATE: