The Joint Subcommittee on Public Safety/Natural Resources/Transportation of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Lawrence E. Jacobsen, at 8:00 a.m., on Thursday, March 25, 1999, in Room 2134 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 Lawrence E. Jacobsen, Chairman

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Ms. Christina R. Giunchigliani, Chairman

Mrs. Vonne Chowning

Mr. John W. Marvel

Mr. Richard D. Perkins

Mr. Robert E. Price

STAFF MEMBERS PRESENT:

Judy Jacobs, Committee Secretary

OTHERS PRESENT:

Peter G. Morros, Director, State Department of Conservation and Natural Resources, introduced Freeman Johnson, Assistant Director. Mr. Morros recalled a question arose during his last appearance before the committee concerning a $200,000 litigation item requested as an amendment to the base budget. He explained the Budget Division and the Governor expressed concern because the funding has historically been obtained through a one-shot appropriation. He pointed out he had provided the committee with a complete history of the appropriations and expenditures of the funds for water litigation purposes at the previous hearing. He said there were two bills addressing the problem, but one has been withdrawn.

Mr. Morros stated the division has no objection to approving the one-shot appropriation addressed under Assembly Bill (A.B.) 151 to be heard by the Assembly Committee on Ways and Means the following Wednesday. Therefore, he withdrew the $200,000 line item amendment to the base budget.

Senator Neal noted the funding has been a one-shot appropriation since 1973. He asked whether the Governor intends to close out the funding. Mr. Morros replied no, the Governor seeks proper accounting for the item in The Executive Budget and it will be accomplished through the historical process. He said that in the future his department will identify the item when the budget is submitted.

Senator Neal asked how much has been spent. Mr. Morros said $2,186,906.71 has been spent since 1973.

Mr. Marvel asked how much litigation is going on at present. Mr. Morros replied there are approximately nine cases under litigation at the moment, and those are limited to the Carson, Walker, and Truckee Rivers. He said the department is involved in more than 50 cases under litigation regarding water. He offered to provide a list. Mr. Marvel asked whether $200,000 will be sufficient to cover the litigation expenses. Mr. Morros opined that will be sufficient for the next 4 years and some of the problems will be resolved within that time. He stated the department will need a carryover provision.

Mr. Marvel asked whether there is anything pending on the Owyhee Tribe negotiation. Mr. Morros said the department is still under negotiations with the tribe and the upstream users, and it appears they are in agreement, but the Bureau of Indian Affairs (BIA) has not approved the agreement. He reported all sides have been working diligently to reach a resolution and are determined to avoid prolonged litigation or adjudication. Senator Jacobsen expressed confidence in the ability of the department to lend experience to the problem.

R. Michael Turnipseed, State Engineer, Water Resources Division, State Department of Conservation and Natural Resources, commented some of the litigation on the Truckee River will likely be resolved through a negotiated settlement, should it come into being. However, he said, "There is a huge bomb out there, and the fuse is lit, on the Walker River."

Mr. Turnipseed recalled the litigation began between Nevada, California, and the Walker River Irrigation District (WRID) regarding the draining of the Bridgeport Reservoir, and said that portion of the suit has been settled. He said Mineral County opened another part of the case in asserting the rights for Walker Lake and who should be served. He added another part of the case is the United States government and the Walker River Tribe asserting rights for more water for lands they acquired just after the decree was entered in 1936. He said Nevada is a party to that, but the state engineer is not yet a party. He explained the United States and the tribe are now asserting reserve rights to groundwater, which has never happened before anywhere in the western United States. He said the claims are the subject of adjudication in Arizona, and there will be substantial litigation costs involving that lawsuit in the future once Nevada is officially included as a party.

Mr. Marvel observed the situation in which the tribe is asserting rights to groundwater is unique. Mr. Turnipseed agreed, and noted the United States government and the tribe have claimed all of the groundwater under and around the reservation at Shurz, the colony at Bridgeport, the colony at Yerington, and the Mountain Warfare Training Center at Pickel Meadows. The U.S. Forest Service (USFS) has added instream flows and the Bureau of Land Management (BLM) has added public water reserves to the question.

Mr. Marvel commented there may be "some terrible precedents set." Mr. Turnipseed responded Nevada typically waits to see what happens in other states, and the issue is presently before the Arizona Supreme Court. However, he said, groundwater was included late in the litigation and it only applies to specific areas. He pointed out Nevada has had an exclusive groundwater law since 1939.

Mr. Morros distributed a handout (Exhibit C) documenting expenditures for the Statewide Wild Horse Management Plan. He recalled that last session $150,000 was appropriated to the department to develop a plan. He said the plan is complete, as reflected in the document. He noted nearly $27,000 of the $75,000 appropriation for Fiscal Year (FY) 1998 was reverted, and it appears the reversion from the $75,000 appropriation for FY 1999 will be approximately $50,000, making a total reversion of approximately $76,000 for the biennium.

According to Mr. Morros, the Commission for the Preservation of Wild Horses recommends a public/private foundation be established, primarily to make the adoption program more effective in order to reduce the herds. He said the BLM is presently administering the wild horse adoption program. He reported the commission feels a feasibility study should be performed in which a foundation would handle marketing, adoption, and pre- and postadoption checks and other related activities. He stated there is no intent to remove the responsibility for managing wild horses away from the BLM, but rather the intent is to get the adoption program to be more effective in order to maintain the horse herds at an acceptable level.

Mr. Morros said the department would like to carry over the $49,000 which would otherwise be reverted at the end of this year into next year with the understanding there will be matching funds provided by a federal agency, BLM, or some other entity to perform the study on the feasibility of a private/public foundation. He said the Governor has supported the proposal to carry over those funds as stated, and the BLM has also indicated support for the concept. Mr. Morros further noted the concept has been addressed in other reports in the past.

Mr. Morros stated it will be necessary to involve marketing experts in the project. He noted the project will be, in effect, a continuation of what the commission has done with the wild horse management plan that was submitted to the Legislature.

Senator Jacobsen asked whether the BLM should enter into deliberations with the Legislature. Mr. Morros replied the BLM already seems to be in agreement and would be receptive to some other agency taking over the responsibility for adoption. He declared the adoption program could be much more effective, given the lack of experience the BLM has in the marketing of wild horses.

Senator Jacobsen remarked wild horses seem to be a most contentious issue in the rural areas, affecting the livelihood of ranchers and impacting sportsmen. Ms. Giunchigliani commented it would be helpful to have a written plan as to how the project would proceed before approving the balance forward of unspent funds. Mr. Morros agreed to provide, within a few days, a plan regarding the feasibility study. He acknowledged he had no estimate of the cost for the study.

Mr. Marvel asked whether the advocacy groups have indicated an intention to donate to such a program. Catherine Barcomb, Administrator, Commission for the Preservation of Wild Horses, reiterated the BLM is in favor of cofunding the study, and many groups have indicated support for a foundation.

In response to a query from Senator Neal, Ms. Barcomb said the federal government manages the wild horses with recommendations for improvements to the program from the state. She explained the federal government studies utilization of habitat including how many wild horses, wildlife and livestock can survive in those areas, and it makes reductions to the number of horses or livestock by removing the excess animals. Some are put up for adoption and some are moved to other areas.

Senator Jacobsen asked whether a bill has been introduced regarding the foundation. Ms. Barcomb had no knowledge of such a bill. Mr. Morros repeated there is a lot of support for the foundation and everyone is in agreement the herds must be maintained at a manageable level.

Senator Jacobsen noted the department proposes to increase the number of positions in the Elko office of the Division of Forestry. Mr. Morros said the budget contained funding for a half-time accounting position in Elko, but that was eliminated and instead two full-time accounting positions were added, one in Carson City to service the Division of Water Resources, and one in the Elko office of the Division of Forestry. He said both will be in the director’s office, and the latter will deal primarily with accounting duties for the conservation camps and emergency response such as fire suppression. He said any other positions were eliminated.

Mike Nolan, Principal Budget Analyst, Budget Division, Department of Administration, acknowledged there was a mistake in communications between the Governor’s Office and the budget office.

Senator Jacobsen wanted to know whether the positions can be filled by July 1. Mr. Morros said the positions are extremely important and greatly needed, and the department will attempt to fill them immediately.

Jennifer Kizer, Administrative Services Officer, Division of Forestry, reported the division is up to date on billing and accounts payable, and up to date on fire billings as of 2 weeks ago. She admitted the division is having difficulty staying current with billings in the northern region and the Elko office.

Mr. Marvel wanted to know the status of the receivables. Ms. Kizer responded the federal agencies have been paying in a timely manner, but the division has been having difficulty keeping current on fire billings from the last fire season. She estimated there is approximately $600,000 in outstanding unpaid fire billings.

Senator Jacobsen inquired whether somebody on the fire line keeps track of personnel and activities, or whether data is collected later at a debriefing. Roy W. Trenoweth, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources, responded data is collected in an ongoing process, on both the fire line and in the office. He reported there is no delay in relaying the information to the accounting staff. He praised the accounting staff for keeping up. He explained that although $600,000 sounds like a large sum, the federal agencies process bills as soon as they are received.

Senator Jacobsen wanted to know whether people in the office are cross-trained. Mr. Trenoweth replied the secretaries are, and even dispatchers assist in collecting bills.

Mr. Morros interjected that since receiving a critical audit report on the Division of Forestry regarding financial management, the department has worked to correct internal control problems and increase the efficiency of financial management. He stated, "It is a horrendous accounting responsibility . . . especially when we get a very active fire season." He stated the division can go from a staff of 30 people to several hundred overnight, and "it all unloads all at once." He said the department has undertaken all possible efforts to streamline the process to make it more efficient. He stated he is very comfortable with the Division of Forestry right now, but the division and the department will continue to meet with the Legislative Counsel Bureau (LCB) and the Budget Division.

Senator Jacobson agreed not only is the division in a difficult position, but also the Legislature and the LCB need the information on the financial status of the division.

Senator Jacobson inquired whether it would be feasible to fund the Administration account with cost-allocation revenues from the various Conservation and Natural Resources program budgets, and whether the agency should prepare a plan for the next legislative session. Mr. Morros indicated information regarding such a plan has been sent to the LCB.

Senator Jacobsen inquired how funding will be provided for the Tahoe Environmental Improvement Program (EIP). Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources, stepped forward to address the issue. She distributed copies of a memorandum (Exhibit D) dated March 24, 1999, regarding the Tahoe EIP.

Ms. Wilcox explained the bond interest to be used to support the Tahoe program is derived from the bond funds sold under the $20 million Tahoe Bond Act of 1996. She said $10 million in bonds have been sold to date. She drew attention to the attached worksheet in Exhibit D used to estimate the amount of funds available, with cumulative interest estimated at $1.9 million over the life of the bonds. She said that is allocated over time in table 2 on the last page using interest calculated at 5 percent, even though interest has been running at 6 percent. After the year 2001, she said, increases in expenditures have been assumed at 7 percent each year.

Ms. Wilcox pointed out most of the expenditures are for salaries, which generally are raised by 5 percent each year plus cost of living adjustments (COLAs). She said, "All of the positions . . . are budgeted for with interest plus a discretionary administrative grant that I may issue to the Nevada-Tahoe Conservation District." She stated Nevada is at present obligated for the administrative grant only for the first year. She noted the program will not run low on funds until 2005. She pointed out the funds are derived from the first $20 million bond act issue.

Ms. Wilcox said the division is requesting $3.2 million in bonds for the coming biennium for state park projects, and in future biennia there will be additional requests for funds, some from bonding. She asserted there will be adequate interest revenue from bonds to cover the positions budgeted for Tahoe support for the foreseeable future.

Mr. Marvel wanted to know whether the state will be subject to any penalties for arbitrage. Ms. Wilcox replied the state is subject to arbitrage penalties whenever the interest that is being made on the bonds exceeds the interest being paid out. She noted $330,000 is estimated for arbitrage payments in the year 2000, as estimated by the Office of the State Controller based upon projected outflow. Ms. Wilcox said an additional $100,000 arbitrage payment has been estimated for later, assuming the grant requests coming in continue at the same rate. She said those funds are being expended rapidly.

Mr. Marvel acknowledged being disturbed by the arbitrage penalties, saying that often the time is not right to use the funds for capital improvements and it is good business judgment to draw interest on the funds. He suggested state personnel should confer with the Nevada congressional delegation to see whether there may be some remedy.

Senator Jacobsen interjected that a main concern is finding a long-term source for pollution control revenue and bond interest. Ms. Wilcox responded she is comfortable with the bond interest. She pointed out she has no control over the pollution control account, which is not in her budget, but the Budget Division has assured her the funds for the coming biennium are secure. She admitted the account will have to be reviewed each biennium.

Mr. Marvel wondered whether Washoe and Clark Counties might challenge the use of the funds. Ms. Wilcox responded there is a bill pending to modify the language in the statute setting up that fund to authorize its expenditure in the Tahoe Basin and to qualify existing expenditures out of that fund. She reported neither Washoe County nor Clark County has expressed disagreement with expenditures of those funds this biennium, but they are concerned about the future. She said no plans have been made to access other revenues for pollution control in the basin. Mr. Marvel suggested Washoe and Clark Counties may make demands to use those funds for their own pollution problems. Ms. Wilcox noted the existing statute allows for grants to both counties, and the new bill will not only set aside funds for the Tahoe Basin but will also reserve a portion of the fund for grants to those counties.

Referring to a memorandum dated March 24 from Ms. Wilcox (Exhibit E. Original is on file in the Research Library.), Ms. Giunchigliani interjected there are school trust lands on which no funds have ever been collected for the Permanent School Trust Fund. She opined the failure to collect funds may be illegal. Citing potential sales of school trust lands, she suggested funds could be generated that are owed to the trust fund.

Ms. Wilcox responded the state received 2 million acres in school trust lands dedicated to producing revenue for the permanent school fund. She said just over 3,000 acres remain, most of which will be sold when the market is best. She explained some of these trust lands were diverted to general state agency purposes, some in the 1930s and some in the 1960s, with no compensation to the fund. She related that when the division became aware of the problem it sought and received compensation for some of those lands; but there is still unsold land remaining, including some in Las Vegas which is very valuable. Ms. Giunchigliani worried the state could be subject to suit if a school district wanted to pursue the issue since the districts have not been compensated as required under the law. She suggested any funds received from future sales could be used to establish a construction loan account that could be used specifically to assist rural counties.

Looking at Exhibit E, Senator Neal noted the undeveloped school trust land may have a value of $25 million. Ms. Wilcox concurred that represents the value of the land at present.

Senator Jacobsen requested that Ms. Wilcox keep the committee informed on the status of the school trust land. He asked Mr. Morros to report on boards and commissions. Mr. Morros directed the committee’s attention to pages 32 through 47 of the Supporting Documentation booklet (Exhibit F. Original is on file in the Research Library.). He said there was a problem with attendance 2 years ago on a couple of the boards and commissions, but the Governor exerted his influence to encourage attendance.

Mr. Morros said at least three commissions have policy-setting and regulatory authority, and the State Environmental Commission and the Board of Wildlife Commissioners are very active. He said the wildlife commission meets 9 or 10 times each year to deal with tag allotments, hunting seasons, and policy-setting. He said an attempt is made to make the boards representative of all areas of the state. Right now, he said, there is a vacancy on the Board for Financing Water Projects, which passes judgment on loans for water projects, and someone from the rural areas will be selected to fill the spot.

Forestry – Budget Page CNR-52 (Volume 3)

Budget Account 101-4195

Senator Jacobsen asked for comment on county assessment revenue. Mr. Trenoweth reported the division would prefer waiting to make any modifications to the way assessments are made.

Senator Jacobsen asked why there is a need for an automobile in the maintenance decision unit M-200 for the Aircraft Mechanic position. Freeman K. Johnson, Assistant Director, State Department of Conservation and Natural Resources, responded the budget request was revisited and the department acknowledges it may be premature to request a vehicle to support the activity, because the position is new. He requested that funding be removed at this time pending the gathering of sufficient information to justify the request at a later biennium. He noted there have been significant changes and reductions in the Aircraft Mechanic budget. He said reductions include removal of funding for the vehicle, furniture, and some telecommunications equipment. He explained the position will be domiciled at the Minden hangar where land lines are available, thus precluding the necessity for cell phones, pagers, or portable radios.

Mr. Johnson said the remaining support budget for the Aircraft Mechanic position should be divided between the Forestry and Wildlife budgets. He indicated $13,785 in training funds should have a carryover provision because the department is unsure what the training requirements will be, and recruitment for the position has not been carried out. He expressed hope a fully qualified person will be hired who will require only a nominal amount of training. He said it is possible the training will have to be conducted during the second year of the biennium. Mr. Johnson reported he has consulted with the administration of the Division of Wildlife concerning the revised budget amount.

Mr. Nolan explained the reductions reflect a transfer from budget account 101-4196 (Forest Fire Suppression) into budget account 101-4195 account and a slight reduction in budget account 101-4452.

Senator Jacobsen surmised the mechanic will keep a log of activities to denote whether he is working on forestry projects or on wildlife projects. Mr. Johnson responded a monitoring program has been developed to track the nature of the activity and whether it is a routine repair, or a 100-hour inspection, and the division under which it is being performed. From that, he said, a cost-benefit analysis will be made to determine whether a savings is being realized by having an in-house mechanic. He said the alternative is to send the aircraft to either Stockton, California, or Phoenix, Arizona.

Senator O’Donnell challenged whether an aircraft mechanic is needed. Mr. Johnson replied the services must be performed in the interest of safety, including preventative maintenance. Senator O’Donnell wondered whether it would be less expensive to contract out for service. Mr. Johnson answered a determination has been made that the projected rate of $22.95 an hour for a state employee would result in significant savings compared to the usual and customary contracted rate for such services of $50 to $68 an hour. Also, he said, the services can be performed at a significant savings in the hangar at Minden. The aircraft will not have to be ferried to Phoenix or Sacramento, a procedure that incurs per diem and salary expenses for the pilot to ferry the aircraft and wait on the ground for 40 to 50 hours each time service is required.

Senator Jacobsen commented it would be advantageous to have the mechanic available for minor repairs for borate planes or other planes operating in the area. Mr. Johnson agreed and said the division hopes to employ a person qualified for either fixed- or rotary-wing planes to service helicopters as well as airplanes, and to perform immediate services on tanker planes. He noted a premium must be paid to employ a mechanic to respond on short notice or on call.

Senator Jacobsen reported he has received many comments expressing concern over the use of inmates to wash planes. Mr. Johnson responded the inmates do not do any mechanical servicing of the aircraft, although they do perform supervised cleaning. He said, "I can guarantee that there is no maintenance service performed by an inmate that should be performed by someone who is certified and qualified to do so." He said the aircraft mechanic will at a minimum be required to have an airframe and power plant certification issued by the Federal Aviation Administration (FAA) along with other certifications and licenses required by the U.S. Forest Service (USFS) and the U.S. Fish and Wildlife Service.

Ms. Giunchigliani asked whether there will be a commensurate reduction or savings if the Aircraft Mechanic is added. Mr. Nolan voiced the understanding all the repairs for the forestry planes will be charged to budget account 101-4196, including half the cost of the mechanic. Mr. Johnson interjected he could provide the figures to Ms. Giunchigliani later. He said they include information on the cost to conduct the maintenance services in-house versus contracting them out.

Mr. Marvel asked whether there will be savings, and whether that is reflected in the budget. Mr. Johnson replied there is a budget savings, and the budget should reflect the reduced anticipated expenditures. Mr. Nolan said the pilot will be funded by a transfer from the Division of Wildlife (account 101-4452) and from budget account 101-4196, bringing about a savings. He said although there will be no General Fund savings there should be a lower expenditure for aircraft maintenance. Mr. Morros added the savings is reflected in the reduction in the contractual maintenance.

Mr. Morros said projections indicate there will be a significant savings on expenditures of about $35,000 a year. Mr. Nolan stated there will be savings in the contracted charges reflected in budget account 101-4196 for Forest Fire Suppression. He pointed out that is a $1 million budget account, and if $300,000 were allocated for aircraft maintenance, the amount would be reduced to $250,000 next year, but the funds will remain in the account to provide the ability to respond to emergencies. He explained that in this case the reductions referred to will simply reduce the transfer out of budget account 101-4196 into account 101-4195, leaving a net balance in account 101-4196 higher than originally proposed in The Executive Budget.

Turning to decision unit M-201, Senator Jacobsen inquired when the proposed Fire Control Dispatcher II for Elko was scheduled to come on board. Mr. Trenoweth answered the hiring of the dispatcher has been deferred by a couple of months because of the delay in the completion of the building. He said the building should be ready around April 4, 2000, according to the manager of the State Public Works Board.

In response to Senator Jacobsen’s request, Mr. Trenoweth described the location and structure of the new office. He said the original plan had been to include the Nevada Division of Forestry, the U.S. Forest Service, and the Bureau of Land Management in the building, but since then the City of Elko and a section for police have been included.

Mr. Marvel asked whether the Division of Wildlife anticipates moving, and what the old building will be used for. Mr. Morros responded that is a separate capital improvement project (CIP), and if funding is approved the division will move to a new location on the east side of town where the Division of Forestry is housed at present, adjacent to the Nevada Youth Training Center. He said the present building will be offered for sale to offset the costs of the new building.

Ms. Giunchigliani asked how much it costs for the Division of Forestry to respond to highway-related accidents, and whether those costs could be charged to the Highway Fund instead of to the General Fund. Mr. Trenoweth said he could break out those figures, but he did not know whether the charges could be changed.

Senator Jacobsen reported he has received indications a surplus helicopter may be provided to the state by the U.S. Department of Defense, but under the current situation that might not come to pass right away. Mr. Johnson recalled a letter was drafted to send to Washington, D.C. and said he has been informed that U.S. Senator Richard H. Bryan has also sent a request to the Department of Defense.

Forestry Intergovernmental Agreements – Budget Page CNR-063 (Volume 3)

Budget Account 101-4227

Mr. Trenoweth reported he made a request to the Budget Division (Exhibit G) to remove the enhancement decision unit E-400 from the budget. He said the issue regarding the dissolution of the Storey County Fire Protection District has not been resolved, and the regional manager has a meeting scheduled with the Storey County Commission chairman later in the day to discuss the matter. Mr. Trenoweth said his regional manager has spoken with some of the other commissioners, but the matter is still unresolved.

Senator Jacobsen expressed dismay regarding the problem and requested that the committee be advised on the matter. He asked what methods California has used to dissolve fire protection districts, and whether they have been successful. Mr. Trenoweth replied he already provided information for Gary Ghiggeri, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. He pointed out the situation in California is somewhat different from that in Nevada. He explained California cannot dissolve a district that was legally formed because there is no mechanism in California law to do so. This was discovered only 2 years ago. The senator noted California does a lot of contracting, and contracts can be dissolved fairly easily. He stated no districts have been dissolved in California, to his knowledge.

Forest Fire Suppression – Budget Page CNR-068 (Volume 3)

Budget Account 101-4196

Senator Jacobsen asked whether the division wished to comment. Ms. Kizer said the fire billings for the 1998 fire season have been completed, and approximately $600,000 is outstanding in reimbursements. She said prior years have been closed out.

Senator Jacobsen asked why the reimbursements recommended by the Governor are budgeted lower than the request by the agency. Mr. Nolan conceded he was unable to be specific, but he conjectured the request from the agency was based upon the FY 1996 fire season, one of the worst in memory in terms of costs. He noted the reimbursement is for authority only, and if the expenditures and responses to emergencies do not occur, the agency will neither bill nor earn revenue. He indicated if the sum is exceeded, the agency would make a request to the Interim Finance Committee (IFC) to increase the authorization. He said the Budget Division has approved an increase to the amount requested by the agency, should the Legislature agree.

Forestry Honor Camps – Budget Page CNR-71 (Volume 3)

Budget Account 101-4198

Senator Jacobsen asked why the adjusted base project reimbursements are $80,000 lower than actual costs in 1998 and whether they should be increased and General Fund revenues decreased by a like amount. Mr. Nolan responded the authorized project revenues in prior years totaled $700,000, which he increased to $1.2 million in the proposed budget. He explained the earned revenue depends on several variables, including the economy, the amount of time spent on legislatively mandated projects, whether the positions are filled, and where the revenue is generated. He opined the 65 to 70 percent increase should be sufficient, and he noted the decision unit for Silver Springs adds revenue.

Mr. Nolan pointed out the type of fire season will directly influence the amount of revenue. If the inmates are occupied with fighting fires during the field season, he said, the project revenue will decrease. He noted the past two fire seasons were very light.

Mr. Marvel asked whether the division is receiving the right kind of crews. Mr. Trenoweth replied the crews go out every day with about 12 people. He said the camps are full most of the time, although the census does fluctuate, but most of the time the crews are available to work. He declared he had made a strong recommendation that the revenue be enhanced, as stated in the 1997 Letter of Intent, and had recommended the crews work with the Division of State Parks and at the veterans’ cemeteries as free projects. He contended revenue will be impacted in a couple of years if so many projects continue to be performed free of charge. He said that right now he feels the projected revenue is attainable.

Mr. Marvel asked whether the crews are manned by the "sick, lame, and lazy" any more. Mr. Trenoweth stated there still are "sick, lame, and lazy," but most of the crews go out every day. He noted there always have been "sick, lame, and lazy" in the camps. He indicated the division has no choice over the selection of inmates; they are sent out by the prison system.

Mr. Marvel said the Department of Prisons (DOP) made some guarantees that the crews would work. Mr. Trenoweth responded the situation has improved and there are fewer "sick, lame, and lazy," although there are some days when the inmates actually are sick or do not want to work. He said the systemwide average for last year for the 10 camps was lower, although the number of "sick, lame, and lazy" was higher at Indian Springs Conservation Camp. He said he is attempting to enhance the revenue, and it is difficult to keep the number on each crew at 12, the number of seats on a bus. He recalled the average was 11.47, which he called "pretty good." He recollected there was a time not long ago when the daily crews consisted of just 6 to 8 inmates, but at the time the crews were going out every day.

Mr. Trenoweth acknowledged the numbers are down at the Indian Springs and Stewart Conservation Camps, and because inmates are shipped from those two camps the numbers always fluctuate. Mr. Nolan noted the two camps are adjacent to the major intake facilities for the prisons in the north and south. He explained the inmates are screened and classified, and then shipped through those two conservation camps to other camps throughout the state. He said the problem has always been that once the inmates are trained, they are sent out to other camps.

Mr. Trenoweth said Stewart is also impacted by the number of inmates who work at the prison dairy ranch, and there are a number who work in the community and state agencies in the Carson City area. He added the residential substance abuse program is held at Indian Springs, which takes 48 to 50 inmates, and there is a boot camp which takes another 40 to 60. He suggested all those factors result in a reduced availability of crew members from those camps.

Senator Jacobsen commented it might be proper for the committee to hold a discussion about the problems with the forestry division and the Department of Prisons. He noted there are occasionally problems if the lieutenant running the camp is not in complete agreement with the person from the Division of Forestry, and each camp has its own methods of operating. He acknowledged it is not possible to respond to all the demands made, and care must be taken not to compete with private enterprise at the same time. He said the program is good and it should be improved and enhanced. He suggested classification may be a problem, and there may be a solution even for the "sick, lame, and lazy."

Ms. Giunchigliani asked what types of work projects are performed near the Jean Conservation Camp. Mr. Trenoweth replied those inmate crews work primarily at the Veterans’ Cemetery in Southern Nevada and at one of the parks as free projects, and they also work for the Nevada Department of Transportation (NDOT), Boulder City, and Henderson. He said there are so many projects proposed that some are turned away. He offered to provide a list of projects, both those completed and those turned away, to Ms. Giunchigliani.

Senator Jacobsen recalled the Jean camp is one of the top two or three revenue producers. He said he had requested a compilation of the projects performed by the camps, paid and nonpaid. Mr. Trenoweth commented he had provided committee members with a report (Exhibit H) showing the projects worked by each camp for the past 6 months. He explained the inmates at Jean are constantly working on paid projects except for the two free projects cited.

Ms. Giunchigliani said it would be helpful to know what types of projects have had to be turned down due to a lack of crews. Mr. Trenoweth said the largest revenue producer in FY 1998 was Silver Springs, followed by Stewart, Indian Springs and Jean or Carlin. He acknowledged the work performed by Carlin crews has fallen off, as has the work at other northern camps, due to the slowdown in the economies in those counties attributable to the impact of falling gold prices on mining revenues.

Returning to the discussion of the Ely camp, Senator Jacobsen remarked decisions are needed whether the camp will refurbish equipment for NDOT. He said the camp in Ely has a downtown location where work is done on equipment for fire-fighting and other heavy equipment. He suggested a facility should be located out at the camp rather than downtown in order to save transportation costs. He asked whether the NDOT has any vacant maintenance buildings that could be moved to any of the camps. Mr. Trenoweth was unaware of anything owned by NDOT that might be available but offered to look into the matter.

Referring to page 110 of Exhibit F, Ms. Giunchigliani observed there are approximately 20 pieces of equipment in Ely that could be renovated if a shop were available. Mr. Trenoweth commented those are vehicles that need painting. He explained the division has a CIP for a 4,000-square-foot building. He said Senator Jacobsen secured a 30- by 50-foot steel-frame building through Truckee Meadows Community College which was dismantled and shipped to Ely. He noted decision unit E-730 provides $24,845 for special projects which could be used for footings to reconstruct the building at the industrial park. Mr. Trenoweth said NDOT has a paint booth in Winnemucca that is no longer in use which the division would like to move into the 30- by 50-foot building to use in the restoration of vehicles.

Ms. Giunchigliani asked whether it is possible to transfer the paint booth from one agency to another. Mr. Trenoweth answered there would have to be some kind of exchange to transfer the booth from NDOT to the Division of Forestry. A suggestion was made by Ms. Giunchigliani to give $1 to NDOT in exchange for the booth. She opined approximately $40,000 could be generated from use of the booth by the inmates. She suggested Mr. Trenoweth contact NDOT with such a proposal.

Ms. Giunchigliani remarked the General Fund could be reduced if the division were able to generate funds from use of the paint booth. Mr. Trenoweth pointed out it will take nearly a year to reconstruct the building. Senator Jacobsen reiterated his position the building should be placed out at the camp rather than in town. Mr. Trenoweth noted the land in the industrial park is not in town.

Ms. Giunchigliani referred to maintenance unit M-200 and noted no figures have been received from the DOP. She asked what would happen to the crews if the Legislature fails to approve the expansion of Silver Springs Conservation Camp. Mr. Nolan answered the DOP population working in the Silver Springs camp renovation has averaged 145 to 160, and the average is projected to increase to 168, which is the capacity. He indicated the DOP is considering increasing the population at Silver Springs beyond that number.

Senator Jacobsen interjected the Silver Springs camp has a great potential for work. He noted there generally are more requests for jobs than can be fulfilled. He said some of the crews have worked on paid projects in California, at Lake Tahoe, in the Reno area, and in Storey County. He opined it would be desirable to have them work 2 or 3 days each week at the Veterans’ Cemetery. He proposed having members of the Legislature visit the camp to see how well-run and well-maintained it is.

Wildlife – Budget Page CNR-86 (Volume 3)

Budget Account 101-4452

Terry R. Crawforth, Administrator, Division of Wildlife, State Department of Conservation and Natural Resources, described the figures in The Executive Budget for the reserve as "frightening," but he indicated the problem has been resolved. He explained the updated base budget revenues were not included in the budget, and when those figures are included, the projected reserve for the end of the coming biennium is nearly $2 million.

Referring to the request for a Program Assistant I in maintenance module M-200, Senator Jacobsen asked for information regarding the Henderson registration and titling office. Mr. Crawforth said information was provided detailing the amount of traffic in that office since it opened. He reminded the committee members it was established as a satellite office for boat registration. He said more than 7,000 documents have been processed there, and it has taken in revenues in excess of $152,000.

Mr. Crawforth said the division is requesting an additional position in Boulder City based on increases in boating activity in southern Nevada and on the desire to enhance boater-safety education. He explained the Game Warden II position will be assigned to education programs. He noted information on the increase in boat registrations was provided to the committee, showing growth at 3 to 5 percent for a number of years. He noted that impacts the amount of gasoline fuel tax used to supply the boating program. He pointed out Lake Mead becomes the second-largest city in Nevada on nearly any weekend of the year.

Senator Jacobsen asked whether the position must be classified as a warden. Mr. Crawforth answered it does.

Senator Jacobsen asked Mr. Crawforth to address the items recommended in Module E-400. He stated the committee lacks backup figures to determine whether those costs are justified. Mr. Crawforth responded that in addition to the request for new positions and support under enhancement unit E-400, the division has requested funds to implement the agency’s strategic plan. Personnel have been requested to develop an operational plan and to submit budgets accordingly. Those projects are reflected through a variety of general ledger entries in the state system, including additional expenditures in all categories.

Mr. Crawforth stated there have been requests for inflationary increases in such expenditure items as fish food. He explained last year $174,000 was spend for fish food for trout in the four state fish hatcheries. He said the division is still responding to the drought as far as fish production, which occurs in a 2-year cycle. He noted there has been an increase in the price of fish food which he attributed to the increase in the price of grain.

Mr. Marvel asked whether terminal annual and sick leave had been budgeted in the past. Mr. Crawforth responded that was correct for the most part, and increases have been requested to cover those payments. He explained the request is being made because most of the members of the division’s workforce are approaching 30 years of service, and it is anticipated there will be 12 retirements each year for the next biennium.

Mr. Nolan interjected that as a rule the Budget Division does not budget for terminal annual leave, and the agency generally covers it from its available funds. He said discussions in the past have indicated the wildlife division should have a reserve sufficient to cover salary increases and terminal annual leaves. He reported the matter was discussed during preparation of the budget, but because of the number of people becoming eligible for leave over the next biennium, the Budget Division determined it would be best to set aside an authority to make the funds available.

Mr. Marvel asked for an explanation of the $250,000 listed under Contractual Services. Mr. Crawforth replied a license and inventory system is run on the state’s mainframe, and the system consists primarily of a hardcopy batch report from licensing agents. He said the system is very old. Mr. Marvel interjected the system was only supposed to cost about $60,000. He asked how much it has actually cost to date. Mr. Crawforth replied, "I don’t want to know." Mr. Marvel stated he would like to know.

Mr. Crawforth said there are many new systems available, and the Division of Wildlife would like to implement one of them as a new licensing system for the division. He pointed out the old system has been in use for over 40 years. He said the figures proposed are based upon those from other states for which several contractors have developed licensing systems.

Senator Neal asked whether terminal annual leave and sick leave should be included as part of the fringe benefits. Mr. Crawforth answered, "It is included in the fringe benefit." Senator Neal asked why it is set out separately if it is included in the fringe benefits. Mr. Nolan responded the funds in decision unit E-400 are to pay the terminal annual and sick leave. He explained, "Generally speaking, it has been the policy of the state not to budget for those items. However, if you look at the amount anticipated, it’s a very significant amount." He noted the wildlife division will be greatly impacted if 30 percent of the staff retires over the next biennium. He asserted the Budget Division would be negligent if it failed to identify such a potential impact on the budget.

Senator Neal asked how much may be paid to a retiring employee over and above the fringe benefits. Mr. Nolan explained that when an employee retires, the state pays the balance of sick leave, pursuant to the statutes. He said 240 hours are deducted, and the state pays the difference according to the amount of time accrued up to a maximum of $10,000. He said all "comp" time accrued by the employee is paid, as well as all annual leave accrued to date, plus the fringe benefits.

Senator Neal opined that as long as there is the authority to pay those expenses, they should be included in the budget. He wondered what happens if there are insufficient funds. Mr. Crawforth responded the agency must in that case request funds from the IFC. He suggested the wildlife division is different from other state agencies because the division often hires people in their early 20s, right out of college. He noted that after 30 years all those who were hired during the late 1960s and early 1970s are reaching retirement age. He said six employees have announced they will retire this summer. Mr. Crawforth said the division pays an average of $12,000 to each employee in separation costs. He noted the costs can be absorbed through vacancy savings when there are only one or two retirees in a year, but it was deemed wise to budget for the large number about to enter retirement.

Senator Neal asked how many hours of sick leave can be carried over. Mr. Crawforth said all sick leave can be carried over, which is one reason the division feels a need to budget for those retiring.

In response to a question from Ms. Giunchigliani, Mr. Crawforth said eight people retired from the division over the last biennium at a cost of approximately $35,000 in each year. Ms. Giunchigliani suggested it may not be an appropriate time to start budgeting for "those types of leave," given the shortfall this year. She acknowledged it may be better for the agency to return to IFC for funds, because the division will have to hire new people, but at a lower cost, resulting in some savings.

Senator Neal suggested the employee will have a vested right to those funds if it is permissible to carry over the hours, and the funds should be there. Otherwise, he said, the person retiring could sue the state. Ms. Giunchigliani responded not a single agency budgets for retirees, but all have been paid. She agreed it may be a proper policy to put those expenses into the budget, but at this time it may not be appropriate.

Senator Jacobsen suggested the problem be referred back to the parent committees through the staff. Mr. Crawforth interjected the Division of Wildlife is different in that it is user-funded, and thus vacancy savings do not impact the state’s General Fund. He asserted, "It’s a different situation from that perspective, also, and I think that’s why we were able to get the Governor’s budget to support us budgeting that in addition."

Senator Jacobsen requested that Mr. Crawforth provide additional support for the items requested under decision unit E-400. Mr. Crawforth said he would be glad to do so.

Senator Jacobsen asked Mr. Crawforth to explain the funding requested in Module E-400 for printing. Mr. Crawforth answered it is handled through the state printer.

In reply to another question by Senator Jacobsen, Mr. Crawforth told the committee the Wildlife Technician II requested under decision unit E-405 will become part of the wildlife management system if the division acquires Carson Lake. He added there also will be needs for water regulation, road and structure maintenance, and assignment of the employee to perform some work for the Humboldt wildlife management area and between Fallon and Lovelock.

Senator Neal asked whether the person is needed this biennium. Mr. Crawforth replied the division is hopeful it will acquire Carson Lake very soon. He reported the division has acquired water for Carson Lake in the Lahontan Valley, and most of the paperwork has been completed to accomplish the transfer from the federal government. He explained the division is operating the lake on a 3-year agreement with the Truckee-Carson Irrigation District on a temporary transfer from the Bureau of Reclamation. He said work is already being performed at the lake.

Senator Jacobsen asked what will happen when the Tahoe bond funds are exhausted, the funds that support 25 percent of the Fisheries Biologist II position requested under decision unit E-410 to work on the Environmental Improvement Program in the Lake Tahoe Basin. Mr. Crawforth replied the wildlife division plans to develop a scope of work at the fisheries in the Lake Tahoe Basin. He acknowledged there is a biologist stationed in Carson City who has responsibility for the upper Carson River and upper Walker River systems and Lake Tahoe. He said that position would be enhanced by a new position at Lake Tahoe as long as funding is available.

Mr. Marvel asked whether the position is dependent upon the Tahoe bond funds. Mr. Crawforth responded the division provides three-quarters of the expenses through the federal Sport Fish and Wildlife Restoration Fund. Mr. Nolan stated that position is related to gas pollution and the Environmental Impact Program (EIP). He noted the Governor was not going to fund the position, but due to the effort and importance of the EIP, it was decided to use the bond interest as matching funds. Without matching funds, which enable the wildlife division to utilize federal funds, the position would not be possible, he said.

Mr. Marvel voiced concern that during the next budget cycle the position will not be part of the base budget and will be treated as an enhancement. Mr. Nolan indicated that would be the case should the Legislature so desire.

Senator Jacobsen wanted to know how many new boats are being requested, the price of each, where they will be located, and what purpose they will serve. Mr. Crawforth replied boats are purchased out of two accounts. He explained the boats in the wildlife division account are used for work in the fisheries and airboats are used for waterfowl work. He said the patrol boats used by wardens on major lakes are purchased from the Wildlife Boating Program, budget account 101-4456. He said the boats vary from canoes to airboats to 20-foot fiberglass boats with 75 hp motors. He offered to provide more information. Senator Jacobsen indicated he would like the information for the record.

Senator Jacobsen observed there are often disabled pieces of equipment, such as tractors, graders, and others, sitting in Yerington. He asked what new equipment is requested under decision unit E-710. Mr. Crawforth agreed there is a lot of old equipment, much of which is military surplus acquired over the years that was nearly unusable. He agreed nobody wants it and asserted the equipment should be sold for scrap. He said there is need in many wildlife management areas to upgrade equipment as the old military surplus equipment has not been satisfactory. He explained the equipment is to be used for regular maintenance projects, not for construction. He noted the division uses much of the equipment for farming and maintaining ditches. The equipment is high-maintenance, and some of it is no longer safe for people to operate. He stated the division would like to purchase three pieces of heavy equipment which the agency characterizes as "magilla-digger thingies."

Mr. Crawforth explained the agency will use only federal funds to purchase some of the equipment. He stated some of the land near Yerington at the Mason Valley ranch was purchased through bonds. That land can be used as the state’s match, he said, making the resultant purchase of heavy equipment for the Mason Valley Wildlife Management Area totally federally funded.

Mr. Marvel asked what the unobligated reserve will be. Mr. Crawforth replied it should be $2,157,000 at the end of this biennium.

Senator Jacobsen suggested Mr. Crawforth provide the committee with a list of the equipment and the age of each piece. The senator explained that will give the legislators a better basis to establish a policy regarding replacement of equipment. Mr. Crawforth said he could provide a list for all the vehicles and equipment. He noted much of the equipment was first acquired in 1952.

Wildlife Obligated Reserve – Budget Page CNR-98 (Volume 3)

Budget Account 101-4458

Senator Jacobsen indicated the main concern is the elimination of a negative ending balance. Mr. Nolan responded the Budget Division failed to update some of the base revenue for the Office of the State Treasurer’s interest and gifts and donations. He said when those figures were factored back in it provided a positive balance, projected to total $71,191 at the end of the year. Mr. Nolan pointed out if the authority for gifts and donations is not realized, the expenses will not be incurred.

Wildlife Boating Program – Budget Page CNR-103 (Volume 3)

Budget Account 101-4456

Senator Jacobsen asked for a description of a Boston Whaler, which Mr. Crawforth gave. Mr. Crawforth said the division has for a number of years used the Boston Whaler brand primarily for patrol boats as well as other activities. He asserted they are the highest quality boat, with a 7-year hull guarantee, and they withstand very vigorous activity encountered in search and rescue operations. He added Boston Whaler makes a line of boats specifically for law enforcement work. He said there is a need to replace one or two boats each year.

Senator Neal asked where the boats are stored when not in use. Mr. Crawforth replied the boats are usually stored at one of the government docks such as those operated by the National Park Service at Lake Mead, or in slips rented from marinas. He said the boats are generally in the water and ready for emergency operations.

Mr. Crawforth said maintenance on the boats is performed by mechanics at the marinas, and frequently the boats are taken by trailer to Boulder City for hull cleaning and major maintenance. He said the maintenance is performed by purchase order on an as-needed basis by various boatworks in the area.

Senator Neal wanted to know whether the boats can be transported from one area of the state to another. Mr. Crawforth replied the division has trailers for the boats, but generally the boats are purchased for specific needs for specific bodies of water and are kept where they are. As an example, he said there are five styles of boats used on Lake Mead alone, depending upon working conditions. Conversely, in the Ruby Marshes, a canoe is used by the warden to patrol.

Senator Neal noted the use of Lake Mead increases in the spring, so there should not be the same number in use in winter. Mr. Crawforth agreed this is so but noted that in winter there are some boaters. He estimated there are five patrol boats at Lake Mead, a fisheries boat, and a specialized barge for planting fish and doing fisheries research. He said during weekends all five patrol boats will be in service during the winter. Mr. Crawforth told Senator Neal there is a small patrol boat at Wildhorse Reservoir and another at the South Fork Dam which are also used for fisheries work. Senator Neal requested a list of the lakes that are actually patrolled and the placement and number of boats.

Ms. Giunchigliani asked whether there is a special replacement policy for boats similar to the policy of replacing vehicles at 80,000 miles. Mr. Crawforth replied the boats have hour meters, and they are replaced according to the number of hours. He explained that even with proper maintenance the hulls can get stress fractures, and the gelcoat can go bad. He stated most patrol boats go through three motors, because an outboard motor becomes unreliable after 3,000 hours. The boats are replaced at about 9,000 hours.

Mr. Marvel asked how many driving-under-the-influence (DUI) arrests are made each year. Mr. Crawforth responded the number has been gradually increasing, and approximately 50 to 60 DUI arrests are made each year. He acknowledged that consumes a major portion of the boating program activities. He stated the division’s people go through the same training with the same equipment as other law enforcement personnel to keep the laws for operation of boats the same as those for operation of vehicles.

Senator Jacobsen asked what type of boat is kept at Zephyr Cove. Mr. Crawforth said a 2-cycle outboard Boston Whaler was just replaced with a new 4-cycle engine to bring it into compliance with the new regulations for Lake Tahoe. He noted it is a very big boat to perform search and rescue in rough water on such a large body of water.

State Parks – Budget Page CNR-113 (Volume 3)

Budget Account 101-4162

Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources, offered to address concerns regarding "the carryover."

Mr. Marvel asked how much it would cost to provide free access to parks. Mr. Perock replied 50 percent of the funding for parks is derived from the General Fund, and motor boat fuel taxes pay approximately 25 percent. He acknowledged there are some other revenues but said the user fees provide from 21 to 24 percent. He said an audit performed by the LCB a few years ago indicated the revenues from fees represented 17 percent, and in the current fiscal year fees appear to represent about 24 percent of revenues. He estimated the General Fund appropriation would have to be raised by another 25 percent of the cost for parks if access were provided free of charge.

Mr. Marvel reiterated there is a feeling among some legislators that parks should be free to the citizens. Mr. Perock replied many city and county parks are open free of charge but state parks operate under different rules, especially those parks used for camping.

Ms. Giunchigliani suggested the list of unfinished park improvements is incomplete and asked for an update on carryovers. Mr. Perock pointed out The Executive Budget includes no new capital improvements for parks, but there are some ongoing projects. Ms. Giunchigliani asked whether legislation would be required to roll over some of the projects. Mr. Perock responded that the division has presented capital improvement projects (CIPs) in past bienniums through a bill giving authority.

Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, distributed a chart of proposed CIPs (Exhibit I) dependent upon carryover funds. He said the CIPs have been included in budget accounts 462-4164 and 462-4165 in past bienniums and those funds expire at the end of this fiscal year. Because the construction will not be complete by then, he indicated, legislation will be needed to carry over those funds.

Mr. Weaver noted that in the past legislation for carryover funds has been associated with new proposals for park improvements. He suggested that because no park improvements budget is proposed for the next biennium, legislation be added to the operating budget.

Ms. Giunchigliani asked whether a module should be added to track the carryover improvement budget. Jeanne L. Botts, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, indicated the extension could be included at the end of the General Appropriations Act if the desire is to extend the reversionary date on the one-shot appropriations which were distributed through various other bills last session. She explained an amendment is ordinarily added to the park CIP bill.

Ms. Giunchigliani surmised there would ordinarily have been a total sum proposed for park improvements, but due to budget constraints there is none. Mr. Perock said no overall figure was proposed but he said a list of priorities was submitted in increments costing approximately $250,000 each. He estimated there is a $30 million backlog of major maintenance projects and said there is a master plan for all the parks which would add another $70 million.

Ms. Giunchigliani reported a suggestion was made during an elections committee meeting that parks tie directly into any Nevada promotions as a tourism and recreational state, and perhaps room tax should be used as a potential revenue source for parks. She acknowledged that has not been considered for many years but said the tie-in is natural. She asserted the rural counties would benefit from promotion of parks for tourism, and the matter should be considered. She added parks provide recreation to keep children off the streets.

Mr. Marvel agreed with Ms. Giunchigliani. He commented the Division of State Parks generally is the first to suffer whenever the budget must be cut. He concurred the room tax should be considered for diversification of tourism. He wondered whether there may be too many parks. Mr. Perock responded a study made in 1992 indicated parks are major elements for tourism. He commented that in Texas, parks, tourism, and wildlife are tied together. He commented the division serves as an ambassador to show off some of the "best resources of our state" for tourists. He declared there are opportunities for new parks which are reviewed from time to time as part of his charge to assess properties with significant scientific, recreational, and cultural values.

Mr. Marvel warned, "If we get spread too thin then we can’t take care of what we have." He opined the state should concentrate on parks already in existence before considering acquisition of new park lands. He reiterated his agreement that other sources of funding should be contemplated for the park system.

Senator Jacobsen suggested a letter of intent be presented to the respective committees indicating those concerns. Mrs. Chowning echoed support for the proposal. She declared parks have played a very important role in her family’s life, and parks are important for tourism. She supported the letter of intent as a method of promoting action to improve the park system.

Mr. Weaver pointed out there is a project listed on the second page of his chart (Exhibit I) to expand parking at the Valley Fire State Park. He admitted that is a new project, not a carryover project. He said the division proposes to use funding left over from other projects that are complete to apply as a match for a federal grant. He declared the parking at Valley Fire State Park is needed desperately.

James W. Baetge, Executive Director, Tahoe Regional Planning Agency, came forward to testify.

Senator Jacobsen inquired about the action in California regarding the 3 percent cost of living adjustment (COLA). Mr. Baetge responded budget hearings on the matter took place in California earlier in the week. He stated the current cycle is running according to the budget and it is flowing quite smoothly in California.

Mr. Baetge asked Jerry Wells, Assistant Director, Tahoe Regional Planning Agency, to comment on the 3 percent issue. Mr. Wells said there are two items to discuss, the first having to do with the baseline funding between the two states which does relate to the cost of living adjustment issue.

Mr. Wells reported California had not really decided on whether or not it was going to grant a COLA for employees at the beginning of the fiscal year. As a result, he said, when the Governor of Nevada was preparing his budget this year, the match for a COLA was not included.

Mr. Wells stated California has now decided to grant that COLA to its employees, and the Tahoe Regional Planning Agency (TRPA) recommends that the line item for salaries be increased from $17,756 to $33,000. He noted there has been a discrepancy in the one-third/two-thirds match for per diem expenses for the governing board members from Nevada for some years, and TRPA recommends reducing that from $4,000 to $3,750 to bring the two states into balance. He pointed out the net change would add $14,994 for the two budgets.

Mr. Wells said the other issue has to do with enhancements to cover a salary comparability adjustment. Again, he said, the original request was submitted on a one-third/two-thirds basis, approximately $149,000 from California and $74,700 from Nevada. He noted that included a merit step and benefit costs, in addition to an additional 3 percent COLA, should the two states grant those for their employees.

Mr. Wells indicated the Governor’s recommendation for Nevada totals $20,610 at the moment, including funding for the merit steps and benefit increases, but not the COLA nor the salary comparability originally requested. He stated the California Governor’s recommendation is for $130,764 to cover the cost of living adjustment, the salary comparability adjustment, and related benefit cost increases. He pointed out the California budget does not fund merit steps. He averred the dilemma lies in Nevada agreeing to fund the merit steps but not the comparability adjustment.

Mr. Wells provided some background and offered a solution. He pointed out that in the previous biennium Nevada granted a request for a salary comparability adjustment, but because California did not agree to it, approximately $42,000 of the money which Nevada appropriated will be reverted at the end of this fiscal year. He explained that is why the agency is making the request again and also because California is supporting that request.

According to Mr. Wells, the request would increase the Governor’s recommendation from the $20,610 for the enhancement to $41,453. He pointed out the $20,843 increase, with the exception of the COLA, would actually bring the two budgets in sync with each other and the total additional funding would be $35,837 for Nevada. He pointed out that money would more be offset by the $42,000 reversion to Nevada at the end of the fiscal year. He reiterated California has approved a cost of living match, should Nevada be able to provide one.

Mr. Marvel asked whether the $42,000 reversion had been included in the Governor’s budget. Mike Nolan, Principal Budget Analyst, Budget Division, Department of Administration, responded he did not believe so since the administration just became aware of the figure within the last week to 10 days.

Mr. Marvel asked, "Has California written that check yet?" Mr. Nolan replied, "No. That’s the problem we usually have."

Senator Jacobsen remarked there are a lot of unanswered questions. He added one of his main concerns is what will happen when funding from pollution control is no longer available. Mr. Nolan responded the pollution control money for this biennium was intended to be a short-term solution to the General Fund shortfall. He opined it probably should be included in a decision unit. He indicated a bill draft request (BDR) has been submitted that lists priority funding for various agencies out of pollution money.

Mr. Nolan noted there may be from $3.5 million to $1.6 million left at the end of the biennium depending on grants and a number of other variables.

Mr. Nolan reported Ms. Wilcox reminded him the Division of State Lands has proposed to carry-forward remaining funds from a one-shot appropriation for the Geographic Information System (GIS) database that State Lands is putting in. The contractor will not have all the work totally completed by the end of the fiscal year. Mr. Nolan stated there is a need to extend the date on that appropriation to the end of FY 2000. He noted Ms. Wilcox will send over a letter with the request and supporting documentation.

There being no further business to come before the committee, Senator Jacobsen adjourned the meeting at 11:15 a.m.

RESPECTFULLY SUBMITTED:

Judy Jacobs,

Committee Secretary

APPROVED BY:

Senator Lawrence E. Jacobsen

DATE:

Christina R. Giunchigliani

DATE: