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 Tuesday, March 30, 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:

Gary Ghiggeri, Principal Deputy Fiscal Analyst

Debbra King, Program Analyst

Jim Rodriguez, Program Analyst

Johnnie L. Willis, Committee Secretary

OTHERS PRESENT:

Ed Gobel, Lobbyist, Council of Nevada Veterans Organizations

Carol English, Principal Budget Analyst, Budget Division, Department of Administration

Sonja Pack, Business Owner

Senator Jacobsen called Charles G. Abbott, Executive Director, Office of Executive Director for Veteran Affairs, Office of the Military, to testify on budget account 101-2561. The senator indicated there were a number of questions regarding this budget account and expressed the hope that Mr. Abbott could answer the subcommittee’s questions regarding construction of the veterans home.

MIL, Veterans Home Account – Budget Page MILITARY-16 (Volume 3)

Budget Account 101-2561.

Mr. Abbott stated the Nevada Veterans Home is a skilled nursing facility established specifically for veterans disabled by age, disease, "or otherwise," who because of such disabilities are incapable of earning a living or caring for themselves. He provided several handouts to the committee which are shown in Exhibit C (Original is on file in the Research Library.).

Mr. Abbott explained the home will be a single-story, 180-bed facility located in Boulder City. He said it will be built to nursing home specifications. Mr. Abbott stated that 24 of the beds will be dedicated to Alzheimer/dementia patients. He noted the home will provide the same basic services provided by other nursing care facilities in the community. He said patients admitted to the home must be honorably separated veterans with an other-than-dishonorable discharge, and will be in need of skilled nursing home care certified by proper medical authority. Priority must be given to Nevada veterans, and priority will be given to veterans who have had war-time service.

Mr. Abbott replied that in response to a query from Senator Neal and the results of a recent survey, the agency is requesting to increase the salary for the two unclassified positions and to upgrade the Administrative Service Officer’s position. He said that when the agency’s figures were reviewed with the budget office a possible shortfall was identified, which could result from the phasing-in of start-up revenue and utilizing Medicaid revenue as an offset against the General Fund. Mr. Abbott maintained the amended figures have been corrected, but the figures require the agency to accelerate filling of the home to the rate of four or five veterans a day.

Mr. Abbott said that as indicated before, an essential part of making the home work will be to fill it as fast as possible and to keep it occupied. He noted the Nevada Health Division has indicated this is a reasonable goal considering the client-pool of veterans eligible for the home. He said that to assure the accelerated filling of the home happens the agency is requesting to hire two social workers in May 2000 to prescreen eligible veterans.

Mr. Abbott explained the project was opened for bids and the bid selection has been sent to the U.S. Department of Veteran Affairs for the final grant approval. He indicated that when the final grant is approved for the Nevada Veterans Home the construction contract will be awarded, and construction could start as early as May 1999. He said it should take about a year to build the home, which means the construction could be completed by May 2000. He stated the target date for opening is July 2000.

Mrs. Chowning stated the budget proposal does not show any performance indicators and wondered why that was so. Mr. Abbott responded that in the business plan the performance indicators summary stated that the indicators would be listed in four categories. He said the performance indicators focus on three issues: (1) occupancy, (2) cost recovery, and (3) economy of operation.

Mr. Abbott explained the facility will be constructed to operate at a 90 percent or higher occupancy rate. He said less than a 90 percent occupancy rate would result in a loss of manhours and a higher cost per patient day. Mr. Abbott noted the national average of such facilities is around 85 percent, but the agency feels it must keeps its occupancy rate at around 90 to 95 percent.

Mr. Abbott stated cost recovery is also a critical performance indicator. He said third-party collections will comprise about a third of the annual operating costs, and failure to obtain these collections would increase requests for General Fund revenues.

Mr. Abbott said the economy of operation is the measure of the per-patient-day costs. He noted there was no figures for that because the facility is not yet operating.

Mrs. Chowning requested Mr. Abbott to work with the Legislative Counsel Bureau staff to provide performance indicators regarding efficiency of the operation for the next legislative session. She said there is a need to know whether there are complaints, and how long it takes to resolve those complaints. The assemblywoman also requested a report showing how the federal dollars are utilized and what the staff-to-patient ratio will be. She stated these kinds of indicators will help the Legislature know how well the home is being operated.

Senator Jacobsen stated some of the questions are premature and expressed the opinion they may be answered after the facility is open. Mrs. Chowning indicated she understood the questions were premature, but wished to set some guidelines for the facility to work with to present to the next legislative session.

Senator Jacobsen asserted there should be regular reports to the Interim Finance Committee (IFC) on the progress of this facility. He remarked this is a new experience for the state and the Legislature will have to make a few major decisions about how the facility will be run, such as whether it will be privatized or continued as a state facility.

Ms. Giunchigliani inquired whether "quite a few other" states have private entities operated the state-funded veterans homes. Mr. Abbott replied that about 16 percent of the nation’s veteran homes are privatized. Ms. Giunchigliani asked, "If the facilities were privatized in the beginning, would there be any blocks to the state taking over the operation in the future?" Mr. Abbott replied the budget that is being presented is based on a state-operated facility rather than a privately operated facility.

Ms. Giunchigliani asked whether there were cost comparisons between the different operation methods. Mr. Abbott responded the veterans home has information that documents the cost per patient day. He inquired whether Ms. Giunchigliani was referring to bottom-line cost to the state as a comparison between the two operating methods. Ms. Giunchigliani replied yes. Mr. Abbott replied the cost per patient day varies greatly. He said it would be hard to develop a generalization. He indicated the privately run homes tend to be less expensive than state-run facilities. Mr. Abbot said the cost to the state is a major factor. He explained this budget would allow the Legislature to privatize, but the project is at a point where a decision has to be made one way or the other.

Ms. Giunchigliani inquired whether there were any complaints from veterans regarding which direction the state may go in the decision whether to privatize or not. Mr. Abbott answered the majority of the veterans he has spoken with want this to be a state-run facility. Ms. Giunchigliani asked what reasons the veterans cite for their preference for a state-run facility. Mr. Abbott replied the veterans believe a state-run facility would allow them to have more control over the operation of the home, interaction with the patients who are in the home, and more opportunity to be volunteers in the home.

Senator Neal asked how much of an increase in salaries for the veterans home was being requested. Mr. Abbott replied the salary with benefits for the administrator is about $68,000. He said the budgeted amount originally submitted was $67,000, so the difference is about $1,000.

Ed Gobel, Lobbyist, President, Council of Nevada Veterans Organizations, stated he wished to speak regarding better care for the state’s veterans. He explained that a mistake of $1.1 million to $1.7 million occurred in the calculations as a result of the opening being delayed from January to July.

Mr. Gobel pointed out that in The Executive Budget the federal reimbursable per diem rate was calculated at $43.92 but has now been increased to $50.55. He said the other calculation error was in regard to accelerating the patient admissions to 3 or 4 a week. He said the original calculation was to admit 15 new patients on the first of the month, which would have resulted in lower amounts of per diem per-patient-day (PPD) reimbursement from the Veterans Administration (VA).

Mr. Gobel stated there is no provision in the current budget for Medicare, only for Medicaid, and no calculation for aids or attendants.

Mr. Gobel said veterans are paying a large portion of the cost, which was not originally anticipated, because only those veterans who can afford to enter the veterans home will be admitted. He said this policy as he understands it will exclude many of the veterans.

Mr. Gobel emphasized there have been no fixed decisions made regarding the types of care that will be provided in the veterans home. He stated there are many different types of care.

Mr. Gobel said the reason for the change in the per diem rate is that the VA has requested an increase for per diem from the federal government and the state needs to plan for those changes. He stated Congress has not passed this allocation yet, but the Nevada Veterans Home needs to be prepared for the eventuality of the request passing.

Mr. Gobel stated the current actual PPDs are now being calculated at 4 to 5 admittances a day, which is $50.55 PPD. He indicated he was concerned about using that number in the calculations because the request has not yet been granted by the Congress. He stated the veterans home does not want to appropriate funds that could be used elsewhere.

Mr. Gobel noted that another area of concern he had was the use of a budget that plans for a 90 to 100 percent occupancy when the national average is only 85 percent. He said that if 85 percent is all that is achieved then the budget is going to have shortfalls, and the agency will have to look elsewhere for funding to cover costs. He stated that if the budget is calculated at 100 percent, as it is now, there will be a $190,000 shortfall from the VA in per diem even using the $50.55 figure, and still the majority of veterans cannot afford this care.

Mr. Gobel said that in terms of solutions to the above problems there are a number of remedies that could be pursued. He said the first solution would be to obtain some expert advice. He stated he felt that expertise could be gained through privatization. He noted other states including Oregon, have been privatized from the beginning.

Mr. Gobel said another privatization item that should be considered is the cost of aids and attendants. He stated the costs of the aid and attendance program have not been considered in the calculations for the budget and should be. He said recruitment or medical certification costs have also not been addressed. He pointed out some of the private organizations have training programs to certify staff on the job.

Mr. Gobel stated the Council of Nevada Veterans Organizations has spoken with several of the major private companies, some with over 100 homes, and received estimates for privatization of the veterans home along with documentation regarding the success of some of the private homes run by the companies solicited for information. He noted most of those estimates are "a little wild" because these companies have not been to Nevada to assess the local needs and costs. Mr. Gobel said those estimates are at about $100 to $120 PPD. He noted those estimates includes such items as groundskeeping and janitorial services. He stated these estimates result in $5.4 million to $6.528 million versus the $8.226 million the Budget Division is estimating. Mr. Gobel claimed the veterans’ share and the state’s share would be significantly reduced. He said the high-end estimate would still be a savings of $1,698,461 and the low-end estimate is a savings of $2,786,461. He noted there are also indirect cost savings as well. Mr. Gobel asserted if the Budget Division’s estimate of $2.75 million is subtracted from the highest cost of $6.53 million, which is based on $120 PPD, there remains $3.75 million to $3.8 million for the state or the veterans to pay.

Mr. Gobel, addressing the issue of Medicare and veterans’ out-of-pocket costs, stated that even at the lowest end of the estimate, 10 percent of the total cost would be paid by Medicare. He stated if it is assumed the state would pay the $2.74 million that is currently in the budget for these items, there remains a $360,000 cost to be paid by veterans.

Mr. Gobel stated the next issue is payment of the cost for aids and attendants. He said that based on $40 PPD for the facility at 162-bed capacity, the estimate cost of aid and attendance is about $2,026,000, which would be a savings to the state if volunteers are used from the pool of qualified veterans. He noted that if this volunteer pool is used, patients would not be required to pay anything in this category and there would be a savings to the state. He said the budget discussions entail a pool of 450 people, but an "interest list" for such a pool of qualified aids and attendants has not been gathered. Mr. Gobel emphasized these and other such services should be arranged so the budget could be planned much more accurately.

Senator Neal inquired whether Mr. Gobel was suggesting the Legislature not take any action on this budget this session. Mr. Gobel responded no but said there was a need to obtain accurate figures, identify all possibilities, and possibly have some of the privatization companies testify before the Legislature. He said that at the very least the issue of being able to use Medicare versus Medicaid only for the nation’s veterans should be explored .

Senator Neal asked whether Mr. Gobel realized the Legislature was constrained to a 120-day session. Mr. Gobel replied yes and stated that all the figures and calculations could be presented to the legislators within 7 days.

Ms. Giunchigliani asked for clarification on the Medicare-versus-Medicaid issue and whether it was Mr. Gobel’s intent that the state subsidize the veterans who will need care in the home. Mr. Gobel replied, "No, Assemblywoman Giunchigliani. Right now from general appropriation there is included in this budget $2.74 million." He stated Medicare is a better alternative to subsidizing patients than is Medicaid. He explained there is more paperwork to accepting Medicare than to accepting Medicaid, but it would benefit the state to qualify as many people as possible on Medicare because this is additional revenue the state does not contribute to and it would require less of an investment on behalf of the state. He said this issue should be addressed whether or not the Legislature decides to privatize the home.

Ms. Giunchigliani stated it was her understanding the state wanted to populate the home with patients who do not require subsidizing from the state.

Senator Jacobsen said most of these questions and issues are being raised prematurely, as the veterans home is still in the planning stage.

Senator Neal stated it has been a long process to get the project to the present point and will take longer to complete.

Senator Jacobsen commented the first thing which needs to be accomplished is to build the home.

Mr. Abbott stated that because he has not been able to review the data presented to the subcommittee he could not give an analysis of it. However, there were several issues he wished to address. He said the VA per diem rate is determined annually by the U.S. Department of Veterans Affairs and is contained in The Executive Budget. He noted that amount has continually increased over the last few years and for the Fiscal Year (FY) 2000 it is expected to be $50.55. Mr. Abbott said although that amount has not been voted on, it is assumed the $50.55 will be the approved amount. He said the per diem amount may be even higher for FY 2001. However, he said, since that figure has not been voted on it has not been used in any of the computations for this budget. He stated that in developing the budget the veterans home used the "most likely scenario" for all of the computations. He noted the computations include everything from inflation factors to paper and supplies, and since there is no historical data to reference for running a skilled nursing home for this state the "best case scenario" was use for all calculations.

Mr. Abbott commented that regarding the patient occupancy rate, the agency reviewed several states programs and has ascertained that, yes, Nevada’s plan is an aggressive plan but it offers the best way to develop the revenue that is needed to run the home.

Mr. Abbott stated that as far as Mr. Gobel’s reference to Oregon’s privatized facilities, he felt the Legislature should carefully consider that option. He said with privatization the state lacks the ability to manage the home.

Mr. Abbott stated Utah was another state-privatized facility that was visited. He noted Utah had only one social worker to work with all the session issues, but that worker also has many other jobs to perform. He said the plan for Nevada is to hire two social workers before the home is opened.

Mr. Abbott said the waiting list for occupancy and for volunteers needs to be established.

Senator O'Donnell stated privatization may be in the best interest of the veterans, not in the best interest of the state. He said there must be a differentiation of the two objectives. The senator said that from the state’s perspective it may not be able to manage the home; however, the privatization firm will manage the home. He said that if privatization is cost-effective, and gives more treatment, more benefits, and more satisfaction to the veteran, then it should be considered. Mr. Abbott responded the agency will work with whatever the Legislature decides; however, the budget being presented was based on a state-operated facility.

Mr. Abbott explained that based on the experience of reviewing the different veterans homes, the general feeling was that even though the privatized ones probably operate at a lower cost there are also expenses that are incurred in the cost savings. He said some of the shortcomings of a private facility are the lack of ability to manage the administration of the home and the fact that veterans will be placed in a home that is run by "the lowest bidder," not necessarily by the best company available.

Senator O'Donnell said the federal government is awarding the state "x" amount of dollars for each veteran in the home; if the state government can run the home for less, then the veteran has more money for benefits. He stated that in his opinion if the facility is "ratcheted down" to a state-run facility it will be almost impossible to convert it to a private facility later. The senator suggested the Legislature review privatization now instead of trying to "unratchet" it later.

Senator Neal commented that speaking as a veteran and as a prospect for this home, he did not serve in a privatized army or a privatized air force. He emphasized it was government-operated.

Mr. Gobel stated that whether the home is privatized or state-operated, Medicare should be accepted as an option for payment. He emphasized this issue should be investigated.

Ms. Giunchigliani inquired whether Medicare would pay for long-term catastrophic care. Mr. Abbot replied it was never stated that Medicare would not be used for this home. He said, however, Medicare is unreliable and pays little of the cost of running this kind of facility. Mr. Abbott explained that to be eligible for Medicare, the patient must have been admitted to the hospital for 3 days; then the patient can be released to the nursing home. After the patient is released to the nursing home Medicare will pay for 10 days at full cost for that particular diagnosis. He said after that 10 days Medicare will pay for all but $94 of the patient’s care for up to 100 days. Mr. Abbott further explained that after the 100 days the patient would only be eligible for Medicare benefits if he or she were readmitted to the hospital and received another diagnosis.

Mr. Gobel noted it was stated in the minutes of the February 9, 1999 meeting of this subcommittee that the state would not accept Medicare for this facility. He said the first 20 to 21 days of Medicare coverage is paid at full cost, then it goes to 80 percent for the next 80 days. A patient does not have to come from a hospital but does have to be referred by a physician. Mr. Gobel indicated he was not a Medicare specialist but felt that Medicare would be a significant source of revenue depending on what level of care would be provided and what the total number of days would be. He stated Medicare will not cover all of the costs, but the amount that is provided for care is in addition to the amount received from the VA or other reimbursements. He said the Medicare coverage and the VA per diem and other reimbursement, if any, should cover the total costs of care received.

Mr. Abbott commented it had been mentioned that when the agency did its planning it ignored the matter of the cost for aid and attendance. He said he felt this information was incorrect. He explained part of the funding structure is that the VA will pay a certain portion, the state will pay a certain portion, and the patient will also pay a portion. Mr. Abbott said the Veterans Administration Aid and Attendance benefit is a benefit that is paid to the patient, not to the home. He explained the aid and attendance benefit is contributed to the income of the patient and will enable the patient to pay his or her share.

Mr. Abbott insisted it was his belief that he had not stated the facility would not consider Medicare as an income source. He stated emphatically, "I don’t believe that I have ever said that a veteran would not be able to come into this home if he is not able to pay his full share." He reiterated he had not said that to anyone or to any veterans organization, and he took exception to being accused of having done so.

Senator Jacobsen stated some of the questions that need to be answered are:

Senator Jacobsen stated these are some of the major issues that are still to be answered. He said it was too early in the project to answer some of these questions. He noted that as the project moves forward, these issues can be addressed.

James M. (Mike) Nolan, Principal Budget Analyst, Budget Division, Department of Administration, said the budget as laid out is very tenuous and everything has to happen as proposed or "there will be problems." He said the administration does not oppose privatization. He commented that based on his personal experience with privatization of prisons, the amount quoted on a preliminary request for proposal (RFP) will be totally different than what will be received at the end. Mr. Nolan said the end amount is usually higher. He explained the final PPD costs will not be known until the final RFP is submitted and the quotes are received. He stated this issue needs to be carefully reviewed before a decision is made.

Senator Jacobsen stated he agreed with Mr. Nolan’s observation. The senator requested Mr. Abbott to give the Legislature an updated report prior to the end of session and expressed the hope that such a report would give the legislators a better idea of what progress had been made.

Senator Jacobsen closed the testimony on the Nevada Veterans Home and opened the hearing on the budget for the Department of Motor Vehicles and Public Safety’s Project Genesis budget.

DMV, Project Genesis – Budget Page DMV-80 (Volume 3)

Budget Account 201-4739

Donna C. West, Project Manager for Project Genesis, Department of Motor Vehicles and Public Safety (DMV&PS), said she wished to present the proposed changes to DMV&PS’s budget structure. She explained these changes are needed in order to accommodate the proposed organizational realignment. She noted the pilot program began Phase B, which is the occupational and business licensing phase, on March 29, 1999, and is on schedule. She said the project is ready to begin testing transactions for business and occupational licenses.

Ms. West directed the subcommittee’s attention to page 2 on the presentation document titled "DMV&PS Motor Vehicles Branch: Budget Presentation March 30, 1999" (Exhibit D. She noted the "silo structure" in the picture, which was originally introduced to the legislators during the March 2, 1999, overview of the DMV&P budgets, is being used here to show the current structure of the budgets within the department. Ms. West indicated the pictures represent primarily the Driver’s License budget account, 201-4716, and the Registration budget account, 201-4718, and those accounts are represented by function.

Ms. West said page 3 of Exhibit D shows the proposed budget structure by function for the four proposed divisions for the next biennium.

Ms. West explained the Field Services Division is the face-to-face customer service facilities. She noted this division was created by the 1997 session of the Legislature.

Ms. West stated the department is now proposing to create the other three divisions shown on page 3 of Exhibit D. She said the proposed divisions will be the Central Services and Record Division, for the behind-the-scenes functions; the Compliance Enforcement Division, for enforcements and audits; and the Management Services and Programs Division, which will be the supporting structure for the department.

Ms. West, moving to page 4 of Exhibit D, said the department is proposing the following major budget accounts be created for each of the new divisions: Central Services and Record Division, budget account 201-4741; Field Services Division, budget account 201-4735 (which has already been created); Compliance Enforcement Division budget account 201-4740; and Management Services and Programs Division budget account 201-4742. She said that in working through the process of restructuring the budget, the department reviewed the existing budgets and arranged them according to the appropriate proposed divisions as represented on page 5 of Exhibit D. Ms. West said that for example, budget 4711, which is the records search section, is currently under the Administrative Services Division but would be placed under the proposed Central Services and Record Division because it performs the functions within that division. Ms. West indicated the current budget structure would be realigned as presented on page 5 of Exhibit D.

Ms. West directed the subcommittee’s attention to page 6 of Exhibit D and said the methodology used when deciding how to realign the budgets was based on a full-time equivalency (FTE) approach, which includes personnel and related costs. She said the department reviewed budgets 4716 and 4718 by line item to place expenses in the appropriate new budget accounts. She stated the only costs associated with the realignment are the reclassification of management-level positions, as determined by the Department of Personnel, which will have increased duties under the new system. Ms. West emphasized there is no request for additional staff or new equipment to accomplish the realignment besides that requested in the Project Genesis budget.

Ms. West noted that page 7 of Exhibit D is the "heart" of the activities the department has been performing to realign the staff into the new budget structure. She indicated the staff positions and the proposed rearrangement of those positions are represented on page 7 of Exhibit D. She explained the proposed changes on the chart that may not appear as straightforward transfers are:

Ms. West explained that on the organizational charts (Exhibit E. Original is on file in the Research Library.), the positions in green are the positions the DMV&PS and the Department of Personnel have identified as needing reclassification. The positions documented in blue represent no change in function or title. Ms. West said the positions represented in red are positions to be filled from future efficiencies in technology, although those efficiencies will not be realized until the next biennium. She noted the positions in black are positions discussed previously in budget presentations and are new positions the Governor recommended.

Ms. West said there are issues with Motor Vehicles performance indicators and measures. She said the indicators the Legislature have seen are output indicators, such as how may titles have been produced, how many customers have been served, and how many licensees were handled in the emissions program.

Ms. West explained that in Phase 1 of Project Genesis the DMV&PS identified hundreds of potential performance indicators. She said when the administrators for the proposed divisions were designated, the administrators reviewed those performance indicators and determined which ones would have the most impact on the department’s ability to determine its course and measure its performance. She said the administrators also decided which of the indicators were most measurable to ensure the data that is needed for these performance indicators is included in the development of the new system. Ms. West stated that where possible the DMV&PS is establishing baselines and that data collection is an ongoing activity.

Ms. West said that DMV&PS reviewed indicators that would allow it to measure effectiveness and efficiency in productivity, in quality, in timeliness, and in costs. She explained those indicators listed on pages 9 through 12 of Exhibit D are varied and will provide a great deal of information for the department’s self-evaluation process and for the Legislature to use as a measure of the DMV&PS’s effectiveness.

Ms. Giunchigliani asked what the impact would be and how quickly the Legislature could get a budget if the reorganization were not approved. Ms. West said the impact would be on Project Genesis because the development of the system has been based on an assumption there would be a reorganization.

Ms. Giunchigliani said:

The assemblywoman asked whether the department could cancel the initiation of the reorganization and revert to its original budget structure to focus on "fixing" Genesis. Ms. West replied the original budgets still exist.

Senator Neal commented he has 20-plus years of experience dealing with personnel problems, organization problems, reorganization problems, and the development of database systems. He stated that in examining the proposed changes it can be seen that the new budget accounts correspond to the whole reorganization. The senator said the proposed organization will be better operated and will produce more customer satisfaction than the present organization. He said that if the wrong questions are asked, then what should be occurring may be diverted and could create problems that need to be resolved. Senator Neal further remarked the subcommittee needs to review what the end product will be. He stated that when involved in technology system changes that need to be synchronized, the agency has to be allowed to work toward an end date in order for the people of the state to receive proper services. The senator asserted that in this kind of reorganization there will be complaints from individuals within that system concerning what is happening, but the agency’s management has to continue to move forward and create the reorganized system. He stated that if the Legislature listens to every person who calls with a problem there will be no end to the project.

Senator Jacobsen asked Ms. West to explain the responsibilities of each of the four new divisions, starting with the Management Services and Programs Division.

Ms. West said the purpose of the Management Services and Programs Division is to support the rest of the agency. She said DMV&PS wants to be a customer-service-focused organization. She explained, "One of the things that prevents [this] now is the day-to-day crises, the inability to plan strategically to carry out programs." She said the DMV&PS does not plan effectively, and in most cases it has not created project plans for events such as the implementation of legislation. Ms. West stated the Management Services and Programs Division would provide this service for not only implementing legislation but also for ongoing departmental improvement projects. She said the Management Services and Programs Division will also perform fiscal work for the Motor Vehicle branch for cohesiveness and coordination within Motor Vehicle on budgetary issues, purchasing, and personnel support.

Ms. West said the Central Services Division is the behind-the-scenes customer service area. She explained it is the production area for title production, license review, drivers’ suspensions and revocations, and insurance verification and suspensions. Ms. West said all record-keeping and data integrity is within Central Services. She stated all activities affecting the public that are performed behind the scenes are part of Central Services. Ms. West emphasized Central Services is important to the agency because it is where all the alternative services such as Internet transactions and telephone transactions will be located. She said it will also be the unit that monitors and produces the renewals performed at emissions-testing centers during Phase 3 of the project.

Senator Jacobsen inquired whether those employees will be cross-trained in case their services are needed at the front desk. Ms. West replied it is DMV&PS’s wish to accomplish cross-training. She said the agency has effectively cross-trained the front counter staff and has begun to cross-utilize that staff. She stated the department has realized that the staff needs to work together in production areas and be cross-trained to maintain consistent delivery in titles and renewals so the customers will have confidence in alternative services.

Mr. West explained the Compliance Enforcement Division is the bureau of enforcement, the investigative part of the agency, and includes the Motor Carrier section. She said the Motor Carrier section was brought on board because of its focus on auditing and compliance within the motor carrier industry. She said all the functions directed at working with businesses, such as auditing compliance, enforcing compliance, and motor carrier areas, were brought within one division.

Ms. West said the Field Services Division is the division of the agency that is most familiar to the public. She said it encompasses all of the branch offices throughout the state.

Senator Jacobsen asked whether the presented proposal is the final reorganization, or whether there were additional changes that needed to be made. Ms. West replied the agency met with the LCB staff the previous day and agreed upon a few final corrections that would provide the budget integrity and accountability, which the budget office, LCB staff, and the department feels is necessary to effectively manage the new organization.

Senator Neal commented the DMV&PS has presented the direction in which the agency wishes to go, how it plans to get there, and the standards by which it will be measured once it achieves the plan. He stated this is very important for the Legislature to understand. It was his opinion that it is not possible for the Legislature to micromanage the Department Motor Vehicle and Public Safety. He said the Legislature should set policy and it was his opinion the DMV&PS should be allowed to meet the projects scheduled completion date. Senator Neal stated the information presented by DMV&PS was the best information presented to the committees he has served on from any of the organizations making presentations. He further stated it is good information, it is useful information, and the agency is not trying to hide anything. He said the agency has the organizational structure defined with the changes proposed, and the new positions documented, and with comparisons of the old structure to the new. The senator commented that if the subcommittee agreed with the proposed organizational structure then it should let the agency complete its job and do what is necessary to get the system operational.

Senator Jacobsen stated this system is to benefit the public, and asked how it was determined where the staff would be distributed. Ms. West replied that when reviewing supervisory requirements for the Field Services Division during Phase 1 of the project, the department had to consider a Nevada Administrative Code regulation that recommended 6 to 8 employees to a supervisor, dependent upon the types of jobs performed. She said that as the department reviewed the types of jobs to be performed in the field, it decided a 10:1 ratio would be an appropriate team structure. She stated this ratio provides adequate supervision and allows the supervisor to hire personnel, conduct trainings and coachings, perform evaluations, and perform all the activities required of a supervisor. Ms. West said the department evaluated how the existing staffing structure worked. She explained the department did not reevaluate the staff for each facility for Project Genesis. What the department did was decide how many employees need to be focused on simple transactions, renewals, duplicates, changes, complex transactions, and business transactions based on the agency’s present level of activity.

Ms. West commented the focus of many positions will have to be reevaluated as the new system is initiated and used over time.

Senator Jacobsen inquired whether the department has enough upper level staff to supervise the diverse functions of the department. Ms. West responded the department has "flattened out the organization"; it has gone from seven layers to four layers. As the layers were reduced, the number of managers was increased. Ms. West said the managers under the new system will focus on a function area instead of on the many function areas the chiefs of the department have now.

Mrs. Chowning asked for a comparison between the current system and the proposed reorganization. She said it is important for the Legislature to understand where the personnel are being placed. The assemblywoman stated the Legislature needs to know whether the assigned tasks have been changed under the new system, and whether the current assigned tasks will continue to be performed if the staff has been assigned elsewhere or their positions have been terminated. She stated that, for example, in budget account 4690 there is a position that has been recommended to be eliminated. However, there has not been enough enforcement to monitor all of the body shops, auto wreckers, and similar businesses, and now it is recommended that positions be cut. Ms. West replied the department did not advocate increasing any of the staff; for example, the department did not reevaluate the staffing of budget 4690. She said what has been prepared for realignment is simply to reallocate the positions approved through The Executive Budget. She stated those positions were reallocated to the appropriate areas; for example, the positions in budget 4690 are investigative so were assigned to the Compliance Enforcement Division. She said the realignment did not address any of the staffing issues. Ms. West said the department could provide an updated chart showing where each position is in the present organization and where those positions will be placed when the department is reorganized.

Senator Neal requested Ms. West to explain how the Compliance Enforcement Division will operate after the reorganization. Ms. West responded the first page of Exhibit E is an overview showing the three units within the Compliance Enforcement Division. She said those units are the investigation unit in northern Nevada, the audit/operations unit, and the investigation unit in southern Nevada. She explained pages 2 through pages 4 of Exhibit E are the breakouts of the units and indicate by position number where the staff will be place under the reorganization.

Russell E. Benzler, Acting Assistant Chief, Registration/Title Bureau, Registration Division, Department of Motor Vehicle and Public Safety, explained the reduction in personnel in budget 4690 was not a Genesis reduction. He said the position removed from that budget was due to its being vacant for an extended amount of time. He noted that when a position is vacant for an extended period the Budget Division removes it from the agency.

Senator Neal, referring to Mrs. Chowning’s question about auto wreckers, body shops, and related businesses, asked where the enforcement problems would be addressed under the reorganization. Mr. Benzler replied those problems would be addressed in both the northern and southern regional investigative offices. He said under the present system there are two positions located in Las Vegas.

Senator Neal inquired on what part of the organizational chart those positions are listed. Mr. Benzler replied those positions would be under Investigations for either the north or the south. He said the position Mrs. Chowning spoke of is under Investigators Las Vegas and is Position No. 4690-0001.

Mrs. Chowning stated, "This is a problem." She pointed out there is only one person to investigate all the autobody shops, auto wreckers, and other such businesses throughout the state. She stated that one person was not able to accomplish the necessary investigations, and now it seems that position is no longer necessary. She expressed the opinion the department appears to be presenting the impression that all the enforcement duties will be performed when the duties have been folded into the Compliance Enforcement Division. The assemblywoman questioned the idea that everything will be "taken care of" with this reorganization. She asked how that can be when enforcement could not accomplish the tasks with the same personnel under the old organization. Mrs. Chowning stated, "It seems muddy." She declared that "in 2 years there better not be any complaints whatsoever, from anyone." Mr. Benzler responded the department has submitted a request to reinstate the position that was removed from Compliance Enforcement. He stated Mrs. Chowning is correct, that the extra enforcement position is necessary to perform the monitoring and enforcement of the kinds of businesses documented by the assemblywoman. He reiterated the department has requested the position be reinstated and that the chart reflects the Governor’s recommendations only.

Mrs. Chowning asked, "If the replacement of that position has been requested, where is it on the chart, and how does the Legislature know that?" She also asked how the legislators know whether those two positions are necessary to perform the duties if that position is not included in the department’s request. She said, "I was just told that it would be accomplished with [the Governor’s] recommendation on this ‘magic sheet’ here, but now we are being told that ‘No, there is justification,’ that Gee, those duties are necessary.’" Mr. West explained that when the organizational sheets are prepared the department is allowed to use only positions that are currently in The Executive Budget. She said if the department receives confirmation the position is to be reinstated, then the department will place it on the organizational charts. But when the charts were prepared the department did not know whether the justification for reinstatement was adequate or whether the position would be restored.

Mrs. Chowning requested the department provide one organizational chart based upon the Governor’s recommendation and one based on what is necessary to perform the department’s tasks. She said these charts are needed so the Legislature can make decisions as to what may or may not be needed. Ms. West replied the department could certainly do that.

Ms. Giunchigliani asked Mr. Benzler what the division could provide to the Legislature to make sure the budget records are kept separate. She pointed out the budgets have different funding sources. She stated it was her opinion that some of Mrs. Chowning’s concern was the loss of the division’s accountability. Mr. Benzler replied that at present he could not supply the requested information. He explained the personnel are being reassigned to the new budget accounts and will report within those assigned budget accounts. He stated there will be accountability.

Ms. Giunchigliani requested the budgeting personnel to provide line items for tracking the funding sources. She said there would be no way to track the funding if the accounts are all rolled together. Carol English, Principal Budget Analyst, Budget Division, Department of Administration, responded the reorganization is not destroying the integrity of the budgets that are self-supported. She said the budgets are being moved into divisions that reflect similar activities along functional lines. She noted the budget of the Emission Control Section remains separate. She said the "budget in full" is going into a new division; it is not being split and line items placed into separate divisions. Ms. Giunchigliani asked whether most of the positions will be staying in the Emission Control Section budget. Ms. English replied the only positions being moved are those that are changing functional responsibilities. She said the department is moving only a small number of positions. Ms. Giunchigliani remarked, "Then those positions should no longer be funded from the Emission Control Section budget." Ms. English replied that is correct; those positions are now addressing areas that are much broader in nature than just those in the Emission Control Section budget.

Ms. Giunchigliani asked whether the changes being made would cause a commensurate shortfall or whether a different budget number is to be used. Ms. English replied those positions will be moved into the budgets that address their functional areas. She said the areas of costs associated with each position to be moved will be allocated to the appropriate budget as those costs relate to the functions provided by the position. Ms. Giunchigliani asked whether the budget being presented reflects those cost allocations. Ms. English replied yes. Ms. Giunchigliani asked where the subcommittee would see that breakout or change. Ms. West directed the subcommittee’s attention to the organizational chart for the Management Services and Programs Division (Exhibit E), and explained that toward the center of the chart there is listed an Emission Control Program Manager and the four support staff for that office. She stated those positions are currently funded out of budget account 4722, but under the reorganization those positions will be cost-allocated out of that budget and into budget account 4742, the Management Services and Program Division’s budget.

Ms. Giunchigliani asked Ms. West whether the department has accepted any deliverables that have not been completely tested. Ms. West replied, "Without knowing what specific deliverables we are talking about testing, we have not accepted any deliverable without review." She stated deliverables are reviewed not only by the department’s staff, but also by the staff of The Department of Information Technology (DoIT).

Ms. Giunchigliani asked what "review" means. Ms. West replied that in the case of a written deliverable the document is read, comments are received from all the reviewers, the comments are provided to Deloitte and Touche, L.L.P., and then Deloitte provides a spreadsheet that represents its response to the comments. A response may be that a reviewer overlooked something or misunderstood something. Ms. West said that when there is an unresolved question, a review meeting is held, the reviewers then meet with the Deloitte staff, and the agency and Deloitte then go over those things in question. Ms. West stated the department is presently negotiating a small amount of paper documentation that requires adjustments.

Ms. Giunchigliani remarked, "So you are reviewing paper, but you have not actually tested." Ms. West replied the department is in the process of testing all deliverables. Ms. Giunchigliani inquired whether the department tests all deliverables then signs off on them; or whether instead all deliverables have been read, and some have not been tested, but the department has signed off on all of them. Ms. West replied that would depend on the type of delivery. Ms. Giunchigliani stated, "That may be the concern." She said there may be a type of deliverable that is expected so it was not tested, but was signed off on. Ms. West replied that situations may be behind the concern, but said she was not aware of any such situations. She emphasized that the department does not sign off on anything related to the application where a written deliverable represents a part of the application until it has gone through a review checklist, and staff attests that it "works as needed." She said it does not matter whether the project is receiving test scripts, or receiving program code, or completing a piece of the program testing, it is not signed off on until it has been tested.

Ms. Giunchigliani declared:

Senator Neal commented that for the record he did not know whether the last remarks were addressed to him or not. He said his objective was to share his experience in dealing with personnel and reorganizations of agencies. He noted that if the wrong information is asked for, then things will be delayed rather than expedited. The senator stated the point he was trying to convey to the subcommittee was that its members need to ask the right questions, not that questions should not be asked. He said the hope is that in asking questions the questions are the right ones and are directed toward achieving the purpose of the Legislature. Senator Neal stated all senators and assemblymen are elected to do the best job possible. However, he said as in many operations "that have a lot of people to participate," each legislator has his or her own area of expertise. He stated that his expertise is in the area of personnel, reorganizations, and developing database systems. The senator said he was trying to share that experience and he feels the Department of Motor Vehicle and Public Safety should be allowed to do the best job it can to reach its goal of providing the best service to the public. He reiterated he was not criticizing anyone for asking questions, he was trying to share information.

Senator Neal pointed out there is a lot of information being presented on the reorganization charts (Exhibit E). He said the budget accounts are listed clearly on those charts, and those accounts represent the individuals serving in the listed capacities. He said he understands when reviewing those listings that the department knows how the budget is being allocated. The senator pointed out that the department can "key up" those budget accounts and know what each individual is doing and where the funding is coming from for that individual. He reiterated the information presented by DMV&PS was the best information presented to the committees he has served on from any of the organizations making presentations. He repeated his earlier statement that the proposed reorganization is a good plan. He said the department will have a better grasp of what is happening in the various sections of the organization with this plan.

Senator Neal stated he was not trying to offend anyone, he was trying to share his experience. He said:

Senator Jacobsen commented that hopefully the legislators would "share in each other’s views."

Senator O'Donnell stated he wished to echo some of Senator Neal words. He stated:

Ms. West, referring to the performance indicator on page 11 of Exhibit D, noted the Central Services and Record Division is the department’s behind-the-scenes customer services and production division. She said that in this area the department is collecting a great deal of data and will continue to do so. Ms. West outlined the performance indicators on page 11 of Exhibit D.

Ms. West said the Management Services and Programs Division will be starting with "a clean slate." She stated that as a rule the DMV&PS has not collected data on its organizational effectiveness with program and project management; however, under the reorganized Management Services and Programs Division, DMV&PS will start collecting such data. Ms. West explained that historically the department has not established a working plan or timeline for most projects; for example, bills to be presented for legislative approval have not had a working plan and timeline established. She said the Management Services and Programs Division will be doing such project management in the future.

Ms. West outlined the performance indicators on page 12 of Exhibit D and said the department wants to know whether Project Genesis and the reorganization are saving the department money, and time, as well as improving the quality of service and the productivity of the agency.

Ms West indicated that at present the department does not measure the effectiveness, cost and timeliness of training issues, but the new Management Services and Programs Division will collect data to do so.

Ms. West stated the Management Services and Programs Division will measure the usage of the Phase 3 technologies; the impact on employee satisfaction and retention; and fiscal effectiveness related to cost savings and timeliness. She said that the agency reviews some of the technologies, employee satisfaction and retention and fiscal effectiveness, but does not track them on a regular basis. She commented the department will be able to track employee satisfaction and retention, fiscal effectiveness, and other indicators with the reorganization by putting all similar functions within the appropriate divisions.

Senator Jacobsen asked whether there were numbers related to these performance indicators and requested the department supply the legislators with a current report now and another report near the end of session to give the Legislature an idea of how things are working. Ms. West responded DMV&PS is producing a report on the indicators she documented earlier in her testimony, and the department has agreed to project what the department’s goals are going to be. She said that, for example, the employee turnover rate is not currently tracked within the department, but the department’s administrators can determine what the goal will be. Ms. West said the department could provide a projection of what it is trying to achieve, and the Legislature could use that to measure the data DMV&PS will collect to evaluate how effectively the department is performing after the new system and the new organizations are up and running.

Senator Jacobsen asked whether DMV&PS was reporting quarterly to the Interim Finance Committee. Ms. West replied she was not sure whether the Letter of Intent was still in force and was "not aware of the Legislature’s intent after session ends."

Senator Jacobsen requested the DMV&PS to report quarterly on the progress the department was making with implementing the new system.

Mrs. Chowning reiterated her request that the legislators receive contrasting reports of the agency’s request and the Governor’s recommendations, so the reports can be reviewed.

Mrs. Chowning asked who the chief is for "budget account 4742," (Management Services and Programs Division). She asked whether any of the new positions on the charts have been assigned and, if so, who was assigned to the new positions. Ms. West said the department has designated the four administrators and their managers, with the provision that any designation for a position is contingent on legislative approval. She said the predesignation of these administrators and managers has allowed the individuals to have a part in deciding where the department is headed and what goals it wants to accomplish. Ms. West stated she is the individual designated as the administrator of the Management Services and Programs Division.

Senator Jacobsen inquired as to what "lost calls" are. Ms. West explained lost calls are where the caller hangs up for whatever reason.

Senator Jacobsen asked the status of the program testing. Ms. West replied the agency has been testing the occupational and business licensing portions of the application over the last 6 to 8 weeks. She said that effective yesterday, the agency went from the testing segment to the pilot segment of pre-implementation. She said the Bureau of Enforcement staff is collecting the transactions being completed on the existing Legacy system. Ms. West explained that after working hours those transactions are put through the Genesis application to evaluate how the system handles real transactions.

Senator Jacobsen requested Peter English, Chief, Registration Division, Department of Motor Vehicle and Public Safety, to supply the subcommittee with information regarding what is happening in the rural areas and how the office staff are to be trained. Mr. English replied that the Field Services and Record Division has requested additional personnel for the Minden office in decision unit M-200, budget page DMV-8. He said that with regard to the facilities at Incline Village the division continues to have a travel team provide services in that area twice a week.

Senator Jacobsen inquired whether the division found a new location in Incline Village. Mr. English replied no.

Senator Jacobsen asked what applications are running currently and whether there is an increased demand for services. Mr. English replied he did not have a break down for the Incline Village drive team; the Minden office, however, completed 2,254 transactions during January and February 1999.

Mr. English noted the Carson City office opened the remodeled section the day before this hearing. He commented there is an open house on April 12, 1999, to dedicate the remodeled section. He extended an invitation to all the legislators.

Senator Neal referred to a letter from Eric Scheetz, Fiscal Analyst, Registration Division, DMV&PS to Debbra J. King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (Exhibit F), and asked Mr. English to explain the list of functions expected to be impacted due to training of staff between June 6, 1999, and July 23, 1999. Mr. English replied the department will be conducting a considerable amount of training and the numbers reflected in Exhibit F would be the impact on customer service due to employees being "pulled" from the front desk to attend the training. He said the division anticipates wait times to double in some offices as indicated on page 3 of Exhibit F. He noted the division did not anticipate back office functions to be affected a great deal. He reiterated that yes, the division did anticipate an increase in wait times.

Senator Jacobsen asked Ms. West whether there would be any benefit for the DMV&PS to have an overall training unit. Ms. West replied that DMV&PS employees could always benefit from more training. She said the agency will have only one individual in the new organization dedicated to training. She noted this individual will maintain the training materiel developed during this phase of the project. This person will keep those materials up to date, which will include the changes being made in the system. She said this person will be able to provide train-the-trainer training. She said there are certainly other types of training throughout DMV&PS that need to be addressed. Ms. West stated that one of the areas the department has always wanted to provide more training for is the management and supervision unit. She said the department currently does not believe it will have enough staff to provide all the training that will be wanted by management or staff within the agency.

Senator Jacobsen requested Ms. West to discuss the performance indicators for the proposed Management Services and Programs Division budget, account number 4742. Ms. West responded that one of the things the agency has not been able to do is focus on the department as a whole and its effectiveness on the entire agency. She said the inability to focus on the entire department led to the proposal to create the Management Services and Programs Division. Ms. West stated that if DMV&PS is allowed to implement the reorganization the team will be in place to begin collecting the data for the performance indicators documented on page 12 of Exhibit D. She said DMV&PS is now focusing on the projected goals and on these questions:

Ms. West stated that if the reorganization is approved the team will be able to meet and to proceed with the reorganization goals, and at that time the agency will begin to collect the data for the performance indicators. She said that at present the agency can only provide what is desirable for the agency.

Senator Neal inquired whether the DMV&PS was requesting permission to initiate the reorganization. Ms. West replied that in working with the joint committee (Joint Meeting of the Senate Committee on Finance and Assembly Ways and Means Committee), the department received such approval with the provision that it designate all bids for positions as being subject to the approval of the Legislature. Approval was also given to go forward with the designation of the administrators and the managers. Ms. West stated there are approximately 18 other positions in support capacities, including Management Analysts, Program Assistants, and Operations Coordinators for the field. Ms. West explained the department would like to know who those individuals are so that it can prepare them to designate who is attending training classes and so it can be prepared to roll the organizations out and be in a full "go mode" on July 1, 1999. She said that would give the department 1 month until the new system is implemented.

Senator Neal asked whether the Budget Division has reviewed DMV&PS’s plans and approved the changes. Ms. English replied yes. She said the Budget Division examined the plan in detail and produced charts comparing the old system to the new system, and has worked with DMV&PS to develop what is being presented.

Senator Neal inquired whether the budget office understood that direction from the subcommittee was required as to how to proceed with the program. Ms. English replied the budgets have been requested, and whatever the subcommittee recommends to the Senate Committee on Finance will establish the parameters of how the agency will proceed with the plan.

Senator Neal inquired whether approval of the new positions was what DMV&PS was asking. Ms. English replied the question was whether the subcommittee agreed with the realignment of the positions. She stated there are no new positions, and actually there will be reductions of some positions over the biennium as the Genesis system is brought on-line.

Senator Neal, addressing the chairman and the subcommittee, commented the agency apparently needs approval of the reorganization in order to finalize its preparation to implement the changes being proposed.

Ms. Giunchigliani replied to Senator Neal’s comment stating that is exactly the point, and that also there is a bill in the Assembly Committee on Transportation that addresses this question. She said the issue has to be reviewed "no matter what."

Ms. Giunchigliani noted that when this new system was first proposed it was represented as a way to streamline the system and make it more efficient. She asked, "If this streamlining is happening, then why is there a request for 53 new positions and on the reorganization charts there are possibly 30 new positions to be added later." She stated the plan is to split, realign, divide, and delete duplication, but the result of all of these changes is a request for potentially 80 or more new positions. Ms. West replied these changes are aimed at customer services. She said that by initiating the new one-stop service of the Genesis applications the agency will be more efficient. Ms. West stated most of the acquired efficiency will be seen on the part of the customer. She explained the agency will eventually see savings from features of the application, but those savings cannot yet be measured. She said the efficiencies acquired from the Genesis program will be gained when Phase 3 is implemented. She noted Phase 3 consists of "the technologies."

Ms. West noted that when customers are renewing on the Internet, on the phone, or at a smog station and are not coming into the field offices of the DMV&PS then those savings can be measured. She stated there will have to be an assessment at that time of whether there will be a need to realign staff from the Field Services Division to the Central Services and Record Division. Ms. West stated the department feels it will need more support positions, which are documented on Exhibit E in the red boxes. She said the department does not know what will be saved in efficiencies, and will not know until the Genesis program and the reorganization are fully implemented and data can be collected for evaluation.

Ms. Giunchigliani stated those positions are anticipated, and the Legislature has to evaluate what may be anticipated because what the chart shows is what the department indicates it needs. She predicted the Legislature will see a budget in 2 years that has at least all the positions shown in red on the charts and probably more.

Ms. Giunchigliani inquired what the department’s plan is as it shifts positions from Field Services to Central Services and Records. Ms. West replied the positions that have been requested for the Field Services Division are based on current need. She said those needs are based on demographics and are not going to go away on August 2, 1999, when the new system is implemented. She stated the department would not gain enough efficiency in August to no longer need the positions requested for the northern Nevada field offices.

Ms. Giunchigliani asked, "So 53 people do what? Two years ago and two years prior we gave you more people to reduce the lines, especially in southern Nevada. What are 53 people doing?" Ms. West replied that in the Field Services Division the department needs more people to address the lines in the Reno, Carson City, Minden offices, and in the Elko area. She said there is an increased demand for services relating to demographics. She stated the staff in Reno was increased last biennium and the department started providing Saturday services. She noted the lines are just as long on Saturday as they are during the regular week. Ms. West said the department has addressed the southern Nevada needs by adding staff; however, it still needs to address the northern Nevada needs by adding staff. She said a review of the originally projected plan for 1994-95 would show the plan did not call for paybacks, due to the savings from the Genesis project, and this would reduce requests for staff until 2003 and beyond. She stated the payback point should come about 2007.

Ms. Giunchigliani inquired how the department decided how many positions will be needed for each functional area. Ms. West replied she would have to ask each division head for those formulas. She said Mr. English could tell the subcommittee about the northern Nevada staffing formula. She stated those numbers were based on the workload, and that workload will not "go away." Ms. West stated the department will not start to see customer service benefits until alternative service is provided away from the DMV&PS offices. She said there will need to be a discussion at that point regarding moving field services positions to behind-the-scenes positions. Ms. West noted that as customers use alternative options there will need to be staff to complete the transactions within a 24-hour period. She said the 24-hour turnaround time will build customer confidence in the alternative methods provided.

Ms. Giunchigliani inquired whether the department had explored offering incentives to customers to use alternative methods of registration rather than coming into the DMV&PS office. Ms. West responded that was certainly something the department could review to assess whether it would be desirable or even necessary. She stated the department has had an overwhelming response to the renewal-by-mail service without incentives. She noted that other states have utilized incentives and have had mixed results.

Ms. Giunchigliani asked where the two new Governor-recommended positions for the Management Services and Programs Division would be placed. Ms. West asked whether she was referring to the Management Services and Programs Division’s page of Exhibit E. Ms. Giunchigliani replied Yes. Ms. West replied those two new Governor-recommended positions are Program Officers who will provide consumer education in the field for auto dealers, auto repair garages, and other such businesses. She said those positions will be housed in the Management Services and Programs Division because they perform a program-oriented function and are training and public awareness-type functions.

Ms. Giunchigliani asked whether those positions were Public Information Officer positions and whether the Legislature had already provided the department with a public information position. Ms. West replied the positions are not public information positions; they are consumer education positions. She said the focus of these two positions will be informing people about how to buy cars and providing other such public education functions. Ms. Giunchigliani inquired how that is different from public information. Ms. West replied she would have to ask Russ Benzler or Pete English to answer that question.

Ms. Giunchigliani said there were concerns that the public information person had not performed the job the position required. She said she was interested in how these positions were different. Mr. Benzler replied the positions being requested were for educating businesses on requirements, regulations, and laws that govern the conduct of their business. He said the Public Information Officers handle information for the entire department as opposed to specific training targeted at business clients.

Ms. Giunchigliani said she would get the justification for those positions from staff. She said that at this point it is not known how the reorganization is going to affect the need for these positions. She stated the department may not need these positions in this biennium.

Senator Jacobsen inquired where the administrators of the four new divisions would be housed. Ms. West replied that decision was left to the deputy director and the individuals being designated. She said the only requirement for housing at this time is for the Central Services and Record Division because all the staff in that division are housed in Carson City and that administrator needs to be in the same location as the staff. She said Pete English has been designated as the administrator of the Field Services Division, and has indicated he will operate that division from southern Nevada. She noted the Field Services Division could be operated from either northern or southern Nevada as could the Compliance Enforcement Division or the Management Services and Programs Division.

Senator Neal asked whether there would be payroll increases with the reorganization and the designation of administrators. Ms. West responded the current construction of the budget reflects only increases for upgrades to the management positions. She said it would be very difficult to predict what financial increases may be needed before the new technology has been implemented and the department has had a chance to evaluate where there may or may not be savings.

Senator Neal inquired what the impact to the budget will be once the reorganization and the implementation of the Genesis program are complete and whether the department will be able to function with the Governor’s recommendations. Ms. West replied that for the next biennium the department hopes to be able to function effectively. Senator Neal observed that Ms. West seemed reluctant to make that statement. Ms. West responded it is difficult to know what kind of changes the new system will cause for DMV&PS.

Senator Neal stated the technology has an ending date and the funds have already been allocated for its implementation. He said the question now is, "Will the reorganization to utilize the new technology impact the budget in the form of increases over and above what the Governor has proposed?" Ms. West replied it was her hope that it will not but she could not answer the senator’s question. She said the department has already built into the next biennial budget increases of such items as the system operating costs and line charges. Senator Neal stated he understood there would be "those kinds of charges," but he was speaking strictly of increases in personnel and how the reorganization will "change positions around."

Senator Neal asked how many divisions the department has. Ms. West replied the DMV&PS has two basic divisions at present, the Registration Division and the Drivers License Division, and the department wishes to go from two divisions to four divisions. Senator Neal inquired whether the department anticipated salary increases for the individuals who will administer the divisions. Ms. West replied yes. She explained budget account 4739, module E-175, creates a reserve of $200,000 and $210,000 in each year of the biennium to pay for the reclassification related to administrator and manager upgrades. She stated the department believes that amount will be lower and is working with the LCB staff to achieve more accurate projections.

Senator Neal said it was his understanding two of the administrators have been designated, but the department has not yet designated the two remaining administrator positions. Ms. West stated all four of the administrators have been designated. She said Pete English will be the Field Services administrator, Russ Benzler will be the Compliance Enforcement administrator, Owen Ritchie will be the Central Services administrator, and she herself would be the Management Services and Programs administrator. She said 14 of the 16 managers have also been designated.

Senator Neal pointed out that Ms. West kept using the term "managers" and inquired what the division heads are called. Ms. West replied, "administrators." The senator asked whether the managers were in place. Ms. West stated that no one is carrying out those duties at present, and said the department is only planning for the reorganization implementation if the proposal is approved.

Senator Neal asked what is the proposed effective date of the reorganization implementation. Ms. West replied the department is proposing an implementation date of July 1, 1999, which is the beginning of the new biennium.

Ms. Giunchigliani inquired how it could be effective for the Field Services Division and the Management Services and Programs Division’s administrators to be housed in southern Nevada when the majority of the personnel are located in Carson City. Ms. West replied that with the new system in place the administrators will have the ability to share available data with staff throughout the state. She stated she has effectively managed the statewide program for driver’s license field services from Las Vegas with phone calls, with occasional travel, and with e-mail. She said having the reporting structure capabilities of the new system will allow the division administrators to effectively administer staff distributed throughout the state.

Ms. Giunchigliani pointed out that "most of the Management Services and Programs Division is financial, and most of the budget analysis, fiscal unit staff, LCB staff, and others are located in Carson City." She stated that the structure is different from what Ms. West has had to deal with in driver’s licensing. Ms. West replied that only a sixth of this division is directed "toward fiscal"; the majority is related to programming. She said that can be effectively managed from anywhere in the state. Ms. West explained the fiscal manager will have the day-to-day responsibility of coordinating with the Administrative Services and Programs Division staff who deal with the Department of Administration.

Ms. Giunchigliani inquired whether in the backup justification for this position it is indicated that "only one sixth is for fiscal." Ms. West replied only one unit is dedicated to fiscal activities. She said the fiscal manager and the fiscal unit comprise the portion of the division that is directed toward such activities. Ms. Giunchigliani asserted she was speaking of the position of the fiscal manager, not the division. Ms. West replied that the fiscal manager is one of six managers within the division. She said that individual will be located in Carson City to provide the day-to-day work with the administrative services unit, the budget office, and LCB staff.

Ms. Giunchigliani inquired how many people are used to manage the management services area. Ms. West replied the Management Services and Programs Division is directed by the two chiefs of the Registration and Driver’s License Divisions. She said both of those chiefs have staff working on program areas, fiscal areas, and personnel areas. She explained the chiefs’ staffs often duplicated one another’s work. Ms. Giunchigliani pointed out it appears by the chart that under the new system there will be an assistant chief and six managers or assistant chiefs where before there were only two chiefs. Ms. West replied there are four program managers, one each for the vehicle programs, the driver programs, the business programs, and the emissions programs. Ms. Giunchigliani stressed the point that one person used to do those jobs. Ms. West replied the department did not designate one person. She said the department uses "parts of people"; the department did not say, "You’re going to do vehicle programs 100 percent of the time." The individual may work on insurance one day, titles the next day, and something altogether different the following day. Ms. West stated the department has not clearly designated a particular area within the Registration Division. She explained the vehicle program manager will have oversight of all the vehicle program areas and will manage the registration management analyst and the insurance analyst.

Ms. Giunchigliani emphasized the Legislature did not want to create a larger management bureaucracy where there is already a bureaucracy. She stated that maybe it is the terminology used to label the positions. She remarked that when she sees the word "’manager,’ if it walks like a duck it talks like one." The assemblywoman asserted that a "program manager" is a "manager." She inquired how many new "bosses" the department has that it did not have before. Ms. West replied, "Right now, between the chiefs, the assistant chiefs, and the regional managers, there are 20 people in those positions." She said there are 22 people in the new organizations.

Senator Jacobsen inquired about the possibility of obtaining an organizational chart with the names of the designated persons clearly defined. He said he believes such a chart would be helpful to the Legislature. Ms. West assured the senator that for the positions which have been designated the department could provide the names for the legislators.

Mrs. Chowning requested DMV&PS to provide the number of chiefs and assistant chiefs there are in each of the present divisions compared to how many administrators and managers there will be in the reorganized DMV&PS. She also requested that DMV&PS provide justification for the need for more managers. The assemblywoman noted that when the agreement was made to use Genesis the Legislature was hoping to save money and positions and to increase efficiency. However, she said, it sounds as though there is more money being spent and there are more positions being added. She said that if the end product is efficiency, but the attempt to accomplish it requires a tremendous increase, then maybe it is not worth it. Ms. West replied the two-position increase is for the motor vehicle department overall, not just one division. She said the department has a chart that shows which positions are being eliminated and which positions are being added, and promised to provide it to the legislators.

Senator Jacobsen informed Ms. West he wanted to do one more tour of DMV&PS before the end of the legislative session and have Ms. West and her staff bring those legislators who are interested up to date on the implementation of the Genesis program. Ms. West replied the department was working on another open house. She said the department would like to bring the legislators into the testing and pilot section. She noted the department calls the testing unit "bug city." Ms. West noted the unit would enjoy showing the legislators how it finds and repairs "bugs" in the application. Senator Jacobsen stated that was very important and directed staff to make the arrangements.

Senator Jacobsen called for public comment from business owners Brent and Sonja Pack, who wished to testify against the reorganization of the Department of Motor Vehicles and Public Safety and the implementation of the Genesis program.

Sonja Pack, Business Owner testified in opposition to the implementation of Project Genesis noting she operates a vehicle title service, she said her company was founded to assist various types of automobile dealers in obtaining titles to vehicles. Ms. Pack commented that since starting her business the rules and regulations of DMV&PS have changed "at the whim or caprice of whomever was supervising that day." She said that since 1993 her company has served as an intermediary between DMV&PS and the industry to cut through bureaucracy and misinformation.

Ms. Pack stated her business processes the paperwork in order to obtain vehicle titles. She asserted that to her knowledge there is no policy manual, although the DMV&PS has held to the guidelines in the recently published dealer handbook. She said this lack of policy and procedures allows certain persons within the DMV&PS to arbitrarily modify or change the rules. Ms. Pack complained the lack of clear policy allows those individuals to retain a certain power base. She said the attitude of these individuals has also appeared in their dealings with the Legislature, which is supposed to regulate this agency and provide approval for its funding.

Ms. Pack commented, "It has been said that often government hides the truth from itself." She stated that attitude could become expensive, dangerous, or both. She said some secrecy is necessary in the interest of security, but most secrecy is not necessary. Ms. Pack quoted George F. Will, author of The Leveling Wind: Politics, the Culture and Other News, 1990-1994 as saying:

 

Ms. Pack quoted U.S. Senator Daniel Patrick Moynihan in his book Report of the Commission on Protecting and Reducing Government Secrecy as arguing that "secrecy is a form of government regulation. Whereas most regulation limits what the public can do, secrecy limits what it can know." Ms. Pack said that is why it is for losers.

Ms. Pack stated the secrecy that has surrounded the DMV&PS Genesis project is both unnecessary and costly. She said the details that are slowly emerging regarding the changes implemented for the Genesis project are not consistent with the auto industry needs. She noted the DMV&PS’ secrecy keeps the industry uninformed. Ms. Pack stated the secrecy and misinformation only serves to benefit a select few within the department by increasing their power to control.

Ms. Pack noted the DMV&PS’ title and registration division was created to collect taxes and registration fees and to issue titles. She said its clients are the people of the state, which includes the automotive industry. Ms. Pack stated the Department of Motor Vehicle and Public Safety’s mission should be to accomplish the department’s tasks in the most efficient and cost-effective manner possible.

Ms. Pack asserted the lack of strong leadership is evident in the present situation. She stated that in the recent past there have been a few strong leaders who have understood the department’s mission and sought broad changes that managed to reduce the time it takes to obtain a title from about 8 months down to about 4 weeks. She remarked the people who accomplished this return-time reduction have been forced out by the bureaucrats within the department who prefer their own agenda. She said that if DMV&PS were run by a private company, it would have half the employees it has, and the service would take half the time it does now.

Ms. Pack insisted that as long as certain attitudes exist, bureaucracy will thrive. She said there is no reason that registration and titling could not be accomplished at the same speed that a cashier rings up a single item in a store or that a bank teller accepts a single check for deposit.

Ms. Pack said that as the DMV&PS makes its new proposals it is eliminating many key services. She said that although there seems to be confusion over whether or not the services are to be eliminated, the employees in those areas have been told their positions are being eliminated.

Ms. Pack stated the DMV&PS as envisioned through Project Genesis will allow the power to be shared by a select few. She said this department should be ruled by the Legislature, but unfortunately, history proves it has not provided what the DMV&PS needs, such as strong leadership. She stated the leadership in question should be accountable to the public’s representatives in the Legislature.

Ms. Pack urged the Legislature to take another look at the problems produced by the implementation of the Genesis project and the proposed reorganization, and to reconsider the implementation of this system.

Brent Pack, Business Owner also testifying in opposition to the implementation of the Genesis project stated the Project Genesis presentation was well-presented. However, he did not feel that any "concrete" information had been presented. He said his understanding is that these changes are creating a deeper bureaucracy. He stated that as things exist his company can go to the DMV&PS and access a supervisor who has the authority to deal with any problems. Mr. Pack asserted that with the reorganization it will be harder to get to a level where someone could actually resolve the problem. He said Genesis was envisioned as a means to save the public money, yet the department is asking for an additional 53 employees, including more supervisors. He asked, "If the project was planned to save money, why does the department now need additional funding?"

Mr. Pack noted the payback date is set at 2007. He said that according to "the law" of technology, by 2007 the computer system will be totally outdated and the department will have to ask for more funding to update the computer system.

Mr. Pack stated, "The DMV[&PS] as it exists right now works." He said that it is not the greatest and it needs improvement, but it works. He asserted that some of the envisioned changes were tried several years ago and the result was delays of up to as many as 8 months to receive a title. He said that most services can be accessed over the counter in the DMV, but with the new system some of those services will no longer be offered to the public and will be available to dealers only by appointment.

Mr. Pack stated this change has been implemented in Las Vegas and it takes approximately 3 weeks to receive an appointment to acquire vehicle titles over the counter. He stated dealers cannot wait that long to acquire titles for the vehicles they need to sell. He said the automobile business is very time-sensitive because cars depreciate, and inventory becomes "stale." Mr. Pack explained that if there is a titling problem that needs to be resolved, then it needs to be resolved now, not later. He said the proposal for the reorganization will eliminate the ready access to the supervisors who render this service. He stated, "It seems to be a decrease in services, not an increase in services."

Senator Neal inquired what services Mr. Pack perceived as having been cut back. Mr. Pack replied the over-the-counter titles service has been cut back. He said that as of yesterday, the public is no longer allowed to acquire over-the-counter titles. He stated title services are to be eliminated. He said that at present, the dealers’ title services window is operating under an appointment-only basis.

Mr. Pack stated that what he and his business associates are being told does not appear to be "a good situation." He said, "According to the Genesis hearings minutes there was to be stakeholder and industry input on the Genesis project." He stated, "This has not happened." He emphasized "the cloak of secrecy" around the reorganization closely resembles the secrecy around a nuclear missile project. He said information is slowly leaking out and what the industry hears does not make it happy. He said the information the industry is receiving does not seem to be addressing its needs. Mr. Pack maintained the proposed personnel changes and reorganization is just another step away from addressing the needs of the automotive industry.

Mrs. Chowning asked whether Mr. Pack’s business is to obtain titles for automobile dealers and whether they are new-car dealers. Mr. Pack replied yes. He said he helps new-car dealers, used-car dealers, finance companies, insurance companies, and auctions. He noted that basically his business is to resolve problems and facilitate immediate processing of titles. He said this is a service the DMV&PS could provide, but "due to bureaucracy" there is a great niche market for his business.

Mrs. Chowning said it was her understanding there was a special window at the DMV&PS for dealers to present their requests. Ms. Pack replied yes, there is a title window and they are allowed three requests a day per dealer. She said that window was closed a few years ago and the closing created many problems in the registration lines because dealers had to use those lines. Ms. Pack stated that window is open at present, but the dealer or his representative has to set up an appointment which takes about 3 weeks to receive. She stated the titles are mailed and overnight-expressed to Mr. and Ms. Pack’s business in order to facilitate immediate titling for those agencies that use their service. She emphasized that now, however, the DMV&PS is trying to terminate the over-the-counter titling service.

Mrs. Chowning asked whether it is the Packs’ understanding that the dealer windows all over the state are being operated on an appointment-only basis. Ms. Pack replied that for private individuals, this service has been eliminated and the DMV&PS is slowly eliminating the windows for dealers.

Mrs. Chowning restated her question of whether the windows are being eliminated all over the state or only one particular window is being eliminated. Mr. Pack replied the main title-printing division is in Carson City. He said there is some title-printing in Las Vegas by appointment only, but it is his understanding that it takes 3 weeks to receive an appointment.

Mrs. Chowning commented she realized the titles come from Carson City, but Mr. and Ms. Pack had made it sound as though the titles could not be ordered from DMV&PS branch offices. Mr. Pack responded there is only one office in Las Vegas and one office in Carson City that issues over-the-counter titles. He said it was his understanding this service is being eliminated for dealers. He reiterated the DMV&PS is issuing over-the-counter titles by appointment only at this time.

Mrs. Chowning requested staff to research this information for the subcommittee.

Senator O'Donnell stated the Senate Committee on Transportation is aware of the problem. He said there is a bill to augment the ability of dealers and dealer representatives to receive more than one title; however, there will be an expedition fee attached to this service. He said that an individual who wants more that three titles will be required to pay the fee. Mr. Pack replied his understanding of the bill was that the titles would be processed in a "set amount of days," not as over-the-counter titles.

Senator O'Donnell remarked that is the reason for adding more staff. Mr. Pack replied what he was told is that the additional staff will not be allocated to that service. Senator O'Donnell stated that is why the Legislature is here, that is what the bill will do. He said it will augment the amount of money it will cost to receive more than three quick titles.

Senator O'Donnell noted the problem has been that an individual will come to a window and tie up the window for an entire day processing 80 or more titles. The senator said the transportation committee knows there is money to be made, because all of those businesses that deal with vehicles need titles. He said the need for titles is very important to Nevada’s economy, but at the same time the DMV&PS is "bottlenecked" issuing over-the-counter titles without the staff to accomplish the service. He explained the bill will add staff and add a charge to pay for the extra staff. Mr. Pack replied he did not have a problem with the changes the senator cited.

Mr. Pack explained his problem is that at present he cannot process 80 titles, and it takes 3 weeks to receive an appointment to process three over-the-counter titles. Senator O'Donnell responded that service is not available right now but will be in the future. He stated, "Do you have a problem with the future?" Ms. Pack replied the problem she had was when she tries to acquire information concerning what changes the reorganization will make in the services, the staff responds they do not know. She wondered, "If the person who is supposed to be running the office does not know what changes will be made, how am I supposed to be comfortable with what the future might bring?" Senator O'Donnell replied the staff could not tell her what changes will be made because the reorganization has not been approved by the Legislature.

Ms. Pack stated she had inquired about the changes and received an "I don’t know" response, but a week later the staff informed her what the change will be. She said she believes the staff do know what the changes will be but are unwilling to tell her.

Mr. Pack stated the proposal presented to the subcommittee "sounds great;" however, the department has not said anything substantial. He said there were no set dollar figures, and until there is some accountability presented, he urged the Legislature not to spend more money on the changes the DMV&PS is requesting. He stated the authority should be in the hands of local office supervisors so that the problems can be handled immediately, rather than being submitted to a central hierarchy that makes it harder to get through the levels of bureaucracy to resolve a problem.

Senator O'Donnell asked Mr. Pack to analyze what he had just stated. Mr. Pack replied that as the DMV&PS exists an individual can access a division manager to resolve problems. He said the proposal by the department adds another layer or two of bureaucracy to go through to resolve problems. He reiterated the proposal has no set dollar figures.

Senator O'Donnell recited that in the old days, around 1864 when the state had buckboards, an individual could go directly to the governor to figure out how to register his buckboard. He said at present there are a lot of people between the governor and the end user at the DMV&PS. He pointed out there are many different managers, and if an individual could receive the services he wants in a reasonable amount of time he should be happy. Mr. and Ms. Pack replied they are receiving that now.

Mr. Pack said that with the proposed reorganization there will be more delays. Senator O'Donnell replied the Legislature is working on the delays, and inquired whether that was the only problem. Ms. Pack replied that besides the delays the other problem was that the "stakeholders" have not been allowed to meet with the department to voice their concerns and possible problems with the new system. She stated the dealers "do not have a clue" as to what is going on. She said there was to have been a meeting in June of 1998, but it has never been held. She asked how the auto industry can agree to what the new system will do if the industry has not been informed as to how the system will change the current procedures involved in acquiring services.

Mr. Pack concluded by saying there are bureaucrats studying a bureaucracy. He said that procedure is not effective.

Senator Jacobsen adjourned the meeting at 11:20 a.m.

RESPECTFULLY SUBMITTED:

Johnnie L. Willis,

Committee Secretary

APPROVED BY:

Senator Lawrence E. Jacobsen, Chairman

DATE:

Assemblywoman Christina R. Giunchigliani, Chairman