The Senate Committee on Finance was called to order by Vice Chairman Raymond D. Rawson, at 8:15 a.m. on Thursday, May 6, 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.

COMMITTEE MEMBERS PRESENT:

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

COMMITTEE MEMBER ABSENT:

Senator William J. Raggio, Chairman

GUEST LEGISLATOR PRESENT:

Senator Mark E. Amodei

STAFF MEMBERS PRESENT:

Jean Laird, Committee Secretary

OTHERS PRESENT:

Senator Mark E. Amodei, Capital Senatorial District, indicated he was one of the prime sponsors of Senate Bill (S.B.) 239. He testified this bill has cost-effective provisions in terms of training expenses and loss of personnel. He said the Nevada Highway Patrol Association has done an excellent job of identifying how to pay for this measure. He mentioned that as a law enforcement agency, the Nevada Highway Patrol Division has one of the richest histories in the state and should be continued. He pointed out that to continue the highway patrol as an operationally outstanding organization it is important to take care of the people in that organization. He said this is a biennium in which the important issue is where the money will come from. He declared that unlike many other requests, the committee will hear excellent answers to that for this request. He said that during the course of this presentation the committee will hear why this measure makes "money sense" in terms of personnel retention and the cost of training.

Senator Neal stated that, as one of the legislators who regularly drives between Carson City and Las Vegas, he knows the highway patrol is necessary for public safety. He indicated he has said before that the highway patrol troopers are direct representatives of this state and Nevada should consider that when determining how those troopers will be paid.

Senator Neal said the troopers do an excellent job and noted they ride in cars by themselves, which can be a dangerous situation. With Metro (Las Vegas Metropolitan Police Department), he said two people ride in each automobile and the response time for backup is shorter than for a highway patrol officer when he is out on the road by himself. He said this committee should also consider that factor when determining salary levels.

Senator Neal indicated the state should try to keep good people and not have the salary so low that the Reno Police Department or Metro can "snatch these guys out by paying them more and treating them the way the state should have treated them."

Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association, thanked Senators Amodei and Neal for cosponsoring S.B. 239. He referenced his handout "Nevada Highway Patrol Association, SB 239" (Exhibit C. Original is on file in the Research Library.). He indicated he intended to give the presentation for this bill, but since there is such strong representation from the highway patrol, he said he would defer to Colonel Michael Hood, Chief, Nevada Highway Patrol Division, Department of Motor Vehicles and Public Safety. He said the committee knows his position on this issue from discussions during the last two legislative sessions but said he would be available to answer questions.

Colonel Hood indicated the many highway patrol troopers at this hearing were present on their own time and at no expense to the state. He said the troopers were present to show unity and support for this effort. He pointed out this bill means a lot to the troopers and their families because it means they are recognized by the state for their efforts, their professionalism, and their dedication to duty. Colonel Hood indicated the troopers would all like to speak in support of this bill, but in recognition of the committee’s limited time he would speak for them.

Colonel Hood testified that for years the highway patrol had been trying to achieve salaries comparable to those of other large law enforcement agencies across the state. He said the highway patrol is the second largest peace officer agency in the state, with nearly 435 members. He said troopers do the same work as other agencies and in some counties work side by side with the local police officers and sheriff deputies. He said that in addition to regular police officer duties, which include felony and misdemeanor investigations and arrests, the highway patrol has specific programs, such as "hazardous material, commercial enforcement, criminal interdiction, and task force operations." He said each of these programs requires well-trained and experienced law enforcement officers.

Colonel Hood pointed out it is becoming more difficult to hire and retain qualified officers. He said that 20 years ago the highway patrol was compensated comparably to other large law enforcement agencies in the state. He said further that 20 years ago, when the department recruited for troopers there would be over 1,000 applications for 10 to 20 openings. He recalled that when he was tested 22 years ago he competed with 1,100 other applicants for 18 jobs. He testified the last recruitment fielded just over 300 applications and the division was only able to hire 22 cadets for 35 openings. He said that during the last 4 years he has watched the recruitment scenario go from bad to worse and noted the highway patrol is losing troopers to other law enforcement agencies at alarming rates.

Colonel Hood explained that it is disturbing the state is losing well-trained troopers in the peaks of their careers because with each trained trooper lost, the state loses tens of thousands of state dollars. In addition, he said, troopers must work long hours, often at overtime rates, to cover shift work and the highway patrol overtime budget continues to accelerate. Colonel Hood said it was his belief that with the money the state is paying in training expense, salary money returned because the division is unable to fill vacant positions, and accelerating overtime costs, the state could fund this bill with minor adjustments to the current budget.

Senator Rawson asked whether there is an unusually high risk to being out on the open roads. Colonel Hood responded that risk is inherent with any police officer position. But, he said, the highway patrol covers the entire state, including all urban and rural areas. He said sometimes troopers are working with backup personnel 250 miles away. He pointed out it is becoming increasingly difficult to fill those positions because officers can work in urban areas or county sheriff offices and make more money with better benefits. He noted it is especially difficult for officers out in the rural areas by themselves.

Senator Rawson asked how long a shift is for the highway patrol. Colonel Hood replied troopers work 8-hour shifts. However, he said, because the division is unable to fill many of the rural positions an officer may work an 8- to 10-hour shift, go home, and get called out in a couple hours for accidents because they are the only law enforcement available in many counties. He reiterated that not being able to fill positions, the highway patrol is paying overtime.

Senator Rawson asked whether the highway patrol vehicles have cameras. Colonel  Hood said there are some vehicles with cameras in selected urban areas used for special enforcement detail. Senator Rawson asked whether more are needed. Colonel Hood indicated cameras serve a purpose but also have other effects. He said his organization does not consider cameras a priority issue because they are not needed for every vehicle. Regarding the question of cameras in vehicles, Senator Neal said that out on the road the camera does not prevent physical confrontation, but only records it. When there is only one trooper out there, he is in trouble. Senator Rawson agreed it helps sort out the confrontation later but does not help at the time of the incident.

Senator Rawson asked how much salary savings is built into The Executive Budget. Colonel Hood indicated the salary savings started out at $1.6 million, but thanks to members of this committee, it has been reduced to $800,000 a year. He pointed out that is still a lot of money, but the division also reverts additional money because it is unable to fill positions. He testified that last year the highway patrol reverted $2.4 million in salary funds.

Colonel Hood stated he was proud of every member of the highway patrol. He reiterated those who attended the hearing were doing so at their own expense because they care, will continue to care, and will continue to do their jobs.

Senator Rawson said to the troopers in the audience that they were an impressive group to all be here in uniform. He said it occurred to him they are "our police force." He said legislators owe allegiance to their local communities, but highway patrol troopers are the police for the state and that is where legislators work, so there is an allegiance.

John D. Madole, Jr., Lobbyist, Association of General Contractors, stated his organization has always insisted on getting the best value for tax dollars and it is somewhat unusual for them to be supporting an increase in pay for a group of state employees. He informed the committee there is a contractor’s auxiliary that works closely with law enforcement agencies, principally the sheriff’s offices. He said the auxiliary also work closely with the highway patrol when the auxiliary is called out for a fire or flood and has to move a bulldozer in the middle of the night. He said the highway patrol provides an escort so no one is injured. He said he can speak firsthand to some of the things troopers go through to help contractors get their job done. He said this close relationship has made contractors sympathetic to the need to keep trained people who can make good judgment calls out on the road. He said that during highway construction people’s lives depend on the proper enforcement of the highway laws.

Mr. Madole testified his organization supports S.B. 239 and asked the committee to provide salary parity for the highway patrol. He said to have good judgment out on the road, a trooper must have experience and be properly trained and other law enforcement agencies are hiring these people away with higher salaries. He explained that contractors are affected when new troopers stop equipment unnecessarily and ultimately the $100 or $150 cost for an unnecessary delay is passed along to the consumer. Also, he said, if a trooper is stopping a truck unnecessarily, there could be someone else who should be stopped who is not getting stopped. He indicated this is what will happen if the highway patrol loses experienced people to other agencies and has only inexperienced and underpaid people. He stated that although this requires additional expenditure, it is critical the committee pass this bill and make sure these people are paid what they truly deserve.

Sheril Bradley, Owner, Byars Construction Company, testified in support of S.B. 239. She said this bill would create pay parity for the Nevada Highway Patrol troopers with other major law enforcement agencies in the state. She said Byars Construction Company has been involved in the engineering and construction business for over 35 years and understands it is vital Nevada has the best-trained highway law enforcement officers working on Nevada’s roads. She noted the competition for law enforcement agencies is making it difficult to keep trained officers patrolling Nevada’s highways. She stated unnecessary delays of construction equipment and commercial vehicles on highways result from troopers not having the appropriate training and common sense that comes with experience. She said this causes her company, and ultimately the consumer, many additional costs and delays.

Guy Jessup, Q & D Construction Company, said his company is one of the largest construction firms in Nevada performing building, heavy construction, engineering, and highway construction. He indicated his company shares the views of other members of his industry that retaining well-trained and experienced highway patrol troopers will benefit the construction industry and the public as a whole. He said his firm operates over 35 commercial vehicles and over 100 small trucks each day. He stated the safe and efficient movement of these vehicles is vital to his company’s success. Mr. Jessup said his company is also concerned that the rapid increase in law enforcement salaries in the southern part of Nevada will reduce the number of trained and experienced troopers on Nevada’s highways. He said loss of troopers will ultimately cause unneeded delays and stops of vehicles and perhaps the failure to stop unsafe vehicles. He opined the experienced and seasoned individuals in this room best make these judgments. Mr. Jessup said Nevada’s needs will best be served by the passage of S.B.239, which will maintain pay parity with other law enforcement agencies within Nevada.

Pat Kelly, Reno Area Manager, Granite Construction Company, testified in support of S.B. 239. He said the bill would create parity for Nevada highway patrol troopers with other major law enforcement agencies in Nevada. He mentioned that Granite Construction Company is the largest highway contractor in northern Nevada. In peak season his company employs up to 600 craft workers and 75 salaried personnel. This includes more than 100 trucks and transit mixers that travel hundreds of miles on Nevada highways each working day.

Mr. Kelly explained that safe highways are paramount to his company’s success in maintaining competitiveness in the industry. He said the highway patrol has always done an excellent job of maintaining safe roadways for his personnel, who are exposed to the hazards of the traveling public. He mentioned the highway patrol has also provided specific job site presence in instances that lend themselves to accidents between the traveling public and company employees. Mr. Kelly pointed out that if his company were to lose this service it could create higher public liability expense due to exposure to the traveling public. He urged passage of this measure to correct this pay inequity.

Jim Strumph, representing Western Nevada Supply Company, testified in support of S.B. 239. He said he retired from the Nevada highway patrol as chief. Mr. Strumph said he was hired by the highway patrol in 1957 and worked through the times when it was the highest-paid agency in Nevada. He said the highway patrol was "holding our own" for many years, but it started to deteriorate about 20 years ago and has fallen further and further behind. He pointed out Nevada is going to lose many highway patrol employees and asserted it would be cost-effective to try to keep them by getting trooper salaries back to an acceptable level.

Mr. Wolff informed the committee he had been advised by Metro that 8 highway patrol troopers had just been hired by Metro. He said that considering the high cost to train a trooper, this is an issue for the state. He said Metro also informed him they would start hiring "laterals" in July, which means highway patrol troopers will be hired by Metro without going through the full academy. This means the troopers would have a limited and short training and could start with Metro at substantially higher pay. He asked the committee not to put this action off any longer. He said his organization has been before the Legislature many times on this issue and this is a "righteous" bill about fairness and equality.

Senator Rawson closed the hearing on S.B. 239.

Senator Neal testified in support of S.B. 89 as the primary sponsor of the bill. He said the measure proposes to use abandoned money of a utility, currently placed in the abandoned property trust fund, to assist indigent persons with utility bills. He referenced a memorandum (Exhibit D) from Paul Mouritsen, Principal Research Analyst, Research Division, Legislative Counsel Bureau, that explains how a similar fund is being utilized in Arizona.

Senator Neal called attention to a potential contradiction in the bill. He said line 10 on page 3 states that 10 percent of the money in the fund or $290,000, whichever is greater, is to be transferred and line 7 on page 5 states 50 percent of the money in the fund or $290,000, whichever is greater, is to be transferred. He said he believed the $290,000 is correct, however. Senator Rawson asked whether 10 percent or 50 percent is correct. Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, indicated that in FY 1998 approximately $426,000 was collected from utility companies and said that at 10 percent that would only be $42,000. He said the $290,000 would probably govern in the first year. He explained that the 50 percent is in the bill because it would approximate $290,000 in the future, so the 50 percent is probably legitimate.

Senator Neal said it is the intent of this bill to use this money to pay utility bills of individuals whose income is below 150 percent of the poverty level. He pointed out that regulations would need to be adopted for the administration of the fund. Senator Neal said this is a simple bill and there is currently over $700,000 in the abandoned property trust fund from abandoned money of a utility. He said this money could be used for a good purpose, to heat and cool residences.

Debra Jacobson, Lobbyist, Southwest Gas Corporation, testified in support of S.B. 89. She said Southwest Gas Corporation has about 435,000 customers in Nevada and last year forwarded about $61,000 to the state’s unclaimed property fund. She said the $61,000 is from customer deposits when the customer leaves and cannot be located and the company cannot return the money directly to the customer. Ms. Jacobson estimated approximately 14 percent of customers need some sort of bill payment assistance. She said there is the federally funded Low Income Home Energy Assistance (LIHEA) Program to which customers can be referred for assistance once a year. She said that last year 247,000 customers were assisted with payment of utility bills, but pointed out this funding is decreasing.

Ms. Jacobson said Southwest Gas Corporation established a fuel fund program in 1997 called "Energy Share." She said about $100,000 is collected annually from onetime and monthly pledges from customers, employees, and the company. She explained the Salvation Army, which makes all eligibility decisions and fund distributions, administers the fund. She said that last year that program assisted 545 Southwest Gas Corporation customers with utility bill assistance.

Judy Stokey, Lobbyist for Nevada Power Company and Sierra Pacific Power Company, testified in support of S.B. 89. She said this bill would help customers pay power bills when they are unable to do so. She said the Nevada Power Company has a program in the south similar to the one Southwest Gas Corporation has, which is called "Project Lift." Ms. Stokey estimated that $500,000 in donations from customers over the last 10 years had been forwarded to that fund. Additionally, she said, Nevada Power Company matches those funds and last year’s total was nearly $200,000. She said that fund is also administered through the Salvation Army. She explained this fund handles less than 1 percent of the customers who have problems paying their power bills, so this bill would be of great assistance.

Ms. Stokey said Sierra Pacific Power Company has a similar program called "Safe Fund," which is a nonprofit corporation, to help Sierra Pacific Power Company customers in northern Nevada. She said that last year the company donated over $200,000 to that fund.

Ernest K. Nielsen, Lobbyist, Washoe County Senior Law Project, testified in support of S.B. 89. He said this bill would meet a critical need for those who are most vulnerable in Nevada. Mr. Nielsen explained that the electric and gas industries are being deregulated, which means Nevadans will be buying electricity and gas from the private sector. He said there had been no other proposed legislation, associated with the restructuring of the utility industry, to address the needs of Nevada’s vulnerable populations. He stated this bill could address that deficiency.

Mr. Nielsen pointed out that Nevada Administrative Code (NAC) 704.342 requires public utilities to provide financial assistance to customers who are having trouble paying their bill. He warned the committee this regulation and the resulting programs described in earlier testimony may be lost when Nevada proceeds with the restructured industry.

Mr. Nielsen referenced the summary prepared by the National Consumer Law Center (Exhibit E) which describes the laws in states that have adopted restructuring. He pointed out that document indicates Nevada is fairly unique in not having addressed the needs of vulnerable Nevadans in its restructuring process. He said this bill will go a long way toward addressing that lack.

Myla C. Florence, Administrator, Welfare Division, Department of Human Resources, said the Welfare Division is designated to administer the new fund created by S.B. 89. She referenced her handout (Exhibit F), which contains additional information.

Ms. Florence informed the committee the Welfare Division currently administers the LIHEA program, which provides federal funds to assist low-income households below 150 percent of the poverty level. She said S.B. 89 blends nicely with that program by receipt of nonfederal funds to assist low-income households with cooling and heating bills. She noted that can leverage additional federal money for the LIHEA program and the rate of return on leveraging efforts has ranged from 16 percent to 19 percent over the last 3 years. She stated that assuming this fund would generate an additional $290,000 for energy assistance, the LIHEA program leveraging bonus could increase the funds available by $41,760 and assist an additional 1,400 households.

Ms. Florence said this is a "win-win" situation providing additional assistance to low-income households. She mentioned that only about 11 percent of the eligible population are covered through the federal funding Nevada currently receives.

Senator Jacobsen asked how a person becomes eligible for this program. He noted he would like to know how the system works, because occasionally he sees someone in line for welfare benefits who he absolutely knows should not be there. He asked what potential abuses come with this program.

Ms. Florence said that due to the leadership of the program coordinator, LIHEA is one of the most efficient programs operated within the Welfare Division. She explained that applications are submitted by mail and are targeted to the elderly, to recipients of Supplemental Security Income (SSI), and to cash assistance recipients. She noted that mailers are sent to prior-year recipients, notices are posted in newspapers, and there are aggressive outreach programs through some of the utility providers. She said individuals mail in applications with verifications and the application is processed with a staff of about six individuals. She stated the division strives to have the applications turned around quickly. She declared there is very little abuse with regard to this program.

Lisa Appelrout Guzmán, Lobbyist, Nevada Empowered Women’s Project, said her organization is an advocacy group for low-income women and families and testified in support of S.B. 89. She said there are many families in Nevada who are barely "making ends meet" and when the power bill arrives in the mail they must make a choice between paying that bill, paying rent, or putting food on the table. She said she refers people to nonprofit agencies that offer emergency assistance, but that is a short-term solution. She stated this bill would help a lot more families.

Jan Gilbert, Lobbyist, League of Women Voters of Nevada and Progressive Leadership Alliance of Nevada, said the fund created by S.B. 89 would be an asset to the people who are getting off welfare and are trying to make ends meet. She pointed out a welfare grant for a family of three is only $348 a month, making it difficult to "make ends meet." She said this bill would make a very big difference in the lives of those families who are transitioning off welfare into the workforce. She urged the committee to pass this bill.

Senator Jacobsen asked Ms. Jacobson how much Southwest Gas writes off every year. Ms. Jacobson indicated about 6 percent is uncollectable. Senator Jacobsen asked whether the program created by S.B. 89 would mean Southwest Gas would not have any bad accounts. Ms. Jacobson said she did not believe so, because it would only assist low-income customers.

Jon L. Sasser, Lobbyist, Washoe Legal Services, expressed support for S.B. 89. He said there is a large unmet need and this would go a long way towards resolving that problem.

Cindy Hannah, Director, Social Service, Churchill County, testified in support of S.B. 89. She stated that at the county levels, assistance with utility bills is the number one request and counties can only help a family once and cannot help everyone. She agreed with Ms. Florence this is a "win-win-win" for the state, for individuals, and for counties.

Senator Jacobsen asked whether Churchill County Social Services ever receives requests from the military. Ms. Hanna said her agency does receive requests from the military for assistance and works with the military family assistance program in those instances.

Senator Rawson closed the hearing on S.B. 89.

Senator Neal testified as the sponsor of S.B. 272. He explained this bill is for the Economic Opportunity Board (EOB) of Clark County for transportation for senior citizens and children with disabilities to medical and other appointments. He said EOB’s fleet of vehicles had deteriorated and the public transportation services operated within the Clark County area does not pick up these individuals. He said this bill would appropriate $350,000 to replace the fleet of buses to transport these individuals.

Christine Brady McIntyre, Community Relations Officer, Economic Opportunity Board of Clark County, said the first area she would address was the reason it is appropriate for EOB to be requesting this appropriation for a paratransit replacement fleet. She said the second area she would address was why it is fiscally responsible to do so. She referenced the packet titled "Senate Bill No. 272, EOB Paratransit Fleet Replacement, Committee on Finance" (Exhibit G. Original is on file in the Research Library.).

Ms. McIntyre called attention to the page titled "EOB Transportation Fact Sheet." Regarding the appropriateness of EOB’s requesting this funding, she said EOB is a private, nonprofit organization. However, she said, EOB has a unique role as the only community action agency designated in Clark County. She said it has been EOB’s role for 35 years to handle federal, state, and local government money. For example, she said, EOB handles childcare assistance dollars for women and families leaving welfare and going to work. She said that in the same vein, with the transportation system EOB helps the State of Nevada, particularly by saving money for Medicaid.

Ms. McIntyre stated EOB is not making money in this transportation program. She pointed out the State of Nevada is not serving all of EOB’s clients in the Clark County area. She explained there are many people "falling through the cracks" and the EOB transportation program helps provide transportation to medical appointments for senior citizens, persons with mental or physical disabilities, and children who are abused or neglected. She said those are clients for the State of Nevada.

Ms. McIntyre testified EOB, which was incorporated in 1964, is a community action agency that has served the area for 35 years. She explained that in 1971, EOB operated the first senior transportation program and currently about 89 percent of EOB clients are also clients of the State of Nevada. She further explained that of the total 2,500 clients per month EOB serves, approximately 2,300 are people receiving state assistance.

Ms. McIntyre said EOB estimates it charges Medicaid $9 less per ride than other "off-line" providers. She said EOB charges $18 and other "off-line" providers charge an average $27. She noted taxicabs charge the state an average $28 per ride. She pointed out that EOB, therefore, saved the state money.

Ms. McIntyre said EOB has the infrastructure in place and has the experience. She said that with a well-running paratransit fleet, EOB would be able to provide expanded services to the State of Nevada, saving the state even more money than now. She mentioned there are also some possibilities of providing transportation for the Welfare to Work program.

Ms. McIntyre called attention to the page in the EOB handout (Exhibit G) titled "Content Outline." She pointed out approximately 89 percent of EOB paratransit services are provided for persons receiving benefits from the State of Nevada. She said that in 1998 EOB provided 4,340 rides for Children’s Behavioral Services; for Medicaid that was 20,722 rides; and for Nevada Children’s Center it was 2,331 rides. She added the Children’s Behavioral Services has submitted a Letter of Intent to award EOB another contract, presumably because EOB provides services at the lowest cost.

Ms. McIntyre indicated EOB’s transportation program saved Medicaid an estimated $186,290 because EOB charges $18 compared to $27 average charged by other providers. She pointed out that EOB’s lower rate also "drives down" the cost overall because of the bidding process. If EOB were not involved, she said, Medicaid would be at the mercy of the for-profit providers and would likely pay more for transportation services.

Ms. McIntyre said replacing the paratransit fleet would not only reduce the volume of maintenance and repairs, but repairs would also be covered under warranty. She noted EOB mechanics are certified to do warranty work and cost less than mechanics at for-profit auto repair establishments.

Ms. McIntyre pointed out the bad news for EOB and EOB clients is that maintenance costs are increasing by almost 36 percent semiannually. In the first 6  months of 1998, $31,594 was spent on vehicle maintenance and it is projected to be $79,000 in the last 6 months of 1999. For the calendar year 1999, expenses are projected to be $137,208, which is over 15 percent of all transportation costs for EOB.

George Joanou, Administrator, Special Services, Economic Opportunity Board of Clark County, emphasized it is crucial to pass S.B. 272. He said the money the state would appropriate in this bill would come back to the state through services to clients. He informed the committee it could be the prophecy of doom for EOB transportation services if this bill is not passed because the fleet is exhausted. He noted the average age of EOB vehicles is 11 years and it is essential the fleet be replaced. He admitted EOB could be criticized for not setting aside funding to replace the fleet, but in its efforts as a community action agency, EOB attempted to keep the cost within reason. He emphasized EOB has done that.

Mr. Joanou reiterated that EOB saved the state $186,000 last year and the savings will be higher in 1999. He closed by saying EOB needs the committee’s support.

Senator Rawson asked whether the original vehicles were purchased with federal funds. Mr. Joanou replied they were not.

Claude Logan, Chairman, Economic Opportunity Board of Clark County, said he had been a resident of Nevada for over 16 years and represents North Las Vegas on the EOB. He said his reason for testifying is to demonstrate that the programs provided by EOB really work. He said EOB provides programs such as Head Start and added that he is a product of Head Start. Mr. Logan said that without these programs he would not be the individual he is today. He noted he became involved in EOB as an advocate for seniors through the paratransit program.

Mr. Logan emphasized EOB is not duplicating other transportation services. The EOB provides services to individuals who are falling through the cracks, but at the same time it is providing savings to the state. To continue to do that, he pointed out, it is necessary to update the fleet. He said EOB serves over 40,000 residents of the state. He pointed out a large number are seniors, disabled persons, and children, and EOB needs to continue to provide the services.

Senator Jacobsen asked how many clients EOB served last year and whether EOB has peak seasons or services are constant. Mr. Logan replied the service is not constant because the demand slacks off during the holiday season beginning around Thanksgiving. He added that in 1998 EOB served 27,393 for the state. Senator Jacobsen asked whether the numbers were broken down by client groups. Ms. McIntyre replied that 4,340 were for the Children’s Behavioral Services; 2,332  were for the Nevada Children’s Center; and 20,722 were for Medicaid.

Senator Jacobsen asked what kind of liability there is and what kind of insurance EOB has. Mr. Joanou replied insurance is through Kragen and Pike and meets all insurance requirements. Senator Neal pointed out EOB is considered a governmental agency regarding insurance and "comes under the state’s maximum also."

John K. Amundson, a resident of Douglas County, testified in opposition to S.B. 272 but said he understands there is a significant need in Las Vegas to replace aging vehicles. He said his opposition is based on the fact that S.B. 415 is superior to S.B. 272.

Mr. Amundson indicated S.B. 415 addresses the needs of seniors in rural Nevada and S.B. 272 does nothing for rural needs, since it only covers Las Vegas. He pointed out this is the first time there has ever been a bill that addresses the rural transportation needs. Second, he said, S.B. 415 would allow the use of federal transportation administration funds at 80 percent federal and 20 percent state. He said there is nothing in S.B. 272 that takes advantage of available federal money. He said S.B. 415 would provide far more vehicles than the $350,000 in S.B. 272. He said S.B. 415 also addresses the needs of persons with disabilities across the entire state, not just Las Vegas.

Bert Lackenaur, Chairman, Carson Valley Eldercare Coalition and member of the TRIAD Board for Douglas County, said that when he became aware of the hearing on S.B. 272, he contacted the Executive Director of RSVP and the Director of the Douglas County Senior Center. He testified both entities stated the opinion that if it becomes a choice between S.B. 272 and S.B. 415, then S.B. 415 has more merit. He pointed out there are alternative methods of transportation for people in Clark County, but there is virtually no transportation in many counties in the northern end of the state. He said that although there is great need in large-population areas, there are also other voters and citizens of this state who need attention. He said if a person were to look for a list of what has been done by this state for rural counties regarding transportation, it can be summed up in one word, "nothing." Mr. Lackenaur said it is time the state took some action to help the rural counties.

Ms. Hannah testified S.B. 272 would be wonderful for EOB, but she agreed the focus should be on S.B. 415 because it has statewide benefit. She pointed out that EOB could also access funds through S.B. 415, but the rest of the state cannot access funds through S.B. 272 because it only benefits EOB. She said her rural community is implementing its transportation service and would certainly like the opportunity, as many other rural communities in the state would, to access the funds S.B. 415 would provide enhanced with federal funds. She noted EOB currently has an application on file with the Nevada Department of Transportation (NDOT) requesting a vehicle. She indicated it would be ideal if the two bills could be combined, but S.B. 272 would appropriate $350,000 to EOB and S.B. 415 would appropriate $300,000 and has statewide opportunities and benefits for all communities. Ms. Hannah recommended the committee not pass S.B. 272 and focus on S.B. 415 instead.

Paul Gowins, representing the Southern Nevada Center for Independent Living, said the center urges that if this money is appropriated it should be monitored to be sure it is actually used to replace vehicles. He noted $350,000 is not a lot of money for purchasing vehicles. He also pointed out that small areas outside Las Vegas, such as Pahrump and Mesquite, have no transportation. He said the center suggests that as the committee reviews its priority list, it should consider the availability of transportation within communities and fund those where there is absolutely no transportation currently available.

Senator Rawson calculated that adding approximately 12 cents a ride to a replacement fund over 10 years would provide $400,000. He said EOB should think seriously about that for the future. He said the state is willing, if it can, to help in this regard but may not always be able to replace vehicles. He recommended EOB plan for replacements along the way.

Senator Jacobsen suggested there be an interim study to catalog all the transportation services available. He pointed out there are currently 20 vans located at the Stewart honor camp in Carson City that are assigned to the Department of Prisons but are only used once a week. He said the Nevada Veterans Service Commission has vans that travel on a continual basis between Douglas County and Reno for hospital care. He said it seems the state could combine all these and not pay for separate services. He asserted that although that would be competition for private enterprise, it would still be advisable to catalog the transportation services available. He mentioned the 36 percent increase in cost of repairs to vehicles at EOB and said that may be something the prison industries could become involved in. He said that might be somewhat difficult to accomplish in the rural areas, but there are some opportunities to consolidate. He recognized it is difficult to tie multiple agencies together, but said this may be something to consider for the future.

Senator Neal informed the committee EOB has a full transportation department because of the large numbers of people EOB transports. He pointed out that if this fleet is allowed to continue to deteriorate, there would be no transportation for senior citizens, Medicaid recipients, and disabled persons in the area. He said he understands the concerns of people from the rural areas and it is not his intent to allow any needs for seniors to go unmet, but said this situation at EOB is very critical. He said someone suggested there are other avenues available to the EOB, and he said he did not know whether that is the case. He noted that at one time EOB was the only transportation agency, then a public agency was allowed to take over those services and that public agency does not provide door-to-door service for persons with disabilities or illness.

Senator Neal said one of the major complaints in the Clark County area is that a person must walk to the bus stop and conform to the bus schedule. He pointed out that EOB provides transportation by appointment, picks up the individuals, and transports them to the medical appointment or wherever they need to go. He said he was aware of a veteran who was diabetic with diseased limbs and had to wear thick soles on his shoes to walk in the hot sun to the bus stop, which was 3 to 6 blocks away. He remarked the committee must view this from the standpoint that Las Vegas is the hottest part of the state and noted this bill is about the elderly, the ill, and the disabled. The Senator said he is not saying the needs are any greater than in the rural areas, but the state has to provide for the needs of senior citizens and children throughout the state. He said this committee must do something because if not, this fleet will continue to deteriorate. He added that possibly next year or the year after, these buses will stop running and then there will be nothing.

Senator Neal said what EOB is offering is to have this one-shot funding to build up the fleet and EOB would then establish a replacement fund for the future. He said EOB has been around for a long time, since 1964, and is very skillful in finding funding sources. However, he said, in some instances in which EOB found funding resources and set up systems, public and private industry came in and took the consumers away from EOB. He said this is one of the things EOB faces in the transportation area right now because the private industry is not taking care of all the needs. He remarked that maybe the Legislature should pass a law requiring transportation services offer door-to-door service for these vulnerable individuals.

Senator Jacobsen said there is a group that travels from Reno and Sparks to the veteran’s cemetery in Fernley to perform military burial services. He said it is a volunteer group, so the members were complaining they had no transportation other than their own vehicles. He stated that "through surplus" he acquired two vans. Then, he said, it turned out that because they were all over 65 years old the group could not afford the insurance. So, there are two vans parked at the Fernley cemetery not being used and there are probably similar opportunities elsewhere.

Senator Jacobsen said the state must establish priorities and unfortunately is unable to fund everything. He said it is too bad the Legislature could not fund both bills, but Nevada should take advantage of federal funds whenever possible. He said this is a real need and it is one that has to be met directly. He said it is apparent private enterprise will not handle it because it is not a moneymaking proposition. He pointed out another consideration is that the people who use it cannot afford to pay for it.

Mr. Joanou "set the record clear" concerning a comment made in opposition to S.B. 272. He said a person testified earlier EOB had a request on file at NDOT for a bus replacement, but it is not true. He said EOB did submit a request in 1996 and again in 1997, but it was denied both years. He said two of the mid-sized buses EOB presently has in the fleet are "used" buses that NDOT gave to EOB. He noted EOB gives a quarterly report to NDOT on the use of both buses.

Mr. Joanou informed the committee that if EOB receives the $350,000 to purchase mid-sized vehicles, the vehicles will all meet ADA (Americans with Disabilities Act) requirements because EOB mechanics are prepared and able to install wheel lifts into buses.

Senator Rawson closed the hearing on S.B. 272 and opened the hearing on S.B. 307.

Mike L. Baughman, Lobbyist, Humboldt River Basin Water Authority, referenced the handout prepared by the Humboldt River Basin Water Authority (Exhibit H.). He said the Humboldt River Basin Water Authority seeks passage of S.B. 307 for authority to undertake evaluations of water management alternatives in the Humboldt River Basin. He directed attention to page 3 of the handout depicting the Humboldt River Basin, which is about 7,000 square miles in the northern part of the state. He said major communities located along the area are Elko, Carlin, Battle Mountain, Winnemucca, and Lovelock. He noted Interstate 80 goes through the area, as does the Union Pacific Railroad.

Mr. Baughman informed the committee the study would address improved management of water resources in the Humboldt River Basin. He pointed out the management needs to be improved to minimize the evaporative loss of water in the Humboldt and Carson Sinks. He said that presently water is flowing through the system into the Humboldt Sink, out of the Humboldt system into the Carson Sink. He pointed out the water has evaporated as much as 100,000 acres a year over the past several years.

Mr. Baughman said management also needs to be improved to mitigate adverse consequences of flooding. He called attention to the photos on page 4 of the handout, which show consequences of high water in the Lovelock area of the Humboldt Sink. He pointed out the high water is approaching and impacting the irrigated farmlands in the Lovelock valley. He indicated Lovelock is one of the most important agricultural areas of the state. Mr. Baughman noted the Pershing County Water Conservation District reports that in the last year the district came within one-tenth of a foot of having the water go over the levies and inundate farmlands in the Lovelock valley. He pointed out the photos also show the effects of the high water table on the agricultural lands. He directed attention to a parcel of land in which there was standing water. He said those fields have basically soured and crops cannot be grown on those fields under that condition.

Mr. Baughman said the evaluations would help reduce year-to-year variations and uncertainty in water availability. He said page 5 of the handout shows the history of flows in the Humboldt River Basin, the number of years flows have been below average, and the number of years flows have been above average. He explained the purpose of managing and enhancing the flows of water in the Humboldt River Basin would be to even these variations out and get the amount of flow coming down through the river system closer to the annual average. He added this would mitigate flood hazard and provide water for beneficial uses on a more certain basis.

Mr. Baughman said the evaluations would also provide additional habitat for wildlife and enhanced opportunities for water-based recreation in Nevada. He mentioned the state’s recreation planning process, which is updated every several years, always shows a continuing need for water-based recreation in Nevada.

To give perspective on water production in the basin, Mr. Baughman informed the committee the Humboldt River produces about 296,000 acre-feet per year. He said there are approximately 690,000 acre-feet of decreed and permitted water rights within the basin and the Pershing County Water Conservation District has rights to 137,000 acre-feet of the 690,000. Obviously, he said, reuse of water is a key factor. He said irrigation in the Lovelock area is a very important part.

Mr. Baughman said the need for enhanced management of flows in the Humboldt Basin storage is something that has been considered for a long time. He cited a 1964 study done by the State Department of Conservation and Natural Resources which found that upstream storage would help minimize the dangers associated with "rotation." He explained "rotation" is when an irrigator takes a portion of his water right in turn, hoping the next time his turn comes up there will be water there. He said if water is not there, even though that irrigator has a senior right he does not get any more water.

Mr. Baughman informed the committee the $250,000 appropriation in S.B. 307 would be used to complete the following activities:

• Evaluate water management alternatives to determine those with the highest degree of technical, institutional, economic, and fiscal feasibility. Examples include on- and off-stream storage, groundwater recharge and recovery, and conjunctive use. Page 8 of the handout lists all sites identified in the Humboldt River Basin where storage of water has been shown to have potential merit. Sources of the different studies are also on page 8 and some go back as far as 1937. The notion that storage is a key component of water management in the Humboldt basin has been around a long time. The last of the studies was done in 1976. Nevada has not studied storage in the Humboldt River Basin for roughly 23 years.
• Prepare preliminary cost estimates for development and operation of the most feasible alternatives.
• Evaluate options for financing development and operation of the most feasible alternatives.

Mr. Baughman said the completion of the aforementioned tasks will position the five counties which comprise the authority to select and, if warranted, implement one or more of the alternatives for management of water resources in the basin.

Mr. Baughman informed the committee the Humboldt River Basin Water Authority is pursuing other sources of funding to supplement this endeavor. He said the authority has applied for a $25,000 Community Development Block Grant from the Commission on Economic Development. He added the authority has also committed $5,000 of its limited resources and envisions a total budget for this project of $280,000.

Mr. Baughman said if the project is funded and work is started around October 1, 1999, the evaluation of water management alternatives should be completed and the counties should be in position to move forward with implementation by approximately November 30, 2000.

Mr. Baughman informed the committee this request for state financial assistance is consistent with recommendations of the recently completed Nevada State Water Plan and noted relevant details of that plan are listed in the handout.

Mr. Baughman explained the Humboldt River Basin Water Authority was created by Elko, Eureka, Lander, Humboldt, and Pershing County commissions through an interlocal agreement. He said the agreement was approved by the Office of the Attorney General. He noted that since 1993 the 15-member board of directors has met quarterly to identify and address water resource issues in the Humboldt Basin. He noted members are volunteers and represent a cross section of interests.

Mr. Baughman stated key issues of the Humboldt River Basin Water Authority have included exportation of water from the Humboldt Basin, federal acquisition of water rights, maintenance of water quality, local water planning and its relationship to the State Water Plan, mine dewatering, flood hazard reduction, and alternatives for minimization of Humboldt River flow into the Humboldt and Carson Sinks. Mr. Baughman underscored the last point, noting that because the water flows out into the sinks and evaporates, a lot of water is lost that could otherwise be put to beneficial use.

Mr. Baughman said the five counties that are members of the authority have contributed $6,000 to $8,000 a year to fund operations. He noted Humboldt County administers all funds of the Humboldt River Basin Water Authority. He added the funds are audited every year as part of the county’s normal audit process.

Mr. Baughman called attention to the agenda for the next meeting of the Humboldt River Basin Water Authority which he said provides a sense of the kinds of issues the authority is involved in and deals with.

Mr. Baughman noted the handout also includes copies of resolutions from counties supporting S.B. 307 and a letter from State Senator Dean A. Rhoads, Chairman, Legislative Committee on Public Lands, to Senator Raggio encouraging this committee to give consideration to S.B. 307.

Senator Neal said all Mr. Baughman’s talking points suggest the construction of a dam and asked whether that is what this proposal would lead to. Mr. Baughman replied that is one distinct possibility, but there are other possibilities. He mentioned the groundwater recharge and recovery programs, also called groundwater banking, is another possibility. He said the State of Arizona and Douglas County are talking about storing surface water in aquifers during periods of high flow and then taking water out of the aquifer during periods of low flow and putting it back into the stream. He said that is a viable option in some circumstances. Mr. Baughman explained that building a dam in this era is a difficult proposition, so the authority must consider all options.

Senator Rawson directed attention to page 8 of the handout, which indicates potential reservoir sites identified during past studies and shows the estimated storage capacity for each site. He asked whether the authority would likely propose the sites with the larger estimated storage capacity. Mr. Baughman said the feasibility study would determine that and there would be several factors to consider. Those factors may be the practicality of developing the site in terms of institutional and technical issues and the cost per stored acre-foot (how much water the site can store versus cost of construction and cost of operations). Mr. Baughman pointed out this water would have monetary value. If Nevada could save water that is now flowing to the sink and evaporating and store it in the upper basin, that water would have a value and perhaps these projects would have a revenue stream. So, he said, it would not necessarily be the larger projects that accomplish the most beneficial cost per stored acre-foot.

Senator Rawson asked whether the U.S. Geological Survey (USGS) had studied this area. Mr. Baughman said it has. He added that much of the USGS work has focused on groundwater activities and the Humboldt River Basin Water Authority envisions having access to much of that information. He said USGS has recently studied areas that are candidates for "recharge groundwater recovery programs" and has identified areas that might serve for "groundwater recharge." He noted the mining industry has produced a tremendous amount of information and it is anticipated the industry would make that information available.

Senator Rawson asked the quality of the water being discussed and whether it has a high content of alkaline. Paul Miller, Chairman, Humboldt River Basin Water Authority, replied that the water to be entered into the Humboldt River meets drinking water standards. He explained there is a huge water treatment plant at Boulder Flat to guarantee the water flows in at drinking water standards.

Senator Rawson referred to the flooded and soured fields in the photo and asked whether that water has a high mineral content. Mr. Baughman indicated that is the problem with allowing the water to flow to the Humboldt Sink. He explained there are some natural elements in the water, but the water in the river and in the tributaries to the river is very high quality. However, he said, in the sinks there are high-alkaline soils and as the water concentrates there the alkalinity and salts are brought to the surface. He said that impairs growth because plants are not able to tolerate that water.

John Milton III, Chairman, Board of Commissioners, Humboldt County, pointed out how important the five counties are to the economy of the state. He said nearly 63 percent of Nevada’s irrigated acreage is in those five counties and the Humboldt River is one of the major sources of water to this irrigation. He said it is important to the residents of the state to protect this water source and get the best use from this valuable resource.

Mr. Miller said that over the past 60 years upstream storage of water from the Humboldt River has been proposed. He noted that most of that time Pershing County had opposed these projects because of the eventual flow of water to the Ryepatch Reservoir, with which Pershing County irrigates crops. He informed the committee Pershing County is now part of the 5-member board working towards solutions to the mine dewatering and the peak flood conditions. He said mining is important in Nevada and these five counties are major participants in this mining. He explained Nevada is mining gold and mining water and the mines are purchasing the large ranches around the dewatering areas for possible future mitigation of decreased flows as mines are phased out. He said there is also a possibility the dewatering has caused cones of depression. He explained that mining is moving from large open pit mines to deep underground mining, which leads to increased dewatering, up to several thousand feet. He said that although he works with the mining industry, he is concerned about what is going to happen to these areas in the next 20 years. He said nobody knows and pointed out that is one of the reasons the authority is asking for money for this study. He indicated the study would help resolve the mining issues and would help this committee because mining is a major contributor to the state and to every member county.

Senator Jacobsen pointed out the state engineer is not on the agenda for the next meeting of the Humboldt River Basin Water Authority. He indicated his concern that there is no end to studies and stated he is not in favor of more studies. He said he realizes, however, "as time changes other things change with it." He acknowledged there is probably a need to update the information, but he is somewhat reluctant to advocate for this $250,000 study because the handout indicates the authority will hire an outside firm that is not involved in the issues. He pointed out a number of constituents in his area objected to the study because they do not want to lose the water rights they currently have. He admitted that if Douglas County had built the Watashema Dam years ago, 90 percent of its problems would already be solved. However, he said, even at that time the water users did not want to pay for it. He indicated the thinking was, Why should ranchers pay for something they are getting for nothing? He said the ranchers put their faith in old water rights.

Senator Jacobsen reiterated his concern regarding providing money for another study. He said it may, however, be a necessity because mining has changed the picture. He stated he is dumbfounded about the amount of water coming from those mines. He opined Nevadans do not want to be dictated to and want to solve their own problems. The Senator said they also want to protect what they currently have. He said the committee needs more information on the study’s goals and priorities need to be identified. He said what a private consultant firm might see as feasible might not be the right direction for Nevada.

Senator Jacobsen said Lake Tahoe is a good example of a situation "studied to death" for 20 or 30 years. He said work has finally started that will guarantee Lake Tahoe’s clarity. He admitted "if you do not plan to plan, you plan to fail." He stated that water has become so precious Nevada cannot afford to waste it.

Mr. Miller responded that the big difference since previous studies is the mining dewatering and the resulting increase in water. He said Pershing County Water District currently receives all the extra water that comes down the river. Before, when these dam studies were made, Pershing County claimed to have priority water rights. He stated, "Lovelock is now saying this water is devaluing crops and land and they want to consider these aspects, which is a different situation than what existed over the last 60 years." He said it is necessary to study this to arrive at solutions to help the mining industry, the upstream users, and the downstream users. He said everyone is concerned about this.

Mr. Baughman said there were members of the board of directors who shared Senator Jacobsen’s concern and the board grappled with what to call the project. He pointed out the board members are "doers, not studiers" and that Mr. Miller is a private businessman in the construction business who builds things. He said there is a tremendous amount of information already available. The USGS has done a lot of work and the mining industry has done a lot of work. He said five counties have now coalesced around this issue and are determined to do something constructive. Mr. Baughman said it is important to gain the benefit of all this water that is currently being wasted. He said the board also considered having USGS do this work, but USGS does studies, not projects. Therefore, he said, the board backed away from that and has considered hiring an engineering firm to arrive at conceptual plans. He noted the goal is to take this project to the point where the decision makers in the five counties could review options and decide to go forward and actually implement "Project X." He said the next steps would be conceptual design engineering and financing to implement the project and do something to save this water. But, he said, there is much information to assimilate to ensure selection of the right course of action, which must be feasible and implementable.

Senator Mathews recalled that about 5 years ago there was an Echovision project done for Washoe County. She asked whether that study would fit into this in any way and asked whether the USGS could be used to conduct the study and then a firm could be hired to do the project. Mr. Baughman said that is exactly what is proposed. He said the authority proposes to use the data already developed by USGS and the mining industry. He said the USGS information is in the public domain and the mining industry has been very cooperative in making information available. He said the universities are also doing work regarding water resources. He responded the Echovision project did produce information, but it was a private project between Sierra Pacific Power Company and the contractor and some of that information may be proprietary. He assured the committee the authority would acquire all information that is in the public domain and use that information through the process with the engineering firm and make the right choices to manage the water in this basin.

Regarding Echovision, Mr. Miller said concern about losing this water to some other area outside the basin, such as Washoe, was one of the reasons this authority was created.

Senator Mathews indicated she still questioned this, because the second line of S.B. 307 states that the Humboldt River Basin Water Authority is requesting $250,000 for a study, yet USGS will do that study. She asked whether that is what USGS will charge.

Mr. Baughman replied the authority does not envision having USGS do this work. Senator Mathews said her question is whether USGS could do it with federal funds, saving the state $250,000. Mr. Baughman said if the USGS could do this evaluation, it could match contributions from the state and the authority, but USGS tends to do research and produce data. Senator Mathews asked, "What is a study if it is not research?" Mr. Baughman said this would be an engineering project, or preengineering to select a project.

Senator Rawson closed the hearing on S.B. 307 and adjourned the meeting at 10:12 a.m.

RESPECTFULLY SUBMITTED:

Jean Laird,

Committee Secretary

APPROVED BY:

Senator Raymond D. Rawson, Vice Chairman

DATE: