ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Government Affairs

Seventy-First Session

February 16, 2001

The Committee on Government Affairswas called to order at 8:12 a.m., on Friday, February 16, 2001. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Douglas Bache, Chairman

Mr. John J. Lee, Vice Chairman

Mr. David Brown

Mrs. Vivian Freeman

Ms. Dawn Gibbons

Mr. David Humke

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Bonnie Parnell

Mr. Bob Price

Ms. Debbie Smith

Ms. Kathy Von Tobel

COMMITTEE MEMBERS EXCUSED:

Ms. Merle Berman

Mr. Wendell Williams

STAFF MEMBERS PRESENT:

Eileen O’Grady, Committee Counsel

Dave Ziegler, Committee Policy Analyst

Virginia Letts, Committee Secretary

OTHERS PRESENT:

David Noble, Assistant General Counsel, Public Utilities Commission

Michele Richardson, Assistant City Manager, City of North Las Vegas

Sean McGowan, City Attorney, City of North Las Vegas

Jeanne Greene, Director, Department of State Personnel

Phillip Brittenham, Assistant Personnel Officer, Department of Motor Vehicles and Public Safety

Debra Olson, Director of Business and Personnel, Business Center North, University and Community College System

Kareen Masters, Personnel Officer III, Department of Human Resources

Bob Gagnier, Executive Director, State of Nevada Employees Association

Assembly Bill No. 91: Authorizes imposition of fee for certain complaints filed with public utilities commission of Nevada. (BDR 58-449)

David Noble, Assistant General Counsel for the Public Utilities Commission, testified the bill instigated a $200 filing fee for complaints filed by utilities and other entities regulated by the commission. The commission felt the legislation was necessary because of deregulation, and with a more competitive market they were seeing more complaints by utilities against each other. The original intent of Nevada Revised Statutes (NRS) 703.197 was to exempt consumer complaints for those who could not afford the $200 filing fee. Now corporations were filing complaints against each other and the commission felt there should at least be a minimum fee to cover some of the initial costs.

Mr. Humke questioned if the $200 fee was sufficient. Mr. Noble responded the filing fee had been a benchmark for almost 20 years and did not cover noticing costs. Those costs ran anywhere from $600 to $1,000 just to cover noticing requirements of the initial petition or complaint.

Mr. Humke felt in an era of deregulation where it was utility against utility the complaints were not brought lightly. Mr. Noble agreed, and added that there was an opinion among the entities it was used as a bargaining chip for other negotiations outside of the commission’s authority. He noted there were valid reasons for complaints being brought before the commission and those were addressed.

Mr. Humke questioned if the $200 fee was in proportion to the total cost of a company that brought a complaint. He asked what the actual cost was to the commission when a company brought a complaint before them.

Mr. Noble replied that from the commission’s standpoint, if a complaint was filed, general counsel’s office reviewed it and then it was brought to the commission where it was scheduled for further hearing. If the complaint went through the entire hearing process, the cost would be between $10,000 and $30,000. A lot of complaints, however, could be reviewed by the general counsel’s office, and after they released their opinion the commission could act at that point. In those cases the costs would be more along the lines of $2,000. Looking at the cost to the utility as far as an attorney’s billable hours, it could be from a few thousand dollars up to fifty thousand dollars, depending on the complexity of the complaint.

Mr. Humke wondered if the commission would be opposed to a higher filing fee. Mr. Noble replied he had no opposition, but something like that would have to be submitted to the commission for placement on one of the next agendas.

Ms. Parnell questioned if a filing fee was a common practice in other states. Mr. Noble informed her he had not checked into other state’s procedures, but he could obtain that information and report back to the committee.

Mrs. Smith asked if individuals ever filed complaints and if the commission felt that number would escalate with the advent of deregulation. In response, Mr. Noble pointed out the number had already increased, especially in the telecommunications industry with the advent of “cramming” and “slamming.” About 90 to 95 percent of the informal complaints the consumer division handled were with phone carriers.

Mrs. Smith asked if the level of complaints and investigation was different than the formal complaint one utility filed against another. Mr. Noble mentioned almost all consumer complaints were filed orally. They were mostly phone complaints, which were usually resolved by the consumer division and rarely reached the point of being submitted to the full commission. He thought only 20 formal complaints, at the most, were brought to the commission in one year.

Mr. Lee wondered if there were more actual filed complaints initiating from one entity to another. Mr. Noble related that currently there were only 10 to 20 a year, but the commission felt it was bound to increase because of deregulation in the electric market, as well as in the natural gas market as it became more competitive

Mr. Lee inquired if the commission had the ability to fine a utility. Mr. Noble replied under NRS 703.380 the commission was allowed to impose civil penalties if the action violated a statute or a commission order. Those actions would go before district court to ascertain the actual dollar figure to be collected.

Mr. Lee asked if the fine stayed with the organization or went back to the General Fund. Mr. Noble indicated it depended on which statute it violated. If it was a commission order, his understanding was the fall-back went into the state General Fund. In a “call before you dig” violation, when a gas or telephone line has been damaged, the fine was at least $2,500 and could be as high as $10,000. If the fine was levied by a commission order through a hearing, the money went into one of the state educational funds.

Mr. Price wondered if there was a fee for an individual customer filing a complaint, or only between the regulated utilities. Mr. Noble said it only affected a utility or regulated entity falling under the supervision of the commission.

Mr. Neighbors interjected he had complaints from some of his constituents who had gone into the public utilities office to have copies made of documents and they had been charged between $2 and $3 for a copy. Mr. Noble believed it was 25 cents per page. Mr. Neighbors related he would bring in receipts because they had paid quite a bit more than 25 cents.

Mr. Bache pointed out legislation had been passed stating fees for public documents must reflect the actual cost of reproducing them and he indicated either Mr. Ziegler or Ms. O’Grady could give Mr. Noble the statute. He went on to say he assumed the way the filing fees were presently being collected was through the “mill assessment.” If that was true he wondered if they would then request a reduction in the “mill assessment” to offset the assessment fee of $200.

Mr. Noble responded that most likely the “mill assessment” would be reduced a little bit. The amount of revenue generated by the filling fees was quite small in comparison with the actual amount of money received through the “mill assessment.”

Mr. Bache asked if the “mill assessment” charges were left intact, why bother with an additional $200 fee. Mr. Noble indicated the commission felt an additional fee was needed so people would not jump right in and bring frivolous charges before the commission.

Mr. Bache questioned if the “mill assessment” would rise due to increased filings because of handling complaints between utilities. Mr. Noble agreed.

Mr. Mortensen noted he liked the idea of the fine coming out of the utilities pocketbook rather than the ratepayer.

Mr. Lee pointed out in Section 3 of the bill “if an application was rejected by the commission because it was inadequate or inappropriate, the filing fee must be returned.” However, in Mr. Noble’s testimony, he had indicated the commission would keep the $200 filing fee.

Mr. Noble remarked if the commission felt it was an issue they should not be involved in, the fee would be returned to the person filing the document.

Mr. Lee asked if Section 3 were removed, would it enhance the commission’s ability to deal with the issues of the utilities pushing each other around. Mr. Noble replied there were other filings from entities, such as a filing for a merger approval, which might not fall under the jurisdiction of the commission. If Section 3 was removed, the money would be kept and he did not feel that was something the commission wanted to do.

Mrs. Gibbons questioned the difference between an individual and a large company filing a complaint. If there was a big difference between the fees she felt the large companies would be tempted to urge individuals to file on their own behalf. She also asked for a clarification on what “mill assessment” meant.

Mr. Noble replied utility complaints were generally broader while consumer complaints dealt with personal experiences of an individual. Theoretically, he guessed a utility could have their president or vice president file a complaint against another utility. However, so far there was no indication of a trend in that direction. As far as the definition of a “mill assessment,” an assessment was levied annually against all public utilities based on their gross operating revenue for the past year. They had the option of paying the assessment by July 1 of the particular year or it could be paid quarterly. He believed the statute that dictated the option was NRS 704.033.

Mr. Price wondered if it was possible to obtain a list of complaints for the previous year. Mr. Noble responded he would provide a list to the committee.

Ms. Parnell commented it seemed that with all that was transpiring with the utilities, it was difficult to figure out what was best for the consumer, while trying to keep all the utilities operating. She was uncomfortable with adding something to the mix. Mr. Bache indicated the law would apply to all utilities regulated by the commission, not just electric utilities.

Mr. Mortensen asked to be provided with a copy of the list Mr. Price had requested, and Mr. Humke pointed out it was a policy for any request that came before the committee that all members would receive one.

Mr. Bache remarked if the committee requested something copies would be provided to all the members, but if it were an individual request it would be provided only to the member who requested the item. He pointed out NRS 239.052, and possibly 239.053, provided the citations applicable to copy fees. He then closed the hearing on A.B. 91 and opened the hearing on A.B. 93.

Assembly Bill No. 93: Revises provisions of charter of City of North Las Vegas concerning appointment of city attorney. (BDR S-431)

Michele Richardson, Assistant City Manager, City of North Las Vegas, introduced the city attorney, Sean McGowan, and disclosed they were both there to speak on the bill, and if A. B. 93 passed, the effect it would have on the city charter. The rationale for submitting A. B. 93 was made because during the last session S.B. 454 of the Seventieth Session was passed and it changed the reporting structure of the organization. The city attorney would report directly to the city council as opposed to the city manager. In hiring the city attorney, the council felt they wanted to have enabling legislation allowing them the opportunity necessary to hire a private firm to provide services associated with the city attorney.

Mr. McGowan related he would clarify the function of the city attorney. In addition to himself, there were six full-time city attorneys serving various needs in a rapidly developing community, such as the police department, detention center, and municipal court. The city also employed about nine outside law firms, which supplemented in-house services. The outside attorneys worked mostly on litigation, reporting directly to the city attorney. In effect, the city attorney position managed both in-house and outside attorneys. If the bill were implemented it would allow the council to have an additional tool in managing the legal function by allowing outside law firms to be a city attorney in whole or in part and would report directly to the city council. He stressed to the committee he had no personal stake or political agenda in speaking for passage of A.B. 93.

Before he continued, Mr. Bache wished to ascertain if the bill was in any way meant to eliminate Mr. McGowan’s position. Mr. McGowan assured Mr. Bache it was not, as he had an employment contract with the city. The council wanted legislation in place as a business mechanism if needed.

Mr. Brown questioned if a firm was retained by the city could they report back to the city council under any circumstance without A.B. 93 in place. Mr. McGowan felt it was needed because the charter presently provided only the city attorney as the chief legal officer for the city. To adjust the reporting relationship it was necessary to have legislation in place.

Mr. Brown wondered if there were any precedents already established in actually designating a firm as a city attorney. Mr. McGowan replied there were. In Nevada it was primarily some of the smaller cities, such as Elko, Wells, and possibly Caliente, which have law firms acting as city attorneys. In California some of the suburban communities in the Los Angeles area employed the same criteria.

Mr. Brown asked if there was also an individual city attorney in Elko, Wells or Caliente. Mr. McGowan was not sure if a law firm represented itself as the city attorney, or if there was an additional individual acting in that capacity. He added he would check.

Mr. Brown questioned if Supreme Court rules had been reviewed for conflict issues, and if there were any Supreme Court rules that would raise a review question. Mr. McGowan said the rules had been reviewed and it would certainly challenge any law firm who wished to become a city attorney because of the clientele they had in addition to the city of North Las Vegas, so there would have to be assurance there was no conflict of interest.

Mr. Brown queried if the conflict extended down to paralegals and secretarial staff. Mr. McGowan responded there were Supreme Court rules that insulated a particular section or department of a law firm, which must avoid direct and indirect conflicts.

Mr. Brown asked to be provided specifics because he was not aware of what those laws were. Mr. McGowan replied he would like to supplement his remarks with additional material on the entire matter.

Mr. Lee inquired if the city council allowed outside firms to act as city attorneys was there the possibility of the firm escalating its billing practices because he felt there was the possibility of having the procedure get out of control and affect the operation of the city of North Las Vegas.

Mr. McGowan thought the entire matter would have to be looked at to determine how it would work and if there needed to be an administrative assessment.

Ms. Richardson interjected the city did not have the exact scenario with them at the present time under which the amendment to the charter would be implemented. From a conceptual viewpoint, the council wanted to have the ability to use the outside firms, but she assured the committee that the council was fiscally responsible, having done everything to minimize costs that might impact the citizens.

Mr. Bache stated it was his understanding the council had the authority, on a case-to-case basis, to hire outside counsel to handle issues. He felt the legislation was directed more to a change in format. Mr. McGowan indicated that was correct, and in addressing in-house costs approximately 30 to 40 percent was spent on outside attorneys with remainder on in-house.

Mrs. Gibbons questioned the amount allocated for the entire annual city budget and wondered what the cost to the city budget would be for the city attorney. Mr. McGowan responded the city attorney expenses were included in the budget. Presently the total cost for lawyers was approximately $2 million, and depended on the number of claims under consideration. He added North Las Vegas had one of the busiest municipal courts within the state. He presently only had two deputies who prosecuted misdemeanor actions in municipal court, and he had requested additional help. The workload could be handled with additional in-house personnel, but at some point the council might wish to change the way the legal functions were handled for the city.

Ms. Richardson interjected that typically what happens across the board within the budgeting process and use of consultants was a corresponding balance between staff and those services provided for by consultants. If the consultant patterns rose, staffing patterns would have to be adjusted. It depended entirely the issue, so there was not necessarily an increase or decrease in staffing.

Mr. Brown asked if any of the larger municipalities had similar arrangements. In response Mr. McGowan indicated he had no knowledge of outside firms being used in those areas.

Mrs. Smith questioned if there was a charter commission or any type of advisory group that addressed charter change requests. Ms. Richardson replied there was no formalized charter review commission in place. Staff in her office looked at issues that impacted the city charter based on items that came up during the course of business. If there were concerns about issues in the charter, her office prepared a resolution for review by the city council, which had the final say on any amendment proposal to be submitted to the legislature.

Mr. Mortensen wondered if the $2 million figure mentioned referred to in-house staff only, and did not include outside consultants. Mr. McGowan indicated the figure included both during the last fiscal year.

Mr. Mortensen questioned what type of legal actions predominated the use of the city attorney’s budget. Mr. McGowan responded in-house staff compensation was $1.5 million for seven attorneys, paralegals, investigators, and clerical staff. About $500,000 was for outside attorneys who dealt with litigation mostly in the field of public safety.

Mr. Bache stressed to the members that the legislation only affected the charter of the particular city that requested it, not all cities in the state. He then closed the hearing on A.B. 93 and opened the meeting on A.B. 95.

Assembly Bill No. 95: Revises provisions regarding state personnel system. (BDR 23-343)

Jeanne Greene, Director, Department of Personnel, testified that during the Governor’s review of state government the personnel subcommittee endorsed suggestions to streamline and simplify the state’s rules and regulations. She and Mr. Gagnier had met and reached an agreement on changes that would be beneficial to both the employee and the employer. A.B. 95 addressed one of the changes; however, the intent of the bill was twofold. Section 1 proposed to amend NRS 284.290 in order to standardize the probationary period for all state employees. Section 2 proposed to amend NRS 284.340, eliminating the 30-day grace period that followed the date a performance evaluation was due. She handed out an amendment (Exhibit C) ensuring that employees would continue to be deemed standard if no report on their performance was filed by the due date. Presently there was a 6-month gap between the performance evaluation and the merit increase. That issue created problems for both the supervisor and employee. Currently there were only 2 percent of employees within the state classified at a grade 22 or below. She felt supervisors might not feel comfortable completing a performance evaluation that would be the basis for granting or withholding a merit increase 6 months down the road. Presently there were no provisions within the statutes that allowed extension of the probationary period. In a tight labor market it was important to enhance new employees’ prospects in adapting to public service and acquiring the critical knowledge and skills needed to successfully complete their probationary period. She believed creating the 12-month probationary period would assist in the effort to create equality for all employees.

Ms. Greene went on to say the 30-day grace period in Section 2 created confusion for everyone concerned. Most employees expected an evaluation of their performance prior to their anniversary date, and assumed their performance was standard if no evaluation was completed. Also, those with eight or more years of service expected to receive a longevity reward. The merit salary increases were automatically awarded within the payroll system on the employee’s anniversary date unless there was a substandard performance review submitted prior to when the paycheck was processed. Subsequent to the merit increase, if there was a substandard review within the 30-day grace period then the money received had to be returned through the payroll deduction process. The 30-day grace period language had many times been misinterpreted and misapplied by both managers and supervisors and that was why the department was requesting the deletion.

Mr. Bache stated the only problem he had was the language increasing the probationary period from six months to a year for custodial employees. He felt six months was sufficient in evaluating an employee for the job he or she was hired to do. Ms. Greene added agency representatives would respond to that issue based upon their specific experience.

Philip Brittenham, Assistant Personnel Officer, Department of Motor Vehicles and Public Safety, testified his department was in support of the proposed changes. There were quite a few employees within the department that started at an entry-grade level and possessed the least amount of experience. Supervisors were required to evaluate those people in the least amount of time and he felt six months was entirely too short. People with the lowest skills or less work experience needed more time to acquire knowledge in performing their jobs satisfactorily. It seemed arbitrary to expect those who were less skilled to be required to gain those skills in a shorter period of time.

Mr. Bache questioned, other than custodial employees, what other jobs fell within the entry-level grade. He did not see that a great deal of expertise was needed at the custodial level that could not be learned within a six‑month period.

Mr. Brittenham agreed there were probably some jobs that could be learned very quickly, but many entry-level clerical and office jobs required skills that people just out of high school or without work experience needed to learn in order to accomplish their jobs. Because training was needed, a six-month period was not sufficient to really evaluate their performance and those employees were caught up in the same established pay grades as custodial workers.

Debra Olson, Director, Business Center North Personnel Services, University and Community College System of Nevada, stated they were in support of A.B. 95. One of her primary functions as a director was to oversee employee relations for the Business Center regarding performance issues. Often the short probationary period became a problem for a supervisor as there was not enough time to really evaluate an individual and the supervisor had no recourse in extending that time. Those employees who filled the administrative aide positions did not have enough time to develop the skills needed to do their job properly. She thought the extension of the probationary period would benefit both the employee and the supervisor. It would not force the employer to make a premature decision on retaining or terminating an employee in the fifth month of employment.

Mr. Humke requested clarification on the benefits to custodial help in lengthening the probationary period. As an example, if the person had a problem with time and attendance or substance abuse, would the appointing authority seek to work with that person to solve the problem, and would a longer probationary period facilitate a solution. Ms. Olson replied the employer would try to work with that person, because hiring anyone into the state system was time consuming and costly. Most supervisors worked with any employee and gave them as much of an opportunity as possible. Most of the custodial positions did their work at night and were unsupervised, thus they needed the best skills to accomplish the job.

Mr. Neighbors asked if there was a right-of-appeal process available to the employee during the probationary period. Ms. Olson responded there was no right-of-appeal with the state.

Mr. Bache noted that over the last four or five years it seemed the state had been lessening training for new employees and wondered if that was the case within the college system. Ms. Olson stated if she received a call on a problem with an employee the first thing discussed was the work performance standards, as well as the type of training they had received. If there was insufficient training it was provided, so training was a main focus of the university system.

Kareen Masters, Personnel Officer III, Department of Human Resources, testified her department was in support of A.B. 95. She read from her prepared statement (Exhibit D). Classes at Grade 22 and below were required to have a six‑month probationary period as those employees usually had minimal skills. There were many positions, such as Mental Health or Mental Retardation Technician I, that were required to attend occupational training classes and a six-month time limit was not always sufficient.

Bob Gagnier, Executive Director, State of Nevada Employees Association, apologized to the chairman for providing him with some incorrect information. He had included an extra step when he estimated the number of people who would be affected by the bill. He had quoted a figure of 1,766 employees but on further review the figure was 900 too high, because he had included the Grade 23 employees in that figure. He then addressed Section 2 of the bill and the amendment (Exhibit C) provided by Ms. Greene to the committee. The amendment had come about due to the inequities in the original bill. The way it was written there was a 13-month probationary period rather than a 12-month probationary period. It was ambiguous because an employee who was rejected during probation had no appeal rights, but at 5 p.m. on the last day of the twelfth month that person became permanent in those lower classifications. The question then was if within the next 30 days that employee received a below-standard evaluation did that employee have appeal rights. His group had no problem with Section 1 of the bill. Basically he was in support of the Department of Personnel’s efforts on the bill.

Mr. Bache closed the hearing on A.B. 95 and stated there was a Bill Draft Request (BDR) needing introduction.

· BDR 35-820 – Requires board of directors of department of transportation to relinquish portions of certain state highways to county or city under certain circumstances (A.B. 175).

ASSEMBLYMAN LEE MOVED FOR INTRODUCTION OF BDR 35‑820.

MOTION SECONDED BY MR. NEIGHBORS.

MOTION CARRIED, MRS. BERMAN, MR. WILLIAMS, AND MS. FREEMAN WERE ABSENT FOR THE VOTE.

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Assembly Bill No. 60: Requires public body to post notice of its meetings on its Internet website, if any. (BDR 18-674)

Mr. Bache stated he would appoint a subcommittee on A.B. 60, with Mr. Lee chairing and Mr. Neighbors and Mr. Humke as members.

The meeting was adjourned at 9:23 a.m.

RESPECTFULLY SUBMITTED:

Virginia Letts

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: