MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-First Session
March 26, 2001
The Committee on Government Affairswas called to order at 9:02 a.m., on Monday, March 26, 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
Ms. Merle Berman
Mr. David Brown
Mr. David Humke
Mr. Harry Mortenson
Mr. Roy Neighbors
Ms. Bonnie Parnell
Mrs. Debbie Smith
Ms. Kathy Von Tobel
Mr. Wendell Williams
COMMITTEE MEMBERS EXCUSED:
Mrs. Vivian Freeman
Mr. Bob Price
Mrs. Dawn Gibbons
STAFF MEMBERS PRESENT:
Eileen O’Grady, Committee Counsel
Dave Ziegler, Committee Policy Analyst
Linda Utt, Committee Secretary
OTHERS PRESENT:
John Scovil, Private Citizen, Lander County
Kathleen Murphy, Private Citizen
Danny Thompson, Lobbyist, Nevada State American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
Ronald Dreher, President, Peace Officers Research Association of Nevada
Madelyn Shipman, Assistant District Attorney, Washoe County
Mary Walker, Lobbyist, Carson City, Douglas and Lyon County
Assembly Bill 365: Requires that certain local governmental employers and employees submit certain disputed issues to arbitrator for binding arbitration in certain circumstances. (BDR 23-1057)
Assemblywoman Smith, District 30, Washoe County brought A.B. 365 forward upon request of several local government employees within Lander County and the city of Elko. Currently NRS 288.215 and 288.217 granted binding arbitration rights to teachers, fireman and police officers, but not to local government employees. Local government employees had specific grievance and arbitration procedures for resolution of disputes. Currently, when two parties were unable to reach agreement with respect to collective bargaining it might take months and sometimes years to reach agreement. Mrs. Smith said there would be testimony by employees in local governments that provided evidence of employee frustration. Local governing boards built certain amounts into budgets and additional monies for raises were never acted upon and not budgeted when negotiations commenced. Additionally, the same governing board gave raises to non-bargaining unit employees that amounted to several times what was negotiated for bargaining unit employees. There was no vehicle available for the employees due to lack of arbitration to determine the financial ability of the local government employer and make that employer address the ability to pay. She stated binding arbitration could be observed as a win-win situation since both parties in the dispute paid one half of the cost incurred. The arbitration process allowed negotiations to be resolved in a more efficient manner and the fiscal impact would be balanced when compared to current situations. Ms. Smith stated if lawmakers believed teachers, fireman and police officers deserved the right to binding arbitration, local government employees should also have that capability.
John Scovil, a private citizen from Lander County, testified on behalf of all non-state public employees who entered into negotiation with the county. The county procrastinated on meetings until the budget process reached completion and the final budget for the county needed to go to the state. After the budgets were submitted they met with the employees. They felt the county made their wage decision before they met to begin a negotiation process. As a result the county employees were not able to receive the Consumer Price Index wage increase yearly. The police, fireman and teachers were also covered under NRS 288 but had a right to go into negotiations and go to final and binding arbitration if they could not reach an agreement. Under NRS 288, the county did not have that right and were faced with convincing an employer to bargain and allow them the same right to binding arbitration. The management employees received a 5 to 10 percent increase yearly; however, non-management averaged 2 percent increases and they had no recourse.
Kathleen Murphy, private citizen, was present in support of A.B. 365. She was a former employee of the city of Elko and currently she worked at the Elko Central Dispatch Administrative Authority as a dispatcher. In July of 1994 she and three other employees were unjustly terminated by the city of Elko. The city of Elko signed a labor contract with Operating Engineers Local Union No. 3 and those who were covered by the agreement grieved the issue, which ended in arbitration in July of 1995. The Union won the grievance and the arbitrator ordered reinstatement of lost wages and benefits.
Ms. Murphy stated because the city of Elko had no agreement for final and binding arbitration in cases of termination, the city was advised by their attorney to reject the arbitrator’s decision. The city council supported the attorney’s direction, which then forced the four of them to go to the U.S. District Court for a fair resolution. In August of 1997, the U.S. District Court moved the trial to Elko and their trial took place at the Elko convention center. Prior to their court hearing they were offered settlements, which the other three employees chose to receive rather than continue with a trial. Ms. Murphy went to trial, which lasted 11 days, and the jury’s final decision was that she had been unjustly terminated. The city of Elko was ordered by the court to reinstate her employment and pay back wages and benefits plus interest for the three-and-one-half years she was out of work. Currently the city paid her $147,000 plus interest and had also been ordered to pay all attorney fees and court costs.
Ms. Murphy summarized she was not sure on the amount her trial cost the city but her attorney fees alone exceeded $200,000. The other three employees settlements exceeded $150,000. If the arbitration award had been honored by the city the amount would have been just over $30,000 and Elko would not have been required to pay the attorney fees. This concerned her not only as a public employee but also as a taxpayer and resident of the city where her tax dollars were squandered. During the lengthy period of time, she was under severe emotional distress and as the sole source of income for herself and three children, suffered financial hardships. The city of Elko also suffered severe financial ramifications and the ongoing costs put more burdens on the taxpayers. Since her trial the city of Elko increased their insurance premiums and as a taxpayer she also paid for their costly mistake.
Chairman Bache stated the bill did not affect him because he was a teacher and already had binding arbitration. Historically the firefighters were the first to receive the binding arbitration and that occurred in the 1970s, then police added this arbitration in 1981 and teachers were added in the early 1990s.
Assemblyman Mortenson did not understand how many groups were without the binding arbitration and why the law was unequal. If local governments were included in the binding arbitration, how many other entities would be left out? Chairman Bache stated the firefighters were the first group to come and identify a problem. The law stated if there was no resolution the Governor could appoint a three-man panel to mediate and had no binding effect over the results of those hearings. The firefighters understood how to use the binding arbitration and received several awards the first few years the arbitration method was in place. The management teams were not as sophisticated when they dealt with binding arbitration as they are today. A few sessions later police processed the arbitration request. Because of their concerns, teachers brought the effort forward for at least ten years before it was passed in the Sixty-Sixth Legislative Session. The only remaining groups not having the arbitration were city and county employees. Chairman Bache said there would be no other employee group left out if A.B. 365 passed.
Assemblywoman Smith said when she was first asked to work on the issue she also asked why some groups received the binding arbitration and some did not. The only reason she was able to identify was because no one had advocated a position for them and no one brought it forward to the Legislature.
Assemblyman Brown asked about paragraph 2 on page 1, and said it mentioned a complete record of the hearing and wondered if it was recorded or reported transcript. Mrs. Smith stated the language in A.B. 365 mirrored the language in the other group’s bills and they did have a recorder who attended the hearings who provided an official transcript. Chairman Bache stated teachers had slightly different procedures from the police and fire statute. He asked if they followed the teacher or the firefighter/police form of statute. Mrs. Smith said she was not sure and was under the assumption from the bill drafters the language was the same and that was the course she took. Mr. Brown also said in the language there was a submission of written statements to the arbitrator and then the arbitrator would select one of those statements. If they followed NRS 388.200 would the arbitrator come up with their own findings or would they select one of the written statements? Chairman Bache responded it was the last best offer package. Years ago Senator Bergevin argued that binding arbitration by package was better than item by item because it forced the two sides to come together and take the best possible offer they could before it was sent to the arbitrator for a final decision. If there were a chance of losing they would not take that risk as much if it were item by item where you could win some and lose some items.
Chairman Bache stated they had a quorum present and it was the last day for introduction of bill drafts and there were several to present.
· BDR 22-197 – Revises provisions regarding notification of certain proposed planning and zoning changes. (A.B. 553)
ASSEMBLYMAN WILLIAMS MOVED TO INTRODUCE BDR 22-197.
ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 20-246 – Authorizes constables, upon request of sheriff, to execute certain process, writs and warrants. (A.B. 557)
ASSEMBLYWOMAN BERMAN MOVED TO INTRODUCE BDR 20-246.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 20-267 – Makes various changes relating to county recorders. (A.B. 568)
ASSEMBLYWOMAN PARNELL MOVED TO INTRODUCE BDR 20-267.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 31-341 – Exempts certain professional and occupational boards from provisions concerning state financial administration. (A.B. 569)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 31-341.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR S-385 – Makes various changes relating to charter of Carson City. (A.B. 570)
ASSEMBLYWOMAN PARNELL MOVED TO INTRODUCE BDR S-385.
ASSEMBLYWOMAN SMITH SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 20-389 – Authorizes board of county commissioners to provide by ordinance for the covering or removal of certain graffiti on private property at county expense. (A.B. 571)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 20-389.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 18-487 – Establishes single fraud control unit for insurance within office of attorney general. (A.B. 572)
ASSEMBLYMAN LEE MOVED TO INTRODUCE BDR 18-487.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR S-185 – Revises provisions governing Las Vegas Valley water district. (A.B. 566)
ASSEMBLYMAN LEE MOVED TO INTRODUCE BDR S-185.
ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.
Assemblyman Mortenson asked again for an explanation of the bill. Chairman Bache read the sheet on the bill and stated it was requested by Clark County.
THE MOTION FAILED FOR LACK OF A TWO-THIRDS MAJORITY.
ASSEMBLYMAN MORTENSON VOTED NAY.
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· BDR 31-357 – Provides for establishment of Nevada college savings program as authorized by federal law. (A.B. 554)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 31-357.
ASSEMBLYMAN LEE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 23-547 – Makes various changes to provisions governing public employees’ retirement. (A.B. 555)
ASSEMBLYWOMAN SMITH MOVED TO INTRODUCE BDR 23-547.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 31-565 – Revises certain provisions governing authority of state board of examiners, requirements for certain agreements for interlocal cooperation between public agencies and fund to stabilize the operation of the state government. (A.B. 556)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 31-565.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 36-567 – Authorizes governor to promote adjutant general to grade of lieutenant general under certain circumstances. (A.B. 561)
ASSEMBLYMAN NEIGHBORS MOVED TO INTRODUCE BDR 36-567.
ASSEMBLYMAN LEE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 28-715 – Revises certain provisions concerning qualification of contractors on public works projects. (A.B. 562)
ASSEMBLYMAN LEE MOVED TO INTRODUCE BDR 28-715.
ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 23-1345 – Authorizes additional deferred compensation plan for state employees and employees of political subdivisions. (A.B. 563)
ASSEMBLYWOMAN PARNELL MOVED TO INTRODUCE BDR 23-1345.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 23-1346 – Makes various changes relating to public employees’ benefits program. (A.B. 564)
ASSEMBLYMAN LEE MOVED TO INTRODUCE BDR 23-1346.
ASSEMBLYWOMAN VON TOBEL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR S-1437 – Establishes for next biennium amount to be paid by this state for group insurance for certain public employees, public officers and retired public employees. (A.B. 558)
ASSEMBLYMAN LEE MOVED TO INTRODUCE BDR S-1437.
ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 18-1440 – Transfers office for hospital patients from department of business and industry to office of the governor. (A.B. 559)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 18-1440.
ASSEMBLYMAN LEE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 23-1443 – Authorizes monthly payroll cycle for certain state employees. (A.B. 565)
ASSEMBLYMAN BROWN MOVED TO INTRODUCE BDR 23-1443.
ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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· BDR 23-1461 – Revises certain provisions regarding peace officers. (A.B. 560)
ASSEMBLYMAN NEIGHBORS MOVED TO INTRODUCE BDR 23-1461.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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Chairman Bache stated since they now had one more member present on the committee he would attempt to process another introduction of BDR S-185.
· BDR S-185 – Revises provisions governing Las Vegas Valley water district. (A.B. 566)
ASSEMBLYMAN NEIGHBORS MOVED TO INTRODUCE BDR S-185.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION PASSED WITH MR. MORTENSON VOTING NAY.
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· BDR 30-358 – Revises provisions governing state financial administration. (A.B. 567)
ASSEMBLYMAN HUMKE MOVED TO INTRODUCE BDR 30-358.
ASSEMBLYWOMAN PARNELL SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT.
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Chairman Bache resumed the hearing on A.B. 365.
Danny Thompson, representing Nevada AFL-CIO, said the issue was to end strife in negotiations. He was told A.B. 365 mirrored the police and firefighters’ last best offer by using the binding arbitration. Prior to the binding arbitration, the negotiations would go on endlessly and the method was designed to have both parties put the real issues on the table. In any negotiation both sides tended to ask for more and expected whatever they could get. The practice of binding arbitration with the last best offer had been proven to work and solved problems in the past for local police, fire and teachers. He felt it was a good method that was proven to work and saw no reason why it would not work for the local government.
Assemblyman Brown asked who arbitrated and what panels were used. Mr. Thompson said there was an arbitrator list and method listed in the law. Each side struck a name from two arbitrator lists and that person would be selected to be the arbitrator.
Ronald Dreher, President of the Peace Officers Research Association of Nevada and also the Professional Peace Officers for the State of Nevada, asked for the support of A.B. 365. For the past 18 years he was involved in negotiations for the Reno Protective Association and other associations throughout the state. Binding arbitration had the best resolution and promoted disputed resolutions without problems. Binding fact-finding arbitration created the end result to those employees. Last best offer was more important and no one wanted to lose on either side. It provided a mechanism to make sure the arbitrator for the last best offer heard your case. A check and balance system promoted and encouraged dispute resolution so it became important to have all necessary information corrected during that arbitration period.
Madelyn Shipman, Assistant District Attorney, Washoe County, said she normally did not like to talk unless she spoke to everyone in advance about the issue. She wanted to ask some clarifying questions about the bill. She said they had never had a delayed process in Washoe County and she understood that was the biggest issue. She asked why there was no panel under the existing law to determine the case and why they were not utilized. She questioned the new paragraph 8 on page 5 and asked the reason for the April 10 date and if it was used to budget numbers for the July 1 start date on agreements. Some agreements went from January through December and some were from July 1 through June 30 so Ms. Shipman was not sure the April date worked in both of those situations. She needed to clarify what the purpose of the July date was and why it was used. Ms. Smith explained the situation in Elko was given only as an example of how binding arbitration would have resolved the situation in a faster and more economical manner. The legal counsel stated the language mirrored existing law for the police, fire and teachers statutes. Ms. Shipman believed it coincided with police and fire and just wanted to advise the committee they had associations that bargained and were not tied to the July 1 to June 30 dates. She was not sure if they needed to change their agreements. Ms. O’Grady, legal counsel, clarified that subsection 8 of Section 4 was moved from 288.205 and placed in a section where it belonged but no new language was added to the bill. Ms. Shipman said they had agreements to extend time between the parties in arbitration because sometimes both parties did not have all their agreements in place.
Mary Walker, representing Carson City, Douglas and Lyon Counties, had concerns with the bill. It took away their ability to solve problems and disputes locally. When they had arbitrators they were often from San Francisco with different perspectives than Nevada. Rural local governments had more financial limitations than larger jurisdictions. They had a process in place that worked well in the past and had multi-year negotiations and contracts with their employees, which worked well. They used the process of going to negotiation, to a fact finder, and then a panel and found it worked well in their areas. She explained the time frames were not always the fault of the local government. They had problems with the union meeting those time frames and gaining resolution. She said they would like to work with the sponsor of the bill and believed there were some issues that needed to be addressed. One problem in Carson City, which was typical of other local governments, was the small number of union firefighters who numbered only 50 to 60. The police were about the same number or a little more and the total number of general employees of Carson City was about 300. Due to the smaller work force the fiscal impact was greater with an arbitrator than in larger cities.
Assemblyman Mortenson asked if the arbitrator who performed their job had access to the budget. Ms. Walker replied they did but they had unions who hired a certified public accountant (CPA) to look at the books. The available finances to fund the arbitration came from other sources such as fuel tax and welfare taxes when the money could have been used to increase fire department salaries. There was a misunderstanding about the local government finances, which were very confusing. Their CPA stated there was $6 million available for the fire fighters. Often they had arbitrators from out of state who did not understand local government. Mr. Mortenson asked why they did not explain this to the arbitrator. Ms. Walker stated they had been fairly successful in the past with arbitrator costs; however, in one instance the CPA took into account the cities and their inventories, which were a part of their reserve funds and considered that money as cash on hand. As a CPA herself she stated their reserve fund should not have been considered as cash.
John Scovil responded to Ms. Walker’s testimony and felt the membership did not have that great of an impact compared to the end result. The arbitrators were impartial and would come in and evaluate, make an opinion and judgment based on the information they received.
Ron Dreyer, Peace Officers Research Association of Nevada wanted to clarify two points. The dates were put on the bill to establish guidelines for expedited negotiations and rarely were used but they promoted and encouraged expedited resolutions to the problem and if they did not reach agreement they moved on to fact finding. The second part dealt with the ability to pay issues and currently under NRS 288.200 in the statutes on page 4 of the bill draft, it sighted the uses of the dollars and how that money would be spent. Education, to the fact finder and the arbitrator, was the most important thing for both sides. The rest of the available money could be used to hire a CPA to show the arbitrator the impact on the health, welfare and safety of the county or the city in which those proceedings took place. The language in the bill was used for checks and balances.
Chairman Bache closed the hearing on A.B. 365 and the meeting was adjourned at 10:14 a.m.
RESPECTFULLY SUBMITTED:
Linda Utt
Committee Secretary
APPROVED BY:
Assemblyman Douglas Bache, Chairman
DATE: