MINUTES OF THE meeting
of the
ASSEMBLY committee on WAYS AND MEANS AND
senate committee on finance
joint subcommittee on human resources/k12
Seventy-First Session
May 16, 2001
The Assembly Ways and Means and Senate Finance Joint Subcommittee on Human Resources/K-12, was called to order at 7:50 a.m. on Wednesday, May 16, 2001. Senator Raymond D. Rawson, Chairman, presided in Room 3137 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.
ASSEMBLY MEMBERS PRESENT:
Mrs. Barbara Cegavske
Mr. Joseph Dini, Jr.
Ms. Chris Giunchigliani
Mr. David Goldwater
Ms. Sheila Leslie
Ms. Sandra Tiffany
SENATE MEMBERS PRESENT:
Senator Raymond D. Rawson, Chairman
Senator Bob Coffin
Senator Bernice Mathews
Senator William J. Raggio
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Fiscal Analyst
Larry Peri, Senior Program Analyst
Linda Smith, Committee Secretary
Senator Rawson stated there were two bills, A.B. 343, which provided for the integration of state and local child welfare systems, and A.B. 512, which appropriated funding to the Department of Human Resources for costs associated with the transfer. Because the legislature needed to reduce the Governor’s recommended budget by $120 million, Senator Rawson had asked that the budget be revised to reflect a six-month delay of the integration. The six-month delay resulted in a savings of approximately $8 million.
Senator Rawson reminded members that staff was extremely busy as the session neared an end and cautioned the subcommittee not to present staff with numerous budget scenarios to “crunch numbers.” However, he encouraged members to voice any major concerns or objections. Senator Rawson then deferred to Larry Peri, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, to discuss the adjustments.
Mr. Peri referred to the packet titled “Integration of State and Local Child Welfare Services” (Exhibit C), which contained a compilation of the resubmission of funding requirements by each of the three entities – Washoe County, Clark County, and the Division of Child and Family Services (DCFS). The packet included a summary of revised cost estimates based on the six‑month delay and the figures that were presented to the subcommittee at the meeting held May 3, 2001, which included the Governor’s recommendations for higher foster care rates and higher salaries for state employees. The Governor had recommended $2,202,835 in FY2002 and $10,686,004 in FY2003 for ongoing costs. The Governor had placed the ongoing amounts in the Youth Community Services Child Welfare budget and the subcommittee had removed those costs at closings held May 10, 2001. When a final figure was determined, any costs associated with the integration effort would be placed in a separate budget account to isolate the ongoing costs. The reductions were $1,174,664 in the first year of the biennium and $4,991,616 in the second year, yielding a revised estimate of $1,028,171 in FY2002 and $5,694,388 in FY2003.
Mr. Peri referred to A.B. 512, which included the Governor’s recommended one‑time appropriation in the amount of $7,994,650. The reduction was $2,397,719; the revised estimate was $5,596,931. The total of the Governor’s initial recommendations was $20,883,489. The total revised cost estimate was $12,319,490, which yielded the difference of $8,563,999, which was deducted from the Governor’s recommendation.
Senator Rawson asked Mr. Peri for assistance in addressing the issues related to the integration of state and local child welfare systems, and emphasized there were still a number of questions associated with the transfer.
Mr. Peri referred to Clark County’s revised estimates included on pages 4 through 11 of Exhibit C. The total revised estimates were roughly $2.9 million for ongoing costs and $3.5 million for one-time costs. The back of page 5 of Exhibit C listed Clark County’s revised time lines for integration based on a six‑month delay. Beginning January 1, 2003, Clark County indicated approximately 98 existing employees of the Division of Child and Family Services would be transferred to the county and 25 new county employees would be hired at that time for the case management function. Given that the numbers were all estimates and projections, Mr. Peri asked if Clark County could explain their ability to be able to hire the 25 new positions at that point in time. Senator Rawson asked a Clark County representative to please come forward.
Adrienne Cox, Assistant Director, Clark County Family and Youth Services, said it was Clark County’s intention to assume the case management responsibilities January 1, 2003. The case management functions would come on-line geographically and new staff would be hired over the course of calendar year 2003. Eligibility processes needed to be developed so the agency could capture federal reimbursement, which was necessary to support the Integrated Child Welfare System. Ms. Cox said the time lines were doable and reasonable.
Senator Raggio indicated his support of the transfer, but was concerned about the amount of state funding that might be required and the expectations of the respective counties as to the state’s continuing obligation.
Kirby L. Burgess, Director, Clark County Family and Youth Services, addressed the concerns expressed by Senator Raggio and said he expected the integration to be an ongoing partnership between the state of Nevada and Clark County and that there would be some ongoing funding expectations between the state and the county. Mr. Burgess emphasized that Clark County had articulated the funding expectations from the very beginning of the process.
Senator Raggio said the scope of the state funding was very unclear and asked exactly what Clark County anticipated the state would be asked to contribute for ongoing costs if the transition was made. Senator Raggio recognized that in many instances the counties were far more financially qualified than the state to carry on the family and youth services programs.
Susan Laveway, Assistant Director, Department of Finance, Clark County, said Assembly Majority Leader Buckley had made a presentation to the Board of County Commissioners addressing the fact that there would be an ongoing state funding responsibility. Ms. Laveway said the counties would continue to do front-end services, such as child protective services, and the state would continue providing funding for back-end services. Senator Raggio asked if the state would be expected to pay for all the new positions forever. Ms. Laveway stated A.B. 343 included a section that addressed a funding formula for the entities and that formula would be developed as part of regulation. Senator Raggio asked if the formula was ethereal and if anyone really knew what the formula would be. Ms. Laveway said the presentation of material to Clark County had been conceptually an ongoing ratio, based on the current front-end services versus back-end services. Senator Raggio asked if legislative approval of the funding for the transfer would establish the ratio. Ms. Laveway said it was her understanding that the information would go back to a committee for approval.
Jim Baumann, Administrative Services Officer IV, Child and Family Services, Department of Human Resources, said there were two funding formulas to be considered.
· The first formula represented a relative share of non-federal funds contributed by the state to pay for child welfare costs being transferred to the counties and the child welfare costs currently paid by the counties. The base year for the formula calculation was FY2000 and the formula had been tentatively calculated at 39 percent state and 61 percent county. The formula would change when services retained by the state under the current plan were transitioned to the counties. Currently, there were two major categories that would not be transitioned to the counties until phase 2 of the project – the medical category, category 17 in Budget Account 3229, and category 13, which was the higher-level placement budget.
· The second formula to be considered represented the allocation of legislatively-approved funding to the state and counties. Clark County and Washoe County allocations were based on costs incurred by the state in FY2000 to provide services to the two counties, factored to the FY2002 and FY2003 legislatively approved budget. The formula proposed that the state and counties would retain their relative position with regard to expenditures of non-federal monies. Under the formula, federal funding would be extracted from the total cost of a position and the remaining amount would be shared by the state and Washoe County. Since all the services had not been transferred, the ratio at that point would be 39 percent state funds and 61 percent county funds. Costs associated with the formula would change as the remaining services were transferred. Categories 13 and 17 would be included and the state share would increase to 55 percent and the county share would decrease to 45 percent.
Senator Raggio said the decrease in the county funding was troublesome and asked what the rationale was for the state bearing a heavier financial burden. What control would the state have over the extent to which the program would be increased? Mr. Baumann said the legislatively-approved appropriation would be the control factor. If the legislature elected not to appropriate funds for the project, the state would not be obligated to participate. The state was only obligated up to the legislatively-approved cap amount. Mr. Baumann said it was his understanding that the agency would return to the next legislature, identify needs, subtract the federal share, and that the non-federal share would be split between the state and the county. Senator Raggio emphasized that a control mechanism that required the state to have some input into both the percentage of payment, as well as the amount of the budget, had to be included in the bill.
Senator Coffin stated he had the privilege of serving on the Interim Study Committee for the Integration of State and Local Child Welfare Systems (A.C.R. 53) and the general consensus of the committee was that there would be a sharing of county and state expenses. He was not certain of the exact percentages agreed upon during the interim committee hearings, but indicated sharing usually meant fifty-fifty. Senator Coffin said the committee had worked well together and regretted that Ms. Buckley was not present to answer some of Senator Raggio’s questions.
Ms. Giunchigliani said it was her understanding the state would “back out” as additional staff was transitioned to the county. A sharing of funding had been discussed in the past, but Ms. Giunchigliani said it was the first time she had heard the suggested percentages and emphasized that the subcommittee needed to be certain that neither the state nor county were adversely impacted.
Senator Rawson stated there were a number of small details that needed to be addressed, such as the purchasing prices the county paid for equipment. The county estimates were higher than estimates provided by State Purchasing and Senator Rawson was not certain how to resolve the issue. It was anticipated that salary costs would be higher for county-level staff, but he did not think there should be varying costs for a desk. Larry Peri said comparisons of the Clark County estimates could be found in Exhibit C. The current bid from Clark County’s purchasing organization for a standard office cubicle was $5,000 and the state had budgeted an amount of $2,370 for a state executive desk unit. Mr. Peri said Clark County’s estimates included a sizable request for 40 new vehicles at $25,000 each, for a total of $1 million. Based on the comparisons, the subcommittee could choose to adjust Clark County’s prices to those provided by State Purchasing to state agencies.
Senator Rawson referred to a program transition manager position that was budgeted for three years at $115,000 each year and wondered if the position would be required after FY2003. Ms. Cox said it was the opinion of both Washoe and Clark Counties that the role of the transition manager was critical to creating a system that improved services for the child welfare systems. The county would have to address performance standards, policies and procedures, and a myriad of issues related to the integration of the systems. It was critical to have the position begin now. Ms. Cox said she was currently spending as much time as possible addressing the many issues related to the integration issues. A management level position was needed to oversee case flow, forms, infrastructure, eligibility, licensing, and recruitment. Ms. Cox said the agency was convinced the transition manager position was needed for a minimum of three years to achieve the desired outcome for the entities and for the families.
Senator Rawson asked about the $1.5 million included in the estimates for the reverse interface of the automated systems and said he understood there would be two systems that would be on-line in Clark County. Senator Rawson asked if the two systems were essential for Statewide Automated Child Welfare Information System (SACWIS) compliance.
Fritz Reese, Assistant Director, Family and Youth Services, Clark County, stated he had direct oversight of the agency’s Family-Trac System, which was the database of record for southern Nevada. In order to become SACWIS compliant, the agency staff would work out of the UNITY system. However, in order to maintain the integrity of the system, the agency would have to do a reverse interface. The staff would be working out of two systems simultaneously. Mr. Reese emphasized the two systems were essential.
Senator Rawson said Washoe County had requested a project manager and a human services consultant and that probably did not need to be addressed, however, the $978,000 budgeted by all three entities for consultants seemed excessive. Senator Rawson asked if each consultant was necessary for the period of time listed.
Mike Capello, M.S.W., Director, Washoe County Department of Social Services, said funding was requested for a two-year period for a transition manager. There were a myriad of issues that would have to be managed in order to successfully transition the state staff to the county. Mr. Capello thought the position was essential. The consultant position would help the line staff deal with the integration and change of culture in bringing the two staffs together from the management, supervisory, and line level. Having the two staffs work together effectively would be critical to the success of the transition. Mr. Capello stressed the importance of both the transition manager position and the consultant position but stated if he had to choose a position to be cut, it would be the consultant position.
Senator Raggio referred to the staff transition issue and asked Mr. Capello how many state positions would become county positions and where the positions would be located. Mr. Capello stated phase 1 proposed to transfer 18.5 state positions, which would provide sufficient staff so new children coming into the Child Welfare System would not have to transfer. Currently after three to six months, a child in the system was transferred. A total of 53 state positions, currently housed in three different locations in Reno, would move to the county during the biennium. Mr. Capello said the agency needed to review office locations and staff assignments and determine how to bring the staff located in the three offices together. Eighteen staff members of the Children’s Cabinet would not have office space unless the state renegotiated the current lease. The initial assumption was that Washoe County would rent or lease additional space and there would still be three locations in Reno. All of the county staff and 53 state staff would be assigned to the 3 locations, depending on assignments and service needs. In response to a question posed by Senator Raggio, Mr. Capello said the cost of the third office would be paid by the state. One of the offices currently used by state staff was located in a state-owned facility. The only lease that would be in place at the time of the transition would be the Mill Street lease. State and county employees would be housed in the same location.
Senator Raggio asked if the rent would be part of the ongoing costs the state would incur in the future. Mr. Capello said the Washoe County Child Welfare Service delivery system was well-funded and the state system was underfunded. Mr. Capello stressed that the county had indicated from day one an unwillingness to take on the state system as an underfunded system. Incorporating an underfunded system would dilute the entire system. Mr. Capello stated there had been discussions about sharing costs into the future. Both the county and the state had to have a financial commitment for successful integration of the systems. In conclusion, Mr. Capello said, “Yes, in part we do expect the state to be a partner with us, and the actual percentage, I think, is negotiable -- something we need to sit down and talk about to figure out what is fair.” Senator Raggio was concerned that the issue would be ongoing and a commitment was expected without any control on the state side. He also emphasized that county revenues were growing more than state revenues.
Stephen A. Shaw, Administrator, Division of Child and Family Services, Department of Human Resources, introduced Dr. James Rast, Ph.D., Chief Executive Officer, Vroon Vandenberg, a leading national consulting firm in the areas of system reform and development. Mr. Shaw said Dr. Rast had provided consulting services to the agency on the proposed integration and had testified several times before the legislative subcommittee.
Dr. Rast said one very important issue that resulted from the interim study was the realization that numerous children within the Division of Child and Family Services system, especially in the foster care area, had emotional disturbances. A study was conducted in Clark County that showed 36 percent of the children in the system had severe emotional disturbance and 40 percent more had some type of emotional disturbance. The pressures placed upon children in these systems resulted in the high numbers. Currently, the system that provided support for these children was based on a traditional mental health model that significantly overused residential and high-end, expensive services to provide support for the children. Many national studies indicated, as a result of foster care experiences and types of treatment and support received while in foster care, the children within the system were much less likely to graduate from high school, much less likely to get an advanced education, and much more likely to become involved in the juvenile and adult justice systems. Part of the initiative looked at a new way of providing services, and, in fact, all the cost estimates around the children’s mental health costs that were within the current system were based upon a family-centered system in which much more responsibility was being placed on families to support their own children by providing an individualized strength-based and collaborative, coordinated system of care. The model and cost estimates had been based upon the new method of providing services. Of the 36.3 percent of the children who had severe emotional disturbances, it was currently estimated that 30 percent were not receiving mental health support. Of the 40 percent with additional mental health concerns, 75 percent were not receiving mental health support. The model would provide an average lower cost of service than the current model for all children in the system. The requested consultant position would help with up-front planning, staff training, support and mentoring through the pilot process, supervisory training, and would work with information technology staff to make certain the systems would support the new service delivery model. Dr. Rast thought the result would be a much more cost-effective system with better outcomes for the children.
Ms. Giunchigliani appreciated reference to the mental health component but cautioned that the term “emotionally disturbed” should not be used because there were children that were mentally ill that were not necessarily emotionally disturbed. The descriptions were often linked. Ms. Giunchigliani asked if the $978,906 proposed for consultants and transition managers included the fees for Dr. Rast’s services. Mr. Shaw said the costs for Dr. Rast’s services were included in the biennial budget for the Division of Child and Family Services. Ms. Giunchigliani asked if it was intended that the mental health consortium and component move forward during transition so a plan would be in place for the next phase of the transition. Dr. Rast said it was critical to have sufficient up‑front planning to make certain the integration worked well. States that had rushed into integration without up‑front planning had poor outcomes. The transition process would be different in each county and would allow some individualization in strengths and needs. Dr. Rast indicated his support for state oversight. He indicated federal participation should increase significantly using the current base and match. Ms. Giunchigliani said there should be $60,000 in FY2002 and $120,000 in FY2003 budgeted for mental health consultant fees because of the six-month delay. Ms. Giunchigliani was concerned that the needs in the rural areas would not be met and indicated there should be a full-range plan that would deal with treatment, provider costs, cost of care, housing, etc. At the end of the FY2003 there should be a plan that would be reviewed by a committee, which would make recommendations to the next legislative session on the cost impacts.
Mr. Shaw said his general view of consultants was that they borrow your watch and tell you what time it is, however, the proposed integration of state and local child welfare services was the biggest major change in child welfare in the history of Nevada. The state was trying to change the way it did business after 50 years. The consultants were needed because radical shifts were being made in the area of mental health and integration of services. Mr. Shaw did not feel $900,000 was excessive for consultants. Children were in the DCFS care an average of 34 months. The monthly cost of care far surpassed automobiles, staff, etc. Utah had an average length of time in care of 12 months. By ending bifurcation, the integration of the child welfare systems would pay for itself if the 34-month period was reduced by one-third.
Senator Rawson asked about the $500,000 included for estimated retirement buyouts. Mary Ellen White, Social Welfare Program Specialist, DCFS, said the agency had asked the Public Employees’ Retirement System (PERS) to review the rosters of employees that would be impacted by the transition. The PERS indicated the project would be completed if legislation was passed providing for the transition and specific employees were identified, however, the PERS provided an estimate. There were approximately eight employees who were within the 25-year range of service. There were a number of other employees in the 10 to 15-year range who were still far below retirement age and would require some notification of a possible benefit, but would be very unlikely to exercise that option due to penalties that would be incurred due to early retirement. The employees had asked Assemblywoman Buckley that the issue receive consideration. The employees felt, in reviewing the statutes, that there would be the potential for a buyout. Ms. White thought the issue would need to go under some analysis by legislative attorneys and the Attorney General’s Office to determine if this would be a termination and abolition of a position or whether there was a like position being offered.
Senator Rawson adjourned the meeting at 8:50 a.m.
RESPECTFULLY SUBMITTED:
Linda J. Smith
Committee Secretary
APPROVED BY:
Senator Raymond D. Rawson, Chairman
DATE: