MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-First Session
May 17, 2001
The Committee on Ways and Meanswas called to order at 7:36 a.m. on Thursday, May 17, 2001. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. The meeting was simultaneously videoconferenced in Room 4412 of the Grant Sawyer Building, 555 East Washington Avenue, Las Vegas, 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. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Bob Beers
Mrs. Barbara Cegavske
Mrs. Vonne Chowning
Mrs. Marcia de Braga
Mr. Joseph Dini, Jr.
Mr. David Goldwater
Mr. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Mr. David Parks
Mr. Richard D. Perkins
Ms. Sandra Tiffany
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Brian Burke, Senior Program Analyst
Rick Combs, Program Analyst
Russell Guindon, Deputy Fiscal Analyst
Georgia Rohrs, Program Analyst
Connie Davis, Recording Secretary
Reba Coombs, Transcribing Secretary
Assembly Bill 594: Makes appropriations to Culinary and Hospitality Academy of Las Vegas for design and planning of facility for vocational training in Southern Nevada and to Department of Cultural Affairs for distribution to Las Vegas Performing Arts Center Foundation for planning and design of performing arts center in City of Las Vegas. (BDR S-42)
Chairman Arberry recognized Steven Horsford who said he was appearing on behalf of the Culinary and Hospitality Academy of Las Vegas. Mr. Horsford stated he was joined in Las Vegas by two members of the board of trustees, D. Taylor and Steve Greathouse, and one of the students from the Culinary and Hospitality Academy, Sarina Riley. The committee was provided with an information packet, Exhibit C.
Mr. Horsford thanked the committee for the opportunity to speak about the Culinary and Hospitality Academy. It had been a very successful project in Las Vegas since 1993. Over 16,000 individuals had been trained in the culinary classifications, primarily for work in the gaming industry throughout Nevada. Mr. Horsford knew many of the committee members were familiar with the project, as he had spoken about it often.
Mr. Horsford indicated he would show a video, and then Mr. Taylor and Mr. Greathouse would speak to the committee about what was requested in the bill.
After the video played, Mr. Horsford said he wished all the committee members could have the opportunity to tour the facility to show how lives were being changed. Unfortunately, and the reason Mr. Horsford was before the committee, was the facility which currently housed the academy had become outdated. It was no longer feasible to provide the training necessary for the industry; there were too many individuals to be trained. He advised that Mr. Greathouse would explain that further when he presented his testimony.
To reiterate what had been said in the video, Mr. Horsford explained the training program was for all entry level culinary classifications, including cooks, food servers, housekeepers, and all the people who made the gaming industry what it was. These people provided service to more than 30 million visitors who came to Nevada every year. Although he understood the legislature was under tremendous budget constraints, Mr. Horsford hoped to obtain support from the legislature to leverage other dollars through private foundations, federal dollars, and become partners with the academy.
Mr. Horsford introduced D. Taylor. Mr. Taylor testified he served as a member of the board of trustees for the Culinary Hospitality Academy and was also the staff director of Culinary Union Local 226 in Las Vegas.
Mr. Taylor expressed his pleasure at having an opportunity to speak about the Culinary Academy. He felt it made a significant difference in the lives of so many people in southern Nevada. Mr. Taylor wished to have the legislature partner with the Culinary Academy, along with the gaming industry and labor movement, to continue to build on the successful training program, which had been proven to work.
As Mr. Horsford had explained, the academy was a national model, which had the highest rate of success in student graduation, job placement, and retention. Mr. Taylor remarked the retention rate was 70 percent versus the national average of 23 percent. Students who entered into this training program were from all walks of life, but were primarily women, minorities, and people new to this country where English was a second or third language. Those people needed the academy to obtain the necessary training to get into good paying jobs with good benefits, and they no longer had to rely on public assistance.
Mr. Taylor acknowledged the initial request was for $8 million, which was based on an independent feasibility study paid for by the City of Las Vegas. The study concluded the existing academy facility did not meet the needs of the students. The academy graduated 2,500 people, but it was desirable to increase the graduates to 5,000 per year. The report concluded it would cost between $12 and $15 million to acquire the land, then demolish and rebuild the training center. The new training center would meet the needs of both doubling the number of graduates as well as upgrading the training.
Mr. Taylor realized the legislators were grappling with a large financial problem in the state. However, two primary funding areas had been identified. If the funding could be accomplished, those two areas would go a long way toward meeting the academy’s goals of securing other public and private contributions.
The first area, explained Mr. Taylor, was the design and planning of the Culinary Academy facility. He believed the cost estimate to do a feasibility study would total approximately $700,000. The other area was acquisition of land for the academy, either where the academy could lease or purchase a downtown parcel of land. The reason for interest in an area downtown was because it would be near the regional transportation center and over 60 percent of the students relied on public transportation. The cost estimation for the purchase of any land downtown was between $3.5 and $4 million. Private foundations had indicated the need for securing the land prior to any commitments of grants or funding. Mr. Taylor reflected that was why the passage of A.B. 594 was so important to the academy’s overall strategy.
Mr. Taylor assured the committee that the Culinary Academy was working hard to find other funding options. They had met with representatives from a number of national private foundations, such as the Ford Foundation, Rockefeller Foundation, and the Annie E. Casey Foundation. The academy had been working with Nevada’s congressional delegation and the Department of Labor to secure federal funding for both program dollars and capital support. Mr. Taylor hoped in the weeks ahead a partnering relationship could be developed with the legislature which would allow the academy to both expand and meet the needs and goals of so many people in Las Vegas who would be left behind unless the challenge was met.
Mrs. Chowning thanked those providing testimony today. The academy truly facilitated a monumental change in many lives. She reiterated what Mr. Taylor said in that so many people receiving training did not speak English as their first language. However, the opportunities given to them for their hard work made a drastic difference in their lives. The academy was truly a model for the rest of the nation. The graduates showed pride in their dress, mannerisms, and their work. Mrs. Chowning expressed her support for the academy, as it was good business for the state. She asked what contribution had been made by the City of Las Vegas.
Mr. Horsford responded the City of Las Vegas had been a partner and would continue to be a partner. The city helped with the feasibility study, which was done through Community Development Block Grants that helped the academy get to the point of determining the cost to build the facility. The city had also been working to help develop a strategy to present to foundations. The mayor and city council had all endorsed the project and believed it should go forward. The city was also helping to identify parcels of land to acquire, including those owned by the city. Mr. Horsford continued, the city was a stakeholder in this project and would benefit from a new culinary academy. In addition to the tourist attraction that a culinary academy of this nature would provide, the academy would be modeled along the lines of the extensive academies located in California or New York. The City of Las Vegas had been a great partner in this endeavor.
Mr. Horsford introduced Steve Greathouse, who had been a very involved member of the board.
Mr. Greathouse disclosed he was a member of the board of trustees for the Culinary and Hospitality Academy and the senior vice president of Mandalay Resort Group. He asked the committee’s support of A.B. 594. The gaming industry had been, and would continue to be, an integral partner with the Culinary and Hospitality Academy. Since 1993, the gaming industry had supported the efforts of the Culinary Academy and the result had been nothing short of remarkable. More than 16,000 students had graduated from the academy and most of them were employed in the industry to this day.
The gaming industry paid over 90 percent of the operating budget for the Culinary Academy. Mr. Greathouse explained this financial support came from a contract arrangement with culinary employees whereby the gaming industry paid three cents for every hour a culinary employee worked. This amounted to more than $2 million in the year 2000, and would continue to grow as more properties, which opened in the last few years, began paying into the Culinary Academy trust fund.
While the industry would continue to invest in the Culinary and Hospitality Academy, it was imperative that an expanded facility be developed to meet the existing and future needs of the industry. Mr. Greathouse noted that was where A.B. 594 entered the picture. This was the first time since the inception of the Culinary Academy that the board had sought public funds. The board was actively applying for grants through the Workforce Investment Board to help offset program costs and would continue to seek out public and private contributions which made sense for the academy.
Mr. Greathouse said the short-term goal was to secure enough funding to move forward with the capital project, which had been previously discussed. The gaming industry was the largest employer in Nevada. In the past few years, with the expansion of so many new resort properties in southern Nevada, it was becoming harder and harder to find and keep employees, particularly in the culinary classifications. The need for the industry was enormous. For example, the Mandalay Resort Group, with over 18,000 employees on the Las Vegas Strip, at any given time had over 100 openings in the food department and 75 openings in the housekeeping departments. The Culinary Academy had been a great partner in helping recruit and train individuals who may have had a very difficult time finding employment in the industry.
Mr. Greathouse added that the resort group’s experience with employees who had come from the Culinary Academy had been very positive. The employees came ready to work, they generally had a better work ethic and stayed in the job longer, and were promoted to other positions. The partnership with the academy had worked and was a national model for success. Mr. Greathouse urged the committee’s support.
Mr. Horsford introduced one of the graduates of the Culinary Academy and asked her to tell her story to the committee. Mr. Horsford felt Sarina Riley represented many of the 16,000 students who had graduated from the Culinary Academy. However, more importantly, she probably represented many of those who did not come through the Culinary Academy because it was not large enough.
Chairman Arberry recognized Sarina Riley. Ms. Riley indicated she had joined the Culinary Union in 1996 as a utility porter. In November 1996, she had been hired at the Harrah’s Hotel and Casino as a casino porter. Ms. Riley had taken a cashier’s class and afterward, she was offered a job as a cashier at the Culinary Union Training Center. Now, a year later, she was an administrative assistant at the Culinary Union Training Center.
The program had been very beneficial to Ms. Riley. She had been on welfare previously, and the program had enabled her to have a job that supported her family.
Mr. Horsford stated Ms. Riley’s testimony concluded their presentation. To reiterate, the two primary areas where support was requested was design and planning the new academy, which the feasibility study indicated would cost approximately $700,000. Any other help the legislature could provide toward the acquisition of parcels of land would be appreciated. Every major foundation the academy had spoken with maintained they needed to know what the facility would look like before they would be willing to commit funds. The foundations also wanted to know how the academy was going to secure land and their plan to secure the land. There were a number of available parcels, Mr. Horsford explained, and they had been working with their current landlord who was willing to negotiate with the academy.
Mr. Parks remarked he had toured the facility currently in operation and he was extremely impressed not only by the students but also the teachers and the guidance provided the students. He felt this was a worthy cause and recommended a visit to the academy.
Ms. Tiffany stated she was a job developer for Welfare to Work and this program was used fairly extensively. However, she paid fees for the students to attend the academy and was aware of the gaming assessment. Ms. Tiffany inquired if the unions were providing any money toward the program.
Mr. Taylor responded he was not quite sure; however, the academy had never taken public money. As trustees, he said they had calculated the cost at approximately $780 for every trainee to go through the program. As Ms. Tiffany knew as a job trainer/developer, this was much less than the national average. The only cost students must incur was $22, which was waived if there was financial hardship or Welfare to Work, etc. In that event, the cost to the students was completely free. The hotels, as Mr. Greathouse said, through a collective bargaining agreement, contributed so much per hour per worker and that had increased by 50 percent in the last collective bargaining agreement. Therefore, Mr. Taylor stated he was not quite sure what charges Ms. Tiffany was referring to because the training was free for the students.
Ms. Tiffany reiterated her question if the unions were providing any additional money beside the amount required in the collective bargaining agreement. Mr. Taylor replied staff was provided as needed. For example, a master sommelier had been hired to provide upgraded wine training. This was fully funded by the union.
Mr. Horsford added he did not believe there were any direct contributions from labor. The way the joint management trust agreement was constructed, contributions from the industry were received through an agreement between labor and management. With reference to applying for work force investment grants, none had been awarded to this date. The academy had trained individuals who had been referred from Nevada Partners, the community college, and other places, but at no cost to those programs.
Mr. Greathouse asked to expand on Mr. Horsford’s answer. The culinary union and the leadership it provided over the Culinary Academy was essential and integral. The board members did not get compensated for their time, but it was a large amount of time contributed to the operation of the academy.
Chairman Arberry inquired if anyone else wished to speak on behalf of A.B. 594, either for or against. There being no further testimony, the chairman closed the hearing on A.B. 594 and opened the hearing on A.B. 595.
Assembly Bill 595: Makes appropriation to Clark County for support of Greater Las Vegas Inner-City Games. (BDR S-1509)
Steven Horsford explained he was before the committee on behalf of the Greater Las Vegas Inner-City Games concerning their request for an appropriation. Mr. Horsford introduced Elaine Wynn, who was testifying from Las Vegas, and said she would continue with the presentation.
Elaine Wynn stated she was the co-chair of the Greater Las Vegas Inner-City Games and she was testifying today along with the executive director, Jack Mannion. Mrs. Wynn indicated she was delighted that she was able to testify from Las Vegas because it was so convenient. She called attention to Exhibit D, which included very detailed information about the program. Mrs. Wynn pointed out a presentation had been made before the legislature during the previous biennium, and it was quite successful. For that support, Mrs. Wynn said she was most grateful.
The packet also included an informational summary of the expenditures of state monies received as a result of the appropriation from last session. The testimony previously submitted was a request to expand the program into Mesquite and Henderson. Mrs. Wynn pointed out that was exactly how the appropriation was spent, as well as the expansion of the overall program.
For those who were familiar with the Inner-City Games, Mrs. Wynn indicated this was an extensive program which involved sports clinics and competitions, as well as educational and cultural programs. The games involved children aged 7 to 17 and covered a very broad geographical area, almost all of southern Nevada. Locations were found at many schools, parks, and recreation centers around the area. Most importantly, the calendar of events ran for seven months, March through the Labor Day weekend in September. This was a critical time when children were most challenged to find activities. In addition, Mrs. Wynn declared they had been very diligent in trying to create more year-round programs. With the partnership of a national corporate sponsor, Cendant Corporation, the program had engaged in some very extensive computer camps located at many of the recreational centers and schools in the community.
Mrs. Wynn disclosed the funding had been a combination, in the true sense, of a public/private partnership. Every year, $1.7 million was spent through the generosity of many foundations and private companies in the community. There was a keen interest in the community in what participation public entities had in the program.
Knowing time was limited, Mrs. Wynn wanted to make just a few comments. She reminded the committee this was the only program of its kind in the entire state of Nevada. It was totally free for the children and transportation was provided. Two main barriers which kept children from making positive choices in their lives had been removed. There was no excuse not to come to Inner-City Games. Over the last three years, there had been a 12-15 percent increase in participation. This year, Mrs. Wynn anticipated 7,500 children would be successfully occupied in good activities for seven months of the year. The participants were those who needed this type of program the most, economically disadvantaged children, but because the program was open to all children, there was a very healthy, heterogeneous group. Many of the children made new friends with children they would never have had the chance to meet if it weren’t for the program. Mrs. Wynn emphasized one of the advantages of the program was preventative rather than intervention. Most of the children in the program fell between the age group of 7-12 years, the critical period where hormones were flowing and decisions were made about what the children wanted to do with their lives. Certainly, there were many teenagers in the group, but the core group was the youngsters who needed to be impressed at that age. Mrs. Wynn felt the program was doing a wonderful job.
In the last three years, the program had grown by 800 to 1,000 children per year. Mrs. Wynn commented the program was primarily funded by the private sector but also filled a huge void left from the lack of programs at the school level. The program appealed to children who were left behind at school who could not afford even nominal fees to engage in activities.
Mrs. Wynn pointed out she was before the committee begging for funds to help with one of the finest programs in the state. She informed the committee she had been active in a variety of activities over the last 25 years involving educational and youth programs. This was the beginning of her eighth year with Inner-City Games. Mrs. Wynn felt this was a testimonial to how she felt about the value of this program, and would be most grateful for whatever the state was able to give. The amount of the request in the bill was $200,000, and every dollar would be used to expand the program further. There was a keen interest throughout the community to increase the program, not only in terms of numbers, but types of events.
Chairman Arberry recognized Jack Mannion, Executive Director of the Greater Las Vegas Inner-City Games. Mr. Mannion stated he was pleased to be able to speak to the committee about the games. He called attention to the fact he had been a coach at Valley High School while the Chairman attended Western High School. Mr. Mannion exclaimed he could not possibly tell the committee the value of this program. The program was not to train Olympic champions, but it was a chance to give children the opportunity to feel some self-worth and self-esteem. Mr. Mannion very much wanted to help the children of southern Nevada become good citizens so they could do those things necessary to make the state successful.
There being no further testimony, the Chairman closed the hearing on A.B. 595 and opened the hearing on S.B. 522.
Senate Bill 522: Clarifies certain provisions concerning administration of money in state highway fund. (BDR 43-566)
Dennis Colling, Chief of the Administrative Services Division for the Department of Motor Vehicles and Public Safety, indicated the bill before the committee was a clean-up bill to add the words “or authorization” to allow the department to use its funding as both an appropriation and as an authorization. Mr. Colling stated that was all there was to the bill.
Chairman Arberry asked if there were any questions from the committee on S.B. 522. There being no further testimony, Chairman Arberry closed the hearing on S.B. 522.
MR. MARVEL MOVED DO PASS ON S.B. 522.
THE MOTION WAS SECONDED BY MRS. CHOWNING.
THE MOTION PASSED UNANIMOUSLY WITH MR. DINI, MR. PERKINS, MR. BEERS, AND MR. GOLDWATER ABSENT AT THE TIME OF THE VOTE.
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Senate Bill 498: Revises authorized uses of appropriation made in previous session to Lincoln County School District and changes date of reversion of appropriation. (BDR S-1439)
Chairman Arberry recognized Senator Mike McGinness, Central Nevada Senatorial District. Senator McGinness pointed out he represented Churchill, White Pine, Mineral, Nye, Lincoln, Esmeralda, part of Lander, and part of Eureka Counties. He indicated S.B. 498 would allow Lincoln County to take the money reserved from a construction project authorized last session and use the funds to start a project on the new high school. The project involved tearing down the old high school and rebuilding. Senator McGinness noted this was an opportunity to reward the county for their frugality and allow them to use the money for construction of the new school.
Randy Robison, representing Lincoln County School District, reiterated Senator McGinness’ remarks stating the bill simply would allow the district to utilize the savings realized on the Pioche elementary school project. The funding would be used for the Lincoln County high school project. In effect, the bill would change the reversion date from June 30, 2001, to June 30, 2002, as well as revise the recording date to January 15, 2003.
Lorell Bleak, Superintendent of Lincoln County School District, thanked the committee for the opportunity to build a new school in rural Nevada. Mr. Bleak presented Exhibit E, a series of photographs of the different phases of school construction. The facility should be completed by August of 2001. Together with cooperation from the Department of Prisons, it had been found that savings could be found and Mr. Bleak indicated they would like to have that money available for the district to use for other projects. Mr. Bleak said he appreciated the legislature’s willingness to work with the county. He felt the program had been very well run and the pictures proved the point.
Chairman Arberry asked if anyone else would like to speak for or against S.B. 498. There being none, the Chairman declared the hearing closed.
BUDGET CLOSINGS
Assemblywoman Vonne Chowning read from the following prepared testimony:
DEPARTMENT OF TAXATION (101-2361) PAGE TAX-1
THE SUBCOMMITTEE ON GENERAL GOVERNMENT DEVELOPED THE FOLLOWING RECOMMENDATIONS FOR THE DEPARTMENT OF TAXATION BUDGET.
THE SUBCOMMITTEE RECOMMENDS CLOSING THE DEPARTMENT OF TAXATION BUDGET AS RECOMMENDED BY THE GOVERNOR WITH TECHNICAL ADJUSTMENTS, WITH THE EXCEPTION OF THE TRANSFER OF THE FUEL TAX COLLECTION PROGRAM. THE SUBCOMMITTEE RECOMMENDS DELAYING THE TRANSFER OF THIS PROGRAM FROM THE DEPARTMENT OF TAXATION TO THE DEPARTMENT OF MOTOR VEHICLES AND PUBLIC SAFETY BY SIX MONTHS, GENERATING A GENERAL FUND SAVINGS OF APPROXIMATELY $740,000 IN FY 2001-02. THE PROGRAM IS CURRENTLY SCHEDULED TO BE TRANSFERRED ON JANUARY 1, 2002, BASED ON 1999 LEGISLATION. THE DECISION TO DELAY THIS TRANSFER WAS BASED ON DISCUSSIONS BETWEEN THE GOVERNOR AND LEADERSHIP OF THE LEGISLATURE ON POSSIBLE WAYS TO SAVE GENERAL FUND DOLLARS BASED ON THE ECONOMIC FORUM’S REVISED REVENUE OUTLOOK. LEGISLATION WILL BE REQUIRED TO DELAY THIS TRANSFER IF APPROVED BY THIS COMMITTEE. THIS ITEM HAS NOT BEEN ADDRESSED BY THE PUBLIC SAFETY SUBCOMMITTEE, WHICH IS CHARGED WITH REVIEWING THE MOTOR CARRIER BUDGET.
THE SUBCOMMITTEE RECOMMENDS THE TRANSFER OF FOUR INFORMATION SYSTEMS SPECIALISTS FROM THE DEPARTMENT OF INFORMATION TECHNOLOGY TO THE DEPARTMENT OF TAXATION AS RECOMMENDED BY THE GOVERNOR.
APPROVED ENHANCEMENTS BY THE SUBCOMMITTEE INCLUDE FUNDING FOR THE INCREASED COSTS OF PRINTING CIGARETTE STAMPS AND SOFTWARE LICENSE RENEWAL EXPENSES NOT INCLUDED IN THE EXECUTIVE BUDGET. THE DEPARTMENT’S SOFTWARE LICENSE RENEWAL FUNDING REQUEST INCLUDED $57,000 FOR ITS WEBSITE SOFTWARE. THE SUBCOMMITTEE WAS CONCERNED WITH THE VENDOR’S QUOTED RENEWAL PRICE OF $57,000 FOR A TWO-YEAR CONTRACT, GIVEN THE DEPARTMENT ORIGINALLY PAID ONLY $35,000 TO PURCHASE THE LICENSE TO THIS SOFTWARE. THE SUBCOMMITTEE REQUESTED THAT THE AGENCY CONTACT THE VENDOR TO DETERMINE IF A LOWER PRICE COULD BE NEGOTIATED BEFORE THIS ITEM COULD BE RECOMMENDED FOR APPROVAL. THE SUBCOMMITTEE DECIDED THIS INFORMATION SHOULD BE BROUGHT TO THIS COMMITTEE FOR CONSIDERATION. THE DEPARTMENT HAS PROVIDED INFORMATION THAT THE VENDOR WILL ACCEPT $15,000 IN FY 2001-02 AND $10,000 IN FY 2002-03 AND THE FEE WILL REMAIN AT $10,000 EACH YEAR THEREAFTER. THE COMMITTEE WILL HAVE TO DECIDE WHETHER TO APPROVE FUNDING OF $25,000 FOR THE 2001-03 BIENNIUM FOR THE LICENSE RENEWAL OF THIS WEBSITE SOFTWARE.
Mrs. Chowning observed the $25,000 was considerably less than the $57,000 which had been originally quoted.
Russell Guindon, Deputy Fiscal Analyst, Fiscal Analysis Division, commented on Mrs. Chowning’s figures and stated those were the latest quotes provided by the vendor. The $15,000 figure would cover the cost of the software so licenses would be perpetual rather than a two-year renewal of the license. In other words, the license could be used for two years and then it was finished. The $15,000 would allow the agency to own the software. The $10,000 figure for each year was for maintenance, to provide technical support, and other items. Mr. Guindon felt this was a reasonable quote.
Chairman Arberry asked if the $10,000 cost would be infinite. Mr. Guindon responded it would be up to the agency to decide how they wanted to proceed, because the $15,000 would allow the agency to own the software. For instance, if in 2003, the agency wanted to use the software but did not want upgrades, that could be done. It would be up to the agency to request the $10,000 each year to continue to license the software for upgrades and maintenance purposes.
To take the matter one step further, Chairman Arberry inquired if this was a reasonable sum when the budget was being developed or was the sum too high in comparison to other companies. The sum appeared to be high for yearly renewals of software. Mr. Guindon replied he did not feel qualified to answer the question accurately. However, the figure did seem high when the first estimates came out, which was why the subcommittee asked the agency to contact the vendor. A meeting had been held with Assemblyman Beers and the department to review the estimate. It was felt at the time the figure was too high. Mr. Guindon added that current practice in the industry was when software was purchased, the renewal costs tended to be in the 12-18 percent range. Assemblyman Beers had felt if the costs could be brought down to 20 percent, that would be reasonable, but it was a question for the committee to decide. Mr. Guindon brought to the committee’s attention that a representative from the Department of Taxation was present and could possibly answer the Chairman’s questions.
Chairman Arberry recognized Forrest “Woody” Thorne, Deputy Executive Director for the Department of Taxation. Mr. Thorne recalled the conversations with Assemblyman Beers and the vendor and stated they had attempted to get the figures as low as possible. When the software was originally contracted, the agency was unaware that a perpetual license was available. The vendor had agreed to allow the agency to convert from a two-year subscription license for the difference between what the two-year license and the perpetual license was at the time of the original purchase. Thereafter, the annual maintenance fees were 20 percent, which was at the high end of the range, but within industry norms.
The Chairman asked if the agency was comfortable with the $10,000 cost every year in their budget. Mr. Thorne responded affirmatively.
Mr. Parks asked if this figure included technical support as well or if something else was included in the $10,000. Mr. Thorne answered the $10,000 included technical support, maintenance to the program, plus any upgrades which occurred during the annual period.
Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, commented the recommendation of staff was to delay the transfer of gas tax collections from the Department of Taxation to the Department of Motor Vehicles (DMV) for six months. Difficulties had been encountered on the DMV side of the equation and staff requested the committee revisit this issue, if approved, when the DMV budgets were brought forward for closure. At that time, staff could provide a full picture of the issue and whether the transfer should be delayed for six months. The recommendations were nearly complete and Mr. Stevens said the full package could be presented to the committee within a couple of days.
Chairman Arberry asked the pleasure of the committee concerning the Department of Taxation budget.
MS. GIUNCHIGLIANI MOVED TO ACCEPT THE REPORT AND ADD $25,000 FOR THE SOFTWARE AND UPGRADES.
THE MOTION WAS SECONDED BY MR. MARVEL.
THE MOTION PASSED WITH MR. BEERS AND MR. GOLDWATER ABSENT AT THE TIME OF THE VOTE.
BUDGET CLOSED.
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Mrs. Chowning read from the following closing report:
THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE OFFICE OF VETERANS’ SERVICES. THE CLOSING ACTIONS OF THE SUBCOMMITTEE HAVE RESULTED IN AN INCREASE IN THE GENERAL FUND APPROPRIATION FOR THE OFFICE TOTALING $152,841 IN FY 2002 AND $46,445 IN FY 2003 WHEN COMPARED TO THE GOVERNOR’S RECOMMENDED BUDGET.
In the Office of Veterans’ Services Account, the Subcommittee approved the continuation of three new positions that were approved by the Interim Finance Committee as temporary positions. The three positions were approved for the Southern Nevada Veterans’ Cemetery in Boulder City. The positions include two Grounds Equipment Operators needed to maintain the eight new acres of burial space that has been added to the cemetery And a Management Assistant needed to serve as a receptionist at the new Veterans Chapel. The subcommittee also approved $13,408 in FY 2002 and $16,029 in FY 2003 for the costs of providing janitorial services and electricity for the new chapel and for the costs of watering and fertilizing the additional improved acreage at the cemetery.
The Subcommittee approved $78,415 in FY 2002 and $43,725 in FY 2003 for the replacement of equipment at the Office of Veterans’ Services and the two state veterans’ cemeteries, but reduced the costs for two dump trucks from $40,000 each to $27,000 each. The Subcommittee also approved $10,323 in FY 2002 and $30,708 in FY 2003 for the purchase of new equipment for the agency’s office in Las Vegas and the two veterans’ cemeteries.
In the Veterans’ Home account, the Subcommittee voted to significantly revise the revenue projections that were included in The Executive Budget based on new projections provided by the Office of Veterans’ Services. The Office provided the new projections after the Subcommittee expressed concerns that certain non‑General Fund revenue sources included in The Executive Budget may have been overstated.
The Veterans’ Home has decided not to accept Medicaid residents for the first six months of FY 2002. When the Home does begin admitting Medicaid residents to the facility, it plans to do so using a reimbursement methodology based on the actual costs to operate the Home rather than the prospective rate methodology that is used by private nursing care facilities in Nevada. The Office of Veterans’ Services has determined that delaying the receipt of Medicaid revenue while a Nevada State Medicaid plan change is sought will ultimately result in more Medicaid funding for the Home because a majority of residents entering the Home will receive per diem and aid and attendance payments that will be offset against the Medicaid daily reimbursement rate. Because the prospective rates are significantly lower than the actual costs of operation, the Home would only receive a small Medicaid payment for most residents under the prospective rate reimbursement methodology. Under the cost reimbursement methodology, the Home believes it will receive significantly more Medicaid revenue.
As a result of this change in reimbursement methodologies, the General Fund requirements in the Medicaid budget have increased by $332,248 in FY 2002 and $1,266,283 in FY 2003. In addition to delaying the admission of Medicaid residents until January 2002, the Home has also lowered its projected occupancy rate from 80 percent of available beds to 70 percent of available beds based on the revised August 2001 opening date for the Home and information received from Nevada Medicaid regarding vacancy rates at other long-term care facilities in Nevada.
Although the revised revenue projections provided by the agency indicated that the General Fund Appropriation could be reduced slightly, the Subcommittee voted to instead reduce the amount of revenue that the Home would be required to collect as a co‑payment from residents. The subcommittee also voted to increase the General Fund appropriation in FY 2002 by $155,302 to authorize the Home to accept non-wartime veterans in the first year of operation. The revised projections provided by the agency indicated that the Home would receive Federal Aid and Attendance payments for all but two residents admitted to the Home in FY 2002. Since the Federal Government only provides Aid and Assistance payments for non-wartime veterans and non-wartime veterans make up approximately 20 percent of the veteran population, the Subcommittee aPPROVED A 20 PERCENT REDUCTION IN Aid and Attendance revenue and replaceD that funding with additional General Fund.
The Subcommittee voted to approve $406,281 in FY 2002 and $417,592 in FY 2003 to provide additional funding for laboratory services, drug testing of employees, and contract physical therapy, occupational therapy, and speech pathology services as recommended in The Executive Budget. Based on a comparison of PAST utility costs for the Desert Regional Facility and the Boulder City Hospital, the Subcommittee also voted to increase utility expenditures by $54,077 in FY 2002 and $50,309 in FY 2003 from the amount recommended in The Executive Budget.
OFFICE OF VETERANS' SERVICES |
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|
GENERAL FUND IMPACT |
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|
|
|
|
|
|
|
Page |
Budget |
Title |
FY 2002 |
FY 2003 |
|
VETERAN-1 |
101-2560 |
Commissioner for Veterans Affairs |
$ (26,728) |
$ (3,773) |
|
VETERAN-2 |
101-2561 |
Veterans Home Account |
$ 179,569 |
$ 50,218 |
|
|
|
Total |
$ 152,841 |
$ 46,445 |
Chairman Arberry inquired if any of the veterans had presented testimony concerning the excessive daily rate charged by the home and that they would not be able to stay at the home.
Mrs. Chowning stated a great deal of concern had been voiced from the veterans in the beginning of the session. However, toward the end, there were no e-mails, correspondence, or other contacts received concerning the Veterans’ Home. She felt the Commissioner for Veterans Affairs and Medicaid finally came together to give the veterans some comfort. Mrs. Chowning said that one of her constituents, a former senator, was concerned. Nevertheless, after he visited the home and conversed with people involved, he felt much better.
Rick Combs, Program Analyst for the Fiscal Analysis Division, disclosed the majority of complaints received related to the amount of expenditures which were included in the budget and the fact the home would not be fully occupied for the entire biennium. The Governor and the subcommittee recommended the home have a full complement of staff included in the budget and allow the Commissioner for Veterans Affairs to determine when the staff was needed most. There was an understanding that the entire staff compliment would not be hired if the facility was not full. If someone were to look at the budget cost per resident, it would appear very high over the biennium. However, that was money in the budget, not the actual cost per day of operating the home. The actions of the subcommittee reduced the amount of co-payments the residents of the home would be required to contribute to the cost of operation.
Chairman Arberry inquired if any testimony had been received about privatization of the home. Mrs. Chowning responded there was very little discussion regarding privatization. During the months of deliberations, Mrs. Chowning said several reports had come to the attention of the subcommittee regarding other homes which had been privatized. Those homes were not doing very well, so the action of privatization did not look nearly as attractive as it possibly was thought to be. It was out of concern and respect for the veterans that members of the joint subcommittee wanted to show the state had made a commitment to the veterans and could operate the home better than a private company.
Chairman Arberry noted the budget had some wild fluctuations over its development and he asked if the subcommittee was comfortable with the final budget. Mr. Combs responded that without having actual expenditures on which to base a budget and the fact that the information had changed so often, the subcommittee had asked the right questions, and the agency had come forward with a final proposal on May 8. There was no more time for any further proposals. The final proposal looked reasonable based on the recommendations and adjustments made by the subcommittee. General Fund dollars had been added where some had been taken out in the last projection. This was done to ensure there was sufficient funding of the budget to operate the home, of which the subcommittee was confident. If there were any changes, the subcommittee hoped it would be work program changes; i.e., moving money from one category to another, rather than coming back to the legislature to ask for more funds.
Mrs. de Braga stated for the record that if A.B. 212 passed, the funding for the field service office pilot program, she hoped the funding for the position could be placed within this budget.
Mr. Dini inquired about the status of the Fernley cemetery and if they were receiving enough funding in this budget to continue the operation in a decent manner, because they had been struggling for some time. Mr. Combs replied he did not have the amounts broken out, but the cemetery was receiving a significant amount of new equipment, including one of the two dump trucks which were added to the budget. He knew the Fernley cemetery had been scraping by with leftovers from the Department of Transportation. This was one of the items the subcommittee chose to recommend. No new positions were requested or recommended for that cemetery, but they did get a significant amount of new equipment.
Mr. Dini asked if the Fernley cemetery had requested a new building in which to move their office. Mr. Combs answered there was no request for a new building.
MR. MARVEL MOVED TO ACCEPT THE SUBCOMMITTEE REPORT.
THE MOTION WAS SECONDED BY MS. GIUNCHIGLIANI.
THE MOTION PASSED UNANIMOUSLY WITH MR. BEERS, MR. GOLDWATER, AND MR. PERKINS ABSENT AT THE TIME OF THE VOTE.
BUDGET CLOSED.
********
Mr. Parks, representing Assembly District 41, read from the following closing report:
THE JOINT SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE COLORADO RIVER COMMISSION AND MAKES THE FOLLOWING RECOMMENDATIONS.
COLORADO RIVER COMMISSION (296-4490) PAGE CRC-1
THE SUBCOMMITTEE VOTED TO CLOSE THE COLORADO RIVER COMMISSION BUDGET ACCOUNT AS RECOMMENDED BY THE GOVERNOR WITH FEW MODIFICATIONS. TECHNICAL ADJUSTMENTS TO THE COMMISSION’S COMPUTER AND TRAVEL REQUESTS WERE MADE TO REFLECT REVISED INFORMATION PROVIDED BY THE AGENCY AS WELL AS REVISED COMPUTER PRICE INFORMATION PROVIDED BY THE STATE PURCHASING DIVISION.
IN CLOSING THE BUDGET OF THE COLORADO RIVER COMMISSION, THE SUBCOMMITTEE PROVIDED APPROXIMATELY $1.2 MILLION IN ADDITIONAL FUNDING TO SUPPORT THE COMMISSION’S ANTICIPATED WATER AND POWER RESEARCH ACTIVITIES ALONG THE COLORADO RIVER.
I WOULD LIKE TO EXPRESS MY THANKS AND APPRECIATION TO THE MEMBERS OF SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION FOR THEIR HARD WORK AND ASSISTANCE IN DEVELOPING THESE RECOMMENDATIONS. THE MEMBERS INCLUDED SPEAKER PERKINS, MR. MARVEL, MRS. CHOWNING, MRS. De BRAGA, AND MR. BEERS. I WOULD ALSO LIKE TO THANK STAFF FOR THEIR DILIGENT WORK.
MR. MARVEL MOVED TO ACCEPT THE SUBCOMMITTEE REPORT.
THE MOTION WAS SECONDED BY MR. DINI.
THE MOTION PASSED UNANIMOUSLY WITH MR. GOLDWATER, MR. BEERS, MR. PERKINS, MS. GIUNCHIGLIANI, AND MS. LESLIE ABSENT AT THE TIME OF THE VOTE.
BUDGET CLOSED.
********
Mr. Parks stated the next closing report concerned the Department of Transportation. He read from the following statement:
THE JOINT SUBCOMMITTEE ON PUBLIC SAFETY, NATURAL RESOURCES AND TRANSPORTATION HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE NEVADA DEPARTMENT OF TRANSPORTATION. THE CLOSING ACTIONS OF THE SUBCOMMITTEE HAVE RESULTED IN COST SAVINGS TOTALING $2,274,225 IN FY 2002 AND $1,848,165 IN FY 2003 WHEN COMPARED TO THE GOVERNOR’S RECOMMENDED BUDGET.
TRANSPORTATION ADMINISTRATION (201-4660) PAGE NDOT-1
THE SUBCOMMITTEE APPROVED THE BUDGET AS RECOMMENDED BY THE GOVERNOR WITH STAFF TECHNICAL ADJUSTMENTS. STAFF WORKED CLOSELY WITH THE DEPARTMENT TO DETERMINE WHERE APPROPRIATE BUDGET ADJUSTMENTS SHOULD BE MADE. MAJOR COMPONENTS OF THE DEPARTMENT’S BUDGET INCLUDED $3.1 MILLION FOR 24 NEW POSITIONS AND ASSOCIATED EQUIPMENT COSTS OVER THE BIENNIUM; $322.2 MILLION IN BONDING AUTHORITY TO FUND WHAT THE DEPARTMENT HAS DESIGNATED AS ITS SUPER PROJECTS; $1.7 MILLION IN EACH YEAR OF THE BIENNIUM IN SALARY ADJUSTMENT FUNDING FOR NDOT’S ENGINEERING POSITIONS; $1.6 MILLION PER YEAR OVER THE BIENNIUM TO FUND THE DEPARTMENT’S FEDERALLY SPONSORED PARA-TRANSIT PROGRAM; $8.3 MILLION IN FY 2002 AND $8.6 MILLION IN FY 2003 TO FUND THE DEPARTMENT’S MOBILE FLEET ANNUAL EQUIPMENT REPLACEMENT PLAN; $3.6 MILLION IN FY 2002 AND $1.7 MILLION IN FY 2003 FOR NEW EQUIPMENT PURCHASES; AND $4.9 MILLION IN FY 2002 AND $6.3 MILLION IN FY 2003 TO FUND THE DEPARTMENT’S FACILITY MAINTENANCE AND IMPROVEMENT EFFORTS THROUGHOUT THE STATE.
TECHNICAL ADJUSTMENTS WERE MADE TO THE DEPARTMENT’S EQUIPMENT REQUEST, WHICH REDUCED THE COST FOR DUPLICATION, CURRENT PRICE ADJUSTMENT, AND CONCURRENCE FROM THE DEPARTMENT ON REEVALUATED NEED. THESE ADJUSTMENTS RESULTED IN A COST SAVINGS TO THE HIGHWAY FUND OF $745,651 OVER THE BIENNIUM
M-200, POSITION AND BOND FUNDING ISSUE
THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION FOR 24 NEW POSITIONS AND ASSOCIATED COSTS WITH STAFF TECHNICAL ADJUSTMENTS.
THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO AUTHORIZE NDOT TO ISSUE $322.2 MILLION IN BONDS TO FUND ITS SUPER PROJECTS (SEE ATTACHMENT). HOWEVER, THE SUBCOMMITTEE DID EXPRESS CONCERN OVER THE LEVEL OF DEBT THE STATE WOULD BE ASSUMING. BASED ON INFORMATION PROVIDED BY THE DEPARTMENT, NDOT WILL BE PAYING $84.2 MILLION OR 13.4 PERCENT OF THE DEPARTMENT’S TOTAL PROJECTED ANNUAL EXPENDITURES BY FY 2007. HOWEVER, THE SUBCOMMITTEE ALSO REALIZED THAT THE STATE HIGHWAY FUND WOULD NOT BE ABLE TO SUPPORT THE DESIGN AND CONSTRUCTION OF THE DEPARTMENT’S SUPER PROJECTS WITHOUT THE AVAILABILITY OF BONDING REVENUES.
I WOULD LIKE TO EXPRESS MY THANKS AND APPRECIATION TO THE MEMBERS OF THE SUBCOMMITTEE ON GENERAL GOVERNMENT FOR THEIR HARD WORK AND ASSISTANCE IN DEVELOPING THESE RECOMMENDATIONS. THE MEMBERS INCLUDED SPEAKER PERKINS, MR. MARVEL, MRS. CHOWNING, MRS. De BRAGA, AND MR. BEERS. THE STAFF ALSO DID GREAT WORK ON THIS BUDGET.
MRS. CHOWNING MOVED TO ACCEPT THE SUBCOMMITTEE REPORT.
THE MOTION WAS SECONDED BY MS. TIFFANY.
THE MOTION CARRIED UNANIMOUSLY WITH MR. GOLDWATER ABSENT AT THE TIME OF THE VOTE.
BUDGET CLOSED.
********
Chairman Arberry recognized Assemblyman David Goldwater, District 10. Mr. Goldwater praised Georgia Rohrs, Program Analyst in the Fiscal Analysis Division, for the hard work expended on the Department of Education budget closings. Mr. Goldwater also praised the members of the subcommittee, and thanked them for their hard work. He read from the following prepared testimony:
THE SUBCOMMITTEE ON K-12 AND HUMAN RESOURCES DEVELOPED THE FOLLOWING RECOMMENDATIONS FOR THE DEPARTMENT OF EDUCATION BUDGETS.
FOUR BUDGET ACCOUNTS WERE CLOSED IN SUBCOMMITTEE WITH TECHNICAL ADJUSTMENTS ONLY:
EDUCATION OF HANDICAPPED PERSONS (101-2670) PAGE K12ED-76
INDIVIDUALS WITH DISABILITIES (IDEA) (101-2715) PAGE K12ED-79
OCCUPATIONAL EDUCATION (101-2676) PAGE K12ED-90
SCHOOL TO CAREERS (101-2678) PAGE K12ED-107
EDUCATION STATE PROGRAMS (101-2673) PAGE K12ED-1
THE SUBCOMMITTEE RECOMMENDS 2.5 NEW POSITIONS IN THE EDUCATION STATE PROGRAMS BUDGET. THE NEW POSITIONS INCLUDE INCREASING THE HALF‑TIME CHARTER SCHOOL CONSULTANT TO FULL-TIME; A NEW ADMINISTRATIVE SERVICES OFFICER POSITION TO SERVE AS THE DSA ADMINISTRATOR; AND A COMPUTER SYSTEMS PROGRAMMER FOR THE TRANSITION FROM CONTRACT TO DEPARTMENT STAFF TO MANAGE THE SMART PROGRAM. A MANAGEMENT ANALYST POSITION FOR THE SMART PROGRAM IS NOT RECOMMENDED. THE SUBCOMMITTEE ALSO DOES NOT RECOMMEND THE TRANSFER OF FUNDING FROM THE TRADITIONAL TRAVEL AND OPERATING EXPENSE CATEGORIES TO PROGRAM CATEGORIES.
OTHER STATE EDUCATION PROGRAMS (101-2699) PAGE K12ED-18
THE SUBCOMMITTEE RECOMMENDS FUNDING FOR THE SMART PROGRAM FOR:
THE SUBCOMMITTEE WAS CONCERNED THAT FUNDING ONGOING EQUIPMENT AND POSITIONS MIGHT ESTABLISH A PRECEDENT WHEREBY THE STATE WOULD BE EXPECTED TO BE RESPONSIBLE FOR ALL HARDWARE AND SOFTWARE COSTS RELATED TO THE SMART PROGRAM FOR ALL SCHOOL DISTRICTS IN FUTURE BIENNIA. THE SUBCOMMITTEE RECOMMENDS ISSUING A LETTER OF INTENT TO CLARIFY THAT FUNDING FOR HARDWARE, SOFTWARE AND PERSONNEL FOR THE SMART PROGRAM IN THE UPCOMING BIENNIUM IS NOT TO BE CONSIDERED AN ONGOING, CONTINUING RESPONSIBILITY OF THE STATE.
THE SUBCOMMITTEE RECOMMENDS PROVIDING FUNDING IN THE AMOUNT OF $150,000 FOR EACH YEAR OF THE UPCOMING BIENNIUM TO REIMBURSE AS MANY AS 75 TEACHERS PER YEAR UP TO $2,000 EACH FOR SUCCESSFULLY COMPLETING THE NATIONAL TEACHER CERTIFICATION PROGRAM. THE SUBCOMMITTEE ADDED CONTINUED FUNDING FOR THE PEER MEDIATION PROGRAM IN THE AMOUNT OF $50,000. THE SUBCOMMITTEE DOES NOT RECOMMEND FUNDING IN THE AMOUNT OF $340,000 FOR A CHARTER SCHOOL AND CLASS-SIZE REDUCTION EVALUATION.
TEACHER EDUCATION AND LICENSING (101-2705) PAGE K12ED-23
TEACHER LICENSING FEES WILL HAVE TO BE INCREASED TO MAKE THIS BUDGET SELF-SUPPORTING. THE SUBCOMMITTEE RECOMMENDS THAT $143,409 IN TEACHER LICENSES AND FEES BE USED TO PURCHASE EQUIPMENT TO ELECTRONICALLY STORE TEACHER LICENSING FILES IN THE UPCOMING BIENNIUM. THIS PROJECT HAS BEEN APPROVED BY DOIT AND STATE ARCHIVES.
PROFICIENCY TESTING (101-2697) PAGE K12ED-32
THE GOVERNOR’S MODIFIED BUDGET PROVIDED AN ADDITIONAL $1,067,000 IN STATE FUNDS TO MEET THE REVISED COSTS FOR THE ADMINISTRATION OF STATE-MANDATED EXAMINATIONS. THE DEPARTMENT ESTIMATES A $1,893,298 SHORTFALL FOR THE HIGH SCHOOL PROFICIENCY EXAMINATION (HSPE) CONTRACT. THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE TRANSFER OF $312,301 IN FY 2002 AND $313,587 IN FY 2003 IN EXCESS FUNDS IN THE CRITERION-REFERENCED TESTING (CRT) CONTRACT CATEGORY TO THE HSPE CONTRACT CATEGORY TO REDUCE THE SHORTFALL. THE SUBCOMMITTEE RECOMMENDS THAT THE BALANCE OF THE SHORTFALL, $200,410, BE FUNDED BY STATE FUNDS, CONTINGENT UPON THE $200,410 BEING REVERTED SHOULD THE SCIENCE PORTION OF THE HSPE BE DELAYED FOR ONE OR MORE YEARS. AN AMENDMENT TO S.B. 148 IS PENDING IN SENATE FINANCE WHICH WOULD DELAY IMPLEMENTATION OF THE NEW SCIENCE PORTION OF THE HSPE FOR TWO YEARS.
THE SUBCOMMITTEE RECOMMENDS APPROVAL OF A NEW PLANNING, RESEARCH, AND EVALUATION CONSULTANT POSITION TO COORDINATE THE K-8 CRT PROGRAM. IN ADDITION, $500,000 OVER THE UPCOMING BIENNIUM IS RECOMMENDED FOR DEVELOPMENT AND IMPLEMENTATION OF ALTERNATIVE ASSESSMENTS IN LIEU OF THE HSPE, FOR PUPILS WITH DISABILITIES AND PUPILS WHOSE PRIMARY LANGUAGE IS NOT ENGLISH TO RECEIVE A MASTERY DIPLOMA (A.B. 319, SEC. 22). THE SUBCOMMITTEE RECOMMENDED A LETTER OF INTENT DIRECTING THE DEPARTMENT TO INVOLVE MORE PEOPLE IN THE RFP PROCESS FOR TESTING CONTRACTS, TO INCLUDE LANGUAGE WITHIN THE TESTING CONTRACTS TO ENSURE THE TIMELY RETURN AND ACCURACY OF TEST RESULTS, WITH PENALTIES ATTACHED TO BE ENFORCED BY THE STATE BOARD OF EDUCATION.
NDE, STAFFING SERVICES (101-2719) PAGE K12ED-47
THE SUBCOMMITTEE RECOMMENDS THE TRANSFER AND CONSOLIDATION OF LESS THAN FULL-TIME POSITIONS FUNDED FROM MULTIPLE FUNDING SOURCES TO CREATE FULL-TIME EQUIVALENT POSITIONS. THE SUBCOMMITTEE ALSO RECOMMENDS ISSUING A LETTER OF INTENT DIRECTING THE DEPARTMENT TO PROVIDE QUARTERLY REPORTS TO FISCAL ANALYSIS DIVISION STAFF ON THE STATUS OF THE STAFFING SERVICES BUDGET ACCOUNT IN ADDITION TO NOTICES OF CHANGES TO THE STAFFING STRUCTURE OF THIS BUDGET.
EDUCATION SUPPORT SERVICES (101-2720) PAGE K12ED-48
THE SUBCOMMITTEE RECOMMENDS FOUR NEW POSITIONS: AN ACCOUNT CLERK; AN INFORMATION SYSTEMS SPECIALIST TO SUPPORT THE DEPARTMENT’S COMPUTER NETWORK; TWO AUDITORS; AND A HALF-TIME MANAGEMENT ASSISTANT.
THE SUBCOMMITTEE RECOMMENDS ALLOCATING THE GENERAL FUND PORTION OF INDIRECT COSTS DIRECTLY TO THIS BUDGET RATHER THAN TRANSFERRING INDIRECT COSTS PERIODICALLY FROM THE INDIVIDUAL BUDGET ACCOUNTS.
THE SUBCOMMITTEE ALSO RECOMMENDS APPROVAL OF $22,932 FOR TWO 2‑WAY INTERACTIVE VIDEO UNITS FOR CARSON CITY AND LAS VEGAS, WIRING, AND PROJECTION UNITS TO ENABLE BOARD MEMBERS, STAFF, AND THE PUBLIC TO PARTICIPATE IN MEETINGS WITHOUT THE NEED FOR TRAVEL BETWEEN CARSON CITY AND LAS VEGAS FOR REQUIRED MEETINGS. SINCE THIS BUDGET HISTORICALLY HAS HAD REVENUE PROBLEMS, THE SUBCOMMITTEE RECOMMENDS A LETTER OF INTENT BE ISSUED DIRECTING THE DEPARTMENT TO CAREFULLY REVIEW ITS PROJECTED REVENUES AND EXPENDITURES PRIOR TO PURCHASE.
NUTRITION EDUCATION PROGRAMS (101-2691) PAGE K12ED-60
DRUG ABUSE EDUCATION (101-2605) PAGE K12ED-67
THE SUBCOMMITTEE RECOMMENDS BUDGET MODIFICATIONS THAT MORE APPROPRIATELY REFLECT THE FUNDING STRUCTURE FOR SEVERAL EXISTING POSITIONS.
THE SUBCOMMITTEE RECOMMENDS ISSUING A LETTER OF INTENT TO DIRECT THE DEPARTMENT TO CONDUCT A PROGRAM REVIEW OF K-12 SUBSTANCE ABUSE PREVENTION PROGRAMS WHICH HAVE PROVEN EFFECTIVE IN OTHER STATES, ANALYZE WHICH PROGRAMS APPEAR TO BE WORKING AND HOW OTHER STATES ASSESS THEIR PROGRAMS, AND DETERMINE WHAT CAN BE DONE IN NEVADA TO IMPROVE PROGRAMMING AND BE ABLE TO ASSESS RESULTS.
IMPROVING AMERICA’S SCHOOLS—TITLE I(101-2712) PAGE K12ED-85
DISCRETIONARY GRANTS—UNRESTRICTED (101-2706) PAGE K12ED-102
THE SUBCOMMITTEE RECOMMENDS TRANSFERRING TWO HALF TIME POSITIONS IN FY 2003 TO THE TITLE I BUDGET. THESE POSITIONS CURRENTLY ARE FUNDED BY GOALS 2000 WHICH EXPIRES THIS YEAR. THE SUBCOMMITTEE RECOMMENDS MAKING PERMANENT THE HALF TIME TITLE I GRANTS AND PROJECTS ANALYST THAT WAS ADDED AS A TEMPORARY POSITION DURING THE INTERIM. THE SUBCOMMITTEE RECOMMENDS THAT THIS POSITION BE INCREASED FROM HALF TIME TO FULL-TIME, PROVIDED THE DEPARTMENT IS ABLE TO IDENTIFY AN APPROPRIATE FEDERAL FUNDING SOURCE FOR THE ADDITIONAL SALARY COSTS. THE INTENT IS THAT THE ADDITIONAL POSITION COMPONENT WILL SERVE AS A GRANTS WRITER.
Ms. Giunchigliani disclosed that she was a teacher, but that she would be voting on this budget. She commended Mr. Goldwater for a good job on this subcommittee, especially in light of the limited funding.
Mrs. Chowning inquired about the limited English-proficient children and how they were going to be assessed. She had been told in the past there was a dire need for positions to help those children and asked what recommendations had been made to meet the need. Additionally, she was pleased to see an alternative method for the high school proficiency exam for alternative students, whether language deficient or special education. Finally, she was very glad to see an additional position as a grant writer. As the Education Committee had been told, Nevada was sorely lacking in receiving grants compared to other states.
Mr. Goldwater pointed out $500,000 in Budget Account 2697, Proficiency Testing, had been added to develop and implement programs for assessing students with disabilities and those whose primary language was not English. Additionally, as Mrs. Rohrs pointed out, there was a one-shot appropriation for testing English as a Second Language (ESL) children. The Distributive School Account was still under consideration, but there was funding for school programs to grapple with that issue. The subcommittee was very mindful there was a growing non-English speaking population throughout this state. Not only could the state not ignore the situation, but also special attention must be paid to educate those children.
MR. DINI MOVED TO ACCEPT THE SUBCOMMITTEE REPORT.
MOTION SECONDED BY MRS. CEGAVSKE.
THE MOTION CARRIED UNANIMOUSLY WITH MR. PERKINS ABSENT AT THE TIME OF THE VOTE.
BUDGETS CLOSED.
********
Vice Chairwoman Giunchigliani recognized Chairman Arberry, who presented the closing report for the Subcommittee on Higher Education.
THE JOINT SUBCOMMITTEE ON HIGHER EDUCATION COMPLETED ITS REVIEW OF THE UNIVERSITY AND COMMUNITY COLLEGE SYSTEM OF NEVADA’S BUDGETS. THE FOLLOWING HIGHLIGHTS THE MORE SIGNIFICANT BUDGET CLOSING ACTIONS RECOMMENDED BY THE SUBCOMMITTEE.
THE GOVERNOR’S BUDGET USED THE FORMULAS RECOMMENDED BY THE COMMITTEE TO STUDY THE FUNDING OF HIGHER EDUCATION FUNDED AT 85.75 PERCENT IN FY 2002 AND 84.59 PERCENT IN FY 2003. THE SUBCOMMITTEE RECOMMENDS NUMEROUS TECHNICAL AND ENROLLMENT-RELATED ADJUSTMENTS TO THE UCCSN DECISION MODULES. THE ADJUSTMENTS AND THE SUBCOMMITTEE’S POLICY RECOMMENDATIONS ARE AS FOLLOWS:
ADJUSTED BASE: THE SUBCOMMITTEE RECOMMENDS MOVING THE FORMER EQUITY AMOUNTS FROM THE SPECIAL PROJECTS ACCOUNT TO THE INDIVIDUAL CAMPUS BUDGETS. THE SUBCOMMITTEE ALSO RECOMMENDS TECHNICAL CORRECTIONS TO FUND GBC, SCS AND WNCC PERSONNEL SHORTFALLS.
STUDENT ENROLLMENTS: AS RECOMMENDED BY THE COMMITTEE TO STUDY THE FUNDING OF HIGHER EDUCATION, STUDENT FTE PROJECTIONS ARE BASED ON A WEIGHTED THREE-YEAR ROLLING AVERAGE. WITH THE EXCEPTION OF UNR AND GREAT BASIN COLLEGE, RE-PROJECTED ENROLLMENTS ARE SUBSTANTIALLY LOWER THAN THOSE USED IN CALCULATING THE GOVERNOR’S BUDGET. SYSTEM WIDE,ENROLLMENT PROJECTIONS ARE REDUCED BY 2,481 FTE IN FY 2002 AND 3,384 FTE IN FY 2003.
REVENUE RE-PROJECTIONS AND GENERAL FUND ADJUSTMENTS: THE SUBCOMMITTEE AMENDED REVENUE CALCULATIONS IN THE EXECUTIVE BUDGET AND ADJUSTED REVENUE PROJECTIONS BASED UPON ACTUAL FY 2001 REVENUE DATA. FOR THE BIENNIUM, THE SUBCOMMITTEE’S ACTIONS REDUCE GENERAL FUND APPROPRIATIONS BY $17.5 MILLION AND UCCSN REVENUES BY $7.3 MILLION AT THE 85.75 AND 84.59 PERCENT FORMULA LEVELS.
STUDENT CREDIT HOUR MISCALCULATION: UCCSN’S AGENCY-REQUESTED BUDGET MISCALCULATED THE CONVERSION OF STUDENT CREDIT HOURS (SCH) INTO FULL‑TIME EQUIVALENT (FTE) STUDENTS FOR UNR AND UNLV. TO CORRECT THE CONVERSION ERROR, THE SUBCOMMITTEE RECOMMENDS GENERAL FUND ADDITIONS OF $1.85 MILLION IN FY 2002 AND $1.59 MILLION IN FY 2003.
COMMUNITY COLLEGES EQUIPMENT FORMULA: THE NEW FUNDING FORMULAS INCLUDE INSTRUCTIONAL EQUIPMENT FUNDING OF $3,500 PER EXISTING COMMUNITY COLLEGE FACULTY FTE POSITION. THE EXECUTIVE BUDGET EXCLUDED FUNDING FOR EXISTING PART-TIME POSITIONS. TO CORRECT THIS OMISSION, THE SUBCOMMITTEE RECOMMENDS GENERAL FUND ADDITIONS OF $2.12 MILLION IN FY 2002 AND $2.09 MILLION IN FY 2003.
NEW SPACE (OPERATIONS AND MAINTENANCE): SUBSEQUENT TO THE TRANSMISSION OF THE EXECUTIVE BUDGET, THERE WERE NUMEROUS CHANGES TO THE NEW SPACE SCHEDULES. ANTICIPATED OCCUPANCY DATES WERE DELAYED AND SQUARE FOOTAGE ESTIMATES REDUCED, RESULTING IN NEW SPACE GENERAL FUND COST SAVINGS OF $1.44 MILLION FOR THE BIENNIUM.
RECHARGE: THE EXECUTIVE BUDGET DOES NOT ADDRESS OPERATIONS AND MAINTENANCE RECHARGE REVENUES FOR UNR. GENERAL FUND APPROPRIATIONS WERE NOT RECOMMENDED IN THE UNR AREA BUDGETS THAT SUPPORT THE RECHARGE DISTRIBUTION. THE SUBCOMMITTEE RECOMMENDS ADDITIONAL GENERAL FUND APPROPRIATIONS OF $1.71 MILLION FOR THE BIENNIUM TO CORRECT THE OMISSION.
UTILITIES: UCCSN ESTIMATES THERE WILL BE A SYSTEM WIDE UTILITY FUNDING SHORTFALL OF APPROXIMATELY $5.57 MILLION IN FY 2002 AND $6.68 MILLION IN FY 2003. THE SUBCOMMITTEE DEFERRED ACTION ON ADDITIONAL UTILITY FUNDING PENDING CONSIDERATION OF THE ISSUE ON A STATEWIDE BASIS.
SYSTEM COMPUTING SERVICES (SCS): THE SUBCOMMITTEE RECOMMENDS APPROVAL OF FUNDING FOR SYSTEM-WIDE TECHNOLOGY CAPACITY IMPROVEMENTS WITH ADJUSTMENTS THAT REDUCE ONGOING COSTS BY $72,270 FOR THE BIENNIUM. THE SUBCOMMITTEE CONCURS WITH INCREASES FOR SOFTWARE LICENSING AND HARDWARE MAINTENANCE AGREEMENTS AND GENERAL FUND FOR ONGOING MAINTENANCE AND CONNECTIVITY COSTS THAT WERE PREVIOUSLY FUNDED THROUGH GRANTS.
LAW SCHOOL GROWTH: THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION OF $841,262 IN FY 2002 AND $1.06 MILLION IN FY 2003 FOR ANTICIPATED LAW SCHOOL ENROLLMENT GROWTH.
DENTAL SCHOOL: THE EXECUTIVE BUDGET PROVIDED NO GENERAL FUND OR ESTATE TAX SUPPORT FOR THE DENTAL SCHOOL. UNLV INDICATED THE MINIMUM LEVEL OF STATE SUPPORT NEEDED TO OPERATE THE DENTAL SCHOOL IS $1.41 MILLION IN FY 2002 AND $2.12 MILLION IN FY 2003 ($3.52 MILLION FOR THE BIENNIUM). ON MAY 10, 2001, THE BOARD OF REGENTS APPROVED A PROPOSAL TO ADD $3.52 MILLION IN ESTATE TAX FUNDS FOR DENTAL SCHOOL OPERATIONS. THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE ADDITIONAL ESTATE TAX SUPPORT AS RECOMMENDED BY THE BOARD OF REGENTS.
M-594, GENDER EQUITY: THE GOVERNOR RECOMMENDS GENERAL FUND APPROPRIATIONS OF $1.075 MILLION IN FY 2002 AND $1.083 MILLION IN FY 2003 TO IMPROVE TITLE IX COMPLIANCE. THE UCCSN AMENDED ITS REQUEST AND PROPOSED EQUAL ALLOCATIONS OF $537,500 IN FY 2002 AND $541,438 IN FY 2003 FOR UNR AND UNLV. THE ADDITIONAL FUNDING WOULD ALLOW UNR TO ADD A SOFTBALL PROGRAM AND UNLV TO ADD A GOLF PROGRAM. THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE AMENDED GENDER EQUITY RECOMMENDATION.
FTE POSITIONS: THE SUBCOMMITTEE RECOMMENDS AUTHORIZING STAFF TO ADJUST FTE POSITION COUNTS BASED UPON CLOSING DECISIONS.
STUDENT FEES: THE SUBCOMMITTEE CONCURS WITH THE RECOMMENDED FEE AND TUITION INCREASES OF MORE THAN THREE PERCENT PER YEAR AT UCCSN CAMPUSES AND THE $1.00 AND $0.50 ALLOCATIONS TO THE CAPITAL AND GENERAL IMPROVEMENT BUDGETS. THE SUBCOMMITTEE CONCURS WITH UCCSN’S AMENDED PROPOSAL TO INCREASE NON-RESIDENT TUITION BY $335 AT THE UNIVERSITIES AND $25 PER CREDIT FOR PART-TIME NON-RESIDENT COLLEGE STUDENTS TO GENERATE $1.5 MILLION IN ADDITIONAL REVENUES IN FY 2003. THE SUBCOMMITTEE RECOMMENDS AN INCREASE IN UNLV LAW SCHOOL TUITION OF 3.5 PERCENT IN FY 2003 RESULTING IN ADDITIONAL FEE REVENUES OF $87,088.
NEVADA STATE COLLEGE AT HENDERSON: THE SUBCOMMITTEE RECOMMENDS APPROVAL OF FUNDING FOR THE NEVADA STATE COLLEGE AT HENDERSON. HOWEVER, THE SUBCOMMITTEE RECOMMENDS REDUCING FUNDING FOR INSTRUCTIONAL AND RELATED COSTS TO A TOTAL OF $4.44 MILLION IN FY 2003 ($3.75 MILLION GENERAL FUND, $0.69 MILLION UCCSN REVENUE). THE REDUCED FUNDING WOULD ALLOW NEVADA STATE COLLEGE’S FIRST CLASSES TO BEGIN FALL 2002 WITH AN ESTIMATED ENROLLMENT OF 500 FTE STUDENTS RATHER THAN THE 1,000 FTE STUDENTS INCLUDED IN THE EXECUTIVE BUDGET.
SPECIAL PROJECTS COLAS: THE SUBCOMMITTEE RECOMMENDS ADDITIONAL GENERAL FUND APPROPRIATIONS OF $13,219 IN FY 2002 AND $27,039 IN FY 2003 AND ESTATE TAX FUNDS OF $356,415 IN FY 2002 AND $731,850 IN FY 2003 TO PROVIDE COLAS FOR THE POSITIONS ASSIGNED TO THE SPECIAL PROJECTS BUDGET.
COURSE CLASSIFICATION (TAXONOMY): THE SUBCOMMITTEE RECOMMENDS A LETTER OF INTENT DIRECTING THE UCCSN TO DEVELOP A CONSISTENT COURSE TAXONOMY DURING THE INTERIM WITH QUARTERLY REPORTS ON THE PROGRESS OF THE ANALYSIS COMMENCING JANUARY 2002.
FORMULA REDUCTION SCENARIO: THE GOVERNOR’S STAFF AND THE UCCSN WORKED JOINTLY TO DEVELOP A REDUCTION SCENARIO THAT CUTS FORMULA FUNDING FROM 85.75 PERCENT TO 81.55 PERCENT IN FY 2002 AND FROM 84.59 PERCENT TO 80.29 PERCENT IN FY 2003 (4.2 AND 4.3 PERCENT REDUCTIONS RESPECTIVELY) BUT ADDS THE GENERAL FUND APPROPRIATIONS NEEDED TO BRING PROFESSIONAL COLAS TO 4 PERCENT. THE SUBCOMMITTEE CONCURS WITH THE FORMULA CUTS THAT WOULD RESULT IN NET GENERAL FUND REDUCTIONS OF $14.5 MILLION IN FY 2002 AND $11.3 MILLION IN FY 2003. THE SUBCOMMITTEE RECOMMENDS ESTATE TAX REVENUES TO FUND THE HOLD HARMLESS AMOUNTS OF $6.92 MILLION IN FY 2002 AND $6.76 MILLION IN FY 2003.
BOARD OF REGENTS PROPOSALS: ON MAY 10, 2001, THE BOARD OF REGENTS APPROVED SEVERAL ESTATE TAX FUNDING PROPOSALS THAT WERE BROUGHT FORWARD FOR SUBCOMMITTEE CONSIDERATION. THE SUBCOMMITTEE CONCURS WITH THE REGENTS’ REQUEST TO ADD ESTATE TAX REVENUES TO PROVIDE $1.0 MILLION FOR AN EMERGENCY FUND; $656,600 IN FY 2002 AND $743,400 IN FY 2003 FOR THE UNLV LAW SCHOOL CLINIC; AND $130,000 PER YEAR FOR THE ONGOING BACCALAUREATE PROGRAMS AT GBC. THE UCCSN MUST APPROACH IFC FOR APPROVAL OF ALLOCATIONS FROM THE $1.0 MILLION EMERGENCY FUND POOL.
DENTAL SCHOOL COLA: THE APPROVAL OF THE UCCSN BUDGET BY THE HIGHER EDUCATION SUBCOMMITTEE INCLUDED $10,655 IN FY 2002 AND $21,751 IN FY 2003 FOR THE ESTIMATE COST OF COLAs FOR DENTAL SCHOOL STAFF. THIS FUNDING WS PROVIDED FROM THE STATE GENERAL FUND AND SHOULD HAVE BEEN PROVIDED FROM THE ESTATE TAX, THUS REQUIRING A REDUCTION IN STATE GENERAL FUND AND AN ADDITION OF ESTATE TAX IN THIS AMOUNT.
LETTER OF INTENT: DURING THE MAY 16, 2001 WAYS AND MEANS COMMITTEE CLOSING MEETING, SPEAKER DINI SUGGESTED A LETTER OF INTENT ALLOWING THE DESERT RESEARCH INSTITUTE (DRI) TO APPROACH THE INTERIM FINANCE COMMITTEE FOR ALLOCATIONS FROM THE CONTINGENCY FUND FOR WEATHER MODIFICATION (CLOUD SEEDING). THE DRI HAS HISTORICALLY BEEN ALLOWED TO SEEK CLOUD SEEDING FUNDS FROM THE IFC, HOWEVER, THE EXECUTIVE BUDGET WAS SILENT ON THIS ISSUE FOR THE 2001-2003 BIENNIUM. THIS ISSUE WAS NOT HEARD BY THE SUBCOMMITTEE BUT I URGE THE COMMITTEE TO APPROVE THE ADDITION OF A LETTER OF INTENT AT THIS TIME.
SUBCOMMITTEE AMENDMENTS: DURING THE MAY 11, 2001 CLOSING HEARING, THE SUBCOMMITTEE ADDED FUNDING FOR SEVERAL ITEMS INCLUDING: ESTATE TAX REVENUES OF $253,500 IN FY 2002 AND $493,200 IN FY 2003 FOR UNR’S END OF LIFE PROGRAM; ESTATE TAX REVENUES OF $334,417 PER YEAR FOR THE SCHOOL OF MEDICINE GENERAL PRACTICE RESIDENCY; GENERAL FUND APPROPRIATIONS OF $97,821 PER YEAR TO SUPPORT THE UNLV RADIO STATION; AND AGENERAL FUND APPROPRIATION OF $152,158 IN FY 2003 FOR THE BASQUE STUDIES PROGRAM.
THE SUBCOMMITTEE’S ACTIONS RESULT IN GENERAL FUND REDUCTIONS OF $18.1 MILLION IN FY 2002, $20.2 MILLION IN FY 2003 FOR A BIENNIAL GENERAL FUND REDUCTION OF $38.3 MILLION. THE ATTACHED CHART SUMMARIZES THE GENERAL FUND AND ESTATE TAX IMPACT OF THE SUBCOMMITTEE’S CLOSING ACTIONS. I WOULD LIKE TO THANK THE MEMBERS OF THE JOINT SUBCOMMITTEE (ARBERRY, DINI, PERKINS, GOLDWATER, HETTRICK, CEGAVSKE) FOR THEIR DILIGENT EFFORTS IN FORMULATING THESE RECOMMENDATIONS.
Mrs. Chowning asked Chairman Arberry to clarify his comments about funding for the radio station at UNLV. She asked if the funding was coming from Estate Tax or General Fund appropriations. Brian Burke, Senior Program Analyst, Fiscal Analyst Division, explained the subcommittee closed the budget as stated in the report Chairman Arberry read into the record. The Chairman suggested that rather than fund these programs with Estate Tax, there was sufficient savings from the Nevada State College reduction to fund the programs from the General Fund.
Ms. Tiffany inquired if a program was funded from Estate Tax monies as opposed to General Fund, was there a tendency for the funding to be ongoing rather than a one-shot. Chairman Arberry stated that was correct. Ms. Tiffany asked if that was the same situation with the dental clinic where the funding would be ongoing. Chairman Arberry indicated that was correct.
Ms. Tiffany queried if the shift of funding from the General Fund to the Estate Tax fund was due to funding of the law school and dental school from the Estate Tax fund. Mr. Burke replied many additions had been made at the end of the subcommittee deliberations. Afterward, it was realized there was a $1.8 million General Fund savings from the Nevada State College (NSC). Rather than deplete the Estate Tax account further, UCCSN asked for consideration to shift some of the costs to the General Fund rather than the Estate Tax. The savings from NSC were approximately $1.8 million, the additions would amount to $1.76 million.
Ms. Giunchigliani inquired how much the student fees were projected to increase, and what had been recommended by the regents. Mr. Burke responded that throughout the campuses, the increase amounted to approximately 3.5 percent. The subcommittee concurred with the UCCSN’s amended recommendation for non-residents whereby $335 would be added per year to tuition. Ms. Giunchigliani inquired how many dollars was represented by the 3.5 percent increase. Mr. Burke estimated the increase was approximately $2.50. A chart was included in the closing packet which showed what the credits would cost. The figures did not include the $335 addition for non-resident student fees and the $25 credit for part-time students.
With reference to these student fees, Ms. Giunchigliani inquired how Nevada compared to other states. Mr. Burke replied Nevada had some of the lowest fees in the nation. When the Committee to Study the Funding of Higher Education hearings were held, testimony was received that placed Nevada at 47th or 48th in the nation.
Vice Chairwoman Giunchigliani asked about the Basque studies program. Mr. Dini responded this was the continuation of an ongoing study program. It was a famous study and probably the only one in the world. The study was originated by Mr. Robert Laxalt and this funding was to continue the study. Ms. Giunchigliani declared she had not heard of the program before and wondered who had paid for it in the past. Mr. Dini stated the funding had come from the General Fund.
Ms. Giunchigliani inquired when the study would be completed and what would be the benefit. Mr. Burke believed it would be an ongoing study. The $152,000 addition would fund two FTE professional researcher positions and would include a full-time student support position. The study was based at UNR.
Ms. Giunchigliani pointed out she did not support the Henderson College, but she felt the subcommittee had done a good job phasing the project in. If this project went forward, it might be worth looking into eliminating the bifurcated system and placing all education under one umbrella.
Ms. Tiffany reiterated concerns about the Basque study. She said she had real concerns about the funding, even though it was only $150,000. She had not heard of the study before, there was no bill, and it had not been in the budget previously. Many appropriations came before the committee which were for children’s programs and community services, and she did not feel this study should take precedence over those programs. She had a problem supporting the funding for the study.
Mrs. Cegavske pointed out most of her questions had been answered by the previous discussion. With reference to the Henderson State College, she shared the concerns of the other members and did not disagree with the concept of the college with what had been proposed by the Speaker. However, she did have a concern in light of the tight budget about expending funding for such things as the Basque study. There were other areas which should be considered at this time and the legislature should look at the Basque study further down the road. Mrs. Cegavske inquired if money had been put into a capital improvement program for the college. Chairman Arberry replied $26 million had been set aside.
Mrs. Cegavske queried if thought had been given about leaving the school project for now and having staff go to the Henderson Community College. In the future, when there was adequate revenue, the college could be built.
Mr. Burke added, with reference to the subcommittee’s consideration of the issue, there was little discussion about shifting funding to the community college campus; however, that was part of the Henderson College study held during the interim. That proposal was discarded and a decision made to start a new state college campus. Mrs. Cegavske reiterated her support of the concept, but in light of the budget constraints, she suggested restraint.
Vice Chairwoman Giunchigliani pointed out the actual funding was $16 million in general obligation bonds, rather than $26 million for the campus.
Ms. Tiffany inquired if it would be possible to take the Basque study program out of this budget and put it on the list of priorities to be compiled for special consideration at the end of the session. Vice Chairwoman Giunchigliani said she also had more questions about the study. She recognized Dr. Joe Crowley and asked if he could enlighten the committee.
Dr. Joe Crowley, Assistant to the Chancellor for Legislative Relations, stated he previously spent a number of years as president of the University of Nevada at Reno and he was intimately acquainted with the Basque studies program. It was not surprising that southern Nevadans had not heard of this program. In the northern part of the state, as well as in northern California and Idaho, there was a very large Basque population. It was in recognition of the presence of this population and its accomplishments that this program began before Dr. Crowley had been employed with the university, more than 35 years ago. The program was a center of excellence for the university; it was the only program of its kind in the world outside the Basque country, i.e., Spain and France. The program had close relationships with the Basque country, particularly the Spanish Basque country, as well as the Basque University. It was the foundation stone for the University Studies Abroad Program, a consortium which included UNR and UNLV as founding members. There were now approximately 21 universities across the country who were active in 24 countries around the world, which began in the Basque country. Significant numbers of students from Nevada universities went to Basque countries to study. The purpose of the study, apart from being an anchor for the studies abroad consortium, was to do research. Many books published by the University Press in Nevada and other universities emanated from this program. The program had been in the base budget for many years and for many years had sought an enhancement because it had grown and was a most significant program for the UNR. Finally, Dr. Crowley explained, funding had been in the UCCSN budget request for many years. This was a most worthy program.
Vice Chairwoman Giunchigliani thanked Dr. Crowley and felt the $152,000 was what had created consternation among the committee members. If the money had been built into the base over the years, this funding was an enhancement due to the addition of a Ph.D. program and a research program. Dr. Crowley agreed that was correct.
Vice Chairwoman Giunchigliani asked if the $152,000 could be built into the base at sometime in the future. Dr. Crowley opined this was a microcosm of a much larger problem. It had been the intention over the years that the Estate Tax would supplement rather than supplant General Funds. If the committee would review what the Estate Tax dollars were used to fund, most of the programs were ongoing. In the Estate Tax this biennium, there was approximately $12 million of formula funding which originated as equity funding two years ago and was to be put into the budget this biennium. Dr. Crowley said there were not enough General Funds to support formula funding, so the programs remained funded with Estate Tax, and nothing was more ongoing than formula funding.
The radio station, dental school, law school clinic, end of life program, all these programs were ongoing and funded with the Estate Tax, added Dr. Crowley.
Mr. Perkins referred to Mrs. Cegavske’s comments with reference to the Henderson College. The funding formula addressed the budget crunch and funded FTEs at one-third less than at a university. If the students had to be rerouted to a university, instead of providing access for them at a state college, additional money would have to be found for the higher education budget. When an efficient operating load was reached in years ahead, this would create savings for the state in terms of a student reaching a four-year degree at a college rather than the university. This issue always seemed to get missed when discussions were held in committee.
MR. DINI MOVED TO ACCEPT THE SUBCOMMITTEE REPORT.
MR. MARVEL SECONDED THE MOTION.
THE MOTION PASSED WITH MRS. CEGAVSKE AND MS. TIFFANY VOTING NO. MS. LESLIE WAS ABSENT AT THE TIME OF THE VOTE.
BUDGETS CLOSED.
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Assembly Bill 122: Requires payment for all accrued unused sick leave of state employee under certain circumstances. (BDR 23-691)
Ms. Giunchigliani informed the committee that the subcommittee to consider A.B. 122 met yesterday and after Mr. Stevens had calculated some additional numbers, the subcommittee was ready to bring forward an incentive for state employees who did not utilize high levels of sick leave, without hurting anyone currently employed in state government.
The subcommittee recommended utilization of a mechanism involving the special sick leave account. An employee who had accumulated sick leave of 720 hours was provided with a special sick leave account. After reaching 720 hours, one-half of unused sick leave each year was transferred to the special sick leave account. The proposal would provide payment of 50 percent of the hours included in an employee’s special sick leave account.
The subcommittee also recommended taking the 240 hours of sick leave that was currently deducted from an employee’s regular sick leave account, and dividing that number in half. This would allow a state employee to use the 120 hours of sick leave or transfer it into the special account and be paid for a portion of those hours. Therefore, an incentive was built in across the board without hurting any employees. Unfortunately, in the past some employees had been hurt by the existing law.
Mr. Beers inquired if the state accrued sick leave expense when sick leave was earned. In other words, did the state recognize the expense of sick time earned by employees while working. Mr. Stevens responded no. The expense was recorded when the employee actually took sick leave and it appeared on their paychecks.
Mrs. Cegavske asked if a person had used up all their sick leave, if another employee could donate leave to the sick person. Vice Chairwoman Giunchigliani responded yes, that was the catastrophic leave account. This was a very healthy account as many, many state employees contributed to the catastrophic leave account to benefit other employees. This was already in statute and was not changed in this bill. Additionally, the bill would not negatively impact any employee. Ms. Giunchigliani pointed out A.B. 122 would not apply to exempt employees because they did not account for their hours the same as classified employees; however, they made up only a small portion of the work force.
Mrs. Cegavske inquired if there was a time limit before the hours could be collected. Mr. Stevens responded an employee would be required to work for the state for ten years before being eligible for cash payments. Ms. Giunchigliani added the cash payment could be applied to purchasing time with the Public Employees Retirement System (PERS) or paying health care premiums; it was at the option of the employee.
Mr. Stevens summarized the proposal by saying the state would pay 50 percent of the leave balance in the special sick leave account. This account had already been created in statute. Basically, state employees received 120 hours of sick leave per year. When an employee had accumulated 720 hours, one-half of their unused balance each year was deposited in the special sick leave account. The other half was placed in the regular sick leave account. If an employee was in state service for 25 years or more, a maximum of $8,000 in the regular sick leave account could be paid. This sum was determined by the number of hours, less 240 hours or 30 days, and the number of hours was multiplied by the employee’s hourly rate, and a maximum of $8,000 could be available if a person had been employed by the state for 25 years.
This proposal would take all an employee’s hours in the special sick leave account, plus half of the 240 hours deducted from the regular sick leave account, when the monetary payment was calculated. That 120 hours would be added to the special sick leave account and 50 percent of that total amount would be paid the employee. Using calculations from information received from the Department of Personnel, Mr. Stevens said the fiscal impact would be approximately $500,000 per year in General Fund dollars.
There was also a provision in the amendments which would allow state agencies to approach the Statutory Contingency Fund, as they were now allowed to do, for up to a total of $12,000 (a $4,000 increase) for annual leave, regular sick leave payments, and special sick leave payments, explained Mr. Stevens.
MS. GIUNCHIGLIANI MOVED AMEND AND DO PASS A.B. 122.
MS. De BRAGA SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY, WITH MS. LESLIE ABSENT AT THE TIME OF THE VOTE.
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Assembly Bill 324: Revises various provisions regarding regulation of mortgage brokers and mortgage agents. (BDR 54-491)
Mr. Stevens explained A.B. 324 was a bill which would create a new state agency within the Department of Business and Industry to regulate mortgage brokers. Mortgage companies would still be regulated by the Division of Financial Institutions. If the bill was passed, Mr. Stevens suggested language be included to have the Department of Business and Industry split the Financial Institutions budget account and separate the mortgage broker regulation component into a separate budget account. This would be similar to what was done with the Public Service Commission when it was split between the Public Utilities Commission and the Transportation Services Authority. Language had been included in the appropriations act which indicated that the budget be split and brought back to the Interim Finance Committee for approval.
Mr. Stevens explained this was necessary because mortgage fees were deposited directly into the General Fund. The Division of Financial Institutions was provided with a General Fund appropriation for the necessary expenses. If this bill passed, there was no budget approved and there was nothing in The Executive Budget for the new division charged with regulating mortgage brokers. The appropriation dollars were in the Division of Financial Institutions and that budget would have to be split so the mortgage brokers could be placed in a separate budget account with a General Fund appropriation.
Chairman Arberry understood that General Fund dollars had been given to the Division of Financial Institutions, and when fees were collected, the General Fund dollars were returned to the state. Mr. Stevens replied the fees on the mortgage side were deposited directly to the General Fund, except for the cost of examinations. The examination portion was a self-sustaining budget account, but any license fees or other similar types of revenue, were deposited to the General Fund. In turn, a General Fund appropriation was provided to the agency to finance the expenditures of its regulatory operations.
Chairman Arberry inquired if mortgage companies paid their renewal fees, the fees would go to the General Fund. Mr. Stevens said that was correct. As he understood the bill, sometime in the fall, the Interim Finance Committee would review splitting the Division of Financial Institutions into two entities. The new mortgage commission would regulate mortgage brokers and agents and an appropriation would be transferred to this new budget account from Financial Institutions. The regulation of mortgage brokers would begin through that new entity from that point forward.
Chairman Arberry asked about the authority of the board. Mr. Goldwater responded the board would operate similar to the Board of Realtors as opposed to the Board of Medical Examiners. The statutory scheme for the new board came directly from the Board of Realtors and it would be comprised of people from the industry with experts in auditing and knowledge of poor mortgage lending practices. The board would focus on the activities of brokers and agents rather than the financial soundness of the business. Mr. Goldwater said he was confident this board would respond to the pressing needs in this industry.
Replying to the Chairman’s question, Mr. Goldwater stated the board would consist of five members, appointed by the Governor. Chairman Arberry inquired if it would be a conflict of interest if he was to serve on the board as he was a legislator and the owner of a mortgage company. Mr. Goldwater responded there would be no conflict.
In order to pass this piece of legislation, Chairman Arberry asked Mr. Stevens to explain what action was necessary by the committee. Mr. Stevens observed that transitory language would need to be approved. At the present time, all the appropriation was included in the Division of Financial Institutions’ budget. This bill would change the statute to establish the new mortgage commission; however, he reiterated there was no budget for the commission. There had been no discussion as to how many positions should be included in the budget. Mr. Stevens envisioned proceeding in the same fashion as the Public Service Commission, where at the end of the session, it had been decided by the legislature to break the agency into two pieces, one part the Public Utilities Commission, the other the Transportation Services Authority. The agencies returned in the fall to the Interim Finance Committee after the session was over to receive approval before operations were initiated. Mr. Goldwater interjected that would be the correct way to proceed, for the agency to split and come before the Interim Finance Committee for approval.
Mr. Hettrick recalled from previous testimony on the bill there would be no budget as the mortgage industry had agreed to pay all the costs. Mr. Stevens pointed out at the present time, according to the way the statute was written, the license fees for the mortgage industry were deposited directly to the General Fund. There was a corresponding General Fund appropriation, which may not equal perfectly, but the expenses were paid by a General Fund appropriation. If the mortgage commission was to be self-funded, the law would have to be changed where the fees would not be deposited to the General Fund, but deposited directly to the budget for the commission. However, that was not how the bill was written now.
Mr. Goldwater commented the Division of Financial Institutions had always had that “quirky” funding mechanism and it was discussed every session. As the General Government Subcommittee was aware, Financial Institutions was still a fee-funded agency. The industry had agreed that whatever it took to properly fund this commission, they would be happy to pay for it through fees. Maybe sometime in the future, the funding mechanism could be changed to a fee-funded budget similar to other commissions.
Mr. Hettrick asked how the fee would be split in a situation where a mortgage company was a broker and a licensee. Mr. Stevens explained that mortgage companies would stay with the Division of Financial Institutions. Mr. Hettrick pointed out a mortgage broker was a member of a mortgage company. Mr. Goldwater agreed, but pointed out it would depend on whose money was being used. The portion being left with Financial Institutions would be people who lent institutional money. The people who would come under the jurisdiction of the new commission would be those who lent other people’s money. Chairman Arberry inquired if mortgage bankers would be included. Mr. Goldwater responded bankers would be exempt, they had always been exempt from regulation by the Division of Financial Institutions. However, there was some crossover, but to a large extent, the portion left with Financial Institutions would be just that, financial institutions. The division would still have jurisdiction over banks, credit unions, and other similar businesses, where the financial soundness of the institution was in question.
Mr. Goldwater had a good feeling about how the new commission would work, as did the industry, and the statutes could be changed as necessary to ensure the commission operated smoothly.
Mr. Beers commented he had corresponded with Sydney Wickliffe, C.P.A., Director of the Department of Business and Industry, and she had some concerns with the bill. In Section 31, page 13, lines 28-33, the bill stated the commission shall employ a certified public accountant to perform audits. However, on page 12, the bill called for an annual examination. He felt the point Ms. Wickliffe wanted to make was that one certified public accountant (CPA) could not do an annual examination on all the licensees who would be governed by the commission. It was too much work for one individual.
Mr. Goldwater advised he had spoken about this issue with Ms. Wickliffe, and the situation was true. However, the bill requested an examination, not a certified audit. Mr. Beers emphasized the definition of an audit was different for accountants than for others. Certified public accountants felt an audit was a specific, technical term whereby a series of processes needed to take place. It was possible the language could be changed to delete the word “audit” on page 13, line 29.
Chairman Arberry asked Mr. Beers to expand on this amendment. Mr. Beers responded the commission would not be required to do an audit, which would leave the commission to perform examinations, not a certified audit.
Chairman Arberry inquired of Mr. Goldwater whether the commission would approve applications of new mortgage companies who wished to do business in the state. Mr. Goldwater pointed out it would depend on the nature of the company. If the company was lending money countrywide or lending Federal Housing Administration (FHA) loans, the company would be exempt, and the company would have to submit their exemption to the Division of Financial Institutions. Chairman Arberry remarked if that was the case, his mortgage company would be exempt because he was FHA approved. Mr. Goldwater explained that was not correct, there may be a broker or agent relationship which could come under the jurisdiction of the commission.
Mr. Hettrick submitted the concept of the bill was good. However, there were still some concerns with the language in the bill. He referred to page 12, lines 16-25, where the bill stated, “The annual examination must include, without limitation, a formal exit review with the mortgage broker.” Mr. Hettrick pointed out that would be more than a cursory examination. The bill also said the commission must adopt regulations prescribing standards for determining the rating of a mortgage broker based upon the results of an annual examination. Mr. Hettrick declared if that was not more than a cursory examination, how could a rating system be developed which would be meaningful. He certainly did not have a problem with the bill, and Mr. Goldwater was correct about trying to establish some regulation. However, Mr. Hettrick wanted to avoid the problems the legislature had encountered when the PUC was split. The split was revenue neutral, but when the budgets were prepared, the agency was no longer revenue neutral.
If brokers had agreed to fund the commission and it was later determined in front of the Interim Finance Committee that six CPAs would be needed to perform the examinations at a large cost, there would be a problem unless the brokers stepped up to the plate and agreed to pay the cost. Mr. Hettrick did not want to be forced into taking money from the Contingency Fund to pay these costs.
Chairman Arberry stated he would like to bring the bill back before the committee in the morning so that representatives of the Division of Financial Institutions could be present to discuss the bill and the committee could take action.
Mr. Goldwater wished to answer Mr. Hettrick’s question before the discussion was finished. He explained that at every stage of the bill, the industry had said they would fund the commission out of their own fees. Mr. Goldwater had the same concerns and he did not want to increase the burden on the state. The industry had represented their willingness to pay the cost both publicly and privately to Mr. Goldwater. With reference to the exit review portion, this was a concession to the industry. Previously, the Division of Financial Institutions would perform an examination and make a rating but never inform anyone as to what had happened.
Chairman Arberry closed the hearing on A.B. 324 and opened the hearing on A.B. 453.
Assembly Bill 453: Authorizes medical use of marijuana in certain circumstances and revises penalties for possessing marijuana.
(BDR 40-121)
Mr. Stevens commented this was the medical marijuana bill and he had just received the amendments. Ms. Giunchigliani disclosed the amendments added a definition for state prosecution, based on the ruling handed down by the United States Supreme Court. This made it very clear the federal government did not have jurisdiction in this issue. Additionally, the amendment removed the $30,000 appropriation and allowed the acceptance of gifts, grants, and donations to operate the program. The fee had been removed, and if the legislature found in two years there was not enough funding to cover the cost of the program, the issue could be addressed at that time. Ms. Giunchigliani indicated she had received calls offering donations, which the state would gladly accept for the program.
MS. LESLIE MOVED TO AMEND AND DO PASS A.B. 453.
MR. PARKS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
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Assembly Bill 567: Revises provisions governing state financial administration. (BDR 30-358)
Mr. Stevens pointed out A.B. 567 was the bill which would authorize lease-purchase agreements based on the recent Supreme Court decision. If lease-purchase agreements were going to happen, either A.B. 567 or another bill would have to pass during the session. This was a relatively complex bill, so Mr. Stevens requested the committee members review the bill language so it could be discussed tomorrow in time to pass it over to the Senate. The treasurer had proposed some amendments which Mr. Stevens said he would provide to the members.
Chairman Arberry closed the hearing on A.B. 567.
Assembly Bill 21: Requires court to order person convicted of second offense of driving under influence of intoxicating liquor or controlled substance within 7 years to attend program of treatment for abuse of alcohol or drugs. (BDR 43-868)
Mrs. Cegavske said this bill would require those persons who had been convicted of a second driving under the influence (DUI) offense to participate in mandatory drug treatment. The fiscal note was zero as the fees were based on a graduating scale, depending on the individual’s income. This bill would attempt to help those individuals who had multiple DUI offenses, and were able to plea bargain them down.
Chairman Arberry inquired how the determination was made to send a person to treatment after two DUI convictions, rather than three or four convictions. Mrs. Cegavske responded that when someone was placed into treatment sooner than later, they were not as apt to repeat the offense. Because of the death rates from DUI drivers, this was an attempt to ensure society would benefit.
Mrs. Chowning stated she realized the treatment program operated on a sliding scale, but she was concerned about the mandatory program for a person who could not afford to pay for the treatment at all. Ms. Leslie responded that was the purpose for the Bureau of Alcohol and Drug Abuse (BADA)-funded treatment programs. The sliding fee scale went down to zero for those people who truly could not afford to pay. Usually, it had been found that the offenders could afford something. However, the programs were underfunded and people were on waiting lists. Nevertheless, this bill was a good step and eventually, if anyone wanted treatment, they could get it, but they would have to wait for an opening.
Mr. Goldwater stated he had the same concern. He knew of people who could not get into the treatment programs and the court would not allow the offender to get their driver’s license back without going through the program.
Mr. Perkins called attention to the 7-year time frame and inquired about the person who got a DUI and then 6 years and 11 months later received a second DUI. He wondered if that person was in need of rehabilitation after such a long time frame. Mrs. Cegavske said the 7-year time frame was in existing statute.
MR. HETTRICK MOVED DO PASS.
MR. PARKS SECONDED THE MOTION.
THE MOTION PASSED WITH MR. DINI VOTING NO.
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Mr. Dini stated he was against the bill because many working people and families would be hurt. Many people did not have the money to enter a treatment program and if the father was in the program, he would not be able to work to support his family. If the family had no income, they would be forced into social services. Mr. Dini pointed out there was an effect on local and state government and a negative impact on families.
There being no further business before the committee, Chairman Arberry adjourned the meeting at 11:28 a.m.
Reba Coombs
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: