MINUTES OF THE meeting
of the
ASSEMBLY Committee on Ways and Means
Seventy-First Session
May 18, 2001
As a first order of business, Chairman Arberry adjourned the morning meeting of May 18, 2001, at 2:19 p.m.
The Committee on Ways and Meanswas called to order at 2:19 p.m. on Friday, May 18, 2001. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
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. Lynn Hettrick
Ms. Sheila Leslie
Mr. John Marvel
Mr. David Parks
Mr. Richard D. Perkins
Ms. Sandra Tiffany
COMMITTEE MEMBERS ABSENT:
Mr. David Goldwater (Excused)
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Carla Watson, Program Analyst
Mindy Braun, Education Program Analyst
Rick Combs, Program Analyst
Michael J. Chapman, Program Analyst
Andrea Carothers, Committee Secretary
Kathryn Fosnaugh, Committee Secretary
BUDGET CLOSINGS
INTERIM NEVADA LEGISLATURE, BUDGET PAGE – LCB-4 and
LEGISLATIVE COUNSEL BUREAU, BUDGET PAGE – LCB-1
Lorne Malkiewich, Director, Legislative Counsel Bureau, introduced two budget accounts to the committee, the Interim Nevada Legislature Budget Account 327-2626 and the Legislative Counsel Bureau Budget Account 327-2631. He explained he had presented the committee with two handouts, the front page of a prior presentation on the Interim Nevada Legislature budget (Exhibit C) and two pages on the adjustments made to the Legislative Counsel Bureau budget (Exhibit D).
Mr. Malkiewich said his recommendation was to close the Interim Nevada Legislature budget as shown on Exhibit C. He said the only changes to the Governor's budget were adding the cost of living adjustments and the decision unit M-300 amounts that had inadvertently been left out of the budget. He said there were no new positions and not much money was involved.
In explanation of the Legislative Counsel Bureau budget, Mr. Malkiewich said Exhibit D showed the cuts that the bureau was proposing. He said what had been done was to review, not just the budget, but the one-shot appropriations that were still "out there." He said it was confusing as all the decision unit E-700 enhancements were in a one-shot appropriation. He said the step nine grade increase and the 4 percent cost-of-living adjustment had not been included in the Legislative Counsel Bureau's budget, nor were the decision unit M-300 amounts. He said those amounts had been provided previously to committee, and the Governor was also aware of the amounts and the amounts had been reconciled. The changes listed in Exhibit D were additional changes.
Mr. Malkiewich informed the committee that at the Governor's request, an attempt had been made to prepare a budget, where possible, with the two times the 2001 level. He said there had not been much to cut. For example, the proposed cuts in the Fiscal Analysis Division took the proposed budget from an increase of 0.5 percent to 0.3 percent. In addition to what had already been proposed, Mr. Malkiewich suggested the bureau "eat" any increase in utility costs over the biennium and absorb the cost of any other necessary adjustments in the budget.
Mr. Malkiewich said the first page of Exhibit D showed the reductions that were being proposed in the budget of the Legislative Counsel Bureau. He stated all five divisions had contributed to making the adjustments. He said there was a total of $263,000 in General Funds in the budget that could be reduced and another $113,000 would come out of the enhancements included in A.B. 527 for a biennial total of $377,273 in reductions.
Mr. Malkiewich explained page two of Exhibit D listed three bills that were before the committee.
Mr. Malkiewich said reductions for FY2001 were $275,802, for FY2002 $159,026, and for FY2003 $104,485 for a total reduction of $539,313.
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STATE PUBLIC WORKS BOARD and
DIVISION OF BUILDINGS AND GROUNDS
Chairman Arberry read the Closing Report of May 18, 2001, into the record.
THE JOINT SUBCOMMITTEE ON HIGHER EDUCATION AND CAPITAL IMPROVEMENTS HAS COMPLETED ITS REVIEW OF THE BUDGET ACCOUNTS FOR THE STATE PUBLIC WORKS BOARD AND THE DIVISION OF BUILDINGS AND GROUNDS. The following is a discussion of the major actions taken by the Subcommittee with respect to these accounts.
In the Buildings and Grounds account, the revenues and expenditures for new buildings coming on line during the 2001-03 biennium have been revised significantly from the amounts recommended in The Executive Budget. The revisions are based on the addition of projects that have been recommended in the 2001 Capital Improvement Program and revised completion dates for CIP projects approved in previous CIP programs. Although the decision to include some of these buildings in the 2001 CIP Program has not been made at this time, the Subcommittee elected to include the Division’s projected revenues and expenditures associated with these projects in the budget.
Because the Subcommittee closed this budget account prior to the approval of the 2001 CIP Program, the Subcommittee authorized staff to remove revenues and expenditures for any projects that are not approved in the legislatively approved CIP Program. If time does not permit making the changes prior to the close of session, the Subcommittee recommended a letter of intent be sent to the Administrator of the Division instructing him to de-augment revenue and expenditure authority for any CIP projects that are not approved by the Legislature.
Expenditures totaling $96,346 in FY 2002 and $239,484 in FY 2003 have been included in the budget for the Carson City Armory Building on Carson Street. The Department of the Military will vacate the Armory building when its new facility is completed. Although the state is taking over the expenditures for maintaining the building, rent revenue from the building has only been included for a portion of the building that will continue to be occupied by the EMERGENCY Management Division. Because the agency indicated that a plan had not been developed for the usage of the Armory Building once the Department of Military vacates the facility, the Subcommittee voted to recommend a Letter of Intent directing the Division to develop a plan for the usage or sale of the building and to present that plan to the Interim Finance Committee at its first meeting in calendar year 2002.
The Subcommittee voted to approve $1,044,543 in FY 2002 and $700,927 in FY 2003 for building maintenance and renovation projects. The Governor recommended $1,069,869 in FY 2002, but the Subcommittee eliminated $25,326 in expenditures for projects that were duplicative of projects included in the 2001 CIP Program.
The Subcommittee voted to close the budgets for the Clear creek youth center and the Marlette lake water System as recommended by the governor. The division of buildings and grounds had indicated during subcommittee hearings that the governor would probably recommend the transfer of the clear CREEK facility to the Division of State Parks prior to the end of session, but the subcommittee was informed that a delay in the completion of a business plan for the facility had resulted in the Governor deciding not to transfer the facility to the Division of state parks at this time. the subcommittee concurred in that determination.
In the State Public Works Board accounts, the Subcommittee approved the transfer of seven accounting positions (two in the board’s administration account and five in the Board’s Inspection account) to the Administrative Services Division of the Department of Administration as recommended by the Governor. The agencies indicated that transferring the Board’s accounting staff to the Administrative Services Division would result in efficiencies for both agencies. Primarily, the agencies indicate that having a larger staff assists in minimizing the impacts of vacancies and positions taking leave. Additionally, the board indicated that the Administrator of the Administrative Services Division MIGHT be able to assist the accounting staff in developing a more reliable method of allocating project and management and inspection fees to the various capital improvement projects.
In the Board’s Administration account, the Subcommittee considered the elimination of the facility audit program that was approved by the 1997 Legislature, but voted to provide continued funding in the base budget for the program. The program was approved to provide an analysis of the condition of all state buildings and includes three full-time positions. Although the Subcommittee was concerned with the agency’s record of completing the audits of buildings and the effectiveness of the program in general, the Subcommittee agreed to provide the newly appointed Manager the opportunity to establish a worthwhile and effective program.
In the Board’s Inspection account, the Subcommittee approved funding for the costs of increasing two half-time Management Assistant positions to full-time in order to provide adequate administrative support for the Board’s professional staff as recommended by the Governor.
The Subcommittee voted to approve $263,912 in FY 2002 and $280,822 in FY 2003 for three new positions and various other expenditures to improve project management and coordination. The Governor had recommended $736,580 in FY 2002 and $677,508 in FY 2003 for five new positions and other expenditures for that purpose. The Subcommittee voted to approve three new Project Manager positions. one position will provide supervision for the Las Vegas office, one position will serve as the Fire Protection Engineer for the agency, and one position will be assigned to the Las Vegas office to manage projects in the Las Vegas area. The Subcommittee did not approve an additional Project Manager position and a Management Analyst position that were recommended by the Governor.
The Subcommittee voted not to approve $6,991 in increased out-of-state travel funding in each year of the biennium as recommended by the Governor because it was unclear how the additional out-of-state travelwould result in improved project management and coordination. The Subcommittee also voted not to approve $150,000 in FY 2002 and $50,000 in FY 2003 for a Legacy Solutions Capital Project Planning and Budget System that the Board indicated would allow for automated ten-year capital planning. The Subcommittee and the agency believed that it would be beneficial to have the Department of InformationTechnology examine the system and ensure that it is warranted. The Subcommittee also voted to reduce the number of laptops that would be purchased from ten in each year of the biennium as recommended in The ExecutiveBudget to five in FY 2002 only.
The Subcommittee approved funding to purchase Primavera Expedition software, which is project-scheduling software that the Board indicates willassist in avoiding delays in projects, and Lynx Photo Management software, which will enable the Board to create a photographic log of any project.
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STATE PUBLIC WORKS BOARD AND |
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DIVISION OF BUILDINGS AND GROUNDS |
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GENERAL FUND IMPACT |
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Page |
Budget |
Title |
FY 2002 |
FY 2003 |
||
|
ADMIN-66 |
710-1349 |
Buildings and Grounds |
$ - |
$ - |
||
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ADMIN-81 |
101-1353 |
Clear Creek Youth Center |
$ - |
$ - |
||
|
ADMIN-86 |
712-1366 |
Marlette Lake |
$ - |
$ - |
||
|
ADMIN-90 |
101-1560 |
Public Works Administration |
$ (6,862) |
$ (3,568) |
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ADMIN-96 |
101-1562 |
Public Works Inspection |
$ - |
$ - |
||
|
|
|
Total |
$ (6,862) |
$ (3,568) |
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Chairman Arberry indicated that Rick Combs, Program Analyst, would describe the agency's proposal for a 10 percent salary increase for inspector positions. Mr. Combs explained when the Senate Finance Committee had closed Budget Account 1562, the Inspection Account, they elected to provide approximately 10 percent, or a 2 grade increase, for the inspector positions in that account. He said the agency had indicated there was a lot of turnover in the inspector positions because of the salary differentiation between the state positions and what was paid to inspectors in Clark County and Washoe County. The agency hoped the increase would control the level of turnover. Mr. Combs said staff felt the increase was reasonable. The proposal would affect 17 Inspector II positions, 1 Inspector III position, and a Chief Inspector position. He stated a 2 grade increase for all those positions would result in an increase in the budget of $86,476 the first year of the biennium and $87,658 for the second year of the biennium. He reiterated that the Senate Finance Committee had voted to approve the grade increase.
Chairman Arberry thanked the State Public Works Board, Rick Combs, and other legislative staff for their work in putting together the closing report.
Acting as Chairman, Mr. Dini asked Chairman Arberry if he endorsed the step increase. Chairman Arberry answered yes. He believed the increase was warranted. He said he had been involved in the field of reviewing plans for the City of Las Vegas for many years and he knew how hard it was to acquire good inspectors. He added inspectors were the "eyes and ears" in the field, and the lack of good inspectors lead to many problems, such as the problems the board had experienced with the Lied Library.
ASSEMBLYWOMAN GIUNCHIGLIANI MADE A MOTION TO ACCEPT THE CLOSING REPORT WITH THE MODIFICATION TO INCLUDE THE TWO-GRADE INCREASE FOR THE INSPECTORS IN THE STATE PUBLIC WORKS BOARD INSPECTION ACCOUNT.
ASSEMBLYWOMAN CEGAVSKE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Beers, Assemblyman Goldwater, Assemblyman Perkins, Assemblyman Parks, and Assemblywoman Tiffany were not present for the vote.)
BUDGET CLOSED.
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DEPARTMENT OF BUSINESS AND INDUSTRY
Mrs. Chowning read the Closing report of May 18, 2001, into the record.
THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT HAS REVIEWED THE BUDGETS FOR THE BUSINESS AND INDUSTRY SECTION OF THE EXECUTIVE BUDGET AND IS RECOMMENDING THE FOLLOWING CLOSING ACTIONS.
THE FOLLOWING BUDGETS WERE CLOSED BY THE SUBCOMMITTEE AS RECOMMENDED BY THE GOVERNOR WITH ONLY MINOR AND TECHNICAL ADJUSTMENTS:
· INDUSTRIAL DEVELOPMENT REVENUE BOND (101-4683) – PG 6
· INSURANCE EXAMINERS FUND (223-3817) – PG 41
· INSURANCE EDUCATION AND RESEARCH (101 -3824) – PG 49
· SELF-INSURED WORKERS COMPENSATION (210 -4684) – PG 64
· DAIRY COMMISSION (233-4470) – PG 69
· MANUFACTURED HOUSING (101-3814) – PG 75
· MOBILE HOME LOT RENT SUBSIDY (630 -3842) – PG 80
· MOBILE HOME PARKS (271-3843) – PG 84
· HOUSING DIVISION (503-3841) – PG 92
· FINANCIAL INSTITUTIONS – INVESTIGATIONS (101-3805) – PG 112
· CONSUMER AFFAIRS (101-3811) – PG 119
· GOVERNOR’S COMMITTEE TO HIRE THE HANDICAPPED (101-3156) – PG 123
· EMPLOYEE MANAGEMENT RELATIONS BOARD (101-1374) – PG 156
· ATHLETIC COMMISSION (101-3952) – PG 175
· ENERGY CONSERVATION (101-4868) – PG 183
· MINE SAFETY AND TRAINING (210-4686) – PG 145
· PETROLEUM OVERCHARGE REBATE (101-4539) – PG 187
BA 101-4681 Business and Industry Administration (101-4861) B&i - pg 1
The Subcommittee voted to delete $1,106 for the costs associated with the Director’s attendance at the Women Executives in State Government conference in each year of the biennium. However, as approved by the Subcommittee, the account will include $3,061 for training expenditures in each year of the biennium, and the subcommittee indicated that the funds could be used by the Director for travel to out-of-state training courses if the Director wishes to use the funds in that manner.
REAL ESTATE ADMINISTRATION (101-3823) B&I – PG 13
THE EXECUTIVE BUDGET INCLUDES A $206,655 BALANCE FORWARD IN EACH YEAR OF THE BIENNIUM; HOWEVER, THERE SHOULD BE NO BALANCE FORWARD FOR THIS ACCOUNT. IN ORDER TO CORRECT THIS, THE SUBCOMMITTEE ELIMINATED THE BALANCE FORWARD AND MADE A NUMBER OF OTHER ADJUSTMENTS WHICH INCLUDE INCREASING THE TRANSFER FROM BUDGET ACCOUNT 3820 (COMMON-INTEREST COMMUNITIES) TO REFLECT ACTUAL ADMINISTRATIVE SUPPORT RECEIVED FROM THE dIVISION; INCREASING REVENUE RECEIVED FROM FEES TO REFLECT CURRENT AGENCY PROJECTIONS; REDUCING FUNDING FOR TRAINING TO REFLECT ACTUAL NEED; AND REDUCING FUNDING FOR EQUIPMENT TO REFLECT REVISED COMPUTER AND OFFICE FURNITURE COSTS.
COMMON-INTEREST COMMUNITIES (101-3820) B&I – PG 19
THE SUBCOMMITTEE APPROVED INCREASING THE TRANSFER FROM THIS BUDGET ACCOUNT TO THE REAL ESTATE ADMINISTRATION ACCOUNT TO REFLECT ACTUAL ADMINISTRATIVE SUPPORT RECEIVED FROM THE DIVISION. BECAUSE THE RESERVE BALANCE FOR THIS ACCOUNT APPEARED TO BE AT A SUFFICIENT LEVEL ($633,013 FOR FY 2002 AND $897,307 FOR FY 2002-03), THE SUBCOMMITTEE REQUESTED THAT THE AGENCY REVIEW THE RESERVE DURING THE INTERIM to DETERMINE IF THE PER-UNIT FEE OF $3 should BE REDUCED IN ORDER TO MAINTAIN THE CURRENT RESERVE LEVEL. SENATE BILL 421, IF ENACTED, WOULD REDUCE THE RESERVE IN THIS BUDGET ACCOUNT SIGNIFICANTLY.
THE SUBCOMMITTEES REMAIN SPLIT ON THE ISSUE OF THE GOVERNOR’S RECOMMENDATION FOR A NEW COMPLIANCE INVESTIGATOR II POSITION, AS RECOMMENDED IN DECISION UNIT E-278. THE SENATE APPROVED THE CLOSING OF THIS BUDGET WITH THE POSITION INCLUDED. MEMBERS OF THE ASSEMBLY SIDE OF THE SUBCOMMITTEE DID NOT BELIEVE SUFFICIENT JUSTIFICATION WAS PROVIDED FOR THE POSITION AND REQUESTED ADDITIONAL INFORMATION FROM THE AGENCY JUSTIFYING THE POSITION. THIS ACCOUNT REMAINS OPEN AND SHOULD BE CLOSED BY THE WAYS AND MEANS COMMITTEE AFTER REVIEWING THE ISSUE OF THE NEW COMPLIANCE INVESTIGATOR POSITION.
THE AUDIT REPORT ISSUED BY THE LEGISLATIVE AUDITOR INDICATES THE AGENCY HAS BEEN INAPPROPRIATELY RECORDING ADMINISTRATIVE OPERATING REVENUES AND EXPENDITURES TO FINANCIAL INSTITUTIONS, (B/A 3805) INVESTIGATIONS. THE SUBCOMMITTEE APPROVED ADJUSTMENTS TO TRANSFER REVENUES AND EXPENDITURES FROM THE INVESTIGATION ACCOUNT TO THE OPERATING ACCOUNT IN ACCORDANCE WITH THE LEGISLATIVE AUDIT. THE EXECUTIVE BUDGET RECOMMENDED THAT COMPUTER EQUIPMENT FOR STAFF IN THE FINANCIAL INSTITUTIONS DIVISION BE FUNDED FROM THE INVESTIGATION ACCOUNT. HOWEVER, THE SUBCOMMITTEE INSTEAD FUNDED THE EQUIPMENT FROM THE OPERATING ACCOUNT. SUBSEQUENT TO THE SUBCOMMITTEE CLOSING, STAFF DISCOVERED FUNDING OF $7,779 WAS OMITTED IN ERROR FOR COMPUTER SOFTWARE/HARDWARE. STAFF RECOMMENDS AN ADJUSTMENT TO INCLUDE THIS AMOUNT IN FY 2002. LASTLY, THE SUBCOMMITTEE APPROVED THE ELIMINATION OF AN EXISTING FINANCIAL EXAMINER POSITION AND FUNDING FOR ONE NEW PROGRAM ASSISTANT II.
DIVISION OF INDUSTRIAL RELATIONS (210-4680) B&I – PG 127
THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION TO ELIMINATE A MANAGEMENT ANALYST II POSITION. THE SUBCOMMITTEE ALSO RECOMMENDS APPROVAL OF THE DIVISION’S REQUEST TO ELIMINATE FIVE ADDITIONAL POSITIONS: TWO COMPLIANCE INVESTIGATOR II POSITIONS, TWO PROGRAM ASSISTANT II POSITIONS, AND ONE PROGRAM ASSISTANT III POSITION. THE DIVISION, AFTER AN INTERNAL EVALUATION OF ITS NEEDS, DETERMINED THESE POSITIONS WERE NO LONGER NECESSARY TO CARRY OUT ITS DUTIES.
OCCUPATIONAL SAFETY AND HEALTH ENFORCEMENT (210-4682) B&I – PG 135
THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE DIVISION’S REQUEST TO ELIMINATE AN INDUSTRIAL HYGIENIST III POSITION. THE POSITION, LOCATED IN ELKO, HAD BEEN VACANT SINCE SEPTEMBER. THE DIVISION DETERMINED THERE WAS INSUFFICIENT WORKLOAD TO MAINTAIN A FULL-TIME POSITION, AND WILL UTILIZE STAFF FROM THE RENO OFFICE TO SERVE THE ELKO AREA.
SAFETY CONSULTATION AND TRAINING (210-4685) B&I – PG 140
THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION TO REDUCE CONTRACT SERVICES ASSOCIATED WITH THE WIDE-BASED MEDIA CAMPAIGN FROM $425,000 TO $100,000 PER YEAR DUE TO THE AGENCY’S DIFFICULTY IN DETERMINING THE IMPACT AND EFFECTIVENESS OF THE PROGRAM. THE SCATS SECTION INTENDS TO MODIFY THE CAMPAIGN TO TARGET SPECIFIC INDUSTRIES TO IMPROVE AWARENESS OF WORKPLACE SAFETY ISSUES. THE SUBCOMMITTEE ALSO RECOMMENDS ELIMINATION OF A MANAGEMENT ASSISTANT I POSITION THAT HAS BEEN VACANT SINCE JANUARY 2000.
NEVADA ATTORNEY FOR INJURED WORKERS (101-1013) B&I - PG 150
IN CLOSING THIS BUDGET, THE SUBCOMMITTEE REDUCED THE GOVERNOR’S RECOMMENDED FUNDING OF $128,425 FOR REPLACEMENT COMPUTER EQUIPMENT BY $30,944. iN ADDITION, THE SUBCOMMITTEE REDUCED THE GOVERNOR’S RECOMMENDED FUNDING OF $45,553 FOR NEW EQUIPMENT AND COMPUTER PROGRAMMING BY $676 FOR REDUCED COST OF MAXTOR HARD DRIVES AND MOVED THE REMAINING FUNDING FOR MAXTOR HARD DRIVES TO FY 2001-02 INSTEAD OF FY 2002-03.
BA 3900 Labor commissioner (101-3900) B&I – PG 179
The Subcommittee approved $43,542 in FY 2002 and $45,417 in FY 2003 to provide significant salary increases for the Labor Commissioner, Deputy Labor Commissioner, and Chief Assistant Labor Commissioner positions in addition to the salary increases that are recommended for all unclassified positions in The Executive Budget. although the Subcommittee believed the salary increases were warranted, it was concerned that the increases may cause some disparity compared to other unclassified salaries in the Department of Business and Industry. therefore, the Subcommittee recommends the issuance of a letter of intent directing the department of administration to conduct a study regarding the unclassified salaries for the Department of Business and Industry to determine whether there is sufficient uniformity among the salaries for the administrators and other unclassified positions in the department. The letter of intent would direct the department of administration to provide the results of the study and a description of any recommendations it develops for ensuring uniformity to the 2003 Legislature.
Mrs. Chowning reminded the committee that the salaries within the budget had a significant disparity. She said the only decision that needed completion was in the Insurance Regulation Budget Account 101-3813, which was whether or not the Ways and Means Committee wanted to make the same determination as the Senate Finance Committee and recommend the new Compliance Investigator II position.
ASSEMBLYWOMAN GIUNCHIGLIANI MADE A MOTION TO APPROVE THE CLOSING REPORT AND TO CLOSE THE INSURANCE REGULATION BUDGET ACCOUNT WITH THE APPROVAL OF THE COMPLIANCE INVESTIGATOR II POSITION.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Beers, Assemblyman Goldwater, Assemblyman Perkins, and Assemblywoman Tiffany were not present for the vote.)
BUDGET CLOSED.
Mrs. Chowning thanked Mr. Combs and the legislative staff for their assistance with the budgets.
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INTERIM NEVADA LEGISLATURE, BUDGET PAGE – LCB-4 and
LEGISLATIVE COUNSEL BUREAU, BUDGET PAGE – LCB-1
Chairman Arberry requested a motion to close the Interim Nevada Legislature budget and the Legislative Counsel Bureau budget.
ASSEMBLYWOMAN CEGAVSKE MADE A MOTION TO CLOSE THE BUDGETS AS RECOMMENDED BY STAFF.
ASSEMBLYMAN DINI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Beers, Assemblyman Goldwater, Assemblyman Perkins, and Assemblywoman Tiffany were not present for the vote.)
BUDGETS CLOSED.
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DIVISION OF HEALTH CARE FINANCING AND POLICY
Ms. Giunchigliani read the Closing Report of May 18, 2001, into the record.
The joint subcommittee reviewing the Human Resources/K-12 budgets has completed its review of the budgets of the Division of Health Care Financing and Policy and has concurred in the closing actions recommended. The following highlights the moresignificant issues and budget closing actions the subcommittee is recommending.
The Subcommittee concurs with the DIVISION’S proposals to begin implementing many of the recommendations outlined in the Business Process Re-engineering study which will move the Division to an organizational environment referred to as Value Purchasing. To assist the Division with implementing the organizational changes, the Subcommittee is recommending eight of the nine new positions recommended in The Executive Budget. The Subcommittee concurs with the GOVERNOR’S recommendation to offset a portion of the additional costs for the new positions recommended by eliminating eight existing positions in the Medicaid budget. The new positions the Subcommittee recommends include three Administrative Services Officer positions for administration and infrastructure support, three Management Analysts for the rate development unit, one Personnel Technician for processing personnel transactions andCOORDINATING recruitment and examining, and one Accounting Specialist for payroll. The Subcommittee does not recommend approving a new Management Analyst position for the Budget/Planning unit.
The Subcommittee concurs with the Governor’s recommendation to merge the Health Resources Cost Review budget account into the Division’s ADMINISTRATIVE budget.
BASED ON INFORMATION RECENTLY MADE AVAILABLE TO STATES, THE SUBCOMMITTEE RECOMMENDS INCREASING THE FEDERAL MATCH PARTICIPATION (FMAP) RATE FOR MEDICAID IN FY 2003. BY INCREASING THE FMAP, A SAVINGS OF APPROXIMATELY $7 MILLION IN STATE FUNDS WILL BE REALIZED IN FY 2003. TO PROVIDE SAFEGUARDS, THE SUBCOMMITTEE RECOMMENDS THE CAPPING LANGUAGE IN THE APPROPRIATIONS ACT BE changED TO modify THE CAP ON MEDICAID IF THE INCREASE IN THE FMAP RATE DOES NOT MATERIALIZE. ADDITIONALLY, THE SUBCOMMITTEERECOMMENDS ISSUING A LETTER OF INTENT TO THE DEPARTMENT OF HUMAN RESOURCES THAT THE MONEY COMMITTEES INTEND TO FULLY FUND THE MEDICAID BUDGET.
The Subcommittee recommends approving several new initiatives in the Medicaid program and expanding several existing Medicaid waivers by adding new slots over the UPCOMING biennium. The Subcommittee recommends expanding the Community Home-based Initiative (CHIP) waiver by 160 new slots, the Adult Group Care Waiver by 100 new slots and the Physically Disabled Waiver by 180 new slots. The expansion recommended for these three waivers is in addition to the significant increase in new slots already approved for the Mental Retardation Waiver administered by the Division of Mental Health and Developmental Services. The expansion will ensure that waiting lists are being proactively addressed and places the state in a solid position for addressing the intent of the Olmstead decision. The Subcommittee’s recommendations will cost approximately $4.5 million in state funds over the upcoming biennium.
The Subcommittee supports the Governor’s recommendation to fund two new initiatives, the elimination of the CHAP Assets Test and the implementation of the Breast and Cervical Cancer Prevention and Treatment program, an optional program recently approved by Congress. As a budget savings measure, the Subcommittee recommends the implementation of these two initiatives be delayed UNTIL July 2002. The delay will save approximately $3 million is state funds in the Medicaid budget over the upcoming biennium.
The Subcommittee recommends approving discretionary rate increases for all Medicaid providers. The rate increases BEING RECOMMENDED are based on the preliminary findings from the consultant the Division has retained to study the soundness of the CURRENT payment and rate setting methodologies and to develop recommendations to improve the equitableness of the rates Medicaid currently pays. The cost for the rate increases recommended is $76.9 million (federal and state) over the 2001-03 biennium. Due to a number of factors, the rate increases included in The Executive Budget were significantly UNDER FUNDED. the Subcommittee recommends delaying the implementation of the rate increases until October of each fiscal year In order to remain relatively close to the funding LEVELS THAT WERE recommended for rate increases in the Executive budget.
tHE sUBCOMMITTEE CONCURS WITH THE RECOMMENDATIONS IN THE EXECUTIVE BUDGET TO ELIMINATE 13 EXISTING POSITIONS TO OFFSET THE COST OF 13 NEW POSITIONS RECOMMENDED IN THE dIVISION’S aDMINISTRATION AND MEDICAID BUDGETS. THE SUBCOMMITTEE ALSO RECOMMENDS APPROXIMATELY $1.6 MILLION FOR EACH FISCAL YEAR TO ALLOW THE DIVISION TO CONTRACT FOR CERTAIN SERVICES PREVIOUSLY PERFORMED BY MEDICAID STAFF. THE SERVICES INCLUDE PRIOR AUTHORIZATION REQUESTS, LEVEL OF CARE DETERMINATIONS AND PRE-ADMISSION SCREENING AND ANNUAL RESIDENT REVIEWS. SAVINGS THAT ARE BEING REALIZED FROM THE MANNER IN pERSONAL CARE ATTENDANT SERVICES ARE ADMINISTERED WILL OFFSET THE COSTS FOR THE CONTRACT.
THE SUBCOMMITTEE RECOMMENDS APPROXIMATELY $2.9 MILLION IN ADDITIONAL STATE FUNDS FOR THE UPCOMING BIENNIUM TO COVER THE PROJECTED INCREASES IN MEDICAID CASELOAD AND MEDICAL COSTS FOR THE TANF AND CHAP POPULATION THAT WERE UNDERESTIMATED IN tHE eXECUTIVE bUDGET.
THE SUBCOMMITTEE RECOMMENDS THREE NEW TECHNOLOGY POSITIONS TO SUPPORT THE IMPLEMENTATION OF THE MEDICAID MANAGEMENT INFORMATION AND PHARMACY POINT OF SALE SYSTEMS.
nEVADA CHECK-UP (101-3178) – PAGE 24
THE SUBCOMMITTEE RECOMMENDS SUFFICIENT FUNDING TO ALLOW CASELOAD FOR THE CHECK-UP PROGRAM TO INCREASE TO 20,431 ENROLLEES PER MONTH FOR FY 2002 AND 23,887 ENROLLEES PER MONTH FOR FY 2003. SIMILAR TO MEDICAID, THE FMAP RATE FOR THE CHECK-UP PROGRAM IS ANTICIPATED TO INCREASE WHICH WILL PRODUCE A SAVINGS OF APPROXIMATELY $260,000 IN FY 2003. THE LETTER OF INTENT REFERENCED IN THE MEDICAID BUDGET AS WELL AS MODIFICATIONS TO THE CAPPING LANGUAGE WILL ALSO APPLY TO THE CHECK-UP BUDGET.
INTERGOVERNMENTAL TRANSFER PROGRAM (IGT) (101-3157) - PAGE – 30
THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATIONS TO USE APPROXIMATELY $149 MILLION OVER THE UPCOMING BIENNIUM FROM THE IGT BUDGET TOHELP FUND MEDICAID EXPENDITURES. THE EXTENSIVE USE OF THE IGT REVENUES FOR THE CURRENT AND UPCOMING BIENNIUM WILL REDUCE THE IGT RESERVE TO APPROXIMATELY $13.2 MILLION AT THE END OF FY 2003. THE AVAILABILITY OF THIS REVENUE SOURCE TO FUND MEDICAID EXPENDITURES WILL BE SIGNIFICANTLY REDUCED FOR THE 2003-05 BIENNIUM.
THE SUBCOMMITTEE RECOMMENDS REPLENISHING THE INSTITUTIONAL CARE FUND AT A LEVEL OF $500,000 FOR THE UPCOMING BIENNIUM. THE INSTITUTIONAL CARE FUND SERVES AS A REVENUE SOURCE TO ASSIST FINANCIALLY STRAPPED COUNTIES WITH THEIR PORTION OF MEDICAID LONG-TERM CARE COSTS.
IN CONCLUSION, THE SUBCOMMITTEE’S RECOMMENDATIONS WILL REDUCE THE GENERAL FUND APPROPRIATION FOR THE DIVISION OF HEALTH CARE FINANCING AND POLICY BY ($8,333,434) FOR FY 2002 AND BY ($1,912,611) FOR FY 2003, FOR A NET REDUCTION OF ($10,246,045) OVER THE UPCOMING BIENNIUM.
ASSEMBLY COMMITTEE ON WAYS AND MEANS
BUDGET CLOSING ACTION
DIVISION OF HEALTH CARE FINANCING AND POLICY
GENERAL FUND IMPACT
BUDGET ACCOUNT FY 2002 FY 2003
HEALTH CARE FINANCING ($36,825) ($37,347)
& pOLICY
mEDICAID ($8,152,145) ($1,512,928)
neVADA cHECK-UP ($144,414) ($362,336)
igt $0 $0
TOTAL ($8,333,434) ($1,912,611)
Ms. Giunchigliani said there were some possible adjustments that could be made to free up more funds. She requested that staff discuss the Medicaid account.
Steve Abba, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, said a few issues had come up since the subcommittee closed the Medicaid budget. He explained one issue dealt with the discretionary raise increases. He said the budget had closed with a provision for rate increases, based on the division's rate study that had recently been completed. The rate increases would be effective October 1, 2001, and October 1, 2002. He expounded there had been discussion that would change the effective dates to October 1, 2001, and July 1, 2002. He stated the funds for the rate increases that had been recommended by the subcommittee would be approximately $76.9 million, but by changing the effective date there would be an additional cost to $81.7 million, $2.4 million of which would be state funds. He said the long-term care industry was concerned with deleting the implementations dates for the recommended increases.
Mr. Abba said other areas within the budget would provide additional savings and would offset the additional costs for the rate increases. He said the decision unit in The Executive Budget that dealt with the funding sources for the rate increases consisted of two sources, General Fund dollars and federal dollars. However, a third funding source came from Nevada counties through funds contributed by the counties to pay for their portion of long-term care costs. Mr. Abba explained the county funds had not been factored into the cost for the rate increases. In essence, the state funds had been over budgeted in that particular decision unit. Factoring in the counties contribution for the rate increases would save General Fund dollars in the amount of $838,000 in FY2002 and approximately $1.8 million in FY2003.
Mr. Abba said the last area for potential General Fund savings dealt with the calculation of the higher federal match rate in FY2003. The calculations that had been made with the original closings reduced state funds as well as Intergovernmental Transfer Program (IGT) revenues. The IGT revenues were reduced the second year on a prorated basis along with the state General Funds. The reduction of IGT revenue was approximately $1.6 million. The IGT revenues were available and had been used in The Executive Budget to offset Medicaid costs in lieu of having to use state General Funds. He explained if the revenues were not used the IGT funds would go back into the IGT budget reserve. The IGT budget reserve, based on previous committee closing actions, would be approximately $13.2 million at the end of FY2003. If the IGT revenues went back into the reserve the reserve would be increased to approximately $14.8 million. He added the committee had other options that could be considered. They could leave the IGT revenues in the Medicaid budget to offset General Funds by $1.6 million or come up with a combination of reserving some of the IGT money so it could be used for the 2003-2005 biennium and offset the use of the General Fund dollars at that time.
Ms. Giunchigliani said the subcommittee's recommendation to increase the amount of the rate increases for skilled nursing so that they did not lose any more of the home-based nursing homes was a good policy decision but the subcommittee did not realize that moving the effective date from October 1, 2002, date to July 1, 2002, would also help immensely. She made the recommendation to the committee that the effective date of the rate increase in the second year of the biennium be moved to July 1, 2002 instead of October 1, 2002. She said Senator Rawson would be making the same recommendation to the Senate Finance Committee. She had discussed the issue with some of the people in the industry and the problem was not with the October date in the first year of the biennium, just the October date in the second year of the biennium, which would have impacted the industry negatively. She said she would first recommend to amend the budget closing to change the effective date for the rate increases from October 1, 2002 to July 1, 2002, and secondly, because of the IGT reserve was "pretty bare" she suggested the difference be split by reducing the General Fund by half of the dollar amount (approximately $800,000) and put about half of the dollar amount ($800,000) into the IGT reserve to give an extra buffer for the IGT account.
ASSEMBLYMAN DINI MADE A MOTION TO APPROVE THE CLOSING REPORT WITH THE CHANGE IN DATE FOR THE DISCRETIONARY RATE INCREASES FOR THE MEDICAID PROVIDERS, MOVING THE DATE TO JULY 1, 2002, AND TO REDUCE GENERAL FUND BY HALF AND RESERVE HALF OF THE IGT ACCOUNT, AND WITH THE COUNTY MATCH INCLUDED.
ASSEMBLYMAN DE BRAGA SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Perkins, Assemblyman Goldwater, and Assemblywoman Tiffany were not present for the vote.)
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ECONOMIC DEVELOPMENT AND TOURISM - COMMISSION ON TOURISM
BUDGET PAGE ECON Dev & Tour -21
Michael Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated Budget Account 225-1522 had a few technical adjustments. One technical adjustment was to match the transfer of Tourism funds to Motion Pictures and the Department of Museums, Libraries and Arts (MLA). A second technical adjustment was to reflect a reduction in vendor prices for desktop computers.
Mr. Chapman stated that during the committee budget hearing there had been discussion regarding the ending reserve level of approximately $4.8 million that had been projected in the account at the end of the 2001-03 biennium. Subsequent to the budget hearing the Budget Office provided a modification to transfer reserve additional funds to the Department of Museum, Libraries and Arts and to the Division of State Parks, amounting to approximately $2.5 million over the biennium to the MLA and approximately $1.2 million to State Parks. He noted the respective budgets had been closed reflecting the transfers to those accounts.
Mr. Chapman stated, in the area of revenues, the Commission on Tourism had budgeted a 4.5 percent increase for current FY2001. The year-to-date FY2001 Lodging Tax revenues through April 2001 reflected an increase of 10.4 percent. If Lodging Tax revenues remained flat for the remaining two months of the current fiscal year, the overall annual increase would be approximately 8.8 percent. Revising Lodging Tax revenues for FY2001, and 4.5 percent increases in FY2002 and FY2003 would generate additional revenues of approximately $1.5 million, increasing the reserve level from $1.1 million to approximately $2.6 million at the end of the 2001-03 biennium.
Mr. Chapman referred to a handout (Exhibit E) which reflected what had originally been projected in the budget, and the revised projections, showing the 8.8 percent increase in FY2001 and the commission projection of 4.5 percent annual increases for each year of the upcoming biennium.
Mr. Chapman referred to S.B. 448, which was a one-shot appropriation of approximately $1.5 million to State Parks to fund various park improvements and suggested the committee might wish to consider utilizing an additional $1 million of commission reserve funds to reduce the General Fund appropriation, in S.B. 448 from $1.5 million to $500,000. He pointed out that the Senate Finance Committee had closed the budget with that recommendation.
Mr. Chapman stated decision unit M-200 recommended an additional unclassified Development Specialist position. The position would assist an existing Development Specialist position that supported the Rural Grants program. The new position would also support the Nevada RV contest and would develop future motivational campaigns for rural Nevada. He stated M-200 also included $967,781 in the first year of the biennium and $1,471,768 in the second year of the biennium for increased contract services associated with advertising and promoting tourism in Nevada. The intent was to counteract the effects of California Proposition 1A. He explained M-200 also included additional funding of $125,000 in FY2001-02 and $250,000 in FY2002-03 to increase the Rural Matching Grants program to local tourism agencies.
Mr. Chapman said decision unit E-175 recommended the transfer of reserve funds in the amount of $571,375 in the first year of the biennium and $660,896 in the second year of the biennium. Those monies would fund start-up and operating costs for the Nevada State Railroad Museum in Boulder City.
Under decision unit E-250, Mr. Chapman explained the recommendation was for two Developmental Specialist positions. The first position would be to support the agency's Web site, which was currently supported through the agency's advertising contract. It was anticipated this would reallocate approximately $180,000 in the advertising contract to be utilized for additional advertising buys. The second position would compile statistics and monitor, analyze, and report on effects of existing proposed marketing and advertising campaigns. Mr. Chapman said the commission had indicated they spent $65,000 per year in compiling the statistics with their advertising firm, and by bringing it in-house they could reallocate the funds for additional media buys. He said the decision unit also recommended transferring $95,884 in FY2001-02 and $69,053 in FY2002-03 to Nevada Magazine, allowing the magazine to design and prepare in-house publications on behalf of the Commission of Tourism. He reminded the committee that Nevada Magazine's budget had closed with the approval of that recommendation.
Mr. Chapman continued, saying decision unit E-350 recommended the transfer of $40,000 each year of the biennium to the Department of Museums, Libraries and Arts to support additional television and radio advertising. He said that budget had been closed reflecting the transfer.
Under the equipment decision units, Mr. Chapman explained the primary cost for decision unit E-710 was the recommendation for the replacement of ten desktop computers. Decision unit E-720 recommended the purchase of new mobile radio equipment the commission would use during their convention activities. Mr. Chapman explained decision unit E-730 was the Governor's recommendation to transfer funds to State Parks to fund one-time and ongoing maintenance costs. He added there had been some technical adjustments with the transfer of funding for State Parks one-shots that were evenly spread over both years of the biennium as recommended in The Executive Budget. Mr. Chapman noted the Division of State Parks' budget had been closed combining each year's one-time transfer into FY2001-02 for a total of $263,286.
Mr. Chapman said decision unit E-806 reclassified the unclassified Business Manager position to a Deputy, Operations and Finance position resulting in an additional cost of $11,295 in FY2001-02 and $11,333 in FY2002-03. The reason for the reclassification was to address a salary compaction issue, as the position acted as second in charge for the commission and the salary for the position had currently been lower than the majority of salaries within the budget.
Mr. Stevens reminded the committee that they needed to make a determination in regard to Lodging Tax revenues. He said staff had taken the actual figures received through April 2001, and kept a flat projection for the rest of the fiscal year, which would generate about $1.5 million over the three-year period. He said the committee could leave the $1.5 million in the Tourism budget, or do something else with the funds. He said the Senate Finance Committee took $1 million of the revenue and reduced the General Fund appropriation in S.B. 448 from $1.5 million to $500,000 for the State Park Improvement one-shots.
Mr. Dini asked if the Division of Economic Development and Division of Tourism joint project had "gotten off the ground." Chairman Arberry said it was too late to do something like that at the current time.
ASSEMBLYWOMAN GIUNCHIGLIANI MADE A MOTION TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF AND WITH THE USE OF $1 MILLION OF LODGING TAX REVENUE TO BE USED FOR A PARK IMPROVEMENT ONE-SHOT APPROPRIATION.
ASSEMBLYMAN MARVEL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Perkins and Assemblyman Goldwater were not present for the vote.)
BUDGET CLOSED.
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SPECIAL PURPOSE AGENCIES – PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BUDGET PAGE PERS-1
Mr. Stevens said Budget Account 101-4821 had a few closing issues. Decision unit E-806 requested additional funds for normal step increases for the Operations Officer. He explained the Fiscal Analysis Division had received information from the Public Employees' Retirement System (PERS) in February 2001, that indicated the Retirement Board had adopted a new salary schedule to take into account the Governor's recommended cost-of-living raises for state employees. He said it was the PERS intent to follow the cost-of-living increases for the upcoming biennium.
Mr. Stevens said a total of eight positions were requested for the upcoming biennium. Two Retirement Technicians and two Retirement Examiners were requested in the first year of the biennium in decision unit M-200. Under decision unit E-275 the agency requested an Assistant Investment Officer and one Information Systems Specialist for the Carson City office and two Retirement Examiners for the Las Vegas office, all for the second year of the biennium.
Mr. Stevens said the PERS, in decision unit E-226, had also requested an additional $88,550 to modify its data processing system to accommodate benefit enhancements recommended by the Retirement Board, as included in S.B. 349, which was the PERS bill to enhance the benefits in the retirement system. He noted the same decision unit requested an additional $60,000 in FY2001-02 for computer system changes for the Judicial Retirement System and staff would need to adjust that amount if the bill did not pass the session.
Ms. Stevens concluded, saying decision unit E-710 was adjusted to reflect a savings of $24,550, due to personal computer hardware prices.
ASSEMBLYMAN DINI MADE A MOTION TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
Mr. Parks disclosed he was a recipient of benefits from the PERS.
THE MOTION CARRIED UNANIMOUSLY.
(Assemblyman Perkins and Assemblyman Goldwater were not present for the vote.)
BUDGET CLOSED.
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Being no further business, Chairman Arberry adjourned the meeting at 3:20 p.m.
RESPECTFULLY SUBMITTED:
Kathryn Fosnaugh
Committee Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE: