MINUTES OF THE meeting

of the

ASSEMBLY committee on Ways and Means

and senate committee on finance

joint subcommittee on capital improvements

 

Seventy-First Session

February 28, 2001

 

 

The Assembly Committee on Ways and Meansand Senate Finance Joint Subcommittee on Capital Improvements was called to order at 8:10 a.m., on Wednesday, February 28, 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.

 

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Mr.                     Morse Arberry Jr., Chairman

Mr. Joseph E. Dini

Ms.                     Chris Giunchigliani

Mr.                     John Marvel

Mr.                     Richard D. Perkins

 

SENATE COMMITTEE MEMBERS PRESENT

 

            Senator William J. Raggio, Chairman

            Senator Raymond D. Rawson

            Senator Bob Coffin

            Senator Bernice Mathews

 

COMMITTEE MEMBERS ABSENT:

 

Mr. Lynn Hettrick (Excused)

 

STAFF MEMBERS PRESENT:

 

Rick Combs, Program Analyst

Steve Abba, Principal Deputy Fiscal Analyst (Assembly)

Gary Ghiggeri, Fiscal Analyst (Senate)

Kathryn Fosnaugh, Committee Secretary

 

 

ADMINISTRATION – BUILDINGS AND GROUNDS – BUDGET PAGE ADMIN-66

 

Chairman Arberry requested testimony for Budget Account 710-1349, Buildings and Grounds. 

 

Mike Meizel, Chief, Buildings and Grounds Division, began his testimony stating that Buildings and Grounds was responsible for the maintenance and housekeeping for most of the state's office buildings.  They also leased office space for state agencies.  They leased approximately 1.4 million square feet of office space throughout the state.  The state currently owned approximately     1 million square feet of office space. 

 

Mr. Meizel highlighted items from the budget.  The first item he discussed was rent costs.  The rent rate for the current biennium would be going up 25 cents per square foot over the past rent rate.  One cause for the increase would be utility rate increases, plus maintenance costs for planned new building purchases.  That accounted for approximately 3 cents of the increase.  Another cause for the increase was 1.5 cents associated with salary increases recommended by the Governor.  Mr. Meizel said there would be some vacancies due to renovations in various buildings, i.e., a large building at Stewart, and the Blasdel Building in Carson City, as well as the Sawyer Building in Las Vegas.  The vacancies would most likely cost about 5 cents per square foot for the upcoming biennium.  The cost probably would not continue over the next biennium, however, because as the building program accelerated, there would be vacancies. 

 

Chairman Arberry said that there appeared to be a decrease in square footage, but an increase in rent.  Mr. Meizel explained that the decrease in square footage caused the rent to increase because when buildings were being renovated, they could not be used, and therefore, rents could not be collected.  He also explained that the agency was proposing the purchase of both north and south Employers Insurance Company of Nevada's (EICON) buildings, which would add square footage.  Mr. Meizel said that when all was settled, at the end of the biennium, and everyone had been housed, the next three or four years should show an increase of square footage. 

 

Mr. Marvel asked where people would be located while their offices were being renovated.  He asked if Buildings and Grounds had to rent other office space.  Mr. Meizel answered in some cases, but not all.  He gave as an example the Capitol building.  He explained that if the EICON building was purchased, they were planning on moving the State Controller's working offices from the Capitol building to the EICON building.  He said that they would have to renovate both spaces, with some renovation in the EICON building, but most of the renovation would be to the Capitol Annex.  He added that the Capitol Annex would stay vacant for several months.  Mr. Marvel asked if they had to rent space in the private sector.  Mr. Meizel answered that in some cases they would, but not all of the space.  Mr. Marvel asked if that rent was built into the Building and Grounds' budget and Mr. Meizel said yes. 

 

Mr. Marvel asked if relocation plans had already been made and Mr. Meizel answered yes.  Mr. Meizel explained that in Las Vegas, if the EICON building was purchased, the Division of Employment, Training and Rehabilitation (DETR) would take up half of the available space.  Mr. Marvel asked if an appraisal had been done of the EICON buildings.  Mr. Meizel said the Division of State Lands was in the process of doing an appraisal and it should be completed within a few weeks, as the Request for Proposals (RFP) had been posted for the appraisals the prior week.  Mr. Meizel said that the purchase of the building could not be done without the appraisal.

 

Chairman Arberry asked if the purchase of the EICON buildings would involve General Fund money.  Mr. Meizel said indirectly, and explained that Buildings and Grounds charged for rent and services to all agencies, so some of the money that came in was General Fund money, some of it was federal funds, depending on whatever the source of funds was for the agency paying the fees.  Chairman Arberry asked if the money from the DETR was General Fund money.  Mr. Meizel said he believed the DETR was funded with federal funds, specifically from the United States Department of Labor, but he was not certain.  Chairman Arberry asked him to find out and Mr. Meizel agreed. 

 

Chairman Arberry asked if all of this would be "tied together" before the end of session.  Mr. Meizel replied that in regard to the EICON buildings, the occupancy was already "tied together."  The plan had been submitted to the committee within the last week, (Exhibit C).  He said it all depended on whether or not Buildings and Grounds purchased the buildings.  He said if the deal went through, the agency would be able to give the committee the information needed. 

 

Chairman Arberry asked if the plan mentioned and submitted was the flowchart submitted to the committee, (Exhibit C), and Mr. Meizel said yes.  Mr. Meizel said the agency had some additional spreadsheets, and had done maintenance costs, etc., and had been in the process of getting it completed.  Chairman Arberry reiterated that the committee needed complete information as soon as possible, and Mr. Meizel agreed. 

 

Mr. Meizel said that one of the big expenditures for Buildings and Grounds was a category called "Special Projects."  The project was based on an inventory of all the office buildings within a biennium, and came up with a list of needs.  Some things that came up were referred to the State Public Works Board, and some things were done in-house. Mr. Meizel said the list this year was approximately $1 million higher than last biennium.  He said at one time he thought the big projects would eventually go down as they caught up on the maintenance, but that had been unrealistic, because every time they added a building, it was a more complex building and therefore, the repairs were more costly.  The cost of doing business in buildings went up every year.  He gave as an example, the Sawyer Building.  Mr. Meizel said the agency was asking $660,000 for carpeting the offices on the first three floors.  Buildings like the Supreme Court, the Sawyer Building, and the Department of Motor Vehicle's building, as they aged, cost more to maintain.  The alternative, not maintaining the buildings, would be more costly.

 

Chairman Arberry asked, in regard to the Sawyer Building, if the work that needed to be done was a result of the design and construction of the building.  Mr. Meizel answered that the building was six years old.  He explained that the issue of the clean air problems had almost been resolved and currently there had not been many problems with the building.  One item in the recommended Capital Improvement Program (CIP) for the Sawyer Building was raising the stacks above the parapet walls.  That recommendation had been made a few years ago.  During the next biennium almost all of the cleanup should be completed.  Mr. Meizel said that the agency did not go back to the contractors and architect for repairs.  He then stated that at first they had gone after them, with little success, but the problems had now been cleaned up.  He said that the Sawyer Building was one of the better buildings in the state and was closely monitored due to the problems that existed initially. 

 

Chairman Arberry asked if there had been any consideration of downsizing or changing the doors to the entrance of the Sawyer Building by possibly changing them to electronic doors. Mr. Meizel explained that Buildings and Grounds had spent some money on the doors, because they were very heavy.  He said they had a difficult time with the doors because the doors were hard on the hinges due to their weight.  Mr. Meizel said they had some collected some information on changing the doors, but they had not delved into the issue deeply yet.  He did feel that this was a future issue.

 

Chairman Arberry asked for an explanation of decision unit E-720.  Mr. Meizel said that E-720 was a request for new equipment, and they had recommended the purchase of four "Wet Vacs" and a press fit system for southern Nevada.  The press fit system was for bending hard conduit pipe.  Previously the agency was required to hire a contractor because the agency did not have such a system.  It would save the state money if the agency owned its own system.  Chairman Arberry asked for a summary, to the committee, of how often the press would be used and the amount it had previously cost for the contractors.  Mr. Meizel said the agency had contracted eight or nine times in the last four years.  He agreed that the contracting was a "one-at-a-time" cost, but the equipment was a "forever cost."  He explained that the agency contracted for most services.  He said that bending hard conduit pipe should not require a contract when a press could take care of the job.  The contract amounts far exceeded the cost for the press.  He said he would give an accounting of the costs to the committee.

 

Chairman Arberry asked why the agency needed a new forklift and Mr. Meizel explained that the old forklift was about 40 years old and had been purchased used. 

 

Chairman Arberry asked for information about decision unit E-730.  Mr. Meizel said E-730 was in regard to the new buildings that would be completed during the 2001-03 biennium.  The Attorney General's building would be coming on in July 1, 2002.  Mr. Meizel said the Highway Patrol building was not coming on in the current biennium.  Chairman Arberry asked a representative from the State Public Works Board to come to the table for questions in regard to the Highway Patrol building. 

 

Senator Raggio asked about E-730 in regard to the operating expenses of the three buildings to come on-line.  He said the committee needed a breakdown of the money and an explanation of why they would need the amount requested if all three buildings were not going to come on-line. 

 

Mr. Meizel said the agency had recently completed a recap of the costs, with the cost of the Highway Patrol building being removed because it was not coming on-line.  The cost for the Attorney General's building was different because the date had changed for that building to come on-line.  The costs for the EICON buildings had been listed on a spreadsheet.  He said he believed that the spreadsheet had been sent to the committee the previous day.  Chairman Arberry said the spreadsheet had not been very helpful, and Mr. Meizel said he understood that, but the EICON issue continued to be in the planning stage, and although they had accounted for the costs, the timetables had interfered with things.  Mr. Meizel said that some things were being revised, for example, occupancy dates changed due to renovations and construction, which made it difficult to provide the very best dates they could.  He said he realized that the committee had received the spreadsheet only yesterday, but the agency had wanted them to get it as soon as possible. 

 

Mr. Marvel asked whether the purchase of the EICON building would enable some of the agencies that were in higher rent areas to relocate into the building.  Mr. Meizel said the DETR would be moving out of a leased building into the EICON building.  He said that the DETR would build a new building in five to six years, when the DETR moved out of the EICON building it would provide room for other agencies to move in.  Mr. Meizel explained that some agencies had been under a lease, and Buildings and Grounds would not break leases.  When the leases expired, then agencies could be moved.  Mr. Marvel asked if Buildings and Grounds had projected a net savings for possible moves over the next few years.  Mr. Meizel said that he would provide a projection for the committee.  He said the DETR would take about half of the space available in the EICON building, but when the DETR moved out, it would leave space for other agencies to move in, and even if the DETR did not move out, there would still be some available space for other agencies to move in. 

 

Chairman Arberry asked to hear about the Highway Patrol building.  He wanted to know why a site for the building had not been designated.  He indicated during the last session the State Public Works Board had stated that the building was necessary and the legislature had approved funds for the purpose of purchasing land.  Daniel O'Brien, Manager, the State Public Works Board, introduced himself.  He said that Nevada Department of Transportation (NDOT) was currently working on a transfer of land.  It was in the hands of attorneys presently, but should be wrapped up soon.  Mr. O'Brien said before the board could begin the project and receive any further money, the department had been required to have the land.  Chairman Arberry said that his concern was what back-up plan had been arranged if the purchase of the land fell through.  Mr. O'Brien said he did not have information regarding a back-up plan but that he would get back to the committee on that issue.   He said he would get the information to the committee by March 8, 2001. 

 

Mr. Marvel asked if the Highway Patrol building would be completed by the end of the current biennium.  Mr. Meizel answered that the building would not be completed by the end of the current biennium, and the costs for the building had been removed from the current budget request.  Chairman Arberry asked if the NDOT would be involved in the project to construct the Highway Patrol building and Mr. O'Brien said no. 

 

Senator Raggio said the committee had requested the State Public Works Board provide a breakdown of the Capital Improvement Program projects, identifying what portion was being recommended to be funded with General Funds and what would be funded through the issuance of General Obligation Bonds.  He said the response should have been provided to the committee the previous day.  Senator Raggio said the answer the committee had received, from the deputy manager, was that the response was being prepared together with the Department of Administration.  Senator Raggio expressed concern because the committee had not yet received the breakdown.  He said that during his entire length of service on the Senate Finance Committee he had never had a budget request provided without the delineation of the source of funding.  He wanted to know what it meant when the report was requested, and instead of a report, the committee received a comment saying that it was "being prepared."  Senator Raggio said that the subcommittee needed to understand how the State Public Works Board was going to fund the projects that were being recommended in The Executive Budget.  He asked Mr. O'Brien what was causing the delay in providing the information. 

 

Mr. O'Brien indicated he and the Director of the Department of Administration were discussing the process for providing a response.  He said that at the current time they had approximately $18 million in cash and the rest of the money would be provided through the issuance of bonds.  He said that they had been working on how they would do the breakdown.  The recommendation they had come up with was to go ahead and fund some of the maintenance projects with the $18 million in the General Fund and to fund the rest of the projects through the issuance of bonds.  Mr. O'Brien said they would only issue the bonds as the proceeds were needed. 

 

Senator Raggio responded that due to the limited available General Funds last session, the State Public Works Board had been authorized to issue bonds for maintenance projects.  He said that was not a good practice.  Senator Raggio said he was concerned and that he wanted to know, as soon as possible, how the agency was recommending to fund the projects.  He said that it was his understanding that the agency was using bond proceeds to fund furnishings and said he did not want to see the bond proceeds used in that manner.  He said he wanted the board's recommendation by the end of the week.  Mr. O'Brien said it would be provided by the end of the week.  Senator Raggio asked Perry Comeaux, Director, Department of Administration, if he agreed to have the recommendation completed by the end of the week and Mr. Comeaux agreed. 

 

Senator Raggio said the project described as "Basement Cement, 4 Inches" for the Special Children's Clinic in Reno appeared to be a duplication of CIP 01-M18.  Mr. Meizel explained that there were two parts of the project and agreed the cement part was a duplication.  Senator Raggio said that the State Public Works Board estimate had been $47,695, and the Buildings and Grounds estimate had been $17,289.  Mr. Meizel said that the Special Children's Clinic was also scheduled for an addition, which would include a 3,000 square foot renovation in the existing building.  He said it had been planned to carpet the building, but one-fourth of the money they had budgeted for carpeting would not be needed because it would be included in the CIP renovation project. 

 

Senator Raggio discussed decision unit E-850.  He referred to a one-shot appropriation of $220,000 for moving from the Sawyer Building and expanding office space in other agencies.  He said $84,000 was to be used to remodel office space.  Senator Raggio asked if the money recommended for the remodeling was a duplication of the money for carpet replacement in the Sawyer Building.  Mr. Meizel said no.  Buildings and Grounds had consulted with the State Public Works Board regarding this issue.  Mr. Meizel explained that the State Public Works Board's remodeling costs had been mostly for walls and electrical type of things.  Buildings and Grounds would complete the carpeting. 

 

Senator Raggio asked what would happen to the furnishings that had been used by an agency when that agency relocated into the Sawyer Building.  Mr. Meizel explained that furnishings within a building stayed in that building.  Furnishings that an agency brought from another source would be transferred, but the modular furniture that had been bought for a building stayed in that particular building.  When an agency moved out, the furniture stayed for future occupants. 

 

Senator Raggio said that it appeared that the moving expenses included in the budget were fully funded by the General Fund.  He asked if the moving expenses could be allocated so that some of the expenses would come from other sources.  Mr. Meizel said this had not been something the agency had discussed, but was definitely something they would look into. 

 

Mr. Marvel said he had noticed that no expenditures had been requested for moving into the Nevada National Guard Armory.  He asked when the military would vacate that building.  Mr. Meizel answered February 1, 2002.  Mr. Meizel said the agency had not made any plans for anyone to move into the building during the current biennium.  Buildings and Grounds had previously thought they would use the building for transitional space when plans were being made to build a new state building, but they were not going to be building a new building, so the office space would not be needed.  Mr. Meizel said there had not been a current need for office space and it was a possibility that they would be selling the Armory.  He said it was a good location and might be more valuable for the state to sell the building than to keep it. 

 

Senator Raggio asked if rent for the Armory was built into the budget and Mr. Meizel answered rent had not been included in the budget and there were minimal expenses built in, just enough to keep the power and the heat on in the building. 

 

Senator Raggio asked if Buildings and Grounds was the agency that  negotiated state leases.  Mr. Meizel said yes.  Senator Raggio said he would like a report on the problem involving the Viewcrest property lease in Reno, which involved the DETR.  He wanted to know if that problem had been resolved.  Senator Raggio explained this was an example of a lease where the landlord, at the request of the state, had spent approximately $600,000 for improvements on the property, and then the state terminated the lease.  Senator Raggio said that although the lease had a provision indicating that if state money was not appropriated, the state could get out of the lease, he felt this would be opening the state up for problems.  Mr. Meizel said he had met two times with the owner and the agency was trying to find a Reno agency to utilize the space.  Senator Raggio said he felt that the state was being subjected to a lot of liability.  Mr. Meizel said he would get Senator Raggio a report regarding the issue. 

 

 

ADMINISTRATION, CLEAR CREEK YOUTH CENTER

BUDGET PAGE ADMIN-81

 

Chairman Arberry asked to hear testimony in regard to Budget Account 101-1353.

 

Mr. Meizel said the Clear Creek Youth Center was southwest of Carson City, sitting in the Sierra Mountains.  It was originally used as a Job Corp center, which was funded by the federal government.  In 1970 Nevada entered into a lease for the youth center.  In 1988 the property had been transferred to the state of Nevada.  The site had been operated as a youth camp since 1988.  Different youth groups had used it, for example, the Girl Scouts of America and Girl's State.  Several schools used it for various functions.  Mr. Meizel said Rite of Passage also had a lease to use part of the site for office space.  The committee, in the last session, had been given some direction to work with the Division of State Parks and to formulate a plan for the future of the Clear Creek Youth Center.  Mr. Meizel said they had worked with the Division of State Parks over the last biennium and had also started a business plan with the Commission on Tourism.  He said the business plan, unfortunately, was only in draft form.  Mr. Meizel said that the State Parks Division had been concerned about taking over the center.  The State Parks Division did not want another park that was unfunded and for which a usage plan had not been developed.  Mr. Meizel wanted to transfer the center to the Division of State Parks, thinking it would be better utilized in that agency instead of the Department of Administration.  Mr. Meizel said the Department of Administration had not gone through the business plan in detail, but had not seen any expenditures of substance over the $900,000 already requested. The current requests for funding were for renovation of the site.   He said the agency had received a General Fund subsidy for the facility every fiscal year.  Mr. Meizel said the business plan did not indicate that significant additional expenditures would be required from the state.  The plan indicated that within six years the Clear Creek Youth Center would be self-funded, if the plan was followed through.  Mr. Meizel said he could not give the committee a recommendation as to whether or not the center would be transferred to the Division of State Parks at that time, but in the next few weeks he would provide a detailed plan in regard to the plan for the facility.   

 

Chairman Arberry asked for a copy of the study.  Mr. Meizel said he would give the committee a copy as soon as it was finished, and it should be completed anytime.  The Commission of Tourism was contracting for the plan and the plan just needed some final revisions. 

 

Mr. Marvel asked how Rite of Passage was using the Clear Creek Youth Center.  Mr. Meizel answered that it was being used primarily as office space and for classes.  Rite of Passage had renovated one building a few years ago.  They brought students and instructors to the site, taught classes, and were only there during the day.  In answer to Mr. Marvel's question, Mr. Meizel said that the students were bused to the site.  Mr. Marvel said that previously a lot of the legislators had received mail from the residents in the area of the Clear Creek Youth Center, opposed to the use of the center by Rite of Passage.  Mr. Meizel agreed that the property owners had been opposed to Rite of Passage using the area.  He said he did not believe there was much opposition to the use of the site for a youth group or a learning center through the Division of State Parks.  Mr. Meizel explained that if the center had been under the Division of State Parks, Rite of Passage would not have been able to use the facilities.   

 

Chairman Arberry asked who should be accountable for not having the study for the future of the center completed.  He reminded Mr. Meizel a Letter of Intent had been submitted almost two years ago directing the division to complete the study.

 

Mr. Meizel said that although there had been a delay, the division had immediately started working on the study and had continued to work on it over the last biennium.  The division started working with the Division of State Parks near the end of the last biennium. In August of 2000 it was determined that a business study should be done.  While working with the Division of State Parks, some questions had been raised by both agencies.  Mr. Meizel said both agencies felt the only way to answer the questions was to have a business plan.  He said that neither the Division of State Parks nor the Department of Administration had the funds to do a business plan; therefore, they went to the Division of Tourism because that department could tie the plan into a tourism plan.  In answer to Chairman Arberry's question, Mr. Meizel said that the blame for not having the study completed could go to the Department of Administration, but a recommendation would be given to the committee well before the session was over.  Mr. Arberry asked for a copy of the draft and Mr. Meizel agreed to provide one.  Mr. Arberry asked if the issues regarding the Clear Creek Youth Center would require a change in statute and Mr. Meizel said no, he did not think so. 

 

In response to an invitation from Mr. Marvel and Chairman Arberry to speak to the committee, Wayne R. Perock, Administrator, Department of Conservation and Natural Resources, Division of State Parks, said his agency's position, on the draft study of the Clear Creek Youth Center, was that the study was optimistic about the center's ability to be generating and being self-sufficient in the next six years.  He said he helped the consultant with polling other state park systems in the United States.  Mr. Perock said he could not find one that was self-sufficient.  They were subsidized by General Funds or other revenues at around 40 to 60 percent.  He therefore questioned some of the projections in the study.  Mr. Perock added there might be some statutory change involved.  The legislative intent for the Division of State Parks was contained in Nevada Revised Statutes (NRS) 407.013, which stated, in part, "The Division shall acquire, protect, develop, and interpret a well-balanced system of areas of outstanding scenic, recreational, scientific and historical importance for the inspiration, use and enjoyment of the people of the State . . . " Mr. Perock said he had not found learning centers or conference centers listed within the statute.  He said the committee might need to do something to open the intent of the statute a bit more.  Mr. Perock said another concern with the draft plan was in regard to a possible reduction of state park staff, and a plan to instead use the Nevada Conservation Corp., consisting mainly of youth groups, to provide some of the staffing.  Currently there were two state staff members at Clear Creek Youth Center, and the plan had been to increase the staff to four.  Mr. Perock said he thought the four staff members would still not be enough, because he thought a state employee should be the business manager, rather than a youth conservation corps participant performing that function.  Mr. Perock said he was also concerned about the major investment that would need to be made by the state.  He indicated that $2.6 million was needed to improve the site to make it safe and up to code, and to improve operations so that the center would be a good environmental learning center for children to learn about Nevada.  He said this required a big commitment on the part of schools, as the main usage would come from them.  He said he did not see a commitment on the part of the Department of Education, or the school districts, that they would send their students to the center for a week at a time.               

 

Mr. Marvel said there might be a good long-range plan, but he recognized that the Division of State Parks had a backlog in trying to maintain the parks already in their care.  He said he was not sure if it was a good time to add more to the Division of State Parks' jurisdiction.  Mr. Marvel said that he thought Nevada already had an abundance of state parks that needed to be renovated and that the money could be better used for that purpose.  Mr. Perock agreed with Mr. Marvel and said that the Clear Creek Youth Center would stand alone, and not draw, or affect the other parks in the system.  Mr. Perock said during the next biennium this should be looked at and then those involved should come back to the committee, with the Governor's recommendations, and "take on" the center at that time.  With improvements, people would be able to use the center, but currently, he felt that the problem was just being shuffled from one agency to another.  Chairman Arberry thanked Mr. Perock for sharing his opinion. 

 

Senator Raggio asked if CIP 01-M5, which included $922,525 for general improvement and deferred maintenance at the Clear Creek Facility was in addition to the $126,000 for the statewide roofing project and the $50,000 for the removal of underground storage tanks.  Mr. Meizel said yes.  Senator Raggio asked what the result of the improvements would be.  Mr. Meizel answered the assessment of the facilities was done as a part of the State Public Works Board's facility assessment program.  They went over the entire Clear Creek Youth Center facility and came up with a great amount of detail on all the existing structures, then the cost had been broken down into three phases.  The $922,000 was for the first phase, which would include the installation of fire alarms and flooring, bringing the center into compliance with the American with Disabilities Act (ADA), and correcting life-safety difficulties.  Mr. Meizel explained the business plan draft indicated that the state should commit $2.6 million for renovation.  He said the Department of Administration felt the first phase put the center into good shape and that although the center was not in a "tumbling down state" it did need some work.  Mr. Meizel said he felt that the state should do something to improve the condition of the center. 

 

Senator Raggio asked if all of the projects recommend by the Governor to make repairs at the facility were approved, what additional things would need to be done to enable the State Parks Division to take over the facility without having the burden of deferred maintenance.  Mr. Meizel said the business plan called for another $660,000 that would allow for campsites, gazebos, etc., which was critical for the success of the center.  The balance of the funds would be used for things like painting, and the work should be completed over the next couple of biennia.  Mr. Meizel said that this would help the Division of State Parks.  Senator Raggio asked if Mr. Meizel had discussed with Pam Wilcox, Administrator, State Lands Division, any possible funding available from that agency.  Mr. Meizel said that his understanding was that there would be some $200,000 to $250,000 available that could be used. 

 

 

ADMINISTRATION, MARLETTE LAKE – BUDGET PAGE ADMIN 86

 

 

Chairman Arberry requested information regarding Marlette Lake, Budget Account 712-1366.

 

Mr. Meizel said the Marlette Lake Water System was above Carson City in the Sierras, and served Carson City and Virginia City with water.  For the last three years the Department of Administration had a contract with Carson City, which led the department out of involvement with the state's water treatment plant. He indicated that if the state would have continued to treat water, the cost would have caused a financial drain on the state.  The state had control of the upstream water system water rights, and they wholesaled water to Carson City and Storey County.  The water system had been self-sufficient, but no capital improvements were contemplated over the next 20 years.  The 1999 CIP  included a study on tapping Marlette Lake at Hobart.  Mr. Meizel said he thought the state should continue to monitor the effects of tapping water from the lake.  Mr. Meizel said that the money requested was a flat-line budget, except for the amount of water sold.  He explained that the new agreement with Carson City had resulted in the agency selling more raw water and no treated water. 

 

Chairman Arberry asked if treating the water would cost more than providing raw water.  Mr. Meizel said that they had only treated about 20 percent of the water bought, because the treatment plant was small.  The agreement with Carson City limited the amount of water that could be sold to the state.  The rate that Carson City sold to commercial users was $1.25 per thousand gallons, and the amount did fluctuate some, but water would be sold to the state at only 85 cents per thousand gallons.  Mr. Meizel said he felt it was better for the state not to be in the water treatment business.  Staying in the water treatment business would have cost the state a lot of money with little gain. 

 

Senator Raggio asked who owned the treatment facility and who maintained it.   Mr. Meizel answered the state owned the facility, but did not maintain it.  The facility was currently shut down.  Senator Raggio said it was his understanding that the agreement with Carson City said the state was to maintain the treatment plant facility and Carson City would pay the utilities for the tank and reservoir and would perform maintenance on the leased facilities.  Mr. Meizel said that was correct, but the facility had been shut down.  He said they were trying to find someone to buy the parts.  Senator Raggio asked at what rate the state sold raw water to Carson City.  Mr. Meizel answered 20 cents per thousand gallons of water.  Senator Raggio asked if the state continued to sell raw water to Storey County, and if so, where did Storey County treat the water.  Mr. Meizel indicated that the state still sold raw water to Storey County and that the water was sold at 25 cents per thousand gallons.  He explained that Storey County had its own treatment facility.  Senator Raggio asked if there were any other towns where the state sold raw water.  Mr. Meizel said the agency only sold raw water, and just to Carson City and Storey County.  Senator Raggio said that raw water sales, as recommended by the Governor in The Executive Budget, were $125,026 for FY2001-2002 and FY2002-2003.  He said the amount sold in FY1999-2001 was $99,132.  He asked if they were anticipating more sales.  Mr. Meizel said the amount was based on the most they would be able to sell to Carson City, per the agreement.  He said they may not get to the figure mentioned, but the budget would allow for it. Mr. Meizel reiterated that the budget was basically a flat-line budget, and the only thing that would vary would be the amount of water sold. 

 

Senator Raggio asked if the state continued to maintain the lines at Hobart.  Mr. Meizel said that the state still had to maintain the lines from Marlette to Hobart to Highway 395 at Storey County.  Storey County had the line from Highway 395 on.  He said the state maintained the line from the diversion tanks, located above Lakeview, down into Carson City and to the old treatment plant.  Senator Raggio asked if the budget was for one employee and Mr. Meizel said yes. 

 

Mr. Dini said Storey County was currently holding discussions with Mr. Meizel regarding the accuracy of the state meters.  He said Storey County officials thought the county might have been overcharged for water.  They had the highest water fees around the area because of their treatment plant, which cost a great deal of money.  In the summer, some homes in Storey County paid from $200 to $300 a month for water for small yards.  Mr. Meizel had been working with the county to see how they would be able to cut costs, and to review the accuracy of the meters. 

 

Senator Coffin asked what the state policy was in regard to electrical consumption in state buildings, and also asked if a policy regarding consumption had been distributed to state agencies.  Mr. Meizel answered no, not recently.  He said the agency had been working on the issue, but they had not broadcast a policy.  Senator Coffin said that a policy had been put out for the Legislature Building to limit lighting and electrical consumption.  Senator Coffin said that the reason he asked the question was because a letter had been received, by some legislators, from a constituent who had recently passed by some state buildings and wondered why lights were on in the buildings in the middle of the night.  Senator Coffin had explained to the constituent that sometimes housekeeping and security required some lights to remain on. 

 

Mr. Comeaux explained that a meeting had been held in the Governor's Office approximately two weeks prior to the committee hearing.  The administration was beginning to develop a plan to address what the Governor saw as a  "pending energy crisis."  Mr. Comeaux said that part of the plan would involve a renewal of previous energy consumption practices.  He said the letter to agencies had not gone out, but would soon, and would require each agency to present a plan for control of usage within their own agency.  Senator Coffin asked if the plan used in the 1970s could be used.  Mr. Comeaux said that was most likely the starting point for the Nevada State Energy Office, and that the state agencies had "gotten sloppy" since the energy crisis of the 1970s.  Senator Coffin shared he, also, was frustrated over how the lights had been left on, and could understand why constituents were upset when they saw lights on, because it was costing the constituent money. 

 

Mr. Meizel added the administration had entered into an agreement with retrofit companies, and, along with Pat McInnis, Mechanical Engineer, Buildings and Grounds, had been working on energy issues such as changing lighting, heating, ventilating, and air conditioning (HVAC) work, and a large mechanical renovation for the First Interstate Bank building that the Nevada State Museum had acquired.  The benefits to the state were that a lot of energy work had been done, and a savings was incurred.  The state received good energy retrofits, and it had not cost any money, and the state received the benefits. 

 

 

ADMINISTRATION, PUBLIC WORKS ADMINISTRATION – BUDGET PAGE ADMIN-90

 

Chairman Arberry asked for testimony on Budget Account 101-1560.

 

Daniel O'Brien, Manager, State Public Works Board (SPWB), introduced Kathy Dow, Deputy Manger, Administrative Services, State Public Works Board, and Ward Patrick, Deputy Manager, Professional Services, State Public Works Board. 

 

Mr. O'Brien said Budget Account 101-1560 was the board's administration account.  He said there were 12 positions funded in the account.  Mr. O'Brien said decision unit E–900, recommended the transfer of two positions to the Administrative Services Division in the Department of Administration; M-200 was for additional printing costs for the facilities audit reports.  Decision unit E-710 was for replacement of data processing equipment for the administrative section, replacing six personal computers, a laptop computer, printers and additional software.  He explained that decision unit E-720 also included funding for a T-1 line connection.  The current building that the State Public Works Board was located in was not connected to the Department of Information and Technology "backbone" and this decision unit would allow for the connection. 

 

Mr. Dini asked about the transfer of the two accounting positions.  He said in the State Public Works Board audits done by the Legislative Counsel Bureau, in 1995 and 1997, the audits found expenditures that were not proper.  He explained that in one project $50,000 was transferred from a community college project to a statewide roofing project.   There was another problem associated with an advanced planning project, a $5 million high-tech center project that had a budget for furniture and equipment totaling $220,000, over $800,000 in furniture had been purchased and paid for from a community college account.  He asked if Mr. O'Brien felt that they could give up two accounting positions and continue to appropriately account for project expenditures.  Mr. O'Brien said the two positions would not, in actuality, be given up.  They were only being transferred to the Administrative Services Division, where they would continue to provide accounting support to the SPWB.  He said that the two positions, in addition to some positions funded in Budget Account 1562, would be supervised by Tracy Raxter, Chief, Administrative Services Division, Department of Administration.  The intent was to provide better financial controls as a result of the transfer.  Mr. O'Brien said he felt with the consolidation of SPWB's accounting position with the Department of Administration's other accounting staff there would be better accountability and it would eliminate the problems discovered in the audit described by Mr. Dini. 

 

Senator Raggio asked for an evaluation of the Facility Audit Program.  Mr. O'Brien said the program was doing a great job.  He said other state agencies had been appreciative of the reporting that the program had provided.  Mr. O'Brien said that there had been changes made by the past administration, which caused the use of one of the three allotted positions for the program to be transferred out so that instead of three positions, only two positions had been assigned to the program.  That had not been the initial intent for the program, and he had been in the process of transferring the position back.  When the paperwork was completed for the transfer, a job announcement would go out to fill the position, which would be the supervisory position over the other two positions working in the program.  The program had approximately 70 reports that were waiting for completion, but had new inspections that were to be completed over the next two weekends.  The SPWB stopped the new inspections in order to complete the reports on the inspections already completed.  Mr. O'Brien felt that transferring the position out of the Facility Audit Program had caused harm to the program.  He said that he felt the program had been a good program and that other state agencies were appreciative of the reports and had used the reports to identify work that needed to be completed. 

 

Chairman Arberry said that when the program was approved in 1997, the testimony provided to the committee had suggested that once the program was fully operational they would be capable of auditing 300 buildings each year and almost 1,800 state buildings on a 6-year cycle.  He said, instead, the program only audited an average of 90 buildings each year.  His concern was that if this continued at the same pace, it would take 18 years to audit 1,800 buildings.  Mr. O'Brien said that had been his concern as well.  He said some small buildings would not need to be the focus of the program and they were trying to give new direction to the group.  He said they would focus on the buildings that really needed to be audited.  He said that not having the third position had slowed down the process.  He felt that the original goal of 300 buildings a year was not achievable, but also felt that the management decision to remove one position had been a problem as well.  Chairman Arberry asked for a realistic projection of the number of buildings that could be audited each year.  Mr. O'Brien said he would provide the committee with that information, within the next few weeks.  Senator Raggio asked for a specific list of the buildings to be audited during the next biennium.  Mr. O'Brien agreed that they needed to set goals, in order to see how they were doing, and would get the list to the committee.

 

Chairman Arberry asked how the reports were used after an audit had been completed.  Mr. Patrick answered that the original purpose of the Facility Audit Program had been to comply with the statute that required the SPWB to inspect all state buildings.  He said there had been varied uses for the reports.  One use had been to help develop the CIP program.  They had provided information to the Legislative Counsel Bureau staff during the Seventieth Legislative Session and the current session on proposed projects, as well as which projects had been completed.  A second use for the reports had been to develop base-line data for the Department of Prisons to implement a preventative maintenance program.  A third use of the information was to develop a ten-year capital plan, which would possibly equal the contracted value of $1 million worth of professional design services.  The program was providing information for that plan.  The agency had only requested $50,000 to help develop the ten-year plan, and the information produced by the Facility Audit Program was assisting in that process.  And fourth, use of the reports had enabled maintenance staff at various facilities to develop their CIP requests by using information in the reports and to make requests in their operating budgets, in order to perform their own maintenance. 

 

Mr. Marvel asked if there was a depreciation schedule to show what future renovations plans would be projected.  Mr. Patrick said the agency had not considered a depreciation schedule.  He asked Mr. Marvel for clarification of his question.  Mr. Marvel explained that a business would have a reserve for depreciation and the depreciation chart would give an idea of what future replacement costs would be.  Mr. Patrick said a reserve for depreciation would need to be planned for annually.  He said that with the Facility Audit Program, which had targeted the Department of Prisons, and Department of Mental Health buildings, there had been a lot of deferred maintenance.  The projects were listed in priority order based on the time period during which the projects would need to be completed.  Mr. O'Brien said that one of the functions of the ten-year master plan would be to look at a facility's life expectancy, and when major remodeling or demolition would have to be done. 

 

Chairman Arberry asked what would happen if the Facility Audit Program was eliminated.  Mr. O'Brien said the law required the inspection of state buildings, so if the program was eliminated, inspection of buildings would still have to be done.  He added that if the program was eliminated, it would deny state agencies information that they would need for future planning. 

 

Senator Raggio said he was puzzled as to why, when three positions had been authorized for the program, two positions had been used elsewhere.  It was his understanding that to get the positions back into the program would take some work.  He agreed with Mr. Patrick that the program was important if it would help to determine what projects would be put on the list for the CIP, but only 28 percent of the projects on the CIP list went through the Facility Audit Program so he questioned whether or not the program was necessary.  He said if the agency had not been using the three people full time for this function, what use did the program have.  He also questioned if information generated from the program had been beneficial for the architects and engineers when they were awarded projects.  Senator Raggio, for clarification, restated his question, and asked if the program was really working and if Mr. O'Brien had really been committed to the program.  Senator Raggio also commented that he knew that Mr. O'Brien had not been in his current position as manager when the program had been implemented.  Mr. O'Brien said his observation had been that there were two positions assigned to the project.  Senator Raggio explained that the Legislative Committee for the Fundamental Review of the Base Budgets of State Agencies found that one position had performed management and inspection duties for the Lied Library project and the second of the two positions had been assigned to conduct school plan reviews.  He said that was not the original job description for the two positions.  Mr. O'Brien said that was correct.  Senator Raggio asked why it was so difficult to get the positions back to performing their original jobs, and who had been responsible for keeping the positions from their original purpose.  Kathy Dow said the Department of Personnel had told her that new work standards had to be completed, new NP19's had to be done, and then they would have to be approved through the personnel process, in order to get the positions transferred back into another budget account.  She said the agency had not completed the process.  She said part of the reason the process had taken so long was because in the midst of the review, the previous manager was easing himself out, and they had been without a manager for approximately six months.  She explained that Mr. O'Brien had just become manager in November of 2000, and they had recently hired a new Chief of Design, who had other thoughts as to how the duties for the positions should be defined. 

 

Senator Raggio repeated the question, was the program really functioning, and if it had been only functioning on "two cylinders" was it really needed.  Mr. O'Brien said it was a "three-cylinder engine and had been running on two" and he thought the number of inspections would go up when they got the positions back.  He said without the three positions, the program would shut down.  Mr. O'Brien's opinion was that the program would be beneficial, and with the mandate to inspect the state buildings, the program was a great way to get the inspections done.  Mr. O'Brien said that when he had a question about a building, he could ask someone from the program and they could pull up a report with the floor plan of a building and let him know quality of construction, etc.  In answer to Senator Raggio's question, Mr. O'Brien said he felt they should continue the program. 

 

Chairman Arberry said that the committee would not be angry if the program was eliminated.  He said it was a management decision.  Mr. O'Brien said that he planned on staying around and said if they were to keep the program, it would need to produce.  He said he had a staff meeting last week regarding the 70 reports waiting to be completed, and asked his staff how he could come before the committee and say the agency was doing a good job, when the reports were just sitting there.  He said that was something his agency had to focus on.  Chairman Arberry said that was why the committee was questioning the program. 

 

Chairman Arberry redirected Mr. O'Brien to decision units E-250 and E-900 and transfer of the accounting technician position and the accounting specialist position.  He asked if the positions to be transferred would be working specifically on the SPWB projects.  Mr. O'Brien said initially they would, but he said that Tracy Raxter would have to address that issue.  Mr. O'Brien said that there had to be backup for a position, and with the transfer of the positions, there would be people to serve as backup.  Cross training would also be provided so they would be able to work on issues not related to the SPWB as well. 

 

Mr. Marvel asked if transferring the positions out of the SPWB would mean the agency would continue to have to fund the positions, or would there be a change in funding.  Mr. O'Brien said there would be a transfer of funds to the Department of Administration.  Ms. Dow said that the SPWB's cost allocation for those positions would become Tracy Raxter's fee to the SPWB.  Mr. Marvel asked if the SPWB would get a credit.  Ms. Dow said it would be credited, but would be taken out of another of the SPWB general ledger accounts.  She said, basically, the SPWB would still be paying for the positions.  Mr. Marvel said that there should be a credit somewhere if the positions would be doing someone else's work.  Ms. Dow said that she and Tracy Raxter had not gotten to that point in their discussions regarding the positions.  The initial intent was to have the positions continue to work on SPWB matters.  The same people who had been trained to work on the SPWB accounting projects would continue to do so.  Mr. Marvel asked if they would have control over the positions once they were transferred and Ms. Dow answered yes. 

Senator Raggio said he would ask staff to work with Mr. O'Brien because it appeared that some costs in the budget were overstated, for example, the printer replacement.  Mr. O'Brien agreed to work with the staff. 

 

Senator Raggio asked how the qualification of the bidder's program was working.  Mr. O'Brien said that he got involved in this program the first week he started working for the SPWB.  After seeing the program his first response was "why are we wasting our time."  Senator Raggio explained the reason the program was initiated was due to bad experiences with people who had been allowed to bid.  Senator Raggio said the Legislative Building was an example of   such an experience.  Mr. O'Brien said that in the Sixty-Ninth Legislative Session legislation was passed to help with the pre-qualification of contractors.  In the Seventieth Legislative Session, due to new legislation, "the guts were taken out" and you could no longer look at the past performance of a contractor, and if they did not get qualified, all they had to do was to post a 10 percent bond.  That did not help the program, and staff had been very frustrated.  The agency had been working with the Attorney General's office to work on that issue.  He said in the last three months the SPWB had looked at what could be done with the regulations regarding the definition of "best bid," versus "low bid," and what could be done with the whole qualification situation.  Mr. O'Brien said he had already met with a couple of legislators that had bills related to this issue.  Senator Raggio asked if the state would continue to be confined to the lowest bid.  Mr. O'Brien said no, that the pre-qualification would be the way to determine which contractor to use.  Senator Raggio clarified and asked about the "best bid."  Mr. O'Brien said there had been a mixture of "best bid" and "low bid" phrases in the statutes.  He said they were looking at changing all the statutes to be "best bid," and then have a procedure to determine the definition of "best bid."  Senator Raggio asked if other states had gone to the same plan, and Mr. O'Brien said yes.  Senator Raggio said that the change in wording could help with possible lawsuits when an agency would want to reject a low bid for some reason.  Mr. O'Brien said he was committed to the design-build process, the qualification of bidders, and the definition of "best bid," so that the state would have better contractors on the job.  He said the bottom line was that 95 percent of the contractors "out there" were good, reputable contractors, and the state needed to be able to hire the ones that were best for the job. 

 

 

ADMINISTRATION, PUBLIC WORKS INSPECTION – BUDGET PAGE ADMIN-96

 

 Chairman Arberry asked for testimony on Budget Account 1562, Public Works Inspections.

 

Mr. O'Brien said this account had been funded through project management and inspection fees.  The account included building inspectors, project managers, and project coordinators, as well as clerical staff.  He indicated that the account as recommended in The Executive Budget was about $296,000 short in funding.  He explained that in the last minutes of the CIP they had to eliminate approximately $10 million worth of construction projects.  When that occurred, the project management and inspection fees for those projects was also eliminated.  He said that what they proposed would be to go back in and adjust the project management and inspection fees, depending on the amount approved by the legislature.

 

Mr. O'Brien discussed decision unit E-251 and explained that five accounting positions were to be transferred to the Administrative Services Division.  He pointed out decision unit E-225 recommended funding for three excessed Highway Patrol vehicles and explained that the vehicles were needed for the building inspectors.  The cost listed under the decision unit was the cost of operation and maintenance of the vehicles.  The vehicles would be given to the department at no cost.  He said they were also requesting in decision unit E-275 that two half-time positions be upgraded to full-time positions to provide the administrative support the agency needed. 

 

Mr. O'Brien said, that in decision unit E-710 the board had requested replacement of data processing equipment, including computers, a CAD plotter, additional software, etc.  He said decision unit E-720 recommended funding for the Inspection account's portion of the cost for the T-1 line. 

 

Mr. O'Brien said the final item he wanted to mention was decision unit E-276, which recommended the hiring of an additional five classified positions and included the associated operating costs of the positions.  He explained that although 90 to 95 percent of the State Public Works Board projects had been managed with no problems, problems with some high profile projects were caused by not having up-front project management and inspections, including up-front plan checking.  If plan checking was performed at the beginning of a project, the agency would not be fighting an uphill battle later in the project due to major problems that were not found until later.  He explained the request was put in the budget after reviewing the issue with the Governor, and trying to determine how to ensure that the agency did a better job.  The agency was requesting a Chief of Design position in the Las Vegas office as no one was currently located there to manage the agency in southern Nevada.   

 

Chairman Arberry asked why the agency did not send one of the northern Nevada positions to Las Vegas, as there were two deputy managers located in northern Nevada currently.  Mr. O'Brien said that he did not feel a deputy manager was needed in Las Vegas.  A project manager could serve as a supervisor for the inspector positions located in southern Nevada.  He explained that Kathy Dow's position was an administrative position that was responsible for all the fiscal, administrative, and personnel functions, and was needed in the main office, located in Carson City.  He did not feel that moving one of the deputy managers would benefit the agency.  Chairman Arberry disagreed.  He stated that a large percentage of the work was taking place in southern Nevada, and that if the new position was denied it might be required that the agency move one the manager positions to Las Vegas. 

 

Mr. O'Brien said another position requested was for an additional project manager.  This position would be located in Las Vegas.  He explained that at any one time, the agency had approximately $500 million in work going on.  That amount would continue to grow.  Adequate staff would be important to manage future projects.  Another position requested was an additional mechanical engineer.  The mechanical engineer currently on staff had been overloaded with work.  He had put in tremendous amounts of overtime that had to be paid at the end of the year because they could not let him take compensatory time off for three months.  The new position would take care of the additional workload. 

 

Mr. O'Brien said they were requesting a significant amount of computer software and equipment, in order to do project management and project tracking.  He said they did not have a program to keep track of projects and determine whether they were on schedule. 

 

Chairman Arberry asked for an explanation regarding the need for the fire protection engineer.  Mr. O'Brien said this was an important position.  He said his agency was the "building department for the state," and he was the "building official of the state."  He said what was lacking was a good plan check process in the SPWB, so that they could eliminate a lot of problems that occur in project designs.  He gave the Lied Library as an example of a project that would have benefited from such a position.  He explained that there had been a firewall connection detail that did not go through a normal building department process for approval and it caused problems, which in turn caused delays for the project.  He said the state did not have a good plan checking process, and because of the lack of up-front planning, major code issues were not defined.  Not having those issues defined caused problems in completing projects.  He mentioned the Veteran's Home as another example of a project where a Fire Protection engineer would have helped avoid cost overruns and delay.  His proposal was that the SPWB become a "building department," with projects not being bid without a permit and a stamped set of plans.  All changes would need to go through the "building department."  That way, the architect would not be changing things out in the field with no one overseeing the process.  The Fire Protection engineer would provide the expertise in the plan check process and the plan checkers would be supervised by that position.  Mr. O'Brien continued and explained that in the past the SPWB did not have a good record in coordinating with the state fire marshal's office.  A good example of the lack of coordination was with the Department of Health in Clark County, where the air quality permit was not synchronized for the High Desert Prison.  Mr. O'Brien said he had talked to the project managers and the inspectors about adding the position and they recognized that a better plan check process was needed.

 

Chairman Arberry said it was a nice concept, and asked if the fire protection engineer would be performing the dual role as the office manager, as well as oversee the plans examiner, and Mr. O'Brien said no, the position would just be over the plans examiners and the Facility Audit Program group, as well as the building inspectors.  He felt that the Facility Audit Program would be best placed under the fire protection engineer because they would be out doing inspections, and reporting on projects.  Chairman Arberry asked if there would be enough work for the position and Mr. O'Brien said yes. 

 

Mr. O'Brien gave another example of the need for a fire protection engineer, and said the previous day he had an issue regarding the restroom at the Veteran's Home that might prove to be a big problem.  He said that with a good plan check at the beginning of the project, the problem might have been avoided.  He said buildings were checked by the state fire marshal's office, but that office did not focus on an overall building, just life safety issues.  Mr. O'Brien said currently the agency had to rely on the architects and engineers for information, but those people had different levels of expertise and might have been working on a plan for which they did not have a high level of knowledge.  Therefore, someone was needed to check for code compliance, which would be what the plan check process would do. 

 

Chairman Arberry asked if Mr. O'Brien could get back with the committee on the issue regarding the restroom at the Veteran's Home.  He explained his understanding of the issue, which was the design had a plan for two restrooms and now there would only be one, and the exterior of the building was designed to look like something "pleasing to the eye" and now it was looking more like an army barracks.  He was also concerned with the way the windows were set up.  He said that the committee needed to know what was happening, and asked Mr. O'Brien to look into these matters.  Mr. O'Brien agreed and said the issue he was looking into was a bit different, but he had requested the architect to give him information regarding the original design.  He said he would get back to the committee with information regarding their concerns.  He said he thought it would be good to get together some of the people who were involved in the original design to be able to get the record straight as to what the original plans were.

 

Mr. Marvel asked if it was difficult to recruit plan checkers.  Mr. O'Brien said it was difficult, but that the checkers were available, particularly in northern Nevada.  He said they were having a problem getting inspectors in the Las Vegas area because the cities and counties were paying higher wages than the state.  The project managers and plan checkers should not pose as big a problem.  Mr. Marvel asked how many in-house architects the SPWB had.  Mr. Patrick answered three in southern Nevada and three in northern Nevada, as project managers.  Mr. Marvel asked if they were allowed to "moonlight" and Mr. O'Brien said yes.  Mr. Marvel said that should be controlled so that private gain from those positions did not outweigh the benefits to the state of having those positions.  Mr. O'Brien said he had asked the same question and had looked into a bill regarding the issue of moonlighting.  He said that by statute he and the deputy managers could not do any outside projects.  He said the project managers usually did small, residential projects, outside of the job, and they usually were not in conflict with the state.  To prohibit them from going out and doing private jobs would have to be a statewide prohibition because there were engineers and architects in other agencies.  Mr. O'Brien stated that it was important to ensure that they were not doing outside work on state time, or using state equipment and resources.  He said he had a meeting with the staff and advised them that doing so would not be tolerated.  He said one incident occurred where an employee, who thought he was on free time, was doing something on the computer and that was stopped immediately.  Mr. O'Brien said he thought it had to come across to the employees that if caught, they would be in violation of state provisions, and he thought it had been made clear in his agency. 

 

Chairman Arberry asked for a status report regarding the implementation of a revised method for determining the project management and inspection fees charged to each project.  Mr. O'Brien said that there had been a request by the Legislative Committee for the Fundamental Review of the Base Budget of State Agencies to reevaluate how project management and inspection fees were determined.  Mr. O'Brien said not a lot had been done on that issue.  Chairman Arberry asked why.  In response to Chairman Arberry's question, Ms. Dow explained that the same question had been responded to on February 17, 2001, during the original budget subcommittee hearing.  She said there was some detail in that response, but reasons given included personnel issues, hiring from the EICON rehire list, etc., but the SPWB did have to take some responsibility. She said that a position had been filled, in-house, causing a domino effect.  She said that they had just recently been able to have a full accounting staff as of December 26, 2000.  They were aware that the cost allocation needed to be in place and they were hoping to get some assistance from the Administrative Services Division in order to implement a plan. 

 

The meeting was called for a recess at 10:08 a.m. and reconvened at 10:17 a.m.

 

Chairman Arberry continued the discussion regarding management and inspection fees and the cost estimates for the projects.  Mr. O'Brien said the main concern regarding the project management inspection fees was how the fees were determined.  He said the previous night he had been reviewing some numbers on a few projects.  He said the fees for the larger projects had run around 3 percent and the smaller projects had been about 5 percent.  He said the formula to calculate the fees was complex and he was not sure such an extensive formula was necessary.  He said the building code had a table to determine the inspection fees for a project.  He thought maybe there could be an easier way to determine the project management inspection fees using the past history of projects.  He said often the fees were not collected by the agency but used instead to fund cost items that came up during the biennium that were not planned for.  Mr. O'Brien said there would have to be some adjustment in the budget for projects that would come up later in a year, because if more time was spent on a project due to problems, funding would have to be available.  He said it was a guess as to what the actual fee would be, and the past fee formula had sometimes provided extra funds, but the funds were then pushed into construction when there was a need.  He said that led to a contingency and a contingency was a guess.  He said every project had to have a contingency or else they would need to scramble for funds.  Mr. O'Brien explained that project managers were not paid on commission and their goal was to complete a project, as well as to satisfy the agency.  The moving of money from one area to another was done to resolve financial concerns where   needed.  Mr. O'Brien said he did not know an answer to the problem yet, and would like to consider what other states were doing.  He said the agency needed more time to gather data to determine what the cost accounting would be and what would be the effects. 

 

Chairman Arberry asked if the adjustment of the management inspection fees, to make up for the fee revenue shortfall, would increase the total amount of the Capital Improvement Program (CIP).  Mr. O'Brien said no, the proposal would stay within the total CIP. 

 

Chairman Arberry asked for information regarding decision unit E-225.  Mr. O'Brien explained this was a request for three older Highway Patrol vehicles that would be made available to the inspectors.  Some of the agency's inspectors were using their own vehicles to do inspections, and they had to be paid mileage.  The operation and maintenance for the vehicles had been included in the request.  The downside to the use of the cars was they were larger and would use more gas. 

 

Chairman Arberry directed the testimony to decision unit E-275 and asked about the training recommended.  Mr. O'Brien said the request was for two half-time positions to be upgraded to full-time, and Chairman Arberry asked him to provide to the staff statistics on the workload and why they needed the two positions to be upgraded to full-time.  Mr. O'Brien said they would provide the information requested.  Chairman Arberry said that the budget listed training for FY2001-2002 at a total amount of $19,002.  Mr. O'Brien said the training was for roofing and asbestos inspectors.  Chairman Arberry asked how many times the inspectors would be going to the class.  Ms. Dow said she did not have the breakdown but the costs were for asbestos and roofing training and additional training for inspectors regarding the overview of the uniform fire code, the International Conference of Building Officials (ICBO) training, and the American Concrete Institute (ACI) certification, etc.  The asbestos and roofing classes were classes that were not attended in FY2000, so they were listed as a maintenance unit, but should have been listed as an enhancement. 

 

Chairman Arberry asked how the budget was coordinated.  He said that increased travel and training costs under decision unit E-275 showed a total of $47,000 for FY2002 and another $47,000 in FY2003.  He said the committee was very confused.  Mr. O'Brien said they would get back to the committee on that issue. 

 

Chairman Arberry asked for more information regarding the Legacy Solutions Computer System recommended in decision unit E-276.  Mr. Patrick said the State Public Works Board (SPWB) handled the CIP process, requests from other state agencies, and the ten-year capital planning process on a manual basis.  Legacy had an automated system program that was being used by the state of Montana for long-range building plans as well as their current CIP planning.  The system they used was a module that could be used with the Nevada Executive Budget System (NEBS).  The proposed module would enhance the NEBS.  The Budget Office had not included the module in the original request for NEBS due to funding limits.  The SPWB had samples of the state of Montana's budgets and were given a view-only access to review their system.  Mr. Patrick said it appeared that they had a good system and the SPWB would like to add the same module to the SPWB's existing financial system. 

 

Chairman Arberry asked for whom were the ten laptop computers requested.  Mr. O'Brien answered that the building inspectors would receive the laptops so that they could input the information they gathered while at the job site.  Chairman Arberry asked about the $2,000 each year of the biennium to purchase two digital cameras.  Mr. O'Brien said the cameras were for the inspectors, so they could keep records and transfer the information into the system.  They would be able to document problems like mold growth, etc., so that someone in another area who needed to see what was going on could be sent the information by e-mail. 

 

Chairman Arberry asked how the requested Primavera Software would reduce delays in projects.  Mr. Patrick explained that Primavera was a scheduling program and was used by most contractors in Nevada, as well as the rest of the country.  The SPWB realized a few years ago that a weakness in the department was the lack of attention to all the details of the schedule.  He said that previously, the SPWB had gone before the Interim Finance Committee to receive permission to use funds from projects to hire consultants for delay claim analysis.  The first question the consultants would ask was "where was the magnetic media that supports the construction schedule and what do you do to compare monthly submittals by the contractors to verify that any changes to the schedule have been made, are appropriate?"  Mr. Patrick said that with electronic media, details could be changed behind the scenes that would show that the owner was responsible for some of the process.  By requiring the contractors to submit electronic media for schedules the SPWB would be kept current on the details.  The software would help the SPWB plan projects and monitor the projects during construction. 

 

Mr. O'Brien gave as an example the National Guard Command Center.  The contractor was way behind on the project and they were submitting, to the SPWB, schedules that indicated they would meet their schedule.  The SPWB questioned how they were going to make up the months that had already been lost.  In order to get a handle on an issue like this, the SPWB would need to look at the schedule.  He agreed with Mr. Patrick that every project construction analyst that had been brought in wanted that kind of information, so that they could compare what the actual time of doing each function of a project was and whether or not a contractor was "fudging" something in the schedule.  Ultimately scheduling problems led to a claim for additional time.  The department had to document that a claim was not against the state, rather it was because the contractor did not have people on the job, did not get the work done, etc.  The software would help coordinate this information. 

 

Chairman Arberry asked if reducing the delays of a project would result in a cost savings and Mr. O'Brien answered yes, a significant savings.  He said the delay claims on the Lied Library project could not be made unless the agency was able to prove the project had been delayed and by whom.  The Veteran's Home was another example where they had a request for an additional 120-130 days for delays.  The SPWB had to analyze that kind of request.  If a contractor's project came in late, and the SPWB lost liquidated damages because it could not be proven that they should not have been given additional time to complete a project, then the SPWB would lose revenue, because the project came in late.  If the state gave time away, then the state would lose money.  He said if the SPWB had a better program, better people, and better training, then it would not be losing any requests, because the SPWB had the data to argue with the contractor and their attorneys. 

 

Chairman Arberry asked for clarification regarding the $200,000 recommended for the ten-year capital planning program and how the data base system would assist in preparing that program.  Mr. O'Brien commented that the Chairman was adding up all the software, such as Novell, the Primavera, PowerPoint, and Legacy and said yes, that was the cost of the software that would be needed to do a better job. 

 

Chairman Arberry asked how the software would assist the SPWB in preparing the ten-year Capital Improvement Plan.  Mr. O'Brien said the purpose of the software was to allow the agency to input data through the Internet.  He said they would be able to set up a structure that was formatted to produce required information.  He said that in the current CIP process they had asked for more information than what had ever been requested in previous CIP programs, to assist with the development of a criterion to evaluate priorities.  The SPWB received mixed responses to the requested information.  If there was a standard way of requiring input on projects it would enable the SPWB to receive adequate information to evaluate priorities. 

 

Chairman Arberry questioned decision unit E-710 and asked why the CAD plotter system needed to be replaced.  Mr. O'Brien answered that currently the department had a black and white older CAD plotter and the request was for a color unit, to replace the black and white plotter.  Chairman Arberry asked what would be done with the old unit and Mr. O'Brien answered that he was not sure, but it would possibly be traded in.  He said another option would be to send it to the Las Vegas office, as they did not have a plotter there. 

 

Senator Coffin asked if the plotter would allow the department to get programs from contractors and architects, so that they could plug them into the machine and read them, and he said he assumed that the contractors were putting their programs in color.  He also asked if they would be able to differentiate different systems on the same page.  Mr. O'Brien said yes, and that currently with the black and white plotter, they had to do it with line type or line width, but with a color plotter they could differentiate with color.  Senator Coffin asked if most of the contractors and architects were using color and Mr. O'Brien answered yes.

 

Having no further questions, the meeting was adjourned at 10:43 a.m.

 

 

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Kathryn Fosnaugh

Committee Secretary

 

 

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE: