MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-First Session

March 12, 2001

 

 

The Committee on Ways and Meanswas called to order at 8:03 a.m., on Monday, March 12, 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.                     David Goldwater

Mr.                     Lynn Hettrick

Ms.                     Sheila Leslie

Mr.                     John Marvel

Mr.                     David Parks

Mr.                     Richard D. Perkins

Ms.                     Sandra Tiffany

 

COMMITTEE MEMBERS ABSENT:

 

None

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Andrea Carothers, Committee Secretary

 

Assembly Bill 40:  Makes appropriation to Storey County for allocation to             Community Chest, Inc., for county youth and community resources             center. (BDR S-821)

 

The Chair recognized Assemblyman Joe Dini, District 38.  Mr. Dini introduced Shaun Griffin, Executive Director, Community Chest.  Mr. Dini stated that A.B. 40 allocated $200,000 to Community Chest to develop a county youth and community resource center in Storey County.  Virginia City was a fairly isolated location, and the Virginia City residents did not currently have the resources for community activities.  Mr. Dini stated that the $200,000 was “seed money” to assist Community Chest in applying for grants. 

 

Mr. Griffin stated that he was joined by five students from Virginia City High School, which had participated for over five years in the planning process of the center; one foreign exchange student from Japan; Sandy Wallen, representative for Cooperative Extension; and Art Hannafin, architect.  He noted that Becky Dermier, representative for Girls Scouts and Boy Scouts, was unable to attend the meeting. 

 

Mr. Griffin stated that the center had been conceptualized due to a countywide needs assessment.  Volunteers had canvassed all houses in the district twice over a period of five years.  He noted that the primary issue derived from the needs assessment was a community center.  Community Chest, community members, 25 non-profit organizations, and the Storey County Commissioners had worked to plan the center.  Mr. Griffin explained that two years previous the commissioners had granted a 30-year lease for land, formerly used as tennis courts, adjacent to the public pool, county park and baseball field, and had appropriated $22,000 for the permit process.  He explained that the plans had been created, and that ten non-profit organizations, including the Community Health Nurse, Storey County Preschool, and Cooperative Extension, would be housed in the center. 

 

Mr. Griffin concluded his testimony by saying that the community center was for the children and, ”without something direct and meaningful and important in the way of a person who cares about them and a place to congregate our young people are going to slip through the cracks.”  He noted that there was currently no one place for the youth.  When Community Chest originated ten years ago, it was with the purpose of building a healthy community for all citizens.  At the start Community Chest was a fledgling operation, and currently it was a large, rural, non-profit organization with a million dollar budget and 15 employees.  Mr. Griffin stated that the Community Chest ran comprehensive youth and community programs before, during, and after school, but the reason he was presenting today was to create a lasting center.  The intent was to leave a center to the community, to ensure a center in perpetuity for the youth.  He added that all members of the community desired the center, that from seniors to the preschoolers, everyone needed a place to congregate.  Without a facility like the center, the Community Health Nurse would continue to work in a 5-foot by 8-foot room, because there was no other facility for her to work in.  The preschool that had begun ten years ago had to be closed in August because it was not possible to make the rent payments.  Mr. Griffin stated that everything possible was being done to maximize resources and offer a comprehensive facility with staff for the youth.  He stated that he had approached private foundations for funding, and would continue to do so.  The Storey County Commissioners unequivocally supported the center, but the county itself had essentially zero revenue and that was why Mr. Griffin was requesting this “seed money.”  He expressed the hope that the initial construction fund would cover the cost of enclosing the existing pool, and then Community Chest would raise the rest of the approximately $2 million needed.  This spring the National Civilian Community Core would be constructing a skate park on the facility to enable the youth to have a place to go in the interim.  Mr. Griffin said that he believed that,

 

You could only string kids along for a certain period of time, and then they give up.  They don’t believe that you are really going to do something.  They think you’re disingenuous.  I don’t want them to walk away, I don’t want these five children, who started with us as children and are now young adults, to leave and think we’re not going to do something.  That’s why we are building that skate park now on that very same property.

 

Mr. Griffin opined that in the large scheme $200,000 was not a great deal of money, but would make a major difference in Storey County.

Ms. Chris Giunchigliani asked what the $200,000 would fund.  Mr. Griffin stated that the $200,000 would fund the proposed enclosure of the pool, so that construction could begin on the remainder of the facility.  He explained the Storey County Commissioners required that the pool remain open during the construction.  The pool was currently open only during the three summer months because it was not heated.  If the pool was enclosed then construction could begin on the remainder of the facility.  Mr. Griffin noted that the enclosure of the pool was one example of how the facility would benefit all members of the community.  Currently the senior van had to leave early in the morning to drive to Carson City to allow the seniors to exercise during the winter months, and the enclosing of the pool would allow the seniors to exercise in Virginia City. 

 

Ms. Giunchigliani inquired about the proposed location of the center.  Mr. Griffin explained that the center would be located at the park in Virginia City.  He reiterated that the commissioners had leased the property for 30 years for a dollar a year. 

 

Ms. Giunchigliani asked if funding had been attempted via a bond issue.  Mr. Griffin explained that it would be fairly impossible to have a bond passed. 

 

Ms. Giunchigliani confirmed that the commissioners had contributed $22,000 for the planning and permit portion of the project, and had leased the land at minimal cost.  She also reiterated that Community Chest was a non-profit organization. 

 

Ms. Shelia Leslie asked if the existing programs would be moved from the current house location to the new facility.  Mr. Griffin answered that the Youth and Community Programs would be moved to the new facility.  Currently Community Chest was forced to run programs out of the schools, which was difficult due to the time constraints.  Ms. Leslie inquired as to whether the house would be sold.  Mr. Griffin stated that the house would be used for additional existing programs.  Ms. Leslie asked if the new facility would be owned by Community Chest or the county.  Mr. Griffin stated that the facility would be owned by a separate non-profit agency that would be started at a future date, to enable it to run as an individual entity.  Ms. Leslie asked where the Family Resource Center would be housed.  Mr. Griffin noted that the Family Resource Center would remain at Community Chest unless it continued to grow and needed to be moved to the other facility. 

 

Nevada Griffin, student, spoke on his involvement in the planning of the community center.  He stated he had been involved with the planning process for the past three years, and had seen how complicated the process was and how the center would benefit the community.  Nevada Griffin stated that the planning committee had met on a weekly basis with Art Hannafin, the volunteer architect, to design the facility based on the needs of the community.  A number of surveys of the community had been completed to discover what resources were needed in the community and what should be housed in the facility.  Nevada Griffin noted that Mr. Hannafin had been of great assistance to the planning committee.  He opined that the community center would be an asset to the community, and stated that the money would assist in starting the construction of the center.  Nevada Griffin explained that while he would not benefit from the center as a youth member of the community, he desired to have the community center for future generations to enjoy. 

 

 

Mrs. Vonne Chowning asked how many people the facility was estimated to serve, and how the ongoing needed revenue would be obtained.  Nevada Griffin stated that the number of students that would use the facility would be dependent on the year-to-year population changes of Virginia City.  He stated that the center would be utilized by a wide age range of children, from preschool children to high school youths.  Nevada Griffin opined that 500 children would be utilizing the center.  He then stated that the idea of income had been discussed.  There were many ideas on this matter, including a snack bar, a movie night, and running a small gym for a monthly fee.  Nevada Griffin noted that there would be continuing discussions regarding funding.

 

Mr. Griffin stated that the non-profit organizations that would be housed in the center would be paying a minimal monthly rental fee.  The center would share resources with the non-profit organizations, which would enable them to pay the rental fee.  He stated that the center had approached several foundations for an operating fund.

 

Heather Parsons, student, spoke in favor of the bill, and stated that the center would be an asset for the community. 

 

Art Hannafin, architect, testified in support of the bill.  He expressed that it had been a delight to work with the students.

 

Sandy Wallen, Youth Program Assistant II, Cooperative Extension, University of Nevada, spoke in favor of the bill.  She noted that the Storey County 4‑H Program currently had no meeting place, and the proposed center would fulfill that need.

 

Molly Everts, student, testified for A.B. 40, and stated that the center would benefit future generations. 

 

Alix Cirac, student, voiced her support for the bill.  She reiterated that the community center would be an asset for the future youth community members of Virginia City, as well as the adult members of the community. 

 

Andy Turman, student, stated that he was lifeguard at the community pool, and expressed his support for the bill.

 

Shama Kakuya, exchange student, noted his support for A.B. 40.

 

Chairman Arberry closed the meeting on A.B. 40.

                       

 Assembly Bill 121:  Makes appropriation to Bureau of Alcohol and Drug             Abuse of Department of Human Resources for support of community-            based substance abuse prevention programs. (BDR S-921)

 

The Chair recognized Assemblywoman Shelia Leslie, District 27, who explained that there were people in the audience that were in support of the bill.  She disclosed that she was a volunteer member of the board of directors of Join Together Northern Nevada, a non-profit substance abuse coalition in Reno.  It was not anticipated that monies in the bill would be given to this coalition because Join Together had been successful in its fund-raising.  Ms. Leslie indicated that she was presenting the bill on behalf of The Nevada Substance Abuse Prevention Council, and prevention programs throughout Nevada and the youth and families they served.  She stated that there would need to be one amendment to the bill in Section 1.  The amendment would be to change that the funds that were appropriated to the Bureau of Alcohol and Drug Abuse (BADA) be appropriated to the Health Division.  The BADA was not an entity able to accept funding. 

 

Ms. Leslie stated that A.B. 121 asked for an additional $450,000 per year from the General Fund to be used for community-based substance abuse prevention programs.  The funds would be divided into three areas; $250,000 a year for direct services provided by community prevention programs; $150,000 a year to support new and existing community coalitions; and $50,000 a year for evaluation of programs. 

 

Ms. Leslie read from “Prevention Makes Cents” (Exhibit C); 13.1 percent of Nevada’s population over the age of 18 had been diagnosed with substance abuse dependency.  By the 12^th grade 62 percent of students were drinking alcohol on a regular basis, 44 percent reported binge drinking, 28 percent used marijuana, and 17 percent combined alcohol and drugs with sexual activity.  Ms. Leslie noted that she was the mother of a teenager and opined that if parents talked to their teenagers about drugs and alcohol, it would be agreed that the survey accurately reflected Nevada.  She noted that $42,000 a year was received from the General Fund to support substance abuse prevention, while approximately $2 million was received from federal funding.   Ms. Leslie stated that Nevada ranked among the lowest states for money given to substance abuse prevention.  It was estimated that substance abuse cost Nevada over $1 billion annually for fatal traffic crashes, other deaths, criminal justice costs, fetal alcohol syndrome, and other abuse-related effects.  Ms. Leslie stated that addiction was the root cause for many problems, including youth suicide for which Nevada had the highest rate in the nation, accidental deaths, teen pregnancy, dropouts, and crime.  She explained that until the root cause was addressed those problems would not improve. 

 

Ms. Leslie introduced Belinda Thompson, Chair, Nevada Substance Abuse Prevention Council and Director, Positive Choices for Academic Success.  Ms. Thompson explained that Positive Choices for Academic Success provided substance abuse and prevention services to approximately 400 students per day within the Las Vegas valley.  She stated that the Nevada Substance Abuse Prevention Council had been formulated as the result of prevention providers networking with one and another over the previous years.  The providers had identified common items of concern and successes in regard to effective prevention programming.  It was determined that through a formal organization of prevention providers throughout the state of Nevada, concerns could be effectively addressed and a networking resource could be established to implement effective prevention practices, community and coalition building, program resources, and partnership sharing.  Ms. Thompson stated that the council had an active membership of 30 prevention programs and community-based coalitions.  The goal of the council was to inform and educate the public of the role that effective prevention programming played in the reduction and offset of first time use of substances by youth and young adults.  Prevention services in Nevada reached a variety of residents with the primary focus on the youth. She explained that the average age of first time substance use was age eight, and for this reason it was imperative that the council continued to work with its partners to identify, address, and implement the best and most promising preventive practices.  Those practices would be identified by the Center for Substance Abuse Prevention, and would be replicated throughout the state, with modifications for specific target populations, ethnicities, and geographic areas.  Ms. Thompson stated that the Nevada Substance Abuse Prevention Council was asking for the committee’s support for A.B. 121.

 

The Chair recognized Michelle Watkins, Director, Central Lyon Youth Connections.  Ms. Watkins explained that the Central Lyon Youth Connections was a substance abuse prevention agency that provided a variety of services to youth and families living in Central Lyon County.  She said that according to the International Certification and Reciprocity Consortium, a national certifying board for substance abuse prevention, prevention was defined as a pro-active process of helping individuals, families, and communities to develop the resources needed to maintain healthy lifestyles.  Prevention focused upon the development of innovative and carefully planned intervention that was implemented before the onset of physical, psychological, emotional or social problems.  Prevention was broad based in the sense that it was intended to alleviate a wide range of at-risk behaviors, including, but not limited to, alcohol, tobacco and other drug abuse, crime and delinquency, vandalism, mental health problems, family conflict, parenting problems, stress and burnout, child abuse, learning problems, school failure, teen pregnancy, depression, and suicide.  Current research showed that the more risk factors a child or youth experienced the more likely she or he would experience substance abuse and related problems in adolescence or young adulthood. 

 

The prevention program that had been developed in the Lyon County community and other communities across Nevada used a variety of prevention strategies to reduce and prevent alcohol, tobacco and other use among youth.  Those strategies included programs that offered information dissemination, education, alternative drug free activities, problem identification and referral, community-based processes, and environmental approaches.  Ms. Watkins stated that there were community-based mentoring programs, life skill programs, after-school activities, tutoring, volunteer programs, and other successful prevention programs throughout the entire state.  Prevention was based on the concept that in order to prevent a problem from happening the risk factors needed to be identified, and ways to build in protection or assets needed to be found.  She stated that this could be a challenge due to the limited resources in the rural communities and the rapid growth experienced in Nevada.  Prevention agencies in Nevada had learned to become resourceful and creative, stretching dollars by building partnerships and coalitions.  Ms. Watkins stated that prevention agencies were successful fund-raisers, and found monies from local, state, and federal entities.  To meet the need of the growing population of Nevada, she stated that additional state dollars were needed to sustain and expand prevention efforts statewide.  The prevention providers in Nevada believed that preventing substance abuse would prevent additional problems, such as teen pregnancy, school failure, and school violence.  The key to a healthy community and healthy youth was prevention.  Ms. Watkins stated that the Central Lyon Youth Connections was requesting the committee’s support for A.B. 121.

 

Chairman Arberry recognized Kevin Quint, Nevada Substance Abuse Prevention Council.  Mr. Quint reiterated that the bill funded prevention programming, coalitions, and program evaluations.  He described the role of coalitions in the bill.  Currently there were eight community-based coalitions in the state of Nevada, with three more in the planning stages.  The coalitions were comprised of community members and groups for the purpose of developing community specific needs and priorities for service delivery development.  In the previous year Nevada substance abuse coalitions had developed needs assessments in Washoe, Clark, Churchill, Douglas, Lyon, and Mineral Counties, as well as in Carson City.  The needs assessments had been used to identify specific issues and gaps in service delivery.  The information had been used to write grants.  Mr. Quint stated that coalitions were a sound investment because they paid for themselves and more.  They ensured that resources and money were spent in a targeted and efficient manner.  He stated that additional funding was needed.  Community coalitions were an essential tool in planning, fund-raising, service delivery, development, and program accountability.  He introduced Linda Lang, Community Council on Youth in Carson City (CCOY).

 

Ms. Lang stated that she had worked in the prevention field both professionally and as a volunteer for the past 18 years.  She stated that CCOY was established ten years ago, with the intent of identifying needed services for youth and fulfilling those needs.  For years a dedicated group of volunteers had attempted to conduct a local needs assessment, coordinate youth agency programming, and secure needed funds to keep the coalition running.  Few results were achieved in the start-up years of the CCOY.  It was not until a minimal amount of funding was given to the coalition in 1995 that the true effects of what a coalition could do became evident.  Ms. Lang explained that a strong executive board, including professionals from law enforcement, the school district, juvenile probation, the board of supervisors, parents, the private sector, the community college, and former Senator Bryan’s office, worked with an advisory board made up of direct service providers to advocate for additional funding for youth prevention services.  Collaborative programming and collaborative grant writing became a reality.  She stated that the Carson City government recognized the time and money it was saving, which allowed for additional funds to be allocated.  The coalition continued to act as a checks and balances system, eliminating duplicated services, assessing needs, creating needed systems, and applying for additional resources.  There was one paid contractual employee to accomplish the goals of the coalition.  Ms. Lang stated that through coalitions a minimal amount of funding could produce maximum results.  With an investment of approximately $32,000 this year, Carson City agencies would receive $315,400 in additional resources.  She stated that Douglas County had seen similar results this year.  These additional resources were not available to communities that did not have established coalitions.  Ms. Lang explained that A.B. 121 was inclusive in that it addressed funding for both prevention programs and coalitions, and recognized that it was necessary to fund direct programs, and that it was essential to develop new coalitions across the state to sustain the programs.  Through the establishment of new coalitions, there would be an increase in funds brought into Nevada in the next three to five years.  Ms. Lang stated that coalitions came at a minimal cost, and produced a great amount. 

 

Mr. Quint stated that the bill allocated $50,000 per year for the evaluation of prevention programs.  He stated that there were two purposes of the evaluation; to assess what worked and what was not working, and to provide for program improvement.  In prevention many ideas appeared to be good, but in reality did not work.  Mr. Quint noted that the idea was to continually evaluate rather than discover ten years later that money was poorly spent.  He stated the federally-based Center for Substance Abuse Prevention had a process for reviewing evaluation data from prevention programs and classifying programs that had been concluded to be effective.  Those effective programs were called “best practices” and there was another category called “promising practices.”  Mr. Quint explained that it was important to recognize that a program that had good results in Las Vegas may not work as well in Lovelock.  Evaluation was essential for all programs.  He stated that this was the reason that A.B. 121 contained an evaluation component. 

 

Ms. Giunchigliani asked if the evaluations would be of the coalitions or of the prevention programs.  Mr. Quint stated that the evaluations would be of both the coalitions and the programs.  Ms. Giunchigliani questioned whether the evaluation portion of the bill would cover all prevention dollars in the state.  Mr. Quint answered that the evaluation would cover what was currently being spent.  He added that there were efforts by the BADA to evaluate existing programs, and the evaluation portion of the bill would supplement that evaluation.  Ms. Giunchigliani stated that prevention professionals knew what programs worked and it was time to stop duplicating efforts and refocus the dollars.  Mr. Quint agreed and stated that that was what the evaluations and coalitions would be aiming at. 

 

The Chair recognized Gerald Channing, Chairman, Join Together Northern Nevada (JTNN).  Mr. Channing stated that JTNN was created as a community coalition representing leaders of the business community, treatment providers, social service agencies, and the juvenile justice system.  This coalition was working to reduce the impact of substance abuse in the community by improving access to needed prevention, intervention, and treatment services.  JTNN had several key goals:

 

• To build and enhance resource capacity to support a continuum of substance abuse awareness, prevention, intervention and treatment services.
• To use early identification, intervention strategies to increase success.
• To develop collaborative partnerships between providers, and the public and private sectors.
• To hold the coalition and providers accountable for the funding received and for the efficient, effective delivery of services.

 

Mr. Channing stated that JTNN currently had active partnerships with the Crisis Call Center in Reno, the Federal Office of Juvenile Justice and Delinquency Prevention, the Federal Substance Abuse and Mental Health Services Administration, the BADA, and the Washoe County Criminal Justice Department.  He stated that as a nation the strategy to reduce substance abuse was to reduce the supply of illegal drugs using interdiction and punishment.  Mr. Channing asked who among the committee believed that substance abuse had been reduced, and if a member did then they needed to talk to their children about the drugs they saw every day.  He stated that there was a growing expenditure for prisons, and for inmates housed due to their substance abuse or crimes related to substance abuse. 

 

Mr. Channing opined that substance abusers conjured an image of the homeless and carried a stigma that they deserved what they were receiving.  He explained that the truth was that many people with substance abuse problems were children, friends, and coworkers.  It was not uncommon for substance abusers to fool those around them for years.  He said that his daughter had a substance abuse problem, and when he spoke about it with business associates a number of them admitted that they had children with substance abuse problems.  Those business associates did not know where to go for help, and believed that children with substance abuse problems did not happen to good parents.  Mr. Channing emphatically declared that every person in the room knew someone with a substance abuse problem.  He stated that people needed to rid themselves of the picture of a homeless substance abuser, and replace it with a picture of the child next door.  The definition of insanity, according to Mr. Channing, was to continue with the same programs and to expect different results.  He stated that if interdiction and prisons were not working, something else needed to be attempted.  Nationally there was a growing recognition that the answer might lie in reducing the demand for drugs. 

 

Mr. Channing stated that he supported A.B. 121 because it contained three elements he considered critical for success.  The first was that long-term success for reducing the demand for drugs required a change in community norms that tolerated or enabled substance abuse.  Those norms could be changed through community coalitions, with one example being the changes that had occurred due to the efforts of Mothers Against Drunk Driving (MADD).  Mr. Channing reiterated that prevention programming was the second element of the bill.  Either prevention was paid for now, or there would be higher costs in the future.  Mr. Channing stated that due to the lack of prevention programs in Nevada, his daughter did not have access to the training that would have allowed her to build coping skills to avoid substance abuse problems.  He noted that currently his daughter was a clean, productive member of society, but that result came at a great personal cost and at a great financial cost to the state.  Mr. Channing stated that his daughter received the treatment that she needed, but that it would have been considerably less expensive to provide prevention.  Mr. Channing stated that as a businessman he believed that the evaluation portion of the bill was essential.  JTNN did not advocate throwing money at the problem and hoping for results.  He stated that there needed to be providers who were accountable for providing long-term results, and information needed to be collected that allowed programs to be built on ideas that were effective.  Mr. Channing stated that the February 12, 2001, issue of Newsweek rated Nevada among the top states for rates of alcohol and illicit drug use, and that Nevada had the highest rate of tobacco use in the nation.  The article stated:

 

Spending priorities right now look pound foolish. The Center on Addiction and Substance Abuse released a study last week showing that states spend more than 13 percent of their total budgets just ‘shoveling up’ the wreckage of addiction—as much as they appropriate for higher education and 100 times what they spend on prevention and treatment. Another study by Rand Corp. shows that every dollar spent on treatment saves seven dollars in services. That’s because even if addicts eventually relapse, they are clean during their time in treatment, saving millions in acute health-care costs and law enforcement.

 

The BADA was currently funding prevention services at a rate of $2 million per year, to which the state contributed $42,000.  Mr. Channing stated that in a recent report the Nevada Commission on Substance Abuse, Education, Prevention, Enforcement, and Treatment estimated the annual cost of substance abuse in Nevada was over $1 billon per year.  In Nevada 500 times what was spent on prevention was spent to “shovel up the wreckage of addiction.”  He suggested that priorities needed to be reviewed and reiterated his support for A.B. 121.

 

The Chair recognized Rosemary Flores, Executive Director, Bringing Everybody’s Strengths Together (BEST) Coalition for a Safe and Drug Free Nevada, who was testifying from Las Vegas.  Ms. Flores introduced Angela Pernatiozzi, Executive Director, Classroom on Wheels (COW), and Larry Ashley, Vice President, BEST Coalition; teacher, Department of Counseling, University of Nevada, Las Vegas; representative, WestCare, Nevada.

 

Ms. Pernatiozzi stated that there was a solution for the drug problem in the COW program.  Society worried about duplication of effort, enforcement, and space for locking up offenders, but Ms. Pernatiozzi shared a story from “the mouths of babes.”  COW operated a free bilingual preschool with Beginning Alcohol & Addictions Basic Education (BABES), which was a BADA accredited drug prevention program.  BABES was a beginning addiction and basic education system that used puppets to teach children about good decision making, coping skills, keeping their bodies safe, and how to get needed help.  A five-year-old graduate of the program was in his father’s apartment for a weekend visit over the summer.  The father was smoking marijuana, and made the five-year-old and the little brother smoke marijuana.  When the boys returned to their mother’s house the five-year-old told his mother that he remembered the BABE story about how drugs hurt his body and he wanted to receive help.  With his mother’s assistance the five-year-old reported his father to the police.  Ms. Pernatiozzi stated that she had a man tell her that COW should have gotten Children Services involved, and she explained that this boy was a graduate of the program and was no longer enrolled.  The child broke his own cycle of abuse because he was taught in preschool how to make good decisions, that drugs were bad for his body, and it was heroic to receive help.  He repeated his BABES’ lesson almost verbatim, and the five-year-old took action.  Ms. Pernatiozzi stated that the best way to avoid duplication of effort was to break the cycle of abuse.  The supply would always remain, but the demand needed to be stopped.  Ms. Pernatiozzi opined that prevention worked.

 

Mr. Ashley stated that he had been working in the field of addictions for almost 30 years and one item that was obvious to him was that prevention was less expensive than treatment.  When it was discovered that a person needed treatment it was much more expensive to society and the individual.  He explained that he was currently spending time training addiction counselors, as the field was upgraded, to be comparable to other Human Service fields.  Mr. Ashley stated that when he was in contact with national and international colleagues, he spent a majority of the time defending Nevada.  His colleagues were unable to understand why Nevada, which had one of the highest rates in the addiction field, only spent $42,000 a year of state funds, and relied on the federal government for prevention services.  Mr. Ashley opined that Nevada needed to “stand on its own two legs,” and show that abuse was a significant issue because if it was not addressed as prevention it would need to be addressed as treatment or in the criminal justice system.  Mr. Ashley voiced his support for A.B. 121.

 

Ms. Flores testified that the BEST coalition was comprised of over 90 members involved in prevention, intervention, treatment, and law enforcement.  The coalition was in support of A.B. 121.  The intent of the BEST coalition was not to duplicate efforts, but to maximize efforts.  Ms. Flores stated that the coalition was in the process of bringing more individuals of the Clark County community to participate in the coalition.  She reiterated that the BEST coalition urged the committee to support the bill.

 

The Chair recognized Emily Leach, student.  Ms. Leach stated that she had been involved in a number of prevention programs, including Stand Tall Don’t Fall, which was a program that taught how teenagers could help their peers, and Solid Ground, a community youth volunteer program.  Ms. Leach stated that when she was 13 she began attending a summer program that gave her an alternative to drugs and alcohol.  She said that when she was 11 years old she began experimenting with drugs and alcohol and there were negative effects, including the fact that her grades dropped and there was conflict at home.  Ms. Leach felt like she had no place to go, and turned to drugs and alcohol.  She indicated that the summer program gave her a place to go that had people to talk to and to watch over her.  The summer program assisted Ms. Leach in her troubles with drugs and alcohol.  She stated that drugs and alcohol were something that was constantly around, and while she was able to say no others were unable to do so.  Ms. Leach expressed her support for the bill.

 

Ms. Giunchigliani asked which program Ms. Leach attributed her success to.  Ms. Leach stated that the best program was Stand Tall Don’t Fall because it helped teach her how she was able to prevent substance abuse in her community.  Ms. Giunchigliani inquired as to whether there were any prevention programs offered through the high school.  Ms. Leach answered in the negative, and Ms. Giunchigliani stated that was one of the problems.  While there were a few programs in the schools, the money had been wasted on quick fix programs.  She noted that the Drug Abuse Resistance Education program (DARE) had been found not to have a long-term effect, and a program that worked needed to be found. 

 

Mr. Dini asked if Ms. Leach belonged to the Central Lyon Youth Connections, and if that was effective.  Ms. Leach stated that she did belong to the Central Lyon Youth Connections, and it had extensively affected her life.  Mr. Dini expressed his support for that program. 

 

Christi Whiting, student, stated that she worked as a temporary babysitter for the Ron Wood Family Resource Center in Carson City.  She echoed the previous testimony, and voiced her support for the bill. 

 

The Chair recognized Maria Castellanos, student.  She was a member of Fighting Alcohol Through Education (FATE), and had been to the Teen Girl Program.  She reiterated the previous testimony and expressed her support for A.B. 121.

 

Vil Paskevicus, Administrator, Economic Opportunity Board of Clark County (EOB) Treatment Center and President, Nevada Association of State Alcohol and Drug Abuse Programs (NASADAP), stated that NASADAP supported the bill.  Mr. Paskevicus read the mission statement for NASADAP.  He reiterated the comments of previous testifiers.

 

John Alexander, retired physician assistant, stated that he had been trained in substance abuse prevention, and had worked with prevention and treatment.  He restated the previous testimony.  Mr. Alexander indicated his support for the bill. 

 

The Chair recognized Leonard Pugh, Director, Washoe County Department Juvenile Services.  He noted that from previous studies it had become apparent that a number of the youth that had been in the system had substance abuse problems.  Mr. Pugh stated that without strong prevention efforts the juvenile justice system would not be able to handle the number of children that would impact the system.  He voiced his support for the bill. 

 

Chairman Arberry declared the hearing on A.B. 121 closed.

 

 Assembly Bill 138:  Clarifies formula for determining amount payable by             State of Nevada toward cost of insurance for certain retired employees.             (BDR 23-1065)

 

Chairman Arberry recognized Mark Stevens, Fiscal Analyst.  Mr. Stevens stated that A.B. 138 had been in the Assembly Committee on Government Affairs and was rereferred to the Assembly Committee on Ways and Means.  The bill would amend NRS 287.046, which provided that the state of Nevada contribute to the payment of group insurance premiums for retirees with a minimum of five-years’ service.  Mr. Stevens explained that currently with five-years’ experience, 25 percent of the base rate was contributed by the state on behalf of the retiree each month.  This increased to a maximum of 137.5 percent of the base rate with 20-years’ experience.  The base rate was set by the legislature each session.  He noted that in the current fiscal year the base rate was $208.92, and the maximum benefit was $287.27 per month. 

 

Mr. Stevens stated that it was discovered during the interim that when an employee retired and the Public Employees’ Retirement System (PERS) calculated the amount of benefits to be received, the PERS was including all public experience.  This meant that if a person had 10 years of experience at the county level, and then transferred to the state and had 10 years of experience with the state, 20 years was counted toward the group insurance subsidy paid by the state when the person retired.  Fiscal staff had made members of the money committees aware of this issue, and Chairman Arberry requested a Bill Draft Request (BDR), which had become A.B. 138.  This bill would restrict the state’s group insurance subsidy for retired employees to years of service in state government only.  Mr. Stevens stated the logic was that only state service should be counted in a state-paid subsidy.  He explained that by submitting the bill, discussion could be had on whether the state should base its subsidy of group insurance premiums for retirees on total public service or state service.  Mr. Stevens explained that A.B. 138 stated that credit for service must not include service with any public employer other than the state of Nevada.  The bill would not affect any retiree that was currently receiving the benefit, but for any employee retiring from state service after July 1, 2001, only service earned as a state employee would be used in the calculation paid by the state of Nevada for retirees.

 

Mr. Dini asked how the bill would affect an employee that had yet to retire, but had worked ten years as a county employee, and eight at the state with two left to work.  Mr. Stevens stated that if the employee was currently retired the subsidy would not change, but if the retirement came after July 1, 2001, only state service would be calculated in the subsidy.  Mr. Dini confirmed that there was only a grandfather clause from now until July 1, 2001.  Mr. Stevens stated that that was the way the bill was currently written, but that was the policy issue that the legislature needed to grapple with.  He explained that when the subsidy system was put in place, the intent was to include state service.  Because the state was providing the subsidy for the group insurance premium, only state service would be counted.  The original provision was not implemented in that matter, and A.B. 138 would allow the legislature to debate whether all public service should be included, whether only state service should be included, or whether there should be an effective date into the future. 

 

Ms. Giunchigliani questioned how many people would be impacted if the policy change was made.  Mr. Stevens stated that the people impacted would be any employee in the state that planned to retire that had any other public experience.  He was unsure whether the PERS would have the exact numbers because they only carried statistics on currently retired employees.  Ms. Giunchigliani asked for the number of retirees that received a subsidy based on non-state and state service.  Mr. Stevens stated that he believed the number of retirees that had dual service, non-state and state public service, that would not have received this benefit if the bill would have passed and they would have retired after the effective date was definitely under 100, and might be under 50. 

 

Mr. Dini inquired about any federal regulations that would affect the bill.  He explained that he could understand not allowing new employees into the system under the current policy, but to change the policy so it affected employees currently in the system seemed like it was taking away expected benefits.  Mr. Stevens stated that he was unaware of any federal regulations, but knew of some cases in retirement systems where groups of people were grandfathered in based on not being allowed to take away a benefit that employees were entitled to.  He noted that he would ask the legal division about this matter.

 

Mr. Bob Beers inquired about local governments that were offering similar subsidies for retirees.  Mr. Stevens stated that some local governments were offering subsidies, but he did not possess a list of which local governments were included.  Mr. Beers stated that the state government was having trouble with employees leaving to enter local governments.  He suggested that a solution to the problem could be to apportion the cost of the state subsidy and charge it back to the local governments.  Mr. Stevens stated that that could be an option that would provide the benefits, but at a cost to the public entity where a person was employed previous to their state service. 

 

Mr. Richard Perkins explained that the bill existed because most local governments had plans for the retirees, and most had active employees that subsidized the premiums.  What was occurring was that there were local governments that did not offer plans for the retirees and some that were looking at not offering plans in the future, because the state had always been “the umbrella that catches all employees.”  At a future point the state retirees would outnumber the actives and the subsidy would no longer exist, and it was increasing the health care costs in the state plan and the local government was reaping the benefit of having the state insure employees.  Mr. Perkins stated that the state could not be the “catch all” for everyone, and handle all health care costs.

 

Ms. Giunchigliani asked for a list of which local governments were not covering any retirement benefits.  She noted that retirement insurance issues were discussed each session, and opined that there would be a bill this session dealing with retiree insurance.  Mr. Stevens stated that he was unaware whether this additional bill had appeared in the Assembly Committee on Government Affairs, and noted that he could bring information regarding the large public employers and a sample of the smaller employers back to the committee. 

 

The Chair recognized Bob Gagnier, Executive Director, State of Nevada Employees Association (SNEA).  Mr. Gagnier stated that the original bill was corrective in nature and stated the intent of the law.  The SNEA had sponsored the bill that led to new language in 1993, and what was being attempted was to correct a mistake in the interpretation.  At that time a person could work for county government all of their career, and then work for the state for a short while only to retire.  The health insurance would then be subsidized for the rest of the person’s life.  The intent of the 1993 legislation was to reward employees of the state for their work, and they would get a proportionate amount based on their years of service.  Mr. Gagnier stated that the intent of the legislation was to cover state service.  The bill was proper in trying to correct the interpretation that had been placed on the 1993 legislation.  He expressed his support for the original bill, and stated that if it was necessary to include the Assembly Committee on Government Affairs’ amendment that the SNEA would continue to support the legislation.  Mr. Gagnier stated that the original intent of the legislation was to utilize only state service for the calculation of retirement benefits.

 

Mr. Marvel asked what the rationale was for the Assembly Committee on Government Affairs’ amendment.  Mr. Gagnier stated that the rationale he heard from Chairman Arberry and Mr. Stevens when they testified before the Assembly Committee on Government Affairs was that they did not desire to remove any benefits that might already be in effect. 

 

The Chair recognized Martin Bibb, Lobbyist, Retired Public Employees of Nevada (RPEN).  Mr. Bibb stated that there was no problem with the correction in this legislation dealing with the idea that only time spent as a state employee was used in calculating retirement benefits.  He noted that there were some local governments that subsidized their employees and retirees.  In reviewing the bill draft the RPEN found it worth considering if there were state employees who retired before the effective date of the bill that might be included in the additional subsidy.    Mr. Bibb stated that there was some active subsidization of retirees and he believed that subsidization was envisioned when the self‑funded plan was formulated in 1993.  In the legislative study 83-15, it was clear that retirees were not to be rated separately from actives when considering the group insurance program.  If that was completed retirees would be placed at a distinct disadvantage.  The RPEN was concerned that in the current year retirees were given a greater percentage of rate increase in their premiums than state active employees were given.  He stated that in the 1999 Medicare carve out that demanded $25 million be given to the program, retired state employees and active state employees were given the same rate of increase. Mr. Bibb also stated that the RPEN was concerned that recent studies had suggested rating retired state employees with retired non-state employees.  That would be a departure from rating active state employees and retired state employees where a true sense of age demographics, pooling, spreading risk, and sharing rates could be gained. 

 

James Richardson, Lobbyist, Nevada Faculty Alliance, expressed his support for A.B. 138.  He stated that philosophically he supported the idea that local governments should be allowed to have retirees join the PERS system, but there would be future implications.  He suggested that the idea given by Mr. Beers should be examined.  When additional retirees were allowed to enter the system there needed to be a mechanism to charge the cost of those retirees to the local governments.  Currently non-state retirees could be rated separately and Mr. Richardson urged the committee to examine the rate structure process to determine whether more support was needed.  He explained that he had heard of times when non-state public employees were told that the best place to retire for heath benefits was the state.  Mr. Richardson appreciated that interest shown in gathering more information regarding contributions made by public entities for retirees.  He stated that in a previous Legislative Commission meeting there was a discussion of related matters, and a decision was made to obtain information on rate structures for active employees so that the Legislative Commission could consider the information.  Mr. Richardson explained that the Legislative Commission could expand their discussion to include contribution amounts for retirees from varies public entities.  He expressed his support for Mr. Bibb’s comments concerning the rate structure issue, and encouraged the committee to continue discussion on this issue.  Mr. Richardson stated that there were states that paid 100 percent of all health care costs for retirees, and stated that Nevada was not the best state in supporting its retirees.  He explained that this policy needed to be addressed.  Mr. Richardson reiterated his support for A.B. 138. 

 

Chairman Arberry closed the hearing on A.B. 138.

 

PUBLIC UTILITIES COMMISSION – BUDGET PAGE PUC-1

 

Chairman Arberry recognized Don Soderberg, Chairman, Public Utilities Commission of Nevada.  Mr. Soderberg introduced Crystal Jackson, Commission Secretary, and Donna Wickham, Assistant Commission Secretary, Public Utilities Commission of Nevada. 

 

Ms. Jackson explained that the commission’s budget request was developed following a fundamental review, which included evaluating the existing organizational structure, fiscal resources, technological advances, and more efficient use of staff.  The outcome of the review resulted in the commission adopting, at a scheduled agenda meeting on August 3, 2000, a plan to modify the organizational structure of the commission for both policy and regulatory operations.  The organizational structure adopted was designed to establish a clear focal point of leadership for staff, enhance communication with stakeholders, and within the commission enhance the performance of staff and streamline the organizational structure to meet the demands of the utility industry. 

 

Ms. Jackson stated that Budget Account 3920 was funded through a regulatory assessment levied against public utilities in the state.  The commission’s budget request was built around the regulatory assessment, set at 2.5 mills for both years of the biennium.  She explained that the regulatory assessment would be reduced by about 18 percent over that of the 1999-2000 biennium.  The commission would vote in May 2001 to set the assessment for FY2002.  Ms. Jackson noted that the commission had been reducing the balance forward of the reserve by decreasing the mill assessment to utilities.  If revenues were higher than projected the commission would further adjust the mill assessment.  The projection for the commission’s balance forward for the end of FY2001 was $3.3 million.  She stated that if The Executive Budget was approved the FY2003 ending balance was projected to be $1.3 million, which was prudent reserve level for the size of the agency.  The commission was proposing to eliminate six vacant positions, which would result in savings of approximately $900,000 for the biennium.  Ms. Jackson stated that there was a proposed internal equity adjustment for six targeted positions; $9,000 was requested to design and publish new agency brochures pursuant to NRS 703.300.  She explained that there was a request for new and replacement computer hardware and software.  The equipment request also included $80,000 to replace videoconference equipment due to the company discontinuing on-site repair and factory support.  Ms. Jackson said that the commission was asking to replace one vehicle for the gas pipeline safety program, one fax machine, 16 office chairs, and 10 business telephones. 

 

Ms. Giunchigliani asked if there were auditors in-house.  Mr. Soderberg stated that there were several auditors in-house, but their role had changed in previous years, and the agency was not utilizing them as much.  Auditors with the major utilities did not complete on-site inspections because there was data exchange.  Mr. Soderberg stated that the trend across the country, and in Nevada, was for a different type of audit, which was difficult to complete with government employees.  This audit was a performance audit that covered whether or not a utility was using the best practices in certain types of purchases.  He noted that this type of audit had not been provided for in statute or regulation, but it had been completed through an agreement with the utilities, by which the selection of an outside auditor would be done jointly with the Bureau of Consumer Protection and the regulatory operation staff for the utility; the utility would pay the cost, and the auditor would report to the commission.  Separate from auditing the finances of the utility, this audit would analyze whether the utility made the best decisions at certain times to maximize value.

 

Ms. Giunchigliani inquired as to whether the in-house auditors dealt with rates in order to ensure that requested rate increases were justified.  Mr. Soderberg stated that that function was completed by the in-house auditors. 

 

Ms. Giunchigliani asked how many auditors were still in-house that were dedicated to financial audits.  Ms. Wickham stated that there were currently seven financial analysts.  Ms. Giunchigliani clarified that a financial analyst was a euphemism for an auditor.  She then asked how much of the analysts’ time was dedicated to auditing.  Mr. Soderberg stated that auditing was the primary function of these seven employees.  Ms. Giunchigliani suggested that the title of these employees be changed from financial analysts to auditors.  She then asked if there were additional employees that were previously completing audits that were currently completing a separate function.  Mr. Soderberg indicated that he was unaware of any individuals that had moved from the auditor role.  He added that there were economists employed at the agency that analyzed utility rates from a different perspective, and they worked hand in hand with engineers at the agency to examine the costs of technical aspects.  Ms. Giunchigliani asked how many auditors were employed with the commission prior to the reorganization.  Mr. Soderberg stated that due to the reorganization two positions had been eliminated.  Ms. Giunchigliani reiterated that the seven financial analysts were auditing the rates, and the commission was contracting with an outside agency, that the utility compensated, to perform performance audits. 

 

Ms. Giunchigliani asked for comment on the reorganization study, and stated that during an Interim Finance Committee (IFC) meeting eight months previous it had been discussed.  Mr. Soderberg stated that the study had been completed at the time of the IFC meeting and it was an internal study to examine certain positions that were chronically vacant.  The agency defined “chronically vacant” as a position that when the position became vacant was left vacant for an extended time period because it was more work to fill the position.  He stated that the study examined the paper flow in the agency.  The reorganization attempted to decrease the number of places various applications and positions would go, and grouped people in like functions.  The study identified six positions that the agency could eliminate.  Ms. Giunchigliani confirmed that six positions were eliminated, and asked if there were any current vacancies.  Mr. Soderberg stated that there were four vacancies currently, and explained that with the appointment of a new commissioner in Las Vegas, the commission was currently recruiting a new administrative attorney. 

 

Ms. Giunchigliani desired to know what the turnover rates were for the commission.  Mr. Soderberg stated that he did not know the statistics for turnover, to which Ms. Giunchigliani asked to have him compile those numbers.

 

Ms. Giunchigliani reiterated that there were six positions that had been eliminated, and there were currently four vacancies, and that the new Las Vegas commissioner would be filling one or two positions.  Mr. Soderberg stated that the commissioner would be filling one or two positions, and the commission was planning to hire one policy advisor.  Because a manager for that function had been hired a decision had been made not to recruit for the policy advisor position until this current time.  There was an offer being made to a candidate for the policy advisor position.  He stated that there was a legal case manager position that was open, and a financial analyst/auditor position that was open.

 

Ms. Giunchigliani asked what would be needed to change the financial analyst title to auditor.  Mr. Soderberg stated that this was an in-house issue, and generally in-house positions were titled differently than they were in the budget.  The financial analysts were called auditors within the commission. 

 

Ms. Giunchigliani inquired as to how many administrative staff positions were contained in the agency.  Mr. Soderberg stated that there were a few positions that were supervisory in nature and many positions that had a supervisory portion to the jobs.  He stated that there were 13 managers, but those 13 positions were not solely managers.  Ms. Giunchigliani asked for a breakout of supervisors to employees. 

 

Mrs. Marcia de Braga asked if there was a plan to adjust the interruptible rate for agriculture.  Mr. Soderberg was unaware of any plan to adjust the rate.  Mrs. de Braga stated that she was concerned about the adjustments to rates because it was completed without a public hearing process, and because when the general population rate increase was 17 percent the agriculture rate increased between 70 and 140 percent.  This rate increase effectively put small agriculture out of business.  She said that she would like to see a tariff adjustment or an allotment of time to find an alternative source of energy, or the agriculture economy in central Nevada would deteriorate.   Mr. Soderberg confirmed that Mrs. de Braga was referring to the Comprehensive Energy Plan filing by the utility.  He stated that the process was ongoing.  Mrs. de Braga asked what recourse the agricultural operators would have, since they had not had access to a hearing.  Mr. Soderberg stated that the operators would have access to a hearing.  Mrs. de Braga stated that the operators had already been informed about the rate increases, and noted that one operator in Churchill County had a rate of $25,000 for electricity in 2000, and with the rollover and the percentage increase on the rollover the rate would be $53,000 in 2002.  This change in rates was not survivable for the operator.  She asked that the rates be delayed so that operators could develop an alternate energy source, and noted that the central portion of Nevada could be developed due to the good interruptible rate.  Mr. Soderberg reiterated that the process was ongoing, and he was not uniquely familiar with this particular situation.  He noted that the rates were allowed to go into effect by operation of statute, pending further hearings.  People who were affected should inform the commission.  This type of filing was focused on the cost to the system of each customer.  The commission would be examining how high a cost was being incurred to the entire system, and if the cost was inflated in the filing it would be adjusted down if the commission had access to the information.  Mr. Soderberg stated that he would bring Mrs. de Braga’s concerns to Richard McIntire, Commissioner, Public Utilities Commission of Nevada.  Mrs. de Braga asked how the people would inform the committee. Mr. Soderberg stated that people could call the Consumer Complaint Department to receive general information about involvement, the people may choose to ask for a full intervention, which would make them a party in the hearing, or they could attend the hearing and participate during public comment. 

 

Mr. John Marvel concurred with Mrs. de Braga’s comments, and noted that he had received phone calls from agricultural operators that were afraid they would be priced out of business. 

 

Ms. Giunchigliani asked why the gross utility operating revenue decreased in calendar year 2000 compared to 1999.  Ms. Wickham stated that the operating expenditures were decreased due to the expert consultants for a substantial savings.  Ms. Giunchigliani stated that the operating revenue was currently decreasing and asked if this decrease could be attributed to the mill assessment.  Ms. Wickham stated that the mill assessment was lowered from 3.5 mills to 2.5 mills.  Ms. Giunchigliani asked if the global settlement had an effect on the decrease.  Ms. Wickham answered in the negative.  Ms. Giunchigliani asked if the 17 percent increase recently approved by the commission for Nevada Power and Sierra Pacific Power companies had an effect on the decrease.  Mr. Soderberg answered in the negative.

 

Ms. Giunchigliani asked if the commission was planning to adjust the mill tax.  Mr. Soderberg stated that it was believed that the mill tax would need to be adjusted.  He explained that the commission had amassed a larger reserve than what agencies would typically carry.  This reserve was created in preparation for contingencies that did not occur.  When Mr. Soderberg became chairman, he noted that the reserve was unusually high, and had conversations with the IFC about this matter.  The commission worked with the Budget Office and Legislative Counsel Bureau to develop a three-year plan to lower the reserve.  This could be done by yearly adjusting the mill assessment to meet the targets set out in the three-year plan.  In the previous year the mill assessment was set at 2.5 mills in May to reach the first target, and this spring the commission would examine the level of revenue.  With growth in the state and the rate increases the commission might be receiving more than predicted, and would have to adjust the mill assessment again. 

 

Ms. Giunchigliani asked if the base was low, and inquired as to what the goal amount was for the reserve.  Mr. Soderberg stated that the goal was to lower the reserves to an amount between $1.3-1.5 million.  Ms. Giunchigliani confirmed that the reserve had been $3 million, and the commission was expecting an area between $1.3-1.5 million.  She asked if the mill assessment would have to be raised.  Mr. Soderberg said that it was unknown at this point whether the mill assessment would need to be raised, but he believed that the mill assessment would be able to stay at its current level.  The revenues with the 2.5 mill assessment might be higher than predicted but this would not be known for several months.  Ms. Giunchigliani noted that for budget closings, the committee would need to know whether or not the mill assessment would be changing.

 

Mr. Beers stated that the problem was that the projected regulatory assessment line in the revenue section of the budget was below what the current year’s regulatory assessment revenue was likely to be, and it seemed that the item that the regulatory assessment was based upon was going to grow in double digits for the coming two years.  Mr. Beers asked how the same percent times a growing number equaled the same dollar amount for each year of the biennium.  Ms. Wickham stated that historically the commission had projected a flat line and noted that the annual reports were due to the commission by the middle of May, and these depicted the gross operating revenue for the previous calendar year.  Once these reports were made, then the commission could set an actual assessment upon the gross revenues to be payable by July 1^st.  Mr. Beers asked if the actual assessment exceeded the budget, would the commission appear before the IFC.  Ms. Wickham explained that if the actual exceeded the projections then the commission would appear before the IFC to ask for authorization to receive the monies. 

 

The Chair recognized Mr. Stevens.   Mr. Stevens stated that he was not sure the given explanation was entirely accurate.  If additional revenues above those predicted were placed in the reserve category then no additional IFC action would be required.  If the additional revenues were placed in an expenditure category and exceeded thresholds, the commission would need to come before the IFC.  He reiterated that if the revenue line was exceeded the commission would not need to come before the IFC if the additional monies were placed in the reserve.  In the previous few years, the commission had been placing the additional revenue monies in the reserve, and this had created the large reserve.  Mr. Stevens opined that the proposed budget would reduce the reserve to a reasonable level.  He added that the revenues from the mill assessment were under-projected so the reserve would grow unless the mill assessment was adjusted.

 

Mr. Beers reiterated that the reason the same percentage applied to a growing number equaled the same dollar amount was because this was traditionally how the agency functioned.  Ms. Wickham agreed with Mr. Beers’ statement.

 

Ms. Giunchigliani stated that the committee would like the commission to examine this process to discover a more suitable way to predict revenues in order to avoid problems that had occurred in the past.

 

Mr. Beers asked for future testimony regarding this issue.

 

Mrs. de Braga reiterated that the 17 percent increase was not currently confirmed.  She also stated that the interruptible rates were not currently confirmed.  Mr. Soderberg stated that those rates were not confirmed, but were allowed to go into effect pending further procedures.  The rates were currently in effect, but pending further hearings the rates could be reversed or modified.  Mrs. de Braga stated that this process was almost frightening, and a successful business could not operate under such circumstances. 

 

Ms. Giunchigliani asked if there were any decreases made in the budget due to the elimination and renaming of certain positions.  Ms. Wickham stated that when the six positions had been abolished they were vacant during the base year, and the commission believed that the reduction had taken place.  Mr. Soderberg stated that the recent change in job titles did not change the duties, but rather more accurately reflected the duties of the position. 

 

Ms. Giunchigliani asked for comment on decision unit E-300.  Ms. Jackson stated that the commission was requesting 58 replacement desktop computers and 7 replacement laptop computers.  Ms. Giunchigliani asked if DoIT had reviewed the commission, and whether those replacements were part of the recommendation.  Ms. Wickham stated that DoIT had completed a review, and the replacement computers were part of the recommendation. 

 

Ms. Giunchigliani confirmed that the agency would be replacing 58 desktop computers and asked what the desktops would be replaced with.  Ms. Wickham stated that over the biennium the commission was requesting to replace 58 desktop computers, and 7 laptop computers.  The replacement computers were dependent on DoIT equipment contracts.  Ms. Giunchigliani asked if the replacements were due to a malfunction or the replacement schedule.  Ms. Wickham stated that there was a replacement schedule.  Ms. Giunchigliani asked what the commission was currently using for desktop PCs.  Ms. Wickham stated that the commission was using Gateway computers. 

 

Ms. Giunchigliani asked for comment on decision unit E-301, and noted that both decision units E-300 and E-301 were funds created from reducing the reserve.  Mr. Soderberg stated that in the 1997 Legislative Session, a bill related to electric competition that was passed, gave the commission a new role that was not present in most state utility agencies.  The forecasting function was shifted from the private section with public oversight, to having the commission provide the initial forecast and have the public sector involved in the refining of those numbers.  Decision unit E-301 dealt with publications and on-line services that the commission’s engineers believed were needed to make the forecasts. 

 

Ms. Giunchigliani desired information regarding decision unit E-710.  Mr. Soderberg stated that decision unit E-710 was for general office equipment that needed to be replaced due to “wear and tear.”  The one unusual item was the videoconference equipment.  The commission was informed in 2000 that the current videoconference equipment was obsolete, meaning that the company would not continue to service the equipment.  He stated that the equipment was currently working, but if the equipment failed there would be no way to repair it, and by law the commission had to have scheduled meetings videoconferenced.  If the equipment failed, unless the commission could get a phone hookup, votes would not be possible. 

 

Ms. Giunchigliani asked if the computer hardware included in decision unit E‑710 was different for the PCs in decision unit E-300.  Ms. Wickham indicated that a portion of the hardware was for the ethernet hubs, in order to update the system from 10 megabits to 100 megabits, which would support the new hardware for the computers. 

 

Mr. Beers confirmed that the commission was planning on going to a 100 megabits Local Area Network (LAN), and asked how many people were in the division.  Ms. Wickham noted there were 80 people.  Mr. Beers said that that was a fairly ambitious project for 80 people.  Ms. Wickham explained that the current system was 10 megabits.  Mr. Beers explained that the legislature operated 120 staff positions on a 10-megabit LAN during the session.  He asked if the LAN operated the videoconference system.  Mr. Soderberg indicated that the commission would provide that information to the committee, along with the number of employees that would need the 100-megabit LAN.  He stated that the entire audit function of the utilities was completed by file transfer, and currently there were problems with the transfers.  Mr. Beers requested a written explanation for the need to change to the 100-megabit technology. 

 

Ms. Giunchigliani asked for information regarding the need to support the new equipment DoIT was recommending be included in the report.

 

Mr. Beers noted that the replacement videoconferencing system would cost approximately $80,000, and the current system was working.  He asked what amount of time would be required to replace the existing system if it completely failed.  Mr. Soderberg answered that he was unaware if that assessment had been completed.  Mr. Beers indicated that in the technology industry an item might be called obsolete before it was, in order to provide reason for the customer to purchase the upgrade.  There might be independent contractors that would be able to offer parts and services on an item that the manufacturers called obsolete.  Mr. Beers stated that he would consider a manufacturers’ announcement of obsolescence, on a currently working item, a five-year warning of actual obsolescence.  He stated that if the new videoconference system was approved, he hoped the commission would approach it from the point of, “Now we have the authority to replace it when we need to, not let’s replace it.”  Mr. Soderberg indicated his understanding. 

 

Ms. Wickham stated that the legislature had found itself in the place of replacing its videoconferencing equipment.  She stated that this replacement was done in the previous year because the legislature had found it difficult to replace the parts.  The commission was currently in the same position.  Ms. Giunchigliani asked for the justification for the replacement to be provided. 

 

Ms. Giunchigliani asked for comment on decision unit E-720, and why there were additional computers requested.  Ms. Wickham stated that the 58 computers mentioned earlier were a total of new and replacement computers.  Decision unit E-720 was a request for three new desktops in the second year of the biennium and five new laptops, one in the first year and four in the second year of the biennium.  Decision unit E-300 was a request for 55 replacement desktops, 25 in the first year and 30 in the second year of the biennium, and two replacement laptops in the first year of the biennium.

 

Mr. Dini inquired about the audit that indicated there were companies that owed approximately $800,000 on the commercial mobile radio service.  He asked how the lawsuit was progressing.  Mr. Soderberg indicated that prior to the lawsuit one major cell phone provider had paid the delinquent mill assessment, and since that time four companies had progressed in that direction.  Regarding the four, the commission was progressing in District Court, and the cases had been recently filed.  Mr. Dini asked how much money remained to be collected in this issue.  Mr. Soderberg answered that there was approximately $800,000 remaining.

 

Mr. Dini asked if the mill assessment revenues were used as a rebate for low‑income households.  Mr. Soderberg stated that currently no mill assessment revenues were targeted for any purpose other than the regulation of utilities.  To target those revenues for other purposes, a change to the statutes would be needed.  He stated that a dissimilar situation was encountered in 1997, when the commission was running short of funding for the railroad program and found it to be legal to use the mill assessment monies for the salaries of the railroad people.  Mr. Soderberg reiterated that without a statute change the commission would not be able to use the mill assessment revenues for an area other than utility regulations. 

 

Mr. Marvel asked if the collection of monies from the cellular companies was an issue.  Mr. Soderberg stated that it was not an issue until the end of the 1999 Legislative Session, when the cellular companies indicated that they believed the regulation statute did not apply to them.  The companies also expressed the idea that the commission spent less time regulating the industry, so the commission did not need the revenues from the mill assessment.  The commission’s legal counsel, along with the legislature’s legal counsel, had concluded that the regulation statute did apply to cellular companies.   The commission had been working with the cellular industry to write a new statute that would remove the argument presented, and the commission was examining ideas about applying regulation differently to the industry because the industry did have the lowest regulation of all industries.

 

Mrs. Chowning inquired about the railroad and hazardous waste performance indicators.  The indicators stated that a percent of total track units inspected was 100 percent and in future years it would return to 75 percent, and the hazardous rate was 75 percent flat.  The percent of line locate requests received was increased to 13.6 percent, but the commission was returning to 5 percent.  She asked if all needed procedures were being completed, in order to ensure the safety that was expected.  Mrs. Chowning asked if everything was being accomplished on the railroads, was there a decrease or an increase that was needed.  There was an increasing amount of hazardous waste being proposed to be transported via railroads.  Mr. Soderberg stated that he would have the manager of the railroad and hazardous waste program contact staff.  The current manager had provided more structure to the program, and this was not reflected in the budget.  The manager had been working with the industry and inspectors to implement a hands-on approach.  Mr. Soderberg indicated that the hazardous waste position had been difficult for the commission.  It was created in the 1997 Legislative Session, and was a classified position.  The commission had trouble keeping the position filled, because employees with hazardous waste specialties had better opportunities with federal government.  The person in this position was a recent hire with hazardous waste experience and would need to be trained in the railroad standards.

 

TAXICAB AUTHORITY – BUDGET PAGE B&I-161

 

The Chair recognized Robert Anselmo, Administrator, Taxicab Authority.  Mr. Anselmo indicated that the Taxicab Authority was charged with regulating the taxicab industry in counties where the population exceeded 400,000.  The authority was governed by a board of five members appointed by the Governor.  The board conducted hearings and made final decisions regarding the administration and enforcement of NRS 706.881 to NRS 706.885 inclusive.  The mission of the Taxicab Authority was to protect and provide for the taxicab user through the regulation of the taxicab industry in Clark County, including the issuance and transfer certificates of public conveyance and necessity to the taxicab companies; determining the number of taxicabs authorized per certificated company; issuance, suspension, and revocation of drivers’ permits; determination of the safety, mechanical operation, and comfort standards of taxicabs; determination of the fares to be charged; and conducting criminal investigations in conjunction with other law enforcement agencies in Clark County.

 

Chairman Arberry stated that the trip charge revenue appeared to remain constant while the projected number of taxi trips had increased.  Mr. Anselmo stated that the agency was authorized to assess a 15 cents charge per taxi trip.  In addition, revenue was created with a $100 fee per issued medallion, and a $10 fee for temporary medallions.  This revenue appeared to be on the rise. 

 

Mr. Beers stated there should be a direct correlation between the number of trips and the amount of revenue.  In FY2000 there was a 13 percent increase in the amount of trips, but only a 10 percent increase in trip charge revenue.  Richard Boxer, Administrative Service Officer, Taxicab Authority, stated that he was unaware of the figures Mr. Beers was referring to. Mr. Beers explained that he was referring to the number 21,087,993 for the FY2000 actual trips, and $3,081,017 for the amount of trip charge revenue for FY2000.  Mr. Boxer stated that he believed the trip charge revenue was $3,163,000 for FY2000 and the agency was understated in FY2000 and would be overstated in FY2001.  Mr. Beers named this a timing error, and stated that it was typically corrected by an auditor.  Mr. Boxer stated that this was an oversight.  Mr. Beers asked if there was an auditor for the division that had asked the agency to post a reversing entry to remedy the oversight.  Mr. Boxer stated that the agency did not have an auditor.  Mr. Beers asked if the agency believed that the FY2001 revenue would be overstated by the amount the FY2000 revenue was, and the projection was that there would be slightly fewer rides in FY2001 than there were in FY2000.  Mr. Boxer stated that there were 21 million trips projected in FY2001, and it appeared the actual number of trips would be 22 million for trip charge revenue of $3.3 million.  Mr. Beers stated that the numbers Mr. Boxer had given did not match the information in the budget.  Mr. Boxer stated that the increase in trips was due to growth, and the agency was projecting trip revenue of $3.3 million for FY2000, $3.3 million for FY2002, and $3.45 million in FY2003.  Mr. Beers reiterated that those numbers were not reflected in the budget.

 

Mr. Stevens stated that adjustment could be made when the committee was closing the budget, but the budget was built on trip charges of $3,081,017.  He noted that the staff had had questions regarding the revenue, and it now appeared that the revenue was under projected.  Mr. Stevens reiterated that the adjustments could be completed at the closing hearing for this budget. 

 

Mr. Beers stated that there were 22 million trips projected for FY2002, and 23 million trips were projected for FY2003, but the revenue was not projected to increase.  Mr. Boxer stated that he did not have all the information on this issue, but there appeared to be a computer error, in which expenses and revenues were held to the base budget. 

 

Mr. Anselmo stated that in the previous biennium the agency indicated that the amount of money provided to the Senior Ride Program, the reduced cost of taxicab rides, would have to be capped.  The legislature was concerned about this issue, and both the Senate Finance Committee and Assembly Committee on Ways and Means had asked that if the actual revenues were greater than the projected revenues the extra monies should be spent on the Senior Ride Program.  Mr. Anselmo noted that this had been done because the revenues for the previous biennium were substantially higher than projected in the budget.  The Budget Office and agency had been conservative when projecting revenues.  He explained that in the previous six years the revenue had been underestimated. 

 

Mr. Beers stated that it appeared that the reserve for this budget was decreased to an extremely low level, and the revenue projections were nonsensical.  He explained that there was a fixed amount charged for trips, and the agency was projecting a one million increase in the number of trips, but was not projecting any revenue from that increase.  Mr. Beers stated that this was a numerical issue and not a policy issue.  Mr. Boxer stated that he had communicated with a fiscal analyst from the Legislative Counsel Bureau, and had reached the conclusion that the projections for the number of rides appeared realistic, and the projected amount of revenue would need to be increased.

 

Mrs. Chowning noted her concern that if the reserve level was too low, the Senior Ride Program would not be able to continue.  She also questioned the agency about airport control officer positions that had not been filled, and whether those positions could be filled or if they should be eliminated.  Mrs. Chowning also asked about the salary increase for the Administrator, and stated that this issue needed to be examined.  Mr. Anselmo stated that the Senate Finance Committee had addressed the two vacant positions, and the agency had agreed to withdraw them from the budget.  The salary increase was confusing to Mr. Anselmo.  He stated that in the base salary the Administrator made less money than the Chief Investigator, a class V position.  The Governor had attempted to adjust this to ensure that in base salary no position was higher paid than the Administrator.  Mrs. Chowning opined that when the salary increase was projected that agency was unaware of the Governor’s recommended salary increase.  Currently the salary increase was 5 percent plus 4 percent plus 9 percent.  Mrs. Chowning reiterated that the salary increase for the Administrator needed to be examined.

 

Mrs. Chowning stated that in the performance indicators for the agency it appeared that robberies and accidents were decreasing, but service complaints were increasing.  Mrs. Chowning asked for comment about the reason for the increase in service complaints.  Mr. Anselmo stated that the agency was concerned about the service complaints.  He explained in August there was a new cab company that proposed service to the west side of I-15.  The hearing process had been completed and on May 1, 2001, the cab company would begin service.  Mr. Anselmo stated that one of the cabstands would be located at the Partners facility on Lake Mead Boulevard and Revere Street. 

 

Mr. Beers asked for comment on the eight new classified positions in decision unit M-200.  Mr. Anselmo stated that three investigators and one senior investigator were required due to the growth in the industry.  Those positions would allow the agency to meet the demands of investigating complaints and service requests by the public.  He stated that there were situations where the driver would travel on a longer path than necessary, or a person would leave personal property in the cab.  Mr. Anselmo also stated that there had not been a supervisor during the weekend day shift, and due to the growth and demand in the area the supervisor position was needed.  The two vehicle inspectors were requested due to the growth in the number of units that the cab companies possessed.  He explained that in Clark County every cab was inspected quarterly, but with the existing staff this schedule was not being met.  The agency had projected that 5,400 inspections would be completed when only 5,125 were completed.  Mr. Anselmo stated that there was a high level of new cabdrivers in the Clark County area.  There were 300 new applicants, applicants for retesting and renewals per week.  The clerical staff was overworked due to the amount of applicants and the agency needed assistance in that area. 

 

Mr. Beers stated that there were two Airport Control Officer II positions in the budget.  Mr. Anselmo stated that those two positions were the ones that the agency was planning on eliminating.  Mr. Beers explained that those positions were not eliminated in the proposed budget, and expressed his approval of the elimination. Mr. Anselmo stated that the positions were in the current proposed budget, but in discussions with the Senate Finance Committee it had been decided that the positions would be eliminated. 

 

Mrs. Chowning restated her concern for the Senior Ride Program.  Mr. Anselmo stated that the Senior Ride Program was budgeted for the biennium, and the agency believed that the revenue of the agency would be sufficient to cover the requested amount, an increase from the previous session.  He opined that the revenues would continue at the projected levels and the program was not in any danger for the present biennium.  Mr. Anselmo stated that in the next biennium, if the growth rate leveled out, the agency might need to return to the legislature and request to increase the trip charge from 15 cents to 20 cents.  Currently the agency felt as if there was enough money to cover all the needs, including continuing the Senior Ride Program. 

 

TRANSPORTATION SERVICES AUTHORITY – BUDGET PAGE B&I-168

 

Chairman Arberry recognized Paul J. Christensen, Chairman, Transportation Services Authority.  The Transportation Services Authority (TSA) regulated all traffic that was not deregulated by the federal government.  This primarily included household-goods movers, limousines, taxicabs in all locations except Clark County, and per capita transportation.  He stated that the budget contained no enhancements.

 

Chairman Arberry stated that there had been conversations regarding the consolidation of the TSA and the Taxicab Authority, but there were no bills or recommendations regarding this matter.  Mr. Christensen stated that the agency had been asked to cooperate with a taxicab owners’ coalition that was going to push for combining the two agencies.  There had been a meeting the previous week, and the coalition withdrew their support for the bill.  Mr. Christensen was unaware of whether or not that bill would pass through the Senate Finance Committee, but S.B. 270, which made various changes to provisions governing fully regulated carriers, covered the items that the agency needed if the bill combining the two agencies did not pass. It covered household-goods movers, which was one of the abusers of the system and affected many constituents.  Mr. Christensen said that when household-goods movers were caught not complying with the regulations, they were fined, but there was no collection of the fine and the behavior continued.  S.B. 270 also placed a charge on limousines with currently operated free, and began a licensing programs for limousine drivers.  Currently limousine drivers needed only a driver’s license, where taxicab drivers needed special licenses.  He stated that all of those properties were included in the legislation regarding the consolidation. 

 

Ms. Giunchigliani confirmed that if the merger was not completed S.B. 270 would allow the consideration of the licensing of limousine drivers to continue.  Mr. Christensen stated that the agency had requested S.B. 270 because it was aware that a consolidation bill was periodically requested and periodically died, and the agency desired to ensure that the licensing of limousine drivers was addressed.  Ms. Giunchigliani questioned if the proposed merger or S.B. 270 would affect the budget.  Mr. Christensen stated that the proposed merger would not affect the budget, and S.B. 270 was self-sufficient and would not affect the budget. 

 

Mrs. Chowning clarified that both bills discussed were currently in the Senate Transportation Committee.  Mr. Christensen agreed and acknowledged his misstatement of one bill being in the Senate Finance Committee.  Mrs. Chowning thanked the agency for its proactive approach in regard to the household-goods movers. 

 

Mrs. Cegavske asked about limousine drivers from California, and whether they were being fined or having their vehicles impounded.  Mr. Christensen stated that the vehicles were being impounded, and noted that there were not as many California limousine drivers crossing the Nevada border.  He stated that there were still California limousine drivers for the large conventions, and explained that those drivers did not apply for Nevada driver’s licenses.  Mrs. Cegavske stated that she was curious about the policing of this issue, and the loss of revenue for the state.  Mr. Christensen confirmed that monies received by California limousine drivers did not stay in state.  He said that the agency was attempting to educate companies that were attending conventions to stop them from utilizing out-of-state and illegal operators.  Mrs. Cegavske stated that nothing could be done about the advertising, and asked how positions in the agency were enforcing regulations.  John Plunkett, Chief of Enforcement, Transportation Services Authority, stated that there were ten investigator positions currently.  The main duty of those positions was to investigate the applications; 174 were received in the previous year.  He noted there were approximately 450 complaints from citizens and certificated carriers in the previous year.  Mr. Plunkett explained that there were three investigators in the north, and seven in the south.  He stated that there was overtime used from Budget Account 3923 to assist in the investigations.  In the previous three years there had been 115 individuals that had been cited or vehicles impounded for violations of regulations. 

 

Mrs. Cegavske asked how many licenses had been approved from the submitted applications.  Mr. Plunkett explained that in 1998 there were 15 limousine companies and currently there were 44.  There had been a 16 percent increase in the number of applications submitted. He stated that there had been a 30 percent increase in complaints and investigations, but no increase in positions.  The citations had doubled, but the fines had decreased.  Mrs. Cegavske asked where the fines were located.  Mr. Plunkett informed the committee that the revenue from fines was located in Budget Account 3923.

 

 

 

 

TRANSPORTATION SERVICES AUTHORITY ADMIN. FINES –

BUDGET PAGE B&I-173

 

The Chair stated that the interest revenue from the fines collected was not presented in the budget and asked for comment on this matter.  Dave Kimball, Deputy Commissioner, Transportation Services Authority, stated that there was no NRS authority for interest on the account.  The agency had communicated with the Treasurer regarding this matter.  He also stated that there was not a large amount of money in the account.  Mr. Kimball explained that this account was not heavily utilized, and in the previous year the agency spent the same amount as the revenue.  This year the agency had spent more than the revenue, which was approved by the IFC, and had no desire to increase the amount in the account.  Mr. Kimball explained that if S.B. 270 was passed, the agency was planning to use monies from Budget Account 3923 for one-time expenditures. 

 

Chairman Arberry stated that the committee was concerned about the additional overtime requested, which was mentioned in the TSA budget.  Mr. Christensen explained that the additional overtime was traditionally from Budget Account 3923, and was used for enforcement.  Chairman Arberry stated that there was additional overtime recommended and asked for the justification.  Mr. Kimball stated there was no overtime in the TSA budget.  The proposed $25,000 for overtime was contained in Budget Account 3923.  He noted that until a year and a half previous, there had been no money budgeted for overtime because the agency was not an around-the-clock organization.  Overtime was traditionally used for gap positions, where an attempt was being made to fill the position, and other positions were needed to complete the work.  Mr. Kimball stated that in the agency overtime was used only for enforcement, and the agency appeared before the IFC in January 2000 to request $15,000 to fund enforcement for the rest of that year.  He explained that enforcement staff had been restricted and the agency was able to pass back $100,000 to the Highway Fund at the end of the year.  The $25,000 request would enable the agency to fulfill enforcement needs, and would prevent the agency from appearing before the IFC.  Mr. Kimball stated that the agency might need to appear before the IFC dependant on happenings in the industry. 

 

Chairman Arberry requested a committee introduction of BDR S-1465.

 

• BDR S-1465 – Makes appropriation to Interim Finance Committee for expenses relating to investigation of leukemia cluster in Fallon. (A.B. 359)

 

ASSEMBLYWOMAN DE BRAGA MOVED FOR A COMMITTEE INTRODUCTION OF BDR S-1465.

 

ASSEMBLYWOMAN CEGAVSKE SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

Chairman Arberry adjourned the meeting at 11:03 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Andrea Carothers

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

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