MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-First Session

April 2, 2001

 

 

The Committee on Ways and Meanswas called to order at 7:37 a.m. on Monday, April 2, 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

Ms.                     Sandra Tiffany

 

COMMITTEE MEMBERS ABSENT:

 

Mr. Richard D. Perkins

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Mark Krmpotic, Program Analyst

Jim Rodriguez, Program Analyst

Lila Clark, Committee Secretary

 

Assembly Bill 272:  Revises provisions governing calculation of basic support of             school districts to provide money for maintenance and repair of school             buildings. (BDR 34-1068)

 

Assembly Bill 300:  Creates revolving fund for construction and repair of school             buildings and facilities and makes related appropriations. (BDR 34-1003)

 

Ms. Chris Giunchigliani, Assembly District 9, Clark County, introduced herself.  She said A.B. 272 and A.B. 300 were the final two bills that were recommended by the State Planning Commission for the New Construction, Design, Maintenance and Repair of School Facilities.  She said she would address the committee regarding both bills at the same time in order to save time for the committee.  In 1999, the legislature appropriated approximately $16 million for schools that were found to be in need.  They had been declared engineering disasters and needed to be remodeled.  Some schools had funds appropriated from the State Board of Examiners.  In addition to that bill with the money in it, the interim committee also continued the school construction piece to study how the state might assist in the actual financing.  The object was to avoid returning to the legislature on a piecemeal basis each session trying for a couple million dollars here for this school and a couple million dollars there for that school. 

 

The Nevada State Constitution called for a uniform educational system that included not just funding but also school construction.  The state of Nevada had not been involved in the past in assistance with the maintenance, construction, rehabilitation, or rebuilding of schools.  There were four pieces of legislation that had been drafted, two of which were before the committee.  The other two bills were in the Taxation Committee.  The bills empowered the local school districts without obligating the state in a large fiscal manner.  The committee members included Senator Michael Schneider, Senator Mike McGinness, Assemblyman John Marvel, Ray Espinosa from the city of Lovelock, Don Lindemann from the Churchill County School District, Mary Peterson of the State Board of Education, and Ward Patrick, who took Eric Raecke’s position when Eric resigned. 

 

A.B. 272 allowed the revision of the calculation of the basic support tax so that the Distributive School Account would have revenue that would count toward construction.  The districts would have some additional dollars that dealt with the funding mechanism.  It would be a more long-term approach so that it would finally be recognized that simply allocating per pupil was not doing enough to allow the school districts to keep pace with providing a safe and well-used facility for students. 

 

Ms. Giunchigliani reminded the committee that from the ISES Corporation report from a past session of the legislature, there was a need for over a billion dollars for statewide maintenance, construction, renovation and repair of existing facilities.  She believed it was time the committee recognized that money could be given for school textbooks but it would do no good if there were facility problems such as poor lighting, no windows, the walls crumbled, or the building looked inadequate or inept.  No amount of technology would help if the outlets did not work.  She said she brought her own heater into the classroom for the wintertime and her own fans for the summertime.  Many times in Clark County in the older buildings the air conditioning did not work part of the time.  She said they went through seven compressors in one month in her facility approximately two years ago.  Those conditions all affected the learning capabilities of the students.  Ms. Giunchigliani said she thought that A.B. 272 was a reasonable way to begin adding an additional calculation for the purposes of school construction.

 

Ms. Giunchigliani went on to discuss A.B. 300 specifically.  She said the bill requested a $5 million one-shot appropriation to create a revolving loan fund.  The fund would be for grants as well as loans.  She said she suspected that the two appropriations were split in the bill because part of it was segregated for loans and part for grants.  She suggested that if the committee funded the $5 million for the revolving fund, it would be ongoing and would not need to be funded again.  The Board of Examiners would determine the allocation of grants versus loans.  The census figures indicated that four rural counties had decreased in population.  Their assessed values were not increasing.  In some cases, they could not generate $30,000 necessary to repair a roof.  Hard hit counties were Lincoln, Esmeralda, and parts of Storey County.  The bill proposed a method for counties to pay back the state to the best of their abilities and gave them an opportunity to deal with their construction needs.  The larger counties had other resources to access.  There had been statutes enacted in the last two sessions regarding room tax and real estate tax that would empower the larger counties.  Two of the bills in the Committee on Taxation would allow entities to go directly to a vote of the people to go beyond the $3.64 property tax cap.  Ms. Giunchigliani said she did not think there was anything wrong with that.  It had long been argued that as long as people had the right to say yes or no on a property tax it was fair.  The other bill that would be heard later that week dealt with allowing districts to go directly to the people rather than having to go through their county commission.  They were local governments and most of the commissions had turned down the sales tax or room tax requests.  The bill would allow the districts to go directly to a vote of the people.  Ms. Giunchigliani said she had asked Mr. Marty Johnson to address the committee regarding the technical parts of the two bills. 

 

Mrs. Cegavske said that she had had the pleasure of serving with Ms. Giunchigliani on a subcommittee in the interim between the 1997 and 1999 legislatures.  In working with some of the national educational committees, one of the issues brought up was the health issue of the older buildings.  She said it had been discovered that many schools in different parts of the country had been built on landfills and many students had been diagnosed with varying diseases.  She asked if any of that type of problem had been identified in Nevada.  She also asked if there had been any health issues brought up as a result of lead paint being used in schools in the past. 

 

Ms. Giunchigliani said that she had not heard that any schools had been built on landfills in Nevada.  She suspected that was because Nevada was not as urbanized an area as some parts of the country where shortage of land might have caused the use of landfill land for school sites.  She said the state was now faced with a land shortage in southern Nevada and possibly Washoe and other counties as they have used available land.  People were beginning to donate land and there could be problems with donated land that would have to be dealt with.  Regarding the health issues, there had been a problem with mold in some of the schools in the northern part of the state.  In Clark County, an asbestos removal program had been undertaken approximately 20 years ago.  Ms. Giunchigliani said she had not been told that lead paint had caused any health problems in the state.  Ms. Giunchigliani said the districts tended to monitor the health issue themselves since the health inspectors did not visit schools as often as she thought they should.  For example, the regulation of temperatures in schools was handled through the health department but the enforcement was carried out by the districts.  If students sat in a classroom with coats and gloves on, they might not be in tune with the subject being taught. 

 

Ms. Giunchigliani went on to say that the need for funding was there.  The districts had done the best job they could with the funding resources available.  The state had not fulfilled its obligation to make sure the supplies were available to students and also that the facility was acceptable. 

 

Mrs. de Braga asked Ms. Giunchigliani if all the funds proposed would be loans instead of grants as there had been in the past. 

 

Ms. Giunchigliani stated that the intent was for $1,250,000 to fund grants.  The remainder of the $5 million would fund loans. 

 

Mrs. de Braga asked if the requirement was included in the bill that the county be at the maximum tax rate or had attempted to sell bonds for the funding prior to qualifying for the proposed funding. 

Ms. Giunchigliani said that requirement was currently in state law.  It had been made a part of the statutes in the 1997 session of the legislature.  However, two of the bills in the Committee on Taxation would allow districts to go directly to the vote of the people.  Ms. Giunchigliani did not have a problem if the committee wanted to revisit those qualifications because she thought the qualifications were put in statute for the $16 million one-time money and now they were trying to go beyond that and say, what is the state’s obligation.  That issue may need to be revisited but that had not been done in either A.B. 272 or A.B. 300.

 

Mrs. de Braga said that some districts had not gone to the vote of the people so they did not have the ability to generate bonds.  Others were at the tax cap and could not do that. 

 

Ms. Giunchigliani answered that A.B. 137 allowed school districts to go directly to the vote of the people if they were at the tax cap to go beyond the cap for the purposes of school construction, maintenance, and rehabilitation.  She said that the proposed bills all had passed unanimously out of the interim committee as recommendations.  There was also discussion, although no legislation, to consolidate some of the more rural school districts into some of the larger districts.  They would not lose their identities but it would be recognized that they would not have the funding mechanism necessary to maintain the educational system.  The interim committee had discussed that issue a couple of times but had taken no action on it. 

 

Mrs. de Braga said that would work for sharing some of the resources but probably not for the construction because of the distances. 

 

Ms. Giunchigliani said to consider Lincoln County School District, for example.  It used to be part of the Clark County School District.  There could be something done with the local wealth equalization formula that would actually take some revenue from the urban areas to assist with smaller districts. 

 

Ms. Tiffany asked how the 3 percent had been arrived at and what would be the total.

 

Mr. Martin R. Johnson, President of the Johnson Consulting Group, Financial Advisors to State and Local Governments, said the 3 percent was arrived at in several different ways.  The goal was to set aside money that over the useful life of a school facility, which was approximately 30 years, would approximate the replacement cost. 

 

Ms. Tiffany asked if the 3 percent was standard or derived from some sort of a formula that she was unaware of. 

 

Mr. Johnson said that in talking to a few people, he had received a couple of different answers.  Some people had suggested a figure as high as 3.5 percent.  Ms. Tiffany asked what other states used.  Mr. Johnson said that governments were not required to account for depreciation and that was essentially what the 3 percent represented.  In corporate finance, depreciation was a line item on the income statement and was accounted for on the balance sheet.  School districts were not required, under accounting principles, to account for depreciation.  The 3 percent would fund depreciation.  Water and sewer systems could build depreciation into their rate base.  School districts did not have that ability because well over 80 percent of the Distributive School Account was spent on salaries and benefits and by the time they got to the amount of money left over for replacing roofs, floors, and heating and air conditioning systems, etc., there was no money left over. 

 

Ms. Tiffany stated that the bills would apply to all 17 school districts and she asked if districts that had not reached the property tax cap should be exempted.  She suggested that the drawback might be that there would be inequities between districts.

 

Ms. Giunchigliani said the proposal would apply to all 17 counties because a county could in the future hit the tax cap and to come back and revisit the issue every time another county hit the tax cap would be cumbersome.  There could be qualifiers allowed but that was already in statute.  Even though it might affect some districts more than others, she thought it was time to put something on the books that was equalized and based on need once counties hit the tax cap.  She said that Clark and Washoe Counties were not at the tax cap but there were nine counties who were at the cap or within a few pennies of the cap.  With the growth of some of the counties, there would be other counties hitting the tax cap. 

 

Ms. Giunchigliani stated that schools were not depreciated.  State facilities also were not depreciated although they should be.  It was common practice in the business world to depreciate buildings.

 

Ms. Tiffany asked if a total number had been calculated and Mr. Johnson said he did not have the number yet.  He said he would provide the number to the committee. 

 

Ms. Tiffany asked if some school districts should be broken into multiple districts as well as aggregating some districts. 

 

Ms. Giunchigliani said that had been looked at ten years ago with an interim committee as well as Senator Porter’s committee in the last four years.  She said they had not rectified the issue of the equalization of the funding formulas.  If management was not good in a larger district, she would hate to give that district smaller districts to destroy or mess up. 

 

Mr. Johnson said that one of the reasons school districts were in the situation they were in was because under state law, districts generally financed their projects with bond issues that were paid by property taxes.  They went to the voters and asked them for $10 million, $20 million, or in the case of Clark County, a billion dollars to build schools.  Those bond proceeds were used to build the facilities but then the tax rate went to pay off the bonds.  There was no money on an ongoing basis to pay for maintaining those facilities.  That was the reason why schools found themselves in the dilemma.  Without maintaining the facilities, they would not last as long, problems began to creep up, and there were things that needed to be repaired.  They would then go to the voters to ask for approval for a bond issue to fix those things.  Voters, with some sense of justification, he believed, asked themselves if that was something that should have been taken care of all along.  The facilities should have been maintained all along but the schools did not have the money to do it.  A.B. 272 made an attempt to provide a mechanism for them to get the money to provide for the maintenance on an ongoing basis. 

 

Mr. Johnson commented on A.B. 300 with the revolving fund.  There were currently two revolving funds in existence in Nevada.  One was for wastewater projects related to the Safe Drinking Water Act and also projects related to the Clean Water Act.  The concept for the revolving fund was derived as a result of the $16 million that was appropriated in the 1999 session, which was spent.  It had been spent and it had benefited White Pine and Lincoln County School Districts.  By creating a revolving fund, the money was not given to the districts but would be recycled and used by other districts as it was repaid.  That would provide as much “bang for the buck” as possible utilizing the state’s limited resources.  The concept behind the revolving fund was to provide those districts, that could least afford it, the ability to pay back a loan at either no interest or a very limited amount of interest.  Perhaps to those that could not afford it, some sort of grant would be given.  The idea was to try to facilitate local school districts generating the revenues they needed and utilizing those revenues as efficiently as possible. 

 

Mrs. Cegavske asked if there was a certain amount of money that had been designated for each site for any repairs or maintenance.  She thought those were site-based decisions on how the money would be spent.  Unfortunately, with the revolving door with the administration, the money had been used for immediate needs and then the repairs were never done.

 

Ms. Giunchigliani said that there had been a plan to set aside dollars out of the general school funding.  In addition, in southern Nevada there used to be a program where in each school facility if the lights were turned out and the computers were turned off, the school would be recognized for a percentage of the dollars saved and a portion of those dollars could go back to the facility as an incentive for having saved dollars on utilities that could go toward maintenance.  Overall, each of the districts chose what their maintenance dollars were going to be and maintenance was one of the first areas to be cut.  She said that the last time she was home, the maintenance people in her school had 12 minutes to clean a classroom.  There was no way they could clean a room in that amount of time so the teachers brought cleaning supplies and vacuum cleaners from home.  For example, if you did not keep the carpet cleaned, it would need to be replaced that much sooner.  Part of the problem was how the students felt about their school.  She had heard students refer to the school as a “ghetto” school.  It was not that the school was not doing the best that it could do, it was just that age deteriorated facilities.  A law had been passed approximately eight years ago that allowed for emergency maintenance.  The district could use a percentage out of the budget for real emergencies.  Ms. Giunchigliani said the state needed to look at depreciation for all of its facilities as it was common business practice.  It would cost money but even a ten-year plan to phase in such a program would leave all entities in better condition. 

 

Mrs. Cegavske said that she thought there were a certain amount of dollars set aside for maintenance.  Ms. Giunchigliani said that had been contemplated but not formalized. 

 

Mr. Marvel commented that this was an area where a pay-as-you-go plan could work.  It might be a cheaper way to finance projects than bonding. 

 

Mr. Johnson agreed with Mr. Marvel.  Pay-as-you-go would work for some situations but would not work in all cases.  The Elko County School District was going back to the voters to extend the 75 cents capital projects tax and they utilized the pay-as-you-go method.  They might still end up being short on an annual basis of what they needed to upgrade and repair existing facilities.  It would not solve the problem but it would provide an ongoing revenue source and it was cheaper than financing. 

 

Mr. Marvel said that Mr. Hettrick once had a bill on capital improvements where the operating and maintenance expense would be built in.  That would be part and parcel of any bond issue or any pay-as-you-go plan so that people would know what the cost would be as the project went along.  He said that he thought allowing for the depreciation was important.  He added that it should be calculated for all state projects. 

 

Ms. Giunchigliani said that the ISES Corporation report segregated the maintenance costs and reported what percentage had been set because the argument was that not only did the old facilities need depreciation calculated, the new facilities were being brought on-line with no ongoing maintenance costs built in. 

 

Mr. Al Bellister, representing the Nevada State Education Association, supported A.B. 272, which provided a 3 percent add-on to the per pupil support from the Distributive School Account.  He thought that was consistent with study after study that had been conducted in the state starting as long ago as 1964 where there was a study that came out of a legislature that said when there was a school district that had built up a significant backlog of deferred maintenance it was an indication there was not enough money in the schools.  In 1995, the Government Accounting Office (GAO) had a study that Nevada was one of the few states in the country that did not have ongoing support at the state level for school construction and maintenance.  In 1996, the Management Analysis & Planning (MAP) study made a recommendation to the legislature that a statewide system for school construction and capital outlay, similar to the Nevada Plan, be developed.  The 1997 ISES report referred to $436 million deferred maintenance needed in addition to new construction.  He added that the schools did not need more studies, they needed more money and it was needed immediately in K-12 public education. 

 

Mr. Randy Robison, representing the Nevada Rural Alliance, introduced himself.  He said he wanted to echo the comments made by Mr. Bellister.  Mr. Bellister had covered every single point of the testimony he had planned to offer.  He indicated the Nevada Rural Alliance’s support for A.B. 272 and A.B. 300.  The $60 million that came from the program set up by the 1999 legislature generally was based on need because of deferred maintenance and A.B. 272 and A.B. 300 would help a great deal with that effort. 

 

Mr. Douglas Thunder, Deputy Superintendent for Administrative and Fiscal Services, Department of Education, indicated that the department strongly supported both A.B. 272 and A.B. 300.  He had a question on A.B. 300.  With the increasing amount of attention that had been focused on school facilities, he wondered if the Department of Administration was the correct office to place the responsibility of overseeing the administration of the program.  He could see that as the years went by, there would be an increasing number of safety issues and other issues that could come into play with school facilities.  He thought that at some point, someone within the Department of Education, or somewhere else, that had the sole responsibility of oversight of school facilities should be given the authority for the program. 

 

There being no more testimony on A.B. 272 or A.B. 300, Chairman Arberry closed the hearing on A.B. 272 and A.B. 300 and opened the hearing on A.B. 350. 

 

Assembly Bill 350:  Makes appropriation for partial support of Federally             Qualified Community Health Centers that provide primary health care to             uninsured residents of Nevada. (BDR S-1203)

Ms. Vivian Freeman, Assembly District 24, Washoe County, testified on behalf of A.B. 350 which she introduced on March 13, 2001.  She had asked the Governor if he would support the use of $1 million of the $5 million that was in the budget for the low income, uninsured residents of Nevada for support of Federally Qualified Community Health Centers.  She had worked with Ms. Leslie and others and had come up with A.B. 350.  She said the discussion that had taken place on A.B. 272 and A.B. 300 had been fascinating in terms of funding for Nevada’s schools and state services.  She believed that Nevada was in a crisis situation.  The needs were there and no more studies were needed to identify needs.  Somehow the will to fund the needed projects just was not there.  She had read in the newspaper the possibility of the shortfall in The Executive Budget for the next biennium and she began wondering if the $5 million would even be there for A.B. 350.  According to Ms. Freeman, the Governor supported the bill.  It would provide increased programs and services. 

 

Ms. Freeman referred to Exhibit C that explained the purpose and benefits of A.B. 350.  She said that other states with no more resources than Nevada, such as Arizona, had done much better than Nevada had done in that area.  The Federally Qualified Community Health Centers had done a marvelous job for many years.  They had a track record of performance, accountability, and were a good place to put the $1 million.  She said she hoped that before the end of the session, the legislature could look at what funding was available and address the issues.  She had not gotten a lot of reassurance from anyone.  Ms. Freeman said she served on the Committee on Taxation and that was even less encouraging.  Ms. Freeman discussed that Mr. Beers and Mr. Goldwater sponsored a bill that would take motor privilege tax and use it to fund teachers’ salaries and that she had heard from the City of Las Vegas Budget Director that the state could take the 15 cents in property tax it received and use those dollars for funding.  That could not be done because the 15 cents was used for debt service on bonds.  She said she realized she was getting off the subject but it addressed the issue of how to fund for those types of services.  She asked for the support of the committee on A.B. 350.

 

Ms. Giunchigliani thanked Ms. Freeman for her testimony and said that the Federally Qualified Community Health Centers were the state’s safety net.  She said that now the clinics were serving clients but were not being reimbursed.  She asked if there was a “glitch” somewhere else as far as the funding was concerned as to why the clinics were not being reimbursed.  She asked if local county hospitals were taking their funding and saying that they served that population.

 

Ms. Freeman said there was a requirement in federal law that hospitals serve all patients and that if they could not afford to fund the care, it was just tough luck.  The counties very often ended up funding indigent care.  There was no safety net.  Someone eventually paid the bill, whether it was the hospital or someone else.  The clinic available in Reno was started by the medical society with funding from the City of Reno and Washoe County.  They took it upon themselves to start the clinic.  It had been run very professionally, they were very accountable, they did a great job, and they had had a struggle through the years funding the clinic.  They wrote grants and did all the correct things to fund the clinic but they found it difficult to operate without some commitment from the state.  There had been very little commitment from the state. 

 

Ms. Giunchigliani said she had heard that the clinic should have been reimbursed but they were not and she was not sure of the reason why.  Ms. Freeman said people planning on testifying on the bill might be able to answer the question.

 

Mr. Roger Volker, Executive Director of the Great Basin Primary Care Association, introduced himself and said that he represented all of Nevada’s Federally Qualified Community Health Centers.  He introduced Dr. Carl Heard, M.D., Chief Medical Officer of Nevada Rural Health Centers, Inc., and Mr. Steve Hansen, Chief Executive Officer of Nevada Rural Health Centers, Inc.  Mr. Volker referred to Exhibit C and said there were 350,000 to 400,000 uninsured persons in the state of Nevada according to a study that had been completed last year.  He shared with the committee that the study was being updated currently and would be published again around May 1, 2001.  The association was working with the state Medicaid Division and the Health Division to update the study.  The figures were not available at the time of the hearing but Mr. Volker believed the trend would show that there was a growing uninsured population in the state of Nevada and that would be a long-term, significant problem.  The association had detailed a list of the services that A.B. 350 could provide for the federally qualified health centers that in turn would benefit the uninsured population.  Every dollar that could be recaptured in the process would magnify itself in terms of the services that were provided to the target population.  There was a critical access problem for the 350,000 people throughout the state, not only in the rural counties where there were enormous health access issues, but also in the heart of Clark County where there were a very limited number of clinics and an enormous amount of people who were accessing health care in less than appropriate ways and at costs which were extraordinary. 

 

Mr. Volker shared that there were other people in the state who were addressing the problem.  The issue of the uninsured population was on everyone’s radar screen.  The Clark County Health Access Consortium, which was a group of 100 community leaders, had been working for almost a year on a strategic plan.  Their number one goal was the creation of viable community health centers throughout Clark County to address the issue.  Clark County had put up some dollars and committed on a four-year program to initiate a new clinic at the Cambridge Center.  The $250,000 per year that had been committed would not cover the cost of creating a new center.  The association had resources from other federal and local providers but currently the state of Nevada did not contribute to the issue and the association believed that a partnership between state, local, and federal resources was the healthiest way in order to maintain and increase the scope of the clinics so that more people would have access to the safety net providers. 

 

Mr. Volker said that the state of Arizona spent approximately $9 million of state resources yearly on federally qualified health centers and had 90 sites with approximately 2.5 times the population of Nevada, who had 15 sites.  Nevada was at the end of the process in terms of whether or not it was able to access appropriate resources for the uninsured. 

 

Mr. Volker said the Bush administration had made it very clear that it supported federally qualified health centers as the way to deal with the current health care issues.  If Nevada was to be competitive for the dollars that would become available in the next few years, Nevada, as a state, would have to be willing to put up some of its own resources to match that effort. 

 

Ms. Giunchigliani asked whether the clinics were being paid for serving Nevada’s uninsured population.  She also asked if the term “federally qualified” meant that the facility had licensed physicians, etc.  She asked because she had a bill that would be heard in another committee regarding adding safety net providers to the Health Maintenance Organization (HMO) lists.

 

Mr. Hansen said the clinics received funding through patient revenue on a sliding-fee basis.  They received grant money from the federal Public Health Service Act whose mission was 100 percent access.  In the 13 sites across the state, approximately 50 percent of the patients seen were on a sliding fee.  Basically, they did not have insurance and they fell below the 100 percent poverty level. 

 

Mr. Hansen said the bill would provide a balancing act between providing health services to the uninsured people of the state and those that had access issues.  Some of the centers were located in frontier sites and the issue was not that they served the socio-economic distracted but those without access to care.  The centers were the only providers in some of the areas.  Mr. Hansen said that he wanted the committee to know that the only area where the Nevada Rural Health Centers operated clinics where there were hospitals was in Las Vegas and Carson City.  The remaining ten sites did not have hospitals in their communities.  Mr. Hansen said the Nevada Rural Health Centers had partnerships with the counties where some of the clinics were located that helped sustain the ability to provide medical care.  The low population alone in some of the rural sites made it economically difficult to provide care; the partnership was needed to continue making medical care available in rural areas. 

 

Ms. Leslie said that the earlier testimony was that there were 15 clinics and Mr. Hansen had said 13 clinics with Nevada Rural Health Centers.  She knew the Health Access Washoe County Community Health Center (HAWC) in Reno would be number 14 and she wanted to know what number 15 would be. 

 

Mr. Hansen said the HAWC Clinic had two sites.  One was a homeless site and the other was the primary care site in Reno. 

 

Ms. Leslie said her understanding was that the Nevada Rural Health Centers provided different services than a hospital would provide.  She believed the health centers would provide more primary prevention and acute care, more of a clinic-type atmosphere as opposed to an emergency room.  She asked if her understanding was correct. 

 

Dr. Heard confirmed that Ms. Leslie was correct that the Nevada Rural Health Centers delivered primary health care services.  Those primary health care services usually related to things that would be encountered the first time a person saw a provider.  They tried to proactively treat and reach out in the community to treat patients who had chronic medical problems that might not be diagnosed such as hypertension, diabetes, emphysema, asthma, and a variety of primary care illnesses.  What was seen in many of the communities served was that patients without ready access to primary health care services ended up with a complicated case and often hospitalization at a much greater cost to the taxpayer than if they had come in earlier for those diseases.  They were trying to build strength within the community health center network of the state so that they could afford to consistently expand their services and increase access for the patients.  Dr. Heard said Las Vegas alone could support 10 or 12 community health centers.  There was a great need for expansion. 

 

He distinguished between monies set aside for the hospitals and monies set aside for the clinics.  There were indigent care dollars raised by each county and made available to county hospitals to offset their losses on the inpatient side of caring for patients that had no money.  There was no professional component to that and there was no outpatient or primary care component to those dollars.  On the other side of that, in virtually every case that the clinics had approached a hospital, they said it was in their best interest to stop non-emergent, unfunded utilization of the emergency rooms.  The hospitals did often work cooperatively with the clinics.  He had been practicing medicine for approximately 15 years and most of that time had been spent working for community health centers.  The successful community health center systems within the region or across the nation required consistent local support.  That meant that the hospital down the street supported the community health center, the local physicians understood what it was that the community health center did, and that the community health center was not there to compete.  It also required consistent county support because often there were some indigent care dollars that were available or could be made available.  It required consistent state support and Nevada had yet to develop a mechanism for consistent support of community health centers.  Finally, Nevada Rural Health Centers was a Federally Qualified Community Health Center and that allowed them to apply for grant dollars from the federal government.  Representatives of the federal government had told Dr. Heard in conversations he had had with them that they knew they were the largest or sole supporter of indigent care services in the state of Nevada.  They were looking to the state of Nevada to support that. 

 

Ms. Leslie said her concern was that the state was not allocating enough.  She said that $1 million of the $5 million in the budget was set aside to try this different approach to serving the uninsured.  Rather than an insurance approach, it was a more direct care approach.  She noticed that in Exhibit C there was a list of things that the money would be used for.  She asked how Nevada Rural Health Centers would decide what the priorities for spending the money were.  She was interested in the Centers’ plan to build new sites in Lyon, Nye, Churchill and Mineral Counties.  She said she knew those counties were terribly underserved and she asked Mr. Volker to describe the plan.

 

Mr. Volker said with the support of the federal government, Nevada Rural Health Centers had been able to do some community development activities.  They had a consultant that had met with various stakeholders in the area that ran from Hawthorne through Lovelock.  The consultant had looked at issues for the underserved and the uninsured.  That would be a process that could eventually lead to an application to the federal government for more resources.  If there were 90 centers in Arizona, Nevada was not getting its fair share.  In order to make that application, they had to show that they had also developed local state support for creating the match.  The planning process used by the Clark County Health Access Consortium was a process that the Great Basin Primary Care Association had been facilitating for nine months.  It had developed a strategic plan much the same way and was now beginning to look at other resources outside the state of Nevada.  Every time that was done, the first question asked was, does the state of Nevada support this and a verbal support was not adequate.  The other question asked was whether the clinic could be sustained for long-term viability.  Both of those questions were on the table in terms of gathering the resources.  There were strategic planning processes in place that had identified where and how much was needed in order to make it happen.  Representatives from the Nevada Rural Health Centers were saying the resources were necessary and he appreciated that Ms. Leslie thought the resources might not be adequate.  However, Mr. Volker said he would be appreciative, in representing the patients who accessed the centers, for some level of support.  Those dollars could be leveraged and that was also an issue. 

 

Mr. Dini commented that northern and western Nevada were underserved in the dental services area.  There were only a couple of dentists in northern Nevada that did Medicaid treatment.  He asked if any dentists would be made available.  He also wanted to know if there would be a mobile unit that would go around the state or where the services would be located. 

Mr. Volker said that he shared Mr. Dini’s understanding of how critical dental access needs were, particularly in rural Nevada.  He said that it had been a very difficult plight to get local dentists to take Medicaid, Nevada Check Up, or other uninsured patients.  Throughout the country, the most successful dental access programs for low-income families were those that were housed at federally qualified health centers.  If they were able to gather more resources, they could open some dental clinics that would be associated with some of the primary care clinics now located in some of the rural areas.  Also, dental equipment could be added.  There were some initiatives going on in the legislative process that would allow for more dentists to be licensed specifically to serve the uninsured population.  Mr. Volker supported that but it would have to be a combination.  If they were able to bring in dentists but had no place for them to practice that would defeat the purpose.  He said he was of the belief that if you built it they would come.  Currently, the appropriate facilities did not exist in many parts of the state for a dentist to practice. 

 

Dr. Heard stated that the Nevada Rural Health Centers, Inc. had an interest and a commitment to expansion and to include dental services.  There was a strong expression of interest in Carson City and Las Vegas to start dental care programs for indigent and uninsured patients.  The difficulty that was faced by non-profit community health centers was that they were constantly cash strapped.  In order to expand into dental services, it was a much more cash intensive effort than starting a family practitioner’s office.  It would cost approximately one-quarter of a million dollars to acquire the equipment necessary to support a dentist in operation.  As a community health center, they were constantly working on the margin of being able to survive because they saw every patient regardless of ability to pay.  There was no excess capital that could be invested over a period of time to further expand services.  That type of money would allow cash-strapped organizations to apply some of that money against some of the patients they had cared for and not received any reimbursement.  They would then be able to afford to expand services to include dental services.  Dr. Heard said that he attended annual meetings with other medical directors and chief medical officers in the region that included Nevada, California, Arizona, and Hawaii.  Virtually every one of those community health centers had a dental program associated with it.  Out of the 15 sites currently in Nevada, only 1 site had been successful in establishing a dental program and that was HAWC. 

 

Barbara L. Hunt, Washoe County District Health Officer, introduced herself and spoke in support in A.B. 350.  She referred to Exhibit D that was a letter to the committee from Ms. Hunt supporting A.B. 350.  She was disappointed that the funding was only $1 million for the entire state, however, it was an excellent way of directing funds toward the public health issue of access to health care if there was not universal health care coverage.  Federally Qualified Community Health Centers (FQCHC) were an integral and essential part of the public health as well as the medical health care system, especially in Washoe County.  Washoe County had one FQCHC and that was HAWC.  It was by far the largest provider of primary health care services to the underinsured and uninsured in the community.  HAWC was depended upon to serve the high risk and vulnerable populations.  She hoped that with the funding, HAWC would be able to expand to serve even more clients than the 12,500 currently served in the last year.  HAWC had made a significant contribution and positive impact on Washoe County.  As District Health Officer for Washoe County, she could not suggest anything that would better address the public health problem of access to health care than appropriating state funds to support well-run Federally Qualified Community Health Centers such as HAWC. 

Ms. Leslie said she had been in the HAWC Clinic and she thought it was an amazing place.  It was very high energy and served many people.  She asked where those families would go if the HAWC Clinic did not exist.

 

Ms. Hunt said that was a problem because HAWC was the largest provider of services to the high-risk population.  In Washoe County there were a couple of other resources, one of which was St. Mary’s Neighborhood Clinics, which were bulging at the seams.  She was not sure of the number of patients seen but St. Mary’s could not begin to see the number of clients that were seen by HAWC.  People with incredibly low incomes, less than $600 per month income, qualified for the Washoe County Clinic at Washoe Medical Center.  That option was there but not for anyone who was in the category of the working poor. 

 

Ms. Leslie said that children with earaches would end up in the hospital emergency rooms and Ms. Hunt agreed. 

 

Ms. Freeman said that in the interim there were meetings held regarding the use of the tobacco settlement money and there was a focus on the use of those dollars reaching the rural counties.  Not only the $1 million specifically targeted for rural areas but in the final appropriations as well.  At least the legislature was aware of the problems and trying to do the best it could on that. 

 

There being no further testimony on A.B. 350, Chairman Arberry closed the hearing on A.B. 350 and opened the hearing on A.B. 515. 

 

Assembly Bill 515:  Makes appropriation to Department of Human Resources             for assistance in operation of HIV/AIDS clinics in Reno and Las Vegas.             (BDR S-1411)

 

Mr. Don Hataway, representing the Budget Division, introduced A.B. 515.  He said there had been testimony presented regarding various underfunded and underserved populations in Nevada.  During the Governor’s analysis of that particular problem, he identified through discussions with legislators and health care providers that numerous HIV/AIDS issues existed in the state.  The bill would appropriate $2,000,000 over the upcoming biennium; $1,000,000 for northern Nevada and $1,000,000 for the southern part of the state. 

 

Jerry Cade, M.D., Director of the Wellness Center, University Medical Center’s AIDS Outpatient Clinic, introduced himself.  He said he was a proud constituent of Assembly District 10.  Dr. Cade said that his family members were educators and there was nothing more dear to his heart than health and education and he could not think of anything more important for a growing state like Nevada than to invest in both health and education as they were tied to progress and growth. 

 

Dr. Cade said he supported all the bills that had been presented at the hearing but he was there specifically to support A.B. 515 that directed dollars to AIDS care.  He said that he came to Nevada through the Public Health Service to a federally qualified clinic in North Las Vegas.  That was how he ended up in Nevada and he supported their incredible work.  Dr. Cade moved to Nevada 20 years ago to do 2 years of public service, planned to leave the state, and was still in Nevada and did not plan to leave.  He added that he was a member of the Clark County Health Care Consortium and was working on coordinating services so that the care dollars would not go for duplicate services.  Health care professionals were all working together to provide the care needed by all people who had any kind of disease. 

Dr. Cade stated that it was an interesting time for those who had been doing HIV care.  It was June 7, 1981, nearly 20 years ago, that the Centers for Disease Control (CDC) reported the first 5 cases of HIV disease and thus began the AIDS epidemic in our country.  Dr. Cade’s clinic opened in December 1986, with five patients.  It was a partnership at that time.  His medical partner and he had been providing medical care for free because no one had money at that time and they decided to provide the care, time, and energy if the University Medical Center (UMC) would support them with the cost of the laboratory data and other things.  They opened their clinic in December 1986, to make sure that no one went without medications.  They provided HIV care to 1,744 people as of the end of December 2000, at UMC’s Wellness Center.  Probably the most major change came in December 1995, when protease inhibitors were released.  For Dr. Cade, the first ten years of the epidemic was spent signing death certificates.  He was a hospice doctor.  All he could do at that time was make sure that someone did not die alone but that had changed dramatically.  He thanked the committee for its allocation during the 1997 legislative session for an appropriation for medications.  He did not sign death certificates very often any more.  He was grateful for the changes in the last five years.  He said that with good medication the viral load could be kept negative and transmission would be less.  There had been no new cases of pediatric HIV disease in Clark County in over 2.5 years because they had been able to get the mothers into care and the mothers had been provided with medications.  He said that presented a wonderful challenge.  He had a patient who was a friend whose partner had died.  They had built a business in Las Vegas and had saved money.  After the partner died, the friend said he had nothing to live for and asked how many years he had left to live.  He said that he wanted to time it so that at the five-year mark his money would be gone and he would be ready to go.  Dr. Cade said he tried not to do that, as he had stopped playing God some time ago, but he estimated the time left for his friend.  The man took all of his money out of the bank, started spending it, and about 2.5 years ago he got really healthy and he was not going to die.  He had spent over one-half of his money.  Dr. Cade said that was a much better problem to deal with than the problems he dealt with in the early days. 

 

Dr. Cade said there were different problems in the north and the south.  He heartily supported Dr. Trudy Larsen and her clinic in northern Nevada.  It was small and compact and was the way Dr. Cade’s clinic used to be two years ago.  Everyone was on top of each other and they did a wonderful job of getting along anyway.  Their administrative offices were in a different location from their clinic and that clinic needed financial support. 

 

The problem was different in Clark County.  They had grown rapidly and had difficulty keeping up with infrastructure needs.  The patients told him that it took three hours to get from Henderson to the clinic.  It took them two and one‑half hours to get from west Las Vegas to the clinic.  There were great drugs available to keep people alive but it was difficult to get them to the patients.  He referred to a real patient that preferred to remain nameless.  She was a 23‑year-old single mother with three children and it was difficult to take a bus in Las Vegas in August to get to the clinic to get the medications.  Beginning two years ago, the clinic began to take the health care out into the community.  Rather than to centralize, they had decentralized.  The Wellness Center was still the focus of care but in 1999 they received federal dollars and started with the Community Health Centers of Southern Nevada, which at that time was the federally qualified health care center.  They started seeing patients in west Las Vegas at that site.  They saw exactly what Dr. Cade anticipated they would see and that was people who knew they were positive who just could not make it to the clinic.  They had a host of other things going on or for whatever reason they did not want to travel for care.  Dr. Cade’s goal was to take the health care out into the neighborhoods instead of keeping it localized at the Wellness Center.  Dr. Cade started a clinic in Henderson in August 2000 with a partnership with the District Health Office.  He had discussed a partnership with the Nevada Health Center representatives.  Dr. Cade said he wanted to spend as few dollars as possible to bring care to the community but they had created a five-year plan that included various areas of Clark County in order to provide community-based care.  Dr. Cade said he had started seeing patients two weeks before at the new Enterprise Health Care and Dental Center in Las Vegas.  He said it was a wonderful facility in partnership with the Nevada Health Centers, the dental school, and a host of other community support agencies.  The dollars provided in A.B. 515 would help Dr. Cade accomplish his five-year plan to provide health care at the places where the patients lived. 

 

Mr. Goldwater thanked Dr. Cade for all his work and said that he was a hero.  He asked if there was anyone in Dr. Cade’s practice or anywhere in the state that went without drugs because they could not afford them.  Dr. Cade stated that since the state allocated dollars for medications, the waiting list had never exceeded two to four weeks.  No one had gone a year without medications since the state provided additional funding for medications.  He described that as a wonderful “catch 22” for the clinic.  If there were more people getting care, there would be more people needing medications.  It was a potential problem.  Part of the reason there was no waiting list was because some people just did not make it there.

 

Mr. Goldwater said that A.B. 515 split the funding $1,000,000 for southern Nevada and $1,000,000 for northern Nevada.  He said that he knew that there was a great need in the north as well as the south for financial assistance.  He asked if the allocation was appropriate or should it be reallocated based on population or some other methodology.  Dr. Cade said he would support whatever Dr. Larson suggested.  Dr. Cade said three-quarters of the patients were in southern Nevada.  He said he understood that a certain number of dollars was needed for infrastructure regardless of the number of patients.  He described a very cordial working relationship between the northern and southern clinics. 

 

Mr. Goldwater said that when one-shot money was appropriated, the money sometimes created a need for additional money.  He asked if that was a problem.  Dr. Cade said that he understood that the money was a one-shot appropriation only although he would be glad if the legislature changed its mind. 

 

Mrs. Cegavske thanked Dr. Cade.  She asked how the patient, “Mikee,” was doing.  Dr. Cade answered that he was doing very well.  He was on an experimental protocol from the National Institutes of Health (NIH) with T-cells higher than he had ever had before.  Dr. Cade said that Mike had appeared before the 70^th Session of the legislature and was now 12 years old.  Mike was one of the first children treated at the clinic and he was expected to have a five‑year life expectancy.  When he was adopted, his mother was asked if she could deal with the fact that he would only live to age five.  He was now 12 years old, healthy, and now other issues of 12- and 13-year old young boys had to be dealt with. 

 

Mrs. Cegavske said that was wonderful and Dr. Cade had done so much for Mike.  She said that Mike traveled to Washington, D.C. on a regular basis and was now a wonderful young man. 

 

Mrs. Cegavske asked if there was a decline in the federal dollars available for funding AIDS clinics.  Dr. Cade said he had not seen the decline yet but there were several pots of federal money under the Ryan White Program.  There used to be seven sources of money but that had been reduced to six sources.  Dr. Cade said the program received money from several of those sources.  The dollars had not declined yet because of the rising population.  Federal dollars were tied to numbers. 

 

Mrs. Cegavske said she had noticed in the media that there had been a decline in AIDS funding and the money was starting to go to other projects because of the successes that had been achieved.  She was concerned that the federal dollars not be reduced. 

 

She asked how closely Dr. Cade worked with drug and alcohol programs.  Dr. Cade said that was a good question.  The most rapidly increasing group of HIV infected individuals was injection drug users.  They had known that for a long time.  Dr. Cade said he was BADA-certified and prescribed addiction medicine.  He said that his clinic gave some of its dollars to BADA-certified sites but they also tried to create a “one stop shopping concept” so that although some of the clinic’s drug and alcohol counselors worked for another entity they actually came to the clinic’s site.  In 1998 the clinic moved across the hall from Aides for AIDS of Nevada (AFAN) and several other groups had moved in.  Many of the clients took the bus and the services were set up in one location to make it easier on the clients.  Dr. Cade was attempting to set up a “one stop shopping concept” in multiple locations. 

 

Trudy A. Larson, M.D., Co-Medical Director of the Northern Nevada HIV Outpatient Program, Education and Services (HOPES), introduced herself.  She appeared before the committee to provide information regarding A.B. 515 and the clients for whom HOPES provided both medical care and supportive services.  She provided Exhibit E to the committee.  Since opening its doors as HOPES, which was a community-based 501(c)(3) organization that was derived from the community, the public/private partnership had been a marvelous experience for everyone involved.  The clinic opened May 1997, with a caseload of 165 patients that had grown to 540 infected individuals from northern Nevada.  The clinic did not just serve Reno; it served northern Nevada and parts of California.  The three-fold increase made the clinic one of the fastest growing clinics among the 270 Ryan White Title III funded sites nationwide.  Like Las Vegas, they were seeing a huge increase in the diversity of the patients as well as numbers.  There was increased representation from many of the minorities, increased patients with mental health problems and drug addiction problems, and increased diagnoses in women during pregnancy.  Dr. Larson said her specialty was pediatrics and she had been very active in the treatment of pregnant women.  She said her clinic had had 4.5 years without an infected child born and she was very pleased about that.  The increasingly diverse community required much more sophisticated services. 

 

Dr. Steven Zell and Dr. Larson had been involved with the clinic since its inception in 1986 when it started as the Early Intervention Clinic at the Washoe County District Health Department.  That year, the clinic expected to see 50 patients and they saw 100 patients instead.  That gave Dr. Larson insight into the undiagnosed need in the community.  They could not do a lot because they did not have worthwhile medications and so she, like Dr. Cade, spent a great deal of time saying goodbye to patients.  Now she said she was able to say hello to patients routinely, and that was very nice.  From the small start, the clinic now had five half-day physician clinics provided by four doctors.  Dr. Zell and Dr. Larson were the primary clinicians.  They took “call” all year around.  The clinic also had a full-time physician’s assistant who saw the walk-ins so that they could be seen with acute illnesses.  There was a pharmacist housed next door to the clinic that provided a marvelous resource to the patients and the doctors.  Prescriptions could be mailed out so patients did not have to go to the clinic to get their medications.  The clinic had staff on-site including a registered nutritionist, two registered nurses, two medical office assistants, and an office manager.  The clinic site was less than 1,500 square feet.  At the site, primary medical care was provided, specialty HIV-related services, nursing assessment intervention, and client referrals.  Referrals were made to physicians, home health care, drug information counseling, access to clinical trials and research studies which were always ongoing in the clinic, dental and oral health care, insurance assistance, and nutrition counseling.  During a typical week, over 100 clients received services at the clinic. 

 

The clinic’s administrative offices and meeting rooms were located two miles away.  Those were for northern Nevada HOPES and also for the northern Nevada HIV/AIDS/STD Planning Council.  The clinic had recently purchased the site where the administrative offices were located.  Also located there were the food pantry, client services program, case management and prevention education, and outreach activities.  The clinic offered HIV counseling and testing there as well.  That had been a very good service because many of the newly diagnosed had come in with others who were seeking services and that was how medical treatment was started early and better medical care provided.  Supportive services included intake, case management, and acuity level assessment.  Some patients had to be hospitalized immediately when they came in to the clinic.  The clinic had crisis intervention and counseling and that was probably used more than there was really time for.  They also had support groups, mental health, substance abuse assessment and referral and vocational counseling.  Dr. Larson said that vocational counseling was a growing support service.  Supplemental food programs that included grocery vouchers and home-delivered meals were provided.  They also provided assistance with transportation, housing, utilities, and emergency assistance.  She said all of the support services were necessary as a part of HOPES because there used to be other non-profits in the community that provided many of the services but because of the increase in patient load and diversity of patients, they were unable to cope with the size of the group needing assistance.  Now those services were provided through HOPES.  They had created a “one stop shop” in a sense although the administrative offices were two miles away from the clinic. 

 

Dr. Larson said the funding requested would provide clinic space that was adequate for the growth.  The clinic had applied for Ryan White Title IV funding.  They currently had Title II and III funding.  The funding would be used to support the services to the 437 individuals.  HOPES had recently been funded through the Bureau of Alcohol and Drug Abuse to provide HIV prevention education, counseling and testing, and TB testing at the BADA sites.  They provided HIV-related medical care to those infected with HIV disease at the Nevada State Prison.  A nurse and a physician assistant went to the prison weekly to see patients and were able to effectively arrange discharge planning so they did not miss any medications as they transitioned out to the community.  It was a model system.  In addition, HOPES provided research planning and medications for the Washoe County Jail so that the clients that periodically were incarcerated did not interrupt their medications.  The medications were available, the big challenge was to get them to the clients so that they could maintain their viral load under good control so they would remain healthy and decrease the risk of transmission and that was an essential public health issue.  Dr. Larson said HOPES had been very successful in receiving grant funds but those were almost always exclusively for direct services.  If they were lucky, there would be a 10 percent set aside for administrative costs.  HOPES could not fund a site without decreasing money for those services.  They outgrew their original site within two years and they had filled the second site absolutely to capacity.  Dr. Larson said HOPES had grant funds for operating expenses but there was no funding for purchase or construction of a facility.  Dr. Larson said they had worked very closely with other providers so that services were accessible but were not duplicated.  As long as there were multiple diagnosed, vulnerable, and at-risk populations needing specialized services, she saw nothing but an increased need for the type of care and services that HOPES provided. 

 

Dr. Larson said that many people had been with AIDS since it first started, and she saw her first AIDS patient in 1981, and we’re “here ‘til it’s over.”  In that time period, she needed to be able to provide the services that ensured health and productivity.  She complimented the legislature for past funding.  The funding had made a significant difference in keeping the patients healthy and going back to work.  Instead of retirement planning, HOPES was doing vocational rehabilitation because the patients were going back to work.  It had been a marvelous thing to see over the last few years and it could not have been done without the assistance of the legislature. 

 

Ms. Leslie thanked the Governor for including the funding in The Executive Budget.  It had come up in discussions regarding the surplus and he wanted to set aside $50 million for health concerns.  Ms. Leslie said she was unsure that it had come out in the testimony what the $1 million would be used for.  The $1 million would be used to build a new clinic and consolidate the administrative offices with the clinic.  Ms. Leslie asked how the $1 million had been determined.

 

Dr. Larson said the HOPES board looked at the amount of money it would take to build, staff, and equip a clinic.  She was anticipating primary care services for the families of the patients as well and that was what Title IV funding would do.  It would cost approximately $1 million for the building and the equipping of the building.  There would also be site issues such as putting in the parking lot.  The $1 million would be a one-time expense and there were already operating funds in place to be able to keep it going.

 

Ms. Leslie said that the Governor wanted one-time infusions into the community.  She asked Dr. Larson where the clinic was located and Dr. Larson said it was located in what used to be a private doctor’s office near Washoe Medical Center.  It had one hallway down the center of the clinic and it was necessary to turn sideways to pass through the hallway. 

 

Ms. Leslie pointed out that the HOPES administrative offices were located in the old Governor Sparks mansion.  Dr. Larson said the building was an historic landmark.  Through community volunteerism it had been “spiffed up” and looked very beautiful.  It was a credit to the environment and it was located close to many of the clients. 

 

Ms. Leslie reiterated that it would be a one-time investment in the community that would last a long time.  HOPES would not be coming back asking the legislature for more money. 

 

Dr. Larson said that was correct and that was why the plan included provisions for all of the growth foreseen in the future.

 

Mr. Parks disclosed that he was a board member of the state’s largest and oldest HIV/AIDS non-profit organization, Aides for AIDS of Nevada (AFAN).  Regarding its client base, AFAN served approximately 2,000 clients, approximately 1,100 of which were active clients or those who came in to access services on a routine basis.  The gender breakdown for AFAN was approximately 65 percent male and approximately 35 percent female.  Regarding ethnicity, 40 percent were Caucasian, 40 percent were African American, and the remaining 20 percent were primarily Hispanic with some Native American and some Asian included.  Mr. Parks’ opinion was that the highest unmet needs were dealing with persons of color. 

 

Ms. Barbara Hunt, Washoe County District Health Officer, identified herself for the record.  She referred to Exhibit F that was a letter from her to the committee in support for A.B. 515.  She emphasized that the $1 million one‑time funding was for a building to consolidate services all at one location.  She served on the board of directors for HOPES and had played an instrumental role in the development, along with Dr. Larson and many others in the community, of northern Nevada HOPES as it was transferred from the District Health Department to the community.  The results were far beyond her wildest dreams in terms of the ability of that program to grow and prosper and serve the community with an incredible array of comprehensive services.  In her role as a member of the board and having worked with the clinic since its inception, she was well aware that the director, Pauline Fitzpatrick, was very able.  The District Health Department provided $100,000 per year to northern Nevada HOPES to assist with the administrative expenses.  It had been pointed out that the many grant funds they received generally did not provide for administrative services.  That was an indication to the committee of the faith in the organization and the belief of its importance to the community.  Northern Nevada HOPES paid $1 per year rent to Washoe Health System for its space but that agreement would expire in less than one year.  If HOPES had to pay rent or purchase a building it would take a great deal away from their ability to provide direct services.  She appreciated the fact that A.B. 515 had been introduced and urged that the committee support it. 

 

Gwen Taylor, Administrator of the AIDS Cultural Community Education Program and Training (ACCEPT), introduced herself.  She said ACCEPT primarily did AIDS prevention for the African-American community but would talk to anyone who came to their prevention classes.  She said that she wanted the committee to know that the HOPES organization was also a fiscal agent for Centers for Disease Control (CDC) funding that came to the state.  Not only did HOPES do everything that Dr. Larson said they did, they also acted as the fiscal agent for the small amount of funding that ACCEPT received for outreach.  ACCEPT was started four years ago, with no funding, through their church.  Now, it was a separate 501C3 organization.  ACCEPT received over $20,000 in funding in 2000 that came through the HOPES fiscal agent.  Ms. Taylor described ACCEPT’s latest program, Prison Outreach Prevention Program (POPS), as a program where Ms. Taylor’s husband went to the prisons and talked to the African-American men having sex with men (MSMs).  She said that without HOPES, her organization would have no hope and she urged the committee to pass A.B. 515. 

 

Mr. Joe Edson, representing the Progressive Leadership Alliance of Nevada, introduced himself and said he supported A.B. 515 and urged the committee to pass the bill.  He said he was also speaking as a member of the National Association of Social Workers where he chaired a committee panel at a recent conference addressing several gay and lesbian issues.  Specifically, one of the panel members addressed the HIV infection rate where there had been indications of an increase of infection rates in the San Francisco area, particularly among youth who thought of themselves as invincible.  There was a bit of complacency about HIV infection rates given the idea that there may, in fact, be a cure with the great success of the protease inhibitors.  Part of the concern was continued outreach and education of those groups on the infection rates.  Mr. Edson said that he had been involved with the HIV issue since approximately 1987 in Ohio when he served on the Dayton Area AIDS Task Force and was trained in buddy training.  When he was pursuing his master’s degree in social work in 1986 he applied for an internship with Nevada HOPES.  He knew they were cramped for space because they could not take free labor as they had no space for Mr. Edson to work.  The need for a consolidated clinic in northern Nevada was sorely needed, according to Mr. Edson. 

 

There being no further testimony on A.B. 515, Chairman Arberry closed the hearing on A.B. 515 and opened the hearing on A.B. 520. 

 

 Assembly Bill 520:  Makes appropriation to Governor’s Advisory Council on             Education Relating to the Holocaust for continuation of its educational             programs. (BDR S-1434)

 

Mr. Don Hataway, representing the state Budget Division, introduced himself and said that A.B. 520 had been included in The Executive Budget.  It represented the Governor’s commitment to continue funding for the Governor’s Advisory Council on Education Relating to the Holocaust.  The amount of funding, $75,000, was the same amount of funding that had been appropriated by the 1999 legislature. 

 

Ms. Giunchigliani said she believed the Council had spoken with the Governor regarding putting the appropriation permanently into the budget of the Department of Administration so that she would not need to propose a one-shot appropriation each legislature.  She asked Mr. Hataway to clarify with the Governor why it was reverted back to a one-shot rather than included automatically in The Executive Budget. 

 

Mr. Hataway said there might have been some confusion on the issue.  The Governor’s commitment was to continue the funding.  For the next biennium, the most appropriate place was the one-time surplus dollars.  The commitment was there to continue the funding and next time they would look at whether it should be included in the budget account that required a hearing or as a one‑shot appropriation. 

 

Ms. Giunchigliani asked Mr. Hataway to ask if there would be objection to putting it into a line item in the budget rather than a one-shot appropriation.  It did not get funded for approximately four years because no one caught it.  It would save everyone time and money if there was a commitment to the funding. 

 

Mr. Hataway said that the Governor had made the commitment to catch it and initiate the one-shot funding.  Ms. Giunchigliani said one-shot meant it would go away and if someone did not remember it next session it would not be funded.

 

Mr. Hataway said there was no guarantee that just because something was included in the budget as a line item it would continue to be funded.  Ms. Giunchigliani said that at least she would know to watch for it if it was in the budget as a line item. 

 

There being no further testimony on A.B. 520, Chairman Arberry closed the hearing on A.B. 520 and opened the hearing on A.B. 529.

 

 Assembly Bill 529:  Makes appropriation to Department of Human Resources             for software and computer equipment for Nevada rural health             communications system. (BDR S-1368)

 

Mr. Carlos Brandenburg, Ph.D., Administrator of the Division of Mental Health and Developmental Services, introduced himself.  He supported A.B. 529 that made an appropriation of $279,000 to the division for the Nevada rural health communications system.  The current equipment was out of production, difficult to maintain, and unsupported by the original vendor.  The one-shot appropriation would allow the current analog communication line equipment to be converted to digital equipment. 

 

There being no further testimony on A.B. 529, Chairman Arberry closed the hearing on A.B. 529 and opened the hearing on A.B. 530.

 

Assembly Bill 530:  Makes appropriation to Department of Human Resources for             Welfare Division’s telephone system. (BDR S-1370)

 

Mr. Mike Willden, Administrator, Welfare Division, introduced himself and provided Exhibit G to the committee.  He said that A.B. 530 was included in The Executive Budget and requested an appropriation for $67,887 to be used for two purposes.  First, $13,315 would be used for a fingerprint background check program for division employees.  There was a law passed some time ago, Nevada Revised Statute 179A, that placed some liability on the Welfare Division if it did not do criminal background checks on employees who had access to children’s records.  They had begun a program recently where new employees must go through the background check before they were hired but existing employees had not been background checked.  The allocation would allow that program to be implemented.  Second, the other $54,572 included in the one-time appropriation would be used to replace and upgrade telephone systems in the division.  The telephone systems were upgraded in southern Nevada and the telephone systems in the central office and rural offices would be upgraded under the proposal.  It would be a seven-year lease purchase proposal. 

 

There being no further testimony on A.B. 530, Chairman Arberry closed the hearing on A.B. 530.

 

Mrs. Cegavske introduced two students in the audience, Blake and Angela.  They were from Las Vegas and Blake attended Bonanza High School and Angela attended Durango High School.  They were there to spend the day with Mrs. Cegavske. 

 

BUDGET CLOSINGS

 

DMV, SALVAGE WRECKERS/BODY SHOPS – BUDGET PAGE DMV-45

 

Mr. Mark Stevens, Fiscal Analyst, told the committee that there were adjustments to the budget as follows:

 

1.  Staff recommended an adjustment to the cost of the vehicle recommended in decision unit E-710.

 

2.  Staff recommended that the cost allocation dollars in all of the DMV accounts be isolated in a separate category. 

 

MR. PARKS MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF. 

 

MR. MARVEL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

 

**********

 

DMV, PROJECT GENESIS – BUDGET PAGE DMV-62

 

Mr. Stevens recommended closure as recommended by the Governor.

 

MRS. CEGAVSKE MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MR. MARVEL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

 

**********

 

DMV, RECORDS SEARCH – BUDGET PAGE DMV-64

 

Mr. Stevens explained that there were a number of adjustments recommended in the account.  The recommendations were as follows:

 

1.  Staff recommended an increase in revenues based on agency projections of $510,771 in the first year of the biennium and $696,198 in the second year.  The updated revenue projection was concurred with by the agency. 

 

2.  Staff recommended the removal of modular building expenses in the second year of the biennium of approximately $10,000 to $11,000.  That amount was no longer needed because the remodel associated with the expenditure would be completed in the fall of 2001 eliminating the need for the expense.

 

3.  Staff recommended an adjustment to the data processing equipment based on revised prices from the State Purchasing Division. 

 

4.  Staff recommended isolating the cost allocation amount in separate categories.

 

MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MR. DINI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

**********

 

DMV, HEARINGS – BUDGET PAGE DMV-77

 

Mr. Stevens recommended the following changes to the budget:

 

1.  Staff recommended an adjustment to decision unit M-100 for vehicle comprehensive and collision insurance and vehicle liability insurance. 

 

2.  The Budget Office submitted an amendment to correct the step level for the supervising legal secretary position in decision unit M-303.  Staff recommended the inclusion of the adjustment, which resulted in an increase of $11,604 the first year of the biennium and $10,371 in the second year.

 

3.  Staff recommended that the cost allocation amounts be included in a separate category. 

 

MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MS. GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

 

**********

 

PUBLIC SAFETY, HIGHWAY SAFETY GRANTS ACCOUNT – BUDGET PAGE PS-90

 

Mr. Stevens said there were two adjustments recommended by staff as follows:

 

1.  Staff recommended an adjustment to the data processing hardware costs in decision unit E-720.

 

2.  Staff recommended isolating the cost allocation amounts in a separate category. 

 

MR. PARKS MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MS. TIFFANY SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

**********

PUBLIC SAFETY, TRAFFIC SAFETY – BUDGET PAGE PS-136

 

Mr. Stevens recommended that the account be held because Speaker Perkins was particularly interested in the account and he was not present.

 

Chairman Arberry announced the committee would hold Budget Account 101‑4687.

 

**********

 

B&I, CAPTIVE INSURERS – BUDGET PAGE B&I-45

 

Mr. Stevens said there was one technical adjustment in the account.  The Nevada Revised Statutes provided that a portion of the premium tax collections related to those insurers be captured and included in a reserve account up to $100,000.  Since the account was initiated by the 1999 legislature, the reserve balance had not yet reached $100,000.  Staff recommended that an additional $17,500 in the first year and $23,500 in the second year be provided in authority to take that into account.  Staff did not know what the exact amounts would be so the amounts had been estimated. 

 

MRS. CEGAVSKE MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MS. GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

 

**********

 

B&I, INSURANCE RECOVERY – BUDGET PAGE B&I-47

 

Mr. Stevens recommended the budget be closed as recommended by the Governor. 

 

MR. HETTRICK MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MR. MARVEL SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

 

**********

 

B&I, NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS – BUDGET PAGE B&I-55

 

Mr. Stevens recommended the budget be closed as recommended by the Governor.

 

MR. BEERS MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MRS. CEGAVSKE SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

 

**********

 

B&I, INSURANCE COST STABILIZATION – BUDGET PAGE B&I-59 

 

Mr. Stevens said there were two staff recommendations on this budget in decision unit E-710 as follows:

 

1.  There was $15,000 included to replace the division’s file server.  That server had recently “crashed” and was replaced eliminating the need for a replacement. 

 

2.  The staff recommended a reduction of $864 for the remaining replacement equipment based on new prices from the Purchasing Division. 

 

MR. PARKS MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MS. LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

 

Mr. Beers said he was curious, as a relatively new member of the Committee on Ways and Means, what would happen with the Insurance Cost Stabilization Program’s budget now that the server had “crashed” and been replaced.  Presumably, they would still need the money to buy a new one.  They purchased the replacement out of the current budget instead of the next budget.  He asked why it had been included in the next budget anyway if they had the funds in the current budget to replace the server.

 

Mr. Stevens said the replacement was not a planned equipment replacement.  It “crashed” a few months earlier than the agency had predicted.  Mr. Beers asked if the agency had reclassified money from another account in the current biennium in order to fund the new server.  Mr. Stevens said he did not know for sure but it was a Non-General Fund account and he thought they took monies from the reserve and put it into the data processing category. 

 

**********

 

B&I, MFG. HOUSING EDUCATION/RECOVERY – BUDGET PAGE B&I-88

 

Mr. Stevens said he recommended closure of the budget with minor adjustments due to cost adjustments made by State Purchasing on data processing equipment. 

MR. DINI MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY STAFF.

 

MR. HETTRICK SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

 

**********

 

 

FORT MOJAVE DEVELOPMENT FUND – BUDGET PAGE CRC-7

 

Mr. Stevens recommended closure of the budget as recommended by the Governor.

 

MS. GIUNCHIGLIANI MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MR. HETTRICK SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED. 

 

**********

 

CRC RESEARCH AND DEVELOPMENT – BUDGET PAGE CRC-10

 

Mr. Stevens recommended closure of the budget as recommended by the Governor.

 

MR. HETTRICK MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MR. GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.) 

 

BUDGET CLOSED.

 

**********

 

POWER DELIVERY PROJECT – BUDGET PAGE CRC-13

 

Mr. Stevens said that his staff and the Colorado River Commission (CRC) had noted that the authority would probably need to be augmented in the upcoming biennium.  The authority in the current fiscal year was $70.9 million.  The total power sales authority in the first year of the biennium was $76.8 million and $87.4 million in the second year.  The CRC recommended that this not be modified at this time; they wanted to let the power markets stabilize before they augmented the accounts if necessary.  That would be done by the Interim Finance Committee.  If the committee agreed with the recommendation from the CRC, the budget could be closed pursuant to the Governor’s recommendation and have the CRC go to the Interim Finance Committee at a later date to augment the amounts if needed. 

 

Ms. Tiffany said she did not understand what “augment” meant.  She asked if it meant that the CRC could go out and buy more power.  Mr. Stevens answered, “Yes, that would mean that they would increase the authority that they would have in this particular account and right now, in the first year it was $76.8 million and in the second year it is $87.4 million.  They are anticipating that they will need more authority, or they will have to increase those amounts, because the cost of power will increase above that level.”

 

Ms. Tiffany said she did not understand how that could be done because they had long-term contracts and she did not understand what they were trying to do unless they were trying to buy more power using long-term contracts to resell to California to make more profit.  She asked if that was what was going on.

 

Mr. Stevens said that the analyst for the agency was not in the hearing and he suggested waiting until he arrived.

 

Ms. Tiffany said the Los Angeles Department of Water and Power had long-term contracts and bought more power at a lower rate and then turned around and resold it for a profit.  It did not benefit anyone but the Los Angeles Department of Water and Power.  She asked if that was what was happening.

 

Mr. Stevens said that when the CRC testified, they indicated that they were not in the business of purchasing more power than needed and then selling it but they did estimate how much power they would need and if they estimated too high, they would resell on the market the additional power that they did not need. 

 

Ms. Tiffany said that was one of the concerns of the Select Committee and no one was able to answer the question.  The CRC had bought power on long-term contracts and Sierra Pacific Power Company had not bought on long-term contracts so they were buying higher than the CRC.  The CRC was now going to make a case that they should now be a provider.  She said it was complicated and she wanted to know what the augmentation meant. 

 

Chairman Arberry announced the committee would hold Budget Account 502‑4501.

 

**********

 

POWER MARKETING FUND – CRC-16

 

Mr. Stevens suggested to the committee, and it concurred, that it might want to hold this budget account as it had an even larger problem than the previous account.  The power sales authority in the account for the current fiscal year was $186.2 million and was recently augmented at the Interim Finance Committee.  The power sales authority for the first year of the biennium was $175.5 million and that was below the current authority in that account.  The same situation existed in this account as the previous account. 

 

**********

 

ADJUTANT GENERAL CONSTRUCTION FUND – BUDGET PAGE MILITARY-6

 

Mr. Stevens recommended closure as recommended by the Governor. 

 

MR. MARVEL MOVED TO CLOSE THE BUDGET AS RECOMMENDED BY THE GOVERNOR.

 

MS. GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION WAS CARRIED UNANIMOUSLY.  (Mr. Perkins and Mrs. Chowning were not present for the vote.)

 

BUDGET CLOSED.

 

**********

 

There being no further business, Chairman Arberry adjourned the meeting at 9:56 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Lila Clark

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE: