MINUTES OF THE

budget subcommittee

of the Legislative Commission

 

January 23, 2001

The Budget Subcommittee of the Legislative Commissionwas called to order by Chairman William J. Raggio at 8:45 a.m., on Tuesday, January 23, 2001, in Room 1214 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Attendance Roster.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

SENATE COMMITTEE MEMBERS PRESENT:

 

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal Jr.

Senator Bob Coffin

Senator Bernice Mathews

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Mr. Morse Arberry Jr., Chairman

Ms. Christina R. Giunchigliani

Mr. Bob Beers

Mrs. Barbara K. Cegavske

Mrs. Vonne S. Chowning

Mrs. Marcia de Braga

Mr. Joseph E. Dini, Jr.

Mr. David E. Goldwater

Mr. Lynn C. Hettrick

Ms. Sheila Leslie

Mr. John W. Marvel

Mr. David R. Parks

Mr. Richard D. Perkins

Ms. Sandra J.Tiffany

 

STAFF MEMBERS PRESENT:

 

Gary Ghiggeri, Senate Fiscal Analyst

Mark W. Stevens, Assembly Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Rick Combs, Program Analyst

Patricia C. Hampton, Committee Secretary

 

OTHERS PRESENT:

 

John P. Comeaux, Director, Department of Administration

Don Hataway, Deputy Director, Budget Division, Department of Administration

Daniel K. O’Brien, Manager, State Public Works Board, Department of Administration

 

 

Ward Patrick, Deputy Manager, Professional Services,  State Public Works Board, Department of Administration

Bill Knight, Director, Facilities Management and Planning, Western Nevada Community College, University and Community College System of Nevada

Glen Whorton, Chief, Classification/Planning, Department of Prisons

Jackie Crawford, Director, Department of Prisons

Rolando Sandoval, Interim Vice President, Planning and Administration, Nevada State College at Henderson

Daniel G. Miles, Vice Chancellor, Finance and Administration, System Administration Office, University and Community College System of Nevada

James Manning, Budget Analyst, Budget Division, Department of Administration

 

 

THE EXECUTIVE BUDGET OVERVIEW

 

John P. Comeaux, Director, Department of Administration, provided members of the committee with The State of Nevada, The Executive Budget in Brief (Exhibit C. Original is on file in the Research Library.) and a budget overview (Exhibit D), consisting of information on the General Fund unappropriated balances and General Fund reversions, prepared by the Department of Administration.

 

Mr. Comeaux reviewed the Economic Overview shown on pages 5-7 of Exhibit D.  He pointed out the economy has been experiencing the longest recession-free period in United States (U.S.) history and it is expected that the expansion will continue.  He said growth is expected to slow to around 3.5 percent beginning in 2001.  He estimated personal income growth would remain in the mid-single digits and, more importantly, economic conditions in Nevada will still fare very well relative to the nation as a whole.

 

Mr. Comeaux pointed out that page 2 of Exhibit D shows the General Fund unappropriated balances. He said the General Fund balance for Fiscal Year (FY) 2001 is forecast to be $105.85 million.  He stated the balance is expected to increase to $106.125 million at the end of FY 2002 and to $106.852 million at the end of FY 2003.  Mr. Comeaux said this would result in a General Fund balance, at the end of FY 2001, approximately $22 million higher than the minimum 5 percent balance required by state statute.  He remarked that by FY 2002, the balance would still be $13 million higher than required, and by the close of FY 2003, the General Fund balance is expected to be over $7 million more than what is required.

 

Mr. Comeaux called attention to the schedule of reversions shown on page 3 of Exhibit D.  He estimated there would be reversions of $62,500,000 for FY 2001.   Reversions for FY 2002 are estimated to be $37,500,000, roughly 2 percent of proposed appropriations. Reversions for FY 2003 are estimated to be $79 million, roughly 4 percent of proposed appropriations.

 

Turning to page 5 of Exhibit D, Mr. Comeaux said this is a schedule of historic reversion levels since 1989.  The average percent of reversions in the second year of each biennium since 1989 has been over 8 percent and the average percent of reversions in the first year of each biennium since 1989 has been 2.68 percent.  He pointed out the reversions in the second year are normally higher than in the first year because that is when any reversion from the Distributive School Account (DSA) comes in, as well as reversions from one-time appropriations. 

 

 

Mr. Comeaux pointed out that on page 3 of Exhibit D an unusual item has been added to reversions in the two years of the next biennium.  He explained that in early January as the budget was being finished, a rate model from the Department of Information Technology (DoIT) was received.  It was discovered the rate model would over bill for services to be provided in an amount near $7.8 million.  He explained that $1.42 million has been added for FY 2002 and $2.37 million has been added for FY 2003 as a reserve for the DoIT rate model.

 

Mr. Comeaux said the adjustment to reversions is based on the assumption that the General Fund portion of that DoIT overbilling is roughly 50 percent.  He stated steps have been taken to review the rate model and make adjustments as necessary. He said a commitment has been made to provide to the legislative fiscal staff a recommendation for a rate model adjustment no later than March 15, 2001.

 

Mr. Comeaux also pointed out on page 2 of Exhibit D the one-time appropriations recommended by the Governor in FY 2001 totaling $194,079,806.  He called attention to a list of these appropriations in the Introduction of The Executive Budget in Volume I.  He reported there are also supplemental appropriations recommended in the amount of $4,454,533.

 

Mr. Comeaux called attention to the recommended appropriation to restore fund balances shown on page 2 of Exhibit D, in the amount of $14,900,000.  He said that schedule can be found on page 20 of The Executive Budget.  He pointed out that page 7 of Exhibit D has the same information as well as the balances of those funds for the current biennium.  The recommendation is to increase those fund balances, in total, approximately $3.5 million, Mr. Comeaux added.

 

 Continuing, Mr. Comeaux explained there is currently over $300,000 remaining in the emergency fund.  He pointed out this recommendation is based on the assumption these funds will be gone by the end of FY 2001.

 

Mr. Comeaux said the last recommendation is to restore the statutory Contingency Fund to a level of $3 million. He stated it was $1.5 million in the current biennium and several requests had to be made of the Interim Finance Committee (IFC) for additional funding for the statutory Contingency Fund.

 

Senator Raggio inquired whether the inclusion of State Highway Fund dollars in the Interim Finance Contingency Fund is a normal procedure.  Mr. Comeaux answered that it is not.  Mr. Comeaux reminded the committee of the problem the Department of Motor Vehicles and Public Safety had and the department’s need for additional staff.  He said a request was made of the Interim Finance Committee and, although the proper funding for the additional request was highway funds, there was no mechanism in place to provide the Department of Motor Vehicles and Public Safety with additional highway funds. Therefore, he stated, a loan was made to the department from the Interim Finance Contingency Fund with General Fund dollars. 

 

Mr. Comeaux said a recommendation will be made for an appropriation from the highway fund to the Interim Finance Committee Contingency Fund in case something like this should happen again.  He confirmed use of these funds would be limited to use which is appropriate for Highway Fund dollars.

 

Senator Raggio asked whether there is a proposal to add funding to the rainy-day fund (Fund To Stabilize Operation of State Government).  Mr. Comeaux explained that The Executive Budget does not propose a direct appropriation to the rainy-day fund. However, as a result of the higher-than-anticipated revenue collections in 2000, the statute triggered an automatic transfer to the fund of approximately $7.5 million.  The current balance in the fund is $136,340,970.

 

Mr. Comeaux reported that The Executive Budget is balanced and the revenues and reversions for each year of the biennium exceed the proposed appropriations.

 

Continuing, Mr. Comeaux reviewed the funding shown in the Sources of Funding Summary of Exhibit C, pages 17-20.  He stated General Fund revenue growth is forecast to hover in the mid-single digits through the next biennium.  He said the    Economic Forum has forecast revenue growth to the unrestricted General Fund to be 4.7 percent in FY 2002 and 4.3 percent in FY 2003.  Mr. Comeaux reported that is lower growth than has been experienced recently, but still strong growth.  He told the committee the General Fund revenue is expected to total over $3.74 billion in the 2001-2003 biennium and represents an increase of $544 million over the revenue forecast upon which the 1999-2001 budget was based.

 

Senator Raggio asked why the highway fund is anticipated to be less than in the previous biennium.  Mr. Comeaux explained this is due to an anticipated decrease in federal funds going into the State Highway Fund.

 

Mr. Comeaux said budgeted resources total $11.12 billion during the next biennium.  He stated this represents an increase of $1.86 billion over the current biennium.  He noted that General Fund resources represent just over one-third the total.  The next two largest sources are various federal funds and the State Highway Fund, he said.

 

Assemblywoman Giunchigliani asked about the projected DSA reversions.  She asked whether Mr. Comeaux truly believes this funding will be forthcoming.  Mr. Comeaux answered that he does, based on the current revenue forecast.  Ms. Giunchigliani inquired whether a deficit is being created for the second year of the biennium based on the expected reversions.  Mr. Comeaux stated that the reversions do not create a “hole” in the budget.  He said the thought is that recommended appropriations and authorizations for the two years of the next biennium will be adequate to meet the caseload forecasts for all areas of the budget.

 

Ms. Giunchigliani indicated disagreement.  She stated this has to be reviewed to assure there will be adequate funding.  Mr. Comeaux pointed out that at the end of each biennium the DSA account either reverts funds or the state has to provide additional funding as a supplement to the guaranteed amount.  He said the reversion recommended for FY 2001 is based on estimates of local revenues the school districts will collect for the remainder of this year.  If those local revenues are collected, the reversion will take place, he said.

 

Mr. Comeaux added that the funding for the next biennium is provided independent of possible local revenues the school districts might collect.  In addition to the $24 million in reversions from the DSA for this year, there are also reversions of approximately $35 million from other areas of state government.  Mr. Comeaux pointed out that in the second year of the biennium, reversions are generally significant for a variety of reasons.  He said the second year of a biennium is when funding that is available to agencies for both years of the biennium finally revert and when one-time appropriations that are subject to reversion revert. 

 

Mr. Comeaux pointed out that, historically, reversions in the first year of a biennium average over 2 percent and in the second year reversions average 8 percent.  Mr. Comeaux stated these reversions are inevitable in his opinion.  He said that for the first year of the next biennium, reversions are estimated to be 2 percent and for the second year slightly less than 4 percent.

 

Assemblyman Arberry asked Mark W. Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, to highlight for some of the newer committee members, some of the information provided thus far today.

 

Mr. Stevens explained The Executive Budget is recommending 2 percent reversions in FY 2002 totaling between $37 million and $38 million and a 4 percent reversion in FY 2003 totaling approximately $80 million.  He said that is much higher than projected reversions in the past, so it is a departure from what the legislature has been accustomed to seeing.  He confirmed Mr. Comeaux’s statements that in the second year of the biennium, reversions have traditionally been higher than in the first year.

 

Mr. Stevens stated that, even though it is assumed the $81 million in reversions will come in the second year of the biennium, a “hole” is created in FY 2004 because there would likely be a return to the 2 percent reversion projection in the first year of the following biennium.  He said the reduction in the reversion would amount to $40 million less than what was reverted in the previous year.  He explained that in FY 2004, the first $40 million in new revenues generated, would be utilized to replace the reduction in reversions from $80 million to $40 million in the first year of the next biennium.  Mr. Stevens said this reduction would have to be made up by new General Fund revenue sources in the first year of the following biennium.

 

Mr. Comeaux responded that he understands Mr. Steven’s point, and that if everything remains static, Mr. Stevens would be correct because reversions are budgeted to maximize resources.  He pointed out that when appropriations for a fiscal year are made it is known that not all of them are going to be spent, for a variety of reasons. For this reason, reversions are estimated for use in the budget.  Mr. Comeaux maintained that in the attempt to maximize resources, the inclusion of reversions is an appropriate budgeting tool.

 

Mr. Comeaux continued the budget review referring to the Spending Summary on pages 23-26 of Exhibit C.   He noted The Executive Budget provides for total General Fund appropriations of $3.85 billion in the upcoming biennium. This translates into a gain of $645 million relative to the 1999-2001 biennium, he said.  Mr. Comeaux explained that 90 percent of General Fund appropriations represent resources necessary to fund the base budget.  He stated 4.7 percent is budgeted for maintenance purposes, to maintain existing programs after taking into account a variety of external factors, such as caseload growth and new mandates. Approximately 5 percent is budgeted for program enhancements, he added.

 

Further, Mr. Comeaux reported that more than half the total General Fund spending is targeted for education and $1.2 billion of that amount represents the state’s General Fund obligation to the DSA, which is the funding mechanism through which state funds are distributed to school districts.

Mr. Comeaux noted human services accounts for over one-fourth the General Fund appropriations and the State’s Medicaid obligations total $524 million out of $1.09 billion in human services spending.  He said 11.3 percent of total General Fund spending is earmarked for public safety purposes.

 

Mr. Comeaux referred the committee to the chart on page 23 of Exhibit C.  He explained this chart compares proposed appropriations by function for the current biennium to what is proposed for the 2001-2003 biennium.  He said the difference in the total recommended is $645 million.

 

Mr. Comeaux pointed out that the Colorado River Commission has an interesting budget that provides for some forecasted additional energy cost for the pumping of water.

 

Mr. Comeaux explained the Positions Summary shown on pages 29-30 of Exhibit C.  He said although total positions will hold relatively steady, some departments will be adding much-needed staff.  Mr. Comeaux stated more than four departments, human resources, prisons, the proposed Department of Motor Vehicles (DMV), and the proposed Department of Public Safety, account for half of all state positions.

 

He indicated state positions are actually on the decline, from 7.3 state workers per 1,000 residents in FY 2001 to 6.9 in FY 2003.  The number of full-time equivalent positions will total fewer than 15,700, by the end of 2003.

 

Senator Raggio said it is his understanding, according to the Governor, there are over 1,500 unfilled positions.  Mr. Comeaux explained that as of a week ago there were 1,670 vacant positions in state service, which amounts to a 10.6 percent vacancy.  Senator Raggio inquired whether the 15,637 positions shown on page 29 of Exhibit C are filled positions.  Mr. Comeaux clarified these are authorized positions, not filled positions.

 

Senator Raggio asked whether the 1,670 vacant positions will be filled, plus an additional 50 positions.  Mr. Comeaux answered the plan is to attempt to fill the positions that have been authorized.  He said a vacancy rate of 10.5 percent is a problem, particularly where the vacancies exist, such as probation officers and correctional officers.  Senator Raggio inquired whether it is the feeling of the administration that the increase in compensation will result in the vacant positions being filled.  Mr. Comeaux responded that is certainly the hope.

 

Explaining further, Mr. Comeaux said the salary study, conducted by the Department of Personnel, indicated there were serious differences between the salary level of state positions and similar positions in the public and private sectors.  He pointed out this information was attained from entities that the state competes with for employees.

 

Mr. Comeaux called attention to the General Highlights shown on pages 33-36 of Exhibit C.  He said The Executive Budget contains significant compensation increases for state workers.  He pointed out compensation enhancements total $107 million.  He said the proposed compensation package will help alleviate these problems and result in more efficient provision of services to all Nevadans.

 

Senator Raggio asked whether this would include classified as well as unclassified positions.  Mr. Comeaux answered it is an across-the-board increase for all state workers as well as classified positions in the University and Community College System of Nevada (UCCSN).  He said workers at the top of their respective pay scales will receive an additional “step”, or merit increase, of approximately 5 percent on their anniversary dates in the first year of the biennium.  He added that employees in some specific occupational groups are targeted for additional increases.

 

Mr. Arberry asked where these recommendations would place state workers versus city and county employees.  Mr. Comeaux answered it is hoped this will help retain employees.  He stated there is not enough funding available to close the salary gap, but it will help.  He said there is also optimism that vacancy rates experienced in the past several years will be reduced.

 

Senator Neal asked how the proposed increased salaries would compare to salaries of comparable positions in other states.  Mr. Comeaux answered some gain will be made in some positions and the problem will not be solved, but it will be improved.

 

Continuing, Mr. Comeaux said there would be a 2 percent cost of living increase in each year of the biennium for UCCSN faculty and professionals.  He noted the Governor is proposing authority be given to the UCCSN to augment these funds from other resources if they can.  He pointed out the 2 percent increase is in addition to the merit salary pool for UCCSN faculty.

 

Senator Raggio said it is his understanding this proposal was discussed with UCCSN administration officials, who indicated additional funds could be found.  Mr. Comeaux stated that is correct.  Senator Raggio pointed out there is a potential for a 4 percent increase in each year of the biennium for UCCSN faculty.  Mr. Comeaux said officials indicated that there would be an attempt to achieve at least 3 percent in each year of the biennium and that this level was approved, at some point, by the Board of Regents.

 

Senator Raggio stated this committee is very familiar with the formula recommended by the interim Legislative Committee on Education and it is his understanding that the formula is incorporated in the UCCSN budget and it is funded at the 85 percent level. He noted this was somewhat higher than anticipated in discussions and provides the potential to accommodate the increase.  Mr. Comeaux agreed.

 

Senator Coffin asked where the other resources would come from.  He remarked he does not see where the funds would come from without cutting services, other than substantial student tuition increases.  He disclosed that his wife is a professor at the University of Nevada, Las Vegas (UNLV), UCCSN. He stated the funding formula was intended more to correct disparity problems than to increase the size of what would be available.

 

Senator Raggio suggested it would be more appropriate for the UCCSN administration to address this issue when their budget is reviewed on January 25, 2001.  Senator Coffin responded he would like to have an explanation of why UCCSN officials agreed with the Governor on this proposal.

 

Mr. Comeaux indicated the new funding formulas were designed to improve equity in the distribution of funding, and to recognize some costs of the UCCSN that previous funding formulas did not recognize.  He explained that the new formulas recognize cost costs that the original formulas did not recognize, or that did not exist when previous funding formulas were developed.

 

Mr. Comeaux stated the Governor is recommending funding the formula at slightly above the 85 percent level.  He said the UCCSN will be able to provide the committee with information on how they plan to address the issue.

 

Ms. Giunchigliani asked whether the cost of living allowance (COLA) and step increase for employees “topped out” were budgeted.  Mr. Comeaux answered that the method of building the salary tables into the computer system produced a glitch in the second year of the biennium, resulting in the amounts for the COLA and the additional step not being fully calculated.  He said this glitch was reviewed and he is satisfied that, in total, it was an insignificant amount.   He said this would only be a problem in a budget with a large concentration of  “topped out” employees. 

 

Mr. Comeaux explained it is recommended in the appropriation bill in the introduction of The Executive Budget that the language allowing agencies to move salary funds be expanded.  He stated this will allow agencies to move funds realized from salary savings, from one budget to another. He maintained any problem possibly created would be taken care of through this language.

 

Ms. Giunchigliani asked what amount of funds might be available to be moved from one budget to another.  Mr. Comeaux answered $2.4 million in total.  He added some budgets did not include possible salary savings, but this can be addressed with the flexibility to move the funds.

 

Mr. Comeuax pointed out another salary adjustment item.  He said the Governor is recommending special salary adjustments for certain positions with the Gaming Control Board.  He explained those adjustments are to be funded by an increase in investigative fees that the gaming industry has agreed to.  He said these fees went into effect on January 1, 2001.

 

Ms. Leslie said she noticed positions for certain engineers, correctional officers, and parole and probation officers, shown on Page 33 of Exhibit C, are scheduled for additional salary increases. She pointed out that the graph on page 34 of Exhibit C indicates that social workers and psychiatric nurses have a higher turnover rate than parole and probation officers and asked whether these groups would also get the increase.

 

Mr. Comeaux responded these two groups were not scheduled for increases by the Department of Personnel.  He said a copy of the personnel study is distributed to the Legislature every session and if the copies have not been made available they will be soon.  He said factors include a combination of salary disparity and a very high turnover rate.

 

Senator Neal asked how the funds would be obtained if there were no new gaming resorts opening in Nevada.  Mr. Comeaux stated the anticipated fees are not solely from the investigation of new key individuals wishing to come into the gaming industry.  He said the estimated funding includes investigative as well as audit fees.  He pointed out the sole purpose in salary adjustments for Gaming Control Board positions is to keep salaries competitive with those offered by other states that regulate gaming.

 

Senator Raggio noted today’s hearings are for budget overviews and there will be additional opportunities to get into more detail when budgets come before their respective committees.

 

Mr. Comeaux said another important general feature of this budget has to do with inflation.  He stated there is a great deal of uncertainty concerning future trends in energy prices.   He said that, given the potential for the continuation of significant price increases, $41 million in general funds has been budgeted across all departments to meet these possible future energy obligations. He said amounts included in The Executive Budget for inflation total approximately $87 million, and much of that is for electricity and natural gas.  Mr. Comeaux reported the average increase for inflation is 10 percent a year.

 

Mr. Comeaux said the budgeted increase for electricity and natural gas is based on information received from a consumer advocate.  He said this information was received last summer and, as of last week, the consumer advocate was comfortable with the information provided at that time.  He stated the Governor was not sure the increase would be adequate, but this was the information used.  He pointed out this will require close attention.

 

Senator Neal inquired whether the 15 percent increase was based on the lawsuit settled by the Governor and the Public Utilities Commission.   He said this settlement allowed for up to 1.8 percent increase per month in electricity rates.  Mr. Comeaux answered he is not sure what the consumer advocate based the estimate on, but he did estimate that for natural gas, we would see average annual increases of 15 percent over the next biennium, and for electricity, 16 percent.

 

Senator Neal said the Nevada Power Company and Sierra Pacific Power Company are buying the generating facility in Portland, Oregon, for $3.1 billion and if they are able to keep their A bond rating, $1.1 billion will be spread out to the rate payers.  He asked whether this was included in inflation projections.  Mr. Comeaux answered he does not know.  Senator Neal emphasized this would be necessary information.  Senator Raggio said he would ask staff to look into the issue.

 

Ms. Giunchigliani asked whether the rate increase is included in the DSA.  Mr. Comeaux replied that it is.  Ms. Giunchigliani inquired whether it is included in the per-pupil increase for the DSA.  Senator Raggio indicated Don Hataway, Deputy Director, Budget Division, Department of Administration, was responding affirmatively to the questions.

 

Mr. Comeaux addressed organizational changes shown on page 35 of Exhibit C.  He said there would be pilot decentralization of computer programming and computer technician services from the Department of Information Technology to three state    agencies.  

 

Senator Raggio said some of the committee members have expressed concern over the proposal to create an office of disability services to be transferred to the Department of Human Resources.  He asked where the components of these services are presently located.  Mr. Comeaux said some of the services are attached to the Department of Employment, Training and Rehabilitation and some are attached to the Department of Human Resources.

 

Senator Raggio said the information submitted to the Legislature indicated this change might be in violation of federal requirements.  He asked Mr. Comeaux to look into the matter and determine whether there might be a concern and, if so, whether the transfer would be advisable.

 

Mrs. de Braga asked whether there is information regarding the cost of the proposed changes.  Mr. Comeaux replied that there is information provided in The Executive Budget, but supplement information might be needed.

 

Mr. Comeaux announced the Governor’s Capital Improvement Program (CIP) totals $306.5 million.  He said the projects will be financed by a variety of sources including $221.2 million in state funds.  Senator Raggio asked what portion of the $221.2 million is specific outlay of the General Fund and what portion is bonding.  Mr. Comeaux answered that the Governor is recommending $18 million from general funds and $3 million from reallocation of existing project funds.  He said the remainder would be from bonds.

 

Mr. Comeaux reviewed page 40 of Exhibit C, Elected Officials’ Budget.  He said the Governor has included a $5 million appropriation from the General Fund for the Nevada Protection Fund in the budget to allow for activities to protect Nevada citizens from the federal decision of locating the nuclear waste repository at Yucca Mountain.

 

Senator Raggio asked for more specifics on how the $5 million will be used.  Mr. Comeaux stated this would be a one-time appropriation.  He said the bill will be written to allow for the creation of this fund, which will be available for as long as it is needed.  He said the Governor is proposing to use whatever is necessary from the fund to communicate with other states regarding transportation of nuclear waste through other states to Nevada.  He explained the fund will be used for any extraordinary litigation and expenses the state might incur over the next two years in connection with any U.S. Department of Energy action.

 

Senator Raggio asked who will present the detail on this item at later hearings. Mr. Comeaux responded a representative from the Governor’s office will present it.  Senator Raggio asked whether this fund is intended to replace the funding to be received from the federal government.  Mr. Comeaux answered it would not.  He said the funding from the federal government is very restrictive in its use and can basically only be used to conduct scientific studies relating to the location of the repository.

 

Senator Neal said he heard the Governor say a portion of the fund would be used for advertisement.  Mr. Comeaux explained the Governor wants to be able to communicate the hazards of transporting nuclear waste across the country.

 

Senator Raggio remarked full detail on the fund would be expected at later hearings.

 

Mr. Comeaux said the budget includes funding for evaluation of the Millennium Scholarship Program.  He noted $74,000, as appropriated from the General Fund, would be used for the study, which is important in policy.

 

Mr. Comeaux called attention to the one-time General Fund appropriation of $1.4 million to the Secretary of State to fund various enabling technology projects.  He said resources are also provided for a Family Resources Coordinator in the governor’s Office.  He said the coordinator will identify the availability of services for children and families, from all sources, in both the public and private sectors, and will direct citizens to the most appropriate entity for services.

 

Senator Raggio questioned why this position is proposed to be in the Office of the Governor rather than the Department of Human Resources.  Mr. Comeaux explained this is a program the Governor is very interested in and he wants to have close oversight of the program.

 

Mr. Comeaux referred the committee to page 43 of Exhibit C.  He pointed out The Executive Budget includes funding for pay increases of approximately 30 percent for District Court Judges, effective in 2003 when new elected terms begin.  He explained the funding is provided in accordance with a recommendation of the committee appointed to study judicial salaries.  He said one-time General Fund appropriations, totaling $1.03 million, support the continuation of the Drug Court Program in the Second and Eighth Judicial Districts.  He pointed out funding is provided for the creation of a standing legislative committee for juvenile justice, as recommended by an interim legislative committee.

 

Continuing, Mr. Comeaux said nearly $15 million in one-time appropriations are included under Finance & Administration Budgets, shown on page 47 of Exhibit C, for the final phase of development and implementation of the Integrated Financial System (IFS).  That includes $12.3 million from the General Fund and the remainder from the State Highway Fund.

 

Senator Neal asked whether the salary increase proposed in the judicial budget includes retirement.  Mr. Comeaux answered it does not.  He said there is a proposed appropriation in the budget and he will explain it later in the morning.

 

Mr. Comeaux noted a $1.3 million one-time General Fund appropriation is being utilized for Phase II of the Department of Taxation business process reengineering study.  He said the results of the study will identify, among other things, potential deficiencies in the state’s revenue collection processes.

 

Mr. Comeaux stated that for the first time, the Governor’s $306 million Capitol Improvement Program (CIP) utilizes a cash-flow funding structure designed to help ensure resources are distributed across competing projects to help maximize resources.  He said a $9.1 million one-time General Fund appropriation is recommended to fund Phase II of the digital microwave upgrade.

 

Senator Raggio asked whether the final phase of the IFS is finally going to be completed.  He said he has been watching this project for a long time.  Mr. Comeaux replied he hopes and believes it will be.  He said the schedule initially adopted is somewhat behind, but everything seems to be in good shape, and this should be the last phase.

 

Senator Raggio asked whether the IFS is meeting expectations at this time.  Mr. Comeaux explained he cannot say the system is exactly what the state started out to purchase, but it is a good system that does everything the state needs it to do.  He reported employees and vendors are getting paid every two weeks and, when the total system is implemented, the necessity for sub-systems in individual agencies will be eliminated.

 

Senator Raggio said the committee has concerns as to whether the system is meeting expectations, where it is on the schedule today, and what assurance there is that this will be the final phase.  He emphasized the committee expects to have the questions answered in future hearings.

 

Senator Raggio asked what Phase II of the digital microwave upgrade consists of.  Mr. Comeaux said he is not sure whether this completes the project.  He noted this is a statewide system and funding was provided for Phase I in the last biennium.  He stated this phase is basically to upgrade and replace components of the system.

 

Mr. Comeaux said the Education Highlights on pages 51-54 of Exhibit C show the K-12 student enrollments are forecast to increase nearly 5 percent annually.  He pointed out this will translate into more than 15,000 new students each year.  He said UCCSN enrollments are expected to rise at a pace even higher and are forecast to total nearly 60,000.

 

Mr. Comeaux stated the basic per-student guarantee with the DSA is budgeted at $3,896 for the 2001-2003 biennium.  He said one-time General Fund appropriations are being proposed to provide for over $57 million in cost-of-living bonuses for public employees in local school districts.  Senator Raggio asked whether this will begin in the second year of the biennium.  Mr. Comeaux stated the intention is for it to be in the first year of the biennium.

 

Mr. Comeaux remarked there are also fund increases in teacher training, textbook resources, and information technology provided to the school districts, giving them the flexibility to use the funds in those areas as they see fit.  He said the total recommended amount is $20 million. 

 

Mr. Comeaux said there is also increased funding for professional development  centers and remediation, a recommendation of the standing Legislative Committee on Education.

 

The State Board of Education has recommended that funding for early childhood education be increased, Mr. Comeaux said.  He called attention to the proposed Nevada Early Literacy Intervention Program.  He said the program is designed to ensure all students read at grade level by the third grade.  He explained the program generally involves training teachers in proven techniques for teaching reading.

 

Mr. Comeaux said funding is recommended for the evaluation of the Class Size Reduction Program, and a one-time General Fund appropriation of nearly $1.6 million is recommended for the development of a criterion-referenced test for eighth graders, a requirement of the Nevada Education Reform Act.

 

Mr. Comeaux explained the budget provides resources to expand the reimbursement program for K-12 teachers attaining national certification to 75 teachers per year. 

 

Mr. Comeaux said an establishment of the Nevada State College at Henderson is being recommended, including a $1 million one-time General Fund appropriation in the first year of the biennium for startup costs, and ongoing funding in the second year for the first class, estimated to be 1,000 students.  He noted the college is a recommendation of an interim legislative study.  He said The Executive Budget incorporates a recommendation of an interim legislative committee to utilize new funding formulas for the UCCSN.

 

Mr. Arberry referred to page 53 of Exhibit C.  He asked what is the purpose of the $20 million one-time General Fund appropriation.  Mr. Comeaux explained the Governor is proposing this one-time appropriation be distributed to school districts on a per-child basis and the school districts be allowed to use the funds in one or more of the three areas indicated, depending on their priorities. 

 

Mr. Arberry asked how use of the funds could be tracked.  Mr. Comeaux replied reports from the school districts could be required, detailing how the funds were spent.  Mr. Arberry remarked some adjustments need to be made.

 

Senator Rawson questioned the salary increases referred to as cost-of-living allowances (COLA).  He pointed out this would be a one-time 5 percent bonus.  He noted that the Governor is recommending, if revenues in the interim materialize, a special legislative session be considered.  Senator Rawson emphasized he did not vote for a 120-day session to “program in a special session”.  He said he will not support anything that would cause a special session.  He stated whether it is comfortable or not, there is a mandate to consider salary issues.

 

Senator Neal asked why the word “bonus” is being used.  Mr. Comeaux answered the Governor is proposing a one-time bonus, in lieu of a salary increase, because funds could not be found to provide for ongoing salary increases for classroom teachers.

 

Ms. Giunchigliani disclosed she is a public school teacher.  She asked how the $20  million one-time appropriation would be distributed.  Mr. Comeaux explained it would be distributed on an enrollment basis.

 

Mr. Hataway indicated that in his review of the DSA tomorrow, he will show a chart on the proposed distribution of funds.

 

Ms. Giunchigliani remarked that she does not believe 1,000 students will be recruited and enrolled in the Henderson State College if adequate salaries are not provided to teachers.  She emphasized a bonus does not mean anything in the long run.

 

Senator Neal called attention to the fact the audit committee found there is a shortage of textbooks and there is a report that includes this information.

 

In reviewing the human services budget highlights on pages 57-59 of Exhibit C, Mr. Comeaux said the state administers a number of human service programs, each serving a defined population.  He noted the largest program is Medicaid.  He stated The Executive Budget provides General Fund resources of nearly $11.5 million to expand Medicaid eligibility.

 

Mr. Comeaux called attention to funding for the transfer of certain child welfare services to Clark and Washoe Counties, a recommendation of an interim legislative committee.  He said this recommendation includes a one-time General Fund appropriation of approximately $8 million.

 

Mr. Comeaux explained a proposed increase in the daily rate the state pays foster care providers.  He said for children up to 11 years old, the daily rate is going up from $13.28 to $19.50 and for older children, the increase is from $16.33 to $22.50.  He pointed out rate increases are also being provided for subsidized adoptions.

 

Mr. Comeaux called attention to funds for an enhanced health clinic for the new Jan Evans Juvenile Justice Center included in the budget.

 

Mr. Comeaux explained there is a one-time General Fund appropriation of $1.8 million, to be used for the development of a long-term strategic plan that will meet the current and future healthcare needs of Nevada.  He said this plan provides a blueprint to fund the development of public and private resources necessary to meet these needs.  He noted components of the plan are outlined on page 60 of Exhibit C.  Mr. Comeaux reviewed other proposals shown on Page 61 of Exhibit C.

 

Ms. Giunchigliani asked whether Clark and Washoe counties would be held harmless for picking up the transfer of child welfare services.  Mr. Comeaux answered as far as he can tell it absolutely holds the counties harmless.  He said the amount the Governor referred to is the total cost of the programs that would be transferred, and this includes federal funds.

 

Ms. Giunchigliani inquired whether the Governor included a subsidy for foster grandparents in the changes to payments for foster care providers.  Mr. Comeaux said he does not have any detail on that, but he knows some provisions have been requested.

 

Ms. Giunchigliani asked for clarification on the Senior Property Tax Rebate Program.  Mr. Comeaux explained the proposal is to double the benefits in the program.

 

Mr. Goldwater remarked it appears many proposals are on a one-time basis that could create a growing need.  Mr. Comeaux said the Governor’s view of these programs is they would not create a need; the need already exists.   He added if ongoing funding is not available to address some of the problems, certainly one-time funding to improve things for awhile is preferable to doing nothing at all.  He said in some cases the one‑time funding being provided is designed to fix or help alleviate a problem that exists now, with the hope that funding would be available in the future if needed.

 

Mr. Goldwater asked whether teachers would be able to bargain for the $20 million earmarked for textbook resources, information technology, and teacher training, through collective bargaining.  Mr. Comeaux replied he does not believe so.  He said this would be one‑time funding for specific purposes.

 

Mr. Marvel asked how much of the funding for the Senior Rx Program comes from tobacco rebate funds.  Mr. Comeaux answered tobacco rebate funds are involved, but he does not know in what amount.

 

Senator Rawson said he appreciates that the Governor is trying to address some of these issues, but using one-shot funding only worsens a functional deficit that already exists.  He emphasized his support for developing a legislative budget.  He said it is very difficult to see what needs really are, when there is an attempt to fix them with one‑shot funding. He stated it is possible to leave the current legislative session without really addressing existing needs.  Senator Rawson expressed the concern there is not enough revenue in the budget for these projects.

 

Mr. Arberry asked Mr. Comeaux to provide staff with backup material for all supplemental and one-shot appropriations.  He inquired what would happen if Medicaid recipients of breast and cervical cancer testing would be discovered to have cancer.  Mr. Comeaux answered it is his understanding those individuals would be provided with coverage to receive aggressive treatment for breast and cervical cancer under the Federal Breast and Cervical Cancer Prevention and Treatment Act of 2000.  He said the funding recommended is for an estimated 35 women with breast cancer and 65 with cervical cancer for each year of the biennium.

 

Continuing, Mr. Comeaux added this is as much detail as he can provide.  He said more detail can be provided when the Department of Human Resources gives their budget overview the next day.

 

Ms. Leslie asked whether the $2 million appropriation recommended by the Governor for the new Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS) clinics includes the $1 million she and Senator Townsend had requested for the Reno clinic.  Mr. Comeaux answered that it does.

 

Ms. Leslie asked whether it is the Governor’s intent the strategic plan will help the state comply with the U.S. Supreme Court Olmstead decision.  Mr. Comeaux answered that he is not sure.

 

Ms. Chowning said she would like to be provided with information as to whether the recommendations of the Legislative Committee on Education and the Academic Standards Council are part of the $20 million appropriation in the education budget.

 

Mr. Comeaux provided information on commerce & industry budgets shown on pages 65-66 of Exhibit C.  He said when the bill is written, the correct location for a $5 million one-time appropriation will be determined.  He stated the appropriation should go to further assist low-income Nevadans with energy bills.  He pointed out the $5 million will not be placed in the budget for Department of Business & Industry.  He explained the intention is to use this funding to supplement what is available in the Low Income Housing Energy Assistance (LIHEA) Program.

 

Mr. Comeaux reported on the public safety budgets shown on pages 69-71 of Exhibit C.  He said prison inmate population is forecast to total close to 10,900 by FY 2003, which will be 4.8 inmates per 1,000 residents.

 

Mr. Comeaux said a $1.8 million one-time appropriation from the highway fund is to be utilized for various communication-type projects within the proposed Department of Public Safety.  He stated funds will also be provided for a job task analysis and a physical fitness validation study for peace officers.  He explained this is to make certain the right level of training is being required.

 

Mr. Comeaux said funds are in The Executive Budget to upgrade computer resources for the Division of Parole and Probation, Department of Motor Vehicles and Public Safety.

 

Senator Raggio asked what would be included within the proposed Department of Public Safety.  Mr. Comeaux answered the Divisions of Investigations, Parole and Probation, and others, but only the existing components, nothing new, would be included.

 

Senator Raggio inquired what would be included in the proposed Department of Motor Vehicles.  Mr. Comeaux replied the components of licensing, registration, and title would be included.

 

Ms. Giunchigliani asked what the cost will be to split the existing department into two departments.  Mr. Comeaux said the budget is higher, mainly because of adoption of the cost allocation plan, which shifts more of the administrative burden to the General Fund from the State Highway Fund.  He maintained the cost actually association with splitting the two departments is minimal.  He pointed out only two positions have been added.

 

Ms. Giunchigliani asked whether there is a plan to reopen the prison at Jean.  Mr. Comeaux responded yes.  He said approximately $3.5 million are included in the CIP to refurbish the facility and it will be reopened in 3 to 5 years.

 

Mr. Marvel inquired whether it is anticipated that any new prisons would be needed.  Mr. Comeaux said the current 10-year population forecast indicates the need for additional prison beds in the future.  He noted that if things do not change there is the possibility of building what has been designated as “prison 8” in the future.

 

Mr. Comeaux said that infrastructure budget highlights are shown on page 75 of ExhibitC.  He called attention to a one-time General Fund appropriation to the Tahoe Regional Planning Agency (TRPA), Department of Conservation and Natural Resources, to increase Lake Tahoe oversight.  He said this was recommended by an interim legislative committee.

 

Mr. Comeaux stated nearly $2.1 million in General Fund resources are recommended to fund a variety of state park improvement and maintenance projects.  Additionally, Mr. Comeaux pointed out the large increase in the budget for the Colorado River Commission is driven by on-going and expected developments in energy and power markets, which are likely to result in significant price increases.

 

Mr. Comeaux explained the special purpose budgets are outlined on page 79 of Exhibit D.  He said a one-time General Fund appropriation totaling over $14.3 million funds the conversion of the Judicial Pension Program for district judges from a cash basis to an actuarial funding basis.  He pointed out this was a recommendation by an interim legislative committee.  Mr. Comeaux explained that $13.9 million of the $14.3 million will pay the approved actuarial liability for the active judges. The additional $400,000 would be the first installment on actuarially funding the program for retired judges.  He stated that over a 40-year period, moving to the actuarial funding will save the state a considerable amount.

 

Senator Neal asked whether the Governor’s recommended funding for the Henderson State College is based on the assumption there would be a corresponding increase in teachers’ salaries by the time the college is graduating teachers.  He asked whether, if that is not the case, teachers would be trained to go to states where salaries are higher.  Mr. Comeaux said that, obviously, if the state does not remain competitive, that would be a probable outcome. 

 

Mr. Comeaux maintained that the Governor made every effort to identify sufficient funding to provide the kind of salary increases for classroom teachers that are recommended for state employees.  He said there were no additional funds to be found.  He said the Governor did the next best thing; he did what he could.  Mr. Comeaux emphasized the Governor recognizes the issue.

 

The meeting was recessed at 10:56 a.m. The meeting reconvened at 11:15.

 

CAPITAL IMPROVEMENT PROGRAM OVERVIEW

 

Daniel K. O’Brien, Manager, State Public Works Board, Department of Administration, reviewed a copy of the recommended capital improvements, Nevada State Public Works Board 2001-2003, Recommended Capital Improvement Program (Exhibit E.  Original is on file in the Research Library.)    He noted there were approximately $753 million in requests, but the final CIP submitted to the Governor totals $263 million.  He stated the Governor’s recommended program is slightly more than $306 million.  He said $200 million is in state general obligation bonds, $18 million in state general funds, $3 million in reallocations and $85 million in other funding.

 

Mr. O’Brien called attention to page 01-C1 of Exhibit E, the first project of the Department of Prisons.  He said the department is requesting construction funds to build Phase III of a prison located adjacent to Southern Desert Correctional Center near Indian Springs.  He explained this project will add 1,000 beds to the facility and will open in 2004.  He said this will complete the 3,000-bed prison.

 

Ward Patrick, Deputy Manager, Professional Services, State Public Works Board, Department of Administration, said there are four housing units in the project, a gymnasium and a prison industries building.  Among other things, he said, there are upgrades to the sewer system and security lighting. A liquified natural gas system totaling $750,000 will convert the existing boilers from number 2 diesel fuel to natural gas, bringing the boilers in compliance with a Clark County health requirement.  He stated the current boilers comply with federal Environmental Protection Agency (EPA) guidelines, but not stricter Clark County guidelines.

 

Senator Raggio asked whether there is a plan to delay the completion of Phase III until January 2005.  Mr. Patrick answered his understanding is the master plan will require the facility to be open in 2003.  Senator Raggio stated that, according to staff research, the master plan for the Department of Prisons indicates the prison will not be needed until 2005.  He asked why the housing unit is being done at this time. 

 

Senator Raggio remarked the Southern Nevada Correctional Center, Jean, Department of Prisons, will be reopened in August 2003 for female prisoners and the Southern Nevada Women’s Correctional Facility, Department of Prisons, will be converted to an intake center for male prisoners. 

 

Glen Whorton, Chief, Classification/Planning, Department of Prisons, confirmed the master plan does have January 2005 as the opening date for Phase III of the High Desert State Prison.  He said there might be some confusion over the dates because of the multitude of master plans as the project was developed.  Senator Raggio asked Mr. Whorton to clarify the date of the proposed opening as soon as he has the information.

 

Senator Raggio asked what portion of the project is bonded.  Mr. Comeaux explained specific funding has not been designated to specific projects.  He said what is being recommended is that the Legislature approve the program in total with the understanding it will be funded through a combination of approximately $200 million in general obligation bonds, $18 million in General Funds, $3 million in reallocations, with the remaining funding from other sources.  Senator Raggio pointed out there has always been a delineation as to what the Executive Branch is proposing and how each project will be funded.  He said he would like to have Mr. Comeaux make recommendations.

 

Mr. Comeaux explained the reason the projects have been recommended this way is that this will give maximum flexibility.  He stressed the accounting systems are capable of maintaining the cost of the various projects and it did not seem to be necessary to designate particular projects and tie them to particular funding.  He said information the committee has been accustomed to can be provided.

 

Mr. Comeaux said this is a departure from the usual process.  Senator Raggio emphasized it was not comforting to know a lot of projects, that are really maintenance projects rather than construction projects, were being funded through general obligation bonds.

 

Mr. Hettrick said there had been some discussion in the past about not identifying specific projects with specific funding sources.  He said without flexibility projects might be delayed for two years.  He said the thought was some additional projects could be done at reduced costs if there were more flexibility.  He maintained it would be appropriate to either make a recommendation or provide assurance that true maintenance and repair projects were not based on funds from bonding.

 

Mr. Comeaux agreed.  He said what is intended is to use the funds available to front these projects and give time to decide when to issue bonds.  He said the State Treasurer likes to have some flexibility as to when he goes into the bonding market.  Senator Raggio reiterated the committee would like to have some idea how the major projects will be funded.  Mr. Comeaux said the information would be provided.

 

Mr. O’Brien reported the second project for the Department of Prisons is the rehabilitation of the Southern Nevada Correctional Center at Jean outlined on page 01‑C2 of Exhibit E.  He said this will make the needed repairs and life-safety upgrades in order to make the facility ready for future use by the state or private entities.

 

Mr. Patrick added this is one of the facilities on which the facilities condition analysis group has done extensive reports.  He said the higher priority projects are being presented.  He stated the total program developed by the group was approximately $11 million.  He pointed out the projects selected total almost $3.8 million.

 

Senator Raggio recalled that at the end of the 1999 legislative session, the proposal was to close the facility and lease it to another state or agency.  Jackie Crawford, Director, Department of Prisons, explained the reason the leasing of the facility was delayed was the discovery that the logistics were not in place.  She said that because the facility is on federal Bureau of Land Management (BLM) land, there was some difficulty in attempting to lease it.  She reported that once the issue was resolved, the information was placed on the Internet.  However, she added, because of the need of the facility to be rehabilitated, no one has been interested.  She said the $3.8 million will be essential to make the facility usable.

 

Ms. Crawford said that during the process, it was discovered the female prison population had spiked up to potentially 1,000 beds by 2003, so the decision was made to reconsider what was needed and maximize the use of existing facilities.  She noted she recommended the female prison be consolidated into one location rather than have it scattered.  She recalled that last session the Legislature provided funding for 480 beds and the remaining population was to go to the Jean Correctional Camp.

 

Senator Raggio asked whether there will still be a facility in Las Vegas operated by Correctional Corporation of America (CCA) if this facility is used for female prisoners. Ms. Crawford responded that is what is anticipated, because, perhaps, the facility would ideally be used for an intake center for males through CCA.  She said they would continue to privatize and work with the facility through CCA, but it would be for a different population.  She noted this has been addressed with CCA and they are very interested in exploring this possibility.

 

Senator Raggio asked whether the ultimate goal is to place all female prisoners at the Jean facility.  Ms. Crawford answered that it is.  Senator Raggio inquired about what will happen to the existing women’s prison.  Ms. Crawford replied it is anticipated to be an intake center for male prisoners.

 

Mr. O’Brien reported Project 01-C3, shown in Exhibit E, is the acquisition of two existing buildings currently owned by the Employers Insurance Company of Nevada (EICoN).  He said these two facilities could be used by the state fairly quickly and would consolidate agencies and reduce the need to lease facilities.  He reported that a review is in process to determine which agencies could move into the facilities.  Mr. Patrick added some renovation and moving costs are included. 

 

Senator Raggio asked what agencies will be moved into the buildings. Mr. Patrick stated planning is still in progress.  He said the availability of the buildings has just become known.  He explained the board is working with the Buildings and Grounds Division, Department of Administration, to develop a tenant list.  Senator Raggio said that, at some point, very early, there is a need to know what the plan is for utilizing the buildings. He asked whether acquisition of the buildings will decrease lease payments.

 

Mr. Comeaux explained there are tentative plans.  He said a variety of things have to be considered regarding whom to move.  He stated there is a need to not break leases any more than necessary, because that could affect future lease rates.  He said a plan for who is to be moved into the buildings would be provided very quickly, as well as what that would do to the building rents in the agencies’ budgets.  Mr. Comeaux pointed out that both of these buildings are in good shape and will be ready for occupancy very quickly.

 

Senator Neal asked why the Las Vegas building is available for purchase.  Mr. Comeaux explained he had received a phone call from EICoN’s counsel in December indicating their board of directors had elected to place three buildings on the market.  He said he has no idea why the decision was made to sell the buildings.  He indicated the state has been given the first right of refusal.

 

Senator Rawson said as he looks at the project there is slightly over $1 million in construction for the project, but $.5 million in project management and inspection costs.  He maintained this does not correlate to him and stated when the individual projects are reviewed in detail, he will want specifics

 

Senator Rawson asked whether he can get an overall idea of how many projects are being requested this session that cannot be funded.  He agreed with the importance of getting out of lease agreements and owning more state buildings, but not at the expense of projects that need to be done.  He said he will need to know how many projects are not recommended because of being out of bonding capacity.

 

Mr. Patrick noted there are two buildings on the Las Vegas site and the building available is the administration building.

 

Senator Coffin stressed it will be important to have an appraisal.  Mr. Comeaux pointed out this availability came about so late, the only appraisals are what EICoN has had done on the buildings.  He said the prices included in the CIP are based on those appraisals.  He stated the intention is to have our own appraisals done on the buildings.

 

Mr. Comeaux assured the committee the building in Carson City has been toured, it is in good shape, and it has been recently renovated.  He said the wiring has been upgraded and it is a good building.

 

Mr. Beers recalled this building was included in the EICoN privatization process which also eliminated a large liability.  He pointed out the liability exceeded EICoN’s assets.  He stressed this was a tremendous net gain for the state in unloading the liability.

 

Mr. Hettrick commented the state did not fund the building when it was built. Policyholders within the State Industrial Insurance (SIIS) and those paying the premiums paid for the building.

 

Ms. Giunchigliani stated that, as the tenants for the building are decided, the agency budgets should reflect the reductions in lease payments, as well any changes in square footage.

 

Regarding Project 01-C4, shown in Exhibit E, Mr. O’Brien reported the Clark County Airport Authority is vacating all the businesses along Rent-a-Car Road to make way for their airport expansion, which could occur within the next two to three years.  He explained that this request includes both design and construction funding for a new state motor pool.  He said the proposed site is convenient for the state as well as UNLV.

 

Mr. O’Brien pointed out the building would be designed to maximize the efficiency of both UNLV and the state by sharing conference rooms, parking, washbays and other features.  He said the design would include two offices for the state’s use and two offices for UNLV’s use.  He added that two conference rooms are planned, which would reduce in-town travel.  Mr. O’Brien called attention to the cover of the CIP book (Exhibit E), which depicts a model of the proposed facility.  He said the design of the facility is being done in-house.

 

Senator Raggio inquired whether some funding is anticipated from the UCCSN.  Mr. Patrick answered that, currently, the intention is for it to be solely state funded for construction.  Senator Raggio asked whether this is for the total facility, including the part to be used by the UCCSN.  Mr. Patrick responded that it is.

 

Senator Raggio recalled planning funds had been authorized, and asked if the planning funds had already been utilized.  Mr. Patrick said the authorized amount for planning was approximately $70,000 and the design is 49 percent complete.  He maintained the design will be complete when this funding is available so bids can go out.  Senator Raggio asked when the design would be complete.  Mr. Patrick answered it would be complete in June 2001 and will go to bid in August 2001.

 

Senator Rawson said it is his understanding the Governor’s fundamental review committee has considered the issue of whether to privatize the entire motor pool.  He said he does not know the results of the review, and would like to see the report before going ahead with this project.

 

 

Mr. O’Brien explained Project 01-C5, shown in Exhibit E.  He said this advance planning project provides funding for unforeseen studies necessary to develop the 2003 CIP.  He noted traditional funding for this program is approximately $150,000 per biennium.  He said the Governor recommend an additional $50,000 to support a 10-year capital planning process. 

 

Mr. O’Brien said Project 01-C6 in Exhibit E is for the schematic design for a new Readiness Center for the Nevada Armory National Guard in Las Vegas.  He called attention to the funding source, noting the cost will be reimbursed.  Senator Raggio asked what the necessity is for this project.  Mr. Patrick said he would like to defer this question until the Office of the Military addresses the budget.

 

Mr. O’Brien said Project 01-C7, Southern Nevada Veterans’ Memorial Cemetery Expansion, Phase IV, shown in Exhibit E, is 100 percent federally funded by a federal grant managed through the U.S. Department of Veterans’ Affairs.  He explained the start-up costs are to be used for the design, plan checking, and bidding, and will be fully reimbursed by the federal grant.  He said the existing cemetery will be expanded by 5,000 pre-burial vaults, 5,000 cremation niches, additional roadways, a parking area, an irrigation system, and landscaping.  He added that a new maintenance building is also proposed.

 

Mr. O’Brien explained Project 01-C8, outlined in Exhibit E.  He pointed out that funding of the original project was insufficient.  He said this proposal will complete the landscaping and equipment needs at the new Nevada Veterans’ Nursing Home in Boulder City, Nevada.  He remarked prison labor will be used for the landscaping portion.  He said the scope of work includes the completion of the landscaping per the original plan and the purchase and installation of the balance of the necessary medical equipment for the facility.

 

Senator Rawson inquired whether more federal funds or highway funds could be acquired.  Mr. Patrick replied this will be looked into.

 

Ms. Giunchigliani asked about the damage to the home she has read about.  Mr. O’Brien explained the damage is more cosmetic damage, not structural.  He said the structural flexibility of the building is causing cracking, especially in the main living area.  He stated his position is that this is a design defect and the cracks will not go away, so an aesthetic treatment will be needed.  Mr. O’Brien noted if it is determined to be a design flaw, the firms have “errors and omission insurance,” or they can opt to take care of the problem themselves.

 

Senator Raggio asked the status of the roadway and underpass providing access to the facility.  Mr. Patrick said he would have that information later in the week.  Senator Raggio asked when the home is scheduled to open.  Mr. Patrick responded the best information indicates the facility will be turned over to the state the beginning of April 2001.  Senator Raggio asked whether the roadway will have to be completed before the home can open.  Mr. Patrick answered the authority to build the roadway has been delegated to the Nevada Department of Transportation and a contract has been issued.  He said that is nearing completion and will not limit the schedule.   Senator Raggio remarked the roadway will not be done by April if the contract has just been issued.  Mr. Patrick stated the contract was issued in September of 2000.  Senator Raggio requested information on the roadway be provided by the end of the day.

 

Mr. O’Brien reviewed Project 01-C9, shown in Exhibit E.  He explained this will be a 7,100 square-foot addition to the Special Children’s Clinic in Reno, and remodeling of approximately 3,000 square feet of existing clinic space.

 

Mr. O’Brien spoke on the renovation of the Capitol, Capitol Annex and Blasdel Buildings, Project No. 01-C10 shown in Exhibit E.  He said this would be for minor remodeling and refurbishment of finishes in the Capitol.  He stated the annex would be completely remodeled to provide office space and the Blasdel Building would include a moderate remodel of interior architectural spaces.  He said the Governor has requested moving some of his staff into these areas.

 

Senator Rawson stressed he has asked repeatedly for planning on what it would take to replace the Blasdel Building.  He expressed that, in his opinion, it is an eyesore.  He said the $2 million would be better spent on preplanning for a new office building.

 

Senator Raggio asked what portion of funding is for the Capitol and Annex and what is for the Blasdel Building.  Mr. Patrick noted there is a construction cost breakdown on the right page of 01-C10.  He said only $85,600 is proposed for the Blasdel Building.

 

Senator Raggio asked about Project 01-C11, shown in Exhibit E.  Mr. O’Brien said this is a partial remodeling conversion of Building 17 at the Stewart complex from a classroom building to an office building.  He explained the proposal is to upgrade mechanical and electrical systems to current standards and remodel the ground floor for open office usage.  He said the second floor will not be completed, but the infrastructure will be installed for future tenant improvements.

 

Continuing, Mr. O’Brien noted this would provide open office space for the prison system at the Stewart facility and this would relieve the overcrowding at the prison administrative buildings.  Senator Raggio asked what the building is being used for at the present time.  Mr. O’Brien answered there are periodic meetings in the classrooms. 

 

Senator Raggio asked whether the second floor is currently usable.  Mr. Patrick reported the building currently does not have air conditioning and has archaic heating systems.  He said because of budgetary constraints the original plan was scaled back to the heating and cooling systems to support the entire building and architectural renovations for half the building.  He stated if additional funding came about, architectural features could be put into the second floor of the building.

 

Senator Raggio asked what portion of the construction cost is for removal of asbestos.  Mr. Patrick said the asbestos project is shown under Tab S, page 01-S6 of Exhibit E.  Senator Raggio pointed out that nothing is shown on the project cost estimate for 01-S6 for building 17.  He added that although the estimate includes information on Stewart Building 48, he would like to know what the cost is to remove asbestos in building 17.  Mr. Patrick stated he would provide that information.

 

Mr. O’Brien stated that Project 01-C12 in Exhibit E provides funding for code compliance and modernization of Nevada National Guard armories in five rural Nevada communities.  He explained this project will utilize both state and federal funding to make major improvements to these facilities.  He said the rural armories are not in compliance with many provisions of the building codes and other regulations such as the Americans with Disabilities Act (ADA).  He said this is only one upgrade to bring the armories out of the 1960 vintage era.

 

Mr. Patrick said Project 01-C13 is to convert the existing warehouse for the Bureau of Vocational Rehabilitation into office space.  This warehouse is located at 620 Belrose Street in Las Vegas.  He stated the estimated total square footage of this space is 8,100 square feet.  He said a need has been established for a record storage facility in Las Vegas. He recalled that $400,000 was funded in the 1999 Legislative Session for advanced planning for a records center.  He said the State Public Works Board staff has placed that project on hold since it is not in the Governor’s recommended list of projects.  He noted that little of the $400,000 has been spent.

Senator Raggio said it appears this facility would be used for the proposed  Department of Cultural Affairs, the current Department of Museums, Library and Arts.  Mr. Patrick remarked the total cost is $500,000, which is recommended by the Governor.

 

Senator Rawson pointed out there is also a proposal this legislative session that funding be allocated for advanced planning for moving the Nevada State Museum and Historical Society in Las Vegas, to the Las Vegas Springs Preserve.  He said before final decisions are made it might be appropriate to consider this request as part of that overall move.

 

Mr. Hettrick said several items in the construction cost list do not appear to be construction items.  He asked whether the $5,000 for telecom wiring should be included in the electrical upgrade costs.  He also inquired about the cost shown for weather stripping for existing doors and said it seems to be an exorbitant price.  He asked for more detail on the construction cost breakdown.

 

Mr. O’Brien described Project 01-C14, shown in Exhibit E.  He recalled that in 1999   $1.4 million was authorized for construction funds to remodel the old Carson City Courthouse, purchased by the state in 1995.  He reported the project was bid in October 2000 and all bids were substantially over available funds and had to be rejected.  He pointed out that based on these bids, additional funds would be necessary to complete the improvements recommended for this building.  He added that everything needed is listed on the project cost estimate for Capital Improvement Project (CIP) 01-C14.

 

Mr. Arberry asked whether a new building could be built for $233.47 per square foot.  Mr. O’Brien indicated that statement has been made by some, but what is being discussed in this project is the rehabilitation of a historic building.

 

Senator Raggio asked how this proposal ties in with what has already been appropriated.  He recalled that $1.8 million was appropriated in 1999 and that was supposed to complete the entire project.  He asked whether the character and purposes have changed.  Mr. O’Brien acknowledged it has changed.  He said this would be a complete renovation of the building, including exterior window replacement, exterior restoration work, and  site landscaping.

 

Senator Raggio asked what is left of the $1.8 million appropriated.  Mr. Patrick reported approximately $200,000 was spent in architectural fees, to develop the bid documents.  He said there is $1.4 million remaining.  He stated $3.4 million is the total needed to make the changes for the Office of the Attorney General.  He explained there would be approximately 20 office spaces to be developed, as well as restoring the building to usable condition and maintaining its historical significance.  

 

Senator Raggio asked why it costs $3.4 million to remodel a courthouse.  Mr. O’Brien stated basically the building would have to be “gutted” in order to make it suitable for office space.  Senator Raggio emphasized some detail would be needed and stated this request is worthy of scrutiny.

 

Mr. O’Brien reviewed the project for the Science and Engineering Complex at UNLV, shown as Project 01-C15 in Exhibit E.  He said of the $8.8 million, $3.7 is to be used for design fees to develop what is planned to be a 230,000 square-foot, science and engineering complex.  He stated additional funds are for the evaluation of infrastructure for the entire campus, as well as to upgrade the campus infrastructure. 

 

Mr. O’Brien said the vision of this project is to have a 230,000 square-foot building, that in year 2004 amounts, would cost approximately $75 million.  Senator Raggio asked
whether this would be all state costs.  Mr. O’Brien answered that in various testimonies to the State Public Works Board, the UCCSN has indicated willingness to commit funds to the project in the range of $15 million to $25 million. 

 

Mr. O’Brien pointed out there are deficiencies in the sewer, electrical, and water supply systems.  He said funding for infrastructure upgrades would address these deficiencies.

 

Senator Raggio recessed the meeting until 1:30 p.m.

 

Upon reconvening at 1:30 p. m., Senator Raggio called attention to Project 01-C16 of Exhibit E.  He noted this is for furnishing “build-out” at the Redfield Campus Building 1 for the UCCSN. 

 

Mr. Patrick said the Redfield Campus project request includes furnishings and equipment for the building as well as off-site costs unknown at the time the project was approved in 1999.  He stated the Legislature deferred the furnishings and equipment portion until the 2001 session.  He noted the building project was reduced from 75,000 square feet to 57,000 square feet.  He pointed out the total request for Redfield Campus Building 1 furnishings is $5 million, half of which is planned to come from UCCSN funding. 

 

Mr. Patrick stated that, in addition to the deferred items, this request includes additional funds to pay for unanticipated Washoe County and Nevada Department of Transportation (NDOT) requirements, such as the purchase of water rights, and additional landscaping along the Mount Rose corridor.

 

Senator Raggio asked if there is information as to whether the funds to be donated are available.  Mr. Patrick said there is testimony from university officials but not a written letter of commitment.  He noted this request will complete the project for full occupancy.

 

Mr. Patrick provided information on the road completion schedule for the Nevada Veterans Nursing Home in Boulder City, as requested during discussion of Project 01‑C8.  He said the architect director on the project stated the roads will be completed by the second week of April. He stated the veterans need some time to train in the building, and get “up-to-speed” with the medical systems.  He pointed out that in the past, three months has been the time period for this training.  Senator Raggio requested to be informed of the projected opening date.

 

Continuing, Mr. Patrick said Project 01-C17 is for furnishing and “build-out” of the Desert Research Institute (DRI) Southern Nevada Science Center in Las Vegas.  He reported this request is for furniture and equipment for the entire DRI-occupied space in the new Phase II Southern Nevada Science Center.  He said this will complete a project funded in 1999.

 

Senator Raggio asked whether there is any change in funding that was to come from the U. S. Department of Energy (DOE).  Mr. Patrick answered the understanding is $8.6 million DOE funds are available.  He said the revenue bond is still a consideration in funding plans.  He explained his understanding is DRI would bond $8.6 million on their own and lease agreements are being worked out on the building.

 

Mr. Patrick reviewed the furnishing and “build-out” of the library and student center at Western Nevada Community College (WNCC), Project 01-C18 of Exhibit E.  He explained there are two components to this project: furnishings and equipment for the library, and the additional design and construction to remodel the vacated library space into office space.

 

Senator Raggio noticed the current furnishings request is $120,000 more than what was requested in 1999.  Mr. Patrick explained the normal procedure for providing information for costs to be deferred to the next legislative session, is to list them at current year rate.  Senator Raggio recommended a review of the furniture list to determine if this is a valid estimate.  Senator Raggio asked how the remodeled space would be used.  Mr. Patrick stated he has no information on what the plans are for the space.

 

Bill Knight, Director, Facilities Management and Planning, Western Nevada Community College, UCCSN, explained the old library space will be remodeled and used for office space, which will free up additional space for storage.  He stated there is a record storage problem.  Senator Raggio inquired whether it is necessary to do that at this time.  Mr. Knight answered it is, because the space has been vacated at Stewart, where records were being stored.

 

Senator Raggio asked how long it has been since the building at Stewart was used and why the space was vacated.  Mr. Knight stated it was used until the end of last summer, and then moved into the Cedar Building to allow for classes being offered at Stewart.

 

Mr. Patrick reported a number one priority of the UCCSN Board of Regents is Project 01-C20 of Exhibit E, the Pennington Medical Education Building at the University of Nevada Reno (UNR).  He said these are all identified and planned costs from the last legislative session for furnishings and equipment.  He stated the project is currently under construction and 30 percent complete.  Senator Raggio asked whether this project will fully equip the building.  Mr. Patrick said it is his understanding that it will.

 

Mr. Hettrick pointed out every project has bond sale costs, so it is appropriate to look at the bond cost issue.  He also noticed the construction cost breakdown shows over $113,000 for computer and telecommunication servers.  He said he hopes that type of equipment is not being bought from bond sales.  He stressed it would not make sense to put something into a 20 to 30 year bond, when it only has a 2 to 3 year life.

 

Mr. Patrick said Project 01-C21 is for a 74,000 square-foot facility, in final design, to be on the West Charleston Campus of the Community College of Southern Nevada (CCSN).  He reviewed the anticipated costs, shown on the right page of 01-C21, which were deferred from the last legislative session.

 

Senator Raggio asked whether construction has been started.  Mr. Patrick said the project is in the final design stage and the design is 90 percent complete.  Senator Raggio asked about the estimated time of construction.  Mr. Patrick replied it will be a 14-month construction project.  Senator Raggio asked whether the request for furnishings and equipment is premature.  Mr. Patrick maintained the project is in the final phase of design.   He said a year and a half from now the furnishings will be needed, which would be one year ahead of being able to request funding from the next legislative session.

 

Mr. Patrick reported on another building for CCSN.  This would be a new Health Sciences/Biotech Building, he said.  He called attention to Project 01-C21 of Exhibit E.  Mr. Patrick pointed out this project would require $25 million in total funding, $20 million in state funds and $5 million in donations.  He said this project is a 90,000 square foot  facility to include site work, landscaping and offsite utilities.  He pointed out there are also $3.3 million in costs deferred until the next legislative session for furniture, fixtures and equipment.

 

Senator Raggio asked whether there is a request for fixtures and equipment in this budget.  Mr. Patrick acknowledged there is approximately $800,000 for these items that includes building in some of the furniture, such as bookcases.

 

Senator Raggio asked about the $70,000 for the heating and air conditioning maintenance agreement.  Mr. Patrick said to insure the best life of the mechanical equipment on new construction buildings, a commissioning program is done at the end of the project to ensure all systems are operating correctly and the temperatures are being controlled correctly.  He stated the additional $70,000 is for a one-year maintenance agreement on the facility.  The purpose of the agreement is to guarantee chemical treatment is done appropriately and water systems do not ruin the equipment, and to bring the maintenance personnel up‑to‑speed on the equipment.

 

Senator Raggio asked about the roof maintenance agreement.  He said it would seem there would be a warranty on a new roof.  Mr. Patrick stated the roofing program includes a 15-year warranty, but there is a contract with a roofing vendor for annual reviews of the roofing system to ensure there is compliance with conditions of the warranties.  He said this way any owner abuse can be addressed on an annual basis.

 

Senator Raggio asked to whom the $25,000 for the roof maintenance agreement would be paid.  Mr. Patrick responded it would be paid to the roofing manufacturer over a 10-year period.  He explained these are preventive maintenance agreements.  He said the heating, ventilating, and air conditioning (HVAC) system is on a one-year basis, but the roofing is for a 10-year period.  He stated this is for scheduled walk-throughs of the roof systems to ensure their integrity.  He maintained this is standard procedure on new buildings.

 

Mr. Patrick said Project 01-C22 of Exhibit E is for Phase II of the student services center at Truckee Meadows Community College (TMCC).  He said last legislative session $8 million was provided to build a 55,000 square-foot addition.  He explained that since that time, some of the other funding was not available so the project was scaled back to a 45,000 square-foot shell.  He said the first list of items on the right side of the project cost estimate for the project shows the completion of the shell funded in the last legislative session.  Mr. Patrick pointed out the second line item is for remodeling the Red Mountain Building, which is connected to the new building.

 

Continuing, Mr. Patrick said the third line item is to remodel the third floor of the facility.  He explained that because of construction, the plant, facilities, and central receiving services will need to be relocated.

 

Senator Raggio asked whether funds other than state funds are anticipated.  Mr. Patrick stated this request is solely state-funded and is believed to be a complete project.  He said anticipated funding from a foundation did not materialize.

 

Mr. Patrick explained Project 01-C23 of Exhibit E.  He said this is a proposal to renovate one of the oldest buildings on the UNLV campus, John S. Wright Hall, and add 55,989 square feet.  He said this building will house state-of-the-art instructional facilities.  He pointed out furniture and fixtures are included, so it is a complete project. 

 

Senator Raggio noted approximately $600,000 was approved for advanced planning and design in 1999 and there is an additional amount of $781,000 for the same purpose.  Mr. Patrick explained it is for the same project, but not the same purpose.  He said the $600,000 would only design a building half the size of the proposed building; the $781,000 will finalize the design and complete the construction.

 

Senator Raggio noted the State Public Works Board had recommended $5 million more for the project and asked if it is being scaled back.  Mr. Patrick answered the Board of Regents approved $23 million for this project, the State Public Works Board approved $23.8 million.  He said that because of budgetary constraints the Governor’s recommendation is $5 million less than the State Public Works Board’s recommendation.  Senator Raggio asked what is being eliminated to accommodate the lower recommendation.  Mr. Patrick pointed out the cuts have already been made.  He said item #2, the new addition, showing 56,000 square feet, was previously intended to be larger.

 

Ms. Giunchigliani conjectured this appears to be a duplication of the Nevada State College at Henderson since it refers to helping instructors become better teachers, providing opportunities to entire groups who are now unable to pursue higher education.  She said at some point the UCCSN will need to clarify what the intent is with this facility versus the Henderson college.  Senator Raggio said this is something the UCCSN can respond to.

 

Mr. Patrick said the $66 million project, shown as Project 01-C24 of Exhibit E, is a continuation of the UNR Getchell Library Addition feasibility study.  The feasibility study has projected the library’s future program needs at 320,000 square feet, he said.  Mr. Patrick pointed out the conclusions of this study recommended constructing a new stand-alone building because of the lack of open land available to expand the current library.

 

Mr. Patrick explained this request includes the design and construction of a new 326,000 square-foot library near the geographical center of campus, near the new parking garage, and north of the Judicial College.  He said this also includes the partial remodeling of the vacated Getchell Building.  He added that furnishings and equipment are not included in this project request, but are being deferred as a  request in 2003.

 

Mr. Marvel asked how the revenue bonds would be paid.  Mr. Patrick said the project will be funded with $22 million from state funds, $22 million from UCCSN and $22 million from parking fees.  He said the revenue bonds will be paid from parking fees.  Mr. Patrick clarified he was informed by the UNR representative that it is not necessarily parking fees that will be used, but fees in general.

 

Senator Raggio asked for a review of Project 01-C25 in Exhibit E for an academic & student services building at the new Nevada State College at Henderson.  Mr. Patrick said this will be a 100,000 square-foot classroom and student services building.  He pointed out there are substantial off-site costs, anticipated to be somewhere around $5 million.  He said there is a plan for the land to be donated to the project. 

 

Senator Raggio inquired whether the donation has been “firmed up.”  Orlando Sandoval, Interim Vice President, Planning and Administration, Nevada State College at Henderson, UCCSN, testified there are presently negotiations with the City of Henderson, Nevada, and Landwell Corporation for the property.  He stated the plan is to have title to the land by March 2001. 

 

Senator Raggio asked if the land will be provided without cost.  Mr. Sandoval responded that it would.  Senator Raggio said this proposal indicates $10 million from funding other  than state funds.  Mr. Sandoval explained this is being discussed and the hope is there will be commitments no later than April, when the CIPs are discussed in depth.  Senator Raggio stressed that the availability of other funding is crucial to any decision to be made on this project.  He pointed out there is some contention about this project and the more information that is available, the easier it will be to make a decision.

 

Ms. Giunchigliani asked about the outside costs.  Mr. Sandoval explained there are a lot of non-existing and older utilities in the area.  He said this is like any new property where utilities might need to be brought in.  Ms. Giunchigliani asked whether a value has been placed on the land.  Mr. Sandoval replied there has been talk of the value being between $20 million and $40 million.

 

Senator Raggio inquired about the formal entrance included in the outside costs.  Mr. Sandoval stated at the present time the formal entrance is going to occur.  He explained that currently the UCCSN is going through an architectural competition.  He said the formal entrance, in prior renderings, was done to provide an idea of what the campus might look like.  He reported the Chairman of the Board of Regents and an architectural task force are in the process of determining the style of the campus.

 

Mr. Beers asked how many acres the campus would include.  Mr. Sandoval answered the campus would be approximately 280 acres.  Mr. Beers asked how far each type of utility would have to be run to reach the property.  Mr. Sandoval replied possibly two to three miles for phones, electricity and sewer.  He said for planning purposes, a new road is included on the perimeter and the plan is to also drop utilities for the future campus on Warm Springs Road.

 

Mr. Patrick reviewed Project 01-C26, shown in Exhibit E, for a 20,000 square-foot addition to the existing student services building, as well as a 20,000 square-foot remodel.  He said the $300,000 is for planning purposes.

 

Returning to the UCCSN projects, Mrs. Chowning stated she did not hear anything about a parking facility at UNLV and parking is a “nightmare” for employees, as well as others.  She requested this information be provided to her.

 

Responding to Mrs. Chowning’s question, Daniel G. Miles, Vice Chancellor, Finance and Administration, System Administration Office, University and Community College System of Nevada, said $27 million of revenue bonds were sold in December 2000 to build the parking structure.

 

Senator Neal referred to the estimate based on year 2000 costs for the student services design in Project 01-C26.  He asked if there will be different figures on the project before the end of this legislative session.  Mr. Patrick said an estimate can be provided.  Senator Neal inquired whether there will be any changes.  Mr. Patrick replied that no changes are anticipated.  He maintained the $300,000 is planned to take the project through 100 percent of the design. 

 

Mr. Patrick explained there are four fish hatcheries to be rehabilitated in Project 01‑C27 of Exhibit E.  He said the request is for construction funds to upgrade, remodel, and expand the state fish hatchery system.  He stated, as he understands it, this is a first step of a multiphase project.  He said that at a future date projections for the total expenditures can be provided, as well intended funding.

 

Senator Raggio remarked this project is proposed to be funded by trout stamp fees.  Mr. Patrick said an additional fee of $5 is being proposed, increasing the cost of the stamp to $10.  Senator Raggio asked how much funding will be raised by raising the trout stamp fee from $5 to $10.  Mr. Patrick said the first $5 is creating revenue of $400,000 per year and the additional fee will create an additional $400,000 revenue per year.

 

Senator Raggio pointed out the project cost is $3 million.  Mr. Patrick explained there would be a revenue bond to be paid back from stamp fees and any additional federal money available for the program.  Mr. Patrick said there is a meeting scheduled to review the long-term aspect of this project and where the funding will come from for the multiphase project. 

 

Mr. Patrick said the State Department of Conservation and Natural Resources has a 5‑year program for improvements in all the fish hatcheries.  He acknowledged the plan for the  5-year program has not been shown, but said they are trying to prepare this plan

so it can be shown at the department’s next budget hearing.  Senator Raggio pointed out there could be some resistance to doubling the trout stamp fee and the additional revenue might not be available.

 

Senator Raggio asked about Project 01-C28 of Exhibit E.  Mr. Patrick replied that in July 1999 the Nevada State Prison maintenance shop was damaged in a twister.  He explained the Risk Management Division has been in negotiation with the insurance company.  He said the negotiations have concluded and an updated figure for the total project would be approximately $394,000.  He stated the Public Works Board is confident the 4,000 square-foot facility can be replaced for that amount.  He noted a request is anticipated from IFC to speed up the timeline on the project.  He said the insurance company has a clause in the coverage stating improvements have to be made within two years of the damage.

 

Senator Raggio asked whether the payment from insurance will fully cover the cost of this project.   Mr. Patrick answered estimates indicate that it will. Senator Raggio pointed out there is a $100,000 deductible.  Mr. Patrick said the plan is for the Risk Management Division to pay the deductible.

 

Senator Raggio asked for information on the “E” project for the Department of Employment, Training, and Rehabilitation shown on page 01-E1 of Exhibit E.  Mr. Patrick stated the plan is to build a new 40,000 square foot office building in Las Vegas.  He said this request is the result of a facility being torn down.  He explained the employees previously housed in the building being torn down are currently in a leased facility.  He stated the plan is to have some direct funding from the department as well as revenue bonds.

 

Senator Raggio asked how the project will be financed.  Mr. Patrick replied some funding will be from sale of other properties for $4 million and the remaining $4.25 million will be from revenue bonds.  Senator Raggio inquired about the source of funds that would be used to repay the bonds.  Mr. Patrick said he will have to provide that information at a later date.

 

Senator Raggio asked about the reference to “revenue bonds (federal funds)” shown in the project’s cost estimate.  Mr. Patrick said he will have to get clarification on what that means.  Senator Raggio stressed it will be necessary to know what the revenue stream is for the bonds.

 

Senator Raggio suggested an overview of the projects shown as Agency Maintenance “M” Projects on pages 01-M1 to 01-M45 of Exhibit E.

 

Mr. Patrick remarked the basic justification criteria used for funding these projects is that they have basic life, safety, and health issues, or deferring the project to next session would drastically increase the cost of the project.

 

Mr. Patrick pointed out that approximately one-third are heating, ventilation, and air conditioning system upgrade projects. He said many of the buildings have security issues so there are a few projects for door and lock upgrades to create safe environments.  He stated there are several projects that are necessary to complete projects approved by past legislatures because funding has been transferred from those projects to support the High Desert State Prison project.  Those projects include projects 01-M40 through 01-M43.

 

Senator Raggio asked whether the problem of people becoming ill at the Grant Sawyer Building has been resolved.  Mr. Patrick said a consultant’s report should be forth‑coming as to whether the problem has been solved.

 

Mr. Patrick pointed out Project 01-M9 to expand the shop at the Pioche Conservation Camp for the Division of Forestry, State Department of Conservation and Natural Resources.  He said the off-site vehicle repair facility will be closed due to the construction of a new elementary school on adjacent property to the shop.  He explained school age children cannot be on the same site as prison inmates.

 

Senator Raggio asked about the status of the schools for which special funding was provided on an emergency basis.  Mr. O’Brien stated $16 million in bonding authority was set aside for that purpose.  He said approximately $10 million was for White Pine County.  He said the project has been brought back before the Board of Examiners because the scope of work has changed significantly.

 

Mr. O’Brien said the bids for the project at Lund and Pleasant Valley came in at $800,000 to $1 million over the funding levels.  He stated the estimate of construction costs was over the amount of available funds from the beginning.  He explained the school board has proposed to take funds from the Pleasant Valley school and build the Lund school.  He said this causes a major change in the scope of the projects. 

 

Mr. O’Brien said the plan is to reduce the Pleasant Valley school from over $3 million to $1.1 million, which would only take care of the costs for site preparation and for moving modular units to the site.  He stated the desire is to build everything needed for the Lund project.  He remarked the Board of Examiners, because of the reduction in the scope of work, has suggested the school board and superintendent come back before them at the next meeting with a decision from a public hearing.

 

Mr. O’Brien explained the timing of the Lincoln County High School project caused problems because of the project going into winter, but this does not appear to have caused significant delays.  Senator Raggio asked what is being done in the interim for the student’s schooling.  Mr. O’Brien responded he is not familiar with the situation.  Senator Raggio recalled that the legislature was led to believe these were emergency situations because the buildings were condemned and immediate attention was needed.  He stressed two years have gone by and it would appear something is not right. Mr. O’Brien remarked the money was not actually appropriated until November 13, 1999. 

 

Mr. Comeaux explained the method under which the $16 million bonding authority was set up.  He said the school districts were required to submit applications to the Board of Examiners for their approval.  He stated it was the application and approval process by the Board of Examiners that delayed the beginning of the program until November 1999.  He pointed out this caused a built-in delay in getting started.

 

Mr. Comeaux said the problem with the Lund and Pleasant Valley schools was a combination of things.  He stated the estimates, upon which the original allocation and the application to the Board of Examiners was based, were on a site for the Lund school that ultimately had to be changed.  He added that the decision was made to bid the Lund and Pleasant Valley schools together.

 

Mr. Comeaux said the bids were above the level that could be negotiated.  He stated this resulted in a situation that required starting the projects over.  He said the school district has indicated that because of a fairly significant decrease in the number of children in the Pleasant Valley area, priorities have changed.  The school district would prefer to build the kind of school needed at Lund.  He added the children from Pleasant Valley are being bussed approximately 10 to 15 miles to a school in Utah.

 

Mr. Comeaux recalled the Legislature made a separate appropriation for approximately $1 million for a school in Lincoln County.  He said the county was given the funds, ran the project and apparently have done a great job.  He stated it was a community effort with a number of things donated.  He noted the county planned to take the same approach on the high school, but they were talked into using a modification of the design for the high-tech centers that have been built in other areas.  He stated the belief was this would “fast-track” the project.  He said obviously this did not happen because the school has not been built.

 

Senator Neal asked what type of work is currently in progress in Lund.  Mr. O’Brien reported nothing is being done.  He said this issue is being brought to IFC for discussion.

 

Senator Neal asked why the two projects were bid together.  Mr. O’Brien explained that it was felt by having the same contractor do both projects, there would be some savings.  Mr. O’Brien stated the current position is to only bid the Lund project.  

 

Mrs. de Braga said when White Pine County lobbied the Legislature for the Pleasant Valley school, the county enrollment was 62 students.  She stated the last count she had of students being bussed to Utah was 26.  She pointed out 10 of these are high school students who have indicated to the school board they prefer to attend school in Utah.  She stated it is good the progress on this particular school has been slowed down.  She stressed it would be hard to justify spending that amount for so few students.

 

Senator Raggio referred the committee to the Statewide Programs “S” Projects shown in  Exhibit E. 

 

Mr. Patrick reviewed the Statewide Roofing Program, Project 01-S1.  He reminded the committee of previous testimony covering the preventive maintenance and warranty agreements on the roofing systems.  He said this project includes $1.7 million in various projects, including prisons, buildings and grounds, and human resources.  He pointed out it also includes some funding to repair interior water damage caused by roof leaks, asbestos abatement on the roofing projects, and repair of roofs not under warranty.

 

Senator Raggio asked what the $322,000 is for at the Southern Nevada Correctional Center.  Mr. Patrick answered he would have to provide that information at a later date.

 

Mr. Patrick gave an overview of Project 01-S2 outlined in Exhibit E.  He explained the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability in services, programs or activities of state government.  He said that in the early 1990s, to bring buildings into compliance, it was estimated the needs for the older state-owned buildings would cost approximately $13 million.  He reported that since that time, approximately $4 million have been appropriated for that effort.  Mr. Patrick said with inflation, the need for ADA work is approximately $20 million, so the problem seems to grow as fast as funding becomes available to work on the problem.  Mr. Patrick said ADA consultants have surveyed a number of the projects, but because of budget constraints the request is for $1 million.

 

Senator Raggio asked whether highway funds are available for the ADA program at the Nevada Highway Patrol Division headquarters building. Mr. Patrick answered the highway funding committee met, but this was not one of the items addressed.

 

Mr. O’Brien reported on a discussion with the Governor on this issue.  He said because of the significant needs of the state, the Governor would like to know the true cost for this type of upgrade and for it to be considered in future funding plans.

 

Ms. Leslie asked whether the $140,000 shown in item 4 is for the old Nevada Mental Health Institute (NMHI).  She said she was under the impression all patients were being moved to the new hospital in February 2001.  Mr. Patrick explained the funding is designated for various NHMI buildings in general, including the cafeteria building.

 

Mr. Patrick said four projects have been identified for the Statewide Fire Sprinkler Program shown on page 01-S3 of Exhibit E.  He explained the two prison projects are the result of changes of use for some facilities.  He explained some facilities will be used as storage instead of their prior use.  He stated that requires the buildings to have sprinkler systems added.

 

Senator Neal asked whether the retrofit program has been completed.  Mr. Patrick answered it is his understanding there is a state statute requiring sprinkler retrofits in certain types of buildings, but he is not familiar with the percentage of buildings completed.  He said he would try to provide this information.  He added this was also a concern of the Governor.

 

Senator Neal said if the law was passed in 1981, it would seem something would have been done.  He recalled buildings were placed on a schedule for retrofitting.  Mr. Patrick remarked there has been a reliance on the General Fund agencies to request projects on their schedules to be incorporated in the CIP.  He said the current list includes all the projects requested by agencies for this legislative session.

 

Mr. O’Brien said the Governor’s question is “What is the true need in the state?” Senator Neal stated the law requires retrofitting, and that is why the buildings were placed on a schedule to be done over a period of time.

 

Senator Raggio said item two under this project is for the Jean Correctional Center in the amount of $162,450.  He pointed out this is a new facility and should already have sprinkler systems.  Mr. Patrick said some of the buildings that existed prior to the new building are being converted to storage buildings and therefore need sprinkler systems to comply with code.

 

Senator Raggio asked what the $2 million request is for in Project 01-S4, shown in Exhibit E.  Mr. Patrick said the Statewide Construction Contingency funding is to be used to complete projects with extraordinary facility/funding needs.  He pointed out these funds will only be utilized with approval of  the Legislature, or the Interim Finance Committee.

 

Senator Raggio asked for an update on the Lied Library, scheduled to open in January 2000.  He said three legislative sessions have approved more than $58.2 million, of which $42.2 million was state funding.  He recalled the State Public Works Board requested $532,000 for cost overruns. He said additional funding was authorized by IFC and there were still claims from subcontractors. He asked what can be done to prevent something like this from happening.

 

Mr. O’Brien stated the audit will provide information on what exactly occurred.  He said there was apparently a situation regarding timing delays over a particular construction issue.  That was the start of the problems.  He reported the submitted claims are based on the time delay.

 

Senator Raggio asked who is monitoring the project.  Mr. O’Brien responded the State Public Works Board and the architects.  He said a claims auditor will review almost $6 million in claims to try to determine how much is really owed.  Senator Raggio asked whether the audit is under way.  Mr. O’Brien reported the audit is underway.  Senator Raggio asked whether the requested funding is to address claims that are determined to be valid.  Mr. O’Brien replied that it is. 

 

Senator Coffin remarked UNLV has accepted the Lied Library Building and moved in.  He asked whether it is a conditional acceptance, whereby a building can be occupied, and still uncompleted aspects in the building will be finished.  Mr. O’Brien explained most things are typically supposed to be done when a certificate of substantial completion is issued.  When the certificate was issued for the Lied Library, it was not close to being complete, Mr. O’Brien said.  In the meantime, Mr. O’Brien said, they have been working with the contractor in trying to get all the issues taken care of.  He noted the building was occupied on January 8, 2001.

 

Mr. O’Brien stated there were still some issues with the State Fire Marshall Division that the architect and interior designers need to work on.  He said once that is completed a final certificate of occupancy will be issued.

 

Senator Coffin said some students have informed him the library is rather dark at night.  Mr. O’Brien acknowledged there are some study areas around the perimeter that do not have good lighting at night.  He pointed out there is task lighting proposed for these areas.

 

Mr. Arberry assumed the chair of the meeting.

 

Mr. Patrick addressed Project 01-S5 of Exhibit E, the Statewide Paving Program.  He said there is a listing, by agency, in non-prioritized order, of paving projects totaling $4 million.  He said of the $4 million, $287,056 will come from highway funding and $712,000 from state funding.  Traditionally, he stated, a list in the $3 million to $5 million range has been presented.  However, this year it was decided to request $1 million.

 

Mr. Patrick explained that Project 01-S6 of Exhibit E is for the Statewide Asbestos, Lead, & Indoor Air Quality Program.  He said this program basically is to support renovations in planned CIP projects shown elsewhere in Exhibit E.  Mr. Patrick pointed out a $25,000 discrepancy in costs for construction.  He said the amount should be $405,000 and the $25,000 difference needs to be resolved.

 

Senator Neal asked how far along the state is in completing this program.  Mr. O’Brien explained the asbestos and lead needs to be addressed on an as-needed basis.  He said there is not a program to remove the asbestos or lead paint from every building.  He stated the program is to support new construction or renovations.

 

Senator Neal asked why this would be support for new construction, when the requirement is that there will be no asbestos or lead in buildings.  Mr. O’Brien agreed this is primarily to support renovations.  Senator Neal asked whether there are still state employees working in state buildings with asbestos and lead paint.  Mr. O’Brien stated there are still state buildings with asbestos, but they are maintained in place. 

 

Mr. O’Brien said the state went through a comprehensive inventory system of locations believed to have asbestos and there was a determination as to whether it was friable. He said asbestos deemed to be friable or causing exposure to individuals, is acted upon as an operations and maintenance activity or it can be included in the statewide program.  Mr. O’Brien stressed the program in Project No 01-S6 is to support renovations.

 

Mr. Patrick explained there is a federal law requiring underground storage tanks to be removed and the deadline for removal passed a few years ago.  He said as the state acquires new properties, additional tanks are being discovered.  He pointed out Project 01-S7, Statewide Underground Storage Tank Removal, outlined in Exhibit E, will remove or close existing underground storage tanks (UST) and replace those tanks with new above-ground tanks or an alternative fuel source.  He said many of the remedial costs are reimbursable from the state Cleanup Petroleum Discharge Fund. However, it is necessary to have working capital to perform a cleanup prior to reimbursement.

 

Mr. Patrick stated Project 01-S8, shown in Exhibit E, is a Statewide Energy Program to conduct energy retrofits.  He noted the agencies requesting retrofits are listed on page 01-S8 of Exhibit E.  He said the state is limited to $5 million of debt in the energy retrofit statute.  He stated one of the conclusions of the Governor’s energy commission is that the limit should be raised.   He referred to the listed requests, which total $9.8 million, as evidence of the need to raise the limit.

 

Mr. Patrick stated there is currently a project to replace lighting in most of the Capitol Complex Buildings, as well as those occupied at the Stewart facility.  He noted the Board of Examiners approved the $2 million contract in the fall of 2000.  He said the Public Works Board estimates the total need for energy retrofit programs to be $20 million to $40 million.

 

Mr. Patrick pointed out this project is not requesting funds, rather consideration for upgrading the amount of debt that can be used to increase the amount of energy retrofits done on state-owned facilities.

 

Senator Raggio resumed chairing the meeting.

 

Senator Neal asked whether this request is in response to the energy costs, causing the Governor to assume nothing else can be done to roll back energy costs.  Mr. Patrick explained there is a recognized payback for conducting energy retrofitting on state buildings.  He said it is estimated the work can be done and the projects paid back in five to seven years.

 

Senator Neal inquired whether the increase in energy costs was taken into account when this project was under consideration.  Mr. Patrick maintained he has been championing this project for several years.  He pointed out the payback period should be shortened with the rising energy costs.

 

Senator Neal asked whether this project has been reconsidered since there is an indication that energy costs will go up.  Mr. Patrick said under the old circumstances, with rates being approximately 60 cents per therm for gas and 5 or 6 cents per kilowatt hour for electricity, it made sense to propose $20 million to $40 million for work in this area.  He stated for every dollar the price of energy goes up, a greater savings is created.  He maintained an increase in energy costs would only increase the necessity to complete more energy retrofits.

 

Senator Neal said the Governor has suggested that energy costs for the state have gone up over 17 percent.  He asked how long it would take to get this program in place before some benefit could be received.  Mr. Patrick replied there is currently an active contract and with authorization to increase the debt limit, contracts can be issued to do recommended design work to increase the efficiency of state buildings.

 

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Budget Account 101-1560

 

Gary Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained the Legislative Committee for the Fundamental Review of the Base Budgets of State Agencies met and reviewed the inspection section of the Public Works Administration budget.  He said the review committee made a number of recommendations to be utilized in developing the budget for the 2001-2003 biennium.  He pointed out a number of the recommendations deal with performance indicators.  He said there was concern regarding the plan for accurate allocation of costs in providing inspection services to various projects, as well as the fee charged to school districts for administrative costs. 

 

Mr. Ghiggeri reported there was a suggestion to consider the transfer of some positions to the Las Vegas office based on the cost being incurred for the manager and deputy manager to travel to Las Vegas.  He said concern was expressed by the committee regarding the use of General Fund positions in the inspection function of the board.

 

Regarding allocation of costs, Mr. O’Brien said it has come to his attention that public works has not established a cost accounting system.  He stated the previous Legislature required this be addressed.  He explained it is his understanding the position funded for this purpose was filled, but the staff in accounting was short and there were a number of vacancies, so no cost allocation system was developed.  He maintained that before cost accounting can be done for various projects a system must be developed.  Mr. O’Brien explained there must be a history of costs associated with various projects.  He added that those working on the projects must account for the time they spend on the different projects.

 

Mr. O’Brien stated the inspectors typically keep a log of their time and what they are working on, but project management staff and administration staff do not.  He stressed there must be a base established to work from.

 

Mr. O’Brien said fees to the different agencies tie back to the General Fund allocation.  He said he does not disagree with any of the agency’s dissatisfaction with the fees because there is nothing to base the fee on except a formula.  He pointed out even the project managers do not agree with the formula.

 

Mr. O’Brien agreed there is management needed in the Las Vegas office.  He said one of the enhancement requests is for a project manager assigned to Las Vegas.  He stated he is finding there is no one in Las Vegas taking responsibility for the entire office.  Being new in this position, this has caused him concerns.  He said he can see a project manager for the Las Vegas office, just as there is one in Carson City.

 

Mr. O’Brien stated many of the project managers have been overextended in their responsibilities.  He pointed out the Lied Library project is a perfect example.  He said everyone needs to begin addressing some of these issues.  He noted the enhancement requests will improve the management of projects.

 

Mr. Arberry asked about the issues that came up during the meeting of the Committee for Fundamental Review of the Base Budgets.  He requested those issues be addressed to staff in writing.  Mr. O’Brien agreed.

 

Senator Raggio noted there are serious questions whether the 6 positions requested will be necessary if all of the recommendations are put in place.

 

Senator Coffin remarked he has been told the State Public Works Board did not have enough people on site at the Lied Library to monitor the project.  He emphasized it is important to demonstrate why a position is needed.  Mr. O’Brien said there needs to be more than one on-site coordinator for large projects.  He pointed out the Governor supports the position requests.

 

Senator Coffin asked what the rules are regarding receiving gifts from contractors.  Mr. O’Brien answered the rules are only the state requirements and procedures.

 

Ms. Giunchigliani inquired about the project management and inspection fees.  Mr. O’Brien explained the fees are assessed based on a formula, which generates more from larger projects than smaller projects. He pointed out the smaller projects have proportionately higher fees.  He said the formula does not take this into consideration, so there is always the issue of using project management fees for other purposes.

 

Ms. Giunchigliani asked whether the formula is based on what is budgeted or what is expended.  Mr. O’Brien answered the construction cost is put into the formula and the fee is generated. 

 

Mr. Patrick explained a logarithmic formula is used.  He said the larger projects pay a smaller percentage fee.  A large project might have a fee of 2 percent and a very small project would have a fee of 12 percent.  He said the formula is applied to every project and if that does not match the need, another factor is added to meet the demand for funds.

 

Ms. Giunchigliani said if there is the ability to charge for full project management and inspection costs and not enough is being charged, it seems there is a problem with the formula.  Mr. O’Brien maintained the funding is in each of the projects.  Ms. Giunchigliani asked how it is charged.  Mr. O’Brien answered it is part of the construction project costs.  He said if there is an $8 million project, the actual construction might only be $6.5 million, the rest is fees for the plan check, construction, administration, etc.  He explained, because there is no cost accounting, there is no way to know what the true administrative cost  for the project is. 

 

Ms. Giunchigliani asked how many bids were received for the Lied Library Project.  Mr. Patrick replied there were between 10 and 15 bidders.  Ms. Giunchigliani inquired who did the final selection.  Mr. Patrick said it was based on low bid, as required, as well as responsible and complete bid forms.  Mr. Patrick pointed out the construction company has submitted approximately $6 million in claims.  Ms. Giunchigliani pointed out the state has not done a good job in negotiating contracts.

 

Mr. O’Brien said the entire issue of low bids is a concern.  He said the Legislature had addressed this issue on the prequalification of bidders.  He emphasized the modification that occurred last legislative session removed a lot of the “clout” the state had, because past performance of the construction companies could not be reviewed.  He said solutions are being sought.

 

Senator Raggio asked what the present status is of the facility audit program.  Mr. Patrick answered he would like to address one item related to how it is being utilized in the CIP development process.  He said the primary focus of the audits has been on prison and human resources facilities.  He explained reports have been developed and the primary focus has been on buildings expected to be on the maintenance list in the CIP projects.

 

Mr. Patrick called attention to the summary list of the projects for maintenance.   He said facility audits have been done on more than half the facilities.  He pointed out there is a $900,000 recommendation from the facilities audit group for the Clear Creek Youth Center.  He said a large part of the facilities maintenance recommendations, and requests from the agencies, are developed from a “facility condition analysis.”  He maintained this analysis plays a significant role in developing the maintenance requests, as well as major renovations requests.

 

Mr. Patrick said one project on the maintenance list is the Nevada Highway Patrol Building in Las Vegas.  He noted a construction assessment and facilities audit was conducted to recommend renovations.

 

Senator Raggio asked how many positions are requested in the Facility Audit Program.  Mr. Patrick answered three.  Senator Raggio pointed out one of the concerns is whether the positions are being used appropriately.  He said there is information one of the positions approved for the Facility Audit Program performed management and inspection duties on the Lied Library for much of FY 2000.  He maintained these duties should have been performed by the Inspection Division.

 

Senator Raggio noted the legislative committee for fundamental review found another of the positions approved for the audit program was assigned the task of conducting school plan reviews.  He pointed out this could have been supported by fee inspections rather than the General Fund.  Mr. O’Brien stated that positions intended for one function cannot justifiably be used for another function.

 

Mr. O’Brien acknowledged some positions were performing functions other than what was intended.  He said he was unable to explain why previous management staff had allowed such work assignments.  He noted that occurred before his being hired as manager.  He stated his direction is to move individuals into proper accounts right away and the agency is in the process of doing so.

 

Senator Raggio asked whether a better formula is anticipated for estimating project management and inspection fees.  Mr. O’Brien answered he thinks that can be done. However, he added, the question is whether there is any data to develop something for this legislative session.  Senator Raggio recalled there was a similar comment made last session to the same request.  Mr. O’Brien said he understands that.  He explained that process can be developed, but the baseline data for what should be charged will need to be developed over a period of time.

 

Senator Raggio pointed out accountability is lost when funds are used for purposes for which they were never intended.  He said there is not the desire to micromanage, but there must be some accountability.  He pointed out the authorization of funds is based on what is represented to this committee.

 

E-900 Transfer to Budget Account 1371 – Page ADMIN-94

 

James Manning, Budget Analyst, Budget Division, Department of Administration, said in this budget there is a request to transfer two accounting positions to the Administrative Services Division, within the Department of Administration, to help take care of normal accounting activities. 

 

Public Works Inspection – Budget Page ADMIN-96  (Volume 1)

Budget Account 401-1562

 

E-901 Transfer out to Budget Account 1371 – Page ADMIN-101

 

Mr. Manning pointed out there is also a recommendation in Decision Unit E‑901 of Budget Account 1562 to transfer five other positions to the Administrative Services Division.  He said this is to ensure maximum efficiency within the Department of Administration.

 

Mr. Manning stated he is aware of the fundamental review committee issues.  He said he has not had the opportunity to work with fiscal staff to ensure the concerns were addressed prior to closing the budget, but he said he will work to resolve the issues.

 

Senator Raggio emphasized the committee has serious concern.  He said that in the past the board has appeared to assess fees on projects based on available funding, rather than on actual costs.  He pointed out some of the funds used are from federal sources and an audit might result in a request for repayment of some funding if appropriate spending cannot be justified.

 

 

E-275 Working Environment and Wage – Page ADMIN-99

E-276 Working Environment and Wage – Page ADMIN-99

 

Senator Raggio asked how the seven requested positions in E275 and E276 will be funded.  Mr. Manning explained that typically the Administrative Services Division of the Department of Administration allocates, through an administrative charge, what is needed to fund the Administrative Services Division budget.  He said that, in this instance, since it has never been allocated in the inspection account for this service, the total and associated costs of the positions will be offset in the Administrative Services Division budget by charging back the same amount to the Public Works Inspection budget.

 

Senator Raggio asked whether this will be more efficient.  Mr. Manning responded he has seen, through his dealing with administrative services, there is a good understanding of accounting functions and the unit is effective.

 

Senator Raggio asked who will supervise the current Deputy Manager of Administrative Fiscal and Constructional Services.  Mr. O’Brien stated that position would not be transferred.  He said only accounting positions would be transferred to administrative services.  Senator Raggio asked who would report to the deputy manager position.  Mr. O’Brien answered the administrative staff in the office would report to that position.

 

Mr. Comeaux explained all the accounting staff for the various divisions of the Department of Administration are located in the Administrative Services Division with the exception of the State Public Works Board.  He said with some of the existing problems, it is past time to move the accounting positions from the State Public Works Board to the Administrative Services Division.  He pointed out this move will produce a variety of benefits.  He said the accounting staff will be working alongside the accounting staff in administrative services and they will be able to support each other.  He stated if there is a vacant position in one area, someone from another position can fill in and there will not be foul-ups as result of being understaffed. 

 

 Mr. Comeaux emphasized the Chief of the Administrative Services Division is an extremely competent accountant with a great deal of experience in cost allocation plan development.  He emphasized the accounting services that will be provided to the State Public Works Board will be superior to what is currently being done.  He said having project managers autonomous from project manager accountants will ensure the project accounting records are accurate.

 

Mr. Hettrick agreed with removing the accounting positions to the Administrative Services Division.  He said he has submitted a bill addressing some of the issues discussed and would look forward to working with Mr. O’Brien to develop the bill.  He stated this is an opportunity to change the structure and pointed out to the committee that  Mr. O’Brien has been open and willing to discuss the issues.

 

Senator Rawson asked whether the State Public Works Board goes through the State Fire Marshall Division for plan checking.  Mr. O’Brien replied the projects do go through the state fire marshall’s office.  He explained that in the past, the State Public Works Board has not always gone through that office, but a policy has been instituted requiring plans to go through the state fire marshall’s office.  He noted that many times in the past, the projects have gone to bid before being submitted to the state fire marshall’s office, and in some cases projects are already under construction when life‑safety issues are defined.  He stressed the desire for a true “plan check” process that will identify major code problems at the beginning of projects.  He said projects will not go out to bid until the state fire marshall’s office, as well as any other regulatory agency, has “signed off” on the project.

 

Senator Rawson inquired whether there is any reason the kind of personnel needed cannot be placed in the State Public Works Board versus having to go through the fire marshall’s office.  Mr. O’Brien agreed that would be possible.  Senator Rawson asked   if a project is done in one of the larger counties, whether it has to go through local fire departments for review.  Mr. O’Brien said the local departments do look at the plans.  Senator Rawson stated he is not sure there needs to be redundancy for projects done in large counties that are capable of doing the reviews.  He said he would like to see what the cost is to have the State Fire Marshall’s Division check plans.

 

Mr. O’Brien pointed out there is a line item in the budget indicating the costs for fire marshall plan reviews.  Senator Rawson noted the real cost is more than the funding to that agency.  He said delay and redundancy result in additional costs.

 

Senator Raggio said there is a request under decision unit E-275 to upgrade two half‑time positions to full-time, constituting a net addition of one position.  He said five new positions are requested in decision unit E276.  He said the summary shows 53 total positions.  He asked how many positions would be in the Inspection account after the transfer of the accounting positions.

 

Mr. Manning explained there are currently 51 positions in the Public Works Inspection Budget.  He said the request is to upgrade two half-time positions which would bring the total positions to 52.  Senator Raggio asked what the inspection manager positions will do and what the necessity is for five additional positions.

 

Mr. O’Brien explained the Building Department Manager position is a Project Management IV position.  He pointed out this position will be responsible for coordinating all the “plan checks” and making sure projects are checked and approvals are received before projects are sent out for construction.  He said the Office Manager position for the Las Vegas office would be responsible for the inspectors, the project coordinators, clerical staff, and other project managers in the Las Vegas office.

 

Mr. O’Brien said he anticipates another Project Manager position to be located in the Las Vegas office.  He pointed out most of the larger projects are in the Las Vegas area.  He said there is a position request for Mechanical Project Manager, noting the current manager is logging many hours of overtime.  He said that, obviously, when compensatory time off is taken, there is no Mechanical Project Manager available.  So, in the past he has been paid for the time rather than taking it off, Mr. O’Brien added.

 

Mr. O’Brien explained the Management Analyst position will be responsible for setting up a good project management program.  He said currently there is no automation when it comes to project managers.  He stated if there is to be a good accounting system, this would be important.  He described a software program that allows agencies to enter requests and information directly through an automated system, so the information can be readily available and would not have to be reentered.

 

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Budget Account 101-1560

 

Senator Raggio stated it seems there should be some capability of reporting on Performance Indicators 4 and 5 in the Administration account.  Mr. Patrick explained the projects approved by the 1999 Legislature had not been bid at the time of this budget report, so there is no information to accumulate.  Senator Raggio asked whether information is available now.  Mr. Patrick said there should be significant information on item five.  He agreed to provide updated information.

 

Mr. Parks recalled that during the last legislative session there was discussion relative to the organization chart.  He requested an updated copy for the new biennium, reflecting not only the number of positions, but also where the positions would be located.

 

Mr. Patrick stated organizational charts will be provided: one of existing conditions and one showing where the proposed positions will be located.

 

Senator Raggio adjourned the meeting at 3:55 p.m.

 

 

                                                                                         RESPECTFULLY SUBMITTED:

 

 

 

           

Patricia C. Hampton by

Debra Petrelli

Committee Secretary

 

APPROVED BY:

 

                                                                                         

Senator William J. Raggio, Chairman

 

DATE:                                                                             

 

 

______________________________________________

Morse Arberry Jr., Chairman

 

DATE:________________________________________