MINUTES OF THE
BUDGET SUBCOMMITTEE
OF THE LEGISLATIVE COMMISSION
Seventy-First Session
January 29, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 10:14 a.m., on Monday, January 29, 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 Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
SENATE COMMITTEE MEMBERS ABSENT:
Senator William R. O’Donnell (Excused)
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. Bob Beers
Mrs. Barbara K. Cegavske
Mrs. Vonne Chowning
Mr. Joseph E. Dini, Jr.
Ms. Christina R. Giunchigliani
Mr. David E. Goldwater
Mr. Lynn C. Hettrick
Ms. Sheila Leslie
Mr. John W. Marvel
Mr. David R. Parks
Ms. Sandra J. Tiffany
ASSEMBLY COMMITTEE MEMBERS ABSENT:
Mr. Morse Arberry Jr. (Excused)
Mr. Richard D. Perkins (Excused)
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Mark W. Stevens, Assembly Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Steve Abba, Principal Deputy Fiscal Analyst
Jim Rodriguez, Program Analyst
Rick Combs, Program Analyst
Bob Williston, Committee Secretary
OTHERS PRESENT:
Jonathan Sias, Director, Nevada State Veterans’ Nursing Home
Charles W. Fulkerson, Executive Director, Office of Executive Director for Veterans’ Services, Office of Veterans’ Services
Larry Berry, Administrative Service Officer, Nevada State Veterans’ Nursing Home
Terry Savage, Director, Department of Information Technology
Mark Blomstrom, Deputy Director, Communications and Computing Division, Department of Information Technology
Shelly Person, Chief, Planning and Programming Division, Department of Information Technology
John P. Comeaux, Director, Department of Administration
Carlos Brandenberg, Ph.D., Administrator, Division of Mental Health and Developmental Services, Department of Human Resources
Dave Luke, Associate Administrator for Developmental Services, Division of Mental Health and Developmental Services, Department of Human Resources
Michael Torvinen, Administrative Services Officer, Division of Mental Health and Developmental Services, Department of Human Resources
Donna Shibovich, Greeter, Publications Person, and Consumer Representatives for the National Alliance for the Mentally Ill of Northern Nevada
Brian Lahren, Ph.D., Lobbyist, Washoe Association for Retarded Citizens, Inc.
Joe Tyler, President, National Alliance for the Mentally Ill of Northern Nevada
Sue Dunt, Risk Manager, Risk Management Division, Department of Administration
Donald L. Bailey Sr., Chief, State Printing Division, Department of Administration
Frank Revell, Chief, State Motor Pool, Department of Administration
Bill Moell, Chief, Purchasing Division, Department of Administration
Bryan A. Nix, Senior Appeals Officer, Appeals, Hearings Division, Department of Administration
SOUTHERN NEVADA VETERANS HOME – OVERVIEW
Veterans Home Account – Budget Page VETERAN-7 (Volume 3)
Budget Account 101-2561
Mr. Jonathan Sias, Director, Nevada State Veterans’ Nursing Home said the goals of the nursing home have remained unchanged since the original concept was presented to the legislature in 1997. He reiterated the intent is to provide state-of-the-art skilled nursing services to resident Nevada veterans. Membership in the National Association of State Veterans’ Homes and federal statute require that no more than 25 percent of beds may be occupied by non-veterans, who would be the living or surviving spouses of veterans. Except for Medicare and Medicaid, he said, the non-veteran residents would be required to be “self or private pay” as they would not qualify for either Veterans Administration (VA) per diem or state funding on the basis of military service.
Mr. Sias said the original construction schedule called for a completion date of May 1, 2000, but the opening of the home was delayed for a variety of reasons. He explained the chief reason was the difficulty of selecting a site and a general contractor, and the inadequacy of coordination and management. A revised State Public Works Board completion date was established for September, and then moved to February. The current projected date of substantial completion is March 31, 2001, he added.
Senator Raggio asked what “substantial completion” means. Mr. Sias responded that substantial completion is a construction concept that means the contractor has fulfilled the contract with the state. It means the building is ready to be moved into by the staff, who will go through a punch list. A punch list, he explained, is an itemizing of all the things that need to be repaired, fixed, or changed, based on the state public works process. He noted that this is followed by the licensing and certification process.
Senator Raggio asked when it can be expected the home will be ready to receive residents. Mr. Sias responded he anticipates the first general residents to be admitted in the last week of May of 2001.
Senator Raggio inquired whether residents could be accommodated if some of the landscaping and some of the infrastructure are still not completed. Mr. Sias assured him that patients could be accommodated. Mr. Sias explained that when the land was acquired for the nursing home it was agreed the facility would meet local landscaping ordinances, and added that he is waiting for word of approval from Boulder City. He said that he has communicated with the city on this matter and was waiting for its response. Senator Raggio requested Mr. Sias raise the matter again with the city and provide the committee with a response the next day or, he added, Mr. Sias could tell the city staff to call him personally. The Senator explained that he was addressing the committee’s concern that continued delays had also incurred additional costs.
Mr. Sias stated certain staffing and census decisions are already in place. To maximize staffing, census, and case mix, he explained, an incremental start-up plan has been devised. He indicated staff will be brought on at day 1 of a census period so there will be enough people on hand to care for the last resident to be admitted in that period. This means if they plan to bring in 45 residents in the month of June, the facility will have the staff to handle that number on the first day of June. This plan was devised to ensure there would be adequate staff to care for all residents, he added.
Senator Raggio inquired whether all the residents qualified as skilled nursing patients, and Mr. Sias replied that they would. Senator Raggio asked about the number of residents initially anticipated. Mr. Sias responded that they had three wings for 60 residents each, but the building would initially be staffed for 45 residents. He said that at the end of that census period the facility will bring on the staff for the next wave of residents.
This whole pattern, Mr. Sias explained, is based on the facility’s ability to attract and recruit qualified clinical staff. He explained that the national nursing shortage that currently exists has been more heavily felt in southern Nevada because of growth in that area. He explained that their opening would add 100 vacancies to the present 600 nursing vacancies in the region. He pointed out that makes the attraction of qualified nursing staff the first great concern.
Mr. Sias said the second critical issue confronting the facility is the funding necessary to complete the project. Funding which originally existed for one-third of the landscaping no longer exists. He indicated funds to complete this project need to be funded before new construction projects are funded.
The third issue Mr. Sias identified as a great concern is the situation of indigent veterans applying for admission. He said he has not been able to find any clear indication of what the legislature expects in this regard. He said he receives calls weekly about veterans who are homeless and veterans who cannot afford the co-payment. He recalled that a week earlier the Governor had made an announcement regarding relief for nursing homes, but he had no idea how that would impact this nursing home. Medicaid, he said, is a major source of funding for indigent care, but he noted these funds are not even enough to cover the cost of the veteran’s co-payment. He said the only relief might be if the facility is allowed to participate in the Medicaid program and receive funding from the General Fund.
Mr. Sias said the state Medicaid program prescribes three levels of skilled nursing care. Skill level 1 requires treatment procedures daily, including such things as dressing, precautionary techniques, wound care, catheter or tube care, assistance with procedures, simple trachea care, and minimal routine suctioning. Each of the other two levels of care requires the same as level 1 plus increasingly acute levels of care. The resident is evaluated at admission and assigned a skilled nursing level, he noted.
Senator Raggio asked what numbers of residents were expected at each level, and Mr. Sias said the facility expects approximately 60 residents in each level of care, for a total of 180 residents. He said they plan to put the residents at the low end of the first level in the vicinity of the 24-bed area of dementia care, because those residents will require the least amount of daily care. The third level residents, the most acute residents, will be in the central nursing neighborhood. The middle level will be on the third side because it is closest to the therapies section of the home, and they will be the people with the greatest demand for therapies.
Senator Raggio asked whether the levels of care would require different levels of staffing, and Mr. Sias confirmed that the 24-bed dementia neighborhood would require greater numbers of staff than the other parts of the facility.
Senator Raggio asked whether any analysis has been done regarding the cost of operation per day per patient. Mr. Sias said that for fiscal year 2002 the facility would be 80 percent occupied, and for 2003 it would be approximately 93 percent occupied. Because of the costs inherent in running the building, whether there is one resident or 180, he said the daily costs will be a sliding scale. For fiscal year 2002 it is estimated that the daily cost per patient will be $178.31. For fiscal year 2003 it is projected to be $161.48.
When asked how this cost would be paid, Mr. Sias said there would be three sources of revenue. One third would come from the federal Department of Veterans Affairs per diem payment. Senator Raggio pointed out that this only amounts to $51.38 per day. Mr. Sias acknowledged that this was less than one-third of the cost. He said residents will be required to make co-payment up to their ability to pay that is equal to what the veterans administration pays, which brings the amount to $102 per day. He said for the first year this would mean the state General Fund would be paying $76 per day, but for the second year, when the facility is at full occupancy, the total daily cost would be reduced to approximately $150 per day. The veterans affairs money and the co-payments would remain the same, and the reliance on the General Fund would go down.
Senator Raggio asked Mr. John P. Comeaux, Director, Department of Administration, whether this is the Governor’s understanding of the operation, and Mr. Comeaux said he believed it was. The Senator further asked him what is in the budget for the patients who cannot pay. Mr. Sias said the original plan was to not
rely on Medicare as a substantial source of revenues. He said Medicare pays up to 100 days of skilled nursing care. He added that if there is a significant event such as a 36-hour hospitalization following the 100 days, the 100 days may apply again.
Mr. Comeaux added that, included in the budget for the current biennium, is a provision for Medicaid reimbursements in the second year in the amount of $83,195. Also, he said, a small amount is included in the first year with a larger amount in the second year for receipts from local governments for indigent care. Senator Raggio asked what kind of receipts were anticipated from local governments, and Mr. Comeaux said he would have to check on the specific fund which is related to hospital stays that are not accident-related. Senator Raggio requested that a specific identification of the fund be made, and Mr. Comeaux assured him that would be done.
Mr. Sias then addressed certain areas of the previously approved budget for fiscal years 2000 and 2001 about which he has concern, including contracted services, and technology. He said the facility has requested additional funding for these areas, as well as a $200,000 increase in category 86 reserve to cover a projected shortfall in these categories.
Another area Mr. Sias identified as needing attention is temporary agency staffing. He said the nursing home administration have worked with the budget analyst and the Legislative Counsel Bureau (LCB) in these areas and have included line item details of personnel costs, including overtime, shift differential, standby, and holiday pay in the budget request.
Mr. Sias said another concern that was addressed in the past year was a change from in-house food service to a contracted food service. The food service personnel and raw food costs were deleted, and a new category 08 was created for the food service contract. It was determined that converting to a food service contract is a benefit to both the state and the nursing home. The contract award was made in January 2000 to H. D. S. Food Services. A worksheet calculating the food cost at $727,666 is included in the document entitled Nevada Veterans’ Nursing Home (Exhibit C.) He said that the Governor recommends $711,000.
Mr. Sias said the previous nursing home budget provided no category 26 technology funding. Funds were created in the state public works project 97-C16 for computer hardware and some software only. This present budget request allows for category 26 needs for such mandatory monthly costs as Department of Information Technology (DoIT) charges, maintenance, software upgrades, and additional hardware needs in the next biennium. Mr. Sias also said they have eliminated the need to include the $35,000 in software purchases in next year’s budget. As a result, the Governor’s recommended amount in Category 26 is $35,000 more than is needed.
In Category 01, Salaries and Benefits, Mr. Sias said he had been advised by both their budget analyst and staff at LCB that they should include a full-time dietician to provide dietary services to residents and oversight of the food service contract. This position would be a Dietician II, and the estimated annual cost is $49,691. However, he said, funding for this position was not included in the Governor’s recommended budget. This is the only additional position in question.
Mr. Sias said that, despite several small concerns, this budget provides the ability to successfully open and start the operation of the State Veterans’ Nursing Home. He said frequent trips to the Interim Finance Committee (IFC) are expected during the first year of operation to work out problems in the program.
Mr. Sias repeated the concern of recruitment and retention of nursing staff. For this reason, he said, he is proposing the creation of a new nursing classification, the geriatric registered nurse, similar to the psychiatric nurse class already in existence. This would be expected to have some fiscal implications for the nursing home budget, he said.
Another concern, Mr. Sias added, was that funding in the Governor’s recommendation for contracted services appears to be low. He is awaiting the opening of a request for proposal (RFP) for pharmaceutical services, and they are pursuing contracts for physical, occupational, and speech therapies as well as a diagnostic lab service. He pointed out that the unpredictable nature of skilled nursing care and an unknown caseload make estimating these services extremely difficult. In addition, he added, the need for making use of staff agency nurses to provide temporary registered nurses, licensed practical nurses, and certified nursing assistants has not been funded at this time.
Mr. Sias added that the possibility of providing nursing staff uniforms has been discussed at length. The Nevada Department of Wildlife has an RFP for 190 uniforms. Despite the sensitive nature of the topic, he said this may help make a difference in delivering and recruiting and retaining clinical staff. He noted that their request for these funds had been eliminated by the budget staff after their submission of the budget.
Charles W. Fulkerson, Executive Director, Office of Executive Director for Veterans’ Services, Department of Veteran Services, commented that, as the World War II veteran population increases, the facility would see an increase in the need for level 3 care through the year 2008. This number, he projected, would go back down until the Korean War and Vietnam veterans come to that age and start using the facility. He added that there is a meeting later the same morning with the State Public Works Board, and the questions involving Boulder City and the landscaping will be part of that discussion. He also will have a meeting later in the week with Senator Jacobsen and Assemblyman P. M. “Roy” Neighbors on some of the other questions raised in this meeting.
Senator Raggio noted there is a significant amount of money for medical equipment in the public works capital improvement project 01-C8 as well as in the budget. He expressed concern that there might be some duplication on the medical equipment, and indicated the committee would need to look at that. Mr. Fulkerson assured him the department would check that.
Mr. Sias added that there might be an overprojection in the increase in the therapies portion of the contract services in the budget. He pointed out the department was required by federal survey technical assistance grants (TAG) and state statute to provide a variety of therapies for the residents in the nursing home. The federal survey TAG 310 and TAG 317 have specific references to a level of therapies, physical, occupational, and speech, that they are required to provide to the residents of the nursing home.
Senator Raggio noted that the budget indicated $406,000 in fiscal year 2002 and approximately $418,000 in 2003, and asked whether that is adequate for those purposes. Mr. Sias responded that it is very hard to estimate, and they are working on those contracts, including the pharmacy RFP that is out at this time. Senator Raggio asked whether there is any thought, since the federal government is going to mandate the level of these services, that the federal government might reconsider the level or reimbursement for the cost of the veterans’ care, considering that $51 a day would not provide a lot of special services. He also noted that much “lip service” is given to providing such services, and expressed his hope that the federal government could reconsider the level of reimbursement they are providing. Mr. Sias assured that he would investigate that possibility.
Senator Jacobsen indicated that he chairs the Nevada Veterans’ Services Commission and he feels the commission is on top of the situation, realizing it is a new venture for them. He said the commission had toured facilities in surrounding states to see what their capabilities were. The commission had also discussed privatization. He expressed that it was his feeling that this is a veterans’ affair and he wants the veterans to be tied to it with responsibility. He said they have received offers of volunteer help, and they plan to use some inmate crews to help take care of the outside area.
Senator Jacobsen pointed out that the commission had some breaks along the way because of a change in administrators, and indicated that Chuck Abbott, one of the former administrators and still with the office, was present. Also, he pointed out, present was Ray Alcorn, a former director and captain of the Fallon Naval Air Station, whose services are still available. He said the commission has been meeting on a regular basis with the State Public Works Board, who have had a change also. All things considered, Senator Jacobsen expressed assurance that the veterans could be taken care of in a first class manner. He stressed that this project should not be considered a retirement home, but a facility for offering medical attention. He urged legislators to tour the facility.
DEPARTMENT OF INFORMATION TECHNOLOGY BUDGET OVERVIEW
Terry Savage, Director, Department of Information Technology, distributed an outline entitled Presentation for 2001 Legislative Pre-Session Budget Hearing (Exhibit D) and a binder entitled Department of Information Technology, FY02-03 Legislative Information (Exhibit E. Original is on file in the Research Library.) which includes the budget information and the most recent update to the technology strategic plan, including the formal capacity plan and a detailed explanation of Phase 2 of the digital microwave proposal.
Mr. Savage said there have been a lot of changes since the last time the department made such a presentation as this, most visibly the complete changeover in the executive staff in the past six months. He said the department has been faced with technology, fiscal, and organizational challenges, as well as the unambiguous survey finding that their customer service record was awful. He said his staff is committed to a complete reversal to that response from the customers, and confirmed there has been a fair amount of progress on that issue since they had taken their posts.
Mr. Savage said one of their main accomplishments recently was getting a handle on managing their mainframe capacity problem. He explained that a little over six months ago both the computer facility manager and the computer facility operations manager resigned on the same day. He said he decided at that time, since he was deputy director for technical operations, to actively assume those roles himself and “live” in the facility, and he proceeded first with capacity planning. He indicated he met with customers to get an understanding of what their needs are and evaluated that against their capacity. What became immediately evident was that the mainframe was almost entirely saturated and would be fully saturated within a very short number of weeks. He stated that this situation came without warning, and that they did not have a handle on the process of managing that capacity.
Mr. Savage related that from the occasion of his first appearance before the DoIT oversight committee in August 2000, when DoIT presented its central processing unit (CPU) problem, to the point of actually installing the upgrades was about five weeks. This, he said, was accomplished in record time. As a result, neither the R-46 nor the R-35 system, reached full saturation and are proceeding quite comfortably at this time. He pointed out the customers reported surprise and appreciation that they had been consulted.
Mr. Savage reported that the decision was made at that time to update the capacity plan every quarter rather than every two years because this business changes very quickly. Since that time, he indicated, the quarterly forecast has been expanded to include a strategic plan. He said the first formal version was completed in October 2000. He noted the next version, included in Exhibit E, was completed in January 2001. An update to this will be provided in April and in every quarter after that, he added. He pointed out that because of the way technology changes, the department needs to look at its operations on a quarterly basis to avoid moving in the wrong direction.
Mr. Savage said that in September 2000 he appeared before IFC and requested approval for an additional upgrade of the R-46 to an R-56 configuration. This was primarily based on the department’s projected CPU utilization of the Nevada Operations Multi Automated Data Systems (NOMADS) and Unified Nevada Information Technology for Youth (UNITY) programs during that period of time. He indicated that the department utilization estimates were very preliminary and, although the numbers indicate a need for additional capacity, the department would like to wait and watch growth in CPU utilization for a while before they actually institute the indicated upgrade. He noted that, if needed, upgrades cost about $1.2 million, and it is desirable not to spend that amount until necessary. The normal utilization thresholds for capacity planning for central processing unit (CPU) upgrades demand that one pay attention when utilization reaches 80 percent of capacity and start to panic when it reaches 90 percent. He said that the state’s mainframes are currently running at about 85 percent capacity.
Mr. Savage said he is still hoping to avoid the upgrade to the R-56. To accomplish this they are working with the NOMADS team to redesign the database queries, which could substantially reduce the demands on the mainframe system. He said the department is also looking at a way to offload some of the query processing that NOMADS does onto a server, which would further reduce the demands on the mainframe. He explained that these two efforts combined could conceivably reduce the NOMADS requirements on the mainframe by as much as 15 to 20 percent. He said if that level of savings is realized, it is possible to avoid the additional upgrade entirely. He estimated that the department should have a good idea of how that is going to work by the end of March.
In further discussion of NOMADS, Mr. Savage announced the systems are now certified, except for the paperwork. He noted this is a major accomplishment that has been awaited for several years. Prior to this, he said, the major effort of the NOMADS project has been to get it running and to get certification, both of which are now basically completed. Attention can now be turned to fixing some of the operational issues the users have and to turning it into a system that is more useable. He said that, in the long run, Nevada needs to look for a possible replacement for NOMADS.
Mr. Savage said he took the opportunity during the certification visit to go to Las Vegas and sit at one of the terminals to go through some of the NOMADS screens. He said the NOMADS application is like a state-of-the-art semi-conductor control program that he installed in 1988. He concluded that it will probably run fine, but at some point it will be outdated and Nevada will have to look into a replacement at some point in the future.
Another major accomplishment that Mr. Savage addressed was upgrades to the Department of Motor Vehicles and Public Safety (DMV&PS) Genesis communication hardware in the facility. He noted that earlier in the summer there were repeated outages because of what is called a token ring network. He said that was the main method of communication between the offices and the mainframe system both at the facility and at DMV&PS. He said that since the upgrade there have been no reports of communications outages for the last several months. Not only is the upgrade to a more modern connection completed, he added, the token ring remains in place as a backup. This, he pointed out, is in keeping with their proactive approach to fixing the root cause of problems.
Another major accomplishment Mr. Savage discussed was the analog microwave communication system. He noted the system still runs, and, given the age of the equipment, he described it as amazing that on the eastern edge of the state it is still running. But, he noted, it is dying. He said this is what the Phase 2 digital microwave proposal is designed to replace. He said they are already at the point of scavenging parts from old equipment, and significant parts of this equipment are not being made any more. He pointed out they will soon be getting custom made replacement parts, which cost a fortune. He proposed that the sensible thing is to upgrade to modern technology with Phase 2 of the digital microwave.
Another accomplishment Mr. Savage claimed will have one of the bigger impacts on the department’s budget for the upcoming biennium is the entire web services e-Government Silver Source constellation of projects. He noted they started last year with about five servers and now have over 20. He said the web services group was fractionated and coalesced into a single coherent unit, and proposes over the biennium to triple the size of that unit to meet the anticipated demand from agencies. One of the unambiguous instructions Mr. Savage says he received from the Governor is that he wants no “crummy websites” from state agencies. His instructions were to put in for the resources needed to make sure the department can bring the state up to par, no fancy frills, but something that is reliable and gets the job done in a professional manner.
One of the trends in technology, Mr. Savage noted, is away from large mainframe systems to more distributed processing. He explained that below the mainframe there are two tiers: the Unix class RS-6000 kind of machine, on which the integrated financial system (IFS) runs, and the NT server kind of platform. He said their expectation is that a significant fraction of the additional workload will be served by those more distributive systems, the Unix and the NT, in addition to ongoing mainframe requirements. One of the things he said he has been looking at is developing a methodology in the early stages of a project for determining what would be the most efficient platform over the entire life cycle of the project. He said that includes design, installation, transition if from an older system, ongoing operations, and at some point decommission. He noted that full life cycle evaluation is not something the department has historically done. This, he claimed, would help determine whether to put the system on a mainframe, on a Unix machine, on an NT box, or some mix of those systems. This, he said, looks like the most likely solution for NOMADS.
Mr. Savage said some of the more computation-intensive parts of NOMADS, eligibility calculation being one, are probably going to be on the mainframe forever. Some things like queries can quite sensibly be offloaded onto a server, thus saving the mainframe capacity. He said they want to develop a methodology for figuring out in advance when a project is being proposed and requirements being analyzed, which of those is most efficient.
Another thing Mr. Savage said the department is specifically looking at is strategic planning. He said DoIT has not previously done detailed technological strategic planning, but is beginning to do that now. He indicated the department will be expanding that beyond the mainframe and the computer facility to all of the services DoIT provides and ultimately to all of the technological capacity that the state has to deal with. He said such an enterprise-wide strategic plan is desperately needed. A step above that, he said, is that one cannot prepare a strategy until it is known what it is that one is trying to do. This, he said, is why DoIT has been going to agencies and asking them what they are doing and what they think they might be doing in the future. He said the present report (Exhibit E) is the department’s second pass at that, and the April version will be even better. The report a year from now, he said, will have a good solid enterprise-wide understanding of technological needs and a technical strategy for meeting those needs.
One of the main changes Mr. Savage said the department anticipated making is to increase the amount of up-front planning and design work that is done. Two of the things that involve new positions for them are project management and quality assurance. He suggested the committee think of professional project management and quality assurance as insurance when it comes to technology projects. He said they have determined that what should be done is to say, “If you cannot afford project management and quality assurance, you cannot afford the project.”
Mr. Savage said that DoIT has requested additional staffing primarily for oversight. He indicated that the department is looking at decentralizing much of the actual application development to vendors, rather than having the state do a lot of application development that has already been done for a lot of other applications. Other states have the same requirements for NOMADS kinds of projects, for Medicaid, and Medicaid Management Information Systems (MMIS), and have developed applications for them. He suggested when it is found that business practices are not consistent with the software design, rather than edit the software code, states need to look at changing their business practices. He opined that most of the things Nevada is doing have been done by other states, have been debugged by other states, so Nevada should take advantage of that knowledge.
Mr. Savage said that he expects the systems personnel the department has will be much more involved in application configuration and in integration. Software integration, he said, is becoming more important, and he expects additional mandates from the federal government in the next biennium for additional integration, health care portability being one of several. He said he expects a shift in terms of application development from actual coding to managing developers, managing vendors, and doing integration with other systems that exist around the state. He said DoIT needs much more aggressive vendor management, and he said the only way to do that is to have qualified technical managers who are state employees. These employees, he said, would put the state’s interest first, look after these vendors, go eye-to-eye with the big vendors, and tell them they are not going to do a project a certain way because it is not standard practice, it has high risks, and we are going to do it another way. There need to be standards and policies that make sense, he added.
Mr. Savage pointed out that the department’s application development group currently supports 17 different programming languages. He said DoIT cannot get that down to one, but perhaps to three. He said the department needs to ensure that when some agency or vendor says it can meet our needs and do it cheaply, the technology and databases they incorporate are stable and will not be obsolete in six months, and that maintaining the thing is not a nightmare. He pointed out there are going to be cases where a standard needs to be accepted, but one has to look at it very carefully because there are always costs to doing that. He indicated it is DoIT’s job to make sure costs are sensibly analyzed.
Assemblywoman Chowning expressed interest in the ability to go eye-to-eye with vendors. She asked whether, if DoIT had had those positions in place, the state would have avoided the problems with NOMADS and Genesis in the past. She commented that it sounds like it makes “too good common sense.”
Mr. Savage responded that he could not promise there would be no problems, but a good experienced project manager and quality assurance team can tell in advance what the risks are and spot problems before they “blow up.” He said such a team can look at a proposal and see the weaknesses ahead of time. Issues would not be as severe and would not come up at the last minute, he added.
Assemblywoman Tiffany suggested the committee think of the vendors as lobbyists who provide information, and it is up to the committee how to evaluate that information. She suggested they be careful that DoIT does not end up being the only funnel for the vendors and the information, but that the vendors should also talk to legislators as well, because they are a valuable source of information by helping to interpret some of the technological jargon.
Mr. Savage assured the committee that he did not wish to imply vendors were “bad guys,” because most of them are good. He said that it is a question of not narrowing one’s possibilities too early but looking at the data and looking at what it really implies from a wide range of possibilities.
Shelly Person, Chief, Planning and Programming Division, DoIT, then discussed the administrative projects and changes DoIT is currently embarking on. She acknowledged that their billing process is inefficient, which was evidenced in the Governor’s customer satisfaction survey last year. She said billings are frequently late, there is poor response to customer inquiry, and the bills themselves are confusing. The technical jargon used on the bills is confusing to the customers, many times the wording on the bills is not accurate, and the documentation to support the specific items is inadequate. Because of this the department is aggressively redesigning its billing process, she noted.
Ms. Person stated the department started in the summer of 2000 by implementing an application called Time Sheet Professional (TSP). That enables their staff, programmers, personal computer (PC) technicians, planners, and contact personnel to more accurately track what projects customers are doing work for. She said that notes identifying projects are now attached fed into the billing process.
Ms. Person said the department is now documenting procedures and developing policies for the billing process. Procedures in the department are either lacking or are highly ineffective in supporting an accurate billing process. She said she is putting together a customer focus group with five interested key customers to help them improve their billing process. She also said that the department is going to be implementing quality checks on the billings prior to their going to the customers. Ms. Person indicated they want to get to a predictable billing cycle. At this time they are working toward the 25th of each month to get billings out, but she sees no reason why that cannot be advanced to the 15th or the 10th after some of the procedures are documented.
Ms. Person said they are also working with individual units within DoIT to improve their data as it comes into the fiscal unit. These individual units feed the billing data to the fiscal unit, and then it is sent to the customers. Ms. Person said the data being sent to her has improved and that helps improve the overall process.
Ms. Person said DoIT is working with the Department of Administration, David M. Griffith and Associates, and another consultant, Ed Perry, on improving the department’s billing system. She said these groups work with many states and agencies on billing issues. She said they have already offered some recommendations regarding the fiscal unit, for both staffing and organization, and for some basic billing recommendations.
Ms. Person said that later this week she will be meeting with Mary Keating, Manager of Internal Controls of the Financial Management Training and Control Section, Division of Internal Audits, Department of Administration, who has experience in auditing and reviewing desktop procedures and policies for individual units. She reiterated the seriousness of the department’s concern with improving the overall billing process and the great room that exists for improvement.
Senator Raggio inquired about the status of DoIT’s compliance with federal cost recovery regulations. Ms. Person said that to her knowledge DoIT is in compliance, but they have a couple of areas on which they are working with David M. Griffith and Ed Perry to come up to speed.
Mr. Savage interjected that the cost recovery and cost allocation process was created long before his time and was conceptually flawed and poorly implemented. A study was done by the same consulting firm, County Consulting, DMG at that time, and all of these issued were looked at and a new billing and cost allocation process that was conceptually clean was developed, but the implementation was flawed. They are now cleaning up the implementation of that process so it will comply with the federal requirements.
Senator Raggio asked whether that included a rate-forecasting plan, and he was assured by Mr. Savage that it did. Senator Raggio commented they had been dealing with DMG over several years, and said that Mr. Comeaux of the budget office is suggesting DoIT continue to monitor for two more years, but that the budget does not contain any funding for that. Mr. Comeaux said he would check on that.
DoIT Application Design and Development Unit – Budget Page DoIT-15
BUDGET account 721-1365
E-805 Major Reclassifications – Page DoIT-18
Ms. Person’s next item was the reclassification and recommended changes that they are supporting. She said that their present data entry staff number five. With the decreased need in data entry as a result of the IFS “roll out” the department is forecasting a decreased need for data entry staff. Their forecast shows two people through the next biennium will be sufficient to continue the data entry required for agencies that are not on the “roll out” schedule in the near future. Senator Raggio inquired as to what budget item this referred to, and Ms. Person said Budget Account 721-1365, Application Design and Development Unit.
Ms. Person noted that in that budget account there is a request to reclassify the three data entry staff to become computer systems technicians. She said there is a request to transfer the two remaining data entry staff to the Department of Personnel payroll unit. She said it is felt to be in the best interest of both departments to transfer those data entry positions to that department since those positions are basically responsible for the sheet entry. The other three they recommended to be classified to Computer Systems Technicians (CSTs). She said there are several units within their department that are understaffed as far as technical database maintenance and technical documentation and the department would like to reclassify those individuals to support those units in their growing need to maintain data bases and technical documentation.
Assemblyman Beers inquired whether the employee’s time being entered is being project-attributed, and Ms. Person assured him that it is. She said the information being entered does not go into IFS at that level, but does go into their TSP application. Assemblyman Beers asked what specific data-entry tasks changed that allows for the decrease in data entry staff. Ms. Person said the entering of data from the actual timesheets into the IFS is what is being decentralized to the agency level, and DoIT is one of the first to do that. She pointed out there is one staff person in the department that now enters timesheets for every employee in the office. That used to be done at the data entry unit level, she added.
Mr. Savage explained that the function being decentralized is the data entry that is required for payroll only. He said their TSP program is what collects the data at the detailed project level. He explained that level of detail is not required for payroll, but it is needed to analyze the department’s operations. Although the department can produce reports from the system, the department has not integrated that function with IFS because there has not been a need to do that. In the past, he said, data entry people were all involved with payroll-related data entry, and the requirement for that is what has diminished. Individual employees enter the project and subproject detail into the TSP program themselves, so no assistance is needed for that.
Assemblyman Beers commented that it appears DoIT is engaging two people to type in summary information from the detailed time sheets into the payroll system. Mr. Savage said that is basically right, and that the two remaining people who will be doing that will be moving over to the Department of Personnel. Assemblyman Beers then inquired whether anyone has looked into integrating that into IFS, and Mr. Savage and Mr. Comeaux said they have not. Mr. Savage suggested it might be a direction to take as IFS matures, since it is not an uncommon feature in an enterprise management system.
Ms. Person said DoIT’s rate model methodology is an item they are still working on with the Department of Administration and David M. Griffith and Associates. She said it is part of what Mr. Comeaux mentioned, and they will be working with the consulting group for at least the next two years on developing an accurate methodology to monitor and update their rates. She said the department will also be purchasing and implementing a software program to accomplish that goal. She added that they will purchase that application in the near future, and are developing documented processes and procedures to maintain this methodology.
E-250 Eliminate Duplicate Effort – Page DoIT-17
The last item Ms. Person discussed was funding for the master services agreement (MSA) contracts and the budget request to transfer that funding authority to the individual agencies. She explained that the MSA module in Exhibit E recommends they remove the MSA pass-through spending authority from DoIT and place it with the respective agency. This is item E-250 under Budget Account 1365. Presently DoIT helps negotiate, manage, and monitor the contracts for these MSA vendors between the agencies and DoIT. She said DoIT would like to continue doing the contract management and monitoring part of the agreement. It is only the billing process that DoIT is proposing to move down to the agency level. For example, DoIT currently receives the bills from the vendors and transfers them to the individual departments. The individual departments then pay Ms. Person’s office, from where payment is then made to the vendor. DoIT wants to remove that middle step and make it more efficient for the vendors, the agencies, and for themselves.
Senator Raggio asked who would be responsible for monitoring the contractors’ performance or their qualifications and such matters. Ms. Person said it would still be the responsibility of DoIT’s contract operations unit. The Senator asked about negotiations, and Ms. Person said DoIT works with the customer agencies on those negotiations and the evaluations, but the payment would come from the agency itself. Senator Raggio asked whether she thought DoIT has the ability in all cases to do that, and Ms. Person said that the department will keep an eye on it. She noted that each vendor’s contract has a dollar limit, so DoIT’s contract operations group does need to be in the loop on the payment schedule. The Senator asked how DoIT will know that the contractors are doing a good job if DoIT does not have that kind of control over it. Ms. Persons answered that DoIT has not yet developed the procedure for that, but they will implement a procedure to have that control.
Assemblyman Beers related that one of the missteps the state made in the fourth quarter of 1999 that so inconvenienced Nevada drivers was approving and making progress payments on contracts without checking the work. He expressed concern that DoIT is going to let go of the purse string and give it back to the agency without having enough controls in place. Ms. Person replied that she understands those concerns, and the department welcomes his comments on more specific development.
Mr. Savage said that it is these kinds of things DoIT was addressing when they were looking for project management and quality assurance. The department will need to integrate project management and quality assurance with the contract group so DoIT has policies to make sure progress payments are not made to a vendor unless they have actually made progress. He said there can be differences in interpretation of progress, and it is incumbent on DoIT to have progress measured and payments made based on DoIT’s judgment of actual completion of work.
Assemblywoman Tiffany related that there is another situation with the Department of Taxation regarding Automated Collection Enforcement System (ACES). She explained that when DoIT signed off it was thought the Department of Taxation had signed off, yet there had been a change order for about $12,000 that needed to be fixed. She said it ended up that the Department of Taxation pointed fingers back at DoIT; that DoIT had signed off early and the Department of Taxation wanted the vendor to do the whole system over again. She stressed that there needs to be procedures that allow for the finger pointing to stop if the vendor does not complete the project to the agency’s satisfaction.
Ms. Person agreed and said that was one of the reasons DoIT wants to continue with the management and control of the actual contracts within DoIT. She indicated they have very qualified staff in their contract operations and over the years DoIT has developed lessons learned through projects such as ACES. She reiterated that the procedure is not developed, but DoIT will incorporate all the necessary steps with checks and balances to take care of these concerns and needs. DoIT wants to eliminate the long time period of getting payments made, because it has been a problem.
Assemblyman Beers asked when Ms. Person thought DoIT would have those policies in place, and Ms. Person expressed certainty that the policies would be in place by the end of the session. Mr. Beers commented that such an accomplishment would give the committee some comfort that the concerns would be satisfied. Senator Raggio commented that the individual committees will be looking more intently at the DoIT budget and will be looking for that information.
Mr. Savage expressed thanks to Mr. Comeaux and his staff at the Department of Administration. He said they have been incredibly proactive and helpful both at identifying the issues and pointing the way to effective solutions in every case.
Mark Blomstrom, Deputy Director, Communication and Computing Division, Department of Information Technology, explained that the SilverNet wide area network (WAN) carries state agency data between local area networks, hosts, and Internet access. He said it is the wide area network as opposed to local area networks, which may be located within one building or serve one agency. This wide area network encompasses the entire state, connects various local area networks with host computers, and brings Internet access to the entire state. The number of user addresses has grown “at a 34 percent rate over the past five years” on this wide area network, and there are now approximately 9,300 Internet Protocol (IP) addresses on SilverNet.
Mr. Blomstrom said data traffic over SilverNet has seen a much larger increase, expanding 113 percent over the last year. This reflects more information being sent and received from each IP address. He pointed out SilverNet is continuing to be expanded to accommodate more users and more traffic. In the last month the state Internet access capacity has more than doubled, he added.
DoIT Data Communications and Technical Services – Budget Page DoIT-31 (Volume 1) Budget Account 721-1386
Mr. Blomstrom said that in budget account 721-1386 there are requests totalling $1.337 million between decision unit M-204 for case load expansion and E-711 for replacement equipment. He noted the requested funding is needed to continue operating the SilverNet network. In decision unit M-200, DoIT is requesting 3 additional data communication specialists, one to handle network security in Carson City, one in Las Vegas, and another in Elko where there are currently no data communication specialists.
Mr. Blomstrom said the DoIT help desk crew handled 16,178 calls for technical assistance in the last calendar year, and out of that were generated 14,766 work orders and referrals. Of these the help desk actually resolved 37 percent directly, most of those on the first call. He said that DoIT does have an abandoned call rate at the moment of 12 percent and the department is working to lower this, primarily through “user-accessed on-line trouble-shooting guides.”
Mr. Blomstrom said that personal computer (PC) technicians handled about 5,168 work orders in the last calendar year. These work orders ranged from simply rebooting someone’s PC to “rolling out” an entire office, including PC’s and servers with all the hardware. In budget account 721-1386 the department is requesting 1 additional junior PC technician in Las Vegas to handle the increasing load and to work with the department’s help desk in helping users down there.
Mr. Blomstrom said the telecommunications unit is responsible for our state telephone system, and is supporting approximately 12,000 telephone users across the state in 275 different locations. He noted one third of these 12,000 users are located in Carson City and are on the capitol private branch exchange (PBX). He said the department is currently working to install the recently approved Las Vegas PBX hub by May 1. It will be located in the Grant Sawyer State Office Building and it will initially serve 800 state employees. He pointed out that when the Las Vegas PBX is operational, state user agencies should begin to realize a cost savings of approximately $270,000 per year in lowered intrastate calling costs.
DoIT Telecommunications – Budget Page DoIT-38 (Volume 1)
Budget Account 721-1387
Mr. Blomstrom said that in budget account 721-1387 DoIT is requesting the continuation of the telecommunications coordinator position approved on December 4, 2000, by the IFC.
DoIT Computing Division – Budget Page DoIT-23 (Volume 1)
Budget Account 721-1385
M-202 Demographics Caseload Changes – Page DoIT-25
M-205 Demographics Caseload Changes – Page DoIT-25
E-276 Working Environment & Wage – Page DoIT-28
E-710 Replacement Equipment – Page DoIT-28
Mr. Blomstrom said that in computing services DoIT is anticipating a steady growth trend of mainframe utilization over the next biennium, but at a lower growth rate than during the present biennium. To accommodate this continuing growth, he said, the department is requesting 2 terabytes of additional storage capacity in budget account 721-1385 decision unit M-202. This bulk storage will lower the per unit storage costs and will be available for use to the three different operating computer platforms at the facility. He said that would include the mainframe, the mid range Advanced Interactive eXecutive (AIX) risk 6000-type boxes, and the New Technology (NT) systems.
Mr. Blomstrom said DoIT is requesting 8 additional positions in the rapidly expanding area of web services, 4 in each year. He indicated the department is requesting additional hardware and software in M-205 and E-276 along with replacement equipment in E-710.
Mr. Blomstrom said that last year, in the area of fiber optics development, the Williams Communication Shared Fiber Agreement was put in place. He explained that in exchange for right-of-way along Interstate-80, the state now has high-speed, high-bandwidth communication service between Reno and Las Vegas. In two months DoIT will complete the extension of this service to Carson City and tie it into the SilverNet network. He said the estimated value of the Williams agreement to the state is approximately $4.6 million annually. Mr. Blomstrom said DoIT is currently working with the university system, the Nevada Department of Transportation (NDOT), and the Office of the Attorney General to develop other right-of-way opportunities such as this.
Mr. Blomstrom said the second phase of the Capitol Complex wiring project is essentially completed at this point. He added that the copper and the fiber are in place between all the state buildings in Carson City, and they are continuing to work with the State Public Works Board (PWB) on the third phase of internal building wire. As agencies in these buildings are interconnected via fiber, the data speed and transfer ability will improve by a factor of 10, along with the reliability and the physical security, he added.
DoIT Communications – Budget Page DoIT-43 (Volume 1)
Budget Account 721-1388
Mr. Blomstrom said the digital microwave upgrade project replaces and upgrades the existing 30-year-old analog microwave system. The state microwave system provides the foundation for services such as the NDOT 800 megahertz, the Department of Motor Vehicles and Public Safety (DMV&PS) high band Very High Frequency (VHF) mobile communication systems, the emergency medical system, the Nevada Division of Forestry (NDF) radio system, and other public safety radio systems. This is in budget account 721-1388. The actual request for the phase II upgrade is a “one-shot” request for $9.1 million and is not incorporated into the 721-1388 budget account. The digital replacement system also provides high-speed digital trunks for the SilverNet data communication network. He said Phase 1 of the three-phase project is now 96 percent complete. He noted that, at the moment, operational traffic and circuits are in place between Reno, Carson City, and Las Vegas. The Phase 1 portion will be completed within budget by the end of the fiscal year, and will provide twice the capacity originally proposed, he added.
Senator Raggio asked whether the $9.1 million will complete Phase 2 of the project. Mr. Blomstrom said it would. He said it will also include the engineering for Phases 2 and 3. Senator Raggio asked what Phase 3 is, and Mr. Blomstrom said Phase 3 crosses the top of the state roughly between Reno and Elko. At the moment, he stated, with the Williams Fiber Agreement in place, DoIT is working towards incorporating fiber into Phase 3, and this should lower the original estimate for the Phase 3 cost, which was approximately $5 million. Mr. Blomstrom said he expects the estimated cost to be as low as $3.6 million, but he does not yet have that exact figure for Phase 3. He noted they anticipate this would be part of the engineering for Phase 2.
Senator Raggio asked whether there are other long range plans beyond that, and Mr. Blomstrom responded that will conclude the replacement of the existing state microwave system, and will greatly increase capacity for the data use for the state. He said that following that the department is looking at and working in parallel toward additional distribution; for example, across United States (U.S.) Highway 50 in the middle of the state. He declared his department would like very much to have the capacity to distribute in that area’s mountaintops for mobile communications and to communities in that area for state purposes. He said Phase 1, Phase 2, and Phase 3 constitute the biggest pieces of trunk system in the state and he anticipates this will be sufficient for the foreseeable future. Mr. Blomstrom reiterated they have seen a 10-fold increase in overall digital capacity just by putting Phase 1 in place. When a loop around the state is completed, there will actually be a larger increase in that capacity.
Mr. Savage added that DoIT will be expanding their capacity planning process, and are requesting a position specifically devoted to capacity planning. He said the function of the position would encompass not just the mainframe and computer facility, but also the communication requirements in every service the department provides.
Mr. Blomstrom said DoIT is requesting Phase 2 this biennium as a ”one-shot” appropriation, which will cover the eastern portion of the state from Las Vegas to Elko. The pressing need for Phase 2, he pointed out, is based on the fact that the parts are no longer available for the 15- to 30-year-old analog equipment. He stated the system failure rate of the analog microwave increased 38 percent from calendar year 1999 to 2000. The public safety community in Nevada relies on the microwave system for communications. He noted the third section of Exhibit E presents the entire project in more detail. In conjunction with the digital upgrade, Mr. Blomstrom said, they are requesting two maintenance repair specialists in budget account 721-1388 to handle the additional facility load.
Senator Jacobsen expressed concern that last year’s fire season appeared to put some of the state’s microwave facilities in jeopardy, and asked whether there was any loss during that season. Mr. Blomstrom said that the state did not have a loss at any state site, but owes a debt of gratitude to the NDF fire crews who cleared defensible space around one particular site that was in jeopardy.
Assemblywoman Giunchigliani inquired about the federal repayment requirement of the department and what caused that to come about. Ms. Person explained that DoIT is working on this with the department’s consultant, Ed Perry. She said that the issue arose as a result of over billings in certain areas of DoIT’s operations and it is not uncommon for some states to repay the federal government for these over billings. She indicated DoIT is looking at approximately $1.5 million in repayments. She said that Ed Perry and DMG are confident DoIT can satisfy the federal repayment by reducing rates over the next three years and not necessarily having to cut a check to the federal government.
Ms. Giunchigliani said that the committee would need to see a plan to determine whether that would be acceptable, as well as to get a better handle on the whole overpayment and billing structure. Ms. Giunchigliani recalled that was the note on which Ms. Person had begun her presentation, noting that they are still waiting for Mr. Griffin’s report, and a number of other things. She expressed that she was not confident the committee really has a handle on what the cost is going to be for this department and its impact on the other agencies.
Mr. Savage noted that March 15 is the current scheduled completion date for this repayment to the federal government. But, he noted, it is DoIT’s expectation they will not have to make repayment. He said the normal procedure is that there will be no repayment to the federal government if certain conditions are met: if, over a period of three years, DoIT ends up spending the excess reserves on legitimate expenditures for which the fees were originally collected; and if, during that three year period, they are reducing the rates to the customers who had been paying the overcharges. He said DoIT is now attempting to learn the details of how that will work, and confirm that is the case.
Mr. Savage then addressed DoIT organizational and structural changes. He referred to page 6 of 66 in Exhibit E where it shows process improvement. He explained that it represents a change in approach in dealing with technology projects. He described the method by which DoIT has historically done things as the “ready, fire, aim” approach. That, he said, involves a very small amount of up-front planning, and a comparatively huge amount of implementation and operations cost. He explained the department is planning to move to a more quality-oriented approach where more time is spent in up-front planning and less in implementation and operations. That, he said, reduces the total life cycle cost. He clarified it reduces the implementation costs and most significantly reduces the long-term operational costs of technology projects.
Mr. Savage said DoIT is also requesting a number of positions; the three project management positions, and an additional quality assurance position to do this kind of monitoring in up-front planning. The department is also looking at a specific position for capacity planning, he added. He noted DoIT has identified one of their present staff to be facility manager. He added the department also wants to expand their capacity planning to include all the services that DoIT provides throughout the state.
Mr. Savage said DoIT is also requesting a position dedicated to strategic planning. He said he has experience at strategic planning himself, and has drafted their other “emerging technology” person to be in charge of strategic planning. He indicated this person may fill the planning position when it is approved, but the department definitely needs someone dedicated to that function full time. He said DoIT is requesting two additional positions for the data base unit. In the NOMADS unit, where the department is looking specifically at the efficiency improvements, they are investigating the database query techniques and the way those are structured.
Mr. Savage explained that, similar to the web services issue, database is one of the technology areas that is increasing in importance. He added that the efficiency and cost of systems is becoming increasingly dependent on the quality of database management and database design within those systems. He said that the biggest requested increase by far is for the web services staff. That group currently has four people in it, and they are requesting to increase that by 8 positions over the course of the biennium. He said he is cautiously optimistic the additional 8 positions will be sufficient to cover the expected requirements. Mr. Savage pointed out that the individual who actually manages that group is less confident of that than he is, but he thinks the department will be able to find ways to make that work.
Mr. Savage said that the department is, in his view, structured correctly. He said there is a technology section managed by Mr. Blomstrom. He indicated the entire administrative and fiscal group is under Ms. Person’s jurisdiction, and that seems to work. The three of them communicate every day, he said, and Mr. Blomstrom and Ms. Person keep all operations covered when he is absent. He noted the department is shifting emphasis, but they are not proposing a net increase in staff. The department is proposing 21 new positions and eliminating 22 positions, for a net decrease of 1 position over the course of the biennium. The department will be spending more time planning and making sure things work, which is where he believes the department should be putting its emphasis.
Assemblywoman Tiffany noted that on page 6 of 66 (Exhibit E) there is a chief information officer (CIO) position listed, and asked whether the Governor had put that in the budget or whether it is a change in terminology. Mr. Savage said that he would be meeting with the Governor this week to review and finalize the administration’s approach to that problem. He said he would have that available shortly.
Ms. Tiffany noted what she considered substantial policy changes, which she had not seen in DoIT before. One example she pointed out was that Mr. Savage would like to have web site overview and she asked whether he had any control over the constitutional officers on that matter. She noted he had mentioned enterprise wide strategic and detailed technology, and asked whether it meant that he could drive the agencies’ policies, or would he just have technical overview. She noted he mentioned project management and quality assurance oversight, and asked whether that meant that if there is a project that is not working that he would have the authority to recommend pulling the plug. She noted that he recommended changing business practices, and asked whether it meant he would be telling an agency they would have to change their business practices to meet an application software. She also mentioned vendor management, and suggested that if that were to involve a chief information officer position, it would thus involve policy, and he would need a bill to effect that in statute.
Mr. Savage acknowledged her concerns, and explained there were a number of different approaches to that. He said he had discussed an information technology (IT) commission or an IT board with DoIT staff and with the staff of the Department of Administration. He said there is general agreement some kind of commission or board is a good idea to oversee the kind of issues Assemblywoman Tiffany just mentioned. He noted there are different approaches to how it should be structured and what the reporting structure should be. He said as soon as the Governor and he review and finalize their approach he will be able to present it.
Ms. Tiffany said that if it is a CIO change that forces every agency to go through Mr. Savage’s office for that approach, the committee will need to be aware of that and to know whether a bill would be required for that statutory amendment.
Assemblywoman Chowning asked whether Mr. Savage would provide a chart of the existing organization for the subcommittee so committee members could compare the two. She noted the chart provided did not reflect the increase of 21 positions and the decrease of 22 that he mentioned. Mr. Savage said the department could do that. He explained that the chart Mrs. Chowning had was the current chart, and the department would get the committee a copy of what it would look like when all the changes would apply.
Senator Raggio commended the group on the manner of their presentation and the quality of the exhibit presented for its detail and impressiveness.
Senator Rawson asked whether the security for all of the state’s information systems could be addressed. He asked whether this is just an effort to catch up and build a system that is fully functioning, or whether we really have a plan for adequate protection, adequate redundancy, and adequate recovery from a major catastrophe.
Mr. Savage recognized that as a very important issue. He said that DoIT does have a contract with a service that provides backup capability and backup processing capability, should a catastrophe actually wipe out the computer facility. He said the department does regular backups that are stored off-site so the data is protected. In addition to that, if there were a catastrophe that just rendered the system non-operational the department does have a contract for backup in Denver, Colorado. He said what they have not done, and what they need to do, is to run an actual operational test of that system. He said they will certainly be doing that this calendar year, but they have not yet picked a specific date. Mr. Blomstrom said they have tentatively looked at the month of August to run that exercise.
Senator Rawson asked whether, if the state has a disaster and has to go through the recovery procedure, we would expect to lose a day’s, a week’s, or a month’s data. He said his understanding was that it depended on how severe the disaster is. If the catastrophe is severe enough to fully incapacitate the system but does not physically destroy it, the state would probably only lose most, if not all, the data that was actively being processed and entered at the time of the disaster. That would amount to probably only minutes or hours worth of data. He said that if the facility is completely destroyed, he believed we would lose a day’s worth of information.
DIVISION OF MENTAL HEALTH/DEVELOPMENTAL SERVICES BUDGET OVERVIEW
Dr. Carlos Brandenberg, Ph.D., Administrator, Division of Mental Health and Developmental Services, distributed Exhibit F (Original is on file in the Research Library.), which contains the Mental Health/Developmental Services (MHDS) budget. He noted that the introductory page indicates that the Division of MHDS is one of nine divisions in the Department of Human Resources. Page 1 of Exhibit F presents an organizational chart for the division, and shows that there is a Commission on Mental Health and Developmental Services. The commission is a legislatively created body that provides policy guidance and promotes client rights, he added.
Dr. Brandenberg said the division carries out its services in the mental health arena through four individual agencies. The first one of these, he said, is the clinics in rural Nevada. MHDS currently provides services in 19 different locations in rural areas, just recently opening a clinic in Pahrump. The second is the Lakes Crossing Center for the Mentally Disordered Offender, which is the maximum security forensic facility that provides services to the mentally disordered offender. He pointed out it is the only statewide facility for the division, and is located in Sparks. This past biennium a 12-bed capital improvement project was completed there and brought the bed capacity up to 48 for the facility.
The third agency that provides mental health services is Southern Nevada Adult Mental Health Services, which provides its services in four locations in Clark County. The West Charleston facility has both outpatient and inpatient services. Other facilities are located in Henderson, North Las Vegas, and on East Sahara. One of the accomplishments in the current biennium is the moving of the site in east Las Vegas.
Dr. Brandenberg said the last agency is the Nevada Mental Health Institute. There is one location with both a hospital and outpatient services. One accomplishment for the institute is that it brought in a Program for Assertive Community Treatment (PACT). A new psychiatric emergency service was brought in and the new 90-bed hospital was named for Assemblyman Dini and Senator Townsend. It is called the Dini-Townsend Hospital.
Dr. Brandenberg said that, on the Developmental Services side, his division carries out its role through three separate regions. One is the Sierra Regional Center in northern Nevada. A second is the Rural Regional Center with sites in Carson City, Elko, Fallon, and a recently opened site in Winnemucca. The third is the Desert Regional Center in Clark County. An additional program is the family preservation program which is a statewide financial assistance program operated through the central office which provides financial help to families. He said this program attempts to keep families intact and to avoid out-of-home placements.
Dr. Brandenberg said on page 2 in the booklet are the division’s vision and mission statements. The service vision for the division, he said, is a community based and consumer driven support model.
Page 5, Dr. Brandenberg said, presents caseloads for mental health programs. Caseload projections are based on the state demographer’s population growth estimates. He said the demographer projects a 6.31 percent increase for the year 2002 and 5.81 percent for the year 2003. The caseloads for mental health will have increased from 19,000 to over 22,000 at the end of 2003. There are planned reductions in average daily census for the inpatient hospital services.
Dr. Brandenberg said that mental health emergency services consists of two specific service areas. One is a 24-hour a day ambulatory service in a 10-bed psychiatric observation unit serving persons for up to 72 hours. The Nevada Mental Health Institute just recently opened its psychiatric emergency service, which reduced the average daily census from 52 the week before it opened the psychiatric emergency service, to 42 the week after it opened the service. He said the whole idea of the psychiatric emergency service is to triage and to deflect away from the hospital. The other service, residential support, is their housing program, he added. He said this program is designed to empower clients toward independence. The agency contracts for these services, and provide the services in family homes and supported living arrangements, which are apartment-like living units, Dr. Brandenberg said.
Dr. Brandenberg explained that in the medication clinic the division provides evaluation and prescriptions, monitors the medications of their clients, and continues to use the newer and safer medications. He indicated that each PACT team serves up to 72 clients. He said there are six direct staff and two part-time staff that provide supervision to the most severely and persistently mentally ill clients. The whole idea of the PACT, he informed, is to provide an extensive outreach outpatient service to those clients who historically have had a high readmission rate to the hospital. The criteria for admission into the PACT are for the client to have had numerous psychiatric hospitalizations and numerous admissions into the hospital.
Dr. Brandenberg discussed some outcomes for PACT. At the Southern Nevada Adult Mental Health Services (SNAMHS) the PACT has experienced an 88 percent decrease in frequency of psychiatric hospitalization. At the Nevada Mental Health Institute, even though they just recently started, there has been a 57 percent decrease in frequency in hospitalization. SNAMHS has shown an 85 percent decrease in hospital days for those individuals who are in the PACT. At the Nevada Mental Health Institute they have shown a 91 percent decrease in hospital days. This, he said, demonstrates the PACT program is showing an extreme benefit to the division’s clients in avoiding hospitalization.
Senator Raggio asked for an example of what might happen in a sample case, and how the effect of the program is to keep such people out of the hospital setting. Dr. Brandenberg replied that a client may be chronically and severely mentally ill, and have been in the hospital four or five times in a calendar year. The reason is that, even though the division does a very good job for the client in the hospital, once that individual is released into the community there is a lack of a support system. The client stops taking his medication, does not follow up on outpatient services, does not come in to see the psychiatrist, and does not come in for his outpatient therapy. What the PACT team does is to provide services for the 72 clients.
Dr. Brandenberg explained that when one of the PACT team goes on annual leave the next person on the PACT team has all the information for that individual. So, even though one person is on annual leave, the team continues the intense service for that individual. The psychiatrist also continues to provide services. In the community the team provides support and monitoring. The worker may actually go to the individual’s house or apartment to make sure that client is taking medication on a regularly scheduled basis. The worker may bring the client in for counseling or to the medication clinic, and make sure that the division provides the necessary linkages, in terms of housing and support, that the client needs. It is a very intensive outreach program specifically designed for individuals who are severely and persistently mentally ill.
Dr. Brandenberg pointed out this program is very time consuming, and it is extremely stressful because the team is on call 24 hours a day, seven days a week. Team members may get a call from an apartment manager saying that a client is upset at 3 a.m. The PACT workers go to that apartment at 3:15 a.m. or 3:30 a.m. to talk to the client and make sure everything is all right.
Dr. Brandenberg directed attention to the caseloads for developmental services on page 6. He noted the active caseload has grown by 37 percent since fiscal year 1999. He recalled that during the last session of the legislature the service arena was expanded for individuals with conditions related to mental retardation. He explained this means a person who has severe or chronic disability which is attributable to conditions such as cerebral palsy, epilepsy, or any other condition that is closely related to mental retardation. He pointed out this is a whole new subpopulation of individuals that historically this division had not served. He said a lot of the increase in the caseload the division has seen has actually resulted in an increased number of related conditions being seen, as well as an increased number of children.
Dr. Brandenberg also said the division has expanded the Medicaid waiver for home and community based services. In 1994 the division was serving about 170 clients. As of November of last year the division has over 950 individuals in the community based service, which is almost a 500 percent increase. This waiver allows the division to maximize federal dollars and place a lesser burden on the General Fund.
Dr. Brandenberg referred to page 7 of Exhibit F, which shows a distribution of costs for fiscal years 2002 and 2003. He pointed out that fifty-two percent of the dollars are for mental health programs, while 46 percent of the dollars are for developmental services. The proposed budget presents over a $47 million increase, which represents a 21.7 percent increase over the current biennium. The mental health portion represents an increase of over 19 percent, more than $22 million, while the developmental service portion represents an increase of over 23 percent, more than $23 million.
Dr. Brandenberg referred to page 8, which shows the actual budgeted funding sources among state, federal, and other. He pointed out the Division has been trying to increase federal dollars while decreasing state dollars. Referring to page 9, he pointed out that it shows the full time equivalent number of positions in the division. He said the division will start the biennium with 1,154 individuals, and by the end of 2003 will have 1,158 full time equivalent staff. The chart on page 10, Dr. Brandenberg explained, is a graphic design showing caseload growth for the division, broken down by mental health, developmental services, and total.
Dr. Brandenberg said that the division’s budget highlights begin on page 11 of the Exhibit F. He said the division has been prescribing the newer and safer medications for the second biennium. This, he said, is important because the division has seen that the newer and safer medications provide a greater compliance. In other words, he explained, individuals who are taking these medications are less likely to reject the medication or stop taking medications because they do not have the severe side effects and toxic effects the older medications cause. This budget reflects a 56 percent increase in the medication category, which totals $8 million. The current biennial budget has $15 million for medication. This proposed budget has a $23.2 million increase in medication. He said the division is currently in the process of developing a report to present to the subcommittee regarding the effectiveness of the medication to address concerns about “what they are getting for the dollars.” The study will show the exact benefits, he added.
Dr. Brandenberg said that for clients who have been diagnosed as having a psychosis the atypical anti-psychotic medications have reduced inpatient hospitalization by 47 percent. He noted the division has been able to reduce admissions by 39 percent, and has been able to reduce the average length of stays in the hospital by 13 percent. For individuals diagnosed as having depression and who are being prescribed the SSRIs (selected serotonin reuptake inhibitors), MHDS has reduced total inpatient days by 32 percent and reduced the total number of admissions by 38 percent. This, he said, will show that despite their greater cost, these medications are showing great benefits to the budget and to the clients.
Dr. Brandenberg said the budget also provides funding for projected caseloads in all service delivery systems. This, he said, includes case management, outpatient service, medication, and residential care. He pointed out MHDS has 704 new cases for the biennium.
Senator Raggio asked why the performance indicators show a higher average length of stay if MHDS is cutting down the time in the hospital. Dr. Brandenberg explained that this is due to the acuity level of clients the division is currently serving in the hospital. He said there is a higher acuity level because the hospitals are deflecting patients with lesser acuity from the hospital through psychiatric emergency services. That accounts for some of the projections in terms of the caseload, he added. The other factor, he said, was the fact that the Lakes Crossing facility, during the summer, had a high census of over 60. A lot of that was because Clark County sent the facility a lot of patients who had not been thoroughly evaluated by the court system. Once the division met with the courts in Clark County and showed them they needed to do the evaluation, the facility was able to bring that census down. But, Dr. Brandenberg said, at the time the division prepared the budget, staff still had to project the high census for the Lakes Crossing facility.
Assemblywoman Leslie commented, since the census in the hospital is expected to go down, that one could expect to see an increase in the budget in the community-based program or supportive housing. She asked whether there are, in fact, increased resources in housing, recognizing that these clients would have to go somewhere. Dr. Brandenberg directed her to page 5 and indicated that 54 percent of the funding is dedicated to community based services. He pointed out residential care happens to be one of them. He suggested that his outline of bed reduction would help present that picture.
One of the things the budget proposes, he said, is bed reduction at the Southern Nevada Adult Mental Health Services hospital. He said the division is proposing to reduce SNAMHS current 86 beds to 82 in 2002, and 78 in 2003. He said SNAMHS is deleting 8 positions and redirecting the resources to community-based services. He said the division is trying to redirect those resources to eight intensive SLAs (supportive living arrangements) and 12 special-needs beds. He explained the special-needs beds are for individuals who have concurring disorders; individuals with medical as well as behavioral problems, such as human immunodeficiency virus or head trauma. Normally, Dr. Brandenberg said, the division has a hard time finding providers for these individuals in their regular group homes. These homes are more expensive, and require very specific contract services, he added.
Dr. Brandenberg said the division is looking at bed reduction very carefully, both in the North and in the South, because MHDS needs to be able to match the demand for inpatient beds to the right capacity. He noted the division’s primary responsibility is inpatient care, but when this budget was first developed, Charter Hospital in Las Vegas had gone out of business and there was a loss of about 40 to 50 beds there. The closure of Charter Hospital increased the impact of bed reduction on the division. He pointed out the division is trying to project ahead two years, and central office staff are doing the analysis at this time. Once the analysis is finished, he said, MHDS will be working with Joel Pinkerton, the budget analyst, and with the Department of Human Resources to ensure the bed reduction will work.
The other area Dr. Brandenberg pointed out was the Rural Clinics caseload annualization, which is a “catch-up decision.” He said central office staff were extremely concerned during the last session of the Legislature about the data that was being submitted to them by the rural sites. He noted they could not, in good conscience, present a decision unit to support the rural caseload projections because central office staff did not feel comfortable the numbers presented to them were valid. Since then, he said, they have hired an administrator for Rural Clinics, Dr. Larry Buel. Dr. Brandenberg added that Rural Claims has a good tracking system in place, and this decision unit provides a “catch-up decision” for Rural Clinics in the areas of staffing and caseload.
Dr. Dave Luke, Associate Administrator for Developmental Services, Division of Mental Health and Developmental Services, referred to page 14 of Exhibit F. He said there are four themes that present themselves for developmental services. They are demographic growth, waiting lists in the related conditions service group, bed conversions to provide more community opportunities, and some refinancing using Temporary Assistance for Needy Families (TANF) funds.
Dr. Luke said that the M-200 decision units in the three budgets represent the growth expected based on population projections from the state demographer’s office. What has been used for the South is the high-level projection, since the division has had a rapid growth and a real catch-up problem. The total statewide caseload would be for 274 additional people in service by the end of fiscal year 2003. He said this requires a total addition of 11.75 full time equivalent positions. For the first year, he noted, this represents $1.6 million and for the second year $4.3 million in funding. The division has relied heavily on the Home and Community Based Waiver, and that accounts for about $3.7 million of the total funding in this package. He said the state portion is $3.7 million and the rest is a federal matching share.
Dr. Luke said the services provided to these individuals is not only service coordination but family support as needed. He said this is in an effort to provide respite care, small grants to help families buy home adaptations, and some in-home training. He pointed out that will serve 109 families. He added that it will provide jobs and day training services to 37 additional individuals, and that includes training in job skills or activities of daily living. Usually, he said, these services are provided through community training center programs, of which there are 19 private “not-for-profits” across the state. Finally, he noted, there will be 122 options for residential support for people to live in supported living arrangements where the services are provided in the person’s home and are customized to help that person.
Assemblywoman Leslie asked about the “high-range” and “mid-range” definitions, and whether the division is using the federal definition for that. Ms. Leslie noted that compared to other places in the country we would certainly fit the high range. Dr. Luke responded that what they used as the caseload growth projection for the North was 2.9 percent for fiscal year 2002 and 2 percent for fiscal year 2003. He indicated the waiting list package as constructed is a catch-up package. If for some reason the demographics do not seem to be meeting the total projected need, then it can be caught up in the waiting list package.
Dr. Brandenberg interjected that the committee may hear from a lot of people that the Division is not using the appropriate methodology for the waiting list. He assured the committee that it is the Governor’s intent to eliminate the waiting list. He said that if the waiting list is not completely eliminated, it will be because of the division’s methodology. He explained that at the present time there are 171 individuals on the waiting list. Out of that, he said, 80 percent will qualify for the division’s services, bringing the number to 137. He said the division will be phasing in 64 placements, which means they should have a total of 73 individuals on the waiting list by the end of June 30. Calculated, that is less than a 3 percent error factor in terms of the actual. He explained the actual plan is for 2,777 individuals, and the division now has 2,740. Dr. Brandenberg said the division is very comfortable and confident with the methodology they are using to request resources to take care of the services on the developmental side as well as projecting the waiting list.
Ms. Leslie noted that in developmental services the real waiting lists are actually much greater than the “existing” waiting list. She noted that when people do not get services year after year, they end up not wanting to be on the waiting list. She said she would like to know why the North was categorized as mid-range rather than high, and she would like some clarification. Dr. Luke responded that he would be glad to provide some information in that regard.
Dr. Luke pointed to the second package, E-431 in each of the three budgets, which addresses the waiting list. He reiterated that once the demographic growth is factored in the division looks at what is left that they would project as a need. He said there are 164 additional individuals in need, and he pointed out that there have been some questions raised about the number for the North, which indicates 61 additional people needing service, with only 54 people needing service in the South. The question was asked why the North shows a higher need than the South, but he indicated it is compensating for the demographic growth features. If one is higher or lower it is accommodated in this package. He said that in this package for the 164 individuals involved statewide, the division plans the range of services, relying on the home and community based waiver to help fund a total of about $2.8 million over the biennium for the entire package.
Assemblywoman Chowning asked about the Southern Nevada Adult Mental Health Services facility. She noted there have been several problems with construction and code violations with the facility, and said she did not see anywhere in the budget where those issues are going to be addressed. She also asked about young people with mental problems, specifically the sexual offender, and whether they are included in the figures. She said she understands there really is no facility to house them, especially the sexual offenders. She said that concern has been brought to her and she would like for the division to address that.
Dr. Brandenberg said the problem at the Southern Nevada Adult Mental Health Services hospital Building 3 originally involved smoke barriers. In January 1999 the Bureau of Licensure and Certification conducted a survey and found that the hospital did not have the vertical and horizontal smoke barriers, a violation of life safety code. The State Public Works Board came to the IFC with a $350,000 request, which was granted. The project was given to a local contractor in Las Vegas, and completion was scheduled for December, 2000.
When the work on the building got underway additional code violations were found. These additional violations were reported, and the division is currently working with the State Public Works Board and the architect on those repairs. The Bureau of Licensure and Certification conducted another survey and provided a list of items that needed to be fixed, and the State Public Works Board and the Bureau of Licensure and Certification were asked which of the items were mandatory and which were not. Dr. Brandenberg said he anticipates something in writing from the architect and from his staff in Las Vegas around February 15. At that time be will be making a decision on how to proceed.
Dr. Brandenberg said he will be consulting with Perry Comeaux, Director, Department of Administration, to determine the avenues available to them. He noted this is predicated on the cost, but the division has no idea what the cost will be, and said they have received estimates ranging from $250,000 to $1 million. He said that by February 15, 2001 he will have a figure in mind and will be able to inform Mr. Comeaux and proceed from there. This cost is not included in this budget because it became apparent after the budgets were developed, he added.
Dr. Brandenberg said his division only provides services to children in the rural areas, and the committee would not see the program for sexual offenders under the age of 18 years in his budgets. He said the division did not see that as a priority. He stated serving increasing caseloads and providing for infrastructure have first budget priority at this time.
Assemblywoman Giunchigliani asked where the money will be when they learn the cost of making the facility safe, since it was not approved as a capital improvement project (CIP) recommendation. Dr. Brandenberg said he will need to consult with Mr. Comeaux for direction on how to proceed. Ms. Giunchigliani noted there was an IFC recommendation a while back to deal with some of this cost, so she suspected they know something. She expressed surprise there is nothing in the budget for this.
Ms. Giunchigliani asked why the State Public Works Board was being paid to inspect facilities if this is the type of problem they are having. She suggested Assemblyman Hettrick revisit a bill to correct this problem, noting the state should not have these individuals in an unsafe situation. She also asked whether anyone had trained the Lakes Crossing staff or whether staff were not doing what they should have been doing in the first place. Dr. Brandenberg said it was a combination of these, and Clark County staff were not adhering to the state statute regarding their mentally disordered offenders. The statute, he said, is very clear that the county must have two evaluations and they were only doing one. He said the county was also having some problems finding staff to do evaluations. They were given some assistance, he said, and the number of referrals greatly diminished.
Ms. Giunchigliani asked whether this is done at the jails and whether it is done at the prison. Dr. Brandenberg said that the screening process falls under LS 415 which is the pre-sanity evaluation and the pre-competency evaluation, and are the responsibility of the counties. The counties do the evaluations in their jail facilities, he said.
Dr. Luke said there are two final pieces on the developmental services requests. One, M-202, in the three budgets, is the conversion over the biennium of 18 state run intermediate care beds to community living options. Senator Raggio asked whether that would result in a savings, and Dr. Luke confirmed that it would. He said that by the second year the savings would amount to $351,840. Those savings would then carry forward, and the division would use those funds to address waiting list needs elsewhere in their developmental services budgets.
Senator Raggio asked whether there is any rate increase in the budget for providers of community service. Dr. Brandenberg said there is not. Senator Raggio asked whether it had been requested, and Dr. Brandenberg said it was not. Senator Raggio noted that in other departments’ budgets there are rate increases scheduled for providers. The Senator asked why no consideration was given in this budget. Dr. Brandenberg said that at the department level there will be a rate study conducted to do a complete analysis of the need for rate increases, and that is one of the motivations for the rate study. Senator Raggio said that he did not recall that, but asked when the rate study would be completed. Dr. Brandenberg said he had no idea, but he was sure it would be done quickly because the providers are not at all content with the rates they are being paid.
Senator Raggio asked whether there is a danger that the division will not have the ability to deliver the services if the rates are not addressed. Dr. Brandenberg acknowledged that there is that possibility. Senator Raggio asked how big that possibility is, and Dr. Brandenberg said that the division had actually done a rate study with their providers. He said they looked at administrative costs as well as direct costs, and some provider types were being paid a very high administrative rate while others were being paid a very low administrative rate. He pointed out, however, the division felt that at this time they wanted to concentrate on reducing the waiting list and providing services. He had to make a decision which way to go and he chose to provide the services and wait for the right study to develop good methodology regarding how to develop rates and how much they should allot the providers. Senator Raggio asked whether they could wait two years for a rate study, and Dr. Brandenberg said they can wait and could do so without losing quality providers.
Assemblyman Marvel asked what they are doing now as far as their billing system is concerned. Mr. Marvel noted that one of the major flaws in the whole system was how the billings were carried out and collected. Dr. Brandenberg said that on December 14, 2000, the division received an LCB audit report on the Nevada Mental Health Institute inpatient billing for the first quarter of the fiscal year. That provided them with 16 recommendations, which they totally accepted.
Continuing, Dr. Brandenberg said the division is currently in the process of developing a corrective action plan that is due in to the Department of Administration by March 14, 2001. One of the things that study indicated is that the institute had lost about $650,000 in Medicare billing. Dr. Brandenberg said his staff has indicated to him that is not the case, and they will be recouping the $650,000 over a period of time. The division’s central office is taking this opportunity to do a statewide comparability study, he added. The recommendations they will be implementing will not only be for the institute but will also be for SNAMHS inpatient care. He said the division will make sure the hospitals are doing all billing the same, and have the necessary documents to facilitate the procedure. He assured the committee the division will recover as much federal funds as they can.
Assemblywoman Leslie noted the Mojave program bills Medicaid directly, and said they may be the only non-profit agency in the state that can do that. She asked whether he could tell them how much a year Mojave is getting and how many services they are providing to clients, and where that would show up in the budget. Mr. Michael Torvinen, Administrative Services Officer, Division of Mental Health and Developmental Services, apologized for not having those numbers, but said the state match would be in the Medicaid budget, not the SNAMHS budget. Ms. Leslie asked whether he would be able to give them that information, because she felt that the Mojave issue is one that she and other members of the committee want to explore. Mr. Torvinen said that he can do that because he gets monthly reports from both Mojave and the Medicaid agency.
Ms. Leslie asked whether the PACT is fully funded in the North in this budget, and Dr. Brandenberg said it is. Ms. Leslie asked whether it is allotted more money than it was in the last biennium, and Dr. Brandenberg replied that it had been allotted the same amount of money. He said the division was not able to recruit the staff, but the program was fully funded once they were able to recruit the staff. The program is fully staffed and fully funded now, he added.
Dr. Brandenberg explained that the reason the caseload looks to be down is because it is such an intensive program and because they have just recently been able to be fully staffed for the first time. He said the division is being very cautious in bringing in the clients to the caseload. He added that he needs to bring clients on at the rate of one or two a week as they are building the caseload.
Dr. Luke said that the final decision units in the developmental services budgets have to do with utilizing TANF funding from the Welfare Division. He said E-125 in the three budgets propose to collect about $1.8 million in TANF funds to provide case management and family support to low-income families. This results in General Fund savings of over $1 million, which is part of their overall plan to extend services to people who would otherwise be waiting.
Dr. Luke said that TANF is proposed for support to the Family Preservation Program (FPP) initiated by the Legislature to provide direct cash grants to families who keep severely or profoundly handicapped family members at home. He said families get up to $320 per month. This caseload has grown, and is now about 274. TANF funding can actually take over 112 of these cases who qualify under TANF regulations. He said the Welfare Division will set up a new payment code that will enable them to fund those families directly. He said MHDS will continue to provide services and case management, and would be able to continue up to 287 families between the MHDS budgets and the TANF budget, saving about $270,000 in General Fund. Dr. Luke said this supports their overall plan to serve people who might be waiting.
Senator Raggio asked whether the state is now in compliance with the related conditions issue that was adjudicated in the Parry v. Crawford case, and whether all the waiting lists have been addressed.
Dr. Luke responded that two factors were important in the Parry v. Crawford decision. He said the first part addressed the access to services and the amount of time it takes for people to be assessed and enrolled in services. He said the division has intake workers in all the regions, and most people can be given an eligibility determination within 75 to 90 days. The second part, he said, requires the state provide services to people with related conditions, and he said the division is currently serving over 200 of those individuals. He said the division has projected an 8 percent increase in the mental retardation population alone. Dr. Luke pointed out that the rate is actually running a little higher than that, but they are “taking all comers” who are being afforded all the services that would be required. Dr. Brandenberg summarized that the division feels very confident that they are in compliance with the Parry v. Crawford decision.
Assemblywoman Chowning said they had a bilingual outreach position at the Mash Homeless Center in Las Vegas, and she asked whether any state staff were still being housed there. Dr. Brandenberg said there is still a staff member housed there providing services to the homeless population. He indicated it is an outreach Clinical Social Worker position that is being funded through the Comprehensive Mental Health Service (CMHS) block grant. He said that is the one centralized funnel for all the homeless as well as the homeless mentally ill in Las Vegas. By having a staff member there, he explained, the division is able to triage into their service delivery system. Mrs. Chowning noted that this saves a lot of money in the long run.
Senator Raggio asked Dr. Luke whether he had done a rate study with the providers, and Dr. Luke said they did talk with the providers and they did a survey of some of the providers. He said they were particularly concerned that there are inordinately high turnovers, and the highest was in the residential area. One of the dilemmas is that everyone, including the division’s providers, are facing a very competitive job market, and it is hard to know whether any rate changes they might be able to request or propose would make a difference. Senator Raggio asked whether he would provide the staff with a copy of that information. Dr. Luke said he would.
Dr. Brandenberg directed attention again to page 12 and to the TANF transfer in the Rural Clinics budget. He said Rural Clinics provide mental health services to both adults and children. Presently 30 percent of their caseload is children in rural areas, and the goal of TANF is to keep families intact. He said the division has been working very closely in a partnership with Michael J. Willden, Administrator, Welfare Division, Department of Human Resources, and Rural Clinics will collect approximately $1.4 million in TANF funds. This will provide a General Fund savings of about $1.3 million. These funds have been reallocated to the community-based services in the rural areas. Dr. Brandenberg said this brings in TANF dollars to provide additional services in Rural Nevada.
Assemblywoman Leslie asked whether the division had received an offer from the Incline Village Children’s Cabinet indicating that they are willing to provide $81,000 in-kind contributions, providing a facility with telephone and support staff if Rural Clinics were able to place a counselor there. Dr. Brandenberg said that he has not received that letter or those figures. He indicated that he would like to take a look at it and discuss it.
Ms. Leslie noted that the Governor put in $200,000 for the statewide suicide hot line, which was a “one-shot” appropriation last year. She asked whether there are a lot of calls on the statewide hotline, and whether it has been worth the money. Dr. Brandenberg confirmed that it is a great success. He noted the Northern Nevada Crisis Call Center was the winner of the bid. “The Crisis Center provided the division with the resources to develop the suicide crisis hotline statewide.” A tremendous increase in the number of calls has been noticed statewide, especially among the elderly and children.
Dr. Brandenberg said crisis call center staff are actually going out to the community and making people aware of the resources available. They are working very closely with the division’s clinics in all regions, they know how to triage and refer those individuals into the system.
Senator Raggio asked to clarify that in the budget, General Fund appropriation increases by 10 percent in the first year and by 7.5 percent the second year for $92.1 million in 2002 and $99 million in 2003. This represents the General Fund portion. Overall the total budget is 12.74 percent higher in 2002 and 6.9 percent in 2003. The totals for the biennium, he noted, are $131.8 million in 2002 and $141 million in 2003.
Senator Raggio repeated his interest in receiving the information on the Mojave program, and he asked Mr. Torvinen whether the SNAMHS budget includes that funding. Mr. Torvinen said that it does not. He said that the Mojave program bills Medicaid directly and the state makes payment directly through the Medicaid budget as it does for any other medical provider. Senator Raggio said he understood these services average over $400,000 a month, and Mr. Torvinen said that sounds about right. Mr. Torvinen said the division has been providing LCB staff with Mojave information on a quarterly basis, and he will be happy to put a package together for the committee.
Senator Rawson asked whether the division’s budget has anything in it for the autistic programs. Dr. Brandenberg said that the division would be serving the individual with autism only if the individual meets the related condition criteria. If the autistic child’s functions are related to the functions of the individual who has mental retardation and the child needs institutional care, then the child would be accepted into the division’s program. If the autistic child does not have functions related to mental retardation, then that child would not be accepted for services.
Senator Rawson asked whether the state is using out-of-state experts to screen these children to decide who meets the conditions for acceptance. Dr. Brandenberg said that they are doing that in-house. He said that division staff are competent to determine which individuals are mentally retarded (or have related conditions) and which ones are not. Senator Rawson asked whether this budget adequately covers for an increasing population. Dr. Brandenberg said the current biennium budget assumed an 8 percent increase because of this change. He said that was a guess the division took when they developed the budget because they had no idea of the percentage of individuals with related conditions. He pointed out that rate is actually 9 percent. He said by June 30, the division anticipates it to be 10 percent, and they have built the proposed budget based on that. Senator Rawson asked what other programs were concerned with autism, and Dr. Brandenberg said he did not know.
Donna Marie Shibovich, Greeter, Publications Person, and Consumer Representative for the National Alliance for the Mentally Ill (NAMI) of Northern Nevada, testified that she is currently on three medications. She said the combination of drugs she has been prescribed has led her from a life of suicide attempts and psychosis to being productive and working in the community. She expressed her thankfulness that these medications are covered by Medicaid.
Ms. Shibovich said that the people she is appealing for are those who do not get atypical medications because they are too expensive, and pleaded that more funds be allocated for more people to be given the chance that she has been given. She said the older medications have terrible side effects, and people are more likely to stay on medications if they do not have these side effects. She said it is cheaper in the long run to medicate her than to hospitalize her. She said that when she was in Illinois she was in the hospital more than she was out. Her medications have changed that, she added.
Ms. Shibovish said funding is needed to keep the doctors presently working at the Nevada Mental Health Institute. She said she gets a new doctor three or four times a year and it is hard to coordinate services. She asked that funding be provided for doctors so that she could have a doctor to provide her medications. She stressed that continuity of care is important.
She concluded by reading of a poem that she wrote entitled Please Don’t Judge Me (Exhibit G).
Joseph Paul Tyler, President, National Alliance for the Mentally Ill of Northern Nevada, explained that NAMI is primarily funded from private sources. Most reliance is on the pharmaceutical companies on a national level. Mr. Tyler said that he does a television show called Erasing the Stigma that airs in Reno, which gets its funding from the pharmaceutical companies. He noted this is a community support kind of show. He said that Dr. Brian Lahren, who was with him, is his financial intermediary.
Mr. Tyler said he came to speak to the committee as a consumer of mental health services, and pointed out that while he may not be crazy he is not stupid. He said that as the president of the NAMI of Northern Nevada he is an advocate for the mentally ill, and he has learned to turn lemons into lemonade. He is now a peer counselor at the Nevada Mental Health Institute as well.
Mr. Tyler said the two issues he wanted to bring to the committee for consideration are consumer or peer counseling positions, and medications. He said he has been psychotic and sick, in and out of the hospital, so he knows how to help people in a lot of cases who have a mental illness problem because he has been there himself. He indicated he knows how to help others, maybe more so than a psychologist in some cases. He said he feels that we need more people like himself. Mr. Tyler said that he has been working with inpatient groups at the Nevada Mental Health Institute, and he feels that when he can talk to them from his own experience, it helps people to identify with him.
Mr. Tyler said that during every session he talks about medications for mental disorders, and expressed appreciation for his understanding that the committee has backed the usage of state-of-the-art medications like the one he is on. It has made all the difference in the world to him, he noted. He acknowledged that it does not work for everyone, and that is why there need to be choices for the new medications, depending on the individual’s disorder. He said that, although these medications are not cheap, they work much better than the old ones. He stressed that he would not be able to talk to the committee today if it were not for his medications.
Mr. Tyler commented that there is a doctor at the Nevada Mental Health Institute who has written a book called Cost Efficient and Effective Prescribing of Psychotropic Medications. Mr. Tyler said the doctor details in his book ways to shave off some of the high costs of medications and states he can save a few percentages by getting doctors to prescribe different levels of medication. Mr. Tyler recommended it as a common sense writing. Senator Raggio said that there is an appropriation in the budget for $75,000 recommended by the Governor to NAMI.
Dr. Brian L. Lahren, Lobbyist, Executive Director, Washoe Association for Retarded Citizens, Inc. (WARC) explained that he sits on a number of different provider groups of statewide affiliation. He noted that all the observers in the audience were in agreement and very appreciative of what has been included in the budget this time. He said he was also pleased to hear how well the care providers were doing, because they had been under a different impression of the state of affairs with respect to the private provider community.
Dr. Lahren said that provider rates have not been adjusted since 1996. At that time two rates were adjusted within the reimbursement package for community training centers, and that affected approximately 10 percent of the consumers of service within the whole state system. The rest of them, he added, were not affected by it. He said what has resulted over time is an accumulating burden of responsibilities and very little in the way of rate increases. The community training center budget, when adjusted for inflation, has seen a 14 percent increase in rates since 1980, and during that time they have assumed huge responsibilities that have largely been uncompensated for. He insisted that right now the turnover rate for large providers of supported living arrangement services in the state is over 200 percent per year. The amount they receive for administration is insufficient to pay even for the advertising to replace the positions they are losing.
Dr. Lahren said that for the vocational services, the average rate of turnover in the state has been 130 percent this last year. That, he stressed, is huge. He said the providers are paying their people $7 an hour plus fringe benefits, and they have to pay training costs because of everything they have to do. He said they are asking people to change adult diapers for the same pay that people are paid to flip hamburgers at Burger King. It is simply impossible to find people to do that, he said, and described it as a crisis situation. People are turning away clients and losing staff. Dr. Lahren said the programs have a difficult time making it, despite the fact that contracting with private providers is one of the most cost-effective ways the state has ever devised for providing services to people with disabilities.
Dr. Lahren said that his agency will spend $1.2 million this year providing services to about 105 adults with developmental disabilities, and the state will provide them $503,000 in compensation. He said his agency comes up with the other $700,000 to make that program work. He said WARC has many businesses on the side that help them support services, but many of the other smaller providers do not. He repeated that it is impossible to make the system work.
With respect to waiting lists, Dr. Lahren said that legislators are constantly being told that this year all the waiting list will be funded. The implication is that this is somehow going to take care of the waiting list issue, and that the committee should not have to address it next time. He explained that Nevada serves about 50 people per 100,000 population in its developmental services divisions according to data from the developmental services division. That is approximately 100 percent less than the numbers served per 100,000 in Colorado and Utah. It is 200 percent less than in Montana, 400 percent less than South Dakota, and 500 percent less that North Dakota. He said it should not be a surprise that every time the end of the waiting list is reached that at the next legislative session the waiting list is almost as large as it was the session before.
Dr. Lahren said that, because of the consistent inability of the state service system to be able to predict what is needed in the future and give the legislators the possibility to come up with wise public policy on how to deal with this issue, Nevada has remained, since 1977, the lowest funded state in the nation. Nevada has consistently, since 1977, had the lowest rate of fiscal effort of any state in the nation, he said. In the meantime, he pointed out, people who seek services get frustrated and are unwilling to put their names on waiting lists until services appear.
Dr. Lahren said that the providers have repeatedly gone to the Director of the Department of Human Resources and offered to work with her to develop comprehensive long term studies on this particular population. He lamented that they have been rebuffed at almost every turn. He noted that when a proposal is presented in the budget for a long term study it is primarily for hospitals, doctors, skilled nursing facilities, and nursing homes. This, he said, is all at the bottom of the list in a category called “Other”, and there is no plan that deals with the issue of developmental disabilities. This D. Lahren noted with reference to Bill Draft Request S-970.
BILL DRAFT REQUEST S-970: Require the Legislative Committee on Health Care to study the placement of disabled persons in institutional settings. (Later introduced as S.B. 486.)
Dr. Lahren announced that they too have a bill draft that they were hoping to bring to the Committee’s attention that will address rates for the provider community. He said he does not expect it to get much attention in the Department of Human Resources or to accomplish any change in the present hiring situation.
DEPARTMENT OF ADMINISTRATION BUDGET OVERVIEW
Perry Comeaux, Director, Department of Administration, indicated that the department’s purpose is to support the success of state government by providing quality, effective, customer-driven support services that will assist state agencies in achieving their missions and goals. He said the Department consists of ten divisions. Mr. Comeaux said that he also serves as the chief of the budget and planning division as well as a clerk to the State Board of Examiners and chairman of the State Public Works Board.
In total, he said, the Department of Administration has 365 full-time-equivalent positions. The goals of the department are to measurably improve customer service, to find more efficient ways to provide the department’s service, and to serve the department’s customers as well as the private sector would do for as little or less cost, or allow the agencies to go elsewhere.
Mr. Comeaux stated the recommended budgets of the divisions of the department are maintenance level and contain no significant recommended changes with the following exceptions. The first is the addition of positions to the State Public Works Board to enable them to better manage projects. The committee was recently briefed on those requested positions. The second item of significance in the budget is a change in the workers’ compensation coverage contained in the risk management budget. The third is the consolidation of accounting positions from the State Public Works Board and Victims of Crime Program with the Administrative Services Division. That is where all the rest of the department’s accounting positions are, he added.
The fourth, Mr. Comeaux continued, is a transfer of the Pre-audit Section of the budget and planning division to the Division of Internal Audits. That is in connection with the “rollout” of the IFS. Finally, through a bill draft request, the department is recommending the State Printing Division status as sole-source printer for the state be changed.
Budget and Planning – Budget Page ADMIN-1 (Volume 1)
Budget Account 101-1340
Mr. Comeaux said that Budget 101-1340 begins on page 1 under the Administration tab in the Overview of Budget Presentations to the Money Committees of the 2001 Legislature (Exhibit F). He indicated the mission of the budget and planning division is to produce a fiscally sound executive budget that follows the Governor’s priorities and provides the necessary resources for state agencies to fulfill their missions. He added that the mission is also to provide responsible budgetary oversight.
M-200 Demographics/Caseload Changes – Page ADMIN-2
Mr. Comeaux said that in decision unit M-200 the department is requesting 1 additional Budget Analyst IV position with associated operating costs because of the increased complexity of the budgeting process.
E-225 Reward More Efficient Operation – Page ADMIN-4
Mr. Comeaux said that in E-225 the Department of Administration is requesting the transfer of the New Executive Budget System (NEBS) from the mainframe to a Unix environment. The department has accomplished that by taking what would be their facility charges in the second year of the biennium when the department is putting The Executive Budget together, and requesting a transfer of those funds to the first year of the biennium to pay for the machine.
Senator Raggio asked what that means in layman’s terms. Mr. Comeaux said that their executive budget system now runs on the mainframe. What this change would mean is that they would buy a mid-size “box” and run the executive budget system on that “box.” There are a number of advantages to that, he noted. When the department was preparing The Executive Budget this past summer, one of the things the department had provided for was direct agency input into the budget system instead of the traditional method of having the agencies develop their budget requests. He pointed out that process required that it be given to the Department of Administration in paper format, and then the department’s budget analysts would spend the first month inputting the budgets into the system. He described this process as very inefficient.
Mr. Comeaux said the Department of Administration had provided training to agency staff and asked that the agencies input directly into the system. He pointed out that was before the capacity of the mainframe that they shared with Genesis and others was increased, and agencies could not input budgets into the system. He described the response time as “ridiculous.” There would be a wait of 7 minutes before another entry could be made. He said that problem was corrected, but problems like that would be eliminated in the future. He said he has been told the budget system is Oracle-based and would run better in a Unix-type environment than in a mainframe environment. In summary, he said, there are a number of advantages, and the conversion would free up capacity in the mainframe for other applications.
E-275 Working Environment & Wage – Page ADMIN-4
Mr. Comeaux said that decision unit E-275 recommends the elimination of a Management Analyst III, the reclassifying another Management Analyst III position to a Budget Analyst IV, and the addition of a Public Service Intern II position to serve as a special projects position in the Department of Administration.
E-805 Major Declassifications – Page ADMIN-5
Mr. Comeaux explained E-805 recommends reclassifying five positions in the department’s Pre-audit Section to Auditor III levels over the biennium, three in the first year and two in the second year. He noted Pre-audit will transition to post-audit over the biennium as the department rolls the IFS out. Since these auditors will be operating in a post-audit fashion, it will be necessary to have professional auditors in those positions as opposed to the more clerical type positions that the department now has.
E-900 Transfer to BA1342 – Page ADMIN-6
E-901 Transfer to BA1342 – Page ADMIN-6
Mr. Comeaux said decision units E-900 and E-901 recommend the transfer of the Pre-audit Section to the Division of Internal Audits.
Division of Internal Audits – Budget Page ADMIN-8 (Volume 1)
Budget Account 101-1342
Mr. Comeaux then discussed Budget 101-1342, the Division of Internal Audits. He said the mission of this division is to improve state government operations and insure taxpayer money is spent wisely by providing executive budget agencies with analyses, appraisals, recommendations, training, and assistance concerning the adequacy of their systems and internal control, and the effectiveness and efficiency of agency operations.
E-276 Working Environment & Wage – Page ADMIN-11
Mr. Comeaux said that in E-276 the department is requesting funding for a peer review in the second year of the biennium. He said it is required by subsection 9 of NRS 353A.045, which specifies that the division adhere to the standards of the Institute of Internal Auditors. The department just recently learned that the institute standard previously required a peer review every three years, but that has been changed to every five years. Mr. Comeaux explained that since they began the Division of Internal Audits during the last biennium, the department thinks it is important to get a baseline peer review in the second year of the upcoming biennium. After that, he said, they can be scheduled every five years. This decision unit also contains a request for master auditor training and out-of-state travel funds to meet proficiency requirements for the auditors through continuing education, he added.
E-900 Transfer from BA1340 – Page ADMIN-12
E-901 Transfer from BA1340 – Page ADMIN-12
Mr. Comeaux said that the E-900 and E-901 decision units are the other side of the transfer of the Pre-audit Section from the budget and planning division.
Assemblyman Beers asked Mr. Comeaux to elaborate on the transfer from pre-audit to post-audit. Mr. Comeaux replied there is a Pre-audit Section in the budget and planning division that receives every paper voucher from all state agencies. That includes vendor payments, travel reimbursement requests - everything. For a long time the department individually reviewed every single claim to be sure it was complete before it was sent over to the Office of the State Controller for processing and payment. Six years ago, he noted, the unit converted to a random selection of claims for review before claims were sent for processing.
Mr. Comeaux said that when IFS is completely “rolled out” there will be no paper; the paper will remain at the agencies and claims will be processed electronically. To meet the requirement of the statute, which requires the Board of Examiners to determine claims are accurate and appropriate, he said the unit will audit claims after the fact. He said the post-review will be through the Division of Internal Audits where claims will be randomly selected for review on the premises of the agency where the paper records will be kept. He described this as a perfect fit for the Division of Internal Audits because the Financial Management and Control Section of the Division of Internal Audits helps agencies stay on top of their systems of internal controls, which are designed to see that claims are correct when presented for processing. Mr. Comeaux explained that internal audit conducts audits, including financial audits. So, he explained, if problems are indicated in this random post-audit of claims, that information is within the Division of Internal Audits where it needs to be for any kind of expanded look at the adequacy of the processing procedures.
Mr. Beers asked whether IFS produces a report showing accounts that are perilously close to being or are over budget. He asked whether there is someone whose job it is to analyze the account balances as they grow and highlight ones that need looking into. Mr. Comeaux said that IFS does produce reports like that. The primary responsibility is on each agency to monitor its budget and be sure the agency is spending appropriately and does not overspend. But, he added, the budget analysts in the Budget Division also keep an eye on that.
Insurance and Loss Prevention – Budget Page ADMIN-16 (Volume 1)
Budget Account 715-1352
Mr. Comeaux directed attention to the Insurance and Loss Prevention Budget. He said this budget is within the Risk Management Division. The mission of the Risk Management Division is to assist state agencies in minimizing the state’s property and liability exposure, to obtain cost effective and quality workers’ compensation insurance for the state, and to encourage safe work environments to reduce the number of employees who suffer work-related injuries.
Mr. Comeaux pointed out that the significant change under this budget is in the workers’ compensation insurance plan. He said a transition has been made from a retrospective rating plan to a large deductible plan. Under the new plan, basic insurance and claims administration fees are lower, and greater medical fee discounts have been negotiated. In addition, he noted, claims costs are paid on an actual basis rather than an incurred basis. This means claim reserves are not paid, only actual costs are paid as they accrue. He explained that custom protocols and procedures designed to meet the unique needs of the state have been implemented and are expected to maximize the efficiency and minimize litigation and lost time. Mr. Comeaux said this change will produce savings over the biennium on a cash flow basis of approximately $6 million. He pointed out that if the division’s claims experience in the future is similar to what it has been, there should be a savings of about $3 million a year for a number of years.
Senator Coffin noted that represents a huge savings. He asked whether that includes the cost of a stop-loss contract of some kind and asked what company the division would be buying it from. Sue Dunt, Risk Manager, Risk Management Division, Department of Administration, said the stop-loss selected under this deductible plan is $750,000 per accident. Therefore, she noted, if the state has a multi-claim injury the greatest liability it will have is $750,000. This coverage was purchased through American International Group (AIG), whose Nevada company is National Union Fire Insurance Company of Pittsburgh.
Senator Coffin asked whether the division is estimating and how long it had been on this plan. Ms. Dunt said the division just started this plan January 1. Senator Coffin asked how the division had estimated the savings budgeted for $6 million. Ms. Dunt replied that an actuarial study had been used to produce those comparisons. She said that was achieved through analyzing the division’s past history of losses and projecting those over the next five years. She said that, as Mr. Comeaux indicated, if the losses remain at the current levels, the cost savings will be approximately $3 million a year. Senator Coffin asked what the state’s annual payments are right now, and Ms. Dunt responded that annual claims costs are approximately $5 to $6 million a year. She explained that is on an incurred basis, which includes the reserves for any future costs that a claim may incur. Under this current plan the state will only be paying actual costs as they happen, and that is a great contributor to the cash flow benefit that will occur under the new plan, she added.
Senator Coffin noted this means a 40 percent savings, if one does not count the cost of the interest on the reserves that are not held. He asked whether the division really could project that much. Ms. Dunt assured him they are very confident they will be able to achieve that savings.
Senator Rawson asked what the stop-loss figure is. Ms. Dunt said it is $750,000 per accident. Senator Rawson asked whether there is any contingency plan to deal with a catastrophe such as a major disruption in the state with a significant loss in everything from payments to actual damages. Ms. Dunt said the state does have excess coverage for property damage at a $100,000 deductible level. The state also has excess liability at $1 million per occurrence. Senator Rawson asked whether the state has any great liability if there were a natural occurrence, such as a major earthquake and a disruption of services. Ms. Dunt said she believes the state is adequately covered. She explained that under the property program the deductible level for property damage in an earthquake is 2 percent of the total loss. The liability would protect the state from a catastrophic loss in that scenario under the excess liability policy for actions that third parties might bring against the state.
Senator Raggio mentioned, as a point of clarification, that the original discussion was about the workmans’ compensation plan for the $750,000 stop loss, and this is a risk management function with general insurance coverage. Senator Raggio asked whether the estimate on the workers’ compensation was developed on the basis that in fiscal year 2000 the state paid actual premiums of approximately $10.3 million, and whether the division is budgeting approximately a $4.3 million reduction. Ms. Dunt confirmed that that is the case. She said they are going from the retroactive rating plan to this new and larger deductible of $750,000.
Assemblyman Hettrick asked what specifically the division was reserving money for. Ms. Dunt explained that under the new plan the division does not need to pay claim reserves at the time that they are established, which is what they had to do under the retrospective rating plan. At this point, she said, the reserves will be used to help the division project future reserves for this particular category within the budget.
Mr. Hettrick asked whether the Capitol Police Division falls under heart-lung coverage as do other police officers and firemen in the state, and Ms. Dunt said they do not. Mr. Hettrick said that is a major concern for him, and called attention to the situation in southern Nevada in which the cities have taken on self insurance and then found the cities are liable for heart-lung disease as much as 25 years later.
Senator Neal asked whether the Department of Administration is in any way involved with the purchase of the building from the State Industrial Insurance System (SIIS). Ms. Dunt said the division is not so involved under the Workers Compensation Budget. Mr. Comeaux said that the State Public Works Board would be involved.
Assemblywoman Giunchigliani noted part of the savings is driven by adding NDOT to the plan, and asked what the rationale and need are for that. She also asked what percentage increase can be attributed to their being brought in. Ms. Dunt said NDOT previously had a separate policy with Employers’ Insurance Company of Nevada (EICON). She explained that when they analyzed the cost benefit of being included under that state’s program, the results demonstrated a cost benefit to having one policy instead of two policies. Ms. Dunt noted the Nevada Department of Transportation has an excellent claim-loss history, and said that bringing them to the table under their program did not hurt at all.
Ms. Giunchigliani asked whether NDOT is under the state’s loss risk part as well, and Ms. Dunt replied they are. Ms. Giunchigliani asked whether there would be liability on the state if there were a nuclear accident on the roadways when a transport was coming through. Ms. Dunt explained that unless it is one of our employees that caused the accident, she believed we would not be liable.
Senator Raggio noted that EICON is now a private company. He asked what this does to EICON. Mr. Comeaux said he is unsure what it does to EICON. He acknowledged that this change would obviously remove a significant piece of business from them. He said they have not communicated on that subject.
Indigent Supplemental Account – Budget Page ADMIN-23 (Volume 1)
Budget Account 628-3244
Indigent Accident Account – Budget Page ADMIN-25 (Volume 1)
Budget Account 628-3245
Mr. Comeaux said he had little to say about the indigent supplemental account and the indigent accident account, other than to say the anticipated increase in assessed values over the biennium have been built into those budgets. Senator Raggio suggested the indigent supplemental account may be used to fund patients at the Southern Nevada Veterans’ Home. Mr. Comeaux recalled that had been discussed earlier in this meeting, and the chairman had asked that Mr. Comeaux look at that and advise the committee. He said he has not had time to do that yet. Senator Raggio commented the committee was told there is supposed to be some payment from local governments to cover the cost of residence, and he is uncertain as to where that would come from.
Printing Office – Budget Page ADMIN-30 (Volume 1)
Budget Account 749-1330
Mr. Comeaux said that the printing office budget begins on page 30 of the budget. He said that the Department of Administration has submitted a bill draft request to change the status of the State Printing Division from that of sole-source provider of printing to state agencies to a basis whereby agencies would have the opportunity to solicit requests for proposals from private printers as well as from the State Printing Division. He said this would put the printing office in a position of having to be competitive in cost and delivery time to be the successful bidder on projects. He said the division is confident it is competitive and does not believe the change will have a huge impact. Senator Raggio asked who would make the decision on the bid, and Mr. Comeaux replied the bids would be evaluated as they are now for other products and services that are subject to bid.
Senator Raggio expressed concern that the bidding process would take time. He suggested that agencies are often looking at overnight requests, and he asked how that would be handled. Mr. Comeaux said that the State Printing Division has had meetings with the Purchasing Division to put this together in a manageable way. He acknowledged that it is unthinkable to bid every job. He said what is contemplated is that bids would be made on types of jobs for extended periods of time so that it does not become administratively “undoable.” For smaller kinds of jobs the department is looking at establishing procedures.
Senator Mathews asked whether the state had just spent a lot of money to upgrade the State Printing Division, and Mr. Comeaux replied that the department routinely purchases new equipment.
Assemblywoman Giunchigliani asked whether the division is going to do a status report on the satellite quick-print service in Las Vegas. Mr. Comeaux replied decision unit M-101 proposes an 8 percent increase in raw material costs, which is basically paper costs. Decision unit M-200 proposes funding for the satellite quick-print service in Las Vegas. He recalled that this is an item in the printing office’s budget for this current biennium that the committee dealt with in the last session. He said that office in Las Vegas was never established. The printing office was working on that and ran into a technical problem and budgetary problem because of the equipment they needed. Electronic files could not be E-mailed to the Las Vegas site as hoped, and the equipment needed to make it work costs approximately $125,000, which is well beyond the budget capability. He said a couple of vendors have since been found who have products that will meet the need and are within budget. Mr. Comeaux said the division is now prepared to go forward with this service in Las Vegas.
Senator Raggio asked whether it would require a position in Las Vegas, to which Mr. Comeaux replied the service would use an existing position.
Assemblyman Hettrick commented that the budget shows quick-print sales built into the budget as a revenue source. He asked whether those sales revenues exist, or whether that is just part of the regular printing income. Mr. Comeaux replied those revenues do not exist. He said they are anticipated with the opening of the service. He noted that there have been sales revenues for a number of years for the northern quick-print operation in Carson City. Mr. Hettrick asked whether the $757,000 in the budget is the actual number for northern sales, or whether that includes some projection for the South as well. Mr. Comeaux said that includes a projection for the South as well. Mr. Hettrick asked how much the projection is for the South, and Mr. Comeaux replied it is $157,000. Mr. Hettrick noted that there is a hole in the budget for $157,000 plus the cost of the equipment.
Senator Raggio asked what “exterior repairs” for $206,000 refers to. Mr. Comeaux said it is for the exterior of the printing building. Donald L. Bailey Sr., Chief, State Printing Division, Department of Administration, explained that the printing office is going to repair the condition of the outside of the building. Mr. Bailey explained the building was prefabricated and put up in one section and there is deterioration from the weather and the building is leaking.
Motor Pool – Budget Page ADMIN-39 (Volume 1)
Budget Account 711-1354
Mr. Comeaux indicated that the Motor Pool Budget is on page 39 of the budget. He said the mission of the State Motor Pool is to provide clean, safe, and environmentally friendly vehicles to state officers and employees conducting official business.
M-200 Demographics/Caseload Changes – Page ADMIN-41
Mr. Comeaux said the M-200 decision unit in this budget reflects the revenue and expenditures associated with the addition of 102 vehicles requested in a “one-shot” appropriation.
E-225 Reward More Efficient Operation – Page ADMIN-42
Mr. Comeaux explained that E-225 is funding recommended for a consultant to study the state vehicle rental versus private rental, mainly in the urban areas of Reno and Las Vegas. He said it is planned that a consultant be hired to look at the records and compare actual costs to what the costs would be if those services were provided through private entities. He stated this would help determine whether all or part of the motor pool operation should be privatized.
Assemblywoman Chowning asked whether the state is going to pay someone $50,000 to study the feasibility of vehicle rentals. She also asked whether the state could count on the maintenance of vehicles rented from private agencies. She indicated there is a lot at risk with this proposal, and asked whether it had ever been studied before in Nevada. Mr. Comeaux said he is not aware of its having been studied, certainly not recently.
Senator Raggio asked whether it is a recommendation from the fundamental review committee, and Mr. Comeaux replied it was discussed by the committee but he did not remember whether it was a formal recommendation. He said he thought it was. He said he would investigate that and get back to the committee. Senator Raggio suggested that if the State Motor Pool is going to construct a brand new building they better wait until they get the study report.
Assemblyman Hettrick said he was on the fundamental review committee and he said the State Motor Pool was very helpful in this. He said motor pool provides vehicles for places where private agencies are not going to rent vehicles. He suggested that the members of the committee look at the performance indicators, and indicated the costs are 47 cents to 52 cents per mile, as opposed to 34 cents allowed by the state. He also noted the state owns vehicles that are driven 500 to 800 miles a month, and in some places the state must have a car. He also recognized the need for private agencies that would provide cars in a major metropolitan area to guarantee cars and to bring the cars in on their own. The point of the study is that the state may be able to save some money on vehicle purchase costs and the cost of a building, he added.
Senator Coffin asked Mr. Comeaux to be more specific on what he means by purchasing environmentally-friendly vehicles, and whether he intends to buy some of the new hybrid vehicles to see how they work. Frank Revell, Chief, State Motor Pool, Department of Administration, said the state has five hybrid vehicles and is using them in an evaluation program. One problem that occurs with the hybrids in Las Vegas is they don’t meet the federal requirements as an alternative fuel vehicle because they run on gasoline. However, he said, these vehicles routinely get 50 miles per gallon.
Mr. Revell said the State Motor Pool is subject to the mandate of Chapter 486A of Nevada Revised Statues to provide alternative-fuel vehicles. He explained the state has accepted the hybrids because they are super-ultra-low-emission vehicles and have been accepted as an alternative-fuel vehicle in the state program. He said Reno is not subject to the federal program, so the hybrids may work the best in that market. Mr. Revell said the other concern the motor pool has always had with alternative-fuel vehicles is the range of the vehicles’ capabilities. In Las Vegas it is not a significant problem because people just drive within Las Vegas. In the North, any vehicle an agency has basically needs to be able to go anywhere in the state. These vehicles, he indicated, do have the range necessary for their purposes because of their normal size gas tank and their efficiency. He indicated there is one such vehicle in Carson City, which is available at any time for “drive around and evaluation purposes.”
Senator Coffin asked whether these vehicles have had a problem not meeting the gasoline requirements in Las Vegas, and whether that was because they do not run on gasohol. Mr. Revell said that at this time there is no gasohol available in Nevada, and there probably will not be. He pointed out the gas-alcohol mix that is presently used in Las Vegas is not an approved alternative fuel under the federal program. He said it is an oxygenated fuel which helps reduce emission, but it is still gasoline, and the federal alternative fuel program allows only compressed natural gas, propane, hydrogen, and several specified others. He also said Las Vegas is not an ideal environment for ethanol because it has a very low vapor density. On a hot day in Las Vegas one would see several “executive” cars parked beside the road, he added.
Senator Mathews asked how small these cars are, and Mr. Revell replied that they are quite comfortable for four people for a reasonable distance. The one in Carson City is a Toyota Echo with an electric motor, he said.
Assemblywoman Giunchigliani asked whether electric cars qualify as alternate fuel vehicles, and Mr. Revell explained that with electric cars there is a lack of battery technology. The range is very limited in a pure electric car, and it takes some dollars to refuel the car. At this point the hybrid is considered in the industry to be the best of both worlds. He said they have a very small very efficient gasoline engine that powers a motor-generator combination. He explained that as the car is driven, under acceleration the regular motor and the electric motor both power the car. When the accelerator is raised the gasoline engine just shuts off, and as the vehicle coasts to a stop the electric motor turns into a generator and recharges the battery. He said the cars actually get more mileage in town. They get 54 miles to a gallon in town and only 45 on the highway, he added.
Assemblywoman Giunchigliani asked whether Nevada law allows eventually for other alternatives. Mr. Revell replied that Nevada law is fine. He said it is the federal law that the motor pool cannot get around. Presently, he said, the motor pool is asking for a super-ultra-low-emission (SULE) vehicle. He said some of these cars have such clean emission you could let it run in a closed garage and you wouldn’t even wake up with a headache.
Ms. Giunchigliani asked what is collected on taxes on the car rental, and whether the state splits part of that with the rental agencies. Mr. Revell said that at this time the state passes on the rental for the vehicle to the agency. He said that in this initiative the motor pool is talking about the daily rental operations. He pointed out that the motor pool still has 80 percent of its vehicles as monthly rentals, and noted they still have to service those vehicles and take care of them. He said that the motor pool also has a significant source of revenue in servicing other agencies’ vehicles. He stated that if, for some reason, the motor pool should move into privatization, one of their first steps would be to solicit more business elsewhere to help pay motor pool’s own expenses.
Assemblyman Beers asked when hydrogen cars could be expected. Mr. Revell replied the motor pool does have plans at this time to convert one of the motor pool’s shuttle buses to hydrogen operation, but companies that do that are not yet firmly established in Nevada, preferring bigger markets elsewhere.
Senator Raggio asked Mr. Comeaux whether he had discussed the reserve situation with the staff. Mr. Comeaux responded that he had, and that he would be getting back to the committee.
Motor Pool Vehicle Purchase – Budget Page ADMIN-45 (Volume 1)
Budget Account 711-1356
Mr. Comeaux said that under the vehicle purchase account, budget 711-1356, there is a provision for the replacement of existing vehicles, 59 in the first year of the biennium and 47 in the second year for a total of 106.
Purchasing – Budget Page ADMIN-49 (Volume 1)
Budget Account 718-1358
Mr. Comeaux directed attention to the Purchasing Division Budget on page 49 of the budget. He said the mission of the Purchasing Division is to promptly provide state agencies and political subdivision customers the opportunity to obtain quality products and services at competitive prices, and to efficiently facilitate the reutilization of surplus state and federal personal property while maximizing the state’s investment. He said highlights from the budget include proposed funding for the Nevada Mall project. A bill draft request will be submitted to reduce the purchasing fund level from its existing level of $1,250,000 by $150,000 each year for five years until it is to a level of $500,000. Those funds would be used to fund the cost of E-commerce purchasing efforts over the next five years, he added.
E-900 Transfer from B/A 1367 – Page ADMIN-51
Mr. Comeaux said decision unit E-900 proposes consolidating the surplus property budget, which is budget 1367, with the Purchasing Division’s main budget, 718‑1358.
Surplus Property – Budget Page ADMIN-56 (Volume 1)
Budget Account 101-1367
Mr. Comeaux said it is proposed that one half-time position that is currently vacant be elimination in Surplus Properties base budget.
Assemblywoman Giunchigliani asked whether the state had reviewed the issue from several years back of allowing agencies to purchase more office items from the private sector. Bill Moell, Chief, Purchasing Division, Department of Administrator, said the Purchasing Division is trying to raise the local purchasing authority, which right now is at $500. He said there is a bill draft in that would have that level set by the State Board of Examiners. Mr. Moell also said that the Nevada Mall project will get purchasing out from pushing requisitions and into managing contracts. He said the goal of the project is to create a password-protected website to be used by all of the Purchasing Division’s customers. The website will include the catalogs of the division’s office supply contractors. He said he believes that in the future the division is going to a multiple award on office supplies and multiple award on a number of different contracts that will increase competition.
Ms. Giunchigliani asked how long it would take to accomplish this, and whether the $500 limit on the Bill Draft Request (BDR) was monthly or yearly. Mr. Moell responded that figure is per purchase. He said it is set by statute and the division is trying to have that raised to be more flexible with the agency needs.
Senator Coffin asked whether the phrase “Nevada Mall” is actually in the budget. Mr. Moell responded the Purchasing Division is working very hard on basic business decisions in hopes that it will occur. The Nevada Mall is a password-protected website where the division bids open term contracts. Their philosophy is to “bid once and use lots.” He explained that the catalogs of those contractors who want open-term contracts with the state of Nevada pricing will be displayed and linked via the Nevada Mall for shopping by state agencies and other government agencies throughout the state. It is not mentioned in the current budget because it is part of the bill, he said.
Senator Raggio asked that it be clarified that the Nevada Mall is a proposed utilization of the Internet for the purpose of purchasing. He asked how it would work as a practical matter. Mr. Moell said that Purchasing Division will assign passwords and work with agencies to assign passwords. An agency will set up its own approval process so that if clerical staff wants to order office supplies they can do so up to a specific limit. He said if approval is required, that can be routed electronically through budget if necessary or through DoIT. When agency staff get “on the Mall” they will look at on-line catalogs. All of the items in the on-line catalog will be legal to buy because they will have been through the purchasing process. Clerical staff will order the items they need directly from the vendor and the job of the Purchasing Division will be to monitor and make sure the pricing is appropriate. Mr. Moell said that in that situation the Purchasing Division would become contract managers.
Senator Raggio asked whether this procedure is used in other states, and Mr. Moell replied that it is increasingly used in many states. He said there are about 40 states now that have various initiatives.
Assemblyman Beers asked whether DoIT has reviewed and approved the methodology the Purchasing Division is using to develop this system. Mr. Moell said the division has discussed it extensively with DoIT and with the E-Commerce committee, and they have neither opposed it nor supported it.
Buildings and Grounds – Budget Page ADMIN-66 (Volume 1)
Budget Account 710-1349
Mr. Comeaux directed attention to Buildings and Grounds, budget account 710-1349. He said the mission of the Buildings and Grounds Division is to assist state agencies in providing an efficient and affordable work environment; to maintain the integrity of state owned buildings and their systems, thereby prolonging the life of the buildings and systems; and to provide economical and efficient mail handling services to state agencies. Two full-time positions are proposed for elimination in the base budget and no new staff is proposed for addition.
Continuing, Mr. Comeaux explained building rent will increase an average 25 cents a square foot based on the recommended budget. Factors contributing to the increase in state-owned building rents include increases in salaries for personnel of the Buildings and Grounds Division and Capitol Police, and contracts for janitorial services, which have increased during this biennium. The size and dollar amount of the renovation projects recommended in this budget have increased. There will also be buildings scheduled for remodeling that will remove billable square footage for rent during the biennium, and that loss in rent revenues will be added to available and billable rent space. The bottom line is that the square foot costs will go up an average 25 cents a square foot this biennium.
E-730 Maintenance of Buildings and Grounds – Page ADMIN-70
Mr. Comeaux said decision unit E-730 proposes funding for operating and utility costs for three new buildings that should come on line during the biennium.
E-850 Special Projects – Page ADMIN-71
Mr. Comeaux said decision unit E-850 proposes funding for on-going maintenance and renovation projects on state owned buildings.
Mail Services – Budge Page ADMIN-74 (Volume 1)
Budget Account 713-1346
Mr. Comeaux said the mail services budget, which is on page 74 of the budget, has only one highlight to be mentioned. He said the postage rate increases approved for January 2001 will increase the rate from 33 cents to 34 cents for first class postage. He said the 3 percent increase is passed on to all state agencies.
Clear Creek Youth Center – Budget Page ADMIN-81 (Volume 1)
Budge Account 101-1353
Mr. Comeaux said the next budget, for the Clear Creek Youth Center, is on page 81 of the budget, budget account 101-1353. He said the Division of State Parks will probably be taking over the operations of the Clear Creek Youth Center, but that is not indicated in the budget. He indicated the budget as presented is for business as usual at Clear Creek. However, he said, this budget would accommodate that change in management if that determination is made. The salary level of the state parks’ positions is similar, if not identical, to the salary level of Department of Administration positions. The Commission on Tourism is funding a study of alternative uses and users for the Clear Creek facility. Mr. Comeaux said it is his understanding they have a first draft of that study. There is a capital improvement project 01-M5 in the amount of approximately $900,000 included in the Capital Improvement Program for improvements at the Clear Creek facility. The improvements are mainly to correct life safety issues, such as replacing deteriorated flooring and repairing sidewalks, he added.
Assemblywoman Giunchigliani asked why the Division of State Parks would be picking up management responsibility for Clear Creek. She indicated that she thought the state was selling it. Mr. Comeaux said no provision has been made to sell it. He said that the Division of State Parks is being considered if the state is going to continue to operate the facility. He said the Division of State Parks is the agency best equipped to operate that kind of facility and to continue to make it available to the kinds of users that have traditionally used it. He said a number of people have expressed interest in it for the traditional kinds of uses that generally involve a subsidy on the part of the state. He noted that they have also had expressions of interest from non-traditional types of users. He said such use of the facility could be somewhat controversial, and he is not aware that they have received any firm offer that seems to meet all of the requirements.
Mr. Comeaux confirmed for Ms. Giunchigliani that the salary levels of the Division of State Parks positions are similar to those of the Department of Administration, and that is why the budget could handle that possibility, exclusive of the repairs that were noted.
Assemblywoman de Braga asked whether the groups that use it now pay anything for the use. Mr. Comeaux said they do. Mrs. de Braga asked whether it is envisioned that they would be able to use it more commercially if it changed hands. Mr. Comeaux said the Commission on Tourism’s study is investigating the idea that the Division of State Parks would do a better job of promoting the use of that facility than the Buildings and Grounds Division can do. He said the Department of Administration normally just takes care of facilities and operates them – they don’t know how to market them.
Mrs. de Braga said she had been encouraged by some of the people who worked at the facility to see whether there are more potential uses for it. Mr. Comeaux said that the use now is relatively limited and it is hoped that it can be expanded.
Admin-Administrative Services – Budget Page ADMIN-103 (Volume 1)
Budget Account 716-1371
Mr. Comeaux then directed attention to the Administrative Services budget on page 103 of the budget. He said the mission of the Administrative Services Division is to provide the administrators of the Department of Administration with timely and accurate financial and management information.
E-900 Transfer from BA-1560 – Page ADMIN-106
E-901 Transfer from BA-1562 – Page ADMIN-106
E-902 Transfer from BA-4895 – Page ADMIN-107
Mr. Comeaux said the highlights of this budget are basically the flip side of what the committee heard previously from the State Public Works Board. It involves the transfer of seven accounting positions from the State Public Works Board to the Administrative Services Division. Mr. Comeaux said decision unit E-902 recommends the transfer of one accounting position from the Victims of Crime budget. He said the State Public Works Board accounting positions are the only ones in the Department of Administration that were not in the Administrative Services Division, and he had forgotten about the one position in the Victims of Crime budget. This is being recommended from an efficiency standpoint. It is felt that if “all of their accounting eggs” are in one place the workload can be more evenly distributed and it will be easier to weather vacant positions. He said his department will also have a much better level of professional supervision for all of these positions and administrative services than they do now.
Dept of Administration – Hearings Division – Budget Page ADMIN-109 (Volume 1)
Budget Account 101-1015
Referring to the Hearings Division Budget 101-1015 on page 109 of the budget, Mr. Comeaux said the mission of the hearings and appeals division is to provide fair and timely administrative hearings in contested workers’ compensation cases.
M-201 Demographics/Caseload Changes – Page ADMIN-110
Mr. Comeaux explained decision unit M-201 is a proposal to use reserve funding for either one appeals officer and one legal secretary with associated costs, or one hearings officer and a legal secretary with associated costs. He said this is to provide for growth in the hearings and appeals division because of caseload, new assignment of cases, and other factors. This proposal is made to replace the previous practice of providing for this reserve in a separate budget account, he noted. Currently, he said, that is budget account 1014. Mr. Comeaux explained that this is not recommending a new practice, but rather a new method of reserving funds for these potential needs.
E-806 Unclassified Pay Changes – Page ADMIN-113
In addition, Mr. Comeaux said decision unit E-806 is a proposal for reclassification of one Hearings Officer position to an Operations Officer for the Las Vegas office. He indicated that position would be utilized in a combined administrative, technical, and fiscal capacity. It is an unclassified position, he added.
Senator Raggio noted that from the performance indicators the Hearings Division appears to be a very active division, and one in which the time between request and hearing is quite good. Mr. Comeaux said he believes that to be true. Senator Raggio asked whether the 45 positions recommended are adequate for their purposes, and Mr. Bryan A. Nix, Senior Appeals Officer, Appeals, Hearings Division, Department of Administration, assured him that it was.
Victims of Crime – Budget Page ADMIN-115 (Volume 1)
Budget Account 287-4895
Mr. Comeaux then moved to the budget for the Victims of Crime, budget 287‑4895, on page 115 of The Executive Budget. The mission of the Victims of Crime Program is to provide financial assistance to innocent victims of crimes committed in the state of Nevada. Senator Raggio asked whether all crimes are covered now, and Mr. Comeaux confirmed that they are. Senator Raggio asked what the limit to that assistance is. Mr. Nix replied the budget covers victims of accidents related to driving under the influence (DUI), and there is a $50,000 claim limit on every claim regardless of the nature, whether it is a DUI, assault and battery, or murder.
Senator Raggio asked whether there is also a built-in limitation depending on the amount of money that was appropriated. Mr. Nix responded there are a variety of limitations on the nature of the distributions. There is a limitation on wage reimbursement, on funeral expense reimbursement, and psychological counseling within the program itself. He said the overall claim limit is capped at $50,000. Senator Raggio asked whether any portion of the claim payment is federal money, and Mr. Nix replied that the victims program began receiving federal dollars about two years ago.
Senator Raggio pointed out the budget shows about $851,000 for the year 2003, but $1,200,000 for the year 2002. He asked whether there is going to be a reduction for some reason. Mr. Nix responded the way the dollars are calculated is based on the amount of money that is spent in the previous year. He explained state dollars are spent in the previous year, so that number is going to fluctuate as the program uses federal funds first and fewer state dollars in a particular year. Because of the funding formula, during the next year the program may use less federal money and more state money, which will increase the grant amount in the following year.
Senator Raggio said it appears there is a significant increase in the amount of court assessment fees that are going into this budget and asked whether that is correct. Mr. Nix explained that about four years ago the court assessments were redistributed because the Victim of Crime Program had a very healthy reserve. That reserve has ebbed down since that money has been allocated to other agencies. The Department is trying to build that reserve back up by reallocating some of those funds.
Senator Raggio said that at some point Mr. Comeaux and the staff would need to get a handle on the way the court assessments are being recommended in this budget. He noted the increase in the budget and he is curious about what that does regarding the other allocations on the court assessments. Mr. Comeaux said the Hearings Division does have a schedule of the court assessments and how they are proposing those assessments be allocated, and the division will furnish that to LCB staff. Senator Raggio indicated that before someone from the court system complains he would like to know what this is about.
Assemblyman Marvel asked what the total amount of the reserve is right now, and Mr. Nix replied that in their work program for 2001 it is $256,894. Senator Raggio commented that it is showing about $600,000 at the end of the biennium. Mr. Nix said that is a recommendation of the Governor. Mr. Marvel said they are showing $620,000 and $598,000, and Mr. Comeaux said those are the reserves for the two years of the biennium that they are budgeting for.
Assemblywoman Giunchigliani asked why the restitution revenues are decreasing. Mr. Nix responded that they do not collect restitution “per se.” It is collected by the Parole and Probation Division, who then pay those restitutions according to the court order. He said he does not know why the figures are decreasing because those figures are determined by other sources. Ms. Giunchigliani then asked whether Mr. Comeaux could take a look at that because she recalled that the Parole and Probation Division said in their testimony the figures are actually increasing. She said the committee needs to find out who is hitting what fund for what.
Ms. Giunchigliani then asked whether all victims of crime grants come into this budget, or if some of those grants are segregated into different areas, such as domestic violence. Mr. Nix said those are different grants. These grants are specifically for the Victim of Crime Compensation Program, and he noted there are other types of victim service programs in the state.
Assemblyman Marvel asked whether Mr. Nix knew how much the prison industry program is contributing to the Victims of Crime account. Mr. Nix said he could not tell him exactly, but he believes it is somewhere in the range of $230,000. He said they recently received a copy of a correspondence that indicated there is some confusion between ordered victim restitution and funds that are paid through the prisons to the victim of crime program. He indicated they are trying to figure that out, but there are three specific state laws that provide that the Victims of Crime Program has first priority for disbursement of funds from certain accounts from the prisons. He said they are trying to determine what is actually being paid and where those funds come from.
Mr. Comeaux reiterated there is one transfer of an accounting position from this budget to Administrative Services.
Mr. Comeaux said there are some major issues over the coming biennium the department will need to face. One will be the continued implementation of the IFS and the “rollout” to the various agencies. He said the Department of Administration has now rolled IFS out to about a dozen agencies. Their “rollout” schedule calls for the “rollout” to be completed by the end of fiscal year 2002. Mr. Comeaux said that is a very ambitious schedule, and he thinks it more likely that the “rollout” will run into fiscal year 2003 before it is completed, by the end of the next biennium.
The second major issue Mr. Comeaux believes the department will be facing is the new competitive environment for the State Printing Division. The third major issue is the debugging and conversion of the executive budget system to a UNIX environment. The fourth major issue is the continuation of training to the various state agencies in budget preparation, contracting, and purchasing. He said extensive training is needed in those are three areas.
Mr. Comeaux indicated that in The Executive Budget for the Department of Administration, there is only one request for a supplemental appropriation. It is for $295,000 for the IFS. The department had an unbudgeted, unforeseen implementation cost that was related to the adoption of the so-called “GASB 34” statement by the Government Accounting Standards Board. Among other things, he said, it requires states to account for and report balances on fixed assets and that had not been done previously. Additional funds for development for IFS were required to accommodate that. The cost was $500,000 or more. Mr. Comeaux said the department was able to cover a part of that, but he does not believe the department can cover it all. That is why they have the supplemental request of $295,000. He said he believes that part of the system needs to be in place by July 1, and that development is now in progress.
Mr. Comeaux said a one-time appropriation is included in the budget for the additional development that needs to be done on the IFS and for the “rollout” of the system. This is a one-time appropriation from the General Fund to the IFS for $12,303,000 and from the State Highway Fund for $2,664,000. Senator Raggio noted the total is $15,000,000, and Mr. Comeaux confirmed that.
Mr. Comeaux said there is a one-time appropriation to Buildings and Grounds recommended in the budget for $220,400 to fund anticipated expenses in connection with the moves of various agencies in the Grant Sawyer State Office Building. He said this is mainly to accommodate the constitutional officers and the Gaming Control Board’s requirement for additional space. The Department is proposing to move the Division of Environmental Protection and the Division of Water Resources of the Department of Conservation and Natural Resources out of the Sawyer building, and to move the Division of Unclaimed Property office into the Sawyer building. This would provide additional space to the Office of the State Treasurer, the Office of the State Controller, and the Gaming Control Board.
The last one-shot appropriation, Mr. Comeaux said, would be to the State Motor Pool for $2,046,227 to fund the purchase of 102 additional vehicles requested by other state agencies and that would be added to motor pool’s fleet.
Assemblyman Hettrick asked whether there are going to be any costs incurred by the LCB or the Legislature when the executive budget system is converted to UNIX. Mr. Comeaux said he is not aware of that possibility.
Assemblyman Beers noted that there had been some talk in the last session that the state might ignore “GASB 34,” and that there was going to be a revolution of the various states against GASB. He said he gathered from this budget that the state decided not to do that. Mr. Comeaux said he is aware of one or two states that said they are not going to do it because they thought it was a waste of money and did not add value to the reporting process. He confirmed that Nevada did not do that, and the provisions of “GASB 34” are being implemented. Mr. Beers asked whether the $295,000 is anticipated to be the entire cost of implementing “GASB 34.” Mr. Comeaux said it is definitely not. He said it is around $500,000 for the additional development necessary on the IFS to accommodate the accumulating and reporting of information. He said the department is able to absorb all that cost except the $295,000.
The Chairman adjourned the meeting at 4:38 p.m.
RESPECTFULLY SUBMITTED:
Bob Williston
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE:
Assemblyman Morse Arberry Jr, Chairman
DATE: