MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
March 7, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:04 a.m., on Wednesday, March 7, 2001, in Room 2134 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.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator William R. O’Donnell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Michael J. Chapman, Program Analyst
ElizaBeth Root, Committee Secretary
OTHERS PRESENT:
Kari Demetras, Chief Executive Officer, Step 2
Theresa Lemus, R.N., B.S.N., C.A.D.C., Executive Director, Northern Area Substance Abuse Council, Inc.
George Pyne, Executive Officer, Public Employees’ Retirement System
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System
Joyce L. Woodhouse, Chairman, Public Employees’ Retirement Board, Public Employees’ Retirement System
Charles Silvestri, Member, Public Employees’ Retirement Board, Public Employees’ Retirement System
Don Soderberg, Chairman, Public Utilities Commission of Nevada
Crystal Jackson, Commission Secretary, Public Utilities Commission of Nevada
Robert G. Anselmo, Administrator, Taxicab Authority, Department of Business and Industry
Richard Boxer, Administrative Service Officer, Taxicab Authority, Department of Business and Industry
Paul J. Christensen, Chairman, Transportation Services Authority, Department of Business and Industry
Dave Kimball, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry
Stephen A. Shaw, Administrator, Division of Child and Family Services, Department of Human Resources
Jim Baumann, Administrative Services Officer IV, Division of Child and Family Services, Department of Human Resources
Michael Torvinen, CPA, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources
Harold Cook, Ph.D., Clinic Director, Nevada Mental Health Institute, Division of Mental Health and Developmental Services, Department of Human Resources
Robert Harnish, Jr., Administrative Service Officer III, Nevada Mental Health Institute, Division of Mental Health and Developmental Services, Department of Human Resources
Don Hataway, Deputy Director, Budget Division, Department of Administration
Patrick Ward, Deputy Manager, Professional Services, State Public Works Board, Department of Administration
BILL DRAFT REQUEST (BDR) S-967: Makes appropriation to the Washoe County court system. (Later introduced as Senate Bill (S.B.) 296)
SENATOR O’DONNELL MOVED TO INTRODUCE BDR S-967
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS COFFIN AND NEAL WERE ABSENT FOR THE VOTE.)
*****
Chairman Raggio:
This bill will be introduced as a committee bill. We will need to change the back on it. Committee staff, I will give that you.
This morning we have with us Kari Demetras, Chief Executive Officer, Step 2 and Theresa Lemus, R.N., B.S.N., C.A.D.C., Executive Director, Northern Area Substance Abuse Council, Inc. We have a request for a bill draft.
Kari Demetras, Chief Executive Officer, Step 2, and Lead Agency for the Lighthouse of the Sierra Project:
We have handed out a copy of the letter we submitted to Senator Raggio (Exhibit C), along with the amount of funding we have raised to date toward the project for which we are asking your support. We have also submitted a list of the partners who are involved in the project (Exhibit C). This proposal is a partnership between the Northern Area Substance Abuse Council, Inc. (NASAC) and Lighthouse of the Sierra (LOTS) to request $200,000 in a one-time capital funding to support the construction of the Lighthouse campus, and the purchase and renovation of a facility that will allow NASAC to double its capacity.
The partnership is critical in terms of the success of the overall project serving individuals and families who are affected by substance abuse, homelessness, joblessness, and a myriad of other issues including violence and out-of-home placement of their children. NASAC is, because of it’s capacity to provide detoxification services, transitional living, and short term residential treatment services, the ideal portal or gateway for individuals and families that come into the Lighthouse of the Sierra campus. There, they will live for a year and receive integrated, comprehensive services that will help them move toward self‑sufficiency.
Specifically, the request is for a “one-shot” appropriation. You can be assured we will not be coming and asking for recurring appropriations for this project. By definition, capital funding is “one-shot” funding. Also, the list indicates the other funding support we have received for the projects. We intend to use support from the state to leverage additional funding we need to complete the project. Construction for the Lighthouse campus is already underway. The NASAC project should be complete within the year, and so families should be served starting this summer.
Chairman Raggio:
Would you like to tell us about NASAC’s participation in this project?
Theresa Lemus, R.N., B.S.N., C.A.D.C., Executive Director, Northern Area Substance Abuse Council, Inc.:
Currently, NASAC provides the only modified medical detoxification service in the state. We are able to provide primary care to persons who have life-threatening complications resulting from their withdrawal from substances. That is critical in this continuum because it is generally where they start. They go into a residential component we have that allows them to start making decisions about their future, which then segues into the Lighthouse campus where they are put into a more supportive environment for a longer period of time. We still have access to those clients, and provide some services to those clients. But, they are able to have a safe environment for a long period of time. We are providing that motivation at the front end, and the ability for them to make decisions to move toward self‑sufficiency.
Chairman Raggio:
What is the committee’s pleasure? This is a request for a bill draft (BDR) for a one‑time allocation of $200,000. If the committee is agreeable, I will accept a motion to request a BDR for that purpose.
SENATOR O’DONNELL MOVED TO REQUEST THE BDR.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Raggio:
Let me indicate to you the request by the committee for a BDR does not necessarily mean the committee is going to approve the bill. That depends on fiscal constraints and limitations. We will not make decisions on these until much later in the session. We will notify you of a further hearing date.
Are there any other matters to come before the committee before we take up our agenda? We still do not have the amendment back on S.B. 199.
PUBLIC EMPLOYEES RETIREMENT SYSTEM
P.E.R.S. - Budget Page P.E.R.S.-1 (Volume 3)
Budget Account 101-4821
Chairman Raggio:
What is the status of your BDR you referenced the other morning that has all of your proposed enhancements?
George Pyne, Executive Officer, Public Employees’ Retirement System:
We believe we will see a final BDR this morning. We are hoping to have that back to the Legislative Council Bureau (LCB), Legal Division, sometime today. The sooner we can have a committee introduction, the better.
Chairman Raggio:
If it comes to this committee, since we are hearing some matters, we would like to have an early hearing on it so we can keep this agency in focus.
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System:
I did want to bring to the committee’s attention an item in our fiscal year (FY) 2002 request in the base portion. Our operating expenses are at $1,323,877. We are asking that be reduced by $300,000. The $300,000 you see in that particular category had to do with litigation we were successful in. We had anticipated our defense would continue into FY 2002. However, we managed to actually get that case dismissed in December 2000. We advised committee staff of that this morning.
With that reduction in the budget, we will be referring to our expanded program narrative, which has our performance indicators for the Public Employees’ Retirement System (PERS) showing our continued growth in membership, benefit recipients, and payroll. They also show the number of informational programs, counseling sessions, and our average number of responses to written inquiries.
The program narrative also contains our administrative costs, market value of the portfolio, and the funded health of the system in terms of ratio of assets to liabilities. The regular PERS fund currently stands at about 85 percent funded. I will refer to these indicators over the course of my testimony.
Our budget over the next biennium is trending downward because of the anticipated completion of our major technology renovation projects. Our Computer Automated Retirement System of Nevada (CARSON) computer system is virtually complete. We have installed a new financial accounting system, a new local area network, and a new membership system; and we anticipate the installation of the new benefits system within two months. Once benefits are installed we move to our one-year vendor support period.
E-300 Maximize Internet & Technology – Page P.E.R.S-5
Our last major technology effort at this time is contained within the proposed FY 2002 budget at decision unit E-300. That technology funding is requested for $1 million for the completion of our backfile-imaging project. We are in the process of completing stage 2 of this project, which is made up of the imaging of 9 percent of the file room to ensure the methodology we employed is appropriate. Should the Legislature fund our third stage, which is the final 90 percent of the file room, all member files will be electronically stored in the retirement system.
That sets the stage for an increase presence in southern Nevada to address the needs of our members and beneficiaries there. This also supports the request for two new positions in our Las Vegas office in the second year of the coming biennium. Each of these steps is requested in accordance with the system’s strategic plan.
This leads, of course, to a discussion of our personnel requests. But, at this time, I would like to turn the testimony over to our board chairman. She would like to address the committee regarding recent board action on executive staff compensation, including modifications made to the proposed pay schedule for our requested position of Assistant Investment Officer. After that is concluded, I will return to the budget.
Joyce L. Woodhouse, Chairman, Public Employees’ Retirement Board, Public Employees’ Retirement System:
Good morning, Mr. Chairman and members of the committee. I have been on the retirement board since 1985. The board does appreciate the opportunity to address directly with the money committees of the Legislature certain issues related to the compensation of the executive staff, including the pay for the proposed position of Assistant Investment Officer.
I wanted to let you know Earl Greene, Las Vegas member of the PERS Board, will be sending you a letter regarding this, and Steve Cozine, another board member, was unable to travel, but he also endorses the retirement board’s position on executive compensation.
As most on this committee is aware, the retirement board revised the PERS approach to executive pay during the 1997 legislative session. It was the first time the positions of executive officer, operations officer, and investment officer were paid according to a scale, which included five steps in a pay range. This was the first move towards providing the retirement board some flexibility in addressing compensation for our executive staff. Most recently, beginning in July 2000, the board reviewed executive pay and assigned a board subcommittee in January to make a recommendation for changes to be made during this upcoming biennium. Charles Silvestri, member, PERS board, chaired the subcommittee, which made the following recommendations adopted by the full board for modification to executive pay.
First, the board adopted a sixth step in the executive pay range to provide the board with flexibility in assigning the appropriate level of pay. Adding this sixth step creates approximately a 25 percent differential between the lowest pay level and the highest for each of the three currently existing positions. PERS staff submitted to the committees this revision adopted by the retirement board at our February meeting, which allows for payment to the executive officer and the investment officer at the sixth step of the pay range in the upcoming biennium. It is recommended our operations officer be paid at the fourth step in the pay range in FY 2002 and at the fifth step in FY 2003.
The retirement board adopted the subcommittee revisions to the pay scale for the proposed assistant investment officer’s position as well. These modifications were made to make the compensation more competitive for investment professionals, which will aid in our recruitment efforts. On examination of comparable positions in neighboring states, and for pension systems that manage money in a similar fashion to Nevada PERS, we designed a pay scale providing a similar range of compensation. This scale was adjusted from our original request based upon the most recent information provided to us by the Department of Personnel.
In closing, key performance indicators include:
1. Nevada P.E.R.S. is staffed (if additions are approved) 30 percent below the industry average of one staff per 1,000 members.
2. Our $15 million technology project started in 1997 continues on time and on budget overall.
3. Our investment performance places us above the 40th percentile for over 16 years, and a remarkable 16th percentile last year when compared to a nationally recognized plan sponsor database. Our investment risk profile ranks us in the top deciles of that same group.
4. Our staff is responsible for negotiating investment fee savings we estimate annually average approximately $6 million.
The successful administration of PERS is essential to the future of 80,000 active members and 23,000 retirees. Management of this system and the assets of these members and retirees require a committed, capable staff with the knowledge and expertise to make complex, multi-faceted fiduciary decisions affecting us all. Finally, the retirement board is united in its desire and responsibility to maintain a superior staff, and compensate them accordingly, thus ensuring retention and effective recruitment. Our proposal for executive pay accomplishes both these goals in a fiscally responsible manner and we request budget authority to implement the modifications.
Senator Rawson:
I have been here a long time, but I do not know I have ever asked these questions, or heard them addressed. I am wondering what our responsibility is with this. This is exempt from the Budget Act. I assume we still have some budget authority.
Chairman Raggio:
They are not under the Budget Act. They still have to submit their budget for inclusion in The Executive Budget, and the legislature must grant the authority for these kinds of increases. Of course, there is a retirement committee that reviews these matters.
Senator Rawson:
I heard the word “fiduciary responsibility” and I feel that responsibility about a number of the issues we address. I am wondering what is our accountability or responsibility here, and should we be listening and approving or should we be suggesting changes? I do not know if there is an easy answer.
Chairman Raggio:
We have the authority to approve, as well as to the authority not to approve or modify.
Senator Rawson:
One of the things we need to know regarding boards and commissions is whether they feel they are solvent, whether they are following good business practices, and whether it is a sound fund.
Chairman Raggio:
Mr. Pyne, are you going to talk about the soundness of the fund, the actuarial situation, the rates, and so forth, so we know where we are?
Mr. Pyne:
I can certainly do that, Sir.
Senator Rawson:
I would like the assurance we are following actuarial recommendations and not political considerations. Since we do not get into the mechanics of this, someone has to vouch for this.
Chairman Raggio:
We do get into the mechanics of this, Senator Rawson. The legislative retirement committee does have to act on any of these proposals.
Charles Silvestri, Member, Public Employees’ Retirement Board, Public Employees’ Retirement System:
I want to comment briefly on the PERS subcommittee recommendation to the retirement board.
I have been a member of the retirement board for about 18 months. I cannot tell you how impressed I am with this organization. I often remark this is the best-run agency I have seen in the public sector. That is one of the reasons I accepted the assignment to review executive pay and to make a recommendation for modifications.
PERS is charged with significant responsibility and we, as trustees, have significant accountability for the administration of the system. As fiduciaries, we take this job very seriously. Our staff must have the requisite knowledge and experience to perform their duties to all of us.
Because of the highly competitive nature of the investment world, our proposal provides an attractive compensation package for recruitment of the new position of Assistant Investment Officer. It also gives the Retirement Board the ability to recognize the significant contributions our officers make to the financial well being and security of PERS. The addition of the sixth step in our pay ranges helps us do that and I request your support of the budget as modified.
Chairman Raggio:
We would like to ask about these proposed staff salaries. How do they comport with other recommendations in The Executive Budget for unclassified salaries?
Ms. Bilyeu:
The salary steps for unclassified positions were included in the Governor’s budget. They were built into our budget as well. The sixth step the retirement board Chairman spoke of is just an addition to the range of pay. That would also be affected by the 9 percent and the 4 percent that is built into the Governor’s budget.
Chairman Raggio:
For the record, if step six is authorized the Executive Officer would receive $112,000 in the first year of the biennium and $116,000 in the second year; the Investment Officer would receive $102,000 and 106,000; the Operations Officers would receive $102,000 and $106,000; and the proposed Assistant Investment Officer would receive $93,000 and $97,000. Are those base salaries or do they include fringe benefits?
Ms. Bilyeu:
Fringe benefits are in the sixth step. Those are the base salaries. We are budgeting for the operations officer at step four in the first year, and step five in the second year of the biennium.
Chairman Raggio:
At what step do you intend the Assistant Investment Officer would start?
Ms. Bilyeu:
We will be recruiting at step one of the pay scale.
Chairman Raggio:
Tell us again the reason the Assistant Investment Officer is required.
Ms. Bilyeu:
The Assistant Investment Officer position is requested to allow succession training in the investment portion of our business. Currently, we staff this function with an investment officer and an analyst. At this point, we have a portfolio at approximately $13.8 billion. It is scheduled to grow to approximately $19 billion over the next five years. We currently have 24 managers and plan to grow to approximately 30 managers, also over the five years. We are attempting to provide a middle step between the analyst position and the investment officer, so there is someone to step in for investment decisions, diagnostics, etc. when the investment officer is absent. This creates a backup position. That is the purpose of the Assistant Investment Officer. It is a bridge between those two positions. Our staff of two in the investment position is below the normal industry standard for an investment shop of our size. It is less than the staffing level at the university system for their portfolio, which is at $300 million.
Chairman Raggio:
You show on your budget 52 authorized positions. Are they all filled at this time?
Ms. Bilyeu:
Yes. I meant to point that out earlier. That number is actually not correct. We have 51 full time positions. The front page of that actually counts my position as the Operations Officer twice. So, there are only 51 positions. Currently, we are fully staffed.
Chairman Raggio:
Your current number of positions is 51, but you are showing 60 requested positions. Is that an increase of 9 new positions?
Ms. Bilyeu:
It is actually 8 new positions we are requesting. That would only take us to 59 positions.
Chairman Raggio:
Do the 8 positions include the Assistant Investment Officer?
Ms. Bilyeu:
That is correct.
Chairman Raggio:
Are you going to tell us about the other positions you have requested?
M-200 Demographics/Caseload Changes – Page P.E.R.S-2
Ms. Bilyeu:
Yes, I am. Moving to the other requests contained in our budget, currently PERS employs 45 classified employees and 6 unclassified employees. We are seeking the addition of 2 Membership Technicians, two Benefit Counselors, and 1 Assistant Investment Officer. These 5 positions are requested for the first year of the biennium. The remaining positions are being requested for the second year of the biennium.
Two of those positions are Benefit Counselor positions for Las Vegas. The reason we ask for those in the second year of the biennium is to complete the imaging project we have requested so we can have all of our member files online, and our southern office has full access to member files.
Chairman Raggio:
How many are staffing the southern office now?
Ms. Bilyeu:
Currently we have two counselors in that office. So we would be doubling the size.
Chairman Raggio:
When was that office opened?
Ms. Bilyeu:
It originally opened in 1990 or 1991. Last fiscal year we were down one position in southern Nevada for a long time because one of our counselors retired. Because of the recruitment process we went through in filling that vacancy, it took quite a long time to hire the second staff person. The focus on southern Nevada in the second year of the biennium is premised on the electronic file storage, and whether we are allowed to implement it in this current budget. Approximately 60 percent of our membership is in southern Nevada, but we only have two counselors there. As soon as we filled the second position, she was fully booked for appointments on the half hour. If we add these two new positions in the second year of the biennium, staff should be busy. It is just a capacity issue. Because of the many people we have in southern Nevada, the counseling sessions will go on.
The Membership Technician positions are requested at the Grade 28 level, and will assist with our employer reporting. This new computer system tremendously advances the amount of detail we can receive from employers. That adds up to approximately 130,000 entries a month for our membership technicians to evaluate. These two new positions will help us in this process. They will help us with employer liaison officer and payroll clerk training and, overall, will give us better service for our employers and our membership.
The same issue holds true for the counselors requested for the northern office. Our benefits division received 53,842 telephone calls from July 1999 through August 2000. Those telephone calls can turn into counseling sessions, as well. Quite frankly, when I speak to staff in the benefits division, it is always about how we are doing with our phone calls, our counseling, and keeping up on the benefit calculations. Those two new positions in that division are being requested to assist in those areas.
Chairman Raggio:
They are not listed as “counselors.” Are those the Retirement Examiners in decision unit M-200?
Ms. Bilyeu:
Yes. All four of those positions which we would call “production positions” are in the M-200 decision unit. The only enhancement in the first year of the biennium is the Assistant Investment Officer position.
Chairman Raggio:
In the event the Legislature does not authorize the proposed judicial retirement system, will you still need all these positions?
Ms. Bilyeu:
Quite frankly, yes. Absorbing of the judicial retirement system, should it occur during this legislative session, can be done within our current staffing. There are only approximately 60 judges at this time. Because there are only 60 judges, the actual counseling load will not increase that much. It is just a matter of making sure we keep all the systems separate. It is an education issue for my counselors more than anything else.
E-226 Reward More Efficient Operation – Page P.E.R.S-4
Chairman Raggio:
You would not need decision unit E-226, which would provide the computer system change to accommodate the Judge’s retirement system, correct?
Ms. Bilyeu:
That is correct.
E-275 Working Environment & Wage – Page P.E.R.S-4
Ms. Bilyeu:
Those are the 8 positions we have requested. We have the 5 in the first year, and then 3 in second. The one I have not spoken of is the Information Systems Specialist. That is basically to bring our web administration in-house. We currently outsource this function. Our website is becoming a more interactive presence on the web, at which people come in and do benefit calculations and things like that. We want to be able to have the administration of the website in-house, and that is what the position is designed for. Again, it is in the second year of the biennium because we want to make sure to get through our technology projects. We want to complete the core technology projects first, and then bring those enhancements on board in the second year of the biennium.
Chairman Raggio:
How many active members does PERS have now?
Ms. Bilyeu:
Active membership is about 80,000. We have about 23,000 retirees and survivors.
Chairman Raggio:
Is that within your projections?
Ms. Bilyeu:
It is in keeping with what we expected the growth rates to be, especially on the membership and benefit side. We have growth rates that far outstrip most of those around the country. I think that is tied to the growth of the state.
I did want to make one comment before I leave the personnel section regarding our overtime request because it is fairly significant. That module is contained within our base budget. It is a little over $150,000.
Chairman Raggio:
Who is eligible for overtime?
Ms. Bilyeu:
Classified employees are eligible for overtime, as are managers of the divisions. The unclassified staff do not receive overtime. I just wanted to briefly comment along this line. We have had significant overtime, which is tied to these technology projects. We made a decision not to reduce the base number based simply on a trend we see. There is a portion in the Governor’s budget, which breaks those figures out. I just wanted to make the remark because I wanted you to know we had made a decision not to reduce that figure. Normally, we would reduce it down to what we think would happen in this session. However, this year we made the decision to keep it there because we do not think our caseload will be normalized through this next biennium. We think that one biennium out it will.
Chairman Raggio:
Is the budget otherwise based on the same cost of living adjustment (COLA) suggested by the Governor?
Ms. Bilyeu:
Yes. Those were built into our budget by the executive agencies.
E-350 Service At Level Closest to People – Page PERS-5
Ms. Bilyeu:
I would like to turn to out-of-state travel. Out of state travel consists of one trip for each of our seven board members and three of our five police and fire committee members. It also contains staff travel.
Chairman Raggio:
How often does the board meet?
Ms. Bilyeu:
The board meets by statute on a monthly basis. Our conferences are education and management conferences that are association driven. The usual practice is to send them to one conference a year.
We had to add three trips back into our base budget because three of our board members were unable to travel during the base year. That is why you see the adjustment in the travel category. The conferences are invaluable to our board members so they can upgrade their knowledge and experience related to the administration of the plan and their fiduciary obligations.
Chairman Raggio:
I do not think we have any more questions in this area. Are there any questions from the committee?
Mr. Pyne:
Chairman Raggio and Senator Rawson, responding to a previous inquiry, I would like to confirm that the funded health and operation of the plan is very sound.
Chairman Raggio:
Tell us a little about your rate program.
Mr. Pyne:
First, I would like to provide you with a handout entitled, “Employer Pay Contribution Plan.” (Exhibit D.) I would like to comment on the funded ratio of the system. If you do have time, I would be more than happy to talk to you about the rate situation, and even how our proposed legislation fits into those contribution rates.
With respect to the funded health of the system, back in 1984 this Legislature and the board embarked on a program to pay off the unfunded liability of the plan over a 40-year period. At that time the funded health of the plan was approximately 65 percent, which is the ratio of assets to liabilities. The fact we are approximately 85 percent funded demonstrates the continual improvement in the funded health of the plan. In simple terms that means we have about 85 cents on hand for each dollar in liabilities. Again, that has been steadily improving since 1984. Also, during that time we have been able to provide some very generous enhancements to our plan, and still maintain that funding progress. We expect to be funded at about 87 percent by FY 2003.
With respect to the contribution rate structure, Mr. Chairman, let me say we are very excited about our proposed legislation for FY 2001. We feel it is a comprehensive package of enhanced plan design amendments that will ensure the long-term viability of the system. It maintains our uniform benefit structure and enhances benefit preservation for virtually all members of our system. The fiscally moderate nature of this legislation means all of this can be accomplished without raising contribution rates on July 1.
The story I am about to tell is the same as that reflected on page 2 (Exhibit D). Eighty percent of our members contribute under this employer pay contribution plan. The existing contribution rate paid into the plan right now for regular members is 18.75 percent. The contribution for police and fire members is 28.5 percent. According to our statute, we look at the results of the actuarial valuation taking place in each even numbered year. In July 30, 2000, we look at the actuarial valuation and that helps determine whether contribution rates will have to change July 1, 2001. You can see the actuarially-determined rates, under the employer-paid contribution plan for regular members coming in June 30 at 18.29 percent, is under the statutory rate of 18.75 percent. You can also see under the police and fire plan, the actuarial rate is 27.14 percent, which is under the statutory rate of 28.5 percent.
According to statute, the only time rates change is when the actuarially-determined rate is different from the statutory rate by one-half percent or more. So, if we look at the regular member rate at 18.29 percent, there is less than one-half percent differential. If we did not pass any legislation having a fiscal impact this session, the rate would stay at 18.75 percent.
On the other hand, for police and fire members, you can see there is a substantial gain. The rate actually goes down to 27.14 percent. By statute, that would round off to 27.25 percent. If we pass no fiscal legislation this session, the rate would go down to 27.25 percent. We asked the Governor to allow us to leave the existing rates where they are. That is what he has done with the budget. Those rates are there, and we have advised the Governor we had a moving target at the time. Essentially, the word came back to us they would defer to the board with respect to the enhancements the board wanted to propose, which would not trigger an increase in the contribution rates. Obviously this is subject to the approval by this Legislature.
Our policy recommendations are not listed with respect to plan design changes. You can see, for example, if we take regular members first, we have three vesting, and an actuarial is estimated the cost impact to be .05 percent of payroll. There are about 3,000 to 5,000 people who would be impacted by this window. Pre‑retirement death benefits are .3 percent for regular members and .4 percent for police and fire members. We do have pre-retirement death benefits for married members of our plan. You can take me as an example. If I have over twenty years of service and died today, my wife will receive a benefit under option 2 for the remainder of her lifetime. This is the best protection possible to a beneficiary. The fact is about one-third of our members, or 25,000 people, are single.
A lot of retirees have 20 to 25 years of service in the system. Many of them are divorced or were never married. Their children may be of maturity. Even though they have made a significant contribution to the pension plan, if a single person dies prior to retirement, there is no payment from the system. So, we think, because of the fact they have a significant investment in this plan, that it is a matter of equity between married members and single members we should provide this benefit. So, that is the estimated percentage of payroll costs associated with that.
The amount of payroll costs involved with deferred vesting is .2 percent. We have about 5,000 to 6,000 people who would be impacted by this particular benefit enhancement. These are people who are no longer employed by the system, but are vested in the plan. For example, we might have had a person employed in the system that started working at age 40 with 10 years of service. Assuming there was a $3,000 monthly average wage at the time this person terminated the job, the current plan benefit at age 60 would be $750 monthly. By indexing this benefit to hedge against inflation at just 1 percent a year, that same individual could receive $915 monthly benefit at age 60.
We have the use of this money over that period of time. These people are members of the system, and for whatever personal circumstance, they have put in some vested service in our system, but they are no longer active members. Quite frankly, one of the criticisms of our defined benefit plans are we do not do enough for these frozen benefits. We are trying to establish a new benefit direction here with this particular plan design change.
Next is a 2.6 percent multiplier for future service. As you are aware, members of our system receive a retirement benefit based on their number of years of service times a fixed 2.5 percent for each year times their average wage. So, if someone puts in 20 years of service in the system, they receive 2.5 percent of their average wage for each year of service. If we take 20 years of service times 2.5 percent that is a 50 percent benefit after 20 years. The average member of our system retires with about 20 years of service. This would provide for 2.6 percent of their average wage for all future service beginning July 1, 2001. This would not go back and touch past service, but future service only. For the most part, it means 20 years down the road someone would get 52 percent of their benefit after 20 years of service versus 50 percent. This covers all members of the system but only for future service.
Finally, Mr. Chairman, we are recommending 25-year retirement at any age for police and fire members. The total contribution rate, with all these plan design enhancements, is 19.14 percent for regular members. Even though it is over the existing statutory rate, it is still within the .5 percent differential I talked about earlier. For police and fire members you can see the 28.79 percent is within the .5 percent differential.
Chairman Raggio:
What is the status of your investment fund at this time?
Mr. Pyne:
We are at about 13.8 billion as of January 31, 2001.
Chairman Raggio:
How many investment managers do you have?
Mr. Pyne:
We have about 25 managers who compose a broad, diverse group.
Chairman Raggio:
Do you have information for the committee as to what your yield has been?
Mr. Pyne:
The FY 2000 return, measured in terms of fiscal years through June 30, 2000, was at 7.4 percent for the PERS fund.
Senator Neal:
I noticed there is a decrease in the administrative fee revenue in you budget. What caused this decrease?
Ms. Bilyeu:
Our budget is funded through a fee assessment against the portfolio. The primary reason for the decrease in the administrative fee is that our technology projects were “rolling off.” That is what boosted the administrative fee up a bit. Since we are rolling through that funding cycle now, it is dropping back down again. The administrative fee is calculated to fund exactly what the budget would be.
Senator Neal:
Do you anticipate it decreasing more?
Ms. Bilyeu:
From a budgetary perspective, we plan on a two-year basis. Strategically, we plan on a five-year basis. So, we would look to the next biennium to see where our funding needs to be. I do not anticipate major technology renovation projects in the biennium beyond FY 2002 and FY 2003. So, I do not see that ticking back upward from that perspective.
Senator Neal:
Mr. Chairman, are we suppose to deal with the Legislators’ Retirement Fund?
Chairman Raggio:
Yes. What is the status of the Legislators’ Retirement Fund?
Mr. Pyne:
At the commencement of the legislative session, we had provided the Legislative Council Bureau (LCB) with a report on the financial condition of the Legislators’ Retirement Fund. The annual contribution into the fund is about $176,000, which is not much of an increase over previous years. As you know, this is because of some litigation. We had thought the annual contribution by the state of Nevada as employer might increase significantly because of lawsuits. The fact is this was offset by some deaths which released a lot of liability. Therefore, the contribution rate did not increase significantly.
Senator Neal:
May I inquire as to the nature of the lawsuits?
Mr. Pyne:
That goes back to the 1989 year of the Legislation for 300 percent increases. The bottom line is there are three individuals who the Nevada Supreme Court decided were entitled to the increase. We are now paying those benefits, both retroactively and prospectively.
Senator Neal:
So, there are three legislators out there who are getting full benefits based on the 300 percent increase passed in a prior session?
Mr. Pyne:
That is correct. There are three retirees getting those benefits.
Chairman Raggio:
Is there anything else to present on the budget at this time?
Mr. Pyne:
No, Mr. Chairman.
Chairman Raggio:
We will go into these benefits when we hear the bill.
Senator Jacobsen:
Thank you, Mr. Chairman. I noticed you are requesting to acquire some modular furniture. Do you ever buy prison furniture?
Ms. Bilyeu:
As a matter of fact, Senator Jacobsen, we do buy prison furniture. Most of the furniture for the executive staff area was purchased through Silver State Industries.
Chairman Raggio:
Is there anyone else who wishes to be heard on the PERS budget? If not, we will close the hearing on PERS and take up the budget account for the Public Utilities Commission.
PUBLIC UTILITIES COMMISSION
Public Utilities Commission - Budget Page PUC -1 (Volume 2)
Budget Account 224-3920
Don Soderberg, Chairman, Public Utilities Commission of Nevada:
Good morning Senator Raggio and members of the committee. Ms. Jackson has a short presentation and then I will be available to answer any questions.
Crystal Jackson, Commission Secretary, Public Utilities Commission of Nevada
The commission’s biennium budget request was developed following the recommendations of the Governor’s Steering Committee to Conduct a Fundamental Review of State Government (fundamental review). This included evaluating the existing organizational structure of the Public Utilities Commission (PUC), fiscal resources, technological advances, and more efficient use of staff. The outcome of the fundamental review resulted in the PUC, at a scheduled agenda meeting on August 3, 2000, adopting a plan to modify the organizational structure of the commission, for both policy and regulatory operations.
The organizational structure adopted was designed to establish a clear focal point for leadership for staff, to enhance communication with stakeholders, and, within the PUC, to enhance staff performance, and streamline the organizational structure to meet the demands of the dynamic and ever-changing utility industry. The commission’s primary budget account is funded through a regulatory assessment levied against public utilities in this state. The commission’s budget request is built around the regulatory assessment currently set at 2.5 mills for both years of the biennium. This reduces the regulatory assessment collections by about 18 percent over the FY 1999-2001 biennium budget.
The commission will vote in May 2001 to set the assessment for FY 2002. As to the reserve level, the commission has been gradually reducing the balance forward by decreasing its mill assessment to utilities. (By statute, a mill assessment is given to the PUC in a range up to 3.5 mills. The mill assessment is based on the revenue of each utility.) Should revenues be higher than projected, the commission will further adjust the mill assessment rate accordingly. At this time, the commission’s balance forward to FY 2002 is projected at approximately $1.3 million. If the Governor’s recommended budget for the PUC is approved, the FY 2003 ending balance is projected to be $1.1 million, which is at or about the standard and prudent reserve level for an agency of our size.
M-200 Demographics/Caseload Changes – Page PUC-3
In our biennium budget, we are asking to eliminate 6 vacant positions. We are asking for salary adjustments for internal equity for six positions.
Chairman Raggio:
You presently have 86 positions authorized in your budget, correct?
Ms. Jackson:
That is correct, Mr. Chairman.
Chairman Raggio:
You are asking to eliminate how many?
Ms. Jackson:
We are asking to eliminate 6 vacant positions, which would bring us to 80 positions.
Senator Coffin:
On September 12, 2000, Ms. Jackson came to us with a fait accompli having already reduced the staff by a certain number, even though they had the law on their side based on 1997 legislation. They reduced it quite a bit then. Why did you not just go ahead and reduce it more now, without our approval.
Mr. Soderberg:
What was brought before you in September was our reorganization. By statute, we needed to present that to you at Interim Finance Committee (IFC). What you have now is a “going forward budget” for the next biennium, which reflects what was done last spring and summer through IFC. This is not an additional reorganization. This is the permanent reflection of the steps we took last summer.
Senator Coffin:
So, you are not reducing positions any more.
Mr. Soderberg:
No, this is pretty much what you saw then regarding personnel.
E-300 Fringe Benefit Change – Page PUC-4
E-301 Adds Step 9 and 4% COLO – Page PUC-4
E-710 Replacement Equipment – Page PUC-6
E-720 New Equipment – Page PUC-6
Ms. Jackson:
Under operating expenses, we are asking to design and publish new and additional agency brochures pursuant to Nevada Revised Statutes (NRS) 703.300. These had not been developed during the base year. We are also asking for new and replacement computer hardware and software to upgrade and standardize hardware and software applications. As part of our equipment request, we are asking to replace our video Kodak equipment, which is our video conferencing equipment, because the company no longer provides on-site maintenance or factory support.
Chairman Raggio:
That has become obsolete?
Ms. Jackson:
That is correct. We are asking to replace one vehicle for our gas pipeline safety program. The replacement of one facsimile machine, 16 office chairs, as well as 10 business telephones. That concludes my overview.
Chairman Raggio:
On your reorganization plan, you are changing the title of 12 unclassified positions. Would you like to comment on this? What is the need or purpose of those title changes?
Mr. Soderberg:
Senator, it is actually 13 position title changes. Over time when this agency was the Public Service Commission, there tended to be incremental reorganization. Over time, for whatever reason, it was decided by the management of the agency to not change positions to reflect what they are doing, but move that person over. When we took a bird’s eye view of what we were doing, we realized no manager had a title reflecting what that person actually did. We figured since we are reorganizing, it is a good time to clean things up. For example, the “Manager of Rates and Tariffs” is a function not now existing, and the incumbent was running the Consumer Complaint Division.
Chairman Raggio:
And the Electric Engineer is now a Senior Policy Advisor? These are all unclassified positions and we are going to need that list when we deal with the unclassified pay bill on these matters. Following up a little on what we talked about, you are deleting those 6 positions as we authorized or discussed the reorganization. Will you now have the 80 the budget makes provision for?
Mr. Soderberg:
Yes.
Chairman Raggio:
Is that going to be an adequate staff? We are not going to get in this committee all of the discussion you have had in the other committee meetings, but whatever flows out of this, can you represent to the committee the staff now accommodated in this budget will be sufficient to deal with future regulation authority?
Mr. Soderberg:
Senator, it is always hard to predict what bills will get passed and signed by the Governor. From the things we have seen on the horizon, we believe 80 positions will be sized right for what our task will be. There has been discussion of additional duties, as well as some duties going away. So we think we are sized right. The only caveat I have with these 80 positions is, at some point our Consumer Complaint Division might be stressed because of population growth, but we will deal with that at that time. Currently, I think 80 positions is sized right. We did that in anticipation of what our roles are now and how we predict our role change.
Chairman Raggio:
You mentioned some vacant positions. According to our report of February 11, there were three vacant positions: Water Engineer, Safety Specialist, and a Senior Policy Advisor. Staff has just indicated to me two of those positions have been filled and one remains vacant. Is that a correct update?
Mr. Soderberg:
The water engineer position has been filled. We have a person in the Telecom Policy Advisor position who may be promoted into the senior spot, and we have an offer out to another policy advisor. That would put us at full staff.
Chairman Raggio:
Do you have any other positions that could be eliminated or need to be eliminated?
Mr. Soderberg:
I do not believe so. We have one vacant Railway Inspector we need to conduct that program. We expect to fill this vacancy immediately.
Chairman Raggio:
The utility rate increases, which authorized adjustments on a monthly basis for utility costs will result in increased revenues through the mill rate. Is that correct?
Mr. Soderberg:
Yes. We set the mill rate. We adjust the mill rate every year. As Ms. Jackson said, we had a surplus, which had been allowed to increase by the prior management of the agency. We worked with the budget office and LCB to work this figure downward. We have a target. If we come in above our target, I will recommend to the commission in June to lower the mill assessment further.
Chairman Raggio:
So, you do keep an eye on the mill rate.
Mr. Soderberg:
Yes. That is why we assess annually and not biennially.
Chairman Raggio:
Companies have objected to the commercial mobile radio service situation, saying they do not come within the jurisdiction. According to your report, there was an amount owed by those companies and they are contesting that debt. What is the status of this situation? They are disputing the assessment, as we understand it.
Mr. Soderberg:
Yes. That issue is being looked at on two fronts. After approval of our LCB audit, which directed us to enforce the existing mill assessment statute, we have filed collection actions in court against all delinquent providers. We have five that have now paid. One of the major companies did that before we filed. They have lived up to their responsibility. We have been attempting, with industry, to amend the statute to create a lesser burden on those companies because of federal preemptions. I do not have a status report on that, but we are trying to work with the companies on that. Typically, when industries have a number of players, it is very tough to get them all involved. We have to get the Consumer’s Advocate office of the Office of the Attorney General involved because there is some funding there. So, we have to do it on two tracks. We have to try to be reasonable on the legislation, but we have an obligation to fully enforce the statute as it is written now and we will do that.
Senator Neal:
According to your program description, your budget is geared toward carrying out your program description and also meeting your statutory authority?
Mr. Soderberg:
Yes, Sir.
Senator Neal:
Could you tell me about some of the rate increases made without public hearing?
Mr. Soderberg:
Senator, the statutes governing the management of rate applications give us two methods by which to look at these items. Both of them require full evidentiary hearings. The principle statute of any tariff filing dictates that any tariff presented to us goes into effect automatically within 30 days unless we affirmatively suspend it. We can suspend it up to another 150 days. Traditionally, unless there is some external situation guiding us, we would suspend it and go through a full evidentiary hearing before we make a decision. In some situations, we have felt it has been in the public interest to allow the rates to go into effect in 30 days, pending further review. Those are typically matters where we have what we believe to be a financial crisis with the utility.
You are referring to the action taken a few weeks ago. We feel very strongly, through independent verification, we did not take anything the utility told us for granted. We dispatched people to actually look outside the state to tell us what the financial situation was. We believed that we did not let the rate go into effect before we could process the entire case, the utility’s ability to purchase fuel for its own plants and the ability to buy wholesale power would be impaired. We balanced that against the impact to consumers, of which I am one and you are one, and we do not like that, but we do understand the timing of this came during the lowest usage months of the year. I know my power bill, even with this rate increase, will be lower in March, than it was in February. So, the impact on consumers will be lessened because of the time of the year we did this. We will hopefully be able to process this case and get the myriad of parties involved in it to act in a constructive manner to get us to what the numbers should be. Then we will adjust those rates before summer.
Senator Neal:
You guarantee the rates are going to be lower in March than they are now?
Mr. Soderberg:
I cannot guarantee, because of usage. I know mine will be lower. Mine has been every year I have lived in this state.
Senator Jacobsen:
I am pleased you mentioned the LCB audit, which is one of our rulers for judging your performance. I was very surprised to see there were $800,000 in assessments not collected. We are concerned about this, and three of us serve on an Interim Audit subcommittee. We will ask you to join with us in the next week or so, and explain to us what is transpiring, which is something you somewhat covered. Thank you.
Senator Coffin:
Mr. Soderberg, I want to follow up on what happened in September, because it is now relevant. It was relevant in September because you knew then there was going to be difficulty with rates because of the global settlement you approved. In that shift of people you accomplished, you essentially reduced the staff of your consumer complaint division. You moved some of them to other locations.
Mr. Soderberg:
Senator, that is incorrect and I testified in September. We have actually increased the consumer complaint division by one individual.
Senator Coffin:
I saw from our minutes of your testimony indicating you felt you were six positions too high. I noted it because Synergy Technology Inc. had recommended you elevate the consumer complaint division to the same level as your audit division. Your plan at the time merged it with public affairs and consumer education.
Mr. Soderberg:
Senator, your minutes are inaccurate.
Senator Coffin:
Our highlights on that day showed you were reducing the number of positions.
Mr. Soderberg:
Right, and I remember Assemblywoman Christina R. Giunchigliani brought that up. That was not in our materials. I do not know whether the materials were misinterpreted, or it was the opinion of someone who had worked with our agency before. We have increased the consumer complaint division, and within the next two years, we may need to increase that growth. We have a footnote in our reorganization we will look at in a year merging what is known as the consumer education program, which was something coming to us from the 1997 session when we thought we would have to tell consumers to leave their utility and find a competitive option. That program is essentially is “PIO” department. We have one individual in Las Vegas who handles overflow of consumer complaints because he pitches in and helps out. So, we will look at taking the consumer education function and adding that to the consumer complaint division. We have not reduced the size of this division, and since I have been the chairman of the PUC we have increased it by one.
Senator Coffin:
We can get entangled with communications regarding names of divisions, but its title might not do the same thing as consumer outreach. Now, the secretary who transcribed our minutes from that meeting said:
In response to Ms. Giunchigliani, Mr. Soderberg indicated there were two positions in the consumer outreach program pursuant to the 1997 reorganization there was a feeling the education program, with regard to electrical restructuring, was needed. However, Mr. Soderberg said, because electrical restructuring had been delayed, it was Mr. Soderberg’s opinion the PUC did not need three people in the consumer outreach program. Thus, one position was located in Las Vegas and one position was located in Carson City.
So, are we talking about two different kinds of consumer outreach here?
Mr. Soderberg:
Yes, we are. Traditionally, the agency has had a consumer complaint department. When you have a problem with your bill or your service and you do not feel you are getting a straight answer from the utility, you call us. There has been a department there since the beginning of time, dealing with those complaints. In 1997 it was decided we should also have an advertising campaign to educate consumers about us — advertising to generically talk about electric competition so when it happened, there would be some level of education. That has not been very successful in other states going to open competition. Since opening of competitive markets has been delayed, it has been a program waiting for something to do, and we have utilized those resources in other functions.
Senator Coffin:
Based on the rate increases you have approved, by next summer the increase is going to add up to approximately 30 percent. Knowing that would you not think consumer outreach is something you want to consider spending some of this reserve money on, while we are in this budget cycle. Let us look ahead for a minute.
Mr. Soderberg:
We have looked ahead, Senator. The problem we have is the way the statute was written, which capped it at $500,000. In the last session, the management of the agency asked for additional funds. Then we were told we could not spend those funds because the actual statute authorizing the program caps it at $500,000, which was what was allocated in the 1997 session. We have worked with the budget office and the budget office will bring forward a bill to cure this deficiency. We also have language in that bill which is fairly restrictive. We plan to spend the remainder of the money to promote conservation, and we are working with the Nevada State Energy Office on that now. This is the best thing we can do for customers at the moment because we do not believe we would be able to open up the competitive markets any time soon. With this situation, we would be better off re-igniting public awareness of conservation measures, now that prices are high.
Senator Coffin:
So, you say there is a bill coming that will do this. I think that is probably part of the Governor’s energy program.
Mr. Soderberg:
Yes, and this will be coming from the budget office because it is a budget cleanup item. I do not think anybody intended, when the statute was written, to spend $500,000 in consumer education. I do not think anybody at the time thought it was a cap. The agency did not think it was a cap. We actually asked for more money in there, and then realized we could not spend it. For us to be able to shift reserve money into this program to promote conservation, we need that statute cleaned up, because under statutory construction, an actual, specific law will always trump moving money around in the budget. So, you are right. There is money there we could be putting to better use, and we are trying to do that now.
Senator Coffin:
So, a better use is consumer outreach.
Mr. Soderberg:
I would say a better focus for consumer outreach is to work with the energy office to promote conservation, rather than to continually tell consumers competition is coming. We do not have any details yet, but competition is coming. A lot of money was spent on the old message, and I am glad we put the brakes on that, because now we do have some resources to communicate what is a more responsible message at the moment.
Senator Coffin:
You say the statute does prohibit you from talking about anything other than deregulation coming?
Mr. Soderberg:
That is a matter of debate. The way the statue is written, we were to educate consumers on electric competition.
Senator Coffin:
I think we better not wait for a bill. Mr. Chairman, I do not know where the bill is in the process, but I hate to think we should wait until May to pass legislation effective at some future time when it is already in the middle of the summer.
Mr. Soderberg:
We are working on that now, Senator. The money we have left, approximately $160,000 of the original $500,000, we have earmarked for the campaign we are currently working on with the energy office and the Division of Emergency Management.
Senator Coffin:
Are you contracting out that advertising campaign?
Mr. Soderberg:
At the moment, we are not.
Senator Coffin:
Are you going to?
Mr. Soderberg:
If we need to have advertising services, we are planning on more of a public service announcement at the moment. The program has not been completely worked out.
Senator Neal:
You are charged with ensuring reliability of services to the public, are you not?
Mr. Soderberg:
Yes, we are.
Senator Neal:
Could you inform us how that is being done now since we put you into this competitive market thing, and got this fluxuation going? We do not know exactly where we are going to go on that. How are you fulfilling this charge under the statute?
Mr. Soderberg:
The statutes initially put forward electric competition, giving us a fork in the road. Traditionally, we had what was known as the resource planning process, which was focused on the reliability of the system at the least cost to the consumer. We still have that process, so we continue to process this on an annual basis with our utilities to make sure they are building what needs to be built, with a focus on the least cost way to ensure reliability.
Secondly, the statutes that guide how we handle rate cases have us balance the interest of consumers with the interest of the financial viability of the company. That is always a fine line, especially when wholesale prices are going up. If we go to a competitive market, the way the statutes read now, the agency would take over the actual forecasting. The utility will do resource planning because they are a monopoly and other involved parties would critique this planning. At some point after the critiquing process, the Consumer’s Advocate, our staff, and various user groups, would come out with a plan that would lay out what the utility is supposed to build and how they are to finance that. If the markets are open, it is envisioned the agency would take over forecasting, and we have had concerns this is not the best way to go about that.
There has been a lot of discussion, even if we do not open the markets to competition, the old way of doing resource planning might have been short-sighted because it always focused on the least cost and did not look to the future. Clearly, those statutes and regulations were not written with an eye to the fact we might have 10 merchant plants in southern Nevada within the next five years. So, I think we need to look a little broader, instead of looking at the actual pennies; we need to find a way to take resource planning a bird’s eye view. For example, you have been a critic not only of the divestiture of plants, but you have also pointed out utilities do not have enough plants. Clearly, the decision to have the utilities not build more power plants and instead built more transition facilities was based on the belief this would be the lowest-cost way to deliver power, as well as the most reliable. Had we not been so focused on the lowest-cost way to do it, maybe we would have had them build more plants in the mid-1990s and rely less on transmission. We might have forced them to build some transmission projects, not necessarily for their benefit, but for the benefit of merchants.
Chairman Raggio:
I am going to have to cut this off at this point. While this may be of great interest, it is not within the jurisdiction of this committee. I am going to go on because we have a number of matters on our agenda. Is there anyone else who wishes to speak on the budget of the PUC? If not, we thank you for your presentation.
Let us go to the Taxicab Authority budget account.
DEPARTMENT OF BUSINESS AND INDUSTRY
B&I Taxicab Authority - Budget Page B&I-161 (Volume 2)
Budget Account 245-4130
Robert G. Anselmo, Administrator, Taxicab Authority, Department of Business and Industry:
The Taxicab Authority (TA) is charged with the responsibility of regulating the taxicab industry in counties whose population is 400,000 or more. The TA is governed by a board of five members appointed by the Governor. The board conducts hearings and makes final decision regarding the administration and enforcement of NRS 706.881 through NRS 706.885, inclusive.
The mission of the authority is to protect and provide for the taxicab user through the regulation of the taxicab industry in Clark County, including the following: issuance and transfer of certificates of public convenience and necessity to the taxicabs companies; determining a number of taxicabs authorized per certificated company; issuance, expense and revocation of drivers’ permits; determination of the safety and mechanical operation and comfort standards of taxicabs; determining the fares to be charged; and conducting criminal investigation in conjunction with other law enforcement agencies.
Before you is our proposed budget for the next biennium regarding the issues related to taxicabs in Clark County only. Your budget package includes our performance indicators. I would like to address that we did not anticipate the tremendous increase in taxicab usage over the last year. We projected about 17,500,000 trips, but actually did 21,087,993 trips. The transportation industry as far as taxicabs are concerned in Clark County is alive and well. We welcome your questions.
Senator O’Donnell:
I wanted to make a comment regarding the taxicab versus the limousine (limo) proliferation. You said the number of taxicab trips was up. Was there any damage done to the taxicab industry because of the limo industry increasing their allocations whereas the taxicabs are limited by allocation by the state?
Mr. Anselmo:
I would say “no” as to the actual damage, Senator. Limos had some impact on taxicab service in Clark County. We did have a situation, which arose 2 to 3 months ago in which there was concern limos were stealing taxi rides. That particular problem was addressed by the Transportation Services Authority. To the best of our knowledge, this particular problem has been eliminated. One of the concerns is, in many instances today, it is less expensive to take a limo or town car under certain circumstances than a taxi, because of the distance. For example, from Caesars Palace to the golf course in Summerlin, it would actually be less expensive to take a town car because some of the town cars are licensed at a half-hour rate.
Chairman Raggio:
Historically, you have based your percentage of change in trip charge revenue in the budget on the percentage of change in the number of trips. In constructing the budget the trip charge is 15 cents per taxicab fare, is it not?
Mr. Anselmo:
That is correct, Mr. Chairman.
Chairman Raggio:
In the budget you indicated for FY 2000 the 21 million trips represent a change of 13.2 percent.
Mr. Anselmo:
That is correct, Mr. Chairman
Chairman Raggio:
However, the trip charge revenue in the budget is only a 10.3 percent increase. For the projected years of FY 2002 and FY 2003 you show projected number of trips increasing by 4.8 percent and 4.5 percent, respectively. However, the trip charge revenue does not increase. We think this represents an understatement of potential revenues, which becomes a problem. In the budget your ending reserve would be down to a little more than $2,000. If we calculate the trip charge revenues based upon these projected number of trips there would be additional revenue in excess of $200,000 and $360,000 for the two years of the coming biennium. Can you explain that to us?
Richard Boxer, Administrative Service Officer, Taxicab Authority, Department of Business and Industry:
The budget office held us to a base.
Chairman Raggio:
The trip charge on page 162 indicates you have a little over $3 million. That is the same as the actual for FY 2000, but your projected number of trips is more than what that is based on. That is what I am asking about.
Mr. Boxer:
That is correct. Our budget request was based on 22 million trips in FY 2002 and 23 million in FY 2003. We supplied the numbers along with that. The budget office is the one who held us to this base on that item.
Chairman Raggio:
So, you would not contest an adjustment in the budget reflecting increased revenue for trip charges based on the increase number of trips?
Mr. Boxer:
Absolutely not. In FY 2001 we will be at 22 million trips, which is $3.3 million in revenue.
Chairman Raggio:
That will also bring your reserve up.
Mr. Boxer:
It will bring the reserve to over $700,000.
Chairman Raggio:
So, that is just an accounting situation. You are asking for 8 new classified positions?
Mr. Anselmo:
Yes, Mr. Chairman, we are asking for 8 positions because of the increase in the number of taxicab rides.
Chairman Raggio:
That is paid out of reserves, so that is important if we are going to talk about 8 new positions. Why do you need all those new positions?
Mr. Anselmo:
Senator, the industry is becoming concerned for a number of reasons. First, the increase in the number of complaints we are getting regarding poor service indicates we do not have adequate investigative staff to take the investigations in a timely manner. Presently, we do not have a supervisor on duty during the daytime on Saturday or Sunday. We would like to correct this with new positions. Second, the vehicle inspectors are falling behind. We projected we would complete 5,400 inspections during FY 2000, and we actually completed 5,125. As a result, we are constantly falling behind. We intend to inspect every taxicab in Clark County four times a year. However, because of the workload of the individuals doing this job, and the necessity to travel to Mesquite and Laughlin to inspect those cabs, we are just falling behind. We would prefer not to have that since the concern for the safety of the traveling public is a major issue with us. Therefore, we want two more vehicle inspectors.
Chairman Raggio:
What about your 2 Airport Control Officer positions that have never been filled?
Mr. Anselmo:
Senator, we have never filled those and we would not be opposed to having those two positions deleted.
Chairman Raggio:
Okay. If we do that we can save about $153,000 for the two years in the biennium for those two Airport Control Officers.
Senator Jacobsen:
Could you produce a chart for us showing how many taxis you have; how many town cars are in Clark County, and an overall picture of what you regulate.
Mr. Anselmo:
Senator, we only regulate the taxicabs. The Transportation Services Authority regulates the limos and the town cars. We can tell you how many taxicabs we physically allow on the street. The way our system works right now is the board will review the number of medallions, and they will decide whether they need more or fewer. They have never reduced that figure. When we have special events for conventions or the rodeo, we place additional cabs out just for the period of that event. When the convention is over, we take those medallions back.
Senator Neal:
How is the public being served by all of this?
Mr. Anselmo:
Senator, the tourists are served extremely well. We have some concerns about the ability of the companies to respond to the demands of local residents for service in the outlying areas. We are attempting to address that issue at this time. We have met with the companies. We are coming up with different types of concepts to ensure the service is provided. One of the issues with the city of Las Vegas has been the inadequate service, particularly out in the Summerlin area. Las Vegas City Councilman Michael McDonald was very gracious to meet with us and televise this on their program for the city. In addition, they have put this on their websites telling people that if they have a service complaint, to contact the Taxicab Authority for investigation and resolution. In addition, we are presently involved in hearings for a potentially new cab company, which would serve the west side of U.S. Interstate 15. Those hearings are currently ongoing.
Chairman Raggio:
Are there any further questions? We thank you for your presentation this morning. Let us go to the budget on Transportation Services Authority.
B&I, Transportation Services Authority – Budget Page B&I-168 (Volume 2)
Budget Account 226-3922
Paul J. Christensen, Chairman, Transportation Services Authority, Department of Business and Industry:
Good morning, Mr. Chairman and members of the committee. You have in front of you the expanded program narrative for FY 2002 and FY 2003.
Chairman Raggio:
No, we do not. I do not believe so.
Mr. Christensen:
I was under the impression you had those. I intended to indicate the narrative covers what we do, but I will cover it very quickly in a nutshell. We regulate the taxis and limousines statewide (with the exception of the taxis in Clark County), the household good movers, the per capita transportation buses, and tow trucks as far as allowed by the old TEA-21 Transportation Efficiency Act, which deregulated a lot of things. We are what remained when transportation was cut from the old Public Service Commission.
Our budget is fairly simple. It is a straight baseline budget with no enhancements or new programs.
Chairman Raggio:
Is there a proposal to combine the Taxicab Authority with the Transportation Services Authority? Is that being considered in your committee, Senator O’Donnell?
Senator O’Donnell:
Yes, Mr. Chairman. The bill draft is not back from the bill drafters yet. We anticipate having it sometime the end of this week, or the beginning next week.
BILL DRAFT REQUEST S-553: Makes various changes concerning regulation of household goods movers and limousines. (Later introduced as S. B. 270)
Mr. Christensen:
We also have S.B. 270 that has been referred to the transportation committee, which is a “backup bill.”
SENATE BILL 270: Makes various changes to provisions governing fully regulated carriers.
Chairman Raggio:
Does that not deal with the impound of vehicles?
Mr. Christensen:
That is correct, Mr. Chairman. I like to claim it is a rumor, but it is a strong rumor. We are hoping the people backing the merger bill will back off and that it may die. We proposed S.B. 270 to ensure the changes we needed, which basically gives us the right to impound a vehicle used to transport household goods. Otherwise, we find them, they go away and nothing is collected, and they continue to harass your constituents of this state by scamming the moving business.
Chairman Raggio:
It also establishes some fees.
Mr. Christensen:
It established fees on limos that do not now pay any fees whatsoever. It also establishes requirements on drivers, but that bill is not in front of us, and it should not have a fiscal impact except for the money those fees will generate. We could calculate this on projected generated fees.
Chairman Raggio:
Is that in your committee, Senator O’Donnell?
Senator O’Donnell:
Yes it is, Mr. Chairman.
Chairman Raggio:
Are there any questions from the committee? You presently have 20 authorized positions in this budget? Are any of those positions vacant at the present time?
Dave Kimball, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry:
That is correct, Mr. Chairman. At the present time we have two vacant positions, for which interviews are being conducted next Monday. That happened because of a promotion and one of our employees’ moving to the PUC.
Chairman Raggio:
Are there any questions on this budget? Let us move on to the next budget account on the agenda. Any comment on that budget?
B&I, Transportation Services Authority Admin Fines – Budget Page B&I-173 (Volume 2) Budget Account 226-3923
Mr. Christensen:
The only comment we have on this budget is where our fines revenue are deposited. This revenue can only be used for enforcement. We do as much of our enforcement as we can. Over a certain amount we have to come back to IFC for permission to use this money.
Chairman Raggio:
Are there any other questions on these budgets? You must be doing a good job. We do not have any further questions. Thank you very much.
Does anyone else in the audience wish to speak to any of the budgets we heard this morning? Okay, we will go now to Senate Bill 247.
SENATE BILL 247: Makes supplemental appropriation to Department of Human Resources for unanticipated shortfalls and expenses at Nevada Mental Health Institute and in Division of Child and Family Services. (BDR S-1257)
Stephen A. Shaw, Administrator, Division of Child and Family Services, Department of Human Resources:
Good morning, Mr. Chairman.
Jim Baumann, Administrative Services Officer IV, Division of Child and Family Services, Department of Human Resources:
Good morning, Mr. Chairman and members of the committee. This supplemental requests $2,743,867 to pay child welfare related expenses through June 30, 2001. This request is driven primarily by anticipated shortages in Category 09 (adoption subsidies). Categories 13 and 51 (higher levels of care), and Category 17 (Title XIX Medicaid).
The division will require an additional $1,479,444 over the legislatively approved funding to pay for adoption subsidies from Category 09. Adoption subsidies are the lowest level of care provided by the division. The increase in this category is due to increased adoptions resulting from provision of the Adoption and Safe Families Act (ASFA), which requires adoptions to take place at a faster pace. A portion of the shortage in this category will be paid with adoption incentive funds. The division received $354,000 in adoption incentives for exceeding adoption expectations in FY 2000 and FY 2001. These were incentives provided in the ASFA for exceeding targeted adoptions.
An additional $1,405,383 over the legislatively approved funding is needed to pay for higher levels of care (group homes and wrap-around services) paid from Category 13 and Category 51. Category 51 is a transfer to segregate the higher level expenses paid to Washoe County because of the pilot program. This increase is due, in part, to the lack of regular family foster care placements. The foster care rate increase included in the Governor’s recommended budget will help resolve this issue. There is approximately a 47 percent increase in funding recommended for adoption subsidies, which we feel will help alleviate this problem. Additionally, increased needs of severely emotionally disturbed children contribute to this expense. A large number of the children adopted are those without any special needs or problems, leaving children with emotional problems in our system. Those are the users of higher levels of care.
An additional $1,019,503 over the legislatively approved funding is needed to pay for Title XIX Medicaid expenses paid from Category 17. Category 17 represents the state and federal share of medical expenses and acute psychiatric services. The medical expense portion of Category 17, representing approximately 60 percent of the category, is not controlled by the division. These people have Medicaid cards and access private providers for whatever medical issues they may have. Acute psychiatric care is screened by Health Insights and the division provides case management for custody children. There are people with Medicaid cards accessing acute psychiatric care, which are case managed by the division.
An additional $591,529 over the legislatively approved funding is needed to pay for Non-Title XIX medical paid from Category 18. Children in this category do not have Medicaid coverage because they do not meet certain eligibility criteria in Medicaid regulations. For example, that could be due to income in excess of Medical standards or being an illegal alien over the age of 18 and not in school. In FY 2001, several children were not eligible for Medicaid coverage and required the acute care placements costing from $8,000 to $10,000 per month, which exacerbated the problem in this category contributing to this request.
There are other minor shortages in Youth Parole in the amount of $47,000, and in Foster Home Insurance in the amount of $1,981. We would be more than happy to go over these smaller shortage amounts or answer any questions you may have.
Chairman Raggio:
We have the backup figures you have submitted (Exhibit E and Exhibit F, the original of exhibit E is on file in the Research Library). The amount in the bill is $2,743,867 of the General Fund. The summary sheet we have, together with your backup documentation indicates the total supplemental appropriation request of $4,800,859. This was prepared in August 2000. Is it still the same amount, or do you have a current compilation? Do we still need this much from the General Fund?
Mr. Baumann:
Yes, Senator. We have recalculated the supplemental based on six additional months. The overall supplemental requirement has been reduced to $4,622,654. The General Fund requirement remains the same.
Chairman Raggio:
Why does the General Fund amount remain the same when the other amount went down a couple hundred thousand dollars?
Mr. Baumann:
Different levels of federal funding participation fund the categories funded in this budget. When we did the original adjustment calculations, we were not projecting shortages in Category 18, which is a 100 percent federally-funded program. Once we determine the net shortage, which would be the expense category, we then redo the fund map, which identifies the specific funding available, whether it be federal or other, leaving the General Fund to balance.
Chairman Raggio:
Have you discussed this with our committee staff?
Mr. Baumann:
This particular document has not been discussed with you staff. We finished it a couple of days ago. We have submitted a work program to the department director’s office and I am not sure where it is at this point.
Chairman Raggio:
Okay, committee staff will need to look at it, so we will not act on the bill today.
Mr. Baumann:
That will be fine, Senator.
Michael Torvinen, CPA, Administrative Services Officer IV, Division of Mental Health and Developmental Services, Department of Human Resources:
Good morning, Mr. Chairman and members of the committee. We have a couple of components to subsection 2 and we would also like to respectfully request an amendment with the bill to deal with some life safety issues at the hospital in southern Nevada. I will let my colleagues at the Nevada Mental Health Institute (NMHI) speak to the medication and utility issues. When they are done I will brief you on the need for additional funds.
Chairman Raggio:
Okay. The bill before us is for additional utility expenses at the new hospital, and for the cost of medication in the total amount of $435,950. Now, we are talking about a supplemental for this biennium, and you are talking about life safety measures as an additional issue here?
Mr. Torvinen:
That is correct, Mr. Chairman.
Chairman Raggio:
That did not get into the proposed budget?
Mr. Torvinen:
No, Sir. Would you like me to go through that part of the dialogue now?
Chairman Raggio:
I know the subcommittee asked about the life safety measures, but let us talk first about these two issues.
Harold Cook, Ph.D., Clinic Director, Nevada Mental Health Institute, Division of Mental Health and Developmental Services, Department of Human Resources:
Good morning, Mr. Chairman. The new hospital adds about 60,000 square feet of space to our utility bills. The original budget for the hospital did not contain utility funds for this fiscal year. So, we are asking for $110,950 for this expense.
Chairman Raggio:
Let me ask you again, because we asked you in the subcommittee, when is this going to open and be available to take patients? Are you waiting for certification?
Dr. Cook:
Yes, Sir, we are waiting for certification. At this time we are waiting for furniture, which has been ordered and should be delivered sometime in late spring or early summer. Once the furniture is ordered we will have the Bureau of Licensure and Certification conduct their survey and make sure we have all of our policies, procedures, and staffing issues handled. Right now we are anticipating that will happen in early July 2001. We have a grand opening scheduled for July 27, 2001, and the first patient going in there on July 30, 2001.
Chairman Raggio:
How much of this amount is for utility expense during this current year?
Robert Harnish, Jr., Administrative Service Officer III, Nevada Mental Health Institute, Division of Mental Health and Developmental Services, Department of Human Resources
All $110,000 is for utility expenses during the current year. The building does not open until next fiscal year, but the building was actually turned over to the state in October 2000. In October the state started paying for the utilities, e.g., heating, water, electricity, and so forth. The building was just completed. So, we could not turn the heat down to freezing. We had to keep the building heated, and of course, the electricity needed to be turned on. We have had people in and out of the building constantly during the time period. The amount projecting gas and electricity out to the end of the year, was a higher than normally experienced. The water, sewer, and garbage, which is normally cost allocated to people and programs on the campus, we did not allocate at this time. We did try to reduce the amount as much as possible.
The reason it is such a high amount is that we have experienced a 46 percent increase in the price of our natural gas. Also, effective the month of March, Sierra Pacific Power Company has indicated our electricity rate will increase 48.9 percent over what we have been paying in the past. So, it is a significant amount of money. We have a 60,000 square foot building and part of this 60,000 square feet has 22-foot ceilings in the entry ways and certain other areas so that it takes a tremendous amount of utilities to heat the building.
Chairman Raggio:
When this building was designed and constructed were there any considerations given to energy retrofitting? Or were there, at least, any consideration given to energy saving installation?
Mr. Harnish:
Yes, Sir, Mr. Chairman. I think they spent a significant amount of time trying to come up with what was best. Currently, we heat all of the buildings on the campus from the central boiler plant, where we produce steam to heat all the buildings. It is the old style, as is used in old military bases. NMHI converted to a new boiler plant. Now, I am not an engineer, but new, more efficient boilers were installed. These same boilers were placed in Lakes Crossing Center for the Mentally Disordered Offender (Lakes Crossing), and what we have experienced so far in Lakes Crossing is our natural gas prices have gone up since we have gone to the new, more efficient mode.
Chairman Raggio:
I am talking about the electrical equipment in the new hospital.
Mr. Harnish:
Yes, Sir, they have used florescent lighting wherever they could. They have done a number of things. It is just a large building, and it is a hospital where lights remain on 24 hours a day. There were just certain things that had to be done for security purposes.
Chairman Raggio:
Okay. What about the medication costs? Is this amount $435,950 still valid for these two items, or has that been adjusted?
Mr. Torvinen:
Mr. Chairman, we have made some recalculations. The utility figure has gone up slightly. We have some other utility shortfalls with the existing rate increases for every other building on the campus. The medications figure is basically the same and is outlined in our submittal (Exhibit G). It is very close to where we were when first projected. The importance of this medication is presented in our submittal entitled “New Generation Psychiatric Medications in Nevada” (Exhibit H, the original is on file in the Research Library).
Chairman Raggio:
This is for the new medications?
Mr. Torvinen:
Yes. We are not ready to ask the committee for any kind of amendment to these figures, and we do not think we will want to.
Chairman Raggio:
You said you had an amendment based on the life safety issue. What is your amendment on that?
Mr. Torvinen:
In January 1999, there was a survey by the Bureau of Licensure at the Southern Nevada Adult Mental Health Services hospital. They found some problems with smoke barriers in the building. In November 1999, the IFC approved the transfer of $350,000 of MAXIMUS funding from the Department of Human Resources to the State Public Works Board to fix the smoke barrier problems.
As soon as the contractor got into the building and opened up the ceiling, they discovered a multitude of other errors and problems with the construction. This latest figure we have provided to you today is entitled, “SB 247” (Exhibit I). It will take almost $363,000 to fix all of the other life safety issues discovered once the contractor went in and opened up the ceiling to fix the smoke barriers. That is over and above the original estimate of $350,000. My discussions with the State Public Works Board indicate these are distinctly separate numbers. The original process or contract still needs to move forward with the $350,000, and this additional amount is for those other matters.
Chairman Raggio:
This is for the Las Vegas mental health center?
Mr. Torvinen:
That is correct.
Chairman Raggio:
You are saying you need an additional $363,000 to address the items you are identifying now?
Mr. Torvinen:
That is correct. We have had discussions with the budget director, and he was looking at his emergency fund to provide funding to fix this problem. At that time he said we would have depleted the emergency fund and it would have been either his asking for supplement funds to replenish the emergency fund, or our attempting to amend this bill to include this. There is the issue of the March 31, 2002, deadline from the Health Care Financing Administration. They have extended the deadline on our licensure a couple of times. The letter they provided us with the March 31, 2002 deadline is final. The contractor that has been working on this original fix for the smoke barriers says we better get moving if we want to fix all of these problems by our target timeframe and have licensure come in and certify the building.
Chairman Raggio:
I am looking at a project cost estimate you delivered to staff on this issue (Exhibit H). It addresses building 3 and building 3A. Most of the items in building 3 are not of great cost. Building 3 requires intercom speakers, lighting conduit, lower lighting, conduit boxes, sprinkler heads, ceiling and wrapping couplings and elbows, horizontal smoke fire dampers between the floors, and a new fire alarm panel. Then in building 3A, all I am seeing here is something about relocating bedroom doors, rebuilding cabinetry, and a partial, general contractor cost of something in excess of $200,000. What are we talking about?
Mr. Torvinen:
That number should total up to that amount. I never did run the tape on it.
Chairman Raggio:
So, that is all these items totaled. You have $70,000 in here for just “A/E design and supervision.” What are they going to do for that amount?
Mr. Torvinen:
There is a representative here from the State Public Works Board who might be able to explain this matter.
Chairman Raggio:
Okay. Mr. Hataway, is this something the budget office is agreeing to for inclusion in a supplemental appropriation at this time?
Don Hataway, Deputy Director, Budget Division, Department of Administration:
It was this or the emergency fund, and it would have totally depleted this fund.
Chairman Raggio:
You understand this is an additional $263,000?
Don Hataway:
Right. We have been working with the agency and the State Public Works Board on this, and this has been discussed at the IFC several times. The work has to be done. It is just a matter of the funding mechanism for it, and a supplemental appropriation is a logical place.
Chairman Raggio:
One of the problems is we are not going to process this bill today because subsection 1 concerns me.
Don Hataway:
I understand, Mr. Chairman. We will work with your staff to get that straightened out because we do need this to be processed, because of the medication issue more than anything.
Chairman Raggio:
I understand. Then we are going to ask you to work closely with our staff on that matter.
Patrick Ward, Deputy Manager, Professional Services, State Public Works Board, Department of Administration:
Good morning. I am from the State Public Works Board addressing “A/E design and supervision.” The fee is $69,000 based on a proposal from the architect involved in the project. The State Public Works Board concurs with your opinion, Mr. Chairman, this figure seems a little high. The basis of that number being high, per the architect, is the rigors they go through to jump through the hoops for the Bureau of Licensure and Certification. So, we would attempt to negotiate a lower number for this contract.
Chairman Raggio:
Well, when can you do that?
Mr. Ward:
We have that proposal, and on approval of funding we can negotiate a contract and get it initiated.
Chairman Raggio:
I would rather have you get some adjustment on it before we authorize the funding.
Mr. Ward:
Yes. We should be able to get an alternate proposal within a week.
Chairman Raggio:
Get back to us. Is there anything else on this bill at this time? Does the committee have any questions?
Mr. Torvinen:
Mr. Chairman, if I may add one other point. Also attached to the estimate is some language suggested by the Nevada Attorney General’s office. This is so we can let a sole-source contract. Again, time is of the essence.
Chairman Raggio:
What are the bond sale costs on this project? We are not going to bond this project?
Mr. Ward:
Correct, Mr. Chairman. This is a supplemental appropriation from the General Fund. The bond sale costs would be eliminated. Also, advertising and printing costs would go away under the miscellaneous items.
Chairman Raggio:
Let us get a clean sheet on this project after you talk with the architect.
Mr. Ward:
I surely will, Mr. Chairman.
Chairman Raggio:
Are there any other questions? Thank you very much. Let us deal with the next matter.
SENATE BILL 199: Makes appropriation for purchase and light renovation of Capitol Apartments by the Legislative Counsel Bureau. (BDR-S-733)
Senator Raggio:
Committee, we have received Amendment No. 45 to S.B. 199. S.B. 199 is the measure we heard on March 5, 2001. That is for the purchase and renovation of the Capital Apartments. We requested an amendment. The amendment I have distributed to you authorizes $1,025,000 for the purchase and $553,100 for the light renovation. I think this is what we directed as a requested amendment. What is the committee’s pleasure?
Senator Coffin:
Thank you, Mr. Chairman. Before we had a motion, I want to bring up the subject we had discussion on, when we agreed to have the bill drafted. That was the issue of light renovation turning into heavy renovation. How do we send a letter to ourselves essentially telling us not to spend money on this – other than land acquisition?
Senator Raggio:
We can send a Letter of Intent from the committee, if you want.
Senator Coffin:
Does it make other members of the committee a little nervous about trying to redo that building for our own purposes, as opposed to just knocking it down. That probably serves a good purpose. I do not know what wording to tell you. I do not think it needs to be an amendment, but something.
Senator Raggio:
Give me a recall on Lorne J. Malkiewich’s (Director, Legislative Counsel Bureau) testimony. I thought by “light renovation,” he meant utilizing it. For what?
Senator Coffin:
I remember he said, theoretically, he had a possibility of using it, if we did not do anything for 31 offices. I do not think the city would allow us to do a commercial use of a residential building, without a lot of hoops to jump through. But, that might be an option. Renovating, I think, is pouring money down a rat hole. We could build a building for not much more on that spot, if we wanted it. Or use if for a parking lot or a park. I just want us to make sure we direct staff, outside the bill apparently.
Senator Raggio:
We could direct or request the Director of the Legislative Council Bureau to appear before these committees or the Interim Finance Committee before any expenditures are authorized for the light renovation, other than what might be necessary?
Senator Coffin:
Also, ask him to explore all the alternatives. I certainly will support the bill, based on that modification.
Senator Raggio:
Why do we not do that, committee? We should go ahead and process the bill because the date is coming up for confirmation by the court. We could issue a Letter of Intent indicating that, other than necessary maintenance, any expenditure of the $553,100 approved for light renovation would first have to be approved by these money committees during the session or by the Interim Finance Committee after adjournment.
Would that be satisfactory?
Senator Coffin:
Yes.
Senator Raggio:
I will accept a motion to amend and do pass S.B. 199 with Amendment No. 45 with a Letter of Intent, as indicated to the Legislative Counsel Director.
SENATOR MATHEWS MOVED TO AMEND AND DO PASS S. B. 199
SENATOR COFFIN SECONDED THE MOTION.
Senator Jacobsen:
It behooves the committee to walk over there and take a look so that we have a better judgment on what we are doing.
Senator Raggio:
Committee staff, see if we can arrange a time we can walk over there. Do we have access into the building?
Senator Jacobsen:
I asked Steve Watson and he has the keys.
Senator Raggio:
We will try to arrange a time for that. Is there any further discussion on the motion?
THE MOTION CARRIED. (SENATOR RAWSON WAS ABSENT FOR THE VOTE.)
* * * * *
Chairman Raggio:
The report will indicate amend and do pass with Amendment No. 45. I will ask staff to prepare a Letter of Intent as indicated. Is there anything else to come before the committee this morning? If not, the meeting is adjourned.
Chairman Raggio adjourned the meeting at 10:19 a.m.
RESPECTFULLY SUBMITTED:
ElizaBeth Root
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: