MINUTES OF THE MEETING OF THE

joint Subcommittee on general government

of the

senate committee on finance

and the

assembly committee on ways and means

 

Seventy-First Session

April 5, 2001

 

 

The Joint Subcommittee on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Meanswas called to order by Chairwoman Vonne S. Chowning at 8:01 a.m., on Thursday, April 5, 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.

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Mrs. Vonne S. Chowning, Chairwoman

Mr. Bob Beers

Ms. Christina R. Guinchigliani

Ms. Sheila Leslie

Mr. David R. Parks

 

ASSEMBLY COMMITTEE MEMBERS NOT PRESENT:

Mr. Lynn C. Hettrick (Excused)

 

SENATE MEMBERS PRESENT:

Senator Lawrence E. Jacobsen (Vice Chairman)

Senator Joseph M. Neal Jr.

 

SENATE COMMITTEE MEMBERS NOT PRESENT:

Senator William R. O’Donnell (Excused)

 

STAFF MEMBERS PRESENT:

Mark W. Stevens, Assembly Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Rim Rodriguez, Program Analyst

Rick Combs, Program Analyst

Michael J. Chapman, Program Analyst

Debra Petrelli, Committee Secretary

 

OTHERS PRESENT:

Roger Bremner, Administrator, Division of Industrial Relations, Department of Business and Industry

Cindy Jones, Chief Administrative Officer, Administrative Services Unit, Division of Industrial Relations, Department of Business and Industry

L. Tom Czehowski, Chief Administrative Officer, Occupational Safety and Health Enforcement Section, Division of Industrial Relations, Department of Business and Industry

Jan G. Rosenberg, Chief Administrative Officer, Safety Consultation and Training Section, Division of Industrial Relations, Department of Business and Industry

 

 

Jonathan Sias, Director, Nevada State Veterans’ Nursing Home, Office of Veterans’ Services

Chuck Fulkerson, Executive Director, Office of Veterans’ Services

Larry Barry, Administrative Services Officer, Nevada State Veterans’ Nursing Home, Office of Veterans’ Services

Sherry Blackwell, Budget Analyst, Budget Division, Department of Administration

Charles K. Abbott, Management Analyst, Office of Executive Director for Veterans’             Services, Office of Veterans’ Services

Ed Gobel, Lobbyist, Council of Nevada Veterans Organizations

Terry Savage, Director, Department of Information Technology

Diane Jungwirth, Chief Assistant Budget Administrator, Budget Division, Department of Administration

Shelly Person, Chief, Planning and Programming Division, Department of Information Technology

Mark Blomstrom, Deputy Director, Communication and Computing Division, Department of Information Technology

Delbert Collins, Computer Systems Programmer IV, Department of Information Technology

Ed Perry, Consultant, Department of Administration and Department of Information Technology

 

 

DEPARTMENT OF BUSINESS AND INDUSTRY

 

B&I, Industrial Relations – Budget Page B&I-127 (Volume 2)

Budget Account 210-4680

 

Roger Bremner, Administrator, Division of Industrial Relations, Department of Business and Industry, introduced Cindy Jones, Chief Administrative Officer, Administrative Services Unit, Division of Industrial Relations, Department of Business and Industry, and Charles Verre, Chief Administrative Officer, Industrial Insurance Regulation Section, Division of Industrial Relations, Department of Business and Industry.

 

Mr. Bremner stated that the mission of the Division of Industrial Relations is to promote the health and safety of Nevada workers in the workplace and to ensure that if workers are injured on the job, they are accorded all the workers’ compensation benefits to which they are entitled.  He noted that statutory authority is in Nevada Revised Statutes (NRS) 232.550 through NRS 232.700 and NRS 512.616 through NRS 512.618.  He said the division’s budgets are included in four different budget categories, which also support four statutorily authorized committees.  He added they include two “injury” boards, the Occupational Safety and Health Review Board, and an advisory council.  These boards are all appointed by the Governor, he noted.

 

Mrs. Chowning referred the committee to the Division of Industrial Relations’ amended performance indicators (Exhibit C) and questioned why there is an increase in “lost-time claims.”  Mr. Bremner replied that for FY 2001 the numbers had not been updated.  Mrs. Chowning asked how development of indicators is going.  Mr. Bremner answered the division’s performance indicators are “coming along quite well.”  He said there was some concern over going from a “2-way” to a “3‑way” and back to a “2-way” that is different from the original “2-way” insurance.  He stated that the transition has been rather smooth.  They have not had nearly the number of problems anticipated, he added, when Employees Insurance Company of Nevada (EICON) had a mass cancellation of small policyholders.

 

Mr. Bremner commented that it was expected the division would see a big infusion of uninsured claims, which have not materialized.  He added that there is a budget reduction in the number of positions recommended as a result of problems that did not materialize.  He stated that when they get to “unlimited rate competition,” and there is a big increase in minimum premiums, there might be employers who will not buy insurance.  He said he believes the division will be ready to face this situation, should it arise.

 

Mrs. Chowning asked about amount of fines imposed and percentage of fines collected as a result of audits conducted by the agency.  Mr. Bremner said the recovery amount is uninsured funds collected for the uninsured claims fund.  He outlined that their “enforcement arm” has been very active in pursing those claims where the employer has not purchased insurance or allows it lap.  He stated that the injured worker is afforded benefits from the uninsured claims fund and then the division goes back against the employer and collects those funds.  He added that those are very difficult to collect.

 

Mrs. Chowning asked whether the numbers of uninsured claims investigated and determinations issued have been going upward, and whether there has been an increase in the number of complaints.  Mr. Bremner replied that an investigation is determined when people complain, and there is an increase in the numbers of complaints and resolved complaints.  He stated that with a transition, the division knew it would be very important for their “enforcement arm to be geared up.”  He added that they were prepared for a transition and things have gone well.  He noted that, in conjunction with the Attorney General’s office, the division has conducted sweeps in many towns asking people randomly for policies of workers compensation.

 

Mrs. Chowning asked whether these “sweeps” have been done in Las Vegas, and whether employers are able to determine when these “sweeps” are coming.  Mr. Bremner stated they are not.  However, there is a different “atmosphere” in Las Vegas than in less populated areas of the state, he clarified. 

 

Mrs. Chowning said the committee requests that future performance indicators include amounts of fines and percentages of fines actually collected.  Mr. Bremner stated they are looking at all of their performance indicators.  He commented that at the last legislative session he had informed the committee of things that would be done, but with other priorities being set for the transition of “3-way” insurance, they were overlooked.  He said his office is looking at changing the performance indicators, not only in the Industrial Insurance Regulation Section (IIRS), but also in the Occupational Safety and Health Administration (OSHA) budget accounts, which are more outcome oriented.  He pointed out that some performance indicators are not an indication of performance, but rather numbers that depend on variables that the division has no control over.  Mrs. Chowning said perhaps taking the proactive approach is best.        

 

 

 

 

E-275 Working Environment & Wage - Page B&I-131

 

Mr. Bremner stated that E-275 proposes $3,099 in each year of the biennium.  This is designed to provide supervisory training, he added, and is spread through the division’s four different budgets.  He said they have proposed a contract with the Community College of Southern Nevada to supply supervisor training.  He stated that the division has supervisors who have excellent job skills but they do not necessarily have excellent supervisory skills.  The division would like to enhance these skills, he pointed out.  Mr. Bremner said he believes there is a big need for organized supervisory training.

 

Mrs. Chowning asked how this differs from state personnel training.  Mr. Bremner said there are other programs available; however, this program would be much more concentrated.  He said employees would get a certificate of completion.  He stated that this program is designed by the Community College of Southern Nevada as a supervisory program.  He mentioned that other courses currently available are “just random” courses.  This program would be dedicated to improving supervisory skills, he added.

 

Mr. Bremner said that the Industrial Insurance Regulation Section (IIRS) has contracted with the Community College of Southern Nevada in the past to do training, and it has turned out to be a good deal.  He added, “They have done a good job for us and we’re looking at staying within the system to do the kind of training needed by the division employees.” 

 

E-276 Working Environment & Wage – Page B&I-131

 

Mr. Bremner said that E-276 funds two positions from the division to attend the International Association of Industrial Accident Boards and Commissions workers’ compensation classes, and then return.  He added that these employees will be sharing the training with staff upon their return.

 

E-277 Working Environment & Wage - Page B&I-132

 

Mr. Bremner testified that E-277 recommends the deletion of a support staff position that is not necessary.  He referred the committee to Exhibit C, and said that, as a result of fundamental review, and looking at work levels and performances, the division is recommending the deletion of five positions.  He added that this will be at a proposed saving of $246,000 in the first year of the biennium and $270,000 in the second year of the biennium.  He noted that these positions have currently been held vacant while the operation of the workers compensation regulation was reviewed.  He stated, “We feel we really don’t need them.”

 

Mrs. Chowning asked whether deleting these positions would impact their goals.  Mr. Bremner replied that it would not at this time.  Mrs. Chowning reiterated, “Not at this time, are you sure?”  Mr. Bremner stated the division could hold these positions vacant, but has no intention of filling them. 

 

Ms. Giunchigliani stated that she would caution anyone about holding positions vacant because the committee is cutting anything that has been open for a year or longer.  With the budget constraints, this is part of what is happening, she added.  Mr. Bremner replied, “These positions are vacant and we feel we can do without them.”  Mrs. Chowning asked whether one of these positions had been vacant almost a year.  Mr. Bremner said that one had.  He added that the audit manual has been revised twice, so it is a more “streamlined” procedure.  We get the same people to do more work, he commented.

 

E-710 Replacement Equipment - Page B&I-132

 

Mr. Bremner said E-710 recommends the replacement of vehicles and computers.  He stated that the vehicles are on a replacement schedule and are “just old.”  He added that these are Chrysler “K” series cars, and parts are no longer available.  He commented that the division’s computers were all purchased at one time and they have now become “obsolete” at the same time.  Mrs. Chowning asked whether 40 desktop computers are recommended for replacement.  Mr. Bremner stated that number would be adjusted downward by the position changes that are authorized.

 

B&I, Occupational Safety & Health Enforcement – Budget Page B&I-135 (Volume 2) Budget Account 210-4682

 

Regarding performance indicators in this budget, Mrs. Chowning said the committee would like to see measurement of effectiveness and outcomes, such as numbers of inspections conducted within certain time frames and percentages of contested cases versus the total cases administered.  Mr. Bremner testified that performance indicators have been looked at and tentative new performance indicators have been written that will be offered in the near future that are more outcome driven.  The division will also be more in-tune with the performance indicators by which the federal government evaluates this program, and they are more outcome orientated, he stated.  He added that they should be able to offer this to the committee in the very near future.

 

Mrs. Chowning said the committee has concerns regarding positions because 18 positions were approved last session, 8 of which have never been filled, and 4 more positions were approved in July.  Mr. Bremner remarked that the same fundamental review is being done as was done in the Industrial Insurance Regulation Section; however, these positions have proven to be positions that are not easy to fill.  He pointed out that in the last two weeks, two positions were filled.  He said they are working very hard to find bilingual Safety Specialists.  He added that there is a real need in southern Nevada for bilingual capabilities in this area.  He stated that they are advertising in Arizona to fill those positions, without success.  He indicated that the division does not want to give up these positions at this time until they have had a chance to do a complete review of the operation.  He added, “These are not positions that we haven’t tried to fill, they’re just positions that we have not been able to fill.”

 

Mrs. Chowning agreed these are tough positions to fill and they are very important for the division.  She commented that one position is approaching a one-year vacancy.  She asked whether any of these vacant positions should be eliminated because of the seriousness of the position.  Mr. Bremner remarked that the division is giving up one position, an Industrial Hygienist Position, because it decided that the need was not there. 

 

Mrs. Chowning asked when the division anticipates filling these vacant positions.  Mr. Bremner said they are going to other states with their job search because they do need bilingual Safety Inspectors.  He stated that they might need to look into hiring translators that can be sent out with safety inspectors. 

 

Ms. Giunchigliani mentioned that the courts are also looking at legislation to have interpreters for various languages and, along those lines, some relief may be found for this department.  She commented on the importance of supplying safety equipment to all employees as well as immigrants that might be working illegally and would have no support if they were involved in a job-related accident.   She suggested that chambers of commerce could get involved in this area or the Latin Chamber of Commerce could assist.  She added that, through scholarship programs in vocation, students could possibly be encouraged to help in this area.

 

Mr. Bremner replied that if the division is unable to fill these positions, perhaps it could seek permission from the Interim Finance Committee (IFC) to use these funds to contract for interpreter services.  Ms. Giunchigliani requested a cost breakout of contract services costs versus the actual position costs.  Mr. Bremner said he would do that.

 

Mrs. Chowning questioned whether the department has considered working with the University and Community College System of Nevada (UCCSN).  She pointed out that some of the other budgets the committee has looked at include intern programs.  These are marvelous opportunities for students, she noted, and it should be looked at.

 

Mr. Bremner said they have had interns in the past in the Safety Consultation and Training Section (SCATS), but have not used them for linguistic services.  He said it is a good idea.  He stated that they would check with the University of Las Vegas, (UNLV) and University of Reno, Nevada, (UNR) and the community college system for assistance in linguistics. 

 

E-275 Working Environment & Wage - Page B&I-138

 

Mr. Bremner said E-275 recommends supervisory training in conjunction with the Community College of Southern Nevada.

 

E-710 Replacement Equipment - Page B&I-138

 

Mr. Bremner commented that E-710 is a recommendation for the replacement of two vehicles in the first year of the biennium, and six vehicles in the second year.  He pointed out that these are very old vehicles and said, “Their time has come, and it is time to replace them.”  He added that this enhancement also includes computer replacement. 

 

Mrs. Chowning inquired whether the request is for the replacement of 51 desktop computers, and questioned why they all need to be replaced at the same time.  Mr. Bremner replied that all of these computers were originally purchased at the same time and they have become obsolete at the same time. 

 

Cindy Jones, Chief Administrative Officer, Administrative Services Unit, Division of Industrial Relations, Department of Business and Industry, said that in 1997 the division received a substantial federal grant that enabled them to buy computers for the majority of the Occupational Safety and Health Enforcement staff.  She commented that the majority of these computers are at least four years old and are at their scheduled replacement date.  Additionally, she said, the federal system is currently converting from an on-line “dial-up” system to web-based technology, in the next couple of months.  She pointed out that this will only increase the need to replace these units. 

 

Mrs. Chowning pointed out that with the current situation in the budget, perhaps the division could reconsider this request and possibly spread the replacement of these computers out over time.  She asked that the division get with committee staff on this issue.  Mr. Bremner agreed that they would, but added that it is not out of the General Fund.  He also announced that at a recent OSHA meeting, the division expressed its needs, and he believes that in this budget and the next budget the division will get approximately $120,000 in additional federal funding.  He added that with these funds, the division might be able to partially offset the costs of these computer replacement requests.

 

Ms. Giunchigliani questioned whether, when safety inspections are done on businesses, they are given an opportunity to “fix the problem beforehand.”   

 

L. Tom Czehowski, Chief Administrative Officer, Occupational Safety and Health Enforcement Section, Division of Industrial Relations, Department of Business and Industry, replied that they do, depending on the severity of the hazard that they encounter.  It is possible they may ask for a business to “abate it on the premises,” he added, or they may be given a specific timeframe of 10 to 30 days to correct the hazard.

 

Ms. Giunchigliani asked whether the department has jurisdiction over public schools.  Mr. Czehowski replied that they do.  Ms. Giunchigliani asked whether a concerned party would contact the Health Division before contacting OSHA, or could they just contact OSHA directly.  Mr. Czehowski replied that they can contact OSHA directly. 

 

Mr. Bremner said that the statement on current issues referring to “implementing new federal standards on ergonomics” is an item in which the standards have been delayed or put off; therefore, that part of the statement no longer holds true.

 

Senator Neal asked why the standards would be “put off when you as an agency should have the concern to move forward in this area, because ergonomics is something that might be needed with the ‘computer age’ and repetitive type work that is being done.”  Mr. Bremner replied that the Safety Consultation and Training Section is still doing a basic ergonomic introduction class, but is not doing classes on federal standards, because those standards no longer exist.

 

Senator Neal questioned whether the division is doing something in this area.  Mr. Bremner said, “Yes, we’re having introduction to ergonomics classes…but we are not training on the standards.”  Senator Neal asked what the division is training on, as this should be part of their everyday operation, since it is a matter of concern when repetitive work such as typing may cause carpal tunnel syndrome.  He added, “It seems that we should be operating on our own in this area.”

 

Mr. Bremner reiterated that the division has classes on introduction to ergonomics that trains safety people on ergonomics and the principals of ergonomics, but they do not have any classes on the standards themselves because the standards are no longer applicable.

 

Senator Neal explained that ergonomics is concerned with designing and arranging things employees use so that the employees and things interact to prevent injury from repetitive work.  He added that it is looking at the workplace and determining what is actually needed in order to have employees “not suffer as a result.”

 

B&I, Safety Consultation and Training – Budget Page B&I-140

Budget Account 210-4685

 

Jan G. Rosenberg, Chief Administrative Officer, Safety Consultation and Training Section, Division of Industrial Relations, Department of Business and Industry, stated that with regards to the ergonomics issue, when the division does an on-site consultation, two different things are done.  Mr. Rosenberg said they will respond to an employer directly on an ergonomic issue or when they do a comprehensive survey, ergonomics is included in the survey.  He added that for training they have a basic ergonomics program. 

 

Senator Neal pointed out that the principal of ergonomics is to have an end result of employees not suffering from a workstation that makes that person uncomfortable in doing their work, especially for employees with repetitive duties, so as to prevent carpal tunnel syndrome.  He outlined that there is more to ergonomics than just teaching it; ergonomics also applies to making changes in the workstation. 

 

Mr. Rosenberg stated that recommendations are made on those issues when they go to consultations.  Senator Neal asked to whom the recommendations are made.  Mr. Rosenberg replied they are made to the employer.  Senator Neal questioned what is done in terms of follow up?  Mr. Rosenberg said the division is required by federal OSHA, to follow up on all serious hazards.  He added that in the event an employer does not report a serious hazard, the division would turn the issue over to the enforcement section.

 

Senator Neal commented that he understood from the division’s director that nothing is being done because there were no longer standards.  Mr. Rosenberg stated:

 

We went through the exercise we developed in an ergonomic standard program that addresses the standard, and we did about six programs and trained about 300 people and we had a number of other programs scheduled, but as soon as the standard was repealed, we cancelled those classes and removed them from our schedule, because the standard was no longer applicable.  It dealt with specific issues on action triggers, and how an employer deals with complying with an OSHA regulation.           

 

Senator Neal said he gathers from that statement that nothing is being done right now.  Mr. Rosenberg replied that when the division does either limited or full‑service consultation, it consults on ergonomic issues; these issues are addressed and then the division makes recommendations.  If the employer does not comply with the recommendations, he added, that employer would be referred to the enforcement section.  He remarked that they will be scheduling additional classes in the future on basic ergonomic principals.

 

Mrs. Chowning said the performance indicators indicate that almost 7,200 hazards have been identified and these were 100 percent corrected.  She added that employers that received formal safety and health training numbered 2,021, and 4,566 employees received the same.  She questioned whether this is enough training because there are so many more employees than this in our state.  Mr. Bremner replied that the safety and training section has just recently reached full strength, and he believes the section is “producing at a very high level” at this point in time.

 

Regarding the statewide safety campaign, Mrs. Chowning stated that there is a decrease of $325,000 in contract services.  She asked how the division will be able to communicate its message.  Mr. Bremner answered that this was their “multi-media campaign,” and much of those funds were being spent on general safety messages in the media.  He said that, even though these messages might be good, it was very difficult to quantify the impact they were having, and the funds were not large enough to actually change anyone’s consciousness about safety.  He added this is a lot of money, but it doesn’t go very far when it comes to television, newspaper, and radio advertising.

 

Mr. Bremner explained that they are now going to concentrate more on getting their Chief Administrative Officer, Jan G. Rosenberg, “into the front door” of various businesses.  He remarked that this would include working more with principals in developing partnerships and safety campaigns on a different level, and hopefully getting more exposure for doing safety consultation work.  He added that they believe they can scale this area down and focus on getting “more miles for a lot less money.”

 

Mrs. Chowning requested that the division keep the committee apprised of their efforts in this area.  Mr. Bremner agreed that they would.

 

Senator Neal asked what is available for an employer who would like to conduct his own program of safety in the workplace, in terms of films or publications, and whether the division has this type of library or services available.  Mr. Rosenberg replied that they have a large video library, and just recently added about 60 additional videotapes in both Spanish and English on various safety and health topics.  He commented that they are also revising their written safety program guide to make it more “user friendly” and they are updating it because of changes in the law.

 

Senator Neal inquired whether these guides are available to employers.  Mr. Rosenberg said they are, they are available in the Safety Consultation and Training Section, of the Division of Industrial Relations’ office and are on their website.  He added that they are currently building their website and will have additional information that employees and employers can access, including numerous occupational safety tips.  Senator Neal asked how many items their library carries.  Mr. Rosenberg indicated that he was not sure of the exact count, but it is more than 250 items.  Senator Neal questioned whether their library is kept “modern and updated.”  Mr. Rosenberg said that it is.  He reiterated that they just recently received 60 videotapes and they are getting more within the next 30 to 60 days that will be integrated into the library.

 

Senator Neal asked where in the division’s budget are these purchases of new library items reflected.  Ms. Jones answered that this is category 04 under the general ledger for instructional supplies.  Senator Neal inquired what the amount of that funding would be.  Mrs. Chowning stated that the Governors recommendation is $5,290.  Senator Neal inquired whether the division covers the entire state with these instructional supplies.  Mr. Rosenberg said they do.  He added that they recently added a defensive driving coarse, and books on OSHA standards are also in this same category. 

 

Senator Neal asked what the division’s connection is to defensive driving.  Mr. Rosenberg said the number one cause of fatalities nationally in the workplace is related to automobile accidents.  He commented that OSHA does not have a standard for defensive driving; however, the division feels it is an important issue.  Senator Neal asked whether the National Safety Council has a standard related to defensive driving.  Mr. Rosenberg stated they have a “worldwide” recognized program, and this is the program the division has purchased.  Senator Neal inquired as to how many copies of this program are available.  Mr. Rosenberg replied that based on need, the division purchases those programs as it schedules classes.  He added that he purchases 200 books at a time, at $2 per book. 

 

Senator Neal inquired as to how many hours are involved in the defensive driving program.  Mr. Rosenberg answered that they are doing a 4-hour course.

 

E-710 Replacement Equipment - Page B&I-143

 

Mrs. Chowning asked how many computers the division is requesting to replace, because it appears that almost every position is scheduled to have a new computer.  Mr. Bremner answered they are requesting 28 new computers.  Mrs. Chowning inquired why 28 computers are needed for 27 positions.  Mr. Bremner said that 28 computers would be adjusted downward for the position recommended for deletion.

 

Ms. Jones mentioned that is an error in the budget.  She explained that they deleted one position in decision unit E-278 and the computer that went with that position was inadvertently not omitted.  She added, “So it would be 27 computers.”  She stated that of the 27 computers requested, each position would receive one.  She remarked that the majority of the old computers were bought in 1997 with a federal grant, and the reason for replacement is identical to the reason for replacement for the  Occupational Safety and Health Enforcement Section.  She added this section also uses the same federal system for federal reporting, which is moving to web-based technology in the next two months.

 

Mrs. Chowning, referring to web-based technology, asked where that is recommended in the budget.  Ms. Jones replied that the division currently has Internet access for all its positions.  The federal system, she added, goes through a federal line, for which the division currently pays line charges, as part of their budget in category 26, for access to the federal system.  She remarked that this is opposed to maintaining an outdated system, which includes WordPerfect 5.1 shells.

 

Mrs. Chowning asked whether their Internet charges totaling $310 is able to do everything they need.  Ms. Jones commented that the $310 is for remote access for their remote locations.

 

Mrs. Chowning requested that Ms. Jones get together with staff concerning Internet rates.  Ms. Jones agreed that would be fine.

 

B&I, Mine Safety & Training - Budget Page B&I-145 (Volume 2)

Budget Account 210-4686

 

Mrs. Chowning, referring to performance indicators, said, “You have many employees that attend training sessions, and you have accidents that are in investigations that have been completed. So do you have any indicators relating injuries, illnesses, or fatalities?”  Mr. Bremner replied that he believes that fatalities are listed under “lost-time” accidents.   He added that in the category of number of mines and employees, there are many contract employees who work for mines who are not direct employees of the mines, but actually work for contractors who do exploration work for the mines.  He noted that the division does do training for these employees as well.

 

Mr. Bremner said their Mine Safety and Training Section is an experienced section and that staff works very hard under adverse conditions, including many travel requirements.  He stated that staff in this section have always prided themselves on the fact that they are able to achieve their performance standards plus more.  Mrs. Chowning mentioned that it appears this staff section has doubled what they hoped to accomplish.  Mr. Bremner reiterated that these are very dedicated people and they take their work very seriously, because mining is inherently a dangerous business.  He added that last year this staff was given the Cashman Good Government Award from the Nevada Taxpayers Association because the staff had developed an individualized special training program for mining supervisory personnel, which is nationally recognized.

 

E-720 New Equipment - Page B&I-148

 

Mrs. Chowning asked whether foam generators are requested in E-720, and requested a description of these types of generators.  Mr. Bremner replied, “These are generators that generate foam.”  He added that these generators are actually fire-fighting devices.  He stated that additional federal funds are anticipated to be received in this division that will be used as an offset.  He said he believes these funds will total approximately $60,000.  Mrs. Chowning asked whether this is part of the division’s training program because she is unaware of firefighting in the mines done by the division.  Mr. Bremner stated it would be for training equipment, not actual firefighting.

 

Senator Neal commented that when an agency trains in safety, the trainers must be knowledgeable of the equipment that is used.  Mr. Bremner agreed with Senator Neal.  

 

OFFICE OF VETERANS’ SERVICES

 

Veterans Home Account – Budget Page VETERAN-7 (Volume 3)

Budget Account 101-2561

 

Mrs. Chowning said the committee is very interested in knowing what the new plan for funding is regarding the increase in the number of Medicaid patients, and requested that the agency inform the committee regarding the current situation as opposed to “a couple weeks ago.”  

Jonathan Sias, Director, Nevada State Veterans’ Nursing Home, Office of Veterans’ Services, stated that the Division of Health Care, Finance, and Policy (DHCFP) submitted responses to certain questions from the Legislative Counsel Bureau (LCB).  He said his agency reviewed the responses and respectfully disagrees with the premise of HCFAP’s assumptions.  He indicated there is no doubt that HCFAP’s efforts are genuine and accurate based on the applicability of those assumptions.  Unfortunately, he noted, they base all their answers and calculations on their past history of care levels in the state of Nevada.  These levels do not reflect the real world as it applies to levels of care at a veterans’ nursing home, he added.  He said he does not find fault with the methodology.  However, he said, the Nevada Medicaid Office (NMO) has never been a fiscal intermediary for a skilled nursing home for veterans, a type of facility that “flips” the basic industry standards.  He testified that the veterans this home will serve do not fit into the averages presented by DHCFP.  He said his agency has also submitted answers to questions from the LCB, which are based on veterans and histories in veterans’ homes.  He explained that his calculations for funding sources are based upon case histories in other veterans’ homes.  He added that his agency is working with the DHCFP to develop a cost reimbursement method that is most beneficial to minimizing the use of General Funds.

 

He added that Larry Barry, Administrative Services Officer, Nevada State Veterans’ Nursing Home, Office of Veterans’ Services, has an appointment to work with the DHCFP staff to prepare costs and other details to satisfy these funding issues.

 

Mr. Sias stated that the funding calculations his agency has presented are “accurate; his budget request is sound; and it reflects a diligent use of taxpayer money.”

 

Mrs. Chowning asked whether these projections have been given to the committee staff.  Mr. Sias replied they have been.  Mrs. Chowning questioned whether backup material had also been supplied to the committee staff.  Mr. Sias said that it had, based on actual existing circumstances in other veterans’ nursing homes. 

 

Mrs. Chowning asked in which states had these comparisons been done, and pointed out those states are different from our state.  Therefore, she stated, the committee needs to know what type of patients are in the comparison examples and whether they were Medicaid patients.  Mr. Sias remarked that the true difference is in the level of acuity that Medicaid assigns as the average level of acuity for a nursing home.  He pointed out that the level of acuity in a veterans’ nursing home is significantly higher than the industry standard.  He noted that the average industry standard nursing home resident is a 68-year old woman.  He added that 95 percent of the residents in veterans’ homes, nationwide, are men. 

 

Mr. Sias explained that men inherently bring with them higher acuity levels, including weight, dietary, and nutrition issues.  Mrs. Chowning replied that this is a comparison of acuity levels of one state to another, and asked why he is comparing a nursing home facility to a veterans’ nursing home facility.  She added that the committee must ultimately look at the dollars and the justification for how the budget is constructed.  She stated that the committee will need comments from the Budget Division and asked whether Budget Division staff have reviewed the numbers provided by the veterans’ home.  She emphasized that the committee needs to close the veterans’ home budget in two or three weeks at the latest.

 

Mrs. Chowning explained that “different numbers are being projected” here.  Mr. Sias commented that there are conflicting projections.  Mrs. Chowning emphasized that the committee cannot have conflicting numbers; the committee members must know that these numbers are “absolutely accurate.”

 

Charles W. Fulkerson, Executive Director, Office of Veteran’s Services, stated that it is his understanding that the differences of opinion regarding levels of acuity care derived from a veterans’ population and from a population of Medicaid patients in Nevada.  He remarked that the veterans’ nursing home acuity care level is higher than the levels that are “normal” in Nevada.  He added:

 

Which assumption would you feel more comfortable in us using in proposing the budget?  The assumption they get from other veterans’ homes that have been in operation where the acuity care is higher, or the assumption that Nevada veterans are healthier and that the present non-veteran Medicare population in nursing homes in Nevada will fit the population we are going to receive in that home.

 

Mrs. Chowning remarked that the committee staff has received numbers from the Office or Veterans Services.  However, she said “The backup isn’t there, the proof.  Where is the proof to backup the numbers?”  Mr. Fulkerson noted that numbers were received from Mr. Berry, who spent time in Arizona in January of this year accumulating data, as well as getting information from California.  He said, “I assume by proof you want budgets and documentation showing that those acuity cares actually exist in these other veterans’ homes.”

 

Mrs. Chowning replied:

 

Yes, and how are those veterans’ dollars being supplemented?  How are those patients being paid?  Are a lot of those numbers coming from Medicaid?  If so, then we need to know how many of those, because Arizona’s assets are different than Nevada; therefore, there is going to be a difference in the dollars.  That’s why the staff has to have all of the information.   

 

Mr. Fulkerson said he understands this.  Mrs. Chowning questioned whether he had talked with the Nevada Medicaid Office regarding the numbers that the Office of Veterans’ Services had provided to the subcommittee.  Mr. Fulkerson replied that the Office of Veterans’ Services had discussed the numbers with DCHFP and there is another meeting set for his staff and the division on April 6.

 

Mr. Berry stated that the scheduled meeting for April 6 with Medicaid staff and reimbursement specialist will entail working through a Medicare cost report to work on any differences there might be.  He mentioned that there was some question about the manner in which, the per diem reimbursement the Office of Veterans’ Services will be receiving from the Veterans Administration (VA), will be treated by federal Medicaid officials.  He pointed out that the latest numbers that were presented to the committee’s staff reduced the amount of payments the Office of Veterans’ Services would be receiving from Medicaid.  He testified that the meeting set for April 6 will be for working out the details to make sure that this is a suitable method and to make sure that they can get the “reimbursement method” on track, so that it can start immediately.

 

Mr. Berry remarked that there is talk about an amendment to The Medicaid State Plan to be sure the Office of Veterans’ Services can be reimbursed using actual costs rather than prospective costs.  He said these are the types of details they hope to work out at the meeting on April 6.

 

Sherry Blackwell, Budget Analyst, Budget Division, Department of Administration, stated that they have not had a chance to work through the latest numbers for this budget.  She added that John P. Comeaux, Director, Budget Division, Department of Administration, is sending a letter to Mark W. Stevens, Assembly Fiscal Analyst, and Gary L. Ghiggeri, Senate Fiscal Analyst requesting that the General Fund amount in these budgets be available in both fiscal years of the 2001 – 2003 biennium, because there is still a lot that is unknown at this time.  She explained that they have no history or data on the acuity levels, the income levels, or exactly where that revenue is going to come from.  “We just do not know,” she added.

 

Ms. Blackwell indicated that the Budget Division feels the General Fund amount in this budget is adequate.  The revenues may not be identified correctly as to client copayment or VA per diem reimbursement, she noted.  She explained that the Budget Division will need some history in this area to correctly identify these revenue categories, and currently they do not have this information.  She testified that the General Fund amount is sufficient to address the needs of this facility, especially in the first year, FY 2002.  She explained that the projected “ramp up” for admitting residents to the facility with the occupancy level is thought to be very aggressive and if the funding is available in both years of the biennium, the Budget Division believes there is adequate General Fund for this budget.

 

Mrs. Chowning asked how the Budget Division can really feel that it is adequate before this scheduled meeting on April 6, and asked whether Ms. Blackwell would be attending the April 6 meeting.  Ms. Blackwell indicated that until this morning, she was unaware of this meeting, but that she could certainly attend.  Mrs. Chowning stated that in order to save time, she is requesting that Ms. Blackwell be present at the April 6 meeting.  Ms. Blackwell replied she would be there.

 

Mrs. Chowning questioned whether the Budget Division could inform the committee within the next couple of weeks whether all of these issues can be resolved.  Ms. Blackwell said, “No I cannot.  All I can tell you is that the other revenue besides the General Fund is a moving target.  Right now we do not know, but we feel we have adequate General Fund in the budget.”  Mrs. Chowning remarked that General Fund is just one part of the issue.  She stated that we cannot open the veterans’ nursing home and then have it fail.  Ms. Blackwell agreed.  Mrs. Chowning said the committee will need to know everything, because General Fund is only one part of it, and the remainder of the funding is also very important.

 

Ms. Blackwell noted that the VA per diem amount of $51.38 is a known factor, the only issue is whether a veterans’ Medicaid would offset what is received from the VA.  Mrs. Chowning agreed that this is a known factor.  However, she pointed out, two different stories have been told to the committee, including that the $51.38 per day will absolutely come in for each veteran and that it will only be available for war‑time veterans.  This is another item we do not know, she added.

 

Mr. Fulkerson remarked that Chuck Abbott, Management Analyst, Office of Executive Director for Veterans’ Services, Office of Veterans’ Services, spoke with the individual who is in charge of the per diem program at the United States Department of Veteran Affairs, and he was told that the VA per diem of $51.38 is paid to all veterans, whether they are war-time or peace-time veterans.   He added that he will be attending a conference in Washington, D.C., next week, and stated that he will bring back a signed letter stating this information.

 

Mr. Fulkerson testified that acuity levels for Medicaid are applied to the veteran population in Nevada.

 

Ms. Giunchigliani requested the Office of Veterans’ Services research on acuity levels be expanded to other states besides Arizona and California.  She indicated that it would be helpful to have information from more than just two states.

 

Mr. Fulkerson pointed out that this outlines some of the problems they have encountered while gathering statistics from some of the 97 veterans’ nursing homes across the United States.  Every state has different ways of funding, he added.  Ms. Giunchigliani asserted that she is referring to a population comparison to view the situation from a more regionalized standpoint.

 

Mr. Sias interjected that the basic issue is what the diversification of acuity will be in the nursing home.  He added that the Nevada Medicaid Office pays a set payment per patient day.  How a veteran is eligible for Medicaid, he noted, is not as relevant as the case mix that the veterans’ nursing home will have.  He remarked that the numbers that Medicaid has projected show that the veterans’ nursing home will have a high level of “intermediate care level acuity.” 

 

Mr. Sias stated that when the Legislature chose to build the veterans’ nursing home, it chose to build a veterans’ skilled nursing home.   He noted that the numbers are based on what appeared to be a consolidation of all nursing home levels, which is centered at the intermediate care facility level III (ICF-III).  He testified that they will have very few intermediate care facility (ICF) level residents, at all.  The only reason they are including ICF, he added, is so they might be able to entertain the request of a disabled veteran who qualifies and would like his spouse to live with him.  He remarked that if space provides, and if that veteran can afford to cover the full cost of the spouse to live in the home, the VA allows the Office of Veterans’ Services to do this.

 

Mr. Sias pointed out that another reason for the veterans’ nursing home to admit ICF level residents to the nursing home is that when space provides, they would like to be able to offer short-term or intermediate-term rehabilitation therapy services to qualified veterans. Mrs. Chowning asked how Mr. Sias knew there would be more skilled nursing level residents than ICF level residents.  She asked whether his projections were based on the individuals that are actually on their waiting list.  Mr. Sias replied that this is based on what a person needs to have in order to be qualified to apply for residency in a SNF.  He added that this applies to levels of acuity significantly higher than facilities that are at an ICF level.  To be a resident at the home, he added, an individual must have a physician’s order stating that person needs round-the-clock (24-hour) skilled nursing care. 

 

Mrs. Chowning questioned whether the majority of individuals being accepted into this nursing home are individuals that do not need this higher level of care.  Mr. Sias replied:

 

I’m saying that’s exactly who we are bringing in.  The Medicaid numbers are predicated on us on a lower skill level.  There are two basic levels, intermediate care and skilled care.  The Medicaid numbers are based on the lower intermediate care and we’re saying our numbers are based on the higher skilled care because that’s the facility that we have built, is a skilled nursing facility.

 

Mrs. Chowning asked how many individuals are presently on the waiting list to get into the nursing facility.  Mr. Sias said he believes 151 are on the waiting list.  Mrs. Chowning asked whether there are positively 151 individuals on the waiting list.  Mr. Sias remarked positively, at last count.  Mrs. Chowning stated that some of the individuals on the waiting list have passed away.  Mr. Sias testified that they are maintaining an accurate ongoing list.  Mrs. Chowning asked how many individuals, out of the 151 on the waiting list, need higher levels of care then Medicaid is projecting.  Mr. Sias said they have yet to begin their assessment processes.  He added that in order to be qualified, even to move into a skilled nursing home, a higher level of care must be required.  He repeated that this is a skilled nursing home, not an intermediate care level facility.

 

Mark W. Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, pointed out that the budget currently being reviewing is much different on the revenue side than the previous budget from a few months ago.  He mentioned that there are a number of assumptions being made that could have a dramatic impact on the budget.  He added that the amount of Medicaid revenue that is ultimately budgeted in this account will have an impact, in the long run, on how much General Fund is required.  He stated, “It is my recommendation that Medicaid, the veterans group, the Budget Division, our office, if we’re invited, get together and try to resolve these issues as best we can within the next couple of weeks, so that a proposal that everyone can agree to can be brought forward for committee review.” 

 

Mr. Stevens remarked that it is very difficult for the committee to “play referee.”  He asserted that there are two different groups here that feel that they have accurate numbers, but these numbers are much different.  If the agencies and budget staff can get together, he added, hopefully this can get resolved relatively quickly.  He commented that he does not know how much can be accomplished today, because of the competing proposals before the committee.

 

Mr. Fulkerson pointed out that the framework for that meeting is setup for April 6, and if Ms. Blackwell and Mr. Stevens or his staff can attend this meeting, perhaps the issues will be resolved in a quick manner. 

 

Mrs. Chowning questioned what the eligibility requirements are for receiving aid and attendance program payments.  She added that the committee also needs to know how many individuals will be eligible and what the typical monthly payments will be.  She said the committee will also need to know what the residents will have to pay “from their own pockets.”

 

Mr. Beers asked whether there are 151 individuals on the waiting list, even though 151 may be ineligible to move into this facility.  Mr. Sias replied that 151 individuals are on the waiting list, and they anticipate that one-third of these individuals may not qualify for residency, for one reason or another.  He added that this could be because their care levels are too high or their care levels are too low.  He stated that the industry standard says, “You need roughly three heads for every pillow you want to fill.”  This is because one or two veterans may not qualify or even be alive when the facility is ready to open, he added.  He stated that the assessment process has yet to begin.  He pointed out that, based on letters and phone calls the veterans’ nursing home has received, it is expected that most of those on the waiting list will be eligible for residency in the home. 

 

Mr. Beers questioned when the acuity level for these individuals on the waiting list will be determined.  Mr. Sias replied, “as soon as the applications go out and they come back and we begin the screening.”  Mr. Beers asked whether the veterans’ nursing home conducts a physical examination for these individuals.  Mr. Sias indicated that, as part of the application process, a physician’s statement for each applicant is required.  He added,  ‘We are required to do a pre-admission screening and annual resident review  (PASAAR), which is designed to identify certain levels, as well as to be sure that we’re not in the process of warehousing mental health patients in the nursing home.”  He stated that the veterans’ nursing home will then look at the physician’s order of admission and determine by the diagnosis what their needs are.  

 

Mr. Beers inquired whether there is any practical way to look at this list now to forecast the acuity levels of these patients.  Mr. Sias replied that not only is it not possible to look at the current list, but even after the home is fully occupied it will not be.  He added that while one resident is at the highest acuity level receiving the maximum reimbursement, the next person on the waiting list may be on the low end of the acuity scale.  He added that there is absolutely no way to predict or project a case mix or a payer mix.  Mr. Fulkerson remarked that determining acuity level requires a facility, which they do not have yet and do not have staffed yet.      

 

Chuck Abbott, Management Analyst, Office of Executive Director for Veterans’ Services, Office of Veterans’ Services, asked whether the question on aid and attendance could be re-stated.  Mrs. Chowning reiterated that there are aid and attendance payments and it is being expected that some of the veterans in the home will be able to have those paid every month.  She added, the committee needs to know what that typical payment would be, what the eligibility requirements are to receive those, and how many individuals will receive these funds.

 

Mr. Abbott indicated that the United States Department of Veterans’ Affairs will pay to a veteran, who does not have means and who had wartime service, an annual pension.  He added that, if that same veteran is unable to meet his daily needs and requires assistance in his daily living, he would also be eligible for the aid and attendance program.  Those are the requirements for the aid and attendance program, he added.  He noted that approximately 79 to 80 percent of all veterans fall into this category.  He pointed out that other requirements include that the veteran does not have the means to provide his or her own care or meet his or her own financial obligation, at which time the pension would “kick in” if he or she is qualified.  He stated that the veteran must also have not been dishonorably discharged.  Veterans receiving pensions who cannot meet their daily physical needs, would qualify for the aid and attendance program, he added. 

 

Mr. Abbott pointed out that there are conditions in which a war-time veteran who was disabled because of a service-connected disability, who is at a 100 percent acuity care level, and who cannot meet his or her daily needs, would also qualify for the aid and attendance program.  He added that the aid and attendance program pays approximately $518 per month.  He stated that this amount is over and above what veterans would qualify for, that are “non-war-time” veterans, disabled because of a “non-service-connected” disability pension. 

 

Mrs. Chowning asked how many of the individuals on the veterans’ nursing home waiting list will qualify for the aid and attendance program.  Mr. Sias replied they do not know.   Mrs. Chowning questioned when they will have this information.  Mr. Sias stated:

 

Once the application process begins, we have our application for residency in front of the Attorney General’s  (AG) office currently.  As soon as it comes back, we expect that back hopefully next week, they agreed to expedite it, it goes to printing and then they will go out and we’ll begin to get those back.  The priority for admission will be based on the return of those applications.  And, again, as I stated previously, those applications contain a substantial detailed medical report from the attending physician and that’s when we will begin to know what the acuity level is, but also that same application has a resource component to it that will allow us to determine all of the applicant’s available resources, as well as their obligations, so that we will know from that single document what their acuity level is going to be.  We’ll also know where they are going to be as far as a payer source.

 

Mrs. Chowning asked whether the Office of Veterans’ Services currently has these applications.  Mr. Sias remarked that what they have currently concerning the 151 individuals on the waiting list are only communications from these individuals, such as letters and phone calls.  He explained that they have consistently responded to these communications by saying that a letter of interest, a copy of military separation documents, an indication of residency, and some indication of health condition are required.  Mr. Sias stated that they have not been very successful in getting very much information on the health issue.

 

Mrs. Chowning said, “ So you haven’t been able to send out any applications yet because you don’t have the format approved.  So you cannot even tell us 10 or 20 percent, you just can’t tell us any numbers at all?”  Mr. Sias replied that they cannot.  He reiterated that this is a “moving target.”  When a high-acuity level person leaves, he added, that person might be followed up with a low-acuity person.  He indicated that all they can do is report their “acuity mix” in two years.

 

Mrs. Chowning commented, “You can’t build a budget on future possible numbers…there just has to be some better way of estimating.”  She asked what the targeted opening date is for the veterans’ nursing home.  Mr. Sias replied in early July 2001.  Mrs. Chowning inquired whether they will be able to do “all this interviewing” and have this completed in three months time.  Mr. Sias said that they would. 

 

Mr. Beers said “There has got to be some sort of qualification process to get on the waiting list.”  Mr. Fulkerson said there are qualifications.  He stated they have to be a veteran and they must want to come to the home.  He added that the Office of Veterans’ Services is unable to determine the physical condition of the applicant until that person is actually in the veterans’ nursing home, and at that time the veterans’ nursing home staff will determine physical condition.  He said that part of the reason staff have not sent out applications is that they did not want to generate a lot of interest.  He explained that the first question that is asked is when they can “get in.”  He noted that this is one of the “biggest moving targets” of this whole operation.  Before they start generating too much interest and have people “standing at the door,” the Office of Veterans’ Services wants to know when they can “turn the light on,” he added.

 

Mrs. Chowning asked whether residents will be paying $51.38 per day or more?  Mr. Sias stated that the veterans’ copayment will be based on the veteran’s available resources out of their own pockets.  Veterans who can pay a substantial portion of their cost of care, he added, will be asked to pay it.  He explained that the veterans’ nursing homes’ understanding is that the veteran would be expected to pay a portion of the care.  He said, “Nobody gets a free ride if they can afford to share in the cost of their care.  We will, by the use of that financial document that is in the application, be able to determine what level of participation each veteran will be able to have, but it is just a moving target.”

 

Mrs. Chowning inquired what the maximum amount would be that a veteran might pay.  Mr. Berry stated that a non-veteran admitted to the home, who is a spouse of a veteran, could pay over $5,000 per month.  He explained that this would include the daily rate charge of $150 per day, plus the ancillary charges for pharmacy, lab, or physical therapy services.  Mrs. Chowning asked about a veteran who does not have a spouse.  Mr. Berry said that would depend on their funding sources and whether or not they are on a pension such as Social Security or the Medicaid program.  He commented that veterans on Medicaid are not expected to pay anything.  He stated that if a veteran is on Social Security or a pension, the home would take those funds as payment.  Mrs. Chowning inquired whether a veteran who is on Medicaid would still pay $51.38 per day?  Mr. Berry responded that they would not; Medicaid would pay this portion of the veterans’ copayment.

 

Mrs. Chowning asked whether a veteran could be asked to pay up to $150 per day depending on their resources.  Mr. Berry explained as follows:

 

The $150 would be the daily rate, and of course the $51.38 from the VA per diem would reduce that and then funding sources from the General Fund would reduce that as well.  We try to use the General Fund as a last resource that we have, and any other benefits that they have coming to them, Social Security, and those types of things would also reduce that $150.    

 

Senator Neal asked, if a veteran who goes into the nursing home and has secured retirement benefits and Social Security, whether those payments would also be taken by the nursing home?   Mr. Berry responded that the nursing home would take the daily rate and ancillary charges that applied to that account and deduct these charges, and the $51.38 per diem charge as well as any other sources of military retirement or pension would reduce that charge as well.  Senator Neal questioned whether these individuals are required to “sign over” these income sources when they go into the home.  Mr. Berry said, “No, they would get a monthly bill, just like you would for any other service you have.”

 

Mr. Sias responded that benefits programs are designed to evaluate total obligation of the veteran.  He said that if the veteran has a spouse who is living at home, the veterans’ nursing home will “take all of these pieces into account” and determine exactly what the veterans’ obligations outside of the nursing home are, prior to assessing a charge for the veterans’ residency.  He added that a single veteran, who has no dependants or obligations, and is living in the nursing home, will have all of their sources of income, up to the full daily rate, taken.  He explained that the nursing home would give back to that individual $90 per month for individual spending money, from those funds. 

 

Senator Neal asked how the situation is handled when the veteran has a spouse at home.  Mr. Sias explained that if there is a spouse at home, all of these benefit programs have a methodology to assess how much money needs to be left for the family or the spouse before any of those funds become available to the nursing home.  So, the family is taken care of first, he added, and the nursing home comes second.

 

Mr. Beers, referring to the information technology budget, said the following:

 

If memory serves, as a group that bought the file server two years ago without any workstations, and are planning on buying a compact disc (CD) with all veterans’ administration forms on them instead of the VA website, which has all of the veterans’ administration forms on them for free, they’ve also got a T-1.  I’ve spoken with the Department of Information Technology (DoIT), and DoIT at that time said they do not have an alternative other than a T-1, although a T-1 is more than they need, and I think there may well be some alternate, much more less expensive technology that would be more suited to the scope of data movement that these people are going to be doing.

 

Mr. Beers added that staff needs to take a look at this issue.

 

Mr. Fulkerson said the Office of Veterans’ Services will follow up on this issue and work with the committee staff.

 

Mrs. Chowning asked that Medicaid staff work with Budget Division staff, veterans’ services staff, and the Legislative Counsel Bureau (LCB) staff, in order to get the numbers accurate.  She added that the committee would like the Budget Division to have more than just the General Fund dollar projection available when it comes back in a couple of weeks, including an “over-all” projection.

 

Mrs. Chowning asked that Mr. Sias take part in this meeting.  Mr. Sias responded that he can be a part of it, but his plan was that Mr. Berry would represent the veterans’ nursing home at this meeting.  Mrs. Chowning responded that it was his call, so long as the veterans’ home was represented.

 

Mr. Fulkerson stated that they will “put a full court press on this thing,” to get everyone together and get the issues sorted out.

 

Ed Gobel, Lobbyist, Council of Nevada Veterans Organizations, referred the committee to letters of support from the Air Force Sergeants Association, Nevada Paralyzed Veterans of America, American Wheelchair Veterans, The Women Marines Association, Special Forces Association–Chapter 51, American Merchant Marine Veterans–High-Rollers Chapter, Tuskeegee‑Airmen, Jewish War Veterans of the U.S.A., and U.S. Submarine Veterans of WWI (Exhibit D).

 

Mr. Gobel stated that all of these organizations have expressed their views and support the Council of Nevada Veterans Organizations.  He said, “We as veterans in southern Nevada will not allow this 50 percent, which we have talked about before, of veterans to be put on Medicaid.  What’s been said today is in many ways a disgrace.”  He commented that when an individual goes on Medicaid, basically all of that persons’ income, up to $1,590 per month, is forfeited to the state.  He said he does not believe this is a good situation.  He indicated that he has provided full documentation to the committee, but fails to see the same from the veterans’ nursing home, and he indicated that the agency has been working on this project for over two years.

 

Mr. Gobel stated that he believes this is due to a lack of qualifications of the people running the nursing home.  He commented that the Nevada Office of Veterans’ Services and its predecessor organization did not advise the State Public Works Board, the legislature, or the Interim Finance Committee (IFC) as to what was happening.  He said, “We have a veterans home where now, I don’t think that we can ever do anything with the physical plan to change it, unfortunately.”  He added the veterans’ home has a single commode with a small sink for four people.  He noted it has no shower and a congregate bath.  He stated, “I don’t know how this will work with women veterans, because there will be women veterans; they served also, and I think we need to take care of them also.” 

 

Mr. Gobel indicated he would submit additional testimony to the committee by letter.  He mentioned that there is a VA per diem issue, which involves over a $1 million “hole” in the budget.  He referred the committee to 38 CFR 51.50, a federal regulation, and said it lists the qualifications for a veteran to receive the VA per diem.  He stated that it outlines that every veteran has to have served in time of war.  He testified that he has been told that veterans who did not serve in time of war would not receive the VA per diem.

 

Mrs. Chowning requested that these issues be presented to the committee in writing. 

 

Mr. Gobel said asked what the ramifications of the issues discussed at the hearing would be.  He indicated that he hoped the subcommittee would address the fact that the qualifications of Mr. Sias were misleading.  He added that since Mr. Sias’ emergency appointment two years ago, without the experience level, an application to get information from the VA has had to be done.  He stated that Medicaid in Clark County is not currently prepared for the amount of Medicaid that is currently being put into the budget.  He indicated that this will be a big problem for counties.

 

Mr. Gobel said the following:

 

Some of the counties will go bankrupt.  As I understand Medicaid, and I’m not an expert, anyone who makes $806 or more per month, the county must pay up to the next threshold level, and the counties are not prepared to do that, nor have they been contacted to do it.  I will copy that document containing this information to the committee.

 

Mr. Gobel stated that these are all issues that address people, and the ramifications of lack of qualifications of people running the Nevada Office of Veterans’ Services and the veterans’ home.  He pointed out that this has resulted in a question of how to provide for the extra staffing in the budget, when you have four people to a single commode.  He pointed out that someone must take those people to the bathroom, but there is not adequate staffing. 

 

Mr. Gobel remarked, “When you put in the budget that the veteran will pay what he can or cannot pay… how do you budget for that?”    

 

Mrs. Chowning advised that before this budget closes, the committee will be asking for quarterly progress reports to the IFC that will advise everyone on how everything is going.  This is a form of notification that will be absolutely necessary, she added.  She stated that this will give great assurance to everyone and will be an accurate form of monitoring for the citizens of Nevada.

 

DEPARTMENT OF INFORMATION TECHNOLOGY

 

DoIT Director’s Office – Budget Page DoIT-1 (Volume 1)  

Budget Account 721-1373

 

Terry Savage, Director, Department of Information Technology, said in summary of the departments overall positions situation, there are approximately 10 unfilled positions, as opposed to 50 just 15 months ago.  He noted they have improved their retention and recruiting.  He pointed out they have no vacancies in the computer facility.  He said he believes they have done a very good job of filling their existing positions, and do not believe any new requested positions are “peripheral.”

 

E-710 Replacement Equipment – Page DoIT-4

 

Mr. Savage outlined that enhancement E-710 is in accordance to the department’s normal replacement policy for computer equipment. 

 

E-904 Transfer from Application Design – Page DoIT-4

 

Mr. Savage said enhancement E-904 is the continuation of the position of Software Systems Executive for the Welfare Division’s Nevada Operations Multi Automated Data Systems (NOMADS), whose term expires June 30.  He added that this continuation would be at a reduced salary level.  He explained that this position primarily oversees software projects within the Department of Human Resources.  He noted that it is funded from several different budget accounts within the Department of Human Resources. 

 

Mr. Savage explained that the primary purpose of this position is to coordinate among projects in order to obtain efficiencies among them.  He pointed out that specific requirements for this position have been previously submitted to committee’s staff.

 

Mrs. Chowning asked whether justification had been provided to the committee’s staff to support the need of a dedicated project manager, and delineating what would happen if this position were deleted.  Mr. Savage commented that the funding issue had been resolved, which was actually a typographical error in the department’s earlier presentation.  He added that the funding for this position comes from the Department of Human Resources.   He indicated that in FY 2002, 25 percent of the funding will come from the director’s office budget, 30 percent from the Welfare Division budget, 35 percent from the Division of Health Care, Finance, and Policy budget, and 10 percent from the Division of Child and Family Services (DCFS) budget.

 

E909 – Transfer to Computing Unit – Page DoIT-4

 

Mr. Savage stated that decision unit E-909, which has no net cost, is the transfer of a position to the Computing Unit budget account.  

 

Mrs. Chowning inquired why this position is needed.  Mr. Savage said the basic reason is that the different programs within the Department of Human Resources have increasingly overlapping requirements, and there are opportunities within those programs for efficiencies.  He stated, “For example, if a program could share the NOMADS database, rather than create an entirely new database, that would be a significant cost savings over all.”  He explained it makes much more sense to coordinate the position on a department-wide basis, rather than in an isolated way.  He said he believes the net savings from this position, in terms of what would be spent for duplication and losses in the system in inefficiencies, would be substantial. 

 

Mrs. Chowning asked whether the Department of Human Resources agrees with this.  Mr. Savage said he has worked very closely with Charlotte Crawford, Director, Department of Human Resources, and she agrees, and the difference in funding has been resolved. 

 

Mrs. Chowning inquired how this position will help regarding DoIT’s current management structure.  Mr. Savage replied that the specific purpose of this position is not to be focused narrowly on any specific project, and typically a Project Manager is specifically focused on one project.  This individual has the charter, he added, of looking across projects and looking for the efficiencies and coordinations that are available that way.

 

Mr. Savage added the following:

 

And, also, to look forward to not just the Health Insurance Portability and Accountability Act (HIPAA), but the additional federal requirements that you always come across.  So that we are anticipating those and planning for them in advance in terms of the technical requirements, rather than just be in reactive mode in being stuck at the last minute and trying to catch up.

 

Mrs. Chowning asked whether the cost is correct at approximately $100,000 per year.  Mr. Savage said that it is.

 

Mrs. Chowning requested information on the department’s billing system revision.  She added that the committee needs a firm delivery date for the documentation within the next few weeks. 

 

Diane Jungwirth, Chief Assistant Budget Administrator, Budget Division, Department of Administration, said they have not completed the identification of “how each individual item is going to be funded.”  The reason, she stated, is that when DoIT’s budgets are closed, the Budget Division will be going through this entire process again, readjusting all of the budgets.  This would also be true, she pointed out, if the Legislature closes DoIT’s budget with significant changes.  She commented that the rate model her office ran and the adjustments submitted do reflect the Governor’s budget.  She added, “If you guys make significant changes, then we’ll be going through that again.”  She stated that this is why they did not balance everything with the revenues.

 

Ms. Jungwirth commented that as a general “rule of thumb,” anytime DoIT requests something, approximately 50 percent of the funding comes from the General Fund.  Mrs. Chowning inquired whether this documentation could be given to the committee’s staff by April 16?  Mr. Savage asked which documentation specifically.  Mrs. Chowning replied they need the delivery date of the entire revised billing system.

 

Shelly Person, Chief, Planning and Programming Division, Department of Information Technology, pointed out that in discussions with Ed Perry and David M. Griffith and Associates (DMG), a company that is now called MAXIMUS, DMG has committed to provide by mid-April, documentation to respond to Mrs. Chowning’s request.  She added that this was confirmed two days ago.

 

E-275 Working Environment and Wage – not included in The Executive Budget

 

Mr. Savage stated that the new Administrative Services Officer (ASO) that is being requested is specifically to “beef up” the fiscal staff.  In their current overall organizational chart, he added, the entire administration group is approximately 14 percent of the total staff and the fiscal staff is approximately 20 percent of that 14 percent.  He said DoIT currently has a lot of control of the technical issues within the department, and is now looking more at fiscal and administrative issues.  He stated, “There have been a lot of bugs crawling under that rock, and we’re looking at some additional horsepower over the next several years to get all these issues cleaned up.”

 

Mr. Savage said they do have a breakout (Exhibit E) of the specific duties of the proposed position and how the fiscal organization is proposed to be broken out.

 

Mrs. Chowning asked what was the department given last session and what happened.  Why was the department not able to accomplish that with the position received and why does the agency now need not one, but two people, to accomplish the same task?

 

Ms. Person replied they were given 1 Management Analyst position last session.  That person was hired, she added, with the specific duties proposed at that time to support the cost allocation plan.  She noted that other duties recommended at the time of requesting that position were specifically to develop, in two routine cycles of each fiscal year, a forecast plan in advance of each fiscal year, and an actual cost plan at the close of each fiscal year.  She commented that that position was hired, but those tasks were not completed. 

 

Ms. Person pointed out that regarding specific items the fiscal unit supports, there have been many changes over the last few years.  Among the changes, she noted, are continual advancements in the types of services DoIT offers its customer agencies, and those changes have increased the complexity of the billing function to support the services.  She said changes have also taken place in their billing interfaces between the individual service units within DoIT and the billing process.  She added that these changes have increased the complexity and requirements placed on the fiscal unit.  She testified that the fiscal unit has to support the interfaces coming in from several new applications that have been added.

 

Mr. Savage mentioned that the “bottom line” on the situation is that having one Management Analyst to do those tasks was a drastic “under-scoping” of the problem.  He pointed out that the entire issue of dealing with billing and the rate model system is a much more difficult problem than the department had envisioned at that time.  He noted that they have a much more complicated situation financially to deal with than either a regular agency or a private business.  He indicated that they are trying to run a business within the context of a government.  He explained that if a private business makes more than it spends, that is good; if a regular state agency has funds left at the end of the budget year, it did good, but if DoIT is either over or under, it has essentially done a “bad thing.”  DoIT’s challenge is to hit a target and not be significantly over or under, he remarked.

 

Mrs. Chowning asked whether the department is able to reorganize existing positions to accomplish this task.  Mr. Savage stated that this is actually a reclassification of an existing position.  Mrs. Chowning agreed, however, they are also asking for an additional ASO III.  Mr. Savage remarked that it is an additional fiscal position, but it is an existing position within the department that would be reclassified.

 

Ms. Person commented that with the current staff in the fiscal unit, the department cannot support all of the tasks that need to be accomplished every month.  Mrs. Chowning asserted that the committee will need to look at this and make that decision.  Mr. Savage indicated that the department does not want to be in the position of not having done this work again, and he believes this is a solution to the problem.

 

Ms. Person testified that she has a specific detailed breakdown of the duties associated with each of the ASOs the department is proposing and will give it to the committee staff.  Mrs. Chowning suggested she give it to Jim Rodriguez, Program Analyst, Fiscal Analyst Division, Legislative Counsel Bureau, because the committee does have concerns.

 

Mrs. Chowning requested that this information be broken-out by how much work will be given to each of these positions so the committee can better analyze it.  Ms. Person responded that it is currently broken-down to include basic categories of supervision, customer billings, and allocation plans. 

 

Mrs. Chowning said that the proposed rate for Personal Computer (PC) Technicians is $61.80 per hour, even though this can be accomplished through contract services for significantly less.  She added that the long distance telephone service is 12 cents per minute, and yet she believes they can get it for 6 cents per minute and approximately $3 per month.  She mentioned that web-hosting rates are significantly higher, and the committee needs to know why.  She asked whether state agencies are required to pay these rates, even though they could get lower rates somewhere else.  She also asked, “What is it going to take to make your rates more competitive?”

 

Mr. Savage commented on the telephone rates.  He said these rates were constructed based on the data that existed at the time, but since then, they have completed the installation of the southern private branch exchange (PBX) unit in the Las Vegas area.  He noted that this will allow the department to essentially have all the long distance calls within state government be internal to DoIT’s system. 

 

Mark Blomstrom, Deputy Director, Communication and Computing Division, Department of Information Technology, said that the existing rate structure reflects a billing for the costs of intrastate (inside the state) calling to a large degree.  He explained that with the completion of the Las Vegas portion of the PBX system and the linkage of that to the Carson City portion, there is now a state PBX system in the North and the South and the department is on the verge of realizing reductions in costs.  He pointed out that there are three fundamental factors.  First is that a “piece” of the Carson City PBX has been included in the rate study for depreciation purposes; second, as of March 2001, DoIT is just now realizing the savings that are due to the elimination of some intrastate calling costs that have not been reflected previously in their billing history; third, as of January 1, 2001 there is a new contract in place for out-of-state service.  He said this lowers all long distance rates, which lowers the cost. 

 

Mr. Blomstrom noted that they do not, as of yet, have any historical data in this area.  The first billing period they actually have, he mentioned, is from February 2001.  He pointed out that Ed Perry and DMG, in putting together the cost pool for this, used historical data.  He outlined that these three factors are combined to give a picture of more costs than are expected in the immediate future.  He added that DoIT is looking at several months billing records prior to the upcoming fiscal year and whether or not they see what is expected, there will be considerably lower costs for telecommunications.  The upshot of this, he noted, is that the anticipated 12 cents per minute rate is not currently accurate and DoIT would like the opportunity to revise it downward before the start of the upcoming fiscal year.

 

Senator Neal questioned whether the rate Mr. Blomstrom is speaking of, is determined by the department.  Mr. Blomstrom replied that it currently is determined through a cost pool process and then approved by the Budget Division and the LCB as a rate for the upcoming fiscal years.  Senator Neal asked whether the department is the entity that gathers the information for making that determination.  Mr. Blomstrom replied that it is.  Senator Neal stated, “Therefore you would essentially know all of the factors that would come to play as to whether or not you would have an increased rate or a decreased rate.”  Mr. Blomstrom remarked that they would.

 

Senator Neal commented that the main job of the committee is to establish the policy and the mission and making sure agencies have the necessary people and resources to carry that out. 

 

Mrs. Chowning inquired whether a study had been accomplished that was discussed at the last committee meeting.  Mr. Blomstrom stated that they had had an open question regarding cost savings on the PBX system and referred the committee to a handout (Exhibit F).  He said the handout identifies an example situation that would realize cost savings.  Mrs. Chowning asked whether these numbers outlined on Exhibit F would translate into what will happen for the department.  Mr. Blomstrom replied they are just now seeing some cost savings, and cannot report more than a week or two of cost savings.  He noted they do have one month of indications of cost savings on long distance billing and the reduction is significant at this point.

 

Mr. Blomstrom pointed out that it is still premature to give exact figures.  He stated that Exhibit F identifies a situation, which would be typical of Carson City, comparing a savings of $9,900 over a comparable commercial service.  He outlined that this would be for an agency using the Carson City state PBX.  Referring to the northern and southern connections, he said they have eliminated a number of charges within the telecommunications area, notably intrastate charges.  He stated that they are essentially eliminating the intrastate calling charge from north to south.  He pointed out that the user departments will see this as a cost savings.  He reiterated that without historical records he is unable to say exactly what that savings will be.

 

Mr. Savage stated that, in summary, the department does expect telecommunications costs to go down substantially, and when they have several months of real data, DoIT will be able to adjust those rates for the state for the next fiscal year. 

 

Mrs. Chowning commented that it appears that “good news is coming.”  She said this savings, as outlined on Exhibit F, would be $17,820 over comparable commercial service.  With savings like these, she noted, agencies would not want to seek other service.  Mr. Savage explained that the overall billing structure, prior to 1998, was “guesswork and chaos.”  He said by comparison, the Fiscal Year (FY) 1998 through FY 1999 biennium was not entirely unstructured and in the FY 2000 through FY 2001 biennium it was fairly sound.  He pointed out that in the later biennium they did discover substantial flaws in implementation.  He indicated that the FY 2002 through FY 2003 biennium appears to be conceptually sound and will be implemented properly.

 

Senator Neal remarked that he believes the division is demonstrating both knowledge of the concept and an understanding of the operation. 

 

Mr. Blomstrom drew attention to a packet (Exhibit G) providing information on phase II of the department’s web service projection.  He stated that approximately 60 percent of 168 million Americans currently use the web, according to Nielson/NetRatings.  He mentioned that Nevada is ahead in total household personal computer (PC) Internet access, at approximately 65 percent versus 53 percent nationally.  He said that the attitude of Nevadans towards technology, specifically Internet access, is running ahead of “national sentiment in terms of positive approach.”  He noted that approximately 58 percent of computer awareness and knowledge is not only required for careers, but is also required in our schools for education. 

 

Mr. Blomstrom reiterated that Nevada is a very “computer-aware” state.  He said there is a high degree of demand coming up for “e-government” type services.  He remarked that, as a result of the Governor’s executive order, there are approximately 200 state government websites that came about in the last two years.  He commented that these sites must be maintained, they must be updated, and most of them must be improved.  He said that these websites have been graded, and most of them are Type-1 websites, which is a “passive” web-page, also known as “brochure-ware.”  Many of the websites within the state, he noted, have “failing” grades.  He said we need to upgrade those, and this is part of the upcoming work the division foresees in the immediate future.

 

Mr. Blomstrom stated that DoIT additionally expects the number of websites to grow and is projecting between 100 and 150 more websites by the end of FY 2003.  He said the largest area of growth, representing the largest area of work for them, will come in the web-enabled applications.  He noted that these are the uses behind the websites.  A web-enable application, he said, allows a person to “do things online,” such as register a vehicle.  He pointed out that this is a great area of interest with many agencies.  He added that Nevada state government currently has seven web-enable applications.

 

Mr. Blomstrom pointed out that the direction DoIT is headed with web-services is exemplified by three words: security, reliability, and consistency.  He said the security is foremost amongst these and the department needs to make sure the websites are as “hack-proof” as possible, so those websites are accessible by the public and not vandalized.  He stated “reliability is key to us, in the sense that we need to make the sites available on a ‘7 by 24’ basis, and the logic behind that is the consumers expect it and that is how they want to see ‘e-government’ conducted in the future.”  He said that when they have a website go down because of a hardware or software failure, it creates a noticeable hue and cry.  He pointed out that DoIT has this problem in the sense of failure, to a degree, with commercial information systems plans (ISP), which they have just seen lately.  He said they have had three examples in which they have bailed out commercially developed web applications and put those websites on the state web service.  Consistency, he added, is very important to implementing standards for websites by giving the consumer a level of performance and quality. 

 

Mr. Blomstrom, referring to page 3 (Web Services Comparison) of his packet (Exhibit G), pointed out that DoIT is offering a large number of services.  Most of the services are used and are needed by web users at some point, he added.   He explained that this comparison shows three in-state and three out-of-state service providers and what services they provide.  He added that the types of service providers, or the commercial ISP’s, vary greatly in what they offer.      

 

Mr. Beers, referring to page 3 of Exhibit G, said the disk limit transfer indicates “unlimited,” and by comparison, his most current rate chart indicates $353 per month for 101 to 1000 sessions, and $95 per month for 50 megabytes of storage.  He said this contradicts what is outlined in Exhibit G. 

 

Delbert Collins, Computer Systems Programmer IV, Department of Information Technology, stated that the amount of data transferred is not limited.  He said that DoIT bases its billing on session count.  He added that the standard average website transfers 15 kilobytes over a month, and if it is used heavily, 3 Gigabytes of data.  Therefore, he added, DoIT does not limit data transfer; they bill based on sessions.  He pointed out that agencies can transfer as much data over the Internet as they need, and DoIT will not restrict it.  He noted that billing is based on the number of users that actually come to the site and ask for data.

 

Mr. Blomstrom stated that the current rate chart available, to which Mr. Beers was referring, has recently been modified by the Budget Division.  Mr. Beers asked whether $73 worth of “band-width” per month would be used for up to 100 sessions.  Mr. Blomstrom said that is correct for the base number.  Mr. Beers said, “So a 15 kilobyte website, which is fully downloaded 100 times, …I can’t get to $73 of ‘band-width’ consumed, or am I wrong?  Mr. Blomstrom responded that he did not understand.  Mr. Beers reiterated that he is trying to figure out how they derived a base rate of $86 per month. 

 

Mr. Beers stated:

 

The document I have in front of me says $73 per month for the agency web services billing rate for FY 2002 to FY 2003; 10 megabytes of storage for $6 per month; 100 sessions per month for $7 per month.  $7 per month for a 100 sessions, I can start to add those numbers up and get close.  $6 for 10 megabytes of storage, I cannot get close, and I understand you did not create your rates.  What I am looking to find out is what is the justification for this, and then how do we get to the $73 per month for whatever?  You’re not going to get very many customers for $86 per month for a ‘base start‑up’ website.

 

Mr. Blomstrom stated that the base rate includes the domain name at $37.50 per year.  Mr. Beers said that is approximately $3 per month.  Mr. Blomstrom replied that this is for maintenance.  He explained that the domain-name charge essentially covers a basis of infrastructure to support that domain name and the registration.  He mentioned that on top of that are the base levels up to 10 megabytes of storage and 100 sessions per month.  This would all be included to add up to $86 per month, he added.  He said this would define the basic or small-size-website user.

 

Mr. Beer commented that this is priced unrealistically high.  He said he does not know what infrastructure costs are included with the $73, but he does not believe it could possibly be supporting only the web effort.  Mr. Savage noted that this cost includes the security portion as well.  He added that, to some extent, it supports the business stability question, the fact that they are not going to go out of business. 

 

Mr. Savage commented that what the department would like to look at for the long term is finding security requirements, business stability requirements, and “look and feel” consistencies.  He added that these standards are unfortunately not in place.               

 

Mr. Blomstrom mentioned that, in the base rate, the department also includes development time and maintenance time.  Mr. Beers stated that this would make a big difference.  Mr. Blomstrom said we have not made that very clear, but we have chosen to go this route out of necessity because through DoIT’s recent experience the department knows that maintaining websites is not just “putting them up and getting them established on the site.”  He explained that it also includes refining, especially during the first year or two when there is a high degree of continual maintenance.  He said there are many hours involved in development of these websites.  He mentioned that these processes are all included and spread throughout this rate.

 

Mr. Beers questioned whether there is any charge for HyperText Markup Language (HTML) programming.  Mr. Savage said there is not for basic service.  He added that this is included in the rates, however, if someone wanted an extensive, searchable, and updateable database, that would be an additional programming charge.  He said the price includes basic content development and basic content maintenance.

 

Mr. Beers said this makes more sense.  However, he added, for a “Type 1” website, which is essentially the first three months of a permanent website, time would need to be invested into the site.  He added that after that point in time, the investment is not needed.  Mr. Blomstrom commented that DoIT has found that not only a certain amount of development time is spent putting in new websites, but, there is a high degree of maintenance required up to the first year, to update that site.  He stated that this is a cost the department is incurring.

 

Mr. Beers inquired as to what the second year of maintenance requires.  Mr. Blomstrom testified that maintenance should taper off in the second year, outside of the continual maintenance, which is included in the customer’s cost.

 

Mr. Beers replied:

 

If I were a department head, I would send my Public Information Officer (PIO) home for two days with “HTML For Dummies” and I would go rent something for $30 or $40 a month, and not go through you, save a ton of money, have a more responsive website, because I can see the person who will be updating it.  In addition, it would be my contention that I mentioned several times from up here, that I can take a literate person and make them a webmaster in a weekend, and it will take me four years to take a computer guy and make them a webmaster.  Because they are missing the element of, sometimes, literacy.  Far more important, ….you guys all know HTML, pretty simple stuff, the content is the key and you’re an extra layer between the generator of the content and the consumer of the content.   You’re not familiar necessarily with the content that you’re handling.

 

Mr. Blomstrom stated that he would not disagree.  However, he added, they do have some experience with agencies doing their own programming and maintenance.  He mentioned that these agencies have clearly chosen not to and do not want to get into this, and they are passing information from the Management Assistant directly to DoIT for posting. 

      

Mr. Beer asked whether there is another rate structure that he is not aware of for the agency that wants to do its own coding. 

 

 

 

 

 

Ed Perry, Consultant, Department of Administration and Department of Information Technology, said he worked on this rate study.  He commented that the $73 per month is approximately 8 to 10 hours of labor support a year for the website.  He said this is a relatively modest level of maintenance as agencies bring forward new material, hopefully created by literate people, for a programmer to integrate into the database to make it operational.  He stressed that the point is that the department does not have a history in this area and they envision it going forward with baseline support of staff to support a small web page.  Perhaps in two years, he added, they will have a better picture on how to price this out. 

 

Mr. Beers stressed that his concern is with the department’s rate starting at double the market rates and potentially being ten times the market rates. He said a realistic history will never be developed on which to base future decisions.  He added, “If I were a department head, I would just simply go around you.  In fact, if I were a tax payer, I would write my department heads and tell them to go around you.”

 

Mr. Savage responded as follows:

 

In the long term, again, if the information systems plan (ISP) that an agency chooses addresses the security issues correctly and the PIO that they send home is not only capable of doing HTML programming, but capable of evaluating the security characteristics of the ISP and is also completely trained in terms of the “common look and feel” wanted for state website, and that they have been able to evaluate the business stability of the site and that that is consistent.  As long as they could actually do all that, that would actually be fine.  What I anticipate is that we will, over this coming biennium, will not only develop those standards, but, as I say, this rate-model is evolving, is not perfect, it’s better than it’s ever been before, I expect that the next version will have separate rates.  They will be for agencies that want to go out and do this, as long as they meet the standards, then I believe that people can do that, I’m not saying it’s impossible.  But, once that’s developed, I would support having a separate rate structure for people who want to do their own content management and their own site selection.”

 

Mr. Savage pointed out that in this particular cycle they did not have the baseline data to do these things.  Mr. Beers asked whether, in the absence of the “look and feel standard,” an agency head is free to go out and do what he has suggested.  Mr. Savage indicated that it depends upon what the security committee comes up with, and whether there is a sensible evaluation.  He added that these standards must be set, and for today he would say no.  He said once we have a mechanism for evaluating whether they meet the security standards, they meet the business reliability standards, then “I wouldn’t have a problem with that; but we’re not quite there yet.  We still have to come up with that, and develop that and make it available for everybody to be able to do that evaluation.”

 

Mr. Savage stated, ”A lot of computer people are completely clueless when it comes to security.”  He added that he has a defense industry background, the departments’ security officer is ex-military, and Mr. Collins has experience with security as well.  He reiterated that many computer people do not have this experience and the ability to create a credible, functional website is entirely unrelated to the ability to evaluate security considerations.  He added that “look and feel standard” is another concern, but the department expects to address it. 

 

Mr. Savage commented that they hope to set up standards so that if an agency were to chose to meet those standards on their own, rather than using the service of DoIT, that would be fine.

 

Senator Neal said, “To deal with the requirements over and above a common website, would have an added cost to it and as you were just saying, if Mr. Beers had part of his knowledge base there, the military concept of the way they do this, and you know that that cost would be tremendously higher.

 

Mr. Savage stated the following:

 

Again, our intention is to objectively set the standards so that whether an agency wants to do that, and to be quite honest, whether it is true that this can be done cheaper externally and commercially, we should evaluate that, and whether this is not a service that we should provide.  Then we should make that decision on a statewide basis rather than on a ‘piece-meal’ basis.  That’s not our judgment at this time, but we do expect to look at that over the course of the next biennium.

 

Mr. Beers commented that the other problem is the agency that goes out and gets space on an “outside server” and has its PIO do the site, the money that will be spent on the “outside server” is essentially wasted taxpayer money.  He added that this is because it would otherwise cost DoIT virtually nothing, since DoIT has the existing infrastructure to host that site.

 

Mr. Savage indicated that this is the reason DoIT does not encourage people to go out on their own over the next two years.  He said that is why the decision needs to be made whether DoIT is going to be in the “website and server provision business,” and people within the state will use it, or whether they will make the decision that DoIT cannot be competitive on a price basis with private industry and not offer that service at all.  He added it should not be made on an agency‑by‑agency basis.   He testified that DoIT does not currently have the choice to simply “pull out,” so the plan is to offer an ISP service that DoIT believes, over the coarse of the biennium, can become competitive with private industry standards.  He stated, “If we cannot, then we should look to not providing this service at the next budget cycle.”

 

Mrs. Chowning requested that DoIT work with the committee staff on these issues, because the committee still needs workload projections and justification.  Mr. Savage agreed to work with staff.

 

 

 

 

 

 

 

 

 

 

 

 

Mrs. Chowning adjourned the meeting at 11:00 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Debra Petrelli

Committee Secretary

 

 

 

APPROVED BY:

 

 

 

                       

Vonne S. Chowning, Chairwoman

 

 

 

DATE:           

 

 

 

 

                       

Senator Lawrence E. Jacobsen, Vice Chairman

 

 

DATE: