MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
April 9, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:03 a.m., on Monday, April 9, 2001, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator William R. O’Donnell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Michael J. Chapman, Program Analyst
Rick Combs, Program Analyst
Mindy Braun, Education Program Analyst
Bob Atkinson, Program Analyst
Jennifer Ruedy, Committee Secretary
GUEST LEGISLATORS PRESENT:
Senator Dean A. Rhoads, Northern Nevada Senatorial District
OTHERS PRESENT:
Judge William F. Dressel, President, The National Judicial College
Judge Charles M. McGee, Second Judicial District Court
Chris Barrett, Lobbyist, The National Council of Juvenile and Family Court Judges
V. Robert Payant, Lobbyist, Catholic Legislative Liaison
Michael J. Franzoia, Mayor, City of Elko
Ron Remington, President, Great Basin College
Carl Diekhans, Vice President for Administrative Services, Great Basin College
James T. Richardson, Lobbyist, Nevada Faculty Alliance
Rick C. Bennett, Lobbyist, Director, Government Relations, University of Nevada, Las Vegas
Donald H. Baepler, Director, Harry Reid Center for Environmental Studies, University of Nevada, Las Vegas and Marjorie Barrick Museum of Natural History, University of Nevada, Las Vegas
Dr. Jane A. Nichols, Chancellor, System Administration Office, University and Community College System of Nevada
Daniel G. Miles, Vice Chancellor, Finance and Administration, University and Community College System of Nevada
Berger “Buzz” B. Nelson, P.E., Assistant Vice President, Facilities Management Department, University of Nevada, Reno
Robert Dickens, Lobbyist, Director, Government Relations, University of Nevada, Reno
Dr. Rita Huneycutt, Interim President, Truckee Meadows Community College, University and Community College System of Nevada
Stephen Salaber, Assistant Vice President, Administrative Services, Truckee Meadows Community College, University and Community College System of Nevada
John O. Swendseid, Bond Counsel to the University and Community College System of Nevada
Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration
Senator Raggio asked Gary L. Ghiggeri to present the current progress report, (Exhibit C) for the committee.
Gary L. Ghiggeri, Senate Fiscal Analyst, stated The Executive Budget has been completely reviewed. He pointed out seven budgets are scheduled for additional review this week at a meeting of the Joint Subcommittee on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Means. Fifty-five budgets have been closed in the Senate Committee on Finance, while fourteen budgets have been closed in subcommittees for a total number of 69 closed budgets. He said there are currently 161 bills in committee, of which only two are Assembly bills. Six bills have been processed and two have been indefinitely postponed, he added. He pointed out there are twenty bills currently scheduled for review this week.
Senator Raggio noted 169 bills are currently in this committee, and 75 have been heard. He indicated all senators should have received a notice to review the bills they introduced that have been referred to the Senate Committee on Finance to evaluate whether any of those bills might be withdrawn.
Senator Raggio opened the hearing on Senate Bill (S.B.) 437.
SENATE BILL 437: Makes appropriation to National Judicial College to assist in securing public and private grants and other funding for support during 2001-2003 biennium. (BDR S-1371)
Senator Raggio stated the endowments provided for the National Judicial College and the Louis W. McHardy National College of Juvenile and Family Justice were reverted to the state during the last session. He added that the Governor is proposing to continue the sum that would have been realized from those investments through an appropriation from the state General Fund. He pointed out S.B. 437 provides $600,000 to The National Judicial College.
Mr. Ghiggeri provided a handout of supporting documentation for S.B. 437, S.B. 438, and S.B. 460, (Exhibit D).
Judge William F. Dressel, President, The National Judicial College, stated the proposed appropriation is essential for the college to obtain other funding. He stated the primary purpose of the college is to educate judges in Nevada and nationwide. This bill will enable the college to continue to bring judges to Nevada and to continue its outreach programs.
Senator Raggio welcomed Judge Dressel on his first occasion to appear before the committee and encouraged him to discuss the activities of the college in greater detail.
Judge Dressel responded the college is completing its thirty-eighth year of existence. He noted they are located on the campus of the University of Nevada, Reno, (UNR) and conduct about 54 courses on site. He said, “It is a wonderful tribute to the State of Nevada to have that facility to educate judges.” Judges from across the nation and the state attend their courses, which he believes are rigorous and make an impact on the advancement of justice, he commented.
Senator Rawson asked why this college couldn’t be included within the University and Community College System of Nevada (UCCSN) to allow formula funding in lieu of special appropriations every legislative session. He acknowledged past arguments: numerous out-of-state students and shorter periods of study.
Senator Raggio commented Judge Dressel is probably not the appropriate person to direct that question to. He said he hoped the state’s financial situation would eventually improve to the point where the endowment could be re-established for both The National Judicial College and the Louis W. McHardy National College of Juvenile and Family Justice thereby eliminating the need for the appropriations. He added it is important to maintain some autonomy from UCCSN.
Judge Dressel said The National Judicial College is working to stretch their funding farther while making a significant impact through the programming.
Senator Raggio inquired the total operating budget of The National Judicial College. Judge Dressel responded the budget is approximately $6 million, which includes $1.5 million in donated time. He noted, although some specialists such as scientists, lawyers, and university professors receive honorariums for their work, the majority of their faculty is volunteers. Pursuant to Internal Revenue Service (IRS) regulations, the college has tracked volunteer time and applied a dollar value to it, he added. He indicated the college does not have permanent faculty, but it does have limited permanent staff such as program attorneys and course administrators.
Judge Dressel commented Richard Morgan, Dean, William S. Boyd School of Law, University of Nevada, Las Vegas, (UNLV) has agreed to cooperate as an additional resource to keep The National Judicial College’s courses current. He indicated the college has made many successful attempts to partner with other state entities.
Senator Jacobsen said he recently visited the college for the first time, and he was impressed. He noted participants from throughout the nation were there and attested to the quality of courses the college provides. He asked for further discussion of how the $600,000 appropriation would be spent.
Judge Dressel responded they use some of the money to pursue grant funds to create new courses or as seed many for recruitment efforts. He said the funds are often used to help other states locate funding resources to enable them to attend courses.
Senator Raggio closed the hearing on S.B. 437 and opened the hearing on S.B. 438.
SENATE BILL 438: Makes appropriation to Louis W. McHardy National College of Juvenile and Family Justice to assist in securing public and private grants and other funding for support during 2001-2003 biennium. (BDR S-1373)
Senator Raggio explained S.B. 438 is an appropriation to Louis W. McHardy National College of Juvenile and Family Justice in the amount of $303,600.
Judge Charles M. McGee, Family Court Judge, Washoe County District Court, invited Judge Dressel to join him at the table as a symbol of collaboration between the two. Judge McGee stated he has worked closely with Dean Robert Payant, for the past ten years and with Judge Dressel for the past nine months to collaborate efforts to provide quality education to judges. V. Robert Payant is the immediate past president of the National Judicial College, formerly a dean and currently a lobbyist. He explained the National Council of Juvenile and Family Court Judges is a membership organization and The National Judicial College “has a residential or tutorial aspect to it.” He provided a handout to the committee (Exhibit E).
Judge McGee pointed out that over 1500 people attended the national conference on juvenile justice, which was held three weeks earlier at the Sparks Nugget. He stated the National Council of Juvenile and Family Court Judges has become:
the leading standard bearers in the United States in the area of domestic violence under Mary Holford, in the area of permanency planning under Mary Mentaberry and in standards for juvenile delinquency. These are publications and best practices. They have resulted, for example, in the reduction of the number of children in foster care in Chicago from 45,000 to 13,000. It has reduced the number of kids that are in long-term care in Nevada by 100 percent in the past year.
Judge McGee commented the patrons of their services are not typically wealthy. The conferences held in major cities such as Miami, New York, San Francisco, and Los Angeles are very expensive for them to attend while Reno offers more affordable accommodations for patrons to attend their conferences, he said. He indicated he will promote “the twin resources of the National Council and the National Judicial College” available within affordable settings for attendees.
Senator Raggio asked where the National Council of Juvenile and Family Court Judges is headquartered.
Judge McGee responded it is located on the campus of the UNR within the Louis W. McHardy building. He added the council has outgrown the facility.
Senator Raggio inquired what collaboration had occurred between the two institutions thus far.
Judge Dressel responded they are in the process of developing joint programming and seeking joint funding. Judge Dressel commented he visited with Robert A. Stein, the Executive Director of the American Bar Association (ABA), approximately five weeks ago. He explained Mr. Stein introduced him to a couple that had just donated $1 million to the ABA’s section of domestic relations to study what is happening to children in the domestic relations court. He said the couple noted children have representatives in juvenile courts but not in the domestic relations court. He commented the people told him he is free to use the funds at his discretion but they wanted his efforts to include the National Judicial College. He commented he intended to include the National Council of Juvenile and Family Court Judges in his programming efforts. He further indicated his willingness to share the use of the National Judicial College’s courtroom and classrooms with the national council.
Senator Raggio stated the facilities at the National Judicial College are “state-of-the-art,” and should be fully utilized.
Judge McGee stated he has previously conducted his drug court in that courtroom and will do so again shortly.
Senator Jacobsen stated he was a member of the 1999 to 2000 interim Study of the System of Juvenile Justice in Nevada, which met in Santa Fe, New Mexico, on one occasion. He said he was very impressed with their system, which allowed for peer review for the juveniles. He felt the system was more comprehensive in addressing juveniles.
Judge McGee stated Reno recently initiated a team court similar to what Senator Jacobsen mentioned. He said there are many innovative ways to use “kids to judge other kids” in nonfelony cases. Judge McGee pointed out the following:
The fear of weapons and serious chronic crime has eroded the jurisdiction of the family court when what we ought to be doing is devoting real intense resources to those kids so that they don’t graduate into the system and become lifetime criminals.
Chris Barrett, Lobbyist, The National Council of Juvenile and Family Court Judges, offered to answer any further questions the committee might have.
Senator Raggio asked V. Robert Payant, Lobbyist, Catholic Legislative Liaison, whether he had any comments to add. Mr. Payant declined comment.
Senator Raggio stated his support of the programming provided by the National Council of Juvenile and Family Court Judges.
Senator Jacobsen asked who Louis W. McHardy was.
Senator Raggio responded Louis W. McHardy was the preeminent judge who was the president of the family council for many years. He added Judge McHardy appeared before the committee on numerous occasions and is now retired.
Senator Raggio closed the hearing on S.B. 438 and opened the hearing on S.B. 97.
SENATE BILL 97: Makes appropriation to State Public Works Board for construction of residence facilities at Great Basin College, Elko campus. (BDR S-697)
Senator Dean A. Rhoads articulated the background of Great Basin College (GBC). He stated the people of Elko raised $60,000 to start a community college within an old elementary school back in the mid-1960s. He pointed out Paul Laxalt was the Governor of Nevada at the time and his efforts to secure funding for the community college through the Legislature were unsuccessful. Immediately prior to delivering the bad news to various service groups in Elko regarding the failed funding attempt, Mr. Laxalt received a telegram from Howard Hughes pledging $250,000 to start the community college in Elko, which was the first in the state, he said. Senator Rhoads explained Mr. Hughes’ donation was also used to initiate the community college system throughout the state. Senator Rhoads noted GBC has consistently been one of the best assets of Elko, and it has been well supported by the community from its start in 1967.
Michael J. Franzoia, Mayor, City of Elko, provided a written copy of his statement (Exhibit F) in support of S.B. 97. He pointed out rental housing availability in Elko is limited and costly and student housing on campus is non-existent. He said he believes the cost of housing deters rural Nevadans from attending Great Basin College in favor of other schools such as the College of Southern Idaho in Twin Falls, Idaho, colleges in Salt Lake City, Utah, and other southern Idaho colleges.
Senator Raggio asked for further discussion of the complete project costs and method of payment.
Ron Remington, President, Great Basin College, stated Carl Diekhans, Vice President for Administrative Services, Great Basin College, is prepared to discuss project costs and financing. Mr. Remington stated this project is not on the Board of Regents’ list. He provided a one-page breakdown of the costs and benefits of the project (Exhibit G).
Senator Raggio inquired whether the project was presented to the Board of Regents. Mr. Remington replied that it was not.
Mr. Remington said he believes the development of campus housing is the logical step following the recent implementation of a four-year degree program at GBC. He indicated the total cost of the project is approximately $11 million, so the proposed appropriation, $2.5 million, is only a small portion of the required funds.
Mr. Diekhans indicated the original project was to provide housing for 200 students at a cost of $11 million, but they have decided to complete the project in two phases. He said each phase would provide housing for 100 students. He proposed the $2.5 million appropriation would be “seed money” to borrow an additional $3 million. Then the revenue from the 100 beds would sufficiently service the debt, he added.
Senator Raggio inquired whether GBC would issue bonds to acquire the additional $3 million. Mr. Diekhans responded GBC would have to apply for a bank loan, but he has asked Dan Miles, Vice Chancellor, Finance and Administration, UCCSN, to consider including GBC in the bonding capacity with the universities. He said he believes only the universities currently have bonding capacity, but he has directed his request to the UCCSN office and discussed it with Mr. Miles. He indicated GBC would definitely like to pursue bonding for the second phase of the project even if it is deemed impractical for the first phase due to time constraints.
Mr. Diekhans discussed the three options for adding residential facilities to the campus. He said the first option is constructing new facilities on campus, and the second option is the acquisition and subsequent renovation of an adjacent apartment complex. He noted a long-term care center, Heritage Center, which is one block from campus was recently closed. The care center is currently a 90-bed facility, he added.
Senator Rhoads stated Great Basin College services a vast area, and many parents prefer not to send their 18 year olds away to a school where they must live in motels or similar housing options. Therefore, young students often choose to attend universities in Reno or Las Vegas with residential housing facilities, he added. He said he believes residential facilities on campus would enable GBC to attract many young students from rural areas within Nevada and from neighboring states.
Senator Rawson asked how the scope of the project would be changed by the potential purchase of the care center facility.
Mr. Diekhans indicated the care center could probably be converted into a 75-room residential facility, as many of the rooms are extremely small; this would almost complete phase one of the project. He said GBC would then need to raise funds to add at least 100 beds in the second phase.
Senator Rawson explained he is attempting to find a way to help GBC proceed with limited funds. He inquired whether GBC could complete the project for less than projected with the potential acquisition of the care center facility and potential inclusion in the revenue bond authority of the university system.
Mr. Diekhans responded he had discussed lending terms with local banking officials who indicated GBC should qualify for interest rates slightly under 6 percent, but he was uncertain of the potential outcome of achieving revenue bond authority.
Senator Rawson stated staff should assist in analyzing available financing options.
Mr. Diekhans said he plans to meet with representatives of the care center shortly to discuss the asking price and potential terms of a sale. He said the care center couldn’t be re-opened as a care center, so it may be a good buy for GBC.
Senator Mathews inquired about the proximity of the care center to the GBC campus. Mr. Remington replied it is about one block away, directly across College Parkway from the campus. He said it is very close for the students.
Senator Jacobsen asked for further discussion of the history of legislative funding of GBC because he thought the woman in charge of fundraising for GBC was from Douglas County. Mr. Remington responded Jeanne Blach, previously from Douglas County, headed the fundraising efforts for GBC for many years before retiring recently.
Mr. Remington discussed the history of GBC. He said Elko was the home of Nevada’s first community college and the home of the first university in Nevada. He pointed out the University of Nevada was located in Elko in 1874 before relocating to Reno. He said GBC has always enjoyed strong support from the community and business and industry. He noted GBC recently received an award as a benchmark institution supporting business and industry. He pointed out GBC offers an associate degree in nursing that requires students to come to Elko for clinical experience, and the campus housing would be beneficial for those students. He cited additional uses for campus housing: to house BLM and Forest Service fire fighting crews during the summer and to house medical students completing their rural experiences in Elko.
Senator Raggio indicated it would be difficult without additional revenues to fund this project, which was not included in The Executive Budget, during this biennium, despite the compelling case presented to the committee.
James T. Richardson, Lobbyist, Nevada Faculty Alliance, stated his support of S.B. 97.
Senator Raggio closed the hearing on S.B. 97 and opened the hearing on S.B. 460.
SENATE BILL 460: Makes appropriation to University and Community College System of Nevada for operation of Harry Reid Center for Environmental Studies at University of Nevada, Las Vegas (BDR S-1427)
Rick C. Bennett, Lobbyist, Director, Government Relations, UNLV, introduced Donald H. Baepler, Director, Harry Reid Center for Environmental Studies and the Marjorie Barrick Museum of Natural History, both at UNLV.
Mr. Baepler pointed out the Harry Reid Center for Environmental Studies has existed in its present form since 1981 without funding from UNLV or the Legislature. He stated the center receives slightly over $9 million in revenue each year from eighty‑four different sources. He said the center is requesting an appropriation of $250,000, or $125,000 each year of the next biennium, to offset administrative costs specifically to supplement the salaries of division directors and administrators. He commented the funds are necessary to give the administrators sufficient time to write proposals to secure funds for the expansion of the center.
Mr. Baepler said he believes the appropriation is an investment that will pay future dividends. He stated the center presently returns over $1 million of indirect costs to the university, more than half of which goes into the university’s general fund. He noted the center retains a third of its indirect costs, approximately $500,000, for administrative infrastructure support, but the center needs that money to upgrade instruments and purchase new instruments to remain competitive with other research organizations. He said he believes the center is “the only entity within the University of Nevada system that does not receive state support and which in fact returns substantial money to our host institution.”
Senator O’Donnell asked for further discussion of the 84 revenue sources Mr. Baepler indicated the center has. Mr. Baepler responded the center has 84 revenue streams comprised of public, private, large and small sources.
Senator O’Donnell inquired whether any of the revenue sources were the Department of Energy (DOE). Mr. Baepler responded the center was currently working on three projects for the DOE.
Senator Jacobsen asked whether the Harry Reid Center has an independent approach to Yucca Mountain. Mr. Baepler replied the center’s approach is always independent, as it must be for all scientists in their research.
Senator Raggio inquired why the positions could not be funded through indirect costs. Mr. Baepler stated the positions currently are funded through indirect costs.
Senator Coffin related a personal story that happened in 1971 while he and Mr. Baepler were traveling by plane between Las Vegas and Reno. He said they witnessed a strange pink cloud from the Banbury accident, which was the last venting at Yucca Mountain.
Senator Raggio closed the hearing on S.B. 460 and opened the hearing on S.B. 493.
SENATE BILL 493: Revises provisions governing retention and expenditure of appropriations made from state general fund for support of institutions of University and Community College System of Nevada. (BDR 31-432)
Dr. Jane A. Nichols, Chancellor, System Administration Office, UCCSN, stated the UCCSN proposes to retain half of all unexpended funds that would otherwise be reverted to the General Fund. She acknowledged past attempts to retain appropriated funds destined for reversions have all failed. She stated this would provide greater flexibility to the UCCSN for future planning. She asked Daniel G. Miles, Vice Chancellor, Finance and Administration, UCCSN to continue the discussion on her behalf.
Senator Raggio reminded Dan Miles that he used to argue against this proposal when he worked with the Legislative Counsel Bureau’s (LCB) fiscal division. Mr. Miles acknowledged that was true.
Mr. Miles said the UCCSN, like other state agencies, has to revert all remaining funds from the nonformula budgets. He said the formula budgets are those of the campuses and they are largely underfunded, but they still must revert any remaining funds to the General Fund at the end of the fiscal year. He said these reversions occur particularly in the area of indirect cost recovery and investment income. He noted there is a provision in the authorization act that allows the UCCSN to approach the Interim Finance Committee (IFC) for authorization to use excess student fee revenue for additional courses and instructors. He pointed out $547,000 was reverted in Fiscal Year (FY) 2000, and $429,000 in FY 1999 system wide by both formula and nonformula budgets.
Senator Raggio asked whether Mr. Miles had figures for other years. Mr. Miles responded it was $793,000 in FY 1998.
Senator Raggio inquired whether this is an alternative proposal to requesting return of the full indirect costs. Mr. Miles responded the requests are not directly related, and the Board of Regents initiated this request.
Senator Raggio stated the problem is all agencies will want to do this if the Legislature allows the UCCSN to do this. He acknowledged people in the audience were nodding in concurrence with his statement. It would also be difficult to ensure full accountability for the appropriations without the reversions, he added. He noted the Legislature allows considerable flexibility to the UCCSN budget by not requiring line items as they do with other agencies. He asked Mr. Miles whether he thinks this is “an excessive request.”
Mr. Miles acknowledged this request was denied in the past, more than once.
Senator Raggio closed the hearing on S.B. 493 and opened the hearing on S.B. 496.
SENATE BILL 496: Revises provisions regarding bonding for facilities of University and Community College System of Nevada. (BDR S-1226)
Mr. Miles explained the UCCSN could sell revenue bonds under their securities law for specific purposes with legislative authority. He said the Legislature has historically established an upper limit for bond issuance, which is addressed in his handout (Exhibit H). He said the bill is amending legislation from 1999, which in turn amended legislation from 1991, so it is confusing. He pointed out the bonding limits established by the 1999 Legislature were $67.5 million for UNLV and $25 million for UNR.
Mr. Miles discussed revenue bonds the two institutions have issued in the past. He pointed out UNLV has issued three bonds:
He added UNR has issued two bonds:
Senator Raggio inquired whether all of these bonds have been successfully serviced by revenue. Mr. Miles replied, “Yes.”
Mr. Miles said the current balance remaining of the revenue bond limit is $20.3 million for UNLV and $8.5 million for UNR. S.B. 496 proposes to add $39 million to UNLV’s limit and $33.5 million to UNR’s limit, he stated. He concluded the unissued bond amount would then be $59.3 million for UNLV and $42 million for UNR.
Senator Raggio asked how the proposed amounts were determined.
Mr. Miles responded the amounts were determined from surveys each university completed. He indicated the Board of Regents must approve all proposed projects, and numerous other people review projects to ensure future revenue will support any bonds issued.
Senator Raggio stated the committee would like to be informed of any future projects that warrant an increase in the bonding limit.
Mr. Bennett pointed out three potential projects UNLV is considering:
· $35 million for the construction related to the dental school
· $12 million for graduate student housing
· $12 million for an additional parking garage.
Robert Dickens, Lobbyist, Director, Government Relations, University of Nevada, Reno, stated UNR is considering the second phase of a dormitory it constructed and opened last fall due to a significant increase in enrollment. He cited a 23 percent increase in freshman enrollment. He pointed out 37 percent of the population residing in UNR’s dormitories are from Clark County. He further proposed an expansion of the current University Inn to provide additional housing, office, and conference facilities to accommodate some of the programming offered by the National Judicial College and the Louis W. McHardy National College of Juvenile and Family Justice.
Mr. Dickens commented other projects UNR is beginning to contemplate are a new chemistry building, additional parking, and graduate student housing to accommodate families.
Senator Raggio questioned whether a new chemistry building would be appropriate for revenue bonding. Mr. Dickens responded it is possible if an appropriate revenue source can be located. Mr. Dickens stated, “We always find an appropriate revenue source to go with any of these independent projects.”
Senator Rawson inquired whether there has been any discussion of including GBC in the revenue bonding authority for the project they proposed earlier in the meeting.
Mr. Miles responded that he had told Mr. Diekhans to submit a written proposal to him because he said he believes it is possible. He indicated John O. Swendseid, bond counsel, would be able to address the legal technicalities of including GBC in the bonding authority.
Senator Raggio asked Berger “Buzz” B. Nelson, P.E., Assistant Vice President, Facilities Management Department, University of Nevada, Reno, whether he had any additional comments. Mr. Nelson responded, “No.”
Senator Coffin asked Mr. Miles at what point the encumbrance takes place against the bond limits, upon contract approval, upon passage and approval of the bill, or after construction.
Mr. Miles explained revenue bonds are outside of the General Fund obligations of the state.
Senator Raggio closed the hearing on S.B. 496 and opened the hearing on S.B. 497.
SENATE BILL 497: Authorizes issuance of general obligation bonds by state for purchase of certain facilities. (BDR S-1475)
Mr. Miles introduced Dr. Rita Huneycutt, Interim President, Truckee Meadows Community College (TMCC), UCCSN.
Dr. Huneycutt referred to her handout (Exhibit I), which details the proposed purchase of the Reno Town Mall, formerly known as the Old Town Mall. She pointed out TMCC has been leasing space at Reno Town Mall since 1989, and she believes her proposal will save the state money over the long term. She indicated the current owner has invested nearly $250,000 renovating the facility, particularly the area leased by TMCC. She noted TMCC currently occupies over 30 classrooms, offers 175 courses with 136 staff and faculty serving over 7,500 students each year at the mall. Additionally, 7 non-state funded programs are offered by TMCC at the mall, she added.
Dr. Huneycutt stated an appraisal of the mall and adjacent 11 acres is currently pending. She said the purchase price is $51 per square foot and new construction or leasing other facilities in the same area would cost approximately $150 per square foot. She cited various reasons to purchase the site, which are detailed in her handout (Exhibit I) including accessibility, affordability, and expansion possibilities for future college programming. She noted the Reno Town Mall would ideally satisfy the expansion needs of TMCC for the theater and performing arts programs because of the currently vacant movie theater onsite.
Dr. Huneycutt indicated $642,000 each year is appropriate for current lease payments while the purchase would cost $660,000 each year for the next 15 years. She pointed out TMCC currently leases 60,938 square feet and the purchase would increase the space to 157,000 square feet plus the additional 11 acres.
Senator Raggio inquired how much of the additional square feet she would anticipate TMCC utilizing.
Stephen Salaber, Assistant Vice President, Administrative Services, Truckee Meadows Community College, UCCSN, stated nine parties are currently leasing space at the Reno Town Mall in addition to TMCC. He stated those nine leases amount to $220,000 each year, which could be applied toward deferred maintenance on the building. The building is 30 years old and requires ongoing maintenance, he added.
Senator Raggio stated it was not clear how much square feet the nine tenants use and what would be available for immediate expansion of TMCC.
Mr. Salaber stated the vacant theater constitutes approximately 20,000 square feet. He noted TMCC’s main campus is undergoing a renovation and expansion of their culinary arts and fine arts programs, which will encompass the existing auditorium on campus. Therefore, the theater group is currently seeking a new location, for which the vacant movie theater would be ideal, he added.
Senator Raggio inquired whether the vacant movie theater is suitable for that purpose without extensive renovation.
Mr. Salaber responded the movie theaters are very small spaces and would require some renovation, but there is an adjacent space of 9,000 square feet that could be used also. He added TMCC would like to occupy those two spaces as soon as possible.
Senator Raggio asked what the total purchase price is. Mr. Salaber replied it is $8 million and TMCC is requesting bonding authority for $8.5 million to cover closing costs and insurance.
Senator Raggio inquired whether this would be general obligation bonding. Mr. Salaber responded affirmatively.
Dr. Huneycutt indicated the TMCC Foundation would provide financial assistance to relocate and expand the performing arts program. She noted TMCC capped enrollment in the performing arts program because of limited facilities. She pointed out the current lease contract will expire December 2001, so this matter needs to be addressed this session.
Senator Raggio inquired about the Board of Regents position on the proposed purchase. Dr. Huneycutt stated they had approved the negotiation for the purchase. She added she would be discussing the issue with the Chancellor at the April board meeting.
Senator Raggio asked Mr. Miles whether this would be another $8.5 million of bond indebtedness for the state. Mr. Miles responded, “Yes.”
Senator Raggio said we are already at “fifteen cents on our rate” in our capital improvement projects, so how would this affect the rate. Mr. Miles responded this project would not affect the rate because the bond redemption costs would come out of the monies appropriated to TMCC for lease payments. Mr. Miles stated the appropriated funds would be transferred to the State Treasurer’s Office for the principal and interest payments over the next two years.
Senator Raggio questioned what would happen after two years passes. Mr. Miles indicated that after two years the issue would be readdressed, and it might be considered to be included in the fifteen-cent property tax. Mr. Miles said these bonds would count against the two percent bond debt limit because they are general obligation bonds.
Senator Raggio commented the bonding situation had been reviewed at the last committee meeting and Mr. Comeaux indicated our bonding capacity would be slightly over $40 million in FY 2003. He pointed out the bonding capacity would be very limited without this project.
Mr. Miles said he was not aware of that specific data. He stated he reviewed the bonding capacity using assessed values from July.
Senator Raggio stated the assessed valuation has declined and the bonding capacity for FY 2003 is estimated at $44 million for all of the state’s needs, which could present numerous problems.
Senator Raggio closed the hearing on S.B. 496 and opened the hearing on S.B. 500.
SENATE BILL 500: Revises various provisions of University Securities Law. (BDR 34-915)
Mr. Miles explained S.B. 500 is a technical amendment bill to the UCCSN’s securities laws.
John O. Swendseid, Bond Counsel to the UCCSN, said all of the proposed changes except one have been made to the other governmental securities laws. He clarified “governments” included cities, counties, school districts, and the state’s securities law. He noted the one exception is found in Section two of the bill, which proposes changes to reflect an amendment the Legislature made in 1999 to the Uniform Commercial Code (UCC). The Commission on Uniform State Laws, since the time this bill was requested, came out with a different uniform change to address the concern that is addressed in Section two, he commented. He stated the LCB has indicated they will try to amend the local government securities law bill and the state securities law bill to reflect the uniform change rather than this change. Therefore, he recommended the committee consult with the legal division of the LCB to ascertain whether to change Section two of this bill to also reflect the uniform change. He said he believes it would make sense to do that change so all three governmental securities law bills and the UCC would be uniform.
Mr. Swendseid clarified the 1999 Legislature amended the UCC effective July 1, 2001. He said the amendment changed the way security interests are created against government property and it functions in a manner detrimental to bondholders. He stated that when the UCCSN issues a revenue bond it gives bondholders a security interest in the student fee revenues or the dining revenues, depending on the bond issue. He explained the bond community, including lawyers such as him, addressed the issue with the Commission on Uniform State Laws and convinced them the amendment was inappropriate. The commission then issued a recommendation that the article 9 provisions pertinent to government revert to what they were prior to 1999, he added. He pointed out that article 9 of the UCC does not apply to liens created by governments until July 1, 2001 when the 1999 legislation would take effect, unless this current legislation supersedes it.
Senator Raggio asked Mr. Swendseid to clarify why article 9 would not apply with the current bill.
Mr. Swendseid responded article 9 pertains to liens to secure borrowings similar to “a mortgage on something that isn’t real property.” He clarified article 9 historically has not dealt with liens created by governments, which is what the government does upon issuance of revenue bonds.
Senator Raggio questioned whether article 9 applies to the government now. Mr. Swendseid said article 9 did not apply to governments prior to the 1999 amendment, but that amendment will change that upon its effective date of July 1, 2001. Mr. Swendseid indicated he would like to see the amendment changed before it ever takes effect.
Senator Raggio clarified the UCCSN does not want to do the filing associated with the amendment. Mr. Swendseid agreed and added, “The banks would have certain security interests in money held by the bank.” Therefore, bondholders hold a lien on the revenues that would be superseded by the banks security interests, he noted.
Senator Raggio questioned what the banking industry’s position is on this change. He said there are banking representatives on the Commission on Uniform State Laws who eventually recognized the problem this creates for revenue bonds and recommended the reversion to the previous language for governmental liens.
Senator Raggio urged Mr. Swendseid to address the other changes.
Mr. Swendseid responded all of the other changes proposed have already been made to the state’s securities law and the local government’s securities law. He stated Section three would allow the Board of Regents to delegate to the Chancellor or the Vice Chancellor for Finance and Administration the right to set the final interest rate on bonds. The Board of Regents currently sets the final interest rate, so bond sales always have to be set for days the Board of Regents meets, he added. He commented the Board of Regents typically meets once every six weeks and its meeting day may not coincide with favorable conditions for the sale of bonds. He said delegating the authority to set the final interest rate and some of the other final terms of the bonds would enable them to optimize the conditions in which they sell the bonds. He pointed out the State Board of Finance has the authority to delegate to the State Treasurer for state securities and the various local governments have the authority to delegate to their Chief Financial Officers (CFOs) for local government securities.
Mr. Swendseid discussed the proposal in Section 4 to allow the UCCSN to issue floating rate bonds. He pointed out the Legislature has allowed state securities and local securities to do this, although the state securities have not yet done so. He commented various local governments have used floating rate bonds within their portfolios of indebtedness to their financial advantage.
Mr. Swendseid stated Section five would allow the university to invest in collateralized guaranteed investment agreements that will allow a bond issuer to get a more favorable interest rate on the reinvestment of bond proceeds. He said the people who offer these guaranteed investment contracts generally allow the borrower “full flexibility on the draws,” so the borrower may withdraw the money as needed to pay construction costs while earning a much higher rate than investing purely in Treasury bills, which have fixed maturity dates.
Senator Raggio inquired whether these investments would be authorized as long as they are within the limits and abiding by the guidelines of the investment contracts.
Mr. Swendseid agreed. He clarified that the guidelines of investment contracts include being collateralized 102 percent and invested with an entity that maintains an “A” rating or better.
Senator Raggio inquired whether this would allow investment into the equity market. Mr. Swendseid responded this would not allow investment into the equity market because it has to be collateralized.
Mr. Swendseid said Section 6 would allow the UCCSN to do interest rate exchange agreements. He stated these are used as an alternative to doing a floating rate bond. He explained that in some markets, when a floating rate is desired, it is better to issue a fixed rate debt instrument and then enter into an interest rate exchange agreement. He clarified an interest rate exchange agreement is when someone agrees to pay your fixed interest rate and you pay them a floating rate interest rate. He noted both the state and local governments have this authority and both of them have used it. The use of these agreements is very dependent on the market, he added.
Senator Raggio pointed out this is a nonexempt bill, necessitating that it be processed by the end of the week, if it is going to be processed.
Senator Coffin said this is a complex issue, but it appears our securities might appeal to a wider market through these new options. Mr. Swendseid agreed.
Senator Raggio asked Mr. Swendseid whether he had submitted a proposed amendment to Section 2 or discussed it with the legal division of the LCB. Mr. Swendseid responded he had discussed it with Kimberly Marsh Guinasso, Principal Deputy Legislative Counsel, Legal Division, LCB, several weeks ago. Mr. Swendseid agreed to prepare the language for the amendment today for the committee.
Senator Raggio instructed Mr. Swendseid to provide the amendment language to Mr. Ghiggeri.
Senator Raggio closed the hearing on S.B. 500.
Senator Raggio recessed the meeting at 9:35 a.m.
Senator Raggio reconvened the meeting at 9:48 a.m. He directed the committee’s attention to S.B. 249.
SENATE BILL 249: Makes supplemental appropriation to Secretary of State for unanticipated shortfall in money budgeted for salaries and costs for information services. (BDR S-1253)
Senator Raggio stated that staff had indicated this appropriation could be reduced by $1,722. He further stated the bill language would be changed to include “information technology” after “salaries.” Senator Raggio suggested S.B. 249 be amended, if passed.
SENATOR RAWSON MOVED TO AMEND AND DO PASS AS AMENDED S.B. 249.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
SENATE BILL 492: Clarifies provisions governing transfers of money to fund to stabilize the operation of the state government. (BDR 31-1476)
Senator Raggio stated S.B. 492 was passed on April 5, 2001, by this committee with a “do pass” recommendation. He explained Mark Winebarger, Chief Deputy Controller, Office of the State Controller, provided a statement (Exhibit J) regarding S.B. 492 that he would like read into the record. Senator Raggio read the statement:
The State Controller supports the proposed amendment to [Nevada Revised Statutes] NRS 353.288. This bill is the result of differing opinions between the State Controller’s Office and the Department of Administration as to the definition of revenue in Sections 1 and 1(a). This amendment would change the statute to reflect the Department of Administration’s current interpretation and result in a FY 2000 transfer of approximately $7.5 million. If the statute is not revised, the Controller’s interpretation of the statute would require a transfer in excess of $28 million, an amount that would put the “Rainy Day Fund” at its maximum legal limit per section 2 of NRS 353.288.
Senator Raggio indicated the statement is consistent with the information presented at the meeting on April 5, 2001.
Senator Raggio addressed Senate Committee on Finance Closing List Number 5 (Exhibit K).
Printing Office Equipment Purchase – Budget Page ADMIN-36 (Volume 1)
Budget Account 741-1331
Michael J. Chapman, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated this budget is funded from the Printing Office budget account through depreciation on existing equipment. The account is used to replace outdated or worn equipment and to fund major equipment purchases.
E-710 Replacement Equipment – Page ADMIN-36
Mr. Chapman stated this decision unit recommends the replacement of 1 paper cutter controller, 1 high-end laser jet printer, and 5 desktop personal computers (PCs) in FY 2002. Furthermore, it recommends the replacement of 1 25-inch Heidelberg one-color press that is 28 years old, 4 desktop PCs, 1 high-end laser jet printer, and a file server in FY 2003, he added.
E-720 New Equipment – Page ADMIN-37
Mr. Chapman said this decision unit recommends the following purchases in FY 2002: 3 die for the new Punchmaster punch press and compact disk (CD) duplicating equipment to produce Compact Disc-Read Only Memory (CD-ROM) disks of various state publications and reports.
Mr. Chapman pointed out S.B. 564 would provide for competitive bidding on all state printing orders by private enterprise.
SENATE BILL 564: Requires competitive bidding for printing of certain state publications and other printed materials. (BDR 29-568)
Senator Raggio commented the bill is currently in the Senate Committee on Government Affairs without any action taken yet. He noted the passage of S.B. 564 could affect the necessity to purchase new equipment for the State Printing Office.
Mr. Chapman responded:
In discussion with the printing office and in testimony they provided to the subcommittee on general government during their budget hearing, they believe that they will still be able to be competitive with private enterprise and would have the need for this equipment. In fact, they intend to probably secure additional printing sales, attempting to seek out the university jobs and others.
Senator Raggio asked Mr. Chapman to discuss the proposed technical adjustment in decision unit E-710.
E-710 Replacement Equipment – Page ADMIN-36
Mr. Chapman explained the technical adjustment to this decision unit is pursuant to revised computer hardware prices by the Purchasing Division, which results in decreased costs.
Senator Raggio stated that would be a continuing issue in many of the budgets addressed, so the committee prefers to authorize staff to make the necessary adjustments for current computer pricing in lieu of the committee’s addressing the adjustment each time.
Senator O’Donnell questioned whether the cost of the new equipment for the printing office is factored into their competitive bids. Otherwise, the printing office would have an advantage in competitive bids, he added.
Mr. Chapman responded that the cost of the equipment is recouped through depreciation expense that is included in their billable charges for future printing jobs.
Senator O’Donnell asked whether the recouped costs would go back to the printing office.
Mr. Chapman responded the costs initially go to the printing office before being transferred into the depreciation reserve of this budget account, 741-1331.
Senator O’Donnell inquired why the costs are not returned to the General Fund every year for the next 25 years.
Mr. Chapman clarified the equipment is paid for through the depreciation reserve not the General Fund.
Senator Raggio stated that staff had indicated the printing office is required to factor the cost of this equipment into the rates they charge for their services.
Senator O’Donnell thanked him for the clarification.
SENATOR NEAL MOVED TO CLOSE BUDGET ACCOUNT 741-1331 AS RECOMMENDED BY STAFF INCLUDING THE TECHNICAL ADJUSTMENT.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Purchasing-Equipment Purchase – Budget Page ADMIN-54 (Volume 1)
Budget Account 718-1364
Mr. Chapman said this account is funded through depreciation on existing equipment within the Purchasing Division operating account. He stated The Executive Budget recommends the purchase of 23 replacement desktop PCs, 1 laptop PC, 2 file servers, 18 desktop printers, 2 high-speed laser printers, and various network hardware upgrades over the next biennium.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 718-1364 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Surplus Property – Budget Page ADMIN-56 (Volume 1)
Budget Account 101-1367
Mr. Chapman stated this budget is within the Department of Administration’s Purchasing Division. He said it administers the acquisition and transfer of federal surplus property. He pointed out the base budget recommends elimination of 1 Program Assistant position that has been vacant since February 2000.
E- 275 Working Environment & Wage – Page ADMIN-58
Mr. Chapman noted this decision unit includes $1,191 per year for the program’s Management Analyst to obtain certification as a purchasing manager.
E- 900 Transfer to B/A 1358 – Page ADMIN-58
Mr. Chapman said this decision unit recommends the transfer of the Surplus Property Program account to the Purchasing Division budget account. He said the agency has indicated to staff this budget will still be tracked separately within the Purchasing Division budget account.
ASSEMBLY BILL 542: Makes various changes relating to personal property of state. (BDR 27-528)
Mr. Chapman noted Assembly Bill (A.B.) 542 would revise Nevada Revised Statutes (NRS) to provide that all money received will be credited to the Surplus Property account in the Purchasing Fund in lieu of the General Fund.
Senator Raggio inquired whether the bill is consistent with the budget. Mr. Chapman responded affirmatively.
Senator Raggio questioned whether the bill needed to be processed to accomplish this. Mr. Chapman responded affirmatively.
Senator Jacobsen inquired whether this is surplus property available through law enforcement agencies. Mr. Chapman answered this surplus property is federal property not from law enforcement agencies.
Senator Raggio inquired whether the federal surplus property is given to homeless people. Mr. Chapman stated it is given to homeless people and other non-profit groups that qualify under specific Internal Revenue Service (IRS) codes.
Senator Raggio questioned whether that would include volunteer fire departments. Mr. Chapman answered, “Yes.”
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1367 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Commodity Food Program – Budget Page ADMIN-60 (Volume 1)
Budget Account 101-1362
Mr. Chapman stated the Commodity Food Program has three subprograms. He said the first program distributes food to schools, childcare sites, charitable institutions, senior nutrition programs, and summer camps. He noted the second program distributes food to needy households on rural Indian reservations. He added the third program is the Emergency Food Assistance Program that distributes food to low-income households statewide. He continued the base budget includes $4,857 per year for overtime costs.
E-710 Replacement Equipment – Page ADMIN-63
Mr. Chapman pointed out this decision unit includes the replacement of 1 forklift, 3 desktop PCs, 1 file server, 1 printer, and various software and network hardware components.
E-720 New Equipment – Page ADMIN-63
Mr. Chapman noted this decision unit includes a new 2-axle tractor for the Las Vegas warehouse, a refrigerated trailer, and a liftgate for an existing dry goods trailer.
Mr. Chapman discussed the technical adjustments recommended by staff. He stated staff proposes to eliminate overtime in the amount of $4,857 per year with a corresponding increase to reserve. He explained overtime historically has not been budgeted in this account.
M-100 Inflation & Per Unit Adjustment – Page ADMIN-61
Mr. Chapman recommended a technical adjustment to reduce M-100 by $476 per year to eliminate an inflation adjustment to the General Fund Loan repayment. He added that the inflation adjustment is not necessary because it is a static repayment.
E-720 New Equipment – Page ADMIN-63
Mr. Chapman stated this decision unit has price revisions reflecting current vendor quotes for the 2-axle tractor, refrigerated trailer and liftgate for the dry goods trailer.
Senator Raggio invited Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration, to join the fiscal analyst at the table and voice any objections regarding the budgets addressed by the committee. Mr. Pinkerton joined Mr. Chapman and responded he had no objections to this budget.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1362 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Jacobsen inquired whether there were any lists of excess state-owned equipment maintained by any state agencies. He proposed every agency publish a list of excess equipment on an annual basis in the hope another agency might be able to utilize the equipment, thereby saving the state purchase expenses.
Senator Raggio commented Senator Jacobsen would be the ideal person to maintain the list. Senator Raggio directed staff to ask the Purchasing Division to contact Senator Jacobsen regarding the creation of a list of excess state-owned equipment.
Mail Services – Budget Page ADMIN-74 (Volume 1)
Budget Account 713-1346
Mr. Chapman stated Mail Services handles interoffice mail delivery for the state including United Parcel Service (UPS) and express overnight mail and provides folding and inserting service in the Reno/Carson area.
M-100 Inflation & Per Unit Adjustment – Page ADMIN-75
Mr. Chapman pointed out this decision unit includes an increase in Mail Service Charge and associated Postage expenditure resulting from the recent postal increase of 1 cent for first-class mail. He said the decision unit did not reflect an increase to the assessment revenue that the division receives from the administrative charge assessed to agencies. Therefore, he recommends a technical adjustment to reflect the additional assessment revenue resulting from the increase in postage fees.
Senator Raggio commented there has been some discussion the United States (U.S.) Postal Service may increase postal rates again in the near future. He questioned whether that would be addressed during the interim.
Mr. Chapman responded there is nothing included in this budget to accommodate future postal rate increases.
Senator Raggio asked Mr. Pinkerton for suggestions to address a potential postal rate increase. Mr. Pinkerton responded Mr. Chapman is correct that there are no adjustments in the current budgets to accommodate future postal rate increases. Mr. Pinkerton stated those increases have historically been handled by the Interim Finance Committee (IFC).
Senator Raggio commented the discussions he has heard indicate the next postal rate increase might be more substantial than the last increase of one cent. Senator Raggio asked Mr. Ghiggeri how a significant postal rate increase would be addressed.
Mr. Ghiggeri stated a postal rate increase would affect numerous agencies with large numbers of mailings, so federal funds would be sought to partially offset those additional costs. He said IFC would address that issue.
M-200 Demographics/Caseload Changes – Page ADMIN-75
Mr. Chapman noted decision unit M-200 recommends increases in depreciation and maintenance contract costs associated with the purchase of replacement equipment in decision unit E-710 in the Mail Services – Equipment Purchase budget account.
Mr. Chapman stated that, in addition to the standard adjustment for computer prices, Mail Services has decided not to purchase one of the previously requested items. Therefore, M-200 has been decreased to reflect the elimination of this equipment request, he added.
E-720 New Equipment – Page ADMIN-77
Mr. Chapman stated this decision unit recommends $2,000 per year for the annual software license for the new encoding machine recommended in the Mail Services Equipment Purchase account.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 713-1346 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio inquired whether Mr. Pinkerton had any objections. Mr. Pinkerton replied he had none.
Mail Services - Equipment Purchase – Budget Page ADMIN-79 (Volume 1)
Budget Account 713-1347
Mr. Chapman stated there is one technical adjustment to this account because the department has indicated it will postpone purchase of the interdepartmental mail and shipping system, thereby resulting in a decrease adjustment to this account.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 713-1347 AS RECOMMENDED BY STAFF.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio commented a few sessions ago presorting was a contentious issue.
AGRI, Nevada Junior Livestock Show Board – Budget Page AGRI-84 (Volume 1)
Budget Account 101-4980
Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated there are two technical adjustments to this account. He said the first adjustment provides for increased funding for seasonal salaries in the base budget equal to the FY 2001 work program amount in addition to a 2 percent cost of living increase that was approved by the 1999 Legislature.
Mr. Combs indicated the second adjustment provides a 4 percent cost of living increase for each year of the upcoming biennium for the seasonal position in the account.
M-100 Inflation & Per Unit Adjustment – Page AGRI-85
Mr. Combs discussed the sole issue for the committee’s consideration. He stated The Executive Budget recommends $1,020 in FY 2002 and $2,874 in FY 2003 for the costs of the Department of Information Technology (DoIT) to maintain the agency’s website. He indicated DoIT revised the cost, which is now $1,032 each year of the biennium or $86 per month. He noted the Assembly Committee on Ways and Means eliminated this funding when it closed this budget.
Senator Raggio commented this program could benefit from an effective website. He inquired the reasoning behind the Assembly committee’s decision to eliminate the funding for a website.
Mr. Combs responded the Assembly committee had indicated this group is part of national organizations that all have websites and local activities could be included in the national website.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4980 AS RECOMMENDED BY STAFF AND TO INCLUDE THE COSTS TO MAINTAIN THE WEBSITE.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio inquired whether the Assembly Committee on Ways and Means altered the General Fund amount in this budget. Mr. Combs responded affirmatively indicating they had decreased the General Fund by $1,020 in FY 2002 and $2,874 in FY 2003.
Senator Raggio reiterated this committee does not wish to delete those amounts from the General Fund for this budget account.
Senator Jacobsen stated Fred Dressler, who personally provided much of the funding for this program during his lifetime, initiated this program. He noted Mr. Dressler’s family continues to have a great deal of interest in this program.
AGRI, High School Rodeo Association – Budget Page AGRI-87 (Volume 1)
Budget Account 101-1341
Mr. Combs stated the past two biennia, the Legislature approved $20,000 in each year of the of the biennium for this account, which is used to defray the travel costs incurred by Nevada’s participants in the National High School Rodeo finals. He stated The Executive Budget recommends approval of this funding again this year with the only addition being funds for the maintenance of a website for the program.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-1341 AS RECOMMENDED BY THE GOVERNOR INCLUDING THE COSTS TO MAINTAIN THEIR WEBSITE WITH ANY OTHER ADJUSTMENTS DEEMED NECESSARY BY STAFF.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Minerals-Bond Reclamation – Budget Page MINERALS-7 (Volume 1)
Budget Account 101-4220
Mr. Combs stated this account was established to assist mining and exploration operators in complying with the bonding and surety requirements of the Nevada Division of Environmental Protection, the United States Bureau of Land Management, or the United States Forest Service depending on the location of the mine.
Senator Raggio inquired whether it has ever been necessary to access this account because of failure of a company to perform the required reclamation.
Mr. Combs stated, “Prior to the current biennium there had never been a forfeiture.” During FY 2000 there was a mining operator who forfeited on the bond, but the bond was collateralized resulting in the sale of the company’s equipment to pay for the reclamation efforts thereby eliminating the need to access this account, he explained. He stated there has been no payout of funds from this account because of forfeiture.
M-200 Demographics/Caseload Changes – Page MINERALS-7
Mr. Combs stated this decision unit recommends increasing revenue and expenditure authority to add five additional bond pool participants each year of the biennium. He said division staff indicated they believe there will be an increase because it has become increasingly difficult to obtain bonding for these types of projects from private insurers.
Mr. Combs stated staff recommends a number of technical adjustments based on revised FY 2001 projections. He stated:
The net premium [income] has been adjusted to ensure that the revenues equal 5 percent of the projected amount of bonds that would be issued in each year of the biennium. They are projecting that they will have about $3.3 million in bonds outstanding in the first year and $4.4 million in the second year. Interest has been adjusted based on the revised reserve level. The transfer to the Division of Minerals budget account for the cost of administering this bond pool account has been increased to reflect the new participants and the increased level of activity that would be involved. The refund contingency category has been increased to ensure that it includes 15 percent of the projected amount of the bonds issued in each year.
Senator Raggio requested further clarification of the refund contingency. Mr. Combs responded this account is supported by two sources: participants submit a 15 percent deposit on their bond amounts and they pay annual premiums. Mr. Combs pointed out the 15 percent deposit is refundable, which necessitates maintenance in a separate account.
Mr. Combs stated the final adjustment recommended is to balance the revenues and expenditures in the forfeiture contingency category.
Senator Raggio inquired whether Mr. Pinkerton had any objection. Mr. Pinkerton replied he did not.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4220 AS RECOMMENDED BY STAFF.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
B&I, Commission for Hospital Patients – Budget Page B&I-8 (Volume 2)
Budget Account 101-3825
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated this office is responsible for resolving disputes between patients and hospitals regarding the accuracy and amount of charges billed to patients. She explained the account is funded through an assessment received from every hospital with 49 or more licensed or approved hospital beds excluding state or federal hospitals.
Ms. Braun pointed out A.B. 559 was submitted at the request of the Budget Division to transfer the Office for Hospital Patients from the Consumer Affairs Division of the Department of Business and Industry to the Office of the Ombudsman for Health-Care Services in the Governor’s office.
ASSEMBLY BILL 559: Transfers office for hospital patients from department of business and industry to office of the governor. (BDR 18-1440)
E-900 Transfer to BA 1003 – Page B&I-11
Ms. Braun noted this decision unit recommends the transfer of resources and expenditures in correspondence with the transfer of the account.
E-800 Cost Allocation – Page B&I-10
Ms. Braun stated this decision unit recommends the elimination of the Department of Business and Industry indirect cost allocation.
Ms. Braun stated The Executive Budget recommends the elimination of a .51 Full Time Equivalent (FTE) Compliance Investigator position that was vacant during the 1999 to 2001 biennium. She indicated staff recommends this budget be closed as Governor recommends, subject to the approval of A.B. 559 and final statewide cost allocation adjustments.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3825 AS RECOMMENDED BY THE GOVERNOR WITH STAFF ADJUSTMENTS AS INDICATED.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
B&I, Real Estate Education and Research – Budget Page B&I-24 (Volume 2)
Budget Account 216-3826
Ms. Braun indicated this budget account funds the review and approval of continuing education courses for Nevada’s real estate licensees and the licensing of instructors for those courses and various real estate research projects. She said there are 4 FTEs in this account. She pointed out this account is funded through a transfer from the Real Estate Recovery Account of the amount in that account at the end of any fiscal year in excess of $50,000.
E-275 Working Environment & Wage – Page B&I-26
Ms. Braun stated this decision unit includes funding for an increase in building rent and maintenance services, as well as for computer training needs for staff.
E-720 New Equipment – Page B&I-27
Ms. Braun said this decision unit provides funding for 4 conference room chairs, 1 laptop computer, and 1 software package.
Ms. Braun discussed the five technical adjustments proposed by staff. She commented that the amount recommended for transfer from the Real Estate Recovery budget account to this account was not correctly adjusted by the Budget Division. To correct for this oversight, she said staff recommends transfer increases of $67,255 in FY 2002 and $78,855 in FY 2003.
Senator Raggio clarified there is no General Fund money in this account. Ms. Braun responded affirmatively.
Ms. Braun noted out-of-state travel has been reduced to $2,419 in each year of the biennium as it was determined one staff member would attend each conference instead of two. Furthermore, it was discovered funding had been duplicated for one of the conferences, which has now been deleted, she added. She commented the agency also decided each employee would attend only one computer-training course over the biennium instead of two. She concluded funding for four conference room chairs and one laptop has been reduced pursuant to revised prices.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 216-3826 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
B&I, Real Estate Recovery Account – Budget Page B&I-29 (Volume 2)
Budget Account 216-3827
Ms. Braun pointed out this non-General Fund budget account is supported through the biennial collection of a $40 fee from each real estate broker, broker-salesman, and salesman who is licensed by the division. She noted a person who obtains a final judgment against a real estate licensee upon the grounds of fraud, misrepresentation or deceit, with respect to a real estate transaction, is entitled to petition the division for a judgment not to exceed $10,000, which is paid from this account. She commented three claims were paid in FY 2000 for a total amount paid out of $23,000. She stated the remaining balance of this account is transferred to the Real Estate Education and Research account.
Ms. Braun noted there is one adjustment recommended in this budget account. She said the account must be maintained at $50,000 per NRS 645.842, so the adjustment was deducted from the transfer amount. She referred to Exhibit K, which indicates the amount recommended for transfer to the Real Estate Education and Research budget account was not correctly adjusted by the Budget Division. Therefore, she stated that staff recommends an adjustment of $2,316 in each year of the biennium to fund the cost allocation. No other adjustments are recommended, she added.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 216-3827 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
B&I, Real Estate Investigative Fund – Budget Page B&I-31 (Volume 2)
Budget Account 101-3831
Ms. Braun stated, “This account was established to finance investigations of land sales, timeshare sales, and campground sales that are advertised or offered for sale within this state.” She indicated there are no recommended adjustments to this account.
SENATOR O’DONNELL MOVED TO CLOSE BUDGET ACCOUNT 101-3831 AS RECOMMENDED BY THE GOVERNOR.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
HR, Radiological Health – Budget Page HEALTH-19 (Volume 2)
Budget Account 101-3101
Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, pointed out this account is responsible for the regulation of sources of radiation. He said they license and inspect radioactive material users including x‑ray machines and mammography machines and they certify mammography operators. He explained the agency has a federal grant to educate the public on radon hazard in the home and workplace. He stated the agency also performs oversight of the U.S. Department of Energy Nevada Test Site and the closed low-level waste site near Beatty. He explained the variety of activities performed by this agency is funded through a combination of revenue sources, including General Fund fees, federal grants, and a transfer from the radioactive materials disposal trust fund.
Mr. Atkinson recommended the budget be adjusted to align the revenues with the expenditures that are supported by each revenue source.
Mr. Atkinson said the last time the agency’s regulations were changed was in 1999 and the review cost approximately $1,300. Therefore, he proposes to allow $2,000 each year for legal costs related to review of regulations in case a review is necessary. This is in lieu of the $4,000 each year the agency requested, he added.
Senator Raggio questioned whether the agency has the authority to develop and promulgate regulations. Mr. Atkinson stated the agency does have the authority. Mr. Pinkerton expressed his agreement.
Senator O’Donnell commented there is a $2,000 reduction in revenue for each year of the biennium accompanied by a corresponding increase or decrease in expenditures. Mr. Atkinson responded it would be a decrease in expenditures.
Senator O’Donnell asked whether the net change would be zero. Mr. Atkinson responded, “There would be a decrease in the authorized expenditures and a decrease of $2,000 in the General Fund appropriated into this budget.”
Senator O’Donnell pointed out the budget closing list number 5 (Exhibit K) shows a total change of $4,000 in each year to the expenditures. Mr. Atkinson acknowledged the figures are incorrect in the detail of the closing list and they should show a $2,000 decrease in both revenue and expenditures not $4,000.
SENATOR O’DONNELL MOVED TO CLOSE BUDGET ACCOUNT 101-3101 AS RECOMMENDED BY STAFF.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
HR, Health Radioactive & Hazardous Waste – Budget Page HEALTH-23 (Volume 2)
Budget Account 251-3152
Mr. Atkinson stated this budget account is the trust fund for the perpetual care of the low-level radioactive waste and hazardous waste materials at Beatty.
Senator Raggio questioned whether the facility is still in operation. Mr. Atkinson responded the low-level radioactive site is closed, but the hazardous waste materials site is being downsized under the jurisdiction of the Division of Environmental Protection. He noted this perpetual care fund accumulates fees for depositing of waste. The balance in the fund should reach $10,518,789 by the end of FY 2001 and $11,253,381 by FY 2002. This account provides for the post-closure activities, he added.
Mr. Atkinson noted two technical adjustments to this account. He said this account was adjusted to match the revenue transferred into the Radiological Health budget account. He commented the second adjustment is to establish the historical level of expenditure authority, $100,000.
Senator Raggio noted it is a perpetual fund, and questioned whether there were any limitations on the fund’s existence. Mr. Atkinson responded there is no statutorily mandated expiration date for the fund.
Senator Raggio said he understood the fund was to close up the site. Mr. Atkinson agreed and added monitoring of the groundwater will continue for some time.
Senator Raggio questioned whether the money in this fund remains in this fund indefinitely. Mr. Atkinson indicated the funding would remain in the fund indefinitely notwithstanding a change to the statute.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 251-3152 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator Raggio pointed out the $100,000 expenditure authority would be restored.
HR, Family Planning Project – Budget Page HEALTH-38 (Volume 2)
Budget Account 101-3219
Mr. Atkinson stated the Family Planning Project is federally funded to support activities in the rural areas of Nevada. He said the project also receives some reimbursement for medical charges on a sliding fee schedule. He commented the recommended budget includes an increase in medical reimbursements in the amount of $116,659, but the agency has indicated that figure is overly optimistic. He said the amount has been reset to the amount collected in FY 2000 of $300,475. He added staff increased the amount of federal grant awards to the amount the agency anticipates receiving over the next biennium.
Senator Raggio inquired what the division anticipates receiving from the Family Planning grant. Mr. Atkinson responded they increased the budget by $25,000 the first year and $15,000 the second year for anticipated revenue from the Family Planning grant.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3219 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
HR, Health Alcohol Tax Program – Budget Page HEALTH-75 (Volume 2)
Budget Account 101-3255
Mr. Atkinson stated this program is funded by a tax on alcohol and wine sales. He said this money is used for grants for prevention of alcohol abuse. Priority in grant awards is given to areas where shortages for treatment exist, he added. He said the agency sub grants money to local nonprofit organizations and governmental entities for treatment. The division originally included a 16 percent increase in tax revenue, but staff recommends adjusting the increase to 3 percent per year.
Senator Raggio inquired whether Mr. Pinkerton agrees with the adjustment. Mr. Pinkerton stated his agreement.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3255 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
HR Health Alert Network – Budget Page HEALTH-80 (Volume 2)
Budget Account 101-3218
Mr. Atkinson stated this budget account was created in September 1999, upon the IFC approval of a Health Division request to accept a federal grant primarily used to develop a network for communications that could be used for disease investigation, national disease surveillance, rapid communication in the event of disease outbreaks, and professional training. He said the Health Alert Network would eventually link local and federal entities, including the Center for Disease Control (CDC). He noted this account is entirely federally funded.
Mr. Atkinson noted the only adjustment to this account is the addition of one position that was approved at the December 4, 2000, IFC meeting.
Senator Raggio questioned what funds could be granted under this account to assist Churchill County with the high incidence of cancer victims. He asked staff to review this budget account for potential assistance to Churchill County.
Mr. Atkinson responded this account is primarily for equipment to establish a communication network.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-3218 AS RECOMMENDED BY STAFF.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
The meeting was adjourned at 10:44 a.m.
RESPECTFULLY SUBMITTED:
Jennifer Ruedy
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: