MINUTES OF THE
SENATE Committee on Government Affairs
Seventy-First Session
February 7, 2001
The Senate Committee on Government Affairswas called to order by Chairman Ann O'Connell, at 2:01 p.m., on Wednesday, February 7, 2001, in Room 2149 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 Ann O'Connell, Chairman
Senator William J. Raggio, Vice Chairman
Senator William R. O’Donnell
Senator Jon C. Porter
Senator Joseph M. Neal, Jr.
Senator Dina Titus
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Senator Valerie Wiener, Clark County Senatorial District No. 3
Assemblyman P.M. “Roy” Neighbors, Esmeralda, Lincoln, Mineral and Nye Counties Assembly District No. 36
Senator Mike McGinness, Central Nevada Senatorial District
STAFF MEMBERS PRESENT:
Kim Marsh Guinasso, Committee Counsel
Juliann Jenson, Committee Policy Analyst
Ricka Benum, Committee Manager
Julie Burdette, Committee Secretary
Sherry Rodriguez, Committee Secretary
Sharon Spencer, Committee Secretary
Laura Hale, Committee Secretary
OTHERS PRESENT:
James N. Gardner, President, Gardner Engineering, Inc.
Joseph L. Johnson, Lobbyist, Sierra Club, Toiyabe Chapter
Jan Gilbert, Lobbyist, Northern Nevada Coordinator, Progressive Leadership Alliance of Nevada
Ward Patrick, Deputy Manager, Professional Services, State Public Works Board, Department of Administration
Larry Lomax, Registrar of Voters, Clark County
Alan Glover, Clerk/Recorder, Carson City
Barbara Reed, Clerk/Treasurer, Douglas County
Roberta A. Gang, Lobbyist, Nevada Women’s Lobby
Joe Edson, Lobbyist, Field Organizer, Progressive Leadership Alliance of Nevada
Elizabeth Pederson, Lobbyist, League of Women Voters of Nevada
John P. Sande III, Lobbyist, Airport Authority of Washoe County
David Pursell, Executive Director, Department of Taxation
Jerry McKnight, County Manager, Nye County
Richard L. Carver, Chairman, Board of Commissioners, Nye County
Thomas J. Grady, Lobbyist, Executive Director, Nevada League of Cities and Municipalities
Chairman O’Connell reviewed Senate Committee on Government Affairs Rules For The 2001 Session (Exhibit C), and drew attention to Rule 11 regarding the availability of audio and video recordings the day following the meeting.
SENATOR PORTER MOVED TO ADOPT THE COMMITTEE RULES.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman O’Connell introduced Senate Bill (S.B.) 22 as the next item of business.
SENATE BILL 22: Revises provisions relating to retrofitting of governmental buildings for energy efficiency. (BDR 28-288)
James N. Gardner, President, Gardner Engineering, Inc., testified at Senator Townsend’s request and submitted a report to the committee: Implement an Energy Program, Everyone Benefits (Exhibit D. Original is on file in the Research Library.). The report includes data on retrofit projects that saved the University of Nevada, Reno, $1.346 million annually. He pointed out the state could save $5 million per year with no out-of-pocket costs, if 1800 of 2000 state buildings that are candidates for retrofit projects had this done. He stated this bill is needed to allow more projects, beyond the current $5 million cap on financing.
Mr. Gardner provided background information on current energy systems. Buildings built from the 1950s through 1990s utilize inefficient heating and cooling systems that mix both hot and cold air. They should be converted to “non-mixing” systems. Model systems allow changes of insulation, windows, heating, and so on.
Mr. Gardner made two suggestions regarding the current bill: 1) Increase the cap from $5 million to $200 million, and; 2) Substitute “economics” for “prices” in paragraph (d) of subsection 4 of section 1. Senator Raggio suggested changing the wording to “prices and potential savings” should cover the issue of economics.
Mr. Gardner voiced a concern regarding the requirement for debt repayment on or before May 1, 2013, as in section 1, subsection 6. A time frame of 7 to 8 years might be better, as this is a reasonable period of time for payback. Senator Raggio suggested that testifiers could come back to the committee as the year 2013 draws closer.
Mr. Gardner noted that the italicized language in section 1, subsections 12 – 14 is confusing. Also, Mr. Gardener submitted a copy of a Third Amendment Shared Savings/Utility Service Agreement (Exhibit E), and suggested it be considered so that the state is not liable for funding. In response to a question from Senator Care, Mr. Gardner responded that projections for savings have not been made based on increased utility rates.
Joseph L. Johnson, Lobbyist, Sierra Club, Toiyabe Chapter, voiced support for the measure, adding that he understood section 1, subsection 13 would allow this electricity to be counted under the .5 percent portfolio standard for utilities that sets a goal for inclusion of renewable resources.
Jan Gilbert, Lobbyist, Northern Nevada Coordinator, Progressive Leadership Alliance of Nevada, also voiced support for the bill, particularly the renewable resources piece that could increase the portfolio of renewable resources.
Ward Patrick, Deputy Manager, Professional Services, State Public Works Board, Department of Administration (Energy Retrofit Coordinator), also voiced support for the bill, pointing out the state can perform energy retrofit work that normally requires capital dollars. By entering into this agreement, those improvements could be paid for by operating dollars. Responding to a question from Senator O’Connell, Mr. Patrick stated that the bill does not limit renewable resources to those identified in paragraph (a), subsection 14, of section 1, as it is permissive language.
Kim Marsh Guinasso, Committee Counsel, clarified they would have to be renewable resources that fall under this definition. Chairman O’Connell stated she does not think these resources supply enough energy to produce that kind of savings. Mr. Patrick responded to a question from Senator Titus that state agencies now can get energy from wherever it is most appropriate.
Senator Titus noted that this bill does not really change what agencies can do now. Further, if it takes 8 years to have savings beyond paying for the retrofit, it would not have an immediate effect anyway. Senator Titus stated she was unclear as to why environmental groups would support this bill. Mr. Patrick offered his opinion that environmental groups may support this bill because it could reduce emissions and use of fossil fuels.
Senator Titus asked if this bill would reduce “what we ask power companies to do in the portfolio.”
Chairman O’Connell stated that both Sierra Pacific Power Company and Nevada Power Company have the highest portfolios for renewable energy at about 11 percent.
Senator Titus suggested this bill could undermine the already small percentage requirement for renewable resources in the portfolios and the language implies that utilities could designate resources as renewable, whether they are or not.
Ms. Gilbert said she understands that there are hopes to increase the renewable resources portfolio. If people who purchase energy can designate that they wish to purchase alternative energy, it would stimulate the economy of those renewable resources. She stated that the language in subsection 13, of section 1, is confusing and it is not the organization’s intent to allow designation of “renewable energy resources” regardless of whether they are renewable or not.
Mr. Patrick explained that the State Public Works Board recommended an increase from the $5 million cap to $20 million, based on its capacity to implement projects. Projects of $5 million per year could be implemented through a uniform contract established in October 2000. He said the Legislature could review progress after the $20 million level is reached. Approximately $10 million in projects have been requested by state agencies. If additional projects were solicited by agencies that should have energy retrofitting done, it would be in the area of $50 million. Mr. Patrick asked if the Legislature wants to maintain control of this debt which would fall under the constitutional 2 percent debt limit.
Senator Raggio explained that any contract in excess of 4 years is required to be included in the total state debt. If financing were authorized through contracts, it would have to be added into the total state debt, he said. A test case is pending to reverse this requirement. Senator Raggio requested Committee Counsel to verify the accuracy of his statement.
Mr. Patrick continued with a recommended change regarding the date of May 1, 2013, under section 1, subsection 6, specifically, it should extend another 10 years to allow implementation of 7- to 8-year projects, 5 years from now. He concluded that the State Public Works Board supports revisions to the proposed legislation and the estimated positive cash flow projects are in the $50 million range.
Chairman O’Connell closed S.B. 22 and opened S.B. 27.
SENATE BILL 27: Establishes minimum size for print on sample ballots. (BDR 24-504)
Senator Valerie Wiener, Clark County Senatorial District No. 3, provided written copy of her testimony (Exhibit F), noting that she was incorporating the following changes in her oral presentation to the committee: a) Introduced herself as State Senator for Clark County District 3 and a member of the Aging Commission; b) replaced “LCB” with Legislative Counsel Bureau; c) referenced exhibit with sample point sizes; d) changed second date for the printing of registration forms from July 1, 2003 to July 1, 2001; and e) changed reference to visually impaired to visually challenged.
Senator Wiener also provided a document with sample point sizes (Exhibit G), Age Party Summary (Exhibit H), a table from the Clark County Election Department, and Proposed Amendment to Senate Bill No. 27 (Exhibit I).
Senator Wiener reviewed the purpose of S.B. 27 and stated that she had worked with Larry Lomax, Registrar of Voters in Clark County, after drafting the bill. As a result, changes are requested to be more cost-effective.
Larry Lomax, Registrar of Voters, Clark County, stated that a mandate for point size is a mandate for cost. He stated he would prefer flexibility to specific font size requirement. An increase to 12-point font for the two main pages would increase printing cost by one-third, or about $150,000 to $200,000. Larger print versions can be printed upon voter request and mailed to individual voters. Senator Porter asked the size of the print on the ballots in Clark County. Mr. Lomax responded that the print size on the ballots is 24 point. He provided copies of the Official Sample Ballot (Exhibit J. Original is on file in the Research Library.) and Ballot Questions (Exhibit K. Original is on file in the Research Library.) to committee members.
Mr. Lomax explained that last year, ballots with 20-point print were available for anyone who requested them and were available at every polling place. Increasing to 14-point from 11-point on the sample ballots would add one page for every six. At three cents per page, that is about $18,000 to $20,000. The estimate for 2004 is approximately 700,000 registered voters.
Senator O’Donnell asked if it is possible to require print size of 14-point or larger, when practicable and available, leaving it up to individual election departments to estimate the number needed in 14-point. Mr. Lomax responded that the questions section of the ballot can be increased to 12-point font, but he would like to keep the same font for the center of the ballot, providing it in 14-point font to anyone who requests that. Further, it could be noted on the front of the sample ballot that voters can call to request larger font.
Senator Porter asked if the extra cost is because of the fold-out section. Mr. Lomax affirmed that the extra cost is because of the fold-out section and said that his office wants to be able to duplicate the actual ballot and another page could be added with the candidates, if necessary. If extra space is available, additional material can be squeezed in. The goal is to help the voters as much as possible.
Alan Glover, Clerk/Recorder, Carson City, provided copies of sample ballots with 10-, 12- and 14-point type (Exhibit L. Original is on file in the Research Library.). He stated that in the last election, 25,000 sample ballots were printed at a cost of $7800. Increasing to 14-point type would increase cost to $13,500. Also, the possible increase in weight could increase bulk rates and mailing costs.
Mr. Glover explained that larger point-size ballots are printed for people known to be visually impaired and are also printed on request. Keeping a running mailing list of people requesting them over the years would help. Mr. Glover also pointed out there is a program in Carson City for people who are visually impaired that includes audio and tactile features; only two people used it.
Barbara Reed, Clerk/Treasurer, Douglas County, reviewed sample ballots used in Douglas County that have 12-point font for candidates and 9- or 10-point font for questions. An increase to 14-point font would increase sample ballots from 20 pages to 28 pages at an estimated cost of $6000 over that of the last general election. Ms. Reed pointed out ballots with larger print were not printed, but none were requested. She said she would like to have them available for the growing senior population in Douglas County, but would not want to be required to print all ballots with larger font. Ms. Reed also informed the committee that Robert S. Hadfield, Lobbyist, Executive Director, Nevada Association of Counties, could not attend this hearing, but is supportive of this resolution.
Senator Care asked if Braille sample ballots are available. Mr. Glover responded that a tactile ballot is used in Carson City which is a modified Braille, however, some visually impaired people still like someone to help them.
Mr. Lomax noted his support for the section of the proposed amendment that allows less than a 12-point font for a portion of the sample ballot. Senator Wiener nodded agreement to show support for this amendment.
Senator Wiener testified that in her earlier discussion with Mr. Lomax, he stated that he would make the print on the center section of the sample ballot as large as possible while still creating the facsimile of the actual ballot, because that is what people take with them.
Roberta A. Gang, Lobbyist, Nevada Women’s Lobby, testified support of the bill and amendments.
Joe Edson, Lobbyist, Progressive Leadership Alliance of Nevada, stated that he is a field organizer for the Get Out the Vote Campaign and stated support of the bill.
Elizabeth Pederson, Lobbyist, League of Women Voters of Nevada, stated support for the bill and provided written copy of her statement (Exhibit M).
Chairman O’Connell closed S.B. 27 and opened S.B. 38.
SENATE BILL 38: Revises provisions governing Airport Authority of Washoe County. (BDR S-775)
John P. Sande III, Lobbyist, Attorney, Airport Authority of Washoe County, recommended a cleanup on subsection 4, section 1, that would require a city to make trustee appointments by June 15 in the year the member is required to be appointed. He also suggested a change to section 2 amending the airport authority enabling act.
Mr. Sande stated that subsection 3 of section 2 of Nevada Revised Statutes (NRS) 332.105 is not a good policy because it does not allow a local government to require a financial statement from a bidder if a bond is required from that bidder. Senator Neal asked what the bill would do. Mr. Sande responded that if a bond is required, a financial statement could also be required. Senator Neal asked to what this would be applied. Mr. Sande responded that the bill could apply to airport concession, construction, or anything that has a request for proposal that is subject to the Local Government Purchasing Act.
Senator Care asked if this bill is in response to specific litigation. Mr. Sande responded that there has been no litigation, but the issue was raised in review.
Senator Raggio disclosed his membership in Jones Vargas law firm, which is the same firm in which Mr. Sande is a member. He stated that having a bond does not always mean that you get prompt payment. He said he is unclear why this was in the Local Government Purchasing Act and although this was proposed by the Airport Authority of Washoe County, local governments should take a look at why this language was in the bill in the first place. Local governments should have the ability to ask for performance bonds and financial statements.
Chairman O’Connell noted there are two issues before the state right now that this bill might have helped.
Senator Neal asked if the proposed language would allow a local government to deny an individual contract based on an insufficient financial statement, although a bond is obtained. Mr. Sande affirmed Senator Neal’s statement and gave an example of shell corporations that could be formed with no way to look at the track record or capacity to perform. Senator Neal asked if there were known cases of this happening. Mr. Sande stated he was unaware of any in the public arena, but through law practice, he said he has seen many cases of misrepresentation when financial statements are reviewed.
Senator Neal asked how this bill would affect requirements under the Federal Aviation Administration, such as minority contracts. Mr. Sande stated he did not think there would be any effect at all.
Chairman O’Connell closed S.B. 38 and requested committee counsel to address a bill draft request (BDR) introduced by Senator Raggio.
Ms. Guinasso provided copies of a draft for amending NRS 271.515 (Exhibit N). She pointed out NRS 271.487 allows the governing body of a local improvement district to set rates of interest on a periodic basis; however, the provisions of subsection 1, paragraph (c) of NRS 271.515 require that assessment bonds must bear interest currently payable annually or semiannually. The BDR would allow for the payment of the interest at such intervals as determined by the governing bodies.
Senator Raggio stated that Richard Jost, a partner in the Las Vegas law firm, would be able to testify to the exact situation.
SENATOR RAGGIO MOVED TO REQUEST A BILL DRAFT TO AMEND NRS 271.515.
SENATOR CARE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY
*****
The hearing on the dissolution of the City of Gabbs was opened by Chairman O’Connell.
David Pursell, Executive Director, Department of Taxation, reviewed and provided a copy of a time line on City of Gabbs Severe Financial Emergency Status (Exhibit O). A “severe financial emergency” was declared by the Department of Taxation at a meeting with the Nevada Tax Commission on October 4, 1999, at which time, the Department of Taxation took over management of the city. Mr. Pursell pointed out that increasing sewer and water fees, or increasing property tax rate to the constitutional maximum of $5, would not be sufficient to balance the budget. The city is currently at the statutory tax rate of $3.64. Mr. Pursell also said that there is a $500,000 debt for the water system and the department projects a budget that would be just enough to service the interest and very little principal. If the city of Gabbs votes against dissolution, the county of Nye will have to subsidize their services for another 2 years.
Mr. Pursell continued with some background information, stating that currently, the city employs one full-time maintenance person and one part-time clerk. The population in 1987 was approximately 1100; currently it is between 420 and 450. Review by the Commission on Economic Development found no prospects for improvement in the near future with Premier Mine having been recently sold. Mr. Pursell stated the Department of Taxation projects no improvement within the next 3 years that would enable the city to pay its debts; therefore, without subsidization from Nye County, the city would go forward with a deficit balance for the next 2 years.
Senator Raggio asked if the city has issued any bonds for which the state is the guarantor, or any long-term contracts that would be affected. Mr. Pursell responded that the indebtedness is for the water system and is nothing that would be associated with the state.
Assemblyman P.M. “Roy” Neighbors, Esmeralda, Lincoln, Mineral and Nye counties, Assembly District No. 36, added that if the city were dissolved, there would still have to be a debt rate set to pay off the debt.
Mr. Pursell explained that the request is for the Legislature to look at a bill draft so that something can be done before the session ends, so that the question of dissolution will not go to election in the city of Gabbs and be voted down. If that happened, and Nye County did not subsidize, he stated there is not enough money to meet the service needs as it is right now.
Senator Raggio asked if there is a vote to not dissolve, whether the Nevada Tax Commission has the authority to set the tax rate to the $5 constitutional limit, notwithstanding the statutory limit of $3.64.
Mr. Pursell responded that in the current financial difficulty statute the rate can be set to the $5 constitutional limit. The service fees could be increased, but they would have to increase tremendously to be sufficient. Senator Raggio asked if this situation occurred through declining population and assessed value. Mr. Pursell affirmed this, adding that the closing down of a mine also had an impact.
Assemblyman Neighbors summarized two proposals: 1) Repeal the chapter of the statute that created the charter for the City of Gabbs, and Nye County would take over upon the effective date; 2) Repeal the city charter and make changes to the provisions governing dissolution in severe financial emergency to not require an election, but give authority to the Nevada Tax Commission.
Ms. Guinasso reviewed the proposals (Exhibit P and Exhibit Q). The first proposal (Exhibit P) provides for the disincorporation of the charter and enables that to occur without the election.
Senator Raggio asked where disincorporation would leave Gabbs regarding governance, tax assessment, and water system issues. Ms. Guinasso stated that according to chapter 269 of NRS, on unincorporated towns, Gabbs would immediately become an unincorporated town and would be governed by the county board of commissioners. The residents would have the option of creating, by petition, a town board.
Senator O’Donnell asked how the residents feel about disincorporation. Assemblyman Neighbors related some of the history of this issue stating about a year ago, the county treasurer made a mistake. Excess funds were given to the city and spent before the error was corrected. He said the county manager expressed that there was a problem with Gabbs and they would support doing away with the charter.
Senator Mike McGinness, Central Nevada Senatorial District, responded that he had not heard from any residents regarding disincorporation of Gabbs.
Senator O’Donnell asked whether Nye County is willing to assume the responsibilities of Gabbs. Jerry McKnight, County Manager, Nye County, testified that in June 1999, Mayor Lumsden and the City of Gabbs City Council had agreed to support dissolution following the county treasurer’s error of allocating $53,817 that had been spent before it could be corrected. In addition, a $35,000 contract for services from the county sheriff’s office had not been paid for 2 years. Mr. McKnight added that shortly following their agreement to support dissolution, an election was held and Mayor Lumsden and some council members were replaced. With regard to the feelings of the citizens of Gabbs, according to Mayor Lumsden, some feared disincorporation, but were more agreeable when they learned more about it.
Mr. McKnight continued testimony, stating the board of county commissioners had agreed to let the Department of Taxation try to improve the financial situation through its management. Further, the commissioners have agreed to be responsible for the debt, but do not want to totally subsidize the utility operations. Mr. McKnight said, regardless of the outcome, the citizens of Gabbs need to pay for their own basic services. The proposed rate increase the Department of Taxation has calculated would still need to go into effect to maintain the utilities as viable services to the community.
Senator Raggio asked how the rate increase could be accomplished if the charter is revoked. Mr. Pursell responded that the first proposal would not accomplish the rate increase. The second proposal would allow retention of the taxing district and the tax rate could stay in place. Ms. Guinasso clarified that both versions provide for retention of the tax rate through chapter 269 of NRS because Gabbs would automatically become an unincorporated town.
Senator Porter asked if there has been dissolution of an incorporated city before. Senator Raggio responded that this is the first time. Senator Neal asked if conditions could not be corrected within the 3-year period allowed by law.
Mr. Pursell responded that conditions could not be corrected within the 3-year period. He asserted with the declining values and population, in addition to problems with a landfill that the county helped close down, there could be additional costs.
Senator Neal asked if the county has sufficient resources to provide services to Gabbs. Mr. McKnight responded that the county currently provides some services and may need to retain additional services, so would like to keep the taxing district in place. He stated, “Even going to a $5 rate is not going to come close to what it would actually take for them to function as a city and provide city services.” Mr. McKnight added the commission has made a commitment to provide services and would pay off the existing debt. The commission will keep the revenues in place so that the town would accumulate resources so they could do their own maintenance and be able to maintain that system in the future.
Senator Titus asked how they could be charged a higher tax rate than other unincorporated areas of the county. Mr. McKnight responded that other unincorporated areas of the county develop their own budgets and have town boards through consensus. They have a tax rate to support the services that community wants. A town meeting has been suggested to explain to the citizens of Gabbs how this process works.
Senator Titus asked if other town boards had an imposed $5 tax rate upon which they had not voted. Mr. McKnight responded that no other towns are in this situation.
Senator Titus reviewed prior testimony for her understanding that Gabbs is under the domain of the county because it is financially strapped and the $5 rate can be imposed by a nonelected body. She said, “It seems kind of bad that the worse shape you are in, the higher tax you have got to pay.”
Mr. McKnight responded that the tax rate would not continue. The only thing that would continue would be the fees for services. The county would keep the utility fees in place and the debt rate in place until the county either retires the bond or the issue is dealt with. The tax rate would then drop down to a level comparable to other areas of the county.
Mr. Pursell added that the $5 rate is specific to NRS 354.723 with an option that could be used if the community votes against dissolution. Any other district cannot exceed the legislative limit of $3.64.
Ms. Guinasso clarified that the $5 rate is only applicable to local governments that are in severe financial emergencies and subject to management by the Department of Taxation. If the City of Gabbs were disincorporated, those provisions would not apply and the statutory limit would apply there.
Richard L. Carver, Chairman, Board of Commissioners, Nye County, testified that the county is concerned about what the outcome would be if Gabbs residents voted. Many of the residents are on fixed incomes and cannot afford additional fees. The board of commissioners is currently committed to providing services to Gabbs and would like to be able to take action before redistricting could possibly change that commitment.
Thomas J. Grady, Lobbyist, Executive Director, Nevada League of Cities and Municipalities, testified that these problems have existed for some time. Gabbs will be audited for the first time in 3 years and the auditor is having a very difficult time. In conversation with the city clerk, he reported that she said if it went to a vote, she believes the community would vote to remain incorporated. Senator Porter asked how many other communities have this kind of problem and whether they were receiving audits. Mr. Grady responded that no other communities are close, but audits are being made in some cases.
Chairman O’Connell summarized that Mineral, Lander, Esmeralda, Lincoln, and White Pine Counties all have problems. The only choice they have is to come to the Interim Finance Committee. “It’s much better to teach them how to fish than to keep feeding them the fish. We must do something to strengthen the center part of our state.”
Senator Titus stated her inclination is to deal with the issue in terms of Gabbs instead of giving a nonelected body so much authority.
Chairman O’Connell concluded that on Friday, the committee would like to hear from representatives again, after everyone has had a chance to review the proposals.
The meeting was adjourned at 4:45 p.m.
___________________________
Laura Hale,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE: