MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
February 6, 2003
The Committee on Government Affairswas called to order at 8:38 a.m., on Thursday, February 6, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Wendell P. Williams, Vice Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Tom Collins
Mr. Pete Goicoechea
Mr. Tom Grady
Mr. Joe Hardy
Mr. Ron Knecht
Ms. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblywoman Dawn Gibbons
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Nancy Haywood, Committee Secretary
OTHERS PRESENT:
Robert S. Hadfield, Executive Director, Nevada Association of Counties
Andrew Alan List, Policy and Research Coordinator, Nevada Association of Counties
Lynette Boggs McDonald, President, Nevada League of Cities and Municipalities, and Councilwoman, City of Las Vegas
Mary Henderson, Lobbyist/Government Consultant, Nevada League of Cities and Municipalities
Ron Schmitt, Second Vice President, Nevada League of Cities and Municipalities, and Council Member, City of Sparks
Michael R. Alastuey, Clark County
Stephanie Licht, Legislative Consultant, Elko County
Chairman Manendo called the meeting to order and the roll was taken. He directed the Committee secretary to mark Assemblyman Collins as present upon his arrival.
Chairman Manendo welcomed all visitors and presenters to the Committee on Government Affairs. First on the agenda, stated Chairman Manendo, was an overview from the Nevada Association of Counties (NACO). The presenters, Mr. Robert Hadfield and Mr. Andrew List were welcomed by the Chair and thanked for having prepared the presentation.
Mr. Hadfield introduced himself as the Executive Director of the Nevada Association of Counties (NACO), then introduced Mr. Andrew List, Policy and Research Coordinator, NACO. Mr. Hadfield thanked Chairman Manendo and the Committee for allowing NACO to come before them to highlight reasons as to their visibility and frequent presence in the Committee meetings. He extended his appreciation of the introductions of Committee members on February 4, 2003, and stated that he would spend some time giving the Committee his own personal history. Mr. Hadfield explained he had been working for county government for over 25 years with 9 years of that time spent as Douglas County Manager. The remaining years had been spent as the Executive Director of NACO. During that time, Mr. Hadfield reported attending 13 regular legislative sessions and 3 special legislative sessions. He had actually calculated the amount of time in legislative sessions and found he had spent close to four years of his life inside the legislative building. Having been part of the legislative process for a long period of time, he expressed excitement to have the opportunity to work with an entirely new group of assembly members assigned to the Committee on Government Affairs. While not all assigned members were first-term legislators, none had prior experience serving on the Government Affairs Committee.
Mr. Hadfield speculated that some Committee members must have wondered why there were so many town and county government representatives present in the building and in the Committee room itself. The counties, he continued, were governed by state statutes, constitutionally formed, and had only those powers specifically granted them by the legislative body. Throughout the session, legislators would receive many bills relating to county operations; they would come to the Assembly Committee on Government Affairs and the Senate Committee on Government Affairs to request changes in how counties operate to meet the needs of their citizens.
Those involved with NACO had many responsibilities but, clearly, stated Mr. Hadfield, legislative advocacy was one of the most important. He concluded his remarks and requested that the members of the Committee view representatives of NACO as resources on Nevada’s 17 counties. As an association, NACO represented all of the counties and operated on consensus. He emphasized that when a measure was brought before the Committee, it represented an agreement by all counties as important and broad enough to represent the needs of all. There would be a large number of other bills brought by individual political entities, he reported, which had particular needs that would not have an impact on other parts of the state.
Mr. Hadfield again encouraged legislators to call with any questions regarding counties. He then introduced Mr. List who had a briefing document, “The Fiscal and Economic Trends in Nevada” (Exhibit C), to present to the Committee. The hope was that the document would help explain and highlight some of the counties’ issues.
Mr. Andrew List, Policy and Research Coordinator for NACO, stated he had been with NACO for nearly 2.5 years and reported directly to Mr. Hadfield. Mr. List reported that he also held a law degree and, when necessary, did legal work for the counties. Exhibit C was the compilation of data about current trends in the 17 Nevada counties. Those were prepared for all legislators but the members of the Committee on Government Affairs were the first to receive them. It was intended for use as a reference document, he confirmed, when statistical information and other facts were quickly needed about the counties. Each county was presented in a similar format; first, there was a brief history of the county followed by population figures, then major employers and industries, revenue data which included sources of income and areas of expenditures, and a list of specific county concerns. All 17 counties were included in alphabetical order.
Mr. List spoke of the Bill Draft Requests (BDRs) tied into the document. According to him, the economic conditions in several of the counties were not positive, as the declining figures would indicate. Population trends, declining assessed value trends, and declining taxable sales trends were definitive of struggles experienced by some individual counties. When those factors came together, Mr. List explained, an economic storm ensued in those counties. In those times, he postulated, counties could only respond by cutting back services and employees or by instituting attrition policies. One additional effort to deal with this would be to attempt to gain flexibility in the way in which the counties were doing business to achieve what they were mandated through legislation to achieve. NACO’s BDR package was designed to advocate for county flexibility needed at that time.
Referring to the briefing document, Mr. List expounded on numbers and figures included therein. As he examined the population figures received from the Nevada State Demographer’s Office, he clarified the process used to gather those figures. Census numbers from the most recent census were only a starting point. From there, demographers worked backwards to see what the numbers actually were prior to that census. The populations of several counties were declining as exemplified by information about Lander, Mineral, Pershing, and White Pine counties. In Mineral County, the population had declined by 32 percent since its peak in 1992.
Total revenue was the next area of attention. Total revenues in several counties were noted as declining, as was population. To build that picture, Mr. List gathered data on property tax and sales tax revenues in each county. Property taxes tied into assessed values were directly related; the more the property was worth, the more opportunities the county had to generate revenue. Mr. List advocated caution be taken to avoid generalizing that increased values always resulted in increased revenue. In years when fiscal conditions were better, some counties chose to cut taxes on property. He explained that the assessed values of properties, taken from the Department of Taxation, had also dropped precipitously in some counties. Mineral County was used to demonstrate this decline. Property values that peaked in 1996 declined to a point that was less than their values in 1991. Inflation was not considered in these figures. Mineral County projected, at the beginning of FY2002, to have a zero contingency balance with an ending fund balance of zero, which placed it on the edge of a major fiscal crisis. More information is available on page 43 of Exhibit C.
Taxable sales in smaller counties such as Lander County peaked in 1997, continued Mr. List. Since then, compared to the 2002 level, they had dropped 61 percent. Primarily, this was due to mining activities that peaked in 1997 with larger numbers of people buying goods and services, as well as the mining companies themselves purchasing within the county.
The last factor considered was county expenditures. Mr. List queried as to what happened when counties lost a large amount of revenue and what the options were. He postulated that employees would be cut, services would be decreased, and certain areas of county budgets would be eliminated. In support of that allegation, he reported that Elko County had removed the Culture, Recreation and Community Support spending categories from the General Fund, which formerly accounted for 5.8 percent of the budget. Those areas of expenditure were determined to consist of nonessential programs. Mr. List challenged Committee members to look at the public safety category, for comparison, which accounted for 41 percent of the General Fund. Public safety was deemed absolutely necessary and essential, and the county was mandated to provide services in that area. Many counties had found that the mandated programs, services, and judicial expenditures utilized all available funds.
Mr. List closed with the hope that, when using this reference document, legislators would feel more fully informed as they considered legislation that would allow the counties more flexibility in providing services to their citizens. He offered to answer any questions legislators had at that time.
Chairman Manendo asked if there were questions from Committee members and recognized Assemblyman Ron Knecht. Mr. Knecht asked if it would be feasible to construct tables that had the dollar figures within the document adjusted for both inflation and population. He believed it would make it clearer to him, and perhaps to others, to look at revenue and expenditure figures in per capita real terms.
Assemblyman Tom Grady spoke to both Mr. Hadfield and Mr. List about the contention of Mr. Marvin Leavitt, former financial advisor to the City of Las Vegas, who reportedly stated that when mining came into an area, there was a high sales tax generated initially. However, as time passed, the revenues thus generated had an adverse effect on that county. Mr. Grady requested opinions from one or both of the speakers on this premise.
Mr. Hadfield noted that past history led to assumptions that all mining companies operated alike. Historically, he reported, mining companies that had initiated operations had purchased huge amounts of equipment, built new mills, and developed local processing plants for the ore. In the recent consolidation of business in general, however, mining companies hauled equipment from one location to another and transported ore to existing mills even in other counties. Basic industries changed their operational parameters, which resulted in some differences and changed what taxes were paid and to whom. In addition, the industries were granted more and more exemptions. It was a difficult situation to understand given the fluidity of the situation. He clarified that the counties were seeing companies cut back, increase their efficiency, and seek more cuts in the various obligations they had, such as taxes. In general, Mr. Hadfield agreed with Mr. Grady but emphasized that that was an ever-changing situation.
Chairman Manendo asked where Mr. Hadfield and Mr. List believed the largest cuts in county budgets were made.
Mr. Hadfield opined that the judicial branches in counties were seldom reduced as a result of the “separation-of-powers” debates that took place from time to time in various counties. Counties found it very difficult to cut public safety budgets; those areas were very close to the people, and services in that area were very visible. What happened, in reality, were cuts in the less-visible areas, as in the administrative areas of county government: the Assessor’s Office, the Clerk’s Office, and the Recorder’s Office. Since most private citizens had seldom done business in those offices, most cuts in those areas had gone unnoticed. General Fund functions of county government had suffered large cutbacks, excluding judiciary and public safety/law enforcement responsibilities. There were exceptions, however. For example, the jail in Mineral County, which needed both a male and a female officer available even when there were no prisoners, had to cut four deputies from the force. Certain functions had to be maintained or the counties would subject themselves to potential litigation that could be devastating. Elected officials postponed making cuts as long as possible. Cuts were often made in desperation. Usually those cuts were in non-public safety and non-critical services, such as ballparks in slight disrepair or in shortened library hours. As a result, county workers had longer hours and agencies had fewer people. Even in growing counties, larger populations did not necessarily result in stability. With increased populations came a greater demand for increased citizen services.
The counties were in partnership with the state in providing many services. Mr. Hadfield explained that the counties were the safety net for welfare and health services. Before any person was placed on the state’s welfare rolls, that person had already entered the county offices and requested assistance. Counties would pay utility bills and would help in other ways until the state or federal program qualifications had been met. In economic downturns, counties dealt with citizens who were unemployed by virtue of layoffs, cutbacks, or delayed employment by providing programs to help them and their families survive until employment was again gained. Counties were acting as short-term services providers.
Mr. List drew Committee members’ attention to statistics and information on Washoe County, which experienced revenues that kept up with growth. Despite that, the county had eliminated 40 positions permanently, 200 positions were held vacant at the time of the report, and programs and service levels were reduced by a total of $11 million from 2001 through 2003. The projections were to cut an additional $18 million in FY2004. If that were to happen, Mr. List explained, there would be a permanent elimination of 127 jobs and a freeze of 200 vacancies in Washoe County alone. Elko County also had an attrition policy in place, as did Lander County, whereby, when a vacancy occurred, the department had to go to the County Commissioners to justify that position before it would be filled. If justification were not possible, the people in that department would be asked to do more with fewer resources. Another example came out of Mineral County where there was an unfilled position of Assistant District Attorney, which left the District Attorney with the full burden of all Court proceedings, District, Civil and Criminal.
Assemblyman Hardy requested an explanation of the term “flexibility” as used in bill drafts referenced in Exhibit C.
Mr. Hadfield stated that flexibility, as used in the report, had a special connotation. He explained that, historically, NACO spoke of the power needed for counties, also called home rule, to address their issues. NACO then spoke of county rights because home rule was a very difficult and controversial concept. He said the use of the term “county rights” was not any more acceptable; “flexibility” became the word most currently favored. Cities had limited home rule when they had chartered governments, and counties would have to do the same things as the cities unless population caps were in place. Mineral County, for example, did not have the same issues as Clark County and Washoe County. By using the population caps for those two larger counties, issues specific to them would be separated out. One rule, he noted, no longer fit all. Each county in Nevada was so different and diverse that, out of necessity, the way each functioned would no longer be the same. Services and offices were consolidated as a result of that disparity but only when the Legislature gave permission. General service areas were identified in the report as those in need of greater flexibility. When those measures were brought to the Legislature in 2001, NACO wanted permission to expand options for counties similar to those that cities had available to them. A simple example given was the county’s response to a citizen with a vicious dog. A county’s only option, until after the 2001 legislative session, was to jail the citizen, while cities could issue a citation, in addition to or instead of assigning jail time. While that might seem very simplistic, similar issues could become very complicated and intense.
Chairman Manendo reminded the Committee members that there would be future discussion of the BDRs referred to in the report, but discuss them further during the meeting would be inappropriate.
Assemblyman Christensen thanked both Mr. Hadfield and Mr. List for their presentations. His question concerned the style and format of the report and its flexibility. He wanted assurance that if other categories of data were desired, NACO would furnish those to Committee members.
Mr. List agreed to compile any data sets wanted by Committee members and asked if there were specific sets of data requested at that time.
Mr. Christensen replied that he did not have specific sets in mind but would not hesitate to ask should he want one or more in the future.
Mr. Hadfield volunteered to bring resources and speakers to the Committee in the future, at the Committee’s request, should a different level of expertise be needed or desired.
Chairman Manendo thanked the presenters again and stated his appreciation for NACO’s long history of its service as a resource to the legislature.
Next on the agenda was an overview by the Nevada League of Cities (NLC). Chairman Manendo recognized the President of NLC, Lynette Boggs McDonald, also a councilwoman in Las Vegas, Ms. Mary Henderson, lobbyist for the NLC, and Mr. Ron Schmitt, second vice president of the NLC, and a councilman in Sparks.
Councilwoman McDonald presented as the president of NLC and stated that she would be more visible during the session in that capacity than as a councilwoman. The NLC had 24 members with considerable diversity. Cities ranged in size from Las Vegas to Wells. The role of the League was to bring all the member cities, municipalities, towns, and special improvement districts together to support those issues that were common to all. Ms. McDonald acknowledged feeling honored to appear before the former Executive Director, Assemblyman Grady, whom she deemed one of the most knowledgeable in the legislative building as it relates to local government. She also acknowledged the Department of Neighborhood Services’ Administrative Officer for the City of Las Vegas, Assemblyman Wendell Williams, Vice Chairman of the Committee on Government Affairs, and her colleague, Assemblyman Joe Hardy, former Councilman for Boulder City, with whom she had served on many regional boards. She reiterated her pleasure at having so many knowledgeable people on the Committee. Ms. McDonald then introduced Ms. Mary Henderson, the League’s lobbyist, to give a general overview, and Councilman Ron Schmitt of Sparks, Second Vice President of the League and Chairman of the NLC’s Legislative Committee, who would give closing remarks.
Ms. Henderson gave a brief primer about the NLC and showed slides to further Committee member understanding. Copies of the slides and other pertinent information about the NLC were contained in a folder marked Exhibit D. The first slide in the presentation was the mission statement of the League as it was generated at the League’s inception in 1959. NLC was organized to promote communication and legislative advocacy, to distribute information regarding municipal affairs, and to provide technical and other information to member cities. Initially the League was representing small cities and areas with a focus on farming and ranching. That representation changed dramatically over time, although there was still great diversity within the League. She stated it currently represented very small rural communities and major metropolitan areas with two of the fastest growing cities in the country. The emphasis of the League also changed: the League’s members presented themselves as the front-line providers of public safety, public infrastructure, parks, recreation, and of those services that resulted in a good quality of life in the various communities. The members served and had direct contact with 1.25 million people in the state.
NLC membership was comprised of entities that were quite different from one another. Under NRS 266.010, there were General Law Cities defined as “cities incorporated under the law and granted the right of home rule and self-governance.” Other members were towns, special districts, and general improvement districts located throughout the state. The charter cities, which tended to be the larger cities in terms of populations, were members of the League. The League was also comprised of several corporate members listed in Exhibit D, a folder that contained names of sponsors for the League during the annual conferences, as well as those who served as partners with member cities, towns, and municipalities.
Ms. Henderson continued to explain that the task of the League was to provide legislative advocacy, which was accomplished by working with state and federal legislatures; by serving on numerous local, state, and national committees, both as NLC members and as individual city council members; by advocating for the League’s positions; and by putting a bill-tracking system in place. Other responsibilities of the League included attending board meetings, developing annual conferences, creating professional development opportunities for elected officials, constructing specialized programs, and granting public recognition and awards, including a public official award given annually. City council members had expressed great pride in youth awards, including scholarships, and in innovation awards. Additionally, Ms. Henderson stated, there was a group insurance plan in place for individual League members.
As resources to the Committee and to the general public, Ms. Henderson drew attention to the NLC’s newsletters, research documents, the League’s own Web site, statutory oversight, and knowledge gleaned from attendance of and membership on the many statewide committees and boards. Consultation on various issues and topics was another service provided. Issues that would come before the Committee included proposed charter amendments from Carson City, Henderson, North Las Vegas, Reno, and Sparks. Other issues might include these:
All of those issues were deemed important by cities, according to Ms. Henderson. Chartered cities were given more flexibility than counties, but cities were also entities of the state also, and must come to the Assembly Committee on Government Affairs and its counterpart in the Senate for the authority to activate services for their constituents. Although the League wanted to partner with the state to solve problems, they preferred to provide those services not provided by the state. If you looked at city budgets, she continued, 60 percent of those budgets were directed to public safety. When cuts were made, it was to eliminate duplication of other public services such as recreational projects.
The League wanted to be a resource, to gather data, and to coordinate information. Major cities had their own lobby teams in the session and planned to bring their own packages forward. The NLC had its BDR package included in Exhibit D, along with a list of membership contacts. A full cadre of people stood ready to respond from all over the state. Ms. Henderson then turned to Councilman Schmitt.
Councilman Schmitt, City of Sparks, chose to review the legislative steps that the NLC had followed in the past year to come to the Committee with clear issues and concerns in BDR form. NLC looked at some of the negative actions that interfered with the progress of bills for the League during the 2001 session; that analysis resulted in an agreement for a positive approach during the current session. The League’s members had met several times in the past year via teleconferencing to develop the list of issues. The compilation of issues was refined by asking three types of basic questions:
· Could all members support a given position?
· Could Las Vegas support a BDR from Elko?
· Could Elko support a BDR from Reno?
If any answer from any member was a negative one, the League examined the reasons for disagreement and asked if the issues could be resolved before the BDR was issued. If not resolvable, the group elected not to bring that issue to the Legislature. The effort was to eliminate divisiveness and conflict and to present a package supported by all. Throughout 2002, the League reduced its concerns to ten bill draft requests submitted in August. Since then, the NLC had withdrawn one of the ten requests. Essentially, he explained, the League had removed 66 percent of the areas of potential conflict before bringing concerns to the Committee on Government Affairs. The hope was that most, if not all, conflicts had been resolved. It had been a collaborative effort. Should the Committee find that some conflicts came to them anyway, the League promised to assist in the resolution of those conflicts. The focus of the Nevada League of Cities was to bring forth issues that the entire League stood behind. Mr. Schmitt reaffirmed the League’s support in identifying and resolving problems with the Committee and reiterated its support for the Nevada Association of Counties. He further pointed out that both the NLC and NACO were holding their first annual joint conference to discuss commonalities and how to move forward together for the benefit of both entities. The League desired to be part of a very close collaborative effort in helping the Committee with any issue of concern to both the cities and the counties. He offered, again, on behalf of the League, to provide any assistance the Committee and its members needed.
NLC President McDonald spoke again and extended an invitation to all Committee members to attend a reception at the Governor’s Mansion on February 27, 2003, from 4:30 p.m. to 6:00 p.m., and she closed with the hope that each would be able to attend.
Assemblyman Tom Collins made a final parting comment to the Nevada League of Cities presenters that they remember their equestrian citizens.
Chairman Manendo thanked the representatives from the Nevada League of Cities for being present and for helping each member better understand the League and its purposes. Concerned members of the audience were then solicited for their comments.
Mr. Michael Alastuey of Clark County complimented the NACO representatives for their presentation. He affirmed that Clark County stood ready to assist with any analyses that would compliment efforts of the NACO staff. He said that he especially appreciated the comments of Mr. Knecht, stating that he, too, believed that the analyses should be viewed in terms of real per capita dollars, inflation-adjusted, to better characterize the challenges of growth, leveling populations, and diminishing populations in various counties. He also wished to point out to the NLC representatives that unincorporated Clark County provided municipal services much as a city would and provided more services to more citizens than any individual city in Nevada. Unincorporated Clark County had provided police, fire, and other public safety services, as well as countywide justice, social services, and medical care responsibilities for the indigent. To add to information that was circulated with respect to other jurisdictions, Mr. Alastuey focused attention on recent media releases that pointed out that Clark County was suffering its revenue woes as well. As an example, a substantial number of layoffs at the county-supported University Medical Center had occurred. With respect to those jurisdictions that suffer from shortfalls and lower taxable sales or fluctuations in property taxes, those who supported public hospitals also suffered revenue shortfalls in terms of paid patient revenues. Mr. Alastuey then concluded his remarks with the offer that any support needed by the Committee and/or its members would be gladly provided.
Chairman Manendo thanked Mr. Alastuey for his statement and recognized Ms. Stephanie Licht.
Ms. Licht, representing Elko County, spoke in support of NACO and volunteered her assistance should the need arise.
Chairman Manendo reminded the Committee that the starting time for the next day’s meeting would be 8:30 a.m. He also stated that Ms. Susan Scholley, Policy Analyst for the Committee, provided information that a fiscal analysis of Assembly Bill 3 (BDR 23-147), which required paid leave of absence of certain duration for public officers and employees who donated bone marrow or certain organs, heard on February 5, 2003, would be available within a week.
Chairman Manendo adjourned the meeting at 9:28 a.m.
RESPECTFULLY SUBMITTED:
Nancy Haywood
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman