MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
February 17, 2003
The Committee on Government Affairswas called to order at 9:12 a.m., on Monday, February 17, 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
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Rosemary Zienter, Committee Secretary
OTHERS PRESENT:
Mary Henderson, Lobbyist and Government Consultant, Nevada League of Cities and Municipalities
Kent Lauer, Executive Director, Nevada Press Association, Inc.
Chairman Mark Manendo wished all present a happy President’s Day. He announced that A.B. 86 would be first on the agenda.
Assembly Bill 86: Revises provisions concerning purchasing contracts of certain local governments. (BDR 27-338)
Mary Henderson, Lobbyist and Government Consultant, Nevada League of Cities and Municipalities, stated that the bill started out to be a simple bill, but was no longer a simple bill. The bill came to the League of Cities and was approved by its membership. It had actually come out of some of the smaller cities and it would affect county school districts located in counties with less than a population of 100,000. The smaller cities and counties in the state would like to be brought into uniformity with what the larger cities and counties had with regard to purchasing law. She informed the Committee that a copy of Exhibit C had been handed out showing a comparison of applicable statutes relating to contracts in counties with varied populations. Some language appeared in statute that was rather confusing dealing with advertising versus notice of publication and what that truly means. The bill actually expanded greatly the authority of some of the smaller cities and counties well beyond what the larger cities and counties had. The proposal would delete the expanded authority of the smaller cities and counties bringing back uniformity with the larger cities and counties at the $25,000 threshold.
Ms. Henderson asked the Committee to look at her handout outlining the proposed amendments (Exhibit D). She explained that the recommendations were to completely eliminate any reference between $25,000 and $100,000. They attempted to bring the bill into uniformity with what the large cities and counties had, which stated that anything they were purchasing under $25,000 did not require advertising. There was confusion in Section 1, subsection b, and Section 1, subsection d, of A.B. 86. Subsection b talked about advertising not being required for purchases under $25,000, and subsection d required advertising on purchasing anything from $10,000 to $25,000 to publish a notice. There had been some confusion as to what “publish a notice” could mean. Ms. Henderson questioned if that meant advertising, publishing it, or posting it in libraries and governmental offices. Ms. Henderson reiterated that the main intent was to allow cities and counties to move forward with their process without having to advertise or publish for anything under $25,000.
Assemblyman Hardy asked for clarification on the numbering used in the proposed amendments to A.B. 86 (Exhibit D).
Ms. Henderson stated that her handout (Exhibit D) designated the recommended changes by page and line.
Mr. Hardy asked for clarification on what the request for change would be pertaining to page 2, lines 13 and 14, of A.B. 86.
Ms. Henderson explained that they proposed leaving in $25,000 on page 2, line 13, and deleting $100,000 on page 2, line 14, of A.B. 86.
Assemblyman Knecht asked if the bill were adopted with the proposed amendments (Exhibit D), would the intent be to make the requirement uniform for all cities and counties in the state to advertise and to seek competitive bids for all amounts over $25,000.
Ms. Henderson responded that Mr. Knecht’s summary was correct.
Mr. Knecht asked if there were any other changes besides standardizing requirements for both advertising and competitive bidding above $25,000 and to not require it below $25,000.
Ms. Henderson explained that there was a notification procedure for $10,000 to $25,000 that would be eliminated.
Assemblyman Knecht asked if there was currently a $10,000 to $25,000 notification procedure that applies only to the smaller cities and counties.
Ms. Henderson responded that was correct.
Assemblywoman Pierce asked for clarification of A.B. 86, Section l, lines 5 and 6, and questioned if “ . . . or if a local government is a city whose population is less than 25,000 located in any county . . .” would be deleted.
Ms. Henderson responded that after consulting with LCB she thought it should be deleted, because it was creating some issues that were unintended; such as, if the population of a city was 25,000 or more and that city was located in a county whose population was100,000 or less. The intent was to clean up the language so it was clear to all.
Kent Lauer, Executive Director, Nevada Press Association, Inc., explained that the Press Association was the formal trade organization for the newspaper industry in the state and they represented 40 newspapers. In 1999 there was a request from Douglas County to raise the bid threshold from $10,000 to $25,000. The threshold for the larger counties, Washoe and Clark, was at $25,000. Douglas County and some of the other smaller counties wanted to be on par with that. A bill was proposed by Douglas County to raise the threshold from $10,000 to $25,000 for any local government outside of Clark and Washoe Counties. As a result of that bill, a compromise was made. Washoe and Clark Counties were opposed to raising that bid threshold to $25,000 because they felt strongly that there should be some notification process where potential bidders, especially small businesses throughout rural Nevada, could have an opportunity to bid on a contract between $10,000 and $25,000. Mr. Lauer gave an example that perhaps a local car dealer wanted to get in on a contract for the purchase of a pickup truck. As a result of that, the bid threshold was raised to $25,000 and anything beyond that they were required to go through formal bidding procedures. However, on the purchases between $10,000 and $25,000 they were required to publish a notice, which was not a formal bid notice but a notice that essentially stated a contract would be awarded for that purpose. Subsequently, if the vendor wanted to get on the bidding list or on a list of the vendors, they were given the address and name of the person to contact. That procedure was called a notice of award. It was basically a two-inch or three-inch legal notice that was published in the newspaper a few days prior to the deadline. That was the compromise reached. They got the bid threshold raised to $25,000, but in the meantime, in order to do that, they still had to publish a notice on all purchases between $10,000 and $25,000 that were going to be awarded by contract.
Mr. Lauer handed out a copy of a notice from the morning newspaper showing what the current purchases were between $10,000 and $25,000 (Exhibit E). He stated that the Nevada Press Association would like to see the notice maintained in the current statute. In the smaller counties, a purchase between $10,000 and $25,000 still represented a significant expenditure. He stated that he believed the public needed to be notified that there were contracts being awarded in that range. It appeared to be just a matter of semantics between advertising and what a notice represented, but it would be helpful if the wording could be clarified.
Assemblyman Collins stated that his understanding was that anything under $10,000, or in a small county that does less than $1 million total, they could go “pick em.” He stated that when it exceeded $10,000 they were required to do a formal, full-bidding process versus “pick up the phone and get two prices.” When the counties picked up the phone and got two prices and documentation, it still had to be published in the paper. Mr. Collins asked if the issue was a formal bid versus an informal bid versus the type of publishing.
Mr. Lauer responded that as he understood it, the desire was to eliminate that section in the statute that required a notice for the purchases between $10,000 and $25,000.
Mr. Collins indicated that he must have misunderstood an explanation he received several days ago. He asked if the desire was to remove the requirement to place a notice in the newspaper when purchase amount would be under $25,000.
Mr. Lauer responded that was his understanding. The League of Cities and Municipalities was seeking a statute that would be consistent with what was required of the larger counties. In the larger counties anything over $25,000 required formal bidding and advertising. They wanted the same statute. They wanted to eliminate the section of the existing statute that would require them to publish a notice for purchases between $10,000 and $25,000. Mr. Lauer stated that would be his understanding of what they were seeking.
Mr. Collins stated that his confusion was that he thought with the amendments anything between $10,000 and $25,000 would require an informal bidding process rather than a formal bidding process.
Assemblyman Goicoechea stated his opinion was that typically local governments did in fact solicit quotes under $10,000. What had been happening was that quotes were solicited and the quote could come in at $11,000. The agency would then be required to go back through the system and actually advertise for a bid. Mr. Goicoechea explained that everyone bought basically the same product for $25,000. In rural Nevada they might buy a little less for $25,000 than in Reno or Carson City but it would still require the “process” and they would go to their bidders’ list and solicit the whole list because they were trying to do the best for their county or respective jurisdiction. Ultimately it would depend on whom the low quote was from. In rural Nevada the local bidders tended to pay more attention to board agendas and board minutes. Prior to anyone in the local jurisdictions seeking a quote, it would be approved and appeared in the minutes of the board. It appeared that what the small local jurisdictions were looking for was equity. He stated that the same thing that applied to Washoe and Clark counties should apply to Elko, Eureka, or White Pine Counties, and the city of Winnemucca.
Assemblyman Grady requested that after Mr. Lauer’s testimony was completed, he would like Ms. Henderson to return to the witness table to clarify if the bidders’ preference list would still be used.
Assemblyman Knecht asked for clarification on his understanding that the reason the notification process in the local county would be on the citizens’ side was because it would be a bigger fraction of their tax bill than it would be in the larger counties. However, it appeared that the larger counties would generate more notifications and, when taken in the aggregate, the fraction of the tax bill would be the same. Since there were more notifications created in the larger counties there would be more opportunity for small businesses to do follow-up that was talked about with the small counties. Mr. Knecht questioned why there should be discrimination in the notification process between the larger and smaller counties and cities.
Mr. Lauer explained that the reason for the different bid thresholds was because an expenditure of between $10,000 and $25,000 in a smaller county would be much more significant than in Washoe and Clark Counties. It would be important to let all the local smaller businesses in the smaller counties be notified that they could perhaps provide the goods or services. The thinking was that they might be shut out if there was not notification.
Mr. Knecht indicated that he followed the explanation and with regard to each individual contract he agreed. If the small county might have had 2 notices and the large county 75 notices, then in the aggregate, less opportunity would have been offered to small businesses in large counties if the same publication were not required. He questioned when they looked at providing opportunities to small businesses in the aggregate, why there was a distinction between small and large. He stated that he agreed on each individual contract, but in the aggregate he did not see the difference.
Mr. Lauer stated that maybe in the aggregate there was not a difference. He believed there should be notification even in the larger counties for smaller purchases. The threshold should be rolled back even in the larger counties to $15,000 where at least a notice must be published. He said they should not be required to go through the formal bid process, but there should be some notification even in the larger counties.
Mr. Grady asked Ms. Henderson to review with the Committee her proposed amendments (Exhibit D). He indicated that he needed to understand that the amendments would not eliminate the notification, but just the amount would change.
Ms. Henderson explained that the change would bring smaller counties into uniformity with larger counties. The change would relate to anything between $10,000 and $25,000 and would not require an advertised notice. The informal bid process would still be required. The requirement to publish a notice would change. In one part of the statute it referred to anything under $25,000 not needing to be advertised and two sections later it stated that anything between $10,000 and $25,000 required publishing a notice. Many questioned what publishing a notice meant. He asked if it meant posting it in the courthouse or libraries or if it required buying an ad. Ms. Henderson said the amendments would require an informal bid process for anything under $25,000, and that would remain the same. The current process could be very costly and very time-consuming to any jurisdiction in the state.
Assemblywoman Koivisto asked what it would cost the smaller counties to have to do the publishing.
Ms. Henderson stated that she would need to pull all of the individual advertising rights to provide the information to the Committee. Added to the cost of publishing would be staff time utilized in putting the notices together and meeting the required procedures. The publishing required equated to a legal notice, and legal notices were a good revenue generator for most newspapers in the state.
Ms. O’Grady, LCB Legal Counsel, asked why in Section 1, paragraph c, where it talked about the contracts between $10,000 and $25,000, it stated that the governing body must submit requests for bids to two or more persons capable of performing the contract, but it did not require that it be from the list in paragraph d of Section 1. Ms. O’Grady asked if that would be a requirement.
Ms. Henderson stated that was a good example of some of the confusion, when purchasing agents who were not lawyers were attempting to determine the intent.
Mr. Collins stated that the bill seemed to be a simple and clean bill with some misunderstandings. Open government would provide notification that the government would be preparing to make a purchase. He stated that in addition to that, timeliness and cost-effectiveness needed to be considered equally.
Ms. Henderson explained that it went back to the issue discussed previously. There would be no difference between a large county and small county. There would be small businesses within large counties and large cities that would consider a $25,000 contract fairly significant. She explained that she did not know why the decision had been made to distinguish between small cities and counties like Winnemucca and Elko versus Reno and Sparks. The purpose of the bill would be to provide uniformity.
Chairman Manendo asked if anyone else desired to speak on A.B. 86. No one responded and the Chairman closed the hearing on A.B. 86.
Chairman Manendo entertained motions to vote on committee introduction for the following Bill Draft Request (BDR):
· BDR 31-322 – Makes various changes concerning local government finance (A.B. 149).
ASSEMBLYMAN WILLIAMS MOVED FOR COMMITTEE INTRODUCTION OF BDR 31-322.
ASSEMBLYMAN COLLINS SECONDED THE MOTION.
THE MOTION CARRIED.
Assembly Bill 46: Revises manner of providing notice of certain meetings of board of county commissioners. (BDR 20-865)
Chairman Manendo asked the Committee to turn its attention to A.B. 46. He stated that the amendment (Exhibit F) Mr. Grady and staff worked on would be passed out to the Committee members.
Assemblyman Grady explained that the Committee heard A.B. 46 initially on February 12, 2003. At that time there had been some confusion about the bill. Mr. Grady stated that he met with Mr. Robert Hadfield, Executive Director of the Nevada Association of Counties (NACO) and legal staff to develop the amendment (Exhibit F).
Mr. Grady offered an explanation of each subsection:
Section 1, subsection 1, allowed the county commissioners to meet with other groups within the jurisdiction of the county seat, but not necessarily in the building where meetings were normally held.
Section 1, subsection 2, addressed the county commissioners not meeting on a nonjudicial day.
Section 1; subsection 3, addressed the first Monday in January that only covered elections.
Section 1, subsection 4, provided the “meat” of the bill, changing three consecutive weeks to two consecutive weeks hoping better government would be brought to all areas of a county.
Section 1, subsection 5, addressed additional meetings and changed that the board “may” meet with notification for two consecutive weeks rather than three weeks.
Section 1, subsection 6, read, “At a meeting held outside the county seat, the board of county commissioners may, in accordance with NRS 241.020, take final action on any matter except zoning or planning matters which relate to a different geographical area than the geographical area in which the meeting is held.”
Section 1, subsection 7, addressed meeting at a location outside of the ten-mile limit of the county. Subsection 7 also stated that in no case could the board take official action at such a meeting.
Section 1, subsection 8, addressed board members as a group could go to seminars, conferences, and conventions for educational purposed but no action could be taken at those meetings collectively by the board.
Mr. Grady thanked Ms. O’Grady for her assistance in drafting the amendment.
Chairman Manendo thanked Mr. Grady and reminded the Committee that according to the testimony they heard, it could take weeks to get notices published for county commissioner meetings and with the amendment the time frame could be reduced significantly.
ASSEMBLYMAN COLLINS MOVED TO AMEND AND DO PASS A.B. 46.
ASSEMBLYMAN KNECHT SECONDED THE MOTION.
THE MOTION CARRIED.
Chairman Manendo adjourned the meeting at 8:59 a.m.
Rosemary Zienter
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: