MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
February 19, 2003
The Committee on Government Affairswas called to order at 8:00 a.m., on Wednesday, February 19, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada, and via simultaneous videoconference, in Room 4406 of the Grant Sawyer State Office Building, Las Vegas, 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:
Assemblyman Bernie Anderson, District No. 31
Assemblywoman Chris Giunchigliani, District No. 9
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Rosemary Zienter, Committee Secretary
OTHERS PRESENT:
Jonathan Price, State Geologist and Director of the Nevada Bureau of Mines and Geology
Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool; Chairman, Nevada Earthquake Safety Council Committee on Policy Recommendations
Robert Berry, Local Emergency Planning Coordinator, Nevada Division of Emergency Management
B. Jim Reagan, Senior Regional Emergency Preparedness Coordinator for Sierra Pacific and Nevada Power
Robert Hadfield, Nevada Association of Counties
Irene Porter, Executive Director, Southern Nevada Home Builders Association, Las Vegas, Nevada
Tim Crowley, Nevada Resort Association
Gus Nunez, Deputy Manager, State of Nevada Public Works Board
Dotty Merrill, Ph.D., Senior Director, Public Policy, Accountability and Assessment, Washoe County School District
Fred Hillerby, American Institute of Architects
Max Hershenow, American Institute of Architects
Henry Mike Campbell, State President, Nevada Classified School Employees’ Association
Thomas M. Stauss, Classified Personnel Services Coordinator, Washoe County School District
Al Bellister, Director of Research, Nevada State Education Association
Terry Hickman, President, Nevada State Education Association
George Pyne, Executive Officer, Public Employees’ Retirement System
Craig Kadlub, Director, Public Affairs, Clark County School District
Jim Richardson, Nevada Faculty Alliance Chapters
Assembly Bill 57: Provides for adoption of certain seismic requirements by State Public Works Board and certain governing bodies. (BDR 28-206)
Chairman Manendo wished everyone a good morning and welcomed Chairman Bernie Anderson, Chairman of the Judiciary Committee and stated that Assemblyman Anderson would present A.B. 57.
Assemblyman Bernie Anderson, District No. 13, indicated that he was the sponsor of A.B. 57. Mr. Anderson read from prepared text (Exhibit C). He stated that he brought the bill forward at the request of the Nevada Earthquake Safety Council. He explained that the council facilitated public input, developed consensus about seismic issues within the public and private sectors, and was the public advisory body for state seismic safety policy. Mr. Anderson thanked the volunteers who served on the Earthquake Safety Committee for their hard work and commitment. He noted that terrorist activity received the majority of the focus but the risk of natural disasters, such as earthquakes, should not be forgotten. For that reason, it was important to constantly strive to make public buildings safe. Mr. Anderson stated that A.B. 57 would implement the council’s recommendation to require the state Public Works Board and local governing bodies to adopt:
· The seismic provisions contained in the international building code.
· The guidelines adopted by the Division of Emergency Management in the Department of Public Safety.
Mr. Anderson stated that the bill also directed the Chief of the Emergency Management Division to adopt guidelines for local building officials and the State Public Works Board in the investigation of seismic hazards. He urged the Committee to carefully consider the bill and strongly recommended support of the bill. Mr. Anderson introduced Jonathan Price.
Jonathan Price, State Geologist and Director of the Nevada Bureau of Mines and Geology, explained that the agency was a public service and research unit within the university system, and managed through the University of Nevada, Reno (UNR). Mr. Price indicated that he was also the secretary of the Earthquake Safety Council and thanked the Committee for allowing him to testify about the most important step that the state could take to reduce the loss of lives, property, and business activity resulting from inevitable future earthquakes. He stated that he had provided written testimony (Exhibit D), and wanted to verbally highlight some of its content.
Mr. Price indicated that the Committee received copies of the publication, Living With Earthquakes in Nevada (Exhibit E) that provided a broad background regarding the hazards within the state and a number of things people could do to minimize loss from earthquakes.
Mr. Price said that the Federal Emergency Management Agency (FEMA), in 2001 distributed a report that estimated the annualized earthquake loss for the state of Nevada would be $55 million per year, of which $28 million would be in the Las Vegas metropolitan area and $17.8 million would be in the Reno metropolitan area. The figures included the repair costs, inventory loss, and cost of business interruption expected to be sustained by the residential and commercial building sectors, but they did not include indirect economic losses or the social costs of death and injuries. Also excluded, were the direct and indirect losses suffered by the industrial, manufacturing, transportation and utility sectors. Therefore, the total losses would likely be much higher than the numbers given. Mr. Price explained that the Earthquake Engineering Research Institute recently estimated those losses to be two to three times those given by FEMA. The losses took into account the number, type, and occupancy of those buildings at risk and the frequency of earthquakes.
Mr. Price stated that Nevada was the third most hazardous state in the nation in terms of the frequency of major, magnitude 7 or greater, earthquakes. He indicated that a proven strategy for securing the future against major earthquakes was the adoption and enforcement of building codes with stringent earthquake provisions. The primary objective of modern earthquake codes was life safety, and the low loss of life and number of injured persons in recent earthquakes in California and Washington demonstrated the effectiveness of the strategy. Each new earthquake taught something unknown about earthquakes and their destructive power. As a result, building codes were frequently revised and improved when new knowledge became available.
Mr. Price stated that the International Building Code (IBC) adopted by the International Code Council (ICC) was a state-of-the-art consensus document that incorporated the most recent thinking in earthquake-resistant design and construction. It was based on recommendations from the nation’s leading experts in the field of earthquake hazards.
Mr. Price said that public preparedness and safety during an earthquake should be a prime responsibility of the state. He suggested that the adoption of the IBC would be a critical and urgent step towards meeting that goal. There would also be a need to fill the gaps not covered by the IBC. One of those was in the area of geotechnical hazards that would include ground failure in an earthquake due to fault rupturing and/or liquefaction. Mr. Price voiced his strong support for the adoption of guidelines for the investigation of those particular geotechnical and geological hazards. He explained that in anticipation of those needs, the Nevada Earthquake Safety Council was working with the civil, geotechnical, and geological engineering community in southern and northern Nevada to define the best practices regarding those particular hazards. The final product of that study was a set of recommended guidelines for evaluating potential surface rupture and land subsidence hazards in Nevada, and for evaluating liquefaction hazards in Nevada. Mr. Price stated that both reports were available on the Earthquake Safety Council’s Web site (www.nbmg.unr.edu/nesc). It was expected that those guidelines would be adopted by the Chief of the Division of Emergency Management under Section 3 of A.B. 57.
Mr. Price stated that the Committee received a handout (Exhibit F) containing a number of additional letters of support for A.B. 57. Some of those letters were from:
· Commissioner Mark James, Clark County
· Press S. Clewe, Emergency Management Program Manager of Washoe County
· Phil Coggins, Building Official, City of North Las Vegas
· John Anderson, Director of the Nevada Seismological Laboratory
Mr. Price stated that Exhibit F included a letter from Larry Johnson, President of Black Eagle Consulting, Inc., a geotechnical and construction services firm in Reno. Mr. Price referred to the letter signed by Larry Johnson, Patrick A. Pilling, Ph.D., P.E., and Robert D. Hunter, Ph.D., P.E., and stated that the critical part of the letter said:
These standards are long overdue in Nevada, the third most seismically active state in the nation. We feel it imperative to follow the lead of the adjacent states of California and Utah in adopting these guidelines to protect the public from these significant geologic hazards. Since Black Eagle and the major geotechnical consultants have been following similar guidelines for the past 20 years, we can see no impacts on costs involved in project development.
Mr. Price stated that he would answer any technical questions the Committee would have about earthquake hazards.
Mr. Hardy asked Mr. Price to explain liquefaction.
Mr. Price explained that liquefaction was when the soil becomes liquid. Loose sand or silt that settled close to the groundwater table caused the groundwater to mix with the sand or silt and caused it to be shook up during the earthquake. That development would cause loss of support to the foundation during the process.
Mr. Hardy asked if liquefaction was a mixture of silicon and water because the water table rose but the sand did not become liquid.
Mr. Price explained that when the sand grains were mixed with the water it all became liquid.
Mr. Hardy stated that process was called quicksand, and Mr. Price responded that it was very similar to quicksand.
Wayne Carlson introduced himself as the Executive Director of the Nevada Public Agency Insurance Pool, and Chairman of the Nevada Earthquake Safety Council’s Committee on Policy Recommendations, that developed the proposal before the Committee. Mr. Carlson stated that the Committee had copies of the proposed amendment (Exhibit G) to A.B. 57. The amendment was developed because of questions posed by the Public Works Board and the Division of Emergency Management (DEM). He explained that the amendment was an attempt to clarify that the Public Works Board adopted codes by regulation, and in the process of adopting regulations they would adopt the seismic provisions. Mr. Carlson explained that the IBC 2003 was due to come out within the next month, and they would be reviewing it for adoption and incorporate all of the changes, including the seismic provisions.
Mr. Carlson then explained that previously in the bill there was reference to Section 3, and to the DEM adopting the guidelines for liquefaction and surface ruptures. When that was discussed with the Public Works Board, it seemed more appropriate to specify that when the IBC with the seismic provisions were adopted, it would also require the use of the guidelines developed by the Earthquake Safety Council for the DEM. The Council served as an advisor to the DEM, which was their official status. The Council developed the guidelines, then utilized and distributed them through the Internet community, putting “teeth” into the guidelines behind the public works projects under the jurisdiction of the Public Works Board. The same requirement was added to Section 1, subsection 5, relating to local governments. In the process of adopting codes, they would also require the use of those guidelines as a part of the code process. For that reason Section 1, subsection 3, became unnecessary. All of the text capitalized in the amended bill (Exhibit G) represented the changes being proposed.
Mr. Knecht asked if the International Building Code would require modification at the design level and construction level initially or if it would require retrofit. He asked when the changes in the design and construction would be required.
Mr. Price responded that there would be no requirement for retrofitting. The adoption of the code was meant for new construction, and if there were major remodeling, the local government would require that the building meet code during the remodeling. Mr. Price stated that big earthquakes did not occur in Nevada every year or every ten years. The statistics indicated that one occurred in the state about every 30 years. Based on those statistics, hopefully, there would be time to solve many of the problems with seismic resistance by instituting building codes on the new construction and not incur a lot of expense with retrofitting.
Mr. Knecht stated that the important word in the answer was “hopefully.” However, a 1-in-30 year event could occur tomorrow as well as 30 years from now. Retrofit had been the major cost for a lot of standards, especially in earthquakes, for various projects. If retrofit could be designed with the new standards, then it could be accomplished more inexpensively. Mr. Knecht commented that the $57 million-per-year loss estimated for Nevada seemed to be a probabilistic number, where the cost of various events were multiplied by the probability and the sum equaled the expected loss.
Mr. Price directed the Committee’s attention to the publication, Living With Earthquakes in Nevada (Exhibit E), page 5, which pictured one of a series of maps produced by the United States Geological Survey that showed the probabilistic seismic hazard analysis. The map indicated an expression of the probability of an earthquake occurring and the probability of ground shaking occurring. They used the ground shaking information and applied it to the assumptions of what the building stock would be like and developed the calculations.
Mr. Knecht asked what the cost of compliance with the code would be annually or over a long period of time for comparison with the probabilistic damage assessments.
Mr. Price indicated that he would not be able to answer the question. Many experts, in collaboration with building officials and structural engineers, looked at those issues when the codes were being developed; and because of that, it would be safe to speculate that they would not develop codes that would have a dramatic change in the cost. The Earthquake Safety Council had structural engineers serving on the council. Those individuals looked into the cost issues when the IBC was being developed. They looked at the difference between the costs of the UBC of 1997, the previous code of 1994, and the IBC of 2000. The changes they found were not very large, and sometimes the cost seemed to go up and in other cases the cost seemed to go down.
Mr. Knecht asked if the expected damage amount covered human life and human suffering losses or if it was just property damage.
Mr. Price responded that the figure would not cover human life, human suffering, or ancillary business effects of the economy.
Mr. Knecht stated that there was an underestimate of the expected cost and no estimate of the expected benefits, but he hoped there would be some reason to believe the new changes would be cost-effective.
Ms. Pierce questioned if A.B. 57 would cover all buildings built in the state after the bill was adopted.
Mr. Price stated that was his understanding and that the wording in the bill would not apply to a jurisdiction that would not already have established codes. He noted that he was not sure any such jurisdictions existed in the state.
Mr. Grady commented that he understood Mr. Carlson represented most of the smaller rural cities and counties and asked if the urban cities and counties were advised of the proposed changes. He pointed out that Section 1, subsection 5, stated that the governing bodies “shall” adopt the most recent code with necessary amendments.
Mr. Carlson stated that Mr. Price submitted letters (Exhibit F) from several of the large agencies. He explained that Ron Lynn, Chairman of the Nevada Earthquake Safety Council, championed the bill on the policy committee, and Margie Gunn from Lincoln County, served on the council and supported the proposed guidelines.
Mr. Price explained that the handout of additional letters of support (Exhibit F) included letters from Clark County, Washoe County, and the City of North Las Vegas.
Chairman Manendo asked Assemblyman Anderson if he wanted the letters entered into the official record.
Mr. Anderson stated that they would like the letters to be a part of the official record. He assured Assemblyman Grady that the local entities were very aware of the proposed bill because of the many meetings that had taken place involving private citizens, representatives of the gaming community, the power company, and the labor groups.
Ms. Weber asked how often the International Building Code changed and how changes would affect projects pending that were waiting for an alteration in the code.
Mr. Carlson stated he understood the International Building Code changes usually occurred every three years, and the last codes available for adoption were in 2000. Not everyone had adopted those changes from 2000 because the codes were transitioned from the 1997 Universal Building Code. A number of intermediary issues were corrected that occurred during the transition of the Universal Building Code becoming the International Building Code.
Ms. Weber asked if the next set of codes would be available in the spring of 2003.
Mr. Carlson responded that he understood from discussions with Dan O’Brien, Manager of the State Public Works Board, that they believed the new codes would be available for the review process within the next month.
Mr. Hardy asked for clarification on the section of the bill that states “buildings or other projects of this state.” He indicated that he read it to be “state projects” versus “projects in the state,” and asked for clarification.
Mr. Price responded that it was both. One part of the bill addressed the state owned buildings overseen by the State Public Works Board, and another part of the bill indicated that the local government should also adopt the codes.
Mr. Hardy asked if it would make sense to change the sentence to read “in the state” which would make it more inclusive.
Ms. O’Grady, Committee Counsel, stated that Section 2, subsection 5, would include local government and Section 1 would cover state buildings.
Chairman Manendo said that the letters of support (Exhibit F) would be entered into the official record. He commented that the Nevada Earthquake Safety Council was not mentioned in the statute and, because of that, they referred to the Division of Emergency Management. The Chairman recommended that the Nevada Earthquake Safety Council be included in the statute.
Mr. Knecht requested a copy of the publication Living With Earthquakes In Nevada (Exhibit E).
Chairman Manendo stated that Assemblyman Knecht would be given a copy of the publication. He asked Chairman Anderson if he wanted the remaining speakers to testify in any certain order.
Mr. Anderson stated that several people were present and had signed in to testify in support of A.B. 57, and he appreciated that they were being given the opportunity to speak.
Robert Berry, Local Emergency Planning Coordinator, Nevada Division of Emergency Management, stated that he was also the liaison from Nevada Division of Emergency Management with the Nevada Earthquake Safety Council. He explained that he participated with the activities and development of the legislation before the Committee. One of the letters included in Exhibit F, written by Chief Frank Siracusa, State of Nevada Division of Emergency Management, indicated that the Division of Emergency Management was in full support of the intent of A.B. 57. Mr. Berry suggested that the Committee consider changing the requirement from the Division of Emergency Management to develop regulations as stated in Section 3, to the State Public Works Board, who had far more expertise in the area of building codes at the state and local levels.
B. Jim Reagan, Senior Regional Emergency Preparedness Coordinator for Sierra Pacific and Nevada Power, explained that he had over 23 years of experience with the utility industry and had worked in the electric, natural gas, and water divisions of Sierra Pacific Power and Nevada Power Companies. Mr. Reagan stated that he had been a member of the Nevada Earthquake Safety Council since 1996, and that Sierra Pacific Power was a founding member of the Safety Council.
Mr. Reagan said that A.B. 57 was a strong statement toward improving the safety of the public and community, and minimizing potential property and economic loss within the state. The utility industry in general provided for structural and operating integrity of its infrastructure to ensure reliability and public and employee safety. More specifically, the electric infrastructure of Sierra Pacific and Nevada Power were designed to operate in severe conditions that existed in the environment in which they were located, including man-made and natural hazards, such as severe weather and earthquakes. Preliminary engineering evaluations identified that the internal design criteria would be equal to or greater than that proposed under the legislation before the Committee.
Mr. Reagan explained that Sierra Pacific and Nevada Power were not proposing to support any legislation that would increase utility costs to its customers or shareholders. However, since the companies already designed and built quality electric and gas systems within the proposed codes, they could not identify any notable current increase in costs. He stated that the companies had always supported strength in design and construction for all their facilities. The Sierra Pacific building on Neil Road in Reno was designed and built to withstand a significant seismic event by utilizing several pilings to support the structures located in a liquefaction zone, and a shear plate designed into the structure to allow the building sections to move independently during a seismic event.
Mr. Reagan said that he could not provide testimony for other utilities within the state, but with his years of experience in the industry, and working closely with other utilities in the preparedness and response effort in the state, he was confident that they too built their infrastructure to the same quality standards that would continue to serve the public.
Mr. Reagan vowed that Sierra Pacific and Nevada Power would support efforts to improve the safety of the communities it served, since the employees were also members of those communities. He thanked the Committee for its time and stated it was a privilege to contribute to the legislative process.
Robert Hadfield, Nevada Association of Counties (NACO), said that on behalf of most of the public entities he represented, with the exception of the larger ones the Committee already heard from by letter or by testimony and who worked through the “pool” that Mr. Carlson administered, they supported amending their building code to include the International Building Code adopted for seismic provisions. He understood there would be further discussion with regard to the standards and would work with anyone to provide information. Mr. Hadfield stated that by supporting the legislation, the public safety and health of the communities would benefit.
Irene Porter, Executive Director, Southern Nevada Home Builders Association in Las Vegas, said that she supported the seismic provision portions of A.B. 57, and the building codes related to IBC, but she had definitive questions concerning the guidelines issue that was in the original bill. She stated that she briefly reviewed the amendment but was not able to concentrate on the total amendment and that the seismic provisions of the IBC included the International Residential Code (IRC) and the International Commercial Code (ICC).
She indicated that she was proud of the gentlemen’s testimony about the national board responsible for putting the new codes together over about a three- or four-year period. She added that Mr. Eric Borsting, a member of the Southern Arizona Nevada Homebuilders Association, and chairman of its codes committee, had served on the ICC and the IRC committees throughout the process of development of the new codes. Ms. Porter explained that the homebuilders association for the past two years had worked with all of the building officials and building departments so that the adoption of the new code could move forward. She explained that the City of Henderson, City of North Las Vegas, and Boulder City would probably, within the next 60 days, adopt the 2000 additions of the IRC and the ICC with a significant number of amendments.
When a code was released, it would take approximately 18 months before the code would be ready for adoption. As an example, the 2003 code would be coming out at the end of February or the first of March; however, the actual adoption of that code would not come out until May of 2003, and it would take a 1 year to 18 months beyond that to be able to adopt the 2003 codes. The new codes would contain the seismic provisions referenced in A.B. 57. She stated that although the bill stated, “it shall not amend its building code,” it was really referring to amending the current Uniform Building Code throughout the state.
The guidelines discussed were not something the members of her communities were familiar with or reviewed. She explained that they had not determined how the guidelines would interrelate to the construction example of new homes, what the cost of the additions would be, how it would be implemented, and on what kind of a time schedule. She stated that the guidelines might not be costly and they might be feasible, but for the time being, that was not known.
Ms. Porter said that the Southern Nevada Home Builders Association strongly supported the seismic provisions of the new International Building Code and that they were rapidly implementing the new codes in the residential housing communities of southern Nevada. She stated that the association would like to reserve judgment on the guidelines issue and spend the next few days attempting to find out more, before advising the Committee whether or not the association was in favor of incorporation of the guidelines.
Tim Crowley, Nevada Resort Association, stated that the association members were very proud of the world-class properties they had built. He stressed the importance of the safety of the properties and the security of the patrons. He indicated that he participated on the Earthquake Safety Council and supported A. B. 57 and the seismic provisions in the bill.
Gus Nunez, Deputy Manager, State of Nevada Public Works Board, explained that he would offer testimony on behalf of Daniel K. O’Brien, Manager of the State of Nevada Public Works Board, who was away on business in Las Vegas. Mr. Nunez said that he wanted to read to the Committee Mr. O’Brien’s letter for the record (Exhibit F, pages 13 and 14).
I am writing you in regards to A.B. 57. The State Public Works Board (SPWB) is in support of the intent of this bill, but is requesting a few minor amendments.
The SPWB adopts the codes utilized by the state for its projects located on state property. That adoption process is done by the Board adopting regulations through the public hearing process as defined by the state. That process allows for the public comment on the proposed regulations and allows for amendments if determined necessary. Over the last two years, the SPWB has reviewed the 2000 International Building Code (IBC), as well as the other International Building Council model codes and is intending to recommend the Board’s adoption of the 2003 IBC, as well as the other mode codes, after a full review of their provisions.
Therefore, the following amendment to A.B. 57 is proposed to allow the Board to utilize its regulation process to adopt the IBC by the proper year, have the necessary public input and possible amendments.
Section l. Chapter 341 of NRS is hereby amended by adding thereto a new section to read as follows:
For the purposes of the design, construction or repair of building or other projects of this state, the Board shall adopt by regulation:
1. The seismic provisions of the International Building Code as published [adopted] by the International Code Council, and any amendments determined necessary through the regulation process; and
2. Shall require use of the [The] guidelines [adopted] developed by the Nevada Earthquake Safety Council for [by] the Division of Emergency Management of the Department of Public Safety [pursuant to section 3 of this act.] for the investigation of hazards relating to seismic activity, including without limitation:
1. Potential surface ruptures; and
2. Liquefaction.
I apologize for not being in attendance at the hearing as I will be in Las Vegas, but Gus Nunez, Deputy Manager for Professional Services, will be presenting this letter on my behalf and I am sure he can answer any questions that you might have. Thank you for the opportunity to comment on this matter.
Mr. Nunez asked the Committee if they had any questions.
Chairman Manendo said the letter would be entered into the official record.
Dotty Merrill, Ph.D., Senior Director, Public Policy, Accountability and Assessment, stated that she was present on behalf of the Washoe County School District, and specifically on behalf of Dale Sanderson, School District Director of Plant Facilities. She acknowledged that she was not an expert on seismic issues; however, Mr. Sanderson, on behalf of the District, had analyzed the bill. It was his view that the bill was important for the safety of students and employees in the school district, and it was his estimation that the bill, if implemented, would have little impact on the cost of new buildings in the school district. Dr. Merrill stated that Mr. Sanderson believed the IBC provisions were very important for new construction. To summarize Mr. Sanderson’s position on behalf of the Washoe County School District, the bill would be good for public policy when applied to school districts.
Chairman Manendo asked if anyone wanted to testify in opposition of A.B. 57.
Fred Hillerby said that he was representing the American Institute of Architects, and was not present to oppose the bill, per se. He indicated that the American Institute of Architects supported safe building codes and standards. However, he opposed the bill as it was written and believed there was a way to remedy the bill for it to be workable. Mr. Hillerby stated that Mr. Hershenow, a member of the association, would explain the unintended consequences of the bill and the remedies.
Max Hershenow, American Institute of Architects, said they were not opposed to the bill and supported the spirit of the bill but wanted to bring to the Committee’s attention some thoughts and a possible scenario that, as architects, and possibly building officials and inspectors, would see as problematic. The UBC was used daily by architects, and the IBC was not the code enforced currently by the State of Nevada. Mr. Hershenow indicated that he believed that would be the situation in the foreseeable future. The problem with the bill was that the Uniform Building Code contained a lot of seismic design criteria, and as the UBC was combined with the seismic provisions of the International Building Code and an additional series of guidelines, that combination could cause design professionals, inspectors, and building officials to be required to work with three different codes, simultaneously.
He reiterated that the spirit of the bill was to improve seismic design and improve the earthquake safety of buildings, which were critical steps to be taken. In the interim, before the IBC was adopted, the American Institute of Architects believed there would be serious problems with interpreting the codes. He guaranteed the Committee that the codes would view seismic design differently. Mr. Hershenow stated that the potential would be great for miscommunication within the various entities, and the state of Nevada’s local governments would adopt the IBC at different points in time. He speculated that there could be years when a UBC, with full seismic design criteria, would be combined with a 180 degree difference in seismic criteria. He concluded that the spirit of the bill was supported, but he anticipated that the state of Nevada would deal with problems of interpretation.
Assemblyman Collins asked if eventually the UBC would become obsolete and all regulations would fall under the IBC.
Mr. Hershenow responded that from the viewpoint of an architect and not a building official, the UBC would be supplemented by the IBC. He explained that they were two different organizations that wrote the codes. It would not be as easy as the UBC transferring to the IBC because there would be a split in time when the International Council of Building Officials’ UBC, would be replaced by the International Code Council’s IBC.
Assemblyman Collins commented that to simplify Mr. Hershenow’s response, “soon there would be no more horses and all automobiles,” which required time. He asked Mr. Hershenow if that was the issue.
Mr. Hershenow responded that Mr. Collins was correct.
Assemblyman Collins said that because both the IBC and UBC had seismic provisions, a transition would need to occur. He asked Mr. Hershenow if the bill should not be passed until the transitions were completed, and Mr. Hershenow replied the bill should not be passed yet.
Assemblyman Knecht asked what the remedy was that was being proposed.
Mr. Hillerby said as long as governmental entities had in place the Uniform Building Code and were asked to also adopt a piece of the International Building Code, he would recommend they amend the UBC to reflect those changes. Therefore, they would not be designing to two different codes. Mr. Hillerby said that Mr. Porter had testified that several entities in Clark County intended to adopt the IBC with the host of amendments which would replace the UBC, and therefore, the confusion would not exist. As long as the state or Elko County had the UBC and then were asked to adopt the provisions of the IBC, there would be a potential for confusion and interpretation. The remedy would be to amend the UBC to reflect the changes and not function with two different codes.
Assemblyman Hardy asked if the Committee needed two bills before them, one to provide what the bill outlines and one to amend the UBC.
Mr. Hillerby clarified that he was not suggesting two bills, but the concern was a process issue. He stated that, in the process of adopting only a piece of the IBC, “we need to be sure we do not leave in place” the UBC that would address the same IBC seismic standards. The bill was not clear on what would be done with the UBC, and he suggested it might be possible to amend the bill to make that clear.
Mr. Hardy asked if there should be a Section 3 relating to the UBC that stated the UBC seismic code references were now superseded by portions of the IBC code.
Mr. Hillerby said that could possibly be worked out, but what would be problematic with that suggestion would be the need to read the UBC and determine what supersedes it. If the provisions were deleted that were seismic in the UBC and new ones added, then one document would exist for the architects to design to. Mr. Hillerby stated he believed that would be the remedy to the potential problem of interpreting two standards.
Mr. Hardy asked what remedy Mr. Hillerby was suggesting.
Mr. Hillerby apologized for not being succinct and said that as long as an entity was using a Uniform Building Code that they amended to reflect the seismic codes from the International Business Code, the problems would be deleted.
Assemblyman Hardy asked if Section 3 would accomplish the recommendation made by Mr. Hillerby.
Mr. Hillerby commented that Section 2, subsection 5, had new language that might accomplish the concern. The sentence said “amend” its building codes, but Section 1, line 4, said “the Board shall adopt,” and did not mention amending the codes. The wording reflected the concerns and the confusion. Mr. Hillerby concluded that the design process needed to follow clear codes and guidelines.
Chairman Manendo asked Mr. Hardy if he would chair a subcommittee.
Assemblyman Hardy replied that he would be willing to do whatever the Chairman wished.
Assemblyman Collins said that he meant no offense to architects, but in the construction industry, which architects dealt with, there was design and then construction. Ongoing, at all levels of local government, constant changes and upgrades occurred. With the transition from the UBC to the IBC, eventually everyone would adopt the changes. Architects would become participants during the changes because discussion took place in public hearings and participation was encouraged. Mr. Collins explained that, as a contractor, he knew that effective July 1, 2003, Clark County had adopted new building codes, and after July 1, he would be required to comply with the new changes. He explained that designers and architects were part of the same process, as were plumbers and roofers. Mr. Collins stated that he did not understand the problem, because when the codes transitioned, the architects would meet the new standards. He concluded, “if pencils were used, they have an eraser, and therefore I don’t see the problem.”
Mr. Hershenow stated that Mr. Collins was correct; architects designed around codes daily and gave an example of what was possible if the Committee adopted the bill and the State Public Works Board did not adopt the IBC for months. If an architect were working on a job in Nevada for the State Public Works Board, but the design was based on the 1997 UBC, and by law the seismic provisions were adopted, but the IBC were not adopted, then under those circumstances the architect would work with a set of guidelines, and with the UBC and the IBC, both containing seismic provisions. If the architect was pointed to one document, it would be used and complied with; but it would be similar to having two parallel sets of laws to abide by. He explained that the architects’ law was the building code, and the problem they were faced with was the interim period in which there were not one, but two, and possibly three different regulations.
Mr. Collins stated that both the IBC and UBC had standards to be followed and in all local government, including the state, it was made clear that the stricter standards of the two would be followed. Mr. Collins asked if that would be the procedure followed by an architect.
Mr. Hershenow said yes, but he believed it would be difficult for an architect and engineer to look at two different codes. He stated that a lot of intuition goes into design because it was not an exact science. Believing the codes would be clear enough to allow evaluation on a case-by-case basis, and to determine if something was better in the UBC or better in the IBC, would not be probable.
Mr. Collins asked if the review process would be used to make the appropriate determination.
Mr. Hershenow replied yes, and he stated that the architects had considerable positive dialogue with the State Public Works Board and the State Fire Marshall about what was right and wrong. He stated that the issues were not as clear as black and white, and the state of Nevada owed not only architects, but also building inspectors who worked for the State Public Works Board and the City of Reno Building Department, one code. Historically, it had been that way, and that would be the best course of action.
Chairman Manendo asked if there were more questions. Receiving no response, he indicated that there was a fiscal impact to the bill, and the Committee was waiting for Washoe County and other state agencies to provide that note.
Chairman Manendo asked if there was anyone else speaking on A.B. 57.
Wayne Carlson stated that his proposed draft (Exhibit G) and the Public Works Board’s proposed amendment (Exhibit F, pages 13 and 14) would allow the transition of the codes to pass through the regulatory process and address the conflicts previously stated.
Chairman Manendo asked Mr. Carlson if he had reviewed the Public Works Board’s proposed amendment (Exhibit F, pages 13 and 14).
Mr. Carlson indicated that he had not reviewed the Public Works Board’s amendment (Exhibit F, pages 13 and 14), but the intent of his draft (Exhibit G) was to address the issues formerly discussed.
Chairman Manendo instructed Mr. Carlson, Assemblyman Anderson, Assemblyman Hardy, and Assemblyman Collins to meet and bring their recommendation back to the Committee.
Chairman Manendo asked if there was anyone in Las Vegas wanting to testify. The Chairman received no response and closed the hearing on A.B. 57.
Assembly Bill 68: Revises definition of "compensation" for purposes of provisions governing Public Employees’ Retirement System. (BDR 23-725)
Chairman Manendo announced the Committee would take a two-minute recess.
Chairman Manendo opened the hearing on A.B. 68 and welcomed Assemblywoman Chris Giunchigliani, District No. 9.
Ms. Giunchigliani stated that A.B. 68 was a simple piece of legislation, and the intent was to recognize, for purposes of compensation, that extra duty pay for the teaching rank should count towards their public employment retirement system. She explained that a number of members coached, or were involved in band and summer school, and did a lot of extra work outside of their 184-day contract. The “dollar pool” was not counted towards their 36 months when they decide to retire. Assembly Bill 68 was an endeavor to correct that inequity. Ms. Giunchigliani said that she handed out to the Committee a suggested amendment (Exhibit H). She asked the Committee to turn its attention to Section 1, subsection 2, paragraph e, subparagraph 2, of A.B. 68, and she commented that she was recommending its deletion.
Ms. Giunchigliani explained that teachers who had taught for many years in the school district had contacted her and explained that, in the evenings, they served as adjuncts at the universities or community colleges, but did not receive credit towards their retirement benefits for that service. Ms. Giunchigliani stated that after speaking with representatives of the PERS, she recognized that there would be a higher cost factor involved with Section 1, subsection 2, paragraph e, subparagraph 2, and because of that, she decided to focus on the immediacy of those employees who were involved in extra duty contracts. Teachers and other public employees were not paid overtime, but police and fire department employees on callback did receive compensation. She explained that callback pay was a different type of compensation versus an extra duty contract. She said that the intent of A. B. 68 was to provide compensation for employees by the PERS for any pay received beyond the employees’ contractual year.
Mr. Knecht stated that his disclosure and declaration would be different than his previous one that addressed the fact that he was employed as an economist for the Public Utilities Commission, but in addition, he currently worked, and would continue to work, part-time for the Western Nevada Community College as an economics instructor. He explained that, if lines 17 through 21 in A.B. 68 remained, it would apply to him but would not affect him any differently than any other public employee who was a part-time faculty member within the university and community college system. He stated that he could evaluate the bill, vote on it, and discuss it in the public interest, and he intended to do that.
Mr. Grady stated that he had three children involved with the teaching profession and did intend to vote on the bill.
Mrs. Koivisto stated she needed to disclose her employment with the University of Nevada, Las Vegas (UNLV), and her membership with the Public Employees’ Retirement System. She stated that there were probably six people remaining on the UNLV faculty who were still in the PERS and they were not professional staff, but were academic faculty. She suggested that Section 1, subsection 2, paragraph e, subparagraph 2, be changed to reflect the academic faculty.
Ms. Giunchigliani explained that her proposed amendment (Exhibit H) was to make sure that the teaching contract would not be affected if a particular school district added coaching to the teaching contract, and the teacher was dismissed as the coach because of a losing season. She stated that her suggested amendment was probably not the best legalese, but it represented the concept she was attempting to achieve.
Mr. Atkinson stated that he understood the PERS calculated retirement benefits based on an employees’ highest 36-month salary. He asked how the extra teaching duties would count towards the 36 months.
Ms. Giunchigliani responded that some school districts could agree to let the teachers opt to pay for the additional retirement contribution, with their salary reduced by that percentage, and their retirement benefit would be paid based on the additional amount of money earned. He stated that because Nevada was an employer-paid state, the school districts with excess money could simply request the Legislature to pay the employer’s portion of the retirement contribution. Ms. Giunchigliani gave the following example: If a teacher received $2,000 in extra duty pay, it would be added to the $28,000 base salary and the retirement benefit would be calculated on $30,000. She explained that employees in the teaching profession were on a 180-day contract, and they earned 1.75 days of retirement for every day worked that equated to a one-year schedule.
Chairman Manendo disclosed that he worked for the Community College of Southern Nevada, and he was a member of PERS.
Henry Mike Campbell, State President of the Nevada Classified School Employees’ Association (NCSEA), stated that there were other people besides teachers who worked for the public school system. He explained that NCSEA represented the classified school employees of seven counties in the state of Nevada. Mr. Campbell expressed his support of A.B. 68 and explained that one of the biggest concerns shared by the association members was that the extra duty hours were not used in the computation of their retirement benefits. As an example, the classroom aides who were on a nine-month contract and worked during the summer school program, and bus drivers who drove summer school routes, would not receive credit towards their PERS tabulation. Mr. Campbell concluded that, with the passage of A.B. 68, the concerns of the NCSEA members would be addressed, and the members would receive the just compensation they deserved.
Thomas M. Stauss, Classified Personnel Services Coordinator, Washoe County School District, Personnel Division, stated that he appreciated the opportunity to testify on A.B. 68, and provided written testimony to the Committee (Exhibit I). Mr. Stauss explained that the Washoe County School District spent approximately $3 million from the General Fund in compensation for extra duty assignments for positions like coaches, hourly teachers, and summer school teachers. The school district spent approximately $2 million from grant funds in compensation for extra duty assignments. Should the amendment pass as written, the district would be required to pay approximately $600,000 in additional PERS benefits from the General Fund and approximately $400,000 from grant funds.
The increase would have an impact on the school district beginning July 1, 2003. The impact might not appear to constitute a significant amount of money, but based on the district’s overall budget, it would represent a hardship on the district because of the substantial financial challenges the district was facing. He added that because the additional costs had not been budgeted by the district, it could require the district to cut services in General Fund and grant-funded areas. Mr. Strauss said the district was not opposed to the principle behind A.B. 68 to ultimately increase the retirement benefit for employees. The Washoe County School District did oppose the cost attached to the bill that would be imposed on districts if passed as written.
There were also concerns about the impact the bill would have on the district’s reporting requirements relative to the retirement system of future retirees. With the cost implications of A.B. 68 and concerns about PERS reporting requirements, the district would request that language be included in A.B. 68 that would delay the implementation of the bill until at least July 1, 2005, to allow districts to budget for the additional cost, and to allow time for the districts to work with the Public Employees’ Retirement System to iron out their concerns about reporting requirements for the employees.
The district would also request specific language being included that would give districts the authority to reduce current rates of pay for extra duty assignments by half of the PERS contribution rate of 20.25 percent. The reduction in pay would allow both the employee and the district to bear half of the additional cost that would be associated with A.B. 68. The additional language would be important for extra duty assignment rates of pay that had been negotiated with local employee associations that were a part of local negotiated agreements.
Mr. Stauss stated that the district believed existing law and PERS policies provided for cost-sharing for PERS increases. He offered Nevada Revised Statutes (NRS) 286.421.3(a) as an example, and read the statute: “Payment of the employee’s portion of the contributions pursuant to subsection 1, must be: (1) Made in lieu of equivalent basic salary increases or cost-of-living increases, or both; or (2), Counterbalanced by equivalent reductions in employees’ salaries.” He said that PERS Policy 3.9 stated, “Future contribution rate increases detailed in Policy 3.8 shall be shared equally by the member and public employer.”
In summary, Mr. Stauss said Washoe County School District recommended that A.B. 68 not become law until at least July 1, 2005, and that both the employer and the employee share the costs associated with A.B. 68. He stated that if the concerns could not be addressed, the district would be in opposition to the bill. He thanked the Committee for their consideration of his testimony, and thanked them for the opportunity to present testimony.
Assemblyman Collins asked if Washoe County’s retirement benefits were based on the employee’s last three years similar to Clark County.
Mr. Stauss responded that he was not a PERS expert, but believed it was the three highest continuous years’ salary that determined the retirement benefit.
Mr. Collins asked if a lot of good teachers transitioned from the classroom to administrative positions to increase their retirement benefits, and Mr. Stauss stated that he could not respond to what their motives would be.
Mr. Collins asked if the transition could be to increase benefits, and Mr. Stauss replied that it could be part of the motivation to accomplish a larger retirement benefit.
Assemblyman Goicoechea said that he did not see where the statute did not say that the employee “would” not participate in paying half of PERS for the extracurricular activities. He stated that he assumed when an employee received $600 for coaching, the amount would be added into the paycheck and encumbered by a reduction in the PERS benefit or the employee’s half or the employer’s half.
Mr. Stauss said if he understood the question correctly, currently the extra duty assignments were not calculated for the purpose of retirement benefits. He stated that the Washoe County School District would suggest that specific language be included in A.B. 68 to allow districts to reduce the current compensation rates. For example, if a coach received $3,000, the amount would be reduced by $300 to pay their portion toward PERS, and the school district would match the contribution with 10 percent.
Mr. Goicoechea said that he did not see in A.B. 68 where Mr. Stauss’s suggestion was precluded from happening currently. He asked where the law would prohibit an employee who was paid $3,000 for coaching from contributing 10 percent, matched by the district, towards the employee’s retirement benefits.
Mr. Stauss responded that he could not answer the question.
Al Bellister, Director of Research, Nevada State Education Association, said that the association members were in favor of A.B. 68. He stated that the bill accomplished two things: Number one was that it exposed income that was earned through extra duty contracts, and two, it applied the income to PERS contracts. He explained that it had been troubling when the state demonstrated its awareness that the school districts offered extracurricular activities for students, but the coaches and advisors to the programs, who earned the income, did not have the income exposed to the PERS contributions.
Mr. Bellister said that Section 1, subsection 2, paragraph e, subparagraph 1, would expose the income of teachers who worked in summer school programs and intersession programs, programs that were created by the Legislature through the Nevada Education Reform Act (NERA), Senate Bill (S.B.) 482 of the 69th Legislative Session. The work was created, but through the policy exclusion, the work was not being exposed to the Public Employees’ Retirement System. Mr. Bellister stated that the cost of the bill would be debated in the Ways and Means Committee, but the Association estimated the cost for fiscal year 2003 to be $1.9 million based on the budgeted amount of $9 million for extracurricular and extra work opportunities, and factoring in the 20.25 percent PERS rate.
Terry L. Hickman, President, Nevada State Education Association, stated that he was a basketball coach for several different high schools. He explained that one of his great motivations, as a coach, was to be with the students and to make a difference. He explained that the discipline they were taught and the high requirements the students were expected to meet regarding academics and behavior were important.
He said that the pay was not a great deal of money, but the motivation to stay in coaching waned with time as the job became more difficult and the hours increased over time. He stated that the motivation of knowing the coaching pay would have contributed to the retirement system would have made a difference. Mr. Hickman explained it was often difficult to recruit coaches, but if they knew that their coaching income would benefit their retirement, the recruiting task would become easier.
He stated that consenting to the extra duty salaries being applied to retirement benefits would send a message of how much those services were needed and how worthy they were. He said that it was time to send a message that teaching was not only in the classroom, but in many other places in the schools where students learned lessons for life. Mr. Hickman explained that his coaching fee averaged out to $1 per hour and that recognition of that through the PERS would be motivating for upcoming teachers who contributed to extra duty jobs.
Assemblyman Goicoechea stated that it appeared the bill would be amended in several areas. He asked if employees, considering Section 1, subsection 2, paragraph d, that stated, “The aggregate compensation paid by two separate public employers . . . if the total does not exceed full-time employment . . . “, would be precluded from receiving credit towards their retirement because they were receiving compensation above their full-time employment.
Chairman Manendo responded that someone would answer his question. The Chairman asked if anyone else wanted to speak on A.B. 68.
George Pyne, Executive Officer of the Public Employees’ Retirement System of Nevada, said that staff of the retirement system would recommend that the retirement board take a position in opposition to A.B. 68 at its next monthly board meeting. He stated that before he addressed the concern with the legislation, he wanted to review how the PERS benefits were calculated. He asked the Committee to turn their attention to the single-page handout he provided that showed the benefit calculation formula (Exhibit J). The Public Employees’ Retirement System’s member benefits were based on two major factors: service time and average compensation. He explained that service time was defined as the years, months, and days of public service a member had credited in the PERS. Average compensation was the average of a member’s highest 36 consecutive months of earnings. Once those two elements of the formula were known, it was easy to determine a member’s benefit at retirement.
Mr. Pyne said that in the example provided to the Committee, “we take the years of service (20) times a fixed factor of 2.5 percent, 2.67 percent for service after July 1, 2001, times average compensation. In the example, a retiree with 20 years of service and a $2,000 monthly average wage would receive a $1,000 benefit at retirement.” He stated that if either the service time or average compensation were higher, the benefit would be higher. He said A.B. 68 was about receiving a greater benefit through achieving a higher average compensation. Mr. Pyne explained that compensation subject to retirement contribution was defined in Nevada Revised Statutes (NRS) 286.025. The term “compensation” included a member’s base pay, some other specific forms of compensation, and as found in NRS 286.025(c):
Payment for extra duty assignments if it is the standard practice of the public employer to include such pay in the employment contract or official job description for the calendar or academic year in which it is paid and such pay is specifically included in the member’s employment contract or official job description.
Mr. Pyne stated that A.B. 68 proposed to expand the definition of compensation subject to retirement contribution by modifications to “NRS 286.025, 2(c), beginning at line 13 on page 1, and line 2 on page 2, and by adding a new proposed paragraph: NRS 286.025 2(e), beginning at line 11 on page 2, of the bill.” He said that the change to NRS 286.025(c) would allow for all extra duty assignment payments to be subject to the PERS contribution regardless of whether those payments were included in the job description or employment contract of the member. He stated that the addition to NRS 286.025, 2(e), would include payments made during the summer months to school district employees employed for less than 12 months.
Mr. Pyne said that several public employers were contacted with respect to the applicability of the bill to their employees. The employers responded that it appeared to be mostly applicable to school employees on contract. Most university professional staff did not participate in PERS, and state and local governments did not commonly have employees perform extra duty assignments. He stated that an example of an extra duty assignment would be a math teacher who also got paid for an extracurricular activity such as coach of the soccer team. If the coaching assignment was a part of his job description or contract, the compensation received was subject to PERS contribution.
Extra duty pay, therefore, was tied to an additional assignment that would not otherwise be part of an employee’s job description or employment contract. He said it was not the same as payment for overtime, and was not subject to retirement contributions, or callback pay, and not subject to retirement contributions, because those forms of payment were tied to the principal duties of the employee’s job.
Mr. Pyne said that A.B. 68 had two cost considerations. One related to contributions on the extra pay received by certain school employees that would be subject to retirement contribution. The second was the cost to the system expressed as a percentage of the payroll to pay higher anticipated benefits. The additional cost contributions to be paid by school districts were estimated to be $6 million in the first year of the biennium, according to the fiscal note. The figure was determined by cost-estimates received from the Clark County School District and the Washoe County School District.
Mr. Pyne said that the system’s actuary had estimated the percentage of payroll cost impact to the system at .05 percent. Although that would not by itself trigger an immediate increase in contribution rates, it would put increased pressure on the cost of retirement at a time when fiscal restraint was of utmost importance. The actuarially determined rate was 20.32 percent. An increase of .05 percent brought that to 20.37 percent. A rate of 20.375 percent would trigger a rate increase to 20.5 percent.
Mr. Pyne explained that another concern was that the legislation would set a precedent with paragraph e, by singling out compensation unique to a specific occupation group with the definition of compensation. He believed the legislation could lead to further specific occupation group requests that might also ratchet up the cost of retirement through higher average compensation. Mr. Pyne stated that he would answer questions from the Committee.
Assemblyman Goicoechea asked if the verbiage in Section 1, subsection 2, paragraph d, that stated, “The aggregate compensation paid by two separate public employers . . . if the total does not exceed full-time employment . . . “ existed in the current statute. He asked Mr. Pyne to explain how it would work if an employee were working for two public employees and exceeded half-time employment.
Mr. Pyne said he believed A.B. 68 was attempting to address teachers working with the same public employer, and therefore, Section 1, subsection 2, paragraph d, would not apply. He stated that he did believe paragraph d pertained to employees who shared their time between several counties in the rural areas, such as a justice of the peace who worked half-time for Eureka County and half-time for White Pine County. The provision would then allow the pay to be subject to the PERS and allow the employee to get one full year of service credit.
Assemblyman Grady stated that Mr. Hickman mentioned rural areas hiring coaches that might not be connected with the school districts. He asked if the Committee should assume it would only be a part-time position not subject to state retirement.
Mr. Pyne explained that if someone worked at the local bank or Chevron station and coached soccer for the school district, the individual would be required to work half-time or more for the public employer to qualify for state retirement benefits.
Mr. Goicoechea asked what the scenario would be if the employee worked for a public employer and opted to take $3,000 for coaching.
Mr. Pyne stated that the retirement statute and policy had a prohibition against paying contributions on secondary employment when two separate public employers employed someone. He said paragraph d would be an exception because generally, when two public employers employed the same person, the employer paying the greatest wage paid the retirement contributions.
Assemblyman Knecht asked if the proposed paragraph e would apply to the PERS not allowing compensation on the second employment, and if the normal policy would preclude that type of compensation.
Mr. Pyne responded he believed it would. He said there were some exceptions, such as someone employed full-time and who also served as a volunteer fireman. He stated that during an audit in the 1970s, it was recognized that a lot of people were spiking their benefits prior to retirement through the use of overtime. He explained that it was a great benefit for the employee but increased the cost of retirement substantially. In 1975 the Legislature changed retirement benefits to be calculated on the employees’ base pay and nothing else. He said that since then various components were added. The Public Employees’ Retirement System had tried to provide base benefits on an employee’s base pay with some additional other components, while trying to avoid issues of overtime spiking.
Mr. Collins explained that in the 1970s there was a shortage of hiring by the state. He questioned if the federal government’s regulation of guaranteeing retirements, ERISA (Employment Retirement Income Security Act), was the cause for the Legislature’s action.
Mr. Pyne responded that he understood the Legislature’s primary reason for going to base pay benefits was to control the cost of retirement because of overtime spiking. He stated that there could have been other reasons he was not aware of.
Craig Kadlub, Director, Public Affairs, Clark County School District, said that A.B. 68 would be good for employees, but not without cost to employers. He explained that the school district currently paid employees beyond their contracts for such things as coaching, advising clubs and activities, part-time clerical work during summer months, curriculum development, and driving buses for events and field trips. He stated if compensation were redefined as proposed in the bill, and the school district had to pay retirement benefits on those extraordinary earnings, the financial impact to the Clark County School District would be approximately $3.9 million per year. He said that present budget concerns would likely force the district to curtail extracurricular activities and other projects to offset the new expense the bill would impose, rather than find nearly $4 million to support A.B. 68. He commented that the Clark County School District appreciated the request, but the detrimental financial impact of the unfunded measure would necessitate the District’s opposition to A.B. 68.
Mr. Collins stated for the record that he completed his senior year of high school only because of the football program. He added that he was involved locally and regionally with youth sports such as soccer, basketball, and baseball programs from 1973 to 1990. His involvement included working with coaches from various Clark County schools in basketball, baseball, and football. He stated that extracurricular activities were responsible for getting many kids through school. Mr. Collins said he knew a lot of coaches who, when ready to retire, left working with youth and entered administrative jobs to enhance their retirement benefits.
He explained that his father-in-law worked for 30 years with the Clark County School District and was involved with many extracurricular assignments that he, along with others, performed for free. He said he could not believe that the state, when needing to bring in better people who would work with students and the educational system, including bus drivers and support personnel, would not find a way for the retirement to be equal to employees’ gross earnings. He stated that rather than saying extracurricular programs would be cut, “We should go back to the school district and support adequate funding for the school districts.” The bill should just state, “Your retirement is based on your gross earnings.”
Chairman Manendo asked Mr. Collins if he was proposing his comment as an amendment, and Mr. Collins responded he was.
Jim Richardson, representing the Nevada Faculty Alliance Chapters, stated that his comments would be brief based on Ms. Giunchigliani indicating her willingness to amend the bill to delete lines 17 through 23 on page 2. He said that he encouraged the Committee to consider her amendment because the verbiage complicated the bill considerably in ways that had not been alluded to yet. For the record, the members of the Nevada Faculty Alliance Chapter had not clamored for the changes the bill would present. He said that he was surprised to see his organization included in the bill, but he understood why they were. The complication pertained to the state law requiring similar treatment of contribution rates for the separate retirement program used by the universities.
Mr. Richardson explained that very few professional employees were enrolled with the Public Employees’ Retirement System, and the number had decreased over the years since the Legislature allowed the university and community college system to develop a separate retirement system. He explained that it might have seemed to be a small impact on the system, but the state statutes required that contribution rates be equal. Mr. Richardson said, for the record, if Mr. Pyne’s statement were true about the retirement contribution rate being affected in the future, it would create a significant increase for the university system. Mr. Richardson concluded his testimony by stating that he supported Ms. Giunchigliani’s request to delete lines 17 through 23 of A.B. 68.
Assemblyman Knecht said if someone took the viewpoint of Mr. Collins that the retirement should be based on the total compensation, it would seem to support leaving in lines 17 through 23. He asked Mr. Richardson if he took a view contrary to Mr. Collins.
Mr. Richardson responded that as he indicated, the membership he represented throughout the system had not made the bill an issue, and he was not aware of their desire for the Legislature to pursue the bill. He explained that he should admit a slight conflict of interest because his wife was a kindergarten teacher. He stated that he did not know how many faculty staff would teach summer school for additional funds. He said he could get the data if the Committee desired. He stated that Ms. Giunchigliani adequately explained that Section 1, subsection 2, paragraph e, sub-paragraph 2, unnecessarily complicated the bill and placed a potential price tag on it that could sabotage A.B. 68, when initially it focused just on kindergarten through 12th grade.
Mr. Knecht said he believed there were professional employees in various state agencies who did teach part-time, and he asked Mr. Richardson if his organization represented them, and if not, who their representation was.
Mr. Richardson replied that his organization did have part-time members, but not many. He explained that the Board of Regents was requested to study the issue and appoint a task force that was supported by the Nevada Faculty Alliance membership. He said that he did not know about the bill until recently and did not have the time to do a lot of consulting, but none of his members around the state brought up the issue of extra teaching and contributions becoming a part of the retirement system, and none had requested that it be a topic before the Legislature.
Chairman Manendo asked if anyone else wanted to speak from Las Vegas, and hearing no response, he closed the hearing on A.B. 68.
Chairman Manendo asked the Committee to consider introduction of the following bill draft request.
· BDR 27-1025 – Abolishes Marlette Lake Water System Advisory Committee. (A.B. 164)
ASSEMBLYMAN WILLIAMS MOVED FOR INTRODUCTION OF BDR 27-1025.
ASSEMBLYMAN COLLINS SEC0NDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Rosemary Zienter
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: