MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-Second Session

May 17, 2003

 

 

The Committee on Ways and Meanswas called to order at 10:15 a.m., on Saturday, May 17, 2003.  Chairman Morse Arberry Jr., presided in Room 3137 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. Morse Arberry Jr., Chairman

Ms. Chris Giunchigliani, Vice Chairwoman

Mr. Walter Andonov

Mr. Bob Beers

Mrs. Vonne Chowning

Mr. David Goldwater

Mr. Josh Griffin

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Ms. Kathy McClain

Mr. David Parks

Mr. Richard Perkins

 

COMMITTEE MEMBERS ABSENT:

 

Mrs. Dawn Gibbons

 

GUEST LEGISLATORS PRESENT:

 

None

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Assembly Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Rick Combs, Deputy Fiscal Analyst

Mark Krmpotic, Senior Program Analyst

Larry Peri, Senior Program Analyst

Bob Atkinson, Program Analyst

Joyce Garrett, Program Analyst

Jim Rodriguez, Program Analyst

Carol Thomsen, Committee Secretary

Anne Bowen, Committee Secretary

Chairman Arberry announced that he would adjourn the hearing of May 16, 2003, which had been recessed.  He then called the meeting of May 17, 2003, to order and indicated the Committee would hear closing reports from the joint subcommittees.

 

Assemblywoman Leslie, Chairwoman, Ways and Means/Senate Finance Joint Subcommittee on Human Resources, read from the closing report for the Welfare Division, Department of Human Resources (DHR), as follows:

 

THE MAJOR FISCAL ISSUES ADDRESSED BY THE SUBCOMMITTEE FOR THE UPCOMING BIENNIUM FOR THE WELFARE DIVISION INCLUDE THE GOVERNOR’S RECOMMENDATIONFORSIGNIFICANT STAFFING INCREASES PRIMARILY TO ADDRESS CASELOAD GROWTH; THE PROJECTED GROWTH FOR TANF CASELOADS, WHICH WERE FUNDED EXCLUSIVELY WITH STATE GENERAL FUNDS; AND THE OVERALLOCATION OF TANF FUNDS THROUGHOUT THE DIVISION’S VARIOUS BUDGETS. 

 

THE SUBCOMMITTEE IS PLEASED TO REPORT THAT NUMEROUS CHANGES TO THE EXECUTIVE BUDGET ARE RECOMMENDED THAT WOULD PROVIDE FOR A SIGNIFICANT SAVINGS TO THE GENERAL FUND; THESE ADJUSTMENTS INCLUDE A REDUCTION IN THE NUMBER OF NEW POSITIONS RECOMMENDED; A REDUCTION IN THE PROJECTED GROWTH IN TANF CASELOADS TO MORE REALISTIC LEVELS; AND THE CORRECTION OF THE OVERALLOCATION OF TANF FUNDS.  IN CONCLUSION, THE SUBCOMMITTEE’S RECOMMENDATIONS WILL REDUCE THE GENERAL FUND APPROPRIATION FOR THE WELFARE DIVISION BY $7,491,632 FOR FY 2004 AND BY $10,900,896 FOR FY 2005, FOR A NET REDUCTION OF $18,392,525 OVER THE UPCOMING BIENNIUM.

 

Ms. Leslie pointed out that the Subcommittee was recommending $18 million less than the amount recommended in The Executive Budget for the Welfare Division.  The Subcommittee had developed a plan in conjunction with Welfare Division staff, staff of the Governor’s Office, and staff of the Fiscal Analysis Division, Legislative Counsel Bureau (LCB).  Ms. Leslie stated that Steve Abba, Principal Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), had done the “lion’s share” of the work, and the final plan would more effectively address the Welfare Division’s caseload.  Time frames would be reduced for the processing of applications, and Ms. Leslie emphasized that it was an excellent plan that would save $18 million.  Ms. Leslie continued her budget presentation.

 

THE FOLLOWING HIGHLIGHTS THE MORE SIGNIFICANT ISSUES AND BUDGET CLOSING ACTIONS THE SUBCOMMITTEE RECOMMENDS.

 

WELFARE ADMINISTRATION (101-3228) VOLUME II – PAGE 1

THE EXECUTIVE BUDGET RECOMMENDS A TOTAL OF 23 NEW POSITIONS OVER THE UPCOMING BIENNIUM TO SUPPORT DIVISION ADMINISTRATION, ADMINISTRATIVE SERVICES, PROGRAM AND FIELD OPERATIONS, PERSONNEL SERVICES AND INFORMATION SERVICES.  THE SUBCOMMITTEE RECOMMENDS APPROVING 12 OF THE 23 NEW POSITIONS RECOMMENDED BY THE GOVERNOR.  THE SUBCOMMITTEE’S RECOMMENDATION TO ELIMINATE 11 POSITIONS TAKES INTO CONSIDERATION THE ADDITIONAL RESOURCES AND SUPPORT THE DIVISION WOULD RECEIVE BY FUNCTIONAL AREA WITH THE 12 NEW POSITIONS THAT ARE RECOMMENDED, NEW POSITIONS THAT WOULD BE HELPFUL BUT NOT ESSENTIAL FOR THE DIVISION’S DAY-TO-DAY OPERATIONS, AND NEW INFORMATION WHICH DID NOT FULLY JUSTIFY THE NEED FOR CERTAIN POSITIONS. 

 

THE SUBCOMMITTEE ALSO RECOMMENDS A NUMBER OF TECHNICAL ADJUSTMENTS TO THE BUDGET THAT REDUCE DOIT FACILITY CHARGES THAT WERE OVERSTATED, REDUCE THE COSTS FOR THE ELECTRONIC BENEFIT TRANSFER (EBT) SYSTEM BASED ON REVISED CASELOADS AND REDUCE MSA SUPPORT FOR THE NOMADS SYSTEM.

 

WELFARE FIELD SERVICES (101-3233) VOLUME II – PAGE 11

THE EXECUTIVE BUDGET RECOMMENDS A TOTAL OF 255 NEW POSITIONS OVER THE 2003‑05 BIENNIUM AND THE CONTINUATION OF 84.5 NEW POSITIONS APPROVED BY THE INTERIM FINANCE COMMITTEE DURING THE INTERIM.  THE SUBCOMMITTEE IN REVIEWING THIS RECOMMENDATION WAS CONCERNED THAT THE NEW POSITIONS RECOMMENDED WERE PHASED-IN OVER THE UPCOMING BIENNIUM, THEREFORE THE TOTAL COSTS FOR THESE POSITIONS WOULD NOT BE REALIZED UNTIL THE 2005-07 BIENNIUM.  MORE IMPORTANTLY OF THE 107 NEW POSITIONS RECOMMENDED FOR FY 2004, ONLY 20 ELIGIBILITY WORKERS WERE RECOMMENDED DURING THE FIRST SIX MONTHS OF FY 2004.  THE CONTINGENT OF 20 NEW ELIGIBILITY WORKERS WOULD NOT EFFECTIVELY ASSIST THE DIVISION IN ADDRESSING THE PROBLEMS CURRENTLY EXPERIENCED WITH THE TIMELY PROCESSING OF FOOD STAMP, MEDICAID AND TANF APPLICATIONS; THE INVENTORY OF PENDING APPLICATIONS; AND PERFORMING TIMELY RE‑DETERMINATIONS.  ALSO OF THE NEW POSITIONS RECOMMENDED, 65 POSITIONS WERE PHASED-IN TO BEGIN IN JANUARY 2005.  THE EFFECTIVE DATE OF THESE POSITIONS WOULD PROVIDE LITTLE OPPORTUNITY TO RECRUIT, FILL THE POSITIONS AND TRAIN THE INDIVIDUALS HIRED TO ADDRESS CASELOADS BEFORE THE END OF FY 2005. 

IN LIGHT OF THESE CONCERNS, THE SUBCOMMITTEE RECOMMENDS APPROVING A STAFFING ALTERNATIVE THAT PROVIDES FOR 135.5 NEW POSITIONS AND RECOMMENDS ELIMINATING 119.5 OF THE 255 NEW POSITIONS RECOMMENDED BY THE GOVERNOR.  THE STAFFING ALTERNATIVE WOULD ALLOW THE DIVISION TO ACCELERATE THE HIRING OF NEW POSITIONS IN FY 2004 TO ADDRESS THE CASELOAD PROCESSING CONCERNS PREVIOUSLY NOTED.  THE POSITIONS WOULD BE PHASED-IN TO COINCIDE WITH THE DIVISION’S TRAINING SCHEDULE.  THE SUBCOMMITTEE ALSO RECOMMENDS APPROVING FUNDS FOR A NEW DISTRICT OFFICE IN LAS VEGAS TO HOUSE THE NEW POSITIONS AS WELL AS EXISTING STAFF THAT MAY BE RELOCATED TO THE NEW LOCATION IN LIEU OF THE TWO NEW DISTRICT OFFICES RECOMMENDED IN THE EXECUTIVE BUDGET.  THE STAFFING ALTERNATIVE WOULD ALLOW THE DIVISION TO FILL 26.5 ELIGIBILITY WORKER POSITIONS THAT ARE CURRENTLY FROZEN AND THE ROLL-OUT SCHEDULE FOR NEW ELIGIBILITY WORKER POSITIONS WOULD PROVIDE 79 ELIGIBILITY WORKER POSITIONS TO ADDRESS CASELOADS WITHIN THE FIRST SIX MONTHS OF FY 2004.  THE STAFFING ALTERNATIVE WILL SAVE APPROXIMATELY $1.7 MILLION IN GENERAL FUNDS OVER THE 2003-05 BIENNIUM COMPARED TO THE STAFFING PROPOSAL THAT IS RECOMMENDED IN THE EXECUTIVE BUDGET.  THE RECOMMENDATION TO ELIMINATE 119.5 NEW POSITIONS WOULD SAVE APPROXIMATELY $11 MILLION IN TOTAL SALARY COSTS FOR THE 2005-07 BIENNIUM COMPARED TO THE TOTAL SALARY COSTS IF THE FULL COMPLEMENT OF 255 NEW POSITIONS WERE APPROVED AS RECOMMENDED IN THE EXECUTIVE BUDGET.   

 

TANF (101-3230) VOLUME II - PAGE 20

SINCE JULY 2002 TANF CASELOADS HAVE DECLINED SINCE THEIR HIGH POINT OF OVER 35,100 RECIPIENTS PER MONTH IN MAY 2002.  THE EXECUTIVE BUDGET RECOMMENDS GROWTH IN TANF CASELOADS THAT APPEAR TO BE UNREALISTIC WHEN COMPARED TO CURRENT CASELOAD TRENDS.  DURING IT’S REVIEW OF THE TANF BUDGET, THE SUBCOMMITTEE EXPRESSED CONCERNS THAT THE PROJECTIONS PROVIDED BY THE DIVISION DID NOT FULLY TAKE INTO CONSIDERATION THAT TANF CASELOADS HAVE EXPERIENCED A DECLINE OVER THE LAST NINE MONTHS AND APPEARS TO BE STABILIZING.  THE SUBCOMMITTEE REVIEWED A NUMBER OF CASELOAD OPTIONS AND RECOMMENDS FUNDING THAT WOULD SUPPORT TANF CASELOADS AT 32,430 AVERAGE MONTHLY RECIPIENTS FOR FY 2004 AND 35,430 AVERAGE MONTHLY RECIPIENTS FOR FY 2005.  THE CASELOAD OPTION THE SUBCOMMITTEE RECOMMENDS IS APPROXIMATELY 7,400 AVERAGE MONTHLY RECIPIENTS LOWER THAN THE TANF CASELOADS RECOMMENDED IN THE EXECUTIVE BUDGET FOR FY 2004 AND 10,825 AVERAGE MONTHLY RECIPIENTS LOWER FOR FY 2005.  THE TANF CASELOAD THE SUBCOMMITTEE RECOMMENDS WILL PROVIDE FOR A MARGIN OF CASELOAD GROWTH IF THE ECONOMY DETERIORATES AND CASELOAD INCREASES ARE EXPERIENCED.  THE CASELOAD REDUCTIONS THE SUBCOMMITTEE RECOMMENDS APPROVING WILL SAVE APPROXIMATELY $13.8 MILLION IN STATE GENERAL FUNDS OVER THE 2003-05 BIENNIUM.  THE SAVINGS WOULD HAVE BEEN GREATER HOWEVER, THE EXECUTIVE BUDGET OVERALLOCATED TANF FUNDS IN THE AMOUNT OF APPROXIMATELY $6.5 MILLION FOR EACH FISCAL YEAR OF THE UPCOMING BIENNIUM.  THE ADDITIONAL SAVINGS THAT WOULD HAVE BEEN GENERATED FROM THE CASELOAD OPTION THE SUBCOMMITTEE RECOMMENDS WERE NEEDED TO OFFSET THE OVERALLOCATION OF TANF FUNDS.

 

IT SHOULD BE NOTED THE SUBCOMMITTEE DOES NOT RECOMMEND ANY ADDITIONAL FUNDS FOR THE UPCOMING BIENNIUM TO REPLENISH THE BUDGET REDUCTIONS THAT WERE IMPLEMENTED DURING THE CURRENT BIENNIUM TO ADDRESS SHORTFALLS IN THE TANF BUDGET. 

 

CHILD SUPPORT ENFORCEMENT (101-3238) VOLUME II PAGE 32

THE SUBCOMMITTEE RECOMMENDS APPROVING THE CHILD SUPPORT ENFORCEMENT BUDGET AS RECOMMENDED WITH NUMEROUS TECHNICAL ADJUSTMENTS.  THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION FOR NINE NEW POSITIONS THAT WILL BE SUPPORTED WITH THE STATE SHARE OF COLLECTIONS AND MATCHING FEDERAL FUNDS. 

 

THE CHILD SUPPORT ENFORCEMENT BUDGET INCLUDES FUNDING FROM A NEW REVENUE SOURCE TO SUPPORT THE PROGRAM IN FUTURE YEARS.  THE NEW REVENUE SOURCE WOULD BE GENERATED FROM FEES COLLECTED THROUGH WAGE ASSIGNMENTS ON EMPLOYEES PAYING CHILD SUPPORT.  THE TWO-DOLLAR FEE WOULD BE SPLIT EVENLY BETWEEN THE STATE AND THE COUNTY DISTRICT ATTORNEYS.  S.B. 186 HAS BEEN INTRODUCED AND PASSED IN THE SENATE TO ENACT THIS CHANGE AND IS CURRENTLY UNDER REVIEW IN THE ASSEMBLY COMMITTEE ON JUDICIARY.  THE SUBCOMMITTEE ALSO RECOMMENDS ALLOWING THE DIVISION TO RETAIN A $750,000 RESERVE IN THE CHILD SUPPORT ENFORCEMENT BUDGET FOR CASH FLOW PURPOSES.

 

CHILD ASSISTANCE AND DEVELOPMENT (101-3267) VOLUME II–PAGE 37

THE SUBCOMMITTEE RECOMMENDS APPROVING THE CHILD ASSISTANCE AND DEVELOPMENT BUDGET WITH NUMEROUS ADJUSTMENTS PRIMARILY TO CORRECT AN ERROR IN THE EXECUTIVE BUDGET THAT OVERSTATED THE AVAILABILITY OF FEDERAL CHILDCARE FUNDS BY APPROXIMATELY $9.1 MILLION FOR EACH FISCAL YEAR OF THE 2003-05 BIENNIUM.  THE WELFARE DIVISION IS CONSIDERING SEVERAL MEASURES DESIGNED TO REMAIN WITHIN THE FEDERAL CHILDCARE ALLOCATIONS PROJECTED FOR THE UPCOMING BIENNIUM AND TO CONTINUE THE AVAILABILITY OF CHILDCARE SERVICES TO THE MOST NEEDY CLIENTS REFERRED TO AS THE MANDATORY POPULATION.  THE MANDATORY POPULATION INCLUDES CURRENT TANF RECIPIENTS WHO ARE ENROLLED IN VARIOUS WORK PARTICIPATION ACTIVITIES AS MANDATED BY FEDERAL LAW AND FORMER TANF RECIPIENTS WHO BECOME INELIGIBLE FOR CASH ASSISTANCE AS A RESULT OF EARNED INCOME.  THE MEASURES THE WELFARE DIVISION IS CONSIDERING INCLUDE CHANGES THAT WILL TIGHTEN ELIGIBILITY AND INCLUDE ASSESSING A MINIMUM CO‑PAYMENT FOR CLIENTS WHO CURRENTLY ARE NOT REQUIRED TO PAY CO-PAYMENTS.

 

THE WELFARE DIVISION ANTICIPATES HAVING SUFFICIENT CHILDCARE FUNDING TO COVER THE CHILDCARE NEEDS OF THE MANDATORY POPULATION FOR THE UPCOMING BIENNIUM.  HOWEVER THE WAITING LIST FOR CHILDCARE SERVICES FOR THE NON-MANDATORY POPULATIONS WILL CONTINUE TO

GROW OVER THE UPCOMING BIENNIUM. 

 

THE SUBCOMMITTEE RECOMMENDS CLOSING THE AGED AND BLIND, ENERGY ASSISTANCE AND CHILD SUPPORT ENFORCEMENT FEDERAL REIMBURSEMENT BUDGETS WITH MINOR TECHNICAL ADJUSTMENTS OR AS RECOMMENDED BY THE GOVERNOR. 

 

Assemblyman Beers informed the Committee that he would not vote in favor of accepting the closing report because it represented an approximately 30 to 40 percent increase in General Fund allocation.  Despite the savings, Mr. Beers stated it appeared to be a “nice cut from a preposterous proposal.”

 

Assemblywoman Giunchigliani noted that the Welfare Division budget often exhibited a downhill trend during times when the economy was not stable, and it should be recognized that people needed services during those times.  She commended the Subcommittee for doing its job and pointed out that even under current circumstances, the Subcommittee had managed to cut $18,392,525 over the upcoming biennium.  Ms. Giunchigliani believed that the Subcommittee had been diligent in its review of the budget, and staff had been very cooperative in working with the Subcommittee to ensure that the Temporary Assistance to Needy Families (TANF) caseload was appropriate.  She believed the Committee should recognize that the economy was presently not on the upswing, and there might be individuals who required those services that the government was charging taxes for.  Ms. Giunchigliani opined that such programs provided the “safety net,” and she commended the Subcommittee for its work.

 

Assemblywoman Leslie stated that Mr. Abba deserved commendation for his work on the TANF plan because the alternative caseload plan would not have been developed without his hard work. 

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO APPROVE THE CLOSING REPORT FOR THE BUDGET ACCOUNTS WITHIN THE WELFARE DIVISION, DEPARTMENT OF HUMAN RESOURCES.

 

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

 

THE MOTION CARRIED WITH ASSEMBLYMEN ANDONOV, BEERS, HETTRICK, AND MARVEL VOTING NO.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGETS CLOSED.

 

********

 

Assemblywoman Leslie, Chairwoman, Ways and Means/Senate Finance Joint Subcommittee on Human Resources, read from the closing report for the Department of Human Resources, Division of Health Care Financing and Policy (HCF&P):

 

THE MAJOR FISCAL ISSUES ADDRESSED BY THE SUBCOMMITTEE FOR THE UPCOMING BIENNIUM FOR THE DIVISION OF HEALTH CARE FINANCING AND POLICY PRIMARILY INCLUDE MEDICAID CASELOADS AND COSTS THAT WERE RE‑PROJECTED IN APRIL FOR THE UPCOMING BIENNIUM WHICH WERE SIGNIFICANTLY HIGHER THAN RECOMMENDED IN THE EXECUTIVE BUDGET; THE BUDGET REDUCTION/COST SAVING INITIATIVES RECOMMENDED BY THE GOVERNOR; THE RECOMMENDATION TO ESTABLISH A NEW PROGRAM CALLED HIWA WHICH WOULD ALLOW DISABLED INDIVIDUALS WHO ARE EMPLOYED TO OBTAIN MEDICAID COVERAGE THROUGH A BUY‑IN MECHANISM; THE ELIMINATION OF THE CHAP ASSETS TEST; AND THE GOVERNOR’S RECOMMENDATION TO CONTINUE THE EXPANSION OF MEDICAID WAIVERS. 

THE SUBCOMMITTEE IS PLEASED TO REPORT THAT NUMEROUS CHANGES TO THE EXECUTIVE BUDGET ARE RECOMMENDED FOR THE COMMITTEE’S CONSIDERATION THAT WOULD PROVIDE FOR A GENERAL FUND SAVINGS OF $9,723,742 FOR FY 2004 AND $6,028,278 FOR FY 2005 FOR A NET REDUCTION OF $15,752,020 OVER THE 2003-05 BIENNIUM.  THE FOLLOWING HIGHLIGHTS THE MORE SIGNIFICANT ISSUES AND BUDGET CLOSING ADJUSTMENTS THE SUBCOMMITTEE RECOMMENDS. 

 

HEALTH CARE FINANCING AND POLICY – ADMINISTRATION (101-3158) VOLUME II – PAGE 1

THE SUBCOMMITTEE RECOMMENDS APPROVING ONE NEW POSITION TO SERVE AS THE DIVISION’S PRIVACY OFFICER TO ENSURE STAFF COMPLIES WITH PRIVACY PROCEDURES REQUIRED BY THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA).  THE SUBCOMMITTEE’S INTENT IS FOR THIS POSITION TO BE AVAILABLE TO SUPPORT SISTER AGENCIES SUCH AS THE DIVISION FOR AGING SERVICES WITH THEIR HIPAA COMPLIANCE ACTIVITIES. 

 

THE SUBCOMMITTEE RECOMMENDS APPROVING THE REORGANIZATION PROPOSED IN THE EXECUTIVE BUDGET.  THE REORGANIZATION INVOLVES THE TRANSFER OF EXISTING POSITIONS FROM THE MEDICAID AND CHECK-UP PROGRAMS TO THE ADMINISTRATION BUDGET.  THE REORGANIZATION WILL ASSIST THE DIVISION WITH IMPLEMENTING A NEW COST ALLOCATION PLAN AND WILL SAVE OVER $300,000 IN GENERAL FUND FOR EACH FISCAL YEAR OF THE UPCOMING BIENNIUM.

 

MEDICAID (101-3243) VOLUME II – PAGE 11

THE DIVISION AT THEIR LAST BUDGET HEARING PRESENTED INFORMATION TO THE SUBCOMMITTEE ON THE PROJECTED MEDICAID EXPENDITURES FOR THE UPCOMING BIENNIUM BASED ON THE RE‑RUNNING OF THE MEDICAID PAYMENT PROJECTION (MPP) MODEL.  ACCORDING TO THE LATEST MPP, MEDICAID EXPENDITURES WERE PROJECTED TO INCREASE BY $17 MILLION FOR FY 2004 AND BY $37 MILLION FOR FY 2005.  THE GENERAL FUND PORTION OF THE PROJECTED INCREASE IS $24.1 MILLION OVER THE UPCOMING BIENNIUM.  THE DIVISION IDENTIFIED THREE PRIMARY REASONS FOR THE PROJECTED INCREASE.  FIRST, HMO PROVIDERS PARTICIPATING IN THE MANAGED CARE PROGRAM WILL RECEIVE AN ACTUARIALLY DETERMINED RATE INCREASE OF 6.9 PERCENT EFFECTIVE JULY 2003 WHICH WAS NOT BUILT INTO THE EXECUTIVE BUDGET.  SECOND, THE MEDICAL EXPENSES FOR THE NON-CITIZEN POPULATION WERE INADVERTENTLY LEFT OUT OF THE EXECUTIVE BUDGET.  THIS IS A SMALL BUT COSTLY POPULATION.  THIRD, THE CASELOAD AND COST PER ELIGIBLE FOR THE CHAP POPULATION INCREASED. 

 

TO OFFSET THE PROJECTED INCREASE IN MEDICAID EXPENDITURES, THE SUBCOMMITTEE HAS IDENTIFIED AND RECOMMENDS NUMEROUS OFFSETS THAT WOULD ELIMINATE THE BUDGET IMPACT FROM THE MPP ANALYSIS AND WOULD FUND THE PROGRAM EXPENDITURES THAT WERE NOT INCLUDED IN THE EXECUTIVE BUDGET.  THE OFFSETS INCLUDE A REDUCTION IN THE AMOUNT OF FUNDING THAT IS BUDGETED FOR FY 2004 TO REDUCE CLAIMS INVENTORY TO ENSURE THE SMOOTH TRANSITION TO THE MMIS SYSTEM.  THE REDUCTION IN CLAIMS INVENTORY IS OCCURRING AT A MUCH MORE ACCELERATED RATE DURING THE CURRENT FISCAL YEAR THAN WAS ANTICIPATED WHICH PROVIDES FOR THE SAVINGS IN FY 2004.  THE REDUCTION THAT THE SUBCOMMITTEE RECOMMENDS WILL NOT JEOPARDIZE THE IMPLEMENTATION OF THE MMIS SYSTEM SCHEDULED FOR OCTOBER 2003.  ADDITIONAL SAVINGS WILL BE REALIZED FROM THE REDUCTION IN TANF CASELOADS THAT THE SUBCOMMITTEE RECOMMENDS IN THE TANF BUDGET.  THE SUBCOMMITTEE ALSO RECOMMENDS APPROVING NUMEROUS REDUCTIONS TO THE MPP PROJECTION BASED ON REVISED ASSUMPTIONS AND TECHNICAL CORRECTIONS BASED ON CHANGES IN THE FEDERAL MATCH PARTICIPATION RATE.     

 

THE SUBCOMMITTEE RECOMMENDS FUNDING THAT WOULD SUPPORT MEDICAID CASELOADS AT 179,535 AVERAGE MONTHLY RECIPIENTS FOR FY 2004 AND 196,947 AVERAGE MONTHLY RECIPIENTS FOR FY 2005.  THE PROJECTED CASELOADS ARE APPROXIMATELY 5,100 AVERAGE MONTHLY RECIPIENTS LOWER THAT THE MEDICAID CASELOAD RECOMMENDED IN THE EXECUTIVE BUDGET FOR FY 2004 AND APPROXIMATELY 6,800 AVERAGE MONTHLY RECIPIENTS LOWER FOR FY 2005.  THE DIVISION CONCURS WITH THE SUBCOMMITTEE’S RECOMMENDATION FOR CASELOAD GROWTH.

 

THE SUBCOMMITTEE RECOMMENDS APPROVING THE BUDGET REDUCTION AND COST SAVING INITIATIVES PROPOSED BY THE GOVERNOR FOR THE UPCOMING BIENNIUM.  THE ADMINISTRATION HAS PROPOSED A NUMBER OF CHANGES TO THE BUDGET REDUCTION AND COST SAVING INITIATIVES THAT REDUCE THE AMOUNT OF SAVINGS THAT WOULD BE REALIZED FOR THE UPCOMING BIENNIUM.  THE ESTIMATED SAVINGS IN GENERAL FUND FROM THESE INITIATIVES WERE REDUCED FROM $18.9 MILLION TO $14.9 MILLION FOR FY 2004 AND FROM $20.5 MILLION TO $18.5 MILLION FOR FY 2005, FOR A NET REDUCTION OF $6 MILLION IN THE AMOUNT OF SAVINGS ESTIMATED OVER THE UPCOMING BIENNIUM COMPARED TO AMOUNTS IN THE EXECUTIVE BUDGET.  SEVERAL OF THE BUDGET REDUCTION AND COST SAVING INITIATIVES INCLUDED IN THE EXECUTIVE BUDGET HAVE ALREADY BEEN IMPLEMENTED AND THE SUBCOMMITTEE RECOMMENDS THEIR CONTINUATION FOR THE UPCOMING BIENNIUM.  THESE INCLUDE MANAGED UTILIZATION OF CERTAIN PRESCRIPTION DRUGS AND THE REDUCTION IN PHARMACY REIMBURSEMENT.  THE NEW INITIATIVES RECOMMENDED FOR THE UPCOMING BIENNIUM INCLUDE THE IMPLEMENTATION OF A PREFERRED DRUG LIST (PDL), THE MANAGED UTILIZATION OF PERSONAL CARE AIDES, THE IMPLEMENTATION OF MAXIMUM ALLOWABLE COST PRICING FOR GENERIC PRESCRIPTION DRUGS AND CHANGING THE REIMBURSEMENT METHODOLOGY FOR PHYSICIAN GROUPS. 

 

THE SUBCOMMITTEE RECOMMENDS APPROVING A NEW PROGRAM CALLED HEALTH INSURANCE FOR WORK ADVANCEMENT OR HIWA.  THE PROGRAM WOULD ALLOW EMPLOYED DISABLED INDIVIDUALS TO OBTAIN MEDICAID COVERAGE THROUGH A BUY-IN MECHANISM.  THE HIWA PROGRAM CANNOT BE IMPLEMENTED IN OCTOBER AS RECOMMENDED IN THE EXECUTIVE BUDGET.  THE SUBCOMMITTEE RECOMMENDS FUNDING TO IMPLEMENT THE

HIWA PROGRAM BEGINNING IN JULY 2004.   

 

THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S PROPOSAL TO ENSURE THERE IS SUFFICIENT FUNDING IN THE MEDICAID BUDGET WHEN A COUNTY IS UNABLE TO MEET ITS FINANCIAL OBLIGATION UNDER THE COUNTY MATCH PROGRAM.  THE PROPOSAL IS FOR THE STATE TO PAY FOR LONG-TERM EXPENDITURES, REGARDLESS IF A COUNTY IS RESPONSIBLE FOR PAYMENT, IF THAT COUNTY HAS COLLECTED AND SPENT PROPERTY TAX PROCEEDS UP TO EIGHT CENTS FOR LONG-CARE EXPENDITURES UNDER THE COUNTY MATCH PROGRAM.  THIS PROPOSAL WILL ESPECIALLY HELP RURAL COUNTIES THAT HISTORICALLY EXPERIENCE PROBLEMS WITH MEETING THEIR LONG-TERM CARE OBLIGATIONS.

 

THE SUBCOMMITTEE RECOMMENDS APPROVING THE ELIMINATION OF THE CHAP ASSETS TEST CONSIDERED BY MANY TO BE AN ENROLLMENT BARRIER AND POTENTIALLY A REASON MANY FAMILIES FAIL TO COMPLETE THE MEDICAID APPLICATION PROCESS.  THE ELIMINATION OF THE CHAP ASSETS TEST WAS AN INITIATIVE APPROVED BY THE 2001 LEGISLATURE; HOWEVER, IMPLEMENTATION WAS DEFERRED DURING THE INTERIM AS A BUDGET SAVINGS MEASURE.  THE SUBCOMMITTEE RECOMMENDS DELAYING THE ELIMINATION OF THE CHAP ASSETS TEST UNTIL JULY 2004 AS A MEANS TO REDUCE PROJECTED MEDICAID EXPENDITURES FOR THE ANTICIPATED INCREASE IN CASELOAD.

 

Ms. Leslie informed the Committee that the Senate had closed the budget without the elimination of the Child Health Assurance Program (CHAP) assets test, however, that decision had been reversed and the Senate would concur with the elimination of that test during the second year of the biennium.  Ms. Leslie continued her presentation.

 

THE SUBCOMMITTEE RECOMMENDS FUNDING TO EXPAND SEVERAL EXISTING MEDICAID WAIVERS BY ADDING NEW SLOTS OVER THE UPCOMING BIENNIUM.  THE SUBCOMMITTEE RECOMMENDS EXPANDING THE COMMUNITY HOME-BASED INITIATIVE (CHIP) WAIVER, THE ADULT GROUP CARE WAIVER AND THE PHYSICALLY DISABLED WAIVER.  THE EXPANSIONS WILL ADDRESS GROWTH IN POPULATION AS WELL AS PROJECTED WAITING LISTS.  THE EXPANSION OF WAIVER SLOTS WILL ALSO ADDRESS THE STATE’S EFFORTS TO COMPLY WITH THE OLMSTEAD DECISION.  THE EXPANSION OF THE ADULT GROUP CARE WAIVER WOULD PROVIDE FOR ADDITIONAL LEVELS OF CARE IN A GROUP CARE SETTING AND ALLOW FOR WAIVER SERVICES TO BE PROVIDED FOR IN AN ASSISTED LIVING MODEL. 

FINALLY, THE SUBCOMMITTEE RECOMMENDS MANDATORY RATE INCREASES FOR PHARMACY PROVIDERS AND DISCRETIONARY RATE INCREASES FOR A SMALL NUMBER OF CRITICAL PROVIDERS AND SERVICES THAT INCLUDE THERAPY SERVICES, TRANSPORTATION PROVIDERS, AIR AMBULANCE PROVIDERS, AND ORTHODONTIA AND DENTAL SERVICES.  THE RATE INCREASES FOR DENTAL SERVICES ARE DESIGNED TO IMPROVE ACCESS TO DENTAL CARE FOR CHILDREN.

 

CHECK-UP (101-3178) VOLUME II – PAGE 31

THE SUBCOMMITTEE RECOMMENDS APPROVING FUNDS TO ALLOW ENROLLMENT IN THE CHECK-UP PROGRAM TO INCREASE TO 27,532 CHILDREN PER MONTH FOR FY 2004 AND 31,023 CHILDREN PER MONTH FOR FY 2005.  THE ENROLLMENT GROWTH THE SUBCOMMITTEE RECOMMENDS IS LOWER THAN THE LEVEL OF GROWTH RECOMMENDED IN THE EXECUTIVE BUDGET; HOWEVER, IS BASED ON MORE CURRENT PROJECTIONS.  THE LOWER LEVEL OF ENROLLMENT PROVIDES FOR A GENERAL FUND SAVINGS OF APPROXIMATELY $1.24 MILLION OVER THE UPCOMING BIENNIUM. 

 

THE SUBCOMMITTEE ALSO RECOMMENDS INCREASING THE AMOUNT OF THE QUARTERLY PREMIUM ASSESSED FAMILIES WHO HAVE CHILDREN ENROLLED IN THE CHECK-UP PROGRAM.  THE AMOUNT OF INCREASE RANGES FROM $5 TO $20 DEPENDING UPON THE FAMILY’S INCOME LEVEL.  THE QUARTERLY PREMIUMS THAT FAMILIES CURRENTLY PAY HAVE NOT BEEN INCREASED SINCE THE INCEPTION OF THE PROGRAM IN 1998. 

 

THE SUBCOMMITTEE RECOMMENDS APPROVING THE ELIMINATION OF THE REIMBURSEMENT DIFFERENTIAL PAID TO MANAGED CARE PROVIDERS PARTICIPATING IN THE CHECK-UP AND MEDICAID PROGRAMS AS RECOMMENDED BY THE GOVERNOR.  THE SAVINGS THE SUBCOMMITTEE RECOMMENDS IS HIGHER THAN THE AMOUNTS INCLUDED IN THE EXECUTIVE BUDGET BASED ON MORE RECENT INFORMATION RECEIVED FROM THE DIVISION’S ACTUARY.  THIS WILL PROVIDE FOR AN ADDITIONAL SAVINGS TO THE GENERAL FUND IN THE AMOUNT OF $888,000 FOR FY 2004 AND $1.1 MILLION FOR FY 2005.

 

INTERGOVERNMENTAL TRANSFER/DISPROPORTIONATE SHARE PROGRAM (101-3157) VOLUME II – PAGE 38

THE SUBCOMMITTEE RECOMMENDS APPROVING THE INTERGOVERNMENTAL TRANSFER (IGT) PROGRAM AS PROPOSED IN THE EXECUTIVE BUDGET.  THE IGT PROGRAM WILL GENERATE A BENEFIT TO THE STATE IN THE AMOUNT OF APPROXIMATELY $17.5 MILLION FOR FY 2004 AND APPROXIMATELY $18.2 MILLION FOR FY 2005.  THE PUBLIC HOSPITALS AND COUNTIES THAT PARTICIPATE IN THE PROGRAM WILL RECEIVE APPROXIMATELY $20 MILLION IN ADDITIONAL FUNDS FOR EACH FISCAL YEAR OF THE 2003-05 BIENNIUM IN THE FORM OF DISPROPORTIONATE SHARE PAYMENTS FROM THE MEDICAID PROGRAM.

 

THE SUBCOMMITTEE RECOMMENDS SEVERAL ADJUSTMENTS TO THE IGT BUDGET TO ESTABLISH THE REVENUE AND EXPENDITURE AUTHORITY TO OPERATE THE UPPER PAYMENT LIMIT (UPL) PROGRAM FOR THE UPCOMING BIENNIUM.  AS THE COMMITTEE WILL RECALL, THE UPL PROGRAM PROVIDES SUPPLEMENTAL PAYMENTS TO QUALIFYING HOSPITALS AND WAS APPROVED BY THE INTERIM FINANCE COMMITTEE AT THE FEBRUARY 2003 MEETING.  THE UPL PROGRAM WOULD PROVIDE THE STATE A NET BENEFIT OF APPROXIMATELY $4.9 MILLION FOR FY 2004 AND $6.2 MILLION FOR FY 2005.  THE NET BENEFIT THE STATE WILL ACCRUE FROM THE UPL PROGRAM WAS NOT INCLUDED IN THE EXECUTIVE BUDGET.  IN LIGHT OF THIS, THE SUBCOMMITTEE RECOMMENDS ADDITIONAL TRANSFERS FROM THE IGT BUDGET TO THE MEDICAID BUDGET IN THE AMOUNT OF $5 MILLION FOR FY 2004 AND $6 MILLION FOR FY 2005.  THE ADDITIONAL IGT TRANSFERS WOULD BE USED AS STATE MATCH IN THE MEDICAID BUDGET AND WOULD REDUCE STATE GENERAL FUNDS BY THE AMOUNT OF THE ADDITIONAL TRANSFERS.  THE SUBCOMMITTEE’S RECOMMENDATION WILL LEAVE THE IGT BUDGET WITH A SUFFICIENT RESERVE TO MAINTAIN CASH FLOW FOR THE UPCOMING BIENNIUM.

 

Assemblywoman Leslie advised the Committee that Mr. Abba had done an outstanding job in assisting the Subcommittee in resolving the difficult budget for the Division of Health Care Financing and Policy, which realized a net reduction of $15 million, while addressing the growing Medicaid caseload. 

 

Assemblyman Beers commented that it appeared several opportunities were passed over by the Subcommittee to make reasonable inroads to the expansion, such as the assets test.  He indicated that the increase in General Fund appropriation would be approximately 23 percent, which was more than twice the rate that the state of Nevada would grow over the next two years.  Mr. Beers stated that he would not vote in favor of approving the Subcommittee’s closing report.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO APPROVE THE CLOSING REPORT FOR THE BUDGET ACCOUNTS WITHIN THE DIVISION OF HEALTH CARE FINANCING AND POLICY, DEPARTMENT OF HUMAN RESOURCES.

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED WITH ASSEMBLYMEN ANDONOV, BEERS,

HETTRICK, AND MARVEL VOTING NO.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGETS CLOSED.

 

********

 

Assemblywoman Chowning, Chairwoman, Ways and Means/Senate Finance Joint Subcommittee on General Government, complimented Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), for his hard work on the very difficult budget closing, and read from the closing report for the Public Employees’ Benefits Program (PEBP):

 

THE JOINT SUBCOMMITTEE REVIEWED THE TWO BUDGET ACCOUNTS OF THE PUBLIC EMPLOYEES’ BENEFITS PROGRAM.

FOR THE PUBLIC EMPLOYEES’ BENEFITS ACCOUNT, THE SUBCOMMITTEE CONSIDERED SEVERAL ITEMS THAT WERE RECOMMENDED IN THE EXECUTIVE BUDGET.

 

INCLUDED IN THE RECOMMENDED BUDGET IS A NEW UNCLASSIFIED FINANCIAL ANALYST POSITION TO ASSIST THE PROGRAM WITH ANALYSIS OF TRENDS AND UTILIZATION, AS WELL AS EVALUATION OF THE FINANCIAL IMPACTS OF PROPOSED PLAN DESIGN CHANGES.  THE SUBCOMMITTEE CONCURRED WITH THE ADDITION OF THIS POSITION AND ALSO CONCURRED WITH THE RECOMMENDED REPLACEMENT OF FIVE TEMPORARY CLERICAL STAFF WITH PERMANENT POSITIONS IN THE OPERATIONS AND PUBLIC RELATIONS SECTIONS OF THE PROGRAM.  ALL OF THESE NEW POSITIONS ARE RECOMMENDED TO BE FUNDED WITH A REDUCTION IN THE COST OF SERVICES CURRENTLY PROVIDED THROUGH CONTRACTS.  IN ADDITION, THE SUBCOMMITTEE APPROVED THE RECOMMENDED INCREASE IN NON-STATE OWNED BUILDING RENT TO PROVIDE OFFICE SPACE FOR THESE NEW POSITIONS.

 

THE SUBCOMMITTEE CONSIDERED THE REQUEST FOR OVERTIME AS RECOMMENDED IN DECISION UNIT E-275.  HOWEVER, THE SUBCOMMITTEE DID NOT RECOMMEND APPROVAL OF THAT DECISION UNIT.  THE SUBCOMMITTEE REASONED THAT A FULL COMPLEMENT OF STAFF SHOULD REDUCE THE NEED FOR ANY OVERTIME, AND THAT ANY OVERTIME REQUIRED FOR SPECIAL PROJECTS SHOULD BE HANDLED THROUGH THE EFFECTIVE USE OF COMPENSATORY TIME.

 

THE SUBCOMMITTEE RECOMMENDED THE APPROVAL OF THE GOVERNOR’S RECOMMENDED STATE CONTRIBUTION RATES MADE ON BEHALF OF STATE EMPLOYEES, AND ASSEMBLY BILL 544 HAS BEEN INTRODUCED TO ESTABLISH THESE RATES IN LAW.  FOR FISCAL YEAR 2003-04, THE RECOMMENDED AMOUNT IS $495.68 PER MONTH, WHICH REPRESENTS AN INCREASE OF 6.4 PERCENT WHEN COMPARED TO THE CURRENT AMOUNT OF $465.78 PER MONTH.  FOR FISCAL YEAR 2004-05,

THE RECOMMENDED AMOUNT IS $558.07 PER MONTH, WHICH REPRESENTS AN INCREASE OF 12.6 PERCENT OVER THE AMOUNT RECOMMENDED FOR FISCAL YEAR 2003-04.

 

THE COMMITTEE MAY RECALL THAT THE PUBLIC EMPLOYEES’ BENEFITS PROGRAM INCURRED A NET OPERATING LOSS IN EXCESS OF $16 MILLION DOLLARS FOR FISCAL YEAR 2001-02, WHICH SEVERELY REDUCED THE CASH BALANCE IN THE FUND.  AT JUNE 30, 2002, THE PROGRAM HAD CASH RESERVES AND OTHER ASSETS OF APPROXIMATELY $9 MILLION, ALONG WITH A LIABILITY FOR INCURRED BUT NOT REPORTED CLAIMS ESTIMATED AT $24.9 MILLION, LEAVING THE FUND WITH A DEFICIT FUND BALANCE OF APPROXIMATELY $15.9 MILLION.  THE LOSSES OF THE PROGRAM CONTINUED INTO FISCAL YEAR 2002-03 AND, EVEN WITH A CASH INFUSION OF APPROXIMATELY $18 MILLION FROM THE 2002 SPECIAL SESSION, THE PROGRAM ANTICIPATES THAT THE CASH BALANCE WILL BE REDUCED TO $3.9 OR $4.0 MILLION AT JUNE 30, 2003.

 

THE STATE CONTRIBUTION RATES OUTLINED ABOVE, AS RECOMMENDED BY THE GOVERNOR AND APPROVED BY THE SUBCOMMITTEE, ARE DESIGNED TO IMPLEMENT THE PROGRAM’S PLAN TO REBUILD SUFFICIENT CASH RESERVES OVER A FOUR‑YEAR PERIOD.  WITH THESE RATES AND OTHER PROGRAM MODIFICATIONS, THE PROGRAM ANTICIPATES THAT CASH RESERVES WILL BE REBUILT TO $9.7 MILLION AT THE END OF FISCAL YEAR 2003-04 AND $15.4 MILLION AT THE END OF FISCAL YEAR 2004-05.  SINCE THE INCURRED BUT NOT REPORTED CLAIMS LIABILITY REPRESENTS CLAIMS FOR WHICH SERVICES HAVE BEEN PERFORMED, BUT EITHER THE BILLING HAS NOT BEEN SUBMITTED OR THE PAYMENT HAS NOT BEEN MADE, THE AMOUNT OF THAT LIABILITY GENERALLY CONTINUES THROUGHOUT TIME, WITH SOME INCREASE RELATED TO MEDICAL TRENDS.  IT IS ANTICIPATED THAT THIS LIABILITY WILL INCREASE TO A LEVEL ABOVE THE $24.9 MILLION AT THE END OF EACH OF THE NEXT TWO FISCAL YEARS, SO THE FUND WILL CONTINUE TO OPERATE WITH A DEFICIT FUND BALANCE.

 

FOR THE PUBLIC EMPLOYEES’ BENEFITS PROGRAM, THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE STATE CONTRIBUTION RATES FOR ACTIVE EMPLOYEES AS RECOMMENDED BY THE GOVERNOR.  THE SUBCOMMITTEE RECOMMENDS APPROVAL OF THE BUDGET ASSUBMITTED BY THE GOVERNOR, WITH THE EXCEPTION OF THE OVERTIME INCLUDED IN DECISION UNIT E-275, AND RECOMMENDS APPROVAL OF THE TECHNICAL ADJUSTMENTS RECOMMENDED BY STAFF.

 

THE RETIRED EMPLOYEES' GROUP INSURANCE ACCOUNT IS FUNDED THROUGH A PAYROLL ASSESSMENT CHARGED AS A PERCENTAGE OF GROSS SALARIES FOR ALL APPROVED POSITIONS.  THE ASSESSMENT RATE FOR THE CURRENT YEAR IS 1.7 PERCENT.  THE GOVERNOR’S RECOMMENDED BUDGET INCLUDES RETIRED EMPLOYEES’ GROUP INSURANCE ASSESSMENT RATES OF 1.49 PERCENT FOR FISCAL YEAR 2003‑04 AND 1.66 PERCENT FOR FISCAL YEAR 2004-05.

 

THE GOVERNOR RECOMMENDED BASE RETIREE SUBSIDY AMOUNTS OF $280.78 FOR FISCAL YEAR 2003-04 AND $316.26 FOR FISCAL YEAR 2004-05.  THESE RECOMMENDED AMOUNTS PROVIDE THE SAME PERCENTAGE INCREASES AS ARE RECOMMENDED FOR ACTIVE EMPLOYEES (6.4 PERCENT AND 12.6 PERCENT).  DURING THE BUDGET HEARINGS, THE SUBCOMMITTEE BECAME AWARE THAT THE RECOMMENDED ASSESSMENT RATES FELL SHORT OF THE AMOUNT NECESSARY TO FUND THE GOVERNOR’S RECOMMENDED RETIREE SUBSIDY AMOUNTS BY APPROXIMATELY $2.6 TO $2.7 MILLION EACH YEAR OF THE 2003-05 BIENNIUM.  THE SUBCOMMITTEE CONSIDERED THREE OPTIONS:

1.                  INCREASE THE ASSESSMENT RATES TO 1.72 PERCENT FOR FISCAL YEAR 2003-04 AND TO 1.88 PERCENT FOR FISCAL YEAR 2004-05 IN ORDER TO PROVIDE SUFFICIENT FUNDING FOR THE GOVERNOR’S RECOMMENDED SUBSIDY AMOUNTS (OF THE $2.6 OR $2.7 MILLION INCREASE REQUIRED EACH YEAR, STAFF ESTIMATES THAT APPROXIMATELY 62 PERCENT, OR $1.6 TO $1.7 MILLION, WOULD COME FROM ACCOUNTS FUNDED WITH GENERAL FUND SUPPORT, WITH THE REMAINING PORTION PROVIDED BY OTHER REVENUE SOURCES); OR

2.                  APPROVE THE GOVERNOR’S RECOMMENDED SUBSIDY AMOUNTS WITHOUT ANY INCREASE IN FUNDING IN THE ACCOUNT, THEREBY CREATING A SHORTFALL OF $5.3 MILLION IN THE ACCOUNT OVER THE UPCOMING BIENNIUM; OR

3.         REDUCE THE SUBSIDY AMOUNT TO REMAIN WITHIN THE RESOURCES RECOMMENDED IN THE EXECUTIVE BUDGET.

 

WHEN THE JOINT SUBCOMMITTEE CONSIDERED THIS ACCOUNT FOR CLOSING ACTION, THE SENATE SIDE OF THE SUBCOMMITTEE APPROVED OPTION THREE TO KEEP THE TOTAL COST OF THE SUBSIDIES WITHIN THE AMOUNTS PROVIDED BY THE GOVERNOR’S RECOMMENDED ASSESSMENT RATES, THUS REDUCING THE AMOUNT OF SUBSIDY PROVIDED FOR THE RETIREES.  THE ASSEMBLY SIDE OF THE SUBCOMMITTEE DID NOT CONCUR WITH THIS RECOMMENDATION, AND THEREFORE DID NOT MAKE ANY CLOSING RECOMMENDATIONS ON THE ACCOUNT.

 

ON MAY 5, THE RECOMMENDATIONS OF THE SENATE SUBCOMMITTEE WERE PRESENTED TO THE SENATE COMMITTEE ON FINANCE.  THE FULL COMMITTEE DID NOT CONCUR WITH THE RECOMMENDATION OF THE SENATE SUBCOMMITTEE.  INSTEAD, THE SENATE COMMITTEE ON FINANCE CLOSED THE ACCOUNT WITH THE APPROVAL OF OPTION ONE.  UNDER THAT OPTION, THE ASSESSMENT RATES WILL BE ADJUSTED SUFFICIENTLY EACH YEAR OF THE UPCOMING BIENNIUM TO PROVIDE RESOURCES FOR THE RETIREE SUBSIDY AS RECOMMENDED BY THE GOVERNOR.

 

THE GENERAL GOVERNMENT SUBCOMMITTEE HAS NOT MET ON THIS ISSUE SINCE THAT TIME, SO THE RETIRED EMPLOYEES' GROUP INSURANCE ACCOUNT IS PRESENTED HERE TODAY FOR YOUR CONSIDERATION AND ACTION.

 

Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, LCB, informed the Committee that there were two decisions that should be made concerning the PEBP account.  He pointed out that the budget was closed a number of weeks ago and since that time, the Committee had passed A.B. 286, which would commingle both state and non-state participants in the plan.  Mr. Stevens indicated that aspect should be discussed, with a decision forthcoming from the Committee.  If the bill were ultimately approved staff would propose, with the concurrence of the PEBP, that an additional assessment on payroll be imposed to increase the amount for the program.  He advised that it was estimated that commingling the rates would cost approximately $4.5 million per year.  According to Mr. Stevens, in the second year of the biennium, staff recommended increasing the monthly contribution provided on behalf of state employees because commingling would increase the monthly premium required of state employees. 

Mr. Stevens noted that A.B. 286 was currently being considered by the Senate Finance Committee.  Mr. Stevens emphasized that staff would request information regarding the Committee’s decision within the upcoming week, as the following weekend would be utilized to run the budget system and rebalance the entire budget; the Committee’s decision would impact every budget account within the biennial budget.  Mr. Stevens stated staff recommended that a resolution of the item with the Senate be completed by the end of the current week.  He emphasized that if the system were run with only three days remaining in the session there would not be sufficient time to process the Appropriations Bill.

 

Assemblyman Griffin asked whether the commingling issue would affect every other budget account because of the corresponding lack of certainty in the cost for retirees.  Mr. Stevens stated that based on A.B. 286 an additional $4.5 million would be needed in the budget, which could be allocated from the General Fund, however, that would be an additional “hit” on the General Fund.  If every budget was assessed, other sources of revenue, such as federal funds, fee funds, Highway Funds, and non-General Fund dollars, could be utilized to address the additional amount.  Mr. Stevens explained that staff would implement an assessment that would affect every budget, however, revenue would be needed to fund that assessment.  When staff made that assessment, it would add costs without adding revenue to each budget. 

 

Mr. Stevens explained that once the system had been run, staff would determine how much the budget fell out of balance, and would rebalance the budget by determining which revenue sources should pay the assessment.  He emphasized that staff should commence with that project over the upcoming weekend; if no decision were forthcoming regarding the issue by the weekend it would severely hamper the efforts of the Fiscal Analysis Division to draft the Appropriations Bill.

 

Mr. Stevens advised the Committee that a decision would also be necessary regarding the issue of the increase of retired employees’ group insurance assessment by the $5.3 million necessary to finance the subsidy that was recommended in The Executive Budget.

 

Assemblywoman Giunchigliani referenced A.B. 544 which also dealt with the monthly premium.  Mr. Stevens explained that A.B. 544 addressed the monthly group insurance premium based on the recommendation in The Executive Budget, and also set the base amount for retirees.  Mr. Stevens noted that the bill needed to process and, based on A.B. 286, the monthly premium in the second year of the biennium would be increased.  He explained that a payroll assessment would be implemented for the first year of the biennium, which would eliminate the necessity of holding a double open enrollment period. 

 

Ms. Giunchigliani asked for clarification regarding necessary action by staff.  Mr. Stevens stated that in order to process the bills expeditiously, staff would require both the Senate and Assembly money committees’ concurrence regarding the amount of the group insurance premium.  An increase in that premium would impact every budget within The Executive Budget that included a position.  Ms. Giunchigliani understood there were two issues that should be considered by the Committee:  (1) Whether to restore the $5.3 million necessary to finance the subsidy; and (2) Whether the Committee wanted to add approximately $4.5 million into the rates through A.B. 286, or close with an additional $4.5 million appropriation.

 

Mr. Stevens explained that the issue before the Committee was to decide how to address the appropriation, however, the larger issue for staff was that if A.B. 286 were passed, it would add approximately $4.5 million per year into the PEBP budget.  The Senate had not closed the budget with that amount included and, therefore, there was a difference in budget closures that had to be reconciled before staff could run the budget system and determine how much additional money would be necessary.  Ms. Giunchigliani noted that the bill had just passed to the Senate, which appeared to be part of the problem.  Mr. Stevens explained that the Senate could choose to also adopt A.B. 286, and after that decision was made, staff could run the system; he emphasized that reconciliation of those two items had to be accomplished as soon as possible.

 

Assemblywoman Giunchigliani asked whether a motion was needed that would accept the closing report regarding the Public Employees’ Benefits Program, with an additional $5.3 million necessary to fund the subsidy.  Mr. Stevens replied that the $5.3 million would be approved if that was the option chosen by the Committee.  The Subcommittee report was mainly based on the Governor’s recommendation and did not include the provisions of A.B. 286.  Ms. Giunchigliani stated she would attempt to separate the Committee’s action into separate motions, and asked whether the Senate had agreed with the $5.3 million allocation; Mr. Stevens replied in the affirmative.

 

Assemblywoman Chowning advised that the Committee should clearly understand that the Senate had voted not to allocate the $5.3 million from the General Fund, but rather had chosen option one, which would increase the assessment rates.  Mr. Stevens indicated that would also be the recommendation from staff, as it would utilize non-General Fund sources and thereby reduce the impact on the General Fund.  Ms. Giunchigliani asked what effect that option would have on state retirees.  Mr. Stevens explained that if the assessment rate were increased, the subsidy rate built into The Executive Budget for retirees could be financed; if the Committee did not add the amount, the subsidy that was built into The Executive Budget for retirees would have to be reduced, as there would not be sufficient funding to finance it.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO APPROVE THE CLOSING REPORT FOR THE PUBLIC EMPLOYEES’ BENEFITS PROGRAM INCLUDING OPTION ONE: INCREASE THE ASSESSMENT RATES TO 1.72 PERCENT FOR FISCAL YEAR 2003‑04 AND TO 1.88 PERCENT FOR FISCAL YEAR 2004-05 IN ORDER TO PROVIDE SUFFICIENT FUNDING FOR THE GOVERNOR’S RECOMMENDED SUBSIDY AMOUNTS OF THE $2.6 OR $2.7 MILLION INCREASE REQUIRED EACH YEAR.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblywoman Gibbons was not present for the vote.)

 

Chairman Arberry asked Ms. Giunchigliani whether she wanted to proceed with a second motion.  Mr. Stevens advised that if the Committee chose to implement A.B. 286 as passed, which would commingle state and non-state participants, PEBP staff and fiscal staff would recommend that a separate payroll assessment be implemented for one year only, which would address the $4.5 million shortfall in the first year of the biennium and avoid a double enrollment period.  Mr. Stevens explained that in the second year of the biennium the monthly premium that was paid on behalf of state employees could be increased because when non-state retirees were commingled that amount would increase, and at that point an open enrollment would be held and the premium increased.

 

Assemblyman Griffin asked whether the policy solution had been resolved, as there appeared to be different options available.  He noted that the Committee would be appropriating money prior to knowing what the long‑term solution would be.  Mr. Griffin stated that he would oppose such a motion on that basis; he believed that at some point in time, action would be necessary, but he was nervous about spending money for benefits without a long-term plan in place.

 

Mr. Stevens informed the Committee that he believed the Senate had closed the budget as recommended by the Governor, however, he advised that Mr. Atkinson could provide additional information.

 

Bob Atkinson, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the issue of commingling had not been discussed by the Senate to date, as that was a provision of A.B. 286.  The $4.5 million would be the mechanism to fund the amount of the premium, and would not change the budget account for the Public Employees’ Benefits Program (PEBP) as far as the amount of revenue requested.  Mr. Atkinson noted that the same number of participants would be enrolled in the program, whether they were retirees or active employees, and the cost would be the same, therefore, the amount of the premium to be received would remain the same based on the number of participants.  According to Mr. Atkinson, it would simply be a matter of whether the employer paid the subsidy portion, whether the state paid the subsidy portion, or whether the employee paid the subsidy portion.  He further explained that A.B. 286 provided that through an assessment in the first year of the biennium and through the contribution rates in the second year of the biennium, the state would make up the $4.5 million that would not be paid by non-state participants because their rates would be reduced.   

 

Speaker Perkins stated he was not sure there would be a point where non-state retirees could be added to the pool, however, it was certainly something to explore.  A motion to close including appropriation of the $4.5 million would have the Assembly closing differently from the Senate, and would provide options when reconciliation became necessary.  Speaker Perkins opined that such a motion would keep the issue open for discussion and would allow for further exploration of options.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO APPROPRIATE THE NECESSARY FUNDS TO IMPLEMENT A.B. 286. 

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED WITH ASSEMBLYMEN ANDONOV, BEERS, GRIFFIN, HETTRICK, AND MARVEL VOTING NO.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

Assemblywoman Chowning, Chairwoman, Assembly Ways and Means/Senate Finance Joint Subcommittee on General Government, read from the closing report regarding the Department of Information Technology (DoIT):

 

VOLUME I – DOIT 1 - 46 

THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT HAS COMPLETED ITS REVIEW OF THE BUDGETS FOR THE DEPARTMENT OF INFORMATION TECHNOLOGY (DOIT).  THE SUBCOMMITTEE’S CLOSING ACTIONS RESULTED IN AN OVERALL REDUCTION IN DOIT EXPENDITURES OF  $1,865,236 IN FY 2003‑04 AND $2,391,781 IN FY 2004-05.  BASED ON INFORMATION PROVIDED BY THE DEPARTMENT INDICATING THAT APPROXIMATELY 50 PERCENT OF THE REVENUE RECEIVED FROM STATE AGENCIES FOR DOIT SERVICES IS GENERAL FUND, THIS WOULD TRANSLATE INTO AN ESTIMATED GENERAL FUND SAVING OF APPROXIMATELY $2.1 MILLION OVER THE BIENNIUM, WHEN COMPARED TO THE GOVERNOR’S RECOMMENDED BUDGET.

 

DOIT DIRECTOR’S OFFICE (BA 721- 1373) DOIT-1

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO CREATE TWO NEW ASSESSMENTS FOR STATE AGENCIES THAT ACCESS DOIT SERVICES.  THE SUBCOMMITTEE APPROVED THE CREATION OF A NEW COMMON ENTERPRISE ACCESS ASSESSMENT THAT WOULD ALLOCATE THE DEPARTMENT’S COST ASSOCIATED WITH PROVIDING AND MAINTAINING THE STATE’S INTERNET PORTAL AND DATA COMMUNICATIONS BACKBONE INFRASTRUCTURE FOR ALL STATE AGENCIES THAT ARE UNDER THE OVERSIGHT AUTHORITY OF THE STATE CIO AS DEFINED BY THE GOVERNOR.  THE SUBCOMMITTEE ALSO APPROVED THE CREATION OF A NEW INFORMATION TECHNOLOGY SECURITY ASSESSMENT THAT WILL ALLOCATE THE COST OF THE DEPARTMENT’S STATEWIDE INFORMATION TECHNOLOGY SECURITY PLANNING AND DISASTER PREPAREDNESS ACTIVITIES TO ALL STATE AGENCIES THAT FALL UNDER THE PURVIEW OF THE DEPARTMENT’S OVERSIGHT AUTHORITY AS ESTABLISHED BY STATUTE.  THE SUBCOMMITTEE DID NOT APPROVE THE GOVERNOR’S RECOMMENDATION TO ESTABLISH A CHIEF INFORMATION OFFICER (CIO) COST ASSESSMENT, BASED ON INSUFFICIENT IDENTIFICATION OF AUTHORITY AND FUNCTIONAL RESPONSIBILITIES FOR THE CIO TO JUSTIFY THE ALLOCATION OF COSTS FOR THAT FUNCTION AS RECOMMENDED BY THE GOVERNOR.

 

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO ESTABLISH AN INFORMATION TECHNOLOGY SECURITY UNIT WITHIN THE DEPARTMENT OF INFORMATION TECHNOLOGY, WITH THE FOLLOWING MODIFICATIONS.  THE SUBCOMMITTEE APPROVED FUNDING FOR TWO NEW INFORMATION TECHNOLOGY SECURITY POSITIONS AND THE TRANSFER FROM THE PLANNING AND RESEARCH DIVISION OF AN INFORMATION TECHNOLOGY SECURITY MANAGER POSITION AS THE START-UP OF THE DEPARTMENT IT SECURITY UNIT.  THE SUBCOMMITTEE DID NOT APPROVE RECOMMENDED FUNDING OF $200,000 TO CONDUCT A SECURITY ASSESSMENT STUDY.  THE SUBCOMMITTEE'S ACTIONS WERE INTENDED TO PROVIDE THE DEPARTMENT WITH SUFFICIENT RESOURCES TO DEVELOP A BETTER UNDERSTANDING OF THE STATE’S INFORMATION TECHNOLOGY SECURITY NEEDS AND TO IDENTIFY THE STATE’S SPECIFIC IT SECURITY RISKS AND VULNERABILITIES.

 

THE SUBCOMMITTEE DID NOT CONCUR WITH THE GOVERNOR’S RECOMMENDATION TO CONTINUE FUNDING FOR THE DEPARTMENT’S SOFTWARE EXECUTIVE POSITION, BASED ON INSUFFICIENT DEMAND FOR SERVICES TO SUPPORT CONTINUING THE POSITION.  THE SUBCOMMITTEE SUPPORTED THE UPGRADE OF TWO POSITIONS AND THE TRANSFER OF A COMPUTER SYSTEM TECHNICIAN FROM THE APPLICATIONS DESIGN AND DEVELOPMENT DIVISION TO ASSIST IN THE OPERATION OF THE DEPARTMENT’S CONTRACT ADMINISTRATION UNIT.  THE SUBCOMMITTEE DID NOT CONCUR WITH THE RECOMMENDATION TO TRANSFER THE CHIEF OF PLANNING FROM THE PLANNING AND RESEARCH DIVISION TO THE DIRECTOR’S OFFICE.  THE SUBCOMMITTEE BELIEVED THAT THE FUNCTIONAL RESPONSIBILITIES AND DUTIES OF THE CHIEF OF PLANNING WOULD BE MORE APPROPRIATELY COST ALLOCATED FROM THE PLANNING AND RESEARCH BUDGET ACCOUNT.

 

IN ITS REVIEW OF THE BUDGETS FOR THE DEPARTMENT OF INFORMATION TECHNOLOGY, THE SUBCOMMITTEE IDENTIFIED SEVERAL BUDGET ACCOUNTS THAT GENERATED EXCESS LEVELS OF RESERVES.  THE SUBCOMMITTEE RECOMMENDED THAT DOIT ADHERE TO THE FEDERAL COST ACCOUNTING STANDARD FOR BUDGETED RESERVES REPRESENTING 60 DAYS OF OPERATING EXPENSES.  THE SUBCOMMITTEE AUTHORIZED STAFF TO THE MAKE NECESSARY TECHNICAL ADJUSTMENTS UPON CLOSING OF THE DEPARTMENT’S BUDGETS TO ADJUST RESERVES TO EQUAL 60 DAYS OF OPERATING EXPENSES.   

 

PLANNING AND RESEARCH DIVISION (BA 721- 1370) DOIT- 7

THE SUBCOMMITTEE DID NOT APPROVE AN INCREASE IN FUNDING OF $22,330 IN EACH YEAR OF THE BIENNIUM FOR ADDITIONAL TRAINING, TRAVEL AND OPERATING EXPENSE AS RECOMMENDED BY THE GOVERNOR.  THE SUBCOMMITTEE DID NOT APPROVE THE GOVERNOR’S RECOMMENDATION TO TRANSFER THE DEPARTMENT’S PROJECT MANAGEMENT FUNCTIONS TO THE APPLICATIONS DESIGN AND DEVELOPMENT DIVISION.  BASED ON TESTIMONY AND SUPPORTING DOCUMENTATION PROVIDED BY THE DEPARTMENT, THE SUBCOMMITTEE BELIEVED THAT THE DEPARTMENT’S GOAL OF MAXIMIZING PERSONNEL RESOURCES AND SKILLS COULD BE MORE EFFECTIVELY ACHIEVED BY RETAINING THE PROJECT MANAGEMENT FUNCTION WITHIN THE RESEARCH AND PLANNING DIVISION.

 

APPLICATIONS DESIGN AND DEVELOPMENT (BA 721- 1365) DOIT- 12

THE SUBCOMMITTEE CONCURRED WITH THE RECOMMENDATION TO RESTORE FIVE NOMADS PROGRAMMING POSITIONS THAT WERE ELIMINATED IN THE BASE BUDGET IN ORDER TO MAINTAIN A POSITIVE RESERVE.  DECLINING DEMAND FOR PROGRAMMING SERVICES FROM STATE AGENCIES CREATED A SIGNIFICANT REVENUE SHORTFALL PROBLEM FOR THIS BUDGET ACCOUNT, WHICH REQUIRED THE GOVERNOR TO MAKE SIGNIFICANT REDUCTIONS TO THE APPLICATION DESIGN AND DEVELOPMENT BUDGET.  THE WELFARE DIVISION HAS IDENTIFIED SUFFICIENT PROGRAMMING TASKS TO JUSTIFY THE RETURN OF FIVE NOMADS PROGRAMMERS.

 

THE SUBCOMMITTEE ALSO APPROVED THE GOVERNOR’S RECOMMENDATION TO TRANSFER THE DEPARTMENT’S DATABASE ADMINISTRATION AND WEB DEVELOPMENT FUNCTIONS TO THE APPLICATIONS DESIGN AND DEVELOPMENT BUDGET ACCOUNT, WITH MODIFICATIONS.  THIS ACTION WAS RECOMMENDED BY THE GOVERNOR TO MAXIMIZE THE CROSS-UTILIZATION OF STAFF AND SKILL SETS AND TO IMPROVE SERVICE.  THE SUBCOMMITTEE APPROVED THE TRANSFER OF A WEB DEVELOPER TO THE APPLICATIONS DESIGN AND DEVELOPMENT BUDGET ACCOUNT AND THE CHANGE IN COST RECOVERY FOR THE POSITION FROM DIRECT BILL TO A COST ALLOCATION.  THE SUBCOMMITTEE RECOMMENDED THAT A SECOND WEB DEVELOPER REMAIN IN THE COMPUTING DIVISION BUDGET IN SUPPORT OF THE DEPARTMENT’S WEB HOSTING SERVICES TO BE FINANCED FROM DIRECT BILLINGS FOR THAT SERVICE.  THE SUBCOMMITTEE DID NOT SUPPORT THE CONTINUATION OF THE THIRD WEB DEVELOPER POSITION RECOMMENDED BY THE GOVERNOR, BASED ON INSUFFICIENT DEMAND FOR THAT SERVICE.

 

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO ADD A PROJECT MANAGER TO SUPPORT DEVELOPMENT AND IMPLEMENTATION OF THE HEALTH DIVISION’S ENVIRONMENTAL PUBLIC HEALTH TRACKING SYSTEM.  THE SUBCOMMITTEE RECOMMENDED THE POSITION BE TRANSFERRED TO THE PLANNING AND RESEARCH DIVISION.  THE SUBCOMMITTEE ALSO RECOMMENDS THE TRANSFER OF TWO UNIX SUPPORT POSITIONS TO THE COMPUTING DIVISION BUDGET TO SUPPORT THE DEPARTMENT’S EXPANDING UNIX SERVER SUPPORT FUNCTIONS.

 

COMPUTING DIVISION (BA 721- 1385) DOIT- 19

THE SUBCOMMITTEE APPROVED FUNDING TO UPGRADE THE STATE’S R-35 MAINFRAME COMPUTER.  THE DEPARTMENT HAD PROPOSED TWO PRIMARY OPTIONS FOR THE MAINFRAME UPGRADE, WHICH INCLUDED THE GOVERNOR’S RECOMMENDATION TO PURCHASE A NEW GENERATION MAINFRAME (IBM Z-900) AT A TOTAL PURCHASE COST OF $6.34 MILLION, AND AN UPGRADE OF THE CURRENT MAINFRAME ARCHITECTURE TO A NEWER GENERATION CHIP AT A PROJECTED PURCHASE COST OF $5.29 MILLION.  BASED ON THE INFORMATION PROVIDED BY THE DEPARTMENT, THE SUBCOMMITTEE FELT THE MOST COST-EFFECTIVE ALTERNATIVE WAS OPTION 2, OR THE UPGRADE OF THE CURRENT MAINFRAME TO A NEWER GENERATION R-36 CHIP AND ASSOCIATED SOFTWARE UPGRADES.  THIS OPTION WILL RESULT IN A COST SAVINGS TO THE STATE OF APPROXIMATELY $1.1 WHEN COMPARED TO THE PURCHASE AND MAINTENANCE COSTS ASSOCIATED WITH THE PURCHASE OF THE Z-900.  THE SUBCOMMITTEE APPROVED ADDITIONAL FUNDING OF $813,197 IN FY 2003-04 AND $854,197 IN FY 2004-05 TO PURCHASE ADDITIONAL DATA STORAGE CAPACITY AND MAINTENANCE FOR THE STATE’S MAINFRAME OPERATIONS, AND $722,787 OVER THE BIENNIUM TO UPGRADE THE DEPARTMENT’S WEB SERVICES HARDWARE AND SOFTWARE INFRASTRUCTURE.  THE SUBCOMMITTEE ALSO APPROVED FUNDING FOR THE EXPANSION AND RENOVATION OF THE COMPUTER FACILITY, CIP PROJECT 2003 C-10, AND SECURITY UPGRADES TO DOIT FACILITIES.  IN TOTAL, THESE PROJECTS ARE ESTIMATED TO COST APPROXIMATELY $5.3 MILLION.

 

THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO RECLASSIFY SIX COMPUTER FACILITY SUPPORT POSITIONS, BUT BASED ON THE DOCUMENTATION PROVIDED BY THE DEPARTMENT, DID NOT CONCUR ON THE RECLASSIFICATION OF FOUR OTHER POSITIONS.   

 

DATA COMMUNICATIONS DIVISION (BA 721- 1386) DOIT- 28

OVERALL, THE SUBCOMMITTEE APPROVED FUNDING OF APPROXIMATELY $1.6 MILLION OVER THE BIENNIUM TO SUPPORT UPGRADES AND PROVIDE MAINTENANCE FOR THE STATE’S SILVERNET DATA COMMUNICATIONS INFRASTRUCTURE AND PHONE SYSTEMS AS RECOMMENDED BY THE GOVERNOR, WITH TECHNICAL ADJUSTMENTS MADE BY STAFF.  THE SUBCOMMITTEE ALSO APPROVED FUNDING TO RECLASSIFY FOUR POSITIONS THAT HAVE BEEN REASSIGNED TO SUPPORT ADDITIONAL FUNCTIONS WITHIN THE COMPUTER FACILITY. 

 

TELECOMMUNICATIONS DIVISION (BA 721- 1387) DOIT- 35

THE SUBCOMMITTEE APPROVED THE TELECOMMUNICATIONS BUDGET AS RECOMMENDED BY THE GOVERNOR, WITH TECHNICAL ADJUSTMENTS AS RECOMMENDED BY STAFF.  IN ADDITION, THE SUBCOMMITTEE RECOMMENDS FUNDING OF $826,000 OVER THE BIENNIUM FOR INCREASES IN WATTS CHARGES AND SERVICES AND THE RECLASSIFICATION OF AN ADMINISTRATIVE ASSISTANT II TO AN ADMINISTRATIVE ASSISTANT IV, AND $595,653 OVER THE BIENNIUM TO UPGRADE THE DEPARTMENT’S CALL MANAGEMENT SYSTEM AND CALL ACCOUNTING SYSTEMS.

 

MOBILE COMMUNICATIONS DIVISION (BA 721- 1388) DOIT- 41

THE SUBCOMMITTEE APPROVED THE MOBILE COMMUNICATIONS BUDGET ACCOUNT WITH TECHNICAL ADJUSTMENTS, INCLUDING FUNDING FOR THE RENOVATION OF THE STATE’S MICROWAVE MOUNTAINTOP SITES AND THE RECLASSIFICATION OF A COMMUNICATIONS SYSTEM SUPERVISOR TO A COMMUNICATIONS SYSTEM MANAGER II.

 

THIS CONCLUDES THE SUBCOMMITTEE ON GENERAL GOVERNMENT’S CLOSING REPORT FOR THE DEPARTMENT OF INFORMATION TECHNOLOGY.  IN CLOSING, I WOULD LIKE TO THANK THE MEMBERS AND STAFF OF THE JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT FOR THEIR HARD WORK AND DEDICATION IN FORMULATING THESE RECOMMENDATIONS.

SUBCOMMITTEE CLOSING ACTIONS

SUMMARY OF FUNDING IMPACT

 

 

NOTE: THE DEPARTMENT ESTIMATES THAT APPROXIMATELY 50 PERCENT OF THE REVENUES RECEIVED BY STATE AGENCIES FOR DoIT SERVICES ARE GENERAL FUND.  AT 50 PERCENT, THIS WOULD EQUATE TO APPROXIMATELY $2.1 MILLION IN GENERAL FUND SAVINGS TO STATE AGENCY BUDGETS OVER THE BIENNIUM.

 

 

Chairman Arberry indicated that he would accept a motion regarding the DoIT budget accounts.

 

ASSEMBLYWOMAN McCLAIN MOVED TO APPROVE THE CLOSING REPORT FOR THE BUDGET ACCOUNTS WITHIN THE DEPARTMENT OF INFORMATION TECHNOLOGY.

 

ASSEMBLYMAN BEERS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGETS CLOSED.

 

********

 

Assemblywoman Leslie, Chairwoman, Ways and Means/Senate Finance Joint Subcommittee on Human Resources, read from the closing report for the Department of Human Resources, Division of Child and Family Services:

 

UNITY/SACWIS (101-3143) PAGE DCFS-20

IN CLOSING THIS BUDGET, THE SUBCOMMITTEE APPROVED TWO NEW POSITIONS RECOMMENDED BY THE GOVERNOR FOR DESIGN AND DEVELOPMENT FUNCTIONS NECESSARY TO MEET REQUIREMENTS OF THE ADOPTION AND SAFE FAMILIES ACT AND TO MEET ADDITIONAL SACWIS REQUIREMENTS.  THE SUBCOMMITTEE DID NOT APPROVE THE RECOMMENDED TRANSFER IN OF TWO EXISTING POSITIONS FROM THE CHILD WELFARE INTEGRATION BUDGET, WHICH WAS CREATED SOLELY TO ACCOUNT FOR THE COSTS OF INTEGRATION. 

CHILD CARE SERVICES (101-3149) PAGE DCFS-25

THE SUBCOMMITTEE APPROVED THIS BUDGET PRIMARILY AS RECOMMENDED BY THE GOVERNOR, WHICH INCLUDES THE TRANSFER OUT OF 12 FTE POSITIONS TO CLARK AND WASHOE COUNTIES FOR CHILD WELFARE INTEGRATION.  ONE NEW POSITION WAS RECOMMENDED IN THE BUDGET AND APPROVED BY THE SUBCOMMITTEE FOR STATE AND FBI FINGERPRINT BACKGROUND CHECKS.

 

YOUTH COMMUNITY SERVICES (101-3229) PAGE DCFS-29

IN THIS BUDGET, THE SUBCOMMITTEE APPROVED AN AMENDMENT SUBMITTED BY THE DIVISION OF CHILD AND FAMILY SERVICES TO CORRECT A $1,154,223 OVERSTATEMENT OF TITLE XX PURCHASE OF SOCIAL SERVICES REVENUE IN EACH YEAR OF THE BIENNIUM.  THE AMENDMENT REQUIRED THE ADDITION OF GENERAL FUND SUPPORT TOTALING $409,573 IN FY 2004 AND $203,548 IN FY 2005 AND THE IMPLEMENTATION OF ENHANCED FMAP RATES.  THE AMENDMENT ALSO REDUCED FUNDING FOR DUPLICATE EMERGENCY SHELTER CARE PLACEMENTS OF $496,800 EACH YEAR.  THE SUBCOMMITTEE ALSO APPROVED THE TRANSFER OUT OF ALL MEDICAID MEDICAL COSTS TO THE MEDICAID BUDGET IN THE DIVISION OF HEALTH CARE, FINANCING AND POLICY TOTALING $21,495,754 IN FY 2004 AND $23,036,067 IN FY 2005.

 

TRANSITION FROM FOSTER CARE (606-3250) PAGE DCFS-37

THE SUBCOMMITTEE APPROVED THIS BUDGET AS RECOMMENDED BY THE GOVERNOR.  THE BUDGET ESTIMATES COLLECTING AND EXPENDING $1,000,000 IN EACH YEAR OF THE BIENNIUM TO ASSIST YOUTH TRANSITIONING OUT OF FOSTER CARE.

 

VICTIMS OF DOMESTIC VIOLENCE (101-3181) PAGE DCFS-41

THE SUBCOMMITTEE MADE NO ADJUSTMENTS IN THIS BUDGET AND APPROVED IT AS RECOMMENDED BY THE GOVERNOR.

 

JUVENILE ACCOUNTABILITY BLOCK GRANT (101-3262) PAGE DCFS-46

THE SUBCOMMITTEE MADE NO ADJUSTMENTS IN THIS BUDGET AND APPROVED IT AS RECOMMENDED BY THE GOVERNOR.  THE BUDGET RECOMMENDS A TRANSFER OF $292,365 IN EACH YEAR OF THE BIENNIUM TO THE SUMMIT VIEW YOUTH CORRECTIONAL CENTER BUDGET TO ASSIST IN FUNDING THE COSTS OF THAT FACILITY.

 

YOUTH ALTERNATIVE PLACEMENTS (101-3147) PAGE DCFS-49

THE SUBCOMMITTEE MADE NO ADJUSTMENTS IN THIS BUDGET AND APPROVED IT AS RECOMMENDED BY THE GOVERNOR.  THE BUDGET RECOMMENDED ADDITIONAL COUNTY PARTICIPATION FEE FUNDING FOR THE CHINA SPRING YOUTH CAMP TOTALING $369,020 IN FY 2004 AND $426,559 IN FY 2005.

JUVENILE CORRECTIONAL FACILITY (101-3148) PAGE DCFS-53

THE GOVERNOR RECOMMENDED AND THE SUBCOMMITTEE APPROVED THE STATE OPERATION OF THE SUMMIT VIEW YOUTH CORRECTIONAL CENTER.  THE SUBCOMMITTEE APPROVED AN AMENDMENT TO THE BUDGET REFLECTING A REVISED START UP DATE OF JULY 2003, WITH THE OPENING OF 24 BEDS SCHEDULED FOR NOVEMBER 2003.  THE RAMP UP SCHEDULE PROPOSES TO GO TO 48 BEDS IN JANUARY 2004, 72 BEDS IN MAY 2004, WITH FULL OPERATION OF THE FACILITY PLANNED IN AUGUST 2004.  A TOTAL OF 85 NEW POSITIONS WERE APPROVED IN THE BUDGET. 

 

THE SUBCOMMITTEE ALSO APPROVED AN AMENDMENT WHICH ADDED CONTRACT PSYCHIATRIC CONSULTATIONS, MEDICATIONS FOR YOUTH AND ENHANCED TRAINING FOR STAFF.  THE AMENDMENT ALSO ADDED A NEW CORRECTIONAL NURSE POSITION AND REQUESTED THE RECLASSIFICATION OF A LICENSED PRACTICAL NURSE TO A CORRECTIONAL NURSE.  THE TOTAL ADDITIONAL GENERAL FUND SUPPORT APPROVED BY THE SUBCOMMITTEE FOR THESE ITEMS WAS APPROXIMATELY $170,000 IN EACH YEAR OF THE BIENNIUM.

 

CALIENTE YOUTH CENTER (101-3179) PAGE DCFS-58

THE SUBCOMMITTEE APPROVED 19 NEW POSITIONS AS RECOMMENDED IN THE BUDGET IN RESPONSE TO RECOMMENDATIONS MADE BY THE U.S. DEPARTMENT OF JUSTICE.  THE DEPARTMENT OF JUSTICE CONDUCTED A CIVIL RIGHTS FOR INSTITUTIONALIZED PERSONS ACT (CRIPA) INVESTIGATION AT THE NEVADA YOUTH TRAINING CENTER (NYTC) IN FEBRUARY 2002 AND ISSUED FINDINGS AND RECOMMENDATIONS LEADING TO THE NEED FOR ADDITIONAL STAFF.  NEW POSITIONS WERE ALSO RECOMMENDED IN THIS BUDGET AS IT IS STAFFED WITH A SIMILAR RATIO AS NYTC.    

 

THE SUBCOMMITTEE ALSO APPROVED AN AMENDMENT FROM THE BUDGET DIVISION TO ADDRESS THE MENTAL HEALTH NEEDS OF YOUTH IN RESIDENCE.  THE AMENDMENT ADDED ONE NEW CORRECTIONAL NURSE, CONTRACT PSYCHIATRIC SERVICES, MEDICATION COSTS FOR YOUTH AND ENHANCED TRAINING FOR STAFF.  THE GENERAL FUND SUPPORT ADDED BY THE SUBCOMMITTEE TOTALED $179,575 IN FY 2004 AND $196,165 IN FY 2005.  THE SUBCOMMITTEE ALSO APPROVED A NEW ASSISTANT SUPERINTENDENT POSITION RECOMMENDED IN THE BUDGET.

 

NEVADA YOUTH TRAINING CENTER (101-3259) PAGE DCFS-63

SIMILAR TO THE CALIENTE YOUTH CENTER, THE BUDGET RECOMMENDED AND THE SUBCOMMITTEE APPROVED 23 NEW POSITIONS BASED ON THE CRIPA INVESTIGATION TO ENHANCE THE DIRECT CARE STAFF RATIO AND MEDICAL CARE.  THE BUDGET DIVISION ALSO SUBMITTED AN AMENDMENT TO THIS BUDGET TO IMPROVE MENTAL HEALTH CARE FOR YOUTH.  THE SUBCOMMITTEE APPROVED THE AMENDMENT, WHICH ADDS A NEW CORRECTIONAL NURSE, CONTRACT PSYCHIATRIC SERVICES, MEDICATIONS AND ENHANCED TRAINING FOR STAFF.  THE TOTAL GENERAL FUND SUPPORT ADDED BY THE SUBCOMMITTEE IS $214,313 IN FY 2004 AND $230,903 IN FY 2005.  THE SUBCOMMITTEE ALSO ADDED $22,639 FOR A NEW VAN TO ASSIST IN TRANSPORTING YOUTH.

 

YOUTH PAROLE SERVICES (101-3263) PAGE DCFS-68

THE SUBCOMMITTEE APPROVED THIS BUDGET SUBSTANTIALLY AS RECOMMENDED BY THE GOVERNOR, WHICH ALSO INCLUDED RECOMMENDATIONS TO ADDRESS THE CRIPA FINDINGS.  THE SUBCOMMITTEE APPROVED AN AMENDMENT WHICH REDUCED CRIPA RELATED COSTS BY $72,000 EACH YEAR AND REDIRECTED RESOURCES TO BOTH THE CALIENTE YOUTH CENTER AND NYTC.  THE BUDGET ORIGINALLY INCLUDED FUNDING FOR THOSE FACILITIES IN THIS ACCOUNT.  TOTAL GENERAL FUND SUPPORT WAS REDUCED TO $41,520 PER YEAR AND WILL PROVIDE FOR PSYCHIATRIC CONSULTATIONS AND MEDICATIONS FOR YOUTH.  THE SUBCOMMITTEE ALSO APPROVED $850,000 EACH YEAR RECOMMENDED IN THE BUDGET FOR THE CONTINUATION OF THE TRANSITIONAL COMMUNITY RE-INTEGRATION PROGRAM WHICH ASSISTS IN RELIEVING OVERCROWDING IN BOTH LOCAL JUVENILE DETENTION FACILITIES AND STATE OPERATED TRAINING CENTERS.

 

NORTHERN NEVADA CHILD AND ADOLESCENT SERVICES (101-3281) PAGE DCFS-72

THE SUBCOMMITTEE APPROVED THIS BUDGET PRIMARILY AS RECOMMENDED BY THE GOVERNOR AND ALSO ELIMINATED A HIPAA PRIVACY OFFICER POSITION.  THREE HIPAA POSITIONS WERE INCLUDED IN THE DCFS BUDGETS FOR HIPAA COMPLIANCE, WITH TWO BEING WITHDRAWN BY THE DEPARTMENT OF HUMAN RESOURCES.  ONE NEW INFORMATION SYSTEMS SPECIALIST WAS APPROVED TO ASSIST IN THE AGENCY’S REPLACEMENT OF ITS AUTOMATED BILLING AND DATA COLLECTION SYSTEM.  THE SUBCOMMITTEE ALSO APPROVED THE TRANSFER OUT OF THE INFANT ENHANCEMENT PROGRAM AND THE HAPPY PROGRAM TO THE HEALTH DIVISION’S SPECIAL CHILDREN’S CLINIC BUDGET.

 

SOUTHERN NEVADA CHILD AND ADOLESCENT SERVICES (101‑3646) PAGE DCFS-79

THE BUDGET RECOMMENDED THE CLOSURE OF TWO IN‑PATIENT PROGRAMS AT THE DESERT WILLOW TREATMENT CENTER.  THE 8-BED CHILDREN’S ACUTE CARE UNIT WAS RECOMMENDED FOR CLOSURE IN JULY 2003, WHILE THE 12‑BED SPECIALIZED ADOLESCENT TREATMENT CENTER WAS SCHEDULED FOR CLOSURE IN JULY 2004.  THE SUBCOMMITTEE DID NOT APPROVE THE RECOMMENDATIONS AND APPROVED FUNDING FOR THE CONTINUATION OF THE PROGRAMS DURING THE NEXT BIENNIUM.  THE GENERAL FUND SUPPORT ADDED BY THE SUBCOMMITTEE FOR THE PROGRAMS TOTALS $1,320,796 OVER THE 2003-05 BIENNIUM.  ALTHOUGH A FORMAL LETTER OF INTENT WAS NOT RECOMMENDED, THE SUBCOMMITTEE DISCUSSED REQUESTING THAT THE AGENCY PROVIDE QUARTERLY REPORTS TO THE INTERIM FINANCE COMMITTEE ON THE STATUS OF THE PROGRAMS DURING THE 2003-05 BIENNIUM.

 

THE SUBCOMMITTEE ALSO APPROVED A NEW INFORMATION SYSTEMS SPECIALIST FOR THE AGENCY’S PLANNED REPLACEMENT OF ITS BILLING AND DATA COLLECTION SYSTEM AND THREE NEW MENTAL HEALTH COUNSELORS FOR PROJECTED GROWTH IN EARLY CHILDHOOD MENTAL HEALTH SERVICES.  THREE NEW POSITIONS WERE ALSO RECOMMENDED IN THE BUDGET AND APPROVED FOR PROJECTED WAITING LIST REDUCTIONS FOR EARLY CHILDHOOD SERVICES.  THE SUBCOMMITTEE ADDED AN ADDITIONAL .51 FTE POSITION FOR EARLY CHILDHOOD BASED ON REVISED WAITING LIST PROJECTIONS.  A TOTAL OF SIX NEW POSITIONS WERE RECOMMENDED IN THE BUDGET FOR THE FIRST STEP PROGRAM FOR PROJECTED CASELOAD GROWTH AND WAITING LISTS.  THE SUBCOMMITTEE ELIMINATED TWO OF THE POSITIONS BASED ON REVISED CASELOADS PROJECTIONS.  THE FIRST STEP PROGRAM WAS ALSO APPROVED FOR TRANSFER TO THE HEALTH DIVISION’S SPECIAL CHILDREN’S CLINIC BUDGET.  THE SUBCOMMITTEE ALSO ELIMINATED ONE HIPAA PRIVACY OFFICER RECOMMENDED IN THE BUDGET.

 

IN SUMMARY, THE SUBCOMMITTEE’S ACTIONS RESULT IN A GENERAL FUND INCREASE OF $709,999 IN FY 2004 AND $1,327,099 IN FY 2005.

 

Assemblywoman Leslie thanked the members of the Joint Subcommittee for their hard work, and thanked the Chairman for giving her the opportunity to Chair the Subcommittee. 

 

Assemblywoman Chowning asked about the proposed closure of the Desert Willow treatment programs.  Ms. Leslie emphasized that the two programs would not be closed.  The Executive Budget had recommended the closure of two programs at the Desert Willow Treatment Center, however, the Subcommittee voted not to recommend that closure.

 

Assemblyman Griffin asked about a reduction in General Fund dollars.  Assemblywoman Leslie pointed out that the Subcommittee did not reduce the allocation for the Division of Child and Family Services (DCFS).  Ms. Leslie explained that Larry Peri, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), deserved a commendation for his hard work on the DCFS budgets.  She noted that the Subcommittee added funding primarily in response to the Civil Rights of Institutionalized Persons Act (CRIPA) recommendations in areas such as mental health, which absolutely had to be addressed; training for staff; and medication costs, which were significant.  Ms. Leslie stated that was why the allocation had been increased over the amount recommended in The Executive Budget.  The recommendation to retain the two programs at the Desert Willows Treatment Center also caused a major increase in funding.  Ms. Leslie explained that the Subcommittee had heard substantial testimony that there was only one other adolescent sex offender program available in Clark County, and that program was full.  She believed it would be irresponsible of the Legislature to close the units at the Desert Willows Treatment Center.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO APPROVE THE CLOSING REPORT REGARDING THE DIVISION OF CHILD AND FAMILY SERVICES, DEPARTMENT OF HUMAN RESOURCES.

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

THE MOTION CARRIED WITH ASSEMBLYMEN BEERS, GRIFFIN, MARVEL, AND HETTRICK VOTING NO.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGETS CLOSED.

 

********

 

Mr. Stevens indicated that since the Committee had heard the Subcommittee report for the Division of Child and Family Services (DCFS), he believed it would be appropriate to discuss and potentially close two accounts that dealt with the issue of child welfare integration, which had not been acted on by the Subcommittee, therefore, were not included in the Subcommittee’s closing report.  Mr. Stevens advised the Committee that action on the two budget accounts was needed before staff closed the budgets.

 

CHILDREN AND FAMILY ADMINISTRATION (101-3145) –

BUDGET PAGE DCFS-1

 

Larry Peri, Senior Program Analyst, Fiscal Analysis Division, LCB, explained that the major issue in the base budget was the proposal to reduce the budget significantly and transfer the positions and associated costs into the Child Welfare Integration budget, BA 3142. 

 

According to Mr. Peri the creation of a standardized appeals system, decision unit E-475, and the pilot program for centralized intake, decision unit E-477, had been approved by the Subcommittee. 

 

Items not approved by the Subcommittee included the transfer of 21 full-time (FTE) positions from the Child Welfare Integration Budget to BA 3145.  Mr. Peri noted that other closing issues included the recommendation for the elimination of a duplicated position and a new Management Analyst IV to serve as a Privacy Officer. 

 

Mr. Peri indicated that the Committee should decide whether the budget should be reduced significantly by positions and associated costs to continue child welfare integration by transferring those costs to the Child Welfare Integration Budget Account, BA 3142.

 

Assemblywoman Leslie advised that it would be her recommendation to the Committee that BA 3145 be closed as recommended by staff.  Much had been accomplished in the child integration movement, and Ms. Leslie believed that the Legislature should fulfill the commitment it made in the 2001 session.  She explained that the integration in Washoe County was almost complete and a commitment had also been made to Clark County and, more importantly, to the children of the state.  Ms. Leslie believed the Legislature should honor its commitment.  During Subcommittee meetings, Senator Raggio had been very vocal in his opposition in terms of future funding, and the Subcommittee had devised a funding plan for the future which would treat the budget the same as every other state agency budget.  Ms. Leslie indicated that she was satisfied with that plan.

 

ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BA 3145 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS, AND TO CONTINUE WITH THE CHILD INTEGRATION MOVEMENT.     

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

Ms. Giunchigliani asked, “If not now, when.”  The Legislature made a commitment, a study was conducted, and integration was the recommendation.  Ms. Giunchigliani noted that integration was in the best interest of the children; Washoe County integration had taken place, and it was time to continue with integration in Clark County.  The budget closure also dealt with the pilot program regarding centralized intake for the rural counties, which Ms. Giunchigliani believed was a good idea that would hopefully save dollars, and would ensure that the rural areas were being served.

 

Assemblywoman Chowning voiced support for integration as well.  She believed it was an embarrassment for Nevada to treat children “part and parcel” and transfer them from one family to another.  Mrs. Chowning pointed out that the state of Florida had actually lost track of some of the children under its care, and she believed Nevada could not afford to take the chance that the same thing might happen here.  The children were already lost emotionally, and Mrs. Chowning believed that the Legislature should support the continued integration of the child welfare system.

 

THE MOTION CARRIED.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

CHILD WELFARE INTEGRATION (101-3142 – BUDGET PAGE DCFS-11

 

Mr. Peri indicated that the budget account was authorized by the passage of A.B. 1 of the Seventeenth Special Session, and was the account where the costs were transferred from the various budgets within the Division of Child and Family Services (DCFS), and directed toward Clark and Washoe Counties for the integration process.

 

According to Mr. Peri, the breakout of the estimated costs in The Executive Budget to provide welfare services in Clark and Washoe Counties, and the recommended costs for the provision of services to severely emotionally disturbed (SED) children in foster care were:

 

·        Clark County:  $30,472,368 in FY2004 and $33,754,541 in FY2005

·        Washoe County:     $11,275,721 in FY2004 and $12,228,747 in FY2005

·        DCFS-SED Costs: $5,991,228 and $6,223,590

·        Total amount recommended by the Governor:  $47,739,393 in FY2004 and $52,206,954 in FY2005

 

Mr. Peri explained that a Budget Division amendment had been approved, as had an amendment by the DCFS, which would seek to increase federal funds in the budget by implementing the most recent Federal Medical Assistance Percentage (FMAP) rates in the base budget and in decision units M-200 and M‑201.  The cumulative effect of the FMAP changes would reduce the General Fund allocation, which would assist in eliminating the $1.1 million shortfall caused by over budgeting of the Title XX Purchase of Social Services revenue.

 

Mr. Peri stated that another closing item for Committee consideration would be the decision units that recommended transferring positions out of the account to others within the DCFS. 

 

ASSEMBLYWOMAN LESLIE MOVED TO CLOSE BA 3142 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblywoman Gibbons was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

Assemblyman Parks, Chairman of the Assembly Ways and Means/Senate Finance Joint Subcommittee on Public Safety, Natural Resources, and Transportation, thanked Mark Krmpotic, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), for his assistance with the Department of Motor Vehicles (DMV) budgets.  Mr. Parks read the closing report for the DMV:

 

THE JOINT SUBCOMMITTEE FOR PUBLIC SAFETY NATURAL RESOURCES AND TRANSPORTATION DEVELOPED RECOMMENDATIONS FOR THE BUDGETS OF THE DEPARTMENT OF MOTOR VEHICLES INCLUDING:  THE DIRECTOR’S OFFICE, ADMINISTRATIVE SERVICES DIVISION, COMPLIANCE ENFORCEMENT DIVISION, CENTRAL SERVICES DIVISION, MANAGEMENT SERVICES DIVISION, MOTOR CARRIER DIVISION, THE VERIFICATION OF INSURANCE PROGRAM, RECORD SEARCH PROGRAM AND DIVISION OF INFORMATION TECHNOLOGY. 

 

22 PERCENT CAP:  PRESENTLY, NRS 408.235 STATES THAT THE DEPARTMENT MAY NOT EXPEND MORE THAN 22 PERCENT OF THE FEES COLLECTED (EXCLUDING GASOLINE TAX) FOR THE HIGHWAY FUND ON ADMINISTRATION.  THE BUDGETS FOR THE DEPARTMENT, AS RECOMMENDED BY THE GOVERNOR, EXCEED THE 22 PERCENT CAP IN EACH YEAR OF THE BIENNIUM.  THE GOVERNOR RECOMMENDS AN INCREASE IN THE CAP FROM 22 PERCENT TO 29 PERCENT.  THE SUBCOMMITTEE DID NOT SUPPORT AN INCREASE IN THE 22 PERCENT CAP AS RECOMMENDED BY THE GOVERNOR.  THE SUBCOMMITTEE HAS APPROVED THE FOLLOWING MEASURES TO MAINTAIN THE DEPARTMENT’S BUDGETS TO WITHIN 22 PERCENT OF FEES AND TAXES COLLECTED FOR THE HIGHWAY FUND:

 

·                    THE TRANSFER OF EXCESS REVENUES OVER EXPENDITURES (HIGHWAY FUND REVERSIONS) FROM THE RECORD SEARCH ACCOUNT TO THE CENTRAL SERVICES AND AUTOMATION ACCOUNTS TOTALING $5.7 MILLION IN FY 2004 AND $6.0 MILLION IN FY 2005 WITH OFFSETTING DECREASES IN HIGHWAY FUND APPROPRIATIONS BY THE SAME AMOUNTS.

 

·                    AN INCREASE IN RECORD SEARCH REVENUE OF APPROXIMATELY $2.7 MILLION IN EACH YEAR REPRESENTING A $2 INCREASE IN THE RECORD SEARCH FEES FROM $5 TO $7.  THE SUBCOMMITTEE APPROVED THE TRANSFER OF THE $2.7 MILLION IN INCREASED REVENUE TO THE CENTRAL SERVICES AND AUTOMATION ACCOUNTS WITH OFFSETTING DECREASES IN HIGHWAY FUND APPROPRIATIONS BY THE SAME AMOUNT.

·                    THE ELIMINATION OF 11 POSITIONS FROM THE FIELD SERVICES ACCOUNT RECOMMENDED TO SUPPORT SATURDAY SERVICES AT THE CARSON CITY OFFICE. 

 

BASED ON SUBCOMMITTEE AND COMMITTEE ACTIONS TAKEN TO APPROVE THE HIGHWAY FUNDED ACCOUNTS FOR THE DEPARTMENT, THE DEPARTMENT EXCEEDS THE 22 PERCENT CAP BY $216,750 IN FY 2004 AND $2.6 MILLION IN FY 2005.  THE GOVERNOR PREVIOUSLY PROPOSED A FEE OF $8.25 ON EACH DEALER REPORT OF SALE FOR NEW AND THIRD PARTY AUTOMOBILE SALES, WHICH WOULD GENERATE APPROXIMATELY $2.4 MILLION IN FY 2004 AND $3.2 MILLION IN FY 2005.  IF CONSIDERED AS A MEASURE TO MAINTAIN THE DEPARTMENT’S BUDGETS UNDER THE 22 PERCENT CAP, STAFF WOULD RECOMMEND THE INCLUSION OF INCREASED REVENUE IN THE ADMINISTRATIVE SERVICES ACCOUNT, WITH OFFSETTING REDUCTIONS IN HIGHWAY FUND APPROPRIATIONS.

 

DMV, DIRECTOR’S OFFICE (B/A 201-4744) DMV-1:  THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION TO EXPEND $100,000 IN EACH YEAR OF THE BIENNIUM TO PROVIDE FOR A CONTINUOUS PUBLIC AWARENESS CAMPAIGN TO INCREASE USE OF ALTERNATIVE TECHNOLOGIES (INTERNET, INTERACTIVE VOICE RESPONSE AND EMISSION STATIONS) BY CITIZENS REQUIRING A VEHICLE REGISTRATION OR DRIVER’S LICENSE RENEWAL. 

 

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO TRANSFER THE PERSONNEL UNIT FROM THE ADMINISTRATIVE SERVICES BUDGET ACCOUNT TO THE DIRECTOR’S OFFICE CONSISTENT WITH AN ORGANIZATIONAL CHANGE IMPLEMENTED BY THE DEPARTMENT.

 

DMV ADMINISTRATIVE SERVICES (B/A 201-4745) DMV-9:  THE SUBCOMMITTEE AUTHORIZED STAFF MAKE ADJUSTMENTS TO THE FIVE ACCOUNTING ASSISTANT POSITIONS RECOMMENDED IN MAJOR METROPOLITAN FIELD OFFICES BASED UPON ACTIONS TAKEN WITH RESPECT TO THE ADDITION OF NEW TECHNICIAN POSITIONS TO THE FIELD SERVICES ACCOUNT TO INCREASE WINDOW COVERAGE.    

 

THE SUBCOMMITTEE DID NOT CONCUR WITH THE GOVERNOR’S RECOMMENDATION TO ADD A CHIEF ACCOUNTANT POSITION BUT APPROVED THE RECLASSIFICATION OF AN ADMINISTRATIVE SERVICES OFFICER II POSITION TO A CHIEF ACCOUNTANT TO PROVIDE THE DEPARTMENT WITH THE NECESSARY ACCOUNTING EXPERTISE. 

 

THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO ADD A PERSONNEL ANALYST POSITION AND TO TRANSFER THIS POSITION TO THE DIRECTOR’S OFFICE ACCOUNT BASED ON THE REORGANIZATION OF THE PERSONNEL UNIT UNDER THE DIRECTOR. 

 

THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO ADD FUNDING OF $25,000 EACH YEAR OF THE BIENNIUM FOR ERGONOMIC EQUIPMENT.  THIS RECOMMENDATION WAS MADE IN RESPONSE TO A REQUEST BY THE RISK MANAGEMENT DIVISION FOR THE DEPARTMENT TO INCLUDE ERGONOMIC EQUIPMENT IN THEIR BUDGET.  THE SUBCOMMITTEE EXPRESSED CONCERN OVER THE LEVEL OF FUNDING RECOMMENDED AND THE POTENTIAL DUPLICATION OF ERGONOMIC EQUIPMENT RECOMMENDED THROUGHOUT THE VARIOUS BUDGET ACCOUNTS IN THE DEPARTMENT.  THE SUBCOMMITTEE RECOMMENDED A LETTER OF INTENT TO INDICATE THAT FUNDING SHOULD BE USED SOLELY FOR THE PURPOSE OF PREVENTING OR CORRECTING A WORK-RELATED ILLNESS OR INJURY AND THAT IF FUNDING EXISTS IN THE BUDGET TO MEET ROUTINE ERGONOMIC NEEDS THROUGH ROUTINE REPLACEMENT OF EQUIPMENT, THOSE FUNDS SHOULD BE USED FIRST PRIOR TO EXPENDITURE OF THESE FUNDS AND THAT THE AGENCY REPORT QUARTERLY ON EXPENDITURES PROVIDED FOR WITH THESE FUNDS.

 

DMV, COMPLIANCE ENFORCEMENT (B/A 201-4740) DMV-21:  THE SUBCOMMITTEE EXPRESSED CONCERN OVER THE INCREASES IN THE NUMBER OF FRAUD CASES PROJECTED IN THE 2003-05 BIENNIUM, WHICH SUPPORTED THE ADDITION OF EIGHT POSITIONS RECOMMENDED FOR THE ESTABLISHMENT OF A FRAUD UNIT.  THE SUBCOMMITTEE APPROVED THE ADDITION OF THE POSITIONS TO ESTABLISH A FRAUD UNIT WITH DIRECTION THAT THE POSITIONS BE RECONSIDERED BY THE 2005 LEGISLATURE.  THE SUBCOMMITTEE ALSO RECOMMENDED A LETTER OF INTENT TO HAVE THE AGENCY REPORT PROGRAM ACTIVITY FOR THE FRAUD UNIT TO THE IFC ON A SEMI-ANNUAL BASIS. 

 

THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO REDUCE HIGHWAY FUND APPROPRIATIONS WITH AN OFFSETTING INCREASE IN AUTHORIZED REVENUE OF $228,172 IN FY 2004 AND $284,348 IN FY 2005 TO SUPPORT FINGERPRINT EXPENSES PAID BY THE COMPLIANCE ENFORCEMENT DIVISION TO THE CRIMINAL HISTORY REPOSITORY FOR APPLICANTS SEEKING LICENSES FOR AN AUTOMOBILE TRANSPORTER, MANUFACTURER, DISTRIBUTOR, DEALER OR RE-BUILDER AND FROM APPLICANTS SEEKING TO ENGAGE IN THE ACTIVITY OF A BROKER OR SALESMAN OF VEHICLES.

 

Mr. Stevens informed the Committee that BA 4735, Field Services, had been previously resolved, and no further action would be required regarding that account. 

 

DMV, FIELD SERVICES (B/A 201-4735) DMV-29:  THE SUBCOMMITTEE DID NOT CONCUR WITH THE GOVERNOR’S RECOMMENDATION TO ADD 11 POSITIONS TO PROVIDE SERVICES ON SATURDAYS IN THE CARSON CITY OFFICE. 

 

THE SUBCOMMITTEE SUPPORTED THE GOVERNOR’S RECOMMENDATION TO ADD A DRIVE EXAMINER POSITION TO THE FALLON OFFICE AND A VEHICLE APPRAISER POSITION TO THE RENO OFFICE. 

 

THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO TRANSFER SIX POSITIONS TO THE MOTOR CARRIER ACCOUNT TO PROVIDE CONSISTENCY WITH THE DELIVERY OF SERVICE TO THE MOTOR CARRIER INDUSTRY AND 18 POSITIONS TO THE COMPLIANCE ENFORCEMENT ACCOUNT TO CENTRALIZE SUPPORT FOR THE OCCUPATIONAL AND BUSINESS LICENSING PROGRAM.

 

DMV, CENTRAL SERVICES (B/A 201-4741) DMV-46:  THE SUBCOMMITTEE CONCURRED WITH THE GOVERNOR’S RECOMMENDATION TO ADD TWO POSITIONS TO THE MAIL-IN RENEWAL SECTION TO ENABLE THE DEPARTMENT TO COMPLY WITH THE PROVISIONS OF NRS 353.250, WHICH REQUIRE THAT DEPOSITS IN EXCESS OF $10,000 BE DEPOSITED NOT LATER THAN THE FOLLOWING WORKING DAY.  THE SUBCOMMITTEE DID NOT SUPPORT DOCUMENT-IMAGING EQUIPMENT THAT ACCOMPANIED THE RECOMMENDED POSITIONS TO MAINTAIN A RECORD OF THE CHECK.  THE SUBCOMMITTEE DETERMINED THAT FUNDING FOR PERSONAL COMPUTERS INCLUDED IN THE RECOMMENDATION FOR THE NEW POSITIONS WOULD ENABLE THE DEPARTMENT TO MAINTAIN A CHECK LOG. 

 

THE SUBCOMMITTEE SUPPORTED THE GOVERNOR’S RECOMMENDATION TO ADD 2.5 FTE TO ENABLE THE DEPARTMENT TO MAINTAIN A GOAL OF 14 WORKING DAYS TO PROCESS A TITLE REQUEST. 

 

IN RESPONSE TO AGING OPTICAL CHARACTER RECOGNITION TECHNOLOGY USED BY THE DEPARTMENT, THE SUBCOMMITTEE APPROVED THE GOVERNOR’S RECOMMENDATION TO PURCHASE A DOCUMENT IMAGING SYSTEM FOR THE PURPOSE OF ARCHIVING DOCUMENTS PURSUANT TO THE DEPARTMENT’S RECORD RETENTION REQUIREMENTS. 

 

THE SUBCOMMITTEE SUPPORTS THE GOVERNOR’S RECOMMENDATION TO OBTAIN EQUIPMENT TO PRODUCE LICENSE PLATE DECALS AND DATA MAILERS INTERNALLY IN LIEU OF UTILIZING AN OUTSIDE VENDOR.  BY APPROVING THIS RECOMMENDATION, THE DEPARTMENT CAN PRODUCE LICENSE PLATE DECALS AND DATA-MAILERS AS NEEDED, WHICH WOULD ELIMINATE WASTE ASSOCIATED WITH ORDERING ONE YEAR IN ADVANCE THROUGH AN OUTSIDE VENDOR. 

 

THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION TO CONTINUE TWO DRIVER/WAREHOUSE POSITIONS ASSIGNED TO THE LICENSE PLATE FACTORY AND PREVIOUSLY FUNDED THROUGH A ONE-SHOT APPROPRIATION TO ASSIST WITH THE RE-ISSUANCE OF THE SUNSET LICENSE PLATES.  CONTINUATION OF THESE POSITIONS WOULD ALLOW FOR COMPLIANCE WITH AN OSHA REQUIREMENT TO HAVE TWO STAFF PRESENT WHEN WORKING ON HIGH VOLTAGE AND HEAVY EQUIPMENT IN THE LICENSE PLATE FACTORY.

 

MANAGEMENT SERVICES (B/A 201-4742) DMV-58:  THE SUBCOMMITTEE SUPPORTS THE GOVERNOR’S RECOMMENDATION TO ADD FOUR TRAINING POSITIONS TO PROVIDE FOR INTERNAL ONGOING TRAINING NEEDS WITHIN THE DEPARTMENT.  THE SUBCOMMITTEE DID NOT SUPPORT THE GOVERNOR’S RECOMMENDATION TO ADD TWO POSITIONS TO PROVIDE TRAINING TO ENTITIES EXTERNAL TO THE DEPARTMENT BUT RATHER RECOMMENDS THE DEPARTMENT FOCUS ON INTERNAL TRAINING NEEDS.  

 

MOTOR CARRIER (B/A 201-4717) DMV-65:  THE SUBCOMMITTEE DID NOT SUPPORT THE GOVERNOR’S RECOMMENDATION TO ADD A MANAGEMENT ANALYST POSITION TO PROVIDE DETAILED REVENUE AND PROGRAM INFORMATION TO MANAGEMENT, DEVELOP NEW STATISTICAL REPORTS AND PROVIDE RECOMMENDATIONS FOR PROGRAM IMPROVEMENTS TO MANAGERS.  BASED ON INFORMATION PROVIDED BY THE DEPARTMENT, PROGRAM MANAGERS PRESENTLY ACCOMPLISH THE TASKS OUTLINED FOR THE MANAGEMENT ANALYST POSITION.  THE SUBCOMMITTEE RECOMMENDS THAT PROGRAM MANAGERS CONTINUE TO PERFORM THESE TASKS.

 

VERIFICATION OF INSURANCE (B/A 201-4731) DMV-77:  THE SUBCOMMITTEE SUPPORTS THE GOVERNOR’S RECOMMENDATION TO ADD TWO POSITIONS TO INCREASE THE NUMBER OF INSURANCE VERIFICATION CARDS SENT OUT EACH DAY FROM 900 TO 1,200.  THE DEPARTMENT BELIEVES THAT THE INCREASE IN THE NUMBER OF VERIFICATION CARDS SENT OUT HAS THE POTENTIAL FOR REDUCING THE UNINSURED MOTORIST RATE BY IDENTIFYING THOSE CITIZENS THAT EXPERIENCE A LAPSE IN INSURANCE COVERAGE.

 

RECORDS SEARCH (B/A 201-4711) DMV-89:  THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATIONS TO TRANSFER ONE POSITION TO THE AUTOMATION ACCOUNT TO PROVIDE ADMINISTRATIVE SUPPORT TO THE DIVISION ADMINISTRATOR AND TO TRANSFER ONE POSITION FROM THE CENTRAL SERVICES ACCOUNT TO ALIGN THE DUTIES OF THE POSITION TO THE CORRECT BUDGET ACCOUNT. 

 

THIS ACCOUNT REFLECTS THE SUBCOMMITTEE’S RECOMMENDATION TO TRANSFER AUTHORIZED REVENUE IN EXCESS OF EXPENDITURES RECOMMENDED FOR REVERSION TO THE HIGHWAY FUND OF APPROXIMATELY $5.7 MILLION IN FY 2004 AND $6.0 MILLION IN FY 2005 TO THE CENTRAL SERVICES AND AUTOMATION ACCOUNTS WITH OFFSETTING DECREASES IN HIGHWAY FUND APPROPRIATIONS.  THE SUBCOMMITTEE ALSO APPROVED INCREASES IN AUTHORIZED REVENUE OF APPROXIMATELY $2.7 MILLION EACH YEAR BASED ON A $2 INCREASE IN THE RECORD SEARCH FEES, NOT INCLUDED IN THE GOVERNOR’S ORIGINAL RECOMMENDATION, FROM $5 TO $7 (CAN BE INCREASED ADMINISTRATIVELY).  THE SUBCOMMITTEE APPROVED THE TRANSFER OF INCREASED REVENUE GENERATED FROM THE FEE INCREASE TO THE CENTRAL SERVICES AND AUTOMATION ACCOUNTS TO FURTHER OFFSET HIGHWAY FUND APPROPRIATIONS.

DMV, AUTOMATION (B/A 201-4715) DMV-94:  THE SUBCOMMITTEE SUPPORTS THE GOVERNOR’S RECOMMENDATION TO CONTINUE 14 POSITIONS (13 PROGRAMMERS AND 1 SYSTEMS TECHNICIAN) APPROVED BY THE 2001 LEGISLATURE TO ADDRESS PROBLEMS ASSOCIATED WITH THE ORIGINAL DESIGN AND DEVELOPMENT OF THE GENESIS SYSTEM.  BASED ON INFORMATION PROVIDED BY THE AGENCY, CHANGES REQUIRED FOR THE SYSTEM AS WELL AS THE EXPANSION OF ONLINE SERVICES WOULD REQUIRE THE CONTINUATION OF THE 14 POSITIONS. 

 

THE SUBCOMMITTEE ALSO SUPPORTS THE GOVERNOR’S RECOMMENDATION TO ADD A STORAGE AREA NETWORK AND TAPE BACKUP EQUIPMENT TO ALLOW THE DEPARTMENT TO CONSOLIDATE DATA FROM MULTIPLE AREAS WITHIN THE DEPARTMENT INTO ONE CENTRAL LOCATION TO IMPROVE ACCESS TIME, SECURITY AND DATA BACKUP.

 

THE SUBCOMMITTEE CONCURS WITH THE GOVERNOR’S RECOMMENDATION TO ENHANCE THE TELECOMMUNICATIONS SYSTEM INCLUDING AN UPGRADE TO THE EXISTING TELEPHONE CALL CENTER AND INTERACTIVE VOICE RESPONSE SYSTEMS.  GIVEN THE DOWNTIME EXPERIENCED WITH THE EXISTING INTERACTIVE VOICE RESPONSE SYSTEM OF THREE DAYS IN FY 2002, THE SUBCOMMITTEE DID NOT CONCUR WITH THE GOVERNOR’S RECOMMENDATION TO ADD A REDUNDANT INTERACTIVE VOICE RESPONSE SYSTEM FOR BACKUP PURPOSES. 

 

Assemblyman Parks thanked members of the Subcommittee for their hard work. 

Mr. Hettrick asked whether the Committee was satisfied that the fees proposed by the Subcommittee were adequate to offset the costs of the budget and keep it below the 22 percent cap.

 

Mark Krmpotic, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), explained that the $8.25 fee was recommended by the Governor and was sufficient to offset the amounts that exceeded the 22 percent cap, if included in the Administrative Services Account to offset Highway Fund appropriations. 

 

Chairman Arberry indicated that he would accept a motion regarding the budget accounts within the Department of Motor Vehicles (DMV).

 

ASSEMBLYMAN MARVEL MOVED TO APPROVE THE CLOSING REPORT FOR THE BUDGET ACCOUNTS WITHIN THE DEPARTMENT OF MOTOR VEHICLES.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblywomen Chowning, Gibbons, and Giunchigliani were not present for the vote.)

 

BUDGETS CLOSED.

 

********

With no further business to come before the Committee, Chairman Arberry declared the hearing adjourned at 11:49 a.m.

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Carol Thomsen

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Assemblyman Morse Arberry Jr., Chairman

 

 

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