MINUTES OF THE meeting

of the

LEGISLATIVE COMMISSION’S BUDGET SUBCOMMITTEE

Seventy-Second Session

January 22, 2003

 

The Legislative Commission’s Budget Subcommittee was called to order at 8:50 a.m., on Wednesday, January 22, 2003.  Chairman Morse Arberry Jr. presided in Room 4100 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.

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Mr. Morse Arberry Jr., Chairman

Mr. Walter Andonov

Mr. Bob Beers

Mrs. Vonne Chowning

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Josh Griffin

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Ms. Kathy McClain

Mr. David Parks

Mr. Richard Perkins

 

ASSEMBLY COMMITTEE MEMBERS ABSENT:

 

Mrs. Dawn Gibbons (excused)

 

SENATE COMMITTEE MEMBERS PRESENT:

 

Senator William J. Raggio

Senator Barbara Cegavske

Senator Bob Coffin

Senator Bernice Mathews        

Senator Raymond Rawson

Senator Dean Rhoads

Senator Sandra Tiffany

 

GUEST LEGISLATORS PRESENT:

 

Senator Lawrence Jacobsen

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Assembly Fiscal Analyst

Gary Ghiggeri, Senate Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Bob Guernsey, Principal Deputy Fiscal Analyst

Bob Atkinson, Program Analyst

Mindy Braun, Education Program Analyst

Larry Peri, Senior Program Analyst

Linda Smith, Committee Secretary

Carol Thomsen, Committee Secretary

 

Chairman Arberry recognized Dr. Jack McLaughlin, Superintendent of Public Instruction, Nevada Department of Education.  Dr. McLaughlin introduced Dr. Keith Rheault, Deputy Superintendent, Instructional, Research, and Evaluative Services, and Douglas C. Thunder, Deputy Superintendent, Administrative and Fiscal Services.  Dr. McLaughlin said Mr. Thunder would present the overview of the Distributive School Account budget.

 

DISTRIBUTIVE SCHOOL ACCOUNT BUDGET OVERVIEW

 

Douglas C. Thunder, Deputy Superintendent, Administrative and Fiscal Services,

Department of Education, referred to handouts related to the Distributive School Account (DSA):

 

 

 

 

Mr. Thunder said the spreadsheets (Exhibit F) included each local school district’s general fund and special education expenditures.  The amounts included both federal and state revenues and were not included in The Executive Budget.  Mr. Thunder referred to the spreadsheet named DSADATABASE, which summarized the various data elements.  The elements were linked to the other pages in the spreadsheets.

 

In response to a question on assessed valuation posed by Senator Raggio, Mr. Thunder said the assessed valuation estimates for FY2004 and FY2005 had been provided by the Department of Taxation. 

 

Mr. Thunder explained that maintenance and enhancement items were layered on top of the base budget, so the cost in a decision unit was calculated including all expenses of earlier decision units, and then those expenses of earlier decision units were subtracted; the difference was the amount of that particular decision unit.

 

Mr. Thunder referred to the decision units:

 

 

 

 

 

 

 

Mr. Thunder said the amounts included in the adjusted base were from the NRS 387.303 reports submitted to the Department by the school districts and charter schools in November of each year.  Data from the reports was compiled by the Department and submitted to the Budget Office and the Legislative Counsel Bureau (LCB) on or before November 25.  The adjusted base included a 2 percent roll-up factor, the estimate of the cost of public school employees moving along the salary schedule from one year to the next or gaining additional educational credits.  This 2 percent adjustment also accounted for the fact that retirees were replaced by younger employees, which resulted in lower salary costs.  Mr. Thunder recalled that at the end of the last legislative session an agreement was reached that there would be a 2 percent salary increase for school district employees for FY2003, with the possibility the amount could be as high as 4 percent if the balances in the state General Fund permitted.  That did not occur.  Part of the agreement required that the budget had to be based upon the assumption that there was an additional 2 percent increase even if it did not occur.  The 2 percent salary increase that was granted was also calculated from 2002 to 2004 salaries.

 

Mr. Thunder said revenue increases had been included in the M-200 decision unit in prior years.  Usually the amounts included in an M-200 decision unit turned out to be negative.  M-200 was designed to account for enrollment increases.  The amount of projected increase in revenue often, if not always, exceeded the cost of new students.  This year, for the first time, the increased revenue portion was included in the adjusted base.  The amounts in the M‑200 decision unit were a much closer representation of the costs of adding students.  Mr. Thunder continued and stated that while the substitute teacher salaries were held flat, there was allowance for growth in the M-200 decision unit based upon the increase in the numbers of students.  No other salary increases were proposed in the budget.

 

Mr. Thunder addressed fringe benefits and said the PERS rate for the employer‑paid plan was going to increase from 18.75 percent to 20.25 percent, an increase of 1.5 percentage points, or an 8 percent increase overall.  The Governor included funding for this increase in the budget.  In almost all cases, school district employees were part of the employer-paid plan.  Only a .75 percentage point was included in the line item, since the other .75 percentage point would be the responsibility of the employees.  Rather than making an adjustment to the salaries and then an adjustment to the PERS line item, a decision had been made to leave the salary amounts alone and show only a .75 percentage point increase in the PERS line item.  The other major change in benefits was the Governor’s proposal for an approximate 10 percent increase in group insurance premiums for FY2004 over FY2002 and for FY2005 over FY2004.  In FY2004, this resulted in the cost of group insurance being 10.66 percent of salaries, which was $4,477 per year per employee, or approximately $373 per month.  For FY2005, the percentage would increase to 10.72 percent of salaries, $4,974 per year per employee, or $415.50 per month.

 

Mr. Thunder responded to a question asked by Senator Rawson and explained that the percentages reported for group insurance premiums represented the percentage of the salary costs.

 

Senator Tiffany referred to the health insurance cost increases and said there was an index that could be used for growth factor.  She thought Mr. Thunder was using just a percentage of employee salary and asked which was correct.  Mr. Thunder said that until the last biennium, the budget had been based upon a flat dollar amount per employee.  The Executive Budget for the 2001‑2003 Biennium was constructed using a percentage of salary.  Senator Tiffany said insurance companies provided an index that projected inflation rates for health care insurance.  She stated, “It seems like we are always bailing out health care plans.”  Mr. Thunder said that previously, districts submitted the actual costs for the prior year and then presented budgeted information for the coming year.  It was assumed that the amount included in the budgeted column for group insurance would represent the increase for the coming years.  If the amount was 7 percent in FY2002 and the districts reported 7.2 percent in FY2003, the budget would be built upon 7 percent and then the M-300 decision unit would be built upon 7.2 percent.  Senator Tiffany recognized that the budget was constructed more on past history than the insurance index and asked if that contributed to the shortfalls in the insurance programs.  Mr. Thunder said the Department could find what the indices would indicate.  Compared to what was included in the other state agency budgets, the amount in the DSA budget was still somewhat less than the state employers were required to pay for their employees.  Mr. Thunder thought one of the motivations for the Governor to include the health benefits increase in the budget was to prevent the districts from having to come forward in the future to request additional funds to cover any shortfall.  The “iNVest” program (Investing in Nevada’s Education, Students and Teachers), which was put forth by school district personnel, was recommending a 15 percent increase in each year.  Senator Tiffany said the Subcommittee would look at the health benefits issue more.  Mr. Thunder said in past years there had never been an increase from the first year of the biennium to the second year of the biennium, and in his estimate that was probably “what got us behind.” 

 

Senator Tiffany asked if the salary increases included in the budget were for all school district employees.  Mr. Thunder said all salary increases had been across the board for public school employees.  A 2 percent salary increase provided for teachers required a 2 percent increase for all school district employees.  Senator Tiffany noted that the salaries for custodial and secretarial employees in the school districts had outstripped the private sector and asked if the state was bound by statute to provide salary increases for all school district employees.  Mr. Thunder said he did not think the Legislature was bound to provide salary increases, but it had been the practice in the past.  There were also negotiated agreements in all the school districts for teachers, classified employees, and administrators. 

 

Mr. Thunder said no funding was provided for inflationary increases due to the state of the economy.  The 71st Legislative Session provided a 15 percent inflationary increase for heat and electricity from FY2002 to FY2003.  In the current budget the 15 percent increase was applied to the actual expenditures in FY2002.

 

Mr. Thunder said the major factor in M-200 was enrollment growth.  The budget funded enrollment growth of 14,340 in FY2004, and 13,245 in FY2005.  The increases were 4.01 percent and 3.56 percent in FY2004 and FY2005, respectively.  The projected costs of the enrollment increases in FY2004 were $70 million and in FY2005, $130.5 million.  Mr. Thunder stated the expenditures for operations and equipment remained constant in the base, with the two exceptions mentioned earlier.  Additional amounts for enrollment growth were added to the various operational line items in M-200.

 

Senator Raggio referred to the enrollment growth, and asked what the actual percent of enrollment growth was in 2001 and 2002.  Keith Rheault, Deputy Superintendent, Instructional, Research, and Evaluative Services, Nevada Department of Education, said for FY2002 the actual increase in enrollment was 4.7 percent.  Mr. Thunder said the actual enrollment increases were based on the actual paid enrollment.  The Department requested enrollment projections from the school districts as part of the NRS 387 reports.  In previous years the projections had been close to actual enrollments.  In Clark County, due to the terrorist attacks of September 11, the enrollment increase last year was 3.64 percent, slightly below the projected level.  There was a possibility there would be some changes in the percentages for FY2004 and FY2005 in Clark County because of the size of the projection project.  The district was in the process of reviewing the enrollment information, so there could be some updating.  Senator Raggio said 11 of the school districts had experienced a drop in enrollment.  Mr. Thunder explained there were 10 districts that actually experienced a drop in enrollment, but 11 received funding based on the hold harmless provision.  Senator Raggio asked if the budget contemplated the hold harmless for two years for those districts.  Mr. Thunder said The Executive Budget recommended a return to a one-year hold harmless.

 

Chairman Arberry indicated a bill would be required to change the hold harmless provision from two years to one year.

 

Mr. Thunder continued his presentation and said there were increases in each of the line items in the M-200 decision unit.  The line items were based upon enrollment growth, increased square footage of buildings, and staff growth.  Page 10 of Exhibit F showed how the numbers were derived.  The growth in square footage of buildings was a significant item.  It was projected to grow by 5.68 percent in FY2004 over FY2003 and 4.38 percent in FY2005 over FY2004. 

 

Mr. Thunder referred to decision unit E-710, which contained the base amount for equipment replacement such as school buses, instructional hardware, and other instructional equipment.  The base amounts were allowed to grow based upon student growth.

 

Senator Raggio asked if anyone had taken a look in recent years at contracting out the transportation.  Mr. Thunder said in the past there had been inquiries from districts about contracting.  Senator Raggio thought contracting would alleviate the need for purchasing new equipment, because that was factored into the contract.  He recognized there was a reluctance to consider contracting out because school district employees would be affected.  However, Senator Raggio said, “When we are trying to look at the best way to spend money for education, this is one area that deserves some attention.”  Senator Raggio asked Mr. Thunder to collect information on school districts that contracted out transportation and report back to the Senate Finance Committee.  Senator Raggio stressed that he was not saying it should be done, but the members would be derelict by not researching the possibility.  Equipment was a major cost.  Mr. Thunder agreed to provide the Subcommittee with additional information related to contracting out transportation.

 

Assemblywoman Giunchigliani said six years ago the Legislature had passed a law allowing the districts to utilize public transportation as a form of subsidy, which would allow the focus to be placed on busing the younger students.  Clark County School District was conducting a pilot that would provide information on the cost impact.  Ms. Giunchigliani noted public transportation could not change routes because of the federal dollars they collected, but most routes were near a high school or middle school.  There had not been any problems related to safety issues.  The thought was that through attrition the districts would not have to continue to add additional buses and the fleets could be diverted to areas of need.

 

Senator Rawson referred to page 10 of Exhibit F and noted the amount expended per pupil for transportation in FY1998 was $72 and the projected cost for FY2004 was $9.13 per pupil.  The assumption would be that the reduced amount did not allow for the purchase of buses.  Mr. Thunder said he would verify the amounts.

 

Senator Rhoads asked if full-day kindergarten was included in The Executive Budget.  Mr. Thunder said he would discuss kindergarten later in his presentation.

 

Senator Cegavske noted the columns S and U on page 10 of 16 had incorrect headings.  The headings should have read “Cost Per Student.”

 

Mr. Thunder referred to the enhancements in E-332.  The first enhancement was the amount recommended by the Governor for textbooks, instructional supplies, and instructional hardware.  The enhancement included $18.5 million in the first year and $19.2 in the second year.  The dollars would roll into the basic support per pupil amount.  The aggregate average basic support per pupil was projected at $4,259 in FY2004 and $4,291 in FY2005.

 

Senator Raggio asked if the basic support per pupil numbers Mr. Thunder referenced were the numbers used when comparing Nevada to the national average.  Mr. Thunder replied that when comparing Nevada to the national average, the amount used included total expenditures from state, local, and federal sources.  Senator Raggio said it was important to understand that the members were only looking at state guarantee dollars, which did not take into account the revenues that came into the school districts from other sources.  Mr. Thunder said the basic support numbers included the 2.25-cent sales tax, the 25-cent property tax, and the state General Fund.  Senator Raggio said too often the basic support numbers were compared to what was called the “national average,” which resulted in all types of distortions.  The same was true with salaries.  Senator Raggio thought salaries that were reported probably should include the increased percentage for retirement and the increased amount for health care.  Mr. Thunder said he would check to see if information was available from other states on teacher salaries and benefits.

 

Mr. Thunder said the other items included in E-332 were not included in the basic support per pupil amount.  If the Legislature were to adopt the budget, the expenditures that would be calculated from the whole program would include these other two items and they would be folded into a per student number, but would not be included in the basic support number.  The first element was a $3,000 per eligible teacher in the high impact, hard-to-fill areas: special education, mathematics, English as a Second Language (ESL), and psychologist positions.  The second element was $2,000 per eligible teacher for continuing to teach in a high-risk school that needed improvement.

 

Senator Raggio said he, among others, had been very supportive of some extra stipends in mathematics, special education, and science.  However, the ESL and psychologists were somewhat new additions.  Senator Raggio asked what the estimate was on the number of teachers that would qualify for the special stipend in both special education and mathematics and what amount was budgeted for the stipend in each year.  Mr. Thunder said in FY2002, the Department estimated there were 2,636 teachers in the high-impact areas.  That amount was allowed to increase by enrollment growth.  Mr. Thunder said he would provide the members with an exact breakdown of the calculation.

 

Senator Raggio asked what the philosophy was for including psychologists in the special stipend.  Dr. Rheault responded and explained he had oversight of the teacher licensing and education personnel.  Psychologist positions had traditionally been the most difficult to fill and had been a consistent problem.  Psychologists had been approved for critical labor shortages.  Dr. Rheault stated that elementary ESL, secondary science, secondary math, and special education were the other critical areas.  Senator Raggio endorsed the concept of a special stipend for teachers who were competent and qualified in their fields and remained at at-risk schools.  Senator Raggio pointed out that the Legislative Committee on Education made those recommendations.  Senator Raggio asked if a math teacher in an at-risk school would qualify for both stipends.  Dr. Rheault was not certain that detail had been discussed, but said it was his interpretation that, unless stipulated otherwise, the individual would qualify for both.  Senator Raggio asked the Department to provide numbers on each of the classifications included in the high-impact-area special stipend, as well as the number of teachers who would qualify for both of the special stipends.

 

Mr. Thunder said in FY2004 the special stipend would be provided for 2,843 positions in the hard-to-fill area, and for 3,873 positions in the at-risk area.  In FY2005 the stipend would be provided for 2,944 positions in the hard‑to-fill area, and 4,011 positions in the at-risk area.

 

Ms. Giunchigliani indicated her lack of support for stipends and signing bonuses and thought the Legislature needed to address teacher salaries instead.  However, she felt a teacher in an at-risk school and a teacher shortage area should receive both stipends.  Ms. Giunchigliani asked the Department to provide the total dollar amount, besides what was budgeted, and what impact the stipends would have on beginning teacher salaries statewide.

 

Mr. Thunder referred to the transition to full-day kindergarten included in the E‑332 decision unit and said the suggestion came from the iNVest Program and the State Board of Education.  The cost to implement full-day kindergarten immediately was significant, so the State Board of Education developed an implementation plan that would start initially with approximately 30 percent of the programs in FY2005; additional lead time would be needed if new classrooms were required.  The Executive Budget included funding for 172 portables; each portable housed two classrooms.  The funding included for FY2004 included rent of the portables for three months.  The funding included for FY2005 included rent of the portables for one year, plus the projected costs for teacher salaries.  Mr. Thunder responded to a question raised by Senator Rhoads and said the setup for full-time kindergarten would begin three months before the end of the school year in FY2004 and the program would start in FY2005.  The total cost for the setup was approximately $4 million in FY2004; in FY2005 the cost of the leases would be $2.477 million, and the cost for hiring the teachers would be $17.674 million.  The total cost was approximately $24 million over the biennium.  The initial focus would be on at‑risk areas with the hope that in the future the program could be expanded to all children.

 

Senator Raggio voiced concerns about the full-day kindergarten program and recalled that the Legislature had ventured into Class-size Reduction somewhat unmindful of the total costs.  Senator Raggio noted the recommendation for the kindergarten program was for only 30 percent of the students; therefore, the cost for all kindergarten students would be 4.5 times the $24 million projected for FY2004 and FY2005.  Senator Raggio said he was looking at the numbers included in the “IN$IGHT” presentation.  Dr. Rheault said the projected amount needed for portables and teachers to support full-day kindergarten for FY2005 was $110 million.  Mr. Thunder said the $110 million included installation costs that would not occur in the following year.  Senator Raggio recognized full-day kindergarten was a worthwhile program and should be considered, provided there was available funding, but was concerned with the state paying for the facilities.  Traditionally, it had been the responsibility of the local school districts to fund school facilities; the districts received ad valorem taxes for that purpose.  Senator Raggio said the ad valorem taxes were increasing dramatically; the assessed valuation had jumped to a high level, from $57.7 billion in FY2003.  The Department of Taxation projected the assessed value of the entire state would be just under $70 billion in FY2005.  Senator Raggio questioned why the state should begin building school facilities since the state did not receive ad valorem taxes.  Dr. McLaughlin thought it could be stipulated in the implementation that the facilities provided were temporary solutions to house the new kindergarten program and then require the districts to provide facilities after one or two years.  Senator Raggio recalled that when Class-size Reduction was introduced the school districts had agreed to build the required facilities, but that was forgotten in a few years.  The districts then began complaining that the Legislature had mandated Class-size Reduction, but had not provided funding for the facilities.  Senator Raggio reflected that the benefit of long service was remembering everything.

 

In response to a question posed by Ms. Giunchigliani, Mr. Thunder said the cost to lease a portable was $14,400 per year.  The estimated installation cost was $20,000.  Ms. Giunchigliani thought most of the school districts had been constructing schools to keep up with growth and class size.  Ms. Giunchigliani said, “This might be an intriguing way to not have the districts come back and say they had an unfunded mandate.”  The rural counties were at the $3.64 property tax cap rate and Ms. Giunchigliani expected the Governor to recommend increasing the cap, which might assist the rural counties.  Ms. Giunchigliani thought the Legislature had previously recommended looking at the option of leasing and providing the ability to move the portables from district to district as needed.

 

Senator Cegavske asked for clarification on the definition of “at-risk.”  Dr. McLaughlin said the state would utilize the Free and Reduced Lunch Program’s definition of poverty.  Dr. McLaughlin offered to provide the Subcommittee with a copy of the definition.

 

Assemblyman Hettrick thought it was dangerous to leave any areas open-ended because of the potential for additional costs.  Mr. Hettrick was concerned that there would be no control by merely defining a school as at-risk; the number of at-risk schools could increase dramatically.  There could be as many as 20 percent more at-risk schools next year.  Mr. Hettrick said, “This is very open-ended and the state cannot afford the luxury.”

 

Dr. McLaughlin explained the control would be the money that was budgeted, which would be allocated to schools most at risk until the funding was depleted.  The definition of “at-risk” would not be the control.  Mr. Hettrick agreed that initially the schools could only spend the funding that was provided.  The problem would occur in deciding which at‑risk schools to fund during the next legislature session.  Once the process of funding began, there was no way to cease funding the program.

 

Assemblywoman Chowning referred to the mandates the state was facing due to the federal No Child Left Behind Act.  Nevada had the largest per capita population in the country of students not speaking English proficiently.  There would be numerous schools that would be considered failing.  Mrs. Chowning agreed that the at‑risk schools would increase and the state would be facing huge dollar increases.  Mrs. Chowning asked if the Department had projections for the expected increase in at-risk schools. 

 

Dr. McLaughlin said the implementation of full-day kindergarten was an investment in the future and a change in the template for Nevada’s schools.  Many states already had implemented the program.  Nevada was behind and needed to provide additional opportunities to students who did not perform well.  Dr. McLaughlin applauded the Governor for including the proposal in The Executive Budget. 

 

Ms. Giunchigliani reminded the members that Nevada had been the last state to mandate kindergarten.  She did not consider it a luxury to ensure that young people entered school ready to learn.  Studies had all shown that full-day kindergarten worked with at-risk populations.  Ms. Giunchigliani thought the students needed to be targeted, not the schools, which would then change the dollar amount; that dollar amount might be lower in some cases.  Screenings were available that looked at developmentally delayed students plus the poverty factor.  There could be other factors, and Ms. Giunchigliani felt it would be an error to simply include kindergartens in at-risk schools.  An at-risk school might not have the population that really needed full-day kindergarten.  Ms. Giunchigliani emphasized there needed to be some restructuring of the definition of at-risk.

 

Dr. Rheault addressed Ms. Giunchigliani’s concern and explained that when the budget was constructed for the 30 percent, the amount equated to 9,300 kindergarten students who could be served.  Dr. Rheault thought there could be some flexibility in how the funding would be distributed.

 

Assemblyman Parks requested a calculation that separated the capital costs from the ongoing operating costs over the years until full-day kindergarten was fully implemented.  Senator Mathews asked that transportation costs for the kindergarten students also be included in the calculation.  Mr. Thunder agreed to provide the information.

 

Mr. Thunder said there were two other items that were not included in the Distributive School Account budget that affected the districts.  In Budget Account 2699, the Governor recommended the continuation of the $2,000 signing bonus for teachers new to the state.  The budget included $5 million for each year of the biennium for the signing bonuses.  Also included in Budget Account 2699 was decision unit E-333, which addressed the Statewide Management of Automated Record Transfer (SMART) program.  Both recommendations would be discussed during the next Subcommittee hearing.

 

Senator Mathews expressed concern that during the last legislative session a bill had been passed that provided funding for library books, and the funding had not been used for library books.  Mr. Thunder said, “That was an unfortunate casualty of the downturn of the economy.” 

 

Mr. Thunder said the amount provided for each special education unit was $31,811 in FY2004 and $32,447 in FY2005.  Senator Cegavske asked how many special education teachers were needed for the biennium.  Mr. Thunder said the budget provided for 2,615 teachers in FY2004 and 2,708 in FY2005.  Senator Cegavske asked how many special education teachers were qualified to teach special education.  Mr. Thunder said he would provide that information to the Subcommittee.

 

Assemblywoman Leslie referred to Senator Mathews’ question regarding library books and said it appeared all the funding for library books had been removed from the budget for the next biennium.  Mr. Thunder confirmed no funding was included in the budget for library books.  When the departments were required to cut budgets, the funding for library books was cut.

 

Assemblyman Goldwater referred to the stipends and bonuses included in the budget and asked if those were included in the calculations for PERS benefits and health benefits and the percentage analyses.  Mr. Thunder said he would have to defer to the local school districts for an answer.  He recalled that the bonus provided by the 2001 Legislature was not subject to PERS, and the health insurance was paid as a flat amount per student and did not have a direct relationship to the salaries.  Mr. Goldwater asked if the Department had made a determination if that was legal, and Mr. Thunder stated PERS had been contacted and did not have a problem.  Mr. Thunder thought a stipend would be considered an increase in salary and would be subject to PERS.

 

Senator Rhoads said each of the eight counties he represented had experienced a decline in student enrollments and there were no increases in economic activities in those counties.  He asked how the one-year hold harmless would affect those districts.  Mr. Thunder referred to the existing two-year hold harmless provision and said in FY2002 there were 1,796 students added to the enrollment at a cost of $8.692 million.  If the one‑year hold harmless had been in place, 840 students would have been added to the enrollment at a cost of  $4.657 million.  In FY2003 there were 10 school districts that reported declining enrollments.  Under the two-year provision 1,399 students would be added to the apportionment enrollment.  A one-year hold harmless would add only 518 students.  Senator Rhoads asked what the rationale was for changing to a one-year hold harmless.  Mr. Thunder said historically there had been a one-year hold harmless provision, but that was changed to a two-year provision during the 71st Legislative Session.  Mr. Thunder said the provision gave the districts the time to “step down a notch.”  In order to prepare for the school year, contracts had to be in place.  If enrollments failed to meet the projections, funding continued to be required to cover the contract costs.  Mr. Thunder recognized that declining enrollments had a significant impact on the districts.

 

Senator Mathews indicated disdain that library funding was taken away from counties like those represented by Senator Rhoads.  Removal of the funding had an impact on the poorest counties in the state and on the children who needed the books the most.  Senator Mathews noted the money had been taken for office expense.  Superintendent McLaughlin pointed out a number of items were removed from all department budgets, and emphasized the decision to remove funding for library books was not a Department decision.  Senator Mathews said the Governor’s Office had reinstated the funding, but it had been removed again.  Mr. Thunder said the reinstatement in the first year of the biennium had been held pending the status of revenues and then it was released.  In the second year, it was not released.  Senator Mathews said it was hard to trust a group that claimed to need funding for certain areas and then used the funding in other areas.

 

Senator Raggio referred to the special stipends for the high-impact areas and asked if there would be specific criteria to determine teacher eligibility.  As an example, he asked if a teacher assigned to teach math would be qualified to teach math, or would that teacher have to have the special certification.  Senator Raggio asked if there were some basic qualifications envisioned for the stipend.  Dr. Rheault thought there were some basic qualifications, but those were not spelled out in the budget.  Dr. Rheault thought a teacher receiving a stipend would have to meet the requirements of a highly qualified teacher under the No Child Left Behind Act.  Senator Raggio hoped during the course of the session, and as early as possible, the Department would present a proposal that included specifics on the qualifications.  Senator Raggio said he could envision a situation where an individual not qualified would be assigned to teach math.  He stressed the intent was to have highly qualified teachers.

 

Mr. Thunder referred to the Adult High School Diploma Program and said the program continued to be funded the same as in the past.  The enrollment growth for the regular schools was used as an indication of how the adult program should increase.  The amount was also influenced by roll-up costs and salary increases.  Mr. Thunder said the Department and the school districts were reviewing the funding formula for the Adult High School Diploma Program and hoped to provide the Legislature with suggestions on better methods of allocation of the funding.

 

Mr. Thunder said the Governor recommended that the roll-up for the Class-size Reduction program (CSR) be reduced from 3 percent to 2 percent to align with the rest of the DSA.  The salary and fringe benefit increases had been applied in the CSR program similar to the DSA.  The budget included 1,887 CSR teachers in FY2004 at a cost of 108.1 million, and 1,953 CSR teachers in FY2005 at a cost of $114 million.  Although not included in the budget, the Governor was recommending flexibility in the CSR program.

 

Dr. Rheault said the CSR flexibility issue was identified in the districts’ “iNVest” Plan.  He defined flexibility, as it related to the CSR program, as having the option to use the allocated funding for 16:1 in grades 1 and 2 and 19:1 in grade 3 and spread that out at a 22:1 ratio or less.  Chairman Arberry asked what the controls would be for flexibility.  Dr. Rheault thought setting the maximum at 22:1 could be a control, but the option would not work for all districts.  Almost 25 percent of the grade 1 and grade 2 classes were team-taught, and raising the ratio did not provide additional classroom space.  The plan used by the Elko County School District worked well, but might not work in another district.  Elko was approved for the special project and had submitted their evaluation directly to the Legislature.  Dr. Rheault said two districts had used the option provided for flexibility in grade 3 to hire additional reading specialists.  Lyon County School District had been using the option since 1997. 

 

Senator Raggio said the previous reports on the flexibility plan utilized by the Elko County School District had been favorable.  The plan resulted in fewer behavior problems and a higher level of curriculum.  Senator Raggio thought the flexibility option deserved serious attention by the Legislature.  Dr. Rheault said all 17 local school districts desired flexibility in the CSR program.  Senator Raggio asked Dr. Rheault to contact the school districts and ascertain whether or not the issue of classroom space was a problem.  

 

Mrs. Chowning noted that some of the school districts had constructed schools with smaller classrooms to accommodate a student teacher ratio of 16:1.  There needed to be a comparison of the Elko County School District with the other districts in the percentages of transient rates, percentage of ESL students, and other factors.  Mrs. Chowning said without that comparison the Legislature could not make a decision.

 

Speaker Perkins asked how many classrooms had been granted waivers from the CSR program, what that percentage was, and how that might be a limiting factor.  Dr. Rheault said the Department had information on the number of variances granted by the State Board of Education.  All but three of the districts submitted variances for either kindergarten or grades 1, 2, and 3.  Elko County School District was not included because of their special project.  Dr. Rheault explained one reason for the large number of variances was statutes stated the ratios in kindergarten classes should not exceed 15:1, but only 21.5 CSR positions were allocated for kindergarten. 

 

Speaker Perkins asked if Dr. Rheault expected continued requests for waivers if the ratio was increased to 22:1.  Dr. Rheault indicated he did not anticipate any variances if the districts were given flexibility to reduce classes to 22:1 in all grades.  Speaker Perkins asked if the Department had completed an analysis taking into account those variances that had been granted and would those variances be a limiting factor in the availability of funds for the programs.  Dr. Rheault said the State Board of Education had tabled the granting of variances until their March meeting and had asked the Department to report back with numbers indicating what level of funding would be required for the CSR program to not require a variance request.  Speaker Perkins shared Senator Raggio’s concern and that of others that there might not be sufficient classrooms.  Dr. McLaughlin believed there needed to be further discussion in some other forum about a better way to deal with the whole issue of granting variances.

 

Ms. Giunchigliani wanted to know if the variances were required due to insufficient numbers of teachers or classroom space.  Dr. Rheault used grade 1 as an example and said the ratio for grade 1 was 16.2:1 and funding was provided for 16:1.  Primarily it was not lack of teachers, but was instead lack of funding to get to the mandated 15:1 ratio.  Ms. Giunchigliani thought variances could possibly be eliminated if “we landed on the best number and then provided the funding.”  Ms. Giunchigliani asked why 25 percent of the classrooms were still utilizing team-teaching.  Dr. Rheault said 24 percent of the classrooms in grade 1 were team-taught.  Of the 410 team-taught classrooms in grade 1, 329 were in Clark County and 58 were in Washoe County.  Ms. Giunchigliani suggested the Legislature could designate moving away from team-teaching.  She referred to the flexibility used by Lyon County School District to hire reading specialists and asked if there was an analysis on the impact the specialists had on the students.  Dr. Rheault said Lyon County provided an annual evaluation report and he would provide members with a copy.  Before receiving approval for an alternative use of the CSR funds, the district must provide a description of the reading program to be used.  Ms. Giunchigliani thought teacher training needed to be reviewed.

 

Senator Cegavske recognized that most of the school districts had not been able to meet the Class-size Reduction mandate; an unfunded mandate that continued to grow.  Senator Cegavske thought it was incredible that legislation was passed that was not funded.  She shared the frustration of the State Board of Education that so many of the districts could not comply with the CSR mandate.

 

Mr. Thunder said The Executive Budget also recommended the continuation of the following programs:  

 

 

The remediation programs and the Professional Development Centers received increased funding for enrollment growth; the remaining four were funded at FY2002 levels.

 

Senator Raggio said the Legislative Committee on Education recommended consideration of melding the funding for the Professional Development Centers and the NELIP.  There were also some federal funds involved.  Senator Raggio asked if The Executive Budget contemplated something like melding so that “we can get the biggest bang for the buck.”  Mr. Thunder did not think the budget would be at odds with the concept, but the programs were currently listed as separate line items.  Senator Raggio asked the Department to work with LCB staff to determine the most efficient use of the funding included in the proposed budget.  Perhaps the funding could be adjusted or reduced and still meet the requirements of the Governor for the NELIP and the federal No Child Left Behind Act.  The intent was to prepare teachers and administrators, as well as address the literacy program.  Dr. Rheault believed there had been testimony before the Legislative Committee on Education that indicated there could be some cost savings, and said Department staff would be happy to work with LCB staff and report back to the members.

 

Senator Cegavske asked if the job description for counselors had been discussed.  Dr. Rheault said the State Board recently had adopted standards for student counseling.  The role of a counselor was not defined, but it did define what was expected of students in the counseling area.  The counselors who had developed the standards had provided good support and positive feedback.  Dr. Rheault offered to provide members with a copy of the standards.  Senator Cegavske said she would also like a copy of the former definition of a counselor.

 

Senator Rhoads said he had talked with the Superintendent of the Humboldt County School District, who said changing to a one-year hold harmless provision would cost the district $500,000 per year.  Mr. Thunder said the Department could provide information to the Subcommittee on the impact of a one-year hold harmless on a district‑by‑district basis.

 

Ms. Giunchigliani referred to Senator Cegavske’s concerns with the counselors and she indicated the issue would be the interpretation by management of the new standards for counselors.  There could be job descriptions that still did not let counselors counsel students.  Definition was not the problem, but rather the assigned duties.  Senator Mathews agreed.

 

Senator Raggio said the 2001 Legislature increased funding for early childhood education from $1 million for the 1999-2001 biennium to $7 million for the 2001-2003 biennium.  The current budget included $5.2 million to continue the program for the biennium.  Senator Raggio asked for an explanation of how the funding was used.  Dr. Rheault said the funding was used consistently across the districts and was primarily used to prepare children and parents for the start of kindergarten.  The funding provided by the 2001 Legislature supported approximately 900 students and 900 parents.  Senator Raggio wanted to know how the children were identified, how they accessed the program, how they were notified, and how effective the program was.  Dr. Rheault said he was not that familiar with the program but all the information requested was included in the interim evaluation report.  Senator Raggio asked that someone from the Department read the report and, if possible, before the end of the day provide the information to the Subcommittee.

 

Senator Cegavske asked if a student participating in the Adult High School Diploma Program had to pay a fee to participate.  Mr. Thunder said it was his understanding no tuition was charged.  The program was offered in schools and in the prisons.  The school districts that had prisons located within their county boundaries provided the services.  Senator Cegavske asked if the program had been successful and if there was a tool to measure the success of the program.  Mr. Thunder said staff from the Department and local school districts would be coming before the finance committees to present recommendations on how best to use the funds.  Mr. Thunder noted that Adult High School Diploma Program students were required to pass the High School Proficiency Examination.

 

Ms. Giunchigliani asked for clarification on the Head Start Program and the Even Start Program.  Mr. Thunder said Head Start was a federally-run program.  The Even Start Program was designed to help families and their children become ready for kindergarten.  Ms. Giunchigliani thought it was shameful that the Head Start Program served only 3,030 and felt the program was one of the best programs available.  Ms. Giunchigliani wanted to make certain there was no duplication of enrollment of children in the two programs. 

 

Ms. Giunchigliani said she had heard there had been a huge increase in students accessing adult education classes and asked how the budget was constructed.  Mr. Thunder said he would have to get more information on the student growth, but the budgets were based upon the increase in enrollments for the regular school population.  Ms. Giunchigliani also asked the Department to provide the total number of after-school programs that were being funded.

 

Mr. Thunder referred to the revenue items included in the DSA budget:

 

 

 

 

 

 

 

 

Assemblywoman McClain referred to the Governmental Services Tax and said in 1997 legislation was passed that allowed for refunds on license plates.  In 2001 when the law became effective, the Controller’s Office realized the process was a nightmare.  The law was almost repealed during the 2001 Legislative Session, but was lost in the final hours of the session.  For FY2002 the revenue lost was over $4 million; $2.6 was lost by the school districts, and the state had to make up the shortfall.  Ms. McClain said the issue would resurface during the current session and wanted all the members to be aware of the bill.  Ms. McClain thought it was the responsibility of the legislators to “plug some of these holes” instead of always trying to find new revenues.

 

Mr. Thunder continued and said in order to meet the state’s obligations in FY2002, nearly $44 million was transferred from FY2003.  The Governor was proposing a supplemental appropriation of approximately $69 million to cover the anticipated shortfall in the FY2003 DSA budget.  Mr. Thunder said that amount might not be sufficient to cover the shortfall.  The Executive Budget also recommended that the funds residing in the Trust Fund for the Improvement of Schools be transferred to the DSA.  Mr. Thunder said it appeared between $37 million and $38 million might be available for transfer and that would help offset the supplemental appropriation.  Mr. Thunder stated there were sufficient funds to meet the third quarter DSA payment on February 1, 2003, however the May payment would require a supplemental appropriation. 

 

Mrs. Chowning asked why remediation funds were decreased by 6 percent when there was a federal mandate to make demonstrable progress in reading and mathematics.  Mr. Thunder said the base budgets were built on actual expenditures and in the base year of 2002 not all of the money was expended.  The amounts carried forward reflected the actual expenditures plus any roll-ups.  Mrs. Chowning noted that funding for the Professional Development Centers increased by 20 percent and the NELIP increased by the same level.  Mr. Thunder said he would check on the amounts and report back to Mrs. Chowning.

 

Mr. Thunder referred to Exhibit E and said it focused primarily on the financial areas of the school districts.  He asked the members to provide any suggestions for other areas that should be included in the report.  The Department was in the process of developing a small booklet called “Nevada Education Quick Facts” that would have information about the education system in Nevada and the various programs offered.  Another document being developed was called “Nevada Quick Stats.”

 

Speaker Perkins asked the Department to create an analysis detailing the reason waivers were granted for the CSR program when the funds were not there to hire enough teachers to meet the required ratios.  For example, were waivers needed because the enrollment growth was over what had been projected, was there insufficient funding for the number of teachers that were projected, or were the districts spending the money in other areas.

 

Senator Raggio acknowledged the presence of Senator Lawrence Jacobsen, who had served on the Senate Finance Committee for many years.

 

 

 

 

DEPARTMENT OF HUMAN RESOURCES, DIRECTOR’S OFFICE BUDGET OVERVIEW

 

Chairman Arberry recognized Michael J. Willden, Director, Department of Human Resources (DHR).  Mr. Willden introduced the leadership team of the DHR and then referred to the handout, ”Overview of the Director’s Office Budget Presentation to the Money Committees of the 2003 Legislature”(Exhibit G).  The first section of the handout included an overview that displayed:

 

 

 

 

 

Mr. Willden continued and referred to the rapid caseload growth experienced by the DHR and said page 5 of Exhibit G provided growth detail for the Temporary Assistance for Needy Families (TANF) program.  The actual growth in the program far exceeded the projected growth.  However, growth had reached a plateau and had started decreasing over the past few months.

 

Chairman Arberry asked if the decrease in the TANF program growth was a result of people leaving the state or a result of more individuals gaining employment.  Mr. Willden thought a primary reason for the decline was an improving economy and the policy change in unemployment benefits.  Immediately after the events of September 11, 2001, the DHR had implemented a policy in the TANF program that excluded the budgeting of unemployment benefits and allowed those parents who had been laid off and had dependent children to have access to the TANF program and health care programs; that waiver had been in place until October 2002. 

 

Mr. Willden said page 6 (Exhibit G) included a history of the “big three” public assistance programs: TANF, Food Stamps, and Total Medicaid.  A bar chart that showed budgeted and actual enrollment in the Nevada Check Up program was included on Page 7.  The actual enrollment in the Check Up program exceeded the projected enrollments by approximately 7 percent.  Mr. Willden explained that the Governor had not wanted to place a cap on the Check Up program.  Pages 8 and 9 of Exhibit G included caseload information on Mental Health Services (MH) and Developmental Services (DS).

 

Mr. Willden referred to page 10 of the second section of Exhibit G, “0rganization,” which contained a reorganization plan for the Department.  The chart displayed both the existing organization and the proposed reorganization plan:

 

·        The first box displayed the Director’s Office with 10 existing positions and the proposed request to add 3.5 additional full-time equivalent positions to address fiscal activities.

 

·        The second box displayed the 14 existing positions in Budget Account 3276.  Mr. Willden said the Community Connections program would be eliminated.  Budget Account 3276 would be moved to the Health Division and would be known as the Nevada Early Intervention Services program, which would serve the birth to age 3 population.  The proposal would transfer 12.5 FTE positions to the Health Division.  Mr. Willden said the existing Community Connections program, funding, and staff would be moved into other DHR budgets.  

 

·        The third box included BA 3261, the Healthy Nevada Fund.  The DHR proposed moving the auditor position and management analyst position from the account.  The auditor position would be moved to the fiscal team in the Director’s Office, and the management analyst would be moved to the proposed Grants Management Unit.  Mr. Willden said the Healthy Nevada Fund would continue to receive all of the funds from the tobacco account, would still operate the Senior RX program, and would continue to be the receiving account from which funds would be passed through to other programs.  The Department desired to place the fiscal positions in the Director’s Office.

 

·        Mr. Willden said no change was proposed for the Blue Cross/Blue Shield Settlement Fund.

 

·        Budget Account 3266, Office of Community Based Services, and Budget Account 3154, Developmental Disabilities, were currently in the Department of Employment, Training and Rehabilitation (DETR).  Based on a recommendation included in the Department’s “Strategic Plan for Persons with Disabilities in Nevada,” the proposed reorganization would transfer both budgets into the Office of Community Based Services in the Department.  Mr. Willden felt it was appropriate for the two budget accounts to be within the DHR.

 

·        The final proposal would reorganize five existing budget accounts that provided pass‑through funding to local nonprofit and community-based organizations.  The programs included the Children’s Trust Account, Family Resource Centers, Purchase of Services Title XX account, the Family to Family program, and the Community Services Block Grant.  The DHR had requested that all five budgets be combined in one new budget, Budget Account 3195, Grants Management Unit.  Mr. Willden said an occupational study was conducted in 2002 by the state Department of Personnel and many of the existing positions had been reclassified.  The study found that grade 35 positions to grade 40 positions were performing similar duties.  Based on the study, each position was reclassified to a grade 37.  The new unit would provide for standardized accounting and monitoring, and the procedures would be the same for all of the grant activities.

 

Mr. Willden referred members to the proposed organizational structure included on page 13 of Exhibit G and said the Administrative Officer would have responsibility for contracts, budgets, and accounting.  Fiscal staff would be consolidated into one budget account, which would allow for standardized processes and accountability.  The auditor position that provided oversight for the Fund for a Healthy Nevada would be transferred into the audit section, and one new auditor was requested.  Mr. Willden explained that one audit position was not sufficient to audit the 130 grants, or subgrantees.  The Office of Community Based Services would include the two budgets recommended for transfer from the DETR to the DHR.

 

Mr. Willden asked members to turn to page 14 of the handout (Exhibit G).  Chairman Arberry asked if the flow chart represented a new division within the DHR.  Mr. Willden replied that the flow chart represented the proposed organizational structure under the fiscal officer within the DHR.  The information on page 14 listed the responsibilities of the Administrative Services Officer.

 

Mr. Willden continued and explained that the new Grants Management Unit would have six staff specialists who would have responsibility for the Task Force for a Healthy Nevada, the Block Grant Commission, and the Committee for the Protection of Children.  Mr. Willden said the reorganization would merely “place them all in one bucket with standardized methodologies and tools.”

 

Chairman Arberry asked if the proposed reorganization would save money.  Mr. Willden acknowledged the proposal would not save revenue.  However, in the past there had been problems with positions funded by one budget and employees in those positions not allowed to work on another activity due to the terms of the grant.  Mr. Willden pointed out that an employee working on the Committee for the Protection of Children’s activities and funded by Title XX would be in violation of the grant.  A time-in-motion accounting process would properly account for the time spent on each grant and would allocate the time to the proper grants.  Mr. Willden noted that the community-based organizations had indicated a preference for a single Grants Management Unit.

 

Mrs. Chowning recognized flexibility was one thing, but accountability was another.  She was concerned that the new unit would not meet the needs of the grant recipients; under the current organization structure the needs were being met.  Mr. Willden stated the needs would continue to be met for all of the programs.  The proposed Grants Management Unit would be under a single budget account with various categories; staff would continue to have the same primary assignments.  Mr. Willden explained the change would allow for flexibility and improved cost allocation and would not violate cost allocation principles.  Mr. Willden stressed that it was not the intent of the Department to decrease the level of service to any of the programs, activities, or governing boards.  The Task Force for Healthy Nevada had shared the same concerns voiced by Mrs. Chowning, and Mr. Willden had assured those members the reorganization would streamline services.

 

Ms. Leslie thought the proposed grants management reorganization plan was superior to the plan submitted during the 2001 Legislative Session.  Ms. Leslie assumed the reorganization would address the problem of subcontractors duplicating paperwork.  Ms. Leslie hoped the issues of some subcontractors embezzling funds, or having fiscal problems, would also be corrected.  In response to a question posed by Ms. Leslie, Mr. Willden explained the auditors would be auditing the subcontractors and subgrantees.

 

Mr. Willden referred to the flowchart on page 15 (Exhibit G) which detailed the organizational structure of the Office of Community Based Services.  Mr. Willden said the DHR was not recommending an Office of Disability Services, which had been recommended during the strategic planning process required by A.B. 513, passed by the 2001 Legislature.  However, the Department was attempting to “bring all of the players into one department” and was recommending that the Office of Community Based Services be moved from the Department of Employment, Training and Rehabilitation (DETR) into the DHR under the Deputy Director.  Over the next biennium, the Department would be analyzing the possible need for additional reorganization within the DHR related to services for people with disabilities.  Mr. Willden recognized that the DHR probably would require additional reorganization.

 

Mr. Willden referred to the issues and highlights of the Department (page 16, Exhibit G) and said the 2001 Legislature had approved a number of programs that significantly improved the Department’s services:  The programs included:

 

·        Health Care—Elimination of the CHAP (Child Health Assurance Program) assets test, increased Nevada Check Up enrollments, increased number of waiver slots, approved a breast and cervical cancer coverage program, funded Medicaid caseload growth and provider rate increases

 

·        Children’s Programs—Foster care rate increases, increased funding for adoption subsidies, Child Welfare transition to the counties, expanded child care assistance programs

 

·        Seniors—Community Home-based Initiatives Program waiver expansions (CHIP), group care waiver expansions, ombudsman expansion, transportation programs

 

·        Technology—Funded a Web-based application system for eligibility programs, funded the Electronic Benefits Transfer (EBT) Food Stamp system, funded the Medical Management Information System (MMIS)

 

Mr. Willden was proud that the EBT Food Stamp system was on an electronic card and said he did not think any of the Subcommittee members had received any complaints about the new system.  The system had functioned almost flawlessly in the transition from paper coupons to electronic cards.  Mr. Willden emphasized that the DHR staff deserved a great deal of credit for the smooth transition.  Mr. Willden indicated the MMIS was also progressing well.  The Pharmacy Point of Sale (POS) project was in the final testing phase and online claims adjudication would begin February 1, 2003.

 

Mr. Willden said the four strategic plans required by A.B. 513 had been completed and included plans for seniors, people with disabilities, rural health issues, and a comprehensive provider rate study.  Each plan had been published and placed on the Internet.  Mr. Willden said Subcommittee members would be receiving a copy of an executive summary for each of the plans.  The plans were used in building the agency budget.  Mr. Willden indicated the DHR had complied with the Letter of Intent sent by the 2001 Legislature, which requested that the rate study be focused on the rates for community training centers and supported living arrangements.  Due to receipt of additional federal matching funds, approximately $150,000 of the $800,000 appropriated by A.B. 513 would be reverted to the state General Fund.  Mr. Willden said over 2,500 individuals had worked numerous hours developing the plans and emphasized that the plans were exceptional.

 

Mr. Willden referred to S.B. 174, passed by the 2001 Legislature, which directed the Department of Human Resources and the Department of Employment, Training, and Rehabilitation to include the necessary funding in the agency budget request to meet the needs of people with severe functional disabilities.  The Committee, as mandated by S.B. 174, had worked hard and had developed recommendations that were included in the budget.

 

Mr. Willden referred to page 18 of the handout and noted caseloads had skyrocketed since September 11, 2001.  Between the end of the 2001 Legislative Session and the end of December 2002, the TANF program caseloads increased 54 percent, Food Stamp program caseloads increased 38 percent, and Medicaid had increased 32 percent.  Mr. Willden pointed out that a cap had not been placed on enrollment in the Nevada Check Up program, and the number of recipients was approximately 7 percent higher than budgeted.  Mr. Willden continued and said by FY2005 caseload projections would average 200,000 for the Medicaid program, 45,000 for TANF, 120,000 for Food Stamps, and 32,655 for the Nevada Check Up program.

 

Mr. Willden said because of the September 11 attacks and the economic situation, many actions were taken by the Department to defer, or reduce, expenditures:

 

 

 

 

 

 

Chairman Arberry referred to the TANF program cuts detailed on page 19 of Exhibit G and asked for an explanation of the 25 percent reduction in domestic violence programs.  Mr. Willden said the Welfare Division through TANF funds had contracted with and forwarded money to various domestic violence programs throughout the state.  Because of the lack of TANF resources, the contracts had to be amended to reduce the original amounts.  Chairman Arberry then asked for an explanation of the reduced transfers to the Division of Child and Family Services (DCFS) and counties.  Mr. Willden replied that Washoe County had been budgeted to receive a transfer of $1.8 million from TANF to help fund the Child Protective Services activities; the amount had been reduced by 75 percent.  Clark County amounts were also reduced.  Mr. Willden said at the beginning of the current biennium the TANF reserve was $22 million.  Due to increased caseloads, the Department had to move money from other programs to fund monthly cash grants to prevent having to reduce the monthly cash grants.  The Department had made a determination that keeping the basic cash grant program was most important.  Mr. Willden noted that cuts were made to the cash grants in the Kinship Care program, but the Department did not want to reduce the basic TANF program.  The cuts were made in other ancillary programs that had been funded with TANF dollars.

 

Mr. Willden continued with his presentation and referred to the other actions the Department had taken to reduce expenditures:

 

 

 

 

 

Mr. Willden reiterated that the basic cash grant programs were not reduced and said Governor Guinn was committed to maintaining basic access to health care and public assistance programs in hard economic times.  The breast and cervical cancer coverage program was implemented in July 2002; 54 women were enrolled in the program.

 

Mr. Willden referred to the 2003‑05 biennium budget for the Department (page 21, Exhibit G) and provided the following information:

 

            Health Care           

 

 

 

 

 

Rate Increases

 

 

Seniors

 

 

Disabled

 

 

Early Intervention Services

 

 

 

 

Mental Health

 

 

 

 

 

 

 

Chairman Arberry asked if the homeless population had been considered when developing the budget.  Mr. Willden thought all the components included in the budget related to mental health would address the homeless problem.

 

Senator Coffin asked if there were plans to close the Desert Willow Treatment Center.  Mr. Willden said Desert Willow, which was under the jurisdiction of the Division of Child and Family Services, was not going to be closed.  A proposal to close the 8-bed adolescent unit of the hospital was included in The Executive Budget.  Senator Coffin asked when the unit would be closed and the reason for the closure of the vital children’s treatment center.  Mr. Willden thought the reason for the closure was because staff felt the young children in the unit could be treated within the community, and did not need to be treated in a hospital setting.

 

Edward Cotton, Administrator, Division of Child and Family Services (DCFS), said the unit that was to be closed served children under the age of 12.  The unit had rarely been filled and there had not been a waiting list, but more importantly, the staff did not think young children could be best served in a residential setting.  The Division was focusing more on locating children in need of mental health services in foster homes and community-based familial settings and providing wrap-around services.  Senator Coffin asked Mr. Cotton to provide additional information on the unit closure at the meeting scheduled for Tuesday, January 28, 2003.

 

Chairman Arberry was concerned that there was no longer a need for the facility.  Mr. Willden clarified that the facility had 56 beds and only 8 beds, one unit, would be closed.  There were different wards or units within the hospital for various types of offenses and other problems.  Mr. Willden stated for the record that there had been no discussion to phase out Desert Willow Treatment Center, only the unit related to children under the age of 12.

 

Senator Tiffany referred to the new 150-bed mental health hospital and asked if privatization had been considered.  Mr. Willden said privatization had not been looked at since he had been director.  Senator Tiffany said privatization had worked well in other states.  Chairman Arberry noted that Nevada had not had a great deal of luck with privatization, and he commended Mr. Willden and the DHR staff for outstanding work.

 

Mr. Willden continued his presentation on the contents of the budget:

 

Children’s Services

 

 

 

 

Senator Raggio noted that the Summit View Juvenile Correctional facility had been closed for over a year, and asked why there was a recommendation to reopen the facility rather than contracting as in the past.  Because of fluctuating populations and the need for full staffing, Senator Raggio said he did not see how the state could operate the facility for less.  Mr. Willden acknowledged the payment was based on a per day per diem for a youth placed into a facility such as the Rite of Passage or the Correctional Corporation of America’s (CCA) correctional facility located in Tennessee.  Mr. Willden stressed that it was not his intent to mislead the Subcommittee and explained the costs for operating the Summit View Juvenile Correctional facility would not be less than sending a youth to either of the two facilities mentioned.  Senator Raggio said he could not approve staffing and reopening a facility unless there was a compelling reason—the Subcommittee would have to study the issue closely.  Mr. Willden understood the position held by Senator Raggio and said that during the January 28 meeting, division staff would detail problems such as backup in detention and the over‑capacity experienced by the youth facilities located in Elko and Caliente.

 

Mr. Willden continued his presentation on the DHR budget and referred to page 23 of Exhibit G:

 

Health Division

 

 

 

Welfare Division

 

 

Mr. Willden referred to the DHR budget reductions and noted that a number of positions had been eliminated.  There were new Medicaid matching rates, and receipt of increased federal dollars would result in a savings exceeding $90 million over the next biennium.  Mr. Willden said the budget contained some cost containment initiatives, including limitations on certain services.  Additionally, the Business Licensing Fees would be reduced.

 

Mr. Willden concluded his presentation and said the documents behind the “Program Stats” tab in the handout (Exhibit G) included statistics on the:

 

 

Assemblywoman Leslie emphasized that the DHR budget was the best she had seen and complimented Mr. Willden and the Governor’s Office.  However, Ms. Leslie voiced concern that the suicide prevention recommendations made by the Legislative Commission’s Subcommittee to Study Suicide Prevention, chaired by Senator Ann O’Connell, did not appear to be included in the Department’s budget.  Mr. Willden said the Department had submitted an agency request for consideration of the recommendations, but the request was not included in The Executive Budget.  Mr. Willden thought the reserved MAXIMUS funds might be used to fund the recommended suicide prevention coordinator and training program once there was a determination made on how the funds could be used.  Ms. Leslie said another area that had not been addressed in the budget was substance abuse.  She noted Nevada had been “at the bottom of the list” for substance abuse prevention and treatment for many years.  Mr. Willden said he would have to defer to Yvonne Sylva, Administrator, Health Division, DHR, to answer Ms. Leslie’s question.  Mr. Willden recalled that funding was provided by the 2001 Legislature for adolescent substance abuse.

 

Mark Torvinen, CPA, Administrative Services Officer IV, Director’s Office, Department of Human Resources, referred to the “Budgets” tab in Exhibit G and said budget information was included for 14 budget accounts.  The Director’s Office provided financial and budget consultation to the Public Defender, and accounting and administrative support to the Indian Commission.  Mr. Torvinen said the Director’s Office also provided accounting for the Director’s Office, the Fund for a Healthy Nevada, the Blue Cross/Blue Shield settlement, and would provide accounting services for the proposed Grants Management Unit.  Mr. Torvinen noted Budget Account 3276, the early intervention budget, would be transferred to the Welfare Division’s Child Assistance and Development budget.  Mr. Torvinen said he would be happy to answer any questions the Subcommittee might have.

 

Ms. Leslie asked for an explanation of the plans and options for the MAXIMUS money and wondered if any of the funds would be reverted at the end of FY2003.  Mr. Torvinen stated a portion of the MAXIMUS funds would be reverted, probably half of the $4 million that was work programmed for FY2003.  There was a budgetary problem within the Director’s Office because category 01, Personnel Services, had not been properly budgeted.  Mr. Torvinen said to date none of the MAXIMUS funds had been used for Title XX.  MAXIMUS funds included in The Executive Budget were all reserved in the Director’s Office and were not earmarked for specific budget accounts.  In response to a question posed by Ms. Leslie, Mr. Torvinen said the $500,000 funded out of MAXIMUS for the homeless program was transferred to the Division of Mental Health and Developmental Services—the contract was let and the program was operational.  Mr. Torvinen was not certain the funds would be expended by June 30, 2003.

 

Assemblyman Beers referred to the 280 new positions included in the budget and asked how many of those positions could be eliminated to provide a raise of 2 percent for the existing work force.  Mr. Torvinen said he would get back to Mr. Beers with the answer.

 

WELFARE DIVISION, BUDGET OVERVIEW

 

Nancy Ford, Administrator, Welfare Division, said in times of economic decline and economic hardship, human services programs were a growth industry; the Welfare Division was no exception to the phenomenon.  Ms. Ford referred to the handout titled Nevada State Welfare Division FY2003/2005, Budget Highlights (Exhibit H) and said the first pie chart included the piece of the DHR budget attributable to the Welfare Division. 

 

Ms. Ford said the accomplishments of the Division included the Electronic Benefits Transfer system (EBT), which had eliminated the paper Food Stamp system and allowed Food Stamp recipients to use an EBT “swipe card.”  Ms. Ford felt the change to the EBT had taken away some of the stigma associated with the coupons and had provided the clients some dignity while shopping.  Representatives of the federal Food Nutrition Service had awarded certificates to Division staff based on the success of the implementation of the EBT.  Ms. Ford noted that Nevada had been foremost in the implementation of the EBT system. 

 

Ms. Ford continued and said there were two Internet-based systems that were located on servers: the Online Automated Self-Sufficiency Information System (OASIS), and the Low Income Home Energy Assistance program system (LIHEA).  Both systems were implemented effective July 1, 2002.  The OASIS was used to track employment training activities.  The LIHEA system was designed to calculate both eligibility and benefits and was interfaced with Southwest Gas Corporation, Sierra Pacific Power Company, and Nevada Power Company.  The voice response unit system had been expanded to include TANF, Food Stamps, and Medicaid.  The Electronic Application Program (EAP) was the source of a $500,000 one-shot appropriation from the 2001 Legislative Session.  Because of required reversions, only $180,000 of the funding had been expended.  The existing EAP processed information and determined if an applicant was more appropriate for the Nevada Check Up program or for Medicaid.  Ms. Ford believed the EAP could be used internally and then expanded to public access in the future.

 

Ms. Ford referred to the challenges faced during the past 18 months and said the Division’s caseloads were increasing prior to September 11, 2001, and skyrocketed after September 11.  Caseloads were projected to increase at a slower rate over the next biennium because of the economy and population growth.  Another challenge was the work participation rates.  It had been difficult to meet the rates required by the federal government in bringing in TANF dollars.  Ms. Ford was confident the Division had met the work participation rates for FY2002, but did not think the rates would be met for FY2003.

 

Senator Rawson said he had reviewed the Welfare Division’s budgets in detail and referred to the chart in the handout (Exhibit H) detailing the increase in cash assistance recipients.  The chart depicted straight-line growth after September 2002 that was dramatic, and Senator Rawson said he felt the growth should have stabilized.  Senator Rawson asked if there had been a policy change that resulted in the increase in recipients.  Ms. Ford said the chart, which was under the “Caseload Growth” tab (Exhibit H) was based upon projections that the Welfare Division had utilized, which was a simple linear trend that dated back to July 1999.  The Division had used a variety of models to project caseloads.  Ms. Ford said the caseload increase looked dramatic due to the way the numbers were displayed on the left side of the chart.  Senator Rawson asked if a budget was based on the projections, and for some reason the actual caseload was double the projections, what mechanisms could be controlled or not controlled.  Ms. Ford explained that there was much more flexibility with the TANF program since it was not an entitlement—caseloads could be capped. 

 

Ms. Ford said stabilized caseloads and systems and increased efficiency were the goals of the Welfare Division.  The Division was not requesting new programs; the budget request had been constructed only to maintain existing programs.  Ms. Ford said the caseload growth percentages included in the handout differed from those presented by Mr. Willden because a different time frame was used.  From March 2001 to October 2002:

 

 

Ms. Ford said that between September 2001 and September 2002 the TANF caseload had increased 48.3 percent and was 75 percent above the legislative projections.  Comparing caseloads on per capita was more telling—in 1995 the caseload averaged 41,000 and there were 26.3 recipients per thousand population; currently there were 14.6 recipients per thousand population.  In order to reach the high point of 26.3 per thousand, the TANF caseload would be over 61,000.  The Food Stamp caseload was the highest ever.  In December there were 104,000 Food Stamp recipients.  Ms. Ford briefly reviewed the caseload growth charts included in Exhibit H.  She noted that the caseload growth in Medicaid was attributable to the TANF program.

 

Ms. Ford commended the staff of the Welfare Division for an outstanding job in light of the significant increases in caseloads.  However, the Division had comprised client services, application processing, and the quality of work due to the large caseloads.  Ms. Ford said the Division utilized a staffing guideline to determine when additional staff was needed, or if staff needed to be reduced.  In the Las Vegas area the staffing guideline was used to determine if staff needed to be moved from one location to another office.  Ms. Ford referred to page 1 behind the “Staffing Requirements” tab in Exhibit H, which included the number of positions justified and the number requested by the Division for each job classification.  For FY2004, 270 positions were justified, and the Division had only requested 107; for FY2005, 249 positions were justified, and the Division had only requested 133.  Ms. Ford explained that to help defray the costs of adding new staff, the positions would be phased in over a period of time for each fiscal year.  The phasing would also allow the Division to not hire staff if caseloads decreased.  Ms. Ford emphasized the importance of the Division having the authority to fill the positions.  The chart on page 3 included caseload projections for the budget preparations based on October 2002 caseload.  Ms. Ford stated that the staffing standard supported the caseload and the staffing approved by the 2001 Legislature.  Ms. Ford thought the Division’s staffing request was reasonable. 

 

Ms. Ford directed members to the tab titled “TANF Issues” (Exhibit H) and said the first chart included TANF revenues received for maintenance of effort, the block grant, the supplemental grant, the high performance bonus (HPB), and carry forward.  The supplemental grant was awarded to high growth states.  Ms. Ford said Congress had frozen the grant at $3.7 million.  To qualify for the HPB, a state had to be one of the top five high‑performing states in four different categories: job entry rate, increase in the job entry rate, success in the work force rate, and increase in the work force rate. 

 

Chairman Arberry asked for an explanation of the HPB.  Ms. Ford explained that the HPB was a percentage of the block grant, and could not exceed 5 percent of the block grant; for Nevada the amount was approximately $2.2 million.  The HPB, which was calculated based on FY2000 performance, was received in FY2003.  Ms. Ford could not predict if Nevada would ever receive another HPB.  Nevada had by far the highest caseload growth of any state and the highest population growth.

 

Assemblywoman Leslie said staff analysis indicated the Division had over allocated the amount of TANF funds by approximately $7 million in each year of the 2003‑05 biennium.  The Executive Budget recommended $54.2 million in TANF funds for each fiscal year; however, only $47.7 million was available.  Ms. Ford explained that after The Executive Budget was presented, the Division realized there would be a $6.5 million shortfall in both FY2004 and FY2005.  Ms. Ford explained that the TANF budget was complex and was spread through several budget accounts.  Ms. Ford said for the first time the Division had to try and do an accounting while overspending the block grant; there had always been reserves to carry forward.  An error had been made and the Division was looking at ways to address the error, either through the reserve that would be carried forward to FY2004, through cutting expenses, or by seeking additional dollars.  A decision had not been made since the error had only recently been discovered.  Ms. Ford said the Division was working on solutions and would be presenting those solutions to the Subcommittee in future meetings.

 

Assemblywoman Chowning referred to the TANF caseloads per worker included in the handout (Exhibit H) and asked what the caseload was per worker three years ago, or five years ago.  Ms. Chowning recognized the Division staff was working extremely hard and thought the Subcommittee members would like to have historical numbers.  Ms. Ford said in February 2001 the actual number of cases‑per‑staff for the TANF combo intake, which were TANF, Food Stamps, and Medicaid, was 65 cases per staff member and was 188 cases for ongoing combo cases.  Ms. Ford indicated she would provide actual numbers to the Subcommittee.

 

Ms. Ford continued and briefly reviewed the bar graph chart detailing TANF expenditures, and revenues versus expenditures.  Ms. Ford said by the end of FY2004 there would be a shortfall of approximately $20 million and over $30 million by the end of FY2005.  The next chart included information on the budget cuts and deferrals that were implemented in FY2002 and FY2003.  The cuts in FY2002 were mainly deferrals; the cuts in FY2003 were actual reductions.  The narrative on page 6 (Exhibit H) described the savings that resulted from the deferrals and cuts for FY2002 and FY2003.  Ms. Ford said because TANF was “flat funded,” the Division did not anticipate additional funding.  Ms. Ford thought that the Legislature would have to make some hard decisions.  She referred to the “Summary Comparison of Key Provisions in Current Law and H.R. 4737” beginning on page 11 of Exhibit H.  Ms. Ford said the United States House of Representatives passed H.R. 4737 in 2002, and the bill included no increased funding for TANF and would be the same block grant Nevada had always received.  Ms. Ford predicted the plan would “go through” because of the Republican-controlled Congress.  The work hour requirements would be increased from 30 to 40 hours per week.  The work participation rate would be increased gradually up to 70 percent.  There would be a rolling caseload reduction factor.  No new child-care dollars were provided, and there was no recognition of growth.  Ms. Ford said a bill draft request (BDR) would be introduced during the 2003 Legislative Session to amend the state statute regarding TANF to provide some flexibility to comply with any new requirements.

 

Assemblywoman Leslie recognized that the “cut list” included cuts made during the 2001-2003 biennium, and asked if the Kinship Care Program, the transfer of the EA monies for child welfare, and the substance abuse prevention contracts were reduced for the 2003-2005 biennium.  Ms. Ford acknowledged that all of the cuts had been carried forward into the next biennium.  Ms. Leslie asked about the average TANF payment in Nevada and how that average compared to the national average.  Ms. Ford said for a TANF single parent the average payment since 1992 was approximately $274 a month, and Nevada ranked 37th nationally.  Ms. Leslie was concerned that a family was expected to live on $274 a month plus Food Stamp allocations.

 

Senator Mathews referred to the Kinship Care Program and asked how much payment the foster parents would receive.  Ms. Ford thought the average was $21 a day, but children below age 13 were paid at a lower rate.  Senator Mathews asked Ms. Ford to provide information on what foster parents were paid as opposed to the payment for children in Kinship Care.  Ms. Ford said foster care payments were higher than those for the Kinship Care Program. 

 

Senator Coffin asked how much would be paid for foster care for a turbulent mentally ill child.

 

Ed Cotton, Administrator, DCFS, said there were five levels of care for children with special needs and the rates varied.  The basic rate was $591 a month for a child under 12 years of age; the base rate was approximately $22 a day for a child over 12.  The rate could go up depending on the diagnosis.  Mr. Cotton said as part of the presentation on January 28, the agency could report on what kind of diagnosis fit in each of the higher levels of care. 

 

Senator Coffin felt it was important to reinstate the care of the mentally ill children and said each day mattered.  Senator Coffin asked Mr. Cotton to provide the requested information before the January 28 meeting if possible.

 

Senator Mathews asked Mr. Cotton if a foster care parent would receive more funding for a child than the Kinship Care Program would receive for the same child.  Mr. Cotton said payment for a child placed in a licensed foster care home would be based on the foster parent rate, which was higher.  Senator Mathews did not understand why the Kinship Care Program was being substantially reduced, rather than the foster care.

 

Ms. Ford pointed out the foster care program and the Kinship Care Program were funded from “different pots of money in different divisions.”  Senator Mathews said she understood the programs were different and explained that she had introduced the bill that created the Kinship Care Program.  Senator Mathews was concerned that children would be removed from a home where they knew the people and would be placed in foster care at a higher cost.  Ms. Ford pointed out that the Kinship Care Program was the highest paid grant in the TANF program and stated there would have to be a huge infusion of General Fund dollars to fund the TANF shortfalls.  

 

Ms. Ford continued the presentation and referred to cost allocation.  She said the Division was required by the federal government to allocate administrative costs across benefiting programs.  The percentage of time spent on the various programs had to be allocated so the proper programs were charged those administrative costs.  Ms. Ford said the Division conducted “random moment surveys” to determine the cost allocation plan.  The survey consisted of contacting employees in the field to collect information on specific job duties.

 

Ms. Ford referred to the supplemental request needed for FY2003.  The shortfall was projected to be $185,056 and the supplemental appropriation would cover field services and the Electronic Benefits Transfer (EBT).  Adequate funding had been projected, but with 20,000 more Food Stamp cases per month than projected, the Division was running short in the EBT.

 

Ms. Ford referred to page 8 in Exhibit H and said the main programs were TANF, Food Stamps, and Medicaid.  Child Support was a program that was 66 percent federally funded, and Ms. Ford explained that the state had to fund approximately 34 percent of the program.  Currently no General Fund dollars were allocated to the program.  The 34 percent was made up through the state share of collections for TANF.  In the first 6 months of FY2003, the Division collected $1.9 million in retained collections, compared to the first 6 months of FY2002 when $2.2 million was collected.  The Division thought the difference was attributable to the 2002 income tax rebate.  Ms. Ford said the Attorney General’s Office was sponsoring a bill to increase the fee withheld by employers for wage withholding from $3 to $5.  The revenue generated from the fee increase would be split 50/50 between the state and the county partners.  Ms. Ford said the intent was to provide a more stable funding source for the program and to help defray General Fund costs to both the county and the state.  Several years ago the child support program at the state level faced a shortfall due to inadequate collections.

 

Assemblywoman Leslie asked if the additional fees would be used as an offset.  Ms. Ford indicated the fees would be used to fund the child support program, because the grant required that 34 percent of state or county funds be used to support the program.  If the federal government required more child support to the families, there would be fewer state dollars.  Rather than coming to the Legislature to request additional General Fund dollars, the $2 fee increase would generate revenue that would fill that gap.  Ms. Ford said the state share of collections did come in higher than the need.  For FY2004 the Division projected the reserve would be approximately $883,000; for FY2005 the Division projected $1.8 million, but that included the proposed $2 fee increase.  Ms. Leslie asked about the need for such a high reserve.

 

Gary Stagliano, Deputy Administrator for Information Systems, said FY2003 had been a good year for child support collections and had resulted in a reserve.  The Division tried to establish a reserve to open each fiscal year because no revenue was received from the General Fund.  Ms. Leslie said she thought a reserve of $1.8 million was a large reserve.  Mr. Stagliano said the state had absorbed a lot of costs previously incurred by the counties due to the operation of the state’s Collections and Disbursement Unit.  With the addition of the NOMADS, the Division also picked up all of the postage costs for the counties. 

 

Ms. Ford said several initiatives came up in Child Care.  The Early Care Education Office was created; 13 centers had been accredited, and another 45 centers were in the process of being accredited.  The Child Care Apprenticeship Program had been established, along with the scholarship program.  Unfortunately, the Child Care budget was held flat and there were waiting lists for the program.  In the at-risk and discretionary category, 482 children were on the waiting list.  The mandatory participants were all being served.  Ms. Ford thought Congress would flat-fund the Child Care program even though 40-hour workweeks would be required.

 

Senator Raggio asked if the Child Care program covered families that formerly participated in the TANF program.  Ms. Ford said there were the mandatory, discretionary, and at-risk participants, and the mandatory were the New Employees of Nevada (NEON) TANF recipients.  Mandatory participants no longer receiving TANF funds would continue to receive Child Care funding as long as the eligibility requirements were met.

 

Ms. Leslie asked if it was first come first served for those on the waiting list or were the most needy served first.  Ms. Ford thought it was first come first served after the mandatory were served.

 

Mr. Stagliano said there was a mandatory group of TANF recipients who also received service and it was first come first served based on the discretionary and at-risk groups.  An important criterion was that Child Care was built on a sliding scale, excluding the mandatory group, based on income.  Sometimes family contributions offset the cost.  Ms. Leslie asked if the Division had a plan to address the waiting list, or was there an assumption that if no additional federal or state dollars were received, the waiting lists would continue to grow.  Ms. Ford acknowledged the waiting lists would continue to grow unless additional funding was provided.  In response to a question asked by Ms. Leslie, Ms. Ford said the waiting lists included 850 in southern Nevada and 650 in northern Nevada.

 

Ms. Ford addressed the Low Income Home Energy Assistance Program (LIHEA) and the new universal energy charges (UEC).  The LIHEA had changed dramatically July 1, 2002; the fixed annual credit was paid upon energy burden.  People who were eligible had to be 150 percent of poverty or below, and the annual energy usage for FY2003 had to exceed 4.27 percent of their income in order to receive a benefit.  A computer system had been established to help calculate those benefits, which were based on usage.  However, there was a backlog in the program.  Part of the reason for the backlog was a problem with computer interface between Sierra Pacific Power and Nevada Power.  The interface had been down since mid-October.  New software was being installed.  Ms. Ford hoped the backlog could be resolved as soon as the new software was operational.  Another issue that contributed to the backlog was the staffing.  The UEC limited administrative costs to 3 percent.  Ms. Ford stressed that 3 percent was not adequate to administer the LIHEA.  For FY2003 there was a housing grant, which had been able to cover administrative costs.  Ms. Ford said the housing grant would end June 30, 2003.  Ms. Ford said budget summaries and narratives were included in the back of Exhibit H.  Ms. Ford concluded her presentation and offered to answer any questions the Subcommittee might have.

 

Chairman Arberry asked if there was any public comment.  Hearing none, the Chairman adjourned the meeting at 3:52 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

Linda Smith

Committee Secretary

 

APPROVED BY:

 

 

 

                       

Assemblyman Morse Arberry Jr., Chairman

 

 

DATE:           

 

 

                       

Senator William J. Raggio, Chairman

 

 

DATE: