MINUTES OF THE meeting
of the
Assembly Committee on Ways and Means
AND THE
Senate Committee on Finance
JOINT Subcommittee on Higher Education/CIP
Seventy-Second Session
April 17, 2003
The Assembly Committee on Ways and Means and the Senate Committee on Finance, Joint Subcommittee on Higher Education/CIP, was called to order at 8:11 a.m., on Thursday, April 17, 2003. Chairman Morse Arberry Jr. presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
Assembly COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry Jr., Chairman
Ms. Chris Giunchigliani, Vice Chairwoman
Mr. Walter Andonov
Mrs. Dawn Gibbons
Senate COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Barbara Cegavske
Senator Bernice Mathews
COMMITTEE MEMBERS ABSENT:
Mr. David Goldwater (excused)
Mr. Richard Perkins (excused)
OTHER GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Assembly Fiscal Analyst
Rick Combs, Deputy Fiscal Analyst
Gary Ghiggeri, Senate Fiscal Analyst
Connie Davis, Committee Secretary
Linda Smith, Committee Secretary
DEPARTMENT OF INFORMATION TECHNOLOGY (BUDGET PG. APPENDIX-11)
CIP 03-C10-ADDITION/RENOVATION TO COMPUTER FACILITY, CARSON CITY
Chairman Arberry recognized Daniel K. O’Brien, Manager, State Public Works Board (SPWB), who introduced Mark Blomstrom, Deputy Director of the Department of Information Technology (DoIT). Mr. O’Brien said Mr. Blomstrom would be able to provide in-depth details of the projects.
Mr. O’Brien said project 03-C10 included a little more than 11,000 square feet for an addition and remodel of the existing facility in Carson City. He added that the growth of technology and the equipment required to keep up with that growth, as well as support for data processing needs, was the driving factor behind that project. The addition would provide for office space, storage, a conference room, and a break room. The renovation would address the general deterioration and overall security and life safety concerns at this facility. The agency would be consolidating the communication equipment with the communication staff and would provide a more 24/7 operation. The current operations were dispersed and were very inefficient. The addition would enhance security, disaster recovery, and consolidate the network operations centers.
Mr. Blomstrom, Deputy Director of DoIT said the handout (Exhibit C), which included pictures, would give the Subcommittee members a better idea of the existing computer facility. The facility was built in 1970 and, up to this point, had not had major renovations or upgrades, just maintenance. The building was originally built to house 20-25 people and the mainframe computer. Now the building housed 43 positions and in the last six years, two mainframe computers had been operating, and eight UNIXboxes used for the Department of Administration’s Integrated Financial System (IFS). Mr. Blomstrom added there were 28 computers that comprised a “server farm” and a PBX telephone system. The wide area network (WAN) for the state data network was housed in the building, and the building was also the termination point for cable and fiber for the entire Carson City campus.
Mr. Blomstrom disclosed the typical employee’s workspace in the building was approximately 5 feet by 6 feet. He referred the Subcommittee to pages 6, 9, and 10 of Exhibit C to exemplify the amount of equipment jammed into 14,400 square feet of space. Of that 14,400 square feet of space, DoIT was using 1,400 square feet, or 10 percent, for office space.
Chairman Arberry inquired if all the equipment pictured in Exhibit C was currently being used, to which Mr. Blomstrom replied affirmatively. The Chairman pointed out that with all the new, modern technology the machines should be smaller. Mr. Blomstrom responded that was correct, and the point had been made approximately two weeks ago by Senator Tiffany that with the advent of miniaturization, why were the existing machines so big. Mr. Blomstrom explained that some of DoIT’s equipment was smaller, but there was just more equipment than had been utilized 33 years ago – more functions, more operations, more service, more staff, more equipment. Referring to pages 14-15 of Exhibit C, Mr. Blomstrom pointed out the cramped cubicles staff were forced to work in, and some of the desks were in the hallway.
Mr. Blomstrom said the request before the Subcommittee today was basically in two parts – a renovation of the existing building, which would upgrade it, address security issues, life safety issues, seismic and retrofit issues. The second piece would address the addition to provide more work and office space. The focus of the entire project was to use and convert the more expensive existing facility into machine space. It was desirable to move people out of the existing building and into space immediately adjoining the building. The security would be upgraded to comply with federal recommendations where there was a two-ring physical layout. Mr. Blomstrom also stated the renovation would address the remaining asbestos mitigation problem, the HVAC was a problem, and the lead-based paint problem. Mr. Blomstrom referred to page 24 of Exhibit C, and stated he would turn the meeting over to Brian Spencer who would address the fiscal aspects of the bill.
Mr. Spencer stated he was an Administrative Services Officer for DoIT. In working with the SPWB, it had been estimated that the cost for the renovation of the existing DoIT building would be $5.1 million, which DoIT would pay back over 20 years, thus making the annual cost for the payback $258,000. A sample rate had been suggested to show what the impact might be. The sample rate was for the CICS cost pool and it was chosen so the Subcommittee could see what the greatest impact would be on any one cost pool. In essence, what happened was an 8 percent change in rates if the CIP project was approved.
Chairman Arberry asked for a definition of a CPU minute. Mr. Blomstrom explained CPU stood for computer processing unit. Basically, that was the processor itself and with that particular cost pool, that was a fundamental or basic charge for processing. Chairman Arberry called attention to page 24 of Exhibit C, the projected cost of $5.2 million and the annual recovery of $258,000. However, in the “cost to be recovered” column, the line item read “CICS With CIP” of 2,197,533. He asked if that was a dollar amount. Mr. Spencer answered the CICS With CIP included all of the costs for that cost pool, including the $258,000. There were other costs, for example, salaries, utilities, and depreciation on the equipment in the computer facility that was rolled into the $2.2 million figure.
Mr. Spencer continued that the second line down, “CICS Without CIP,” represented the cost if the CIP were not to be included in the cost for that cost pool. The difference between the two was approximately $170,000.
Chairman Arberry called attention to the project cost of $5.2 million and annual recovery cost over 20 years of $258,000. He asked if interest costs were built into those figures. Mr. Spencer answered that no interest was built into the cost and when the Chairman asked why, Mr. Spencer replied that historically the interest had not been included in the payback calculations. He added that perhaps that interest cost should be included in the future, to which the Chairman agreed.
Chairman Arberry inquired if General Obligation Bonds were being used for this project or some other type of bond. Mr. Spencer responded that General Obligation Bonds would be used, and the $258,000 would be recovered, or paid back, through the rates charged to the computer facility’s customers. Gary Ghiggeri, Senate Fiscal Analyst, added that he believed the SPWB had recommended the use of agency proceeds or other funds for this project, not General Obligation Bonds, and that was leading to the confusion. Mr. Ghiggeri believed all the funding for DoIT projects had been recommended using some other type of funding than General Obligation Bonds. It had been his interpretation that the SPWB would be using Revenue Bonds, funded through DoIT, and those bonds would require the payment of interest. A cash flow schedule had not been seen by staff for any of DoIT’s projects, therefore, there was not much information about the funding mechanism for those projects.
Mr. Blomstrom agreed Mr. Ghiggeri was correct. The project would not be funded using General Obligation Bonds. A cash flow analysis could be provided if that was the desire of the Subcommittee. Chairman Arberry emphasized that was desirable and asked if the Revenue Bonds would be used for all four projects. Mr. Blomstrom replied yes, that was his assumption.
CIP 03-C11 – MICROWAVE RENOVATIONS ON MOUNTAIN TOP COMMUNICATIONS SITES
Mr. O’Brien referred to the next CIP project, microwave renovations on mountaintop communications sites. This project would be the replacement of aging equipment, shelters, generators, tower improvements, and such, at Virginia Peak, Montezuma Peak, TV Hill, and the Pinenut Peak sites. The existing towers and support structures were substandard and did not meet industry standards. Those were mountaintop sites, Mr. O’Brien explained, and there were a lot of issues such as wind and snow that caused problems. A 1967 generator failed and the roof blew off one of the older structures. The facilities were very critical to the support of communications systems for the Nevada Department of Transportation, Highway Patrol, Division of Forestry, Department of Wildlife, Emergency Management, and other state agencies. There were photographs of some of the sites in Exhibit C.
Mr. O’Brien commented that when those photographs were shown to the SPWB, it was very interesting to see the conglomeration of facilities on the mountain sites. Referring to the building costs, Mr. O’Brien said there were two amounts, one for construction and one for DoIT labor and transportation. He believed the last project used DoIT labor, but it did not work out very well. Although he could not address the specific problems, DoIT was now requesting that all the work be contracted out. DoIT would provide the oversight regarding their equipment and the installation, but a contractor would do the work. Therefore, those two dollar amounts would be joined and rather than having construction costs of $444,000 and DoIT labor costs of $358,000, there would be a total project cost of $802,000.
Chairman Arberry asked why the funding would need to be transferred from the project to DoIT and DoIT would be responsible for the repayment of the project cost. Mr. Blomstrom indicated that would be part of the bond and the money could be accessed in any fashion. He did not believe the money needed to be specifically transferred into existing DoIT accounts. In the past two bienniums, a budget account was set up with the Department of Administration, Budget Account 1320. In the upcoming biennium, the account would be number 1325, and Mr. Blomstrom assumed the funding, in terms of access, would be handled in the same way.
Chairman Arberry pointed out that a cost breakdown was not included in Exhibit C. Mr. O’Brien indicated he had a cost breakdown and could provide that information to the Subcommittee. Senator Raggio asked that a breakdown be provided for each site. Mr. O’Brien said the cost for Virginia Peak would be approximately $220,000; Montezuma Peak was $190,000; TV Hill was $190,000; and Pinenut Peak would also be $190,000. Chairman Arberry inquired if those costs included the Stewart microwave, to which Mr. O’Brien responded it was a separate project.
Mr. O’Brien called attention to Exhibit C, pages 28, 29, 31, and 32, and pointed out how some of the facilities had been converted – trailers mounted on railroad ties. Some interesting structures had been constructed over the years to meet the needs. However, it appeared those structures had been shot at, and people attempted to break into them. Mr. Blomstrom added that the structures were primarily Sea Land trailers or other trailers from the Vietnam era and were surplused in the early 1970s when the state got them for a song. The state of Nevada placed those facilities on mountaintops in the early 1970s and it was a noble effort done on a shoestring budget. Many of the buildings were placed on railroad ties and tied to the ground with cables. The buildings were deteriorating and simply “melting into the mountaintop.” The structures had leaks and when high winds blew in excess of 100 miles per hour, the entire frame would shake, twist, and warp. The equipment inside was exposed to moisture and some of the vans were very difficult to heat or cool. Mr. Blomstrom also said the trailers were vulnerable to damage and in one case, vandals had peeled back the skin on the van.
Chairman Arberry inquired why there were no security fences around the area. Mr. Blomstrom said that was a good question. If the funds were available to do this project correctly, security fences would be erected. Chairman Arberry asked if the DoIT staff could break out the additional costs to put up a security fence to deter the vandals. If the cost would not be that much, the Chairman felt the funding could be added after looking at some of the engineering, architectural, and inspection fees.
CIP 03-C13 – STEWART MICROWAVE
Mr. O’Brien explained that the project was the extension of the state’s communication backbone to the Stewart Complex. The project would serve buildings 89 and 17 and there had been a discussion just before the meeting about serving the State Fire Marshal at the Stewart facility. There was no connection to the Fire Marshal at the present time, and with the renovation of building 17 and a new roof on building 89 and the other upgrades, the agencies needed to be tied to the state system and this would be the project to get the communications extended. Some of the project costs had been reviewed, continued Mr. O’Brien, and there were a few costs that were questionable, such as the Life Safety Plan Check. There was a possibility that some of those items would be deleted because if it was just a matter of extending communication cabling, the cost would be unnecessary.
Mr. O’Brien said there was a cost included for Data and Teleplan check inspection, and it was his understanding that DoIT typically charged for those checks; however, the SPWB would negotiate with them as it was not necessary for DoIT to be paying for a plan check of their own project. Mr. O’Brien reiterated this project would distribute the system to the Stewart Complex and was a project the SPWB requested and supported.
Chairman Arberry questioned if there was a construction cost breakdown. Mr. O’Brien said he did not have a breakdown, but it could be provided to staff by the end of the week.
CIP 03-M46 – BUILDING SECURITY ENHANCEMENTS
Mr. O’Brien explained this project was to install a security card swipe system at the four DoIT locations for the protection and safety of the DoIT employees, visitors, and the critical information systems maintained within those buildings. Mr. O’Brien explained certain costs for the project were being reviewed and would possibly be adjusted referencing plan check fees.
Mr. Blomstrom added security needs at the various DoIT locations had increased over the last few years, specifically, the facility housed a great deal of data pertaining to the state and DoIT was responsible for the safeguarding of that data. There had also been a need to increase physical security and there was a need to track the coming and going of personnel. Presently, some of the facilities only had button-lock doors. The proposed card swipe system would be used for both entry and exit, although there would be push bars on the inside of the doors for fire escape purposes. The system would have a log to note when a person entered the premises and when they left and that could not be done on an automated basis at the present time.
Chairman Arberry understood DoIT was leasing the facility at Curry Street and Mound House and asked what would happen to the system when the agency moved to other facilities. Mr. Blomstrom answered that was correct, however, the actual hardware could be removed, as it was not very large. The data connections would be made over existing data connections to those two locations, so it would not be difficult to move the system.
Chairman Arberry inquired if there was a plan to fund the security system with bonds. Mr. O’Brien responded it would be through Revenue Bonds, not General Obligation Bonds.
Senator Raggio inquired where the revenue was obtained for the Revenue Bonds for this project. Mr. Spencer answered the enhancement would be funded through billings to DoIT customers. For example, the Kinkead Building served the DoIT director’s office, the planning unit, and the data communications unit. They would each pick up a piece of this project. The Curry Street facility had programmers, the telecommunications unit, and they would each pick up their share of the cost. Senator Raggio asked for a breakdown of the potential revenue sources for servicing those bonds. Mr. Blomstrom indicated they could provide that information. He understood that request to be a breakdown of the source of payback within the DoIT budget.
Chairman Arberry recognized Robin Reedy, Deputy Treasurer for Debt Management, Office of the State Treasurer, who clarified information regarding the discussion about General Obligation Bonds. Ms. Reedy indicated the agency did reimburse the Bond Interest and Redemption account, and the funds were transferred over. It was not truly a revenue bond because revenue bonds had a higher interest rate. The bond was issued at the lower General Obligation Bond tax-exempt rate, and the agency reimbursed the fund according to a schedule that was normally established by the Legislature. In the past two bienniums, Ms. Reedy stated, when a project was finished, a certain percentage came into the interest and redemption account.
Senator Raggio pointed out that in the budget presented to the Subcommittee, those items were not shown as state funding items, but as other funding. There was a need for clarification because if General Obligation Bonds were used and there was a repayment, the repayment would have to have interest included because the General Obligation Bonds paid interest. He asked that the schedule be checked again and the Subcommittee be informed exactly how the payback would occur and in what amounts. If General Obligation Bonds were actually used, as suggested by Ms. Reedy, the payback provision must equate to the amount of the cost to service the bonds.
Ms. Reedy acknowledged there may be more projects than she was aware of, but for the ones which currently were funded through bonding, a schedule was set up once the project was complete, a certain percentage of the project was paid based on calculations determined at the end of the project, and the payment collected over a period of time that had been set forth for the Treasurer’s Office. The Treasurer’s Office had never been involved in setting up that process. Senator Raggio commented that he did not understand the process and asked that a one-page explanation be prepared to show how the process functioned with the General Obligation Bonds, the payback, Revenue Bonds, and such. He would like to understand how the process worked in the long run. Senator Raggio felt the Legislature needed to have a firm hand on how this was being funded.
Ms. Reedy indicated she would be happy to provide an explanation of how the process had been handled in the Treasurer’s Office in the past, following guidelines from the Legislature and then working with DoIT as to how the agency planned to fund the project so there was no confusion. Mr. Blomstrom added that DoIT would be happy to work with the Treasurer’s Office to prepare an explanation for Senator Raggio.
Rick Combs, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained that last session the Governor’s recommendation for general funding for maintenance projects was reduced by a couple of million dollars. The DoIT projects which the Governor recommended to be funded with General Funds were instead funded with General Obligation Bonds. That was an unusual situation to fund maintenance projects with bonds, but since it was a DoIT account, the requirement was simply added that DoIT would have to pay the principal back to the bond interest redemption account. There was a difference last session, however, because those bonds were considered General Obligation Bonds and they were counted as state funding. Mr. Combs explained when a determination was made as to how much funding was available for that CIP program from General Obligation Bond issuances, that sum was counted as part of the state funding used for that portion. In this particular program, it appeared to Mr. Combs that DoIT was not counting this funding as the portion that would be paid through the property tax rate. DoIT still said it would be a General Obligation Bond, but instead of paying for it through the property tax rate, it would be paid by transfers from DoIT to the Bond Interest and Redemption account. If DoIT was going to fund the project in this manner, they should be paying the interest.
Senator Raggio commented the value of the payback was that not all the money would come from General Fund agencies; it would come from other agencies as well. He reiterated his request for an explanation in a narrative form. Mr. O’Brien said he would be happy to provide that information.
DEPARTMENT OF CORRECTIONS
CIP 03-M16 – MONITORING CAMERAS – WSCC, CARSON CITY
Mr. O’Brien indicated the next project was for monitoring cameras at Warm Springs Correctional Center in Carson City. Warm Springs originally was the women’s correctional center and converted to a men’s facility in 1997, and the facility needed additional security upgrades. The monitoring cameras were a method of providing security for the fenced-in areas. Mr. O’Brien introduced Glen Whorton, Assistant Director, Operations, Northern Nevada, Department of Corrections (DOC), who could give a better description of the needs at the facility.
Mr. Whorton said project M16 was a security upgrade for the Warm Springs Correctional Center. That institution was originally designed and developed as a women’s facility in 1963 and had grown incrementally. Originally, the institution asked for a tower to be placed on the northwest corner of the facility, near the administration area. That was an area where there was just a single fence and the spot was a dark area of the institution. Mr. Whorton felt the fence alone was inappropriate, especially given the change of the institution to a minimum custody facility. This was the most urbanized camp and it would house 550 inmates. Therefore, he felt the security system would be an important upgrade at the institution.
Chairman Arberry pointed out that since the facility was downgraded from a medium to a minimum security facility, would the cameras still be required. Mr. Whorton admitted the need was not as critical now as it once was. Given the difficult financial times and the choices that needed to be made, this was a request that the Subcommittee might want to consider. The Chairman said he appreciated Mr. Whorton’s candid remarks and asked if the cameras were installed, who would assume the responsibility of monitoring the cameras. Mr. Whorton responded there would still be a central control area at the institution, even though it was a minimum custody facility.
CIP 03-M17 – INSTITUTION RENOVATION – NNCC, CARSON CITY
Mr. O’Brien called attention to M17, which was a request for renovations at the Northern Nevada Correctional Center, and stated that funding for the project was reverted in 1995 and again in 2001 because of a revenue shortfall. Mr. O’Brien referred to Exhibit D, which contained pictures of the areas requiring renovation, which included showers, restrooms, windows, and so forth.
Mr. Whorton agreed that the pictures in Exhibit D were very demonstrative. The units were designed and built in 1963 as a minimum custody facility and had nearly always been used as a medium security facility. It was a dormitory style building with extremely heavy use. When Mr. Whorton made his way through the facility, the complaints from the inmates were not about the operation of the facility, but the physical aspects of the housing areas as shown in the photos. The windows were not secure as the facility was originally designed as a minimum custody facility and the population was not controlled in any way.
Senator Raggio referred to Exhibit D and said it was obvious from the pictures that there was a need for renovation. He inquired what would happen with the inmates while the renovations were taking place. Mr. Whorton responded that because it was a dormitory-style facility, the inmates did have the ability to move around the unit and shower activities could be provided in two wings of the unit while one wing was being renovated. Additionally, the windows would be fixed on a daily basis. Mr. Whorton said the contractors would work on a particular dormitory during the day and complete it at night so the rooms would be available to the inmates. The renovation program would not have an impact on the institution according to the plans developed by the SPWB.
Senator Raggio directed his comment to Mr. O’Brien and said the SPWB had expended some funds from the previous fiscal year in 2002, but the funds were then cancelled. Mr. O’Brien indicated that was correct. Senator Raggio asked if the amount for project management should be reduced somewhat because funds had already been expended for the project manager. Mr. O’Brien agreed and wondered exactly how much work was done. The SPWB had hired the architect and executed the contract with the architect, then the project was put on hold and the contract was cancelled. It was very possible the project could be resurrected rather than starting all over. Senator Raggio suggested that be looked into.
With respect to the unexpended funds that remained in CIP project 01-M33, Senator Raggio said that staff had indicated the Controller’s database showed $47,825 remaining in that project account. He inquired why that amount remained when the project was cancelled, and could that funding be reallocated to this project.
Evan Dale, Deputy Manager, Administration and Finance, State Public Works Board, explained that the money remained in that project account to cover an obligation that had been written out of the project. Since that time, paperwork had been processed to cancel that obligation. Therefore, that money could be reverted or allocated to fund other projects. Senator Raggio commented that either way, the funding could be used on the M17 project to lessen the overall cost.
Senator Raggio called attention to the architect and engineering design and supervision fees and asked if those funds could be reduced. Design contracts were executed prior to the cancellation of CIP projects 01-M31 and M33. Mr. O’Brien said it was his understanding that a contract was entered into, but no work had been done on the project. However, he would look into the matter because if work had been done, the SPWB did not want to pay for something twice.
Mr. O’Brien pointed out that this project, M17, was the number two priority for the Department of Corrections (DOC). He was aware the Subcommittee had asked for a priority list, and M17 was number two. Senator Raggio pointed out the last priority list from staff had shown this project to be number 10 out of 72 projects. Mr. Combs explained the information in the highlights stated the priority number for all CIP maintenance projects, whereas Mr. O’Brien was referring to the DOC priority list.
CIP 03-M18 – EXERCISE AREA SECURITY IMPROVEMENTS – HDSP, INDIAN SPRINGS
Mr. O’Brien commented this project was located at High Desert State Prison; units 1 and 2 were paired together and the secured exercise areas needed to be separate to protect inmates during their exercise periods.
Mr. Whorton added this project was for units 1 and 2, which were for close custody, administrative segregation units. High Desert State Prison was the largest institution and was the entry center in the southern part of the state. Some inmates required protection and some inmates required control because they were in Las Vegas to attend court hearings. Included in this group were maximum security prisoners, people with a high potential for violence or with a high potential for victimization. Mr. Whorton said the development of that fencing would afford the Department an opportunity to provide appropriate security for those individuals, both for protection and control. Mr. Whorton indicated he would be amenable to providing a work force for the completion of the project, if required.
Chairman Arberry asked when the exercise pods would be constructed. Mr. O’Brien responded the project was pretty straightforward fencing work, and could be put together fairly quickly. He believed the work could be done early in the biennium.
CIP 03-M19 – RELOCATE WATER LINES – SDCC, INDIAN SPRINGS
Mr. O’Brien explained that currently this facility had water lines located over electrical lines and transformers within the unit. It was definitely an unsafe situation and was classified as priority three by the Department. Mr. O’Brien strongly suggested this project be done because of the safety issues.
Chairman Arberry inquired about the increase in cost. Originally, the Governor had recommended $57,000 and then on April 14, a project cost increase of $72,000 was submitted. Mr. O’Brien responded that the increased costs were in the construction costs breakdown. Originally, the total was $33,000 and had risen to $45,000 when a project manager provided new information after he had more thoroughly reviewed the project. Chairman Arberry asked the information be provided to staff.
CIP 03-M-20 – GROUNDWATER PROTECTION – HCC & CCC, WINNEMUCCA AND CARLIN
Mr. O’Brien explained this project was for a new denitrication treatment plant at the Humboldt Conservation Camp (HCC) and two monitoring wells at the Carlin Conservation Camp (CCC). The Nevada Division of Environmental Protection (NDEP) had issued a new wastewater treatment discharge permit and there were conditions on that permit that prompted this capital improvement project. The Carlin Conservation Camp had sewage treatment through a grease interceptor or grease trap, into a septic tank, and then into a leach field. NDEP required that two groundwater monitoring wells be installed.
Mr. O’Brien said the effluent system at Humboldt was one of the bigger parts of this project, and the upgrade and lining of the sewage ponds at Carlin was another significant item. Mr. O’Brien asked if there were any specific questions for the agency.
Senator Raggio inquired what was happening in Jean, as there was $400,000 on the project cost estimate. Tom Glab, Chief of Plant Operations for the Department of Corrections, explained that the NDEP had required the DOC to reline the sewage ponds used at HCC. Although Mr. Glab did not know the exact age, he believed the pond liners were original and made from asphalt. Testing had been completed at the request of the NDEP to see if the liners met with current specifications, which they did not. Therefore, the NDEP has required that the ponds be relined.
Senator Raggio noted that in 1999, $150,000 was authorized to repair cracks in the linings and to replace the diversion valves for the sewage ponds. Mr. Glab said the projects were close, but not quite the same. The cracks were in ponds 1 and 2, and those ponds had not been used in over 12 years. The asphalt now looked like an abandoned parking lot with weeds growing through the surface. Those ponds would be repaired as well as the diversion valves in the original project that was authorized in 1999. At the time of the original project, it had not been anticipated that ponds 3 and 4 would have to be relined; therefore, the request was made for this project. Mr. O’Brien added that because of the NDEP requirements, this project had been assigned number one priority by the Department. It was a situation where the Department did not have a lot of choice and could be issued a citation if the work was not done.
CIP 03-M34 – WATER SOFTENERS – LCC, LOVELOCK
Mr. O’Brien explained this project was for the installation of water softeners at six housing units and the culinary at Lovelock Correctional Center. Softeners would be provided for domestic hot water heaters and evaporative coolers at the housing units and would minimize mineral deposits that were building up on plumbing fixtures and on the evaporative cooler media. The Department’s facilities group was looking at water treatment to extend the life of facilities at the institution. This request to install water softeners was not just to make the water soft for the inmates, but to extend the life expectancy of the equipment. This was priority eight for the department, because without the softening treatment, the life expectancy of the equipment would be reduced and equipment would have to be replaced.
Chairman Arberry stated a major concern with this project was the high cost of security and access, and asked if there was a way to reduce those costs. Mr. O’Brien responded there were two security costs; one for the Department of Corrections to provide security during the construction period and the other security cost was an allowance for the contractor. The contractor would be required to provide additional security and their bids would come in higher. There was not much consistency in the construction cost estimate because security costs differed from one area to another and was something which needed some attention. Nevertheless, the costs were broken down in the construction cost estimate with the Department of Corrections prison security listed under the construction cost breakdown and the security cost listed was a 20 percent allowance for security for the contractor. Actually, the figures should have been reversed, commented Mr. O’Brien.
Mr. O’Brien was unsure whether all those security costs would be needed, but the Department would require the contractor to carry out a certain number of safekeeping measures to maintain their security when coming into the facility and that would be reflected in their contract or bid to the SPWB. When the contractor was on-site, increased security had to be provided and that funding request offset the cost for the prison guards. Mr. O’Brien indicated the agency might be able to provide more information.
Chairman Arberry stated he just wanted an explanation and to know whether the cost could be reduced. Mr. O’Brien added the cost was a line item in the project and the contractors would have to include the security costs in their bids. If a lower bid was received, the cost could be reduced, and it was very possible the cost may be eliminated. Hopefully, when the project went out to bid, the whole price would come in lower, as the cost was based on a percentage. Chairman Arberry remarked that was a good point. He conferred with Mr. Combs and asked from the DOC’s standpoint if there were certain specifications for the contractors to help them base their costs. Mr. Whorton responded that when those projects were sent out for bid, pre-bid meetings were held and the DOC would indicate what specific things would have to happen in terms of requirements for bringing in materials, tools, and getting their staff cleared through the National Crime Information Center (NCIC).
CIP 03-M35 – INSTALL HEAT EXCHANGER – HDSP, INDIAN SPRINGS
Mr. O’Brien noted that M35 was to install a heat exchanger on the cooling system at the High Desert State Prison. This project would install a new plate heat exchanger in the chilled water system at the central plant at Indian Springs. The existing chillers were cycling excessively in a low load condition which would lead to premature failure. The plate exchanger would reduce the cycling of the existing chiller.
Mr. O’Brien commented there was no security allowance on this project because it was located outside the secured area and, therefore, was not an issue on this project.
CIP 03-M36 – SERVICE COOLING TOWERS – SDCC, INDIAN SPRINGS
Referring to M36, Mr. O’Brien apprised the members this project was to replace the tower and heat exchanger, renovate the tower, and add a water treatment system to the facility. The SPWB had been reviewing the security on this project and it appeared the security allowance on this project could possibly go down or be eliminated because the project was located outside the fence. However, the project manager had added security, but it appeared the cost could be revised by removing the security allowance.
The project was to replace a failed 20-year-old tower and renovate the 12-year-old tower that remained. It required new media because it was in poor condition. The heat exchanger would need to be replaced and a water treatment system installed, which was similar to the water treatment system discussed earlier for Lovelock and other institutions to prolong the life of the water systems. Mr. O’Brien offered to provide the Subcommittee with a revised estimate sheet removing the security allowance.
CIP 03-M37 – REPAIR CONDENSATE RETURN SYSTEM – SDCC, INDIAN SPRINGS
This project, stated Mr. O’Brien, was number four on the priority list for the Department of Corrections, and the task was to repair the condensate return system. Currently, the line that ran between the facilities was leaking and the source of the leak had not yet been determined. There was a tremendous amount of loss to the system and Mr. O’Brien said he felt the Department would like to discuss the issue because this was a direct burial line that went from one facility to another and was leaking. The loss of energy did not allow for water treatment because the treatment would essentially be pumped into the ground. This project was something that was very much needed and the Department could explain why it was number four on the priority list.
Chairman Arberry referred to projects M36 and M37 and the cost savings that could result from combining the projects because they both involved heating, cooling, or water treatment at the Southern Desert Correctional Center. He asked why they were not combined into one project. Mr. O’Brien agreed those two projects could be combined and there could be some cost savings, if so directed by the Subcommittee. Chairman Arberry asked him to do so and to provide a new cost estimate for the combination of the two. Mr. O’Brien agreed to provide a new estimate.
CIP 03-M38 – UPGRADE PEDESTRIAN ENTRANCE AREA – SDCC, INDIAN SPRINGS
Mr. O’Brien explained that project M38 was to upgrade pedestrian entrance areas to the Southern Desert Correctional Center, and the funds were being requested to upgrade the entrance way that regulated pedestrian traffic. The three sliding doors in the control room were 20 years old, they had heavy traffic and the door controls were failing. Door failures often occurred during shift changes and it took staff time to resolve the problem. This was a project previously requested as 01-M38 and was reverted because of a revenue shortfall.
Chairman Arberry asked why approximately $4,000 remained in the project account for M38 after it had been cancelled and if the remaining funds could be reallocated to fund a portion of the costs for this project. Mr. Dale of the SPWB responded this was money held in the account to cover an obligation. He was unable at the moment to say if the obligation was cancelled or if the money was still owed to someone. However, Mr. Dale said he would investigate the matter and if the obligation could be cancelled, that money would be available for this project.
CIP 03-M39 – GENERATOR IMPROVEMENTS – HCC & WCC, WINNEMUCCA AND WELLS
Mr. O’Brien remarked this project was ranked priority number 12 by the Department and was to install load banks on the generators at the Humboldt and Wells Conservation Camps. He indicated staff reviewed the plan check fees associated with this project. The project managers were conservative and wanted to make sure nothing was missed, but it was felt Americans with Disabilities Act (ADA) plan check was not necessary on the installation of a load bank. Therefore, that cost would be modified and reduced, said Mr. O’Brien. The load banks would be used to operate the generators at their optimum range.
Tom Glab, Chief of Plant Operations for the DOC, explained that normally those generators were “exercised” in order to ensure they were running properly. However, when the generators were run, they were run at such low efficiency that they were actually being damaged. To prevent any damage from happening, an artificial load or load bank would be used to “ramp up” the generator to operate in a high efficiency mode. The generator would not be damaged and would have a longer life.
Senator Rawson pointed out there were a lot of generators used in the state and asked why the load banks were not used in every generator when it was installed. Mr. O’Brien disclosed the same thought had occurred to him when he was reviewing the projects more closely, and wondered why this equipment had not been installed originally in a 1999 CIP. The only answer he was able to find was that at the time, there were some changes with the electrical engineer on staff and the equipment was not speculated out in the original design. In the future, this was an item which must be scrutinized more carefully as it should have been included in the original project.
CIP 03-M40 – REPAIR CULINARY LOADING DOCK – PCC, PIOCHE
Mr. O’Brien said project M40 was the repair of the culinary loading dock at the Pioche Conservation Camp. This was a lower priority for the Department, number 17, but it was causing problems because, as the facility was currently designed, there was water intrusion underneath the loading dock slab. In fact, Mr. O’Brien pointed out, it was not actually a loading dock, but more of a ramp, and when water froze, there was not proper drainage underneath, the slab would lift, and the swinging doors hit the slab and either the doors could not be opened or the doors drug on the slab. This project would prevent the problem in the future by repairing the concrete and providing for adequate drainage.
Mr. O’Brien reiterated this was not a priority but a project that would need to be taken care of eventually.
Chairman Arberry again called attention to the prison security costs and asked why security costs would be necessary to the repair of the loading dock at a conservation camp. Mr. O’Brien explained the prison security cost was an all-inclusive security cost for the contractor as well as for the agency. He admitted he was not familiar with the facility, but possibly the Department could address whether there was a security issue. Obviously, if there was no security issue, the cost could be eliminated, but whenever work was taking place inside the fenced area, there was a security issue.
Mr. Whorton pointed out Pioche was a conservation camp, a minimum custody facility and inmates were out with heavy tools themselves; therefore, that would be a potential reduction in the project cost. Mr. O’Brien agreed that the cost could be eliminated.
CIP 03-M48 – GUN POST WEATHER ENCLOSURE – NSP, CARSON CITY
Mr. O’Brien said this project was number six on the Department’s priority list, and was for a gun post weather enclosure at the Nevada State Prison (NSP). He referred the Subcommittee to the pictures and other information provided by Mr. Whorton of the DOC in Exhibit D, who could describe the situation in more detail.
The Chairman recognized Glen Whorton, who called attention to pictures in Exhibit D showing the gun post that overlooked the exercise area for the administrative segregation units at NSP. He pointed out the exposed nature of the gun post. Senator Raggio stated the pictures were indicative of the problem and there was not much to discuss. Mr. Whorton added that when considering this project, there might be some alternatives with prefabricated units that could reduce the cost. Senator Raggio said if the costs could be revised, that would be fine, however, the need was apparent.
Senator Rawson called attention to the “Sky Watch,” a mobile gun post illustrated in Exhibit D, and asked if there were gun ports. Mr. Whorton indicated there were, but this was just an example of what might be used, but not necessarily the unit the Department wished to purchase. Senator Rawson said he did not have any question about the need, but the cost was approximately that of an average home in Nevada. It seemed that an adequate enclosure could be done for less money.
CIP 03-M49 – REPLACE CELL DOORS – NSP, CARSON CITY
Mr. O’Brien explained M49 was to remove and replace the existing cell doors in housing units 6 through 9 at the Nevada State Prison. There were many damaged doors and this project was to replace the 48 worst doors and door jambs. Apparently, the locks were new, so they would be removed and installed in the new doors.
Senator Raggio noted the cost had recently been revised and now the project would cost $155,178. When asked the reason for the increase, Mr. O’Brien said it was a new revision on the construction cost after a more thorough review. Senator Raggio inquired what had changed to increase the cost by $34,000. Gus Nunez, Deputy Manager, Professional Services, SPWB, added that when the project manager reviewed the project, he determined there would be additional costs in the demolishment and facing part of the project and, using his best judgment, the manager felt a higher construction cost was required. Senator Raggio requested more detail to enable staff to concur on the increased cost and Mr. Nunez agreed to provide that information.
Senator Raggio asked how much it would cost per door to make those repairs. Mr. Nunez said the cost per door was approximately $2,500, along with some additional expenses. Senator Raggio questioned why the doors were so expensive. Mr. Whorton advised those were security doors in a medium security institution, and the doors were originally designed when the institution was the maximum security prison for the Department. Those doors and locks were typical correctional hardware and were very expensive. That was one of the reasons why the locks were being removed from the existing doors for use in the new doors. If the doors were that expensive, Senator Raggio inquired why the doors warped. Mr. Whorton responded it was because of the constant use and the nature of the population. That institution housed an aggressive population of inmates, and was considered a “hard medium” population.
CIP 03-M69 – RELOCATE EXECUTION-LAST NIGHT CELL – NSP, CARSON CITY
Mr. O’Brien noted this project had been reviewed by the SPWB and the DOC, and there was a possibility that some of the costs could be reduced based on the review by the Assistant Director of the DOC. It was possible that prison labor could be used to do some of the work.
Chairman Arberry inquired if this project was still part of the Governor’s recommended CIP program. Mr. Whorton replied it was still part of the program, the DOC had not received any different information. Upon questioning by the Chairman, Mr. Combs stated there was a newspaper article in the Las Vegas Sun in late March that indicated the project had been eliminated.
Mr. Whorton commented there had been some confusion in the article. There were discussions with the Warden at NSP and indications of ADA concerns. The ADA concerns were obviously not for the inmate who was going to be executed. Exhibit D included photographs that showed access to the current execution chamber and the concerns were for the witnesses that were required to be present for that activity. The execution chamber was in a very inaccessible area, up a dark, gloomy stairway and not appropriate for witnesses. There was a photo of the external stairs of expanded metal, which were extremely treacherous during the winter. The project was to locate the chamber on the first floor and Mr. Whorton said he felt a significant reduction in the cost could be achieved. The original plans called for concrete block; that was not necessary. The agency had the steel to construct the last night cell, as well as the labor and expertise to do the project within the agency, and the cost could be reduced to $75,000 from the original $200,000.
Chairman Arberry indicated that the cost reduction would be acceptable. Mr. O’Brien added he would work with the Department on a revised project budget to be provided to staff.
CIP 03-M70 – REPAIR AND UPGRADE EXERCISE AREAS – HU 1-8, ESP, ELY
Mr. O’Brien apprised the members this project was for repair and upgrades to the exercise areas in housing units 1-8 at the Ely State Prison (ESP). The Department had requested maintenance funds to upgrade the existing exercise areas. Currently, the concrete flooring was breaking up and exposing steel rebar that could provide material for weapons to the inmates. This project was originally 01‑M30, and was reverted due to a shortfall.
Chairman Arberry observed this was the same situation as with some of the other projects that had been reverted. A balance of $13,000 remained in the project account for M30, and since the project was cancelled, could the remaining funds be reallocated to fund a portion of the cost of this project. Mr. O’Brien contended that with all those reversions, the projects were stopped as quickly as possible, including contracts that were underway with architects and designers. The agency would review those projects and provide information to the Subcommittee to verify the status of the reversions. In many cases, if the state was involved with contracts, there might have been outstanding billings of which they were unaware. Therefore, money would have been left in the project account to cover those billings until a revised and complete final billing was received from the consultant. Staff would be provided with the results of that review.
Chairman Arberry referred to the increase in construction costs and asked why there was a 13.6 percent increase since the project was approved by the 2001 Legislature. Mr. O’Brien indicated he could provide a breakdown, but he was sure it was because of inflation and reviewing and verifying the project. The Chairman asked that the security costs be explained as well.
CIP 03-M71 – CULINARY REPAIRS – LCC, LOVELOCK
Mr. O’Brien said this project was to remove and replace the existing tile flooring in the bakery and repair the floor in the walk-in cooler. The floors and walls of the culinary had been deteriorating, there was a problem with mold and tripping hazards, and therefore required replacement of the flooring. A construction cost breakdown had not been originally provided but would be transmitted to the Subcommittee for the $200,000 in current costs and would include the breakdown for the cost of repairing the cooler floor, the bakery, and the rest.
Chairman Arberry inquired about the need for an additional oven, as the bakery was functioning without one at the present time. Mr. Whorton said he had spoken to the managers at the Lovelock Correctional Center and they indicated they could forego the proof oven.
Mr. O’Brien responded affirmatively when asked by the Chairman for a breakdown on the construction and security costs.
There being no further business before the Subcommittee, the meeting adjourned at 9:25 a.m.
RESPECTFULLY SUBMITTED
Reba Coombs
Transcribing Secretary
APPROVED BY:
Assemblyman Morse Arberry Jr., Chairman
DATE:
Senator William J. Raggio, Chairman
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