MINUTES OF THE meeting

of the

Assembly Committee on Ways and Means

AND THE

Senate Committee on Finance

JOINT Subcommittee on K-12/Human Resources

 

Seventy-Second Session

April 24, 2003

 

 

The Assembly Committee on Ways and Means and the Senate Committee on Finance, Joint Subcommittee on K-12/Human Resources, was called to order at 8:12 a.m., on Thursday, April 24, 2003.  Chairwoman Sheila Leslie 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:

 

Ms. Sheila Leslie, Chairwoman

Mrs. Dawn Gibbons

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

 

Senate COMMITTEE MEMBERS PRESENT:

 

Senator Raymond D. Rawson, Chairman

Senator William J. Raggio

Senator Barbara Cegavske

Senator Bernice Mathews

 

STAFF MEMBERS PRESENT:

 

Steve Abba, Principal Deputy Fiscal Analyst

Larry Peri, Senior Program Analyst

Bob Atkinson, Program Analyst

Julie Brand, Program Analyst

Catherine Caldwell, Committee Secretary

Lila Clark, Committee Secretary

 

 

Chairwoman Leslie called the Joint Subcommittee on K12/Human Resources meeting to order at 8:12 a.m.

 

BUDGET CLOSINGS

 

HUMAN RESOURCES

CHILDREN’S TRUST ACCOUNT 101-3201 BUDGET

PAGE HR ADMIN-12

 

Larry Peri, Senior Program Analyst, Legislative Counsel Bureau, introduced Budget Account 101-3201 and explained that the budget account had two funding sources.  The primary funding source was from a $3 fee imposed on Nevada birth and death certificates, and the secondary source was a federal Child Abuse Prevention and Treatment Act grant.  Funds were awarded and administered under the guidance of the Committee for the Protection of Children to fund child abuse and neglect prevention services.  The closing issue for the Subcommittee’s consideration in that account was the proposal to eliminate the Children’s Trust budget account and transfer it into the proposed Grants Management Unit within the Director’s office of the Department of Human Resources.  All costs and expenditures would be transferred to the Grants Management Unit.  He said that if the Subcommittee chose to close that budget as recommended by the Governor, the Legislative Counsel Bureau staff recommendation was that any necessary adjustments to that budget account would be considered when reviewing the closing of the Grants Management Unit budget.

 

Mr. Peri said that there were two closing items to consider when the Grants Management Unit budget came up for closure.  First, the Department of Human Resources (DHR) indicated to fiscal staff that the Committee for the Protection of Children had recommended that the reserve category be reduced in each year of the coming biennium, and that total grants be increased by $160,000 in each year.  The second item was that at the February 18^th Interim Finance Committee (IFC) meeting, the DHR requested to move $300,000 from the reserve category to the Child Abuse Prevention Grants category to fund the statewide child abuse prevention campaign.  The IFC deferred the request primarily because the DHR had not submitted a plan for the expenditure of funds.  In discussions with fiscal staff, the DHR indicated that they would not pursue that request as a closing action but might approach the IFC during the coming biennium.

 

Mr. Peri said fiscal staff proposed that the technical adjustments be made in the closing of the Grants Management Unit.  If the Subcommittee approved the budget as recommended by the Governor, today staff would recommend making an adjustment in that budget’s administrative costs allowances.  Mr. Peri said there were two separate administrative costs allowances.  The federal grant had a 20 percent administrative allowance while the birth and death certificates allowed a 5 percent administrative allowance.  The budget as currently built exceeded those administrative allowances by approximately $15,000 to $18,000 in each year of the coming biennium.  He noted that fiscal staff was discussing with the DHR the potential adjustment to correct the over allocation of administrative allowances.  Mr. Peri added that staff had prepared for Subcommittee review an accounting of the grants made from that budget account in FY2002.  He concluded and said that if the Subcommittee would agree, the listed adjustments could be addressed when they closed the Grants Management Unit.  Fiscal recommended that the Subcommittee consider closing that budget as recommended by the Governor.

 

Assemblywoman Giunchigliani asked for clarification regarding the 20 percent and the 5 percent excess allowances that resulted in over budgeting of the administrative allowance by $15,000 to $18,000.

 

Mr. Peri said he did not have a breakdown with him but, per staff’s request, the Department of Human Resources had provided them a worksheet for further examination.  He said the 5 and 20 percent calculations were cumulative numbers used to total the administrative costs and resulted in an excess.

 

Ms. Giunchigliani observed that a 20 percent administrative allowance seemed high for the federal grant.  Ms. Giunchigliani suggested that the Subcommittee would not change the percentages but would make budget adjustments to the mandated thresholds.  Mr. Peri confirmed Ms. Giunchigliani’s statement and said that they would move administrative expenses that were proposed in the Governor’s budget into the program area and just come under the administrative allowance.  Ms. Giunchigliani asked if the grants would be reduced to accomplish that.  Mr. Peri indicated that administrative expenditures would be reduced and those monies would be placed into the program category.

 

Senator Rawson proposed that they move to close the budget with the Governor’s recommendation and to give staff the ability to refine the technical adjustments.  Chairman Rawson recommended that the Subcommittee deal with items one and two at the current budget hearing so decisions and direction would already have been provided before the budget hearing on the Grants Management Unit.  He said items one and two dealt specifically with allocated funds from birth and marriage certificate fees that were reserved to be spent in a particular way.  He said there was no reason to curtail those programs.

 

Chairwoman Leslie said that in doing that they were moving toward approval of the Grants Management Unit.  Senator Rawson said he assumed they were headed in that direction.  He added that those accounts were never spent in their entirety and should be used where possible.  Chairwoman Leslie agreed with that direction.

 

Senator Rawson moved to close budget ACCOUNT 101- 3201 Including the two closing items recommended by LCB staff, and including the technical adjustments.

 

Assemblywoman Giunchigliani seconded the motion.

 

The motion carried.  (Mrs. Gibbons and Mr. Goldwater were not present for the vote.

 

BUDGET CLOSED.

 

********

 

HUMAN RESOURCES

COMMUNITY SERVICES BLOCK GRANT 101-4864

BUDGET PAGE HR ADMIN-38

 

Mr. Peri introduced and explained Budget Account 101-4864 and said that budget account had two federally funded sources of revenue:  The Community Services Block Grant, which provided grant funds to eligible community-based nonprofit organizations for a variety of uses such as emergency food, shelter and clothing, rental and utility assistance, and the Community Food and Nutrition Grant, which was passed through to the Aging Services Division to assist meeting the nutrition needs of low income individuals.  He said the closing issues in that budget account were in decision units E-910 and E-923 and recommended elimination of that budget in its current form and transferring all costs and expenditures to the proposed new Grants Management Unit budget account.  Mr. Peri said that LCB staff had no other closing items or adjustments for that budget account.  He said if adjustments became necessary later they could consider them either in the Grants Management Unit closing or at a later time.  Fiscal staff recommended for the Subcommittee’s consideration that the budget be closed as recommended by the Governor.

 

SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-4864 AS RECOMMENDED BY THE GOVERNOR.

 

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

 

MOTION CARRIED.  (Mrs. Gibbons and Mr. Goldwater were not present for the vote.)

 

BUDGET CLOSED.

 

********

 

HUMAN RESOURCES

HEALTHY NEVADA FUND 262-3261

BUDGET PAGE HR ADMIN-22

 

Bob Atkinson, Program Analyst, introduced Budget Account 262-3261 and said that account included the Senior Prescription Program (Senior Rx) and the Healthy Nevada Fund grants to improve the health of children and persons with disabilities, and the grants for reduction of the use of tobacco.  Mr. Atkinson explained that closing issues in the account consisted of: (1) The expansion of the Senior Rx Program, particularly as related to the addition of General Fund in that account; and (2) The 3 percent administrative cap.

 

Mr. Atkinson said that the base budget for that account was intended to fund 7,500 participants in the Senior Rx Program and was built using a per member per month cost of $82.71.  He noted that the budget had been built before the new contract with reduced rates had been approved.  In an effort to expand the program, decision unit E-426 added a General Fund allocation to accommodate about 12,160 participants in the program by the end of the 2003-05 biennium.  Using the reduced rates in the new contract, it was estimated that over the next biennium the cost of prescriptions plus the administrative costs in the Senior Rx program would be about $66.50 per member, per month.  Applying that figure to the tobacco funding in the base budget, the Fiscal Analysis Division determined that approximately 9,328 participants could be funded without the use of any General Fund money.  If the Subcommittee wanted to expand the program further they could approve the increase to 12,160 participants recommended by the Governor by putting $639,730 in E-426 in the first year of the biennium and $2,066,820 in the second year of the biennium.  Mr. Atkinson said that would result in General Fund savings in the amount of $1,123,850 the first year and $1,037,400 in the second year and would bring the program to the 12,160 participant level recommended by the Governor.  If the Subcommittee left the $1.8 million and $3.2 million in decision unit E-426 the program could be expanded to 13,988 participants by the end of the biennium.  Mr. Atkinson noted that those numbers were the best estimate fiscal staff had at that time, and were contingent upon the actual cost of the prescriptions.

 

Mr. Atkinson added that there was a recommendation for an Administrative Assistant III in decision unit E-426 to handle administrative matters associated with the expanded number of participants in the program.  He noted that if one of the options to expand the program were approved then staff would recommend approving the Administrative Assistant III.

 

Chairwoman Leslie said the Subcommittee should interrupt the presentation for discussion because the issues were complex.

 

Senator Rawson noted that the Governor’s recommendation to increase the number of participants to 12,160 was significant.  He said the Subcommittee could approve the recommendation that would realize a savings of about $1 million a year, and they could recommend to reserve about $300,000 of that savings for programs such as World Doc, Inc.  He noted that program allowed seniors to have a discount in their pharmaceuticals and that this proposal could affect a much larger base.  He added that if they pursued that course, the Department could come to Interim Finance with a full presentation and approvals and the Legislature would not lose control.  He said he thought that was good progress and reasonable savings.

 

Senator Rawson explained that the World Doc, Inc. program used the buying power of a large insurance company to offer less expensive pharmaceuticals to subscribers.  He said that after a one-time start-up charge, there were no further charges to the state or the participating seniors.  Participants then received a minimum 15 percent discount on all pharmaceuticals even if they had other prescription plans.  World Doc, Inc. analyzed the drugs that participants used to identify more reasonably priced generic equivalents, while the purchase option always lay with the participants.  Savings in pharmaceutical costs could be as high as 80 percent.  Senator Rawson said that the preliminary figures for the World Doc, Inc. program showed that it offered a significant advantage to everyone in the state over age 55.  He added that the Department of Human Resources should only pursue that proposal if the Interim Finance Committee (IFC) was convinced that it was a good program.

 

Chairwoman Leslie clarified Senator Rawson’s proposal and said by approving the proposal, the Subcommittee would expect the Department to come to the IFC for review.  Senator Rawson confirmed Chairwoman Leslie’s summarization of his proposal.

 

Ms. Giunchigliani asked Mr. Atkinson to clarify the projected $1,123,850 in savings.

 

Mr. Atkinson said that decision unit E-426 recommended $1.8 million in the first year of the biennium and $3.2 million in the second year of the biennium.  The intent of decision unit E-426 was to immediately include the 1,300 people on the waiting list and then enroll 140 new participants each month of the biennium.  Starting the biennium with the 7,500 participants the proposal would increase the number of plan participants to 12,160 at the end of the biennium.  Based on recent raw state demographics for age and income, Mr. Atkinson said that the DHR estimated there would be approximately 120,000 people eligible for the program.

 

Chairwoman Leslie noted that the budget was built at a higher contract rate than what was currently applicable and that explained why the projected cost was now lower and allowed for savings and expansion.

 

Mr. Atkinson said that Tobacco Settlement funding was in the base budget and the Senior Rx Program could expand from 7,500 to 9,328 participants without adding General Fund.  He explained that the General Fund savings under discussion were related to 1,828 participants that DHR was able to fund solely with tobacco money even though they that were not included in the recommended budget in that manner.

 

Ms. Giunchigliani noted that there were several budgets that utilized the Tobacco Settlement funds.  She said the finance committees would eventually have to address how to manage services without that funding source.  Chairwoman Leslie added that the Subcommittee would be discussing that issue in the Aging Services budgets.  She noted that the program under discussion was supported entirely by Tobacco Settlement funds.

 

Mr. Atkinson said that it would not be entirely funded by Tobacco Settlement funds if the Subcommittee added the General Fund.

 

Assemblyman Hettrick observed that the Subcommittee needed to understand the temporary role of Tobacco Settlement funding in its decision-making process.  He noted that by adding 700 individuals from a waiting list to the 7,500 currently enrolled participants, there would be 8,200 plan participants, and without adding any outside funds participation could increase to 9,300 individuals.  Mr. Hettrick said the Subcommittee needed to decide how far it wanted to go in servicing a waiting list that did not exist.  He said the Tobacco Settlement funds would eventually be depleted and, when a program that depended on Tobacco Settlement funds was expanded, the finance committees were creating a future-funding vacuum, guaranteeing a “black hole of all black holes.”  Mr. Hettrick observed that the Subcommittee should be very cautious when using soft funding as a base that would inevitably vanish.  He proposed that they go with 9,328 participants and ask World Doc, Inc. to convince the Subcommittee or IFC to put $300,000 into reserve to begin a program.  He said that World Doc, Inc. and the DHR needed to prepare a solid proposal before the state committed that money.  Mr. Hettrick concluded and said that they should consider funding the budget on existing dollars and not add in General Fund.

 

Chairwoman Leslie asked Mr. Atkinson to clarify the waiting list issue.

 

Mr. Atkinson said that on February 28, 2003, there were 1,391 individuals on the waiting list.  He said that current funding would support 9,328 individuals, therefore accommodating the waiting list and about 500 additional participants.

 

Chairwoman Leslie said that S.B. 459 expanded Senior Rx to couples.

 

Senator Rawson observed that the margin was very close to only include those already enrolled or waiting.  He said they were entering a biennium where they knew there would be growth.  He said based on projections he would go with the Governor’s recommendation but that they did not need to go beyond.

 

Chairwoman Leslie pointed out that the Senate approved S.B. 459 on April 14 and the Assembly would be seeing the legislation soon.  She said she tended to agree with Senator Rawson.  She said she thought the Subcommittee should support the Governor’s recommendation of 12,160 participants noting the savings of over $1 million a year.  She asked Senator Rawson to clarify the source of the $300,000.

 

Senator Rawson said the $300,000 savings would come out of the $1 million savings.  He said he would make that as a motion, but that Interim Finance should make the decision in conjunction with the Governor’s office.

 

SENATOR RAWSON MOVED TO ACCEPT THE 12,160 PARTICIPANT CAP ON THE SENIOR RX PROGRAM AND RESERVE AN ADDITIONAL $300,000 OUT OF THE GENERAL FUND SAVINGS THAT WAS CURRENTLY IN THE BUDGET FOR A WORLD DOC TYPE PROGRAM AND TO BRING THAT BEFORE THE INTERIM FINANCE COMMITTEE.

 

SENATOR MATHEWS SECONDED THE MOTION.

Mr. Hettrick commented that he would support the motion but wanted to take the $300,000 out of the $639,730 for FY2003-04 and the $2,066,820 in FY2004-05, and actually save the $1 million per year.  He said that by using the $300,000 they would actually be funding services.  If they did not use the $300,000 then the IFC could add it back to the program.  He said he would prefer to save the $1.123 million and the $1.037 million outright because they could still spend the $300,000 for services.

 

Senator Raggio noted that Mr. Hettrick had “beat me to it” because that was what he was going to suggest.  He asked if the $66.50 figure was firm.

 

Michael Willden, Director, Department of Human Resources, introduced himself for the record.  He said the contract that had been in place since January 2003 stipulated that the DHR pay the insurance contractor for actual prescription costs which, on a per member per month average, ran in the mid-forties, plus an additional retention fee of $19.50.  By combining a $45 to $47 per member per month cost for prescriptions, plus the administration and reinsurance cost of $19.50, the final figure came to about $66.50.  He noted that they had operated very close to that figure for 18 months.

 

Senator Rawson modified the motion TO REMOVE $300,000 from the 12,160 participant cap figure and save $1,123,850 the first year OF THE BIENNIUM and $1,037,400 the second year OF THE BIENNIUM.

 

Senator Mathews seconded the amended motion.

 

Assemblywoman Giunchigliani wanted assurance that the action did not guarantee business to any single business entity, and that there would be an open bidding process.

 

Chairwoman Leslie said that it was her understanding that the program would be a World Doc-like program, and that did not mean World Doc, Inc. per se.

 

Mr. Hettrick reiterated that if the IFC did not approve the World Doc-type program, the funding could be added back to the Senior Rx Program.

 

Chairwoman Leslie added that, either way, the money would be used for a Senior Prescription program.

 

Senator Rawson said, as a final discussion point, the Subcommittee should send a Letter of Intent to Mr. Willden to prepare a Request for Proposal (RFP) and submit the results to the IFC for review as soon as possible.

 

Motion carried.  (Mr. Goldwater was not present for the vote.)

 

Chairwoman Leslie turned the gavel over to Senator Rawson.

 

Mr. Atkinson said that the second closing issue centered on the 3 percent administrative cap.  Nevada Revised Statutes (NRS) 439.620 required that the administrative expenses of the Department of Human Resources in administering all the programs conducted under the Task Force for the Fund for a Healthy Nevada be limited to 3 percent of the funding anticipated to be deposited in the account during the year.  Mr. Atkinson explained that some of those administrative expenses were in the Healthy Nevada Fund account and some were in the Aging Services Grants account.  If the Grants Management Unit were approved, then some of the administrative expenses would go to that account, and if the auditor’s position were transferred to the Director’s office some administrative expenses would fall to that account.  Mr. Atkinson noted that there were still some decisions to be made but making those assumptions, the current administrative expenses built into those accounts exceeded the 3 percent cap by $6,106 in FY2003 and $23,780 in FY2004.  He said that staff would seek authority to work with the DHR to reduce the administrative expenses and adjust the appropriate accounts to remain within the 3 percent cap.

 

Mr. Atkinson said that decision unit E-900 recommended that the Auditor II position be transferred to the Director’s office to consolidate the auditing functions.  Staff had no concern with the recommendation but requested that it be approved only if the new Auditor II position in the Director’s office were approved.  If the new position in the Director’s office were not approved then the position would remain as the only auditor in the Department and should stay in Budget Account 262-3261 where it was currently funded.  In decision unit E‑903 the Management Analyst II, who handled the grants out of the Healthy Nevada Fund, was recommended for transfer to the Grants Management Unit along with the administrative expenses that supported it and the actual grants that were awarded.  Staff recommended approval of that decision unit only if the Grants Management Unit was approved.

 

Mr. Atkinson said that under other technical adjustments, decision unit E-425 initially recommended $25,000 in each fiscal year for design and printing of the Senior Rx applications.  That recommendation was eliminated to reduce administrative costs to the 3 percent cap and the department would be creative with printing the applications.  He noted that a small adjustment was included for postage inflation.  That adjustment was made at the request of the Department.

 

Mr. Atkinson recommended that the rest of the account be approved with those recommendations.

 

Chairman Rawson summarized and said that the motion would be to allow fiscal staff the authority to reconcile the administrative expenses, that the Auditor II position be moved contingent upon the approval of an auditor’s position in the Director’s office, that the Management Analyst II position be approved if the Grants Management Unit was approved, and to include the other technical adjustments.

 

Senator Raggio moved to close budget ACCOUNT 262-3261 as recommended by staff including THE FIRST MOTION, THE technical adjustments, and that staff be given the authority to adjust the EXPENSES SUBJECT TO THE ADMINISTRATIVE cap.

 

Assemblywoman Giunchigliani seconded the motion.

 

The Motion carried.  (Mr. Goldwater and Ms. Leslie were not present for the vote.)

 

Budget closed.

 

********

 

HUMAN RESOURCES

BCBS SETTLEMENT 101-3241

BUDGET PAGE HR ADMIN-29

 

Steve Abba, Principal Deputy Fiscal Analyst, Legislative Counsel Bureau, introduced Budget Account 101-3241.  He explained that there was a $3 million settlement between the Attorney General’s Office and Rocky Mountain Hospital and Medical Services, Inc., Colorado Blue Cross/Blue Shield, and Nevada Blue Cross/Blue Shield.  The settlement occurred during the current interim and there was a one-time settlement payment of $2.2 million that was received during the current fiscal year and had been reserved for reversion as part of the Governor’s budget reductions.  The settlement allowed for payments of $150,000 through 2006.  The Executive Budget reflected the payments that were anticipated for the upcoming biennium that netted about $450,000.  According to the settlement language, the settlement funds were made “in trust on behalf of the nonprofit charitable health care purposes upon which Nevada’s claims to alleged charitable assets were based.”  The Executive Budget, as recommended, proposed to reserve the funds in that budget account. 

 

Mr. Abba said that fiscal staff had prepared two options for the potential use of those funds for the Subcommittee’s consideration.  The first option proposed to split the $450,000 between fiscal years and transfer $225,000 each fiscal year to the Check Up budget, reducing the General Fund in like amount.  The settlement funds would be used as the state match for Title XXI dollars in the Check Up budget.  That would be a one-time funding from an available source that would allow the General Fund savings to be used for other purposes that might arise during the course of closing other agency budgets.  The second option was similar to the first and would transfer $225,000 each fiscal year to the Medicaid budget to be used as state match for federal Title XIX monies in the Medicaid budget.  Mr. Abba said that although the federal match was slightly less, in essence the General Fund savings would be the same.  He noted that although staff brought those options to the attention of the Subcommittee neither alternative would have to be adopted.  He said that the Subcommittee could leave the funds in that account as a reserve and that would give the Department of Human Resources (DHR) discretion during the interim to develop a plan for those funds, if they so desired, to present to IFC, or the Subcommittee could consider those options which would result in some potential savings to the General Fund.

 

Senator Mathews asked if there had been a plan for the use of the funds when the suit was first initiated.

 

Mr. Abba said the Department could speak to that.  He said that there might have been a plan but ultimately the money was reserved for reversion for the current fiscal year.

 

Mr. Hettrick asked if the funds were put into either of the two options would they become a part of the base budget.

 

Mr. Abba said the answer was yes.  He explained that there was a significant enhancement from the General Fund in the Check Up budget to cover anticipated caseload.  He said the Subcommittee could either reduce the General Fund in that enhancement unit within the Check Up budget, or they could reduce the budget’s base appropriation that was there to act as match for Title XXI monies.  He noted that the appropriation would be one-time money.

 

Mr. Hettrick suggested the funds be used to reduce the base and avoid creating another “black hole” situation.  That route would enable them to get some utilization of the funds but he said they should not expand the base.  He said the Subcommittee needed to make hard decisions regarding the use of ongoing funds rather than using one-shot funding that would simply defer the problem to the next biennium.

 

Senator Raggio noted that he understood Mr. Hettrick’s concerns, but said that in that particular biennium those monies would provide considerable funding that would not otherwise be available if they put it in the base.  He said they would not get any of the federal funding if they put it in the base.

 

Chairman Rawson said to take advantage of federal funding when possible was the responsible thing to do.

 

Ms. Giunchigliani noted with regard to Senator Mathew’s question that the Legislature had argued whether or not to go forward with the Blue Cross/Blue Shield suit.  She said she recalled Mr. Sasser saying the money was owed the state and that they should capture it.  She did not recall that the Legislature had a plan for the funds but were arguing over whether or not to participate in the suit.

 

Ms. Giunchigliani noted they should leverage federal funds.  She added that she understood Mr. Hettrick’s concern about creating a “black hole,” but saw the option as an opportunity to provide additional services.  She said the intent for the money was to use it for programs rather than reserve it and thought that the first option seemed most fiscally prudent.  Ms. Giunchigliani noted that they should make a note to remember that in the next session the money was not ongoing so as not to create deficit spending.

 

Chairman Rawson noted that they were seeking to fund new supplemental programs but were supporting existing programs with a defined need and a significant waiting list.

 

Assemblywoman Giunchigliani moved to close Budget Account 101-3241 as staff recommended utilizing option 1.

 

Senator Mathews seconded the motion.

 

The motion carried with Senator Cegavske and ASSEMBLYMAN Hettrick voting no.  (Ms. Leslie and Mr. Goldwater were not present for the vote.)

 

Budget closed.

 

********

 

Mr. Abba said for clarification on the former account when staff brought the Check Up budget to the Subcommittee for closing they would reflect the savings of $225,000 in the base budget in accordance with the motion.

HUMAN RESOURCES

CHILD SUPPORT FEDERAL REIMBURSEMENT 101-3239

BUDGET PAGE WELFARE -32

 

Mr. Abba introduced Budget Account 101-3239 and said it was a pass-through account of federal Title IV-D monies to the local district attorneys.  It also included federal incentive payments to the local district attorneys and staff recommended the account be closed as recommended by the Governor.

 

Senator Mathews moved to close Budget Account 101-3239 as recommended by the Governor.

 

Assemblywoman Giunchigliani seconded the motion.

 

The motion carried.  (Ms. Leslie and Mr. Goldwater were not present for the vote.)

 

Budget closed.

 

********

 

HUMAN RESOURCES

ASSISTANCE TO AGED AND BLIND 101-3232

BUDGET PAGE WELFARE -35

 

Mr. Abba introduced Budget Account 101-3232 and said it provided for supplemental payments to aged and blind individuals who were Social Security Income (SSI) eligible as well as supplemental payments to adult group care facility operators.  He said there were a number of closing adjustments that were based on new information received from the Welfare Division regarding caseload projections for FY2003.  Based on those caseload projections the adjustments were made to FY2004 and FY2005 using the same percent increase in caseload growth that the Division had contemplated for those fiscal years, but the caseload projection for FY2003 was lower which reduced the base level for FY2004 and FY2005.  Mr. Abba noted that staff increased the average payments that were received by the aged blind and adult group care facilities operators to ensure there were sufficient monies to make those payments.  He said the only other issue that staff brought to the Subcommittee was the continuation of the Letter of Intent that had been approved for the past several sessions for the Welfare Division to return to the Interim Finance Committee prior to the annual SSI cost-of-living increase to let the IFC know how the Division would like to provide for that increase.

 

Chairman Rawson said that if they followed the staff recommended adjustments the first year savings would be $154,000 and the second year would be $159,000.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-3232 WITH STAFF RECOMMENDATIONS AND INCLUDING THE LETTER OF INTENT.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Ms. Leslie and Mr. Goldwater were not present for the vote.)

 

BUDGET CLOSED.

 

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HUMAN RESOURCES

CHILD ASSISTANCE AND DEVELOPMENT 101-3267

BUDGET PAGE WELFARE -37

 

Mr. Abba introduced Budget Account 101-3267 and said that it housed all the federal and state child care money that was available to the Welfare Division for disbursement for the upcoming biennium.  He noted that the Subcommittee had heard a presentation earlier that week on the status of that account.  He noted there had been an error in The Executive Budget that overstated the federal child care monies in the amount of $9 million for each fiscal year.  The closing adjustments that rectified the error were recommended by the Division through the Budget Office in the form of an amendment.  The closing adjustments included eliminating a new position that had been recommended in The Executive Budget, and again that adjustment was based on the budget amendment that was received by fiscal staff.

 

Mr. Abba reviewed the Welfare Division’s plans for the upcoming biennium to help mitigate the growing waiting lists.  He noted the items on the closing document were still under discussion because the Division had to hold a public hearing to actually implement the plans.  He said there could be adjustments based on the outcome of the public hearing.  Mr. Abba continued and said that the first strategy the Welfare Division proposed was to implement an eligibility standard for child care for Temporary Assistance to Needy Families (TANF) clients and the non-needy caretaker and Kinship Care Programs.  Currently those two recipient groups had no income test to receive child care monies.  The savings for that proposal were unknown because the Division had no experience with that issue.  The second strategy the Division proposed was to reduce the term to receive child care monies from the Assistance with Child Care for the Employed (ACE) programs from 12 to 6 months.  He noted that this strategy anticipated saving $200,000 for each year of the biennium.  The Division’s third strategy proposed to introduce co-payments to families that currently did not have a co-payment.  The Division proposed a minimum co-pay of 5 percent of the child care benefit, which equaled approximately $11 per month based on information the Division made available to staff.  Mr. Abba noted that the potential savings was $1 million for each fiscal year.

 

The Division’s fourth proposed strategy was to require self-employed individuals to work outside of their homes in order to be eligible for benefits.  Recipients currently received benefits if they worked in the home.  The anticipated savings for this proposal was $745,000 each year.

 

The fifth strategy proposed by the Division was to require that a registered provider could not live in the same household as the child.  This policy change would prevent a person from being paid for providing child care services to the child living in the same household.  The savings for that proposal were unknown, as the Division had no experience with that issue.

 

The last strategy proposed by the Division was to change the eligibility criteria for how lump sum payments, such as insurance settlements, wage bonuses, inheritances, and such, were tested when determining eligibility for child care services.  The Division did not know the savings that might accrue from implementing that proposal.

The known savings from the Welfare Division’s proposals were approximately $2 million each year.  Mr. Abba said that even with those savings, staff would want the Subcommittee to understand that a significant waiting list would accrue over the biennium.  The Division anticipated that they could serve all the mandatory groups that needed child care.  He said that the Division projected growth in the at-risk and discretionary population’s waiting list.  The Division had developed two growth rate scenarios that indicated a 1 percent and a 4 percent growth rate.  Mr. Abba said most likely the waiting list growth rate would be somewhere in between.  He said the Welfare Division could cover the mandatory populations with the funding that was available in the budget and the modifications that were proposed.

 

Chairman Rawson asked what decisions they could make if the Division had to go to public hearing.

 

Mr. Abba said that staff would recommend that the budget close with the technical adjustments.  He emphasized that with the budgeted General Fund monies and the certified federal match money the available federal money would be maximized.  He said that the Division would be able to bring into that budget for disbursement all the federal money that was currently available.  If other federal money became available through federal legislation during the interim, the Division would have to obtain the additional certified match from local entities in order to bring in additional federal funding.  The second issue Mr. Abba emphasized was that since federal monies had been maximized, unless the Subcommittee wanted to add General Fund monies that would not be eligible for any additional federal match, there would be no other child care revenues for the anticipated waiting list.  Therefore, staff recommended closing the budget with the adjustments that had been made.

 

Ms. Giunchigliani referred to the proposal that allowed for an income test for child care services for the non-needy caretaker and Kinship Care Program.  She noted that during the interim restrictions on eligibility were implemented.  She asked Mr. Abba to explain the additional costs if the restrictions for the Kinship Care Program were removed.

 

Mr. Abba said that discussion of the Kinship Care Program would occur in the TANF budget and the closing documents would include options to fully fund the Kinship Care Program entirely from the General Fund.

 

Ms. Giunchigliani noted that the only item in the budget under consideration was whether or not to apply the income test for child care services.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-3267 WITH STAFF RECOMMENDATIONS AND TECHNICAL ADJUSTMENTS.

 

SENATOR MATHEWS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Ms. Leslie and Mr. Goldwater were not present for the vote.

 

BUDGET CLOSED.

 

********

 

Mr. Abba said that Mr. Ghiggeri had asked him to expand on who was currently making co-payments.  He said that of the populations that received child care services, the groups that were currently making co-payments included individuals under the ACE program.  Those groups had a fixed time period during which they were reimbursed 100 percent of their child care expenses, and were individuals who were employed, who had earned income, and no longer qualified for TANF assistance.  They received free child care with no co-payment for a fixed time period, after which they were required to make co-payments.  The at-risk category population made co-payments, as did the discretionary categories of individuals.  The co-payments were based on a sliding-fee scale depending on the family’s income.  The TANF population under the New Employees of Nevada (NEON) program, individuals who were participating in work activities and currently received cash assistance, did not make co-payments.

 

Senator Raggio noted that for the group affected by the Division’s proposal, the co-payments would be a minimum of 5 percent.

 

Mr. Abba added that individuals on the New Employees of Nevada (NEON) program would continue to receive child care services without a co-payment.

 

HUMAN RESOURCES

ENERGY ASSISTANCE – WELFARE 101-4862

BUDGET PAGE WELFARE - 42

 

Mr. Abba introduced Budget Account 101-4862 and said fiscal staff had received an amendment for the upcoming biennium to include the $2 million Housing Grant money that was available for the same purposes as the Low Income Home Energy Assistance (LIHEA) program to provide assistance with energy utilization for eligible clients.  The Division of Human Resources (DHR) received the grant during the current biennium and had not spent all the money.  The Welfare Division had received authorization from the Housing Division to expend the monies for the upcoming biennium.  Mr. Abba said the closing document included a technical adjustment that reflected the projected $2 million to be split evenly for the upcoming biennium, at $1 million per year.

 

Mr. Abba noted two decision points for the Subcommittee’s consideration.  The first decision point involved decision unit E-350 that recommended funding additional contract service hours primarily for the Las Vegas office.  The Las Vegas office had been established during the current biennium to accommodate the significant growth in the program resulting from the Universal Energy Charge (UEC) revenue.  The Las Vegas office was staffed entirely with contract support staff and the additional money requested in decision unit E-350 would provide for approximately 3,000 contract service hours.  Mr. Abba said that the Welfare Division had provided significant supporting documentation for that request and staff concurred with the enhancement.

 

Mr. Abba said the second decision point with regard to decision unit E-350 involved $90,000 each fiscal year for a program outreach campaign.  He noted that the state plan required a program outreach.  The Division, in concert with a number of different entities, had established a public relations and outreach advisory committee and had requested $90,000 to be used for the program outreach campaign.  Staff had no adjustments or recommendations regarding the use of that money, since it appeared to be a reasonable use of monies, if it was the desire of the Subcommittee to continue the outreach efforts that the Division was currently supporting.

Mr. Abba said there was another technical adjustment that fiscal staff would recommend in decision unit E-350.  He noted $60,000 for each year was built into that decision unit to conduct a program-required annual evaluation of the UEC.  Based on information provided by the Division, the contract costs to retain a contractor for that annual evaluation were currently $95 per hour.  The budget was built on a contract cost of $125 per hour.  Fiscal staff reduced that hourly contract amount to $100 resulting in a savings of approximately $12,000 each year.

 

Chairman Rawson said that the Subcommittee might discuss whether or not the $90,000, or some portion of that, should be put into outreach or to buy more services.

 

Ms. Giunchigliani asked staff to elaborate on the new UEC requirements.

 

Mr. Abba responded and said that the Welfare Division provided a table regarding the maximum monthly income eligibility criteria for the program.  He said, as an example, for a household of one to be eligible for the program the maximum monthly income would be slightly over $1,100 and for a household of three, the maximum monthly income would be $1,877.

 

Ms. Giunchigliani noted that the program was reaching low-income families.

 

Mr. Abba agreed with Ms. Giunchigliani and said that the Welfare Division was going to hold a public hearing to establish a minimum monthly payment amount for individuals who were approaching the maximum level.  He said the threshold or minimum subsidy payment would be $122 per month.

 

Ms. Giunchigliani noted that they were purchasing kilowatt hours.  She asked if the program was limited to Clark County and Carson City because she could find no one from Washoe County or the other rural counties participating in the program.

 

Mr. Abba said the program was statewide.  He said the eligibility criteria, as stipulated in A.B. 661 of the 2001 Legislature that implemented the UEC, was based on household income as well as energy usage.  Those two elements were factored together to determine what the per-household annual subsidy would be.

 

Ms. Giunchigliani asked how many households were actually on the program.  Mr. Abba said he did not have the most recent information and said the Welfare Division might be able to provide that information.  Ms. Giunchigliani said she was trying to determine whether or not the $90,000 should provide more services and needed to know how many families the program was assisting.

 

Mr. Abba said, based on the performance indicators, it appeared that UEC revenues could serve approximately 13,000 recipients per fiscal year.  The annual LIHEA grant would serve approximately 6,500 individuals per year and the remaining were the number of individuals to be served with the one-time Housing Grant that would be available for the upcoming biennium.

 

Ms. Giunchigliani asked if the figure was actual or projected.  Mr. Abba said the figure was projected.  Ms. Giunchigliani asked what was the actual figure.  Mr. Abba said 15,700 individuals were actually served for FY2002, noting that the UEC program was in its start-up phase.  Ms. Giunchigliani asked if the number served was actually going down or did they add the 13,000 to the 6,500.  Mr. Abba said it would be roughly 20,000 individuals and an undetermined number of individuals would be served with the HUD grant.

 

Chairman Rawson observed that $90,000 would not provide much.

 

Ms. Giunchigliani agreed with Chairman Rawson.  She added that there were many different local governments serving low-income individuals.  She proposed that the local agencies could inform their clientele of the energy assistance program, rather than using funds on advertisements.

 

Senator Cegavske raised the question of combined household income.  She asked staff for clarification about whether or not eligibility was set from individual or household income.

 

Mr. Abba said the eligibility for the program was based on household income.

 

Senator Cegavske noted that there was a separate question regarding the disabled who were evaluated as individual rather than household income.

 

Mr. Abba said that the Health Insurance for Work Advancement (HIWA) program in the Medicaid budget proposed to determine eligibility based on the individual’s income level versus household income.

 

Chairman Rawson said the projection for the average payment was about $500 per recipient and noted that there was a federal requirement that the program had to do outreach.

 

Nancy Ford, Administrator, Welfare Division, said there were two funding sources applicable to the discussion.  One source was federal LIHEA funds, and the other was UEC funds.  She said the federal LIHEA source required an outreach effort.  She noted that the UEC fund source had state statute requirements for outreach and according to state statute outreach dollars did not come from administrative costs.

 

Chairman Rawson noted that Ms. Ford had indicated that outreach was important.

 

Ms. Ford said that they had not done outreach during the first half of the program’s initial year.  Because of the many start-up activities, there had been a backlog on their case processing.  She said the processing time had subsequently been reduced to five days and it was appropriate to do outreach because they could process cases in a more timely fashion and serve that population.  She said they had just placed a newspaper ad to encourage application for low-income home energy assistance.

 

Ms. Giunchigliani said she felt more comfortable with the outreach program concept.  She asked for further clarification as to whether or not local government agencies that provided assistance to low-income individuals were also imparting energy assistance information.

 

Ms. Ford said they had various partners at the intake sites throughout the state that referred individuals to the low-income energy assistance program.  Ms. Giunchigliani asked why they were referred rather than assisted at the first intake site.  Ms. Ford said they had to be referred because local agencies could not take applications for that program.  She added that the Welfare Division administered the program and had two sites that processed the applications, one in Carson City and one in Las Vegas.  Ms. Giunchigliani pursued her point noting that the local government agencies could supply energy assistance applications and then transmit them.  Ms. Ford said that all intake sites distributed applications, helped the individuals complete them, and transmitted them to the Welfare Division.  She noted that the applications were also available on the Division’s Web site.  Ms. Giunchigliani added that the outreach should also reach into the rural parts of the state that had not yet applied.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BUDGET ACCOUNT 101-4862 WITH STAFF RECOMMENDATIONS INCLUDING THE $90,000 FOR THE OUTREACH PROGRAM.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Mr. Goldwater was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

Chairman Rawson turned the gavel over to Assemblywoman Leslie.

 

HUMAN RESOURCES

AGING SERVICES GRANTS 262-3140

BUDGET PAGE AGING - 1

 

Julie Brand, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, introduced Budget Account 262-3140 and said it supported the Independent Living Grants (ILG) of the Fund for a Healthy Nevada and was funded by Tobacco Settlement money.  Some closing issues had been discussed in previous budget hearings that covered Tobacco Settlement Fund disbursements and the funding for decreases in Independent Living Grants.  She said there was a pattern of increases in transfers of Independent Living Grants to other budget accounts within the Division for Aging Services and noted, as an example, funding for the Community Home-Based Initiatives Programs (CHIP) budget had increased while funding in the Independent Living Grant Fund had decreased.  She said the Subcommittee might consider the following Tobacco Settlement funding options.

 

Ms. Brand said the Subcommittee could first, close the account as recommended by the Governor with continued funding of direct service programs; second, the Subcommittee could make a decision to not fund growth in existing programs in other Aging Services budget accounts, but continue existing services at the current levels.  In addition, the Subcommittee could make a policy decision to close the account supporting the Department of Human Services’ (DHS) proposal to transfer $595,000 additional Tobacco Settlement funds to the CHIP budget account.  Ms. Brand noted that they would address that proposal in the Division for Aging Services, Senior Services Program, Budget Account 101-3146.  She said that fiscal staff also requested the ability to make necessary budget adjustments to the Aging Services Grants account depending on the Subcommittee’s action.

 

In addition to this option for Independent Living Grant funding, Ms. Brand said that staff recommended a technical adjustment of $58,578 in FY2004 and $101,289 in FY2005 in decision unit E-460 based on revised projections of the Federal Medical Assistance Percentages (FMAP) for FY2003-2005.  She noted the adjustment would decrease the allocation provided to other budget accounts for the General Fund match requirement.  She said the savings provided in decision unit E-461 would create a corresponding increase in Independent Living Grants in Budget Account 262-3140, decision unit E-460.

 

Ms. Brand said there were two additional technical adjustments.  Staff recommended $4,300 each year of the biennium to fund the statewide cost allocation and reclassification of the Treasurer’s interest component of the allocation of Tobacco Settlement into another General Ledger account.

 

Chairwoman Leslie said that the budget account under discussion provided the Subcommittee a good opportunity to discuss the appropriateness of using Tobacco Settlement monies for direct services programs.

 

Assemblywoman Giunchigliani said services for the aging were salient given the population configuration of Nevada.  She said the Subcommittee needed to formulate a policy on whether to continue relying on Tobacco Settlement funds or “bite the bullet” and move to the General Fund to support those programs.  She noted that moving to the General Fund would make it clear what funds were available and what services could be provided.  She said the Subcommittee could not postpone the decision much longer and noted that they could use some of the savings they had realized in other budgets for the Aging Services Grants under discussion.

 

Chairwoman Leslie noted that she shared some of those concerns.

 

Senator Rawson said he also had a great concern about building programs on Tobacco Settlement funds that would eventually be depleted.  He said alternatively he was not eager to tap into the funds that they had saved.  He concluded by saying he did not feel comfortable using the Tobacco Settlement monies in the case under discussion.

 

Senator Cegavske agreed with Senator Rawson.

 

Chairwoman Leslie said that staff had presented several options for the Subcommittee’s consideration and suggested supporting option two.  She said she did not favor using Tobacco Settlement monies to fund growth.

 

Senator Rawson wanted to evaluate the recommended growth level and its appropriateness.  He suggested that if they supported the proposed transfer of $595,000 additional Tobacco Settlement funds to the Community Home-Based Initiatives Program (CHIP) budget account, the Subcommittee could make a statement that that was the last of the Tobacco Settlement to be used for that budget account.

 

Senator Raggio said he wanted to know the effect on the program and waiting lists if the Subcommittee chose not to fund any program growth and only funded existing services at current levels.  He said it was easy to talk about but they needed to know the effect.

 

Chairwoman Leslie noted that they would be dealing with that issue in this account and in the next.

Senator Raggio said the program allowed elderly folks to remain independent and stay in their homes.  He said he needed to understand what was recommended for growth, how many would be affected if they continued the program but did not fund growth, and what the average individual participant received from the program.

 

Carol Sala, Administrator, Aging Services Division, introduced herself for the record.  She said that Budget Account 3140, the Aging Services Grant under discussion, was the Division’s Tobacco Settlement grant from which monies were transferred to various other budget accounts within the Division, including the CHIP program.  She said that the CHIP program provided a variety of services to seniors.  They received case management from a social worker who developed a care plan for personal care, homemakers, adult day care, respite care, and access to a personal emergency response system.  She explained that there was a whole menu of services, and case managers determined what package of services was needed in order for the recipient to remain at home.

 

Senator Raggio asked for clarification as to whether the budget increase was to fund positions, actual services, or some combination.

 

Ms. Sala said the increase funded a combination of categories.  She said the Division used Tobacco Settlement funds in M-200 to match the Medicaid funds.  She noted that new clients needed to fit into their “social worker to client ratio” of 45 to 1.  Social workers provided case management to monitor services and to put those services in the home.

 

Senator Raggio asked how many people were currently served.  He noted ongoing cases of 1,033 CHIP Medicaid clients, 127 CHIP state clients, 160 group care clients, and waiting list cases of 558 CHIP Medicaid clients, 201 CHIP state clients, and 6 group care clients.  He also noted that the wait list times ranged from 1 to 12 months.  Senator Raggio asked if the funding for growth that they were discussing dealt with the waiting list.

 

Ms. Sala responded and said no.  She said they were dealing with an M-200 category that dealt with demographic growth.  They projected opening 108 additional slots over the biennium under CHIP Medicaid just for demographic growth.  She said they would discuss the wait list issue in another decision unit in Budget Account 3146.

 

Senator Rawson asked for clarification on what percent of Tobacco Settlement funds was allocated to Aging Services.

 

Carla Watson, Administrative Services Officer, Aging Services Division, introduced herself for the record.  She said that 30 percent of Tobacco Settlement funds was allocated to the Aging Services Division under the Independent Living Grants (ILG) and 3 percent of that was designated for administration.

 

Senator Rawson asked if the funding request under discussion was coming from that 30 percent.

 

Ms. Watson said that was correct.  She added that the Aging Services Division administered the program.

 

Senator Rawson asked for confirmation that the Division wanted to use the funding and if their ability to access the funds in the future would be degraded or harmed.

 

Bruce McAnnany, Deputy Administrator, Aging Services Division, introduced himself for the record and explained that the Tobacco Settlement funds had been designated by legislation to provide for independent living so that aging individuals could stay in their own homes and increase their independent living options.  He said that by awarding grants to provide services through other programs they had expanded the Division’s offerings and were allowing individuals to remain at home and be independent.  Mr. McAnnany said, as funded through the Division, the effort was multi-faceted and one of the only ways that they could continue growth without turning to the General Fund.

 

Senator Raggio asked if their program negatively affected the population served by S.B. 174 of the Seventy-first Session.  Ms. Sala responded and said their program did not affect S.B. 174 of the Seventy-first Session.  Ms. Watson clarified that S.B. 174 of the Seventy-first Session was affected by Tobacco Settlement funds based on a request in a letter dated April 11 from the Director’s office that reduced a portion of the General Fund originally budgeted in The Executive Budget to fund the Office of Community Based Services (OCBS).

 

Chairwoman Leslie interrupted and said they would have a separate discussion on that budget account.  She continued and said that the Subcommittee did not seem to want to limit growth but the issue was whether to fund growth from Tobacco Settlement funds or the General Fund.

 

Senator Rawson said from the discussion he was not as concerned as he had been.

 

Ms. Giunchigliani asked for further clarification as to the availability and stability of the requested $595,000 Tobacco Settlement funds.

 

Mr. McAnnany said the money represented a salary savings from the previous budget because hiring restrictions prevented them from filling positions and increasing their client base.  Those unspent funds reverted to the pool to be assigned to Independent Living Grant monies.

 

Ms. Giunchigliani asked if, by not funding growth, there would be the risk of being out of compliance with the Olmstead Act.

 

Chairwoman Leslie said she did not know there was an Olmstead Act compliance issue.

 

Ms. Giunchigliani said she wanted to separate the two issues.  One was an issue of funding sources for growth and the other was funding sources for the base budget and enhancements.  She said she would argue that the base should be funded from the General Fund and the Subcommittee could discuss using Tobacco Settlement funds for the current enhancements recognizing that next session they would have to “bite the bullet.”

 

Ms. Giunchigliani continued and said instead of using Tobacco Settlement funds for the base budget, the Subcommittee should use the General Fund.  The impact on the General Fund would be $918,585 in the first year of the biennium and $920,298 in the second year.  Then, breaking out the Governor’s recommendation for enhancements, which was really the caseload, that would be another $681 million and $840 million.  Ms. Giunchigliani said that they should recommend that the base be funded with the General Fund and fund the $1.621 million enhancements with Tobacco Settlement money, but recognize that next session they would have to deal with the aging Tobacco Settlement funding.

 

Senator Rawson commented that because of current budget constraints in the General Fund, they could fund the base budget from the General Fund during the last quarter or half of the biennium, and deal directly with the issue during the next legislative session.  Senator Rawson said that plan would not exacerbate the current cash problem.

 

Ms. Giunchigliani said they should add the issue to their short list.

 

Senator Raggio added that in that particular budget it would be heartless not to fund some growth given the large number of individuals on the waiting list.  He said the program did not reach as many elderly individuals with the kinds of services needed that were provided by the Aging Services Division.  He said that he would favor the option that recommended contingent funding through the Tobacco Settlement funds.  He added that the Legislature should deal separately with the major decisions of how to provide revenues during that biennium.  In that particular situation Senator Raggio thought they should continue funding growth for those programs utilizing available Tobacco Settlement money.

 

Chairwoman Leslie said she could agree with that solution but that they needed to communicate to the administration that in the future the Subcommittee did not want to see that budget relying on Tobacco Settlement funding.  Senator Rawson said if they passed the budget as suggested and adequate revenues were raised that would be taken care of in the next budget, they could do a Letter of Intent to that effect.  Chairwoman Leslie said she would like to write another Letter of Intent.  She said, understanding the revenue problem, and although they had asked administration to review that budget for General Fund support, they had not.

 

Ms. Giunchigliani said regardless of the budget crisis the Subcommittee had an obligation for responsibility in that budget area.  She said she could not support using Tobacco Settlement funds and if necessary funding was raised they should fix the policy that session.  She said a responsible motion should include the option to review the possibility to offset the base budget with the General Fund before the end of session and that they include that on the list.

 

Chairwoman Leslie said she would agree with that.

 

Senator Raggio moved to close Budget Account 262-3140 as recommended by the Governor including STAFF RECOMMENDATIONS AND option 1 utilizing Tobacco Settlement funds, and placing the item on the priority list.

 

Senator Rawson seconded the motion.

 

The motion carried.  (Mr. Goldwater was not present for the vote.)

 

BUDGET CLOSED.

 

********

 

HUMAN RESOURCES

SENIOR SERVICES PROGRAM 101-3146

BUDGET PAGE AGING - 14

 

Julie Brand, Program Analyst, introduced Budget Account 101-3146 and said the account included funding for the Community Home-Based Initiatives Program (CHIP), the Adult Group Care Waiver Program, and the Caregiver Training Program.  She said the first closing issue had to do with the expansion of the CHIP Medicaid program that they had just covered in Budget Account 262-3140.  She said the budget account under consideration was the recipient of the Tobacco Settlement funds for the match and would only provide for demographic growth, not the individuals on the waiting list.  She noted one technical adjustment regarding the adjustment for the federal Medicaid medical assistance percentages that was reflected in the closing document.

 

Ms. Brand said decision unit E-451 addressed the expansion and the waiting list for the CHIP Medicaid waiver program.  She said the Governor recommended funding through Medicaid Title XIX for the addition of 80 CHIP Medicaid waiver slots, which would provide for four new positions to be hired at a staggered rate.  She said the Subcommittee should note the following effects to the program:

 

• Approval of that decision unit would reduce the waiting list from six to three months.
• The additional slots as recommended would not be added until October 2004.
• The new administrative assistant and accounting assistant positions were currently scheduled for a start date of October 2003 and April 2004, respectively.

 

Ms. Brand said the Subcommittee might wish to consider the decision unit as recommended by the Governor with no adjustments, or defer the start date of one of the administrative assistant positions to April 2004.  She said the agency was in agreement with that option.

 

Ms. Brand said decision unit E-452 expanded the Group Care Program and provided for 100 additional slots under Title XIX that included funding for three new positions in the recommendation.  Currently there was a waiting list of approximately six clients.  She said decision unit E-452 was based on the Assisted Living Advisory Committee model of approximately 45 slots and another 58 slots for the Strategic Plan for Seniors.  She said the Subcommittee should note recent information provided by the agency that indicated the recommendation could be delayed until January 2004.  If the Subcommittee approved that decision unit staff would work with the agency to compute the fiscal effects of that delay.

 

Ms. Brand said that decision unit E-459 dealt with funding for the personal assistance services under S.B. 174 of the Seventy-first Session.  She said decision unit E-459 proposed approximately $1.8 million in the General Fund to address 33 state-only CHIP clients on the waiting list for personal assistance services.  She said the Subcommittee should note that based upon recent correspondence dated April 11 between the Department of Human Resources and the Legislature, the Department proposed to phase in the requested number of clients over the first year of the biennium for both Aging Services and the Office of Community-Based Services (OCBS) due to the exclusion of funding for the waiting list in the OCBS budget.  The Subcommittee might wish to consider the following options for funding that decision unit:

 

• Option A - fund as recommended by the Governor with no adjustments.
• Option B - fund as proposed by the letter dated April 11.  The proposal recommended by the Department would reallocate to the OCBS $1.1 million of the current $1.8 million of the General Fund portion to address their waiting list and thereby reduce the General Fund total in that decision unit to $738,000.  There would be a supplement to that General Fund loss to Aging Services through a transfer from the Tobacco Settlement budget account in the amount of $595,000, which would reduce the amount available for Independent Living Grants from approximately $4.8 million as currently recommended in FY2004 to $4.5 million.  The ILG would be affected by $297,000 each year of the biennium.
• Option C - retain the $595,000 in the Independent Living Grant account that would change the phasing in of clients on the state-only client waiting list from all 33 clients by the end of the biennium to 21 clients by the end of the biennium.

 

Ms. Brand noted there were some other closing items to consider.  She said there was funding recommended under Title XIX for a Medically Fragile Case Manager and staff concurred with that recommendation.  The Governor also recommended the elimination of an accounting assistant since that position had been vacant for more than six months and staff concurred with that recommendation.  She noted a technical adjustment for the Medicaid CHIP waiver expenditures portions in decision E-902 that would reduce the funding requirement by $31,969 and $165,000.

 

Senator Rawson said they had worked very hard to get the Independent Living Grants yet they never quite came about.  He said the Subcommittee had laid that in its entirety to the affected individuals and they were really distraught to see that it might be pulled back from them.  Senator Rawson said that was one area where he would be willing to backfill with Tobacco Settlement money and put the item on the short list.  He said the Legislature was not obligated to go beyond what the state funded.  He recommended deferring the start date on Option B and giving the staff the authority to work out the details on the expansion of the Group Care Program and fund the Personal Assistance either with General Fund or with Tobacco Settlement funds.

 

Senator Cegavske noted that Tobacco Settlement money had been allocated to several budgets and wanted to know how much had been obligated.  She commented that if the tobacco funds were depleted the Legislature would have to turn to the General Fund.

 

Chairwoman Leslie said staff could prepare an accounting sheet showing where all the Tobacco Settlement money was allocated.

 

Ms. Brand said in reference to Tobacco Settlement funds they had approximately $6.8 million for FY2004 and $5.9 million in FY2005.

 

Senator Cegavske noted that the Subcommittee had set aside Tobacco Settlement funds for the last two budgets they had just heard.  Senator Cegavske asked if there were sufficient funds to cover beyond the current biennium.

 

Ms. Brand said the amounts projected for the Tobacco Settlement funds were for the current biennium only.

 

Chairwoman Leslie commented that the requested delays in decision unit E-451 were reasonable and that the Division had agreed to that strategy.  She said given the state’s financial condition she was willing to use the Tobacco Settlement funds as long as the Subcommittee kept the issue of General Fund funding in the forefront on their short list.  Chairwoman Leslie said she would support funding those items as recommended.

 

Senator Rawson moved to close Budget Account 101-3146 AS DISCUSSED.

 

Ms. Brand asked if Senator Rawson moved to close the account as recommended with no adjustments in decision unit E-459.

 

Senator Rawson wanted clarification that decision unit E-459 proposed to serve the 33 clients on the CHIP state-only waiting list.

 

Ms. Brand responded and said that Option B would take into consideration the reallocation of funds to the Office of Community-Based Services as well as Aging Services and still would serve 33 clients over a staggered period.

 

Chairwoman Leslie said that was the delay they were talking about and the delay in filling an administrative assistant position in decision unit E-451.

 

Senator Rawson reconfirmed that the additional 80 slots as recommended would not be added until October 2004.

 

Chairwoman Leslie also reconfirmed that that recommendation was in Option B under decision unit E-451.

 

Senator Rawson said with regard to the expansion of the Group Care Program staff needed the ability to work out the details with the Division.  He added that it seemed appropriate to fund the Personal Assistance Services as the Governor recommended.

 

Ms. Brand said Option A had $1.8 million in the General Fund allocated specifically for the 33 wait list clients as recommended by the Governor.

 

Senator Rawson said that Option C would backfill that with Tobacco Settlement funds.

 

Ms. Brand said that Option C was under the proposal by the Department of Human Resources to not backfill the General Fund loss.  She clarified and said Option C adopted the Department’s proposal and then modified it to not backfill the loss to the General Fund with Tobacco Settlement funds.

 

Senator Rawson said that would reduce the waiting list by 21 people.  He asked for clarification of whether or not Option A left funding for the Office of Community-Based Services (OCBS).

 

Ms. Sala said Option A left no funding for OCBS.  Senator Rawson said that was not desirable.  Chairwoman Leslie agreed with Senator Rawson.  Senator Rawson asked Ms. Sala for her recommendation.

 

Ms. Sala said the Division and the Department recommended Option B that would move their General Fund monies over to OCBS so they could serve their clients but would create a need for some funds so the Department had recommended using Tobacco Settlement funds for their needs.

 

Chairwoman Leslie noted that they had just done that in the previous budget account.  She said it was the same $595,000 that they just decided.

 

Ms. Brand said the $595,000 was discussed in Budget Account 3140 with final approval obtained in this budget account, so the effects would be felt here.

 

Senator Rawson said they were concerned regarding how the change to OCBS would affect the disabled community.

 

Ms. Sala said they had met with representatives to discuss how to share the Division’s funds to make sure that the disabled clients were served.  The solution was to request Tobacco Settlement funds to backfill the loss from the General Fund to that account.

 

Senator Rawson confirmed that the 33 waiting list clients would be served.

 

Ms. Sala confirmed to Senator Rawson the clients would be served.  She noted that the rate would be staggered and that over the biennium they would serve the 33 wait list clients and OCBS would serve their 30 clients.

 

Chairwoman Leslie stated that Senator Rawson’s motion was to close the budget with Option B and add the long-term budgeting issue to the Subcommittee’s short list.

 

Assemblywoman Giunchigliani seconded the motion.

 

Senator Rawson asked for clarification as to whether or not there was a loss or gain in savings to General Fund dollars.

 

Ms. Brand said under Option B there would be a reallocation of the General Fund.  She said it would not be a savings because the General Fund was currently allocated at $1.8 million and a portion of that amount would be reallocated to OCBS.

 

Senator Rawson reconfirmed that their budget closing would not decrease General Fund dollars.

 

Ms. Brand said there would be no loss to the General Fund.

 

The motion carried.  (Mr. Goldwater was not present for the vote.)

 

Budget closed.

 

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HUMAN RESOURCES

EPS/HOMEMAKER PROGRAM 101-3252

BUDGET PAGE AGING - 25

 

Ms. Brand introduced Budget Account 101-3252 and said that the program provided Elder Protective Services (EPS) and Homemaker Services for the elderly.  Funding was recommended from a combination of federal Title XX, General Fund, and Tobacco Settlement monies.

 

Ms. Brand said a closing issue dealt with expanding the Elder Protective Services Program in decision unit E-456.  The Governor recommended $246,000 in FY2004 and $312,000 in FY2005 in the General Fund in support of that expansion.  The expansion would fund 5.5 new positions, 3.5 social workers, and 2 intake workers with start dates effective October 2003 primarily for the Elder Protective Services Program.  Ms. Brand said, as indicated in earlier budget hearings, staff handled an average of 37 cases per month.  The Department wanted to reduce their caseload ratio to the national average of 25 cases per month.  The expansion as recommended would lower their caseload to 1 staff worker per 25 clients per month.  Ms. Brand noted that by statute, Aging Services was required to investigate elder abuse reports within three working days of receiving a report and the Division had indicated that they were currently at 50 percent of compliance with the requirement.

 

Ms. Brand said the Subcommittee might wish to consider the following options for funding that decision unit:

 

• Option 1 - fund as recommended by the Governor with no adjustments.  That would provide for 3.5 new social workers and 2 administrative assistants, and would reduce the caseload to 25 cases per month.
• Option 2 - reduce the caseload from the current 37 clients to 30 clients per caseload worker resulting in a reduction in caseload with a savings of 1.5 FTE.  That would be accomplished with two social workers and no change in administrative staff since currently existing staff was performing the majority of the intake functions.

 

Ms. Brand said the projected impact to the face-to-face investigations under that option would increase from the current 50 percent to 77 percent and would net a General Fund savings of approximately $81,000 in FY2004 and $100,000 in FY2005.  She noted under Option 1 the increase in the face-to-face investigations would go from 50 to 90 percent.

 

Ms. Brand said that other closing issues that the Subcommittee should note were that the Governor did not recommend funding for the Aging Services portion of the statewide cost allocation.  There was a $43,000 current allocation that was not funded in the budget account because federal fund availability was limited.  She said to fund the Aging Services portion of the budget, funds would have to come from its current source of Title XX or Tobacco Settlement funds.

 

Senator Rawson said they might run into problems with the Title XX and if there was a challenge from the federal funding the state would have to pay.  He said he did not want to use the General Fund but it would either come from the General Fund or Tobacco Settlement funds.  Senator Rawson asked if it was reasonable for them to progress toward an average of 30 clients per month with the current number of social workers.

 

Bruce McAnnany, Deputy Administrator, Aging Services Division, introduced himself for the record and said that reducing the caseload from 38 cases was a challenge.  He said they would like to meet the national average of 25 clients per caseload worker, but any reduction in the numbers served was a big jump for them.

 

Senator Rawson suggested they set a four-year goal to meet the proposed reduction.

 

Chairwoman Leslie agreed with Senator Rawson’s proposal.  She said she understood that was a considerable reduction but she believed they should try to accomplish 90 percent with face-to-face contact.  She said the clients were vulnerable elderly people in their homes and 50 percent was clearly not enough.  She said 77 percent was much better than 50 percent but would like the agency to reach 90 percent as quickly as possible.

 

Senator Rawson asked them to accept Option 2.

 

Chairwoman Leslie said that was acceptable with the Subcommittee’s understanding that in the next two years they would focus on budget options within the General Fund.

 

Senator Rawson moved to close Budget Account 101-3252 with staff recommendation of Option 2.

 

Assemblywoman Giunchigliani seconded the motion.

 

The motion carried. (Mr. Goldwater and Senator Raggio were not present for the vote.)

 

Budget closed.

 

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HUMAN RESOURCES

SENIOR CITIZENS’ PROPERTY TAX ASSISTANCE 101-2363 BUDGET

PAGE AGING - 29

 

Ms. Brand introduced Budget Account 101-2363 and said under that account there were no major closing issues.  Staff recommended an adjustment of $810,000 in FY2004 and $278,000 in FY2005.  She said the adjustment was for the projected amounts that would carry forward from FY2003 into the proposed biennium, and was based on statute indicating for that program that monies could transfer from year to year rather than reverting to the General Fund.

 

Ms. Brand noted that there was pending legislation under Assembly Bill 515 that proposed to revise the method of calculating refunds paid to senior citizens for property taxes paid on a graduated payment scale, and also to revise the qualifications for obtaining such refunds.  If passed, A.B. 515, as indicated by the Division, would have no fiscal impact.  In the event of unanticipated growth in the program, as a result of the change in the sliding scale, the Subcommittee should note that the Administrator might reduce the amount paid per claim or request additional funding of the program from the Interim Finance Committee.

 

Ms. Brand said decision unit M-200 factored in projected growth in the program based on growth in number of applicants, adjustment for the Consumer Price Index (CPI), and adjustment for property assessed valuation.  She noted a technical adjustment that recommended a 5 percent growth in the senior population and the numbers of ineligible applicants that resulted in a decrease of $64,082 and $80,927 respectively.

 

Ms. Brand noted decision unit E-300 had requested funds for a new server.  That request had been withdrawn because the agency could use existing resources until the next biennium.

 

Ms. Brand said staff concurred with the recommendations in the remaining decision units.  She noted an additional $16,000 in FY2004 and $24,500 in FY2005 for a 0.5 administrative staff due to projected program growth and $1,600 each year for travel expenses.

 

Senator Rawson said it seemed very reasonable to recommend the carry forward of unspent funds.

 

Senator Rawson moved that they close budget account 101-2363 with staff recommendations including the carry forward and technical adjustments for decision Unit M-200.

 

Assemblywoman Giunchigliani seconded the motion.

 

The motion carried.  (Mr. Goldwater and Senator Raggio were not present for the vote.)

 

Budget Closed.

 

********

 

Senator Rawson noted that over the biennium they had saved $3.9 million and were trying to do their job.

 

Chairwoman Leslie said they were doing their job and hoped they would therefore get some consideration on their short list.  They would have to talk to the Committee Chairman.

Chairwoman Leslie adjourned the meeting at 10:10 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

Catherine Caldwell

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                         

Assemblywoman Sheila Leslie, Chairwoman

 

 

DATE:                                                                             

 

 

 

 

                                                                                         

Senator Raymond D. Rawson, Chairman

 

 

DATE: