MINUTES OF THE ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session April 26, 1995 The Committee on Government Affairs was called to order at 8:07 a.m., on Wednesday, April 26,1995, Chairman Bache presiding in Room 330 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Douglas A. Bache, Chairman Mrs. Joan A. Lambert, Chairman Mrs. Deanna Braunlin, Vice Chairman Mr. P.M. Roy Neighbors, Vice Chairman Mr. Max Bennett Mrs. Marcia de Braga Mr. Pete Ernaut Mr. William Z. (Bill) Harrington Ms. Saundra (Sandi) Krenzer Mr. Dennis Nolan Mrs. Gene Wines Segerblom Mrs. Patricia A. Tripple Mr. Wendell P. Williams COMMITTEE MEMBERS EXCUSED: Mrs. Vivian L. Freeman STAFF MEMBERS PRESENT: Denice Miller, Senior Research Analyst OTHERS PRESENT: Bob Gagnier, State of Nevada Employees Association; Wally Tarantino, Attorney at Law; Adair Dammann, SEIU; Dick Gleed, Operations Engineers Local #3; Barbara Willis, State Personnel; Danny Thompson, AFL/CIO; David Howard, Reno Sparks Chamber of Commerce; Carl Dodge, citizen; Punam Mathur, Las Vegas Chamber of Commerce; Samuel McMullen, Las Vegas Chamber of Commerce; and others listed on Attendance Roster (Exhibit B) Chairman Bache opened the hearing on all three bills as they all dealt with collective bargaining for state employees and indicated a subcommittee would be appointed. ASSEMBLY BILL 464 - Authorizes collective bargaining for certain state employees. (BDR 23-936) ASSEMBLY BILL 465 - Authorizes collective bargaining for certain state employees. (BDR 23-795) ASSEMBLY BILL 466 - Authorizes collective bargaining for certain employees in classified service of state. (BDR 23-496) Adair Dammann, Executive Director of the Service Employees International Union (SEIU), read from prepared testimony in support of the bills (Exhibit C). Together with the Nevada Corrections Association and the Nevada Highway Patrol Association, the union represented several thousand state workers. Ms. Dammann`s testimony pointed out the differences as well as the similarities in the approach and goals of all three organizations. Some of the methodologies each group has chosen within the bills differ and they were aware of them. They believed they could work together to come to a consensus around a single version of the collective bargaining bill for state workers. At the very least, if allowed to have time for subcommittee discussion, they would be able to come up with a totally unified approach or at least with a very carefully and cordially explained set of plans of where they have agreed to disagree. What they all adamantly believed was that state workers deserve collective bargaining and need it over wages, benefits and working conditions. They believed state employees deserved free elections with bargaining units defined by community of interest among affected employees. They all supported binding arbitration to resolve potential impasse situations between the state and the unions. Ms. Dammann expressed that state employees are disenfranchised and denied a right granted every other worker in Nevada: the right to collective bargaining. Ms. Dammann indicated three ways collective bargaining would be of benefit to state government: 1. It would provide a structured relationship and create channels of communication between employers and workers. 2. Collective bargaining would bring mutual accountability to the relationship between workers and their employers. 3. It would stabilize, rationalize and modernize the personnel system of Nevada State Government. Ultimately, Ms. Dammann stated, collective bargaining would produce a more productive work force. Wally Tarantino, an attorney representing the Nevada Highway Patrol Association, spoke in favor of A.B. 465 on behalf of the association who sponsored the bill. Mr. Tarantino echoed many of the comments of Ms. Dammann. He reiterated there were three versions of the bill and the parties had met prior to the meeting, recognizing the differences in the versions of the bill and agreeing the goals were the same; achieving collective bargaining for all state employees. He was extremely comfortable and confident that the differences would not be insurmountable and given enough time and assistance of the subcommittee, a consensus bill would be arrived at. Assemblyman Bennett asked what was considered a reasonable amount of negotiation time before going into arbitration. He also noticed a list of what the state cannot do and wondered if there was a list of things the employee organization could not do. Mr. Tarantino said the first question was difficult to answer because every negotiation takes on its own aspects. The reasonable period of time would generally be when both parties have reached an impasse. Basically, the parties involved are in control of when the negotiation process has been exhausted and when they would have to look at other means of dispute resolution whether it would be mediation, fact-finding or arbitration. Mr. Bennett agreed that was logical. As far as the second question, Mr. Tarantino mentioned looking at A.B. 465, page 10, section 32, where it points out it was a prohibited practice for an employee or employee organization to willfully engage in certain negative activities and the language is the same for both the state and employee organizations. Bob Gagnier, State of Nevada Employees Association (SNEA), spoke in favor of A.B. 466. It was sponsored by SNEA. The bill proposes to create a process for collective bargaining for classified state employees. SNEA has previously passed collective bargaining bills in the Assembly in 1973, 1977 and 1983. In those instances, the bills were passed in the Assembly but never allowed to come to a vote in the Senate. In 1991, the Legislature did pass their bill after extensive deliberations in both houses but it was vetoed by the Governor, ostensibly because it would have confused the budget process. State employees are the only group of workers in the state of Nevada who do not have the right to collective bargaining. When the Legislature passed the Dodge Act, NRS 288, in 1969, it saw fit to exempt its own employees. In earlier attempts to pass a collective bargaining bill for state workers, a former Senator asked Mr. Gagnier why a collective bargaining law was needed as such activities were already being engaged in with the administration. In some ways, this was true. SNEA has met with governors and their representatives for discussions regarding legislation ever since 1971. In the past, a position was created in the Governor's Office to function as an employee relations officer. It existed for a number of years, slowly eroding to the point where no one could say who now fills that position as it has become another executive assistant position; even though it was created by the Legislature for the purpose of being an employee relations officer in 1979. Mr. Gagnier referred to some past legislative years when certain discussions had taken place regarding collective bargaining (Exhibit D). SNEA has asked for the administration to meet and confer each summer prior to a legislative session. Sometimes they have; in recent years they have not. And even when they have met with SNEA there was no way to resolve any dispute or to enforce an agreement once reached. Mr. Gagnier stressed there has been no way to bring management to the table to negotiate working conditions or salaries. In 1989 the legislature adopted a SNEA amendment to the salary law which says the Director of Personnel must make recommendations to the legislature for salaries based on a variety of factors including salary surveys, turnover, difficulty in recruitment and cost of living. No such recommendations have ever been made. The need is real, Mr. Gagnier emphasized. The system of informal negotiations was no longer working. It was time for state employees to have the same rights as all other citizens. Assemblyman Ernaut stated every session the legislature hears about the restraints NRS 288 places on local governments. Depending on which city or county government talked with across the state, 65-85% of their budgets are earmarked due to the ramifications of NRS 288. This has placed an enormous burden on local governments to creatively administer and finance their budgets. It has placed a burden on the state as well when it has to make up for lack of funds in other areas. Essentially, Mr. Ernaut said, all three bills were similar to the provisions of NRS 288. As a matter of public policy, Mr. Ernaut questioned how their groups justified that restraint being placed upon the legislative committee. Mr. Gagnier indicated the process of collective bargaining and of law in general was one of restraint. There was a provision in the bills where in those matters involving economics or changes to state law, all that has been added was whatever agreement is reached or whatever the arbitrator's decision goes into the state budget but the final authority will rest with the legislature as to whether they appropriate the money or change the law. Mr. Gagnier pointed out the legislature has repeatedly told them in order to get the desired results, it has to get into the state budget. The Governor's budget normally changes only about 5%. If an item is not included at that time, it will not be included at all. The final decision to pass any measures still rests with the legislature. Mr. Gagnier indicated the only restraint he could see was that it would keep management from being arbitrary. He felt restraints were necessary to keep employers from taking advantage of employees. Mr. Tarantino suggested the 65% figure used by Mr. Ernaut was even higher in some jurisdictions but it did not hinge on whether it was in the public or private sector or whether collective bargaining was permitted or not. The significant outlay of any employer would be for wages and fringe benefits. The only difference was how the numbers involved were arrived at. All economic items, no matter how they were decided, would have to go before the legislature for final approval. This would not be unlike the provisions of NRS 288, whether the negotiations were done at the city, county or state level. When tentative agreement has been reached, it would be necessary for the agreement to be ratified, approved and adopted by the governing body of the bargaining unit and by the local government involved. Perhaps some of the restraint should be evidenced at that level, Mr. Tarantino suggested. The process of collective bargaining itself cannot be blamed. As a small business person, Ms. Dammann indicated she had a lot of binding contracts out as part of the budget making process. Every business operation has contract commitments and it was always better for business in general to have those contracts as clear and explicit as possible. She pointed out the state of Nevada is a large business and would definitely benefit by having contract relations with its workers. Mr. Ernaut responded small business people have built in costs, but make their decisions based solely on their own budgets. He mentioned in 1991, there was one enormous difference between that bill and the bills being heard today; there was no provision for wages. Mr. Gagnier retorted there certainly was a provision for wages in the bill of the 1991 session. The bill did include negotiations on wages and benefits, that was why the Governor vetoed it. What was eliminated in the process was the binding arbitration of the Governor on wages and benefits. Mr. Ernaut said that was exactly his point. Arguably, one could say that without binding arbitration, there was really no provision to enforce changes in wages and benefits; on working conditions there was. That was the difference between that bill and these bills. If the Governor vetoed that bill, Mr. Ernaut remarked, why would he sign these? Ms. Dammann replied the Governor would have to speak on the matter, but he had already made it clear that if a consensus could be reached by all concerned parties, he would sign it. Mr. Ernaut was surprised. Assemblyman Nolan was interested in the salary survey Mr. Gagnier had mentioned and wanted to see it. He also asked if it had taken into account a comparison of similar jobs and benefits in the private sector. Mr. Gagnier responded that the salary survey was conducted every two years by the Department of Personnel. This was required by law. The survey included private firms and local governments. Another survey was conducted by SNEA as a comparison to show trends, but it was only done among major local governments within the state on jobs that are comparable in each jurisdiction. Overall, the survey showed that in the state of Nevada, state employees average 13 1/2% less than their counterparts in public and private employment. What was most notable, Mr. Gagnier pointed out, was that in the last three surveys, there has been a noticeable degeneration in salaries. In 1990, state employees averaged 6% behind other comparable workers. In 1992, the average was 9%. Currently it is 13 1/2% behind. Mr. Nolan questioned why California, one of Nevada's major competitors, was left out of the survey, and how would it have affected the survey. Mr. Gagnier said the state of California declined to participate in the survey. They are the closest state to Nevada's population centers. There are many professional positions in Nevada State Government that are better compensated in California, even with their higher tax rates. Even when California is included in the surveys, they have a methodology used that drops their impact in the survey and SNEA disagrees with that. If they did not drop their impact, the state of California would dominate the survey as they have about 140,000 state employees. Assemblyman Harrington asked what the three severe differences were between the groups' bills. Mr. Gagnier said the first difference was the body that would administer the law. SNEA's bill vested their preference in the Personnel Commission. The other two bills would create a brand new board. Second, SNEA's bill specifies the bargaining units. A.B. 464 would leave it up to the newly created board. A.B. 465 specifies some minimum bargaining units and then leaves it up to the new board to create more. The third difference was A.B. 466 called for a single arbitrator while the other two bills called for an arbitrator or an arbitration panel. There were a lot of other small things, but they were not seen as problems. Mr. Gagnier added that Nevada was in the minority because 26 states currently had collective bargaining laws. Assemblyman Krenzer recalled in 1991 there was testimony that dealt with state personnel and relationships with department chiefs where employees had testified as to how difficult it was to get basic work provisions accomplished. There was widespread support at that time, she said, for collective bargaining. Mrs. Krenzer wanted to know if that had changed since 1991. Mr. Gagnier said things have not changed. He mentioned what Mrs. Krenzer was remembering was testimony from employees of the Mental Health Division and from the Department of Prisons on the methodology of assigning shifts and days off. SNEA had a bill that same session which the Government Affairs committee killed at that time to allow employees to choose their shifts and days off according to their seniority because that was a negotiable issue. Mr. Gagnier said those were little things, working conditions issues. He felt that was why the extensive amendment in 1991 included the provision for arbitration of working conditions. Mrs. Krenzer did not think those were little things at all. She thought some of the issues raised were major and affected the functioning of state government. Ms. Dammann interjected this was what she had referred to as the crazy quilt personnel system in the state of Nevada. The authority on something like shift scheduling did indeed rest with the appointing authorities of state government, of which there were a plentitude. In some facilities, there were labor management committees that had signed off on new procedures for their facilities on how shifts were assigned. In other places, there has been an ongoing fight for workers' rights that has resulted in nothing tangible. The amount of time spent by SEIU fighting for workers' rights on a site by site basis would be an embarrassment to the taxpayers of Nevada. Furthermore, to think about how much time the legislature has spent on issues which can be settled in the management arena, taxpayers would be appalled at such a waste of valuable time. Assemblyman Lambert spoke of the separation of powers between the Governor, the executive branch and the legislature. She mentioned Mr. Gagnier's point that if collective bargaining were permitted and a binding arbitration award was made prior to a legislative session, the legislature would have to agree or change the law. Mrs. Lambert requested an expanded explanation on how this would work. Mr. Gagnier replied the process would be different but it would not be complex. He said if there were a disagreement and it went to impasse then to arbitration; the only thing binding of the arbitrator's decision is it would mandate the Governor to put the item into the budget and/or it would mandate him to support it in the Legislature. The Legislature can still change it. In the event of an arbitrator's decision that went against the administration there would be nothing to prevent that administration from asking the Legislature to kill the bill. Mr. Gagnier asked Mrs. Lambert if that explanation helped. In reading the bills, Mrs. Lambert replied, she thought they were dealing more with the Governor actually signing a contract and was having trouble with the concept of the Legislature breaking that contract. A.B. 466 would require the Governor to sign and enforce the contract, Mr. Gagnier stated, but there was also a provision in the bill that says if the Legislature failed to agree to something in the contract, then negotiations would resume within the framework the Legislature had adopted. That was not an unusual practice. Mr. Gagnier indicated that was why SNEA felt NRS 288 would never work for them. The time limits were not aimed at state government and did not fit well. Local government employees deal with only one body that is both executive and legislative. State employees have to deal with two separate entities. They must first negotiate with the administrative body and then try to get it implemented by the legislative body. He felt that had been recognized in these bills. Mrs. Lambert reiterated basically, for example, if the Governor were to grant a certain amount of money for state workers, it would be put in the budget and passed on to the Legislature. Then the Legislature could say no, they wanted third grade class size reduction and another prison built so we will not spend that money for state workers. She shuddered at the political ramifications of such an action, but confirmed they would be free to do that. Mr. Gagnier said yes, they would be legally empowered to do that. He also stated they would make every effort to prevent something like that from happening, but what the Legislature says, goes. Mr. Gagnier indicated the Legislative Counsel Bureau should be consulted if there were any doubt in this matter. Mr. Ernaut read from (Exhibit E), a document prepared by State Personnel, and noted it said none of the bills were as clear as they could be and the Legislature was not required to approve any settlement requiring legislative action. Mr. Gagnier had not seen the document but stressed the intent of A.B. 466 was to leave no doubt in anyone's mind as to the process of collective bargaining. Mr. Gagnier also mentioned the Legislature would not have control over the entire contract. If an agreement was reached on issues that were not subject to legislative action, for instance working conditions, that would be outside of the legislative purview, but economics and statutory changes would have to be approved. Mr. Ernaut stated there was already a precedent set by labor groups suing the Governor over a broken promise or contract regarding wages so he was concerned that if the Legislature did not approve some sort of binding arbitration it would lead to many more lawsuits and dollars spent. He was confused that if the Legislature did not approve the binding arbitration and everyone went back to the bargaining table, the negotiations would be with the Governor who would be the wrong entity. Mr. Gagnier told Mr. Ernaut the collective bargaining process was give and take. Compromises would be agreed upon by both sides. Then, the Legislature could step in and change things. That would be the time to go back and re-negotiate items the Legislature had already approved. Mr. Gagnier said take insurance for example. A joint agreement had been reached on a level of benefits for health insurance which cost $300. The Legislature would only give $290. They would all have to go back to the bargaining table and figure out where to eliminate the extra ten dollars. Mr. Ernaut spoke of a real life example. Currently, he said, state employees were asking for a 12% raise in pay. As we all know, what is in the executive budget is much less. If binding arbitration were in effect, the Governor would be bound to push for that 12% raise. The Legislature then decided to give only a 4% raise, but agreed to all other conditions of the contract. The situation would become a fight over dollars. Mr. Ernaut felt to take the issue back to the Governor after the legislative session was over would be an enormous waste of time and would not accomplish much. He said the only avenue he could see at that point would be for SNEA to file a lawsuit. Mr. Gagnier indicated if the bill was passed there would be fewer lawsuits. In 1991, if SNEA had collective bargaining, they would not have had to sue the Governor to get the money the Legislature had appropriated for them at that time. If they had collective bargaining, he would have had to sit down and negotiate with them whether he could take that away or not. Mr. Ernaut stated if the Governor decided arbitrarily he would be bound by the arbitration whereas the Legislature was not. If the Legislature was not bound, what avenue did they have? Mr. Gagnier pointed out the only avenue the Legislature had was to assure that for any final bill that came out of the Legislature, it was clear they had passed it on legal and statutory grounds. Mr. Tarantino referred to lawsuits indicating in states that do have collective bargaining for state employees, once the parties buy in to collective bargaining, have a grievance arbitration procedure in the collective bargaining agreement and there is a dispute relative to wages or working conditions, those parties are relegated to use and exhaust those procedures and not run to the courthouse and file lawsuits. In most instances, those parties would be barred from filing lawsuits because they had bi-laterally agreed to adopt a resolution process of grievance arbitration. There would actually be fewer lawsuits because there would be a vehicle for reconciling disputes other than through the courts. Mr. Ernaut agreed with what was said except for one point. He said in nearly all of those cases, each entity would be bound. In the case here, there is one enormous power, two-thirds of the Legislature, that would not be bound; that would be the difference. Of course there would be fewer lawsuits when both parties are bound, Mr. Ernaut reiterated. Mr. Tarantino emphasized the parties would not be bound if the law specifically stated that in regard to economic issues, the legislative body did not have to adopt that appropriation and could come up with a different figure. This should provide enough of a comfort zone to prevent lawsuits being filed over whether or not a contract was breached. He also commented on the fact that it would not be futile to go back to the bargaining table because perhaps some of the bargaining units would want to spend the allotted money differently. Once the parties know what the parameters were, their focus and priorities could change. Mr. Ernaut did not disagree. He was only speaking of a straight salary discussion. Ms. Dammann remarked that those who had participated in collective bargaining in the public sector during the past couple of years unfortunately have had to participate in some really rough discussions about tightening resources. The fiscal crisis in the public sector has reached universal proportions in this country. The piece that was missing in Nevada was the lack of a structured role in the budget debates. She has had very difficult union membership meetings in several states and has found that people who work for the entity have to own the fiscal situation of the entity. State workers are frustrated and angry and tend to disown the decisions of the Governor and the Legislature because they have no role in the fiscal debate. Ms. Dammann pointed out people become more responsible and accountable to the fiscal realities they are living with in a collective bargaining context. Mr. Ernaut agreed. Mr. Bennett questioned how this proposed legislation would affect the Governor's ability to make the dollars fit with what he has to work with. Mr. Gagnier said that was a tough one because in the 1991 lawsuit against the Governor, the law being spoken of was challenged, NRS 353. The Supreme Court unanimously agreed with SNEA that if the Legislature passed something very specific, not an overall appropriation, the law could not be eliminated. Mr. Gagnier mentioned the law itself had constitutional problems and the Supreme Court has agreed. Mr. Bache went back to Mr. Gagnier's reference to sick days and asked if the issue had been negotiated with the Governor instead of asking the Legislature to change the law, more than likely they would have asked for a repeal of the statute so the contract would apply. Mr. Gagnier responded it would depend a great deal on how it had been negotiated with the other side. After that, it would be a matter of policy before the Legislature whether they wanted to give up their control over that issue or not. Mr. Gagnier indicated a great deal of the opposition to the current proposal in the areas of salaries and wages was coming from legislators who did not want to relinquish their control and fear the Legislature would become just a rubber stamp. Mr. Gagnier said that was not the case. Negotiation would be the preferred method. Dick Gleed, representing the Operating Engineers local #3 and the State of Nevada Peace Officers Association, supported the three bills. He commented that in the attempt to obtain a collective bargaining bill for state employees during the last four sessions, he had never seen the cooperation that was being displayed at the present time between the various organizations representing state employees. He was encouraged and energized by the enthusiasm and willingness on the part of the various entities to find common ground. They were optimistic at being able to find solutions for disparate views where noted. He encouraged the formation of a subcommittee to further examine these bills and work at arriving at a consensus bill. John Graham, Vice President of the Communication Workers of America, local 9413, represented the trades employees of the state printing and micro graphics division in their support of collective bargaining. They thought the differences each group had could be ironed out in subcommittee and urged passage of the bills. Danny Thompson, Nevada State AFL/CIO, said this was an historical time to see all the various groups together supporting the same issue. All those who testified for the bills were affiliates of the Nevada AFL/CIO. Mr. Thompson indicated they were in favor of collective bargaining and applauded the mention of a subcommittee to resolve all differences and bring a consensus bill everyone could live with. He said state workers were treated differently because they were not entitled to the opportunity for collective bargaining and that should not be the case. He felt all concerns could be addressed and an agreement could eventually be reached. Carl Dodge, former senator from Fallon, authored this piece of legislation 26 years ago. At that time, he related, a collective bargaining bill was passed for firemen. He had opposed that bill on the floor on the basis that if it was going to be done at all, it should include all employees, not just firemen. Governor Laxalt, incumbent during that time, vetoed that bill for the same reason. Mr. Dodge knew something had to be done to establish collective bargaining and he developed a bill of his own that was the first all- inclusive local government employees legislation in America. New York had a bill for teachers and there were some police and fire bills around the country, but nothing all encompassing. In making a determination on who would be included in the bill, he gave every consideration to state employees but it always came back to him that ultimately, negotiations would have to be undertaken with the Governor and the Legislature. That was the only reason state employees were not included. Mr. Dodge indicated there was a distinction between local and state government collective bargaining. He said in most cases, the money to fund any bargaining agreement was locally raised. It is not usually state money. Local county and city officials, aware of their own budgets and financial requirements, were in the position to engage in collective bargaining. The original bill was a simple bill. All it did was require local government management to negotiate with employees. Beyond that, it was open-ended. There was an advisory mediation provision and an advisory arbitration provision. The bill was tested in the Supreme Court who knocked out a very important provision that really limited the local bargaining to wages, hours and working conditions. John F. Kennedy was President at that time and he had signed an executive order requiring bargaining by the federal government with federal employees. Mr. Dodge used the exact wording of what he had in his executive order about the limitations on negotiation. That was knocked out by the Supreme Court as being a nullity. When that happened, it opened up a Pandora's Box as far as the expansion and details of collective bargaining. Mr. Dodge said he still had the same view on the issue as he did 26 years ago. He stated ultimately, state employees need to bargain at two levels; first with the Governor and second with the Legislature which is required under the constitution for the appropriation of money. He did not think there should be any kind of limitation or cloud on those authorities based on some kind of bargaining agreement reached with state employees that have the tendency to mandate the Governor and potentially the Legislature. He thought there should be considered decisions, particularly on the part of the Legislature, about how money is to be allocated. The system has been in existence for 131 years and has served us well. The Governor needs to have flexibility regarding his priorities and not be constrained or restricted in that area. Currently, it seemed to Mr. Dodge, that educational projects were a priority in Nevada and perhaps state employees have suffered to a degree because of those priorities. He said it comes down to where the fundamental constitutional responsibilities lie with the appropriation of money. He stated we had to assume the Governor would do the best he could on behalf of his own executive department, which would be the state employees. The Legislature, without any constraints, needs to be in a position to make judgements about how they are going to appropriate the money for all the activities they have to sustain with public funds. He felt the University system should be included as they are such large users of public money. He mentioned students were having a hard time completing classes there due to financial problems in the university system. Mr. Dodge commented on A.B. 466 where the Governor would be forced to sign any agreement made between the parties and submit a budget based on the cost of that agreement, which he felt was a constraint on the Governor that should not be there. As far as arbitrators were concerned, Mr. Dodge had watched with interest over the years on local government negotiations and brought up the point that there has to be preliminary determination made as to the financial ability of the state to carry out the negotiated agreement. He mentioned many situations where an out-of-state negotiator comes in and can always find the financial ability, but in many cases, it is at the expense of other priorities the local government may have. Once again, Mr. Dodge stressed there should not be any constraints on the priorities of either the Governor or the Legislature. Assemblyman de Braga expressed her happiness at the presence of Mr. Dodge and thanked him for sharing his expertise and knowledge on the bills at hand. Mr. Dodge said, interestingly enough, he had spent a lot of time in the late sixties going across the country talking to people who had experience in the collective bargaining area. In setting up the legislation, he gained a lot of knowledge from those he had encountered. He also attended a conference in Denver, Colorado on the subject and he learned a lot there. When he returned from his trip, he consulted a bill drafter and introduced the legislation. He said the 26 years this bill has been in existence, there has never been a strike in the public sector and that was a plus. Barbara Willis, Nevada State Personnel, shared Governor Miller's sincere interest in developing and maintaining constructive working relations with Nevada's employees and labor representatives. Governor Miller and the Department of Personnel had met with state employees and their representatives to discuss numerous issues of concern. These ranged from developing guidelines for use of administrative leave for union business to addressing specific employees' concerns within various agencies. The Governor has promoted, recognized and rewarded excellence in the workplace and has proposed a significant increase in the 1996 state's employee development program. He has made both himself and his staff available to respond to both employee and management concerns. Most recently, he requested the Department of Personnel to propose regulation changes that would reverse a long-standing policy by establishing the right of employees to have representation at pre-disciplinary hearings. The Governor highly values state employees and the contributions they make. Mrs. Willis referred to a comparison chart (Exhibit E) to illustrate the similarities and differences in each bill. She stated regarding collective bargaining, the Governor was open-minded. However, he feels that if there is to be collective bargaining, it is critical that all interested parties be treated fairly in the process and are unified. There has to be one single bill the Legislature can live with and any bill receiving approval take into account the scope and complexity of the state's budget. Mrs. Willis asked the committee to keep in mind that any approved collective bargaining bill would have fiscal impact that would be beyond any contractual terms that would be reached. The budget would be required to be adjusted accordingly. Although detailed fiscal notes were available, the final cost would not be known until the bill was finalized and agreed upon. Mr. Ernaut was confused on the Governor's stand because if he vetoed the bill in 1991 that had no provisions for binding arbitration for wages and benefits, why would he sign a bill today that does have binding arbitration for wages and benefits. Mrs. Willis indicated the Governor has never been opposed to collective bargaining. His veto of that 1991 legislation was due, in part, to the strong opposition it received from all the local unions. Many felt that bill was poorly drafted, it disenfranchised other organizations that represented state employees and it had not been reviewed by the money committees even though it had fiscal impact. Mr. Ernaut mentioned he read the Governor's veto summary and it was very dissimilar to what she had just said. Mrs. Willis retorted her comments were taken directly from the veto summary. Mr. Ernaut told her the specific issue was cut and dried; it was a wage and benefit argument. Mrs. Willis replied perhaps she had read it a little differently and perhaps he has changed his position in that regard. There was also a key point at that time of there being a single agent and a single unit, which was not the case in the present bills. Mrs. Lambert said there was no fiscal note in the book for A.B. 466; was one submitted? Mrs. Willis said there was one submitted for each of the three bills. Mrs. Lambert would check on that. Mr. Bennett questioned the range of costs for the fiscal notes. Mrs. Willis remarked the cost for administering the programs alone would be approximately $400,000 to $500,000 in the first year. David Howard, Reno Sparks Chamber of Commerce, spoke in opposition to the bills. He presented the legislative policy of the chamber (Exhibit F) to the committee and referred to page five which noted the Chamber believed compensation in the public sector should be fair and just. Public sector employment, due to its nature and regulation, has a built-in factor of high employee value that does not necessarily exist in the private sector where compensation is controlled by the market. Public sector employees have a greater job security which has a high value. Mr. Howard told the committee Mr. Dodge had referred to legislation he had crafted that has become known as NRS 288. Although his view was it had worked really well over the years, especially since there has never been a strike, Mr. Howard disagreed. He has served in local government which he felt had been ravaged by NRS 288. The current bills are nothing more than NRS 288 with a state bent, Mr. Howard intimated. He said many local governments were strapped and collective chaos reigned in their fiscal realms. As many as 70-90% of local governmental budgets were under NRS 288 and they did not have any flexibility. He stressed the state would not have any flexibility either under the current bills. He was there to tell the committee that NRS 288 was completely devastating local government finances. He said the same problems were now here at the state level. Mrs. Lambert asked Mr. Howard in his experience with NRS 288, did he think the taxpayers had a meaningful role in the process that exists in that statute. He answered certainly not. He said negotiations are done behind closed doors and if there is a problem and it does come out publicly, it is couched as an argument between the city councils and the union representatives. The public has never been involved in that. Mr. Ernaut wanted to set the record straight. He mentioned the original legislation of NRS 288 was very constrictive. The Supreme Court struck down many of the limitations that were placed in the original 288. He said what exists today in NRS 288 and what it has manifested itself into was not a reflection of the original provisions of the Dodge Act. He pointed out NRS 288 was never meant to be what it has become; the Supreme Court is at fault for that. Mr. Howard agreed with Mr. Ernaut and added weak, local representation and aggressive negotiations on the part of the unions have had something to do with that as well. The practice has overwhelmed 288 and agreed the original legislation would have been much more effective. Mr. Bennett asked Mr. Howard if he would prefer to see any bargaining legislation be subject to the open meeting laws. Mr. Howard responded in the affirmative. Punam Mathur, Las Vegas Chamber of Commerce, spoke in opposition to the bills on behalf of the 4200 member business community of southern Nevada. She mentioned their task force had carefully examined the three bills. The first point she made was that raises were not the issue; it was process. The Legislature will always have to deal with raises and salaries each session. There is a current process which guides those deliberations and what was being suggested today was a new process for having those deliberations. The task force simply looked at the process. Ms. Mathur shared some data gathered by the task force from a 1994 occupational wage survey conducted by the Nevada Department of Employment, Training and Rehabilitation. The survey broke down private sector employment and compared it with public sector employment in terms of hourly compensation. Local government came out ahead as far as payment of top wages. The task force could only draw one conclusion from the study and that was the current process is not broken. Another major consideration Ms. Mathur had was the current process also allowed the legislative body as well as the executive branch a degree of flexibility. Ms. Mathur likened the legislative tasks to juggling several balls in the air at the same time; balancing the budget, population growth and its ever-changing needs, revenue availability and changing issues and programs. In their estimation, the process proposed by the three bills would render the Legislature less flexible and less responsive to those needs. She did sympathize with state employees' grievances over morale, wages and raises and suggested lessons could be learned from the business community and offered to share that experience. The bills, however, would not do the job. Mrs. Krenzer thought a lot of the reasons collective bargaining was desired was due to the outcry of employees who do have low morale, no salary increases and are frustrated because they are not included in the decision-making processes at all. From the testimony heard in 1991, Mrs. Krenzer said it was overwhelmingly evident that state employees were excluded from major functions of their jobs. She pointed out state employees wanted more streamlined processes, acceptance of their ideas, more accountability and more responsiveness at that time and State Personnel was oblivious to those concerns as well as many agency directors. Mrs. Krenzer felt there were possible solutions to many of the problems presented and perhaps that could be addressed in the subcommittee meeting. She questioned if all other public employees are allowed collective bargaining, why not state employees? Ms. Mathur indicated they did not see a problem during their analysis of the issues. She said many local budgets are in a fixed position and therefore very rigid. Most local governments allocate anywhere from 65 to 90% of their budgets for personnel/payroll costs. This makes it difficult for money to be made available for ever-increasing and ever-changing needs. It also makes it difficult for them to be responsive to all of the needs of their employees. It was a community problem that all parties had to work together to resolve. She said perhaps the problems need to be approached in a different way, rather than the same way which has now resulted in a new set of problems in cases where it has been implemented. Mrs. Krenzer did not know what the private sector might have as a ratio of salary to gross income. She asked about the mention of 65-80% that was locked in. Ms. Mathur responded that was heard earlier. She said that most payroll costs would range between 75-85%. Mrs. Krenzer iterated that was not unusual. No, Ms. Mathur stated, it was not. She pointed out that was the nature of the service sector; all you had were the people. Effort was always needed to see they received appropriate credit and were empowered to do what they needed to do. At the same time, flexibility needed to be maintained. Mr. Harrington asked Ms. Mathur if benefits had been included in their survey of public employees, would the expenditure costs have been more expensive. Ms. Mathur did not have the statistics but mentioned public sentiment suggested government was perceived as a fine employer relative to the fringes and benefits that are provided. She said government benefits were usually viewed as better than those in the private sector. Mrs. Segerblom noticed salaries were decent but there were other items that needed to be addressed to improve morale and decrease frustration levels in state employees. Ms. Mathur remarked that was an important point; salaries were not the only problem being dealt with in these bills. She stated as enlightened employers, they know that communication is critical and it needs to occur in two ways. Morale is also critical and employers and workers need to strive together to see that it is raised. Employers see these things as management challenges and not appropriate measures for legislation. They did not believe good morale or communication could be mandated. Quality is what dictates the success of those things. Ms. Mathur absolutely agreed communication and pertinent other issues needed to be examined because those problems do exist; they would not want to undermine them or pretend they did not exist. They would simply suggest a legislative solution was not the answer. Mr. Ernaut said it was important to note that one of the major issues at hand was the comparison of the legislation that was passed in 1991. That addressed one very important point that unions and a lot of management agreed upon; it forced the Governor to negotiate. What it did not do was have binding arbitration for wages and benefits. As these issues are reviewed by subcommittee, Mr. Ernaut stressed people must understand that the argument is not whether or not people agree with state employees being able to negotiate, but to what extent the negotiations are taken via binding arbitration; that is the critical issue. He felt there should have been negotiations all along. He voted to override the Governor's veto in 1993 because he believed it was a compromise, it forced the Governor to negotiate. But it did not tie anyone's hands to binding arbitration, the essence of this debate. He said to expand on all these other issues was to be intellectually dishonest. Mr. Nolan agreed with Mr. Ernaut on binding arbitration. He also commented that private enterprise was in the same position as the public sector in that they did not have the ability to negotiate hours, benefits or wages. Job satisfaction has to come primarily from within and the employer's responsibility was to make working conditions as satisfactory as possible so employees would want to do their best and frustration levels would be kept at a minimum. Ms. Mathur pointed out one of the measures being considered by the Legislature would implement a bonus system for state employees as positive reinforcement for exemplary behavior. They were very much in favor of such a plan. Sam McMullen, Las Vegas Chamber of Commerce, added a few comments about the process being discussed. He said the heart of the matter was that the bills would change the process that is currently in place. He reiterated many of Ms. Mathur's points. He envisioned a system where there would be discussion, negotiation and defined rules for collective bargaining. Mr. McMullen pointed out there is discussion in the current system in terms of budgets and levels of salary and benefits. He reiterated the issue was a high level of frustration among state workers over many of these same issues. Consequently, the attempt to leverage that frustration was to institute this legislation. He indicated, however, that what was happening was decisions were being forced and new processes were being mandated. When this occurs, the dynamics and advantages change. The political process is also changed. By definition under any three of these bills, the current process would be forced into an accelerated decision on the distribution of a major portion of the state budget. Even as the Governor goes through all agency needs, requests, critical issues, priorities of the state, and economic forecast for the future, when attempting to balance all that, it takes a great deal of input from many areas and individuals. To force these extremely important issues to resolution through binding arbitration would be to compel things to happen that otherwise may not occur in the current process. He said people want salary increase and the current system does address those issues although not the way they want it. That would happen under any system; some will be content and others will not. Under the new process proposed by these bills, the Legislature would take on a whole different dynamic. They would be faced with a critical decision on what to do with huge portions of the budget. The political battle would be nearly the same, Mr. McMullen stated, but the dynamics would be interestingly different. Mr. McMullen mentioned items excluded from the bills such as the revenue pool for necessary expenditures and the fund balance. He thought that was fundamentally the last issue; the ability to pay. This would take a very significant piece of the budget and almost forces it before the ability to fund it is completely known. He said as difficult as it was for state workers to wait, he felt collective bargaining would do no more than change the dynamics, mandate things and cause all sorts of political issues. He did not think it would make much difference to those who had to make the decisions, the Governor or the Legislature. It may just be a trade off. Carole Vilardo, Nevada Taxpayers Association, told the committee they were opposed to the bills and agreed with previous testimony as to the reasons why. Mr. Bache closed the hearing on the three bills, A.B. 464, 465 and 466. Chairman Bache then appointed a subcommittee to thoroughly investigate the debated concerns on the measures. The subcommittee would be composed of Mr. Bache, Mrs. Lambert, Mrs. de Braga, Mr. Ernaut, Mrs. Segerblom and Mrs. Braunlin. Mr. Ernaut reminded the committee of his subcommittee meeting on A.B. 332, Ponderosa County, which would take place in Incline Village later that day. Mr. Bache asked Mrs. de Braga if she had any more information on the White Pine County school district since the last update. Mrs. de Braga replied there was a school board meeting to approve the acceptance of the loan. It had been a contentious meeting between the board and the teachers. The general public has been supportive of the Legislature's efforts so far. She mentioned some pending legislation to suspend the school board's activities in similar cases. Mrs. de Braga asked Mrs. Lambert for more details. Mrs. Lambert said there were two bills. One was an emergency bill to be passed very quickly so the new superintendent hired knows who he is working for and will be able to go in and do what needs to be done in the district. Mrs. Lambert mentioned yesterday, the rating agencies took away the bond rating from White Pine County which means they will not be able to borrow any more money. The other bill would look at the whole process that would implement some interim steps to resolve the current problem and prevent this type of situation from ever happening again. Mrs. de Braga stated the Grand Jury was going to be on hand to answer a lot of questions and keep things under control in terms of White Pine County spending any of the new loan money unnecessarily. Mr. Nolan commented that White Pine County's loss of their bond rating could affect the state's rating as a whole. Mr. Etchevery, representative and former mayor of Ely, had just returned from there because he was the successful bidder on the 2.8 million dollar loan given to White Pine County. He spent a great deal of time dispelling dissent among the teachers, school board and the general public. Mr. Etchevery said everything went well on Monday morning. John Swendseid, representing Swendseid and Stern, the bonding counsel, opened the meeting up and they went through the process to see who had been given the bid on the bond and the procedure to be used. Two minutes after nine, the County Treasurer signed the appropriate affidavits and then Mr. Etchevery called his supervisor in Las Vegas, who immediately transferred by wire $400,000, the first draw of the 2.8 million. The school teachers got paid that day. The teachers were supposed to have been paid on Friday, but they did not and were frustrated. On Saturday morning, the volunteer fire department was called out on a fire in the internal building of the past superintendent of schools. Rumors abounded that it was arson. It was ironic. The fire department assured Mr. Etchevery, however, that it was not arson. A financial report will be forthcoming from the White Pine School District. Mr. Harrington asked if any school district records were destroyed in that fire. Mr. Etchevery said no, not to his knowledge. Mr. Bache thanked him for the update. The meeting was adjourned at 10:37 a.m. RESPECTFULLY SUBMITTED: Denise Sins, Committee Secretary APPROVED BY: Assemblyman Douglas A. Bache, Chairman Assemblyman Joan A. Lambert, Chairman Assembly Committee on Government Affairs April 26, 1995 Page