MINUTES OF THE JOINT MEETING OF ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session February 6, 1995 The joint meeting of the Committee on Ways and Means and the Senate Committee on Finance was called to order at 8:05 a.m., on Monday, February 6, 1995, Chairman Marvel presiding, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler SENATE COMMITTEE MEMBERS PRESENT: Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Dean A. Rhoads Senator Bernice Mathews COMMITTEE MEMBERS ABSENT: Ms. Sandra Tiffany (Excused) Mr. Dennis L. Allard (Excused) Senator William J. Raggio (Excused) Senator Bob Coffin (Excused) Senator William R. O'Donnell (Excused) STAFF MEMBERS PRESENT: Mark Stevens, Fiscal Analyst Dan Miles, Fiscal Analyst Gary Ghiggeri, Deputy Fiscal Analyst Bob Guernsey, Deputy Fiscal Analyst PUBLIC WORKS BOARD - ADMINISTRATION - PAGE 547 Mr. Roger Grable, Deputy Manager, Public Works Board, introduced Mr. Dean Borges, Acting Manager, and Mr. Randy Dunham, Chief Accountant. Chairman Marvel noted no measurement indicators appeared in this budget. Mr. Grable explained projections for this account were represented in Account Number 401-1562, Public Works Board - Inspection. Mr. Grable stated this account was funded totally from the General Fund and included administrative expenditures associated with personnel and management services. He said this was a flat budget with little expansion other than travel enhancements and limited replacement equipment and new equipment. Chairman Marvel asked for an explanation of the $7,040.00 recommended for data processing in Item M-100 in the maintenance budget. Mr. Grable stated this item should be included in the enhancement budget rather than the maintenance budget. Mr. Dunham explained this funding was for computer maintenance. He noted in the past this equipment had not been covered by a maintenance agreement and appeared in the base budget as repair expense. Chairman Marvel questioned whether the maintenance was covered by a contract. Mr. Dunham said to his knowledge there was no contract but maintenance expense of $400.00 per year for 16 computers was included in the budget package. Mr. Ghiggeri inquired whether it was recommended throughout the Executive Budget to make payments to the Department of Information Services for maintenance agreements for personal computers or if this expense was unique to this budget account. Mr. Grable replied he did not believe this expense was unique to this budget account. The instructions for budget preparation received by the Board required the inclusion of this expense item. Mr. John P. Comeaux, Budget Director, testified this was not an expense item which appeared uniformly throughout the Executive Budget. He said he would review why it was handled this way in this account and report to the Fiscal Division staff. Mr. Hettrick asked if other agencies were being charged $400.00 annually for computer maintenance. Mr. Comeaux said he was not aware that other agencies were being charged for computer maintenance. He agreed to research this question as well. Chairman Marvel referred to Item E-150 in the enhancement budget recommending additional overtime pay and board and commission pay. He noted these personnel expenses had not been funded this way in the past. Mr. Grable stated within the new Executive Budget format the enhancement budget seemed to be the appropriate location for this item in order to reflect real costs of anticipated holiday and overtime pay. He agreed this item had not been handled this way in the past. Mr. Comeaux reported the Budget Division's basic approach regarding overtime was to recommend it if the agency had been previously budgeted for it. He explained there was a mistake in this budget account. The Board did incur expenses in the actual year which were overlooked. He said the budget would be corrected. Mr. Close requested an explanation of Item E-999 in the enhancement budget, Unfunded Decision Units. Mr. Grable stated Item E-999 represented the agency's request to consolidate budget accounts 101-1560, Public Works Board - Administration, and 401-1562, Public Works Board - Inspection. Chairman Marvel asked Mr. Grable to provide information on the Capital Improvement Programs prior to 1989. He inquired whether those projects all had been completed. Mr. Grable responded a large portion of the 1989 and 1991 projects still had remaining fund balances. As long as those projects were still active the fund balances would be carried forward. He noted the 1985 fish hatchery project was ongoing as were a few 1987 projects. Chairman Marvel requested a list of uncompleted projects. Mr. Grable stated that information had been provided to Fiscal Division staff. Chairman Marvel questioned whether there was any funding which could be transferred into new projects. Mr. Grable indicated some funding probably could be transferred. He agreed to provide this information to the committee within two weeks. Chairman Marvel asked if the Board's requested Capital Improvement Program would be presented or the Governor's recommendation. Mr. Grable stated the Governor's recommendation would be presented. Chairman Marvel asked if the difference in the two programs was approximately $45 million. Mr. Comeaux indicated Chairman Marvel was correct. Chairman Marvel questioned whether the Governor's recommended program would require additional staff. Mr. Grable stated the Board would request funding for two additional professional staff positions, three additional inspector positions, and one administrative clerk position. He noted this request did not appear in the budget because during budget preparation it had been thought existing staff could handle the increased workload. As the proposed program grew, it became apparent additional staff would be required. Chairman Marvel suggested Mr. Grable submit an amended budget reflecting the request for additional staff. PUBLIC WORKS BOARD - INSPECTION - PAGE 552 Mr. Grable explained this budget was funded from several sources, including federal funds. He said no new positions were requested in this budget. Two of the existing positions were scheduled to revert to the Prison System budget on July 1, 1995, or whenever the Department of Prisons assumes responsibility of the Lovelock Correctional Facility. Senator Rhoads asked what the Lovelock Mothball category was for. Mr. Grable answered the funding in that category was removed in the enhanced budget. Mr. Spitler asked when the Lovelock Correctional Facility would be ready for use. Mr. Grable responded the facility was ready for use and the Public Works Board was awaiting instructions to turn it over to the Department of Prisons. Mr. Spitler inquired whether the Lovelock facility could be utilized earlier than projected and how much time the Public Works Board would require to ready it for occupancy. Mr. Grable answered preparation time depended on how long it would take the Department of Prisons to provide the necessary infrastructure, i.e., beds, blankets, staffing, etc. He noted, however, the facility had never been operated at full capacity and there could be ongoing problem areas when heating and plumbing systems, etc., were turned on. Mr. Spitler asked if the Public Works Board would resolve those problems prior to turning the facility over to the Department of Prisons. Mr. Grable replied the Public Works Board would test the systems but it was not likely all problems would become apparent until after the inmates were moved in. The Public Works Board would have to keep a reserve balance in the Lovelock account to make necessary corrections or adjustments. Mr. Spitler inquired whether the Board did indeed have those reserves. Mr. Grable stated reserve funds were available in the form of money which was not used for long-term maintenance agreements, which were deemed unnecessary. Chairman Marvel asked if the opening date of the Lovelock facility had been moved forward from October 1, 1995. Mr. Comeaux indicated he was currently meeting with the Department of Prisons to look at that possibility. The Executive Budget anticipated an October 1, 1995, opening. Chairman Marvel asked if a supplemental bill would be required to accomplish an earlier opening. Mr. Comeaux said a bill would be required. He agreed to provide the committee with pertinent information as soon as it became available. Mr. Grable noted again there were no new positions in this budget. He stated two additional professional positions, three additional inspector positions, and one accounting position would be requested in the revised budget. He explained the agency did not intend to fill the requested positions immediately. The professional positions would be filled in November or December of 1995. The inspector positions would not have to be filled until the spring or summer of 1996. The clerk position would probably be filled in the spring of 1996. Mr. Fettic asked if new staff would be requested to keep pace with workload. Mr. Grable responded affirmatively. Mr. Fettic inquired whether the positions were short-term or permanent. Mr. Grable responded historically there had been two professional positions in the budget which were lost in response to a slow down in workload growth. He said the reality was if the workload remained at the high levels anticipated, the positions would be permanent. Mr. Hettrick asked how much plan checking or other functions were duplicated by the Fire Marshal or various local entities. Mr. Grable stated he hoped efforts were not being duplicated. He indicated the type of plan checking performed by the Public Works Board was not related to fire problems. The Fire Marshal would look at plans from a different perspective, e.g., to confirm exiting requirements. He added there was always overlap in plan checking. Chairman Marvel asked if the Public Works Board performed school inspections. Mr. Grable stated the schools sent the plans to the Board which, in turn, forwarded them to a plan checker. The plans would then be returned to the Board for review and then sent back to the school districts with the Board's comments. He noted, due to the length of the process, the schools often begin the project before the plan checking is completed and errors are not discovered in time. Chairman Marvel asked how much the Board charged for this plan checking service. Mr. Grable said the cost varied, depending on the complexity of the design. Mr. Tom Stephens, former manager, Public Works Board, explained plans are sent to private engineers and architects for checking, and the school district paid for those services plus a ten percent administrative fee to the Public Works Board. Ms. Giunchigliani questioned whether ten percent represented an average administrative cost. Mr. Stephens responded it was a nominal fee since the Public Works Board gathered the plans, wrote the contracts with the private engineers and architects, oversaw the work, transmitted the plans back to the schools, and got involved if there were any problems. Ms. Giunchigliani asked if the Board was still reviewing plans in Clark County. Mr. Stephens said as far as he knew the Board was still reviewing Clark County's plans. Chairman Marvel asked if the Board inspected schools. Mr. Stephens replied the Board did not inspect schools. He noted the Board had no mandate to inspect schools to ensure the plans were followed. Ms. Giunchigliani inquired whether the Board checked for compliance with the Americans With Disabilities Act (ADA). Mr. Stephens stated he was unsure how much plan checking on schools related to ADA compliance. He noted plan checks on schools were to ensure life safety, and ADA was a different type of code. He surmised not much was being done in the way of ADA compliance. Ms. Giunchigliani questioned whether ADA compliance was a local government responsibility. Mr. Stephens noted any citizen could sue to enforce ADA compliance. Therefore, each agency should be aware of their necessity to comply. He noted ADA was pervasive, and every business and public entity was required to comply. Ms. Giunchigliani suggested the private sector had achieved better compliance than local governments. Mr. Stephens said trade publications had noted most local governments had not made a great effort to comply with ADA requirements. Ms. Giunchigliani suggested the state look at local government responsibility in order to reduce state liability. Mr. Stephens said he did not believe the state had any liability with regard to ADA and school buildings. Chairman Marvel noted legislation had been proposed in the Sixty-seventh Session of the Legislature to deal with this issue. Mr. Stephens stated two bills had been introduced which proposed either to exempt Clark County School District from Public Works Board oversight or to have the Public Works Board perform inspection on schools. Neither bill passed. Mr. Spitler asked why plan checking for Clark County schools was not done in Clark County, where inspectors were available, rather than forwarding it through the Public Works Board to other professionals for added cost. Mr. Stephens said the School District was not the building official. The Public Works Board is the building official for the state and was not under the jurisdiction of local entities with regard to construction. He noted statutorily the school districts were also not under the jurisdiction of local building officials, but due to their proprietary interest in the projects, the school districts required oversight--as far as plan checking but not inspection--by a state building official. Additionally, in small counties building officials might not be qualified to oversee school projects. Mr. Stephens said he was not advocating the inspection of schools. Mr. Spitler said he could appreciate the need for state oversight in small school districts without available professional expertise. He questioned whether in some instances this was a step in the bureaucratic process and was not cost efficient, especially in light of Mr. Grable's earlier testimony that corrections to plans were received by the school district after the construction had been accomplished. Mr. Stephens reiterated the Public Works Board had not taken a position on this issue. He stated his personal observation was that in the larger counties the county building department should be able to handle plan checking responsibility. Senator Rhoads recalled that several years ago Northern Nevada Community College had raised $2 million in private funds to build a student union building. The 1991 Legislature approved an additional $2 million. Eventually, however, $600,000 was spent to comply with Public Works Board requirements and the Davis-Bacon Act. He said it seemed unreasonable that Public Works Board involvement in a project should add 30 percent to the cost. Mr. Stephens explained labor wage rates added significantly to the cost of any project. He noted the prevailing wage requirements were set by statute and by federal law, not by the Public Works Board. He explained Public Works construction was done to a higher standard than private commercial construction. Senator Rhoads stated this was a debatable issue. Mr. Stephens agreed this was a subjective matter. He said he liked to think Public Works projects were better constructed than private projects. Senator Rhoads asked if private companies were subject to city and county inspections. Mr. Stephens said private companies were subject to inspections for safety reasons. They were not subject to inspections for quality of work or to ensure the owner was receiving value for his cost. The Public Works inspector would do an owner's type inspection as well as a building inspector's inspection. Mr. Price asked if the new Lovelock Correctional Facility was equipped with automatic locks. Mr. Stephens said the new facility had very sophisticated locking systems. He noted the Public Works Board was interested in seeing the locks operate on a daily basis since they had not been used regularly, undoubtedly some would be inoperable and would require repairs. He said although the Public Works Board had done its best to test the facility, until it was fully operational it would not be known what repairs were needed in locks, heating, cooling, and plumbing systems. He added the inmates would be abusive and could cause damage not envisioned by the designers. Mr. Spitler inquired whether extended warranties had been purchased to cover repairs to the locking systems. He noted the $300,000 allocated for repairs in the budget did not seem to be an adequate amount to cover the cost of a major problem. Mr. Stephens answered he was unsure about the status of extended warranties on the Lovelock Correctional Facility. Mr. Spitler said he recalled during the Sixty-seventh Session of the Legislature, the committee had issued a directive to the Public Works Board regarding maintaining warranties on locks. Mr. Dan Daily, Staff Civil Engineer, Public Works Board, stated the Board had reviewed the cost of extended warranties for Lovelock Correctional Facility. Many of the costs were significant and the subcontractors did not believe the warranties were worth the cost since the equipment would not be used. The standard warranties elapsed after a period of one year. It did not seem cost effective to purchase extended two-year warranties when the facility was not planned to be used in that two-year period. The Public Works Board maintained a reserve account in the budget to cover the cost of repairing any locks which might fail once the facility is opened. Mr. Spitler stated locks seemed to be one of the most expensive repair items for penitentiaries. He reiterated the $300,000 reserve did not seem to be sufficient to cover potential costs. He noted there was a nearly $1 million recommendation for Indian Springs (Southern Desert Correctional Center) for lock repairs as a capital improvement project for the 1995-97 biennium. Mr. Daily stated locks within the prison system lasted approximately 10 to 12 years. He explained the Indian Springs situation was different from the Lovelock situation. Mr. Spitler inquired whether Mr. Daily was comfortable with the $300,000 reserve. Mr. Daily indicated he was comfortable with the $300,000. Mr. Stephens said Unit 7 at the Northern Nevada Correctional Center is a prototype for Lovelock Correctional Facility. He stated there had been few problems with locks in Unit 7. The problems with locks at Indian Springs were the result of decreased limits on spending in the construction budget. He expressed more confidence in the construction of the Lovelock facility than in the construction of the Indian Springs facility. Mr. Close asked if the measurement indicator reflecting no 1993 Capital Improvement Program projects were completed in 1994 was correct. Mr. Grable said the measurement indicator was correct at the time the budget was prepared. Currently more than 30 percent of the 1993 projects were completed. He noted performance was lagging and staffing was insufficient to meet the demands which would be created by the 1995 Capital Improvement Program. Mr. Close expressed confusion since Mr. Grable had earlier indicated current staff was adequate for the 1995 Capital Improvement Program, but 1993 projects were still not at expected stages of completion. He asked Mr. Grable to submit a list of incomplete projects and a time table reflecting projected completion dates. Mr. Grable reiterated currently over 30 percent of the 1993 projects were completed. He explained additional staff would be required in the 1995-1997 biennium, not in the current biennium. Mr. Close requested updated measurement indicators reflecting current data. Mr. Grable agreed to provide current information. Ms. Giunchigliani requested a break out of design completion, project completion, and number of projects. Mr. Grable explained the measurement indicators reflected percentage of projects designed. Ms. Giunchigliani asked Mr. Grable to provide information regarding how many projects were begun and how many were finished. He agreed to do so. Mr. Dini said he thought the object of the Legislature providing advance planning funding was to accelerate projects. Mr. Grable replied advance plans often only went through the schematic design phase and did not mean projects were ready for bid on July 1. Mr. Dini questioned whether the Public Works Board had made a conscious decision to slow down project schedules. Mr. Grable responded the Board absolutely had not made such a decision. He said staff was working as hard as possible to move ahead on every project. He noted it had been difficult to prioritize projects with limited staff. Chairman Marvel asked Mr. Grable to explain Item E-720 in the enhancement budget requesting funding for replacement of the Norstar telephone system. He asked why this item appeared in this budget account and if the cost would be charged to projects. Mr. Grable said he did intend to charge the cost to capital improvement projects. Chairman Marvel inquired whether the cost could be shared with another agency. Mr. Grable responded the cost could not be shared. ADMINISTRATIVE SERVICE MAIL ROOM - PAGE 513 Mr. Mike Meizel, Administrator, Buildings and Grounds Division, reported this budget represented a radical change from past budgets. He explained the Division proposed consolidating outgoing mail services. He referred to the measurement indicators, which reflected significant increases in numbers of pieces of mail processed in Fiscal Year 1996 and Fiscal Year 1997. Chairman Marvel suggested measurement indicators be expanded in future budgets. Mr. Meizel noted a legislative audit had recommended consolidation of mail services, particularly outgoing mail. In response to that recommendation, the Department of Administration formed a task force of users which agreed to utilize the Department of Motor Vehicles' OCR bar coder to process all outgoing mail in order to eliminate the need for pre-sort contractors. All user agencies would share the cost of leasing the bar coder. Conservative projections of cost savings were approximately $270,000 per year. Mr. Meizel explained in order to implement this program a building was needed to house the bar coder equipment. The Division was considering moving into a portion of the old Fremont School following renovations recommended by the Public Works Board. He expected the mail room to expand within five years to fill the entire building. He noted the site was easily accessible, had available parking, and was owned by the state. Mr. Meizel stated even if the renovation of the building was begun immediately following legislative approval, the mail room could not occupy the site until after January 1, 1996. In the meantime, the proposed consolidation plan would proceed but would not become fully operational. Mr. Meizel indicated the Division had been doing some public relations work in preparation for the consolidation, e.g., training agencies to prepare machine- readable mail. Mr. Meizel said the Division requested the transfer of four existing mail-handling positions from various agencies. This request was based on a time and motion study. Mr. Miezel reported long-range plans included expanding the program to southern Nevada and electronic mail processing throughout the state. Mr. Spitler inquired whether the consolidation could occur prior to renovation of the Fremont School site. Mr. Miezel replied consolidation had begun. A methodology had been developed whereby the Division could work in conjunction with the Department of Motor Vehicles to start processing mail. Efficiency would be limited, however, until the equipment could be housed in the renovated site. Mr. Spitler inquired whether the bar coder was covered by a lease-purchase agreement. Mr. Miezel replied the Department of Motor Vehicles had a lease- purchase agreement on the equipment. The cost was approximately $68,000 per year. Mr. Spitler asked if the Division planned to use inmate labor to process mail. Mr. Miezel said inmate and regular labor would be used. Mr. Spitler said he understood the only way this program would be cost efficient was to use inmate labor. Mr. Miezel said the four positions requested included a technician to operate the bar coder and staff to handle postage not associated with the bar coder. It was not contemplated these positions would replace inmate labor. Mr. Spitler questioned how consolidation would be cost efficient if more staff was required. Mr. Miezel said the staff was already performing the jobs within other agencies. Chairman Marvel noted this had been recommended by the Audit Division. Mr. Miezel added the state would continue to use the services of pre-sort contractors from private industry. Projections did not indicate the state mail room would ever be able to function totally independently of contractors. The advantage of consolidation was using equipment which the state already had access to. Chairman Marvel inquired whether mail delivery methods had been streamlined in accordance with the recommendation of the audit report. Mr. Miezel responded that had been accomplished early in the audit process. The mail room was currently utilizing a truck delivery service at a cost which was lower than the cost recommended by the audit. He estimated savings were approximately $50,000 to $60,000 per year. He said he would provide accurate figures to the committee. Chairman Marvel asked for an explanation of the $2,203,305 item in decision unit M-200 of the maintenance budget. Ms. Janet Johnson, Deputy Budget Administrator, Budget Division, responded the agency had requested a substantial amount for postage in Item E-999 of the enhanced budget which the Governor did not recommend. The Governor did recommend the funding for postage in Item M- 200. Chairman Marvel inquired whether the entire amount was for postage costs. Mr. Miezel said the funding recommended in Item M-200 was all for postage. Chairman Marvel questioned why this funding was not included in Item M-100 in the postage category. Ms. Johnson stated this recommendation reflected postage to be added to this budget. It was not part of the base budget. Mr. Miezel noted the new postage was associated with the consolidation. Chairman Marvel asked why the funding appeared in the operating expenses category rather than in the postage category. Mr. Jim Manning, Budget Analyst, Budget Division, answered the operating expenses category included several general ledger items. Chairman Marvel requested a breakdown of the expenses rolled into operating expenses. Senator Rawson inquired whether the budget reflected an increase in postage costs due to caseload increases or a transfer of postage costs from other agencies. Mr. Miezel replied this was a transfer of postage expense from other agencies. Senator Rawson questioned whether the budgets of the other agencies had been adjusted accordingly. Mr. Miezel stated as far as he was aware, those budgets had been adjusted. He noted there would be some increases in postage costs due to the recent increase in postal rates. Senator Rawson asked if there was a central receiving point for mail. Mr. Miezel stated there were central receiving points in Carson City and southern Nevada. Senator Rawson inquired whether security measures were adequate to ensure safety from terrorist activity. Mr. Miezel said there was no such security in Carson City, other than for mail delivered to the Capitol Building. He noted there is security in the new state office building in Las Vegas. Staff had been trained in security measurers. Senator Rawson said he would like to eliminate this risk. He questioned whether current security measures were adequate. Mr. Miezel said no extraordinary security measures were undertaken in processing mail. Senator Rawson questioned whether necessary screening devices were prohibitive in cost or if they would slow the process significantly. Mr. Miezel answered if all mail was screened the process would be slowed tremendously. Senator Rawson noted this was becoming more and more of an issue for state employees. He asked Mr. Miezel to provide the committee with a proposal for properly screening mail to ensure safety. Mr. Miezel agreed to provide information regarding cost and time factors. Chairman Marvel asked if eventually the total mail room operation would be located in the Fremont School. Mr. Miezel replied the mail room would come to utilize the entire facility eventually. Chairman Marvel asked when the facility would be ready for occupancy. Mr. Tom Stephens, former manager, Public Works Board, indicated if the appropriation was made May 1, 1995, design would probably take approximately six months. Construction could begin in early 1996. Occupancy could probably not take place until late summer or fall of 1996. He noted this was an optimistic schedule since this was not a top priority project. Chairman Marvel questioned how mail room operations would be impacted by the delay in moving to the Fremont School. Mr. Miezel said significant changes and/or savings resulting from the consolidation would not be apparent until the move was accomplished. Ms. Giunchigliani asked what type of electronic mail equipment would be utilized in the future. Mr. Miezel responded the agency was looking at an electronic mail management system which would accelerate the mail handling process by eliminating manual logging. Ms. Giunchigliani asked if every piece of mail was counted. Mr. Miezel said inter- department mail is not counted. The mail requiring postage is counted. Ms. Giunchigliani inquired whether agencies had been monitored to determine if internal mail could be used in lieu of mail requiring postage. Mr. Miezel said agencies had not been monitored. He expressed his belief most agencies were utilizing inter-department mail but some could be paying for postage. Ms. Giunchigliani said she would like to know what comprised the $2.2 million recommended by the Governor for postage and if it truly reflected actual costs. Mr. Manning said the $2.2 million represented the postage expenses of six agencies: Department of Motor Vehicles, Public Employees Retirement System, State Industrial Insurance System, Department of Transportation, Employment Security Division, and the Division of Wildlife. The total postage expenses of those agencies' budget accounts, including the 10.3 percent inflationary increase, was reflected in other - non-state resources in Item M-200 in this budget. Ms. Johnson noted the large numbers for postage expenses in some agency accounts were associated with mailings to customers, e.g., renewal notices for vehicle registration, etc., and would remain part of the operating expenses of those agencies. Ms. Giunchigliani asked if any of the inmate labor would be provided by women. Mr. Miezel said women inmates were not available. Ms. Giunchigliani noted female inmates did not have the same opportunity for job training as male inmates. Senator Jacobsen asked how long the Fremont School facility would adequately house the mail room. Mr. Miezel projected the building would be adequate for ten years or longer. He noted the Fremont School facility was not only large, but it offered a substantial amount of parking area which could handle mail truck traffic. He pointed out the Fremont School building could not easily be converted to office space, and the mail room was probably the highest and best use of the facility. Senator Jacobsen noted the street behind the Fremont School had been closed. He asked if there was any plan to reopen the street. Mr. Miezel responded that issue had not been addressed. He said it could be reviewed. BUILDINGS & GROUNDS - PAGE 558 Mr. Miezel explained this was a facility budget for most of the state office buildings. He noted the projected figure for square feet of storage space in Fiscal Year 1996 which appeared in the measurement indicators should be corrected from 135,062 square feet to 75,838 square feet. Chairman Marvel asked if this figure included Washoe County storage space in the state warehouse. Mr. Miezel replied the Washoe County rental expense was included with special purpose office space (68,065 square feet). The Washoe County portion comprised slightly under 12,000 square feet. Chairman Marvel inquired whether Washoe County was being charged for the storage space. Mr. Miezel said Washoe County was being charged the market rate, as negotiated, i.e., $.25 per square foot. He noted it was beneficial to the state to have Washoe County as a tenant because of security reasons and because of the length of the lease. Chairman Marvel asked where the Washoe County rent appeared in resources. Mr. Miezel answered rent for the entire warehouse was included in Item M-201 of the maintenance budget. He explained Buildings & Grounds would be assuming total management of the warehouse but the Division of State Lands would retain ownership of the facility. Mr. Miezel stated the number of square feet of non-state owned office space leased was projected to decrease in 1994-95 as a result of occupancy of the new state- owned office building in Las Vegas. Then the number of square feet was projected to increase in 1995-96. He stated the projected increase seemed high, i.e., 20 percent rather than 10 percent. He noted historically projections had been slightly under actual increases. Chairman Marvel asked for an explanation of the projected increase. Mr. Miezel attributed the increase to population growth in the state. He added employment services and social services were the fastest growing areas of state government. Chairman Marvel inquired whether the projected costs per square foot of non-state owned space ($.91 for 1995-96 and $.94 for 1996-97) were inflated in the Executive Budget and could be decreased. Mr. Miezel stated the budget was not based on those figures. Ms. Johnson explained the rental rate increases and increases in leased space were reflected in the individual budget accounts of the agencies paying those rental expenses. Chairman Marvel commented if the square footage was inflated, the numbers would have to be reduced. Mr. Miezel stated the numbers were only projections and associated cost projections were based on averages. He noted there were highs and lows in rental rates. Chairman Marvel asked if there was a cap on rental rates. Mr. Miezel said there was no cap on rental rates. He pointed out the state probably was paying slightly less than market rental rates in all areas. He added rental rates were dictated by the market. Mr. Close inquired whether measurement indicator 4.a. reflecting average rental cost per square foot had been calculated by taking the total square footage and dividing it by total rental costs to arrive at the decrease from $.6307 to $.6116 between 1994-95 and 1995-96. Mr. Miezel said Mr. Close was correct. He noted those were the rates charged to state agencies for space in state-owned buildings, and those figures were known, not estimations. Mr. Close asked why the rate had been decreased. Mr. Miezel said some savings had been realized and those funds were carried forward, resulting in a rate decrease. Additionally, the new state-owned office building in Las Vegas created a broader base over which to spread fixed costs. Chairman Marvel noted some agencies had been criticized for initiating their own lease agreements. He asked if responsibility for negotiating leases would now fall under the umbrella of Buildings & Grounds. Mr. Miezel responded Buildings & Grounds would assume, and in the past has assumed, responsibility for negotiating all private leases although it sometimes delegated this responsibility to the agencies. He noted Buildings & Grounds requested a new position to serve this function. He stated while the position was needed, he could not say it would pay for itself with reduced rent expenses. Chairman Marvel noted this concurred with a recommendation included in the audit report. Chairman Marvel inquired whether Buildings & Grounds kept a maintenance or depreciation schedule for state buildings. Mr. Miezel responded there was a maintenance schedule but no depreciation schedule. He explained an inventory of state-owned buildings was undertaken every two years. He noted the measurement indicator reflecting estimated dollar amount of maintenance projects completed was based on the building inventory system. Additionally, the division kept maintenance schedules for heating, ventilation, and air conditioning systems, painting, carpeting and flooring, etc. Chairman Marvel noted costs for maintenance were projected to decrease from $328,042 in 1994-95 to $193,567 in 1995-96. He asked if that projection was realistic. Mr. Miezel responded these numbers reflected a pattern of cost reductions over the past several years as buildings were being better maintained. Mr. Arberry asked where maintenance and utility costs for the Department of Motor Vehicles office currently being constructed in Las Vegas appeared in the budget. Mr. Miezel explained the building was owned by the Department of Motor Vehicles and was not under the jurisdiction of Buildings & Grounds. He said he expected the Department of Motor Vehicles would eventually contract with Buildings & Grounds to provide maintenance for the building. Mr. Arberry requested estimated maintenance and utility costs for the building. Mr. Miezel said he would provide an estimate of costs. Ms. Giunchigliani noted $50,107 was included in the base budget for building renovations and $143,460 was included as Item E-850 Special Projects in the enhancement budget. She questioned why these two items were separate. Mr. Miezel responded the base portion represented the actual prior year expenditure in that category. Ms. Giunchigliani expressed her opinion it was confusing to have funding for like categories split in this fashion in the Executive Budget. Mr. Comeaux acknowledged the budget format sometimes did make it difficult to track total costs. He noted the budget summary reflected total amounts of the various components of the budget. Chairman Marvel asked what comprised decision unit E-850. Mr. Miezel answered Item E-850 covered funding for a list of renovation projects. Ms. Giunchigliani questioned whether any of the projects duplicated Capital Improvement Program projects. Mr. Miezel said duplication of projects was not envisioned, but in the past Buildings & Grounds and Public Works had targeted the same projects. He noted work was not duplicated. If Public Works performed the work on the project, Buildings & Grounds would realize a cost savings which would be carried forward to the next biennium. Chairman Marvel requested a breakdown of the projects included in Item E-850. Mr. Comeaux agreed to provide the project list to the committee. He noted he did not believe there was any duplication of projects. Ms. Giunchigliani questioned how the Public Works Board would fund the cost of work performed on a Buildings & Grounds project. Mr. Comeaux explained most project budgets included contingency funding which would cover additional costs of work which overlapped with another budget. Ms. Giunchigliani asked if all Department of Motor Vehicles buildings were outside the jurisdiction of Buildings & Grounds. Mr. Miezel said the main office buildings did fall under the jurisdiction of Buildings & Grounds. Outreach (non-state owned) buildings did not. Ms. Giunchigliani requested a list of the buildings which were under the jurisdiction of Buildings & Grounds. Mr. Miezel agreed to provide a list to the committee. Mr. Arberry asked when the new Department of Motor Vehicles building in Las Vegas would be occupied. Mr. Miezel said he believed occupancy would occur in March 1995. Ms. Giunchigliani asked if the Department of Education was moving into the Fremont School building. Mr. Miezel replied the Department of Education would be moving into one of the two Fremont School buildings. CLEAR CREEK YOUTH CENTER - PAGE 565 Mr. Miezel introduced Mr. Mike Schaughnessy, Director, Clear Creek Youth Center. Mr. Miezel testified the center was located southwest of Carson City on 80 acres. He stated there were 22 buildings on the property. The facility is used primarily by schools and youth groups. The center currently charges $4.00 per meal plus a $5.00 use fee, or a total of $17.00 per day. He explained the budget was approximately 60 percent fee funded. The remaining 40 percent was from the General Fund. Mr. Miezel stated in the future the rate structure would be reviewed to determine if adjustments were needed. Chairman Marvel questioned why projections for numbers of days the facilities would be used were decreasing. Mr. Miezel replied use had decreased in 1993-94. Current use was up. Therefore, the measurement indicators might be inaccurate. Mr. Miezel noted past efforts to promote use of the facilities had not been cost effective. He suggested efforts to promote the facilities could be renewed, however. Mr. Dini said he understood a portion of the facilities had been leased to Rite of Passage. Mr. Miezel said Rite of Passage had leased a portion of the facilities. He explained Rite of Passage rent was the largest single source of revenue although it was not identified in the budget. Mr. Dini inquired whether the association with Rite of Passage was satisfactory. Mr. Miezel said it was a satisfactory arrangement. Mr. Price questioned whether the state was exempt from liability for the actions of tenants. Mr. Miezel noted all lease agreements included indemnification clauses to protect the state from such liability. Ms. Giunchigliani asked if the rent received from Rite of Passage was accounted for in the budget. Mr. Miezel responded affirmatively. Ms. Giunchigliani inquired whether there was a possibility of leasing space to other private groups in order to offset the need for General Fund money. Mr. Miezel said there was a possibility of leasing space to other organizations. He noted, however, the facility was comprised of dormitories and was not conducive to administrative usage. Ms. Giunchigliani urged consideration of leasing space to an appropriate tenant in an attempt to make the program fully funded. Mr. Miezel said this was something that was being looked at. Ms. Giunchigliani noted the ratio of unclassified employees to classified employees appeared to be one to one. She questioned whether this meant one supervisor to one employee. Mr. Miezel stated the supervisor was a working manager, not solely an administrator. Senator Jacobsen confirmed that the unclassified employee was a working manager. He added he was at the committee's disposal to lead a tour of the facility. Mr. Close said it would be helpful to see a mission statement explaining goals and identifying areas for reducing the General Fund cost. He then pointed out an apparent discrepancy between the measurement indicators for revenue received in actual Fiscal Year 1994 and resources in the budget. Mr. Manning stated the figures should match. Mr. Spitler inquired whether any conditions of ownership had been imposed when the property was transferred from the federal government to the state (e.g., restrictions on the sale or lease of the property). Mr. Miezel said he did not know if there were conditions of ownership. He said he would review this matter. Mr. Spitler said he was troubled that there was no marketing program promoting this facility, and the rest of the state was subsidizing a facility which should be paying for itself. He suggested users should be required to pay fair market value for use of the facilities. He requested a report on what would be required to make this a self-funded facility. Mr. Miezel agreed to research this matter and report back to the committee. He expressed his opinion it was better for the state to subsidize the facility than to let it go unused. Mr. Spitler said he would like to know that the state has done everything possible to maximize the value of this property. Mr. Miezel said he agreed with Mr. Spitler. Senator Jacobsen said to his knowledge there were no restrictions on ownership of the property, but he would oppose the sale of this property. He noted there were some limitations on use of this facility since it was not easily accessible in the winter months. Mr. Dini added the facility was not in a suitable condition to lease. Mr. Miezel stated the facility could not compete with other available dormitory facilities. MARLETTE LAKE - PAGE 569 Mr. Miezel testified the Marlette Lake Water System is located west of Carson City. Water from the system is distributed to both Carson City and Storey County. He explained the system was operating at maximum capacity. Mr. Miezel explained the Marlette Lake Advisory Committee is comprised of himself, representatives of the conservation agencies, and three legislators. Chairman Marvel noted resources decreased from $123,722 in 1994-95 to $101,203 in 1995-96 and increased to $111,238 in 1996-97. He asked for an explanation of the fluctuation. Mr. Miezel responded the balance carried forward each year offset user rates. Ms. Giunchigliani asked what the sources of water were for Marlette Lake. Mr. Miezel replied the watershed was comprised of Hobart Reservoir, Marlette Lake, and mountain springs. Ms. Giunchigliani noted the mission of the system was to preserve and protect sources of water. She asked if this mission was reflected in the budget. Mr. Miezel said there was no money specifically earmarked to preserve the watershed other than operating expenses. He explained the Buildings & Grounds Division had authority only over the pipeline. The Department of Conservation and Natural Resources was responsible with the land and environmental concerns. Ms. Giunchigliani suggested the measurement indicators be revised to reflect more accurately the operation of the system. Ms. Giunchigliani asked if water rates were competitive. Mr. Miezel responded affirmatively. He said rates were set by the Advisory Committee--whose membership represented various interests--in order to ensure equity. Ms. Giunchigliani questioned whether the members of the Advisory Committee were water experts. Mr. Miezel said the committee was comprised of representatives from the Division of State Parks, the Forestry Division, the Wildlife Division, himself, and three legislators. Ms. Giunchigliani suggested it would be appropriate for members of the committee to have some expertise in establishing rates. Mr. Miezel expressed the opinion the system was working well. He said it was his job to set rates to cover operating costs. Users could approach the Advisory Committee to dispute rates. Senator Jacobsen noted the system had been established to ensure the Capitol Complex would have an adequate supply of water. Mr. Dini added the system was a vital source of water to Virginia City. Ms. Giunchigliani said she was unaware legislators sat on the Advisory Committee. She expressed the opinion it might be more appropriate for local government representatives to sit on the committee. Senator Jacobsen said the system was the only state-owned source for cutthroat trout eggs in Nevada. Mr. Miezel noted one of the main functions of the Advisory Committee was managing recreational interests. Chairman Marvel stated the resource figures did not appear to balance. He asked that the budget be corrected. CARSON WATER TREATMENT PLANT - PAGE 573 Mr. Miezel reported the state operated the treatment plant and sold water to Carson City for distribution to users. He noted the difference in raw water rates ($.25 per 1,000 gallons) and retail water rates ($.61 per 1,000 gallons) represented the cost of treating the water. He explained the measurement indicators reflected operation of the plant at full capacity. Chairman Marvel noted resources in this account did not appear to balance. Mr. Miezel responded he would meet with the Budget Division to determine an explanation of discrepancies. Senator Rawson asked if the water was tested regularly to ensure safety. Mr. Miezel replied the plant was monitored on a regular basis. The plant had never failed to meet safety standards. He explained plant capacity might drop on occasion if water did not meet required turbidity levels. PROPOSED CAPITAL IMPROVEMENT PROGRAM - PAGES A53 - A73 Mr. Stephens stated the Public Works Board served as capital projects manager, quality assurance inspector, and building official in relation to safety aspects. He testified Director of the Department of Administration served as chairman of the seven-member Public Works Board. The other six members were appointed. Those members are S. Barton Jacka, Vice Chairman, Roger Trounday, Otto Merida, John Cummings, Kurt Brown, and Irene Porter. Mr. Stephens testified all 1993 Capital Improvement Program major construction projects were currently under construction. Significant pre-1993 projects not yet under construction included the Boulder City Railroad Museum and the architecture building at UNLV. Mr. Stephens noted the committee would be touring several completed projects. Mrs. Evans inquired whether the Public Works Board would be providing a report regarding the interim study on the mental health institute. Mr. Stephens responded the Division of Mental Health and Mental Retardation would be providing a report. He indicated the report was nearing completion and should be available in approximately two weeks. Mr. Stephens noted staffing levels for inspectors and project managers was tied to the number of projects. When there was a heavy workload, staff was added. When the workload was less, staff was let go. Chairman Marvel asked if more staffing would be required for the proposed Capital Improvement Program. Mr. Stephens answered affirmatively. He explained the program proposed by the Governor was significantly larger than originally proposed in September 1994. Mr. Stephens distributed a list of 1995-97 capital improvement projects recommended by the Governor (see Exhibit C). Page 3 of Exhibit C reflected recommended projects costing $206,381,133. Mr. Stephens noted approximately $16 million would be federally funded, leaving approximately $190 million to be funded with state money. Approximately $154 million of the cost was associated with major construction projects. The remaining costs were associated with maintenance projects. Mr. Stephens explained approximately $53 million--or 35 percent--of the $154 million was for custody institutions (i.e., prisons, Lake's Crossing, or youth centers). Approximately 40 percent of the construction projects were at the universities. All other projects totaled approximately 25 percent. Mr. Stephens distributed to the committee copies of a chart reflecting projections in inmate populations in medium and close custody prisons (see Exhibit D). He noted one of the most important policy issues to be considered by the committee in the future would be prisons. Chairman Marvel noted there was a strong "tough on crime" movement this session. Mr. Stephens explained medium and close custody prisons were the most expensive to construct. The cost of the first 500 beds at Lovelock Correctional Center cost approximately $100,000 per bed. Additional beds would cost approximately $50,000 each. Mr. Stephens said the Governor recommended increasing the Lovelock Correctional Center from a 1,000-bed facility to a 1,500- bed facility. Chairman Marvel questioned whether increasing the capacity at Lovelock would require expanding the core facility. Mr. Stephens replied the core facility could handle 1,250 beds. The architects would have to review the project design to determine if the facility could be expanded to 1,500 beds without changes to the core infrastructure. Mr. Stephens noted Exhibit D showed the design of Phase II of Lovelock Correctional Center in January 1995. He explained design was not begun because funding was not available, although preliminary discussions with the architect had occurred. Design would begin when funding was available. Construction would have to begin in the summer of 1995 in order to have the next 500 beds on-line by the end of 1996. The following 500 beds were projected to come on-line at the end of 1998. If those beds were needed earlier, construction money would have to be appropriated in this legislative session. He noted funding for the last 500 beds was not included in the Executive Budget. Mr. Arberry questioned whether adding beds would increase inmate populations to levels which would be difficult to manage. Mr. Stephens said larger populations would be more difficult to manage. He noted, however, most prisons in states such as California and Texas were in the 2,000-bed to 3,000-bed range. The trend was toward larger institutions because it was less expensive to build larger core facilities and add beds. Mr. Arberry expressed concern about the cost of managing large institutions. Mr. Stephens stated Mr. Arberry's concern was reasonable. He noted Exhibit D reflected only one of many possible scenarios for dealing with prison population growth. Mr. Stephens referred again to Exhibit D. He explained the chart revealed it probably would not be possible to construct an additional new prison before the end of 1999 based on historical time schedules to appropriate funds and complete design and construction. The next prison--Prison 7--was projected to be a 2,000- bed prison located at Indian Springs. Mr. Stephens indicated preliminary environmental and land work had not yet been completed at Indian Springs. Mr. Stephens stated construction costs for new prisons appeared at the top of Exhibit D. According to present projections, $33 million would need to be appropriated in 1995-97, $75 million would be needed in 1997-99, $57 million would be needed in 1999-01, and $73 million would be needed in 2001-03. He noted the projections were conservative and were based on growth rate of 500 beds per year. Ms. Giunchigliani asked if Exhibit D projections coincided with the Governor's recommendations for alternative sentencing of felons. Mr. Stephens said the Governor was trying to avoid adding medium and close custody beds to the prison system. Ms. Giunchigliani noted a policy decision was required to determine alternatives to placing inmates in prisons. Senator Rhoads asked what the first and second 500-bed additions at Lovelock Correctional Center would cost. Mr. Stephens said the first 500 beds would cost approximately $50 million. The next 500-bed phase would cost approximately $25 million. Mr. Spitler expressed concern that inmate populations would escalate significantly as the result of new legislation. He noted in December 1994 only 161 beds were available. Chairman Marvel said only 75 beds were currently available. Mr. Spitler noted Exhibit D demonstrated how alarming the situation was since it clearly delineated how much advance work was required to open a new prison. Mr. Stephens noted there were two risks to overcrowded prisons: 1) inmate populations became unmanageable, and 2) the federal government would take over control of the prisons. Mr. Spitler pointed out building prisons in the rural areas made it more difficult to attract the labor force necessary to properly manage inmates. He suggested this could be a problem in Lovelock. Mr. Stephens added Indian Springs was selected as the site for the next prison for this reason. Chairman Marvel stated when counties were polled about prison locations in 1985 Clark County indicated it did not want a prison. Senator Rhoads said the Department of Prisons had advised the committee the inmate population in the honor camps was decreasing. He questioned this information in light of the increasing inmate population numbers presented by Mr. Stephens. Mr. Stephens responded the honor camp populations were dependent on the mix of maximum, medium, and minimum security inmates. Senator Rhoads asked if there were any future plans to increase the number of honor camps. Mr. Stephens said the budget included a proposal to add 72 minimum security beds at Indian Springs boot camp. The Public Works Board had been requested to research the cost of additional beds and had determined approximately 80 minimum custody beds could be added at the Stewart camp. Senator Rhoads asked if there was funding in the budget for the additional beds. Mr. Stephens said there was no funding for additional beds. Senator Rhoads noted future planning for medium and maximum security inmates had been done well, but planning for honor camps had not. Mr. Comeaux responded the Department of Prisons had originally requested construction of a 150-bed camp as part of the Capital Improvement Program to house minimum custody inmates who were unsuitable for conservation camps. Two features of the Governor's crime proposal will have the effect of diverting those minimum custody inmates into either an expanded residential confinement program or a lifeskills center program. As a result, construction of the requested camp was not recommended in the Capital Improvement Program. The present number of minimum security beds appeared to be adequate. Shortages would be occurring in medium and close custody beds. Mr. Spitler said he looked forward to seeing the details of the Governor's crime proposal. He pointed out most states which had adopted alternative sentencing programs found it was not a solution to shortages in bed space unless the prisons were given the authority to determine inmate placements. He noted judges had a tendency to assign inmates to rehabilitation facilities, but those inmates were not always the type of prisoner who responded to rehabilitation. Mr. Comeaux noted, in the case of at least one of the Governor's proposed programs, the Department of Prisons would have the authority to determine inmate placements. Ms. Giunchigliani inquired when the Lovelock Correctional Center would open. Mr. Comeaux responded the Executive Budget anticipated an October 1, 1995, opening, but the opening date was being reconsidered. Ms. Giunchigliani asked if staff had been hired. Mr. Comeaux answered staff had not yet been hired. If a determination was made to open the facility prior to October 1, 1995, a supplemental appropriation would be required to fund staffing and training. Chairman Marvel asked Mr. Stephens to continue with his presentation regarding the Capital Improvement Program. Mr. Stephens stated for the committee's information, insofar as other projects the Community College of Southern Nevada had requested a $6 million appropriation for furniture and equipment for two buildings currently under construction (as part of the 1993 Capital Improvement Program). The Community College was requesting advance consideration of this appropriation. Mr. Stephens indicated proposed legislation would be introduced shortly. Mr. Orlando Sandoval, Director of Physical Plant, Community College of Southern Nevada, explained there was some urgency in receiving funding for this equipment for the new buildings at the Cheyenne and West Charleston campuses. Funding was required by the end of March 1995 for bid specifications to be developed and advertised timely. Dr. Richard Moore, President, Community College of Southern Nevada, testified the buildings were on-line and the facilities would provide exceptional job training opportunities for adults in the Las Vegas area. Mr. Stephens said the Division of Mental Health and Mental Retardation had requested construction of an intake center and visitors center at Lake's Crossing for a cost of $572,000. He noted the Governor was not supporting this request. Chairman Marvel asked Mr. Stephens to present all of the prison projects before moving on to other projects. Mr. Stephens directed the committee's attention to Tab C of the Capital Improvements Program binder (a copy of which is on file in the Research Library of the Legislative Counsel Bureau). He reported Project 95- C1, Lovelock Correctional Center Phase II, as proposed by the Governor, comprised two 250-bed housing units. Each unit could be divided into two 125-bed sections. The project also included site development, completion of construction of a dining room facility, an additional tower and fencing, completion of one of two buildings to be used by Prison Industries, and design of Phase II and Phase III. Chairman Marvel inquired whether any Phase I funding had been used to "mothball" the facility. Mr. Stephens said some of the 1993 Capital Improvement Program appropriation had been used to operate the vacant facility over the past two years. Mr. Stephens noted in order to get new beds on-line by the time they were needed, it was critical for design to begin as soon as possible. He explained it could take up to 60 days to approve a supplemental appropriation. Therefore, the scope of Phase I would have to be revised and $300,000 moved from the Phase I budget into the Phase II budget to cover the cost of the design. Chairman Marvel asked if a supplemental appropriation bill had been drafted. Mr. Comeaux said legislation had not been drafted. He explained he had planned to approach the Interim Finance Committee for authority to use $300,000 from Phase I to begin the design but had been informed a legislative resolution would be required to do so. He said a supplemental appropriation was not required. It was simply a matter of borrowing the money from Phase I and replacing it once Phase II was approved. Mr. Stephens stated over $1 million would be required by June 1995 in order to complete the design in time to issue bids for construction July 1, 1995. The $300,000 would only cover the cost of the first 15 percent of the design portion of the project. He pointed out if bids were not let in July, construction could not begin by September, in time to avoid winter weather conditions which would delay construction. Chairman Marvel suggested a trailer could be added to pending legislation in order to expedite transfer of the $300,000. Comeaux reiterated this was not a supplemental appropriation since adequate funding was currently available. Ms. Giunchigliani asked if design of the two new units would be different than the design of the first two units. Mr. Stephens answered the design had to be revised to shorten the two new units to fit the site. Ms. Giunchigliani inquired whether the new design would allow the facility to accommodate up to 1,500 beds. Mr. Stephens said the infrastructure would have to be reviewed to determine if the facility could accommodate 1,500. He said it was likely the facility could accommodate 1,250 without further study. Ms. Giunchigliani asked if once a prison was designed the design could be used over again to build new facilities. Mr. Stephens said that was a possibility. Chairman Marvel questioned whether architects retained copyrights on their plans of if the plans became state property. Mr. Stephens stated either the same architect would have to be hired for each project or the plans would have to be redrawn since the architect retained ownership of the plans. Mr. Bob Bayer, Director of Prisons, noted generally there was an attempt to use the same basic design for new facilities. But there could be some changes associated with improved products and technology. Mr. Stephens referred to the next prison project, Project 95-G1, the Men's Prison #7. He noted this project was recommended by the Governor. He explained this appropriation would cover the cost of design ($3 million plus) and site development ($2.5 million). The prison would be located at Indian Springs. Mr. Spitler asked about water availability at Indian Springs. Mr. Stephens replied the state would have to apply for water rights and would have to receive priority consideration since others had already applied for all available water south of Tonopah. Chairman Marvel inquired whether Indian Springs was located in a closed basin. Mr. Stephens said he did not know the answer to the question. He stated there was usable water in the basin, but others have already applied for use of that water. He noted it would not be unusual for the state to receive preferential consideration for a water use permit in light of the intended land use, i.e., a pressing public purpose. Mr. Spitler said construction of this facility would probably have to be accelerated. Mr. Stephens said construction could only be accelerated if this project was included in the special appropriations bill. Mr. Spitler stated that option might have to be considered. Ms. Giunchigliani asked if projects could be approved individually rather than waiting to approve the Capital Improvement Program as a whole. Senator Rhoads asked what it would cost to house inmates in other states rather than building new prison facilities on an emergency basis. Mr. Bayer responded costs varied from state to state. Presently inmates could be housed in Nevada for much less than it would cost to send them to other states. He agreed to provide figures to the committee. Mr. Ghiggeri reported it cost between $55.00 and $60.00 to house federal inmates. It would cost more to house them out-of-state. He noted if Nevada was to participate in an interstate compact with California, Nevada would have to agree to house a like number of California inmates. Mr. Stephens referred to Project 95-G3, the Women's Correction Center 60-Bed Housing Unit. Senator Mathews inquired whether the number of women inmates was growing at the same rate as the male inmate population. Mr. Stephens said the number of female inmates was not increasing as rapidly as the number of male inmates but it was increasing at a rate which was greater than expected. The current capacity was 210 and inmates totaled 221. He explained while a 60-bed addition seemed to be a large percentage increase, it was the optimum size for a permanent addition to a medium security facility. Senator Mathews noted, in light of the inmate numbers, this project did not appear to be as urgent as other prison projects. Mr. Bayer testified the prison system was seeing more maximum custody women inmates than in the past. As a result, prison populations were having to be segregated into medium and maximum custody groups, which was difficult in a small facility. Mr. Spitler commented a women's facility had been proposed first for Pioche and then for southern Nevada. He inquired whether there was still funding available to implement that proposal. Mr. Stephens said funding for the project had been withdrawn. He noted this 60-bed addition would utilize one of the elements of the design for the earlier project. Mr. Spitler asked about the proposed site near Nellis. Mr. Stephens replied the land was still available for use as a prison site. Three projects had been proposed for the site, including the southern Nevada armory complex, which is currently a viable project. The other projects included a forensic facility and the women's prison, both of which had been designed but would not be constructed. The site could be used in the future for construction of a prison. Mr. Spitler asked what it would have cost to construct the women's prison at the site. Mr. Stephens answered the cost of the women's prison was estimated to be $20 million in 1994 dollars. Mr. Spitler inquired how many beds would have been in that facility. Mr. Stephens answered there would have been 168 beds and core facilities for future additions in the first phase. Mr. Spitler questioned whether all 60 new beds would be required in the coming biennium. Mr. Bayer responded most of the beds would be needed in order to segregate inmate groups or for disciplinary use. He explained some cells may contain only one inmate. Other cells could be filled with two inmates. Mr. Spitler asked what percentage of women inmates were from southern Nevada. Mr. Bayer said he would provide the information to the committee. Mr. Spitler inquired whether the Department of Prisons was advocating the construction of a women's facility in southern Nevada. He pointed out studies regarding recidivism and rehabilitation studies indicated rehabilitation was successful only when women were incarcerated in the vicinity of their families. Moving women inmates great distances from their homes negated efforts to rehabilitate them because family contact was lost. Mr. Bayer indicated the Department of Prisons was planning to convert the restitution center in Las Vegas to a total female facility. There would be 60 beds in that facility. Mr. Spitler asked if the Department of Prisons would make the determination which female inmates would be eligible for that facility. Mr. Bayer responded affirmatively. Senator Rhoads questioned what had happened to the proposal for a private women's prison. Mr. Ghiggeri replied the state had experienced some financial difficulty. The majority of the funding provided for the project was utilized as budget savings by the Department of Prisons since female inmate population growth had leveled off. The issue was not addressed by the 1993 Legislature. Senator Rhoads suggested this may be the time to revisit this issue. Senator Jacobsen noted there was a 50-bed facility at Pioche which might be available for sale to the state. Mr. Stephens said he understood Clark County was renting space in the facility. Mr. Comeaux stated the facility had been built privately for sale to the county but the county had never followed through on the purchase. The facility was currently available but the administration had found it to be unsuitable for state use. Ms. Giunchigliani echoed Mr. Spitler's comments that women inmates should be housed close to their homes in order to promote rehabilitation. Mr. Spitler questioned whether it was cost effective to build a 60-bed unit. Mr. Bayer replied it was not cost effective to add fewer than 60 beds. This addition could handle population projections. Mr. Spitler suggested it might be prudent to build more cells now rather than adding units in the future at inflated costs. Mr. Dini asked for an explanation of what was happening in the women's prison system. He noted while women were housed at the Silver Springs and Jean honor camps, they were not working the forestry crews. Mr. Bayer said he did not know why those inmates were not working. He surmised inmates may not be working due to medical problems. He noted the Silver Springs honor camp was nearing full capacity. It was designed for 112 inmates at emergency capacity, and there were currently approximately 100 inmates in the facility. Mr. Dini asked if there were facilities for women at Jean. Mr. Bayer responded there were approximately 100 women housed in the Jean honor camp. Mr. Dini questioned whether bids could still be let for the construction of the southern Nevada women's prison. Mr. Stephens said there were plans for a southern Nevada women's prison and the site was ready for construction. Theoretically, the state could begin construction of a women's prison at the Nellis site in the summer of 1995. He noted water availability would be a major issue to be considered. He added building a new prison would be more costly than what the Governor was proposing. He speculated, however, the advantages would be the southern Nevada location and accelerated completion time since design and site preparation was already accomplished. He noted the southern Nevada project had not been reviewed in depth recently. Mr. Stephens continued his presentation. He referred to Project 95-G4, Indian Springs Boot Camp Expansion. He said this project would add 72 beds at Indian Springs. The cost would be $617,647 for a permanent building, site work, and fencing. He explained modular units were currently being used at Indian Springs. Chairman Marvel asked if the boot camps were successful. Mr. Bayer said there were pros and cons associated with the boot camps. He noted they were cost effective and successful in the short term. He explained there had been no studies conducted in Nevada to determine if they prevented recidivism in the long term. He expressed the opinion it was worth expanding the boot camps. Mr. Close said he had received information from Assemblyman Harrington regarding the cost of alternative housing for inmates. He said he would provide the information to other committee members. Mr. Spitler pointed out extensive repair and maintenance work was required to keep modular units serviceable because of the abusive treatment imposed on them by the inmates. He questioned the success of the program, if inmates were destroying the facilities. Mr. Stephens noted the cost of this project was less than $9,000 per bed, compared to $50,000 to $100,000 per bed at other custody levels. Mrs. Chowning stated the interim study committee had been told the boot camps were very effective, with a 20 percent recidivism rate versus an 80 percent recidivism rate in the prisons. She said it was interesting to hear now that there was no information regarding recidivism. Mr. Bayer said he would research the issue of recidivism and report back to Mrs. Chowning. Mr. Stephens then referred to Project 95-G5, renovation of and addition to the Nevada State Prison culinary. He explained this project would upgrade the culinary by expanding kitchen facilities and adding food storage space. Chairman Marvel asked how much had been spent in the recent past on the prison culinary. Mr. Stephens said this project had been proposed to the 1993 Legislature but then withdrawn. The former prison director had intended to build a new culinary unit rather than renovating the old unit. Mr. Spitler stated the cost appeared to be $1 million greater than had been proposed in 1993. Mr. Arberry questioned why the kitchen was being expanded but the dining room was not. Mr. Stephens responded inmates could be fed in shifts rather than all together. He said the current dining room facility was apparently meeting the needs satisfactorily. Mr. Stephens next presented Project 95-G6, the central warehouse addition at Stewart. He explained the current prison system warehouse was too small and the refrigeration system was worn. This project was for an addition to the building and for replacement of the refrigeration equipment. Mr. Stephens indicated there were no other prison projects to be presented. Chairman Marvel asked for public testimony on the prison projects. Ms. Linda Johnson, southern Nevada representative, State of Nevada Employees Association, testified in support of Project 95-M3, replacement of the locking system in Unit 8 at the Southern Desert Correctional Center. She said the inmate population in this unit was approaching 200. The inmates were able to release the current locks. She had received reports of incidents where up to 17 inmates had released themselves, creating an unsafe work environment for employees along with escalated levels of stress and anxiety. She urged the committee to approve this project in order to ensure the safety of employees and members of the public. Chairman Marvel noted locks in the prisons had always been a concern to this committee. Mr. Stephens continued with his presentation. He directed the committee's attention to the construction projects, beginning with Project 95-C2, the juvenile treatment facility in southern Nevada. He explained the Governor recommended an $8,987,482 appropriation to design and construct a 56-bed facility for classification, evaluation, and treatment of court adjudicated, delinquent youth with moderate to severe emotional problems. Ms. Giunchigliani noted the facility where emotionally disturbed juvenile offenders were currently housed was overcrowded. Senator Rawson inquired whether there was strong sentiment for locating this facility on the West Charleston campus of the Southern Nevada Adult Mental Health Clinic rather than some other site. Mr. Stephens noted this facility would be a treatment center, not a forensic facility. He said he was not aware of any resistance regarding the proposed location. Mr. Stephens said the next project, Project 95-C3, was an addition to Lake's Crossing. The Governor proposed adding 6,000 square feet for an acute classification unit and 2,400 square feet for group activities. The addition would expand capacity by 12 beds. Mr. Stephens noted again the Division of Mental Health and Mental Retardation would be approaching the committee with a request for an additional $600,000 to cover the cost of a visiting room and intake unit. Mr. Spitler requested an update on the Lake's Crossing projects from the 1993 Capital Improvement Program. He recalled there were a number of porcelain toilets which were to be replaced. Mr. Richard Knapp, Chief of Design, Public Works Board, testified the replacement stainless steel toilets had been designed and fabricated and were currently ready to be installed following bid of the project. He explained the project had been delayed because Prison Industries made an error in manufacturing the toilets and the work had to be redone. The acting administrator of the Mental Health and Mental Retardation Division had now requested that a portion of the appropriation designated for the barbershop and laundry areas be transferred to Project 95-C3. Chairman Marvel said this project had been ongoing for several years. Mr. Knapp stated the appropriation was made in 1993, the toilets had now been produced and transferred to Lake's Crossing. The installation project would be bid within a week or two. Mr. Spitler pointed out when the funding was originally requested for the toilet replacements there had been some sense of urgency about the project since shards of broken porcelain were being crafted into weapons. Mr. Spitler inquired whether funding for the expansion of the day room and seclusion room would be transferred into the new project as well. Mr. Knapp said he would have to review the project and provide a report to the committee in response to the question. Mr. Arberry questioned why stainless steel toilets had to be designed. Mr. Knapp said the Public Works Board had been asked to use Prison Industries to perform this work. It was determined Prison Industries had the capability to do the job. The toilets originally produced did not fit, however, due to an incorrect measurement. The toilets had to be redone, and the project had only recently been completed. Chairman Marvel asked fiscal staff to note this situation. Mr. Price said it was his understanding generally Prison Industries was not to compete with private industry when products were available. He also questioned why Prison Industries was used on this project. Chairman Marvel responded Prison Industries would not compete with a Nevada manufacturer. The covenant not to compete did not extend to out-of-state manufacturers. Mr. Stephens then referred to Project 95-C5, addition to child and adolescent services building at Children's Behavioral Services. He explained the project would add counseling rooms, staff offices, and a storage area to accommodate the expanding early childhood treatment program. Mr. Stephens next directed the committee's attention to Project 95-C6, an addition to Western Nevada Community College. He explained this was a $14.1 million project and was the highest priority on the Board of Regent's project list. He added the Public Works Board had not altered the Board of Regent's priorities. The project included a 90,000 square foot addition, remodel of 12,000 square feet, a new parking lot, landscaping, and a connector road. Ms. Giunchigliani asked what the total cost of the university projects was. Mr. Stephens replied approximately $63 million of the $154 million major construction costs was for university projects. Ms. Giunchigliani inquired how much of the cost was for northern Nevada projects and how much was for southern Nevada projects. Mr. Stephens said a breakdown of costs could be provided to Ms. Giunchigliani. He noted while it appeared much of the funding was going to northern Nevada projects, in 1993 funding went predominantly to southern Nevada. Additionally, the priority list was set by the Board of Regents, whose membership was predominantly from southern Nevada. Ms. Giunchigliani indicated she would be looking closely at the Board of Regents' 10-year plan insofar as what was requested and what was allocated. Senator Mathews stated she had been assured by the Chancellor that the Board of Regents and each campus administrator had agreed on the current priority list. Mr. Stephens noted the Governor recommended design of the new UNLV library. He pointed out when that project is funded for construction it will be the largest university project ever built other than the events centers. It would probably take most of the university appropriation in the 1997-99 biennium. Mr. Close asked if there was an appropriation for video conferencing equipment. Mr. Comeaux responded the Governor recommended a one-shot appropriation of $21 million for improvements and technology. Video conferencing equipment for the distance learning program was included in that recommendation. Mr. Stephens next presented Project 95-C7, the UNR education building. He reiterated university projects were listed according to the Board of Regents' priorities. He explained the project was to construct a 110,000 square foot building. Senator Mathews inquired whether the new building would be built adjacent to the current education building. Mr. Stephens replied the new building would be built on the site of the current military training facility, which would be demolished . Mr. Stephens noted authorization to spend the appropriation would be needed almost immediately on approval. Bids had to be let by the summer of 1995 because costs were only projected through 1995. Senator Rawson commented funding would come from bond issuances and would be dependent on the sale of bonds. Senator Rawson asked if there were new parking facilities associated with this project. Mr. Stephens said no parking structure was proposed. Senator Rawson conjectured parking might be required to accompany the new building. Mr. Stephens moved on to Projects 95-C8 and 95-C9. He explained these were both armory projects, one in Clark County and one in Washoe County. He noted the projects must be let for bid and construction begun prior to October 1, 1995, or available federal funds would be lost. Adjutant General Tony Clark, Nevada National Guard, testified the southern Nevada armory was sorely needed. He pointed out $10 million in federal funds had been appropriated for nearly three years. If the project was not contracted by September 30, 1995, that federal appropriation would be withdrawn. General Clark explained the present armory in Clark County was in disrepair and was too small to handle heavy equipment or training. He noted the Nevada National Guard would be converting to larger tanks and needed the new facility to handle the new equipment as well as provide training grounds. General Clark said the Washoe County project was smaller than the southern Nevada project. It required less state funding than the southern Nevada project because it would be constructed on federal land. Costs to the state would be associated with site preparation and utilities. The federal funding would cover the construction costs. The state would pay 25 percent of the construction costs of the Clark County armory. Construction of two maintenance facilities included in the Clark County project would be federally funded. Chairman Marvel asked if the current Clark County armory would be sold. General Clark responded the property would revert to the City of Las Vegas when vacated by the National Guard unless an agreement could be negotiated with the City Council to reconvey the property, free of the reversion clause, to the state. Mr. Stephens said the next project, Project 95-C10, was the Northern Science Center for the Desert Research Institute. He explained the Science Center was currently located in the Sage Building, which was constructed in the mid-1950s to house computers and radar equipment. The building was unsuitable for its current use and barely met safety standards. He noted the project included some unfinished space and the Desert Research Institute might be requesting additional funding to complete the facility. Mr. Spitler asked if the ring road had been completed. Mr. Stephens said it had not. Mr. Spitler inquired when it would be completed. Mr. Stephens answered completion of the road was not included in this project in an effort to reduce costs. Mr. Stephens reported Project 95-C11 was construction of the dining room building at the Caliente Youth Center. He explained currently food was prepared at a central location and transported to individual cottages. The new facility would allow service of meals in a central location near the food preparation area. Senator Jacobsen noted this was a necessary facility. The current operation was very inefficient. Mr. Stephens said Project 95-C12 was a small addition to the Division of Forestry's Elko office to keep up with growth. The project cost was $136,951. Senator Jacobsen noted inmate labor would be utilized to construct this project. He commented honor camp crews had provided excellent service in the past in Elko County in cooperation with unions and the general public. Mr. Stephens reported on the next project, Project 95-C13, Phase II of the remodel of the Old Library Building in Carson City. He said the request had been revised from approximately $600,000 to nearly $800,000. The revision was based on actual conditions of the building versus what had been originally anticipated. Once completed, the building would house the Commissions on Tourism and Economic Development, including Nevada Magazine. Senator Rawson asked if a seismic upgrade to the building had been completed. Mr. Stephens responded the seismic upgrade and remodel of the first floor were currently in progress. Senator Rawson inquired whether the building could be made earthquake resistant. Mr. Stephens said consulting structural engineers had advised the structure could be made earthquake safe. Chairman Marvel questioned whether there was adequate funding for seismic work. Mr. Stephens responded affirmatively. Senator Rawson asked if this project would constitute an adequate remodel or simply enough to get by. Mr. Stephens said an $800,000 appropriation would provide for an adequate remodel; $600,000 would only be enough to get by. Mr. Stephens reported Project 95-C14 was the remodel of the Fremont School for use by the state mail room. He noted the site was well suited to the state mail room function. The committee had no questions or comments on this project. Mr. Stephens moved to Project 95-C15, completion of the Truckee Meadows Community College Advanced Technology Center Phase VI(B). He indicated this was the final phase of this project and would add classroom facilities. He said design was completed and requests for bids for construction would be let in the summer of 1995. Mr. Dini asked where this project fell on the Board of Regents' priority list. Mr. Stephens replied this project was number four on the priority list. Mr. Stephens reported the next project, Project 95-C16, was construction of a new classroom/office building for the Northern Nevada Community College in Elko. He stated the Public Works Board had worked with the college to revise the originally requested project to develop a less costly project which would still be functional. The committee had no questions or comments on this project. Mr. Stephens referred to Project 95-C17, additional funding in the amount of $250,000 for the 1989 Boulder City Railroad Museum project. He explained the project had been put to bid, the bid had come back high and the architect was not required to redesign the project to meet bid limits. The Public Works Board was now redesigning the project in-house, but as the result of the delay, more funding than originally anticipated was now required. Mr. Stephens noted two small projects for the Employment Security Division were listed under Tab E in the Capital Improvement Program binder. One project was a 15,000 square foot addition to the Reno office. The other project was a 17,000 square foot addition to the Fallon office. The Employment Security Department was providing the funding for those projects. Chairman Marvel asked if there were any other major projects to be presented. Mr. Stephens replied the Highway Fund projects were significant. The first project, Project 95-H1, was construction of a full-service Department of Motor Vehicles and Public Safety facility in Henderson. He explained this would be a Department of Motor Vehicles facility, not a Highway Patrol facility. Chairman Marvel inquired whether this new facility would handle some of the Las Vegas office caseload. Mr. Stephens noted a new Department of Motor Vehicles building was about to open in Las Vegas which would provide relief to existing Las Vegas offices. Mr. Stephens explained Project 95-H2 was to renovate the Department of Motor Vehicles and Public Safety headquarters building. He suggested this project should be reviewed in light of the proposed reorganization of the agency, which envisioned splitting the department.. Mr. Spitler asked if the proposed consolidation of the state mail system and transfer of the bar coder equipment to the mail room had been considered in this request. He suggested the space to be vacated could negate the need for this proposed addition. Mr. Stephens said he did not know if the transfer of the bar coder equipment had been considered in this request. Mr. Stephens reported Project 95-H3 was the renovation of the East Sahara office of the Department of Motor Vehicles and Public Safety. The project would update the 20-year old office in a manner similar to the renovation completed in Reno. Mr. Stephens said Project 95-H4 constituted renovation of a small Highway Patrol Office for a cost of approximately $100,000. Chairman Marvel asked Mr. Stephens to address any remaining major projects. Mr. Stephens responded major maintenance projects included Project 95-M2, Renovation of Building 107 at Stewart for the Department of Motor Vehicles and Public Safety, for a cost of $374,955; and Project 95-M4, closing existing solid waste landfills at two prisons, for a cost of $1,546,773. Chairman Marvel asked why Project 95-M4 was so costly. Mr. Stephens said the project had been studied and the least costly option had been selected. Mr. Stephens said there were a number of prison maintenance projects included in the Capital Improvement Program. He noted the prison facilities were aging and they were subject to substantial wear and tear. Senator Mathews noted Project 95-M7 proposed replacement of existing razor wire. She asked if the original wire had worn out. Mr. Daily explained the fence upgrade would replace old wire with new wire which was designed to stay rigid. Mr. Close asked how many inmates had escaped over the current razor wire. Mr. Daily said as far as he knew there had been only two escapes. Mr. Stephens called the committee's attention to Project 95-M20, maintenance and renovation at the Nevada Mental Health Institute, for a cost of $1,195,476. He projected the study currently being done at the Nevada Mental Health Institute would reveal different maintenance and renovation projects and different priorities than those reflected in this proposal. Chairman Marvel questioned whether consideration was still being given to selling the facility. Mr. Stephens said he did not believe the study would recommend selling the facility. The recommendation would be to upgrade the existing patient facility and to consolidate other operations. Mr. Stephens referred to Project 95-G8, purchase of two buildings near the Attorney General's Office from Carson City. He noted this acquisition had been a key component of the master plan for the Capitol Complex. He explained this project was currently on hold. Mr. Dini referred to Project 95-M39, conversion of high pressure steam boilers to low pressure steam boilers for the Department of Prisons. He questioned whether the issue of cogeneration had been reviewed. Mr. Stephens stated this project had been withdrawn from the Capital Improvement Program and the Governor did not recommend the project. Chairman Marvel inquired about the expansion to the legislative building. Mr. Stephens explained definitive plans for this project resided with the Legislative Counsel Bureau. His understanding was the project consisted of a 95,000 square foot addition to the back of the current legislative building. The addition would be three stories tall with a basement. The project would entail minimal remodeling of the current building. The addition would provide badly needed office space for legislators and staff. The Governor recommended this project. Mrs. Evans inquired whether the legislative library would be moved back into the legislative building as the result of the expansion. She noted it was inconvenient to have the library located in a separate building. Mr. Stephens said he did not know the answer to the question since this project was not under the jurisdiction of the Public Works Board. Ms. Giunchigliani expressed the hope ADA requirements would be reviewed in looking at this project. Mr. Stephens recommended the project be subject to the same plan checks as Public Works Board projects. He noted, however, the Legislature was exempt from state building code laws. Ms. Giunchigliani inquired whether the facade of the current legislative building would be remodeled to fit more appropriately with other Capitol Complex buildings. Mr. Dini said the cost of remodeling the facade was prohibitive. Mr. Price noted legislation to eliminate the legislative exemption to state laws was being proposed in the Assembly. DEPARTMENT OF HUMAN RESOURCES - AGING SERVICES - PAGE 1259 Ms. Suzanne Ernst, Administrator, Division for Aging Services, introduced Deputy Administrators Mary Liverati and Bonnie Pillaro. She explained the measurement indicators included in the Executive Budget had been misprinted. She distributed copies of corrected measurement indicators (see Exhibit E). She noted the number of meals served by programs funded by the Division for Aging Services should be 1,128,000. The number of social service units provided by Division for Aging Services programs should be 427,200. Ms. Ernst reported the Division for Aging Services represents Nevadans age 60 years and older and assists the broader community. The Division assists older persons by safeguarding their rights, fostering their self-sufficiency, providing counseling, and advocating on their behalf. By 1990 those 65 and older comprised the fastest growing age segment of Nevada's population and constituted nearly 11 percent of the state's population. From 1990 to 1994 there was an additional 22 percent increase in this age group. This age group grew faster in Nevada during this period than anywhere in the nation. Ms. Ernst explained the budget was comprised of 83 percent federal funds, 16.5 percent state funds, and .5 percent from other sources. The total budget request for Fiscal Year 1996 is $11,808,911 and for Fiscal Year 1997 is $16,602,028. She stated 74 percent of the budget passed through the Division and was granted or contracted to service providers and other agencies and organizations. The remainder of the budget included direct services (i.e., ombudsman investigations and case management services). She said 89 percent of the Division's budget provided direct service to Nevada seniors. Ms. Ernst said the Division for Aging Services had two budget accounts. Budget account number 101-3151 encompassed the grant funds under the Older Americans Act which were distributed to agencies to provide direct service to seniors, and state funds to support the senior center network, the fiscal operations of the agency, and the elder rights component. Ms. Ernst stated the base budget included the categories of programs primarily funded through the Older Americans Act, including Title IIIB social services, Title IIID in-home health services and respite, Title VII ombudsmen, Title IV training, Title IIIC nutrition, dependent care, Retired Senior Volunteers Program (RSVP), foster grandparents, and Title VII elder abuse. She noted the measurement indicators indicated more service was provided to clients than was planned. This increased service reflected new federal funding received under Title IIIF. Ms. Ernst explained the state senior services category represented General Fund monies utilized to maintain the senior center network in all counties except Clark County. Ms. Ernst reported the local project state share category (state transportation funds) was, for many years, provided through stripper-well monies, which were no longer available. Funds were used primarily to support senior centers and tribal governments. She noted 26 of the 29 projects to receive funding over the past three years were in the rural areas, including six tribal governments. Ms. Ernst said Title V represented a federal program to provide on-the-job training to low-income seniors to help them enter the job market. The USDA category provided cash reimbursement for eligible meals served through the Senior Nutrition Programs. Title IIIF was a new category through which funds have been granted for medication management, nutrition screening, a wellness conference, an Alzheimer's diagnostic service, training exercise instructors, and health promotion brochures. Ms. Ernst pointed out the agency received a small amount for pension counseling. The community ombudsman utilized those funds to provide information regarding pension issues and as grants to organizations to fund conferences on this topic. Ms. Ernst noted the term "annualization" was used in this budget. She explained this was a reasonable and logical way to draft the budget. Annualization was performed as an adjustment to base representing the increased cost which occurred during Fiscal Year 1994 for current, existing services. The adjustment would bring the base to the level of current cost to continue the services at the Fiscal Year 1994 level. The adjustment did not relate to anticipated increases in demographics or inflation, which were reflected in the maintenance and enhancement portions of the budget. Ms. Ernst said adjustments to the base budget were annualized. The annualization of funds to support legislatively approved programs reflected the amount of funds actually granted to the Division in Fiscal Year 1994 in order to ensure there were sufficient state dollars to match for federal funds. Ms. Ernst indicated one of the greatest changes requested by the Division was reflected in Item M-200 of the maintenance budget. The measurement indicators projected investigation of 3,000 complaints in Fiscal Year 1994. Actual investigations totaled 4,650. It was anticipated Fiscal Year 1995 projections would also be exceeded. Chairman Marvel asked if Title XIX resources should have been included in the base budget rather than in the maintenance budget. Ms. Pillaro responded a portion of administrative salaries in Item M-200 were reimbursed by Title XIX for the percentage of time devoted to Community Home-Based Initiative Programs (CHIP). Additional funding represented an increase in the CHIP program as well as additional positions requested. Mr. Stevens questioned whether the Title XIX revenue was earned by positions included within the base budget and, if so, if it was appropriate to place Title XIX revenue in a decision unit where it was not earned. Ms. Ernst said it was appropriate for the revenue to be in the base budget. Ms. Pillaro said the Division had interpreted the increase to be associated with an increase in demographics, and therefore, placed the item in the maintenance budget. Chairman Marvel said this matter would be reviewed by the subcommittee. Mrs. Chowning requested information regarding the complaints investigated by the Division, including a report of outcomes. Ms. Ernst stated the agency received nearly 700 complaints of abuse, neglect, and exploitation. In addition, approximately 200 courtesy visits (i.e., visits not in response to a complaint) were made to group care homes. Chairman Marvel asked what the alternative to the stripper-well monies was for rural senior transportation. Ms. Ernst responded there were no longer matching funds for the purchase of vehicles. Chairman Marvel asked if the Division was developing any alternative funding. Ms. Ernst said there were no matching monies from any source. Chairman Marvel directed the subcommittee to review this matter. Mrs. Evans questioned whether the Division had assessed the impact of this loss of funding on the rural communities. Ms. Ernst said the rural communities would now be faced with raising funding themselves. She pointed out the cost of the specialized vehicles was approximately $30,000. The 10 percent match would be a significant amount for senior centers to raise. She noted it had been difficult for the Division to choose to cut this category from its budget. Mrs. Evans asked if the senior centers had been notified of the discontinuance of the funding. Ms. Ernst explained the matching funds would remain available for approximately 18 months and the Division would be notifying applicants who would not be receiving matches of the unavailability of funds. Mr. Price inquired whether investigative visits were announced. Ms. Ernst said most visits to nursing homes were unannounced. Ms. Giunchigliani asked how Aging Services investigations compared with Health Division investigations. Ms. Ernst responded the Division for Aging Services had always been an investigative agency and had reported significant findings to the Health Division. The Welfare Division Medicaid unit and the Health Division had recently agreed to use findings from Aging Services investigations. Ms. Giunchigliani inquired if the measurement indicators reflected complaints about nursing homes only. Ms. Ernst said approximately 20 percent of the complaints were about group homes and the balance were about nursing homes. Ms. Giunchigliani requested itemization of the complaints as well as a report of the activities of the community ombudsman. Ms. Ernst agreed to provide the information. Ms. Giunchigliani asked how many seniors were on the CHIP waiting list. Ms. Ernst answered there were 758 on the waiting list. Ms. Giunchigliani said this information should appear in the measurement indicators. Ms. Giunchigliani inquired how long-term care referrals were regulated. Ms. Ernst said regulations for the licensing of administrators were being developed. Public hearings had been held, and the Attorney General was reviewing the draft regulations. Additional public hearings would be held prior to adoption of the regulations. She noted there was a clear difference of opinion regarding the propriety of the manner in which referrals were currently being made. Ms. Giunchigliani inquired whether Ms. Ernst was aware of any opposition to legislation being proposed against discrimination against group homes. Ms. Ernst stated she was aware of some concern about the location of group homes in Las Vegas. Chairman Marvel asked if the Division anticipated receiving a CPI increase in Title III funding. Ms. Pillaro said the Division expected a 3 percent increase based on information received from the federal government. Ms. Ernst noted if the federal government adopted a block grant program, projections would have to be revised. Mrs. Evans asked that an itemization of equipment needs be provided to the subcommittee for review. Ms. Ernst agreed to provide the information. Mr. Close inquired what would happen if no matching funding was received for senior centers. Ms. Ernst explained federal money was distributed in accordance with the Older Americans Act. Based on the 1990 census, $140,000 was shifted to Clark County. Exhibit F reflected the impact on the other counties if federal funding was not received. DEPARTMENT OF HUMAN RESOURCES - SENIOR SERVICES PROGRAM - PAGE 1267 Ms. Ernst testified this account was generally referred to as the CHIP program, which began operation in 1988. The program provides in-home, non-medical services to seniors over age 65 who require close to institutional care. The program is funded through a Medicaid waiver, and it has been one of the Division's most successful programs. She indicated there were presently 640 clients being served monthly, and there were 78 seniors on a waiting list. Ms. Ernst reported an attempt by the Welfare Division to implement a new Medicaid waiver to be run in conjunction with the CHIP program and intended to move Medicaid clients from nursing homes to smaller group care facilities had failed. She explained numerous staff hours had been spent screening potential clients, strategizing to overcome barriers, and working with long-term care facilities to identify potential participants. After screening 111 seniors, only one client was participating in this program. Ms. Ernst said staff had been hired in preparation for implementation of the new program. She explained caseworkers managed mixed caseloads since they were assigned by geographic area, not by type of case. Each caseworker managed a caseload of 40 clients. When the problems with the group care waiver became obvious, the new staff members were assigned CHIP clients to fill their caseloads. Ms. Ernst stated the goal of the Division was to serve the frail elderly. The Division found clients were not choosing to move out of nursing homes, but they were choosing to remain in their own homes with assistance from the CHIP program. Ms. Ernst reported two of the five new positions authorized in 1993 had not been filled. Chairman Marvel pointed out it was not the 1993 Legislature's intent that the three new positions be filled to serve CHIP clients. Ms. Ernst stated the Legislature had intended for the positions to be filled in order to start the failed program. She noted the Division had federal authority--pursuant to the present CHIP waiver--and federal funding to fill the two vacant positions. The Legislative Counsel Bureau had raised the question of whether doing so would satisfy legislative intent. Ms. Ernst said the Division's position was that legislative intent was to provide alternatives to serving elders. She said if the positions remained in the base budget, they could be used to serve clients currently on the waiting list. Chairman Marvel questioned why the positions appeared in the base budget rather than in one of the decision units. Mr. Jim Riggs, Budget Analyst, Budget Division, responded the two vacant positions had been left in the base budget because they were legislatively approved in 1993. Chairman Marvel pointed out the positions had been approved to serve a different purpose than was now proposed. He suggested the positions should have been justified in one of the decision units. He referred this matter to the subcommittee for review. Ms. Ernst reported there had been a dramatic increase in the state CHIP program. She noted there had once been over $500,000 in the CHIP program budget, but there was currently only $71,000. She explained the difference between the Medicaid CHIP program and the state CHIP program was the asset level. In order for seniors to qualify for Medicaid, their assets must be spent down to $2,000 or less. The state CHIP program had an asset level of $7,000 to allow "near-poor" clients to qualify for the program. The Division had requested additional funding for this program. Ms. Giunchigliani asked where the funding request was located in the budget. Ms. Ernst replied the request appeared in Item M-200 in the maintenance budget. The Division had requested two additional social worker positions and one management assistant position. One social worker position would be federally funded and one would be state funded. Mrs. Evans inquired about the rationale for annualizing the base budget. Ms. Ernst said the Division was having to pay a higher than projected rate for contract services. She explained the higher rate was not the result of inflation or demographics. Therefore, costs in the base budget were annualized. Mrs. Evans questioned whether any other agency budgets were annualized. Ms. Ernst said she did not know about other budgets. She said it seemed reasonable to annualize this budget. Mrs. Evans pointed out the disparity in the annualized budget increases versus average increases could be substantial if it was carried throughout the Executive Budget. Ms. Ernst said average increases did not accurately reflect the reality of the costs of managing full caseloads. Mrs. Evans indicated this issue would be addressed in subcommittee. Ms. Giunchigliani noted there appeared to be large numbers of senior citizens moving into Nevada. She asked if this growth had been reviewed insofar as its impact on the budget. Ms. Ernst said budget projections had taken growth into consideration. She stated 15 percent to 20 percent of people moving into southern Nevada were retirees. Ms. Giunchigliani asked what the percentage change in this budget was from the last biennium. Ms. Ernst said she would provide this information to the subcommittee. Mr. Spitler expressed the hope the subcommittee would look kindly at these budgets. He noted the Division had done remarkable work for its clients on a limited budget. He stated not only was it right to keep seniors in their own homes, but it was the most cost effective method of providing services. He expressed his personal thanks to the Division for the services provided to his constituents. Chairman Marvel called for public testimony. Mr. Joe Fisher, representing the Nevada unit of the American Association of Retired Persons (AARP), expressed concern for the quality of life for Nevada's seniors. He expressed his support for the budget proposals presented with regard to the CHIP program. He noted surveys had shown seniors preferred to live in their homes as long as possible. AARP believed the CHIP program was one of the strongest senior programs provided by the state. He said the program made sense not only in terms of helping seniors, but also financially. Nursing home costs averaged approximately $30,000. Average costs for CHIP participants last year was $3,641. He explained AARP was concerned about the 758 people left on the waiting list as the result of the cap on funding. He pointed out those people represented a potential risk to the state because nursing home care would be their alternative to the CHIP program services. He said AARP strongly requested the committee consider providing additional funding for this budget. Chairman Marvel asked what the cap on funding should be. Mr. Fisher said the cap should be increased to allow at least one-half of the people currently waiting for services to participate in the program. Chairman Marvel questioned how much Mr. Fisher's proposal would cost the state. Mr. Fisher said it would cost approximately $2.5 million to provide services to all the people on the waiting list. Conversely, if they were all to receive Medicaid services, the cost would be approximately $10.5 million. Mr. Fisher thanked the committee for the opportunity to state his position. He said AARP looked forward to working with the committee in any way to help improve programs to support seniors. Mr. Harry Clemmons of the State Commission on Aging urged consideration of funding for transportation in the rural areas. He added increased funding for rural areas was well justified since the funding formula did not give adequate consideration to the needs of the rural areas. He expressed his support of the CHIP program. He noted seniors preferred to spend their final years in their own homes. Mr. Clemmons referred to the caregiver training category in the budget summary. He noted the Legislature had formerly appropriated $50,000 for this item. He considered the $20,000 recommended by the Governor to be a token gesture toward recognizing the needs of caregivers. Ms. Pat Blake, Director, Carson City Senior Center, testified in support of increasing state funding for rural senior centers under Title III. She noted most rural senior centers were operating at funding levels established by the 1989 funding formula. She said the increase in state funds was needed to replace federal funds being redirected to larger counties where seniors represent a greater proportion of the population. She pointed out the sparsity of the population did not diminish the basic need. She said if diverted federal funding was not replaced by state funding, some rural senior centers would close. She urged the committee to increase the Division of Aging's budget authorization to include replacement of lost Title III funds. There being no further business, the meeting was adjourned at 4:34 p.m. RESPECTFULLY SUBMITTED: _____________________________ Dale Gray, Committee Secretary Assembly Committee on Ways and Means February 6, 1995 Page