MINUTES OF THE MEETING OF JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session February 24, 1995 The meeting of the joint subcommittee on General Government of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 8:06 a.m., on Friday, February 24, 1995, Chairman Christine R. Giunchigliani presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY COMMITTEE MEMBERS PRESENT: Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Jan Evans Mr. Bob Price Ms. Sandra Tiffany Ms. Chris Giunchigliani, Chairman SENATE COMMITTEE MEMBERS PRESENT: Senator Lawrence E. Jacobsen Senator William R. O'Donnell Senator Bernice Mathews STAFF MEMBERS PRESENT: Mark Stevens, Fiscal Analyst Dan Miles, Fiscal Analyst Larry L. Peri, Program Analyst STATE PRINTING OFFICE - PAGE 501 Don Bailey, State Printer, stated he was present to answer questions for the joint subcommittee on General Government. Chairman Giunchigliani requested information be provided to the joint subcommittee regarding evaluation of the State Printing Office in terms of turnaround time, work quality and customer satisfaction. Mr. Bailey responded the State Printing Office was picked to spearhead the Total Quality Management program by the Governor. The Policy and Procedure Team, composed of managers and employees of the State Printing Office, did a survey of clients. The survey indicated the clients were pleased with the quality of work performed by the State Printing Office and the prices charged. There were complaints on turnaround time, which were being addressed by the Policy and Procedure Team. Mr. Bailey stated the turnaround time would probably improve. He pointed out the State Printing Office worked on 400 to 500 printing jobs on any given day for 150 state agencies, and some of the turnaround time was as slow as 21 days. Chairman Giunchigliani asked if any new goals had been set by department or types of jobs rather than actual days to complete a printing job. Mr. Bailey responded the State Printing Office instituted a research format which would monitor envelopes, business cards, brochures, and letterheads to measure the per item percentages, breakdown, and turnaround time, which would be available during the next biennium. Senator Mathews wondered if priority rush jobs would cause smaller jobs to have a 21-day turnaround time and suggested an examination be made of how the State Printing Office handled priority printing jobs as opposed to the routine types of jobs. Mr. Bailey agreed with Senator Mathews and explained a request by the Governor would receive a high priority. The Legislative Counsel Bureau also received priority by law, and their request would interrupt the work flow at the State Printing Office. Chairman Giunchigliani inquired when the report from the Total Quality Management team was expected to be completed. Mr. Bailey stated the forms had been distributed, but he did not expect to see any results for at least six months. The hope was to share some of the results from the Total Quality Management report with the Audit Subcommittee. Senator Jacobsen suggested members of the joint subcommittee personally view the operation at the State Printing Office. He noted the Legislative Counsel Bureau audit report indicated the printing office had suffered financial losses and asked whether the legislative body was being charged adequately for printing jobs. Mr. Bailey responded the State Printing Office did not charge for everything, but the Legislative Counsel Bureau represented 28% of the printing office business and was charged fairly. As a result of the audit report indicating fees had not been adjusted from 1990 to 1994, the fees were raised and the 1995 revenue losses had been made up. Mr. Bailey stated he was reluctant to raise fees because of the lack of funds within state agencies to pay for printing. He assumed responsibility for the financial loss to the State Printing Office but felt the increased fees would level out the revenue. Senator Jacobsen asked if the Legislative Counsel Bureau was billed on an hourly basis. Mr. Bailey explained billing was issued on an hourly basis, but all work was broken down into categories like histories, journals, and bills which were itemized monthly in order to provide individual cost factors. Senator Jacobsen noted the legislature had provided direction to the State Printing Office to try to stop the proliferation of printing activities by other state agencies. He asked if the proliferation was now under control. Mr. Bailey responded since the middle 1970's the proliferation was well controlled. The State Printing Office closed down the print shops in Employment Security, the Department of Education, and 90% of the Department of Transportation printing. With the copier base, desktop publishing and personal computer technology available to agencies, the State Printing Office was hesitant to restrict agencies from using equipment which had been authorized by the legislature. The printing office would support and guide agencies in working with their equipment, which was a drain on the State Printing Office business, but it brought more efficiency to state agencies. Mr. Allard inquired if the State Printing Office had raised rates enough to comply with state statutes requiring that materials and labor be covered. Mr. Bailey replied the State Printing Office had reached their authority level for 1995, and future authority levels would be monitored closely every six months in order to stay at the proper level. Mr. Allard noted there was a discrepancy in measurement indicator number 7 actual and total resources and asked for an explanation. James Manning of the Budget Division responded the issue had been raised previously during committee hearings, and measurement indicator number 7 actual should be corrected to the actual base year in the amount of $3,115,394. Mr. Allard pointed out $3,115,394 did not match up with the total resources. Mr. Manning explained $14,236 was not a direct revenue but was a balance forward. Mr. Allard inquired about micrographics going to the Department of Museums, Library and Arts. Mr. Bailey explained by moving micrographics to the Department of Museums, Library and Arts, paper flow would be more properly aligned with that of the federal government. The paper flow would work from hard copies, which would be kept or destroyed, to microfiche to be archived. Mr. Allard concluded the State Printing Office would not be charging for micrographics in the future. Mr. Bailey explained the micrographics budget would move to the Department of Museums, Library and Arts. Mrs. Brower inquired if overall rate increases had been considered in the State Printing Office budget for FY 1995 through FY 1997. Mr. Bailey stated the 12% rate increase had not been figured in the FY 1995-97 State Printing Office budget. Chairman Giunchigliani inquired of Mr. Comeaux if a commensurate printing rate increase had been included for all other agencies in the Executive Budget. John P. Comeaux, Director, Department of Administration, explained as a result of the rate increases by the State Printing Office, the Budget Division looked at the possibility of adjusting the M-100 inflation decision unit. Since the rate increase was designed to cover an approximate $200,000 shortfall in the State Printing Office budget, it was determined that shortfall was not significant enough to include in other budgets. However, since the budget was prepared it had come to Mr. Comeaux's attention a couple of budgets, one being the Office of the State Controller, had a significant line item amount for printing costs which should have been included in their budgets. He offered to provide updated information to the joint subcommittee. Chairman Giunchigliani inquired when the revised information would be provided to the committee. Mr. Comeaux responded he would try to provide the information by the week of February 27, 1995. Chairman Giunchigliani commented the Legislative Counsel Bureau had purchased approximately $200,000 in raw material and the State Printing Office had approximately $500,000 in raw material. She asked if that was adequate for the State Printing Office budget. Mr. Bailey noted there had been major rate increases in the paper market. The Executive Budget had nothing in the way of an increase other than what was requested at $773,192 for raw material. Arrangements would have to be made through the Budget Office if rate increases for raw materials continued. Mills were trying for a 100% increase by the end of 1995 for all raw printing material because they were buying pulp from Canada, which drove the price up. Chairman Giunchigliani inquired if the State Printing Office would be requesting a revision in the next couple of weeks. Mr. Bailey stated he would like to meet with Jim Manning and make proposals to reflect some increases for FY 1995. Chairman Giunchigliani asked if the State Printing Office intended to repay the Legislative Counsel Bureau for overtime charges in the amount of $120,000. Mr. Bailey noted the Legislative Counsel Bureau had made no request for repayment nor had the State Printing Office suggested repayment be made. He stated if the request was made, they would be repaid. Chairman Giunchigliani inquired what was being done to keep overtime down or to offset the cost for overtime. Mr. Bailey explained overtime was controlled by the action of the legislature through bill requests. Chairman Giunchigliani suggested the legislature make some policy decisions on how bill introductions were made. When Mr. Allard asked if the State Printing Office was working two or three shifts, Mr. Bailey respond 2.5 shifts. The printing office operated a first and second shift, with two employees working a split shift starting at 2:00 p.m. Mr. Allard asked if three 8-hour shifts would hold down overtime. Mr. Bailey responded more people could be hired except during the legislative off year revenue would not be sufficient to sustain the increased staffing and those employees would be laid off. Mr. Allard asked if people could be hired with the understanding the position would be temporary. Mr. Bailey replied two proofreaders were hired temporarily from the retirement base. Mr. Allard inquired whether the same procedure could be utilized for a third shift during the legislative session. Mr. Bailey stated it was difficult to find competent technical people who would be willing to work on a temporary basis. The printing industry had an extremely low unemployment rate. During the end of the legislative session when volume increased, the printing office would go to three full shifts. Mr. Allard wanted to know if three shifts could be started earlier in order to hold down overtime. Mr. Bailey commented there would still be overtime. The first shift received nothing from the Legislative Counsel Bureau. The bulk of the printing from the committees arrived at approximately 5:00 p.m. Near the end of the legislative session, money committees request orders be returned as quickly as possible, with some bills being turned around within an hour. Mr. Allard asked if three shifts would hold down overtime. Mr. Bailey stated he was doing his best to hold down overtime. Chairman Giunchigliani requested an estimate for overtime be provided to the joint subcommittee. Mr. Price asked if it would be easier to plan on a continuing basis if the legislature met during annual sessions. Mr. Bailey stated he knew who proposed the annual session bill, but as the State Printer he would rather not have annual sessions. Mr. Price noted the time of day the legislative workload arrived at the State Printing Office had an effect on different shifts of the printing office, and Mr. Bailey agreed. Mr. Price asked if inquires had been made regarding the time the Legislature met and the resulting effect on the State Printing Office. Mr. Bailey stated it would be easier for the State Printing Office to adjust to the time schedule of the Legislature than have the Legislature starting earlier in the morning because some committees were already starting at 6:00 a.m. The employees at the printing office were geared to work overtime for six months every other year. Senator Jacobsen commented he did not feel annual sessions would do anything except double the present situation. In years past the legislature had a runner to hand carry documents to the printing office. The present procedure is to wait until the general session adjourns before bill introductions are sent to printing. He suggested bill introduction might be limited to a certain number per day thereby making the printing process more even. Overtime had been addressed during the past, but the Legislature made the demands. If there was not a timely response to the demands, the Legislature would be angry with the printing office. Senator Jacobsen asked if a runner would help with the printing process. Mr. Bailey stated the State Printing Office was using runners. A proposal had been made to research getting the bills to the printing office during the open first shift. Senator Jacobsen noted if legislators would not talk so much, the staff at the head desk would not have to stay as late in order to have the text available the next morning. PRINTING OFFICE EQUIPMENT PURCHASE - PAGE 507 Chairman Giunchigliani asked Mr. Bailey to address the audit recommendations regarding transfer of funds. Don Bailey, State Printer, explained the transfer of funds had been researched, and adequate funding would be available in the budget of the Printing Office Equipment Purchase to acquire equipment requested in both years of the biennium if approved by the Legislature. Chairman Giunchigliani inquired if a supplemental request would need to be made in the future. Mr. Bailey indicated if the budget was not adequate, a reduction would be made in equipment requests. Chairman Giunchigliani inquired if the transfer of funds from the State Printing Office would be made during FY 1995, to which Mr. Bailey responded yes. RECORDS MANAGEMENT - MICROGRAPHICS - PAGE 509 Don Bailey, State Printer, explained there was a proposal to move Records Management - Micrographics to the Department of Museums, Library and Arts. Chairman Giunchigliani asked Mr. Bailey to address the 20% increase in documents microfilmed in projected FY 1994 over actual FY 1994. Mr. Bailey explained the Secretary of State was in the microfilming business, and as a result of the transfer, they had agreed to eliminate microfilming and an employee, who would be moved to the micrographics division. A microfilming manager position was built into budget account 1332 whose salary would be included in the 20% figure. The microfilming manager position was approved and in place. When Chairman Giunchigliani inquired if the additional work from the Secretary of State was by mutual agreement between the departments, Mr. Bailey responded affirmatively. When Chairman Giunchigliani inquired if the transfer of budget account 1332 would be more efficient, John P. Comeaux, Director, Department of Administration, responded that was correct. Conversations with the State Records Committee during the spring and summer of 1994 indicated decisions regarding which records to microfilm were being made at the State Printing Office by people who were not as familiar with records retention as staff at the Division of State Library and Archives. It was felt records were being microfilmed which could easily be disposed of. It made sense to place the micrographics function from the State Printing Office and the Secretary of State with professional archivists. Mr. Allard requested an explanation of the difference between the measurement indicators for actual FY 1994 and other non- state resources. James Manning of the Budget Division explained adjustments needed to be made for FY 1994 actual in the amount of $174,560, for FY 1995 projected in the amount of $214,904, for FY 1996 projected in the amount of $249,718, and for FY 1997 projected in the amount of $231,169. Mr. Manning stated if all the decision units were combined, the projected amounts would agree with the E-900 transfer for other non-state resources. Mr. Manning pointed out the micrographics budget was intended to be absorbed into another budget within the Department of Museums, Library and Arts but now it would go in as a separate budget. Chairman Giunchigliani inquired why the micrographics budget was still being assessed by the Department of Administration. Mr. Bailey responded the assessment, which was part of the accounting costs and director's fees, would be distributed to other sections of the Department of Administration. MOTOR POOL - PAGE 519 Tracy Raxter, Chief of the Administrative Services Division, Department of Administration, offered to answer questions by the joint subcommittee regarding Motor Pool. Chairman Giunchigliani requested the Budget Division address the policy of at-home storage of vehicles. John P. Comeaux, Director, Department of Administration, explained during the spring and summer of 1994 he researched the policy of at-home storage of state vehicles and also looked at how other states handled their vehicles. As a result of his research, in the fall of 1994 a proposal was made to change the State Administrative Manual in that area. The proposed changes were submitted to all departments, adjustments made, and then the changes were submitted to the Board of Examiners, which did approve the changes. The main change was to re-emphasize the fact that at-home storage was only to be approved in cases where it proved to be a benefit to the state and was not used as a perquisite for employees. Another major change was to transfer the approval authority for at-home storage from the Department of Administration to the cabinet level department head, and a report would be required by December 31 of each year indicating who had been approved and the justification for at-home storage. Reports had been received from most, if not all, agencies, and copies would be provided to the joint subcommittee when they were compiled. Chairman Giunchigliani commented she had not seen the policy change. She asked if different criteria would be used by a cabinet level individual to determine if approval should be made for at-home storage for a field officer. Mr. Comeaux responded yes and explained the criteria as follows: 1) Specially equipped vehicles where the driver was subject to an immediate response; 2) Security concern for a vehicle or its contents where secure state storage was not available; and 3) Short term home storage when an employee was starting work early or finishing work late. Criteria might be included for one or two other situations, but those were the major areas. Chairman Giunchigliani inquired when the new policy went into effect. Mr. Comeaux replied September or October 1994. Chairman Giunchigliani asked if there had been a reduction in at-home storage since the implementation of the new policy. Mr. Comeaux commented he had not had an opportunity to review all of the reports so he was unable to answer the question. Chairman Giunchigliani requested a copy of the compilation be provided to the joint subcommittee. Chairman Giunchigliani requested information be provided by Mr. Comeaux regarding the policy on reimbursement. Mr. Comeaux indicated the State Administrative Manual contained no provision for reimbursement. It was the thinking of the Department of Administration that since at-home storage could only be approved for the benefit of the state, then any incidental benefit that an employee might derive from at-home storage would be unimportant and reimbursement should not be sought. Chairman Giunchigliani inquired if legislation was being planned to deal with the issue of reimbursement. Mr. Comeaux stated the Department of Administration had no plans to submit such legislation. When Chairman Giunchigliani inquired if Motor Pool planned to submit legislation regarding reimbursement, Mr. Raxter replied it did not. Chairman Giunchigliani remarked there must have been a change regarding legislation because there was a response in the audit report indicating there would be legislation in 1995. Mr. Comeaux indicated that may have been the intention at the time of the audit, but the results of the research during the spring and summer of 1994 convinced Mr. Comeaux if criteria were tightened so approval was based on benefit to the state, reimbursement would not be necessary. Senator O'Donnell inquired if the new policy affected the Highway Patrol officers who take their cars home. Mr. Comeaux stated the new policy did not affect sworn law enforcement officers. Mr. Allard commented when one of his employees was on one end of town and his or her house was on the other end of town, he would allow the employee to take a vehicle home rather than have him or her drive across town to return the vehicle to the office, which saved on overtime. He asked if a provision like that was available with the state. Mr. Comeaux stated as previously outlined, that was the criteria regarding an employee starting early in the morning or coming home late. Even if it did not save on overtime, it would add to the productive part of their day. Senator Jacobsen asked Mr. Raxter what Motor Pool locations used the services of inmates. Mr. Raxter replied three inmates were used at the Carson City facility. Senator Jacobsen inquired if a wash rack had been installed at the Motor Pool facility in Las Vegas. Lyn C. Callison, Accountant for Motor Pool, responded the wash rack item had been removed from the budget. The Las Vegas Motor Pool facility might be relocated because of an expansion at the airport. Senator Jacobsen inquired with the expansion of the Stewart Honor Camp and the Silver Springs Camp would it be possible to have male or female inmates wash cars one day per week at the Motor Pool facilities. Ms. Callison replied two inmates wash, service and gas the vehicles at the Carson City facility. When Senator Jacobsen asked if that provided adequate coverage for the Carson City facility, Ms. Callison responded yes. Senator Jacobsen inquired what the arrangement was at the Reno facility. Ms. Callison indicated there were two full-time employees and one part-time employee at the Reno facility but no inmate services were provided. Senator Jacobsen questioned if there had been problems with inmates working at the facilities in the past. Ms. Callison indicated she was not aware of any problems, and she felt the inmates had worked well and were paid between $1 and $2 per hour. Chairman Giunchigliani asked Mr. Raxter to address the one-shot appropriation regarding the number of vehicles requested and by whom they were being requested. Mr. Raxter remarked the original request in A.B. 246 was for 84 vehicles. The Budget Division had notified the Motor Pool on February 22, 1995, the number of vehicles had been reduced to 81, resulting in a revised funding request of $947,652. Chairman Giunchigliani requested the joint subcommittee be provided with the rationale for the request and the types of vehicles requested. Mr. Raxter noted he would provide the information. The request was a result of additional employees and new functions being added to agencies. Chairman Giunchigliani inquired if there was a standard policy for replacement. Mr. Raxter stated the current policy was 80,000 miles or 8 years. Chairman Giunchigliani asked what was done with the vehicles once they had reached 80,000 miles or 8 years. Mr. Raxter explained the vehicles were excessed as required by state law through the Purchasing Division. The Purchasing Division in turn auctioned the vehicles through an outside auctioneer at public auction. Chairman Giunchigliani questioned where the auction was held. Mr. Raxter noted in the past auctions had been held in Reno, but auctions were expanded to include Las Vegas during the past year. Senator Jacobsen inquired if an alternate pool was planned for the new building in Las Vegas. Mr. Raxter commented the previous Motor Pool Administrator explored that possibility. His intention at that time was to share a position with the Buildings and Grounds Division at the new building. It was felt a full-time position could not be devoted to serving the Motor Pool satellite facility. The Buildings and Grounds Division Administrator could not justify a half-time position in his budget based on the workload in his division. A Motor Pool satellite facility would need to be staffed eight hours per day, yet only a half-time position was available. As a result, the concept was dropped. Senator Jacobsen commented with the new building in Las Vegas being removed from the airport, it would seem appropriate to have a satellite facility available to provide transportation. Mr. Raxter indicated one of the suggestions by the Assembly Committee on Ways and Means was to look at the flow of people who needed to travel from the airport to the new office building. He stated Motor Pool would explore that issue along with the possibility of providing a shuttle service to the new building. Chairman Giunchigliani inquired if the rationale for not approving the request for a satellite pool costing approximately $81,000 in the first year of the biennium and $27,000 in the second year of the biennium was because the Department of Administration did not know what the need would be. Mr. Comeaux responded yes. When Chairman Giunchigliani asked if by tracking the flow of people, Motor Pool would be able to come back with a request, Mr. Raxter responded affirmatively. Chairman Giunchigliani requested information be provided by Mr. Raxter regarding alternative fuels. Mr. Raxter noted the committee had been supplied with a brief overview of the alternative fuel requirements. He explained Federal requirements were in place and the State Environmental Commission issued regulation implementing state legislation which was passed in 1991 regarding alternative fuels. The state regulations were stricter than the Federal regulations for two reasons: 1) They applied to counties with a population of 100,000 or greater, which involved Reno and Las Vegas, whereas the Federal regulations applied to populations of 250,000; and 2) The major issue was the percent of newly acquired vehicles which needed to be alternatively fueled vehicles. The Federal regulations will take effect in FY 1996, whereas the state legislation will take effect with a 10% requirement in FY 1995, a 15% requirement in FY 1996, and a 20% requirement in FY 1997. The requirement will apply to fleets based in Clark and Washoe Counties and not those based in Carson City or rural areas. Motor Pool converted two existing vehicles in July 1993 and purchased six compressed natural gas vehicles which were later recalled by General Motors. Since those vehicles were acquired before the regulations took effect, Motor Pool had eight credits at the beginning of FY 1995. Through analysis it was determined Motor Pool would be short four vehicles in FY 1997. After examining budget account 1356, Motor Pool Vehicle Purchase, it was felt a reallocation could be made of the vehicles scheduled to be purchased to allow for the purchase of four alternatively fueled vehicles. Through the one-shot appropriation ten alternatively fueled vehicles will be purchased for location in Las Vegas. Chairman Giunchigliani inquired if the vehicles based in Las Vegas would bring Motor Pool into compliance with the regulations. Mr. Raxter stated location of vehicles was important, but the overall picture must be taken into consideration. The one-shot appropriation was examined to determine how many alternatively fueled vehicles would be based in Reno and Las Vegas versus Carson City and rural areas, but obviously the majority of vehicles would be based in Las Vegas and Reno. Chairman Giunchigliani asked how many alternatively fueled vehicles Motor Pool will have in 1995, 1996, and 1997. Mr. Raxter explained Motor Pool had eight credits, not eight vehicles, because six were recalled by General Motors. At the end of 1995 there will be seven credits. At the end of 1996, because ten alternatively fueled vehicles will be purchased to fulfill the ten-vehicle requirement, the year will balance out, and there will be a seven-credit balance. At the end of 1997 there will be a zero balance, so each year more alternatively fueled vehicles will need to be purchased to stay in compliance. Senator O'Donnell asked if the recalled vehicles were in Detroit being repaired. Ms. Callison responded Motor Pool would not get the recalled vehicles back. Senator O'Donnell asked if Motor Pool received any money for the recalled vehicles. Ms. Callison replied Motor Pool was reimbursed for the vehicles. Mr. Raxter explained Motor Pool was completely reimbursed for the recalled vehicles and the rental cost of replacement vehicles. Senator O'Donnell asked if there were other vendors which supplied alternatively fueled vehicles. Mr. Raxter stated he was not sure. Motor Pool had problems with the three major car manufacturers being slow in implementing alternative fuel options. Senator O'Donnell inquired what would happen if the ten alternatively fueled vehicles were not purchased. Mr. Raxter commented it would appear penalties would be assessed as a result of state regulations. Existing vehicles could be converted which would alleviate dealing with car manufacturers. Senator O'Donnell asked if it cost more to comply with state regulations than it was worth. Mr. Raxter stated the cost of purchasing an alternatively fueled vehicle was several thousand dollars more than a like vehicle which was not alternatively fueled. Senator O'Donnell pointed out there were several companies which had converted their entire fleet to natural gas, the advantage being a whole crew would be designated to maintain those vehicles. If ten vehicles out of a hundred were alternative fuel, two crews would be required. He suggested the entire fleet should be alternative fuel or change the regulations to relieve the penalty and encourage the use of alternative fuels if it became economically feasible. Senator O'Donnell inquired if the request to spend $50,000 for an automated billing system was going to be made soon. Mr. Raxter stated he would prefer to wait until the new administrator for Motor Pool was on board to address that issue. Staff at Motor Pool needed to meet with the Department of Information Services to determine if the billing program would meet the needs of the division. Senator O'Donnell commented Motor Pool had $160,000 in their budget predicated on the fact the division would expend $50,000 in FY 1995. He asked why the division needed $160,000 since $50,000 had not been requested. The amount of $160,000 could be put back in the General Fund. Mr. Raxter explained the budget was not funded through the General Fund but through user charges. Senator O'Donnell remarked $160,000 could be taken anyway. Mr. Raxter noted the two amounts were tied together, and it was the intention of Motor Pool to ask for the $50,000 for hardware. When Senator O'Donnell asked if the request would be made soon, Mr. Raxter replied yes. Senator O'Donnell requested a report from Karen Kavanau regarding the status of the software and data processing needs of Motor Pool. If the report came back that she had not looked at the software and data processing needs of Motor Pool and probably would not do so for six months, the answer will be clear as to what will happen. Senator Jacobsen asked for an explanation of the increase from $21,166 in the work program to $66,107 in the agency request for the rental vehicle expense category on page 523. Mr. Raxter called attention to the FY 1994 actual in the amount of $74,345. He explained Motor Pool was going to submit to the Interim Finance Committee an additional work program which would increase the amount from $21,166 to approximately $60,000 or $70,000 for FY 1995. MOTOR POOL VEHICLE PURCHASE - PAGE 525 Tracy Raxter, Chief of the Administrative Services Division, Department of Administration, explained budget account 1356 was funded by depreciation expense transfers from budget account 1354. Motor Pool Vehicle Purchase was requesting budget authority to replace 46 vehicles in FY 1996 and 73 vehicles in FY 1997. Chairman Giunchigliani requested a formula for the cost of replacements. She pointed out some newer vehicles could go longer than 8 years or 80,000 miles, while jeeps or trucks driving on rural roads receive harsher treatment than commuter cars. The issue of replacement based on depreciation should be looked at and not used simply because of simplicity. Mr. Raxter agreed with Chairman Giunchigliani and stated it was important to consider how much additional cost would be incurred in maintenance versus purchasing a new vehicle. Replacement was an exception in the Legislative Counsel Bureau audit and was obviously an issue Motor Pool Vehicle Purchase would be responding to and implementing. Chairman Giunchigliani suggested the private sector with large motor pools could be looked at to see how they handle vehicle replacement. PURCHASING - PAGE 527 Tom Tatro, Chief, Purchasing Division, Department of Administration, introduced Debra G. Meizel, Chief, Commodity Food Program. Chairman Giunchigliani asked if a process had been developed that would measure timeliness in responding to purchase orders. Mr. Tatro indicated Purchasing was trying to develop meaningful indicators to reflect how well the jobs were being done versus how much work was being performed, but the existing data processing capability did not allow that measurement to be made. Some statistical reporting gave an index against which progress could be measured, which could be misleading without explanation. The index was helpful with management but was not of value to those outside the division. The staff at Purchasing was working on a system which would define the number of days to process the average requisition and customer satisfaction levels. Chairman Giunchigliani inquired if the concept of transferring costs to Commodity Foods which was approved by the money committees in the 1993 legislative session was working out as far as distribution. Mr. Tatro stated the program was working very well. The food distribution program delivered federal commodity foods to school districts and feeding centers throughout the state of Nevada. Purchasing also operated the warehouse system. Several hundred items had been removed from the warehouse, and contracts had been developed whereby agencies would receive products directly from vendors, thereby reducing lead time and lowering the net price to the end user. An alternative distribution method for xerographic paper had not been found. The food distribution program personnel delivered the paper to state agencies and enabled the program to maintain enough drivers to provide a cost effective operation and also kept the cost of paper down. Staff planned to continue monitoring the cost effectiveness of the distribution program. Ms. Tiffany asked what the impact would be to nutrition programs if the federal government sent nutrition to the state of Nevada in the form of a block grant. Mr. Tatro explained block grants were being monitored very closely. The Contract With America had generated a great deal of federal regulation, one of them being H.R. 4 which was introduced in January 1995 to create federal block grants and eliminated virtually every program the division worked with, including the Emergency Food Assistance Program and the School Lunch Program. Thirty percent of import tariffs funded the purchase of agricultural commodities to stabilize and support prices within the United States. The funding received from tariffs was used to purchase and distribute food. H.R. 4 would reduce that funding by 95%. Ms. Meizel pointed out Senator Goodling of Pennsylvania had introduced substitute legislation to H.R. 4 which would be more favorable to the School Lunch Program, the WIC program and food distribution. The funding would be separated into two grants, a family grant and a school-based program grant. Of the $25 million the school lunch program would receive, 9% would be set aside for the purchase of commodity foods, with a 2% cap on administrative costs to run the program. There would be no federal mandate for the nutrition component, but the states would need to draft their own. The Commodity Food Program had an advisory board which had worked very closely with the School Lunch Program, and a task force had been appointed to study those issues. Senator O'Donnell inquired if the school lunch program were administered down to the state level in terms of block grants, would that place more responsibility on Ms. Meizel. Ms. Meizel stated she could not answer the question but would provide information to the joint subcommittee as she received it. There would probably be more responsibility on the state level but not necessarily the funding the state would like. The second proposal, called capped entitlement, would increase over a five- year period from $6.6 billion for the nutrition program to $7.7 billion. Senator O'Donnell asked why the federal government was not continuing with the agricultural subsidy program. Mr. Tatro responded through discussion he heard the diversion of tariffs would go to the General Fund for deficit reduction rather than to purchase agricultural commodities. Senator O'Donnell stated he was under the assumption that because the demand for food was inelastic and the production of food was very elastic in terms of whether there was a drought or whether it was a great season or whether hay prices were high or low, and the subsidy was based on the fact that you would want to stabilize those prices and you want to stabilize the food source so Americans could have milk, corn, butter, and cheese, they had those staples for a long period of time. He expressed surprise the subsidy program was being cut along with the school lunch program. He did not know that connection had been made. Ms. Meizel noted the Department of Food and Consumer Service and the Economic Research Center had produced a report on January 17, 1995, which noted the reduction in commodities and food stamps and how it would affect the market. As a result, the United States Department of Agriculture has stated its opposition to the Personal Responsibility Act and those provisions that were introduced in the first version of H.R. 4. Senator Jacobsen asked Mr. Tatro to review how the new program at Purchasing had been accepted and whether requests from rural areas had diminished. He noted people in rural areas liked the program the way it was. Mr. Tatro indicated orders from political subdivisions had been stable, which represented approximately 11% of Purchasing's business for the prior three years and had not varied by more than one point. One of the problems resulting from the conversion was that Purchasing had become less predictable. Because the new program has different contracts and vendors, a person must be better educated to take advantage of everything offered. A program was being developed to provide a monthly listing of contracts, price lists and ordering instructions so agencies will have current information. The previous program enabled agencies to use a single form which was sent to one location, and merchandise was delivered on a single truck once a month. The new program may have 10 or 12 different vendors delivering products, which has caused some confusion. Senator Jacobsen asked if the Las Vegas warehouse had been dealt with properly in light of the large investment. Mr. Tatro commented quite a bit of money had been spent and was being repaid at $20,000 per year for the next 19 years. He felt the decision not to continue with the warehouse was correct in that the Department of Motor Vehicles was utilizing the site and was able to use some of the preliminary engineering, drainage work and utilities acquired by Purchasing. Had the warehouse been built, Mr. Tatro felt half of the space would be vacant at this time. Reno had a 50,000 square foot facility which Washoe County had rented a portion. Chairman Giunchigliani requested the Budget Division to comment on the proposal to use General Fund revenue for payment of the preparation of the Statewide Cost Allocation Plan. James Manning, Budget Division, noted the amount of $34,500 for the Statewide Cost Allocation Plan was paid by Purchasing and the contract service was being transferred. Chairman Giunchigliani inquired if General Fund money had ever been used previously for cost allocation plans. John P. Comeaux, Director, Department of Administration, indicated General Fund money had not been used in the past for cost allocation plans. The reason for the proposal was even though the initial expenditure would be from the General fund, it would be recovered through the cost allocation. It was felt that would result in a more equitable distribution of cost. He assumed the costs were being assessed to the various agencies based on their level of purchasing, which probably was not the best way to allocate the cost. Chairman Giunchigliani asked if the money would be recovered and repaid to the General Fund. Mr. Comeaux stated it would be recovered through the cost allocation mechanism. Chairman Giunchigliani queried whether Purchasing was the only budget where General Fund money was being used for cost allocation plans. Mr. Comeaux responded yes, because that was the cost of the contract. COMMODITY FOOD PROGRAM - PAGE 533 Chairman Giunchigliani requested an explanation of the projected decrease in agencies being served from 2,296 to 2,273. Debra G. Meizel, Chief, Commodity Food Program, explained an adjustment was made in the manner summer food programs were counted. The summer food programs had been included for the whole year, but now they are more accurately counted for only the five months they are in the program. Chairman Giunchigliani requested an explanation of the inflationary increase in decision unit M-100. Ms. Meizel explained decision unit M-100 was a federal nutrition grant in the approximate amount of $3,000 to $3,500 which did not require state matching funds. The enhancement would provide funding for a consultant to instruct teachers in good nutrition habits for needy American Indians. Chairman Giunchigliani suggested measurement indicators reflect the number of teachers receiving instruction and the number projected to receive instruction. Chairman Giunchigliani inquired if the Commodity Food Program had been contacted by the federal government regarding the new trailer. Ms. Meizel explained the Commodity Food Program had been on a list for two years, and the federal government had a specific time frame in which a grant could be amended. Chairman Giunchigliani queried the timeframe in which the grant could be amended. Ms. Meizel indicated during the fourth quarter of the fiscal year the federal government determined if additional capital expenditure money was available. If the federal money was not granted, the trailer would not be purchased. Chairman Giunchigliani asked if plans should be made in future budgets for a refrigerated trailer if the federal grant was not approved. Ms. Meizel indicated if the grant were not approved, the Commodity Food Program would look at budget account 1364 for the remaining cost of the trailer. PURCHASING - EQUIPMENT - PAGE 539 Chairman Giunchigliani inquired if a calculation had been made of the amount of prior year funds transferred from the Purchasing Division to Purchasing - Equipment. Tom Tatro, Chief, Purchasing Division, explained the contribution from the Purchasing Division to Purchasing - Equipment was $53,397 in prior years, prior transfers from the Food Distribution Program were $41,705, and the projected balance forward was $95,102. Chairman Giunchigliani questioned why the refrigerated trailer was split between budget accounts 1364 and 1362. Debra G. Meizel, Chief, Commodity Food Program, explained the federal money needed to be matched by state money, which resulted in a 25% match from program funds. SURPLUS PROPERTY - PAGE 542 Debra G. Meizel, Chief, Commodity Food Program, distributed to the joint subcommittee a listing of statewide transfers of surplus property (Exhibit C). Senator O'Donnell inquired if a cherry picker had been acquired to help with changing light bulbs in prisons. Tom Tatro, Chief, Purchasing Division, indicated a cherry picker had not been acquired. ADMIN ADMINISTRATIVE SERVICES - PAGE 577 Chairman Giunchigliani inquired for how many employees budget account 1371 provided personnel services and what type of personnel actions were counted in measurement indicator number 6. Tracy Raxter, Chief of the Administrative Services Division, Department of Administration, explained the department was significantly affected by the reorganization of the 1993-95 legislative session which resulted in the combination of the Department of General Services, the Public Works Board and the Department of Administration. The reorganization proposal stated the new department would perform personnel services, but there was no personnel position allocated. Personnel functions were not a high priority to a majority of the divisions, resulting in many personnel actions such as merit salary increases or insurance changes happening retroactively. This also affected the Administrative Services Division because it performed the payroll function for the department. After streamlining the operation, a position was dedicated to personnel, which was filled in August of 1994. The total employee count in the department is 336, and the personnel function will be phased in over a period of time, resulting in the increase of number of personnel actions processed from 1995 to FY 1996-97. Chairman Giunchigliani asked Mr. Raxter to address the state- owned rent costs where three positions would not be centrally located. Mr. Raxter explained prior to the reorganization there were 16 people located in various divisions of the department. A building rent line item was allowed in the amount of $2,800 to accommodate those 16 positions in budget account 1371 for FY 94-95 when the reorganization was approved. It was decided the best way to perform the reorganization function was to leave certain people where they were based on their job function and how they interfaced with other people so as not to create chaos in the department. As the implementation of the reorganization has continued, it is recommended that a couple more employees be centralized in the office at the Blasdel Building. Even though rent was budgeted for the current biennium, those costs have not been incurred because of the employees who have not been centralized. In the spring of 1995 it is expected further reorganization will be implemented which will overlap into the next biennium. When Chairman Giunchigliani asked how many employees were at the central office, Mr. Raxter responded nine. Chairman Giunchigliani inquired if it seemed to be working to leave some employees out in the division. Mr. Raxter stated he felt it was efficient to leave three people in other offices. Ms. Tiffany asked if this request was for a staff which had been transferred in, could they have brought computers with them, what computers were being requested, and what function would be provided. Mr. Raxter pointed out the Administrative Services Division had five 286 class stand-alone personal computers for all employees in their central office which had been obtained free of charge from the Budget Division when they upgraded their machines in 1993. Accounting clerks performed their jobs of paying bills and processing receivables, while accountants used the information from accounting clerks for financial reporting and budget tracking. The Administrative Services Division was also creating a personnel data base for all 336 positions in the department which needed to be accessed by a part-time personnel technician, a personnel officer and Mr. Raxter. This created a diskette roulette as employees swapped files they needed to perform their jobs. For these reasons, a request was made to create a local area network to link all personal computers so people could readily access the information they needed from their own desks. Ms. Tiffany asked if the Administrative Services Division planned on developing their own software or would they be purchasing application software off the shelf. Mr. Raxter responded the Administrative Services Division purchased Lotus 1-2-3, WordPerfect and FoxPro as the data base program. Ms. Tiffany asked why funding for maintenance agreements was being requested if the new machines would be on warranty. Mr. Raxter explained the request was an oversight when the budget was prepared and the request was being deleted for the first year. Ms. Tiffany inquired how the Administrative Services Division handled work that needed to be performed on personal computers. Mr. Raxter indicated it depended on the type of problem. A vendor had come in and worked on equipment in the office, but when a hard drive failed, it had to be sent to the manufacturer to be refurbished. Ms. Tiffany queried whether the requested local area network would be compatible with the wide area network or the statewide network. Mr. Raxter pointed out he relied heavily on the Department of Information Services to make sure the Administrative Services Division needs were met and the computers tied in to whatever the statewide requirements were. Ms. Tiffany asked if the Administrative Services Division was collecting the same kind of information as the Department of Personnel, thereby performing duplicate functions. Mr. Raxter responded no. The Administrative Services Division was tracking training requirements as required by NRS for managers and supervisors before they could perform employee appraisals. The department was also tracking safety training, EEO and affirmative action requirements. Ms. Tiffany commented she had worked on a personnel system for a large Los Angeles company, and they looked at centralizing the data base on a server so that everyone could access personnel information. She inquired if anyone had talked about centralizing personnel information where personal computers acted as a window to server information and the Administrative Services Division just added four more fields onto the Department of Personnel data base. Mr. Raxter remarked those points could only be addressed when the Department of Personnel had a fully integrated system which met all agencies' needs. The same was true with state agencies that had their own accounting systems because the outdated state financial system did not provide an integrated financial system that met all the reporting requirements of each agency. It was hoped some personnel information could be downloaded from the mainframe so all information would not need to be rekeyed. Ms. Tiffany recommended Mr. Raxter talk with staff at the Department of Information Services and the Department of Personnel to see if information needed by the Administrative Services Division could be downloaded from the mainframe and also see if their local area network would interface to the mainframe. Senator Jacobsen quoted from the Legislative Counsel Bureau audit report, "The organizational and reporting structure for General Services accounting does not provide for clear lines of authority, responsibility or supervision. The accounting responsibilities for the Department of General Services are fragmented and decentralized. This structure makes management and oversight more difficult and increases the potential for inefficient accounting practices." He suggested that perhaps the Administrative Services Division should report to Interim Finance in six months to a year so it would not be discovered at the next legislative session that problem areas had become worse. Mr. Raxter explained General Services had been decentralized and reported to individual administrators in Buildings and Grounds, Printing, Motor Pool, Purchasing, et cetera. The 1993 legislative session created the Administrative Services Division through the reorganization bill. As a result of the audit, an analysis was performed of what employees did in their jobs because duties were fragmented with, for instance, someone in Buildings and Grounds assisting someone in Purchasing. Mr. Raxter indicated everything in the audit had been addressed through the reorganization process. Senator Mathews pointed out decision unit E-125 recommended a 4 megabyte memory upgrade and asked if that would be enough memory for the department. Mr. Raxter indicated the new machines would have 8 megabytes of memory. Chairman Giunchigliani inquired what would happen to the 286 computers if they were replaced. Mr. Raxter explained the 286 computers would be turned in through the excess property process to Purchasing. Because Purchasing is part of the Administrative Services Division, he stated he would work with staff to assure that the machines were not disposed of because there were state agencies that had no machines or still had XT's, or they would look at a forum for other government entities or the private sector. The problem was letting people know what was available and putting a price on the items. The Purchasing Division had a program where items such as personal computers, printers, and software programs were on display in the basement of the new library building for people to view for purchase, or in the case of software, it was given away free to agencies that needed it. Chairman Giunchigliani commented she had heard the Ethics Commission was out of money and inquired if an appropriation would be coming. John P. Comeaux, Director, Department of Administration, indicated there was a supplemental appropriation included in the Executive Budget for the Ethics Commission. The commission expressed a need to have a number of additional meetings based on inquires which had been filed. The chairman of the commission requested expeditious action, and a bill had been introduced. Dan Miles, Fiscal Analyst, commented Senate Finance had acted on this matter earlier in the week, and it would be on General File in the Senate today with a do pass recommendation. In addition there was a one-shot appropriation and a supplemental appropriation for Judiciary, and the Assembly would probably have it Monday. Mr. Raxter noted he also did the accounting for the Ethics Commission, and they were out of authority regarding travel. Money could temporarily be moved from operating to travel, but the full amount of the supplemental appropriation would be needed to get the Ethics Commission through June 30 for the additional meetings. There being no further business, Chairman Giunchigliani adjourned the hearing at 10:35 a.m. RESPECTFULLY SUBMITTED: Jonnie Sue Hansen, Committee Secretary Joint Subcommittee on General Government Assembly Committee on Ways and Means and Senate Committee on Finance February 24, 1995 Page