MINUTES OF THE MEETING OF THE JOINT SUBCOMMITTEE ON HUMAN RESOURCES/K-12 ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session April 28, 1995 The joint meeting of the Subcommittee on Human Resources/K-12 of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 7:45 a.m., on Friday, April 28, 1995, Chairman Evans presiding in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY COMMITTEE MEMBERS PRESENT: Mrs. Jan Evans, Chairman Mr. Dennis L. Allard Mrs. Vonne Chowning Mr. Joseph E. Dini, Jr. Mr. Lynn Hettrick Mrs. Sandra Tiffany SENATE COMMITTEE MEMBERS PRESENT: Senator Raymond D. Rawson Senator Dean A. Rhoads SENATE SUBCOMMITTEE MEMBERS ABSENT: Senator William J. Raggio (excused) Senator Bob Coffin (excused) STAFF MEMBERS PRESENT: Mr. Mark Stevens, Fiscal Analyst Mr. Bob Guernsey, Deputy Fiscal Analyst BUDGET CLOSINGS MENTAL HYGIENE-MENTAL RETARDATION - REGIONAL TRAINING - PAGE 1019 SOUTHERN MH/MR FOOD SERVICE - PAGE 1035 RURAL MENTAL RETARDATION SERVICES - PAGE 1083 FAMILY PRESERVATION - PAGE 1091 MR. ALLARD MOVED TO CLOSE THE MH/MR REGIONAL TRAINING CENTER AND FAMILY PRESERVATION BUDGETS IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS AND THE SOUTHERN MH/MR FOOD SERVICE AND RURAL MENTAL RETARDATION SERVICES BUDGETS IN ACCORDANCE WITH STAFF RECOMMENDATIONS. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MRS. TIFFANY WAS NOT PRESENT AT THE TIME OF THE VOTE. BUDGETS CLOSED. * * * * * MENTAL HYGIENE - MENTAL RETARDATION - PAGE 1013 Chairman Evans asked Dr. Carlos Brandenberg, Acting Administrator, to discuss the Title XIX match. She pointed out that the committee is suggesting and recommending that a separate medical payment expenditure category be created for payments to Mental Hygiene/Mental Retardation (MH/MR) in the Welfare Division's Title XIX budget. Dr. Brandenberg asked where the general fund dollars would be put. Chairman Evans responded the general fund dollars would be put in the MH/MR budgets and the allocation of Title XIX dollars would remain in the Title XIX budget as administered by the Welfare Division. Dr. Brandenberg stated this would be acceptable. Chairman Evans asked if there were any remaining concerns and he stated there were none. Mr. Bob Guernsey recommended that the Title XIX match dollars remain within the agencies; however, he added that it may be prudent to have quarterly reports from those agencies to report how the federal draw down and general fund match dollars were being expended to ensure that the general fund match was being used for the stated purpose. MR. HETTRICK MOVED THAT A SEPARATE EXPENDITURE ACCOUNT BE CREATED FOR THE DIVISION OF MENTAL HYGIENE/MENTAL RETARDATION WITHIN THE WELFARE DIVISION'S MEDICAID (TITLE XIX) BUDGET AND THAT THERE BE QUARTERLY REPORTING ON THE EXPENDITURES TO THE INTERIM FINANCE COMMITTEE. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MRS. TIFFANY WAS NOT PRESENT AT THE TIME OF THE VOTE. Chairman Evans noted decision items #2, 3, 4, and 8 (see Exhibit C, page 1) for discussion by the committee and the remaining technical changes should be adjusted by staff. MR. ALLARD MOVED TO APPROVE THE TECHNICAL ADJUSTMENTS IN ITEMS #1, 5, 6, 7 OF THE MENTAL HYGIENE/MENTAL RETARDATION BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. MRS. TIFFANY WAS NOT PRESENT FOR THE VOTE. Mr. Guernsey indicated that items #2, 3, and 4 were similar technical changes and reflected the desire of the division. The division has stated a need to centralize its activities within Dr. Brandenberg's purview to provide oversight. Mr. Guernsey continued discussion with item #8 stating the position reclassifications were technical changes because positions are normally requested in the Governor's budget; however, within this division five positions were inadvertently left out. The division has requested two (2) additional positions at the Nevada Mental Health Institute, one (1) additional position at Lakes Crossing, and two (2) additional positions within Rural Clinics. It is the division's commitment that if the positions are placed in the legislatively approved budget, the additional cost can be offset by increased vacancy savings and positions will still require technical approval and review (for appropriate classification) by the State Personnel Division. All positions are classified and would normally be reviewed by State Personnel. Mr. Allard asked, regarding item #3, if the there were additional responsibilities associated with the Medical Director's position and why an increase in salary was being requested. Dr. Brandenberg responded that increasing the salary would give the division flexibility to expand the duties and responsibilities of the position to oversee statewide medical operations within the division. Mr. Allard expressed his concern that the increase was substantial and queried if the increase was to offer an incentive for candidates to take the position. Dr. Brandenberg stated a salary of $120,000 to perform the duties of a Medical Director is reasonable. Mr. Hettrick asked in light of the committee's concern regarding medical costs and the ability to track quality control, if it would be possible to have the AIMS system monitor and control medical costs. Ms. Jean Laird, Deputy Administrator, responded currently there is no module provided within the AIMS system, but it is their intent to utilize information from the system gaining an overall and comprehensive quality assurance approach throughout the next two years. Dr. Brandenberg followed stating particularly with the medical costs, they are unsure as to what is generating the high cost, whether it is prescription medication, but the division is committed to developing a tracking system to make this determination. His intention is to meet with division medical directors on a quarterly basis and report to Legislative Counsel Bureau staff. Mr. Guernsey pointed out that a separate Assembly and Senate subcommittee reviews unclassified staff salaries and ultimately determines those salary levels. SENATOR RHOADS MOVED TO ACCEPT TECHNICAL ADJUSTMENTS ON ITEMS #2, 3, 4, AND 8 IN ACCORDANCE WITH STAFF RECOMMENDATIONS. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. BUDGETS CLOSED. * * * * * SOUTHERN NEVADA ADULT MENTAL HEALTH SERVICES - PAGE 1023 Chairman Evans noted decision items #2, 3, 10, 12, 13, 14, 15, 16, and 18 (see Exhibit C, page 6) for discussion by the committee and remaining technical changes should be adjusted by staff. MR. HETTRICK MOVED TO ACCEPT TECHNICAL ADJUSTMENTS ON ITEMS #1, 4, 5, 6, 7, 8, 9, 11, AND 17 OF THE SOUTHERN NEVADA ADULT MENTAL HEALTH SERVICES BUDGET ACCOUNT IN ACCORDANCE WITH STAFF RECOMMENDATIONS. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. Mr. Guernsey explained that a number of significant changes have been suggested in the Las Vegas Mental Health Center budget. At the direction of Dr. Brandenberg, staff reviewed current procedures used in admitting potential clients to the facility and the in-patient census. It was determined that as a result of lengthy procedures currently in place the in-patient census has been rising dramatically and steps need to be taken to keep the count low. In reviewing the new enhancement items submitted by the division, Dr. Brandenberg reexamined some of those items that had been recommended to determine if they are needed at this time. The agency has determined the priority is to adequately deal with the in-patient census being generated and an anticipated growth of 79 clients. It was decided that development of Intensive Casemanagement should be delayed at this time in order to concentrate on other items within the budget. Regarding item #3, psychosocial rehabilitation, it was concluded that one location be selected on a trial basis. Item #10 suggests that an average census of 79 clients should be used in determining food and medication costs rather than a 54 client population count. Dr. Brandenberg responded that the in-patient census has been growing (as of last week the count was at 69). He anticipates that they will be averaging 79 clients during the biennium and stated the division will be tracking this very carefully. He stated the reason the division has been cautious with estimates is because they will be very involved with case findings addressing more needs by in-patients. He suggests that rather than requesting an increase of in- patient sites, the division should bring the Eagle Pines facility back into an in-patient unit. Chairman Evans summarized that the numbers could increase and Dr. Brandenberg confirmed this statement. She requested from the division that if the numbers continue to increase and exceed 79 clients, the information should be updated with staff and reviewed by the Interim Finance Committee. Senator Rawson raised a concern that funding has been based on 79 beds and should this increase that the division would be authorized to increase funding and suggested a contingency fund be created by Interim Finance, if necessary. Mr. Guernsey stated there is currently sufficient bed space in the facility, but may require some renovation. He pointed out that staffing levels were only at a point to adequately handle 79 clients and if the division was consistently exceeding this census, they would need to return to Interim Finance to revisit this issue. Senator Rawson asked from where Interim Finance would take the money. Mr. Guernsey responded the money would have to come from the Interim Finance contingency fund. Mr. Allard requested from Dr. Brandenberg whether there are generic drugs that are currently not being used which could potentially result in savings and report his findings to Interim Finance. Dr. Brandenberg stated the division would research that information and report the findings to staff. Mr. Guernsey pointed out that item #12, consider moving medication costs to a separate category for control and tracking purposes and issue a Letter of Intent to track medication costs on a quarterly basis, would address Mr. Allard's concerns. Funding for patient medication for the biennium has been projected based on the 79 client load; however, additional funding over and above for medication costs is not contained within the budget. Additionally, item #14, staff requests the committee to consider adding a higher level accountant position to provide sufficient expertise within the agency to monitor medication costs, in order to get a handle on what is driving the dramatic increased cost of medication. This would be a major part of the responsibilities of the accounting (grade 36) position. Mr. Hettrick asked the committee to favorable recommend the funding of the request of this position. Mr. Guernsey continued with item #13, to determine the merits and cost of proposed JCAHO accreditation under E-326 ($15,000 a year). Currently only one facility within the division, the Nevada Mental Health Institute, is certified. The division has requested the Las Vegas Mental Health Center also be provided funding to achieve accreditation, and also, that funding be placed within the Northern and Southern Nevada Mental Retardation budgets. This would be a policy decision the legislature will need to make. He stated the accreditation preparation and process is time consuming and costly, and it is debatable whether being accredited guarantees the quality of programs. Given the expansion of in-patient census, Mr. Guernsey suggested that the committee may wish to wait on funding to seek accreditation at this time. One drawback of not being accredited is that in order for the Medical School to place residents within one of the facilities, that facility must be accreditated. Currently, psychiatric residents are being placed at the Nevada Mental Health Institute; however, there is no plan to place residents at the Las Vegas Mental Health Center. Senator Rawson commented that he would like to see this decision made by the new administrator and pursue accreditation when it would be most appropriate. Mr. Hettrick concurred with Senator Rawson that funds should be earmarked for accreditation and should be pursued at the discretion of the new administrator. Mrs. Chowning asked if current plans included opening a facility in North Las Vegas and if security was provided in the plan. Dr. Brandenberg answered that it was the division's plan to open an office in North Las Vegas although a specific site was still being explored. He was unsure if security was funded in the project, but would keep this in mind for a final site selection. Mrs. Chowning asked that the decision of the site be determined before the budget is closed because 60% of need is from within North Las Vegas area. Dr. Brandenberg assured Mrs. Chowning that the site would be in North Las Vegas. Mr. Guernsey continued saying item #15, additional revenue charges due to increase in the number of clients to be served, relates to what is happening at the Nevada Mental Health Institute. The division has made a good effort to augment revenue to minimize the impact on general fund. He suggested the committee issue a Letter of Intent to the Nevada Mental Health Institute and Las Vegas Mental Health Center if the level of estimated revenue is not achieved and report to Interim Finance for consideration. Mr. Guernsey stated item #16, staff a full-service office in Henderson, was an important consideration for the committee. The division has been requested to determine what is needed in the Henderson area. The budget includes a new site in North Las Vegas; however, there is nothing added for the southern corridor of the state and there are a great number of clients in need of services. At the request of the subcommittee, staff included in Exhibit C, page 7 projected costs of $236,157 in FY 96 and $414,728 in FY 97 for opening a Henderson site which would begin approximately January 1996. The general fund portion would be $215,000 in FY 96 and $366,000 in FY 97. Mrs. Tiffany asked Dr. Brandenberg if the division had looked at St. Rose Hospital as a potential site. Dr. Brandenberg responded if the committee approved this proposal the division would be looking at potential sites and what resources are currently available to house staff. Mrs. Tiffany suggested Dr. Brandenberg contact Mr. Rod Davis of St. Rose and stated she would contact him. She said St. Rose is a central focus for all medical facilities in Henderson. Mr. Guernsey reviewed with the committee item #18, additional renovation costs, referring to a letter on page 17, Exhibit C. He suggested the committee accomplish this by providing a one-shot appropriation to the division. Chairman Evans summarized what items needed to be included in a Letter of Intent. The letter, she stated, should include notification of client load changes and adjustments for food and medication costs, additional revenue charges due to increase in number of clients, and the need to move medication costs to a separate category. MRS. CHOWNING MOVED TO ACCEPT TECHNICAL ADJUSTMENTS ON ITEMS #2, 3, 10, 12, 13, 14, 15, 16, AND 18 OF THE SOUTHERN NEVADA ADULT MENTAL HEALTH SERVICES BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS WITH A LETTER OF INTENT ADDRESSING ITEMS #10, 12, AND 15 AND APPROVAL OF ITEM #16. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. BUDGETS CLOSED. * * * * * SOUTHERN NEVADA MENTAL RETARDATION SERVICES - PAGE 1063 NORTHERN NEVADA MENTAL RETARDATION SERVICES - PAGE 1073 Mr. Guernsey introduced the topic of out-of-state placements of persons with mental retardation and provided to the committee background information found in Exhibit D. Referring to page 2, Mr. Guernsey explained that the division has attempted to display the comparison of current costs versus the cost to bring the clients back to Nevada. He pointed out that the division hasn't maintained the bills and has had to work closely with Child and Family Services, school districts, and the Welfare Division in order to try to capture these costs; therefore, the figures used in Exhibit D, page 2 may not be completely accurate. However, he stated the costs (to bring the clients back) for FY 97 would be $180,896. Funding to bring clients back to Nevada would affect three different budget areas. He suggested questions to the Division of Child and Family Services should reflect what is currently happening, the merits of this proposal, and if the projected costs were reasonable. Chairman Evans asked what were the additional costs. She stated the committee was concerned about bringing clients back because of proximity to their families and a possible reduction in cost. She expressed concern because the numbers reflected in the exhibit showed the cost to be higher. Ms. Laird brought to the committee's attention the average cost per day Nevada is paying to out-of-state agencies is $130 and the average cost per day of services in Nevada is approximately $175-200. However, she stated that the $130 may not be including a great deal of services and the $175-200/day would include additional services. She explained the figures in the first year are higher because there would be some minor renovation costs in buildings where clients would be placed. Senator Rawson asked where the current out of state placements were from in light of the division's proposal of placing half of the clients in the north and half in the south. Dr. Dave Luke, Sierra Development Center - Division of Mental Health/Mental Retardation, responded that the mix of referrals are equally divided between the north and south and most of those from the north are from rural communities. Mr. Allard requested Dr. Luke to describe services provided in Nevada that are not provided out of state. Dr. Luke replied that many of the services provided out of state are reasonably good, but there have been some problems relating to educational costs and the fact that they may only address one problem area of a client. In Nevada, problems are addressed more fully. The biggest difference in cost is related to salaries because states like Utah have a lower pay scale. Mr. Guernsey stated figures in the budget closings for Mental Health/Mental Retardation reflect the additional expenditures related to bringing the 24 clients back; however, the greatest costs are reflected in the Medicaid budget. Mr. John Sarb, Administrator, Child and Family Services Division, confirmed that Dr. Luke's assessment is accurate. He added having local school districts provide services, now being provided elsewhere, would have financial benefits in the long run. Chairman Evans asked Mr. Guernsey to clarify state staffing versus contract staff. Mr. Guernsey responded in order to accommodate 24 additional clients, the division will turn over four six-bed intermediate care facilities for mentally retarded to contractors for privately provided services, whose rates fluctuate and the contract will be based on a negotiated rate. Therefore, an accurate cost cannot be determined until contracts have been negotiated and these costs will not be reflected in the Mental Health/Mental Retardation budget accounts, but within the Welfare Division Title XIX budget account. Private providers generally use a staffing level of eight to provide sufficient staffing for 24-hour service to six mentally retarded clients. Mr. Dini asked if local school districts can handle these children. Mr. Sarb indicated that special education classes are currently in place and are equipped to handle these children. He clarified that most of the children are out of state, not because educational opportunities were not available in Nevada, but because there has not been a residential facility available in the state. Mrs. Chowning stated the importance of Nevada's children being close to Nevada's families. Further, she would rather see Nevada's dollars go to Nevada's employees. She expressed concern at the lack of tracking of services to clients being served by other states and feels strongly that if the state were providing services, such services could be monitored and tracked. Dr. Brandenberg agreed and said that in the future before any child or adult is sent out of state because of a lack of programming or services, the division should develop appropriate protocol for these types of situations. Ms. Charlotte Crawford, Director, Department of Human Resources, assured the committee that before clients are placed out of state, provider agreements are prepared and facilities must meet quality standards. Additionally, client placements are tracked within the Department. Chairman Evans identified the four agencies involved, they are: Division of Child and Family Services, Mental Health/Mental Retardation, Welfare Division, and Education. These agencies are budgetarily affected by this decision; therefore, more work must be done on this before a final decision is made by the subcommittee. Questions can be answered on the Northern and Southern components separately and the committee can close these budget accounts today. Mr. Hettrick made a follow-up statement regarding the education aspect and expressed a concern regarding the actual cost of educating mentally retarded children. Chairman Evans explained adjustments were made in these budgets and should be approved by the committee. SENATOR RHOADS MOVED TO CLOSE THE SOUTHERN NEVADA MENTAL RETARDATION SERVICES BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. BUDGET CLOSED. MR. HETTRICK MOVED TO CLOSE THE NORTHERN NEVADA MENTAL RETARDATION SERVICES BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. BUDGET CLOSED. * * * * * NEVADA MENTAL HEALTH INSTITUTE Mr. Guernsey stated a number of items within this budget parallel items in the Las Vegas Mental Health Center. In reference to an increase of in-patient census, the budget reflects an anticipated population of 40 clients in FY 96 and 41 clients in FY 97. Current projections by the division are at 52 clients. Items for discussion by the committee are #6, 8, 9, 10, and 12 on page 24, Exhibit C. Mr. Guernsey reported that item #6, adjustment in supported Employment and Industrial Therapy expenses allows a reduction of $25,950 in E-283 per the agency, was a request made by the division after further review of these expenses. This reduction is a result of the Division of Vocational Rehabilitation providing services in a combined effort with the division. Dr. Brandenberg stated there is a better opportunity to provide industrial education through this vehicle. Mr. Guernsey reiterated item #8 with the adjustment in client population figures to 52 clients as opposed to client totals used to prepare the Governor's budget. Item #9, Letter of Intent to report to Interim Finance every six months concerning the Nevada Mental Health Institute Master Plan. There has been some criticism of what is contained in the master plan and what has been left out. The division has expressed a desire to use this as a framework in order to develop a more complete plan for presentation to the 1997 Legislative session. Mr. Guernsey continued with item #10 which is to consider moving medication costs to a separate category for control and tracking purposes. This request is similar to the request with regard to Mental Health/Mental Retardation. He suggested including a Letter of Intent for this purpose. Item #12 is similar to action taken by the committee in the Southern budget where the agency has come forth with increased revenue projections, they would like a Letter of Intent to report back to Interim Finance if they are unable to collect the revenues and the agency will have insufficient savings to off-set the lack of collections. Chairman Evans summarized the four items to be addressed in a Letter of Intent as client population, tracking medication costs, the master plan and revenue collection. Dr. Brandenberg informed the subcommittee that the Institute had an exit interview yesterday regarding the annual Health Care Financing Administration (HCFA) survey. Information he received stated that the Institute failed both conditions of the survey, the conditions of medical records and the condition of stamping. The Institute also failed four of the eight standards. What this means for the division is that within 20-30 days, Dr. Brandenberg will be receiving notification that the Institute is on the verge of decertification. He told the committee it would take about 90 days to correct the deficiencies and HCFA intends to return and conduct a follow-up survey. Chairman Evans asked what the consequences were to the Institute if the deficiencies are not corrected. Dr. Brandenberg stated his understanding is the Institute would lose its ability to collect Medicaid and Medicare revenue, approximately $1.8 million. Chairman Evans asked if Dr. Brandenberg would be able to correct the deficiencies with all other tasks at hand. Dr. Brandenberg has met with his staff and feels they can adequately address these problems. Mr. Dini asked if the budget allowed them to perform the job properly. Dr. Brandenberg responded that they have sufficient funds to perform the job properly. Chairman Evans commended Dr. Brandenberg for handling the task at hand and told him to let the committee know if additional staffing resources were needed. Dr. Brandenberg requested that the committee hold this budget for one week to allow him the opportunity to revisit the budget with staff, check HCFA's recommendations, reprioritize, and report back to the committee in a week. Chairman Evans replied the request was very fair and Mr. Hettrick stated he appreciated Dr. Brandenberg's candor in dealing with this issue. Chairman Evans agreed to hold this budget. * * * * * FACILITY FOR THE MENTAL OFFENDER MR. HETTRICK MOVED TO ACCEPT STAFF RECOMMENDATIONS ON ITEMS 2 AND 3. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. Mr. Guernsey stated Lakes Crossing has been experiencing an increase in the in- patient census. Lakes Crossing is a 36-bed facility and in order to provide necessary staffing for 36 clients versus what the budget was built based on 32 clients, the agency is four positions short in order to provide what is considered to be an adequate, safe staffing level. One new position is recommended in the Governor's budget; however, three are not contained within the budget at this time. Item #1 on page 26, Exhibit C would bring the facility up to the necessary staffing level. Mr. Guernsey continued stating with the increase in the patient census, food costs will need to be adjusted as contained within item #4. Additionally, item #5 is a request by the division for a new vehicle. He suggested the committee may want to include this item in the one-shot appropriation bill (SB 211). Mr. Allard asked what was the purpose of the van. Dr. Brandenberg responded that some clients need to be taken to and from the facility for medical, dental, and court appointments. The van is used to transport clients. MR. DINI MOVED TO CLOSE THE FACILITY FOR THE MENTAL OFFENDER BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS AND MOVED THE VAN REQUEST BE INCLUDED IN S.B. 211. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. BUDGET CLOSED. * * * * * RURAL CLINICS Chairman Evans stated decision points on this budget were items #3, 5, 6, and 7 (see Exhibit C, page 27). SENATOR RHOADS MOVED TO APPROVE TECHNICAL ADJUSTMENTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS. MR. HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Mr. Guernsey stated the division has reviewed this budget and is requesting that opening of new offices be delayed in order to have the staggered opening date for those clinics. The division has determined that Item #3 is not a priority at this time and should be deleted. The main emphasis of the program will be to provide and restore services in communities that were cut as a result of budget shortfalls a few years ago. This budget contains augmentation to services in a number of communities and includes the opening of a new Fernley/Silver Springs office, Battle Mountain office, and Lovelock office. The agency is requesting the opening of the Battle Mountain office be delayed until February `96 and the Lovelock office delayed until December `96. Dr. Brandenberg stated the division's position related to the openings is that they need time to coordinate the securement of sites. Ms. Tiffany asked if services have been traditionally offered in Battle Mountain and Lovelock. Mr. Guernsey stated there were offices in those locations, but a few years ago the division suffered severe budget cuts and offices were closed in those communities. Mr. Dini stated the Lovelock community will experience a big influx due to the opening of the Lovelock prison. The Yerington office has been working at 140% of what it should be doing, trying to cover Dayton and Fernley clients. Fernley is a fast growing community. He feels the opening of the Lovelock facility should be pushed up to October 1, 1995. Mr. Guernsey advised that the committee could leave the funding in the budget and give the division flexibility to see if it is able to open the Lovelock facility sooner. Additional consideration by the committee is the opening of an office in Silver Springs and Fernley as displayed in item #7; these additional costs are not reflected in the budget with a staffing level of one clinician and one clerical position, as well as contract psychiatric services. If the committee decides to open two separate offices, a decision on the opening dates will also need to be discussed. Mr. Allard inquired whether the reopening of facilities in Battle Mountain and Lovelock were contained in the Governor's budget. Mr. Guernsey answered these items are contained within the budget; however, the closing sheets reflect a savings at the division's request. As a result of this discussion, the committee will not take advantage of the savings in opening the Lovelock budget because there is a need to open in October 1, opening as contained within the budget. At this point to be decided is possibility of delaying the opening of the Battle Mountain office until February and the possible opening of a Fernley/Silver Springs office in April 1996; of these remaining decisions, one office could open October 1. Dr. Brandenberg stated by allowing a delay in the openings he would be given some flexibility in scheduling. Mr. Allard questioned the need of an office in Fernley and asked if there is information about the need. Mr. Dini stated that surrounding area school personnel have verified a need and the sheriff's office has verified a need. He confirmed the demand is there. MR. DINI MOVED TO CLOSE THE RURAL CLINICS BUDGET ACCOUNTS IN ACCORDANCE WITH STAFF RECOMMENDATIONS EXCEPT THAT THE LOVELOCK FACILITY BE OPENED OCTOBER 1 AND FUNDING BE LEFT IN THE BUDGET, FERNLEY BE OPENED AS SCHEDULED, AND DELAY THE OPENING OF SILVER SPRINGS TO APRIL `96. SENATOR RHOADS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. BUDGETS CLOSED. Mr. Guernsey called to the committee's attention one remaining issue in this budget relating to services provided to portions of rural Clark County. In the past, some services, on a limited basis, have been provided to rural Clark County by the Las Vegas Mental Health Center. There has been considerable growth in parts of rural Clark County, for example, Mesquite or Logandale. He said the subcommittee may wish the division to take a look at some of those areas and determine if there is a need for services and present a plan to the next session of the legislature, as well as what agency would be best to provide those services. Mr. Allard confirmed there are large population centers in the rural areas. He stated Mesquite is 85 miles from Las Vegas and is much larger than an area such as Fernley. He requested staff to send a Letter of Intent. Dr. Brandenberg stated he would be happy to look at the rural Clark County area service needs. Chairman Evans directed staff to include a request to determine if services are needed in specific areas of rural Clark County within the Letter of Intent already approved by the committee earlier in this meeting. Senator Rawson requested that Caliente be included for this purpose. Chairman Evans directed staff to include Caliente since it is the committee's intent to restore rural clinics; therefore, a comprehensive approach of what services are needed in all rural areas of the state would be appropriate. * * * * * COMMUNITY TRAINING CENTER Mr. Guernsey reviewed with the committee remaining budget questions related to the Community Training Center, see Exhibit C, page 53 - A-E. The Executive Budget includes a 6% rate increase in FY 96 and 3.5% in FY 97. He stated Mr. Guthrie and Dr. Lahren have been active in bringing a number of other issues before the subcommittee. These issues have been reviewed by the division and Mr. Jack Middleton is prepared to address these with the subcommittee. Mr. Jack Middleton, Director of Rural Mental Retardation Services, proceeded with Issue #A, the waiting list and whether or not the budget has provided sufficient new slots. The Governor's budget has included 75 additional day-treatment and job placement slots over the biennium. He stated that Mr. Guthrie has indicated to him a need for 170 slots; however, Mr. Guthrie's agency has failed to consider the fact of clients leaving the Community Training Center program and going on to other programs. From July 1, 1994 through April, 1995, 118 individuals left the program. During that same period, 129 new clients entered the program - a net increase of 11 persons, approximately a 16% turn-over rate in the Community Training Centers. Mr. Middleton maintains there are sufficient slots within the Governor's recommendation. In addressing Issue #B, the equalization of rates, Mr. Middleton presented background information which included that the original Community Training Center program, which began 25 years ago, was a grant program and requests were made annually for funding. In 1977, Nevada started to collect federal dollars which make up a large portion of the Community Training Center budget (currently 50%). The federal government only reimburses for services provided and does not include payment for holidays, sick leave, or any other reason a client is absent. At that time, the division used an annual rate based on the number of days available in the year (52 weeks x 5 = 260 days) less 30 days for sick and annual leave and holiday time, to arrive at 230 days per year. Further, 230 days was divided by the rate to reach a daily rate for Community Training Centers. The daily rate has been updated by the legislature each session for cost of living increases. In 1991, the division established an intensive and maximum rate. The maximum rate has been based on the salary portion of the payment, not on the salary plus overhead costs. The division has determined that using the Governor's recommendation of $18.62/hour is correct, but is different than the pre-work rate by $0.43. The division has requested $132,000 in the first biennium and $136,000 in the second. Mr. Middleton states the major change is the increase of 20% in the intensive rate. The Community Training Centers have suggested the division adjust the pre-work rate and increase by the cost of living which, in Mr. Middleton's opinion, would have a compounding effect. Mr. Middleton continued with an explanation Issue #C, adjust state rates to recognize a realistic rate of absenteeism. The rate was established based on 230 days when the division converted from an annual to a daily rate. The Community Training Centers have stated there is fluctuation among clients regarding the amount of days worked and therefore, has suggested using 235 days. The division agreed with this idea and has been using 235 days. The division maintains the best way to look at attendance is to take clients who were in the program for a full year (409 clients) and calculate the average attendance of those clients. The result is 230 days, see Exhibit C, page 54. There is a concern regarding what to do with clients who attend more than 230 days, 183 clients. Most of these clients are going from Community Training Centers into jobs, but this affects the overall attendance rate. Mr. Middleton acknowledged the expenditures and salary expenses in the Community Training Centers to be factual. Salary expenses continue whether the clients are in attendance or not. He stated the Community Training Centers provide a very valuable service to a large number of adult mentally retarded. Mr. Middleton stated he did not think changing the rate is the appropriate way to solve this problem because the Community Training Centers could end up spending their budget by the end of May. He summarized by saying if it is necessary to increase the rate in order to keep them in business then this would be the right thing to do. Mr. Ed Guthrie, Opportunity Village, asserted that when discussing the waiting list issues, the subcommittee is using figures provided by the division and not from the Community Training Center's figures. The division has stated there will be a waiting list of 115 people in jobs and day-training by the end of 1997. The division has confirmed their estimates on the waiting list and Mr. Guthrie stated he did not think they were arguing numbers with the division. Dr. Brian Lahren, Executive Director of Washoe Association of Retarded Citizens (WARC), commented that Mr. Middleton's description of the equalization rate issue was excellent, focusing on the problem of the intensive rate. The rate simply does not fund a staff position. His agency is asking that whatever rate the division decides on must be standardized. The agency's objective is to be able to staff for client needs and give each client services they deserve. There is no further debate on this issue as far as the agency is concerned and recommends the division's suggestions be part of the package approved within the budget. Dr. Lahren stated the absenteeism issue is a different kind of problem and is complex in nature. He confirmed that Mr. Middleton's testimony with regard to calculations are correct, but it is an empirical issue. The problem they face are clients who receive services, gain employment, and return within 15-20 days. The agency needs the capability to have staff to support those clients when they return. The agency wants to be able to draw in the full amount of money with average attendance, authorized by the division, so they can build a budget based on real dollar figures. Mr. Guthrie added that his agency has tracked attendance month by month and their statistics show the average attendance is 221 days and they want the ability to bill for all funds allocated to their agency. The second issue is clients with more severe disabilities have more problems with attendance and require a higher level of care. Senator Rawson stated if the subcommittee made an adjustment to the state rate, it would address some of these issues. The problem is compounded when trying to solve both issues; therefore, he is inclined to accept the suggestion of adjusting the rate. He asked Mr. Middleton to address Item D, restore the $83,000 to the base budget. Mr. Middleton responded that the base is what the division has spent for services in FY `94 irrespective of attendance, type of service, rates, or absenteeism. Once a base has been established these other factors are no longer relevant. The $83,000 was deducted from the base because it was not spent by services. The division had originally requested the $83,000 as part of the adjustment to the base for FY `95 growth. Senator Rawson suggested if the subcommittee adjusted this budget by putting the $83,000 back into the budget, it would help in dealing with the 170 new slots and would affect the waiting list. Dr. Lahren interjected the $83,000 would address 20 slots. Senator Rawson further stated the agency should report back to the committee results of how this affected the waiting list. Dr. Lahren asked if it was the subcommittee's intention to adjust the rate without changing the number of days of attendance. Senator Rawson responded affirmatively and Dr. Lahren said this would be fine with his agency. Dr. Lahren further stated he would like to see the division work with his agency to establish a standard methodology. SENATOR RAWSON MOVED TO RESTORE THE $83,000 AND ADJUST THE STATE RATE IN ACCORDANCE WITH STAFF RECOMMENDATIONS. MR. HETTRICK SECONDED THE MOTION. Ms. Tiffany inquired about what staff does when clients leave the facility and why the agency can't send staff home if clients have left the facility. Dr. Lahren answered it would be impossible to hire staff without firm schedules and the capacity for an employee to earn a stable income. Senator Rawson asked Mr. Guthrie if adjusting the rate would help Opportunity Village. Mr. Guthrie responded adjusting the rate will help his agency. Senator Rhoads asked what the cost would be if the state rate were adjusted. Mr. Guernsey answered referring to Item #2 in Exhibit C, page 53. Dr. Lahren asked Mr. Guernsey if by adjusting the state rate, would the issue of absenteeism, which is their primary issue, be addressed. Chairman Evans stated that the subcommittee would like to see the division and agency work together to address the issue of absenteeism. Dr. Lahren questioned if this discussion would take place before or after budgets have been closed. Chairman Evans answered after budgets have been closed because she did not think this issue could be resolved within this timeframe. Dr. Lahren expressed his concern that a serious problem in FY 95 would result if this is not addressed in the budgets for the next biennium. SENATOR RAWSON WITHDREW HIS MOTION. Chairman Evans adjourned the meeting at 11:10 a.m. RESPECTFULLY SUBMITTED: Marcelene Wehry, Committee Secretary Joint Subcommittee on Human Resources/K-12 Assembly Committee on Ways and Means and Senate Finance April 28, 1995 Page