MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session May 19, 1995 The joint meeting on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William R. O'Donnell, at 7:50 a.m., on Friday, May 19, 1995, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator William R. O'Donnell, Chairman Senator Lawrence E. Jacobsen Senator Bernice Mathews ASSEMBLY COMMITTEE MEMBERS PRESENT: Ms. Sandra Tiffany, Chairman Ms. Chris Giunchigliani, Chairman Mrs. Jan Evans Mr. Dennis L. Allard Mrs. Maureen E. Brower ASSEMBLY MEMBERS ABSENT: Mr. Bob Price (Excused) STAFF MEMBERS PRESENT: Bob Guernsey, Principal Deputy Fiscal Analyst Larry Peri, Program Analyst Debbra J. King, Program Analyst Pamela Jochim, Committee Secretary OTHERS PRESENT: John P. Comeaux, Director, Department of Administration Donald L. Bailey, Sr., Chief, State Printing and Micrographics Division, Department of Administration Pat Eischeid, Chief, Office of Internal Audits, Department of Administration Michelle Gamble, Program Assistant, Nevada Association of Counties David R. Thomas, Chief, Risk Management Division, Department of Administration State Printing Office - Page 501 Printing Office Equipment Purchase - Page 507 Senator O'Donnell opened the meeting and asked Larry Peri, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, to provide the committee with an overview of the proposed revisions to the State Printing Office budget. Mr. Peri distributed a Budget Closing Action packet (Exhibit C) for the committee's review. Mr. Peri noted budget adjustments are recommended in the following areas: an increase in the Statewide Cost Allocation category due to revisions made by the Budget Division; the addition of Attorney General Cost Allocation amounts; and an increase in the Reserve category to provide for anticipated cost of living increases. He indicated the revisions were made to the budget in accordance with recommendations made by John P. Comeaux, Director, Department of Administration, in a memo (Exhibit C - pages 2-5) to the Fiscal Analysis Division, dated April 12, 1995. Mr. Peri referred the committee to page 7 of Exhibit C and pointed out raw material costs have been adjusted $154,638 in each year of the biennium due to an anticipated 20 percent increase in paper stock costs. Mr. Peri stated the joint subcommittee, in a previous meeting, was concerned state agencies using the printing division might experience budget problems due to the proposed rate increases for the next biennium. He said the state printer is bound by statute to adjust rates to a level which covers the costs of material and overhead. In addition, a recent legislative audit also recommends a rate increase in printing charges. Mrs. Brower disclosed she owns a printing business and due to a possible conflict of interest, she will refrain from voting on the budget. Mr. Peri referred the committee to pages 8-10 of Exhibit C and indicated these pages identify the primary agencies which would be affected by the proposed rate increase. The rate increase could total $263,541 for Fiscal Year (FY) 1996 and $343,804 in FY 1997. He suggested that the joint subcommittee allow the Fiscal Analysis Division the latitude to review and discuss each agency rate increase with the agency and the Budget Division. The Fiscal Analysis Division will make account adjustments where it feels the need is justified. He related some agencies have expressed concern that the recommended revenues for printing will not be adequate for the next biennium. The Fiscal Analysis Division recommends the affected budgets be reviewed individually, but does not advise the budget be closed with the additional $600,000 increase. Ms. Giunchigliani asked what procedures the printing office follows when hiring classified and unclassified workers. Donald L. Bailey, Sr., Chief, State Printing and Micrographics Division, Department of Administration, explained an opening for a classified position is posted and any individuals responding to the posting are interviewed. Mr. Bailey said trades' positions are unclassified and once an individual fills out an application, he performs the interview and does the hiring. The trades' positions are not posted by the printing office. Ms. Giunchigliani questioned how a person determines if there is a trade position opening. Mr. Bailey explained if the agency is seeking someone outside the division, then the position is advertised in the newspaper, however, promotions made within the agency are not posted. Individuals promoted from within are interviewed and promoted accordingly. Ms. Giunchigliani inquired if classified personnel can be "declassified." Mr. Bailey responded the personnel division can perform a job study to determine if the position can be declassified. He indicated the printing division has never requested a job study to declassify an employee. Ms. Giunchigliani asked if the division has ever declassified an employee and moved that employee into a trades' position. Mr. Bailey replied the trades' employees are already unclassified employees. Ms. Giunchigliani asked if hiring procedures for unclassified positions are addressed in the Nevada Revised Statutes. Mr. Bailey answered, "It is in the statute that the printer will hire as needed, trades people and will eliminate those positions if he/she feels there is not enough work to justify the number of positions." Ms. Giunchigliani inquired whether Mr. Bailey had any objections to posting the unclassified positions. Mr. Bailey said he had no objections to the request and indicated he had recently met with union officials and an agreement was reached to post the unclassified position openings. Mr. Peri referred the committee to page 11 of Exhibit C and noted the Printing Office Equipment Purchase account is funded by depreciation expenses generated in the main printing office account and transferred to the equipment purchase account for periodic replacement of printing equipment. The fiscal staff suggests the budget be approved as recommended by the Governor. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE STATE PRINTING OFFICE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS OUTLINED ABOVE AND LISTED IN EXHIBIT C AND TO RECOMMEND CLOSING THE PRINTING OFFICE EQUIPMENT PURCHASE BUDGET AS RECOMMENDED BY THE GOVERNOR. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE STATE PRINTING OFFICE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS OUTLINED ABOVE AND LISTED IN EXHIBIT C AND TO RECOMMEND CLOSING THE PRINTING OFFICE EQUIPMENT PURCHASE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Budget and Planning - Page 462 Debbra J. King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, came forward and distributed a Budget Closing Action Packet (Exhibit D) to the committee and indicated budget adjustments have been made to delay all new hirings until October 1, 1995. Additional funding has been recommended for travel, training, technical material, subscriptions and software. Module E127 recommends funding for a Grants Project Analyst to locate and identify grant opportunities and identify non-state funding for family resource centers. Ms. King said the position will provide information on the availability of grants to state agencies who would then write the grant applications. She noted Charlotte Crawford, Director, Department of Human Resources, has written a letter to the Fiscal Analysis Division indicating her support of the position. John P.Comeaux, Director, Department of Administration, interjected the grants position can be important to state government. The administration would like to have one centralized position which will concentrate on identifying grant opportunities. Senator Jacobsen stated he is concerned the state will be competing with various counties for the same grants. Mr. Comeaux responded he suspects there will be some competition between the state, counties and local governments for grants, but in most situations, this will not happen. Senator Jacobsen said he would like to see all the entities work together to ensure the grants are well written. Mr. Comeaux replied, "That would be our intention." Ms. Giunchigliani questioned whether the grant position will be available to assist various state agencies in their grant writing applications. Mr. Comeaux answered the main focus of the position will be to locate grants and then the information will be provided to the agency. Ms. Giunchigliani interjected there is a skill to successful grant writing and suggested the grants position be required to have grant writing skills. She inquired if there are grants available for the Lifeskills Project. Mr. Comeaux responded, "Yes." Ms. Giunchigliani noted a recent national press release indicated the Drug Abuse Resistance Education (D.A.R.E.) Program is one of the least effective drug programs and suggested the D.A.R.E. funding should be utilized for the Lifeskills Project. Ms. Tiffany stated she does not feel the proposal regarding the grant position is "well thought out as far as practices and procedures." She remarked: I am not sure what the relationship will be between someone who works in the budget office and someone who is a liaison to the Welfare Division or to the Division of Parole and Probation. What exactly was their job description? What was the depth of their participation? What was the relationship intended to be....?There did not seem to be any follow-up between your office [Budget Division] and the agencies they were suppose to help....The position requires a lot of expertise....It will be difficult to find one person who has this knowledge.... She noted actions taken by Congress in the coming months may not require as much grant writing. Mr. Comeaux stated grant personnel from various agencies met last summer to discuss why Nevada is ranked 49th in grant applications. The agencies' grant personnel indicated during the meeting, they did not have the time nor the personnel to research and locate grants. The administration determined a grant position was necessary to help the various agencies in locating grants. He remarked there is no written plan or procedures in place on how the proposed position will carry out the responsibility and duties of the job. He foresees the position will seek out grants by researching specific publications and contacting other states regarding their grant programs. The state needs to begin somewhere to try and improve their 49th ranking in grant applications, remarked Mr. Comeaux. Ms. Tiffany asked how many agencies will the position provide assistance to each year. Mr. Comeaux related he has not considered performance indicators and noted the main focus of the grant research will be in the areas of human resources and education. Mrs. Evans indicated she agrees there needs to be some realistic goals established, however, it will take time to get "up and running" because the grant person will first need to meet with the various agencies to determine their needs before any grant research can be started. She supports the position because the state needs a designated person to research federal and private grant publications. In regard to Senator Jacobsen's concerns about competition between the state and local government for grants, Mrs. Evans stated the funding from a number of state grants is distributed to counties and local governments. Ms. Giunchigliani noted she supports the grant position far more than the requested Business Process Reengineering (BPR) positions. She said the grant position must originally focus on several areas because if too many areas are addressed at once, then not much will be accomplished. Ms. Tiffany suggested the position not be funded this legislative session and a Budget Analyst be assigned during the interim to develop policies and guidelines by which the position will follow. Mr. Comeaux commented the Budget Analysts use the interim to familiarize themselves with the agencies they handle. Mr. Allard asked, "Do you have anyone in mind for the position, now?" Mr. Comeaux replied, "No." Continuing, Mr. Allard questioned if the Budget Division has the manpower to develop a strategic plan for the position and noted if the division does not have the manpower to implement the program, then the state will lose a number of grants over the next biennium. Mr. Comeaux responded, if the position is not funded, the state will continue to rank 49th in grant applications. Mr. Allard indicated performance measurements should be relatively easy to develop. Mr. Comeaux responded, "I would think so." Senator Jacobsen asked how agencies receive notification regarding grant availability. Mr. Comeaux replied there is no "clearinghouse" for grants, so the agencies must research and discover grant availability in a variety of ways. Senator Jacobsen questioned if the Budget Division works closely with the Nevada State Office in Washington, D.C. regarding congressional actions. Mr. Comeaux answered the division has weekly contact with the office. Senator Mathews pointed out grant research and writing is a very specialized function and she related it is crucial an individual be hired who has expertise in this area, rather than having a Budget Analyst take over the grant research duties. Senator O'Donnell stated he agreed with some the statements made by Ms. Tiffany and Senator Mathews and suggested if the funds are allocated for the position, a quarterly report be made to the Interim Finance Committee (IFC) regarding the amount of grant funds obtained by the new position. If the position is not generating enough grants by the next biennium, then the position should be eliminated, commented Senator O'Donnell. Ms. Giunchigliani noted she supports Senator O'Donnell's suggestion and asked for the performance indicators to not only include the amount of funds being generated, but also the number of grants being applied for and accepted. Senator O'Donnell stated the committee would like to sunset the position in 2 years if the position is not generating enough grants and require that a Letter of Intent be developed outlining the committee's position on the measure. Ms. King indicated budget module E128 recommends forming a lead unit of two Data Processing Analysts to work with consultants and develop experience to become an in-house BPR team. Module E129 recommends an administrative support position and related rental costs for positions requested in E128 and E129. In addition, Ms. King noted budget category E425 recommends staffing and operating costs for the proposed Commission to Establish Suggested Sentences for Felons. She indicated the committee should be aware Assembly Bill (A.B.) 317 changes the commission from the Executive Branch to the Legislative Branch and Senate Bill (S.B.) 416 does not include a commission on sentencing felons. ASSEMBLY BILL 317: Makes various changes related to juvenile courts, sentencing, crimes and punishments. SENATE BILL 416: Makes various changes regarding sentencing of persons convicted of felonies. Ms. King remarked the agency will be applying for a $50,000 Bureau of Justice Statistics grant for a Statistical Analysis Center to assist in funding the commission and the activities of the staff. Senator O'Donnell commented the committee does not support funding for the requested BPR positions and the related costs associated with the positions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nternal Audit - Page 473 Ms. King pointed out the Office of Internal Audit is scheduled to sunset on June 30, 1995. She indicated Assembly Bill (A.B.) 24 has been introduced and amended to extend the sunset date to June 30, 1997. The committee must decide if the Office of Internal Audit will be continued and if so, does the committee wish to fund the additional position requested, remarked Ms. King. ASSEMBLY BILL 24: Extends existing provisions regarding office of internal audits. Senator O'Donnell stated he is willing to fund the office for another biennium if the office can increase its office productivity. Mr. Allard interjected he has been holding discussions with the Budget Division and the Legislative Counsel Bureau's Auditor, Gary Crews, regarding changing the name and focus of the Office of Internal Audit to Management Controls and Training. He requested the budget be held until more information can be developed on the proposed change. Ms. Giunchigliani suggested closing the Pre-audit section of the budget because the discussions being held on the Office of Internal Audit will not affect the funding for Pre-audit. Furthermore, she indicated her support of an additional Administrative Aide position in Pre-audit to assist with the large number of documents this section is required to process. Senator Jacobsen, referring to the Division of Forestry's audit, agreed the Governor needs to be able to perform audits on agencies when a complaint is made, but he disapproves of the concept the audits are confidential and are not released to the public. Pat Eischeid, Chief, Office of Internal Audits, Department of Administration, stated the work performed by internal audit on the forestry division was not an audit, but an investigation. She said the Governor asked her to investigate 10 allegations which had been made against the division. The investigative findings were submitted to Mr. Comeaux and the Governor and the Governor's chief of staff determined the investigative findings would not be released. Ms. Tiffany commented the internal audit office was discussed thoroughly by the Assembly Committee on Ways and Means and it was noted by the committee the majority of audit recommendations made by the Legislative Audit Division dealt with internal control problems. She said the Assembly Committee on Ways and Means concluded it would be more productive if the internal audit office changed its emphasis to training agency personnel and helping with development of internal audit controls. Ms. Tiffany asked whether it will be necessary to hire three new positions if the mission of internal audit is changed. In addition, she questioned if Ms. Eischeid's position will be altered from a manager to a working manager. Mr. Comeaux responded the three positions will still be needed due to the large number of agencies and subagencies which will need internal accounting controls developed. He indicated Ms. Eicheid is already a working manager and will continue to be a working manager if the mission of the office is modified. Ms. Eischeid interjected the Audit Division of the Legislative Counsel Bureau (LCB) provides a completely different function than the Office of Internal Audit. She pointed out the LCB Audit Division performs audits and makes recommendations, but cannot help an agency implement the recommended changes, due to national auditing standards. Many agency administrators do not have the expertise or personnel who are capable of implementing the necessary audit controls recommended by the LCB audit. It is the responsibility of the Office of Internal Audit to assist these agencies in developing and implementing the internal audit controls. She related the office has received over 12 requests for assistance in developing controls and budget monitoring. Mr. Allard reiterated he has proposed the Office of Internal Audit be changed to Management Controls and Training. He indicated the first priority for the office will be to develop a training program and a test to indicate the successfulness of the training program. He noted, in his discussions with the Budget Division and the Fiscal Analysis Division, it was determined the office could train over 100 state agencies by the next biennium. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING ALL MODULES IN THE BUDGET EXCEPT E125 UNTIL THE OUTCOME OF ASSEMBLY BILL 24 IS KNOWN AND WITH THE UNDERSTANDING THE STAFF IS ALLOWED TO MAKE ADJUSTMENTS TO RENTAL COSTS IF ADDITIONAL PERSONNEL ARE ADDED AND RECOMMENDS THE ADDITION OF AN ADMINISTRATIVE AIDE TO THE PRE-AUDIT UNIT. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING ALL MODULES IN THE BUDGET EXCEPT E125 UNTIL THE OUTCOME OF ASSEMBLY BILL 24 IS KNOWN AND WITH THE UNDERSTANDING THE STAFF IS ALLOWED TO MAKE ADJUSTMENTS TO RENTAL COSTS IF ADDITIONAL PERSONNEL ARE ADDED AND RECOMMENDS THE ADDITION OF AN ADMINISTRATIVE AIDE TO THE PRE-AUDIT UNIT. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Merit Award Board - Page 479 Ms. King stated the Executive Budget recommends a General Fund appropriation to fund the account. The budget was previously funded with a General Fund appropriation, but due to budget shortfalls in Fiscal Year (FY) 1992 and FY 1993, the account was funded by donations. She noted the account funds awards to state employees for providing meritorious suggestions for improving state service. SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * MS. TIFFANY MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. MRS. BROWER SECONDED TH MOTION. THE MOTION CARRIED. (MR. PRICE AND MR. ALLARD WERE ABSENT FOR THE VOTE.) * * * * * State Employees Workers' Compensation - Page 488 Ms. King pointed out pages 2-5 of Exhibit D provide a number of technical adjustments to the budget which were requested by the Department of Administration. She indicated the adjustments recalculate the projected revenues to match the rate being recommended in the Executive Budget. The adjustments also budget the anticipated $3 million refund from the State Industrial Insurance System in FY 1996 and $1.5 million in FY 1997. Due to an operational audit, the Executive Budget recommends transferring the costs associated with the new position recommended in the Benefit Services Fund budget and the existing Workers' Compensation Management Analyst to this account. In addition, Ms. King said the Department of Administration has requested a cost allocation of salaries for the risk benefits manager and three accounting clerks to the programs supervised by the risk manager. The salary allocations are determined by the amount of time the staff spends on each program. The time estimates are not supported by any statistical information and all the associated costs are not fully allocated. Ms. King indicated the committee may wish to delay transferring the costs from benefit services until a method is developed to determine all the associated costs. Ms. Giunchigliani commented she made a note to herself indicating state agencies are charged $6.1 million for workers' compensation and $3.1 million is returned to the state and asked for an explanation regarding her notation. Ms. King explained the agencies are originally charged a specific amount, but then the account receives a refund based on the agencies' retrospective rating adjustment. The refund is being utilized to decrease rates currently charged to agencies. Ms. Giunchigliani stated agencies should be assessed based on safety records and asked whether a study can be performed during the interim to determine the budgetary impact if the rates are "more correctly aligned." MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGES 2-3 OF EXHIBIT D AND WITH A LETTER OF INTENT REQUESTING THE AGENCY TO REEVALUATE ITS RATING PROGRAM TO MORE PROPERLY ASSESS AGENCIES BASED ON SAFETY RECORDS AND ACTUAL COSTS. THE FINDINGS WILL BE REPORTED TO THE 1997 LEGISLATURE; AND TO INCLUDE THE COST ALLOCATION OF ADMINISTRATIVE SALARIES. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGES 2-3 OF EXHIBIT D AND WITH A LETTER OF INTENT REQUESTING THE AGENCY TO REEVALUATE ITS RATING PROGRAM TO MORE PROPERLY ASSESS AGENCIES BASED ON SAFETY RECORDS AND ACTUAL COSTS. THE FINDINGS WILL BE REPORTED TO THE 1997 LEGISLATURE; AND TO INCLUDE THE COST ALLOCATION OF ADMINISTRATIVE SALARIES. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Supplemental Fund - Indigents - Page 491 Ms. King explained adjustments have been made to the budget to match the assessed valuation released by the Department of Taxation on April 1, 1995. She said the account funds medical payments for indigents, except those medical payments related to vehicle accidents. Ms. Giunchigliani noted a bill was introduced earlier in the week which would increase the levy amount. Michelle Gamble, Program Assistant, Nevada Association of Counties, explained the bill proposes to increase the optional levy for county indigent care and will not affect this budget. Senator O'Donnell questioned whether Ms. Tiffany was still requesting quarterly board meetings and asked if it is the committee's desire to issue a Letter of Intent addressing this subject. Ms. Tiffany interjected that in a previous meeting she had recommended the board meet quarterly instead of semi-annually. However, since that meeting, she has met several times with county officials and determined the quarterly meetings are not necessary. MS. TIFFANY MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 6 OF EXHIBIT D, WITHOUT THE LETTER OF INTENT, AND WITH THE UNDERSTANDING PAYMENTS WILL CONTINUE TO BE PAID SEMIANNUALLY. MR. ALLARD SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR MATHEWS MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 6 OF EXHIBIT D, WITHOUT THE LETTER OF INTENT, AND WITH THE UNDERSTANDING PAYMENTS WILL CONTINUE TO BE PAID SEMIANNUALLY. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Indigent Accident Account - Page 493 Ms. King explained the budget funds medical payments for indigents who have been in vehicle accidents. In addition, adjustments have been made to match the assessed valuation released by the Department of Taxation on April 1, 1995. MS. TIFFANY MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 7 OF EXHIBIT D AND WITHOUT THE LETTER OF INTENT REQUIRING QUARTERLY BOARD MEETINGS. MRS. BROWER SECONDED THE MOTION. Senator Jacobsen inquired if rural hospitals can also apply to the fund for repayment. Ms. King replied, once a hospital proves an individual is indigent, then any hospital, whether it is rural or urban, can apply to this account for reimbursement. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR MATHEWS MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 7 OF EXHIBIT D AND WITHOUT THE LETTER OF INTENT REQUIRING QUARTERLY BOARD MEETINGS. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Insurance and Loss Prevention - Page 495 Ms. King indicated the budget provides insurance coverage for state-owned property and buildings. She related adjustments have been made to reflect the cost of the agency moving from a state-owned building to a non-state owned building. Budget categories M100 and E710 reflect adjustments made to the agency's portion of maintenance and enhancement requests of the Administrative Services Division. She indicated E125 requests funding for a Program Assistant III and explained the 1993 Legislature moved tort claim actions to the Office of the Attorney General. Due to the move, the Risk Management Division has no clerical position in this budget. Additional training funds have been requested in E175 to send the Insurance and Loss Prevention Specialist to a Construction Insurance Conference. Ms. King pointed out one of the duties of the Insurance and Loss Prevention Specialist is to review construction contracts for the State Public Works Board, however, the State Public Works Board has informed her the loss prevention specialist has reviewed very few of the board's contracts. Furthermore, Ms. King commented E805 recommends funding the upgrade of an existing Insurance and Loss Prevention Specialist (Grade 37) to a Deputy Risk Manager (Grade 40). She explained the Personnel Division will determine if the upgrade request is appropriate, but the committee will need to approve the funding to support the upgrade if it is granted. Ms. Tiffany questioned if the loss prevention specialist has attended the construction conference in the past. Ms. King responded this will be the first time the incumbent will attend the conference and indicated the agency requested conference attendance because the loss prevention specialist reviews construction contracts and construction losses impact the state. Ms. Tiffany inquired whether the present loss prevention specialist has expertise in construction insurance. Ms. King responded negatively, and related the fiscal staff questions if the conference costs should be moved to the State Public Works Board, which supervises construction projects. She pointed out funding has been included in the budget for attendance to a national conference for the Public Risk Management Association. Ms. Tiffany asked if the construction conference costs are necessary or if the costs have been placed in the wrong budget. Ms. King maintained the conference costs should be included in the budget of the State Public Works Board. She commented she could not see a direct relationship between the construction insurance conference and the loss prevention specialist. Ms. Giunchigliani asked for clarification regarding the agency's move from a state- owned building to a non-state owned building. Ms. King answered the move is based upon the Budget and Planning Division receiving four new positions which would require the division to move into the office space of the Office of Internal Audit. The internal audit office will move into the offices of the Risk Management Division, who will then move to a non-state owned building. Ms. King explained, since the committee did not approve three of the four positions requested by the Department of Adminstration and depending upon the outcome of the proposed changes to the Office of Internal Audit, the requested move can be reviewed at a later date to determine if the move is still necessary. Mr. Comeaux pointed out there are six new positions being requested by the Risk Management Division and if the majority of the positions are approved, there will be no space for these employees. He said additional space is needed on the second floor of the Blasdel Building to consolidate the Administrative Services Division. Ms. Giunchigliani questioned why the position upgrade is being requested. David R. Thomas, Chief, Risk Management Division, Department of Administration, stated the upgrade is requested for the Insurance and Loss Prevention Specialist because the position handles all the state's property and casualty insurance programs. Ms. Giunchigliani inquired when the Personnel Division will be making a determination on the upgrade. Mr. Thomas replied, "I have no idea." Ms. Giunchigliani asked Mr. Thomas to comment on the construction conference request. Mr. Thomas explained, one of the responsibilities of the division is to review a variety of contracts for appropriate insurance limits. The division does not review all pertinent contracts because the agencies do not always send the contracts to the division for review. He said it is critical for the state to review construction contracts for appropriate insurance limits. The division has never had any personnel specifically trained in the construction insurance area. He related the construction conference is recommended to help the loss prevention specialist become more informed about current activities, techniques, and trends occurring in the construction insurance area. Mrs. Evans remarked if the employee does not attend the construction conference, then how is the employee going to receive the necessary training. She noted this area is very specialized and asked if there were other training options. Mr. Thomas responded the only other option is to allow the State Public Works Board to handle construction insurance contracts, however, he noted the board does not have any insurance risk management technicians in their department to review the contracts. Mrs. Evans maintained the option to utilize the State Public Works Board for this task is not viable and stressed the board is already overburdened with work. Mr. Thomas agreed with Mrs. Evans and stated it is more appropriate to leave the duties with the Risk Management Division. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGES 8 AND 9 OF EXHIBIT D AND WITH THE UNDERSTANDING THE INSURANCE AND LOSS PREVENTION SPECIALIST WILL REPORT BACK TO THE 1997 LEGISLATURE ON THE NUMBER OF C0NSTRUCTION CONTRACTS REVIEWED AND THE IMPACT OF THE REVIEWS; WITH THE ALLOCATION OF ADMINISTRATIVE SALARIES ONLY; AND IF THE POSITION UPGRADE IS APPROVED, THE RISK MANAGEMENT DIVISION MUST APPROACH THE IFC FOR APPROVAL TO RELEASE THE FUNDS FROM THE RESERVE ACCOUNT. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGES 8 AND 9 OF EXHIBIT D AND WITH THE UNDERSTANDING THE INSURANCE AND LOSS PREVENTION SPECIALIST WILL REPORT BACK TO THE 1997 LEGISLATURE ON THE NUMBER OF CONSTRUCTION CONTRACTS REVIEWED AND THE IMPACT OF THE REVIEWS; WITH THE ALLOCATION OF ADMINISTRATIVE SALARIES ONLY; AND IF THE POSITION UPGRADE IS APPROVED, THE RISK MANAGEMENT DIVISION MUST APPROACH THE IFC FOR APPROVAL TO RELEASE THE FUNDS FROM THE RESERVE ACCOUNT. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Hearings and Appeals - Page 581 Ms. King explained technical adjustments have been made to reduce training from $1,000 per appeals officer to $100. Mrs. Evans questioned the amount of training the appeals officers presently receive. Ms. King responded the Executive Budget had recommended training costs of $1,000 per appeals officer and $500 per clerical. Mr. Comeaux stated Bryan A. Nix, Senior Appeals Officer, Department of Administration, requested a significant increase in the training budget and had submitted a training schedule plan to the Department of Administration. He said the fiscal staff have suggested the funding for training be decreased to a level similar to what has been recommended in the attorney general's office, the Nevada Attorney for Injured Workers, and the Office of the State Public Defender. MS. TIFFANY MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 10 OF EXHIBIT D. MRS. BROWER SECONDED THE MOTION. THE MOTION CARRIED. (MRS. EVANS VOTED NO. MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 10 OF EXHIBIT D. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Workers' Compensation Hearings Reserve - Page 587 Ms. King remarked the budget account holds funds in reserve for salaries and operating costs for the Hearings and Appeals Division and the Nevada Attorney for Injured Workers. The Executive Budget recommends a reserve level which will fund an additional attorney and clerical position in each of the divisions. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE WAS ABSENT FOR THE VOTE.) * * * * * SENATOR MATHEWS MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Victims of Crime - Page 589 Ms. King explained the budget is used to pay medical expenses and various other expenses related to victims of crime. She stated the majority of technical adjustments have been made to the revenue portion of the budget due to a change in how the revenues are projected. In addition, the court assessments are recommended to be reduced in FY 1996 and FY 1997 in order to reduce the Reserve account down to approximately 3 months of annual expenditures for victims' claims. The Reserve account has increased in the last several years due to agency cost saving measures and an increase in revenues. She said the account has paid 100 percent of the claims presented in the past year and noted the agency's proposed budget is outlined on pages 14 and 15 of Exhibit D. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE AND MR. ALLARD WERE ABSENT FOR THE VOTE.) * * * * * SENATOR JACOBSEN MOVED TO RECOMMEND CLOSING THE BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR MATHEWS SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Ms. Giunchigliani commended Mr. Nix on the implementation of the cost containment program and noted because of the program more funds were provided to victims of crime. Senator O'Donnell stated a letter from the Assembly and the Senate will be written to Mr. Nix complimenting him and his staff on their efforts. Additionally, the senator indicated the Senate will be introducing a bill which would allow more funds to be collected for the victims of crime by the Department of Motor Vehicles and Public Safety from court assessments. Deferred Compensation - Page 665 Ms. King stated the Executive Budget requested a half-time committee secretary position which will cost in excess of $14,000 per year. She indicated it will cost $3,840 a year if a contract secretary is hired for board support. If the half-time position is authorized, the annual assessment against participants will increase from $2.00 per year to $3.50 per year. Ms. King commented Assembly Bill (A.B.) 459 is currently pending and if passed will decrease the number of Governor-appointed committee members from eight to five and require all committee members to participate in the plan for 2 years. ASSEMBLY BILL 459: Makes various changes regarding committee establi shed to admini ster progra m of deferr ed compe nsatio n for state emplo yees. MS. GIUNCHIGLIANI MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 16 OF EXHIBIT D AND WITH THE UNDERSTANDING TECHNICAL ADJUSTMENTS MAY BE NECESSARY IF A.B. 459 IS PASSED. MS. TIFFANY SECONDED THE MOTION. THE MOTION CARRIED. (MR. PRICE AND MR. ALLARD WERE ABSENT FOR THE VOTE.) * * * * * SENATOR MATHEWS MOVED TO RECOMMEND CLOSING THE BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS AS LISTED ON PAGE 16 OF EXHIBIT D AND WITH THE UNDERSTANDING TECHNICAL ADJUSTMENTS MAY BE NECESSARY IF A.B. 459 IS PASSED. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * There being no further business before the committee, Senator O'Donnell closed the joint subcommittee hearing at 10:00 a.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Assemblywoman Sandra Tiffany, Chairman DATE: Assemblywoman Chris Giunchigliani, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on General Government May 19, 1995