MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session February 1, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:00 a.m., on Wednesday, February 1, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Brian M. Burke, Program Analyst Ronald T. Steele, Program Analyst Cristin Buchanan, Committee Secretary OTHERS PRESENT: Karen Kavanau, Director, Department of Information Services Pamela A. Case, Chief, Division of Systems and Programming, Department of Information Services Dave Lawson, Chief Accountant, Department of Information Services Rose McKinney-James, Director, Department of Business and Industry Renee Diamond, Administrator, Manufactured Housing Division, Department of Business and Industry Nancy Barnhart, Account Clerk, Department of Business and Industry Barbara Braaten, Program Officer, Department of Business and Industry Deborah A. Erickson, Budget Analyst, Department of Administration Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association G. Michael Garmon, Commissioner, Employees Management Relations Board Information Services - Director's Office - Page 609 Karen Kavanau, Director, Department of Information Services, opened the budget and provided testimony from prepared text (Exhibit C, Department of Information Services, Budget Proposal Presentation). Additionally, as a portion of her prepared text, she referred to Exhibit D, Department of Information Services 1994 Statutory Organization chart/1996 Proposed Organization chart, and Exhibit E, Department of Information Services Position Transfer Diagram. Senator Coffin addressed the opposition the Department of Information Services (DIS) has received regarding the Strategic Plan for Information Resources and Information Technology (SPIRIT). He asked Ms. Kavanau if she thoroughly understood why the other departments oppose SPIRIT. In reply, Ms. Kavanau stated the opposition is from individuals who do not understand the purpose of SPIRIT. She advised the committee, her office had met with little opposition when they were orchestrating the program with the other departments. Senator O'Donnell suggested agency concerns were due to proposed position transfers from their departments to DIS. Ms. Kavanau responded, stating the agencies involved with SPIRIT had been aware of the transfers. Senator Coffin commented: If I was in an agency, and a senior staff member of a Governor's Office was on board...writing letters essentially saying you should do this, and you have my authority to make it all happen, I think it might cause them to clam up...because what you have done is...you have the authority figure saying this shall be done to his employees, and that is one of the things that would keep people quiet until we get to town. In response, Ms. Kavanau explained, a letter issued by Margaret Springgate, Legal Council, Governor's Office, to two agencies regarding 800 Megahertz (MHz), was written to reaffirm the changes to the oversight responsibilities of DIS. She continued, stating her oversight responsibilities were expanded in 1993, from traditional data processing to all information systems. Ms. Kavanau resumed her testimony, reading from Exhibit C . During her testimony, she referred to Exhibit F, memorandum dated January 30, 1995, from John P. Comeaux, Director, Department of Administration. Senator Raggio asked if the expenditures need to be increased in the other five budgets indicated in Exhibit D. Ms. Kavanau stated the expense items listed under Director's Assessment in each base budget should be increased. She indicated she would draw the committee's attention to the assessments, as she addressed each budget. Ms. Kavanau returned to her testimony on budget account 1373. Senator Raggio interjected to ask why the Budget Office had recommended more funding than was requested in the Advisory Council and Out-of-State Travel categories, in Enhancement, 125 Accessible and Flexible Responsive Government. (E-125). He further asked if the Out-of-State Travel expense is for two trips. Ms. Kavanau confirmed it is for two trips. Senator Raggio asked the purpose of the Advisory Council expense of $3,674 for Fiscal Year (FY) 1995-1996 and $3,724 for FY 1996-1997. Ms. Kavanau stated the Advisory Council expense is for travel expenses for members of the advisory board to attend meetings Dave Lawson, Chief Accountant, Department of Information Services, addressed the chairman's prior question. He stated the increased amounts in the Advisory Council category provide for full attendance at all four meetings of the Advisory Council during each fiscal year. He illustrated that the base represents the actual costs of attendance at the meetings in the base year, and E-125 provides for full attendance, should that occur. He enumerated, "The amounts in the Information Services category represent moves of what the Budget Office felt were one time expenditures in the base, and they moved them into Enhancements." Resuming her testimony, Ms. Kavanau read from Exhibit C. Senator Raggio said, "The effect of that (Enhancement 126, Accessible, Flexible Responsive Government), is to increase the cost to the agencies by increasing the reserve. Why is that a good idea?" Ms. Kavanau answered, it is because her agency pays for dunning notices. She stressed, "The cost of the state paying dunning notices for us not paying our bills is more important." Senator Raggio asked if that is the only way to increase cash flow in DIS. Ms. Kavanau answered it is not. The Assembly Committee on Ways and Means advised Ms. Kavanau she can borrow from the General Fund. Ms. Kavanau continued her testimony. Senator Mathews interjected, and asked for clarification whether the transfers in Enhancement 902, Program Transfers (E-902) are proposed or if they have already taken place. Ms. Kavanau responded the transfers are proposed. Senator Raggio asked if the transfers are going to be physical transfers. Pamela A. Case, Chief, Division of Systems and Programming, Department of Information Services, interjected, "They are actually already a pool. What we are trying to do is clean up the budgets to reflect what we are doing with that staff." Ms. Kavanau confirmed there will be no physical transfers. Senator Raggio inquired what benefit DIS will realize by pooling clerical staff. In reply, Ms. Kavanau illustrated, "When clerical support is pooled, it makes everyone available whenever a task comes up." She continued: Say we have a clerical staff position over in one division, who has a spare 30 minutes that could fill in to do something else for someone else. Instead of running back and forth, we just funnel all the requests into a centralized area, and they take them as their time permits. It also serves the telephone answering much greater, makes it much easier. Ms. Kavanau continued her testimony, reading from prepared text. Senator Jacobsen inquired where the clerical pool will be housed and Ms. Kavanau stated the pool will be located in the Kinkead Building. Information Services - Research & Planning Division - Page 615 Ms. Kavanau addressed the budget and read from prepared text (Exhibit C). During her testimony, she referred to Exhibit F. She deviated from her prepared text, and informed the committee, when she testified before the Assembly Committee on Ways and Means, the committee discussed vacancies in the division and wanted to know why the division requested two new positions. Ms. Kavanau informed the committee of the difficulty finding qualified people, but reported the vacancies have been filled. Senator Jacobsen asked what role will the Planning Analysts perform. Ms. Kavanau stated the Planning Analysts will be: ...helping them define their needs, helping them write the appropriate request for proposal, if that's required, documenting detailed specifications. They will be responsible for knowing what is going on in other agencies, what's available in other agencies, what data is already being collected, what systems are already up that we might be able to glean from, rather than duplicate a creation of a new system or new data. Senator Jacobsen remarked: The reason for my question, if I remember correctly, 2 years ago the administration for the Governor's Office put in a system that was `try it and you will like it,' and it was just on a trial basis. All of a sudden, we were billed for the equipment. Senator O'Donnell and I were on a committee to go over there and look at it. It was determined it was not even adequate for their needs. Ms. Kavanau clarified Senator Jacobsen was referring to a system established by a group called Proof of Concept. She indicated DIS will not use that system. Information Services - Systems & Programming Division - Page 621 Ms. Kavanau opened the hearing on the budget by providing testimony from prepared text. Senator Raggio questioned if the budget staff is in agreement with the proposed base budgets of all divisions within DIS. Brian M. Burke, Program Analyst, Fiscal analysis Division, Legislative Counsel Bureau, stated the budget staff is in agreement with the base budgets. He added the only exceptions are the inclusion of overtime in both the facility budget and the communications budget, which are not base issues. Senator Raggio addressed the performance indicators listed in the budget and said there should be an indicator which shows percentages or number of work orders completed by an agreed upon due date. He stated: We need to see in the performance indicators in the budget...something that shows us whether you have completed something within an anticipated due date or for the expected bid price and whether it met the agency's specifications. We need to measure your performance in the future and those are the three items that I think stand out as the most important. We need to have some way to see how those are accomplished. Ms. Kavanau stated she will prepare and provide the committee with the performance indicators Senator Raggio requested. She resumed her testimony, reading from prepared text (Exhibit C). Senator O'Donnell questioned what the salary for the three new Program Analysts will be in the Maintenance 200, Demographics Caseload Changes category (M-200). Mr. Lawson answered the Personnel Expenses in the M-200 lists the salaries and fringe benefits. Continuing, he stated, Program Analysts start out at a grade 35. Senator O'Donnell stated the salary, for that grade, is in the range of $35,000 per year. He commented: ...I would suggest $35,000 a year, you are not going to get a good programmer. In order for somebody to attract a good, quality individual, you are going to have to pay him $40,000 to $50,000 per year to get somebody that is good...If we are not going to pay that money, we might as well keep doing what we are doing. I don't like to spend more money than I have to, but...hiring the best people is far better than hiring five people at a lesser quality. You can hire one person to do the work of five people. Senator Coffin questioned how an agency that uses the services of DIS can know that what is being billed to them is actually based on a quality employee. He inquired, "How do you know that when a person has incurred overtime, that in fact it was because they were truly swamped with the complexity of the problem, or they were up to speed and could actually handle this sort of thing." In response, Ms. Kavanau asserted the programmers are not permitted to accrue overtime on behalf of a customer without the customer's written approval. She indicated she can monitor her employees by the quality of their work and the customer's satisfaction. Senator Raggio referenced the M-200 category and asked why DIS is asking for three positions instead of four, as listed in the budget. He asked, "Which position are you dropping?" Ms. Kavanau responded, Aging Services. Senator Raggio reflected Aging Services is requesting a microcomputer specialist for Las Vegas. Ms. Kavanau advised Senator Raggio the position he is referring to has nothing to do with DIS. She said: No, they are not dropping that one. That is a different position. You do not see it in the agency requests and that is the issue. Somehow, our staff was working with staff at Aging Services, talking about the need of a Programmer Analyst, but it never got into their budget request. We assumed it was there, so we put it in ours, because we are recommending consolidation...there was some confusion that arose and we went back to the agency and determined that they had decided they do not want that position, so we have eliminated it. Senator Raggio asked for a status report on the Department of Taxation project, and questioned if it exceeded the expected cost and extended beyond the projected schedule. Ms. Case addressed the chairman's concerns and stated the project was scheduled for completion in December, 1994, but was extended into 1995 due to staff turnover problems on the project. She cited a second reason for delaying the project is because the Department of Taxation has moved into a new building. Senator Raggio asked if DIS is going to give a credit to the Department of Taxation. Ms. Kavanau answered: In May of 1994, the department came to us and complained...they had not properly budgeted for a...Time Sharing Option (TSO),...the name given to the resource that a developer uses to develop a system on-line...The ACES Project (Automated Enforcement Collection System), was the first of its kind in terms of what services our department provided, what services the vendor would provide, and what services or participation the Department of Taxation would provide. The Department of Taxation did not budget for, and we did not advise them to budget for, this TSO development cost. We gave them what our cost would be, but we did not forewarn them that there would be another cost associated, incurred by the developer himself. For that reason, we agreed to share the cost...that cost was about $150,000. With the concurrence of the Department of Administration, we then issued a credit of $75,000 to the Department of Taxation. Senator Raggio asked for clarification whether the Department of Taxation will be receiving additional credit. Ms. Kavanau stated DIS will not make a determination if another refund will be given until the end of the project and the end of the fiscal year. She further noted, the DIS projection for the Department of Taxation may be about $10,000 under the actual cost of the project, and if so, the department will split the cost with the Department of Taxation. Senator Raggio questioned if customers will bear the burden of that kind of refund. Ms. Kavanau answered in the affirmative. Ms. Kavanau continued her testimony, reading from prepared text (Exhibit C). During her testimony she referenced Nevada Revised Statutes (NRS) 242.131, which provides for the Department of Information Services, whenever the demand for services exceeds their ability to meet it, to contract with other agencies or outside contractors to furnish additional services or equipment. Senator Raggio asked Ms. Kavanau if DIS uses Master Service Agreements (MSA) as sole source contracts or if they are put out to bid. Ms. Kavanau stated all MSAs are requests for bid except one, which is a sole source contract. She stated her department selects four bidders for each level of service. Senator Raggio stated other agencies have concerns over this type of contracting due to increased overhead costs. Ms. Kavanau stated she is not aware of those concerns. She stated her department does not charge a fee for MSAs. Continuing her testimony, Ms. Kavanau read from Exhibit C. During her testimony, she noted to the committee: Nevada is the only state that elected to develop an entire integrated system for welfare, instead of just the child support enforcement module, which was the module mandated by the Federal Government...we are taking on a great deal more than most of the other states. Idaho for example, operates their welfare system with 60 Programmers. This addition of 14 positions in the first year of the biennium, and an additional four more in the second, will bring our total to 29, which is considerably less. Senator Raggio indicated Senator O'Donnell and Senator Coffin are appointed as a subcommittee on all matters involving SPIRIT and DIS. He further stated, staff raised a considerable number of questions and issues which the subcommittee will address. Senator Raggio then questioned if the Nevada Operations Multi Automated Data Systems (NOMADS) project is on target or if there are any problems that have arisen. Ms. Kavanau replied the project appears to be on schedule. She continued with her testimony, reading from Exhibit C. Senator Raggio questioned if there will be a drop in services to those agencies that are transferring positions to DIS. Ms. Kavanau stated she does not believe so. Senator Raggio asked how she determines from which agency to transfer a position. Ms. Kavanau stated three criteria are used: who is classified in information technology; if there is professionally classified technology management available to these positions, and if there are, they are not transferred. If there is no professionally classified technology management available, DIS brought them into the department. The third determining factor is location. If the people are located within Carson City, DIS will leave them where they are, as long as they are available for training and meetings. She stated if there are positions located outside of Carson City, DIS will not recommend a transfer for this biennium, since DIS has no presence outside of Carson City. Senator Raggio questioned why a position will not be transferred from the attorney general's office. Ms. Kavanau stated the attorney general's office does not have a Program Analyst on staff. Information Services - Facility Management Division - Page 631 Ms. Kavanau opened the budget, providing testimony from Exhibit C. Included in her written testimony, is a quote from a publication entitled Telecommunications; The Next American Revolution (Exhibit G, Original is on file in the Research Library). Senator Rawson asked if telecommunications services will be used by the university system. Ms. Kavanau stated the university currently has its own system and they are exempt from DIS and the SPIRIT program. Senator Rawson asked if SPIRIT and the university system will be compatible. Ms. Kavanau stated the university system has different needs and will network the campuses internally. Senator Rawson clarified DIS and the university system are not involved in the design of each other's system. Ms. Kavanau stated that was correct. She promptly continued her testimony. Senator Raggio questioned if the Nevada Department of Transportation (NDOT) and the Department of Motor Vehicles and Public Safety (DMV&PS) are in agreement with the transfers into DIS. Ms. Kavanau stated DMV&PS approached NDOT with the recommendation to collapse the positions into NDOT. Subsequently, NDOT contacted DIS and suggested the positions belong with DIS. Information Services - Telecommunications Division - Page 641 Ms. Kavanau opened the hearing on budget account 1355, reading from prepared text. Senator Raggio questioned if the Communications System Specialist is backlogged and Ms. Kavanau confirmed there is an immense backlog in work and therefore a new position is being requested in the budget. Senator Raggio inquired how many requests each Communications System Specialist can handle. Ms. Kavanau did not have that information available and advised the chairman she will provide the information at a later date. Senator Raggio asked how Ms. Kavanau determines that 1,500 requests are the optimum number for a specialist to handle, and again, she advised she will investigate how the agency procured that figure. Information Services - Communications Division - Page 647 Ms. Kavanau commenced testifying on this budget while reading from Exhibit C. Senator Coffin questioned how many communication sites can be refurbished for $92,700 and Ms. Kavanau stated only one site can be refurbished for that amount each year. Senator Coffin queried whether additional mountaintop sites will be needed under any contemplated changes, and referenced the statewide 800 MHz project. Ms. Kavanau stated no new sites are needed at this time, and added: There is only one agency that has deployed that technology and that is the [Nevada] Department of Transportation. They began that effort in 1985. In 1991, they issued a request for proposal (RFP) and elected a vendor...No other action has been taken on 800 MHz by state agencies. Senator Jacobsen asked, "If at the sites where private enterprises are involved, would those entities be able to service the sites?" Ms. Kavanau disclosed that discussions have been held regarding partnerships with the private enterprises for site maintenance. The Governor has recommended a study be conducted of the state's microwave 800 MHz issue during the next biennium, she added. Senator Jacobsen asked Ms. Kavanau to report back on the progress of DIS before the Interim Finance Committee (IFC). Manufactured Housing Fund - Page 787 Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association, began testimony on the budget and asked to go on record, stating: When Mrs. James and Ms. Diamond testify next, they will be telling you about certain enhancements to their budget, new positions, primarily relating to problems in the agency with getting out titles, and it is a position that the industry supports. This is a self-funded agency from the industry itself. They are proposing certain fee increases to enhance their budget...we have in principle, agreed to support those increases...We will be working with the agency itself as to the specific fees, which my board has not seen yet, but in any event, in principle, we have agreed to the increases. Senator O'Donnell questioned if the titles for manufactured houses are processed through the Department of Motor Vehicles and Mr. Joerg stated they are processed through the Nevada Manufactured Housing Association. Senator O'Donnell asked if the Nevada Manufactured Housing Association has a backlog and Mr. Joerg answered in the affirmative, asserting the agency is 10 to 12 weeks behind. He stressed the volume of titles processed increased 25 percent last year and another 20 percent increase is anticipated this year. Rose McKinney-James, Director, Department of Business and Industry, introduced Renee Diamond as the new Administrator of the Manufactured Housing Division. Mrs. McKinney-James stated she appreciates Mr. Joerg's comments and vowed to work closely with the industries regulated by the Department of Business and Industry. Senator Raggio questioned if the increases will be made through a bill or a regulation. Mrs. McKinney-James indicated the increases will be made through a combination of both. She stated hearings have been scheduled for regulations and bill drafts wil be drawn regarding the statutory provisions. Renee Diamond, Administrator, Manufactured Housing Division, Department of Business and Industry, provided an overview while reading from prepared text (Exhibit H). Nancy Barnhart, Account Clerk, Department of Business and Industry, presented the budget for the Manufactured Housing Fund. She gave an overview of the function of the division, then addressed the base budget. She stated the agency accepts the Governor's recommendations in the base budget. Senator Raggio asked where the funding for the two positions requested in the Maintenance 200 Demographics Caseload Changes (M- 200) will come from. Ms. Barnhart replied the funding comes from moderate increases in licensing. Senator Raggio asked if those were the increases to which Mr. Joerg was referring. Ms. Diamond responded in the affirmative and announced, the last time license fees were increased was 1985. Senator Raggio clarified the new positions are being requested under M-200 and the funding for those positions is located under Enhancement 275 Consumer Treatment (E-275). He questioned if a determination has been made on the amount of the increase. Ms. Diamond stated she has projected amounts, but due to regulations, hearings will be held. Senator Raggio queried the amount of the proposed increases. Ms. Diamond stated the increases will be between $5 and $20 on items such as reactivating a license, name changes and address changes. She indicated she has a projected schedule of fee increases, and provided a copy to the budget staff (1996/1997 Biennial Budget #3814 Line Item Detail Revenue Enhancement/Governor Recommends/Exhibit I). Senator Raggio inquired if the increase will address the cost of adding the new positions and maintaining an adequate reserve. Ms. Diamond answered in the affirmative. Senator Raggio questioned the need for a reserve of $328,000. Ms. Diamond stated the reserve diminishes over the biennium. Senator Raggio questioned how the reserve diminishes. Deborah A. Erickson, Budget Analyst, Department of Administration, addressed the chairman's question. She stated according to a legislative audit, the projections show the reserve is going to diminish to a dangerously low amount. She explained the reserve for the second year of the biennium is about one-third of the total cost for 1 year. She added: ...Historically, it has been about 10 years since the last fee increase, so it will have to fund until the next increase. It will have to fund any particular inflationary cost, salary increases or merits and things like that. So this type of budget, in the very beginning, I think the reserve would tend to be higher, but it is going to use that reserve throughout the years to pay for those inflationary things that a general funded budget would come to the General Fund for. Senator Jacobsen questioned if the division is aware of the increase in expenditures and decrease in revenue, and if they are looking to the reserve to make up the difference, or are efforts being made to increase the revenue. Ms. Barnhart stated expenditures have increased approximately 3.5 percent over revenues, but she is not in the position to do anything about it. Ms. Diamond asserted the previous administrator made those decisions, and she stated she plans to make an effort to increase revenue. Senator Raggio questioned the reason for deleting the transfer to Mobile Home Parks. Ms. Barnhart replied if the transfer is deleted, it will increase revenue in the reserves in budget 3814 and will enable budget 3843 to support itself. Senator Raggio asked how that decision was made. Barbara Braaten, Program Officer, Department of Business and Industry, stated the Mobile Home Parks budget is requesting a fee increase to eliminate that transfer so they will no longer have a deficit. Senator Raggio asked if a decision had been made last session to transfer money from the budget into the Mobile Home Parks budget. Ms. Braaten confirmed that it has been an ongoing practice for a number of years. She added, the mobile home park owners support the fee increases. Mobile Home Parks - Page 793 Ms. Braaten opened the budget by giving an overview of her duties and responsibilities as well as a review of the Mobile Home Parks program. Ms. Braaten discussed the base budget and informed the committee the agency accepts the Governor's recommendations. Senator Raggio questioned how the agency resolved 104 percent of the complaints filed in 1994. Ms. Braaten stated some cases from 1993 rolled over into 1994, resulting in the number of cases resolved being greater than the actual number of complaints filed. Senator Raggio questioned if the people making the complaints and the mobile home park owners, who fund the agency, are satisfied with the agency. Ms. Braaten stated the mobile home park owners will not support a fee increase if they are not satisfied with the agency performance. She indicated that tenants who file complaints containing issues not addressed in NRS, may not be satisfied due to the agency's inability to resolve their complaints. Ms. Diamond informed the committee she intends to review the statutes to determine if any amendments are needed. Senator Raggio asked what is being recommended as a fee increase and how much additional funding the increase will generate. Ms. Braaten stated the fee that mobile home park owners pay will increase from $3 per space to $5, raising an additional $62,000 per year. Senator Mathews stated one-third of her district is comprised of mobile home parks. Tenants living in those parks are not happy with the fee increase since it is a pass-through expense. Ms. Braaten speculated mobile home park owners are probably going to pass-on a rent increase to tenants, regardless of a fee increase. Ms. Diamond indicated she is aware of the feelings of the tenants and that is the reason fees have not been increased since 1985. She further stated, any increases tenants have paid since 1985 did not originate from the Mobile Home Parks agency. Senator Rawson provided the following historical overview: My first session, I was serving on judiciary and the concerns that the mobile home owners expressed were very heart rendering. They wanted this division. They wanted this badly enough that they proposed, themselves, that they pay for it, and that it be passed on to the mobile home owners. We were concerned about that at the time, and tried to talk about in the future, this would be a bigger agency, there is going to be inflation, the costs will go up, we do not want to saddle you with this. They demanded, really, that we go ahead, and I think by and large it has worked well for what they had wanted, but the real question now, should be, does it meet their needs. If it meets their needs, then unfortunately, there is a cost to it. If it does not meet their needs, then we ought to eliminate it. Mrs. McKinney-James reported that she conducted meetings with the leadership of the Mobile Home Owner's League and in those meetings, concerns were expressed relating to the cost, due to many owners being on fixed incomes. She stated, however, they want to see an agency in the position to assist them with their complaints in conflict resolution. Mrs. McKinney-James stated she has not heard any suggestion that this is a division the Mobile Home Owner's League wants to see eliminated. She said: They recognize that there is a balance that has to be achieved, and they would much rather have this division to have their power strengthened. They have indicated to me that they, as an organization, will be submitting or asking for the introduction of some legislation to strengthen this division. As we get through this session, you may well see some indication of what their desires are. Senator O'Donnell wanted to know what is being done about the availability of spaces. Ms. Diamond replied that in Clark County, no appreciable difference in the availability of spaces has been realized. She stated the low supply of spaces is the cause for higher rent in some counties, such as Clark County. She assured Senator O'Donnell she will take a proactive stand in disseminating data and information to the Clark County Commission regarding the number of spaces available. Lot Rent Trust Subsidy - Page 799 Senator Raggio questioned on what basis applications are either granted or denied. Ms. Braaten stated there are three qualifying criteria: the applicant must own the mobile home or be on contract to purchase a mobile home; the applicant must have resided in a mobile home park for at least 1 year in the state; and the applicant must have a monthly income of $750.00 or less. Senator Raggio questioned how this budget is funded and Ms. Braaten explained the mobile home park owners pay an annual fee of $12 per occupied space. Senator Raggio clarified the fee of $12 is in addition to the fee charged to fund the Mobile Home Parks budget and Ms. Braaten answered in the affirmative. Manufactured Housing Education/Recovery - Page 803 Ms. Barnhart opened the budget by providing an overview of the division. She stated the last administrator held two classes and requested personnel to conduct education classes for mobile home park owners. Senator Raggio clarified the reserve account for the agency has over $500,000 and asked what has been set aside for the purpose of education and who is administering the reserve. Ms. Diamond stated she is administering the reserve and declared: My historical perspective...is that the consumer wants an informed management and owner. They want them to know exactly what they have to do...Many of the complaints we receive are merely interpretations of what should be done and, in many cases, the consumer...has much better knowledge of the law than the different managers that are put in. Education...is the answer to that...we need to get this going, but to do it we need a person. Senator Raggio questioned if a specific position is assigned to conduct the classes. Ms. Barnhart stated a Licensing Officer is presently conducting the classes. Ms. Diamond added the new full-time position requested under Enhancement 275 Consumer Treatment (E-275), will be someone who can provide the education in a cost effective manner. Senator Raggio asked if there have been any claims or court ordered payments made against the division. Ms. Barnhart answered in the affirmative and informed the committee she can provide a report with the specific information. Senator Raggio asked her to expand on what the report contained. He questioned what has been done in the way of recovery into this fund. Ms. Barnhart answered the division has had approximately 12 claims in the past 10 years, amounting to approximately $83,000 in court ordered restitution. Senator Raggio questioned why the division is requesting $60,000 under the Court Ordered Payments category if the total payout to date has been $83,000. Ms. Barnhart replied the request for $60,000 is a projection in case a large claim is filed. She informed the committee the highest claim paid was $25,000. Ms. Diamond noted as the number of complaints increase, so does the cost of recovery. She stated the $25,000 was the highest and most recent claim paid, and claims have been escalating over the years. Senator Raggio asked what are the usual types of complaints which result in court ordered restitution. Ms. Barnhart replied the most common complaints are for manufacturing defects and complaints against dealers. Employees Management Relations Board - Page 923 G. Michael Garmon, Commissioner, Employees Management Relations Board, began the budget by providing testimony from prepared text (Exhibit J). Senator Raggio asked Mr. Garmon to give an overview of the Employees Management Relations Board (EMRB). Complying with the chairman's request, Mr. Garmon advised the committee, the board had 25 prohibitive practice hearings during Fiscal Year 1994, including pre-hearing conferences. Senator Raggio wanted to know how many members serve on the EMRB, and their names. Mr. Garmon stated there are three positions on the board. He advised the committee, Susan L. Johnson resigned from the board and the other two members are Salvatore C. Gugino and Tamara Barengo. He announced the Governor is in the process of appointing a replacement for Ms. Johnson. Senator Raggio questioned how many board meetings the EMRB is required to attend each year. Mr. Garmon answered the board meets between 12 to 15 times per year. Senator Raggio asked Mr. Garmon to explain the Program Descriptions (Exhibit K). Mr. Garmon explained each sheet represented projections for Fiscal Years 1994, 1995, 1996 and 1997. Senator Raggio asked Mr. Garmon if the budget, as recommended by the Governor, meets the needs of the board and Mr. Garmon answered in the affirmative. Senator Raggio addressed the issue of subcommittees and joint subcommittees, and passed out the Senate Finance Committee, Joint Subcommittees list (Exhibit L), the Senate Finance Committee, Subcommittee Assignments, 1995 Session list (Exhibit M) and the Assembly Ways and Means Committee, Subcommittee Assignments, 1995 Session list (Exhibit N). Senator Raggio adjourned the meeting at 10:40 a.m. RESPECTFULLY SUBMITTED: Cristin Buchanan, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance February 1, 1995 Page