MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session March 7, 1995 The joint subcommittee meeting on Public Safety/Natural Resources/Transportation of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Lawrence E. Jacobsen at 8:00 a.m., on Tuesday, March 7, 1995, in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator Lawrence E. Jacobsen, Chairman Senator William R. O'Donnell Senator Bernice Mathews ASSEMBLY COMMITTEE MEMBERS PRESENT: Mr. Larry L. Spitler, Chairman Mr. Thomas W. Fettic, Chairman Mr. Morse Arberry, Jr. Mr. Jack D. Close Ms. Chris Giunchigliani Mr. John W. Marvel STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Gary Ghiggeri, Principal Deputy Fiscal Analyst Debbra J. King, Program Analyst Marion Entrekin, Committee Secretary OTHERS PRESENT: Randy C. Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, Department of Motor Vehicles and Public Safety William S. Gosnell, Chief, Administrative Services Division, Department of Motor Vehicles and Public Safety Mary Lynne Evans, Administrator, Office of Narcotics Control, Department of Motor Vehicles and Public Safety James P. Hawke, Chief, Special Services Division, Department of Motor Vehicles and Public Safety Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration Marlen Schultz, Highway Safety Coordinator, Traffic Safety Division, Department of Motor Vehicles and Public Safety Ray E. Blehm, Jr., State Fire Marshal, State Fire Marshal Division, Department of Motor Vehicles and Public Safety Commission for Veterans Affairs - Page 1737 Randy C. Day, Commissioner, Office of Nevada Commissioner for Veteran Affairs, Department of Motor Vehicles and Public Safety (DMV&PS), indicated since an overview of the budget had already been provided before the Senate Committee on Finance and the Assembly Committee on Ways and Means, he would answer any remaining questions the subcommittee may have. Mr. Marvel noted the Governor recommended a one-shot appropriation of $215,000 to fund development of an effluent watering system at the Boulder City Cemetery, and to provide matching funds for improvements and expansions of the cemeteries. He asked the amount of federal matching funds the agency will receive. Mr. Day responded the agency is involved in the federal grant process with the federal government at the present time. Therefore, he is certain the revenue from the federal government is forthcoming. In addition to the one-shot appropriation of $215,000, Mr. Day anticipates the agency will receive a federal matching grant, including in-kind benefits, of $319,000. Other than federal revenue, Mr. Marvel asked how much in-kind assistance the agency will receive from the federal government. Mr. Day responded the actual federal revenue amount received will be $215,000 as a match to the state's one-shot appropriation of $215,000, and the in-kind portion valued at $104,000 for a total federal matching grant of $319,000. Mr. Day pointed out the in-kind share of the match is for cemetery land at the Boulder Cemetery site. Mr. Day remarked in addition to the federal matching grant, the agency is expecting revenue from donations of an additional $319,000 for a total of $638,000 to be used for the Boulder Cemetery site. Senator Jacobsen asked Mr. Day to explain the role of the Commissioner for Veteran Affairs. Mr. Day replied there are two offices, one in Reno and the other in Las Vegas, as well as two veteran cemeteries located in Fernley and Boulder City. The offices located in Reno and Las Vegas assist veterans and their families to obtain all the services, compensation and government benefits to which they are entitled, and for managing the funds of veterans declared unable to handle their own financial matters by the courts. Additionally, the offices supervise the operation and maintenance of two state veteran cemeteries located in Fernley and Boulder City. Mr. Day pointed out the Fernley Cemetery is located on a 40-acre site and the Boulder City Cemetery on an 80- acre site. At the present time, the agency is approaching 1,000 burials in the Fernley Cemetery and 3,600 burials in the Boulder City facility. Mr. Day said another program offered by the office is the Guardianship Program. There are presently 45 guardians with total assets of $l.8 million controlled through the Office of the Nevada Commissioner for Veteran Affairs. Mr. Day said guardianship assistance was a free service to veterans until 1993 when a senate bill was passed to allow for a 5 percent charge on annual income, not on total assets, to offset General Fund revenue used to administer the program. Senator Jacobsen asked if the agency provides outreach services of any kind. Mr. Day stated due to the lack of funding for transportation, the agency has been unable to provide outreach services. The agency has enhanced the transportation budget for the next biennium which will allow for more outreach activity. Senator Jacobsen asked for comments regarding the effluent watering system contemplated for the Boulder City Cemetery. Mr. Day stated the federal grant program will partially fund the development of the effluent watering system. In addition, the one-shot appropriation together with matching funds will be used to expand the cemetery in Boulder City by 8 acres to accommodate the effluent water usage, and the agency hopes to have the expansion completed by mid to late Spring of 1996. Mr. Day commented after numerous discussions with Boulder City officials regarding the effluent watering system, they have indicated a willingness to enter into a contract with the agency to provide water for a 10 cent charge for every 1,000 gallons of effluent water used. Mr. Day said this charge is a considerable decrease over the current $1 per 1,000 gallon charge now imposed. He pointed out without the additional 8-acre expansion considered, the agency will be dropping from a $37,000 annual charge to a $3,700 annual charge for water. The agency is currently in the process of obtaining written agreements with the Boulder City Water Treatment Facility on the purchase of effluent water. Senator Jacobsen asked if the agency will be guaranteed a continuous supply of water, and if the water is metered and delivered to the site. Mr. Day responded the terms have not yet been reduced to contract form, but he is certain the water will be metered at the cemetery site. He further stated Boulder City will assume all of the expenses for the maintenance and installation of a pump at the cemetery site. Mr. Marvel noted under the Governor's reorganization recommendation for the DMV&PS, the Office of Nevada Commissioner for Veteran Affairs will remain with the Department of Motor Vehicles. He asked Mr. Day if the Office of the Military would be a more appropriate location for his office to receive administrative support. Mr. Day replied with the exception of the adjutant general, the employees of the Office of the Military are federal employees under a federal system, and he believes this would cause problems for his office with personnel matters, hiring, payroll, and purchasing. He said he would prefer that his office remain under the jurisdiction of a state agency. He mentioned it has been a relief to be under the DMV&PS because of the resources available for his office. Senator O'Donnell asked if the amount of funding used for the Office of Nevada Commissioner for Veteran Affairs comes out of the 22 percent the DMV&PS is capped under the Highway Fund. William S. Gosnell, Chief, Administrative Services Division, Department of Motor Vehicles and Public Safety, responded the support the DMV&PS provides to all of the divisions in the department are funded from the Highway Fund. He stated the appropriation in the budget for his office is the Highway Fund from which support is provided on an equal basis to the Division of Parole and Probation, Nevada Division of Investigations (NDI), Office of Nevada Commissioner for Veteran Affairs, and all the operating divisions within the department. In reference to a possible reorganization within the DMV&PS that may split the department and make Public Safety a separate department, Mr. Day commented the size of either department will benefit his office. Therefore, it does not make a difference to him under which department the Office of Nevada Commissioner for Veteran Affairs is placed. He reiterated he would prefer to remain in either department as long as it is under the jurisdiction of the state, and not the Office of the Military. Mr. Marvel noted the agency intends to make an existing half-time position a full-time position and asked if this would require budget adjustments by the Budget Division. Mr. Day responded in the affirmative. He stated through salary savings, the agency has been able to utilize the employee on a full-time basis. Mr. Close commented during the agency's budget presentation before the Assembly Committee on Ways and Means and again today, Mr. Day indicated the agency may impose a 5 percent charge for guardianship services. He stressed he would like this to be a guaranteed 5 percent charge since he believes there has to be some reimbursement to the state for the work the agency is performing on behalf of the Guardianship Program. Mr. Day said the agency has hesitated to enforce the 5 percent charge due to the financial constraints of some of the pensioners. Mr. Close concurred he would not want to see individuals go without food because of the charge, but said insofar as possible, the agency should enforce the 5 percent charge for guardianship services. He asked that the agency's future performance indicators include the number of individuals the agency has assisted in the Guardianship Program, and the amount of collection costs involved. Ms. Giunchigliani asked if the half-time position Mr. Marvel inquired about is reflected in the budget, and Mr. Day said the position is shown on page 1739 of the Governor's Executive Budget. Mr. Day pointed out since the agency's budget hearing before the Assembly Committee on Ways and Means, legislation has been requested to allow for the payment of interest on trust account funds. The agency has also worked with the Office of the State Treasurer to confirm the agency will have immediate access to the trust account funds. Mr. Day anticipates the bill draft request will be approved and the procedure will be in place by July 1, 1995. Senator Jacobsen asked Mr. Day to discuss the work being performed at the cemetery sites by honor camp crews. Mr. Day stated the agency has been using honor camp crews on a regular basis to perform work at the cemeteries on Tuesday of each week. He said the agency would like to have the honor crews 2 days each week to accomplish all of the work and maintenance of equipment used at the cemeteries. He is concerned the honor camp located in Jean, Nevada will be closing, which would impact on the services performed by the crew at the Boulder City Cemetery. Senator Jacobsen remarked when the inmates at the Silver Springs Honor Camp were transferred to the Jean Honor Camp, the Fernley Cemetery was badly impacted. He asked if there has been any vandalism occurring at the cemetery sites. Mr. Day responded he has not heard of any problems at the Boulder City Cemetery. A pickup truck was hot-wired and stolen at the Fernley Cemetery and later returned, but there has been no other vandalism. Mr Day commented the Northern Nevada Cemetery Support Group under the chairmanship of David Parsons has secured a $25,000 donation to place a modular home near the maintenance facility at the Fernley Cemetery. The group is also in the process of obtaining a grant for an additional $20,000 to be used to finish the work associated with the modular home, and to place an individual in it to monitor the gates and perform some work at the site in exchange for free rent. Senator Jacobsen said the cost for spousal burials was increased at the Fernley Cemetery, and asked what the ratio is now between veterans and family members buried in each of the cemeteries. Mr. Day answered at the present time spousal burials are at 10 percent at the Fernley Cemetery and 14 percent at the Boulder City Cemetery. He said the agency losses on expected revenue from burials is currently 2 percent at the Fernley Cemetery and 5 percent at the Boulder City Cemetery. The agency only permits spouse burials at no charge at the request of the Washoe or Clark County Social Services Agencies for individuals deemed to be indigent. Senator Jacobsen asked Mr. Day to comment on proposed legislation to change the composition of the Veterans' Advisory Commission and the elimination of separate advisory commissions for the cemeteries. If this passes Senator Jacobsen said, funding will need to be adjusted out of the cemetery costs into the general operating category to reflect the change. Mr. Day responded: I tend to support it....It is an effort to streamline government which will make the agency's job easier. If it passes, the legislators on the Nevada Veterans' Cemetery Advisory Committee will become members of the overall Nevada Veterans' Advisory Commission thus providing one clearinghouse for all veterans' issues across the state. That body would be meeting alternately between the northern and southern part of the state. Senator Jacobsen remarked the Governor has recommended $42,000 for the purchase of a backhoe for the Boulder City Cemetery. He recalled a backhoe was also needed at the Fernley Cemetery and subsequently acquired from surplus, and asked if this could be done at the southern Nevada site. Mr. Day answered the agency has had to spend a lot of time and cost on the maintenance of surplus backhoes acquired for the Boulder City site. He said a new backhoe can be used for 20 or 25 years with very little maintenance costs involved. He pointed out there are an average of five or six burials daily at the Boulder City Cemetery, and a reliable backhoe is needed to dig the graves. He feels the $42,000 expenditure for a new backhoe is necessary. Veterans Home - Page 1743 Mr. Day indicated this account relates to a work program that is in place for an anticipated Veterans' Home in the State of Nevada. The agency said the legislation is not yet in place to allow for the construction, maintenance, and operation of the facility, but the account allows for revenue to be placed with the Office of the State Treasurer from the sale of special license plates inscribed with the word "Veteran." Senator Mathews asked the cost of the special license plate, and the proceeds the agency will receive from the sale of each plate. Mr. Day replied he does not know the amount currently charged for the purchase of a plate, but a per-plate proceed of $25 is placed into the Veterans' Home account. Every year thereafter, $20 will be placed into the account from each renewal charge. Mr. Arberry noted Senate Bill (S.B.) 497 of the Sixty-seventh Session authorized the creation of the special license plate, and along with the word "Veteran", the branch of the armed forces requested by the applicant was to be inscribed on the plate. He said many veterans have indicated the additional inscription is not reflected on the plate. Mr. Arberry said he introduced new legislation this session to correct the omission. SENATE BILL 497 OF THE SIXTY-SEVENTH SESSION: Provides for issuance of special license plates In support of veterans' home. Mr. Day interjected he is familiar with the proposed new bill, but it relates to retired military personnel with 20 years or more of service in the armed forces. The revenue from the sale of the plates is to be used to offset costs at the cemeteries. Senator Jacobsen asked if the revenue in the account from the sale of the special plates in the Office of the State Treasurer is accumulating interest. Mr. Day answered unfortunately the interest is not accumulating on the fund at the present time. Mr. Day believes legislation should be proposed to stipulate the account will earn interest. He pointed out that once construction of the veterans' home is underway, there will be millions of dollars in the account, and the accumulated interest would be appropriate. Ms. Giunchigliani asked where the $100,000 reflected in the budget is derived. Mr. Day said the amount is arbitrary and is what the agency estimates will be received from the sale of the special license plates. He said the agency determined from approximately 225,000 veterans in the State of Nevada that a certain percentage will purchase the special plate in support of a veterans' home in Nevada. Ms. Giunchigliani noted only $3,450 has been generated from the sale of the special plates to date. She asked if the revenue does not materialize, will S.B. 497 obligate the state to build the veterans' home. Mr. Day responded he does not know what the liability is for the account, but no time constraint is involved. Ms. Giunchigliani suggested the Fiscal Analysis Division look into the conditions of S.B. 497 in the event construction cannot be accomplished. Mr. Close asked how much the agency projects it will cost to construct a veterans' home in Nevada. Mr. Day answered he has toured veterans' homes recently completed in the states of Louisiana, Arizona, and Idaho, and reviewed the projections for a new facility in Oregon. He explained the cost for material and labor in those states is similar to construction costs in Nevada. Mr. Day said the homes he toured required approximately $75,000 to $85,000 per bed to build. Looking at it from that perspective, he believes the number of beds and the level of care will certainly impact on the overall cost. He suggested the state not consider including acute care because the cost would be prohibitive. He also suggested the facility should have 120 beds. He said an 80-bed facility should be the minimum considered and if chosen, the design should include easy expansion of the facility as needed. He commented the projections for Oregon's veterans' home program indicated the state will break even in costs by the end of the second year of occupancy. He said the potential for breaking even should weigh into the equation when the actual costs are considered. Mr. Close asked if the veterans' homes he toured were built from General Fund revenue. Mr. Day replied 65 percent was paid for by the federal government and the states assumed the remaining 35 percent of the costs. Mr. Day remarked if the veterans' home is a 120-bed facility, it would cost approximately $12 million to build. Mr. Marvel asked if the cost for the veterans' home would come out of the General Fund or from bonds. Mr. Day said it would be handled in a number of different ways. He reminded the committee members he tried to get legislation passed in 1993 that would have allowed his agency to work with Nevada communities to secure bonds for the construction of the facility. The agency is looking for a site in Las Vegas, and as healthy as the economy is in that area, Mr. Day doubts the City of Las Vegas would enter into a participation bond agreement because there would be no benefit for them to do so. Justice Assistance Act - Page 1801 Mary Lynne Evans, Administrator, Office of Narcotics Control, Department of Motor Vehicles and Public Safety, said the agency is 100 percent federally funded. The budget for the Justice Assistance Act functions as a trust and revenue pass-through account for the distribution of federal United States (U.S.) Department of Justice, Bureau of Justice Assistance Grant revenue to state and local entities. She added the office is currently staffed with two full-time employees but another half-time clerical position has been recommended by the Interim Finance Committee (IFC). Ms. Evans remarked effective July 1, 1995, the agency expects to receive revenue of $3,184,000. James P. Hawke, Chief, Special Services Division, Department of Motor Vehicles and Public Safety, said the funds are used for activities such as the Drug Task Force throughout the state, and drug programs at local law enforcement levels. Recently the division has been looking at having drug courts located in the northern part of the state due to the success of such a court in operation in southern Nevada. Mr. Hawke commented the division is in the process of releasing grant funds for the current fiscal year. He pointed out the grant solicitations are received by all the law enforcement and judicial districts in the state who submit their grant requests. A committee is formed of those eligible to receive funds to recommend the projects to be funded. Mr. Hawke said the division has always accepted the committees' recommendations to arrive at a fair distribution of the federal funds. Mr. Marvel remarked available federal funding has been significantly changed by the passage of a federal crime bill which became effective October 1, 1994. As the crime bill is currently written, Nevada will receive $735,904 in Fiscal Year 1995 - 1996 and $566,080 in Fiscal Year 1996 - 1997, but the division is projecting revenue of $2.9 million for each year of the biennium. He asked how the division plans to make up the difference. Mr. Hawke responded the funds received through narcotics assistance are available to the state for a 3-year period, and the division is attempting to spread the funds over the next 3 years and not use the funds quickly. He said the division wants to maintain the Drug Task Force through what he thinks will be a period of unstable funding. Mr. Marvel interjected, "This budget does not mean anything then." Mr. Hawke said the part of the budget relating to travel, personnel, and operating expenses is what the division will follow for the next 2 years. The portion of the budget referring to anticipated federal funds is an estimate made by the division over a year ago. Mr. Spitler said it is normal to reconcile federal grants based on fiscal year to state requirements, and the subcommittee is trying to determine how the division is planning to adjust to the level of anticipated funding. Mr. Spitler said the subcommittee is asking for the division to prepare the requested information in a budget document reflecting the spread of the federal revenue over the state's fiscal period. He asked Mr. Hawke, "Can that be done?" Mr. Hawke replied, "Yes, that is what we always try to do in this...." Mr. Spitler interjected, "If you were to weed off $1 million you are anticipating getting in July, how would we see that here?" Ms. Evans said the division will receive about $3.2 million by July 1, 1995. She stated the funding for this program is always 1 year behind, so the division always knows the amount of funding they will receive. Ms. Evans further commented: We will use the 1-year funding for 2 years, so we know we will be in business for 2 more years. After that we have no idea what is going to go on. We should know, probably in January (1996) of what is going on because that is when the budgets go into place. They are talking about formula grants, block grants, and grants going directly back to Washington. At this point we really do not know what is going on. There is going to be a couple of heavy impacts....Loss of jobs and the NDI (Nevada Division of Investigations) is very dependent upon this money and they are going to have a tremendous shortfall, and that is going to involve the task forces....We are very concerned about Investigations. Mr. Spitler asked if the division could reconcile the anticipated federal funding received on a federal Fiscal Year basis to the state Fiscal Year budget. He remarked he understands the grants are only possibilities, but it appears the division is counting on the receipt of them anyway. Ms. Evans responded the division will reconcile their budget as suggested. However, she pointed out the division knows $3.2 million will be received on July 1, 1995 and that revenue will fund programs over the next 2 years. She said the budget has been based on the amount the division is guaranteed to receive, and not on anticipated revenue. Mr. Spitler reminded Ms. Evans the budget indicates the division has requested $2.9 million for Fiscal Year 1995 - 1996 and $2.9 million for Fiscal Year 1996 - 1997. Ms. Evans replied at the time they prepared their budget, they were advised by the Budget Division to reflect the $2.9 million, but they know an increased amount should be shown because of the anticipated receipt of $3,184,000 on July 1, 1995. Mr. Spitler asked, "Are you saying you are getting $1.6 million each year of the biennium based on the state budget, or are you saying you will be getting $2.9 million each year of the biennium?" Mr. Hawke said the division already knows they will have to appear before the IFC to adjust the $2.9 million to $3.2 million Mr. Spitler questioned if the adjustment is for each year of the biennium, and Mr. Hawke replied only for 1 year. Continuing his testimony, Mr. Hawke said the division may have to appear before the IFC to increase or "de-obligate" funds for the second year of the biennium, depending on the federal action taken. Mr. Spitler reiterated the division's budget should reflect the $3.2 million anticipated as revenue for the first year of the biennium, and not $2.9 million for each year of the biennium because this would indicate the division is anticipating their federal grant revenue will be 50 percent less. He added, "What I am hearing in testimony is that you are only going to receive about $1.6 million each year of the biennium." Ms. Evans said at the time the budget was prepared the division felt comfortable with the $2.9 million reflected for each year of the biennium. However, since the passage of the federal crime bill, the division has not been able to make accurate projections. Mr. Spitler repeated, "The projection is incorrect and needs to be scaled down to either $3.2 million for the first year of the biennium with "zero" in the second year or a spread of the $3.2 million over 2 years of the biennium." Mr. Marvel asked how many of the division's budgets will be impacted by the changes that have taken place. Ms. Evans stated the budget for the NDI will be impacted the most since they will be operating at approximately $400,000 short of federal revenue over the next biennium. She qualified even if the division divides the $3.2 million appropriation over both years of the biennium, the NDI will be $400,000 short. Mr. Marvel commented the subcommittee does not know what budget amounts to work with, and asked if the Budget Division could comment. Joel Pinkerton, Budget Analyst, Budget Division, Department of Administration, confirmed the funding for the account has been affected by the federal crime bill and the new Republican (U.S.) Congress, and the division cannot state what will happen in the future as far as federal funding is concerned. He also said the only thing the division can be sure of is it will receive $3.2 million on July 1, 1995, and the $2.9 million reflected in the budget is the division's "best guess" estimate for authority to receive the revenue. Mr. Pinkerton pointed out the Narcotics Control budget on page 1791 of the Governor's Executive Budget is the primary budget that will be impacted since the major portion of the account is financed by the Federal Bureau of Justice Assistance. He remarked the amount reflected under line item Agency Transfers of about $700,000 is from the Federal Bureau of Justice Assistance. If this amount is drastically reduced, programs falling under the Narcotics Control budget will be curtailed. Ms. Giunchigliani queried, "The 62 percent that has to go to locals...that remains no matter what with this grant?" Ms. Evans replied, "That is correct." Ms. Giunchigliani asked what percentage of the federal grant the division is permitted to use for administrative costs. Ms. Evans responded the division is permitted to use 10 percent for administrative costs although only 5 percent is normally used. Ms. Giunchigliani noted drug courts could potentially be funded through the federal grants. She asked if the division has received any applications to establish a drug court in the north. Ms. Evans responded the division cannot commit the use of federal grant funding until the location of the drug court is established. She remarked since the division is unsure of the amount of future federal funding, any application the division may receive from the drug courts will have to be held. Ms. Giunchigliani asked, "We know we are definitely getting $3,184,000....If the localities applied for the grant for drug court, then you could appropriate that money for this biennium." Ms. Evans responded in the affirmative. She reiterated the division is attempting to spread the anticipated $3.2 million revenue over the biennium to keep the task forces operational. She anticipates approximately $300,000 will be remaining at the end of the biennium that could be used for the local entities, but stated the federal crime bill provides funding for drug courts. Ms. Giunchigliani asked for a breakout of how the division plans to spend the $3.2 million they will receive July 1, 1995. She remarked: I appreciate the efforts of the Narcotics Task Force and the work they do, but I have felt it is a duplication of local government services and I would be happy to get rid of it and redirect the task force revenue into local grants....I know that has an impact on the NDI budget, but I think we task everything to death. We know what some of the problems are...lets put cops on the streets to deal with that part of it. I think you can redirect some of the federal dollars. I would like to see what applications have come in to determine if we can, perhaps through policy, have you take a look at restructuring those. I think through the community policing programs that most of the localities are moving to, we do not need to be in the same business as they do at the state level. There is so much drug money that comes into the state though education and everyplace else we do not even have a handle on who is paying what for what....If we could see that we can take at look at it in subcommittee.... We do have several drug court bills and I think that is one approach that is a policy approach I would rather not use General Fund revenue for...and if we have the opportunity to use a federal grant...then I think we have an obligation to look at that....Clark County's (drug court) has been going...Washoe would model after it. It is not as if it were a new program, but it forces the community, if that is the direction they want to go in through the 25 percent, to have a buy-in and that gives them 2 years to say you either make it or you break it, and if the money goes away then the program goes away. Mr. Hawke said the division does not yet know exactly where the $3.2 million will be used, but can provide information to the subcommittee on how grant funding was used in the last biennium. Mr. Spitler interjected and asked Mr. Hawke to provide the subcommittee with a plan on how the division will expend the $3.2 million for 1 year and/or for 2 years. He said it is critical for the agencies that anticipate the receipt of federal grant revenue to know they may not be receiving the funding after all. Ms. Evans replied the division has not received all of the drug court applications since the deadline for submitting them is April 21, 1995. Mr. Spitler asked who would make the decision to expend the $3.2 million for 1 year or 2 years. Ms. Evans said the department made the decision to use the $3.2 million for 2 years instead of for 1 year. Mr. Spitler again requested the division to provide the subcommittee with a budget reflecting planned expenditures for a 2-year period for the $3.2 million. He stated the budget should include individual projects for the local entities that included anticipated revenue in their budgets. Senator Mathews suggested the division work with the Fiscal Analysis Division to develop their budget in order to provide the committees with a clear understanding of required expenditures. Traffic Safety - Page 1803 Marlen Schultz, Highway Safety Coordinator, Traffic Safety Division, Department of Motor Vehicles and Public Safety said she would respond to any questions the subcommittee members have regarding the budget account. Mr. Marvel noted the projected budget for Fiscal Year 1996 - 1997 incorrectly includes a grant carry forward in Fiscal Year 1996 - 1997 which is budgeted to be used in Fiscal Year 1995 - 1996. He said this will decrease the budget by $305,018 in Fiscal Year 1996 - 1997. Ms. Schultz stated the division discussed the error with the Budget Division, and documentation has been made to reflect the expenditure for Fiscal Year 1995 - 1996 only. She said the Budget Division will make the adjustment to the budget account. Ms. Giunchigliani referred to the line item Aid to State Agencies shown in the budget summary and asked for an explanation regarding the expenditures reflected. She also asked which state agencies receive aid from the account. Ms. Schultz said the amount the agency requested and Governor recommends of $663,329 will be reduced to $480,000 in the second year of the biennium. She further remarked the majority of the division's programs are grant funded with the exception of operational expenses to maintain the Traffic Safety Division. Offices such as the Nevada Highway Patrol Division and health and welfare divisions within the Department of Human Resources are eligible to receive aid. Ms. Schultz pointed out some of the funding goes to support training efforts for state employees in new technologies for life-saving techniques. Funding is also used to support client services as well. Referring to Ms. Schultz' comment that welfare offices are aid recipients, Mr. Hawke qualified the aid provided is for citizens of the state for items such as automobile safety seats for children. Ms. Giunchigliani asked how the division discourages individuals from driving while under the influence of alcohol. Ms. Schultz replied the highway patrol has successfully used sobriety checkpoints in combination with public information to provide enforcement and education. She stated this has reduced alcohol related fatalities from 53 percent to 39 percent. Ms. Giunchigliani commented she does not agree with the program since only two or three drunk drivers out of thousands are actually apprehended. She asked why the division has not considered using funds for taxicab companies to drive individuals to destination points. Ms. Schultz replied the agency cannot work with private organizations or businesses. As mandated by the federal government, the agency can only operate grant programs through other governmental agencies. Ms. Giunchigliani asked for a list of grants funded by the account and the grant applications that have come into the agency. She also asked, "Is there a better way to use the dollars that are going out or being requested, especially to the state agencies? If local government is doing it, why does the state have to be in the business." Highway Safety Plan and Administration - Page 1805 Mr. Hawke said the Traffic Safety Division promotes traffic safety activities including the development and revision of an annual traffic safety plan based on an evaluation of the state's highway traffic safety problems. He pointed out the budget for the staff of the Traffic Safety Division is included in this account. Mr. Marvel noted the federal grant which funds this account was over-budgeted by $305,018 in Fiscal Year 1996 - 1997. Debbra J. King, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated if the Traffic Safety budget account on page 1803 is over funded in Fiscal Year 1996 - 1997 by $305,018, this would decrease all of the grants that are to be distributed or the revenue available. She said an adjustment has to be made because according to a schedule of grant allocations she reviewed, the agency has $480,000 available for grants to states for Fiscal Year 1996 - 1997. However, the Highway Safety Plan and Administration budget account will receive $464,000 from the Traffic Safety budget account and another $17,000 or $18,000 will go to the Peace Officers Standards and Training Program (POST) totaling $482,000 before any other state grant programs are reviewed. Ms. Schultz said when the division authorizes a grant, the receiving agency develops their objectives and expends funds accordingly. The receiving agency then submits reimbursement requests to the division. Under some circumstances objectives tied to funding amounts are not executed which results in a percentage of funding allocated to be returned to the agency for redistribution in the next funding year. She commented the amount returned each year is usually about $230,000. Ms. Schultz admitted this does not always happen, so the division cannot rely on the returned revenue for redistribution to another agency under another grant cycle. Mr. Hawke confirmed the division places the returned revenue in reserve to be used for grant allocations in the next grant-year cycle. He clarified the account is not actually a reserve account because the funds are pledged or made available to local governments. Mr. Hawke said although the returned revenue comes in each year, the amount varies. Mr. Spitler remarked the division is carrying a reserve and it is not reflected in the agency's budget. Mr. Hawke disagreed stating the revenue is unexpended funds, and the division has no way of knowing the amount until each grant is closed. Mr. Spitler said if revenue is allocated to an agency and it is not used after all, the funds have to be placed somewhere in the division's budget. He stated it is imperative for the subcommittee to know the amount of revenue returned by agencies. He reiterated, "You are creating a reserve that is not reflected in your budget and you are drawing down off of something. You are creating a slush fund." Mr. Hawke stated the division does grant or obligate the full amount of revenue available to local governments, and does not withhold a portion of the funds to be used at a later date. He said a "balance forward" could be reflected in the revenue portion of the agency's budget. Ms. Schultz said the federal government performs yearly audits of the division's account and are concerned about the amount of funding not used. They have advised the division to be aggressive about taking the unspent revenue back before the grant- year cycle is over. Mr. Spitler asked the division to provide the subcommittee with the amount of returned revenue for 1994. He also requested the division meet with the Fiscal Analysis Division to review the entire procedure concerning unspent grant revenue. Mr. Fettic commented, "As a lay person, as a freshman legislator, this almost sounds like a shell game. I am glad you are going to work with the Fiscal Analysis Division to review what you are doing." Senator O'Donnell stated federal grant funding is encumbered revenue. If not spent, the division still must place it in an encumbered account to be used should the agency desire to expend the revenue before the end of the grant-year cycle. If the revenue is not used, it should be reverted back to the federal government since the funds do not belong to the state. He stressed the returned revenue should not be placed in a reserve or slush-fund account within the division. Mr. Pinkerton qualified the subcommittee should be aware there is a federal requirement that if an agency holds federal grant revenue for a long period of time, interest has to be paid on the funds to the federal government. Senator Jacobsen asked if federal grant funding is provided to schools within the state. Ms. Schultz said the division occasionally works with the school districts for such things as school bus safety and outreach programs within the schools. She stated the division has also gone into the middle schools to train students and teachers regarding bicycle safety. Mr. Hawke added the division also works with local government to assist them with safety programs within the school districts. Senator Jacobsen expressed surprise the school system has not been utilized for traffic safety programs since they are an educational process. He said obtaining a driver's license could be accomplished through a course taught in the schools, although the license itself would have to be issued by the DMV&PS. Ms. Schultz said driver's education was a priority by the federal government 10 years ago, but is no longer a priority after studies proved the program to be ineffective. As a consequence, the federal government directed the states not to fund driver's education. Bicycle Safety Program - Page 1809 Mr. Hawke stated at the direction of the 1991 Legislature, the Traffic Safety Division plans and administers a program of safety education which includes safety information concerning interaction among motor vehicles, bicycles and pedestrians. The program is funded through a 50 cent fee charged on every new or renewed drivers license, including motorcycle drivers' licenses. Sixty-five percent of the funds collected support the motor vehicle recovery and transportation planner in the Department of Transportation, and 35 percent of the collections fund the drivers' education and safety officer in the account. Mr. Hawke stated the division focuses their training efforts on individuals that are most at risk based on statistical data collected. Senator O'Donnell referred to the personnel expenses portion of the Base Budget reflecting the operating costs for one employee of the Bicycle Safety Program. He asked what the individual does to warrant the Agency Requested and Governor Recommends amount of $48,000 for Fiscal Year 1995 - 1996 and Fiscal Year 1996 - 1997. Mr. Hawke referred the subcommittee to Exhibit C, Bicycle and Pedestrian Safety Report to Legislators, which contains an overview of the budget for the Bicycle Safety Program that includes information concerning the duties of the employee. Mr. Hawke said a great deal of the employee's time is involved with education programs for adults and children who walk, bicycle, and drive on Nevada's streets, Ms. Schultz said informational material and videos used in the school districts for safety educational purposes are purchased from grant revenue, and each teacher trained to conduct the safety curriculum is provided with a package valued at $500. Senator O'Donnell asked where the cost for educational packages is reflected in the budget. Ms. Schultz said the cost is not shown in the budget because the division has a special grant used for funding the cost of the packages. She said the division allocated a total of $60,000 to be used for various objectives including the educational packages used in the schools. Senator O'Donnell asked if the $60,000 is federal revenue allocated to this budget account, and Ms. Schultz replied in the affirmative. Senator O'Donnell asked if the division has authorization to receive private funds in the Bicycle Safety Program budget account. He explained the employee of the Bicycle Safety Program is funded through a 50 cent charge on drivers' licenses, but no additional revenue is included for other expenses. Senator O'Donnell remarked: You have an employee collecting a salary and trying to do a job with no funds. Either get her (the employee) funded or we are going to cancel the program. You need to make a case to me whether or not this is valid, whether or not you can get more money into the account by accepting private funds, or are you asking us to provide additional revenue because I see a federal grant that is gone. Senator O'Donnell asked if the division has the authority to accept donations from private industry, and Mr. Hawke replied they do have this authority. Senator O'Donnell stated the employee should spend time to acquire revenue from private sources. Mr. Spitler referred to decision module M-200 and noted a total of approximately $11,000 will be expended for one individual for training over the biennium. He questioned the extensive training being requested and recommended. He asked why the division has requested training for one staff member in Spanish composition at the university instead of conversational Spanish at the local community college. He said the one staff member in the program is not the individual that should receive Spanish lessons. He suggested the individuals delivering the program to children should be the ones that speak Spanish. Mr. Hawke said that is correct except the staff person also is a direct service provider working with groups that can only speak Spanish, and the division wanted to enhance the employee's ability to communicate with the groups. Mr. Spitler remarked: You are going to take a department or an agency down and I know these numbers are wrong....When you look to the last year of the biennium you are depleting almost all of the reserve...I do not know of any budget we have seen so far where we have devoted almost $12,000 for training one individual. I would ask that you go back and revisit the training requirement because I do not see where the public is getting the advantage of this. You are going to have to show me numbers for training one person. It seems outrageous to me that this amount of money from this budget would be devoted in this manner. Mr. Hawke stated the division would provide the subcommittee with the information requested. Mr. Spitler commented without performance indicators the subcommittee has no idea of the value of the Bicycle Safety Program. He said nothing is reflected in the budget to show how many children receive training, how many classrooms there are, and that the program is changing behavior relating to bicycle safety. He stated the division has not provided performance indicators or any documentation that the program should be funded again. Mr. Hawke stated the division has developed new performance indicators which they will provide to the subcommittee. Mr. Spitler reiterated the Bicycle Safety Program budget "does not look good" and there is nothing to support why it should continue. He suggested the division advise the subcommittee what was done with the revenue. He remarked he does not see how funding one staff person is getting the job done, and the budget account does not reflect what this individual is doing. In the interest of time, Senator Jacobsen suggested discussion should be curtailed on the Bicycle Safety Program budget account. He requested Mr. Hawke to provide the subcommittee with performance indicators. Ms. Giunchigliani believes the Bicycle Safety Program budget is misplaced. She feels the federal revenue for the program should be directly allocated to the State Department of Education then filtered to the school districts. She also believes funds allocated to the Motorcycle Safety Program budget account should go directly to the community colleges since many of them are already involved with the program. She stressed if there are mechanisms already in place, the state should not duplicate those efforts. Ms. Giunchigliani asked if the employee of the Bicycle Safety Program works with the policy board associated with the Department of Transportation, and Ms. Schultz responded she does. Ms. Giunchigliani said she is concerned because 65 percent of the budget account goes to the Department of Transportation, yet roads with bicycle paths are not being built and drivers are not being educated regarding bicycle safety. She stated the subcommittee needs to revisit both parts of the budget. Motorcycle Safety Program - Page 1813 Mr. Hawke testified the education of motorcycle riders was created by the Legislature in 1991 and is charged with providing courses of instruction relating to the development of proper habits and skills necessary for the safe operation of a motorcycle; furnishing instructions relating to the effects of alcohol and controlled substances on the operator of a motorcycle; and with the provision of instruction of the actual operation of a motorcycle. Funding is allotted from a fee of $6 imposed for each motorcycle registration or transfer. Mr. Hawke said the Motorcycle Safety Program is offered through the community college system. Mr. Marvel asked where the performance Indicators are for this budget account. Mr. Hawke said performance indicators will be furnished to the subcommittee. He pointed out the division regularly provides an annual report to the Legislature regarding the accomplishments of the motorcycle program, and distributed Exhibit D, a copy of the annual report dated January 5, 1995, to the subcommittee members. He said the annual report is prepared in detail and is very informative. In response to Mr. Marvel's question regarding the use of the reserve account, Mr. Hawke reported as revenue in the account builds from the $6 fee, the division wants to offer additional training in motorcycle safety. He stated if it is determined the fee can be lowered to $4, the division will consider doing so. Ms. Giunchigliani noted there is one staff member associated with the Motorcycle Safety Program, and the costs for total conferences, training registration and travel related to training the individual is $5,666 in Fiscal Year 1995 - 1996 and $4,431 in Fiscal Year 1996 - 1997. She echoed Mr. Spitler's comments that the amount allocated for training is too high since there is no justification for the excessive amount of training for one individual. Ms. Giunchigliani asked how many motorcycles have been purchased to date from the account, and Ms. Schultz responded approximately 25. Mr. Hawke pointed out most of the motorcycles were donated or loaned to the program by private motorcycle dealers. Ms. Giunchigliani asked for a breakout of the total number of motorcycles that were donated or loaned to the program, and the total number purchased by the division. She also asked for detailed information concerning a tractor/trailer unit which is being proposed for rural training sites. Ms. Giunchigliani asked that the requested information be provided to the subcommittee prior to an Interim Finance Committee (IFC) meeting scheduled for March 13, 1995. Referring to Ms. Giunchigliani's recommendation to close the budget accounts for bicycle and motorcycle safety, Senator O'Donnell suggested an alternative may be to combine the Bicycle Safety Program with the Motorcycle Safety Program and have only one program. Fire Marshal - Page 1819 Senator Jacobsen asked for a brief overview of the activities of the State Fire Marshal Division. Ray E. Blehm, Jr., State Fire Marshal, State Fire Marshal Division, Department of Motor Vehicles and Public Safety, testified that due to reorganization, the transition of the division into a new department and new management style of operation added some distractions to the program. However, he feels the office is operating smoothly at the present time. Mr. Blehm stated the division sets fire safety standards for equipment and appliances, licenses fire protection industries, and certifies service personnel. The division reviews plans for construction of new commercial buildings, schools and multiple family buildings. The division is currently in the process of turning over the plan review responsibility to local governments. The change of plan review authority from the division has already taken effect in Douglas County. Implicit in the assignment of the fire marshal's authority, Mr. Blehm remarked the division feels a certain level of oversight will be required in working with the program run by the local governments. The change of authority process is now being accomplished in Elko, Lyon, and Storey counties as well, Mr. Blehm said. Mr. Marvel noted the division anticipates the number of plans reviewed to increase to 445 in Fiscal Year 1995 - 1996, but revenue will continue at the Fiscal Year 1993 - 1994 funding level generated by 382 plan reviews. Since the division continues to project an increase in the number of plan reviews, he asked why the revenue projections have not been adjusted accordingly. Mr. Blehm stated according to statistics the division has maintained, the number of plan reviews have decreased by approximately three per month which will change the number of plan reviews projected in the budget account, but the value per plan has increased due to a boost in plan review fees during Fiscal Year 1994 - 1995. Mr. Marvel asked the division to correct the information pertaining to the number of plan reviews projected for Fiscal Year 1995 - 1996, and the revenue from fees for the same period. Mr. Close said since the division's projections are decreasing, would the new position of Deputy Fire Marshal shown in the enhancement portion of the budget be justified. Mr. Blehm replied the Deputy Fire Marshal position is not related to plan reviews. Mr. Close qualified it is the overall work of the program that must be considered. He explained if there is less work to be performed in the division, the position may not be justified. Mr. Blehm answered at the present time the division does not have less work. In fact, there is a 4-month backlog of reviews to be completed by a staff of four employees assigned specifically to plan reviews. The Deputy Fire Marshal would be utilized to conduct on site inspections, construction inspections, and fire protection licensing. Ms. Giunchigliani asked if the division inspects state or public buildings using alternative building methods such as solar heat or straw built. She also asked if existing codes permit the division to approve plans using alternative building sources. She explained some of the codes do not lend themselves to alternative construction due to fire issues. Mr. Hawke believes the codes have provisions for the different types of heating and power supplies. He stated he would have to look into the existing codes to be certain of his response. Ms. Giunchigliani asked why decision module E-425 does not include operating costs for a new Management Assistant position. Mr. Blehm replied the position will be involved with the implementation of a new Fire Incident Reporting System suggested by an audit performed by the Audit Division of the Legislative Counsel Bureau. The division did include operating expenses, but the Budget Division eliminated them. Mr. Pinkerton responded during budget negotiations, the division stated if they could acquire the position and funding for training, they would absorb the operating costs. Mr. Hawke said federal funds were granted to the division to purchase the equipment to operate the Fire Incident Reporting System which reduced the need for operating expenses. Mr. Spitler interjected since the division will require operating expenses to support the position, they should submit information to the subcommittee requesting the amount of operating expenses needed. Hazardous Materials Training Center - Page 1825 Mr. Blehm said the mission of the State Fire Marshal is to reduce the loss of life and property from fire and hazardous materials incidents statewide through field and centralized training, investigations, inspections, licensing, permitting, information programs, plan reviews and adoption of regulations designated to minimize injury and exposure of injury to the general public and the emergency responder. He stated the budget account deals with the basic fire fighting and hazardous materials training services available from the division, and includes a resource center containing a collection of various types of training materials the division uses on a loan basis with instructors in the field. Ms. Giunchigliani said the reserve category in the budget account has been reduced from $234,864 in Fiscal Year 1994 - 1995 to $23,114 in Fiscal Year 1996 - 1997, and asked for comments regarding the decline. Mr. Blehm responded the reserve has gone down from year to year over the last two bienniums. He explained the funding levels fluctuated at the Beatty Hazardous Materials Waste Disposal Site and the division's spending allocations have increased He expects the funding situation will get worse in the future because a good portion of the revenue comes from the Beatty Hazardous Waste Materials Disposal site which is programmed to cease operation in December 1997, or when the dump is full, whichever occurs first. Mr. Blehm commented he expects the funding to terminate in the second half of the biennium. Ms. Giunchigliani pointed out the agency requested amount reflected in the budget for Fiscal Year 1995 - 1996 is shown as $44,635 but the Governor recommends is $153,588 for the same period. For Fiscal Year 1996 - 1997, the agency requested $12,898 and the Governor recommends $31,663. She asked where the reserve was spent and why the division is spending down from $234,864 to $31,663. Mr. Blehm said during the 1991 session, the funding from the disposal site at Beatty was dramatically changed when the agency went into a budget shortfall and a hiring freeze went into place. Revenue still came in from the disposal site but the division could not fill additional positions which resulted in an accumulation of revenue of about $400,000. Since that time, the division not only filled additional positions, but were also able to keep the positions previously in place, and this action brought the reserve balance down. Mr. Blehm said since there is no reason to maintain a large reserve balance, the division has used the revenue to fund employee costs and other operating expenses provided in the budget. He remarked when the reserve balance is no longer sufficient to support employee costs, the division would have to go before the IFC to request additional funding. Mr. Pinkerton turned the subcommittee's attention to the Budget Summary and said the closure of the hazardous materials dump site at Beatty will have a serious impact on the revenue for the budget account, which he predicts will go broke unless another funding source can be located. Ms. Giunchigliani stated the subcommittee will have to revisit the Hazardous Material Training Center budget account to determine a future course of action. Mr. Blehm pointed out although revenue from fees collected for hazardous materials storage is starting to increase, he does not believe this will overcome the deficit the agency must recover in other areas. The division cannot fill positions they have needed for almost 4 years, he declared. Due to the shortage of time, Senator Jacobsen deferred discussion of the remaining four budget categories reflected in Exhibit A. Senator Jacobsen adjourned the meeting at 10:57 a.m. RESPECTFULLY SUBMITTED: Marion Entrekin, Committee Secretary APPROVED BY: Senator Lawrence E. Jacobsen, Chairman DATE: Assemblyman Larry D. Spitler, Chairman DATE: Assemblyman Thomas W. Fettic, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on Pub.Safety/Nat'l Res./Trans. March 7, 1995