MINUTES OF THE MEETING OF JOINT SUBCOMMITTEE ON GENERAL GOVERNMENT ASSEMBLY COMMITTEE ON WAYS AND MEANS AND SENATE COMMITTEE ON FINANCE Sixty-eighth Session March 29, 1995 The meeting of the joint subcommittee on General Government of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order at 8:10 a.m. on Wednesday, March 29, 1995, Chairman Christine R. Giunchigliani presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. ASSEMBLY COMMITTEE MEMBERS PRESENT: Ms. Chris Giunchigliani, Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Jan Evans Mr. Bob Price Ms. Sandra Tiffany SENATE COMMITTEE MEMBERS PRESENT: Senator Lawrence E. Jacobsen Senator William R. O'Donnell Senator Bernice Mathews STAFF MEMBERS PRESENT: Mark Stevens, Fiscal Analyst Robert A. Guernsey, Principal Deputy Fiscal Analyst Brian Burke, Program Analyst SUPREME COURT - PAGE 103 UNIFORM SYSTEM OF JUDICIAL RECORDS - PAGE 131 Chairman Giunchigliani asked Mr. Mello to address the portions of the Supreme Court budget dealing with additional staff positions in budget account M-210, the administrative assessment revenue project model, and the staffing formula for the new positions. Donald J. Mello, Director, Administrative Office of the Courts, indicated the request for additional personnel was based on the number of people it would take to manage the workload as opposed to head count. Regarding decision unit M-210, Mr. Mello stated it was absolutely necessary to have three additional attorneys for the central legal staff, one attorney for the clerk's office, one secretary for the Chief Justice and a management assistant for the clerk's office. Chairman Giunchigliani inquired what the caseload was and how much it would be reduced with the increase in personnel. Mr. Mello explained nearly 1,400 cases were filed each year, and it was projected to increase to 1,500 in the next couple of years. Any additional output from staff was the function of what justices were capable of keeping up with. As had been testified to in the past, they were pushing the limit of being able to process 1,100 cases per year. Chief Justice Steffen stated the nine-person central staff could no longer keep pace with their current workload. Such things as bar matters were greatly delayed because staff simply could not handle them. As a result, a request was made for additional people just to keep up with the increased filing. Chairman Giunchigliani commented the committee had received a memo dated March 27 (Exhibit C) which stated in part, "Presently, more than 200 routine cases are submitted to staff for processing, and approximately 40 are waiting submission. Central staff is submitting in excess of 20 cases a month," and continues, "its present goal is to process submitted cases within one year of their submission dates." When she asked if the additional staff would help to accomplish that goal, Mr. Mello responded yes. Chairman Giunchigliani questioned the need for an attorney in the clerk's office. Chief Justice Steffen indicated the clerk's office had greatly expanded its function. They handled approximately 75 to 100 motions per week, bar matters, the court calendar, petitions, plus preliminary screenings to determine whether the court had jurisdiction to proceed, and many of the functions of the clerk's office required legal analysis. When Chairman Giunchigliani asked how many attorneys the clerk's office had, Chief Justice Steffen responded three. In reference to decision unit M-220, Chairman Giunchigliani inquired if the intermediate appellate court was approved, would the two new justices go over to the appellate court. She also requested justification for the 16 additional positions. Mr. Mello explained any reduction in the Supreme Court would require enabling legislation. The budget did not address that matter because it was presumed the 1997 legislature would be called upon to fund the intermediate appellate court which probably would not become effective until July 1995 and would be outside the current budget period. With respect to the request for the two new justices, a revised schedule had been submitted beginning on page SC/1A-8 of the Responses to Questions from the Joint Subcommittee on General Government. The costs were revised downward to $698,676 in the first year of the biennium and $791,860 in the second year of the biennium as contrasted with $1.3 million in each year of the biennium as reflected in the Executive Budget. Commensurate with that, staff was reduced to the essential members for the justices' chambers, three secretaries for two justices, four law clerks, one staff attorney II for central legal staff, a staff attorney II for the clerk's office and a deputy clerk for the clerk's office. Chairman Giunchigliani stated new positions in the M-220 module had been reduced from 17 to 12, and Mr. Mello agreed. Chairman Giunchigliani inquired if there was a staffing ratio for justices. Mr. Mello replied for each justice there was a secretary, two law clerks, and the need for an additional floating secretary to cover in the absence of any of the seven regular secretaries. The request was kept at a bare minimum to facilitate the addition of two justices. Chairman Giunchigliani queried how many staff would be needed if the two additional justices were not approved. Mr. Mello stated those staffing needs would be reflected in decision unit M-210. Chief Justice Steffen pointed out there was a division of the court. In reference to the position paper provided to the committees, staff was asked to carefully review the cost projections with respect to the two additional justices and to provide the committees with a truly conservative estimate, which was $871,926. With the two additional justices, the staff attorney felt a supervising staff attorney and three staff attorneys were needed, which would be 15 positions as opposed to 12. Chief Justice Steffen called attention to a study which was provided to the legislature in 1990 and stated in part, "Only if a series of dubious assumptions are made can a case be made for expanding the court. Among these assumptions are that, contrary to all recent history, appellate filings in Nevada are going to level off or decline on a long-term basis, that the productivity of the court measured in terms of dispositions and opinions will continue at the same high pace and increase in direct proportion to the number of judges added, and that expanding the court by two justices will not fragment the decision-making process to the point that expected gains in productivity would be diluted or defeated. We are not willing to make any of these assumptions. For these reasons, the committee cannot recommend expansion of the Supreme Court as a response to the foreseeable circumstances in Nevada's appellate system." There was a question posed that asked, "If approved, will the two new justices and support personnel provide the Supreme Court with the ability to keep pace with the projected increase in case filings? Please describe the anticipated impact to the existing inventory of cases which have not been disposed." The response was, "Total cases disposed might approach 1,540 with a 7-justice court." That was assuming the current productivity of 220 cases per justice would increase. In other words, if you multiplied 7 justices times 220, the result would be 1,540. The letter from the three other justices suggested the chief justice would sit on panels only when there was a disqualification or when the court sat en banc. Since the Chief Justice currently would have the identical caseload of every other member of the court, the addition would be something much less than two justices because of the reduced caseload of the chief justice. The hearings en banc would double the caseload in many instances because if there was a conflict of opinion among the panels, there would need to be a hearing en banc. With all seven justices hearing a case, concurrence is greatly increased. Chief Justice Steffen noted the state of Washington determined sitting in panels actually increased rather than decreased caseload. They had nine justices and were seeking legislation to reduce the number to seven. If the Supreme Court in Nevada was expanded by two members, Chief Justice Steffen felt the cost would be substantially more than $700,000 and would result in only minor increases in productivity. He recited the following facts: Nebraska had 7 justices who disposed of 945 cases as of 1986 for an average of 135 cases per justice. Nevada had 5 justices who disposed of 854 cases for an average of 171 cases per justice. Montana had 7 justices who disposed of 374 cases for an average of 53 cases per justice. Maine had 7 justices who averaged less than 85 cases per justice. Mississippi disposed of 915 cases with 9 justices sitting in panels. Chief Justice Steffen stated a Supreme Court should deal with precedential matters and an intermediate court with adjudicating cases. A seven-justice court would be compounded by having both an intermediate appellate court and a court of last resort. Litigants would be appealing to an en banc court from a panel decision which they did not like. Mr. Allard asked if the intermediate appellate court would cost $1.6 million per year. Chief Justice Steffen remarked the figure had been reduced. Mr. Mello stated the cost was determined to be $1.2 million in the first year of the biennium and $1.1 million in the second year of the biennium. Mr. Allard inquired if two justices would cost in excess of $800,000. Chief Justice Steffen responded the conservative figure, not including renovation, was $871,926 per year, which amounted to approximately $200,000 to $300,000 more for the intermediate appellate court per year than increasing the current court by two justices. There were indications the intermediate appellate court would reduce the caseload by 40% to 50%. Mr. Allard asked if any headway had been made in reference to educating the public on the need for a constitutional change. Chief Justice Steffen remarked all the justices agreed it would not be wise to use excess peremptory challenge fees for that purpose. It was decided a committee should be formed to seek funds from private sources to be held in a blind trust so members of the court would not know who was making donations. The fund would provide the financial means to educate the public on the needs of the court. There was a misperception the court wanted the intermediate appellate court to lighten the workload, which was not the case. The workload could not be processed as it was. The intermediate appellate court would allow the citizens of the state to have timely justice and would enable the court to keep pace with the increased case filings. Mr. Allard inquired if the court would still be processing 1,100 cases per year. Chief Justice Steffen hoped it would be more than 1,100 cases because there was also a 1,200-case backlog which needed to be dealt with. He pointed out there was a recommendation that the appellate court should handle no more than 100 cases per judge. When the Supreme Court deals with 1,100 cases, the quality of the product diminishes. Mr. Allard queried whether each justice was hearing 220 cases. Chief Justice Steffen stated the actual figure was 1,370, which meant the caseload was 270 cases per justice. Mr. Allard remarked that if the Chief Justice accepted cases at the present rate and the caseload increased year by year, the plan would only work for one or two years, and then there would be a need for an appellate court again. Chief Justice Steffen agreed and pointed out the Chief Justice's role would decrease from the standpoint of case output. Mr. Allard asked if it was reasonable to assume an educated public would vote for a constitutional change. Chief Justice Steffen replied no and stated if the backlog continued, which it would not decrease with the addition of two justices, citizens would have to wait years to have their matters resolved. Mr. Allard stated if two justices were approved, the position to go forward with an appellate court would weaken because the public would feel the problem was solved when in actuality it was not. Chief Justice Steffen agreed but stated his colleagues took the position that it would actually help in the argument for an intermediate appellate court. Mrs. Evans commented the legislature supported the concept of an appellate court. She expressed concern how the appellate court would be perceived by the public in view of the request for two extra justices and a constitutional amendment. Chief Justice Steffen agreed with Mrs. Evans' concerns and stated his opposition to the two justices stemmed from the fact that each experiment indicated it was actually counterproductive. Chairman Giunchigliani inquired what the cost would be of the intermediate appellate court. Mr. Mello indicated the actual cost would be approximately $1.6 million in each year of the biennium. The previous net figures were the result of the transferal of some staff over to the intermediate appellate court. Chairman Giunchigliani asked where the $1.4 million figure came from. Mr. Mello replied the figure came from the Administrative Office of the Courts staff and was agreed upon by the majority members. When Chairman Giunchigliani queried if the figure included 2 justices and 12 staff positions as opposed to the 15 positions referred to by Chief Justice Steffen, Mr. Mello responded yes. Mr. Price suggested that instead of having five Supreme Court Justices sit in panels, the panel could be reduced to three and the provision eliminated of sitting en banc if the decision was not unanimous. He asked if the court could implement that kind of policy decision if made by the legislature and the Governor. Chief Justice Steffen commented a problem could arise with a decision of strong precedential value. Mr. Price remarked the case would appeal to the ninth district, which did not sit in panels of three, and it would be out of their hands. Chief Justice Steffen explained the Ninth Circuit Court of Appeal was an intermediate appellate court where panels did not work well. The United States Supreme Court did not sit in panels. Whenever there were conflicting decisions in circuit courts, they went to the United States Supreme Court. The three-judge letter cites no example of success with panels in courts of last resort, and Chief Justice Steffen submitted there were none. Mrs. Brower asked if a new building would be required for an intermediate appellate court. Chief Justice Steffen explained the cost projections assumed the intermediate appellate court would be housed in the Supreme Court building and could utilize the courtroom during the three weeks the Supreme Court was not hearing arguments. Mrs. Brower expressed concern about where the Supreme Court would be if it was not provided with two additional justices and the public did not vote for an intermediate appellate court. Chief Justice Steffen replied the Supreme Court would remain where they presently were in handling 1,100 cases per year. The addition of two justices would work out to something less than two because the chief justice working under the same caseload as the other four justices would only sit in the event of conflict in the panels and also on the en banc panels. If the voters did not support the intermediate appellate court in 1996, the court could then go to the seven- justice court, and it would be proven to the voters again of the real need for an intermediate appellate court. Ms. Tiffany inquired what the anticipated shortfall was. Mr. Mello responded the latest estimates for 1995 indicated the shortfall was approximately $614,000 and affected 5 different budgets. The shortfall in the Supreme Court was projected to be $347,000. Part of the material supplied to the committees included a plan to address the shortfall by allocating $177,198 from the judicial education budget, $71,000 from the retired judges duty budget, and $25,428 from the general fund for a total of $273,626. The difference between the projected shortfall and the total allocation would be made up in projected salary savings. Ms. Tiffany asked if funds could be pulled from the uniform system of judicial records. Mr. Mello replied those funds were completely encumbered for 1995 and into the future. The projects requiring payments included automation of the Supreme Court and others described in USJR/1-2 through 4 of the Responses to Questions from the Joint Subcommittee on General Government. To fund the projects would lead to a deficit of $33,000 in 1995, a deficit of $34,000 in 1996, and a deficit of $345 in 1997. Ms. Tiffany inquired what the reserves had been encumbered for. Mr. Mello explained the Supreme Court was paying over time to automate the court system on many courts, including the First Judicial District in the amount of $22,411 for Carson City, $8,600 for Storey County, $2,802 for the Virginia City Justice Court; the Second Judicial District in the amount of $50,000 for Washoe County District Court, $9,750 for the Reno Municipal Court, $9,750 for the Sparks Justice Court; the Fourth Judicial District Court in the amount of $32,000 for the Elko District Court and $7,115 for the Jackpot Justice Court; the Fifth Judicial District in the amount of $12,470 for Nye County. Chairman Giunchigliani stated the information was contained in the packet supplied to the committee members, but it still did not provide a picture of what the network looked like, what was paid for versus what was owed, or how the court automation would interface with other departments. Mr. Mello indicated Brian Doran, Court Administrator of the Sparks Municipal Court, had worked extensively with the Department of Motor Vehicles and Public Safety in developing the interface between the courts, the criminal history repository and the Department of Motor Vehicles (DMV). In the near future police officers will be able to issue citations on hand-held computers. The information will be entered once into the system both for the Department of Motor Vehicles and the courts. Each evening after the court closes, the court will update DMV records and the criminal history repository records. Chairman Giunchigliani asked when all courts would be automated. Mr. Mello stated he could not give a definite time period. There were changes in technology which improved automation. Mr. Mello estimated within the next three years all the courts would be automated, but whether that would be at the level everyone wanted, he could not answer. During the 1993-95 legislative session the Supreme Court was asked to prepare a five-year plan for automation. The legislative auditor also focused on automation and planned to issue a report. Rather than spending money to develop a plan, staff decided to wait for the audit report. When Chairman Giunchigliani inquired when the report would be issued, Mr. Mello responded sometime during the 1995-1997 legislative session. Ms. Tiffany asked 1) what was the total value of the automation system, 2) was the funding coming from the proper account numbers, and 3) should the encumbered amount go for the general fund now through the end of the fiscal year. Mr. Mello indicated the plan was to make a long-term commitment with the counties. Automation had been tried in the past in which the counties had no financial responsibility. The system did not have the manpower to be implemented quickly, and people became disgruntled and refused to use it. Every county at the present time in the state has a financial stake in the automation systems in that they are required to come up with the money first, which in almost all instances they have borrowed, and the Administrative Office of the Courts has promised to reimburse them for their cost. The contract states, however, that if the legislature discontinues the funding source, it would then become the counties' responsibility. The Supreme Court had entered into contracts to complete its automation, and projects would terminate if the funds encumbered to pay for the projects were withdrawn. Ms. Tiffany stated if the counties were able to provide their own funding, they should be required to do so. Mr. Mello pointed out the counties were not providing funding. Ms. Tiffany stressed the counties had to provide the funding in advance. Mr. Mello explained the counties needed to come up with the money for 30 days, and then they were reimbursed. If the counties refused to cooperate in making the systems work, funding could be withheld, which provided an incentive for a commitment on their part. There were problems with some counties providing money to the courts for the purpose of automation. The data processing department in one county would not assist the district court in automation, and the judge requested funds for staff to assist with the automation. Mr. Mello feels the audit report will indicate a strong need for a higher level of cooperation. There also needs to be more communication among the personnel for the county, the district courts, the justice courts, and the state. Chairman Giunchigliani inquired if $545,452 will be expended by the end of 1995. Mr. Mello stated those funds will be expended during the course of the year. Chairman Giunchigliani asked if Mr. Mello was saying there really was not a plan for the automation, that they were waiting for the audit report to indicate how the money should be spent, and maybe it should not be spent on what was requested. Mr. Mello insisted that was not true. He explained funding had been provided to the courts for equipment that could be supported locally, which was not done with the first effort. The courts were also provided with case management software and word processing software. One of the issues in the audit report will address connectivity of systems. Chairman Giunchigliani emphasized these issues would be revisited if the legislature was being asked to fund automation for local governments which did not interface with the state system. Senator Jacobsen commented he and Senator O'Donnell were delegated to review the audit. He read a portion of the audit as follows: "Significant and widespread management control weaknesses exist within the Nevada court system. Because of poor financial and administrative practices at many of the courts, millions of dollars in state fines and assessments have gone uncollected." Senator Jacobsen indicated nearly $16 million in bad debts were uncollectible and only 60% of the Highway Patrol fines were collected. He asked if adding two more justices would increase uncollectibles. He stated the courts needed the authority to seize property or do whatever was necessary to collect the debts. Chief Justice Steffen noted many of the people who were asked to pay fines were incarcerated, and the intent was not to make the district court judges into collectors of fines. A report had been received from the Attorney General's office which made a suggestion that the courts cannot rush to implement a state collection system and a number of factors must be considered before doing so. Inmates develop accounts while in prison, and Chief Justice Steffen did not see why collections could not be made from prison accounts. He pledged his support in cooperation with the lower courts to consider ways to deal with the collection issue so the courts could more effectively collect the debts. Senator Jacobsen remarked at the lower court level involving a fine, the judge could hold a driver's license until the fine was paid. Chairman Giunchigliani called for public testimony regarding the Supreme Court. There being none, Chairman Giunchigliani closed the hearing on the Supreme Court and the Uniform System of Judicial Records and opened the hearing on the Board of Pardons Commissioners. BOARD OF PARDONS COMMISSIONERS - PAGE 111 Chairman Giunchigliani asked Mr. Mello to address briefly S.B. 16 (Refer to the Senate Committee on Finance) and its relation to the Board of Pardons Commissioners. Mr. Mello explained S.B. 16 would eliminate the equalizing provision in the statute where every two years each justice would be assured the same salary. The budget request for salary increases was $107,600 for the Supreme Court justices and $100,000 for the district courts. Chairman Giunchigliani inquired if the court was going to request an amendment which would allow the Board of Pardons Commissioners authority to change the salaries midterm. Chief Justice Steffen stated it had not been determined to request an amendment because of the division of opinion among the court. The question was whether constitutionally the court can equalize the salaries by providing pay through the Board of Pardons Commissioners. Chairman Giunchigliani asked if there was a strategy planned to put the equalizing provision back on the ballot. Chief Justice Steffen remarked it was unfortunate that some justices with the same caseload would be paid more than others. The court was going to be hard pressed to come up with some mechanism for equalizing salaries that would not be inconsistent with the vote on the matter. Senator Mathews remarked she knew when running for office the salary was $7,800 per session. She disagreed with the portion of the budget that allowed equalizing of salaries midterm. The provision contradicted the constitution and the wishes of the voters. Those applying for the job know the salary. If they do not agree with it, they should let others apply. Chairman Giunchigliani asked if there was a plan to bring the salary question back to the ballot. Chief Justice Steffen felt that should be done, but the court had not discussed the issue. Chairman Giunchigliani called for public testimony regarding the Board of Pardons Commissioners. There being none, Chairman Giunchigliani closed the hearing on The Board of Pardons Commissioners and opened the hearing on the Retired Justice Duty Fund. RETIRED JUSTICE DUTY FUND - PAGE 113 Chairman Giunchigliani asked what the balance of the unused administrative assessment revenue was expected to be since it appeared all nine districts were not going to spend their entire allocations. Mr. Mello responded $71,000. Chairman Giunchigliani inquired if that amount could be returned. Mr. Mello stated the money would carry forward unless the legislature amended legislation to call for the transferal of the funds to the Supreme Court to satisfy the shortfall. Chairman Giunchigliani questioned whether the Administrative Office of the Courts had drafted such legislation. Mr. Mello indicated Attachment C to Responses to Questions from the Joint Subcommittee on General Government was the proposed amendment. Chairman Giunchigliani asked if there were any questions from the joint subcommittee regarding the Retired Justice Duty Fund. There being none, Chairman Giunchigliani closed the hearing on the Retired Justice Duty Fund and opened the hearing on the Supreme Court Justices' and Widows' Pensions. SUPREME COURT JUSTICES' AND WIDOWS' PENSIONS - PAGE 115 Chairman Giunchigliani inquired whether the cost-of-living increase would require a statute revision. Mr. Mello responded yes. The judicial widows received a fixed amount, whereas widows under the Public Employees' Retirement System were eligible for a cost-of-living increase after being on the pension roll for three years. There was some indication from the Senate Committee on Finance the same provision should be extended to judicial widows. Chairman Giunchigliani asked if such a statute revision was being drafted. Mr. Mello indicated he would present such a draft to the joint subcommittee. Chairman Giunchigliani asked if there were any questions from the joint subcommittee regarding the Supreme Court Justices' and Widows' Pensions. There being none, Chairman Giunchigliani closed the hearing on the Supreme Court Justices' and Widows' Pensions and opened the hearing on the Law Library. LAW LIBRARY - PAGE 117 Chairman Giunchigliani inquired if an adjustment needed to be made for the removal of the student position and the granting of a half-time position to make one full-time position. Susan A. Southwick, Law Librarian, Supreme Court Law Library, responded that was correct. She had intended to upgrade a position to a library assistant I, which resulted in the removal of the student position. Chairman Giunchigliani asked if there were any questions from the joint subcommittee regarding the Law Library. There being none, Chairman Giunchigliani closed the hearing on the Law Library and opened the hearing on the Administrative Office of the Courts. ADMINISTRATIVE OFFICE OF THE COURTS - PAGE 123 Chairman Giunchigliani requested Mr. Mello to address the audit issues regarding fine collections, strengthening the courts authority to collect fines, and the need for general fund money being in the Administrative Office of the Courts. Mr. Mello referred the answer to Brian E. Doran, Court Administrator, Sparks Municipal Court, as the collection of fines was a local issue. Mr. Doran explained a warrant is issued when a fine has not been collected in hopes the person will be pulled over and brought into court. The city of Sparks had a bad experience with a collection agency over the collection of sewer bills. Most collection agencies charged a fee of 20% to 50% of the bill, and the city had not been willing to pay that in the past. Now that their budget is tight, they are considering another collection agency to work with the court in pursuance of the contract. Chairman Giunchigliani asked if an amnesty period had been considered. Mr. Doran explained there had been a couple of amnesty programs nationwide, and the Sparks Municipal Court had explored that possibility. Most of the outstanding warrants were either not correct or were outside the jurisdiction of the court where advertisement of an amnesty program by the local media would not be worthwhile. Chairman Giunchigliani inquired if wages could be garnished to satisfy the collection of fines. Mr. Doran stated he thought criminal violations needed to be converted to a civil violation in order to garnish wages. The issue of liens against property had been explored with collection agencies. Chairman Giunchigliani queried if the practice of revoking drivers' licenses had been used until the fines were paid. Mr. Doran stated the Sparks Municipal Court had three marshals who physically went after people owing fines. A major problem was many of the people did not have the money to pay the fines. For those people a payment schedule was set up so a portion of the fine was paid every two weeks. People cannot be jailed for not making payments. The alternative is community service work, which doubled in 1994 from 10,000 hours to 21,000 hours, at the rate of $10 per hour. Chairman Giunchigliani asked if people were required to reimburse the dollar amount back to the court. Mr. Doran indicated a fee was collected in advance for the SIIS premium, and a person would be required to work 10 hours on a $100 fine. Senator Jacobsen asked if it was possible to charge someone with contempt of court for failure to pay a fine. Mr. Doran explained if a Sparks Municipal Court judge imposed a fine, the defendant would work with the marshal on a payment schedule or would discuss with the judge other ways to pay the fine if he was indigent. If the defendant did not comply with the payment program, a warrant was issued. Mr. Mello explained a contempt of court charge required a hearing. One of the issues to focus on was the willingness of local government to place the collection of fines as a priority. The courts placed fines as a higher priority by asking for reports. If accounts receivable increased, courts wanted to know why that occurred. The courts can present the data, but if there is no mechanism to hire people to track defendants, the money will not be collected. The manpower in the local courts is not available to do that without budgeting authority on the local level, and the local courts are not willing to act as collectors for money that goes to the state. Ms. Tiffany stated she had asked Gary Crews, Legislative Auditor, to prepare a document (Exhibit D) from which she could direct specific structural questions to the Supreme Court. She requested Mr. Mello to address whether or not the Supreme Court had done anything about the separation of duties in reference to establishing financial and administrative control standards for state courts as far as collection of payments, preparing receipts, recording payments, depositing money, and preparation of bank reconciliations and financial reports. Mr. Mello explained those were internal control items which minimized the opportunity for theft or misplacement of funds. Other states which faced similar issues had been contacted. The states of Arizona and Nevada as well as the National Center of State Courts had very good internal control check lists. Ms. Tiffany read from Mr. Crews' letter as follows: "Separation of duties could be improved by redistribution of the workload among existing employees so that no one employee performs all duties related to the revenue process." Mr. Mello remarked he did not know how that would be done in a court with one clerk. Chief Justice Steffen stated it was assumed the Supreme Court had the authority to mandate the changes referenced by Ms. Tiffany, but the members of the Supreme Court were not convinced of that authority. Many district courts did not feel the Supreme Court could tell them how to structure their collection efforts. Ms. Tiffany asked if Chief Justice Steffen was saying the Administrative Office of the Courts did not have administrative oversight of the lower courts. Chief Justice Steffen responded he was not saying the Supreme Court did not have oversight from the standpoint that it can collect data and does collect data. Chief Justice Steffen said Ms. Tiffany was talking about forcing or dictating to the lower courts, which was a different issue. If the lower courts were agreeable to a proposal, there would not be a problem. But if they were not agreeable, the Supreme Court might not persuade them to alter their methods. Ms. Tiffany inquired if a bill was needed in order to track internal control. Chief Justice Steffen replied a bill would not be helpful as far as the constitution was concerned. Some would say a constitutional amendment would be needed to make it clear that the Chief Justice along with the consent of the majority of the court was the administrative head of the entire court system, and there was a division among the membership of the Supreme Court regarding that issue. Chairman Giunchigliani inquired when a response to the audit would be made. Mr. Mello stated the required response had already been made. Chairman Giunchigliani asked if a formal recommendation had been made to the legislative body to move toward a constitutional amendment for a uniform court system. Chief Justice Steffen replied not in a meaningful way. He indicated the Judicial Assessment Commission report recommended a uniform court system. It would be a salutary gesture for the court system to do so. Part of the problem was a lack of concentration on the collection issue because of the caseload. Chairman Giunchigliani asked if the Administrative Office of the Courts agreed with the new revenue projections developed by the fiscal analysis division staff. Mr. Mello agreed with the projections. He pointed out there was proposed legislation to change the administrative assessment fee. A problem was created when the previous legislature allowed the supervision of defendants by the courts without an administrative assessment fee. The Judicial Council of the State of Nevada proposed the application of an administrative assessment fee on any fine which had been suspended or vacated. Mr. Mello proposed a flat $25 assessment on fines which had been suspended or vacated in lieu of community service. The proposed legislation would also address the problem created by allowing local governments to decriminalize traffic, resulting in the loss of the administrative assessment statute. If the legislation passed, an assessment could be applied because the matter would be heard in court. Chairman Giunchigliani inquired if the administrative assessment fund was sufficient enough to preclude the use of general fund money. Mr. Mello responded that if the revised projections were accurate, general fund money would not be needed. Chairman Giunchigliani called for further questions regarding the Administrative Office of the Courts. There being none, Chairman Giunchigliani closed the hearing on the Administrative Office of the Courts and opened the hearing on the Division of Planning & Analysis. DIVISION OF PLANNING & ANALYSIS - PAGE 129 Chairman Giunchigliani complimented Mr. Mello on providing the joint subcommittee with background information regarding how Court Improvement and Planning Analysis would be phased together. Mr. Mello indicated it made sense to merge the two divisions to give the Division of Planning & Analysis a project from the start and to pay for a portion of the division with federal funds. Along with the administrative assessment revision was the recommendation that the reallocation of funds reduce the retired justice duty funds from 3.5% to 2.5% and apply 1% to the Planning and Analysis Division. When the federal money ran out, there would be a need for a general fund allocation. When Chairman Giunchigliani asked if Mr. Mello was comfortable that the type of report he was looking for could be provided, Mr. Mello responded yes. Ms. Tiffany inquired if the entire court structure was included in the planning and analysis, and Mr. Mello replied yes. Ms. Tiffany asked why the legislature was analyzing something over which it had no authority. Mr. Mello made the illustration that if $2,000 worth of effort being placed in every court was not shared, the result would be $186,000 worth of effort was going to waste. Some things needed to be centralized. A lot of effort was put into grant requests, which many of the lower courts did not have the time nor the expertise to do. Ms. Tiffany queried why courts were being helped if they were not cooperating. Mr. Mello remarked their cooperation was on the horizon. Chairman Giunchigliani inquired if the current deputy administrator could oversee the new unit. Mr. Mello replied the current deputy administrator's effort would be spread too thin. The intention was to also merge the responsibilities of the judicial education employees to the new administrator. The division, along with the judicial education employees, would serve as liaisons of the Supreme Court to the lower courts and the local governments. The current deputy director worked with financial issues. A new division with an additional chief was needed, but if it was not appropriate to request a deputy director, some other elevated supervisory position was needed. Mr. Mello offered to provide the joint subcommittee with a revised organizational chart. Mrs. Evans stated one of the goals of the new division was to seek additional funding through grants and asked if there would be sufficient time to perform that function. Mr. Mello indicated that was one of the major requests from the lower courts because they did not have the manpower and expertise to pursue grants. Presently on staff was a person with extensive experience in grant writing. Chairman Giunchigliani called for further questions regarding the Division of Planning & Analysis. There being none, Chairman Giunchigliani closed the hearing on the Division of Planning & Analysis and opened the hearing on the District Judges' Salary. DISTRICT JUDGES' SALARY - PAGE 133 Nancy A. Becker, District Court Judge, provided a summary of her testimony (Exhibit E) and stated the Supreme Court and the Administrative Office of the Courts do not know how the lower courts operate on a day-to-day basis. If the legislature passed a statute which provided that every criminal fine automatically became a civil judgment, it could be filed in the judgment rules thereby making it easier for collection agencies because it could automatically become a lien against property. Drivers' licenses cannot be taken without statutory authority, but people can be held in contempt of court with a hearing. There were suggestions the Supreme Court could provide information to the lower courts who do not have management analysts or support people. Judge Becker summarized issues regarding Nevada Highway Patrol citations. She stated in discussions with city and district attorneys it was agreed that citations which say bail forfeiture are bail forfeiture and stay within the county, but there was more than one interpretation of the statute. Clarification could be made by amending the statute. NRS 484.803 was passed for the purpose of creating revenue in the municipal courts out of Highway Patrol citations. That statute would also need to be amended so municipal courts would no longer have jurisdiction over Highway Patrol citations. The citations would go to the justice court, and all the money would go into the state fund. Judge Becker felt the lower courts provided a great deal of cooperation. A problem was created in cities which did not have the personnel to dedicate to the type of analysis being requested. In a uniform court system, all the money comes from the state. In a hybrid system where the Supreme Court has more authority to designate standard auditing procedure, problems will arise because the local courts provide funding and personnel to meet the standards. The auditor made some assumptions regarding district courts by saying the fines assessed minus the fines collected equal collectibles, but there were a lot of variables regarding fines. There are those people who pay their fines, and those who do not and are put in jail, which is not always cost effective. Chairman Giunchigliani inquired how many district court judges were being requested. Michael E. Fondi, District Court Judge, stated Clark County requested six judges, but there was no unanimity of agreement on the number of family court judges needed. The Clark County Board of County Commissioners was unwilling to approve any new family court judges. Washoe County requested one family court judge. Judge McGee, who was unable to be at the hearing, had the consensus of the prior county commission on the need for one additional family court judge, and it was his intention to address the present county commission regarding the request. Assemblyman Humke was prepared to introduce a bill to add one family court judge as of January 1997. The request would be six judges for Clark County and one judge for Washoe County. Chairman Giunchigliani inquired about the County of Ponderosa issue. Mr. Mello responded Ponderosa was added to his response because there was no appropriation in the bill for a position. Ms. Tiffany asked if Judge Becker had any sensitivity to what the Supreme Court went through regarding accountability and yet was not being supported by the lower courts. Judge Becker responded she did have sensitivity regarding the Supreme Court. She explained the lower courts had not been asked to participate previously in budget hearings and were not aware of many issues. Local budgets were taken care of by local jurisdictions. Judge Becker stated she became aware for the first time during budget hearings that the Supreme Court lacked the understanding and knowledge to answer the legislators' questions, which was why she prepared a response to the audit report. There was a need for better communication and better systems. The lower courts were fairly responsible, but problems arose because of funding issues. Ms. Tiffany asked how Mr. Mello could be held accountable if he was not receiving the necessary information. Judge Becker stated the Administrative Office of the Courts was provided with information. The problem was confusing regarding the Administrative Office of the Courts' role in the past, which was why Judge Becker responded to the audit report. Mr. Mello indicated there was a statute which stated whatever the court administrator requests of a judge or a clerk shall be provided. There had been instances where the response was, "I don't have the time," or "I don't have the manpower, and there's nothing you can do about it." Judge Becker asked if Mr. Mello was willing to add that such responses were not from the district courts, and Mr. Mello agreed. Chairman Giunchigliani inquired if local governments were committed to support the addition of new judges. Mr. Mello stated Washoe County was committed to support the addition of a new judge as of January 1997. Chairman Giunchigliani remarked Clark County Commissioners needed to deal with that issue, and Mr. Mello agreed. Chairman Giunchigliani requested Judge Becker to address the salary issue. Judge Becker responded the Supreme Court justices were 39th in the nation and the district court judges were 36th in the nation in terms of salaries. Nevada had the highest rates in the nation per judge in terms of caseloads. The issue was the difficulty of competing with the private sector to get people to take a full-time job where salary increases were every six years, and it was difficult to get a large number of people with the qualifications necessary to make major decisions for society. Senior attorneys and junior partners receive $100,000 per year in Clark County. When Chairman Giunchigliani asked if the rankings mentioned by Judge Becker included longevity pay, Judge Becker responded no. Mr. Allard commended Judge Becker for bringing information to the joint subcommittee. He asked how Judge Becker felt about using an outside collection agency to collect fees deemed uncollectible, and had the more cost-effective alternative of community service or house arrest been considered in lieu of incarceration. Judge Becker indicated other alternatives like day arrest were sought for felony prisoners, and work programs were used for misdemeanors. Because it was required that defendants pay for house arrest, if they were unable to pay the fine, they would be unable to pay for house arrest. Judge Fondi stated the reason for the deceleration of the courts' overall standing in terms of salaries was because other states addressed judicial salary issues on a periodic basis as opposed to every six years. BOARD OF LAW LIBRARY TRUSTEES - PAGE 137 Chairman Giunchigliani noted the only issue regarding the Board of Law Library Trustees was whether or not to modify legislation to use the Board of Law Library Trustees as a mechanism to circumvent salaries during the midterm. Mr. Mello replied that was correct. DISTRICT JUDGES TRAVEL - PAGE 139 Chairman Giunchigliani requested Mr. Mello to look at funding the fax machine used to dispense dispositions from the Uniform System of Judicial Records account, and Mr. Mello agreed to do so. Chairman Giunchigliani inquired if it would be possible to fund the Supreme Court travel with excess peremptory challenge fee revenue thereby reducing the burden on the state general fund appropriation. Mr. Mello stated he would have no objection to that. DISTRICT JUDGES' AND WIDOWS' PENSIONS - PAGE 141 Chairman Giunchigliani noted the Senate Finance Committee expressed interest in providing a cost-of-living increase to surviving widows and stated it was Mr. Mello's response a statutory change would be required. Mr. Mello agreed and said he would prepare legislation to that effect. Mrs. Evans inquired when the last increase was provided to surviving widows. Mr. Mello stated the date of the last increase to surviving widows was July 1991. JUDICIAL EDUCATION - PAGE 143 Chairman Giunchigliani noted there was $177,198 in unencumbered administrative assessment revenue in FY 1995 and stated Mr. Mello agreed to consider using the revenue to offset the supplemental appropriation request. Chairman Giunchigliani inquired if there was a budgeted amount for additional training for the new members of the judiciary. Mr. Mello responded yes and remarked it was the practice to retain a standing encumbrance in the event of death, retirement or a new position. COMMISSION ON RACIAL AND ECONOMIC BIAS - PAGE 147 Chairman Giunchigliani noted a state general fund appropriation in the amount of $222,500 was split equally between FY 1996 and FY 1997, and the task force intent was to report back in 1996 with a recommendation and a report. She inquired if funding was required up front to finish the rest of the year in order to provide the report and then react to it. Kevin M. Kelly, Chairman, Commission on Racial and Economic Bias, responded that would be a practical way of obtaining the empirical data the commission was trying to assess. Chairman Giunchigliani requested the rationale for the addition of a director and secretary. Mr. Kelly responded 26 states had similar on-going commissions, and each commission had a full-time executive director and secretary or administrative assistant involved with the day-to-day activities of data collection, coordination, public hearings, and public meetings. Chairman Giunchigliani asked if full general funding was not provided, what alternative funding would be used. Mr. Kelly indicated there were grants and matching funds available and potentially funds from the Community Reinvestment Act which required banks to put money back into the communities. Chairman Giunchigliani asked if the commission received general funds plus grant money, could they repay the general fund dollars based on a statutory provision to do so. Mr. Kelly answered he thought the commission could do that. COURT IMPROVEMENT PROGRAM - PAGE 149 Chairman Giunchigliani asked for questions from the joint subcommittee. There being none, Chairman Giunchigliani closed the hearing on the Court Improvement Program and opened the hearing on Judicial Selection. JUDICIAL SELECTION - PAGE 151 Mr. Mello noted there had been questions regarding the process by which new judges would be added, and he responded the courts could manage within the allocated funds, provided everything went according to plan. Chairman Giunchigliani called for public testimony. Freeman Johnson, a resident of Nevada for 52 years, stated he had listened to judges speak in court and at the legislature. Money was budgeted for judges and legislators. He asked why elected officials complained about the salary when they knew what it was when running for office. If they did not like their jobs, they should let someone else fill the vacancy. He asked why the raise for judicial salaries was not based on the cost of living, as it was in most labor contracts. Chairman Giunchigliani stated the joint subcommittee members would review the issue of salaries very carefully, and she thanked Mr. Freeman for sharing his thoughts. There being no further business, Chairman Giunchigliani adjourned the hearing at 11:05 a.m. RESPECTFULLY SUBMITTED: Jonnie Sue Hansen, Committee Secretary Joint Subcommittee on General Government Assembly Committee on Ways and Means and Senate Committee on Finance March 29, 1995 Page