MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session April 4, 1995 The joint meeting on General Government of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William R. O'Donnell, at 8:00 a.m., on Tuesday, April 4, 1995, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator William O'Donnell, Chairman Senator Lawrence E. Jacobsen ASSEMBLY COMMITTEE MEMBERS PRESENT: Ms. Sandra Tiffany, Chairman Ms. Chris Giunchigliani, Chairman Mrs. Jan Evans Mr. Dennis L. Allard Mrs. Maureen E. Brower Mr. Bob Price SENATE COMMITTEE MEMBERS ABSENT: Senator Bernice Mathews (Excused) STAFF MEMBERS PRESENT: Bob Guernsey, Principal Deputy Fiscal Analyst Mark Stevens, Fiscal Analyst Brian Burke, Program Analyst Debbra J. King, Program Analyst Pamela Jochim, Committee Secretary OTHERS PRESENT: Carol Jackson, Director, Department of Employment, Training and Rehabilitation Maynard Yasmer, Chief Financial Officer, Financial Management Section, Department of Employment, Training and Rehabilitation John Orr, Assistant Director, Department of Employment, Training and Rehabilitation Paula Steinbauer, Budget Analyst, Budget Division, Department of Administration Stanley P. Jones, Administrator, Employment Security Division, Department of Employment, Training and Rehabilitation Jim Hanna, Administrator, Division of Information Development and Processing, Department of Employment, Training and Rehabilitation David R. Thomas, Chief, Risk Management Division, Department of Administration Michelle Gamble, Program Assistant, Nevada Association of Counties Randall Waterman, Specialist, Insurance and Loss Prevention, Department of Administration Brian A. Nix, Senior Appeals Officer, Hearings Division, Department of Administration James W. Manning, Budget Analyst, Budget Division, Department of Administration State Occupational Information Coordinating Committee - Page 1381 State Job Training Office - Page 1387 Office of Equal Rights - Page 1395 Equal Employment Opportunity - Page 1401 Carol Jackson, Director, Department of Employment, Training and Rehabilitation (DETR), came forward and noted in a previous subcommittee meeting Assemblywomen Tiffany, Giunchigliani, and Evans asked her to research the possibility of moving the Job Opportunities and Basic Skills Training Program (JOBS) from the Welfare Division to the Department of Employment, Training and Rehabilitation. She indicated the department held a meeting yesterday with Charlotte Crawford, Acting Director, Department of Human Resources, and Myla Florence, Administrator, Welfare Division, to discuss the proposed transfer. Ms. Jackson distributed a memo (Exhibit C) detailing the additional staff and equipment requirements which the department would need if the transfer took place. All meeting participants agreed a study group should be formed to investigate the ramifications of such a move. If the study group recommends the transfer, then the program could be moved next legislative session. She pointed out federal welfare reforms may cause the training funds to be reduced or eliminated, and if this occurs, the department may need to request additional funding from the Legislature or the Interim Finance Committee (IFC). Ms. Giunchigliani stated she supports the transition period concept as long as steps are being taken to implement the transfer. Ms. Jackson said, if the transfer occurs, she would prefer that the JOBS be moved to the department level in order to provide program participants all the services offered by the department. Senator O'Donnell asked about the status of Nevada's federal funding. Ms. Jackson explained, Leo Penne, Director, Nevada State Office in Washington, D.C., Division of Economic Development, has informed her the State of Nevada will receive a welfare block grant and possibly a training block grant. In addition, Mr. Penne told her the federal welfare funds will mostly go toward supporting recipients, with a very small amount of funds left over for employment and training. If there is no funding for employment and training, the welfare funding will have a restriction requiring that a percentage of recipients be returned to work. She noted hearings on employment and training are scheduled in Washington, D.C. for April 7, 1995. Senator O'Donnell questioned what is occurring with the Job Training Partnership Act (JTPA). Ms. Jackson said the JTPA funding for summer youth programs and year- round programs may be rescinded. The department is waiting for a final decision from the federal government on the issue. Mrs. Evans commented she was informed the block grant may combine Aid to Families with Dependent Children (AFDC) benefits with training funds. Because of caps placed on AFDC funding and the state's growth, the state could face an $8 million shortfall in AFDC funding. She requested Ms. Jackson to continue providing the subcommittee with updates on the federal government's actions in this area. Ms. Jackson replied she will keep the committee abreast of any new information the department receives regarding the DETR and the Welfare Division. She noted Mr. Penne indicated there may not be any funding available for the Welfare Division's JOBS program. Ms. Jackson stated the department is requesting a supplemental appropriation in the amount of $82,000 due to a shortfall in the federal budget for the Equal Rights Commission. She indicated the supplemental appropriation will be treated as a loan to the commission. Senator O'Donnell commented the subcommittee members were not made aware of the supplemental request until this morning. He asked when the department became aware a correction needed to be made to the Equal Employment Opportunity budget. Ms. Jackson said the calculations were performed prior to the April 3, 1995 memo (Exhibit D) from John P. Comeaux, Director, Department of Administration. Maynard Yasmer, Chief Financial Officer, Financial Management Section, Department of Employment, Training and Rehabilitation, stated the changes which occurred with the Nevada Equal Rights Commission's 1995 contract with the federal government caused some of the budget miscalculations. The federal government has taken away the commission's ability to request a second 25 percent advance. The commission can request a 50 percent advance for October through March, but any services thereafter must be billed. Billings after March can only be submitted on April 8 and July 8 of each year. Mr. Yasmer said it is difficult to cover the costs for the contracted cases with only a 50 percent funding advance. Contracted case closures totaled 916 for the year, so the $229,000 received for the contracted cases covered only 458 cases. Senator O'Donnell inquired what will happen if the funds are not appropriated. Mr. Yasmer responded the agency will have to lay off staff if funds are not forthcoming. Senator O'Donnell asked what the agency's payroll totals. Mr. Yasmer replied the payroll is approximately $55,000. In addition, he indicated vendors would also not be paid if the appropriation is not granted. Ms. Jackson interjected the department has been concerned about the Nevada Equal Rights Commission's budget for several years. She related the department has previously requested on several occasions to combine the federal and state account, but the request has always been denied. She explained the account, as set up now, will always experience shortfalls because of the 50 percent draw requirement mandated by the federal government. Fifty percent of the employees' salaries are funded from the federal account and 50 percent are paid with state funds. She related this budget is the most difficult one the department oversees. Senator O'Donnell noted if staff are laid off, then the casework and closings will not be performed and the federal government will not reimburse the agency. Ms. Giunchigliani asked why the request to combine the federal and state accounts was denied. Mr. Yasmer explained a request was made to the IFC in 1994 to combine the accounts and the IFC approved the request; however, the Fiscal Analysis Division notified him the approval was only for Fiscal Year (FY) 1994 and the accounts would need to be separated at the end of the fiscal year. He related if the accounts are combined, then the cash from the state account can carry the cash flow burden for the slow incoming federal funds. Ms. Giunchigliani inquired about the reasoning behind the fiscal staff's interpretation of the IFC's action. Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the division made the determination because the 1993 Legislature approved separate accounts. The Fiscal Analysis Division mentioned to the agency the issue could be introduced again during the 1995 Legislature. He noted if the accounts are combined, then state funds will be utilized to cover cash flow problems caused by the federal government's payment schedule. In addition, if the agency does not complete the federal caseload, the agency will not receive federal reimbursement for the expended state funds. Senator O'Donnell asked when the agency became aware of the new contract requirements. Mr. Yasmer responded the contract was effective October 1, 1994. He said, at the time of the contract signing, the agency was confident the caseload production numbers could be maintained. Senator O'Donnell noted the committee was not informed of the shortfall until the committee meeting this morning. He stated the committee should have been informed about the problem as soon as it was discovered. Ms. Giunchigliani suggested the committee should consider merging the two accounts, but a system needs to be developed to identify the funding source. Ms. Jackson responded the department spoke with Brian Burke, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, and the Department of Administration, several weeks ago regarding the shortfall. Senator O'Donnell commented the fiscal staff was informed the budget had some problems, but was never notified of the exact nature of the problem. Ms. Jackson replied the amount of the shortfall was not known at that time and had to be calculated. Ms. Tiffany observed new performance indicators provided to the committee indicates current staff can close 1,845 cases per year, however, the performance indicators in the Executive Budget indicates current staff can close only 1,159 cases per year. Ms. Tiffany inquired if the new projected indicators are realistic. Ms. Jackson responded three new staff members are being requested and it is projected the new positions will close approximately 964 cases per year. She explained the Nevada Equal Rights Commission did not have performance standards in place when she became department director in October of 1993. In April of 1994, work performance standards were implemented requiring investigators to close a minimum of 15 cases per month. Investigators not complying with the closure rate will be evaluated and receive disciplinary action if necessary. She has explained to staff members if the minimum closure requirement is not met, then the agency will not be reimbursed by the federal government and staff jobs could be in jeopardy. Ms. Tiffany asked if Ms. Jackson is secure with the caseload closure performance indicators. Ms. Jackson said, "I believe that number is attainable." She indicated a case closure rate of 15 per month should not be difficult to obtain because some cases will not be "probable cause cases" and some will be withdrawn. Ms. Tiffany questioned if staff members are presently meeting the closure rate. Ms. Jackson responded the rate is currently being met by the investigators. Furthermore, she indicated the agency has individual statistics on each investigator for January, February, and March of 1995 and will provide the confidential data to the committee. Presently, there are three investigators not meeting the work performance standards. Ms. Tiffany suggested the commission should continue providing quarterly reports to the IFC in order to ascertain if performance indicators are being met. Ms. Jackson replied she is in agreement with the request. Senator O'Donnell inquired whether the commission could reach its closure goal with the addition of two positions instead of three. Ms. Jackson replied the commission requested the additional positions to work on the backlog of cases. She stressed the amount of time needed to process these cases is unknown because an evaluation of each case has not been done. She suggested the committee may want to write a letter to the commission's investigators reinforcing the importance of the monthly closure rates. Senator O'Donnell asked whether the federal government places a cap on the amount of funds the commission can receive for case closures. Ms. Jackson responded the federal government will only pay the commission for 916 closed cases per year. If the commission closes more than the designated amount, a request can be made for the additional funds, but the federal government will not always reimburse the commission for the additional case closures. Senator O'Donnell questioned if the closure rate for the requested three new positions will be below the federal cap amount. Ms. Jackson responded: It probably will be, but I think we are providing a service to the citizens of Nevada. I don't think it is so much the dollar amount that we are going to receive, it's just that we have cases that are 3 years old that people are waiting to receive answers on. Ms. Jackson noted the Executive Budget proposed loaning the commission $240,000 to help cover the federal account shortfall until the government can be billed on July 8, 1995 for the other half of the contracted cases. The loan will be repaid when the commission is reimbursed from the federal government. Senator O'Donnell inquired whether the commission will still need the $82,000 loan if the two accounts are merged. Mr. Yasmer responded the $82,000 will still be necessary to cover existing expenses. He referred the committee's attention to the budget recommendation on page 1403 of the Executive Budget regarding the $240,000 loan. Mr. Yasmer explained the $82,000 will be deducted from the $240,000 loan and placed in the FY 1995 as a cash advance. The commission will be obligated to remunerate half of the loan by the end of FY 1996 and completely reimburse the General Fund by the end of the next biennium. He said the loan proposal is an alternative to combining the two budgets. Senator O'Donnell asked if the three requested positions are included in the Executive Budget. Ms. Jackson said the positions are not included in the Executive Budget because the funding was originally to be provided by the federal government; however, the federal government has notified the commission they will not reimburse the commission for any additional cases. Mr. Allard inquired whether the commission is receiving a large number of frivolous cases. Ms. Jackson said the commission does receive frivolous cases due to lack of knowledge by the employee. The employee is advised at the intake conference whether the case has any merit. The intake conference was not implemented until 1994, so the older cases need to be reviewed in order to ascertain their merit. She stated the commission has started employer training sessions in order to try and resolve cases before they reach the commission. Mr. Allard suggested an indicator should be established on the number of frivolous cases filed. Ms. Jackson stated a performance indicator could be developed for this purpose. Ms. Giunchigliani asked how often has the commission met in the last 2 years. Ms. Jackson responded the commission has met approximately three to four times since April of 1994. Ms. Giunchigliani questioned if the commission hears equal rights complaints. Ms. Jackson replied the commission, in the future, will be hearing cases which are appealed. Ms. Giunchigliani inquired whether the commission members have received any type of training enabling them to hear cases. Ms. Jackson related the commission members were provided training through the attorney general's office on how to identify proper cases and what constitutes probable cause. Ms. Giunchigliani asked if an individual can omit filing at the state level and file an equal rights complaint directly with the federal government. John Orr, Assistant Director, Department of Employment, Training and Rehabilitation, stated a claimant must exhaust all administrative remedies before proceeding to court. The administrative remedy can be exhausted with the Nevada Equal Rights Commission (NERC) or at the federal level with the Equal Employment Opportunity Commission Board (EEOC). If the two parties do not agree to a settlement, NERC issues a right to sue letter which allows the parties the right to proceed to district court. Ms. Jackson mentioned some claimants file complaints with the federal EEOC and a right to sue letter is issued, but the EEOC failed to notify the NERC and the employer that a right to sue letter has been issued. Mrs. Evans suggested caseload performance indicators should be collected on each commission investigator. She commented the investigator's name could be coded to keep their identity private. Ms. Jackson agreed with Ms. Evan's suggestion. Senator O'Donnell stated he is hesitant to require this type of information from the commission. Ms. Jackson said she will discuss the request with the attorney general's office. Ms. Tiffany asked if the two accounts are merged, whether the agency would still require the three new positions, the $82,000, and the $240,000 loan. Mr. Yasmer said if the merger took place on July 1, 1995, the $82,000 would still be needed to cover expenses and payroll until June 30, 1995. The account merger will not resolve the need for the three additional staff members because the new staff are being requested to handle the backlog of cases. Mr. Yasmer stated if the two accounts are merged and production remains constant, then the account should be able to cover the federal government's share until the account is reimbursed. In order to make the process work successfully, production goals must be met. Ms. Tiffany questioned, "We don't need the $240,000 loan if we merge?" Ms. Jackson confirmed the loan would not be necessary if the accounts are merged. Mr. Yasmer interjected another solution to the problem might be to allow the commission to borrow up to 25 percent of the federal award. He suggested the two accounts could be merged and a loan could be taken out the last quarter of each year until July's billings are paid by the federal government. Ms. Tiffany proposed the letter regarding production rate goals should be addressed to Ms. Jackson instead of the individual investigators. Ms. Jackson stated, "For the most part, the staff is really dedicated and I think they need to know the legislative intent is they want those cases closed and they want them to meet a certain number of case closures...." Senator O'Donnell asked what the Budget Division's opinion is concerning the loan proposal and staffing request. Paula Steinbauer, Budget Analyst, Budget Division, Department of Administration, stated the Budget Division and the Governor support the loan proposal and the staffing request. She stressed the commission must meet its production schedule and address the backlog of cases. Senator O'Donnell noted the new staff positions will add additional personnel costs to the budget and questioned if the budget will be revised to accommodate the changes. Ms. Steinbauer replied, "Yes." Senator O'Donnell questioned whether cuts will be made from other budgets to cover the additional costs related to the commission. Ms. Steinbauer said John P. Comeaux, Director, Budget Division, Department of Administration, would have to answer that question and he is not presently available. Community Services - Page 1407 Senator O'Donnell ascertained there were no questions or comments from the subcommittee or the general public regarding the budget and closed the hearing on Community Services. Employment Security - Page 1413 Ms. Giunchigliani inquired if the division has completed its calculation on the number of audits performed by the division. Stanley P. Jones, Administrator, Employment Security Division (ESD), Department of Employment, Training and Rehabilitation, responded the division has not been able to gather the appropriate information. Ms. Giunchigliani requested the division to provide the committee with an audit projection for the next biennium. Mr. Jones assured the subcommittee the division will have a 2 percent audit penetration in the next biennium. Ms. Giunchigliani asked what the 2 percent represents in actual numbers. Mr. Jones replied the actual number of audits would be between 650-675. Senator O'Donnell noted four systems programming positions are being transferred to the Department of Information Services (DIS). Jim Hanna, Administrator, Division of Information Development and Processing, Department of Employment, Training and Rehabilitation, stated all four of the positions were originally vacant, but three have since been filled. The systems programming positions were redirected to service Local Area Network, Wide Area Network, and personal computer support. The division is in the process of reclassifying the vacant position to a microcomputer specialist. Mr. Hanna indicated DETR has 550 Personal Computers (PCs) throughout its operation and there is a tremendous need for a microcomputer specialist. Senator O'Donnell inquired why the division did not come before the IFC to request permission to redirect the four personnel. Mr. Hanna said the job description pertaining to a systems analyst work on a mainframe and what a systems analyst does on a Wide Area Network is very similar. Ms. Jackson stated the job classification for a systems analyst by the Department of Personnel should be broad enough to allow an individual to move from mainframe duties to Wide Area Network support duties. She indicated she would like to investigate the matter further with Barbara Willis, Director, Department of Personnel. Senator O'Donnell remarked: Our problem is, you have a certain job description and a certain function of an individual doing a job. You let those four [positions] go, then you hired four new people to do a different job, than what those four positions were designed for. Those four positions were designed for maintaining the mainframe system programming at a computer you housed at employment security. Now that has changed. The computer is no longer at employment security and now you have a need for four staff to support the various LAN/WAN PCs [Local Area Network/Wide Area Network/ Personal Computer] in your agency. Shouldn't we have the right to know that is what you want....I think we have that right and I think the citizens have the right to know where their tax dollars are going. Mr. Hanna pointed out the job classification for the four positions was not changed. He indicated a systems analyst can work on mainframe support or on PC support. If a drastic redirection had been contemplated, the division would have asked for permission from the IFC. Ms. Jackson stated the division, in the future, will send a letter of intent before redirecting personnel. Senator O'Donnell emphasized the division should receive permission from the IFC before redirecting personnel. Ms. Jackson replied the division will comply with Senator O'Donnell's suggestion, in the future. Ms. Tiffany maintained the division does not need the four positions. She said she has studied the division's personnel structure since the reorganization was completed and stressed the division is too "top heavy" with management positions. Ms. Tiffany also noted the division is requesting 10 new positions for a One-Stop Center. She commented the division should review its personnel structure before it considers adding 10 new positions. Ms. Jackson explained the consolidation efforts did not add any new staff, but only combined staff. Ms. Tiffany related she has reviewed the Welfare Division's staffing and noted the Welfare Division operates with far less fiscal staff than the Employment Security Division. Mr. Hanna, referring to the reorganization effort, remarked: ...ESD was a mainframe system and ESD was just in the process of getting into three small LANs and in one big stroke DETR was created. We were faced with not just mainframe problems, we had a Wide Area Network in the rehabilitation division, a Local Area Network in the JTPA system, and a crazy system in the Nevada Equal Rights Commission. These systems were supported by people....None of these systems supported each other, they were different operating systems, they were different network operating systems....The job we have is an immense job if we are going to support all those systems out there and bring them together and allow DETR to function as a department....In One-Stop, we want to be able to provide all these employment-related services to clients in a neighborhood center....Something drastically has to be done to allow those system to all work together....Believe me, we need those four positions to do that. Ms. Tiffany said the division had PC support personnel before the reorganization and these employees should be able to support the division now without hiring four new positions. Mr. Hanna explained most of the staff from the reorganization had very little computer hardware or systems training. Ms. Tiffany asked for a list of personnel who, before the reorganization, provided their agency with such services as Local Area Network, Wide Area Network, and Personal Computer support. Ms. Jackson commented the comparison of the DETR to the Welfare Division regarding personnel is not quite fair because the DETR has department status and the Welfare Division is only a division within the Department of Human Resources. Ms. Tiffany remarked, "You are telling me you need 28.5 financial fiscal people now." Ms. Jackson replied: I don't know at this point how many people we actually need. I am hoping we will be able to downsize when we come to you in 2 years with our budget looking at financial management and say we have reorganized that area and this is the actual number we need to take care of the department. Ms. Tiffany stated she does not believe the department needs 2 years to make that determination. Ms. Jackson responded it may not take 2 years to ascertain the department's needs, but since the reorganization, a large amount of her time has been spent developing and overseeing the budgets administered by the department. In addition, a number of the divisions transferred to the department had major problems which had to be handled before a more in-depth review of each division could be completed. Ms. Tiffany asserted the department needs to look at what positions can be eliminated before it adds new positions. Ms. Giunchigliani asked if the $698,000 in the second year of the biennium for the One-Stop Centers is funded with federal funds or state funds. Mr. Orr responded all the funds will be provided by the federal government. Ms. Giunchigliani remarked the state reorganization in 1993 was not implemented to "save money or staff time," but addressed department structure and delivery of service. She stated it is not her job to micro-manage the department by deciding what type of computer personnel are necessary to carry out the department's duties. Mr. Orr said he shares Ms. Tiffany's opinion that the department may be "top heavy," but not enough is known about the dynamics of the organization as it evolves from the reorganization. He pointed out 10 new positions are being requested to support the newly proposed One-Stop Center. After the center's effectiveness is proven, it is the department's intention to replace its existing service delivery system with 35 One-Stop Centers. The 34 additional One-Stop Centers will be staffed with current personnel. He maintained the department is committed to changing the service delivery system within the resources the department currently utilizes. Ms. Jackson noted the DETR has been undergoing an organizational architectural study which will be presented to the legislature in 2 years. She said a number of problems encountered by the DETR were inherited with the reorganization. She related a top priority for her is to "make government work better for the people and to provide services to the people through the One-Stop Centers." Senator O'Donnell questioned if the One-Stop Center can be implemented with existing staff. Ms. Jackson responded the department's employees presently specialize in one area and employees working at the One-Stop Centers will need to be "generalists." She said, until the center has been up and running for a time, the department will not know its exact personnel needs. Senator O'Donnell stated, "What if we give you authority to do this and if you can do it with less people, then those individual positions can be moved over to the One- Stop." Ms. Jackson paraphrased, "You are saying you will give us the authority to operate the One-Stop, but you would also like us to evaluate whether there is a possibility of us moving some of our existing staff into the One-Stop without creating 10 new positions. Is that what your saying?" Senator O'Donnell answered, "Yes" and stated he is hesitant to give the department 10 new positions when the department is not certain the personnel are needed. He suggested the department can come to the IFC, at a later date, if the positions are indeed necessary. Mr. Orr interjected some of the department's positions are supported by federal funding and are not allowed to work in other areas. The One-Stop Center needs personnel trained in a variety of areas in order to provide better service. He said, currently the only department personnel who are trained to provide a variety of services are the job counselors for the State Employment Service; however, statewide there are only six job counselors. The 10 new positions will be trained as "generalists" and serve everybody's needs. If the department discovers less personnel are needed once the One-Stop Center is successful, then the number of personnel will be decreased. Mr. Orr stated the department requested a waiver from the federal government which would allow the specialists to perform work in other areas, but the federal government turned down the request. If the waiver had been approved, then staff could have been transferred to the One-Stop Center. Current federal rules limit the duties for a federally-funded position. Ms. Jackson said if, in the fall, the federal government changes its funding mechanism for block grants, then she will have to reevaluate the situation. Ms. Giunchigliani commented federal funds support the program and if the funding "goes away then the people go away." She suggested there should be an understanding or a letter of intent stating if federal funding does not materialize, then the department will approach the IFC for permission to continue the program with state funds. Ms. Jackson related Senator Raggio told the department, in a previous hearing, if federal funds are not forthcoming, not to come back and expect to fund the program from the General Fund. Mrs. Brower commented, as a business owner, she is very cautious about adding additional personnel without first determining whether present staff is working at their full potential. She stressed her concern regarding the hiring of 10 additional staff without a firm funding commitment or a definite determination the additional staffing is necessary. Ms. Jackson said she understands Mrs. Brower's concern, but it is difficult to determine what action the federal government will be taking on federal block grants. The department is presently evaluating its various agencies to ascertain how services can be improved and if staffing levels are adequate. Senator O'Donnell commented it is very ironic 10 additional staff would be hired to help individuals find employment, but because of the uncertainty regarding federal funding, the employees may need to be terminated in 1 year. Mr. Orr stated the funding for the One-Stop Centers and employment and training is not at risk. Congress and the administration consider employment and training programs an important step in helping states develop a work force for the 21st Century. He said the funding for employment and training in the "large sense, for large block grant monies for employment and training is not going to go away and is not going to be cut." He predicted the block grant funds will be frozen at 1994 or 1995 levels for the next 5 years. The General Accounting Office identified 154 employment and training programs which can be merged into five or six agencies or one super agency. Mrs. Evans asked the department to add information in the budget's performance indicators regarding the solvency of the Unemployment Compensation Fund. In addition, she requested a report on the number of audits the agency will be performing in the next biennium. Ms. Jackson replied the division has the information readily available and will provide the committee with the necessary data. Mrs. Evans questioned if the division will be able to meet the number of federally- mandated audits. Ms. Jackson responded the division will meet the 2 percent requirement by the second year of the biennium. Claimant Employment Program - Page 1425 Employment Security Special Fund - Page 1433 Committee to Hire the Handicapped - Page 1437 Ms. Giunchigliani stated she raised the issue, in a previous meeting, of moving the Committee to Hire the Handicapped (renamed the Governor's Committee on Employment of People with Disabilities) out of the purview of DETR and into the Department of Business and Industry because the main focus of the committee is to increase employment opportunities for individuals with disabilities. She noted a revised budget (Exhibit E) for the Committee to Hire the Handicapped has been provided to the joint subcommittee. One new Management Assistant II position is recommended to manage the office in Las Vegas. Ms. Jackson interjected an amendment for the proposed change has been submitted to Senator Raggio, Assemblyman Arberry, and Assemblyman Marvel. Retired Employee Group Insurance - Page 489 David R. Thomas, Chief, Risk Management Division, Department of Administration, came forward and distributed a revised budget (Exhibit F). Mr. Thomas related the performance audit recommended to the Committee on Benefits that costs be segregated to reflect only the programs, costs, and resources the committee oversees. Because of the recommendation, the budgets administered by the Risk Management Division have been revised for allocation of staffing costs. The allocation costs for this budget are proposed to be funded from the Reserve account. The staffing costs take into consideration Mr. Thomas' time, accounting staff's time, and clerical staff's time. Senator O'Donnell asked how allocation costs were determined. Mr. Thomas responded the staff met and estimated the amount of time spent on each of the six budgets the division oversees. Senator O'Donnell questioned if Exhibit F is the final budget for the Retired Employee Group Insurance. Mr. Thomas responded, yes, if the calculations on the trend numbers do not change. He noted the actuary will be submitting updated trend numbers by April 24, 1995. Senator O'Donnell inquired whether the budget indicates a request for new positions. Mr. Thomas replied, "No." Supplemental Fund - Indigents - Page 490 Mr. Thomas distributed a revised budget (Exhibit G) for the fund. Senator O'Donnell asked when the fiscal staff received a copy of the revised budget. Mr. Thomas replied a copy was provided to the fiscal staff late yesterday, April 3, 1995. He explained he was not advised of the latest property tax projections until April 3, 1995, and therefore, the budget had to be recalculated to reflect those latest projections. Senator O'Donnell questioned what changes were made to the budget. Mr. Thomas pointed out the Maintenance budget category was changed from $420,438 to $520,609. James W. Manning, Budget Analyst, Budget Division, Department of Administration, interjected the budget was built on estimates received by the Department of Taxation. The Budget Division recently received updated rates on property tax assessments and determined it was appropriate to revise the budget to include the updated rates. Indigent Accident Account - Page 493 Mr. Thomas distributed a revised budget (Exhibit H) for the Indigent Accident Account and explained the updated property tax rates also affect this budget. He indicated the Maintenance category of the budget has been increased from $1.1 million to $1.3 million. Ms. Tiffany indicated the Claims account in the budget should have a zero balance to ensure vendors are paid promptly. Michelle Gamble, Program Assistant, Nevada Association of Counties (NACO), stated indigent claims are processed twice a year depending on when the NACO meets. The spring meeting takes place in late May so claims can be processed before June 30. Ms. Gamble said it takes 6 weeks to process a claim once the NACO receives the paperwork. Ms. Tiffany questioned how long it takes to reimburse a service provider. Ms. Gamble responded, generally, there is a 2-year "lag" time in payment. The indigent fund is the payer of last resort. Ms. Tiffany stated it is inexcusable the service provider must wait 2 years for payment. Ms. Gamble explained the hospitals must exhaust all other pay sources before a claim can be submitted. She assured Ms. Tiffany the hospitals are "extremely pleased" to receive the payments in such a timely fashion. Ms. Tiffany interjected $3 million is in the Reserve account which should be utilized to pay claims. Ms. Gamble said the $3 million in the Reserve account was disbursed in September of 1994. Ms. Tiffany asked what can be changed to ensure the service provider is paid in a more timely fashion. Ms. Gamble related the Nevada Revised Statutes determines the number of required board meetings. If the board meetings are increased, then costs to administer the program will also increase. Ms. Tiffany questioned why claims must be reviewed by the board before payment is made. Ms. Gamble noted the board reviews the claim to ensure the claim is appropriate and meets fund criteria. Mr. Thomas stressed the Indigent Accident Fund does not receive a claim until the hospital has pursued every avenue to collect on the debt. A hospital's collection effort generally takes over 1 year. The board meets twice a year to determine which claims are eligible for payment from the fund. Once the board approves a claim, the claim is paid within 2 weeks. Ms. Tiffany inquired if the board finds the 2 year payment schedule acceptable business practice. Ms. Gamble said the hospitals and doctors have worked with the fund for a number of years and the service provider is aware, if the fund was not in existence, the claims would never be paid. Ms. Tiffany asked how the funding for the program is accumulated. Mr. Thomas responded the fund receives quarterly payments from the tax assessor. Ms. Tiffany suggested the board meetings should be held quarterly, so the service provider could be paid more promptly. Ms. Gamble responded the board could meet quarterly, but the statute will need to be changed. Ms. Brower inquired why the budget does not have performance indicators. Mr. Thomas replied the Budget Division did not feel indicators were appropriate, since the account only holds the funds until claims are paid. Ms. Brower recommended the inclusion of indicators which depict claim "lag" time and the number of claims processed. Senator O'Donnell said he would like to know the amount of time it takes from when the county has certified the patient as indigent to the time the claim is paid. Insurance Loss and Prevention - Page 495 Mr. Thomas distributed a revised budget (Exhibit I) for the program and noted the account is responsible for the state's property casualty coverage. The budget was revised for allocation of staff costs and to include funding for a requested office move. The funding for the increases will be provided by the Reserve account. Senator O'Donnell asked if the account has personnel performing risk analysis for state property. Mr. Thomas replied, Randy Waterman, Specialist, Insurance and Loss Prevention, Department of Administration, performs this function. Senator O'Donnell asked what is the total estimated loss to the state. Mr. Waterman related losses are projected based on historical averages. He indicated the state's losses have been infrequent and fairly low. Senator O'Donnell inquired if Mr. Waterman was comfortable funding the new module out of the Reserve account. Mr. Thomas replied, "Yes we do." He indicated a portion of the program is self-insured and a portion is purchased insurance. The Reserve amount of $930,916 which was balanced forward is the amount necessary to meet the self-insured retention amounts and deductibles. Hearings and Appeals - Page 581 Brian A. Nix, Senior Appeals Officer, Hearings Division, Department of Administration, testified there are no budget revisions to the agency's budget. Senator O'Donnell asked if Mr. Nix is comfortable with the budget recommended by the Governor. Mr. Nix replied the agency can work with the budget as presented if no significant legislative changes are made. Workers' Compensation Hearings Reserve - Page 587 Senator O'Donnell noted there were no questions from the subcommittee regarding this budget. Victims of Crime - Page 589 Mr. Nix commented he is the coordinator for the Victims of Crime program and indicated the budget has not been revised. There being no further business before the subcommittee, Chairman O'Donnell adjourned the meeting at 10:45 a.m. RESPECTFULLY SUBMITTED: Pamela Jochim, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Assemblywoman Chris Giunchigliani, Chairman DATE: Assemblywoman Sandra Tiffany, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on General Government April 4, 1995