MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session February 27, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Monday, February 27, 1995, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Ann O'Connell, Chairman Senator Randolph J. Townsend, Vice Chairman Senator Jon C. Porter Senator William J. Raggio Senator William R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer STAFF MEMBERS PRESENT: Dana Bennett, Senior Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Albert C. Johns, Ph. D., Chairman, Commission to Review the Compensation of Certain Elected Public Officers Robert E. Erickson, Research Director, Legislative Counsel Bureau Virgil M. Getto, Commission to Review the Compensation of Certain Elected Public Officers Ernie Hall, Commission to Review the Compensation of Certain Elected Public Officers Barbara Robinson, Commission to Review the Compensation of Certain Elected Public Officers George Pyne, Executive Officer, Public Employees Retirement System of Nevada Robert Hadfield, Executive Director, Nevada Association of Counties Knight Allen, Citizen Lucille K. Lusk, Legislative Liaison, Nevada Concerned Citizens Marvin Teixeira, Mayor, Carson City Jan Gilbert, Legislative Chair, League of Women Voters David W. Wyble, President, State of Nevada Peace Officers Association Stephanie D. Licht, Lobbyist, Elko County Board of Commissioners Carol Vilardo, Nevada Taxpayers Association Jerry Maple, Sheriff, Douglas County Dave Kopelman, Citizen Alan Chamberlain, Lincoln County Commissioner Leola H. Armstrong, Executive Director, Common Cause Ben Graham, Legislative Representative, Nevada District Attorney's Association Gary Yles, Citizen Employees International Union, Local 1824 SENATE BILL (S.B.) 84: Increases compensation of various public officers. (BDR 17-1078) Dr. Albert C. Johns, Chairman, Commission to Review the Compensation of Certain Elected Public Officers, began the testimony on S.B. 84 (Exhibit C. Original is on file in the Research Library.) He stated S.B. 84 is one of three recommendations from the Commission to Review the Compensation of Certain Elected Public Officers, which is an independent body created by the Legislature in 1993. He said the nine members of the commission were appointed by various elected officers of the executive, judicial and legislative branches. He explained by law the members are not government officers or employees. He further clarified the duties of the commission. Dr. Johns stated the commission voted unanimously to increase the salaries of legislators, effective in 1997, from $7,800 to $11,100. He testified the Nevada legislators are among the lowest paid in the United States. He explained the pay for a legislator for the 2-year period is below minimum wage required for all other employees. He remarked this pay is only for the first 60 days of the legislative session, while everyone is aware the Legislature is in session for up to 6 months. He emphasized the legislators continue to work the 18 months that the Legislature is not in session. He explained to fulfill their duties, many legislators devote 10 to 15 hours per week helping constituents, writing letters, making phone calls, traveling, making speeches and other activities which remove them from their personal life. Dr. Johns said it is the unanimous intent of the commission to retain the Legislature as a body of citizens, not a professional body of politicians. He emphasized the committee's recommendations fill this intent. He stated testimony is gathered from citizen representatives who supported a justifiable salary increase. He said the distances in Nevada (other than Carson City) create a hardship for legislators to serve during session. He explained legislators from Clark, Elko, White Pine, Humboldt, Nye, Lincoln and other distant counties undergo great sacrifice when they serve the people of Nevada. He articulated that some legislators are less economically wounded by serving when they are subsidized by a spouse, or if they have personal wealth. Dr. Johns asked "But what of the ordinary salaried worker who wishes to serve but who cannot do so? We have witnessed many outstanding members of the Legislature leaving in recent years because of the inconveniences and difficulty in being away from family and work for the many months required to be in Carson City. This does not contribute to the legislative process and the difficult duties in this fastest growing of states." Robert E. Erickson, Research Director, Legislative Counsel Bureau, provided technical information on S.B. 84 while Dr. Johns provided the committee the rationale behind the commission's decisions. Mr. Erickson began with the Section by Section Description of Senate Bill 84 (Exhibit D) to familiarize the audience with the scope of S.B. 84. Dr. Johns explained the salary increase for the legislators would not begin until 1997, which would be 10 years since the last salary increase for the legislators. Mr. Erickson stated Dr. John is correct, the earliest a salary increase would go into effect would be January, 1997. Dr. Johns asserted it is apparent to him, from reading and watching the news, that the only people not seeking a raise during this session are the legislators. He said this is wrong. Senator O'Connell explained when the Legislature does vote to increase their salary, that increase does not apply until a legislator is reelected. She stated if this section of the bill stayed in and were voted upon, only a legislator who went through the election process this year would receive the raise. She declared it is important for the audience to be aware of this area of the law. Mr. Erickson restated to the audience that only 10 or 11 senators would receive an increase in 1997 if S.B. 84 is approved. The law would become effective for the senators who are elected or reelected for the 1999 session. Mr. Erickson continued his testimony with section 5 of the bill. He stated this section lowered the legislative requirement for retirement from 10 years to 5 years. Dr. Johns responded this section of the bill would require a study from actuaries with the Public Employee Retirement System of Nevada to determine if this is feasible. He pointed out the commission does not know if this is feasible. He explained additionally the commission could not determine the feasibility of raising the retirement amount from $25 to $30 per month for retiring legislators. Senator O'Connell stated she interprets this section to be for all state employees. She asked if this is correct. Mr. Erickson asserted he believes the vesting period for state employees is 5 years. Dr. Johns explained a few years ago the supreme court mandated retirement be 5 years, but certain kinds of pension funds were excluded, such as the Public Employees Retirement System of Nevada. Mr. Erickson explained section 6 as the section which actually affects the retirement benefit for legislators. This section increases the monthly benefit by $5 ($30 per month instead of $25). Mr. Erickson stated this is multiplied by the years of service once the recipient is eligible to receive the benefit. Dr. Johns suggested George Pyne, present in the Carson City audience, would have to take steps to find out from the actuaries if this increase is feasible. Mr. Erickson skipped to section 14. He stated sections 7 through 13 and section 18 through 21 are technical changes which affect the current salary or reimbursement of the legislators. He said section 14 concerns the salary of county employees. He remarked the bulk of the changes regarding salaries is in this section. He asked the senators to open the bill to pages 10 and 11 (Exhibit E). He stated page 10 is the existing pay scale and page 11 is the proposed pay scale. He explained a classification is shown on the left hand side of both pages. He defined this as a goal to group together counties of the same size or similar value of assessed property. He related the salaries would be similar from county to county within each classification. He explained currently there are six classifications of counties. He explained the rationale for developing another classification; splitting class 3 into two parts. He reported class 3 is the higher part of the old class 3, and class 4 is the lower part of the old class 3. Senator O'Connell asked Mr. Erickson if there is discussion about any of the properties which may have dropped in assessed value in class 6? She explained Esmeralda County is affected this year. She pointed out the difference in pay between Storey County and Esmeralda County and asked for an explanation. Mr. Erickson responded Esmeralda County, in terms of elected officials, is the very lowest in the state. He explained Storey and Lincoln Counties are also in category 6. He stated Lincoln County used to be in a different category, but due to finances in the county, requested to be left in the lower category of pay. Mr. Erickson continued to say the district attorney for Storey and Esmeralda Counties are allowed to have a private practice in conjunction with their duties as district attorney because of another section of the law. Senator O'Connell asked if it is correct that Storey County belongs in class 5 for pay raises; however, because the district attorney is allowed private practice, Storey County is listed in class 6? Mr. Erickson stated he believes this is the case. Mr. Erickson said four counties ( Lander, Lincoln, Lyon and Nye) have requested to be moved to different classifications. He explained the commission listened to the county recommendations and moved the counties up one classification range. He said after the reorganization of counties into the proposed classes, then the commission decided to apply an "across the board" 25 percent increase in salary for elected county officers. He reminded the committee the last salary increase for these elected officials was effective January 1, 1990. He stated the bill recommends the increases become effective July 1, 1995. Senator O'Connell sought clarification regarding the classification system. She stated when the counties were moved up one classification range, then some of the counties will receive a higher than 25 percent increase. She asked if this is correct? Mr. Erickson responded, "Yes." He stated he has not done a percentage breakout for each of the officers, however the previously mentioned four counties ( Lander, Lincoln, Lyon and Nye) all of those officers would receive a greater percentage increase than 25 percent because the county is reclassified into a higher classification range. Senator O'Connell reviewed the percentages for Lincoln County's officers. The county commissioner's increase is 59 percent. The district attorney's increase is 57 percent. The sheriff's increase is 41 percent. The clerk, assessor, recorder and treasurer's increase is 43 percent each. She asked what determination is allowed for situations where the population is greatly different? She asked if the assessed evaluation weighed heavier than the population? Dr. Johns stated he could not answer her questions. Senator O'Connell explained in class 5 the population ranges from 1500 to 6400. She stated this is a substantial difference in the increase in salary for the county which asked to be reclassified. She asked what the decision to reclassify the counties is based upon? She questioned if it is the assessed evaluation? Dr. Johns asserted he believes it is based on population. He stated the commission used the figures supplied by the Associated Counties of Nevada in conjunction with the request from the counties. Senator O'Connell reviewed Eureka County, which has a 1500 population, and noted there is a substantial increase in the payment for the district attorney ($62,000 for 1500 people). Mr. Erickson replied in the case of Eureka, the county is remaining at the same level it has been. He stated there has been significant mining activity in the county which impacts the county in general. He emphasized although the resident population base is low, there is a great deal of activity in the county. Mr. Erickson resumed his section by section review of S.B. 84 (Exhibit D) with sections 15 and 17. He stated these were technical changes which allowed the district attorneys in the lowest county classification to engage in a private law practice. He explained this is the wording in the current law for class 5, but with the new classification, which includes a class 6, the statute would be changed to read class 6. He asked the committee to remember that Lincoln County asked to be moved up in the classification, eliminating the Lincoln County district attorney from engaging in private practice. He stated the district attorney for Storey and Esmeralda Counties would be allowed to engage in private practice. He reiterated sections 15 and 17 retain that provision in the law. Senator O'Connell asked Mr. Erickson if the commission had considered other factors in their determination? She cited examples: counties with incorporated cities; Winnemucca's police chief in Humbolt County, and how much of the population the police chief might handle as opposed to the county sheriff; and, Fallon's military police and the chief of police, along with the territory covered? She asked Mr. Erickson if the source of revenue for the counties could support the types of increases. Mr. Erickson replied counties with incorporated cities were not considered. He stated the revenue base is a determining factor. He gave Eureka County as an example of a county with a very high tax base. Senator O'Connell declared, "You would look at it like you would look at Clark County. Eureka County is a very wealthy county, [an] $11.7 million budget for a 1500 base population is dramatic." She stated when the committee looks at White Pine, Mineral and Lincoln counties, there is a different situation where the assessed value goes down. Dr. Johns reiterated the commission has a budget for four meetings and four meetings were held. He testified a broad group of individuals came before the commission, and there is consideration of legislative salaries and judicial salaries. He explained one and a half meetings is devoted to the judiciary. He stated discussion of county officers occupied two meetings also. He said if the commission had more time (perhaps two more meetings) they might have been able to provide greater detail in some of the areas Senator O'Connell is questioning. Senator O'Connell stated the committee needs to know, for deliberation of S.B. 84, what factors the commission had discussed. Dr. Johns said the commission examined the economic factors provided to them by the counties involved, and the association of counties. Mr. Erickson continued his testimony on the section by section analysis of S.B. 84 with section 16. He stated the Legislature needs to understand the concept of longevity pay which had been approved in the past for county officers. He explained the law currently says after an officer has served for 4 years they are eligible for longevity pay calculated at 1 percent per year of service. He proposed the way the law is worded right now causes confusion in county interpretation. He stated the counties interpreted it as once an officer is in his second term of office, then longevity pay could be paid for 4 years, but the officer could not get more than that 4 percent until the officer is elected again. He stated at that time the officer would get 8 percent on top of the regular salary. He said most of the county officers feel the intent of the law is to allow, once the officer is eligible for longevity pay, to have the longevity pay calculated annually so that in year 6 of service, the officer would be credited for 5 previous years of service. Senator O'Connell asked Mr. Erickson to take Clark County as an example and tell the committee what the longevity pay would mean to the county commissioners. Mr. Erickson stated currently a county commissioner in Clark County receives $45,000 in pay. He based his calculation on the beginning of the second term at 4 percent (1 percent times the 4 years served) and estimated that amount at $1800. He stated a county commissioner in Clark County in his or her 5th year of service would receive approximately $46,800 in pay. Mr. Erickson explained section 16 of the bill clarifies once an officer has 4 years of service in office, the longevity pay is calculated yearly thereafter. He stated the second thing the bill does is to increase the amount from 1 percent to 2 percent. He reminded the committee there is a cap of 20 percent. He expressed one of the concerns of the commission is to keep the counties from coming back to ask for a raise. The commission wanted to tie the raises to the Consumer Price Index or to the amount of increases granted to county employees under collective bargaining, or the amount of raises granted to state employees. The commission does not want the counties to request raises every year, 2 years or 4 years to adjust their salaries. He stated this is the reason for raising the longevity pay from 1 to 2 percent. Dr. Johns testified the other part of the problem is that an elected sheriff or district attorney is getting less pay than their subordinates. He stated a Clark County captain receives more pay than the sheriff. The commission asserted the elected official in charge should receive more pay than subordinates. Senator O'Connell noted there are no qualifications for sheriff, however the subordinates must have the expertise to hold the position they have. She stated this expertise is tied to salary. She asked Dr. Johns if the commission considered qualifications when they were determining salary. She asserted most of the salaries are over the $50,000 dollar range, which is rare, without high qualifications in the private sector. Dr. Johns responded the commission viewed it from the point of a district attorney who would have the expertise. He said for the district attorney's subordinates to be paid more than the district attorney "seemed odd." He expressed the sheriff of Clark County for the past 30 years did have expertise. He declared no one lacking expertise is a serious contender for the position. Senator O'Connell stated that is certainly the case in Clark County, but she is not sure it is true for the entire state. She reminded Dr. Johns the law has qualifications for district attorney positions only. She emphasized there are no qualifiers for any of the other positions. Dr. Johns rebutted, "The person in the top slot is the person taking the heat and deserves more pay. It may be more than a matter of expertise in the field. It may be the process of being the person responsible and in charge." Senator Porter asked Dr. Johns if public meetings were held to discuss this with the entities. He stated in his experience the staff in smaller counties may work as hard, if not harder than staff in larger counties because of staffing. He described the communities and counties as knowing their financial status and asked if there were meetings held in the counties to discuss salaries and benefits. Dr. Johns stated he knew of no public hearings held in the counties. He said the commission's meetings were open to the public and county representatives appeared at the meetings. Mr. Erickson responded the Legislature is required to look at the salaries of approximately 200 county officials and to set their salary. He stated he does not think any other state has kept this requirement. He explained holding only four meetings limited the commission from talking to every county. The commission had to rely upon representatives to testify at the meetings. The general public is not well represented. The county officials supplied the information to the commission. Mr. Erickson concluded the review of S.B. 84 with an explanation of section 22. He stated this section set the effective date of S.B. 84 as July 1, 1995, except for section 3. He reiterated section 3 is the section which changes the legislators salary from $7,800 to $11,100. He explained the effective date for section 3 is set for the day after the general election in 1996 for all assembly persons and half of the senators. The senators who are in the middle of a term will not receive the salary raise at that time. Senator Porter asked if the counties had provided concurrence that the salaries set in S.B. 84 are appropriate? Mr. Erickson responded individual counties and individual officers presented recommendations to the commission early in the process. He stated some were higher and some were lower than the 25 percent across-the-board which the commission settled on. He said he is unaware of any counties or officers which were unhappy with the commission's compromise. Senator Porter asked if there is anyone opposed to the compromise? Mr. Erickson replied he is unaware of any opposition, but there may be testimony later which shows opposition. Senator Shaffer asked Mr. Erickson if it requires a legislative act to increase the salaries or could not the counties do it themselves? He inquired why the Legislature is mandating county salaries? Mr. Erickson replied the constitution sets the Legislature with this task. He stated the Legislature cannot delegate this task by statute, it would have to be changed by a change to the constitution. He explained he has helped various commissions over the years determine appropriate salary levels. Senator O'Donnell asserted it is a conflict for the Legislature to consider increases in their own salaries. Virgil M. Getto, Commission to Review the Compensation of Certain Elected Public Officers, testified for S.B. 84. He commended the legislative staff who worked with the commission, citing them for doing a fine job. He stated the commission held four very active meetings with serious debate on the issues. He said: One I will mention, chairman, differed with myself. There were two other members and myself who felt very strongly about the $350 stipend for legislators when they are out of session to be unvouchered. Having been here last session when this came up, I have a pretty strong gut feeling that an unvouchered $350 a month stipend would never make it. Commissioner Robinson and I opposed it very strongly. In fact it passed one time and is turned over. We had to go with the majority. I still feel strongly that it should be unvouchered. Senator O'Connell asked Mr. Getto, "Virgil, did you fill out a minority report on that?" Mr. Getto replied, "No I did not." Senator O'Connell asked, "Do you and Barbara [Robinson] feel strongly enough about doing that?" Mr. Getto replied, "I do not know about Barbara [Robinson], but I would fill out a minority report." Senator O'Connell stated, "We would like to have that as part of the minutes for this meeting." Barbara Robinson, Commission to Review the Compensation of Certain Elected Public Officers, said, "I agree. I would support that." Mr. Getto continued his testimony. He suggested the committee amend the bill in the section regarding the $185 per day salary. He said the bill stipulates this is for all the committee meetings. He said he felt it should be changed back to where it is today. He said the raise is to average out the days in session, not the days in committee meetings. He stated if the committee averaged the days the legislators are in session, they would receive about $66 per day. He asserted, "This is not a great salary for a group of people who I consider to be the board of directors of a quite large corporation which has a budget of $3 billion plus. Your salaries would average out to about one hundredth of one percent of that total budget of the state." Mr. Getto professed he believes low paid legislators tend to create somewhat of an elitist Legislature or the opposite. He stated legislative duty limits the potential of the legislator to conduct personal life and profession. He expressed being a legislator is a very limiting factor. He said some people benefit from the Legislature because of the exposure to the public which would draw business to them when they are not in the Legislature. He declared the low salary legislators receive keeps people from becoming legislators. Mr. Getto explained if the term limitations issue passes, then no legislator will be around long enough to vest and get longevity. He stated it parallels public employees longevity which passed in the Legislature about 6 or 8 years ago. He said after the commission looked at his rationale, they chose to increase the monthly amount from $25 to $30, which has not been addressed since 1975. Mr. Getto remarked: It is amazing how gun-shy legislators are about increasing their own salaries. It is awkward and should be done some other way. The downside of that is like California when a totally impartial board goes bananas and the California legislators cannot change it and are hung with it. Somewhere in between there, I think there should be grounds for a board (that is somewhat controlled) to do this. Even though it may not have that much effect on their reelection, not like the retirement bill did, legislators get dumped anyway. Look at what happened last session in the Assembly. If I go down there I do not know half of the people and you did not have any salary bill last time. Mr. Getto stated he was a senator when Lincoln County became an issue last time. He said the county realized they could not afford to be reclassified so the county asked him to reduce them from class 4 to class 5. He explained now Lincoln County has come to the commission and has requested to be reclassified to their original standing. He articulated that is why Lincoln County has been reclassified in the bill. He remarked that when he and Assemblyman Dini were freshmen they thought it is crazy for this law to be in the constitution, for legislators to control counties. He said everyone says the best government is the government closest to the people. He stated they sponsored a resolution which never got out of the Senate to change this law. He said the Legislature likes to keep their hand on the controls of the counties. Mr. Getto stated when counties request reclassification, perhaps the commission needs to look at the public services provided by cities in the county and the impact on the county. He said the longevity pay increase may be a step in reducing the number of times a county comes to the Legislature to request an increase. He stated one of the reasons for the longevity is the Legislature took away the 95 percent rule. The highest paid person working under the sheriff for instance, could never receive more than 95 percent of their supervisor's salary. It is a limiting factor. The person served until they were capped and then they moved on. The Legislature removed the cap and now there is a reverse; the subordinates are receiving more than the supervisors. Mr. Getto stated although there are no qualifications for any county position other than district attorney, the actuality is the general population is much more aware. He asserted very few people are being selected who are not qualified. He told the committee the public is more cognizant of the candidates. Mr. Getto articulated all of the sheriffs in the rural counties have had previous law enforcement experience. Mr. Getto remarked, "Sure, now and then we get one who turns out to be a dud, but so are the legislators, and all other elected officials." Mr. Getto explained the makeup of the commission should be changed if the commission has to meet again. He suggested adding one or two appointees to represent the citizens (the working men and women). Ernie Hall, Commission to Review the Compensation of Certain Elected Public Officers, commended Bob Erickson and his staff for the great job they did with the commission. He stated the commission feels the legislators deserve more salary than what the commission settled on. He emphasized the legislators have a big job ahead of them with the changes going on in the state and they deserve a raise. He said the population growth in Nevada is a contributing factor to this reasoning. He asserted the local county officers are closer to the people and finances which makes them more aware of the needs of the county. Senator O'Connell stated she does not see how the legislators can continue to make decisions regarding county salaries. She said there are too many issues which will change circumstances in the counties. She pointed out the populations, budgets, communities, incorporated cities, land mass, and revenue base are different. Mr. Hall stated he has been contacted by various counties regarding changing the law. He said he does not know how long it would take. Senator O'Connell explained it requires 5 years to change the constitution. Mr. Hall stated if it takes 5 years then some of the process should be started now. He did not anticipate any opposition from anyone. Senator O'Connell remarked the counties really have no common threads on which to base the decisions. Mr. Hall stated another point to look at is the cost to run for public office. He pointed out there is a big monetary difference in running for Assembly and for the Senate. Senator O'Connell shared this difference between the Assembly and the Senate with the audience. Senator O'Connell said she and Senator O'Donnell represent District 5, the largest population area in the state in excess of 180,000 people. She said there are six different assembly districts in that same area represented by she and Senator O'Donnell. Senator O'Connell stated she and Senator O'Donnell are paid the exact same amount of money an assembly person is paid, yet they service 180,000 people, as compared to an assembly person who represents 30,000. She remarked it costs more for the both of them to run for office as compared to an assembly person. She said there is a similar situation with Senator Mike McGinness who serves the largest district in the nation. He does not have a large population base, but he has a large distance to cover. She reiterated there is a lot of inequities in the system. Barbara Robinson, Commission to Review the Compensation of Certain Elected Public Officers, added a few comments to the testimony on S.B. 84. She stated she is very disappointed to read in the Las Vegas Review Journal that the bill would not go out of committee. Ms. Robinson requested if the bill does not go out of committee to grant these salary increases, the committee begin an immediate movement for a new commission to examine only legislative salaries and pensions. She said she doubted if anyone could afford to get less than minimum wage while they are serving in the Legislature. She asserted she does not think the people of the State of Nevada want to be known for having a Legislature which is paid less than minimum wage. She declared a citizen Legislature should pay enough for an educationally, ethnically and class-diverse Legislature. She asserted welfare in some states is higher than the salaries for Nevada's legislators. Referring to the salaries of the county officials, Ms. Robinson stated she strongly believes the elected official, with or without qualifications, should be the highest paid individual. She explained this is reflected in private industry and most public sectors. She told the committee, Increase or specify qualifications if you choose, but pay the top person the top salary. There should be some dignity to being the boss. I request that you consider doing something. You have not had a salary increase. It is nice to have a body of elite people, but that is not what Nevada is about. I do not believe that is what we were intending. You must raise your pay to make it a competitive salary. You must do something about your pensions. If someone gives 20 years, they should go out with something that will allow them dignity in their old age. Thank you for considering this. This is the second panel to be empaneled to discuss your pay increases. This is the second time you have taken citizens' time and you are ignoring what we are saying. I think that is terrible and you should not do that to another body. I think that at some point you should be more serious about this. If you are not going to raise your own salaries because the public is against it, then you should relinquish the power and give it to the citizens and allow them to consider what you should be properly paid. Therefore, you will not have a conflict of interest, you won't feel guilty, and you won't have to be responsible. George Pyne, Executive Officer, Public Employees Retirement System (PERS), provided the committee background information regarding how PERS works and its relationship to Social Security (Exhibit F). He stated, "In regard to computation of the actual benefit a legislator may receive at retirement, he or she presently receives $25 for each year of service to a maximum of $750 per month for service up to 30 years. Using this formula, a legislator who retires at age 60 with 10 years of service would receive a lifetime, monthly benefit of $250." He concluded with, "It is difficult to generalize about this. Benefits are unique to the individual. PERS works very closely with its respective retirees and Social Security, providing Social Security with information they need in making your personal benefit computation." Robert Hadfield, Executive Director, Nevada Association of Counties, testified in favor of S.B. 84 (Exhibit G). He thanked Dr. Johns and the members of the commission for their work. He stated it is a very difficult and lengthy process which required the commission to address a great number of issues for the people of Nevada. He explained the role of the Nevada Association of Counties in the setting of the salaries for county elected officials and the Legislature. He said the Nevada Association of Counties facilitated discussion among the counties and helped them reach consensus on major issues affecting compensation. He illustrated that prior to the establishment of a commission, the Legislature would receive requests for salary increases from individual counties based on their financial status. Mr. Hadfield reminded the committee the current system of county classifications is devised in an effort to provide general guidelines by which the counties could be evaluated and compared for purposes of setting compensation. He stated setting the salaries for county elected officials is often a difficult and contentious issue, therefore he wanted the committee to be aware of the approach the commission took in regard to its task. He said the Legislature created a salary commission (who had expertise and received input from the public) to take a look at the setting of the elected officials' salaries. He said the commission wants to be fair to the citizens and to the elected officials. He explained the commission used the classification system currently in existence as the basis of the recommendations. He said the work of the commission is concluded prior to the general election. Mr. Hadfield stated S.B. 84 used a classification system which recognizes assessed valuation and population as indicators of work load in county government. He conveyed the county is still dealing with the population at large with the elected officials. He related the commission looked to validate groupings of counties. He said counties were ranked by populations, by assessed value, and their relationships to the work load. He stated the groupings are still valid today. He explained the commission did make recommendations for changes in classification related to the changes which the commission saw when updating their figures. He asserted it is a "moving target." He stated Churchill County felt it could move up in classification. He said: I would be remiss if I did not say the real problem we have here is that we go a number of years before these salaries are reviewed and adjusted. The longer we wait, the more disparities arise, not only in the difference in the salaries, but in some of the problems regarding the impacts of collective bargaining and other statutes by which counties operate really dictate and drive a great deal of what is happening with our payrolls and our pay scales in the counties. We find ourselves stuck in this very difficult situation. If we do not adjust the salaries on some form of annual basis, when the rest of the employees in county government are adjusted through the collective bargaining process, disparities occur and we have a very difficult situation to deal with. You will see in this bill that other provision which asks for that 1 percent to be changed to 2 percent so we won't keep having the situation where we need to come before you. We totally support the salary commission's 25 percent recommendation. It is not 25 percent this year, it is 25 percent going back 5 years. Each year we delay action on this the numbers get larger and it becomes more difficult a process for us to speak to and adjust to. I will say the chairman of the commission asked me to contact our membership, all 17 of Nevada's counties, regarding whether or not they were in a position to budget for the salary increases that are recommended in Senate Bill 84. I have the results of that survey, and I will be candid and tell you that White Pine County is having financial difficulty. They are not certain at this time what their budget will look like, however, the rest of Nevada's counties have either already placed this in their budget deliberations or they are in the process of doing it. Some of them, such as Mineral and Pershing Counties, have indicated they, too, have financial constraints; but they support this measure and those increases will be budgeted in the county budgets which will be going through an approval process following this hearing. Regarding the question [of] whether or not the counties had planned on budgeting for the increases provided, all of them plan on doing it with the possible exception of White Pine County which is, in their opinion, unable to make a determination now. They do support their elected officials. All of them feel that there are increases necessary, but they are being frank and blunt about their fiscal constraints. We do have many representatives of these elected officials and officers present today. The Nevada Association of Counties goes on record in support of the recommendations of the commission. We support their work. We urge members of this committee to go forward with Senate Bill 84. If you feel uncomfortable about addressing state legislative salaries in the same bill, we would support a separate bill with our salaries. We urge you to give our elected officials an opportunity to receive raises that they have already earned, but have been unable to get because they are always responding after the fact to raises. Mr. Hadfield discussed the counties' concerns regarding qualifications. Senator O'Connell asked Mr. Hadfield if the four counties (which are getting more than 25 percent) have indicated this increase is not a hardship and that they will not be asking the Legislature for money for additional costs. Mr. Hadfield assured the committee the counties would accept the responsibility for budgeting the increases within the confines of his previous testimony. He stated: We will accept that responsibility. We know it is our responsibility. We know the Legislature has a difficult job in setting those, but it is certainly not our intention, following any legislative action on this bill, to come back and ask you for additional funding to support those pay raises. Nor is it our intention to, in any public debate that may occur after the fact, say we were forced to do it by the Legislature. We appear before you willingly on behalf of the many very talented and hardworking elected officials at the county level of our state. We need your help to address this problem. It is our problem, we have to address it financially. We will do that. We'll accept responsibility for it, but we need your help to implement what the recommendations are and the pay raises that are needed for our elected officials. Senator O'Connell commented, "We have this on the record and that is what I want. How many county officials receive benefits from their counties, such as medical, retirement contributions, longevity pay or deductions for social security?" Mr. Hadfield replied, "Senator, I do not have specific knowledge on a county-by-county basis regarding that question. I will be happy to do a survey with the counties on that question." Knight Allen, Citizen, addressed a few points in S.B. 84. He stated the commission process is internalized because of budget and time constraints. He asserted the commission had to accept what the representatives offered in terms of pay raises. He said, "There is no system of checks and balances that moderates the explosive cost of local government under the scenario of local government being spelled out under S.B. 84." He declared in 1986 the economic gap between the people of Nevada and their local government was 19 percent. He emphasized this number is much too high already, but by 1993 that gap had grown from 19 to 23 percent. He alleged that last November, Nevada was a population with a falling standard of living who walked into the voting booth to say no to a government that consistently and continually demanded more. He asserted the compensation system is defined in terms of what is fair to the elected officials. He stated the question should be "What is fair in relation to the people?" He said the compensation system has to be tied back to the people, not internalized within government. Mr. Allen declared he strongly supports the commission's suggestion of $185 per day for the senators. He said it is "defensible." He remarked: You will never get a situation where the people are out in front of this building, carrying signs, chanting 'Give the legislators a pay raise! Give the legislators a pay raise!' That's not going to happen. But you can create a compensation schedule which is tied back to them and they won't go crazy. If you define fairness in terms of the people, then you are going to be okay. It is imperative you do it for your own salaries. Mr. Allen continued his testimony by saying: As far as creating a commission with the statutory right to set salaries for the legislators, I'm very much opposed to that. It comes a point in time, ladies and gentlemen, when you, as elected officials have to do the job. You are the highest elected officials in this state. The policy making power of government rests with the Legislature. You cannot delegate it. You have to make these decisions. Make them fairly, make them so that the people can see it is tied back to them and you won't have the problems you have had in the past. I have a great deal of problems with the $350 per month and the raise in pensions. I cannot believe you would consider opening that pension can of worms, even for 5 percent. You have to get the media on your side and the only way you can get the media on your side is if you can come to them and say 'Look, you want a citizens' Legislature, we've given you a citizens' Legislature. We are going to be paid precisely what the average citizen is.' You can win with that and you do not have to be ashamed and the people will not be in rebellion against you. Mr. Knight continued his testimony by stating his idea of a salary raise would be 19 percent across-the-board. He stated 19 percent is the amount the average working man or woman in Nevada has received over the last 4 years. He emphasized the committee should let elected officials know their economic well-being is directly tied to what is going on with the citizens of the state. He said once the elected officials understand the concept on which their raise is based, there will be no problems for the committee. Lucille K. Lusk, Legislative Liaison, Nevada Concerned Citizens (NCC), addressed S.B. 84. She supports the increase in salary for the legislators. She said more citizen legislators could serve who have a variety of experience if the pay scale were more equitable. She asked if the $350 per month stipend would be given upon receipt of documented expenditures. She asserted NCC supports the stipend only if documented. She recognizes the work done by the Legislators during the session and the burden it sometimes places on the legislators. She declared NCC is very much opposed to reducing the vesting period of longevity from 10 years to 5 years. She said the retirement system for elected officials is incompatible with the citizen Legislature. She emphasized the idea of a citizen Legislature is that elected officials serve for a relatively short period of time and then return to a truly private life. She stated she realizes in Nevada's situation, legislators serve part- time and that it is not the same as it is for federally elected officials. She declared NCC strongly opposes longevity pay, "which is nothing more than automatic salary increases for elected officials at any level." Marvin Teixeira, Mayor, Carson City, testified in support of S.B. 84. He stated the salaries need to be addressed for full- time officials who supervise. He stated it needs to be addressed this session. He questioned the wisdom of combining the law for the legislators' pay raise with the elected officials' pay raise. He asserted they should have been separate bills. He stated: In the compensation commission report it states I testified the mayor's salary should be 30 percent higher than the supervisor's salary. Certainly, I would like to correct that. I stated that the charter review commission submitted a recommendation to my board of supervisors, which we accepted. The recommendation is that my salary be higher by 30 percent. I respectively did not concur. I told the commission that. Mr. Teixeira told the committee there were public hearing regarding the proposals in the bill. He stated it had be agendized and announced. He explained why local government costs are going higher than anyone else. He asked if Mr. Allen had ever heard of fact-finding, negotiations, and binding arbitration? He declared labor costs are increasing and out of control and cited five unions are present in Carson City. Senator O'Donnell asked Mr. Teixeira if he wants the committee to revise the figures for Carson City downward? Mr. Teixeira replied Carson City is a consolidated city/county center. He stated there is one person in every role. The sheriff does not share his work load with the Carson City Police Department or the Capitol Police, he has the whole role. He explained there is a full judicial system. He explained the Board of Supervisors sit on every commission and they are spread thin. He asserted he could care less about his salary, but he strongly supports raises for his peers, the elected officials. He said the committee should be looking at market price; how much would it cost to go hire the best qualified person for the job? How much would the committee pay them to do an excellent job? He emphasized that is the criteria to be used, not what is being paid in Clark County. Senator O'Connell explained the diversity of S.B. 84 to the audience. She stated in class 3 the population ranges from 19,560 to 44, 620. She stated the assessed evaluation ranges from $398,510 to $1,043,991,818. She contended Nye County with their small population, but large territory, is matched with Douglas County which is a more compact area with a larger population. She asserted the diversity is widespread and it is almost impossible to find commonality among the 17 counties. Senator Shaffer asked if the raises should be tied to some index, perhaps the Consumer Price Index. Mr. Teixiera stated this is so tough, he would hate to make recommendations on it. He stated, "Get the salaries up there. Get the constitution changed and say 'okay, we are going to hold it, and we do not want to hear from you people any more. Here it is, you are up to date, you go back and take care of your own community.' Start something." He said there is concern about who is in charge of whose salary. He questioned whether a sheriff is as good on the day he is elected, or is he better 4 years later when he has experience? Does someone come in automatically with all the knowledge in the world to do that job? Are legislators better when they are freshmen, than when they have experience? He stated he feels there should be a starting salary and then a salary for experience. Senator Shaffer explained the salaries have to be dealt with by the Legislature for 5 more years no matter what. He said there is no way to change it except constitutionally which requires 5 years. Jan Gilbert, Legislative Chair, League of Women Voters, urged the legislators to give themselves a raise. She stated she is sorry the bill is put together with the county salaries. She said salaries have to be raised incrementally. She suggested the future amount for the year 2000 would not directly affect the legislators now. She also suggested tying the increases to an index. Senator O'Donnell asked Ms. Gilbert why the legislators need a raise. Ms. Gilbert replied that she would like to see all kinds of people become legislators, who cannot under the current standard of payment. Senator O'Donnell stated: The point is, under every other aspect of our government, we have a separation of powers. But the only anomaly in all of that separation of powers is the fact that the Legislature is charged with raising taxes and spending money. We are the only branch that can spend money on their own salaries. I do not think the forefathers, who did not collect anything in terms of salary, realized this anomaly when they drafted the constitution. I am of the opinion that I, as a legislator, should never vote on my own salary, or on anyone else's future salary that sits here in this body. It is a conflict of interest. If you want to put that to the vote of the people, that is their decision. Do you see the anomaly? Do you see why it is difficult to go back to the population, the constituency and say 'I voted for my own raise.' Do you see why? It is not right. It is wrong. It is ethically and morally wrong to vote for your own salary. We raise every other salary here, not a stink -- nothing happens. We will leave this room with that bill and those salaries, nothing will happen. The people will not care. But if we vote a dime for ourselves, they will come unglued and it does not matter how much it is, they will be angry, because it is not moral. We need to change the constitution or we need to change who votes for this body's salary. Ms. Gilbert stated the federal government has the same problem, and that is what the legislators were elected to do. "You decide how much the teachers are going to get through their district. You decide how much the state workers are going to get. I think you have to bite the bullet and do it." Senator O'Donnell replied, "I say, someone else should decide what we get." Ms. Gilbert responded: I think you have to decide. I think that is where we have to raise it, and then let it go up incrementally and never have to do this again. Because I have come here every session to urge you to raise your salary. We are never going to see a raise in salary. What we are seeing is a Legislature that does not represent us. I know no single mother who can come here and do this sort of thing. There are very few working people who work at lower wage jobs who can come. I think what we are ending up with is a very select group of people who either are willing to give up their salary or can do it financially. I do not know. I cannot answer your question. David W. Wyble, President, State of Nevada Peace Officers Association, testified in favor of S.B. 84 (Exhibit H). He emphasized: The Governor has proposed that state employees receive a base rate increase of 7 percent. This is not enough. It does not even keep us up with the cost of living for the period since our last cost-of-living- adjustment in 1991. We need at least 12 percent over the next 2 years just to stay up with local government settlements. We are prepared to work with the Governor and the legislative leadership to find an equitable solution. Unless this inequity is corrected, the state will continue to lose qualified peace officers to local government. Stephanie D. Licht, Lobbyist, Elko County Board of Commissioners, stated the county commission does not oppose the raises, but asked the committee to look at benefits which are included by some counties. She submitted a letter to the committee (Exhibit I) which outlined the county commission's concerns. Carol Villardo, Nevada Taxpayers Association, separated the bill into two parts; the legislative proposals, and the county proposals. She stated the Nevada Taxpayers Association has no problem with the proposed legislative raise. She said there has been no raise since 1985. She opposes the $350 per month, and suggested the legislators set a nominal stipend for phones and postage for expenses incurred during the interim period. She asserted the county positions have not received raises since 1989 and there is merit in increasing the salaries to a level at the rate of inflation, which may be at 20 percent. She stated there is no reason for it to go above 20 to 25 percent. She understands the difficulty of trying to equalize the counties, but the factors used this year may not be the factors available 2 years from now. She strongly contested longevity pay, stating it is foreign in the private sector, and does not belong in the bill. She remarked she has been researching since 1989 and has found no one in the private sector who offers longevity pay. Ms. Villardo stated since 1989, the Nevada Taxpayers Association has asked for a constitutional change to allow the counties to set the salaries for the elected employees. She conveyed city council salaries are set by the city council. She remarked there are so many possibilities and changes which affect the budget. She requested a committee introduction for a bill to make that constitutional change. Senator O'Donnell explained the committee has encountered situations where they have assigned salary schedules. He asked what would happen if the committee gave the authority to set salary schedules to the counties? Would the lowest paid county continually ask for raises to be on the same level as other counties? He stated at least half of the counties would be below the average. Ms. Villardo responded she is asking the committee to look at a constitutional provision to allow the local governments to determine salaries within a very narrow frame. She stated the committee should consider that the counties do not have a problem with the county classification system. She stated if there is such a huge disparity about who is where, and the counties could not resolve it themselves, then the counties would have come to the committee for resolution. She stated that did not happen. Senator O'Donnell asked Ms. Villardo if the city officials are paid more than the county officials in any of the 17 counties. Ms. Villardo replied she does not have the answer to his question. Senator O'Donnell stated it usually is that the county official's salary is the cap and the city officials end up below that cap. Jerry Maple, Douglas County Sheriff, stated when he was president of the sheriff's association in 1986, they brought a list of qualifications for a sheriff's position to the Legislature. He explained the association supported qualifications required for the office. He said many other states have qualifications for their sheriffs. He asserted the association felt qualifications would build the office and lead to professionalism. He reported the Legislature told the association they were creating obstacles for anyone who wanted to run against them. Mr. Maple stated he was in his 5th term as the Douglas County Sheriff, having served 15 years in the position. He said he won by 81 percent of the vote the last time he ran for office. He defined the average term for a sheriff in the United States as 6 years. "I work the hours it takes to perform the job and that is more than 40 hours per week. I believe I earn every cent I make, and I earn a lot more." He said longevity is the Legislature's answer to not having requests for pay raises every 2 years. He said not to call it longevity, call it a cost-of- living-adjustment or something. He said a 19 percent raise for the past 4 years is great, but 25 percent is more appropriate since the sheriffs have not had a raise in 6 years. He stated: Senator O'Connell, if I come back here in 2 years and ask for a raise, you are going to throw me out of this place. In 4 years you will be frowning on me, but in 6 years, you might consider a raise. Well, it has been 6 years in the past, and a minimum of 4 years into the future. If you take a 10-year period of time, that equals 2.5 percent which is very, very low. If you get the salaries to where they should be, we might ask for an 8 percent salary adjustment next time instead of a 25 percent raise. If the Legislature would set our base salaries and say 'Counties, this is the minimum you can pay your elected officials' then let the county pay us whatever they want to pay us above that. Let them take the heat for that. If they want to pay me, like they do the fire chief at Lake Tahoe, over $80,000 per year, then I guess they will take the heat for that. I am thirty-seventh on our pay list in the county. I do not want to be number one, but I think I should be in the top 10 percent of the people that are being paid in our county for the job that I do. I'm making a little more than a sergeant, not quite as much as a lieutenant. There was something said about the people that work for us have to be qualified and we do not. If we are not qualified, how can we pick those top-notch people to work for us? How do we know the difference? I'm as qualified, if not more qualified, than my under- sheriff or my two captains, and those people are appointed by me. I could appoint you, Mrs. O'Connell, as my under-sheriff if I wanted to and no one could say anything about it. That's an appointed position by me. I appoint my staff. I appoint professional people because I am a professional person. I have always said I want the best people working for me. I want those people who want my job, because they are going to perform to their fullest. All I want is a fair shake. If the Legislature wants to set a minimum salary and let my county tell me what else I'm going to make above that, I'm happy. I do the job. We have come before this Legislature trying to make qualifications for our job. We believe in professional people sitting in that office of sheriff because it is a reflection on all of us. We want qualifications. Senator O'Donnell asked Mr. Maple if he would like to set his own salary. Mr. Maple replied "no." Senator O'Donnell questioned Mr. Maple why he would not like to set his own salary. Mr. Maple responded: I think Senator Jacobsen and Assemblyman Hettrick should be sitting there. I think those two gentlemen should tell you the job I do. They are my senator and my assemblyman. They know our county. I think if both of those gentlemen were sitting right there, they would say 'Sheriff Maple ought to be making that salary.' Fifteen years ago the senior senator of the county came in and put down the salary that the elected officials would receive because he went and talked to the people and the commissioners. He walked in and presented those things. Dave Kopelman, Citizen and former Lincoln County Commissioner, read a prepared statement to the committee. (Exhibit J). He asked the committee on behalf the Lincoln County Commissioners to pass S.B. 84 and give the elected officials pay commensurate with the officers of other counties. He stated the problems of county commissioners are enormous, citing problems with the nuclear waste dump. He said if a county pays mediocre wages, it gets mediocre people. Senator O'Donnell asked Alan Chamberlain, Lincoln County Commissioner, if he is willing to support the reclassification of Lincoln County. Mr. Chamberlain replied yes. Senator O'Donnell asked Mr. Chamberlain if he would like to vote on his own salary. Mr. Chamberlain replied, "That would be hard. I would rather not." Senator Porter stated no one knows better than the local board how hard they work, and how much they should be paid. "We should have their input before we make a decision how much they should be paid." Mr. Kopelman stated he does not believe commissioners should be setting their own salaries, it should be set by the Legislature. Leola H. Armstrong, Executive Director, Common Cause, stated this is the fourth time her board of governors has sent her to the Legislature to support a salary increase for legislators (Exhibit K). She quoted from the Bible, Luke 10:4, "A laborer is worthy of his hire." She stated during the 30 years she worked for the senate, she did not think any of the senators who voted for those "puny salary increases" were immoral. She stated she felt they had the raise coming and the senators knew they had a raise coming. She stated Common Cause has no problems with the pension increase and with the $350 per month stipend as long as it is vouchered. She said, "The law gives you the right to vote on this." Ben Graham, Legislative Representative, Nevada District Attorney's Association, testified regarding S.B. 84. He stated he feels there is consensus among elected officials and citizens that a pay increase is warranted somewhere between 19 and 25 percent. In response to Senator O'Donnell's comments regarding conflict of interest, Mr. Graham said, "You have been mandated by your forebearers to do this. You have been selected by your 180,000 constituents to do this. I think if you act responsibly, and I know you will, you are going to be able to take the 'heat', for lack of a better word, because you will act responsibly and you will do a responsible thing and you won't get burned because of it." He continued his testimony by suggesting splitting the bill into two sections; one regarding legislators, and one regarding elected officials. Gary Yles, Citizen Employees International Union, Local 1824, commented the union does not begrudge anyone a salary increase, but suggested it be tied to a index. He stated the Consumer Price Index for the past 4 years has been 12 percent and the proposed 25 percent outstrips this index. He stated, "We feel it is unconscionable to raise any public official's salary a large amount, unless you are also willing to support that same amount for classified employees of this state." Senator O'Connell adjourned the meeting at 5:11 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs February 27, 1995 Page