MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session March 20, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:32 p.m., on Monday, March 20, 1995, in Room 227 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: Darrel Daines, State Controller Barbara Willis, Director, Department of Personnel Fred Turnier, Assistant Director, Clark County Sanitation District Thomas J. Grady, Executive Director, Nevada League of Cities Mary Walker, Director of Finance and Redevelopment, Carson City Guy Hobbs, Lobbyist, Clark County Marvin Leavitt, Legislative Coordinator, City of Las Vegas Carole Vilardo, Nevada Taxpayers Association Robert Hadfield, Executive Director, Nevada Association of Counties Bob Dickens, Director, Office of Governmental Relations, University of Nevada, Reno Jim Richardson, Lobbyist, Nevada Faculty Alliance Ande Engleman, Lobbyist, Nevada Press Association Irene Porter, Executive Director, Southern Nevada Homebuilders Association Julie Wilcox, Las Vegas Valley Water District, Southern Nevada Water Authority BILL DRAFT REQUEST 31-788: Allows use of modern auditing and sample techniques to determine correctness of claim and availability of money. Darrel Daines, State Controller, requested committee introduction of Bill Draft Request (BDR) 31-788. He stated this bill draft request had two parts to it. He said it would allow the State Board of Examiners to adopt modern auditing techniques. He explained the second part of the bill removes the language changes regarding appropriation and authorization of payment. He described this as listed as a task of the State Board of Examiners. A computer conducts this task, he explained; it is not done by the State Board of Examiners or any of their designees. He testified he has spoken with John P. Comeaux, Director, Budget Division, Department of Administration, and Mr. Comeaux has no problem with either portion of the bill or its language. SENATOR SHAFFER MOVED FOR INTRODUCTION OF BDR 31-788. SENATOR O'DONNELL SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS RAGGIO, TOWNSEND AND TITUS WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 18-787: Eliminate controller responsibility for submitting recommendations pertaining to agencies' performance. Mr. Daines requested committee introduction of BDR 18-787. He stated this bill is to modernize the language of a law that has been in effect since the beginning of Nevada's Constitution. He said section 2 affects the controller due to language changes. He explained it will lessen the cost of public expenses for public agencies. He testified the controller's office does not have an audit function to fact-find in various agencies. He added it is not a task the controller's office can perform. SENATOR RAGGIO MOVED TO INTRODUCE BDR 18-787. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 23-918: Make changes concerning filling of state positions. Barbara Willis, Director, Department of Personnel requested committee introduction of BDR 23-918. She stated this bill draft request would modify Nevada Revised Statutes (NRS) 284.265 which is one of the primary foundation points of the state's merit system. She explained it requires that agencies consider only the top five candidates on a hiring list when filling a position. She explained those individuals are selected based upon their scores in a qualifying examination. She stressed when applicants' scores are tied, merit is not served. She remarked the Department of Personnel is asking that they no longer have to break up tied scores on examinations. She noted by doing so, they could certify all applicants whose scores are in the top five. She provided an example of this to the committee (Exhibit C). She explained sometimes when they have to break up tied scores, they have to randomly choose between two or more applicants who are fully qualified, to provide only one name on the top-five-rank list. She stated this prevents people who are fully qualified from being considered. She proposed to change the law to certify all applicants who are fully qualified. SENATOR RAGGIO MOVED FOR COMMITTEE INTRODUCTION OF BDR 23-918. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** Fred Turnier, Assistant Director, Clark County Sanitation District (CCSD), asked the committee for a bill draft request. He stated in the last legislative session chapter 485 of the NRS was amended requiring public utilities, such as the CCSD, to join the association of utility owners, to receive notification of excavations. He explained this is the "call before you dig" program. He added they receive an average of 80 calls per day on this program, yet the sewer lines in the Las Vegas valley are quite deep, averaging 8-20 feet below the surface of the ground. He said the sewer lines are never hit due to the depth of the lines. He stated the CCSD is asking to be exempted from that provision and commented this is not a precedent; other agencies are exempt such as the Nevada Department of Transportation. He gave the committee written testimony (Exhibit D). Senator O'Connell asked Mr. Turnier if this is costing the taxpayers. Mr. Turnier replied when it was first enacted, the CCSD was not able to join the association because of legal terms which have now been changed. He stated they have just recently had to join and they might spend approximately $100,000 per year. Senator Shaffer asked Mr. Turnier if there is a penalty when a contractor punctures a line. Mr. Turnier replied there is no penalty, because the CCSD has to go out and mark where the lines are. If the contractor hits the line, the CCSD has to repair it. He said CCSD got it both ways. SENATOR SHAFFER MOVED TO REQUEST A BILL DRAFT. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 23-666: Makes changes concerning collective bargaining of local governments. Thomas J. Grady, Executive Director, Nevada League of Cities, requested the committee introduce BDR 23-666. He stated this bill draft request restrains managerial employees from representing management in collective bargaining issues when the same umbrella union represents them. He explained the second portion of the bill draft request revises the date of arbitration awards to a date that the arbitrator signs. It will not allow retroactive payments. SENATOR RAGGIO MOVED TO INTRODUCE BDR 23-666. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS AND TOWNSEND WERE ABSENT FOR THE VOTE.) ***** BILL DRAFT REQUEST 19-665: Authorizes confidentiality of applicants' names until finalists have been designated. Mr. Grady requested committee introduction of BDR 19-665. He explained this bill draft request would enlarge the pool of candidates. He added the short list of finalists would be open to the public process for review and final selection. Senator O'Connell asked why the Nevada League of Cities needs this bill. Mr. Grady responded that several candidates are reluctant to apply because if they do not make the short list, the word will get back to their present employer. It would put the candidate in a detrimental position. He stated if 10 people are chosen out of a list of 100 people who apply, then those are the people whom they should review and scrutinize. He said they should not publish the names of the other 90 candidates. Senator O'Connell asked if Mr. Grady wants to have closed meetings regarding recruitment and selection of these people. Mr. Grady replied, "Yes, for the initial review." He said they should take the initial applications, review, cut to a short list, and then publish the list. Senator O'Connell stated, "We have just gone through something like this at the university." SENATOR RAGGIO MOVED TO INTRODUCE BDR 19-665. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS, TOWNSEND AND O'CONNELL VOTED NO.) ***** SENATE BILL 248: Revises provisions regarding approval by general obligation bond commission of certain types of municipal funding. (BDR 30-109) Senator O'Connell stated this bill is based on S.B. 557 of the Sixty-seventh Session that established a debt management commission to help rural counties with bonding issues. SENATE BILL 557 OF THE SIXTY-SEVENTH SESSION: Makes various changes regarding municipal funding. Mary Walker, Director of Finance and Redevelopment, Carson City, testified S.B. 557 of the Sixty-seventh Session did change the debt management policies for the entire state of Nevada. She commented these policies have been touted nationwide as the first statewide policies that have been put into effect. She stated after working with S.B. 557 of the Sixty-seventh Session, they found over the last 2 years that it needs fine tuning. She explained a committee (composed of local government officials, Nevada Association of Counties, League of Cities, and the Nevada Taxpayers Association), looked at appropriate language. Guy Hobbs, Lobbyist, Clark County, gave the committee a section by section overview of the bill. He provided an overview of S.B. 248. He explained section 1 reestablishes the General Obligation Bond Commission (General Obligation Bonding Commission) as the Debt Management Commission by changing the name. He further explained short-term financing, not repaid with a special tax, is exempt from NRS 354.430. He stated these short-term financing situations would go to the Department of Taxation. He said section 2 also changes the title. Mr. Hobbs expressed that section 3 deals with the frequency of the meetings. Debt management meetings are required monthly for counties with populations more than 400,000. The bill requires that counties with a population of 100,000 to 400,000 schedule at least quarterly meetings. Counties with a population of less than 100,000 would meet annually or as needed. He stated scheduling monthly meetings allows the counties to meet some critical deadlines of the General Obligation Bonding Commission. Mr. Hobbs outlined section 4 as further clarification that municipalities file a "Statement of Contemplated Debt," which the law of last session established. He explained this section clarifies the content of all required documents. He stated it consolidates the filing of all required documents with the Debt Management Commission and the Department of Taxation on or before July 1 of each year, as opposed to the separate filing dates previously set out in law. He explained section 4 adds a new requirement for inclusion of the financial officer's name, address and phone number in the required statement. He commented this gives notice to all entities in a county that a change has been proposed. He asserted it will provide information to all the entities to bring to the Debt Management Commission meeting. He repeated it will alert all entities. Senator O'Connell responded this bill is very important, considering the events taking place in White Pine County. Mr. Hobbs replied the closer counties get to combined tax rates which approach the $3.64 tax cap; the more important it is for all entities in a county to be aware of all proposals. He explained this section of the bill allows notification to the other entities of proposals. Mr. Hobbs stated section 5 changes the approval of the Debt Management Commission from two-thirds of the membership to a majority of the membership. He explained to the committee this reflects the inability of some counties to attract all members of the Debt Management Commission to the meetings. He commented it clarifies the Debt Management Commission will not approve a proposal from a municipality unless there is disclosure in the Capital Improvement Plan. He stated property tax estimates for repayment must be in conjunction with assessed growth and evaluations and include the effect of any other special levy in existence in the county. He asserted it will not cause the combined property tax to exceed the limits established by law. He concluded the entities must negotiate with one another to bring the tax limit into compliance. Senator Raggio asked the significance of eliminating the language, which defines an emergency, page 5, lines 17-25. Ms. Walker responded the language on page 4, lines 7-11, defines the county can update their plans annually. She stated, instead of declaring an emergency, the county will update their Capital Improvement Plan and Debt Management Plan to submit them to the General Obligation Bond Commission. She explained the Capital Improvement Plan and the Debt Management Plan will help the Debt Management Commission by providing an open forum for hearing the plans. She pointed out the change from two-thirds approval to majority approval is because some counties have difficulty meeting the quorum. Mr. Hobbs continued his testimony by outlining section 6. He stated section 6 language institutes meetings under the open meeting law. He said it requires the chief financial officers of all county entities receive notification of the meeting of the Debt Management Commission. He stated it also eliminates the old "90-day" rule. He stressed this rule could jeopardize an entity's ability to bring an item back before the Debt Management Commission and place it before the voters quickly. He explained under prior law if the Debt Management Commission did not approve an item, it could not be brought back for reconsideration until 90 days had passed. Mr. Hobbs said section 7 states the items the Debt Management Commission will consider when making its judgement regarding a proposal. He stated this section has not changed considerably; it reconstructs the grammar of the section. He told the committee section 8 has no substantive changes. He revealed to the committee that section 9 changes the various effective dates, but does not change the debt or special levies approved prior to July 1, 1995. He explained sections 10-16 continue the change of terminology in other sections of the statutes to replace General Obligation Bond Commission with Debt Management Commission. He added section 17 reestablishes the membership of the General Obligation Bond Commission as the membership of the new Debt Management Commission. He said section 18 makes the bill effective July 1, 1995, if it is passed. Senator O'Connell asked Mr. Hobbs to explain the problem with the assessors. Mr. Hobbs responded he may have missed that part in his summary. He explained the statutes require that assessors provide an assessed evaluation estimate for the term of the proposed bond. He stated occasionally this required a 20- to 30-year estimate. He explained the assessors were "uncomfortable" with the statistical validity of these estimates. He stressed the assessors generally make conservative estimates because of that concern. He stressed this bill would propose those estimates become the responsibility of the municipality. He noted Clark County would probably combine forces between the Department of Finance, the County Assessor's office database, and the Planning Department to set forth the estimates for Clark County. He assured the committee that the estimates should be as realistic as possible for planning purposes. He told the committee this part of the bill is on page 5, lines 2-5. Senator Raggio asked Mr. Hobbs to explain section 4 where the commission requires the governing body submit an addition to the plans it has been submitting. He asked about the "discussion of fiscal ability to handle or service the debt." Mr. Hobbs explained this section continues to clarify the type of information presented to the Debt Management Commission. He stated it is general policy to provide as much information as possible to the Debt Management Commission. He told the committee, only recently has the Debt Management Commission seen a 3-Year Capital Improvement Plan or Statement of Contemplated Debt. These documents make them aware of what other entities might be asking the Debt Management Commission to approve in the coming months. He concluded it provides clarity to the type of information that is important for decision making. Senator Raggio asked Mr. Hobbs to further explain what will change because of section 1. Mr. Hobbs stated section 1 retitles the commission. Senator Raggio asked about changes regarding short-term financing. He stated the current law includes certain short- term financing. He asked if these are exempted in the proposed law? Mr. Hobbs responded the proposed law would exempt those short- term financing obligations, which would not be repaid with a special tax, to go directly to the Department of Taxation. Senator Raggio responded, "In section 1, we are exempting some forms of financing which presently would come before the commission, specifically, short-term debt financing. What is the reasoning, again, for that?" Ms. Walker responded before the 1993 law, local governments took short-term financing to the Department of Taxation through chapter 354 of the NRS. She explained after the 1993 law, short-term financing went to the Department of Taxation and to the General Obligation Bond Commission. She stated requests for short-term financing require a month of additional time, paperwork, and expenses. She cited an example of a $200,000 fire truck. She said currently short-term financing requests have to go to General Obligation Bonding Commission and to the Department of Taxation for approval. She stated if they went out for a $20 million dollar bond, they only have to go to General Obligation Bonding Commission. She emphasized there are two mechanisms for review on short-term financing, and only one mechanism for review on long-term financing of major bond issues. She added the commission discussed elimination of either the General Obligation Bonding Commission review or the Department of Taxation review. She said this will eliminate the double review. She testified the review of the smaller, short- term obligations should go to the Department of Taxation. The Department of Taxation is familiar with the financing of the smaller local governments and has not allowed some short-term financing. She remarked it is to resume the old methodology and eliminate the overlap. Senator Raggio asked what an entity does when they want short- term financing paid by a special tax. Ms. Walker responded with this bill, this situation would go to both the General Obligation Bonding Commission and the Department of Taxation. She stated if they fund the short-term financing out of current revenues, it would only go to the Department of Taxation. Senator O'Donnell asked why they deleted the 30-day notification from section 4 of the bill? Ms. Walker stated the problem in section 4 was the different time frames for requiring these types of policies. She explained the Department of Taxation had one set of requirements and the General Obligation Bonding Commission had another set. She added managing different time frames is difficult. She said the 30-day notification is still required; but the General Obligation Bonding Commission has to meet at least once a year, any time in July, under current statute. She noted the General Obligation Bonding Commission could meet July 29 for Carson City and meet July 1 for Clark County. She explained the notification is needed 30 days in advance for General Obligation Bonding Commission, but needed at different times for the Department of Taxation. She explained this section is to make all the time frames the same to give everyone information simultaneously. She added their budgets are due to the Department of Taxation on June 1. She stressed all of this information should be available June 1 and can be supplied to the committee then. She commented it is a matter of consolidating when they would provide this information to whom. She stated it is easy to miss the different time frames. She stated the General Obligation Bonding Commission does not set their dates with the 30-day notification in mind. She asserted the changes in this section of the law will allow them to work more efficiently. Senator O'Donnell asked Mr. Hobbs to explain section 5, subsection 4. Mr. Hobbs responded that it provides the Debt Management Commission statute to deny approval of a plan that would exceed the $3.64 tax cap. This statute would require an agreement to offset needed capital in exchange for reducing the tax cap which is in place. He stated this section does not allow the Debt Management Commission to approve a proposal unless it fits within the $3.64 cap. Senator O'Donnell asked Mr. Hobbs to provide a concrete example of how this would work. Marvin Leavitt, Legislative Coordinator, City of Las Vegas, cited White Pine as an example. He explained in White Pine County there is the school district, the county, the City of Ely, and mostly small towns. He explained each of those has a rate and several of those overlap other rates. He said if the county of White Pine, the school district and the hospital each have a rate that extends throughout the county, but a rate levied by the City of Ely would only include the City of Ely. He stated the rate levied by Ruth, McGill or any smaller city would only include that small community. He said when all the overlapping rates are added (the state, county, school, and hospital), the total must be under the $3.64. He said if McGill levies a 20-cent rate, it might throw the total over the $3.64 cap. He explained then they are technically violating the cap. He explained perhaps the 20-cent levy in McGill would equal $9,000. He told the committee the school district might offer to provide McGill with $9,000 if they do not levy the tax rate. He suggested such an offer would keep them within the $3.64 tax cap. He commented the offer would have a minimal effect on the school district and they would solve the tax rate problem. He concluded this is the kind of situation they are trying to control. Mr. Leavitt explained some problems that are occurring in White Pine County. He told the committee White Pine County School District received approval from the General Obligation Bonding Commission and the approval from the voters. He stated no one in White Pine County understood the effect on the cap rate. He said at a Local Government Advisory Committee meeting earlier this year, no one knew what the effects of the rates in White Pine County would be. He commented this is one piece of information that they have requested from White Pine County which has not been received. He reminded the committee when a county plans to issue a debt, it is important to forecast the effects on all of entities in the county. When one entity issues a debt, they have reduced another entity's operating rate or precluded a different entity from issuing debt they had planned. He concluded it gives structure to the whole process. Mr. Leavitt continued his testimony regarding White Pine County. He stated they issued only a portion of the total debt they could have issued. He told the committee White Pine County has been unable to repay the portion they issued, but they still have the authority to issue additional debt. He stressed to the committee that White Pine County has not filed the required financial reports. He asserted the right of White Pine County to further issue debt will compound the problem. Mr. Leavitt commented that notifying all entities when a debt issuance may occur is very important. Mr. Leavitt explained some technical problems in the bill draft requests. He explained the language requires clarity. He stated that a county will not issue subsequent debt unless they have filed all their financial reports on time. He told the committee the bill writers will have the appropriate language ready for the bill shortly. Senator O'Connell asked Mr. Leavitt about White Pine County's ability to borrow money that would normally be considered a loan under a lease agreement. She asked him if anything in the current law prohibits this. She additionally asked him if pending language addresses this. Mr. Leavitt asserted the law requires clarification. He suggested a provision prohibiting an entity from receiving money from a lease (to purchase specified items) and then spending that money on something else. He insisted they must include language in the law to prohibit this situation. He said when an entity negotiates a lease for school buses, they should be precluded from taking the cash in hand and spending it on general operations. Senator O'Connell asked Mr. Leavitt to clearly define this in the law. Mr. Leavitt drew the committee's attention to page 6, section 7, line 11. He stated this is existing language. He explained sometimes there are competing needs for debt issuance in a county. He stated a mechanism must be included in the law to address which of those competing needs will most serve the taxpayers. He added the proposed language will remove any inconsistency in the bill. Mr. Leavitt noted specific language in the bill on page 5, line 37 that refers to the NRS regarding the open meeting law. He stated this language in the bill requires observation of all open meeting statutes. Senator O'Connell asked Mr. Leavitt to address the issue of short-term bonds for the committee. She asked him what the time limit is on short-term bonds. Mr. Leavitt responded short-term financing is a maximum period of 10 years. He stated there are several purposes for short- term financing which could be related to capital improvement projects. He said if a loan is for a period longer than 5 years, then it has to have a life as long as the debt. He told the committee that short-term financing can pay for short-term operating problems. He expressed that doing so is legal. He emphasized that they pay short-term financing from many different sources. He said the debt management bill from last session tried to control anything that relates specifically to the property taxes. He said the Debt Management Commission should review short-term financing for capital improvement projects. Carole Vilardo, Nevada Taxpayers Association, suggested amendments to the bill draft requests. She told the committee one problem in White Pine County was the debt projection which had errors. She stressed White Pine County was betting that Magma Copper would be on-line a year earlier than they were. White Pine County was counting on a "huge infusion" of assessed value. She suggested the Department of Taxation review any project that has sold bonds and may have bonds left to sell. She stated the Department of Taxation could review the situation in the county and direct that entity not to continue with the sale of the remaining bonds. She added that if an entity disagreed with the Department of Taxation's decision, they could appeal the decision to the Nevada Tax Commission. She stressed this is an additional safeguard needed when entities are looking at a 6-year window for selling debt bonds. She mentioned mining operations are volatile in the rural counties. Senator O'Connell asked Ms. Vilardo when a situation alerts the Nevada Tax Commission to take action? She stated she thinks the Nevada Tax Commission should have taken action 2 years ago on this issue when the debt management legislation was passed. Ms. Vilardo responded when the Nevada Taxpayers Association heard about the reports they requested copies of reports from entities they had been watching. She told the committee they discovered 3 months after the reports were due that White Pine County was negligent in filing. She stated Howard Barrett, Nevada Taxpayers Association, and she experienced difficulty getting documents and questioned validity of documents. She informed the committee they had looked at sanctions against White Pine County and the only sanction available to them is to go for charges of malfeasance. She stressed there was nothing in the statute to give the Nevada Tax Commission sanctioning power. She reminded the committee that the Legislature held school districts harmless in 1981. She reminded the committee it took legislation during last session to get the school district to "buy-down." She recommended the committee institute appropriate legislation. She restated that White Pine County has compounded their problems for the last 2 years. Robert Hadfield, Executive Director, Nevada Association of Counties, stated a set of simultaneously occurring circumstances created a serious and difficult problem for the county. He testified this problem highlighted the failures of the current mechanisms in the law. He explained the school district did not have a finance officer. He added a major bond issue construction project was underway without adequate financial management. He told the committee that the proposed bill draft request will keep entities from failure to file financial reports on time. He suggested it is imperative to keep this situation from occurring again. He said the Nevada Tax Commission must look at the effect of all entities on each other. Ms. Vilardo stated Topaz Lake requested a 30-year 50-cent tax rate for roads from the Douglas County General Obligation Bonding Commission. The Douglas County General Obligation Bonding Commission turned them down saying Topaz Lake could have the 50-cent tax rate for 5 years, and then a 25-cent tax rate per year afterwards. She emphasized the taxpayers defeated the tax rate, but it is an example of how the General Obligation Bonding Commission has parameters to view the needs of all entities in an area. Mr. Grady testified he believes all the loopholes have been closed and only time will tell. Senator O'Connell closed the hearing on S.B. 248 and opened the hearing on S.B. 262. SENATE BILL 262: Authorizes public agencies to delegate authority to ratify interlocal contracts. (BDR 22-745) Bob Dickens, Director, Office of Governmental Relations, University of Nevada, Reno, asked the committee to consider and do pass S.B. 262. He stated this is a simple housekeeping measure. He explained state agencies contract with University of Nevada, Reno for faculty expertise or laboratory and research services. He noted it may take 6 months to get a contract approved. This would allow the Board of Regents through the Chancellor to delegate the right to sign interlocal agreements. He asserted he could cite examples of the lengthy amount of time it takes to process these interlocal contracts. He stated passage of S.B. 262 would cut red tape and improve the efficiency of the approval process. Senator O'Connell asked Mr. Dickens if there is a limit set on the contracts which are delegated. Mr. Dickens responded the amount varies with the task requested by each agency. He said they have more problems with the smaller contracts. Jim Richardson, Lobbyist, Nevada Faculty Alliance, testified this bill will allow the system to work better. He stated it is in the interest of all concerned to delegate this authority to get the work done. He said scheduling Board of Regents meetings for contract approval is sometimes difficult. Ande Engleman, Lobbyist, Nevada Press Association, testified the Nevada Press Association is against S.B. 262 as it is presently written. She stated it will take information usually presented in the public arena, and close the hearing on it. She stressed it affects contracts approved by the State Board of Examiners to county contracts. She asserted delegation of contract approval to staff means that it is no longer liable under the open meeting law. She said groups would meet behind closed doors to determine price without public input. She noted if the public could question the contract process before it became final, there would be no problem with the bill. Senator O'Connell closed the hearing on S.B. 262 and opened the hearing on A.B. 138. ASSEMBLY BILL (A.B.) 138:: Exempts certain arrangements by general improvement districts with private developers from certain laws governing public contracts. (BDR 25- 183) Mr. Turnier testified for A.B. 138 which will amend NRS 318.140. He explained to the committee he would be talking primarily about section 1, subsection 2, primarily lines 19 through 25. He stated CCSD is asking that when a private developer extends a sewer line and if there is participation from a district for part of that extension that they be exempt from chapters 332, 338, and 339 of the NRS, which is the Public Works Act and its requirements under that act. Mr. Turnier explained for the past 20 years the district has been partners with private developers in putting in main line extensions throughout the Las Vegas valley. He stated they have had good luck with this process, "oversizing." He related a recent district attorney's opinion. This opinion advised CCSD, under the current law, if a public agency participates with a private developer on a project, then it is considered a public works project and all the provisions of the Public Works Act apply. He explained to the committee this would increase costs for the developer and for the district. He drew a graphic on the board to demonstrate "oversizing." Senator O'Connell asked Irene Porter, Executive Director, Southern Nevada Homebuilders Association (SNHA), why the district attorney rendered this opinion? She inquired why it had surfaced after 20 years? Ms. Porter explained to the committee that the SNHA was working with CCSD in developing a new sewer line main extension ordinance in Clark County. They had almost completed the work on the ordinance, and there were main line extension agreements pending in Clark County. These agreements required review by the district attorney's office. Upon review by the district attorney's office, they wrote a memo after January 1, 1995, stating the projects and the ordinance were not in accordance with state law. She stated all the groups came together to get a bill enacted because there are seven pending projects which cannot get started. She explained these projects are not only of benefit to residential, but commercial areas as well. She said some of this projects will serve existing population areas. They are waiting to get a bill processed to make them legal after 25 years. Senator O'Connell asked if this is a new district attorney? Ms. Porter responded it was from deputy district attorneys. Senator Titus asked how this bill fits with previous testimony on other bill draft requests. Ms. Porter answered this bill applies to the Clark County Sanitation District and the Las Vegas Valley Water District. She stated this bill had started in the Assembly and they have drafted a companion bill authorizing cities and counties to have these same provisions. She explained the companion bill will broaden it to encompass cities and counties, not just Las Vegas. Mr. Turnier explained "oversizing" to the committee. He explained it is a good way for the sanitation district to get their pipes installed at a good price. Senator O'Donnell asked if the bill was to be in effect upon passage and approval? Ms. Porter replied, "Yes, upon passage and approval." Julie Wilcox, Las Vegas Valley Water District, Southern Nevada Water Authority, stated the issue is the same for the water district. She testified A.B. 138 clarifies what they have been doing in the law and it does save time and money. She explained it keeps them from having to dig up streets a second time to install the correct size pipe. SENATOR O'DONNELL MOVED TO DO PASS A.B. 138. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ***** The meeting adjourned at 4:15 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs March 20, 1995 Page