MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session April 27, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Thursday, April 27, 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 R. O'Donnell Senator Dina Titus Senator Raymond C. Shaffer COMMITTEE MEMBERS ABSENT: Senator William J. Raggio (Excused) STAFF MEMBERS PRESENT: Dana Bennett, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Robert Hadfield, Executive Director, Nevada Association of Counties Eric Cooper, Lobbyist, Nevada Sheriff and Chiefs Association Ben Graham, Lobbyist, Nevada District Attorneys Association Mark Scofield, Assessor, Clark County Marvin Texeira, Mayor, Carson City Jim Regan, Commissioner, Churchill County Richard L. Carver, Commissioner, Nye County Alan Glover, Clerk/Recorder, Carson City Senator O'Connell opened the hearing on Senate Bill (S.B.) 84. She explained this would only be a hearing on S.B. 84 due to the absence of Senator Raggio. SENATE BILL 84: Increases compensation of various public officers. Robert Hadfield, Executive Director, Nevada Association of Counties, expressed some of his concerns regarding S.B. 84. He told the committee that the Nevada Association of Counties (NACO) worked very closely with the Commission to Review Compensation. He stressed this is the second time NACO has worked very closely with a legislatively appointed body to review salaries. He stated the commission had followed the legislative guidelines when addressing this issue. Senator O'Connell informed the audience that they have deleted the salaries for the legislators from the bill. She reminded the audience that the current printing of the bill does not include the legislators. Mr. Hadfield continued his testimony by saying the biggest issue deals with the inconsistent length of time the county elected officials go without a legislatively enacted salary increase. He explained the management of each county is forced to negotiate annually with county employees, but the elected officials receive no raise or benefits. He said: There is no realistic assumption that they [the elected officials] will be allowed the opportunity to have a pay raise. The last pay raise, as you know, was in 1989. I would be the first one to say that was a very difficult situation and I do not think any of us would say that process worked as well as we would like to see it work. That was responding to an even longer period of time without pay raises. So there is a great deal of confusion about what people get a pay raise for, do they get a pay raise for the time that they did not get a pay raise? Because those raises have, historically, not been equal to what the other county employees who work for them received over that period of time, so they are still behind when they get the raise. Then they have this uncertain period of time into the future which they know they are subject to whatever the process may be for the raise. So, we were hopeful over the last 4 years that we had, at least, identified a process which would provide an avenue for that. The difficulty now is further confused by considerable discussion about saying, `This is, after all, a county issue. You ought to set your own salaries because you have a relationship to the public.' We understand there may be a bill processed doing that. Senator O'Connell interjected that some counties are experiencing financial difficulties. She stated the committee considered speaking with the counties about their financial condition before completing work on this bill. She stressed it would be unfair for the committee to second-guess financial issues. Mr. Hadfield noted that if the Legislature chooses to process such a bill, it would be the year 2002 or 2004 before elected county officials receive a raise. Senator O'Connell responded that this was incorrect. She explained that whatever percentile pay increase they merited would be given to the elected officials now. She stated after this pay raise, the bill will determine if pay raises are determined by ballot by the citizens. She said there would be a raise for elected officials when the bill is signed. Mr. Hadfield stressed that fair compensation must be a factor in the bill. He asked the committee to consider the salary commission's recommendation of 25 percent. He explained to the committee this increase would cover the 6 years down the road that it would take for the counties to set salaries, plus the 7- 8 years when there have been no salary increases. He commented, "That is not even decent for 13 or 14 years." Senator O'Connell responded: We would not do that. The top figure that has been talked about, because that is what the private sector has gotten, is 19 percent; so that would be the most that you could think about. I do not think anyone on the committee is considering the 25 percent. You need to know this hasn't been decided; but I think the top would be, as I said, what the private sector has gotten over the same period of time, which is the 19 percent. Mr. Hadfield stated the private sector increase from March, 1990 to March, 1995 was 20.16 percent. He told the committee this is the basis for his proposal to Senator Raggio. He asserted the 20 percent in his proposal is equitable to the benefits which were received by private sector workers in the same period of time. He included his concerns regarding longevity pay in his remarks to the committee. He stated there have been rumors that the committee will be eliminating the longevity pay provision from the bill. Senator O'Connell responded to Mr. Hadfield's concerns. "The understanding is not to increase it from 1 to 2 percent." Mr. Hadfield commented that the salary commission suggested that increase. He stated given the fact that the employees who work for the county elected officials have a bargaining process every year or 2 years, the 1 percent longevity pay accomplishes nothing. He explained about the Consumer Price Index, negotiations for salary increases, longevity pay, and the need to establish a middle ground. He reminded the committee the salary commission did not propose a change in the salary cap. Mr Hadfield testified: We have to say the 2 percent does not accomplish anything more than accelerate your achievement of the cap, but in order to do that, you have to survive and be reelected. That 2 percent is totally in the hands of the people who elect these county officials to office. If they feel that 2 percent increase...that they are not worth that...clearly they can make that an election issue and those people could perhaps, not survive an election. These are the people that are legally responsible for the actions of the employees in their office. Just as you, they are the ones that have to stand the test of reelection. We felt 2 percent was realistic. Senator O'Connell asked Mr. Hadfield if the salaries should be set at the county level? Mr. Hadfield responded it is a difficult, county by county issue. Senator O'Connell asked the audience for a show of hands for those who did not want salaries to be set at the county level. Senator O'Connell noted It was an almost unanimous show of hands. Eric Cooper, Lobbyist, Nevada Sheriff and Chiefs Association, addressed the issue of qualifications for county elected officials. He stated their association tried two sessions ago, to pass a bill for qualifications for sheriffs. He told the committee it did not pass because of the Assembly government affairs committee. He cited that the qualification for Governor is and qualifications for President of the United States are age and citizenship. He addressed a few pay raise issues: Madame chairman, you told us to be candid, so I will be candid. One of the statements that is made over the years, whenever an elected official comes forward to lobby for a pay raise is, 'You knew what the job was when you took it.' We do. We understand that. We knew what the job paid. We also go into it understanding that there will be periodic pay raises granted by the Legislature over the years. That has been a long period of time between those pay raises. We do accept the pay that comes with the job when we run for the office. It is no secret to you from Clark County that my boss was Sheriff Moran, and I made 40 percent more salary than he did and I was his second in command. I don't often make that statement publicly, but I think it is a very real consideration for members of this committee. That occurs across the board with sheriffs in the State of Nevada, that many of their subordinates, down to the rank of lieutenant, make significantly more than their sheriff does. I think that is a real consideration of this committee, as we continue to hold down the salaries of the professionals who run for these offices, and eventually, as the salary does erode, the people who are well-qualified will not run. A lot of these small county sheriffs certainly don't make much money. I would like you to consider these things when you are considering our proposal of this bill. Mr. Hadfield added: The tie-in to this is the classification system. I know there is a lot of concern about the classification system. Over the years we've looked at the classification system; as I testified to before, we have not been able to figure out a better system unless you just ignore it. The part he's talking about, there's some built in compensation in those classes. By that I mean, when a county grows...and I agree with you there can be some assessed valuation variations, but population is still a pretty good indicator. When there is growth in that regard, that usually means there is growth in the community, there's development in the community, there's change in the community. I think Douglas County is an excellent example of that. Douglas County was not always where it is. When you have that kind of change, one of the ways this present pay system allows us an avenue to address part of that issue, is by reclassifying counties and recognizing that they're no longer the smallest county. ...Yes, it does result in larger percentage increases for some people, but in the absence of that, a sheriff in smaller counties would not be there. We are faced with the situation where we have professionals working for us now that are only there, hoping they will be able to be reclassed because the similar jobs and structure in their community has come up and they have been frozen at a status that implies that they are in a whole different economic population dynamically driven situation. That is why we continue to work with that system. We have not been able to figure out a better system. There are flaws with it from time to time, we acknowledge that, but I think over time you would say it has worked as well as anything else we can come up with. That is why we have made recommendations for changes in that. Ben Graham, Lobbyist, Nevada District Attorneys Association, testified regarding S.B. 84. He stated: I've been in a fortunate position over the years where I have never really had to go anyone to ask for a raise. There's been a built in system. I work as a deputy; with the proper amount of work, training and duties I have, a raise is something that can be anticipated and looked forward to on a regular basis. Speaking on behalf of the 17 district attorneys in the counties, I'm here asking for a raise for them. If all goes well, I'll be getting a raise in May. I'm asking for you to consider giving these elected officials a raise similar to the raises we've gotten in our own departments. These are not far off from what the private sector has gotten over the past few years. When you say 19, 20 or 25, that sounds horrible, but remember we have to divide it by 4, 5 or 6 years so it does not come out to a great large amount. My district attorneys are asking for something comparable to what their classified people have gotten. The other thing about qualifications, as all of you know, every district attorney must be a member of the Nevada State Bar Association. They must have gotten an undergraduate degree, they must have gotten a law degree and passed a bar examination. Their qualifications are set forth on that basis and they have a lot of years of training and education to get to where they are, and then they must stand for election. We have some excellent district attorneys. We have graduates from some fine law schools serving out in the smaller communities in hopes that eventually they will receive some increase. The third point I want to talk about is the concern about setting the salaries at the local level. If you go out and hire an attorney, and the attorney advises you, and things are going well and successful, you don't mind paying your attorney. Your attorney may ask you for a little more money, and you can say, 'Well, you are doing a good job and I really approve of what you are doing. You are doing what I'm telling you to do, I want to give you some more money.' Well, I'm not worried about Clark County, and maybe not worried about a couple of the other counties. You stop and think about the turmoil we've had in some of our smaller counties, where you have an elected district attorney, who, a lot of times, goes in and tells a board of commissioners things they don't want to hear. This was talked about in 1993 and some of my district attorneys said, 'Look, if my commissioners had the say on my salary, then I would be working for a $1 a month.' Realistically...because they were at odds with their commissioners, their employers so to speak, and especially their employer if we were to put that back on the local level. I was in private practice for a while. When I had a big, important client...I did everything to give them the advice they wanted and hopefully it was right. I think you want maybe a little more independence for your district attorney than trying to please the commissioners because they hold the purse strings. I think that is more important to us. Senator O'Connell stated, "What would be the best thing to set into law to have the decision made on salaries for local and county elected people?" Mr. Hadfield stated the commission was a good idea because it seemed like a good mid-ground approach and worked on it when there was time. He explained they worked very hard to provide the commission with adequate information. Senator O'Connell told the audience that California has an independent salary-setting commission. She stated they determine salaries for legislators and local elected officials as well. She commented they have had this system for 5 years and the committee will be looking at this. She asked for a show of hands for support for an outside commission to make the decision on their own, and have their decision be final. Mr. Cooper stated he was comfortable with the workings of the salary commission and their professionalism. He suggested there was criticism that there was not enough public input. He stated if the public had realized when the commission made their decision, it would be "a done deal," then maybe more people would have attended. He encouraged the committee to formulate an independent salary commission. Senator O'Donnell reminded everyone this concept will require a constitutional amendment. He urged the committee to listen to the recommendations of the commission. Mark Scofield, Assessor, Clark County, and President, Assessors Association of Nevada, stated he is intrigued by the idea of each local government deliberating the amount of salaries that would be awarded to the various elected officials of each county. He stressed that he does not agree with the county commissioners setting salaries, because it shifts the burden or responsibility from the legislators to the commissioners. He testified because of the fiscal impact which accompanies raising elected officials salaries, each county should be able to infuse their opinions and ability to pay those salary increases. He recommended that each county should have a salary commission with a diverse membership of the public and private sectors. He added these meetings should take place at open meeting forums to make the public cognizant of what is happening. He stated each county should have to make that determination on their own. He urged the committee to listen to the recommendations of the commission because they spent a great deal of time developing the process of who should receive a salary raise and what the raise should be. Mr. Scofield continued his testimony by stating there is a tremendous disparity between the salary of appointed department heads and the elected officials. He stated, "A 40 percent difference in salary is shocking." He stressed it is a very simple premise that the boss should make more money than the subordinates. He told the committee this is the way it is in the private sector and should be replicated in the public sector. Senator Porter stated this premise may appear that way, but as a small business owner, and having grown up in a small business, the opposite is usually true. Mr. Scofield reiterated that large businesses operate on this premise, while small businesses may not. Mr. Graham suggested the commissions or the other methods for someone else setting the salary structure would cause a need for a constitutional amendment. He urged the committee to grant a pay increase and longevity now, and work later on setting the constitutional guidelines. He stated this would answer the problems now, and address the issue for the future. Senator O'Connell apologized that the bill has not passed out of the committee and out of the Senate and be over at the Assembly already, but the committee requires input from concerned parties. Senator Shaffer stated he understands there can be mischief among the commissioners regarding elected officials and the commissioners may try to keep the elected officials salaries suppressed because they want someone else elected. He said Sparks based the salary of their elected officials on a formula which ranges between the city manager's salary and the salary of the lowest appointed management position. He stated the formula stays that way and the elected official never makes more money than the city manager. He explained when the city manager gets a raise, the elected officials get a raise. He told the committee he would get that information for the committee. Senator Porter explained local committees want home rule and control of their own destiny. He stated that setting salaries is part of home rule. He remarked: Either you can have your cake, or eat it, ...do you only want the portions of home rule that are less political, or do you want to take control of your destiny?...There is no government closer than your government to your constituents. We are not, you are. I know there are disparities, there's some problems,...but only you can tell us where it ought to be. Your constituents should tell you, [and] you should tell us, until something can change. Senator Porter stated, "I don't know who all is represented tonight. I know we asked Mr. Hadfield to check with the counties...There are substantial percentages here. Are you all very aware of what is in this? Up to 50 percent in some cases? ...I just want this to be on the record. Clark goes from $45 [$45,000] to $56,000. Clark agrees with that? For county commissioners? ...Carson City from $15,000 to $18,750...you are comfortable with that?" Marvin Teixiera, Mayor, Carson City, urged the committee to go with the recommendations of the commission, and then work on letting the various municipalities administer the salaries in the future. He stated this will create a level playing field for everyone. He stated there are department heads in Carson City who are paid more than the elected officials. He stated, "Set that threshold which is equitable today, and then let each community, depending upon its economic needs, let them take those people up with rest of the people who are public servants...let the people vote those in...A salary committee in my community? Who is going to appoint them? The board of supervisors...oh, man, I'll tell you...you want a witchhunt? I mean, it would be a real problem." Mr. Teixeira continued that elected officials should have their pay raises based on cost-of-living-adjustments just like the appointed and the nonclassified employees. He testified an internal auditor who works for the city makes $12,000 more than the city assessor. He stated last year Carson City gave no cost-of-living-adjustments (COLA) to any employee. He explained there is a 3 percent COLA increase in this year's budget. He explained the elected officials did not benefit from any increases that the nonclassified get or have gotten. He stated when the salaries are equitable, then the comparisons would stop. Senator O'Connell assured the audience that they want whatever decision they make to be fair and to be a workable answer for years to come. Jim Regan, Commissioner, Churchill County, testified before the committee. He explained he is an average commissioner. He stated all the counties need younger blood for their commissions, but unless the salary raises, they will not be able to get younger people to serve. He told the committee that for two elections in a row there was no opposition to the elected officials who ran. He stated during the last election, a group decided that every position should have opposing candidates. He said someone ran for every office, but four of the six people who ran were in jail prior to the election or during the election for serious offenses. He stated if there was a decent salary, this situation would never happen. Dick Carver, Commissioner, Nye County, testified next. He told the committee that the Nye County commissioners unanimously support the pay raises for the elected officials, but were not campaigning for a raise for themselves. He explained their commission just did a salary study and it cost about $200,000 to get everybody's salary on an equitable footing. He said they set the budget for every elected official. He stated, "If we wanted to go after an elected official, we can do it through his budget, rather than go after his salary. I think if you get to nit-picking like that, the public is going to pick up on it, and they are going to take you out of office anyway." He read part of the constitution to the committee and explained that the United States is a government of the people. He urged the committee to consider home rule and to consider having the counties set their own salaries. He stated the power of government should come back to the people. Alan Glover, Clerk/Recorder, Carson City, explained the elected officials' counterparts in local government are department heads. He told the committee they are not private-sector employees. He stated they are not allowed to have any kind of outside job. He testified that state employees, other city employees, legislators, and county commissioners can. He stated: It really came home to me when I left the Clerk/Recorder's Office in 1990 and came back again this year, the salary was still the same. However, I notice quite a bit that the buying power of that check was way less in getting ready to put kids into college; I'm really in a squeeze. It was a pretty good salary 5 years ago. The elected officials in the state are good people. They are working positions...They are really qualified...We are losing qualified people to run for office, because the deputies won't run. They're making as much money, they don't have to run for office, they're not held legally responsible if something goes wrong. We are getting people who are coming in who think, 'Would not that be a fun job?' I can tell you from personal experience, that costs counties money, because they make mistakes when they not familiar with an election system, with the county recording software, whatever, or how the office works. They buy products that don't work. They can cost taxpayers lots of money. You need people with experience. We are not going to get those and we have quite a few members of the county fiscal office who are retiring soon. I would hope you would take the recommendation of the interim committee. With no more testimony forthcoming, Senator O'Connell adjourned the meeting at 6:00 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs April 27, 1995 Page