MINUTES OF THE SENATE COMMITTEE ON GOVERNMENT AFFAIRS Sixty-eighth Session May 11, 1995 The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:00 p.m., on Thursday, May 11, 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, Principal Research Analyst Teri J. Spraggins, Committee Secretary OTHERS PRESENT: Pat Coward, Lobbyist, City of Sparks Marvin Leavitt, Legislative Coordinator, City of Las Vegas Michael Pitlock, Executive Director, Department of Taxation David Pursell, Chief, Division of Assessment Standards, Department of Taxation Tom Grady, Lobbyist, Nevada League of Cities Robert Hadfield, Executive Director, Nevada Association of Counties Mark Balen, President, Professional Fire Fighters of Nevada David Howard, Lobbyist, Greater Reno-Sparks Chamber of Commerce Mary Henderson, Director, Washoe County Government Affairs Senator O'Connell opened the meeting with Bill Draft Request (BDR) 20-734. BILL DRAFT REQUEST 20-734: Provides enhanced 9-1-1 emergency telephone system for Washoe County. Pat Coward, Lobbyist, City of Sparks, asked for committee introduction of BDR 20-734. He testified this is a cooperative effort between Washoe County, the City of Reno, the City of Sparks, Nevada Bell Telephone, Cellular One Telephone and other cellular companies. He explained the purpose is to create a funding mechanism, a review board and technical advisory board that would oversee the enhanced 9-1-1 service that will be upgraded soon. He explained the funding mechanism will be a surcharge placed on telephone bills that incorporate all access lines in Washoe County, and the cellular service. He told the committee they conducted a survey of residents of Washoe County to gain information on an acceptable means of funding this service. He stated the surcharge was the most popular means with a threshold of 25 cents. He testified 75 percent accepted having a 25-cent surcharge. SENATOR RAGGIO MOVED FOR COMMITTEE INTRODUCTION OF BDR 20- 734. SENATOR SHAFFER SECONDED THE VOTE. Senator Townsend asked Mr. Coward if Nevada Bell is an interested party in this BDR. Mr. Coward responded that Nevada Bell will collect and give the surcharge for the 9-1-1 service to Washoe County. Senator Townsend told the committee that he will abstain from voting on the bill because of his firm's relationship with Nevada Bell. THE MOTION CARRIED. (SENATOR TOWNSEND ABSTAINED FROM THE VOTE. SENATORS PORTER AND O'DONNELL WERE ABSENT FOR THE VOTE.) ***** Senator O'Connell closed the hearing on BDR 20-734 and opened the hearing on Senate Bill (S.B.) 124. SENATE BILL 124: Prohibits deduction from salaries of state employees for service as volunteer emergency medical technicians during working hours. Senator O'Connell stated this is a request from the Assembly to look at concurring with an amendment they have put on S.B. 124. She stated they added a line, regarding state employees, to include volunteers from the police or sheriff's office to be volunteers. SENATOR RAGGIO MOVED TO CONCUR WITH THE AMENDMENT TO S.B. 124 PROPOSED BY THE ASSEMBLY. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR PORTER WAS ABSENT FOR THE VOTE.) ***** Senator O'Connell closed the hearing on S.B. 124 and opened the hearing on BDR 24-1138. BILL DRAFT REQUEST 24-1138: Requires commission on ethics to adopt code of ethical standards for political campaigns and render advisory opinions relating to code. Senator Shaffer stated this bill suggests the ethics commission adopt a code of ethical standards for political campaigns as a guide for candidates and members of the news media to follow. He explained this will establish ethical standards that a variety of entities can reference during a campaign to see if allegations are in violation of the ethics' standards. He added it is an attempt to cleanup election campaigns. SENATOR TITUS MOVED TO INTRODUCE BDR 24-1138. SENATOR SHAFFER SECONDED THE MOTION. Senator Raggio asked if this would grant authority to the ethics commission to render an advisory option regarding the news media? He asked why the ethics commission would have any authority over the news media? Senator Shaffer stated the news media is allowed to ask the commission to check allegations. THE MOTION CARRIED UNANIMOUSLY. ***** Senator O'Connell closed the hearing on BDR 24-1138 and opened the hearing on Assembly Bill (A.B.) 536. ASSEMBLY BILL 536: Provides procedure for financial administration of local government in severe financial emergency. Marvin Leavitt, Legislative Coordinator, City of Las Vegas, testified in support of A.B. 536. He explained most of the actual text of the bill changes the name of the Local Government Advisory Committee to the Committee on Local Government Finance (CLGF). He stated this name is more representative of the work that the committee does. He explained section 4 would provide a method to decide whether a county or entity is suffering from severe financial situations before they become as critical as the situation in White Pine County. He explained about different financial situations that a county can experience. He stated this bill sets out, on a permanent basis, the conditions under which the CLGF can declare that a county is in severe financial difficulty. Mr. Leavitt outlined the duties of the CLGF as stated in the bill. He went through the bill, section by section, clarifying all of the changes to the CLGF. He also explained the duties of the Committee on Local Government Finance when a county is experiencing severe financial difficulties. Senator Raggio asked Mr. Leavitt why this procedure and the present procedure, which is available under chapter 354 of the Nevada Revised Statutes, are necessary? Mr. Leavitt explained the existing procedure assumes that the local government is conducting its affairs properly, except that it is getting special approvals from the Department of Taxation. He told the committee this bill covers the contingency that the local government is failing to conduct its affairs properly. He stated this bill provides for the Department of Taxation to take the lead in severe cases. He stated this bill is designed to give more authority essentially than is present under the present statute. He explained that they need both statutes, one for normal situations and one for extreme situations. Senator Raggio asked which statute would take precedence? He asked if the Department of Taxation under existing law has determined to take corrective action and the Committee on Local Government Finance decided to take corrective action, which would have precedence? Mr. Leavitt stated it provides that both work together. He stated the intent is that they act in concert. He explained the duties correspond back and forth with each other. Michael Pitlock, Executive Director, Department of Taxation, explained to the committee that the bill sets forth that the Department of Taxation with the assistance of the Committee on Local Government Finance, and through the expertise of the committee, to take control of the local governmental entity. He stated, "I see that as the big distinction . . . dealing with White Pine County, all of us who have been involved in it have learned a lot during the last few months about how bad a situation can get. I think this bill represents what actually had to take place in order to solve the situation. We wanted to make sure the statutory authority was clear that if a situation like this ever occurs again, that we are prepared to deal with it. We learned early on in the experience that the current statutes did not go far enough because they assumed that there was still a local body who was capable of running the affairs of the local governmental entity. In this situation, that was not the case." Senator Raggio asked, "Under this proposal, if the local government, on its own motion, petitions for termination or modification, and it is denied, this provides that the petition cannot be submitted for 3 months following the date of denial in each case. Is there any appeal?" Mr. Pitlock responded the decisions of the Nevada Tax Commission would have the same appeal rights as any of the current decisions made by the Nevada Tax Commission, where the petitioner has the ability to appeal the decision to the courts. Senator Raggio stated he does not notice this in the existing law or the proposed bill. He explained he would like to have a definitive answer on it. He reminded the committee that they are dealing with elected officials. He said at some point, although the county is placed under controls for corrective action, the elected officials have an obligation under the duties of their office and they may feel that a request for termination is not correct and may want to appeal it. He stressed the bill must include the opportunity for appeal in the law and asked the chair for an opinion on that issue. Senator O'Connell directed Dana Bennett, Principal Research Analyst, to obtain a legal opinion on the issue. Senator Raggio asked if they would require that the department hold some hearings on financial difficulties before taking control and implementing corrective action. Mr. Pitlock responded the Nevada Tax Commission, to make a finding of financial difficulty (based on the current statute), must conduct a hearing. He explained if that determination is a prerequisite for the finding of severe financial difficulty, then they would still follow those procedures. Senator Raggio reiterated that they should include the requirement of a hearing in the bill. Mr. Pitlock explained another bill is in the process that takes care of many long-term concerns about how this procedure will work, particularly when the Legislature is not in session. He explained they will include those issues in the draft of the second bill. Senator Raggio asked if the bill was different when the Legislature is not in session? Mr. Leavitt explained there has been concern expressed that the legislative finding may not be the proper use of legislative power. He told the committee this is the reason for the change in language. He explained they include the legislative finding in the bill. He stated, "It is intended that the bill that follows this, which will address in much more detail, the circumstances and go through a more detailed process on how you come to one of these findings. They have a problem situation here that needed to be addressed very quickly that is why the bill is in this form." Mr. Pitlock explained they held a hearing before the Nevada Tax Commission before they made their finding of financial difficulty as it relates to the White Pine County School District. He said they had complied with that, especially in the present situation. Senator O'Connell asked David Pursell, Chief, Division of Assessment Standards, Department of Taxation, if he had contributed to the bill. Mr. Pursell responded the bill does contain the changes discussed on the Assembly side and he stated it helps in how he will manage the situation. He explained it does cover the Department of Taxation's needs. Senator O'Connell told the committee there are so many blank spaces in the current law regarding procedures if this situation occurs again. She stated the people who have been working on the White Pine County situation feel the procedures need to be updated to reflect the work and procedures they have followed. She explained the State Board of Finance feels since the Legislature has been dealing with the White Pine County situation, the board would remain in the background and would become involved when the Legislature is not in session. She stated the Assembly Committee on Government Affairs feels the Department of Taxation is the proper place because taxation would trigger the initial response since the records are available to them first. She stated the Department of Taxation needs the input of the financial officers who represent the entire state to observe any potential situations. She stressed this is why the language they are reading is in the bill. Senator O'Connell asked Ms. Bennett to obtain answers to Senator Raggio's questions. Senator Raggio asked Ms. Bennett to check section 4 to reference NRS 354.660 and 354.670, on the requirements for a hearing. Senator O'Connell closed the hearing on A.B. 536 and opened the hearing on S.B. 291. SENATE BILL 291: Revises provisions governing collective bargaining between local governments and their employees. Senator O'Connell drew the committee's attention to the amendments (Exhibit C). Tom Grady, Lobbyist, Nevada League of Cities, testified in favor of S.B. 291. He stated: After our last meeting on S.B. 291, we were asked by the committee to look into a number of items. We sent a memo to all of our city managers, our city clerks, our executive board, and our board of directors outlining the four items which were discussed at the previous meeting. We received minimal response to those items. We were asked in consultation with Mr. Etchemendy from the school board association and Doug Byington from the administrators' association from the schools to make sure that we did not conflict with their present methods of working with [NRS] 288. In talking with them, it was agreed that maybe [NRS] 288.150 was not the proper section which we should be addressing, but we should be addressing [NRS] 288.170. The reasons they have are in section 2, it addresses the principals, assistant principals or other school administrators which they did not want to be confused with . . . supervisory personnel. Under [NRS] 288.170, number one and number two is the language that is in statute. We were able to make our changes and be able to do what we wanted do under items three and four, which are the amendments you have in front of you. Senator O'Connell requested verification that the school district wanted to be left out of this bill. Mr. Grady responded that they were afraid the wording in NRS 288.150 was confusing where it addressed administrators and professional personnel. He explained the school district staff are all licensed and are considered professional personnel. He stated it was already addressed in NRS 288.170, under paragraph 2. Senator Raggio asked Mr. Grady to outline the amendment and explain the proposed changes to the committee. Mr. Grady provided a section by section outline of the proposed amendment to the committee. A discussion was held regarding ending fund balances. Robert Hadfield, Executive Director, Nevada Association of Counties, testified that there was some difficulty in regard to fact-finding in the Lincoln County School District. He stated it is the position of the administrative code that operating expenses for 1 month be set aside and are not considered in fact-finding for collective bargaining. He stated it is a requirement that those funds are protected. Senator O'Connell asked Mr. Hadfield to provide that citation of the Nevada Administrative Code. Mr. Hadfield could not provide the citation number. Mark Balen, President, Professional Fire Fighters of Nevada, told the committee that he could not provide the citation number either, but the code states that a maximum ending fund balance of 8.3 percent is unattachable for wages. He stated most entities can run their ending fund balance down, and some run it down to 1 or 2 percent. He explained not all entities can attain the 8.3 percent balance, however 8.3 percent is permissible to exempt from wages. David Howard, Lobbyist, Greater Reno/Sparks Chamber of Commerce, stated that he wanted to address section 9 of the amendment. He testified, I have a problem with the amendment on splitting the arbitration on what I see as an uneven playing field. Why not let the arbitrator decide for both? The way I read this, it is an inducement to both sides, not just to the bargaining unit, but to the city as well, to get to the table and get the issues resolved. There are plenty of examples in the past, and currently, where bargaining goes on for 2 or 3 years. I think the way the bill was originally drafted, that award vests on the date of the arbitrator would encourage both sides, labor and management, to get to the table and get the issues resolved. I think you are setting up an uneven playing field here. You are saying if one side wins, they get something more than the other. People that lose on this every time are the taxpayers. I think it is in the interest of the taxpayer to have a quick and early settlement to all of these negotiations. Senator Raggio asked if the language is left as it is in the bill, the situation of last-best offer, would it be an incentive for the local government to drag negotiations on for as long as it could? He asked if retroactive awards are an incentive to the local governments to settle as soon as possible? Mr. Howard stated, "If it vests the time it is over, then it is over. Why would it be in the city and county's interest to settle this just as quickly as the labor union? I do not see . . . " Mary Henderson, Director, Washoe County Government Affairs, testified, "I am unclear about why that would force the city into a delay. It has always been our intent to move forward with labor negotiations as quickly as possible, especially with nine bargaining units that we are constantly at the table with. There may be some argument for that. I guess I need a better explanation as to the rationale." Senator Raggio stated, "Instead of settling, let it go to arbitration. You would pay some arbitration costs, but then you would not owe any of the award, other than the date the arbitrator decided. I think that is the argument." A discussion followed regarding the benefits to both the management and the bargaining unit. The committee decided to hold the bill for a week to gather additional information. The discussion included the firefighters and police officers versus other bargaining units. Senator Porter asked what effect this bill would have on people who are supervisors? Mr. Balen told the committee that this bill would affect about 100 police officers, whom they would take out of the bargaining unit. He said these officers would have to create their own union and bargaining unit. He stated, "This is a bad piece of legislation. It creates animosity between the labor groups and entities. There is absolutely no reason for this." He explained the police and firefighters petitioned against the Management Relations Board in 1991 because of their stand on the supervisory issue. He explained the definition of supervisor in the statute, and the way the bill is functioning now, there is no problem with it. He said, "I do not know why the League of Cities has approached you with a change, because there is not a problem. We are having no problem. I am at a loss." Senator O'Connell commented, "If I remember the testimony correctly, the problem is that most of their budget is being eaten up by salaries. They are having major problems there because of a lot of other financial impacts. They feel that it is the taxpayer who is the loser in this situation, because you have the people who are negotiating for their salary, even if it is not that evident, when they are negotiating with the person who is representing the union. You have a fox in the hen house, in other words, I think is the point and the concern of the people who brought the bill forward." Mr. Balen stressed, "Senator, I know that has been stated. That is an absolute falsehood. I have been involved in contract negotiations for firefighters since 1969. I know for a fact, those folks who sit on those negotiations do not make decisions on budgets. They are appointed people. The only folks who are sitting across the table are those folks who are administrators. The law clearly says they cannot belong now. It clearly says, but yet they want to remove that from the law. I am at a total loss." Senator O'Connell asked everyone to examine this bill and she announced they will hold the bill for another week to gather information. She closed the hearing on S.B. 291 and the hearing adjourned at 5:20 p.m. RESPECTFULLY SUBMITTED: Teri J. Spraggins, Committee Secretary APPROVED BY: Senator Ann O'Connell, Chairman DATE: Senate Committee on Government Affairs May 11, 1995 Page