MINUTES OF THE meeting

of the

ASSEMBLY Committee on Ways and Means

 

Seventy-Second Session

April 11, 2003

 

 

The Committee on Ways and Meanswas called to order at 8:12 a.m., on Friday, April 11, 2003.  Chairman Morse Arberry Jr., presided in Room 3137 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

 

COMMITTEE MEMBERS PRESENT:

 

Mr. Morse Arberry Jr., Chairman

Ms. Chris Giunchigliani, Vice Chairwoman

Mr. Walter Andonov

Mr. Bob Beers

Mrs. Vonne Chowning

Mrs. Dawn Gibbons

Mr. David Goldwater

Mr. Josh Griffin

Mr. Lynn Hettrick

Ms. Sheila Leslie

Mr. John Marvel

Ms. Kathy McClain

Mr. David Parks

Mr. Richard Perkins

 

COMMITTEE MEMBERS ABSENT:

 

None

 

GUEST LEGISLATORS PRESENT:

 

Assemblyman John Oceguera, District No. 16

 

STAFF MEMBERS PRESENT:

 

Mark Stevens, Assembly Fiscal Analyst

Steve Abba, Principal Deputy Fiscal Analyst

Tracy Raxter, Program Analyst

Carol Thomsen, Committee Secretary

Connie Davis, Committee Secretary

 

 

Chairman Arberry called the Committee to order and opened the hearing on A.B. 217.

 

Assembly Bill 217 (1st Reprint):  Makes various changes regarding State Personnel System. (BDR 23-495)

 

Jeanne Greene, Director, Department of Personnel, stated that A.B. 217 was a rather lengthy bill that included 41 sections, therefore, she had provided a one‑page summary, Exhibit C, to the Committee and would review pertinent sections.  Ms. Greene explained that the bill contained four major components, and the majority of the sections would clarify the authority to adopt regulations.  Throughout the Nevada Revised Statutes (NRS) Chapter 284, the authority to adopt regulations was granted inconsistently to either the Department of Personnel or the Personnel Commission.  Historically, explained Ms. Greene, the adoption of regulations had been a function of the Personnel Commission.  The proposed legislation would clarify the authority and streamline the regulation adoption process.

 

Also, stated Ms. Greene, A.B. 217 proposed cleanup language to provide minor clarification of terminology, combine redundant sections, and ensure that the rights of individuals with disabilities, as provided in the NRS, were consistent with the requirements of the Americans With Disabilities Act (ADA).  None of the proposed cleanup language represented a material change in the Department’s current practices. 

 

Ms. Green explained that the amendments proposed in Section 1 of the bill would allow state agencies to offer alternative hours of operation to better serve their client population and maximize the resources of each agency.  The current requirement that agencies remain open Monday through Friday from 8:00 a.m. to 5:00 p.m. did not provide agencies with the flexibility to offer evening and weekend service to meet client needs when staffing was limited.  For instance, stated Ms. Green, some of the rural museums that had limited staffing would like to remain open on Saturdays and closed on Mondays, which would better accommodate their visitors. 

 

Continuing her presentation, Ms. Greene noted that the amendments proposed in Sections 35, 37, and 38, would ensure consistency in other sections of the NRS.  Section 24 would allow an employee the additional option of applying the cash equivalent of his annual leave toward an overpayment of compensation.  Currently, explained Ms. Greene, if an overpayment occurred the employee would be required to reimburse the state via a personal check or a payroll deduction agreement.  Finally, stated Ms. Greene, Section 36 would provide the authority to the Clerk of the State Board of Examiners to designate an overpayment of $50 or less as a bad debt, when the cost to collect would exceed the amount due.

 

Ms. Greene added that A.B. 217 had received extensive review by the Assembly Committee on Government Affairs, which included subcommittee review.  That Committee unanimously passed the bill with a minor change in Section 32, and a requirement that the Department provide information back to the Committee during the 2005 Legislative Session regarding the use of alternative hours, the balance of compensation liabilities, and the number of debts that were designated as bad debts under $50.

 

Chairman Arberry indicated that the Committee was concerned with Section 24(8), and asked for clarification of that section.  Responding to Chairman Arberry’s request, Kim Foster, Administrative Services Officer, Department of Personnel, explained that the subject of overpayment was somewhat complicated.  The provision in Section 24(8) would allow for the repayment of any compensation overpayment through the “cash out” of annual leave. 

 

According to Ms. Foster, the primary reason the revision had been requested was to provide an option for employees to repay what was called the “anticipated week.”  The term “anticipated week” came about because of a procedure that was used in the state’s Legacy payroll system.  Ms. Foster explained that the procedure paid employees for one week that had not yet been reported on their time sheets.  The Legacy system anticipated the hours an employee would work for that week, however, anticipating that time put the state at a high risk for overpayment and/or underpayment to employees.  Ms. Foster pointed out that the procedure was also confusing to employees and difficult to understand.  A legislative committee studying the State Personnel Department’s system recommended that the anticipated week be eliminated.  It was determined that the most viable solution for elimination of the anticipated week would be through implementation of a new payroll system, which occurred on March 6, 1999.  That option was chosen, stated Ms. Foster, because it ensured that there would be no cash flow impact on the state or the employee.

 

Ms. Foster informed the Committee that she would attempt to explain what had occurred with implementation of the new system.  For persons who were employed with the state during the conversion, the final paycheck from the old Legacy system would have paid from February 27, 1999, through March 12, 1999.  The first paycheck from the new system would have paid from March 6, 1999, through March 21, 1999.  Ms. Foster pointed out that the two periods overlapped each other by one week – the week of March 6 through 12, 1999.  In effect, employees were paid twice for the same week, although that occurred only on paper and employees continued to receive the same pay.  Per Ms. Foster, the Department then calculated the amount of pay for the one week that overlapped, which was noted on the employee’s paycheck stub.  When an employee terminated state employment, that amount would be deducted from the final paycheck, which was where the paper trail became apparent. 

 

Continuing her presentation, Ms. Foster explained that if an employee terminated employment at the end of a given reporting period under the old Legacy system, that employee would have received one week of pay.  Under the new system, the employee would be owed two weeks pay, however, the anticipated week would be deducted and the employee would receive one week of pay.  Ms. Foster added that it was important to note that employees hired after March 12, 1999, would be unaffected by the anticipated week.  The revision contained in A.B. 217 would simply allow employees the option of cashing out annual leave to pay off their anticipated week prior to termination.

 

Chairman Arberry asked whether the situation had been created because the Department changed from one payroll system to another; Ms. Foster replied in the affirmative.  She explained that the old system anticipated one week of pay, and employees were actually being paid for time they had not yet reported.  The problem, according to Ms. Foster, was that if an employee was on leave without pay status and the correct adjusting documents had not been processed, that employee would have been overpaid.

 

Chairman Arberry asked whether employees who terminated were currently being asked to repay the amount for the anticipated week.  Ms. Foster stated that the procedure had been underway since the conversion to the new payroll system in March of 1999, which was when the two weeks overlapped, and employees received notice on their paychecks that they owed the state for that week; she emphasized that it was only on paper. 

 

Mark Stevens, Assembly Fiscal Analyst, Legislative Counsel Bureau (LCB), asked whether there was any indication that state employees would actually use their annual leave to remove the debt of the anticipated week.  It appeared that if an employee did not forfeit annual leave for the anticipated week, the amount would be deducted from the employee’s final paycheck.  Mr. Stevens stated it would be his choice to wait until he left state service to address the anticipated week.  Ms. Foster stated that would also be her choice, however, there were some employees who had an excessive amount of annual leave and would choose to cash out and pay back the amount owed for the anticipated week.  She pointed out that some employees did not like seeing that anticipated week on their pay stubs.  Mr. Stevens opined that it would simply be a “wash” no matter how the employee chose to repay the amount due for the anticipated week.

 

Chairman Arberry pointed out that it did not appear the issue of the anticipated week would affect the Department’s budget whatsoever; Ms. Foster concurred that it would have no budgetary effect.  Chairman Arberry asked whether there were further questions or testimony regarding A.B. 217, and hearing none, declared the hearing closed.  The Chair opened the hearing on A.B. 246.

 

Assembly Bill 246 (1st Reprint):  Establishes Center for Analysis of Crime Statistics at University of Nevada, Las Vegas, and provides that Center may accept and expend gifts, grants and donations of money.

(BDR 34-367)

 

Assemblyman John Oceguera, District No. 16, testified that A.B. 246 would establish the Center for Analysis of Crime Statistics at the University of Nevada, Las Vegas (UNLV).  Mr. Oceguera stated that a representative from the UNLV was present and would present testimony to the Committee regarding the bill. 

 

Rick Bennett, Director, Governmental Relations, UNLV, informed the Committee that A.B. 246 did not include an appropriation and he would testify regarding the future needs of the center.  It was his understanding that there had been approximately 48 Statistical Analysis Centers established by states throughout the country.  Mr. Bennett explained that a center would have to be established by a state in order to qualify for federal grant funding from the Department of Justice (DOJ), which was the primary reason for A.B. 246.  With the required statutory recognition, the UNLV could approach the DOJ and receive funding to establish the center and to collect, disseminate, and analyze data related to crime and justice.

 

Mr. Bennett noted that many of the centers received no state appropriations and functioned quite well; the UNLV certainly hoped that its center could function in the same manner.  He believed it would be difficult to promise that the UNLV would never seek a state appropriation for the center.  According to Mr. Bennett, it would not be prudent for the UNLV to make that statement, nor would it be prudent of the Legislature to ask that of the UNLV.  Mr. Bennett advised that he would make the commitment on record that the UNLV would not approach the Legislature for at least the next two sessions to seek any type of base budget appropriation from the state.  

 

Chairman Arberry stated that the Committee’s biggest concern, and what had caused the bill not to be passed during the 2001 session, was that it appeared to create an unfunded mandate.  Mr. Bennett understood the Committee’s concern, however, he did not anticipate that the UNLV would have to approach the Legislature for funding.  He indicated that, depending upon the success of the center, there could be reasons that the Committee might want the center to assume additional responsibilities which would require a state appropriation.  Mr. Bennett stated he could not predict the future forever, but he did not anticipate that the UNLV would be required to approach the Legislature for a base budget appropriation for the next few years.  The center certainly would seek contracts and grants, not only from the federal government, but also from state and local governments.  Mr. Bennett hoped that would ensure the center’s ability to complete its work.

 

Chairman Arberry indicated that the Committee had received a letter regarding future state funding during the 2001 session, and asked Mr. Bennett if he would once again submit such a letter.  Mr. Bennett stated that he would be happy to provide a letter.  Chairman Arberry hoped that such a letter would put the matter to rest so that the Committee could accommodate Mr. Oceguera’s request for passage of A.B. 246.  The Committee wanted to ensure that future legislators would not be burdened with what amounted to an unfunded mandate, which would then require a state appropriation to continue functioning.  Mr. Bennett emphasized that he understood the Committee’s concern, and he would be happy to put his commitment in writing.  He reminded the Committee that the bill was not exempt and asked that the Committee consider positive action at the current hearing.     

 

Assemblyman Marvel asked how much money the UNLV anticipated acquiring via federal grants.  Mr. Bennett advised that he did not have exact figures, but did know that there was a considerable amount of money available from the Bureau of Justice Statistics to support states in their efforts to establish centers, and there were a number of different projects that would interest the DOJ.  One example, said Mr. Bennett, was the passage of legislation by the 2001 Legislature relative to racial profiling, for which there was significant grant funding available.  Mr. Oceguera pointed out that the study approved by the 2001 Legislature could have been conducted by the center without a request for additional funds.

 

Chairman Arberry asked how soon the Committee could expect the letter regarding future funding requests.  Mr. Bennett replied that he would provide the requested letter as soon as possible.    

 

Chairman Arberry asked whether there was further testimony to come before the Committee regarding A.B. 246, and hearing none, declared the hearing closed.  The Chair opened the hearing on A.B. 469.

 

Assembly Bill 469:  Makes supplemental appropriation to Division of Child and Family Services of Department of Human Resources for unanticipated shortfall in money for medical care and higher-level placements for Medicaid-eligible children. (BDR S-1326)

 

Edward Cotton, Administrator, Division of Child and Family Services (DCFS), Department of Human Resources (DHR), introduced Diane Comeaux, Deputy Administrator, and Jim Baumann, Administrative Services Officer IV, to the Committee.  Mr. Cotton explained that A.B. 469 would make an appropriation to the DCFS for an unanticipated shortfall in the Youth Community Services Budget to pay medical care costs for acute care, and residential treatment for Medicaid-eligible children in the Division’s custody.  According to Mr. Cotton, A.B. 469 would provide an appropriation of $1,113,588 to the DCFS; that amount, along with savings in other categories, would be used to obtain additional federal Medicaid funds to cover the shortfall of $5.4 million.

 

The budgeted caseload for FY2003 for the Medicaid medical category was 4,377 and Mr. Cotton noted that the actual caseload was 3,510, which was 20 percent less than budgeted.  Similarly, the caseload was 18 percent less than budgeted in FY2002, and Mr. Cotton advised the Committee that the Division had finished the last fiscal year within legislatively-approved authority.  Based upon the anticipated decrease in caseload, it initially appeared there would be sufficient funds in the medical category to pay those expenses in FY2003, however, the actual monthly costs per child increased from $351 per month in FY2002 to $456 per month in FY2003.  Mr. Cotton stated that was an increase of 39 percent over FY2002, and a 55 percent increase over the FY2003 budgeted monthly cost per child of $295.  Mr. Cotton explained that the unanticipated increase in the cost per child had created a shortfall that the DCFS could not cover through savings from other categories.

 

Assemblywoman Leslie asked what factors had contributed to the rising costs.  Mr. Cotton replied that the DCFS was analyzing that increase and part of the problem was that because the budget was relatively small, it would not take many seriously injured children to cause a significant increase in the costs.  For example, if a seriously injured child incurred costs of up to $600 per day, it would take several children receiving simple basic care to bring that average down to the allocated $450 per month.  Ms. Leslie noted that the increase could be attributed to just a few children rather than a cost increase for all participants.  Mr. Cotton concurred, and he referenced a very highly publicized case in Clark County that would require long-term medical care for the child, who would shortly be transferred to the custody of the DCFS. 

 

Ms. Leslie inquired whether mental health care was included in the budget.  Jim Baumann, Administrative Services Officer IV, DCFS, replied that category 17 in Budget Account 3229, Youth Community Services, was the Medicaid medical category which covered the Medicaid basic medical care for children in the Division’s custody, as well as paying for acute psychiatric and residential treatment.  Ms. Leslie questioned whether outpatient care was included.  Mr. Baumann explained that outpatient care, such as medical doctor appointments, would be included, but outpatient psychiatric care would not be included.  Ms. Leslie asked whether the cost of medications for children in the hospital or in residential programs was included in BA 3229.  Mr. Baumann reported that any costs covered by Medicaid associated with the illness of a child would be included.

 

Assemblyman Beers stated that he found it incredulous that the DCFS would approach the Legislature and ask for $5 million or $6 million, without the knowledge regarding why the costs that had created the shortfall had increased.  He asked whether someone in the Division knew why the costs had increased.  Mr. Cotton explained that the system did not track clients based on costs, however, the Division had tracked a few cases with high medical costs.  He believed the costs had risen because there were a few children generating extremely high expenses, and $450 per month would not cover even one day of hospital care. 

 

Mr. Beers noted that there were many children for whom no expenses were incurred, and he expected the Division to have a better “handle” on the situation.  The Division approached the Legislature without the knowledge of how it had lost control of the situation, and Mr. Beers was concerned that there was a lack of managerial controls in place.  

 

Mr. Baumann explained that the Medicaid medical category had been problematic for the Division since its inception.  The Health Care Financing Administration (HCFA) of the U.S. Department of Health and Human Services conducted utilization reviews on acute care, residential treatment, and basic medical care.  According to Mr. Baumann, quite often the Division was not aware of the treatment received by children because treatment was accessed for Medicaid-eligible children through use of their Medicaid card.  The Division discovered the type of treatment that had been accessed when it received the billing at the end of each month.  Mr. Baumann explained that there was a decision unit within BA 3229 that would move category 17 to the Division of Health Care Financing and Policy (HCF&P) in FY2004-05.  While a “hiccup” or aberration in the budget for the DCFS would create serious problems, it would not have as severe an impact on the budget for the HCF&P Division.  Mr. Baumann reported that the HCF&P Division also had some very sophisticated systems not available to the DCFS that could predict the caseload and cost per eligible child.  He emphasized that there were issues with Medicaid‑eligible children that were beyond the control of the DCFS, and the Division did not case manage.

 

Mr. Beers asked whether anyone case managed the Medicaid-eligible children.  Mr. Cotton explained that the DCFS caseworkers did manage cases in terms of determining that foster parents conducted regular doctor visits and would not take a child to the doctor six times in one month to determine whether the child needed preventive care; he noted that there were standards for foster parents and residential care, which were overseen by caseworkers.  The problem, explained Mr. Cotton, was that the DCFS would not instruct its caseworkers to deny medical care to a child in an attempt to control costs.  The caseworkers were responsible for managing their caseloads, and would know when children were scheduled for doctor or hospital visits because foster parents were required to inform the caseworkers of such visits.  Mr. Cotton believed the problem came about because one year there might be 10 children under the care of the DCFS who suffered severe injury, and the following year there might be 25 children in need of care, which would increase costs significantly.  Mr. Cotton reiterated that case managers did oversee their cases, and the DCFS would not simply “open the door” and allow foster parents to take their foster children to the hospital every month for a physical examination but, on the other hand, the Division wanted to ensure that the children in its custody received needed medical care. 

 

Mr. Beers stated that if he understood correctly, Mr. Cotton was not stating that there had actually been 10 severely injured children during the past year and 25 during the current year, but rather, the DCFS was stating that it did not know why costs had escalated; he indicated he was confused as to how the DCFS could not know the reason but would approach the Legislature to ask for a massive budget override.  Mr. Cotton concurred that the DCFS did not know the exact numbers, however, it did know that the cost per child had been significantly higher during the current year. 

 

Chairman Arberry stated it was his understanding that the requested appropriation was not included in The Executive Budget.  Mr. Cotton indicated that was correct.  Chairman Arberry inquired whether there was further testimony to come before the Committee, and hearing none, declared the hearing on A.B. 469 closed.  The Chair opened the hearing on A.B. 470.

 

Assembly Bill 470:  Extends date of reversion of appropriation for one-time costs of transfer of certain child welfare services to Clark County and Washoe County. (BDR S-1260)

 

Mr. Cotton explained that A.B. 470 would extend the reversion date for certain one-time costs associated with the transfer of certain child welfare services to Clark County.  According to Mr. Cotton, A.B. 1 of the Seventeenth Special Session allowed for the transfer of certain child welfare services to the counties with a population of 100,000 or more.  Those services included:

• Case management functions for foster care and adoptions
• Family preservation
• Centralized intake
• Family foster care and emergency care
• Family foster care group care
• Licensing eligibility
• Foster care recruitment    

 

Mr. Cotton noted that Section 136 of A.B. 1 of the Seventeenth Special Session appropriated $5,166,860 from the state General Fund to the Division of Child and Family Services (DCFS) for one-time costs associated with the transfer of those services to Clark and Washoe Counties.  Included in that appropriation was $469,199 for retirement buy out costs for qualifying staff designated to transfer to Clark or Washoe Counties.  To date, stated Mr. Cotton, the Division had expended only $75,271 for the transfer of those positions to Washoe County.  Because of the delay in implementing integration in Clark County, no expenses in that area were anticipated in the current fiscal year.  Mr. Cotton remarked that approval of A.B. 470 would allow the Division to balance forward the remaining $393,929 for expenditures in FY2004-05 for qualifying staff that were scheduled to transfer to Clark County during the upcoming biennium. 

 

Also included in the appropriation, explained Mr. Cotton, was $1,747,992 for Clark County information system costs and, to date, Clark County had drawn $1,202,674 in General Funds, leaving a balance of $545,318.  Mr. Cotton stated that the latest draw request received from Clark County was for the period from September 2002 through December 2003.  Clark County had indicated that if the system was fully implemented in August as scheduled, they would anticipate spending the remaining $545,318 prior to the close of FY2003.  However, stated Mr. Cotton, if project time lines slipped somewhat, conversion might be delayed and the funds might not be expended in a timely manner.  Although the DCFS did not foresee any delays, the Department of Information Technology (DoIT) had indicated that it was experiencing some mainframe capacity problems, which could pose problems in meeting the implementation time lines to bring the system online by August 2003.  Mr. Cotton stated if that occurred, the DCFS would request that any remaining General Funds be balanced forward to FY2004.

 

Assemblyman Marvel asked whether any portion of the funding was included in reversions.  Diane Comeaux, Deputy Administrator, DCFS, stated that the remaining money had not been anticipated for reversion.  She noted that significant cuts had been made to the appropriations in A.B. 1 of the Seventeenth Special Session, a total of $5.1 million, and those funds were not included in the reduction.

 

With no further testimony forthcoming regarding A.B. 470, Chairman Arberry declared the hearing closed and opened the hearing on A.B. 471.

 

Assembly Bill 471:  Makes supplemental appropriations to Division of Health Care Financing and Policy of Department of Human Resources for shortfalls in budgeting in Fiscal Year 2002-2003 for Nevada Check Up Program and for Medicaid caseload and county-match requirements. (BDR S-1227)

 

Charles Duarte, Administrator, Division of Health Care Financing and Policy (HCF&P), introduced Debbra King, Administrative Officer IV, to the Committee.  Mr. Duarte stated that he was present at the hearing to request a supplemental General Fund appropriation for the HCF&P for FY2003.  The General Fund appropriation was for BA 3178, Nevada Check Up, in the amount of $510,155 to cover higher than budgeted caseloads.  Mr. Duarte explained that the General Fund appropriation for BA 3243, Medicaid, was $9,053,621, which was composed of approximately $8.3 million for higher than budgeted caseloads and claims inventory pay-down.  Additionally, stated Mr. Duarte, $713,621 would be to cover a projected county match shortfall in the long-term care program. 

 

Mr. Duarte testified that the Division was currently re-running its Medicaid Payment Projection program (MPP), and was working with Legislative Counsel Bureau (LCB) staff; the Division would provide the necessary information to LCB staff in the near future.  Mr. Duarte explained that the program consisted of a series of spreadsheets that were utilized by the Division to calculate total Medicaid payments.  The revised projections should be completed within the next week, and would change the supplemental request because of changes in the projected caseload, the cost per eligible, and the claims inventory.  For example, stated Mr. Duarte, the supplemental request was based on maintaining a claims inventory of approximately 139,000 claims through the end of the fiscal year.  The Division’s fiscal agent had been more efficient than anticipated and the claims inventory was now approximately 63,000 claims; therefore, the Division had expended approximately $15.4 million more to pay down the claims inventory than originally projected, 76,000 claims times an average per claim cost of $202.50.  Per Mr. Duarte, that increase in the supplemental request would be offset by a reduction in decision unit M-501, Medicaid Management Information System (MMIS), for FY2004 where the Division had anticipated to pay down the claims inventory to 10,000 in FY2004.  Mr. Duarte added that the inventory reduction program the Division was engaged in at the present time, in order to transfer the information system to the new fiscal agent with a minimum inventory of claims in October of 2003, was a part of its MMIS transition plan.

 

Continuing his presentation, Mr. Duarte advised that the Division would also need to recalculate the projected savings from the 3 percent budget reduction in decision unit E-600, which had been implemented but were not reflected in the cost per eligible or the caseload projections.  The implementation of the Upper Payment Limit program, which was a program to provide supplemental hospital payments to public hospitals, also generated an additional $6 million in net state benefit, which could be used to offset the supplemental need.  Mr. Duarte reported that the Division would work closely with Legislative Counsel Bureau (LCB) staff to finalize the supplemental requests as quickly as possible. 

 

Chairman Arberry asked whether the Division absolutely needed the exact appropriation requested in A.B. 471.  Mr. Duarte stated that the amount would actually change after the Division completed the rerun of the Medicaid payment projection.  Chairman Arberry asked whether the amount would increase or decrease; Mr. Duarte stated that he did not know at the present time.  Chairman Arberry asked when the Division could provide that information, and Mr. Duarte stated the information would be available within the upcoming week.  Chairman Arberry inquired whether the amount requested would be outside the budget request.  Mr. Duarte stated the appropriation requested in A.B. 471 was for FY2003.

 

Mark Stevens, Assembly Fiscal Analyst, LCB, advised the Committee that the amount was included in The Executive Budget but might increase based on the MPP information that would be provided; however, he pointed out that it might also be reduced.  He emphasized that the shortfall amount of $510,155 was included in The Executive Budget.  Mr. Stevens apprised the Committee that LCB staff anticipated the amount would increase because the Division was depleting its claims inventory, which would create greater expenses in FY2003 and less in FY2004. 

 

Assemblyman Beers asked whether there was a corresponding budget reduction in FY2004.  Mr. Stevens stated that LCB staff would address the offset to the increase in FY2003 during budget closings for FY2004.  Mr. Beers asked whether the MMIS system would be capable of providing answers to such questions as those raised by Mr. Cotton’s previous testimony.  Mr. Duarte said he believed the system would allow the Division to conduct data “drill-downs” that the current system was not capable of producing. 

 

Chairman Arberry asked whether there was further testimony to come before the Committee regarding A.B. 471, and there being none, declared the hearing closed.  The Chair advised the Committee that there were several bills for its review and possible action, and opened the hearing on A.B. 47.          

 

Assembly Bill 47:  Requires Legislative Auditor to conduct audit of University and Community College System of Nevada and Board of Regents of University of Nevada. (BDR S-118)

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO INDEFINITELY POSTPONE A.B. 47.

 

ASSEMBLYMAN GOLDWATER SECONDED THE VOTE.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

 

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Chairman Arberry opened the hearing on A.B. 122.

 

Assembly Bill 122:  Revises provisions governing calculation of basic support for school districts with declining enrollment. (BDR 34-963)

 

Mr. Stevens advised that the Committee had heard testimony at its March 3, 2003, hearing regarding A.B. 122, which was referred to as the “single hold harmless” bill.  The bill would remove the double hold harmless provision in current law regarding the Distributive School Account (DSA).  Mr. Stevens explained that the bill stipulated if a school district’s enrollment had declined it could receive funding based on the prior year’s enrollment figures; under current law, school districts could use figures based on the enrollment for the prior two years, utilizing the highest figures within that time frame.  According to Mr. Stevens, A.B. 122 would eliminate the double hold harmless provision passed by the 2001 Legislature. 

 

Chairman Arberry asked whether an amendment to the bill was necessary.  Assemblywoman Giunchigliani advised that an amendment would be requested which stipulated that if enrollment for the school year was less than the enrollment of the immediately preceding year, and the decline in enrollment was 5 percent or less, the enrollment number from the immediately preceding school year would be used for purposes of DSA apportionment.  If the decline were more than 5 percent, the larger enrollment number would be used from the immediately preceding two school years.  Ms. Giunchigliani believed that would be a more equitable distribution of revenue; she also explained that the charter schools would be removed from the bill.

Assemblyman Marvel advised that Humboldt County was in rather dire straits, and asked whether A.B. 122 would assist that county.  Ms. Giunchigliani replied that the bill would actually apportion DSA funds in a more equitable manner, and rather than basing the apportionment on the first or second year figures, the amount would actually be allocated based on a percentage.  The school districts had concurred with that formula, which was why the Subcommittee was requesting the amendment.  Mr. Marvel asked whether the school districts could pare their budgets down to accommodate the DSA.  Ms. Giunchigliani stated the districts would have to adjust budgets if their enrollments declined, but the bill would at least hold the districts harmless for the first year.  If the decline in the second year were greater than 5 percent, the larger enrollment number over the past two school years would be used.    

 

Mr. Stevens stated if the amendment passed, the single hold harmless provision would become effective in the second year of the biennium, and the double or second year hold harmless would apply if a district had an enrollment decline of 5 percent or more; he noted that charter schools would be eliminated from the bill.

 

Chairman Arberry called for a motion from the Committee.

 

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 122.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

 

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Chairman Arberry opened the hearing on A.B. 253.

 

Assembly Bill 253:  Makes supplemental appropriation to State Distributive School Account in State General Fund for unanticipated shortfall in Fiscal Year 2002-2003. (BDR S-1224)

 

Mr. Stevens reported that A.B. 253 was the supplemental appropriation to fully fund the Distributive School Account (DSA), and the amount of that appropriation could be adjusted via an amendment from the Committee on Ways and Means.  However, stated Mr. Stevens, he would recommend that the Committee consider a motion to do pass the bill.  According to Mr. Stevens, the bill had to be passed out of the Legislature by May 1, 2003, and the Senate Finance Committee would wait until the next sales tax collection, which would take place during the last week of April 2003, to adjust and amend the final amount of the appropriation.  Mr. Stevens pointed out that even if the Committee on Ways and Means amended A.B. 253, the Senate would still be required to amend the final amount requested, hence his recommendation that the Committee move to do pass the bill.

 

ASSEMBLYMAN MARVEL MOVED TO DO PASS A.B. 253.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

 

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The Chair opened the hearing on A.B. 255.

 

 

Assembly Bill 255:  Extends reversion date of appropriation made during previous Legislative Session to Department of Human Resources for Medicaid Management Information System. (BDR S-1269)

 

Mr. Stevens stated that A.B. 255 would extend the reversion date for the Division of Health Care Financing and Policy (HCF&P), Department of Human Resources (DHR), in development of its Medicaid Management Information System (MMIS).  The Division had received a one-shot appropriation during the 2001 session, however, the system had not yet been completed.  Mr. Stevens advised that if the Legislature did not extend the date, the money would simply revert and the Legislature would be required to appropriate the funding once again.  He advised that the bill to extend the date would be the better course of action for the Legislature; he noted that the reversion date would be extended to June 30, 2005.

 

Assemblyman Beers asked whether the budget for the upcoming biennium had anticipated a reversion of those funds.  Mr. Stevens explained that reversion funds had not been anticipated by the Budget Division when it compiled the figures for the upcoming biennium.

 

ASSEMBLYWOMAN LESLIE MOVED TO DO PASS A.B. 255.

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

 

********

 

 

Chairman Arberry opened the hearing on A.B. 256.

 

Assembly Bill 256:  Makes supplemental appropriation to Consumer Affairs Division of Department of Business and Industry for unanticipated shortfall in money for Fiscal Year 2001-2002. (BDR S 1237)

 

Mr. Stevens advised that A.B. 256 requested a supplemental appropriation to the Consumer Affairs Division of the Department of Business and Industry for an unanticipated shortfall.  Legislative Counsel Bureau (LCB) Fiscal Division staff had reviewed the amounts thoroughly with the Division, and Mr. Stevens stated the recommendation was that the amount be revised to $9,044; the Consumer Affairs Division concurred with that revision.

 

Assemblyman Goldwater explained that the Division also had a bill before the Assembly Committee on Commerce and Labor that would considerably increase its fees.  Mr. Goldwater asked Mr. Stevens whether that was a necessary bill.  Mr. Stevens explained that he had not reviewed the bill currently under consideration by the Assembly Committee on Commerce and Labor, however, the LCB fiscal analyst assigned to the Division was reviewing that bill; it was unknown what the ultimate outcome would be.

 

ASSEMBLYWOMAN CHOWNING MOVED TO AMEND AND DO PASS A.B. 256.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

********

 

The Chair opened the hearing on A.B. 468.

 

Assembly Bill 468:  Makes supplemental appropriations to Welfare Division of Department of Human Resources for unanticipated shortfalls in Fiscal Year 2002-2003 for Electronic Transfer Program and State’s share of caseload requirements and cost allocation of Division. (BDR S-1228)

 

Mr. Stevens explained that the Committee had recently heard testimony regarding A.B. 468, which would make a supplemental appropriation to the Welfare Division.  LCB Fiscal Division staff had reviewed and concurred with the amounts, and the Welfare Division was anxious to receive the appropriation.  Mr. Stevens asked that the Committee consider a motion to do pass A.B. 468 as quickly as possible.

 

ASSEMBLYWOMAN LESLIE MOVED TO DO PASS A.B. 468.

 

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

 

THE MOTION CARRIED. (Assemblyman Hettrick was not present for the vote.)

 

********

 

The Chair opened the hearing on A.B. 130.

 

Assembly Bill 130:  Makes various changes relating to State Department of Agriculture. (BDR 50-569)

Mr. Stevens remarked that A.B. 130 was passed out of the Committee earlier in the week with a motion to delete Sections 2, 3, and 5.  According to Mr. Stevens, when requesting the amendment, he had discovered that Section 6 was similar to Section 5, and he believed the bill should be consistent.

 

Assemblywoman Giunchigliani stated that she had made the original motion, and concurred with Mr. Stevens; she offered the following motion:

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO RESCIND THE PREVIOUS MOTION TO AMEND AND DO PASS A.B. 130. 

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

Chairman Arberry called for a new motion on the bill.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 130 BY STRIKING SECTIONS 2, 3, 5, AND 6. 

 

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Assemblyman Hettrick was not present for the vote.)

 

********

 

The Chair opened the hearing on A.B. 217.

 

Assembly Bill 217 (1st Reprint):  Makes various changes regarding State Personnel System. (BDR 23-495)

 

Chairman Arberry reminded the Committee that it had heard testimony on A.B. 217 earlier in the hearing, and noted that the concern centered on Section 24(8), which addressed the implementation of the new payroll system and the overlapping or “anticipated week.”  Currently, stated Chairman Arberry, an employee would pay the amount owed for that overlapping or anticipated week upon retirement or termination from state employment. 

 

Assemblyman Beers asked for further clarification.  Mr. Stevens explained that the state had implemented a new payroll system, which covered a different pay period than the old system and created the overlapping week.  For example, an employee received pay for weeks one and two of a month under the old system, and under the new system would receive pay for weeks two and three, which caused the employee to receive double pay for the overlapping week at the time the new system was implemented.  Mr. Stevens explained that no adjustment had been made, therefore, a liability existed that would normally come due at the time an employee terminated.  The Department of Personnel wanted to allow an employee the opportunity to utilize annual leave to remove that liability, hence the proposal included in A.B. 217.

 

Assemblywoman Giunchigliani noted that Section 8 of the bill proposed elimination of public hearings and approval by the Commission for preparation of a pay plan, and asked for clarification.  Mr. Stevens stated that he could not recall the previous testimony, however, it appeared that the pay plan was set once the Legislature approved a cost-of-living increase.  Ms. Giunchigliani asked whether the Department of Personnel had always held public hearings in the past; Mr. Stevens stated he did not know whether that had been the Department’s practice.

 

Mr. Beers stated that perhaps the problem could be blamed on the computers or the computer operators, but it appeared that the state had paid its employees twice for the same week.  Mr. Stevens explained that the paychecks for all state employees remained the same during implementation of the new system, and it was simply an accounting mechanism.  He emphasized that the implementation of the new system was seamless to the employee, who simply received a two-week check the same as always.  Mr. Beers asked whether the employees actually received additional money; Mr. Stevens replied that the employees had not received additional money.  Mr. Beers stated it was a very confusing issue, and asked why a bill had been requested rather than simply addressing the situation via a journal entry.

 

Assemblyman Hettrick asked why an employee would give up a week of paid annual leave for a paper transaction when they had not received any money.  He could not understand why a person would give up a paid week for a paper transaction.  Mr. Stevens explained that he had asked representatives from the Department whether there had been any indication that employees would actually give up a week of annual leave, as it appeared employees would simply wait until termination from state service to address the anticipated week.  Mr. Hettrick asked if an employee waited until termination, whether the last check issued would be reduced by one week.  Mr. Stevens stated that was correct.  Therefore, said Mr. Hettrick, it was not a paper transaction, but was a monetary transaction for the employee, who would be required to pay back that overlapping week.  He opined that something was not right with the situation.

 

Mr. Beers stated that, falling back on his accounting training and certification, either the Committee did not understand A.B. 217 or representatives from the Department had “lied” to the Committee.  Chairman Arberry stated that was why Section 24(8) had been addressed in earlier testimony, as it appeared to be the key.

 

Mr. Stevens emphasized that the bill would not change the situation, other than allowing an employee to use annual leave to reduce the liability created by the overlapping week.  Mr. Beers remarked that there was no liability because employees had not received additional money; they either had or had not received one extra week of pay.  If an employee had not received one extra week of pay, which was what the Committee had been told, then they should not be suffering a loss of annual leave upon retirement or termination from state service.

 

Mr. Stevens reminded the Committee that the bill was not exempt, nor was he sure that it could be exempted.  

 

Mr. Hettrick commented that the bill simply stated if employees owed money to the state of Nevada, they might choose to use their annual leave to pay back that amount.  He remarked that the bill did not change the situation regarding implementation of the new pay system or the liability, except that an employee could choose to eliminate the amount due the state through use of annual leave.  Mr. Hettrick noted that Mr. Stevens had made a very good point when he stated that he did not believe there were any employees who would choose to do that.  He asked why an employee would give up paid annual leave before retirement or termination when that employee could retain his/her leave and the amount owed would be deducted from his/her final paycheck.  According to Mr. Hettrick, the bill should move forward as the other provisions contained therein were necessary for the Department; it appeared that the only reason the Committee had received the bill was to ensure that there was no fiscal impact which, apparently, there was not.

 

Mr. Beers remarked that if employees had been overpaid, they should be required to pay back that amount from their annual leave immediately; however, if employees had not been overpaid, then no amount should be owed.  Mr. Beers asked whether A.B. 217 would enable an employee to defer payment for 20 years.  Mr. Hettrick advised that he had carefully researched the bill, and there was a significant amount of money that had been paid in error.  The explanation for that situation was the overlapping week when the new pay system was implemented.  According to Mr. Hettrick, the money was being repaid as employees either retired or terminated from state service.  The amount owed was being withheld from the final paycheck, and Mr. Hettrick opined that if the state of Nevada overpaid an employee, then that employee owed the money, whether or not it was an error. 

 

Mr. Stevens reiterated that the old payroll system paid employees one week ahead, and at the time an employee turned in a time sheet, only one week had actually been worked.  By the time the employee received a paycheck, he had actually worked that week, however, if that employee terminated, he would be paid for two weeks rather than one, which was the anticipated week.  According to Mr. Stevens, under the new system that situation would not occur. 

 

Mr. Beers asked whether employees had been paid for the anticipated week.  Mr. Stevens suggested that representatives from the Department of Personnel be called back to the hearing to address the additional questions from the Committee.

 

Chairman Arberry advised that action regarding the bill would be held pending return of representatives from the Department of Personnel, who would address the Committee’s concerns.  The Chair opened the hearing on A.B. 246.

 

Assembly Bill 246 (1st Reprint):  Establishes Center for Analysis of Crime Statistics at University of Nevada, Las Vegas, and provides that Center may accept and expend gifts, grants and donations of money.

(BDR 34-367)

 

Chairman Arberry reminded the Committee that it had heard earlier testimony regarding the bill from Assemblyman Oceguera, and Mr. Bennett from the UNLV had assured the Committee that the bill would not create an unfunded mandate upon passage.  Mr. Bennett stated that he would provide a letter confirming that the UNLV would not request future funding for the Center for Analysis of Crime Statistics.

 

Assemblywoman Giunchigliani stated that she and Mr. Stevens had discussed inclusion of language which indicated that the entity would not return to the Legislature to request General Fund dollars. 

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 246 TO ADD LANGUAGE WHICH CLARIFIED THAT THE UNLV WOULD NOT APPROACH THE LEGISLATURE IN THE FUTURE AND REQUEST ADDITIONAL OPERATING FUNDS THROUGH A GENERAL FUND ALLOCATION.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

********

 

Chairman Arberry asked Mr. Stevens to advise the Committee regarding bills that were not exempt.

 

Mr. Stevens explained that there were bills in Committee that were not exempt and would “die” unless passed out during the current hearing.

Assembly Bill 88:  Revises provisions relating to Department of Information Technology. (BDR 19-535)

 

Mr. Stevens noted that the Department of Information Technology (DoIT) had requested that the Committee not consider passage of A.B. 88. 

 

********

 

Assembly Bill 124:  Revises provisions governing apportionments from State Distributive School Account and distribution of money to school districts and charter schools. (BDR 34-97)

 

According to Mr. Stevens, A.B. 124 was drafted at the request of the State Controller, who had subsequently requested that the bill not be heard.

 

********

 

Assembly Bill 461:  Provides that certain money may be distributed to Peace Officers’ Standards and Training Commission and used for certain purposes. (BDR 14-504)

 

Mr. Stevens advised the Committee that A.B. 461 would be exempted.  The bill would allow a reserve of administrative assessment monies in the Peace Officers Standards and Training (POST) budget.

 

********

 

Assembly Bill 158:  Reclassifies peace officers employed by Capitol Police Division of Department of Public Safety as category I peace officers.  (BDR 23-2)

 

Mr. Stevens explained that A.B. 158 would reclassify Capitol Police Officers as Category I Peace Officers.  Chairman Arberry asked the Committee for its comments regarding A.B. 158, and the Committee discussed the inclusion of school district police in the bill.  The Chair recognized Speaker Perkins.

 

Speaker Perkins stated that he had no problem with reclassification of the Capitol Police to Category I Peace Officers.  However, he noted that there was currently such a hodgepodge of various officers throughout the state listed as Categories I, II, or III Peace Officers that he believed at some point in time, all police officers throughout the state should be re-categorized because there were benefit issues, along with many other issues, that should be considered.  Speaker Perkins opined that to conduct the reclassifications piecemeal, one agency at a time, one session at a time, would do a disservice to all officers.  He did not believe the bill should be passed and indicated that the issue should be reviewed in its entirety so that a determination could be made regarding all peace officers based upon duties and the threat level under which an officer worked. 

 

Chairman Arberry asked whether Speaker Perkins would be amenable to amending the language of A.B. 158 to create an interim study; he noted that the Capitol Police had requested the reclassification for two sessions, as it was believed that the Capitol Police needed to be at the Category I Peace Officer level because, since the officers were doing the job, they should be placed in the proper category.  Speaker Perkins stated he would have no quarrel whatsoever with amending the bill into a study and re-referring it to the Committee on Elections, Procedures, and Ethics for prioritization.  Over the interim, the various agencies could make their case to that committee regarding the proper category. 

 

Chairman Arberry noted that previous testimony regarding A.B. 158 indicated that the duties of the Capitol Police were limited because of the category in which they were currently placed.  Chairman Arberry asked how the Legislature could assist those officers with those limitations.  Speaker Perkins explained that there were really no limitations on the authority or duties of a peace officer based upon the category, with the exception of the Clark County School District officers, who were not allowed to investigate Category A felonies; that change had been brought about by the Legislature during the 2001 session to ensure that other local law enforcement agencies, whose officers were better trained, would handle those situations.  Speaker Perkins noted that Clark County School District officers still had the authority to make arrests, carry a weapon, and operate an emergency vehicle.  Part of the problem was that the training levels required for Category I Peace Officer status were higher than the other categories and, quite honestly, part of it was the status of being classified as a Category I Peace Officer as opposed to a Category II or III Peace Officer.  Speaker Perkins did not believe that the lack of reclassification would create an obstacle for the Capitol Police while the Legislature undertook a more thorough study of the situation. 

 

Chairman Arberry pointed out that if the Committee passed A.B. 158 it would automatically reclassify the Capitol Police as Category I Peace Officers, when they had not received the proper training.  Chairman Arberry asked whether that would actually force the Capitol Police officers to receive the necessary training.  Speaker Perkins stated that if the officers were placed in Category I, most had been trained to that level, which was the reason they had asked for the designation.  According to Speaker Perkins, placing a designation in statute would not make for better officers, and it was the individual officer that rose to the level of training and performed at that level that made for better officers.  Speaker Perkins did not believe that passage of the bill would change the duties of the Capitol Police at the current time, and he believed that the Legislature would be better off gathering more data and information regarding all officers before changes were implemented. 

 

Speaker Perkins explained that the NRS contained a “laundry list” of officers that belonged in the various categories, which he opined was simply ridiculous, and continued to be changed by the Legislature at every session.  Speaker Perkins believed that the Legislature should redesign the way various peace officers were recognized.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 158, REWRITING THE BILL AS AN INTERIM STUDY OF THE VARIOUS PEACE OFFICER GROUPS AND THE TRAINING CATEGORIES, AND RE-REFERRED TO THE COMMITTEE ON ELECTIONS, PROCEDURES, AND ETHICS.

 

SPEAKER PERKINS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

********

Ms. Giunchigliani noted that the Committee on Elections, Procedures, and Ethics was already responsible for several interim studies, and the Senate often handled the excess of interim studies; she advised that she would keep the Committee apprised of the status of the proposed interim study.

 

Chairman Arberry indicated that the Committee would commence with budget closings.

 

BUDGET CLOSINGS

 

MERIT AWARD BOARD (101-1345) – BUDGET PAGE ADMIN-12

 

Mr. Stevens stated that typically, $5,000 was appropriated to BA 1345, Merit Award Board, which had been established to recognize state employees for ideas that improved the operation of state government.  It appeared that the Board had not expended any of its funding in FY2001-02, and that the appropriation had reverted.  Mr. Stevens indicated that the Board had $500 budgeted for in‑state travel and $4,500 for the actual awards. 

 

Mr. Beers asked whether the Board had addressed why the amount had been doubled for the upcoming biennium.  Mr. Stevens explained that the amount would not double, and the appropriation was $5,000.

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 1345 AS RECOMMENDED BY THE GOVERNOR.

 

ASSEMBLYWOMAN McCLAIN SECONDED THE MOTION.

 

Assemblywoman Giunchigliani stated that the Merit Award Board had been established in 1993, but it had not really been utilized.  She wondered whether it would be better for employees to approach their departments with ideas and allow the departments to reward their employees, rather than a Board that had to determine whether or not an employee’s idea had merit. 

 

Assemblyman Goldwater advised that the Merit Award Board was the first issue he had reviewed when he became a legislator, and he believed the Board’s potential was great.  However, the politics of the Board were very difficult because of the various associations and classified employees.  Mr. Goldwater opined that in order for the Board to be effective, someone would have to spend a great deal of time determining what idea would really work; he noted that the Board was not proving efficient.

 

ASSEMBLYMAN MARVEL WITHDREW HIS MOTION TO CLOSE BA 1345 AS RECOMMENDED BY THE GOVERNOR.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO ELIMINATE BA 1345, MERIT AWARD BOARD.

 

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

BUDGET CLOSED.

 

********

INDIGENT SUPPLEMENTAL ACCOUNT (628-3244) – BUDGET PAGE ADMIN-22

INDIGENT ACCIDENT ACCOUNT (628-3245) – BUDGET PAGE ADMIN-24

 

Mr. Stevens advised the Committee that staff would like to address recent issues within BA 3244 and BA 3245; he asked that the budgets be held. 

 

Chairman Arberry announced that the budgets would be held.

 

********

 

DEFERRED COMPENSATION COMMITTEE (101-1017) –

BUDGET PAGE ADMIN-26

 

Mr. Stevens explained that staff would recommend closure of BA 1017 as recommended by the Governor.  The Executive Budget included a $4 per participant administrative charge, however, Mr. Stevens noted that under the terms of the new contracts with Hartford Life Insurance Company and ING Financial Services, the administrative costs of the Committee would be paid by the providers rather than the plan participants. 

 

Assemblywoman Giunchigliani asked, since there was a contract with Hartford and ING, why a committee was necessary.  Mr. Stevens stated one of the functions of the committee was to issue a Request for Proposal (RFP) every two years to bring in the firms that actually administered the deferred compensation program.  Ms. Giunchigliani asked whether it was necessary for a committee to issue the RFPs. 

 

Assemblyman Parks believed there was a federal statute pertaining to the creation of a “457” deferred compensation plan, based on IRS code 457, and in reality, the assets were still owned in the name of the state, although they were the property of the individual employees.  Mr. Parks believed that the establishment of a committee was a requirement. 

 

Ms. Giunchigliani asked for clarification regarding the $4 per participant administrative charge to fund the Committee to issue RFPs.  Mr. Beers asked about the duties of the Committee, since it would expend approximately $160,000 over the biennium.  Assemblyman Goldwater explained that the Committee evaluated investments, and selected a provider from which there was a universe of funds that the Committee would evaluate and make selections from; he pointed out that the Committee was trustee-driven and trustee-directed.  According to Mr. Goldwater, members of the Committee were not full time, but did receive some benefits.

 

ASSEMBLYMAN GOLDWATER MOVED TO CLOSE BA 1017 AS RECOMMENDED BY THE GOVERNOR.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED WITH ASSEMBLYWOMEN GIUNCHIGLIANI AND GIBBONS VOTING NO. 

 

BUDGET CLOSED.

 

********

PRINTING OFFICE EQUIPMENT (741-1331) – BUDGET PAGE ADMIN-34

 

Mr. Stevens explained that the State Printing Office deposited funds in BA 1331 in anticipation of purchasing future replacement equipment.  The Committee should note that the State Printing Office budget, BA 1330, did not fund the depreciation transfer to BA 1331 in FY2002 and, to date, had not funded the depreciation in the current fiscal year.  Mr. Stevens reported that no equipment acquisitions were recommended in either year of the upcoming biennium.  The Committee should also note that the General Fund repayment obligation, created when the state paid for printing presses and other equipment which was repaid over a period of years, had not been made in FY2002 or FY2003.  Mr. Stevens stated that the General Fund repayment was currently recommended for payment in both years of the upcoming biennium from reserve, but staff had not made adjustments to increase those amounts, as no General Fund repayment had been made in the current fiscal year.  According to Mr. Stevens, the Printing Office had experienced some difficulties revenue-wise, which was why neither the depreciation transfer nor the General Fund repayment had been made.

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 1331 AS RECOMMENDED BY THE GOVERNOR. 

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

BUDGET CLOSED.

 

********

 

PURCHASING – EQUIPMENT PURCHASE (718-1364) –

BUDGET PAGE ADMIN-51

 

Mr. Stevens advised that BA 1364 was basically the same type of account as BA 1331.  Staff recommended an adjustment of $15,748 in the first year of the biennium for the depreciation transfer provided from the Purchasing Division operating budget associated with equipment placed in service in FY2003 and FY2004, and an adjustment of $19,002 in FY2005 for depreciation transfer for equipment placed in service in FY2003, FY2004, and recommended in FY2005.  

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 1364 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

BUDGET CLOSED.

 

********

 

COMMODITY FOOD PROGRAM (101-1362) – BUDGET PAGE ADMIN-53

 

Mr. Stevens advised that staff had adjusted BA 1362 in the amount of $663,420 to establish the receipt of two annual federal grant programs effective in FY2003 and intended for Interim Finance Committee (IFC) approval at its May 8, 2003, meeting.  The Senior Farmers’ Market Nutrition Program was awarded the amount of $200,010 and the Commodity Supplemental Food Program was awarded the amount of $463,410; both programs would be administered as pass-through programs of BA 1362.  Mr. Stevens indicated that staff would recommend that those programs be included to eliminate the necessity of approaching the IFC for authority during the upcoming biennium.

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 1362 AS RECOMMENDED BY STAFF WITH ADJUSTMENTS.

 

SECONDED BY ASSEMBLYMAN MARVEL.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

BUDGET CLOSED.

 

********

 

MAIL SERVICES EQUIPMENT PURCHASE (713-1347) – BUDGET ADMIN-71

 

Mr. Stevens explained that a small adjustment of $2,613 was recommended in the second year of the biennium in BA 1347 in the depreciation expense area.

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 1347 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY.

 

BUDGET CLOSED.

 

********

 

Mr. Stevens advised the Committee that the following Nevada Department of Corrections (NDOC) budget accounts had not been reviewed in Subcommittee and were the responsibility of staff for closure. 

 

HUMBOLDT CONSERVATION CAMP (101-3741) –

BUDGET PAGE CORRECTIONS-110

 

Mr. Stevens noted that The Executive Budget recommended inflationary adjustments in decision unit M-100 for Department of Information Technology (DoIT) charges and the Purchasing Division assessment. 

 

Under decision unit E-500, the Governor had recommended additional funding in each year of the biennium for inflationary increases for food.  According to Mr. Stevens, the costs had been adjusted slightly due to revised population projections; staff would not recommend approval of the inflationary increase for food.  He explained that in other budget accounts, such as the Department of Human Resources (DHR), Division of Mental Health and Developmental Services, and Division of Child and Family Services budgets, there were also facility costs, however, no inflationary factor had been provided for food.

 

Mr. Stevens informed the Committee that it could consider removal of the inflationary factor that had been built into the NDOC budgets, or add an inflationary factor to the aforementioned DHR budgets.

 

Chairman Arberry asked how the Senate Finance Committee had voted regarding the inflationary increase for food in the NDOC budgets.  Mr. Stevens replied that the Senate Finance Committee had removed the inflationary increase from the NDOC budgets.

 

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO CLOSE BA 3741 AS RECOMMENDED BY STAFF, AND THAT THE INFLATIONARY COSTS FOR FOOD BE REMOVED THROUGHOUT THE NECESSARY NDOC BUDGET ACCOUNTS WHERE IT HAD BEEN INCLUDED.

 

ASSEMBLYWOMAN GIBBONS SECONDED THE MOTION.

 

THE MOTION CARRIED WITH MR. PARKS VOTING NO.

 

BUDGET CLOSED.

 

********

 

ELY CONSERVATION CAMP (101-3747) – BUDGET PAGE CORRECTIONS-115

 

Mr. Stevens reported that there were only a few minor technical adjustments within BA 3747 since the Committee had voted to remove the inflationary costs for food from the NDOC budgets. 

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3747 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

BUDGET CLOSED.

 

********

 

Chairman Arberry announced that the Committee would hear further testimony regarding A.B. 217, and thanked Ms. Greene and Ms. Foster from the Department of Personnel for returning to the hearing in order to clarify the issue of the anticipated or overlapping week, which had occurred upon transition to the new payroll system.

 

Assembly Bill 217 (1st Reprint):  Makes various changes regarding State Personnel System. (BDR 23-495)

 

Assemblyman Beers stated, as he understood Section 24(8) of A.B. 217, under the old payroll system employees were paid for one week actually worked and one anticipated week.

 

Kim Foster, Administrative Services Officer, Department of Personnel, explained that there were two primary periods within the original Legacy system: (1) the reporting period; and (2) the pay period.  According to Ms. Foster, the reporting period actually collected the time from an employee’s time sheet, and the pay period overlapped that reporting period by one week; she indicated that the employees were actually paid for an anticipated week. 

 

Mr. Beers indicated that under the old payroll system, it appeared the Department paid employees for the prior week and the upcoming week.  Ms. Foster replied in the affirmative.  Mr. Beers stated that under the new system, it appeared the Department paid an employee for the prior two weeks.  Ms. Foster replied in the affirmative.  Mr. Beers noted that employees had been paid twice for one week when the Department transitioned to the new pay system; Ms. Foster stated that employees had not been paid twice.

 

Ms. Foster provided the Committee with copies of Exhibit D, “Report and Pay Period Demonstration, Conversion of Payroll System from Legacy to IFS Advantage,” which would assist in clarification of the issue.  Mr. Beers observed it still appeared that employees had been paid twice for one week.  Ms. Foster stated that employees had not been paid twice for one week.  She explained that the anticipated week in the Legacy system meant that employees were actually paid for time they had not yet reported and, at times, were either overpaid or underpaid.  She explained that some employees waited as long as four weeks for overtime pay, and overpayments had occurred when employees had not reported leave without pay.  Mr. Beers indicated that no one was suggesting the new IFS Advantage payroll system was not superior to the old Legacy system.  Ms. Foster stated that when the Department devised a plan to “fix” the payroll system, it wanted to ensure that no money was taken away from employees, and they would consistently receive the same pay.  She believed it would have been a nightmare if the Department had informed employees that it was making a change and they would lose one week of pay to address the anticipated week from the old system. 

 

Mr. Beers believed that the conversion created double pay for the same week because when an employee commenced employment with the state, they were paid for an anticipated week.  At the time the Department converted to the new system, it had two choices:  (a) Not pay employees again for the anticipated week, which would mean that employees received pay for only one week, however, would have been caught up; or (b) The Department could have simply paid employees for that second week twice, which is the option it had chosen.  The result, stated Mr. Beers, was that all employees had been paid twice for one week.  Ms. Foster stated employees had been paid twice only “on paper.”  Mr. Beers disagreed, and believed it had been “cash in pocket,” as employees were paid twice for five working days because they were being paid ahead, and at the point of transition they were again paid for that same week.

 

Ms. Foster explained that there had been a one-week “lag” in pay in the Legacy system; Mr. Beers stated it appeared there had been a one-week payment ahead, and he did not understand the “lag” in pay.  Ms. Foster referenced Exhibit D and explained that the Legacy reporting period had been from February 20, 1999, to March 5, 1999, and the Legacy pay period had been from February 27, 1999, to March 12, 1999, at the time of conversion.  Mr. Beers stated it appeared from Exhibit D that the Department had implemented a two‑week delay between the pay period and payday under the IFS Advantage system, whereas under the Legacy system there had been a one-week delay between the payday and the pay period. 

 

Ms. Foster further explained that for an employee who had been employed during the conversion period, the anticipated week would be depicted on the paycheck stub.  When that employee terminated under the new system, the pay for the anticipated week would be deducted; she emphasized that the employee would receive exactly the same pay under both systems.

 

Mr. Beers noted that employees had been paid twice for the same week, and the Department proposed to wait for repayment until an employee terminated, which amounted to an interest-free loan for as long as 30 years for that one week of pay.  Ms. Foster pointed out that the anticipated week had been in existence from the inception of the Legacy system in the 1970s.  Mr. Beers said it was not the anticipated week that he perceived as the problem, it was the additional one-week delay that had been implemented in the IFS Advantage system.  Ms. Foster indicated there had been no cash outflow at the time of the conversion.  The anticipated week had been in existence for employees from the 1970s through the actual conversion to the new system in 1999.  Mr. Beers referenced Exhibit D, and indicated that if the Department had paid employees from March 14, 1999, through March 28, 1999, with just one week of lag time in the IFS Advantage system, the problem would not exist.  He asked why, with the implementation of decentralized data entry, automated time sheets, and millions of dollars in expenses for the IFS system, there was an additional one‑week lag introduced between payday and actual working days.

 

Mr. Beers recognized the students present at the hearing from the Silver Springs High School.

 

Jeanne Greene, Director, Department of Personnel, explained that neither she nor Ms. Foster were employed with the Department when the decision was made to convert to the IFS Advantage system, so she could not answer all of the questions put forth by Mr. Beers.  According to Ms. Greene, the Department was not totally decentralized when the IFS system was implemented.  The Department had decentralized within the past four years, but when the IFS system was implemented, it was still a centralized system where all time sheets had been entered into the system by the Department of Personnel.

 

Mr. Beers asked whether the conversion had actually taken place in 1999; Ms. Greene replied in the affirmative.  According to Mr. Beers, it appeared that in 1999 the Department had paid state employees twice for one week, even though employees had not actually received extra cash, because the Department had been in the habit of paying one week ahead and then had ceased that practice with the new system.  Ms. Green stated that was correct.  Mr. Beers noted that the Department planned on taking money back from employees at some point in time.  Ms. Green stated the Department had been receiving revenue for the anticipated week as employees terminated or retired.  The amount had initially been approximately $9 million, which had been reduced to $6 million because of recovery at the time employees left state service.  According to Mr. Beers, that constituted an interest-free loan.

 

Ms. Greene stated at the time of conversion, one of the choices available to the Department was paying employees for only one week when they customarily received a two-week paycheck.  The decision had been made not to harm employees and that they would continue to receive a two-week paycheck, which was the reason the conversion to the IFS system had been implemented as depicted in Exhibit D.  Ms. Greene stated that the decision had been made in the 1970s to pay that anticipated week and she could not explain what the thinking had been at that time.

 

Mr. Beers asked whether Ms. Greene and Ms. Foster had been employed at the time of conversion to the IFS Advantage system.  Ms. Greene replied in the affirmative.  Mr. Beers believed that decision was the focus point, and asked whether a two-week lag time was needed today.  Ms. Foster stated that the Legacy system actually anticipated one week because that amount of time was needed to complete the processing of payroll. 

 

Mr. Beers asked whether the state accrued expenses for benefits; every pay period, did the state accrue the additional liability incurred because of vacation and annual leave.  He asked whether there was a liability on the state’s books for “accrued benefits payable,” and when an employee went on vacation that account would be utilized to cover the expense.  Ms. Foster noted that at the end of the year, leave time accrued was reported to the Controller’s Office for financial reporting.  Mr. Beers believed that General Fund dollars could be added through a journal entry that would reduce annual leave at the end of the year to wipe out the $6 million liability.  Ms. Foster asked whether Mr. Beers was proposing that all employees cash out their annual leave to pay back the anticipated week.  Mr. Beers noted that employees had been paid twice for one week in 1999.  Ms. Foster believed that would create a major problem.  Ms. Greene explained that those were the conditions of employment at the time persons were hired when the Legacy system was in use. 

 

Assemblyman Griffin asked when the entire amount would be paid back.  Ms. Foster stated that the original amount had been approximately $8 million and had dropped to $6 million over the past four years, which was a 30 percent decrease, however, the Department anticipated that the rate would eventually slow down.  Ms. Foster indicated that the projected date was 2029 before all money was returned to the state for the anticipated week, and it was also projected that the amount would decrease to under $2 million by approximately 2013.     

 

Chairman Arberry asked whether the issue would affect the Department’s budget in any way.  Ms. Foster explained that if an employee decided to cash out their annual leave it would affect the budget.  Chairman Arberry asked whether that would be so significant as to make a difference; Ms. Foster replied that it would not be that significant.

 

Assemblywoman Giunchigliani asked whether employees had been paid for two or three weeks when the system was converted, and Ms. Foster stated the pay was for two weeks. 

 

Assemblyman Andonov stated that an employee would have been paid for two weeks after only working one week or, per Exhibit D, had been paid for three weeks for working two weeks, which amounted to double pay for one week.  Mr. Beers clarified that in the month of March 1999 employees were paid for five weeks when they actually worked only four weeks. 

 

Sherry Blackwell, Budget Analyst V, Budget Division, explained that she had been an accountant at Central Payroll and was quite familiar with what had occurred with the anticipated week.  She noted that the anticipated week caused major problems and worked properly only if supervisors reported leave without pay in a timely manner, which did not often occur and caused employees to be overpaid.  Ms. Blackwell noted that checks had been cancelled and reissued on numerous occasions.  Under the old system, an employee’s pay was one week behind but the leave was two weeks behind, however, under the new system, an employee’s pay and leave were two weeks behind.  Ms. Blackwell explained that the employee still owed the state for the anticipated week that was paid when he/she was first hired, and when the employee left state service that amount had to be paid back.  She noted that under the provisions of A.B. 217, the employee could choose to pay the amount back by using annual leave.  Ms. Blackwell emphasized that employees had actually not been paid twice for one week.

 

Mr. Beers stated he also had many years of payroll experience with several entities and believed that Ms. Blackwell had clarified the key point.  Under the Legacy system an employee would have been one week behind, but under the IFS Advantage system the employee was two weeks behind, but the employee had already been paid for that one-week difference.  During the month of March 1999, when employees actually worked four weeks, every employee was paid for five weeks, which was the reason that employees owed the state money.  Mr. Beers indicated that the question was whether the state wanted to allow employees to retain that money interest-free during their entire career with the state, or whether it should require that employees pay the amount back now in a painless form via use of annual leave.  He noted that a third alternative would be to assess an 8 percent to 10 percent interest rate on the loan for the duration of a person’s employment with the state.  The bottom line, said Mr. Beers, was that in March of 1999 employees had worked four weeks but had been paid for five weeks.     

 

Ms. Foster informed the Committee that if the state requested that all employees cashed out their annual leave to pay the amount back, it would affect the budget.  She explained that when an employee cashed out annual leave, it would be recorded as an expenditure in the system.  Mr. Beers believed annual leave was already recorded as an expenditure in the system when it was earned and was a liability; annual leave was accrued as an expense and a liability at the time it was earned. 

 

Assemblywoman Giunchigliani asked whether notification had been provided to state employees at the time of conversion, such as a letter of explanation, and could employees pay back the amount owed at the current time if they desired.  Ms. Foster replied that the Department had given employees the option to pay the amount owed at the time of conversion or any time thereafter.  Ms. Giunchigliani asked whether employees were aware of their options at the time of the March 1999 conversion to the new system.  Ms. Foster explained that the Department had sent out three or four mailings to employees notifying them that the conversion was going to take place, and an individual letter had been sent to each and every employee explaining the situation and advising them of the amount owed for the overlapping week.  Ms. Foster stated that a few years later, the Department had added that information to paycheck stubs to remind employees of their obligation, and had sent out another mailing.  The Department had also advised employees that they could use accrued leave to pay back the amount owed, or could pay the amount back in installment payments.  Ms. Giunchigliani asked whether employees had taken advantage of those options; Ms. Foster replied that some employees had taken advantage of the options.  Ms. Giunchigliani asked whether that had helped decrease the amount from approximately $9 million to $6 million.  Ms. Foster stated that was what had helped with the decrease in the overall amount, however, the majority had been paid by employees who had terminated.

 

Chairman Arberry called for a motion regarding A.B. 217.

 

ASSEMBLYMAN HETTRICK MOVED TO DO PASS A.B. 217.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED UNANIMOUSLY. 

 

********

 

Chairman Arberry recognized students present at the hearing from Silver Springs High School and declared the Committee in recess.

 

Chairman Arberry reconvened the hearing and announced that the Committee would continue with budget closings.

 

BUDGET CLOSINGS

 

JEAN CONSERVATION CAMP (101-3748) –

BUDGET PAGE CORRECTIONS-120

 

Mr. Stevens indicated that the only adjustments to BA 3748 involved the difference in prison population projections and transfer of inmates between particular institutions to make that plan work.  The minor adjustments totaled $1,076.

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3748 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN PARKS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblyman Griffin, and Assemblywomen Chowning, Gibbons, and Giunchigliani were not present for the vote.)

 

BUDGET CLOSED.

 

********

 

SILVER SPRINGS CONSERVATION CAMP (101-3749) –

BUDGET PAGE CORRECTIONS-125

 

Mr. Stevens stated that the adjustments to BA 3749 were minor in nature.

 

ASSEMBLYMAN ANDONOV MOVED TO CLOSE BA 3749 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYMAN BEERS SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblyman Griffin, and Assemblywomen Gibbons and Giunchigliani were not present for the vote.)

 

BUDGET CLOSED.

 

********

 

CARLIN CONSERVATION CAMP (101-3752) –

BUDGET PAGE CORRECTIONS-129

 

Mr. Stevens noted that the technical adjustments to BA 3752 mainly involved the inmate-driven costs based on different population projections.  Staff had also adjusted inmate room and board revenue by $174 to correspond with the revised prison population projection.

 

ASSEMBLYMAN MARVEL MOVED TO CLOSE BA 3752 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblyman Griffin, and Assemblywomen Gibbons and Giunchigliani were not present for the vote). 

 

BUDGET CLOSED.

 

********

 

TONOPAH CONSERVATION CAMP (101-3754) –

BUDGET PAGE CORRECTIONS-133

 

Mr. Stevens stated that the adjustments to BA 3754 were minor and were based on the revised prison population plan.

 

ASSEMBLYWOMAN CHOWNING MOVED TO CLOSE BA 3754 AS RECOMMENDED BY STAFF WITH TECHNICAL ADJUSTMENTS.

 

ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.

 

THE MOTION CARRIED.  (Speaker Perkins, Assemblyman Griffin, and Assemblywoman Gibbons were not present for the vote.)

 

BUDGET CLOSED.

 

********

 

JUSTICE ASSISTANCE ACT (101-4708) – BUDGET PAGE PS-26

JUSTICE GRANT (101-4736) – BUDGET PAGE PS-29

 

Mr. Stevens asked that the Committee consider holding BA 4708 and BA 4736.

 

Assemblywoman Giunchigliani explained that the accounts were under investigation by the Department of Defense because of the use of funds for the Federal Assistant Liaison Connecting Officials of Nevada – Networking Equipment Support Team (FALCON’S NEST).  She would not feel comfortable closing the budgets until the status of the equipment involved in the investigation had been ascertained.

Chairman Arberry announced that the budgets would be held.

 

*******

 

With no further business to come before the Committee, Chairman Arberry declared the hearing adjourned at 10:11 a.m.

 

RESPECTFULLY SUBMITTED:

 

                                                           

Carol Thomsen

Committee Secretary

 

APPROVED BY:

 

 

                                                                                         

Assemblyman Morse Arberry Jr., Chairman

 

DATE: