MINUTES OF THE
SENATE Committee on Government Affairs
Seventy-second Session
April 14, 2003
The Senate Committee on Government Affairs was called to order by Chairman Ann O'Connell, at 2:07 p.m., on Monday, April 14, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4412, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Ann O'Connell, Chairman
Senator Sandra J. Tiffany, Vice Chairman
Senator William J. Raggio
Senator Randolph J. Townsend
Senator Warren B. Hardy II
Senator Dina Titus
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Assemblyman Lynn C. Hettrick, Assembly District No. 39
Assemblyman John Oceguera, Assembly District No. 16
STAFF MEMBERS PRESENT:
Michael Stewart, Committee Policy Analyst
Scott Wasserman, Committee Counsel
Joseph Bozsik, Committee Secretary
OTHERS PRESENT:
T. Michael Brown, Assistant Director of Administrative Services, Douglas County
Leola Tucker, President, Carson Valley Historical Society
Lawrence Jacobsen, Lobbyist, City of Carson City, Douglas County, and Lyon County
Dan Musgrove, Lobbyist, Clark County
Ted J. Olivas, Lobbyist, Assistant Director of Finance, Clark County
Justine A. Chambers, Lobbyist, City of Carson City and Nevada Public Purchasing Study Commission
Kevin Chapman, Deputy Fire Chief, Clark County Fire Department
Raymond C. McAllister, Lobbyist, Professional Firefighters of Nevada
Mary C. Walker, Lobbyist, Committee on Local Government Finance
Gordon Hella, Budget Analyst, Supervisor, Department of Taxation
Chairman O’Connell opened the hearing on Assembly Bill (A.B.) 199.
ASSEMBLY BILL 199 (1st Reprint): Exempts proceeds from annual tax that counties may impose to support county museums, art centers and historical societies from limitation on allowed revenue from taxes ad valorem for counties. (BDR 20-157)
Assemblyman Lynn C. Hettrick, Assembly District No. 39, noted the Carson Valley Historical Society and the Douglas County commissioners requested A.B. 199. The bill was permissive, he noted; lines 5 through 8 on page 2 would allow the tax currently permitted in State law to be moved outside of the operating cap. Assemblyman Hettrick concluded the inclusion of the tax under the operating cap had a negative impact on government and A.B. 199 would give each county the flexibility to move it in or outside the cap.
T. Michael Brown, Assistant Director of Administrative Services, Douglas County, said he supported A.B. 199. Mr. Brown noted the exclusion of the assessed tax in the operating cap would not be detrimental to county finances and it would enable support of Douglas County’s museums.
Leola Tucker, President, Carson Valley Historical Society, indicated she supported A.B. 199. The bill would not create new taxes, she said; it was enabling legislation to help the historical society to hire staff. She noted the society was seeking accreditation. She concluded many in Douglas County were proud of the Genoa Courthouse Museum and the Carson Valley Museum and Cultural Center.
Senator O’Connell asked Ms. Tucker if, without A.B. 199, the historical society would have to eliminate staff. Ms. Tucker responded, the historical society had many great volunteers who would continue raising funds through many activities. She noted, as in any organization, they were seeking professionals for accreditation and advancement.
Senator Tiffany asked what in the bill had been amended. Senator O’Connell indicated on the second page, “may” was changed from “must.” Assemblyman Hettrick said the amendment made clear that the tax could be moved back under the cap, if wanted.
Lawrence Jacobsen, Lobbyist, City of Carson City, Douglas County, and Lyon County, commented the Douglas County Historical Society was the best in Nevada. He noted the historical society had cataloged 9533 hours of volunteer effort and operated facilities in Genoa and Gardnerville. He stressed the society was accepted by the community and he noted his support for the bill.
Senator O’Connell closed the hearing on A.B. 199 and opened the hearing on A.B. 147.
ASSEMBLY BILL 147: Revises provisions relating to purchasing by local governments. (BDR 27-799)
Dan Musgrove, Lobbyist, Clark County, said Assemblyman John Oceguera submitted A.B. 147. He introduced Ted Olivas in Las Vegas who spoke to the merits of the bill.
Ted J. Olivas, Lobbyist,
Assistant Director of Finance, Clark County, indicated the intent of A.B.
147 was to allow Clark County to purchase personal safety equipment through
a noncompetitive process. Personal safety equipment, he said, included
equipment required in emergency responses. He explained, page 1 included
elements of the “lowest responsive and responsible bidder” which were placed in
the bill to provide clarity. Page 2, he continued, included an additional
element, “Performance or delivery date.” Mr. Olivas said page 3 referenced Nevada
Revised Statute (NRS) 332.085, which determined the responsibility of any
bidder. He noted section 2, subsection 2, added elements for a bidder’s
responsibility determination. The “meat” of the bill, he said, started on page
4, line 23, which allowed Clark County to buy personal safety equipment through
a noncompetitive process. The key was the equipment would be used to respond in
emergencies, he said. Mr. Olivas indicated he wanted to make sure the
definition was narrowly written to avoid abuse. Secondarily, he commented, page
4, line 33, ensured checks and balances in terms of comparable cost of
equipment purchased by the county and equipment available to the general
public. He noted a definition of personal safety equipment was included to
minimize the possibility of misuse by a jurisdiction. Mr. Olivas stated he
thought the police and fire department management should have the ability to
purchase equipment best fitting the needs of their respective departments for safety,
quality, comfort, and standardization.
Senator O’Connell asked if the past performance of the bidder had always been included and, if so, how long had that been in statute. Mr. Olivas noted he did not know when bidder performance was added, but it had been in statute for at least 12 years.
Assemblyman John Oceguera, Assembly District No. 16, stated the police and fire departments did not have the ability to purchase, for example, the best bulletproof vests. The best safety equipment needed to be purchased, he explained, not the cheapest. He said often departments went through a process to determine which equipment was best, and after the bidding process, different equipment would be purchased.
Senator Care asked Mr. Olivas what the legal effect would be of deleting, “must” and adding “may” in section 1, subsection 1. Mr. Olivas said the change came from the Legislative Counsel Bureau, but he noted consideration of all factors were required. For instance, Mr. Olivas explained, “delivery date” was added because a situation might occur when a quick delivery was worth more money. He concluded each factor was not necessarily considered on every bid.
Scott Wasserman, Committee Counsel, noted the change was substantive and it would authorize, rather than mandate, the governing body or its authorized representative to judge the lowest responsive and responsible bidder on the specified criteria. He concluded adding “may” changed the mandate to an authorization.
Senator Care asked if the fire department would be affected. Mr. Wasserman responded it had a broader application, so it would not. He noted it was an exception from the bidding process.
Senator Care asked Mr. Olivas how many vendors were available to buy safety equipment. Senator Care noted he did not want to create an exclusive outlet for the county to do business. In response, Mr. Olivas said there were many vendors, however some vendors specialized in specific pieces of equipment like helmets or boots. He said A.B. 147 did not necessarily indicate one company would be used exclusively. The bill would allow the county, Mr. Olivas noted, to ask for a product from a specific manufacturer, but the bid would still be sent out for distributors who could provide the specific product. Mr. Olivas continued, the county already had the ability to sole source with justification. He commented it was difficult to define necessary specifications. Mr. Olivas concluded the county was often caught between getting needed equipment for the department and legal requirements; A.B. 147 would allow for flexibility.
Senator Tiffany inquired what due diligence would be taken before purchases to insure competitiveness. Mr. Olivas indicated his office for many years had used a district attorney opinion, which included a list of tasks needing to be done to adequately define the actual performance requirements of the equipment. Examples of specifications on the list, Mr. Olivas stated, were: what made the equipment unique, where the equipment could be purchased, and if the equipment was for personal safety.
Senator Tiffany asked if a fire chief could specify, for example, the purchase of 50 pairs of boots from a specific manufacturer. Mr. Olivas said a fire or police department representative would have to sell the idea to the purchasing manager prior to its approval by the board. He indicated he could not put an item on the agenda that did not meet the strict criteria as defined in law. Mr. Olivas indicated an individual might make the sole decision in a rogue organization, but in his experience, major jurisdictions had checks and balances in the process. Senator Tiffany concluded it was important to maintain checks and balances, if the competitive process were removed.
Senator Hardy noted NRS 332.115
offered exemptions for sole sourcing under certain circumstances, but did not
go far enough. Paragraph (c) of subsection 1 of the statute allowed entities to
sole source replacement parts, but in terms of
saving money, Senator Hardy noted, it would have little impact if the equipment
had not been initially sole sourced. He said other emergencies could exist
where sole sourcing could be needed, for instance, if a rural water district
pump malfunctioned and needed replacing. He said he would like time to explore
with Mr. Olivas and others for a narrow enough set of circumstances whereby
other considerations could be made. He concluded he agreed with Senator
Tiffany; an absolute set of criteria was needed for bidding.
Justine A. Chambers, Lobbyist, City of Carson City and Nevada Public Purchasing Study Commission, noted her support for A.B. 147.
Senator O’Connell asked Ms. Chambers if the issues Senator Hardy discussed were mentioned in the Assembly and Ms. Chambers answered no.
Kevin Chapman, Deputy Fire Chief, Clark County Fire Department, said he was in support of A.B. 147. He indicated the bill would help the fire department secure the best equipment for the firefighters.
Raymond C. McAllister, Lobbyist, Professional Firefighters of Nevada, noted his support for A.B. 147. Addressing Mr. Hardy’s comments, Mr. McAllister noted the Las Vegas fire department sole sourced the whole fleet of fire apparatus. He said the fire department had six types of fire engines. The justification for sole sourcing was made because if all fire engines and ladder trucks were purchased from one company, parts would be easier to replace, the mechanics would have to learn only one type of engine, and firefighter transfers would automatically be familiar with the trucks. Mr. McAllister also noted when the purchasing of “turnouts” was made, only one type of “turnout” was specified. He continued, once the bids were received, all firefighters were wearing the same “turnouts,” which made it easier to get them in a timely manner from the manufacturer.
Senator Hardy asked what “turnouts” were. Mr. McAllister said “turnouts” were the bunker coat and pants. He noted a whole ensemble: helmets, gloves, hoods, boots, pants, and coats, were all purchased from one manufacturer as a package. He indicated a better bid price was received by purchasing everything at once.
Senator O’Connell closed the hearing on A.B. 147 and opened the hearing on A.B. 149.
ASSEMBLY BILL 149: Makes various changes concerning local government finance. (BDR 31-322)
Mary C. Walker, Lobbyist, Committee on Local Government Finance, said the committee had requested the Nevada Association of Counties submit a bill on its behalf regarding a couple of cleanup items. First, she noted, a problem with the Department of Taxation existed with processing exemptions for smaller special districts. The second cleanup item, Ms. Walker indicated, was a conflict in the law when revenues were required to be passed between local governments.
Senator O’Connell asked for clarification of section 1, subsection 4. She asked if they specifically meant to drop the first part of the section and not include it in the audit oversight.
Gordon Hella, Budget Analyst, Supervisor, Department of Taxation, said there had always been a provision for exempt status for special districts. He commented, in the Seventy‑first Session of the Nevada Legislature, the exemption was increased from $100,000 to $200,000. The main provision of the exempt status was for local governments to be exempt from the requirement to provide an annual audit of financial statements because they were small districts and an audit would cost as much as a third or fourth of their operating revenues. Mr. Hella stated the Department of Taxation and the counties were trying to change the date from April 15 to March 1, allowing local governments to file their final budget with the exempt status. Mr. Hella said conditional approval was started because districts might have budgeted capital expenditures over $200,000, but because of delays, the money would not be spent during the fiscal year. In response to Senator O’Connell’s inquiry, he said changing sections might clarify what was meant to be exempted.
Mr. Wasserman said subsection 4
stated, “A board of county commissioners may request the Department of Taxation
to audit the financial records of a special district that is exempt from the
requirement of providing for an annual audit pursuant to. ¼” He
noted he did not believe the intent was to delete the existing authority of the
board of county commissioners from requesting the
Department of Taxation to audit the financial records. If that was the case, he
said, subsection 2 should be changed to read “A board of county commissioners
may request the Department of Taxation to audit the financial records of either
of these types of districts that are exempted from the audit procedures.”
Senator O’Connell asked Mr. Hella if that was what he wanted and Mr. Hella said “Right.”
Mr. Hella said the change occurred in the Seventy-first Session of the Nevada Legislature, and difficulties had been found in the managing of the process. He explained districts were filing final budgets with exempt status letters, allowing the department time for review.
Ms. Walker indicated section 3 would change NRS 354.626. She explained the law stated the person responsible for over expending the budget could be held guilty of a misdemeanor, and if convicted, could be removed from office. Ms. Walker said section 3, subsection 2, listed exemptions to the over‑expenditure rule, such as federal grants and long‑term contracts. She said she wanted to add an exemption to make legal the receipt by a local government of increased revenue not anticipated in the final budget, which otherwise would be required by statute to be remitted to another governmental entity.
Ms. Walker said the State
required all counties to levy a 1½-cent property tax for the indigent accident
fund. She indicated the money went to a Statewide liability pool for
catastrophic types of indigent accidents. The county collected the tax, but by
law, remitted the revenue to the State, Ms. Walker said. She concluded property
tax delinquencies from prior years had been collected allowing for more money
in the fund than was budgeted, which was illegal. She
asked the committee to add the exemption to the provisions of over
expenditures, thereby eliminating the catch-22.
Senator O’Connell adjourned the meeting at 2:51 p.m.
RESPECTFULLY SUBMITTED:
Joseph Bozsik,
Committee Secretary
APPROVED BY:
Senator Ann O'Connell, Chairman
DATE: