Posts Tagged ‘board of examiners’

State Board Settles Tax Dispute With Washoe County For $7.25 Million

By Sean Whaley | 5:16 pm September 11th, 2012

CARSON CITY – The state Board of Examiners today voted to settle a legal dispute with Washoe County over local tax revenue taken by the 2009 Legislature to balance the state budget.

The settlement provides an immediate payment of $1.25 million to the county, with another $6 million being allocated later for major road maintenance projects. As part of the agreement, the road projects will be moved up in the state’s funding priorities.

The original legal claim submitted in 2011 was for $21.4 million, but the county later revised its demand downward to about $17.9 million.

Gov. Brian Sandoval, a member of the board, called it a good deal for the state since the projects to be paid for with state highway funds have already been approved for funding by the state Transportation Department. The agreement also makes it clear there is no admission by either side that there is fault or a legal liability for the settlement, he said.

The cash portion of the settlement equates to about seven cents on the dollar, Sandoval noted.

If the highway piece of the settlement is included, the deal provides about 40 percent of what the county had sought in its revised request, said state Budget Director Jeff Mohlenkamp.

“It’s a good settlement and I think it’s important to recognize, as I said, that there was no admission of liability by either party,” Sandoval said after the meeting. “I don’t think it’s ever a good idea to be having litigation or disputes between governmental entities.”

Washoe County submitted the claim last year, citing a Nevada Supreme Court ruling in May 2011 that said the Nevada Legislature improperly took $62 million in 2010 from the Clark County Clean Water Coalition fund to balance the state budget. The county said the ruling applied to actions taken by lawmakers in 2009 as well.

Clark County has also submitted a claim based on the same legal decision, and is seeking $102.5 million in local taxes also taken by the 2009 Legislature. But the county in June opted to sue rather than continue with negotiations.

Even so, Sandoval said today that negotiations continue with the county to resolve the dispute, which occurred prior to his term as governor.

But the state has just recently received a new claim, from the city of Reno, based on the same Supreme Court ruling.

Reno City Manager Andrew Clinger appeared before the board to briefly discuss the claim filed for $2 million. The settlement with Washoe County approved today did not provide any direct benefit to the city, he said.

Reno City Manager Andrew Clinger.

Sandoval said the claim will be reviewed by the Attorney General’s Office as has been done with the other requests.

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Audio clips:

Reno City Manager Andrew Clinger says the city has also submitted a claim:

091112Clinger :24 aware of that.”

Gov. Brian Sandoval says the settlement is a good deal for the state:

091112Sandoval :28 between governmental entities.”

State Board To Consider Settling Tax Dispute With Washoe County For $7.25 Million

By Sean Whaley | 12:08 pm September 6th, 2012

CARSON CITY – The state Board of Examiners on Tuesday will consider settling a dispute with Washoe County over $21.5 million in local property tax revenue taken by the 2009 Legislature to balance the state budget.

The proposed settlement would provide an immediate payment of $1.25 million to the county, with another $6 million being allocated later for major road maintenance projects.

Gov. Brian Sandoval. / Nevada News Bureau file photo.

Washoe County submitted the claim to the Board of Examiners in September 2011, citing a Nevada Supreme Court ruling in May 2011 that said the Nevada Legislature improperly took $62 million in 2010 from the Clark County Clean Water Coalition fund to balance the state budget. That ruling forced Gov. Brian Sandoval to reconfigure his proposed 2001-13 state budget by extending a set of taxes that had been scheduled to expire on June 30, 2011.

The county argued the court ruling applied to the funds taken by lawmakers in 2009 as well.

Clark County also submitted a claim, seeking $102.5 million in property taxes also taken by the 2009 Legislature. But the county in June opted to sue rather than continue settlement negotiations with state officials.

Sandoval said in June he was disappointed at the decision of the Clark County Commission to take the matter to court and he questioned whether the amount of the claim was accurate.

“We’ve been trying to work with Clark County, again, for months,” he said in an interview on the Nevada NewsMakers television program. “And I was extremely disappointed that they weren’t willing to come to the table to try and resolve this. And those chose to litigate rather than try to work it out.”

The Legislature in 2009 required the state’s two largest counties, Clark and Washoe, to give up 9 cents per $100 in assessed valuation collected in property taxes to the state. The actions by lawmakers in 2009 occurred before Sandoval became governor.

The Board of Examiners is composed of Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller. The agenda for the meeting indicates that both the state and Washoe County want to settle the matter.

Local Workforce Boards Awarded Funding Despite Ongoing Concerns Over Excessive Administrative Costs

By Sean Whaley | 4:50 pm August 14th, 2012

CARSON CITY – More than $27 million in federal job training funds were awarded to two local workforce development boards by the Board of Examiners today despite ongoing concerns about how the money is being spent by the Southern Nevada board, called Workforce Connections.

The Southern Nevada board will get more than $19 million in funding over the next two years despite the findings in an audit released earlier this year that it was spending nearly twice as much on administration and monitoring of programs than its Northern Nevada counterpart, Nevadaworks.

Dennis Perea, deputy director of the Department of Employment, Training and Rehabilitation (DETR), told the Board of Examiners that the funds are being awarded to the two local boards until such time as the U.S. Department of Labor grants a waiver to the state to have the funds administered instead by one statewide board. That decision is expected within the month, he said.

Gov. Brian Sandoval, a member of the Board of Examiners, asked for assurances from Perea that the money would be spent on job training efforts and not excessive administrative expenses.

Sandoval and DETR are pushing for the new funding distribution plan that would replace the two local boards.

“There’s a lot of money involved here in these contracts, and are you confident that if these contracts were to be approved that the dollars would be spent wisely?” he asked Perea. “There was an audit, it didn’t go well. It sounds like there hasn’t been much improvement.”

Perea said the new management at Workforce Connections has made improvements, but there are still concerns about the amount of money being spent on administrative expenses.

“They are budgeting at about 20 percent of the funds being held at the board level for board expenses,” he said. “We’re in the process of talking about ways to limit that even further. But we do believe they are moving in the right direction, maybe not quick enough.”

The contracts were in front of the Board of Examiners because the two local boards are the vehicles to spend the job training funds at the current time, Perea said.

After the meeting, Perea said that if the waiver is approved by the U.S. Department of Labor, the grant funding would be redirected to a newly constituted state workforce board, possibly as early as January. The grant funds are paid out as they are spent by the local workforce boards, and so a transition would occur redirecting the funding to the new state board, he said.

The statewide and Northern Nevada workforce boards have approved the new proposal from DETR to administer the funds through one statewide board, but Workforce Connections has opposed the recommendation.

“As we sit here today we need to approve these contracts to get the money out because at the end of the day we need to help people,” Sandoval said. “But I just want, I’ve said this before, I want to make sure as many possible dollars get to the people that actually need it, than having it all eaten up with administration.”

DETR Director Frank Woodbeck has proposed the plan to consolidate the three separate boards that oversee workforce development into one, which is expected to result in $5 million more in federal funds directed annually to helping train job seekers to find employment.

The plan, “Moving Nevada Forward: A Plan For Excellence in Workforce Development,” was submitted to the Department of Labor last month.

Currently, funding is provided from the federal Department of Labor to the Governor’s Workforce Investment Board and funneled to the two local boards. These boards in turn contract with public and private organizations to offer workforce training programs to youth and adult and dislocated workers.

But a recent audit of this system by the state Division of Internal Audits revealed that too many federal dollars are lost to administrative and duplicative costs.

“This new plan will result in a significant amount of funds being spent directly for much-needed services, as we are essentially removing an administrative layer of expense,” Woodbeck said when the plan was released in May. “Administrative functions would be moved to DETR and community service providers will continue to deliver direct services to job seekers.”

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Audio clips:

Gov. Brian Sandoval asks for assurances the money will be spent appropriately:

081412Sandoval1 :20 be spent wisely?”

Sandoval says the money has to get into the hands of those people who actually need it:

081412Sandoval2 :17 up with administration.”

DETR Deputy Director Dennis Perea says too much money is still being spent on administration by the Southern Nevada board:

081412Perea :12 that even further.”

 

 

 

Board Of Examiners, Including Gov. Brian Sandoval, Approve Contract To Establish Nevada Health Insurance Exchange

By Sean Whaley | 2:43 pm August 14th, 2012

CARSON CITY – The state Board of Examiners, including Gov. Brian Sandoval, today approved a contract worth up to $72 million through 2016 to set up the information technology system needed to implement the Silver State Health Insurance Exchange.

The contract with Xerox State Healthcare will allow the state to move forward with the exchange, basically a one-stop shop for purchasing health insurance. The exchanges were authorized by the Affordable Care Act, most of which was upheld in a U.S. Supreme Court decision in June.

Gov. Brian Sandoval. / Nevada News Bureau file photo.

Sandoval said he is supporting the development of a Nevada-based exchange so it can be tailored to fit the needs of Nevada residents. The alternative would be to have the federal government operate an exchange in the state. The state would still be obligated to pay for its operation beginning in 2015.

Because the federal government is paying for more than 99 percent of the cost of implementing and operating the exchange through Dec. 31, 2014, Sandoval said it was a prudent decision for the state to move forward with its own program.

The state exchange must be operational by Oct. 1, 2013.

While the development of a Nevada exchange is the right decision for the near term, Sandoval said it will have to become self-sustaining when the state has to find alternative funding sources to pay for its operation starting Jan. 1, 2015. Sandoval said he will oppose any effort to fund it via the state general fund or through an assessment on the state insurance premium tax.

One option to fund the program is an assessment on participants in the exchange.

The exchange should have to “stand on its own merits through user fees,” he said.

“I feel like I would prefer to have this state have the control over this,” Sandoval said during a lengthy discussion of the contract. “We don’t know if we were to not have our own exchange what the federal government would do and what it would look like and what they would charge the state, which we wouldn’t have any say obviously as to what that amount would be.”

Jon Hager, executive director of the exchange, said that if the Affordable Care Act is repealed following the November presidential election, the state will be able to end the contract with Xerox without penalty.

The state is still awaiting notification from the federal government that it will receive a $50 million grant to pay for the Xerox contract, and other expenses of the exchange, he said. That notification is expected within the next few days.

The Board of Examiners, which also includes Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the contract.

Estimating enrollment in the exchange is still a work in progress. Sandoval said today he is still gathering information on the implications of expanding Medicaid eligibility allowed under the Affordable Care Act. Expanding Medicaid would likely reduce enrollment in the exchange.

Enrollment estimates for the exchange for 2014 range from a low of 119,000 to a high of 145,000, depending on the Medicaid expansion issue.

The board overseeing the exchange will meet Thursday to consider a number of issues in  the ongoing development of the exchange.

Nevada’s decision to move forward with its own exchange comes after more than 70 Republican members of Congress sent a letter to the nation’s governors in June urging them to oppose the creation of health care exchanges.

Sandoval moved forward in his first days as governor in January 2011 to implement the exchange. It was created by Senate Bill 440 of the 2011 Legislature. It was passed unanimously of those voting in both the Senate and Assembly at the end of the session. Four members of the Assembly were excused and did not vote.

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Audio clips:

Gov. Brian Sandoval says it is better for the state to run its own exchange, at least in the near term:

081412Sandoval1 :20 amount would be.”

Sandoval says the exchange will have to survive on its own merits through user fees, not state tax support:

081412Sandoval3 :27 through user fees.”

Solar Project No Short-Term Energy Panacea For Nevada Office Of Military

By Sean Whaley | 3:51 pm April 3rd, 2012

CARSON CITY – Nevada’s Office of the Military figured it would be money ahead after entering into a contract with a firm to build solar panels on three of its sites around the state to supply it with electricity.

But today officials with the office won approval from the state Board of Examiners to seek $46,284 from a legislative contingency fund to pay excess utility costs. The reason is because the solar energy being provided under the contract is costing the agency more than if it purchased electricity directly from NV Energy.

Photo by Fernando Tomás via Wikimedia Commons.

The actual shortfall is $74,000 but budget savings are being used to help reduce the amount needed from the contingency fund.

Jennifer McEntee, administrative services officer for the agency, said the 20-year contract with Sierra Solar 1 charges 15 cents per kilowatt hour. Currently NV Energy is charging about 11 cents per kilowatt hour. At the time the contract was signed, NV Energy was charging 14.75 cents per kilowatt hour so it looked like a good deal.

The board, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the request, which will now go to the Legislature’s Interim Finance Committee.

State Budget Director Jeff Mohlenkamp also told the board that such contracts going forward are being reviewed carefully to ensure they make financial sense for the state.

“I can assure you that we are looking very carefully at the future awards that we give out,” he said.

Sandoval was told there is no interest in renegotiating the rate by the contractor although some concessions were made. The deal was approved before Sandoval was elected governor in December 2010, retroactive to September 2009.

“We actually spent probably about six months with representatives of Sierra Solar attempting to renegotiate,” said Lt. Col. Rick Blower. “Their position had always been that they have invested millions of dollars to build this system and that the income stream was what made it possible for them to build the project with their funds with no state funds or federal funds.”

Sandoval said after the meeting: “As I said we will be vigilant as we move forward to make sure we’re not in that position again.”

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Audio clips:

Lt. Col. Rick Blower says the agency got some concessions from the contractor:

040312Blower1 :27 burden to us.”

But Blower says the company would not lower its charges:

040312Blower2 :19 or federal funds.”

Gov. Brian Sandoval says the state will make sure it is not placed in such a position again:

040312Sandoval :07 that position again.”

State Tax Department Seeks Funding To Monitor Cigarette Sales To Protect Nevada’s Tobacco Payments

By Sean Whaley | 2:16 pm January 10th, 2012

CARSON CITY – A state panel today supported a request from the Department of Taxation for $260,000 to hire a team of auditors to track cigarette sales to protect a $40 million a year payment to Nevada from the nation’s major tobacco companies.

As much as $360 million paid to the state beginning in 2003 is at risk as Nevada engages in arbitration over the annual payments made by the nation’s major tobacco companies as part of the 1998 Master Settlement Agreement (MSA), said William Chisel, director of the Tax Department.

William Chisel, director of the state Tax Department, testifies today at the Board of Examiners meeting. / Photo: Nevada News Bureau.

“The stakes for the arbitration are high,” he said. “The risk of losing substantial amounts of money increases over the years if we do not institute this team.”

The tobacco payments help fund the Gov. Kenny Guinn Millennium Scholarship for eligible Nevada high school graduates, among other programs.

The Board of Examiners, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the request for the funding from the Legislature’s contingency fund to establish the three-person enforcement unit. Masto was not present for the meeting.

Lawmakers who serve on the Senate and Assembly money committees will meet as the Interim Finance Committee Feb. 9 to consider the request.

Sandoval asked Chisel if the request should have been submitted to the 2011 Legislature so tobacco funding could have been used to fund the unit. The attorney general’s office said the funding from the master settlement agreement has historically funded its oversight of the tobacco agreement, but that the Tax Department has not been funded in this way.

Sandoval said the enforcement unit costs should be built into the next budget with tobacco funds identified as the funding source.

Chisel said it is important for the state to monitor the sales of cigarettes by the smaller tobacco companies that are not part of a master settlement agreement.

As part of the MSA, there is a requirement that these smaller companies set aside a portion of their tobacco sales in an escrow account in an amount proportionate to the payments made to the state by the major tobacco companies. The MSA provides for a reduction of the required annual payments by the major tobacco companies to any state which fails to adequately enforce these laws in a particular calendar year.

Chisel said the team will work to protect the payments that have already been made to the state.

“Well, we’re in arbitration right now with the big tobacco companies and our concern is that we want to track these nonparticipating manufacturers, the ones that did not get involved with the MSA,” he said. “We’re responsible to make sure that they pay into an escrow account of two cents per cigarette. At stake is the $40 million we get each year for the MSA payment.”

Nevada has not tracked these sales and payments before, and doing so would lessen the risk of losing any portion of the MSA payments in the arbitration process, Chisel said.

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Audio clips:

William Chisel, director of the state Tax Department, says the state needs to keep track of cigarette sales by companies not participating in the tobacco settlement agreement:

011012Chisel1 :18 cents per cigarette.”

Chisel says at stake is the $40 million annual payment as a result of the MSA:

011012Chisel2 :05 the MSA payment.”

Chisel says the participating tobacco companies want the state to monitor compliance by nonparticipating manufacturers:

011012Chisel3 :10 monitoring these NPMs.”

State Board OKs $175,000 Settlement With Former Inmate To Settle Federal Lawsuit

By Sean Whaley | 4:40 pm December 13th, 2011

CARSON CITY – A state board today agreed to pay a former prison inmate $175,000 to settle a federal civil rights lawsuit stemming from his shooting by a correctional officer in 2006.

The Board of Examiners, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the settlement with former inmate Donald Hixon.

Hixon was serving a sentence for possession of a stolen vehicle at the High Desert State Prison in Indian Springs when he was shot by a correctional officer for fighting with another inmate. Hixon was not armed.

High Desert State Prison.

The correctional officer, Paul Chaffee, was found not guilty of battery in a 2008 trial.

Stephen Quinn, representing the attorney general’s office, recommended the board accept the settlement.

“There’s a significant risk of an adverse outcome that will be significantly larger in dollar amount than the amount of this settlement, so this settlement is to fairly and significantly minimize that risk of exposure to the state,” he said.

Quinn said the case has already gone to the 9th U.S. Circuit Court of Appeals, which would mean a significant amount of legal fees that would have to be paid to Hixon’s counsel if the state was to lose the case at trial.

“I think this is a very good result for the state, governor,” he said.

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Audio clip:

Stephen Quinn, representing the attorney general’s office, says the settlement is a good deal for the state:

121311Quinn :18 to the state.”

 

 

State Board OKs $65K For Ethics Commission To Hire Staff To Reduce Backlog Of Unpublished Opinions

By Sean Whaley | 2:20 pm December 13th, 2011

CARSON CITY – A state board today approved a $65,000 request from the state Ethics Commission to hire an attorney to help reduce a two-year backlog of unpublished opinions.

The Board of Examiners, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the request submitted by Caren Jenkins, executive director of the state Ethics Commission.

Caren Jenkins, executive director of the state Ethics Commission, spoke at the Board of Examiners meeting today. / Photo: Nevada News Bureau.

The request to tap a legislative contingency fund to pay the salary of an attorney for six months must now be approved by the Legislature’s Interim Finance Committee, which meets Thursday.

“I know that it’s unusual to fund a position at this level, but I fear that without immediate attention to the backlog we’ll never catch up,” Jenkins told the board.

The Ethics Commission is adding to the backlog as it hears and decides more cases, she said. There are approximately 60 opinions that need to be written.

The emphasis for the commission has been hearing matters and rendering decisions, Jenkins said. The backlog has been an issue for some time, but has recently hit a critical stage, she said.

The commission sought two additional positions from the 2011 Legislature but the request was not funded due to other demands on scarce tax revenues.

Gov. Brian Sandoval asked if there systemic issues with the operation of the commission that could help reduce the backlog.

Jenkins said such changes are being considered. But even with the implementation of successful streamlining efforts, the agency will not be able to catch up with the backlog, she said. The commission has a meeting set for Wednesday where the issue will come up for further discussion, Jenkins said.

“It’s not just money, I guess is the bottom line,” Sandoval said. “I’m going to vote to support this today but I would like to see some demonstration by the commission that it is seeking to improve its efficiencies and efficacy as well.”

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Audio clips:

Caren Jenkins, executive director of the state Ethics Commission, says that without the funding, the backlog may never be addressed:

121311Jenkins :11 never catch up.”

Gov. Brian Sandoval says the issue isn’t just money but creating efficiencies as well:

121311Sandoval :29 efficacy as well.”

State Agrees To Pay $25 Million For Seven Acres Needed For Las Vegas Road Project

By Sean Whaley | 4:55 pm November 8th, 2011

CARSON CITY – A state panel today agreed to pay $25 million to settle an eminent domain lawsuit over seven acres of land in the path of a state Department of Transportation road improvement project in Las Vegas.

The Board of Examiners approved the settlement with Wall Street Nevada LLC to allow Project Neon, a $1.2 billion improvement plan for Interstate 15 from Sahara Avenue to the Spaghetti Bowl, to proceed.

Susan Martinovich, director of the Department of Transportation, said the project will be done in phases because of the cost. Depending on funding, the project could take until 2030 to complete.

The property near Charleston Boulevard was purchased by the company in 2006 for $21.4 million, said Mike Chapman, an attorney in private practice working on the case on behalf of the state. The property owners had sought as much as $35 million, he said.

Attorney Mike Chapman discusses the $25 million settlement at the Board of Examiners today. / Nevada News Bureau.

“If we reach this settlement, does that buy eternal peace in terms of litigation associated with this piece of property?” asked Gov. Brian Sandoval, a member of the board. “Do we have certainty, now, with regard to that property?”

Chapman said every effort has been made to build closure into the settlement agreement, including a full release from the Wall Street owners.

The city of Las Vegas is expected to participate in the settlement, but the amount is not yet known, he said.

Sandoval and Secretary of Ross Miller voted to approve the settlement.

“This is the best settlement that we could negotiate at the time, and weighing all of the risks with the benefits we think it does tilt in favor of recommending a settlement,” Chapman said in response to a question from Miller. “And so that is why we have presented it to the client, this board, and also the folks at NDOT, for their consideration.”

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Audio clip:

Attorney Mike Chapman says the $25 million settlement is the best that could be negotiated:

110811Chapman :22 for their consideration.”

State Board Authorizes First Contract With Former Employee As Required Under New Law

By Sean Whaley | 3:19 pm November 8th, 2011

CARSON CITY – The state Board of Examiners today authorized the Agency for Nuclear Projects to hire a former employee in a contract position to help continue the fight against Yucca Mountain.

Approval from the board, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, is now required for such agreements with current or former state employees as a result of a new law approved by the 2011 Legislature.

The law was passed after a legislative audit found numerous concerns with current and former state employees being hired as contractors to work for state agencies, sometimes at a much higher rate of pay. Many of the contracts were not clearly disclosed by state agencies.

The board, which met without Masto, approved the request from the agency to enter into a contract to hire Joe Strolin, its former acting executive director and Planning Division administrator. The actual contract, which will come to the board at its next meeting, is for one year at a cost of $50,000.

Bob Halstead, executive director of the nuclear projects agency, told the board that Nevada faces a serious threat to revive Yucca Mountain as a high-level repository for nuclear waste. The qualifications of Strolin will serve the agency well in its preparation to fight this effort, he said.

Nuclear Projects Executive Director Bob Halstead testifies today at the Board of Examiners. / Nevada News Bureau.

“I understand the intent of the Legislature to set a high bar for the approval of these types of exceptional requests,” Halstead said. “We have a situation where we have an extreme need, we have an individual with unique capabilities and experience, and it will help us within a difficult budget.”

The Yucca Mountain repository has been declared dead after President Obama pulled the plug on the project in 2010.

But Halstead said there are numerous forces that want the Yucca Mountain project to be revived and a critical time in this fight will begin in January. One battlefront is a federal lawsuit by the states of Washington and South Carolina to reactivate the licensing process for Yucca Mountain, he said.

“On the one hand, I don’t want to come before you and say that Yucca Mountain is alive again,” Halstead told Sandoval. “But our job is to keep Yucca Mountain dead, and there is a serious effort on the part of a number of parties to resume the licensing process. That is why it is important for Nevada to maintain its vigilance, both through the Agency for Nuclear Projects in your office, and through the attorney general’s office.”

Sandoval said Halstead made a compelling argument to hire Strolin, and the board voted to approve the request.

The new rules prohibit a current state employee from being hired under contract by a state agency unless approved by the Board of Examiners. The same approval is required of a former state employee who has not been out of state employment for at least two years.

Such contracts can only be approved if certain circumstances are found to exist, including situations where a short-term or unusual economic circumstance exists for an agency requiring such employment.

The legislative audit identified 250 current and former employees providing services to the state. These employees were paid a total of $11.6 million during fiscal years 2008 and 2009, the years covered by the review.

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Audio clips:

Nuclear Projects Executive Director Bob Halstead says he understands the legislative intent of the new law:

110811Halstead1 :22 a difficult budget.”

Halstead says Strolin’s expertise is important for the fight against Yucca Mountain:

110811Halstead2 :28 attorney general’s office.”

 

New Medicaid Contractor Misses Deadline After Controversial Bid Award

By Sean Whaley | 12:54 pm October 20th, 2011

CARSON CITY – A firm hired in January to take over operation of the state’s Medicaid billing and information systems has failed to complete the first key step in the process by an August deadline and has been given an extension to Dec. 5.

The Medicaid contract with HP Enterprise Services is one of the biggest for the state at a cost of $177 million over five-plus years, and proved controversial when it was approved by state officials in January.

HP had originally committed to transferring the existing Medicaid Management Information System now being operated by Magellan Medicaid Administration by Aug. 1, a five-month process that began March 1.

But Charles Duarte, administrator of the state Division of Health Care Financing and Policy, which oversees the Medicaid program, said this week the work was not completed by the deadline. The Department of Health and Human Services agreed to an extension to Dec. 5 to complete the transfer, he said.

The issue was HP finding the number of qualified staff it needed to complete the transfer on time, Duarte said.

The company is on track to complete the transfer by the new deadline, an assessment shared by a separate independent contractor called Public Knowledge hired by the state to oversee the work, he said.

“So far what we’ve seen with HP is they have been very willing to live up to their commitments and we’re going to hold them to that,” Duarte said.

An HP executive involved in the transfer said today the new deadline will be met.

“We’re definitely firing on all cylinders to make that date,” said Stu Bailey, general manager for state and local government health care in the Western U.S. for the company. “We meet with the state on a regular basis to ensure that. The IV&V (independent validation and verification) has been heavily involved to validate that what we’re saying and what we’re doing is on track, so we’re feeling comfortable that that date will be met.”

Bailey said two issues, one involving the scope of the project not being precisely as it was described in the request for proposal, and the other being staffing issues, led to the delay. The company is transferring its California Medicaid contract to a competitor and the process has taken longer than expected, making staff unavailable for the Nevada transfer, he said.

The HP contract was approved by the Board of Examiners, including Gov. Brian Sandoval, in January, but not without controversy. The second lowest bidder, ACS, raised numerous concerns about the negotiations that resulted in HP winning the contract, including $30 million in additional value that brought the cost of the HP bid close to that of ACS.

Because of the cost involved in filing a formal protest, including a $245,000 non-refundable charge to post a bond, ACS elected not to challenge the award, however.

ACS elected not to comment for this story.

Duarte said the delay in completing the transfer is resulting in some missed savings to the state, but the amount of money lost so far has not yet been quantified. State officials do expect the company to make up those lost savings once the transfer is complete, he said.

“There are other ways of achieving those savings through the contract term and we’re going to leave that open for discussion after the transfer,” Duarte said. “All of our focus right now is making sure that that goes off smoothly so there is no interruption in provider payments and authorization of services for Medicaid recipients.

“But I will be intently working with them after the takeover to make sure that we can achieve those savings that we said we were going to achieve – and that they said they would,” he said.

The Medicaid information system is critically important to Nevada and the U.S. Department of Health and Human Services, which share in the costs of delivering medical services to the approximately 300,000 low-income Nevada recipients, typically families, seniors and the disabled.

Source: U.S. Government.

Nevada health care providers, including doctors and dentists, suffered major financial difficulties in 2003 when the state transitioned to a new Medicaid information system operated by First Health Services Corp. that encountered numerous problems when it first started up.

Bailey said he has been made well aware of the concerns, not only by Duarte and his staff, but by Nevada lawmakers and health care providers as well.

The company has been meeting with state officials and the current contractor on a weekly basis for the past six months to ensure a smooth transition, he said.

Duarte said the HP contract is not for a new system, but what he calls a “lift and drop” where the existing system is transferred to the new contractor.

The transfer process is now in the stages where both systems are being tested in parallel prior to finalizing the transfer, he said. The timely transfer of the system is important because some of the Magellan staff is going to work for HP, and so the company won’t be able to continue to provide the services required indefinitely, Duarte said.

“There is going to be a point in time in which Magellan can’t continue full operations, and so again, that is another driving reason why we want to get this done Dec. 5,” he said.

HP Enterprise Services will serve as the fiscal agent for the state’s Medicaid program when the transfer is complete, managing the state’s Medicaid system, including the processing of payments to medical providers, for the life of the contract.

Duarte said the state does have the ability to seek damages for a failure of the company to deliver on the terms of the contract, but that the decision at this point was not to “lawyer up” but instead to get the work done.

The federal Department of Health and Human Services is also involved in ensuring HP and the state get this work done, he said. When certified, Nevada will get enhanced federal funding, he said.

The Medicaid program is one of the costliest in the state budget, accounting for $1.6 billion this year, with $500 million of that coming from the state general fund. Federal support and other sources make up the rest of the budget.

HP Enterprise Services is the largest provider of Medicaid information system services in the country, operating in 21 of 38 states that have outsourced their programs. It processes about 1 billion provider claims each year.

Bailey said the company is successful because it works to ensure client satisfaction.

“I’ll tell you it’s not enough for us to have the business,” he said. “Beyond that we need to have clients that are happy. Client satisfaction is big on our radar screen.”

-

Audio clips:

Nevada state Medicaid Administrator Charles Duarte says the focus now is completing the transfer on time and without disruption:

101911Duarte1 :22 for Medicaid recipients.”

Duarte says he will be working with HP to ensure projected savings are achieved:

101911Duarte2 :11 said they would.”

Duarte says HP so far has been willing to live up to its commitments:

101911Duarte3 :08 them to that.”

Duarte says the current contractor won’t be able to continue to provide services indefinitely:

101911Duarte4 :11 done Dec. 5.”

HP Executive Stu Bailey says the company is confident it will make the Dec. 5 deadline:

102011Bailey1 :22 will be met.”

Bailey says client satisfaction has been important to the company’s success:

102011Bailey2 :33 doing for them.”

 

State Employee Contracting Controversy Addressed With Administrative Changes

By Sean Whaley | 3:37 pm October 13th, 2011

CARSON CITY – Ten months after a legislative audit first raised serious questions about current and former state employees working as contractors for state agencies, the Board of Examiners earlier this week approved administrative changes to prevent future abuses.

The changes approved Tuesday bring closure to the issue of “double dipping”, but not before it spawned legislation and a serious examination of the state employee contracting process.

The audit, released in December 2010, identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a current state employee earned $62,590 as a contractor in fiscal years 2008 and 2009 while earning a state salary as well.

The audit identified 250 current and former employees providing services to the state. These employees were paid a total of $11.6 million during fiscal years 2008 and 2009, the years covered by the review.

The Board of Examiners is composed of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller.

In addition to the administrative changes, Masto’s office was asked by the Legislative Commission’s Audit Subcommittee to review the information for potential criminal violations.

Jennifer Lopez, a spokeswoman for the Attorney General’s Office, said today the requested review was completed on June 10 but no action was taken against any current or former employees referenced in the audit.

“The case was declined due to insufficient evidence primarily related to the fact, as pointed out in the legislative audit, that no positive controls were in effect to document or record the time state contractors were actually engaged in their state duties,” she said.

The new rules added to the State Administrative Manual implement the changes mandated by Assembly Bill 240, sponsored by Ways and Means Committee Chairwoman Debbie Smith, D-Sparks.

The new rules prohibit a current state employee from being hired under contract by a state agency unless approved by the Board of Examiners. The same approval is required of a former state employee who has not been out of state employment for at least two years.

Such contracts can only be approved if certain circumstances are found to exist, including situations where a short-term or unusual economic circumstance exists for an agency requiring such employment.

Smith said she is pleased with the voted by the board.

“I think we’ll see a lot better accountability and reporting on the use of consultants because of this,” she said. “I’m glad. It may be the type of thing that we need to keep sort of tweaking each session until we have it where we need it to be, but so far, so good.”

“I think we demonstrated it was the right thing to do,” Smith said.

State Sen. Sheila Leslie, D-Reno, who serves as chairwoman of the Audit Subcommittee, said she was pleased that the Sandoval administration took the audit recommendations seriously. They are overdue, she said.

“There were a few instances that either were very sloppy record keeping or might have been more suitable for prosecution, so I hope somebody is following up on those,” Leslie said.

Sen. Sheila Leslie, D-Reno. / Nevada News Bureau file photo.

“If citizens are going to have confidence in government, they need to be assured that everyone is playing by the same rules,” she said. “The audit raised a lot of red flags about whether there were state employees who were getting sweetheart contracts.”

The administrative changes approved Tuesday will go a long way to correcting any such abuses, Leslie said.

The administrative changes come as yet another state employee contracting controversy involving a new member of Sandoval’s cabinet was recently reported in the Las Vegas Sun. The newspaper reported Sept. 29 that Frank Woodbeck, the newly appointed director of the Nevada Department of Employment, Training and Rehabilitation, held down two state jobs last fiscal year, earning almost as much as the governor.

Woodbeck told the newspaper he worked 60- to 70-hour weeks to fulfill the demands of the two jobs.

-

Audio clips:

Assemblywoman Debbie Smith says the law may need tweaking, but she is pleased with the changes:

101311Smith :10 far, so good.”

State Sen. Sheila Leslie says she is pleased the Sandoval administration took the audit recommendations seriously:

101311Leslie1 :20 the same rules.”

Leslie says the audit raised red flags about whether there were state employees getting sweetheart contracts:

101311Leslie2 :26 the Audit Subcommittee.”

Leslie says there were a few instances that may have risen to the level of prosecution:

101311Leslie3 :11 up on those.”

Sandoval Asks For Meetings With Washoe And Clark Counties Over $124 Million In Refund Requests

By Sean Whaley | 2:40 pm September 13th, 2011

CARSON CITY – Gov. Brian Sandoval said today state officials will meet with Clark and Washoe county representatives who are seeking nearly $124 million in refunds from the state – before deciding if litigation is necessary.

Sandoval, attending a meeting of the Board of Examiners, said afterward that Nevadans expect their elected officials to talk over disputes to see if they can be resolved before resorting to the courts.

Gov. Brian Sandoval. / Nevada News Bureau file photo.

“I have always been working with local government and I think this is another opportunity to do that,” he said. “I think the people of Nevada, particularly in Washoe County and Clark County, expect their elected officials to work together toward a common good.”

The board, which also includes Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, agreed that holding meetings on the requests is the best next step to take in the dispute. The board briefly discussed the two demand letters at the meeting.

The meetings will allow for an investigation into the specifics of their claims, Sandoval said. The attorney general’s office, Sandoval’s office and the Department of Administration will have staff attend the meetings.

“I think it is prudent at this point before this matter were to proceed to any type of litigation to begin a dialogue between the state and the respective counties,” Sandoval said. “This is obviously a very complex legal matter that includes an interpretation of a very recent Nevada Supreme Court case.”

Depending on the outcome of the meetings, the Board of Examiners could then make an appropriate decision on the refund requests, he said.

Masto agreed, saying it makes sense to open a dialogue with the counties before moving to any legal action. Ultimately the board will have to decide whether to accept or reject the demands, she said.

The refunds were requested based on the court ruling in May on the Clean Water Coalition case that found the Nevada Legislature improperly took $62 million in 2010 from the local government fund to balance the state budget.

The ruling threw into question several other revenue sources Sandoval had proposed using for his 2011-13 budget, and led to a compromise with Democrats in the Legislature that included the extension of several tax increases that had been set to expire June 30.

But as a result of the Supreme Court ruling, both Clark and Washoe counties have submitted claims to the Board of Examiners requesting refunds of property taxes taken in the 2007 and 2009 legislative sessions to help balance the state budget.

Washoe County is seeking $21.5 million. Clark County is seeking $102.5 million.

-

Audio clips:

Gov. Brian Sandoval says there needs to be a dialogue with the counties on the refund requests:

091311Sandoval1 :20 Supreme Court case.”

Sandoval says Nevadans expect elected officials to work together:

091311Sandoval2 :12 a common good.”

 

Nevada Attorney General Still Analyzing County Refund Requests Totaling $123 Million

By Sean Whaley | 2:23 pm August 16th, 2011

CARSON CITY – Attorney General Catherine Cortez Masto said today it will probably be another month before she can publicly report the results of her staff’s legal conclusions regarding requests for refunds from the state by Clark and Washoe counties totaling $123 million.

Masto said her office is still “moving through the process” to determine if any refunds are owed the two local governments. Once that analysis is completed, Masto said her legal findings will be shared privately with Gov. Brian Sandoval.

Following that discussion, the Board of Examiners, made up of Sandoval, Masto and Secretary of State Ross Miller, will be briefed on the findings at a public meeting. It would be up to this board to approve any refund requests.

“We’re moving through the process and within a month or so the public will have more information,” Masto said.

Attorney General Catherine Cortez Masto. / Nevada News Bureau file photo

Masto made her comments during an interview on the Nevada NewsMakers television program. Her comments closely mirrored those reported Monday by the Las Vegas Sun.

If it is determined the money should be returned, then a special session of the Legislature is one option to implementing a refund, Masto said.

“We’re working through that now and we’re looking at the various options that are out there if we are required to return the money,” she said. “Now, the mechanism for moving through that process we’re still working through. But that’s obviously an option. We’re not there yet. Right now we’re looking at the legal analysis to determine whether we even owe the money to the counties.”

The refunds were requested based on the Nevada Supreme Court ruling in May on the Clean Water Coalition case that found the Nevada Legislature improperly took $62 million in 2010 from the local government fund to balance the state budget.

The ruling threw into question several other revenue sources Sandoval had proposed using for his 2011-13 budget, and led to a compromise with Democrats in the Legislature that included the extension of several tax increases that had been set to expire June 30.

But as a result of the Supreme Court ruling, both Clark and Washoe counties have submitted claims to the Board of Examiners requesting refunds of property taxes taken in the 2007 and 2009 legislative sessions to help balance the state budget.

Washoe County is seeking $21.5 million. Clark County is seeking $102 million.

Audio clips:

Attorney General Catherine Cortez Masto says her office is still analyzing if the state owes the counties any refunds:

081611Masto1 :25 to the counties.”

Masto says the public should soon know more about the potential for a refund:

081611Masto2 :18 secretary of state.”

$27.6 Million Contract Will Bring High Tech Kiosks To Grocery Stores For DMV Transactions

By Sean Whaley | 2:13 pm August 15th, 2011

CARSON CITY – The state Board of Examiners today approved a 10-year, $27.6 million contract to install kiosks in grocery stores statewide where Nevadans will be able to renew car registrations, extend drivers licenses and perform other tasks that might otherwise require a trip to a Department of Motor Vehicles office.

The contract with Intellectual Technology Inc. will be paid for by charging fees to those using the kiosks, $1 for all transactions but car registration renewal, which will run $3, said Bruce Breslow, director of the DMV. The state is currently paying the company $5 for each car registration renewal, but the amount users will pay was reduced in the new contract.

DMV chief Bruce Breslow explains a new kiosk contract to the Board of Examiners today. / Photo: Sean Whaley, Nevada News Bureau.

The purpose of the kiosks is to simplify DMV transactions for the public while at the same time reducing the need for staff to operate the state’s multiple DMV offices,  he said. DMV offices may close at 5 p.m., but a kiosk in a grocery store will be accessible 24 hours a day, Breslow said.

“Let’s say you live out in Summerlin,” he said. “By the time you get in your car, take the freeway, find the DMV office, wait in line at the DMV, get back in your car and negotiate the traffic to get back there, that’s two hours of your life plus a couple of gallons of gas. So certainly a dollar is a better alternative than that.”

The state expects to add 40 kiosks at stores around the state in the first two years of the contract, most in Southern Nevada where the DMV wait times are usually longer than in other locations. More kiosks may be added if there is demand.

The new kiosks are expected to be available beginning next spring. The state has 27 kiosks now, most located in DMV offices, but some services, such as renewing a driver’s license, are not yet available using the existing machines, he said.

The board, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the contract.

Sandoval asked for a presentation on the contract because of the size of the agreement.

“This number is very large, but instead of an expense for the state, this is actually a savings for the state,” Breslow said.

The current kiosk program subsidizes the cost of each transaction from the state highway fund, he said. The Legislature changed this to allow the fee to be charged to the user for the convenience of using the kiosk, Breslow said.

“So we’re hoping to take about 12 percent of the line, of the people that are currently coming to the DMV, and making it a lot more convenient for them not to have to come to our building, and to do it in their neighborhoods,” he said. “But we have a lot of education to do.”

A lot of the stores that will be hosting the kiosks will be getting the message out to the public that the DMV services will be available at their establishments, Breslow said.

Sandoval complimented Breslow for reducing wait times at DMV offices, as well as the feature on the agency’s website that shows the wait times at the different offices.

Breslow said many DMV tasks can be accomplished using the agency’s website, but that usage has topped out at about 33 percent for on-line activity. Some people prefer the kiosks, which can also provide information in Spanish, he said.

Breslow said the new machines won’t take cash, but they will take credit and debit cards and will scan a check as well.

Audio clips:

DMV chief Bruce Breslow says the kiosks will be available 24 hours a day for DMV customers:

081511Breslow1 :18 a Sunday, so.”

Breslow says most transactions will cost the user $1:

081511Breslow2 :17 down to $3.”

Breslow says a $1 fee is cheaper than spending time on the freeway to wait in line at a DMV office:

081511Breslow3 :18 alternative than that.”