NEVADA LEGISLATURE’S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS

(NRS 209.4817)

Friday, September 28, 2012 3:00 p.m.

Grant Sawyer State Office Building 555 East Washington Avenue Las Vegas, Nevada Room 4401

Videoconference to:

Legislative Building Great Basin College Room 3137 High Tech Center 401 South Carson Street Room 137 Carson City, Nevada 1500 College Parkway Elko, Nevada

STATE OF NEVADA LEGISLATIVE COUNSEL BUREAU

LEGISLATIVE COMMISSION (775) 684-6800 INTERIM FINANCE COMMITTEE (775) 684-6821 STEVEN A. HORSFORD, Senator, Chairman DEBBIE SMITH, Assemblywoman, Chair Rick Combs, Director, Secretary Cindy Jones, Fiscal Analyst Mark Krmpotic, Fiscal Analyst CARSON CITY OFFICE: Legislative Building, 401 S. Carson Street Carson City, Nevada 89701-4747 LAS VEGAS OFFICE: Fax No.: (775) 684-6600 555 E. Washington Avenue, Room 4400 RICK COMBS, Director (775) 684-6800 Las Vegas, Nevada 89101-1049 BRENDA J. ERDOES, Legislative Counsel (775) 684-6830 Fax No.: (702) 486-2810 PAUL V. TOWNSEND, Legislative Auditor (775) 684-6815 BRIAN L. DAVIE, Legislative Services Officer (702) 486-2800 DONALD O. WILLIAMS, Research Director (775) 684-6825

MEETING NOTICE AND AGENDA

Name of Organization: NEVADA LEGISLATURE'S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS (NRS 209.4817)

Date and Time of Meeting: Friday, September 28, 2012 – 3:00 p.m.

Place of Meeting: Grant Sawyer State Office Building Room 4401 555 East Washington Avenue Las Vegas, Nevada

Note: Some members of the committee may be attending the meeting and other persons may observe the meeting and provide testimony through a simultaneous videoconference conducted at the following locations:

Legislative Building Great Basin College Room 3137 High Tech Center 401 South Carson Street Room 137 Carson City, Nevada 1500 College Parkway Elko, Nevada

If you cannot attend the meeting, you can listen to it live over the Internet. The address for the legislative Web site is http://www.leg.state.nv.us. For audio broadcasts, click on the link “Listen to Meetings Live on the Internet.”

Note: Please provide the secretary with electronic or written copies of testimony and visual presentations if you wish to have complete versions included as exhibits with the minutes.

A G E N D A Note: Items on this agenda may be taken in a different order than listed. Two or more agenda items may be combined for consideration. An item may be removed from this agenda or discussion relating to an item on this agenda may be delayed at any time.

I. ROLL CALL.

II. PUBLIC COMMENT. (Because of time considerations, the period for public comment by each speaker may be limited, and speakers are urged to avoid repetition of comments made by previous speakers.)

1 For III. APPROVAL OF MINUTES OF THE JUNE 25, 2012, MEETING OF THE Possible Action NEVADA LEGISLATURE'S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS.

For IV. REVIEW OF NEVADA DEPARTMENT OF CORRECTIONS RESPONSES Possible Action TO QUESTIONS FROM THE JUNE 25, 2012, MEETING RELATING TO: A. Silver State Industries accounts receivable aging report. B. The cost of an appraisal performed on Nevada State Prison. C. The liquidation of abandoned vehicles at the Auto/Upholstery Shop. D. The possibility of inmates cultivating hay on state property outside the confines of prison.

For V. STATUS REPORT FROM PRISON INDUSTRIES AND COMMITTEE Possible Action RECOMMENDATIONS REGARDING THE FOLLOWING ITEMS: A. Alpine Steel B. Diamond Mountain Distributors C. Auto/Upholstery Shop D. Big House Choppers

For VI. REVIEW THE NUMBER OF INMATES THAT WORKED JULY 2010 Possible Action THROUGH JULY 2012.

For VII. REVIEW THE DEDUCTIONS FROM INMATE WAGES FOR ROOM AND Possible Action BOARD, THE PRISON INDUSTRY CAPITAL IMPROVEMENT FUND, AND THE VICTIMS OF CRIME FUND – FY 2011, FY 2012 AND FY 2013 YEAR-TO-DATE.

For VIII. DISCUSSION OF OTHER POTENTIAL PRISON INDUSTRY PROGRAMS Possible Action AND COMMITTEE RECOMMENDATIONS (NRS 209.4818).

IX. PUBLIC COMMENT. (Because of time considerations, the period for public comment by each speaker may be limited, and speakers are urged to avoid repetition of comments made by previous speakers.)

X. ADJOURNMENT.

Note: We are pleased to make reasonable accommodations for members of the public who are disabled and wish to attend the meeting. If special arrangements for the meeting are necessary, please notify the Fiscal Division of the Legislative Counsel Bureau, in writing, at the Legislative Building, 401 South Carson Street, Carson City, Nevada 89701-4747, or call Cheryl Harvey, Management Assistant at (775) 684-6872 as soon as possible.

Notice of this meeting was posted in the following Carson City, Nevada, locations: Blasdel Building, 209 East Musser Street; Capitol Press Corps, Basement, Capitol Building; City Hall, 201 North Carson Street; Legislative Building, 401 South Carson Street; and Nevada State Library, 100 Stewart Street. Notice of this meeting was faxed for posting to the following Las Vegas, Nevada, locations: Clark County Office, 500 South Grand Central Parkway; and Grant Sawyer State Office Building, 555 East Washington Avenue. Notice of this meeting was posted on the Internet through the Nevada Legislature’s Web site at www.leg.state.nv.us.

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III

MINUTES OF THE JUNE 25, 2012, MEETING OF THE NEVADA LEGISLATURE'S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS

MINUTES OF THE NEVADA LEGISLATURE’S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS (NRS 209.4817) June 25, 2012

SUMMARY OF MINUTES

The fourth meeting of the 2011–12 Interim for the Nevada Legislature’s Interim Finance Committee’s Committee on Industrial Programs was held at 1:00 p.m. on Monday, June 25, 2012, in Room 4412 of the Grant Sawyer State Office Building in Las Vegas, Nevada. The meeting was simultaneously videoconferenced to Room 3137 of the Legislative Building in Carson City, and in Room 137 of the Great Basin College, High Tech Center, Elko, Nevada.

COMMITTEE MEMBERS PRESENT IN LAS VEGAS: Assemblyman James Ohrenschall, Chairman Allen J. Puliz, Puliz Moving and Storage Bruce Aguilera, Vice President/General Counsel, Bellagio Michael Mackenzie, Principal, Operations Improvement Company Debra Miller, Alternate for Mike Magnani Greg Cox, Director, Nevada Department of Corrections Greg Smith, Administrator, Purchasing Division

COMMITTEE MEMBERS PRESENT IN CARSON CITY: Assemblyman John Ellison

COMMITTEE MEMBERS PRESENT IN ELKO: Senator Dean Rhoads

COMMITTEE MEMBERS ABSENT: Senator David R. Parks, Vice Chairman Mike Magnani, Labor Union Representative

STAFF MEMBERS PRESENT IN LAS VEGAS: Sarah Coffman, Program Analyst, Fiscal Analysis Division

STAFF MEMBERS PRESENT IN CARSON CITY: Nicolas C. Anthony, Senior Principal Deputy Legislative Counsel, Legal Division Rick Combs, Assembly Fiscal Analyst, Fiscal Analysis Division Cheryl Harvey, Committee Secretary, Fiscal Analysis Division

OTHERS PRESENT IN LAS VEGAS: Brian Connett, Deputy Director, Industrial Programs, Nevada Department of Corrections Diane Dastal, Administrative Services Officer II, Nevada Department of Corrections

3 EXHIBITS: Exhibit A – Agenda and Meeting Packet Exhibit B – Picture of horse trailer from the US Marine Corps

I. CALL TO ORDER.

Chairman Ohrenschall called the meeting of the Nevada Legislature’s Interim Finance Committee’s Committee on Industrial Programs to order at 1:14 p.m. The secretary called roll. Chairman Ohrenschall excused Senator Parks from attending the meeting. Ms. Miller attended the meeting as an alternate for Mr. Magnani. All other members were present.

II. PUBLIC COMMENT.

There was no public comment.

III. APPROVAL OF MINUTES OF THE MEETING OF THE NEVADA LEGISLATURE'S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS FOR MARCH 23, 2012.

Chairman Ohrenschall requested a motion for approval of the minutes from the March 23, 2012, meeting.

ASSEMBLYMAN ELLISON MOVED TO APPROVE THE MINUTES OF THE MARCH 23, 2012, MEETING OF THE NEVADA LEGISLATURE’S INTERIM FINANCE COMMITTEE’S COMMITTEE ON INDUSTRIAL PROGRAMS.

MR. PULIZ SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

IV. REVIEW OF NEVADA DEPARTMENT OF CORRECTIONS RESPONSES TO QUESTIONS FROM THE MARCH 23, 2012, MEETING.

Brian Connett, Deputy Director of Industrial Programs, Nevada Department of Corrections, introduced himself and reviewed the following items on the agenda:

A. Nevada Horse Power – Mr. Connett directed the Committee to page 19 of the meeting packet (Exhibit A). Nevada Horse Power was contacted regarding the possibility of contributing funds to the department’s wild horse program; however, the organization’s funds had been allocated until October 2012.

Mr. Aguilera asked if Prison Industries could get funds from Nevada Horse Power for the wild horse program in FY 2013. Mr. Connett informed the Committee he approached the organization about contributing in FY 2013, but the organization was unsure of its funding availability.

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Kimberly Tarter, Deputy Administrator, Purchasing Division, provided information to the Committee regarding the Purchasing Division’s efforts to assist Prison Industries to bring down its cost of hay. The Purchasing Division met with Tim Bryant, Prison Industries, Supervisor II, at the ranch to discuss revisions in the bidding process used to purchase hay. Ms. Tarter stated they reviewed the previous bidding document and made some suggestions that could assist the department in leveraging the amount it spent on hay.

Ms. Tarter testified that Prison Industry’s bidding process was restrictive to eligible hay suppliers who met specific requirements associated with total digestive nutrition. The Bureau of Land Management agreed to eliminate these nutrition requirements. By changing the bid requirements to allow any type of hay, the Purchasing Division would be able to tabulate the bids based on the hay’s digestive nutrition and cost per ton. Ms. Tarter said the Prison Ranch would be able to buy alfalfa hay from one supplier and mixed hay from another supplier based on the lowest cost per ton. If a supplier with the lowest bid only had one hundred tons available, the ranch could purchase the remaining hay from the next lowest bidder until the total tonnage necessary was met. Ms. Tater explained the ranch used 12 tons of hay per day.

Ms. Tarter pointed out that the bids should identify delivery costs separately from the actual hay costs. Hay delivery costs between $10-$20 per ton. The Purchasing Division could make some inquires and determine if separate arrangements could be made with an independent contractor to deliver the hay at a lower cost.

The Purchasing Division was also considering simplifying the bid document in order to make the bidding process easier for venders.

Ms. Tarter stated, by statute, the Purchasing Division had direct purchasing authority for $5,000; however, there was no monetary threshold for commodity purchases of perishable foods. The Department of Corrections commonly used this exception to purchase bulk food for its inmates. This exception could also be applied to purchasing hay, since it was a commodity, as a result, the ranch could take advantage of limited time offers of lower-priced hay. The noted suggestions would assist the Prison Industries program in keeping its hay volume up and its costs as low as possible.

Chairman Ohrenschall asked if the revisions to the bidding process would free up more financial support for the expansion of the horse program in the future. Mr. Connett said they looked into expanding the horse capacity at the ranch, but additional permits would need to be obtained. Mr. Connett thanked Greg Smith, Director, State Purchasing, and Ms. Tarter for all of their efforts.

In reference to the expansion of the horse program, Mr. Connett said Prison Industries obtained used guardrails and posts from the Department of

3 5 Transportation to create new holding pens for the horses. These pens were needed in order to allow the BLM to separate certain horse populations used as test subjects in studies conducted on the wild horses.

Senator Rhoads stated Prison Industries was looking in the right direction to resolve the fluctuation of its hay prices. The new bidding process should save the state money.

Assemblyman Ellison agreed with Senator Rhoads. He stated hay prices this year would be high because of the drought. He said some areas had been hit hard with drought, and it was going to get worse.

Mr. Connett informed the Committee that Prison Industries had been awarded a contract with BLM, for the continuation of the horse program, contingent upon the approval of the Board of Examiner’s at its next meeting. He hoped this would become a model for BLM in other states across the country. Prison Industries had developed a variable pricing structure based on the number of horses housed at the facility and the price of hay. As the price of hay and the quantity of horses increases, the fee per horse per day increases. Under its current contract with the BLM, Prison Industries received $3.20 per horse per day. Based on the quantity of horses and the current price of hay, the new contract would allow $3.90 per horse per day.

Senator Rhoads asked if the program was making money at the rate of $3.90 per horse. Mr. Connett answered they anticipated this program would become profitable based on the variable pricing structure. The pricing structure in the past had remained fixed despite the volatility of hay prices.

Senator Rhoads asked if the horse program was profitable in the past. Mr. Connett responded the profit was based on the hay price at a particular point in time. The price of hay had increased from $172 per ton to $314 per ton. The price has been extremely volatile in the past, and Prison Industries was limited to charging the BLM a fixed fee per horse.

Mr. Aguilera directed the Committee’s attention to page 51 of the meeting packet (Exhibit A) and pointed out, in the prison ranch financial statements the cost of materials had almost tripled compared to the previous year. Mr. Connett said a good portion of the material cost was due to the price of hay. He said the hay prices were out of the prison ranch’s control. With the new contract, the prison ranch would be able to increase its fees charged to the BLM provided the cost of hay increased.

B. Negotiations with the three organizations interested in moving their operations to Prison Industries – Mr. Connett directed the Committee to page 19 (Exhibit A), and reviewed the status of the three interested organizations.

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Chairman Ohrenschall asked if it was possible to get a concrete commitment from any of the companies regarding the prison industry facilities. Mr. Connett explained that bringing a company inside the prison to manufacture goods was a lengthy process that could take more than two to four years.

C. Alpine Steel’s bid to fabricate the proposed Ferris wheel in Las Vegas – Mr. Connett introduced Randy Bulloch, president of Alpine Steel, to testify on behalf of the Ferris wheel’s progress. At the end of March 2012, Alpine Steel had submitted a bid on the Skyvue Ferris Wheel project. Alpine Steel had been awarded the fabrication of the Ferris wheel, as well as retail space that would be simultaneously constructed underneath the wheel. Mr. Bulloch explained that changes in the wheel’s design had delayed the commencement of the project. The material was staged at High Desert State Prison (HDSP) and at Alpine Steel’s other facility in Las Vegas. Fabrication would start as soon as the design changes were approved. Mr. Bulloch expected the general contractor to provide Alpine Steel with an initial down payment for the project within the next week.

Chairman Ohrenschall congratulated Mr. Bulloch for the award of the Ferris wheel project. He said it was encouraging news.

Mr. Bulloch confirmed Mr. Aguilera’s question that this was one of two Ferris wheels being built in Las Vegas. He explained that this Ferris wheel project was being constructed east of Mandalay Bay on Las Vegas Boulevard.

Chairman Ohrenschall asked Mr. Bulloch how large the retail space would be underneath the Ferris wheel. Mr. Bulloch answered that approximately 200,000 square feet of retail space would be constructed with the potential for further expansion.

Chairman Ohrenschall asked how many inmates from Prison Industries and from Alpine Steel’s other shop would be employed. Mr. Bulloch had met with Warden Neven to discuss the employment of inmates. He anticipated 35 inmates would be employed at HDSP, and 25-30 employees would be employed at his shop outside of HDSP, including some inmates from Casa Grande Transitional Center.

Chairman Ohrenschall asked how many shifts would be operated at HDSP. Mr. Bulloch said they would operate one shift, but he anticipated the shift would be eleven hours per day, six days per week.

Chairman Ohrenschall asked Alpine Steel when the project was anticipated to be complete. Mr. Bulloch said the Ferris wheel should be completed by January 2013, while the retail stores underneath the Ferris wheel should be completed by the spring of 2013. Alpine Steel anticipates the Ferris wheel and retail stores would be open to the public by January 2014.

5 7 Chairman Ohrenschall asked Mr. Bulloch if Alpine Steel had any other projects scheduled that would employ additional inmates from Prison Industries. Mr. Bulloch responded Alpine Steel would be performing the fabrication of a hospital and a number of other smaller projects. Alpine Steel has been bidding on more fabrication projects than it has in the last three years.

Chairman Ohrenschall asked if the fabrication of the competing Ferris wheel was being performed out-of-state. Mr. Bulloch said he did not have exact knowledge, but he had been told the steel for that Ferris wheel was being fabricated in China. Chairman Ohrenschall asked if Alpine Steel had the opportunity to bid on that Ferris wheel. Mr. Bulloch replied they were not given the opportunity to bid on that specific project.

Chairman Ohrenschall asked when Alpine Steel would be able to bring its account current with Prison Industries. Mr. Bulloch believed the majority of Alpine Steel’s account would be current within 60 days of starting the Ferris wheel project.

Chairman Ohrenschall thanked Mr. Bulloch for testifying, and wished him luck on the projects. Mr. Connett testified that Prison Industries was extremely excited and encouraged about the world class Ferris wheel project.

Mr. Bulloch thanked the Committee for its time and patience. He pointed out the North Fifth Street bridge in Las Vegas was welded by inmates and passed its inspection. The skilled inmates were ready to start on the Ferris wheel project. Mr. Bulloch was grateful for the skill level the inmates had been able to acquire on the bridge project.

Chairman Ohrenschall asked who the erecting company would be for the Ferris wheel project. Mr. Bulloch said the name of the Las Vegas company was Union Erectors.

Chairman Ohrenschall asked how many ex-inmates were employed by Alpine Steel. Mr. Bulloch estimated about 12 employees at Alpine Steel were ex-inmates. Their salaries varied from approximately $30,000 to $60,000 a year, depending on the job they were performing.

Mr. Connett wanted to point out that inmate workers employed by Alpine Steel learned a skill that was employable. The inmates received a welding certification which helped them gain employment upon their release.

Chairman Ohrenschall asked Mr. Connett if there were any statistics regarding the recidivism rates of the inmates working in the steel fabrication program. Mr. Connett said he did not separately track the inmate workers participating in the steel fabrication program.

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D. Silver State Industries’ depreciation schedule – Diane Dastal, Administrative Services Officer II, Nevada Department of Corrections, summarized the depreciation schedule on pages 21-22 (Exhibit A).

E. Additional information regarding the Mock Prison Riot organization. – Mr. Connett summarized the follow-up question regarding the Mock Prison Riot [page 25 (Exhibit A)]. Mr. Cox said the organization trained in West Virginia and would like to expand to the west coast, but the federal funding for training had been cut. Commissioner Rubenstein, West Virginia, Department of Corrections, stated he would work with Nevada to develop a similar program. Mr. Cox anticipated he would be talking with Commissioner Rubenstein in September 2012 regarding the implementation of a training program in Nevada.

Mr. Aguilera asked if there was any facilities west of the Mississippi that offered this type of training for correctional officers. Mr. Cox said there was no such facility. Mock Prison Riot was interested in the Nevada State Prison due to its location on the west coast and its proximity to the Reno/Tahoe airport.

Chairman Ohrenschall asked for clarification that the Mock Prison Riot organization was a private company and did not operate under the West Virginia government. Mr. Cox understood the organization was receiving a significant amount of funding from the State of West Virginia. Commissioner Rubenstein indicated that the county in West Virginia where the training was being conducted generated between $1.2 to $1.3 million in revenue from the training.

Mr. Aguilera asked if there was any reason why the State of Nevada could not emulate the training provided in West Virginia. Mr. Cox said the state did not have any funds to support the training. Part of the discussion in September 2012 with Commission Rubenstein would include how to approach the funding aspect of the training and how much funding would be required initially.

Chairman Ohrenschall asked if there was another company, or entrepreneur, that might be interested in starting a training facility at Nevada State Prison (NSP). Mr. Cox said he planned to attend several annual trade shows and make his peers aware of NSP’s availability as a training facility.

Mr. Aguilera mentioned that maybe written commitments could be obtained from entities interested in participating in correctional officer training in the west coast, such as from California or Asia. The commitment letters could then be used as justification to obtain a loan from the State Treasurer.

Chairman Ohrenschall agreed with Mr. Aguilera. Mr. Cox also agreed, saying he appreciated all of the Committee’s suggestions.

7 9 Mr. Puliz suggested that the convention authority should be contacted about the training facility, since it used a portion of its funding on projects that bring organizations into the community.

F. An appraisal or property valuation for Nevada State Prison – Mr. Connett reviewed the department’s response on page 25 (Exhibit A).

Chairman Ohrenschall asked if the NDOC could obtain information prior to the Committee’s next meeting on how much it would cost to have an appraisal of Nevada State Prison conducted. Mr. Connett said he would work with Director Cox to find out how much an appraisal for the facility would cost.

V. DISCUSSION OF OTHER POTENTIAL PRISON INDUSTRY PROGRAMS AND COMMITTEE RECOMMENDATIONS (NRS 209.4818).

Mr. Connett said he had several discussions with an organization interested in establishing a trash recycling operation with Prison Industries. The organization toured the Prison Industry facilities and expressed an interest in using inmate labor to process recycled products. Mr. Connett requested approval from the Committee to move forward in negotiating with the trash recycling company.

Chairman Ohrenschall asked if they were looking at a specific location. Mr. Connett said the organization was interested in the facilities located at HDSP in southern Nevada and Northern Nevada Correctional Center in northern Nevada. The organization was also considering building a new facility outside the confines of the state prison system and transporting inmates to that facility.

Chairman Ohrenschall asked how many inmates this operation might employ. Mr. Connett stated there was talk of approximately 60 inmates.

SENATOR RHOADS MOTIONED TO EXPRESS THE COMMITTEE’S SUPPORT FOR MR. CONNETT’S CONTINUED NEGOTIATIONS WITH THE TRASH RECYCLING OPERATION IN THE HOPES THAT IT WOULD PROVIDE MORE INDUSTRIES WITHIN THE PRISONS.

MR. AGUILERA SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

VI. REVIEW THE NUMBER OF INMATES THAT WORKED JULY 2009 THROUGH APRIL 2012.

Ms. Dastal summarized the report of the number of inmates that worked July 2009 through April 2012 on page 29 of the meeting packet (Exhibit A).

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Chairman Ohrenschall was dismayed by the number of prison inmates employed. Mr. Connett said Prison Industries was working with the Department of Corrections, its largest customer, to produce more products and put more inmates to work. As discussed in past meetings, the economy has forced the state to reduce spending on products manufactured by Prison Industries.

Mr. Puliz commented that prior to the recession the number of inmates employed with Prison Industries in Nevada was above the national average of inmates employed. He thought Prison Industries within Nevada had declined to what was the national average. Mr. Connett added that Prison Industries were closing nation-wide, where in the past they were experiencing growth. Mr. Connett said the federal government had closed at least five prison industry factories. He indicated that only a few states had a surplus largely because of natural resource production.

VII. REVIEW THE DEDUCTIONS FROM INMATE WAGES FOR ROOM AND BOARD, THE PRISON INDUSTRY CAPITAL IMPROVEMENT FUND, AND THE VICTIMS OF CRIME FUND – FY 2010, FY 2011 AND FY 2012 YEAR-TO-DATE.

Ms. Dastal reviewed the Capital Improvement Fund and the Victims of Crime Fund on page 33 of the meeting packet (Exhibit A).

VIII. STATUS OF FUND FOR NEW CONSTRUCTION OF FACILITIES FOR PRISON INDUSTRIES – NRS 209.192.

Ms. Dastal identified the fund for new construction on page 36 (Exhibit A).

Mr. Aguilera asked if the Legislature would sweep the funds again in the 2013-15 biennium. At this time, Mr. Connett did not know if the Legislature would sweep the funds. Mr. Connett hoped the fund would not be swept again since Prison Industries was negatively impacted when the Legislature swept $948,000 from its Fund for New Construction.

Mr. Aguilera asked if the funds could be used by the Mock Prison Riot organization for upgrades to Nevada State Prison. Mr. Connett responded that there were some specific uses in statute for that particular funding source. The availability of the funds would depend on how the program was structured. If inmates performed work for the Mock Prison Riot organization, as a Prison Industry program, the funds could be used. If no inmates were employed, the Funds could not be used.

Chairman Ohrenschall noted that the Fiscal staff stated there had been no expenditures incurred from the Fund since FY 2006. He asked if there were any plans to expend the funds to initiate programs or expand existing programs. Mr. Connett said the funds could be used as an incentive for new companies to use in order to reduce their initial cash outlay. At this time, Mr. Connett said there were no plans to expend the funds.

9 11 Nicolas C. Anthony, Senior Principal Deputy Legislative Counsel, Legal Division, responded to a question asked by Assemblyman Ellison at the Committee’s last meeting regarding the use of these funds pursuant to NRS 209.192. Assemblyman Ellison asked if the funds could be used to relocate the license plate factory, currently housed at NSP. Mr. Anthony indicated that the funds could not be used if no additional inmates were employed as a result of the relocation. However, if the relocation resulted in the expansion of the program, and additional workers were hired, the funds could potentially be used for the relocation.

Senator Rhoads asked if the money that Prison Industries made through the wild horse program went to the General Fund. Mr. Connett said the profits that were made from the contract agreement with the BLM stayed within the Prison Industries budget account.

IX. REVIEW THE FINANCIAL STATEMENTS OF SILVER STATE INDUSTRIES FOR THE NINE MONTHS ENDING MARCH 31, 2012.

Ms. Dastal reviewed the financial statements starting on page 37 of the meeting packet (Exhibit A).

Chairman Ohrenschall asked if Silver State Industries experienced difficulties with operating its programs given its reduced amount of cash and how does it plan to increase its unrestricted cash. Mr. Connett said Prison Industries had not experienced difficulties operating the current industries due to its level of cash. He further indicated that cash had increased in the previous weeks. Mr. Connett said they had submitted a bill draft request that would allow Prison Industries to transfer funds from the CIP fund to cover operating expenses in the event unrestricted cash was not available to cover operating expenditures for the Prison Industry programs.

Mr. Mackenzie said that the accounts receivable on the balance sheet went up significantly from $688,130 to $1,026,489. He asked if the difference was primarily due to receivables owed by Alpine Steel. Mr. Connett said Alpine Steel was Prison Industries’ largest accounts receivable. Mr. Mackenzie asked how much of the $1,026,489 was owed by Alpine Steel. Mr. Connett said Alpine Steel owed approximately $400,000. Mr. Mackenzie asked if Prison Industries was concerned with its ability to collect money owed from its other accounts receivable. Mr. Connett said at this time he did not have any concerns.

Mr. Mackenzie directed the Committee to page 39 and asked why inventory increased from $968,000 to over $1 million. Mr. Connett explained that inventory increased because Prison Industries just purchased raw materials for a job it was beginning prior to the close of the quarter.

Mr. Aguilera stated the harvested crops were up from $48,495 to $319,099. Ms. Dastal said crops were seasonal, and the Prison Ranch had produced a significant amount crops over the growing season.

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Chairman Ohrenschall asked if Prison Industries was having difficulties collecting its receivables and asked if an aging report could be provided to the Committee. Mr. Connett indicated that he would provide the Committee with an aging report. Mr. Connett further reiterated that Mr. Bulloch believed that Alpine Steel’s account would be current by the end of summer. Chairman Ohrenschall asked who was Prison Industries’ the next largest receivable. Mr. Connett said most of its receivables were with the NDOC.

Mr. Mackenzie pointed out the mattress shop had significant lower sales, but its material costs improved. Mr. Mackenzie complimented the manager of the mattress shop for improving gross margin. In addition, Mr. Mackenzie stated he thought the freight charges should be included in the cost of material, not as a separate line item. Mr. Connett stated James Padgett was the industry manager at the mattress shop. Mr. Connett thanked Mr. Mackenzie’s for his input regarding freight charges. Mr. Connett indicated that some of its customers do require freight charges to be applied separately.

Mr. Mackenzie commented that the print shop was doing a great job. The print shop improved its gross margin from 29 percent to 37 percent. The only problem Mr. Mackenzie pointed out was the print shop was not covering its freight costs. Mr. Mackenzie stated the program was being managed well. Mr. Connett said Mary Byington, the manager at the print shop, was able to improve operations after relocating and expanding the print shop from NSP to NNCC. The new facility gave her the opportunity to facilitate more businesses.

Mr. Aguilera asked if the print shop’s building and grounds expenditures increased by $13,400 because of the facility’s relocation to NNCC. Ms. Dastal indicated that the charges were increased as a result of the relocation.

Mr. Mackenzie stated the furniture and metal shop on page 47 (Exhibit A) was sufficiently covering its freight costs. The furniture and metal shop also improved its gross margin from 21 percent to 24 percent despite its labor costs increasing by 1 percent.

Mr. Mackenzie pointed out the metal shop had a large increase in sales, but direct labor increased from 11 percent of sales to 19 percent of sales. He noted the material costs also increased from 49 percent of sales to 61 percent of sales despite a decrease in overhead costs. Mr. Connett said Prison Industries had an increase in sales, which contributed to the increase in raw material expenditures for the metal shop. The jobs that were being performed by the metal shop were classified under federal law as Prison Industry Enhancements; as a result, inmates must be paid minimum wage. Normally the wage provided to inmates at the metal shop was less than minimum wage. In order to increase sales, the manager of the metal shop has successfully solicited jobs with local steel fabricating companies.

11 13 Mr. Aguilera asked if the auto shop took in liens when they started work on a vehicle. Mr. Connett said no liens were taken, but a 50 percent deposit was required prior to the commencement of each job.

Mr. Mackenzie noted the labor costs at the auto shop had almost doubled, material costs were up, and overhead costs increased from 13 percent of sales to 71 percent of sales. Ms. Dastal explained the overhead expenses included $16,000 in supplies, $1,000 in equipment repair, $800 for fuel and $54,000 for indirect inmate labor. Mr. Mackenzie pointed out that the warranty expense was still 28 percent of sales. Mr. Connett responded the manager of the auto shop had significantly limited the warranty work.

In response to Assemblyman Ellison’s question regarding the warranty work being performed at the auto/upholstery shop, Mr. Connett indicated that the timeframe in which work performed by the auto/upholstery shop would be warrantied was adjusted to reflect industry standards.

Mr. Mackenzie commented the garment factory’s gross margins were good, but the program was still not covering its freight expenses.

Mr. Mackenzie stated the drapery shop’s performance was moving in the right direction.

Chairman Ohrenschall asked what the drapery shop was doing to increase its performance and wanted to know if those measures could be applied to the auto/upholstery shop in order to improve its performance.

Mr. Connett stated the drapery shop’s improved performance reflects the efforts of the shop’s new manager who has taken it upon himself to bring in new business to the program and seek additional business from the program’s existing customers. Mr. Connett indicated that some of the vehicles being worked on at the auto/upholstery shop were left at the facility for years without payment on the work performed by the inmates. Chairman Ohrenschall asked if a lien could be included as part of the auto/upholstery shop’s customer contract. Mr. Connett said he had contacted the NDOC’s Deputy Attorney General (DAG), and the DAG had concerns with the repercussions of selling a vehicle that may be worth a significant amount more than what Prison Industries received from the sell. If the owner, or an heir, returned for the vehicle in the future, the state could be liable for the value of the vehicle. Prison Industry’s would continue to try to contact the owners of the vehicles.

Mr. Mackenzie said when cars were left by customers at his business, he used a process in accordance with Nevada state law to obtain the title of the car. He indicated that the process took about two months. Once he gained ownership of the title, he could sell or auction the car. Mr. Aguilera asked if some of the cars at the auto shop were considered classics. He suggested that Prison Industries attempt to

12 14

sell these vehicles on E-bay. He also suggested that Prison Industries include a clause in future customer contracts that indicates Prison Industries has the right to sell any abandoned vehicles.

Chairman Ohrenschall asked Mr. Mackenzie what kind of expense he incurred in the process of obtaining the title of abandoned vehicles. Mr. Mackenzie said he submitted paperwork, which had little to no costs. Mr. Mackenzie asked if most of the cars at the auto shop were considered classic cars. Mr. Connett said some of the vehicles were classics. Mr. Mackenzie offered to help Prison Industries fix some of the non-classic cars and sell them for Prison Industries.

ASSEMBLYMAN ELLISON MOTIONED TO REEXAMINE THE PERFORMANCE OF THE DRAPERY SHOP IN SIX MONTHS TO DETERMINE IF THE SHOP SHOULD CONTINUE ITS OPERATIONS.

MR. MACKENZIE SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

Chairman Ohrenschall asked Ms. Dastal if the ranch facility produced enough hay to be self-sustaining. Ms. Dastal responded the ranch had to purchase additional hay from outside vendors to accommodate all of the horses.

Mr. Connett informed the Committee of some positive news for the Prison Industries wild horse program. He showed a picture (Exhibit B) of horses adopted by the US Marine Corp. The horses were trained by the Prison Industry horse program. Prison Industries also trained horses for the US Border Patrol. Prison Industries had trained about 760 horses since 2000, 23 of which were adopted by the border patrol, 4 were adopted by the army, 7 were adopted by the marine corp color guard, 2 were adopted by Las Vegas Metro Police Department, 7 were adopted by the US Marine corp winter warfare unit, 25 were adopted by the all women drill team in Southern California, and 1 was adopted by the BLM law enforcement agency. Mr. Connett informed the Committee of the next adoption event on August 17, 2012, at NNCC. He invited the Committee members to attend.

Mr. Connett also explained the ranch was building more corrals to house an additional 300 horses. The dairy division found a use for the cream it produces. In the past, the dairy threw its cream away, however it has developed a relationship with a company in Carson City that makes ice cream. The company provided the prison dairy with all of the raw materials needed to produce the ice cream with exception of the cream. Prison Industries mixed the cream with the remaining ingredients to produce the ice cream. Mr. Connett pointed out that ice cream was seasonal, and revenues from this program would fluctuate.

Mr. Connett said Prison Industries was raising its price charged to the NDOC per gallon of milk by $0.30.

13 15

Mr. Mackenzie asked if Prison Industry grew hay at the ranch. Mr. Connett said they had a large land mass where hay was produced. Mr. Mackenzie asked why the ranch did not produce more hay to sustain its wild horse program. Mr. Connett said they did crop rotation, so hay could not be produced on the same plot every year. Mr. Mackenzie asked if there might be other state land available to grow hay. Mr. Connett said he would discuss that option with the ranch managers. He was concerned there might be an issue with transporting inmates to a location outside of the prison.

Chairman Ohrenschall asked if the general fund received the extra $.30 per gallon for the milk that was being sold. Mr. Connett said the monies would stay within the Prison Industry ranch operations. He said the increase would start on July 1, 2012. Mr. Connett said NDOC agreed to the price increase and they would include the increase in its budget submittal for the 2013-15 biennium.

Mr. Puliz noticed on the ranch financial statements that material expenditures increased for the crops. Ms. Dastal said the report reflected the price of hay increasing from $142 per ton in FY 2011 to $270 per ton in FY 2012.

X. DISCUSSION OF FUTURE MEETING DATES AND TIMES.

Chairman Ohrenschall reminded the Committee that it was required to meet every quarter. He asked the committee members if there were any dates when they were unavailable. Mr. Aguilera said if the Committee conducted a tour of the prison industry facilities prior to the meeting, perhaps a Friday would be good. Ms. Coffman said there were no particular dates that would work better for staff. She pointed out that between September and December Fiscal staff would be preparing for the 2013 session. It would be helpful to get the next two meeting dates set in advance. Chairman Ohrenschall tentatively scheduled the next meeting date for Friday, September 28, 2012. He also tentatively scheduled a Committee meeting for Friday, November 2, 2012.

XI. PUBLIC COMMENT. There was no public comment.

XIII. ADJOURNMENT. Chairman Ohrenschall adjourned the meeting at 3:19 pm.

Respectfully submitted,

______Cheryl Harvey, Committee Secretary APPROVED: ______Assemblyman James Ohrenschall

Date:______

14 16

IV

REVIEW OF NEVADA DEPARTMENT OF CORRECTIONS RESPONSES TO QUESTIONS FROM THE JUNE 25, 2012, MEETING RELATING TO: A. Silver State Industries accounts receivable aging report. B. The cost of an appraisal performed on Nevada State Prison. C. The liquidation of abandoned vehicles at the Auto/Upholstery Shop. D. The possibility of inmates cultivating hay on state property outside the confines of prison.

Board of State Prison Commissioners BRIAN SANDOVAL Governor BRIAN SANDOVAL Governor JAMES G. COX CATHERINE CORTEZ MASTO Director Attorney General ROSS MILLER Silver State Industries Secretary of State 3955 W Russell Rd Las Vegas. NV 89118 (702) 486-9991 phone (702) 486-9908 fax

1. Please provide a copy of Silver State Industries’ most recent accounts receivable aging report.

Reply: Attached please find Silver State Industries’ accounts receivable aging report.

2. According to the Nevada Department of Corrections, Nevada State Prison has never been appraised, since it has been owned by the state for over 150 years and is exempt from property tax assessments. Please indicate how much it would cost for an independent contractor to conduct an appraisal of Nevada State Prison.

Reply: After speaking with state lands, it was estimated to be in the $20,000 range for an appraisal of NSP.

3. During the meeting, it was indicated that Silver State Industries was experiencing difficulties locating the owners of certain vehicles that have been left at the Auto/Upholstery Shop to be repaired. Several Committee members provided Silver State Industries with suggestions on how to liquidize these vehicles. The Department indicated that it would discuss the Committee’s suggestions with its Deputy Attorney General. Please indicate what steps, if any, Silver State Industries has taken to liquidize these vehicles since the Committee’s previous meeting.

Reply: The following is a list of abandoned vehicles at the SDCC auto shop:

Year Make 1972 Ford Pickup Early 1940's Packard 1993 Infiniti 1960 Lincoln 1967 Buick Lasabre Kaiser 1953 Manhattan 1963 Buick Rivera Unknown Grand Am 1959 Chevy Pickup

17 We have provided this list to our DAG and are awaiting her direction. Hopefully we will have an answer prior to September’s board meeting.

4. The NDOC indicated that it grew a portion of its hay used for the wild horse program; however, sufficient land was not available on prison property to grow enough hay to support all of the wild horses. A suggestion was made by one of the Committee members to use inmate labor and unoccupied state land outside of prison property to grow and cultivate more of its own hay in order to reduce hay costs. The NDOC indicated that transporting inmates to a location outside the confines of prison might pose security issues; however, it was an option the NDOC was willing to explore. What steps have been made to determine if cultivating hay on land located outside of prison property is a viable option for Prison Industries?

Reply: Through discussions with Tim Bryant, Prison Industries’ Ranch supervisor, locating land within close proximately to the appropriate institution with inmate labor has been difficult due to the property not having access to irrigation or expensive agriculture water rights. Further investigation is ongoing.

18 9/9/12 Silver State Industries Page: 1 7:53:21 AM AR Customer Aging by Due Date (Summary) Report Date: 9/9/12 Days Old

0 - 30 31 - 60 61 - 90 91 - 120 121 + Cust ID Customer Name 08/10 - 09/09 07/11 - 08/09 06/11 - 07/10 05/12 - 06/10 all prior - 05/11 Balance Unapplied Net Due

AA1000 AAA WINDOW SIDING ROOFING $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($274.00) ($274.00) AG1030 AG'S HOLIDAY FUND $100.00 $0.00 $0.00 $0.00 $0.00 $100.00 ($100.00) $0.00 AL1035 ALPINE STEEL $23,937.01 $14,768.95 $15,392.16 $13,187.97 $334,590.14 $401,876.23 $0.00 $401,876.23 BE1045 DENNIS A BENEDICT $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($27,500.00) ($27,500.00) BH1025 B&H CONSTRUCTION $1,071.90 $23,229.00 $18,542.00 $0.00 $14,733.10 $57,576.00 $0.00 $57,576.00 BL1040 BYRON BLASCO $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($4,448.00) ($4,448.00) BR1040 ROBERT BROWN $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($7,000.00) ($7,000.00) BR1055 DAVID BRIGGS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($20,000.00) ($20,000.00) BY1005 MARY BYINGTON $135.88 $0.00 $0.00 $0.00 $0.00 $135.88 ($1.42) $134.46 CA1008 DAIRY FARMERS OF AMERICA $1,244.71 $0.00 $0.00 $0.00 $0.00 $1,244.71 ($5,830.11) ($4,585.40) CA1020 CARSON CITY SCHOOL DISTRICT $87.10 $0.00 $0.00 $0.00 $0.00 $87.10 $0.00 $87.10 CA1025 CARSON JUVENILE CENTER $270.00 $0.00 $0.00 $0.00 $0.00 $270.00 $0.00 $270.00 CE1055 JOHN CEFALU $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 CH1003 MICHAEL CHASE $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($4,400.00) ($4,400.00) CI1006 CITY OF CARSON, SHERIFF $1,224.00 $0.00 $0.00 $0.00 $0.00 $1,224.00 $0.00 $1,224.00 CI1007 CARSON CITY SCHOOL DISTRICT $3,550.84 $0.00 $0.00 $0.00 $0.00 $3,550.84 $0.00 $3,550.84 CI1035 CITY OF YERINGTON $539.86 $0.00 $0.00 $0.00 $0.00 $539.86 $0.00 $539.86 DA1006 DAYTON ELEMENTARY SCHOOL $1,052.10 $0.00 $0.00 $0.00 $0.00 $1,052.10 $0.00 $1,052.10 DA1010 J CHRISTOPHER DAPPER $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($15,000.00) ($15,000.00) DE1000 DEC-ART DESIGNS INC $309.04 $0.00 $0.00 $0.00 $0.00 $309.04 $0.00 $309.04 DE1002 BRANDY DECKER $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($8,300.00) ($8,300.00) DE1010 DECORATING WITH FABRIC $689.98 $0.00 $0.00 $0.00 $0.00 $689.98 $0.00 $689.98 DI1015 ROBERT DIAMANT $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($5,000.00) ($5,000.00) DI1025 DIAMOND MOUNTAIN DISTRIBUTORS $28,424.48 $23,504.35 $0.00 $0.00 $0.00 $51,928.83 $0.00 $51,928.83 DI1030 DIVAN, L.L.C. $81.58 $0.00 $0.00 $0.00 $0.00 $81.58 $0.00 $81.58 DO1010 D C NINTH JUDICIAL DISTRICT CT $149.17 $0.00 $0.00 $0.00 $0.00 $149.17 $0.00 $149.17 DU1020 KENNETH DUFFE $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($15,000.00) ($15,000.00) DU1025 WILLIE DUNCAN $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($10,000.00) ($10,000.00) DY1001 DYNAMIC DRAPERIES INC $138.68 $0.00 $0.00 $0.00 $0.00 $138.68 $0.00 $138.68 EM1006 EMPLOYEES'ASSN- SDCC & HDSP $48.00 $0.00 $0.00 $0.00 $0.00 $48.00 $0.00 $48.00 EM1008 EMPLOYEES' ASSN $120.00 $0.00 $0.00 $0.00 $0.00 $120.00 $0.00 $120.00 FA1030 FABRI-QUILT, INC. $85.79 $0.00 $41.07 $0.00 $2,738.13 $2,864.99 $0.00 $2,864.99 FE1020 FERGUSON SAFETY PRODUCTS $1,872.68 $1,311.73 $0.00 $0.00 $0.00 $3,184.41 ($3,314.00) ($129.59) FU1020 FULL CIRCLE COMPOST $3,344.61 $0.00 $0.00 $0.00 $0.00 $3,344.61 $0.00 $3,344.61 FU1030 FUELED BY THE FALLEN $0.00 $3,850.00 $0.00 $0.00 $0.00 $3,850.00 $0.00 $3,850.00 GA1005 SHARLET GABRIEL $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($4.25) ($4.25) GA1012 CLYDE GAFENEY $0.00 $0.00 $0.00 $0.00 $132.80 $132.80 $0.00 $132.80 GI1020 GIBSON TOOL & SUPPLY $52.69 $0.00 $0.00 $0.00 $0.00 $52.69 $0.00 $52.69 19 GU1025 RODGER GULMON $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($10,100.60) ($10,100.60) 9/9/12 Silver State Industries Page: 2 7:53:21 AM AR Customer Aging by Due Date (Summary)

20 Report Date: 9/9/12 Days Old

0 - 30 31 - 60 61 - 90 91 - 120 121 + Cust ID Customer Name 08/10 - 09/09 07/11 - 08/09 06/11 - 07/10 05/12 - 06/10 all prior - 05/11 Balance Unapplied Net Due

HE1040 DALE HERTZ $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($3,528.00) ($3,528.00) HI1025 HIGH SIERRA ICE CREAM, INC $789.96 $0.00 $0.00 $0.00 $0.00 $789.96 $0.00 $789.96 HU1005 RAY HUBBARD $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($15,676.00) ($15,676.00) JA1010 JACOBS TRADING COMPANY $53,050.86 $0.00 $0.00 $0.00 $0.00 $53,050.86 $0.00 $53,050.86 JO1035 ELLIOT JONES $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($16,274.00) ($16,274.00) KI1025 THE KID'S ZONE $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($24.00) ($24.00) LA1007 LANDER COUNTY SCHOOL DISTRICT $1,380.00 $0.00 $0.00 $0.00 $0.00 $1,380.00 $0.00 $1,380.00 LE1030 DR GEORGE D LEAKS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($23,200.00) ($23,200.00) LO1010 GIGLI LOCATELLI $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($37,232.00) ($37,232.00) LY1002 LYON COUNTY SCHOOL DISTRICT $203.13 $0.00 $0.00 $0.00 $0.00 $203.13 $0.00 $203.13 LY1065 LYLES, RICHARD $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($168.00) ($168.00) MO1030 JOSEPH MONZO $0.00 $0.00 $0.00 $0.00 $1,050.53 $1,050.53 $0.00 $1,050.53 MO1032 TIMOTHY MOLLOY $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($19,210.00) ($19,210.00) MO1050 ROBERT MONTES $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,745.00) ($1,745.00) OC1000 TIMMY A OCHAL $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($5,500.00) ($5,500.00) OF1010 HUNGRY MOTHERS/O'FARRELL $1,236.68 $1,296.67 $0.00 $0.00 $0.00 $2,533.35 $0.00 $2,533.35 OP1020 OPPORTUNITY VILLIAGE ARC $17,740.80 $0.00 $0.00 $0.00 $0.00 $17,740.80 $0.00 $17,740.80 PA1018 CHRISTOPHER PALMER $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($11,850.00) ($11,850.00) PO1018 MARIANNE POOHACHOFF $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,000.00) ($1,000.00) PO1050 CHARLES POWELL $0.00 $0.00 $0.00 $0.00 $5,000.00 $5,000.00 $0.00 $5,000.00 SL1020 SLOBOGIN STEEL & CONSTRUCTION $7,969.00 $0.00 $0.00 $0.00 $0.00 $7,969.00 ($3,688.00) $4,281.00 SP1025 BRYON SPRECHER $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($3,000.00) ($3,000.00) ST1047 STOREY COUNTY FIRE DEPARTMENT $2,414.00 $0.00 $0.00 $0.00 $0.00 $2,414.00 ($4,453.00) ($2,039.00) ST1050 HENRY STONE $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($7,215.00) ($7,215.00) ST1141 STOREY COUNTY SCHOOL DISTRICT $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,820.00) ($1,820.00) TA1038 DARWIN TAYLOR $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,050.00) ($1,050.00) VA1003 VARIOUS CUSTOMERS-COD $15,444.60 $0.00 $0.00 $0.00 $654.00 $16,098.60 ($4,392.00) $11,706.60 VI1000 VINYL PRODUCTS $984.00 $0.00 $0.00 $0.00 $0.00 $984.00 ($4,199.00) ($3,215.00) VO1005 SCOTT VOKOUN $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($1,500.00) ($1,500.00) WE1010 WESTERN METALS RECYCLING LLC $1,404.95 $0.00 $0.00 $0.00 $0.00 $1,404.95 ($1,404.95) $0.00 WO1035 WORLD CLASS EQUINE $7,621.66 $15.35 $134.45 $0.00 $0.00 $7,771.46 ($133.10) $7,638.36 YY1003 NDOC ADMIN-MEDICAL $228.60 $0.00 $0.00 $0.00 $0.00 $228.60 $0.00 $228.60 YY1011 ELY STATE PRISON $8,909.74 $0.00 $0.00 $0.00 $0.00 $8,909.74 $0.00 $8,909.74 YY1012 ELY CONSERVATION CAMP $1,658.40 $0.00 $0.00 $0.00 $0.00 $1,658.40 $0.00 $1,658.40 YY1017 LOVELOCK CORR CTR $2,412.72 $0.00 $0.00 $0.00 $0.00 $2,412.72 $0.00 $2,412.72 YY1020 JEAN CONSERVATION CAMP $623.19 $0.00 $0.00 $0.00 $0.00 $623.19 $0.00 $623.19 YY1021 HIGH DESERT STATE PRISON $3,719.68 $0.00 $0.00 $0.00 $0.00 $3,719.68 $0.00 $3,719.68 YY1023 NDOC ADMIN-MILK $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($31,504.80) ($31,504.80) YY1027 LOVELOCK CORR CTR-CANTEEN $2,210.50 $0.00 $0.00 $0.00 $0.00 $2,210.50 $0.00 $2,210.50 9/9/12 Silver State Industries Page: 3 7:53:21 AM AR Customer Aging by Due Date (Summary) Report Date: 9/9/12 Days Old

0 - 30 31 - 60 61 - 90 91 - 120 121 + Cust ID Customer Name 08/10 - 09/09 07/11 - 08/09 06/11 - 07/10 05/12 - 06/10 all prior - 05/11 Balance Unapplied Net Due

YY1029 NO NV CORRECTIONAL CTR $12,942.36 $0.00 $0.00 $0.00 $0.00 $12,942.36 $0.00 $12,942.36 YY1030 NORTHERN NV CORR CTR-CANTEEN $415.50 $0.00 $0.00 $0.00 $0.00 $415.50 $0.00 $415.50 YY1036 CARLIN CONSERVATION CMP-CANTEE $78.70 $0.00 $0.00 $0.00 $0.00 $78.70 $0.00 $78.70 YY1038 PI STORE/NSP TRADING POST $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($345.88) ($345.88) YY1040 CASA GRANDE TRANSITIONAL $457.20 $0.00 $0.00 $0.00 $0.00 $457.20 $0.00 $457.20 YY1041 NORTHERN NV RESTITUTION CENTER $135.00 $0.00 $0.00 $0.00 $0.00 $135.00 $0.00 $135.00 YY1045 WARM SPRINGS C0RRECTIONAL CTR $3,572.76 $0.00 $0.00 $0.00 $0.00 $3,572.76 $0.00 $3,572.76 YY1050 PURCHASING - NDOC OFFICE $8,765.25 $0.00 $0.00 $0.00 $0.00 $8,765.25 $0.00 $8,765.25 YY1051 SO DESERT CORR CTR $2,294.12 $0.00 $0.00 $0.00 $0.00 $2,294.12 $0.00 $2,294.12 YY1052 NDOC SOUTHERN ADMINISTRATION $0.00 $0.00 $388.00 $0.00 $0.00 $388.00 $0.00 $388.00 YY1056 FMWCC - CANTEEN $1,265.90 $195.25 $0.00 $0.00 $0.00 $1,461.15 $0.00 $1,461.15 YY1057 STEWART CONSERVATION CAMP $37.00 $0.00 $0.00 $0.00 $0.00 $37.00 $0.00 $37.00 YY1058 FLORENCE MCCLURE WOMENS' CORR $254.50 $0.00 $0.00 $0.00 $0.00 $254.50 $0.00 $254.50 YY1063 WELLS CONSERVATION CAMP $550.00 $0.00 $0.00 $0.00 $0.00 $550.00 $0.00 $550.00 YY1064 PIOCHE CON CAMP - CANTEEN $152.48 $0.00 $0.00 $0.00 $0.00 $152.48 $0.00 $152.48 YY1067 STEWART CON CAMP - CANTEEN $404.58 $0.00 $0.00 $0.00 $0.00 $404.58 $0.00 $404.58 YY1070 HIGH DESERT STATE PRISON CANTE $4,410.55 $0.00 $0.00 $0.00 $0.00 $4,410.55 $0.00 $4,410.55 YY1072 PI CASA GRANDE STORE $155.00 $0.00 $0.00 $0.00 $0.00 $155.00 ($24.00) $131.00 YY1075 WARM SPRINGS CC/CANTEEN $262.50 $0.00 $0.00 $0.00 $0.00 $262.50 $0.00 $262.50 YY1080 SO DESERT CORR CTR/CANTEEN $1,176.50 $0.00 $0.00 $0.00 $0.00 $1,176.50 $0.00 $1,176.50 YY1110 TONOPAH CONSERVATION CANTEEN $31.25 $0.00 $0.00 $0.00 $0.00 $31.25 $0.00 $31.25 YY1115 WELLS CONSERVATION CANTEEN $98.90 $0.00 $0.00 $0.00 $0.00 $98.90 $0.00 $98.90 YY1120 ELY STATE PRISON CANTEEN $501.15 $0.00 $0.00 $0.00 $0.00 $501.15 $0.00 $501.15 ZZ1006 AGING DIVISION-CARSON CITY $608.50 $0.00 $0.00 $0.00 $0.00 $608.50 $0.00 $608.50 ZZ1026 COMMISSION ON P.O.S.T. $390.00 $0.00 $0.00 $0.00 $0.00 $390.00 $0.00 $390.00 ZZ1037 EMPLOYMENT, TRAINING & REHAB $0.00 $1,146.00 $0.00 $0.00 $0.00 $1,146.00 $0.00 $1,146.00 ZZ1044 EARLY CHILDHOOD DEVELOPMENT $681.60 $0.00 $0.00 $0.00 $0.00 $681.60 $0.00 $681.60 ZZ1078 INFORMATION TECHNOLOGY $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($112.00) ($112.00) ZZ1089 LEGISLATIVE COUNSEL BUREAU $180.00 $0.00 $0.00 $0.00 $0.00 $180.00 $0.00 $180.00 ZZ1103 MOTOR VEHICLES DEPARTMENT $23,698.75 $0.00 $0.00 $0.00 $0.00 $23,698.75 $0.00 $23,698.75 ZZ1148 NEVADA STATE WELFARE & SUPP SV $5,737.50 $0.00 $0.00 $0.00 $0.00 $5,737.50 $0.00 $5,737.50 ZZ1201 ATTORNEY GENERAL $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ($52.00) ($52.00) ZZ1203 AGRICULTURE ESTRAY HORSE PROG $247.50 $0.00 $0.00 $0.00 $0.00 $247.50 $0.00 $247.50 ZZ1217 DIVISION OF WILDLIFE $358.00 $0.00 $0.00 $0.00 $0.00 $358.00 $0.00 $358.00 ZZ1248 INFORMATION TECHNOLOGY $112.00 $0.00 $0.00 $0.00 $0.00 $112.00 $0.00 $112.00 ZZ1300 NEVADA HIGHWAY PATROL $0.00 $0.00 $0.00 $0.00 $250.00 $250.00 $0.00 $250.00

AGING TOTALS: $268,507.62 $69,317.30 $34,497.68 $13,187.97 $359,148.70 $744,659.27 ($336,573.11) $408,086.16 21

AGING PERCENTAGES: 36.06% 9.31% 4.63% 1.77% 48.23% 100.00% 9/9/12 Silver State Industries Page: 4 7:53:21 AM AR Customer Aging by Due Date (Summary)

22 Report Date: 9/9/12 Days Old

0 - 30 31 - 60 61 - 90 91 - 120 121 + Cust ID Customer Name 08/10 - 09/09 07/11 - 08/09 06/11 - 07/10 05/12 - 06/10 all prior - 05/11 Balance Unapplied Net Due

TOTAL AGING BALANCE: $744,659.27

TOTAL PAYMENTS ON ACCOUNT: ($336,573.11)

LEDGER BALANCE: $408,086.16

TOTAL DEPOSITS WITH ORDER: $0.00

REPORT BALANCE: $408,086.16

REVIEW THE NUMBER OF INMATES THAT WORKED JULY 2010 THROUGH JULY 2012.

VI

NDOC Industrial Programs FY 2011 Report of Inmates Working

FY 2011 INST SHOP Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun MO. AVG ESP Drapery 22 22 22 21 23 26 31 24 24 23 24 20 24 HDSP Alpine Steel (private) - - 17 20 16 16 15 15 16 7 6 8 11 HDSP DMD/TJ Wholesale (private) 83 85 88 85 82 80 78 78 75 76 72 76 80 LCC Garment 77 75 70 69 69 69 82 69 65 65 72 65 71 NNCC Metal 22 15 15 15 21 18 9 13 13 14 12 49 18 NNCC Ranch 27 30 29 24 21 22 19 25 23 22 35 34 26 NNCC Vinyl (private) 34 33 33 30 36 27 27 28 28 21 - - 25 NNCC Furniture 58 40 38 46 50 51 53 57 53 45 42 51 49 LCC Mattress 23 23 21 21 22 21 20 20 19 19 19 23 21 NSP Tag Plant 16 16 18 15 15 15 15 15 15 15 13 13 15 NNCC Printing/Book Bindery 27 27 28 28 30 29 28 26 31 31 32 27 29 SDCC Auto/Upholstery 40 31 29 30 30 27 26 27 27 26 29 30 29 SDCC Big House Choppers ------ISCC M-Truss (community) - 9 9 9 6 6 - 5 8 8 - 11 6 SDCC DMD/TJ Wholesale (private) 12 17 15 19 20 20 21 21 21 25 29 - 18 SDCC Shelby American (private) ------SDCC Opportunity Village FMWCC Jacobs Trading (private) 34 34 35 35 34 39 38 39 38 36 35 34 36 FMWCC DMD/TJ Wholesale (private) ------NNCC Horses 19 17 18 22 22 24 31 30 27 26 21 22 23 WSCC DMD/TJ Wholesale (private) 12 12 13 12 11 12 13 12 14 14 13 13 13

Grand Total 506 486 498 501 508 502 506 504 497 473 454 476 493

Average Inmate Population 12,613 12,595 12,584 12,584 12,550 12,563 12,476 12,481 12,487 12,511 12,504 12,501 12,537 Percent of Inmate Population Employed 4.0% 3.9% 4.0% 4.0% 4.0% 4.0% 4.1% 4.0% 4.0% 3.8% 3.6% 3.8% 3.9% 23 24

NDOC Industrial Programs FY 2012 Report of Inmates Working

FY 2012 INST SHOP Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun MO. AVG ESP Drapery 20 11 15 15 15 15 17 18 15 16 18 17 16 HDSP Alpine Steel (private) 6 12 16 21 22 22 19 18 22 15 16 13 17 HDSP DMD/TJ Wholesale (private) 74 72 72 72 60 59 63 69 65 66 63 65 67 LCC Garment 64 71 74 74 65 68 71 70 36 63 64 62 65 NNCC Metal 23 22 19 19 17 20 6 16 16 15 13 19 17 NNCC Ranch 34 27 27 27 27 21 23 23 24 25 25 25 26 NNCC Vinyl (private) ------NNCC Furniture 37 49 38 38 25 54 50 57 59 41 45 49 45 LCC Mattress 18 21 21 21 21 20 21 19 20 19 15 16 19 NSP Tag Plant 13 14 14 14 14 13 13 13 13 12 - - 11 NNCC Printing/Book Bindery 29 22 20 20 20 18 17 17 17 20 20 23 20 SDCC Auto/Upholstery 30 30 30 30 27 30 27 32 33 29 30 29 30 SDCC Big House Choppers ------ISCC M-Truss (community) 11 10 6 6 - - 4 - 9 11 - - 5 SDCC DMD/TJ Wholesale (private) 1 - - - - 4 - - 1 2 - - 1 SDCC Shelby American (private) ------SDCC Opportunity Village FMWCC Jacobs Trading (private) 41 42 41 41 41 39 39 43 48 41 40 38 41 FMWCC DMD/TJ Wholesale (private) ------NNCC Horses 23 18 18 18 22 23 18 16 19 19 17 14 19 WSCC DMD/TJ Wholesale (private) 13 13 12 12 12 12 12 12 12 12 10 8 12

Grand Total 437 434 423 428 388 418 400 423 409 406 376 378 410

Average Inmate Population 12,626 12,598 12,584 12,548 12,478 12,477 12,555 12,516 12,460 12,437 12,486 12,564 12,527 Percent of Inmate Population Employed 3.5% 3.4% 3.4% 3.4% 3.1% 3.4% 3.2% 3.4% 3.3% 3.3% 3.0% 3.0% 3.3% NDOC Industrial Programs FY 2013 Report of Inmates Working

FY 2013 INST SHOP Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun MO. AVG ESP Drapery 16 16 HDSP Alpine Steel (private) 13 13 HDSP DMD/TJ Wholesale (private) 100 100 LCC Garment 57 57 NNCC Metal 18 18 NNCC Ranch 26 26 NNCC Vinyl (private) - - NNCC Furniture 38 38 LCC Mattress 15 15 NSP Tag Plant 12 12 NNCC Printing/Book Bindery 25 25 SDCC Auto/Upholstery 29 29 SDCC Big House Choppers - - ISCC M-Truss (community) - - SDCC DMD/TJ Wholesale (private) - - SDCC Shelby American (private) - - SDCC Opportunity Village 33 FMWCC Jacobs Trading (private) 38 38 FMWCC DMD/TJ Wholesale (private) - - NNCC Horses 16 16 WSCC DMD/TJ Wholesale (private) 8 8

Grand Total 444 ------37

Average Inmate Population 12,626 12,626 Percent of Inmate Population Employed 3.5% 3.5% 25

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DEDUCTIONS FROM INMATE WAGES FOR ROOM AND BOARD, THE PRISON INDUSTRY CAPITAL IMPROVEMENT FUND, AND THE VICTIMS OF CRIME FUND – FY 2011, FY 2012 AND FY 2013 YEAR-TO-DATE.

VII

NEVADA DEPARTMENT OF CORRECTIONS Prison Industries Payroll Assessments

FY 2010 FY 2011 FY 2012 (a) R & B (b) PICI (c) VCF TOTAL (a) R & B (b) PICI (c) VCF TOTAL (a) R & B (b) PICI (c) VCF TOTAL Nevada State Prison $19,088 $3,895 $3,895 $26,879 $14,053 $2,868 $2,868 $19,790 $0 $0 $0 $0 Northern Nevada Correctional Ctr. 80,767 16,483 16,483 113,734 60,995 12,448 12,448 85,891 62,828 12,822 12,822 88,472 Stewart Conservation Camp 23,594 4,815 4,815 33,224 39,834 8,129 8,129 56,092 41,106 8,389 8,389 57,884 Lovelock Correctional Ctr. 30,437 6,212 6,212 42,860 38,251 7,806 7,806 53,864 37,307 7,614 7,614 52,535 Florence McClure Womens Correctional Ctr. 64,212 13,105 13,105 90,422 108,674 22,178 22,178 153,031 131,319 26,800 26,800 184,919 Southern Desert Correctional Ctr. 175,274 35,770 35,770 246,815 45,515 9,289 9,289 64,093 30,103 6,143 6,143 42,389 Warm Springs Correctional Ctr. 14,501 2,959 2,959 20,419 9,897 2,020 2,020 13,936 5,142 1,049 1,049 7,240 Three Lakes Valley Conservation Camp 6,449 1,316 1,316 9,081 8,909 1,818 1,818 12,546 4,599 938 938 6,475 High Desert State Prison 79,953 16,317 16,317 112,587 63,424 12,944 12,944 89,311 71,138 14,518 14,518 100,174 Ely State Prison 16,065 3,279 3,279 22,622 17,555 3,583 3,583 24,720 7,270 1,484 1,484 10,238 Southern Nevada Correctional Ctr. 0 0 0 0 0 0 0 0 0 0 0 0 Total $510,340 $104,151 $104,151 $718,642 $407,107 $83,083 $83,083 $573,274 $390,812 $79,757 $79,757 $550,326

(a) Room and Board (R & B)

Twenty-four and one-half percent of the inmate's gross wages are assessed to defray some of the costs incurred by the State to house the inmates.

(b) Prison Industries Capital Improvement Fund (PICI)

Five percent of the inmates gross wages are assessed for capital projects to house new or expanded Prison Industry programs.

(c) Victims of Crime Fund (VCF)

Five percent of the inmate's gross wages are assessed for the Fund for Compensation of Victims of Crime. 27

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POTENTIAL PRISON INDUSTRY PROGRAMS AND COMMITTEE RECOMMENDATIONS (NRS 209.4818)

VIII

NRS 209.4818 Committee on Industrial Programs: Duties. 1. The Committee on Industrial Programs shall: (a) Be informed on issues and developments relating to industrial programs for correctional institutions; (b) Submit a semiannual report to the Interim Finance Committee before July 1 and December 1 of each year on the status of current and proposed industrial programs for correctional institutions; (c) Report to the Legislature on any other matter relating to industrial programs for correctional institutions that it deems appropriate; (d) Meet at least quarterly and at the call of the Chair to review the operation of current and proposed industrial programs; (e) Recommend three persons to the Director for appointment as the Deputy Director for Industrial Programs whenever a vacancy exists; (f) Before any new industrial program is established by the Director in an institution of the Department, review the proposed program for compliance with the requirements of subsections 2, 3 and 4 of NRS 209.461 and submit to the Director its recommendations concerning the proposed program; and (g) Review each industry program established pursuant to subsection 2 of NRS 209.461 to determine whether the program is operating profitably within 3 years after its establishment. If the Committee determines that a program is not operating profitably within 3 years after its establishment, the Committee shall report its finding to the Director with a recommendation regarding whether the program should be continued or terminated. 2. Upon the request of the Committee on Industrial Programs, the Director and the Deputy Director for Industrial Programs shall provide to the Committee any information that the Committee determines is relevant to the performance of the duties of the Committee. (Added to NRS by 2001, 2391; A 2007, 68)

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