Regulatory board faces brain drain

The regulatory agency that oversees Nevada's multibillion-dollar casino industry may lose some veteran staffers in key positions because of proposed state salary and retirement benefit changes, lawmakers were told Friday.

Dennis Neilander, chairman of the Nevada Gaming Control Board, told the Assembly Ways and Means Committee that two senior staff members may retire in March, taking a combined 60 years of institutional knowledge with them.

Neilander said that the proposed salary reductions and diminished benefits resulting from Gov. Jim Gibbons' call for agency budget cuts would amount to as much as 17 percent less in compensation for some long-term staffers.

"It is, as you can imagine, a grave concern to the board," he said.

Neilander explained that during an economic downturn, his staff, many of whom hold advanced degrees, are able to find higher-paying jobs in the private sector, which recovers more quickly from downturns.

"As the economy recovers, those individuals tend to leave, and we don't recover until later," Neilander said.

The Control Board staff of accountants and lawyers conducts audits on major casinos to determine whether they are paying the appropriate taxes and fees to the state. Taxes and license fees paid by casinos amounted to more than $900 million last fiscal year.

Neilander said that the Control Board froze hiring over a year ago, and will cut 30 positions, 27 of which are currently vacant. To cope with the cuts, the board will conduct audits of major casinos less frequently.

"We won't be physically present to the extent we are right now," Neilander said. "We will be more responding to calls rather than doing our proactive work."

That could affect those casinos that have recently merged, where the accounting responsibilities of two casinos are now handled by one.

If casinos make mistakes in their payments to the board, the interest and fees they owe would be greater because they'd accumulate for a longer period of time.

Assemblywoman Sheila Leslie, D-Reno, suggested restoring funding in the budget for staff, and reducing the Nevada Gaming Commission's budget to travel out of state to industry conferences.

"People are retiring based on how undervalued they feel," Leslie said after the meeting. "This is a huge concern in many of agencies. The biggest concern to me is in the agencies where the positions are highly technical."

Neilander also told lawmakers that the staff reduction could delay the agency's data system upgrade by a decade.

The vendor that provides technical support has said that it would soon stop servicing the 11-year-old data storage system.

The data system holds gambling license applications, tax returns and financial statements which are used to investigate companies applying for licenses.

Staffers have been working to migrate the data to a more current system, but there is no allowance in the budget for that project, and those technical staff who understand both systems may leave or retire.

"We're coming to a critical position," Neilander said. "It's going to be a huge problem."