Blog Archives

SMART21: What It Means to You

10/30/2018

As Nevadans decide who will be our state leaders for the next four years, we want to highlight the most significant project affecting the controller’s office and many others.
During the past three-plus years, we’ve been extensively involved in SMART 21, the project to replace the 20-year old state accounting, human resources and similar systems with modern fully integrated information technology (IT) that will serve all state agencies.  It has involved nearly every state agency to assure their needs are met and the system works efficiently and effectively.  And it’s been a cooperative and fruitful collaboration.
Ron serves on the executive steering committee for the project with the directors of the governor’s finance and administration offices.  James is a non-voting advisor to the committee.  Both of us have been heavily involved in this significant project.
In late August, a major Request for Proposal (RFP) went out for bid, with the deadline for proposal submission in November and evaluations of the proposals to be made from December through February.
This is a low-key ministerial matter, but nonetheless very important and should concern voters.
It’s possible all three current members of the executive committee guiding this vitally important modernization project could be replaced in the next few months at a very critical juncture for the project.
The finance and administration directors each serve at the pleasure of the governor.  Depending on how much change a new governor wants to make in top administration posts, both could be replaced by the incoming governor.  Such changes often happen when there’s a change in administrations.
Nevada voters will have little or no say about the tenure of those two executive committee members.  Each will likely make his pitch to continue in their current capacities, and it will be up to our incoming governor.
However, voters have all the say on the third position, the state controller.  The controller is directly elected by the citizens of Nevada, and who that person is going forward will be critically important in ensuring the SMART21 project remains on course.
What’s at stake?  Likely, the new system will cost taxpayers between $50 and $80 million for the entire project, and will take the next four years to complete.  A significant investment has already been made to establish the SMART 21 transition team and retain a contractor to assist with developing the RFP.
Also, much work has been done to re-engineer state business practices for maximum efficiency and effectiveness.
Experience matters in leading such projects.  As a higher education regent, Ron was very involved at the start of launching a similar system for our colleges and universities.  James has experience with large IT projects in the private sector.
We‘ve found our experience essential on the executive steering committee, in business process re-engineering and in RFP development.  We expect it to be just as essential in selecting a contractor and overseeing system development, implementation and testing.
This project must come in on time and in good order or the state’s administrative systems will grind to a halt because vendor support of them is expiring.
If you retain Ron as controller, you will continue to benefit from his leadership and experience.  He has committed to retaining James as his deputy.  In addition to being immersed in this project from the start, we have experience rescuing a major troubled IT project we inherited and turning it into a moneymaker for the state.
Or voters can make a switch in the management of the controller’s office by electing Ron’s opponent.  According to her LinkedIn professional profile, she has no experience in large IT projects.
She would also choose a new deputy, and the two of them would be trying to get up to speed on this major critical project at the same time they are learning two challenging and extensive new jobs.  Being controller or deputy is only partly about overseeing accounting functions, as we have also been doing well.
This is not about Republican vs. Democrat.  This is about management and broad experience, and the current controller’s office leadership has the experience necessary to ensure we complete a project to serve a generation of Nevadans with best modern technology at minimal cost.

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Mourning the Loss of Dennis Hof

10/22/2018

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Mourning the Loss of Dennis Hof
By Ron Knecht and James Smack – 22October2018
When news of the sudden death of Assembly candidate and brothel owner Dennis Hof reached us last Tuesday, we were quite stunned by it.  We had gotten to know Dennis, and James had seen him several times in the weeks preceding his sudden departure.
One of his great gifts was the ability to make you feel you were the most important person in the room.  Two occasions involving James come to mind, but Ron felt the same way.
A few weeks ago, James and Dennis had lunch along with James’s wife Vicki, her service dog Oreo, and four of Hof’s sex workers.  It was an entertaining lunch, with James and Dennis talking business about how Dennis could help the Knecht campaign in Nye County.  In turn, James talked to Dennis about how to defeat Lyon County Question 1.  That is the advisory question to eliminate brothels in Lyon County.
For Hof’s part, in and between conversation points, he made sure everyone at the table had enough to eat, drink, etc.  He made everyone at the table feel valued and important.
James later remarked, tongue in cheek, that, “This was the one lunch that I am glad that I had my wife with me.  It would be hard to explain my dining with Dennis and four sex workers otherwise if it got back to her later!”
Vicki talked with the women.  She noted how well educated they were.  They were not women one would typically think of when you think about prostitution.  They were all college educated, well informed and good conversationalists.  Perhaps they were the cream of the crop, chosen by Dennis to represent the brothel.  In any event, they did that well.
As for Oreo?  She adored Dennis and loved the attention from the women.
The second occasion was when James went to address the Nye County Republican Central Committee on Ron’s behalf for the campaign.  The introduction Dennis gave for James was absolutely glowing, leading a few to joke that James must have paid him in advance.
You always knew right where Dennis Hof stood.  He considered Ron to be one of the strongest conservative voices in the state along with treasurer candidate Bob Beers.  And he said so in his glowing introduction of James.
The back story is James took a stand on principle two years ago, and Hof remembered.  James, as the former Republican National Committeeman, took a bold stand by endorsing Hof in his first race for assembly.
At the time, Hof was running as a libertarian against a sitting Republican Assemblyman, James Oscarson, who had lied to Ron and James’s faces only a couple weeks prior to voting on the commerce tax and the largest tax increase in Nevada history.  Oscarson talked to them in his assembly office after a meeting on Ron’s alternative budget that would have required no tax increases, grown spending only slightly, and still provided adequate revenue for important programs.  Oscarson said he would not vote for a tax increase because his constituency in Nye County would vote him out.
Since Oscarson did not keep his word and abandoned Republican principles by voting for the commerce tax and the largest total tax increase in Nevada history, we took this bad faith personally.  Hence, after speaking with Hof and some Nye County friends on the phone, James took a controversial stand by endorsing a Libertarian over an incumbent Republican legislator.
Hof did not win that race, although he did get more than 40 percent of the vote as a Libertarian Party candidate.  After that, at the urging of Republican Party officials in Nye County, Hof changed his voter registration to Republican in order to run against Oscarson in the 2018 primary for the assembly seat.
And James’s endorsement still stood.  Dennis defeated double-crossing James Oscarson in the primary.  Just as Oscarson said to us in his office: Vote for a tax increase, and Nye County votes you out.
Whatever one thought of his business, Dennis Hof always let you know right where you and he stood.  He was larger than life, yet very down to earth.  We’re both better for having known him.
He had integrity and he’ll be missed.

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Re-elect Ron Knecht as Nevada Controller

10/16/2018

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Please indulge us as we ask you to re-elect Ron as Nevada Controller.  If Ron wins, James also gets reappointed Deputy Controller.
Ron’s running on his record and qualifications.  When we discuss below things we’ve done, it’s both of us, but also 39 other people in the office.  We’re blessed with an outstanding team of professionals led by talented managers.
Nevada’s controller has back-office duties typical of state controllers, but also an unusual charge to promote: frugality and economy in state operations; better management of fiscal affairs; support of public credit; and better understanding of all these things.
Folks are probably aware of things we’ve done to serve the latter charge and promote openness, transparency and accountability.  Likely they’re not as aware of the equally outstanding record on the less visible but equally important daily nuts-and-bolts ministerial functions
As with all public offices, the controller also must operate economically and effectively.  So, the first thing we did was cut spending by 13.3 percent from the budget we inherited from Ron’s predecessor, as approved by the legislature and governor.  In our first 18 months, we turned back over $1-million to the state treasury to fund other services and help keep down your taxes.  All while improving services.  The budgets we subsequently submitted have been well lower than the one we inherited.
We also inherited a troubled information technology (IT) project intended to improve the dismal record on collecting debts turned over to the controller by other state agencies.  Many IT projects experience great cost and schedule overruns until the plug is pulled and they produce no usable results.  We were determined ours would not be the next one.
We worked diligently with many of our staff, the attorney general, finance and other offices, and with the contractor to implement two contract amendments.  Just over a year ago, the project came on line.  We’re very proud that in its first year of operation, this project increased nearly $1.3-million, or 356 percent, instead of cratering like so many others.
Thus, we proved government spending can be cut while services, operations and revenues are enhanced.
When the governor and legislature planned to pass Nevada’s largest spending and tax increases ever, Ron led a group of legislators, government and non-government professionals, and citizens to craft the first ever alternative budget.  It would have increased total spending very slightly – less than the rate of growth of Nevada’s economy – and not required any tax increases.  It was given a clean bill of health by the legislative counsel and sailed through its committee hearing.
But the legislature and governor passed their tax and spend orgy, including the very pernicious, destructive and unnecessary Commerce Tax, which is similar to the margins tax voters defeated 79-21 in 2014.  So, we worked with the same folks to craft a voter initiative to repeal it.  We’ve made progress and had setbacks.  However, we have a sound plan to get it on the ballot two years hence so voters have the last word.
Along the way, Ron published the first three Controller’s Annual Reports (CARs), which won prizes and praise from a national professional organization.  In 24 pages of data, charts, graphs, tables and clear text, the CAR details trends and issues in Nevada fiscal and policy matters, the challenges, and some solutions from a public-interest perspective.
Ron is co-leading business process re-engineering for state agencies and development of an essential all-functions (accounting, payroll, administration, budget, etc.) enterprise resource planning and management IT system.  It will fully integrate and modernize state business operations by 2022.
We have also recorded outstanding accounting and other operations successes too.
Finally, Ron has led efforts to bring badly needed openness, transparency and accountability to Nevada’s public employee retirement system.  In addition, he has used his economic, financial and policy expertise to promote more reasonable assumptions in pension planning.  The pension system is financially seriously in the hole, and without such reforms it well may become a disaster for taxpayers, state employees and retirees.
We’ve taken care of both high- and low-visibility issues the old fashioned way: by working hard; using sound management and professional practices; and working cooperatively with other agencies.  So, we request your vote.
By Ron Knecht and James Smack – 16October2018
Please indulge us as we ask you to re-elect Ron as Nevada Controller.  If Ron wins, James also gets reappointed Deputy Controller.
Ron’s running on his record and qualifications.  When we discuss below things we’ve done, it’s both of us, but also 39 other people in the office.  We’re blessed with an outstanding team of professionals led by talented managers.
Nevada’s controller has back-office duties typical of state controllers, but also an unusual charge to promote: frugality and economy in state operations; better management of fiscal affairs; support of public credit; and better understanding of all these things.
Folks are probably aware of things we’ve done to serve the latter charge and promote openness, transparency and accountability.  Likely they’re not as aware of the equally outstanding record on the less visible but equally important daily nuts-and-bolts ministerial functions
As with all public offices, the controller also must operate economically and effectively.  So, the first thing we did was cut spending by 13.3 percent from the budget we inherited from Ron’s predecessor, as approved by the legislature and governor.  In our first 18 months, we turned back over $1-million to the state treasury to fund other services and help keep down your taxes.  All while improving services.  The budgets we subsequently submitted have been well lower than the one we inherited.
We also inherited a troubled information technology (IT) project intended to improve the dismal record on collecting debts turned over to the controller by other state agencies.  Many IT projects experience great cost and schedule overruns until the plug is pulled and they produce no usable results.  We were determined ours would not be the next one.
We worked diligently with many of our staff, the attorney general, finance and other offices, and with the contractor to implement two contract amendments.  Just over a year ago, the project came on line.  We’re very proud that in its first year of operation, this project increased nearly $1.3-million, or 356 percent, instead of cratering like so many others.
Thus, we proved government spending can be cut while services, operations and revenues are enhanced.
When the governor and legislature planned to pass Nevada’s largest spending and tax increases ever, Ron led a group of legislators, government and non-government professionals, and citizens to craft the first ever alternative budget.  It would have increased total spending very slightly – less than the rate of growth of Nevada’s economy – and not required any tax increases.  It was given a clean bill of health by the legislative counsel and sailed through its committee hearing.
But the legislature and governor passed their tax and spend orgy, including the very pernicious, destructive and unnecessary Commerce Tax, which is similar to the margins tax voters defeated 79-21 in 2014.  So, we worked with the same folks to craft a voter initiative to repeal it.  We’ve made progress and had setbacks.  However, we have a sound plan to get it on the ballot two years hence so voters have the last word.
Along the way, Ron published the first three Controller’s Annual Reports (CARs), which won prizes and praise from a national professional organization.  In 24 pages of data, charts, graphs, tables and clear text, the CAR details trends and issues in Nevada fiscal and policy matters, the challenges, and some solutions from a public-interest perspective.
Ron is co-leading business process re-engineering for state agencies and development of an essential all-functions (accounting, payroll, administration, budget, etc.) enterprise resource planning and management IT system.  It will fully integrate and modernize state business operations by 2022.
We have also recorded outstanding accounting and other operations successes too.
Finally, Ron has led efforts to bring badly needed openness, transparency and accountability to Nevada’s public employee retirement system.  In addition, he has used his economic, financial and policy expertise to promote more reasonable assumptions in pension planning.  The pension system is financially seriously in the hole, and without such reforms it well may become a disaster for taxpayers, state employees and retirees.
We’ve taken care of both high- and low-visibility issues the old fashioned way: by working hard; using sound management and professional practices; and working cooperatively with other agencies.  So, we request your vote.

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Autumn 2018 in Northern Nevada: Calm before the Storm?

10/9/2018

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It’s beautiful in northern Nevada this second week of October.
Early autumn colors of red, orange, purple and yellow are bursting out many places.  And while temperatures are rather mild, the air is already clear and crisp.  After the smoke from many western wildfires this summer, clear air is a great relief.
Fall brings many annual festivities, apple picking, last barbeques of the year, the smell of wood burning in nearby fireplaces.  Pumpkins and Halloween decorations earlier every year.  Even the return of bears to yards in our small towns, hoping to get to the apples first, and the deer seeking the last tomatoes on our vines.
Students are diligently studying their math, Spanish, history and even nutrition.  Although professional football has forfeited its charm and much of our interest (and everyone else’s, it seems), high schoolers still run cross-country, and college football stokes a bit of conversation at the office.
These things are timeless, thank goodness.
Major League Baseball has had a great year.  Not the least, in Ron’s view, because his Dodgers won their sixth straight division title and their first playoff series.  James, of course, is in heaven because his Red Sox had the best record in baseball and are poised in their series to knock out the Yankees we both despise (doesn’t everyone?).
What could be better than a Dodgers versus Red Sox series?
For the two of us, there’s also Ron’s re-election campaign, plus doing our very full-time jobs at the same time.  Although the last few months and the next one are very hectic, we are grateful for the opportunities to do good public service and to take our message to the people.
James’s wife Vicki has been a god-send to the campaign, with many colorful ideas and a masterful job decorating the truck for parades.  Ron’s wife Kathy and daughter Karyn have been more energized, enthusiastic and helpful than ever.
We’re blessed that once again the Controller’s office election will not turn into the kind of mud baths the gubernatorial and senate races have.  We’re happy to be able to focus on the jobs we’ve done, both low and high profile, and tell folks that if you re-elect Ron, we’ll do more of the same.  Likewise, the fact that we’re reliable, dependable limited government conservatives with long solid track records to prove it.
So why a sense of foreboding, even dread?
It’s not just the ugliness, hate, dishonesty and rejection of all principles and decency by senate Democrats, progressives, statist liberals, lamestream media and other leftists in the Brett Kavanaugh confirmation process for the U.S. Supreme Court the last month.  Indeed, that was one of the worst experiences we’ve known in politics and American life.  Disgusting almost beyond words.
With that episode finished, one would hope we could enjoy the blessings of our favorite season and the kind of campaign (for us, at least) civics textbooks describe.  Telling voters how we’ve taken care of the nuts and bolts of day-to-day back-office functions that are so important even though they put folks to sleep.  Discussing the much higher profile fiscal and policy challenges Nevada state and local governments face.  Renewing old acquaintances.
One would hope we could do that as we look forward to the election and holidays.
But, no, even with the temporary relief from the swearing in of Mr. Justice Kavanaugh, we feel the foreboding, the dread of the future.
For his opponents not only took everything to a new low, but they’ve already promised that the future holds the same, only more.  Their politics of personal destruction to get whatever it is they want at any time.  Their rejection of any and all fundamental principles that stand in their way, using such nonsense claims as due process and the presumption of innocence apply only to criminal matters.
Also their despicable politics of identity groups continually at war and rejection of our common humanity, or any attempt to find common ground.  Plus scorched-earth tactics and destroy-you strategies.
America is still mankind’s greatest political, social and economic enterprise, and the American people deserve better than that.  Your votes in the coming election will help determine whether things remain calm or get stormy.

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Our Answer to Question 6: No!

10/3/2018

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Question 6 in the coming election asks whether Nevada’s Constitution shall be amended to require that, beginning in 2022, all Nevada sellers of retail electricity increase the amount of “renewable” energy resources they use so that at least 50 percent of their electricity comes from those resources by 2030.

We have long supported increasing diversity in energy supplies via economic development of renewables.  But the mandates proposed by Question 6 are a big mistake and we strongly counsel voting against it.

Over 40 years ago, Ron wrote a masters thesis assessing the economics and performance issues for the full range of electric generating technologies, from nuclear, coal, oil and gas to solar, geothermal, wind, cogeneration and other alternatives.  Subsequently, he testified numerous times as an expert witness in various states in favor of both general renewables policies and specific technologies and projects.

He testified on these matters as a staff witness at the California Energy and Public Utilities Commissions, for public agencies and other commissions, environmental and public-interest intervenors, renewable developers and utilities across the country and even in Hawaii.  He also observed critically the progress and development of the renewables industry and the experience with it around the country and internationally.

So, why no on Question 6?

First, this is exactly the kind of matter that does not belong in any government constitution.  It is a highly technical matter for which the underlying economics and other factors are subject to unexpected great change that undermines the case for a particular technology.

Government constitutions are best and most effective when they address mainly the structural and procedural basics of government and the fundamental rights and protections of individuals.  The American constitution is the best functioning and most ideal model precisely because it is the shortest and is confined to those basic matters.

If this measure is enshrined in Nevada’s constitution, due to the amendment process, it would take at least six years to correct any flaw we subsequently find that needs fixing.  Meantime, we’d be stuck with it.

A particular example from energy economics is instructive here.  About 1980, natural gas became so expensive in world markets that it was being mostly abandoned by electric utilities for electricity generation.  Much government policy treated it as too valuable as a chemical feedstock to be used as an energy source of any kind.
By the mid-1990s, there was a glut of gas, and prices collapsed.  In the last decade, its prices have again plummeted due to new producing technologies that were unforeseen, and it has become the fuel of choice.

Policies adopted 40 years ago to discourage using natural gas for energy supply and set prices for renewable technologies have cost consumers large amounts.  This is a classic example of the inability of policy makers to anticipate important future developments and the overreach and hubris of much planning and policy.  Question 6 may be a bigger disaster for Nevada.

Another problem is that “renewable energy sources” are not even defined in the proposed constitutional amendment.  While the measure’s proponents have an idea of what they mean by the term, it is very likely to lead to extensive and wasteful litigation.

The proposed measure would require Nevada’s legislature to pass legislation implementing its constitutional intent.  But there are no standards to determine what legislative measures would be necessary, appropriate and sufficient.  In short, it is really a bonanza for lawyers to litigate.

Further, the legislature’s fiscal analysts confess they cannot say how this measure would be implemented, nor what implementation would cost the state or consumers.  Legislators lack the expertise and focus to decide such matters, so they will be subject to undue influence by lobbyist and their big business clients.  That’s the reason public utility commissions were invented and embraced by almost all states to handle such matters.

Experience in other states is generally not very helpful in predicting the effects in another state, because the important facts vary greatly from one situation to another.  With one exception: Broad, bold policies are most likely to lead to economic disasters, while careful consideration of specific projects and technologies as they are proposed are least likely to do so.

So, no on 6.

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SMART21: What It Means to You

Mourning the Loss of Dennis Hof

Re-elect Ron Knecht as Nevada Controller

Autumn 2018 in Northern Nevada: Calm before the Storm?

Our Answer to Question 6: No!

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