FISCAL NOTE
Date Requested: January 21, 2020
Time Requested: 02:32 PM |
| Agency: |
Environmental Protection, Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2365 |
Introduced |
HB4443 |
|
|---|
| CBD Subject: |
Environment |
|---|
|
FUND(S):
Landfill Closure Cost Assistance Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
Chapter 22, Article 16 of the WV State Code, gives the DEP the responsibility to close and maintain State landfills that cannot be operated in an environmentally sound manner and therefore, pose a threat to the environment and the health and safety of our citizens. To date we have closed 26 sites at a cost of $75,684,588. There are five (5) remaining sites to close and one (1) site that has not applied for assistance.
The money to fund these landfill closures come from the Closure Cost Assistance Fund. This proposed legislation reduces the revenue received in this fund by 28.6% which will negatively impact the DEPs ability to close and maintain these landfills.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
12,602,000 |
16,602,000 |
7,402,000 |
| Personal Services |
402,000 |
402,000 |
402,000 |
| Current Expenses |
12,200,000 |
16,200,000 |
7,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
8,000,000 |
5,700,000 |
5,700,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
The above revenue estimate is based on the average of actual revenue received for the completed fiscal years 2015 through 2019. Expenditure estimates are based on projecting actual expenditures, plus additional closure costs we anticipate being incurred during the respective years. The expenditure estimates do not include any unforeseen extraordinary costs or the cost to replace earthen caps and are based on standard closures. Many factors can increase these costs.
The proposed reduction in revenue is reflected in FY2021 and beyond based on the proposed legislation being effective at the start of FY2021.
Currently five landfills remain to be closed at an estimated cost of $29.3 million. Another five closed landfills have earthen caps that need to be replaced with synthetic caps. The estimate to replace these caps is an additional $9.4 million. The landfill that has not applied for assistance is not included in these estimates.
In addition to closure costs, the State has a 30-year obligation for on-going maintenance at closed landfills. Currently the estimated on-going maintenance costs total $5.4 million per year. These on-going costs include water treatment, maintenance, monitoring and repairs. In addition, one-time extraordinary expenses may be incurred which can vary in cost depending on the severity of the repair.
Closure costs are based on current conditions and actual expenditures can vary greatly because the sites are heavily impacted by weather conditions, land slippages, etc. Revenues can vary widely because they are based on the solid waste tonnage disposed of and this is impacted by industry conditions.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
With the implementation of HB4443, the Fund will be limited to completing the closing of those landfills actively under closure construction and cause the Fund to be depleted to $4 million, making it unable to close the remaining landfill, Wheeling, to which closure costs are estimated to be in excess of $12 million. Upon implementation of this legislation, all future funding received would be applied only to the operating and maintenance (O&M) costs of the landfills closed by the Program at an approximate annual cost of $5.4 million. Factoring in the personal services required to oversee the O&M, at an annual costs of $402,000, the anticipated annual revenues of $5.7 million would hardly cover the cost of both O&M and personal services. This causes the Program, pending no contingencies or factoring inflation, to have an annual operating deficit of over $100,000. This deficit, and all contingent issues that may arise, would need to be paid from the $4 million balance.
Person submitting Fiscal Note: Gary Rogers
Email Address: gary.w.rogers@wv.gov