FISCAL NOTE

Date Requested: January 18, 2019
Time Requested: 01:58 PM
Agency: Environmental Protection, Department of
CBD Number: Version: Bill Number: Resolution Number:
1761 Introduced SB147
CBD Subject: County Officials


FUND(S):

Special Revenue 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.


Chapter 22, Article 16 of 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 comes from the Closure Cost Assistance fund. This proposed legislation reduces the revenue received in this fund by 28.6% which will impact the DEP’s ability to close and maintain these landfills.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 6,379,812 11,634,923 12,113,290
Personal Services 936,236 936,236 936,236
Current Expenses 5,443,576 10,698,687 11,177,054
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 7,574,186 5,407,969 5,407,969


Explanation of above estimates (including long-range effect):


The above revenue estimate is based on the average of actual revenue received for the completed fiscal years 2015 through 2018. 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 fiscal years 2020 and beyond based on the proposed legislation being effective at the start of the 2020 fiscal year. Currently five landfills remain to be closed at an estimated cost of $33 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 $9,717,510. 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 $3,928,364 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, 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 tonnage disposed of and this is impacted by industry conditions.



Memorandum


From fiscal year 2015 to the current, expenditures in the Closure Cost Assistance Fund has almost equaled the revenue received, being only $114,942 less. In fiscal years 2016 and 2017, expenditures exceeded the revenue received by $295,594 and $4,661,118 respectively. Any decrease in revenue could limit the DEP’s ability to reclaim and maintain the landfills that are currently in the program. If the State is not able to pay for the closure and on-going costs required at a landfill, the expense would revert back to the permittee. Many of the permittees are counties and municipalities which may incur significant financial hardship should the responsibility revert back to them.



    Person submitting Fiscal Note: Jean Sheppard
    Email Address: JEAN.J.SHEPPARD@WV.GOV