FISCAL NOTE

Date Requested: January 17, 2020
Time Requested: 09:09 AM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
1265 Introduced SB181
CBD Subject: Agriculture


FUND(S):

Special Revenue - Senior Farmers Market Nutrition Program Fund

Sources of Revenue:

Special Fund

Legislation creates:

Creates New Expense, Creates New Fund:



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    This bill provides for state funding to supplement annual federal Senior Farmers Market Nutrition Program (SFMNP) funding provided by USDA. As written, the legislation would allow each senior to have $50 in vouchers. Presently, existing USDA funds are used to provide each senior $28 worth of vouchers, with the 2020 SFMNP season starting June 1. By adding $22 to the existing $28 to equal $50, state resources of $369,600 would be required to cover the increase for the 16,800 anticipated participants. Additionally, other fees noted below would be required to cover the increased administrative workload. Information in this fiscal note was developed by the WVDA Agriculture Business Development Division, who is currently responsible for the existing Senior Farmers Market Nutrition Program.



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 55,000 344,600 404,600
Personal Services 5,000 5,000 10,000
Current Expenses 50,000 339,600 394,600
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


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


    The SFMNP voucher season for 2020 begins on June 1. As such, the 2020 season would require an estimated additional $55,000 in funding prior to the end of FY 2020 to cover initial voucher printing, redemption, and staff distribution costs. Most voucher redemption occurs in July and August after the close of the fiscal year. Therefore, additional expenses will be realized in the following FY21 for the 2020 season.
    
    In subsequent years, to maintain an ongoing program at this level, an estimated $404,600 would be required, which includes $394,600 for voucher printing, redemption, and bank fees, as well as $10,000 in personnel time for distribution and other program administration tasks (such as preparing new draft of vouchers and sending to printer, receiving vouchers and sorting for distribution by counties, then distributing to counties). It is also anticipated the increase in funding will increase number of program participants. Should the number of participants served increase to an estimated 22,000, then state funding of up to $510,000 would be required to cover all expenses.



Memorandum


    Vouchers for 2020 must be ordered in March for distribution in May so participants can begin using vouchers in June. If an order is placed after the initial order and not delivered until after the beginning of the start date of June 1, initial participants will not be captured that sign up at the beginning of the program year.
    
    Given the 2020 season voucher books will have been printed by March 2020, an increase in the 2020 program year voucher amount from $28 to $50 would require a second printing of voucher booklets containing 11 vouchers, each with a value of $2. Participants would be issued two separate booklets, one $28 and one $22 by the local agency. Printing costs for a second participant booklet to reach the $50 total would be approximately $13,000 and would increase banking fees by approximately $27,720.This additional printing will exceed the current limit to the banking contract and may require a new bid process.
    
    For 2021, the increase would require either each participate getting two booklets of $25 thereby making them $5 each (which the participants do not prefer) or having a booklet printed with many more pages at an increased printing cost. Additional program funding may likely bring an increase in participants wanting vouchers and would require printing more in 2021. Should the program grow substantially and federal funds not increase, additional state funds would be required.



    Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
    Email Address: sgillispie@wvda.us