FISCAL NOTE
Date Requested: February 09, 2016
Time Requested: 12:40 PM |
| Agency: |
Agriculture |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1158 |
Introduced |
HB4351 |
|
|---|
| CBD Subject: |
Agriculture, Education (K12) |
|---|
|
FUND(S):
New Agriculture Fund Numbers T.B.D.
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB 4351 transfers responsibility and ownership of the Cedar Lakes Camp and Conference Center, including the location’s physical facilities and property, existing operating funds, and employees, to the Department of Agriculture. It is certain that the estimate to transition will result in additional costs in the short-term, but several variables will affect the timing and exact amount of the increase.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
Some of the factors affecting expenses for the Department of Agriculture’s initial and subsequent years of ownership include the number, composition and current salary of staff during and after the transition (the number of full-time versus temporary positions, cost of fringe benefits, leave accruals of full-time employees, and/or outstanding unemployment claims, for example), current and future utilization of facilities, and the condition of facilities and equipment.
Also, in order to effectively manage the property and maximize future revenue from operations, General Revenue funding must be made available for personnel, repairs and renovations. A previous evaluation of the property identified approximately $3,000,000 in facility and infrastructure updates. Many of these items have been desperately needed for some time but delayed due to lack of capital improvement funding; additional delays will risk further degradation of facilities to the point of being unusable (thereby reducing short- or long-term operational revenue opportunities). In addition to the known, existing issues, a follow-up evaluation is needed in order to assess future renovations and repairs that must be completed within the next five (5) years, which will increase the future amounts of capital funding appropriations from General Revenue required.
While HB 4351 states that all operating funds related to these facilities will be transferred, the total amount of funds currently available for operations are substantially insufficient and must be supplemented with additional General Revenue appropriations to achieve the transition.
Memorandum
As written, HB 4351’s effective date of July 1, 2016, does not allow the Department of Agriculture sufficient time to properly evaluate the property, staff, and operations and develop a transition plan. Sufficient time must be taken not only to plan for the transition, but also to begin working on the transitional steps ahead of the effective date to ensure uninterrupted operations for both the staff and public. With the necessary funding appropriated to address the aforementioned repairs and maintenance issues, additional time will be needed to prioritize and plan various projects. Because it is known that the existing funding is insufficient to continue current operations, the Department of Agriculture will need a sufficient period of time, until January 1, 2017, to conduct an evaluation of the entity to determine personnel requirements and the viability of continuing operations.
Additionally, it must be understood that when the personnel are transferred to the Department of Agriculture, they will become will and pleasure employees of a Constitutional Officer of the State and will be subject to the administrative policies of the Department. According to salary information received only yesterday that was prepared for an anticipated transfer to a non-profit, it is readily apparent that many salaries of current personnel must be adjusted to fit within the Department of Agriculture’s pay structure to maintain internal pay equity with comparable positions in the Department. To make such a transfer without considering internal equity impact would be irresponsible and cause undue disruption throughout the Department’s operations.
The Department of Agriculture cannot estimate any costs incurred by the Consolidated Public Retirement Board to transition employees between retirement systems as required by this legislation. HB 4351 specifies that employees be transitioned to the Public Employees Retirement System on July 1, 2016, but the Consolidated Public Retirement Board is given until December 30, 2016 to complete the transfer of existing assets and service credit between plans. It is unknown if this difference in dates will cause any difficulties in properly accounting for employee retirement contributions made between July 1, 2016 and the completion of the transfer, or if employees who retire prior to the transfer being completed will have any difficulty in accessing benefits.
Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
Email Address: sgillispie@wvda.us