FISCAL NOTE
Date Requested: February 21, 2022
Time Requested: 02:40 PM |
| Agency: |
Highways, Division of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2901 |
Introduced |
SB708 |
|
|---|
| CBD Subject: |
Utilities |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Expense, Increases Existing Expenses
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.
Unfortunately, the precise impact of this bill is simply unascertainable at this time. The DOH anticipates that the impact will have a very substantial increase in costs paid out of the State Road Fund and accordingly decrease the amount of funds available to DOH to fund infrastructure projects.
At this time, DOH believes that this bill would primarily implicate funding from the federal Infrastructure Investment & Jobs Act (IIJA). The increased funding to DOH from the federal government under the IIJA includes increased funds through the highway formula that apportions these funds across the states (est. $3 billion over 5 years or $600 million/year to WV) as well as additional money specifically for bridge infrastructure (est. $506 million over 5 years). DOH would note that the IIJA provides specific increased funding for certain utilities unrelated to road and bridge work: broadband (at least $100 million); water ($142 million); and wastewater ($223 million).
The DOH has not yet identified what projects will be completed over the next 5 years with IIJA funds, much less what utility relocations will be required in each one. As such, it is impossible to predict or estimate increased cost to the DOH under this bill.
Utility companies are not charged to occupy DOH right of way. Generally speaking, if a DOH project requires utility relocation, the utility bears the cost of that relocation unless the (i) utility had “prior rights,” i.e. the utility was located there before the DOH acquired its right of way, or (ii) the DOH’s project affects the utility’s property rights not located on the DOH right of way. For DOH projects in a given year, there is no reliable estimate as to how many projects may or may not require the DOH to pay for relocations—it is completely random and depends on the location and nature of the projects in a given year. Also, the DOH does not track how much money the various utilities expend in a given year for relocations that they perform themselves. In an effort to be responsive and helpful, some baseline relocation estimate figures utilized by the DOH are provided in section 3.
That said, approximately 95% of DOH construction projects (not counting resurfacing-only projects) involve utility facilities that need to be relocated. Requiring DOH to pay 50% of all utility relocations across-the-board over the next 5 years will require significant additional expense of state and federal funds that the DOH would not be required to pay in many circumstances today.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
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):
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 DOH has not yet identified what projects will be completed over the next 5 years with IIJA funds, much less what utility relocations will be required in each one. As such, it is impossible to predict or estimate increased cost to the DOH under this bill.
For Example:
Bridge replacement on a WV Route estimated construction $2.5M
Assumed utility impacts and estimates:
Electric (4 poles & 200' line) - $120,000
Phone (200' line) - $50,000
Cable (200' line) - $50,000
Gas (6" line for 200') - $120,000
Water (6" line for 200') - $120,000
Sewer (10" line for 200') - $150,000
Total relocation costs - $610,000
DOH responsible for 50% - $305,000
Total Project Costs $2,805,000 (construction & utility relocation) is at least a 13% increase, assuming
that all utilities are located 100% on DOH R/W. If utilities have prior rights, this costs would be even more.
This just an example of potential costs. Any projects that hit electric transmission lines or gas transmission
lines will be significantly more. The last transmission tower that had to be relocated for a DOH project cost
nearly $2M to move
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.
Person submitting Fiscal Note: Lorrie Hodges
Email Address: lorrie.a.hodges@wv.gov