FISCAL NOTE

Date Requested: February 11, 2016
Time Requested: 02:24 PM
Agency: State Board of Education
CBD Number: Version: Bill Number: Resolution Number:
1153 Introduced SB373
CBD Subject: Education (K12)


FUND(S):



Sources of Revenue:

Other Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


Granting full control of the Board of Education Regional Education Service Agencies to the WV State Superintendent of Schools including selection of executive directors and support staff as well as organization and operations of Regional Education Service Agencies.



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 -16,400,000 -16,400,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 -4,000,000 -4,000,000
2. Estimated Total Revenues 0 -20,400,000 -20,400,000


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


This bill leaves uncertain many aspects of Regional Education Service Agencies (RESA) management; therefore, the fiscal impact is difficult to gauge. This bill does not identify the employment classification RESA employees will hold. Will they be employees of the West Virginia Department of Education? Will they be considered employees of a Local Education Agencies (LEA)? Will a single LEA fiscal agent absorb these employees? The answers to these and similar questions will determine the plausibility of the potential fiscal impacts outlined below. Under the proposed model, due to West Virginia State Personnel laws, RESAs may no longer be able to provide shared services to counties. Shared services are utilized when the need for a position exists (i.e. Occupational Therapist) in multiple counties, but only on a part-time basis in each county. In such a circumstance, the RESA would hire this employee and the counties would share the expenses (salary and benefits) of that employee. Because counties are able to share one employee, as opposed to each county hiring its own employee to provide a service, it creates a savings for every county using the RESA employee to provide the service. Currently, shared services produce approximately $16.4 million in savings annually. Under this model, due to West Virginia State Purchasing laws, RESAs may no longer be able to participate in the Association of Educational Purchasing Agencies (AEPA) Cooperative Purchasing program. The AEPA Cooperative Purchasing program offers pre-bid, low-cost products to the counties. The AEPA's Cooperative Purchasing program offers everything from janitorial supplies to field turf. From FY2012 - FY2014, participating counties saved approximately $4.2 million by using the AEPA Cooperative Purchasing Program. By FY2015, counties not participating in the program witnessed the benefits garnered by the participating counties and participation among all counties increased. In FY2015, the AEPA Cooperative Purchasing program saved counties approximately $3.99 million in cooperative products purchased. For the purpose of this fiscal note, we have estimated $4 million in savings for FY2016; however, it is entirely possible that savings could top $5 million for FY2016. Removing county control, via the Regional Council, would create an issue where some county superintendents may no longer use RESAs to provide services. Currently, counties contribute approximately $13.9 million to the RESAs' budgets from services purchased directly from the RESAs.



Memorandum






    Person submitting Fiscal Note: Donna Peduto
    Email Address: dpeduto@gmail.com