FISCAL NOTE
Date Requested: January 22, 2020
Time Requested: 01:16 PM |
| Agency: |
Real Estate Division, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2150 |
Introduced |
SB596 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
FUND(S):
Real Estate Division (RED) and Public Land Corporation (PLC)
Sources of Revenue:
General Fund RED – General Revenue; and PLC – Special Revenue
Legislation creates:
Creates New Expense
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.
IV. IMPACT ON COSTS AND REVENUE
A. COST IMPACT:
1. To the extent the proposed changes involve state-owned real property, the requirement is already addressed in W. Va. Code §5A-10-3 and 10.
2. To the extent the proposed changes also involve county-owned real property, the Real Estate Division and the Public Land Corporation have no way to independently determine what property is vacant, unused or underused at the county level. That information is maintained by counties (e.g. county school boards).
3. To identify state-owned real property that is vacant, unused or underused, the Real Estate Division and the Public Land Corporation must necessarily rely on individual reports provided by each state spending unit (169 spending units) in the “Fixed-Assets” Module of wvOASIS (Similar to Fleet Management).
a. The available information regarding properties designated as vacant, unused or underused in wvOASIS is only as good as the reports provided by each of the different state spending units.
b. Pursuant to a recent report from wvOASIS, state spending units are reporting just thirty (30) properties as being vacant, unused or underused (The Real Estate Division believes this number is understated by state spending units).
c. The average cost of an appraisal, as reported by WVDOH Right of Way Division, is between $3,500 to $5,500, depending upon the complexity of each appraisal and the location of each property. This does not include other potential costs, such as title work, surveys and closings.
d. Assuming the number of unused and underused properties listed by agencies in wvOASIS is accurate, appraisals alone for the 30 properties currently listed in wvOASIS as unused or underused are estimated to cost around 105,000 - 165,000, depending upon the complexity of each appraisal.
4. The Public Land Corporation receives no funding and has no employees to accomplish the proposed amendment to W.Va. Code §5A-11-3(a) and (d).
B. COST IMPACT:
The requirement for appraisals would add significant costs to both agencies. There are other associated costs that include, but are not limited to, title work, surveys and closings. But we have no viable way to estimate these additional costs, which will vary depending upon individual circumstances. In addition, the Public Land Corporation has no employees and no significant source of revenue. In order to meet the requirement applicable to the Public Land Corporation, the Corporation would need at least: (A) one full-time real estate specialist estimated to cost $65,000 per year ($50,000 salary and $15,000 benefits); and (B) one full-time administrative support staff estimated to cost $39,000 per year ($30,000 salary and $9,000 benefits). The Public Land Corporation would also need two offices, computers, phones, equipment and furniture.
C. REVENUE IMPACT:
In wvOASIS, state agencies currently report thirty (30) properties as being unused or substantially underused with a total purchase price of $25,273,226. Selling these properties could generate additional revenue, but we have insufficient data for a reliable estimate.
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 |
186,500 |
186,500 |
373,000 |
| Personal Services |
104,000 |
104,000 |
208,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
12,636,613 |
12,636,613 |
0 |
| Other |
82,500 |
82,500 |
165,000 |
| 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.
Estimated Total Cost = Personal Services, plus other incidental costs (e.g., appraisals, title work, surveys, etc.)
Estimated Total Revenue = Assets minus other incidental costs (e.g., appraisals, title work, surveys, etc.), minus personal services
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.
VI. MEMORANDUM SUMMARY
A. To the extent the proposed changes involve state-owned real property, the requirement is already addressed in W. Va. Code §5A-10-3 and 10.
1. Pursuant to W. Va. Code §5A-10-3, the Real Estate Division has the power to assist “all state departments, agencies or institutions in acquiring, leasing and disposing of real property.”
2. Pursuant to W.Va. Code §5A-10-10, the Real Estate Division shall conduct a real property review, as follows:
“(a) At least once every four years, the Real Estate Division shall review the inventory of real property for each state spending unit submitted pursuant to this article [in wvOASIS] to verify the accuracy of the inventory records.
(b) Based on the review of the inventory of real property, the Real Estate Division shall:
(1) Identify any real property owned or leased by the state that is not being used or that is being substantially underused;
(2) Make recommendations to the Governor and the Secretary of the Department of Administration regarding the use of real property, which shall include:
(A) An analysis of the highest and best use to which the real property may legally be placed; and
(B) An analysis of alternative uses of the real property addressing the potential for any other transaction or use that the Real Estate Division determines to be in the best interest of the state; and
(3) Submit to the Governor and the Secretary of the Department of Administration any information pertinent to the evaluation of a potential transaction involving the real property, including:
(A) An evaluation of any proposals received from private parties that would be of significant benefit to the state; and
(B) The market value of such real property.”
B. To the extent the proposed changes also involve county-owned real property, the Real Estate Division and the Public Land Corporation have no way to independently determine what county-owned real property is vacant, unused or underused, unless the counties are required to provide a list of such property.
C. To identify state-owned real property that is vacant, unused or underused, the Real Estate Division and the Public Land Corporation must necessarily rely on individual reports provided by each state spending unit (169 spending units) in the “Fixed-Assets” Module of wvOASIS (Similar to Fleet Management).
1. Pursuant to the provisions of W. Va. Code §5A-10-9(a) and (b), “All real property owned or leased by the state shall be accounted for by the state spending unit that owns, leases or is in the possession of the real property” and “each state spending unit” must maintain a record of each item of real property it owns and/or leases.
2. 148 CSR 19 requires each state spending unit to “annually report its real property inventory in the centralized accounting system maintained by the Enterprise Resource Planning Board [wvOASIS].”
3. The available information regarding which properties are designated as vacant, unused or underused is only as good as the individual reports provided by each of the different spending units in wvOASIS.
4. State agencies are currently reporting thirty (30) properties as being vacant, unused or underused (The Real Estate Division believes this number is understated by spending units).
D. The Public Land Corporation receives no funding and has no employees to accomplish the proposed amendments to W.Va. Code §5A-11-3(a) and (d).
1. By statute, the West Virginia Legislature separated certain limited elements of real property from the West Virginia Division of Natural Resources (“DNR”) Public Land Corporation and established a Public Land Corporation (“Corporation”) as a unit of the Real Estate Division of the Department of Administration. W. Va. Code §5A-11-1(a).
2. Although the Corporation is purportedly “vested with the title of the State of West Virginia in public lands, the title to which now is or may hereafter become vested in the State of West Virginia by reason of any law governing the title of lands of the state,” the statute includes the following notable exception: “those lands for which title is specifically vested by law in other state agencies, institutions and departments shall continue to be vested in such state agencies, institutions and departments.” W. Va. Code §5A-11-1(c) (emphasis added).
3. The statute also specifically excludes: “property transferred [by statute] to and vested in the Division of Natural Resources” and “Public lands acquired by the Division of Forestry.” W. Va. Code §5A-11-1(d)(1) and (2)(emphasis added).
4. Based upon the foregoing exception and exclusions, the property vested in the Public Land Corporation, and reported by the Corporation in wvOASIS, is actually very limited and consists of just a small number of parcels and leases identified and verified by DNR. Importantly, the list of real property managed by the Corporation excludes all real property tracked separately by other state spending units in wvOASIS.
5. The Public Land Corporation receives NO FUNDING and has NO EMPLOYEES to accomplish the proposed amendment to W.Va. Code §5A-11-3(a) and (d), and would need funding for at least one (1) Real Estate Specialist and one (1) Administrative Support staff, as well as, additional offices, computers, equipment, furniture, etc., to accomplish the additional requirements anticipated in the proposed Bill.
Person submitting Fiscal Note: John K. McHugh
Email Address: John.k.mchugh@wv.gov