FISCAL NOTE
FUND(S):
Various
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill creates a Division of Real Estate within the Department of Administration. It centralizes all real estate, leasing and appraiser duties within one agency and eliminates duplication of services. The bill also transfers the Public Land Corporation from the Division of Natural Resources to the Department of Administration. There is a slight increase in the cost to the State the first year estimated to be $400,000 but will provide a cost savings long term in an estimated amount of anywhere from $1.8 million to $5 million annually. The $400,000 needed to fund the agency is contained in the Governor's proposed budget.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
400,000 |
0 |
-1,800,000 |
| 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):
There is a slight increase in the cost to the State the first year as a result of acquiring office space and establishing employee work loads and salaries. However, the creation of the Division of Real Estate will reduce costs long-term as a result of the following:
Establishment of standardized procedures;
Freeing up of work load in the individual agencies;
Elimination of duplication of work;
Personnel and equipment reductions;
Improved negotiations with tenant brokers;
Providing more consistency in leases and improved terms of leases;
Reduction of operational costs;
Better knowledge of market conditions;
Leveraging of the State’s buying power;
Decrease of total and per-person space allocations;
Encourages co-location of offices;
Eliminates the agency’s responsibility for the landlord relationship.
Memorandum
There is a larger expected savings long-term, however, the full extent of the savings would note be realized until leases are renewed and re-negotiated and co-locating of agencies are accomplished.
Person submitting Fiscal Note: Donna Lipscomb
Email Address: dlipscomb@wvgov.org