FISCAL NOTE



FUND(S):

SPECIAL REVENUE

Sources of Revenue:

Other Fund SPECIAL REVENUE

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


It appears the passage of this bill would not allow the West Virginia Regional Jail and Correctional Facility Authority to continue to use the funds in excess of the allotted twenty-five percent reserve as a part of the budgeted working capital. A positive impact is realized when the excess funds are used as budget working capital, in that, it further results in a lower per diem rate than if the excess funds were not used as budgeted working capital. Therefore, the FY2010 per diem rate would have to be set at $56.44 per day instead of $48.25 per day.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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 -11,492,119 0


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


Balance @ 6/30/08 41,699,954 Less: Coverage required by bond indenture (25% of debt service payment due 7/1/09) $2,047,451.75 (Calculation baced on $8,870,113 Debt Service payment + 25% coverage required ($2,217,528= $11,087,642 less projected court fees of $9,040,190 (2,139,836) Less: Needed working capital that was from FY 2007 that was used to off-set the FY 2009 per-diem calculation (8,393,424) Less: 25% reserve baced on FY 2008 average expense $67,534,038) X 25% annual expenses (19,674,574) Total Funds Available for Distribution ($11,492,119)



Memorandum


Under 31-20-10 (d) the phrase "If the authority determines that moneys held in these funds are in excess of twenty-five percent of the amount needed to carry out the purposes of this article." does not clarify whether "25% of the amount needed to carry out the purposes of this article is the same as "three months of anticipated operational expenses" as the operational reserve fund is referred to in the Title 94 Legislative Rule 97-4-1 section 2.2. For purposes of this note we are assuming that 25% of annual expenses are the same as three months of anticipated operational expenses. Under 31-20-10 (d) the new language calls for the Authority to "take any action that is necessary to release the excess and transfer it to the contributing local government's general fund." This does not clarify whether the state of West Virginia (Division Of Corrections) is included in any distribution of funds. In FY 2008 the Division of Corrections contributed 36% of the revenue collections.



    Person submitting Fiscal Note: Mark R. Landin
    Email Address: mlandin@wvrja.state.wv.us