FISCAL NOTE

Date Requested: February 08, 2016
Time Requested: 02:28 PM
Agency: Education, Department of
CBD Number: Version: Bill Number: Resolution Number:
1153 Introduced SB373
CBD Subject: Education (K12)


FUND(S):

THIS IS FOR SB373 CS

Sources of Revenue:

Other Fund County Funds

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


-Potential loss of services provided to the counties. Currently, these shared services account for approximately $16.4 million in savings to the counties - A potential loss of cooperative purchasing services provided to the counties. In FY2015, the RESA Association of Educational Purchasing Agencies (AEPA) cooperative purchasing accounted for approximately $3.99 million in savings to the counties



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 3,990,000 4,000,000
2. Estimated Total Revenues 0 20,390,000 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 and/or West Virginia County 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 and/or West Virginia County Personnel laws and Association of Educational Purchasing Agencies (AEPA) Cooperative Purchasing Program bylaws, RESAs may no longer be able to participate in the 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. Additionally, the committee substitute does not indicate the status of the current state appropriation, of $3.5 million, to the RESAs. Will the funding stay with the West Virginia Department of Education? Will the funding continue to flow into the RESAs? If so, will the money go to the RESA fiscal agent for distribution to the RESAs? Will the money go directly to the RESAs? If the RESA line item funding was lost, the counties within each RESA would need to submit approximately $400,000 - $500,000 to the RESAs in order for the RESAs to continue operating at their current funding level.



Memorandum






    Person submitting Fiscal Note: Brenda Freed
    Email Address: bfreed@k12.wv.us