Fiscal Note - SB 0207 - Authorizes Communities to Create An Education Consortium
L.R. NO. 0805-01
BILL NO. SB 207
SUBJECT: Education, Higher: Education Consortium
TYPE: Original
DATE: February 3, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($0 to $3,965,098) ($0 to 76,490,062) ($0 to $44,297,493)
Total Estimated
Net Effect on All
State Funds ($0 to $3,965,098) ($0 to 76,490,062) ($0 to $44,297,493)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government ($0 to $70,450) ($0 to $1,479,450) ($0 to $2,183,950)
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Elementary and Secondary Education, Osage
R-II School District and Linn State Technical College assume the proposal
would have no fiscal impact on the agencies.
Officials from the Coordinating Board For Higher Education (CBHE) assume the
proposal would establish a system under which a community may organize an
academic, vocational and technical education consortium. Each consortium
would consist of a partnership between the Coordinating Board for Higher
Education, Linn State Technical College and a local community college to
provide postsecondary academic, technical and vocational education for a
community. Each consortium could be approved by the CBHE based on the
fulfillment of the following conditions: 1) The community shows it will match
funds for operational expenses; 2) the community provides for free a site for
a building; 3) The CBHE determines the consortium will meet the postsecondary
educational needs of the community; and 4) The consortium s board will
consist of five members: the president of the academic institution of the
consortium, the president of Linn State Technical College, the commissioner
of higher education, and two members of the sponsoring community.
CBHE officials assume that each of the twelve existing consortiums (RTECs)
would reorganize under the terms of the bill in order to qualify for building
construction and operating funds.
CBHE states there are at least 19 communities outside traditional community
college districts that would be likely to form a consortium and request funds
for a building and operating expenses. When the existing RTECs are added to
this number, the total is 31 potential new consortiums and buildings.
However, this may be a low number of potential communities. It is possible
that all 55 area vocational schools would choose to organize as consortiums
to qualify for a building. If so, the potential number of communities plus
the potential RTEC participation increases the number to 67. In the interest
of providing a conservative estimate, this agency is using at least 31 as the
total number of potential new consortiums and buildings.
Under one-time costs, CBHE assumes that a 30,000 square foot building (at
$100 per square foot), furnishings and equipment totaling $400,000, a library
and database totaling $100,000 and accreditation of the technical education
programs offered by the building would total $3,510,000.
Under ongoing costs, CBHE assumes that building staff and faculty (with
fringes at 25 percent), insurance/liability, maintenance, utilities, indirect
costs to community colleges for payroll, copying, record keeping, grade
keeping would total $352,250. The bill assumes each community would provide
an operating funds match. CBHE estimates that match to be 20 percent. When
the 20 percent match is subtracted from the operating costs, the total
becomes $281,800.
CBHE assumes that since this legislation would take effect on August 28,
1997, few communities would be able to organize and request building funds in
FY 1998. As a result, the bulk of the requests would occur in FY 1999 and FY
2000.
CBHE assumes that one building funding request would be funded in FY 1998, 20
buildings, plus ongoing costs for the first building from FY 1998 and the 20
new buildings, would be funded in FY 1999, and 10 new buildings plus ongoing
costs for 10 new and 21 existing buildings, would be funded in FY 2000.
A 3 percent inflation rate is assumed by CBHE for operating costs in fiscal
years 1999, 2000 and ongoing.
These building costs, plus the CBHE staff costs, would total $3,965,098 for
FY 1998, $76,490,062 for FY 1999 and $44,297,493 for FY 2000. The bill would
only require the CBHE to recommend building and operating costs for each
consortium. Therefore, it is theoretically possible that the Governor and
legislature would deny all requests. However, if this bill becomes one of
the main mechanisms of funding postsecondary technical education, it is
likely that at least some of the requests would be funded. Therefore, the
cost estimate is a range for each fiscal year.
The staff that would be necessary for each consortium building constructed
would consist of a Site Coordinator FTE to manage the facility and coordinate
its use by classes and other community groups; two administrative assistants
FTEs to support the work of the site coordinator, as well as faculty and
staff that would be using the facility; a custodian FTE to ensure the
building is kept clean and well maintained; an Admissions/Financial Aid
Representative FTE, who would coordinate financial aid, enrollment of
students and other details; a library assistant FTE to manage the library,
coordinate materials acquisition and checkout; and three FTE faculty, who
would teach classes at the building.
In addition, CBHE would require additional staff to administer the
consortiums organized under this bill. This staff would include one research
associate FTE ($40,000) in academic affairs to help review academic programs
implemented by these new consortiums and to help oversee accreditation
issues; one research FTE ($40,000) in technical education to assist the
assistant commissioner in evaluating consortium proposals, visiting sites and
administering a greatly expanded network of technical education; one research
associate FTE ($40,000) in fiscal affairs to handle the increased fiscal
workload associated with evaluating capital proposals from consortiums and
distribution of operating and other funds to the consortiums; and one
administrative assistant FTE ($21,000) to support the assistant commissioner
and research associate in technical education in performing clerical,
organizational and other administrative tasks.
The Oversight Division has included the match for operating costs of the
local education consortium in the fiscal impact for local government. Costs
included are $70,450 per building per year, based on CBHE's estimate of
$352,250 total cost per building, minus the state portion of $281,800,
resulting in a local match of $70,450. Based on CBHE's estimate, one
building would be in operation in FY 1998 ($70,450), twenty-one buildings in
FY 1999 ($70,450 x 21 = $1,479,450), and thirty-one buildings in FY 2000
($$70,450 x 31 = $2,183,950).
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Cost-Coordinating Board For Higher Education
Personal Service ($120,389) ($148,138) ($151,842)
Fringe Benefits (34,347) (42,264) (43,321)
Expense and Equipment (18,562) (4,326) (4,456)
Building Construction/Operations (3,791,800) (76,295,334) (44,097,874)
Total Cost-CBHE ($0 to ($0 to ($0 to
$3,965,098) $76,490,062) $44,297,493)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
Cost-Consortium
Match for operating expenses ($0 to ($0 to ($0 to
$70,450) $1,479,450) $2,183,950)
FISCAL IMPACT - Small Business
Small businesses could be fiscally impacted as a result of this proposal from
the potential new building construction. Small businesses could benefit from
the education provided by the consortium.
DESCRIPTION
The proposal would allow a community to establish a community partnership
council to plan and propose creation of an academic, vocational and technical
education consortium for the community. The Coordinating Board could approve
the consortium under certain conditions. The Coordinating Board would
recommend to the General Assembly appropriation of sufficient funds for
construction of a facility and the state's share of operational expenses for
each approved consortium.
This legislation is not federally mandated and would not duplicate any other
program. The legislation could require additional capital improvements or
rental space.
SOURCES OF INFORMATION
Coordinating Board For Higher Education
Department of Elementary and Secondary Education
Linn State Technical College
Osage R-II School District
This Fiscal Note is not an official copy and should not be quoted or cited.