Fiscal Note - SJR 011 - Authorizes Gen. Obligation Bonds For Rural Water, Sewer and Stormwater Control in 1st Cl. Charter Counties
L.R. NO. 1370-07
BILL NO. Perfected SS for SCS for SJR 11
SUBJECT: Constitutional Amendment: Bonds
TYPE: Original
DATE: April 21, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue $0 ($375,000) $0
Total Estimated
Net Effect on All
State Funds $0 ($375,000) $0
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
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 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Since parts of this proposal would authorize issuance of up to $325,000,000
of certain bonds, Oversight assumes those parts would not have fiscal impact
until enabling legislation were adopted.
Officials of the Department of Natural Resources noted that the original $275
million Pollution Control Bond allocation included:
$225 million to provide state match for federal funds for waste
water treatment facilities grants or loans
$25 million for storm water construction
$25 million to support rural water and sewer construction
Section 37(e):
All the storm water and rural water and sewer funds have been spent. Of the
$225 million for waste water, there is $125 million remaining to fund waste
water treatment facilities grants or loans. The proposed amendment to the
constitution would increase the maximum amount that could be allocated for
rural water and sewer construction projects to $50 million. Since the limit
on the amount appropriated for storm water control has been removed, the
remaining $100 million may be appropriated for storm water control or for
waste water treatment projects in any combination.
The amendment to the constitution, in itself, does not create an additional
workload for the department, but provides for continuation of rural water and
sewer grant projects administered in accordance with 640.600-.620 RSMo and
for storm water grant projects administered in accordance with 644.031 RSMo.
It should be noted that the department has never received staff for the
administration of the storm water or rural water and sewer grant programs.
If the amendment to the constitution is approved, the department would
request an engineer and an environmental specialist to complete the
activities supported by these additional bond authorizations for rural water
and sewer.
It should be noted H.B. 88 passed during the 1995 legislative session revised
the distribution of the storm water funds from first class counties and the
cities of Kansas City and St. Louis to make all cities and counties eligible.
The department requested 7 FTE to implement H.B. 88, assuming $2.5 million
per year and that only 20% (approximately 200) of the eligible 1,042
applicants (928 incorporated cities and 114 counties) would apply for the
funding each year; however, the department has not received the
appropriations for these additional resources. The department proposes to
use the staff requested for the storm water revolving loan program (Section
37(g) of this fiscal note) to complete these activities.
Section 37(g)
This amendment to the constitution would provide an additional funding source
for storm water control projects. The funds will be distributed only to
first class counties and any city not within a county.
The department currently has a storm water control grant program; however,
all the storm water funds have been appropriated. It should also be noted
that the department never received staff for the administration of the storm
water control grant program.
This amendment to the constitution would create a $200 million storm water
control revolving loan program. A revolving loan program requires more
program administration than the current grant program. The department
understands this amendment to the constitution provides additional funding
for the programs specified in the bill and does not authorize additional
powers or authorities. However, to carry out its duties with the expanded
funding authorized in this amendment to the constitution, the department
would require additional resources.
There are fourteen first class counties and the City of St. Louis that are
eligible to submit applications for this program. The department assumes
that all eligible applicants will participate in the program. The department
assumes the program staff would be phased in as awareness and understanding
of the program increases, as public participation increases so would the
number of applications/projects received by the department.
The department assumes that an average storm water control project would cost
approximately $250,000. During the first year the department assumes that
approximately 20 applications/projects would be received resulting in loans
totalling approximately $5 million. The department assumes the number of
projects in subsequent years would increase to approximately 80 per year,
resulting in approximately $20 million annually in loans.
The department would request 8 FTE to implement the storm water revolving
loan program; which includes establishing the program, reviewing the project
s plans and specifications, conducting inspections, preparing and reviewing
the loan structures, and preparing the necessary financial reports.
The general election is scheduled for November, 1998 (FY 99), so the earliest
the department would request staff would be for FY 00. The department plans
to request an Environmental Specialist IV to establish the framework and
guidelines for the revolving loan program. As the program expands the
department would request the necessary technical, financial and support staff
necessary to fully implement the program. The remainder of the FTE that
would be requested by the department are outside of the fiscal note reporting
period; however, the department has shown the annualized costs of the total
FTE.
It should be noted, the proposed amendment to the constitution states that
loans provided by the department may include administration fees. Since the
administration fees associated with the loans will not be collected until the
loan repayments start, the department assumes general revenue funds will be
used to fund department staff during the initial years.
Section 37(h)
This amendment to the constitution provides funding for an Environmental
Infrastructure Bank which provides for planning, financing, and constructing
environmental infrastructure improvements by any county, municipality, other
political subdivision or other entities making such improvements.
The Environmental Improvement and Energy Resources Authority (EIERA) within
the department is responsible for establishing, operating, and administering
the Missouri Environmental Infrastructure Bank.
It should be noted the EIERA is a quasi-governmental agency and its
administrative costs are not funded by state appropriations; therefore, the
administrative costs are not reported on this fiscal note. The EIERA assumes
that its administrative costs would be recovered through the repayment of the
loans and interest from the "Banks" borrowers, thereby adding no additional
fiscal impact to the state.
This bill will result in funding for an Environmental Infrastructure Bank
which provides for planning, financing, and constructing environmental
infrastructure improvements by any county, municipality, other political
subdivision or other entities making such improvements. This funding may
increase the number of construction and operating permit reviews or
modifications to existing permits, inspections, and compliance reviews
conducted by the department. Overall, the amendment to the constitution will
indirectly increase the Department s workload.
Section 37(i)
This part of the amendment to the constitution provides an additional funding
source for rural water and sewer projects. The funds provide for planning,
financing, and constructing of these improvements by any county,
municipality, sewer district, water district, or any combination of the same.
The department proposes to use two of the staff requested due to Section
37(e) of this fiscal note to complete these activities.
Total staff request would be:
Environmental Engineer II (4.0)
Responsible for reviewing plans and specifications for storm water facilities
and rural sewer facilities and review plans and specifications for rural
water facilities. Conduct final inspections.
Environmental Specialist IV (1.0)
Responsible for reviewing storm water applications and project
administration. In addition, responsible for preparing presentations to the
Clean Water Commission for their review and acceptance or denial of storm
water applications.
Management Analysis Specialist II (2.0)
Provide project coordination for storm water loan programs. Review payment
requests, review financial capability.
Accountant II (1.0)
Provide accounting support, auditing, payment processing, fund management for
storm water loan programs and rural water and sewer grant payments. Prepare
projections/fund balances
Environmental Specialist II (1.0)
Provide project coordination for rural water and sewer grant program.
Clerk Typist II (1.0)
Provide support to storm water loan program and rural sewer grant program.
The department would request the Environmental Specialist IV, the
Environmental Specialist II and one Environmental Engineer II in FY 2000. The
costs, including fringe benefits and equipment and expenses, would be
$181,800.
The other persons would be requested as more projects use revolving fund
monies. Total annualized costs would be $513,631. (DNR officials anticipate
increasing use of the revolving fund until FY 2004 or 2005, but can not
predict the rate at which new projects would start.)
Oversight assumes that until the General Assembly passes bills to issue bonds
authorized by this proposal there will be no money in revolving funds and,
therefore, no administrative costs for any agency.
(Note: Total costs to retire $300,000,000 worth of bonds, assuming the first
bonds would be issued during FY 00, have level debt service, pay interest of
8.5%, would be twenty- five year bonds, and assuming twelve $25,000,000 bond
issues over eight years beginning in FY 00 would be approximately
$730,000,000.)
Advertisement costs for the proposal would be $3,990 per newspaper column
inch for three publications of the text of the proposal, the introduction,
title, fiscal note summary, and affidavit. The proposal would be on the
ballot for the November 1998 general election.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
GENERAL REVENUE FUND
Cost to General Revenue Fund
Secretary of State
Newspaper Advertisements ($375,000)
NET EFFECT ON
GENERAL REVENUE FUND $0 ($375,000) $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
$0 $0 $0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would:
1) authorize $200,000,000 of general obligation bonds for storm water
control in first class counties and St. Louis City,
2) establish "The Storm Water Revolving Fund" as a perpetual fund to provide
grants if monies would be appropriated and loans at or below market rates for
storm water control projects,
3) provide that the aggregate amount of grants from the Storm water
Revolving Fund be limited to $20,000,000, that grants provide no more than
10% of the cost of a project and grants would be provided in accordance with
affordability criteria developed by the Clean Water Commission,
4) authorize $100,000,000 of general obligation bonds to start and operate
an Environmental Infrastructure Bank under control of the Environmental
Improvement and Energy Resources Authority,
5) establish "The Environmental Infrastructure Bank Revolving Fund" to
receive monies received by the Infrastructure Bank and finance environmental
infrastructure projects at or below market rates,
6) raise the aggregate limit on bond debt for rural water and sewer grants
to $50,000,000 (current provisions limit aggregate bond debt to a maximum of
$25,000,000)
7) state that the repeal and re-enactment of section 37(e) of article III
should not be interpreted to authorize any additional bonded indebtedness
under terms of that section, and
8) amend article VI of the Missouri Constitution by adding a section putting
all metropolitan districts established by vote of St. Louis City and County
for functional administration of services common to the area (currently, the
Metropolitan Sewer District) under control of state law.
The General Assembly could not appropriate more than $25,000,000 per year
from bond sale proceeds for storm water control projects.
The General Assembly would be authorized to pass laws needed to carry out the
provisions of this proposal.
This legislation is not federally mandated, would not duplicate any other
program, would not require additional capital improvements or rental space,
and would not affect total state revenue.
SOURCES OF INFORMATION
Office of Administration - Division of Accounting
Department of Natural Resources
This Fiscal Note is not an official copy and should not be quoted or cited.