FISCAL NOTE

Date Requested: February 06, 2018
Time Requested: 11:35 AM
Agency: Fleet Management, WV Office of
CBD Number: Version: Bill Number: Resolution Number:
2059 Amendment - H GO HB4015
CBD Subject: Finance and Administration


FUND(S):

2301

Sources of Revenue:

Special Fund

Legislation creates:

Increases Revenue From Existing Sources, Increases Existing Expenses



Fiscal Note Summary


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


    The amendment codifies the current program of the Fleet Management Office (FMO), and enhances reporting to that agency by agencies that are assigned or own state vehicles. The amendment would require the FMO to promulgate emergency and legislative rules to describe the information that must be reported related to vehicle utilization. The amendment would require agencies to use solutions offered by FMO for fuel and maintenance management, or request a waiver from FMO. The amendment would require agencies that receive a waiver from management solutions to provide data related to fuel and maintenance to the FMO to be aggregated into an annual report, along with other data points related to vehicle utilization. The amendment would require an annual report by the FMO to the Governor and Legislature concerning statewide vehicle utilization. Currently, less than half of vehicles statewide are using either a fuel or maintenance management service offered by FMO. FMO charges a monthly fee for service per vehicle that is enrolled in each of the management services. For those vehicles that do use one or both of the services, utilization data is captured electronically in real time. Of those vehicles that do not use one or both of the services, some are providing information related to utilization, such as periodic odometer readings, and some are not. FMO currently inputs those utilization data points that it does receive from agencies not enrolled in one of the management services into a database. Upon implementation, FMO estimates that roughly 2/3 of vehicles will utilize one or both of the services. The increase in agencies that have vehicles enrolled in one or both of the services will generate an increase in revenue to FMO. However, due to the requirement that agencies assigned or owing state vehicles will be required to provide various data points, and some of those agencies will not enroll in the management services that collect the data automatically, additional labor is necessary to input those data points, provide customer service to vehicle users, and to ensure records integrity. It is anticipated that any increase in expenses will be covered by the anticipated additional revenue.
    
    Additionally duties imposed upon the FMO in the amendment, such as additional training of agency fleet coordinators, compiling the required annual report on the statewide fleet, and relicensing and reregistering of vehicles and data entry related to the requirements for state vehicles to be reregistered and relicensed in FY 2019 are not expected to increase any hard expenses to FMO.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 81,000 0
Personal Services 0 81,000 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 75,114 0


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


    FMO will need one, possibly two, additional employees to administer the proposed amendment. The duties of the additional labor would be to collect and input data points from vehicles that are not enrolled in the management services, compile information necessary for the annual report that is not currently being collected, and to provide customer service assistance to the additional operators of vehicles enrolled in management services, such as providing pin number for fuel cards, answering questions related to maintenance and invoices. The cost, for 1 employee (in the ASA1 job class), would be $35,000 salary x 1.35 benefits = $47,250 annually. The cost for 2 additional employees would be: 1 OAS at a salary of $25,000 x 1.35 = $33,750 and 1 ASA1 at $35,000 (salary) x 1.35 (benefits) = $47,250. This would total $81,000 annually for both.
    
    Currently, the vendor that FMO has secured to provide fleet management services charges a flat rate of $3.50 per vehicle per month for those vehicles that are enrolled in the maintenance management service. There is no charge by the vendor for vehicles only enrolled for fuel maintenance. The FMO charges agencies $6 per month for each service per month to agencies with vehicles enrolled in the services. The vendor, nor FMO, charge a fee for vehicles that do not use any of the services, even though the information for that vehicle such as periodic odometer in some cases, is housed in the database maintained by FMO and provided by the vendor. The number of vehicles in the state‚Äôs fleet as of today is 8,715 (this includes both 1-ton and under, and those vehicles over 1 ton). Today, 4,943 vehicles are not enrolled in at least one of the services. Of that number, FMO anticipates that an additional 1,631 might need services, however some of those are over 1 ton and not subject to the requirements of the amendment. Subtract those over 1-ton, and FMO anticipates 1,391 additional vehicles would enroll in at least one service, either fuel or maintenance management. FMO used an average of $8 fee per vehicle per month to calculate additional revenue, reflecting that not all of the 1,391 will enroll for both services. This results in an additional $6,259.50 per month, after the additional cost of $3.50 per day charged by the vendor is netted out. This results in an estimated additional $75,114 in annual revenue to FMO.
    



Memorandum


    The obligations imposed on the FMO in the amendment are expected to largely be revenue neutral, as the increase in labor needs will be offset by increased revenue from collections from agencies that utilize the services provided by the FMO.
    The fiscal impact described above is for the FMO only, and does not reflect any increased costs to other agencies that use or own state vehicles. Those agencies not currently enrolled in a management service that will enroll in one or both in FY 2019, will see costs increase for the use of those services, as per the amendment.
    



    Person submitting Fiscal Note: Kenny Yoakum
    Email Address: kenny.h.yoakum@wv.gov