Subject: Environmental Protection; Natural Resources Dept.; Water Resources and Water Districts

ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED	FY 2008	FY 2009	FY 2010
General Revenue	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)

Total Estimated Net Effect on General Revenue Fund	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)

ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED	FY 2008	FY 2009	FY 2010


Total Estimated Net Effect on Other State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2008	FY 2009	FY 2010


Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)
FUND AFFECTED	FY 2008	FY 2009	FY 2010
General Revenue	7	7	7

Total Estimated Net Effect on FTE	7	7	7

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2008	FY 2009	FY 2010
Local Government	$0	$0	$0

Officials from the Department of Natural Resources (DNR) assume the inspection fee for dams not licensed and operated under the Federal Power Act would be assessed at $450 per dam per year for high hazard dams and $250 per dam per year for significant hazard dams. The department would be responsible for reviewing applications for new and high hazard or significant hazard dams constructed after August 28, 2007 and not licensed or operated under the Federal Power Act, and issuing permit application fees of $3,000 or one percent of the actual total cost for construction of the dam, whichever is lower.

Since this legislation does not indicate a specific fund for the receipt of the fees established by the council, the department assumed the receipts would be deposited into the general revenue fund and payments for the resources used to carry out the legislation would also be from the general revenue fund.

Known revenue calculation: The department determined there were 1,200 high hazard dams that are not agricultural and would be assessed an annual fee of $450. There are 350 significant hazard dams that are not agricultural and would be assessed an annual fee of $250. Therefore, inspection revenue would total $627,500 in the first year of implementation.

It is unknown how many new high hazard or significant hazard dams would be constructed after August 28, 2007. It is also unknown whether the fee for those dams would be $3,000 or 1% of the actual cost for construction. The fee charged for those newly constructed dams would be whichever amount is less. Revenue from this portion of the proposal is unknown.

The department assumes the council would establish fees for dams operated and licensed under the Federal Power Act in an amount to cover existing and new resources necessary to carry out the dam safety inspections. There are currently 3 dams and reservoirs that would be inspected annually under the proposed legislation.

The department determined there are 1,200 high hazard dams that are not agricultural and that would be inspected every two years (1,200/2=600 dams/year). There are 350 significant hazard dams that would be inspected once every two years (350 dams/2 years = 175 dams/year). Therefore, the department will inspect approximately 775 dams per year (600 high hazard dams plus 175 significant hazard dams total 775 dams/year).

Based upon the estimated existing dams and reservoirs, the department has determined it will require 6 FTE, in addition to the existing 4.5 FTE, to perform the dam inspections. Additionally, one program administrative assistant would be required to maintain the database, issue billings and deposit fees.

The department estimates that a two-man inspection crew can inspect 150 dams per year. Therefore five crews will be required to inspect 775 dams per year (775 dams / 150 dams/crew = 5). The department currently has two dam inspection crews. Therefore, the department estimates an additional 6 FTE will be required to implement the inspection portion of the proposed legislation. Five crews, consisting of civil engineers, which are registered professional engineers (3 crews X 2 fte/crew = 6 FTE).

Costs for inspections and exemptions are estimated at $480,558 in personal services, including fringe, and $195,374 in expense and equipment, including $127,124 in one-time expenditures. Administrative costs would also be incurred as a result of the additional resources. Annual inspection fees totaling approximately $627,500 for known, existing high and significant hazard dams and reservoirs would offset costs. Revenue from construction applications is not known.

Oversight assumes the cost of overseeing the Taum Sauk dam twenty four hours a day by an operator will have unknown costs exceeding $100,000.

The Department of Natural Resources did not respond to our request for a fiscal impact for the House Amendments.

No direct fiscal impact to small businesses would be expected as a result of this proposal.

The proposed legislation modifies laws pertaining to dam and reservoir safety and could have an effect on General Revenue.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

FISCAL IMPACT - State Government	FY 2008 (10 Mo.)	FY 2009	FY 2010
GENERAL REVENUE

Revenue - Department of Natural Resources
Fees for New Construction Applications	Unknown	Unknown	Unknown
Inspection Fees	$627,500	$627,500	$627,500

Cost - Department of Natural Resources
Salaries	($330,826)	($408,901)	($421,168)
Fringe Benefits	($149,732)	($185,069)	($190,621)
Equipment & Expense	($195,374)	($84,357)	($86,888)

Cost - Department of Natural Resources
Overseeing Taum Sauk Dam 24 hrs. per day	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)


ESTIMATED NET EFFECT ON GENERAL REVENUE	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)	(Unknown Greater Than $100,000)

Estimated Net FTE Change for General Revenue	7	7	7