Wisconsin Department of Administration
Division of Executive Budget and Finance
Fiscal Estimate - 2023 Session
Original Updated Corrected Supplemental
LRB Number 23-0249/1 Introduction Number SB-0064
Description
creating a hazard mitigation revolving loan program and making an appropriation
Fiscal Effect
State:
No State Fiscal Effect
Indeterminate
Increase Existing
Appropriations
Increase Existing
Revenues
Decrease Existing
Appropriations
Decrease Existing
Revenues
Create New Appropriations
Increase Costs - May be
possible to absorb within
agency's budget
Yes No
Decrease Costs
Local:
No Local Government Costs
Indeterminate
1.Increase Costs 3.Increase Revenue
PermissiveMandatory PermissiveMandatory
2.Decrease Costs 4.Decrease Revenue
PermissiveMandatory PermissiveMandatory
5.Types of Local
Government Units
Affected
Towns VillageCities
CountiesOthers
School
Districts
WTCS
Districts
Fund Sources Affected Affected Ch. 20 Appropriations
GPR FED PRO PRS SEG SEGS
Agency/Prepared By
DMA/ Anna Oehler (608) 242-3155
Authorized Signature
Anna Oehler (608) 242-3155
Date
2/23/2023
Fiscal Estimate Narratives
DMA 2/23/2023
LRB Number 23-0249/1 Introduction Number SB-0064Estimate Type Original
Description
creating a hazard mitigation revolving loan program and making an appropriation
Assumptions Used in Arriving at Fiscal Estimate
This bill authorizes the Department of Military Affairs (DMA), Division of Emergency Management to enter
into an agreement with the Federal Emergency Management Agency (FEMA) to receive federal funding
for the purpose of establishing a hazard mitigation revolving loan program. Additionally, this bill creates a
separate, non-lapsable trust fund to accept money from FEMA under Public Law 116-284. If DMA enters
into an agreement with FEMA, DMA must provide loans to local units of government for hazard mitigation
projects in accordance with the requirements of the funding provided.
DMA does not currently have any revolving loan programs or separate trust funds managed directly by
them. Other revolving loan programs within the State are used as a model for this fiscal estimate where
management responsibilities for this Revolving Loan Program are shared between two State agencies.
For this revolving loan program DMA and Department of Administration (DOA) would be the responsible
parties. DMA would be responsible for the environmental and programmatic management, and DOA
would be responsible for the financial and investment management. Preliminary discussions have
occurred, and DMA and DOA have agreed upon the division of responsibilities and will need to join in a
memorandum of understanding that details their respective roles. Joint responsibilities between DMA and
DOA would include issuing notices of financial assistance commitment to Municipalities and entering into
Financial Assistance Agreements with Municipalities to finance eligible projects. DOA and DMA would
also jointly prepare biennial finance plans which include the estimated hazard mitigation needs of
municipalities in the State, the amount of financial assistance projected to be provided, and the sources
of the funding projected to be provided.
The creation of a new program would incur one-time and ongoing costs. One-time costs are needed to
develop a new program. The new program requires: 1. Development of any loan applications and forms;
2. Development of program guidance materials; 3. Development of loan payment processing procedures
and forms; 4. Establishment of the award process; 5. Establishment of the financial system to manage
the funds, process repayments, etc.; 6.Preparation of outreach materials for the program; 7.
Development of a memorandum of understanding between DOA and DMA; 8. Completion of legal review
of all program and administrative materials.
A total one-time workload increase of approximately 1,500 hours is estimated to perform the above tasks.
With an average salary and fringe cost of $48/hour, one-time costs are estimated to be $77,400 (1,500 x
$48). These one-time tasks would be covered by two LTEs.
Ongoing tasks are required to administer the program and include: 1. Assistance to applicants; 2.
Application review and plan review; 3. Award allocations; 4. Review of required loan documentation; 5.
Processing financial assistance agreements; 6. Compliance reviews; 7. Expense eligibility reviews; 8.
Fund disbursement and 9. Loan closeout procedures and 10: Periodically, review and update guidance
materials and processes.
The recurring workload is dependent on a number of factors, most notably the volume of applications
received on an annual basis. The programmatic tasks will be completed by DMA staff and the financial
tasks will be completed by DOA Capital Finance.
The department is unable to estimate the volume of applications and the fiscal estimate effect of this bill;
however, staffing will be required as the workload for this new program would exceed current staffing
levels and cannot be absorbed within existing resources.
Staffing for DMA is estimated at 3.0 FTE and LTEs for program management and compliance for an
estimated cost of $384,227 annually. Staffing for DOA would require an estimated 2.0 FTE for financial
management estimated at $230,100 annually. Personnel costs are dependent on the actual hire salary and an anticipated hire rate was used for the calculations below. Total estimated personnel cost for 5.0
FTE and LTEs is $614,327. Supply and service costs are anticipated to be $110,000 ($50,000 one-time
and $60,000 ongoing). Total costs, excluding loan amounts, are specified below.
Total Costs
PERSONNEL:$364,000
LTE:$ 71,925
FRINGE:$178,402
S&S One Time:$50,000
S&S Ongoing:$60,000
TOTAL:$724,327
FTE:5.0
FEMA has not yet provided any program guidance on this revolving loan program and fiscal and position
needs may change based on that guidance.
While it is unknown what the loan program will provide financially, for budgetary purposes only, assume
the program (all funds) provided $2,500,000 in loans annually to eligible applicants. The State would
have to provide funds of $250,000 (10% of total loan amount) and the federal amount would be
$2,250,000 (90% of total loan amount). The federal funds would provide management costs (100%
federally funded) at an assumed 5% of the total loan amount awarded, which in this example would be
$125,000. These management costs would not fully cover the staffing costs of the program and would
need to be funded from General Purpose Revenue.
It is unknown how many local units of government would be interested in a revolving loan program so the
department is unable to estimate the local effects of the bill.
Long-Range Fiscal Implications