1/16/2015 7:58:15 AM Harshman: Good morning. CREG update Richards: Overly optimistic from October, 2014. Met January 6 to revise, 8 components to traditional funds, 1 for education. Traditional funds reduction, shortfall $222M. Severance tax, federal mineral royalties downward, increases in sales and use tax and investment income. Reduction in education profile also, $311M less income. Alex Kean new chairman, Sandy Urbanek and Diana Walter new members, less experience. $39/barrel for WY oil, natural gas $3.27; reduction in both for estimated price. Oil production and price forecasts. Slow growth to 2020. Natural gas prices and production revised down through 2020. Coal production increased through 2020. Sales tax not affected yet by downward mineral production and income, but will within 18 months. Investment income up in FY 2015. Capital gains information provided; not included in forecasts. Assessed evaluation resulted in $300M loss, are projected to be more in coming years. Stubson: When do realized capital gains show up on profile? Richards: June 30, July 1 distributed. $60M to SIPA account, balance will remain in general fund. Ross: School numbers again please Richards: $57.9M decrease, mainly decreased property assessments and federal income FY15-16. Richards: Goldenrod, explained 3 columns. Explained supplemental requests and cash from general fund and SIPA. $324M shortfall. Richards: $20M from corrections, still short $5M reversion Wasserburger: What is reversion? Richards: Agency appropriations not expended during specific time frame. Hastert: Reversions from Health? Richards: Expected, but possibly very small. Richards: General fund profile. Budget Reserve, Legislative Stabilization Reserve Account and Strategic Investments and Projects Account. Connolly: List another $184M? Richards: Transfers done for cash flow purposes. State’s revenues generated in late calendar year. Richards: SIPA account zeroed out. Richards: School foundation program, school capital construction account, PLF holding account. If excess funds of more than $100M, can be transferred to school capcon account. Excess revenues in all 3 accounts, so followed from one account to the next. However, lost revenues and adjustments to enrollment. Infusion of cash from PLF holding account to school foundation program. 1/16/2015 8:51:57 AM Harshman Greear: push 2 M Harshman; Gov increase, one tip so over 475 Perkins: tip will only be 2 M/ Harshman: yes, under our session law, but that shows the gov recs 1/16/2015 8:53:14 AM Richards: all revs and exps same exc. Gov rec..two places due to recapture and repayment. Recapture decline from ECA – 3.7 M. third line 2015 gov rec, external cost adjustment 11.3 so 11.3 plus 3.7 = 15 M. Some school districts have the funds to pay. Harshman: Dec meeting, increase ECA. Initial of 8 M, gov about 15 M so 7 M difference. Wasserburger: are you predicting a shortfall in school foundation fund? Richards: a lot of unknowns. Recalibration this summer. Status quo of no increases. Decline of revenue of 311 M for 17-18 biennium. Oct Creg roughly matched…school capitol construction under water next biennium. Coal lease drop over biennium. Process of long range charts for school foundation program. I anticipate a shortfall at the status quo expenditures. Ross: If no ECA, what does this profile for the schools look like? Richards: school foundation program would have a 6 M excess that would spill into capital construction to add to 11m excess there. 17 M Stubson: gov office of 220M available for spending. What is breakdown, where is it coming from? What is the impact of that amount on the updated CREG. Richards : make comments at the end Connolly: school foundation adjustment – creg based on assessed valuation. Is the assessed valuation that volatile regularly? Richards: 12 M difference, very little of that difference, about 4 M in assessed value. Million had to do with change in enrollments. Some districts decline and are held harmless for 3 years. Connolly” ? Richards: not included in the 19 M line 1/16/2015 9:01:28 AM Richards: page 5, only item with change worth mention is PWMTF acct. Max is 75% of the 5% return of the market value of the pmft over 5 years . Added a note for disclosure. Perkins: date of valuation – end of fiscal year? Richards: the first day of the next fiscal year = July 1 Harshman Richards: note about interfund loan, capitol building RR acct. 19M, will reduce over time. Max loan amount will decline over time. If legislature appropriates more funds, that amount goes down. Leaves 71 M of unobligated balance. Stubson: Strategy of 37.5 M appropriations. Every time we make an appropriation the authorized amount of the PMT fund goes down? Richards: Correct 1/16/2015 9:05:05 AM Harshman: I do not like the word loan. Had to do that. The reserve acct will be huge to maintain our commitment. Need a reserve acct to have a trust fund. It is an obligation. 1/16/2015 9:05:52 AM Richards: last page of profile includes the 3 water accts and the Gillette water pipeline. Under acct 2, gov rec of transfer of 18.6 M, now included on page 6. Gillette Madison project illustrates absence of AML funds (Dept. of interior denied Wyo. Request.) Perkins: gillete MP – not actually a gov rec? Richards: not a Gov rec which is why it is a neg. if recommended would have added rev, would have reduced amount on front page Perkins: PLF holding acct has 2 M excess. What acct would that sweep into? Nicholas: sweeps at end of biennium to common school acct corpus, a permanent fund Burns: GMPA will disappear from profile at some point. Total amount spent? Richards: 94 M, plan totaling 217 M. ..appropriated x, Campbell county elected not to take loan or if they did, it has been paid back, Campbell county will pay 1/3. Will drop off Burns: when will it drop off Richards: .. Harshman: 145 plus the 12.4? Richards: total will be 145. You have appropriated it, Nicholas: how do we monitor if they spend their money first? Richards: Wyoming water commission is tasked with identifying..reconciliation done by them Nicholas: may we have the reconciliation Richards: yes 1/16/2015 9:11:17 AM Richards: Summary: revenues adjusted lower, two types of appropriations, for spending and for savings. Aligning spending and revenues will take time. Options: Cash on hand, reversions from SIPA acct, used in profile, transfer money from other accts. Agency accts have some money, may deny requests, may revisit previous budgets, intercept fund flows. Gov may be considering 140M in reversions. I do not know. There are funds in PMTF. I do not know combination. Perhaps transfers or previous appropriations not spent. I hesitate to speak for him. You can reach that number in a variety of ways.