Honorable Vicki Truitt, Chair, House Committee on Pensions & Investments
John S. O'Brien, Director, Legislative Budget Board
HB2365 by Truitt (Relating to financial accounting and reporting for this state and political subdivisions of this state.), As Introduced
No immediate significant fiscal implication to units of local government is anticipated.
The bill's language would prohibit any political subdivision from accounting for OPEBs per the methodology proposed by GASB. As per the above analysis, this would mean their financial statements would receive adverse opinions from outside auditors and their bond ratings could be affected, which would have a significant long-term fiscal impact.
Some local governments have said they would want to provide the GASB OPEB liability estimates and this bill would require them to perform additional analyses to account for the state requirements as well.
Montgomery County reported that implementing the provisions of the bill would require them to hire an actuary to determine future liability at an initial cost of $50,000 in fiscal year 2008 and in every even-numbered fiscal year afterwards.
The city of Carrollton reported costs from $0 to $530,000, depending on interpretations of the provisions of the bill.
The city of Sherman reported costs of $19,740 in fiscal year 2008 for new staff and additional audit fees. These costs would rise to $24,475 by fiscal year 2012. The additional auditing fees could rise if the city is required to have two sets of audited books, one that meets state requirements and one that meets national requirements.
The cities of Houston and Waco and the counties of Denton and El Paso reported that implementing the provisions of the bill would have no fiscal impact on their budgets.
304 Comptroller of Public Accounts, 323 Teacher Retirement System, 327 Employees Retirement System, 352 Bond Review Board
JOB, KJG, SD, WM