Virginia Law

A. Policy statement. The Virginia Federal Property Agency is classified as a Special Fund activity and the Agency Manager is responsible for the management of the fund. There are no appropriations and service charges are the principle source of revenue to cover the costs of operation. Sales/compliance proceeds, transportation services, and gifts may produce additional revenue. Service charges are assessed for all property transactions and services. It is the policy of the agency that service charges shall be fair, equitable, and minimal, but established to maintain a financially sound agency. All operating costs are included in this Special Fund activity including but not limited to all employee costs, screening, transportation, maintenance, utilities, administration and accounting, supplies, equipment, packing and handling, compliance and utilization, insurance, fund operation, capital maintenance, and outlay.

B. Factors in establishing charges. To establish item service charges a number of factors are used. Included are circumstances of expenses and revenues, property acquisition cost, condition and usability, general or special availability, need, demand, accumulated use experiences, storage and display, administrative and screening, freight and deliveries. Additional factors pertain to current expenses, property repair or reutilization, special packing and handling, disposal, and compliance and utilization services.

C. Method of establishing charges.

1. Section 2.2-1123 of the Code of Virginia provides that the division may collect service charges sufficient to defray the costs of carrying out this program. The policies, factors, and item acquisition costs covered in this section determine charges assessed. Any period of time may result in fluctuations in the amount of property received, acquisition costs, and economic changes and status. Adjustments to variable changes are necessary to revise service charges. The total of the service charges for all property donated by the agency during any given fiscal year shall not exceed 20% of the original government acquisition cost of the property during that year.

2. Factors given in subsections A, B, and C of this section account for the service charge rates.

3. Unusual or additional expenses will be added to the usual service charges and may include, but not limited to, property rehabilitation, overseas property returns, unusual transportation, and special handling or extraordinary charges.

4. The computation guide for computing service charges will be reviewed periodically, which may be as frequently as each month, to evaluate the income-expense status. When warranted, changes in the guide will be made to conform to the provisions in the FMR 102-37.275.

D. Reduced charges for direct pickup. When property is screened or picked up directly from a holding agency by a donee, the service charge will be reduced on a pro-rata basis for the specific services not rendered by the State Agency such as screening, transportation, and warehousing costs. The charges will be reduced 10% to 25% of the normal or usual service charges when the donee performs the partial over-all services. In general, the remaining factors will apply in establishing service charges because such transactions must also bear a part of the total operating costs.

E. Use of funds. Revenue derived from service charges as well as from other sources such as sales, compliance action, gifts, and appropriations may be used to cover all direct and indirect costs of the agency including personnel, capital purchases and improvements for office and distribution center facilities, property rehabilitation, equipment purchases and maintenance. The current state budget major classifications cover Personal Services, Contractual Services, Supplies and Materials, Transfer Payments, Continuous Charges, Property and Improvements, Equipment, Plant and Improvements. The classifications may be changed, added, or deleted. Capital Outlay plans and expenditures must receive approvals in accordance with the Commonwealth of Virginia requirements. The integrity of the special fund is assured in that the funds shall be used only in the operation of the agency and the promotion of the program.

F. Working capital reserve fund. A financial reserve fund may be accumulated and maintained in an amount not to exceed the total agency expenses for prior year, plus an inflation factor, and current activity cost pace. Funds in excess of the above may be accumulated provided the agency has written plans for increased needs such as maintenance costs, capital outlay for new facilities, expansion, repairs or remodeling, new programs, equipment purchases, and personnel costs. If funds should accumulate in excess of that described above, service charges will be reduced to lower the special fund to the authorized level. Proceeds from any facility sale will be deposited to the fund and subject to the provisions of this paragraph.

G. Accumulated funds. Funds from service charges or from other sources accumulated prior to October 17, 1977, are to be used for the continuance of agency operation for the benefits of all participating donees.

H. Deposits and investments. All funds derived from service charges or other sources are deposited with the Treasurer of Virginia. The State Agency is not authorized to invest funds.