N.M. Admin. Code § 9.4.5.21 - SET-ASIDE FUNDS

A. Purpose:The SLA shall set-aside funds as described in "Sources of Set-Aside Funds" for purposes described in "Uses of Set-Aside Funds." The licensed managers have recommended a set aside fee of net proceeds, as indicated on the monthly report form (see Appendix 9, BEP Procedures Manual) [now 9.4.7.20 NMAC].

B. Sources of set-aside funds:

(1) cash from application of a set aside fee against the net proceeds of each vending facility;

(2) cash equal to the net income of facilities operated temporarily by the SLA;

(3) cash from receipts of vending machines located on federal property and retained by the SLA;

(4) cash from receipts of vending machines located on nonfederal property and retained by the SLA;

(5) excess vending machine amounts determined under Section 9 of this manual;

(6) interest earned on reserve funds.

C. Uses of set-aside funds:Set-aside funds may only be used for the following purposes:

(1) maintenance of equipment in established vending facility locations;

(2) replacement of equipment in established vending facility locations;

(3) purchase of new equipment for established vending facility locations;

(4) purchase of new equipment for new vending facility locations;

(5) management services;

(6) assuring a fair minimum return to managers;

(7) if it is so determined by a majority vote of the managers licensed by the SLA, after the SLA provides to each manager the information on all matters relevant to the purposes below, the establishment and maintenance of:

(a) retirement or pension funds;

(b) health insurance contributions;

(c) paid sick leave;

(d) paid vacation time including displaced manager payments;

(e) workers compensation for the first year if funding permits;

(8) initial operating costs funded only by income from vending machines located on nonfederal property and retained by the SLA and temporary operation of vending facilities on nonfederal property;

(9) reserves necessary to accomplish the above purposes on an ongoing basis.

D. Application of set-aside sources to uses:

(1) Source: set-aside fee assessed against the net proceeds of each vending facility. Uses:

(a) maintenance and replacement of equipment;

(b) purchase of new equipment;

(c) management services;

(d) assuring a fair minimum return to vendors; or

(e) establishment and maintenance of retirement or pension funds, health insurance contributions, and provisions for paid sick leave and vacation time, if it is so determined by a majority vote of licensed managers licensed by the SLA, after such agency provides to each vendor information on all matters relevant to such proposed purposes.

(2) Source: temporary operation of vending facilities on federal property. Uses:

(a) maintenance of equipment;

(b) replacement of equipment;

(c) purchase of new equipment;

(d) management services;

(e) fair minimum return;

(f) retirement or pension funds;

(g) health insurance;

(h) sick leave;

(i) vacation leave;

(j) reserves.

(3) Source: retained vending machine income from vending machines on federal property. Uses:

(a) maintenance of equipment;

(b) replacement of equipment;

(c) purchase of new equipment;

(d) management services;

(e) fair minimum return;

(f) retirement or pension funds;

(g) health insurance;

(h) sick leave;

(i) vacation leave;

(j) reserves.

(4) Source: temporary operation of vending facilities on nonfederal property. Uses:

(a) maintenance of equipment;

(b) replacement of equipment;

(c) purchase of new equipment;

(d) management services;

(e) fair minimum return;

(f) retirement or pension funds;

(g) health insurance;

(h) sick leave;

(i) vacation leave;

(j) reserves;

(k) initial operating costs;

(l) general liability insurance.

(5) Source: retained vending machine income from vending machines on nonfederal property. Uses:

(a) maintenance of equipment;

(b) replacement of equipment;

(c) purchase of new equipment;

(d) management services;

(e) fair minimum return;

(f) retirement or pension funds;

(g) health insurance;

(h) sick leave;

(i) vacation leave;

(j) reserves;

(k) initial operating costs;

(l) general liability insurance.

E. Budgeting of set-aside funds and determination of set-aside rate:

(1) The SLA in consultation with the committee shall provide for the establishment of a set-aside schedule covering each of the purposes for which set-aside funds are intended to be used. The method of determining the set-aside rate shall be as follows.

(a) Prior to the beginning of each fiscal year, an estimate will be made of the amount and sources of funds which will be required for each of the purposes for which funds are to be set-aside during the ensuing fiscal year. The estimates of the amounts required as well as the purposes for which funds are to be set-aside during the fiscal year will be determined in consultation with the committee. The estimates will take into account expenditures made for each of the purposes during the preceding fiscal year and projections for the next fiscal year based on program needs and plans and funds available from other sources.

(b) After a determination has been made as to the amount of set-aside funds which will be required, a set aside rate to be levied against the net proceeds of each licensed manager shall be established to yield the required funds. The method of establishing the set aside rate shall be: Total budgeted uses - initial operating costs - total budgeted other resources = amount to be provided by set aside rate.

Total amount to be provided ________________________ = Set-Aside Rate

Total net proceeds from 12 full months prior to calculation

(c) This methodology is designed to prevent, so far as is practicable, a greater charge for any purpose than is reasonably required, with allowances for the retention of reasonable reserves necessary to assure that each such purpose can be provided on a continuing basis. This schedule of set-aside charges will be developed in consultation with the committee and shall be submitted for approval to the RSA commissioner. Any changes in the schedule of set-aside charges will likewise be submitted to the RSA commissioner for prior approval. The SLA will maintain adequate records to support the reasonableness of the charge for each purpose.

(2) Requirements for additional stock subsequent to provision of initial stock. In circumstances where additional initial stock is required for efficient operation of the facility, the set-aside fund may provide additional stock on a loan basis with an agreed upon payment schedule. The licensed manager accrues equity in this stock to the extent of his/her repayment of the advance.

Notes

N.M. Admin. Code § 9.4.5.21

4/15/97; Recompiled 10/01/01