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VARIANCE ANALYSIS – 2015 EXPENDITURES Budget to Actual comparison using FY 2015 recurring expenditures POTENTIAL BUDGET SAVINGS FROM RECOMMENDATIONS GENERATED FROM THIS ANALYSIS Medical insurance $ 52,000 Retiree health insurance 32,000 PERS 17,600 Services and supplies 126,600 Total Budget Savings $ 228,200 Analyze expenditure object classes having significant variances to understand trends and budgeting behavior with a goal of identifying potential budget savings which will reduce our structural deficit. TOTAL EXPENDITURES Budget $ 6,714,685 100% Actual $ 6,297,079 94% Variance $ 417,606 6% TOTAL EXPENDITURES BY MAJOR OBJECT CLASS OBJECT CLASS BUDGET ACTUAL VARIANCE % UNSPENT Salaries $ 1,916,833 $ 1,897,704 $ 9,129 0.5% Benefits and EE costs 1,375,566 1,229,185 146,381 10.6% Services and supplies 1,638,245 1,386,336 251,909 15.4% Other 1,784,041 1,783,854 187 0.0% Total Expenditures $ 6,714,685 $ 6,297,079 $ 417,606 6.2% VARIANCE ANALYSIS OF BENEFITS AND EMPLOYEE COSTS ACCOUNTS OBJECT CLASS BUDGET ACTUAL VARIANCE % UNSPENT Medical insurance $ 525,761 $ 449,807 $ 75,954 14.4% Retiree health insur 402,400 351,923 50,477 12.5% PERS 294,985 275,959 19,026 6.4% Workers compensation 93,543 93,543 0 0.0% Other 58,877 57,953 924 1.6% Total Benefits & EE Costs $ 1,375,566 $ 1,229,185 $ 146,381 10.6% Page 1 ---PAGE BREAK--- MEDICAL INSURANCE: Past practices has been to budget current rates for six months and current rates plus 5% to 7% for the second six months and then blend the two rates. New employees are anticipated at family rates, the most expensive option. Actual rate experience was as follows: BUDGET ACTUAL VARIANCE % OVER BUDGETED First Six Months, per month Per employee EE only $ 900.00 $ 758.97 $ 141.03 15.67% EE + 1 $ 1,500.00 $ 1,362.30 $ 137.70 9.18% EE + 2 $ 1,900.00 $ 1,778.37 $ 121.63 6.40% Second Six Months, per month Per employee EE only $ 900.00 $ 779.37 $ 120.63 13.40% EE + 1 $ 1,500.00 $ 1,404.02 $ 95.98 6.40% EE + 2 $ 1,900.00 $ 1,831.10 $ 68.90 3.63% RECOMMENDATIONS: Budget rate increase at mid‐year. Estimate with greater accuracy, limiting variance to no more than 5% of budget. RETIREE HEALTH INSURANCE: Budget for retiree health insurance was increased from FY 2014 to FY 2015 by $22,785 but the increase was not needed. Five years of historical budget to actual performance is as follows: OBJECT CLASS BUDGET ACTUAL VARIANCE FY 2015 $ 402,400 $ 359,697 $ 42,703 FY 2014 $ 379,615 $ 356,330 $ 23,285 FY 2013 $ 310,789 $ 330,544 $(19,755) FY 2012 $ 310,789 $ 280,837 $ 29,952 FY 2011 $ 310,789 $ 262,351 $ 48,438 RECOMMENDATIONS: Budget based on list of known retirees and known rates of payment Adjust at mid‐year for changes in estimates PERS: PERS budget is computed using known PERS actuarial rates and projected salary amounts. It appears that lower rates associated with PEPRA members were not used and this comprises most of the variance. Since we are able to budget salaries within 0.5% accuracy, we should be able to do the same for PERS. RECOMMENDATION: Incorporate PEPRA rates into the budget schedules. Page 2 ---PAGE BREAK--- ALPINE COUNTY ‐ GENERAL FUND Analysis of Services and Supplies Budget to Actual FY 2015 SERVICES & SUPPLIES - FY 2015 BUDGET TO ACTUAL VARIANCES BUDGET RECURRING ACTUAL RECURRING VARIANCE % UNSPENT COMMENT RECOMMENDATIONS POTENTIAL BUDGET SAVINGS MISC PROFESSIONAL SERV 377,035 297,445 79,590 21% $33,000 public defender $10,000 risk management $ 7,527 CDA $ 7,400 clerk $ 6,163 personnel Change budget approach. Budget based on existing (anticipated) contracts. Adjust at mid-year or consider adopting a contingency policy. Set aside portion of carryover fund balance to fund unanticipated expenditures. Reclassify non-recurring transactions as one time. 45,000 $ PROPANE GAS 76,200 48,501 27,699 36% Difficult to anticipate because of weather. Ten year average is $57,500. Budget historical 10 year average for final budget and adjust at mid-year based on experience mid-winter. 18,700 $ ROAD ADMIN & 5% COST 20,000 1,044 18,956 95% Weather related for plowing parking lots. Over past six years, high is $35K and low is $1K. CDA agreed to reduce budget by $5,000 5,000 $ PHONE & INTERNET 79,650 60,747 18,903 24% Substantially for VOIP. Recent changes in phone/internet service are complete. Frontier invoices have stablized. ATT accounts cancelled and refunds received. Use recent transactions to more accurately project next year's budget 12,500 $ TRAVEL 40,379 29,624 10,755 27% Travel is for lodging, per diem and mileage reimbursements to attend association conferences and various trainings. Departments having unspent travel funds of $1,000 or more include: $4,434 Finance $3,749 Probation $1,955 Admin Some travel activities are reimbursed by outside agencies. Prepare a training agenda for the next year and cost out the travel so budget is more accurate. 3,500 $ Page 3 ---PAGE BREAK--- ALPINE COUNTY ‐ GENERAL FUND Analysis of Services and Supplies Budget to Actual FY 2015 SERVICES & SUPPLIES - FY 2015 BUDGET TO ACTUAL VARIANCES BUDGET RECURRING ACTUAL RECURRING VARIANCE % UNSPENT COMMENT RECOMMENDATIONS POTENTIAL BUDGET SAVINGS MAINT AGREEMENTS - ALL 73,842 63,409 10,433 14% The variance is mostly generated from the following: $1,907 OMB A87 - estimate was rounded up to $15,000. This is AS400 licensing, ADS and postage machine $6,317 Central Services - this is annual licensing for CREST server. Fee has always been $25,122 per year. The unspent budget represents contingency. $2,000 B&G, CDA - $1,500 is for inspection of the CH lift which didn't occur until after the fiscal year ended. Budget OMB A87 costs closer to actual. For Central Services, budget the additional $6,000 as software fees and classify as one- time. 7,000 $ LEASES - ALL 28,200 19,827 8,373 30% This is lease cost for copiers. New agreements were initiated in all departments and the unspent budget represents the savings. Budget based on new lease contracted amounts. 7,400 $ STIPENDS 17,500 10,243 7,257 41% $2,500 is budgeted for BV Fire but none have been paid. For EAF, there were 14 volunteers receiving an average of $750 per year. 1 received maximum amount 2 received between 75% and 50% of max 6 received between 50% and 30% of max 5 received between 30% and 20% of max Eliminate BV Fire stipend amount of $2,500. For EAF, stipend amount per volunteer per month was increased for FY 2016, from $150 to $200. Reevaluate need for budget decrease after FY 2016. 2,500 $ 56 OTHER ACCOUNTS <$5,000 925,439 855,496 69,943 8% Continue requesting Departments to justify next year's allotment by budgeting based on actual spending. In June, adjust variances to 5% of budget. 25,000 $ 1,638,245 1,386,336 251,909 126,600 $ Page 4