Memo
To: / Finance CommitteeFrom: / Steve Drago, Executive Director
C.C.: / Joe Jackson and Danielle Azar, Associate Directors
Date: / May 4, 2016
Re: / Outline of Assumptions for 2016-2017 Fiscal Year Budget - Updated
In an effort to be more efficient and transparent, please find below an outline of assumptions and considerations in preparing the 2016-2017 fiscal year budget.
REVENUE
4040/4048 - Grants/United Way
· Budgeted for anticipated new $40k United Way grant in addition to existing CAPP grant.
· Budgeted for anticipated Plum Creek, Cisco Foundation, and Comcast Learning Lab grants.
4110/4200 – LTRC & Med Waiver
· Includes state budget- approved 3% increase for Med Waiver, Res Hab, ADT, and Personal Supports.
· Includes full year of revenue for Glen Springs and partial year revenue for Century Oak which is anticipated to open approximate September 2016.
· Factored three residential vacancies (Glen Springs, Century Oak and 6th St).
· Considered client configurations within each home and adjusted for anticipated changes, including on the expense side (e.g. hourly earnings).
· Assumed similar client attendance rates per month for Day Programs.
4810 – Private Pay
Last FY our largest private pay client was erroneously being recorded under Med Waiver for part of the year. It is corrected to Private Pay for 2016-2017 fiscal year.
4610 – Vocational Rehabilitation
A new revenue source is available through the Workforce Innovation and Opportunities Act (WIOA) which requires Supported Employment clients to obtain Pre-Placement Training. We have become a
training site for this service. In addition, we are re-establishing our contacts with VR and APD Supported Employment liaison program to place clients in SE work sites.
5120 - Contract Business Sales
Budgeted $20k (5.65%) increase in Contract Business Sales revenue due to growth in document destruction business and a couple of potential new contracts in the works. We did not factor a greater increase because we would also have to included associated expenses which we cannot know since we don’t know what contracts will actually be procured. Therefore, we include only what we know today with existing contracts and expected growth in existing contracts. We can establish program goals to increase contract business sales, but we don’t believe this goal would belong in the actual budget.
5281 - Fingerprinting /Live Scan Services
· This fiscal year had an influx of outside vendors requiring livescan services due to the implementation of required AHCA clearinghouse screenings. Next year will not see such an influx.
· As the clearinghouse is more utilized by vendors, these businesses will be able to obtain results for already-screened employees through the portal, thus eliminating the need for them to pay for livescan services and, in turn, reducing the quantity of livescan business we will have.
· Corresponding expense has also been reduced for 2016-2017 budget.
5280 – Misc Revenue
Miscellaneous revenue is the administrative fees for being the Representative Payee for clients. Revenue is increased for new fiscal year due to addition of new IB clients due to new home.
EXPENSES
6060 – Fingerprinting
As noted in fingerprint revenue, this expense was reduced correspondingly.
6020/6040 – Merchandise/Supplies
A significant amount of the supplies expenses were being miscoded to merchandise in prior FY. This has been corrected and budget correctly for new FY.
7002 - Staff Salaries (see attached positions analysis)
Factored any permanent or anticipated changes, including salary increases, new positions, etc.
7004 - Hourly Earnings (see attached positions analysis)
Factored the opening of Century Oak, all required staffing in all of residential based on expected occupancy, and full year of Glen Springs staffing. Also accounted for staffing reductions related to assumed client vacancies. Although we expect to better stay ahead of staff vacancies with new and improved recruitment efforts, we anticipate that we will continue to have ongoing vacancies. Therefore, we did not factor with any assumption that we will be fully-staffed. The proposed budget accounts for an average of eleven (11) full-time equivalent DSP vacancies.
7006 - Overtime
We accounted for the current trend of OT utilization in addition to the new home opening. A certain amount of overtime can be no more expensive than the cost of hiring, training new staff, and related employer-paid benefits. In addition, as a business practice, we intend to maintain some level of overtime in order to retain valuable staff who rely on the overtime for livelihood and to avoid having to get a second job elsewhere. We don’t yet know where that magic balance is, but we will nevertheless continue our recruitment efforts to minimize vacancies.
In addition, we are anticipating the effects of the upcoming FLSA exempt-level changes which will place all manager-level employees in a non-exempt status (therefore subject to overtime under Federal wage & hour laws). To minimize the overtime impact, we are adding staffing coordinator positions to relieve the calls that managers receive after hours for staffing purposes which will reduce the likelihood of manager overtime.
7020 – PTO
Used actuals from 2015-2016 fiscal year plus new homes.
7103 - Medical and Hospitalization
We accounted for enrollment and turnover trends and the addition of benefit-eligible positions with the opening of the new home. Enrollment tends to be higher in January/February due to open enrollment and then tapers off due to turnover. The line item just beneath Med/Hosp shows the amount we anticipate for a rate increase that will be effective 1/1/2017 (21.4% overall as compared to 2015-2016 projection). We factored no increase to employee cost of insurance, although we may consider this depending on what the rate increase is. Therefore, this expense assumption is fairly conservative.
stRetirement
Based on actuals of what individuals are deferring, up to the 4% safe harbor match.
FICA (SS & Medicare)
FICA a fixed percentage of .0765, per Federal requirement.
7300 - Staff Morale
This line item is budgeted less due to Annual Awards Banquet now being combined with Annual Meeting resulting in less staff morale expense for the event.
7600 – Hiring Expense
This line item was increased significantly due to new recruitment initiatives and hiring-related advertising that is charged to this expense line item.
8020 - Advertising
Related to In-Kind revenue.
8140 - Computer/Maintenance
Based on actuals with any anticipated increases or new expenses.
8260 - Entertainment
Most was previously included in Fundraising, now coding fundraising-related entertainment to this line item for 2016-2017.
8320 – Insurance (Property/Liability/Bonds)
Factored a 5% increase (Willis provided an appx 3-5% increase anticipated)
8520 - Professional Fees
This line item includes our accounting firm and sub-contracted behavioral services, which is increased due to addition of new IB homes.
8542 - Rental Expense/Building
No longer renting storage facilities, but added additional apartment at The Crossing (IHSS/Personal Supports).
8600 - Small Equipment
A significant portion of this expense is offset at the end of the year by the In-Kind Revenue that is in Development.
8720 – Utilities/Cable
Included increased utilities due to new homes.
9080 - Programming Supplies
We have significantly improved programming in Day Programs with much more meaningful activities for clients. These enhanced programs requires more expense to maintain quality services. There is negligible inventory of any kind included as part of programming supplies (most is consumed).
9160 - Food
We finalized implementation of the food standardization program in residential services during the current fiscal year which improved quality and selection of meals for clients. The new FY budget accounts for actuals of this program plus addition of new group homes.
9320 – Fundraising Expense
As noted under 8260 – Entertainment, entertainment expenses were previously coded to fundraising expense, but is corrected for new budget. Therefore, this line item is reduced/expense line item increased.
9640 – Administrative Allocation
Administrative Allocation is based on each fund’s percentage of the agency’s overall expenses for the month. The percentage is then multiplied times the administrative and building expenses for that month. The resulting figure is the fund’s share of the administrative expense.
*** For 2016-2017, the monthly budget figures are calculated for each revenue/expense GL item based on the 2015-2016 performance. Then a percentage is calculated for each GL line item and applied to the new monthly budget.
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