Title
Human Resources Department, Risk Management Division, recommending the Board approve and authorize the Chair to sign the attached budget transfer increasing use of fund balance and appropriations by $150,000 in the Retiree Health Fund.
FUNDING: Retiree Health Fund.
Body
DISCUSSION / BACKGROUND
The County's MOUs indicate that the County will make contributions (Retiree Health Defined Contribution or "RHDC") to the health premiums for retired County employees who meet certain criteria. To fulfill this obligation, a Retiree Health Fund (org 0940000) was established, which County departments contribute to. Funds are transferred out of the Retiree Health Fund as contributions are made to retirees.
The amount to be budgeted for this contribution is determined by an actuarial report that is completed every two years by an outside vendor. The budget for Fiscal Year 2023-24 was developed in the Fall of 2022, based on the June 30, 2020 actuarial report. The report, which was completed in the Spring of 2021, was the most current actuarial available at the time. The actuarial report did not account for increases in health premiums, salaries, and inflation which have occurred over recent years. These increases have resulted in larger contributions to retirees. This has resulted in inadequate appropriations to cover the increase in RHDC. The recommended budget transfer will allow the Health Fund to be fully reimbursed for the Fiscal Year 2023-24 Retiree Health Contributions.
ALTERNATIVES
Not approving the budget transfer would result in inadequate appropriations in the Retiree Health Fund.
PRIOR BOARD ACTION
N/A
OTHER DEPARTMENT / AGENCY INVOLVEMENT
N/A
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANACIAL IMPACT
There is sufficient fund balance for these contributions. The budgeted Fiscal Year 2024-25 department contributions are based on a recent actuarial report and are consistent with current contributions to retirees.
CLERK OF THE BOARD FOLLOW UP ACTIONS
Upon Board approval, obtain Board Chair signature on the attached Budget Transfer form and forward to the Auditor’s Office for final processing.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Joseph Carruesco, Director of Human Resources