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Human Resources Department recommending the Board approve and authorize the Chair to sign a Fiscal Year 2025-26 budget transfer increasing the use of fund balance and appropriations by $235,000 in the Retiree Health Fund and the use of General Fund Contingency in the amount of $175,000 for the Human Resources Program, as well as other minor budget adjustments.
FUNDING: General Fund Contingency and Retiree Health Fund.
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DISCUSSION / BACKGROUND
After completing a year-end projection for the Human Resources and Risk Management programs, it was determined that a budget transfer is needed to ensure adequate appropriations are in place for projected FY 2025-26 expenditures.
A budget transfer to increase both the use of fund balance and appropriations by $235,000 in the Retiree Health Fund is needed. Under the County’s labor MOUs, the County provides Retiree Health Defined Contribution (RHDC) payments toward health premiums for eligible retired employees. To support this obligation, County departments contribute to the Retiree Health Fund, and funds are then transferred out as RHDC payments are made.
The RHDC budget is set using an actuarial report completed every two years by an outside vendor. The FY 2025-26 budget, developed in Fall 2024, relied on the actuarial report based on June 30, 2022, data, which was finalized in the Spring of 2023 and was the most current report available at that time. However, the report did not reflect subsequent increases in health premiums, salaries, and inflation. These cost increases have resulted in higher contributions than initially budgeted. The recommended budget transfer will fully reimburse the Retiree Health Fund for FY 2025-26 RHDC costs.
The Human Resources Department (HR) has also completed its final FY 2025-26 projection, which shows an estimated increase in Net County Cost of $160,000. At Midyear, HR anticipated a $70,000 increase in Net County Cost, driven by:
• $60,000 in higher health benefit costs (ra...
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