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randCanyor X @ chenzebuds X North Americ: X | @ chen2ebuds x | I GranaCanyor x | + NM | [ERT JET CE J LIVEETS TI Rr 142 of 384 The base budget is the amount of money that is funded for the current year. However, this amount may not be the correct amount for future years for many reasons, such as one-time or deferred expenses in the current year. Typically, the base budget is converted to a baseline bud- get by adjusting for special conditions. This primarily consists of removing funds for one-time expenditures and expired programs; annualizing partial-year funding; updating salary and bene- fits; and, in some jurisdictions, adjusting for inflation. It may also be necessary to estimate non- discretionary increases or decreases in service levels on the basis of factors such as increases in population to be served or changes in federal or state mandates. Assignments 1. Nonpersonnel expenses: You have been tasked with computing baseline budget targets for the upcoming budget cycle. Using Table 12.2 as your starting point, make the following adjustments: (a) Solar panels have been installed with an expected 5% decrease in utility cost, for a savings of about $7,611. 120 Oe MO®O0O0R0 [| N-ETENT RA | RET ET Rr a (c) (@ (e) ® UCTS SEE FT The inspection program was started in FY 2014 and had funding for three fourths of the year. All of the start-up costs were incurred in FY 2014. The annual- ized value of the inspection supplies for the remain- ing one fourth of the year is $81,899. Inflation is expected to be 2% except for utilities, which will see no increase, and for leased space, which by contract will have a 3% inflationary increase. The number of service units will not change. All departments are expected to achieve a 1% improvement in efficiency on all lines of cost and in all programs. Budget baselines are not given out with cents, so round to the nearest dollar. 2. Personnel expenses: You have been tasked with com- puting baseline budget targets for the upcoming budget cycle. Using Table 12.3 as your starting point, make the fol- ER CE 143 of 384 DETERMINING THE BASELINE BUDGET TABLE 12.2 Nonpersonnel Expenses Expense Type General Supplies Utilities Leased Space Fuel Inspection Supplies Inspection Start-up Total Nonpersonnel TABLE 12.3 Personnel Expenses Expense Type Salaries Fixed Benefits FY 2014 $69,532 152,227 720,000 50,571 327,595 125,000 $1,444,925 FY 2014 $1,500,257 534.240 | EE I IB StudentPortz x | § ADM626Top x | sf Grand Canyor x PR YUE S PRN EET C & viewer.gou.edu/HGAKet rv 143 of 384 2. Personnel expenses: You have been tasked with com- puting baseline budget targets for the upcoming budget cycle. Using Table 12.3 as your starting point, make the fol- lowing adjustments: (a) All employees are expected to receive a 3% cost-of- living increase in the next year. (b) The fixed benefit rate will increase by $12.50 per full- time equivalent (FTE) employee. There are 50 FTEs. (c) The variable benefit rate will increase by 1.25% for all employees in the next year. (d) Budget baselines are not given out with cents, so round to the nearest dollar. 3. What is the total computed baseline for this department? 4. The Syracuse Mobile Health Unit has the budget shown in Table 12.4: (a) What is the base budget? Expense Type FY 2014 Salaries $1,500,257 Fixed Benefits 534,240 Variable Benefits 262,545 Total Nonpersonnel $2,297,042 FTE 50.00 TABLE 12.4 Syracuse Mobile Health Unit Budget Current-Year Expense Type Budget Nurse Practitioner Salary $65,000 Driver and Health Aide Salary $45,000 Benefits 20% of salaries Van Costs (Gas/Maintenance/Insurance) $12,000 Medical Supplies $9,000 (b) What is the baseline budget for next year, assuming a 3% increase in NPS and a 4% increase in salaries? (c) Now assume that there is another part-time nurse practitioner who earns $30,000 in the current fiscal year and that starting in the new fiscal year, this individual will be a full-time nurse practitioner with a starting salary of $60,000. What is the base budget? What is the Oe MO®O0O0R0 =] [ESTEE IPN +R A] | RET ET 3 ERR CEE. PR Re shown in Table 12.4: (a) What is the base budget? . (b) What is the baseline budget for next year, assuming a 3% increase in NPS and a 4% increase in salaries? + = 157 | % (c) Now assume that there is another part-time nurse practitioner who earns $30,000 in the current fiscal year and that starting in the new fiscal year, this individual will be a full-time nurse practitioner with a starting salary of $60,000. What is the base budget? What is the baseline budget? Additional Readings Bland, R. L. (2007). A budgeting guide for local government (2nd ed.). Washington, DC: ICMA Press. Rabin, J., Hildreth, W. B., & Miller, G. (1996). Budgeting: Formulation and execution. Athens: Carl Vinson Institute of Government, University of Georgia. 1:48 Q ® |