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Budget Update. January 15, 2014. Budget Calendar. General Fund. ten Year analysis. Enrollment History. Source: Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports. Straight Line Growth Rate Total Salaries & Benefits Per Pupil* (FY2002-03 Base Year).

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Presentation Transcript
budget update

Budget Update

January 15, 2014

enrollment history
Enrollment History

Source: Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports

straight line growth rate total salaries benefits per pupil fy2002 03 base year
Straight Line Growth Rate Total Salaries & Benefits Per Pupil*(FY2002-03 Base Year)

*Employee Benefits does not include the on-behalf contributions for TRS & PERS, which began in 2008

Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports

straight line growth rate comparison certificated salaries per pupil fy2002 03 base year
Straight Line Growth Rate ComparisonCertificated Salaries Per Pupil(FY2002-03 Base Year)

Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports

straight line growth rate comparison non certificated salaries per pupil fy2002 03 base year
Straight Line Growth Rate ComparisonNon-Certificated Salaries Per Pupil(FY2002-03 Base Year)

Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports

straight line growth rate comparison employee benefits per pupil fy2002 03 base year
Straight Line Growth Rate ComparisonEmployee Benefits Per Pupil*(FY2002-03 Base Year)

*Employee Benefits does not include the on-behalf contributions for TRS & PERS, which began in 2008

Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports

health insurance
Health Insurance
  • The total Health Premium has risen steadily since 2003 with an overall increase of almost 160%
  • Through bargaining however, the District has set a priority to attempt to maintain these increases and our costs have increased about 133%

Source: Matanuska-Susitna Borough School District Department of Human Resources

revenue assumptions
Revenue Assumptions
  • Borough Revenue continues to INCREASE at 3%
  • Federal Revenue Maintains with ZERO INCREASE or DECREASE
  • State Energy Relief Funding continues at $100 per Adjusted ADM
  • Student Safety and Security Grant ends after FY14
  • ZERO INCREASE or DECREASE in the State Foundation Formula
  • Intensive Count maintains at 321 students
  • Other Local Receipts maintains with ZERO INCREASE or DECREASE
expense assumptions
Expense Assumptions
  • Certificated Salaries are maintained with an average annual step INCREASE of 1.8%
  • Non-Certificated Salaries are maintained with an average annual step INCREASE of 3.2%
  • Health and Life insurance INCREASE at an annual rate of 8% with the INCREASE split 50/50 between employee\'s and the District (Overall INCREASE to District costs equal 4%)
  • All other deduction factors are maintained with any INCREASE due to INCREASE in Salary factors
  • Utilities INCREASE at an annual rate of 10%
  • Insurance Bonds & Premiums INCREASE at an annual rate of 1.5%
  • Indirect rate is maintained at 5.58% annually and amounts are based on Grant projections included in the FY14 Budget Book
  • All other Non-Personnel accounts are maintained with ZERO INCREASE or DECREASE
structural deficit
Structural Deficit

Structural Deficit

purpose
Purpose
  • Conduct and provide an analysis of the current health benefit plans for each of the 53 school districts in Alaska.
  • Establish an actuarial value of the various benefit plans offered
  • Estimate the projected premiums and costs of consolidating public school employees in Alaska under a state-managed plan
hay groups study
Hay Groups Study
  • Surveyed all 53 school districts – 100% participation
  • NEA Alaska Health Plan
  • Aetna, Premera, TPAs
  • Dept. of Administration
  • Dept. of Education and Early Development
  • Unions – Teamsters, Local 71
health insurance in alaska s school districts
Health Insurance in Alaska’s School Districts
  • Enrollment by district size
  • There are approximately 19,000 employees total, 17% opt out of coverage
health insurance in alaska s school districts2
Health Insurance in Alaska’s School Districts
  • Plan offerings currently available in Alaska’s school districts
health insurance in alaska s school districts3
Health Insurance in Alaska’s School Districts
  • 21 district’s have 0% employee cost share
  • 32 district’s have some cost share the average being 13%
  • Public sector national average is 15%
health plan cost drivers
Health Plan Cost Drivers
  • Three key drivers of a plan’s costs
    • The extent to which plan pays for the costs of care.
    • The utilization of those benefits by plan members.
    • The non-benefit costs that are required to administer the plan.
plan costs broken down
Plan Costs Broken Down
  • The argument for self insurance/pooling
saving through pooling
Saving through Pooling

Cost savings for a consolidated pool can be broken down to four main areas

  • Provider Networks
  • Overhead
  • Plan Design
  • Cost Sharing
options
Options
  • Optimize Program Performance
  • Leverage AlaskaCare Plans
  • Centrally Managed School District Program with Standard Health Plan Options and Cost Sharing
  • Centrally Manage School District Program with Standard Health Plan Options Only
  • Bring all School District Plans under State management
1 optimize program performance
1. Optimize Program Performance
  • Savings achieved through provider networks and overhead $17.1M - $28.8M
2 leverage alaskacare
2. Leverage AlaskaCare
  • Consolidate all health care coverage under the existing AlaskaCare plans increase of $8.7M – savings of $34.9M
3 district pool with standard plan and cost share
3. District Pool with Standard Plan and Cost Share
  • Provides an independent pool for school districts with three standard plan options and a standard cost share savings of $22.6M – $33.7M
4 district pool with standard plan
4. District Pool with Standard Plan
  • Provides an independent pool for school districts with three standard plan options $9.4M – $64.9M
recommendations
Recommendations
  • State pursue pooling as described in option 3
    • Significant savings through optimization of plan performance, plan design consolidation and standardized cost sharing.
  • To achieve maximum benefit and savings the transition would need to be mandatory
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