04-04-2010, 01:36 PM
David, the cost will be what the cost is. Regardless of what's in the budget, cost for this item has to be paid by the County. If they budget too little, they will need to take that money from another program to pay the bill. If they budget too much, they will only pay what is due, nothing more. Since there are many factors that can change the amount due, the budgeted amount will never match the final cost at the end of the fiscal year. What I just wrote, is not so much for you, but for anyone else reading this.
But, I see the direction your going. Ideally they would have used good numbers, have guestimated potential changes in coverage based on historical data, and have a good grasp of premium changes based on historical data. So, if all goes well, they will be right about even with their budgeted cost and the final cost. Since changes in employment, coverage, or dependent care could add or subtract millions each year to the budget, I suspect that coming within $3 million of the actual budget is a very good estimation on the part of those estimating cost.
If they underestimated, they will have to find that money somewhere as the bills come due. This probably would come from cutting back on another budgeted amount, using reserves, or borrowing the short fall from somewhere. That means they probably will go crying for higher revenue (increase taxes) the next year.
If they overestimated, they will have extra money. Since this expense is not a dedicated fund, the excess will go into the general fund as unspent money. I believe this is what has raised your eyebrows. If they grossly inflated the budget, they will be collecting based on a false need that they know will be returning money to the general fund to be used for something they decide to spend it on.
So that raise a question, all the Council and agencies have to do is over estimate; increase revenue to match the budget; have an excess that they use for purposes that would have raise a stink had they put it in the budget. They could fund a pet project with it. Or, they can simply decrease revenue needs the next year (fat chance) and claim they are good fiscal custodians of the people's money by saving X dollars and that's why they deserve re-election. Of course the truth is they just over estimated.
Interesting item you raised. [
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But, I see the direction your going. Ideally they would have used good numbers, have guestimated potential changes in coverage based on historical data, and have a good grasp of premium changes based on historical data. So, if all goes well, they will be right about even with their budgeted cost and the final cost. Since changes in employment, coverage, or dependent care could add or subtract millions each year to the budget, I suspect that coming within $3 million of the actual budget is a very good estimation on the part of those estimating cost.
If they underestimated, they will have to find that money somewhere as the bills come due. This probably would come from cutting back on another budgeted amount, using reserves, or borrowing the short fall from somewhere. That means they probably will go crying for higher revenue (increase taxes) the next year.
If they overestimated, they will have extra money. Since this expense is not a dedicated fund, the excess will go into the general fund as unspent money. I believe this is what has raised your eyebrows. If they grossly inflated the budget, they will be collecting based on a false need that they know will be returning money to the general fund to be used for something they decide to spend it on.
So that raise a question, all the Council and agencies have to do is over estimate; increase revenue to match the budget; have an excess that they use for purposes that would have raise a stink had they put it in the budget. They could fund a pet project with it. Or, they can simply decrease revenue needs the next year (fat chance) and claim they are good fiscal custodians of the people's money by saving X dollars and that's why they deserve re-election. Of course the truth is they just over estimated.
Interesting item you raised. [
]