Kenai Peninsula Borough

Finance Department

Memorandum

To: Gary Superman, Assembly President

Members, Kenai Peninsula Borough Assembly

Thru: Dale Bagley, Mayor

Thru: Scott Holt, Finance Director

From: Craig Chapman, Controller

Date: March 24, 2005

Re: Ordinance 2004-19-46, Increase in Health Insurance Claims

During the months of July through February for Fiscal Year 2005, the Borough has seen health insurance claims come in at a rate 25% higher than the budgeted amount. The impact to the Borough's General Fund is estimated to be approximately $360,000. The impact to the Service Area's and other funds is estimated to be approximately $370,000.

The majority of this projected increase is being absorbed within each department; however, there are some departments that do not have resources available within their budget to cover the estimated increase and a supplemental appropriation will be needed.

The attached ordinance would appropriate funds for those departments that do not have the resources available to cover the estimated increase. Without this appropriation some departments would expend 100% of their budget prior to year-end. Borough code, section 5.08.030, restricts the Borough to only "make expenditures within the limits of the budget".