Memorandum

To: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

Thru: Dale Bagley, Mayor

From: Scott Holt, Finance Director

Craig Chapman, Controller

Date: May 20, 2004

Re: Resolution 2004-056, Increase in Health Insurance Claims

During the months of July through April in fiscal year 2004, the borough's health insurance claims came in at a rate 25 percent higher than the budgeted amount. The impact to the borough General Fund is estimated to be approximately $340,000. The impact to the Service Areas and other funds is estimated to be approximately $330,000.

The majority of this projected increase can be absorbed within each department; however, there are some departments that do not have resources available within their budgets to cover the estimated increase.

KPB 5.04.100 allows for the assembly to transfer unencumbered balances between major classifications or departments. The Print Shop and General Fund Custodial are part of General Services but are considered separate major classifications or divisions. The General Services administrative budget has resources available to cover the increased cost of health insurance for these two divisions. Assembly action is needed to authorize the transfer of budget funds from General Services to the Print Shop in the amount of $5,200 and to General Fund Custodial in the amount of $3,800.