HomeMy WebLinkAbout11 Budget Overheads Agenda Item #
Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: September 30, 2005
Subject: Budget overheads
Why this matter is before the Board of Directors: This is a continuation of the
budget workshops.
History: We have been bringing sections of the budget to the Board in a series
of workshops. We have not yet discussed the method we use to calculate
various overheads, so we would like to do that at this meeting.
New information: Attached for your review are the overheads we have been
using during 2005. These are actual pages from the appendix portion of the
adopted budget. Mary will lead a discussion of the formulas used to calculate the
overheads, and what each overhead is intended to do for us.
We do not yet have the calculations for 2005. They a derived from final budget
numbers, which in turn are still being prepared. The overheads from 2005 will
give us a good base from which to discuss the formulas and the purpose of each
overhead.
Recommendation: This is a workshop item, so not formal action is being
suggested. The goal is go enable the Board to understand the overheads and
discuss whether any modifications in past practice are warranted.
APPENDIX IN
LABOR OVERHEAD
VALUE OF BENEFITS
Medical insurance $973,370
Dental insurance 94,080
Vision insurance 16,000
Prescription reimbursement 2,000
Hospital deductible 2,000
Well baby care 2,500
Long term disability 33,943
Life insurance 45,897
Longevity 15,050
FICA 277,713
Fed Mod 66,740
State compensation 297,202
Pension 959,876
Value of non-productive labor 622,604
(vacation, sick leave, holiday)
TOTAL VALUE OF BENEFITS $3,408,975
PRODUCTIVE LABOR
Recommended labor(Appendix 11) $4,602,787
Less value of non-productive labor (622,604)
TOTAL PRODUCTIVE LABOR $3,980,183
PAYROLL OVERHEAD 85.65%
(Value of benefitsfproductive labor)
BENEFITS AS A PERCENT OF TOTAL LABOR AND BENEFITS 46%
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APPENDIX IV
TRANSPORTATION OVERHEAD
This appendix assumes that the cost of operating, maintaining and replacing District vehicles and equipment
will be recognized as an overhead charged against direct labor that uses the vehicles.
TRANSPORTATION& EQUIPMENT EXPENSE
Vehicle operation, repair, fuels &misc expenses $298,044
Interest expense (vehicle debt service) 26,409
Insurance 50,490
Replacement(depreciation expense) 192,500
TOTAL TRANSPORTATION EXPENSE $567,443
DIRECT LABOR EXPENSE
General Manager $47,493
Administrative Services 81,361
Support Services 47,424
Electric Operations 1,125,663
Power Supply 17,443
Water Operations 951,476
TOTAL DIRECT LABOR EXPENSE $2,270,860
TRANSPORTATION/EQUIPMENT OVERHEAD
($524,545 DIVIDED BY$ 2,079,628) 24.99%
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APPEND V
INVENTORY OVERHEAD
PURCHASING/WAREHOUSING
Labor $73,701
Accounts Payable 17,197
Overhead:
Labor 63,125
Transportation 5,065
Administrative 1,231
Warehouse Operations:
Utilities & Building Maintenance 13,510
Miscellaneous (insurance) 4,500
TOTAL COST $178,329
ESTIMATED INVENTORY ISSUES
Support Services $15,000
Electric Operations 348,392
Water Operations 272,150
TOTAL ESTIMATED ISSUES $635,542
INVENTORY OVERHEAD 28.06%
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APPENDIX Vi
ADMINISTRATIVE OVERHEAD
COMMON SUPPLY COSTS:
Purchasing/Warehousing of Common Supplies
Labor $8,189
Accounts Payable 1,911
Overhead:
Labor 7,013
Transportation 563
Administrative 137
Warehousing Operating Costs
Utilities & Building Maintenance 1,501
Miscellaneous (insurance) 500
Subtotal $19,814
Common Supplies
Outside staff supplies $15,000
Inside staff supplies I Z500
Joint department supplies 5,000
Subtotal $3Z500
TOTAL COMMON SUPPLY COSTS $5Z314
TOTAL PRODUCTIVE LABOR $3,980,183
ADMINISTRATIVE OVERHEAD 1.31
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APPENDIX V11
CONSTRUCTION OVERHEAD
Step 1 General direction and general construction costs from budget:
Electric Operations $166,888
Water Operations 66,784
GIS&Mapping 48,096
Total $281,768
Step 2 Determine capitalized labor as a percent of total labor:
Capitalized
Labor = $786,967 = 31,19%
Total Electric& Water tabor $2,523,330
Step 3 Determine construction overhead to be capitalized.,
Total General direction&construction costs $281,768
%of labor to be capitalized 31.19%
General direction&construction costs to capitalize $87,877
Construction accounting costs to capitalize 186,966
$274,843
Step 4 Calculate construction overhead to be applied to capital improvements:
i
Capital
Overhead = $274,843 = 34,92%
Capital Labor $786,967
CONSTRUCTION OVERHEAD= 34.92%
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