Attached you will find the PMAIClient Checklist completed for your consideration as the Administrations recommendation for the parameters that will make up the 5 year budget projection. The major areas and comments about those areas are as follows:
EXPENDITURE ASSUMPTIONS
Projected %Salary Increase
These have been intentionally left blank, as the committee will need to have a conversation about how to handle these going forward. This section, along with the next section (Projected Benefits) comprise approximately 85% of the entire model projection. We will need to address the issue of how these line item projections could impact future negotiations with all employee groups.
Projected Benefits
We have worked with our Human Resources Department to provide the best possible projections at this point in time.
We have assumed an increase in WRS over the next 3 years of .6% and the assumed this would flatten out.
For Health Insurance, we have used a weighted average based upon the number of plans we have with each separate health plan, along with a projected increase for each plan.
General Fund Assumptions
Historically Administration has tied this increase to the annualized Consumer Pricing Index (CPI-U), which hovered around approximately 2%.
Currently through the month of August, 2010 the annualized CPI-U is at 1.1%. We are recommending that all consumable budgets be increased by 2% in order to allow schools and departments the ability to meet the increasing needs and price increases.
Utilities Assumptions
Administration has worked with Madison Gas and Electrict (MG&E), the City of Madison, and our independent natural gas consultant Select Energy to prepare the recommended rates of utility increase.