MRO 2 O 2019 B Budge dget R Revi view June 21, 2018 Thomas - - PowerPoint PPT Presentation

C LAR ARITY ▪ A SSU SURANCE ▪ R E S E SULT S T S

MIDWEST RELIABIL BILIT ITY ORGANIZATION

Improving RE RELIABILITY a and nd mitigating RI RISKS KS t to the B Bulk P Power System em

MRO 2 O 2019 B Budge dget R Revi view

June 21, 2018 Thomas Kent, Finance and Audit Committee Chair Sara Patrick, Interim President and CEO Sue Clarke, VP-Finance and Administration

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Highl Highligh ghts Budget Reflects Strategic Direction

2019 MRO Budget Budget costs increase by $4.3 million (36%), from $11.7m to $16.0m

• 2018 board-approved budget: $11.7m
• 2019 budget: $16.0m

Assessments increase by $4.7 million (44%), from $10.7m to $15.5m

• 2018 MRO assessment per board-approved budget: $10.7m
• 2019 MRO assessment: $15.5m

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Highl Highligh ghts Integrated Budget

2019 Integrated Budget Integrated budget costs decrease by $4.8 million (23%), from $20.8m to $16.0m

• Combined MRO and SPP 2018 budgets: $20.8m

 2018 MRO board-approved budget: $11.7m  2018 SPP board-approved budget at 84%: $9.1m

• 2019 MRO budget: $16.0m

Assessments decrease by $3.4 million (18%), from $18.9m to $15.5m

• Combined MRO and SPP 2018 assessments: $18.9m

 2018 MRO assessment: $10.7m  2018 SPP assessment at 84%: $8.2m

• 2019 MRO assessment: $15.5m

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Highlights cont.

The 2018 MRO NEL assessment rate is $0.037090915/GWh based on a total MRO load of 289,292,028 for registered LSEs The 2018 SPP RE NEL assessment rate is $0.041074045/GWh based

• n a total SPP RE load of 198,931,044 for registered LSEs

The 2019 MRO NEL assessment rate is $0.031689754/GWh based on a total MRO load of 488,223,072 for registered LSEs

• Net NEL savings of 14.6% for entities registered in MRO in 2018
• Net NEL savings of 22.8% for entities registered in SPP RE in 2018

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CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Highl Highligh ghts Budget Reflects Strategic Direction

2018 transition costs are estimated at $1.5 million

• MRO has provided the cost estimate and funding options to NERC
• A separate budget has been established to track all transition costs
• On February 15, the MRO Board identified three options for transition cost

recovery:

• Reset the reserves, which would be a one-time impact to the 2019 budget
• Capitalize costs and amortize over three years
• Transfer the SPP RE assessments to MRO in 2018

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Highl Highligh ghts Budget Reflects Strategic Direction

Managing productivity

• Over 70% of costs are in staff
• FTEs increase by 14 in 2018 (45 to 59)
• 5 in Compliance
• 5 in RAM
• 2 in Operations
• 2 in Administrative Support
• Need for additional FTEs will be evaluated in 2019

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Strategic Priorities for MRO

There are three strategic priorities for MRO in 2019: integrate new registered entities in MRO; execute NERC-delegated functions including oversight, analysis, and assessment for the entire expanded MRO footprint; and align with the ERO Enterprise and provide support to the ERO Enterprise goals.

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CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Strategic Priorities for MRO

Integrate new registered entities into MRO.

• Provide new registered entities with opportunities to:
• be included in stakeholder committees and other regional activities;
• share their expertise with MRO staff and other stakeholders; and
• get to know MRO staff.

Execute NERC-delegated functions.

• Continue to identify, prioritize, and mitigate risks to the bulk power system during integration
• Continue to conduct high quality execution of delegated functions
• for all MRO registered entities
• pursuant to MRO principles
• including oversight, analysis, and assessments
• Understand new registered entities’ strengths and vulnerabilities
• Share and learn practices

Align with the ERO Enterprise and provide support to the ERO Enterprise goals.

• Support the ERO Enterprise Long-Term Strategy
• MRO’s Strategic Plan and Metrics adopts
• the ERO Operating Plan and goals and
• the ERO Enterprise Metrics as applicable to MRO

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Budget Comparison 2018/2019

9

2019 Budget, $15,980,354 2019 Assessments, $15,471,669 2018 MRO Budget $11,726,736 2018 MRO Assessments, $10,730,106 84% of 2018 SPP Budget, $9,066,284 84% of 2018 SPP Assessments, $8,170,902 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000

BUDGE T A S S E S S ME NT S

2018 VERSUS 2019

2018 NEL 2018 NEL 2019 NEL 2019 NEL 0.0000000 0.0050000 0.0100000 0.0150000 0.0200000 0.0250000 0.0300000 0.0350000 0.0400000 0.0450000 0.0500000 SPP MRO

Assessments per NEL

22.8% reduction 14.6% reduction

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Budget Comparison cont.

10

Revised 2018 Metrics for Budget Submissions (using 2019 Combined MRO Preliminary Budget) Budget Metrics FRCC MRO Projected MRO 2019 NPCC 5 RF SERC SPP RE Texas RE WECC 1 Number of registered entities 42 113 222 205 230 192 120 203 366 2 Number of registered functions 163 342 621 427 477 507 315 379 888 3 Total NEL (GWh) 234,140 289,292 488,223 628,864 894,287 1,022,554 227,489 353,022 857,250 4 NEL (GWh) per registered entity 5,575 2,560 2,199 3,068 3,888 5,326 1,896 1,739 2,342 5 Total ERO Funding1 $ 6,913,663 $ 10,872,104 $ 15,980,354 $ 14,416,787 $ 22,060,585 $ 17,933,114 $ 10,017,265 $ 11,546,986 $ 27,382,000 6 ERO Funding per registered entity $ 164,611 $ 96,213 $ 71,984 $ 70,326 $ 95,916 $ 93,402 $ 83,477 $ 56,882 $ 74,814 7 ERO Funding per registered function $ 42,415 $ 31,790 $ 25,733 $ 33,763 $ 46,249 $ 35,371 $ 31,801 $ 30,467 $ 30,836 8 Total Budget2 $ 7,514,112 $ 11,726,738 $ 15,980,354 $ 15,106,967 $ 21,393,899 $ 17,182,868 $ 10,793,195 $ 12,656,953 $ 27,097,344 9 Total Budget per registered entity $ 178,907 $ 103,776 $ 71,984 $ 73,693 $ 93,017 $ 89,494 $ 89,943 $ 62,350 $ 74,036 10 Total Budget per registered function $ 46,099 $ 34,289 $ 25,733 $ 35,379 $ 44,851 $ 33,891 $ 34,264 $ 33,396 $ 30,515 11 Total Statutory FTE3 30.63 45.00 59.00 36.86 76.20 75.00 32.30 60.00 143.00 12 Registered entity per Statutory FTE 1.371 2.511 3.763 5.562 3.018 2.560 3.715 3.383 2.559 13 Registered function per Statutory FTE 5.322 7.600 10.525 11.584 6.260 6.760 9.752 6.317 6.210 14 Total Compliance Budget 4 $ 5,498,173 $ 7,756,470 $ 10,763,709 $ 8,293,748 $ 15,960,112 $ 12,171,991 $ 8,466,710 $ 9,593,152 $ 14,643,677 15 Compliance budget per registered entity $ 130,909 $ 68,641 $ 48,485 $ 40,457 $ 69,392 $ 63,396 $ 70,556 $ 47,257 $ 40,010 16 Compliance budget per registered function $ 33,731 $ 22,680 $ 17,333 $ 19,423 $ 33,459 $ 24,008 $ 26,878 $ 25,312 $ 16,491 17 Total Compliance FTE3 19.65 23.02 32.35 16.00 45.25 32.56 21.75 36.25 59.00 18 Registered entity per Compliance FTE 2.1 4.9 6.9 12.8 5.1 5.9 5.5 5.6 6.2 19 Registered function per Compliance FTE 8.3 14.9 19.2 26.7 10.5 15.6 14.5 10.5 15.1

working less than the 2,080 hours per year is counted as a fractional FTE.

and Capital Expenditures

provincial MOUs for cross-border regional entities, some of these metrics are not directly comparable.

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS 11

MRO Budget Process Summary

Step One

Staff Develops a Preliminary Budget

• “Bottoms-up/Zero-

based” budget development with program managers and executives

• “Tops-down”

expectations from interim president and chief executive officer

• Reconcile “bottoms-

up” and “tops-down”

Step Two

Present Budget to MRO FAC

• Detailed review and

justification, includes all line items, contracts, etc.

• MRO FAC

recommends approval, distributes budget to board and committee chairs (conference call to review)

Step Three

Comment Period and Board Approval

• Budget is circulated

for comment to all stakeholders

• Budget is considered

at the second quarter board meeting

Step Four

Final Approval and Filing

• NERC Board approves

(or may have questions, concerns to address)

• Final approval of

NERC and RE BP&Bs are filed with FERC

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS 12

2019 Budget Risks

Appropriately staffing to manage the integration of new registered entities

• Additional staff is not proportional to the increase in entities

 Recruiting, onboarding, and integrating 14 additional staff (approx. 31% increase)  Doubling in size (registered entities are increasing from 113 to 222)  Additional travel may be necessary  MRO will assume the increased workload in half the time planned (July 1, 2018 versus January 1, 2019)

• MRO is looking for efficiencies and staff is prepared

 Doubling the number of entities does not necessarily entail the workload of all functions being doubled  MRO staff is prepared to take on extra workload – the staff is focused, dedicated to MRO’s mission, and MRO has a great culture  Workload and travel may level out over time  Contract help may be needed in the short term as we determine whether 14 FTEs is the right number

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2019 Budget Risks (cont.)

Implementation of emerging matters including directives from NERC/FERC

• Need for travel, meeting costs, systems, etc. to implement

Regional investments

• As NERC develops centralized systems, could lead to back-end

investments at Regions (i.e. the CMEP tool)

Large scale event

• Need for external resources, diversion of staff from other work, more

travel, etc.

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MRO Budget Assumptions

Salary increases average 3%

• Internal staff promotions
• Use of compensation study and comparison with NERC/Regions

Benefit increase of 6%

• No increase in cost for retiree medical

MRO facilities will be used to host all outreach workshops with the exception of one offsite to be held in the expanded footprint area An addition of 14 FTEs budgeted (45 to 59)

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Key Aspects of Funding (Assessments)

Responsibility to adequately fund functions under delegated authority Use of working capital reserves to manage short-term contingencies Penalties are not budgeted Funding or assessments are required to be based on end-use load

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PP13: Operating and Working Capital Reserves

Policy and Procedure 13: Operating and Working Capital Reserves

• MRO’s Operating and Working Capital Reserves are identified and quantified each year in the

Business Plan and Budget

• MRO’s Business Plan and Budget is submitted first to the FAC for review and then to the board

FAC and board approved 30-day reserve

• More of an art than a science
• An analysis is performed that establishes the targeted operating and working capital reserves

amount

Budget process “resets” the working capital at the current level of 30 days for the start of the budget year

• Adjustment to achieve targeted operating and working capital reserves in 2019 will decrease by

$449K (last year it decreased by $855K)

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PP12: General Finance

Policy and Procedure 12: General Finance requires approval of:

1. the reserves;

 Currently staff has proposed 30 days as the targeted working capital reserves  Reserves can be targeted at a different number of days; as noted, reserve setting is more of an art than a science

2. the retiree medical plan funding; and 3. the budget.

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Retirement Medical Plan Funding

Net Periodic Postretirement Benefit Cost for Fiscal Year Ending: Fiscal 2018 Fiscal 2017 Fiscal 2016

Service Cost $283,786 $194,190 $191,183 Interest Cost 85,549 64,503 60,794 Expected Return on Assets

• 74,904
• 60,314
• 51,638

Amortization of Net Loss/(Gain) 28,830 3834 Amortization of Prior Service Cost

• 38,601
• 38,601
• 38,601

Amortization of Transition (Asset)/Obligation Net Periodic Benefit Cost $284,660 $159,778 $165,572 Active Participants 37 40 42 Cost per participant $7,700* $4,000 $4,000

18 * Kept flat for 2019 BP&B

Reasons for 2018 Cost Increases

• Medical premiums increased more than expected (15% pre-65 and 37% post-65 vs. 6.6% expected), which

increased liability

• Discount rate decreased (from 4.19% to 3.63% ), which increased liability (based on corporate bond rates

matching plan cash flows at year end)

• Favorable asset performance (12.66% vs. 5.50% expected) partially offset liability increases

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Cash Management

Day-to-day cash requirements (short-term)

• MRO’s Operating and Working Capital Reserves requirement shall be the amount

necessary to satisfy projected annual cash flow and cash balance requirements

MRO has $2.0m in credit line (intermediate) MRO can request additional funding through NERC/FERC (long- term)

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Assessment Impacts

Working Capital Reserve Analysis

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Working Capital Reserve Analysis 2018-19 STATUTORY Beginning Working Capital Reserve (Deficit), December 31, 2017 2,617,518 Plus: 2018 MRO Funding (from LSEs or designees) 10,872,106 Less: 2018 Projected expenses & capital expenditures (11,726,738) Projected Working Capital Reserve (Deficit), December 31, 2018 1 1,762,886 Targeted Working Capital Reserve, December 31, 2019 (($15,980,354 / 365 days) X 30 days) 1,313,454 Less: Projected Working Capital Reserve, December 31, 2018 (1,762,886) Increase (decrease) in assessments to achieve targeted Working Capital Reserve (449,432) 2019 Expenses and Capital Expenditures 15,980,354 Less: Penalty Sanctions2 (59,253) Less: Other Funding Sources Adjustment to achieve targeted Working Capital Reserve (449,432) 2019 MRO Assessment 15,471,669

1MRO's projected reserve December 31, 2018 assumes that there will not be a material difference

budgeted versus actual/projected results from 2018. And it excludes the additional $1.5m transitional costs recovery.

2Represents collections on or prior to June 30, 2018.

2018 MRO Assessment (Approved by the MRO BOD 06/22/2017) 10,730,106 2019 MRO Assessment 15,471,669 Increase 4,741,563 44.2% 2018 MRO Assessment per NEL (289,292,028) 0.04 2019 MRO Assessment NEL (478,223,072) 0.03 Transition Costs in 2018 estimated at $1.5 m MRO has provided to NERC a cost estimate and funding options. A separate transition plan has been established to track all transition costs. Following the February 15 MRO Board call on the matter, the board identified three

• ptions for managing costs. None of these options impacts MRO's 2018 assessment.
• 1. Recover costs by resetting the reserves. One-time hit to 2019

budget. Unlikely

• 2. Capitalize costs and amortize over three years.

Not Likely

• 3. Transfer the SPP RE assessments to MRO in 2018.

Most likely

2018 and 2019 Budget Comparison

2019:

• Salary increase 3%
• 14 added FTEs
• Benefit increase 6%

2019: Meetings and Travel Increased outreach Planning one off-site workshop in the expanded MRO footprint 2019: Consultants & Contracts Provide the ability to react to resource concerns Office Costs: Due do increase in staff (e.g. office supplies, computer supplies, department functional training, etc.) Professional Services Additional services to address higher FTEs 2019 Fixed Assets: Increased depreciation; reduced Comp & Software in 2019 due to transition costs in 2018

21

(In Whole Dollars) 2018 Approved Budget 2019 Budget Variance 2019 Budget v 2018 Approved % Variance 2019 Budget v 2018 Approved Expenses Personnel Expenses Salaries $ 6,250,448 $ 8,386,511 $ 2,136,063 34.17% Payroll Taxes 391,324 539,356 148,032 37.83% Benefits 663,221 928,884 265,663 40.06% Retirement Costs 1,259,803 1,714,916 455,113 36.13% Total Personnel Expenses $ 8,564,796 $ 11,569,667 $ 3,004,871 35.08% 35.08% Meeting Expenses Meetings $ 93,950 $ 145,850 $ 51,900 55.24% Travel 655,430 905,314 249,884 38.13% Conference Calls

• Total Meeting Expenses

$ 749,380 $ 1,051,164 $ 301,784 40.27% 40.27% Operating Expenses Consultants & Contracts $ 535,127 $ 1,100,010 $ 564,883 105.56% Office Rent 733,700 743,500 9,800 1.34% Office Costs 628,013 858,013 230,000 36.62% Professional Services 229,550 413,000 183,450 79.92% Miscellaneous $ -

• Depreciation

578,000 626,000 48,000 8.30% Total Operating Expenses $ 2,704,390 $ 3,740,523 $ 1,036,133 38.31% 38.31% Total Direct Expenses $ 12,018,566 $ 16,361,354 $ 4,342,788 36.13% 36.13% Indirect Expenses Other Non-Operating Expenses $ - $ - $ - 0.00% (B) Total Expenses $ 12,018,566 $ 16,361,354 $ 4,342,788 36.13% 36.13% Fixed Assets Depreciation (578,000) (626,000) (48,000) 8.30% Computer & Software CapEx 286,170 245,000 (41,170)

• 14.39%

Furniture & Fixtures CapEx

• Equipment CapEx
• Leasehold Improvements
• (C) Inc(Dec) in Fixed Assets

$ (291,830) $ (381,000) $ (89,170) 30.56% 30.56% Total Budget (B + C) Total Budget $ 11,726,736 $ 15,980,354 $ 4,253,618 36.27% 36.27% FTEs 45.00 59.00 14.00

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Budget Variance Summary

Budget Increase 36% Personnel: 35% increase

FTEs increase to 59 by 2019 Salary increase 3% Benefit increase 6%

Meetings: 40% increase

Planning one

• ff-site

workshop in the expanded MRO footprint Increased travel and outreach

Operating: 38% increase

Consultants & Contracts to address staffing concerns

Increased use of

• ffice resources

Additional professional services to address higher FTEs

Fixed Assets: Decrease

One-time capital expenditures in 2018 for onboarding the new FTEs

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Cost Comparison by Program Area to Total Budget

23

Program 2018 Approved Budget 2019 Budget

Variance 2019 Budget v 2018 Approved Budget % Variance to Total 2018 Approved Budget

Administrative Services

$ 4,454,716 $ 5,012,792 $ 558,076 4.76%

Compliance

2,214,164 3,893,420 1,679,256 14.32%

Compliance Risk Assessment and Mitigation

1,917,465 2,819,682 902,217 7.69%

Reliability Assessments and Performance Analysis

1,548,845 2,081,137 532,292 4.54%

Training and Education

475,429 627,114 151,685 1.29%

Reliability Standards, Organization Registration and Certification

429,882 459,992 30,110 0.26%

Compliance Enforcement

571,921 656,638 84,717 0.72%

Infrastructure Security

77,979 368,589 290,610 2.48%

Situation Awareness

36,335 60,990 24,655 0.21% TOTAL BUDGET $ 11,726,736 $ 15,980,354 $ 4,253,618 36.27% For all programs, the budget increase is due to the FTE increase.

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Cost Comparison by Program Area

24 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Administrative Services Compliance Compliance Risk Assessment and Mitigation Reliability Assessments and Performance Analysis Training and Education Reliability Standards, Organization Registration and Certification Compliance Enforcement Infrastructure Security Situation Awareness 2018 Approved Budget 2019 Budget

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

Comparison of Budget Costs

2018 Approved Budget 2019 Budget

25

$5,012,792 3,893,420 2,819,682 2,081,137 627,114 459,992 656,638 368,589 60,990

Administrative Services Compliance Compliance Risk Assessment and Mitigation Reliability Assessments and Performance Analysis Training and Education Reliability Standards, Organization Registration and Certification Compliance Enforcement Infrastructure Security Situation Awareness

$4,454,716 2,214,164 1,917,465 1,548,845 475,429 429,882 571,921 77,979 36,335

Administrative Services Compliance Compliance Risk Assessment and Mitigation Reliability Assessments and Performance Analysis Training and Education Reliability Standards, Organization Registration and Certification Compliance Enforcement Infrastructure Security Situation Awareness

CLA LARITY TY ▪ ASSU SSURANCE ▪ RESULTS ULTS

CMEP Cost Trend

Shift Resources to Compliance and Risk Assessment & Mitigation

26 2014 Budget % to Total CMEP Costs 2015 Revised Budget % to Total CMEP Costs 2016 Budget % to Total CMEP Costs 2017 Budget % to Total CMEP Costs 2018 Approved Budget % to Total CMEP Costs 2019 Budget % to Total CMEP Costs Compliance $2,089,728 54% $2,102,260 50% $2,280,537 53% $2,053,526 48% $2,214,164 47% $3,893,420 53% RAM 1,148,955 30% 1,327,929 31% 1,405,446 32% 1,679,040 39% 1,917,465 41% 2,819,682 38% Enforcement 625,508 16% 794,484 19% 649,307 15% 589,376 14% 571,921 12% 656,638 9% Total $3,864,191 $4,224,673 $4,335,290 $4,321,942 $4,703,550 $7,369,740

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MRO FTE Trend

Increase to Accommodate Growth

27

MRO FTE Trend

Total FTEs by Program Area 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget 2017 Budget 2018 Budget 2019 Budget STATUTORY Operational Programs Standards and Registration and Certification 2.00 1.25 2.00 1.50 1.50 1.25 1.00 2.00 2.00 2.00 2.00 Compliance 7.25 10.00 11.50 13.00 10.50 11.25 10.50 11.00 10.00 10.00 16.00 Risk Assessment and Mitigation 1.00 1.00 3.00 3.25 5.75 6.25 7.00 7.00 9.00 11.00 15.00 Enforcement 2.50 2.50 3.00 3.00 2.75 3.75 4.50 3.00 3.00 3.00 3.00 Operations - Assessments, Event Analysis, Other 7.25 7.75 8.00 8.50 7.25 7.25 8.00 8.00 7.00 7.00 9.00 Cybersecurity Outreach 2.00 Total FTEs Operational Programs 20.00 22.50 27.50 29.25 27.75 29.75 31.00 31.00 31.00 33.00 47.00 Total FTEs Administrative Programs 6.50 6.50 7.00 7.75 10.00 11.00 11.50 12.00 12.00 12.00 12.00 Total FTEs 26.50 29.00 34.50 37.00 37.75 40.75 42.50 43.00 43.00 45.00 59.00

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Appendix

Detailed costs

• Personnel
• Meetings
• Operating
• Office Costs
• Office Rent
• Fixed Assets

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Personnel Costs

29

Personnel Expenses

2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget

Total Salaries

$ 6,250,448 $ 8,386,512 $ 2,136,064 34.2%

Total Payroll Taxes

391,324 539,356 148,032 37.8%

Total Benefits

663,221 928,884 265,663 40.1%

Total Retirement

1,259,803 1,714,916 455,113 36.1%

Total Personnel Costs

$ 8,564,796 $ 11,569,668 $ 3,004,872 35.1%

FTEs

45.00 59.00 14.00 31.1%

Cost per FTE Salaries $ 138,899 $ 142,144

$ 3,245 2.3%

Payroll Taxes

8,696 9,142 446 5.1%

Benefits

14,738 15,744 1,006 6.8%

Retirement

27,996 29,066 1,071 3.8%

Total Cost per FTE

$ 190,329 $ 196,096 $ 5,767 3.0%

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Meeting Expenses

30

Meeting Expenses

2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget

Meeting Expenses

$ 93,950 $ 145,850 $ 51,900 55.2%

Travel - Staff Business

429,030 605,614 176,584 41.2%

Travel - Member Reimbursement

226,400 299,700 73,300 32.4%

Conference Calls

• Total Meeting Expenses

$ 749,380 $ 1,051,164 $ 301,784 40.3%

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Operating Costs

31

Operating Expenses

2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget

Consultants & Contracts

$ 535,127 $ 1,100,010 $ 564,883 105.6%

• Office Rent

733,700 743,500 9,800 1.3%

• Office Costs

628,013 858,013 230,000 36.6%

• Professional Services

229,550 413,000 183,450 79.9%

• Depreciation

578,000 626,000 48,000 8.3%

• Total Operating Expense

$ 2,704,390 $ 3,740,523 $ 1,036,133 38.3%

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Office Costs

32 Office Costs

2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget

Phone Service

$ 107,000 $ 110,500 $ 3,500 3.3%

Internet/Cell

43,988 56,288 12,300 28.0%

Office Supplies

33,000 50,000 17,000 51.5%

Employee Member Events

9,000 20,000 11,000 122.2%

Employee Related Expense

26,000 51,000 25,000 112.1%

Computer Supplies and Maintenance

121,000 163,500 42,500 35.1%

Publications & Subscriptions

6,175 6,675 500 8.1%

Professional Dues

16,900 18,800 1,900 11.2%

Postage

2,700 6,200 3,500 129.6%

Temporary Services

• Finance-Filing/Reg Fees

3,000 6,000 3,000 100.0%

Equipment Repair/Service Contracts

12,700 27,700 15,000 118.1%

Bank Charges

21,000 27,000 6,000 28.6%

Presentation & Promotional Supplies

5,000 15,000 10,000 200.0%

Departmental Functional Training

161,550 209,350 47,800 29.6%

Insurance Expense

59,000 90,000 31,000 52.5%

Total Office Costs

$ 628,013 $ 858,013 $ 230,000 36.6%

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Office Rent

33

Office Rent 2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget Office Rent $ 718,700 $ 724,000 $ 5,300 0.7% Utilities 7,000 7,500 500 7.1% Maintenance 8,000 12,000 4,000 50.0% Office Cleaning

• Waste Management
• Total Office Rent

$ 733,700 $ 743,500 $ 9,800 1.3%

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Fixed Assets

34

Fixed Assets

2018 Budget 2019 Budget Variance 2019 Budget v 2018 Budget % Variance 2019 Budget v 2018 Budget

Depreciation

$ (578,000) $ (626,000) $ (48,000) 8.3%

Computer Equipment

270,000 245,000 (25,000)

• 9.3%

Capitalized Software

16,170

• (16,170)
• 100.0%

Furniture and Equipment

• Leasehold Improvements
• Total Change in Fixed Assets

$ (291,830) $ (381,000) $ (89,170) 30.6%