[PPT] - MRO 2020 Budget Review April 18, 2019 Tom Kent, Finance and Audit PowerPoint Presentation

SLIDE 1

MRO 2020 Budget Review

April 18, 2019 Tom Kent, Finance and Audit Committee Chair Sara Patrick, President and CEO Sue Clarke, VP Finance and Administration

SLIDE 2

Basis for 2020 Business Plan & Budget Increase

February 2018, NERC Board of Trustees approved dissolution

f SPP RE and transfer of 100 registered entities to MRO

July 1, 2018, transfer of registered entities from SPP RE to MRO 2018 Business Plan & Budget did not include transition costs; transition costs were tracked separately and totaled $2.2M Efficiency gains were recognized with the substantial combination of MRO and SPP RE

Savings recognized in total budget and NEL assessments

2

SLIDE 3

Basis for 2020 Business Plan & Budget Increase

2019 Business Plan & Budget is “best guess” at a “new normal,” and, as dictated by the established BP&B approval timeline, was developed and approved by the MRO Board of Directors prior to the transition date 2020 Business Plan & Budget is our first “normalized” plan and incorporates more informed decisions on the necessary staffing, as well as increased registered entity engagement and outreach 2020 Business Plan and Budget continues to recognize efficiency gains from the substantial combination of MRO and SPP RE

Savings continue to be recognized in total budget and NEL assessments

3

SLIDE 4

Budget Highlights

Budget costs increase by 9.8 percent from $16.0 million to $17.5 million Assessments increase by 9.8 percent from $15.5 million to $17.0 million

Neutralized swing in assessments due to penalty and

working capital reserve changes

Assessment stabilization adjustment of $557,718

4

SLIDE 5

Budget Comparison 2018/2019/2020

2018 Budget, $20,800,000

2018 Assessments, $18,900,000

2019 Budget, $15,980,354

2019 Assessments, $15,471,669

2020 Budget, $17,540,969

2020 Assessments, $16,983,251

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 Budget Assessments 2018 (Combined) 2019 2020 5

SLIDE 6

Budget Savings

2020 budget increases by $1.6 million

The integrated budget savings in 2019 was $4.8 million (23 percent)
ver 2018

─ Budget experienced a reset

2020 budget savings is $3.2 million (16 percent) over 2018

2020 NEL rate remains lower than original 2018 NEL rate before integration

NEL rate in 2019 experienced a net integrated savings of 19%
2020 NEL rate saves 10% over 2018

6

SLIDE 7

MRO Budget Assumptions

Salary increases

Average 3 percent
Internal staff promotions
Alignment of salaries and the incentive program to compete with market

Benefit increase of 6 percent MRO facilities will be used to host all outreach workshops with the exception of one offsite workshop Addition of 4 FTEs (59 to 63)

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SLIDE 8

2020 Budget Risks

Transition of SPP RTO Compliance Enforcement Authority responsibilities to MRO

Effort may consume more time and resources than anticipated

Appropriate staffing to manage the CMEP work

Recruiting, onboarding, and integrating four additional staff
Continued integration of entities’ transition from SPP RE

Increased participation of staff and advisory councils

Councils to support a number of initiatives that may result in increased travel and

meeting expenses

Active participation in industry and regional projects or efforts could consume

more resources than anticipated

8

SLIDE 9

2020 Budget Risks

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 Align tool)

Large scale event

Need for external resources, diversion of staff from other work, more travel, etc.

9

SLIDE 10

Cash Management

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

MRO’s targeted operating reserves requirement shall be the amount necessary to satisfy projected annual cash flow and

cash balance requirements to support planned operations, including reasonable contingencies

Projected reserves are held for future budget stabilization or for unforeseen changes in operations that materially

influence the organization’s ability to meet its functions under delegated authority. MRO may propose to set aside funds in a separate reserve account to be released in future periods to mitigate year-to-year variations in assessments.

MRO has $2.0m in credit line (intermediate) MRO can request special assessment approval from NERC/FERC (long-term)

10

SLIDE 11

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 president and chief executive officer

Reconcile

“bottoms-up” to “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

SLIDE 12

Strategic Priorities for MRO

Integrate entities into MRO

Provide registered entities with opportunities to:
be represented in stakeholder committees and other regional activities;
share their expertise with MRO staff and other stakeholders; and
learn and grow in the MRO region
Understand registered entities’ strengths and opportunities for improvement

Execute NERC-delegated functions

Identify, prioritize, and mitigate risks to the bulk power system
Conduct high quality execution of delegated functions, including oversight, analysis, and assessments
Seek continuous improvement in effectiveness and efficiency

Align our efforts with others across the ERO Enterprise

Support development and deployment of the ERO Enterprise Align project
Support development and implementation of an ERO Enterprise Compliance Oversight Plan process

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SLIDE 13

2018, 2019, 2020 Budget Comparison

13

2018 Budget, 2018 SPP Budget, 2018 Combined, 2019 Budget, and 2020 Budget

2018 2018 SPP 2018 2019 2020 Budget Budget* Combined Budget Budget Expenses Total Personnel Expenses $ 8,564,796 $ 5,220,356 $ 13,785,152 $ 11,569,667 $ 12,482,691 Total Meeting Expenses $ 749,380 $ 469,502 $ 1,218,882 $ 1,051,164 $ 1,284,632 Total Operating Expenses $ 2,126,390 $ 3,383,406 $ 5,509,796 $ 3,114,523 $ 3,538,646 Fixed Assets $ 286,170 $ 286,170 $ 245,000 $ 235,000 TOTAL BUDGET $ 11,726,736 $ 9,073,264 $ 20,800,000 $ 15,980,354 $ 17,540,969 FTEs 45.00 32.00 77.00 59.00 63.00

*Note: This represents 87 percent of the SPP RE Budget, which is the portion transferred to MRO.

SLIDE 14

14

2018, 2019, and 2020 Budget Comparison

2020:

Salary increase 3%
Total expense reflects 4

added FTEs

Benefit increase 6%

2020: Meetings and Travel

Planning one off-site

workshop

Advisory councils to sponsor

webinars supporting mitigation and outreach strategies 2020 Operating Costs-

Consultants & Contracts

increased due to expanded IT network, new tools and applications including ERO- wide projects

Professional Services –

includes compensated independent directors, additional HR and legal services 2020 Fixed Assets:

Reduced cost for update of IT

network hardware.

Reconfigure existing office

space.

(In Whole Dollars) 2018 Combined Budget 2019 Budget Variance 2018 Combined v 2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget Expenses Personnel Expenses Salaries 10,750,902 $ 8,386,511 $ (2,364,391) $ 9,334,262 $ 947,751 $ 11.30% Payroll Taxes 675,094 539,356 (135,738) 586,604 47,248 8.76% Benefits 950,979 928,884 (22,095) 1,061,581 132,697 14.29% Retirement Costs 1,408,179 1,714,916 306,737 1,500,244 (214,672)

12.52%

Total Personnel Expenses 13,785,152 $ 11,569,667 $ (2,215,485) $ 12,482,691 $ 913,024 $ 7.89% 7.89% Meeting Expenses Meetings 183,899 $ 145,850 $ (38,049) $ 175,900 $ 30,050 $ 20.60% Travel 1,034,982 905,314 (129,668) 1,108,732 203,418 22.47% Conference Calls

Total Meeting Expenses

1,218,881 $ 1,051,164 $ (167,717) $ 1,284,632 $ 233,468 $ 22.21% 22.21% Operating Expenses Consultants & Contracts 1,437,225 $ 1,100,010 $ (337,215) $ 1,306,319 $ 206,309 $ 18.76% Office Rent 1,171,406 743,500 (427,906) 774,000 30,500 4.10% Office Costs 2,472,392 858,013 (1,614,379) 930,327 72,314 8.43% Professional Services 428,773 413,000 (15,773) 528,000 115,000 27.85% Miscellaneous

$
Depreciation

578,000 626,000 48,000 590,000 (36,000)

5.75%

Total Operating Expenses 6,087,796 $ 3,740,523 $ (2,347,273) $ 4,128,646 $ 388,123 $ 10.38% 10.38% Total Direct Expenses 21,091,830 $ 16,361,354 $ (4,730,476) $ 17,895,969 $ 1,534,615 $ 9.38% 9.38% Indirect Expenses Other Non-Operating Expenses

$
$
$
$
$

0.00% (B) Total Expenses 21,091,830 $ 16,361,354 $ (4,730,476) $ 17,895,969 $ 1,534,615 $ 9.38% 9.38% Fixed Assets Depreciation (578,000) (626,000) (48,000) (590,000) 36,000

5.75%

Computer & Software CapEx 286,170 245,000 (41,170) 210,000 (35,000)

14.29%

Furniture & Fixtures CapEx

Equipment CapEx
Leasehold Improvements
25,000

25,000 (C) Inc(Dec) in Fixed Assets (291,830) $ (381,000) $ (89,170) $ (355,000) $ 26,000 $

6.82%
6.82%

Total Budget (B + C)

Total Budget

20,800,000 $ 15,980,354 $ $ (4,819,646) 17,540,969 $ $ 1,560,615 9.77% 9.77% FTEs 77.00 59.00 (18.00) 63.00 4.00

SLIDE 15

2018 to 2019 Budget Variance Summary

15

Budget Decrease 23% Personnel: 16.1% decrease Actual FTEs 18 fewer than combined 2018 Benefits difference due to SPP allocation of

verhead shared with

RTO Meetings and Travel: 13.8% decrease Decrease in the combined number of audit staff Operating: 38.6% decrease SPP higher rent, facility, and equipment leases SPP use of external consultant services for IT and HR Fixed Assets: 14.4% decrease SPP no computer asset related costs or leasehold improvements

SLIDE 16

2018 to 2020 Budget Variance Summary

16

Budget Decrease 16% Personnel: 9.4% decrease Actual FTEs 14 fewer than combined 2018 Benefits difference due to SPP allocation of

verhead shared with

RTO Meetings and Travel: 5.4% increase Increased travel of audit staff Increased outreach efforts and work with Advisory Councils Operating: 32% decrease SPP higher rent, facility, and equipment leases SPP use of external consultant services for IT and HR Fixed Assets: 21% increase SPP no computer asset related costs or leasehold improvements

SLIDE 17

2019 to 2020 Budget Variance Summary

17

Budget Increase 9.8% Personnel: 7.9% increase FTEs increase to 63 by 2020 Salary increase 3% Benefit increase 6% Meetings and Travel: 22.2% increase Planning one offsite workshop Increased travel and meetings for Advisory Councils Operating: 10.4% increase IT Network expansion New tools and applications including ERO- wide projects Fixed Assets: 6.8% decrease

Minor decrease a result

f IT capital purchases

in the prior year reducing need for additional hardware

SLIDE 18

Cost Comparison by Program Area to Total Budget

18

Program

2018 Combined Budget 2019 Budget %Variance 2019 Budget v Total 2018 Combined 2020 Budget %Variance 2020 Budget v Total 2018 Combined Variance 2020 Budget v 2019 Budget %Variance 2020 Budget v Total 2019 Budget

Administrative Services

$ 4,322,078 $ 5,012,792 3.32% $ 5,940,557 7.78% 927,765 5.81%

Compliance*

8,644,156 3,893,420

22.84%

3,824,656

23.17%
68,764
0.43%

Risk Assessment and Mitigation

2,971,429 2,819,682

0.73%

3,485,135 2.47% 665,453 4.16%

Reliability Assessments and Performance Analysis

2,876,883 2,081,137

3.83%

2,100,356

3.73%

19,219 0.12%

Training and Education

540,260 627,114 0.42% 747,121 0.99% 120,007 0.75%

Reliability Standards, Organization Registration and Certification

540,260 459,992

0.39%

484,696

0.27%

24,704 0.15%

Enforcement

810,390 656,638

0.74%

472,507

1.62%
184,131
1.15%

Infrastructure Security

54,026 368,589 1.51% 462,805 1.97% 94,216 0.59%

Situation Awareness

40,519 60,990 0.10% 23,136

0.08%
37,854
0.24%

TOTAL BUDGET $ 20,800,000 $ 15,980,354

23.17%

$ 17,540,969

15.67%

$ 1,560,615 9.77%

*SPP RE attributes all CMEP costs/expenses to Compliance; none to RAM or Enforcement.

SLIDE 19

Cost Comparison by Program Area

19

$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000

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

2018 Combined 2019 Budget 2020 Budget

SLIDE 20

MRO FTE Trend

Increase to Accommodate Growth

20

Total FTEs by Program Area 2018 Budget SPP 2018 Budget Combined Budget 2019 Budget Change 2020 Budget Operational Programs Reliability Standards and Organization and Certification 2.01

2.01

2.00 (0.01) 2.00 Compliance 10.06 22.00 32.06 16.00 (16.06) 16.00 Risk Assessment and Mitigation 9.97

9.97

15.00 5.03 16.00 Enforcement 2.99

2.99

3.00 0.01 3.00 Training and Education 2.10

2.10

1.92 (0.18) 2.00 Reliability Assessment and Performance Analysis 6.13 5.40 11.53 7.34 (4.19) 10.00 Situation Awareness and Infrastructure Security 0.33 0.10 0.43 0.33 (0.10) 0.33 Cybersecurity Outreach (not CIP Compliance) 2.00 2.00 Total FTEs Operational Programs 33.59 27.50 61.09 45.59 (15.50) 49.33 Administrative Programs Technical Committees and Member Forums

General and Administrative

2.85 4.50 7.35 2.85 (4.50) 3.00 Legal and Regulatory 0.92

0.92

1.92 1.00 1.67 Information Technology 4.02

4.02

4.02

4.00

Human Resources

1.00

1.00 1.50 Finance and Accounting 3.62

3.62

3.62

3.50

Total FTEs Administrative Programs 11.41 4.50 15.91 13.41 (2.50) 13.67 Total FTEs 45.00 32.00 77.00 59.00 (18.00) 63.00

SLIDE 21

CMEP Cost Trend

Resources Focused on Compliance and RAM

21

2016 Budget % to Total CMEP Costs 2017 Budget % to Total CMEP Costs 2018 Combined % to Total CMEP Costs 2019 Budget % to Total CMEP Costs 2020 Budget % to Total CMEP Costs Compliance $2,280,537 53% $2,053,526 48% $8,644,156 70% $3,893,420 53% $3,824,656 49% RAM 1,405,446 32% 1,679,040 39% 2,971,429 24% 2,819,682 38% 3,485,135 45% Enforcement 649,307 15% 589,376 14% 810,390 7% 656,638 9% 472,507 6% Total $4,335,290 $4,321,942 $12,425,974 $7,369,740 $7,782,298

SLIDE 22

Postretirement Medical Plan Funding

Net Periodic Postretirement Benefit Cost for Fiscal Year Ending:

Fiscal 2019 Fiscal 2018 Fiscal 2017 Service Cost $239,206 $283,786 $194,190 Interest Cost 74,863 85,549 64,503 Expected Return on Assets

76,554
74,904
60,314

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

38,601
38,601
38,601

Amortization of Transition (Asset)/Obligation Net Periodic Benefit Cost $198,914 $284,660 $159,778 Active Participants 47 37 38 Cost per participant $4,486 $7,700 $4,000 22 Reasons for 2019 cost decreases

Reduction in post-65 monthly premiums (from $232.90 for 2018 to $130.90 for 2019)
An increase in discount rate (from 3.63% as of December 31, 2017 to 4.20% as of December 31, 2018)

SLIDE 23

PP13: (Proposed) Reserves Policy

Policy and Procedure 13: Reserves

MRO’s 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

The FAC and board approved a 30-day reserve for the 2019 BP&B

More of an art than a science
An analysis is performed that establishes the targeted reserves amount

Budget process “resets” the targeted operating reserves at the current level of 30 days for the start of the budget year

Adjustment to achieve stabilized assessment with 2020 budget expenditures will be an

increase of $557,718

Projected reserves balance at December 31, 2020 is $2.8 million

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SLIDE 24

Assessment Impacts

Reserve Analysis

24

Beginning Working Capital (Deficit), December 31, 2018 (Does not include Penalties as Non-Restricted) 4,671,463 Plus: Penalty Sanctions Current (from Approved BP&B) 59,253 Plus: Penalty Sanctions Non-current 619,359 Projected Annual Cashflow Plus: 2019 MRO Assessment 15,471,669 Less: 2019 Projected expenses & capital expenditures (15,980,354) Operation Expenses Projected Reserve (Deficit), December 31, 2019 4,841,390 Targeted 30 day Operating Reserve, December 31, 2020 (($17,540,969 / 365 days) X 30 days) 1,441,723 To cover contingencies Less: Projected Reserve, December 31, 2019 (4,841,390) Projected Reserve (3,399,667) Projected Assessment Stabilization Reserves 2020 Expenses and Capital Expenditures 17,540,969 2020 MRO Assessment (9.8% Increase over 2019) 16,983,251 Adjustment from reserves to achieve targeted MRO Assessment 557,718 Assessment Stabilization Adjustment Projected Reserve (Deficit), December 31, 2020 2,841,949 Assessment Stabilization Reserves

Reserve Analysis 2019-2020

STATUTORY

SLIDE 25

PP12: General Finance

Policy and Procedure 12: General Finance requires approval of:

1. the postretirement medical plan funding; 2. the reserves;

─ Currently staff has proposed 30 days as the targeted reserves ─ Reserves can be targeted at a different number of days; as noted, reserve setting is

more of an art than a science

─ Projected reserve balance held for future budget assessment stabilization

3. the budget.

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SLIDE 26

Appendix

Detailed Costs

Personnel
Meetings
Operating
Consultants & Contracts
IT Costs
Office Costs
Office Rent
Fixed Assets

26

SLIDE 27

Personnel Costs

27

Personnel Expenses

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Total Salaries

$ 8,386,512 $ 9,334,262 $ 947,750 11.3%

Total Payroll Taxes

539,356 586,605 47,249 8.8%

Total Benefits

928,884 1,061,583 132,699 14.3%

Total Retirement

1,714,916 1,500,244 (214,672)

12.5%

Total Personnel Costs

$ 11,569,668 $ 12,482,693 $ 913,025 7.9%

FTEs

59.00 63.00 4.00 6.8%

Cost per FTE Salaries

$ 142,144 $ 148,163 $ 6,019 4.2%

Payroll Taxes

9,142 9,311 170 1.9%

Benefits

15,744 16,851 1,107 7.0%

Retirement

29,066 23,813 (5,253)

18.1%

Total Cost per FTE

$ 196,096 $ 198,138 $ 2,042 1.0%

SLIDE 28

Meeting Expenses

28

Meeting Expenses

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Meeting Expenses

$ 145,850 $ 175,900 $ 30,050 20.6%

Travel - Staff Business

605,614 666,832 61,218 10.1%

Travel - Member Reimbursement

299,700 441,900 142,200 47%

Total Meeting Expenses

$ 1,051,164 $ 1,284,632 $ 233,468 22.2%

SLIDE 29

Operating Costs

29

Operating Expenses

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Consultants & Contracts*

$ 1,100,010 $ 1,306,319 $ 206,309 18.8%

Office Rent*

743,500 774,000 30,500 4.1%

Office Costs*

858,013 930,327 72,314 8.4%

Professional Services

413,000 528,000 115,000 27.8%

Depreciation

626,000 590,000 (36,000)

5.8%

Total Operating Expense

$ 3,740,523 $ 4,128,646 $ 388,123 10.4%

*Details provided on additional slides

SLIDE 30

Consultants & Contracts

30

Consultants 2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget Standards Compliance

$ 403,000 $ 403,000

0.0%

RAPA G&A

32,000 32,000 0.0%

IT

191,000 286,200 95,200 49.8%

Finance

22,000 15,000 (7,000)

31.8%

Total Consulting Expense

$ 648,000 $ 736,200 $ 88,200 13.6%

Contracts 2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget Standards Compliance $ 100,000 $ 180,394 80.4% RAPA 81,400 81,400

0.0%

IT 200,200 227,275 27,075 13.5% HR

47,000

47,000 Finance

70,410 34,050 (36,360)

51.6%

Total Contract Expense

$ 452,010 $ 570,119 $ 37,715 8.3%

SLIDE 31

IT Costs

The majority of IT costs are in consultants and contracts. IT costs consist of networking essentials such as switches, routers, access points, etc. These devices are connected to form a data communication network that is managed by internal IT staff and IT technical support with IT professional resources such as CISCO and Atomic Data. MRO relies on this network to access, share, and store

information. Handling the inflow and outflow of information

requires that the network be evaluated for capacity and security; expanding the IT network ensures that data flow and storage on and through the system is sufficient.

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SLIDE 32

32

2019 and 2020 IT Budget

2020:

Salary increase 3%
Benefit increase 6%

2020 IT Operating Costs-

IT Consultants & Contracts

consist of the management and maintenance of the MRO communication network. Greater use of the network requires that the system capacity be expanded to accommodate large amounts

f data sharing, storage,

access, transfers, inflow and

utflow, etc. throughout the

system. 2020 Fixed Assets: Reduce costs for update of IT network hardware.

(In Whole Dollars) 2019 Budget 2019 Projection Variance 2020 Budget v 2019 Projected 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget Expenses Personnel Expenses Salaries 359,608 $ 359,608 $

$

530,912 $ 171,304 $ 47.64% Payroll Taxes 28,021 28,021 $

37,021

9,000 32.12% Benefits 63,581 63,581 $

75,718

12,137 19.09% Retirement Costs 68,772 68,772 $

72,089

3,317 4.82% Total Personnel Expenses 519,981 $ 519,981 $

$

715,740 $ 195,759 $ 37.65% Meeting Expenses Meetings

$
$
$
$
$

Travel 10,000 10,000

10,000
0.00%

Conference Calls

Total Meeting Expenses

10,000 $ 10,000 $

$

10,000 $

$

0.00% Operating Expenses Consultants & Contracts 391,200 $ 391,200 $

$

513,475 $ 122,275 $ 31.26% Office Rent

Office Costs

329,400 329,400

335,150

5,750 1.75% Professional Services

Miscellaneous
$
$
Depreciation

626,000 626,000

590,000

(36,000)

5.75%

Total Operating Expenses 1,346,600 $ 1,346,600 $

$

1,438,625 $ 92,025 $ 6.83% Total Direct Expenses 1,876,581 $ 1,876,581 $

$

2,164,365 $ 287,784 $ 15.34% Indirect Expenses Other Non-Operating Expenses

$
$
$
$
$

0.00% (B) Total Expenses 1,876,581 $ 1,876,581 $

$

2,164,365 $ 287,784 $ 15.34% Fixed Assets Depreciation (626,000) (626,000)

(590,000)

36,000

5.75%

Computer & Software CapEx 245,000 245,000

210,000

(35,000)

14.29%

Furniture & Fixtures CapEx

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

(381,000) $ (381,000) $

$

(380,000) $ 1,000 $

0.26%

Total Budget (B + C)

Total Budget

1,495,581 $ 1,495,581 $ $ - 1,784,365 $ $ 288,784 19.31% FTEs 3.97 3.97

4.44 0.47

SLIDE 33

Office Costs

33

Office Costs

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Phone Service

$ 110,500 $ 100,450 $ (10,050)

9.1%

Internet/Cell

56,288 62,532 6,244 11.1%

Office Supplies

50,000 50,000

0.0%

Employee Member Events

36,000 38,000 2,000 5.6%

Employee Related Expense

35,000 35,000

0.0%

Computer Supplies and Maintenance

163,500 166,500 3,000 1.8%

Publications & Subscriptions

6,675 10,500 3,825 57.3%

Professional Dues

18,800 22,095 3,295 17.5%

Postage

6,200 6,200

0.0%

Temporary Services

Finance-Filing/Reg Fees

6,000 6,000

0.0%

Equipment Repair/Service Contracts

27,700 38,000 10,300 37.2%

Bank Charges

27,000 15,000 (12,000)

44.4%

Presentation & Promotional Supplies

15,000 15,000

0.0%

Departmental Functional Training

209,350 275,050 65,700 31.4%

Insurance Expense

90,000 90,000

0.0%

Total Office Costs

$ 858,013 $ 930,327 $ 72,314 8.4%

SLIDE 34

Office Rent

34

Office Rent

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Office Rent $ 724,000 $ 750,000 $ 26,000 3.6% Utilities 7,500 9,000 1,500 20.0% Maintenance 12,000 15,000 3,000 25.0% Total Office Rent $ 743,500 $ 774,000 $ 30,500 4.1%

SLIDE 35

Fixed Assets

35

Fixed Assets

2019 Budget 2020 Budget Variance 2020 Budget v 2019 Budget % Variance 2020 Budget v 2019 Budget

Depreciation

$ (626,000) $ (590,000) $ 36,000

5.8%

Computer Equipment

245,000 210,000 (35,000)

14.3%

Capitalized Software

Furniture and Equipment
Leasehold Improvements
25,000

25,000

Total Change in Fixed Assets

$ (381,000) $ (355,000) $ 26,000

6.8%

SLIDE 36

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