2013 BUDGET-BUILDING BULLETIN

 

2013 BUDGET-BUILDING BULLETIN—SEPTEMBER 15, 2012

The purpose of the 2013 Budget-Building Bulletin is to provide BSA local councils with the resources to help develop their 2013 fiscal year budget. Several departments within the National Council contributed to this bulletin. For budgeted items outside the BSA scope of expertise, we consulted The Kiplinger Letter.

For a complete guide to the budget-building process, consult Planned Budgeting (No. 80-236) at www.scouting.org/financeimpact. Click on the “Council Fiscal Management” tab and then on “Budget Building Materials” on the left.

With inflation sure to stay at rock bottom or close to it as economic growth next year barely edges this year’s 2 percent pace, councils should be able to keep a lid on expenses in 2013. Measuring December over December, the Consumer Price Index should climb by just 2 percent in 2013, a tad above this year’s likely increase of 1.8 percent. Wholesale prices, nearly flat this year, should also be up 2 percent or so, as subdued global growth continues to restrain commodity prices, which soared last year and the year before.

Salary
Benefit
Reimbursement for use of personal vehicle
Accident and sickness insurance
General liability insurance
Social Security taxes
IOI Pay
PeopleSoft Conversion
National information fee
National service fee
Energy
Truck
Travel
Commercial insurance
Rent
Office costs
Wireless service
Shipping costs
CPD training fees
FID training fees
Suggested timeline

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2013 Salary Budget Increase Guidelines—The 2013 salary budget increase guidelines are 3 percent (3%) based on projected labor market trends for performance increases. This guidance is for use when planning 2013 budgets.

The geographical salary ranges currently in place for commissioned and certified professionals will not change in 2013. The geographical salary ranges for commissioned and certified professionals can be found on MyBSA, Resources, Human Resources Gateway, My Pay and Benefits, in the Pay section.

Scout executive salary ranges will not change in 2013. Scout executives salary ranges can be found on the Scout executive’s copy of the March 2011 Intermediate Sanctions review or by contacting Toni Terrell, compensation team leader.

2013 Benefit Budget Increase Guidelines—The annual benefits enrollment period is October 29 through November 9, 2012. A summary of 2013 medical plan changes was distributed to Scout executives in June. For budget purposes, the council’s average increase in medical premiums for 2013 is 3.6 percent. The council’s cost for dental premiums will increase 9.7 percent for 2013 or approximately $3 per participating employee per month. There are no changes to the council’s cost for the remaining benefits. The annual benefit enrollment bulletin describing changes for 2013 will be distributed to all employees in early October. Details of the medical plans, along with rate schedules can be found at http://www.mercerhrs.com/scouting2health/pdf/2013_Medical_Plan_Designs_and_Rates_Active.pdf.

During annual enrollment, employees can log on to the BSA’s benefits website (https://ibenefitcenter2.mercerhrs.com) or call 800-444-4416 to review their benefits and make changes.

Defined Benefit Retirement Plan—Contribution rates for the employer and employee to the retirement plan have stabilized for 2013; rates will remain at 7 percent for employer contribution and 2 percent for employee contribution.

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Reimbursement for business use of a personal vehicle—The IRS standard mileage reimbursement remains at $0.555 per mile. The BSA recommendation provides employees with a stable monthly reimbursement to allow for personal budgeting by providing a flat rate per month, plus an amount per mile based on their average driving habits in the assignment. For example, $607.50 per month, plus $0.15 per mile, based on an employee driving an average of 1,500 business miles per month would reimburse at the IRS rate for 1,500 miles, or $832.50. Employees driving more than or fewer than the average business miles per month may be subject to an unreimbursed business expense or over-reimbursement, resulting in a personal tax liability to be added to the W-2 based on IRS rules. The council is responsible for being familiar with IRS rules, as well as calculating and applying taxable gross and appropriate taxes so the W-2 will reflect any taxable obligation that may occur.

We are aware that some councils have moved to reimbursing on the standard IRS rate based on actual business miles driven. This practice ensures that a taxable event will not occur for the employee, but can cause some cash flow challenges in months when fewer miles are driven and the employee’s car payment must still be made. In this case, councils should encourage employees to plan ahead and save cash from heavy driving months to fill in lean months.

The insurance rate for council accident and sickness is $0.77 per person/traditional and Learning for Life (LFL)/Exploring. The LFL curriculum-based program rate is $0.64 per person. Camper’s accident and sickness is $0.37 per camper per day. ACE American Insurance, administered by Health Special Risk Inc., will pay medical benefits not paid by other insurance, up to $15,000 accidental medical benefit or $7,500 for sickness benefit. The Risk Management Team is a resource that can help you with insurance needs.

General liability insurance experience rate will increase to a $1.25–$1.75 range. Your experience rate will be based on your council’s claim history for 2009, 2010, and 2011. Your 2013 premium is calculated as rate x membership (average traditional and Exploring youth and adult membership for Q4-2011 and Q1, Q2, and Q3-2012). You should have recently received your experience rate from the Risk Management Team.

The wage base for Social Security taxes is expected to increase to $113,700 for 2013. The new amount is $3,600 more than the 2012 wage base, which is set at $110,100, for an increase of 3.27 percent. Tax rates will remain at 7.65 percent for employers and employees. The final number will be announced in October or November.

IOI Payroll—For most councils that are using IOI Pay to process their payroll, there will be a slight change in the cost of shipping materials to you such as checks and W-2’s. In 2013, councils will be billed actual cost of shipping, versus the current flat fee. Councils can avoid or eliminate these fees by adopting complete paperless processing.

For those few councils using another payroll provider, the National Council will bill you $1,000 in January 2013. This annual fee is to cover the additional costs the National Council incurs to allow your council to use the IOI network throughout the year for human resources changes and file maintenance. You will not receive separate billing from IOI Pay for these services going forward.

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PeopleSoft Fiscal Software Conversion—Councils converting to the new software in 2013 can expect some modest costs related to the conversion.

  • You will need to purchase the standard printer for printing accounts payable checks. These can be purchased through the national office connection with CDW if you participate or purchased locally. The model description is VERY SPECIFIC. Cost range for budget $400–500.
    • HP 2035N (with MICR Cartridge—This model is being discontinued
    • HP LaserJet Pro 400 M401N (with MICR Cartridge—Newer model
    • Training costs for the conversion
      • The National Council will cover travel and living costs for one person from each council (two from councils with an SE Grade of 100). If you want to send additional personnel, you should budget for their travel to Dallas, Texas, and around $600 for housing unless they share a room with another person.
      • Basic skills in Microsoft Excel including sorting, filtering, formats and basic formulas are important for the expanded access to data manipulation in the new software. Training can usually be secured locally through a community college at a reasonable cost. Self-help books are available for $30–$50.

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      The national information system fee will remain the same in 2013, but will be adjusted slightly for those councils that have recently gone through a merger or consolidation.

      The national service fee for 2013 will remain at 3.5 percent of the 2011 professional salaries (account 7002) and clerical employee salaries (account 7003), up to the maximum of $40,000. If you exceeded the $40,000 ceiling for 2012, your 2013 fee will be increased by the percentage increase of your 2011 salaries over 2010 salaries, up to a 10 percent maximum. Example: Your 2012 fee was $48,783; your salaries increased by 6.2 percent in 2011. Therefore, your 2013 fee will be $48,783 plus 6.2 percent, for a total of $51,807. Your 2013 fee was calculated as part of your charter review in the spring of 2012.

      Better to allot more of your budget for motor fuels as rising global demand strengthens prices next year, even though supplies figure to be largely adequate.

      Gasoline prices at the pump look poised to stay above $3.70 per gallon throughout most of next year, and an occasional spike past $4 cannot be ruled out.

      Diesel, even higher. Strong demand from China, India, and other nations spells prices near $4 per gallon most of the year and a peak of $4.25 to $4.50.

      Heating oil...pricey, driven by the demand for diesel, its close cousin. Retail prices will average about $4 per gallon by the end of the heating season in March, even getting as high as $4.50 at times. Expect a similar scenario next fall.

      On a brighter note, natural gas will behave throughout next year. With supplies ample, spot prices will trend between $2.75 and $3.25 per million BTU.

      Propane too will be down a bit on average, and cheapest in the Midwest.

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      Higher oil prices plus rising global trade are sure to drive up shipping costs. Companies that rely on truck transportation can expect even higher fuel surcharges plus rate increases of about 4 percent, on average. Freight rail rates…rising about 3 percent.

      Airfares, climbing about 3 percent. Carriers will continue to rein in capacity, resulting in fewer flights and fuller planes, so booking early will remain paramount.

      Given the slack in hotel construction and the rising demand for rooms, hotels have strong pricing power. Figure on a 5 percent increase in room rates, and an equal hike in fees for using hotel-provided Internet hookups and other services.

      Meal costs will climb at least 3.5 percent, mainly because of higher food prices.

      Corporate car rental fees will jump 4 percent. There are fewer cars to go around.

      Business insurance rates will rise again next year, but by less than in 2012. Property casualty premiums will go up around 5 percent for small and midsize companies, but a bit below that for large ones.

      Car insurance rates, up 7 percent and catastrophic coverage is likely to cost 10 percent more, driven up by higher demand. This is on top of a 15 percent premium increase this year.

      Directors' and officers' insurance will remain about the same, with a few exceptions.

      Workers’ compensation insurance will stay flat, or even fall some, on average.

      But premiums vary greatly by state. For example, New York and Illinois will see a drop in rates of 1.2 percent and 3.8 percent, respectively. Premiums in Califonia, however, will jump by double digits.

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      In office leasing, landlords are gaining leverage, thus reducing concessions.

      Figure on office rents going up about 2.5 percent...a bit higher for Class A space.

      PCs and servers…10 percent cheaper, following double-digit drops this year.

      Wireless services…flat. Ditto, smart phones and tablet computers.

      FedEx, UPS and DHL…7 percent higher, in addition to fuel surcharges that are based on monthly spot fuel prices.

      The U.S. Postal Service will seek a 4 percent rate hike for nearly all services

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      Center for Professional Development Training Fees
      All sessions include travel unless otherwise noted.

      LFL Certification $950 travel incl.
      PD-L1 $1,500 travel incl.
      PD-L2 $900 plus travel*
      PD-L3 $1,250 travel incl.*
      PM-Series $1,100 plus travel*
      Specialized courses (invitation only) $750 plus travel
      First Time Scout Executive (invitation only) $250 travel incl.
      Senior Leadership Essentials (1 and 2, invitation only) $250 travel incl.
      First Time Staff Leader Orientation (invitation only) $250 travel incl.

      *Register 45 days in advance, and save $200 on these selected courses.

       

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      Development and Corporate Alliances Training Fees

      Fundamentals of Major Gifts (Philmont and Sea Base) Travel, lodging, and meals (additional fee for course held at Philmont)
      Local Council Fundraising Campaigns Travel and lodging (no fee)
      National Development and Fiscal Management Symposium $350 plus travel and lodging
      Senior Development Roundtable (by invitation only) Travel and lodging (no fee)

       

       

      Finance Impact Training Fees

      Fiscal Management I Travel, lodging, and meals
      Senior Fiscal Management Roundtable $100 plus travel and lodging

       

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      Suggested 2013 Budget-Building Timeline
      September 2012

      • Scout executive distributes budget-planning reports by cost center, the Finance Impact Department 2013 Budget-Building Bulletin, and other support materials, including the planned budgeting workbook, to appropriate volunteers and staff at the budget-building conference.
      • Local council staff and designated finance volunteers develop 2013 annual campaign plan.
      • The 2013 fundraising goals are reviewed and approved by the district and council Key 3.

      October 2012

      • Council committees and staff work on 2013 budget draft.
      • The 2013 fundraising goals and plan are approved at October executive board meeting.
      • Draft 2013 budgets are submitted to council service center for data entry no later than October 31.

      November 2012

      • Scout executive reviews draft budget with key volunteers and designated staff.
      • Adjustments are made to ensure a balanced budget that addresses key council goals, strategic plan, and cash flow needs.
      • Council finance committee or other appropriate officers review and approve budget.
      • The 2013 proposed budget is sent out at least a week prior to the council’s executive board meeting.

      November/December 2012

      • The 2013 budget is approved at the executive board meeting. (December should be a backup month.)
      • All 2013 council budgets must be approved by executive boards no later than December 31, 2012.

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