HomeMy WebLinkAboutStaff Report set Unemployment Comp rateKittitas County
Board of County Commissioners
Agenda Staff Report
Agenda Date: January 19, 2016
Action Requested: Request the Board to adopt a Resolution to adopt the 2016 Internal Rate of
Unemployment Compensation.
Background:
For years Kittitas County has had the fund 511 Unemployment Compensation and charged
departments and funds for unemployment charges.
All local governments have a choice between either the Option 1 ‐ Tax Basis or Option 2 ‐ In‐lieu
contribution basis for making payments to the Department of Employment Security (DES) per
R.C.W. 50.44.030. The State auditor prescribes the accounting for Option 2 ‐ In‐Lieu Contribution
(Reimbursement) R.C.W 50.44.060. The choices for accounting for Option 2 are Method A; create
an internal service fund or Method B; participate with other local governments; Kittitas County
uses Method A.
The amount of these cash contributions depends on the estimate of future unemployment claims.
The estimates should be adjusted periodically, based on an experience. There may be different
rates for departments and funds within the same government. The periodic cash contributions
from operating funds will be charged to the functional expenditure/expense accounts in the
operating funds in the same manner as premium payments paid to the DES. Payments to the DES
must be made from the Unemployment Compensation Fund. Interest earnings on investment of
the contributions may be used for the benefit of the Unemployment Compensation Fund (thereby
reducing charges to the operating funds) or the general (current expense) fund per RCW
35.39.034.
This rate was established during the preliminary budget process. The rate was established by
taking the yearly charges paid for unemployment divided by the total yearly unemployment wages,
to get the percentage, and averaging the rate over the past 2 years. The average rate for 2016
would be .0040. The cash balance as of December 31, 2015 of $178,446, which is sufficient; we
are recommending the rate for 2016 be .0034 which was the rate used in the preparation of the
2016 budget.
Year Claims Unemployment wages Rate of claims to wages
2011 55,830.58 12,162,006.15 .0046
2012 28,078.12 12,549,608.82 .0022
2013 59,321.88 12,785,039.67 .0046
2014 47,816.65 13,920,762.08 .0034
Average Rate .0040
The rate in 2015 was .3439%
Recommendation: Recommend the Board approve and sign the Resolution to adopt the 2016 internal rate for
Unemployment Compensation.
Handling: Original to Judy Pless, Budget & Finance Manager
Lead Staff Judy Pless, Budget & Finance Manager
Kittitas County Auditor’s Office