HomeMy WebLinkAboutStaff Report to set Unemployment Comp rateKittitas County
Board of County Commissioners
Agenda Staff Report
Agenda Date: January 7, 2020
Action Requested: Request the Board to adopt a Resolution to adopt the 2020 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 2020 would be .0050. The amount used to
prepare the 2020 budget was .0020. The fund balance as of was December 31, 2018 of $173,418, which is
sufficient for operation of the fund.
Year Claims Unemployment wages Rate of claims to wages
2014 47,816.65 13,920,762.08 .0034
2015 26,591.60 14,057,348.15 .0019
2016 31,776.39 13,959,468.70 .0023
2017 48,336.84 15,547,106.86 .0031
2018 30159.80 16,252,359.10 .0019
Average Rate .0050
The actual rate in adopted in 2019 was .00200.
Recommendation: Recommend the Board approve and sign the Resolution to adopt the 2020 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