Memorandum

City of Lawrence

Human Resources Div/Administrative Services Dpt

TO:	Cynthia Boecker, Assistant City Manager
FROM:	Lori Carnahan, Human Resources Manager
CC:	Frank Reeb, Director of Administrative Services Marlo Cohen, Management Analyst
DATE:	May 28, 2008
RE:	2009 Payroll Projections-Estimation Formula for KP&F, KPERS and Unemployment Rates

Initial estimates for the upcoming budget year payroll are generally run prior to information being received from KPERS and the State of Kansas for the KP&F, KPERS and Unemployment tax rates.

The Human Resources division uses the Excel trend function to determine what estimated amounts should be utilized in the upcoming year’s budget projections until the actual rates arrive.  If the actual arrive prior to final runs of payroll projections we update with the actual rates.  KPERS and KP&F generally arrive shortly after the state legislature adjourns, sometimes in time for our final runs.  The Unemployment rate rarely arrives prior to our final budget preparations.

To trend we are using 5 and 10 year historical data in Excel which returns values along a linear trend, meaning it fits a straight line (using the method of least squares) to the arrays known y’s and known x’s.  It returns the y-values along that line for the array of new x’s that we specify.  

Additionally, KPERS rates, by law, are only allowed to increase .6% per year, which they have done the past several years. 

2010 Estimated       2009 Estimated       2009 Actual  2008 Actual

KPERS            7.14%                   6.53%                   6.54%          5.93%

KP&F            14.31%                 14.58%                 13.51%*      13.88%

Unemp Tx     0.18%                   0.18%                 not avail         0.10%

*2009 decrease is the first since 2002; we continue to project an upward trend.

Please let me know if you have any further questions.