PU550 Unit 3 District Budget Analysis Example

Four Hundred Ten Thousand Dollars Out of a Seventeen Million Dollar Budget, and Only Two Million of It Reachable: A Unit 3 Budget Analysis Showing Where a Composite District Health Department Can Absorb One County's Cut

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Purdue University Global

PU550: Public Health Leadership and Administration

Unit 3 Budget Analysis

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[Date]

The Aldermere Valley district and every figure here are composite; the fund structure and the research cited are real.

The Cut and the Calendar

Dunmoor's commission adopted a contribution of 1.98 million dollars for the coming year, against 2.39 million in the current one, a reduction of 410,000 or 17.2 percent. The district's fiscal year begins in 92 days. The board of health has asked for options at its next meeting, which is in 31 days, and the district's reserve policy requires two months of operating expense, which it currently holds at 2.7 million.

Step One: What the 17.4 Million Actually Is

1. Restricted categorical grants: 5.0 million. Each award names its allowable costs. Moving money out is not a budget decision; it is a breach of award conditions.

2. State formula funds with maintenance of effort requirements: 4.5 million. Reducing local spending below the base year puts the formula award itself at risk, which turns a 410,000 dollar problem into a larger one.

3. Fee-supported programs: 1.9 million of fee revenue against 2.4 million of cost, in programs the district is required to run. Cutting these raises the subsidy rather than lowering it.

4. Required local match and in-kind commitments: 0.9 million, pledged in writing against four awards.

5. Debt service and the lease on the Pellworth clinic: 0.6 million, contractual.

6. Unrestricted county and formula money supporting non-mandated work: 2.1 million.

7. Reserve: 2.7 million, governed by board policy, not an operating source.

The reachable pool is line six, 2.1 million dollars, which is 12 percent of the headline budget. A 410,000 dollar cut is therefore a 20 percent cut to the only part of the budget the board controls. The budget is 17.4 million dollars. The decision is about 2.1 million, and anyone treating the first number as the denominator will propose something the district cannot legally do.

Step Two: Four Options, Costed

1. Reduce health education and the speakers bureau from 3.0 to 1.4 full-time equivalents. Saves 148,000. Consequence: the district loses most of its capacity to build support for the smoke-free ordinance in two counties, and the community assessment slips a year.

2. Close the Thraxton clinic two days a week. Saves 171,000. Consequence: 2,100 visits a year move to the county 38 miles away or do not happen; no statute is breached; the board hears from Thraxton's commission, which pays the least per resident.

3. Raise food service permit fees from 285 to 380 dollars. Raises 196,000 at current establishment counts. Consequence: a fee increase was defeated 6 to 5 eighteen months ago; the arithmetic is sound and the politics are the obstacle.

4. Hold the vacant epidemiologist post and two other vacancies unfilled for the year. Saves 263,000. Consequence: outbreak investigation timeliness, already at 78 percent within 24 hours, falls further, and the accreditation measure that depends on epidemiologic capacity is put at risk.

Step Three: What Cannot Be Done, With Reasons

1. Take 410,000 from the grant-funded programs. Not available; the funds are restricted and the indirect recovery on them is already below cost.

2. Spend down the reserve. Available once, which is the problem: a recurring cut covered by a one-time source reappears next year with the reserve gone.

3. Reduce tuberculosis treatment or lead response. These are statutory duties already underfunded by an estimated 1.4 million, and a cut would expose the district to liability as well as harm.

4. Charge Dunmoor residents a fee for services other counties receive free. The district's enabling agreement forbids it.

Step Four: The Recommendation

A combination, in this order. Hold the three vacancies for nine months rather than twelve, saving 197,000 and preserving the epidemiologist recruitment for the final quarter. Reduce health education by one position, 71,000. Close the Thraxton clinic one day a week, 86,000. Bring the fee increase back to the board at 340 rather than 380 dollars, which raises 118,000 and is closer to the figure two board members said they could support. Total 472,000 against a 410,000 dollar need, with the margin held because the state formula award is itself under review.

Step Five: What the Board Should Be Told About Next Year

The analysis ends on recurrence rather than on balance. Three of the four measures above are one-year measures: vacancies get filled, a clinic day comes back, and a fee increase is a level, not a trend. If Dunmoor's contribution stays at the reduced level, the district will face the same 410,000 dollars next year with less to work with, and the structural question, which is that 31 percent of the district's revenue comes from three separate commissions with three separate politics, will still be unanswered. Local public health spending is strongly associated with preventable mortality, and the effect is a spending effect rather than an efficiency effect, which is the argument this district should be making to all three commissions rather than absorbing the cut quietly (Mays & Smith, 2011). The cut also falls hardest on the capabilities that no grant pays for, assessment, policy work and the agency's own management, and those are exactly the functions the foundational services framework was built to make visible in a budget like this one (Resnick et al., 2017).

A Note on What the Numbers Here Cannot Settle

Two figures in this analysis are estimates rather than ledger entries. The 1.4 million dollar statutory underfunding is the district's own calculation of what the duty as written would cost, not an audited number, and the 2,100 displaced clinic visits assume last year's utilization. Both should be labeled as estimates in anything the board sees, because public health expenditure figures are notoriously difficult to compare even between neighboring agencies, and a precise-looking number built on an assumption is the fastest way to lose an argument in a budget hearing (Leider et al., 2018).

References

Leider, J. P., Resnick, B., Bishai, D., & Scutchfield, F. D. (2018). How much do we spend? Creating historical estimates of public health expenditures in the United States at the federal, state, and local levels. Annual Review of Public Health, 39, 471-487. https://doi.org/10.1146/annurev-publhealth-040617-013455

Mays, G. P., & Smith, S. A. (2011). Evidence links increases in public health spending to declines in preventable deaths. Health Affairs, 30(8), 1585-1593. https://doi.org/10.1377/hlthaff.2011.0196

Resnick, B. A., Fisher, J. S., Colrick, I. P., & Leider, J. P. (2017). The foundational public health services as a framework for estimating spending. American Journal of Preventive Medicine, 53(5), 646-651. https://doi.org/10.1016/j.amepre.2017.04.015