Consideration of scenarios for 2014 Program-Budget Ceiling Secretariat for Administration and Finance April 2013

2014 Program-Budget Assumptions Impact of statutory increases on RF personnel expenditures: $1.9 million Impact of 2013 increases Health and Life Insurance Salary / Post Adjustment Step Increases ,940.4

2014 Program-Budget Financing Considerations for All Scenarios Reduced Income to the Regular Fund: – Prompt Payments discounts to member States in 2014: $553 thousand (64% increase) – FEMCIDI 15% contribution reduced by $176 thousand (-58% decrease) ICR contribution to the RF to remain unchanged ($1.5 million). 100% of rental income now needed to cover repayment of demand notes for F Street renovation. $500k income contribution to Regular Fund no longer included, and expense for repayment to be charged to Rental Income Fund.

Why reduce rental income? Rental income served a dual purpose – To make payments on funds borrowed to finance renovation/improvements to GSB and Main building infrastructure during – To defray maintenance costs of leased office space and some of the GSBs maintenance costs In the past, $500 thousand from rental income was allocated to the Regular Fund as income exceeded required debt payments. In recent years, debt servicing and rental income are nearly equal; thus, all rental income must be used to make payments on the demand note. This prompted the Secretariat to transfer, every year, $500 thousand back to its funding account, effectively cancelling out the rental income of the RF.

Budget Scenarios 2014 Scenario 1: – Covers statutory increases to personnel expenditures (COLA, step increases, Health Insurance) – Excludes $500 thousand contribution to Reserve Sub-Fund – Ceiling increases by $940 thousand (1.12%) – Quota increase: 2.26%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014 Scenario One Ceiling Increase Includes:Statutory payments to staff members (COLA and step increases) Ceiling increase level:1.12% Quota income increase:2.26% Variation $thousand % Personnel53,024 54,964*1, % Non-Personnel30,347 29, % Reserve Sub Fund Contribution % Budget Ceiling $ 83,871 $ 84,811 $ % FINANCING Quotas81,105 82,938 1, % Less prompt payment discount % Net Quota Income80,768 82,385 1, % FEMCIDI contribution % ICR subsidy Other Income *-38.46% Total Financing $ 83,870 $ 84,811 $ % *Preliminary projection Includes Impact of Statutory Increases $ 1,940

Budget Scenarios 2014 Scenario 2: – Covers statutory increases to personnel expenditures (COLA, step increases, Health Insurance) – Maintains $500 thousand contribution to Reserve Sub- Fund – Ceiling increases by $1,440 thousand (1.72%) – Quota increase: 2.88%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014 Scenario Two Ceiling Increase Includes:Statutory payments to staff members (COLA and step increases) Maintenance of $500k contribution to Reserve Fund Ceiling increase level:1.72% Quota income increase:2.88% Variation $thousand % Personnel53,024 54,964*1, % Non-Personnel30,347 29, % Reserve Sub Fund Contribution % Budget Ceiling $ 83,871 $ 85,311 $ 1, % FINANCING Quotas81,105 83,438 2, % Less prompt payment discount % Net Quota Income80,768 82,885 2, % FEMCIDI contribution % ICR subsidy Other Income *-38.46% Total Financing $ 83,870 $ 85,311 $ 1, % *Preliminary projection Includes Impact of Statutory Increases $ 1,940

Budget Scenarios 2014 Scenario 3: – Covers statutory increases to personnel expenditures (COLA, step increases, Health Insurance) – Maintains $500 thousand contribution to Reserve Sub- Fund – Increase in non-personnel by 1.7% to compensate for inflation – Ceiling increases by $1,940 thousand (2.31%) – Quota increase: 3.49%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014 Scenario Three Ceiling Increase Includes:Statutory payments to staff members (COLA and step increases) 1.7% increase in non-personnel funding to cover inflation Maintenance of $500k contribution to Reserve Fund Ceiling increase level:2.31% Quota income increase:3.49% Variation $thousand % Personnel53,024 54,964*1, % Non-Personnel30, % Reserve Sub Fund Contribution % Budget Ceiling $ 83,871 $ 85,811 $ 1, % FINANCING Quotas81,105 83,938 2, % Less prompt payment discount % Net Quota Income80,768 83,385 2, % FEMCIDI contribution % ICR subsidy Other Income *-38.5% Total Financing $ 83,870 $ 85,811 $ 1, % *Preliminary projection Includes Impact of Statutory Increases $ 1,940