 But now that Gene's here, we'll go ahead and get started. Good evening, welcome to the meeting of the committee to hold on October 27th, 2008. We will do the call to order, please. Warren. Here. Bauch. Here. Decker. Absent. Geshe. Excused. Hannah's here. Heidemann. Excused. Kittlesen. Here. Clayunus. Here. Meyer. Here. Montemore. Rindfleisch. Ryan. Absent. Shirk. Here. Vanderweily. Excused. Verhasen. Absent. Longerman. Absent. Nine present. We have a quorum. A quorum is present. We will continue with the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you and good evening. I would entertain a motion to approve the minutes of the September 22nd Committee of the Whole Meeting. Moved and seconded under discussion. Hearing nothing, all voting to approve the minutes of the September 22nd, 2008 Committee of the Whole Meeting. Aye. Opposed? Motion carries. Item number five. Council document 5-30, discussion and possible action on a communication from Alderman Boren, submitting Milwaukee Journal article raising fees for big box stores to get second look. Thank you, Mr. Chairman. Motion before we discuss. Move to. We'll be moved to file. Second. OK, a motion to file and a second under discussion. Alderman Boren. Thank you, Mr. Chairman. This was an article that was back in the Milwaukee Journal and sent it all back on May 18th. And it had to do with what some cities are doing as far as raising fees for big box stores when they leave town or when they're in the development of letting those stores in. I just want to read a little bit of it to you. And then I'll pose a question that ended up when the document went to the committee. If a two-year-old law's home improvement store in Wabatoza were to go under in this economic downturn, and no one is suggesting it will, residents of the Milwaukee suburb wouldn't have to look at its empty shell for long. Like many communities across the country, Wabatoza has taken steps to protect itself against so-called ghost boxes. The hulking remains of what are often big box stores left vacant when realtors downsize or relocate. Wabatoza's provision adopted as part of a big box ordinance in 2005 requires developers of buildings 50,000 square feet and larger to set aside 20 cents a square foot in City Land Conservation Fund, about $28,000 in the lowest case, which can be tapped to raise the building if it sits empty for more than a year. Wabatoza has done this, however, the other part of the article is that many communities are reluctant to have this raising fee because of the fact that they say it might stifle development. The question that I posed when I sent this document to Planning was, should the city of Sheboygan consider a policy that protects the city from so-called ghost box stores left vacant when retailers downsize or relocate? We go back in history just a little bit. If you remember the Kmart store on South Business Drive, that was a vacant store. When Kmart moved into town many years ago, it was a former discount store. I can't remember the name of it. I think it was Welds or something like that. So in that case, it was kind of a win-win for the city and the Kmart Corporation because they were able to come in and use that existing building and not to have to spend money on real estate to get their business up and running. So I had called Paulette Enders and wanted to know if she or Mr. Sokolowski would want to make some comments on the question that I posed regarding if we should consider an ordinance here in Sheboygan. I'll go in here. I just have another question, and really it relates to the Committee on Environmental Impact. And I don't know the answer to this question. From an environmental standpoint, are we better off tearing a building down like that with all the impact? Or are we better off using some sort of goodbye fund to promote, do you use that $28,000 to promote to potential new tenants? Is that money well spent versus tearing it down? And I don't know the answer. OK, thank you. Alderman Montemayor. Thank you, Chairman Belk. Another thing to think of, in our neighborhood when a house that was worth $96,000 and gathering real estate taxes for that, as soon as it was torn down by the developer, he then paid taxes on $17,000. So as soon as the building is gone, what we collect for property taxes is hugely less. So it's that trade-off of, is this unsightliness worth the $80,000 in that case or whatever of value in lost revenue? OK, Alderman Reinflesch. Thank you, Mr. Chair. Very similar sentiments, actually, regarding that. Knowing, certainly, the assessed value, if you look at your property tax at your land and your building, certainly your assessed value on the building is much higher than the vacant land. And I think the other cities that are successful in having these box-raising fees are cities that are large enough and isolated enough or have their own massive enough population to warrant storage moving in and willing to pay that. All atosa, wealthy area, there's always going to be some kind of storage that moves in that area. I think we're looking at this question because of, we have some empty stores now, ourselves, and it's hopefully trying to find solutions to how the problem is created and then how do we solve that problem? Do we raise them? Do we not raise them? I think it's an important conversation we have. But we're not isolated enough like all atosa ourselves when someone can come in and go into Schwagen-Falls-Coller area right across the street and not have to do that. Whereas in the city, they would. And I would hate to see, potentially, we brought out K-Marks what happens if they ever move out to that area there, if we impose a structure, a fee on that Walmart. Will anybody go into that property if we impose one now, raising fee of some kind of? So I'd be very careful, but I would like to hear definitely some ideas regarding this problem that we have because it isn't going to go away as we hopefully expand and hopefully annex other areas and have future development areas. What else can we do? The other thing that I question is, the zoning would have to be something specific to a retail big box outlet if we certainly do it as a commercial outlet. I think we could be doing our business park and factories and doing another prohibition on future growth if we just do general buildings. A hospital, a for-profit hospital would be definitely bigger than 50,000 square feet in all the stories, but making sure we use it for what we know is appropriate. I think the bigger picture, too, the last thing I'll say about this is, if you look at the K-Mark and the Walmart properties, is as we allow them to develop, we allow them to plow over all that land with asphalt. And we have these huge, non-broken up asphalted areas with the building, ugly, empty building in the background. I think that, to some degree, is one of the larger inhibitions that people look at, I'll put my business in this area, well, you have this faded asphalt parking lot with stripes that are fading, and these ugly buildings that are there, whereas I think if we have that parking lot broken up, have some greenery, have some plantings, require more outlots before we do any further developments, that building, if you look in the south side where we have the Pig Wiggly and Washington Square down there, they're filling in those outlots. It looks far more approachable to people who like to move in the area than what the Walmart does, which is so far away. So I think there's a lot of issues here that aren't just simply raising fees, that I think we do need to take a look at, but I'm not sure raising fees are the way to do it at this point in time. Okay, thank you. In the interest of time, because we only got about 10 minutes for this, do you want Steve to be able to speak? Okay, Steve, do we need to open the, vote to open the floor, Steve, or anything like that? It's not a good part of the thing we do. The whole committee is here. Oh, please. All right, Chairman Bauch, all the persons, thanks for having me here this evening. The challenge that our planning department deals with quite often is taking a look at these stars. I think one of the biggest things that we're taking a peek at right now that you're all familiar with is the Taylor Drive master plan. Obviously there's several vacant stores in that area, so I think one of the things that we attempt to do more than anything is try to work with the development community and work amongst ourselves to figure out what is exactly the right answer to get these stores, not only opening, but thriving, and that whole corridor, thriving the way it once was. When Walmart was at the Taylor Heights shopping center, that was a thriving area. I mean, we did still have the Sentry area that we are dealing with, but it's a matter of just working the market and seeing who's available and trying to get those stores filled. One of the things that the planning department did as a result of Alderman Balck's request was just to take a look at a couple of other strategies that some other communities are looking through in Wisconsin and the United States, and they really focus on two strategies. One, in essence, is preventing vacant stores, and that has to deal more with preventing vacant stores is not allowing more development than the community can absorb. So that's what those strategies focus on, and another one is a strategy that is to address retail vacancies, because overt development tends to be the root cause of the retail vacancy. So just a couple of the things that we found was that one of the most important ways, and I don't know if I necessarily totally agree with this, but one of the ways you can do it is limit where and how much land is owned for retail development. Any time a rezoning comes to the plan commission, to staff, and to the common council is do we have enough land zoned commercially already? Is it worthwhile rezoning another parcel to allow for additional development or do we have the commercial property already available that someone could redevelop? I think one of the blesses and the curses that the city of Shboygan has is that we are pretty set in our limits in terms of annexation. We can't tell someone oftentimes, hey, we have this large green field that's available for development. Sometimes that's a curse when we really have an industry that we really want to bring in, but the blessing of it is that we have to refocus and redevelopment and we've done a great job of redevelopment in the city of Shboygan, taking a look at Blue Harbor, taking a look at the grand stay, the Highland House, and oftentimes those are a result of the long term plans such as the Harbor Center Master Plan and the Taylor Heights Master Plan that you do this proactive type of approach and indicate to developers and people that here are some spots that are available for you to take a look at that maybe they wouldn't have otherwise. Adopting a store size cap, that basically is dealing with, some communities deal with specifically no stores over a certain size, 50,000, 60,000, and basically what you're trying to do there is protecting the character of the community by ensuring a new development is in scale and keeping with existing buildings. You can insist on multi-storey or mixed use buildings instead of just having the one large box, big box retail, maybe there's some additional mixed use offices or something in conjunction with that. So when it does potentially have it, if someone possibly goes under, there's other things that are happening in that particular spot to keep it going and hopefully encourages other development to take care of that retail spot. And then another item is just creating an economic impact review standard and what that has to do with is in essence taking a look at the economic impacts that include the effect on local businesses, jobs and wages, and then the fiscal impact which is oftentimes what we're interested in as well is which it refers to the impact on the tax revenue and the government costs associated with the new development. So those types of things happen when you're reviewing reasons or the proposal that you would have before you. The other strategies that we took a look at have to do with the existing retail vacancies and those, again, as Alderman Bauch mentioned, have to do with, say for example, the demolition bond which is what Wauwatosa, as you mentioned, is taking a look at and that has to do with actually asking for a developer to provide fees in advance as part of your approval process that should it become vacant, the city has an opportunity to use those funds to say, for example, if it's becoming an eyesore and it's been too long and it's not being maintained and it turns dark and it's just not giving the impression that we're after to utilize those funds to actually demolish the building and go from there. Obviously anything that we would be working with would have to be worked out with Steve McLean in terms of the legalese in terms of all these as well. And then another one just refers to a dark store ordinance and that's oftentimes when you have these big boxes, they have a competitors, a non-compete clause with other retailers that might have a similar type product that they sell and they never want to have a competitor taking their spot. So what the dark ordinance would do is basically require them to try to get it back on instead of just holding it and paying rent and keeping it dark, get it back out there and get it out for lease to try to have it filled. So those are just a couple of strategies I'm available for questions. I don't know if I answered that, the question that you were after, but no question that the development staff as projects come in, I always take a look at one of the questions was the environmental aspects. Anytime that new development comes in, we have stormwater management ordinances, we have parking ordinance, maybe one of the things we need to do that's oftentimes referred to is the parking ordinance. A certain requirement, maybe some of those things need to be looked at with regards to oftentimes the retailer knows how many spots they need instead of having the giant parking lot for Christmas and Thanksgiving that happens once a year. Taking a look at utilizing some of these, what you could refer as seas of asphalt and maybe have an additional buildings constructed on there. Say for example, like Kmart, instead of just having a parking lot, having us as development staff take a look at it and say, hey, maybe there's some opportunities to get some buildings out front and have more of a better economic impact for the city as well as a better aesthetic, say for example, on South Business Drive. So I think the other thing that I haven't touched on which we try to do as often as we can is really the design aspect too. We really try to seek a better design, a quality design so that if these do go dark, maybe there are other users out there that take a look at the building and can subdivide it or partition it off because the building is constructed in a quality manner that they're interested in being there and utilizing it. So I think design is a real important key to this as well. So again, I can answer any questions or... Thank you, Mr. Chairman. I have just a quick one. When would the city kind of be would it be the responsibility to demolish a building? Let's say out where on Taylor Drive where Walmart was in that string of stores, let's say a developer wanted to come in just say hypothetically build condos there. Is that usually worked out by the present owner of the building when the property changes hands? Who would do the demolition out there in that case? As part of, with that type of question, oftentimes that would be between the purchaser and the seller to make that determination as part of maybe selling price or negotiations between them. Obviously if that was the case, we'd be encouraging do that and try to get things moving along and putting in dustless conditions if it's gonna be a while for the development. But typically those types of things would be between the buyer and seller unless the city participated in using a tool. Let's say for example as a TIF funding or something where we take on a larger project and we decide that there's some benefit in there for us that we would potentially use TIF tax increment financing as a tool for redevelopment to occur. Thank you. Okay, quick one. All in compliance, we need to move quickly this topic. Thank you very much. I just want to make a comment. Salvation Army is looking for a place to do our Christmas distribution, 5,000 to 10,000 square feet, very hard to find in the city and there are empty stores all over the place but they're all locked into leases or into development agreements, whatever it is. And I just think that somehow let's be more creative about this and they're holding onto these things for nothing. They're holding on to them to pay taxes on them and they're not allowing any other uses. So I think the creativity is very important. Thank you. And all the person, Myron. Thank you, Mr. Chairman. I have a lot of faith in our city planning development and our city planning commission. I think they do a really fantastic job. In my area, in the last couple of years, a developer has purchased quite a few properties. Two homes have been tore down, two restaurants have been tore down and a bank is now demolished. And that's a lot of tax revenue that is gone and it is the developer that paid to demolish all this, the city did not have to pay a dime but the city lost money on it. But hopefully this land will be developed in the future but I do think that our city planning development department and the commission do a fantastic job. They really monitor how things are brought in and I think they're doing a great job. Okay, great. Okay, in that case. Just don't look at the point. Okay. I promise I'll keep it going. Hopefully going forward with city development as well as the council keeps in mind that while we look at restrictions for our own population of 56,000 or what have you, we don't live in a vacuum and that we do have outlying border areas that they can make decisions based on our population that don't keep us in mind. So all the developments going out in Deer Trace impacts our ability to redevelop our properties even though it's not in the city of Sheboygan. So hopefully we can take a more regional approach as well that they know when they're developing properties it does impact our tax base here as well. Okay, very good then. On item number five, council.530, the motion is to file all in favor. Aye. Opposed? Motion carries. I'm gonna delay item number six. We're gonna go right to item number seven in the interest of time. The presentation on the health plan for the city employees and I introduce Eric Serrano, our representative, the city's representative as our health plan negotiator. Eric, please. And you are at Gish's seat. There you go. Is it on? Let me know if I talk too soft, so. All right, this is a renewal for the dental and the, for the dental insurance and the health insurance for the city of Sheboygan. We're gonna talk about, excuse me, the dental renewal, the health insurance. We're gonna do a quick program overview. Go through the insurance renewal at more of a 10,000 foot level. I spent four hours with Humana, excuse me, Susan Hart, Alderman Gish, Alderman Kittleson and reviewing the renewal in Terry Hansen. Reviewing the renewal with Humana. So I'm just trying to catch the high level stuff for you. Okay. Some renewal alternatives. We're gonna talk about the wellness initiative. That your wonderful Alderman Kittleson has really spearheaded and driven that through some recommendations and then takes some questions. What's going on here? The dental renewal. Give me one second. Sure. Well, he's getting that set up. I guess I'll just work his floor for a minute. We have a team in the city that's working very hard to keep healthcare costs in control. All the companies that our families work for and our taxpayers work for are going through that right now, getting ready to do their 2009 planning where we're all signing up for our employer benefits and things of that nature. Susan Hart, ask Eric to come tonight so that that team can present what it looks like for next year and so that we can talk about what luck we had with 2008, some of the changes we made in 2008 and what that means for moving forward. Okay, thanks. All right, for the dental renewal, I figured I'd get this out of the way because it's pretty cut and dried. There's a 6.7% increase over last year and we'll go through the numbers a little bit, a couple slides. Last year we added a passive PPO network. Trying to take advantage of the dentist that were in network to get deeper discounts so we can save some costs on the dental plan. This is a new area of what they call transparency which is trying to find out what the cost of care is before you receive it. And we'll talk about that a little bit more in the health insurance. One of the concerns I have for Sheboygan area is there's a ongoing dental coalition where the dentists have signed an agreement that they will not sign up with health insurance companies to give discounts for employers. And that is, I don't wanna call it an injustice because I think that's a little bit of a strong phrase, but they're penalizing the people that they're actually serving and they're penalizing the employers who are paying the majority of the dental insurance premiums. So I raised it as a concern going forward and I thought it would just be interesting. So that's a dental union that's saying we won't accept what? Contract with health with dental insurance carriers. We won't sign on any more carriers because that makes it more competitive and that drives prices down. Correct. That allows them to kind of dictate the price that they charge. The dentists are unionizing. So, but overall the plan is running well for the dental insurance. I kind of did a rundown of how the plan is running and network claims that where we're getting the discounts, we spent $40,000. Out of network claims it's 252,000 and the intent wasn't to drive people to the network. The intent was really to get the additional discounts associated with having the network with humanity. So, and you can kind of see the claims experience, the annualization of the claims about third lines down. We're showing that the claims are expected for the rest of this year to come in at 438,000. Quick question from Almond Reinhart. Yeah, regarding the page here, I know it's not that we tend to drive into the network versus out of the network. Correct. However, my private insurer company that I work with is forcing us to go in network versus out of network. How can we do the same thing? I mean, that's a substantial cost difference. They're obviously not from the same service, but we seem to have a lot of people going out of network versus trying to go inside the network for additional discounts. The intent last year was for the longest time you guys have had a plan that there's been no network. The intent of this was merely to give them the opportunity to get to those for dentists that were in network. I think it's more of a union contract thing or that's more of a city decision piece more than anything that we could do. So. Is that contractual? If the union agreement, did it stay that way? I think it is because all the policies for the unions are in their contracts. Okay. So. Enulized claims based on the experience is 438,000. You can see the trend factors of 6%, which is what the dental increases are. The increase in dental that's incurred. Then there's the adjustment factor for age and everything else that impacts the plan. So the projected claims for 2009 go up about $30,000 to $468,429 or projected increases the 6.7. Okay. This is just the dental expenses. The dental premium hadn't gone up for four years before we took a look at it. So it's what they're charging the employees stayed consistent from 2003 to 2007, if my memory serves me right. So we have 118 single contracts and 362 family contracts. The fee is what he managed charges to process all the claims. And that's 373 per member per month. The current monthly premium, which is equated to the claims amount for 2008 was $25.98 cents for single 9259 for families. And you can see the monthly total with the member enrollment amount multiplied times the monthly premiums. And then going forward the renewal fee is the admin fee for humanity staying the same. And there's a slight adjustment for the 6.7% adjustment for the 2009 premiums. Premium over, or the health insurance overview. I always like to start out with headlines that have occurred in the past year. So cost shifting to the workers to save money on health plans. Consumers will have greater stake in healthcare. The president of Humana has a, I always thought an interesting saying that the way that we're gonna change healthcare is having employees with skin in the game. The medical advances offer better quality and value. The importance of that is people have to find out what's out there because they've operated in the vacuum of we've got one provider in this area that we could go to. Last year, as you know, we opened it up to both providers in the area as well as providers all across the state of Wisconsin. And we want people to start becoming more engaged in that process of finding out is it less expensive at Theta Clark or ThetaCare in Appleton or at St. Nicholas in Sheboygan? Becoming consumers and getting involved in that. And then healthy lifestyles could help lower healthcare costs and we'll get into that with the wellness piece. And some of the other components of the plan that we put in place. The review of why the program changed in 2008. Just some historical data from 2000 to 2007. The city had the search network with Prairie States and the cost increased 155% over that period of time. The network had a single primary care provider system which was only St. Nick and PHN. And then you could go to south of Sheboygan but the primary care was really served in Sheboygan on a majority basis. The plan focused cost controls on administration and not claims. The plan designs had little consumer engagement or education and we'll get into what the plan design is in a slide or two. The pharmacy benefit lack control on prescription drug utilization and I've got a comment that plays to that in a couple more slides. The plan was missing a mechanism to prevent small claims from escalating to large claims which is very important because that's where we can capture some dollars that I'd rather capture it and treat somebody when they are just diagnosed with a cancer or a heart issue as opposed to capturing it after they've had that issue explode. The plan excluded two significant key cost saving components. One was disease management and the other one was a wellness program. And that was more of a decision. Prairie states had offered the benefit to the city, the city decided not to follow up or take that, those components. So that was two things that I thought we could get some additional bang for your buck with. Humanity added clinical programs, disease management, wellness program, health risk assessments and technology. And the interesting part about that technology is when we brought that up at a meeting last year Prairie states, one of the comments was well, we have that. And everybody in the meeting said, well, we didn't know that. And they've had them at that point for seven or eight years. So there was a communication piece that I think was also not, not in Prairie states, Prairie states did a wonderful job for the city. I just think there wasn't, they weren't getting the information that they always necessarily needed. Humanity has both primary care provider networks or providers in network in Sheboygan. Humanity has deeper discounts for Aurora and other providers outside of Sheboygan. So when people were leaving Sheboygan to get care at Fratert or Columbia St. Mary's, they were getting deeper, they'll get deeper discounts with Humana than what they were getting with the search network. The discounts for St. Nicholas Hospital and PHN, we knew were about 5% less with Humana than what it was with the search network. The thing we didn't know was when the employees paid their bill within the first 30 days after they got their explanation of benefits with their Benny cards, we got an additional 10% discount. So we went from being 5% under to all of a sudden being 5%, having a 5% greater discount than what was in place with search. And that was just by, we actually found out, because Nancy Buss said, I've got a 10% discount on my bill and what should I do with it? So employees were engaged. And then Humana also added the health miles by Virgin, which is that pedometer system, pedometer based system that you guys are all part of as well as all the people. The first needs plan that you had had a $0 deductible and network, 100% co-insurance. There was a $12 office visit copay. There was a $50 emergency room copay. And then for generic drugs, it was $10 for brand name drugs. It was a $20 copay. And then out of network, there was still no deductible, but there was 80% co-insurance with a $1,500 individual out of pocket maximum and a $4,500 family out of pocket maximum. And that $50 emergency room copay also applied to the out of network. Very little consumer engagement as far as people caring about what the cost of healthcare is under this plan. Very little about what the cost of drugs were under this plan. So we moved to a consumer driven high deductible health plan with Humana, a $1,500 single deductible, $3,000 family deductible. All covered services including prescription drugs apply to the deductible. There's 100% co-insurance and network. The one thing that, and we'll talk about this a little bit later, that doesn't include the engagement as much as we'd like to see, but that's because of the plan design that you had in place and the contracts you have in place is the fully funded health reimbursement account. The part about that though, that has, we have seen change and engagement in is that people actually have to use that card and see what the expenses or the cost of the prescription drugs that they're getting or the services that they're getting, they actually now see the cost of those. But they're still paying for it with that Benny card. There's the $50 emergency room co-pay, which I'll go on record that I don't like, but it is what it is. Because I think that's something that, and I know it was negotiated, but that's something that gets that co-pay back into the system and people often think that that's what the cost is. And then out of network services under the new plan are identical to what you had under the Prairie State's plan. So 80% co-insurance with out-of-pocket maximums of 1,500 and 4,500 per family. I think based on the experience that people are having, some are still finding physicians out of network with Humana. There aren't many. And I think that's one place where we can, if the unions are amenable or if it's a point of discussion you guys wanna have, if that's a benefit that we could actually tweak that out of network benefit to reflect more of a traditional plan because there's less likelihood that they're gonna go out of network. So there wouldn't be as much financial impact. And I think a lot of them are seeing that. If you remember one of the pieces that we went to. Good question. Yeah, thank you. Can we go back and slide here? Could you explain, you're saying there's a 1,500 hour single deductible, 3,000 dollar family deductible. In fact though, the employee doesn't pay that. They do. The employee is responsible for it, technically. They're using that Benny card though, to pay for it. Whose dollars are they? Those are the city's dollars. So that the employee really has no out of pocket expense there. Correct, correct. They had last year with the Prairie State's plan, the employees had over the entire cost of the plan, it was two and a half percent cost share. So the city paid 97 and a half percent of the cost within the plan. But there was no engagement, there was no reason for employees to change the way that they received healthcare or the prescription drugs that they bought or where they bought them. Well, the fact is though, now if an employee goes in, they actually pay nothing to see a doctor. Right, but what we've seen is people changing when they find out what the cost of that doctor is. But they've always seen that. They got an EOB every time they had a claim. But it never affected them. Pardon? They received it at home. And the EOB said what the charge was and it showed what St. Nick's or PHN discounted and what the actual charge of the city was to themselves. So I mean, your statement that I didn't know what the cost were, I don't quite agree with you. They weren't engaged in it is what I'm saying from the standpoint of I've got people asking me now, where if an MRI costs $3,000 at St. Nick or Aurora, where can I get it for less expensive? So if they can go to a freestanding clinic in Cedarburg for $750, as opposed to paying the $3,000 at Aurora or St. Nicholas, that's the engagement that we're trying to get to. People are now- And it's motivating that engagement. I think what Almond Cirque is not clear about is what's motivating that. What element of this is motivating that engagement? Well, that's the piece that I was talking about when I initially said there isn't that, there isn't the level of consumerism in this yet that I'd like to see. And that's simply because of the contract that you guys had before with the plan design you had before. So the motivation comes from the education, I guess is where I'm going. Please, go ahead. The other issue too, you said that there was no disease management with perisites. I disagree with you there because there were many cases and I, of course, you know, I was involved in it. Sure. That would contact, and journeys are high cost cases. Sure. And perisites were very hard to reduce the cost in advising the employee and the physician and engaging the doctor and the employee themselves to advise them what is a better course of treatment. So I don't know. It was utilization management, is what Prairie State's called it. I got that statement from when I sat and talked with them when I took over the city. So it was utilization management. They said they tried to implement disease management but the city didn't want to do that because they were in a four year negotiation with the virtual clinic. So it was wellness and disease management where the two pieces that weren't built into the plan. So. A little more. Thank you, Mr. Chairman. Eric, that $1,500 deductible and 3,000 family, that's being funded by the 1.5 million that we fronted. Correct. And how does, do you have any projections at the end of the year, by the end of the year, how much of that 1.5 million we're gonna have left? We're looking at projected on pacing right now and how it's being spent because in the beginning of the year, it starts out that people are spending a lot of it. But what's happening are those utilizers are using up their amounts. So that amount starts leveling off. So we're projecting about 1.2 million of that 1.5 being spent. Thank you. Okay. And just for a moment, if we go back to that motivation. So other than the fact that they have knowledge and education, what else is motivating them? How is their skin in the game in 08? And I imagine you're gonna get to how we get skin in the game in 09. That's a discussion we'll have. What's the enhanced skin in 08? I think it's people finding out that they can save money because- Themselves or the city? Both. They can save the city money by doing, because they didn't know that there was a difference in cost before, now they know that there's a difference in cost and they can do things to impact that is the education piece that we're coming to. Okay, and Susan, I'll go ahead and do Jody's if you wanna speak there. One of the other things that you look at this sheet that's been set on your table. Last year, we had no idea what pharmacy cost. You know, we'd go pay our $10 or our $20. And now when you go to the pharmacy, despite the fact that that benefit card or you fund the money and then you're reimbursed by benefit advantage, despite the fact that that has money on it, it's a real rude awakening when you go in for a script that last year you paid $10 for and now it's $1,600 or $387. This one person said to me, she said, oh my gosh, I have no idea what my medication costs. People, despite a lot of grumblings, there was a lot of positive where people were checking into what things cost. Also, our union contracts have in it and I don't think many people utilized it until this year that if you find an error in your bill, you receive 20% back to yourself. So in the past three months, we've had two people find huge billing errors. One person found an $8,500 billing error and another person found a $9,300 billing error. And so they will get 20% back but the city is saving 80%. So just by, a lot of people have said to us, I never looked at my EOB before because they paid out the $12 and that was it. And now that they're looking at both sides, actually seeing what it's costing, it's made a lot of people more aware of, for example, the medications. Great. Steve, turn your play. Just an observation as a patient on that, that's very true in the first $1,500 or the first $3,000 but I know personally, the last six months, the last half of the year, getting the prescription is zero and you don't know what the cost. And so there was an initial very useful bit of information there when you went and told the prescription, you found out the $500 prescription, yes, the city covered it but it was quite an eye opener but that is lost once you use up the vending card and now everything's zero so it's, you lose that incentive the last half of the year. Okay. But you're not gonna, that's been a common discussion across the industry. But you're not gonna go back to, if you've changed from Walgreens to Target, you're not gonna go back to Walgreens to get that drug. You've kind of, you've changed your pattern because you found a better place to get that drug, the same drug or you may have changed to a different physician because you found out that there's another physician that costs less that's providing the same service. So that, you've changed, we've changed that pattern already and that's the intent of the first $1,500 to $3,000 and we hope that that engagement stays and continues. It sounds like that was a baby step and me and all of America have a long way to go. It's not just the city. Susan, please. Again, this will take us a period of several years to get where we wanna see but one thing I was so encouraged about when Alderman Hanna and I went last year to see Prairie States and I said my goal is to see our claims come in at the same amount of this year and they said to me you will be lucky if it comes in at 10% over. If you look at this page we will come in below the past two years on our claims. So this is making a huge difference to what the city's paying out now and it will hopefully continue to make a big difference. You will see and this stop loss reimbursement is kind of like a double-edged sword. You'll see we have not met our stop loss print or had to use our stop loss this year. You know, if you use it, yes, you will get refunded but then your premium goes up the next year. So we want to keep our premiums down in that avenue and we have not had to use it yet. We're close on a couple but so those are good things for us. Thank you. Sure. All right. Great discussion though. One of the things that we entered into with Humana is a smart results program. It's really a measure of consumer engagement and there's four components to it. There's the valid phone numbers that the city supplies to make sure that if there's something that Humana discovers whether in a health assessment or communication from a physician, they have the ability to call that member so they're not trying to find that number. So we hit the target on the valid phone numbers. The Humana health assessment, there's been a lot of discussion back and forth about that. We did not hit that target. The target percentage is 50%. In mid-year, we were at 21. At renewal, we're at 26. There's a lot of importance on that health assessment because if they can identify issues early in the year, we can get people into clinical programs and disease management programs to help educate them and also it's not to replace the physician. It's to supplement the physician visits to make sure that people are taking their meds, to make sure that they understand everything they can about the disease that they're suffering from and if there's other alternative treatments out there as well. Good, over here. Precluding having all the person kiddles and call them all directly. Yes. Is there another way that we could encourage, conjoal, to move people up that what has worked in other cities that have gone through this transition? It's the carrot or the stick. And I think we've put enough carrots out there from the standpoint of, I think the last thing is Alderman Gisha putting his house up on auction. From the standpoint of he donated $100 for a gift card, the crews with refreshments. And then the last piece that we've put out is, well, the four days off where you could get a day off in a drawing, if you fill out that health assessment your name was thrown in there. So we've really put that carrot out there. The last piece was the health miles by Virgin. We're really trying to tie the health assessment in with the enrollment on that, that pedometer program where you can earn $150 if you don't put anything into it and you just walk or you can get up to $500 and we'll talk about that a little bit later. But we've really put that carrot out there and people aren't responding. So it comes down to what other municipalities are doing and other for-profit entities are doing is the mandated you either fill it out or you don't get health insurance. Now that's kind of really using the stick. But there's options that if you don't fill it out you pay more premium than those that have paid it. Or if you don't fill it out you don't get the full amount in your health reimbursement account and you get contributions on if you do or if you participate in screenings. So there's a lot of different ways that people are doing it but it comes down to- Susan? Right, just one second. We'll go to Susan then. I know that some of the municipalities cause we've been doing some checking on this. Some of them will say if you've got your health risk assessment done you pay half of the insurance premium or premium share that someone who doesn't have their health risk assessment done. So for example, Waukesha, they pay 5% premium share. If you do your health risk assessment you pay a 2.5%. Some of the other municipalities and Alderman Kittleson and I went to the wellness conference and they had a lot of things on legal issues with wellness programs. Some of the municipalities are using it as kind of a carrot amnestic. So your deductible is $1,000. If you do your health risk assessment your wife does her health risk assessment. You get 500 put back into your health reimbursement account which lowers your deductible. Lots of carrots out there so we know there are lots of carrots. Sam? A strong believer in how that can be used by planes experienced down the road. Cali and the county, you get a 2.5% reduction on the premium share. They have upwards of 75% participating in health risk assessment. And they also have to do either certify that they don't smoke or participate in a non-smoking program in order to get that to an end. And your organization would support that without going back to the negotiated contract? Well, you know, it's a question getting a little bit better than we have now. We're totally in support of that but if you're talking about a redo, you know, having any more to get back to where we were, we have to do a health risk assessment. Well, because, Sam, here's what I'm missing. Here's what I don't understand, Sam. Take the Gisha cruise and send it away. Take the 2.5%, hold on a minute, Gisha. So, no, but seriously, so take the 2.5% of 1,000 bucks. What is that, 25 bucks? Am I on the right order or am I at 25 bucks? Take the 25 bucks and throw it in the gutter. We're talking about the health of our employees. Do they not get how much better their health will be? If they go in and give a little blood and get told, quit smoking, lose some weight, and guess what, your life's gonna get better. Is it so bad that we have to renegotiate to get these employees to do what's good for their own interests? And why I'm so animated about this is because at Johnsonville, at my employer, we don't get our health insurance unless we do this health assessment. We don't hold that against the company. We don't think it's the evil company forcing us to do something. We think, wow, this is so we get health insurance. So what is it about this that's so difficult? Are people afraid of privacy? Okay, so what can we do? I can't imagine privacy laws with medical things being any more draconian than they already are, protecting the patient, which is a good thing. Still, they're very concerned about the employer as to any hand and how much about their health. But the employer doesn't. So what I hear Sam saying is we have a message issue. We have a trust and an advertising message issue that we're not communicating to the employees well enough. That the city gets nowhere near this data. And at Johnsonville, we know that the company has nothing to do with it. The medical people see all that, and we sign the HIPAA and all that kind of stuff. So that's one thing, fear of maybe perhaps lack of privacy. What else? I think the other thing is that a lot of them say, you know what their health condition is, and what their problems are, and they tend to stop this assessment and being pulled again. If they're overweight, something like that is, you know, it's not going to get anything to keep this thing. So that's a great, what are the other sources of motivation they need to change their life. And if they're not going to, if they don't want to do it, then you're right, one more assessment. Right, so, okay. Alderman Sirk, I think you wanted to. Can I just want to make certain that he was on the, oh, okay. Okay, thanks. I appreciate that, Sam. Eric. Okay, so the other one, the key part on that is, as a requirement for 2009, Jimenez made it clear that we have to meet that by January 31st. Okay, so we're going to have to, everybody's going to have to re-up basically between when we turn it on again for 2009, and so there's going to be a pre-enrollment kind of campaign from beginning of November till the end of January to have people go on and do that. And again, part of this program is, if we meet their targets, it reduces the overall trend increase on the claims because they feel they can do a better management job on those claims if they're aware of those situations in the group. So, on clinical programs, they're looking for a 60% participation, and that's for asthma, for cardiac care, for cancer care, there's eight diabetes. Well baby, or excuse me, humana beginnings, which is the early pregnancy. 60% target, we had 95% participation in mid-year, 81% at renewal, and that is based on humana reaching out to them with those phone numbers and saying we have a program that we'd like to get you in, and 95% had accepted in middle of the year and 80% had participated in those programs by the end of the year. So people are becoming engaged in those plans, and those are saving some dollars. And then the last piece was maximize your benefit, and this is one that's caused, well this hasn't caused issues, but this is part of the, when people get into high cost drugs, and there are generic or lower cost alternatives out there, humana will reach out to those people and say, please consider this drug as opposed to this drug. This isn't the step therapy and quantity limits piece, this is more of a communication outreach from humana to say there are other options out there for you to consider, if you haven't considered those already, and then nobody participated in that, maximize your benefit to change the drugs that they were on. So, I mean overall prescription drugs, the generics are 93% effective compared to the brand names. There are some people that can't take them, we understand that, but there's a lot of opportunity for that as well. And you did get a 3% bonus for previous clinical participation and that was because of the utilization management program that you had with Prairie States. So, we got 66% of the 100% of points available under the Smart Results program. So, we did meet this year, we met the trend factor of 9%, we could have got it down to seven and a half, had we done some other things and we'll talk about that in a minute. The cost drivers for the city, pluscule cellatole, connective tissues, so back and joint issues, digestive, there's a huge digestive issue in the city with acid reflux and proton pump inhibitors that really drives up the cost. So, there's a lot of stress from that standpoint. The malignant neoplasm, so some cancer stuff, coronary artery disease, which has been an ongoing issue for the city, and then it's more injury, not so much poisoning, but it's in the same category. Preventative screening, which is something that we talked about a lot last year, and I really think we need to focus in on a communication piece again for this. Colorectal cancer screenings, there are 14 members that receive the screenings when there are 474 members in the city that are in target population. Breast cancer, 71 members received mammograms, there are 337 members in the population that are eligible for those. Cross-take cancer, you can see that. Routine physicals, we had 132 routine physicals when there's 1,150 people that should be getting that. Does this mirror, are those numbers different than say the general population for employers throughout Wisconsin? Yeah, these are lower, absolutely. Paulette? I see that in the visual and the test, maybe they're still, it's not recorded for another couple of years. It could be, but it wouldn't be this significant because even the data last year that I looked at going back three years was the same thing. You guys are patterning the same way you have always been. So there's a 30% population, up to 30% of your population is consistently getting these tests, 70% aren't. So this is a huge place where we can start identifying issues earlier. However, our utilization of healthcare is much higher than the state of Wisconsin and the national average. So by not going for the preventative things, they're going to the doctor for other things and it's sending our utilization way up. We're treating the symptom, not the problem. She's what it comes down to. So on the city of Sheboygan compliance, this is actually from the medical director of Humana for this market, city of Sheboygan compliance with national recommended guidelines, her preventative services, things behind Humana's national average, and there's four other categories. This must be improved for the city to regain or recap the benefits of the prevention benefit. And the money's fine. We all want to save the money, but think of the sicknesses of- I want to spend money here and if physicians want to really push a program, this is where I'd like to see them push it. Right, no, but I mean, we all want to save money, but think of the sicknesses. Think of the advanced stages of colorectal cancer, breast cancer, prostate cancer, and things that could be found in physicals. This is just one of those things where- Absolutely, and the other piece about this that is kind of the soft cost or the hidden cost is when you have people out being treated for this, that's absenteeism and presenteeism, and those are costs that you guys are paying from that standpoint as well. What's presenteeism? Presenteeism is- I go to work, but I can't do my job. Is being here as opposed to not being here. So if you're present, you're in your working and you're productive. Oh, yeah, okay. Yeah, so, sorry. All right, your population, and I thought this was interesting. You can kind of see the kids, the zero to 18, that's normal, 25% of the population, that's a little bit lower than human is average. 19 to 25, you had 117 members, and this is employee spouse independence. 8.2% of the population, you're right online with human is average, I thought you were trying to meet that, but 26 to 44, about the same, but the big spike was in 45 to 64 year olds. Some of that is because you have a lot of retirees on the plan in that 53 to 65 age bracket. The other part is just your population's older, which this gets back to those screenings, because if you look at the times when you're supposed to get the colorectal cancer screening, the mammograms, all those things, it's right in this target population where a majority of your employees are and your members. Pharmacy utilization, the key part about this, we talk about the proton pump inhibitors in their nexiums from that standpoint, total prescriptions, and then the prescriptions per member per month, if you look at what the city is getting filled versus the national average, you guys are significantly higher, so the city employees are taking a lot more meds than the national average. We've got about 10 more minutes, so do you wanna jump ahead to the recommendations? Sure, let's see. And what are we skipping? Can we encapsulate? I know that Gene's getting, we need Gene to talk about. Gotcha. Well, okay. The service one, we held probably 11 meetings throughout the year to explain the new plan. I'm meeting down at TPW periodically. We worked with about 65 employees and retirees that have had claims problems throughout the year and really trying to figure out and help them understand the plan. I've attended the majority of the Wellness Committee meetings and invited Susan and HR to some of the industry stuff on the service. Employee comments, you guys can read about those. The one that gets to Ed's comment, or the Miseric comment, excuse me, is that we had one individual that moved their meds from Walgreens to Target and over the course of the year is gonna save $5,500. So the city is gonna save $5,500 on just one employee. That's consumer engagement. That's the stuff we're getting at, okay. But then we have somebody else who had a drug filled for $5.28 through the pharmacy when they could have had it filled or just bought it over the counter and it was comparable to the Tylenol case that we talked about in the past. And then the insurance. This is just the renewal and then the option for a recommendation of Humana Preferred Network which has the same primary care providers in it that the national service, or national point of service network has. This was the network last year that was Aurora only that we were going back and forth on. St. Nicholas has now agreed and PHN have now agreed to be part of that network. So they've brought their discounting down from 10% to 35% on every claim. So the significance of that is 60% of the population is still going to St. Nick and PHN to get services. So if we're getting a 25% additional discount associated with that network, that's significant on the overall spend of the city. So, and that blows away the discounts that we have with Prairie States. Let's see, here in a renewal, we kind of talked about that. Transitional and traditional, what that gets to is the buying patterns and utilization patterns of the city. You guys are still spending and utilizing the plan like you had the copay. Yeah, yeah, yeah, yeah. All right, your renewal alternatives. Well, we talked about this. So they increase with Humana Preferred Network at 6.8% as opposed to 11.3 with national point of service. There's deeper discounts with Humana Preferred. One of my recommendations that we're gonna talk about, or that we'll talk about here is moving the health reimbursement account from benefit advantage to Humana. It would be Humana administering the plan and Humana administering the health reimbursement account or what they call a personal care account. So everything's in-house at Humana. So if someone charges something on their benchmark that they either shouldn't have charged or they charged too early, Humana can help the employee figure that out because right now we're doing that. So if they paid for a chiropractor visit before it was sent to Humana, and then their credit card is off because the chiropractor was paid by Humana and the credit card, we have to go back through and figure all that out for the employees. And the attorney that worked on behalf of the city for the health insurance grievances is recommending that we go with the Humana card. So the fee is a little bit different. It's 505 per member per month as opposed to 250 last year, but that cost is being picked up by the employees, not by the city. But there is a $2,000 setup fee for the Humana PCA or personal care account. There's also a one-time $1,000 joining fee for the business coalition, which you need to be part of to get in the HPN network. And then there's a annual fee of $10.50 per eligible employee per year. Those eligible employees have to live within a 13-county area, so you have a lot of employees that don't live in Sheboygan County. You wouldn't have to pay the fee on those employees. All right, business healthcare. I'd like to talk about that, but, hold me, Kittleson, do you wanna talk about wellness? Okay, how much time do I have? About five minutes. Okay. We formed a committee that's very active. They're doing wonderful things. They coordinated an employee appreciation day. They've really focused on the Virgin Health Miles piece and really gotten people engaged in that. The last piece that I think is really important is we're coordinating the first health fair in the city's history, getting providers, getting different alternative medicine providers at this health fair, also showing and doing some preventative screenings and education on that. All the person killed. Thank you, just to jump in there. We did leave an invite on every older person's desk and everyone should have, we're trying to get the word out that this health fair is coming on November 15th. And I just have to reiterate, it is a big shared services effort between the city, the county, and the school district. And I think it's gonna be a really wonderful health fair and we're looking forward to it. We've got a lot of great things coming. A lot of things that Eric has talked about, preventative things, healthy baby screenings. We'll have a blood bank there, stress management, weight management, diabetes, just many, many things, all pertaining to some of these issues that we are aware of in the city and hopefully people will come, our employees, their spouses and families, our retirees. And what's the date again? Saturday, November 15th. It will be at Blue Harbor, 11 a.m. until 5 p.m. And they should go. They should come. Please come. So to take away from this, any metric that we really, we failed to meet, there are a couple of, it's because they weren't motivated enough to participate and that motivation could be out of fear for privacy. It could be out of, I don't want the city telling me what to do. It could be, I don't wanna change my lifestyle and they're gonna try and make me. So whatever it is, we didn't get it done and so we have to continue to try to find ways. Transparency's probably gonna be a big part of it. So wellness, so we can. There's two things I wanna pull onto this. One is, from a partnership standpoint, Humana has stepped up and donated the portion, the city's portion of the health fair expense for Blue Harbor. So again, trying to reach out and be a good partner with you guys. So I think Humana gets some kudos for that as well. Okay, quickly. Thank you, Mr. Chairman. Question, for years we're working with the county to combine and schools, to combine our insurance plans so we can get a better discount and work together on that. We're also working on, and the county has provided with a walk-in clinic, what kind of progress are we making now to work with the county and getting us into the walk-in clinic? I don't think there's been any discussion moving forward. There's really no incentive in, because Intera would be out of network with Humana. So there really wouldn't be an incentive for employees to go there to get care. And we've got the Humana or the Aurora walk-in clinics that the employees can get that are in network for Humana and provide relatively the same. The advantage the county has with their Intera program is the employee can walk in with the cold, whatever, and they do the wellness assessment at the same time, which really facilitates the process and gets a better participation as to whether it might be a great idea. I think you guys threw it around for several years. So I don't know, I know it's up and running, but I don't know what the intent of there wouldn't be a benefit there. Participate in that, whether they're going to their same doctor. Because the county has a deductible and we do not. When they go to Intera, there's no co-pay, it's free. It doesn't apply to a deductible. And so it's a benefit for them. Having no deductible, we don't have any idea what portion of our people would be, you know, agenda. We had a 12-dollar deductible. We thought that could have been, so we didn't have a deductible. You didn't have a deductible, you had a co-pay. You had a paid 12-dollar deductible. Correct. Whereas the walk-in clinic, we didn't have a deductible. That was the incentive of the whole program. And my company has that program and we have family members, we have everybody that can, for the small things, go to the clinic. Yep. And it's a great program. So recommendations, we've got a lot of recommendations. All right, recommendations. Moving to the Humana Preferred Network, switch the health reimbursement account from benefit advantage to Humana. One of the things that we tweaked last year, based on information from another large employer, in Sheboygan that has Humana, is we made the chiropractic care out of network at 100%. Because we did a big push on chiropractors this year, I think we should move that back to covering it the same as every other benefit out of network, so 80%. Everything applies to the co-insurance. It's my recommendation. Adding funding for the health miles program by Virgin. And then also adding funding for biometric screenings in 2009, which is the blood workup for the wellness piece. And what is preventing us from just doing that, saying that's all good stuff and we should do it? What are the next steps on that? Talk with, pardon me, I would need to talk with Alderman Gysha, or perhaps any other older person could bring in some resolutions to the next meeting. And does any of that put the city employee contracts or anything at risk? Are they gonna fight any of that? Not if we provide funding to get the biometrics done because it wouldn't at this point be required. We need to discuss that further. As you're aware, the finance allocated funds for an attorney to be reviewing the contracts, so they should have something ready for you all in December. Okay. Okay, thank you to all of the folks that presented. I think you're right, that's good information for the folks at home who'd be paying attention. I think some of the big takeaways are health insurance costs, a ton of money. There are things, not just for the city employees, but all employees, whoever's providing your health insurance, there are things you can be doing to save them money and save you better health. So we'll look for trying to make that more motivating and more transparent in 2009. Motion to hold number six to your next committee, the whole meeting. Motion to second to hold number six till the next meeting. All in favor? Aye. And opposed? Motion carries. And anything burning, anybody want to volunteer something for the next committee, the whole meeting? Okay, that can come up like it usually does, just to me. And I would entertain a motion to adjourn. Second. All in favor? Aye. Opposed? Thank you.