 Welcome to Sheboygan County Government working for you. My name's Adam Payne, County Administrator and co-host of this program with Chairman Roger Distruty. And today, as you know, we strive to bring one of our department heads, one of our 20 department heads to talk about the roles and responsibilities of county government, and we're very pleased to have Mike Collard with us, our HR director. Welcome, Mike. Thank you, Adam. Glad to be here. Mike's been with the county for, I think, has it been 10 years or thereabouts? A few months shy of 10 years now. A few months shy of 10 years. I've been here for 13, 14. So my memory's beginning to fade, so that happens to us as we get in our mid 40s or whenever. But it's good to have you with us and HR. Folks might hear, well, HR this, HR that. What is the HR department? What are the roles and responsibilities of your area? Well, HR, of course, stands for human resources, the human resources of the county government. So essentially it's the personnel department is the old fashioned word, but the terminology changed a little bit as the scope of the involvement of HR in various parts of an organization's management grew. We deal with human resources, the employees of the county, and the employees are what make the county government run. So we deal with all aspects of the county's employees from hiring to firing, compensation plans, job descriptions, employee benefits are a big part of the job, and certainly dealing with various employee representatives, such as the labor units, as we do. And personnel matters. I know that you've been a tremendous asset to the county when there's an issue or problem with an employee. Of course, we have a significant organization, but there's always gonna be some trouble periodically in you and your staff have been very, very helpful in that regard. Just how many employees does Shaboy and County have and has our workforce been increasing or decreasing? Well, as of a couple of weeks ago, we have a total of 831 employees excluding of all types excluding only the elected county board members or employees in a sense. But that number would have been 847 one year ago, and it has been gradually decreasing over the years for quite some time. A big drop down when the county sold the Sunny Ridge Nursing Home Facility, of course. But even if you take that out of the equation, it's a gradual slope down. It's not a matter of the county increasing in size and number of employees. It's a matter of every year trying to find some efficiencies in some departments and everything is paired back a little bit. Generally by attrition, but occasionally we have to make some difficult employment decisions in order to make sure that we're providing services as efficiently as possible. And I just happened to be looking at these numbers. This morning is 10, 12 years ago, we had a high of 1,350 employees. And now as you just shared, we're in that just below 850, 830. 831 is the greatest number. 831 is so high from 1,350 to 831 in the course of about 10 years. Privatizing nursing homes, consolidation, streamlining, and trying to do as much as we can through attrition. But our workforce really has decreased dramatically. Our payroll is less today than it was 10 years ago. So it's a real credit again, I think, to the HR department in handling and helping manage all that. So great deal of roles and responsibilities with our employees. And there's been some real changes in the wind and that you and others have been working on. Act 10, most of our viewers have probably heard of Act 10. Tremendous change by the state legislature and Governor Walker. Please very briefly, what is Act 10 and how is it impacting Sheboygan County? It's a major legislative development design primarily to make sure my job never becomes too predictable or stale after 10 years. Because it really changed a tremendous number of things that we work with, primarily unions. Almost 90% of our employees, of course, are represented by labor organizations as a union. And many of the issues we deal with with employees are governed by those union contracts. So a big part of my job has always been to interpret and to negotiate as well as implement all those terms and conditions contained in those contracts. The biggest change Act 10 made was to change collective bargaining and provide that after the current round of contracts expire, collective bargaining will be quite a bit different. The county, as cities and school districts, will not be required to negotiate most of the details of those employment rules. In fact, in most cases, excluding law enforcement personnel primarily, we won't have to negotiate those things at all. The negotiations will just be about base wages alone and a different system no longer the interest arbitration if we have a dispute. Essentially, the county now has a lot more control and therefore has to make a lot more decisions about how we're going to deal with employees rather than having that predetermined for us through a union negotiation system that was very hard to change. So that was the biggest change by far. A lot of other particular provisions included in that legislation, especially relating to things such as health insurance and employee pensions, which is a big cost item for us as well. So one thing, the act did provide us that most employees, again, have to pay at least half of the pension costs with the employer picking up the other half. Previously, we had paid as the county government almost all of the costs on behalf of employees. And how many contracts do we have and what is the status of those contracts? We have eight different bargaining units and all eight are currently under contracts. Most of those contracts were fully negotiated and signed off on before Act 10 was even a rumor. There were two that actually were negotiated while Act 10 was first pending, but they were all negotiated and ratified before Act 10 was originally signed into law even setting aside the later legal complications that delayed its implementation. So that's the situation we're starting with. We still follow those contracts as long as they're in existence, but seven of those eight contracts will expire at the end of this year, December 31st of 2012. So we have to negotiate new contracts. Of those seven, one will still be subject to the normal old bargaining rules because it's our deputy's union. And they still have the same bargaining rates they've always had or have had since 1978, whereas the other six will not have those full bargaining rights. So it'll just be base wage bargaining. And will these bargaining units continue to exist at the end of the year or what happens with their status? I think they will. One of the more complicated or controversial provisions in Act 10 also provided that bargaining representatives, a union acts as the representative of employees for bargaining these contracts. And Act 10 provided that the employees would have to have a vote every year to decide if they still wanted to have a bargaining representative and have these contracts. So I thought for a while that maybe we weren't gonna have to bargain at all if they'd had the vote and fewer than 50% of active employees elected to have a representative. But a judge in the Western District of Wisconsin has ruled that that particular provision of Act 10 is not constitutional. And so it's not currently in effect. It's been enjoined by the court. So because of these legal developments, we don't expect to have elections. We expect the unions will all still be in place at least through 2013, pending, maybe future legal action on appeal and so forth, but nothing impending in the next few months. So I think going into 2013, all the unions will exist. Even if that action by the judges overturned, of course, the unions can still exist. Just may or may not have to go through an election process to determine if we're going to have a contract with them. So out of our 830 employees, we have bargaining and non-bargaining. If memory serves with non-bargaining, those that aren't represented, it's somewhere in that 150 to 200 range. Well, it's less than 150 now. It's more like 120 who are non-bargaining currently. So the remaining portion, so it's at least 700 are in bargaining units and represented by unions that we will be negotiating with in the fall. So how do you, what's your impression, how are employees reacting to this significant change and obviously it's gonna have tremendous implications for going forward? How do you see that relationship changing between the employer, bargaining, non-bargaining personnel? Well, first of all, the initial reaction, there was upheaval in a lot of parts of the state, particularly in Madison, but in many local governments as well. I'm very proud to say our employees handled that tumultuous time extremely well, I thought, didn't let it interfere with their primary duties to serve the people in Sheboygan County. We got on with business. Particular controversies were dealt with, but overall I was very happy with that. In terms of the long-term future of our relationship with our employees, I think Act 10 can have a positive impact because the old system of collective bargaining really forced us into what in many respects has to be an adversarial relationship. We're sitting at a bargaining table, they want this, we want that, if we can't agree, we can have an arbitrator decide it looks like litigation and it forces us into that pattern. So we tend to develop an adversarial mindset, which is not the best mindset to have when you're working toward a common mission, which is what we are. These are coworkers of yours and mine to try to accomplish the goals of the county. All working together on that. So hopefully moving forward, and I'm very optimistic about this, we'll be able to develop generally more positive thought patterns, more positive attitudes towards the fact that we are working together, recognizing that a little bit better. And I've asked many times, are we still going to talk to unions or talk to employees or talk to the representatives? Absolutely we will. There'll be even more reason to have those conversations with employees, to talk to whoever's representing them or acting on their behalf, in order to figure out the best ways to move ahead. And if we can do that outside of the context of that adversarial system, I think there'll be more productive conversations. Excellent, thank you, Mike. Thank you, Adam. Had the pleasure to serve on you and the HR committee for a number of years and actually was on the interview committee when we hired you and you're doing a great job and made our decision look very good. And with that... Not the last good decision you've made, I'm sure, so that's good to hear though. But been working with you a while and appreciate your professional manner and how you've handled the negotiations. But with the a lot of terms and conditions governing the employees are spelled out in the union contracts. So what's going to take place now with the contract's ending as the end of the year? Most of our union contracts, as you know, are over 30 pages long apiece. Under Act 10, I expect there'll probably be two or three pages long apiece. So you're right, there's a lot of rules, a lot of details that are going away and are no longer going to be in effect. That puts a lot more burden on management to establish its own rules. And one of the primary means we're using to have those rules is a personnel policy manual. Not exactly an employee handbook, but one manual with a lot of personnel policies collected together, which will be the county's rules about how we're going to treat employees, how we're going to hire them, how we're going to deal with disciplinary matters and so forth, replacing a lot of those things. So we have recently finished completely revising our personnel policies and putting them together in one manual, a personnel manual that will replace most of, or at least many provisions, that have been governed by the union contracts. And what was the county's overall objective when making decisions about the personnel and policy manual? Well, obviously, since we're not bound by those union agreements, we want to be making decisions that are the most effective in helping us achieve our goals and most responsive to overall market conditions, the economy, the labor market. But we still had, as an objective, to continue what we think is our position as an employer of choice. That's one of those HR terms that HR departments like to throw around when we're talking about recruiting, selecting and retaining quality employees because no matter how low our payroll costs get, if we're not putting people in position to do the job with the right skills, with the right abilities, it's not going to be effective, it's not going to be a good value for our taxpayers. So it's very important that we are an employer of choice, meaning seen by the best people out there in their respective fields as the kind of employer they want to work for. This is something, if you look at, for instance, we often hear that government should be more like the private sector and we ought to operate more like good companies operate. If you look at the best private companies, that's what they do. They strive to be an employer of choice because they know it really makes a big difference to their bottom line to hire the right people. So we want to make sure we're still in a position to do that as well. Were the employees involved who were the writing the new rules? Well, the employees didn't write the new rules, but we went through a lengthy process and counties, cities, school districts, local governments of every kind all over the state have been involved in rewriting their manuals because of Act 10, we're not alone in this. And I try to keep tabs on what a lot of them are doing. I can honestly say I do not know of any local government that has spent as much time or given as many opportunities for employees and their representatives to be involved and give input into the process. We've had a working group or three different working groups, mainly of managers within the county working on drafting the policies, but those working groups have gone out and solicited ideas from employees, feedback, comments. We've had open forums where employees can come and address the work groups and tell us what they don't like about our drafts. We've put the drafts out for any employee or union representative to look at as the drafts are being written. Not long before there's any decisions made so that the input can be used really in a timely fashion while the decisions are still being made. So I'm very proud of that process. It took a lot of time and a lot of effort made by a lot of people, but the end product is the one I'm very proud of and we can honestly say there was a tremendous amount of input from dozens and dozens of employees. I've heard several good comments from some of the employees appreciating that they were part of it. Some of the neighboring communities didn't allow any input, they just threw it in front of the employees. So I'm sure that's much appreciated. When will the new policy manual, when is it going to be implemented and how will it be implemented? Well, it's already been adopted by the Human Resources Committee, which has the final say so on the rules that are in the policies. We're going to take our time about implementing them a little bit. We're in a good position to do that. I know of cities and counties that are just adopting their policies right now, even though their contracts have expired a year or more ago. Our union contracts are still all in place until the end of the year. So it's going to be a gradual implementation because for the most part, the union rules are still the ones that apply. But that gives us the luxury of really doing this right. So our plan is to first start out next month with putting the manual together in its final form and introducing it to our supervisors, the managers in each of our respective departments, frontline supervisors of employees. They're the ones who really have to know how the rules work because it's the employee's first step. Their first stop when they have a question is going to be their boss, their supervisor. So the supervisors have to understand these things better than anyone. So that's the first step to train the supervisors. And then starting in September, we're going to roll those out, provide every employee with a copy, explanations of how it's taking effect when the union contracts expire, and also provide some meetings, some open forums for employees to come and ask questions and to get an overview from managers of what the new rules are going to be. And what is the pay raise being proposed for 2013? Well, I can't say that it's decided yet, and in part because it's going to be negotiated with the unions overall. However, as you know, we are looking toward projecting a modest pay increase across the board for employees. We have in the budget targets for 2012 an assumption built in of an overall 2% increase in wage costs. And as you know, a big part of the budget is the amount we spend on the healthcare coverage. What is the county doing to try to keep those costs down? And how successful have we been in the past years? It's one of my favorite topics because I think we have been very successful. Let me start with the second half of your question. Over the past six years, the county's average increase in health insurance costs has been well under 5% each year, whereas the statewide average is, I've seen numbers ranging from 8.5% to 11% in terms of the overall increase in health costs. It's a tremendous problem in the economy for all employers, but we've been taking very aggressive steps to try to manage those costs as best we can. Overall, Roger, there are three kinds of things you can do to control healthcare costs. And I think anything you do falls in one of these three categories. One is you can just shift costs between the employer as the county organization and the employees. Obviously, the employees don't like that. It increases the amount they have to pay out of their paychecks, but that's something you can do. The next step you can take is to work on what we're paying for medical expenses for employees. Are we getting the best discounts, the best kinds of arrangements? And the third thing you can do is make employees more healthy or try to encourage them to be more healthy so that they don't need to go see the doctors off and their providers. We are taking steps this year in all three of those areas. On the first area, we have been gradually working toward the level where all employees will be paying 15% of their health insurance premiums. And so people should understand that. Now, in the private sector, typically you see higher numbers, 26 to 29% as an average. But for the type of plan we have in local government, we think 15% is a fair rate. But that's been a gradual increase over the past 10 years and by next year, I expect virtually all full-time employees will be paying 15% of the premium or possibly a little higher depending on whether they go through our health risk assessment process which provides an incentive to them. So that's what we're doing on category one, the cost-shifting category. Category two is trying to pay less for the services with the best kinds of network arrangements you can find. And we've made some significant changes there too. We've made network changes several times over the past five to 10 years. This year we are using a different network provider. A network provider basically negotiates with the doctors on behalf of its member employers. And so we've been shopping around constantly for the best deals. For instance, last year, we looked at the numbers and when our employees were going to the local hospitals or medical clinics, we were getting an average discount rate of about 43%. Because of the changes we've made this year, we looked at those numbers recently for the first half of 2012 and we're achieving a discount rate close to 50%, over 49% on average. So that's a huge savings for us right there. And it really comes from a lot of technical details and working on those contract arrangements we have. As you know, we're a self-funded insurance program so we don't have an outside insurer doing that for us. We do it ourselves through our human resources department and our consultant that we use to help us with those arrangements. So that's step two. Step three, of course, is to encourage employees to be healthier. That's probably the most important. You can't argue with wanting people to be healthier. You can't force them to do it but you can target certain things. A major initiative we have this year, we looked at where our healthcare expenses really go. It's a lot of money. We're talking about over $10 million a year for county taxpayers. A lot of that money goes to certain chronic conditions and diseases such as high blood pressure, such as diabetes, high cholesterol, those three in particular, tremendous share, higher than average for health plans is going to those disease states. So just starting this spring, we put a disease management program in place to encourage our employees to really make sure they're following the best practices to managing those three conditions in particular to keep them from advancing to the higher stages or more advanced stages of those diseases which is where really high healthcare expenses can kick in. So if we can encourage people to manage that care using the best available practices, we can save tremendous money. So right now we've started a program through our in health clinic that the county set up so that if an employee goes in every quarter and goes through the checklist and goes through an educational process and meets with our nurse practitioner and verifies that they are following the best practices possible towards managing their conditions, then they get free prescriptions. So there's a real financial incentive to the employee to do that and it should really show up in our bottom line. Very good. Well, thank you. Also prevention certainly is better than a pound of cure and we've been doing some wonderful things with the in health clinic and your leadership's been very appreciated there. Not only our county employees enjoying that benefit now the city of Sheboygan and the school district are planning to join us. What's the status there? Yes, well, the city government joined us about the beginning of the year and so we're very pleased with that to be partnering with the city, especially since when that clinic project was first developed, first talked about years ago, it was talked about joint meetings with the county city and the school district people from the Sheboygan area school district. For one reason or another, the school district and the city dropped out of the project originally so the county started it out on our own. So I was very happy to see the city coming in and they're sharing the nurse practitioner services that we offer through the clinic and have been offering those to their employees as well as the chiropractor that we added at our clinic and that's been available to city employees as well. So we're very happy that the city does that. It also provides some financial return to the county and that we're not bearing the entire expense on our own but the city is paying on a per visit basis just for the services that their employees use so there's no real risk to the city but there's a benefit to the county. Even bigger development though is of course the school district. The school district is a larger employer than the county and the city combined in terms of number of employees and they of course have had to make some serious changes in their health plan effective this summer and so we're very pleased that they are now able to offer the clinic experience to their employees as well and they can come in and see our nurse practitioner. The nurse practitioner can handle a whole slew of basic healthcare needs. You know all your primary healthcare needs, a lot of the routine things you can go see a doctor for can be handled by the nurse practitioner. She can prescribe medications and if it's something a little more serious she can refer the patient directly to those secondary care providers, the specialists. And she can do that very efficiently and with the best interest of the patient and the employer in mind. So now the school district is going to be able to do that as well starting July 30th. School district employees and their dependents are going to be able to make appointments to see the nurse practitioner at the clinic. Not the chiropractor quite yet but we'll see how that develops but we're very happy they're able to come in. That is going to tremendously increase the capacity of our clinic. We just went through this morning and finalized the new hours so we have expanded hours that will be available to our employees. We have a new nurse practitioner, a full-time practitioner in addition to our current one who will be joining the clinic next Monday starting work and also hiring a new medical assistant so it's a tremendous expansion in terms of hours and services that can be provided. And bottom line a good value for our employees and a great value for taxpayers. I think so. Well done, well done and good to see the school district joining us Well Mike, a lot of information in the last 30 minutes and we've only got about a minute left and I'd just like to end by thanking you and your team and the Human Resources Department. Tremendous challenges of late with the personnel policy manual and the collaborative effort with our management team, bargaining, non-bargaining employees and as Chairman Distruty said we received a lot of feedback about the opportunity for input and I know personally from attending not all but certainly some of those meetings that input was a really seriously, thoughtfully considered. A number of changes were made by you and the team before ultimately going to the HR committee for final approval. So I wanna compliment you for the good work you did on that as well as the good work you've been doing for Sheboygan County for the last 10 years. Thank you. Well thank you, appreciate it. And thank you for joining us. If you have any questions about Human Resources or if you heard something during this program that you'd like a little more information about or you wanna provide a suggestion don't hesitate to contact Chairman Distruty or myself or certainly Mike Collard in the HR department. Mike or his staff would be happy to help you. And until then, thank you very much for joining us. Next month we're gonna have Sheriff Todd Preby with us. He's not so new anymore. I think he's been on this program twice and we'll be giving you an update as to some of the new develops in the Sheriff's Department a lot of discussion of late on combined dispatch with the city of Sheboygan. So another collaborative process being considered. So please join us next month and until then, on behalf of the Sheboygan County Board, Chairman Distruty and myself, thanks for joining us.