 Welcome to Sheboygan County government working for you. My name's Adam Payne, the county administrative coordinator and co-host of this program. Chairman Gehring could not be with us today due to a conflict, so I'm gonna try to lead things myself. And today I'm very pleased that our guest is Mike Coller, the human resources director. Mike's gonna talk a little bit about the roles and responsibilities of the human resources department, in particular the costs of wage and benefits and some of the challenges we have associated with negotiating and keeping those costs in line. So Mike, it's a pleasure to have you here today. Glad to be here. Why don't you start sharing with our viewers a little bit about the roles and responsibilities of the department you're overseeing? Well, the human resources department covers functions thought of usually as the personnel area. Used to be called the personnel department and it covers really everything to do with the county's relationships with its employees. Obviously the county does a lot of work in a lot of different areas and in most areas that requires our employees to provide those services. We have approximately 1,300 employees in Sheboygan County government alone between full-time, part-time and seasonal employees operating across all of our 23 departments. And so we help to manage that relationship. We help to manage the simple things like wages and benefits. And from there on through the whole course of issues such as a lot of our other benefit programs, a lot of our recruiting programs to hire new employees down to things such as discipline of employees and making sure that everyone is working together well and following all our policies and procedures that we have. How many staff do you have in your department? We have a total of four, including myself. So from a standpoint of assisting all the other departments, 23 departments in the county, as you said, 1,300 employees, a lot of responsibility. I think so, but I find it very interesting work and one of the things I most enjoy about county government is the fact that we do have departments working in so many different areas, helping taxpayers in different ways that many people may not think of, but it provides for a lot of interesting challenges for us. So wage and benefits alone represent about 50% of our total county budget. And I don't think a lot of people are aware of that. Our total budget is around $140 million. So it's a significant area, one that you work closely with and one that you negotiate on behalf of the county on how many bargaining units do you work with? Well, the county has eight different bargaining units and each bargaining unit is represented by a union. So we think of it as having eight unions, although some of them use the same or are affiliated with the same organizations, but each bargains separately. So each of those eight units has representatives that come and work with myself and the Human Resources Committee to negotiate different wages, benefits, other things that affect their employment with the county. And we have an obligation to do that and of course we need to do that because we need to have a common understanding with the employees about what's expected of them and what's given in return. So each of those eight can be different and have to be dealt with separately. In addition to those eight union groups, we of course have some non-unit employees, managers, such as ourselves and employees in other areas that for various different reasons are not represented by a union. So roughly we have out of the 1,300 employees, about 1,100 of those are represented by a bargaining unit, 1,150 and another 150 non-bargaining or management type staff. That's right. Now with these negotiations, clearly we've got excellent employees working for Sheboygan County in a lot of different areas, a lot of facets. But every year, two, three years, depending on how long the contract is agreed to, you enter into these negotiations with the Human Resources Committee. What types of wage and benefits does the county offer? Well the county offers standard answer is competitive wages, which are wages that we think are fair or that are otherwise developed over the course of years as being what's thought of as appropriate to compensate an employee. Obviously the bottom line is we have to be able to attract good employees to Sheboygan County, those with the qualifications needed to provide the services that are required. So that's the underwriting major consideration. Hand in hand with that though is the need to be proper stewards of our tax money, of course. And I work indirectly for the county board and the county board committee in trying to make sure that we're responsible and how we spend those dollars. So there's always that tension between the two. We offer a good wage package. In addition, county government here does provide for benefits including the standard items such as health insurance. We offer full health insurance plans and dental insurance is available to employees, which is a major part of our overall compensation. In addition, we have a very good retirement package. It's not unique to Sheboygan County. We do participate instead in the state retirement system. So we don't have the situation like in Milwaukee County for instance where they have their own pension fund. We participate in the state pension fund, but that does cost about 10% of our wages to participate in that, but it provides for a very good benefit for employees. So as you enter in negotiations, there's discussions about what type of wage increase across the board would be appropriate. Certainly you discuss health insurance and other benefits and health insurance, as you know, has been an area that has posed tremendous fiscal challenge to the county. In the last five years alone, and certainly you know the percentage is better than I, about 111% increase, what are we doing to manage this type of increase? What types of challenges is it bringing to the county? Well, you're right Adam, health insurance can't be ignored or can't be minimized as an issue. It is a major impact on the county of government, budget alone. I am responsible for working on the health insurance budget which is a separate fund in our county budget as you know. And I remarked recently that the health insurance budget treated as a separate budget is larger than the total budget for any department in the county including the sheriff's department, health and human services and so forth. Health insurance is by a small margin the largest budget. And of course that's charged to other departments based on the number of employees that participate. But it does present a huge challenge because of the increases. The impact on the county budget has risen from about $6 million five or six years ago to nearly $14 million in the current year 2004 and we anticipate increases ahead of us. So in connection with that second part of our task to be careful stewards of the tax dollars we have to do everything we can to to try to control or manage those costs in the most responsible way possible. That's a very big challenge for a number of reasons. The health insurance industry today is a very difficult one to get a handle on. And there are a lot of competing factors at play in the industry, in the nation that aren't within our control so it's very frustrating and that we can't do as much with it as we'd like to most of the things that affect the cost of healthcare. And really what we're talking about is just the cost of healthcare. How much does it cost to keep our employees healthy or to keep them having access to the doctors, the prescriptions, the other things they need to keep themselves and their families healthy. Is an enormous challenge and I could talk all day about the things that are going on in the healthcare industry perhaps. But we do constantly look at those things and look at what things we can do to try to improve our picture. We look at ways we can possibly change the design of our health plans and our coverage in order to encourage people to be better consumers of healthcare. And that's really where the change has to come from by helping our employees become better consumers so they can make wiser decisions about what types of procedures need to be done, what types of healthcare providers should be chosen. So we do a lot with that. We also negotiate directly with some of the providers. We have a network that we have contracts with and try to negotiate the best possible discounts. We have a prescription drug manager that helps us get the best discounts we can for things like prescription drugs, which is a big factor. And we're not alone with this challenge, not only the public but the private sector and maybe give our viewers a sense of just what a national concern this is. Not at all, we're not alone at all. It's something that affects private businesses as well as governments, local governments, such as us across the country. The national trend right now is that health insurance costs or health coverage costs are going up 12 to 15% per year. So we're in that range, I would have to say, although we're doing what we can to stay at the lower end of that range. So clearly a tremendous challenge just to restate the figures in the last five years from six million to nearly 14 million over 100% increase. So when people hear myself or their county board supervisors or others mention that health insurance is really posing a problem, it's real. I mean, departments don't have the same amount of resources they might otherwise have if they have to shift more and more of those property tax dollars toward providing health insurance. You've made some progress, the Human Resources Committee and certainly your employees working together to try to improve the situation. But again, some of it's out of our control. Often you hear people in the community say, well, the county or the public sector, but let's talk a bunch of Boyden County directly. They have this Cadillac benefit program. Is that true or I guess more specifically, how does our package differ than what you might readily see in the private sector? Well, there is a wide range of things available in the private sector. In general, we have a very good health coverage plan that is very broad in coverage. It's not the broadest one I've ever seen, but it's broad and it's a good plan we feel very comfortable with as providing excellent benefits to our employees. Probably the biggest area on health insurance where local government often differs from the private sector, private businesses, is that private businesses are responding nationwide to the increased costs by requiring their employees and their families to have a greater share of those costs in different ways, which means they pay more toward the premiums, have higher deductibles and so forth. Governments because of the union environment we're in and the public sector bargaining laws have to be a little bit slower to respond to that kind of pressure, although we are responding to it and doing what we can. And the positive impact of those changes is to make the consumers, better consumers, make people better consumers because they have more of a stake in the type of medical care they have. And that consumerism issue is at the root of a lot of the issues in the health care industry. And this presents an opportunity to clarify that I know you, nor I, nor I think any county board supervisor, certainly any of our employees, want to see health insurance premium costs go up for employees. We want everyone to have good health insurance and we don't wanna see people contributing more toward it. However, when you have the types of increases we've seen the last five years, we really don't have a lot of choice. And this is probably a good segue to an area in an issue that's been in the press a fair amount of late and that's our health care centers. There's been a lot of discussion about the escalating costs associated with our health care centers, nearly half of our employees work at the health care centers. Obviously as health insurance increases go up and that contributes to the deficit that we have there. And you've been working real diligently with the Human Resources Committee and one of the bargaining units that represents employees at the health care centers to help us with this problem. Why don't you set the stage for us a little bit and tell us about this tentative agreement that was recently reached. Sure, by far our largest bargaining unit is the unit that represents most of our health care centers employees, nurses aides, practical nurses, other people, other staff at those health care centers, about 500 employees as you say. The bargaining agreement with that unit has expired. It expired actually at the end of 2003. And the law provides that until we reach a new one, a new agreement we pretty much follow the old one. But we have bargained extensively with that union starting last summer, summer of 2003. And just recently we were finally successful in reaching an agreement with that group. The agreement is called a tentative agreement because it's not fully ratified yet. At this stage, the union membership has ratified the agreement. And the next stage, the final stage really is for the county board to vote on ratification of the tentative agreement. And that's scheduled for Tuesday, October 19th. And we're hopeful that the board will ratify the agreement that was reached. And if that occurs, then the agreement will be effective and put into effect immediately at that point. What are the major terms of the agreement? Well, it does provide for changes in wages as well as health insurance and other benefits. And there are really quite a few things that were changed. And we had quite a number of issues to discuss with that union because of the very difficult financial condition at the health care centers, very important issues. Some of the most important issues are, of course, health insurance overall. And the employees in that group will be asked to take on a bigger share of premiums, which they've agreed to do through the union. So that by 2006, they will be paying 10% of the premiums out of their paychecks, which is, I think, a fair amount to ask them to contribute at this point. Only two years ago, they were paying $5 or $10 per month, which is less than 1% now. So that's quite a change there. The second biggest area, I'd say, is the issue for health insurance for part-time employees. And this was an issue that received some publicity last June. We had some legal proceedings and tried to make some changes that we believe were that county was allowed to make under the bargaining agreement to require part-time employees to pick up a bigger share of the insurance particularly. Right now, we offer the full health insurance benefit to anyone who's essentially half-time or higher, which is an unusual arrangement that we felt we had to be responsible, we had to address that issue. This settlement does reach a compromise on that issue so that part-time employees will be asked to put up something more toward the premium, although not the full pro-rated share that we were originally asking for. And then finally, the agreement does provide for increased wages. It provides for a 3% rate wage increase in 2004 and a 2.5% increase in each of the years 2005 and 2006. And for a number of years, I know it's been consistently 3% every year. So not only was there some compromise in regards to wage increases, but as you said, they're gonna be contributing more. Employees will be contributing more toward the premiums. So after all these months of hard work and give and take and negotiations, as you know, the Health Care Center's Citizens Task Force that was appointed by the County Board last year concluded their work in May of this year. They developed a number of recommendations and suggestions to how to reduce the property tax levy associated with operating our health care centers. How does this tentative agreement help achieve the goal of reducing costs? To what degree does it assist? Well, it assists, but it doesn't solve the problem. The actual recommendation of the Citizens Task Force was that a total of about $3.9 million in cost savings, particularly in the area of labor costs, wages and benefits be achieved. When negotiating with the union, we took that goal seriously and we made proposals to the union based on a goal of reaching that rather high level of cost savings, $3.9 million. That would have required very substantial reductions in some of the benefits, particularly less so in the area of wages. And the union wasn't prepared to agree to that level of cutbacks or changes in the benefit structure. We felt it still would have been a good package, a responsible package, but more than the union was willing to agree to at this point. And so we are not now in a position to reach that goal of $3.9 million under this particular labor agreement, but it does help us get a good part of the way there. Perhaps 1.3 million using a similar comparable number would be appropriate to say this puts us in position to get a third to a half of the way to the cost reductions that we would hope to achieve in order to keep those facilities county operated. So clearly a positive step forward. Again, I fully appreciate that there was give and take and a compromise and as you said, you're hopeful that the county board will ratify and approve the agreement next month. What items that you were seeking or more specifically the Human Resources Committee was seeking didn't get into this tentative agreement? Were there areas that you had hoped we might see some concessions on that we weren't able to achieve? Well, there are certainly some things we had asked for further concessions on or further changes that we felt just put the healthcare system into a better financial picture and be a more responsible approach. The area of wages, of course, was very much a topic of discussion, but even more so in the area of benefits. We would have liked to make some larger changes in those benefit areas and have employees pick up maybe a little bit bigger share in certain areas such as the pension system, which is a very big cost item in the budget. Also, we would have liked to do some other things that would have helped in scheduling matters and would have helped us to increase the number of full-time workers we have compared to the number of part-time. We were trying to do some things with our employee makeup. Right now we have quite a few part-time employees in that system and it's partly because of the fact that they operate around the week, seven days a week, 24 hours a day, and it requires a lot of scheduled juggling, especially to cover all the weekends. And we wanted to change some of the rules that we have for scheduling employees and hiring employees that would have allowed us to hire more full-timers. And that in particular was a little disappointing that we weren't able to reach agreement on any changes there. The key area that I know personally I was concerned with and hoping we'd see some movement with was subcontracting. There are some areas that as you are aware we could subcontract in that wouldn't impact a lot of employees but could bring substantial cost savings to the health care center operations. Why don't you touch on that? Well, that's true and that's a very difficult issue to face but one that the health care centers committee is prepared to face and to recognize some of the realities of the situation, which is that our operation is not as economical as it might be compared to similar operations in the private sector. In particular, the committee was looking at the possibility of subcontracting out certain areas such as housekeeping, laundry or food service at the health care centers. That would have saved quite a bit of money if the county were permitted to do that. And when you say quite a bit? Talk about a million dollars per year. Between 800,000 and 1.2 million we had some cost estimates prepared if we subcontracted out each of those three areas which the union agreement does not currently permit. Now that's a big savings even for the health care centers right there. It would have unfortunately meant that the county employees would have had to either find other county jobs or find work in the private sector or unfortunately look elsewhere. And that's a very difficult decision to make and a very difficult move to make. But on the other hand, that type of cost savings could have been passed on immediately to Sheboygan County taxpayers. I did a rough estimate and we're talking something in the neighborhood of $15 per year on a $100,000 property in Sheboygan County just for that one item. Well, we're gonna move on to some other areas but certainly to sum up the challenge associated with the health care center's operations is real. And my compliments to you, Mike and your staff and certainly the Human Resources Committee and all of the employees who participated in the negotiations there was give and take and we have made progress. And hopefully this and other substantive changes of the future are gonna allow us to continue providing service to those who certainly need it in this community. Everyone in Sheboygan County, all employees are going to be paying more toward their health insurance and non-bargaining employees as Mike knows certainly are leading by example but I think all employees across the board, not just the health care centers are in all likelihood gonna be close to a 10% premium contribution in the very near future. And anything beyond that, as you pointed out, Mike, then I think we really need to start looking at planned design changes and other options to create more ownership for health insurance because we certainly want our employees and their families to be well covered but the cost, the escalating cost of health insurance has been an incredible challenge. Not only have you just completed work with this bargaining unit at this point, you've got seven other coming up, do you not? One down seven to go. That's not a very remarkable progress but at least it's progress. We do have seven other bargaining units as you point out and those bargaining units are all either in one case already expired but six others expire at the end of 2004. So we've already started negotiating with those units and obviously with those groups, we may not have quite the same set of issues as we have with health care centers although one of those groups involves other employees at the health care centers but with all of those groups we still have the same balancing act to perform between being fair to employees, to providing good service and not reducing the level of service and to protecting the interests of the taxpayer and those things are all on a collision course and we have to strike the best balance we can in each of those seven units as well as with our management or other non-union employees. So the work ensues and it doesn't end when it comes to the negotiations. Occasionally I'll hear from citizens in the community who will say, well, Adam I've heard that the county's paying nearly full benefits to part-time employees. Why doesn't the management team just change that or how is it that we can't subcontract this area if there's those types of savings sufficient or available to keep our operations going? And I hope our viewers who are watching this appreciate that management in government can't simply snap their fingers and make those types of changes. They're negotiated in good faith with bargaining units with employees representing those bargaining units and it takes time. It doesn't happen overnight and the discussions are obviously very important so we can continue to provide excellent service in this community. We only have a few minutes remaining but as we talk about wages and health insurance and all the related responsibilities with your department, why don't you take a couple of minutes just to share with folks? Well, if they're interested in county employment whether it's at our healthcare centers or anywhere else, what's the process to get more information? Sure, we are a major employer in the Shboygan area because of the number of employees puts us up there with some of the larger businesses in town. We do hire on a regular basis in certain areas. We are blessed with a very low turnover rate compared to many private industries depending on the type of work, the type of employment we're looking at. But we do of course in any organization this size has to keep constantly recruiting, bringing in new talent, new dedicated employees that to replace those who retire or otherwise move out. And our process is handled through the Shboygan County Job Center which is located here on Wilgus Avenue in Shboygan and can be accessed either through the Job Center or through the Wisconsin Job Net on the internet which can be accessed through the state of Wisconsin website if you look under employment and then just put in Shboygan County for our region. All of our openings in county government are always listed in those two places. So that's the best place to go and then if you're interested in applying, a candidate has to submit the application to the Job Center and it'll be processed promptly if we have an opening. So if anyone's viewing this, looking for employment opportunities, the Job Center, if they have any questions or want to share any suggestions or concerns, what number would they call in your department to either contact you or one of your staff? It's area code 920-459-3105. Well, Mike, thank you so much for clearing up some issues for us today and sharing some good information. Appreciate you being here. Very glad to. And thank you for joining us on behalf of the Shboygan County Board Supervisors and Chairman Bill Gehring. It's been my pleasure to co-host this program today or host it rather with Bill Gehring's absence. And next month we're gonna be speaking about highway issues and our guest will be Roger Lanning. As you know, it won't be too long and fall will be over. And the winds and snow will be upon us. And Roger always has some good tips and suggestions for highway driving as well as making sure we don't lose too many mailboxes out there. So until then, on behalf of the County Board, my name's Adam Payne, County Administrative Coordinator. Good having you with us.