Employee wellness programs: Higher productivity and lower costs

“Six-to-eight percent of the city’s employees drive almost two-thirds of the health care costs around five chronic illnesses that are all manageable. … health care costs are being driven [up] by ten percent a year and we’re not seeing revenue growing that way.”–Chicago Mayor Rahm Emanuel

Chicago, Illinois (population 2.7 million): City employees would see their monthly health insurance premiums rise by $50 unless they participate in a “wellness program” to manage chronic health problems such as obesity, diabetes and high blood pressure, under a private sector-style plan to be unveiled Friday. After a standoff on work-rule changes, Mayor Rahm Emanuel has forged an agreement with city unions on a plan to use what he has called the “carrot-and-stick approach” to drive down the city’s $500 million-a-year health care costs by as much as $240 million over four years.

The program would begin by offering city employees and their dependents enhanced screening and wellness training to establish benchmarks and long-term goals, including weight loss, medication, exercise and kicking the smoking habit. Coaches would ride herd over workers on a bi-monthly basis to make certain they’re following their prescribed nutritional, medical and physical fitness regimens. Those who refuse to participate would see their monthly premiums rise by $50. Those who meet their goals could see similar reductions.

Chicago taxpayers spend $500 million-a-year to provide health care for city employees, nearly ten percent of the city’s annual budget. Emanuel campaigned on a promise to reduce those annual costs by as much as $60 million in each of the next four years by implementing an incentive-laden plan mirrored after the one pioneered by Safeway and Johnson & Johnson. “We cannot afford the standard we’re on. And we can’t afford to do pilots anymore. … Six-to-eight percent of the city’s employees drive almost two-thirds of the health care costs around five chronic illnesses that are all manageable. … We are going to be the first city to … implement a citywide wellness plan for our employees because health care costs are being driven [up] by ten percent a year and we’re not seeing revenue growing that way.”

Johnson & Johnson managed to reduce employee smoking by two-thirds, cut high-blood pressure in half and get $3 of savings for every $1 invested in incentives. Read more at the Chicago Sun-Times.

Newnan, Georgia (population 33,039): The City of Newnan has been selected by the Georgia Municipal Association to receive one of 30 Employee Health Promotion & Wellness Incentive Grants awarded statewide to promote worksite programs designed to enhance the health and wellness of city employees and family members. Awards are made to members of the Georgia Municipal Employees Benefit System — GMEBS — Life and Health Insurance Fund, underwritten by Blue Cross and Blue Shield of Georgia, based on a city’s commitment to employee health and demonstrated collaboration with other community groups and organizations engaged in health promotion.

Wellness programs have demonstrated a track record of improving employee health and quality of life while reducing medical claims and improving workplace morale. GMA offers wellness services to all member communities through LGRMS, a not-for-profit agency operated jointly with the Association County Commissioners of Georgia. Employees will be offered a confidential health assessment program using a Health Risk Appraisal, with blood pressure screening and health improvement feedback, as well as other health education and awareness programs. Read more on the Newnan Times-Herald.

Advertisements

Municipal service cuts: Part of the new normal?

“’Do more with less’ is what the slogan has been for many years. It seems to me that we are now at the point of doing less with less.'”–Dane County, Wisconsin, County Board Vice Chairman John Hendrick

Dane County, Wisconsin (population 488,073): Emergency shelter for homeless families, medical help for the dangerously drunk and assistance for the disabled are among the services that would be reduced or at risk in the initial draft of Dane County’s 2012 budget. County Executive Joe Parisi instructed department heads to submit budgets cutting up to 10 percent in the face of state aid reductions, limits on tax revenues and the sluggish economy.

Overall, county departments from the Sheriff’s Office to public works to parks are proposing cuts of $21 million and 13 layoffs, with a dozen vacant positions eliminated. It’s unclear which cuts will eventually be made. The departmental budget proposals differ from previous years because they call for the layoffs — not just eliminations of vacant positions — which would mean employees bumping into new jobs and disrupting operations, said County Board Vice Chairman John Hendrick.

Also, social services cuts aren’t spread evenly among agencies, and for the first time since the 1990s there is no allowance to help nonprofits comply with pay raises required under the county living wage ordinance, he said.

Some cuts in mental health, bail monitoring and crime prevention would eventually result in higher jail and in-patient psychiatric costs, said board Chairman Scott McDonell.

Lynn Green, head of the county Human Services Department, proposes cutting $200,000 from a contract with Tellurian UCAN and eliminating its 19 “detox” beds, where police can bring people who are incapacitated by alcohol to dry out for 24 hours. Without the detox center, though, police will need to take the dangerously inebriated to hospital emergency rooms, where they may have lower priority, meaning officers will have to wait long periods of time with drunks before they can drop them off safely and go back on patrol, said Madison Police Chief Noble Wray.

Green’s budget proposal anticipates hundreds of thousands of dollars from state, federal and other sources to offset reductions for the disabled. She acknowledged that getting the money isn’t a sure thing. Aid to the disabled would erode under the proposal, with clients having less independence and dignity, and some being forced into nursing homes, said Richard Berling, who directs Madison Area Rehabilitation Centers, Inc. The proposal also halves county funds for a Salvation Army overflow shelter for families. Green said she wants to put resources into long-term solutions for the homeless instead of emergency “Band-Aids.” Read more at the Wisconsin State Journal.

 

Palm Beach Gardens, Florida (population 48,452): No raises for fewer city employees, shorter hours at the Burns Road Recreation Center and less money for neighborhood programs are why officials say higher taxes won’t be considered at the final budget hearing on Sept. 22. The proposed budget for next year is $108 million, up from this year’s $105 million. The proposed property tax rate of $5.74 per each $1,000 of assessed value would mean the owner of a home assessed at $250,000 with a $50,000 homestead exemption would pay $1,148. The rate does not include school, county and other taxes. The proposed budget includes an increase in the city’s monthly communications tax that would cost the average resident about $50 annually. That tax increase will raise about $1.1 million annually. Budget highlights include:

  • Parks and recreation money would be reduced from $4.8 million to $4.1 million. That means less mowing of lawns and lighting at city parks. The Burns Road Recreation center will continue to have shorter weekend hours between September and Memorial Day.
  • Elimination of the Military Trail grant program, which gave homeowners on the road up to $5,000 to fix up their houses.
  • The budget for the 117-member police department would increase from the current $20.9 million to $21.9 million.
  • The budget for the 118-member fire department would decrease from the current $18.8 million to 18.6 million.
  • No pay raises for the 436 city employees, who have not received raises since 2009. There were 514 city employees in 2007.
  • Combining the city’s police dispatch service with Jupiter and Juno Beach at the Garden’s emergency operations center. Gardens expects to make about $200,000 annually by charging the two towns for the dispatch service. Read more at the Palm Beach Post.

Youngtown, Arizona (population 6,163): Youngtown will go broke within three years if officials don’t drastically cut services or find new sources of revenue, town leaders say. The town, like other municipalities across the state, is suffering declining revenues from the recession and additional costs passed down by the state Legislature. Officials, who are hosting two public meetings this month on the town’s dwindling resources, rolled out a public survey last week. They said the community’s 6,163 residents have five options:

  • Become a county island.
  • Merge with El Mirage or Peoria.
  • Eliminate services by closing facilities such as the Police Department.
  • Authorize its first property tax to fund existing services.
  • Do nothing and continue operating until the town depletes its $1.8 million in savings.

The Town Council recently approved a $4.7 million budget for the 2011-12 fiscal year. It’s more than last year’s $3,983,000 budget due to incoming grants and unspent money from last year. Officials say they drew $630,000 from its rainy day fund to balance this year’s budget. If that continues – assuming no additional revenue streams are obtained – the savings will last until 2014-15, barring a major emergency expense that could hasten its depletion. Such an emergency could include serious flood or storm damage to a city street or public facilities.

The town has a grim history of trying to sell voters on a primary property tax. Voters shot one down last year by 73 percent of the vote. The money would have helped sustain the Police Department’s $1.3 million budget, town leaders said. Its defeat forced $500,000 in cuts that included four officer layoffs. It also resulted in one layoff in the town’s public works department. The remaining eight-member force was called by an outside consultant “a Police Department in name only,” and the consultant recommended the department be disbanded.

Reducing staff and other spending in the town isn’t an option either, said Town Manager Lloyce Robinson. She said the town is already down to the “bare bones.” The town is also in a never-ending search for new sources of money, such as federal, state and tribal grants. They also recently hired a consultant to help the town market itself to businesses and developers in hopes of lifting sales taxes and developer impact fees.

If it’s absorbed by El Mirage or Peoria, the town comes under the control of those cities’ councils. If it becomes a county island, the cities services and infrastructure will be managed by the county Board of Supervisors. Read more in the Arizona Republic.

 

Payroll

Augusta–Richmond County, Georgia (population 195,844): City Administrator Fred Russell and city bean counters are beginning work on next year’s budget, holding hearings with department heads, but there is some unfinished business in this year’s budget…the 40 or some raises he approved, and now an internal audit report is finding problems with some of those raises. The report found that, in some cases, Russell far exceeded his authority to grant raises up to 15 percent. Meanwhile, the raises have prompted Commissioners Alvin Mason and Bill Lockett to call for across-the-board raises for all employees, a three percent increase would cost about $3 million…and almost $5 million for a five percent raise. Also on the agenda, Commissioner Alvin Mason is renewing his call to terminate Fred Russell. Read more at WJBF.com.

De Soto County, Mississippi (population 161,252): With little debate, the DeSoto Board of Supervisors on Tuesday in a 3-2 vote approved a lean $114 million county budget with no raises for county workers. “We’re happy about a budget that doesn’t increase the tax burden on the citizens,” County Administrator Michael Garriga said of the blueprint for the fiscal year beginning Oct. 1. “It also maintains services at the current level.” The budget forecasts total expenditures of $114,163,950, just $1,092,286 or less than 1 percent more than fiscal 2011’s $113,071,664. Total anticipated revenues are $78,409,508, with beginning cash at $64,669,000. Total ending cash would be $28,914,558. Read more at The Commercial Appeal.

Cape Coral, Florida (population 154,305): An 8 percent pay cut for police and firefighters could cover most of the $4 million gap between spending and income in the next city budget, City Manager Gary King said this morning during a Cape Coral City Council budget workshop. The city and the two unions are deadlocked in their negotiations over pay. An impasse has been declared. Mayor John Sullivan also was cautioned about how he proceeds with his intent to use his line item veto on the police and fire department budgets by the city attorney. Read more on News-Press.com.

Columbia, Missouri (population 108,500): City Manager Mike Matthes reccommended a pay raise for city employees Monday night as part of his proposed budget for fiscal year 2012. The city council discussed this along with the 1.3 percent budget cuts in the proposal. Matthes suggests a 25 cent an hour raise for city workers, who haven’t gotten a raise in two years. Matthes said the pay raise is to support higher performance among employees. The council must cut $2.3 million of its budget. It is also considering increasing service rates and making cuts to the bus system. During the public hearing, local residents spoke out mostly against the rate hikes and changes to transit. Council members said they would take their opinions into consideration as they continue discussing the cuts. Matthes said checks will start to bounce in July if no changes are made. Read more on KOMU.com.

Manteca, California (population 67,096): Assistant City Manager Karen McLaughlin will earn $144,690 in pay prior to taxes when she becomes City Manager. That is some $20,000 less than her predecessor was making. The contracts for both reflect higher rates of pay but that was before compensation reductions of 23.4 percent are factored into the equation. The compensation reductions are part of a citywide across-the-board cut in pay to balance the city budget and to eliminate the structured deficit. Read more at the Manteca Bulletin.

Louisville, Colorado (population 18,376): The City Council gave City Manager Malcolm Fleming a 3.9 percent raise Tuesday night, bumping his annual pay from $153,088 to $159,016. Fleming, who started with the city four years ago at a salary of $145,000, remains the third highest-paid municipal manager in Boulder County. Fleming, who declined a pay raise last year, will continue to receive a $525 monthly car allowance. Read more at the Daily Camera.

Lake Wales, Florida (population 13,076): All the city’s 178 city employees kept their jobs, which is what commissioners wanted. However, there is no cost-of-living adjustment this year and the city cut payroll costs by 3 percent — $247,442 — by requiring city employees to take 10 unpaid days off. Lake Wales hasn’t had an assistant city manager position for at least two years. All those duties are done by the city manager and department heads. Several departments shifted and traded job duties to cut vacant positions. Read more at NewsChief.com.

Mulberry, Florida (population 3,933): City commissioners gave Mulberry City Manager Frank Satchel Jr. an 11 percent raise Tuesday night, totaling $7,000 annually. The proposed city budget has 2.5 percent average raises for the city’s rank-and-file workers. Commissioners considered a formal evaluation for Satchel, but decided it wasn’t necessary. Satchel told commissioners he didn’t think he needed a formal evaluation. Satchel was appointed city manager two years ago after a succession of managers left amid controversy. He had been a city commissioner for 18 years in the past and had spent his career in the Polk County school system. Satchel also receives a monthly car allowance totaling $400. The proposed 2011-12 budget, which commissioners will consider at a meeting next week, includes about $20,000 collectively for the city’s employees, said Finance Director Blake Rane. That will allow for some of the city’s estimated 40 employees to receive merit raises ranging from 2 percent to 3 percent. Commissioners said Tuesday they weren’t concerned about finding $7,000 in the budget to boost Satchel’s salary. Scrocca said Satchel, who holds a doctorate in public administration, is worth more than the city is paying him, and Mulberry should be grateful he’s willing to work for what the city can pay. Read more on TheLedger.com.