Wright County Board Minutes

OCTOBER 9, 2012
The Wright County Board met in regular session at 9:00 A.M. with Sawatzke, Mattson, Russek, Thelen, and Eichelberg present.
On a motion by Russek, second by Mattson, all voted to approve the 9-25-12 County Board Minutes as presented.
Petitions were accepted to the Agenda as follows: Greg Kryzer, Asst. County Atty. Item #, “Schedule Closed Meeting for 10-16-12 @ 10:30 A.M. RE: Main v. Wright County” (Kryzer). Mattson stated he will not be available to attend the Closed Meeting. Eichelberg moved to approve the Agenda as amended, seconded by Russek, carried 5-0.
On a motion by Russek, second by Eichelberg, all voted to approve the Consent Agenda:
1. Performance Appraisals: B. Lutes, S. Sandberg, T. Sarvie, Atty.; K. Ahlm, A. Bixby, M. Cogley, Aud./Treas.; S. Denzer, Ct. Svcs.; J. Coolen, D. Demarais, B. Haynes, N. Helgeson, Hwy.; R. Vaa, Parks; J. Ashley, L. Beauchane, J. Eaton, C. Engel, A. Fashant, G. Findley, T. Jorgenson, E. Leander, M. Lindquist, A. Lutgens, D. Olson, C. Poirier, N. Roemer, R. Salls, S. Sims, K. Thompson, Sher./Corr.
2. O/T Report, Period Ending 9-15-12.
3. Refer To Ways & Means Committee Contracts For Parenting Through Divorce & Ag Inspector.
4. Refer Fees-For-Service Policy To The Ways & Means Committee.
5. Claim, Madden, Galanter & Hansen, LLP, $4,409.38, Service For August, 2012.
6. Refer Updating Lighting In Areas Of The Government Center To The Building Committee.
7. Refer Updating Plumbing In the Human Services Center To The Building Committee.
1. Accept The Findings & Recommendations Of The Planning Commission For The Following Rezoning:
A. Allen Dubbeldee (Southside Twp.). Planning Commission unanimously recommends approval of the request to rezone that part laying west of County Road 2 (appx. 8 acres) from AG to R-2.
Bob Hiivala, Auditor/Treasurer, said Kerry Saxton, SWCD, provided a written report for Judicial Ditch No. 14:
As you are aware we had a meeting with the Judicial Ditch 14 group and it was determined to move forward with a redetermination of benefits on this ditch before repair or an improvement is undertaken. This will of course take some time. I send this memo to remind the Board and their counterparts in the other involved counties that there was some flooding that occurred last year in this area especially on 750th Avenue SW. As far as I’m aware no work has been done that will change that situation. If we get hard rains or a rapid snow melt and rains this spring we should expect the same conditions to develop. The Board should consider this and the possibility of trying to fix this area. I did notice a hole in the area that was covered during tillage operations that may indicate a tile break. If this is not the case it might be difficult to try to find the problem without water in the tile lines without digging up a large area or bringing in a jetter. Let me know if the ditch authority wants to deal with the problems, if and when they come, or if they wish to try to take some corrective action this fall.
(End of Ditch 14 written report by Kerry Saxton)
Hiivala said they recently met on Judicial Ditch No. 14 and approved a redetermination. Hiivala said Saxton feels there is an issue with flooding of the County Road in the spring and that the County needs to move forward with some type of repair. Hiivala contacted Kurt Deter about the approval of a redetermination for Judicial Ditch No. 14. Deter’s opinion was that a redetermination does not take away from the need for maintenance. If there is maintenance going forward, that cost will be spread to those benefited property owners. Hiivala told Deter that the County is under the impression that a request will be presented for improvements to the Ditch. Hiivala said moving forward, the County needs to meet with Saxton to determine what needs to be done to prevent damage from flooding of the road. Mattson asked if this involves County Road 21. Hiivala said that is correct. Mattson stated that last year, the Highway Department looked at County Road 21. He understands that if the road is raised, it will crush the tile under the road and that is the reason for not raising it. Mattson said Steve Meyer viewed the tile last year and it is clear. Mattson is unsure whether a larger tile is needed, but it will be up to the County to decide what to do with the road. Hiivala is not sure what Saxton is proposing for repair. Hiivala asked the Board to direct them to follow up with Saxton to scope out what kind of repair can be done, with the understanding that an improvement is being requested and a redetermination will be ordered. Hiivala is waiting for Ron Ringquist to provide the name of the second viewer. Russek said Saxton’s report reflects some areas along the tile that were caved in, so the Ditch may not be functioning as it should. One suggestion by Saxton is to bring in a jetter, but Russek said that is fairly expensive. He questioned how much the County should spend on repairs if the Ditch will be improved in another year. Russek suggested laying this issue over to obtain more information and anticipated costs from Saxton. Hiivala recommended moving forward to obtain the scope of the work and the cost of the repairs. Mattson stated that Virgil Hawkins, Highway Engineer, needs to be involved. Mattson said the Highway Department is very satisfied with the way the system is under the County Road. Hiivala stated that in a redetermination, the County will be assessed benefits for the Ditch system. There is a benefit to the County for a properly working Ditch system. Russek supported Mattson’s suggestion of checking with Steve Meyer to obtain his opinion on whether he feels it is necessary to do something. Russek made a motion for Saxton to contact the Highway Department to see if they would like something done with the road. The motion was seconded by Mattson and carried 5-0.
Hiivala said Saxton provided a written report on County Ditch No. 16:
Ken and Frank Lanto reported a problem on this ditch located in Albion and French Lake Townships which flows into French Lake. Some tile was removed on this ditch in the past and open ditch was used downstream of this site. Four areas were observed in about 1300 feet of ditch where suspected collapses of the tile has occurred. Some of these problems developed some time ago in cropped fields and were filled with rocks to keep machinery from falling in them. In the pasture the tile is exposed and misaligned and standing three quarters full of water. It’s clear that drainage is being impeded and potential drowning of crops is feared. In checking my files it appears the Lanto brothers are not listed as benefited landowners on the ditch records and as such would have no standing to ask for a repair. This is another example where the ditch roles seem to be in error probably due to a former land split. The county can act on its own and I would suggest we investigate and repair if we can the areas of collapse. However the tile is old and we may find that the line should be replaced. This portion of the line is a 22 inch concrete and will be quite costly to replace. Cost to investigate will be affected by what we find and if we can fix areas or not. I would expect about a day to investigate at a cost of about $1500.00 - $2000.00. If it can be repaired this cost may go up considerably.
(End of Ditch 16 written report by Kerry Saxton)
Hiivala stated that the Lantos contacted Saxton indicating there is a tile broken. The Lantos are not included as benefited property owners on the Ditch, but the tile clearly goes through their property. Hiivala contacted Kurt Deter. Deter indicated there is a process that can be followed, under petitioning for an outlet, to add the Lantos to the Ditch System so they can help with the cost of the repair. There is a process that must be followed that indicates their outlet fee is not equal to the repair. Hiivala said a meeting will be held toward the end of October where he will be able to discuss this situation with key people. With the Board’s approval, he could possibly hire them to determine the outlet fee and field this request from the Lantos. If the repair request is approved now, the Lantos will not pay anything. Mattson said he spoke with Ken Lanto and also Kerry Saxton. Saxton said replacing one tile may take care of the problem for the time being. Hiivala said they are aware of the tile work that is needed. Hiivala’s recommendation is to contact a viewer. Kurt Deter provided the names of Ron Ringquist and one other viewer. This is something the viewers can do without an inspection. They will be able to use information that Hiivala has to draft up findings that the County could base the assessment against. Hiivala plans to meet with the viewers on 10-25-12. At the request of Hiivala, Mattson made a motion to answer the petition for the outlet into Ditch 16 by the Lantos, making them benefited property owners and ordering the repair of the tile system. The motion was seconded by Russek. Hiivala plans to bring information to the 10-25-12 viewers meeting, including a list of benefited property owners, and aerial & LiDAR maps of the Ditch system. The motion carried 5-0.
At their last Meeting, the County Board adopted Resolution #12-55 approving a list of Tax Forfeit Parcels and setting a sale date of 10-26-12 at 1:00 P.M. Hiivala said as part of the adoption of Resolution #12-55, the Board made a language change. Since that Board Meeting, he has learned that the language should not have been changed. He asked that the Board rescind Resolution #12-55 and adopt a new Resolution with the correct language. The language would be changed from, “…and that all sales shall be full payment of the terms set forth on the 2012 List of Tax-Forfeited Land” to “…and that all sales shall be full payment or the terms set forth on the 2012 List of Tax-Forfeited Land.” Russek moved to rescind Resolution #12-55, seconded by Sawatzke. Mattson stated that Eichelberg and Mattson were not present at the last meeting during adoption of Resolution #12-55 so they would not be voting at this time. The motion to rescind Resolution #12-55 carried 3-0 on a roll call vote with Eichelberg and Mattson abstaining.
Sawatzke made a motion to adopt Resolution #12-57 setting a sale date for the Tax Forfeit Parcels for 10-26-12 at 1:00 P.M. Resolution #12-57 replaces Resolution #12-55 which was rescinded because of a language change. The motion was seconded by Russek and carried 5-0 on a roll call vote. Sawatzke asked whether the parcels included in this auction are for the general public or part of a special auction. Hiivala responded that the sale will be open to everyone. Sawatzke had concern with the parcel in Walesch 2nd Addition, Monticello Township. The property does not allow the owner to obtain a building permit because of flooding caused by Ditch 33. He felt the most sensible purchase would be by one of the adjoining property owners, as it is a lot of record but is not buildable. Brian Asleson, Chief Deputy Attorney, said all tax forfeit properties are sold as is (buyer beware). It is up to the buyer to inspect the properties and check with Planning & Zoning. The County is required to publish notice of the sale and to send notice to adjoining property owners. If those property owners are interested in a property, it would be up to them to bid.
Hiivala presented the August Revenue/Expenditure Guidelines for approval. The second-half property taxes have not yet been received, so revenues are down in Dept. 100. The first half of the State-Aid has been received. On a motion by Russek, second by Eichelberg, all voted to accept the August Revenue/Expenditure Guidelines.
The claims listing was discussed. Mattson referred to a claim on Page 31, Allina Medical Transportation ($156.26) coded to Jail Medical. Mattson referenced claims paid in the past for transports that ran higher than the most recent amount ($500 on 4-23-12; $400 on 5-15-12; $500 on 9-21-12). Mattson has contacted the Jail Administrator for an explanation on the fluctuation in the costs for transport. Mattson moved to approve the claims as listed in the abstract, subject to audit. The motion was seconded by Russek. Hiivala said the motion should be amended to include approval of 277 vendors for a total of $651,632.40. Mattson and Russek accepted this amendment to the motion. The motion carried unanimously.
Tom Kelly, Wright County Attorney, introduced Mitchell G. Ristine. Ristine was hired 10-01-12 as an Assistant County Attorney, backfilling because of the retirement of an employee. Kelly provided a brief history of Ristine’s educational and work experience. On a motion by Sawatzke, second by Russek, all voted to approve the Appointment and Oath for Mitchell G. Ristine, Assistant Wright County Attorney.
Greg Kryzer, Assistant County Attorney, presented a Joint Powers Agreement (JPA) with Buffalo Township for the joint construction of a roadway in Grand Castle Estates (Buffalo Township). Kryzer said the JPA reflects that Wright County will undertake a process to improve this roadway with the assistance of an Engineer from WSB and Associates. The first $100,000 toward the cost of the project will be paid for by Investment Lending Group, L.L.C. This will be achieved through a Settlement Agreement & Mutual Release between Investment Lending Group, L.L.C., Buffalo Township, and Wright County. Any additional costs beyond the $100,000 from Investment Lending Group, L.L.C will be split equally between Wright County and Buffalo Township. Both the JPA and the Settlement Agreement documents have been approved by Buffalo Township. Mattson asked whether Buffalo Township will take care of maintenance of the road from this point forward. Kryzer said Buffalo Township will accept these roads no later than 10-31-13 and will be responsible for all maintenance. This will not involve revocation of any roads back to Buffalo Township. Mattson asked whether Buffalo Township can revoke the road. Kryzer explained that Buffalo Township has agreed to accept the road after it is constructed. Construction is anticipated to commence in April, 2013 and finish in July, 2013 (tentative schedule). Sawatzke asked whether the $100,000 has been received from Investment Lending Group, L.L.C. Kryzer said it will be received if the County accepts the Settlement Agreement.
Eichelberg made a motion to approve the JPA between Wright County and Buffalo Township. The motion was seconded by Russek. Hiivala questioned the funding source for the County’s cost share of the road, which he anticipated to be $25,000-$50,000. Road & Bridge contacted Hiivala with concern that they would need to fund this portion. Hiivala suggested the Capital Projects Fund. Russek stated another source could be Site Improvements. Sawatzke offered the suggestion of Professional Services. After discussion, it was agreed that the expenditure will not be from this year’s Budget and discussion on the funding source can be brought forward next year when the road is done. At Hiivala’s request, the motion was amended by Eichelberg and Russek to reflect that the funding will not be from the Road & Bridge budget. The motion carried 5-0. Sawatzke wanted clarification on what account the $100,000 from Investment Lending Group, L.L.C. will be deposited into. If it is received into Capital Improvements, it would make sense for the Wright County payment next year to come from that account as well. Hiivala stated that Wright County will cover all expenses up front for the road. With Board approval, he could place the funds into the Capital Improvement account and provide to the Board an expenditure tracking report for the project. Wright County will need to contact Buffalo Township to go over the payment process. It was the consensus that the JPA reflects the process (Wright County will pay the vendor and Buffalo Township will reimburse Wright County). The Board did not feel another motion was needed at this time to designate the funding source. It will be discussed at a future date.
Kryzer presented the Settlement Agreement & Mutual Release between Investment Lending Group, L.L.C., Buffalo Township, and Wright County relating to the funding for the roadway in Grand Castle Estates and the subsequent lift of the Building Permit Moratorium. Kryzer said Buffalo Township approved the Settlement Agreement & Mutual Release. Kryzer said the document reflects that “ILG will pay to the County Auditor/Treasurer the sum of $100,000.00 within 15 days after the execution of this Agreement by both the County and the Township.” By doing this, the document reflects that the Building Moratorium on Grand Castle Estates will be lifted. The deadline for the Township to accept the road is 11-01-13. Eichelberg moved to approve the Settlement Agreement and Mutual Release. The motion was seconded by Sawatzke. Mattson asked if there is a completely new Township Board, whether the Township can get out of the Agreement. Kryzer said the purpose of the JPA is to establish this Agreement. The current Township Board has accepted it. Even if a new Township Board is elected, the Township would be held to this Agreement. The motion carried 5-0.
Kryzer requested that the Board schedule a Closed Meeting on 10-16-12 at 10:30 A.M. to discuss litigation, Main v. Wright County. Eichelberg moved to schedule the Closed Session as requested. The motion was seconded by Sawatzke. Mattson noted that he will not be in attendance at the Closed Session. The motion carried 5-0.
Marc Mattice, Parks Administrator, presented recommendations from the 9-10-12 Wright County Parks Commission Meeting. The first is to waive the minimum number of users per group to reserve or rent group camps. In the past, there has always been a minimum number of 15 to reserve or rent group camps. The Planning Commission requests that this minimum number be waived. Mattice said this would be a change to a general policy guideline and would not affect the Fees-For-Service Schedule. Mattson asked whether there is a maximum number of people allowed in an area. Mattice said they do have maximum user numbers. Eichelberg moved to waive the minimum number of users per group to reserve/rent group camps. The motion was seconded by Russek and carried 5-0.
Mattice said the second recommendation from the Parks Commission is to recommend fee changes to the Parks Fee Schedule. Mattice said the changes would need to be referred to the Fees-For-Service Public Hearing being held on 11-13-12 at 9:30 A.M. On a motion by Russek, second by Eichelberg, all voted to refer the following fee changes to the 11-13-12 Fees For Service Public Hearing:
Item; Current 2012 Rate; Proposed 2013 Rate
Camping Parks, Group Camp (BB, Collinwood); $35/night; $45/night
Shelters, Picnic Shelter Weekend Rental (Saturday, Sunday and Holidays) Collinwood (Beach); $50; $75
Picnic Shelter Weekday Rental (Monday through Friday Excluding Holidays) Collinwood (Beach); $25; $35
Mattice said the Disabled Veterans Waterfowl Hunt was held on 10-06-12 at Ney Park. Sponsors included Wright County Pheasants Forever, Capable Partners, Hasty-Silver Creek Sportsman’s Club, Wright County Veteran Services, Four Point Retriever Club, and Wright County Parks. Mattice extended appreciation to those groups for their assistance and contributions to the event. He also thanked Thelen and Sawatzke for attending the luncheon. Mattice has received positive comments from the participants. It was a great event and hopefully it can be expanded on for next year. Thelen thanked Mattice and Genell Reese, Wright County Veteran Services for their work on the Hunt. Sawatzke thanked the other Parks Department employees who volunteered. He also thanked one of the Sheriff Deputies, who is a member of the Four Point Retriever Club, who brought their dogs to the Hunt.
Judy Brown, Personnel Representative, said quotes were obtained on Long Term Care Coverage for employees. One quote was received from Minnesota Continental Casualty Insurance Company (CNA). Brown stated that Long Term Care is not for everyone. Employees will need to look at their finances and determine if they need coverage for the future. About 70% of people need some type of assistance. If the County decides to proceed, the target date for the open enrollment meetings is 10-30-12. Sawatzke asked whether there are any drawbacks. Brown said there are not. The insurance is entirely paid for by the employee. It will only include a small amount of time and effort from the Personnel Representatives. Long Term Care Insurance can be purchased on the private market. Even if employees do not purchase coverage through the County’s provider, it does encourage them to look into what Long Term Care coverage may do for them. Sawatzke moved to accept the proposal from Minnesota Continental Casualty Insurance Company. The motion was seconded by Mattson and carried 5-0.
A Labor/Management Health Insurance Committee Meeting was held on 9-26-12. At today’s County Board Meeting, Russek moved to approve the Minutes. The motion was seconded by Eichelberg and carried 5-0:
Coglitore distributed a document entitled, “Labor/Management Health Insurance Committee, September 26, 2012, Claims Analysis-March 1, 2013 Renewal Date” (see attached).
Coglitore referred to Page 20, Medical Monthly Summary – Contracts. He explained that this spreadsheet shows the current year summary of County contracts month by month. The current year is defined as 8-01-11 through 7-31-2012. The contracts are identified as employees enrolled in the Single Plan and those enrolled in the Family Plan. An average number of 663 total employees per month participated in the County health insurance plan during this Plan Year.
Page 22, Medical Monthly Summary – Revenue and Claims indicates a Medical Loss Ratio of 96.68%, which does not take into account administration fees, taxes, assessments or other charges. Total Revenue was $7,920,731 for the Plan Year, or an average of $660,061 per month. The average claims Per Member Per Month (PMPM) was $535.78. The Total Claims for the Plan Year were $7,657,481, averaging $638,123 per month. The average claims PMPM was $516.98. The Medical Loss Ratio is derived from dividing Total Claims into Total Revenue. Coglitore said this ratio is slightly less than last year, in part due to the renewal increase, which generated more revenue. Berg said the Medical Loss Ratio last Plan Year was 99%.
Berg said during the first half of the Current Year, two out of four claims were higher than Revenue. That has reversed somewhat as the second half of the Current Year progresses. Berg said hopefully claims during the last half of the year will decrease.
Coglitore referred to Page 30, Medical Network Utilization. This spreadsheet illustrates the categories of claims generated. He said network coverage is good in Minnesota. The percentage of claims highlighted show In Network utilization of 95.60% versus Out Of Network at 4.4%. Out Of Network claims may be emergency services, lab work, etc. Coglitore explained that the aggregate percentage of claims is the entire book of business for Health Partners. The aggregate In Network percent of claims for Health Partners is 98.62%. He said the County In Network claims ratio is good due to low Out Of Network utilization. The Medical Distribution Of Claims on Page 32 shows the same data in a graph format. Petersen asked the meaning of the acronym IBNR on Page 30. Coglitore said that means “Incurred But Not Reported” claims. He said a certain percentage of claims were not processed as of the report date.
Medical Cost Savings Detail on Page 33 delineates claims by type (Professional Services, Hospital In Patient, Hospital Out Patient, Pharmacy, Other, and Total). Total billed charges are $11,936,877. Some of the services have deductibles like member liability and copays. Provider discounts negotiated by Health Partners are detailed in the Provider Discount Savings section. The total percentage of savings is 45.25%. Coglitore said carriers typically negotiate discounts of about 35-45%. The County saved a total of $5,401,827 on claims due to negotiated provider discounts versus billed charges.
Coglitore turned to Page 43, Medical Effect Of Catastrophic Claims On PMPM. This data reflects claims paid in excess of $25,000 for any one member. The Percent Of Total Claims is 21.51% compared to Total Paid Claims. Coglitore said this number significantly increased from 10.37% in the previous year as shown on Page 44. Berg said 21.51% for the Catastrophic Excess Amount ratio is well within the Health Partners aggregate ratio of 25.82%. This is one benchmark underwriters consider. Coglitore said the previous Plan Year was for only five months, which is why the Catastrophic Excess Amount Ratio doubled from 10.37% in the prior year to 21.51% in the current one.
Pages 48 through 50 list individual Medical Catastrophic Cases in the Current Plan Year in excess of $25,000. Petersen asked whether the claims amount was the amount billed or the net after the provider discount. Berg said that amount reflects claims paid. Berg said the Grand Total of Medical Catastrophic Cases for the Current Plan Year is $2,880,295. The previous year there were significantly fewer catastrophic claims. Berg said the second benchmark is Total Catastrophic Claims Compared To Premiums Paid. The ratio increased to 36%, which Berg said is getting high. Coglitore said when underwriters look at renewal data, they expect to see high claimants, especially in a group the size of County employees. The average rate of catastrophic claims is 10 to 15%. Catastrophic claims for County employees totaled 36%. Berg said the higher the catastrophic claims, the more County premiums are used to pay them, leaving less revenue to cover normal claims. They are hoping some of the catastrophic claims drop off in the next few months. Pawelk said if some of the conditions do not recur or the treatments are successful, that number should go down. Berg said they negotiate those amounts down to estimate what the claims will be next year. These spreadsheets show the County the utilization of services.
Coglitore said claims have decreased in the last few months. They hope that trend continues. Berg said the last six months of known data is much better than the first six months. Their hope is that this positive trend is indicative of the future. There are another three to four months to accrue before the Plan Year ends.
Coglitore said the Prior Plan Year on Page 52 shows much lower catastrophic claim data. Referring to Page 1, Medical Expenditure Summary, Coglitore said this is a breakout of claims by service category (Professional, Hospital In Patient, Hospital Out Patient, Pharmacy, Durable Medical Equipment, etc.).
Total claims were $6,999,435, with a PMPM cost of $472.55. Page 2 shows the Prior Year Medical Expenditure Summary.
Coglitore said this year the current claims on the PMPM are up to $472.55, compared to the aggregate book of business at $405.31. The Prior Plan Year (Page 2) accumulated shorter data (over a period of five months), which is why the Total Claims were $2,887,860, with a PMPM of $451.16. The overall claims PMPM increased by 4.5% from the Prior Plan Year to the Current Plan Year. Berg said last year the ratio went down a few percentage points due to renewal entries. PMPM amount of claims decreased in the Current Plan Year. The Medical Loss Ratio also dropped to 96.68% from 99% in the Prior Plan Year.
Page 3 shows comparisons between the Health Partners aggregate book of business to County claims in various categories. Professional medical claims PMPM exceeded the aggregate, although County claims in the Hospital In Patient category fell below the aggregate. Coglitore said they use this data to target different areas to determine where benefit changes would have the most impact. Berg said they do not want to change what is working well.
Pawelk asked whether the Professional category includes employees scheduling preventive care such as annual physicals, exhibiting positive utilization. Coglitore said physicals and preventive care comprise a smaller portion of the Professional category.
Page 6 graphs the Medical Professional PMPM By Service Category. The Surgery category is above the aggregate benchmark, as are Office Visits, Injections/Immunizations/IV Therapy, Other Visits/Procedures and Physical Therapy/Chiropractic. The remaining categories fell below the benchmark.
Coglitore moved to Page 9, Medical Inpatient PMPM By Service Category. This category fell below the Health Partners aggregate book of business.
Page 15, Top 10 Pharmacy PMPM By Therapeutic Class lists common conditions requiring medications. Coglitore said the antirheumatics, asthma and diabetes medications are expensive and can easily drive the claims over the aggregate.
Page 29 refers to Medical Age Distribution, and illustrates where County employees fall within the spectrum. Coglitore said County employees exceed the averages in the 35 to 49 age brackets. The County has a Medicare Supplement plan for retirees who have Medicare A and B. He said the goal is to transition them from the Group plan to a plan specifically designed for Medicare-eligible people. Berg added that the 65 and over age group is a high claimant population, so it is advantageous for the County to transfer them from the Group plan to Medicare to keep County claims as low as possible.
Kryzer asked whether this distribution of younger people in the County plan appears as an advantage when going out for contracts. Berg said it definitely helps, as the lower the population age bracket, the lower the community rate. Carriers blend the County experience rate with the community rate. That is affected by the age of the group. However, claims are still the driver when the County goes out to bid. Carriers won’t bid solely on community age. They will still be concerned about covering County claims, based on past history. However, Berg said a lower age population does have an impact.
Coglitore turned to the Current Plans Proposal Analysis. This spreadsheet compares costs between Blue Cross, Medica and Health Partners (current carrier for the County). Coglitore reiterated that the Medical Loss Ratio does not include administrative fees, taxes, processing, assessments and other charges. Berg said the current County Medical Loss Ratio is 96.68%, and with the administrative and other fees mentioned above added in, the Total Medical Loss Ratio is about 110%. This Ratio is down a few points from the previous Plan Year. He said the Ratio is still high, but more favorable claims data should result as some of the higher claims drop off. Berg hopes that the Total Medical Loss Ratio will fall closer to 100% in the next three or four months. This is when a rate cap protects the County. Last year at renewal time, Berg said the cap was 12%, but Health Partners wanted 24%. It would have been impossible to negotiate another 12% rate cap at that time. Coglitore said he and Berg try to pre-negotiate rate caps with carriers before claims are incurred. Berg said they talked with other groups who had Medical Loss Ratios of 100 – 101% who were getting 12% rate caps. The carriers are losing money on these groups. Coglitore said this is the last year of the rate cap for 2013. The rate cap negotiated prior to 2013 was 15%. If claims decrease in the next few months, the rate cap will hopefully go down. He said they will bring that to the carrier’s attention during negotiation. If the trend continues in the right direction, Berg said the rate cap would hopefully be around 11% to 12%. They won’t know until final claims data is processed. It will help if $2.5 million in catastrophic claims drop off, as those payments represent approximately 30% of the total $7 million in claims.
Coglitore referred to the last page of the document, entitled Wright County Health Insurance Renewal Synopsis. The first graph illustrates increases requested by carriers from 2006 through 2012 versus the increases negotiated by B & C Consulting, LLC on behalf of the County. For example, in 2006 the carrier requested a 30% increase, but B&C negotiated that amount down to 9%. B & C negotiated on claims and rate caps. The total savings negotiated by B & C Consulting over the seven-year period was $4.7 million.
Berg said the County Medical Loss Ratio for this entire period was more than 100%. He added that to achieve a single-digit increase for seven years straight with higher than 100% Total Medical Loss Ratios is very difficult. Coglitore said carriers look at the amount they pay out versus the premiums coming in. The big drop in increases in the first graph on this page occurred when the County changed carriers from Medica to Blue Cross. The negotiated discounts generated from the move to Health Partners compared favorably to Medica. Coglitore said other B & C clients have also received better discounts when they moved to Health Partners. Health Partners has the strongest negotiated discounts in the market at this time. The County realized $4,700,011.18 in savings through negotiated discounts in the last seven years.
Brown commented that recent articles in newspapers predict a rise in health care costs. Berg agreed. He said representatives from Preferred One recently mentioned that their aggregate claims are trending up. Health Partners has reported the same. He has not talked to Medica regarding their data. Berg said claims declined for two to three years, but now that trend is reversing. He commented that when health plans are profitable, carriers give clients a more favorable terms. As they buy business, they become unprofitable again and the group may become motivated to switch carriers. It’s a cycle.
Coglitore said increases in the last few years were in the single digits. Before that, there were double digit increases. He hopes claims will trend in the right direction. Berg said Health Partners held their trends at 10.6% compared to other competitors who have gone up 12-13%.
O’Malley asked Coglitore to verify that the County currently has a 15% cap rate, but that B & C hopes to negotiate that down to 12%. Berg said they don’t know what future claims will do, but taking an educated guess based on the last six months, if ongoing claims continue to decrease, the prospects for a lower cap rate look positive. Underwriters view ongoing claims as a hindrance to normal utilization. However, if claims continue to go down, the cap rate should, too. Typically, you can’t have a lower cap rate with increasing claims. Coglitore added that the County has one really large catastrophic claim. It would be helpful if the smaller claims level off.
Kryzer asked whether B&C will recommend changing carriers again in the near future. Berg responded that this upcoming renewal period would not be a good time to change carriers because of the increase in claims and the large percentage of catastrophic claims. Going out to bid may be a possibility in the future, after the County incurs one more renewal increase and if claims level off. B&C’s goal is to secure favorable terms for the County, as well as rate caps for the future. Coglitore said an effective strategy when going out to bid is to use other bids received when negotiating with the incumbent carrier. This works well if claims are trending in the right direction. In that situation, the carrier would not want to lose County business. Given the present claims data, the County would be ill advised to bid another carrier and expect to receive lower rates. If the County stays with a carrier for a number of years, they will have more negotiating leverage when they go out to bid. At that point, the County can tell the carrier in effect, “This is your one chance to bid.” Carriers have their entire sales team and underwriters present at the negotiating sessions.
Brown asked how health care reform will affect the County Plan. Coglitore said the impact will not be great for a group the size of the County. Several mandated changes related to women’s health care include 100% coverage for both birth control and breast pumps. Preventive care in Minnesota has always provided 100% coverage for those items. The maximum age for dependent children was always 25. Now, with health care reform, the age will increase to 26.
Kryzer asked whether the current County copay of $10 will increase in the future. Berg replied that he did not see that being offered indefinitely, although it may be a few years before the copay is increased. They have no idea when that will occur. Berg said $30 to $40 copays are the norm at this time.
Recommendation: Informational only.
(End of Labor/Management Health Insurance Committee Minutes)
A Personnel Committee Meeting was held on 9-26-12. At today’s County Board Meeting, Sawatzke moved to approve the Minutes. The motion was seconded by Eichelberg and carried 5-0:
I. Request For Job Share.
(Human Services Board Item).
II. Performance Review/Consider Reappointment, Greg Kramber, Assessor.
Based on four Performance Reviews submitted, the Committee recommends an overall rating of “Exceptional.” The Committee also recommends that Kramber re reappointed Assessor for a four year term commencing January 1, 2013.
(End of 9-26-12 Personnel Committee Minutes)
Bills Approved
Arrowhead Env. Cons. $27,758.22
A & H Contracting LLC 4,250.00
Afix Technologies Inc 1,145.98
Albertville Body Shop Inc 609.18
All Wheels Recovery 18,449.50
Allina Hospitals & Clinics 431.50
Allina Medical Laboratories 156.26
Allina Medical Transportation 190.00
Allina OCC Med 255.00
American Soc. of Civil Eng 11,183.59
American Tower Corporation 595.70
Ameripride Services 2,429.46
Annandale Rock Products 9,224.00
Anoka County Corrections 13,706.98
Anoka County Sheriff 6,527.06
Aramark Services Inc 4,865.15
Asplin Travel Plaza/Kirk 156.00
Association of MN Counties 149.00
Atlantic Safety Products 108.60
Bakeberg/George 234.00
Bauman/Lawrence R 552.00
Bean/Jodi 108.00
Berg/Stephen L 159.00
Black Box Resale Services 224.00
Bottiger/Shawna 150.00
Boyer Truck Parts 514.07
BP Amoco 3,181.32
Braun Intertec Corporation 1,871.50
Buffalo Hospital-OTPT Comm 180.85
Buffalo/City of 101,865.21
Carver Co. Attorney’s Office 200.00
Centra Sota Coop. - Buffalo 57,800.97
Central Hydraulics Inc 154.33
CenturyLink 328.81
Chamberlain Oil Co 1,101.14
Chief Supply 220.00
Clearwater River Watershed 2,561.80
Cokato/City of 469.00
Comm. of Transportation 1,036.68
Contech Construction Prod. 8,144.08
Cottens Inc 2,220.66
Croteau Plumbing 1,361.64
Crow River Tools 261.84
Denn/Franklin E 758.00
Dept of Corrections 28,917.00
Diamond Mowers Inc 815.82
Douglas/Ralph D 568.00
Elk River Municipal Utilities 141.95
Emergency Auto. Tech Inc 15,561.88
Engel/Dale L 200.00
Ernst/Debbie 292.80
Expert Towing Inc 189.17
Fedor/Thomas 125.00
Findley/Greg 120.13
FirstLab 279.65
Fred Bonk Gravel 320.00
Gabriel/Cathleen 100.00
Glunz Construction LLC 125.00
Gopher State One Call 190.15
Gould Towing 165.65
Grainger 611.04
Green Interiors 610.62
Hardings Towing Inc 160.31
Hazelden 125.00
Hillyard Inc - Minneapolis 5,715.74
Holiday 23,074.29
Howell/Gregory 349.92
Identix Incorporated 467.18
Interstate Battery Systems 456.14
Junction Towing & Auto Repair 281.90
Kaplan Professional Schools 892.00
Keaveny LTC Pharmacy 2,257.95
Kramber/Greg 698.24
Kustom Signals Inc 420.74
L3 Communications Inc 262.56
LaPlant Demo Inc 1,618.00
Lawson Products Inc 851.13
Loberg Electric 1,639.11
M-R Sign Company Inc 948.52
Marco 20,855.36
Marco Inc 7,447.72
Martin-Mcallisters Consulting 800.00
Matt Legal Services 100.00
Mattson/Richard 116.00
Menards - Buffalo 195.54
Metro Group Inc/The 7,097.06
Mid-Minnesota Hot Mix Inc 10,373.08
Mini Biff LLC 133.28
MJ Dunn Company 696.13
MN Assn Of County Surveyors 400.00
MN County Attorneys Assoc. 239.98
MN Monitoring Inc 950.00
Morries Parts & Service Group 311.77
Motorola Inc 13,271.94
Multi Health Systems Inc 351.00
Nami In-St Cloud Area 100.00
New River Medical Center 800.00
Northern States Power Co. 1,477.11
O’Reilly Auto Parts 230.00
Office Depot 4,288.87
Performance Kennels Inc 101.00
Postmaster-Buffalo 365.00
Precision Prints of Wright Co 128.25
Purick/Ryan 200.00
Ramacciotti/Frank 200.00
Reese/Genell K 208.27
Regents of the U of MN 31,862.49
Royal Tire Inc 3,256.38
Russek/John 149.50
Solar Winds Inc 958.00
Sprint 11,059.47
St Cloud Stamp & Sign Inc 117.13
State Supply Co 214.98
Synergy Graphics 38,675.03
Terminal Supply Co 149.02
Total Printing 610.79
Traffic Marking Service Inc 31,378.49
Trueman Welters Inc. 479.98
University Of Minnesota 1,234.70
Verizon Wireless 833.18
Waldron/Tom 125.00
Walmart Store 01-1577 805.51
Waste Management TC West 1,692.72
Waste Management-TC West 369.10
Weber/Gordon S 280.00
Woodford/Michael 174.50
Wright Co. Highway Dept 53,142.96
Wright Soil & Water Cons Dist 239.29
Xiotech Corporaton 21,817.26
Zacks Inc 157.07
61 Payments less than $100 3,009.82
Final total $651,632.40
The meeting adjourned at 9:54 A.M
Published in the Herald Journal Nov. 5, 2012.

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