COSA's ERRP: Dance Around Strings

Images sum up the City of San Angelo's approach to health insurance.  The following picture shows City Manager Harold Dominguez highlighting how the city planned to save $483,000 in health insurance costs.

It's not the city's new low cost mammography service, but how employees will go from two local providers to one.  San Angelo Community Medical Center is the new exclusive provider for city workers and retirees.  Shannon Medical Center will be shut out.

As a result, the city will squeeze retirees a little less than last year.  A small portion of the $483,000, roughly 29%, will go to lower employee/retiree dependent premiums. Council made this decision in a November meeting.

The second shows how the city plans to utilize $343,000 in Early Retiree Reinsurance Program (ERRP) funds, a decision made December 20th.

It involves shifting money from one sack to another to avoid requirements, something generally frowned up by funders. 

The council ended up voting 5-1 to apply the $343,287 to pay 2012 (i.e. current, immediate) claims and then take a comparable amount out of the city's self insurance fund and put it into the fund balance (i.e. the savings account fund within the health insurance fund), so that there are not "federal strings" attached to how that money can be used in the future. The motion approved stipulated that the money will be used for rate stability or possible catastrophic claim experience.

Oddly, for all the talk of federal strings, City leaders failed to identify ERRP's sole requirement.  An employer must use ERRP money to offset increases in health insurance premiums/costs.

One might expect Human Resources and Risk Management Director Lisa Marley to clearly state the city's intended use of funds and federal requirements.  She didn't.

While City Finance Chief Michael Dane dubbed his "avoid federal strings" strategy "compliant", I have serious doubts about substituting federal money for local.

City leaders state health insurance costs will go down in 2012.  Federal money cannot supplant local, such that an employer spends less on health insurance than the prior year.  Yet, that's exactly COSA's plan. 

"We believe we've been betrayed."  Russell Smith

When Retired Police Chief Russell Smith finished his public testimony, even the Rushmores' (faces sitting on high perches) were speechless. It echoed Council Chambers the first time Smith uttered the dreaded "ERRP" in November 2010.  In between, it's been a black comedy of incompetence and/or mendacity.

My guess?  It's a bit of both, given a number of city leaders wish to eventually tap the health insurance fund surplus for capital items.  As of 11-30-11 the health insurance fund surplus stood at $1.3 million, up from nearly $1 million two months prior.  These amounts do not include the $343,000 in ERRP cash. 

The rush to implement a multi-stage plan, amidst ignorance of ERRP requirements, could imperil the money intended to help soften future blows for city retirees.

Every picture tells a story and the City offers a hapless ERRP tale.  Fortunately, it's all on tape, even the convoluted motion which failed to make the meeting minutes.

Update 3-9-14:   Sponsors must comply with record maintenance requirements and provide records upon request in connection with audit or other ERRP integrity related activities. The Sponsors must maintain records for 6 years after the expiration of the plan year in which the costs were incurred, or longer if otherwise required by law. The records that must be retained are as follows— (1) All documentation, data, and other information related to the regulations, and (2) Any other records specified by the Secretary. The Secretary may issue additional guidance addressing record keeping requirements, including (but not limited to) the use of electronic media. The sponsor must require its health insurance issuer or employment based plan, as applicable, to maintain and produce records upon request.

ASU Cats without NIne Lives

Leaders at Angelo State University expressed willingness to work with volunteers proposing a safe, effective and humane way of dealing with the university's feral cat problem.  Somehow the word didn't get to workers charged with trapping.  Early this week seven ASU cats were taken to the San Angelo Animal Shelter.  Today, two more trapped cats arrived at the shelter. 

Texas Tech University has a feral cat program, headed by a former Marketing employee.  Oddly, ASU has two marketing employees who've gone to great lengths to save university cats in peril.  One relocated most of ASU's cats during a prior trap/kill/starve program, which occurred under Dr. Jim Hindman.  After a costly rodent infestation, this effort was judged a mistake.

Why does ASU seem unable to learn in this regard, either from their or others' experience?  Sixteen years ago the University of Texas enacted their feral cat colony.  It safely and dramatically reduced their cat population from 115 to 15. 

For some reason a sixteen day reprieve couldn't be enacted, at least effectively.  Such a hold would've allowed community and university animal organizations to assist ASU.  Of the nine, two have been euthanized.  The other seven were saved by a concerned citizen. 

Was Winston, a gray and white cat who hung around the UC, one of the victims?  If so, the university lost an icon. 

Many worked to hard in short order to save ASU's cats.  The list includes area citizens and employees.  Let's hope word gets up and down the chain of command and that ASU becomes the latest Texas university with a vibrant, effective feral cat program.

Deja Vu: ASU Plans to Kill, Starve Cats

Angelo State University's feral cat misery-go-round spins again.  Under President Jim Hindman all feral cats were removed.  Within months the university had a major rodent infestation.  Mice and rats caused significant damage to wiring in several buildings.  Facility Manager John Russell knows the story.

For a period of time, volunteers trapped, spayed and neutered ASU's feral cats.  Employee turnover meant most of these volunteers left ASU.  Nobody managed the pet store.

The result is ASU's feral cats, untrapped and not fixed, multiplied.  ASU announced a plan is to trap and take the majority of these cats to the San Angelo Animal Shelter.  This is a sure death sentence given the Shelter's policy of euthanizing wild cats.

Cats left at ASU are to be starved.  Anyone caught feeding university cats can be disciplined.  Because humans didn't manage the problem, many cats will be exterminated. 

Trap, spay/neuter, release and regular feeding works to reduce cat populations without euthanasia.  One San Angelo feral cat colony went from 27 to 10 under conscientious management.  One might expect a university to be at the forefront of feral cat care, not repeatedly retreating into the dark ages. 

Knowledge is sorely lacking, profound and otherwise.

Update 12-30-11:  ASU trapped and took seven cats to the San Angelo Animal Shelter, where they were exterminated that same morning.  This occurred despite efforts by area citizens and the head of Texas Tech's feral cat colony.  There is a chance ASU will move away from their plan to kill and starve cats on campus.  However, it will take a concerted community effort.

Later update 12-30-11:  The Animal Shelter employee charged with euthanization was off, thus not all of ASU's cats were exterminated.  Of a total of nine brought in, two were euthanized.  Seven will be saved by interested citizens.

Latest update 2-2-12:  Local citizens and ASU employees proposed an ASU feral cat colony, which was approved by administration.  As a result, remaining campus cats get a reprieve.  Kudos to all who cared for ASU's cats and worked hard to get the university on a different trajectory!

Spirit of Christmas: All Aboard

My connecting flight boarded late and I stood at the end of the line.  Surely there would be no room in the overhead bin for my luggage.  Bah humbug, I checked the bag at the gate.

After stowing my laptop beneath the seat, I envisioned a nap.  To my surprise the flight attendant didn't deliver the usual safety spiel.  She offered her version of The Night Before Christmas (which I'll post if it's shared with me).  This inspired my derivative version:

Twas two nights before Christmas

and all through the plane,

weary travelers expected the usual inane.

But this safety briefing rang with humor and heart

that no corporate script could ever impart.

Travelers perked up their ears, smiles broadened wide

as Stewardess #1 delivered line after line.

The pilot announced he and the first mate

would hold up the trip, making us a little late.

Important packages were destined for the hold.

Gifts for our loved ones, young and old.

These acts took place on one solitary flight 

of an airline in bankruptcy, what a terrible plight.

Pay will be cut and pensions obliterated,

so executive bonuses can be liberated.

Yet this crew set aside the cards they face,

giving great joy to the human race.

Keep this a secret, whatever you do.

Corporate PR would never approve.

Christmas flickers in each heart's light,

especially in those facing challenges of blight.

Many thanks to the creative word stew,

the pilot, first mate, the whole inspired crew.

They brought me home for Christmas,

long before the plane finished its flight.

Love and joy to all,
and to all a good night!

This message can be reproduced by anyone except corporate lawyers intent on finding my identity, which bankrupt airline I flew and what crew worked the flight, which was actually a sleigh ride.  Legal beagles, that means reindeer tracking!

Update 2-9-12:  Reuters reported "AMR filed for Chapter 11 on November 29, citing a need to trim uncompetitive labor costs. The company told employees last week that it aims to cut expenses by $2 billion a year, slash about 13,000 jobs and terminate pensions. AMR also intends to generate $1 billion per year in new revenue."  It also stated "American already has plenty of cash, a strong domestic route network and service to Europe and Asia as well as related oneworld alliance partners in London and Tokyo."

Federal Strings vs. San Angelo City Promises

When the City of San Angelo applied for Early Retiree Reinsurance Program (ERRP) funds in July 2010, their application stated:

The City of San Angelo is self-insured for health coverage.  Early Retiree Reinsurance Program Reimbursement proceeds will be deposited in a dedicated account for insurance funds.  These funds will then be used to offset increases in premium contributions and increases in participant costs.

In their last meeting Council decided to use $343,000 in ERRP money in 2012.  The problem is the city will use the funds in a year when premium contributions and participant costs are going down.  Council members want to avoid federal strings, however in doing so, the City breaks the only string associated with the program. 

One might conclude city leaders have forgotten their promise made eighteen months ago.  One could wonder if they aim to purposefully violate the only ERRP rule, that money be used to cushion cost increases.

Forgetful or twisted?  Neither are the least bit inspiring, but that's the abysmal state of leadership.

Grinch COSA on Health Insurance

San Angelo City Council decided to use Early Retiree Reinsurance Program (ERRP) funds in 2012, a year where the city already expects significant savings (of which only a small portion is being passed onto employees/retirees and their dependents). There is no sharing of ERRP funds to decrease premiums or improve benefits, as promised and required. I believe Council's move could endanger the funds given ERRP's requirements:

Last year's present to employees/retirees?  'Twas a lump of health insurance coal via draconian premium increases. The City turned Grinch this Christmas, taking nearly all the goodies for itself. Wahoo, wahoo....

City Council Jeopardizes ERRP Funds

The Standard Times reported on San Angelo City Council's designated use of Early Retiree Reimbursement Program funds:

The council ended up voting 5-1 to apply the $343,287 to pay 2012 (i.e. current, immediate) claims and then take a comparable amount out of the city's self insurance fund and put it into the fund balance (i.e. the savings account fund within the health insurance fund), so that there are not "federal strings" attached to how that money can be used in the future. The motion approved stipulated that the money will be used for rate stability or possible catastrophic claim experience.

ERRP states funds can be used to increase benefits or reduce premiums.  Under their vote Council will not use funds for either purpose.  ERRP.gov noted:

To the extent a sponsor decides to use the reimbursement for its own purposes, it may use the reimbursement only to offset increases in the sponsor's health benefit premiums or health benefit costs.

Council's November decision on health insurance ensured the city's portion would decline.  Benefits did not increase.  They decreased dramatically for "out of network" care.  While employee/retiree premiums will decrease in 2012, the source of that premium break is not ERRP funding.

Since qualifying for ERRP in August 2010, the City funded a consistent $4.77 million for health coverage.  Council's decision knocks down the city's contribution from $4.77 million to $4.43 million for budget year 2011-2012.

Rather than use ERRP money to impose a less draconian burden on employee and retiree dependents in 2011, COSA plans to "pay claims" in 2012, when it supposedly will save $483,000 under an exclusive arrangement with Community Medical Center, this after coming in $1 million under budget in their self insurance fund.

One could argue the fairness of the city passing on the vast majority of premium increases in 2011, while holding the lion's share of savings in 2012.  That seems patently unfair, a scorching of employees, retirees and dependents.  However, a greater issue is the City's compliance with ERRP regulations.

In this citizen's mind this clearly fails ERRP's maintenance of contribution requirement.  Might the feds ask for their money back?

The city has been evasive and obtuse on this issue since getting approval from the feds. If the city has the feds snooping around their use of funds, it's earned and well deserved.

City Plays Hard Ball with Shannon

Shannon Medical Center sent a letter to City employees explaining how they can serve the 70% who utilized Shannon's services in 2012.  Click on the image below to make it larger:

The odd thing is not considering Shannon "out of network" for hospital care.   COSA employees using Shannon for nonemergency acute care are like Stripes customers, cash & carry. That's alot of ka-ching, even with a 50% discount.

Mayor New and City Council may drive San Angelo's safety net hospital into the arms of a tax paying entity.  Big money men shop for distressed health care assets.  How long before Shannon goes for cheap?

While health care is frequently the cause of crisis, the City of San Angelo manufactured one to push this move. 

City Council Finally Will Hear ERRP Presentation

City staff will make a presentation on the Early Retiree Reinsurance Program, nearly 16 months after being approved by Health & Human Services.  ERRP went from:

--invisible to 

--hush-hush to 

--iffy to

--too complex to

--nearly $350,000 in cash

It's item # 11 on the agenda:

Consideration of the following matters related to the Early Retiree Reinsurance Program (ERRP) reimbursement funds
a. Consideration of accepting said funds
b. Discussion and possible action regarding allocation for use of said funds received in the amount of $343,287.50 and based on the 2010 health insurance claims (Presentation by Human Resources and Risk Management Director Lisa Marley)

The city is restricted in its use of ERRP money.  Eventually it will be used to lower premiums for workers/retirees or improve benefits.  The city did not use ERRP funds for either purpose in 2011 or 2012.  Maybe they'll have an impact in 2013...

Uncle Sam to Imitate San Angelo on Medicare?

Senators Ron Wyden (D-OR) and Paul Ryan (R-WI) proposed shifting Medicare to a fixed contribution benefit for senior citizens.  The plan is based on the same foundation as the City of San Angelo's fixing their contribution toward employee/retiree health insurance.

Should the Wyden-Ryan plan pass, will Uncle Sam also pass on draconian premium increases in bad years, while taking the lion's share of savings in good years?  That's what COSA did in 2011 and plans for 2012.

I expect San Angelo to eventually dump their health insurance benefit, as most employers may.  Senator Ron Wyden offered pioneering proposals in this arena long ago.  Union leader Andy Stern said in 2006, employer sponsored health insurance is dead and not coming back.   A bipartisan team would be needed to make this a reality.

The race to the lowest global common denominator on worker pay/benefits, including health care and retirement, continues.  Exempt are campaign donations and executive pay.  Gorging must continue at the campaign money trough.

ASU's Turbulent Future Includes Two New Alumni Positions

Angelo State University will pay for ASU Alumni Association's Executive Director and Office Manager in an announced move.  These two new university positions will report to ASU's newest Vice President, Jason Penry.

The three new slots came after the Texas Legislature decimated ASU's budget, requiring the elimination of 30 positions.  A companion announcement said ASU would spend $435,000 on two pieces of yard art.  Apparently Texas Tech's budget practice of spending a portion of new construction funding on art wasn't impacted by budget cuts. 

ASU is also considering a move to Division 1 athletics.  Employee pay was frozen and many educators took on double overloads, teaching more courses with higher enrollment.  ASU is either a conundrum or a tale of two universities.  One side gives, while the other takes.

Earth Bound Art Coming to ASU

Modern art lovers will be excited about Angelo State University's planned additions.The red ribbon piece is budgeted at $60,000, while the stainless steel comes in at $375,000.  Texas Tech requires a portion of major construction projects be dedicated to public art.  The art is intended to enhance the University's ambiance and aesthetics, even add whimsy, according to Dr. Rallo.

One criteria mentioned by Dr. Rallo is the art shouldn't look like aliens dropped it from space.  I'll leave it up to you to judge, but space art beauty is clearly in the eye of the beholder.

Update 1-11-12:  KLST ran a story on Dr. Rallo's new yard art at ASU.

City of San Angelo ERRP Update

With 90% of federal funds expended, the City of San Angelo nervously awaits $150,000 in Early Retiree Reimbursement Program funds.  So far COSA received  $343,000 from the feds for retiree health claims. 

Nearly one year after ERRP began paying claims, San Angelo made the recipient list.  The City's dragging its feet in filing claims turned Harold Dominguez's "iffy" assessment into reality.  Let's hope Harold didn't leave $150,000 on the table as retirees need the help.  How many will be left when the city decides to share?

Rallo & Entourage Head to SACS Annual Meeting

Angelo State University President Joe Rallo recently attended the SACS Annual Meeting in Orlando, Florida.  Rallo serves on the board of the university accrediting body, as ASU sits in a precarious position. 


ASU's future accreditation might be in the hands of a good report writer.  The editor's task is writing a consistent report that presents the university's accomplishments in the most favorable light.

The university's compliance and accreditation committees changed as often as Rallo's Vice Presidents.  The point man for much of ASU's accrediation work was Dr. Limbaugh, headed to North Montana State for a Chancellorship.

There is a game plan.  The question is execution with top turnover and organizational trauma inflicted by the Texas legislature.  Ironically, Dr. Rallo is now Chair of a Texas higher education council, one focused on public universities.  His responsibility is to interact with the Texas legislature.

Rallo failed to publicly fight for ASU in the last budget decimation.  How will he fare representing all public universities in early 2013?   

Also attending SACS on behalf of ASU were:

Nancy Allen - Vice Provost

Crystal Braden - Director of Institutional Planning, Policy Effectiveness

Doyle Carter - QEP Director

Stephen D. Emmons - Faculty Representative

Sarah Logan - Asst. VP Institutional Research & Accountability

Brian May - Interim Provost and Vice President for Academic Affairs

Bradley Petty - Director of University Recreation

Karen Shumway - Director of Student Learning Assessment

Paul Swets - Interim Dean, College of Arts and Sciences

John Wegner - Associate Professor/Director of Center for Innovation in Teaching and Research

Dr. Wegner serves in the English faculty.  I expect he'd know the difference between wording for strength and clarity vs. spinning yarns.  It remains to be seen how ASU will muster the will and competence to pass accreditation given its fractured culture and unceasing turnover. 

How did I know to research this story?  I sat behind Dr. Rallo on American Eagle's 7:00 am flight to DFW.