State of the Division

City Leaders Excited About Propect of Leaving San Angelo

2012-01-30T21:51:00.001-06:00

San Angelo CIty Manager Harold Dominguez will bolt for the Rocky Mountain foothills, taking the city manager job in Longmont, Colorado. The TimesCall reported:

"I think the future's bright for Longmont," he (Harold Dominguez) said. "I'm excited about the opportunity to be considered and to be part of that future."

His deputy, Assistant City Manager Elizabeth Grindstaff, is a finalist for the city manager slot in Burleson, Texas. The Standard Times reported:

"I'm excited at the opportunity," Grindstaff said.

Burleson is "vibrant," while Longmont is "moving forward."

"I did not know Mr. Dominguez was also in the running" for a new job when she applied for the Burleson position, Grindstaff said. "Timing was interesting to say the least."

Yes, the timing is interesting. Did City Council excite paid staff right out of San Angelo?

Texas Suspension: ASU Athletes vs. Governor Perry

2012-01-29T22:51:00.001-06:00

Before Texas Governor Rick Perry "suspended" his Presidential run, Angelo State University administrators reinstated over 20 "suspended" student athletes.

Rick Perry failed more than once to identify the three departments he would eliminate as President. Nearly two dozen ASU athletes failed to keep a 2.0 grade point average in their major. This slated them for a semester off, per university policies, OP 10.04 and OP 1007. ASU's website states:

Students on Academic Suspension
Students who were suspended at the end of their last term in attendance may appeal to the dean of their college to be reinstated. Students must complete their appeal prior to the first day of classes for the upcoming semester. Contact the dean of your college if you have questions regarding your suspension. For specific information regarding suspension regulations, please refer to the University Catalogs.

Did all reinstated athletes follow this procedure, appealing to the dean of their college? If not, SACS might like to know. Accrediting bodies evaluate an organization on its ability to follow procedures.

ASU's suspension policy is clear, establishing a bare minimum which allows departments to enact stricter requirements. For example, suspended students need to fill out a Request for Release of Academic Suspension for the College of Business.

Will Rick Perry fill out a similar Request for Release of Presidential Suspension in 2016? Simple words have little meaning anymore, at least to ASU and Governor Perry. Here's to a viable path forward for ASU's accreditation.

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MedHab to Choose by Valentine's Day

2012-01-28T16:56:00.004-06:00

On January 5th MedHab's President Johnny Ross said he would decide within 35 to 40 days between San Angelo and Abilene for his company's manufacturing site. That puts the decision at Valentine's Day at the latest.

San Angelo's economic development package appears to be a sweetheart deal for a fledgling company. How often has City Council offered an employer roughly $3 million in cash incentives?

Add the investment romance between Mayor Alvin New and MedHab and things get more interesting. City leaders purposefully misled area reporters and the public on Mayor New's stake in MedHab, as well as his board of director position.

Take the City's piece on Council approved MedHab incentives, which stated:

The company has raised $1.8M from less than 10 investors (3 in Austin, 3 in San Angelo, 1 in Lubbock, 2 in Dallas).

The piece stopped at "3 in San Angelo," failing to specify local investors Mayor Alvin New and Randy Brooks, a member of San Angelo's Development Corporation.

Nine investors ponied up $1.8 million, an average of $200,000 apiece. The Standard Times indicated New and Brooks held less than 1% of the firm, a $30,000 equity stake. As MedHab sold equity in $25,000 increments, the other seven investors had to put up an average of $250,000.

Red flags suggest corporate ownership of MedHab stakes. MedHab's Texas filing had two corporations as board members, NNNN and Deaton Engineering. Mayor Alvin New has three NNNN corporations on file with the state of Texas. Deaton Engineering offers medical device design, however its website does not show MedHab as a case/customer.

Deaton helped Neil Bush profit from his Presidential brother's No Child Left Behind. Neil's Ignite Learning used Deaton to design its COW, curriculum on wheels. Deaton described the case:

Ignite! came to Deaton Engineering with an urgent need to design and prototype their product concept and begin shipments in just six weeks. The device would be a self-contained unit featuring a built-in computer, LCD projector and speakers. The overriding requirement was that elementary and middle school teachers would be able to simply plug in the device and begin a lesson.

MedHab's timeline isn't quite as urgent, given their Australian product launch will occur in June 2012. Deaton's news feed is surprisingly light the last eighteen months, especially for a firm with deep capabilities and interesting partnerships

The COSA Development Corp piece showed an additional incentive, not included in City Council slides.

- an economic development incentive in the form of a reimbursement of up to 25% of costs incurred by the company for building

I would look at the motion made by City Council regarding MedHab for clarification, however this crew has a notorious record in documenting decisions.

San Angelo's economic development package is a sweet non-debt, non-equity capital injection for MedHab. It should help the company land $3 million in mezzanine financing. That should boost Mayor New's and Randy Brooks' investment.

(Click on the image to make it larger)

MedHab's NNNN is Alvin New

2012-01-26T18:47:00.002-06:00

MedHab's website lists San Angelo Mayor Alvin New as a member of the company's board of directors, yet New's name is absent from MedHab's officer and director filing with the State of Texas Comptroller of Public Accounts. The filing does list an "NNNN" with offices in the 500 block of South Koenigheim. Mayor Alvin New has an office in such a building.

Mayor New owns the 4N Ranches. He's also the 4N on the MedHab board. It's not a stuck electronic typewriter key, not "nnnn" the least. Three of four Texas NNNN corporations have Alvin and Patricia New as sole members of their board.

Mayor New clearly wanted little to no attention on his MedHab holdings and governance position. The clues are numerous.

Did Harold's Longmont Offer Come from Stiffing Retirees?

2012-01-25T19:01:00.004-06:00

San Angelo City Manager Harold Dominguez is the top candidate for Longmont, Colorado's City Manager slot. He has a month to negotiate a favorable contract though Longmont's headhunter, appropriately titled Slavin Management Consultants. Many City of San Angelo jobs appear to pay "slavin" wages

This isn't a new phenomenon, given city workers slaved for decades under pitiful wages, all for the promise of lifetime health insurance coverage. Harold significantly eroded this benefit for the city's early retirees. He characterized federal money, intended to help keep insurance affordable for early retirees, as "iffy" and "problematic, one time funds." .

The City refused to use ERRP funds during 2011, when dependent premiums rose from 36 to 58%. Those increases sent nearly 200 people from the rolls of the insured.

Harold will apply ERRP funds in 2012 in order to "reduce federal strings." Expending ERRP funds, in a year where the city expects major savings from an exclusive provider arrangement, appears to violate the one string that employers maintain their level of contribution toward health insurance.

Longmont proposed changing its retirement plan for city workers, making it far less generous. How did the December 2011 City Council vote go? Also, Longmont received nearly $200,000 in ERRP money. How might Harold put his signature stamp on it?

According to retired police chief Russell Smith, a number of San Angelo's early retirees have to choose between medicine and food, as health insurance premiums exploded under a fixed income. The lucky ones found a new job to pay for their health insurance. The unlucky? They may be happy to see Harold go.

"I think the future's bright for Longmont," he (Harold Dominguez) said. "I'm excited about the opportunity to be considered and to be part of that future."

Longmont City Employees should do their research. Slavin could be their retirement future, which might not be so bright under Harold.

Update 1-27-12: Harold accepted Longmont's offer. He's ready to move Longmont forward, likely at the expense of retirees.

Tom Green County's Cash Cow Continues Full Bore

2012-01-24T20:21:00.004-06:00

The Tom Green County Indigent Health Program came in $700,000 under budget fund for the year ended August 31, 2011. The County budgeted over $2 million, but spent less than $1.3 million, counting $1 million in Upper Payment Limit (UPL) contributions. The $700,000 savings made its way to the County's general fund.

The long standing pattern held as county leaders reported spending a mere $69,888.66 the last four months, That doesn't include UPL funds allocated to San Angelo's two area hospitals. It's less than $17,500 per month for Esperanza Clinic and independent providers caring for indigent patients..

The county is required to budget 8% of its general tax levy for Indigent Care, which amounts to $2.2 million for 2012. Giving the County a $1 million credit for its UPL contributions, that leaves $1.2 million to spend on indigent care. At the current rate of spending the county will pay $210,000 though 8-31-12, which translates to another $1 million transfer to the general fund.

It's a decade long cash cow, which may be used to "increase yields to reduce taxes.".

Shannon Gets Bigger Chunk of Smaller UPL Pie

2012-01-24T19:16:00.001-06:00

Tom Green County Commissioners awarded Shannon Medical Center a greater share of Upper Payment Limit monies. Tom Green County contributes $1 million per year, which is levered by the state and federal government. Shannon's share of UPL money rose from 80% to 85%, which sounds like a badly needed shot in the arm for San Angelo's safety net hospital,. burdened by state budget cuts and the City's exclusive provider arrangement with Community Medical Center. It's not.

The match decreased from 3.55 to 2.5, so Shannon gets a bigger slice of a smaller pie. Of the $1.05 million cut, Shannon's hit is $655,000, while SACMC loses $385,000.

Shannon's stress is not alleviated by this move, not in the least.

City Leaders Duped Reporter on MedHab

2012-01-21T10:15:00.002-06:00

San Angelo City leaders duped the public and a talented reporter on Mayor Alvin New's ties to Medhab LLC. The first misrepresentation centered on Mayor New's position at MedHab. The Standard Times reported New as a member of MedHab's advisory board. This was patently false. MedHab's website listed New as a member of the board of directors and not on their advisory board. When I notified Kiah Collier, she wrote back:

I reported that because that's what Donna Osborne told me. I called her this morning and she said she told me that because New is an adviser to MedHab, i.e. serves in an advisory capacity on its board of directors. We'll run a clarification tomorrow. Thanks.

Board members provide governance, a considerable step up from advice. They are either independent board members of insiders. Osborne's language is typical of today's leaders, obfuscating facts with language. Frankly, it's sad.

The second misrepresentation dealt with substantial investment and corresponding conflicts of interest. The Standard Times stated:

City staff said New and Brooks have chosen voluntarily to recuse themselves from all votes and discussion on the MedHab deal, even though they do not have substantial interest in the company, defined as owning 10 percent or more of the company's voting stock or shares or $15,000 or more of its fair market value.

This also is patently false. Mayor Alvin New filed two affidavits, one in May and another in November 2011, regarding his substantial conflict of interest in MedHab LLC. .

This crew. Mayor Pro Tempore Charlotte Farmer and City Manager Harold Dominguez, could've shown up with Mayor New's affidavits and laid everything out on the table. The merits could've been discussed. Instead City leaders look mendacious and manipulative. It's becoming a pattern with this group.

Oddly, a Standard Times' poll finds the public appalled by the lack of ethics, with 82% voting the city acted inappropriately in changing its ethics rules. The fodder exists for a follow-up piece, which take awhile given Kiah's leaving for the Houston Chronicle. While Kiah reports on shipping, will Mayor New's MedHab ship come in?

Latest Nightmare: Rallo May I?

2012-01-18T00:07:00.004-06:00

A strange cast of characters lined up before Dr. Joseph Rallo, President of Angelo State University, in my dream. The group stood roughly thirty feet away from Dr. Rallo, who sat on a ledge of ASU's $375,000 "Evolving Helix" yard art. Oddly, Rallo wore a large blue jeweled and gold crown

Kingly Rallo addressed a man in camouflage gear, asking "Servant, what do you carry?"

Camo-man responded, "Your highness, I have an animal trap and sardines, good for trapping cats.."

President Rallo surmised, "Do you wish to rid our residential campus of pesky feral felines?" Camo-man replied, "Rallo, May I?

Dr. Rallo thought for a minute before stating, "Yes, you may, but there's one condition. You must do it on Christmas break, when students are not around. Be evasive and circumspect about your plans. In this, I have taught you well."

Camo-man nodded. "I'll catch those #@%& cats." He popped the sardine can, taking a big sniff. After removing the tin lid, he made a cutting motion across his neck. "That's the fate of caught kitties." He ran off, sardine juice sloshing.

Rallo turned to address a man holding a much smaller crown, resting on a blue pillow.

Crown-man extended his arms such that President Rallo could read the title emblazoned on the crown, Provost. Rallo spoke, "You wish to recruit me a Provost Prince."

Crown man replied, "Your highness, I would be so honored. Rallo, May I?"

Dr. Rallo crossed his legs. He rubbed his chin as his mind sought the right words. "This search, must it be serious? May I give the crown to one I have in mind?"

Crown man replied, "You look thoughtful if you seek the right one, even if they are already under your very nose. We can make theater. It won't be the first time we've conducted a search in name only. This I can do. Rallo, May I?"

Dr. Rallo replied, "Yes, you May. This May, the person you are searching for, I'd like him to fill my seat when I retire. Ensure he is eventually crowned King."

Crown man dutifully asked, "Rallo, May I?" Rallo simply repeated, "May, yes, may, yes, may..." as he admired his thrown on ASU's Evolving Hell-ix.

Twin Buttes Irrigation to Go Year Round

2012-01-16T23:10:00.001-06:00

San Angelo City Council may amend their contract with the Bureau of Reclamation on irrigation water from Twin Buttes. The proposed resolution states:

"providing for allocation of the Project water supply and to reflect the change in the irrigation season from February 1st through October 31st , to year round use."

The originator of the memo amending the contract is Water Chief Will Wilde.

City of San Angelo
Memo Date: January 10, 2012
To: Mayor and Council members
From: Will Wilde, Water Utilities Director
Subject: Agenda Item for January 17, 2012
Council Meeting Contact: Will Wilde, Water Utilities Director, 657-4209

Caption: Consent Agenda. Consideration of a Resolution authorizing the City Manager to execute an amendment to the Contract for Twin Buttes Reservoir with the Bureau of Reclamation.

Water Chief Will Wilde owns a 300 acre "hobby farm" with rights to the irrigation water. City leaders said there was no conflict of interest in September. Did Wilde ever file a disclosure statement in this regard? Has that been made available to the public?

Coming on the heels of Mayor New's unsubstantial, but substantial conflict of interest and his advisory board vs. board member position, City leaders should be out front on declared conflicts. However, this Council is consistent in their opacity.

New's November 1: Middle of the Arc

2012-01-15T21:37:00.004-06:00

San Angelo Mayor Alvin New had a busy November 1, 2011. He chaired the first City Council meeting of the month, where council addressed employee and retiree health insurance. Sometime that same day New signed an affidavit indicating his substantial conflict of interest in MedHab LLC, a firm in negotiations with the City of San Angelo for economic development assistance.

Affidavit Mayor New; MEDHAB, LLC 12-159

During the summer budget process City Council prioritized economic development for an $800,000 increase.

Council made sure health insurance stayed low on the priority list in budget deliberations..

After Council budgeted no increase in health insurance, it entertained an exclusive provider arrangement with Community Medical Center, projected to save $483,000 in 2012. .City Council refused to consider using ERRP funds for the second year in a row. The projected $480,000 in ERRP money could've kept Shannon as a provider, while the city's health insurance bill remained reasonable.

Council approved the money saving, exclusive provider arrangement on November 15. It addressed capital items at their next meeting..

Mayor New clearly stated his desire to use health insurance savings for capital budget items. On December 20 Council decided to use ERRP money in 2012 to "avoid federal strings." This combination should free up a huge amount of health insurance money.

Watch upcoming budget amendments for financial sleight of hand. To think that health insurance money could fund the new Business Resource Center, well that's appalling. It fits with a Council that wiped out local ethics standards for economic development assistance. Mayor New and MedHab are dual benefactors.

Much of the arc remains to play out on all three issues, health insurance, capital projects and MedHab's $3.6 million incentive. However, there are enough clues to be concerned about the trajectory..

(To see all MedHab posts click here)

City Council Minutes Hapless on Ethics Change

2012-01-14T17:35:00.000-06:00

How far can the bar fall in San Angelo City Government? Below are the minutes from the January 3rd City Council meeting relative to MedHab LLC's $3.6 million in economic development incentives.

16. Page 234 Minutes Vol. 103 January 3, 2012 RECESS At 11:41 A.M., Mayor New called a recess.EXECUTIVE/CLOSED SESSION At 12:17 P.M.,

Mayor Pro Tempore Charlotte Farmer Farmer chaired the meeting as Mayor New was in Australia.

The minutes have Mayor New calling a closed session to discuss economic incentives.

Council convened in Executive Session under the provision of Government Code, Title 5. Open Government; Ethics, Subtitle A. Open Government, Chapter 551. Open Meetings, Sub-chapter D. Exceptions to Requirement that Meetings be Open, Section 551.087 to discuss an offer of financial or other incentive to accompany or companies with whom the City of San Angelo is conducting economic development negotiations and which the City of San Angelo seeks to have, locate, stay or expand in San Angelo.

The absent Mayor New "concluded the Executive/Closed Session" on MedHab, then reconvened the Open Session at 1:01 pm.

Council reconvened, and the following business was transacted: CONSIDERATION OF MATTERS DISCUSSED IN EXECUTIVE/CLOSED SESSION APPROVAL OF A RECOMMENDATION BY THE CITY OF SAN ANGELO DEVELOPMENT CORPORATION (COSADC) BOARD TO AMEND THE CITY OF SAN ANGELO DEVELOPMENT CORPORATION GUIDELINES FOR JOB CREATION ASSISTANCE SECTION ENTITLED ELIGIBILITY OF APPLICANTS AND REVISING OUTDATED CONTACT INFORMATION.

The proposal related to elected officials and city leaders holding an economic interest in a venture. Such holdings made the venture ineligible for economic assistance.

Development Coordinator Robert Schneeman presented background information. A copy of the presentation is part of the Permanent Supplemental Minute record. Council member Morrison expressed his concern regarding the amendments to the application eligibility criteria noting that the current criteria rules have been styled to prevent elected and appointed officials from receiving funds from the City of San Angelo Development Corporation. He expressly spoke in opposition of the amendment.

Council members Alexander, Hirschfeld, and Adams spoke in favor of the amendment and proposed MedHab incentive (item immediately following this item). Motion, to approve the amendment to the Guidelines, as presented, was made by Council member Hirschfeld and seconded by Council member Alexander. AYE: Alexander, Adams, Hirschfeld, and Farmer. NAY: Morrison and Silvas. Motion carried 4-2.

With Mayor New's impediment removed, Council moved on to the $3.6 million incentive for MedHab referred to in the minutes as "background information.".

APPROVAL OF AN OFFER OF ECONOMIC INCENTIVES TO MEDHAB, L LC, A MEDICAL DEVICE COMPANY CONSIDERING LOCATING IN SAN ANGELO INCLUDING, BUT NOT LIMITED TO, A TAX REBATE, JOB CREATION GRANT, BUILDING RENOVATION GRANT, AND LEASE ASSISTANCE

Community and Economic Development Director Shawn Lewis and Economic Development Coordinator Donna Osborne presented background information. A copy of the presentation is part of the Permanent Supplemental Minute record.

17. Minutes Page 235 January 3, 2012 Vol. 103 Council members Hirschfeld, Alexander, Silvas, and Mayor Pro Tempore Farmer spoke in favor of the incentive.Motion, to authorize the incentive, as presented, was made by Council member Adams and seconded by Council member Hirschfeld. AYE: Alexander, Silvas, Adams, Hirschfeld, and Farmer. NAY: Morrison. Motion carried.

Here's how the minutes ended:

ADJOURNMENT Motion, to adjourn, was made by Council member Adams and seconded by Council member Morrison. Motion carried unanimously.The meeting adjourned at 2:01 P.M. THE CITY OF SAN ANGELO

___________________________________ Alvin New, Mayor (conflicted and absent)

ATTEST:_______________________________Alicia Ramirez, City Clerk Annexes A-G In accordance with Chapter 2, Article 2.300, of the Official Code of the City of San Angelo, the minutes of this meeting consist of the preceding Minute Record and the Supplemental Minute Record.

Following these minutes, I might believe Alvin New directed things in abstentia.

MedHab: Mayor New's Substantial Conflict of Interest

2012-01-14T11:34:00.001-06:00

San Angelo Mayor Alvin New filed this affidavit in May 2011 indicating his substantial conflict of interest regarding MedHab LLC. At the time of this filing the Mayor was prohibited from any ownership position in a company doing business with the city.

Affidavit Mayor New; Medhab May 2011

Mayor New filed a second affidavit regarding MedHab LLC in November 2011 as the city neared a final deal with MedHab. City leaders presented that deal on January 3, 2012.

Affidavit Mayor New; MEDHAB, LLC 12-159

City Council changed their local conflict of interest policy to keep Mayor New in compliance. Leaders did not reveal the contents of New's affidavits or his board position and board compensation arrangements, which often involve equity awards.

Council approved a $3.6 million incentive package for MedHab LLC, which the company will accept, at least that was staff's promise. That's a nice $2.95 million nondebt, nonequity cash injection.

There are many if's to solve for MedHab to become a viable enterprise. Should that come to pass, my guess is Alvin New won't be Mayor when MedHab's founders and early investors cash in. How much will taxpayer cash aid MedHab investors, including San Angelo's Mayor New? It remains to be seen.

Update 1-19-12: Scripps Howard papers in West Texas stated "New and Brooks do not have substantial interest in the company." Yet New filed two affidavits declaring his substantial conflict of interest in MedHab. One reporter got taken.

MedHab: City Council Made New Compliant

2012-01-11T23:56:00.001-06:00

Had San Angelo's City Council not changed local regulations, Mayor Alvin New faced a major conflict of interest. New would've had to resign or sell his stakes for MedHab to get an incentive package.

During the ethics debate, Council members argued that San Angelo needed 227 jobs, as if those positions were guaranteed. Hardly, MedHab projected 85 jobs for its knee-and-below rehabilitation product. It's other three product lines remain in the conceptual stage.

Jim Turner at ConchoInfo researched MedHab's high tech product for knee rehab. He found MIT worked on shoe sensors in 2006 and a year later tested wireless pressure sensors in a shoe. Nike and Apple have patents dealing with shoe sensors that measure pressure, motion and temperature. Their patents mention training and rehabilitation.

MedHab submitted their idea in 2008. Jim believes MedHab's one patent is shaky, given strong prior art in the space. To produce the product, Jim believes MedHab will need to license other firms' patented technology, especially in the wireless arena.

The $2.95 million cash incentive is based on jobs provided and capital investment made. Add in-kind incentives and the total grows to $3.6 million. Council can say "no jobs, no investment, no incentives."

While that's true, the multimillion dollar package makes it more likely, Medhab will be able to borrow money and recruit new investors. Many small firms want to grow enough for a bigger company in the same space to buy them out.

It's possible MedHab's venue shopping for incentives will markedly increase the company's value. Nearly $3 million in cash is one heck of a nonequity, nondebt capital injection.

Jim couldn't shake the feeling of snake oil around City Council's two moves. He reminisced about past firms with big employment promises, Apex-Maxima, SafeCar and CCI, Bill Robinson's faith based prison. AgriLight sent jobs to San Antonio and R.G. Barry closed after City Council funded their RFID machine.

Economic development guru Shawn Lewis promised MedHab would come to San Angelo if Council approved the package. Mayor New's $25,000 MedHab investment isn't considered a conflict of interest. MedHab will provide 227 jobs. And Jim Turner knows where you can buy snake oil

PEU Warning: City Council & Staff Not Angels

2012-01-07T22:47:00.006-06:00

San Angelo's Economic Development Coordinator Donna Osborne presented a $3.6 million incentive package for MedHab. During her time Osborne defended the apparent conflict of interest two city leaders had under city rules.

Osborne shared history, includingd MedHab's sponsorship by the Concho Valley Angel Network (CVAN). Interestingly, Donna Osborne is CVAN's administrator. Their website states (under membership):

Membership is by invitation only and may require a short screening process. For more information regarding membership or for an application to join, please contact our Administrator, Donna Osborne, at cvan@cvan.org or 325-652-9214.

Osborne played a key role in the incentive contract associated with lowering the ethical standards bar for government leadership. State ethics law ignores investments, instead focusing on income.

City Council wiped away their local requirement that no city official have any conflicted contract with the city until six months after they leave their position, doing so in a 4-2 vote.

Mayor Alvin New's holdings, a minimum $25,000 if bought in either of two equity floats filed with the SEC, would be in excess of state law (more than $15,000 in fair market value of a company) and thus a conflict of interest.

Recall the issue is elected leaders holding a financial interest in a company under contract to the city. Here's what council members said:

Dwain Morrison called it a direct conflict of interest, saying the city was changing bylaws to make unethical behavior right.

Paul Alexander said we grow or dry away, that leaders cannot invest in San Angelo. Leaders should not be disqualified from financial health. It's the structure of what we've done in America through corporations.

Kendall Hirshfeld applauded those who've done well for San Angelo, those doing well and those who will do well for San Angelo in the future. Nothing should hurt, slow down or detract from investment. Keep good strong people, regardless of business background, on boards and commissions. Shouldn't discriminate against those who've been successful.

Fredd Adams said he is for the creation of 227 jobs, for creation of 220 jobs that are going to pay a living wage, allow 227 people to invest in our tax base. The City doesn't have six months for the Mayor and Randy Brooks to resign. MedHab will chose soon. Adams hated to lose jobs on a technicality.

Johnny Silvas noted cities are struggling to keep unemployment down. This deal could be a shot in the arm for the community. Let Mayor New and Randy Brooks do their thing and not sleep if it's wrong. If it goes away, it will hurt us, especially the 227 people struggling to support their family.

Note MedHab's 227 jobs, of which 142 are highly speculative. Only 85 positions are associated with a patented product.

Charlotte Farmer banged the gavel in Mayor New's absence. She beiieves in rules, favors guidelines. The way the current ethics guideline is written, it will make it more difficult to recruit members. The policy needed to be amended to fit today's times and needs.

The need is for wealthy people to invest in start up companies milking various local, state and federal programs for capital. When investors lever taxpayer cash, returns are magnified.

How long before other City Council leaders shepherd their investments toward economic incentives? Greed does that.

P.S. Thematically, this post could sit on my PEU Report blog. PEU Report tracks private equity underwriters (PEUs) and their distorting impact. The Concho Valley Angel Network members include "Active, SEC accredited private equity investors." Members only...

Update 1-10-12: KLST did a story on the city's deal with MedHab. They interviewed the Mayor. It took a city council vote to eliminate the Mayor's conflict of interest.

New-Angel-MedHab Timeline

2012-01-07T17:37:00.001-06:00

When did Alvin New became an investor and board member of MedHab LLC? Where in the following timeline did his initial investment occur and when was he elected to the board? These could be two different dates.

1. MedHab is introduced to the Concho Valley Angel Investor community by Lee Pfluger. Discussions begin with the City of San Angelo (2008)

2. Alvin New meets MedHab's Johnny Ross at an investor presentation. New volunteers to help MedHab with negotiations with the City of San Angelo, the Chamber of Commerce and State of Texas (prior to October 2009).

3. MedHab's Johnny Ross supports Alvin New in his bid for Mayor via a Standard Times Letter to the Editor in October 2009. Ross indicates he will select a plant site in the coming year (2010).

4. Mayor New wins election in December 2009. Turnout is low as citizens are focused on Christmas.

5. MedHab's floats $255,000 in equity in October 2010. Eight investors are shown on the SEC filing. Minimum stake is $25,000.

6. MedHab offers another $1.8 milllion in equity in May 2011. The minimum investment remains at $25,000.

7. Mayor New files an affidavit on his relationship and holdings with MedHab (not published).

8. San Angelo City Council approves a change in its conflict of interest policy to allow elected representatives to hold an equity stake in companies doing business with the city. Council drops their previous standard which would have caused Mayor New to choose between his MedHab stake and being Mayor. (January 2012)

9. City Council gives MedHab a late Christmas present, $3.6 million in economic incentives. (January 2012)

Obviously Mayor New's investment came before Item #7. Maybe New's affidavit will add light to this rough timeline.

MedHab Floated Equity Twice in Last Two Years

2012-01-07T11:51:00.001-06:00

SEC filings indicate MedHab LLC offered equity stakes of $2,055,000 the last two years. The first offering was $255,000 in October 2010, where eight investors bought stakes. The second offering of $1.8 million showed a May 2011 filing date. They intend to move the whole amount within a year. The minimum investment accepted by MedHab is $25,000 under both filings.

What impact might a $3.6 million economic incentive from the City of San Angelo have on MedHab's investment sales pitch? Government support valued at twice the investment offering would be rather compelling.

COSA's proposal mentioned MedHab's pursuing EB2 financing. San Angelo Chamber of Commerce Director John Dugan stressed "interesting EB3 funding," which originate mostly from China, but include other foreign nationals. Dugan expects EB2 and EB3 to attract a great deal of interest in our area.

No one said EB2 and EB3 are designations for employers to import skilled foreign workers. Does the money come from saving on wage and benefits via importing cheaper, high skilled foreign labor? How many of the 227 proposed jobs would be occupied by foreign workers, i.e. not area citizens? Immigration Blog reported:

USCIS Director Alejandro Mayorkas announced recently in a blog post several new initiatives to encourage entrepreneurs and high-skilled workers to bolster the U.S. economy and stimulate job growth. Director Mayorkas noted that the U.S. has a long history of welcoming innovative entrepreneurs and skilled workers into our country, and in turn they would fuel the nation's economy by creating jobs, and promoting new technologies and ideas.

MedHab's Johnny Ross is from San Angelo, but Tim Sanghera was born Jagdeepinder Singh Sanghera. Sanghera may be the key to any capital financing available to EB2 workers.

San Angelo's Mayor Alvin New invested in MedHab and sits on its Board of Directors. City leaders said they began their discussions with MedHab in 2008. New was elected Mayor in December 2009. Turnout was light as citizens focused on Christmas.

MedHab's Johnny Ross wrote a letter to the editor supporting New. The Standard Times ran it in October 2009. It stated:

Upon meeting New at a business presentation, he immediately volunteered his services to assist MedHab’s efforts working with the city of San Angelo, the Chamber of Commerce, the economic development council and the state.

MedHab could be capitalized in a major way by San Angelo taxpayers. Investors and international financiers, could be the benefactor.

San Angelo: Cornpone, Uptown for some, Money for Goodtimes

MedHab's Pay Levels

2012-01-07T00:05:00.005-06:00

MedHab plans to crack the sports rehabilitation, corporate loss prevention, diabetic/neuropathy and back prevention/rehab markets with patented high tech medical devices. In six years MedHab's employment could reach 227 people with a payroll of $6.5 million.

That equates to $28,600 in annual pay per worker, just over $14 per hour. In 2003 the average wage in Tom Green County was $13.13. Should MedHab's number include benefits (roughly 25%), hourly pay would drop to $10.50 an hour. These projected pay levels are for 2018.

It remains to be seen how much "living" can be had at MedHab's wages, assuming stars align for the company to pierce all their targeted markets.

Does MedHab have any projections for Board compensation between 2012 and 2018? Will Board members get cash compensation, stock units and stock options? How much will the City's $3.6 million in economic incentives boost MedHab's net worth? That didn't make the City Council presentation.

Mayor New's Unshared MedHab Affidavit

2012-01-06T22:50:00.004-06:00

Leaders charged with governance need to declare the size and nature of financial conflicts of interest. City staff presented the following slide at the San Angelo City Council meeting on January 3rd.

Staff indicated Mayor Alvin New, a board member and MedHab equity holder, had filed an affidavit. This information was not shared with the public, thus I assume other City Council members had not seen it. If he holds "$15,000 of more of the fair market value of the business entity," New has a substantial interest.

Not mentioned in the meeting is a conflict of interest questionnaire, required of local officials with board seats and substantial holdings.

Councilman Kendall Hirschfeld said:

"A lot of good things will come from this, I hope." Hirschfeld spoke in favor of the project "regardless of who the investors are."

Councilman Paul Alexander offered:

"MedHab will cause other employers to come here... Fertile ground that's inviting."

Councilman Fredd Adams spoke sagely:

"Fortune favors the bold... Industry follows industry."

Councilman Johnny Silvas quipped:

"Bring 'em in."

Councilwoman Charlotte Farmer noted:

"This is the first project brought in by COSADC, which should make half cent sales tax voters very happy."

How does $3.6 million in City funded incentives compare to the half cent sales tax that funds economic development efforts? While the city decimates health care benefits and services, it's growing an economic development Taj Majal.

As most City Council members are businessmen, the gate swung open for them to have a financial stake in new city projects. This council institutionalized conflicts of interest, which appears in violation of the City Charter and their qualifications for office. The world seems odder by the day, even in Surprisingly Conflicted San Angelo.

MedHab's Ross: Mayor New's Political Supporter

2012-01-06T00:30:00.002-06:00

Medhab's Johnny Ross, founder of the fledgling medical device company, supported candidate New in the Fall 2009 Mayor race. His letter to the Standard Times stated:

As the co-founder of a new medical device company, I am in search of a city to establish an operational plant. Upon meeting New at a business presentation, he immediately volunteered his services to assist MedHab’s efforts working with the city of San Angelo, the Chamber of Commerce, the economic development council and the state.

Although a final decision regarding the plant will not be made until next year, New’s ongoing effort has placed San Angelo in the top two locations.

Leadership and experience are the two most invaluable attributes a candidate can possess. Alvin New possesses these attributes and will make a fine mayor.

At what point did Alvin New become an equity investor in MedHab? When was he appointed to the board of directors and what is his compensation arrangement? How might New personally benefit from San Angelo's $3.6 million in incentives for MedHab? Ethical leadership and forthright experience would have New out front on these questions, not AWOD, in Australia With Out Disclosure.

Note that Johnny Ross' 2010 decision on a plant location leaked into 2012. Does that imply anything relative to MedHab's employment commitments?

Curious Citizen Brigade Rides

2012-01-04T23:21:00.002-06:00

One day after San Angelo City Council amended economic development restrictions and approved $3.6 million in incentives for MedHab, a research posse rode out. Here's what they found:

1. Mayor Alvin New is listed as a board member on MedHab's website, not an advisory member as represented.

2. The deal may need more than a COSADC policy change, as it appears to violate the City Charter which states.

SECTION 9. QUALIFICATIONS:
A. In addition to the requirements prescribed by law, the following shall be the qualifications for the Members of the City Council:

1. Candidates for the City Council shall have been City residents for the 12 months next preceding the election and Candidates for Single Member District representatives shall have been residents of their respective districts for 6 months next preceding the election.

2. No Member shall be an employee of the city.

3. All candidates must possess the qualifications of a voter.

4. No person shall be eligible for the City Council who, at the time of taking office, is delinquent in payment of a valid tax levy, assessment paving lien or contractual debt or is indebted to the City in any sum of money on judgment.

5. No Member shall have an interest in the profits or emoluments of any contract, job, work or service for the City.

6. No Member shall have an interest in the sale to the City of any supplies, equipment or material.

B. Any Member who shall cease to possess any of the qualifications herein required shall forfeit his office.

C. Any contract in which a Member is or becomes interested may be declared void by the Council.

D. Each person elected to City office, as a condition to being administered the oath of office, shall have filed with the City Clerk a signed, sworn statement indicating that he or she is in compliance with the above stated qualifications and requirements.

E. Each person subject to this provision shall file with the City Clerk a signed, sworn, updated revision of this statement, annually, while in office.

Amended 4/13/76, 5/6/89 and 11/16/07)

Mayor New has a clear interest, currently undisclosed as to the nature of his MedHab investment and compensation arrangements for serving as a board member.

3. The board list filed with the Texas Comptrollers' Office shows ten members. Oddly, one is a business, Deaton Engineering, while another looks like a stuck typewriter key, NNNN. NNNN's address is the same as Lisa Eady Investments, 502 S. KOENIGHEIM, SUITE 1A. Only the MedHab listing had the zip code as 76904, when it's really 76903.

4. MedHab is already getting aid from the Ft. Worth Tech Accelerator and has a development agreement with Rice University in addition to their connections with ASU. In addition to their office in Ft Worth, their home is in Mansfield, TX and they have another office in Tyler. Pretty spread out for such a young start up.

The U.S. Patent and Trademark Office website showed only one patent assigned to them. It was approved in June. There were no pending patents or patents assigned to MedHab or their listed inventors. I hope they have the licenses they will need to other patents and intellectual property needed to manufacture these devices. Hard to make even a simple pair of shoes anymore without infringing on someones patent, trade secret, or other IP.

ConchoInfo, GoSanAngelo's Old Yeller and State of the Division found these tidbits. Join the ride and post what you find out here.

Mayor New on Board of Firm Approved for $3.6 million Incentive

2012-01-03T23:47:00.005-06:00

San Angelo City Council approved an incentive package for MedHab, a medical rehab device maker. The $3.6 million in incentives requires MedHab to add 227 jobs in the next six years. Council voted 5-1 for the package. Mayor Alvin New was not in attendance, as he is out of town.

Alvin New sits on MedHab's Board of Directors. MedHab's website stated:

Board of Directors - Alvin New

Former Principal, Town & Country Food Stores

Alvin was born in Brownfield, Texas in 1963. He graduated from Pecos High School in 1981 and Angelo State University with BBA in management in 1984. He married Patricia Neal in 1983; they have two daughters, Victoria, 15, and Elizabeth, 13.
Alvin worked as a sales clerk at a Town and Country Food Store on Pulliam Street while attending ASU. He stayed with the company after graduation and worked his way up to a vice president when officers of the company purchased the business from Steve Stephens in 1999. Alvin was one of six equal partners in the leveraged buyout. The six partners named Alvin executive vice president over operations and marketing, and later president and CEO.
Alvin and the management team improved Town and Country’s size and profits, leading to a surprise offer from Susser Holdings to buy the company at a price shareholders could not refuse. The company sold in 2007, and Alvin helped in the transition before leaving the company in 2008.
Alvin was elected the Mayor of San Angelo in December 2009. He currently serves in that capacity.

Many companies compensate board members with stock and options. Mayor New's holdings and director compensation arrangement should be disclosed to the public.

The City of San Angelo approved a substantial investment in MedHab through job incentive money, paying for renovations, helping with capital equipment costs, paying a portion of a building lease, 100% tax abatement, dirt cheap space and refunding a portion of code compliance fees.

City Council voted to drop the following requirement for MedHab to get the award:

The guidelines say no member of the City Council or COSADC board of directors "shall be eligible for assistance from the COSADC during his/her tenure or for six months thereafter."

Does this mean public service can now be private service? Council effectively voted such.

Mayor New is out of town, however I assume he knew these items would be on the agenda. Council cleared the way for New to financially benefit.

Disclosing financial conflicts of interest and recusal from voting are basics for anyone serving on a nonprofit board, much less elected officials. The Mayor effectively recused with his absence. The public awaits full disclosure.

ERRP: Sad State of Council Minutes

2012-01-03T21:21:00.001-06:00

Surprising San Angelo's leaders lowered the transparency bar again. One might expect an important motion specifying the exact use of $343,000 in Early Retiree Reinsurance Program (ERRP) funding to make the minutes. It didn't.

A vote was taken on the motion on the floor. AYE: New, Alexander, Silvas, Adams, Hirschfeld, and Farmer. NAY: Council member Morrison. Motion carried 5-1.

It was hard watching the replay of the council meeting, with staffers gathered around the computer, trying to get the right words on the screen. All that work and the epistle wasn't shared with the public?

Council acted like ERRP funds were iffy, until the check arrived from Uncle Sam in December. City Council rushed to spend the money in a jiffy, to avoid "federal strings." In their excitement Council broke the only ERRP string, that federal funds not displace, i.e. lower, current local commitments.

Good thing it's all on tape, beginning in November 2010. It'll make quite the movie.

Limbaugh's Havre Not: ASU

2012-01-01T22:09:00.001-06:00

Angelo State University's first Vice President for Strategic Planning happened to be its last. ASU finally spoke to Vice President James Limbaugh's leaving in a press release.

Administrative changes will be implemented at Angelo State University in the wake of the departure of Dr. James M. Limbaugh, vice president for strategy, planning and policy, to become chancellor at Montana State-Northern in Havre, Mont., effective Jan. 1. As the vacant vice presidential position will not be re-filled, those offices and individuals who reported to that vice presidential position will be reassigned to other vice presidents.

ASU blew up their strategic plan as a result of state budget cuts. Oddly while facing the loss of millions of dollars, the university added a fifth Vice President and announced a study evaluating a move to Division I athletics. Many people thought "What the hey?"

Santa did not bring a replacement for Limbaugh or Division I status. The holidays found ASU announcing a drop to four Vice Presidents (December 20) and shooting to be competitive in Division II (December 21).

Limbaugh had strategic planning and institutional effectiveness, most of which moved under new Vice President Brian May. How will ASU do in the New Year accreditation wise? The foundation needed to already be laid.

Organizational jumbling, after traumatic budget cuts, can't be helpful. The possibility of probation exists. Is the probability growing? There's only so much a good editor can do. Accreditation, havre or havre not...

COSA's ERRP: Dance Around Strings

2011-12-31T16:17:00.005-06:00

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 identified one ERRP 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.

ASU Cats without NIne Lives

2011-12-30T14:50:00.001-06:00

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

2011-12-24T14:29:00.002-06:00

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.

Spirit of Christmas: All Aboard

2011-12-23T23:43:00.003-06:00

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!

Federal Strings vs. San Angelo City Promises

2011-12-21T22:58:00.001-06:00

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

2011-12-21T08:25:00.002-06:00

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

2011-12-20T23:32:00.003-06:00

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

2011-12-19T21:00:00.005-06:00

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

2011-12-15T23:40:00.000-06:00

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?

2011-12-14T21:23:00.002-06:00

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

2011-12-13T22:55:00.001-06:00

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

2011-12-13T21:31:00.002-06:00

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

2011-12-10T17:23:00.003-06:00

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

2011-12-06T20:54:00.001-06:00

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.

City Employees Get Health Insurance Turkey

2011-11-24T22:30:00.005-06:00

City Leaders and Council failed to inform the public of drastically lower health insurance costs for the year ended 9-30-11. The City expected to pay out $7 million but costs came in at only $5.88 million. As nearly 200 people dropped health insurance in January 2011, premium revenue fell short, coming in at $6.83 million. The difference resulted in a $950,000 windfall to the City.

For the third year in a row the city will provide roughly $4.7 million in contributions to the health plan.

Employee/retiree contributions nearly doubled over the five year period, only getting a slight break in 2012.

The City took $950,000 in savings without a public mention. To the city's credit it added roughly $600,000 of that amount to the health insurance fund balance. Add in nearly $500,000 in ERRP funding and $300,000 in 2012 expected Aetna EPO savings and the total comes to $1.4 million. Of $1.6 million in two year savings, COSA shared $200,000 with employees/retirees, a mere 12.5%. The City is keeping 87.5%.

For two years the City acted like it had empty pockets on health insurance. That wasn't true in 2010, despite Council's gross mischaracterization. In November 2011 Mayor New made a motion to take health insurance savings and buy a fire truck. While New later withdrew his motion, shifting benefit money to purchase capital items needs to be watched.

Update 12-7-11: The Standard Times ran a piece by a dependent of a city worker. Two days later, the paper published another letter.

Cost of Changing Health Insurance

2011-11-19T14:51:00.001-06:00

San Angelo City Council approved a new plan design with much higher out-of-network costs for employees and retirees. Changes will produce $483,000 in expected savings for 2012. The City chose to share $197,000 with employees and hold the rest for a rainy day fund.

During the discussion Mayor New clearly expressed his desire to move a portion of the savings to the City's capital budget.

After much discussion, New withdrew his motion.

Councilman Hirschfeld, happy to push 76% of increases to employees/retirees last year, motioned for the lion's share of this year's savings to remain with the City for future health insurance increases.

Councilwoman Farmer dressed down the Employee Committee for not informing council that employees face costs for new histories when they move to SACMC physicians. As a "businesswoman" she should be embarrassed for raining on volunteer employees/retirees, when paid city management and HR staff steered key aspects of the RFP and council set budget parameters. HR built the RFP in conjunction with City hired consultants. Farmer let Harold, Lisa and Holmes Murphy skate, going after the little people.

City Manager Harold Dominguez controls what information goes on the agenda and what information is presented. It's so orchestrated, that Harold has a separate room with employees yet to present, with an on deck circle.

HR's Lisa Marley couldn't manage to file an ERRP claim, while other Texas cities got millions in reimbursement. Her delays led to the City's current ERRP reimbursement uncertainty.

Summing up, benefits did not stay the same. The cost of changing doctors is significant from both an emotional and economic standpoint. While they didn't go as far as taking health insurance savings and buying a new fire truck, Council once again looked uninformed and insensitive to the plight of employees and retirees.

Maybe they'll strike the right combination next year. They'll have roughly $1 million to put to bear.

City of San Angelo Cuts Health Insurance Benefits

2011-11-19T00:42:00.003-06:00

City leaders gave the impression that the only change needed to save $483,000 was an exclusive provider arrangement with San Angelo Community Medical Center. It turns out benefit cuts were needed to achieve the savings.

Out-of-network changes include:

Physician Office Visit for Primary Care/Specialist was 70% after deductible. For 2012 it will be 50% after deductible, a 20% benefit reduction.

True Emergency ER visit copays were equal in 2011. In or out of network provided 80% coverage after a $300 copay, waived if the y were admitted to the hospital. Neutral true emergency care is history. Any out-of-network ER visit gets 50% coverage, a decline of 30%.

Skilled nursing, home health and hospice out-of-network benefits fell from 70% coverage to 50%. Outpatient mental health did likewise.

The City of San Angelo cut out-of-network benefits to get savings. Either city workers/retirees will change doctors or they will bear a heavier burden through increased out-of-pocket costs.

Feel free to compare 2012 benefits to 2011 via the documents below:

COSA Approved Plan Design 2012

COSA Health Benefits 2011

Bad News Day for ASU

2011-11-16T22:33:00.000-06:00

The Standard Times played a critical role in egging Angelo State University with two stories. The paper picked up an Associated Press piece on Dr. James Limbaugh's leaving as ASU's Vice President of Strategy, Planning, & Policy.

Dr. Limbaugh, by far the longest tenured ASU VP with almost four years' experience , will become Chancellor at Montana State-Northern. Limbaugh's new job might wash away the bad taste from having ASU's strategic plan blow up from state budget cuts.

The paper's second story, highlighting Navajo Code Talker Samuel Tso, drove nearly a thousand people to ASU's CJ Davidson Center. Rick Smith's outstanding piece had the public expecting to hear World War II stories. Instead Tso eviscerated the government that lied, cheated and stole from his people, one that repeatedly failed to honor its promises. That same government funds the Center for Security Studies at ASU, and provides grant money to Multicultural Studies.

Intentional or unintentional, eggs splattered on ASU, courtesy of the Standard Times.

City Council Stiffs Employees Yet Again on Health Insurance

2011-11-15T23:13:00.001-06:00

San Angelo City workers and retirees must be tired of the beating from this City Council on health insurance. Last year this mendacious crew forced the lion's share of $960,000 in 2011 cost increases on employees, early retirees and their dependents. Workers bore 76% of the total $1.2 million in projected increases.

At the time key City leaders knew of a projected $550,000 in federal Early Retiree Reimbursement Program (ERRP) funds, but chose to keep it secret. When challenged by Russell Smith and myself, elected leaders sat on their ERRP, passing draconian premium increases for dependent coverage.

As predicted, scores of city workers/retirees dropped health insurance. Nearly 200 fell from the rolls of the insured, saving the city $190,000 in 2011. Council never mentioned these savings in a public meeting.

The city has $1.15 million to put to bear on health insurance. Here's the breakdown:

1) $190,000 savings from city workers and retirees dropping health insurance for 2011. (Unless they already spent it on something else)

2) $480,000 in ERRP money, of which $330,000 from 2010 early retiree claims sits in a city bank account. (This can only be spent on health insurance, reducing premiums or increasing benefits)

3) Expected savings of $483,000 from Aetna plan with SACMC EPO for 2012.

Council met today to talk about using these funds. City leaders reneged on their prior intent to use ERRP funds in 2012, instead sticking them in a rainy day fund with earliest use in 2013.

Fast forward to 2012 where Council plans to pocket most of any $673,000 in elective savings. The City plans to return a mere $197,000 (29%) to employees/retirees, keeping 71% for the city's "plan fund balance, which at nearly $1 million is about $400,000 short of its 75-day goal."

Is the "plan fund balance" for health insurance or capital budget items? I would bet the latter, given Harold Dominguez's propensity to hide things with obtuse language. Here's how fair this council has been to employees/retirees:

Increased costs:
76% employees/retirees
24% city

Cost savings:
29% employees/retirees
71% city

The city dishes out three of four lashes to workers/retirees, then takes three of their four potential prizes. Those who make the rules win the game.

Angelo State's "Bad Tooth" Nursing Program

2011-11-06T22:22:00.006-06:00

The headline ran "ASU Nursing degree may be extracted." The story went on to detail poor student performance on the Registered Nurse exam for ASU's associate degree RN students. Passing rates plummeted in 2010 and 2011, according to university officials. This occurred after ASU received a grant expanding its nursing programs. One could conclude the university lowered its admissions criteria to increase enrollment.

To address the poor test performance ASU added an entrance exam and raised admissions standards"

"We elevated the admission criteria, the minimum ACT score and GPA (grade-point average)," said Susan Wilkinson, head of the Department of Nursing and Rehabilitation Sciences.

ASU's AD RN program has 192 students. When the AD program is pulled, students will need to get a Bachelors of Science in Nursing.

Nursing is one of ASU's "programs of distinction." Expansion came with negative side effects. What lessons carry over to the wider ASU "grow at all costs" mentality?

Quality problems are the last thing Angelo State needs as it heads into SACS accreditation, when the university is already on dicey grounds. It'd likely be better if the Texas Tech board axed the program than an accrediting body. Appearances matter, even when quality doesn't.

Update 12-14-11: The Texas Tech Board of Regents will take up the extraction issue.

Absent City Workers Heard Anyway

2011-11-06T11:54:00.003-06:00

San Angelo City Manager Harold Dominguez devised a net-less tight rope for city workers on his Employee insurance Review Committee. They had but one thin line to walk, given City Council's secret charge to spend no new money on health insurance.

The committee received this charge in early 2011, the public not until a June City Council meeting. "No new money" was reinforced in summer budget meetings, despite concerns by members of the public.

Early retirees, the ongoing after thought of this council, were added in September to evaluate bids. This group suffered greatly from Council's December 2010 decision to pass draconian premium increases to employee/retiree dependents. Nearly 200 people fell from the rolls of the insured, a savings of nearly $200,000 for 2011.

Harold thought he'd boxed the committee in enough to where he could delegate any employee/retiree ill will to them, while claiming credit for budget wins. Not so. Steve Wilson showed employees wouldn't take the latest "crap sandwich" from this council lying down. In return for over 700 employees and retirees having to find new primary care doctors and specialists, the committee strongly requested council give the $483,000 savings (above "no new money") back to employees and retirees:

1. Reduce premiums for employees and retirees low plan back to zero
2. Equalize dependent coverage between employees and retirees
3. Reduce dependent premiums

Addressing Mayor New's concern for a rainy day fund, Wilson suggested ERRP funds could serve that role. Harold's secret slush fund of federal money is now in the public eye, The City received $330,000 in ERRP funds and has another $150,000 on the way.

One might expect large numbers of employees at such a meeting. Making over 700 workers switch doctors seems as important as the city employee health clinic, which had standing room only in 2010. Why the no shows?

Employees were informed one full work day before that council would address the issue. Anyone wishing to attend was required to take vacation time. I'd guess Harold issued an edict for managers not to approve such requests, but maybe he's not that evil.

Kudos to Harold's Employee Insurance Review Committee for not swallowing all the castor oil. It was subtle, but I appreciate spitting some of it back in their face.

A big razzy to elected leaders for the ongoing torture inflicted on city workers and retirees. When HR staff pass out Medicaid and CHIP applications to workers, something's terribly wrong.

Especially when that Council has over $1 million in health insurance savings to use, over $500,000 of that in cash.

Update 11-7-11: City kicks retired 73 year old firefighter

COSA Drops Shannon, Which Will Drop ?

2011-11-01T22:33:00.003-05:00

The City of San Angelo will drop Shannon Medical Center from its health insurance plan beginning January 1, 2012. Of over 1,100 insured city employees, 70% currently use Shannon doctors and hospital services. That means 770 must change doctors, primary care physicians and specialists, within 45 days or pay drastically higher out-of-pocket costs for out-of-network care.

The new plan will save the city $483,000 from the current plan. How else did coverage change in the new plan? The City didn't say or the Standard Times didn't report, but consider HR Manager's position on increases earlier this year:

Marley said renewal under the current plan design would require a 35% increase, 24% relative to the existing plan and 11% due to health reform requirements.

What other coverage changes were needed to take a $2.5 million increase and turn it into a nearly $500,000 savings? That $3 million swing likely required more than a single provider change.

The other issue is what the city is doing with banked health insurance savings, over $1 million so far:

$190,000 from 192 people dropping health insurance in 2011.
$500,000 in expected Early Retiree Reimbursement Program funds
Some portion of $483,000 in savings from Aetna-Community move

The City didn't say who would file future ERRP claims, as the job is currently contracted to Blue Cross/Blue Shield. This City Council proved inept in mobilizing ERRP money to help retirees keep affordable health insurance, especially in light of last year's position by city leaders:

One looming question after Tuesday’s extensive city health insurance plan debate — the topic took up much of Tuesday’s City Council meeting — was whether reimbursements from the Early Retiree Reinsurance Program were included in the plan’s $1 million cost increase.

The answer is no, and will likely remain that way until the end of 2011, when the city is discussing its health insurance plan for 2012.

The end of 2011 came and went. The 2012 health insurance discussion went as I predicted, fast and furious with barely an effected employee in sight. Who has vacation time to use to get stone-eared leaders to listen? What happened to management by wandering around? It became management by stomping on.

As for Shannon, the system will have 770 fewer patients to help cover the burden of the uninsured. The City's move hurts the Mayor's chances of getting Shannon to contribute payments in lieu of taxes (PILOT funds). It may eventually hurt the area's employment picture as Shannon absorbs a $2.5 million hit from the city, along with another $2 million from Medicaid. Shannon's UPL and DSH funds from the state and feds will be cut. It's unknown how much.

Will tax payments become a future requirement to bid on COSA health insurance? One thing's for sure, as Shannon is pressed, life will be harder for the area's uninsureds. The dumping is merely passed on.

COSA's Hollow Health Insurance Promises

2011-10-30T11:55:00.001-05:00

Memo dated October 27, 2011 to Mayor Alvin New and San Angelo City Council members:

"At the December 7, 2010 Council meeting where the premium adjustments were approved for calendar year 2011, there was discussion regarding a concerted effort to involve employees and retirees in the process for 2012 rates." - City Human Resources/Risk Management Director Lisa Marley

Four days before Council meets on November 1, the public and employees received notice health insurance for 2012 was on the agenda. The public had to go to the City's web site and pull up the agenda, which lists health insurance as item #11, after an Executive/Closed Session. Employees received an e-mail, informing them health insurance would be the first item on the agenda.

Having offered public comment numerous times on health insurance, I would not have shown up at 9:15 am,the time given to employees. In my mind the City released documents within hours of one another, guiding people to appear at what could be viewed as vastly different times. Will one group be shortchanged? Will it be the citizens of San Angelo, supposedly at the top of COSA's organizational chart or employees, required to take vacation to appear and comment?

Here's the heading of the e-mail. Note the date and time:

Friday, October 28, 2011 2:14 PM
Subject: Fwd: For City-Wide Distribution: New Insurance

Authorized for distribution by the City Manager's Office.

TO: All Employees
(Supervisors: Please print for those employees without email.)

How many employees got the e-mail before leaving work Friday, especially those without e-mail? How long does it take to process a vacation request? Are there limits on how many employees can be on vacation at one time?

Council promised to do better on this contentious issue. More than once leaders said they would involve retirees in the process, an apparent lick and a promise.

“A lick and a promise” means “a superficial effort made without care or enthusiasm.” To perform a task with “a lick and a promise” is to do the absolute minimum required, and often far less than that.

Retirees were involved only at the last moment, much like the City's distributing the agenda, agenda packet and employee e-mail.

Major changes are afoot, given the city's plans to spend no new money on health insurance. One provider will be chosen, Shannon or Community. Benefits may fall. Retirees and employees may have to find new primary care doctors and specialists in short order. While the city surveyed employees on possible changes, it did not include early retirees, once again casting doubt on Council's "concerted effort."

There will be no time to conduct research on options, mobilize city retirees or the general public. November 1 is decision day, given benefit enrollment is planned the week before Thanksgiving, November 14. Council won't meet again until November 15. The COSA health insurance train is gaining steam, ready to achieve ramming speed. How many employees and retirees will be tossed about this Tuesday?

It's different than casting out 192 covered employees, retirees and dependents, Council's 2010 achievement. Early retirees have to wonder when the City's promise of "lower premiums or better benefit" will come true. San Angelo delivers retiree licks better than promises.

Those wishing to read the e-mail can do so below:

COSA HI Emp Letter

City Health Insurance: Month Late & Dollar Short?

2011-10-29T12:51:00.004-05:00

San Angelo Human Resources and Risk Management Director Lisa Marley will present health insurance bids to City Council this Tuesday. The City's health insurance Request for Proposal HR-02-11, originally specified a council presentation on October 4. Besides being a month late, the city plans to spend no new money on health insurance in 2012. Agenda item #11 states:

a. Discussion of proposals submitted for Request for Proposal HR-02-11 for benefits regarding health, dental, vision, basic life/AD&D, voluntary life/AD&D, post-65 retiree health and flexible spending accounts.

b. Consideration of selecting Benefit Providers related to Request for Proposal HR-02-11 and authorizing staff to negotiate a contract, and authorizing the City Manager to execute said contract and any related documents

As the City budgeted no new money for health insurance, bidders had to be creative. How much did they slash coverage levels? How much will the City shift in annual medical costs to employees (out-of-pocket)?

Given the city's obtuseness on the Early Retiree Reinsurance Program (ERRP), I don't expect leaders to come clean on such matters. With Retired Police Chief Russell Smith busy writing a book, someone will have to delve into the details to get the complete picture. I helped Russell with research in the past, but am severely time constrained for the next month.

Here's my wish: Lisa Marley would answer questions Russell or I would normally offer. Russell might ask for the third year in a row, "What's the real agenda here? C'mon, fess up." One might expect the city to offer a clear motivation to San Angelo citizens, especially given COSA's organizational chart.

Is Mayor New encouraging more retirees to return to the workforce to garner affordable health insurance for dependents? Is he using health insurance to get Shannon to provide payments in lieu of taxes, known as PILOT money?

Who will be impacted by decreased coverage levels, by how much? How many employees will need to change primary care doctors and specialists, once the city picks a side, Shannon or Community, in our divided healthcare town? How fast will they need to find that new doctor given open enrollment is slated for the week before Thanksgiving?

Will early retirees ever see Marley's 2010 promise of "lower premiums or better benefits"? Since the city qualified for ERRP, early retirees paid through the nose for dependent coverage in 2011 and face benefit cuts in 2012.

Despite the city's "concerted effort to involve employees and retirees in the process for 2012," retirees weren't involved until bids were ready to be reviewed, i.e. far too late in the game to influence budget policy or benefit design. The four retirees include Stephen Brown, David Hermes, Curtis Milbourne and Teresa Special. Maybe they can advocate for the use of ERRP funds to ease last year's severe pain.

Final thought: Why does the city dangle a new time off benefit around health insurance changes? Last year, it was a Veterans' Day holiday, a seemingly incongruous offering by Councilwoman Charlotte Farmer given the City's strapped finances. This year it's time off in return for United Way participation at a “care share”, “double care share”, or greater level. Why is the city prepared to spend over $57,000 on increased time off but nothing for health insurance?

I find the reference to double "care share" symbolic, as it could apply to 2012 out-of-pocket medical care costs for employees. Should anyone wish to delve into the agenda packet, it is below. As usual, it's light on the details.

City Council November 1, 2011 Agenda Packet

View more documents from City of San Angelo Texas

City Health Insurance: Late Addendums

2011-10-19T22:47:00.001-05:00

The City of San Angelo planned to present its 2012 health insurance recommendation on October 4. The topic didn't make any October Council agenda.

With no information I cruised the City's web site for requests for medical coverage proposals. I found the original, plus a number of addendums. One started with:

The City is very interested in a single provider option. If you are quoting medical, please make sure to include this option if available.

Of course the City is looking for the best deal, but there are other considerations. Mayor Alvin New wants Shannon Medical Center to kick in Payments in Lieu of Taxes (PILOT). Might the city use health insurance to arm twist Shannon?

Last year the city passed on small costs to employees but draconian increases to employee and retiree dependents. The jury is out on changes for 2012, so says the City:

Q. Is the City still planning to pay all of the employee's premium except for $16.00, or will there be another scenario?

A. The City contribution for next fiscal year is unknown. This will be determined based on the bid results.

The City told health insurance companies not to submit bids with higher premium costs. That means bids should hold the line on costs, causing coverage levels to deteriorate significantly.

On retiree health insurance (Over 65) the city takes one stand:

Post 65 cost is $301.90 PEPM. That amount is broken down below:

$194.90 Hartford
$107.00 Rx (BCBS)
$301.90 Total

The $301.90 is the amount the spouse is billed if they are Hartford participants – the City makes no contribution to the spouse amount.

$16.50 is what the post 65 retiree pays, so the City’s contribution is $285.40.

Later the city stated:

There is no Post 65 RX plan

Clear? Only the bidders can say for sure.

Employees and retirees know the city wouldn't institute new taxes for 2011, effectively throwing 192 people off city sponsored health coverage. For 2012 Council budgeted new money, which should cause employees/retirees to face greater out of pocket costs due to deteriorating coverage. It will be a different kind of hit, but a hit just the same.

Update 10-21-11: Walmart, where many COSA employees have a second job, announced cuts in health benefits for workers.

Walk Today in Memory of Amy Pettit

2011-10-16T12:59:00.005-05:00

Today's CROP Walk begins at 2:00 pm at the Pavilion next to Kids' Kingdom Playground. The walk raises money to alleviate hunger, locally and beyond. For years Amy Pettit walked, but she did so with special purpose for CROP.

As a young mother in the Depression, Amy and her infant daughter Lois knew hunger. Times were brutal. Daily, Amy's husband Al looked in vain for work. The generosity of a neighbor, a bootlegger, kept the family barely fed.

Work eventually came, but Amy and Al never forgot their trials. They looked for people to help and organizations that did likewise. CROP fit the bill.

CROP walking became a family affair with daughter Lois and granddaughter Kristin. The three would frequently raise over $1,000 each in a friendly competition.

Lois will walk today, in memory of Amy, who passed on August 4, 2011 at the age of 96. Lois raised over $6,000, with $5,000 of that coming from heaven. Amy, the longtime walker and alleviator of hunger, will walk in spirit with her daughter. There's no place Amy would rather be.

Health Insurance Absent from COSA Council Agenda

2011-10-13T21:59:00.001-05:00

The San Angelo City Council agenda is out. Employee and retiree health insurance is absent from the October 18 agenda. City Manager Harold Dominguez and Councilman Kendall Hirschfeld highlighted promising bids in early September. The "good news" remains untold. I remain curious how far benefits will be cut to achieve the city's no new money criteria.

Tom Green County Indigent Health Expenditures

2011-10-13T21:34:00.000-05:00

The Tom Green County Indigent Health Program finished the 2010-2011 fiscal year. While no year end report has been filed and shared at a County Commissioners' meeting, a mid-year report was available. Of nearly $2.1 million the county is required to set aside, it spent $128,000 over seven months. Add in the $1 million used to leverage Upper Payment Limit funds and the total grows to $1.13 million.

If the first seven month experience held, the County spent $220,000. That would leave $780,000 to transfer into the general fund. I'll update the numbers when the County releases actual year end figures. (Click in the image above to make it larger).

TGC Indigent Health: History Rewrite

2011-10-11T19:08:00.003-05:00

Texas County Progress has a teaser on Tom Green County's Indigent Care Program, specifically collaborative efforts that helped the county spend money more effectively. It reported:

In the spring of 2002, Tom Green County staff helped organize a Health Access Subcommittee. The subcommittee met approximately once every six weeks to discuss local health care problems and find resolutions for those problems within the committee. The subcommittee consisted of the local chief executive officers and chief financial officers of the two local hospitals, the administrator to the federally qualified health center, the social services director, pharmacists, physicians, the Health Foundation chief executive officer, county commissioners, the county judge, and the director of indigent health care. Together, the subcommittee was able to remove barriers in communications between organizations and better coordinate benefits for indigent health care clients, in addition to understanding the educational and financial crises of the impoverished of our community.

Unfortunately, time may have clouded the author's memory of events. San Angelo's Health Access Coalition was formed in 1999. It had three subgroups, Access & Financing, Health Promotion and Data/Information. The Access/Financing subgroup offered to help the county, which consistently overspent its budget the prior three years.

Community leaders, especially Shannon Medical Center's Vice President for Legacy Insurance, provided specific recommendations for stretching dollars further. This included covering nurse practitioners (in addition to physician assistants), paying for outpatient surgery vs. one night surgical hospital stays, and paying FQHC services vs. expensive ER visits. Leaders also recommended searching for other payor sources for patients who might be retired military or have access to other benefits.

The vision and goal for Tom Green County Indigent Health Care was to provide all eligible clients more primary care and specialist services, as well as additional optional health care services, while lowering Tom Green County expenditures.

My recollection of the vision and goal was to spend money more effectively so more people could be covered with the same resources. The HAC hoped income eligibility would increase from "the poorest of the dirt poor." Instead the program has become Tom Green County's cash cow, replenishing reserves on an annual basis. As the facilitator and minute taker for all HAC subcommittees, I want to be on record with a more accurate version of history.

City Misses Health Insurance Milestone

2011-10-04T21:52:00.002-05:00

The City of San Angelo planned to present health insurance bids to elected leaders in today's council meeting:

They missed their milestone. Thus, the public remains unaware of the magic used to keep health insurance rates steady or lower when other employers face 25% premium increases.

How much will benefits fall to hold the premium line? It remains to be seen.

Cozy Oil Spew Commission Keeps Alaska Open

2011-10-02T17:43:00.002-05:00

Two members of President Obama's Oil Spill Commission had ties to BP and ConocoPhillips. William Reilly had a vested interest in Alaskan offshore drilling via his $2 million in ConocoPhillips stock and board of directors position, which resumed when his commission submitted its report. Fran Ulmer's University of Alaska received $30 million in donations from BP and ConocoPhillips.

BP and ConocoPhillips stand to profit from increased Alaska oil production. Conoco benefits if their leases strike black gold, but both firms profit if Shell's efforts produce, given Shell plans to use the Trans Alaska Pipeline, an 800-mile (1,287-kilometer) pipeline ending at Valdez. Line owners include BP, Exxon and ConocoPhillips.

While Alaska's Chukchi Sea is covered in ice from early December to mid May, Valdez remains an open water port. William Reilly, Bush I's EPA Chief, oversaw the Exxon Valdez disaster in Prince William Sound. What role might he play in an Arctic oil spew? For one, Reilly reset the drilling deck.

Point Hope doubts the oil industry's ability to operate without spills. The tiny village depends on the sea. While their doubts are well founded, another narrative shows few David's in today's world of financial and energy Goliaths. Goliath William Reilly represents both kinds.

Roots of Pay for Performance in Healthcare

2011-10-01T17:47:00.004-05:00

Pay for performance is sold as the panacea, the balm for America's health care ills. One root of the movement came in an "Open Letter in Health Affairs 2003":

We call on the administration and congressional leaders of both parties to act in a bipartisan spirit on health care quality and to join the campaign to rally our underperforming health care system by empowering Medicare to take the further necessary and decisive steps to make pay-for-performance a national strategy for better quality. We should settle for nothing less.

The first two signers were:

Donald M. Berwick
Institute for Healthcare Improvement, Boston, MA

Nancy-Ann DeParle (MedPAc)
J.P. Morgan Partners LLC, Washington, DC

Dr. Berwick is the Interim Chief of the Centers for Medicare/Medicaid, while Ms. DeParle, a former CMS chief and private equity underwriter (PEU), served as President Obama's health czar, before her promotion to White House Deputy Chief of Staff.

Dr. Berwick called incentive pay a toxic daisy chain while at the Institute for Health Improvement. Pay for performance kills intrinsic motivation, the internal desire to perform good work. People focus on what it takes to get the prize. That behavior is frequently unethical. This leads us to another signee of the P4P letter:

Gail R. Wilensky (MedPAC)
Project HOPE, Bethesda,

Wilensky's 2003 ManorCare bio showed her on the board of Advanced Tissue Sciences, Inc.; Gentiva Health Services, Inc.; Quest Diagnostics Incorporated; Syncor International Corporation; and UnitedHealth Group.

UnitedHealth Group employed the most pure form of incentive compensation, executive stock options. Wilensky sat on the Compliance and Government Affairs Committee of UnitedHealth's board. SEC filings described the committee's responsibilities.

The Compliance and Government Affairs Committee is responsible for the development of guidelines and procedures for ethical and legal compliance; ensuring adequate guidance, reporting and investigation processes; monitoring compliance with Company guidelines and ethics policies; and monitoring and evaluating corporate governance.

Corporate governance set and implemented executive compensation, thus Wilensky's committee bore responsibility for ensuring stock option pay remain ethical and legal. Wilensky, on the board since 1993, missed nearly a decade of stock option cheating by CEO William McGuire, MD. Bloomberg reported:

McGuire is the most visible CEO to leave his job in the continuing probe into options-granting practices at U.S. companies.

At least 144 companies are conducting internal investigations or are subject to government probes on the matter. Executives at two companies, Brocade Communications Systems Inc. and Comverse Technology Inc., have been charged by federal authorities with securities fraud. At least 30 executives and directors have left their jobs, and hundreds of lawsuits have been filed.

A repricing of McGuire's options from 1994 through 2002 to the high closing price of each year, assuming he hasn't yet exercised any of the options, would deny him a profit of $155 million, according to a Bloomberg analysis. From 1994 through 2005, McGuire realized $333 million in option gains.

Wilensky may not have known about pay for performance's toxic effects in 2003, but she clearly knew in 2006.

Other letter signers were the beneficiaries of clean executive stock option pay:

John W. Rowe
Aetna, Hartford, CT

Leonard D. Schaeffer
WellPoint Health Networks, Thousand Oaks, CA

Corporate influence permeates the letter:

William L. Roper
University of North Carolina, Chapel Hill, NC

Roper was on the board of Davita, Medco Health Solutions, Luminex Corporation and Quintiles Transnational Corp at the time. Nancy-Ann DeParle, signer #2, served alongside Roper on the Davita board. She also had board slots for Guidant, Accredo Health, Cerner, Triad Hospitals, Medco, Boston Scientific and Specialty Labs.

Toxic corporate pay practices will not solve the ills of America's healthcare system. While it's interesting to know who set the stage for today's non-solutions and how they may profit, it's not the least bit comforting.

Update 11-14-11: Nancy Ann DeParle's board track record reveals a number of investigative settlements, with more potential fraud investigations on the way. The quest for quality will be undermined by extrinsic motivation schemes

ASU Admissions Breakdown

2011-09-23T23:33:00.001-05:00

Angelo State University cracked the 7,000 student mark for the first time. The increase did not come from a traditional source, incoming freshmen.

ASU is down 155 freshmen from 2007, the year Dr. Rallo arrived as President. That's a 7% decrease. As documented earlier, tuition soared 60% during the same period.

These two pictures tell part of the story.

ASU's Rallo Cites Turbulent Future

2011-09-18T13:06:00.001-05:00

The Standard Times reported:

Angelo State University President Joseph Rallo, calling the past year "tumultuous," said at the annual State of the University address that the university must brace for a future that promises to be "as turbulent."

This is a bad year for turbulence, given ASU's precarious accreditation status. Turnover dramatically increased work loads in many departments. Add the loss of valuable employees and the university's accreditation could be in peril. The Texas Legislature ramped up the risk of failure with severe budget cuts.

A major factor for the university's challenging year was the Texas Legislature's ongoing decision to cut funding to state universities.

"Less than eight years ago, we received over 70 percent of our funding from the state," Rallo told the faculty, staff and students gathered in the C.J. Davidson Conference Center. "That amount is now less than 40 percent and likely to decline even more in coming years."

How much did the state contribute when Dr. Rallo came in 2007? What has he done to fight the steady drip of state funding cuts? Oddly, Rallo noted in Fall 2009:

So, too, is a marketing and branding budget which has grown from $30,000 to nearly $400,000 to refine our institutional message and create a family of publications with a consistent theme.

Fast forward to today:

Employee pay, except in the case of promotions, was frozen and 30 positions were eliminated through retirements or employees leaving jobs that were then not filled.

Jobs reduced through retirement or employees leaving? Tell that to the six secretaries who heard their jobs were eliminated and needed to apply for three new slots.

Dr. Rallo did add jobs at the Vice President level. The Fall 2010 edition of ASU Magazine stated:

When Rallo became president in 2007, ASU had three vice presidents. He replaced the vice president for advancement and university relations with the strategy, planning and policy position. Until July and the arrival of Blose and Valerio, the academic and student affairs offices had reported to a single vice president.

Dr. Rallo added his fourth VP in 2010. Instead of retrenching back to three, Rallo named a fifth in the middle of 2011's budget meltdown. The second administrative clang came when ASU formed a group to explore Division I athletic status while shedding jobs. A move to Division I requires a significant resource commitment.

Surely Dr. Rallo fought for his university during the tumultuous Legislative session. Sorry. ASU employees or alumni didn't hear any public battle cry. Search the Standard Times archive for Rallo mobilizing employees and alums to fight planned cuts. Better yet, search ASU's news releases around that time.

Area health care leaders held a public press conference to mobilize support, while Rallo remained quiet to the end.

People willingly die for leaders who fight on their behalf. They spit on the self interested and seemingly disaffected.

Data points to a shift in feeling. ASU made the Council of Higher Education's national list of “Great Colleges to Work For” in 2009.

ASU was one of 150 higher education institutions to be selected by the Chronicle after surveying faculty and administrators on job satisfaction in 26 categories.

It fell from the list in 2010 and 2011. That's what leadership tumult and turbulence will do.

COSA Health Insurance Premiums to Remain Flat

2011-09-18T09:41:00.001-05:00

City Manager Harold Dominguez and Councilman Kendall Hirschfeld noted the receipt of "interesting bids" for health insurance for 2012. They didn't mention the request for proposal specified four plans, the current plan plus three cheaper alternatives. The less expensive plans allowed for a single provider and less benefits, i.e. higher out of pocket costs for employees.

For 2011 the City held the line on benefits, but passed premium increases to employees and retirees. It hammered dependents with draconian premium increases. Nearly 200 people, 45 employees/retirees and 147 dependents, fell from the city's insured rolls. That act carries a cost to the community, specifically Shannon Medical Center and San Angelo Community Medical Center. How much did their costs increase caring for the City's formerly insured?

Shannon's historical costs and charges from their Medicare Cost reports can be seen below:

One factor in Shannon's huge charge increases rise is its uninsured burden. Shannon takes care of 4 out of 5 uninsured patients. Price increases mean little falls through to the bottom line. Shannon does get disproportionate share and upper payment limit program payments to help care for the uninsured, but their payor mix contributes to pricing distortions.

San Angelo Community Medical Center's charges and costs rose in a similar fashion to Shannon's. Community takes care of 1 out of 5 of the community's uninsureds. Community's pricing was likely driven by their corporate owners, Triad Hospitals and now Community Health Systems (CHS).

These hospitals will have to cut the City a deal for pricing to remain the same. How will Shannon price in 160 new uninsureds from the City? How will Community charge for 40 new uninsureds and any bad debts from higher deductibles and co-pays from city workers? It remains to be seen.

One thing's for sure, while the city holds the line on "expenses", others will have to step in and pay. It looks to be city employees, retirees and the few dependents left. Should that happen, you know who to thank.

Obama Pulls a Bush on Uninsured

2011-09-15T23:31:00.003-05:00

President Obama talked and acted like his predecessor this week. First, he echoed George W. who said small businesses were America's job generator. Under W.'s tenure millions of jobs went across the Pacific to China.

Second, Obama's Census Bureau reformulated their estimate of America's uninsureds, those without health care coverage. Bush's Census Bureau did the same in 2004 and 2005.

Here are the adjustments:

Bush - 1,000,000 (2004 & 2005)
Obama - 1,700,000 (2009)

If these reformulations had not occurred, the U.S. would have 52.6 million without health insurance. Employers continue doing less, despite PPACA (something I predicted last year).

The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.

This decline should knock another 1.36 million people from employer sponsored health insurance rolls. It only shed 500,000.

Obama's reformulation, accounting for foster children having access to Medicaid, somehow added 1 million people under employer coverage for 2009.

Here's the tale of two estimates regarding 2009:

Last year's estimate for 2009 - 169.7 million had employer coverage
This year's estimate for 2009 - 170.7 million had employer coverage

Fast forward to 2010, where the Obama administration projects 169.2 million with employer provided health insurance. This is nearly 20 million more people than CBO projected in scoring PPACA. What gives with the wide swings for 2010?

CBO showed employer coverage increasing under health reform, rising from 150 million to 162 million. This clearly is a pipe dream. Many expect the leaky, employer job-benefit dam to break in 2014, tossing millions more Americans into turbulent waters without coverage.

Over the Bush/Obama years employers covered 10% fewer Americans. That's a 30.6 million person shift. What employers dump, the individual or a tapped-out Uncle Sam must pick up. That leaves many bearing lots of pain.

Update 10-5-11: Senator Max Baucus claims 1 million young Americans have insurance due to PPACA. That doesn't come close to making up for the 1.4 million losing employer coverage.

Concho Valley Health System Statistics

2011-09-08T21:45:00.000-05:00

As America's health care system grows costlier by the minute, the Concho Valley's tenuous health landscape looks dry and parched. Employers, the ones that still offer health insurance as a benefit, shift costs to their employees. Both hospitals compete like heck for insured patients, not so much for those without coverage. The burden for caring for the 30% of citizens without health insurance is significant.

The document below offers a smattering of information, bits of West Texas'health story.

CV Health System Stats Scr

COSA's "Know Nothing" ERRP Update

2011-09-05T16:12:00.002-05:00

The September 6 meeting of City Council will entertain the Early Retiree Reinsurance Program (ERRP) for the first time as an agenda item. Oddly, the agenda calls the presentation an "update."

Pertinent portions of the City's ERRP "update" are below:

History: In June 2010, the City of San Angelo learned of the opportunity to apply for the ERRP and in July 2010, submitted an application for the program. Acceptance was received on August 31, 2010. Following the 2010 open enrollment period, the Human Resources Department worked to fulfill the requirements of processing a claim for ERRP funds. The sorting and reporting of “eligible” claims is daunting and HR is simply not staffed to handle the magnitude of work surrounding this program. In April 2011, an agreement was discussed with Blue Cross/Blue Shield (BC/BS) to contract their services for this program. In May 2011 the agreement was signed. Since May 2011, no claims have been submitted to ERRP for funding due to a wide variety of reporting issues surrounded with BC/BS.

Financial Impact: Unknown at this time.

Flash back to November 2010, when this issue was first discussed with City Council. The City hadn't planned to talk about ERRP and wouldn't have, but for Retired Police Chief Russell Smith's query: The Standard Times wrote:

One looming question after Tuesday’s extensive city health insurance plan debate — the topic took up much of Tuesday’s City Council meeting — was whether reimbursements from the Early Retiree Reinsurance Program were included in the plan’s $1 million cost increase.

The answer is no, and will likely remain that way until the end of 2011, when the city is discussing its health insurance plan for 2012.

City Human Resources Manager Veronica Sanchez said Wednesday that the city doesn’t know exactly what claims would qualify or how much it will receive in reimbursements under the program,

Little changed in a year, except the City of San Angelo can't do what other Texas cities and BC/BS have been able to do, file an ERRP claim. Note the ERRP "update" comes a year after the city was approved. It's the first formal staff presentation to Council. The topic got attention in November and December 2010 solely due to citizen comment.

As one commenter, I continued researching, reporting and writing opinion pieces on this topic. My ERRP update differs from the city's in form and scope. It's sad when a citizen provides the public more information than elected/paid leaders.

The program that shall "not be named" has transformed into the program that shall "not be understood." Retirees well understand they'll bear the full brunt of any increases in 2012. This comes after last year's premium beating.

Council's unstated perspective could well be "retirees, get a job."

Update 9-7-11: The Standard Times reported "City Human Resources and Risk Management Director Lisa Marley said the city has several claims “sitting there waiting to be processed” Sitting where? At BC/BS or HHS? The article continued, "She said the city is expecting to receive roughly $500,000 during both years of the program, an amount she said could make a sizable “dent” in health insurance premiums." That dent should've been made in January 2011.

ERRP Update: One Citizen's Perspective

2011-09-04T14:36:00.010-05:00

In early July 2010 the City applied for the Early Retiree Reinsurance Program (ERRP) program, which pays a large portion of early retiree health care claims. San Angelo was approved on August 31, 2010. Paid city consultants projected two-year ERRP reimbursement of $650,000. A Standard Times article in mid-September 2010 quoted Human Resources Manager Lisa Marley on ERRP:

“It will either be a better (health insurance) benefit or their premiums can be lowered.”

In November 2010 Council heard about the program in a public meeting for the first time. Retired Police Chief Russell Smith raised ERRP during public comment on proposed health insurance increases. Despite its clear relevance to the issue at hand, no City leader, paid or elected, mentioned the program prior to Russell Smith’s utterance. Various city leaders responded with:

"I don't have those numbers"
"There is not clarity"
"These things are hard to predict"
"When one time funds go away, you have problems"

The November minutes stated:

General discussion was held on the Early Retirement Reissuance Program (ERRP) federal grant program which allows cities to receive reimbursements on certain claims, as well as creating alternatives to make benefits affordable for both employees and retirees. Staff is currently working on the new program, therefore, information is not yet available to report. Mr. Dominguez added this is a one-time federal program which basically diverts the discussion to a later date.

ERRP arose in the December 7, 2010 meeting. City leaders called ERRP money “iffy” and “like a lottery.” I commented that ERRP money was like taxes, you know it’s coming, but not how much. I suggested they use some portion of expected ERRP reimbursement to offset the hardship of premium increases. Under the lottery analogy, a submitted claim is a winning ticket. No claim, no reimbursement. I couldn’t conceive the City would never file a claim.

City Council chose not to apply any expected ERRP funding to relieve draconian premium increases for employee/retiree dependents. Here’s how the December 2010 minutes masked 35-60% premium increases for dependent coverage in 2011:

... and the differential distributed to the medium and high plans, and dependent coverage across the board.

In the midst of the health insurance chaos, Human Resources mailed out the required ERRP notice to plan participants in early December.

As a result of this Council’s December actions, 45 employees/retirees and 147 dependents dropped coverage for 2011. Nearly 200 people lost city sponsored health insurance.

One might expect this to ramp up the urgency for ERRP reimbursement.

Eleven Texas cities were able to file claims and receive reimbursement. Amarillo, Longview, Midland, Greenville, Garland, Irving and Mesquite got ERRP money, while San Angelo did not.

HR stated why:

Blue Cross/Blue Shield finally authorized access in March to allow HR the information necessary to process any ERRP claims. The City has attempted to process the ERRP reimbursements but we simply do not have the staff to do it. At this point it still remains unclear whether or not there are any claims that would qualify for reimbursement. I met with the City Manager and he has agreed to pay Blue Cross/Blue Shield to process City ERRP claims. Their cost for this service is $16,000 and we were initially trying to avoid that cost by doing it in house.

The City contracted claims submission to Blue Cross/Blue Shield by July 1. Even with an executed contract, no claims had been filed as of late August.

Councilman Kendall Hirschfeld said in the June 28 City Council meeting that expectations were given in January or February that there be no increases in health insurance. I checked the minutes of City Council meetings in January and February and found only one reference to health insurance: It was under public comment:

Retiree Curtis Barsley commented on the recent increase to retiree health insurance.

I venture Mr. Barsley’s comment was not positive. Given there is no evidence of Hirschfeld’s charge in public documents, in what meeting did members of council create this expectation for management?

Going back to the June council meeting, where health insurance was expressly discussed, staff initially proposed a $250,000 budget increase. Council reduced that to zero. This sets the stage for a repeat of last year’s fiasco.

There are two strategies going forward, pass increased premiums to employees and retirees or dramatically cut benefit levels. Only one of four options in the City’s RFP is keeping current benefits. The other three are a reduction.

Advising City Manager Harold Dominguez is an Insurance Review Committee. When questioned by council if any retirees sat on the committee, staff said no, but “we can do that.” Has a retiree representative been added to the Insurance Review Committee since June 28?

One citizen spoke on behalf of retirees in the budget hearing, held August 30. Her comments fell to floor like a tripped retiree. Not one city official responded to her concerns.

CFO Michael Dane closed the August budget hearing with a story. He said a year ago a council person asked him to make sure city employees received raises this year. He suggested this private, one-person directive drove this year’s budget priorities.

A year after receiving ERRP approval, the City Council will receive a report in its September 6 meeting. The ERRP report comes at the end of a second budget-approval cycle, where program funds could make a difference. ERRP’s a goose egg for the second time.

Recall the secret charge given by Council to reduce health insurance expenditures year-over-year when premiums for other employers have risen 25%? Any reduction in health insurance expenses by an employer violates ERRP's maintenance of contribution requirement. Hirschfeld's directive could be an ERRP excluder.

Recall the siren song of “better benefits” and “lower premiums”? The “premiums lowered” promise didn’t happen, given many experienced draconian increases in 2011. The “better benefits” lure is impossible given the City’s bid specifications for health insurance for 2012.

Summary:

The City’s inability to file an ERRP claim, with an executed BC/BS contract and while other Texas cities successfully filed claims, raises questions as to intent. From a retiree standpoint, leaving ERRP money on the table is made worse by the City’s budgeting no new money for health insurance for the coming year. For retirees, it’s another failed promise from City leaders, only this one is on their shoulders, not a prior council.

I'll be surprised if this conclusion is part of the City's ERRP update. Feel free to compare and contrast Harold and Lisa's to mine.

San Angelo City Council Outlasts Budget Commentors

2011-08-30T20:49:00.004-05:00

This City Council report is from a concerned citizen who shares my interest in area citizens retaining health insurance coverage. I've interspersed my comments with their assessment of today's budget meeting:

This was the most discouraging City Council meeting I have attended. The budget discussion did not begin until 3 pm so by that time only the hard-hard-hard core of us was left!

City Council wedged a 90 minute Executive Session between the morning business and the afternoon budget hearing.

On the part of the council members, their total discussion was focused on proposed salary increases for current employees. Staff has proposed percentage increases differentiating between "meets expectations" and "exceeds expectations". But Dwain M counter with a proposal to take all the funds and distribute then on a per capita basis as a "bonus" not a salary increase. This was of mixed appeal: some viewed it as a plus because it would give greater per centages to lower paid and would not commit that amount to next years budget should it be a bad year. But Harold countered that no salary increase would diminish stated objectives of improving salaries relative to other cities.

And how do those stated objectives relate to the City Manager's bonus pay?
City workers will need increased pay for health care, either increased insurance costs or increased patient responsibility due to poorer benefits. The best option in the health insurance RFP is maintaining the current plan. The rest are benefit cuts.

In the long run, they (largely led by Alexander and Hirschfeld) put together a mixed proposal: higher % increases possible for "meets expectations" for lower paid folks and with lower rate for higher paid --- then for "exceeds" group a possible bonus payment.

I contacted Rep. Paul Alexander with my recent posts on no budget increases for health insurance and retiree coverage, given the city's inability to file an Early Retiree Reimbursement Program (ERRP) claim. He never replied. After meeting face to face with most council members on health care in May, I e-mailed data on other Texas cities getting ERRP money. Not one e-mailed me back. Does anyone detect a pattern?

Not one word was spoken about retirees and/or health insurance until I got up to do so briefly -- heads nodded but absolutely nobody picked up and commented on retirees or health insurance. Immediately thereafter they approved the "mixed" proposal.

Silent on retirees? Harold and Human Resources Manager told Councilman Morrison in June that retiree representatives could be added to the Insurance Advisory Committee. How many times do City leaders need to ignore retirees before the media or public notice?

The final (budget) hearing will be at 9 am on Sept 6. The only semi-good news is that Charlotte Farmer asked for an update on the ERRP application/funds. Have you shared any of your data with her on drop outs etc?

Retired Police Chief Russell Smith communicated with Councilwoman Farmer, among other elected officials, on ERRP.

Nearly a year after the City's ERRP application was approved, an elected leader asked about the program "that shall not be named."

If leaders can't talk about this in front of a nearly empty room, my next question is taboo: How do the city's retiree health insurance moves impact Harold's incentive pay?

I find the City's obfuscation around ERRP and retiree health insurance continually brazen, and frankly, quite sad.

Update 9-4-11: The above slide was shown during the August 30 Council meeting. While employee/retiree health care implodes, the economic development kingdom explodes. Recall the City's $1 million tax break for Ethicon's maintaining employment and improving facilities.

City Wants to Dump Services to Nonprofits

2011-08-28T19:56:00.006-05:00

San Angelo's City Council set priorities in their June 28 meeting. Unfortunately, the meeting wasn't aired on Channel 17, thus city employees and retirees missed council's budgeting no increased funds for health insurance . Elected leaders prioritized reducing operating expenses and steering savings to capital projects. Minutes from the meeting state:

City Council suggested the following: taking lower tiered programs, non-public safety involved, e.g. parks and recreation, pulling facilities off line to maintain other facility improvements and recently approved projects; privatization of facilities and programs; reallocating recreation monies, e.g. partnering with school district to utilize their park areas, expending a one-time expenditure for equipment and schools maintain; salary savings for reorganization, and reducing to 4/10 work week. Once the changes and financial savings are determined, such savings may used for street reconstruction.

This isn't new given the decade long decimation of the City Health Department. It's down to an Immunizations/Sexually Transmitted Diseases/ Tuberculosis Clinic and food permitting/inspections. The City shed a Pediatric Clinic, AIDS Clinic, Pharmacy, Pharmaceutical Assistance Program, and Social Services.

Next up for disposal to the private sector is Animal Services. Anyone in discussion with the City, regarding taking over the Animal Shelter, should take their time evaluating any offers/commitments. Harold needs to close deals before October 1, when the new budget year begins.

As for what they're taking over, here's a hint from the July 21 minutes of the City's Animal Service Board:

Susan – I was going to ask – on the statistics report – can we add a percentage? I think that would be helpful to know. That way we could have a goal to work toward

Julie – I honestly don’t know if our program can do that.

A manager doesn't keep reports showing volume and percentage changes? That seems a basic managerial skill. The City used to have it, when Harold was Assistant City Manager (click on the image to make it larger):

Any nonprofit group expecting long term funding from City Council should review the City's treatment of early retiree health coverage and Hickory Aquifer water fees. This council reneged on promises made by their predecessors. That could be the future for San Angelo's animal service community.

The City needs financial savings to lower taxes and build roads.

That comes on someone's back, given old plans aren't enough, once again. Texas Government Insider offered in January 2009:

Under the new plan, the city will issue about $13 million in bonds in October 2009, which will move the projects forward without increasing taxes, Dominguez said. In the past, the city issued a series of three six-year bond issues that expire every two years. Now the city will pay off those bonds over the next five years without renewing them. That revenue then will be directed into two city funds, a new capital fund to pay annually for road improvements and a second fund to pay for the bond issue for renovating the city hall and build the fire stations. The city's architect advised that doing the city hall renovations all at once rather than in phases could save as much as $1.74 million.

The City discussed getting more out of nonprofits in the June meeting, specifically through increased franchise fees. How many ways can they tap nonprofits before the new budget year?

It remains to be seen.

COSA Health Insurance - Draft Budget Priorities

2011-08-27T12:26:00.003-05:00

City of San Angelo leaders sought feedback from City Council on the 2012 budget in June. As a result, I asked city staff:

What are the city's budget assumptions for health insurance for 2012?

The reply by HR Manager Lisa Marley on June 13 indicated:

Budgets for 2012 are still being prepared. Nothing will be firm on health insurance until the RFP is completed.

The City later posted a draft budget on their website. FUND 310 includes COSA's self-insured health benefit. The budget includes revenue and expenses. The revenue picture shows:

Self Insurance - Revenue

FY 10 - $5,955,062
FY 11 - $7,226,044 (budget)
FY 12 - $7,917,129 (budget)

The draft budget shows insurance premiums rising nearly $700,000 or 10% overall in 2012. City Council directed no increase in health insurance costs in their June 28 meeting. Thus, the city's portion is targeted at $7.2 million.

Other aspects of the draft budget are of interest. One is the treatment of retirees and employees with dependents. Draft budget numbers indicate these groups will take a beating for the second year in a row. (Click n the image below to make it larger)

Savings from 45 city workers dropping health insurance for 2011 can be seen in the Premiums/Employees number. Marley spoke to this in her June e-mail:

The annual savings in premiums for those 45 people is $189,603.96, which simply remains in the self-insurance fund and is used to either pay for claims or for new employees who enroll during the year.

Draconian premium increases of 34 to 58% for retirees and dependents sent 147 people off the city rolls. It's not clear how many of the 147 losing city coverage remain uninsured. If they can't afford subsidized city coverage, they likely can't pay for individual health plans in the open market.

What happened to Early Retiree Reimbursement Funds, expected to make benefits better or lower premiums? The feds approved the City's ERRP application one year ago. City staff struggled to complete claims forms, eventually farming out the project to BC/BS. Yet, nary a claim has been filed, meaning the City received none of the expected $300,000 reimbursement.

I find it hard to believe retirees and dependents can pony up the $940,000 projected in the draft budget. As the city expects no health insurance increases and sought no ERRP aid, retirees and dependents would shoulder higher insurance costs or get dramatically lower benefits.

Insurance premiums generally exceed self-insured expenses by 6-7%. Projected expenses in the draft budget are:

Self Insurance - Operating Expenses

FY 10 - $5,644,153
FY 11 - $6,755,672 (budget)
FY 12 - $7,399,096 (budget)

There are four major components of health insurance operating expenses.

Two of the four, Special Services and Administrative Services, are projected to rise a combined 97% in two years. Expected Claims Liability is projected to rise by 9% next year.

This budget is only a draft, but it does indicate management's expectations and reflects their priorities. If anyone feels otherwise, they'd best attend one of the next two City Council meetings, which will also serve as public budget hearings.

The picture shows more uninsureds in the retiree-dependent arena or significantly poorer coverage. It remains to be seen where employees fall on that continuum.

Update 8-29-11: While Harold was Assistant City Manager, the 2004 budget stated: "To administer the employee and retiree health benefit program in a professional manner and to contract for these services at a reasonable economic level for both the City and its employees and retirees." The pendulum swung fully toward the City.

Zero New COSA Health Insurance Funds for 2012

2011-08-26T15:35:00.005-05:00

A critical San Angelo City Council meeting did not air on public television due to technical problems. An audio feed failed, making the June 28 meeting a silent, six hour movie on Channel 17. Oddly, enough audio channels worked for the DVD to play on a computer, however citizens needed to request a copy.

While minutes summarized the discussion, they left out critical guidance for the 2011-2012 budget.

Discussion was held on a proposed stratified pay plan and related percentages, proposed percentage salary rates for employees making less than $50k, proposed innovations for better services and efficiencies, health insurance premium contribution rate and percentage, employee health committee, the percentage allocation for salaries from the general fund, decreasing the property tax rate, and increasing franchise fee rates.

While Council talked health insurance, there was no discussion of the "premium contribution rate and percentage," only a "desirable" budget increase. The following summary did not make the minutes.

At the 4:36 minute mark with public seats virtually empty, Council heard staff's health insurance proposal. CFO Michael Dane described the work done to date, much of it by Human Resources and an Insurance Review Committee appointed by City Manager Harold Dominguez. Councilman Morrison asked if any retirees were on the committee. The answer was no, but staff indicated they could be added. Dane suggested the city increase the health insurance budget by $250,000 for 2012.

Councilman Kendall Hirschfeld quickly indicated his expectation that there be no increase for health insurance for the coming year. He referred to meetings in January and February where he thought this expectation had been shared with city staff.

Dane and Human Resource/Risk Management Director Lisa Marley explained why the city thought it should do something to help employees. Marley said renewal under the current plan design would require a 35% increase, 24% relative to the existing plan and 11% due to health reform requirements. The $250,000 proposal amounted to 5%, which would leave employees and retirees to pick up the other 30% or $1.5 million.

Last year's increase, roughly half that amount, drove nearly 200 from the city's health insurance rolls, 47 city workers and 147 retirees or employee/retiree dependents . Marley stated the city solicited bids with specified changes to the plan. She discussed eliminating the Low, Medium & High designations, i.e. offering one plan with large deductibles like the Low option. Committing to a single provider, Shannon or Community, would result in savings.

Marley cited the need to cut benefits by increasing copays and deductibles. While she used the language of cutting costs, a better description would be cost shift. The city will simply pass more costs to the employee.

Council budgeted for a 4% pay increase for staff, but decided on no increase for health insurance.

How much of employee salary increases will be eaten up by higher health insurance or medical care costs. Retirees won't have an increase to apply. Their voice wasn't at the table, given their lack of representation on Harold's Insurance Review Committee. This appears to be a pattern, given City leaders kept retirees out of the communication loop on a number of health related issues the last few years.

The meeting punctuated many things for city workers and retirees. City Council prioritized capital items, property tax cuts, roads and storm-water drainage over health coverage. It shouldn't be a surprise. This is the same organization that qualified for federal funding to help pay for retiree health insurance. A year later the city is yet to file a claim, while other Texas cities were able to do so. This raises serious doubt about Lisa Marley's August 2010 health claim:

"It will either be a better benefit or their premiums can be lowered."

Sorry, city workers and retirees. It's clearly neither. This was the meeting to be seen and heard. It set the agenda in motion. The axe will fall in early October when the city brings its recommendation to Council. I bet the seats are full.

Update 8-26-11: Council direction supersedes the draft budget, but that document has stories to tell. Search "FUND 310" if interested. Also, the City scheduled two public hearings on the budget, which take place during regularly scheduled City Council sessions. Council meetings and public budget hearings will begin at 9:00 a.m., Tuesday, August 30, 2011, and September 6, 2011, at the McNease Convention Center, South Meeting Room, 500 Rio Concho Drive.

Update 9-1-11: COSA accepted an extra $640,000 from Texas Department of State Health Services for a capital projected, renovating WIC facilities. DSHS is funding $1.6 million in renovation costs. Despite this gift, City Council squeezed city employees and retirees for more capital.

ERRP: Pardon Bernie

2011-08-26T10:04:00.001-05:00

Senator Bernie Sanders (I-VT) identified ten companies not paying their share. It turns out six of the ten have their hand in Uncle Sam's wallet, specifically the Early Retiree Reimbursement Program (ERRP). As of June 10:

GE was paid $38.5 million
Boeing - $34 million
Bank of America - $4.4 million
ConocoPhillips - $5.5 million
Citigroup - $4 million
Valero Energy - $1 million

These are checks, that come with few strings attached.

Employers to Jettison Health Insurance Benefit Come 2014

2011-08-24T17:36:00.003-05:00

Health reform set the stage for employers to slowly shed that pesky health insurance benefit. The pace is projected to pick up in 2014, when health exchanges come to life. The AP reported:

Nearly one of every 10 midsized or big employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014, according to a new survey from a large benefits consultant.

Towers Watson also found in a survey completed last month that an additional 20 percent of the companies are unsure about what they will do.

This raises questions regarding CBO projections for health reform (PPACA). As depressing as they are, employer estimates may be overly optimistic. An earlier McKinsey study revealed more employers ready to ditch health coverage for workers.

It's hard to trust those leading the health reform charge, the wolf in sheep's clothing and the conflicted PEU designer. There's lots of pain between now and 2014, when many workers get a long foreseeable kick in the teeth.

Quake Under Nuclear Plant

2011-08-23T20:09:00.002-05:00

The epicenter of today's 5.9 earthquake was Mineral, Virginia. It's the home of the North Anna Nuclear Project owned by Dominion Resources.

Who knew a fault line sat under a Virginia nuclear power plant? Even environmentalists, opposing expansion at the site never cited earthquake risks.

Bloomberg reported power failures at the plant, requiring emergency generators to kick in. The article addressed seismic concerns, given the lack of earthquake design:

A study by North Anna of the plant’s fire and flood protection structures had identified vulnerable areas that were “not seismically designed.”

“The licensee will evaluate the issues above in order to determine if additional mitigation strategies are required,” the letter stated.

When North Anna was built, some of these systems were not required to be designed to seismic standards, a Dominion spokesman said.

Power to the plant needs to be restored. That's the short term solution. Who knows about the long term?

Update 8-29-11: Virginia's power needs shrunk precipitously after Hurricane Irene left hundreds of thousands without power. Only one disaster behind, the feds boosted inspections of the North Anna Nuclear Project.

ASU DI vs. TL 82

2011-08-16T19:43:00.006-05:00

Angelo State University decided to explore a move to Division I athletics in April, smack in the midst of draconian budget cuts by the 82nd Texas Legislature. ASU supporters defended the hiring of consultants, citing the bill will be footed by the Athletic Foundation.

Jack Cowan of the Standard Times shared a projected budget increase for a DI move:

Funding the athletic program probably would triple to $12 million a year.

That's an increase of $8 million per year, $16 million for DI over a two year period. ASU President Rallo wrote in May regarding budget cuts from TL 82.

We now know that the final reduction to ASU is $7,088,248, a decrease of 10.1 percent for the biennium. Although our state representatives were successful in replacing one-time funding for our nursing program, there still are no Texas Grants for incoming students and our overall loss in Special Items remains at 25 percent.

ASU cut academic muscle, increased fees, put more classes online, even doubled class sizes in many cases.

Despite the budget pain, the University hired expensive consultants to help educators put courses online. They did so after eliminating the Center for Innovation in Teaching and Research, an internal resource in this regard.

President Rallo is excited about a $300,000 work of art that "won't look like aliens dropped it from space." Rallo believes his magic statue will attract students. Will the statue entice intra-solar system students?

A friend reacted to this idea:

Rallo would need to create several new positions to recruit from space. In fact, he will probably use student tuition to fund a shuttle expedition to recruit from space. There is so much evidence and research that supports the notion that statues attract and retain students. Yep, you can find this information in "Everyone Thinks We Are Insane Academic Journal."

Vision drives innovation.

Maybe Uncle Sam will fund ASU's 10,000 head student drive.

Round up the space cowboys!

(Click on the above images to make them larger)

Update 8-17-11: It seems CITR pulled an Honors Program and got a last minute reprieve! It's a day to day thing in ASU's administration madhouse. Shaking the black 8 Ball for CITR reveals ...."You;ll live to see another day."

Angelo State's Two Trains to Meet in a Tunnel?

2011-08-14T13:48:00.009-05:00

Standing in a dark tunnel, a light appears before me. It's followed by a bleating horn, which grows louder by the second. I turn 180 degrees to flee the advancing train, only to find another bearing down.

Angelo State University chugs toward 10,000 students, maybe Division I sports status. It's the growth train, with shiny new cars, some over-packed with students while others are incomplete in construction. Conductor Rallo yells at every stop, "All aboard, this train is going places." He doesn't say exactly where.

The second train is ASU academics, specifically the university's accreditation. The engine is held together with duct tape and bailing wire. Conductor Rallo radios orders to this train. "I know I cut your fuel and maintenance budgets, but I need you to pull more weight." Engine-man May throws more coal into the hopper, while singing this ditty:

This train is on a race
Online or face to face
Main campus or satellite
Our goal is right, the aim just
Ten thousand heads or bust!

I see ASU achieving ramming speed. Here's one anonymous view from the inside, which I summarized:

Frankly, it's getting harder to put up with ASU's "grow at all costs," body count mentality. There's lip service about quality programs, but quality takes a back seat to increased numbers.

What happens when the two trains meet the end of 2012? Will they safely pass one another or collide in a fireball? It depends on their track. There are signs pointing to a collision, but that's for another post.

Calling Rick Perry

2011-08-12T23:34:00.006-05:00

Two things are clear regarding Texas Governor Rick Perry. First, the 2011 Texas Legislative session seemed orchestrated to give Perry his conservative bonafides for a Presidential run. Second, consultants wrapped him in the Savior's cloth, turning his campaign into a calling.

Many a scallywag has been called to heroic tasks. The call wipes out past transgressions, such as Perry being a Democrat at one point in his political career. Does it wipe out Perry's bearing false witness on his Texas Enterprise Fund claims that Vought Aircraft Industries employed over 29,000 people in Texas, when the company's website said it had 3,315.

Perry is courting establishment Republicans, economic conservatives and business leaders.

Will economic conservatives count Vought's jobs without a 26,000 person margin of error? How many business leaders would love a share of President Perry's largess, given the U.S. budget dwarfs that of Texas?

Will the Red Team hero stick to his job creation lies regarding Vought? Will he beg forgiveness for bearing false witness? Will he make public the changes to the Texas Enterprise Fund deal, renegotiated during The Carlyle Group's selling of Vought to Triumph? Does a calling really wipe out malfeasance in a current core competency?

Nevertheless, Mitt Romney has a challenger. Perry vs. Romney, it'll be quite a race, the Boring Mormon vs. Gov. Rickly Pear. Who can pander to America's billionaires better? Given those billionaires own the media, don't expect a challenge to Perry's job numbers, however absurd they seem on their face.

Update 8-15-11: The Daily Beast ran a story on Perry's savior status within the Dominionism movement. An ex-staffer and Perry consultant served as event coordinator for Perry's revival meeting, The Response.

Update 8-16-11: Rick Perry said he is "pro-business" and called jobs created by Obama's stimulus plans "a joke." Perry's Vought claims fall into the same joke category. Only a lucky SOB could get away with Perry's record.

COSA's "Positive" Health Insurance Projections

2011-08-12T12:59:00.000-05:00

The Standard Times reported the "positive side" of city operations:

We didn't put any increases in with health insurance accounts, either," Dominguez said.

While area employers face 20-25% health insurance increases, the City budgeted zero or no increase. That translates to a cut in benefits or a second year of draconian premium sharing with employees and retirees.

Employees will have their $920,000 pay raise to put toward increased premiums. Retirees won't. Health insurance bids are due to the City August 19.

"Positive" City leaders expect no increase while other employers face runaway health insurance costs. That positive scenario might call into question their sanity and/or mendacity. However the city has two trump cards, savings from 45 employees dropping coverage last year and federal Early Retiree Reinsurance Program funds. They stand to provide a combined $350,000 to $575,000 to weather the coming storm.

Recall what Human Resource Manager Lisa Marley said when the feds approved the City's ERRP application:

“It will either be a better benefit or their premiums can be lowered. Those are the two choices we have to use the funds for,” said the city’s Human Resource Director Lisa Marley.

Better benefit, premiums lowered? Hardly....

Honoring Amy Pettit

2011-08-10T17:23:00.003-05:00

Tuesday morning members of Amy Pettit's extended family gathered at Old Runnels Cemetery, just North of Ballinger, Texas. A breeze broke the heat as it tried to advance. Reverend Ben Hubert read a Bible passage on love, one normally heard at weddings. Amy lived many facets of love. I saw the words as our test. True love would not have her suffer for our need to have her close.

Amy's nephew Buddy spoke of her passing in his sweet honesty, "It was a blessing. It's human to hold people close in our heart, focusing on our loss instead of Amy's going to where she needed to be."

Family and friends were invited to say goodbye to Amy. One by one the brokenhearted stood before Amy Pettit. Knees turned weak and tears fell. It took some time for family to leave Old Runnels. I attribute it to Amy's knack for pulling people together.

Amy was honored in a Memorial Service at San Angelo's First Christian Church later that morning. Ben's gift from God is honoring the storied and complex lives of those who've passed. This became his gift to Amy and her family. His rich remembrance cannot be summarized in a blog post. Should I get a copy of his eulogy, I'll post it.

The church ministered to the family with a meal Amy would've loved. I could see her starting with dessert and savoring a cup of black coffee. After her first sip, I hear her pronounce it "just right." Family members told Amy stories. They caught up on their lives since the last Lee funeral, promising to gather in a deathless time.

Vayden, Kristin and Alan prepared a slideshow honoring Amy. It was unable to seen at First Christian due to technological difficulties. The pictures begin and end with black and white pictures of the children she raised.

Between 1915 and 2011 Amy Pettit raised so many spirits, so many lives. May your life be enriched by elements of her story, her poetry and Amy's endless drive to personally improve the human condition, one soul at a time. She lives in our hearts. Is there any place she'd rather be?

Amy Pettit: Poet Extraordinaire

2011-08-06T14:41:00.000-05:00

Yesterday I wrote of Amy Pettit's passing. Amy made a huge difference in countless people's lives. The piece mentioned her poetry, as well as a number of poems we wrote since her 96th birthday. They can be viewed in the document below.

I'm grateful for her dear friendship. A toast to the lady in the purple and dark blue dress for a life well lived.

Pettit Prest Poetry

Amy Pettit Remembered: Carnegie Library & Old Runnels

2011-08-05T16:37:00.007-05:00

The American Way inflight magazine highlighted the hundred year old Carnegie Library in Ballinger, Texas. The column closed with author Carlton Stowers at the checkout desk, the one used throughout the past century. Stowers didn’t write about Ella Mae Lee, born four years after the library was built. As a little girl, Ella Mae grew to love books and the written word in that very building.

Ella Mae married and had children. She became “Amy” Pettit, then Mammaw Amy to her grandchildren. Along the way, Amy dabbled in writing and poetry. She received the Jefferson Award in 2008 for her lifetime of community service in San Angelo. Amy began her award acceptance speech in Washington, D.C. with “I put one foot in front of the other and never stopped.”

While West Texas baked in this summer’s record heat, Amy focused on her final steps. In July she saw her great granddaughter, Katherine Amy Song McCall. Yesterday, her son Robert and his wife Christen arrived from Indiana with their family. They completed Amy’s circle of love with daughter Lois, son-in-law Vayden, granddaughters Kristin, Amy, Michele, Tess and Brynn, and grandson Grayson.

Mammaw Amy was like a grandmother to me. I visited frequently, often with Kristin’s prized orange-cranberry scones in hand. Mammaw lived by three maxims. The first was “eat dessert first.” My sweet tooth appreciated her courage and role modeling in this regard.

Her second rule was “dessert needs a coffee chaser.” She acquired her love for coffee as a toddler on a Runnels County farm. Many times I watched her savor the black brew, declaring it “just right.” Her third maxim was “my food is yours.” Amy knew deep hunger during the depression and never wanted another to experience what she did. She always offered freely from her plate.

My last few months with Mammaw could be characterized as “Poetry and Pictures.” Lois provided me with poems Amy wrote in the 1950’s, 70’s and 90’s, as well as old pictures. I read Amy's poetry, “Indian Summer,” “Stillness” and “Being Old” to her. Like the “just right” coffee, she found her words satisfying. Pictures jogged long ago memories from the part of her brain still accessible.

Neither Amy nor I were content staying still. A word or photo should go in front of the other and never stop. After her highly photographed 96th birthday, I wrote a poem “Amy Walks in Time.” Amy pronounced the pictures and poem good.

She said she had a poem in her head and wanted help getting it to paper. The next day I sat with pen in hand, ready to write. Mammaw Amy confessed, “I lost it.” That became the title for “Amy Lost Her Poem,” a Seuss like lark. Over time we added “Amy’s Good Memories” and “A Tribute to Al.” She talked for five minutes about her husband Al.

I contributed but one line to the poem, a memory aid. It was “My kiss, his portal to another world.” Dementia robbed her of this precious recollection. While Amy often thought Al still alive, if asked where Al was buried, she'd invariably say "Old Runnels."

Yesterday, I showed up with the Carnegie Library article, only to find my dear friend unable to speak and able to open her eyes ever so slightly. As Amy’s breath labored, I read to her. I started with her poems, before shifting to the ones we’d crafted together. We prayed together, like we’d done many times before. I read “Thank you, Mr. Carnegie” to the little girl in Amy who’d spent enchanted hours in the Ballinger library.

Before midnight, Amy passed away. She died at the age of 96. She’s reunited with Al, five siblings, her beloved Grandma (who taught her to pray), Mini Bee, Momma and Daddy. I imagine St. Peter welcomed her by her deserved title, “First Rate Person, Poet Extraordinaire and Beloved Child.”

COSA Average City Water Bill to Increase 47.5%

2011-08-03T11:16:00.002-05:00

The Standard Times reported on the August 2nd San Angelo City Council meeting:

The average monthly residential water bill, which is now about $31, will increase by $14.75. That is based on an average monthly usage of about 8,000 gallons.

That 47.5% increase sat at the very bottom of the article. How will people afford the increase? A property tax cut should help. Unfortunately, the paper implied much of the cut is sleight of hand:

The San Angelo City Council gave preliminary approval to a property tax rate of 79 cents per $100 valuation — a reduction of 2 cents from the current rate. Under state law.

However, only one cent of the cut will be a "pure" tax rate decrease, as the council is expected to make up for the revenue lost for the remaining 2 or 3 cents by raising two types of fees.

The story didn't specify the two types of fees that would be raised.

There was no mention as to how the city plans to pay for or pass on health insurance cost increases, up 25% for other area employers. Last year the city imposed draconian premium increases for employee and early retiree dependents. Will they do the same again?

Council minutes from June 28 state:

Discussion was held on a proposed stratified pay plan and related percentages, proposed percentage salary rates for employees making less than $50k, proposed innovations for better services and efficiencies, health insurance premium contribution rate and percentage, employee health committee, the percentage allocation for salaries from the general fund, decreasing the property tax rate, and increasing franchise fee rates.

No preliminary health insurance numbers were shared in the minutes or the paper. The topic hasn't arisen since.

City leaders made two claims that seemed specious in their August 2nd council meeting. First, they claimed Quicksand's request for raw water from Twin Buttes led it to require citizens water only on certain days of the week based on street address. Those two items hardly seem connected.

The second odd claim came from Harold Dominguez, who stated the City was better off now than 2004.

The graph showed the city's current lake levels slightly above where they were in 2004, when they had reached a historic low.

Compared to that time, Dominguez said that the city is much better off and cited that as reason not to panic or enact restrictions that are too extreme. "We're really not close to where we were a few ago," he said.

O.C. Fisher is dry and Twin Buttes is going down daily. For a memory jog, here's a GoogleEarth image of Twin Buttes during its dry time.

Harold's right, there is a big difference between 2004 and today. It rained a lot in 2004, the15th wettest on record for San Angelo. NOAA reported:

At San Angelo Regional Airport...The annual average temperature for 2004 was 65.0 degrees. This was 0.5 degrees above the normal annual average temperature of 64.5 degrees. Total precipitation for the year was 30.48 INCHES. This was 9.57 INCHES ABOVE THE NORMAL annual precipitation of 20.91 INCHES.

Harold should remember 2004's rains, given his hiring as Assistant City Manager in 2003.

The Texas Water Development Board shows Twin Buttes with only 5,894 acre feet or 3.31% of conservation capacity. O.C. Fisher shows "no data." Local lakes are sparse and dwindling in record heat and no rain.

"So there was a significant shift in usage and so by not using that water out of Twin Buttes first, we actually have it available now."--Harold Dominguez

In less than a month, Twin Buttes lost over 2,000 acre feet. Harold says the city wasn't pulling from it. Did it evaporate in our record heat?

No Good Work Left: Pay Me

2011-07-18T20:10:00.000-05:00

The way to improve quality in America's health care system is pay for performance. This model assumes most, if not all, providers are extrinsically motivated. The only reason they aren't providing optimal care now is the money incentives are wrong. Let's look at who is motivated by money, by material rewards:.

Aric Rindfleisch of the University of Arizona and James Burroughs of Rutgers University found that while "people who are more materialistic tend to be unhappy with their lives."

And how does provider unhappiness relate to clinical quality?

"Studies have found that burnout and dissatisfaction influence patient compliance, patient satisfaction with their medical care, and quality of care. ... On a personal level, burnout has been shown to relate to suicidal ideation among both physicians and medical students and may contribute to other personal problems such as substance abuse and broken relationships. Burnout is also associated with malpractice suits and turnover which can create substantial cost to hospitals and practice groups."

So the people most likely to be motivated by dangled rewards are the unhappy materialistic. Dissatisfaction leads to quality problems, which rewards are intended to address.

Extrinsic motivators are very powerful in the short run and can improve performance on simple tasks within the control of an individual. Add complexity and interdependence and extrinsic motivators perform worse than no reward scheme. The problem with extrinsic motivators is they kill people's intrinsic desires to learn and improve.

The move toward pay for performance started under President George W. Bush, who ironically thought doctors had the time to negotiate price with patients holding health savings accounts. This seemed a poor use of valuable professionals' time.

President Obama will bring pay for performance to life in a Frankenstein fashion. He wants to reward doctors for their performance on measures, sometimes two years old. That's asking doctors to drive using their rear view mirror. Things get worse inside Medicare's Rube Goldberg P4P scheme for accountable care organizations..

Hospitals are executing pay for performance schemes with providers. They shifted medical director fees and physician equity investments to co-management agreements. Co-management deals frequently have a P4P sharing component. Here's a description:

Co-management companies enable physicians to hold leadership positions that are designed to influence and improve day-to-day clinical management and operations. Participating physicians buy shares in a separate management company (usually an LLC) along with the hospital which allow an equal or controlling interest. The new "Comanagement company" (LLC) is then contracted to provide management oversight and services for the defined parameters of the hospital service line.

Management fees? How long before they seek preferred taxation, like carried interest? The big money men are in health care and the system will be much worse and more expensive for it. In my next post I'll examine the roots of health care P4P. It's straight from the corporate board room.

ASU's Ninja Turtle Secretarial Elimination

2011-07-17T14:24:00.009-05:00

It's the bad dream that won't go away. The last installment had host Nancy Allen and ASU's VP's judging a "mujer y mujer" fight for secretarial positions along the lines of The Secretarial Apprentice. Dream themes frequently change, as did my latest on organizational trauma at Angelo State.

Last night's horror had President Rallo call out, "I ordered a 1 for 2 reverse secretarial job split. Who will give it to me? Where are my implementers!?"

Rallo's four Vice President's ran forward. Rallo turned into a giant rat, while his VP's turned into Teenage Mutant Ninja Turtles, Limbaugh, now Turtle Planman L told his fellow VP's:

In this you must never lapse. Even those who would be our allies would not understand. Our domain is the shadow. Stray from it reluctantly. For when you do, you must strike hard and fade away without a trace.

Four VP Turtles formed a protective circle around Rat Rallo, weapons drawn. Turtle Bearnereid jabbed his budget daggers in the air, saying "I shall incise any leech-like, excess costs draining our university's life blood?"

"Excess costs! You know how much I hate those," screamed Rat Rallo, with spit flying from his lips. Turning red in the face, Rallo ordered, "Round up the secretaries!"

Four VP turtles slipped from shadow to shadow in search of excess office staff. Turtle Rent-a-VP neared a group of students. One student commented to his peers, "Didn't the VP's just get $30,000 raises, roughly the annual pay for a secretary?"

Turtle Rent-a-VP, with his superior hearing, overheard the off-putting remark. He used his twin swords to stab the student in the gut. Rent-a-VP followed up with a lecture, "Young man, your pitiful analysis failed to account for fringe benefits. By the way, we Turtles earned our raises! Don't you know it;s hard to find and keep good administrators?"

The student pointed his bloody finger at Rent-a-VP, stammering "Are you nuts?" Rent-a-VP replied, "No, but when you point your finger at someone, four point back at you."

The student looked down at his hand. "Turtlebrain, you're wrong. Only three point back at me." When the student looked up, Rent-a-VP had disappeared.

In the 104 degree temperature Turtle Blows felt hot inside his suit. Blows tried to focus on the list in his hand, the one identifying two secretaries he needed to retrieve. Blows felt compelled to fulfill his mission. Otherwise, rival VP's would gain favor with Rat Rallo.

Blows tried to catch his breath, but each inhale seemed to come from an automobile exhaust pipe, oppressively hot and toxic. The heat overtook Blows, who crumpled to the ground.

Crone Nancy Allen saw Blows collapse. She knelt to remove Blows' turtle head, taking a big draw from her cigarette as she worked. Red hot ash fell, igniting the turtle mask. Crone Nancy used her purse to beat the flames, as Blows arms and legs flailed.

With the flames out, Crone Nancy worked the turtle head free. A relieved Blows said, "Thank God, I'm free from that damned mask. I feel so weak."

Allen blew a huge puff of smoke into Blows face. Blows grimaced.

"Let's get you out of that hot suit," offered Crone Nancy, as she tugged hard, attempting to remove the suit from Blows' torso, then legs.

Blows pleaded, "Help me."

Crone Nancy replied, "People say I have the vocabulary of a surgeon.."

A glimmer of hope flashed in Blows eyes. His outstretched hand, holding the list, reached toward Nancy.

Crone Nancy, cradling the turtle suit in her arms, asked, "Can I deliver that note for you?"

Blows released his grip on the list.

With the paper secure in her smoke-stained fingers, Crone Nancy curled her lips. She cackled, "You should know better than to believe an evil witch! #%@^!"

Cradling the turtle suit and the note, Crone Nancy ran toward the office of Brian May. as fast as her blackened lungs enabled.

Eventually, four Turtles appeared before Rat Rallo with expendable secretaries. Rat Rallo bellowed, "You have known for a month that six would become three. Turtles, what is your pleasure?"

Three Turtles waited for VP Blows to speak, only an unfamiliar voice emerged from the suit. It said, "We ran a thorough interview process, personality tests, faculty feedback, typing proficiency, you name it we looked at it."

Rat Rallo, "Turtle Blows would have spoken forevermore. I am grateful for your succinctness. What is your name?"

Crone Nancy stepped forward, saying "He is known as Mayangelo." Rat Rallo bowed to Mayangelo, welcoming the new turtle to the Rat's inner sanctum. Rat Rallo gestured toward the secretaries. Rallo instructed, "Please proceed."

Turtle Mayangelo waved the candidates forward. Each secretary knelt before Rat Rallo, offering their allegiance and fealty. The secretaries were a mix of ages, sizes and skin colors. Turtle Beanereid bound each one's hands behind their back and placed a blindfold over their eyes.

Rat Rallo stated, "But for the want of Austin money, I would keep all my loyal servants." A brightly dressed man rushed forward hauling suitcases of cash. He bowed before Rat Rallo and said, "I bring you riches from heralded alumni. They heard of our plight and wished to help."

Rat Rallo looked upon the cash and said, "It is good." The secretaries perked up at what they heard.

Rat Rallo continued, "I can install that $300,000 magic, student-recruiting yard art I've been wanting, not the kind that looks like aliens dropped it from space! Now, cut off three heads!"

Sunlight glinted off slashing swords. Swoosh, thud. Swoosh, thud. Swoosh, thud. Three bloody heads rolled on the grass.

Rallo turned to address the brightly colored man. "You've earned my favor with your hard work. I appoint thee a Vice President. Get this man a Turtle outfit. You shall be known as Rainmaker!"

Rat Rallo added, "Now about your raise. Will you be happy with the amount we saved by offing two heads?" The man was speechless, the crowd horrified.

City of San Angelo Wins ERRP Lottery! (Inaccurate Rumor)

2011-07-16T10:54:00.010-05:00

Eight months ago Mayor Alvin New and City Manager Harold Dominguez called federal funding for early retiree health care "iffy." Councilman Johnny Silvas referred to as "lottery money." Low and behold, the City finally filed a claim for ERRP reimbursement. In America's ERRP lottery, a claim is a winning ticket. A City Council person told my source, COSA's initial prize is $150,000, ..

The ERRP recipient list as of June 17 does not include the City of San Angelo. It does include a number of other Texas cities. It's unclear what period of time the $150,000 covers. ERRP pays for cases from June 1, 2010 to when the money runs out. The City is able to file quarterly claims and could get another ERRP check before City Council deals with health coverage in early October.

What does this bode for the upcoming health insurance budget? Say the city has $300,000 in its ERRP lottery bank. Add the savings of $190,000 from 45 employees and retirees dropping coverage on January 1, 2011. That's $490,000 to go toward any health insurance increases. That's well short of funding a 25% health insurance increase.

When the City qualified for ERRP in August 2010, HR's Lisa Marley stated:

“It will either be a better benefit or their premiums can be lowered."

It's neither to date. Premiums rose, for some dramatically on January 1. That cast 192 people from the City's health insurance rolls, with 147 of those retiree or employee dependents..

What about a better benefit? The City is soliciting health insurance bids, with the best option the status quo. The same isn't better, but it might be worse. The other three bid options have fewer benefits/more cost sharing than the current plan.

In December 2010 Councilwoman Farmer told city workers and retirees that she would not ask the public to pay more taxes to meet promises made by prior councils. The word is Council plans a 4 cent drop in the tax rate. City Manager Dominguez has plans:

He is hoping the city can both cut taxes and raise city employee salaries during the next budget cycle — and that it is looking at a variety of cost-saving provisions to help make those goals more achievable.

Will Harold finally talk about ERRP in the July 19 Council meeting? Is he willing to put all his cards, i.e. ERRP checks on the table?

If Dominguez can pull off his goal of cutting taxes and raising salaries, that should burnish his resume. I hope he cites his record of pitting early retirees vs. employees and keeping information about ERRP (the program that shall not be named) a virtual secret from the public.

Update 8-25-11: City Public Information Officer Ty Meighan told me the City had not applied for ERRP reimbursement The formal answer from HR and Risk Management Director Lisa Marley was "no new news." Who can you trust to give accurate information, a City Council person or paid City leaders?

Update 9-4-11: ERRP is listed as an agenda item on the Council's September 6 agenda. It's only a year late and $300,000 short.

Such Matters at Angelo State

2011-07-15T17:12:00.000-05:00

Final post from West Texas Matters which I wrote about earlier this week:

ANNOUNCEMENT, 7/15/11:

I am receiving emails from people who need to share but request that I do not post their comments, even anonymously. What that tells me is that ASU is so damaged that I do not think morale can improve until there are changes in administration. Transparency, openness, and a sense of ownership and belonging must be reinstated. It is my opinion that the current regime is operating like a militaristic dictatorship incorporating fear tactics to keep people from expressing their opinions to the general public. Leaders are treating their "subjects" like ignorant rubes and insinuating that they are lucky to have a job; therefore, they should blindingly obey.

ASU is broken and there is nothing I can do if people aren't willing to put forth a concerted effort to make changes. But it is too frightening for them. I do not blame them. My heart breaks because in the end it is the very people they are there to serve that end up getting hurt - the amazing students.

I will be taking this website down in a few days. Since I posted it just a few days ago, I have learned many other things about just how bad things are and it makes me feel even more hopeless for what's ahead for ASU. I am not strong enough to tackle that hopelessness alone.

It is time for me to heal and move on. I will carry the good memories with me always. I remember the days when I was proud to be a part of a fabulous regional institution. My office had an entire wall dedicated to display ASU memorabilia which has long since been removed. Back then, students mattered. Employees mattered. It wasn't all about the numbers. It was about the people.

I wish all my former colleagues nothing but the best in their futures. Hopefully, I will see you again - down a much happier road...

Spoken from the heart and mind from someone who matters.

COSA Seeks Health Insurance Bids that Hold or Lower Costs

2011-07-15T15:11:00.008-05:00

The City of San Angelo published a request for proposal for health insurance for 2012. Health insurance premiums have recently risen 25% for other employers. This seems lost on the City, which specified four medical plan options.

Given the city's stated interest, three of the four plans should be the 2011 budget amount or lower. Given the rapid rise in health care costs, it means less benefits, greater premium payments by employees/retirees or fewer people covered.

The City's criteria for selecting a plan reinforces the cost focus:

Here's the timeline.

The City is currently working on the budget for FY 2011-2012. Their plug amount and budget assumptions remain to be seen. Despite a direct request to City Budget Analysts, HR stated budget numbers depend on bid results, which arrive mid August. The public will find out in October.

Last time I checked with Ty Meighan, the City had not applied for any Early Retiree Reimbursement Program funds.

The purpose of the reimbursement is to make health benefits more affordable for plan participants and sponsors so that health benefits are accessible to more Americans than they would otherwise be without this program

The City drove 147 dependents from health insurance coverage as of January 1, 2011. ERRP money is supposed to help employers maintain coverage, not cut it. The feds can audit an employer to see how funds saved retirees money.

If the City were serious about ERRP participation, it would've included assistance with data submission as a specification. It's omission could be an oversight or telling. Might City leaders toss in the ERRP towel and ask for termination of participation with HHS? Let's hope they get a check or two first.

Update: City Council minutes from June 28 state regarding the upcoming budget, "Council recommended and directed staff to bring back budget cuts with significant impacts." That should extend to health insurance expenditures. Also, the City filed an addendum for the RFP. It changes the location of documents from the city's website to their Holmes/Murphy representative.

Denny's San Angelo Health Reform Wish to Come True?

2011-07-15T12:26:00.000-05:00

Denny Shelton once headed Triad Hospitals, the owner of San Angelo Community Medical Center. He inked a deal with Shannon in fall 2006, that quickly fell through. A year later he spoke on the future of healthcare at ASU. Fresh from a $42 million profit on the sale of Triad, Denny wasn't willing to pay more in taxes to cover the uninsured. However, he was willing to pay for his Medicare benefit.

Denny's words may come to pass, according to the AP.

President Obama said he was ready to make tough decisions such as restructuring Medicare so that very wealthy recipients would have to pay slightly more.

Tough decision? Hardly, at least one "very wealthy recipient" long ago indicated his willingness to pay for his government provided health insurance. This recipient has the means to be heard.

Denny's direct line to the White House comes via Nancy-Ann DeParle, recently promoted from Health Czar to Obama's Deputy Chief of Staff. DeParle made over $1 million on the Triad's sale. She received stock from her board service. Denny later worked for CCMP Managing Director DeParle.

DeParle's initial financial disclosure showed ties to numerous for-profit health care companies, publicly traded and private. No updated forms have been made public. Rest assured, Obama's health reformer is very wealthy. Her having to pay slightly more for Medicare when she hits 65 isn't the least bit comforting.
How long will it take for her Medicare increase to total her tax break on carried interest? How long before Denny's premium share totals his Bush capital gains tax break of $1.5 million on his Triad proceeds?

Denny's fortunes keep growing given his interim CEO appointment for OmniCare. If he's paid at the same rate as the retiring chief executive, Denny will garner nearly $6 million for five months work. How will his political ties help OmniCare resolve its ethical problems?

The company agreed to pay $98 million to settle a Justice Department lawsuit alleging the firm paid kickbacks to nursing homes and received money for buying and making recommendations on certain drugs.

Little is said in public circles about health reform benefiting for-profiteers, many of them willing to bend the rules to meet profit targets. In private circles, investors talk about the sweet table DeParle laid for them..

Making the "very wealthy" pay "slightly more" is a small, easy bone to throw into the ring. If this is hard for President Obama, that's not saying much.

ASU Matters to West Texas

2011-07-11T10:53:00.000-05:00

A number of ASU educators, staffers and students kindly shared their aspirations, stories and frustrations about the myriad of changes at Angelo State University. A frequent contributor opened a website, West Texas Matters. They state:

As a former employee of Angelo State University, I feared reprisals for speaking my mind about the uncertain future of our once-great regional university. I stressed so much over the inconsistent and unethical actions of administrators that I literally became ill. After two trips to the hospital due to health conditions very much aggravated by job stress, I determined it was time to leave. Several of my colleagues have opted to do the same. Many more wish they could but due to financial and family obligations, they simply have no choice but to stay.

The initial topic of discussion on this website was created for the employees of ASU to speak their minds and share their concerns for the future of ASU with the community. These issues not only affect the well-being of the employees and the university but most importantly the success of our students.

If you would like to submit a comment for me to post anonymously, please send it to info@westtexasmatters.com. Two things to remember:
Your anonymity is sacred. I will not reveal email addresses or identities of any kind. Make sure there is nothing in your comment that can lead directly back to you.
Incendiary or personally vindictive comments will not be posted. Profanity will be censored in some form.
I hope this forum gives my former colleagues a sense of relief in knowing their concerns will be presented in a safe manner. Please tell others about the website's existence so that they may contribute as well.

The Veterans Administration creatively managed their situation with a critical blogger. They listened, then had him blog on the VA's behalf. As for ASU blogs, I'm still looking for that Texas Legislative Session blog. Maybe, it'll be a huge summary post.

Hospitals Pre-Screening ER Patients to Improve Collections

2011-07-10T11:28:00.001-05:00

Daytona Beach News Journal reported:

Inside the emergency room at Halifax Health, patients are being greeted by a new policy aimed at making sure they have a real medical emergency before they get treatment, a move aimed at saving money for the public hospital.

Adults with the sniffles or a persistent cough -- or anything deemed to not be an emergency medical condition by a physician or a physician's assistant -- will be directed to an onsite health clinic that charges $48, or they will be given a list of community resources.

Adults can still proceed with the emergency room visit, but only if they first pay their insurance co-pay or $350.

Hospital emergency rooms are required to perform a medical screening exam on all patients who present. Moving this review outside the doors of the ER seems a technicality. How is prescreening different than a triage assessment?

The clear aim of this new policy is to improve collections, both in the ER and the urgent care clinic. Note Halifax's spokesman is their Director of Patient Business and Financial Services. It wasn't the ER Director or Medical Director of Emergency Care. How do they feel about the new policy: Cash up front or no care, except in true emergencies.

Halifax officials say 34 percent of their bad debt is generated through their emergency rooms.

Earlier this month, Halifax board members heard about plans to wring some $5 million in savings out of the current Halifax system. Halifax officials said those savings will start with weeding out patients who don't reside in the taxing district and don't have a real emergency.

Patients from Southeast Volusia and West Volusia rang up about $7.7 million in costs that were never paid, with a substantial portion coming through the emergency room, Halifax officials estimate.

Let me guess, Southeast and West Volusia are served by for-profit hospitals. They know how to ask questions about patient responsibility that make people get up and leave the ER without care.

Times are tough for tax supported nonprofit community hospitals, such that they have to glean patient conditions and wallets, steering away those outside their tax district.

Health reform means difficult times for the uninsured and safety net hospitals until 2014. Congressional & White House corporacrats renamed nonprofit community hospitals in PPACA. They're now "private, tax exempt facilities." To survive they must act like their for-profiteering counterparts, creating systems to "not get marked up" with no-pays. How many safety net hospitals will make it until 2014?

Bad Theorists Shocked at Atlanta Public Schools' Rotten Carrots

2011-07-06T21:27:00.001-05:00

Extrinsic motivation schemes are effective at two things. They foster short term improvement in simple tasks within the control of one person and widespread cheating in complex systems with large amounts of interdependence. The stories are many, executive stock option backdating, upcoding and physician kickbacks at Rick Scott's Columbia/HCA and now Atlanta Public Schools described as.

(An) enterprise where unethical — and potentially illegal — behavior pierced every level of the bureaucracy, allowing district staff to reap praise and sometimes bonuses by misleading the children, parents and community they served.

The report accuses top district officials of wrongdoing that could lead to criminal charges in some cases.

Teachers should school themselves on CEO's, few of who were criminally charged. Return the ill begotten gains, don't admit to any criminal wrongdoing, call the deal a settlement with the government and then run for governor in a Southern state.

In 2009 I asked about Education Secretary Arnie Duncan's Reward-a-Palooza, layered on top of Bush's "No Teacher Left Un-Incentivized."

How might principals lie, cheat, and steal to garner payola?

Dr. W. Edwards Deming said "Fear causes wrong figures." It's widespread in education, especially within APS.

For teachers, a culture of fear ensured the deception would continue.

Georgia's Governor Nathan Deal said:

“The report’s findings are troubling,” he said, “but I am encouraged this investigation will bring closure to problems that existed.”

Patently laughable, given motivation systems based on bad theory still exist. APS is a case study for any organization spreading win/lose, pay for performance poison. P4P originated in corporate board rooms, which ironically produced APS current Superintendent Erroll Davis.

Davis rose to President of Alliant Energy, then served on numerous corporate boards, BP, General Motors, Union Pacific, and PPG Industries. Davis serves on the Compensation and Benefits Committee of Union Pacific's board, alongside U.S. Chamber of Commerce President Tom Donohue and Carlyle Group Senior Advisor Mac McLarty. Greed addicts seem to know only method of motivating people to do a good job, money.

Healthcare faces a looming epidemic of P4P. Expect to hear stories of doctors and nurses cheating in five to ten years time. It's predictable.

Employer Coverage Slipping

2011-07-06T11:33:00.002-05:00

Health reform shifts the burden of health insurance from employers to individuals and a tapped out Uncle Sam. The Congressional Budget Office predicts in 2019 employers will insure 14 million fewer Americans than they did in 2008. The drop is significant as America's population will have grown by 38 million people.

SEIU President Andy Stern said in 2006 that employer health insurance was "dead and not coming back." Stern served on President Obama's health reform workgroup, supposedly representing the interest of workers..

Texas has the dishonor of having the highest number and percentage of uninsureds in the U.S. Things are getting worse on the employer coverage front. San Antonio Express reported:

As employers and workers struggle to absorb the skyrocketing cost of health insurance, fewer Texans below age 65 are opting for coverage through their jobs.

In 2008-2009, 51.5 percent of the state's nonelderly population enrolled in a plan through an employer, down from 62 percent in 1999-2000, according to a June study from the Robert Wood Johnson Foundation and the State Health Access Data Assistance Center.

Nationally, the share decreased by 8 percentage points to 61.4 percent in 2008-2009.

The rest of the country dropped to Texas 2000 levels, while the Lone Star state continued growing legions of uninsureds. This study speaks to the first leg down, the drop from the blue bar to the brick colored bar in the chart above. That represents 15 million losing employer health insurance.

The second leg down, the move from the brick bar to the green bar, kicked off with the financial crisis and will choke millions of Americans before health reform "rides to the rescue" in 2014. That's a drop of 35 million people from employer coverage. Illustrating this point, the City of San Angelo sent nearly 200 people off their health insurance rolls with draconian premium increases for dependents in January 2011.

Peter Orszag's "political economy of delayed implementation" is a four year window of suffering for over 50 to 80 million Americans. One could interpret the bill as setting the stage for for-profit health care companies and private equity underwriters (PEU's) to make grand returns in a bifurcated health care system, where safety net hospitals are called "private tax exempt facilities."

It's hard to see how health care costs will go down as companies are bought for five times their original investment, in the case of Nancy-Ann DeParle's CareMore, or nearly four times total assets, in the case of TPG Capital's purchase of Immucor. PPACA clearly set the stage for employers to slowly shed that pesky health insurance benefit. Who will pick up their slack, suffering individuals, an empty pocketed Uncle Sam or the few remaining "private tax exempt facilities"?

(Click on the graph to view it larger. This is updated from a March 2010 graph)

Blose's ASU Replacement: May

2011-07-05T16:09:00.002-05:00

President Rallo formally announced two internal promotions.

I am pleased to announce to the campus the appointments of Dr. Brian J. May as Interim Provost and Vice President for Academic Affairs and of Dr. Jason Penry as Vice President for Development. Drs. May and Penry have proven records of success at ASU and will be instrumental in helping us reach our university goals.

Dr. May joined the faculty in 1994 and has served since 2009 as dean of graduate studies, where he has overseen record enrollments. He will serve up to two years as interim provost and is eligible to apply when a full national search is conducted.

A full national search for Provost and Vice President of Academic Affairs culminated in April 2010 with the selection of Anthony Blose. The perfectly suited match crumbled in less than a year.

As for the appointment of May, one longtime ASU staffer with over ten years tenure offered:

Dr. May was never a department head. He was promoted to Dean of Graduate Studies (without department head experience) because the College of Graduate Studies has no actual faculty. The faculty who teach graduate classes report to the deans of their respective colleges. For example, a Mathematics professor who teaches a graduate Mathematics class reports to the Dean of the College of Arts & Sciences (formerly the College of Sciences). So, Rallo, in all his wisdom, has put a person who has NEVER managed faculty in charge of ALL faculty for two years.

How long before Roscoe gets a VP job? At least Roscoe can lift spirits when things look down.

Update 7-10-11: The source for the comment on Brian May started a web site to chronicle ASU's sad stories. It's called West Texas Matters.