To the Honorable Oconto County Board of Supervisors

ADMINISTRATIVE

COORDINATOR

2012

ANNUAL REPORT

Respectfully submitted by

Kevin Hamann

Administrative Coordinator

April 16, 2013

TO THE HONORABLE OCONTO COUNTY BOARD OF SUPERVISORS

The 2012 Annual Report is presented to you as a means of summarizing the year’s activities and addressing the current condition of the County.

I have been your Administrative Coordinator for over 16 years. During these years, we have made progress on controlling spending, implementing administrative policies and procedures, and improving communication while at the same time, providing high quality services and programs to the residents of Oconto County. We have certainly made substantial progress in that time, despite experiencing a few difficult years recently.

2012was one of maintaining the “status quo” as we wait for the legal process to work through all of the labor law issues resulting from the passage of Act 10 and Act 32 as well as struggling through our recent downturn in the economy.

ADOPTION OF 2013 BUDGET

Adoption of the 2013 Budget was,for the most part, adopting the 2012 Budget with some minor changes. Over $2 million of the fund balance was used in 2012 to balance the budgetand maintain that status quo.Continued use of the fund balance for current operational costs is not good fiscal policy. However, until the labor law issues are resolved, and the economy recovers, we are in a wait and see mode.

We also have a long term project, the new law enforcement center, that needs to be addressed in the very near future.

2012Highlights

No new debt - County continues to be debt free.
Completion of the elevator project in the annex.
HVAC improvements in Courtrooms were completed
2 year agreements with the Sheriff Deputies and the Sheriff Supervisors were approved.
1 year agreement with the Teamsters Union was approved.
2 year agreement with OCEDC was approved.
Revolving loans were made to local business in Gillett and Suring.
Created a voluntary Whole Life insurance program for employees.
Completed an audit of the Human Resources department.
Completed replacement of the Reservoir Dam.
New Beginnings relocation.
Library funding.
Courthouse parking lot resurfacing.
Implementation of wireless voting.

BEYOND 2013

Future years will be increasingly more difficult to plan and budget for. Demands for increased services such as police protection, large ticket capital needs such as the law enforcement center,employee compensation, fringe benefit costs, requests to keep current staff levels, under-funded Federal and State mandates, and the State budget all impact the County budget today as well as tomorrow.

FINANCIAL

For the fourth year in a row, the county increased the property tax millage rate. This was due to increased costs and a decrease in the equalized value of the county of $67 million. The County’s equalized value has decreased $204 million over the past four years.

The table and graph below illustrate the tax rate since 2003.

Tax Year / Tax Rate / % Incr.
2003 / 5.72 / -0.3%
2004 / 5.55 / -3.0%
2005 / 5.45 / -1.8%
2006 / 5.26 / -3.5%
2007 / 4.93 / -6.3%
2008 / 4.81 / -2.4%
2009 / 4.70 / -2.3%
2010 / 4.84 / 3.0%
2011 / 4.88 / 0.8%
2012 / 5.00 / 2.1%
2013 / 5.15 / 3.1%

Given the increase in population, increase in demand for services, increase in state and federal mandates coupled with less revenue from state and federal sources and having a tax rate that is 10% lower than in 2003 - this isevidence of having a fiscally responsible County Board.

The tax levy increased slightly for 2013, by $197,687 or 1.1% as seen in the table and graph below. From 2003 to 2013, the tax levy went up $3,998,100or 28.6%.

YEARTAX LEVY% CHANGE

200313,989,712 9.2

200415,046,347 7.6

200515,605,255 3.7

200616,003,969 2.6

200716,468,084 2.9

200816,797,446 2.0

200917,172,457 2.2

201017,491,115 1.9

201117,633,343 0.8

201217,790,125 0.9

201317,987,812 1.1

PERSONNEL

Responsibility of managing the County's human resources continues to be an ever-increasing role in the County. Human resources accounts for a significant share of the County costs.

YEAR# OF W2 ISSUED% CHANGESALARY COST(*)% CHANGE

2003357 (8.2)9,810,923 5.3%

2004367 2.810,262,225 4.6%

2005361 (1.6)10,734,288 4.6%

2006371 2.811,225,219 4.6%

2007375 1.111,723,844 4.4%

2008371 (1.1)12,290,889 4.8%

2009368 (0.1)12,527,172 1.1%

2010357 (3.0)12,588,334 0.5%

2011354 (0.1)12,631,839 0.4%

2012354 0.012,782,133 1.1%

10 yr. Avg. 3.2%

* Per Annual Total Position Cost Report – Admin. Coordinator

The number of W2’s issued has remained relatively stable for the past few years, with no change in 2012 from 2011.The salary cost increases have averaged 3.2% over the past ten years. However, in the last four years, the average has been 0.8%, much smaller due to no across-the-board wage increases in 2011 or 2012, and a freeze on longevity in 2012.

For 2012, longevity payments for all eligibleemployees totaled $365,562, a reduction of $15,669 from 2011. The County Board adopted a three year phase out of this costly benefitthat began in 2012 with a payment freeze and then a 1/3 reduction in payments beginning in 2013.

In addition to salary and wages, approximately $6.4 million was spent on fringe benefits, which is $280k or 4.2%less than in 2011. In 2012, Medical insurance costs increased $80k while retirementcostsdecreased $374k as most employees now pay 50% of the cost of retirement.

The County spent just over $4.3 million in 2012 for its share of the medical/dental insurance premiums and HRA contributions, an increase of over $80k.The health insurance rate with GHT increased 3% in 2012 and dental rates increased 5%. The County switched insurance carriers in 2003to GHT. With GHTour rate increases haveaveraged less than 5% per year. This is a very welcomed change from the double digit increaseswe had seenin the past with other carriers.

Another costly benefit is retirement.However, with Act 10, this cost has been greatly reduced by transferring part of the cost to the employees. In 2012, the County paid $0.94 million into the Wisconsin Retirement System, compared to $1.31 million in 2011. This represents a29%decrease, due to most employees paying 50% of their retirement cost beginning July 3, 2011.

Employee grievances have been decreasing for the past several years with9grievances in 2008, 10 in 2009, 8 in 2010, 6 in 2011, and no grievances in 2012. Due to Act 10, grievances should be minimal.

In 2012, 16 positions were filled from the outside with 625 persons applying for those positions. Of those applicants, 46% were male and54% were female, with57% residing in Oconto County. Most applicants learned of the openings through the State Jobnet website or newspaper ads and two-thirds of the applicants applied online.

The Personnel & Wages Committee will continue to seek ways to balance controlling salary and fringe benefits, while still being fair to the workforce. To help accomplish this, the County will undertake a classification and compensation study in 2013 with a target date of implementation in 2014. The goal is to provide reasonable wage and fringe benefits increases that will not be a burden on the taxpayers of Oconto County, especially in light of our troubled economy.

RISK MANAGEMENT

Effective risk management is essential in controlling liability, property, and workers compensation insurance costs.

In terms of liability claims,2012 was an excellent year as there were only 7liability claims currently estimated at a cost of $3,163. In comparison, the previous year, which was a very good year, had 8 claims totaling $8,400.

In terms of property claims, however,2012 was a very poor year with21 property claims currently estimated at $107,424 compared to the previous year’s 13 claims at a cost of $78,638. The biggest claims in 2012 were for damage to a Highway truck which resulted from the plow blade hitting an obstruction withan estimate of $25,798,and $25,035 for a squad car hit by a vehicle. We are currently seeking reimbursement from the person that hit the squad car.

In terms of workers compensation claims, 2012 was worse than 2011, but better than 2010 - which was the worst year ever for work comp claims. There were 22 claimsin 2012 with a current cost of $214,788. While, in 2011 we had 37 claims, and in 2010 we had 32 claims. Costs in 2011are currently $205,656 and in 2010 are currently $378,154. The last three years have been our worse years ever, with a total cost of $798,549.

In 2012, we had 5 lost time work comp claims, compared to 5 in 2011 and 4 in 2010.The 5 lost time claims resulted in 231 loss worked days and 80 restricted work days compared to 313 loss work days and 129 restricted work days in 2011.

Costs for liability, property and workers compensation insurance have taken a big chunk out of the budget with $623,247expended for coverage. Therefore, it is imperative to have a strong presence in controlling various insurance coststhrough risk management techniques.

LONG RANGE FORECAST OF NEEDS

In the previous 16 years we have made many improvements in our operation, undertaken numerous capital projects, and have provided quality services to the residents of Oconto County, while keeping the tax rate in check. We can be proud of what we have done these pastyears.However, we are now faced with a new way of doing business as a result of the recent law changes. How we proceed will determine how the taxpayers rate our performance.

The public has made it clear that we need to provide services at a cost they can affordand the State has also mandated that through the tax levy limit. In addition, the State may be imposing additional requirements and revenue cuts on counties in order to balance their budgets.

Our goal in the future should be as follows:

Comply with the tax rate and levy limits.
Retain or improve current levelsof essential programs and services.
Provide non-essential programs and services as allowed by funding.
Plan for and provide funding for the construction of a new Law Enforcement Center.

These are necessary goals and, with the dedication of all County employees and officials, we can achieve them.

I look forward to working for you in carrying out the goals and objectives you set for my position.The Administrative Coordinator position is here to serve you, the Oconto County Board of Supervisors.

If anyone has questions or comments about this report, or hassuggestions on how to better serve the residents of Oconto County, please contact me.

Respectfully submitted,

Kevin Hamann

Administrative Coordinator