Thursday, April 30, 2015

Hickman Mills Moves on From Blue Cross, Blue Shield

By Paul Thompson

The Hickman Mills C-1 school district has officially become self-insured. During its Thursday, April 23 regular session, the C-1 Board of Education agreed to a five-year deal with the Self-Insurance Pool of Greater Kansas City (SIPGKC) to provide health insurance benefits for district employees. The district previously provided employee health coverage through Blue Cross Blue Shield of Kansas City (BCBSKC), which had proposed a 16.2% premium increase for 2015-2016. After negotiations, the increase was reduced to 13.2%, but the figure still wasn’t amenable to staff.

“As superintendent, I felt like the last time I purchased a used car,” said C-1 superintendent Dr. Dennis Carpenter. “Given the work that we have to do in the district, I don’t think this administration can continue to recommend an arrangement where every two years we’re in a used-car salesman situation.”

Instead of taking the new figures back to his staff, Carpenter reached out to SIPGKC. What he found was that the district could realize an annual liability savings of $781,000 by switching from Blue Cross Blue Shield to a self-insured plan through SIPGKC. The agreement with SIPGKC represents a roughly 4% increase over what the C-1 district paid last year, but is around 12% less expensive than what was originally proposed through BCBSKC for 2015-2016. Plan options will remain roughly equivalent in the self-insured pool, although the Preferred Care PPO will be eliminated.

Mark Whiting, who serves as a consultant for SIPGKC, said that part of SIPGKC’s value derives from the fact that it is a non-profit organization that doesn’t prioritize profits.

“There are definite advantages of being self-funded,” Whiting said. “We have lower premiums, there’s no profit margin built in; we get to lose those things if we’re self-funded.”

SIPGKC’s Paul Kinder, a former superintendent of the Blue Springs district, noted that 69% of all school districts with more than 500 employees choose to self-fund their insurance plans. Kinder further explained some of the perks of joining the self-insured pool.

“The main benefit is volume=leverage,” said Kinder. “Another part that’s really helpful is, if you have a bad year, you could go ahead and do a pay-down as a school district.

“We’re able to reduce the ACA fees,” he added. “We’re talking about a 4.3% reduction right now.”
Board member Karry Palmer asked if any services would be disrupted because of the switch.

“There’ll be some change, but it will be very minimal,” answered Whiting. “The access is fabulous, and all the hospitals are involved.”

With the beginning of the 2015-2016 school year fast-approaching, Carpenter asked to board to vote on the proposal immediately.

“Our employees know that current policies that are put forth are becoming unaffordable for the district,” he said. “We’d like to have action on this tonight, so that we can get our open enrollment going.”

The board ultimately voted unanimously to join the self-insured pool, while at least one wondered how they could become eligible.

“So they’ll be able to go to any hospital that’s in their area?” asked board member Bonnaye Mims. “Okay, how can I get in that plan?”

Monday, April 13, 2015

Kansas City’s Mayor Touts Opportunity and Innovation

By Mary Wilson

Kansas City Mayor Sly James delivered his State of the City address to a packed house at Starlight Theater on Tuesday, March 31. According to James, Starlight Theater embodies what is great about Kansas City: parks, arts, partnerships and the assets of the city.

Mayor James began his address thanking those whom he has served alongside for the past year, including sixth district councilman John Sharp, who termed out of office this week.

“Being mayor is undoubtedly the best job in politics, and there is one group that I’m compelled and honored to serve with,” said James. “The members of the council terming out of office deserve our thanks for their outstanding and committed service to Kansas City.”

He also honored the loss of Missouri Auditor Tom Schweich. “I do hope that we can learn something from that tragic circumstance. For instance, that leadership is preferable to politics,” said James. “It is my hope that over the course of the next few months, we’ll have more leaders emerge than politicians.”

According to James, more than ever, Kansas Citians are engaged, thanks to social media and technology. Technology, innovation and planning contribute to the success of the agenda James has followed since taking office in 2012. His focus has been on efficiency, employment, education and enforcement.

“Through focus on these, we strive to make all that we do in Kansas City the best today, tomorrow, and for the generation to come,” said James.

The technology foundation, according to James, continues to pay dividends in improved efficiency in Kansas City. Recently, Kansas City launched its first-ever digital roadmap, setting goals to secure its place as a leading digital city. It also supports Kansas City’s future workforce by addressing digital inclusion and creating a pipeline of home-grown talent.

“It makes Kansas City a smart city,” said James. “We are using that technology to find better efficiencies in the delivery of city services.”

A smart city is a technological framework that could bring things such as interactive kiosks, mobile applications, sensory technology and smart street lighting.

“Kansas City is once again the envy of our peers because we do things like this, drawing deeply from our entrepreneurial spirit and from our technological assets,” said James.

As a result of an open-data ordinance passed last June, data about Kansas City is more readily available to the public than at any time during the history of Kansas City. Information searches that used to mean a trip to city hall are now available online, from anywhere in the world, instantaneously, according to James.

“I believe that open, transparent government is fundamental to an efficient and effective democracy,” said James. “The open-data portal allows for that.”

James added that the opinions of citizens drive cultural shifts that include data-driven performance enhancements to improve city departments. The tool for that is the annual citizen’s satisfaction survey, with the most recent survey results showing significant improvements in sixty-one separate categories.

“City satisfaction with its citizens is at the highest level since the city began its survey in 2005,” said James. “Not many cities can say that. People are noticing the way that we do business in Kansas City.”

The mayor stated that maintaining the city’s streets, bridges, roads and other city infrastructure remains a priority for him. Currently, the city funds nearly $77 million per year for infrastructure services, such as street overlays, snow plowing, striping, signage, maintaining bridges and more.

“I refuse to kick that can down the road and leave our aging infrastructure problems for the next generation,” said James. “We have a backlog of deferred maintenance and my priority is to deal with it.”

According to James, the industry benchmark to fund the improvements Kansas City’s infrastructure needs would cost nearly three-times the allotted annual budget.

“Kansas Citians expect better and we need to do better,” said James.

In June of 2016, Kansas City voters will be asked to renew the Kansas City Earnings Tax. James said that the city has been good stewards of this critical resource by making changes like improved budgeting and fiscal management systems since the last vote.

“We are making budget decisions more closely aligned with citizen input,” said James.

Last February, Mayor James was invited to the White House for the unveiling of President Barack Obama’s My Brother’s Keeper program, which addresses strategies to align opportunity gaps faced by boys and young men of color.

“As I learned about each of the goals of My Brother’s Keeper, I was struck by the fact that Kansas City is a leader in many of those areas,” said James. “One of the President’s goals, in particular, is close to my heart: reading at grade-level by third grade.”

Turn the Page KC, the mayor’s early childhood reading program, is just one of many of the mayor’s programs focusing on youth in Kansas City. Turn the Page KC was recently recognized by KCPT for the program’s focus on all children reading at grade-level, and the White House invited the program directors to be on a panel to discuss local efforts and strategies to bridge the word gap.

Combined last year, Kansas City Mayor’s Nights served nearly 6,000 basketball, volleyball and soccer athletes ages 10-25. Last summer, Club KC served more than 10,000 Kansas City 12- to 18-year-olds, and youth crime dropped 18% while Club KC was in session.

Another focus of Mayor James has been to narrow the digital divide in Kansas City, and take full advantage of bigger digital pipelines of which Kansas City is becoming known nationally and internationally.

“We must make computers, the internet, and digital literacy training accessible to all,” said James.

James ended his address by stating that gun control regulation needs to be addressed, and that the senseless killing of children in Kansas City simply cannot continue.

“I want to thank Kansas City for giving me what I consider to be an amazing opportunity to serve as your mayor for the past four years,” said James. “I know that I have the best job in politics, and I hope you know that I’ve given you my best each and every day.”

Mayor James said he is proud to be mayor of a city that is reinventing itself.

“Flyover country no more, Kansas City is the center of the American renaissance,” said James. “We are the city that other cities look to for ideas. The state of our city is full of opportunity, and I assure you I’ll continue to seize each and every one with your help and support.”

Monday, April 6, 2015

Grandview’s Liability Decreases as a Result of Truman’s Marketplace TIF

By Mary Wilson

The Grandview Board of Aldermen unanimously approved the second amended Tax Increment Financing (TIF) plan for Truman’s Marketplace on Tuesday, March 24. Because the City of Grandview is backing bonds with its general fund appropriation authority, the liability to the city has decreased significantly.

According to Assistant City Administrator Kirk Decker, Grandview’s credit enhancement helps reduce the interest rate of the bonds, as bondholders have security that the city would supplement any debt service shortfall with an appropriation from its general fund. 

“Both of these numbers are the worst case scenario; that is, the entire project failed and no businesses produced any PILOTS (property tax increments) or EATS (sales tax increments),” said Decker.

In the original agreement, Grandview’s maximum potential debt service payment was $5.3 million.  In the second amended agreement, the City’s maximum liability is $425,000.  This liability is also lessened because the city’s general fund appropriation obligation is secured by a Community Improvement District (CID) assessment on the property within the district ($1.00 per square foot), rather than PILOTS or EATS associated with new businesses.

“Overall, it was a 92% decrease in liability and the bonds are backed by the most reliable revenue stream,” said Decker. “So, even though the project took longer than anticipated, the passage of time has been to the City’s, and subsequently its taxpayers’, advantage.”

The city will also receive a $125,000 payment semi-annually through the TIF due to additional costs, which was designed to off-set the costs that have been incurring due to the lack of development in the shopping center. These funds will continue to accrue on a sliding scale until stores open that produce $12.5 million annually in sales.

“At that point, that payment goes away,” said Joe Lauber, special counsel to the City of Grandview. “The developer worked really well with us in order to get that taken care of, and we’re appreciative of that.”

It was recommended to the board that they allow the developer to complete the purchase of the Truman Corners property after the approval of the amended bond documents, but within three days of the preliminary offering statements are mailed for the purposes of marketing the bonds.

“When they will actually purchase the shopping center will occur in a window,” said Lauber. “We think that this provision ends up being a good compromise and allows the developer and its bank the maximum flexibility that they can have high confidence that the public side of financing is going forward, but it also allows for the reality that the bond market may not look favorably at that timing.”

According to Lauber, the closing on the property has been the hardest piece of the Truman’s Marketplace puzzle to put together. Once the developer has purchased the property, a ground-breaking ceremony will take place and construction will begin.