Superior panel wrestles with consequence of saving money
The city anticipates saving $100,000 on workers' compensation next year, but it will add to software expenses for the next three years.
SUPERIOR — Changing insurance to save money on workers' compensation expenses has a consequence.
It will end Superior’s longstanding relationship Cities and Villages Mutual Insurance Company, which created a problem for the city’s Human Resources Department.
As a CVMIC client, the city has free access to NEOGOV, software used to manage new employees through the employment process and train existing employees. However, that access would have ended Jan. 1 if the city’s Human Resources Committee on Monday, Nov. 21, hadn’t approved a three-year agreement with CVMIC to continue using the software
“It’s software we use daily for online applications, applicant tracking system as well as online training and on-boarding new employees” said Cammi Janigo, human resources director. “We’re looking to maintain a relationship with them, at the very least for next year, because there’s no way we can bring in new software in that short amount of time.”
She said staff was requesting a three-year agreement for consistency in the department’s operations.
Over the three-year period, the city anticipates spending about $65,194 to access NEOGOV. Prices quoted start as $12,418 in 2023 but rise to $21,731 in 2024 and about $31,045 in 2025. A one-year option for 2023 alone was quoted at $24,836, according to a memo Janigo wrote.
“It’s quite a unique pricing system that they have,” Councilor Jack Sweeney said.
Janigo said while she had planned to present the committee with costs for alternative software options, she only heard back from one company that would require the city to use its financial software in addition to its human resources software. She said $31,000 is that annual rate, but she got lower prices for the first two years after asking if CVMIC could do better.
“We are kind of stuck between a rock and a hard place because its software that we use,” Councilor Ruth Ludwig said. “If no other company offers it to us, the decision is do we go with the three-year or do we go with one year.”
Mayor Jim Paine said while the city didn’t budget for the software expense, officials also hadn’t budgeted for the savings in worker’s compensation either.
The city anticipates saving about $100,000 by self-funding its worker’s compensation expenses and will save about $165,950 next year after changing its insurer from CVMIC to Community Insurance Company and Marsh McLellan Agency.
“We know we will save much more by going self-funded, but we did assume we would incur costs like this,” Paine said. The mayor said he anticipated costs of $25,000-$30,000 annually, so the proposal before the committee was better than Paine expected.
The three-year agreement gives the city time to explore its options, Janigo said.
The committee approved entering into a three-year agreement once a contract is presented.