CapitalSky
2015-16, No.8
February 23, 2015

In this Issue:


Right to Work Bill Doesn't Apply to Police and Fire Fighter Unions

Repeal of Local Gov. Property Insurance Fund

State Budget Repeals LEAN Grant Programs

State Budget Cuts Affect Ag Runoff Mitigation Efforts

Recently Introduced Legislation

Hearings on Municipal Bills

League of Wisconsin Municipalities
 
Ph:  (608) 267-2380
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Legislative Bulletin Archive 
 
Right to Work Bill Doesn't Apply to Police or Fire Fighter Unions 

The proposed right to work bill that the Senate intends to take up this week affects only private-sector unions. The measure prohibits unions and private businesses from reaching contracts that require all workers to pay labor dues or fees. The bill does not apply to public sector employees like police and firefighters, which, along with public transit workers, are the only municipal employees that retain full collective bargaining powers. Municipalities and police and fire fighter unions remain able to enter into agreements requiring workers to pay money to unions even if the workers choose not to join. Other public employee unions were previously barred from doing this by 2011 Act 10.


Based on conversations we've had this session and our unsuccessful lobbying effort last session, Governor Walker and GOP leaders continue to have no appetite to extend coverage of Act 10 to police and fire unions. 

Background on Proposed Repeal of the Local Government Property Insurance Fund 

As reported earlier, Governor Walker's state budget proposal eliminates the Local Government Property Insurance Fund, which is administered by the state's Office of Commissioner of Insurance (OCI). A February 2015 report shows $52.2 billion in insured property values and 974 insureds including 128 cities and 243 villages insured by the fund. Over the past few years the number of insureds has declined. The June 30, 2014 financial statements show slightly more than $27 million in annual written premium. The fund's premiums for many years was at a level with which the private market could not compete resulting in the vast majority of local units of government participating in the fund. 

In 2009, the fund had over $41 million in surplus. Some legislators believed the fund was over capitalized and forced a $12 million dividend to be given back to participants. This dividend was provided in the 2009-2010 state fiscal year. After the dividend was declared and paid several local governments covered by the fund experienced a significant property damage, resulting in the filing of several expensive claims. These claims led to a drop in surplus that continued through the most recent financial report. In 2012, the Legislative Audit Bureau conducted a study of the fund and reported that a drop in surplus levels resulted in the fund making changes to the amount of risk it was retaining in the fund. The fund also modified its reinsurance policy to cover events at a lower retention level. Although OCI took steps to increase premiums beginning in 2011, the fund continued to experience a decline in its surplus. 

The June 30, 2014 annual statement of the fund shows the surplus at negative $1.3 million. It is not known if the fund's negative surplus position continues today. Discussion has taken place at OCI to correct the shortage of surplus should the Governor's proposal not pass the legislature. An on-site property evaluation process has already begun. Many members of the fund have property that is undervalued, thus not producing the premium necessary to support the fund. In addition, discussions have occurred regarding policyholder rate increases, however, no decisions have been made. Under the budget proposal as introduced, no new coverage may be issued through the fund on or after July 1, 2015 and no coverage may be renewed after December 31, 2015. All money remaining in the fund after claims are paid will be distributed among local governments that were insured on July 1, 2015. 

OCI has clarified that the Fund will allow renewals for policies through and including 1/1/2016 effective dates. If, for example, your current policy has an effective date of 1/1/15 or earlier, you will have a chance to renew one more time with the Fund. If however your current policy has an effective date of 1/2/15 or after, the Fund will not renew your policy when it expires.

The League is working with its insurance partner, the League of Wisconsin Municipalities Mutual Insurance (LWMMI), to better understand the upcoming changes and possible elimination of the Fund.  LWMMI, together with others that have a vested interest in the fund, is looking at three alternatives should the fund be eliminated.

 

LWMMI's goal is to offer coverage, administration, and claims handling services similar to those currently provided by the Fund. The three alternatives are:

  • Contract with a commercial property insurance carrier using the combined city/village purchasing power to keep expenses low.
     

  • Add property coverage to those currently offered by LWMMI.
     

  • Create a new insurance company to replicate the Fund

 

The League is closely monitoring this provision in the state budget and will keep you apprised of any developments as they occur. Meanwhile, when LWMMI finds an alternative that matches the coverages, low expense, and services the Fund currently provides, we will let you know.

 

[Parts of this article were taken from a similar article that appeared in the Wisconsin Counties Association's February 16 WCA eNews.]

Proposed State Budget Repeals LEAN Grant Program Created in Last State Budget

The 2013-2015 state budget created a grant program for municipalities seeking partial reimbursement of expenses incurred in hiring a LEAN consultant to help the community implement a LEAN efficiency program. Under the program, municipalities were eligible to receive up to $2,000 in reimbursement. The Governor's proposed budget bill repeals the program.
Proposed State Budget Cuts Affect Manure Spills, Agricultural Runoff Mitigation

Several cuts tucked into Gov. Walker's proposed budget would decrease staff who ensure farmers meet environmental standards, remove dollars for developing safe manure management plans and limit research into the impact of agricultural runoff writes Adam Rodewald in a recent article published in the the Green Bay Press Gazette. 
Recently Introduced Legislation

AB 31/SB 40, Enabling TRIP to be Used for Collection of Private Ambulance Bills. Allows counties and municipalities to certify to DOR under the Tax Refund Intercept Program for collection of debts owed to an ambulance service operating pursuant to a contract with the county or municipality. Introduced by Rep. Tittl (R-Manitowoc) and Sen. Harsdorf (R-River Falls) The League supports this bill.  Send comments to League staff about this bill     


AB 32, Repeal of Prevailing Wage Law.  This bill eliminates the state prevailing wage law, the local prevailing wage law, and the highway prevailing wage law, but retains the prohibition against local governments enacting or administrating their own prevailing wage laws or similar ordinances. Rep. Hutton (R-Brookfield). The League is neutral on this bill.  Send comments to League staff about this bill  


AB 45, Multijurisdictional TIDsAuthorizes towns that are able to create TIDs to participate in multijurisdictional tax incremental financing districts.
  The League is neutral on this bill.  Send comments to League staff about this bill

Hearings on Municipal Bills 

No public hearings on municipal bills have been scheduled yet.