Minutes

Board of Finance - Minutes - May 19, 2026

May 19, 2026

A public record published by the Town of Simsbury (simsbury-ct.gov). mySimsbury indexes it and makes it readable; it is not the official copy. View the original file.

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Town of Simsbury
Board of Finance
Regular Meeting Minutes
May 19, 2026
Present:
Members in attendance: Lisa Heavner, Lalitha Shivaswamy, Regina Pynn, Art Wallace, Bert Helfand, and
Mike Doyle.
Others in attendance included: Amy Meriwether, Finance Director; Marc Nelson, Town Manager; Wendy
Mackstutis, First Selectman; Tom Roy, Director of Public Works; and Seth LaVigne, Consultant (Lockton)
(by Zoom)
Call to Order:
Ms. Heavner called the meeting to order at 5:45 p.m.in the Main Meeting Room in the Simsbury Town
Hall.
Pledge of Allegiance:
Everyone stood for the Pledge of Allegiance.
Public Audience:
Joan Coe, 26 Whitcomb Drive, spoke about low voter turnout at the budget referendum, escalating costs,
the impact of state mandates on costs related to special education, the use of town funds to support private
groups, and the high cost of living and tax burden in Simsbury.
Presentation: Lockton:
Seth LaVigne introduced himself as the consultant assigned to Simsbury from Lockton, the Town’s health
insurance advisor. He said he is in charge of overall strategy, including monitoring claims, budgeting,
working with unions, and long-term planning. Ms. Heavner asked Mr. LaVigne to explain what it means to
be self-insured. Mr. LaVigne said that being self-funded means that Simsbury is taking on the entire liability
for all claims. He said there are protections in place, specifically stop loss insurance, which does limit our
liability. He said that the goal of a self-funded plan is long-term flexibility and cost savings as compared
with a fully insured plan. Ms. Heavner referenced a GFOA publication regarding self-funded employee
health insurance and asked that the document be attached to the meeting minutes.
Ms. Heavner said that the Board wants to understand the best way to budget for health insurance, and noted
that during this year’s budget process the Board initially decided to use $1 million from the reserves but
reduced that amount after receiving updated claims information in the third quarter. She said the Board
wants to understand what happened between January and April, how do we monitor that, and what are the
triggers for notifying the policy board. She asked where the reserve level is today, and what the impact is
of our planned use of reserves moving forward.
Mr. LaVigne said that Simsbury has had several positive years when looking at the actual claims as
compared with the budget. He said that state and national wide trends are showing an increase in large
claims as well as in the cost of care. He said that Simsbury currently has five claimants that exceed the stop
loss amount of $275,000 per member per year. He said that from March to April, we gained an additional
four claimants over $125,000, adding an additional $400,000 in claims for the month. Mr. LaVigne said
that for rating purposes, we look at prior year activity rather than what we anticipate to see in the next year.
Therefore, prior year overages are factored into the next year’s budget. Ms. Heavner asked whether the
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budget would then also account for keeping the reserves at 25% of expected claims. Mr. LaVigne said that
the recommendation for self-funded plans is to have between 8.5%-11% held for incurred by not recorded
(IBNR) and between 7%-9% for large claim fluctuations. Mr. LaVigne said that if we budgeted for the
projected increase plus 20% of expected claims in reserves, that is a good place to be in. He said that the
maximum that we should hold is 25%. Ms. Heavner asked what would be the lowest amount they would
recommend; Mr. LaVigne said 15.5%. Ms. Heavner said that is different from the guidance we received
about seven years ago, and Mr. LaVigne said the IBNR landscape has changed since then. He said that we
should not drop below 8.5%, and that because the budget builds in losses from prior years, we are able to
put funds back into reserves as long as claims are not worse from the prior year.
Ms. Heavner asked about budget projections after next year. Mr. LaVigne said that when we do projections,
we have to assume annual trend which is around 9.7% right now. If next year’s projection of 14% holds,
the following year should be around a 9.5% increase. He said that we use the actuarial projections for trends.
Dr. Shivaswamy asked when they would know if that trend is expected to change. Mr. LaVigne said that
the actuaries get information in December that would indicate whether the trend would change for the
upcoming year. He said that Lockton looks at the data quarterly, but that Simsbury is not a large enough
group to be able to be able to gauge trends by quarter. He said looking at the data monthly would not help
with projections.
Dr. Shivaswamy asked what can we do next year to ensure that we have solid numbers before the Board of
Finance approves a budget for referendum. Mr. LaVigne said one of the primary issues is that stop loss
does not provide the necessary information until mid-April. Lockton does not know until end of April or
early May what stop loss will be. He said this year we also had the added issue of the sudden onset of large
claims. Ms. Heavner said that the referendum may need to be moved out next year to allow time to review
the data. Ms. Heavner asked if we should revise our stop loss limit of $275,000. Mr. LaVigne said that our
limit is on the higher end and while we can lower it, the carrier will pass that cost onto us. Discussion
ensued regarding the long-term benefits of remaining fully insured. Ms. Heavner asked if there is an impact
to the fund based on active members versus retirees; Mr. LaVigne said that the expectation for the retirees
is similar to actives.
Ms. Heavner asked if Lockton has draft policies that the Board can look at. Ms. Meriwether said we already
have a policy that she can send to Mr. LaVigne for review and feedback. Mr. LaVigne left the meeting at
6:20 p.m.
Mr. Wallace said that our reserves are at 20%, and Mr. LaVigne was advocating for a bottom of 15.5% and
a top of 20%-25%. He noted that we did fund the anticipated premium increase of 14% in FY27. Discussion
ensued regarding when the Board should be notified of the level of reserves.
Ms. Heavner asked Mr. Nelson for an update on the take-home vehicle policy. Mr. Nelson said that staff is
on a second draft of the policy and we expect to have it circulated in the middle of June for an effective
date of July 1. Ms. Meriwether said the disposition policy will be prepared on the same timeline.
Ms. Heavner said that the Board will discuss capital planning at the July meeting. She also said SVAA
would like to make a presentation to the Board in June.
Finance Director’s Report:
Ms. Meriwether said that there is one supplemental appropriation on the agenda, and that this is the only
item added since the last meeting. If this supplemental appropriation is approved, that will bring the total
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amount to $486,000 or 0.38%. She said we monitor this amount to ensure that we do not go over 3% for
the year, which is the threshold for referendum.
Ms. Meriwether said that the CRCOG LOTCIP grant and DEEP grant are pending, with notifications
expected at the end of the summer.
Ms. Meriwether said that the fraud risk implementation is a priority of the Town Manager and that the
proposed policy will be implemented by mid-June.
Regarding the pooled investments, Ms. Meriwether noted the steady rates of 3.7%-3.8%.
In regards to revenues, Ms. Meriwether directed the Board to the bottom of page 5, noting that the general
fund revenues are comparable year over year. She noted the major variances on page 4, including the
increased amount received for state owned property/telephone access grant, and the increased conveyance
taxes. She said the building department revenue is slightly lower as compared with last year due to two
large projects that occurred last year. She noted that while the social services grant amount did not vary
from last year, the timing of the payment was different this year.
Ms. Heavner asked about anticipated tax collections, and Mr. Nelson said that we are anticipating resolution
on a couple of pending payments by the end of the fiscal year. Ms. Heavner asked for an update on projected
investment income; Ms. Meriwether said that we are anticipating to end the year as projected.
In regards to expenditures, Ms. Meriwether directed the Board to page 8, indicating that expenses are
comparable year over year and that there is nothing significant to report.
Pension Plans Experience Study:
Ms. Heavner said that this study assists with comparing the performance of the plan with actuarial
assumptions. She said the recommendation is to complete a study every 3-5 years to adapt to changing
conditions and that we saw cost savings the last two times we had one, but noted that this will not always
be the case. Ms. Heavner said that the Board is requesting the Town Manager or Finance Director to obtain
an estimate from our actuary for the cost of an experience study and request a report to be delivered prior
to December 26 so that any recommendations can be incorporated into the FY28 budget.
Ms. Meriwether said she did reach out the Milliman and the cost is $14,000 per plan. Mr. Wallace said that
this cost is appropriate as compared with the level of assets in the plan.
Mr. Wallace made a motion to authorize the pension plan experience study at the cost of $14,000 per plan
and to request that the actuary provide the estimates for the annual required contribution by December 26,
2026. Mr. Helfand seconded the motion. All were in favor and the motion passed unanimously.
Vacancy Sub-Committee Update:
Dr. Shivaswamy said that she attended this meeting which included the Town Manager, First Selectman,
and members of the Economic Development Commission. The group discussed vacant properties and
strategies for filling them as quickly as possible, potentially as co-working or incubator space. She said that
one property did close at almost half of what was expected, which will lower the amount of taxes collected
on that property.
Ms. Heavner asked if we know what percentage of commercial space is vacant. Mr. Nelson said we can get
that information. He said one way to mitigate the anticipated shift in tax burden from commercial to
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residential properties is by generating grand list growth, so we are monitoring potential developments and
working on projections for future tax revenue. Mr. Nelson said the committee is looking at three properties
in particular.
Dr. Shivaswamy said the next meeting is in June, and that the committee will be touring the properties.
She noted that Melissa Osborne may be able to advocate for this at the state level.
Agenda Items:
a) Setting of the FY2026/2027 Mill Rate (Pages 9-12)
Ms. Heavner said that the state law changed regarding the supplemental education funding, such that
the funds are to be treated like ECS. She said those funds come into the general fund and can be used
to offset the FY27 budget. She said the two options are to use the funds to lower the mill rate or leave
it in the general fund.
Ms. Meriwether reviewed the levy calc worksheet based on the budget approved at referendum, which
reflects a mill rate of 33.78 and a 2.3% tax increase. She said that after the referendum date was set,
the Town was notified that it would receive additional state funding in the amount of $407,895. This
amount includes $165,475 as supplemental education funding, $165,475 categorized as District Relief
and Compensatory Use Learning Aid (DRACULA), and $76,945 in the Pequot-Mohegan grant. Ms.
Meriwether said that if the funds were used for tax relief, the mill rate would be 33.65 and the tax
increase would be 1.91%.
Ms. Mackstutis noted that the Pequot-Mohegan funding is one-time. Ms. Heavner said that the education
funding could potentially be one-time as well. Ms. Mackstutis said that she is hearing at state level that
this is not a one-time fix, and that education funding is a priority for CCM and CRCOG. Ms. Pynn said
that if these additional funds are not going to continue into the next budget, we should consider not
using the funds to reduce the mill rate. Further discussion ensued regarding the impact of using each of
the three sources of additional funds. Ms. Meriwether said if we use only the additional education
funding, the tax increase would be 1.97%, and if we only use the ECS funding and not the DRACULA
funding, the tax increase would be 2.15%.
Mr. Wallace asked how we would have treated this funding had we been notified earlier in the budget
process. Ms. Pynn said that keeping the mill rate low and increasing cash for capital were priorities, and
we compromised a bit to accommodate the health insurance situation. Ms. Heavner said that we did
partially tax for the health insurance costs, so this would be a way to give back to the taxpayers.
Discussion ensued regarding the potential risks of using the funds for mill rate relief if the funds are not
recurring.
Mr. Helfand made a motion, effective May 19, 2026 to utilize the Supplemental Education Aid Grant
and District Relief and Compensatory Use Learning Aid Grant for a total amount of $330,950 and to
set the Fiscal Year 2026/2027 mill rate accordingly at 33.67 mills for the Town only, which would result
in a tax increase on the Town side, exclusive of motor vehicles, of 1.97%. Dr. Shivaswamy seconded
the motion. All were in favor and the motion passed unanimously.
Dr. Shivaswamy made a motion, effective May 19, 2026 to set the motor vehicle mill rate for Fiscal
Year 2026/2027 at 32.36 mills. Ms. Pynn seconded the motion. All were in favor and the motion passed
unanimously.
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b) Supplemental Appropriation – Purchase of a Crew Leader Truck (Pages 13)
Mr. Roy said that one of the items not approved during the FY27 budget process was the replacement
of a crew leader truck. He said the crew leader trucks are used year-round, but most importantly are
used during snow events. He said these trucks are front line vehicles and respond directly to emergency
scenes. Mr. Roy said that Public Works recently traded in old vehicles and equipment, generating
$63,100 in revenue that can be used to cover the cost of the truck.
Mr. Wallace asked if the revenue generated from the sale of old vehicles and equipment will cover the
cost of the purchase; Mr. Roy said yes. Mr. Doyle asked about the mileage of the vehicle to be sold;
Mr. Roy said it is around 100,000 miles and that 98,000 is normally the threshold. He noted the level
of wear and tear on these types of vehicles.
Mr. Helfand expressed concern with supplemental appropriations in that they are considered outside of
the broader budget context. He asked Mr. Nelson why this truck was not prioritized in the budget
process. Mr. Nelson said that we are trying to get away from year end savings requests, and that this is
a supplemental for FY26, not the budget that was just passed. He said the fact that Mr. Roy is choosing
to purchase this truck with the revenue from sales proves that this is, in fact, his priority. Ms. Heavner
expressed concern that we do not have a prioritized list of capital. Mr. Nelson said it would be easier to
prioritize if we knew how much we could spend above the standard $416,250 per year. Ms. Pynn said
that Mr. Roy should be commended for his work on this, and that she supports the supplemental
appropriation. Mr. Wallace agreed.
Mr. Doyle made a motion, effective May 19, 2026 to approve a supplemental appropriation in the
amount of $63,100 for the purchase of a crew leader truck to be funded by the sale of equipment. Ms.
Pynn seconded the motion. All were in favor and the motion passed unanimously.
c) Simsbury Performing Arts Center – Bandshell Expansion Project Update
Mr. Roy said the project is on schedule and on budget, and that the schedule is very tight. He said there
is anticipated to be three days between final construction and the first summer concert. He said the fire
alarm system is critical, and that this will take the longest to complete. Mr. Roy said there have been
some change orders, but that we are anticipating returning $130,000-$155,000.
Mr. Helfand asked if any of the project elements have been scaled back. Mr. Roy said that we have
scaled back where we can, and that we may add back in the window treatments and blinds. However,
that would be done outside of the current contract. Dr. Shivaswamy asked if the decision regarding
whether or not to proceed with high school graduation at this location is relevant to this discussion. Mr.
Roy said there is nothing we can do to accelerate the construction, and that the decision will be made
with the fire marshal at the end of the month. The full fire alarm and fire suppression system may not
be complete in time. Mr. Doyle noted that prior graduations were held at this location without those
system in place. Mr. Nelson said that the difference in this case is that it is an active construction site.
It was noted that the back-up location for graduation is the high school.
d) Approval of Tax Collector Suspense List (Pages 14-32)
Ms. Heavner said this item is required annually by state statute and details the taxes that are deemed
uncollectable.
Mr. Helfand made a motion, effective May 19, 2026 to approve the suspense list in the amount of
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$93,998.02 and authorize Tax Collector, Sherry Clemens to transfer these accounts to the Suspense Tax
Book. Mr. Doyle seconded the motion. All were in favor and the motion passed unanimously.
e) Appointment of the Auditor for FY 2025/2026 (Pages 33)
Ms. Heavner said that this Board is required by state statute to appoint the auditor. She said this is the
third year of the contract. Mr. Wallace asked if the contract fee was built into the budget; Ms.
Meriwether said yes.
Dr. Shivaswamy made a motion, effective May 19, 2026 to appoint CliftonLarsonAllen LLP as the
Town of Simsbury’s auditors for the fiscal year audit ending 2025/2026. Ms. Pynn seconded the motion.
All were in favor and the motion passed unanimously.
f) Public Audience Discussion (Pages 34-36)
Ms. Pynn said she has received questions from members of the public as to why there is public audience
on some Board agendas but not others, and that we should be clear as to how and when people can come
speak to the Board. Ms. Heavner said that the Board of Finance used to offer public audience once per
year in addition to the budget hearing, and that this Board includes public audience anytime there is a
supplemental appropriation on the agenda. Mr. Helfand said the recommendations from the Charter
Revision Commission include a provision that requires all boards to have public audience. There was
consensus among the members that public audience should be set at three minutes.
Ms. Pynn made a motion, effective May 19, 2026 to amend the Board of Finance Rules of Procedure
by amending #8 as follows:
“8. All Board of Finance regular and special meetings shall include a public audience period at the
beginning of the meeting, providing any member of the public an opportunity to speak for three (3)
minutes. Any resident or taxpayer so speaking shall identify him/herself by name and address and if
he/she is representing a group or organization, he/she may so state. The Chair may, at his or her
discretion, recognize specific members of the public for participation on an agenda item under
discussion, if he or she feels that member of the public has knowledge or input of value to the board.”
Dr. Shivaswamy seconded the motion. All were in favor and the motion passed unanimously.
Mr. Doyle reminded the public that they can email the full Board via the website at any time.
g) Annual Report for FY 2024/2025 (Pages 37-99)
Ms. Heavner thanked those who worked on the report. She asked if the IT Department could assist
with making the document look presentable online.
Dr. Shivaswamy made a motion, effective May 19, 2026 to approve the Board of Finance Annual Report
Statement. Ms. Pynn seconded the motion. All were in favor and the motion passed unanimously.
Review of Minutes:
h) April 21, 2026 Regular Meeting Minutes (Pages 100-105)
Mr. Helfand made a motion, effective May 19, 2026, to approve the minutes of the April 21, 2026
Regular Meeting. Mr. Wallace seconded the motion. All were in favor and the motion passed
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unanimously.
i) April 29, 2026 Special Meeting Minutes (Pages 106-193)
Ms. Pynn made a motion, effective May 19, 2026, to approve the minutes of the April 29, 2026
Special Meeting. Mr. Wallace seconded the motion. All were in favor and the motion passed
unanimously.
Adjourn:
Dr. Shivaswamy made a motion to adjourn the Regular Meeting of the Board of Finance at 7:34 p.m.
Mr. Wallace seconded the motion. All were in favor and the motion passed unanimously.
Respectfully submitted,
Melissa Appleby
Budget Director
By SHAyNE KAVANAGH
Smart Practices for Self-Funded
Employee Health Insurance
October 2018 | Government Finance Review 11
S elf-funded health-care coverage is a potentially pow-
erful way for governments to save money. One study,
for example, showed a cost reduction of 10 percent
compared to commercial insurance.1 With self-insurance, the
local government maintains its own fund to cover the cost of
claims, administration of benefits, and reinsurance rather than
purchasing a commercial insurance plan to cover these costs.
Self-insurance generates savings by eliminating the profit
margin of commercial insurers, designing the benefit plan to
the employer’s exact specifications, and avoiding some legisla-
tive mandates and tax implications that apply to commercial
insurers, the costs of which are passed on to customers.
In the past, local governments have not self-insured as
often as private firms,2 but this could change as health-
care cost pressures continue to mount. The purpose of this
article is to review smart practices for running a self-insured
employee health plan. For governments that already have
a self-insured plan, these practices
can be implemented to make sure it
remains sustainable. For those that
are considering self-insurance, these
practices can form the basis of a
plan’s design.
FUNDING THE PLAN
Just as a private insurer charges
premiums to cover the cost of health
insurance, a local government must
devise a system of internal charges. Under commercial insur-
ance, the market effectively “enforces discipline” on a health
plan because commercial insurers will charge the govern-
ment commensurately with the cost of providing services.
Under self-insurance, a government must discipline itself
— if internal charges are insufficient, the plan will not be
sustainable.
Funding Smart Practice No. 1: Make sure the costs
for the amounts needed to cover the use of benefits
and to fund the desired reserve levels are transparent.
Foremost, charges should be set at a level sufficient to cover
the cost of medical services, administering the health plan,
and purchasing reinsurance, or “stop loss” coverage. Local
governments can calculate a range of likely costs and then
set charges high enough to cover it. Local governments can
engage an actuary or work with other external experts to help
set rates. Outside advice is needed because in addition to
accounting for the plan’s own experience, rates should also
cover external factors like medical cost inflation or changes
in the market for medical services. An outside firm that helps
the local government run the plan could even “bill” rates to
the government, mimicking a premium payment and enforc-
ing the discipline that commercial insurance would impose.
Charges should also be sufficient to make progress toward
accumulating the desired reserves for the plan, protecting it
against unforeseen circumstances.
Funding Smart Practice No. 2: Align participant con-
tributions with the cost of the plan. Employees should
contribute to the funding of the plan, and the size of the
contribution should be related to the plan’s overall cost. This
means that local governments should adopt a policy stipulat-
ing that employee contributions will change with the cost
of the plan, giving employees a stake in cost management.
This policy will also help the employer
maintain regular updates to the con-
tribution structure and avoid a situ-
ation wherein contributions remain
stagnant while costs increase.
Funding Smart Practice No. 3:
Allocate costs to departments. It’s
a good idea to allocate the employer’s
share of the plan to departments based
on the number of employees they
have participating in the health plan.
This allows governments to make per-
sonnel decisions based on true cost of personnel.
CONTAINING THE COST OF THE PLAN
One of the big advantages of self-insurance is that it gives
the employer more latitude in designing the plan, compared
to commercial insurance. As a result, it’s often easier to apply
cost-containment measures.
Cost Containment Smart Practice No. 1: Develop a
cost-effective wellness plan. Wellness plans have the poten-
tial to generate substantial savings. One large study showed
more than $3 in savings for every $1 spent on wellness over
a three-year period.3 However, the design of a wellness plan
makes a huge difference in the amount savings, or if savings
are generated at all.4 Self-insured governments typically have
much better access to claims data than their commercially
Just as a private insurer
charges premiums to cover
the cost of health insurance, a
local government must devise
a system of internal charges.
12 Government Finance Review | October 2018
insured peers, and these data can be
used to align wellness offerings with
the conditions that are driving costs
up. Biometric evaluation and surveys
can complement claims data by pro-
viding more forward-looking informa-
tion on the conditions that should be
of greatest concern; for example, data
on high blood pressure, cholesterol,
glucose, and triglycerides can suggest
the biggest risks to employee health,
which in turn suggests potential areas
of focus for wellness.
Cost Containment Smart
Practice No. 2: Provide more cost-effective ways to
access care. A trip to the doctor’s office can be expensive,
not only in terms of the payout to the doctor but also in lost
work time and, in the case of services that require 24/7 cover-
age, the cost of substitute labor. Governments should con-
sider creating an on-site clinic to provide medical services on
(or near) the workplace. In addition to creating more rapid
access for employees, the employer benefits from an on-site
clinic by eliminating the profit margin a commercial provider
would charge and by gaining ways to negotiate charges with
the medical service provider that staffs the clinic. Staffing
needs vary from nurse practitioners and physician assistants
to a full medical staff, depending on how the clinic is expect-
ed to be used. The services offered may range from immuni-
zations and limited acute care to physicals, lab work, behav-
ioral health services, and even pharmacy services. Research
shows that on-site clinics save between $1.60 and $4 for every
dollar invested.5 Keep in mind, however, that employees will
require incentives to use the clinic, like waiving co-pays for
using the clinic instead of a commercial provider.
To be effective, a clinic must have a certain number of
potential patients — approximately 800 to 1,000.6 But this
does not mean that on-site clinics aren’t an option for smaller
employers; multiple employers can share a clinic. For exam-
ple, the City of Mesquite, Texas, joined with the Mesquite
School District to offer a full-service clinic.
Another strategy for improving employees’ access to health
care is telemedicine. This isn’t as comprehensive a solution
as an on-site clinic, but it can create significant savings. A tele-
medicine appointment can cost approximately half as much
as a typical office visit.7
Cost Containment Smart
Practice No.3: Introduce “con-
sumerism” into health plans.
Conventional health plans don’t give
participants accurate price signals. For
example, a participant whose co-pay
is $50 for an office visit has no incen-
tive to choose a doctor who charges
$135 for over one who charges $175.
“Consumerism” aims to more closely
align the costs plan participants face
with the actual total charges the plan
experiences. At minimum, this could
mean charging plan participants more
for emergency room visits than for
going to an urgent care facility, since emergency room visits
cost more.
A fuller realization of the consumerism ideal is a high-
deductible health plan (HDHP). Simply put, the high deduct-
ible (often up to $5,000) theoretically leads employees to be
more discerning about which health providers to use, and
perhaps even to scrutinize provider invoices more closely.
Research has shown that HDHPs do result in lower patient
spending, but there is a cloud with this silver lining: Instead
of choosing more wisely, plan participants often choose to
receive less care.8 Participants may need help making more
informed choices. The City of Farmers Branch, Texas, for
example, started using a health-care concierge service to
help employees navigate health-care choices. The City of
Holland, Michigan, gives cash gift cards for choosing lower-
cost providers for certain pricey procedures such as colonos-
copies. Value-based insurance design, discussed below, can
also steer employees toward the most cost-effective services,
rather than just encouraging them to spend less.
Cost Containment Smart Practice No. 4: Implement
a value-based insurance design (VBID). The premise of
VBID is that high-cost and chronic cases account for the
bulk of an employer’s overall costs.9 These patients usu-
ally agree to follow the course of treatment recommended
by the provider.10 Therefore, containing costs requires that
providers recommend cost-effective treatments and that the
patient then follow through on their agreement with the
provider. Hence, eliminating or lowering co-payments for
high-value treatments eliminates an important barrier that
keeps patients from maintaining their treatment regimen.
One of the big advantages
of self-insurance is that it gives
the employer more latitude
in designing the plan, compared
to commercial insurance.
As a result, it’s often easier
to apply cost-containment
measures.
October 2018 | Government Finance Review 13
To illustrate, it is far better to subsidize
an employee’s $2-a-day drug cost for a
high-value drug for a heart condition
than to pay for $100,000 heart bypass
surgery later.11
In the most basic approach to VBID,
the employer simply lowers or elimi-
nates co-payments for drugs or treat-
ments that are proven to have high
value relative to other treatment regimens. An elaboration on
this basic model is to have more individualized cost-sharing
arrangements, depending on a plan participant’s specific
condition. For example, a plan participant with heart prob-
lems may have no co-payments for a drug with proven value
for heart conditions, while another participant, who doesn’t
have a heart problem, would have to make copayments if
they sought to use the drug for another condition, where
value hasn’t been demonstrated. The crux of the idea is to
adjust the out-of-pocket costs for health services based on
how clinically beneficial a service is to a particular patient.
The City of Asheville, North Carolina, runs a highly suc-
cessful disease management program that conforms to VBID
principles. Disorders covered by the program include diabe-
tes, asthma, depression, hypertension, and high cholesterol.
The city has seen positive results from these programs, saving
about $4 for every $1 invested.12
Cost Control Smart Practice No. 5: Focus on phar-
maceuticals. Because pharmaceuticals are a potentially
expensive and complicated aspect of medical treatment,
self-insured employers can benefit from engaging a pharmacy
benefit management (PBM) company to manage this aspect
of the plan. For example, a PBM could focus on managing/
avoiding custom formularies and mitigating the use of drug
company coupons (which create incentives to purchase
high-cost drugs that employees might otherwise avoid). The
downside is that adding a PBM could increase the govern-
ment’s administrative overhead.
Cost Control Smart Practice No. 6: Conduct a depen-
dent eligibility audit.13 Approximately 8 percent of depen-
dents who participate in health-care plans are ineligible for
coverage — for example, children who have gotten too old
or former spouses.14 The City of Corpus Christi, Texas, learned
that 9 percent of dependents participating in its plan were
ineligible for coverage. Governments should periodically
audit plan participants and remove
those who aren’t eligible participants,
thereby cutting costs.
PLAN GOVERNANCE
Part of enforcing discipline on a self-
insured plan is having a decision-mak-
ing structure in place to help make
hard choices. Many governments use
special committees for this purpose.
Plan Governance Smart Practice No. 1: Include
employees on a committee. An important barrier to mak-
ing hard choices is concern about the negative impact of plan
changes on employees in the short term — although employ-
ees have a clear interest in the plan’s long-term viability.
By including them in plan decision, the government makes
hard choices something that is done with the employees
rather than done to them. Some governments have bodies
made up mostly or exclusively of employee representatives
to make recommendations about the plan or even to par-
ticipate directly in decision making. For example, in the City
of Renton, Washington, the committee makes recommenda-
tions for potential changes to benefits based on a cost-benefit
analysis. The committee also helps select the city’s stop-loss
insurance provider.
Approximately 8 percent of
dependents who participate in
health-care plans are ineligible
for coverage.
14 Government Finance Review | October 2018
Plan Governance Smart Practice No. 2: Consider
including expert citizens on a committee. Citizens some-
times have expert knowledge that could be helpful in manag-
ing the plan. Furthermore, including citizens in the decision-
making process could confer greater legitimacy to the deci-
sions the committee reaches. The City of Chandler, Arizona,
takes applications from interested citizens.
Know your State’s Rules
Your state may have special requirements for how a self-fund-
ed plan must operate, including funding and reporting require-
ments. Governments that are considering self-insurance should
be aware of these regulations.
MONITORING THE PLAN
Self-insuring means that local governments can get more
access to detailed information about how benefits are used.
These data should be used to look for opportunities for better
managing the plan.
Monitoring Smart Practice No. 1: Engage a partner
that will help monitor the plan. Governments often engage
third-party firms to help manage the plan. Being able to
provide information for monitoring the plan is an important
consideration in choosing a firm.
Monitoring Smart Practice No. 2: Look for trends that
increase costs. Monitoring should be focused on a limited
number of high-impact topics, such as:
n Impending large claims. Reviewing claims warns the gov-
ernment that large expenditures are imminent.
n Medical conditions that drive cost. If particular conditions
are driving up costs, it may be pos-
sible to focus wellness and/or VBID
disease management on those con-
ditions. For instance, chronic condi-
tions like diabetes or hypertension
are often major contributors to the
rising cost of a plan.
n High-growth areas. If a cost area is
growing rapidly, the employer can
intervene before the costs become
too high, perhaps by offering an
appropriate service through an on-
site clinic.
n Value of services. Some providers may have demonstrably
better value than others. For example, a hospital with low
rate of infection is a better value than a hospital where the
rate is higher. The plan could be adjusted to encourage
participants to use high-value providers.
n Pharmacy trends. Given the high cost of pharmaceuticals,
it is wise to measure trends like the underuse of lower-cost
generics or the overuse of opioids.
n Sufficient use of preventative services. One of the unin-
tended consequences of trying to better align participant
incentives with plan costs (e.g., with health-care con-
sumerism) is that a flawed design can create incentives
to underutilize preventative services, leading to higher
long-term costs. Underutilization of these services might
prompt investigation of strategies to increase use by
changing financial incentives or making the services more
accessible (via an on-site clinic, for example).
Monitoring Smart Practice No.3: Establish a regular
monitoring schedule. Staff who are close to the plan (e.g.,
the human resources and finance departments) should
monitor trends monthly, and an outside expert (e.g., bro-
ker, consultant, third-party administrator) should conduct a
more formal review, along with members of the governing
committee(s), at least quarterly. When the governing commit-
tee is aware of the trends that drive cost, it will be make more
effective decisions.
STOP-LOSS COVERAGE
Stop-loss coverage caps the amount of money an employer
has to pay out, protecting the plan against catastrophic claims
by shifting the risk of low-probability, high-consequence
events to a third-party insurer.
Stop-Loss Smart Practice No.1:
Consider both aggregate and indi-
vidual stop loss. Organizations can
purchase stop-loss coverage to protect
against a high claim by any individual
participant, which is referred to as
individual stop loss. Aggregate stop
loss provides a ceiling on the dol-
lar amount an employer would be
required to pay across all plan partici-
pants for the duration of the insurance
contract period. Each type provides
Part of enforcing discipline on
a self-insured plan is having
a decision-making structure
in place to help make hard
choices. Many governments
use special committees for this
purpose.
October 2018 | Government Finance Review 15
coverage against extremely poor plan
performance, but in different ways, so
employers often purchase both.
Stop-Loss Smart Practice No.
2: Find the optimal “attachment
point” with a risk analysis. In insur-
ance parlance, the “attachment point”
is the point at which stop-loss insur-
ance becomes effective. For example,
if a stop-loss policy has an attach-
ment point of $1 million, the insurance
pays out after the employer has paid
$1 million in claims. The relationship
between the attachment point and the price of the insurance
policy is not linear; rather, it is more like the relationship
shown in Exhibit 1. At the ends of the curve, the employer
doesn’t get a good deal. At very high attachment points,
the employer assumes more risk for very modest decreases
in cost, while at the low attachment points, the employer
receives modest increases in coverage for much greater
increases in cost. The best attachment point varies for each
government, but will be a function of the government’s
appetite for risk, tolerance for uncertainty, and capacity
to absorb higher-than-average claims
years through reserves.
Stop-Loss Smart Practice No. 3:
Beware of treating stop-loss cov-
erage as a commodity. Stop-loss
coverage is sometimes treated as a
commodity — the employer simply
picks the policy that appears to offer
the best combination of price and
attachment point. However, stop-loss
policies with the same attachment
point may not be equal. The terms and
conditions of the policy could result
in less protection than the government thought it was getting.
For example, during a renewal or re-bid, insurance providers
could use information on existing large claims to exclude the
services that are the subject of the claim (a practice known
as a “laser”).
THIRD-PARTy SUPPORT WITH MANAGING
THE PLAN
Local governments should form partnerships with third par-
ties (often, but not always, private firms) that can support the
plan’s objectives. Companies that provide commercial health
insurance (e.g., Anthem, Blue Cross) can also provide support
for a self-insured plan by adjudicating claims and making
available a network for medical service providers. Firms that
play this role are broadly known as “third-party administra-
tors” or “TPAs.” Brokers and benefits consultants can perform
analysis and offer guidance on how to best manage the plan.
They are independent of the TPA’s interests and may have a
broader perspective on the market for medical benefits. Third-
parties should be strong partners in helping the government
implement smart practices like those described in this article
— so the lowest cost provider is not always the best option.
Third-Party Smart Practice No. 1: Get a TPA with
strong purchasing power for health services. One of the
most important features of a TPA is the purchasing power it
can bring to bear on behalf of the government. If the TPA can
negotiate better pricing with health-service providers, the gov-
ernment will benefit. Benefits consultants can be used to help
evaluate TPAs for the strength of their networks and the dis-
counts they can provide on medical services, and how these
strengths compare to the administrative fees the TPA charges.
Exhibit 1: The Relationship between
the Attachment Point and the Price
of the Insurance Policy
Cost
of Stop
Loss
Insurance
The Attachment Point
Self-insuring means that local
governments can get more
access to detailed information
about how benefits are used.
These data should be used
to look for opportunities for
better managing the plan.
16 Government Finance Review | October 2018
Third-Party Smart Practice No.
2: Insist on claims processing per-
formance guarantees for a lower
error rate. The TPA’s performance
influences how employees perceive
the quality of the benefit. For example,
a plan might start covering chiroprac-
tic services, but if the TPA doesn’t
adjust its system promptly and cor-
rectly to accept claims for the new
service, and claims are rejected, the
plan’s reputation will suffer. Governments can therefore
require performance guarantees and even have audit rights
over in place with their TPAs.
Third-Party Smart Practice No. 3: Get a TPA that
can help with cost containment. The best TPAs can help
the government implement many of the cost-containment
techniques described earlier in this article. For example,
designing a cost-effective wellness and disease-manage-
ment program is much easier with the expert support of a
qualified TPA.
Third-Party Smart Practice No. 4: Get a TPA that can
support plan monitoring. Third-party partners should also
be able to help with monitoring the trends described earlier
in this article. In fact, the TPA should be an integral partici-
pant in the quarterly monitoring meetings. The third party
best positioned to do this varies. Some TPAs can provide this
support, while in other cases, a broker or benefits consultant
might be best.
PLAN RESERVE
A reserve provides a hedge against the risk that a self-
funded plan is subject to. The big question for all employers
offering a self-funded plan is “How much is enough?”
Reserve Smart Practice No. 1: Make sure the reserve
is sufficient to cover incurred-but-not-reported (IBNR)
claims. IBNR typically has two parts. The first is claims that
have happened but have not been reported. There can be a
significant lag time between a coverable event and when it is
reported to the plan. The second part is claims that are known
but not completely settled. Both of these numbers can be esti-
mated based on prior experience or, in the absence of that,
the experience of similar sized orga-
nizations that are self-insured. A TPA,
broker, or consultant could also help
estimate this number — or the govern-
ment might need the assistance of an
actuary. IBNR is important because if
the local government were to discon-
tinue the plan, it would want to have
sufficient reserves to pay off remain-
ing claims. Some states also require
reporting or verification of plan liquid-
ity and viability.
Reserve Smart Practice No. 2: Make sure the reserve
will cover claim cost variability that is greater than
planned revenue inflow. Governments need to be prepared
for costs that are higher than the internal charges were
designed to cover. At the same time, reserves shouldn’t be
greater than the amount that would be covered by aggregate
stop-loss insurance. In practice, this can be a complicated
calculation, and many governments use a dollar amount
that’s equal to two or three months’ worth of claims as a rule
of thumb (in addition to the amount required for IBNR).
PUTTING IT ALL TOGETHER: INTERNAL
CHARGES, RESERVES, AND STOP LOSS
Exhibit 2 shows how internal charges, reserves, and stop
loss work together to create a sustainable plan funding strat-
egy. The chart shows the total cost of a self-insured plan as a
normal distribution, or bell curve. The actual cost of the plan
varies from year to year, but it is more likely to be closer to its
historical average than to deviate greatly (adjusting for medi-
cal inflation, which is substantial).
Internal charges are usually set to cover some amount that
is greater than the average costs, shown as a line in Exhibit 2.
After all, setting charges right at the average would leave a 50
percent chance of coming up short during the year. Reserves
serve as a backup in case plan costs exceed the amount that
internal charges cover. Reserves that are used in one year
will likely be replenished in successive years, as plan costs
will probably be less than estimated internal charges in sub-
sequent years. The line where internal charges are set can be
moved, based on how much money is currently in the reserve
and appetite for risk. For example, if reserves are low, tthe
Local governments should
form partnerships with third
parties (often, but not always,
private firms) that can support
the plan’s objectives.
October 2018 | Government Finance Review 17
line in Exhibit 2 could be moved to the right to increase the
odds that: 1) internal charges will be sufficient to cover the
plan’s cost, and; 1) charges will exceed the amount needed
to pay for that year’s service costs, allowing reserves to be
built back up. Finally, stop-loss insurance covers extreme
cases beyond reserves; it is not cost-effective for a govern-
ment to accumulate reserves large enough to cover the most
extreme cases.
CONCLUSIONS
Self-funded health insurance is a promising way for govern-
ments to have more control over the cost of employee health
benefits. However, managing a self-funded plan requires dis-
cipline in setting charges and reserves at the right level and
adjusting how the plan is operated in response to information
about plan performance. Verifying the plan against the smart
practices outlined in this article can ensure that self-insurance
remains a smart choice for your organization. y
Notes
1. The Kaiser Family Foundation and the Health Research & Educational
Trust Employee Health Benefits Survey 2010.
2. GFOA’s 2011 report, “Containing Health Care Costs,” showed that approx-
imately 40 percent of member governments are self-insured, compared to
59 percent of all private firms.
3. ROI figures include soft-dollar savings such as productivity gains and
reduced absenteeism. See Katherine Baicker, David Cutler, and Zirui
Song, “Workplace Wellness Programs Can Generate Savings,” Health
Affairs, February 2010.
4. For example, wellness programs are usually more effective at helping
people improve blood cholesterol, blood pressure, and blood glucose,
but less effective at weight loss. Steve Aldana, “5 Workplace Wellness
Statistics Every Employer Should Know,” WellSteps, January 10, 2018.
5. Xuguang Tao, David Chenoweth, Amy S. Alfriend, et al, “Monitoring
Worksite Clinic Performance Using a Cost Benefit Tool,” Journal of
Occupational and Environmental Medicine, Volume 51, Number 10,
October 2009. ROI figures often include soft-dollar savings like less sick
time used and higher productivity. Xuguang and colleagues cite the most
modest ROI figures; consulting groups and industry advocates cite higher
figures. Differences likely stem from differences in how ROI are
Exhibit 2: How Internal Charges, Reserves, and Stop Loss Work Together
to Create a Sustainable Funding Strategy
Frequency
Total Cost
Stop Loss Covers
Extreme Cases
Average Annual
Plan Cost
Internal Charges
Might Be Set to
Cover Up to Here
Reserves cover
cost in excess of
internal charges,
but before stop
loss.
Half of the time
cost will be less
than average.
18 Government Finance Review | October 2018
calculated (e.g., which benefits of clinics
are included in calculation and how they
are monetized) and the structure of the
clinics being evaluated.
6. “Employers Implement On-Site Health
Clinics to Manage Costs,” Hewitt Associates
LLC, August 2008.
7. Terena Bell, “Can Telemedicine Be Both
Cost Efficient and High Quality,” US News
and World Report, February 27, 2018.
8. Rajender Agarwal, Olena Mazurenko, and Nir
Menachemi, “High-Deductible Health Plans
Reduce Health Care Cost and Utilization,
Including Use Of Needed Preventive Services,” Health Affairs Vol. 36, No 10.
9. Samuel H. Fleet, “Self-Funding: Taking Control of an Employer’s Health
Benefits Destiny Under the Patient Protection and Affordable Care Act,”
Compensation & Benefits Review 43: 30, 2011.
10. A. Mark Fendrick, “Value-Based Insurance Design Landscape Digest,”
Center for Value-Based Insurance Design at University of Michigan,
July 2009.
11. Example taken from “Value-Based Insurance Design Landscape Digest.”
12. These programs are collectively known as “The Asheville Project.” They
were extensively studied and written about in the Journal of the
American Pharmacists Association. ROI
figures include soft-dollar savings (e.g., pro-
ductivity enhancements, less time off work).
13. Information from this section is from: Mark
Mack, “Controlling Health Care Costs with
Dependent Eligibility Audits,” Government
Finance Review, June 2015.
14. Research focused on the health-care firms
HMS, ConSova, and the Society for Human
Resource Management. See the following:
ConSova Resource Center — Dependent
Eligibility Audit Case Studies, January 1,
2010; Gary Claxton, 2014 Employer
Health Benefits Survey, September 1, 2014;
Healthcare 411, U.S. Department of Health and Human Services Medical
Expenditure Panel Survey; “Modest health benefit cost growth continues as
consumerism kicks into high gear,” Mercer, November 19, 2014; Stephen
Miller, “Health Care Savings with Dependent Eligibility Audits, Society
for Human Resources Management, April 19, 2009; and Understanding
Dependent Eligibility Audits, HMS, October 1, 2013).
SHAYNE KAVANAGH is GFOA’s senior manager of research. He
can be reached at skavanagh@gfoa.org.
A reserve provides a hedge
against the risk that a self-
funded plan is subject to. The
big question for all employers
offering a self-funded plan is
“How much is enough?”
Marc S. Nelson, MPA Thomas J. Roy, PE
Town Manager Director of Public Works
Town Engineer
DEPARTMENT OF PUBLIC WORKS
MEMORANDUM
To: Marc Nelson – Town Manager; Board of Finance
From: Thomas J. Roy, PE, CEM – Director of Public Works/Town Engineer
CC: Amy Meriwether – Director of Finance; Adam Kessler – Deputy Town Engineer
Date: May 18, 2026
Subject: SMPAC Band Shell Expansion – Project Update
The Simsbury Meadows Performing Arts Center Band Shell Expansion project, also known as
"The Next Act," has been actively under construction since October 2025. We are pleased to
report that the project remains on schedule for a completion date of June 30, 2026, just in time
for the Hartford Symphony Orchestra (HSO) season and the Celebrate America concert on
Friday, July 3rd.
Following the successful budget referendum on January 24th, the total project allocation is now
$3,170,881. After crediting $100,000 for the development of design plans, the funded budget
stands at $3,070,881.
Attached for your review is a summary of project expenditures to date, along with anticipated
costs to complete the project, excluding any future change orders. As of the end of April,
construction is 76% complete, and the project currently has $157,699, or 5% of its budget, in
unallocated funds. To date, the construction project has incurred seven change orders, totaling
$213,656. A summary of the change orders and proposed change orders (PCO’s) is attached.
CIP ‐ Bathrooms FY23 $ 350,000
DECD ‐ Urban Act Grant FY25 $ 900,000
Capital Reserve Fund FY25 $ 500,000
SMPAC Donation (Per 12/10/2025 BOF Meeting) FY25 $ 1,032,881
Capital Reserve Fund ‐ January Referendum $388,000 FY26 $ 388,000
Project Funding $ 3,170,881 100%
Paid or Contracted to Date Value Remaining %
SMPAC Design Cost* (100,000.00)$ 3,070,881$
Design/Bid/Grant Costs (32,713.67)$ 3,038,167$
Incidentals to Construction (79,464.00)$ 2,958,703$
Town Costs for Unsuitables (2,692.16)$ 2,956,011$
Contract Value (Millennium Builders) Bid + Alt. No. 2 (2,516,000.00)$ 440,011$
CO No. 1 ‐ Value Engineering 96,680.00$ 536,691$
CO No. 2 ‐ PCO 3r2, 4, and 5 (65,776.00)$ 470,915$
CO No. 3 ‐ PCO 7 (VE) & 8 (22,775.00)$ 448,140$
CO No. 4 ‐ PCO 9, 10, 11r1, and 12 (183,534.00)$ 264,606$
CO No. 5 ‐ PCO 13, 17, and 18 10,287.00$ 274,893$
CO No. 6 ‐ Schedule Only ‐$ 274,893$
CO No. 7 ‐ PCO 20, 21, 23r2, 24r1, and 25 (48,538.25)$ 226,355$
Cameras & Server (Three‐Way Communications)** (42,200.00)$ 184,155$
Sub‐Total (2,986,726.08)$
Current Funds Available 184,154.92$ 5.8%
In‐Process CO's / Additional Project Expenses Value Remaining %
Parking Lot Trench Paving (by DPW)** (5,000.00)$ 179,154.92$ 5.7%
New Hydrant** (3,966.00)$ 175,188.92$ 5.5%
Field Hydroseed (Due to time of year)** (2,980.00)$ 172,208.92$ 5.4%
POC 26 ‐ Credit for Bathroom Partition Change 490.00$ 172,698.92$ 5.4%
As‐Built Survey** (15,000.00)$ 157,698.92$ 5.0%
Sub‐Total (26,456.00)$
Funds Remaining 157,698.92$ 5.0%
Potential Future Work / Projects Value Remaining %
Replace Sanitary Sewer Pumps and Controls (12,000.00)$
Add Blinds / Window Treatments (7,000.00)$
Additional Signage (8,000.00)$
Sub‐Total (27,000.00)$
Funds Remaining 130,698.92$ 4.1%
*Accounts for unfunded portion of authorization
**Work done outside of contract with Millennium Builders
Updated May 14, 2026
Project Expenditures ‐ SMPAC Band Shell Expansion Project
Description PCO Status Revision Description Original
Increase/(Reduction)
Approved
Increase/(Reduction) CO#
VE Items Approved (96,680)$ (96,680)$ 1
Fire Separation Not Approved 209,088.00$
Sprinklers (Bldg. Only) Not Approved 207,647$
Sprinklers (Bldg. Only) - REVISED Not Approved Add Exit Signs & Wproof Outlet 204,347$
Sprinklers (Bldg. Only) - REVISED Approved Removed Site Work Which Became PCO-9 & PCO-10 67,353$ 67,353$ 2
Bottle Filler Approved 522$ 522$ 2
Stage Door Panels Approved (2,099)$ (2,099)$ 2
Doors 101A & 101B Not Approved 12,311.00$
VE Items Approved (8,000)$ (8,000)$ 3
Water Line Repl Approved 30,755$ 30,755$ 3
6" - Road to Hydrant Approved 107,586$ 107,586$ 4
4" Fire Svs Approved 45,141$ 45,141$ 4
TPO Roofing Approved 16,929$ 16,929$ 4
Add Back Siding Approved 13,878$ 13,878$ 4
Future Shower Approved 2,363$ 2,363$ 5
Add Tile Not Approved 3,019.00$
Add Plywood @ Shakes Not Approved 10,455.00$
Furring Sys. For AWP Not Approved 9,567.00$
Hardie Sub Approved (10,823)$ (10,823)$ 5
1" Rigid Ins. Approved (1,827)$ (1,827)$ 5
1/2" Rigid Ins. Not Approved
PRV Domestic Svs Approved 1,959$ 1,959$ 7
Backwater Valve Upgrade Approved 563$ 563$ 7
Add Roof Blocking Not Approved 3,372$
Fire Alarm System Not Approved 34,560$
Fire Alarm System - REVISED Not Approved Add Smoke 39,532$
Fire Alarm System - REVISED Approved Add Stage Pulls/Alerts 42,747$ 42,747$ 7
Ext. Camera Drops Not Approved 1,248$
Ext. Camera Drops - REVISED Approved Adds Cost Detail - No changes 1,248$ 1,248$ 7
Hand Dryer Elec. - Reduced by PBC Approved & Reduced 2,021$ 2,021$ 7
PCO-26 Credit for Toilet Partitons Waiting on Approval (490)$ 8
PCO-25
PCO-22
PCO-23
PCO-23r1
PCO-23r2
PCO-24
PCO-24r1
PCO-21
PCO-10
PCO-11
PCO-12
PCO-13
PCO-14
PCO-15
PCO-16
PCO-17
PCO-18
PCO-19
PCO-20
PCO-9
PCO #
PCO-1
PCO-2
PCO-3
PCO-3r1
PCO-3r2
PCO-4
PCO-5
PCO-6
PCO-7
PCO-8