City & School System Learned How to Save $1.1M in First Contract Year
Significant cost-savings enough to fund up to 20 new teaching positions.
After an open bid period and exhaustive review process, UTCA was selected to tailor an unemployment cost reduction program fitting the needs of both the City of Springfield, Mass. and the Springfield Public School System. Having overcome Finance Control Board governance in 2009, the Springfield tornado, a devastating October snow storm and a large gas explosion, the City needed to tighten its purse strings — and quickly. Key public works projects were long overdue and funding education programs was a priority. In its first contact year, UTCA reduced total claim payments by 51%, equating to over a $1.1m cost-savings. And that was only the beginning.
- FY 2013 includes $651,080 prior to contract charges (58%). UTCA was not able to protest this category of charges.
- Total Charges were reduced from $2,283,345 to $1,121,808 (51%) in the initial partial contract period. Total Reduction: $1,161,537.
- In FY 2014, charges were reduced to $1,012,754. A (55%) reduction over previous vendor service. Total Reduction: $1,270,591
- FY 2015 closed with $910,102 in Total Benefit Charges. A (60%) reduction over previous vendor service. Total Reduction: $1,373,243
- Claim volume increased 10.1% from FY 2014 to FY 2015 while charges were under $1 million.
Benefit Charges Paid ($)
Chart by Visualizer
In the Mayor’s Fiscal Budget Address, the reduction of unemployment spending was specifically cited as a contributing factor to the City’s ability to provide their employees high-quality City benefits at low rates. This was also a factor in the City’s upgraded Bond Rating.
UTCA: Making the Grade
- Before UTCA’s new process and communication protocols were implemented, a complete assessment of the City’s previous program structure was conducted.
- Once adopted, the new program and protocols were shared with all Department Heads and HR users.
- Looking for “extra credit” (and savings), UTCA guided the City on the most effective and proper use of Reasonable Assurance laws. Savings forfeited with their previous vendors were captured. These measures stopped invalid claim payments to vacationing employees assured of returning to work in the fall.
- Encouraged by their “achievements,” the City worked closely with UTCA to implement custom management reporting and periodic feedback sessions. Cost-generating areas were quickly identified and solutions applied to further improve outcomes and maintain program integrity.