FINANCIAL MANAGEMENT/Alliance gives counties new options

The Financial Services Center (FSC) of the National Association of Counties and Memphis, Tenn.-based Sedgwick have formed an alliance to provide insurance-related services to counties, county employees and retirees. Streamlining insurance services and providing new solutions to the risk problems faced by local governments are the core goals of the alliance.

The alliance, established in January, will be managed by an oversight committee that provides product development and testing, educational services to county clients, focused niche service, marketing coordination and nationwide distribution to gain economies of scale. County clients will be active participants in the development or modification of insurance products and services.

“This alliance is a true partnership between the public and the private sector to bring added value to the difficult issues facing risk management at the local level,” says Michael Hightower, president of NACo and a commissioner from Fulton County, Ga.

Sedgwick University, part of the University of Memphis, will provide research and training both to the alliance and to clients. The FSC will provide demonstration projects, access to county officials, training and focus group analysis.

The alliance will not compete with existing statewide pools that serve county governments. Instead, it will focus on working with state associations to enhance existing services and research and develop new products and services for counties, county employees and retirees with insurance needs. The alliance will use new product-distribution technology and the purchasing power of county governments to create cost-competitive products and a simplified purchasing process.

The two partners will provide a program for convenient acquisition of surety bonds for elected and appointed officials. Several products are also being considered for research and development, such as plans that would address the insurance and surety needs of minority- and women-owned businesses in gaining better access to county construction contracts; insurance to facilitate service provision through community-based organizations; and various products to address environmental management regulations and requirements.

Research and development and focus groups will be key components to the maturation of the alliance. The FSC already provides cooperative purchasing to counties and cities across the country, enabling significantly discounted pricing on a variety of commodities used by local governments. The center also provides tax-exempt lease financing services, employee supplemental retirement services and tax-exempt, post-employment health plans.

The center was developed after a series of focus groups NACo hosted across the country in 1994 to determine what types of services the association should be providing in the financial arena.

These focus groups, completed prior to the Orange County, Calif., bankruptcy, identified needs in financial management, institutional banking, municipal finance, employee retirement and insurance-related services. As a result, NACo created its financial center — a joint venture, public-private partnership — to help meet some of these needs.

This year’s new alliance has a long-term vision of challenging the methods that counties use to manage their insurance needs. This vision requires a long developmental phase, as well as a strong commitment to training and education.

The alliance aims to bring long-term savings to local governments while providing a more efficient and effective means of managing risk.

The author is managing director, NACo Financial Services Center, Washington, D.C.