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plan costs. Just last month, the City of Racine garnered headlines for planning to setthe premium shares of most of its employees at 7.5% and the shares of future hires at10%. Of course, all this time our active employees have been paying 15% of theirpremiums, so we’ve been ahead of the curve. Nonetheless, we believe that, because ofAct 10, we can achieve further savings by making some adjustments to the plan design,which we intend to implement next year.We recognize that, between having to contribute to WRS and receiving little or nothingin the way of a general pay increase, many of our employees have seen a reduction intheir take-home pay. By and large, they understand why this must be, and they haveaccepted it gracefully.But it would be unfair to ask those employees to bear the same changes in health careplan design as employees who make no contribution to WRS. For this reason, we maybe making health care plan design changes for many sworn officers of the Sheriff’sOffice that are different from those for our other employees.While we are working hard to control health care costs for our active employees—andwe intend to do more—the biggest health care cost spikes involve retirees. Based onrecent claims experience, our actuaries tell us that, for 2013, we should increase ourbudget for retiree health care by $2.4 million! That increase is equivalent to about 5% ofthe general countywide levy, and our total cost of retiree health care is equivalent toabout 1/6 of the levy.The irony is that the great majority of the covered retirees pay no more than 10% of thepremium, and many pay only 5%. Although we may not have the flexibility to changeplan design or premium shares for persons already retired that we have for activeemployees, we are carefully examining ways to control these costs to Racine Countytaxpayers, both now and in the future.As you know, 2011 was a good year for us. We saw a net surplus for Ridgewood andalso one for the rest of HSD, with a total for the county of about $3 million. As we aredoing for 2012, we intend to use a portion of the surplus funds to help offset 2013expenses. The fact is, we have to do so, if we want to keep the general countywidelevy from increasing. For example, the 2013 budget includes $500,000 from the HSDsurplus to help hold down HSD’s draw on the levy. And it includes $500,000 fromRidgewood’s surplus to help hold down the levy burden of healthcare increases forRidgewood retirees.I said that putting this budget together was more than just a challenge. In fact, it took alot of hard work. I want to thank the constitutional officers—DA Rich Chiapete, SheriffChris Schmaling, Clerk of Courts Rose Lee, County Clerk Wendy Christensen, CountyTreasurer Jane Nikolai, and Register of Deeds Tyson Fettes—for their unfailing spirit ofcooperation as we all worked together to find savings without cutting services.I cannot say enough about the department heads who work for me and the staffs thatsupport them. Without their determination to keep finding better ways to do things, we’dnever have been able to hammer out this budget.Of course, special thanks go to Finance Director Dan Eastman and his staff, especiallyKris Tapp, who is nothing short of indispensable. Though Kris never complains, Dan3