April 17, 2014
Workers’ comp costs crimp county
Administrator calls for lifting cap on towns’ contributions to county-run plan
Cortland County legislators Wednesday discussed the best way to stem the rising cost of workers’ compensation claims, which are costing the county about an extra $37,000 this year.
The county has budgeted about $1.1 million in total workers’ comp claims and its share would be about $550,000 but because of two towns that are paying less than the amount they owe on their claims, the county’s actual share is expected to be about $587,000.
The Budget and Finance Committee discussed the problem and County Administrator Martin Murphy advocated for eliminating the cap on the amount that municipalities pay into the plan.
The county manages the plan, which covers the county and municipalities since the county is self insured and the county pays 50 percent of the total claim costs. But the problem is that some towns’ claims have driven their costs higher than the level they are capped at paying. The county pays the difference.
Sometimes this drives the county to dip into a diminishing reserve fund when the workers’ comp costs exceed the amount the county has budgeted for them for the year.
Murphy said he would not know until year’s end if the county exceeded its budgeted $1.1 million amount for total claims.
The amount municipalities pay is based on claims and assessments. Based on the 2014 assessment, Harford should be paying $57,406 but is capped at $30,000 and Homer should be paying $80,446 and is capped at $70,000, said Murphy.
The approximately $37,000 difference is picked up by the county.
If the county goes over budget or if it settles claims it dips into a reserve fund that is dwindling, Murphy said.
That fund has dropped from about $500,000 in 2010 to about $50,000.
Since the county is also up against a cap of 2 percent on tax levy increases yearly, paying extra money for workers’ compensation claims is just another fiscal obligation that cuts into services the county can provide, he said.
Murphy wants to eliminate that burden for the county by having the municipalities pay their total cost of workers’ comp claims so the county does not have to pay more than its 50 percent share.
But not everyone is convinced lifting the cap on towns is the answer.
Legislature Chair Susan Briggs (R-Cortlandville) said she is concerned the move could bankrupt the municipalities in the event of a catastrophe that could raise claim costs astronomically some year.
In the event of a fire, for example, if a firefighter is killed in a town, the town’s obligation is to pay out on workers’ compensation claims for that firefighter’s spouse for the rest of his life. This could result in very costly bills over time.
“So that’s why at this point I can’t support that without further discussion,” Briggs said. She wants the issue to be played out more at the committee level.
Budget and Finance Chair Kevin Whitney (R-Cortlandville) said it is premature at this point to react to Murphy’s idea. The committee will continue to discuss the issue of workers’ compensation and Murphy will be presenting on the topic at the County, City, Towns, Villages and Schools committee meeting at 6 p.m Wednesday.
Finance officials Wednesday also continued to discuss how they will pay for the approximately $1.3 million landfill capping project, whether to bond for it or pay out of fund balance, but came to no decisions.
Murphy wants legislators to tell him which projects will be bonded for this year so he knows the total figure that the county is likely to borrow this year. A $1.6 million bond anticipation note that could be rolled into a bond this year will likely have to carry over until next year since the county would have to decide by May to turn that into a bond, he said.
County legislators are putting off the decision of whether to add the landfill capping project to a larger bond package or to take the bulk of the funds from fund balance once they are satisfied that fund is at a healthy enough level.
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