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88-1899 WMITE - CITV CLERK PINK - FINANCE GITY OF SAINT PAUL Council CANARY - �EPARTMENT File NO. � -1��9 BLUE - MAVOR Council Resolution ��} �- Presented By � eferred To Committee: Date �� Out of Committee By Date WHEREAS, The Risk Manag ment Division h$s been rei�►bursing CIS fqr servi�es Dave Dahl, a computer programmer, has rendered� to the workers compensation automated information system, and WHE$EA$, ,�he workers' compensation in�ormaG�pn system will ��ow the Ci�y �o a�locate costs in ordeilto8imp�ementeprogramsetobe�fectively reduce�those�lossesrand,° high oss WHEREAS, Th gisk Mana ement Division estimates a�other 240 hpurs,of pro xammin at a cost of $6,�00 are needed to complete the workers s compensation informa�ion sy�tem and WHEREAS, The Mayor, p�r�su�nt to Sect�on,10.07.1 of t$e City Char�te , does �ertify inatheh��88�udget;lande or appropriation revenues in excess o t�iose estimated WHEREAS, The Mayor recommends the following changes to the 1988 budget: Cu rent Am nded FI�TQ�iCING PLAN __Bu�get___ __Changes_ __Bu�get__, UU1 G a1 Fund �� pse of Fund Balance, Unreserved 273,665 6,000 279,665 ndesi nate� , 11 Ot�ier Financing � 118,761,406 0 118,761,406 ------------ ------------ ------------ SP��ING PLAN I19,035,071 6,000 119,04T,071 Ger�eral F nd F�nance � Mana em�nt $ervices Ma�a emen� DivisiQn �� _�t�$�c Management 5er�ice� U ly Fees-OGher Pro essional Services 5 ,�y 6,00g 5 , All OthereSpen�ingng 118,50�;8�� 0 118,5��; ------------ ------------ ------------ 119,035,071 6,000 119,U4].,071 NET CHANGE 6,000 RESOLVED, That the City Council approves these changes to the 1988 budget. Approv Re mmended �--- ��_lt/��---- Budge Director COUNCIL MEMBERS Requ ted by Department f: Yeas Nays /, Dimond � (�,� Lo.� In Favor �1ance an gement ervices Goswitz O U:amend7.wk� Rettman sche;n�� _ A ga i n s t BY Sonnen Wilson DEC 2 ? � Form Appro d by Ci Att y Adopted by Council: Date Certified Passe '1 Sec ar By ��C %. By / Approved b avo • _ DEL ? ? � Appr by Mayor for Submi ion to Council By - By `��°�.�� Ba / 1 , • _ � . � . ,_., •�T� �.., ��'-��9 :�. CITY OF SAINT PAUL INTERDEPARTMENTAL MEMORANDUM T0: Greg Blees FROM: Ron J . GuiYfoile .. � i'' DATE: October 6 , 1988 RE: Budget Transfer Request Approved: Eugene Schiller 'lerry Haltiner and you recently �uet to discuss his August 25 , 1988 memOlandu�n to LeeAnn Turchin regarding workers' compensation expenditures . You indicatec:l on that memorandum (copy attached) tha[ you approve of continuing ltisk Managenient's contract with Dave Dahl, computer progranuner, for completion of tlie workers' compensation automated inforination system. Mr. Dahl is currently a teinporary employee in CIS . Greg Haupt is willin�; to ullow Mr, lluhl to continue his work for the Risk Manageinent llivision if Greg can continue to bill Risk Management for the appropriate portion of Dav� llahl' s services. The estiivated cost to Risk Management for coiupletion of the workers' compensation information systeia is $6,000. Unfortunately, niy Division does not have the funds available to contii�ue Mr. Dahl's services. •As you ure aware, I have had to couunit funds to Licensin�; this year. This conunituier►t was not planned and we are �;oin� co r�eoup ,ibouc 75% of what we spent if the recent budget transfer request approved by you is also approved by the Council. In adclition, with the foru�a�iun of the Labor/Management Conunittee by the Mayor in October of 19�7 , ancl witti Risk hlanagement staffing and supporting this Conuuittee, othcr unpla�inecl expenditures had to be made. Althou�h the expenses were uiinimal ($1 , 500-$2,000) in comparison to the City budget, they wer� major when compared to my budget. I aiu not in a financial situation where I can continue Mr. Dahl' s services without additional funds. Six thousand dollars would provide for 240 hours of Mr. Dahl's time, an amount we feel would allow for completion of thc project. 'rhe return on this investmenc has gr�:at potential, The workc.rs' compc:nsatioii information system will allow us to allocate costs to incli.viQual dc:partin�n�s , require these departir�ents to control costs, identify specific areas of hi�;h loss and implement programs to effectively reduce losses . Please inform m� of the direction you wish ►n� to take . Thank you. kJG: lm , � • . . �_ c � v;;A; �� . � ��g! . ' :�•` v� � CITY OF SAINT PAUL �ECEIV�D INTERDEPARTMENTAL MEMORANDUM . ��G � G 19s8 � �St��t;El i�F�fC� T0: LeeAnn Turchin I'ROM: Terry Haltiner " I N DATE: August 25, 1988 RE: Workers' Compensation Costs Tom Gillen recently released a memo stating that total expenditures for workers' compensation in the first six months of 1988 are 23% higher than for the comparable period of 1987 . I have met with Tom and reviewed the experience to dete nnine the cause of the increase. Claims payments, special fund assessments and WCFtA premiums have all increased by varying amounts . The WCRA premium change accounts for 13% of the increase. Therefore, this is the piece which has the least impact. It is also the piece over which we have the least control since it is based on payroll by job classification. The increase in claiin payments accounts for over 63% of the change. Obviously this is the largest portion of the increase. This is the piece which needs the ruost analysis . Unfortunately, our method of accountinb for workers' compensation expenditures distorts the true picture of 1988 experience. This is because we are including payments and settlements made on old claims . For example, this year we have paid approximately $75,000 on claims witti injury dates before 1970. Only 17% of the payrnents over $1,000 were for claims incurred in 1988 . Bccause of this methodology we cannot tell if our workers' compensation situation is improving or deteriorating. A good example of this distortion occurred this year. Tom Gillen arranged for a structured settlement on a claim from an injury in 1982 , ctie settlement cost the City $29,000 but in the long run constitutes a $7,000 savings . 1'1�is was e�:actly what Torn should have done, but under our methodology it makes the loss data for 1988 look worse. This puts us in a situation where claims settlements have gone up in 1988 but a large portion of the payuients are for injuries which occurred in previous years. This does not tell us if the cost of injuries in 1988 are going up or down. The third part of the increase is in the special fund assessinent. This is charged as a percentage of disability payments made and accounts for 24% of the increase. This increase was caused by a combination of a 24% increase in the rate and a 38% increase in the disability payments to which the rate is applied. The increase in the rate is beyond our control and the increase in the disability payments is, to a large extent, due to injuries in the previous years. . � \ I � � 2 0 ��.�- rSa?�-�. r� —3-� 1 � . > � ♦ ' � �`/�� LeeAnn Turchin Page Two August 25, 1988 With the completion of the workers' compensation database and the implementation of the cost allocation system, we will be able to do a much more extensive analysis of workers' compensation experience. We set up true loss reserves so that losses are recognized in the year the injury occurred. For example, with the structured settlement a reserve would have been established in 1982 for approximately $35,000 and the loss charged to that year. In 1988 a payment is made for $24,000 but the $35,000 reserve is eliminated. Thus the net effect of the structured settlement in 1988 would be positive. Unfortunately, work on the database has been slowed because of the large amount of staff time directed towards other projects. Tom Seltz, an intern in our office, was tc have spent most of his time on this project but ended up spending his time working on the License Division project. I also lost time on workers' compensation due to the health insurance bidding process. In essence what this means is that we will need more time from Dave Dahl, our contract progranuner. I feel that an additional 240 hours froin Dave would help get us up and running. This would cost approximately $6,000 which is about 2% of the increase in workers' compensation cost over six months. It seems that this one time expenditure would be well justified by the current data. As far as this years budget is concerned, the first half expenditures have used up 62% of the 1988 budget. Tom Gillen feels that expenditures will not be as high in the second half because he does not see as many settlements of old claims coming through as he did in the first half. If you have any question, please call me at 6240. TH:lm cc: Tony Ackermann Greg Blees Tom Gillen Ron Guilfoile Eugene Schiller Frank Villaume � , . . ��''/ • � � . .� . .�° �12D1 , Finance & Mana.geme�t ServicesDEPARTMENT • , Ron Guilfoile CONTACT NA1� 292-6240 PHONE � 11 15 DATE ASSIGN NUMBER FOR BOUTING ORDER: (See reverse sida.) �'r Department Director 4 Mayor (or Aasistant) �,Finance and l�anagement Services Director 5 City Clerk udget Director City Attorneq _ TOTAL NtJMBER OF SIGNATURE PAGES: 1 (Clip all locations for signature.) WHAT WILL BE ACHII:QED BY TAKING ACTION ON THE ATTACHED MATERIA�SY (Purpose/Rationale) Allows Risk Management to dontinue reimbursing CIS for services of Dave Dahl, camputer progra er, for 240 additional hours. at the cost of $6,000 to complete the workars' compensation automate informa'tion system. Money is not available in Risk Ma.nagement's 1988 budge��E�p ��::•�� `'e��arch Center, ��u V 10198g NOV 161988 MAYOR'S OFFICE COST/BENEFIT, BUDGETARY. AND PERSONNEL-IMPACTS ANTICIPATED: Pro�ect has citywide benefit. Workers' compensation information system will allow the e�:ty t allocate costs to individual departments and enable indentification of spec�fic areas of high losss in order to implement p'rograms to effectively reduce those losses. Financing plan increased $6,000 through Use of Fund Balance, Unreserved, Undesignated. Spending authority in Risk Management Services increased $6,000 to buy 240 additional hours o programming. � Services are contracted, no addition of FTEs. , FINANCING S4�CL AND BUDGET ACTIVITY�NtTMBER CHARGED OR CREDITED: tMayor's signature not required if under $10,000.} Total Amount of Trans�ction: $6,000.00 Activity Number: 01370 Funding Source: 9890 Use of Fund Balance, Unreserved Undesignated � REt;�iVED ATTACHMENTS: (List and number all attachments.) 1. Resol�tion NOV 16 1�8$ 2. Guilfoile request to Blees on 10-6-88 for budget amendment BUDGET OfFICE ADMINISTRATIVE PROCEDURES Yes No Rules, Regulations, Procedures,. or Budget Amendment required? =Yes ,,_No If yes, are they or timetable attached? DEPARTMENT REVIEW CITY ATTORNEY REVIEW _Yes No Council .resolution required? Resolution required� _Yes _N ` _Yes _No Insurance required? Insuzance sufficient? _Y.es _N ; Yes No Insurance attached? � � �� .� ��r•�� _ �� /�-/9 -�� 2t3. Resolution 88-1896 - amending the 1988 budget by Approved as adding $30,800 to the Financing and Spending Pians amended for Executive Administration Personnel Office. (Referred from Councii December 1 ) 29. Resolution 88-1898 - amending the 1988 budget by Approved adding $2, 139 to the Financing and Spending Plans for Personnel Office Special Projects. (Referred from Council December 1 ) � 30. Resc►iution 88-1899 - amending the 1988 budget by ��p�d adding �6,000 to the Financing and Spending Pians in fin�nce and Mar�ageu�r►� Services Risk Management. (Referrei9 �"i�om ��i 1 Decert�er 1) 31 . Resolution 88-1918 - adopting the St. Paul Capital Laid over Allocation Folicy for the years 1990 through 1994 to 1-9 and transmitting it to neighborhood contacts. Long Range CIB Committee and its task force, the Planning Corr+mission and City staff. (Laid over December 12) PERSONNEL 32. Resolution 88-1858 - approving by the Mayor the Approved appointrnents of persons listed to serve on the St. Paul CIB Committee. (Laid over December 12) 33. Resolution 88-1948 - establishing the rate of pay Laid over for Municipal Equipment Coordinator in Grade 07, to 1-9 Section ID3 of the Professional Non-Supervisory Standard Ranges in the Salary Plan and Rates of Compensation Resolution. (Referred from Council December 13) 34. Resolution pertaining to Fire Chief selectian process. Approved