Consent 1.I.
Regular City Council Meeting
- Meeting Date:
- 02/24/2014
- TITLE
- MMIA Workers Compensation Program Agreement Amendment
- PRESENTED BY:
- Bruce McCandless
- Department:
- City Hall Administration
Presentation:
PROBLEM/ISSUE STATEMENT
The City of Billings has been a member of the Montana Municipal Interlocal Authority (MMIA) since the group's beginning in 1986. The entity is established through an Interlocal Agreement that all member cities adopt. The members pool their resources and share risks encountered by all cities. MMIA operates four programs; liability, workers compensation (WC), property and employee health. Each program's terms and conditions are established in Program Agreements. Billings is a member of the liability and WC programs, so it has previously approved those program agreements.
The MMIA Board of Directors recently approved an amendment to the WC program agreement. The amendment allows the Board to establish a number of financial performance targets, which should produce even more predictable and stable rates than in the past. It also allows MMIA to calculate each member's assessments and losses independently from the group and offer refunds or require additional assessments, depending on whether the calculation shows a positive or negative account balance. These are called retroactive, or retro, calculations. It is a feature of the Liability program under which MMIA returned $1.5 million to member cities last year, including about $300,000 to Billings. In order for the Board approved policy to go into effect by July 1, the beginning of the program year, a majority of program members must adopt the new program agreement. The attached resolution adopts the amended WC program agreement.
The MMIA Board of Directors recently approved an amendment to the WC program agreement. The amendment allows the Board to establish a number of financial performance targets, which should produce even more predictable and stable rates than in the past. It also allows MMIA to calculate each member's assessments and losses independently from the group and offer refunds or require additional assessments, depending on whether the calculation shows a positive or negative account balance. These are called retroactive, or retro, calculations. It is a feature of the Liability program under which MMIA returned $1.5 million to member cities last year, including about $300,000 to Billings. In order for the Board approved policy to go into effect by July 1, the beginning of the program year, a majority of program members must adopt the new program agreement. The attached resolution adopts the amended WC program agreement.
ALTERNATIVES ANALYZED
The City Council may approve or not approve the amendment. The amendment requires that a majority of member cities approve the revised agreement before it becomes effective, therefore, it could go into effect in July without the City of Billings approval.
FINANCIAL IMPACT
There may be no financial effect, depending upon the City's future WC claims. Billings has consistently had one of the lowest experience ratings in the pool, which should yield more retro refunds than assessments. Savings and expenses are allocated to each City department based on payroll and claim expenses.
RECOMMENDATION
Staff recommends that the City Council approve the attached resolution which adopts a new MMIA workers compensation program agreement.