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Thursday, March 22, 2012

Workers' Comp Changes Benefit MFPD, Taxpayers

Executive Editor - CALL NEWSPAPERS

March 21, 2012 - When Aaron Hilmer and Bonnie Stegman first were elected to the Mehlville Fire Protection District Board of Directors in April 2005, the district faced a myriad of fiscal problems.

As we've noted before, they foresaw the impending implosion of the unfunded liability of the district's employee pension program and had the political courage to change the defined-contribution plan to a defined-benefit plan. Calculations performed about a year ago found the old pension plan's unfunded liability would have totaled nearly $18 million if the plan hadn't been changed.

But Hilmer and Stegman also saw the escalating cost of the district's workers' compensation program.

As recently reported to the board by District Clerk Carla Juelfs, workers' compensation reforms enacted by district officials have resulted in the district's premium decreasing by more than 52 percent since 2005.

The district's workers' compensation premium totaled nearly $900,000 in 2005. This year, the district is paying $425,000 for its premium — a decrease of roughly $475,000.

Juelfs attributed the decrease in premiums and the district's loss experience to new policies established by the board and other changes made by the board and administrators.

In 2005, the board voted to hire a consultant to assist the district in reducing workers' compensation costs.

Shortly after hiring the consultant, the board voted to adopt a new workers' compensation policy.

Consider the potential for what the district's workers' compensation premiums could have been given the fact that premiums increased more than $560,000 from 2000 to 2005 — to $892,616 from $332,311.

In 2004, the district's workers' compensation and property insurance premiums totaled nearly $760,000.

That same year during the Fire District Advisory Committee for Tomorrow's Emergency Services, or FACTS, community-engagement program, participants were told to anticipate 20-percent annual increases for those combined premiums.

In 2015, workers' compensation and property insurance premiums were projected to cost $5,645,816 — a 642 percent increase over the 2004 cost.

In a March 2 memo to Chief Brian Hendricks and the board, Juelfs wrote: "The Board of Directors must be applauded for creating new policies necessary to elicit change."

Well said. Without those reforms, the cost to the district — and its taxpayers — would be staggering today.

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