Most fire district employees to receive one-time payment of $924

Hilmer says district benefiting from workers’ comp changes

By Mike Anthony

The majority of Mehlville Fire Protection District employees will receive a one-time payment of $924 as a result of a surplus distribution from the district’s workers’ compensation insurance trust.

The Board of Directors voted unanimously last week to divide the $114,595.67 surplus evenly among the 124 employees who have worked for Mehlville for more than one year and are actively employed as of Dec. 30.

The $924 is based on a preliminary calculation, according to Chief Financial Officer Brian Bond, who noted that the one-time payment will not modify the district’s 2015 budget that was adopted earlier this month.

At the Dec. 17 board meeting, Bond said,

“… The Missouri Fire and Ambulance Districts’ Insurance Trust, who is the trust that we have our workers’ compensation insurance through, has approved a surplus distribution related to the years 2004 and 2005. That means there were some claims that were open that have been resolved to the point that now they’re able to close out those years.

“I realize it was a decade ago, but sometimes it takes awhile to resolve certain matters, not necessarily related to our district, but perhaps other districts that participate in the trust.”

Bond added, “This surplus distribution is the result of actual claims not exceeding the premiums that were charged for the respective years for all participants in the trust.”

In the past, Mehlville has received surplus distributions, he said, noting that from 1996 to 2013, the district received surplus distributions totaling $951,571.47.

Since 1996, the district’s workers’ compensation experience modification factor, which is based on claims submitted, has decreased to 0.95 from 1.25, Bond said. The experience modification factor is applied to the district’s annual preliminary premium, and increases or decreases the premium, he added.

“An experience modification factor of less than 1 discounts the premium, which is the current situation here at the Mehlville Fire District …,” Bond said.

The chief financial officer said the district’s 2014 and 2015 budgets did not include employee salary increases, other than step increases.

While both budgets projected surpluses, the surplus revenue was reserved for a variety of future expenditures.

“So our recommendation that we’re bringing forward to the board tonight is that since these surplus funds were not anticipated, it’s recommended that the distribution be passed through with the employees, who have not had any pay increases the past two years,” Bond said. “The payment will serve as an incentive to employees to continue their dedication to safe working practices …”

Board Chairman Aaron Hilmer noted that when he and board Treasurer Bonnie Stegman first ran for office in 2005, they questioned the need for Proposition S, a 33-cent tax-rate increase that had been approved by voters in November 2004.

Hilmer and Stegman ran a reform campaign in which they pledged to eliminate fiscal waste and roll back the 33-cent tax-rate increase.

During the process leading up to placing Proposition S on the ballot, district officials projected that workers’ compensation premiums would increase dramatically in the coming years.

For example, annual increases of 20 percent were projected for workers’ compensation and property insurance premiums. In 2004, the district paid $759,859.

Those premiums were projected to rise to $5,645,816 in 2015 — a 642-percent increase over the 2004 cost.

After taking office, Hilmer said reducing the district’s workers’ compensation premium became a priority. In December 2005, the board voted 2-1 to hire a consultant to assist the district in formulating new workers’ compensation guidelines and a minimum level of fitness policy.

Hilmer and Stegman voted in favor of hiring the consultant, while then-board Secretary Dan Ottoline was opposed.

Before that vote was taken, Hilmer noted that the district’s premiums for workers’ compensation had increased by more than $560,000 since 2000 — to $892,616 from $332,311.

As a result of the reforms enacted by the board, the district’s workers’ compensation premium is $567,000 for 2015 and $582,000 for 2014. Hilmer noted last week that while the district has reaped benefits from the changes to the workers’ compensation program, a big factor was also that employees bought into the changes.

“… We can only create policy. We can hire administrators to enforce it, but at some point the buy-in really helps, and I think we’ve had that. You can even call it a culture change,” he said. “So when (Chief) Brian (Hendricks) presented this to me, I thought it would be a good idea to say, ‘Hey, we did it, but we also had help along the way now so we could do that …'”