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HomeMy WebLinkAboutCS 43/01 -- REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: November 19, 2001 REPORT NUMBER: CS 43-01 SUBJECT: Establishment of Workers' Compensation Reserve Fund RECOMMENDATION: I. That Report CS 43-01 from the Director, Corporate Services & Treasurer be received; 2. Council approve the establishment of a Workers' Compensation Reserve Fund be approved; 3. The attached By-Law be read three times and passed; and, 4. The appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. ORlGIN: Director, Corporate Services & Treasurer - AUTHORITY: The Municipal Act, RSO 1990, as amended, Section 163 (2) and 252 Report to Council CS 34-01 FINANCIAL IMPLICATIONS: Based on Report to Council CS 34-01, the approval to transfer the Workplace' Safety Insurance Board (WSIB) funding from Schedule 1 to 2 will result in savings starting in the year 2001 and each year thereafter. These projected savings are estimated in excess of $190,000 per annum. The savings in 2001 will pay for the costs associated with the transfer and savings for 2002 and 2003 would be directed to this Reserve Fund to build up capital to pay for any catastrophic claim- related costs which may occur. EXECUTIVE SUMMARY: Not applicable BACKGROUND: - As discussed in Report CS 34-01, with increasing premiums of Schedule 1, there was a need to look into Schedule 2 as an alternative. Schedule 2 allows employers to more effectively control their WSIB costs and risks by implementing effective WSIB claims management and health and safety programs. With the present Schedule 1 plan, the City premiums payment to the Workplace Safety and Insurance Board (WSIB) is based upon a percentage of payroll expenses to cover pooled accident costs. With the conversion to Schedule 2 , the City will pay for individual accidents. The WSIB recommends the establishment of one or more reserve funds for it purposes. Therefore, it is also a good policy for the Council of the City of Pickering to establish Report to Council CS 43-01 Date: November 19,2001 Subject: Establishment of Workers' Compensation Reserve Fund Page 2 a Workers Compensation Reserve Fund. In the event of a catastrophic claim, the City will rely upon reserves and appropriate insurance policies to offset the excess costs of the claim. The anticipated savings from converting from Schedule 1 to Schedule 2, will be deposited in this fund for 2001,2002 and 2003. By 2004, once the reserve if fully funded, the savings will be transferred to departmental budgets. A more rigorous emphasis on pro-active health and safety measures and efficient disability management, to be paid for out of the savings, will enable the City to minimize the frequency and severity of accidents and illness on the job. This reserve fund will also finance the annual costs of insurance purchased and contribute towards the expanded health and safety program detailed in Report to Council CS 34-01. Costs of transfers incurred in 2001 will also be paid from this reserve fund. ATTACHMENTS: 1. Workers' Compensation Reserve Fund By-Law Prepared By: Approved/Endorsed By: - ~~ Caryn Kong Senior Financial Analyst ~r5~c> ---Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Recommended for the consideration of Pickering City Council Thomas J. Ouinn, Chief Administrative Officer - THE CORPORATION OF THE CITY OF PICKERING ---- BY-LAW NO. 5924/01 Being a by-law to provide for the establishment of a Reserve Fund to be known as the Workers' Compensation Reserve Fund. WHEREAS under The Municipal Act, R.S.O., 1990 as amended, Section 163 (2) and 252, the Council of the City of Pickering may establish and maintain a reserve fund for any purpose for which it has authority to expend funds. WHEREAS under the Workplace Safety and Insurance Act, 1997, Part Vill, S. 97, the Workplace Safety Insurance Board (WSIB) shall establish and maintain one or more reserve funds to pay benefits in future years in respect of claims for accidents that happen in a year. WHEREAS it is desirable for the City of Pickering to establish such a reserve fund for the purpose of paying for the initial costs of transferring from Schedule I to 2, to meet annual costs of insurance coverage, to access funds in the event of a claim, and to fund health and safety programs and other costs. WHEREAS the Council of the City of Pickering has approved the transfer of Workplace Safety & Insurance Board coverage from Schedule I to 2. - NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. The establishment of a reserve fund known as the Workers' Compensation Reserve Fund is hereby authorized. 2. The Workers' Compensation Reserve Fund shall consist of such annual savings as a result of the transfer from Schedule 1 to 2 in 2001, 2002 and 2003 and from time to time as the Council may approve together with the investments made and earnings derived there from. 3. The Workers Compensation Reserve Fund shall be used for the purpose of paying for the initial costs of transferring from Schedule 1 to 2, the annual costs of insurance coverage, contributions towards the expanded health and safety program, and the payment of claims and other related costs. 4. This by-law shall come into force on the date of its enactment. BY-LAW read a first, second and third time and finally passed this 3rd day of December, 2001. - CERTIJ39lDA TRUE COpy // / .:;7' "/ ,. , . .:; /;>, ( ; -'-7::';:::':"'~/ / / --~ 7...oI'r;:: l-'AVI ~:n .,.~. 1 uOR. CilyClerk un at Plckering ~~ Wayne Arthurs, Mayor ,/( ~ruce Taylor, Clerk ~ -~ :!HI." PHOTOCOPY CONFORMS :,:. r,HE ORIGINAL DOCUMENT ,', HICH HAS NOT BEEN ALTERED I .,NY WAY