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Major change in workers' comp payments mean Massena, Ogdensburg will be hit with hundreds of thousands more in fees

Posted 7/11/17

By JIMMY LAWTON CANTON -- A major change in how workers’ compensation contributions are handled by St. Lawrence County will provide major savings for some communities, but a few will be dealt a …

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Major change in workers' comp payments mean Massena, Ogdensburg will be hit with hundreds of thousands more in fees

Posted

By JIMMY LAWTON

CANTON -- A major change in how workers’ compensation contributions are handled by St. Lawrence County will provide major savings for some communities, but a few will be dealt a financial blow.

St. Lawrence County will pay about $700,000 less toward the insurance program compared to the previous year, while the town of Massena will pay $962,000, a $700,000 increase over their current payment of $258,000. The Village of Massena will see a $155,400 increase from the current $168,900 to $324,300.

Ogdensburg, which has been struggling to make ends meet financially will pay about $200,000, more toward the workman’s compensation insurance pool.

St. Lawrence County serves as the administrator for workers for the self-funded workers’ compensation insurance for the vast majority of municipalities in the area. For the past few years the county has been working to establish a new algorithm for contributing communities based on actual claims and risk factors.

For decades communities paid 90 percent of their shares based on property value and 10 percent based on risk. Over the past three years the county has been adjusting the calculation to focus more on risk and actual claims. The county modified the formula to 70/30 then to 60/40. Currently the formula is 50 percent risk and 50 percent property value, but Monday legislators agreed to move to a 100 percent risk based-contribution.

St. Lawrence County Board of Legislators Chairman Kevin Acres says this system makes more sense as it takes into consideration actual claims and potential claims based on real numbers, rather than property value.

“Property value has no correlation whatsoever to claims,” he said.

Under the new calculation St. Lawrence County will save about $700,000 per year, but still remains the largest contributor to the $4 million fund with a $1.26 million share.

The majority of municipalities will see either no increase or decrease in contributions. The Town of Canton will see a drop in its contribution from $68,000 to $44,500. But the Village of Canton will see and increase from $74,000 to $84,000.

The Town of Potsdam will also see a drop in contributions from $104,600 to $64,000. But the Village of Potsdam will see and increase from $119,000 to $179,000.

Other towns such as Brasher will see a major reduction from $36,700 to $6,700. Lisbon’s share will drop from $71,000 to $44,000.

St. Lawrence County Attorney Stephen Button, who serves as the administrator of the fund, said he is hopeful the new formula will eventually drive costs down for all contributors.

He said the new risk-based model incentivizes municipalities to reduce claims, which will in turn reduce the share they are required to pay. He said it is likely that the new program will put a stronger emphasis on safety.

But for some municipalities the transition comes at a tough time. Ogdensburg’s contribution will jump by about $200,000 at a time when the city is struggling to reign in unexpected costs. City Manager Sarah Purdy said she was not yet ready to comment on the contribution formula as she has not yet had time to discuss the measure with the city council.

County legislators at a finance committee meeting Monday approved the measure, but will need a vote from the full Board of Legislators before it will take effect. However, the measure is likely to find support as the committee and the board are made up of the same members.