April 21, 1998

To:Strategic Policies and Priorities Committee

From:City Clerk

Subject:Workers= Compensation - Transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2.

City Clerk

Barbara Liddiard/rc/cp

Item No. 21

Attachment

 c.Chief Financial Officer and Treasurer

Chief Administrative Officer

Mr. Al Shultz, Finance Department

(Report dated April 16, 1998, addressed to the Budget Committee from the Chief Financial Officer and Treasurer)

Purpose:

The purpose of this report is to propose a recommendation to create one uniform Workers= Compensation funding mechanism for the Toronto Public Library Board, as required by Workplace Safety and Insurance Board.

Funding Sources, Financial Implications and Impact Statement:

The cost of the transfer to Schedule 2 is $478,094.86. The cost of this transfer was included in my report of April 3, 1998 on preliminary transition projects. Payment from the Workers= Compensation Reserve Fund would be repaid from the expected savings. There is no impact on the 1998 Operating Budget.

Recommendations:

It is recommended that Council authorize the Chief Financial Officer & Treasurer to remit immediately to the Workplace Safety and Insurance Board the amount of $478,094.86 in satisfaction of the transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2 pursuant to the Workplace Safety and Insurance Act.

Discussion:

The Workplace Safety and Insurance Board requires that when public sector organizations amalgamate and they previously had components in Schedule 1 and Schedule 2, they must convert entirely to Schedule 2.

Under the Workplace Safety and Insurance Act there are two funding arrangements for employers.

Schedule 1 employers are collectively liable for paying the costs of workers= compensation claims. These employers are assessed within their rate groups and pay an annual Apremium@ for coverage of all claims incurred. They are subject to an experience rating program which results in refunds or surcharges depending on claims performance.

Schedule 2 employers are individually liable for paying the costs of workers= compensation claims. Schedule 2 employers self-insure the risk of their claims, paying the benefits as they arise, plus an administrative fee (presently 15%).

Since costs under Schedule 2 are related to claims incurred, savings are obtained from good heath and safety and rehabilitation programs. It is anticipated that savings will accrue to the Library Board each year.

The Library Board does not have the necessary funds to cover the transfer fee expenditure and has requested the City to pay the transfer charge on behalf of the Board. This payment would come from the City=s reserve fund and would be repaid by the Board out of future years= savings.

Conclusions:

 The transfer to Schedule 2 for the amalgamated Toronto Library Board is required under the Workplace Safety and Insurance Board. The Workplace Safety and Insurance Board has requested that the fee for the transfer be paid immediately. It is recommended that Council approve the expenditure and that the City make the payment on behalf of the Library Board and that the Toronto Library Board repay the amount from future years= Workplace Safety and Insurance savings.

Contact:

Al Shultz-416 397-5240

Finance Department