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3 <br /> <br />Insurance and Retirement - 429 <br />Acct. #25, Insurance and Bonds <br />This deficit is entirely due to cost of workers compensation. First, an <br />error was made in budget projections where the annual dividend received <br />from workers compensation was deducted from premiums to be paid; <br />however, this revenue would be placed in the revenue account and our <br />accounting system would not back it off from expenditures. The audit for <br />workers compensation for 1976 has not yet been conducted so we do not <br />know the amount of dividends we will receive. <br />Second, workers compensation insurance increased substantially during <br />1976. Workers compensation_ratesare based on rates by job classifications <br />as established by the State. These rates increased substantially and <br />therefore, our premiums increased substantially. <br />Third, a factor is used in computing workers compensation premiums called <br />the Bureau of Experience Modification. The B.E.M, is based on the ratio of <br />claims to premiums paid. This rate ,increased for the City during 1976 and <br />thereby increased premiums over that which was estimated. <br />Lastly, we would note to the Council that there may be need for additional <br />ransfers at the last meeting in December. This would be based on unanticipated <br />ccurrences between now and then. Based on current estimates, the above <br />ransfers whould be sufficient. The only exception to this might be -the <br />elf-supporting account in the Park Department whose expenditures may exceed. <br />he author ized level; however, in this case it would not require a transfer <br />from Contingency since additional revenue would offset this amount. <br />~~~ <br />Thomas F. Lewcock <br />City Manager <br />