(Jan. 30, 2015) Steep increases in workers’ compensation costs, specifically within the Ocean City Police Department, are likely to be a major issue as the resort heads into the financial season.
Reports on the rising costs have made their rounds through City Hall ahead of spring budget sessions and negotiations with the Fraternal Order of Police, the city’s police union.
Ocean City government put away nearly a half-million dollars this fiscal year to keep up with police workers’ compensation and disability claims – some five and half times more than the city did in 2001, the year before collective bargaining was granted to police.
How much sway the FOP holds over the costs, however, has yet to be seen.
“As far as pressure from the town, I wouldn’t say that,” said FOP Lodge 10 President Shawn Jones. “As far as it being a contract issue, I don’t know. It’s nothing the union has been overly involved in.”
For those who are about to ask, the issue has little to do with Tasers, one of the city’s other police-related budget haggles.
While Tasers have saved a number of officers from getting in potentially harmful situations, and thus prevented further possible claims, the incidents that are forcing the city’s compensations costs upward are not Taser-preventable.
“There’s no doubt the Tasers have helped,” said Eric Lagstrom, the city’s risk manager. “But the claims that we are seeing go up are not what I would describe as ‘hand-to-hand’ situations between an officer and a suspect.”
Rather, for every incident resulting from pursuit or apprehension of a criminal, there are several more resulting from training injuries, freak accidents and chronic health problems.
For instance, in FY2014 (the last full fiscal year, running July 2013 through June 2014), OCPD personnel filed 40 claims worth $396,417.41. This includes lost wages, medical costs, disability awards, and reserves for projected future costs involving the claim.
Some of the more expensive incidents are related to physical apprehension of a suspect: for instance “injured shoulder during arrest” for $3,500.
But compensation for non-apprehension injuries makes up the greater part of the total: “brain injury while boxing at academy” for $18,500; “dog bite during K-9 training” for $20,125; “fell off horse” for $55,000.
For reasons of medical privacy, Ocean City Today is not privy to any details of the incidents beyond the line-item budget entry, nor would it share them if it were. Claims resulting from injuries during an arrest, however, are clearly denoted.
Payout on any individual claim is determined by a combination of standards set by state and federal law, as well as the city’s contract with the FOP.
In Maryland, employees are entitled to be paid normally for up to 40 hours of lost time. Past the first 40 hours, they may file to receive temporary disability wages of up to two-thirds of their average weekly wage (AWW), not to exceed the state’s overall average weekly wage. For 2014, this cap was set at $998 per week. AWW is calculated using the 16 weeks of pay preceding the injury.
Under Ocean City’s contract with the FOP, however, officers are entitled to receive their full wage for any length of time they are out of work, even past the 40-hour statute. This wage is taxable, however, whereas state-granted wages are not.
Additionally, employees may file for an ongoing stipend to cover continuing costs of dealing with an injury, as well as pain and suffering, even after they have returned to work. This weekly payment is known as Permanent Partial Disability (PPD).
PPD is typically expressed as a number of weeks for which a given injury can be compensated, per a table set by the state. Arm and leg injuries, for instance, can be compensated for up to 300 weeks, although the employer and the injured will typically compromise depending on the extent of the injury.
“For instance, if an employee were to come in and say their arm was 50 percent disabled, but our doctor believed they were 10 percent disabled, we may compromise and give them a 20 percent rating, which would be PPD for 60 weeks,” Lagstrom said.
PPD pay is dependent on the number of weeks covered. PPD of less than 75 weeks is one-third of the employee’s AWW, not to exceed $167. For 75 to 249 weeks, PPD is two-thirds AWW with a cap of $333. For spans of 250 weeks or more, the stipend is also two-thirds AWW, but with a cap of $749.
Here, as well, public safety employees are also given an advantageous position. Under Maryland law, the bracket for less than 75 weeks does not apply to public safety claims, meaning police officers will always receive two-thirds of their AWW regardless of how their injury is rated.
“Unionization has not had as much of an effect on the medical and lost wages,” Lagstrom said. “It has come down more to the PPD awards.”
Although the FOP is not directly involved, cases involving union members – nationwide – typically have much more horsepower when it comes to PPD claims, since the claimants have access to union lawyers.
“It’s something that, individually, the officers are dealing with our law firm that we use,” Jones said. “If someone is going to go into arbitration with the town over a case, we would need to decide if it’s going to be funded through the FOP versus somebody going into their own pocket to do it.”
This is not to say that officers don’t deserve the preferential position given to them under the city and state’s compensation laws.
“Is it the right thing to do, if somebody’s injured on the job, to make them whole? We’ll always argue that it is,” Jones said. “Unfortunately, we’re in a line of work where sometimes we get hurt. Departmentally, we train every year with our full-time and seasonal staff. But you can’t train in a vacuum and sometimes we do have injuries.”
Some of the OCPD’s largest claims, however,fall into the category of chronic conditions, which may be argued as having been work-related. Examples over the past five years include “coronary artery disease” at $85,000; “carpal tunnel” at $25,219.11; “stroke” at $57,212.05; “hypertension” at $22,961.37; and “hypertension” again at $20,026.66.
All of these claims were filed by full-time officers. Shorter-term claims are sometimes filed by seasonal officers, who are not part of the FOP.
Another major factor in rising compensation claims is being hurt by one’s own bicycle or K-9. Since FY 2010, $141,103.51 in claims has been made for 28 separate instances involving police bicycles, including falls and strains from lifting. Over the same period, $48,553.77 in claims has been made for 13 incidents involving police dogs, including bites, scratches, and trip-ups.
But in many years, data suggests that an accumulation of small-dollar value, less severe injuries is the driving factor. In the 2012 fiscal year, for instance, only seven of 54 claims resulted in lost time.
To give an example of the typical spread, these seven injuries were “sprained thumb during arrest” at nine days out and $6,207.30, not including back wages; “struck by vehicle during arrest” at 14 days and $33,125.00; “injured shoulder during arrest” at 74 days out and $51,134.85; “FX [fractured] wrist lifting bike” at 32 days and $25,737.95; “twisted ankle during K-9 training” at seven days and $1,860.60; “injured back during K-9 training” at two days and $1,862.11; and “carpal tunnel” at 22 days and $25,219.11.
This leaves the remaining 47 incidents, and roughly half the year’s total compensation cost of $294,739, being the product of growth in day-to-day claims that did not result in lost time.
Examples include “stepped off curb twisting ankle” at $2,421.54; “abrasions to knee during arrest” at $666.57; “bitten during arrest” at $363.72; or “struck head inspecting trailer” at $445.16.
Because many PPD cases are expected to span several years, the city maintains a reserve account to cover ongoing costs. Although the volume and value of individual claims fluctuates from year to year, the city periodically commissions an actuarial study to determine how much it should be allocating to keep up with long-term claim trends in each city department.
In 2001, the year before the FOP’s first contract, the city allocated $250,000 for future claims, of which $86,109, or 34 percent of the budget, was the result of police claims experience.
In the current 2015 fiscal year, the city is allocating $815,000 for anticipated claims, of which $492,591, or 60 percent, is for the OCPD. This rise far outstrips the national increase in medical costs, which averages five to six percent per year.
One of the most logical answers to the spike in compensation and disability is salary increases, since the lucrativeness of claims is based on pay.
In 2007, the OCPD saw its largest historical jump in single-year payouts, from $151,466.21 in FY 2006 to $272,237.30 in 2007.
This spike coincides exactly with the implementation of city pay raises under the controversial Hendricks Group pay study. That study revealed that, under overtime policies established in the FOP’s contract, the average sergeant in the OCPD would be making 22 percent of his or her annual net pay in overtime hours.
To compensate for this, the city then bumped the pay of lieutenants by 22 percent, and captains another 7 percent over that, so that sergeants would not be making more than their superiors simply by merit of union membership, causing a balloon in the top end of the city’s pay scale.
The OCPD’s budget for salary and benefits is estimated at $17,091,745 for the current fiscal year, versus $12,350,477 in 2006.