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LOCKPORT TO QUIT COUNTY POOL FOR WORKERS' COMPENSATION

The city joined the exodus from the county workers' compensation insurance pool Wednesday, but it didn't decide what form of insurance it will use instead.

The Common Council, at a brief special meeting, voted unanimously to inform the County Legislature that it will withdraw from the mutual plan at the end of the year. It was facing a Monday deadline to make that notification.

Corporation Counsel John J. Ottaviano and City Clerk Richard P. Mullaney recommended that the aldermen choose Self Funding of Williamsville to operate a self-insurance workers' comp plan for the city, but they did not ask for any action.

"It'll be at least another month," Ottaviano said.

The hang-up is what becomes of the city's currently open claims, called the "tail." The local law governing the county plan says any withdrawing municipality must either pay the county the estimated future value of those claims, or take them to its new plan and agree to handle them itself.

Ottaviano said the city wants to take such accounts with it to avoid paying a bill the county estimates at $1.88 million.

However, the amount of the claims the city would have to handle is open to interpretation. Ottaviano said he and Mullaney are estimating it conservatively at $1.2 million, but Michael P. Kirwan, president of Self Funding, estimated it at $977,819.

Ottaviano noted the "tail" doesn't have to be paid all at once if the city takes charge of it. It's an estimate of how much it will cost to pay benefits on the outstanding claims for years to come.

He and Mullaney said they'd rather recommend the purchase of a regular insurance policy, which would be cheaper and less work than self-insuring. However, the state hasn't established rules on whether the city could take the "tail" with it under formats other than self-insurance.

Self-insurance wouldn't save the city any money in the first year. It would cost $600,000, against $572,809 the county billed for 2002.

e-mail: tprohaska@buffnews.com

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