ADMINISTRATIVE REPORT
DATE: July 10, 1996
TO: Vancouver City Council
FROM: Manager, Occupational Health, Safety & Rehabilitation, Human
Resource Services in consultation with the Director of Finance
SUBJECT: Occupational Health and Safety - Activity Update
INFORMATION
The City Manager notes significant achievements have already been
made in reducing WCB costs and submits this report for
INFORMATION.
COUNCIL POLICY
On June 2, 1994 and March 7, 1995, Council approved the following:
- re-focusing of OH&S activities based upon a City-wide Task
Force at an annual on-going cost of $414,000;
- supporting the principle of expanding OH&S activities as
necessary funded by savings in WCB costs subject to Council's
approval;
- allocating up to $600,000 to fund transitional work
opportunities for employees who are temporarily disabled.
The source of these funds are $300,000 from long term
disability reserves and $300,000 from reduced WCB
assessments. The cost of activities in both of these reports
were at no net cost to the City.
SUMMARY
City Departments have been working to change their OH&S programs to
meet recommendations made in the 1993 Task Force report. Activities
for the past two years have included: working with front line employees
through a number of processes giving them more control over OH&S
activities, re-focusing the City's claims management efforts,
implementation of a comprehensive rehabilitation program, and
amalgamation of OH&S staff and activities throughout the City.
Results of these and other training initiatives have achieved, from
1994 to 1995, a 16% or $650,000 reduction in WCB wage loss, 13%
reduction in reportable claims, a $378,000 reduction in WCB assessment,
and a reduction in the WCB wage percentage of the City s total payroll
from 1.7% in 1993 to 1.0% in 1995.
The Transitional Work Fund established by Council for modified work for
temporarily disabled employees was necessary to get our rehabilitation
efforts off the ground. The modified work assignments enabled
departments to have valuable work performed as well as boosting the
morale of the employees involved. The intention of this fund is to
establish practices and eventually have the departments fund this work.
Of the approved funds for WCB return to work, $200,000 remains. It is
desirable to expand the rehabilitation program to include short-term
disability absences in 1996.
The savings gained by these programs ultimately reduce our overhead
costs of operations. As this is a new program, yearly cash pay-back
savings will be the norm. At some point, the yearly savings will
plateau and provisions will have to be made to keep these programs in
place. These programs are necessary for City operations to remain
competitive and to help us avoid increased costs in the future.
PURPOSE
This report updates Council on the implementation of our re-focused
occupational health and safety activities.
BACKGROUND
In March of 1994, Council approved funding to re-focus the City
Occupational Health and Safety Activities based on a 1993 Task Force
report. In May of 1994, Council also approved creating a one-time
Transitional Work Fund. The cost of both of these programs was to be
offset by reduced WCB assessments starting in 1997. This report
details the results of those two reports. Of the 29 recommendations in
the Task Force report, 27 have been implemented. The City s WCB costs
have improved due to the coordinated efforts of all departments. In
fact, results have occurred sooner than anticipated. Our experience to
date is:
1. The City reduced its 1995 WCB Assessment by $378,000.
However, because the WCB raises the earnings ceiling each
year, the net savings in 1995 was $150,000. We predict the
same for 1996 and 1997;
2. The 1995 Actual WCB Wage Loss reduction from 1994 is
$646,000(16%);
3. 1995 WCB Loss of Earnings Pension (cost of employees with
permanent restrictions) has been reduced by $11.9 million
dollars from 1994 due to placement of these individuals in
the City system.
4. The number of lost time accidents has been on a steady
decline since 1991; the 1993 to 1994 reduction was 9%, and
1994 to 1995 reduction was 13%.
Our approach is to develop and implement a contemporary Occupa-tional
Health and Safety (OH&S) Program that both lowers costs and focuses
efforts and accountability on the work group. The new program combines
and reflects Council s priorities for effective service delivery and
fiscal responsibility. The activities that the City has undertaken to
make reductions are beginning to have effect. The same principles used
to create this trend have been applied to our Long Term Disability Plan
with similar results. We intend to apply the same principles to
non-WCB related injuries and illnesses in 1996, as will be approved in
a report to be submitted in future.
DISCUSSION
WCB assessments are a cost of doing business in British Columbia. The
WCB Experience Rating Assessment (ERA) system provides finan-cial
incentives to employers for developing safety programs and paying
attention to claims management. The ERA system is being reviewed by the
WCB and will most likely be changed in 1996 or 1997 to take into
account pro-active activities of employers. The history of the City s
WCB assessment (provided by the WCB) for the last 5 years is:
ERA (%) Wage loss claims Assessment
1991 11.7 *$3,850,192 $4,081,348
1992 13.6 *$4,062,699 $5,506,475
1993 14.5 *$4,921,904 $6,441,065
1994 14.5 *$3,556,419 $6,951,963
1995 14.5 *$3,343,523 $6,819,279
1996(projected) 15.0 N/A $6,350,000
* Includes wage loss and pensions but not medical or rehabilitation costs
This does not include reductions anticipated due to the transfer of the
Health Department to the Vancouver Health Board. Antici-pated
reduction in WCB assessment from this transfer is $500,000. The
projected reduction for 1996 is due to reduced WCB claims costs in the
previous two years.
Preventing accident and injury is the main area of activity for City
departments as it yields the best return in the long run.
Each department is developing an OH&S program to fit their needs. The
downside to these efforts is that the financial return is 7 to 10 years
in the future. Each department is developing broad-based best
practices that build and learn from prior steps in the process.
Effective OH&S systems are not static. They must grow and change with
the organization. Building safety cultures is a difficult task. Such
a culture must be able to respond well to the immediate requirements of
regulatory bodies as well as propel the organization towards its
desired future.
The pro-active approach being undertaken is geared toward developing a
work environment where motivation comes from the work group. The
organization plays a constructive and supportive role to the work group
in assisting its members to achieve their OH&S goals and objectives.
This must occur within regulatory, union-management and corporate
frameworks.
The 1993 Task Force report defined seven areas to review with the aim
of redesigning our processes. The status of each area is outlined
below.
1. Focusing OH&S Activities on the Work Group
Numerous pilot processes were developed to assist work groups in having
more control over OH&S activities that affect their jobs. The pilots
are designed to generate best practices that will work in our
organization. Eight pilots were completed: three in the Park Board,
two in the Fire Department, two in Engineering and one in the Health
Department.
Basically, the work group with their supervisor develops OH&S goals,
implements plans and assesses progress. Overall, the group develops
the ability to learn from and improve the quality of their work
experience. Traditional problem solving is hierar-chical and leads to
a dependency on supervisors for the most rudimentary requests. By
developing and monitoring processes and allowing work groups to learn
and measure how well they are doing, the work group begins to solve
their own problems. The pilots have met with varying success and a
detailed report will be released later this year.
2. Setting Health & Safety, Cost Control, and Departmental
Accountability as a Priority
Intuitively, the saying "what gets measured gets managed" has some
merit. The City has not traditionally measured the activi-ties or
costs associated with WCB. Consequently, costs have escalated and
efforts have been ad hoc. Initial efforts to create an accountability
system have focused on providing departmental managers with tools to
deal with OH&S issues and WCB claims. 1996 and 1997 will see further
refinement of a cost account-ability and statistical system. A report
on this will go to Council in the Fall of 1996. WCB is now sending our
claims cost statement on computer disk which allows us to track our
costs more efficiently.
3. Re-focusing the Role of the City Occupational Health and Safety
Committees
The role of OH&S Committees has been and still is to ensure departments
are complying with WCB regulations. Most departments do. Two pilots,
one in Health and one in Engineering, were con-ducted to see if a
better focus for these committees could be found. Unfortunately, these
committees end up trying to solve problems that no one wants to deal
with. This leads to frustra-tion on behalf of committee members who
want to make a differ-ence. We still do not have an effective model
that works with all committees. Efforts are ongoing to develop a
useful model.
4. Becoming Self-Regulating in OH&S
The main thrust of the self-regulation process is to achieve compliance
with WCB regulations and to prevent accidents through education and
consultation with the workforce. Self-regulation means that the City
deals with its OH&S problems internally and only involves outside
agencies when serious conflict arises. Presently, the City is moving
towards self-regulation by meeting with WCB representatives quarterly
(claims and safety) to address specific concerns before they translate
into orders or fines. The City s pro-active and rehabilitation
activities have shown the WCB that the City is serious about the safety
of its employ-ees. While not intentional, this has resulted in
decreased inspection activity by the WCB.
Inspections Orders Fines
1992 110 101 3
1993 74 132 1
1994 76 83 0
1995 59 80 0
All fines were successfully removed because the City was able to show
it had trained and supervised employees to the best of its abilities.
Our training programs are by far the most comprehen-sive in the region.
In fact, other municipalities have sent employees to our OH&S training
programs.
5. Involving Unions in the OH&S Process
The key to successful OH&S processes is union involvement in
priorities. All unions except Vancouver Firefighters and the BCNU
were hesitant to be involved in 1993 Task Force recommenda-tions.
Activities have included: development of rehabilitation principles and
guidelines with CUPE 1004, CUPE 15 and Vancouver Firefighters ;
establishment of a rehabilitation committee comprised of Fire
Department management and Vancouver Fire-fighters; CUPE 1004
involvement in the work group process and development of a peer audit
process in Fire, Police, Park Board and Engineering.
6. Re-focusing the Claims/Attendance System
Traditional claims management focuses on getting claims denied and
appealing WCB decisions. Our efforts have been re-directed to City
employees who get hurt and want to help themselves get better. In the
spring of 1995 the City initiated an early inter-vention rehabilitation
program. In October of 1995, a one year pilot with the WCB was agreed
upon to determine if the benefits of this program can be duplicated in
other industries.
The two main components of this program are:
I. Early Intervention
The focus of early intervention rehabilitation is to have employ-ees
with temporary injuries or illnesses access appropriate treatment
quickly. The City has established a preferred provider network of
rehabilitation clinics in the Lower Mainland. These clinics use the
sports medicine (active) model of rehabilitation and will admit our
employees within 24 to 48 hours after referral by an employee's
physician. In 1995, 147 employees attended this type of treatment and
only two of these individuals required further ongoing treatment.
II. Transitional Work
Due to the WCB benefit structure, the City effectively pays an injured
employee full wages whether they are at home or at work. The temporary
modified work fund allows departments to bring employees back to work
in this interim period without penalizing them monetarily. Modified
work assignments enable the department to have valuable work performed,
as well as boost the morale of the employee involved. Efforts in both
areas have reduced our WCB claims costs by 16% as shown below.
1993 1994 1995 %Diff.from 94
Engineering $1,778,117 $2,004,142 $1,873,190 ( 7%)
Park Board 614,475 592,128 453,816 (23%)
1993 1994 1995 %Diff.from 94
Police 544,386 631,810 473,097 (25%)
Fire 1,080,909 875,571 641,387 (27%)
Corp. Serv. 129,913 64,577 124,532 (92%)
General 65,483 100,038 56,194 (44%)
TOTAL $4,213,283 $4,268,266 $3,622,216 (16%)
These costs are the total the City pays and is different from
WCB s costs. WCB does not pay the full cost of wage loss because
each year they establish a cap. The cap for 1995 was $52,400.
Due to contractual agreements, the City is required to pick up
any wages above this amount.
City departments have had success in creating transitional work
without loss of productivity. Council approved funding to pay
employees who were temporarily unable to perform their normal job
without penalizing the departments. The intention is that
even-tually departments will themselves fund this type of
temporary work.
Permanent modified work has been harder to find. As part of the
early return to work program, the City had the WCB purchase two
additional litter carts to be used in the Street Cleaning
Program. Council recently endorsed these purchases as it will
allow two employees to return to work in a modified work
situation earlier than would otherwise be possible. WCB is providing the vehicle funding and the City is paying the
employees' wages with operating savings that result in reduced
WCB pensions. A further refinement of our WCB accountability
system this year will hopefully be developed to cover the costs
of these positions. While this is a rare event, appropriate work
functions such as litter pick-up and anti-graffiti may need to be
found in the future instead of letting employees drift onto WCB
pensions and out of the City system.
Departments have also used the transitional work funding for
wages or for buying equipment to create these opportunities. For
example, Fire and Police have been successful in identifying jobs
for transitional work but lacked the required equipment.
Engineer-ing and the Park Board have been successful in locating
temporary placements but unfortunately ten employees with
permanent disabili-ties had to be funded until permanent
placements could be made within the City s existing job bank.
Usage is shown below.
Engineering $353,000 Police $ 30,000
Fire $ 45,700 Park Board $ 5,000
City $ 13,700
Total $447,400
Of the approved funds for WCB return-to-work, $200,000 remains
(as of June 1996). In 1996, City staff wish to apply the
rehabilitation program principles to sick leave. this is
detailed in a companion report.
7. Consolidating Occupational Safety, Claims Administration
and Occupational Health into a Unified Structure.
In 1995, Council approved the out-sourcing of Occupational Health
Services. This was the last step in combining all OH&S
activities in a unified structure.
FINANCIAL IMPLICATIONS
The trend is positive. Our claims cost, which drives our
assess-ment rate, is declining. Council approved two funding
sources for the OH&S program: $413,000 for staff and programming
costs of the OH&S program plus $600,000 Transitional Work Fund
for modified work for temporarily disabled employees. Both of
these funds will be offset in reduced WCB assessments and wage
loss. We are using 1993 as our benchmark year for comparative
purposes and the success of our efforts is evident in the graph
below.
NOTE: Yearly wage loss costs dictate assessment cost 2 years later
The results are clear and our efforts have paid off sooner than
expected. Initial investment in this program for 1994, 1995 and
1996 will be $1.02 million. Our WCB assessment to the end of
1996 has been reduced by $900,000. Further reduction will occur
because there was an actual reduction in WCB wages and pensions
from 1994 of $2.4 million. Our actual WCB wage loss reduction in
the program's first year was $650,000.
Accurate future predictions concerning the City s WCB assessment
are virtually impossible as the WCB is currently reviewing, and
will shortly revise, the ERA system. We do, however, know the
trend is positive.
PERSONNEL IMPLICATIONS
Efforts are being made to have staff return to work earlier,
which means fewer days lost but potentially fewer opportunities
for replacement staff. Our efforts also transfer accountability
and the development and maintenance of an effective safety
program to front-line staff.
This report has been distributed to all Civic unions and employee
group representatives.
CONCLUSION
This is a good initiative for both the City and its employees.
We have stopped uncontrolled, increasing costs in this area. We
are constantly assessing our safety needs through the processes
we have undertaken. Progress has been slower in the initial
stages than anticipated but concrete changes have been made. The
same approach can and will be used to reduce sick leave costs.
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