Nazareth Borough's workers' compensation costs are projected to hit almost $192,000 in 2012-2013. That figure has more than doubled in the last five years, and one councilman called the numbers before him "frightening."
After recording 19 losses within the last three years -- totaling about $1.1 million in claims -- Travelers Insurance .
“They are cutting us off,” Mayor Fred Daugherty Jr. announced at March 5 meeting. “We have to go to the state. That’s going to be a bitter pill to swallow.”
According to Paul Kokolus, the borough’s secretary and treasurer, the borough spoke to 11 vendors about obtaining coverage -- all of them declined.
Because no insurance company will issue the borough a policy, the State Workers’ Insurance Fund (SWIF) is the last resort.
Most of the workers' compensation claims have originated from the borough's police department, although Kokolus said no officers are currently claiming workers' compensation -- for the first time in about eight years.
The rising operating costs of the department has been the driving factor in the mayor's the department and contract services from .
In December, however, to buy coverage from Colonial Regional after negotiations failed to move forward.
According to documents provided to the public at Nazareth Borough Council's workshop Thursday night -- these documents are located to the right of this article -- the department's direct payroll increased 113.34 percent over a nine-year period. That's a 12.6 percent increase per year.
"For us to keep a force for this borough, it’s unsustainable," said Michael Kopach, chairman of the Finance Committee, as he looked over the numbers. "We’re talking over 2.5 mills here. That’s a lot of millage for just one line item. That’s pretty frightening."
Councilman Jack Herbst, who is the chairman of the Police Committee, said council is committed to moving toward any avenue that would provide adequate service to Nazareth's citizens, whether it's contracting services, forming a new regional department or making the current department work.
Kokolus added that the borough could save 4 percent on its premium if the borough enrolled in a drug-free workplace program. However, "drug testing is not cheap," he noted.
Kokolus suggested the borough wait until September, when temporary summer workers are no longer on the payroll, so the cost is more bearable.
Under a drug-free workplace program, borough employees would be subject to random drug testing -- except for elected officials and police officers. The Highway Department would also be excluded because those employees are already tested in order to obtain and keep CDL licenses.
Police Chief Thomas Trachta suggested that the borough's police officers be included.
"Most police departments do random testing, so I think [the officers] should be included in that," Trachta said. "I totally support it."
Dan Chiavaroli, president of council, said the borough was hesitant to include the officers because it's not a stipulation in their contracts.
"It’s not in the contract, so that’s what our concern is right now," Chiavaroli said. "But if you support it, we’ll move forward and see what happens."
Nazareth Borough Council will meet at 7 p.m. on Monday, June 4.