Helena officials weigh switching workers’ compensation coverage to state fund to cut costs

City finance staff told the Helena City Commission on April 16 that switching the city’s workers’ compensation coverage from the Montana Municipal Interlocal Authority (MMIA) pool to the Montana State Fund could materially reduce the city’s costs.

“By moving away from MMIA and over to the Montana State Fund, it could have a potential annual impact, of savings to the city of $283,700,” Director Danielson said, noting the finance office and HR had requested quotes and that budget analyst Casey Ransom prepared an analysis. Danielson also said the State Fund could pay an annual dividend that might deliver additional savings to the city.

Why it matters: The city has been part of a pooled self-insurance program for decades. Officials said sustained increases in claims and the structure of the pool make continuing in MMIA relatively more expensive; switching would reduce near-term costs but could reduce the city’s governance role in the program.

At the meeting, staff presented figures carved out for the general fund — “the annual savings to the general fund could potentially be $163,900,” Danielson said — and explained a possible dividend from State Fund investment revenue could add roughly $76,000 to citywide savings and about $41,500 to the general fund in some years.

Commissioners asked about coverage differences. Commissioner Dean asked whether differences in statutory coverage — for example treatment of post‑traumatic stress disorder for first responders — would affect benefits. HR representative Angie Benedetti and Director Danielson said coverage was “very, very comparable,” and that staff had checked with the HR department and State Fund as part of due diligence.

Commissioner Logan pressed on policy and control: she noted that being in a self‑funded pool gives members representation on the pool board and argued that relinquishing that role could affect policy decisions and longer‑term costs. Danielson said larger jurisdictions that have left MMIA reported satisfaction and that Helena’s being one of fewer large members remaining increased the city’s risk exposure in the pool. City Manager Tim Burton and other commissioners said the discussion was a business decision but one that required weighing policy tradeoffs.

What staff will do next: The city manager said he would continue due diligence and requested consensus to notify MMIA of a nonrenewal if the commission supported that direction. No formal vote was recorded in the meeting minutes; staff presented the analysis and sought direction to proceed with notifying MMIA if the commission was comfortable.

Meeting context and limits: Staff repeatedly described the review as preliminary and contingent on final pricing and analysis. Danielson said the presentation was intended to inform the commission and ask for direction to proceed with nonrenewal notices by the end of the month if commissioners concurred.