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City staff brief committee on MMIA withdrawal option and potential member equity distribution
Summary
Staff told the committee MMIA is ending workers' compensation coverage as of July 1; the city can opt to withdraw by May 1 to begin receiving a distribution of its member 'equity position' (example amount $500,000 as of last June 25) paid over four years. Staff will consult legal counsel and return with a recommendation.
Staff informed the committee that MMIA (the interlocal insurance pool) will not offer workers' compensation coverage beginning July 1 and that the city may choose to formally withdraw from the program. Withdrawal would not change already pending liabilities but would begin a process to distribute the city’s member equity position over four years (10% the first year, 25% the second, 50% the third and 15% the fourth).
“As of last June 25, our position was a little over $500,000,” staff said as an example figure; the final number will be calculated as of June 30 and provided around the end of the year. Staff emphasized the timing trade-off: to trigger the withdrawal process the city must notify MMIA by May 1 if it wants to begin distributions rather than wait until the program winds down; staff will consult the city attorney and return with a recommendation next month.
Committee members discussed that exiting might create upfront cash but carries uncertainty (the equity number can change depending on late claims and MMIA’s wind-down decisions). Staff recommended no immediate decision; the committee treated the item as an FYI and asked staff to bring a formal recommendation after legal review.
