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SR-100-002 (23) CMO:RM Council Meeting: July 27, 2004 Santa Monica, CA TO: Mayor and City Council FROM: City Staff SUBJECT: Opposition to AB 3051 (Nation and Vargas), which Seeks State Legislative Authority to Allow Increase of Safety Employees’ Death Benefits Introduction This report recommends that the City Council oppose AB 3051 (Nation/Vargas), which would extend the statute of limitations for filing a claim for death benefits by the dependent survivors of local firefighters who succumb to illnesses that are presumptively considered job related. Opposition is recommended to limit the City’s liability, which would be significant if this bill is passed. Background The City of Santa Monica has a record of support for labor issues and offers generous and responsible benefits to city workers. There would be no reduction of benefits if AB 3051 were defeated. It is well known that rising costs of workers’ compensation have burdened local government budgets and spurred reform legislation with the passage of SB 899 in April 2004. This bill provides an extension of the period of exposure for liability of death benefits from a certain period (240 weeks from the date of injury or last provision of benefits, as allowed by current law) to an unknown period relative to the injury (one year after the death occurs, more than one year after the date of injury). This could result in notice of claim against the City for job related death benefits 10, 20 or more years after separation from employment or last date of exposure. The extension of the time to file a claim for this benefit will negatively impact local resources. 1 The proponents of this bill state in their argument that if a firefighter dies as a result of an occupational illness, other than asbestosis, more than five years after he or she is diagnosed with the fatal disease, his or her dependents are precluded from receiving death benefits. No other reasons are cited for the extension of statute of limitations for the filing of a claim. Opposition is recommended on this bill as it would require public agencies to pay workers’ compensation death benefits to a broad array of former firefighters based on presumptions of injury that are impossible to verify, years after employment has ended and the nexus between the disease causing death and employment is likely tenuous. Such an exposure for liability would be impossible to anticipate and prepare for fiscally. By eliminating the current statute of limitations for filing of a claim for death benefits, there is no realistic opportunity to investigate its causation due to the passage of time. Further, two diseases are already provided this exemption: AIDS and AIDS related diseases and asbestosis. These are two diseases with acknowledged extended latency period of many years. Current law provides the payment of up to $160,000 to multiple dependents if the claim is filed timely and the condition causing the death is found job related. Budget and Fiscal Impact The passage of this bill will have potential significant impact on the City’s budget. An example would be if a firefighter were to succumb to pneumonia or heart disease (both presumptively assumed to be compensable) 20 years after retiring from the City, his or 2 her surviving dependents could claim death benefits at the rate in effect at the time of death. The current death benefit for a single total dependent is $125,000 or $160,000 for 3 or more dependents. These benefits will increase for 3 or more dependents to $320,000 in 2006. Additional increases will likely occur with future legislative changes. Recommendation It is recommended that the City Council oppose AB 3051 (Nation/Vargas). Prepared by: Tom Phillips, Risk Manager Barbara Trujillo, Workers’ Compensation Administrator Jim Hone, Fire Chief 3