The state’s Workers’ Compensation Commission will close its Fort Smith satellite office by July 1, 2014, and keep its Springdale office open, the three-member commission decided Tuesday.
Commissioners A. Watson Bell, Karen McKinney and Philip Hood approved commission Chief Executive Officer D. Alan McClain’s recommendation to close the Fort Smith location.
The commission’s staff members examined the need for two satellite offices in Northwest Arkansas for some time and decided that the agency can operate more efficiently and economically with only one office in that area, McClain wrote in a memorandum to the commission. The commission’s other office is in Little Rock.
The staff members’ recommendation took into consideration input from employees at the Fort Smith and Springdale offices, communications received by the commission and the governor’s office, and a cost analysis, according to McClain’s memorandum.
The Fort Smith office’s expenses are slightly higher than those of the Springdale office and there are more workers’ compensation claims from the Springdale area than from the Fort Smith area, said James Daniel, assistant chief executive officer for the commission.
The Fort Smith office’s expenses - not including employee salaries and benefits - were $53,367 for the past fiscal year compared with Springdale’s $48,205, according to Daniel.
In fiscal 2013, there were 419 workers’ compensation claims filed from Washington County, compared with 322 from Sebastian County among 6,672 claims filed across the state, Daniel said. The Springdale office is in Washington County. The Fort Smith office is in Sebastian County.
The Fort Smith office has six employees and the Springdale office has three employees. No jobs will be lost as a result of the consolidation, Daniels has said.
Administrative law judges hold hearings on claims at the offices, where attorneys advise employers and some claimants and mediatesettlements.
Fort Smith Mayor Sandy Sanders said Tuesday afternoon that it’s disappointing to learn that the commission will close the office in his town.
Sanders had urged the commission in a letter to keep the Fort Smith office open, “so that it can continue to provide its many valuable services to the second largest city in the state.”
Bill Rogers, vice president of communications for the Springdale Chamber of Commerce, said Tuesday night that chamber officials are pleased that the Springdale office will stay open.
“It is a resource for our region,” and shows that Northwest Arkansas and Springdale in particular are major job creators for the state, he said.
The commission has been considering closing one of the offices because the commission’s Death and Permanent Disability Trust Fund has an unfunded liability of about $135 million, according to Bell.
The fund had assets of $128.5 million and liabilities of $263.6 million as of June 30, 2012, according to the actuarial firm Osborn, Carreiro & Associates of Little Rock.
The trust fund’s unfunded liability has increased from $8 million in 1995 to about $135 million partly as a result of a decreasing return on the commission’s investments ,which state law requires to be placed in certificates of deposit with Arkansas banks. Decreasing workers’ compensation insurance premium rates and taxes, and increasing numbers of successful claims and benefits paid to new claimants also led to the imbalance, according to Daniel.
Earlier this year, a bill sponsored by Rep. Jim Nickels, D-Sherwood, would have increased the maximum allowed premium tax on a workers’ compensation insurance policy from 3 percent to 4 percent and credited any funds that exceed 3 percent to the Death and Permanent Disability Trust Fund. But it failed to clear a House committee.
Northwest Arkansas, Pages 9 on 07/31/2013