In the 2005 -2006 Session of the Washington State Legislature HB 2688 (SB 6447) passed. On March 30, 2006 Governor Gregoire signed the bill with a partial veto.  The bill that lifted the 60% cap imposed on those members who joined the system after February 18, 1974.
The section the Governor vetoed dealt with the Medical Benefits issue.  The bill would have created a Task Force to study the funding of post-retirement medical benefits for LEOFF 1 members. Of particular concern to LEOFF 1 members was a sentence in the Senate Bill report which read, “After evaluating options, the task force shall select private or public funding vehicles through
which voluntary employer contributions and transfers of excess pension funds may be used
for funding LEOFF 1 medical benefits.”

The Governor, in her veto message, assigned DRS the task of establishing the groundwork for a study of the medical benefits issue and subsequently tasked DRS with forming the study group.

In the last legislative session allocated $40,000 to DRS for the conduct of the study.  The group has had four meetings.  The last meeting was held on July 30th and the next is tentatively scheduled for August 7th.

Membership in this group has a bit of flux from meeting to meeting, but it is comprised of a significant number of LEOFF 1 members.  The following individuals attended the June 12th meeting:

WACOPS	LEOFF 1 Coalition	RFFOW		WSCFF
Ken Crowder	Mark Curtis	Randy Plain		Keven Rojecki
	Dan Downs	Dick Warbrouck
Retired Seattle Police Association (RSPOA)	FOP
Gerald Taylor	Bill Hanson
Attorney	Assoc. of Counties		Assoc. of Cities	Leoff 1 Retiree
Joe Fischnaller	Julie Murrays		Jim Justin	Bill Kantor

 
The group has agreed to refrain from wide distribution of the meeting information until such time as the group has agreed on the minutes.  Hence, while we have had four meetings, only two of the minutes are available as of the time of this writing.  The minutes of the thrid meeting should be posted soon. 

You can read them online:
http://www.drs.wa.gov/Administration/LEOFF1MedicalBenefits/meetingminutesdefault.htm.

Two Phases

The study is being conducted in two phases.  The first is strictly a fact finding session and the second will attempt to define and address the problem the employers claim to have in meeting their contractual medical benefit obligations.

Phase I -- The group agreed to conduct its study in two phases.  The first phase is simply a fact finding period.  The group is attempting to identify all of the necessary facts surrounding the medical benefits area and produce a “Fact Book” that will contain all of the relevant information that is not in dispute.  Currently that “Fact Book” is in a draft state as the information is being developed and reviewed.  If you read the minutes, you will find a listing of the initial questions posed by the group and some of the answers developed.  As soon as the fact book is available, we will post it on this site.  Director Matheson promises the first part of the fact book will be available by our next meeting. This fact-finding phase will also attempt to identify the extent of the problem facing the employers in meeting their LEOFF 1 medical obligations.

Phase II -- The second phase will attempt to identify solutions to whatever problems we can document are facing the employer groups.  Obviously, there have been a number of proposals over the years to utilize LEOFF 1 surplus money to create a “medical benefits trust” to aid the employers.  LEOFF 1 members oppose using LEOFF 1 surplus funds.  In contrast, the LEOFF 1 groups have suggested that the employers reprioritize their spending or seek new taxing authority to meet their obligations.  The cities do not like that approach.

Progress

The group has agreed that we would not publish information developed by this study group until all members have reviewed the information and agreed to the facts.  It is frustrating to hold back on some of the information developed thus far because much of it is already available from other public sources.  As I am able to identify those other sources, I will publish that information on this site. 

I am in the process of reviewing each set of minutes and will extract the available information from those documents and publish them in a format that is easier to digest.

That said, I want to emphasize that as of our July 30th meeting there had been no developments that cause any alarm or concern beyond those already mentioned.  As you read the minutes you will note that the group has addressed a number of questions to the State Actuary and the State Attorney General.  The answer to those questions should be interesting and helpful.  We are still waiting for those answers.

The State Actuary, Matt Smith, attended the July 30 meeting.  He was candid and provided a helpful explanation of how the Pension and Medical liabilities are calculated.  Again, there was little new information relative to those matters but he did provide some better understanding of the surplus and the medical liabilities facing the employers.

To the extent I am able to support his explanations from available public records, I will be reporting on the way those liabilities are calculated.  This is an important area as many LEOFF 1 members are confused about the surplus and why the value of that surplus can be stated in so many different ways.  You can look for that article shortly.