Title
Approval of an Ordinance Creating a Trust Fund to Pay LEOFF 1 (Law Enforcement Officers and Fire Fighters) Medical Benefits
Recommended Action
Committee Recommendation:
Move to approve an ordinance on second reading to create a trust fund to pay LEOFF 1 medical benefits.
City Manager Recommendation:
Move to approve the attached ordinance on second reading.
Report
Issue:
Should a Trust Fund be established to pay LEOFF 1 Other Post-Employment Benefits (OPEB) costs?
Staff Contact:
Dean Walz, Fiscal Services Director, Administrative Services Department, 360.753.8465
Presenter(s):
Dean Walz, Fiscal Services Director
Background and Analysis:
The Finance Committee at its February 27 meeting recommended the creation of a Trust Fund to pay LEOFF 1 OPEB.
The City is obligated to pay medical benefits for LEOFF 1, Plan 1 retirees. Plan 1 is for firefighter and police officers hired prior to October 1, 1977. There are currently 71 City of Olympia retirees and two current employees who are members of the LEOFF I, Plan 1 system.
Police retirees' OPEB costs are paid from the General Fund and Fire retirees are paid from the Firemen's Pension Fund. Additionally, a special account was established to pay required long-term care costs. The special account currently has balance of $823,500. The 2015 General Fund is budgeted at $652,000 for Police OPEB and $752,060 of 2015 property tax is dedicated to the Firemen's Pension Fund for Fire OPEB. The funds put into the Firemen's Pension Fund remain in that fund for both pension and OPEB. Any unexpended General Fund budget lapses at year's end, and without action by the Council the unused budget would revert to the General Fund balance. In 2014 there was $108,680 budgeted for Police OPEB, which was not used. The Finance Committee has recommended that the unused funds budgeted for 2014 be transferred to the new fund if created.
The proposal is to create a trust fund for LEOFF 1 OPEB. Funds...
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