State Sticks Counties with Line of Duty Costs

Funding for compensating Virginia first responders killed in the line of duty is shifting from the Commonwealth to local governments. The budget change will cost Clarke County nearly $18K in 2011 in is projected to continue to increase in the coming years.

The Line of Duty program pays for death benefits, disability coverage and health insurance for police, fire, rescue and other public safety officials killed or injured in the line of duty, or their survivors. In a move that will save the state about $9.5 million, the Virginia General Assembly eliminated funding support for localities under the program in its last budget. While the Commonwealth still plans to cover state-employees, like state troopers and corrections officers, localities will now be footing the bill for their own deputies, police and fire and rescue squads.

Source: Virginia Retirement System (Click to enlarge)

“Is this an unfunded mandate” County Supervisor Pete Dunning (White Post) asked county administrator David Ash at a Clarke County Board of Supervisor work session on Monday.

“It absolutely is” Ash replied.

“Is there a lot of fraud in this program?” Dunning continued.

“Let’s just say that the lack of program oversight has caused a lot of people to misunderstand their rights under the program” responded Ash.

The Line of Duty Act (LODA) provides hazardous duty benefits to state employees and local government employees and volunteers in hazardous duty positions. Localities are enrolled automatically in a LODA Fund administered by the Virginia Retirement System (VRS) to help fund future benefit payments with the actual LODA funds held and tracked by the Virginia Department of Accounts.

Although localities, until recently, were required to participate in the state-run LODA Fund, many have balked at the cost increases projected by VRS in coming years. To address the cost concerns, Richmond lawmakers provided localities with the option to either continue to pay into the LODA Fund or “opt out” by June 30, 2011 and follow their own LODA financing strategy. Governing bodies of localities that choose to “opt-out” of the LODA Fund, the Board of Supervisors in the case of Clarke County, must pass an opt-out resolution and then choose either a “pay-as-you-go” approach, where the locality pays the benefits as they occur; or pre-fund the benefit by setting aside money or investments to fund any future claims.

According to Ash, the number of employees covered state-wide under the LODA fund has steadily declined from around 75K to 40K as many local jurisdictions have exercised the opt-out strategy.

“Every county that can get out so far has” Ash told the Supervisors. “Clarke County has the option to move our coverage to a VACO [Virginia Association of Counties] fund. VACO’s fund has been actuarially reviewed, is very competitive and does not contain the state’s planned increases.”

At its December 16, 2010 meeting, the VRS Board of Trustees approved a Line of Duty Act Fund contribution rate of $233.89 for fiscal year 2012. The rate reflects a “per capita” contribution, the amount the locality would pay per participant. Under LODA all hazardous duty state and local government employees, including volunteers are eligible for the hazardous duty benefits.

LODA provides a $100,000 benefit for death occurring as a direct or proximate result of duties and a $25,000 for death by presumptive clause or within five years of retirement. The act also provides for lifetime health insurance coverage for a disabled employee, a surviving spouse as well as dependent children.

In Clarke County’s case, the LODA benefit cost for career paid staff in Clarke County for fiscal year 2011 totaled $9,217 while the cost for volunteer staff, primarily county fire companies, totaled $8,400.

Clarke County has only had one LODA claim since passage of the legislation.

A decision on Clarke’s LODA Fund participation strategy is expected at the next Board of Supervisor meeting on May 24, 2011.

 

CDN Editor: An earlier version of this story stated an incorrect date for the upcoming BOS regular meeting. The correct date for the meeting is May 24, 2011.