The Cost of Meeting LEOFF 1 Liabilities

Hoquiam (population 9,097) is a coastal community that has one of the state’s oldest fire and police departments. The city is one of 147 cities mandated to cover lifetime medical and long-term-care costs for members and retirees of the LEOFF Plan 1 system.

The State Actuary estimates $1.745 billion is needed statewide to plan for future liabilities. Divided equally among LEOFF 1 members, that’s $235,000 per member. Hoquiam would need to invest $9.9 million today to meet future liabilities for their 38 retirees and four active members - only $1.6 million less than the city’s 2008 operating budget.

To pay current LEOFF 1 costs the city budgeted a half million dollars in 2008 - a figure that is estimated to increase annually until 2020. Without this stranglehold on the budget, the city could fix roads, replace playground equipment, offer recreation programs or re-open the jail.

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