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County actuary finds large LOSAP liability; commissioners told FY2015 needs both PAYGO and trust seed
Summary
An actuarial valuation presented March 4 found roughly $17.0–$17.8 million in past-service liabilities for the county’s volunteer Length of Service Award Program (LOSAP); staff recommended FY2015 PAYGO plus a $400,000 trust contribution while commissioners consider longer-term funding options.
County staff and the actuary presented the first full valuation of the Length of Service Award Program (LOSAP) for volunteer fire and rescue personnel during the March 4 budget workstation and described a large unfunded liability.
The actuarial valuation—prepared for the Emergency Services support fund—showed approximately $17,045,671 in accrued liability attributable to benefits already earned; the valuation’s unfunded actuarial liability on a current measurement date was reported at roughly $17.8 million.
Why it matters: LOSAP is the county program that provides retirement-like benefits to eligible volunteer members of the county’s fire and rescue organizations. The valuation shows significant past-service obligations that are not matched by assets; addressing the liability affects the county’s long-term fiscal plan and the annual cost to taxpayers.
Recommended FY2015 treatment: Staff proposed a two-part FY2015 approach—continue PAYGO benefit payments (reported in the draft as $933,448) and add a $400,000 contribution to start a trust that would be used to fund LOSAP obligations going forward. The actuary estimated a theoretical annual required contribution of about $2.1 million to amortize the full liability over a standard schedule; without the COLA element in the plan, that annual requirement would have been lower (approximately $1.6 million in the actuary’s sensitivity example).
Commissioner and staff discussion: Commissioners sought time to review the valuation and explore potential options, including whether to seed a trust from available fund balance and to review benefit structures such as the cost-of-living adjustment (COLA) embedded in LOSAP. County staff noted the 251 emergency services fund shows a structural deficit and that a gradual approach—combining PAYGO and staged trust contributions—would be more practical than a single-year full-funding attempt.
Next steps: Staff will provide more detailed options for board consideration, including scenario analysis for different contribution paths and whether any benefits design changes (for example removing or modifying COLA) would materially reduce the county’s long-term amortization requirement.
Ending: The valuation and proposed staged funding reoriented the board’s budget discussion late in the session; commissioners asked for more modeling and return of options before finalizing FY2015 appropriations.
