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City will take lead in lawsuit against the state

"The City of Port Orchard filed suit against the state’s Department of Retirement Systems and its director, John Charles, March 27 in an effort to force the redistribution of surplus LEOFF-1 fund money back to employers who essentially paid disability benefits twice, attorneys said.City Attorney Loren Combs on April 23 told the Port Orchard City Council the city is the lead in the case after filing suit in Thurston County Superior Court. The state attorney general’s office responded to the suit as expected and, so far, there have been no surprises, he said.Mike Jennings, the attorney representing the employers, said both sides will likely agree to move for summary judgment, meaning they’ll skip the trial portion and go straight to a legal decision. His office filed a motion April 19 to make the case a class action suit, but Thurston County Justice Richard Strophy has yet to sign the certification.At issue in the suit is the interpretation of the state statute that defines what benefits are covered under the LEOFF-1 plan, a fund created by the state legislature to cover law enforcement and firefighter personnel employed from 1970 to 1977.In 1977, the state switched to the LEOFF-2 plan, though there are still some LEOFF-1 employees receiving benefits from the fund.Neither side disputes the facts of the case, including that employers were never paid out of the fund for disability leave after which employees returned to work. Jeff Kray, assistant attorney-general representing the department, maintains disability leave benefits never were meant to be covered under the plan. But Jennings said the statute clearly covers disability leave. Employers pay disability leave benefits to firefighters or law enforcement personnel who take a temporary break from work for an injury or illness. But, because they also pay into the fund, attorneys argue they are essentially double paying for their employees’ benefits. “City money was paid in to support the fund. The reason the fund is so big is because the state was supposed to be paying for disability leave,” Combs said. “Cities were paying disability and into the fund.”While the lawsuit appeared to hit the court shortly after the Senate recommended using the surplus in its operating budget proposal, Jennings said his office has been reviewing the case for some time. “I don’t think the fact that there was a surplus was any secret,” he said. “We’ve looked at this for quite a while.”If Strophy determines the statute requires the fund cover disability leave in addition to disability retirement, Jennings said he anticipates employers will be reimbursed from the surplus. Kray said there is no dispute whether the LEOFF-1 plan pays disability leave. “Historically, LEOFF-1 has never paid that,” he said. “They’re asking for something that’s never been paid.” "

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