50 county school boards sue PEIA, state auditor

CHARLESTON -- Fifty of West Virginia's 55 county boards of education have filed a lawsuit against PEIA, its finance board and the State Auditor's Office, regarding the reporting and funding of Other Post Employment Benefits.

Grant, Mingo, Preston, Ohio and Wayne Counties are the five counties not participating in the lawsuit.

The counties argue they should not be obligated to contribute more to the West Virginia Retiree Health Benefit Trust Fund than the amount of funding they receive from the state to take care of those OPEB costs, according to a complaint filed Feb. 22 in Kanawha Circuit Court.

PEIA provides medical insurance for groups of eligible full-time employees. The plaintiffs claim PEIA created a health plan for state employees and it is mandatory that the boards participate in the plan.

During the fiscal year ending June 30, 2009, the counties claim their OPEB liability ranged from $35,918 to $1,139,541, which collectively amounts to nearly $4.4 million, an amount they claim is expected to grow.

The plaintiffs claim OPEB had previously operated on a pay-as-you-go basis, meaning organizations paid an amount to fund current retirees for the current year, but in June 2004 a Government Accounting Standards Board statement was issued that mandated that OPEB be treated much like pensions, meaning they are reported when the employee earns them, instead of when they use them.

The counties must pay portions of the unfunded liability in addition to the normal years' costs, together known as the annual required contribution (ARC), according to the suit.

The counties claim they cannot pay the total OPEB liability, and say funding the liability could results in staff reduction, elimination of educational programs and reduction in availability of matching funds for School Building Authority grants.

The counties are seeking for declaration that the requirements of West Virginia Code be revised to provide funding for the total OPEB liability. They are being represented by Andrew G. Fusco, Howard E. Seufer, Jill E. Hall and Gregory W. Bailey.

The case has been assigned to Circuit Judge Tod J. Kaufman.

Kanawha Circuit Court case number: 10-C-327