AG says timing of ex-Franklin leaders’ benefit changes violated WA constitution
The Washington Attorney General’s Office says the timing of a 2016 vote to change benefits payments for Franklin County leaders violated the state’s constitution.
Whether that means three former county commissioners will have to pay back some money is unclear.
The county could actually end up on the hook for more money, according to a previous legal analysis by the county prosecutor’s office.
The issue dates back to 2016 during the county’s health care benefits cycle, which coincided with the general election.
Former commissioners Brad Peck, Bob Koch and Rick Miller were overhauling the county’s healthcare benefits to create a more attractive package to recruit new employees and retain others who they couldn’t afford to simply pay more.
Many county employees and elected officials did not use the courthouse’s health insurance because they had coverage through a spouse, were retired military personnel or for other reasons.
By making the changes, the county could offer an attractive incentive while not paying employees any more than they already had budgeted for the benefits package.
Some employees received the full amount that would have been spent on their health insurance, about $1,600 per month by 2023, while others received a lesser amount for the difference between the cost of plans. The payments for most employees went into accounts that had to be used for medical expenses.
The plan allowed some employees who had lifetime medical benefits the option to take a taxable stipend in place of healthcare benefits. The question being debated became whether that stipend for commissioners counted as a pay increase.
Elected officials in the county also receive stipends for other things, such as vehicle allowances.
The program proved popular among employees, but was later targeted as an area where the county could find significant savings. Changes made last year saved the county about $1 million, while still preserving some smaller payments to employees up to $600 a month.
The county has been waiting about two years for an opinion from the AG’s office about the payments made to the former commissioners.
In a Friday news release from the county, current commission Chairman Clint Didier said the county will be pursuing repayment.
“This was never about settling scores, this was about providing transparency and an open government to the people of Franklin County,” Didier said. “We were elected to safeguard the taxpayers and their hard-earned money; this can never be allowed to happen again in Franklin County.”
Koch, Miller and Peck responded in a joint news release, noting that the issue was complex and that further legal review will be needed to determine what, if any, repayment is required.
They argued that this is just the latest act of political retribution by the current board members.
Before he left the board, Peck maintained that he was willing to work with the county once a proper legal review was completed.
Auditor Matt Beaton has previously said he believes Peck should pay back nearly $47,000 in payments made since 2016. Miller and Koch received about $20,000 in payments that would have otherwise gone toward health insurance.
The AG’s review notes that it is strictly a legal analysis and does not make a recommendation on how to move forward. Franklin County Prosecutor Shawn Sant has requested outside legal counsel handle the issue for the county.
Under state law the county will also likely have to pay for legal representation for the former commissioners because the vote was in the course of their duties.
What happened?
The county created a Voluntary Employees’ Beneficiary Association, or VEBA, pool which allowed employees who declined health insurance to take the money that otherwise would have gone to medical benefits and put it into a medical use account as a taxable cash benefit.
While the discussion around the changes happened before the election, the final approval was approved a few days after.
The move did not increase anyone’s salary and benefits package, it just allowed employees who otherwise wouldn’t elect to use the county’s healthcare benefits to set up an account for medical uses with that money.
They said other the elected officials in the county were involved in the process and did not raise any objections.
Herald records show that Beaton did object to a series of unrelated pay increases voted on that day though. Those increases were set to be effective during their next terms.
Didier and Mullen later said they believed the benefits vote was an issue that needed to be looked into.
In 2023, Beaton came to the commissioners to discuss a policy review that he believed indicated these payments were unconstitutional. Beaton has been the county’s auditor since 2011.
The Municipal Research Service Center article is not a legal opinion, but served as the basis for the county to pursue a review by the AG’s office. The MRSC is a nonprofit dedicated to helping local governments in Washington by providing legal and policy analysis.
Koch and Miller were no longer on the board at that time. Peck was still serving alongside Didier, elected in 2018, and Rocky Mullen, elected in 2020.
Didier and Mullen elected to take the county’s health insurance during their time on the board.
Peck resigned on Dec. 31, 2023, citing bullying and workplace toxicity. Stephen Bauman was appointed to fill his seat and won his first full term in November.
What did the AG look at?
The attorney general’s office reviewed three key areas:
- Can commissioners increase county contributions to their own health benefit plan in the middle of their term?
- Can commissioners enact mid-term increases to cash payments to themselves when the payments equal the value to the cost of health benefits the commissioners opted out of receiving?
- Can an incumbent commissioner enact a conversion of health benefits to equivalent value cash payments after winning the November election but before the new term of office begins?
The AG’s office determined that while changes to a health plan does not necessarily constitute additional compensation, the changes are subject to timing restrictions that bar changes during their term.
They deemed the conversion to a cash payment made in lieu of a health plan as a form of compensation, and said that the same areas barring mid-term changes must be respected.
The analysis said that while their question was about a specific scenario, the opinion is intended only to provide a legal analysis and should not be taken as advice on whether a specific action was lawful.
That means the decision to convert the benefits payments into a cash benefit did turn it into an increase in compensation, which should not have been voted on during a term of office.
Had they finalized their benefits process and taken the vote two weeks earlier, the commissioners likely would have been in the clear.
Peck and Koch also had just been reelected, meaning the changes to the benefit packages, which would have started Jan. 1, 2017, would have been effective after their new terms began. The AG’s analysis focused on election day, rather than when terms began.
Peck was challenged by Beaton in that race to retain his seat and Koch defeated Mullen.
What happens now?
It is unclear what the county’s next step is.
In their joint statement, the former commissioners noted that “elected officials acting in good faith have immunity from civil or other penalties for their actions in office.”
The former commissioners said potential remedies could include paying back the county for the health care stipend dollars received or working with the county to put the correct amount of money into a health savings account.
The current board of commissioners were previously told by their legal counsel that because this money was already taxed, it is possible the county could actually end up paying them more, equal to the pre-tax value, when attempting to move it into a health savings account.
The benefit plan still exists in a reduced form after commissioners made major changes to it last year in an attempt to shore up the county’s budget. They also created separate benefits pools for elected officials and another for commissioners, so that any future changes could be done by group.
This story was originally published April 18, 2025 at 4:56 PM.
