Hampshire Council of Governments’ insurance, pension payments in question

  • The Main Street entrance to the Hampshire County Courthouse in Northampton, home to the Hampshire Council of Governments. Photographed Wednesday, April 17, 2019. FILE PHOTO/KEVIN GUTTING

Staff Writer
Published: 7/17/2019 5:41:05 PM

NORTHAMPTON — As the Hampshire Council of Governments continues the process of dissolving, large questions still loom around the organization’s pension liabilities and insurance payments.

Chairman Rus Peotter confirmed Monday that the organization is only able to commit to paying insurance premiums to the Hampshire County Group Insurance Trust through the end of August. If the council does not make those payments, employees and retirees would lose their health care through the trust.

The council also has an estimated $5.9 million in pension liabilities, according to a recent estimate from the Hampshire County Retirement System. The council has yet to make its payment on those liabilities for this year, but any missed payment will not affect any pensioners’ benefits.

Patrick Brock, the chairman of the Hampshire Retirement Board, confirmed that benefit payments will not be affected by any nonpayment by the council. He said pension benefits are a contractual guarantee by employers, and the system guarantees they get paid out.

“The question is who is responsible for the unfunded liabilities that the (Hamsphire) Council of Governments is leaving behind,” he said.

Plans fell through

The council planned to be out of business completely by the beginning of this month. In April, Peotter and Executive Director Todd Ford went public with plans to sell off the assets of the organization, which is the successor to the Hampshire County Government. Its headquarters are in the old Hampshire County Courthouse in downtown Northampton.

But those plans have fallen through, according to Peotter.

“We are in this place where we have to continue to exist, and at some point — it’s a horrible position to be in — to balance what bills we’re going to pay,” Peotter said.

And when faced with the possibility of people losing their health insurance, Peotter said HCG decided to pay its insurance premium. However, the council still hasn’t made its July insurance payment, which is due on the first day of the month with a grace period of two weeks. That grace period ended on Tuesday.

“Right now they’re in the period where we’re going to be assessing them a late payment fee,” said Joe Shea, the insurance director at the Hampshire County Group Insurance Trust. If the council fails to make that payment by July 31, Shea added, “we have the right to cancel the insurance.”

There are around 40 retirees who rely on that insurance, Shea said.

Poetter said the council failed to make the insurance payment because of an error, and would be making payments for both June and July on Thursday.

“The bottom line is, the retirees don’t have to worry about their pension and they don’t have to worry about any changes to their health care until Sept. 1,” he said.

Legislative control

The council owns the Hampshire County Courthouse and several energy businesses and runs programs like the Regional Purchasing Co-op and the Hampshire-Franklin Tobacco-Free Community Partnership. The council has had success transferring most of its programs and employees to other entities, Ford said, though it has laid off two workers.

When Peotter and Ford pitched their plans for the future in April, they said the first step was to sell off the courthouse and energy businesses and to put those funds into a trust to pay liabilities. But the organization has not sold either yet.

“That plan is not how things have worked out,” Peotter said.

Because the 1767 deed for the land says the courthouse has to be used for a public purpose, it’s unclear who besides the state would purchase the building.

Peotter and Ford said that the situation now rests in the hands of the local legislative delegation to solve.

“I have not been driving this bus,” Peotter said. “This has been guided largely through the offices of the delegation — principally through (state Sen.) Jo Comerford’s office.”

Comerford did not respond to multiple requests for comment, and her chief of staff, Jared Freedman, declined to answer any questions about the council’s situation and what legislative fixes may be in the works.

On Wednesday, Peotter said Comerford’s office told him that the senator would be filing legislation soon.

Worrying

Whatever the solution might be, the fallout from the situation already has some worried.

Brock, the chairman of the Hampshire Retirement Board, said that if the council doesn’t make its pension payment — and he doesn’t have confidence that the organization will — it puts the retirement board in hot water with state regulators from the Public Employee Retirement Administration Commission.

“It makes us look very bad,” Brock said. “I just think the Council of Governments is walking away from these benefits without any concern whatsoever.”

One of the retirees who relies on that insurance is Geoff Rogers, who retired from the council around three years ago.

“Of course it worries me,” Rogers said. But he doesn’t think there is a high likelihood that the situation will get bad enough that his insurance benefits will be cut.

During his 23 years working with the county, and later the council, Rogers said “there was almost never a time when we weren’t walking on a tightrope between solvency and disaster.” The situation feels more immediate right now, he added, but it’s nothing new.

More disappointing to Rogers is what he sees as the state’s failure to financially support regionalization after county governments were dissolved some 20 years ago.

“The whole thing is very sad,” he said.

Dusty Christensen can be reached at dchristensen@gazettenet.com.


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