Legislators approve Seven Counties contracts amid optimism; Negotiation meeting days away

08/12/2014 06:39 PM

Lawmakers on the contract review committee approved state contracts with Seven Counties citing a new found optimism over talks with the mental health agency paying their liabilities to the pension system.

Seven Counties Services has been talking with lawmakers who sit on the interim Government Contract Review Committee after the state dropped a contract with the mental health provider expressing frustration over a bankruptcy ruling allowing the Seven Counties to leave the shakily funded retirement system.

Lawmakers want Seven Counties to pay their portion of their pension liability, but at dispute is what is owed to the state. Actuaries for the Kentucky Retirement Systems say they owe $90 million in liabilities, but so far a federal judge has not order them to pay a cent.

On Tuesday the committee approved three contracts with Seven Counties after a careful round of questions to the Cabinet for Health and Family Services, who contracts with Seven Counties. Legislators questioned if there were alternative providers and how long it would take for the providers to transition services if the contracts were to be disapproved.

Five lawmakers on the panel will begin meeting with Seven Counties in a form of closed-doors negotiations, and because of those talks several members of the committee expressed optimism for resolution.

The end game of the talks is to define Seven Counties liability to the pension system and to figure out how and how much would be repaid, said Rep. Brent Yonts, D-Greenville.

Sen. Chris McDaniel, R-Taylor Mill, said that he is hopeful the meetings can create mechanism for Seven Counties and other agencies hoping to leave the retirement system with a calculation for determining the liability.

In the last session McDaniel brought a mechanism bill which passed the Senate but was never taken up in the House. McDaniel said he hopes that legislation can provide “a working platform”
for the talks.

Whatever is worked out with Seven Counties McDaniel’s says the retirement system will have to be “comfortable”, but he said he believes the final number would be assessed after legislation passes — which is different from what Yonts suggested in his interview.

After an initial meeting with the working group Seven Counties has requested a sit-down meeting with Gov. Steve Beshear, who has said if the agency does not pay their liabilities then the state should find other vendors.


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