Louisville lawmaker says state should keep doing business with Seven Counties Services

07/30/2014 08:17 PM

Rep. Julie Raque Adams, R-Louisville, says the state needs to keep contracts with Seven Counties Services in place and provide a way for the mental health agency to pay their obligations to the retirement system.

Adams said while there is active litigation between the pension system and Seven Counties Services the state should determine the actual cost the agency owes for retirees and figure out a way for them to pay the obligation and then continue working with the agency.

“Going forward they should be allowed to continue the good works they’ve always done,” Adams said.

Seven Counties Services was granted leave from the pension system in June through bankruptcy proceedings as their portion of the pension payments grew to nearly 40 percent of payroll. In the 2014 budget process the General Assembly provided $19 million to other mental health agencies — not counting Seven Counties — to help them meet increased pension costs.

The Kentucky Retirement Systems actuaries estimate that Seven Counties owes roughly $90 million in liabilities to the system. But Adams said she’s not sure that number is what is owed.

“I think that the $90 million is in dispute as well. Seven Counties has made every single contribution required of them to this point — before they had to file for bankruptcy,” Adams said. “The problem is we have these agencies that are so vital to our most vulnerable citizens, because you can’t pay 40 cents of every dollar into a pension system and think they’re going to be able to keep serving the most vulnerable in our communities.”

Legislators on the Government Contract Review Committee, who earlier this month did not approve a $3.7 million 2-year contract with the agency, have been meeting with Seven Counties Services about future contracts. And lawmakers have been indicating optimism on coming to an agreement with the mental health provider.

“I think that they understand that there is still a requirement there. That they are still going to have to participate in — and the two are not mutually exclusive. I think that everybody can win here, but I think that the game of punishment and retribution should be over,” Adams said.


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