State still looking to take contracts away from Seven Counties, Beshear says

08/21/2014 03:57 PM

As lawmakers on the Government Contract Review Committee have been coming to the table with Seven Counties Services, Gov. Steve Beshear says it does not change the current state of relations with the mental health agency and the executive branch.

Legislators and Seven Counties executives met on Friday in what they called an “educational and productive meeting” between the groups.

Earlier in the month, lawmakers on the panel said they would meet to “negotiate” the unfunded liability Seven Counties owes to the Kentucky Retirement Systems.
Actuaries for the Kentucky Retirement Systems say they owe $90 million in liabilities, but so far a federal judge has not ordered them to pay a cent.

Gov. Steve Beshear says there are no negotiations taking place between the state and the mental health provider.

“We’re not in any negotiations with Seven Counties. They indicated they wanted to talk to us, so we’ll talk to them. But we’ve got that bankruptcy situation that they’re putting our retirement system in a serious situation and so we’ll be looking in return to finding other folks to do the kinds of services that they do,” Beshear said.

House Speaker Greg Stumbo, D-Prestonsburg, said “everything should be open and on the table” when it comes to Seven Counties and dealing with the pension system.

The Kentucky Retirement System is rated among the worst in the country with around $17.6 billion in unfunded liability. Something Stumbo says has been an “error” in management. But he said he’s unwilling to let any agency walk away with both assets and liabilities.

“There have been some errors in the way that system has been managed and the economy is a factor…that will get better with the oversight. But we can’t let people get out of this system with their assets and their liabilities,” Stumbo said.

During the 2014 regular session, state Sen. Chris McDaniel, R-Taylor Mill, brought a mechanism bill which passed the Senate but was never taken up in the House that would have essentially created a pathway for agencies to exit the pension system.

“I think anything that’s on the table, we should look at it. I know that bill didn’t get very far — pension problems won’t go away. We should figure out how to address them,” Stumbo said.

“We were the first state to pass pension reform and fund it. If the legislature continues doing that and the results on their return improve and the economy gets better…the outlook’s not going to be near as bad.”


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