The citizens committee looking at whether the City Council should submit a ballot measure to voters in April about Memorial Health System has postponed the idea until the November election, says Memorial spokesman Brian Newsome. But the reason isn't entirely related to the incredible $245 million cost to leave the Publie Employees Retirement Association.
Newsome released the following statement after this morning's task force meeting:
On Monday, the Mayor’s Task Force responsible for helping Memorial to become an independent nonprofit learned that PERA, the retirement organization for Memorial employees, expects to be owed roughly $246 million if Memorial were to change ownership and become anything other than
a city enterprise. This number is ten times greater than the highest estimates of what it might owe the public pension organization.
This news is not driving the decision by the task force to postpone a ballot initiative to November. The task force made that decision in order to better inform the community about what is being proposed. The group concluded that more time was needed to explain what a community nonprofit is, the value it can provide, and why a change is necessary for Memorial's long-term viability.
Memorial believes the legal and actuarial assumptions that PERA used in reaching its calculation require additional diligence and examination, and we will be working closely with PERA in coming months in search of a workable resolution. We remain hopeful that, with more time, this issue will be resolved and a proposal to make Memorial into a community nonprofit will be put to voters in the November election.
$245 million. That's right. It will cost Memorial Health System $245 million to get out of the Public Employees Retirement Association system, according to a presentation made minutes ago at a meeting of a task force putting together a ballot measure for Memorial.
The measure would ask voters permission to convert the city-owned system to a independent nonprofit agency. To do that, Memorial would have to bail from PERA, because the retirement program covers government workers, but not those of nonprofits.
Mayor Lionel Rivera has said if the PERA figure was too big, the City Council might not place the measure before voters in April as planned.
Stay tuned for more updates.