The City of Colorado Springs and the Public Employees Retirement Association have agreed to drop both lawsuits in the ongoing legal battle about Memorial Health System exiting the PERA retirement benefits program.
The city will re-file its suit, which claims it doesn’t owe any money to PERA, in Denver District Court. In the city’s view, Memorial’s employees are no longer city employees and therefore no longer part of PERA. In PERA’s view, the city owes about $220 million to settle current and future retiree benefits. It filed suit in Adams County Aug. 31, against the city, Memorial, UCH and Poudre Valley Health Center.
But the two have reached an agreement to keep the $259 million in proceeds from the Memorial Health System – University of Colorado Health lease in an escrow account until the issue is decided in Denver District Court.
“The creation of a court-supervised escrow account to secure the funds is appropriate and now the court will decide how much is owed to PERA for the retirement benefits already earned by Memorial employees,” said Gregory W. Smith, PERA’s interim executive director. “All along it has been PERA’s goal to ensure that this transaction does not negatively impact the employers and members in PERA’s Local Government Division Trust fund.”
PERA also agreed to remove UCH from its lawsuit, and to stop attempts to keep the lease agreement going forward Oct. 1, the date UCH will take over Memorial.
“We are very pleased to have successfully removed the last major uncertainty with regard to the exciting new partnership between the city and UCH for the operation of a world-class health system in Colorado Springs,” said City Attorney Chris Melcher in a press release announcing the agreement. “The community and Memorial can now focus without any further distraction on a smooth transition of the health system, the creation of a new branch medical Campus at UCCS and a bright future for higher levels of health care and potential economic development in our community.”
The development provides “reassurance to Memorial employees, the physicians, the patients and the entire community that the trust and overwhelming support shown for this new partnership was justified and will move forward on schedule,” according to the press release