The Whitley County Health Department’s Board of Health is waiting to see what happens in next year’s upcoming legislative session before deciding what to do regarding its pension obligation to the state retirement system.
House Bill 1 was passed during a special legislative session last year, and gives quasi-government agencies in Kentucky, such as health department, regional universities, and community mental health centers, until April 30 to decide whether to stay in the Kentucky retirement system or get out of it.
The legislation gives agencies the option to pay a one-time fee to cover their pension obligations or to space out those obligations over a 30-year period with payments for interest.
The health department had to contribute 49.47 percent towards employee retirement during the 2018-2019 fiscal year, which amounted to about $975,000 in payments to the state retirement system, CPA Charlie Phillips told the board of health during a special meeting Monday evening.
If the health department were to close this year, it would still owe the state a $20 million pension debt, which the health department doesn’t have sitting around.
Whitley County Public Health Director Marcy Rein told the board that she recently received an e-mail informing health departments to expect the pension contribution rate to increase to 93 percent next year.
Rein said that a lot of health departments are planning to take no action regarding the two options provided under House Bill 1, and instead those health departments are just preparing to pay the 93 percent pension costs.
Rein added that it would cost the health department $1,500 to get an estimate from the state on exactly what its pension obligation would be, but state officials have noted they have obligation to actually charge health departments and other entities what the estimate is.
It is speculated that the Kentucky General Assembly may take some kind of action during its legislative session next year to provide some form of pension relief to quasi government agencies.
Also during Monday’s meeting the board of health accepted audits of the Whitley County Health Department and the Whitley County Public Health Taxing District for the 2018-2019 fiscal year, which were done by Phillips’ firm.
“You have the standard clean opinion … that is what you strive for,” Phillips noted.
The health department has $2,179,000 cash in the bank of which $1,452,000 is unrestricted funds. The health department had $5,513,000 in total revenue last fiscal year, which while down from the previous year still produced an excess of $164,000.
“That is getting harder and harder to get because of the way they are restructuring Medicaid,” Phillips noted.
Board Chairman Dr. David Williams asked if the board should be scared yet due to the funding and debt situation?
Phillips noted that the health department had succeeded having another year where it still had excess revenue, which means that it is still doing well.
As a way to possibly generate additional revenue, the board discussed the possibility of leasing out 1,500 square feet of office space in the basement of the health department in Williamsburg, which includes nine offices as the space is currently configured.
There are still various logistical hurdles that must be cleared first, such as how to secure the basement office space and keep it separate from the rest of the building.
There were initially discussions about a medical program possibly using that space for some kind of clinic, but Rein noted it would be cost prohibitive with estimates between $60,000 – $100,000 to convert the space for clinic use.
“Hopefully we will get somebody in there and get some income from that,” Rein added.
In other business, the health department approved $500 Christmas bonuses for health department employees, who have been there at least six months.
Rein requested the bonus noting that staff didn’t get any pay increases this year. In addition, the cost of employee insurance will be going up about $20 per month next year, and health insurance deductibles are increasing by $250.
The cost of the bonuses will be about $19,000.