Friday, August 22, 2014

Memorial Health System money shows tiny gain for city

Posted By on Fri, Aug 22, 2014 at 2:47 PM

click to enlarge ROBERT HUFFSTUTTER
  • Robert Huffstutter
Earlier this summer, we got to wondering how much all that cash the city received for leasing Memorial Health System was bringing in, and whether it is earning enough to cover the interest obligation the city is incurring by continuing its legal fight with the Public Employees Retirement Association.

Here's a recent report we did on that growing interest obligation. One of the upshots of that report was this:
Retired District Judge Harlan Bockman denied the city's motion to appeal his Feb. 10 ruling that found the city should have followed the statutory process for removing Memorial Hospital's workers from PERA before doing so.

Instead, the city simply switched them to the University of Colorado Health, which leased the city hospital in October 2012 for 40 years and paid the city $185 million specifically for PERA.

PERA attorney Adam Franklin says the city owes $190 million, plus interest at $1.5 million per month (a total of $215 million so far) for those employees' retirement plans.
So, we asked for the balance of the $259 million the city received. We were given two accountings, because the city split the money up into two escrow accounts.

Into one, the city placed $50 million. That account now is valued at $50,195,041. The other was created with the remaining $209 million, and now contains $209,815,336. So that's a gain of $1,010,377 since the accounts were created in October 2012. Or 0.39 of 1 percent, over a 21-month period. 

That's less than the city has spent on lawyers in the PERA case. Last we checked in February, the city had spent $1.6 million on attorneys in the case, with most of that going to Mayor Steve Bach's favorite law firm, Hogan Lovells.

Hey, we're no math whiz kids here, so we'll attach the reports provided by the city in response to our Colorado Open Records Act requests:

06-June_2014_-_UCH_CITY_PERA_Indemnity_Account_48212401_Redacted.pdf 06-June_2014_-_UCH_CITY_PERA_Indemnity_Account_48212401_Redacted.pdf
The case is due for trial in October.

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