Ouch. That's Gonna Leave a Mark
The long awaited audit of the North Adams' self funded health insurance plan is in, and preliminary reports are that the city owes
the insurance trust fund a BIG chunk of change.
I have no hard figures yet, but I will post them as soon as I get them.
If you have no idea what I am typing about, look through these prior posts
and look for the related ones.
OK, a solid source says that the auditor found that the city underfund the trust fund by $1.1 million dollars over '08 and '09.
Based on my understanding, that means the employees, who were on the hook for 30%, are owed $330,000 for just the past two years. The total amount may be considerably more.
[see update 2 - that money belongs in the trust fund, not to the employees.]
The auditor reportedly confirmed that although this audit was only for two years, the improper method of calculation used by the Barrett administration has been used by the city for many, many years.
Damn...... Playin' games with the books to squeeze every penny has apparently bit the city in the butt BIG TIME!
give their thoughts.
The report is now online
via Tammy at iBerkshires.
Reading it, I've come to a couple of conclusions -
1) The Auditor says that for the years studied, there should have been a surplus in the trust fund. To do this both sides would have had to contribute more.
2) The city did not even come close to meeting it's 70% obligation under contract, which makes up 95% of the deficit.
3) I am struck by the Transcript's incredibly simplistic interpretation of these numbers. Without the context of the 70/30 split, the damage is grossly misrepresented.
Because the city is the carrier, it is the city's obligation to pay what is owed into the fund, and to charge accordingly. Because the city's underpaid share is WAY out of wack from the 70/30 ratio, it clear that the North Adams Teachers Association is vindicated in their charges.
If the old, and now deemed improper, version of accounting is used, the employees were severely overcharged. If the fund had been properly funded, the employee contribution was close to correct.The employee share of the $1.1 million deficit is only 5.5,% NOT 30%. Hence, even in a generous reading of the numbers, it is very clear that the city knew they were not living up to their end of the contract.
It is also odd that the Transcript relied heavily upon former Mayor Barrett's interpretation of this. He plays games by confusing the number of years involved in the original charge versus the number of years studied and is not called out on it.