CRMC Board Chair Said Cookeville’s Retirement Repayment Plan Is Fair

The Cookeville Regional Board of Trustees chairman said that the retirement repayment option agreed to by Cookeville City Council makes the most sense.

Allen Ray told the finance committee Tuesday after the retirement oversight was discovered recently, the medical center wants to do everything possible to rectify the situation.

“I think we all, whenever we found this out two years ago I think it was,” Ray said. “We were determined then that we were going to make it right, so I think scenario three just makes it right and it’s what we’re going to do.”

Scenario three details that all assets from Cookeville would be moved over to Cookeville Regional. In addition, the city will be reimbursed for the money it paid and estimated lost investment earnings.

The city requested an actuarial analysis to assist the city in determining how much money had been paid into the Tennessee Consolidated Retirement plan on behalf of medical center employees. That resulted in three possible repayment scenarios.

CEO Paul Korth said that in paying back the city, it would be about a $600,000 impact on the hospital. However, Korth said he didn’t think it was a true impact as those were liabilities they needed to pay in the first place. In addition to paying back the city, Korth said paying for Cookeville’s lost investments would be an additional $550,000 for CRMC.

Offsetting the city’s contributions plus investment earnings would reduce Cookeville’s rate by 10.54 percent, and would increase CRMC’s rate by 11.45 percent.

Korth said that in agreeing to scenario three, Cookeville City Council has also made a pledge to CRMC’s benefit.

“And they’re going to do that I think in the form of a resolution,” Korth said. “Which we’ve had a draft copy of which will be at Thursday evening’s meeting. That resolution will basically to fix the in lieu of tax number at $700,000, for a period through July 1, 2028.”

The Cookeville Regional Board of Trustees expected to make a final decision Thursday.
Cookeville has called for a special meeting on Friday morning to vote on both the resolution and the agreement to fix the in lieu of tax payments.

CRMC and the City of Cookeville split in 1999. Several hundred employee accounts were transferred from the city to the hospital. However in moving the accounts to the hospital, employees from before 1999 were still on Cookeville’s accounts.

Korth said one thing he wanted to emphasize, was that individual’s TCRS funding would not be affected by any resolution.

“In no way, shape, or form does this affect any individual’s accounts,” Korth said. “Whether be at the city or whether it be at the hospital. Everybody’s 100 percent funded, everybody that’s in the TCRS program is going to get their TCRS money when they retire.”

TCRS, Cookeville, and CRMC must all agree on a resolution by June 30th for it to take in the 2022-2023 budget.