PITTSFIELD, Mass. — BRPC is trying to get ahead on its "other postemployment benefits."

 

In 2009, Massachusetts passed a law requiring government agencies to disclose the liability. OPEB consists mostly of health insurance for future retirees and the focus of most agencies is to start a trust fund, which will eventually be used to pay those benefits — pulling that annual expense from the operating budget.

 

Berkshire Regional Planning Commission is no different.

 

With some 20 employees, it is estimated that the agency will be liable for some $1.2 million in total. Executive Director Nathaniel Karns said the organization allocates money every year to the trust fund in hopes to eventually have a large enough account to pay future retiree benefits from it. Currently, the organization pays it retirees from the operating budget.

 

"Absent the OPEB long-term liability, our net position would be over $300,000 on the positive side. While not an immediate cash-flow problem, this obviously is not sustainable over a period of a number of years which is when that cost would move from being potential to being real," Karns wrote in a report on the commission's financial status. 

 

"While we are trying to cushion that by establishing and partially funding a health insurance trust, the amount needed to fully fund for the potential future liability would drive the overhead rate into a position that continued operations would be at severe jeopardy."

 

From 2014 to 2015, the commission's current assets — mostly contracts for service — grew by $104,392. The current liabilities increased $100,254. Overall, the current assets of $680,550 surpass the current liabilities of $591,183.

 

However, when the long-term liabilities and assets are factored in, the bottom line shows a deficit of $976,152. That is mostly driven by the $1.2 million in OPEB. 

 

In total the organization has $986,193 in assets made up of the $680,550 projects and cash, $275,000 in a revolving loan fund, and $30,643 in capital assets.

 

In fiscal 2015, the organization has $1.9 million in total liabilities that includes OPEB, a contingency fund, accrued leave, pensions, and payroll and other accounts payable. If the $1.2 million for OPEB was not required to be reported, the organization would show close to a $300,000 surplus.

 

The agency paid $74,906 into the trust fund last year to continue diminishing that liability. Karns said the commission pays into the fund quarterly based on what it can afford while still keeping the appropriate amount of cash flow.

 

BRPC is not alone in trying to tackle what appears to be a daunting liability picture.

 

The city of Pittsfield is estimated to have some $250 million in OPEB liabilities and, in 2014, established its own trust fund. In May 2015, the City Council approved the first allocation of $100,000 toward it. Lenox has been a little more aggressive with a $500,000 allocation in fiscal 2015. 

 

BRPC's management is on par with what other communities are doing and an auditor gave the organization a clean bill of fiscal health. 

 

"We again have no findings, which is always the first thing to look for. There were a couple of minor recommendations," Karns said.

 

So far in 2016, Karns is predicting a "tougher financial situation" than last year but the organization is $10,250 in the positive for net income and there is always the possibility to dip into a line of credit for late payments on contracts or delayed payments after service. 

 

"We started the year with some concerns about the budget for the year. For the immediate terms those are OK," Karns said. "It is a tougher financial situation. We don't have the larger, multi-year contracts."

 

The organization runs on a $2.9 million budget and so far has received $1.4 million in total revenues and spent nearly all but $10,254 of it. Karns said management-wise the commission needs to be flexible because it is now working with many short-term contracts with municipalities and few long-term projects.

 

"We continue to see a shift in areas of emphasis for projects and programs during the course of FY 2015 and a continued decline in federal and state programs which directly support regional planning agencies and which is reflected in the decrease in revenues from what was budgeted prior to the start of the year," Karns wrote in the report. 

 

"Conversely, the amount of work done under contract with our municipalities continues to increase. These tend to be shorter duration contracts than some of the previous federal programs and thus we need to be more adaptable to changes in the type of work and how we deliver it."

 

Overall the organization is in the black annually but the margins aren't enough to eliminate the long-term liability concerns in quick order.