Language Changes Delays Action on Insurance Borrowing

NORTH ADAMS, Mass. — The City Council delayed action on Tuesday on a home-rule petition to borrow or amortize up to $880,000 at the request of the mayor.

Mayor Richard Alcombright said he'd received new language on the petition from state Department of Revenue just minutes before the council had scheduled a special meeting at 5 to act on the matter.

The borrowing, or amortization, would allow the city to pay the runout of the Medical Insurance Trust Fund for fiscal 2010. The city is dropping its self-insurance plan at the beginning of the fiscal year on July 1 in favor of similar coverage for its public employees through the Massachusetts Interlocal Insurance Association.

"We wanted to get this ... in front of the Legislature and Sen. [Benjamin B.] Downing so they could get this Legislation out more quickly and approved more quickly," said Alcombright. "We sent the language to the Department of Revenue along with Rep. [Daniel E.] Bosley and Downing and thoguht everything was OK."

The modifications appeared minor but substantial enough that the mayor said he didn't want to amend the original draft; the DOR also wanted to discuss the language with him. The council postponed the matter until its regular meeting on May 11.

Among the changes was a reduction of the amount to $850,000, reduction of the borrowing time from seven years to five and expansion of DOR rights over the borrowing and disbursement procedures.

The mayor said he didn't expect the entire amount to be borrowed. Whatever is in the Medical Insurance Trust Fund at the end of the fiscal year will be used to reduce the amount, as well any leftovers once all the runout is paid for.

The former administration had underfunded the insurance account for at least several years, requiring more funds to be placed in the account, according to state law.