Legislation would block St. Clare’s Corp. dissolution

Santabarbara, Tedisco say move would aid efforts to recover 1,100 ex-employees' pensions
Ellis Medicine McClellan Street Health Center, the former St. Clare's Hospital, is pictured.
Ellis Medicine McClellan Street Health Center, the former St. Clare's Hospital, is pictured.

Categories: Business, News, Schenectady County

Legislation being introduced Thursday would block the corporate remnant of the defunct St. Clare’s Hospital from dissolving until its pension crisis is investigated.

The proposal by Assemblyman Angelo Santabarbara, D-Rotterdam, and state Sen. James Tedisco, R-Glenville, in some ways seems like a long shot: The action they seek — a review of the pension crisis by the state Attorney General’s Office or state Comptroller’s Office — already has been rejected by both agencies.

There also has been no indication that the state Department of Health, which prompted the shutdown of the Schenectady hospital in 2008, plans to investigate. Nor have state officials shown any willingness to provide any of the estimated $53.5 million needed to restore full pension benefits to the 1,100-plus retirees who recently saw their payments reduced or eliminated.

Finally, Tedisco holds little sway with the Democrats who control the Senate. 

Nonetheless, he’s had some past successes as a minority legislator, and he said Wednesday he’ll get a boost in trying to finesse the bill through the Senate if Santabarbara gets it approved in the Assembly.

Tedisco also said he’s hearing indications that the Attorney General’s Office, which must review proposed dissolution of any non-profit organization, and is now reviewing the St. Clare’s Corporation motion, is looking more closely at the matter than previously suggested.

It’s in everyone’s interest to keep the corporation intact until a better understanding of the causes of the pension crisis is reached, he added.

“It’s just hard to let this thing evaporate without knowing what happened,” Tedisco said Wednesday. “We’ve got to stop that from happening.”

Leaders of a pensioners group have said that keeping the corporation intact will allow easier disbursement of funds should a bailout be secured.

Santabarbara said Wednesday he wants the corporation to be part of the solution, rather than walk away from the problem.

More parties working from more angles will be more likely to succeed and get money back for the people who were promised it and now need it for their living expenses, Santabarbara said.

“We haven’t given up on fulfilling these pensions,” he said. “We haven’t given up and they shouldn’t give up, either.”

The plan by Santabarbara, Tedisco and other state legislators to seek a partial pension fund bailout through the recently approved 2019-2020 state budget fizzled when no other partner was secured to share the expense. 

“There’s a lot of things happening right now — this may be the first of several pieces of legislation,” Santabarbara said. 

The solution will be easier if the St. Clare’s Corporation is part of the picture, he added. And he, like the pensioners, fundamentally wants to know what went wrong, and how, and why.

“At the very least, they deserve to know what happened here,” Santabarbara said. “We may find something in the report that shows maybe this could have been prevented.”

Corporation and former hospital officials have said the cause of the problem is straightforward: No money has been paid into the pension fund in the decade since St. Clare’s closed and very little was paid into it in the decade before it closed — even as millions in pension benefits were paid out to retirees. On top of that, a previous state bailout lost value in the Great Recession.

St. Clare’s officials long ago opted out of the federal pension insurance system using a loophole for church-affiliated hospitals. This left no safety net for the 1,100-plus retirees as the shortfall reached the crisis point.

Santabarbara’s and Tedisco’s legislation (A.7503/S.5596) would require the state Department of State to delay the issuance of a certificate of dissolution for the corporation until the Health Department, attorney general or comptroller can audit and/or investigate whether there were improprieties with the St. Clare’s pension fund. 

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