MASSENA -- The town of Massena is set to pay back millions of dollars to New York State in the form of a pension liability that remains from Massena Memorial Hospital, despite selling the health care facility to St. Lawrence Health in January 2020.

According to Town Supervisor Sue Bellor, the town is slated to pay back around $5 million beginning in 2025 with an interest rate of 7%.

That means the town will pay $383,214.24 every year for 30 years.

Town officials said during the Sept. 19 board meeting that the funds will have to come from taxpayers unless action is taken in Albany to assist.

In January of this year, town officials passed and signed the "home rule for state legislation," which they said would give the town expanded bonding authority to cover up to $5 million of the pension liability.

Despite the town's best efforts, it appears a lack of action in Albany is going to end up costing taxpayers hundreds of thousands of dollars each year to settle the trailing liabilities from the hospital sale.

Town officials previously approved spending $1.7 million to cover a worker's compensation debt to the county as well, taking a big chunk out of the town's fund balance.

Bellor said those efforts are putting the town in a financial crunch.

“We tried for two years with the Senate and Assembly to try to get a resolution so that we could pay our hospital pension debt back at a better rate, and it has not passed both houses two years in a row. So, therefore, next year we need to start paying back the hospital pension debt each month,” she said.

She said the plan is for 30 years barring "some kind of miracle that comes across to help us out."

The town board previously voted to authorize bonding to cover the debt in 2022, but Town Attorney Eric Gustafson said the town was not "actually in a position where we’re ready to issue bonds to respect any of the potential liabilities in the hospital."

At the time, he suggested the town hold out for the pending state legislation that could have assisted the town with the debt.

If passed, the bill would have expanded the town's borrowing capacity under the local finance law, he said.

With Albany seemingly unwilling to take action, town officials also took action to approve a resolution that would allow the town to exceed the 2% tax cap if necessary.

Deputy Supervisor Pat Facteau said given the financial predicament with pension repayment beginning in February 2025 and increased insurance costs for retirees, the town very well may need to exceed the tax cap.

"We're paying out over $300,000 each year for the pension, plus the insurance costs are pretty much doubling. It's very possible we need to exceed the cap," he said.

Facteau commented that in a recent training for town supervisors it was recommended by state officials that all municipalities at least approve a resolution to allow local governments to exceed the cap given the current economic climate.

Repayment of the hospital pension will begin four years after St. Lawrence Health took over ownership of the facility. Taxpayers voted in Nov. 2019 to approve the sale by a margin of 1,963 to 174.

The change in ownership came months after Massena Memorial Hospital board members, along with the town board, agreed to a management and operations agreement with St. Lawrence Health that saw SLH take over management, operational strategy and guidance of the hospital.

That agreement was approved by the state Department of Health in June 2019, along with a $20 million grant from New York's Statewide Health Care Facility Transformation Program as the facility transitioned from a municipal hospital to a private non-profit controlled by SLH.

Adding to the town's financial crunch will be a significant increase in health care costs for retirees and employees in 2025.

Bellor said the town recently received notice from insurance companies that the town would be paying a "big, big jump" in healthcare costs.

The rise in expense comes one year after the town entered into the Broome County Healthcare Alliance, an association organized by Broome County that covers over 6,000 retirees through a healthcare program that is negotiated on behalf of multiple counties and municipalities.

The Broome County Healthcare Alliance program includes medical paid in full with no co-pay for members, along with a $0 co-pay on generic medications, $5 co-pay for brand name drugs and $20 co-pay for non-preferred brand name drugs.

Bellor said the rise in insurance costs came as a surprise to the town board but noted it would have to be dealt with when town officials set the budget for next year.