City of Colorado Springs / News

City successfully removes last road block to Memorial partnership with UCH
Friday, September 07, 2012

The City is pleased to announce that it has successfully negotiated with PERA an agreement not to seek to delay the Memorial partnership with University of Colorado Health.  The parties today completed and signed an agreement in which PERA withdrew their request for injunctive relief regarding the Memorial Lease; PERA agreed to dismiss UCH from its current lawsuit and to not name UCH in any future lawsuit and PERA agreed not to seek to undo or invalidate the City’s partnership with UCH to operate the Memorial Health System. As part of the agreement, the parties will place the initial proceeds from the UCH transaction in the amount of $259 million into escrow to be supervised by the court pending the final resolution of the dispute between PERA and the City regarding the Memorial employees’ transfer to new employment with UCH.

The City had announced its intention previously to place the $259 million initial payment from UCH in segregated accounts pending resolution of any issues related to the transaction, including any PERA issues, for a period of up to five (5) years. Today’s arrangement is consistent with the stated intention as presented to the voters and the community regarding the use of the lease proceeds. PERA and the City further agreed to voluntarily dismiss their respective lawsuits in Adams County and El Paso County on the PERA issues, and allow the City to refile its declaratory judgment action in the Denver District Court.  The City will retain all rights to raise the facts and the law associated with its view that the UCH partnership will not create any obligation for the City to provide additional payments to PERA.

City Attorney Chris Melcher provided the following comments:  “We are very pleased to have successfully removed the last major uncertainty with regard to the exciting new partnership between the City and UCH for the operation of a world-class health system in Colorado Springs. The community and Memorial can now focus without any further distraction on a smooth transition of the health system, the creation of a new branch Medical Campus at UCCS, and a bright future for higher levels of healthcare and potential economic development in our community.  The City and PERA will revisit in the future the disagreement regarding whether the City is obligated to make any additional payments to PERA, and the City remains well positioned to present and defend its view that no additional payments are due following transfer of operations at Memorial.”

The City and UCH will continue to work diligently on all transition issues, and remain confident that the partnership will be finalized and completed on October 1st, as scheduled.  This development provides reassurance to the Memorial employees, the physicians, the patients, and the entire community that the trust and overwhelming support shown for this new partnership was justified and will move forward on schedule.