SOUTH HADLEY — Town officials are caught in a $1.2 million “pickle” — one that may trigger of layoffs of town employees, says Town Administrator Lisa Wong Tuesday night — the same night the Select Board approved additional funding to regrade an unfinished pickle ball court at Buttery Brook Park.
“This one is a pretty big doozy,” said Wong, referring to an unexpected, midyear hike in health insurance premiums that many communities in Hampshire County are facing.
Town officials discussed the issue at a joint meeting with the Select Board, water, and fire districts at the South Hadley Council on Aging that also drew about 50 community members.
While the town anticipated losing grant funding as it built the budget for the current year, Wong said officials were shocked when they were informed by the Hampshire County Group Insurance Trust that all member towns would be on the hook for a 20% increase in insurance premiums set to kick in Oct. 1.
“I can’t imagine us covering this without layoffs,” said Wong.
She said union meetings will be held in coming weeks with Joe Shea, executive director of Hampshire County Group Insurance Trust, which provides insurance for more than 12,000 active and retired public employees throughout the region.
“I can’t imagine us covering this without layoffs.”
Lisa wong, town administrator
Shea was present at Tuesday’s meeting to give a perspective into the steep and sudden spike in rates that will affect not only South Hadley and its water and fire districts, but 72 other members in many Hampshire County communities.
Last month the trust’s board almost unanimously voted to increase rates in the face of rising rates driven by an 80% increase in pharmaceutical claims over the last 18 months. The trust has been hit hard by the popularity of weight loss drugs and GLP-1’s, as well as oncology pharmaceuticals.
Shea said claims spiked significantly, especially in the months of May and June, which drained reserve money from $20 million to $5 million. The weight loss drugs alone cost $1,500 a month for 400 employees who use them, he said.
“The cash reserve that we had in the bank invested was chewed up to cover these losses,” Shea said. “We had two choices, one to meet and look at a premium increase, or literally close the door of the trust … it was a cash flow driven decision.”
In response, the trust will no longer pay for the weight loss drugs for those who have been written a prescription for weight loss. Those suffering from Type 2 diabetes, however, will still be able to have insurance cover the drugs.
Limiting access to GLP-1 meds, coupled with raising premiums, will get the trust back on track, said Shea.
“We’ll see about a $2 million per month cash flow for the better, and we’re hoping and projecting that that will solve our cash flow problem,” he said.
He also hopes to see a pill form of weight loss drugs break through, since the costs currently are so high since injectable GLP-1’s need to be kept refrigerated, raising their prices.
Shea has also made a request for state help, but no help has been lent thus far, he said.
Pickleball pickle
Following discussion of premiums, the conversation veered from one pickle to another — the town’s four new the pickleball courts at Buttery Brook Park.
The Friends of Buttery Brook Park have raised $91,000, in addition to $50,000 in grant money from U.S.A pickleball, to construct the courts that would complement the four existing ones built in 2022.
The project was put on hold, however, when it was discovered that the concrete slab already put down is not the appropriate grading to play safely, pickleball enthusiasts came out to say. The courts, designed by Berkshire Design and completed by Omasta Landscaping, need to be at a grade of between .83% and 1% as recommended by U.S.A. Pickleball, but the grade at the site is currently 2.3%.
To level the playing field, Select Board members voted to fix the courts. That could mean up to $175,000 more, of which the board agreed to fund $34,000. The rest of the money will come from the $91,000 from the Friends and the $50,000 grant. New bids will go out for the regrading work.
Both residents and town officials said the existing pickleball courts have been a community and economic boon for South Hadley. The addition of four more are to keep up with demand.
“I’ve already heard discussions within the pickleball community, both from residents of South Hadley and those who come to South Hadley to play, that they wouldn’t see the courts up to par,” said Select Board member Nicole Casolari, noting that many would likely choose to play elsewhere.
“I’m worried that if we do not fund this, we are going to lose those people who are coming to our community and enjoy our community,” she said.
The only dissenting vote was cast by member Andrea Miles, who said she didn’t feel justified spending the amount in the midst of a jarring insurance premium hike.
“I don’t feel it would be responsible to spend the money right now,” said Miles, adding that South Hadley’s budget was “grim” even before the health insurance premiums news.
Samuel Gelinas can be reached at sgelinas@gazettenet.com.
