The Colorado Public Employees’ Retirement Association has filed suit against three metro-area counties and the Tri-County Health Department, alleging they owe the organization tens of millions of dollars now that Tri-County is set to dissolve.

PERA, the retirement association, alleges that Douglas, Adams and Arapahoe counties, through Tri-County, are legally required to pay $50 million to pay for continued benefits for employees and retirees, as those people will continue to be covered once the agency dissolves and stops contributing to the benefits. The three counties’ commissions all voted to leave Tri-County at various points this fall. Douglas County has already established its own board of health, while Adams and Arapahoe will fully depart Tri-County at the end of the year.

In a statement, the head of the retirement association said the organization had received “no assurances” from the health department or the three agencies that they will pay the cost. The organization, which says it provides benefits to more than 650,000 current and past public employees, said it filed the suit last week to protect those members from taking on what it alleged is Tri-County’s responsibility.

“Tri-County Health Department has been an affiliated PERA employer for 57 years, and Colorado law requires an employer leaving PERA to pay its share of the plan’s unfunded liability,” Ron Baker, the association’s executive director, said in a statement. “There remains an ongoing cost to provide retirement benefits to the current Tri-County retirees, and to secure the future retirement benefits of Tri-County’s former and current employees.”

All three counties are already set to spend millions in the coming years establishing their own health departments. When it comes to this latest expense, at least two of them have already signaled that the responsibility for paying PERA lies with Tri-County, which has roughly 930 active, inactive and retired members. 

Douglas County Attorney Lance Ingalls said in an email that it was Tri-County’s responsibility to pay PERA, “as the entity that joined and participated in PERA. It is not an obligation of the individual counties.”

Luc Hatlestad, spokesman for Arapahoe County, said the county “does not believe we have the responsibility for this issue” but that “we’re open to working with all parties” to address the problem. 

Christa Bruning, spokeswoman for Adams County, declined to comment in an email beyond saying the county had just received the lawsuit and that it plans “on defending the action.” 

A Tri-County spokeswoman said the agency had been working with PERA “for the past 18 months to understand their perspective on what the impact would be if Adams, Arapahoe and Douglas Counties” left the agency.

“While we can’t specifically comment on pending litigation, the wellbeing of our team members is a top priority,” the spokeswoman, Mindy Tappan, wrote in an email, “and we’ve assured them that their PERA retirement savings are safe, secure and will be available to them upon retirement.”

Tri-County’s dissolution began in earnest in September, when the Douglas County Commission voted to pull out of its decades-old partnership with neighboring Adams and Arapahoe counties. According to the lawsuit, the agency reached out to PERA on Sept. 2 “to determine an estimate of the [cost] reserves requirement if Tri-County Health Department ceases to exist.” The agency said commissioners from its counties wanted the figure to determine if they should stay or form their own public health agency.

On Sept. 24, more than two weeks after the Douglas County Commission voted to leave Tri-County, PERA told Tri-County it would cost more than $50 million to settle up with the retirement benefit provider, according to the suit. Douglas County, in a deal with Tri-County that is allegedly applicable to Adams and Arapahoe counties, too, agreed to pay its “proportional share” of expenses from the agency’s dissolution. That includes, the suit alleges, quoting the agreement between Tri-County and Douglas County, “the payment of any debt or penalties imposed by Colorado PERA.”

Adams County’s commissioners voted in October to leave Tri-County, and Arapahoe County followed in December; like their neighbors in Douglas County, both will now form their own health department. Those moves signaled the impending dissolution of the agency, the suit alleges, and triggered the $50 million payment required by statute.

If Tri-County doesn’t pay, the suit continues, “the remainder of PERA’s employers and members will be harmed.”