Molly's notes on January 19, 2006 STRS Board meeting, including public speakers, Aon Compensation Study

January 20, 2006

John Curry Comments:

The problem will be to ensure that the new money really gets to the Health Care fund ! Can you imagine a public school board voting on spending money without having in front of them documentation of the expenditure ? Amazing!

-- John Curry

From Molly Janczyk

Sent: Thursday, January 19, 2006

Subject: 1/19/05: STRS BOARD MEETING: PUBLIC SPEAK AND INFO

Details regarding the Candidate Interviews and following endorsements will be sent by Mary Ellen Angeletti. There is much for her to compile and write so it will take a bit.

I am sending this out to CORE, STRS BOARD MEMBERS, OFT, ORTA in the hopes that membership of these organizations will include what Board Members are individually doing regarding STRS issues of concern to them. We are hearing that retirees are not hearing about Board Members action's.

Jeff Chapman writes for the ORTA Qrterly and we hope he will include specifics for the membership on all items including Board Members asking: "How does this affect retirees?" Many members, incluidng me, would like details of those who fight for us. I am sure actives wish views from all sides as well.

There were some interesting issues in the AM.

Leone and Lazares requested to reverse their yes votes for approval on an issue due to minutes of last month's meeting including an item that was not included in the facts presented for last month's vote. So, due to this item being in the minutes and not presented for the vote last month, they made the request for change of votes from yes to no resulting in a
9-2 vote on the issue vs. last month's 11-0.

NO OTHER BOARD MEMBER FELT THE NEED TO ADDRESS THE ADDITION INCLUDED IN THE MINUTES.

Leone used an example of voting without documentation or contracts by saying, For ex. using the recent issue which was voted on without contracts in front of us: 'Perhaps it included paying for room and board of the workers.' Damon responded, 'It does.' Both Leone and Lazares tried to stop this vote without contracts in front of them, but no other board member felt it necessary. So, now hidden costs have been included to be paid with membership earnings and could have been prevented/negotiated or least known.

MEMBERSHIP WANT TO KNOW WHO IS AND WHO IS NOT VIGILANT OF THEIR MONEY!

The AON Compensation Study:

'Analysis indicated STRS' benefit program falls between prevalent and above average market practices and can be considered reasonable. To retain and recruit staff, STRS must offer benefit plans which are reasonable and attractive relative to those offered by other public and private employers.'

AON recommended salary adjustments to current compensation of:

up to 62.5% level of private and public salaries to total: $1,796,431 with 60% in March 2006 and 40% in July 2007 for non investment staff.

up to 75% of public salaries to total: 60% in March 2006 and 40% in July
2007 for a total: $2,100,000.

Potential investment PBI increase to target 25% of private funds: $4,136,000.

TOTAL ADJUSTMENTS: $8,032,431

Lazares said: "The law says we must take care of retirees-current and future. Retirees need to know a secure retirement system will be there. Retirees have been hit hardest losing HC, 13th ck., and now you want to give a raise to staff. What message does that send? We tell them the system is in trouble, and we want to give staff raises? Retirees have lost everything.'

Lazares: 'Steve Mitchell, how long have you been here?' Mitchell: '37 yrs.' Lazares: 'You're still here so it can't be that bad.'

Lazares: 'I just read where STRS is one of the weakest systems in country. Steve Buser, you said we are in trouble with the unfunded liability.' Buser said, 'Yes, serious trouble.'

Lazares to Frank Russell rep in room: "You told us if we don't get 8% a year, the unfunded liability will go to infinity." Rep says, 'Yes.'

Lazares: ' But, you want to give STRS staff a raise?'

Puckett: 'We can't do that politically.'

Fisher: 'Do we want to go forward with these talks about raises?"

Lazares and Leone: "No, I don't!"

Others silent.

Matter dropped.

Consider: Leone and Lazares could both have retired and been rehired or taken other higher paying or addt'l paying positions. THEY CAME TO THE BOARD TO HELP SAVE THE RETIREMENT SYSTEM INSTEAD BECAUSE MEMBERSHIP ASKED THEM TO. They did their jobs representing us proudly.

Public Speakers 1PM:

1. Hermann Fisher: Thanked Damon and staff for daycare info. Quoted subsidies membership paid down to $130,000 annually from over $500,000 annually.

Presented a plan to reduce to cost neutral: Free parking goes with daycare cost to attrack other near by employees in area. STRS already has free parkling.

COLA: 3% simple: no raises to that ever based on first year of retirement. So, what's wrong with providing COLAS for STRS staff annually, period.

2. Bill Leibensperger: OEA Sec/Treas.
29 yrs of service.

Congrats to leadership ; heard from over 10,000 respondants re: Inc. contributions and most favorable and understand need for legislation.

Thanks to Damon and Terry Beirdeman for their ties getting HCA into legislators on this issue. HCA advocates confident in the plan and approach. We need to respect the legislative process and prepare sound presentations. With time, we feel we can muster up legislative support.

We understand the urgency to form solid arguments against opponents. We deal with real people and cannot be trapped in ideology.

Any changes to benefits will kill this plan for current and future retirees.
(STRS said in the summer of 2003 or 2004, I believe, that all areas would be looked at. A study is being presented tomorrow: 1/20 on whether SB190 saves STRS money or is a wash).

3. Tom Curtis: will send speech online but: Issues unsetling:
* The chair and co chair of this board attempting to stop Leone and Lazares since 9/05. Brown ruled Leone out of order when he was not (both Leone and Lazares have many yrs. of experience on boards and rules of procedure). This action lost time and looked foolish to membership.
((NOT TO MENTION NO OTHER BOARD MEMBER SPOKE UP ON THIS MATTER. m.j.)) Step back and looks for ways to work together and find a common interpretation of ORC.

* This is a new board but votes without proper documentation in front of you is against the law.

*Public and media were denied access to meetings they should have been allowed to attend violating the Sunshine Laws.

*Remind the Chair (Brown) and the Co Chair (Ramser) that Leone and Lazares were ELECTED to this board and you both were appointed.

*WHY are these 2 the chair and co chair when other board members were available: Billirakis and Lazares. Billirakis is the longterm senior member and should have served as Chair.

4. Ralph___________: Retiree. We appreciate you despite criticisms.
2000 brought changes in the pension system resulting in financial irresponsibility and detriment to system and loss of 13th ck. Oppose Boards of Educ. contributing more than 14%. If actives wish to, fine. Talk of salaries and incentives difficult. Compare pension systems to like pension systems. I say chart that said we have more employees and less results. Need good criteria if incentives offered to the top quality employees. STRS has lots of intangible benefits as well. You lose staff no matter what. Pay reasonably. Mark Twain said: do what is right and satisfy most people and astound the rest.

5. Paul Boyer: will send online: Points: Incorporating Medicare D saved thousands for us; keeping increase of premiums to 3%: THANK YOU. Lower generic costs and Tier 2 and 3 same rate: THANK YOU. Realize this is for 2006 and we will see what you can do later.

Criticism: not able to attend recently but have kept advised to issues.

*Violation of Roberts Rules of Order for a board member to be declared out of order when making a sub motion. As long as motion on flr., any member can make a substitute motion which must be considered first before the original motion.

*Also concerted effort by some and top two officials of this board to shut out 2 duly elected members of the board. Every member has = voice and any desire to shut out any member is wrong.

*Voting on financial items without any printed documentation in front of you on the issue is another concern.

WE WILL NOT STAND FOR THIS KIND OF INTIMIDATION ((to get vote approval. m.j.))

6. Betsy Cook:

2003: became aware of misspending. I said I will be vigilant and I became a member of CORE. Thanks to them, I don't have to travel monthly.

CORE has opened the eyes of thousands of the membership, gotten them involved, and brought changes to STRS: CORE called for fiduciary respon., end to rubber stamp voting, consideration for membership, and a new board.

CORE now asks for all to work together so that STRS Board hears what members need. I am a former OEA member, WORTA member, CORE member. My number 1 priority is affordable HC and a sound pension system.

Continue to make cuts where you can, evaluate salaries, employee HC and benefits to see where money can be saved. Every time I come to this outlandish building................evaluate this building and how to save money and recouped. STRS spending is beyond my comprehension: the salaries, building, perks, furnishings are presenting a lavish fortune 500 business and then is telling shareholders money is tight.

Lazares said earlier today that it is difficult to raise salaries when STRS says it is having hard times and to ask LSD for more money when STRS says things are tight and yet wants to give raises . Shareholders, us, must have cuts. Lazares says: What message does that send?

As educators, we got hugs and smiles as incentives and non-monetary rewards.

STRS, tighten YOUR belt and send a message that will regain trust of OHIO's educators.

7. ___________Schaumbacher(?):
35 yrs of service; OSU Heard review of 35 yr. incentive; concerns for those of us near retirement and relied on this to plan if abrupt end. Please allow grandfathering; little time to make up.

((IF only STRS had done this for current retirees! MEMBERHIP : Any talk of this began early on in this abuse issue at STRS though some want to blame it on new board members. NOT SO! STRS brought this up prior to 9/05 simply saying it would look at all areas according to Damon Asbury! He is confused as to why educators feel it is a new issue. IT WAS NEVER AN ISSUE FOR LAZARES OR LEONE, themselves. They walked onto a board that had mentioned looking at it and all areas. A study has been done to see if it saves money, drains money or is a wash and the report is due tomorrow: 1/20/06. ANY talk of change by this board that I have heard would never again implement drastic change w/o grandfathering knowing how it AFTER THE FACT decisions destroyed current retirees.m.j.))

8. Tom ____________: A 25 yr. active teacher looked at the 5% increase of contribution and said: I don't want a hit nor like it but "PUT IT ON ME!" I can take the hit better than retirees. 5% is needed and actives can absorb it with increases and raises. If School boards are mandates to make 2.5% inc. I will still be hit with 5% when it comes to negotiations and bargaining; it still comes out of my pocket when they say we can't give you a raise. The kids will receive less. Put it on me! It will look good to taxpayers, when we ask for levies. If taxpayers see we are paying more, they will be more likely to pay more.

If we don't do it now, it will be harder in 5 yrs. and 5 yrs. lost in money going for my retirement and HC. I see older retirees, I CAN TAKE THE HIT! Hit me with 5%!

((WHO WAS THAT WONDERFUL YOUNG MAN?m.j.))

Damon's report;

In addition to member educ. meetings, met with legislators: Speaker of house Husted, Sen. Pres. Harris and Gov. Taft presenting legis. to seek dedicated source of revenue for HC.

Harris highly complimentary and understands problem, he says. Feels necess. to begin debate and directed us to Gen. Assem. to bld support.

STRS reps and HCA's are meeting next wk to develop strategy to bld support for legis.

Meeting with Gov. being scheduled as well as key groups.

OSBA and OASBA opposed. New grass roots effort. Higher educ. more supportive.

KUDOS TO STRS AND HCA's FOR THIS LONG AWAITED PRESS FOR A DEDICATED SOURCE OF REVENUE! WE ARE BEHIND YOU!!!!!!!!! THANK YOU FOR YOURHARD WORK IN THIS AREA.