Saturday, August 19, 2006

Dennis Leone and Paul Boyer: STRS payments and actions

Dennis Leone To: Paul Boyer
Sent: Saturday, August 19, 2006
Subject: STRS Payments and Actions

Actually, Paul. what the STRS Board did on Friday afternoon (8-18-06) was worse than what you wrote. The Board voted 5-1-1 to reject my formal recommendation NOT to employ a head hunting firm from Chicago (Ferguson Partners) to hire 3 or 4 real estate employees that are needed at STRS. I was the only yes vote on this rejection motion. Meyers abstained, Lazares was absent, while the no votes came from Ramser, Flannagan, Chapman, Billirakis and Puckett. After rejecting my formal motion, the board voted (same 5-1-1 vote) to pay the firm the first installment ($135,000) of its total $315,000 fee. I voted no, Meyers abstained, Lazares was absent, and the rest voted yes. Before the vote, the minutes will reflect, I stated my reasons for opposing the hiring. I stated that when the Board approved the hiring of the additional real estate employees in May, we were NOT told to expect needing to fork up another $315,000 for a head-hunting firm. I also said that amount was simply "too much," especially given that seconds earlier we raised the health insurance premiums for retirees. The staff said they tried to hired the new people but couldn't find the quality they desired. I said: "Try again." Meyers said that he agreed with former Board member Judith Fisher that my objection to such things was "intrusive" and "micro-managing."
There was something worse that the above action. The Board gave Damon permission in executive session to pay the legal fees of 3 staff members who decided to secure their own, personal lawyers after they were subpoenaed to testify in the Hazel Sidaway trial. I stated my profound opposition to this first in executive session, then again in public when I was the ONLY Board member (Lazares was absent) to vote against Damon's list of expenditures for the past 2 months (which included the payment of the private, personal staff member legal fees). These 3 staff members chose NOT to even seek or use the free assistance from the STRS legal staff or the State Attorney General's legal staff. The 3 staff members had not been charged, indicted, or even sued. They decided on their own to hire their own private lawyers for their own personal protection. (I told the Board that as a school supt, I added a rider to my own home insurance policy to give me extra protection if someone sued me personally.)
STRS has NO BUSINESS WHATSOEVER paying the private, personal legal fees of these employees. (Maybe STRS should also buy them a new washing machine for their homes?) I stated publicly that the Board was setting a terrible precedent and that the expenditure violated, in my opinion, ORC 3307.15. In response, other board members told Damon to let staff know that future reimbursement requests of this nature will not be considered. This, in my opinion, is an admission that the payment is wrong NOW. I told the Board publicly that I intend to write a letter to Jim Petro and issue a formal complaint against Damon and my own Board. SB 133 commands Petro to rule on such complaints now. I am not sure how he will respond given that attorney John Patterson from his staff sat silent in executive session when this was decided.
When board members do stupid things like this, like Ramser did when she made her statements in the Canton Repository last month, they are not only hurting STRS, they also are hurting our chances of getting legislative support for health care.
On the plus side, the Board unanimously agreed to start -- slowly -- putting together a contingency plan in the event there is a terrible catastrophic event that sends the stock market south. While there is NOT board agreement on what to do, at least we are moving forward on it. The staff was asked to develop a laundry list of possible actions that we can consider. Board members also were asked to submit ideas they have. This will get interesting.
Also on the plus side, the Board approved 5-2 a motion I made to prohibit full-time rehired retirees from utilizing STRS health insurance after 1-1-09. Not surprisingly, Ramser and Puckett voted no. (Lazares was absent.) The staff presented data showing that rehired retirees paid $4 million in premiums last year, but had $6 million in claims. I also gave a speech regarding how wrong it is that school districts are "using" STRS to help reduce their insurance costs, AND how districts are not even considering new or laid-off teachers and principals for their open positions. What a terrible statement for OEA and State Supt Susan Zelman to see Ramser and Puckett vote against this needed change. It affects the future of our profession.
One oddity occurred regarding the rehired retiree vote. I assumed (wrongly) that my fellow board members were opposed to the idea that such a change should also apply to rehired retirees who work full-time in the private sector. My first motion was to approve the change 1-1-09, but NOT for rehired retirees who work in the private sector. This motion died for a lack a second, so I made a second motion, which was to deny health insurance for ALL rehired retirees who go back to work full-time at places where health insurance is offered to full-time employees. This passed 5-2, effective 1-1-09. I hope the STRS staff is ready to deal with complaints from rehired retirees who undoubtedly will claim that their private health insurance is inferior to what STRS offers.
Dennis Leone
_______
From Paul Boyer, Aug. 19, 2006
Subject: payments

To all board members and Damon:
It is my understanding that the board approved spending $315,000 at the August meeting for staff members. HOW CAN YOU POSSIBLY SPEND $315,000 on Staff when retirees cannot pay for RX's and HC?
DAMON AND Ms. ZELMAN: WHY would you slap us in the face racing to get this done before the Sept. 1 effective date when Damon will have to have all expenditures over $100,000 approved by the Board???

We have fought long and hard with you people to right these wrongs and you continue squandering OUR money on things that should not be. Please wake up and pay attention to ORC 3307.15 and act as you are called on to be good fiduciaries of OUR money.
Paul L. Boyer
Retired since 1985
Life member OEA/OEA-R,
NEA, ORTA, CORE
Proud to be named
“Core” of CORE
Larry KehresMount Union Collge
Division III
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