RH Jones: Employee/employer contribution increase needed as STRS spends $50,000 per HOUR on health care

April 1, 2006

To all:

As related to me, by Dr. Fluke, regarding the State of Connecticut's problems with the security of their pension system, by comparison, we STRS retirees have a benefit that is vested by the state. According to Terri Bierdeman of STRS, who spoke at the Canton ORTA meeting last week, our check is secure; but ad hocs, such as the yearly 3% simple COLA, are not.

Also, it is interesting to note, she stated that STRS spends $50,000 on HC each hour. This leads me to believe there is therefore a strong need for the joint employee/employer increase. Reasonable people would surely agree.

RHJones

Connecticut teachers rally to save retirement program

Teachers Push For Amendment To Ensure Pensions

POSTED: 9:25 am EST March 30, 2006

"How can we attract teachers to the profession with no pension," he asked. "Or, if we attract them, they won't stay."

HARTFORD, Conn. -- The state's two teachers unions staged rallies and demonstrations across Connecticut Wednesday to draw attention to the state's teacher retirement program, which is underfunded by more than $5 billion.

The Connecticut Education Association, the larger union, is also spending $400,000 on a television ad campaign, urging voters to call their legislators and tell them to support Senate Resolution 3, a proposed constitutional amendment that would require full funding of the pension system.

"We're taking it to the people and we're taking it to legislator by legislator," said CEA President Rosemary Coyle, who appeared at a rally outside the state Capitol that drew more than 1,500 teachers. "Teachers want to ensure that their benefit will be the there."

Marilyn Lacerte, 56, a math teacher at Windsor High School, said she plans to retire this year. Her husband, a former teacher, retired seven years ago. Lacerte said she worries about their financial futures.

"I do have longevity in my family," she said. "I could see myself needing this pension for 35 years."

Although state statutes require the legislature to fund the actuarially required amount to the teachers pension fund, lawmakers for years have overridden that requirement and socked away only between 66 percent to 85 percent of the required amount. For the 2006-07 fiscal year the state is depositing $286.6 million -- 70 percent of what is required, according to the CEA's figures. In past years, the difference in funding has been used to cover other programs. This marks the third year in a row that CEA has pushed for a constitutional amendment.

"We've been required by law to properly fund this teacher retirement fund for years," said Sen. Thomas Herlihy, R-Simsbury, the ranking Republican on the Education Committee who is backing the amendment. "We have essentially been looking the other way."

House Speaker James Amann, D-Milford, opposes the Senate resolution, which would require a two-thirds vote of each chamber to put the question on the November ballot for voters to approve. He prefers depositing additional money into the fund from the state's budget surplus, estimated at $600 million for this fiscal year. There is a concern among some legislators that a constitutional amendment requiring full funding of the teachers retirement program might lead to other amendments requiring full funding of other grants and programs.

Gov. M. Jodi Rell, a Republican, said she understands the teachers' concerns but is uncertain whether a constitutional amendment is necessary. She said state legislators need to be consistent about depositing the money each year.

"It's really not the fault of any one legislator, or any one year. But when you have other criteria or other needs that have to be met, you're trying to look for where you're going to get those dollars," Rell said. "But underfunding though, you've created a bigger hole long term and it's hard to make that up."

Between June 30, 2002, and June 30, 2004, the unfunded liability grew by more than $2 billion to over $5 billion. A new estimate is expected later this year. According to the most recent actuarial report in 2004, the pension fund had a value of $11.3 billion. A new report is expected later this year. According to CEA, there are 50,836 active, full-time educators in Connecticut, including superintendents, principals and teachers. There are 24,870 retirees. Connecticut teachers do not participate in the Social Security system. Instead, they contribute 7.25 percent of their salaries to the retirement fund.

Jeff Ibsen, an eighth grade teacher at Cromwell Middle School, said he's not worried about his own pension. He's worried about future teachers.

"How can we attract teachers to the profession with no pension," he asked. "Or, if we attract them, they won't stay."

Ryan Holderman: Why Fear The Free Distribution of Election Information?

Sent: Saturday, April 01, 2006
Subject: Election Opinion!

Why Fear The Free Distribution of Election Information?

The election of two “active” teachers to seats on the STRS Board is pending. All of the candidates have followed the procedures outlined by the Ohio Revised Code and the STRS rules governing such elections. They have been qualified as candidates and their names will appear on the ballots being mailed to STRS active and inactive members as well as disability recipients who are entitled to vote in this election.

It is the right of all eligible voters to be fully informed about the candidates seeking STRS Board seats. It appears, however, that the Ohio Education Association wants teachers in the schools which they represent to be informed only about the candidates that are OEA endorsed. Reports are coming in from across the state about folks who are distributing campaign flyers for candidates Tom Hall and Mark Fredrick being denied access to teachers. Citing rules which purportedly restrict distribution of such materials to union representatives or limit such information to union / administration approved materials, those who would share information about Dr. Hall or Mr. Fredrick are turned away.

Isolating STRS members and restricting their access to information that they need in order to make informed decisions about the candidates they are being asked to select for the STRS Board is unethical. It raises several questions:

• Why do those who are doing so fear the free, open distribution of campaign materials?

• Why do they seek to control access to the teachers in schools they represent?

• The STRS Board represents all it’s constituents, not just those who are represented by a particular union. Why shouldn’t voters have access to any candidate’s information?

It is time to call for an end to such restrictive, mind-controlling tactics and demand the free flow and distribution of information about all qualified STRS Board candidates.

Dave Speas: Thank goodness for second chances

March 31, 2006

From the Clark County Courier retiree paper

FROM THE PRESIDENT'S DESK

[This follows an Internet story in which a highway patrolman gives a speeder a second chance.]

Sometimes life is like that. It gives us second chances. Here are some second chances I would like to remind us to be demanding today.

a. STRS has a second chance not to make the same mistake it made in the 90"s. Our retirement organization did not have an emergency plan for the stock market plunge. Because of that mistake, retirees across this state lost major health coverage. Now they have a chance to put a plan into place. If they do not and we have another catastrophe, we won't just lose health coverage, we will lose some of our actual retirement funds. We have to be demanding this.

b. ORTA has a chance to take a look at itself and reinvent the organization and bring it into the 21st Century and be more responsive to the 90 chapters. Formed in the 1940's as an advocacy group, it seemed to move too slowly in the STRS crisis and lost a lot of credibility with its members. It was not formed to be a watchdog group but maybe it was needed in this time and place. It has the chance now to reform itself into a more responsive organization for its members. It is working hard to do so and I am excited to see where it takes us. The chapters must be responsive to the planning as it is to their benefit to do so.

c. OEA-R, CORE, ORTA and other retirement groups have a chance to put the past behind them and join together to do all they can for the retirees in the state of Ohio. There are times when groups may disagree but in over 90% of the cases, they have to agree or they are not working for all of us. Whatever the past grievances, they must be put behind us and efforts put forth by all groups must be for the good of those they represent. If anyone in leadership positions puts the organization before the retirees, then they are not really in the business of protecting them. All the groups have the chance now to come together and be united for retirees. Anything else is beyond understanding.

Thank goodness for second chances. Our local organization must stay true to its members and be part of the action. Expect us to keep you informed, act on your part, and speak for you. However, you must read, ask questions, and join us in helping our organization be all it can be. Our job here is to work hard so we don't have to ask for second chances.

Dave Speas, President

Clark County RTA

OEA's 2005 LM-2 annual report to U.S. Dept. of Labor

From John Curry, March 31, 2006

Some surprises here! This scan is a copy of one of over 100 pages contained in the OEA's annual filing of the LM-2 report to the U.S. Dept of Labor as required by law. It is public domain -- that's how I obtained it! I find some interesting trends. This document was signed on Nov. 29, 2005 and contains the salaries of some of the top OEA officeholders for a period of one year (fiscal year). I will also print findings from the 2004 and 2003 LM-2 report in regards to some of the top office holders at the OEA. Some surprising changes are appearing this time around! The dollar figures are monies listed as "Gross Salary Disbursements" (before any deductions).

..........-- John, a Proud CORE member

x

…………………..........2003………2004……….2005

x

Gary Allen, Pres.…...158,200…..176, 756…..119,521

x

Patricia Frost-

Brooks, VP…….…...136,693…..150,487……184,657

.

Bill

Leibensperger..........139,001......151,541......132,922

Sec/Treas.

Molly Janczyk: Thank you, ORTA, and WELCOME!

From Molly Janczyk, Friday, March 31, 2006

Subject: Dear ORTA

CORE is extremely grateful for the collaborative efforts by ORTA Officers and Exec. Direc. in the 2006 STRS Board Election and ORTA Spring Regionals. This is combined with all the wonderful District Directors and RTA Members who have been so helpful and gracious. Many have been named and I wish to acknowledge Past Pres. John Milhoun as well for his help at the regionals.

The spirit of unified efforts has been clearly evident and needs recognition and appreciation. CORE welcomes all ORTA Officers and Exec. Director to CORE Meetings at STRS and truly hopes we find them in attendance for further collaboration and discussion of issues for common goals: We all wish only what is best for retirees, whether current or future. It is very evident we all wish to move forward and unite for retirees on common issues.

May I respectfully request some method of communication in the future when any issue arises from anyone for direct exchange in an effort to clarify matters should anything occur so as to offset misunderstanding. Requests for exchange to be private are honored. In addition to this, Dave Speas has agreed to be a liaison when questions arise for clear understanding. Perhaps this will pave a solid road to ensure clarity and communication among all parties.

Thank you.
Most Sincerely,
Molly J.

Laura J. Reed to OEA: We are fed up with your TELLING us whom to vote for

To: Ohio Education Association
Sent: Thursday, March 30, 2006
Subject: Re: Special bulletin on STRS Board Elections, Your Pension and Your Health Care

I am extremely upset that you are using MY money to set up web sites and put color pictures on the back of MY magazine. You have continued to endorse people who have misused our monies for STRS and I resent the approach that you use. I have talked to many retired and active teachers who are fed up with you TELLING us for whom to vote. As a fair and ethical "Professional Organization" you should report on each person who is running for the position and then allow the members to make a choice for whom to vote. After all most of us are somewhat intelligent, somewhat capable of making decisions, and most of us are certain that we want people who represent us and not a "Union". I hope that you can tell from this message that you have raised my blood pressure significantly.

Laura J. Reed

From John Curry: Accountability, reform, and a letter Gary Allen never answered

March 30, 2006

It has come to my attention that the OEA is now using the words "accountability" and "reform" in order to urge active teachers to vote for the OEA-endorsed candidates in the upcoming STRS Board election. Had their OEA dominated STRS Board representatives been accountable during their majority control over the STRS Boards before 2005 (when SB 133 ended this dominance) we would not be in this mess that we are now in.

Reform? The OEA is now using the "R word." Reform of what? If they mean reform of the past two decades of OEA STRS Board domination, then they better look into the mirror! If they want reform, then they are talking about reform of their own leadership by a former OEA dominated STRS Board that turned its head the other way when misspending, mismanagement, and an entitlement philosophy existed at STRS until Dr. Leone (A CORE member) exposed these abuses.

The OEA use of the word "accountability" should have been used several years ago when an OEA majority STRS Board voted to hire former deposed STRS Executive Director Herbert Dyer who left his position at STRS under pressure from Ohio legislators and who was subsequently found guilty of ethical misconduct in a Franklin County courtroom. That same court has a former OEA Executive Council member awaiting her (Hazel Sidaway) trial as she is being charged with 7 violations of Ohio Ethics laws while acting as an STRS Board member.

OEA President Gary Allen was sent the letter below (almost two years ago) in reference to reform and accountability - I still am awaiting his answer. John - A Proud CORE member

________________

Dear Mr. Allen,

Your most recent edition of "Ohio Schools" contains an article critical of S.B. 133 that doesn't put into proper perspective how your organization (OEA) failed over 100,000 retiree members of Ohio STRS.

The current OEA dominated(not for long) and affiliated STRS board lacked the foresight to ensure that current and future retirees do and will have quality and affordable health care. I realize that health care benefits are not guaranteed by any state retirement system, but how can you justify the PERS premium of $80 per month for a retiree and spouse vs. the STRS premium of $562 per month for employees who also spent 30 years in public service? The influential and progressive(?) thinking OEA didn't put pressure on our legislature to increase the current 1% contribution rate by STRS into health care funding. The next lowest state retirement system health care contribution rate is more than double this 1%. OEA couldn't muster up the courage to press for this increase years ago when it was known that 1% was not enough, didn't want to ruffle feathers!

The Ohio Schools article seems to villify the passage of S.B. 133 as a bad omen for teachers. Both of us know that the passage of S.B. 133 eliminates your organization's future ability to maintain control over a current blind and "out of tune with reality" STRS board that has floundered with your organization's blessings and endorsements. This same board also enjoyed misspending millions of dollars on a 90 plus million dollar building, globetrotting, Kings Island tickets, alcohol, and the list goes on and on without consideration of the Ohio Revised Code and its requirement of fiduciary responsibilities to ONLY its retirees.

I know that your OEA agenda demands an OEA majority on the STRS board - sorry, Gary, it's not in the cards now. You can use your OEA magazine to strike fear into the lives of active teachers' minds as to how your organization's teachers have been ill served by the passage of S.B. 133. You fail, however, to inform your membership of the above mentioned spending of millions of dollars by this OEA dominated board who for years never saw a board motion that they didn't like. It WAS an age of rubber-stamping at its golden best.

Gary, no longer are you and your organization able to spoon-feed active teachers on how to think and act. With the advent of the electronic media, Dr. Dennis Leone (STRS whistle blower), John Lazares (newest "reform" STRS board electee), the Canton Repository, and the Plain Dealer- your organization's iron grip on active teachers' minds is finally being realized for what it currently is- a gradually loosening grip.

If it hadn't been for the lack of insight by your organization, S.B. 133 and its competing house bill wouldn't have been necessary. The OEA's generous "pac" donations to politicians on both sides of the aisle didn't bail you out this time. These politicians respect for ethics and/or fear of not being reelected took a priority over your campaign contributions. STRS retirees have found that, "with friends like the OEA, who needs enemies?"

Both the STRS and your organization need to reexamine your concerns for the retired teachers of Ohio. STRS has an O.R.C. mandate- your organization should have a mandate of care and concern for your former dues paying members.

For the OEA, forking out over $150,000 for your salary, $50,000 to $60,000 for secretarial salaries, and salaries of over $100,000 for labor relation consultants- you and your organization could and should have taken serious measures to "clean-up" the STRS organization if for no other reason than to show your dues paying members that they were getting the best bang for their bucks. The OEA's lack of action has contributed to some of my fellow retirees having to make the decision of whether it will be food or medicine.

With winter coming on, the reality of home heating bills will compound this situation. OEA's lack of care, leadership, and compassion will now be realized by its former dues paying members. Fool the active teachers once, shame on you; fool them twice, shame on them. Throughout modern history, many companies and most trade unions have looked out for the health and welfare of their employees AND retirees. The OEA has sorely abandoned the latter. You now have reached a point in time to reform your organization's concern for its retirees, will you heed the call?

You have questioned Dennis Leone's "motives" upon reading his 13 page report about the mismanagement and spending fiasco at STRS. Once Dr. Leone's facts were presented, they were not disputed-not even by you. You never apologized to Dr. Leone. If you wish to question my motives for writing this letter to you - please do. In fact, I'll even save you the time and trouble by supplying you with my motives. I wish to see the rape of retirees by the OEA controlled STRS board stop immediately. I wish to see the STRS return to the Cadillac of retirement systems that it once was. I wish to see STRS retirees live out their lives without being one major illness away from becoming bankrupt thanks to the miserable and expensive health insurance coverage that STRS offers. I don't expect an apology either- I expect action and not the cancellation of two health care advocates meetings in a row. The next time you or the OEA complains about S.B. 133, you should now understand why this bill became law. Every day more and more current and retired educators are becoming cognizant of why this baby was born.

John Curry

30 year teacher retiree -- a PROUD CORE (Concerned Ohio Retired Educators) member (sent 8-9-04)

OEA 'borrows' from CORE for election campaign

From: John Curry To:____

Sent: Thursday, March 30, 2006

Subject: Re: how to counter?

-----, nothing prepared for the moment, but ask the teachers to reexamine the OEA election statement and advise them that Dennis Leone and CORE have been using the words "reform" and "accountability" for the last 3 years -- this is what started our movement. These two words are on CORE's birth certificate. The OEA has dominated STRS for the last two decades and look where we are. Tell them the OEA should look in the mirror if they want to talk reform and accountability as former STRS dominated boards failed to police, protect, and to think towards the future -- they have themselves to blame. In fact, Conni Ramser advised in an email that she NEVER EVEN READ DENNIS LEONE'S ORIGINAL 13 PAGE REPORT THAT STARTED ALL THE REFORM!!! Now, the OEA wants to USE OUR PLATFORM in informing the active teachers that SOMETHING IS WRONG!!! Spare me! Ask these teachers, "What's wrong with this picture?"

_______________

From:____ To: John Curry; Sent: Thursday, March 30, 2006; Subject: how to counter?

John, I'm sure you got the following OEA communication, too, that is going to active teachers [see below]. I have already mailed out the flyers you sent for CORE & now people are asking me what to say about why not to choose Conni & Mark M. and why to choose Tom & Mark F. Any prepared things from CORE????

Thanks. -----

From OEA: Protect Your Pension - Secure Your Health Care Vote for Conni Ramser and Mark Meuser for the STRS Board

In April, Ohio's teachers will elect two members to the Board of the State Teachers Retirement System (STRS). Conni Ramser and Mark Meuser are OEA's endorsed candidates for the STRS Board. Ramser and Meuser have earned OEA's support because of their understanding of the issues facing STRS and their dedication to preserving benefits for Ohio's teachers.

Both Conni Ramser and Mark Meuser are committed to accountability, will work to secure affordable health care for current and future retirees, and will defend hard-earned pension

A retiree from the Athens meeting thanks Dennis upon receiving his STRS Update #1

Sent: Wednesday, March 29, 2006

Subject: Re: STRS Update #1

Thank you Dr. Leone. You message came thru very clean. I printed it for reference purposes. I am hoping that pre-1999 retirees can become haves instead of have nots in the future. Most of us are O.K. now but I am concerned with what is down the road. Thanks for doing the work you are doing and reporting on. I hope you continue in this vein. We retirees have not had this insight into the workings of the board before. Please keep it up.

Sincerely,

Gilmore Coultas

Mending fences: Dennis Leone and ORTA together at last at March 29 regional meeting in Athens

Special note: HUGE round of applause to Dave Speas for his monumental efforts in making this all possible. What would we do without him? KBB

From Dennis Leone, Thursday, March 30, 2006
Subject: ORTA Challenge

To all:

I felt the ORTA regional meeting yesterday in Athens went very well. I heard statements of collaboration that I have not heard in the past. Blin Scatterday and Lou DiOrio, in particular, made several positive statements about wanting to do whatever is necessary for all to move ahead collectively. I was permitted to address those in attendance before lunch and I basically followed the format of my recent six-month STRS Update. I joined the entire ORTA Board at the same table for lunch and it afforded us the opportunity to discuss items of mutual concern. After lunch, Blin Scatterday asked me if I'd be willing to write a column (much shorter version of my speech) in an upcoming ORTA Quarterly. I said yes, and Ann Hanning said that the earliest this could happen would be summer. I said that was fine with me. At the end of the day, I was permitted to answer a few questions from the audience. It is clear to me that Dave Speas is providing very positive leadership on the ORTA Board. Dave and I answered several individual questions right after lunch.

During my speech before lunch, I also mentioned how important it is that everyone work together for the sake of retirees. I told the group how the STRS Board chair recently tried to declare me out-of-order because I attempted to answer a question from the audience, and how another STRS board member publicly labeled me as "intrusive" because I asked questions about the budget. I then posed a challenge to the ORTA Board......I said: "I want the ORTA Board to be intrusive with me....... .that's my dream today." I also said, jokingly: "If you see the STRS Board chair calling me out-of-order because I'm trying to answer a question, you -- Ann Hanning, Blin Scatterday, and Lou DiOrio -- all of you need to go up to the Board chair and strangle him." Believe it or not, these two comments were well received by those in the audience.

Several at the regional meeting gave me their email addresses and asked me for a copy of my 6-month update. I am scheduled to speak at the Pike County RTA on April 13. RTAs in Jackson County, Meigs County, Hocking County and Shelby County have lined me up to speak on later dates.

Jake Frowine turned 97 yesterday and everyone sang happy birthday to him.

Dennis Leone

Tom Curtis reports on March 28 ORTA regional meeting in Canton

March 28, 2006

Hello Everyone,

Today, I attended the Canton ORTA Regional Meeting for Districts 9-11 at Glenmoor County Club in Canton, from 9:00 am-3:30 pm. I carried 6,000 B&W copies of Hall and Fredrick flyers with me.

On the name tag I made-up and brought with me, besides my name, I had CORE in big letters with Concerned Ohio Retired Educators in smaller letters below it. I was warmly greeted by most everyone I talked with today. I spoke with most all of the ORTA Leadership and many Presidents of Local RTA's. Some I knew from last year, others I had only talked with by phone or email, and still others I had not been in contact with at all. At times, I sensed that a few local county people are still rather tentative about CORE, or possibly me in particular. (Dave Speas, you will be glad to know that I thought of your excellent role model, as I did the following.) I attempted to mend a few fences I knew were in need of such and found most to be willing to look forward. I heard no negative remarks about CORE today, but then I am hard of hearing in a crowded, noisy room, so CORE may have been criticized and I did not hear it.

Blin Scatterday willingly made an announcement that I had flyers out in the hallway for candidates that will be on the STRS ballot this year. Lou DiOrio mentioned my attendance at monthly board meetings, as he discussed the need for more education about the STRS and more involvement by the membership.

Don Bright asked me for 50 each of the flyers to distribute in his northwestern area. I handed out 3060 copies, the bulk of which were to those I had contacted prior to today and indicated I would have them today. I knew a few of the other presidents and asked if they would care to take some, which they did.

Nancy Boomhower saved a seat for me at the lunch. I sat between Ed Thomas, a retiree from Holmes Co. that I sat beside last year, when Dennis spoke in Holmes Co. It was nice to chat with him again. The lady to my right was Karen Butts, the newly elected District 6 Director from Licking Co. She is very friendly. She does not have email and I had never talked with her before. She knows of CORE and indicated that she had taken flyers from Sam Ridder already. I provided her with a copy of Dennis' 6-month report and she was thrilled to have it. She is a strong supporter of his efforts and I believe she is in support of CORE as well. CORE seems to have become more relevant to the retiree as time marched on. I do not mean any disrespect to ORTA when saying this.

Today marked the 2nd time I have reconnected with someone from my much younger life, by being involved with CORE/ORTA/STRS for the past 3-years. Today's revelation occurred somewhat similar to my 1st in 2003. As I was looking through the Winter ORTA Quarterly the past few evenings, a face among the photos of the new officers seemed to draw my attention, as I viewed the various pictures. I had been adding the names and information for each to my address book, so I looked at the pictures many times. This one face continued to stand out to me, but I did not know why. That person was sitting in the row in front of me, and 4-5 seats away from me today.

During break time, I went over and introduced myself and congratulated her on her election to the ORTA board. We talked for the remaining few minutes until the break was over. We identified that we came from the same hometown of Alliance. She then asked me if I knew Kathie Bracy. I said, Yes, I have known Kathie since she used to be my baby-sitter. [OK, I confess; I was in high school then, at Alliance High. Tom was a real little cutie, but ornery as the dickens! Glad to see he turned out well. KBB] I asked about her last name. I found that her in-laws were fairly good friends with my parents, many years ago. The break ended and I went and sat back down with Nancy Boomhower, the Medina RTA President Bill Dunham and other Medina officers.

Blin Scatterday began to introduce the next speakers, Terri Bierdeman and Mike Spino. The lady I had been talking with leaned back and asked me quietly, what year I had graduated. After I told her 1965, she said, "I was your senior English teacher at Alliance High School." Now I know why her face looked familiar to me. Now, how bizarre is that?

This makes the second time I have re-connected with a person from my much younger years, Kathie Bracy being the first at a meeting at the Angeletti's in I believe 2003. [Actually, 2004. KBB]

Take care,

Tom Curtis

CORE Advisory Committee Member

Blackwell aide close to charter

Posted on Wed, Mar. 29, 2006

By Dennis J. Willard and Doug Oplinger, Beacon Journal staff writers

COLUMBUS - Secretary of State J. Kenneth Blackwell's chief of staff has had an ongoing relationship with the state's largest charter school, receiving income and gifts from the Electronic Classroom of Tomorrow while the school at times overcharged the state millions of dollars. Sherri Dembinski is third in charge in Blackwell's office, which oversees the chartering of nonprofit organizations. ECOT is a nonprofit organization.

Blackwell also oversees reporting of campaign contributions. Managers of ECOT -- including Dembinski -- collectively have contributed about $330,000 to Ohio Republicans since the founding of the school.

ECOT has been embroiled in controversy since the fall of 2000 as it attempted to start a publicly funded online school that would educate children in their homes on computers.

In 2002, the school was found by Department of Education auditors to have overcharged the state as much as$7 million for children it could not verify as on the rolls.

And three times, state auditors have questioned expenses by the school and its close relationship with the for-profit management company that oversees ECOT -- both of which were founded by Columbus businessman William Lager.

Lager and Dembinski's husband have been friends since high school.

Dembinski was on ECOT's board from its inception until March 2004, when she resigned and moved into a new role as vice president of a foundation related to ECOT -- a foundation whose beneficiaries include students and organizations affiliated with ECOT.

Dembinski said Tuesday that she checked to make sure there was no conflict of interest to serve on the board.

``I actually had the conversation with general counsel at the time I got on the board to make sure there was no conflict of interest,'' she said.

Dembinski said she resigned from the board because the school hired her son, Christopher.

``I felt that was a conflict of interest,'' she said.

Ethics question

A review of ethics disclosure records by the Akron Beacon Journal shows that she does have a problem.

She reported her relationship with ECOT to the Ohio Ethics Commission for 2000-2003, but failed to do so for 2004. A review of ECOT records shows that in that year, she received $3,000 as board president and $2,000 as a parting gift to buy a computer.

She also did not report in previous years that the school provided her with the use of a personal computer.

``It was definitely an oversight, and I will be filing a report with the Ethics Commission trying to explain that to them,'' Dembinski said of the 2004 omission.

She said the filing occurred while she was off work taking care of her husband, who had been diagnosed with cancer. An aide filled out the disclosure statement, ``brought it out to me and I signed it.''

She also said she didn't view the computers as gifts. Initially, all board members received computers so they could e-mail each other about school business, she said.

The second computer, she said, was a bonus.

Ohio Ethics Commission Executive Director David Freel said he could not comment specifically about Dembinski, but said that a person in her position is required to report sources of income, gifts, creditors, debtors and real estate.

If the commission were to investigate, it would ask whether this was an oversight or an effort to conceal her relationship, he said.

He also said that the investigation would have to determine whether the computers should be considered gifts.

Brian Hicks case

In July 2005, Brian Hicks, Gov. Bob Taft's former chief of staff, came under investigation for not reporting gifts that he received from Toledo coin dealer and Republican fundraiser Thomas Noe.

Hicks agreed with prosecutors to plead no contest to charges that he knowingly filed a false financial disclosure statement with the Ethics Commission.

In 2001 and 2002, Hicks did not report that he stayed at Noe's Florida vacation home. Hicks was fined the maximum $1,000. He avoided a maximum six-month jail sentence and was not placed on probation.

In all, Dembinski received $30,000 in board pay, $2,000 to buy a computer and the use of a computer of unknown value for her tenure with ECOT, according to records.

When she resigned from the ECOT board, she was making $92,000 in the Secretary of State's Office.

This year, ECOT enrolls about 6,500 students who study at home via computer, for which the school will receive about $39 million transferred from school districts that the students would otherwise attend.

Dembinski said that there was no conflict for her regarding the secretary of state's role in granting nonprofit status to ECOT.

Nonprofit status

Groups wanting to create a nonprofit organization submit their applications to Blackwell's office. The secretary of state has no legal obligation to test the legitimacy of an application, said spokesman James Lee. The office merely handles paperwork, and it's up to other agencies to enforce laws regarding nonprofits, he said.

ECOT has twice received nonprofit status from Blackwell's office. Nonprofits can use that status to be exempt from Ohio taxes.

However, the Ohio Department of Education encourages charter schools to also qualify for federal tax exemption under tougher Internal Revenue Service regulations. The IRS prohibits for-profit management companies from having influence over charter school boards and prohibits tax-exempt charter schools from political activity and lobbying.

Of the more than 250 publicly funded charter schools in Ohio, ECOT was one of a dozen last year that did not receive the federal tax-exempt status.

In three state audits, auditors raised questions about ECOT's relationship with the for-profit management company, Altair Learning Management, run by ECOT founder William Lager. And an e-mail between two state auditors quotes a former board member as saying it's understood that payments to Altair include political contributions and lobbying expense.

``I have no idea about that. My affiliation was with ECOT. The big expenditures for ECOT were the (computer) servers, PCs, delivery (of computers), teachers and software,'' Dembinski said. ``My focus was on the ECOT side. That sounds like a very incorrect statement to me.''

Records show that Dembinski attended meetings and communicated with ECOT's lawyer when they discussed the school's ability to meet the tougher federal requirements. She also was on the board committee that negotiated Altair's management contract.

As for political contributions, Dembinski said there was no concerted effort by her and three other ECOT-related individuals to donate in the same week to state Rep. Jon Husted, the legislature's strongest advocate for charter schools.

According to records kept by the secretary of state, Dembinski's $250 donation occurred within days of three other contributions totaling $4,000. She said she made the donation after talking to a friend.

On Husted's campaign report, she is identified as a ``self-employed consultant.''

STRS Update #1 - March 27, 2006; by Dennis Leone, STRS retiree Board member

Personal reflections after six months on the STRS Board (9-15-05 to 3-15-06)

The Good News

1. The Board voted unanimously to adopt a new Board Member Suspension Policy that will enable the Board to suspend one of its own members if he/she is indicted for a violation of Ohio ethics statutes, or if said Board member has been indicted for a conflict of interest, for placing STRS assets under risk, or for "self-dealing."

2. The Board voted unanimously to adopt a new Vendor Ethics Policy that will require the STRS Executive Director to inform the Board if an STRS vendor or contractor admits to, or is found to have committed, a violation of business or professional ethics. The policy, which was recommended by Board member John Lazares, requires the Board to evaluate the nature of such violations to judge whether or not to continue its working relationship with said vendor or contractor.

3. The Board voted unanimously to revise its policy for public participation at meetings so it is clear that individual Board members may choose to respond to remarks made by speakers or STRS members at the meeting. This policy revision was the result of the STRS Board Chairman declaring that I was out-of-order at the November Board meeting when I attempted to answer a question that was asked by an STRS member during the public participation portion of the meeting. The Board determined separately -- after a free-spirited debate -- that only elected Board members will be allowed to serve as Board Chair and Board Vice-Chair.

4. Investment earnings (market rate of return on investment assets) for Fiscal Year 2005 were an impressive 12.25%. Earnings during the first eight months of Fiscal Year 2006 have been even better -- at 13.0%. Quite a change from the down years in 2000, 2001, and 2002. Total assets at STRS currently stand at $65.5 billion. The Board has taken steps (see #5 below) to ensure that we can retain and attract top investment employees who are able to earn money for STRS.

5. The Board voted unanimously to restructure, in a reasonable fashion, the compensation levels of certain STRS employees and the bonus potential of investment staff. The plan places limitations on who will be eligible for a base salary increase, and restricts increases to 68 of 521 non-investment employees. Investment staff will be eligible for bonuses only if they meet their benchmarks. Maximum bonuses for investment staff will occur only for those who achieve an "outperformance" of 52 basis points. Subjective and discretionary factors will no longer be used for measurement purposes in determining investment bonuses. The compensation restructuring keeps STRS competitive with other pension systems, but also stays within the current budget. STRS is employing 115 fewer people than in 2001. I was very pleased with how this turned out. At least four Board members (including myself) were initially intending to vote no, but things were worked out in executive session to the satisfaction of all Board members.
6. The Board voted unanimously to add one internal auditor to the STRS staff (making STRS comparable to other pension systems) and to have the auditing staff report directly to the Board instead of to the STRS Executive Director. The Board's Audit Committee (Brown, Meyers, Leone) will sign off on the final evaluation of the Internal Audit Manager. (In prior years, important recommendations made by the internal auditors, with respect to spending abuses, were ignored by some at STRS, necessitating -- in my opinion -- this clarity for evaluations and who reports to whom.) The hiring of an additional auditor also will ensure that the prior concerns spending abuses will be properly monitored.

7. The Board voted 9-2 to purchase a very much needed new IT system that will replace the current obsolete system. The IT system handles all information matters pertaining to the STRS membership and it processes our monthly pension checks. John Lazares and I voted no on this issue, not because we were against getting a new IT system for STRS, but because we asked to see the $13.3 million contract (with a company called Vitech) before the vote. I learned the following day that the reason we didn't see the contract was that it simply wasn't ready and needed final staff revision. John Lazares and I contend that Board members should not be voting on such issues without having the contractual details in hand.

8. The Board's two-member Elections Committee (Fisher and Leone) has required the STRS Executive Director to notify all STRS Board candidates, immediately after they signed up to run for the Board, that they (and their election committees) may not use the STRS logo for any reason. Improper and unauthorized use of the STRS logo occurred during the 2005 STRS Board election.

9. The Board voted 10-1 to support House Bill 272, which -- if passed -- will prohibit full-time rehired retirees from utilizing STRS health insurance. The Board's vote included a request that STRS be permitted to delay the implementation of the new law for three years (because of employee contracts and negotiated union agreements). Board member Mary Ann Flannagan voted no because she desired a four-year waiting period. A point of contention regarding H.B. 272 is whether full-time rehired retirees who work in the private sector will be prohibited from utilizing STRS health insurance. I foresee some possible legal problems with this.

10. The Board worked together more during the regular meeting in March of 2006 than it did in any of my first five Board meetings. The greatest strength of the Board is that the members are not afraid to ask tough questions. While one Board member publicly labeled me as "intrusive," I believe the majority of the Board recognizes it is our obligation -- as caretakers of a $65.5 billion pension fund -- to be as "intrusive" as we need to be. I respect the expertise of the three investment specialists who were appointed to the Board, and I do not think it is too much to ask them and other Board members to respect the fact that some members of the Board have more expertise in the public arena. Board member Steve Buser, who was appointed by the State Treasurer, is an extremely valuable asset to the Board. He really digs for answers, and he is an STRS retiree himself from Ohio State.

The Not-So-Good News

1. The STRS unfunded liability (the number of years needed to have our assets equal our projected pension obligations) now stands at a huge 55.4 years. This is not good for STRS. The STRS Executive Director must present a plan to the Ohio Retirement Study Council for how STRS intends to reduce the unfunded liability to 30 years. Legislative approval for increasing the STRS contribution rate by 5.0% (2.5% from actives and 2.5% from employers), combined with a continuation of good investment earnings, would go a long way toward solving this issue.

2. The Board asked for data pertaining to what impact Senate Bill 190 (passed in 1999) -- which included the 35-year/88% rule and other pension benefit improvements for retirees -- has had on our unfunded liability. Had S.B. 190 not been adopted, our unfunded liability would be 17 or 18 years less today. While the Board is not considering a repeal of S.B. 190, and is not considering taking away any benefits retirees are receiving as a result of the legislation, it is my opinion that it never should have been passed. It also bothers me that the prior Board chose not to maximize financial assistance for retirees' future health care during the time period S.B. 190 was under consideration. We have a two-tiered system today -- one for those who retired before 1999, and another one that clearly favors those who retired in 1999 and after. It should have never happened in my book.

3. The payroll growth of active STRS members -- which increased between 4.50% and 5.94% every year between 1998 and 2003, declined noticeably to 3.91% in 2004 and 2.19% in 2005. For nearly 10 years, it was safe for STRS to project an annual payroll growth of 4.5% per year. If current trends continue, the Board may need to project significantly less coming in from the payroll of active members. This, as you might guess, also impacts our unfunded liability.

4. The Health Care Stabilization Fund is solvent only until 2021, assuming no changes in the employer contribution rate.

5. Ohio's teachers paid STRS $26 million for service credit in 2005 for their out-of-state experience. What I did not know until recently is that the service credit that was purchased in 2005 represented only 27.7% of the total cost of the credit. In other words, the total value of the service credit purchased was $96 million, which means that STRS picked up the $70 million difference. When I purchased five years for my Virginia experience, I paid what STRS told me to pay. I had no idea that I was paying only a fraction of the actual cost of the credit. This has to change in my opinion. When school boards -- through early retirement buyout plans -- purchase credit for teachers, they pay 100% of the actual STRS cost.

6. The Board voted 6-2 (three were absent) to direct the STRS staff to prepare retiree health insurance premium cost projections for 2007 that include a "catch-up" provision -- which means a premium for 2007 that makes up the difference for the minimal 3% increase in 2006. Board member Steve Buser and I voted no on this matter because we believe a different message was given to retirees a year ago. While it was clear to all that the 3% premium increase for 2006 was abnormal, and that retirees should not expect anything near that low in 2007, I have no recollection of being told that retirees should expect a gigantic increase in 2007 as a "catch-up" from the 2006 rates -- especially for spouses under the plan. Unless the STRS staff comes back with something significantly different, the premium increases for the 30-year non-Medicare retiree could increase between 12% (Basic Plan) and 15% (Plus Plan), while the increases for the spouse of the same retiree could increase -- get ready for this -- between 27% (Basic Plan) and 32% (Plus Plan). Speaking for myself, I would have voted no on the 3% increase last year had I known that increases of this magnitude were coming in 2007. Had I known we'd be looking at a possible 27%-32% increase for spouses in 2007, I would have preferred a much higher increase than 3% for spousal premiums in 2006 in order to keep down the cost increase in 2007. The Board was not given such projections. I have requested the staff to do as much as possible to keep these projected rates down for 2007, especially the projected rates for spouses. I also have asked to see the "claims history" that apparently will drive the 2007 rates.

7. "Adverse Selection" continues to be a problem. This is when a retiree in good health, especially those on the catastrophic (Basic) plan, drops his/her STRS insurance because a cheaper plan can be obtained through the open market. Consider this: My wife and I are on the STRS catastrophic (Basic) plan. Being in fairly good health, we didn't come close to hitting the deductible last year and nor did we exceed the maximum amount for prescription drugs. This means that we really never "used" the insurance plan, and the amount we paid monthly was to protect us for a single catastrophic event, like a car accident or a heart attack. What should I do if the rate for my wife's STRS plan goes up 27%? Since the healthier retirees and healthier spouses actually help pay for the insurance for those with health difficulties, shouldn't we try extremely hard to keep someone like my wife in the plan. Raising the spousal plan 27% will aggravate "Adverse Selection." I have asked the staff to consider ideas that might mitigate this problem. Looking back, the 3% increase for 2006 was designed to do just that.

8. The Board voted 7-4 in December to settle the lawsuit filed by STRS non-investment employees regarding the non-receipt of their final bonus check in 2003. Those who voted yes felt they were eliminating the chance that STRS would have additional legal costs associated with prolonging the matter, which I respect. I voted no for several reasons. John Lazares and I tried and failed to convince our peers that it was improper to vote on such a settlement agreement without having a document in hand. The Board simply directed that a settlement be executed that was based on a memory of what was discussed in executive session. As it turned out, the law firm representing the Board stuck a sentence in the document (filed with the court) that the Board never authorized in executive session. In my opinion, the Board received terrible legal advice on this matter. I offered a substitute motion, which also failed, that would have required STRS to first pursue having the settlement costs paid by Herb Dyer and the prior STRS Board members who didn't know what they were approving when they voted.
9. During the STRS Board meeting in January, the Board went into executive session to discuss two proposed policies under the belief that they might represent "imminent or pending litigation" at some point in the future. John Lazares and I objected to these matters being discussed in executive session. It is my opinion that discussing these matters in executive session was illegal. I will not be a part of future executive session discussions when such things are discussed. I feel we were not given good legal advice regarding the executive session in question. My hope, for everyone's sake, is that my peers on the Board will never do this again.

10. In February, the Board voted 7-2 (two were absent) to permit Board members Jeff Chapman and Mary Ann Flannagan to attend a professional development conference on pensions and retiree benefits near Orlando, Florida, for an amount not to exceed $7,000. John Lazares and I voted no, not because we are opposed to our peers receiving professional development, but because we believe: (A) STRS needs to do more to organize such conferences in Ohio by utilizing expertise already in this state; (B) All five Ohio public pension systems need to work together to reduce costs by jointly sponsoring the presenters to come to Ohio; and (C) It is too much money, in our opinion, for Board members to spend at a time when retirees are struggling to make ends meet.

11. The law firm representing STRS in the lawsuit involving the non-investment staff bonuses was paid $300,000 in December without formal Board discussion and without a Board vote. John Lazares and I expressed our opposition to all on this matter. I received support only from Mr. Lazares and Board member Steve Buser for there to be Board discussion before payment. I felt Jim Petro's office should assume the legal bills -- given that Petro himself voted against bonus checks (through his representative on the prior STRS Board), and given that Petro, due to his own conflict of interest, stepped back and selected the law firm to represent STRS. I intend to advance a proposed policy in the future that will prevent bills of a certain dollar amount to be paid without a formal board vote. The staff of the STRS Executive Director, based on email communications and telephone conversations with Board members, reached the conclusion that a majority of the Board was in favor of the bill being paid. I still question the legality of what happened.

12. It has been necessary for me to vote no each month on the Executive Director's monthly operating budget for STRS, and I will continue to vote no, because the budget: (A) Provides payments to staff, costing STRS $1.6 million per year, for unused vacation time and unused sick leave on annual basis -- which is in addition to the severance check they receive upon separation or retirement; and (B) Provides annual "Service Awards" to all STRS employees (except investment staff) for amounts between $125 and $1,000 simply because they work at STRS -- which I consider the same as an employee 13th check -- costing STRS $187,000 per year. I, perhaps, could support a "Service Award" for the lowest paid STRS employees -- those not eligible for the compensation restructuring that was just approved by the Board -- but not for the highest paid employees. (Teachers at the top of school district salary schedules do not receive a "step" increase.)

RH Jones: Health care essential ESPECIALLY for teachers

From RH Jones, March 27, 2006

To all:

In previous E-mails I have sent data backing risks professional educators have to their health and safety. A comparison was made concerning similar exposure to violence as Police/fire. Today's Beacon, 03-27-06, Section D front page, backs my contention that educators are exposed to health risks far greater than any other profession, including medicine! They reported a study by Charles P. Gerber a microbiologist at Arizona U. which indicated: teachers' desks ranked highest in germ infestation, with 17,800 bacteria per square inch. (Ranking over 700 are considered dangerously unclean.) In comparison doctors were 2,620; although dangerous, this is far less bacteria than teachers are exposed too.

The Ohio legislature must acknowledge the high risks that we are exposed over our 30-yr careers. As the STRS has requested a 2.5% employer increase, and a 2.5% employee increase, remains essential for retired teachers.

Robert Hudson Jones,
Retired Professional Teacher and proud member of CORE