Molly Janczyk: A report on STRS/CORE meetings, January 18, 2007

From Molly Janczyk, January 18, 2007
Subject: STRS/CORE Meeting: 1/18/07

My opinion and assessment:

Gary Allen joined us to speak of common goals. It was a congenial, interactive and informative meeting. Glenna Barr will present minutes of the CORE meeting specifics. All were professional and respectful. Mostly topics of legislative goals and bills were discussed with ques. and ans. and suggestions by both sides. There were a couple of legitimate questions and statements addressing the plight of retirees and current board members in general which Gary addressed.

Some legislative issues: Allen:
1. SB206: WEP. Only 4 legislators so far signed on. Email and contact legislators as this is a total repeal of the Offset Laws. Allen is very adament Offset laws are wrong for retirees who earned and need their Soc. Sec. money or spouses of recipients.

2. School Funding : uncontstitutional for over a decade. Now all education grps. back legislation to identify costs per student. Write Sherrod Brown and Strickland and other legislators to support this legislation.

3. Alternate Retirement legislation: HB700: This legis. has to be dealt with; wrong! Schneider supports it. She made a fortune off nursing homes and needs to be contacted about educators' retirement pensions. OEA keeping records of who supports what issues.

Ann Hanning and Lou DiOrio spoke to us as well informing us of all steps being taken regarding several bills and pending legislation affecting us. I, as a member of all organizations present, asked they continue to speak to us as this enables communication which we have wanted. Also, it goes a long way to inform membership of what is being done on behalf of retirees.

Those I spoke with felt it was a positive meeting promoting collaborative efforts.

The HCA legislation must be reintroduced. Bill Leibensperger told me that it would be and there was a sponsor . There may be more than one sponsor. Gary Allen told us to wait to contact legislators until it was reintroduced. When it is time for us to act, the website of OEA will have steps and options to follow. OEA will let us know.

I was proud of all my organizations today. I have notes on the rest of the meeting but am sure Glenna will be comprehensive.

PM Meeting:
Leone to Damon: Gov. Strickland has made an executive order for state agencies to put in writing and make it available to the public reasons for awarding big contracts. I know we a not a state agency but how will STRS address this. Damon: We are not directly impacted being a quasi state agency but we are affected and want to comply. We will look into this and determine how to convey info. Leone: Also, Strickland's orders state meetings must be made available to those who cannot attend and how is it being addressed? Damon: The subcommittee and the IT dept. are looking at this.

Lazares: Proposed legislation: We must be very aware of pending legis. and speak to legislators. Schneider's aide said the HB700 will happen. Be aware and ready to contact legislators.

Speakers:

1. Vivian Brown: 40 yr educator. 33 yrs with 7 yrs as sub. Thank you for trying to keep HC affordable. Used to be relatively low costs but now increasing until Washington does something about it. Talk with School Boards, powers to be in Ohio, to support HCA legislation. I worked for 40 yrs for retirement with HC. Please keep trying -- work together -- don't allow the past to impede progress or render you inactive. We are depending on you -- all of you -- to do whatever it takes to keep things moving.

2. Dr. K. Fluke: 21 years retired. Grateful for what I have. I respect the counselors but there should be a standard of operations: SOP. Ask every member what their military experience is to establish if qualify for benefits. I was denied Military Reserve credit and Damon contacted Gary Russell for me to get benefits. I do not understand parallel time: If 12 months parallel -- 3 months should not be counted as parallel credit. HB71: Ohio Nat'l guard can purchase 5 yrs. What about amendments for ROTC to add them to bill? People fall thru the cracks. Counselors need to ask each member about their military involvement as a SOP.

There were 5 speakers. Up to 15 can be allowed. Though there were only 5, Dr. Fluke was called out of order by chair Ramser when his 3 min. elapsed. Dr. Fluke drove from Summit Co.

3. Robt. Jones: Addressed the 'pick up' policy by some school boards. When employer pick up employees' contributions or part in leiu of pay raises, STRS loses. It is employer money and should be part of raises for educators. Not cost neutral. STRS loses investment income esp. if given last 3 yrs of career. Never rt. for a LSD to give to 1 or few what rest of employees do not receive.

As Leone said, I feel we are at infinity due to lower than expected growth rate of 4.5%. We are at 2.03%. Educators are down in numbers and leaving state. If trend continues, can't use the 4.5% formula. STRS loses.

4. Nancy Boomhower: part time rehire after career teaching. Topic: Legal or Ethical: Legal to spend $60 on dinner; is it ethical? Legal to spend up to $6000 on seminar; is it ethical?

Ben Franklin said pennies add up; what is only a drop in the bucket to STRS and wouldn't pay for HC anyway is a huge drop for retirees.

Childcare still not cost neutral. Not asking to close it, just fund it by those who use it by lowering salaries and reducing staff. Doesn't take a degree to change a diaper. Make it cost neutral! Ethical!

Retirees choose ethical every time. STRS: Choose Ethical!

5. Tom Curtis: Many votes make no sense to me from this Board continuing gross misspending. My feeling is unfunded liability is infinity due to Leone's pt. on projected growth rate not at 4.5%. So this affects liability. Board can't continue to rubber stamp what Damon wants. Weigh decisions by those we know we can trust. To the Chair: You embarrassed yourself with media negative comments about Leone and never apologized to my knowledge. I will mention this until you apologize to Leone.

Extend the 3 min for those driving far to get here when under 15 speakers on list. Time is allotted for 15 so time is available. Show respect for what they came to speak to you about.

Following the speakers, Leone revisited the pt. of 'pickups.' Robt. Jones' microphone was out for part of his speech which I tried to catch best I could above. I do not completely understand this issue so will try to address their comments as accurately as I can:

Leone stated this is not a non issue as all the money that would have come to STRS does not if LSB's elect to pay part or all of an employee's contributions instead of a pay raise. He said this affects the projected growth rate as raises are not then part of the contributions to STRS. Slater says it is a pass and have been around for 25 yrs. mostly for superintendents and higher education staff. He says if LSB pay part of contribution instead of raise, no change for STRS and STRS gets the growth as well if there is a raise.

On $50,000: 10% contribution is $5000. If employer picks up or if there is a raise, result same. Contributions are made on combined salary + pickup, not just salary so no change for STRS.

**Someone who understands this, feel free to clarify this butchered attempt on my part.

Travel Revisions Discussion:

Leone: $5 breakfast, $10 lunch, $20 dinner. Not allowance of total for day as someone could use total just for one meal.

Discussion of who can submit for reimbursement for meals and mileage for after stays of Board meetings and for any meeting:

.....• Participant to read: invited and submit documentation of activity asked to perform such as committee or as Rep for STRS to address attendees in a capacity not just attending as self proclaimed available to ans. ques. so submit expenses for a meeting a Board Member chose or wished to attend.

.....• Invited speaker

.....• The Chair of the STRS Board would have such duties due to position (Lazares).

Leone and Lazares agreed that INVITED speakers should be reimbursed. Puckett wanted to know if they were repping STRS if speaking to a RTA. (directly targeting Leone, it seemed). Leone stated he was invited as an STRS Board Member. Lazares added anyone can say what they want as speaker but they are they repping Board; no power without entire Board. If invited to speak, get reimbursed.

Leone questioned why new policy excludes fees and tuition. Damon noted costs of fees and materials can run $2000 alone without air or hotel. A national seminar has been recommended by some and lasts 5 days.

Lazares: several times throughout: We must be very careful spending others' money when they (retirees) are suffering. ORSC is looking at us and looking for us to be prudent. We have to overextend in not spending to show our responsibility. As leaders, it is very important for us to justify spending as long as we have retirees suffering.

Leone: never a cooling off period from scandal of Board Members who enjoyed others' money. If LSB's had done such, no one would attend next year. Folks would be fired. This new board has never understood the effect of this spending on parties and booze on retirees. Retirees do not get a vote on spending as folks do with levies.

Hotels: Puckett wants to see State allowances for hotels as feels STRS' too high at $125 plus txes in state and up to $225 in NY, and some other cities.

Leone: I agree but never thought I'd get agreement on more than meals.

Damon: said these are national figures.

Johnson wants to see what legislators use as their allowances and then what public employees use to compare. He doesn't expect to turn in any receipts and doesn't expect to be reminded of use.

Topic to be revisited at Feb Retreat. Leone concerned Lazares unable to attend due to surgery and if he cannot attend, travel changes won't occur. Lazares: "Take it now to ORSC."

Wording to be looked into in some areas and it was asked when it can be presented to ORSC which it must be. Feb. seemed to stand since it was stated by Ramser not complete yet.

3% increases:

Ques: Board approved AON? Damon: Yes

Ques. arose re: 3% increase based on national competitive rates..

Johnson: Rationing up salary to stay competitive beyond 62% AON report for current year and meet new requirements.

Leone: Does the salary schedule change due to 3%?

Damon: only begin, mid pt. and end pt. levels. Not all across board -- esp. if top of range for their job.

Lazares: What was total cost for 3% budgeted for raises for this fiscal year? Slater: $1.2 million.

Leone: number impacted by the 3% new competitive rate recommended?

Damon: no change for this year until budget settled for next year.

Not everyone gets merit raises within their salary range and those at top of range get no more at this time.

This is for new hires and those not exceeding their salary ranges and only if recommended for competitive merit raise. not something automatic for all.

Brooks: new investment Board Member: this is the norm; shows market pts. for jobs; not across board for anyone; adjust market pts. as market indicates not yearly necessarily.

Slater: not like educators with raises yearly and then steps.

Indepen. Fiduciary Audit completed: all findings norm and approved. I will be more specific if not included in Exec Direc Report STRS puts out. It is long. This was part of Damon's report.