From Dennis Leone: Point of Explanation and a Flashback

Dennis Leone to John Curry, May 7, 2007
Subject: Point of Explanation and a Flashback

John -- yes, the comments below represent a verbatim transcript of what was said at the April STRS Board meeting. [Click here to view comments] But here's point of explanation that may interest your readers and you.

Note that I state my concern about the proposed 12.45% increase in the budget category entitled "salaries and wages" for fiscal year 2008. Also note that Jeff Chapman expressed his concern over the proposed 8.5% overall budget increase. A few minutes after our remarks, the Board voted 7-2 (Leone and Chapman voting no) to give Damon Asbury the green light to present a budget to the Ohio Retirement Study Council that included another $1.5 million in order to restructure salaries and bonuses of investment staff even higher. I asked, before the vote, what this would translate into in terms of the increase in salaries and wages, as well as the total overall budget increase. The answer (BEFORE the vote) was that the additional $1.5 million would produce -- in fiscal year 2008 -- an increase for salaries and wages of 14.0% and an overall budget increase of 10.0%.

A few days after the vote, the staff initiated some cuts internally which meant that the proposed budget Damon actually submitted to the ORSC included a 13.7% increase for salaries and wages, and overall budget increase of 8.6%. While I am pleased that Damon and the staff took it upon themselves to make some cuts after the board meeting (which I would have liked to know about before they occurred), I still feel the overall 8.6% proposed budget increase and the line item increase of 13.7% for salaries and wages are just too high. Jeff and I also voted no because the board action gave Damon the okay to present a budget to the ORSC that included 9 new positions.........and while we were told what the new position titles will be, we were not told what the people will do, why they are needed, and what they will be paid. I felt all of this was a flashback to Dyer and the previous board from 2003.

The final board vote on the 2008 fiscal year STRS budget will occur at the June meeting. It will be difficult for the full board to pull back on the above budget items because Damon was told it was okay to present the above to the ORSC, which he has.

Dennis Leone