Saturday, June 27, 2009

Tom Curtis and Mike Nehf re: Cost reductions at STRS

From Tom Curtis, June 27, 2009
Subject: 062709 STRS Cost Reductions
Mike,
Thank you for responding to one of my questions. Thank you for continuing to reduce the STRS staff numbers during your first year of tenure at the STRS. You are to be congratulated for doing such, something that obviously does not bring you praise from the employees. Please continue to evaluate all areas of employment expense and continue to make reductions accordingly.
You have not been willing to provide me with numbers of part-time employees for past years. However, it is my hope that the use of more part-time employees would be considered, as they are usually less expensive to employ. Considering the unemployment rate in Ohio, most employees being considered for layoff would be willing to move to a part-time status, as opposed to unemployment, which would remove their HC benefit.
The fact is the STRS has been way overstaffed since Herb Dyer's 10-year excessive misspending and mismanagement tenure. In 2003, Dr. Leone asked both Herb Dyer and Damon Asbury to make staff reductions by RIF, but neither would consider such. The fact is, all school administrators that you represent have to do that frequently in today's economy, so you should play by the same rules as well.
As you are aware from the many emails you must receive daily/monthly from retirees, you will be expected to continue to reduce costs. Staff reductions are only one area, but a major one. I will offer a few more.
Retirees will certainly understand that educational programs that have been offered in the past are expensive to offer and staff. Banks, credit unions and investment counselors offer these educational programs regularly. Other then off-site retirement counseling (a reduction of incidence which should also be considered), all other educational programs for retirees should be eliminated until the economy and the STRS holdings greatly improve. These programs are nice, but really are not required, considering the cost to the system.
Parking for employees that work in downtown Columbus usually comes at a premium price, as does the cost of the large parking deck the STRS owns. Though it is a nice benefit for employees, amongst the many others they receive at our expense, charging for such should certainly be considered. I would doubt that many other large employers in the downtown area provide such a benefit for there total staff.
We the stakeholders of the STRS pay for numerous benefits for employees, far too many to review here. The STRS employee does not share in the expense of any of these benefits, as they do not belong to the STRS retirement program. In my opinion, this is an oversight by the legislature, but then all 5 of the pension systems pay into the one that legislators pay into, OPERS, don't they? Is there a possibility that this oversight might be changed in the future?
As always, I hope you will kindly respond to my suggestions and questions.
Tom Curtis
From Mike Nehf, June 26, 2009
Subject: RE: 061609 Cost Reductions
Tom,
When I arrived at STRS Ohio nearly one year ago the head-count was 610, FTE’s 595, and position openings 9. As of today, the numbers are 592, 575, and 2, respectively. I take no credit for the work that previous administrations completed in reducing the numbers from over 700 to 610.
Respectfully,
Mike Nehf
From Tom Curtis, June 16, 2009
Subject: 061609 Cost Reductions
Mr. Nehf,
You were recently quoted as saying in Sidney that the STRS has reduced staff size from 700 to 600. Just how many of those reductions were generated under your watch? Please be specific.
To my knowledge, the STRS has always been about business as usual, no matter what the loses totaled. The STRS investments for this decade now total over $42 billion dollars (12.3 in 2002 & 30+ in 2009), yet the investment staff and others have continued to receive millions in bonuses. Just how can you possibly justify such rewards even being considered?
Please don't tell me the board approved such, as if these bonuses did not come up for a vote through you or your predecessor, they would not have even been considered.
Thank you for a prompt reply.
Tom Curtis
STRS Stakeholder
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