OREGON AFSCME

e-lert #11  ¥  March 27, 2009

Edited by Don Loving, Council 75 Public Affairs Director

 

A nice PERS win for retirees headlines this week's missive! Alas, there will be court appeals. Plus another busy week at the capitol, and we say farewell to a good friend who passed away.

 

It's e-lert No. 11, and it starts right now ...

 

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We start outside the capitol building this week with a story of note for PERS retirees ...

 

FIRST ROUND WIN IN 'ROBINSON' — Here is some preliminary good news for PERS retirees: Multnomah County Circuit Court Judge Henry Kantor has issued his judgment in the Robinson case and on the surface, his decision couldn't be much better from the unions' standpoint.

 

However, we should note early on that Kantor's decision will be appealed, so any final resolution is still years away. More on that later.

 

Background: The Robinson case involves the so-called "window retirees" — that is, PERS Tier One members who retired in the "window period" of on or after April 1, 2000 and before April 1, 2004. Accordingly, this group of retirees received 20 percent crediting on their PERS accounts for calendar year 1999 — though the actual crediting occurred in March 2000, hence the window period that began the following April 1. Following legislative action and numerous other court decisions, PERS later went back and recalculated those 1999 earnings at 11.33 percent. In early 2006 PERS set out to recoup "overpayments" made to the window retiree group. Literal invoices for amounts due were sent out. For those retirees opting for "regular" monthly benefit checks from PERS those checks were reduced; retirees who had opted for a lump sum payout were sent a bill for the full amount "owed."

 

The PERS Coalition, a voluntary group of unions that represents public employees and includes Oregon AFSCME as a founding and leading member, argued in Robinson that state law required PERS to treat any benefits erroneously paid to retirees as an administrative expense of PERS, to be paid exclusively from future income of the retirement fund as a whole, not collected back from the retirees.

 

Kantor ultimately agreed. His judgment includes three key points:

 

á       The PERS order that set into motion the repayment process is "invalid and unenforceable as a matter of law;"

 

á       PERS is prohibited from continuing to attempt to enforce the repayment order, and is specifically precluded from adjusting or reducing monthly or lump sum payments; and

 

á       PERS shall restore any funds collected from or charged to retirees "in any way," including the reduction of monthly payments or collected from retirees who responded to the invoices and repaid PERS.

 

Again, it's a big win on paper that unfortunately faces immediate legal action.

 

"We expect PERS to do two things," said PERS Coalition attorney Greg Hartman, whose firm is not handling the Robinson case directly (the firm of Swanson, Thomas & Coon is the firm of record on Robinson) but does interact constantly with the Robinson attorneys.

 

"First, we expect PERS to file for a stay of the judgment, saying it cannot afford to repay retirees, at least until the case reaches a final resolution. All told, between Robinson and Arken (see below), we're talking about a figure of some $800 million, so it's not small potatoes.

 

"Second," Hartman continued, "PERS will certainly appeal Judge Kantor's decision to the Oregon Court of Appeals, which is the next step in the process. You're looking at 18 to 24 months before you get a decision there. And then, whichever side 'loses' at the Court of Appeals is highly likely to appeal to the Oregon Supreme Court, which is another 18 to 24 months. So we're looking at some three years and change before we have a decision from the state Supreme Court, which should be the ultimate decision on this matter."

 

Hartman said PERS Coalition members have decided to vigorously fight the expected stay. The unions want PERS to follow through and refund money now.

 

"We are talking about retired people after all," said Hartman. "The unfortunate truth is that some of these people are going to die while all this is going on, further muddying matters down the road, at least for those families." Until and unless another court changes Kantor's judgment, his decision is the law right now and the PERS Coalition believes that ruling should be enforced.

 

The Arken case, which Hartman's firm is handling, was filed parallel with Robinson and is running about nine months ahead. Named for lead plaintiff Michael Arken, an Oregon AFSCME retiree, Arken is a class action lawsuit on behalf of the window retirees that also challenges PERS' efforts to re-allocate 1999 earnings and make collections from individual retirees, though coming at it from a "contractual right" angle. Last May Kantor released a complicated and confusing opinion on Arken that upheld the retirees' rights on the one hand but stopped short of declaring said retirees had full contractual rights as defined by the unions. The PERS Coalition appealed Arken, which is already sitting in the queue at the Court of Appeals.

 

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From the capitol ...

 

(AFSCME) GREEN BUILDING BILL HEARD — Council 75 Political Coordinator Ralph Groener is following a passel of environmental bills this session, one of which — SB 79 — was up for a hearing on March 26.

 

SB 79 is the so-called "green building bill." Under the measure, every residential and commercial building would receive an energy performance certificate, similar to the miles per gallon ratings on vehicles, to determine how efficiently the building uses its energy.

 

"We had one hearing, then the bill was in a work group for over a month," said Groener. "This second hearing featured more testimony, but no decision. They'll schedule a work session soon.

 

"The upside of the bill is that if passed, potential buyers would be able to project their future energy bills more accurately, which would lead to investments in a home buy current owners," said Groener. "But there are legislators who are hesitant with the idea of including existing homes from a privacy standpoint, so that's something to be ironed out. There's less concern about adopting such a program for new and commercial buildings. I expect we'll see some sort of compromise when all is said and done."

 

Also on March 26 the House Environment and Water Committee passed HB 2184 — the Oregon Bottle Bill update that we detailed last week — on a 5-3, strictly partisan vote. Voting "Aye" were committee chair Rep. Ben Cannon (D-Portland), Rep. Jules Bailey (D-Portland), Rep. Phil Barnhart (D-Eugene), Rep. Deborah Boone (D-Cannon Beach) and Rep. Jefferson Smith (D-Portland). Voting "No" were Rep. Cliff Bentz (R-Ontario), Rep. Vic Gilliam (R-Silverton) and Rep. Bob Jenson (R-Pendleton). However, Boone indicated that although she voted "Aye" to move the bill out of committee, she was likely to vote "No" on the floor. Groener is already busy working up a floor statement.

 

By the way, if you didn't know, there is a relatively new "AFSCME Green" environmental caucus within Council 75. Oregon AFSCME Organizer Steve Hughes is the staff liaison; you can e-mail Hughes if you have any questions.

 

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MESD LOBBYING — As we relayed to you last week, the unusual tandem of state Sen. Mark Hass (D-Beaverton) and Sen. Jeff Kruse (R-Roseburg) will soon co-introduce a bill bearing the number SB 564, which will ultimately be a "gut and stuff" bill that reforms ESDs statewide. It's an alternative to the AFSCME-sponsored SB 650, which was aimed at reforming ESD budgeting processes and creating a budget oversight committee. SB 650 did receive an initial hearing, but Council 75 lobbyist Mary Botkin says that realistically, the bill as drafted was too broad and wasn't going to pass.

 

Still, Hass and Kruse saw enough merit in SB 650 to make sure that SB 564 addresses many of the same issues, specifically transparency in the ESD budgeting process.

 

AFSCME and Botkin have not been shy in telling lawmakers that many of the ESD-related issues came to light in late 2007 when Local 1995 ended up going on a two-week strike against the Multnomah ESD in East Portland. This week, Local 1995 members Nanette Cooper and Marty Ward ventured to Salem to reiterate their concerns to legislators. Cooper and Ward were both Local 1995 Bargaining Team members in 2007, and Cooper is now the local's president (following longtime Local 1995 President Kate Baker, who is now a Council 75 staff rep).

 

Along with Local 1995 staff rep Issa Simpson, Botkin, Cooper and Ward met with Hass and state Sen. Suzanne Bonamici (D-Beaverton), who also sits on the Senate Education and General Government Committee which Hass chairs. The Local 1995 group had a chance to tell the senators some of their experiences with MESD and urge the lawmakers to pass SB 654.

 

"It was good to be here and see how this works first hand," said Cooper, able to make the jaunt along with Ward this week because it's spring break. "I enjoyed the opportunity to tell the senators face-to-face what we went through."

 

"I have never been down here like this to lobby," added Ward. "It's been an eye-opener. I have a much better appreciation of what our union does for us here in the capitol. I'm really glad I came."

 

Hass and Kruse's new SB 654 isn't "live" yet, but should be soon. Once it is, you'll be able to track it on the AFSCME bill tracking system. You can access that right on the top of our legislative page on the Oregon AFSCME website.

 

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BALLOT MEASURE CHANGES — This is a big week for those wanting to tweak Oregon's initiative and referendum system. HB 2005, the omnibus ballot measure bill from Secretary of State Kate Brown, received its first hearing March 25. March 25 was invited testimony only; today (March 27) will see public testimony on the bill.

 

Brown herself outlined the key points of the measure, aided by Margaret Olney of the state Attorney General's office. (You may recall Olney as one of the partners in Council 75's longtime outside legal counsel firm of Smith, Gamson, Diamond & Olney.)

 

"We're calling this 'IRMA 2,' the Initiative Reform and Modernization Act," said Council 75 Political Coordinator Joe Baessler. "We passed 'IRMA 1' last session, which was just some little changes. HB 2005 is much more comprehensive."

 

We've outlined the bill's main components in earlier editions of the e-lert and won't go over everything again here. One of the biggest features is the call for "rolling signature turn-in," which means signature gatherers must turn in sheets on a regular basis, which in turn gives more time for verification and cuts down the possibility of copying signatures on other petitions.

 

"There appears to be support for the bill from committee members," said Baessler. "More interestingly, there is support from the signature gathering community that does things the right way and dislikes the cheaters as much as we do. They figure if the 'bad guys' get weeded out, the legitimate signature gatherers will have an easier time getting their petitions signed."

 

Also today the committee heard testimony on HB 2941, a measure that calls for proposed initiatives that are essentially the same to have the same ballot title. This will help stop Bill Sizemore and his ilk from filing several slightly different initiatives in an effort to go ballot title shopping to see if one version resonates better with voters, a practice that costs the state money as state attorneys have to prepare the various ballot titles.

 

HB 3033 also received a March 27 hearing; it limits signature gathering for local government measures to a two-year time period. Interestingly and under the radar, there is no time limitation currently on petitions for city, county and special district elections.

 

On Monday (March 30) the committee will hear many other elections-related bills, including SJR 23, a referral measure that would limit the scope of initiative-inspired constitutional amendments, specifically banning them from impeding the Legislature from raising revenue.

 

Finally on this topic, Baessler reports AFSCME is working with Brown on a bill that would create a "five-year timeout" on initiative petition issues — that is, if an issue fails at the polls, it cannot be brought back for five years.

 

"For example, the 'paycheck deception' issue that we face every two years here on the ballot — and which has been filed again for 2010," said Baessler. "Under this new law, you wouldn't be able to keep running the same measure year after year. Several other states have adopted the 'timeout' rule, so it meets U.S. constitutional muster. It's a concept we would definitely support."

 

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REVAMPING BM 50 — Back in 1997, voters passed a Sizemore property tax measure, Ballot Measure 47. It was so flawed in language — something that even Sizemore admitted — that the then Republican-controlled Legislature brought Sizemore in as an ad hoc consultant and re-wrote the measure, sending the "fixed" version out to voters as Ballot Measure 50, which passed. We've been living with its consequences ever since.

 

BM 50 placed a 3 percent annual cap on property tax growth. It also rolled back assessments five years, to 1992 levels, and added a three-fifths majority vote needed to any new tax measure in the Oregon House (where all revenue measures must start under the Oregon Constitution). It also moved the baseline for property taxes from assessed value to real market value and eliminated any "floor" for property tax assessments.

 

Fast forward to today, where economic conditions have property values plummeting. Whereas property values could have dropped in some instances by as much as half — which will be incorporated into future property tax assessments — Measure 50 says they can only re-grow by 3 percent per year when things pick up. That's a formula that could leave virtually every Oregon county bankrupt in 10-15 years.

 

"It's a situation that people didn't see coming, but it has to be fixed," said Groener.

 

They say politics makes for strange bedfellows, and if ever that adage were true, this is the case. Weighing in on the issue to help fix the problem is Don McIntire, the author of Oregon's original property tax limitation measure, Ballot Measure 5, which passed back in 1990. Although both McIntire and Sizemore fit under the broad category of "anti-tax activist," they have never been joined at the hip on issues and, frankly, have never cared much for one another.

 

"Even Don McIntire recognized the need for some stable floor for local government services," said Groener. "Measure 5 included a $10 combined floor for local government tax rates. Measure 50 puts everything at risk, and McIntire understands that. On this issue, he's on our side."

 

Groener (and AFSCME by extension) is working with a coalition of concerned partners asking the House and Senate Revenue committees to appoint a broad interim task force to study the issue and bring back recommendations for change. Groener believes that task force should report to the anticipated February 2010 special session, but understands it may have to wait until 2011.

 

"But we simply can't wait any longer than that," he says. "As it is, this situation puts the delivery of all county-based health and mental health services at risk much, much sooner rather than later. We're running out of time."

 

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PERS PRIORITY BILL — To date, there is one big priority bill regarding PERS at the 2009 Legislature. That's SB 897, soon to be heard by the Senate Rules Committee.

 

Botkin, the "Queen of PERS" not only for AFSCME but within the entire capitol building, says SB 897 has four key components:

 

• It would create a new PERS board seat specifically for a PERS retiree;

 

• It would establish a benefit verification process so active members would know "for sure" what they'd be getting when they retired (see below);

 

• It would allow Tier 3 (a.k.a. OPSRP) members access to the same health care benefit plan as Tier One and Two members; and

 

• It would clarify and strengthen the definition of "make whole" in regard to PERS benefits as pertaining to the Employment Relations Board and related decisions.

 

The verification process piece relates to what is known as the Kay Bell lawsuit, when retiree Kay Bell was told she would receive a certain benefit level then actually received over $1,000 less per month when she actually retired. Kay Bell the legal case fixed that circumstance; SB 897 would ensure it doesn't happen again in the future.

 

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Quick hits on other items of interest ...

 

+ Botkin continues to work, along with the entire PERS Coalition, on HB 2831, which modifies some portions of the Oregon Public Employee Collective Bargaining Act (PECBA) back to where PECBA stood before changes brought by Senate Republicans in 1995. The latest challenge: thought from some lawmakers that any PECBA changes must be routed through Ways and Means because there would be a fiscal impact. "That ignores the current bargaining world where we are seeing rollbacks and concessions," said Botkin. "Using that logic, SB 750 in 1995 should have been considered a revenue bill."

 

+  In the March 13 e-lert, we told you that Groener engaged in some outside-the-capitol lobbying on behalf of Local 1329-1, Council 75's smallest local union which represents the three employees of the City of Prineville Railway. We're happy to report that the Railway did indeed receive word this week it is getting $1.3 million of federal stimulus money being doled out via the Oregon Department of Transportation to maintain and update its 18-mile spur that connects Prineville with the regular north-south tracks operated by the Burlington Northern, Sante Fe and Union Pacific railroads at a junction just north of Redmond. The city is extremely grateful for Groener and AFSCME's efforts on the issue.

 

+ Here's a real crisis, at least for some: no booze! Botkin reports that the Oregon Liquor Control Commission, home to AFSCME Local 2505, has told legislators that making a 30 percent cut (required for all agencies in anticipation of further state revenue deficits) would mean its distribution staff couldn't get a sufficient supply of liquor to state liquor stores to meet demand. Obviously, decreased sales means decreased collection of the hefty state taxes on hard liquor. "I believe the technical term is called shooting yourself in the foot," said Botkin.

 

+ SB 311, which raises the tort cap law in Oregon, has passed the Senate and moves on to the House. It's an issue particularly important to the Oregon Health & Science University, where AFSCME Local 328 represents over 4,000 members. The compromise bill is a two-tiered system that will allow people to recover more money when they're injured by government negligence, but give governmental agencies better insight on how much insurance they need. Lawmakers tried to increase the tort cap late in the 2007 session after the Oregon Supreme Court ruled — based on a case stemming from OHSU — that the state's old cap of $200,000 per incident was outdated and far too low. The compromise creates a two-tiered system with higher limits for an institution like OHSU — which faces possible medical malpractice lawsuits that are always super-expensive — and lower limits for local governments and school districts, which do not routinely face the possibility of multi-million dollar suits. "Our jurisdictions need some certainty, and this bill should provide that," said Groener.

 

+ Baessler says HB 2009, the health care premium tax proposal, faces a new challenge as the hospital association and insurance companies are pushing for a 1 percent "claim tax" rather than the proposed 4 percent provider tax. "That is a 1 percent 'sales tax' on patients each and every time you pay for health care that we will vigilantly oppose," said Baessler. More on this issue as it develops.

 

+ Groener is concerned about a move from state Sen. Alan Bates (D-Ashland) to create an interim task force to study "pilot projects aimed at creating alternative methods of delivering county-level health care services," which would include mental health services as well. "We have to make sure this doesn't spiral into a new round of contracting out our members' services," said Groener, who noted that already 18 of Oregon's 36 counties at least partially do just that. "We know from experience this isn't good for our members, nor is it good for the care recipients. Cascadia in Multnomah County is a prime example."

 

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A couple of notes back outside the capitol ...

 

NO RAISES — Members of the AFSCME International Executive Board, meeting March 24-25 in Washington, D.C., have voted to suspend pay increases for all management staff that were due to become effective on July 1.

 

The action includes all national union management staff, including AFSCME President Gerald McEntee and Secretary-Treasurer William Lucy.

 

Earlier, the management staff of Oregon AFSCME Council 75 took similar action, as they, too, will skip scheduled pay increases due July 1.

 

"We are trying to lead by example, and we want to show AFSCME members everywhere that we do understand the hardship and economic crisis that our membership is facing," said Ken Allen, who is both the Council 75 Executive Director and an AFSCME International Vice President and Executive Board member.

 

"We face some difficult times, and our union is tightening its belt, just as our families are having to do at home," said Allen. "We're taking steps at both the national and state level to ride this out as best we can. National and state union management are giving up pay increases. Our Council 75 staff union voluntarily made changes in their health insurance package that will cost them money out-of-pocket but save the Council several thousand dollars. So we're all working cooperatively to see this thing through. We face a tough year or so, but we'll all pull together and things will get better. We have to be patient."

 

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MEMORIAL SERVICE — We end this e-lert on a sad note. Bill Uebelacker, husband of longtime Local 328 member Genie Uebelacker, passed away on March 21. He was 83.

 

Though Bill was never an AFSCME member, he enthusiastically joined the AFSCME retiree group when it was formed and Genie signed on. Bill and Genie were mainstays of any and all retiree events and meetings, as well as devoted political action volunteers. He will be greatly missed.

 

There will be a 12-noon funeral mass for Bill Uebelacker on Friday, April 3, at St. John the Baptist Catholic Church in Milwaukie. A meal will follow, and any friends of the Uebelackers are invited and encouraged to attend.

 

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