JAN, 21, 2011:NWLP
1/18/11
10:35 AM
Page 12
Oregon Supreme Court hears two PERS cases
Shiprack
seeks open
Metro seat
Freshly retired union official Bob
Shiprack has thrown his hat into the
ring to fill an open seat on the Metro
Council, the regional government that
coordinates land-use and transportation
planning in Clackamas, Multnomah
and Washington counties.
Shiprack, 60, retired Oct. 1 after 25
years as executive secretary-treasurer
of the Oregon State Building and Con-
struction Trades Council.
In January, Metro Councilor Robert
Liberty announced that he would be
leaving before the end of his term —
January 2013 — to take a job at the
University of Oregon. Because fewer
than two years remain in his term, the
seat will be filled by appointment of the
five remaining Metro councilors and
Metro president.
“I’m seeking the seat because I
would like to see a change in the style
of leaders representing District 6,”
Shiprack told the Labor Press.
Liberty, a former staff attorney for
the environmental group 1000 Friends
of Oregon, has often been at odds with
construction unions because of his
staunch advocacy for conservative land
development. He also opposes the Co-
lumbia River Crossing, a huge job-pro-
ducer for construction workers.
Immediately after Liberty an-
nounced his departure (effective Jan.
15), his next-door neighbor Bob
Stacey, who lost the November election
for Metro president, said he wanted the
job. Stacey is a former director of 1000
Friends of Oregon.
Shiprack said residents of District 6,
which includes portions of Northeast,
Southeast and Southwest Portland,
“know that jobs are still the number
one issue in the Metro area, and value a
new councilor with experience that can
help bring more jobs to our region.
PAGE 12
Arken and Robinson
lawsuits are related to
public employees who
retired between April
2000 and April 2004
B OB S HIPRACK
They want a councilor who will be a
uniter — someone who has experience
building broad coalitions around con-
troversial issues.”
Shiprack is a former six-term state
legislator and past chair of the state’s
Energy Facility Siting Council. He was
born and raised in Southeast Portland,
which happens to be in District 6, al-
though Metro hadn’t been created yet.
The Metro Council is expected to
declare a vacancy at its meeting Jan. 20
(after this issue went to press). Once it
does, candidates will have four weeks
to apply for the part-time post that pays
$37,774 year. After the application pe-
riod ends, the Council will hold a pub-
lic meeting, at which time councilors
will interview applicants and invite
members of the public to speak.
The current Metro Council is com-
prised of President Tom Hughes and
Councilors Shirley Craddick, Carlotta
Collette, Carl Hosticka, Kathryn Har-
rington, and Rex Burkholder.
(Editor’s Note: A month after retir-
ing, Bob Shiprack was diagnosed with
colon cancer. Because a colonoscopy
caught the cancer early, doctors were
able to remove it surgically, with no
need for chemotherapy or radiation.
He told the Labor Press last week that
he is cancer-free and recovering nicely.
He wants to remind everyone not to
put off having a colonoscopy when they
are of age, typically after turning 50
years old.)
SALEM — The Oregon Supreme
Court heard oral arguments Jan. 6 on
two PERS (Public Employee Retire-
ment System)-related cases.
Both the “Arken” and “Robinson”
cases relate to the so-called “window
retirees” — people who retired from
PERS between April 2000 and April
2004. Those who retired within this
time frame received a benefits boost
when the PERS board credited 20 per-
cent market earnings to their retirement
accounts in 1999. The amount was
retroactively reduced to 11.33 percent
by Marion County Circuit Court Judge
Paul Lipscomb. PERS has said those re-
tirees must re-pay the overage, though
other than a series of letters demanding
payment, the agency has not been
overly aggressive in pursuing the matter
while awaiting final legal decisions,
said Don Loving, public affairs director
of Oregon AFSCME Council 75.
In the Arken case, the PERS Coali-
tion — a group of unions that repre-
sents public employees — takes the po-
sition that the window retirees are
entitled to keep the original allocation
because, in essence, the 2003 Legisla-
ture said they could. In Robinson, the
argument is that the Legislature limited
the ability of PERS to recover from
these retirees and that what PERS has
done is inconsistent with these restric-
tions.
Only five of the Supreme Court’s
seven justices were on hand to hear the
two cases: Chief Justice Paul De Muniz
and Justices Thomas Balmer, Robert
Durham, Rives Kistler and Virginia
Linder. Justice Martha Lee Walters was
absent; she gave no explanation for her
whereabouts but said she would be
weighing in on the decision. The other
absent justice was Jack Landau, who
was sworn into office on Jan. 5. Landau
recused himself because his son is an
attorney with the Eugene law firm that
is leading the other side, Loving said.
Arken was the first case on the
docket. Longtime PERS Coalition at-
torney Greg Hartman told the court that
throughout the 2003 reform legislation
debate in Salem, the “core principle”
that lawmakers operated under was that
no person who had already retired
should lose any benefits. Noting that
Lipscomb’s decision on the 20 percent
vs. 11.33 percent account crediting had
not been finalized by higher courts yet
when the Legislature took action in
2003, lawmakers in effect let stand the
20 percent and intended that to be the
baseline for the window retirees.
“The record clearly indicates that
the Legislature was upset with PERS
and the PERS Board, and in essence
they said they were not going to wait
for all of the litigation to settle out, that
this is what we’ll do,” said Hartman.
“Both the legislative record and your
court’s decision in the Strunk case
make clear that 20 percent was the
amount for the window retirees.”
Opposition attorney Bill Gary argued
NORTHWEST LABOR PRESS
that the Legislature’s intent was to
codify 11.33 percent as the proper
number; during rebuttal Hartman reit-
erated that could not be the case be-
cause the litigation surrounding the 20
percent vs. 11.33 percent debate, City
of Eugene, had not been concluded at
the time.
Robinson is not a PERS Coalition
case proper, but is closely related. In a
nutshell, Robinson ignores the argu-
ment regarding 20 percent vs. 11.33
percent and focuses on PERS’ ability
to reach into retirees’ accounts and take
money back. Opposition attorney Jim
Malkin argued that if Tier 1 retirees
(and virtually all of the window retirees
are Tier 1) were held harmless for the
overpayments, Tier 2 retirees were im-
properly hit by having to pay back the
money indirectly by virtue of PERS
making up the difference through “ad-
ministrative expenses” — money that
otherwise could be credited to member
accounts.
“It’s a classic case of robbing Peter
to pay Paul,” said Malkin.
Jim Coon, lead attorney for the
Robinson case, countered that the Leg-
islature understood what it was doing.
“They faced a difficult choice,” said
Coon. “The money had to come from
somewhere, and the Legislature chose
to hold harmless those already retired.
Remember, this was 2003 — some of
them had been retired three years al-
ready, decisions based on the ‘promise’
made to them by PERS when they left
their jobs.”
Decision in either case are not ex-
pected to be rendered until the end of
the year, at the earliest.
JANUARY 21, 2011