NORTHWEST
Saturday, May 30, 2015
East Oregonian
Page 9A
Treasurer: Pensions costs
to raise due to inaction
By JONATHAN J.
COOPER
Associated Press
Gordon King/Yakima Herald-Republic via AP, File
In this 2014 file photo, Alfonso Martin helps pack apples for export at Valicoff Fruit in
Wapato, Wash.
Washington farmers are
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SPOKANE,
Wash.
(AP).— A record crop of
apples, coupled with the West
Coast port slowdown earlier
this year, is taking a toll on
Washington apple growers.
Nearly $100 million worth
of apples that cannot be sold
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across central Washington,
the nation’s most productive
apple region. The apples are
being left to rot and compost
in the hot sun, an unusual
occurrence for an industry
that has found ways to market
ever-growing crops.
“If we wouldn’t have
had the port slowdown, we
wouldn’t have needed this,”
Todd Fryhover, president
of the Washington Apple
Commission in Wenatchee,
said of the dumping.
He estimated that apple
exporters lost at least three
weeks of their season because
of labor problems at West
Coast ports. Along with a
record supply of apples, that
created surpluses that could
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to markets or processors,
Fryhover said.
BRIEFLY
Few Oregon
community college
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PORTLAND, (AP) —
Only 24 percent of Oregon
community college students
reviewed in a state audit
earned an associate degree
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years.
The Oregonian reports
that the audit, released
Wednesday, found even
lower completion rates
for most students of color,
with 15 percent of black
students, 16 percent of
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of multi-racial students, 21
percent of Hispanics and 22
percent of Native Americans
receiving degrees.
The Legislature has
adopted a so-called 40/40/20
goal, meaning that 40
percent of adults would have
at least a bachelor’s degree
by 2025. Another 40 percent
would have at least an
associate or technical degree,
and 20 percent would have
a high school diploma or
equivalent. The audit didn’t
break out completion rates
for individual community
colleges.
OSU-Cascades
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campus plan
BEND (AP) — Oregon
State University-Cascades
has discovered it will take
millions of dollars to make
the 46-acre pumice mine on
Bend’s west side suitable
land for a college campus.
The Bend Bulletin reports
the costs to compact soil,
reduce the slope of the
mine’s wall and haul in extra
soil has been estimated at
$6.5 million to $7.5 million.
A representative from the
university says the decision
on whether the costs are too
high will be made by OSU.
Mike Walker graduated
with an engineering degree
from OSU and has lobbied
against the OSU-Cascades’
development plans. He says
costs will be closer to $10
million.
“It is unusual,” Fryhover
said.
The Washington State Tree
Fruit Association estimated
$95 million in lost sales
because of apples that could
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considers low.
Washington is by far the
nation’s largest producer of
apples, a crop worth about
$2 billion a year to the state’s
farmers. The 2014 crop totaled
a record 150 million boxes,
which weigh about 40 pounds
each. About a third of the
apples each year are exported
to more than 60 countries.
The labor dispute that
hobbled international trade
through West Coast seaports
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cially end until last week,
when the union representing
dockworkers announced its
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year contract. Union leaders
had reached a tentative deal in
February with the companies
that own massive oceangoing
ships that bring cargo to and
from ports and operate the
terminals where that cargo is
loaded and unloaded.
Ports from San Diego to
Seattle were all but shut down
several months ago as the two
sides haggled. Companies
that accused workers of coor-
dinated slowdowns decided
to cut their shifts, shuttering
ports on nights and weekends.
The tit-for-tat led to long
lines of ships queueing outside
of harbors, waiting for space
at the docks.
Meanwhile, U.S. exporters
complained that their goods
— including apples — were
stuck on the docks as foreign
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should be theirs.
The ports dispute created
numerous
problems
for
farmers. A big issue is that
apples loaded into unrefriger-
ated containers sat on docks
for weeks waiting to be loaded
on a ship, Fryhover said.
The record crop also
created a shortage of refrig-
erated storage space for the
apples, which normally can
be stored for months and sold
year round.
The result is lots of apples
became too ripe even to be
diverted to juice.
TIGARD — School
districts
and
local
governments will have to
pay more for employee
pensions because legisla-
tive leaders are blocking
a bill to restructure the
management of Oregon’s
investments, state Trea-
surer Ted Wheeler said
Friday.
Wheeler has tried
unsuccessfully
for
three years to convince
lawmakers that his agency
needs more independence
from the Legislature to hire
staff and make decisions
about investments.
He says the current
governance structure is too
risky, and without more
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managers will be forced to
back away from Oregon’s
heavy exposure to private
equity investments. Such
a move would lower long-
term investment returns
in Oregon’s $70 billion
pension fund — money
that would have to be made
up with higher contribu-
tions from taxpayers.
Wheeler, an elected
Democrat,
gave
his
warning in a joint meeting
of the Public Employees
Retirement System (PERS)
Board and the Oregon
Investment Council, which
makes decisions on invest-
ment policy.
“The reality is ...
more resources have to
be squeezed out of our
public education system
and our municipal and
county budgets,” Wheeler
said. “Here we have an
opportunity to do some-
thing different, and the
Legislature has chosen to
squander it.”
State and local govern-
ments are already looking
at a steep hike in their
retirement costs after
a state Supreme Court
“The Legislature has ...
squandered (the opportunity).”
— Ted Wheeler, Oregon Treasurer
decision in April that over-
turned the bulk of Public
Employees
Retirement
System cuts that the Legis-
lature approved in 2013.
In a separate presentation
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consultants said that the
court decision will raise
pension liabilities by $5
billion. The court’s deci-
sion allowed about $1.3
billion worth of cuts to be
preserved, the consultants
said.
As a result of the court
decision, the PERS experts
expect that government
employers will see their
collective pension contri-
butions rise $690 million
in the 2017-2019 budget
cycle. On average, the cost
will jump from an average
of 18.2 percent of payroll
to 21.2 percent, with more
increases to come down the
road.
The increases will be
especially harsh for school
districts. Compared with
state and local govern-
ments, school districts have
higher accrued retirement
costs relative to the number
of active employees.
Wheeler has pitched
his “Investment Modern-
ization Act” as a necessary
step to avoid digging an
even deeper hole. He says
his agency spends too much
on Wall Street investment
managers because he lacks
authority to hire staffers
to do it. Money spent on
managers can’t be invested
for growth.
He also says consultants
have advised that Oregon
can’t properly manage
the risk associated with
complex investments if
its budget and hiring are
subject to the whims of
legislators.
Senate
President
Peter Courtney, a Salem
Democrat who opposes
Wheeler’s initiative, said
he’s “not trying to stand in
anybody’s way,” but he’s
reluctant to cede legislative
oversight, particularly after
he did so for Cover Oregon
before it failed to launch a
health insurance website.
Executive
branch
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they don’t have enough
autonomy, Courtney said.
He has worked to get
Wheeler more spending
authority, he said, and
the next treasury budget
will allow for 24 more
employees. The treasury’s
budget
comes
from
investment earnings, not
the general fund, but the
Legislature imposes a
spending and hiring limit.
“Like it or not, the
legislative
branch
of
government does exist in
the Oregon Constitution,”
Courtney said in an inter-
view. “I cannot just cut us
loose from some kind of
very serious oversight role
in this.”
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pension fund is in private
equity investments, which
presents the opportunity
for both high risks and high
rewards. John Skjervem,
the state’s chief investment
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Investment Council will
meet next week to consider
pulling about 2.5 percent
of the pension fund out of
private equity in favor of
less risky — but also less
lucrative — investments
because of the Legisla-
ture’s inaction.
“If we don’t get the
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organization as it needs to
be staffed, we will need to
put limits on what we do,”
Skjervem said.