BEO Bancorp reports third
quarter earnings
HEPPNER
G T
50¢
azette
imes
VOL. 138
NO. 43 8 Pages
Wednesday, October 23, 2019
Morrow County, Heppner, Oregon
BEO Bancorp and its
subsidiary, Bank of Eastern
Oregon, announced third
quarter 2019 consolidated
net income of $1,229,000 or
$1.04 per share compared
to $1,196,000 or $1.01 per
share for third quarter 2018.
Year to date earnings were
$2,973,000 up 5.2 percent
year over year. Total assets
were up 20.4 percent year
over year at $483.3 million.
Net loans of $401.5 mil-
lion were up 24.0 percent
from the same period in
2018, while deposits were
at $432.6 million, also up
21.6 percent year over year.
“The expansion proj-
ects announced earlier in
the year are translating into
significant growth in depos-
its, loans and assets. The
expansion has resulted in
additional overhead costs,
but these costs are now
translating into increased
revenue. Earnings for the
quarter are up 2.76 percent
year over year. Year to date
results show a 5.2 percent
increase from 2018,” said
President and CEO Jeff
Bailey.
Chief Financial Officer
Mark Lemmon said, “Our
shareholder equity is up
9.0 percent year over year,
while our book value per
share is up 9.3 percent.
Return on Average Assets
for the quarter was 1.03 per-
cent and Return on Average
Equity was 13.28 percent
compared to 1.19 percent
and 14.12 percent respec-
tively year over year”.
Chief Operations Of-
ficer Gary Propheter said,
“We have had tremendous
reception from our new
communities in southeast
Washington and the ex-
panded locations in Herm-
iston, La Grande and Pend-
leton have also exceeded
our expectations. We look
-See BEOBANK/PAGE
FOUR
HHS Booster Club hosts annual dinner and auction
The Heppner High School Booster Club annual dinner and auction packed ‘em in for a steak dinner and auction Saturday night at the Elks Club in Heppner. The evening included a general
raffle with over 80 items, card games, a silent auction and a live auction with over 30 items. Auctioneer was Ken Grieb and Dale Bates provided sound. Numerous individuals and organiza-
tions contributed through cash donations. Pictured upper left: Waylon Sykes helps himself to grandpa, David Sykes’, steak.
County retirement fund has $10.3 million shortfall
‘What we have now is just too generous and unsustainable’
By David Sykes
The Morrow County
retirement fund is short 10.3
million dollars and it must
be dealt with to meet cur-
rent and future obligations,
says County Commissioner
Don Russell. He spoke with
the Gazette-Times recently
on how the county got into
this fix, and how it might
get out of it.
Years ago the county
set up a retirement plan sep-
arate but similar to the state
of Oregon’s then PERS 1
retirement system. The plan
is called a defined benefit
as it guarantees retirees a
certain monthly payment
amount when they retire.
The state has since moved
away from the defined ben-
efit system because it is un-
sustainable. Commissioner
Russell says the county’s
“very generous” retirement
system has created a $10.3
million unfunded liability
in the retirement fund. It’s
time to do something about
it. The unfunded liability is
the amount of money the
county currently owes to
those already retired and
currently employed with
the county who will some-
day retire. “These are con-
tracts we have with those
people and they cannot be
broken,” Russell pointed
out.
Russell, who graduat-
ed from OSU with an ac-
counting degree and passed
the Certified Public Ac-
countant exam, says instead
of guaranteeing a monthly
amount upon retirement,
the county should move to
a defined contribution plan.
Under defined contribution
the county would guarantee
a certain amount of money
to be contributed each pay-
day into the employee’s
retirement account, and the
payment upon retirement
would depend on how well
the invested funds perform.
“It’s what most private em-
ployers are doing,” Russell
says, and it would be like
the familiar 401K plans
many people now have. The
risk would be shifted to the
employee and the amount
of money available at re-
tirement would depend on
how well the investments
do. “We have to do some-
thing,” Russell says. “What
we have now is just too gen-
erous and it’s unsustainable.
We just can’t keep paying
this,” he emphasized.
Under the current plan,
each employee contributes
six percent of their pay-
check into the retirement
fund and the county match-
es that with a 24.8 percent
contribution for a total of
30.8 percent. As an exam-
ple, Russell says that if a
person works for the county
for 30 years they could
retire with payments of 72
percent of their average
wage near the end of their
employment. He says this,
coupled with social security
payments, in some cases
provides a retiree with more
income than when they
worked. As an example of
other plans, Russell says
an employee at the Port of
Morrow puts in six percent
Columbia Basin to hold 75th
annual meeting
Columbia Basin Elec-
tric Cooperative (CBEC)
will hold its 75 th annual
meeting, October 31 at
St. Patrick’s Parish Hall
in Heppner. Check-in will
begin at 11:15 a.m. with
lunch being served at noon.
According to the press
release, this year’s meeting
will be extra special as
CBEC will be celebrating
75 years of existence. The
St. Patrick’s Alter Society
will be serving pork loin,
mashed potatoes with gra-
vy, Caesar salad, hot rolls
and a pumpkin dessert.
Extra door prizes will be
awarded this year, as well as
a copy of Columbia Basin’s
history book given to each
household in attendance.
“We are really proud
of the recently complet-
ed Columbia Basin Elec-
tric’s book Serving Family,
Friends, and Neighbors
since 1944,” said CEO/
General Manager Thomas
Wolff. “Debbie Lankford
championed this project for
our co-op and has done a
tremendous job. The book
chronicles CBEC’s devel-
opment and progress over
the past 75 years, with
many photos and anecdotal
comments from our early
and current members,” he
continued.
The press release also
stated it is Columbia Ba-
sin’s intention to keep all
of its members up to date
on the welfare of their co-
-See CBEC MEETING/PAGE
FOUR
of their paycheck to the re-
tirement fund, with the Port
then matching an additional
nine percent. And it is a
defined contribution plan.
Currently county em-
ployees and elected offi-
cials are “vested” or includ-
ed in the county retirement
plan after five years of
employment. Russell says
the current defined benefit
plan is not transferable,
so if someone is no longer
employed after five years,
although they would still
receive a payment on retire-
ment, they cannot take their
plan with them to their new
job. Under a defined contri-
bution plan the employee
would be able to take their
retirement fund with them
to the new job.
Investment of the
current retirement fund
is handled by a private
professional investment
company. The money is
invested in the stock mar-
ket and Russell says the
fund is currently drawing
around 6.5 percent return
on investment. However,
Commissioner Don Russell
it has not always been so
good, which is part of the
reason the fund is so far in
the hole, he points out. For
instance, during the eight
years of the Obama admin-
istration he says the return
was low and the retirement
fund went into the negative.
Russell says with a 6.5 per-
cent return on investments
the deficiency could be paid
down by 2039. However, if
the return drops to 5.5 per-
cent, for instance, the fund
will never pay down, and if
it were to go to 5 percent it
would be in a negative and
the deficiency would begin
growing even larger.
Russell says although
all the current employees
are covered under the de-
fined benefit plan, negoti-
ations with the two unions
in the county for a change
in the retirement benefits
for new hires could begin
soon. He says even though
the employment contract
with the Teamsters, who
represent the Sheriff’s Of-
fice, is a three-year agree-
ment, there is a clause in
the contract which allows
renegotiation of retirement
benefits on an off year.
The same with the Public
Employees union which
covers the other county
employees. Also related to
retirement benefits state law
stipulates that public safety
employees such as the Sher-
iff’s office can only have a
retirement plan that is equal
to or better than the current
state retirement plan.
Russell says he hopes
to have a new defined con-
tribution plan for new em-
ployees in place by July 1
of 2020, which would stem
the current increases in the
unfunded liability of the re-
tirement fund. Then he says
they must just deal with the
ten million still unfunded,
left over from past year’s
deficits.
MORROW COUNTY GRAIN GROWERS
350 MAIN ST
LEXINGTON, OR 97839, CONTACT: JUSTIN BAILEY
541-989-8221
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