Friday, February 26, 2010

Retirement Bills in Retrospect

The Utah Public Employees' Association is proud that its members and supporters have fought hard for the retirement system. UPEA members have had the courage and conviction to stand up for a system that has served them well. Our members have stood up for employees who will guide UPEA and public service for generations.

Although UPEA does not support 2nd Sub SB 43 and 3rd Sub SB 63, we support the amendments and truly appreciate the hard work that has gone into the bills. UPEA would like to thank Senator Daniel Liljenquist and Representative Brad Dee for facilitating negotiations.

In our gratitude, UPEA would especially like to thank Representatives Jim Dunnigan, Wayne Harper, Ronda Menlove, Stephen Sandstrom and Mel Brown for their exceptional commitment to protecting the retirement system. The Senate and House Democrats have also been strong supporters for public employees.

3rd Sub SB 63 Vote

Yes 46

No 26

Abs 3

Third Substitute SB 63

The House voted to substitute Second Substitute SB 63 with a 3rd substitute. Third substitute SB 63 includes all of the amendments mentioned in the previous post.

Prior to the final vote several legislators commented on this bill.

Rep. Dee said 3rd Sub. SB 63 may not be a perfect vehicle for fixing the retirement system. However, Utah can't delay a year because it will result in waiting two or more years at a severe cost to the state. He added that the new bill would be studied very closely; however, the state needs to stop the bleeding, and then run the actuarial study this year.

Dee said, "If changes need to be made, let's man up. 18% of private industry have retirement. They are all moving to a 401(K) SYSTEM. Everyone of these plans is in trouble. Fewer than 1/2 are actually receiving the benefits that they were promised. Utah is in the cutting edge. We fix it now, because we know that we've made a promise to the employees in the system. Protect my retirement system. That is what I am doing. We are keeping the promises to those that we have hired. "

House Democrats continued to support employees' concerns that the state is moving too fast on this decision. Rep. Phil Riesen, D-Salt Lake City added that the crisis behind these bills may contain rhetoric.

Rep. Litvak said that, although the process has been open and fair, perhaps the body is not able to address the full compensation package before making changes to the retirement system. Litvak said he couldn't support the bill because the legislature needs to address the entire compensation package at one time.

Representative Brown admitted that the state is in serious economic times. He said that the bill is written for both good times and bad times. In bad times, the risk is shifted to the employee. However, in good times, the bill adds compensation. He said the bill will be a really good benefit for employees.

Representative John Dougall, R-Highland, said that retirement is sacred, but the world is changing. The commitments that are being made, he said, need to change going forward.

Ben Ferry, R-Corrine, called previous question, which ended debate.

Dee extended his appreciation to employee groups who have made the legislative body think about the changes they are making. Dee added that the state has much more work to do regarding employee compensation.

"Let's make this whole and start to work on the other issues," Dee said.

Second Substitute SB 63

House sponsor, Representative Brad Dee, testified that pension systems must be funded at 100%. He said that Utah's pension was doing fine until 2008. If the pension continues on this path, he said Utah's pension will become completely unfunded.

"Is that the message that you want to send employees today?" Dee asked.

Representative Jim Dunnigan, R-Taylorsville moved Amendment 10. The amendment allows a public safety employee to buy out up to 5 years early. Public safety does not have this option in the current retirement system.

Dee accepted the amendment as friendly and added that legislators worked late into last night to design these compromises. The motion passed.

Dunnigan added Amendment 9, which address concerns that employees won't have enough retirement benefits to survive upon retiring. Dunnigan moved to provide an additional 25% in retirement benefits.

Dee said that this was a good compromise for employees, understanding that the state will, "Increase payment on our house just a few more years."

Representative Eric Hutchings, R-Kearns lauded Dunnigan for his work on the bill.

Dunnigan's motion to amend passed.

Representative Harper moved Amendment 6, which takes the multiplier for each year of service from 1% to 1.5%. Dee accepted this amendment. Harper clarified that this multiplier only applies to new-hires hired after July 1, 2011. The amendment passed.

Representative Stephen Sandstrom, R-Orem, moved Amendment 8, which allows employee who didn't vest with the retirement system to come back within 10 years (instead of 5) to vest with the state. The amendment also allows plan members to contribute to another 401(k) plan of the member's choice.

Dee said, "I have more friends than I ever realized. This is a friendly amendment too."

The motion to amend passed.

Representative Carl Wimmer, R-Herriman, moved Amendment 11. The amendment extended the election of the spousal death benefit. UPEA will update members when we learn more about this amendment. The amendment passed.

Representative Ronda Menlove, R-Garland, moved Amendment 12. This amendment requires yearly reports and a study of the retirement system after the system is 100% restored. This amendment allows an ongoing dialog about the retirement system. Dee supported the motion to amend.

The motion passed.

As of this writing, the bill has been circled to clean up the bill and add the amendments.

3rd Sub SB 43 Vote

YES 55
NO 20

Passing in the House and will be sent to the Senate.

3rd Sub SB 43

House sponsor, Brad Dee, presented the 3rd Sub SB43 amended as follows:

  • Employees may collect pension while re-hired with a public entity AFTER a 1 year "hard separation." Employees must elect, at the time of rehire, whether they would like additional service credit OR to collect their pension while employed.

Representative David Litvak, D-Salt Lake City, asked about the 1 year cooling off period for employees who change careers after retiring and rehiring for a public entity. Dee clarified that employees must have a year-long separation.

Litvak added that SB 43 in its original form raised considerable concerns. However, the substituted bill, Litvak said, is an improvement to the current system. The amended bill still creates two classes of retired-rehired employees, but Litvak felt the legislation could be tweaked over the next year.

Representative, Sheryl Allen, a long-time employee advocate, proposed an amendment to allow employees who rehire on a half-time basis to collect their retirement within that one-year period. The motion to amend was opposed by the sponsor, Dee, who said it would maintain the status quo. Dougall and Ipson also opposed the bill. The amendment failed.

As of this writing, no votes have been cast.

10:30 Time Certain for Retirement Bills

Third Substitute Senate Bill 43 (Post-Retirement Employment Amendments), and Second Substitute Senate Bill 63 (New Public Employee Tier II Contributory Retirement Act) will be debated by the House today at 10:30 a.m. UPEA is bracing for the debate and anticipating amendments to the bill. We will update the Blog as things happen.

Wednesday, February 24, 2010

House Retirement and Independent Entities Committee

This afternoon the House Retirement and Independent Entities Committee met to hear and discuss SB Second Substitute 43 and SB Second Substitute 63.

Before the discussion began, Rep. Sandstrom motioned to adopt Third Substitute SB 43. The new substitute bill requires that a retired employee take one year off public employment before rehiring on with a public entity. After such year, if the employee rehires he/she has the option of either suspending his/her pension and accruing additional service credit or the employee can continue to receive their pension and new salary. In addition, the employer would have to pay the amortization rate that currently goes into employees' 401k to the retirement system (for instance, 14.22% in the big system).

After Sen. Liljenquist explained both bills, many of the Committee members had questions. Rep. Duckworth asked if he thought there would be a mass of retirements because of fear, even though both bills don't affect current employees' pension. Liljenquist responded saying, "I would hope not...there is some risk with SB 43...but we have to start somewhere." Rep. Hansen asked Liljenquist if these two bills will remedy the $6.5 Billion losses experienced in 2008. Liljenquist responded "no these bills will not remedy the gap now, they will overtime." Rep. Christine Watkins asked if employees would still be allowed to purchase up to five years of service credit in the new system. Liljenquist said yes, after 30 years of service in the new system. Rep. Watkins also questioned if by dropping the multiplier to from 2% to 1%, would the legislature create a whole new class of poor people?

In addition to the Committee member's questions, members of the public asked how such a complex issue could continue being amended and substituted throughout the session, even only an hour prior to the committee meeting.

Sheri Waters spoke on behalf of UPEA reemphasizing and stating, "there are many positive spin offs of a solid pension program that go beyond recruitment and retention of competent and qualified employees and educators. Utah is a great state because it has a great foundation. Even pension dollars sent to Utah recipients are largely spent helping Utah's economy. UPEA appreciates Sen. Liljenquist's ideas and his attempts to maintain a pension program, along with his desire to hold [current] public employees harmless for the market downturn. While we are not happy with the momentum these retirement bills have taken, we are respectful of the process and we continue to communicate our hope for the future. We do agree there are areas that should be tweaked. UPEA's one request is simply to hold back the tides of change for a year and allow the independent actuaries to review the data before drastic changes are made to the Utah Retirement System. The argument continues to be made that there will be time to make additional changes once the actuarial review has been completed, however we are all keenly aware of the time and effort that is involved in adjusting a bill once it has been signed into law. It seems to me that we are trying to dig a foundation for a house without doing the Blue Stakes check first. With the projected agency budgets as they are, it is anticipated that there will be very few new hires that will occur this year or the next. So the costs savings of a new plan for prospective employees may not be realized for many years. There are some who are advocating that the urgency to follow through with these change right now it critical. Our plea continues to be, please hold off on overhauling the retirement system until the independent study is finalized."

Before the vote Rep. Harper noted how he's made commitments not to harm current retirees and members of the system. He continued to say, "I like parts and I dislike parts of it...something needs to be done. Is this the right way? I have serious concerns with it...There are some amendments still being drafted that may make this viable, I still have some angst with this bill...unfortunately I think it needs to go to the House floor for debate."

Senate Bills 43 Third Substitute and 63 Second Substitute passed through the House Retirement and Independent Entities committee this afternoon, with a party line vote. Due to the committee recommending both bills move forward, our last hope is with the full House of Representatives. UPEA encourages all of our members to take action and contact their legislators as soon as possible to request they delay the passage of any retirement bills until further study is completed. If you need assistance in finding out who your legislator is, please visit or call 801-264-8732.

Monday, February 22, 2010

HB140 Human Resource Management Amendments

The House Government Operations and Political Subdivisions Subcommittee convened to discuss bills, including House Bill 140, Human Resource Management Amendments.

UPEA has been negotiating with the bill’s sponsor, Rep. Brad Dee, R-Ogden, and DHRM to find an equitable middle ground between management and employees.

During testimony, Dee said, “Out of all the labor groups, UPEA has been very helpful. They’ve negotiated very hard.” Dee promised to continue negotiations with UPEA.

Initially, the bill struck a number of employer actions that employees could grieve. UPEA has made headway to include issues of personnel rules and equitable administration of benefits. We are working on issues concerning written reprimands, salary and wages.

HB 140 passed the committee 6 – 3. UPEA will update members as the bill progresses.

Retirement Update

Friday February 19, 2010 – the Senate Floor heard SB Substitute 43 and SB Second Substitute 63. These two retirement bills passed through the Senate Floor and were sent to the House Floor for future debate.

SB Substitute 43 passed with a vote of 20 Yes, 8 No and 1 absent. A link to the latest version of the bill is This bill would affect reemployed retirees.

SB Second Substitute SB 63 passed with a vote of 19 yes, 9 no and 1 absent. The second substitute created two separate new retirement systems for new hires, hired after 7/1/2011. Originally there would have been only one retirement system for all public employees throughout the state. Now the bill would create a public safety / firefighter retirement system and a public employee retirement system. A link to the latest version of the bill is This bill would affect all new employees hired after 7/1/2011.

SB 94 was circled and remains on the Senate 3rd Reading Calendar behind 4 other bills. A link to the latest version of the bill is This bill would affect all current employees hired after 7/1/1986, by eliminating the 1.5% state contribution in employees’ 401k.

Thursday, February 18, 2010

Senate Bill 94 Passes

This bill would suspend the 1.5% defined contribution benefit for state employees hired after 1986. Senator Gene Davis cast a notable no-vote and added, "I am voting no for this because it shows how easy it is to cut a defined contribution benefit."

This bill, along with SB43 and 63 will move on to the House after a final vote in the Senate.

Landmark Pension Reform Moves to House After Final Senate Vote

Y 20

N 8

A 1

The Gamble

Senator Brent Goodfellow, speaking in opposition to SB63(New Employee Tier II contributory Retirement Act), raised concerns about passing a bill and then making changes in the future. He noted that future changes would undoubtedly contain fiscal notes that, based on state revenues, may prevent beneficial changes to the new retirement plan.

Senators Lyle Hillyard and Howard Stephenson, who spoke in favor of SB 63, noted that the pension system is a gamble for taxpayers. Senators grappled with the degree to which the pension is a risk. On one hand, Senator Liljenquist said that the current pension system is the one thing that can bankrupt this state.

Senator Jon Greiner pointed out that the state has returned a 9% on its pension investment up until 2008. SB 63 assumes a worse-case-scenario that is unlikely based on past trends.

As of this writing, no votes have been cast. Update pending.

SB 43 Vote

Passed on party lines plus one nay vote from Republic Senator, Jon Greiner.

Ant vs. Grasshopper and SB 43

A Republican public employee, Senator Jon Greiner, has testified on SB43 (Post Retirement Employment Amendments) during today's Senate Floor time. Greiner invoked the fable of the ants and the grasshopper. He labeled the employees the ants and the nation's financial institutions the locust. His allegory suggested that public employees are shouldering the burden of irresponsible institutions.

Additionally, Greiner asked the bill's sponsor, Dan Liljenquist, whether or not the bill would favor non-state employees who hire with the state after retirement.

Liljenquist conceded that out of state new-hires and new-hires entering public employment from the private sector would not be impacted by current legislation. It would follow, then, that public employees who retire would have a disadvantage in pay over non-public employees who become re-employed with the state.
Greiner asked, "Why would we send this through without putting it to a task force?"
As of this writing, no votes have been cast on SB43. Update coming soon.

Keep the Message Alive!

I know that the rally is over and that the three bills we rallied against passed committee on a partisan line vote, but the fight is not over. Today, the three bills (SB43, SB63, SB 94) are going to be heard on the Senate Floor at around 3:00 p.m. If you would like to listen to the debate, go to: and find the Live Audio link under "What's Happening."

If the bills pass the Senate, they will move into the House. If you haven't talked with your State Representative, now would be a good time. Visit to find your legislator.

If you would like to see a complete list of the bills that UPEA is tracking, log in to If you have questions about any of the bills UPEA tracks, please call 801-264-8732.

If you would like to schedule an Employee Representative to visit your worksite, we would really like that. Call 801-264-8732. We'll update soon!

Wednesday, February 17, 2010

Retirement Update

Last Friday 2/12/2010, the Retirement and Independent Entities Committee met again. From 12-3pm committee members listened to public comments not heard last Wednesday, and voted on each of the bills: SB 43 (reduces benefits for rehired retirees), SB 63 (reduces retirement benefits in half for new hires as of 7/1/2011), and SB 94 (eliminates the 1.5% contribution to current employees’ 401k). Each bill passed through the committee with a 3-2 vote, with Sen. Liljenquist, Sen. Bramble, and Sen. Butters voting for each bill, and Sen. Goodfellow and Sen. Mayne voting against each bill. Now SB 43, SB 63, and SB 94 go to the Senate floor for discussion. The bills are currently on the Senate Time Certain – 2nd Reading Calendar. It is expected that the Senate floor will hear the bills tomorrow – Thursday 2/18/2010.

To clarify, Sen. Liljenquist’s SB 42 – Retirement Eligibility Modifications – is being held in Rules. Sen. Liljenquist has committed he is not pushing SB 42 and it will remain in Rules and die there. SB 42 would have increased the Public Employees Retirement System from a 30 year system to a 35 year system, and the Public Safety Retirement System from a 20 year system to a 25 year system over the next five years. This would have affected both current and future employees.

However, Sen. Liljenquist has pulled this bill because of UPEA’s efforts and members contacting him and their individual legislators.

Wednesday, February 10, 2010

Retirement and Independent Entities Committee

Opposing sides gave little ground during today's Senate Retirement and Independent Entities Committee meeting at the capitol. Utah Public Employees' Association has made their arguments clear through Saturday's rally and a year's worth of work leading up to today.

There wasn't much left for Liljenquist's presentation except to rehash his proposals and the dire circumstances behind his proposals. UPEAadded voices to the economic impacts families face in light of retirement changes. Sheri Watters testified that her family has a long history of public service and that the retirement system has served their family fairly.

Senator Brent Goodfellow raised questions about Utah's current retirement system. He addressed the scope of SB 63 in light of an improving economy and improving stock market.

Goodfellow said, "Yes we have problems, but they're not the same problems we had when the DOW was at 6500."

SB 63 assumes the worst case scenario for our retirement system over the long run.

Liljenquist added that employees will defer compensation increases well into the future because of the retirement downturn. However, he did not say how any savings in the retirement system will go toward compensation.

Under the pro temp chairmanship of Senator Bramble, the committee opted to continue hearing testimony on Friday, at noon, before taking action on the three senate bills.

UPEA will update you soon!

Retirement Press Conference

Sen. Liljenquist held a press conference Tuesday 2/9/2010 “designed to shed light on the retirement system” and his three retirement bills. He explained how the losses URS experienced in 2008 has “created a massive problem for URS.” He continued to note how “there is not an option to do nothing. Doing nothing just exacerbates the problem.”

UPEA has never supported not doing anything. UPEA supports the Governor’s budget which funds the 2.1 contribution rate increase. UPEA has met with numerous individuals who have repeatedly noted that if the contribution rate increase is funded, URS will not go bankrupt, but remain fiscally sound. UPEA continues to push for an independent taskforce to study the retirement issue over the next year before legislation to change the system for both current and new employees goes into effect.

Update on HB 140

UPEA staff met with DHRM about HB 140 yesterday (2/9/10). In the meeting, DHRM explained that the intent for changing the pay system was to try to encourage more merit pay increases by removing the steps from the pay plan. If only 1% is available, the legislature could grant a 1% merit step increase rather than being limited to 2.75%. UPEA is in the process of researching the plan, and will be meeting with DHRM again next week to discuss UPEA’s viewpoint on this plan.

The changes to the grievance process as explained were due to conflicts that have been found with the Attorney General’s Office and costs associated with the grievances handled at the Career Service Review Board.

UPEA has scheduled a meeting for Thursday (2/11/10) with the sponsor of the bill, Representative Brad Dee.

Tuesday, February 9, 2010

HB 140

Late Friday evening a new bill became publicly available that deals with State Employees. HB 140, Human Resource Management Amendments, was introduced to the House on 2/8/10. It has been sent to the Rules Committee for assignment.

HB 140 is something high on UPEA’s radar, because it deals with several public employee issues, including:

· Taking the merit steps out of the pay scale

· Changing the language related to the post-retirement sick leave benefit

· Changing the grievance process

· Changing the grievable actions that may be taken to the Career Service Review Office

On 2/8/10, UPEA met with legal counsel to ensure that staff understood what was being presented. UPEA staff also has a meeting scheduled with the Department of Human Resource Management on 2/9/10 to discuss the intent behind the proposed changes.

UPEA will continue to update members as to what is happening with HB 140 as more information becomes available.

Thursday, February 4, 2010

Executive Offices & Criminal Justice

Executive Offices & Criminal Justice 2/3/10

The committee heard from County Sheriffs, the Board of Pardons, and Department of Corrections. The fiscal analyst went over the budget brief on each department.

Tom Patterson, the Executive Director of the Department of Corrections, presented on the budget of DOC. Some of the items that were discussed to address the 5% total budget reduction were to close the Parole Violator Center which would save $7.6 Million, eliminate meals for Correctional Officers which would save $400,000, and close two prison housing units which would save $3.8 Million.

Corrections discussed the risks involved with closing Special Services Dorm and OQuirrh 5 housing unit. If these two pods were to close the Utah Prison would be over maximum capacity by 215 beds. This would mean releasing 215 inmates early, and the prison would still be at maximum capacity. Tom discussed the risks involved to staff and also to the public with releasing inmates early and also operating a prison that is over crowded.

Retirement and Independent Entities Committee

The House Retirement and Independent Entities Committee met today and passed three bills through the committee with a favorable recommendation. The bills are H.B. 215 Amendments to the Public Employees’ Benefit and Insurance Program Act – Risk Pools, H.B.233 Retirement Office Amendments, and H.B.83 Sub 1 Public Employees Retirement – Spousal Election.

H.B. 215 Amends the Public Employee’s Benefit and Insurance Program Act risk pools for full-time enrollees at an institution of higher education from full time equivalent enrollment of less than 18,000. Currently it is less than 12,000 full time equivalent students.

H.B. 233 modifies the Utah State Retirement and Insurance Benefit Act by amending provisions related to appointment of board members, purchase of service credit, disability benefits, and termination of employment on retirement date. This is URS annual “clean up” bill, which intends on clarifying the statue in Title 49 – or the Utah State Retirement and Insurance Benefit Act. UPEA was originally concerned with the original bill and talked to Dan Anderson, URS’ attorney about amending the bill. The bill was amended in committee today.

H.B. 83 Sub 1 requires the Utah State Retirement Office to provide written notice (within 30 days of a change and at least 60 days prior to retirement) to a retiree’s spouse of the retirement allowance option made by the retiree under the Public Employees’ Contributory or Noncontributory Act.

Health and Human Services Appropriations Committee

House Democratic Caucus 2/2/10

UPEA staff attended the House Democratic Caucus on 2/2/10, where the House Democratic Caucus discussed various items, including HB 1- Education funding, the Ethics legislation, and various housekeeping items.

Much conversation surrounded the ethics bills that have been presented thus far, including increased financial disclosure, lowering gift limits, and limiting on uses of campaign funds.

Health and Human Services Appropriations Subcommittee 2/1/10

In the Health and Human Services Appropriations Subcommittee held on 2/1/10, the committee discussed several issue and budget briefs that had to do with the Departments of Health and Human Services. These issue and budget briefs are linked below.

Department of Health
Epidemiology and Laboratory Services
Health - Federal funds
Health - Intent Language follow up from prior year.
Health - Executive Director Operations
Health Systems Improvement
Workforce Financial Assistance
Community and Family Health Services
Local Health Departments
Health Nonlapsing Balances
Social Services Related Revenue Options
Substance Abuse and Mental Health
Division of Aging

The Utah Association of Counties also spoke to the impacts of potential cuts to the Health and Human Services line items described above. They are very concerned about the trickle down effect that this may have on local health departments and governments.

Wednesday, February 3, 2010

Overview of Utah's Retirement System

On Tuesday 2/2/2010 UPEA staff attended the Office of Legislative Research and General Counsel’s (OLRGC) “Bagels and Briefings – Overview of Utah’s Retirement System.”

Policy Analyst Ben Christensen went over the history and membership of the retirement system. Currently there are 155,667 employees in the Public Employee Noncontributory Retirement System (or the Big System), of which 52% include public and higher education employees, 20% include state employees, 27% include counties and local districts. Christensen also discussed the retirement allowance formula of years of service multiplied by 2% and the average of an employee’s 3 highest salaries. Lastly Christensen noted how the financial losses of 2008 affected the retirement system as a whole.

Next fiscal analyst Danny Schofield noted how the URS Retirement Board asked for a 2.1% contribution rate increase for the public employees contributory and noncontributory systems. According to the URS Retirement Board, if the contribution rate increase is funded, the retirement system will remain actuarially sound. In addition, URS annually expects at least a 7.75% investment return. In 2009, URS received a 13% return on investments. Schofield also spoke about the $23 million PEHP increase for FY 2011.

Lastly Darin Underwood from the Auditor General’s Office discussed the Reemployed Retiree Audit, presented to the Audit Subcommittee and Retirement and Independent Entities Committee November 2009.

UPEA is at the forefront of the retirement discussion and will continue to present arguments and information on how URS is still the best funded retirement system in the country.

House Republican Caucus Lunch

House Republican Caucus 2/2/2010

Speaker Dave Clark spoke on his Health System Reform Amendments Bill (which is still being written). He noted that the bill intends to:

“Increase Transparency” –
· Instructs the Utah Insurance commissioner to develop a method so that health insurer’s claims can be compared.

“Equalizes the market” –
· Bill is going to optimize health insurance choice for Utah businesses and their employees.
· Equalizing the defined benefit and defined contribution, so each market does not skew the other market unfairly.

“Allows employers coverage flexibility” –
· Employers will be able to choose either defined benefit or defined contribution plans inside the Exchange.
· Within the Exchange there will be a premium aggregator with expanded employee choice.
· The defined benefit plans in the Exchange, will not be able outside the Exchange in the regular insurance market.

“Makes health care costs controllable and predictable for Utah businesses and gives employees expanded coverage option and more control over their health care dollars” –
Expands the defined contribution market and how both employers and employees can pay for their health insurance within the Exchange.

UPEA is tracking how Health Systems Reform is being brought about in the small employer market, as Speaker Clark’s vision includes expanding the Utah Health Exchange to the large employer market in 1-2 years.

Monday, February 1, 2010

Appropriation Reviews

Commerce and Workforce Services Appropriations Subcommittee 1/27/2010

Budget Presentation Utah State Office of Rehabilitation
· The agency is not requesting any money. Executive Appropriations has asked for a 4% ongoing reduction. USOR is funded by the Uniform School Fund and Federal Funds.
· The Center for Public Policy presented information on the economic impact of services provided by USOR. Every $1.00 USOR spends on providing services its citizen clients the state receives back $5.64 through income taxes.
· Those who acquire services through USOR get higher wages. Since September 30, 2009 USOR has helped 3,116 people find employment and stay employed for at least 90 days.
· The public commented and asked that the subcommittee not eliminate night and weekend services provided at the Sorenson Center.

Budget Presentation Department of Financial Institutions
· This department currently regulates 109 financial institutions throughout the state – including credit unions, banks, trusts, payday lenders, etc.
· In 2009, the department eliminated 4 vacant positions.
· The agency runs on $5.9 million and is totally funded through the fees that go into the general restricted account. They do not rely on any money from the General Fund.
· 2009 was the first year that the department’s unused funds were not placed back into the general restricted account, but into the general fund, which resulted in the department to eliminate 4 vacant positions. Every year prior, the unused money always has returned to the general restricted account. If money continues to be taken out of the restricted account, the fees would have to be increased to cover their budget and that would require legislative action as the fees are in statue.

Budget Presentation Public Service Commission
This agency regulates the utility companies ensuring that they are charging reasonably priced utilities.
This agency does not receive any money from the General Fund. Their budget is entirely covered from a public utility fee of 1% of their revenues.
The Commission is not asking for any increases in their budget for the rest of FY 2010 or FY 2011, as their budget and number of employees has been the same since 1994.

Commerce and Workforce Services Appropriations Subcommittee 1/28/2010 – CANCELLED – Next Meeting will be held on Monday February 1, 2010.

The Department of Natural Resources Appropriations Committee reprioritized the budget list for FY 2010. Below is the updated budget list. The employee furloughs have already taken place.
Natural Resources Appropriations Subcommittee
Proposed 4% One‐Time Budget Reductions, FY 2010
Jan. 20, 2010
Rank Agency Division Item Reduction
1 DNR DNR Admin One Day Furlough (8,100) (8,100) 0.0%
2 DNR Forestry One Day Furlough (8,700) (16,800) 0.0%
3 DNR Oil & Gas One Day Furlough (5,600) (22,400) 0.0%
4 DNR Wildlife One Day Furlough (32,900) (55,300) -0.1%
5 DNR Parks One Day Furlough (26,500) (81,800) -0.2%
6 DNR Geological Survey One Day Furlough (10,600) (92,400) -0.2%
7 DNR Water Resources One Day Furlough (8,900) (101,300) -0.2%
8 DNR Water Rights One Day Furlough (20,500) (121,800) -0.2%
9 PLPCO Public Lands Reductions (13,300) (135,100) -0.3%
10 Ag General Admin. Replacement with Dedicated Credits (135,000) (270,100) -0.5%
11 DNR Forestry Replacement with Restricted Funds (1,456,800) (1,726,900) -3.3%
12 Ag General Admin. Retirements (196,500) (1,923,400) -3.6%
13 Ag General Admin. Current Expense (114,600) (2,038,000) -3.9%
Office of the Legislative Fiscal Analyst 1/20/2010
14 Ag General Admin. Travel (in‐state) (50,000) (2,088,000) -3.9%
15 Ag State Fair Reductions (27,000) (2,115,000) -4.0%
Subcommittee Total General Fund Budget 52,874,800

House Democratic Caucus
On 1/28/10 the Public Employee Retirement Coalition (UPEA, UEA, USEA, and FOP) had the opportunity to present their views on the proposed retirement changes to the House Democratic Caucus. Each group highlighted the bills that are currently being presented, the effects of such bills, and that the coalition would like to see the issue reviewed in an interim study prior to taking any action.

UPEA provided talking points, historical information regarding contribution rates, and a recent Forbes article showing that Utah is in good shape to avoid financial failure due to pension funding.

Several of the legislators in the caucus expressed concern, stating that this issue will negatively impact the workforce. Many indicated that there is a need for public employees to be actively involved in the legislative process by contacting their legislators and educating the public.

UPEA indicated that they will update the legislators on the progress of the campaign, and again encourages all public employees to contact their legislators.

Capital Facilities and Governmental Operations Appropriations Subcommittee

On 1/28/10, UPEA attended the Capital Facilities and Governmental Operations Appropriations Subcommittee. The Legislative Auditor General’s Office presented “A Performance Audit of the Department of Technology Services” to the committee. The auditor stated that they are suggesting several efficiencies that can be found in the department and highlighted some recommendations that would help DTS better manage IT resources, develop a better strategic plan, and enhance the oversight and accountability of the department.

The DTS Executive Director, Stephen Fletcher, seemed sincerely grateful for the audit, as it helps to have another set of eyes to help them find a better way to move forward. He indicated that they have begun to implement several of the recommendations and have plans in place to continue working toward a more efficient service oriented model.

Fletcher gave a few examples of how they have been able to reach those efficiencies, including: eliminating 134 jobs through managed attrition, consolidating servers, and improving measurement of service levels. Through the positive recommendations given, DTS has been able to strengthen its processes and continues to look for new initiatives to find efficiencies.

Health and Human Services Appropriations Subcommittee
UPEA attended the Health and Human Services Appropriations Subcommittee on 1/28/10. In the meeting the Department of Health presented the changes that they have implemented through a reorganization of structure. The reorganization that took place last year consolidated 4 divisions into 3, and also looks to save the department close to $400,000 in ongoing funds, by consolidating high level positions.

The committee also discussed ways that the state could save money on Medicaid expenses. Michael Hales, Deputy Director of the Department of Health, indicated that they have implemented several changes based on an audit report that was completed last year.

Representative Dougall asked if the department could outsource some of the Medicaid administration to private companies. Hales indicated that some outsourcing has already been done through Healthy U and Molina Health. However, they are willing to look at alternatives depending on the scale of the