Jmercier

Senator challenges press on public records exemption

September 1, 2009 in Blog

Yesterday the state Sunshine Committee voted 8-1 to recommend the Legislature repeal its exemption to the public records act for legislative records. State legislators are currently the only officials in the state with this exemption. The lone no vote was Sen. Adam Kline, Chair of the Senate Judiciary Committee.

Reporting on the vote Crosscut notes:

In this state, the 2007 Legislature passed a law that shields
journalists from having to reveal their sources in court. Kline was
prime sponsor of that shield-law Senate bill. Representative Lynn
Kessler, another Sunshine Committee member, was prime sponsor of the
identical House version, which became law.

Kline says he asked journalists on the Sunshine Committee “why [a
source's identity] should be confidential to them and not to us.” He
says he didn't get an answer. “ There is no difference,” he says. “They admit it by their silence.”

Kline readily concedes that some communications from constituents are “venal,” but he thinks the public interest in protecting potential whistle blowers outweighs the public interest in exposing people who, say, try to buy votes. Kline reasons that some people who have sensitive information won't come forward if they know their identities can be made public. Is that speculation? Of course, Kline says. But he suggests it is also speculative that the lack of a shield law before 2007 kept sources from communicating with journalists. “I feel that those people [who provide sensitive information to legislators] need to be shielded just as they are when they go to a news reporter,” he says.

The press, however, did answer the Senator's question at the Sunshine Committee hearing yesterday. Here is the exchange between Sen. Kline an!
d Rowland Thompson, Executive Director of Allied Daily Newspapers of Washington:

Sunshine Committee votes to repeal legislative records exemption

August 31, 2009 in Blog

At long last the state Sunshine Committee voted to repeal the Legislature's exemption from the public records act. Committee Chair Tom Carr originally proposed the resolution on March 18. By a 8 to 1 vote:

The
Committee recommends that the legislature eliminate the Legislative
exemption, which excludes from public scrutiny personal records of the
legislature, including e-mails, correspondence, except when designated
as a public record by a “official action of the Senate or House of
Representatives.” Every other legislative body in the state of
Washington is fully subject to the public records act. There is no
principled reason why the state legislature should be exempt. 

Implementing this recommendation would require amendment of RCW 42.56.010(2) as follows: "Public record" includes any writing containing information relating to the conduct of government or the performance of any governmental or proprietary function prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.

This change addresses the Legislature's
double standard when it comes to compliance with the public records
law. Now it is up to the Legislature to act on the Sunshine Committee's recommendation next session.

Voting yes: Thomas Carr, Senator Pam Roach, Representative Lynn Kessler, Rowland Thompson, Ken Bunting, Patience Rogge, Ramsey Ramerman, and Frank Garred.

Voting no: Senator Adam Kline

Additional Information
Legislative records exemption vote postponed again

UPDATED: Did TABOR destroy Colorado?

August 28, 2009 in Blog

This November Washingtonians will vote on Initiative 1033. The measure is sponsored by Tim Eyman and would create a new revenue limit for the state and several local governments with the goal of annually reducing property taxes.

Due to the similarities between I-1033 and Colorado’s Taxpayer Bill of Rights (TABOR), opponents of I-1033 have sought to compare the impact of TABOR in Colorado to what voters can expect to happen in Washington if I-1033 is enacted.

Without debating the details of I-1033, it is worth considering the claims about TABOR's impact in Colorado.

According to I-1033 opponents:

In Colorado, core public structures deteriorated under TABOR. From 1992 to 2005, the state experienced significant decay in health care, K-12!
and higher education, transportation infrastructure, and other basic public services.

The opponents use a bevy of statistics to make their case.

As Mark Twain once noted, however, "There are three kinds of lies: lies, damned lies, and statistics."

Illustrating this observation, the Tax Foundation has come to a different conclusion about TABOR's effect in Colorado. In a report refuting some of the statistics cited, the Tax Foundation noted in 2005:

The state of Colorado is under assault. Opponents of Colorado’s
Taxpayer Bill of Rights (TABOR) are waging a well coordinated but
misleading attack on Colorado’s reputation. This attack takes the form
of a number of rankings and statistics that purport to show that the
Taxpayer Bill of Rights has decimated Colorado. These rankings and
statistics are based on the assumption that if Colorado ranks poorly on
things like the adequacy of prenatal care and education spending, then
Colorado is failing to adequately care for and educate its citizens,
and that the Taxpayer Bill of Rights must be to blame. A closer look at
the attacks shows that they fail to prove that the amount a state
spends on health care and education determines quality, and they also
fail to tell the whole truth about the rankings and statistics of the
state of Colorado [please see study and links below for details] . . .

Contrary to the assertions of its opponents, the Taxpayer Bill of Rights has not decimated Colorado. In other measures of fiscal standing, not mentioned by the opponents of the Taxpayer Bill of Rights, Colorado compares very favorably to other states. Colorado’s per capita tax burden is the tenth lowest in the nation, ranks as the 8th friendliest business-tax climate (the highest ranking of any state with a sales tax and a corporate and personal income tax), and ranks as the state with the 2nd highest level of economic freedom. It is simply inaccurate to say that Colorado is a sub-standard state based on selectively cited statistics and national rankings, and even more inaccurate to blame the Taxpayer Bill of Rights for any perceived inadequacies.

I-1033 opponents also note the voters in Colorado !
suspended TABOR in 2005, purportedly proving their dislike for the results provided. While this temporary suspension until 2010 did occur, TABOR remains popular in Colorado. In fact, an effort to permanently repeal the TABOR state tax refunds (Amendment 59) failed in 2008 with 55 percent voting against. This means the people of Colorado have decided that TABOR will be back to its full force and effect in 2010.

Does this mean that I-1033 is good or bad policy? That's a debate that will go on till election day but it shouldn't hinge on misrepresenting Colorado's TABOR.

Additional Information
TABOR: What Was Said vs. What Really Happened
Exposing TABOR Data Games
TABOR Benefits !
Colorado's Citizens: A Response to Misleading Video

Open Government Task Force Members

August 27, 2009 in Blog

State Auditor Brian Sonntag announced yesterday he is creating an Open Government Task Force with Attorney General Rob
McKenna. The purpose of the new Task Force
is to study and make recommendations on the creation of an
administrative board to rule on complaints of violations regarding the
state's open government laws. The Task Force meetings are scheduled for
October 5, 2009 and November 2, 2009 from 9 a.m. to 1 p.m. at the
Attorney General's Office in Olympia. Below is a list of the Task Force members:

Co-Chairs:
  • Rob McKenna, Attorney General
  • Brian Sonntag, State Auditor

Staff Contact:

  • Tim Ford, Open Government Ombudsman for Attorney General's Office

Task Force Members:

  • Paula Adams, Public Information and Records Officer for King County Department of Development and Environmental Services
  • Jim Doherty, Legal Consultant, Municipal Research and Services Center
  • Judy Endejan, Attorney, Graham and Dunn
  • Ruth Gordon, County Clerk for Jefferson County
  • Jerry Handfield, State Archivist for Secretary of State
  • John Hendrickson, Kenmore City Council Councilmember
  • Mary Hunt, Douglas County Commissioner District 3
  • Chris Hurst, State Representative, 31st District (member of State Government Committee)
  • Graham Johnson, (Executive Director of the Public Disclosure Commission 1974-1993)
  • Lynn Kessler, State Representative, 24th District – Majority Leader
  • Joel Kretz, State Representative, 7th District
  • Mark Lindquist, Pierce County Prosecuting Attorney
  • Louis Mitchell, Bremerton School Board of Directors
  • Bob Morton, Senator, 7th District
  • Shirley Nixon, Citizen Activist
  • Toby Nixon, President Washington Coalition for Open Government
  • Bob Partlow, Foster Parent Support and Recruitment for Department of Social and Health Services
  • Althea Paulson, Kitsap Regional Library Board Member
  • Kevin Phelps, Deputy County Executive & Executive Director of Operations & Infrastructure for Pierce County
  • Craig Ritchie, Attorney for City of Sequim
  • Rowland Thompson, Executive Director Allied Daily Newspapers of Washington

Here are additional details about the Open Government Task Force:

We [McKenna and Sonntag] created this Task Force to address growing concerns among governments and the public. State agencies and local governments face a logjam of citizen complaints, costly litigation over the PRA and the OPMA, and uncertainty regarding potential liability that may require payment of attorneys' fees, costs, and daily penalties. Citizens who are denied access to public records and public meetings have no choice other than to go to court, and lawsuits may take years to resolve and are costly. Going to court to enforce legal rights to access public records and public meetings is simply not an option for many citizens.

An efficient and inexpensive solution is needed to resolve complaints and provide greater access to public records and public meetings while reducing costs to governmental agencies and the public. Many !
states provide an independent administrative review process to resolve complaints without litigation. These states use administrative boards to offer services including mediation, dispute resolution, non-binding legal interpretations, investigation of potential violations, issuing final appealable rulings, offerings of legislative reform, and training public officials about their responsibilities under the law.

The Task Force may consider the pros and cons of the open government enforcement efforts in Connecticut, New Jersey, and New York.

Will Kent PTA seek teacher strike injunction?

August 27, 2009 in Blog

The first illegal teacher strike of the year may occur in the Kent School District. The question for parents and students who will be held hostage by this illegal action if teachers follow through with their threat, who will seek an injunction to uphold the law and ensure the school doors are open? Will the Kent PTA be the one to step up to the plate?

This is from the state PTA resolution on strikes, "Resolved, that the Washington State PTA will not support work stoppages and/or strikes which interrupt or disrupt the educational day."

Perhaps the Kent PTA should contact the Evergreen Freedom Foundation to discuss its legal options!
.

PDC holds work session on enforcing open government laws

August 26, 2009 in Blog

An all-star panel participated in a Public Disclosure Commission (PDC) work session today discussing how the public records and open meetings acts should be enforced. Joining the PDC Commissioners on the panel were:

  • State Auditor Brian Sonntag
  • Representative Sam Hunt
  • Representative Marko Liias (sponsor of bill discussed)
  • Tim Ford, Open Government Ombudsman for the Attorney General’s Office 
  • Toby Nixon, President Washington Coalition for Open Government
  • Dan Heid, Washington Municipal Attorney’s Association
  • Ramsey Ramerman, Attorney and state Sunshine Committee Member
  • Graham Johnson, former Executive Director of the PDC

The focus of the work session was HB 1784 introduced during the 2009 Legislative Session by Representatives Liias, Chase, Hasegawa, Appleton and Ormsby. The bill received a hearing but was not voted on. Here is a summary of HB 1784 from the House Bill report:

In 1971 the Legislature enacted the Open Public Meetings Act (OPMA). The OPMA requires that all meetings of the governing body of a public agency be open to and public, and all persons shall be allowed to attend.

Initiative 276, passed by the voters in 1972, established the disclosure of campaign finances, lobbyist activities, financial affairs of elective officers and candidates, and access to public records. That initiative also created the Public Disclosu!
re Commission (PDC), a five member, bipartisan citizen commission, to enforce the provisions of the campaign finance disclosure law.

Twenty years later, in 1992, the Fair Campaign Practices Act was enacted following passage of Initiative 134. Initiative 134 imposed campaign contribution limits on elections for statewide and legislative office, further regulated independent expenditures, restricted the use of public funds for political purposes, and required public officials to report gifts received in excess of $50.

Unlike the campaign finance disclosure laws, enforcement of the OPMA and the Public Records Act (PRA) must be pursued through the judicial system.

The powers of the PDC are expanded to include the enforcement of the OPMA and the PRA. The PDC is authorized to investigate, review and adjudicate complaints alleging violations of the OPMA and the PRA. The PDC is also authorized to issue interpretative opinions of the OPMA and the PRA!
. In addition, the PDC can provide confidential consultation r!
egarding a person's or agency's duties under the OPMA and the PRA.

PDC staff highlighted similar open government enforcement efforts in Connecticut, New Jersey, and New York.

Panelists were provided a work sheet asking their opinions on “Possible Elements of Open Government Oversight Agency” including:

  • Single agency to oversee open government
  • Independent of other agencies
  • Single agency head
  • Multimember board
  • Oversee open records
  • Oversee open meetings
  • Jurisdiction over state agencies
  • Jurisdiction over local agencies
  • Conduct investigations
  • Conduct hearings
  • Exclusive jurisdiction over disputes
  • Dual jurisdiction over disputes, with superior courts
  • Use Administrative Law Judges
  • Have mediation program
  • Have ombudsman program
  • Adopt rules
  • Issue formal written opinions (oral or written)
  • Provide materials
  • Provide training
  • Operate toll-free number
  • Track PRA/OPMA legislation
  • Submit annual report to Legislature
  • Funding source
  • Effective date of agency

The discussion centered around common themes. From the citizen advocates: It is too hard for requestors to take on governmental entities in an open government dispute. From the government lawyers: There need to be more costs/restrictions on citizens to avoid abuse of the laws and burdening governmental entities.

There did seem to be some agreement that an independent oversight entity is needed though the devil is in the details for the panelists.

State Auditor Sonntag announced that he is creating an Open Government Task Force with Attorney General Rob McKenna to continue this discussion. The purpose of the new Task Force is to study and make recommendations on the creation of an administrative board to rule on complaints of violations regarding the state's open government laws. The Task Force meetings are scheduled for October 5, 2009 and November 2, 2009 from 9 a.m. to 1 p.m. at the Attorney General's Office in Olympia.

Whether it is the PDC or an independent Open Government Ombudsman, citizens and government would benefit from an independent entity charged with enforcing the state's open government laws while also providing training and assistance. We discussed the need for this in our latest Policy Guide (page 8 of pdf).

Legislative records exemption on the clock

August 26, 2009 in Blog

The state Sunshine Committee may finally take action at its meeting
next Monday on the issue of legislative records and the public records
act. Here is the draft agenda. Additional information here:

After health care "reform" are private pensions next?

August 25, 2009 in Blog

With the country still at a fevered pitch over the national health care debate, the next controversial policy may already be in the works - changes to private pensions. Last year the Chair of the House Education and Labor Committee, Rep. George Miller (D-CA), requested a Government Accountability Office (GAO) review of alternatives approaches to the private pension system. In a report released yesterday GAO said (emphasis added):

The private pension systems of the Netherlands, Switzerland, and the United Kingdom represent alternative approaches to address these key risks, but they also pose trade-offs to consider in applying them in the U.S. We selected these countries from a larger group after an initial review indicated that their private pension systems addressed many of the risks that U.S. workers face and had the potential to yield useful lessons for the U.S. !
experience. Their systems offer ideas for mitigating risks in accumulating and preserving benefits, such as mandating coverage, sharing investment risk among workers and employers, restricting leakage, and using annuities to drawdown benefits.

Several proposals for alternative pension plan designs in the U.S. incorporate approaches to mitigate the risks faced by workers, such as incentives to increase voluntary coverage or mandating annuitization. However, these approaches also pose trade-offs and costs for workers and employers, and in some cases the federal government. In particular, important trade-offs arise with mandating coverage and contributions, guaranteeing investment returns, and annuitizing benefits. For example, mandatory approaches reduce risks but also raise concerns about the impact of higher benefit costs, particularly on small employers.

Any of this sound familiar to the current health care debate!
?

Government employment grew while private sector shed 6.9 million jobs

August 20, 2009 in Blog

The New York Times has an interesting story about the growth in government employment across the nation as the recession hit even as the private sector was shedding jobs. From the article:

While the private sector has shed 6.9 million jobs since the beginning of the recession, state and local governments have expanded their payrolls and added 110,000 jobs, according to a report issued Thursday by the Nelson A. Rockefeller Institute of Government.

The report, based on an analysis of federal jobs data, found that state and local governments steadily added jobs for eight months after the recession began in December 2007, with their employment peaking last August. State and local governments have since lost 55,000 jobs, but from the beginning of the recession through last month they gained!
a net of 110,000 jobs, the report found, in part because of the federal stimulus program.

Government jobs are always more stable than private sector jobs during downturns, but their ability to weather the current deep recession startled Donald J. Boyd, the senior fellow at the institute who wrote the report.

“I am a little surprised at the fact that state and local government has remained as stable as it has in the nation as a whole, given the depth of the current recession,” Mr. Boyd said in an interview.

The report offered several possible explanations for the disparity between the private and public sectors. It noted that there can be a short lag between an economic downturn and the time it hits states in the form of lower tax collections, and an even longer delay before the problems hit local governments in the form of reduced state aid and lower property tax collections.

This appears to also be the case in Washin!
gton. As shown by this table from fiscal.wa.gov, full-time equivalent positions at the state level grew rapidly during the previous budget only to be reduced in the current budget once projected revenues began to show the impact of the recession.

Fte

Here is one of the most striking tables from the Rockefeller Institute employment report.

OFM releases state employee salary details

August 19, 2009 in Blog

The Office of Financial Management (OFM) has posted the 2009 Personnel Detail Report listing individual state employee salaries. According to OFM:

"This edition of the Personnel Detail Report includes those employees on the state payroll as of January 2009. The general salary information listed in the Personnel Detail Report is the pay rate effective January 31, 2009 as paid on February 10, 2009.

The report is compiled by the state Office of Financial Management (OFM) from information provided by the state's payroll systems. The information OFM receives from the payroll systems is entered and maintained at the individual agencies."

Users of the data can search by functional area of state government or by agency.

Salary information is also provided for legislators, judges, and statewide elected officials.

UPDATED

Not sure why this information wasn't provided on OFM's website but here are the top 200 salaries (hat tip Joe Turner):

Rep. McMorris Rodgers launches transparency website

August 17, 2009 in Blog

Washington state Congresswoman Cathy McMorris Rogers has put together a nifty transparency resource providing details on federal earmarks, stimulus spending and transparency legislation. Here is what her website says about Sunshine.gop.gov:

"I wanted to let you know about a new and cutting edge tool giving you greater access to how the federal government spends our tax dollars.  I developed sunshine.gop.gov to allow you to track stimulus dollars, banks that received Troubled Asset Relief Program (TARP) funds, and earmark and authorization requests on one site.

Six months ago, lawmakers rushed through a $787 billion stimulus package and before that a $700 billion TARP program.  With all this record spending, you should have the right to see how their tax dollars are being spent.  Not only will this website give you more insight but it will ultimate!
ly hold the federal government accountable for how it spends our money."

The site allows users to:

The section on earmark requests is worth the visit alone. According to the site:

"Each year Members of Congress submit requests to the appropriations subcommittees for specific projects to be funded in bills that keep the federal government operating annually. These provisions are known as earmarks; once they are written into law, federal agencies must carry them out. Earmarks are present in other pieces of legislation as well, but those in appropriations bills have recently been the subject of much controversy.

In the past the information about who submitted these requests was not available to the public. This year all members who chose to submit earmark requests to the Appropriations Committee were compelled to disclose those requests on their Office website. We’ve compiled all of those requests into a searchable database here. Please peruse the database and feel free to share your thoughts in the !
comments section."

Here are the earmark requests for Washington's Representatives (click on link):

Candidates respond to open government questionnaire

August 10, 2009 in Blog

Just in time for the August primary election the Washington Coalition for Open Government has published the responses to its candidate questionnaire. Among those responding were several candidates for King County Executive. Here are the answers for Dow Constantine, Fred Jarrett, and Alan E. Lobdell.     

Questions gauged candidate's support for:

  • recording executive sessions;
  • restricting the use of attorney-client privilege to deny records release;
  • creating an independent open government ombudsman;
  • requiring open government training for government employees and elected officials;
  • archiving electronic records; and
  • stopping abuse of third-party injunctions.

Here is the link to all the candidate surveys returned so far. Though the deadline was July 31, surveys will continue to be posted as received.

According to the Coalition's website:

The Washington Coalition for Open Government represents individuals and organizations intent on preserving and protecting Washington’s open government laws. Members of the Coalition represent a broad range of interests including news media, public affairs, law, academia, labor, business, current and retired public officials, community activists, and others. Its mission is to represent the public in matters where open government issues are raised, are threatened, or deserve broader exposure.

The Coalition desires to make known to its members and to the general public the positions of candidates for public office on open government issues. To that end, we have cr!
eated the candidate questionnaire.

Washington Policy Center is a member of the Coalition. Here are the open government recommendations from our latest Policy Guide:

  • Create a Public Records Ombudsman authorized to enforce the Public Records Act.
  • Clarify the use of the attorney client-privilege exemption.
  • Create criminal penalties for willful violation of the Public Records Act.
  • Require audio taping of executive sessions.
  • The legislature should make itself subject to the Public Records Act and Open Public Meetings Act.
  • Adopt a constitutional amendment placing the preamble of the Public Records Act into the constitution, and require a 60 percent vote of lawmakers to enact a new exemption from disclosure to take effect.

Reason Foundation releases Annual Privatization Report

August 6, 2009 in Blog

The Reason Foundation has published its 23rd Annual Privatization Report detailing "the latest trends and examples of how public officials are reducing costs and improving service delivery through public-private partnerships, outsourcing, and performance-based government."

Here is an excerpt from Reason's press release:

"Governments are swimming in red ink and realizing the effects of the recession will be felt long after the economy recovers," said Leonard Gilroy, editor of the report and director of government reform at Reason Foundation. "Interest in privatization is sky-high and rightly so. Now more than ever, policymakers need to study their priorities, re-examine what are really core government functions, and then tap the private sector's experti!
se in all of the areas where they can save taxpayer money and improve the quality of services."

The Annual Privatization Report highlights developments across the country, including:

  •  Florida's Council on Efficient Government identified 511 outsourced projects in 2008. A review of 21 potential privatization projects forecast $94 million in savings for taxpayers.
  • Louisiana Gov. Bobby Jindal established a Commission on Streamlining Government that is using privatization to help reduce the size and cost of state government.
  • California Gov. Arnold Schwarzenegger signed a public-private partnership law that enables and encourages the private sector to fund and manage road, prison and courthouse projects.
  • New York Gov. David Paterson created a Commission on State Asset Maximization to identify areas where public-private partnerships can save the state money.
  • New Jersey policymakers are achieving a major environmental goal by privatizing the cleanup of nearly 20,000 contaminated properties in the state. 

The report highlights this positive development for Washington:

The Washington State Legislature approved a pilot project in performance-based contracting for foster care that the governor signed into law May 18. Under the plan, the first pilot programs will be launched statewide in July 2012. After two and a half years, the Washington State Institute for Public Policy will evaluate the pilot program for the governor, who will then decide whether to expand or terminate it.

By January 1, 2011, the Department of Social and Health Services (DSHS) must consolidate and convert its existing contracts for child-welfare services to performance-based contracts linking the contractors’ performance to the level and timing of reimbursement for services. DSHS, as well as private contractors and Indian tribes, may provide child-welfare services, including case-management ser!
vices, under performance-based contracts. Nonprofit private contractors must receive primary preference over for-profit contractors.

With the exception of this effort, the zeal for competitive contracting was in short
supply in Olympia this year. A proposal to create a Washington competition council
(SB 5409) didn't receive a public hearing. Also, the Washington Federation of State Employees is suing to weaken the state's already underused competitive contracting process. A decision by the Appeals Court on that case is pending.

Congressman cancels town hall meetings over health care debate

August 6, 2009 in Blog

The national health care debate is setting up an interesting compare and contrast back home concerning the strategies of neighboring congressional Democrats Rep. Adam Smith (D-Tacoma) and Rep. Brian Baird (D-Vancouver). Smith is making himself available to constituents while Baird is canceling his town hall meetings.

This comes against the backdrop of news wires abuzz with phrases such as "astroturf protesters" and "anti-government radicals" at town hall meetings voicing their displeasure over how the health care debate is unfolding in Washington D.C. It seems that for some in D.C. and the media, only those Americans who don't have strong opinions and don't try to organize are worthy of having their voices heard.

It should not surprise elected officials that when they push controversial policies there will be some heat back home. Assuming the policy is well thought out a!
nd the typical member of Congress understands what he is advocating, he should have no fear answering even the most hostile question.

Whether a union packs a town hall or tax protesters, these individuals are still constituents and, more importantly, they are Americans participating in representative government.

While some in Congress may prefer that town hall meetings be more like an echo chamber it appears that Rep. Adam Smith has not lost sight of the fact that all of his constituents have the right to be heard and not just those that agree with him.

Commenting in this story about Rep. Brian Baird canceling his town hall meetings to avoid the "lynch-mob mentality" of those opposed to the proposed health care changes, Smith said:

“They aren’t protesters. Th!
ey are constituents speaking their minds.”

Smith !
said even if the protests are organized, “what’s wrong with that?”

Absolutely nothing. Kudos to Rep. Smith for not hiding from the people he represents.

UPDATED (8/13): Rep. Baird has changed his mind and now will hold townhall meetings. Additional details here.

How does Washington's pension administration compare?

August 5, 2009 in Blog

One of the few benefits of the current economic situation is the renewed interest by government officials to base policies on the ability to reach performance expectations. Of course, to hit performance goals you need to know what benchmarks to use. It looks like the state Department of Retirement Services (DRS) is taking this fact to heart. Here is a copy of a proposed sole source contract posting DRS issued this morning:

"The Department of Retirement Systems (DRS) contemplates awarding a sole source contract to CEM Benchmarking, Inc. (CEM) for a twenty-four month period to provide complete public pension administration benchmarking services. This contract may be extended for up to an additional two, twelve-month periods. Services include preparation of a benchmarking report analyzing and comparing public pension administrative and business functions, coordinating a !
conference for public pension systems, providing 'best practices' on a common public pension administrative aspect, and, providing a peer network forum.

The benchmarking report includes analysis of performance and cost data from a minimum of fifteen public pension administrators, each having more than 200,000 active members and annuitants; analysis of at least twelve common public pension administration activities; analysis of at least five factors contributing to cost differences; and, sufficient statistical analysis to enable DRS to validate these conclusions. CEM will also coordinate a conference for public pension systems, which will cover current issues of interest to public pension administrators; prepare one best practice analysis on a common public pension administration service; and, provide a peer network forum of other public pension systems.

CEM specializes in providing benchmarking services for public pension systems that administe!
r defined benefit and/or defined contribution plans. CEM has a!
lmost twenty years of experience in pension benchmarking and currently maintains over 500 clients worldwide. CEM is the only known specialist able to provide independent analysis of the factors that make public pensions unique.

The contract will be issued on or about August 25, 2009. Offerors contemplating the above requirements are required to submit capability statements detailing their ability to meet DRS’ requirements within five (5) calendar days of this announcement. In the absence of other qualified sources, it is DRS’ intent to make a sole source award of the contract."

It will be interesting to see how Washington's pension system compares. One recent analysis of the state's pension system indicates Washington may be out of the norm in how it invests its portfolio. According to a report by the Evergreen Freedom Foundation:

"The Washington State Investment Board was considered a 'daring, cutting-edge investor,' according to Institutional Investor Magazine, because of its decision to risk more of its pension portfolio on private equity than any other major state plan.

In 2007, the private equity market began to falter, and $154 billion worth of leveraged buyouts were pulled. Private equity investors were warned they could expect lower returns. Despite these facts, the board’s trustees voted to increase the state’s private equity allocation from 17 percent to 25 percent—significantly outpacing the next-most-aggressive state funds in Oregon and Pennsylvania, at 14 percent.

Wilshire Associates reports that across all 125 state pension plans in 2008, the average private equity asset allocation was 5.6 percent. Washington’s 25 percent allocation is more characteristic of an endowment fund than a pension fund.

The state’s priv!
ate equity losses could prove to be worse than what is shown on paper b!
ecause they are illiquid—meaning they are traded infrequently and values are hard to establish. In December 2008, the investment board’s then Executive Director Joe Dear said in an interview that 'private equity is valued on a lag basis, so we haven’t begun to see the real effects of the downturn in the private equity portfolio.'"