Stephen Ohlemacher
Plain Dealer Bureau

Columbus — About 600 teachers and retirees protested yesterday against generous employee fringe benefits and frequent travel by board members at the State Teachers Retirement System.

STRS board members said they got the message.

The board voted unanimously yesterday to limit travel by board members, cut its staff and continue to delay all employee bonuses. The board cut its current operating budget by 7.3 percent, and the interim executive director announced that all investment staff members and senior officers will be required to submit financial disclosure statements to the Ohio Ethics Commission.

"We agree that some of our past policies and procedures need to be revised," STRS board Chairwoman Deborah Scott told the crowd at yesterday's meeting.

“We are prepared to spend the time and effort to do what is necessary to restore trust and confidence in this system.”

Damon Asbury, interim executive director of STRS, said: “These will not be the only changes that will be made. They are a beginning.”

Many teachers and retirees applauded the actions, but said more needs to be done.

“It’s not enough, but we’re pleased they are moving in the right direction,” Dennis Leone, superintendent of Chillicothe schools, said in an interview.

Leone first uncovered many of the questionable spending prac´ tices at STRS in the spring, and he has lobbied the board to cut spending since.

“Today, the party is over,” Leone told the crowd at a State´ house rally before yesterday’s board meeting. “The culture of entitlement for the STRS board is over.”

Dave Speas, a retired teacher from Springfield, told board members that retirees will hold them accountable for STRS spending practices.

“We will be watching,” Speas said. “We will not go to sleep at the switch like we did the last time.”

Teachers and retirees came from across the state to gather at the Statehouse and march to the STRS headquarters a few blocks away for the board meeting.

They have inundated board members, state officials and reporters with e-mails and phone calls since The Plain Dealer published a story June 8 documenting STRS spending practices.

The spending included a total of $14 million in employee bonuses the past three years, at a time when the pension fund lost $12.3 billion, or 21 percent of its total assets.

STRS completed a $94.2 mil´ lion expansion of its Columbus headquarters in 1999. The build´ ing is decorated with $869,000 in artwork, according to STRS doc´ uments.

In June, the board voted to suspend employee bonuses.

Executive Director Herb Dyer agreed to step down last week, after the STRS board voted to pay him a $550,000 severance pack´ age. He had been urged to resign by 105 state lawmakers.

The Ohio Retirement Study Council, a legislative committee, has ordered an independent audit of STRS’ management, spending and investment practices, which is expected to cost STRS as much as $500,000.

Yesterday, the STRS board voted to:

Limit board member travel to three conferences a year apiece, or a total of $6,000 apiece. The entire board spent an average of $174,000 a year on travel for the past three years.

Reduce the current operating budget from $88.8 million to $82.3 million. The budget for the fiscal year that ended June 30 was $82 million.

Cut the number of staff members from 688 to 675 by July 2004. Staff levels peaked at 732 last year and have steadily de´ clined since.

Continue to delay employee bonuses to the investment staff until the board overhauls the program. Most board members said they would no longer sup´ port the old bonus system, which awarded bonuses of up to 115 percent of an investment staff member’s base salary.

Seek a legal opinion from the Ohio attorney general on whether the board is obligated to pay performance bonuses to non´ investment staff for work done in fiscal 2002-03.

Several board members said they are inclined to pay the bon´ uses because they were promised to workers, but they wanted the additional information.