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State sends $2.3 million bill to Jackson and Josephine counties

Josephine County officials are balking at a $2.3 million bill that officials in Salem say is owed the state's retirement system following last year's shutdown of the Job Council.

Josephine and Jackson counties established the workforce training organization 41 years ago but opted to dissolve it last year, with council services now handled by a new partnership called WorkSource Rogue Valley.

Jackson County is looking at the same bill — its half of obligations to the Public Employees Retirement System, according to a staff recommendation made to the PERS board, which meets Friday in Tigard to decide whether to start charging each county beginning July 1.

The tab equates to 1.8 percent of Josephine County's total payroll, or about $250,000 a year, until the obligation is paid off. At that rate, it could take the county more than nine years to pay it off.

The county is disputing the bill, saying the Job Council, not the county, is responsible for the $4.7 million debt. The county previously suggested the now-defunct council file for bankruptcy, but Jackson County declined, fearing the effect on its credit rating.

Last week, Josephine County Legal Counsel Wally Hicks asked the PERS board to overturn the decision.

"It was the Job Council (and not Josephine or Jackson county) who joined PERS in 1998," Hicks wrote. "Any obligation to PERS of the Job Council must remain with the Job Council, as it is a separate governmental entity from Josephine County.

"Josephine County requests that any unfunded obligations remain either with the Job Council or its successor organization, or be absorbed by PERS."

Former Job Council Executive Director Jim Fong, who is now executive director of WorkSource Rogue Valley, said his new agency should not be responsible for the debt.

"I don't think WorkSource Rogue Valley is a successor organization," Fong said, adding the new agency has more comprehensive services and different partners, including the Oregon Employment Department.

WorkSource Rogue Valley as of Tuesday still carried the Job Council logo on its website home page, although Fong said he was getting ready to remove that now that a year-long transition was complete.

WorkSource Rogue Valley works out of offices in Medford and in Grants Pass, at 1569 N.E. F St., the former offices of The Job Council. Last year, the Job Council employed 55 people.

If the PERS board denies Josephine County's request, the county still has recourse to the courts, Hicks said.

The staff recommendation is particularly untimely because Josephine County, as of July 1, could be in the midst of a massive downsizing if federal funding under the Secure Rural Schools Act is not reauthorized by Congress.

The funding, also known as county payments, has meant nearly $5 million a year in recent years for county coffers, down from a peak of around $12 million a decade ago.

County voters in November are being asked to approve a $12 million annual property tax increase to fund public safety. Voters have rejected four similar public safety levies since 2012.

Last week, Oregon's congressional delegation asked House and Senate leaders to reauthorize the funding as part of a massive spending bill needed to avoid a federal governmental shutdown Friday, the beginning of the federal fiscal year.