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, <br />~ ,. <br />~ <br />' <br />, <br />~ ~~ <br />~ A:-.~tlad <br /> LiabWty <br />I <br />~~s <br />~`~' <br /> Piolccstonol <br />Corporaaoas <br />, s2o s.w <br /> Yam~ilt sveet <br /> SulLO 800 <br /> Fortlah~ OR <br />~ 9720a-1$83 <br /> tsoal sza.aru <br />' ; ~ =aa~@r~~: <br /> <br />, <br />' <br />' <br />' <br />, <br />~ fsoa) 22a-a~rcx <br />~n~ora~ .!x <br />~~. Ax <br />~rA~dw ca <br />.~nr v«r~,, wa <br />o1v~~a, wA <br />1°ertland OR <br />Son Fc~dsco. CA <br />s~c~ wa <br />I.ANB <br />Pow~LL <br />SP~ts <br />I.vBExs~ <br />~ <br />~ <br />VIA F.A.CSIl1'1II.E AND M,A,II, <br />1~aty I,orense~o, <br />Hurn,a~a Resaurces N~anager <br />Ss~~a Are~t Ttansit <br />3 I40 De~ Wcbb Aveaue NE <br />Salem, OR 97303-4165 <br />December 2, I997 <br />Re: A~gplication of ORS 267.130 to Merit Pay Awards <br />Our File No. 17729-5 <br />Aear Mary: <br />EXHIBIT 25 <br />Earlier this year at the $oard meeting held on June 26, 1997, the Board o~Diredors adopted <br />a pohcy concernuig perfvcmance based mart awards. The policy aathorizes the Gcneral <br />Manage~ to make naerit pay awards in approp~tatc cases. A,t the satae Board meeting tb~e <br />Board of Directors docided on its own motion and without staff recomrnatdatian to make a <br />on~time merit pay awaxd in lieu o~ a cost of living adjustmeat to which the General Manager <br />- othexwise was ernitied under thc terms of his employnaent. <br />You have i~quired concetning whethex ORS 267.130 pro~u~its one-time merit pay awards <br />grazited by the Board to the Geuergt Managez, We find no case Iaw interpreting this statute. <br />We conclude that the inerit paymeat i-n lieu of COLA. was lawful. <br />The statute shou~d be wnstruod in a mau~ner consistent with the o~~~y ~~ of words <br />corrtained ther~ein. It is significant to us that tb~e staiute coatrasts "money er any othar thing <br />of value as a considcratioa" with "in addition to the salary paid tb.e officer or employ~ee the <br />~c~" (emphasis added)- <br />We believe that ~ a`~nerit pay award" paid by the District to its Gensral ~V1an,ager upon <br />d"urection of the governi~;g body or paid by the District to aay other empioyee undez the <br />pe~formance based merit award progr~m for services pexformed witbwa the scope of the <br />affcial duties of the o~cer or cmployee is a conpozient of "salary paid the officer or <br />emPleyee" and is therefore not proiu'bited by the statute. T his paymeat is subjec,t to state and <br />fedezal income tax withholding, an~d it is subject to retit~eut co~n'btrtians under the <br />Dimict's ~CMA plans, and otb;er taxes. In addition, the payment is cleaziy part o£ <br />remuneration pai.d for putposcs of a11 PERS computations under the PEk~S statutes. <br />In owr view, the statute seeks to prohibit kickbacks, bnbes, extra paymeaats for consulting <br />services and the Iike, w~ich may but not necessarily need axise where a con8.ict of imterest is <br />co„doa, e~tana <br />