May 2004 News

STATE ENGINEERING ASSOCIATION - MAY 2004 PAGE 5
FROM THE PRESIDENT

state Engineering Association Day (SEAD) held on April 28th at the Capital was another
success. This year we had a new twist, Senator Erpenbach offered a proclamation recognizing
the State Engineering Association members for the work they do. Larry Legro coordinated this
with Senator Erpernbach's office. Thanks Larry !

Our efforts are making a difference and we must continue to educate and communicate with
the decision-makers and voters. If you were not able to attend SEAD, then take a moment and
send your legislator a letter or give them a call and set up an appointment to see them during
their district listening sessions. Sections should also consider inviting a legislator to speak at a
section meeting. See your section president for more information on State Engineering
Association Day.

In previous newsletters I've written about dysfunction during our "new day" in Wisconsin under
Doyle. Those were not isolated examples just examples that made those newsletters. Pick an
agency and you can find similar examples of dysfunction - Commerce has supervisors doing
program assistant work, in DOT we have IT professionals performing program assistant duties
sitting at the front desk directing phone calls and people.

In DNR cuts in personnel have damaged the agency's ability to monitor drinking water. The
state is falling farther and farther behind yet we continue to cut positions - how is this good
government? The taxpayers expect their water standards are monitored and protected.

See the May 7th Milwaukee Journal Sentinel article on this. The "new day" is damaging much of
the Wisconsin Ideal - a Wisconsin government that made Wisconsin what it is today. These
are the types of things that the legislators and taxpayers need to be educated about.

State officer elections will be held later this summer - all positions will be up for election -- think
about running for an office. In these difficult times we need good leaders to step forward and
lead SEA. If your interested contact me and I'll answer any questions you may have.

Remember to be professionally and technically the best you can be at your jobs! It is how you
can best serve yourself and the taxpayers of the State.

Respectfully,
Timothy R. Hanley
SEA President

Financial Summary of the September 24, 2003 Fundraiser
Sponsored by ACEC of WI for Governor Doyle
By George Mickelson, DNR Section and Compensation Committee Chair

A number of SEA members that read the article that I wrote for the last newsletter have asked if Gov. Doyle really raised over $25,000 at a single fundraiser that was sponsored by the American Council of Engineering Companies of Wisconsin. The answer is yes. The fundraiser was held on September 24, 2003.

The list below is specific to donations received by Gov. Doyle at the fundraiser. It therefore does not include substantial campaign donations that were made by principals or employees of engineering consulting firms at other times during 2003. For example, principals and employees of HNTB made donations to Gov. Doyle that totaled $10,000 during the single month of January 2003. Also, this list is limited to individual donors, thus PAC money is not listed below either.

To put a $25,000 fundraiser into perspective, in 2002 the median amount of money spent for a successful assembly campaign was $22,588 and the median spent for a successful state senate campaign was $77,092 Thus, the donations received by Gov. Doyle from the consulting engineers at a single non-election-year fundraiser would have been more than adequate to fund the entire median cost of an successful 2002 assembly campaign for a two year term.

The median cost data for a legislative campaign was calculated by SEA from data maintained by the Wisconsin Campaign Finance Project and may exclude soft money. The on-line database that is maintained by the Wisconsin Democracy Campaign was used by SEA as the basis to produce the donor list, below. SEA assumes that all donations by principals and employees of consulting engineering firms that were listed in the database for the first business day after the fundraiser were made at the fundraiser. SEA also assumes that the list obtained from the on-line database is correct, SEA did not contact any individual donors to verify accuracy. If any errors are discovered, they should be attributed to the
Wisconsin Democracy Campaign and not to SEA. Some of the longer company names were edited to fit onto one line, but names of persons are unchanged. On-line database is at: http://www.opensecrets.org/wdc/index.asp .

ETF GROUP INSURANCE BOARD MEETING- APRIL 20, 2004

The Group Insurance Board established the Dual-Choice Period for health
insurance plans effective January 1, 2005. The dates established are October 11 th
through 29th, 2004.

The Insurance Board also approved the Proposed Guidelines and Uniform Benefits
for the 2005 benefit year.

The most significant change in the Uniform Benefits was to make the level of
benefits in the State Maintenance Plan (SMP) the same as other qualified HMO plans; therefore,
you will not lose any benefits by selecting SMP.

The local public employers have requested deductible options to reduce cost for the
state plan. This option was not pursued at that time; however, based on the survey results,
they recommend the Board authorize ETF to proceed with one option after consulting with
ETF's actuary for a deductible plan.

The actuaries recommended maximum drug co-pays were not approved. The Board
recommended holding them at $300.00 (single) and $600_00 (family).

Rob Weber, ETF Chief Counsel, provided the Group Insurance Board with an
educational topic of their Fiduciary Duty and Ethics.

A trustee must administer the trust solely in the interests of the beneficiaries, and
the following are not owed that duty:

Sub-groups of the beneficiaries
Employers
Authorities appointing trustees
Legislature and other elected officials
Taxpayers

Any public trust fund must be operated by these duties and principles or they can be
legally challenged.

The next Group Insurance Board Meeting will be held on June 8, 2004.
Melvin B. Sensenbrenner,
SEA Retirement & Health Insurance Rep.

The Ad Hoc Committee report on the status of the RRC was the result of our
letter of request to Bill Ford of the Legislative Council for the disposition of the RRC
records. His response was very good. Their Records Clerk indexed all the files by
location. In List #1 were all the documents filed in their office and in List #2 were all
the documents filed at their records center and retrievable within two days time.
Ed Kehl reported on the Annual Conference status. Everything is on schedule,
and 100 registrations have already been received. The Conference is on May 11,2004 at the
American Family Insurance Headquarters. Registration forms were in the March SEA
Newsletter.

I gave the report on the ETF Group Insurance Board Meeting of 4-20-04, as can be
noted in that article in this Newsletter.

The guest speakers were Dave Mills, Executive Director of SWIB, and his Human
Resource Director, Ledell Zellers. They covered the bonus system of SWIB for the
investment staff and how they determined the amount of the value added income for the
year 2003; and the percentage of the value added that was shared with the staff.
The value added 2003 for SWIB: $562 million.

Board award 27.5% of it to staff.

The largest bonus went to the small cap portfolio manager who did 89. 9%--almost
doubled his portfolio of$1.2 billion in 2003.

Hal Rebholz of WREA provided us with a copy of new Medicare changes by AARP and NEA
(National Education Association) condensed version of Medicare law. All SEA Section
Presidents have a copy of the NEA condensed version. There are key issues noted and
everyone should review them.

No controls on runaway drug costs
Threats to retiree health coverage
New tax breaks for the wealthy that could seriously undermine
comprehensive health insurance,

Medicare, itself, is at risk; the law's provisions for privatizing the program.
What has our President and Congress done for us? We all know that privatization
makes things more expensive, the product is poor, and provides for corruption in our
Government!

Where has our Constitutional Government of the people, by the people and for the
people gone!

The next WCOA meeting is scheduled for June 23, 2004.
Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative

SWIB MEETINGS - APRIL 13 & APRIL l4, 2004


The SWIB New Director Search Sub-committee met on April 3, 2004. They
reviewed the list of candidates and reduced the selection to four to be
interviewed in detail. However, they did not close the application process.
The Governor has-appointed a new Board member to replace Allan Sampson,
who recently left the Board. The new member is Steve Bablitch, the ex-Secretary
of the Department of Corrections, and Friday, April 30,2004, the Governor appointed
David Geertsen from Kenosha County to the local government vacancy.

The Board received a report from the investment staff on fixed income; which
has a lower annual income; but it also ha& a lower risk compared to stocks.
Fixed income varies 4.8 to 6.9% and risk of 4.5 to 10.0%
Stock Markets (U.S. & international 8.7% to 1O.3% and risk of l5.7% to 34%
The asset allocation is very important between stocks and bonds. The current
asset allocations are:

Equities 59%
Fixed income 31%
Alternatives 10%
Fixed-Income Group Allocation
Current projected Benchmark

U.S. Bonds 52% 53% 60%
TIPS 8% 12% 10%
Global Bonds 27% 23% 20%
High Yield 5% 6% 6%
Emerging Market 6% 6% 5%

TIPS (Treasury Inflation Protection Securities)
They are overweighed in TIPS because everyone is expecting increased inflation.
They didn't get into overweighting TIPS quick enough.

SWIB Performance Year to Date:

February 29, 2004 March 3l, 2004 Benchmarks
Fixed Fund 3.0% 3.1% 2.8%
Variable Fund 3.9% 2.8% 2.6% S&P 1.7%
Fixed $60.47 Billion $60.47 Billion
Variable $5.92 Billion $5.85 Billion

Keith Johnson replaced the one-half time legal consultant and introduced
him to the Board. He requested the Board to support the 1JW Business School
research project study of corporate gbvernance.
Keith also mentioned that he would review the conflict of interest policies
with the Board and answer any questions they might have.
The next SWIB meeting is scheduled for May l2, 2004.

Melvin B. Sensenbrehner,
S-EA Retirement & Health
Insurance Representative

ETF BOARD MEETING - MARCH 25, 2004

The year 2003 Fixed Fund effective rates are +7_4% and Variable Fund effective rates are
+34%. The dividends for annuitants on the Fixed Fund, which are calc41ated by the actuary,
are set at +1.4%, made possible by the passage of S.B. 344. This was signed by Governor
Doyle and became Act 153 effective March 30, 2004, which sets the dividend minimum rates of
+0.5% or -0.5% when assets fall short. The Variable increase is 25%. Both of the above
dividends are effective May 1, 2004 for the year 2003.

To see the Actuaries' calculation for both the fixed dividend and the variable dividend,
see the WRS 21st Annual Actuarial Valuations of Retired Lives - December 31.2003. All
SEA Board members have copies. Note page 7 for fixed and page 10 for variable.
In the area of customer service, ETF is going to add a third weekly group counseling
session. They are still running behind on retirement counseling because of the budget cuts
by DOA and the Governor. ETF is submitting a 1310 Request to the Finance Committee
to add three new project positions.

Julie Reneau reported on the status of the new Benefits Payments System (BPS).
The current contracts have been terminated because the re-evaluation process to achieve
the ETF goals could not be accomplished in a reasonable time. The current contracts would
require an extension of time through 2006 because their primary line of business had
changed and would have required an increase in cost.

ETF will re-bid the remaining work on the new system to take advantage of current
changes in computer technologies and contractor improved abilities.
SWIB also provided the ETF Board in update of their investments and the
status of SWIB's search for a new permanent Director. For more details on performance,
note the SWIB article in this SEA Newsletter.

The next ETF Board Meeting is set for June 17, 2004.

Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative

ETF ANNUITANT ROUND TABLE - MAY 4, 2004

Sandy Drew and Monica Jaehnig, the WI Private Debt and Private Equity Portfolio
Manager, updated us on SWIB operations and status.

Sandy Drew gave us the up-to-date performance of SWIB Staff for the end of
March. which are reported in the SWIB article in this SEA Newsletter. She also gave us
the new appointments to the Investment Board noted in the above referenced SWIB article.
The Internal Auditor for SWIB has resigned, and they are searching for a replacement.
The SWIB Director Search Ad Hoc Committee is meeting today, May 4th, to
interview three of the four applicants who could make it today. Their goal is to have a
new Director by July 2004.

Monica's presentation covered the Wisconsin debt investments that are made for long-
term investments with good returns. She also handles the Venture Capital investments that
are made by consultants who are located in Wisconsin. From her handout, there are four
companies involved: Mason Wells, Venture Investors, Baird Venture Partners and
Frazier Technology Ventures. The following is the breakdown of funds authorized for
each company:

Authorized # Companies Total SWIB Investments
invested in to date
Mason Wells $25 Jl1illion 9 13,193,460
Venture Investors 20 million .16 10,220,965
Baird Venture Partners 30 million 3 1,648,935
*Frazier Tech. Ventures 60 Jl1illion 0 0
$135 million Total 25,063,359

Frazier has just gotten started in the Madison area and by July will be in full
operation.

Pam Henning reported on the status of ETF backlogs in the service area and
rioted that OOA and the Governor's Office turned down their 1310 Request for (3)
temporary positions.

It appears that the Governor and DOA want to alienate all citizens in Wisconsin
covered by the retirement system, including the 120,000 annuitants, making a grand total
of 526,000 Wisconsin citizens in order to appease the business lobby.
I trust that when we have to wait three months or more for retirement counseling
sessions that we see executives and elected officials taking their proper place in the waiting
lines.

I'm sure the ETF backlog will reach five months by the time the next Legislature approves
the next budget in July of 2005, and they will have saved $0.00 tax dollars. There are NO!
GPR Funds involved in the positions at ETF.

The next ETF Annuitant Round Table meeting is scheduled for August 10,2004.

Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative

Legislative Report
Larry Legro 2nd V.P.

Where in Wisconsin is Jim Doyle? Better we should ask Where in Wisconsin isn't Jim Doyle.
I know Jim Doyle isn't talking to state employees, as evidenced from the well attended
State Engineering Association Day (SEAD) held on 4/28/2004. Your SEA Board was not even
allowed in to talk to his staff around mid afternoon. Of course, we knew Governor Doyle
was in Washington, DC, the night before, and was allegedly returning to Wisconsin after
speaking in the Nation's Capitol regarding getting high paying manufacturing jobs located
within WI. In previous years at our spring Capitol event, former Governor Tommy
Thompson's staff met with us, and so did former Governor McCallum's staff. It was a bit
of a surprise to see that Governor Doyle has a closed door policy. Geez, and we were on a roll
that day too! I guess we are now 2 for 3 in getting minimal access to the Governor's office.

Note to future politicians: This is not a good way to win friends, votes, and possible
campaign contributions. By the way, the TABOR protest from WSEU and AFSCME
along with the TAA strike had little impact upon SEA and our mission that day. We made
appointments with legislators, they did not. When coming to the capitol, call ahead, the
elected officials like to meet you IF they know when to be there.

We also learned at SEA Day that legislators are counting on the stock market to increase, this
alone will bailout the retirement snafu, and the budget deficit. I heard this speculation from
more than one legislator. This is a bit like going to Ho Chunk Casino or being on a "Mission
from God" like the Blues brothers, but this ain't title movies folks, i.e. it appears everyone is
staking the dump in the economy to an anticipated rise in said economy all the while,
holding their rabbit's foot or other lucky charms.

On the lighter side:..
Wizard of Oz creator Frank Baum named the magical land after looking at his filing cabinet
and seeing A-N and O-Z. What is even more profound is that when you only have two filing
cabinets you have to label them so you know which is which. By the Way?. What's the last
word in the Bible? (ANSWER at the end of the article).

I spoke before the Joint Legislative Audit Committee public hearing on 5/4/2004. The
committee was about to request an audit over tIle state car fleet. I informed the committee
about the discrepancy between our reimbursement for using our private vehicle
{currently at .22/mile) and the state's requirement that employees reimburse them
J45/mile PLUS TAX, for each mile for any personal use. I told them any comprehensive
audit should include a look at the thousands of private contracts the state has ($145 million
alone in DOT) and the mileage reimbursements that these contracts cough up to private
contractors who by the way get anywhere from .3O/mile to .50/mile. I spoke about state
employees being flamed in the media over this issue, which is not welcomed by us. I somehow
got one of the committee members, Rep Mark Pocan (D-Madison) to introduce the following
to the Audit: Look at the mileage rates paid to employees AND contractors for business
miles they put on their personal cars. Legislators will not escape scrutiny, as the auditors will
review how much they have been reimbursed for trips from their home districts to Madison.

"It's only fair if we look at others that we look at ourselves," said committee member Rep. Mark
Pocan (D-Madison).

This is just one example of how one person can make a difference. I admit it was a bit scary
going in front of a legislative audit committee. At the end, I spoke openly and

highly of the committee Co-Chair Senator Carol Roessler (R-Oshkosh) at the end of my
statements. She appreciated this compliment, and then requested that I work with the
Legislative Audit Bureau and DOA and give them any knowledge I have over the issue of the
fleet. I agreed to do this.

The DOA internal audit will be finished by June 1, 2004 and the Legislative Audit Bureau hopes
to complete theirs before the next biennial budget debates by 12/31/2004 (in 6 mos). If any
SEA member has input or ideas on this issue (or others) please contact an officer. By the way, I
took a partial day of vacation to appear on behalf of SEA and myself at this hearing.

A few people were noteworthy of awards at our State Engineering Association Day on
4/28/2004, the 6 Annual event we have hosted. We had two members bring their plaque and
have a photograph taken with Senator John Erpenbach (D-Madison), which we will post
these on our web site at www.wisea.org. Space, and technical difficulties prevent the
photos from being put into this printed newsletter. The three Major awards received by
SEA members are as follows:

Raj Vakbaria - 2002 John Brogan
Environmental Achievement Award.

He is an Environmental Engineer Advanced, Bureau of Air Management, DNR. The award is
for outstanding achievement towards environmental protection, helps create jobs and
economic growth while allowing business to locate and remain within the state, thus keeping
and creating jobs.

John Delaney - 2003 Grading Award

He is Project Manager C.E. Advanced WIDOT. Award was given at the 1/20/2004
Contractor/Engineer Conference dinner by the WIDOT and the WI Transportation Builder's
Assoc. This is for excellence in grading and highway construction on WI DOT projects
which benefits all of WI citizens and tourists.

Mary Carter - Lynda Weise Award

She is an Air Management Engineer Advanced for DNR at the LaCrosse Service Center.
Awarded to her on 4/1/2004 by the DNR Bureau of Cooperative Environmental Assistance, for
commitment and pursuit of environmental excellence that distinguishes the service and
memory of the late Lydia Weise. Mary was recognized and awarded for her work on the
cooperative Environmental Agreement with the Northern Engraving Corp. This work was an
innovative approach to reducing the burden of environmental regulations. The agreement and
associated air pollution control permit reduced record keeping requirements and serve. to make
the required records more accurate and meaningful. It also creates faster response times
from the DNR created flexible construction permitting requirements, while significantly
reducing air pollution and waste beyond compliance minimums.

On behalf of myself, and your Association, SEA, WE thank the three of you for your
professional efforts. It is interesting to note that the Legislative Audit Bureau, (the meeting I
spoke at and talked about in the beginning of this article) just released their audit of Air
Management, and Secretary Hassett spoke to this committee on 5/4/2004 about DNR's air
management programs. The legislature is totally committed to the DNR permitting process to be
streamlined in accordance with the "Jobs Creation Act". Staff reductions and layoffs will
not be an acceptable excuse for the DNR (or any other agency) to explain why things are backed
up or slow in developing regarding the work product. According to Senator Carol Roessler
(R-Oshkosh) speech, the Governor's Secretary's and their assistants are the Head
(brains) and the staff are the Body (the part the brain commands). The legislators are watching
what the head does to get more production out of the body. Stay tuned, this will become more and
more defined as we pass forward.

Continue to be as professional as you can be. You are under the microscope as of late. State
employees as I said are being flamed left and right. Keep this in mind the rest of this year.
Regarding the last word?
Amen.