Judge to rule soon on legality of changes Gov. Bevin made to KRS board

07/20/2016 08:05 AM

FRANKFORT – After a 4 1/2 hour marathon hearing on Tuesday in Franklin Circuit Court, in the lawsuit intitiated by by Thommy Elliott and Mary Helen Peter, members of the former Kentucky Retirement Systems Board of Trustees, Judge Phillip Shepherd told attorneys that he will make a ruling soon on a number of executive order changes that Gov. Matt Bevin made to the Kentucky Retirement System Board of Directors including the termination of Board Chair Elliott.

Other changes include, through the executive orders, adding four new members to change the total from 13 to 17, moving the KRS professional staff into the the state personnel system, and giving the governor the power to name the board chair and vice chair, along with requiring that KRS post all management contracts and fees online for public review.

Under Bevin’s changes, 11 trustees will be appointed by the governor, six trustees who are independently elected by public employees and retirees, will remain on the board.

At the beginning of the hearing, Shepherd ruled that Attorney General Andy Beshear could join the suit which questions whether Bevin has the authority to make changes to the makeup of the board.

“What the governor is doing here is ignoring specific laws passed by the legislature,” Beshear said. “The legislature is only allowed to delegate that authority under what’s called non delegation doctrine, if there are strict standards that limit discretion.”

The lone witness who testified at the hearing was current KRS Executive Director Bill Thielen who will be retiring on September 1.

Thielen said that he is fearful that KRS could suffer irreparable harm if Bevin’s orders are implemented, adding that roughly 65 employees are eligible for retirement and may elect to do so if KRS staff are moved into the state personnel system, causing a huge loss of the most experienced employees.

Beshear continues to believe that the main issue at hand is Bevin is violating the state
Constitution with his executive orders.

“Anytime you violate the Constitution, it causes irreparable harm to the people of Kentucky,” Beshear said. “Then, I think you saw significant testimony on the harms and the costs to the taxpayers and others that it will have caused.”

Bevin’s general counsel Steve Pitt argued that Bevin does have the power through statute to remove any board member with or without cause, and it does not matter why the governor did it.

“Our position is that it doesn’t matter, and we’re wading very, very, deeply into the water if we get to the point where anyone can come in and litigate the discretionary decisions of the governor,” Pitt said. “Under Section 69 of the Kentucky Constitution, the governor is the supreme executive power in the commonwealth, that is subject ultimately to the legislature.”

Shepherd delayed deciding on whether to allow state Treasurer Allison Ball to intervene in the case.

Ball wants to stop the board members from using $50,000 in legal funding from Kentucky Retirement Systems to pay for Elliott’s legal fees.


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