Title: Dale v. Myers

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: January 29, 1998

IN THE SUPREME COURT OF THE STATE OF OREGON

ALICE DALE,

		Petitioner,

	v.

HARDY MYERS, Attorney General
State of Oregon,

	Respondent.

_________________________________________________________________

BILL SIZEMORE

	Petitioner,

     v.

HARDY MYERS, Attorney General,
State of Oregon,

	Respondent.

(SC S44478, S44482)

	In Banc

	On petitions to review a ballot title.

	Argued and submitted November 18, 1997.

	Lynn-Marie Crider, Salem, argued the cause and filed the
petition for petitioner Alice Dale.

	Gregory W. Byrne, Portland, argued the cause and filed the
petition for petitioner Bill Sizemore.

	Robert Rocklin, Assistant Attorney General, Salem, argued
the cause for respondent.  With him on the answering memorandum
were Hardy Myers, Attorney General, and Virginia Linder,
Solicitor General, Salem. 

	FADELEY, J.

	Ballot title certified as modified.  This decision shall
become effective in accordance with ORAP 11.30(10).

	Van Hoomissen, J., dissented and filed an opinion.

	Durham, J., filed an opinion concurring in part and
dissenting in part.

		FADELEY, J.

		Petitioners separately challenge the ballot title
proposed by the Attorney General for an initiative petition.  
This court consolidated their challenges for argument and
decision.  Both petitioners are electors.  The arguments
presented to us concerning deficiencies in the proposed ballot
title were included in their comments on the initial draft ballot
title and therefore properly are before us.  See ORS 250.085(6)
(in general, requires elector to submit related written comments
to the Secretary of State before this court may consider
elector's arguments challenging ballot title on those points). 

		The Attorney General certified the following ballot
title:

"AMENDS CONSTITUTION:  STATE AND LOCAL GOVERNMENTS MUST

              CONTRACT OUT CERTAIN GOVERNMENT SERVICES

		"RESULT OF 'YES' VOTE:  'Yes' vote requires
governments to accept certain lower-cost bids to
perform government services.

		"RESULT OF 'NO' VOTE:  'No' vote keeps system
under which governmental services may, but need not, be
contracted out.

		"SUMMARY:  Amends constitution.  Currently, state
and local governments may, but need not, contract out
certain functions to private sector.  Measure generally
requires governments to accept, or submit to voters at
next election, private sector or other government bids
to provide same or similar services for 20 percent
less.  Governments annually must measure, publish,
quality and cost, including employee compensation, of
providing each service.  Core government functions
exempted; other services exempted by 2/3 vote of each
house, Governor's approval.  Forbids union contracts
restricting contracting out.  Other provisions."   

		Both petitioners challenge the "yes" and "no" result
statements.  Petitioner Sizemore also challenges the sufficiency
of the caption, but does not challenge the summary.  Conversely,
petitioner Dale does not challenge the caption, but does
challenge the summary.  

		The proposed measure for which the ballot title is to
be used would amend the constitution.  A general understanding of
the text of some of the changes that would be made by the
proposed measure is necessary to a consideration of the
challengers' arguments. 

		The measure would adopt a plan for transferring a
current governmental service to a private entity that may propose
to perform that service.(1)  Each such proposal to transfer
services initiates a two-step process.  

		In the first step, a private entity that does not
presently provide the governmental services in question
approaches the agency of government that does provide that
service and makes a proposal to transfer the provision of the
service from the government agency to the private entity.  The
measure accomplishes that transfer through subsection (2)(a),
which provides that "[a] private sector entity may submit a bid
to provide the same or similar service" as that provided by the
government entity. 

		The government entity then compares the cost that is
promised by the private entity for providing each unit of the
service with a precomputed and published governmental cost for
each unit.  That comparison is to be conducted in the manner
directed by other provisions of the measure.  The measure
contains instructions and definitions concerning computation of
the government's cost, and other instructions for calculation of
the private entity's cost to perform the same functions. 
Subsection (6) requires that, for purpose of the comparison,
government costs be stated in terms of an hourly wage rate for
the government to provide the service.  That hourly rate is
required to include the cost of health insurance and retirement
benefits, if any are provided by either the government or the
private entity.  The comparison is used to determine whether the
private entity proposal promises to provide a savings in
comparison to government costs.  The measure prohibits the
legislature from passing laws regulating hourly wage rates that
might impact the calculations of hourly cost that the proposing
entity would pay to its workers to provide the service.

		The measure's directions for making the cost comparison
also require that whatever governmental facilities are presently
used to provide the service must be made available to the private
entity.  The calculated cost to the government must be increased
by adding market rental rates to that cost for those facilities,
together with an additional assumed amount for taxes that a
private party who owned the government facilities would have to
pay.  

		When a service is to be transferred to a private sector
entity, "the land, buildings and equipment shall be made
available to [the entity] for rent or lease at market value." 
Subsection (7).  Thus, the cost comparison may be based only on
the assumption that the private entity is using publicly owned
facilities at that rental amount.  No costs associated with
transferring the service for the first year of the transfer are
to be included in the comparison of costs; that is, the mandates
of the initiative apply whether or not cost savings are
realizable in the first year of the transfer of services. 
Subsection (2)(b).

		After the proposal is received and the cost comparison
is made, the government agency may "accept the private sector
bid," if doing so "could reasonably be expected to provide the
service" at one of the rates of savings stated in the measure.(2)   

		If the government entity that now is providing the
service does not "accept the bid" (i.e., does not accept the
private entity's proposal to perform the service), a second step
is required under the measure.(3)  In that step, the government
entity shall "submit to the voters at the next election the
option of contracting out the provision of the service to the
lowest bidder that could reasonably be expected to provide the
service" at the stated savings rate.  The measure requires that
the ballot title for that election contain information clearly
disclosing the "percentage and amount of money which would be
saved by contracting out the provision of the service."(4) 

 			Only when three prerequisites are met does the proposed
measure "require" a government entity to accept a proposal to
transfer the service to a private entity.  The third of those
prerequisites is stated in subsection (19) as: "the voters must
have approved the [transfer of the] service."  

		The measure provides for exempting a few services from
the measure's coverage and provides a mechanism for temporary
exemption of others.  Another of the prerequisites is that the
legislature has not exempted that particular service from
transfer to a private entity.  Subsection (13)(a).  

		The measure would add those provisions and others to
the state constitution and authorizes private actions in court to
enforce the measure.  

		We turn to a consideration of petitioners' challenges
to the ballot title.  Captions must identify the "subject" of a
measure.  ORS 250.035(2)(a).  Petitioner Sizemore argues that the
caption implies that neither a government entity nor the voters
have any option to refuse to contract out government services and
that that implication is incorrect.  We agree.  The measure does
not require acceptance of the proposal.  The government entity
may refer the proposal for a vote instead, and the voters may
approve or reject the proposal.  Unless the circumstances
specified in the measure are met, the measure does not require
contracting out.  And the coverage of the measure is subject to
exemptions enacted under the terms of the measure.  We therefore
modify the caption to read:

	AMENDS CONSTITUTION: UNDER SPECIFIED CIRCUMSTANCES,     
 GOVERNMENTS MUST CONTRACT OUT CERTAIN GOVERNMENT
                   SERVICES.

		Both petitioners challenge the statutory sufficiency of
the "yes" and "no" result statements.  Petitioner Dale argues
that the proposed "yes" result statement is "misleading," because
the wording incorrectly suggests that the measure merely enacts
in the constitution the present competitive bidding system that
now is employed by many government agencies to accomplish a given
project.(5) 

		Dale argues further that the measure would permit a
single private entity to initiate a transfer of a governmental
service without any competitive bidding process, because, under
the measure, the government must react to and accept or reject a
proposal initiated by a single entity, provided that the proposal
promises a "cost saving" under the calculations mandated in the
directions and definitions of the measure.  For that reason, Dale
argues that the term "bid" is inaccurate and should be replaced
by the word "proposal."  

		The Attorney General argues in response that the voters
will not be misled by the "yes" result statement because, 

	"to the average voter, the word 'bid' does not connote
the existence of a 'competitive bidding process.'"

That argument does not comment on the voters' understanding of
the word when accompanied by the modifiers that are part of the
proposed "yes" result statement, i.e., "lower-cost bids to
perform government services."  The word "bid," here used as a
noun, in its context means an "offer of a price" that the bidder
"will take for something to be done or furnished."  Webster's
Third New Int'l Dictionary 212-13 (unabridged ed 1993).  The word
"lower" is a comparative term.  The comparison is relative to
some other thing.  As defined in Webster's, "lower" means
"relatively low in * * * amount."  Id. at 1341.

		Under those common meanings of the words in the
proposed "yes" result statement, the voter very likely would
think that the present competitive bidding system is involved,
rather than a newly created system as described in the measure. 
Accordingly, Dale's challenges are well taken. 

		Petitioner Sizemore also argues that the proposed "yes"
result statement is inaccurate.  He points out that the measure
does not require the government agency providing the service to
accept the private entity's proposal.  For the reasons that we
expressed with respect to the caption, we agree.  The "yes"
result statement fails to comply substantially with its statutory
purpose.  ORS 250.085(5) and ORS 250.035(2)(b).

		Accordingly we modify the "yes" result statement:

		RESULT OF A "YES" VOTE: "Yes" vote requires
governments to contract out certain government services
if specified conditions are met.

The "no" result statement will be conformed to reflect that
change, as follows: 

		RESULT OF A "NO" VOTE: "No" vote retains present
statutory system of competitive bidding at option of
government providing service.

		Petitioner Dale also challenges the accuracy of the
description of major effects in the summary.  She contends that
the provision in the proposed measure requiring a subsequent
referendum to reduce the savings rate when that was the rate on
which the right of the private entity to have its proposal
considered in the first place is a very significant effect of
that measure.  She argues that it is significant, because it
changes the present constitutional structure and authority for
deciding whether to take an issue to a referendum.  Dale's
argument in support of the challenge to the summary also notes
that the referendum would change from 20 percent to 10 percent
the rate of savings that a private entity's proposal must promise
in order for that proposal to be required either to be accepted
by a government agency or submitted to a vote, but that the
potential change in the savings rate is not mentioned in the
proposed summary.  The Attorney General answers that those
provisions are not "key" aspects of the measure.  

		The statutory standard of review is "substantial
compliance" with the statutory requirement that the summary be an 
"impartial statement" that summarizes a proposed measure and its 
major effects.  ORS 250.085(5), 250.035(2)(d).  We agree with
petitioner Dale that the referendum requirement is an effect of
the measure, but do not see it as so major as to require
overruling the Attorney General's decisions about which effects
to include within the established 85-word limit.

		A conforming change in the summary is necessary,
however, to avoid the use of the word "bids" that is misleading
as noted above.  We substitute the word "proposals."  We modify
the summary to that extent only.

		Accordingly, for the reasons stated, we modify the
proposed ballot title and certify for use the following ballot
title:

AMENDS CONSTITUTION: UNDER SPECIFIED CIRCUMSTANCES,     
 GOVERNMENTS MUST CONTRACT OUT CERTAIN GOVERNMENT       
                   SERVICES.

		RESULT OF A "YES" VOTE: "Yes" vote requires
governments to contract out certain government services
if specified conditions are met.

		RESULT OF A "NO" VOTE: "No" vote retains present
statutory system of competitive bidding at option of
government providing service.

		SUMMARY: Amends constitution.  Currently, state
and local governments may, but need not, contract out
certain functions to private sector.  Measure generally
requires governments to accept, or submit to voters at
next election, private sector or other government
proposals to provide same or similar services for 20
percent less.  Governments annually must measure,
publish, quality and cost, including employee
compensation, of providing each service.  Core
government functions exempted; other services exempted
by 2/3 vote of each house, Governor's approval. 
Forbids union contracts restricting contracting out. 
Other provisions.

		Ballot title certified as modified.  This decision
shall become effective in accordance with ORAP 11.30(10).

	Dale/Sizemore v. Myers

VAN HOOMISSEN, J., dissenting.

		I respectfully dissent.  In my view, the Attorney
General's certified ballot title substantially complies with the
requirements of ORS 250.035.  ORS 250.085(5).

	Dale/Sizemore v. Myers

	DURHAM, J., concurring in part and dissenting in part.

	I join the majority in its conclusion that, in some
respects, the Attorney General's ballot title requires amendment. 
I do not agree with the modifications that the majority approves
for the certified ballot title or the reasoning that the majority
adopts to justify those modifications.

	The Attorney General's caption states:

"AMENDS CONSTITUTION: STATE AND LOCAL GOVERNMENTS
MUST CONTRACT OUT CERTAIN GOVERNMENT SERVICES" 

	The majority expresses concern about the accuracy of
the term "must" in that caption because, it says,

		"The measure does not require acceptance of the
proposal.  The government entity may refer the proposal
for a vote instead, and the voters may approve or
reject the proposal.  Unless the circumstances
specified in the measure are met, the measure does not
require contracting out."  ___ Or at ___ (slip op at
7).

	I disagree with the majority's analysis of the caption. 
Contrary to the majority's suggestion, the Attorney General's
caption does not state or imply that the measure would require a
government entity to accept a proposal to subcontract a
government service.  Moreover, the majority does not address the
significance of the term "certain" in the Attorney General's
caption.  That term invites the reader to read further in the
ballot title to learn more detail about the measure's effects,
such as the government services that are subject to the measure's
contracting out policy.  It is the function of the summary, not
the caption, to describe the measure's major effect.

	The majority approves the Attorney General's summary.(6) 
That summary describes the government services to which the
measure does not apply ("Core government functions exempted;
other services exempted by 2/3 vote of each house, Governor's
approval.").  The summary also describes the procedural
prerequisites that must occur in order to impose on government an
obligation to subcontract public services to another entity: 

	"Measure generally requires governments to accept, or
submit to voters at next election, private sector or
other government bids to provide same or similar
services for 20 percent less."  

The Attorney General's caption correctly identifies the measure's
subject, and correctly leaves to the summary the task of
describing the measure's effects, including the conditions that
make subcontracting mandatory.

	The majority amends the caption to state:

	"AMENDS CONSTITUTION:  UNDER SPECIFIED
CIRCUMSTANCES, GOVERNMENTS MUST CONTRACT OUT CERTAIN
GOVERNMENT SERVICES."  ___ Or at ___ (slip op at 7).

	The majority's caption incorporates the phrase "under
specified circumstances," but that phrase, like the word
"certain," says only that the duty to subcontract is not
absolute, and tacitly encourages the reader to examine the ballot
title in greater detail to learn more about the "specified
circumstances."  The Attorney General's ballot title already
conveys that information.  The majority's certified caption
identifies the same subject as does the Attorney General's
caption.  The addition of the phrase "under specified
circumstances" does not alter that fact.  The Attorney General's
caption adequately describes the subject of the measure, and
passes muster under this court's "substantial compliance"
standard of review.  ORS 250.035(2)(a), 250.085(5).

	For the reason identified by the majority, the Attorney
General's use of the phrase "lower-cost bids" in the "yes" vote
result statement is not accurate and, for that reason, the
statement fails to comply substantially with ORS 250.035(2)(b). 
However, the majority fails to disclose that the Attorney General
anticipated that potential problem, and offered the following
alternative "yes" vote result statement:

		"RESULT OF A 'YES' VOTE:  'Yes' vote requires
governments to accept certain unsolicited proposals to
perform services."  

	The Attorney General's submission of that alternative
wording is commendable.  Because the preparation of a ballot
title, in large measure, is the Attorney General's task, and is
subject to review in this court only for substantial compliance
with statutory standards, this court should not disregard the
Attorney General's advocacy for alternative wording to cure a
potential problem in the ballot title.  In my view, the Attorney
General's suggested alternative "yes" vote result statement is
correct, and I would certify it.

	The majority alters the Attorney General's "no" vote
result statement.  It claims that it does so to reflect the
change that it makes to the "yes" vote result statement. 
However, the majority's altered "no" vote result statement does
not reflect the majority's modifications to the "yes" vote result
statement.  In addition, the majority does not explain why the
Attorney General's "no" vote result statement fails to state
adequately the result of rejecting the measure even in light of
the majority's changes to the "yes" vote result statement.  It
appears that the majority chooses to alter the Attorney General's
"no" vote result statement simply to make it "better."  That is
not a sufficient reason to justify changing the Attorney
General's "no" vote result statement.  Accordingly, I disagree
with the majority's alteration of the "no" vote result statement.

	Petitioner Dale challenges the Attorney General's use
of the term "bids" in the summary.  I would conform the summary
to the change made in the "yes" vote result statement by
eliminating the term "bids" and substituting the words
"unsolicited proposals."  To create room for that change, I would
strike the extraneous words "same or" from the third sentence of
the summary.

	Petitioner Dale also criticizes the Attorney General's
summary because it fails to disclose that the measure would
compel the legislature to refer to the people a measure that
would lower the minimum savings threshold from contracting out
from 20 percent to 10 percent.  She urges the court to add the
following sentence to the summary:  "Legislature must propose
constitutional amendment reducing savings requirement."

	That suggested sentence accurately states a major
effect of the measure that the Attorney General's ballot title
fails to mention.  The Attorney General understates the problem
by arguing that the possibility that the savings threshold might
change is not a major effect.  The focus of concern is that the
measure, if adopted, will compel the legislature to refer another
constitutional amendment to the people.  In my view, that is an
important modification of the legislature's discretionary power 
under the state constitution to refer laws to the people, and it
is a major effect that the summary should bring to the voters'
attention, if possible.  However, the Attorney General could
include that information only by sacrificing descriptions in the
ballot title summary of other important effects of the measure. 
This is an instance in which the statutory 85-word limit, ORS
250.035(2)(d), prevents disclosure of all of the measure's major
effects.  For that reason, I cannot say that the Attorney
General's summary fails to comply substantially with statutory
requirements because it does not mention the point that
petitioner Dale raises.

	I would certify the Attorney General's ballot title
with the modifications discussed above to the "yes" vote result
statement and summary.  Accordingly, I concur in part and dissent
in part from the majority's decision.

1. 	Subsection (9) also provides that "[a] government
entity shall not be prohibited from submitting a bid to provide a
service under this section, but shall not be given preference or
unfair advantage over a private sector entity."

2. 	For the first two to four years, a 20 percent rate of
savings calculated under the measure is to apply. The measure
mandates that two to four years after adoption an election must
be held to vote on changing that rate to 10 percent.

3. 	This step is conditioned on a finding that the proposal
"reasonably" could be expected to produce the then effective rate
of savings, based on the cost comparisons as they are structured
by the measure.

4. 	As noted above, the measure employs special directions
and definitions that must be used to calculate whether there are
savings and, if so, the amount thereof. 

5. 	In that statutorily controlled system, one qualified
contractor is selected from among a number of bidders competing
with each other.  The government initiates the bidding process
and selects those projects for which it will solicit bids.  ORS
chapter 279, especially ORS 279.015.

6. 	The majority changes the term "bids" to "proposals," in
the third sentence of the summary.  As I discuss below, "bids" is
incorrect in this context and should be changed to "unsolicited
proposals."