Court Opinion

ID: 836617
Source: CourtListenerOpinion
Date Created: 2013-03-01 21:14:13.993718+00
Date Added: 2024-06-11T15:25:52.832264
License: Public Domain

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."

Return to previous location.

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.

Return to previous location.

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.

Return to previous location.

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. 

Return to previous location.

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.

Return to previous location.

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."

Return to previous location.