Byline: Karen McCowan The Register-Guard

The Eugene Water & Electric Board will pay more than $3 million in retirement benefits to hundreds of current and former employees under a settlement of two lawsuits approved Tuesday by Lane Circuit Court Judge Charles Carlson.

Six EWEB

retirees and a longtime employee still working for the city-owned utility filed suit in 2003, claiming that EWEB had reneged on promises to continue providing health insurance to its workers after their retirement at little or no cost to them. After a 2004 trial, Carlson ruled in favor of the employees, a decision that was upheld by the Oregon Court of Appeals early this year.

Meanwhile, other retirees and employees filed a class action lawsuit in 2005. It was put on hold pending resolution of the 2003 case, which EWEB was preparing to appeal before the Oregon Supreme Court.

Tuesday's settlement, mediated by U.S. District Court Judge Michael Hogan, resolves both cases. It guarantees a range of EWEB subsidies for retiree medical insurance premiums for 313 current employees and 414 retirees. The subsidy amounts depend on each employee's length of service and/or retirement date. It does not affect retirement benefits for any employees hired after 2002.

The settlement is not expected to directly affect EWEB ratepayers, spokesman Lance Robertson said Tuesday.

"Our board hasn't decided exactly how they're going to pay for it," he said. "The most likely scenario is that they'll take it from cash reserves. We do have enough money (there) to cover that. They also could decide to borrow the money and amortize it over time so that it would have a negligible effect on rates. I'm sure it will be part of their budget deliberations next year."

Robertson noted that the settlement included an agreement with the employees and retirees that they will use state Public Employee Retirement System insurance, not EWEB insurance, for secondary coverage once they become old enough to receive federal Medicare coverage as their primary insurance.

"That's a huge deal, because it reduces EWEB's responsibility for an unfunded liability from a projected $80 million to $35 million," he said.

Attorneys Art Johnson and Doug Schaller, who represented the 728 past and present employees covered by the class action suit, said the settlement affects virtually every EWEB employee - or their surviving beneficiary - hired before Jan. 1, 2003. Among them are union-represented line workers. The International Brotherhood of Electrical Workers Local 659 supported the class action effort, but the settlement will not affect its ability to negotiate retirement benefits in the future, Johnson said.

He credited Hogan with helping the parties resolve the long-standing, complex dispute.

"Mediation has become a very big part of law practice in the United States in the last 20 years, and he has been one of the leaders in this," he said of the Eugene-based federal judge. "He's been very effective and he's pretty dogged."

EWEB General Manager Randy Berggren said the settle ment is a fair resolution of the ongoing legal dispute resulting from changes in post- retirement health care benefits the utility's elected commissioners approved in 1990 and 2003.