comments

SJWD ratepayers upset over staff compensation

Granite Bay residents think employee benefits should reflect private sector struggles
By: Sena Christian, The Press Tribune
-A +A

When it comes to government agencies, water districts often fly under the radar.

Granite Bay resident Lianne Peterson says this allows water districts to make decisions with limited public input, sometimes to the detriment of ratepayers. She points to the San Juan Water District — her husband, Dave Peterson, serves on the board of directors.

Since 2007, the district has had zero layoffs, zero furloughs and zero changes to health and retirement benefits, which are paid in full by the district. But some point out during that same timeframe, customers have seen jumps in their rates as high as 9 percent a year.

Lianne Peterson said while employees pack board meetings when compensation actions are on the agenda, only a handful of ratepayers show up.

“I think it gets out of hand because people don’t show up to meetings,” she said.

The board will hold its bimonthly meeting at 7 p.m. Monday, May 9. Proposed changes in personnel compensation will be up for discussion.

San Juan Water District provides drinking water to more than 265,000 people in portions of Placer and Sacramento counties. The district serves retail customers in Granite Bay, east Roseville and the northeast area of Sacramento County, and wholesales water to other districts.

General Manager Shauna Lorance says the water district’s 45 employees operate efficiently and deserve the compensation they receive.

In the 1970s and 80s, the agency had 50 employees, but that number decreased to 45 in the 1990s, where it has remained although services have grown.

“There is no physical way we can lay off people,” Lorance said.

She points to the district’s wholesale component, which has 18 people. That component is capable of treating 120 million gallons of water a day. She said she hasn’t found another agency able to do that with fewer than 60 employees.

“We’re running a wholesale agency with 18 people, which is unheard of,” Lorance said.

Some ratepayers are upset about the district’s incentive award program. Last year, more than 70 percent of employees got between a 1 percent and 10 percent bonus. Lorance says that’s justified because the streamlined district’s employees are “doing more than expected.”

“In good (economic) years, people ask, ‘Why are you working for a public agency?’" she said. “In bad years, people look at public agencies and say, ‘Look what they’re making.’”

Staff recommended the incentive award program not be funded for the 2011-12 fiscal year. The board has not yet adopted the budget.

The proposed budget projects combined — wholesale and retail — revenue of $15.4 million and expenses of $11.5 million. The staff has recommended no rate increase for the 2011-12 year. Ultimately, that decision rests with the board.

In 2008, retail rates went up 9 percent. The rate increased 9 percent in 2009, 7 percent in 2010 and 2 percent in 2011. Those increases paid for capital improvement projects, Lorance said.

Currently, employee compensation packages include 100 percent employer paid pension contributions and 100 percent paid health, vision and dental insurance for employees and dependents.

Mark Vincenzini, a Granite Bay resident who works as a chief financial officer, says these benefits don’t reflect current economic conditions, when many businesses are struggling to survive.

“In an environment where you have a captive audience for your revenue and you don’t have to compete, there’s a trusting nature for how you operate that business,” Vincenzini said. “(SJWD) needs to realize the kind of economic environment we’re in.”

During a workshop held Dec. 14, San Juan Water District’s Personnel Committee suggested changes to employee compensation packages.

Since 2007, the water district has paid both the employer and employee contribution to the Public Employee Retirement System (PERS).

The district offers the 3 percent at 60 formula, which means an employee retires at age 60 with a pension equal to his highest year salary (plus bonus) times the number of years of service times 3 percent. For employees hired after February 2009, the average of the three highest years is used.

For this formula, PERS charges 8 percent of base pay for the employee portion and about 13 percent for the employer portion for a total of 21 percent of base pay. According to the committee, most public agencies pay only the employer share.

Lorance said when the district originally conducted its salary survey, it reduced salaries 8 percent to save on payroll taxes — this is the percentage of the employee portion the district pays to PERS.

She said the board might vote to stop paying the employee share and raise salaries 8 percent to be more transparent.

During the April 27 meeting, Granite Bay resident Ken Roberts recommended cost-cutting measures related to employees’ compensation. He said the response from board member Pamela Tobin was that SJWD was “‘lean, mean and fiscally prudent,’” and his suggestions were “‘mean spirited.’”

“Based on the current economic climate, pending state and federal water rights legislation, current and future environmental agency lawsuits, and current SJWD salary, health benefit and retirement packages, which far exceed those of the private sector, I strongly disagree,” Roberts told the Press Tribune. “It is my contention that since 2007, SJWD has financially survived solely because of the continued rate increases to their unsuspecting customers.”

Roberts says the district needs to save for “big battles” likely to come with regulatory changes down the pipeline.

Lorance agrees that San Juan Water District will face regulatory challenges in the near future, which means, she said, she needs the staff to be able to handle those changes.

Sena Christian can be reached at senac@goldcountrymedia.com.

----------

San Juan Water District overview

Customers: 265,000

Proposed 2011-12 budget: Combined retail and wholesale budgets. Projected revenue: $15.4 million. Projected expenses: $11.5 million.

Top paid employees:
Shauna Lorance, general manager: $164,628
Keith Durkin, assistant general manager: $152,832
Mary Morris, finance and administrative services manager: $132,888
Rick Hydrick, operations manager: $125,892
Rob Watson, engineering services manager: $113,832

----------

San Juan Water District board meeting

When: 7 p.m. Monday, May 9

Where: SJWD, 9935 Auburn Folsom Road in Granite Bay

Info: www.sjwd.org