Ironhouse Should Postpone Rate Increase Vote

The Ironhouse Sanitary District (ISD) and it’s Board has some explaining to do and I would urge ISD’s Board to delay its vote on a rate increase to a more convenient time to ratepayers. Hosting a rate increase meeting on the same night as the June 5 Primary is inconsiderate, sneaky and just flat out wrong.

A notice went out on Tuesday, May 22 notifying rate payers that the ISD Board will vote on a fee increase by $58 to a total of $650. I believe this is not a coincidence, but rather an opportunity to raise rates with few people being able to oppose this plan. This vote needs to be rescheduled.

Ratepayers deserve more information while I heard through the grapevine that this rate increase is to pay for salary increases—it should be noted that reserves have already been use to “catch up” on paying pensions.

This rate increase takes just five votes to increase rates whereas the City of Oakley would have to take it to a citywide election. I’d urge you to speak with the board immediately and urge the Board to reject this proposed increase.

The Board of Directors who will be voting on your rate increase includes:

  • Doug Hardcastle
  • Chris Lauritzen
  • Michael Painter
  • David Huerta
  • David Contreras

If you know these board members, contact them, politely engage with them and seek justification as to why they may vote for an increase. Ask if its for staff salary increases. Get engaged!

But what is sad about this entire thing is the rate payers have been given no justification as to why rates are being increased. Are there new connections that we do not know about? If you look back historically, in 2008, ratepayers were paying just $465.

What makes this increase discussion and timing so silly is just last month the Board and General Manager were considering spending $5 million on a solar project with a 15-20 year return. If they can spend $5 million on solar, they do not need to hit rate payers with an increase.

Bet let’s just say the rate increase is needed, why not just tap into those reserves that rate payers already pay for? Why issue an increase when the money is already there?  I’ve tried to get answers on their reserve; I’ve heard numbers from $10 million all the way up to $27 million—no one seems to know.

According to the Notice, The proposed increase is within the limit established by Ordinance No. 30 and Order No. 07-31 of the Ironhouse Sanitary District Board which established a maximum rate of $680 per equivalent service unit (ESU) and which was adopted on June 5, 2007.

I do not see Ordinance No. 30 and Order No. 07-31 on their website. The biggest problem I see with ISD is their transparency and lack of information available.

Very little is given on their agenda or minutes. I looked for their 2011-2012 budget and its listed nowhere on their website. Their 2010 budget is available, but they have their budget broken down by many categories and its unclear what their reserves actually are—now they are not breaking the law, they are just being sneaky!

I sent Tom Williams, ISD general manager, an email on May 23 and on May 29 with no response.

I asked him a series of simple questions ranging from what are your current reserves for the last three years, what has been the rate increases for the last five years, and what exactly are the board benefits? Oh those silly board benefits, let’s not forget about those.

If you can recall, the 2010-2011 Grand Jury Report: No. 1104 stated that Ironhouse Sanitary spends $94,000 on its five supervisors—or $18,800 which includes lifetime medical benefits should a board member serve for a period of time.  It’s unclear if this includes all of their travel and expenses.  To put that in perspective, City of Oakley Councilmembers make just $5,700.

Common sense says postpone the vote. I doubt Ironhouse considers it.

Below, I’ve copied and pasted the Consolidated Response from the Grand Jury Report—to read the full report, you can click here to read Grand Jury Report No. 1104.

 

Consolidated Response for Ironhouse Sanitary District

Finding # 1: Sixteen cities and eighteen special districts provide benefits to their elected leaders in some fashion. These benefits may include salary, meeting fees, health care insurance costs, pension or deferred compensation, life insurance premiums, cell phone usage, and internet connections.

Ironhouse has not independently verified Finding #1, and, if accurate, has no reason not to agree with it. With respect to Ironhouse, its Directors do not receive a salary and are compensated in the amount of $170.00 for each meeting attended by the Director, up to a maximum of six meetings in any calendar month. (Health & Safety Code §6489). Please see the attached Local Government Compensation Report for Calendar Year 2009, State Controller’s Office – Division of Accounting and Reporting, which is the most recent year available and lists Director Wages Subject to Medicare.

Directors have the option to receive Health, Dental & Vision benefits, as listed in the above referenced report. Finally, Directors have the option to participate in a Deferred Compensation Program, as is also shown in the above referenced report.

Directors do not receive life insurance premiums payments, cell phone usage, and internet connections benefits.

Recommendation # 1: All cities and special districts should conduct an annual public review of compensation provided to their respective elected Councils and Boards. This review should include such items as salary, meeting fees, health care insurance costs, pension deferred compensation, life insurance premiums, cell phone usage, and internet connections. The public review should address whether or not changes in compensation are warranted.

As part of its standard annual budgeting process, the Board of Directors of Ironhouse complies with Recommendation #1. The Ironhouse annual budgeting process is open to the public and is publicized through public hearings noticed in accordance with the Brown Act. At these meetings all compensation provided to the members of the Board of Directors is reviewed and discussed by the Board, staff and members of the public in attendance.

Finding # 3: Eight special districts spend more than the county-wide average ($13,313) for salary and meeting fees. They are: Central Contra Costa Sanitary District, Contra Costa Water District, Discovery Bay Community Services District, Ironhouse Sanitary District, Los Medanos Community Healthcare District, Mt. View Sanitary District, Stege Sanitary District and West County Wastewater District.

Ironhouse has not independently verified Finding #3, and again, if accurate, has no reason not to agree with it.

Recommendation # 3: These special districts, as part of the annual review in Recommendation 1, should consider whether it would be appropriate to implement a reduction of salary and meeting fee expenditures to bring them in line with other special districts.

Ironhouse Response: Finding #3 and its resulting Recommendation #3 are “comparative” or “relative” in that they are based on a survey of 27 special districts of all kinds located in Contra Costa County. Ironhouse notes that this survey includes districts ranging from community service and fire protection districts which have zero elected official salary & meeting fees costs to water and wastewater treatment districts which have relatively higher elected official salary & meeting fees costs. Of these 27 special districts, seven are sanitary districts and their elected official salary & meeting fees costs range from $4,425 to $175,254, for an average of $32,797. Ironhouse notes that it’s elected official salary & meeting fees are $28,220, which is below the average for all seven sanitary districts. In other words, Ironhouse’s salary & meeting fees costs appear to be “in line” with the other six sanitary districts in Contra Costa County.

Ironhouse further notes that currently the District is, and has been for some time, substantially upgrading its facilities to accommodate increasingly stringent water quality standards and the growth anticipated within its service area. As such, the Directors have devoted, and must continue to devote significant time, attention and oversight to ensure that these facility upgrades are accomplished in a cost-effective manner (overall costs related to the new facilities are around $68 million) which complies with state water quality standards that are becoming increasingly more stringent over time. As an example, the District was successful, through the Board of Directors and Management staff, in improving the District’s financial position over the last six years. The District’s strong financial position allowed it to qualify for, and receive, a no-interest (0%) loan from the State of California to construct its new wastewater treatment facility. This no-interest loan means the Directors were able to save the District rate payers approximately $900,000 a year (approximately $18,000,000 over the 20 year life of the loan) in interest payments alone. Savings like these do not come from low level involvement of the Directors; they come from a Board that is very involved in shaping the future of the District, in the best interest of its ratepayers. Notwithstanding the above response to Finding #3, through its annual budgeting process Ironhouse will continue to annually review the meeting fees it pays to its elected Directors. As long as they remain below the county-wide average for other sanitary districts, they are expected to remain unchanged.

Finding # 4: Health care benefits are provided to elected Board members by twelve cities and nine special districts.

Ironhouse has not independently verified Finding #4, and again, if accurate, has no reason not to agree with it.

Recommendation # 4: The policy of paying health care insurance costs for Council and Board members should be reviewed to determine whether this practice is appropriate. The agencies following this practice are: Cities: Antioch, Brentwood, Concord, Danville, Hercules, Martinez, Pinole, Pittsburg, Pleasant Hill, Richmond, San Pablo and San Ramon.

Special Districts: Byron-Bethany Irrigation District, Central Contra Costa Sanitary District, Contra Costa Water District, East Contra Costa Irrigation District, Ironhouse Sanitary District, Mt. Diablo Healthcare District, Mt. View Sanitary District, West Contra Costa Healthcare District and West County Wastewater District.

 As noted above in the response to Recommendation #1, as part of its standard annual budgeting process the Board of Directors of Ironhouse complies with Recommendation #1. The Ironhouse annual budgeting process is open to the public and is publicized through noticed public hearings in accordance with the Brown Act. On an annual basis, Ironhouse will continue to review the appropriateness of its policy of offering to pay health care insurance premium costs for its Directors and allowing each Director to make the decision of whether or not to accept based on her/his family and other circumstances.

Finding # 5: Pension benefits, with potential long-term financial implications for the agency, are provided to Council and Board members by twelve cities and three special districts.

Ironhouse has not independently verified Finding #5, and again, if accurate, has no reason not to agree with it. Ironhouse does not provide its Directors with pension benefits. Ironhouse does have a policy of making employer contributions for Directors under a deferred compensation plan and allowing Directors to defer additional compensation under this plan.

Recommendation # 5: The policy of paying pension or deferred compensation for Council and Board members should be reviewed to determine whether this practice is appropriate.

The agencies following this practice are: Cities: Antioch, Brentwood, Clayton, Concord, Danville, El Cerrito, Hercules, Martinez, Pleasant Hill, San Pablo, San Ramon and Walnut Creek. Special Districts: Central Contra Costa Sanitary District, Ironhouse Sanitary District and West County Wastewater District.

As noted above in the response to Recommendation #1, Ironhouse complies with this recommendation. The Ironhouse annual budgeting process is open to the public and is publicized through public hearings noticed in accordance with the Brown Act. Ironhouse’s policy of making employer contributions for Directors under a deferred compensation plan and allowing Directors to defer additional compensation under this plan are reviewed annually at these budget meetings for the purpose of determining whether this practice continues to be appropriate.

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About burkforoakley

I call it like I see it . I love my city, I love my community and I want what is best for the people around me. Do the right thing, I will support you. Do the wrong thing, I will oppose you!
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