Monday, July 21, 2014

How EID got to where it is now

January 20, 2010 |

At the Jan. 11 El Dorado Irrigation District workshop in El Dorado Hills former EID board member Howard Kastan of Cameron Park bragged that there were 30 different water rates in 1991 when he was on the board and those were reduced to five.

That is all well and good, but then he talked about getting the board to approve a reduction in residential water rates just before he left the board in the 1990s. And there is the problem. At a meeting in which the manager is talking about his proposal for a 35 percent rate increase followed a year later by a 15 percent hike and two more 5 percent annual hikes, one has to assign blame to Mr. Kastan and his board for the current proposal.

We canÕt endorse what is a compounded 80 percent rate hike over five years, but we can understand the need for a rate hike of some sort. EID has increased rates only six times in 20 years. Each time it is a large percentage figure. If the district had increased rates by a nominal amount to keep pace with the increase in the California Consumer Price Index we wouldnÕt be looking at a 35 percent jump.

Reducing rates may have given Mr. Kastan a warm, fuzzy feeling, but it damaged the district in the long run and did a disservice to the ratepayers who are now paying the price for his illusion of prudence.

The fact is Mr. Kastan damaged the district. He almost scuttled the acquisition and repair of Project 184, and he was still complaining about it Jan. 11. That is the number assigned by the Federal Energy Regulatory Commission to the four alpine reservoirs, 22.5 mile El Dorado Canal and the El Dorado Powerhouse. Since 1876 that has been the main water supply for Placerville and the area farmers. In 1907 a power company, later absorbed by PG&E, bought the project from a water company. In 1919 the state Railroad Commission ordered an agreement to set aside 15,080 acre-feet of water for El Dorado County residents. That project now supplies one-third of EIDÕs water.

And Kastan was going to chuck it all. Between him and Al Vargas, another ex-director who spoke Jan. 11, they managed to run off the hydro experts who had helped survey and value the project and get it going again. At the El Dorado Hills meeting all Mr. Vargas managed to do was blather. On the EID board he also blathered. The Pecksniffian pair did nothing but insult and belittle the employees, whether they were managers or crews out in the field. It was a time of chaos and board mismanagement. It only improved when these two left the board and another director was recalled.

After years of fighting losing battles with the state and underfunding the district and failing to replace aging systems, a new board hired Ane Deister as manager in 2001. She professionalized the district and brought peace with the state. She increased the hookup fee charges. When she left the district in 2007, though, it had become top-heavy. About halfway through her tenure she also convinced the board to up the retirement from 2 percent at 55 to 2.7 percent at 55, only 0.3 percentage point off of law enforcement and firefighters.

The board has since admitted it made a mistake in 2004 when the directors voted for that. In 2008 Tom Gallier was hired as manager and he cut eight managers, cut management pay and laid off 31 employees. After doing that heavy lifting he went back into retirement. Enter Jim Abercrombie in September 2009. Hookup fees had fallen 95 percent and he was forced to propose a rate increase to maintain revenues at 25 percent more than the annual debt service. That is a requirement of the bond covenants. Those bonds have paid for sewer plant upgrades, water tanks in El Dorado Hills, replacing dilapidated sections of the Project 184 flumes, and replacing leaky water mains and rotten forced sewer mains. He is also negotiating with the employeesÕ union with the goal of reducing expenses further and bringing some kind of change to the 2.7 percent retirement rate. He has taken on a tough job to sell this to the employeesÕ union and to sell the rate hikes to the public. His goal is to make small changes in the rates in the future and put the hookup fees into a capital improvement account where the district can tap cash and reduce its dependence on debt financing for capital improvement projects.

Abercrombie has a long row to hoe. Thankfully he doesnÕt have Kastan and Vargas on his board. This board has its work cut out for it. Both the board and Abercrombie seem up to it.



Mountain Democrat



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