GEORGETOWN — With a nearly 5 percent drop in non-operating revenue, the Georgetown Divide Public Utility District Board of Directors July 12 approved the budget for the fiscal year that began July 1.
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Operating revenue — water and wastewater sales — is projected to increase more than 8 percent.
Total income is forecast to be $4.2 million. Expenses are pegged at $4.5 million, leaving a $288,000 deficit. That will be reduced to $222,400 in September when the El Dorado County Water Agency reimburses GDPUD $65,750 after it withdrew from an application for new water rights.
The remainder of the deficit is being backfilled by additional hydroelectric revenue expected and “other reserves.” General Manager Hank White reported at the July 12 meeting that Stumpy Meadows was still spilling.
The budget passed 4-1, with Director Kathy Otermat opposed.
Board Chairman Norm Krizl noted that the district normally adopts a two-year budget, but this year was only budgeting for one year. Besides borrowing from reserves and hydro, Krizl said that salaries are frozen.
White noted that normal longevity step increases don’t happen until January, so the board had time to include a salary freeze in its negotiations.
“This is all black-and-white and there are two things not in there,” said Director Ray Griffiths. “No. 1 is the quality of our water. That, I think, has a value on it. The other is reliability. I don’t know who’s lived on a well. I have. The power goes off and there is no water in the pipes. Being able to turn on the tap and have water come out … I’m in support of these even though they are not in black-and-white.
“I’m on a well,” Krizl said. “When the power goes out I go to the wine cellar.”
The philosophical discussion and jokes were abruptly ended by Director Bonnie McLane when she said, “I’m totally opposed to raiding the reserve fund. We haven’t done a lot of talking about cutting expenses.
“We have 24 percent unemployment up on the Divide,” McLane said. “I remember we talked about hydro, but I didn’t approve tapping into it.”
“Some of the budget cuts are in here,” responded Board Treasurer Bonnie Neeley.
“I think you guys have meetings without us,” shot back McLane. “If we can at least get a handle on medical.”
“It’s different if family members are on the plan,” Neeley said.
“We should equalize the ditch workers with the office workers,” McLane said.
“We’re not just going to make a motion and go boom,” interjected Krizl.
“Those contracts (with the ditch workers) were negotiated because they got other benefits,” said District Counsel Bill Wright. “These changes you suggest are going to be a cost to the district.”
“Negotiations — these are going to take a little time, not forever,” Wright said. “Approving this budget doesn’t say you’re not going to implement cost savings throughout the year. You don’t have to spend all the capital improvement things you have in the budget. The contract has expired. COLAs are frozen effectively. We need to negotiate a contract with the union.”
“Phooey on the contract,” McLane said.
White explained that the “ditch workers took a large salary increase in 2006 over more health benefits. It was a 100 percent vote.”
Four of the current office workers were here in 2006 and they opted for better benefits rather than a bigger raise, White said.
“It is no Cadillac plan,” White said. “They have a choice of two HMOs and two PPOs (health maintenance organizations and preferred provider organizations).”
The directors in prior meetings eliminated their health benefits. They still receive $400 each for attending the monthly GDPUD board meetings, according to the financial report for May payable in July and approved by the board as a consent item July 12. Through May each director has been paid $5,670 for a total of $22,680.
“I think we’re just punting if we just bring some of these back (for later discussion)” said Otermat. “Hank’s medical is $22,000 per year. If we brought it down to $800 per month we would save $12,000 right now.”
“I disagree,” Neeley said. “I’m not prepared to do any budget cuts without analysis and union negotiations.”
“I’m not willing to approve willy-nilly,” Neeley added.
After Griffiths moved that the board conclude its five items by the October meeting, the board agreed to approve the budget.
The five items, plus a sixth item, decided at the June 24 special budget meeting are:
1. Cut retirement benefits (currently 2.7 percent at 55). The El Dorado Irrigation District reduced its retirement for new employees to 2 percent at 55.
2. Cut the contribution for employee health benefits. Krizl told the Mountain Democrat Friday the proposal is to reduce the district’s portion of the employee health plan to $500 a month.
3. Eliminate employee vision, dental and life insurance.
4. Cut legal expenses by 40 percent. Krizl identified this as Otermat’s goal.
5. A hiring freeze and limit fill-in positions to those necessary for health and safety.
6. A 20 percent reduction in management salaries.
The board saved $2,500 per month by voting not to renew a contract with its Washington, D.C., lobbyist, Van Scoyoc Associates. The contract expires Aug. 14, leaving an approximately $25,000 savings.
E-mail Michael Raffety at [email protected] or call 530-344-5067.