Day voted against cost cutting

By From page A5 | March 27, 2013


Alan Day wrote strongly recently about his objections to an EID board action, accepting updates to EID’s agreement with its employees. What he didn’t say is that the updates decrease EID’s costs and did not involve merit raises. He argued that existence of merit raises was a reason to avoid the cost-cutting actions that were supported by EID’s staff (77 percent of employees) and the four other directors. On this agenda item, Director Day voted against cutting costs.

The measure before the EID board was to adopt updates to the agreement with employees, already negotiated with employee representatives and approved by 77 percent of employees. These were mainly to implement provisions of 2012 Assembly Bill 340, the Public Employee Pension Reform Act (PEPRA), in order to accelerate corresponding cost reductions. Those changes are independent of the reason Director Day cited for opposition.

Here’s a simplified summary of what the measure adopted by the board actually did: (1) Reduce future pension liability by shifting retirement age from 55 to 62; (2) accelerate adoption of a PEPRA year-2018 standard for 50/50 pension cost sharing between employees and public agencies; (3) change employee and retiree cost sharing of health benefits, to reduce employer-paid costs; (4) replace a fixed 1 percent annual increase with a variable COLA, limited to 0 percent to 2 percent; (5) extend the agreement between EID and its employees to 2016. The prior agreement was due to expire at the end of this year.

EID staff estimated this set of changes will save $325,000 in 2013, then $700,000 in each following year through 2016. Director Day said his own estimate was “only” $274,000 per year in  cost reductions. Either way, it’s a substantial cost cut.

Director Day’s complaint is merit raises. If he’d  like to discuss merit raise policy, let’s have that discussion, but it wasn’t the board’s business on Feb. 25. Let’s be perfectly clear about that case: It was EID staff and the four other directors who planned, negotiated and adopted a very substantial cost cut. They acted in our best interests. Alan Day opposed our interests by voting to keep costs higher.

El Dorado Hills

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