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COLA added: EID employees to pay bigger share of benefits

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From page A1 | March 01, 2013 | 8 Comments

A three-year contract extension amending four articles of the Memorandum of Understanding originally reached with El Dorado Irrigation District Employees Association in 2010 will save the district $3.1 million over the next three years, according to EID Human Resources Director Vicki Hoffman.

As a result of the Public Employees Pension Reform Act employees will have to pay 50 percent of pension costs, which will be the 8 percent that is the employee’s portion of pension contributions. The employer also has an 8 percent match, but it is the employee’s share that is used first upon retirement. The employer’s match is only consumed if the employee outlives his portion of the pension.

The Letter of Understanding employees agreed to Feb. 15 means the district will no longer pay 100 percent of the employees’ 8 percent. In March the employees will pick up 2 percentage points of the 8 percent. Another 2 percentage points will be shifted to the employees in November. The employees had been paying 4 percentage points of their CalPERs costs since Jan. 1, 2012.

The EID board approved the LOU 4-1 in a public meeting Feb. 25.

New employees will have to pay the full 8 percent immediately, the LOU stated. New employees will also have to wait to age 62 instead of 55 to retire. The pension calculation for new employees is 2 percent, the same as county employees. Older employees at EID are on the 2.7 percent at 55 formula.

Additional savings come from increasing the share of health benefit costs for employees. Using the Kaiser plan as a benchmark, the Letter of Understanding states that if Kaiser premiums increase 10 percent for dependants of employees and retirees the cost sharing will go “up to a maximum of 85 percent-15 percent split. That cost sharing split becomes permanent in 2016.

And, “Plans that exceed the cost of the benchmark plan require a greater employees/retiree contribution.”

The sweetener that helped the employees agree to take-backs was cost of living increases in 2014, 2015 and 2016 based on the Consumer Price Index but not to exceed 2 percent.

Additionally 50 percent of the employees in 2014 will be eligible for a 5 percent merit step increase. For water treatment plant and sewer plant operators that means additional education is required to advance a step. The top step is Step 5. By 2016 only 10 percent of employees will be eligible for merit increases, Hoffman told the board.

In an email followup Hoffman told the Mountain Democrat that this year 46 percent are not eligible for merit increases because they are at the top step. in 2014  67 percent are not eligible, in 2015 the figure not eligible is 79 percent and in 2016 it will be 90 percent.

Between cost of living increases, merit pay and pension reform the cumulative savings of the three-year life of the LOU is $822,000, according to Hoffman’s PowerPoint presentation.

“I’m disappointed we’re still giving out raises,’ said Director Alan Day, who voted against approving the LOU.

“You pay for experience,” said Board President George Osborne, adding that employees, especially certificated ones will go to higher paying districts.

“The health care (plan) had a little more, but it’s nibbling around the edges,” Day said.

“We don’t yet know what the impact of Obamacare,” Osborne said.

“I am surprised that the vote was not unanimous because of the significant savings realized for EID’s ratepayers,” Osborne said after the vote. “All board members participated in several months of closed session meetings on this LOU, and the final product reflected all board members’ priorities.”

“I am very pleased that the employees recognized the importance of implementing these pension reforms early. It will generate substantial savings for our district and its ratepayers — which include most of our employees,” said EID General Manager Jim Abercrombie in a statement released after the meeting. “We acknowledge the collaborative effort to reach this agreement, and I truly believe it fairly balances employee and ratepayer interests.”

“The employees recognize the fiscal strain the district has been under for the last few years. Most of us are ratepayers as well as employees and we feel the crunch of rising utility and living costs,” said Employee Association President Doug Venable in a statement released after the meeting. “The association and management were able to reach an agreement that satisfies the priorities of budget reduction and long-term stability. Although this contract is an overall loss for our employees, we voted overwhelmingly to ratify the new terms of the MOU. We want to thank management and the district Board of Directors for working with us through this process.”

“I thank the staff for their cooperative firmness but fairness, said Joe Rose, attorney for the Employees Association. “It’s a reasonable compensation package to retain employees. It’s difficult to attract and retain water and sewer workers.”

“Go back to the table. To give half the employees 7 percent is unacceptable, said Sherrie Petersen of El Dorado Hills.

“Our doubling of water rates have a very short-term effect on the cost of living,” Day said.

Greg Prada of Cameron Park noted the water rate increases had been 102 percent. “Two percent and 5 percent on top of that is not fair and equitable to the ratepayers.”

“Sixty-five percent of the operating budget is employee costs.,” Prada said. “You’re locking in rates. This world will not end if this is not approved today.”

Day made a motion to delay the vote for one month to allow the public more time to comment, but failed to get a second. The other four directors voted to approve the deal with the employees union.

Michael Raffety

LEAVE A COMMENT

Discussion | 8 comments

  • Greg PradaFebruary 26, 2013 - 5:58 pm

    The three year extension of EID’s labor agreement will NOT save ratepayers $3.1 million over the next three years…projected pension, medical and salary costs all still are budgeted to increase. Only in Government is a lessened spending increase called a “savings”. Also note that if EID’s Board had not approved a 4% reduction in employee pension contributions for 2012 and 2013 (while not telling ratepayers), this reversion to 8% employee contributions would never have become a negotiating chip for employees to exploit now. But I do give credit to Mountain Democrat Editor Michael Raffety for balanced reporting based on the information EID provided him. One other noteworthy point is that more than 50% of EID’s employees will receive 7% pay hikes following 6% pay increases in 2013 while for the past several years 2.5%-3% pay hikes have been the “new normal” throughout America.

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  • Alan DayFebruary 28, 2013 - 2:59 pm

    Dear Editor, In the article "COLA added: EID employees to pay bigger share of benefits" you did a fair job of reporting what both sides said, however I was misquoted as saying “Our doubling of water rates have a very short-term effect on the cost of living,” (Day said). I did not say that, far from it in fact. The increases in water rates, recycled rates and sewer rates has a HUGE affect on our residents and businesses. The gist of what I did say was the EID Boards doubling of water rates so rapidly was having a big impact on our ratepayers ... and if we are handing out raises and COLA's (cost of living adjustments) to our lobbyist, our general manager, general counsel and the majority of the employees where is the relief, the COLA if you will, for our rate payers? There is none. I voted against this agreement (the vote was 4-1) for several reasons. I was comfortable with doing a max 2% COLA for the employees to help them keep up ... but not 5% raises on top of that. These are not merit raises mind you, you get a tidy raise, on top of the COLA, just for "meeting expectations" each year. I come from the private sector where you give and get raises for improved performance, for doing better. Not for just "meeting expectations." And you certainly don't hand out raises when your organization is in deep debt and would frankly be bankrupt except for the fact that the EID Board can jack up rates to whatever they want, anytime they want, with just a 4-1 vote. The article leads with a $3 million dollar savings over three years claimed by EID. That is not the full truth. As is buried further down in the article the net savings, after accounting for all the raises and other costs, is really only about $274,000 a year, if that, over the life of the agreement. Hey, any savings is good savings right? Yes, but to put it in perspective, this grand agreement that EID is boasting of that addressed health care costs, pension costs (EID is still paying out millions of dollars each year for the unfunded portion of the overly lavish pensions doled out not so long ago) and salaries, is about seven tenths of one percent (.007) of our operating budget. This was not a grand compromise or real reform that will ease pressure on the escalating water, recycle and sewer rates … it was an exercise in nibbling at the edges. Alan Day EID Director District 5 El Dorado Hills

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  • EID EmployeeMarch 01, 2013 - 9:57 am

    Director Day, as an employee of EID - I have a comment on "meeting expectations" and what this really means. We were told that there was almost never going to be any employee who "exceeded expectations" - even though there are employees who clearly do. All of us at EID work hard for the public, and because of the reduction of employees - we all fill in 200% because we are doing the work of two or more people now. Perhaps it would be worth your effort to be an advocate for us - the regular employees. More often than not, we "exceed expectations" but it can't be recognized by upper management politically, because that would mean there would be more pressure to reward employees in this current political climate. Director Day: please work with us too.

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  • Former EID EmployeeMarch 01, 2013 - 1:55 pm

    To the EID GM, Directors and Board. You need to take a serious look at yourselves. All of EID and the rate payers know how over paid you are. Excessive salaries and perks for Management is not the way to treat struggling rate payers. Management are the ones that need to take on more of the work load to help make it fair for everyone especially the rate payers. The Board of Directors need to bring their own sack lunch to the Board Meeting and STOP catering food with the rate payers dollars.

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  • Phil VeerkampMarch 03, 2013 - 9:48 pm

    EID ratepayers, and MD forum participants who have been following EID related threads may recall a hypothesis that I have proffered in the recent past. It is my theory that Greg Prada is the magician’s “left hand”. I now add a corollary. Alan Day EID Director District 5 El Dorado Hills is the magician’s “assistant”. The two, Prada and Day, generate a kerfuffle to the left while Tony Mansour and Bill Parker stealth march toward LINK - The Village of Marble Valley Prada, while serving on the Cost of Service committee, was instrumental in “socializing” water rates. That is, he persuaded EID that it was “fair” to have gravity rate customers subsidize pumping rate customers by shifting pumping costs to gravity customers. It so happens that the huge majority of the cost of pumping is from El Dorado Hills’ Folsom lake supply. Good job, Greg! It is now highly likely/probable that lower income EID customers are subsidizing higher income EID customers by assuming some of their pumping costs. What does this have to do with Tony Mansour and Bill Parker and Alan Day? Alan Day pretends to be appalled over this or that EID employee compensation. Watch when Village of Marble Valley votes are taken. Will Prada be silent? FACT - The water to supply this project will be the MOST EXPENSIVE water produced and delivered by EID. The required water CANNOT be delivered by gravity from the eastern plants. Those transmission lines are already running over capacity in the summertime. The required water will have to be pumped ($$$) up to EDH water treatment plant (~ 300 vertical ft.) From there it will have to be pumped ($$$) to Oak Ridge – (~170 vertical ft.). From there it will have to be pumped ($$$) to Bass Lake Tanks –(~540 vertical ft.) (Folsom Lake to BLT approximately 1010 vertical feet). The pumping and transmission infrastructure from Oak Ridge to BLT needs to be built. The transmission infrastructure to Parker/Gallo development needs to be built. Do the math. $50,000,000 from the developers might be a starting point. Watch Prada and Day. I’m tired of paying EDH’s pumping costs.

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  • Phil VeerkampMarch 06, 2013 - 8:47 pm

    . . . bump . . .

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  • Greg PradaMarch 08, 2013 - 5:06 am

    EID’s assertion that only 54% of employees are eligible for 5% raises will be wrong with the first next employee promoted and likely also the next new employee hired. Those newly promoted or hired will receive 5% raises each of the next five years that they are EID-employed. So it is unlikely that this 54% percentage will change much over the next three years. I don’t blame HR Director Ms. Hoffman for this distortion…she is not a financial analytical professional. But EID ratepayers certainly suffer from analytically shrewd General Manager Jim Abercrombie who cunningly has deceived the EID board and public with his false projections that trivialize another wave of undisclosed costs to EID ratepayers. Abercrombie’s claimed “savings” are a myth.

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  • Phil VeerkampMarch 08, 2013 - 8:38 am

    Greg Prada, please provide your data showing this assertion(Mar 1, 2013) to be incorrect. - LINK - By 2016 only 10 percent of employees will be eligible for (5%) merit increases, Hoffman told the board.

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