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A $43.834 million budget for 2013 was approved by the El Dorado Irrigation District Board of Directors Nov. 13 on a 4-1 vote, with Director Alan Day voting no.
The operating budget is $1.8 million or 4 percent higher than the projected actual expenditures for the current calendar year. It is 2 percent higher than the original budget for this calendar year.
The budget is a two-year budget. For 2014 the budget is $44.684, and increase of $850,000 over the 2013 budget or .19 percent higher.
The projected expenditures for 2012 show water revenues “on track,” according to Finance Director Mark Price, wastewater revenue down $1.6 million due to using the lower of two years of winter water consumption as a basis, hydro revenues down $1.3 million due to a low water year, and hookup fees $1 million short of the budget forecast.
Expenses for 2013 show cost of living and merit increases adding $250,000 to expenses, while eliminating six positions saved $730,000. Increases in health care costs and Public Employee Retirement System costs were “substantially negated by an estimated $430,000 negotiated reduction in employee retiree and health benefit” costs to the district, according to Price.
Annual medical costs for the district declined 12.2 percent between 2008 and the 2013 budget, according to a chart presented during the budget discussions Tuesday, though they will increase 1.7 percent in 2013 compared to the projected expenses for 2012.
Pension costs increased 6.6 percent from 2008 to the 2012 projected expenses, though the share of the employee’s PERS contribution funded by the district declined from $825,00 to nearly $682,000 projected for 2012.
A breakdown of employee expenses prepared by Price shows a total of $10.865 million in 2013. Medical expenses are $3.067 million, retiree health $945,000, dental $269,000, vision care $40,000, Employee Assistance Program (insurance) $6,000, life insurance $43,000, Workers’ Compensation $395,000, FICA (Federal Insurance Contribution Act) $1.291 million, PERS $4.702 million, wellness $33,000, vehicle allowance $42,000, other $32,000.
Major expense changes affecting the 2013-14 operating budget are a $322,000 increase in electric utility costs, $120,000 in required electrical breaker testing at facilities, $423,000 to dredge the reservoir at the El Dorado Hills Wastewater Treatment Plan, and a $330,000 in land-use fee required by the Federal Energy Regulatory Commission.
District Counsel Tom Cumpston said the current FERC fee is $175,000. Director John Fraser said that was a 200-plus percent increase.
“We’re estimating,” Cumpston said.
“Do we have any kind of appeal?” Fraser asked.
“When the final rate comes up there is an appeal rule and finally we can litigate it.” Cumpston said.
“I would be in favor of asking Mr. McClintock (congressman) to reduce this,” Fraser said.
Revenues for 2013 and 2014 include an 11 percent rate increase for water each year and 5 percent for wastewater and recycled water each year.
“Drivers on rates are directly related to debt service capital costs,” said General Manager Jim Abercrombie.
Day had sought a 5 percent reduction of approximately $2 million in each of the two years of the budget cycle.
“I’d like to move we do this (budget) at the next meeting,” Day said. I ask the general manager to reduce the budget by 5 percent — $2 million per year. Given that we had rate increases, it would send a powerful message even if we didn’t pass it.”
Day’s motion died for lack of a second.
After eliminating six positions this year EID’s employee roster totals 221.5 full-time equivalents. In 2007 there were 306 employees. As hookup fee revenue and property tax revenue slid EID began shedding employees under past manager Tom Gallier, beginning in 2008, and under current GM Abercrombie, hired in 2009. Between 2007 and 2012 EID has eliminated or laid off 84.5 positions, a 27.6 percent reduction.
Additionally, on a 5-0 vote the board agreed to prepay $3 million on its Seres 2004A debt of $5.25 million that will come due March 1, 2013. In October 2011 the district prepaid $2 million on the portion of this that was due this year. Both prepayments are put in an escrow account that will release the money on the bond’s maturity date. The bonds, called Revenue Certificates of Participation, are not callable, meaning they cannot be paid off early. With $3 million in escrow the district will still need to come up with $2.25 million more to retire the COP on March 1, 2013. Interest rate on this bond is 5 percent.
Total debt service in the 2013 budget is $17.059 million this year, $20.759 million next year and $24.801 in 2014. The debt service to revenue ratio is 1.47 this year, 1.48 next year and 1.37 in 2014. The minimum ratio requred by bond covenants is 1.25.
Abercrombie’s 2013 Operating Budget includes $14.3 million of headquarters administration (an increase of $10 million in the past ten years), 6% pay raises for most employees (as compared to a 1.7% Social Security COLA for 2013), $49,000 per employee benefits, $13,000 per employee paid time off, $3.1 million of accounting gimmicks, two $500,000 slush funds, and $60 million of new debt. Yet his budget excludes paying for $53 million of unfunded pensions and retiree medical expenses which are left for future EID GM’s and Boards to address.
See http://www.FixEID.org for more details that Abercrombie neglected to disclose in his news release and Editor Raffety chose to withhold reporting.
FixEID: Does your date come from THIS: http://www.eid.org/modules/showdocument.aspx?documentid=3213
oops. DATA
(Cont’d) Pgs 106 – 133??????
Evelyn, All EID financial information reported within http://www.FixEID.org is extracted from twelve years of EID’s Consolidated Annual Financial Reports, Board Packets, Cost of Services studies, Water Resources and Service Reliabilty reports, information divulged at EID Board meetings and captured on audio recordings, etc. The $53 million unfunded liabilities is buried in footnotes to the Financial Statements but reluctantly verbally confirmed by Mark Price and Jim Abercrombie in Tuesday’s Board meeting. Director Osborne unwittingly asked a direct question he wished he hadn’t. Editor Raffety heard this but excluded reporting this most material financial fact.
The per employee benefits data of $49,000 is not specifically repported by EID (and in fact EID tries to obscure this disclosure) but is derived by dividing $10.865 million of budgeted benefits by the budgeted 221.5 employees. certain other information similarly is derived from EID-provided data and applying 7th grade algebra. Unfortunately, the EID Board-majority (except new Director Alan Day) never challenges any spending proposal presented by EID Management…the result being 102% of Board-approved water rate increases for 2010-2015…and, counting Property tax subsidies, EID water and sewer rates that are twice those of neighboring Folsom and Sacramento. (Note: 53% of EID’s rate revenues and property tax revenues come from El Dorado Hills and 22% more from Cameron Park so Folsom especially is a very important economic comparison else restaurants and commercial development stop at the El Dorado County line. EID-served restaurants pay sewer bills seven times their water bills and their EID water bills already are double Folsom water bills).
1. What question did Director Osborn ask? 2. The answer?
Greg, is this you on this thread or is it Jon Jakowatz, John E. Thompson or Richard Boylan?
Greg, if you actually, REALLY, wish to impact EID rates then get in front of the wave and secure cost sharing agreements from LINK – Parker and Gallo
LINK – FIXEID People Problems
LINK – What’s Wrong with FIXEID
EID lacks the infrastructure to service this developmednt. WHO WILL PAY? LINK – The Village of Marble Valley
- development -
Evelyn, Director Osborne was under the impression that EID’s $53 million unfunded pension and medical liabilities was being paid down over ten years as Management previously had (mis)led the Board to believe was being done. But when Osborne directly asked Mark Price for validation of the paydown, Price surprised Osborne and sheepishly admitted that rather than being paid down, the unfunded $53 million already has gone up further. Even with that financially sobering surprise, the Board then voted 4-1 to accept Management’s proposed budget with no request for offsetting cost reduction evaluation (as requested by Director Day), much less Board direction for Management to cut costs. One wonders why EID even bothers having a Board when all they do is rubber-stamp Management’s ignoring of multi-million dollar cost increases and continuation of $15 million per year deficit spending that will require $60 million additional debt to be raised late next year. The November 2013 EID Director elections can’t come soon enough for 38,000 rate hike-weary regular EID ratepayers. Meanwhile, Editor Raffety (who witnessed this surprising adverse financial admission by Price) chose to withhold this material news from his above story.
http://www.FixEID.org: Fairly sobering information. Ratepayers and employees alike should be paying attention. The unfunded liabilities & increasing debt are scary. Someone will pay the piper – eventually. In the meantime, I’d like to know who is profiting from the Revenue Certificates of Participation. The holders are smiling all the way to the bank. $358 MILLION is not chicken feed. Sign me up, please.
Of course, the $358 MILLION comes from the LAST financial year. Add another $60 MILLION (current year) and $60 MILLION (next year) . . .
LINK – fixFIXEID
NOTE: The source document for $358 MILLION Revenue Certificates of Participation is EID’s own 2011 CAFR. pg. 41 @ http://www.eid.org/modules/showdocument.aspx?documentid=2296
If EID spent less money, they wouldn’t be raising water rates 102% for 2010-2015. But Phil Veerkamp doesn’t like that idea…he’s an EID pensioneer dependent on EID’s 38,000 ratepayers to pay extra to pay his outlandish retiree medical benefits and pension.
Unfortunately for Phil even at retirment he never made it out of the bottom quartile of EID’s pay scale. An EID financial expert he’s not.
disgruntled – You are correct in one regard only. I am, in fact, not an EID financial expert. I am, in fact, an EID water distribution expert – Sr. Water Distribution Operator, RET. I am not an EID pensioner. I am a CalPERS member. LINK – CalPERS FACTS AT A GLANCE – The entire California tax payer base have an interest in retirement reform.
LINK – EID by the Numbers – Capital Spending and Labor Costs
FACT – The water to supply LINK – 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 ($$$) up to EDH treatment plant (~ 300 vertical ft.) From there it will have to be pumped ($$$) 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.
All of the rural water districts are suffering from the same set of problems. State regulation is increasing at an increasing rate for sewer and water, required technical skill sets for operations, Homeland security weighs in with mandates, unsustainable pensions is a government wide issue that remains unresolved everywhere and disproportional size of the the network in relationship to the customer base. I am just not sure that any rural water district, anywhere in the state is dealing with these issues cheaply and efficiently. If there is a template for “success” with the new normal, then EID should implement it today. It does not exist. Jumping up and down and scrutinizing every word or comma is not solution oriented. The time is now to start working on zero based budget with entry level pay rates for employees as needed to establish the floor.