Gadfly Greg Prada of Cameron Park has been criticizing the El Dorado Irrigation District for what he says is profligate spending on employee benefits.
“While (General Manager Jim) Abercrombie asserted that without the refinancing rates would need to be even higher, he failed to disclose that the $16 million of deferred debt repayment really is going to pay for EID’s surging employee benefit costs, $53 million of unfunded pension and retiree medical costs, and excessive overhead, which together are increasing ratepayer costs by $19.2 million for the four years 2013-2016,” Prada wrote in a letter to the editor to the Mountain Democrat.
“Interest rates are going up. Debt restructuring was never talked about in the Cost of Service (meetings). It was not considered for a vote by the board,” Prada told the El Dorado Irrigation District board Monday.
“It’s one big ticking time bomb. I think it’s a horrible legacy to leave behind,” Prada said.
“The Cost of Service committee was not briefed on this (bond refinancing),” Abercrombie said. “The committee was disbanded in May. The transaction was briefed to the board. Because of actions you took the committee didn’t want to work with you.”
EID Finance Director Mark Price said contrary to Prada’s assertion, “Total debt outstanding is actually going down” under the refinancing — “from $53 million to $50 million, a 4 percent savings overall.”
Buyers paid $6 million more than the value of the bonds, Price added. July 23 it was announced that the savings would be applied toward paying down the bonds.
Additionally, shifting the debt to future years produced a $2 million present value of savings, “which is a direct benefit to existing ratepayers,” Abercrombie said.
Present value of savings was explained by Abercrombie by noting that $10 paid back in the future is going to be worth less than $10 spent right now.
The refinancing “saved the ratepayers a big jolt,” Price said.
Abercrombie pointed to declining pension costs to the district — from $4 million in 2008 to $3 million in 2011, a 27 percent reduction.
In response to a Prada allegation that “EID gross operating expenses have surged $4.8 milllion,” Abercrombie wrote in a PowerPoint presentation. “Operating expenses, excluding depreciation, increased by $1.2 million to $41.6 million in 2011, decreased by $3.8 million in 2010, and decreased by $2.1 million to $44.2 million in 2009.”
Using figures from the recently released Comprehensive Annual Financial Report, Abercrombie said operating expenses declined 10 percent from 2008 to 2011.
Prada, who has his own Website called FIXEID.org to criticize EID, is unlikely to stop his financial “isms.” Each time he changes allegations on his Website or sends out e-mail blasts Abercrombie counters with already existing PowerPoint presentations, and El Dorado Hills policy wonk Paul Raveling also counters with his Prada debunking Website.
In his “Reality Restoration Zone” at sierrafoot.org Raveling summarized his effort thus:”FIXEID distortions, misrepresentations and falsehoods are obvious to those with full knowledge of EID business, but not obvious to most members of the public. This is because FIXEID uses a quantity of research that should be adequate, but it lacks valid understanding of research findings. Instead it substitutes stubbornly held prejudices. This is perpetuated in part by FIXEID members’ refusal to communicate with others who they perceive as not agreeing with them.”
After the meeting Prada sent out an e-mail blast that began, “General Manager Jim Abercrombie thinks that by repeating deliberately untruthful and deceptive information over and over that his utterances become the truth. And that a couple kernels of truth from him outweigh a bushel-basket of his deception.”