Wednesday, April 16, 2014

No. 6 EID rate hikes a two-year trend

From page A13 | January 04, 2013 | 4 Comments

DAY 104


A nearly two-year process came to a conclusion late in March when the El Dorado Irrigation District Board of Directors voted 4-1 to approve rate hikes through 2015.

The impetus began when home construction tanked in 2009, leaving EID with very little income from hookup fees. The second part of that recession was hundreds of foreclosures in El Dorado Hills and  lowered assessed values resulting in shrunken property tax revenue for EID. EID has $390 million in debt and bond covenants that require the district to maintain a minimum income-to-debt ratio of 1.25.

Of that figure $300 million of the debt was accumulated in the last decade, General Manager Jim Abercrombie said. Of that amount $64 million is the cost of meeting EPA requirements, $42 million was required by the California Department of Health, $22 million was required by the Federal Energy Regulatory Commission, $7 million was required by the El Dorado County Department of Transportation and $1 million by the Division of Safety of Dams. Altogether regulatory costs added up to $142 million. And $90 million had been spent as of 2010 fixing up Project 184.

Project 184 is four alpine lakes in three counties, aa diversion dam on the South Fork of the American River, 22 miles of canals, flumes and tunnels that supply 15,080 acre-feet of water and generate $8 million in revenue through a 21 megawatt powerhouse. Through Project 184 EID has obtained another 17,000 acre-feet of consumptive water rights.

In February of 2010 the board unanimously approved General Manger Jim Abercrombie’s plan for an 18 percent rate hike – down from 35 percent originally proposed —  plus 15 percent in 2011 and 5 percent in 2013 and 5 percent in 2014. Later that year in the summer Abercrombie announced he would begin a Cost of Service Study. That process proved rather complex and with the aid of a committee it was completed in the fall of 2011 and was followed this year by a rate restructuring in accordance with the Cost of Service for water, for sewer and recycled water.

There were three big changes resulting from the COS. No. 1 was the water rates were changed from 25 percent base charge and 75 percent quantity charges to a 50-50 split. Average use customers saw a decline in wastewater and recycled water rates, while potable water rates increased slightly for average water users. No. 2 was the Domestic Irrigation rate was eliminated effective Jan. 1, 2013, as incompatible with the requirements of Proposition 218. No. 3 was Recreational Turf rates rose dramatically, another effect of Proposition 218 and the Cost of Service Study.

Voting against the March 2012 rate hikes was Director Alan Day, who was sworn in December 2011 after defeating two-term incumbent Harry Norris.

The March water rate hikes amounted to 6 percent for the shift to 50-50, effective April 1, 2012, 11 percent in 2013, 11 percent in 2014 and 5 percent in 2015, an overall increase of 37 percent.

EID laid of 31 employees in 2009 and kept cutting back positions every year since. Additionally, while current employees can retire with 2.7 percent at age 55, new hirees will be on the 2 percent at 55 plan. Through negotiations the district employees also agreed to pay a portion of health care costs.

Michael Raffety


Discussion | 4 comments

  • Greg PradaJanuary 04, 2013 - 5:31 am

    This Mountain Democrat headline and story slant again misleads the Public as to EID's rate hikes: 1) EID's rate hikes are not just a TWO year trend...EID's Board-approved FIVE year water rate hikes for 2010-2015 total 102%. 2) 31% of rates go to pay for EID's lavish $49,000 per employee benefits and per employee paid time off of up to 50 days annually. 3) EID's bloated annual overhead has increased $10 million under the current Board majority and costs far more to current rates than the regulatory requirements the Board majority like to blame instead of themselves. 4) gross operating spending (before accounting gimmicks) has INCREASED $5.3 million/13% annually since 2010 under General Manager Jim Abercrombie. 5) EID continues to deficit spend $15 million annually and plans to raise another $60 million new debt instead of balancing its budget with true bottom line spending cuts. 6) EID accounting gimmicks camouflage additional major cost liabilities including $53 million of unfunded pensions and medical costs and $16 million of deferred debt repayments that irresponsibly are being left for future General Managers and Boards to address. Mountain Democrat Editor Michael Raffety does the rate paying public no favors by falsely implying EID's bottom line costs have decreased instead of aggressively reporting EID's abject financial failures... including the ticking financial time bombs EID's Management and Board irresponsibly are failing to diffuse.

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  • SparkyJanuary 04, 2013 - 7:53 am

    As usual, Mr Prada offers no solutions and has yet to announce his candidacy of a board position as an agent of change. Hopefully, he will spend some time with GDPUD as their board now has a majority composed of spiritual brethren. Turnover is already happening and it will be interesting to see the pay rates of the mandated replacements. Regulations are increasing at an increasing rate from the state and it's unaccountable agencies. It would be more productivity to attack the source of the issues rather than locals. The system is broke, but the fixes start in the the state legislature. Mr Prada the Divide is calling and I hear that they have a couple of open leadership positions....

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  • Paul RavelingNovember 06, 2013 - 12:04 am

    One small discrepancy: Cost recovery was 70/30, not 75/25, prior to adopting the COSS recommendation to go to 50/50. Greg Prada's comment, as usual, repeats the false claim of 102% rate increases from 2010-2015. The actual increase would have been 59.7% based on the 2012 Prop 218 approval. Reduction of the 2014 increase from 11% to 5% makes the 2010-2015 increase 51.1%, basically half of what Mr. Prada continues to claim. EID still has rates and rate increases below the averages for both California as a whole and for the Sacramento region.

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  • Phil VeerkampNovember 06, 2013 - 12:15 am

    Hey Paul! ~~~ it worked.

    Reply | Report abusive comment


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