4% proposed STPUD rate hike comes with questions
By Kathryn Reed
When ratepayers in South Tahoe Public Utility District incurred a 4 percent hike in 2007 it generated about $668,000 in revenue. Salary and benefit increases that year for STPUD totaled about $750,000. When ratepayers incurred another 4 percent hike in 2008 it raised about $700,000, with the district spending about $1.7 million on salaries and benefits that year.
The district is proposing a rate hike of 4 percent that would take effect July 1 – the start of the fiscal year. No raises are expected for the more than 100 employees. The money generated is earmarked for capital improvement projects.
On May 6 at 6pm the board will conduct a public hearing on the 2010-11 budget at 1275 Meadow Crest Drive, South Lake Tahoe. The board will vote on the rate increase on the May 20 meeting that starts at 2pm.
That is also the last day the 17,000 ratepayers can submit comments about the proposal. If 50 percent plus one objects to the increase, the proposal dies per California Proposition 218. The board could also vote against it.
As of April 27 there were 66 objections. Two years ago the rate increase received 65 objections and there were more than 160, or less than 1 percent of the ratepayers, who objected three years ago.
“The thing that is the driving force for the increase is the capital improvement program for the next two years,” South Tahoe PUD General Manager Richard Solbrig said. “The next two years there is a real glut of projects to get done. We need some cash upfront right away to take advantage of all of these programs.”
Part of the urgency is matching dollars and low interest loan programs the district has received from the state and federal governments. Some of the money will be spent on installing water meters, some to upgrade the water flow for fire suppression and some to improve the 51-year-old wastewater treatment plant.
Board President Dale Rise believes a 4 percent rate increase is too much.
“I was hoping to convince the board of 2 percent,” Rise said. “My problem is they want a 4 percent increase every year for the next 10 years.”
If the rate hike were approved, the average household would pay an additional $8 per quarter or $32 a year. Rise is concerned about the cumulative affect of 4 percent hikes, pointing out that in three years it’s more than $100 more a year that people would be paying for water and sewer each year compared to today’s rates.
The district does its budget calculations on a 10-year cycle to project its current and anticipated needs.
“If we did zero percent this year and did 4 percent for the remaining nine years and did all the capital projects, we would have a deficiency in the ending balance,” Solbrig said.
To that, Rise says perhaps some of the projects should be deferred.
If the 4 percent hike is not approved, Solbrig says the board will have to decide which capital improvement projects need to be shelved and/or approve other cost-cutting measures.
In the $40 million annual budget about one-third is used for capital improvements, one-third for maintenance and operations, and one-third for salaries and benefits.
The latter has caused several disgruntled ratepayers to voice their dissatisfaction with how the district spends ratepayers’ money. The highest paid employee in the district is Solbrig, who makes $180,744 a year. The lowest wage is $16/hour. The average annual salary at the district is $75,474.
There are 100 workers who are represented by one union. The 15 managers operate under a memorandum of understanding with the district. The highest paid union worker makes about $95,000/year.
Below is the salary range for the 10 highest paid positions beneath the general manager. All are management positions.
|
Position |
Minimum |
Maximum |
|
|
|
|||||
| Assistant GM |
$127,016 |
$162,108 |
||||||||
| CFO |
$108,587 |
$138,588 |
||||||||
| Eng Dept Manager |
$110,205 |
$140,652 |
||||||||
| Mgr of Field Ops |
$102,213 |
$130,452 |
||||||||
| Principal Engineer |
$99,157 |
$126,552 |
||||||||
| Mgr of Plant Ops |
$99,157 |
$126,552 |
||||||||
| Human Resources |
$90,215 |
$115,140 |
||||||||
| Senior Engineer |
$88,100 |
$112,440 |
||||||||
| Hydrogeologist |
$88,100 |
$112,440 |
||||||||
| Land App Mgr |
$88,100 |
$112,440 |
||||||||
Most employees in the district are at the highest level of the five-step range for their position, Solbrig said.
He and CFO Paul Hughes explained the large salary-benefit spike in 2008 was twofold. First, salaries were adjusted to bring STPUD employees inline with the state median for their respective positions. This was the first survey conducted since Solbrig started with the district in 1990. It was a board decision to pay the median salary. Second, the district switched to a wellness program that mandated employees get baseline exams. This meant more visits to doctors than would be normal.
“The district’s view is investing in the cost of the wellness program in a long-term investment. We expect to reap benefits for years to come,” Hughes said.
In the current budget the salary and benefits category is down 1 to 2 percent from the previous year because the health plan is working, Hughes said. The district is self-insured.
This is the last year of a four-year contract with the union. It’s anticipated an extension of one year will be agreed to a by all sides that will include zero raises.
The general manager and the chief financial officer defend the salary and benefits packages for the 115 employees of South Tahoe PUD.
“It’s easier to retain people when you pay a fair, livable wage. We need an adequately trained staff. We don’t have a high turnover rate,” Solbrig said. “We don’t want to be like the police and fire departments where at times they have been like a training ground.”
Below are the cost of living adjustments for STPUD employees compared to the consumer price index:
Year COLA CPI
2009 2.0% -1.3%
2008 3.8% 3.8%
2007 3.2% 3.2%
2006 2.5% 2.9%
2005 2.5% 3.1%
2004 2.5% 2.5%
2003 2.5% 1.1%
2002 2.5% 2.8%
2001 2.0% 3.2%
2000 2.0% 2.0%
Wages have been frozen. However, STPUD employees have not incurred furlough days like their brethren throughout the public and private sectors. Nor have they had salary reductions since the recession hit.
Solbrig said the district maintains the staff it needs. He said when more construction was going on in Lake Tahoe the district hired a consultant or paid overtime to handle the new connections.
Solbrig said the maintenance and operations budget has been trimmed some and that grants are continuously being sought so ratepayers don’t foot as much of the bill.
He said the staff and board have not identified what services could be cut and still have public health and safety issues addressed.
“What work are we not going to do if we have people on furlough?” Solbrig asked. “Are we going to reduce service? If your water is off, are you willing for us to get to you in a couple days?”
This article assumes rate increases are the only sources of income for STPUD to pay salaries and that is just not the case. One example of other funding is the District’s very successful grants program that helps compensate the employees involved with capital improvement projects. I’d like to see Lake Tahoe News do a story on how the many grant awards to STPUD is benefiting the STPUD customers.
I think STPUD’s compensation policy of paying median salaries sets a good example for the community. The work done by the District is very specialized and requires extensive training and a strong background in the industry.
I am happy to pay another $32 a year to see improvements to my water and wastewater system. Some agencies neglect their infrastructure and it ends up costing customers more in the long run and forces unmanageable rate changes in the future.
For those unable to afford the addtional $32 per year, a rate subsidy is available to low income customers.
Are they suggesting it would be difficult to retain employees if they took a pay cut like the rest of the community? The employees would all leave ? And where would they go? The employees are that above the rest of us ? If that’s the kind of attitude over there no wonder they don’t even hide it, they don’t even realize how it feels to have these folks keep taking money from our pockets and putting it into theirs, how do they live with themselves?
The system of allowing the rate increase unless half of the customers come out against works well for them, but is completely out of line in these times.
These folks have no sense of community, caring for their neighbors in times of need. They admit without shame they will continue to raise rates yet try and blame it on something besides their own greed.
If its difficult to retain employees earning over 100,000 when their neighbors can’t pay their bills, then its time to let those employees go, I’m sure many of us will gladly stand in line to work for half that pay.
its nothing short of greed to take more money from your customers who can’t pay their bills and you are demanding it for something as vital as water.
Do you run a full staff on saturdays and sundays? No? Holidays full staffed? No? Then you don’t need to run a full staff one or two other days a month for furloughs. Everyone else can cut back so can you.
Why are the customers and small business owners bearing the majority of this recession? When will people who have the power to take our money in taxes stop using fear, or our need for safety and services and now water, when will they stop using our need to fill their bank accounts?
Rhonda,
As the former CFO of South Tahoe PUD, I know you are well-versed in the agency’s finances.
Lake Tahoe News has written stories about different funding sources for STPUD. Here they are:
1. https://www.laketahoenews.net/2010/03/tahoe-water-agencies-ask-congress-for-5-mil/
2. https://www.laketahoenews.net/2010/01/money-flowing-to-tahoe-for-environmental-projects/
3. https://www.laketahoenews.net/2009/11/stpud-water-meter-project-grows-by-more-than-80/
4. https://www.laketahoenews.net/2009/09/residents-likely-to-feel-financial-burden-of-water-meters/
Kathryn Reed, LTN publisher
About time some good investigative reporting was done in South Lake Tahoe. Good article. I had no idea so many protests to earlier rate increases had previously been filed.
Did STPUD have high employee turnover before they handed out those huge raises in 2008? I don’t think so.
So they built their fancy new building, the employees got their big raises (in the middle of a recession), they have their prestige brand coffee delivered by Alpen Sierra, now they want additional rate increases to pay for necessary capital improvements? Seems this is all backwards.
Did the part-time board include themselves in the new “wellness program” (premium health insurance) given to staff?
Any rate increase higher than the CPI increase is unacceptable. Live within your means like your ratepayers, STPUD.
According to their financial report STPUD recieved $5 Million in Federal Grants for water infrastructure projects of which the districts share was $2 million. Quote”To further lessen the financial burden to our customers, the district aggressive state grant funding efforts yielded a $4.35 million no match grant to faccilitate installation of water meters” An outside company from Sacramento actually does half of the installations with a company out of Sparks does the other half. No local employees actually do the installation of water meters. Why can’t the STPUD employees do the installations?? Also do not forget the health and benefit package the employees receive. Health -Minimum $1800.00 per month. CalPers-Approx 5% of their salary, $440.00 per month. Works out to about $114,000.00 per year.
I sit here correct about the salary and benefits package numbers I gave earlier. They were based on previous years. The actual numbers are: 18% of the base wage or salary to CalPers paid for by the rate payers. An extra policy covering misc items of 3% of the base wage or salary. So I have to revise my estimate of the actual average wages received by the employees to include base salary or wages and benifits to approx $128,000.00 per year. These numbers are based on the base wage of $88K as stated in this article by LTN
Added statement about the 18% CalPers.
The actual numbers are: 18% of the base wage or salary to CalPers paid for by the rate payers with 5.5% of that being paid by the employee.
Fair, Livable Wage? Did he REALLY?? say that??? Then they really do need money at STPUD to clean out all those chemicals that are in the air there clearly messing with managements’ brain cells!!!
Attend the meeting on May 6 at 6PM!!! If you go to the web site it will tell you that the meeting is at 2PM. It is also in their press release. Hopefully this will change soon and they will give the correct time. Also for your information, they will actually accept your written protest (with the APN#) up until the May 20 2PM meeting where they will actually vote on the increase or not. The May 6 6PM meeting is only to voice our opposition or approval to the board, May 20 at 2PM is the actual vote.
Who would be in favor of more rate increases, above the rate of inflation, besides the union, the 115 employees and their beneficiaries, board members whose benefits are aligned with the staff upon whom they bestow their generosity, and people anticipating possible future employment or business with STPUD?
Come to think of it, those special interests could probably fill a room.
Dale Rise is right. 4 percent is too much. Thank you Dale.
Everyone needs to protest this rate increase even though not enough people will understand they have to file something. Do not believe anything Ski Bum says when to file the protest get all official information from STPUD. STPUD isn’t even trying to hide the fact they haven’t even attempted to cut expenses or salaries first like everyone else is doing. They get raises, the police and fire employees get raises, STR gets raises, its greed greed greed from our pocket to theirs.
Anything too much at the present time with so many things going under.
You could fill a book of 10.000 pages with what’s happened in the last 2 years and I’m not convinced that things are really getting any better in the near future.
Maybe we should go back to personal wells.I got one on my property,sure others do to depending on what part town you live in.
Not all the wells were effected with the mtbe scandal.What the hell happened to all that fine money anyway?
James, you couldn’t more of a moronic statement. All the information I got about when and how to file came straight from the STPUD spokesperson. Their web site does not contain that information and their web site contains the wrong time for the meeting. You must work for them to make such a statement that I am wrong about the information. I talked with Dennis Cocking today and that is where I got it and he knows the web site is wrong and is going to change it. I am trying to pass on the correct information to help even you. This rate WILL increase unless we as ratepayers try and stop it but you have to make a protest letter and get it to them as one is not provided. If you rely on STPUD for all the facts then we are STPUD. I guess no good deed goes unpunished.
Thanks Kae, for putting out such a factual article. I found the most important item being that the voting public has the opportunity to change this by getting 50% plus 1 for Prop 218 to let it die. The voting public has not had this knowledge prior to your website. Again, I commend you for this. When I ran last year for a board position, it was the mantra of the incumbents, that the District was in such good shape because of the existing board’s sound financial decisions, there wouldn’t be a rate increase, and no need for new people on the Board. I respectfully suggested the reason for the one time moratorium was simple… It was an election year. In light of this sudden change after elections, I only have one question. What has changed at the District since November, to cause a proposed rate increase of 4%? Not just this year, but proposed for the next 10 years? What has changed and/or happened since the election in November to force the district to push for a 4% increase?
I sincerely hope those of you who frequent this site, now armed with the knowledge of the 50% + 1 rule, will talk to your friends, co-workers, neighbors, and let them know this. Democracy is all about individuals making a difference. For so long, government entities have relied on we the people to be so tired, downtrodden, but most importantly, UN-informed, we miss opportunities to make changes. This is a very crucial time in our community to work for reform, for us to work together so that more good people aren’t forced to move away in order to survive.
Dig our own wells!
To get enough signatures someone would probably have to collect them at Safeway or Raley’s. It would need to be announced ahead of time, so people could bring there APN #.
Other way would be if it could be done by email.
James, in El Dorado County you have to have a minimum 5 acres to drill your own well. They made that law up back in the 89’s because so many people were doing when El Dorado Irrigation District started raising the price of their (required) meters.
Sorry, that’s 80’s.
Considering the capital improvements, the rate increase does not seem out of line to me.
Irrespective of how you feel about this, it’s great to see so many people get involved in the discussion.
There is a rate subsidy available for customers who may be experiencing hardship.
Wow, I like how everyone completely forgets the fact that the District actually makes improvements to their system. It seems that there are a large number of people who believe the water and sewer system in this town and county should end up like Lukins. I for one am happy to pay for the increase as I have seen the work that has gone into my neighborhood year after year. 4% over 10 years is not that much to secure a safe supply of drinking water and adequate protection from fires. It also seems that this group of people would dismantle the whole organization. That seems foolish because if these workers are getting paid then they will spend money in this town. I hope that they come into my business and spend some of their money. The last thing I want to do is alienate the exact people that could keep my store alive. So good work STPUD and you have my consent as a rate payer to place the 4% increase in place.
Concerintahoe – I think that some clarification is in order. The proposed 4% rate increase is an annual increase – not 4% spread over a 10 yr. period. If the 4% annual increase is approved, it will double your bill.
Concern, you are so misinformed on everything with concerns to STPUD. Yes thay are doing great and they are in line with their financials but that is because thay get to do a rate increase and not cut back on services. It’s a different world right now and you being a business owner with a store can’t just raise your rates without cutting back somewhere else. Give all your employees a raise and the best health benefits package in the country without raising your own costs and see how long you stay in business. I am going today to talk with the CFO to get some answers on justification of the rate hike today. Unlike you, I go right to the source for answers as there is always 3 sides to every story. Thank You for your comments and information but it’s wrong. Also how many of those employees at STPUD do you think actually live here and go into local places? Long Time is right also, it’s 4% per year for the next ten years, that’s 40% or over $320.00.
Concernintahoe and Julie stop drinking the STPUD Kool Aid!!! Justify the rate increase however you see it but-if they need a rate increase to make improvements then they’ve failed to plan for it by saving out of their current budget!! And as LTN points out, they used past increases not for improvements but for pay raises!! And have they noticed the world around them, did you see there salaries?? It would be nice if they made some sacrifices before asking the citizens to pay more!!
I’m guessing that property owners don’t read their mail?
STPUD sent a letter to all property owners last month that gave detailed instructions on what to include in an objection letter – including the APN# which you have to phone STPUD to get because it is not on your statement.
I’m one of the 66 who took three minutes to write an objection letter to STUPD’s greedy rate increase request.
I’m just wondering why the other 16,900+ outraged customers haven’t taken three minutes to write their letters of objection?
We can stop this outrageous rate increase, but it does take a tiny bit of effort on our part.
Is anyone else up to the challenge? Write your letter of objection today.
I’m surrounded by friends and family members who have lost their homes to foreclosure, lost their jobs, lost their health insurance and those greedy, over-paid STPUD employees want more?
I’m also surrounded by co-workers who have been laid off, others whose hours have been cut and I’ve had a pay cut.
And that greedy STPUD wants more? Enough is enough. Just say NO.
Due to annual compounding, the proposed yearly 4% rate increase actually comes out to more than 40% in 10 years. So in just 3 years that’s over $100 yearly increase per property, and continues to grow exponentially larger year after year due to annual compounding. Like a train going down the hill with no brakes.
I understand that it is 4%/year that portion of my comment was poorly written. I also understand compounding. An extra hundred dollars per year in the future is not really that much in retrospect to what the District is doing in building the infrastructure in the community. Bum there are no services to cut. Maybe they should just stop pumping water from wells for a few days so that they can save on the electrical costs that are incurred. Many of the STPUD employees eat lunch here and do live up here. I know a few of them the frequent my establishment and I am blessed every day that they come in. Do a quick salary survey online at a site like career builder you will see that their salaries are not the out of line with positions in other parts of the country or even close by. As for bum saying that I am misinformed. I merely did not type out the whole thought I do know that it is 4%/year for ten years. Also, it would take longer than 3 years to get up over $100 more per year. The first year would be an additional 8.1/quarter, then 8.42/quarter, then 8.76/quarter. It seems as though the all of you claim to be against this rate increase just think that since everyone else has furloughs that the employees at STPUD should have furloughs too. In order to plan anything including a business responsibly you have to be able to forsee what is to come in the future and try and compensate for it now. All you are doing is proving that you all want the status quo for lack of growth and no new industry hear. Because industry will not go where there is not adequate infrastructure. Heaven forbid someone makes an honest wage in this town. I will state again. Thank you STPUD for planning for the future of this city and county and you have my vote for a rate increase every year for the next ten years and while I am at it thank you for the meter on my house so that I may learn to adequately conserve water and protect our local environment!
Just so you see real math skibum it is 4%per year not 4%*10 years those do not equal the same thing…again you are giving misinformation to stir angst against STPUD for your own sideways motivations now please stop harassing me through emails.
Oh an by emails I mean through the tribunes private messaging.
Julie…There is a rate subsidy available for customers who may be experiencing hardship.
LETS PUT THIS INTO PERSPECTIVE.
The population is supposed 30.000 people!
1 in 3 are without jobs.
That’s 10.000.
Some where along this equation there’s people who rent,this will in the end be passed on to them and private home owners.
If anyone remembers back when the private dwelling got charged for two flushing toilets,but there are many whom only have one.(less water)
The town has vacant second home owners around 70% in the winter.(less water).
How can they lose money when the pumps using less (energy) to supply the smaller winter population?
Now we got the big places like Heavenly Village, Embassy,TIMESHARES, etc. which do use more water.
Seems like the bigger places should pay more.
Also it would seem fairer if the current year round residents would only have a rate increase in the summer months.(June to Sept.)
Another thing is properties that have the automatic watering system ,wasting water(pump cost, running down the streets)) pay a increased amount than residents that water by hand.
Running water is a luxury,the rate increase seems a little high taking things into account. Can’t this be done with fairness to all?
People need to stop think hard about this,we sure in the hell don’t have a water Shortage Here.
CAN WE SAY WE ARE BEING GOUGE WITH THE FAMOUS TAHOE LIFE STYLE ONCE AGAIN ?.
Thanks Concern for your thoughts. Just so I set the record straight about e-mails, YOU were the one to start sending me private e-mails and I just responded in reply to the private messaging. I have been very civil as you have not through your private e-mails. I just spent an hour with STPUD and they were very helpfull in their information and answers to my questions. They do present a good case for the 4% increase but I will go to the meeting as you should too, there they will present their case and answer questions. I eat in your place also and see the guys there and talk with them quite often as I know most of them also. You should be blessed with business as most are not doing as well as you.
Been here for twenty years, seen this utility replace or repair their infrastructure with no regard to the traveling public. Gee, lets abandon in place the old and build the new right next to it. Let’s trench the roadway and install manholes right in line with vehicle and cycling wheel paths,then when the trench settles in two years, let’s tell the City or County it is their problem. Don’t even ask how much broken transite remains in the ground.
I’m also suprised no one has commented on the City’s recent approval to raise fees. Could these new fees be geared towards paying for the Fire & Police raises? Wake up STPUD and the City, people in this town are going broke and you feel you need to keep spending like it is 2005. Please everyone, vote this rate hike down.
Well now that skibum has decided they may have a good reason for the 4% it must be ok for the rest of us then. Until they PROVE they have cut expenses, salaries, gone on furloughs and taken every possible opportunity to reduce expenses like the rest of us, their RAISE of 4% is not right.
I don’t care how many of you STPUD employees get on here and defend your actions and greed but the public doesn’t buy it. You might get away with it because you use this protest thing to impose fees you don’t deserve.
it’s not right YOU OWE IT TO US TO SHOW US THAT YOU HAVE CUT EXPENSES F I R S T , cut expenses, cut salaries , work with the city and county to cut duplicate services.
WHen you show what you have CUT then explain why you RAISED salaries the VERY YEAR OF THE BIGGEST RECESSION IN THE COUNTY’S HISTORY. When everyone else was drowning you RAISED YOUR PAY? how do you live with yourselves?
You First Cut expenses and then raise rates only when there is no other options.
Funny you should bring that up. That’s exactly what I am going to ask them to do at the meeting, pony up and suffer with the rest of us. Yes they do have compelling reasons, other than employee benefits, for a rate hike but that does not mean I aggree with it. They will present the same ,their, facts and figures at the meeting and allow us to ask questions of which I for one have many with concerns as where exactly does the rate hike go? The board is not going to make a decision that night but mull on it until the 20th. One thing we should watch out for is MLM waffling on her decision as it will affect her friends at the district (her words not mine) I hope we fill that place.
Are they going to fix the water pipes in my neighborhood yet? My water is yellow. Again. Gets annoying, rate increases but no better service. It’s not like we have a choice.