Little seems to amaze me anymore when it comes to Ironhouse Sanitary District as their latest newsletter basically gives the Board of Directors credit for not raising the rates as high as Executive Director Tom Williams wanted. This is exactly the kind of nonsense as to why I am running for one of the three seats so that I can work to end this reckless behavior.
If you recall that in May, Mr. Williams proposed an increase that would skyrocket rates from $592 to $650. Keep in mind, this was the same Board of Directors that a month earlier were about to move forward with a $5 million solar project which would have further increased rates an additional $21 more a month on top of the proposed rate increase—after I brought this public, they backtracked and killed this plan.
Below is the text of the portion of the Ironhouse Newsletter which I am questioning for many reasons which are explained below. Please note, that if this was a Senate or Assembly race, this would be an illegal piece of mail due to campaign laws since Ironhouse has three open seats—one which I am running for.
While I admit the newsletter looks nicer than in the past, it’s the information they didn’t tell ratepayers which is troubling to me and lacks any sort of transparency. There text is in bold, my comments are immediately after.
ISD directors approve scheduled rate hike lower than expected
The ISD Board in June approved a 4.4 percent rate increase for the 2012-13 fiscal year as part of a scheduled series of annual adjustments to finance the Water Recycling Facility.
They failed to mention that actual increase and used the 4.4% number because it “sounds good” as few ratepayers will think it’s a big deal. Truth is, your rates jumped from $592 to $618 for little reason other than staff moral and to give pay increases to staff.
The first payment on the $59 million construction loan will occur this fall. The new rate was lower than projected, and includes a 2 percent cost of living adjustment so ISD salaries didn’t dip too far below comparable industry means. However, the budget for total wages and benefits decreased 7.4 percent from last year, primarily due to staff attrition and some benefit cost reductions.
What Ironhouse is not stating is their big “oops” moment when it came time to pay the $3 million portion of the loan each year. As Tom Williams explained to me when I met with him, this was an oversight and they are looking into options. Basically, as required by the loan, the account has to have nearly $3 million in it at all times. If they pay the loan, the account is then at zero—they are now in violation of the loan. This means, they have to pull from reserves, get a bridge loan, or increase rates to bring this account to about $6 million so they can always have $3 million after payment. Basically, they took $6 million of our money out of play at all times to pay this loan back. The most likely scenario is rate increases will continue like they have for every year since 1999.
Also, does the ratepayer really care about the cost of living increases for employees? No, we want our rates to be fair as we are the highest charged in the area by far.
The cost of living increase amounts to about 1.5 percent of the entire rate.
Is this supposed to justify rate increases and salary increases in a down economy? This is nothing more than a line that was designed to make the Board of Directors and Tom Williams “look good” while really saying nothing other than trying to justify a rate increase for the wrong reasons.
“A lot of careful budgeting was done to keep the rates down as much as possible,” said Tom Williams, ISD general manager.
A lot of careful budgeting was done by Tom Williams as he generated a total of five different budgets which is excessive and excuse me for being blunt but was a complete waste of time. His generating of the multiple budgets was also the excuse given to me as he was “too busy” to respond to simple questions about salaries and benefits of staff and directions in May. It’s September and still has not responded with all of my request for information.
This careful budgeting is a flat out lie, they are not trying to keep the rates as low as possible, if that were true, the rates would remain the same at the very worst—heck, even a reduction is doable if they tightened their belts like nearly every other entity in Contra Costa County. If Mr. Williams statement was true, we would not have had an increase every year since 1999 while the board takes advantage of overly generous meeting stipends and medical benefits.
Savings included a one-time $280,000 PG&E energy efficiently rebate, as well as money the district made on cattle and hay sales.
It’s nice of them to bring up their cattle and hay sales. Did you know they do not line item the actual cost to for those operations, instead, it’s simply put in their Operational Budget which means technically we do not know if they actually make money or if the profit is as high as they claim. Until they claim the actual costs to farm and raise cattle, its up for debate on this claim. I asked, he had no answer because he simply stated “we don’t track that”.
ISD will continue to find ways to save ratepayers money, such as through green energy and possible sale of our new, highly treated recycled water. “The investment of building the new facility allows us to protect public health and safety, as well as provide environmental benefits,” Williams said.
Until they prove financial responsibility, this is another lie. If they really wanted to find ways to reduce their budget, there are a number of things which include:
- Eliminate Board of Directors Medical Benefits which begin at $625 a month up to a family plan of $1,588—yes, this includes wife and kids and lifetime benefits. Keep in mind; this is for one meeting per month. I am told my opponent; Mike Painter is on this family plan.
- Limit Board travel which has become excessive—from what I’ve been told, cannot confirm because Mr. Williams has failed to provide me with the data upon request, my opponent David Contreras has been abusing the travel policy.
- Eliminate the $17,280 car allowance that is budgeted for the Executive Director and six senior staff who opted to receive cash instead of driving a district vehicle to/from home and work. One employee commutes to and from Walnut Creek.
- They pay $60,000 in memberships to associations which needs further review
- They allocate $9,000 a year for what is deemed “staff moral”, this should be eliminated until rate increases stop.
While the Contra Costa Times and Oakley residents want to complain and focus their energy on Bryan Montgomery and the City Council for the City Manager Housing Deal, the truth is, Irohouse Sanitary District trumps that by far. They get away with this reckless behavior at Ironhouse because few are paying attention.
What has gone on at Ironhouse is nothing short of criminal and it needs to stop immediately.