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MCWD Board approves raise for GM

  • by Katie Vane
  • in News
  • — 22 Jan, 2016

Will also consider water shortage surcharge to make up declining water sales revenue.

The Mammoth Community Water District (MCWD) Board gave General Manager Pat Hayes its vote of confidence with a three percent raise approved at the Board’s December 17 meeting.

Board Vice President Tom Cage said the 3 percent raise will bring Hayes’ salary to $171,660. Hayes also received a $9,000 bonus. His benefits are now about $58,787.

Cage stressed that Hayes was first hired “at the bottom of the scale” in 2013. “We said, ‘Show us what you can do,’” he said.

Hayes was paid $145,000 in 2013, plus $31,800 in benefits, according to transparentcalifornia.com.

Cage said that the Board agreed upon a six month review, which afterward became an annual review. According to Cage, Hayes’ salary went up to $160,000 after that review. In 2014 it rose to $166,670, while his benefits increased to $56,749.

Regarding benefits, Cage said MCWD does not use PERS retirement because of how drastically PERS’ required annual contribution can fluctuate. Instead, “We decided to give a certain contribution to employees’ retirement fund … every pay period we contribute 20 percent [of their salary] into the retirement account of each employee.”

When their employment with the District ends, so does the District’s contribution to their retirement account.

In addition to the 20 percent contribution to Hayes’ retirement account, Hayes also receives health insurance, which went up by 16.5 percent this Fiscal Year over last, according to MCWD Finance Manager Jeff Beatty. MCWD belongs to the Association of California Water Agencies (ACWA), and health insurance premiums are based upon the group’s negotiations.

The MCWD Board only approves raises for the two non-union employees, Hayes and MCWD Attorney Josh Horowitz. Cage said the last raise for union members was negotiated about two years ago, and was about 2.3 percent.

Cage said that when considering a raise for Hayes, the Board reviews “goals for the upcoming year; issues we’ve had; big projects that stay in budget,” and projects that have gone above budget. He said the Board was unanimously in favor of granting Hayes a raise.

“Mr. Hayes represents the District very well in my opinion,” Cage said. “He works hard both in the office and in the community. He has shown great leadership in the Ormat [Casa Diablo IV geothermal plant project] issue and continues to advance the strategic planning of the Board and the District and in the daily management of the District.”

According to the FY 2015-2016 budget, MCWD has run a deficit for the past four years. When asked why the Board would grant a raise to its General Manager while also contemplating a water shortage surcharge to recover revenue lost by State-mandated water savings during the drought, Cage said “It is not staff’s fault that it does not snow and our revenue is reduced. This is not a private for profit business.  It is the job of the District to provide for staff and provide their livelihood in a responsible manner. They need to have raises since they do not get a bonus when we have a lot of revenue.”

Cage also argued that the District’s revenue was still well-balanced. He noted that the Board has already approved another 2 percent increase in water rates and 1 percent increase in wastewater rates beginning in 2016, which will help cover reduced water sales.

That help is needed. Beatty reported at the MCWD Finance meeting on Wednesday, January 20 that while he had projected 15 percent less revenue from water sales, “we received about 12 percent less than that 15 percent.” 15 percent would have amounted to a $300,000 revenue loss; an additional 12 percent brought it to $439,000 less this Fiscal Year over last.

The Water District is also considering a water shortage surcharge to help cover this revenue loss. According to consultant Raftelis’ 2015 rate study and report, should the MCWD Board approve a surcharge, the average Single Family Residence would pay an additional $1.31 per month during Level 1 restrictions, $2.62 during Level 2, $3.93 during Level 3, and $6.55 during Level 4. Multi-Family Residences would pay the same surcharge.

Cage said that “Right now, if we had to vote today, I’d vote against it.” He said that the winter looks as if it could continue through spring, unlike the past four winters (MCWD Operations Superintendent Karl Schnadt reported that Mammoth’s snowpack is currently 74 percent of average). “But I also wouldn’t take us off Level 3 restrictions,” Cage added, noting that the District doesn’t know how long it will take for its groundwater wells to recharge after the historic drought years.

Cage argued that even with the increase of 2 percent, MCWD water rates are still significantly lower than those of comparable municipalities. That’s because when the Water District formed in the ‘60s and ‘70s, it was granted a portion of property tax. Property tax contributes about half of the District’s revenue, or typically about $6 million a year, he said. Water and waste water rates, grants, permits, and interest contribute the other $6 million.

But Beatty also reported at Wednesday’s Finance meeting that property tax revenue allotted to the Water District is down by about $250,000. He said he would budget the coming Fiscal Year based upon what the District received this year, anticipating property tax would remain flat.

Cage said those numbers would be of interest to the Board in its discussion of the water shortage surcharge on Thursday, January 21.

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— Katie Vane

Katie is a writer at The Sheet.

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