By Greg Gruzdowich
Rancho Santa Fe, guest commentary
Rancho Santa Fe, guest commentary
On Oct. 21, 2010, I attended the Santa Fe Irrigation District (SFID) public meeting to hear about yet another water rate increase. I have lived in Rancho Santa Fe for 17 years, and have recently been moved to outrage about how our water district is managed. I guess you could blame it on the fiasco in the city of Bell, but maybe that’s a good thing. All of our public service agencies should come under higher scrutiny; this should have happened a long time ago.
I learned that our SFID was formed about 80 years ago, and the management of the district doesn’t seem to have changed much over the decades. In our internet age of “instant communication” we still seem to manage agencies like the SFID as though Rancho Santa Fe was still lined with dirt roads.
This ongoing process is structurally flawed though our California legislature which allows and seems to require this “rigged game” to continue. The SFID told the audience that they run as a separate entity and have to rely on water rates and projects for their revenue and need to balance their own expenses. Yet the board of the SFID can easily raise water rates any time they want; just look at how rates have increased over the past few years. Our water rates have increased about 50 percent over the past couple years and the SFID wants to increase rates another 40 percent over the next three years! With the wholesale cost of imported water increasing in San Diego, the inefficiencies of having 24 separate water districts throughout San Diego have finally come under a glaring light.
The Rate-Hike Process is a “Rigged Game”
Here’s the first thing that got my attention. I get a notice in the mail (about two weeks after the date on the notice), saying that rates are going up and that there will be a public meeting in 45 days. So now, in reality only about 30 days are left until this meeting. I send in an email of protest, only to be told that it must be in writing with a wet signature and must list a variety of specifics to be considered a valid protest letter. So I write the specific letter and then learn that unless 50 percent of all ratepayers file this specific written letter of protest, the Board of Directors can ignore these letters and do whatever they please and pass the rate increase by themselves. In fact, this is exactly what one SFID Board member, John Ingalls, tried to do in this meeting. He wanted to disregard the public protest and called for an immediate vote to pass a rate increase.
I am willing to bet that if you offered each ratepayer $1,000 but required at least 50 percent of all ratepayers to write a letter within about 30 days, you would never get the required amount of letters. This is the “rigged game”, and is the process that agencies like SFID count on so that they can pretty much do as they please. This process needs to change. In essence these “fees” are just taxes in disguise, are without voter approval, and allow inefficiencies to continue un-checked.
Salary “Compensation by Comparison” is also a Rigged Game
I just happened to be reading a CNN article about the highest paid workers across the country while I was getting ready to attend the SFID meeting. I couldn’t believe that if you looked at the salary of our SFID District Manager, it would put him in about the top three or four positions for pay and benefits, equivalent to physicians and surgeons. To me, this is a clear example that our SFID board has lost its way in being vigilant with the public’s money.
This common practice of determining salaries based on comparison is also a rigged game. Every board tends to consider their agency’s employees as average or better (if they were below average, wouldn’t they be fired?). So by basing salaries on these ever increasing averages, everybody gets higher salaries, because that’s the way the math works! It’s a pretty simple process and it guarantees a salary increase every time. But this process has NO economic rationale; it’s just the mathematics of a continuous upward salary spiral.
I would find it hard to believe that being a water district manager is such a demanding job that requires such a ridiculously high salary (don’t even get me started with pensions and other benefits). Again, I am willing to make a prediction that this district manager position could be performed by a recent civil engineering graduate with a bachelor of science degree. This person would be steeped in the use of technology and would cost the district less than half of what we are now paying.
Board Members Should be Financially Disinterested
Maybe I was naïve, but I thought for years that people ran for these political board positions to “give back to the community” and had altruistic motives for the public good. I assumed that board members were volunteers that were not paid for meetings and never in my wildest guess ever assumed that these part time board members would be getting paid health and dental benefits. As I mentioned in the public meeting, I have a hard time understanding why ratepayers should be paying these seemingly wealthy board members to have their teeth cleaned, etc.
The obvious solution to this dipping into the public till would be to have the board immediately relinquish all compensation including extravagant perks like health and dental benefits. I would be ashamed to be taking this type of public money, and would hope that the board immediately stops as well. According to RSF Review, changing to a true volunteer board would save the district over $100,000 per year. Yet what I heard one board member say was that health and dental benefits were a perk – in other words, we’ve always gotten away with it, so why should we change…
“We” i.e. “the Public” Can No Longer Afford 24 Water Districts in San Diego
Over the past 80 or so years, San Diego created a hodge-podge of 24 water districts. Many of these districts are tiny by comparison and according to the Union Tribune, SFID serves only 7,300 meters out of the hundreds of thousands of meters throughout San Diego. Once these separate water districts were created and their funding was secured through the guaranteed rate increase process mentioned above, they have become almost impossible to govern efficiently. Why won’t four or five or six water districts be sufficient now that our infrastructure and ability to communicate has evolved? For example, why doesn’t SFID merge with Olivenhain, San Dieguito and Del Mar just to get some meaningful consolidation started. Right away, combining these four water districts would allow us to shrink duplicative administrative staff by 75 percent, and three out of the four existing water district managers would need to look for new careers.
As an extra benefit, with this example of consolidation, three out of the four current boards would no longer be needed, saving unnecessary bureaucracy and their related expenses. Perhaps out of all those board members we could find enough true volunteers to fill one re-structured board.
But Will it Ever Change?
Based on my observation of the public meeting I just attended, I am not encouraged that a wholesale change will occur. Wouldn’t it have been great to hear at least some of the Board members agree that they should no longer be paid, or that they agreed that salaries (and pensions) have gotten way out of hand? The main reason that I am discouraged about real structural change is that the parties that are required for change have no reason to create change. Will Board members stop taking public money? Will reasonable salary reductions occur (I’m not talking about postponing raises; I’m suggesting lowering salaries and related benefits). Will capital projects be put on hold? Or will rates just keep going up to cover up this mess a little longer?
During the non-public portion of the meeting I became even more discouraged. One of the board members mentioned that “revenues were down, which will create a bigger problem for our budget.” Too bad we conserved too much…
And when we’re through discussing the water district, has anyone checked current board policies, payments, and perks for our local fire districts?