Wow! What a great Pension & OPEB & Labor Negotiations Program!  From the why, to the details, to the how! Confirmed many things that I have been shouting all along as a Board Member at Helix Water District...but being the silent minority, sometimes you just are not heard. Hopefully, after November 2016, there will be change and perhaps the Board will be able to get the Helix Water District General Manager to look at our $54 MILLION Dollar UNFUNDED Liability SERIOUSLY!
Here are my notes on the program.

August 18 – 8am-5pm; San Diego County Taxpayers Association – Pension Certification Program (expense/per diem). GREAT Program, highly recommend for all elected officials and people involved with overseeing the Financial/Pension/OPEB/Labor Negotiation Programs.

• SIDE NOTE: Helix Water District according to our Actuarial for June 2014 has an Unfunded Liability of $30 Million for our Retirement Pension and our Actuarial for June 2015 Unfunded Liability of $24 Million for our Other Post Employment Benefits (Post Retirement Health Care Benefits).

• Creating and Managing Public Value: Presentation from Haney Hong, President & CEO of Taxpayers Association regarding
  • Because public employee retirement programs create a public financial obligation, officials who propose and oversee/manage such programs have an ethical obligation to ensure their legitimacy and effective and efficient use.
  • Legitimate – Process Philosophy
  • A public financial obligation means that a citizen is obligated to give up property in the form of taxes (rates). But it isn’t enough to just be obligated; you want citizens to feel that they out to relinquish property for a good reason.
  • Process should be public and account for varying viewpoints, employees and public consideration.
• Public Pensions 101: April Boling, City of San Diego Citizens Pension Reform Committee – Board and Public Understanding Perspective…
  • Explanation of defined benefits and pensions explained, Normal Cost (New Charges), Unfunded Actuarial Accrued Liability (UAAL, Previous Unpaid Balance), Interest on the UAAL (Interest on Unpaid Balance, when returns are low, need to replace the 7.5% Expected Rate of Return) Bottom Line the Tax Payers pay for any shortfall.
  • Annual Required Contribution Formula is the Normal Cost and Payment on the Unfunded Actuarial Accrued Liability.
  • What are the causes/sources of unfunded liabilities?
    • Experience Investment Losses
    • Actuarial Experience
    • Past service benefits (some retroactive benefits)
    • Failure to make required contributions (when superfunded, payments were not required and some agencies did not pay their regular payments).
    • Negative Amortization! CalPERS does this!!!
  • Smoothing is when the Market Value of Assets is greater or less than assumed and they defer gains and losses over time. Most agencies smooth over a period of 4 years, CalPERS does this over 19 YEARS!
• Actuarial Aspects of Public Plans: Bill Sheffler, Actuarial, Executive VP of SMI Pensions – worked with the City of San Diego Pension Reform Committee.
  • Questions to ask about the valuation report was discussed:
  • If we continue to fund as we did last year when will our funding ration hit 100%?
  • Are there any operational changes that would improve the plan’s security, or efficiency?
  • Are there any concerns about data quality?
  • Perform a Stress Tess – a future projection of the plan’s financial condition which assumes that the expected results are not obtained – assume a 1% more or less and see how that affects years after.
  • What is the impact of employee turnover on pension payments? Increased turnover reduces plan costs in general.
• Negotiatng Pension & Retiree Benefits: Timothy L. Davis, Labor & Employment Law Negotiator.
  • Basic Scope of Bargaining
  • Negotiations should ALWAYS be in WRITING! (Hdndt)
  • All Negotiations should include cost impact! (Hdndt)
  • Any rejected proposals can be disclosed to public, just cannot disclose the debate.
  • Retirement Pensions – are Constitutional Contract Clause – Cannot take it away, given at time of employee is hired.
  • OPEB – Health Care Benefits – is an employment benefit, not a pension benefit!
  • OPEB vests upon retirement, terms set at time of retirement
  • Can change OPEB any time before they retire.
  • Always negotiate in good faith!

** Dear Friends,

Here is the link for the board package for our Regular Helix Water District Board Meeting:

AGENDA

REGULAR MEETING OF THE BOARD OF DIRECTORS

Wednesday, August 17, 2016, 2PM

7811 University Avenue, La Mesa, CA 91942-0427

Interesting items:

Item 5. MINUTES for August 3rd Board Meeting (pdf page 8) - The board adopted in a 3 to 2 vote (YES - Muse, Linden Verbeke to NO – Scalzitti, Hedberg) to raise your water rates 10.1%. Water rates effective on billings after January 1, 2017 from water use after November 1 depending on billing cycle.

Here are two articles on the vote and have many of my comments and concerns that I expressed at the Board Meeting:

Union Tribune Article http://www.sandiegouniontribune.com/news/2016/aug/11/tp-helix-water-rates-to-rise-cost-for-average-us/

East County Magazine HELIX WATER BOARD VOTES 3-2 FOR 10.3% RATE HIKE WITHOUT PUBLIC HEARING: CANDIDATES BLAST INCUMBENTS http://www.eastcountymagazine.org/helix-water-board-votes-3-2-103-rate-hike-without-public-hearing-candidates-blast-incumbents

Item 6. Public Hearing on Proposed Addition of Fees and Charges to the Policies and Procedures Manual for the Lake Jennings
Recreation and Campground Operations
 Addition of tee-pee rental venue at the campground (ribbon cutting soon).
 & kayak rentals for the recreation program
More great improvements from suggestions of the Lake Jennings Committee (BOARD DRIVEN!!!) thus, the reason why the Lake Rec is now for the first time ever making a profit!

Item 10. Drought Update (pdf page 43)
The Board Report will show you that we are still cumulative 21% since monitoring in 2015…but this is my analysis!
July’s 2016 16% reduction vs. the July 2015 32% – that is a 16% difference!
Customers used 16% more water last month than the same month last year! Coupled with June’s 21% vs. June’s 25% reduction last year of another 4% difference…Thus, my 2016 Cumulative summary compared to 2013 is -18%.

However, just one week before this water use report came out (done in house)…our General Manager & staff said that we need to raise rates over 10% as customers will NOT be using more water than last year and our budget will fall short, thus they went with an estimated cumulative -20%!

Joel Scalzitti and I said let’s wait and see…because if we raise rates over 10% people will use less water once their bills come in!!! Jeeze…hopefully, come November, we can change the Board dynamics and reverse some of this…and not continue down this death spiral…increase rates, water use lower, lower revenue, budget shortfall, need to increase rates…our customers cannot afford these outrageous rate increases year after year!
As always, I welcome your comments and feedback.

**
Dear Friends,
Here is the link for the board package for our Regular Helix Water District Board Meeting:

AGENDA
REGULAR MEETING OF THE BOARD OF DIRECTORS
Wednesday, August 3, 2016, 2PM
7811 University Avenue, La Mesa, CA 91942-0427

Interesting items: 
Item 8. Water Rates (pdf page 49) - The board adopt Resolution 16-34 adjusting the schedule of rates for the fiscal year 2016-17 water service fees and amending Section 2.12-2(8) of the Helix Water District's Policies and Procedures Manual.
 
As stated in the report during a May 11, 2016 Water Rate Workshop the Board:
 
Instructed staff to calculate water service fee revenue for the fiscal year 2016-17 preliminary budget, assuming that customer water use would increase to a 15 percent conservation level in comparison to water usage in 2013, The board at that time also asked staff to provide an update later this summer regarding any change in customer water use through the typically warmer, drier months of May, June and July, as well as any changes in permanent water use regulations mandated by the state, This board report provides those updates, as well as a recommendation regarding adjustment to the rates for fiscal year 2016-17.
 
However, Staff brought back to this board meeting for FINAL APPROVAL Two Scenarios:  

Scenario 1 (As Board Suggested Consideration on May 11 Workshop)
Assumes that customer water use is 15% less than use in 2013. This reflects customer water use of 96.3 gallons per capita per day, an 8.1 percent increase from the current 89.1 GPCD. This results in a bimonthly bill for the district's average domestic water customer of $127.77, which represents an 8.3 percent or $9.84 increase from the current average bill of $117.93
 
Scenario 2 – STAFF Recommended
 Assumes that customer water use is 20% less than use in 2013. This scenario assumes customer water use of 91.0 gallons per capita per day, a 2.2 percent increase from the current 89.1 GPCD. This results in a bimonthly bill for the district's average domestic water customer of $129.84, which represents a 10.1 percent or $11.91 increase from the current average bill of $117.93. Staff recommends that the board adopt the rates that are developed under this scenario, since water use is cumulatively over the past year 21% less than 2013.

Scenario 1 - 8.3% increase vs. Scenario 2 - 10.1% increase

Please note this is less than the presumed 11.6% increase just a year ago based on average 26 units of water vs. now at 18 units of water a very different comparison…***

The facts:
1.Last year mandatory water use restrictions -  2 days per week.
2.This year mandatory water use restrictions – No Limits on Watering Days
3.Last 6 months average conservation 16%
4.Last year month of June conservation 25% & this year month of June conservation 21% - a 4% increase in use since restrictions were lifted compared to last year.
5.We can always increase the rates if needed (up to 11.6% if water use is less than expected on a later date), proposed rate of 11.6% was approved on October 7, 2015 in a 5 year plan.

***Original 218 Notice approved by the Board in a 3 YES by Muse, Verbeke, Linden vs 2 NO by Scalzitti, Hedberg on October 7, 2015 in a 5 year plan.

Please note billings after January 1, 2016 water rates effective on billings (water use after November 1 depending on billing cycle).
 
So what do you think - 8% or 10% water rate increase?

New Video on the Helix Water District website - Water What You Pay For Video  

As always, I welcome your comments and feedback.
 
Blog is on my website of past meetings & comments…check it out!
 
Kathleen Coates Hedberg, P.E., M.P.H.
Director, Helix Water District Board
11263 Explorer Road
La Mesa, CA  91941
H619.660.7487
C619.994.6900
www.VoteHedberg.org
www.hwd.com
www.lakejennings.org (go fishing & camping)
www.socalwatersmart.com  (rebate link)
Thomas Paine Liberty Torchbearer Award Winner
 
Per the request of the Helix Water District Board on May 16, 2012, the following language is to be added by all Board Directors in all outgoing Director correspondence. "This correspondence, and any documents attached hereto, reflects the individual opinions and positions of the above-named Director and does not represent the opinions or positions of the District's Board of Directors or the District.  Pursuant to Section 9.1-11(A) of the Helix Water District Policies and Procedures Manual, individual Directors, except as otherwise authorized by the Board, shall have no power to act for the District or the District's Board of Directors."
 
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