San Diego Business Journal

Commentary: Otay Water District’s Actions Could Soak Its Ratepayers

By Lani Lutar Monday, August 8, 2011

Since 2001, pension and retiree health care costs for district employees have increased by more than 193 percent and 638 percent respectively. Last year, employee retirement related costs alone accounted for 23 percent of the district’s administrative budget without a drop of water ever having traveled through the system to a customer’s faucet.

Generous Benefits

The district provides more generous retirement benefits than many water agencies across the region. Taking the average base salary of $176,000 for district executives and assuming 20 years of service, an executive would receive $96,800 annually for life upon retirement, plus annual cost of living increases.

It doesn’t take a budget analyst to recognize that the Otay Water District has a significant governance problem and these cost increases cannot be sustained forever on the backs of ratepayers.

This egregious giveaway of ratepayer money highlights a bigger, more troubling issue. The proposal was not requested by a labor union. The district’s management first proposed this sweet deal for itself, and now intends to extend it to employees.

Call it salt in the wound or a slap in the face. We call it time for action.

The San Diego County Taxpayers Association urges ratepayers to insist that the Otay Water District board rescind its recent vote to enhance lifetime medical and dental benefits with no cap on costs for managers, and abandon the plan to approve a similar deal for the rest of its employees. The deal is self-serving and completely irresponsible, especially in the face of our region’s water supply challenges. The district’s spin on the purported savings is more than disingenuous. It is blatantly dishonest.

Lani Lutar is president and CEO of the San Diego County Taxpayers Association, a nonprofit, nonpartisan organization founded in 1945 to promote accountable, cost-effective and efficient government.

Page 2 of 2

Next