By Francine Phillips
September 16, 2009 (San Diego)--The largest provider of water in Southern California, the Metropolitan Water District (MWD), based in Los Angeles, has completed its final round of labor negotiations of a five-year contract that includes a hike in retirement benefits that has stakeholders in San Diego crying “foul.” Last week pension particulars were spelled out in preparation for a Sept. 15 vote by the District Board, including four San Diego region delegates. But at yesterday's meeting, MWD issued a statement that the vote has been postponed "to make sure that all facts regarding this proposal are fully understood by the Board of Directors and the public prior to any vote." A public workshop is set for 10 a.m. on Tuesday, Sept. 29 at MWD's Board Room in Los Angeles.
On Friday, San Diego Mayor Jerry Sanders sent a letter protesting the 25 percent pension increase that will cost an estimated $70 million in future payouts.
“Any increase in costs at MWD translates into an increase in water rates for San Diegans,” wrote Sanders.
Along with Sander’s letter, the Internet was awash in editorial outrage as taxpayer associations, elected officials, online pundits and experienced journalists questioned the proposed pension increases.
Are they right? The San Diego County Water Authority, a collection of 24 local agencies which provides water to 3 million residents, approved a $1.65 billion two-year budget on June 25 that reflected the MWD’s approved 21 percent rate increase in treated water that went into effect Sept. 1. The correlation between the 21 percent rate increase for the District’s 19 million customers and the 25 percent pension hike for just under 2,000 employees has made the contract a bullseye target for criticism.
In addition, the MWD retirement investment fund has reported a $400 million loss, bringing into question the proposed increased benefits that will raise retirement rates for long term employees from 50 percent of their salaries to 62.5 percent.
Included among those speaking out against the proposed pension hikes are MWD delegate W.D. “Bud” Pocklington, president of the South Bay Irrigation District, who has been on the MWD board since 1997. Pocklington has gone on record that his is a “no” vote. Two other regional delegates, Jim Barrett, director of public utilities for the City of San Diego, and Fern Steiner, a City of San Diego appointee to the MWD board, have not gone public with their voting preference. The final delegate from our region, Keith Lewinger, general manager of the Fallbrook Public Utility District, has said that he has not made up his mind.
Employees of MWD do not contribute to Social Security for retirement benefits, but accrue benefits from contributions to the California Public Employees’ Retirement System (CALPERS) which are paid by MWD, and from a matching 401(k) plan that vests after six months of employment.
According to the MWD recruitment Web site, the following benefits are currently extended to employees
• A choice of medical coverage from two different HMO's and two PPO's. The district pays for medical insurance for the employee and family members, including domestic partners, in all plans except one of the PPO's.
• Dental insurance is provided at no cost to employees and family members, including domestic partners.
• Vision insurance is provided at no cost to the employee with an option to purchase family coverage.
• Life insurance is offered in varied competitive amounts based on bargaining unit.
• Deferred compensation in the form of a 401(k) plan and a 457 plan. Matching for the 401(k) plan begins upon enrollment, after six months of employment, with immediate vesting.
• Retirement benefits under the California Public Employees' Retirement System.
• Tuition reimbursement up to 85% of costs for classes and programs or job-related courses.
• Fourteen paid holidays and three paid personal days.
• Access to an employer provided credit union.
• Rideshare and vanpool options available.
• A variety of flexible work schedules.
Concessions reflected in the proposed contract include relinquishing one paid holiday and one personal day, no salary increases in 2009, a limit on accrued annual leave to 400 hours, a 2 percent contribution of current employees to a Retiree Medical Trust Fund, and an 8 percent contribution to said fund by employees hired after July 1, 2009.
Proponents of the contract, including MWD’s general manager, Jeff Kightlinger, say that the new contract will cost the agency less than maintaining the status quo, based on the stimulus for early retirement from long-time workers.
"I totally believe that we all have to pay for our water costs," Dexter Levy, a retired plumber and water activist, told East County Magazine. "But anything beyond the actual costs of obtaining water is inappropriate. I've been a friend of labor for many years and I believe that pensions are a part of the whole wage package, but we have to get pensions stable and that means that the Calpers pension package should extend to water districts so it is not on the negotiation table separately. The key to the whole thing is that as the public uses less water, the costs of sustaining the infrastructure is going to go up. The MWD needs to account for that, even if they have to go back to the drawing board and look at every expense again.."
Levy concluded, "All districts have a major challenge and that is to find new sources of water. The districts need to look at the MWD peripheral canal, drill more wells, and pursue reinjection of reclaimed water into the aquifer. That's the real challenge that water districts are going to have to be dragged forward to meet."