Photo by Sam Hodgson
The public packed a hearing on Wednesday at the Otay Water District as the agency discussed offering lifetime health care to its employees after they retire.
After the shouting and gavel banging died down, the Otay Water District’s board voted 4-1 Wednesday to award lifetime health care to its union employees and pay most of the costs for their spouses.
Not before the district’s ratepayers — who on average pay a bill that’s $20 higher than it was in 2008 — let loose on the board of directors.
The visceral reaction evoked visions of the Congressional town halls that became a flashpoint for those angered by federal health care reform. It highlighted the growing frustration around the region among ratepayers who have endured years of water rate increases. And it underscored just how much Otay has struggled to explain its rationale for guaranteeing retiree health care for its employees at the time other government agencies across the country are trying to shed it.
The district’s leaders initially said adding the benefit would save money every year. It won’t save a penny until at least 2018, according to subsequent projections. The district plans to pay for the enhanced benefits by requiring employees to pay more toward their pensions (8 percent of their salaries, up from 1 percent today). Union employees will also pay an extra .75 percent.
The district says it could save $5 million total by 2046. Board members said they trusted it wouldn’t require the district to raise rates.
“We feel very comfortable with the information that has been given by staff,” director Jose Lopez said.
The district’s leaders have said they wanted to boost employee recruitment and retention. But they provided no evidence that it’s a problem today. Employees surveyed in 2010 said they happy with their compensation and benefits — even happier than they were in 2008. The district hasn’t struggled to hire an employee since 2007, before the economy crashed.
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Twenty-one speakers, many retired, weren’t swayed. None supported the deal. They said the district’s directors were arrogant and selfish to add a retirement benefit while others suffered in a down economy. While their rates increased. They said they’d fight for a recall.
There came Marilyn Jarman, a retiree whose water bill has increased the last three years while her Social Security has stayed flat. “Everything around me is going up,” she said. She was angry enough to call the district. “They told me it’s a wash-wash,” she said. “Nothing is a wash-wash.”
There came Evita Beas-McCullough, who said she, too, has tried to cut expenses as her Social Security check has stayed flat. “We are in a terrible situation right now,” she said. “I’m seeing people losing their homes, going into bankruptcy, having foreclosures. People are desperate and you’re talking about raising your salaries and your benefits?”
There came John W. Smith, who said he’s watched Wisconsin and other states fight unions to take back benefits. But not Otay, he said. “Our economy is in the toilet,” he said. “Everybody is feeling the straps. You people can just increase rates.”
Mark Robak, the lone board member who’s opposed the benefit, said he wanted an independent, unbiased analysis of the costs and financial assumptions before voting.
“I’m as unclear as ever of what those facts really are,” Robak said.
The rest of the board disagreed, voting 4-1 to approve the benefit.
Rob Davis is a senior reporter at voiceofsandiego.org. You can contact him directly at firstname.lastname@example.org or 619.325.0529.
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