Water and Health Care

I love a lot of things about this job, but most of all, I love the letters. Every week or so, I receive an envelope in the mail without a return address.

Sometimes it’s a letter. Usually type written and rather kooky. Other times, the letter makes sense. Not long ago I got one about concerns that the San Diego city fire chief now has to report to far more people than she ever had to before Jerry Sanders took office. The result, the anonymous letter said, has been that nothing gets done.

Sounded like an interesting angle that I might want to follow up on.

Other times, I receive just documents. Each time I see them, my eyes light up as I imagine that I might be opening the next Pelican Brief or something. But nine times out of 10, they are incomprehensible. And since they come anonymously, I can’t check with the source.

So I have a file. I decided I’m going to start passing them along to you. Whatever they are. I’ll follow up on the good ones.

This week I received a copy of a report to the board of directors of the San Diego County Water Authority.

I love water. I think this region’s relationship to fresh water and the politics and systems that have to be maintained to keep it flowing are incredible.

But the report was from the imported water committee of the Water Authority. As you no doubt know, San Diego County must import a vast majority of its water. And it does this mainly by contracting with the Metropolitan Water District, or the Met.

Now, the Met is a massive and very powerful organization and its relationship to San Diego has always been less than perfect. But that’s the nature of water in Southern California.

Anyway, the report that was sent to me had a discussion of a brewing storm at the Met. Apparently, like all government agencies that have been giving health care benefits to their retired employees, the Met is staring down the barrel of new accounting rules. The new rules will require the agency to disclose exactly how much it will have to pay in health benefits and then start funding it like a real retirement benefit.

In other words, the agency is facing a massive looming liability.

Staff reported that MWD has an actuarial accrued liability of $310 million and that the annual required contribution for fiscal year 2005/6 is $29.8 million.

This is how much the agency would have to pay to fully fund all the health care benefits for retirees. Now, how much is the agency actually paying?

This compares with MWD’s actual payment for 2005/6 of $8.4 million. As employees age and retire, MWD’s unfunded actuarial accrued liability will grow, unless changes are made.

Your eyes might be in the back of your head right now, but this kind of thing is a big deal. It’s the kind of looming liability that is crushing companies like General Motors, Ford and United Airlines. Retirees from the county of San Diego just found out that they may lose about $400 each per month for health care so that the county can cope with the same problem.

If the Met has to cough up a lot of money, that could mean more expensive water in San Diego. And as most thinkers around here know, water is everything.