The Alameda County Water District needs to be more open with customers about how much labor costs influence water bills, and be tougher in negotiations with labor unions, according to a newly released Alameda County civil grand jury report.
The district — which provides water to 350,000 people in Fremont, Newark and Union City — has raised rates every year except one over the past two decades, including the most recent hike of 25 percent over two years in February 2017, over the protests of dozens.
“The Alameda County Water District has not been completely transparent with the public about the role employee compensation has played in rate increase decisions: Regular increases to the salaries and benefits paid under generous labor contracts have made ACWD employees the highest paid within county water districts in California,” the report says.
It referred to a 2016 state controller’s report that showed Alameda County Water District employees had the highest average wages — $116,623 — out of 500 water providers in California, and criticized the district’s practice of “annually granting relatively substantial increases” to employees.
It said the district has made concerted efforts to engage residents about its finances through community meetings and notices, but is still being less than candid about where the money is actually going.
It referenced the district’s Aqueduct Winter 2017 newsletter that told customers “rate increases were necessary because of the drought, rising water treatment costs, and aging infrastructure,” while omitting mention of labor costs, even though 48 percent of the increase was headed for labor-related expenses.
And while the report commends the district for budgeting in advance for pension and retiree healthcare costs to save approximately $58 million over the next 20 years, it said the district should have “provided this information in a more transparent and easily understood manner.”
Robert Shaver, the water district’s general manager, said in an interview Thursday he welcomes the grand jury’s feedback, even if he doesn’t agree with every conclusion it drew.
“We appreciate their perspective on how we can improve,” he said.
“We believed that we were striving to be transparent. We received some feedback from the grand jury; we appreciate that feedback,” he said. “And that’s just going to help us double-down our efforts and come up with ways to explain this complex information in a way that’s more effective for our customers to receive and understand.”
Shaver said during the last public meetings on rate increases, new pie charts were unveiled to help show where customers’ money was being spent.
“We’ll see if there’s ways we can provide more comprehensive, easier-to-understand information,” he said. “We’re talking internally about maybe launching a new education program, like an ACWD academy.”
Transparency is especially important because the district operates as a “functional monopoly” and its five-member board of directors has almost unchecked power to raise rates when it feels necessary, the report said.
“This type of behavior by a government agency is why there were a record number of protests submitted against the recent rate increase and a record number of attendees at the public hearing,” Eric Tsai, a Fremont resident and vocal critic of the district, said in an email Thursday.
“I hope through this report ACWD will remember that they serve and represent 300,000-plus people in the Tri-City, rather than just the … employees at ACWD,” he said.
The jury recommended the district make clear in every future rate increase hearing how much money will go to labor costs and do a better job explaining how droughts can affect its revenue.
It also said the district should compare data from a broad range of Bay Area government agencies, not just water districts, when negotiating pay and benefits with employees.
“The board has heard the community’s concerns about the compensation,” Shaver said. “We’re in labor negotiations now, and I know they are taking that into account.”
Shaver didn’t disagree that district employees are paid well, but said it’s money well-spent.
“We consider it vital to attract and retain high-quality employees. In our market, you know, sometimes that is challenging. But basically human health and protecting the environment is on the line every day,” Shaver said.
“The grand jury feels that we can improve and that we could educate the public better. We’re taking that to heart, and you’ll see the next time we go through this process, we will have implemented all the recommendations to that end, to the extent that we can,” he added.
The water district board will have 90 days from the report’s release to respond to the grand jury. Shaver said that response will be discussed at a future board meeting.
June 29, 2018
East Bay Times
By Joseph Geha
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