LA HABRA HEIGHTS, CA – Despite last week’s La Habra Heights County Water District’s rate hearing, where a meeting room full of ratepayers voiced strong opposition to a series of rate hikes and 580 submitted written protests, the board voted unanimously this week to pass a budget that would implement the first set of rate hikes for the 2012-2013 fiscal year. The board also voted for a 2% increase in pay for all district employees as well as $5,000 bonus for District manager, Mike Gualtieri. Rate payers cited a disabled economy and broken campaign promises not to raise water rates, as reason to oppose the hike.
After the June 19th public hearing there was some uncertainty over whether the board would actually implement the increase.
The board stated that while they had approved the rate increase plan that would see ratepayers facing a series of 5 increases over a 4-year period, that there was still room to debate whether it would be implemented as part of the new budget.
LHHCWD Board President, Brad Cooke told reporters after the meeting that he would take into consideration the protests when they sat down to vote on the budget. However, based on the board’s actions at the June 26 regular water board meeting, little consideration was given to ratepayers’ protest.
Stephen Blagden, investigative journalist and La Habra Heights resident, who spearheaded the rate increase protest, brought along a handful of protest cards to the board meeting on Tuesday but the board was quick to disregard them saying it was too late.
Blagden responded, “The people wanted their voices heard.”
Blagden was recently targeted by the board when he put out an information table on the rate increase during the recent county election. District employee, Rick Vigil, pulled into the parking lot of La Habra Height’s main park, The Park, snapped a few pictures of Blagden and drove away.
Despite several attempts to get in touch with either Vigil or Cooke about the incident, no calls were ever returned. Cooke has never returned a call regarding questions about the rate increase.
The board said they had received less than 30 protest letters prior to the hearing so when Blagden rolled in two boxes on a dolly through the City Hall room, the board appeared surprised.
Along with the boxes of protest cards and letters, ratepayers at the hearing expressed discontent over the rate increases.
Paul Goldenberg, long time resident of La Habra Heights and former owner of Paul’s TV, was quite clear in his indictment of the board in particular to a fee of $171 for trimming grass around meters.
“Now if you have been reading my meter all the time, how much did it grow around the meter that cost 171 bucks to trim around my meter? What do you use to trim around it? A pair of scissors? I mean, that looks crazy.”
Other ratepayers were especially frustrated with board member, Pamela McVicar, who ran on an election campaign promise, just in November 2011, that intimated if she was re-elected, the board would not increase rates.
Despite feeling the pressure, McVicar gave a weak apology, saying “I am sorry that some of you misunderstood that.”
In letters sent to the board that were obtained by this publication, many ratepayers expressed distress at having to dig deeper into already empty pockets.
One protester wrote, “I have cut back on watering and I am on a fixed income.”
At the hearing, ratepayer, Sandy Dykier, shared similar concerns, “We have horses, we have almost two acres and everything takes water. I have a couple of kids, they take baths. So, it will affect us, yes.”
That night the board ultimately voted 5-0 to approve the fee hikes but not without appeasing the public by removing two fees: a mailing list label fee, which they admitted was illegal, and the meter trimming fee. The board also refused to commit publicly to admitting that they would approve the rate increase.
The board, and in particular, president Cooke, blames the rate increase on the delayed controversial water wheeling agreement. However, as previously reported in another article, the board is directly responsible for delaying the water wheeling agreement.
Back in October 2011, Cooke spoke before a La Habra Heights City Council meeting warning that without the wheeling agreement, a rate increase was imminent.
He said, “The current board is working very hard to keep your rates down. Without the agreement, we may soon be seeing rate increases.”
The board approved the water wheeling agreement in May of this year and soon after approving the deal, moved forward with its rate increase plan.
Despite the signing of the agreement, Cooke and the board miscalculated how quickly the revenue would come in from this agreement. The board included the water wheeling agreement in last year’s fiscal budget to counter any deficits. However, when that budget was approved last summer, the agreement was nowhere near approval from any of the parties involved.
Memos from Rowland Water District and LHHCWD show clearly that RWD was losing interest in the deal. In a September 9, 2011 memo, Cooke wrote that he spoke with RWD General Manager Ken Deck, and told him that, “the deal is not completely dead, yet.”
Of the 580 submitted protests, only 505 were officially accepted by the District. LHHCWD provides water to 1,900 meters. Gualtieri stated during this week’s board meeting that there were 5 sets of duplicate cards, 4 sets of triplicates, and 2 that were for the rate increase. In other words, some protesters sent in multiple cards from the same address.
Gualtieri did not make it clear whether if someone sent in multiple cards, that all of their cards were discounted. However, some protesters have multiple water meters and accounts on their property.
The general manager also noted that among those that were not counted, were protest cards from people who were outside of the district. This means that at least 51 of those were from out of their servicing area.
No written report was provided by Gualtieri to show a clear breakdown of the numbers, but InsightOut News has put in a public records request to examine the cards.
With the ratepayers out of sight, the board took up discussion on the rate increase and staff pay raises.
While the board discussed extensively that the economy was in difficult times, they felt it was still important to give staff a 2% pay increase, despite budgeting for a 5% increase.
During the discussion over approving the increase, board member Jeff Heintz said, “If there is a 2% cost of living increase, then everybody who is an employee here is impacted by that. The cost of living increase, is just to keep up.”
In the meeting, McVicar noted that each percent pay increase accounts for roughly $8,000 of the budget, so with a 2% increase, that is $16,000 total.
The newly approved budget does not pull the board out of a deficit and the District still anticipates a $4,359 loss.
For a board that will see a deficit at the end of the 2012-2013 fiscal year, the board still approved a $5,000 bonus for Gualtieri.
Gualtieri says he currently makes $11,000 per month for a total of $132,000 per year and with the 2% raise will now earn $134,640 per year, plus the $5,000 bonus. This does not include his benefit package which could add another 40% to his yearly salary.
McVicar lamented that the board could not give Gualtieri more money, “I move that we give you the two percent salary increase that everyone else is getting, and I feel bad because I think you deserve more, and a 5,000 dollar bonus.”
The board voted 4-1 to approve the pay raise and bonus.
McVicar has said in past interviews that the board looks to other districts for insight on how to proceed with pay raises, yet other boards are not handing out bonuses and pay raises.
Yorba Linda Water District, for example, has cut pension benefits for new hires and has also cut its work week by staying closed on Fridays to save on operating costs.
In 2009, investigative journalist Stephen Blagden, uncovered that LHHCWD board members were “wining and dining” at ratepayer expense. Since then, the board has stopped asking for reimbursement for drinks.
At the rate hearing, board members addressed their past history of excessive dining and alcohol expenses. Wilson himself told the overfilled room of frustrated ratepayers that he had learned his lesson.
“Trust me, we’re not high spenders,” he said during the rate hearing meeting.
However, it appears that Wilson continues to pass on the cost of lavish dinners to ratepayers.
A May 2012 reimbursement form, obtained via a public records request, that was submitted by board member Bob Wilson, shows that Wilson was requesting ratepayers cover his $69.91 solo dinner at Old Fisherman Grotto as part of travel and lodging expenses for attending a conference in Monterey, California. Wilson claimed at the public hearing that he only ate Cobb salads at California Pizza Kitchen but the reimbursement form does not list this restaurant.
He also requested $91 for tipping and valet parking at the hotel. The total expenses for the trip were $1,253.18 with the majority of cost going toward mileage and lodging. Mr. Wilson earned the nickname “Travelin’ Bob” on a local blog.
Overall, the board is facing another deficit and a water wheeling deal that may or may not bring in revenue for the district. Despite ratepayers concerns, and the board’s acknowledgement that they are trying to stay afloat in a bad economy, the board continues down a path of financial mismanagement that at least goes back as far as 2010, with the failure to secure the water wheeling dealing in time to cover last year’s fiscal budget.
After Tuesday’s meeting, Cooke was asked how he justified pay raises and bonuses in a turbulent economy, especially after so many ratepayers came out against the rate increase. Cooke accused assembled reporters and media of not being “fair and balanced” and refused to give an answer.
Ratepayers will see their first increases beginning July 1. Average ratepayers with a 1-inch meter will expect to see an increase of 11.98%, or $51.48 total for the year.