‘Appalled’ at Costs, Residents Slam Helix Water District Rate Hike Plan

Updated at 11:22 a.m. July 11, 2012

Dick Malsbary of La Mesa is a 65-year-old retired vice president of marketing at DataGraphix with a degree in finance. 

He says that when he reviewed the Helix Water District’s financial statements, “I was appalled.”

So Tuesday night—along with some of two dozen other customers of the district including La Mesa, Lemon Grove, Spring Valley and parts of Santee—he came to complain about proposed water rate increases that would average 4.75 percent—or $2.75 a month—for the average residential customer.

Malsbary told district staff the “legal line in your budget” was overstated by about $300,000 and proposed that board members “cut way back on their [own] travel. There’s another $300,000.”

He even asked: Who owns the snow? And said, “You need a new negotiator” for the melt that leads to the State Water Project.

But Malsbary reserved his strongest criticism for paid time off for district employees.

“You’ve got million, two thousand in PTO pay in your budget, which calculates to 46 paid days off per employee per year—average,” he contended, reading from handwritten notes. “I know of no private-sector company that could survive” with those numbers. “You’re letting your people off one-sixth of the year.”

After the meeting at the La Mesa Community Center, Helix administrative services director Lisa Irvine said: “I can tell you that our employees are not getting two months’ ” vacation a year.

Wednesday morning, Irvine added via email: “Mr. Malsbary stated that the district pays employees 46 days of time off or over two months.  That is not the case. Our FY 2012-13 budget includes an estimate of 22 days on average per employee or approximately one month of paid time off for vacation, sick and family leave.”

So it went at the 95-minute “community outreach” meeting, which also drew nearly a dozen district officials and board members.

Carlos Lugo, the new district general manager, and Irvine summarized the district’s plight—water cost increases totaling 16.6 percent passed down from the Metropolitan Water District to the San Diego County Water Authority to Helix.

“The sources we have to draw from are being challenged,” Lugo said of the Colorado River—shared by seven states—and the State Water Project, which brings snow-melt and other water from Northern California to San Diego.

In a half-hour presentation via 34 PowerPoint slides, Lugo and Irvine argued that the district is keeping its costs down in all areas but water, having shed 10 percent of its staff in recent years—mostly via attrition—and achieving other savings through customer conservation efforts.

And after showing a slide depicting the cost of a gallon of milk ($2.99), Coca-Cola ($2.84), Gatorade ($5.20) and Perrier water ($8.16), Irvine displayed the cost of “one gallon of Helix water delivered to your tap: $0.0067.”

But Russell Buckley of La Mesa said the district is $40 million in debt, including $25 million for retiree health benefits and $15 million for pensions.

“Few of the ratepayers paying the freight, save other government employees, can expect such lavish pensions,” Buckley said (). “Especially with ever increasing life spans, the cost [of] people retiring at 55 with 75% to 80% of salary guaranteed for life—plus another 30% percent when they get to Social Security age—is unaffordable.”

But Irvine said the district was paying down its unfunded pension liability much the way a homeowner pays off a mortgage.

“We are ensuring that we are making our full contributions” to the state retirement system, CalPERS, “which we’ve always made,” she said. “What we are saying is we have $15 million mortgage . . . and that’s called the annual required contribution.”

She said the district’s annual payments to CalPERS would rise over time to “almost 20 percent of our payroll,” but would be made.

Irvine noted that under Proposition 218, a 1996 measure approved by state voters, if 50 percent plus 1 of the customers in the Helix Water District objected to the water rate increase, the hike would be nullified.

But she said 31,000 signed customer letters are needed for that to happen in a district that serves 268,000 people. Email is accepted, she said, if it contained a scanned letter with a customer signature.

Among those who objected to the rate increases—likely taking effect with the November 2012 bills after an Aug. 15 water board hearing—was Joel Scalzitti.

He says he owns a small ranch on an acre of land near El Cajon. And he said he would run in Division 5’s November water board election, now represented by  Richard K. Smith.

In November 2000, according to U-T San Diego, Scalzitti was elected to the Helix water board, but a judge removed him from the panel after an opponent contended Scalzitti wasn’t a division resident.

In October 2002, said the report, Superior Court Judge William Howatt ordered Scalzitti to repay the money he had received for attending board meetings and district conferences. That totaled about $25,000, “but Helix officials decided not to pursue reimbursement,” said U-T San Diego.

In November 2008, Scalzitti ran for the board a second time—losing to Smith by nearly 4,000 votes: 63.6 percent to 36 percent.