TID Board Approves Employee Merit Pay Increases Totaling $492,348

The TID Board of Directors approved 4-1 (Director Santos opposing) a resolution for $492,348 in merit pay increases for Managerial, Supervisory, Professional, and Confidential (MSPC) employees of the Turlock Irrigation District at their regular Board Meeting on February 17, 2009.
 
The purpose of the Merit Compensation program is to reward and recognize employees for achieving job performance results and exhibiting behaviors aligned with the objectives of the District and allowing for Cost of Living adjustments.
 
The TID Board authorized the General Manager to disperse funds for Managerial, Supervisory, Professional and Confidential employee salary adjustments effective April 1, 2009. The MSPC employees did not receive a COLA in addition to the merit pay while the International Brotherhood of Electrical Workers (IBEW) Local 1245 and the Turlock Irrigation District Employee Association (TIDEA) received a 3.75 percent COLA.
 
The $492,348 in pay increases come during an economic recession and follow a TID Board of Directors’ decision to raise water and electric rates by an average of 15 percent. The rates were opposed by some TID customers because TID was raising rates during a recession, when people would have the hardest time affording the rate hike.
 
TID Director Rob Santos had already publicly stated opposition to any kind of discretionary pay increases as negative internet “chat” about this issue was already coming up on January 20, 2009.
 
“We have an outstanding management team who are dedicated to TID and its ratepayers. And we should be proud of their accomplishments,” said Director Rob Santos. “Yet, we are in a time when our local economy is in peril. Members of our community are losing their raises, their benefits, and even their jobs while we asked our own ratepayers to make sacrifices to help pay for our mandated renewable portfolio. Against this backdrop I could not support a salary increase of any type for our administration.”
 
TID Director and Vice President Randy Fiorini has been on the TID Board since 1993. Director Fiorini stated that this policy was set in place six years ago and that the budget (that included continuing the Merit Compensation Program) was passed by the entire TID Board in December.
 
Director Fiorini said “I don’t think it is fair to pull out of the plan while the other 2/3 of the employees will get a COLA.”
 
TID General Manager Larry Weis took over an hour to explain some of TID’s operations and specifically how the Merit Compensation Program works.
 
Weis stated that the merit pay is neither a COLA nor a “bonus,” but rather incentive pay towards encouraging the best performance TID can get from excellent employees. “We are very prudent with rate payers’ money and operate well with a lean administration,” said Weis.
 
General Manager Weis noted that TID should not be compared to local agencies because TID does not depend on tax revenue and that the utility business is very stable.
 
TID operates with an approximate 500 total employees and a $350 million annual budget. Weis stated that all the employees’ $25 to $30 million in salaries is a small part of the budget.
 
Weis went on to say that the $492,348 in merit pay is distributed throughout an approximate 130 MSPC employees who total around $13 million in salaries. The merit pay is discretionary and may not be automatically extended to all MSPC employees. General Manager Weis created the Merit Pay Compensation Program six years ago. Weis believes the program increases the organization’s efficiency and helps TID retain (and hire) the best employees it can.
 
“We have a plan in place and see the benefits of employees performing at a high level,” said Director Fiorini. “I believe we have a program that is working well and I want to see it continue.”
 
“I understand the aspect of fairness to all employees, but not all MSPC employees are guaranteed a merit pay increase,” said Director Santos. “I also understand the Merit Pay Compensation Program, yet believe that maintaining our rate payers’ trust is based largely on perception; we just raised electric rates by an average of 15 percent with statements of necessity.”
 
TID Directors Phillip N. Short (Division I), Michael C. Berryhill, Sr. (Division 3), and TID President Charles Fernandes (Division 2) did not return phone messages left by TurlockCityNews.com.
 
TID Directors Phillip N. Short (Division I), Rob Santos (Division 4), and Randy Fiorini (Division 5) represent portions of Turlock rate payers.
  
“I was quoted in the Turlock Journal after the meeting when I voted to raise rates saying I thought there would be more public input,” said Director Santos. “I also thought there would be more public input when the TID Board approved the distribution of the $492,000 in merit pay but only one person came to the meeting.”
 
In fact, TID Public Information Division Manager Michelle Reimers reported that there were two members of the public who attended the Tuesday meeting held at 9:00a.m. Reimers reported that the matter was discussed previously in a closed session, which is not public, and that there were no comments or discussion by the board during the public meeting.
 
“With the information presented to me, and the fact that TID had not raised rates across the board since 2006, I honestly believed we ‘needed’ to raise rates as we were trying to fill a $57 million deficit while building our mandated renewable energy portfolio,” said Santos. “In turn, when it came to approving the distribution of merit pay, I took into consideration that our rate payers (the rate payers I am representing) would point out that we raised rates for the necessities stated, and not discretionary salary increases.”
 
 
Timeline Highlights:
 
On December 9, 2008, a TID Board Meeting public hearing was opened at 1:30 p.m. to gather comments from interested persons regarding proposed revisions to the irrigation rate schedules. Approximately 25 irrigation customers attended the public hearing expressing numerous concerns regarding the proposed increases. Hearing no further comments from the public, the President closed the public hearing at 2:55 p.m.
 
At the December 16, 2008 TID Board Meeting, TID Board of Directors adopted the resolution approving the Turlock Irrigation District 2009 Budget, Electrical Service Rate Schedules, and Schedules of Other Charges. TID sent out a press release announcing the water and electric rate increases along with statements of information.
 
Under the new rates, an average TID residential customer using 850-kilowatt hours of electricity would realize an increase of approximately $12.00 in their monthly electric bills. Irrigation costs were affected as the increase will raise the Water Charge from $20.00 per acre to $23.00 on January 1, 2009 and to $26.00 per acre on January 1, 2010.
 
The District was forced to increase electric rates due to significant financial impacts including rising wholesale electric prices, below average generation from hydroelectric and meeting state mandates for renewable energy and greenhouse gases. Larry Weis, General Manager stated that “The cost of doing business plus renewable mandates from the state legislature has put a huge strain on TID.” Without the increase, the District would fall short of the $52.7 million needed for its 2009 budget.
 
On January 20, 2009, The TID Board (Director Santos was absent while attending the Presidential Inauguration) voted a Resolution amending Turlock Irrigation District Managerial, Supervisory, Professional, and Confidential employees salary and benefits.
 
Then on February 17, 2009, the TID Board of Directors approved with a 4-1 vote (Director Santos opposing) a resolution for $492,348 in merit pay increases for Managerial, Supervisory, Professional, and Confidential (MSPC) employees of the Turlock Irrigation District at their regular Board Meeting.
 
The TID Board authorized the General Manager to disperse funds for Managerial, Supervisory, Professional and Confidential employee salary adjustments effective April 1, 2009.
 
 
The backdrop:
 
City of Turlock employee bargaining units all agreed to enter negotiations to accept a 5 percent net pay cut to save jobs and maintain the quality of services provided to the community.
 
State, county, and local agencies are implementing work furloughs, layoffs, and salary cuts that began in the latter part of 2008.
 
TID raises raised water and electric rates on December 16, 2008. Electric rates would be increased by an average of 15 percent.
 
A recession was announced on December 2, 2008. The nonpartisan National Bureau of Economic Research, charged with officially dating recessions, had declared that the economy had been languishing in one since December 2007.
 
Almost two months later, TID approved $492,348 for merit pay salary increases. TID MSPC employees received $688,000 of incentives by way of merit pay salary increases in 2007.
 
IBEW (International Brotherhood of Electrical Workers) Local 1245 and TIDEA (Turlock Irrigation District Employee Association) are two bargaining units, along with the third bargaining unit being MSPC (Managerial, Supervisory, Professional, and Confidential).
 
Union members held a meeting on March 27, 2008 when they were stalled out in negotiations with TID. Union members were especially upset by outsized salary hikes for TID management.
 
An IBEW news archive states: Over the past five years, 142 management employees have received bonuses averaging $478,000 a year, including a whopping $688,000 budgeted for management bonuses in 2008. But these are not ordinary bonuses—they are folded into the managers’ base salary. “Every time they get a raise it compounds their salary. We’re talking about a lot of money,” one member said from the floor during the meeting.
 

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