Oceano board to blame for deficit
March 25, 2015
OPINION By JULIE TACKER
Tonight’s Oceano Community Services District Board meeting will try to answer questions that have been posed to the district since the 3.5 percent rate increase notice went out on March. The rate increase, as noticed by the district, is tied to the loss in revenue due to water conservation associated with the drought since the previous rate increase in 2011.
One question continues to come up, “Is the general managers salary causing the need for the water rate increase?”
The district will answer “no” and explain its General Manager Paavo Ogren holds the combined positions of general manager and district accountant and his salary reflects the two jobs.
In reality, the answer reads like a junior high mathematical word problem:
When the last rate increase was adopted in March of 2011, Monty, Oceano’s general manager’s salary was $87,500 and the district had eliminated the accountant position. Monty had some math problems of his own, paying himself sick leave while also paying himself to work. In May of that year, the board gave him a $17,000 severance handshake and let him go.
In June of 2011, soon after the rate increase was implemented the district hired Tommy and paid him $126,000 annually. The increase from Monty’s salary to Tommy’s was $38,500.
A year or so later, without the board’s knowledge, Tommy hired Josie the accountant to work just 30 hours a week. She was paid $45,000 annually. Tommy and Josie’s combined salary was $171,000.
Josie was a good accountant; a licensed CPA, she worked hard at crunching the districts numbers and found that Tommy was paying himself more than his contract allowed. Tommy was fired and required to return the $45,000 in funds he had “overpaid” himself. The district replaced Tommy with Lonny at the same annual salary. Lonny and Josie didn’t get along too well and Josie quit. Lonny didn’t work out for the district and was fired after just five months.
Now the district was really in a pinch, (insert Lone Ranger theme music here) Paavo, the county’s director of public works and former CPA, offered his expertise to the district for a mere $196,000 annually. He justified the salary by promising to perform the duties of both the GM and accountant.
The district’s legal counsel went to work on a formula that might convince the board and the public that combining the duties of two jobs into one would actually save the district money.
By suggesting Josie had worked at the highest possible step on the districts pay scale and 40 hours a week, her salary could have been $65,000 annually. Sure enough, $65,000 and $126,000 is $191,000, just $5,000 away from Paavo’s requested salary. Attributing myriad potential cost savings accrued by Paavo’s experience, the district would be getting a deal. Never mind that the actual impact of the combined salary formula was a $25,000 hit to the districts bottom line. (This formula doesn’t include medical benefits, retirement, district matching contributions or overtime.)
The responsibility for these devastating financial impacts to the district is on its board. The $38,500 increase from Monty to Tommy, plus Josie at the inflated of $65,000 and Paavo’s additional $5,000 runs the annual hit to $108,500 for these two positions over that which was anticipated in 2011. The cost increase from Monty (2011) to Paavo (2015) includes the accountant position that didn’t exist.
No matter how they spin it, Oceano’s expenses have gone up and up while revenues have gone down.
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