Oceano board to blame for deficit

March 25, 2015
Julie Tacker

Julie Tacker

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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r0y

I especially love the math problem / historical summary. Puts it into perspective. Then again, I’m a big fan of timelines and data/numbers, so this is in my wheelhouse.


Thank you for the piece, Julie.


falconbh

The Oceano District , with S&P downgrade,has become a problem for other local cities and the county who financially support Sanitation District,School District,Lopez Water, Five Cities Fire,County Services.

A lot of options available to reduce costs, streamline, and make our water more affordable for citizens.


furthermore

Paavo’s overpaid for sure. Julie, how much salary did you ask for when you applied for Oceano GM?


Julie

Do the public records request, see what you learn.


furthermore

Your response to a simple question you know the answer to is: “Do the public records request, see what you learn.”?


Julie

I do not want to go into specifics, but in keeping with the junior high school word problem theme.


Paavo’s contract is for four (4) years at $1M (including benefits).

My proposal was for a limited time to help get them to a permanent GM.

Three (3) months only at less than what Paavo makes in ONE (1) month.

And the proposal expressly excluded any compensation for benefits, car allowance, cell phone allowance, no other compensation.


MajorityFan

There you go, name calling again. Save it for the BOS meeting, hon.


falconbh

Wasted financial resources on costly purchases that were not needed,excessive legal services,office nepotism, human resources they could not afford, consultants, fraud, corruption, poor internal controls, lack of standard acceptable accounting practices,complete failure of board to provide oversight for local citizens.


The OCSD board and general managers have failed in numerous critical areas and now want a bailout from the ratepayers.


Reality Check

YES! Being GM and accountant is a HUGE conflict of interest.


The continuing increases in salary to the GM have been ill conceived. IMHO the Board needs to look at how much they reasonably have available for a GM and an accountant and search until they find some one who will accept the salary and do a good job. Perhaps difficult to find, but the rate payers should expect a well run operation at a price the district can afford with out raising rates/ going into debt.


There’s more to running a business (government or private) than selling a resume to the board. After the hire, there is real work to be done. All of these recent GMs have had various difficulties in doing the RIGHT thing for the district.


Paavo is another in a series of poor choices by the Board. Does this Board even look at the funds available? No matter how good a resume / candidate for employment, if the funds are not realistically there to pay the salary asked, that individual is not right for the job.


T-Bone

Well, when you put it like that, what could possibly go wrong?


Pelican1

Let she who is without sin cast the first stone…


Redsoxman

So….because Julie’s made some mistakes in the past, she should quit shining a light on questionable practices? Build a bridge and get over it, Pelican, it’s time to move on….


Pelican1

Sorry, there are three things in the world that deserve no mercy, hypocrisy, fraud, and tyranny.

Rea


Dave

Julie puts her name out there, fighting the battles day in and day out. She doesn’t hide her identity like….oh, wait….like Pelican1. Why don’t you go write another silly song lyric Pelican? That seems to be your main contribution to the dialogue.


Pelican1

Dave, Dave, Dave…you just don’t get it. It appears you never will. Hypocrisy is not a virtue despite what you believe.


Redsoxman

First of all, that quote comes from Frederick William Robertson, not Rea. Second, why don’t you just drop the”holier-than-thou” shtick, I’m not buying it.


Pelican1

Obviously, you suffer from the Curse of the Bambino.


Redsoxman

When all is lost, go for the baseball analogy….BTW, 3 championships in the last 10 years = no curse, try something else……


Pelican1

Q: Why is Boston’s monster green?

A: Envy from Yankee wins.


r0y

Yes, let’s NEVER hold ourselves to higher standards; let’s keep the bar so low, we trip over it.


Let’s never allow anyone to criticize anything – ESPECIALLY in the public sector. Great idea… any parody come to mind on that?


Next.


info

Thank you for the information Julie.


The only thing I wonder is whether the hire will be worth it? Teams with the larger budgets are typically in the World Series as they can get the talent. I wonder if this will be the case in a year or two?


Hasn’t worked for my Dodgers!


justbeware

Die hard Dodger fans who wish to support the team in spite of increased ticket prices, so the team can pay all those million $ salaries, are free to do so.


Forcing the ratepayers of Oceano to pay for the financial mismanagement of the board does not, IMO equate to the same thing.


tomsquawk

GM & Accountant seems like a conflict of interest.


tomsquawk

please explain to me how i could get a thumbs down. i run a corporation.


kayaknut

How many members are on the board?


Julie

Five (5). Three of which have been there since the 2011 rate increase/Monty days.


mb business owner

Kinda like the mayor of morro bay and the morro bay city manager being the same person – oh wait, they are not the same person, the mayor just tells the city manager what to do and he does it.