This post was contributed by a community member. The views expressed here are the author's own.

Politics & Government

Water, Sewer Service District Employee Bonuses Under Fire

After recent rate hikes, the water services district is facing opposition to a proposed employee bonus that has paid more than $2.2 million over the last decade.

After the Dublin San Ramon Services District's board voted last week to approve the guidelines for giving the district's employees bonuses, there is still debate over whether paying extra is appropriate in this economic downturn.

Though the program remains in place, employees will probably not get those bonuses this year because there may not be enough money left over in the district's embattled budget.

At the heart of the controversy is whether the bonuses actually offer a real benefit to the services district in the form of increased production, and ultimately, financial savings. That's especially in light of a vote by the board this summer to raise district sewer rates by $39.78 a year for customers to refinance the district's debt.

Find out what's happening in San Ramonwith free, real-time updates from Patch.

The "Pay for Performance" bonus program was adopted 12 years ago as part of every district employee's contract. It gives bonuses for employees of 10 to 15 percent of their base salary if they exceed certain goals that the board votes on each fiscal year.

The board, whose members don't get bonuses, also has a separate vote to determine if their budget allows payment of those incentives.

Find out what's happening in San Ramonwith free, real-time updates from Patch.

The board has not paid bonuses in the last two years.

According to the district's General Manager Bert Michalczyk, the Pay for Performance bonuses were seen as a way to keep employment costs down.

"The districts incentive pay program has been in place ... as a way to save money," said Michalczyk. "It was a way to ratchet back salaries and for the board to still reward top performing individuals. It was originally for every employee until the six years ago."

At the time, the district's largest union, Local 39 of the Stationary Engineers voted  to opt out of the program.

Although current Local 39 Representative Gil Rojo was not the rep when the vote was taken, he said that the union is doing what needs to be done in the current poor economy.

"Basically we're not participating in anything that's costing the district money," said Local 39 Rep Gil Rojo. "We work hand and hand to keep the cost down because if they're not in business, then we're not employed. We do see that our contracts are maintained, so that's enough."

District services board member Dan Scannel is the only board member who has opposed the bonus program since its inception. He sees the program as a waste of money in tough times, and says he has historically seen no real benefit to the program.

"It's a bad program and I think it should be eliminated. I think it's a give-away of rate payer's money," said Scannel. "What the program says is 'meet the deliverables.' If [there is] a surplus it doesn't mean that it's from the program. We save the district money regardless. On top of that the majority of our employees are with 39. They thought it was divisive and opted out. When half of our employees opted out there was no drop in savings - we kept hitting our deliverables, what does that tell you? It's just not logical."

Scannel also says that district employees are paid based on a survey taken every year of similar agencies and are paid between 50 and 60 percent of the average for their position.

"I would say that our employees are great and we already reward them with very generous salaries and benefits, said Scannel. "I think there is no value in my mind for rate payers."

The services district has had a surplus of $13.9 million since 1998, $2.2 million of which has been paid out as employee bonuses.

Over that same period customer rates have declined by $12.42, from $45.52 to $33.10 on average. But that was before the two recent rate hikes brought the yearly customer tab back up to $39.78 this year.

The board will vote in September on what percentage of the bonuses if any it will pay to district employees.

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?