Tuesday, April 7, 2015

The Real Reason Why Pasadena Water & Power Rates Have Increased Radically

Platinum Pasadena
As we saw with Robert Fellner's LA Times article on Los Angeles's Department of Water and Power, huge rate hikes are now in the works in order to try and cover outrageously high salary and benefit packages. Some of the highest city employee salaries in the country, and this in a supposedly progressive city where many of the poor can barely make ends meet. Much less pay so much more for water and electricity. Here is how Robert described it (link):

Meanwhile, residents of Los Angeles face yet another rate hike, only a couple of years after an 11.1% increase in electricity rates. DWP officials have recently suggested that they plan to seek recurring rate hikes of at least 2% per year beginning this year to fix infrastructure. But CityWatch is reporting that Angelenos should expect rate hikes of 5% to 8% a year, for each of the next five years. Residents in January paid 20% more for electricity than the national average, according to the U.S. Energy Information Administration.

These higher prices act as a regressive tax on the poor, who are forced to spend a proportionally larger share of their income on energy than their wealthy neighbors. With the growing concern about income inequality, policymakers should think twice before stacking the deck further against the poor through more rate increases.

So that is Los Angeles. But what about Pasadena, another city that owns its own Water & Power utilities (link)? Are that city's Water & Power employees making a lot more money than the average Pasadena resident? Have those salaries and benefits been a driving force behind the repeated utility rate hikes there?

Sadly, the answer to both questions appears to be yes.

Here is how Brian Charles described PW&P rate increases in a Pasadena Star News article that ran in June of 2012 (link).

Pasadena Water and Power electricity rates increase Electricity rates are going up for residents in Pasadena as the City Council approved an increase this week.

The Pasadena Department of Water and Power is raising its distribution and customer charges in an effort to pump an additional $3.75 million in revenue into the agency. The increase is needed as PWP personnel costs, which includes pension obligations, are on the rise, according to a city staff report on the PWP rate increase. The rate increase will also maintain cash reserves necessary for utility agencies in the volatile energy market, Pasadena City Manager Michael Beck said.

"In the short term, you could take additional money out of reserves, but it's not a prudent way of managing money," Beck said.

The city-run PWP has been Pasadena's cash cow in recent years. City Hall has never hesitated to transfer money from the PWP's nearly $400 million in cash reserves to plug holes in Pasadena's general fund budget.

And here is how yet another series of PW&P rate increases was described by Lauren Gold in the Pasadena Star News in June of 2014 (link):

Electricity in Pasadena more expensive after council approves rate increase Pasadena residents and businesses will pay more for electricity beginning in July after the City Council unanimously approved rate increases for the next three years.

Rates for average users will rise by about 8.3 percent on July 1, comprised of a 2.7 percent council-approved jump and 5.6 percent “pass through” increase that doesn’t require council approval. Users will be hit with a 2.4 percent increase in 2015 and 2.2 percent hike in 2016.

Officials said the money was needed to maintain Pasadena Water and Power’s infrastructure and to pay off debt.

“This is something that is necessary and it’s responsible and compared to our competitors it’s quite reasonable,” Councilwoman Margaret McAustin said. “This isn’t easy. This will have an impact on all of us, but it’s something we must do.”

So why have electricity rates gone up continually in Pasadena over the last four years, and will keep doing so into the future? Is it because of debt, or infrastructure repairs as certain City Council members have claimed? Or can it be that Pasadena Water & Power employees are compensated for their time and bother with outrageously high salaries and benefits?

For the real numbers we turn to Transparent California. It really is a remarkable tool and in this case literally blows the tall tales told above by Michael BeckMargeret McAustin and others right out of the water.

First, some overall numbers. Here are the Transparent California numbers for all City of Pasadena employees, including those who work for the PW&P (link).


The big numbers here are those that highlight the disparity between what City of Pasadena employees are making versus the average pay of those Pasadena residents working in the private sector. The median pay and benefits for City employees totals $128,040.90 per year. Or way more than double the median pay of the average taxpaying Pasadena resident.

You also need to note that the yearly cost of city employee compensation per Pasadena resident is $1,551. That’s the 10th highest of any city in the entire State of California. The average cost (filtering for cities with a resident population of at least 10,000 and at least 100 city employees) is $683.

Here is the list of Top 20 employee costs dunned cities, based on the average cost per resident. Figure that a family of four in Pasadena is paying $6,000 or so yearly.


So what are PW&P employees making? A ton. Here is a compensation chart of the Top 20 most highly rewarded Pasadena Water & Power employees. Note the total compensation figures on the right.

Click to enlarge

If you want the entire list send me an email and I will forward it to you. It goes on for pages and is far too large a file to reproduce here. There aren't many other places where you will see cable splicers getting six figure total compensations.

So don't you think that is a much more logical explanation for all of those Pasadena Water & Power utility rate hikes?

Maybe somebody should ask Terry Tornek and Jacque Robinson about that at the Pasadena Mayoral Runoff Debate tonight. After all, these are two Councilmembers who voted for these serial rate hikes as members of the City Council, and have to know at least a little bit about the reasons for them.

They were there, after all.

sierramadretattler.blogspot.com

60 comments:

  1. Pasadena Electric Bills Predicted to Increase Between 10% to 20%
    http://www.pasadenanow.com/main/pasadena-electric-rates-predicted-to-increase-between-10-to-20/#.VSPVfnpiMxc

    Tornek blames the Sierra Club.
    "Tornek says the Council has to walk the tightrope between the rising cost of energy to the consumers and the demand for green energy by several groups in the city including the Sierra Club and various school groups."

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  2. Those compensation levels are staggering. Wait alot of these employees start retiring after working only 30 years, and then you will really see the you know hat hit the fan. Mayor Bogaard who presided over all this excess is getting out just in time and that's the way it always works. He and other council members promised the world to these unions in exchange for keeping the peace during their tenure in office. It will become a future City Councils big problem when Pasadena will be paying these six figure pensions every year and medical benefits and cost of living increases to people who are not working and being productive. It will put the squeeze on future employee compensation as well as leave very little money left to make infrastructure repairs, fix potholes, for senior services and yes, even the library. People need to understand how those kind of compensation levels and pensions eventually squeeze out money that can be used for other vital city services and programs. Even Mayor Bogaard was quoted a year or so ago as being concerned that employee compensation was exceeding 70% of the entire City of Pasadena's budget. Its Detroit waiting to happen and yet no one running for Mayor wants to talk about it. Maybe they can keep the ship afloat for a few more years and get out of office before the whole thing collapses. The only solution to the problem is moving from a defined benefit pension to a defined contribution pension whereby promises by elected officials to unions in order to get the union's support for their election has to actually be budgeted for each year. That's the beauty of the defined contribution pension for city employees - you don't accure those unfunded liabilities that are bankrupting cities like Detroit, Vallejo and San Bernardino. Other cities like Pasadena are a house of cards waiting to collapse under the weight of all those employees getting lifetime pensions to do nothing but enjoy a lifetime of Sundays - all at the ripe old age of 50 for those employees are jumped on this gravy train early on. All of us idiot taxpayers have to work longer and retire later so that we can pay for all this.

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    1. Well said.
      And it leaves us an ugly legacy of debt to deal with -with insufficient funds.
      The only course is bankruptcy- as you suggest .
      An awful solution decried by many but nobody suggests an alternative.
      So now we are left only with the 'when' decision.
      Watch out for falling home prices and rising local taxes when the BK is announced.

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    2. Plus block after block of near valueless high density mixed use development shlock.

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    3. Doesn't sound very sustainable.

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  3. Pasadena does it to themselves. City employees average twice what the average taxpayer makes, and only 15% of residents even vote. You might as well just pull out your wallet and empty the contents on Beck's desk.

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  4. Wouldn't it be interesting to see how many of those overpaid Pasadena Power employees actually live outside Pasadena? bet a lot of them live in E. Altadena and other parts East.

    After all, you'd be stupid to live in Pasadena and pay those outrageous utility rates and taxes. Hypocrisy lives!

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    Replies
    1. I wonder what percentage of them even stay in the state once they start pulling down their 6 figure retirements ...

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    2. Probably damned few of them. Only suckers would pay CA taxes on those fat ass public pensions.

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  5. If you want to know where a few of Pasadena City Employs live, drive across Greenhill Rd. between Michillinda ave. and N. Rosemead Blvd.. Why you ask that road, SPEED BUMPS. The only safe road to travel N. Rosemead Blvd to Michillinda that has a traffic signal is Greenhill Rd and they have speed bumps and the reason is that a few city employs got together and pushed for the Speed Bumps. Remember the city inspector who was building an oversize home that the city made him correct, he lived on that street. I wonder how many people have been in accidents because they took other streets that had no speed bumps?

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    1. Have they asked for a gated community yet? You know, to keep the smelly taxpayers out?

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    2. This is what happens in Communist countires where those connected to the party get ahead. Its the same reason those in the Politburo in China are all billionaires. They make the money off the backs of the rabble who pay their taxes every month. We are creating a new elite in which we work for them by having to retire in our 80's to pay the taxes so that the City Employees can retire in their 50's although most of them don't retire anyway because even they realize they are too young to retire. So they get another job that pays them a salary on top of their lifetime pension. What a scam.

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    3. Neither Robinson or Tornek are against this.

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    4. They were for it before they were against it.

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  6. A family of 4 pays $6K a year to live in Pasadena? Is it a country club?

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  7. It's not my first time to go to see this web site, i am browsing this web page dailly and obtain good information from here every day.

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    Replies
    1. Welcome back, Josh Moran!

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  8. What percentage of the Pasadena general fund goes to employee costs?

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    Replies
    1. Its above 70% which is dangerous territory for a city.

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    2. Govt employee unions love city halls that dare.

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    3. More Platinum Pension for me!!!

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  9. Parasites have to watch out for killing their host - don't you think this is all getting close to the breaking point?

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  10. But at least there working. Question is, are they doing good work, or harming the whole infrastructure? Are they making the right decisions for the whole community, that is what they are being paid for , RIGHT ? I think job performance at that kind of money should be evaluated for whether or not these employees are really doing a good job and if so, under who's authority & leadership. Definitely will take some research that I think will eventually happen.

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    1. What kind of job performance reports did Wooten get?

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    2. So 7:58, in your estimation PWP employees are worth more than double what their private sector counterparts make? Because they do more than twice as good a job? Is that what you're saying?

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    3. "But at least there working." Do you mean "they're working"?

      The answer would be: Probably not a lot.

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  11. Yes in High School (PHS 1971) Greenhill was the greatest for road racing in my parents station wagon on the way to and from school. The way they banked the corner @Hastings Ranch rd. (I think) was the best.
    BTW if you hit those bumps at 35 mph and at a slight angle it's actually a pretty smooth ride and fun. I also sometimes honk the horn!

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    Replies
    1. So you're about 62 and drive like that? Way to set an example, grandpa!

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    2. The Pas Power slogan "Serving the Community Since 1906" is going to be updated to "Soaking the Community Since 1906." Both Tornek & Robinson support the change.

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    3. I can't see voting for either one of them. What a disaster,

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    4. 85% of Pasadena voters agree with you.

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  12. Oh, I think the new slogan is better.

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  13. Both utility companies have been used as cash cows to supplement general budgets, and the focus is on the wages of the employees within the utility companies? It seems pretty clear that if the rate hikes are really necesarry, they are because the city can't balance it's books without utility revenue to do it. And so the question is whether the general budget of the city is worth sustaining through utility taxes or through another method, or is the general budget too fat.

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  14. This situation applies to every department in city government. As employee salaries, benefits and unfunded liabilities continue to skyrocket, they always want to reach into the pocket of the taxpayers to bail them out. The city employees must have defined contribution pensions because then you have to deal with overpromises by City Council's that pay back the unions for their political support and budget for it each year. With defined benefit pensions, City Councils can over-promise to keep the peace with the unions during their time in office or to pay back the unions that got them elected and the bad consequences don't show up until many years down the road on someone else's watch. That's the whole game. The unions don't want it because if you had to budget for those pensions each year, they would't be as big or as generous. The whole thing stinks and is only getting worse. Unfortuately, in order to have meaningful change, the whole system has to collapse of its own weight and the various states and cities have to go bankrupt. Anything short of that, and the politicians will keep kicking the can down the road and make it someone else problem - whether its future City Councils or future generations of taxpayers. Just like General Motors stopped being a car company but became an employee benefits company that built cars on the side, city government has reduced services to residents and became an employee benefits company that provides services to the residents on the side.

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  15. Don't worry about the City of Pasadena. After they file bankruptcy, like Detroit, Pasadena will be able to haircut the pensions for those already retired and future retirees. Detroit city pensioners got 41 cents on the dollar in the final bankruptcy settlement. In other words, a $100,000 pension became a $41,000 pension.

    Pop some popcorn, this will be something to watch.

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    Replies
    1. A clerk or janitor with a fews year in and a $24,000/yr. pension would get a $ 9,840/yr. pension. Time to move in with the grand kids. Maybe you can get your own room.

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  16. This is exactly what is going on in sierra madre. Did you know that city hall has $20 million in its checking account which includes $8.5 million dollars in an investmnt fund. Good going Bernie Madoff, please take care of our monies. I believe its time to fire those idiots.....

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  17. "Little old lady from Pasadena" Go granny..........

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  18. I think that if the Water & Power Department required current employees to re-interview for their jobs, and threw everything open to anyone who would want to apply, the line of applicants would go on for blocks. The pay could be cut in half, put in line with private industry, and then rates could be reduced.

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  19. Be careful of the awesome power of these City employees.They can snoop on you very easily:
    http://losangeles.cbslocal.com/2015/04/06/water-authorities-to-use-new-tool-in-fight-against-water-wasters/
    In this case to good effect !

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    1. Big Brother will come and tell you you're using too much electricity, soon, as well. Why do you think SCE put the smart meters in? Don't cut your electricity? Big Brother will cut it for you.

      George Orwell would be so proud!

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  20. Andre Coleman picked the wrong racket. PWP pays better than small-time grifting.

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    Replies
    1. I'll bet he could have written some very informative pamphlets about saving water.

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    2. Andre "Pay to Play" Coleman hasn't admitted to anything yet, has he? How long till he winds up in trouble with his job?

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    3. Maybe he was following Pasadena Weekly official policy.

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    4. I hear Coleman's up for a promotion. Pay to play, you know.

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    5. He's an earner.

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    6. Got hit-piece mail from the wells campaign today; pretty damn sad. If I hadn't met Kid Hampton several times, and watch him work during the council/board joint meeting recently, it could have easily poisoned my impression of him. Instead, it poisoned my impression of wells.

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    7. Union pols play very dirty.

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    8. are you guys serious. Hampton is probably the least prepared candidate ever. He is not very bright. He did nothing on the school board but now proclaims he's finished his goals and ready to move on. Seriously! If he thought he had a problem reading and understanding school board staff reports, I cant wait to see how he does on the city council where the subject matter is significantly more diverse and complicated. Hampton is a nice smile in a nice suit but no substance.....at all! You watch, if he is elected he will be the joke of the town. As a result, his constituents will suffer.

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    9. Wells, like Jacque Robinson, is just a union puppet. Being pushed on the voters so he can rubber-stamp any raises and benefits the economically privileged people who work for Pasadena may want. I'd voter for a stray dog before I'd vote for a puppet. The taxpayers are being robbed blind already.

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  21. If you look at who the government supports, you'll understand where resources go: Unions, developers, Finesteins husband, anyone who owns property along the bullet train route, and many more of that ilk. They get all the perks and we get to pay for them.

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  22. At the Pasadena Mayor's debate. Larry Mantle is hammering Tornek and Robinson on the embezzlement scandal. They are tap dancing furiously. Great job by Larry Mantle.

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  23. "Everything is a conversation."

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  24. Anyone hear about the water reductions being demanded of Pasadena at 20% and ARCADIA at 35% .

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  25. you are about to see the implosion of the City of Pasadena. The $6.4 embezzlement was only the beginning ... the disparity between City Hall ... and leadership at the top ... the widening gap between all of the departments ... everyone throwing everyone under the bus ...

    Sad.

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    1. I gave the debate win last night to Larry Mantle. He was a bulldog on the embezzlement question, and neither candidate came off looking very good.

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  26. It's the lesser of two evils in this race... Tornek has never been North of Orange Grove Blvd and was on the board that was overseeing the funds where the money was stolen. His arrogance and condescending manner towards city workers has been noted time and time again. He has no connection with the poor parts of Pasadena because he doesn't care ... and never has had a need to. Robinson has no voice ... never steps out in front of issues and is clearly and has been over her head for years ...

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    1. All during the debate last night Jacque kept saying "There ia a discussion to be had." That is not leadership. She is completely owned by the bureacracy/union apparatus.

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  27. Revisiting an older article yet same old story. Just received our City of Pasadena memo on our Water rate hike for 2016 blamed on Jerry Clown's water reduction mandate. Duh! Did anyone not expect this... Pasadena is claiming a 2 MILLION $ short fall due to the water restrictions. So to continue to fund their debt obligations the tax payer is stuck again!

    Did we get a Thank you or a reward for saving 28% on water consumption in 2015? NO! We got a bill for it coming in next year in a 10-12% rate hike on water! B.S. ALERT!

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