Friday, May 8, 2015

Robert Fellner: Southern California Water District Paid $42,942 For A Single Employee's Health Insurance Plan

We're now #2.
Mod: Somebody has finally broken our record. Back in March of 2014 The Tattler shared with a stunned city that at $37,815 per annum Sierra Madre had at that moment the single highest employee health care plan in California. This at a time when the city was screaming poverty and asking residents to vote themselves a big utility tax increase. The article was called "Can Employee Health Care Costs Be A Reason Why Utility User Taxes In Sierra Madre Are Highest In The State?" and can be linked to here. This plan and many others were slashed a few months later by our current City Council. However, it was proof of financial insanity like this that contributed to the defeat of Measure UUT in April of 2014. Today Robert Fellner reveals that somebody has now broken our record. And wouldn't you know, it's a water district.

Southern California Water District Paid $42,942 For A Single Employee's Health Insurance Plan: Despite the warning from the Government Accountability Office (GAO) of the impending burden to state and local governments from rising healthcare costs, some California governments are purchasing wildly exorbitant health insurance for their employees, at taxpayers’ expense.

Last year the Water Replenishment District of Southern California (WRD) paid $42,942 for a single employee's health insurance plan. Nearly half of the District’s full-time employees received a plan that cost at least $30,000 apiece.

In 2011, the WRD had four employees receiving plans that cost at least $30,000. By 2014, that number increased three-fold, demonstrating the $42,942 plan is not a remote outlier, but part of an agency-wide practice of vastly overpaying for health insurance.


Surprisingly, WRD employees are also part of the coveted “3% @ 60” pension plan – which calculates the pension amount by multiplying the number of years worked by 3 percent, and then multiplying that number by the employee’s highest salary.

Typically, plans with the generous 3% multiplier are reserved for police and fire employees. In fact, the 3% plan is so expensive that the Pension Reform Act of 2013 eliminated it completely for new hires. New employees at the WRD would be under the reduced, but sustainable, “2% @ 62” formula.

The total compensation package for WRD employees is quite generous as well; full-time WRD employees received an average $180,636 in 2013.

As the data available on TransparentCalifornia.com is making clearer, it is in the often-overlooked smaller, local government agencies where the most dramatic levels of excessive public compensation can occur.

Public agencies overpaying on insurance premiums goes well beyond the tiny WRD. Transparent California previously reported on the widespread $20k+ health plans in Corte Madera and the Contra Costa Community College District, as well as the $30k+ plans found in the cities of Beverly Hills and Sierra Madre.


Pew Research confirms that the problem is nationwide – over the past 25 years, state and local government spending on health insurance increased 447% in inflation-adjusted dollars; and is projected to increase even faster going forward.

A 2013 United Benefit Advisors survey found that public employers pay 42% more for their employees’ health insurance than private employers – with private employers paying an average $6,040 per covered employee and public employers paying $8,551.

Even compared to nearby public employers – the Los Angeles County Sanitation Districts and the Metropolitan Water District of Southern California – who also dramatically overpay for insurance, the WRD’s profligacy is unmatched.

Unsurprisingly and consistent with the broader, nationwide data, California governments pay significantly more for health insurance than the average private sector employer. Local public agencies pay substantially more than the State of California, with the WRD paying nearly 2.5 times that of what the State pays, and over four times what the average national private sector employer pays.

To make matters worse, the forthcoming 'Cadillac tax' provision of the Affordable Care Act will significantly impact government employers and their propensity to purchase Cadillac-style plans. Beginning in 2018, employers must pay a 40 percent tax on the excess of plans that cost more than $10,200 for single coverage and $27,500 for family coverage.

For example, the WRD will have to pay an additional $41,000 a year in penalty taxes for just the 12 employees with health care plans over the cap at their current rates. Virtually the entire full-time staff – over 1,400 employees – at the Metropolitan Water District of Southern California receives health plans that cost more than $10,200 a year; if any of those plans are for single coverage only, they would be hit by the tax too.

Given the recent, and projected, double digit increases in health insurance premiums, merely holding costs to the present level by 2018 would be a remarkable feat.

Granted, the increasing cost of healthcare is much more complex than merely being the result of government wastefulness. A comprehensive solution would require an entire rethinking of how healthcare should be provided. Still, having a consumer as big as government routinely overpay for a product certainly contributes to its rising cost.

As taxpayers are struggling to pay their own health insurance premiums, government should be doing all it can to rein in costs as much as possible. As bad as the healthcare situation is at the moment, there is simply no justification for a government agency to consistently pay over $30,000 a year for their employees’ health insurance.

About the Author: Robert Fellner is Research Director for Transparent California.com, a joint project of the California Policy Center and the Nevada Policy Research Institute. Fellner recently completed an in-depth analysis of the Los Angeles Dept. of Water and Power rates of pay in his study entitled “Examining Public Pay in California: The Los Angeles Department of Water and Power.” 

Stunning Photo of Sierra Madre's Water Spreading Grounds

Mod: We have all seen the shocking pictures of drought scenes from throughout California. Now we have our own. A friend had the opportunity to take a helicopter excursion over Sierra Madre recently to take some photos. Here's one of them.







sierramadretattler.blogspot.com

56 comments:

  1. What exactly do you get with the highest costing government employee health care plan in California?

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    1. The highest quality medical marijuana. You need it to convince yourself that you deserve a health care plan that costs more than a lot of people make in this country.

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    2. eventually the public sector's ponzi pension plan will collapse - eventually we the public will get tired of it and backlash by electing those that will dismantle it and vote against every school bond or tax until they all fix the number one problem which is their own greedy overpaid pension plans

      where else can a person retire and receive 80-90% of one's salary FOREVER and be young enough to take a 2nd job - just the public sector

      gut calper's

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  2. My favorite part of the spreading grounds photo is the bright green well watered ball field!

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    1. People need to call Gene Goss and ask about that. He was involved in Little League, you know.

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    2. It's the pools that caught my eye....

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    3. Can somebody forward that picture to Sho Tay please?

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    4. The field is not being watered by well water. Our wells are not pumping. That is MWD imported water purchased by the city. Drinking water on the grass. What little trickle that is coming down the channel from the horizontal wells (the tunnels at the Little Santa Anita Canyon dam) is flowing into, then percolating from the northern most basins. How long it talkes to get to the east Raymond Basin (our underground "reservoir") is anybody's guess. Last night's modest rain wasn't hard enough to wet the ground under the cars with the run off on my sloped parking area.

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    5. I'll Sho Mr. Tay the picture.

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    6. 7:54 - here you go:
      http://www.cityofsierramadre.com/sierra-madre-contacts/reports-to-the-city/96-report-a-water-waste-issue

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    7. Where else can our youth play? We should have some place for our kids.

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    8. Lawns are required for youth to play?

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    9. Yes. But only when properly supervised and bubble packed, of course.

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    10. That field is Pony baseball - not Little League 6:45am. Mr. Goss + child haven't made it up to that field yet.

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  3. The governments health care plan just makes me sick. My health care plan must not be giving me the kind of care they are getting, or, is it because government is paying for people who have never contributed to health insurance?

    Have you noticed that the insurance companies have nice big buildings like the banks do, is there a connection?

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  4. Captain ObviousMay 8, 2015 at 7:58 AM

    Mr. Mod,
    You forgot to mention one of the best parts of an employer-paid health plan! Group medical is a non-taxable fringe benefit. Yes, that's right, no CA or Fed income tax on those $42,000 plans, baby!

    Yee Haw!

    Don't forget, we need to raise taxes because the state doesn't have enough money.

    How about paying the $42,000 in wages instead. Then those same wages would be subject to Social Security, Medicare, CA, Federal, SDI taxes. Public employees could help erase the deficit. And help Seniors!

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    1. That would bring the water dude's salary to over $200,000. Quite a handsome amount I'd say. I think they do the health care diversion to disguise just how overpaid these pipe jockeys really are.

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    2. This is why you have to pay higher taxes. The government is smarter than you lowly taxpayers.

      It's the age old, look at our salary schedule, it's so low, BS. Pay no attention to the cost of the Platinum Pensions and Golden Health Plans that a private sector worker can only dream of!

      And, as an added bonus, guaranteed raises camouflaged as step increases in the pay scale.

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    3. Enjoy your services!

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    4. Fat tax-free health plans are part of the process.

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    5. Sorry 9:24AM. I listened and listened to the meeting tape and couldn't make out his name. Thank you.

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    6. If you don't plan to attend any of these committee meetings then you need to write the council members and tell them your concerns about the budget and what needs to be done to help correct it. Please take the time to do that or the Pearson's of the world are the only people heard. And then, le's not forget the pixilated fairies that write Goss.

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  5. The off the point question for the day: Does anyone know the name of the elderly gentleman who recommended that the UUT be raised to 15% at last nights planning commission?

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    1. Check the low income tax rolls.

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    2. It's highly likely he'd support a higher tax if he's one of the low-income exempt folks.

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    3. Has he called Gene Goss?

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    4. Why would anyone take a request like that to the Planning Commission? They don't do taxes.

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    5. It's on KGEM playback - Chris Paulson who lives on Oak Meadow Road.

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    6. 9:02, he was there for a different issue earlier in the meeting. Cell towers.

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    7. Big night for Chris. He was 33% of the turnout.

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    8. Wonder if Chris wants to send in a donation check to the City. Trust me, they will take the money.

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    9. I think Chris is part of the "should have stayed silent majority."

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  6. Sierra Madre asks Board to prompt Arcadia to drastically reduce pumping from shared wells
    http://www.sgvtribune.com/environment-and-nature/20150506/sierra-madre-asks-board-to-prompt-arcadia-to-drastically-reduce-pumping-from-shared-wells

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    1. Glad that is getting some wider attention!

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    2. Arcadia should only be pumping 88 acre feet a year from the Anoakia well. You know damn well that they're stealing, er, pumping more than that.

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    3. Arcadia has more bathrooms per square acre (BPSA).

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    4. Jerry Pearson was not there. He only goes to the private meetings.

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    5. Yes. Jerry avoids townies. He only associates with like minded gentlemen.

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  7. The committee that is holding hearings to get input from citizens on the budget. Capoccia and Elaine presented last night. The elderly gentleman was the only one to giver verbal recommendations. There were only 3 people at this hearing. I figured maybe he was a ringer so that the committe could say the only people who gave advice were those who supported a UUT hike.

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    1. Ever get the feeling that maybe the people of Sierra Madre don't want to be making decisions that the City Council ought to be making?

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    2. Was Jerry Pearson there?

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    3. If a 15% Utility User Tax (UUT) is such a good idea, why not make it 20%? I can't believe that Gene Goss hasn't thought of that yet.

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    4. Where's Waldo?

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    5. The council in between a rock and a hard place. No matter what they do, they won't please everyone. Best to point to comments from the meetings and say,that's what you said you wanted. Looking to the budget, something has to go and it will not be less staff. I'm predicting the Library will be contracted out.

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    6. Maybe the Library can be funded by Mr. Stockley's foundation.

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    7. I think their plot to have so many meeting is backfiring. They have reached a saturation point. Who wants to see the dog and pony show twice, let alone the first time. I think the council members are wasting their time for further meetings. Anyway, they are preaching to the choir. Most of the people they have reached so far are the pro increase-the-UUT crowd. Have any of you gone to a presentation? I have and it's a waste of time.

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    8. I think the idea is to reach out and communicate with people they never hear from. The missing ingredient here is this: people the City Council doesn't hear from don't have anything to say since they know nothing about city business affairs. That is the vast majority. They're silent because they don't know anything. They are also unlikely to know about the meetings, and if they did would;t go anyway. The thought of having to vote on a UUT question makes me queasy. I am stocking up on barf bags.

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    9. You are so right, 11:53, those who go to the meetings are the same ones who go to city council or watch council meetings on tv. The others could care less until it comes to election time and then it is too late to educate them. I know I'll bring some sarcastic remarks and some rebellion on this blog, but I think the UUT should be held to 8% with no sunset clause and no way to raise it for a period of, say, 6 years.

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    10. I don't want to pay one damn cent more unless I see a significant staff reduction at city hall.

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    11. Where are the taxpayer's pensions?

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    12. 12:48 - you realize that to get that 8% UUT you want there would have to be another vote, right?

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  8. The baseball field sure looks nice and green. What is their allocation?

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    1. Ain't nothin' compared to the average lawn in San Marino. And if you want to see green, check out Lacy Park. So nice to see that a near-by city is not having a drought....

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    2. I was one of the three at the planning commission meeting last night. A card was handed out so we could write out our cost savings and revenue source ideas and turn them in. I turned mine in and so did several of the planning commissioners.

      My suggestion was to lower the cost of the city employee's retirement benefits. Every city in this country that has filed bankruptcy has named the high cost of pensions as the main reason they went broke.

      Barry Gold

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    3. They started trucking water instead of flushing down the drain. I am not sure where they dispersing it.

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