Last weeks Cambria Community Services District meeting was relatively short, but a lot was packed into it. The Board took action on several items that could change the face of the CCSD and the community. And two of the newly elected directors began to show some signs of fulfilling their campaign promise of fiscal responsibility. Among the descisions that will echo far into Cambria’s future: approval of a letter of agreement for Co-Location of the ambulances (and Healthcare district staff) to the Fire Station; approving a contract for federal advocacy services (aka lobbying) with Van Scoyoc Associates; and, adopting the proposed operating budget for FY 2009-10 (which began on Tuesday).
The greatest portion of evidence of emerging fiscal responsibility was seen in the work done by the Finance Committee (Clift and MacKinnon) and GM Tammy Rudock to reduce some of the expenses. At last months meeting the Directors tried to set an example for staff by taking a 25% pay cut. As Directors, they earn $100 per meeting attended (regardless of length) to a maximum of $600 per month. At this meeting they confirmed the cut by changing their bylaws to enact the change. Even citing the salary freezes and/or cuts at the state and county levels, not to mention the freeze agreed to by the Healthcare district workers (who also have contracts) did not sway the GM from her position that the salaries were non-negotiable. The staff will still be getting their raises (as outlined in the contracts they signed).
So there were cuts elsewhere: all funding for the community bus was eliminated($10,000), likewise Concerts in the Park ($5,000). They will also be vacating Suite 204 (the conference room) and moving those meetings down to the Veterans Memorial Hall Fireside Room. There are some other expenditures that should be ,reviewed amd questioned, including postage for bills sent out, professional fees paid to consultants and fees for broadband services. What follows is an thread of emails regarding some of those expenses.
Email from Rich Davega
To: Frank DeMicco; Muril Clift; Allan MacKinnon
Subject: Controlling CCSD Costs – Postage and Handling
Importance: High
Here’s a message sent to Muril approaching a year ago. I understand that Tammy has “gone on the record” that the presorted first class rate is not available for the CCSD monthly bills. That is a total lie! As you will see from the information below, CCSD absolutely can, and should use that mailing class. The rates have increased for all classes by 2 cents per piece, but it is still a significant savings.
Isn’t it time to hold her accountable? In the words of Nike, just do it! Just tell her to mail them presorted first class!
(Original email from August 2008)
From: Rich Davega
Sent: Wednesday, August 27, 2008 5:30 PM
To: Muril Clift
Subject: Controlling CCSD Costs – Postage and Handling
Muril, at long last I received the necessary information from Michael Graybill, Mailing Standards Specialist, of the USPS to be able to address this issue more completely. If CCSD requires any further information or clarification from the USPS I was encouraged to have them contact the Mailing Requirements Department at 661-775-6661. This material is in response to my earlier inquiry of you, and the CCSD Staff’s response to the General Manager that basically said that what they are doing is the “right thing to do” and the most fiscally responsible.
Attached please find the USPS Quick Service Guide 230d, as well as CCSD’s earlier response. The USPS document shows that the CCSD can qualify for a postage rate of $.324 for first class letters and $.199 for postcards, resulting in significant postage savings. (These rates are slightly higher than my earlier information due to postal rate increases.) Just for the normal bi-monthly bills the postage savings is approximately $400.00 per mailing. Additional mailings, such as the annual fire clearance notification and quarterly newsletters, would yield additional savings.
These savings can be achieved whether or not the CCSD continues the practice of using a contract mailing service. In addition, I could find no reason for why CCSD has not already been receiving the reduced postage benefit while using the contract mailing service. If the CCSD was to begin mailing it’s own permit mail it would be required to pay the annual $180 presort permit mailing fee. Lastly, I’ve encouraged the CCSD to market the direct-debit bill pay feature that they are currently capable of handling.
From the numerous Cambrians that I’ve talked to, very few of them are aware of this time and cost savings option. If used in conjunction with email notices instead of mailed bills, as is standard practice with most business and utilities these days, in addition to curbing postage costs, this option could significantly reduce payment processing costs. I’ve been personally told by CCSD that the email notice versus a mailed notice, as well as no return envelope with a mailed notice for direct-debit customers, is a “can’t do” option.
The CCSD in it’s response said that it only has a manually fed postage meter, and it has deemed it not cost effective to purchase one. Using the postal permit process does not utilize a postage meter. Instead, the permit number is preprinted on the envelopes at no additional cost. The postage fees are collected at the applicable rate when the letters are mailed. To receive the benefit of the reduced postage rate, CCSD must ensure that the mailing is at least 500 pieces and the mail must be bar-coded on either the inserted mail, with the barcode showing through the window envelope, or on the outside of the envelope. Per the USPS there are Windows-based programs readily available that pre-print the bar code on the billing invoice so that it will display through the mailing envelope. Even if the CCSD’s prior computers would not have been compatible with such a program, which I seriously doubt, now that there are 21 brand new computers I’m confident that their hardware is capable of this routine process.
The last paragraph of the CCSD’s response is a totally unfounded attack on presorted first class mail. I have confirmed with the USPS that this type of mail is treated identically to full price first class mail. They, Mr.
Graybill and Cambria Postmaster Gerry Kalar, confirmed that speculation about delayed delivery and non-return of undeliverable mail is baseless.
Frankly, instead of the “can’t do” mentality at CCSD, it’s time for them to develop a “can do” attitude and save some ratepayer money.
Mary Webb:
Thanks for keeping tabs on Postage and Mailing expenses Rich. I wondered if you would do similar research on Innovative Concepts and the high prices we are paying monthly for internet services. The Finance Committee, Muril and Allan, are going to need answers to these questions:
- Do we really need this high speed service?
- Is there a less expensive way to achieve the same goals?
- What happens if/when CCSD offices move, as Pres. Sanders suggested at the last meeting? Do we pay another huge installation fee? How would a CCSD move affect charges like this one?
Again, thanks for paying attention so that we don’t have to pay in other ways, Rich!
Amanda Rice:
It’s amazing the kinds of explanations she offers. They could be 100% true but somehow they STILL feel like lies. The “full explanation” was that since the bills aren’t EXACTLY IDENTICAL (e.g, everyone consumed and pays a slightly different amount and consumed) they aren’t bulk.
I’d suggest Brad Hale might be up for tackling the networking question (among many others with expertise in this field, I suspect)
Brad Hale:
I’m more than happy to examine any systems issues (or any other for that matter) and give all involved an unbiased opinion.
Regarding the following:
Do we really need this high speed service?
Is there a less expensive way to achieve the same goals?
What happens if/when CCSD offices move, as Pres. Sanders suggested at the last meeting? Do we pay another huge installation fee? How would a CCSD move affect charges like this one?
Could someone provide me with a little more detail of the above?
Mary Webb:
The question is regarding Innovative Concepts and the amounts being spent in total, and monthly charges for fiber optic internet services for the CCSD.
I think Amanda has a spreadsheet of expenses since 2007 and the total amounts to about $150,000? Monthly charges are approximately $4,000.
Amanda’s Note: Records show $4,246.50 each month – divided as follows: 839.30 each for Water, Wastewater, Property Management and Fire Departments and 889.30 for the Admin Department. Since July1, 2008 they’ve been paid $96,413.37 In 10 months of available expenditure reports from FY 2007-2008, they were paid 40,020.33 View all the 2008-09 expenditures here.
What I wonder is how much would be spent if we had to move the CCSD offices. Don’t they have to invest in copper cable to install fiber optic broadband? Each month CCSD has charges similar to this:
INNOVATIVE CONCEPTS 49394 5/12/2009 1 5 0.00 ADM/TECH SUPPORT 4/16/09
INNOVATIVE CONCEPTS 49394 5/12/2009 1 5 0.00 WW/TECH SUPPORT 4/24/09
INNOVATIVE CONCEPTS 49394 5/12/2009 1 839.30 FD/BROADBAND SERVICES MAY 2009
INNOVATIVE CONCEPTS 49394 5/12/2009 2 839.30 PM/BROADBAND SERVICES MAY 2009
INNOVATIVE CONCEPTS 49394 5/12/2009 3 839.30 WD/BROADBAND SERVICES MAY 2009
INNOVATIVE CONCEPTS 49394 5/12/2009 4 839.30 WW/BROADBAND SERVICES MAY 2009
INNOVATIVE CONCEPTS 49394 5/12/2009 5 889.30 ADM/BROADBAND SERVICES MAY 2009
INNOVATIVE CONCEPTS 49394 5/12/2009 1 5 0.00 ADM/TECH SUPPORT 4/30/09
INNOVATIVE CONCEPTS 49394 5/12/2009 1 5 0.00 WW/TECH SUPPORT 5/5/09
INNOVATIVE CONCEPTS 49435 5/21/2009 1 200.00 ADM/
4,646.50
Do we really need this high speed service?
Is there a less expensive way to achieve the same goals?
What happens if/when CCSD offices move, as Pres. Sanders suggested at the last meeting? Do we pay another huge installation fee? How would a CCSD move affect charges like this one?
Here is an old email From Amanda re: Innovative Concepts
According to the monthly expenditure reports, so far this fiscal year Innovative Concepts(IC) has been paid nearly $46,000 for tech support and equipment.
For 8 months of FY 2007-2008 (7/1/ 2007-10/30/2007 and 3/1/2008-6/30/2008) they were paid $30,000. (I do not have the expenditure reports for 11/07 through 2/29/07 – extrapolation based on so far this year say its probably about $45,000. )
In March and April 2007, IC was paid about $17,641. There was no notation for Innovative Concepts on the Feb 2007 report and I don’t have the other reports of that year.
Until FY 2007-2008, all Innovative Concepts charges were billed to the ADM department. Starting in FY 2007-2008, tech support and equipment provided by IC were billed to the department that saw the benefit (e.g. when Tech Support did work for the Fire Department or installed equipment at the station, the amount was charged to the FD department.)
The October Expenditure report showed nearly $4200 for 1-month recurring broadband. At yesterday’s meeting, I asked about this, but didn’t get to stick around to hear an answer.
Any light you can shed on this type of service would be helpful.
Brad Hale:
That *looks* to me as though it is for a private wide area network. Depending on what they are using it for it IS excessive in this day and age of multi-megabit access via Cable and DSL. If they are using it to communicate internally that can easily be accomplished with a normal hi-speed connection and a VPN (Virtual Private Network) set up between them. It all really depends on WHAT services they need the network for.
IF it is for services that IC provides them and IC is the *only* place those services can be obtained then the CCSD is probably screwed unless they can find competing services and force IC to provide more competitive pricing.
If someone can get me the detail on *what* services they provide I can tell you more about it.
Mary Webb :
Thanks for taking a look at it Brad,
You brought up another interesting and worrisome question we had last year:
Is T. Rudock virtually locking every other competing business out by signing exclusive contracts like this? Is the software so specific no one else can use it? Isn’t that bad business practice in general? Do you provide this type of service? If yes, should these contracts be open to locals, such as yourself?
I also wondered if the GM signed us on to a bad deal (similar to committing us to employee contracts we can’t afford for years in advance). You would have to get more complete information from the directors themselves as I don’t know the answers. Directors?
Link included to Innovative Concepts Contract obtained through a public records request last year
Steve Overturf :
Mary: I had a comment or two about this issue. I called Al Hernandez to thank him for what I found to be a most interesting viewpoint article in The Cambrian a couple of weeks ago *(article included at the end of this post). I told him I thought the idea of comparing costs between two California cities that are very close to the same size was almost inspired, and wondered why no one else had thought of doing it. We had a long and good conversation, including his wondering why we were spending so much money on Innovative Concepts, which they also use while paying about half the amount we do. I don’t know, of course, if we are comparing apples to apples here, but Al is a new Cambria resident who is interested, clearly knowledgeable and willing to help.
Peter Chaldecott (CCSD Director) seemed to suggest in comments at the most-recent board meeting that sometimes a more expensive service or product is superior, as problems are avoided that way. That is a point well taken, but if it winds up being true that we are paying twice for pretty much the same service from the same provider, that would certainly be interesting to know.
Peter also took Al to task explicitly in a letter to the editor in response to Al’s article *(also included below), essentially pointing out that the two cities are different. While accepting that point, and with all due respect to Peter, I felt that just because two cities are not exactly alike (they never are) does not mean that comparisons cannot be made. In fact, it entirely missed Al’s main point–which was that based almost on any comparison we are spending way too much on staff salaries and benefits.
A specific example that gets my attention as we work our way through these difficult times is the automatic raises for CCSD staff based upon a “cost of living” adjustment of four percent, included in their contracts. I call these automatic raises–and put cost of living in quotes–because that is what they are. A real cost of living increase (sometimes called a COLA) is based upon the actual experienced increase in a measure of the cost of living, like the consumer price index (CPI).
The most recent CPI increased at 0.1 percent for the entire year ending May 2009. There is, in other words, virtually no inflation. So, if we increase staff salaries in the middle of the worst recession since the Great Depression we are giving what is called a “real” increase in salaries–taking money from residents (many of whom are hurting) and distributing it to CCSD staff as raises. This is a transfer of income and wealth that will strike many as, might I say, inelegant.
The last board meeting was wonderful in the way that several of the members raised important issues such as these, and it is clear that they get it–and want to do something about it. The problem, as I see it, is that the myriad of other cities that have found a way to limit salary and benefit increases around the country have done so with the help of the general manager (by whatever title) of that city, taking the initiative in the process of approaching employees to generate a consensual agreement. Contracts exist, of course, so the board of an entity is placed in a difficult position unless the GM helps, which is really what he or she is there for. If a GM tries to stonewall, represents only the interests of the staff over ratepayers, or takes an adversarial stance, good results are difficult.
I’m not saying any of this is happening, because I am not close enough to what is actually afoot, but I am suspicious given what I have seen of the good will evidenced by several of our board members, and yet we not seeing the level of results many would like to see on expenses. And we’re talking some pretty big dollar expenditures here.
Thanks for listening.
Mary Webb:
Hi Steve,
Thank you once more, for a thoughtful and well written email. I was thrilled to read Mr. Hernandez’ letter in the Cambrian*(see below). The citizens groups have suggested city to city comparison, and some even called Templeton, Atascadero and Pismo to try to get more information on their budgets etc. I don’t have time to look back at all the numbers (thousands of emails) but the general consensus is that we are overpaying by a big margin. We pay T. Rudock more than the Gen Mgr of Atascadero. A much larger city. We knew this last year and one emailer suggested we do a comparison – I told him to please do it himself and bring it back to one of our many meetings. Looks like Mr. Hernandez may take up that reign thank goodness!
The real problem we have is lack of time and coordination …we only have so much time to work on these issues! I just talked to another constituent at the Vet’s Hall who says he wants to get involved – but will he? Will he attend a meeting? We have successfully overcome so many issues in the last few years while running two campaigns opposing rate increases. When the citizens are informed they vote accordingly – and they protested. But it is left up to an organized group of volunteers to do the informing because we fighting the constant misrepresentation at the board meetings by the President who says things like “Anyone with a typewriter can sue”. If it’s so simple why don’t they open up the closed sessions to the public or report what happens at the closed sessions?
We are always steps behind the former board, the Gen. Mgr and the Lawyers who are getting paid regularly to support the Gen. Mgr. in opposition to the citizens groups. The real problem, as I see it, is that citizens don’t have a direct financial incentive and reward – our reward is indirect – lower taxes, lower rates. The people we disagree with have a direct financial incentive –Gen. Mgr. salaries, pensions, benefits, monthly legal fees for lawyers, lobbyists. The more they disagree with the citizens, the more the lawyers get paid. They all get paid to work 24/7 on ways to wheedle around the law in order to get what they want and push thru their agenda.
So on the subject of incentives and COLA. You are right on Steve. The Gen. Mgr. was fully supported and the past board members (now Sanders and Chaldecott) rubber stamped all the employee contracts, raises, and benefits she generously doled out to herself and her loyal staff. They said at one of the meetings they didn’t want to ‘micro manage’ her- in actuality, they were directing her to shove their agenda down our throats. Almost everyone who was involved in the past two protests against rate increases agrees the Gen. Mgr. should have been fired. We may have different reasons, but the outcomes are the same. We all expected her to be fired by now. The fact that she is there makes it all the more difficult (almost impossible) for the citizens and the board to come to agreements on Cambria’s future.
Consider this: Last summer, when the former board and Gen. Mgr. were beating the money drum about infrastructure failures, fire safety, and financial doomsday scenarios, T. Rudock was busily signing a 2 YEAR CONTRACT with Davidson & Associates to the tune of $120,000 or $130,000 dollars! That’s right – not 1 year, but 2 years. We’re on the hook til June of 2010. Grounds for firing?
Our new board members did a terrific job last meeting – thank you for reminding me of that fact. They are getting it – they are asking the right questions and they are not settling for the instructions to “go talk about it in your committee”. I actually saw, for the first time, actual deliberation at the board meeting. This is terrific – deliberation. Discussion. Disagreement. Reasoning. Decision making. Look – the citizens can take it! Discussion! Sunshine. Even if we disagree, we get to hear the full range of issues raised by the board members themselves. This way we can decide whether we vote for them again next time around.
Thank you again
Posted on Cambrian site Thu, Jun. 11, 2009
Viewpoint: CCSD’s cost structure seems out of line; explanation needed
Al Hernandez
When we compare Cambria Community Services District rates to Guadalupe, a similarly sized community, CCSD rates are too high and we need to look at the overhead and adjust overhead before we accept a rate increase.
I was able to attend a CCSD meeting in late March when they were discussing the water and sewer rate increases and how these funds need to be self-supporting (normally these meeting are held at 12:30 p. m., so I can never attend, why not have a few at 6:30 p. m.?).
What I do not understand is how CCSD can be losing money when other communities of similar size make money at lower rates. For example:
CCSD vs. Guadalupe
Water per units 4.94 vs. 3.25
Sewer 43.49 vs. 24.2
Garbage 100.2 vs. 24.01
Now they are asking for a 9.75 percent increase in water and 15 percent for sewer and say they must have it or they will loss money. Is the problem that water is too expensive? Or that the overhead is too high and care has not been given in this area to control costs?
Lets look at Cambria (population estimated at 6,597 in 2007), compared to Guadalupe (population estimated at 6,659 in 2007):
CCSD est. vs. Guadalupe
Full Time Emps. 35 vs. 37
Police Dept. 0 vs. 17
Fire Dept. 1 vs. 4
Other Admin. 34 vs. 16
Other administrative services includes: Wastewater treatment plant, building and planning, water department (including billing and collections), payroll, streets, parks and recreation, finance and administration.
Guadalupe has a full wastewater treatment plant, water department that bills monthly and sends out its own utility bills, streets, building and inspection department, payroll is done in-house, etc.
If the above is correct, could the problem be in the overhead and the compensation that is being paid? I know that there is a contract in place with the Service Employees International Union (SEIU) for CCSD, but Guadalupe has the same union (SEIU), only with much lower rates as far as compensation, health care cost and pension Costs.
Maybe CCSD did a poor job of negotiating the contract and how they expect the residents of Cambria to pay for it.
Maybe CCSD needs to take a hard look at the overhead and possibly restructure, eliminate redundant positions and get staff to earn their pay before they come and ask the residents to dig deeper into their wallets to pay for an inefficient structure.
I urge the residents of Cambria to return their rate protest letter saying “NO.” Make the CCSD re-look at their structure and make cuts like every other community has and let’s hold accountable those who are making the wrong decisions.
Here is a quick comparison of financial information:
As can be seen salaries, PR and benefits are higher for CCSD than for Guadalupe. PR and benefits as a percentage of salaries is about 15 percent higher in Cambria, not to mention the higher salary numbers for water, fire and the wastewater treatment plant. I do not have all the numbers from CCSD, but I would like to see an explanation before we just accept higher rates.
Al Hernandez is a resident of Cambria.
I was surprised at Mr. Al Hernandez’ comparison of Cambria and Guadalupe staffing levels (June 11, “CCSD’s cost structure seems out of line; explanation needed”).
His interesting finding that the fire department has only one employee does question the thoroughness of his investigation!
Here are the staffing numbers I have obtained from published reports, as compared with Mr. Hernandez’ numbers.
‘88 ‘08 Mr. H.
Wtr/Swr 11 10 —
Fire 3 11* 1
Admin 5 6 34
Mgmnt 3 4** —
Vets Bldg 1.5 2.5*** —
TOTAL 23.5 33.5 35
Notes: * Fire department upgraded with three firefighters on duty 24 hours a day/seven days a week; total includes a fire chief and administrative technician.
** District engineer position added.
*** Fiscalini Ranch Preserve, open space/retired lots and public restrooms included.
In addition, Guadalupe is in a relatively flat area requiring only a fraction of the pumping equipment and infrastructure we need in Cambria.
Peter Chaldecott, director
Cambria Community Services District
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