SDCTA Study: Board Member Perk Expenditures: Water Districts in San Diego County

This report focuses on perk expenditures for the Board of Directors at the San Diego County Water Authority (also known as the County Water Authority, the Authority, or CWA) and at 14 of the CWA's 24 member agencies. Although the directors at water agencies in this study do not receive salaries for their service, they are compensated in other ways, such as: meeting stipends, health, dental, and vision insurance while serving on the board, Other Post Employment Benefits (OPEB), pension benefits, and reimbursements for costs incurred while traveling to and attending district-related meetings. The goal of this report is to track the total amounts spent by the Authority and 14 of its member agencies in providing these forms of compensation for their directors and to identify opportunities to best control these expenses in the future. The results of this analysis demonstrate that board perk expenditures have increased by 14 percent since 2005. Although increases have not been substantial, taking the steps to reduce excess costs will prevent exorbitant spending on director perks in the future. The following preventative measures should be considered in order to ensure that perk costs will be manageable in the coming years: - Evaluate per month maximum for meeting stipends: Currently, meeting stipends can be redeemed up to 10 times per month at most agencies. Events that qualify for meeting stipends differ across agencies. In addition, agencies rarely exceed two formal meetings per session. Districts should analyze how many meeting days are typically awarded per month and adjust the meeting stipend maximum, if appropriate. This would encourage districts to consolidate meetings on the same day in order to be the most efficient. - Require directors to contribute towards health benefit and pension plans: Health coverage is currently provided for directors at 10 of the 14 member agencies in this study at a cost of $2.7 million since 2005. Also, the Vallecitos Water District pays the full 8% employee contribution rate for pension benefits. Eliminating the pension "pick up" as well as forcing directors to contribute towards their coverage will ensure that directors receive more sensible benefit packages. - Eliminate ratepayer funded dependent coverage: Given that directors do not work full-time, it makes little sense for their dependents to have health benefits paid for by ratepayer dollars. If dependents are allowed to enroll in the same benefit packages as directors, they should be responsible for paying the premiums. Since the top five spenders on health benefits offer dependent coverage to some extent, eliminating this policy would produce instant reductions in expenditures at these agencies. - Adopt travel reimbursement recommendations to reduce costs and maintain transparency: SDCTA conducted a study in 2010 that examined the travel and expense reimbursement policies of public agencies in San Diego County. It includes 14 recommendations made to reduce costs and maintain transparency in all reimbursement transactions. For example, SDCTA suggests that all reimbursements be made in accordance with federal guidelines and rates. Also, transparency can be assured if agencies post reimbursement policies on their websites, enforce that reimbursements can only be obtained with original, itemized receipts, and include a full list of reimbursable items in its policies (see SDCTA's "2010 Travel & Expense Reimbursement Policies of San Diego County Public Agencies" for the full list of recommendations).

Download the report here.