The Public Eye

San Juan Water District under fire for rate hikes, high pay


An agency that provides water to Granite Bay residents and sells it to districts serving Sacramento suburbs has repeatedly increased employee pay while also raising water rates, upsetting some of its biggest customers.

The San Juan Water District delivers residential and commercial water service in Granite Bay, part of Folsom and part of unincorporated Sacramento County. It also sells water to providers in Fair Oaks, Citrus Heights and Orangevale.

The district paid its employees an average of $94,392 in 2012, the ninth-highest average wage out of 174 independent water districts in the state, The Sacramento Bee found in an analysis of data collected by the State Controller’s Office. The analysis is based on lower wages than what the district reported to the state because General Manager Shauna Lorance told The Bee that she recently discovered the district had double-counted some figures.

Based on the revised figures, pay went up 15 percent at the district between 2009 and 2012, despite the recession.

Tom Gray, general manager of the Fair Oaks Water District, said San Juan has increased its water rates 51 percent in the last 10 years. To avoid passing on those rate hikes to his customers, Gray said he has not filled openings for 10 of the 42 employees the district had a decade ago.

The State Controller’s Office is reviewing compensation at the San Juan Water District. Auditors must finish reviewing documents from the district before deciding whether to launch a formal investigation, said Controller’s Office spokesman Jacob Roper. He confirmed that compensation rates are the focus of the review, which was launched in response to a public complaint.

Lorance doesn’t dispute the amount of the rate increases, but said they were mostly needed to pay for improvements to the San Juan treatment plant built about 25 years ago.

San Juan board director Dave Peterson said he thinks closer to half of the rate increase revenue was used to boost salaries. Peterson said he was one of the few directors to consistently oppose salary increases, which were always wrapped into votes on annual budgets, along with rate increases.

“We’re very insulated,” he said. “We set the rates at whatever we want.”

Peterson will leave the board this month because he decided not to run for re-election last month. He said he grew tired of fighting the board about finances.

“Our general manager makes more than the governor,” he said of Lorance, whose 2012 pay was $203,000.

Edward J. “Ted” Costa, a director on the district’s board, defended the pay increases. An anti-tax conservative activist, Costa drafted the petition that eventually led to the recall of Gov. Gray Davis.

“I was always the taxpayers’ advocate, but I’m proud as hell of our water-treatment workers,” he said.

Fair Oaks officials say they have grown frustrated with the San Juan board. They have complained to the San Juan board, and the disputes have sometimes gotten personal and heated.

“We’re very frustrated that they seem to routinely spend money,” said Fair Oaks board President Lonny Gossett. “During the recession, teachers were getting cut, police officers were laid off, and they were getting raises.”

Paying employees an average of almost $100,000 is “insanity for a district with 40 employees,” said Fair Oaks director Misha Sarkovich. “They just continually raise the rates and raise the salaries.”

Lorance said one reason San Juan has a higher average salary is because it treats water, and such work requires higher-skilled and better-paid employees. Smaller water districts buy treated water from agencies like San Juan and do not employ such workers, she said.

She also said most of the salary increases have been annual cost-of-living adjustments. In five of the last eight years, the district has given employees cost-of-living increases totaling 14 percent. Denying the increases would have amounted to cutting salaries, Lorance said.

Call The Bee’s Brad Branan, (916) 321-1065. Follow him on Twitter @BradB_at_SacBee.