Carmichael Water District Terminates Unapproved Employee Benefits
Jul 23, 2020 12:00AM ● By Story by Shaunna Boyd
The Board directed the Ad Hoc Compensation Policy Committee to review the District's benefit programs. Photo: Carmichael Water District
CARMICHAEL, CA (MPG) - The Carmichael Water District (CWD) Board of Directors recently terminated multiple employee benefit programs (education/training benefits, deferred compensation, life insurance, and leave benefits) that had been granted without the approval of the Board — even signing a resolution on May 18, 2020, stating that the programs were “unauthorized by law and in violation of District policy.” At that same meeting, the Board directed the Ad Hoc Compensation Policy Committee (members Paul Selsky and Jeff Nelson) to review the District’s benefit programs and make recommendations for any changes to the Policy Manual.
After reviewing the District’s policies and comparing them to other similar agencies, the Compensation Policy Committee presented their recommendations at the June 15 meeting. Before the Board terminated the benefits in question, employees could utilize an Education/Training benefit that granted $500 per course for certifications, trainings, or continuing education programs. Higher benefits could also be approved by the General Manager. The Committee recommended that the Board limit the benefit to $500 per person per year as well as impose stricter requirements that the education/trainings relate to the employee’s position at the district.
The District was using two deferred compensation plans for employee retirement accounts: a matching plan for union employees (up to $200 per pay period) and a non-matching retirement plan for other employees. The Board suspended the matching benefit at the May meeting, but the Committee recommended that the benefit be reinstated (or rather, officially recognized as policy) and be extended to include all District employees.
The employee Life Insurance Benefit was also implemented on two tiers: The District paid for basic life insurance up to $200,000 for exempt employees and up to $150,000 for non-exempt employees. The Committee suggested a modification to equalize the benefit so that all employees are eligible for the higher coverage level.
The Committee recommended no changes to official leave benefits — such as family and medical leave, vacation, sick, holiday, and administrative leave. Some employees were utilizing and accruing admin leave before it was terminated at the May meeting, but the Committee emphasized that admin leave was never officially approved by the Board. So, for any employees who thought they were accruing admin leave time, that benefit has basically disappeared.
Director Roy Leidy asked for clarification on the termination of admin leave, asking whether the Committee recommended any restitution for those employees who were losing the paid admin leave benefit: “Going forward, what is equitable?” Director Leidy also expressed frustration that the Board wasn’t given copies of the Committee’s recommendations ahead of time so the Directors could have been prepared to have a real discussion during the meeting: “Since we did not get this information until just now, I’m a little bit pissed off. … This is what happened last time with the resolution. It was not presented until the Board meeting, and this is not the way I believe the Carmichael Water District ought to be operating, in all fairness and transparency. I’m not going to comment further on this other than to ask more questions, because I haven’t had the time to really digest this. And it’s very much unfair to drop it on Board members or members of the public, whether they’re here or not, for consideration at the last second. This is not the way we operate.”
Director Leidy said, “I am eager to move on expeditiously because this is a matter of concern to our staff, and I want the staff to understand that we’re trying to move forward with this and not delay things at all.” He also asked for staff to comment on the recommendations “because you’re the people who are directly affected by these potential changes.”
Assistant General Manager Lynette Moreno said the recommendation to cut the budget for staff training/education, capping the benefit at $500 per person per year, is “really prohibitive.” The District “has always been a proponent of education. … I think it’s discouraging if we back down on that.” Moreno also stated that trainings, certifications, and degree programs should be treated as separate categories with separate caps.
Regarding the termination of admin leave, Moreno said, “Now you’ve cut total compensation for all the exempt employees, which are the ones that have to work the longer hours and be on call 24/7. It’s punitive to me.”
Carmichael Water District Human Resources Coordinator Lori Kalisiak agreed that terminating admin leave is “basically giving all exempt employees a cut in pay.” Kalisiak also said that the education/training benefit already required job relevance: “There was a process in place, [and] $500 will barely pay for a class in most cases.”
Carmichael Water District Public Information Officer Chris Nelson asked whether the Board felt that the education benefit had been abused. Director Jeff Nelson responded that the money spent on the benefit exceeded what had been officially approved by the Board. However, Director Leidy said he does not believe the benefit has been abused.
Director Leidy asked that Board members consider comments from staff as they prepare to discuss the Committee recommendations at the July meeting. He said, “It’s critical to staff here and the morale of staff, so we need to move this forward.”
(More information was requested from the District regarding the Board’s initial discussion from the May 18 meeting, but the information was unavailable at press time.)