FixEID

  The rest of the story...

EID's spending is out of control and getting worse!

February 3, 2012

35% of EID rates go for debt... 33% more for overhead.

Of EID's $64 million of operating spending and debt costs budgeted for 2012, a "staggering" 35% goes to pay for debt service (including $16 million of interest and $6 million of debt principal repayment). Because EID's total debt has more than tripled to $390 million since December 2003, at this year's budgeted $6 million per year repayment rate, it will take 65 years to repay the current debt.

Next, after the 35% of rates required to pay for debt, a further "whopping" 33% of EID's $64 million operating and debt spending costs for 2012 go to pay for EID's bloated overhead.

Since 2003, EID's overhead spending has surged more than $10 million dollars. The 143% increase in overhead is FIVE times the 27% increase rate of field operations expense during this same period.

Included in EID's runaway overhead spending increases since 2003 are such items as
3 PR people, 2 lawyers, 5 HR people, 11 IT people, and 20 engineering people. Until EID slashes into the excessive number of overhead personnel, how can they in good conscience call on water ratepayers for another huge rate increase in April 2012?

Lastly, note that in contrast to EID's excessive level of debt costs and overhead costs, a surprisingly modest 32% of rates are for field operations expense... for the people in the field doing the actual work we think of in delivering safe and reliable water and wastewater services. Field operations have "hunkered down" their spending greatly while EID's folks on Mosquito Road have gone on a spending spree... for far more capital projects than ratepayers can afford, and for far more overhead than ratepayers can afford.

EID Directors Osborne, Fraser, Wheeldon, George and (former Director) Norris slap themselves on the back for having been a great board and misleadingly claim they have "slashed spending to the bone". (Instead of comparing against their 2003 starting point together as a Board, they deceptively compare against a 2008 one year "bubble" that included millions of dollars of "one-time/non-recurring" expenses).

But their above spending track record since 2003 belies their self-congratulatory backslapping... clearly they let spending get WAY out of hand.

With the $1.7 million gross* spending increase in EID's 2012 Operating budget following a $3.6 million gross* spending increase in 2011, ratepayers have every right to be angry that EID's Management and Board STILL aren't watching out for ratepayer wallets.

The dreadful truth is that EID plans $15 million per year deficit spending for the next five years, plans to raise $60 million more debt in 2013, and has double digit water RATE HIKES planned again for both 2013 and 2014!

Have you had enough of EID's out of control spending?

*
Don't be fooled by EID's capitalized operating spending gimmicks that hide $2 million of operating spending in 2011, and $3 million of operating spending in 2012.