Analysis of Employee Compensation at the Marin Municipal Water District

The Marin Municipal Water District recently proposed a rate hike that would increase most residents’ water bills by an average 27 percent.

The proposal comes on the heels of a recently released “cost of service analysis” that concluded the District would need to significantly increase revenues to offset their rising costs.

While the analysis treated the District’s costs as a given and, subsequently, determined raising rates was the most prudent course of action, it is always useful to review costs in times of financial distress.

To that end, a review of the District’s personnel costs — which account for nearly 60 percent of total operating funds — would be useful.

Non-utility staff fare best

At the top, the $311,000 compensation package for MMWD’s general counsel is nearly $20,000 more than what the general counsel for California Teachers Retirement System earns, despite the extreme disparity in size and scope of the MMWD and the world’s largest educators-only public pension fund.

The MMWD also appears to employ more and spend higher amounts on public information staff than most similarly-sized agencies. The $188,000 compensation package for the District’s public information officer (PIO) was the 2nd highest of any employee sharing that job title last year and significantly higher than the cost for PIOs at substantially larger agencies such as the State of California ($144k), the City of Anaheim ($141k), and the Los Angeles Unified School District ($139k), according to data from TransparentCalifornia.com.

Additionally, the MMWD employs two public information representatives at an average cost of $120,000 each. These positions are clerical and administrative support roles that require either three years of related work experience with a high school degree or one year of work experience and having completed “college level courses” in relevant fields.

By comparison, the Alameda County Water District does not appear to employ any public information officers and instructs public records requests to be sent to their executive assistant’s attention, suggesting these duties are assigned to existing personnel.

Agency-wide comparison between utility districts

In total, the MMWD spent $172 on employee compensation for each of their 187,500 residents served last year. This is significantly higher than the $104 spent by the North Marin Water District as well as other nearby agencies:

MMWD

Another approach would be to look at total employee compensation per service connection. MMWD is highest amongst nearby agencies for which comparable data was available:

mmwd3

Market Comparison

A more meaningful assessment of wages paid at the MMWD would factor in the market as a whole, not merely other public agencies. While some positions do not have a clear private sector counterpart, analyzing those that do provides insight into the agency’s overall approach to employee compensation.

The tables below compare the 2014 wages paid to MMWD staff with the most easily comparable job titles and their counterparts in the San Francisco-San Mateo-Redwood City area, as defined by the Bureau of Labor and Statistics.

The San Francisco region was chosen only because there was no Marin-specific region provided by the BLS. Unsurprisingly, the wages reported for the San Francisco-area are all significantly higher than the statewide averages. For the position of administrative assistant, the 75th percentile BLS wage of $54,810 was used instead of the average $44,480 as the MMWD’s job description suggests an above average work load.

Table 1: Average 2014 Salaries of MMWD Employees vs Market

Job Title SF-Area MMWD Difference
Accountant $78,090 $86,691 11%
Treatment Plant Operators $79,060 $96,694 22%
Administrative Assistant $54,810 $68,953 26%
Accounting Clerk $50,000 $65,662 31%
Customer Service Rep $46,830 $61,630 32%

Table 2 incorporates the value of MMWD’s health and retirement benefits and compares that against the BLS wage plus the estimated average private-employer cost of benefits. The treatment plant operator position was excluded as that is predominately a government-specific job.

Table 2: Average 2014 Salaries + Benefits of MMWD Employees vs Market

Job Title San Francisco Area MMWD Difference
Accountant $88,383 $107,669 22%
Accounting Clerk $59,450 $91,216 53%
Customer Service Rep $56,185 $89,425 59%
Administrative Assistant $64,404 $103,120 60%

mmwd2

The above findings understate the compensation premium enjoyed by MMWD staff as they do not include the value of job security, which experts have estimated to be worth anywhere from 3-10 percent of wages, or the cost of retiree health benefits that are provided to district employees after ten years of employment.

Conclusion

A cursory review of the District’s single largest expense — employee compensation — reveals significantly above market levels of pay on an individualized basis for targeted jobs, a strong indicator of the District’s overall approach to employee compensation.

Further, a total employee cost per resident or customer served that is nearly 70 percently higher than the North Marin Water District suggests an excess in the number of personnel employed, in addition to the excessive levels of employee compensation itself.