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TUD Works To Achieve Balance

TUD Board of Directors Works to Achieve A Balance Between Employees and Ratepayers

In the September 11, 2020 newspaper article, “Contentious negotiations between board and labor union become public,” the Union Democrat quotes TUD’s labor union representative who makes several misstatements about the TUD Board of Directors’ commitment and investment in TUD employees and its position regarding TUD’s last, best, and final offer (LBFO) to its union employees.

Contrary to the labor union representative’s statements, the LBFO includes two cost of living adjustments of 1.5– 2.0% tied to the Consumer Price Index, along with new flexible, alternative work schedules to improve the work/life balance for TUD employees. The District’s offer also includes maintaining all employees’ current and future sick leave accruals, but freezing the balance for cash out value and maintaining the ability to convert sick leave to pension service credit upon retirement – sick leave accruals remain intact and the value is not lost. The District’s LBFO also maintains its 85% share of an employee’s family health insurance plan, but limits that share to the PERS Choice plan, resulting in vast majority of the employees seeing no change in benefits but also allowing the employees currently in the highest tier plan to change plans during open enrollment and actually save money on premiums for similar benefits. Lastly, CalPERS has informed TUD that employer contribution rates are increasing over the next five years and in an effort to balance that obligation, the District’s LBFO asks some employees to share in 1% of the nearly 38% employer contribution rate starting in the third year of the contract. Overall, the proposed labor contract represents a positive cash value for all employees while maintaining the need to keep rates affordable.

The positive cash value of the LBFO is in addition to the TUD Board’s established policy to pay its employees
3% above the mean as compared to six other comparable water and wastewater utilities to attract and retain
quality employees. According to the 2020 total compensation survey, 85% of TUD’s union classifications are
paid 5% or more above the comparison market, which does not include the sick leave cash out benefit upon
separation or the District’s investment in each employee’s career development and advancement.

This shows the Board is committed to compensating its employees fairly but is equally committed to
negotiating the right balance between fair pay and keeping rates affordable for the community. While seeking
that balance, the Board is mindful that TUD’s infrastructure is under-sized and aging, and the District spent $6.5 million on capital improvement projects (CIP) over the last year replacing and improving water and sewer infrastructure across the community. Yet the District still has $200 million in unbudgeted and deferred capital improvements that need to be built in the years ahead. With increasing costs, such as pensions, medical insurance, materials and supplies, and hundreds of millions in deferred CIP, the Board must fairly treat both union members and ratepayers while operating and maintaining the water and sewer system that we all depend upon.

Finding this balance has not been easy, as evidenced by the number of meetings held between the parties, but the Board is hopeful the labor union and its members accept the LBFO. Regardless of whether the LBFO is accepted or not, the Board wants its employees and the community to know that the Board is proud of and
respects its employees’ hard work and dedication. At the same time, the Board is hopeful its employees
understand the delicate balance the Board has tried to maintain to support its employees while keeping rates
affordable to its customers and planning for future infrastructure improvements in Tuolumne County.

Bob Rucker, President
Board of Directors
Tuolumne Utilities District