OC Watchdog reporter Keegan Kyle reported recently on MWD’s growing mountain of debt to fund an uncommon retirement benefit: lifetime health care for employees and their spouses. These costs, he wrote, will eventually be passed on to water ratepayers in the form of higher rates.
He also reported that MWD has accumulated $545 million in debt to fund the benefit, mostly because they have not been setting any money aside to cover the cost for current employees. And, despite plans to incrementally fund the benefit over time, projections show that those funds are not enough.
MWD’s consultants project that the debt is currently growing by more than $30 million annually. Since 2005, the tab has grown 76 percent. It could rise even higher, if more people than expected retire, live longer and health care costs keep rising.
Concern over the rising cost of MWD’s retiree medical benefit, and its impact on water ratepayers was also expressed last fall by former San Diego Mayor Jerry Sanders. In a letter to MWD Chariman John Foley, Mayor Sanders wrote to MWD and asked MWD for an accounting of the impact on water rates.
MWD Chair Foley responded by saying that MWD will continue to fund and approve rates that pay for this benefit.
MWD will be required to update its numbers and report those to the board this spring. Once it becomes available, that presentation and update will be posted on this website.
To read the OC Watchdog story, click here.