Investigations

Most managers of SLO County’s smallest areas earn six figures. Are they worth the big bucks?

Many Cambria residents have long complained that Community Services District General Manager Jerry Gruber earns too much money — $170,456 a year, excluding benefits.

Last year, a proposed a six-year contract would have retroactively increased his salary and guaranteed an additional 5 percent annual increase that would have boosted his pay well above that of any local district manager.

That proposal was scrapped following community outcry, though the board ultimately approved a one-time 6 percent pay bump.

So if he asks for a raise after this year’s performance evaluation, the opposition is expected to be fierce, especially given that the district just increased water rates by 4 percent and was charged more than $53,000 in fines for filing late reports with the state.

“I think people would have the right to be concerned with awarding him a raise this time, especially given the fines from the water board,” Cambria CSD board President Amanda Rice said.

At $237,800 in total compensation (including benefits), Gruber is the second-highest-paid general manager of local districts that provide water, sewage and other specific services in unincorporated areas of San Luis Obispo County not governed by a municipality, according to salary information obtained by The Tribune through the California Public Records Act. The Tribune surveyed public districts with populations of at least 1,000 that perform more than one function.

Oceano’s General Manager Paavo Ogren tops the list with an annual salary of $205,922— $244,400 including benefits and allowances.

By comparison, former San Luis Obispo County Chief Administrative Officer Dan Buckshi earned roughly $239,000 a year, or $371,000 with benefits.

Whereas the CSD general managers oversee anywhere from one full-time employee to a staff of about 50, Buckshi oversaw about 3,000 county employees when he left his job this month. And the total county budget of $724 million that he managed last year far surpasses that of the largest local CSD budget — Cambria — which operates on about $11 million a year.

Why is pay high?

The high pay of CSD managers statewide often draws criticism for being excessive, especially when service rates are on the rise.

Independent special districts are the most common form of government in California, numbering about 2,000 across the state, including about 300 CSDs, according to the California Special Districts Association. The organization advocates for roughly half of those agencies and promotes professional development for their staff.

Most local districts’ board members contacted for this story said competitive wages attract highly qualified candidates.

John D’Ornellas, who had been general manager at Heritage Ranch CSD in Paso Robles for nearly 16 years before his retirement this month, earned $150,712 in salary and $191,900, including benefits, last year. He said that the district had a difficult time attracting candidates for his replacement even with the healthy pay — just 12 applicants in a nationwide search.

“The board was amazed at the minimal response for a ‘high-paying, good-benefits’ job,” D’Ornellas said, adding that most of the candidates had little industry experience. “Is it the job, the compensation, the community, the cost of housing in SLO County? Or maybe just more jobs out there than candidates?”

Others said their experienced GMs were hired at a high salary in order to complete very specific tasks.

That was the case with Ogren. When he was hired in 2014, the former county Public Works director was tasked with overseeing specific key infrastructure upgrades to water and sewer lines and an emergency generator, among other things.

In order to afford him, the district left vacant an accounting position that paid $65,000 a year plus benefits.

Comparing CSDs is difficult because they vary in size, location and function.

Port San Luis Harbor District, for example, though considered a “special district” because it doesn’t provide water or sewage services, oversees public safety, maintenance of the harbor and several large improvement projects for a transient population. Ground Squirrel Hollow CSD, on the other hand, solely provides road maintenance to about 600 people in rural Paso Robles.

Part-time contractors

In order to save on administrative costs, some local districts such as Avila Beach and, most recently, Los Osos, outsource their general manager services to part-time contractors. Doing so saves those districts money that would otherwise be spent on full-time employee benefits.

In Avila Beach, the district has contracted GMs since at least 2005, according to Bradley Hagemann, current manager. Though Hagemann only has one full-time employee, he oversees a fluctuating number of operations and maintenance contractors who receive pay and benefits from their private companies.

After going through four full-time GMs in about seven years, the Los Osos CSD last year hired a private firm to manage the district part-time, before settling on Grace Environmental Services, an Arizona-based corporation run by President Charles Grace. The company also manages the San Simeon CSD.

GES was hired in Los Osos in 2016 and is paid a flat fee of about $6,500 a month, or $78,000 annually. A draft budget in May proposed a 23 percent increase in the number of contracted hours GES is allotted, which would have increased its annual pay to about $96,000. But that item was rejected by the board of directors and the district is still in budget talks.

The district, which began hooking up residents’ homes to its long-awaited sewer system last year, will increase water rates by 65 percent over the next three years following a board vote last month.

Though it does so in Los Osos, GES would not disclose how much the company receives for running San Simeon CSD, which provides water and wastewater services to about 460 people and several area hotels. While Grace provided The Tribune invoices dating to 2014, those do not break down the roughly $48,948 it bills the community every month beyond listing $45,614 for operations and management services and $3,333 for maintenance. Grace called that information private.

Jon-Erik Storm, board president of Los Osos CSD, said that the district — with its inability to retain a competent full-time general manager — took a chance with the contractor model, which he said has so far been a good deal for the district. He said the district will continue to evaluate whether the use of GES will serve the district’s needs in the long term.

“Having a contractor gives you flexibility. You get more bang for your buck, and you’re on the hook for less traditional and fringe benefits,” Storm said. “Having a record of not having success (with full-time GMs) and not keeping them on — which usually involves a buyout — this seemed like the thing to try, to do the right thing with people’s hard-earned dollars.”

Comparing salaries statewide

The state Controller’s Office does not have guidelines for employee compensation, but most local districts fall roughly in line with what the state’s trade group representing those districts says is common, according to a Tribune review of CSD payroll records dating back 10 years.

The California Special Districts Association in June 2016 published a Special District Administrative Salary and Benefit survey based on voluntary responses from its membership. The survey found that the average salary for a CSD district manager in the fiscal year ended June 30, 2016, was $132,087.

The group also found that the salaries for district administrators commonly increased between 11 and 20 percent from 2012 and 2016.

Here’s a look at the salaries and projected total compensation for district managers at San Luis Obispo County’s largest CSDs:

In the South County, Nipomo’s Mario Iglesias earns $150,000 in salary and roughly $189,200 in total compensation. Port San Luis Harbor District’s Andrea Lueker earns $126,138 in salary and a total compensation of $162,600.

In the North County, Heritage Ranch’s new general manager, Scott Duffield, is paid $120,000 in salary and roughly $25,000 in benefits, including $3,480 in car and cell phone allowances. Templeton’s Jeff Briltz earns $139,050 in salary and roughly $181,900 in total compensation.

Of the part-time contract GMs (who earn no benefits), Avila Beach’s Hagemann earns the most — a flat $136,500. San Miguel CSD’s Darrell Gentry earns $98,800.

Using the California Special Districts Association survey as a guide, salaries in most of the local districts — Cambria, Nipomo, Templeton, San Miguel and Port San Luis — grew 20 percent or less between 2012 and 2016. Heritage Ranch, however, increased by 27 percent during D’Ornellas’ tenure. Nipomo’s pay increased only 4 percent, the least of any local district.

Executive salary in Oceano — which had a vacant GM position in 2012 — grew 122 percent if comparing 2011 to 2016. If comparing 2013 to 2016, the position’s salary increased just 1.4 percent.

This article has been updated to clarify the number of CSDs and independent special districts in California.

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