OPD Board Passes 8% COLA Increase

By VERNON ROBISON

The Progress

In an attempt to keep up with inflation, the Overton Power District (OPD5) Board of Directors approved a one-time 8 percent cost of living adjustment for all district rank and file employees during a meeting held on Wednesday, Oct. 19 in Mesquite.

The adjustment will increase the district’s total payroll and benefits expense by $434,000 annually.
OPD5 General Manager Mendis Cooper explained that he had appointed a committee of employees from every department in the district to study this issue. He turned the discussion over to Engineering employee Scott Robison, who had been appointed as spokesman for the committee.

Robison reminded the board that a cost of living adjustment (COLA) policy had already been approved by the board just last year. This new policy was to establish a 2.5 percent annual COLA to keep employee compensation on track with inflation over the long term, Robison said.

But the policy also included a renegotiation trigger. If at any time, ten-year average Consumer Price Index had seen a more significant change than normal, the policy would be brought back to the board for further renegotiation, Robison said.
“That has been triggered this year,” Robison said. “As you know we have seen a spike in inflation, beginning in 2021 and carrying through 2022.”

Robison said that the trigger for renegotiation was at 4.5 percent inflation. But the third quarter inflation rate, reported by the Bureau of Labor Statistics the previous week, was at 8.2 percent. The previous year’s rate was at 5.4 percent.
“It is unfortunate that right after we create this policy, we have already met the trigger,” Robison said. “But I guess it is also good in a way to work out the kinks right up front.”

To further build his case, Robison also presented numbers on price increases in various sectors over the past 12 months. These included a 13.7 percent increase in transportation costs, a 26.2 percent increase to fuel, an 11.4 percent increase in food, a 6.1 percent increase in services, and a 10.1 percent increase in commodities.

In addition, Robison said that his committee had researched what other utilities in the region are doing in the realm of cost of living adjustments for employees.
“What we found is that utilities and businesses in the region are seeing (COLA) increases as high as 10-12 percent,” Robison said.

The committee also polled every OPD5 employee on what they thought was fair on this issue.
“It was pretty uniform across all the departments that everyone was feeling that they wanted to maintain as close to inflation as we can,” Robison said.

The committee also considered what was healthy and possible for the district in its recommendation, Robison said. “We know that there really needs to be a balance between having a healthy district and healthy employees,” Robison said.

So the committee proposed a possible range of options which the board could choose from, rather than just pushing for one number.
“What we are proposing to you is a one-time increase to the existing policy of between 5.5 percent and 8 percent,” Robison said. “That one-time increase would be inclusive of the 2.5 percent that would already be in place according to the policy. It would not be over and above it.”

Board member Mike Young said that if all things were to be absolutely even, the high end of the committee’s range was the right choice. But he wondered what the customers would think.
“How are they going to feel about 8 percent?” Young asked. “There is public perception that ‘Oh, they’re overcharging us for electricity!’ But really 5.5 percent, in my mind is an insult to the employees under these conditions.”

Board member Chad Leavitt pointed out that the board had just recently voted to increase the base rate charged to all customers by 8 percent. That decision had been based on inflation numbers, he said.
“So I think that those things should be parallel to this,” Leavitt said. “Because if our costs are going up and our rates are going up; that is just the way of life right now.”

Young made a motion to follow the proposal and institute a one-time COLA increase of 8 percent for this year. The motion was approved with a unanimous vote.