06/17/2019: "OPALCO Manager Paid Over $33,000.00 A MONTH"
By Alex MacLeod
It may come as a bit of a surprise that we OPALCO ratepayers forked over nearly $400,000 in compensation two years ago to Foster Hildreth, our general manager.
What we’re paying him today isn’t known because OPALCO doesn’t say. The only time it becomes public is when an IRS form it must file as a tax-exempt organization is released, and the most recent one is more than a year old.
What makes Foster’s pay so shocking is that it exceeds what the head of Seattle City Light - the highest paid Seattle city employee - is paid. Her pay is $340,000, this year, and she heads the 10th largest public utility in the country with nearly a half-million customers, several dams and almost 2,000 employees.
If Foster’s pay has increased since 2017 at the same rate it had his first two years, he’s being paid more than $440,000 this year while running an electric coop with about 13,000 customers and 50 employees.
If OPALCO were showing strong financials - especially holding our electricity rates in line with the costs to OPALCO of the electricity, and having increases in debt at least follow management’s forecasts - the board could point to something to justify Foster’s excessive pay. But neither is the case.
Rates have risen more than 21% from 2015, when Foster took over, to now, much more than what OPALCO has paid BPA for that electricity.The average monthly OPALCO bill during his tenure rose to $152. 25 from $125.77. (This is in a county where about one-third of the population, while employed, are barely eking out a living.
Debt has grown even faster, nearly 25%, much of it going for additions and improvement to OPALCO’s “grid infrastructure,” mostly to support Rock Island Communications, not electric customers. OPALCO’s debt now stands at about $60 million, and the annual cost of that debt has risen about 60% since Foster took charge, to almost $1.8 million. (The debt is forecast to grow to $67 million, at an annual cost of $2.2 million, in 2023.)
And speaking of Rock Island, OPALCO’s wholly owned subsidiary, the picture is no better. It continues to lag well behind its forecasts, piling up big chucks of debt along the way, debt that is guaranteed by OPALCO ratepayers. That debt started with a $7.5 million loan from OPALCO and this year is expected to hit $25 million. In 2017, it said it would be able to pay for its own operations by the end of this year. This year it predicts it will be able to do so in 2021.
In the meantime, OPALCO, by guaranteeing its loans, is picking up the tab. By 2023, OPALCO’s consolidated debt (including Rock Island) is expected to exceed $90 million.
All of this - including Foster’s excessive pay - can be traced to a go-along board that trusted management’s forecasts despite its annual failures to deliver them. In a well-run cooperative board, it would have led rather quickly to finding new leadership. At OPALCO, it has just led to higher pay.
The OPALCO board meets next at 8:30 a.m. June 27 at its Friday Harbor conference room. It might be a good time to start asking the board some hard questions.
(Alex MacLeod is a longtime OPALCO member who lives on Shaw Island.)