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OID Board Taps New Audit Firm

POSTED August 7, 2012 2:57 p.m.

Action at the Aug. 7 regular meeting saw the Oakdale Irrigation District Board of Directors choose a new audit firm, the Kemper CPA Group, for the years 2012, 2013, and 2014 in a 4-0 vote. Director Al Bairos was absent. The three-year contract bid was for $78,750.

OID has used the audit firm Richardson and Company for the past five years and while the directors were pleased with the firm’s performance, directors Frank Clark and Jack Alpers commented that they were concerned about keeping a firm on too long because of a comfort zone that develops between the auditors and staff. Richardson and Company’s bid came in at $83,700.

Director Herman Doornenbal stated that he felt that “if it isn’t broke, don’t fix it,” but also noted that the Kemper group had a lower bid for the contract.

OID Chief Financial Officer Kathy Cook reported that the district was able to collect references on three of the four firms that submitted qualified bids for the contract out of 18 CPA firms that were invited to submit proposals. She said that Kemper, which has Modesto offices, had excellent references and water district experience, but no power experience. Director Steve Webb stated he liked Kemper but had concerns about the firm’s lack of power experience. It was noted by OID staff that Richardson and Company still had two years left on their contract with Tri-Dam, of which OID is a 50/50 owner.

In other business, the board also decided to appoint an ad hoc committee to negotiate renewal of General Manager Steve Knell’s contract. Knell’s existing employment contract will automatically renew if no action is taken 90 days prior to its signature date of Dec. 11. Notification of no contract renewal must be issued by Sept. 11.

In discussion items, the board reviewed the draft policy on irrigation and drainage infrastructure installation. A portion of the previous policy was deleted relating to “private irrigation crossing district facility” as something to be completed by OID. It was clarified that OID would be in charge of installations except for the pipeline crossings and then it was stated that this item would be moved to the action calendar for a future meeting.

Also in discussion, Knell reported that Standard & Poors conducted a credit review report of OID. The district maintains its AA rating and is considered “stable” by S&P. Knell said that S&P noted that there is uncertainty in the power markets and he also said that the reviewers know the water business and asked good questions.

In further discussions, there was talk about the 2013 budget.

“We see a very cautious budget going forward,” Knell said, adding that he doesn’t see any big improvements coming to the economy and also that it’s tough for sellers in the wholesale market for power.

Knell said that OID has been good at maintaining around $50 million in reserves for a “rainy day” and that now the rainy day is here because of a lack of water transfers (sales) and less revenue from Tri-Dam.

Director Alpers commented that he feels it’s time to “tighten the purse strings” in the budget this year. Director Clark said OID needs to continue to look for new streams of revenue and used the examples of water transfers or raising water rates.

The next regular meeting of the OID Board of Directors will be at 9 a.m. on Tuesday, Aug. 21 in the OID boardroom, 1205 East F. The next joint board meeting for the Tri-Dam Project is at 9 a.m. on Thursday, Aug. 16, also in the OID boardroom.

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