Lois Henry dedicated a significant amount of space in the Sept. 30 edition of The Californian to write about the wasteful lawsuit that was filed by Oildale Mutual Water Co. against the North of the River Municipal Water District ("Oildale water brawl heats up as the election nears"). Unfortunately, in water, nothing is simple and she missed some key pieces of information and facts that the readers of The Californian should be aware of.
Since my appointment to the North of the River Municipal Water District as general manager in 2010, I can testify to the countless hours and the thousands of dollars that have been wasted on this lawsuit. These dollars have all been spent defending the district against Oildale Mutual's claims that not only are not based on facts, but its actions violate our operating agreement.
The basis for much of Oildale Mutual's lawsuit stems from an "audit" of the billings; yet when pressed under oath, Oildale Mutual's accountant revealed he didn't actually conduct an audit. Instead, he admittedly reviewed the billing under an "alternative billing method" developed by Oildale Mutual. If the company's accountant didn't apply the billing under the terms of the contract as agreed to by Oildale Mutual and the district in 2005, then what process did he use and why?
To our district's board of directors, the majority of whom are ratepayers of Oildale Mutual, this was a critical revelation. The basis for Oildale Mutual's whole lawsuit hinges on the allegations of overcharging from the now discredited "audit." So why doesn't the company just sit down with our district now and work this out? Not only has the district's board passed a resolution asking for it to do so, but recently Kern Citizens for Sustainable Government offered to facilitate a meeting between the two entities. Our district replied yes, we will attend that meeting, but to our knowledge Oildale Mutual has yet to respond.
So if the audit wasn't an audit, and Oildale Mutual doesn't want to sit down, why is it continuing to claim that its recent rate increase on Oildale residents was due to the district's overcharging? In fact, its general manager, Doug Nunneley, admitted under oath that the company's rate increase was planned prior to the lawsuit because of a planned water treatment expansion project with the Kern County Water Agency. So what really is Oildale Mutual's motivation for the lawsuit?
Its motivation is clear. In a recent letter to the district, Oildale Mutual revealed that it wants to take over the district's retail service area. Why would a water company that has posted a loss of $800,000 need more retail area? Simple answer: additional revenue. The district just replaced the infrastructure in its retail service area with grant money from the state at no cost to the taxpayers. The company knows this, and if it can get a district board to give over the district retail area, it can spread its costs for infrastructure improvements onto these new retail customers, and improve its bottom line.
Adding insult to injury, Oildale Mutual has spent thousands of dollars promoting three candidates for office in an attempt to take over the district's board of directors. Why is this a big deal? Well, the company has received more than $2 million in property tax revenue from the residents of Oildale since 2006. Oildale residents, most importantly Oildale Mutual ratepayers, should ask themselves, "Why is our money being used to finance political campaigns?" A water company that posts a loss of $800,000 should be spending precious resources improving water delivery to its customers, not political campaigns.
As the district's board takes all of this in, we look back to the 2005 agreement we entered into with Oildale Mutual. The agreement states neither the district nor Oildale Mutual will "intrude upon the business or affairs of the other." With this in mind, Oildale Mutual's attempt to take over the district's board is an obvious breach of contract.
As general manager of the North of the River Municipal Water District, I invite all candidates and residents to sit down and review our spending practices over the past few years and see for yourselves that we are transparent and fiscally sound. Feel free to contact me with any questions at 393-5411 or on the Web at www.normwd.org.
David Aranda serves as general manager of the North of the River Municipal Water District. Prior to that, he served as general manager of the Stallion Springs Community Service District. Another View presents a critical response to a previous editorial, column or news story.