City Is Set to Pay $44,920 for Utilities Audit

For $44,920, Ralph Andersen & Associates will take a close look at the finances and operations of the

The Rocklin-based firm was picked in a 6-1 vote by the city's finance ad-hoc committee on Friday. The City Council will need to make the selection offical.

John Goss, a former city manager, and William Thomas, a CPA and former finance manager for California municipalities, promised the ad-hoc committee that by the end of their audit, they would provide it with information that will allow it to create "a long-term financial plan to ensure the sustainability of your sewer and water enterprise funds."

It reduced its hourly rate to meet the city's budget of $45,000, giving it an edge over Laguna Niguel-based Bucknam and Associates, which had offered to do the audit for $78,000.

"We put out a [request for bids] with a budget figure; they made it fit," said , who along with serves on the ad-hoc committee. 

Ralph Andersen & Associates has "the accounting background and certified fraud examiners on board," he added.

The audit comes after city staffers reported there was an $8.2-million cash deficit in its water budget,

It is also in response to residents' criticism of the council for their high water bills and the . The city took over operation of the plant in 2008 with the intention of reducing its reliance on imported water.

The utilities department runs the city’s drinking, ground, waste and recycled water programs, as well as its sewer operations.

Although the city has commissioned yearly audits of its utilities department since 2005, the ad-hoc committee—formed in March at the request of —is concerned that even after a study in 2009 suggested the City Council raise water rates, which it did, that there's a deficit.

Ralph Andersen & Associates will, among other things:

• Review and analyze the current water billing operation and provide a flow chart that details the flow of water/sewer resources from the initial billing, receiving, processing, depositing and subsequent booking of the funds.
• Review and analyze the 2009 rate study to determine if the conclusions were accurate.
• Review and evaluate how the department's major assets have depreciated since the city took over operation of the Groundwater Recovery Plant.
• Review and evaluate all bond issues—either assumed by the city or which have been subsequently issued by the city.
• Review the qualifications of the finance staff and assess the appropriateness of the division of staff time allocated between the utilities and general city operations.

The ad-hoc committee is asking the audit be finished by December.