Oskaloosa Water Board Discusses Reserve Cash Policy

Oskaloosa, Iowa – The Oskaloosa Water Board of Trustees met Monday at 4pm in the afternoon at the Water Department Office, located at 1208 South 7th St. in Oskaloosa. The three member board tackled several different points of discussion, beginning with cash reserve requirements for the department.

A recent document that was part of the PFM study outlines a recommendation for the department to have a one-million-dollar cash reserve to cover costs for the utility in the event of a unforeseen major project or repair or shortfalls in budget revenue.

Board Chair Joe Ryan said that the discussion about how much to hold in a reserve has been part of the discussion for several years, but no policy outlining a specific number has ever been put in place. “Typically reserves are there like an insurance policy,” Ryan said in the meeting.

“There has never been anything formally adopted,” Chad Coon, General Manager of the Oskaloosa Water Department, said in regards to a reserve amount. Coon thinks he remembers a target amount of $565,000.00 being a number discussed before, when he first started with the department.

Coon said that during audits of the department’s finances, it’s often recommended that a policy be in place regulating reserve amounts.

Ryan expressed some concerns with achieving a million-dollar cash reserve, with revenues to the department projected to continue to decline. In order for the department to reach a million dollars in reserve, a rate increase would be needed to achieve that goal.

Ryan said that a policy needs to be “on the books” to help the department be more accountable to audit reports, as well as know what it will have in reserve if need be.

“Is there a generally accepted accounting principle,” asked Trustee Michael Vore.

Ryan said that a million dollars “might be too high” but said an amount near $800,00.00 might be something the board could look at.

The board made no decision on the policy, but will discuss it more in the near future.

The board of trustees also heard from Coon in regards to hiring a Distribution Position to help fill a need at the water production facility north of Oskaloosa. With a recent sharing agreement between the City of Oskaloosa and the Oskaloosa Water Department, personnel from the Water Department have been utilized at the city’s Waste Water Treatment facility.

Two other technician level positions are being filled currently, with the board holding off on any further hires until the 28E agreement between the city and water department is in place.

That 28E agreement will further define the cost sharing measures being implemented between the two entities. The draft 28E agreement was discussed, and changes from the trustees were to be passed along to legal representation for further refinement.

Also discussed was potentially changing the size of the board of trustees from its current 3 positions to 5 positions. The move to 5 would allow 2 board members to discuss, but not decide, a point of discussion away from an official meeting, without those members being in violation of the open meetings laws.

Board members thought the move to 5 was premature, saying they would once again evaluate the situation after implementation of the share services agreement between the city and the water department was in place.

In other action:

• Approved Invoices and Financial Statements