An open-letter to the owners of the Grand River Dam Authority (GRDA) – the citizens of Oklahoma

My name is Dan Sullivan. I am a life-long Oklahoman and the new Chief Executive Officer for GRDA. Along with my 500 Oklahoma coworkers, I want you to know I am committed to the continued improvement of our organization. With that in mind, I would like to update you on the progress that has been made at GRDA.

At the request of Governor Fallin, the Oklahoma State Auditor and Inspector’s Office conducted a performance audit of GRDA that was issued on December 8, 2011. That audit covered a period from July 1, 2002 to March 21, 2011.

I joined GRDA on December 1, 2011, a week before the audit was released. For me, the timing was great. It gave me the chance to review an in-depth study of this organization while outlining areas for improvement.

Soon after, GRDA Management outlined a game-plan to implement audit recommendations with simple goals: 1) Build on the good things the audit said we had done and; 2) Improve in areas that needed improvement.

To date, we are about 10 months into execution of that game plan and I wanted to update you on accomplishments:

1. We have made changes to our leadership team. New personnel, with extensive experience in their respective fields, have joined GRDA since December. Meanwhile, others who have been part of GRDA for several years were promoted to roles that allow us to better utilize their skills. These employees join a team that already includes nearly 80 years of combined GRDA experience in finance, marketing, communications, electric generation, engineering, and transmission maintenance.

2. We have contracted with an independent consulting firm, KPMG, to perform an efficiency audit of GRDA. Together with the findings of the state audit, we feel KPMG’s work will serve to make us an even better, more efficient operation. That is the goal.

3. We have received the findings of the State of Oklahoma Office of Personnel Management bi-annual compensation study of state agencies and learned our compensation is 8.27 percent above market. With that data in hand, we can be better prepared to recruit employees, and communicate with the workforce on salary issues. After all, securing and retaining a skilled workforce is key to future successes. The study also revealed GRDA’s turnover rate is five times lower than the state agency average. Although that is good news, we understand the industry, the economy and the workforce is always changing. We will use this study to help us support an experienced and stable Team GRDA. Related to this, the GRDA Board has established a compensation committee to give employees a board level voice on compensation issues when they feel it is necessary. This committee also monitors workforce numbers, compensation and other factors related to our most important asset, our employees.

4. Although compensation has been above market, GRDA has struggled in recent years to recruit the kind of specialized electrical engineers we need. Due to that, we outsourced several engineering projects in the past that, if done in house, would have been a fraction of the cost. However, the recent opening of our Engineering and Technology Center — in the middle of our 24-county service district in Tulsa — is helping remedy this problem. We have already hired new engineers in the facility which provides us with much-needed space and recruiting advantages for those who wish to work in the metropolitan area. We expect this new facility to save us millions of dollars in the years to come.
5. For 11 straight years, GRDA has been recognized for excellence in financial reporting for our annual reports. We are committed to seeing that tradition continue. In fact, since my first day, I have talked to employees, customers and stakeholders about efforts to take openness and transparency to all levels of our communications. GRDA has a great story to tell and I am fortunate to help tell that story.

6. GRDA makes many purchases throughout a year and competitive bidding is a key component of our purchasing procedures. Recently, our board asked the Oklahoma State Auditor and Inspector to formally examine that bidding process on a specific bid item that had been questions by someone that did not receive a contract. I am pleased to report the findings showed no areas of concern and we received a clean bill of health. This news, along with updated purchasing policies and ongoing “Certified Purchasing Officer” training, will help us continue to be compliant  in the future.

7. I recently visited with key bond stakeholders and credit rating agencies. Past GRDA management was able to guide the agency to much improved credit ratings and that is a path we will continue to follow. Our meetings went well and we look forward to implementing the suggestions that could lead to improved ratings. This is important because better credit ratings mean lower interest rates and lower costs for GRDA.

8. GRDA operates in a highly-regulated industry. Organizations like the North American Electric Reliability Corporation (NERC) and the Southwest Power Pool (SPP) have much influence over what we do with our system; how we plan, operate and even sell power. We continue to ramp up our compliance team to meet ever-changing regulations. In recent meetings with those regulators, they were complimentary of our efforts and we will continue to nurture the culture of compliance at GRDA.

9. Earlier this year, GRDA began a bottom up personnel budgeting process to include every department and member of the workforce. That process will help us better manage the workforce in the future and give employees a new sense of ownership in the day-to-day activities of GRDA. In the year ahead, we will also add operating and maintenance expenses to the process.

10. Due to the ongoing drought, GRDA had to change some of its lake management processes over the summer. However, we have worked closely with the Federal Energy Regulatory Commission (FERC), the City of Miami and other resource agencies in recent months to minimize the impact of, and communicate the need for, those changes. We are committed to continuing that level of cooperation and communication in the future.

This is a short list of the good things that have taken place over the last 10 months. Success breeds success and I have no doubt our workforce of 500 Oklahomans will continue that success. I fully expect us to emerge from the KPMG report stronger, more nimble and better prepared to serve you.

GRDA welcomes legislative oversight, reviews and feedback in any form because these things have always helped guide this agency to continued improvement. I encourage you to attend our board meetings, read our communications, visit our website, grda.com, or contact me any time with your questions.

Thank you,

Daniel S. Sullivan
GRDA CEO