Quarterly Report: 2009, October - December (Q2), Galena

Jeremy Johnson  
DCRA Regional Office:
Gov't Type:
First Class City 
Agreement Date:
City of Galena 
Assessment Status:
Assessment Date:
Exp Date:
Last Updated:
Community Sanitation Overview:
Water is derived from wells and is treated. Twenty-eight residences and the school are connected to a piped water and sewer system. There are 110 households that use a flush/haul system, 20 households use honeybuckets, and others have individual septic tanks. Construction of a water treatment system and storage tank are underway. An additional 70 homes are being added to the piped water system. Refuse collection and landfill service are provided by the City. The City began operating the landfill, located on the former Campion AFS grounds, in 1997. Improvements are complete. There is a 200,000 gallon reservoir and a community leach field.  
RUBA Status & Activities This Qtr:
For the fourth quarter 2008 activity with the community has consisted of communication with the city clerk, primarily to review and suggest modification to the meeting minutes. The city was on a boil water notice for a week due to an algae build up on the top of the water tank. No other issues with water/wastewater were expressed to RUBA. The 3rd quarter Alaska Department of Labor reports have not been filed. 
RUBA Activities for the Coming Qtr:
RUBA staff will monitor and assist as needed by phone, email, and in-person contact as requested.
Essential Indicators:
23 of 27
Sustainable Indicators:
23 of 27
Total Score:
46 of 54


Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
Yes The utility has adopted a balanced realistic budget.
Yes Monthly financial reports are prepared and submitted to the policy making board.
No The utility is current in paying all water/wastewater electric bills.
Yes The utility has on hand a year's adequate fuel supply or it has a financial plan to purchase an adequate supply.
Yes The utility is receiving revenues (user fees or other sources) sufficient to cover operating expenses.
Sustainable Indicators
Answer Question
Yes The utility is receiving revenues (user fees or other sources sufficient to cover operating expenses and Repair & Replacement (R) costs.
Yes YTD revenues are at a level equal to or above those budgeted.
Yes YTD expenditures are at a level equal to or below those budgeted.
Yes A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
RUBA has financial reports as current as December 17th. It was noted from the city manager that cash flow is an issue but that the city is doing OK overall. Previously: RUBA staff visited Galena at the end of July 2008. A copy of the FY 09 budget was reviewed; all revenue and expenses are listed in the utility budget, it is balanced and the public works utility portion of the budget is subsidized with a $155,700 transfer from the general fund. Public works includes hauled and piped water, solid waste (trash), sewer haul, and city equipment rental. The electric utility portion of the budget is also balanced based upon $406,508 income from one of three options: electricity rate increase, general fund transfer, or using fuel from the closed Air Force base that the City is assuming ownership of on October 1, 2008. While user fees for either utility are not adequate to cover expenses, there are sufficient sources of revenue and options to subsidize the utilities. The City has bulk fuel tanks and Crowley maintains a distribution center in town. There is adequate fuel to heat the city buildings and for generating electricity. City buildings have boilers but they are used only at times of peak demand (coldest portions of winter) because the heat generated from the electric plant is piped to the surrounding buildings. The water plant operator provides daily verbal reports to the city manager and the city manager is directly in charge of the electric plant and communicates daily with the staff. The city manager provides detailed reports to the city council at the regular meetings; these reports (approximately four pages) are incorporated into the council meeting minutes.

Accounting Systems

Essential Indicators
Answer Question
Yes The utility has adopted a collection policy and actively follows it.
Yes The utility bills customers on a regular basis.
Yes An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
Yes An accounts payable system is in place.
Yes The payroll system correctly calculates payroll and keeps records.
Yes A cash receipt system is in place that records incoming money and how it was spent.
Yes The utility has a cash disbursement system that records how money was spent.
Sustainable Indicators
Answer Question
Yes A chart of accounts is used that identifies categories in a reasonable, usable manner.
No Monthly bank reconciliations have been completed for all utility accounts.
Yes The utility has a purchasing system that requires approval prior to purchase, and the approval process compares proposed purchases to budgeted amounts.
Accounting Systems Comments
The City of Galena uses QuickBooks Enterprise Solutions for all of its financial and accounting needs. The accounting staff consists of three staff persons, an A/R clerk, A/P clerk, and a finance director. A collection policy is in city ordinance and states that all city services will be discontinued until payment is made. This appears to be very effective, as the collection rate is quite high. There are a number of customers with a very nominal balance owed ($1-$40) that appear to pay every other month. The collection rate is 84%, but if customers with balances less than $50 are excluded, (doing so would provide a more accurate picture because customers with small balances owed do pay as opposed to those with recurring delinquent accounts) then the collection rate is averaged at 95%. According to the Accounts Payable Aging Summary report for FY 08 the City has some large outstanding bills. For the periods: 1-30 days $38,000; 31-60 days $107,000; 61-90 days $3,000: and greater than 90 days $395,000 (amounts are all rounded). If any general statement were to be made based on the report, it would be that the total amounts owed are to only a few entities and that the City is not delinquent to a great number of suppliers. It should be noted that RUBA staff has limited access to financial reports and cannot make any conclusions other than those based on the reports provided. Galena uses QuickBooks Enterprise Solutions, which is not compatible with QuickBooks Pro, so further research is not possible. As is standard with all QuickBooks products, an adequate system is in place for tracking, recording, and reporting transactions. A wire bound receipt book is used for all customer payments and the receipt is given to the customer while they are in the office. The receipt book is used to enter payments against the customer balance into QuickBooks; this is a daily occurrence. Day-to-day purchase requests go though a chain of command up to the city manager and finance director who has control of city credit cards. RUBA staff does not know if every purchase is compared to the budget prior to approval. For large purchases, approval of the city council is required and council revenue tracking is done with monthly financial reports. At the time of the RUBA assessment, the main bank account was last reconciled on April 30, 2008; city staff told RUBA staff that the contracted CPA will be making monthly visits and reconciliation will be one of his duties. This report will be updated when documentation of this task being completed is received.

Tax Problems

Essential Indicators
Answer Question
Yes The utility has a system to accurately calculate, track, and report payroll tax liabilities.
No The utility is current on filing tax reports.
No The utility is current on making tax deposits.
No If there are any past due tax liabilities or recorded tax liens, a lien release has been issued or a repayment agreement has been signed and repayments are current.
Tax Problems Comments
Both the IRS and Department of Labor deem Galena to be out of compliance.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
Yes The utility has adopted and uses a Personnel Policy, which has been reviewed by an attorney, AML or Commerce for topics and language.
Yes The utility has adequate written job descriptions for all positions.
Yes The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation.
No The utility has an adequate written hiring process.
Yes The utility has personnel folders on every employee that contain at least: I-9, Job Application and Letter of Acceptance.
Yes The utility has a probationary period for new hires that includes orientation, job training/oversight, and evaluations.
Yes The utility provides training opportunities to staff as needed and available.
Personnel System Comments
Workers compensation insurance is through Alaska Municipal League-Joint Insurance Association and is in effect until July 2009. The personnel policy and procedure manual is comprehensive; a copy is provided to each new hire with a signature page that acknowledges receipt which is filed in their personnel folder. RUBA staff has copies of job descriptions for city positions and the annual evaluations are based on the position description. RUBA staff and city staff were not able to locate a specific written hiring process. The standard process is that a vacancy notice is posted in town at four locations and the notice is read on the local public radio station for ten days. Applicants fill out the application; if there is more than one applicant, a list of interview questions is created for the interviewer. RUBA staff was told that the City follows the school district format; RUBA does not have a copy or any knowledge of the school district format. Galena Personnel Policies and Procedures Title 15 (15.10.430 (A)(1)) states that there are to be two separate personnel files for each employee, one public and one confidential. Between the two files, all necessary documents are retained. Included in the confidential files are evaluations, which are done after the six-month probationary period. New hires are provided with orientation and job-training, to the extent needed for the position. For example, the recently hired city clerk was in Fairbanks for computer classes and approximately three days of intensive training with RUBA staff.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
Yes The policy making body is active in policy making of the utility.
Yes The policy making body enforces utility policy.
Yes The utility has an adequately trained manager.
Yes The utility has an adequately trained bookkeeper.
Yes The utility has an adequately trained operator or operators.
Yes The utility has adopted the necessary ordinances (or rules and regulations) necessary to give it the authority to operate.
Sustainable Indicators
Answer Question
No The utility has adopted an organizational chart that reflects the current structure.
Yes The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The City is the owner of the water and electrical plants and city employees operate the utility. A new employee is scheduled to start in the water plant after the formal Air Force Base transfer on October 1; the employee currently maintains the water system to support the base. The city council is the policy making body and the city manager directs the day-to-day management and enforcement. Galena code title 13 establishes the authority for operations. An adopted organizational chart is not used but when asked by RUBA staff, the city manager was able to draw one up by hand. To satisfy this indicator, the organizational chart would need to be approved by the city council.

Operation of Utility

Essential Indicators
Answer Question
Yes The utility operator(s) are actively working towards necessary certification.
Yes The utility has a preventative maintenance plan developed for the existing sanitation facilities.
Sustainable Indicators
Answer Question
Yes The manager receives a monthly O&M report from the utility operator and routinely "spot checks" the facilities to see that the maintenance items are being completed.
Yes The utility has a safety manual and holds safety meetings.
Yes Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
Yes The utility is operating at the level of service that was proposed.
Yes The operator provides status reports to the manager on a routine basis.
Yes The utility has completed and distributed its "Consumer Confidence Report".
No The utility is not on the "Significant Non-Complier" (SNC) list.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The current water operator has a level 2 water treatment certificate and the October 1 Base transfer employee has a water treatment level 2 and a water distribution level 1. As stated previously, the city manager makes routine visits to the plant and the water operator talks with the city manager daily. The water plant employee attends weekly safety meetings at the power plant. There has not been any major outage in the level of service and it is operating at the level proposed. RUBA staff has on hand a copy of the recent CCR and a list of inventory and spare parts. The utility is on the SNC list for stage 1 violations during the second quarter of 2008; return to compliance will occur April 2009 if no other violations happen, they were scheduled to return to compliance in December 2008.