Quarterly Report: 2010, April - June (Q4), Adak

Community:
Adak 
Staff:
Brice Eningowuk  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Adak 
Population:
136  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/17/2010 
Community Sanitation Overview:
The City of Adak operates and manages a piped water and sewer system. The city council is the policy making body for the utility. The surface water is derived from Lake Bonnie Rose, which is located approximately three miles southwest of the core town site. The water utility is operated as a Class A public water system and operates under filtration avoidance (Public Water System Identification Number 260595); therefore, the only treatment provided is chlorination with required detention for disinfection. Water is treated, stored in two 450,000-gallon tanks, and piped to facilities and housing units. If needed, two 500,000-gallon storage tanks provide additional water storage. The wastewater treatment system discharges through a marine outfall line to Kuluk Bay. One-hundred percent of homes have complete plumbing. The City collects and deposits refuse at a municipal landfill, Roberts Landfill, which is a permitted Class Three landfill with balefill. The City also provides road maintenance, airport maintenance, and a small boat harbor facility. Bulk fuel is provided by the Aleut Corporation, which maintains nine underground tanks with a total capacity of approximately 18,000,000 gallons of marine diesel, gasoline, and jet fuel. Cable television is provided by Adak Eagle Enterprises; electricity is provided by TDX Adak Generating, LLC. A feasibility study to provide recommendations for water and wastewater utility downsizing, upgrading, and future utility project planning for the City of Adak is underway with the Alaska Department of Environmental Conservation: Village Safe Water. As of April 2010 the feasibility study is 95% complete. The study is contracted to the Bristol Environmental and Engineering Services Corporation, which is located in Anchorage. Although the water treatment plant is operating and provides adequate potable water, the City of Adak is attempting to address numerous water and wastewater utility concerns including aging infrastructure, chronic leakage, and maintaining a water/wastewater utility designed a large user/customer base as the military installation has been closed and the population has dropped dramatically. The City of Adak uses the fiscal year that starts on July 1. 
RUBA Status & Activities This Qtr:
On June 18, 2010 the Adak City Manager met with RUBA staff in Bethel provided documentation to confirm that six previously deficient essential indicators are now being met. The FY11 Budget was received on June 25, 2010 and the general fund and garbage budgets are balanced or have excess funds. The utility budget has a deficit, but there is a plan to address the deficit by increasing the customer fees and shutting down of a few lift stations. The city council has requested council training. The clerk attended a QuickBooks course in Anchorage from May 17-21, 2010. Information regarding the QuickBooks contractor hotline was also provided to Adak to avail them of technical support. The City Manager submitted his resignation on June 29, 2010. The manager will continue to provide assistance with grants and funding opportunities until the city fills the position. RUBA staff was scheduled to travel to Adak on July 18-22, 2010; travel was then canceled at the request of the Mayor. Plans to reschedule are in effect. 
RUBA Activities for the Coming Qtr:
Maintain contact with the City of Adak and provide assistance as requested. Travel to community to provide council training has been requested, also a RUBA assessment is needed. At the request of the Mayor, travel was canceled and will be rescheduled.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
14 of 27
Total Score:
36 of 54

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No 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.
No 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.
No YTD revenues are at a level equal to or above those budgeted.
No YTD expenditures are at a level equal to or below those budgeted.
No A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
On June 25, 2010 the FY11 City of Adak general fund, garbage and water and sewer budgets were received. General Fund: Total Revenue and Total Expenses are projected to be $1,200,104.00, making for a balanced General Fund Budget. Garbage: Total Revenue projected to be $24,000.00 and Total Expenses projected to be $22,928.00. With an excess of $1,072.00. Water and Sewer: Total Revenue projected to be $60,000.00 and Total Expenses projected as $113,828.00. With a Water and Sewer Deficit of $53,828; the plan to reduce this deficit is to meter all working lift stations, discontinue power to unused lift stations, increase water/sewer fees to customers, Village Safewater plan, Employee fringe and vehicle fuel to be charged to general funds. (VSW Plan: Adak Water and Sewer Improvements. VSW Sponsered, and contracted to Bristol Environmental and Engineering Services Corporation) Budget non-code ordinance procedures: introduced on June 7, 2010; second reading on June 16, 2010; final reading and adoption on June 23, 2010. The City operates on the fiscal year that begins on July 1, 2010.

Accounting Systems

Essential Indicators
Answer Question
No 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
City of Adak has adopted a billing and collection policy, including provisions for disconnection of service for nonpayment. A substantial amount of customer debt overdue for greater than 90 days has been a problem and is largely responsible for the city's current overdue accounts payable balance. Management of the electric utility was taken over by TDX Power effective December 1, 2008. Now that the city no longer operates the electric utility, it is unclear whether the old electric utility debt will be collected; however, a resolution authorizing filing of small claims actions for accounts with past due amounts of $7,500 or less was adopted by the council in January, 2009. In addition, the city recently filed a law suit against the facility owner, The Aleut Corporation, to collect over $500,000 in past due utility charges for Adak Seafoods. The Aleut Corporation was removed from exempt status and the City of Adak has begun to collect taxes on fuel transfers and sales within the city limits. The Aleut Corporation has offset the fuel loan that the city has to help pay off the tax lien. It is unclear how much is remaining on the tax lien.

Tax Problems

Essential Indicators
Answer Question
Yes The utility has a system to accurately calculate, track, and report payroll tax liabilities.
Yes The utility is current on filing tax reports.
Yes The utility is current on making tax deposits.
Yes 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
The City of Adak outsources their payroll with a company based out of state. The city filed a Form 940 for the tax period of December 31, 2008 and received a letter from the IRS that states that the city is not required to file Form 940, as the city is a local government and exempt from filing a 940. This is in response to a non compliance that has been resolved. Taxpayer Advocate Service fax indicates that the City of Adak is compliant with Federal Employment and/or excise tax filing requirements, Federal Tax Deposit requirements and has no notice of a tax lien.

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.
No 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.
No 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
Worker's compensation insurance is verified with a call to AMLJIA on July 6, 2010 and is valid through July 1, 2011. A copy of Chapter 5.01 Personnel Regulations is on file and city staff report that day to day personnel matters generally follow the policy, but it is not followed all the time. For example, performance evaluations are to be performed for each regular employee at least every 12 months, (5.01.50, (1)) however, staff reports that evaluations are not conducted. The policy gives no direction regarding the evaluation being tied to the job description, nor is there an evaluation form provided. Job descriptions and a hiring policy are not included in the personnel regulations; however, job descriptions are maintained electronically on the clerk's computer. There is a probation period for new hires, but the policy does not require an evaluation at the end of the probation period.

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 clerk has gone through the RUBA sponsored QuickBooks Training in Anchorage May 17-21, 2010. The City of Adak has one operator that is certified in Water Distribution and Water Treatment until 12/31/2012 and another is certified in Water Distribution until 12/31/2011. The city council is active and regular meetings are planned for the first and third Wednesday of each month. Workshop sessions are often held before meetings. Bookkeeping responsibilities have been contracted to an accountant located in Anchorage. The City of Adak has a Public Works Director that has been working on site or in the water utility industry for over 25 years and no major incidents are known to the RUBA staff as of August 4, 2010

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
No 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.
No 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.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
City staff reported that there are maintenance plans and check lists for different components of the water and sewer systems. These plans are kept at the water treatment building and were not available for review. Safety meetings are held occasionally and follow a written safety guide to focus on different safety issues. Attendance is documented with a sign-in sheet. Lists for inventory and critical spare parts are not used; however, this is due to the excess spare parts left by the Navy. An attempt was made to have critical spare parts on hand. The City of Adak (listed as Adak Corporation, but states City Council in the General Status Comments) appears on the April 2010 SNC list for Surface Water Treatment Rule (STRW). System was sent a letter to install filtration by September 2008. VSW is proposing filtration plant to the City Council. If accepted design process will begin.