Quarterly Report: 2012, January - March (Q3), Hooper Bay

Community:
Hooper Bay 
Staff:
Fred Broerman  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Hooper Bay 
Population:
1149  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/1/2012 
Community Sanitation Overview:
According to Census 2010 the City of Hooper Bay has a population of 1,149. The community's clinic, clinic housing, school, Head Start building, teacher housing and 19 apartment units were the first to be connected to the community's new water treatment/washeteria facility completed in 2007. Twenty-one more homes were connected to piped water and sewer in April of 2011. Residents living in the remaining 160 dwellings haul water from watering points for cooking, cleaning and washing needs. Residents also self-haul their garbage and honey buckets to a solid waste site and wastewater lagoon respectively. The new water treatment/washeteria facility also provides 18 washers, 12 dryers, 16 showers and two saunas that residents can use for a nominal charge. The watering point at the old town site is also connected to the new water treatment plant. The city is pursuing a solid waste management grant to build a new sewage lagoon. 
RUBA Status & Activities This Qtr:
The city's assistant administrator attended a RUBA sponsored QuickBooks training in Anchorage from February 13-17, 2012. On March 23, 2012 Bethel regional office staff, at the invitation of CE2 Engineers and Village Safe Water (VSW), attended a meeting concerning RUBA compliance and Significant Non-Complier (SNC) list issues potentially holding up a USDA-Rural Development grant for the City of Hooper Bay. The grant is needed so residents can be connected to piped water and waste water services during the 2012 construction season. The city has not consistently provided the Bethel regional office with detailed monthly financial reports that break down revenues and expenditures by department and include columns for FY budgeted, current month, year to date and balance amounts. And the city's most recent accounts receivable aging report shows the city carrying significant overdue balances for their piped water and waste water customers. Bethel RUBA staff highlighted these issues during the meeting. A RUBA Assessment was completed for the City of Hooper Bay on October 6, 2011, at which time the city was compliant with RUBA essential indicators. However, the city fell out of compliance during the last quarter of 2011. A similar pattern of compliance occurred in 2010. The October 2011 assessment recommended that revenues and expenses for their water treatment plant and adjoining washeteria be separated out in their annual budget and monthly financial reports to council. There is $7.2 million in USDA Rural Development (RD) funds available to the community along with $1.9 million in EPA Capital Improvement Project (CIP) funds. These funds will be used to connect service lines to the Airport Road Subdivision (34 homes) and Tomaganuk Subdivision (36 homes).  
RUBA Activities for the Coming Qtr:
Bethel staff is willing to work with Hooper Bay's administrative staff to help the city with non compliant RUBA indicators.
Scores:
 
Essential Indicators:
21 of 26
Sustainable Indicators:
12 of 26
Total Score:
33 of 52

Finances

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.
No Monthly financial reports are prepared and submitted to the policy making board.
Yes 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
No 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.
Yes A monthly manager's report is prepared.
N/A Budget amendments are completed and adopted as necessary.
Finances Comments
A FY 2012 budget and ordinance adopted on July 28, 2011, is electronically filed at the Bethel regional office. The last set of meeting minutes the city provided were from their November 11, 2011 council meeting. Monthly financial reports have not been provided for the last quarter of 2011 or the first quarter of 2012. Monthly financial reports should include 'Budgeted', 'Current Month', 'Year to Date', and 'Remaining Balance' columns for each department, grant and project's expenditures and revenues. The city budget appears to be realistic and balanced. However, it's recommended that revenues and expenses for the water treatment plant and washeteria be separated so council members will be able to monitor the financial status of each independently. These changes should also be reflected in the monthly financial reports to council. Without separating the finances of the water and sewer and washeteria enterprises, it will be impossible to determine if rates charged to customers on piped water are adequate to cover the operating costs of the newly built water and sewer facility. In the Yukon-Kuskokwim Delta, washeteria facilities typically operate in the red. However, this should not be the case with a water and sewer utility where realistic rate schedules have been calculated. A March 13, 2012 correspondence from Alaska Village Electric Cooperative (AVEC) indicated the city is current on paying its electric accounts. Email correspondences with the city administrator on April 4, 2012 indicated that the city has enough heating fuel and cash resources to cover heating needs until 2012 barge deliveries. Page fifteen of the city's Water and Sewer System Business Plan Update states that 'the total amount that should be set aside annually for major equipment Repair and Replacement (R and R) is $43,733'. However, an R and R line item was not included in the city's FY 2012 water and sewer budget.

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.
Yes Monthly bank reconciliations have been completed for all utility accounts.
No 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
Hooper Bay Water and Sewer Ordinance #09-06 adopted October 12, 2009 is on file at the Bethel regional office. Sections 12-17 of the ordinance set parameters and outlines the city's collection policy. In May of 2011, the city started billing the first forty residential customers connected to piped water and sewer services. These customers included nineteen residents in an AVEC housing apartment complex (connected in the fall of 2011) and twenty-one homes (connected by April 21, 2011). The city charges a flat rate of $85.00 monthly to residential customers on the city's piped water and sewer system. On February 8, 2012 an accounts receivable aging report dated January 31, 2012 was faxed to the Bethel regional office. The report showed eleven of the city's twenty-one residential customers with balances in excess of $200.00 and significant past due amounts owed on three commercial accounts. The accounts receivable report indicates the city is not enforcing its collection policy. The city uses QuickBooks Pro 10 for its financial accounting, tracking wages and payroll taxes. Water and wastewater billings are sent out the twentieth of each month. The city's long time bookkeeper faithfully reconciles the city's bank statements each month. Copies of the city's First National Bank of Alaska statements and accompanying QuickBooks reconciliations from State Revenue Sharing, Bingo, Water and Sewer Fund and Washeteria Earnings Fund accounts for July 31, 2011 were provided and are electronically filed at the Bethel regional office. A chart of accounts from QuickBooks was provided on September 13, 2011 is also on file.

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.
Yes The utility is current on making tax deposits.
N/A 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 utility uses QuickBooks Pro 10 for its payroll accounting. A March 22, 2012 correspondence from the IRS showed the city not having filed W-2s for 2008. Therefore, RUBA essential indicator 'The utility is current on filing tax reports' is marked 'No' until notice from IRS is received that the matter is resolved. A March 21, 2012 email correspondence from Alaska Department of Labor in Anchorage indicated the city is current on their filings and deposits for Employment Security Taxes through December 31, 2011. The city is not listed on the January-February 2012 LIEN WATCH: A Review of Small Community Liens.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
No 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
A March 29, 2012 query of the State of Alaska Employers' Workers' Compensation Insurance Coverage Verification database indicated that city has workers' compensation insurance for its employees with Alaska Public Entity Insurance. An adopted personnel policy was not provided by the time of this writing. On October 12, 2011 position descriptions and/or job announcements were provided for the bookkeepers, city clerk, city administrator, substitute city clerk and their water treatment operator and are on file at the Bethel regional office. On July 19, 2011 several of the city's personnel files were reviewed. None of the files reviewed had all three documents (federal I-9 form, job application and letter of acceptance) required for compliance of this indicator. The city's lead water treatment operator is adequately trained and opportunities for training are provided for administrative and utility 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.
No 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
Yes 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
Section 5 of the city's Water and Sewer Ordinance #09-06 adopted October 12, 2009 states: 'The Hooper Bay Water and Sewer Utility has been created by ordinance and charged with the operation of the City's water and sewer infrastructure as an enterprise of the City'. On July 19, 2011 city council approved the city's Water and Sewer System Business Plan Update which indicates city council (the policy making body) is active in the policy making of the utility. On February 8, 2012 an accounts receivable aging report dated January 31, 2012 was faxed to the Bethel regional office. The report showed eleven of the citys twenty-one residential customers with balances in excess of $200.00 and significant past due amounts owed on three commercial accounts. The accounts receivable report indicates the city is not enforcing its collection policy. The city administrator has many years of local government experience. He worked for the city on several occasions in the 1970s and 1980s and has held leadership positions for Hooper Bay's Traditional Council. He was hired as administrator on June 7, 2010 and has handled the duties of the position well. The city's bookkeeper has held her current position for 21 years and is skilled in QuickBooks operations and summarizing city financial data in Excel spreadsheets. The city has a Class 2 Water Distribution System and the city's lead water treatment operator is certified to the level required to operate the plant. His Water Treatment 2 certificate expires on December 31, 2014 and his Water Distribution 2 certificate expires on December 31, 2013. However, according to an April 3, 2012 query of the Alaska Certified Water/Wastewater Operator Database the city's assistant operator is not certified. Page six of the city's Water and Sewer System Business Plan Update approved by council on July 19, 2011, contains an organizational chart that reflects the city's current structure. City council meets at least monthly pursuant to Alaska Statutes Title 29 and public notification of meetings and the manner in which they are conducted are in accordance with Alaska's Open Meeting Act.

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.
No 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.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The city has a Class 2 Water Distribution System and the city's lead water treatment operator is certified to the level required to operate the plant. His Water Treatment 2 certificate expires on December 31, 2014 and Water Distribution 2 certificate expires on December 31, 2013. However, according to an April 3, 2012 query of the Alaska Certified Water/Wastewater Operator Database the city's assistant operator is not certified. A review of council meeting minutes from September 9, October 25, and November 11, 2011 did not reflect an operation and maintenance report from the utility operator. Documentation that safety meetings are held was not provided. The utility has not suffered any major problems or outages due to management issues that are still unresolved. Although not all Hooper Bay residents have been connected to the city's water and sewer facilities, the utility is in good working order and operating at a level of service proposed. A copy of city's Water Treatment Plant and Washeteria Preventive Maintenance Plan is on file at the Bethel Regional office. The preventive maintenance plan will be included in the soon to be adopted OM Manual along with a Health and Safety Plan, Inventory Control List and a Critical Spare Parts List. A copy of the city's 2010 Consumer Confidence Report (CCR) is electronically filed at the Bethel RUBA office along with a certification form signed by the water operator on May 27, 2011 indicating the CCR was distributed and posted in the community. The city is on the January 2012 Significant Non-Complier (SNC) list.