Quarterly Report: 2008, April - June (Q4), Chefornak

Community:
Chefornak 
Staff:
Earl Gibson  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Chefornak 
Population:
450  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/31/2008 
Community Sanitation Overview:
Twelve wells and a new water treatment plant provide water for Chefornak; residents haul from various watering points. Only 6 homes have plumbing. 50 residences use honeybuckets; 24 homes use tank haul. The school well is inadequate; the water is too salty. Infrastructure improvements are underway, including a washeteria -- the community wants a piped system. Electricity is provided by Naterkaq Light Plant. 
RUBA Status & Activities This Qtr:
On May 22, 2008, RUBA staff traveled to Chefornak and met with Placid John, City Administrator, and Alexandra Anderson, City Clerk, to complete a RUBA Assessment of Management Capacity Indicators. City staff provided the documentation supporting the conclusions in this report. In many areas, City staff was unable to provide documentation to some indicators and those areas remain non-compliant. RUBA staff continues to offer assistance to the community and to assist the community. The City of Chefornak had signed a Memorandum of Agreement for the Tribal Counil to provide the water and honey bucket haul services. That ended a few months ago when the city discontinued the agreement and began providing services again. The city will need to adopt ordinances giving them the authority to do billings and collections for services provided. They are also in need of adopting a budget for the utility services. RUBA staff will continue to monitor this community and schedule a return visit to assist with these issues. Currently the awarded construction project for Chefornak is on hold until the city can prove management capacity. 
RUBA Activities for the Coming Qtr:
The City of Chefornak has not met all of the essential capacity indicators. In order to meet them, the utility must take action to correcting those essential capacity indicators that make the utility compliant, i.e. Utility Finance, Accounting System, Organizational Management, and Operation of Utility. By implementing the above recommendations, the City of Chefornak will put itself into position to be RUBA compliant. By taking each indicator and making the appropriate corrections, staff will help to avoid unnecessary write-ups and create a successful compliant program for the community. The City of Chefornak staff was open and helpful with providing information to complete this assessment. They realize the importance of community health, financial stability, effective utility management practice and sustainability. RUBA staff is available to provide assistance for any essential and sustainable capacity indicators that are not currently being met.
Scores:
 
Essential Indicators:
16 of 26
Sustainable Indicators:
14 of 27
Total Score:
30 of 53

Finances

Essential Indicators
Answer Question
No 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.
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.
Yes 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.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
All revenues and expenses for the utility are not listed in the utility budget. The administrator informed the RUBA staff that there is a water treatment plant but people must self-haul from watering points. A honey-bucket system for sewage is maintained by the city. The city does provide water to the school, CE2, and the clinic. The utility has adopted a budget, but it is not realistic in that it does not include all revenues and expenditures. The city has not adopted a budget for the utility services provided. A monthly financial statement is prepared but does not include the beginning budget, monthly expenditures, year-to-date expenditures, and the balance for each category. Their report provides a bank account number with a beginning balance and deposits, a list of expenditures and a ending balance for the account. The utility is current paying all water/wastewater electric bills through the earning of bingo. Bingo is the form of revenues (user fees or other sources) that pays for other operating expenses.

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.
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
Currently, there is no written collection policy in place. All actions are done on a verbal basis. The city bills the school, clinic and CE2 on a monthly basis. All customers pay up front for their water service with a purchase of tokens. The administrator is doing fine job with his manual system in maintaining accounts, calculating payroll, and keeping records of all transaction. With the cash receipt system, a cash exchange is done with the Native Corporation, who also sells water tokens for the city,and a customer ledger is in place for all transactions. A manual system is in place for cash disbursement. A manual customer ledger is posted on the wall with payment due dates listed for honey bucket haul. The administrator performs monthly reconciliations of all accounts. The purchasing system approval process is setup so that any purchases over $200 must be approved by the city council and any purchases less than $200 are done by the administrator. The utility keeps the financial records through manual and computer process. The utility uses an Apple computer and currently has QuickBooks 2007 version. The Chart of Accounts (COA) does identify fixed assets in a manual manner. For the billing process, the customer makes a call to find out what they owe.

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.
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
IRS and DOL deem the City of Chefornak compliant with tax issues at this time. Both employment identification numbered accounts have credits on them.

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.
Yes 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
The City has a current workers compensation policy in effect and it is posted is a visible place. The utility did have available good job descriptions for the utility positions. The utility should periodically review position description to ensure that work performed is current. The utility has not adopted or followed a written personnel evaluation process that ties the job description to the evaluation. There was available an adequate written hiring process. The utility maintains personnel folders containing I-9s, Job Application and Letter of Acceptance. The utility has a probation period for new hires, ranging from 90 to 180 days. The utility provides training opportunities to its staff on as needed and available basis. There are no written policies for day to day management of personnel. A Tribal Council checklist for daily and monthly requirements is currently being revised for the city's use. Workers Compensation policy for the city has been purchased through Alaska Municipal League Joint Insurance Association, through July 1, 2008 and Umialak Insurance for the Water/Sewer that is good through March 29, 2009.

Organizational Management

Essential Indicators
Answer Question
No The entity that owns the utility is known; the entity that will operate the utility is set.
No 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.
No The utility has an adequately trained operator or operators.
No 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
There is documentation that city is now handling and operating the utility, but a Memorandum of Agreement needs to be updated and signed. The policy making body is making decisions concerning the utility, however no written documentation or guidelines were provided. The administrator is adequately trained to run the utility and is trained in maintaining the books for the utility. The administrator is also currently training a new utility clerk to help with maintaining the utility account. The utility could not provide the adopted necessary ordinances that give the utility the authority to operate. The policy making body meets twice a month for city business and every other month with the Native Corporation and Tribal Council, costing the city $90 per council member for each meeting. The utility complies with the open meetings act of all meetings. However, the minutes of the meeting need more structure than what they have shown.

Operation of Utility

Essential Indicators
Answer Question
Yes The utility operator(s) are actively working towards necessary certification.
No 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.
No 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 utility does not have a preventative maintenance plan developed for the existing utility. Monthly Operation and Maintenance reports from the utility operator should be done, and routine spot checks of the facilities should be done by the manager to see that the maintenance items are being completed. Regular safety meetings are being done, but there is not documentation of the training. A review of the SNC list shows a CCR had been completed, but there was no copy available for review. The utility is on the current SNC list for failure to perform water sampling. There were no lists for inventory and critical spare parts. An inventory should be put in place in order to have knowledge of all parts and equipment that are available.