Quarterly Report: 2011, April - June (Q4), Gambell

Community:
Gambell 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Gambell 
Population:
662  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/3/2011 
Community Sanitation Overview:
Water is derived from a shallow aquifer at the base of Sivuokuk Mountain, and is treated and stored in three storage tanks. One hundred twenty-one homes and 13 public and commercial buildings, including the school and washeteria, are now connected to the piped water and sewer system. Forty three homes in the original townsite still are not connected to the piped system; their residents haul water and use honeybuckets. A feasibility study is complete. A new water source and additional water storage tanks are needed to ensure no shortages will occur. Significant infrastructure growth is proposed over the next 5 years. The first phase of improvements upgraded the existing infrastructure, including water treatment, lift station upgrades, and a 2.2 million gallon water storage tank. The second phase will be to develop a well field 2 miles outside of town at the south end of Troutman Lake, and construct a summer only raw water transmission line. The third phase will be to provide water and wastewater service to Old Town (approximately 43 service connections). Ultimately, there will be 174 service connections.  
RUBA Status & Activities This Qtr:
At the request of city officials, Nome RUBA staff traveled to the City of Gambell in April and June of 2011. The first visit was to conduct an onsite RUBA assessment. The Utility Finances section of the RUBA assessment was not completed during the first visit because no financial documentation was made available. The rest of RUBA sections were examined and completed. After the first visit, Nome RUBA staff recommended the city council consider signing a RUBA assistance agreement. On May 15, 2011, the mayor signed the RUBA agreement. In June of 2011, Nome RUBA staff was invited by the city mayor to provide onsite assistance to the utility staff and city clerk. The focus of the second visit was to review the financial management of Gambell Water Treatment System, and address some of the key financial assumptions listed in an upgrade business plan. The RUBA assessment of management capacity indicators is a condition for receiving grant money provided by Village Safe Water. The funds will be used to upgrade the existing infrastructure of the water utility. During the second visit, city and utility staff worked closely with RUBA staff. Copies of financial, accounts receivable and accounts payable reports were presented as requested. The two onsite visits concluded with recommendations to the city council to implement a work plan with specific tasks and time frames based on the RUBA's written assessment of the utility's management practices. RUBA staff discussed, with the acting mayor, a tentative teleconference with the city council within the next few weeks to discuss actions to be taken within ninety days and six months or longer to remedy significant problems. The RUBA assessment was submitted to the City of Gambell for review and the current assessment will be updated after 10 days of the date of submittal. 
RUBA Activities for the Coming Qtr:
Nome RUBA staff will work with the city council to implement a work plan that would modify certain management practices that could improve the long term health and sustainability of the water utility. RUBA staff will propose actions to be taken within 90 days and six months to remedy significant problems. RUBA staff offered to be available for further visits and assistance upon request.
Scores:
 
Essential Indicators:
18 of 26
Sustainable Indicators:
20 of 27
Total Score:
38 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.
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.
No A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The Gambell Water Treatment System's 2012 Budget lists all revenues and expenditures, with the exception of fuel cost. The yearly fuel cost is approximately $100,000. The utility did not include the fuel cost in the utility budget because the city council provided subsidies to cover the cost of fuel. Upon review of the utility budget, it was found that revenues generated from user's fees are less than the estimated expenditures, respectively $190,000 in estimated revenues and $222,066 in estimated expenditures. The deficit, therefore, is estimated to be approximately $132,066 when fuel cost is included in the budget. For many years, the city council has heavily subsidized the utility. The city council has used the Community Revenue Sharing dollars to fund the utility. These figures indicated that such subsidies are unsustainable and unrealistic. RUBA staff found that the utility creates monthly financial reports comparing actual year-to-date revenues and expenses to the budgeted amounts but these reports have not been included in the agenda of utility board's or city council's monthly meetings. For example, the regular monthly meeting minutes for February and March mention the utility, but no talk about the operation of or financial management of the utility. According to the most recent invoice (May, 2011) from the electric utility, there is no past due amount. According to the February and March regular monthly meeting minutes, the utility has adequate fuel supply to last the rest of the year. The March report showed that the utility used 1,632 gallons and 17,887 gallons were remaining. The utility clerk reported that city staff orders fuel for the entire city, including city utilities. The delivery is in July  August of each year. A new fuel order for FY 2012 is in place. In the past, the utility did not set aside money for repair and replacement costs. In the fiscal year 2011, the utility had to use money from other revenues to cover the repair and replacement costs. The FY12 budget includes a line-item for repair and replacement costs.

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
The utility billing and collection procedures are included in the utility ordinance which was adopted in 1996. The city council reviews the utility rates on a periodic basis and the rates are published in a separate 'Schedule A' page. Nome RUBA staff has a copy of the code of ordinances. Although the utility bills customers on a regular basis, it struggles with collecting past due amounts. According to the May 2011 accounts receivable report, total past due accounts were of approximately $29,300 which was equal to about 15% of the total uncollected amounts to the estimated yearly revenues of $195,000, based on users fees. The delinquencies range between over one year and two months on past due accounts. To address this issue, the city council voted to contract the Alaska Native Tribal Health Consortium (ANTHC) billing services for a period of one year beginning July, 2011. ANTHC bills, but will not provide collection service. An account receivable and payable is in place. Recently the utility upgraded to QuickBooks Pro 2011. Before the upgrade, it used QuickBooks 2008. Staff indicated that the QuickBooks 2008 accounts may have not been properly set up. Because of improper setup, staff uses Microsoft Excel spreadsheets to keep track of accounts receivable. The Excel spreadsheets provide detailed information on current month accounts due and accounts past due. At the advice of RUBA staff, utility staff contacted the RUBA QuickBooks contractor to have utility's QuickBooks setup reviewed. The contractor advised to create a new QuickBooks company beginning July 1, 2011. Staff is working with the contractor on the project.

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
As of June 20, 2011, the Internal Revenue Service (IRS) reported that the utility is current in making federal tax deposits. The utility does not owe federal taxes. However, the utility was penalized in the FY 2010 for not making the deposits on time. The utility has been late in filling 941 returns too. For instance, form 941 for 2011, Employer's Quarterly Federal Tax Return, for the quarter ending in March, 2011 was not filed. Utility staff uses QuickBooks Pro 2011 and Microsoft Excel spreadsheet to calculate, track, and report payroll tax liabilities. The utility is compliant with Employment Security Contributions but has had issues with filing the quarterly reports.

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.
Yes 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.
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 utility has general liability and workers' compensation coverage. The workers compensation insurance is purchased through Alaska Municipal League/Joint Insurance Association and valid until July 1, 2011. The Notice of Insurance was posted in plain view in the city office. According to utility staff, a new insurance will be purchased for the FY 2012. A copy of the city's personnel policies, which applies to all city employees, is on file with RUBA staff. The utility follows the personnel policies in the day-to-day management of personnel. Job descriptions are up to date and outline each employee's duties. The hiring and evaluation process is described in the personnel policies. The utility maintains personnel files for all employees but the utility does not have a Form I-9 for each employee. The city clerk reported that the city is in the process of updating all employees' files to include the I-9. The city and the utility have a probationary period for new hires that includes orientation, job-training/oversight and evaluation, which is completed after ninety days of an employee on the job. The city and the utility provide training opportunities to staff as funds are available.

Organizational Management

Essential Indicators
Answer Question
Yes 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.
No 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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
According to Title VI of the city's code of ordinances, all city-owned utility systems are the property of the utility board. Utility staff reported that the utility board has not met as often as it should. In fact, the board has not had a meeting in two years. As a consequence, the utility has not enforced its policies per the code of ordinances. However, the city council includes the utility in the city council meeting agendas. For instance, the February and March regular meeting minutes show that the water operator's reports were on the agenda. The utility does not have an adequately trained manager. Monthly management reports have not been provided to the city council or the utility board since January 2011. According to the regular meeting minutes from February and March of 2011, the only reports the council received were those provided by the water operator. Those reports presented data on the total water use, production and storage, as well as fuel use. No mention of the status of the operations, maintenance and/or management of the utility. Several meetings with representatives of the Village Safe Water and Alaska Department of Environmental Conservation have been held in the last several months. Both of these agencies have been closely working with the utility clerk, water operator and members of the city council to move forward with the planned upgrades. The city has an organizational chart but it needs to be updated. The utility has a utility clerk who keeps track of the utility finances. The bookkeeper is a full-time employee. She has held this position for the last three years. RUBA staff discussed rate setting to ensure that water rates are sufficient to cover the operating costs of the water plants and the sewer/water haul system. The city council asked for more assistance in setting rates.

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".
Yes 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 has a certified operator. He holds level 1 water treatment and water distribution certificate that expire on December 31, 2011. According to the ADEC website, Gambell utility is classified as a level 1 in water treatment and a level 2 in distribution. He also has the required number of CEUs. The utility has an assistance water operator. He is not certified but he has worked for the utility on and off in the past. The utility has a preventive maintenance plan that was developed by an engineer. A copy of the plan is on file with Nome RUBA staff. The operator uses checklists to verify that preventive maintenance is performed. The operator submits written monthly Operation and Managment report to the manager and the city council. However, RUBA staff found that a few Operation and Managment reports were missing or incomplete. In addition, according to the operator, a verbal monthly Operation and Managment report is made to the utility manager. RUBA staff has no confirmation of whether verbal monthly Operation and Managment report reports are made. The utility has a safety manual on file, but the operator does not participate in monthly AML/JIA safety meetings via teleconference. The water operator reported that he has safety meetings with the assistant operator and they use AML/JIA safety meetings materials. According to April 2011 the Significant Non-Compliance list (SNC), the utility meets all required regulations. This is an improvement for the utility since the last SNC list was published in January of 2011. The utility has an inventory control list but the list needs to be updated. The utility does not have a critical spare parts list on file. According to the utility operator, the utility has the money to order and replace parts and pumps when necessary.