Quarterly Report: 2014, October - December (Q2), Angoon

Community:
Angoon 
Staff:
Lynn Kenealy  
DCRA Regional Office:
Juneau 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
8/30/2012 
Entity:
City of Angoon 
Population:
466 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
12/21/2012 
Exp Date:
8/30/2014 
Last Updated:
1/6/2014 
Community Sanitation Overview:
Angoon is located about 55 miles southwest of Juneau and 41 miles northeast of Sitka. It is the only permanent settlement on Admiralty Island. Angoon's drinking water is derived from Auktah Lake, treated at a Class 2 treatment plant, and then delivered to customers by a Class 1 piped distribution system. Wastewater is taken by a Class 1 collection system and processed at a Class 1 treatment plant. These systems are owned and operated by the City of Angoon. The city also collects garbage twice weekly from all residents and disposes at a municipal landfill located about two miles from the community. 
RUBA Status & Activities This Qtr:
This quarter RUBA staff made a quarterly visit to Angoon to assist the city in meeting utility management capacity indicators. Specifically, RUBA staff worked with city finance staff to design financial reports that appropriately compare actual revenues generated to budgeted amounts, thereby allowing the city council, the community utilities’ governing body, to make sound financial decisions affecting sanitation services in Angoon. During the visit RUBA staff also attended a re-organizational meeting of the city council in which one new council member was sworn in and a mayor was elected. RUBA staff worked closely through the remainder of the visit with the newly-elected mayor to address several utility management issues, including reviewing and adopting the draft new employee handbook, delegation of utility and administrative staff supervisory authority to experienced council members, the possibility of increase utility customer rates to reflect findings of a recent rate study, and options for increasing the city’s utility bill collections rate, which remains below 50 percent. Further, RUBA staff assisted in drafting an updated organizational chart, a resolution that would officially adopt the organizational chart, and a resolution delegating supervisory authority as appropriate. RUBA staff also walked water utility staff through the completion of the Consumer Confidence Report (CCR), and ensured the CCR was posted in all appropriate places and sent to appropriate DEC staff. The city is now meeting the CCR-related indicator on the RUBA assessment as a result of this action. Remote assistance with elections of the city council, sales tax collection, personnel procedures, and codification were also provided by RUBA staff remotely. The city has made important improvements to its wastewater operations over the quarter, and has accessed the support of the SouthEast Alaska Regional Health Consoritum (SEARHC), the Alaska Native Tribal Health Consortium (ANTHC), and the State’s Department of Environmental Conservation (DEC) to make necessary system repairs and replacements. 
RUBA Activities for the Coming Qtr:
Because the city clerk, who serves as the utility clerk, recently resigned, RUBA staff will be sure to assist in training the newly-hired clerk in the coming quarter. Two utility staff members are registered to attend an upcoming RUBA Financial Management for Rural Utilities training in Juneau in January. RUBA staff will be visiting the community the same month to continue encouraging improvements to financial reporting, personnel management, and other indicators on the RUBA assessment. Other remote assistance will be provided as requested.
Scores:
 
Essential Indicators:
22 of 26
Sustainable Indicators:
14 of 27
Total Score:
36 of 53

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.
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.
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.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Angoon adopted its FY14 budget on June 27, 2013. This budget itemizes revenues and expenditures for July 1, 2013 through June 30, 2014. Amendments were made to the budget in August in order to allocate sufficient funds to wastewater operations. The budget now estimates receiving $46,673.97 for water and $23,185.96 for wastewater services through the course of the fiscal year, just slightly more than the actual amounts received for the previous fiscal year. The FY14 budget improves upon the previous year's budget by itemizing separate budget categories such as administration, wastewater, water, etc., rather than lumping the full amount under an administration section. Expenses in both water and wastewater categories are either in line or slightly higher than the actual amounts expended in the previous year. The FY14 budget also eliminates a number of budget categories labeled simply 'Other', thus ensuring expenditures are fully disclosed. The city council is the decision-making body for the sanitation services in Angoon. City fiscal staff provides financial reports at some, but not all city council meetings. Because the city's QuickBooks account is currently under repair, fiscal staff cannot create meaningful financial reports directly from the city's QuickBooks file each month. Staff instead create a document in Excel reflecting budget and actual numbers in all budget categories, feeding in the appropriate numbers from QuickBooks. Reports being provided to the council have improved, as they now compare expenses with the budgeted amounts. However, there is no information about revenue and the reports are not as detailed as they need to be in order for the council to make sound financial decisions. However, progress is being made on fixing the QuickBooks file and reports are gradually demonstrating these improvements. The utility's manager is the city mayor. The mayor provides a manager's reports at every council meeting, both in writing and verbally.Angoon receives diesel-generated electricity from the Inside Passage Electric Cooperative (IPEC). The city has paid all bills to date. The city has adequately budgeted for electricity and fuel, estimating higher expenditures for FY14 than for FY13. The city maintains a 200-gallon fuel tank, which is filled by Angoon Oil and Gas as needed. Angoon Oil and Gas maintains a 4,000-gallon fuel tank and receives shipments from Petro Marine via barge as needed. Angoon Oil and Gas reports not report having any difficulty getting shipments when needed.

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
The city's collection policy, as adopted in 2012, specifies that delinquent customers will either have their water service discontinued or will be referred to a collections agency. Currently though, the city does not have the practical ability to shut off individual customers’ water connection and is not sending delinquent customers to collections agencies. Therefore, they are not actively following their policy. The council is, nonetheless, in the process of exploring alternative options for dealing with delinquent customers, including a possible forgiveness plan and reward system for paying customers. The city bills customers on a monthly basis for water, wastewater, and garbage services. Present rates are $20 per month for water, $12 per month for wastewater, and $10 per month for garbage, with a 50 percent discount for elderly customers over 62 years of age. Bills are sent out at the beginning of the month and are due by the end of the month. Payments can be received in cash, check, money order, or by credit card. A re-assessment of the city's water collection rate identifies that over the past six months, the utility bill collection rate has increased from 26 percent to 62 percent, owing to the utility manager providing the water utility rate study to residents as encouragement to begin paying their bills. Yet the utility's revenues are still too low, causing a significant shortfall every year that must be filled by other sources of income such as Community Revenue Sharing. It should be noted that even with a 100 percent utility bill collection rate, the city would need to be charging all customers more than $57 each month just for water and wastewater service in order to break even. The City of Angoon uses QuickBooks to track all customers and past due accounts and systems are in place to calculate and track payroll, cash receipt, cash disbursement, and purchasing. For payroll, employees clock in and out of work at the city office using a timecard. They then transfer this information onto a time sheet at the end of each pay period. The employee and mayor sign the timesheet and then accounts payable staff processes the timesheet and makes payments. Cash received and disbursed in the city office is processed by the accounts receivable and payable clerks, including a duplicate receipt system and the QuickBooks. There are purchase order and check request forms which each employee must complete in order to make purchases. Purchases under $500 are signed off by the mayor, and purchases over $500 must be approved by the city council majority.There are technical issues between the two computers used for managing finances. The computers do not always network correctly, so the utility’s QuickBooks file often gets split into two different versions. When this happens, the accounts receivable staff has to retroactively update the city's main QuickBooks file. There are a number of other errors on the file as well, making it very difficult to generate meaningful financial reports. A RUBA QuickBooks contractor is working with financial staff on correcting these errors and ensuring the QuickBooks file is kept up to date and accurate in the future. Monthly bank reconciliations are not being completed as the QuickBooks file is being corrected and monitored. The last bank reconciliations completed were through July 2012. Therefore, reconciliations are currently delinquent, potentially causing problems with ensuring all finances are in agreement and accurate.

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 calculates and tracks payroll tax liabilities with the QuickBooks accounting program. The city was calculating liabilities incorrectly by not factoring in new tax rates; this has now been corrected. The IRS could not grant the city tax compliance this quarter due to two outstanding Form 941's for the past two quarters. The city was, however, granted employment security (ESC) tax clearance from the State’s Department of Labor and Workforce Development on November 22, 2013. The city has no liens or past liabilities.

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.
No 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
The City of Angoon has a comprehensive workers’ compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA) valid until June 30, 2014. Employer's Notice of Coverage is posted in locations throughout the city where employees are stationed, including the city office. The city does not currently follow a formally reviewed and adopted personnel policy. The council has identified various areas in which a personnel policy is urgently needed at this time, including pay advances, job descriptions, hiring and firing procedures, employee evaluations, and many more. This is an area the council hopes to focus on in particular over the coming quarters. Personnel policies and procedures are vital for the sustainability of the sanitation utility; they help ensure that all employees are completing the duties necessary for a successful utility and that the council's employment of personnel is in line with laws and regulations. Personnel files are well organized and contain all necessary INS and IRS forms, acceptance letters, and records of disciplinary actions. The city's FY14 budget allocates significantly more money for training expenses than the FY13 budget. Additionally, the city council actively encourages employees to attend RUBA management trainings. A breakdown of employees’ attendance at these trainings is provided in the Organizational Management section of this report.

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
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
Angoon Municipal Code Title 13 governs the city's water and wastewater utilities. Section 13.08.010 provides for ownership and operation of the water utility by the City of Angoon and for policy-making powers. The policy-making body is the city council, which meets at least once regularly every month and complies with the Open Meetings Act by ensuring all meetings are public and adequately posted ahead of time. Currently, the council is not enforcing the codified utility policy, specifically the provisions of the policy related to utility bill collections. This is partially due to the fact that the policy cannot be practically enforced as it is written; the policy requires that delinquent customers have their water services disconnected, though, as described previously in this report, the lack of necessary shut-off valves makes that impossible. The city is encouraging utility staff to request and attend training specific to their particular duties and responsibilities. The council has been particularly encouraging of sending staff to RUBA’s utility management trainings. The mayor, who also serves as the utility's manager, has attended the RUBA Elected Officials Management for Rural Utilities training, as has one other council member. The interim city administrator has attended the Personnel and Planning Management for Rural Utilities trainings. The accounts receivable clerk has attended Personnel, Elected Officials, and Financial Management for Rural Utilities courses, along with a RUBA-sponsored QuickBooks class. The accounts payable and accounts assistant clerks have also both attended that QuickBooks training. The accounts assistant clerk has attended the Personnel Management for Rural Utilities training and the former city clerk had attended Personnel and Utility Clerks Management trainings. The utility's water operator has partial certification, which will be discussed further in the following section. The water operator has attended the RUBA planning training. The city does not have an organizational chart that reflects its current structure. The lack of an organizational chart delineating chain of command is causing some confusion among both utility staff and council members regarding responsibilities and authority. However, the council has provided revisions to a suggested organizational chart, and reports hoping to adopt the new chart shortly.

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.
No 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.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
Angoon’s primary operator has worked for the utility for over two years. He has a provisional water distribution certificate. This needs to be upgraded to a Class 1 certificate. He is actively working toward Class 1 wastewater collection Class 2 water treatment certifications. The water treatment plant includes an office area where all files and documents are kept. Files contain an operation and maintenance manual which came with the new water treatment facility, a critical spare parts list, and regular reports by the water operators. The current utility manager has not done spot checks or requested regular reports from the water operators. RUBA staff has recommended that such practices begin to help ensure the manager and council are aware of any issues that might come up with regard to water operations. Spot checks would also help see that utility operations are being completed to the expected level of service. There is no routine process for discussing safety issues and conducting inventory control at the utility. Generally, utility services in Angoon are being provided at the expected level. There have, however, been service issues over the past year related to power trouble, but these have been resolved. In December 2012, the water operator completed the 2011 Consumer Confidence Report information and distributed it throughout the community, as well as providing the paperwork to RUBA staff to forward to Department of Environmental Conservation (DEC). The water operator has completed the 2012 CCR in September 2013, and distributed it upon completion. Upon the completion of this CCR and prompt water testing, the city's water utility was taken off of the Significant Non-Compliance List.