Quarterly Report: 2013, 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:
4/22/2013 
Community Sanitation Overview:
According to Census 2010, the City of Hooper Bay has a population of 1,149. Since 1994, approximately 50 million dollars of federal and state funds have been invested in building Hooper Bay's water and wastewater system. The water treatment plant/washeteria building was completed in 2007, and a satellite utility building was completed in 2009. The community's clinic, clinic housing, school, Head Start building, and teacher housing were the first to be connected to the community's new water treatment/washeteria facility completed in 2007. Since then, above ground Arctic pipe service lines have been built and about 30 households and most of the community's commercial establishments have been connected to piped water. About 150 more homes are scheduled to be hooked up to the piped system in 2013 or 2014. About $12.5 million in additional funding is currently available to continue the project; $2.5 million of this is EPA funding, which requires RUBA compliance. At the time of this writing, residents living in 216 dwellings haul water from watering points for cooking, cleaning, and washing needs. Residents also self-haul their garbage and honeybuckets 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 wastewater lagoon. 
RUBA Status & Activities This Qtr:
About 12.5 million dollars in federal and state funding could be available for connecting Hooper Bay's residences to piped services in FY13, but the city needs to be RUBA compliant to receive these grants. On February 25-28 and March 26-29, 2013, Bethel RUBA and RUBA contracted QuickBooks consultant made two visits to Hooper Bay as part of a RUBA QuickBooks install and on-site training agreement awarded to the city. Hooper Bay was one of four communities statewide awarded the QuickBooks install for FY13. In addition to updating QuickBooks software and reviewing the city's accounting system, work focused on drafting a detailed FY13 budget for the city council to adopt, bringing QuickBooks accounts receivable up to date (monthly payments for piped water customers $85 and sanitation user fees $25 were not being entered into QuickBooks, but were being recorded manually) and developing a monthly financial report for city council. RUBA staff also coordinated with the engineer and CE2 tech support staff to provide the city's administrative staff with improved internet connectivity, additional RAM and networking capabilities for the bookkeeper and city clerk's computers. Networking the clerk and bookkeeper's computers was completed by the engineer and technician and allows both employees to make entries and work in the QuickBooks file simultaneously. Other administrative employees are now able to assist with routine accounts receivable entries. Improvements that were made to the city's accounting system included entering all customer payments for FY13 and separating washeteria revenues and expenses from those of the water and wastewater facilities so the finances of each enterprise could be reviewed independently. The city has also started garnishing gaming winnings of customers who are delinquent on paying their monthly sanitation and piped water fees. 
RUBA Activities for the Coming Qtr:
Bethel RUBA staff will continue to work with city staff with any deficient indicators as requested.
Scores:
 
Essential Indicators:
19 of 26
Sustainable Indicators:
14 of 27
Total Score:
33 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.
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.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The city's FY13 budget ordinance, adopted on July 12, 2012, is electronically filed at the Bethel regional office. The city's water and wastewater utility is subsidized through gaming revenues. Therefore, the RUBA assessment reviews the entire city budget for compliance. The city's FY13 budget submitted to the State of Alaska for annual Community Revenue Sharing does not list all revenue and expenses for each department, project or grant. Because the FY13 budget lacks details, three of the 'Finances' essential indicators are marked 'No'. During a February 25-28 visit, Bethel RUBA staff assembled previous budgets and recent financial documents, and interviewed the administrator and bookkeeper about the revenues and expenditures of each of the city's departments and grants. This information was used to create a detailed draft budget that contains all departmental information. The draft budget was given to the city administrator with the recommendation that he urge city council to start the process of adopting it as soon as possible. However, by the March 26-29 visit, council had not yet taken action on adopting the draft budget. Hooper Bay has not provided RUBA staff with minutes from city council meetings from December 2012 through March 2013. Also during the February 25-28 visit, RUBA staff created a multi-month financial report template for the city. Then, during the March 26-29 visit, the QuickBooks contractor working with the city's bookkeeper brought the financial report up to date for the year. However, the financial report needs updated each month and presented to city council. Validation that the city council has reviewed and accepted the monthly financial reports need to be documented in meeting minutes for three consecutive months. Compliance for the RUBA monthly financial reports essential indicator is that council members have the opportunity to review financial reports during each monthly meeting. An April 8, 2013 phone conversation with Alaska Village Electric Cooperative (AVEC) indicated that the city is current on its electric accounts. From October 1-18, 2012, fuel distributer Delta Western attempted to make a late fall delivery of 45,000 gallons of fuel to the City of Hooper Bay. The fuel was purchased by the city to heat its buildings and its water and wastewater facilities during the winter of 2012/2013. However, icy waters and strong north winds prevented the fuel barge from reaching the community. After the failed delivery attempts, Delta Western worked out an agreement with Crowley, which has a tank farm in Hooper Bay, to purchase fuel to cover the city's winter needs. 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'. In the detailed draft budget created by Bethel RUBA staff during the February 25-28 visit a $5,000 line item R and R expense was included for the water treatment plant. However, the detailed draft budget has not been adopted, therefore this sustainable indicator is marked 'No'. RUBA indicators also require that manager's reports (in this case from the city administrator) be given monthly to city council either verbally or as written reports. A complete manager's report will explain the monthly financial report of the utility and point out any utility problems or trends that need to be addressed. Highlights of verbal manager reports should be included in meeting minutes or a copy of written reports be submitted to the Bethel regional office quarterly. City council meeting minutes were not provided to the Bethel regional office this quarter. Therefore, the fourth sustainable indicator of this section is marked 'No'.

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 outline the city's collection policy. In May 2011, the city started billing the first 40 residential customers connected to piped water and wastewater services. The city charges a flat rate of $85 monthly to residential customers on the city's piped water and wastewater system. The city also charges residents a monthly $25 sanitation and road user fee. The city uses QuickBooks Pro 2013 for its financial accounting, tracking wages, and payroll taxes. Water and wastewater billings are sent out the twentieth of each month. On February 25 and 26, the QuickBooks contrator worked with the city's bookkeeper to reconcile all four of the city's bank accounts. An accounts receivable aging report from late March 2013 shows the city's residential and commercial piped water customers having significant outstanding balances for 1-30, 61-90 and more than 90 days past due. A similar pattern of past due amounts is seen on the account receivable aging report for payments for sanitation and road user fees. These reports indicate the city is either having problems enforcing its collection policy, or it has a collection policy lacking effective protocol for dealing with delinquent customers.

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.
No 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 for its payroll accounting. A March 19, 2013 fax correspondence from the IRS Taxpayer Advocate Service indicates the city is current with required federal tax deposits and informational requirements. A March 20, 2013 email correspondence from Alaska Department of Labor in Anchorage indicated the city has a payment due for its Employment Security Taxes for the fourth quarter of 2012. Therefore, the third essential indicator of this section 'The utility is current on making tax deposits' is marked 'No'. The city is not listed on the January-February 2013 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
An April 8, 2013 query of the State of Alaska Employers' Workers' Compensation Insurance Coverage Verification database indicated that the city has workers' compensation insurance for its employees with Alaska Public Entity Insurance. An adopted personnel policy has not been provided to the Bethel RUBA regional office. On October 12, 2011 position descriptions and/or job announcements were provided for the bookkeepers city clerk, city administrator, substitute city clerk and the water treatment operator, which 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 20, 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. An accounts receivable aging report from late March 2013 shows the city's residential and commercial piped water customers having significant outstanding balances for 1-30, 61-90 and more than 90 days past due. A similar pattern of past due amounts is seen on the account receivable aging report for payments on sanitation and road user fees. These reports indicate the city is either having problems enforcing its collections policy, or it has a collection policy lacking effective protocol for dealing with delinquent customers. 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 June 2010 and has handled the duties of the position well. The city's bookkeeper has held her current position for 22 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 8, 2013 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 20, 2011, contains an organizational chart that reflects the city's current structure. The city council attempts to meet monthly pursuant to Alaska Title 29. 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".
Yes The utility is not on the "Significant Non-Complier" (SNC) list.
Yes The utility maintains an inventory control list.
Yes 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 8, 2013 query of the Alaska Certified Water/Wastewater Operator Database the city's assistant operator is not certified. 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 wastewater facilities, the utility is in good working order and operating at a level of service proposed. CE2 Engineers presented the city with copies of the Water Treatment Plant Operation and Maintenance (O+M) Manual on April 20, 2012. A preventive maintenance plan, along with a health and safety plan, an inventory control list and a critical spare parts list are all included in the O and M Manual. A copy of the city's 2011 Consumer Confidence Report was filed timely. Although not all Hooper Bay residents have been connected to the city's water and wastewater facilities, the utility is in good working order and operating at a level of service proposed. The city is not on the January 2013 Significant Non-Complier (SNC) list.