Quarterly Report: 2011, January - March (Q3), Quinhagak

Community:
Quinhagak 
Staff:
Fred Broerman  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Quinhagak 
Population:
757  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/4/2011 
Community Sanitation Overview:
Quinhagak has a population of 757 with 78 homes connected to the piped water and sewer system, 28 homes on a flush and haul system, and 73 residences haul their water and dump waste in hoppers. There is a watering point at the water treatment plant where residents fill containers free of charge. The community's school is the only commercial customer on the piped water and sewer system. Water is hauled upon request to the Head Start building and the Qanirtuuq Inc. Store, the other two commercial customers. The IRA council manages the water and sewer facilities and employs two water operators and a waste water operator which are supervised by the Public Works Director. The tribe has been in Alaska Native Tribal Health Consortium's (ANTHC's) billing assistance program since June of 2010. ANTHC bills only residential customers on piped water and sewer. The water and sewer department is subsidized significantly by the City of Quinhagak through a memorandum of agreement which closely ties city and tribal governments' day to day business. The tribe owns the lagoon, the utilities building, distribution mains, and the 250,000 and 45,000 gallon water tanks. The city owns the washeteria, water plant, the transmission line from the water plant to the utilities building, and the infiltration gallery. The joint tribal/city council also operates the trash haul and landfill services and the community washeteria. Currently less than half of the residences are connected to the piped system. Necessary core infrastructures such as the utilities building, two water storage tanks having capacities of 250,000 and 45,000 gallons, distribution lines and sewage lagoon have been built to facilitate the entire community being on piped water and sewer. Plans for the 2011 construction season include increasing the intake capacity of the water source infiltration galleries and retooling the water and sewer plant so they can meet demands for piped water for the whole community. After these improvements the final phase of construction will be connecting the remaining homes into the piped system. 
RUBA Status & Activities This Qtr:
Bethel RUBA staff visited the community of Quinhagak February 7-9, 2011, to interview IRA and city administrative staff and collect documentation to complete a RUBA assessment for the tribal utility. The IRA council manages the water and sewer facilities and employs two water operators and a waste water operator. The water and sewer department is subsidized significantly by the City of Quinhagak through a memorandum of agreement which closely ties city and tribal governments' day-to-day business. Quinhagak IRA Council has been using a utility billing assistance program since June of 2010 and is considering membership in the Alaska Rural Utility Collaborative (ARUC), a regional utility management program. Bethel RUBA staff was called on to explain specifics of ARUC membership compared to the billing assistance program during a joint tribal-city meeting. Tribal and city leaders were not aware that the release of a three million dollar grant for water and sewer construction planned for spring of 2011 required RUBA compliance. Additional explanation was necessary regarding how ARUC membership might affect RUBA compliance. A concerted effort by Quinhagak IRA and city administrative personnel will be needed to bring the utility into RUBA compliance prior to the 2011 construction season.  
RUBA Activities for the Coming Qtr:
-Provide joint council and Bethel RUBA staff with detailed monthly financial reports that include at least 'Budgeted'; 'Year to Date'; and 'Remaining Balance' columns for each grant and department's expenditures and revenues. -Document that monthly financial reports have been reviewed and accepted by the joint council in meeting minutes. -Get current on electric bills. -Enforce the utility's collection policy. -Ensure that IRS 941 payroll tax reports are filed on time.
Scores:
 
Essential Indicators:
21 of 26
Sustainable Indicators:
14 of 27
Total Score:
35 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.
No 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
The day-to-day business of the community's tribal and city governments is tied closely by a memorandum of agreement and renewed every two years. Because user fees collected from customers of the Native Village of Kwinhagak's water and wastewater utility do not cover expenses incurred in its operation, both tribal and city budgets were reviewed. The Joint Muni-Tribal General Fund FY11 Budget found on the Native Village of Kwinhagak Community Development Site website along with several other financial documents provided by the tribe were used in this assessment. Documents verifying the tribe's adoption of the budget on July 16, 2010 and the city's adoption on August 11, 2010 were also provided. Even though the tribe's water and wastewater department runs at a deficit, significant revenues are given to the IRA council from the city via the memorandum of agreement. The city's sales and fish taxes, Payment In Lieu of Taxes, and Community Revenue Sharing funds are transferred to the tribe to cover the water and wastewater operating deficit. Minutes from eleven council meetings from July 2010 through January 2011 do not document that council members were provided an opportunity to review monthly financial reports. Monthly financial statements provided by the tribe from FY09 through FY11 show only income and revenue for the water and wastewater utility which operates at a deficit each month. A 'council friendly' monthly financial report format should be used that at least includes columns for the 'budgeted amount', 'year to date', and 'balance' for revenues and expenditures of all departments and grants. A 'current month' column in the monthly report would also be helpful. Another option to satisfy this essential indicator would be to provide council members with a QuickBooks Profit and Loss by Class report for each department, grant and project along with a Profit and Loss, Budget versus Actual report. The monthly report should clearly show the bottom line for each department or grant as well as the tribe/city as a whole. Without monthly financial reports containing this information, it is hard to determine if revenues or expenditures are above or below those budgeted. Meeting minutes should document that council members have had the opportunity to review and accept monthly financial reports. Correspondence received from Alaska Village Electric Cooperative, Inc. on February 25, 2011 indicated that the IRA council is not current in paying its electric bills. Significant amounts are thirty and sixty days, past due even though payments were made on several of their accounts on February 11, 2011. The tribe made no payments on their accounts between November 3, 2010 and February 11, 2011. The IRA council staff indicated that 17,820 gallons of heating fuel was delivered on July 10, 2010 and 5,333 gallons was delivered on September 30, 2010. According to the public works director as of March 1, 2011 the tribe had 13,522 gallons of heating fuel on hand which he indicated would be adequate to cover heating needs until their next delivery planned for June of 2011. Repair and replacement or capital replacement schedules for the water and wastewater department were not included in the FY11 budget or monthly financial reports that were provided. Monthly manager's reports for the water and wastewater department were not contained in council meeting minutes from July 2010 through January 2011, nor was there any mention of amendments to the FY11 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.
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 IRA utilizes Alaska Native Tribal Health Consortium (ANTHC) billing assistance service for invoicing the seventy-eight homes connected to the piped water and wastewater system. ANTHC's records show collection rates at approximately 94% from June through December of 2010 for piped customers. Page seven of Native Village of Kwinhagak Rules and Regulations for Water and Wastewater Service, Ordinance #09-05, states that a turn-off notice is issued after a bill has reached an amount equivalent to three months of service. The tribe charges $23.00 for water delivery, $28.75 for flush and haul service, and $23.00 for hopper services. Customers are billed for water delivery and flush and haul services when they are performed, but are billed on a monthly cycle for hopper services. An accounts receivable aging report for the tribe's water and sewer services (other than what ANTHC bills for piped services) shows numerous accounts with amounts due significantly more than three months accrual for services rendered. There is over $90,000 in delinquent customer payments that are more than 90 days past due for water delivery, flush and haul and hopper services. QuickBooks 2010 Premiere Non-Profit Edition software is used to track customer accounts, record all outgoing funds and to create payroll. A ColorChoice cash receipt book is used to document incoming money such as bingo donations and fees for flush and haul and water delivery services. Copies of receipts from six cash transactions completed on February 7, 2011 are on file in the Bethel office. Transaction details from cash receipts are eventually entered into QuickBooks. A QuickBooks Chart of Accounts dated February 3, 2011 was provided by tribal staff. The tribe's Wells Fargo General Fund checking account statements and accompanying QuickBooks reconciliations were provided for November and December of 2010 and January 2011. The tribal administrator briefed RUBA staff regarding the IRA's purchase approval procedure and provided examples from purchasing files from Grainger, Alaska Airlines and Alaska Indoor Sports Distributing, Ltd. Each transaction included an in-house purchase requisition/approval form, a QuickBooks generated purchase order, and receipts from vendors. A copy of each of these documents from a January 10, 2011 purchase from Alaska Indoor Sports is electronically filed at the Bethel RUBA office.

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
Quinhagak IRA uses QuickBooks 2010 Premiere Non-Profit Edition software to calculate and track payroll tax liabilities. A February 3, 2011 correspondence from IRS indicates that the tribe has not filed federal payroll reports for September of 2010; but is current on federal tax deposit requirements for 2008-2010. A March 1, 2011 email correspondence from the State of Alaska's Department of Labor indicated that the tribe had a zero balance on their Employment Security Contribution taxes and is current through December 2010. Neither the tribe nor the city is listed on the Lien Watch: A Review of Small Community Liens for November-December 2010.

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.
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.
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
Bethel RUBA staff contacted Combs Insurance Agency, Inc. by phone on March 1, 2011. The agency confirmed that Quinhagak IRA has a worker's compensation policy with Alaska National Insurance Company that covers tribal and city employees which is paid in full through June 30, 2011. RUBA staff was provided with a copy of Native Village of Kwinhagak Personnel Policies and Procedures, last revision adopted October 19, 2007. Previous revisions to the policy mentioned in the document were on September 7, 2007, February 7, 2007 and October 14, 2003. The tribal administrator provided job descriptions or job opening announcements for the public works director, tribal administrator, the tribe's chief finance officer and the city's coordinator/clerk positions. Electronic files of these documents are available at the Bethel Regional office. The IRA council's personnel policy contain an employee evaluation form used for tribal and city employees. The form has a formula for rating employees according to quality of work, work quantity, judgment, teamwork, dependability, and achievement of goals. However, because the evaluation is generic in nature it does not directly tie the employee's rating back to his job description. Three tribal employees were interviewed who indicated they were evaluated with the form about once a year. The Employee Selection Process section 2.3 of the tribe's personnel policy details an adequate hiring protocol. On February 9, 2010 the tribal administrator and RUBA staff reviewed several personnel files. Most of the employee files contained applications and hiring agreements signed by the employee and the tribal administrator. Recently hired employees had completed I-9 forms in their files, but most of the files for employees with longer tenures did not have I-9s. Section 2.9 'Transfers and Promotions' of the personnel policy mentions only in passing a probation period for new employees and one is alluded to in Section 2.4 'Position Descriptions'. However, the policy does not specifically lay out a probationary period, orientation and job training/oversight and evaluation schedules for new employees. Employees that were interviewed on February 8 and 9, 2011 seemed satisfied with training opportunities provided by the IRA council.

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.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
A memorandum of agreement between the City of Quinhagak and the Native Village of Kwinhagak, Quinhagak IRA Council enables the city to contract with the tribal government for the operation, maintenance and use of all city water and wastewater facilities. This agreement is renewed every two years. The tribe adopted Ordinance #09-05 Rules and Regulations for the Water and Sewer Service on July 1, 2009. The policy making body has contracted with ANTHC billing assistance for invoicing customers on the piped water and sewer service, and an Alaska Rural Utilities Collaborative (ARUC) membership is being actively pursued. The accounts receivable aging report for the tribe's water and sewer services (other than what ANTHC bills for piped services) shows numerous accounts with amounts due significantly more than three months accrual of services rendered. There is over $90,000 in delinquent customer payments that are more than 90 days past due for water delivery, flush and haul and hopper services. This indicates neglect in enforcing Section 1.01.110. (d) 'Turn-off Notice' found in the rules and regulations of the tribe's water and sewer ordinance. The public works director is a well seasoned and helpful tribal employee who has over twenty years service to the tribal government, ten years of his tenure has been in his current position. He holds a State of Alaska Water Distribution I Certificate and supervises the utility's two water treatment plant operators and the waste water operator. The IRA Council's chief finance officer has worked for the tribe for over five years, first as an accountant then as the chief finance officer. She responded promptly to requests for financial data and seems well versed using QuickBooks and Excel software to create budget summaries, accounts payable aging reports and bank account reconciliations. The accounts payable bookkeeper has worked for the tribe since July 2010. She has had QuickBooks training and has ample on-the-job experience using the software. She has one year accounts receivable experience and prior experience working for a tribe where she performed all aspects of accounting including payroll, account reconciliation, accounts payable and grant reporting. The accounts receivable bookkeeper has worked for the tribe since September 3, 2010. She has taken two QuickBooks trainings and previously worked for the tribal corporation for two years doing bookkeeping related work. Water Treatment Operator Frank Jones has a Small Water System Treated Certificate and a Water Distribution Provisional Certificate and ten years experience working on the water system. Water Treatment Operator Jonathan Alexie has a Water Treatment 1 Certificate and has been working on the facilities for eight years. Waste Water Operator Carl Fox has been working at the utilities building for two years and will be attending training in April 2011. All certifications of the operators expire December 31, 2012. An organization chart for the joint tribal/city council's staff was provided but it was not current nor was there evidence that it had been adopted by the IRA council. Minutes from twelve council meetings from July 2010 to February 2011 indicate meetings are held regularly, sometimes twice a month, but not always on the second Tuesday of each month as specified in the city's ordinance. A public notice for the February 8, 2011 regular joint council meeting was not posted in public places such as the post office or washeteria prior to the meeting as is required in the State of Alaska 'Open Meetings Act' [Section 44.62.310(e)].

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.
No The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
Quinhagak's water and sewer facilities are rated by the State of Alaska as a Water Treatment Class 1 and a Wastewater Lagoon, respectively. Public Works Director George Johnson has a Water Distribution 1 Certificate. Water Treatment Operator Frank Jones has a Small Water System Treated Certificate and a Water Distribution Provisional Certificate and ten years experience working on the water system. Water Treatment Operator Jonathan Alexie has a Water Treatment 1 Certificate and has been working on the facilities for eight years. Waste Water Operator Carl Fox has been working at the utilities building for two years and will be attending training in April 2011. All operator certifications expire December 31, 2012. Information needed to evaluate the remaining essential indicator and the nine sustainable indicators of this section came from on site interviews with water operators on February 8 and 9, 2011, and phone conversations and emails with CRW Engineering Group LLC and Yukon-Kuskokwin Health Cooperation's field environmental health officer and remote maintenance worker assigned to community on March 2 and 3, 2011, respectively. The water and wastewater facilities have detailed preventive maintenance plans that include numerous daily, weekly and monthly task checklists and logs. Operators document completion of tasks and submit reports regularly to the public works director, CRW Engineering and YKHC's remote maintenance worker. Written or verbal operation and maintenance reports were not mentioned in the eight months of council meetings that were provided. Operational and maintenance manuals for the facilities contain safety protocols for their infrastructure and equipment functions, however documentation for safety meetings were not provided. Between December 23, 2010 and January 8, 2011 the water main from the water treatment plant to the water storage tanks froze up due to a rock lodged in a check valve and subsequent heat tape failure. This resulted in the utility having to shut-off service to piped customers because water supply got so low there was danger of not having enough water circulating in distribution lines to keep them from freezing. However, this type of failure does not appear to be a reoccurring problem. The proposed level of operation for the utility is for all residences and commercial facilities to be connected to the piped water and sewer system. Currently less than half of the residences are connected to the piped system. Necessary core infrastructures such as the utilities building, two water storage tanks having capacities of 250,000 and 45,000 gallons, distribution lines and sewage lagoon have been built to facilitate the entire community being on piped water and sewer. Plans for the 2011 construction season include increasing the intake capacity of the water source infiltration galleries and retooling the water and sewer plant so they can meet demands for piped water for the whole community. After these improvements the final phase of construction will be connecting the remaining homes into the piped system. An electronic copy of the utility's 2009 Consumer Confidence Report is on file at the Bethel Regional office. Quinhagak's water treatment plant is not on the State of Alaska's January 2011 Significant Non-Complier (SNC) list. An inventory control list was not provided, but the utility does have a critical spare parts list as well as the necessary parts and supplies on hand to provide timely service without interruption.