Quarterly Report: 2014, January - March (Q3), Grayling

Community:
Grayling 
Staff:
Fred Broerman  
DCRA Regional Office:
Bethel regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Grayling 
Population:
188 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
1/10/2007 
Exp Date:
 
Last Updated:
4/7/2014 
Community Sanitation Overview:
Water is derived from an infiltration gallery at Grayling Creek, treated, stored and piped throughout the community. The city's piped water and wastewater system provides service for 48 residential and three commercial customers as well as the community's school. Grayling was a charter member of Alaska Rural Utility Collaborative (ARUC) but their membership was terminated on June 30, 2009. 
RUBA Status & Activities This Qtr:
Bethel RUBA staff visited Grayling's city office from March 4-6, 2014 to attend a city council meeting and to work with the city clerk on compliance of RUBA management indicators. During the March 4 city council meeting, Bethel staff was given opportunity to comment on the multi-month financial statement which contained all the city’s revenues and expenses through January 2014. The financial report indicated that Grayling’s water and wastewater utility was running at a $68,000 year-to-date deficit, primarily due to customers not paying their monthly bills. The city uses Alaska Native Tribal Health Consortium’s (ANTHC) Assisted Billing program to bill and collect water and wastewater user fees. According to ANTHC’s most recent financial summary, the City of Grayling’s January 2014 collection rate for the school, its 3 or 4 commercial and 45 residential customers was only 21%. Also, an ANTHC February 28, 2014 accounts receivable aging report for Grayling’s water and wastewater customers shows from $3,700 to $4,520 in delinquent payments for the previous three months, and accounts delinquent over 90 days totaling $49,784. According to the FY14 budget/multi-month financial report, the city’s overall year-to-date expenses have surpassed year-to-date income by over $17,000. During the meeting, a water and wastewater utility ordinance was introduced and reviewed by council members. Apparently a water and wastewater utility ordinance could not be found in the city files. Bethel staff advised city council that in order to comply with RUBA standards they would need to enforce the collection policy contained in the proposed draft ordinance and work to get the collection rate for the city’s water and wastewater customers above eighty percent. City council was also advised about the importance of holding at least one council meeting each month (even in summer) and that the minutes for the meetings needed to document that a RUBA compliant monthly financial report was reviewed and accepted. During the meeting, city council also approved sending city water operators to YKHC sponsored Small Treated Water System training in Bethel in April. Currently, the city does not have a certified water operator. 
RUBA Activities for the Coming Qtr:
Bethel regional office staff will continue to encourage Grayling's city clerk and council members to submit documents necessary for RUBA compliance to the Bethel regional office on a quarterly basis.
Scores:
 
Essential Indicators:
15 of 26
Sustainable Indicators:
7 of 26
Total Score:
22 of 52

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.
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.
N/A Budget amendments are completed and adopted as necessary.
Finances Comments
A copy of Grayling's FY14 Operating Budget and accompanying ordinance adopted on November 19, 2013 is on file at the Bethel regional office and it appears to be balanced and realistic. City council meeting minutes were provided for August, September, October and November 2013, but have not been provided for December 2013, January and February 2014. Therefore, the third essential indicator of the section is marked "No". However, a FY14 multi-month financial report spreadsheet containing expenses and revenues through January 2014 was provided to city council members and RUBA staff during the March 4 city council meeting. A March 31, 2014 phone call to Alaska Village Electric Cooperative (AVEC) indicated that the city is current on paying all their electric accounts . A December 19, 2013 phone contact was made with Grayling's city clerk and and personnel at HYL Fuel (the community's fuel retailer). Both parties indicated the 6,600 gallons of heating fuel in the water plant's fuel storage tanks should be an adequate supply for the winter of 2013/2014. According to the city's FY14 budget/multi-month financial report its overall year-to-date expenses have surpassed year-to-date income by over $17,000. Therefore, the sixth essential indicator and the first three sustainable indicators of this section are marked "No". A monthly manager's report was not provided to the Bethel RUBA regional office this quarter.

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.
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
During a March 4, 2014 city council meeting, a water and wastewater utility ordinance was introduced and reviewed by council members. The ordinance contains a collection policy. Apparently a water and wastewater utility ordinance could be not found in the city files. As of February 2013, Grayling's billing for water and wastewater services is being handled by Alaska Native Tribal Health Consortium's (ANTHC) Billing Assistance Service. According to ANTHC’s most recent financial summary, the City of Grayling’s February 2014 collection rate for the school, its 3 or 4 commercial and 45 residential customers was only 39 percent. Therefore, the first essential indicator of this section is marked 'No'. The city has an accounts payable system set up in its QuickBooks file. During the October 29-31, 2013 RUBA on-site visit the city's chart of accounts was streamlined and the payroll system was brought up to date. January and February 2014 bank statements and accompanying reconciliations were not provided by the city for this report. The city has not provided a written purchase approval plan to the Bethel RUBA regional 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.
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
A March 21, 2014 email correspondence from the State of Alaska, Department of Labor's Anchorage Employment Security Tax office indicated the city is current with its filings and deposits through December 31, 2013. An IRS fax correspondence dated March 18, 2014 indicated that the city has past due payroll tax obligations, and problems with 941 payroll quarterly reports matching W-2 wages forms for 2012. Therefore, the 'Tax Problems' essential indicators were marked 'No'. The city is not listed on the January-February 2014 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.
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.
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
A December 18, 2013 query done on the Department of Labor's Worker's Compensation employer database indicates that the city has workers' compensation insurance for its employees through Alaska Municipal League Joint Insurance Association. Adequate information about other aspects of the city's personnel system have not been provided to the Bethel regional office. Therefore, several sustainable indicators for the 'Personnel System' section of the RUBA assessment could not be evaluated and were marked 'No'. The city clerk attended a RUBA sponsored Utility Clerk training September 10-14, 2013; a RUBA sponsored Introduction to QuickBooks training September 26-28, 2013; and a RUBA sponsored Planning training held December 9-13 2013. The clerk also attended the RUBA sponsored Elected Officials training held in Bethel, January 27-31, 2014. The trainings indicate the city provides training opportunities to staff as needed and available.

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
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
The City of Grayling's Code of Ordinances, dated June 2002, does not contain a water or wastewater department section. A water and wastewater utility ordinance was introduced to city council on March 4, 2014. Until meeting minutes are provided that document city council's adoption of the water and wastewater ordinance the first three and seventh essential indicators of this section are marked "No". Grayling's billing for water and wastewater services has been handled by Alaska Native Tribal Health Consortium's (ANTHC) Billing Assistance Service since February 2013. According to ANTHC’s most recent financial summary, the City of Grayling’s February 2014 collection rate for the school, its 3 or 4 commercial and 45 residential customers was only 48 percent This low percentage reflects the city not having a utility policy in place. The city clerk is adequately trained to handle the city's bookkeeping and managerial needs. She attended RUBA sponsored Utility Clerk training September 10-14, 2013, a RUBA sponsored Introduction to QuickBooks training September 26-28, 2013 and a RUBA sponsored Planning training held December 9-13 2013. The clerk also attended the RUBA sponsored Elected Officials training held in Bethel, January 27-31, 2014. The Alaska Certified Water/Wastewater Operator Database recognizes Grayling's water treatment plant as a 'Small Water System/Treated' facility. A March 31, 2014 query of the state's database found none of the city's three operators certified to the level of the water plant. On March 5, 2014 Bethel staff worked with the city clerk in creating an organization chart and accompanying resolution. However, meeting minutes documenting the resolution being adopted by city council has not been provided. The city council attempts to meet at least monthly pursuant to Alaska Title 29 and public notification of meetings and the manner in which they are conducted is in accordance with Alaska's Open Meeting Act or otherwise stated in local ordinances.

Operation of Utility

Essential Indicators
Answer Question
No 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.
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.
No 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.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
A copy of the Operation and Maintenance Manual for Grayling's Water Treatment Plant, dated July 2003, is electronically filed at the Bethel regional office. It contains a preventive maintenance plan, a safety section and a critical spare parts list. The Alaska Certified Water/Wastewater Operator Database recognizes Grayling's water treatment plant as a 'Small Water System/Treated' facility. A April 2, 2014 query of the database found none of the city's three operators certified to the level of the water plant. The city is on the January 2014 SNC list. Graylings water treatment facility’s 2012 Consumer Confidence Report (CCR) and accompanying certification form indicating the CCR has been posted and distributed in the community was signed by the mayor on June 27, 2013. Both forms are electronically filed at the Bethel Regional Office. Other operational information for the city has not been provided. Therefore, several sustainable indicators for the 'Operation of the Utility' section of the RUBA assessment could not be evaluated and were marked 'No'.