Quarterly Report: 2010, April - June (Q4), Chefornak

Community:
Chefornak 
Staff:
Fred Broerman  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Chefornak 
Population:
450  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/17/2010 
Community Sanitation Overview:
Twelve watering points and a well for a new water treatment plant provides water for Chefornak; residents haul from various watering points. Only 6 homes have plumbing. 50 residences use honeybuckets; 24 homes use tank haul. The school well is inadequate; the water is too salty. Infrastructure improvements are underway, including a washeteria -- the community wants a piped system. Electricity is provided by Naterkaq Light Plant. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Chefornak, January 5-7, 2010, to assist the city administrator in reconciling bank statements and developing procedures for control of cash receipts. RUBA staff reviewed documentation for 2007, 2008, and 2009. After a review of some of the documentation, RUBA staff realized that the problems were not a matter of reconciling of statements, but the fact that there was poor documentation of financial transactions. In 2007, RUBA staff found that too much documentation was missing in order to provide a good review. In 2008 and 2009, RUBA staff found a disparity between revenues and deposits. Due to inadequate documenting of transactions, RUBA staff was only able to provide recommendations for future accounting procedures to prevent a reoccurance. Based on RUBA staff review, the light plant did have procedures in place to monitor transactions, but the system failed to provide credible documentation on cash receipts. In most cases, this information was not clearly documented. As a recommendation, a system should be setup for proper documentation and control of cash receipts. RUBA staff will assist and provide examples of systems that could be used. One suggestion is the use of the manually maintained NEBS Pegboard System, which will help distinguish the amount cash received and the amount of the check received. Another system that may be available to assist the light plant is the system that the Native Corporation uses to control cash and checks received. RUBA staff also provided a copy of the state's Model Financial Record Keeping System and will monitor and provide guidance with filing and keeping other financial documentation in order.  
RUBA Activities for the Coming Qtr:
The City of Chefornak has all of the essential capacity indicators met. They are currently looking at the cost of the washeteria project and are looking at what is needed for the project to work in the community. RUBA staff will continue work with the community and provide assistance with the upcoming washeteria project.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
25 of 27
Total Score:
51 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.
Yes 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.
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.
Yes A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
All revenues and expenses for the utility are listed in the utility budget. The administrator informed RUBA staff that there is a water treatment plant but people must self-haul from watering points. A honey-bucket system for sewage is maintained by the city. The city does provide water to the school, CE2, and the clinic. The utility has adopted a budget. It is now realistic in that it includes all revenues and expenditures. The city has adopted a budget for the utility services provided. Currently, a monthly financial statement is prepared and includes the beginning budget, monthly expenditures, year-to-date expenditures, and the balance for each category. The utility is current paying all water/wastewater electric bills through the earning of bingo. Bingo is the form of subsidy (user fees or other sources) that pays for other operating expenses.

Accounting Systems

Essential Indicators
Answer Question
Yes 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
There is a written collection policy in place. The city bills the school, clinic and CE2 on a monthly basis. All customers pay up front for their water service purchase of tokens. The administrator has changed the manual system to an automated system, saving time and and money expended previously. QuickBooks is in place and now it is easier to maintain accounts, calculating payroll, and keeping records of all transaction. The administrator is providing training to other office employees on the use of QuickBooks. With the cash receipt system, a cash exchange is done with the Native Corporation, who also sells water tokens for the city,and a customer ledger is in place for all transactions. A computer system with QuickBooks is in place to monitor cash disbursement. A customer ledger is posted on the wall with payment due dates listed for honey bucket haul. The administrator performs monthly reconciliations of all accounts. The purchasing system approval process is setup so that any purchases over $200 must be approved by the city council and any purchases less than $200 are done by the administrator. The utility keeps the financial records using QuickBooks. The utility uses Apple, Dell and Gateway computers and has currently install QuickBooks 2009 version. The city has bought two more computers with QuickBooks 2010 upgrade to incorporate with other computer system. All systems are upgraded with QuickBooks 2010. The Chart of Accounts (COA) does identify fixed assets are now posted in QuickBooks. For the billing process, the customer makes a call to find out what they owe.

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.
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
IRS and DOL deem the City of Chefornak compliant with tax issues as of June 14, 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.
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.
Yes 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 did have available job descriptions for the utility positions. The utility should periodically review position description to ensure that work performed is current. The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation. The utility maintains personnel folders containing I-9s, Job Application and Letter of Acceptance. The utility has a probation period for new hires, ranging from 90 to 180 days. The utility provides training opportunities to its staff on as needed and available basis. There are written policies for day to day management of personnel. Workers Compensation policy for the city has been purchased through Alaska Municipal League Joint Insurance Association, through July 1, 2010.

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.
Yes 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
The policy making body now has an ordinance in place that authorizes them to operate effective January 2009. The administrator is adequately trained to run the utility and is trained in maintaining the books for the utility. The administrator is also currently training a new utility clerk to help with maintaining the utility account. The operator is now Water Distribution Provisional certified and it expires December 31, 2011. He has been in the position more than ten years and knows all procedures for maintaining a water utility. The policy making body meets twice a month for city business and every other month with the Native Corporation and Tribal Council, costing the city $90 per council member for each meeting. The utility complies with the open meetings act of all meetings. The meeting minutes are consistent with meeting minutes guidelines.

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.
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.
Yes 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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
Because the system is 30 years old and there is no relevant maintenance plan, the operators are using checklists as a maintenance plan to maintain their system. Monthly operation and maintenance reports for the utility operator are being completed, and routine spot checks of the facilities are completed by the manager to see that the maintenance items are being completed. Regular safety meetings are being done and documented. Last meeting was February 2010. As of February 2010, the utility is on the SNC list for failure to submit water sampling. There are lists for inventory and critical spare parts available.