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

Community:
Adak 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Adak 
Population:
326 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
7/9/2012 
Exp Date:
 
Last Updated:
12/17/2013 
Community Sanitation Overview:
The City of Adak operates and manages a piped water and wastewater system. The city council is the policy making body for the utility. The surface water is derived from Lake Bonnie Rose, which is located approximately three miles southwest of the core town site. The water utility is operated as a Class A public water system and operates under filtration avoidance; therefore, the only treatment provided is chlorination with required detention for disinfection. Water is treated, stored in four tanks totaling 1.9 million gallons of storage and piped to facilities and housing units. The wastewater treatment system discharges through a marine outfall line to Kuluk Bay. One-hundred percent of homes have complete plumbing. The city collects and deposits refuse at Husky Landfill, the municipal landfill, which is a permitted class III landfill. Bulk fuel is provided by the Adak Petroleum (a subsidiary of the Aleut Corporation), which maintains nine underground tanks with a total capacity of approximately 18 million gallons of marine diesel, gasoline, and jet fuel. Electricity is provided, via diesel generation, by TDX Adak Generating. A feasibility study to provide recommendations for water and wastewater utility downsizing, upgrading, and future utility project planning for the City of Adak was completed in 2004 with two updates, the most recent being in 2011 with the Alaska Department of Environmental Conservation: Village Safe Water. The study was contracted to the Anchorage based Bristol Environmental and Engineering Services Corporation. Although the water treatment plant is operating and provides adequate potable water, the City of Adak is attempting to address numerous water and wastewater utility concerns including an aging infrastructure, chronic line loss, and maintaining a water/wastewater utility designed for a large user base. The infrastructure was originally constructed for a military installation with a population of 6,000 that dropped dramatically after the closure of the military base.  
RUBA Status & Activities This Qtr:
Newly-assigned RUBA staff began working with the community on December 2. This RUBA staff worked in the following weeks to ensure that all essential and sustainable indicators continue to be satisfied by verifying that the city has made all required state and federal tax payments and reviewing copies meeting minutes, adopted ordinances, and monthly financial reports submitted to the city council. RUBA staff also spoke with the city manager in December and discussed the personnel policies now separated from the city’s municipal code, the city’s processes for codifying ordinances, and the possibility of using the Division’s Water Rate Calculator Guidebook to determine sustainable electricity rates. Further, RUBA staff offered to provide any necessary training related to utility management to city staff and officials. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue to offer training assistance to the community, verify that essential and sustainable indicators are met, and advise how to use the Water Rate Calculator Guidebook to figure electricity rates which impact the cost of sanitation utility operations.
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
The City of Adak adopted its FY14 budget by non-code ordinance on June 2, 2013. The utility portion of the budget anticipates $123,510 in revenues and $122,687 in expenses for the year. Transfers from the solid waste, General Funds, and enterprise funds are listed within the budgets as subsidies to the water/wastewater utility. Utility bills from TDX Adak show the city is current with power utility bills. The city receives fuel from the Aleut Enterprise for public facilities on an as needed basis. There is a Water/Wastewater Replacement line item in the Maintenance Reserves in the amount of $5,000. The manager provides financial information to the council at council meetings and budget amendments are done as necessary, as evidenced by budget amendments adopted on June 17 and 26, 2013.

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
The collection policy is outlined in Chapter 4.11 of the City of Adak Code of Ordinances. Water, wastewater, and garbage bills are generated and sent to utility customers at the end of each month. The city utilizes QuickBooks for the accounts payable, accounts receivable and payroll entries. The cash disbursement and cash receipt system is also entered in QuickBooks and a manual receipt is issued upon payment received. The city also has an accounting firm contracted to handle all payroll tax liabilities along with the QuickBooks entries. The account listing generated from QuickBooks shows all income, expenses, liabilities, assets, accounts receivable/payable, and bank accounts. Monthly bank reconciliations are completed using QuickBooks. There is a purchasing policy in the City of Adak Code of Ordinances, Chapter 4.05.

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
The IRS Taxpayer Advocacy Office confirmed on December 12, 2013 that the City of Adak was in compliance with federal employment tax filing and deposit requirements and that there are not recorded notices of federal tax liens against the city. The State of Alaska's Department of Labor and Workforce Development, Employment Security Divisions confirmed on December 17 that the city was in compliance with state tax filing and deposits due to that date. The city is not listed in the September-October 2013 Lien Watch.

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 City of Adak has a valid workers' compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA) current as of December 17, 2013. Proof of coverage is posted as required. The city's personnel policies have been removed from the municipal code and included in a separate personnel handbook adopted by reference. The city manager has the authority to appoint, supervise, and remove employees with council approval. The manager has all employee folders with I-9s, applications and letters of acceptance filed in a fireproof locked cabinet within the city office. Training opportunities are offered to employees, but the cost of travel to and from the remote community limits those opportunities.

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 city owns and operates the community's sanitation utilities, which are governed Title 2, Chapter 25 of the Adak Code of Ordinances. The council directs employees to enforce applicable policies and ordinances. The utility manager is the city manager. The city has a public works foreman that oversees the water operator. The public works staff (water operator) updates the city manager almost daily. The operator is certified in small water systems treated due to expire on December 31, 2013. The council meets the first and third Wednesday of each month and posts meeting notices for the public. A review of council meeting minutes shows that the utility’s governing body is actively involved in monitoring utility-related issues.

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.
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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The water operator is certified in Small Water Systems Treated, and his certification is due to expire on December 31, 2013. No major incidents have occurred with the utility. There is, however, possible line loss as there are areas within the service area that have connections to vacant and unusable housing. The public works staff (the water operator) updates the city manager almost daily on utility-related issues. The water system is not on the April 2013 SNC list. The city manager is working on finalizing a critical spare parts and inventory lists as these are in draft form. The US Navy, which once had a base on the island, left behind an excess amount of parts; however, these are currently not organized and need to be inventoried.