Quarterly Report: 2012, April - June (Q4), Klawock

Community:
Klawock 
Staff:
Glen Hamburg  
DCRA Regional Office:
 
Gov't Type:
First Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Klawock 
Population:
755  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/26/2012 
Community Sanitation Overview:
The City of Klawock is located on the west coast of Prince of Wales Island, 56 air miles west of Ketchikan. Water for the community is derived from a dam on Half Mile Creek and then treated, stored in a tank, and piped throughout Klawock. The city operates a Class 2 water treatment system, Class 1 water distribution system, a Class 1 wastewater collection system, and a Class 1 wastewater treatment system. System classifications are determined by the State of Alaska's Department of Environmental Conservation, Division of Water based on the type of components found in a treatment plant and the number of connections served by water distribution and wastewater collection systems. Over 90% of homes in Klawock are fully plumbed. Most homes also have access to the piped wastewater collection service. Additionally, the city provides a refuse collection service whereby garbage is hauled to a permitted landfill shared with the City of Craig and other island residents. Power for the community is provided by the Tlingit-Haida Regional Electric Authority (THREA), which purchases electricity from Alaska Power and Telephone over the Craig-Klawock intertie. THREA also owns four standby diesel generators in Klawock. 
RUBA Status & Activities This Qtr:
On a visit to Klawock on May 22, Juneau RUBA staff reviewed recent amendments to the city's utility bill collections policy and verified that the city's adopted utility ordinances are being fully enforced. With these improvements to the city's utility management practices, the city now meets all essential indicators of the RUBA assessment for the first time. RUBA staff also worked with the community this quarter to clarify the duties and authority of the city's mayor and administrator, submit the city's FY13 Community Revenue Sharing (CRS) application, outline the requirements for filling a vacancy on the city council, provide information on council meeting public notice requirements, and verify tax filing and deposit requirements. Klawock's city administrator successfully completed the 32-hour RUBA 'Planning Management for Rural Utilities' training in Anchorage April 23-27. 
RUBA Activities for the Coming Qtr:
Klawock currently meets all of the RUBA assessment's essential indicators and nearly all of its sustainable indicators. Nonetheless, RUBA staff will continue to offer assistance to the city's utility staff to maintain the management capacity of the community's sanitation systems.
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's fiscal year runs from July 1 to June 30 and at the time of this report, the city was still operating with the FY12 budget adopted by non-code ordinance on June 8, 2011. However, an FY13 budget was also formally adopted by the city council on June 19, 2012. Both budgets list anticipated income and expenses by city department with a comparison to the previous fiscal year's actual figures. Water, wastewater, and refuse collection enterprise funds are accounted for independently with realistic projections of associated revenues and expenses listed for each utility service. FY13 expenses for water, wastewater, and refuse collection services are expected to be roughly equal to FY12 levels, with minor increases in personnel, travel, freight, and training costs. User fees cover approximately 89 percent of water and wastewater utility expenses, with the remaining costs me with a transfer from the city's general fund. Refuse collection service, however, operates at a profit with more than $47,000 transferred from user fees to the general fund. All interfund transfers are explicitly outlined in the city's budget. The city administrator delivers verbal financial reports at each regular council meeting. Revenue and expense reports and balance sheets can be prepared upon request, however written financial reports are not routinely provided automatically. The administrator chooses not to present these documents on a monthly basis due to the time necessary to prepare such reports. This problem stems from the way the chart of accounts is integrated into the accounting system. Budgets and financial reports do not follow the same format. Instead, the budget lists revenue and expenses that are unique to specific enterprise funds under the appropriate fund, while the financial report clusters similar revenues and expenses from all utilities into one overarching utilities and services fund. Even though all revenues and expenses are allocated under a certain enterprise fund, these document layout issues make creating a budget versus actual profit and loss statement difficult. The community offsets the cost of providing water, sewer, and garbage services by charging user fees. The unmetered single family water rate is $42.81 per month. The utility has several classes of commercial businesses and charges commercial water rates ranging from $39.50 to $528.96 per month, depending upon the type of business and the estimated water usage. A regressive per-gallon rate is charged for metered customers. The metered rate is $30.22 for the first 8,000 gallons, .0038 per gallon up to 100,000 gallons, and .0025 per gallon for amounts over 100,000 gallons. Wastewater rates are $46.00 for a single family residence and range from $43.69 to $450.95 for commercial business. Metered water customers are charged wastewater rates that are based on the amount of water used. These utility rates were last adjusted in 2006.

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 city's adopted utility bill collection policy is outlined in Title 10 of the Klawock Municipal Code. In accordance with the policy, the city actively pursues delinquent utility accounts with a standardized letter and door hanger notice system, shut-off warnings, and late fees. Any customer who is more than 60 days past due, at the discretion of the city, may either be turned over to collections or have their service disconnected. However, the community does not favor water service disconnection and will do so only as a last resort. The city uses Ketchikan Credit Bureau Inc. as its collections agency. In addition to the consequences found in the collections policy, the city may establish repayment plans and allow for Permanent Fund Dividend (PFD) assignments in order for customers to avoid collection actions. The utility bills customers each month. Bills typically go out on or around the 5th of each month, with payment accepted by cash, check, credit card, and credit-linked autopayment. In accordance with the terms of agreement with the city's bank, associated transaction fees are not passed on to customers who choose to pay by credit card; rather, the fees distributed amongst and aid for by all utility customers. The city uses Cougar Mountain accounting software, which is designed for nonprofit and government entities for basic general ledger fund accounting. General ledger functionality includes an unlimited number of funds, departments, or grants, as well as inter-fund transfers and fund balancing. The software allows for multiple grants with varied year ends. A bank reconciliation function is included for reconciling bank statements with actual checks and deposits. The program consists of five integrated modules: general ledger, accounts receivable, accounts payable, inventory, and order entry. The city has also purchased Cougar Mountain's payroll and purchase orders modules separately. Each module provides standard reports such as income statements, balance sheets, cash requirement, and cash flow statements that provide sufficient financial information. But, these reports are not easily customized without an additional report generating software add-on. The general ledger contains internal controls such as permission settings and audit trails. The accounts payable module issues checks, manages vendor information, and interfaces with the purchase orders and general ledger modules to enable full encumbrance accounting. The accounts receivable module maintains customer account and payment information, documents customer payments, and reports past due accounts. The accounts payable module issues checks, manages vendor information, and prints 1099 and 1096 tax forms. The payroll module automatically posts payroll expenses to the general ledger and allows direct output printing for 941, W-2, and W-3 forms and meets payroll reporting requirements for Alaska. The program maintains payroll history for five quarters to allow processing of the current year's payroll before finishing W-2s for the prior year. Cougar Mountain continues to support the software with updates and provides annual IRS Circular E updates for current tax requirements at an extra cost. The city uses a purchase order system for all purchases and maintains a cash disbursement system to track expenditures. In this system, department heads submit formal purchase order requests to the city administrator who assures that adequate funds are budgeted and are available to purchase the item. The purchase is approved if the city administrator deems it appropriate and a copy of the signed purchase order is sent to the item vendor. Vendor invoices and packing slips are then compared to the original purchase order, a payment is assigned to the appropriate account coding, and a dual signature check is issued.

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 Internal Revenue Service's taxpayer Advocacy Office confirmed that Klawock is current in its federal tax reports and filings and that the IRS has no liens against the city as of May 25, 2012. The Alaska Department of Labor and Workforce Development confirmed on June 12, 2012 that all state tax payments are current as well.

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.
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
Current coverage for workers compensation insurance was verified through Alaska Public Entity Insurance Company (APEI). The FY12 policy is effective from July 1, 2011 until June 30, 2012 and the FY13 policy is effective from July 1, 2012 to June 30, 2013. Both policies cover work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of policy coverage is posted in accordance with state statute in all public buildings. In addition to workers compensation insurance, the APEI municipality insurance program includes general liability, automobile, and property insurance, as well as coverage for public officials and law enforcement officers. Every employee is expected to follow the city's adopted personnel policy handbook, thought they are not required to submit a signed statement attesting that they have read and understand the handbook. The administrator admits to it being outdated and in need of review and some revising, though the city has recently contracted with a consultant to review the employee handbook and bring the existing material in line with applicable state and federal laws, particularly the federal Family Medical Leave Act. The city has job descriptions to aid in the staffing, wage and salary administration, and training for all positions. These job descriptions are up-to-date and clearly outline each employee's required duties. Personnel files are well organized and in most cases, contain all the necessary employment documents. The city uses employment offer letters that define the type of position, salary, insurance and benefit policies, the extent of the employee probationary period, and information about the City of Klawock Employee Handbook. Copies of these letters and all other files connected with an employee are considered strictly confidential and are stored in a locked filing cabinet in the city clerk's office. To limit access, the key to the filing cabinet is kept in the office safe. The city clerk has reported that access to the personnel records are limited to only the employee, to those who have a job-related 'need to know,' and to those who have been authorized by the employee to see the file. A probationary period for new employees lasts up to 90 days from the date of hire. During this probationary period, an employee may be terminated without advance notice and without cause. Upon satisfactory completion of the probationary period, the employee becomes a permanent employee. The probationary period also includes workplace orientation, job training, oversight, and performance evaluations.

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 of Klawock owns and operates the water, wastewater, and solid waste utilities. Title 10, Chapter 1 of the Klawock Municipal Code establishes the policies and procedures for the operation, regulation, and maintenance of the utility facilities. The city council is the formal governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utilities. The council meets the first Tuesday of each month and holds additional work sessions when necessary. By city ordinance, the mayor is the chief administrative officer of the city; the mayor has, however, delegated the majority of the administrative officer functions and authority to the city administrator. The city administrator, under the direction of the mayor and council, performs administrative duties, supervises administrative staff, and is responsible for managing daily operations. In addition to these duties, the administrator serves as the city accountant, is responsible for maintenance of the books, and is the city's utility manager. The current city administrator has a bachelors degree in business administration, has successfully completed both the 32-hour RUBA 'Financial Management for Rural Utilities' and 'Planning Management for Rural Utilities' trainings, and regularly participates in statewide and regional sanitation utility conferences. The administrator does share some of his utility management duties with the public works director. The public works director's duties include supervision of operational utility staff and the daily operations and maintenance of all sanitary facilities including water, sewage, garbage collection, and landfill services. The city clerk, who also serves as the utility clerk, completed the 32-hour RUBA 'Clerks Management for Rural Utilities' course, attends statewide municipal clerks conferences, and has received formal notary public training. The city has an organizational chart which details the levels of authority between supervisors and subordinate employees in all city departments, including the public works (utility) department.

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.
Yes The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The city encourages professional development training and the utility operators are adequately trained given the classification of Klawock's sanitation facilities. There are three operators responsible for operating and maintaining these sanitary systems and possess the following certifications: Bennett Charles: Water Treatment Level 2 Exp. 12/31/2014 Water Distribution Level 1 Exp. 12/31/2014 Sampson Nickerson: Wastewater Treatment Level 2 Exp. 12/31/2014 Water Distribution 1 Exp. 12/31/2014 Wastewater Treatment Level 2 Exp. 12/31/2012 Wastewater Collection Level 1 Exp. 12/31/2013 Harry Jackson: Water Treatment Level 1 Exp. 12/31/2013 Water Distribution Level 1 Exp. 12/31/2013 Wastewater Treatment 1 Exp. 12/31/2012 Wastewater Collection 1 Exp. 12/31/2012 A comprehensive outline of preventative maintenance duties are included in the job descriptions of utility staff. The department also utilizes a whiteboard system that charts out maintenance schedules and duties. Formal safety meetings are held at least once per month between utility staff and supervisors and are fully documented in meeting minutes that record discussion topics, actions taken, topics for future meetings, employees in attendance, and the time of the meeting. A review of three months of those safety meeting minutes shows that a wide range of important workplace safety issues are reviewed on a regular basis. The Klawock Public Water System is not listed on the most recent (October 2011) Environmental Protection Agency Significant Non-Compliance List and the utility properly distributes its consumer confidence reports (CCR) to customers with all the information required by the Safe Drinking Water Act. There has been no interruption of service related to management issues and the utility continues to operate at the proposed level of service. The utility department uses a rudimentary inventory control list to track equipment usage, but is in the process of developing a more formal system.