Quarterly Report: 2014, July - September (Q1), Gambell

Community:
Gambell 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Gambell 
Population:
677  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/10/2013 
Community Sanitation Overview:
The City of Gambell has operated a piped water and wastewater system since the 1990s. All water and wastewater piping is underground. The water source is a shallow aquifer at the base of the Sevuokuk Mountain. In the last several years, the system has undergone several upgrades, including construction of a 1.3 million-gallon water storage tank, upgrading lift stations, and installation of a Greensand filtration system. The wastewater system is a gravity collection system with three lift stations and a lagoon for wastewater treatment. One hundred twenty-one residential homes and thirteen public and commercial buildings are now connected to the piped water and wastewater system. Forty three homes in the original town site are not connected to the piped system and their residents haul water and use honeybuckets.  
RUBA Status & Activities This Qtr:
On August 6-8, 2013, Nome RUBA staff traveled to the City of Gambell to perform an on-site RUBA assessment of management capacity indicators. RUBA staff met with the mayor, utility clerk, and water and wastewater operators. Due to several ongoing projects at the water and wastewater facilities, utility staff was not able to assist RUBA staff in completing the assessment. RUBA staff learned that the utility is currently not using the QuickBooks file created by the RUBA QuickBooks contractor in 2012, as part of the on-site installation and training project, due to a computer crash the data in the updated QuickBooks file was lost. The utility is currently using the manual accounting system that has been maintained for many years. RUBA staff toured the water plant, water tanks, and the premises of the water and wastewater facility. Equipment, tools and trash were scattered in the inside and outside the facility. The water plant was cluttered, spare parts and working tools were disorganized. RUBA staff also observed water and wastewater equipment and parts outside the facility that have not been tented to. The utility has been struggling with regulatory reporting (such as monthly testing of water) and recording of the mandatory tasks performed (daily, weekly, monthly and annually). Throughout the week, the Village Safe Water engineer, Remote Maintenance Workers, and a Maintenance Specialist BFC foreman were inspecting and training two water operators in the use of the new Greensand filters, filter backwashing, coagulation, corrosion and oxidation control. An agreement was signed between the City of Gambell and Village Safe Water to supervise the field construction process of the 2013 Water Sewer Projects. The 2013 projects consist of constructing one water and wastewater service line to new house, completion of water plant punch list for the Water Treatment Plant Improvements Design by CRW Engineers, and documentation and inspection of the water tank insulation repair work to be completed by a private contractor. On September 25, Nome RUBA staff emailed and faxed a letter to the City of Gambell reminding them to submit monthly financial reports pertaining to water and wastewater, washeteria, honey bucket, landfill and other services in order for RUBA staff to update the online RUBA quarterly reports. RUBA staff also requested copies of meeting minutes of city council and/or utility boards. RUBA staff was not provided with written documentation to update the assessment. 
RUBA Activities for the Coming Qtr:
At the request of the City of Gambell, Nome RUBA staff will be available to perform an on-site RUBA assessment of management capacity indicators in the coming quarter.
Scores:
 
Essential Indicators:
14 of 26
Sustainable Indicators:
11 of 27
Total Score:
25 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.
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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The Gambell Water Treatment System adopted its FY14 budget. The utility budget was included in the overall city budget and it was submitted to the State of Alaska as required by law. The utility lists revenues of $259,747 and expenditure of $230,905 for the FY14, leaving a surplus of over $28,000. The list of items in the operating expenditures section of the budget is comprehensive and includes funds allocated towards personnel services, training, facility expenses, supplies, equipment, and parts. The expenditures do not include the fuel expense, which is a large expense. For the FY14 budget, the city council approved a subsidy of about $42,000 to pay for the utility's fuel needs. For many years, the city council has heavily subsidized the utility using the Norton Sound Economic Development Corporation Community Benefit Sharing payments. The utility has sufficient fuel to last until the next fuel delivery. The recent increase in user fees has cut the deficit by $28,000, leaving the fuel expense at around $42,000. The utility clerk has not provided monthly financial reports comparing year-to-date revenues and expenditures to those budgeted to the newly established utility board. The utility does not receive sufficient revenues from user fees to cover operating expenses and repair and replacement costs. The city council provides the utility with subsidies to assist it in difficult financial times. The year-to-date revenues are not at the level equal to or above those budgeted and the year-to-date expenditures are not at a level equal to or below those budgeted. The utility clerk, who is acting as the utility manager, does not provide the city council/utility board with the monthly manager's report.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No 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.
No A cash receipt system is in place that records incoming money and how it was spent.
No The utility has a cash disbursement system that records how money was spent.
Sustainable Indicators
Answer Question
No 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.
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
Gambell Water Treatment System's billing and collection procedures are included in the utility ordinance which was adopted in 1996. According to the utility ordinance the utility board is responsible to review the water and wastewater rates on a periodic basis and the rates should be published in a separate 'Schedule A' page. Nome RUBA staff has a copy of the utility ordinance. Recently, the city council has raised user fees for residential customers, small commercial, large commercial, and the local school as recommended. However, the city council does not follow and/or enforce the collection policy. This quarter, the utility has not send bills to customers. The utility is currently not using the QuickBooks file created by the RUBA QuickBooks contractor in 2012 due to a computer crash. The utility is currently using the manual accounting system. In 2012, the utility staff was trained by RUBA staff and the RUBA QuickBooks contractor in the use of the newly created QuickBooks file. The accounts receivable and payable were properly set up and functioning. The utility clerk was trained to write a receipt for any income received and keep a copy of every receipt in a permanent receipt book. The utility clerk was advised to enter the new data from the receipt book into the QuickBooks accounting system each Friday. The utility clerk was trained to create QuickBooks checks to make payments. The QuickBooks chart of accounts identified all asset accounts and all liability accounts, as well as fund balances. However, the utility staff does not use the cash receipt system and cash disbursement system as advised. It is unknown if the utility staff has a chart of accounts at this time. Monthly bank reconciliations have not been completed.

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
On September 30, 2013 the Internal Revenue Service (IRS) reported that Gambell Water Treatment System is not in compliance with federal employment tax filing. The utility is in complience with federal tax deposit requirements. No Notice of Federal Tax Lien against the utility has been recorded. The utility is compliant with state employment security contributions.

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.
No 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 has general liability and workers compensation coverage. The workers compensation insurance is purchased through Alaska Municipal League Joint Insurance Association (AMLJIA) and is valid until June 30, 2014. The notice of insurance was posted in plain view in the utility clerk's office. A copy of the city's personnel policy, which also applies to all utility employees is on file with RUBA staff. The utility follows the personnel policy in the day-to-day management of personnel. Job descriptions are up-to-date and outline each employee's duties. The hiring and evaluation process is described in the personnel policy. The utility maintains personnel files for all employees but does not have a Form I-9 for each employee. The city clerk reported that the city is in the process of updating all employees' files to include the I-9. The city and the utility have a probationary period for new hires that includes orientation, job-training/oversight and evaluation, which is completed after ninety days of a hire. The city and the utility provide training opportunities to staff as funds are available.

Organizational Management

Essential Indicators
Answer Question
Yes 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.
No 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.
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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
According to Title VI of the city's code of ordinances, all city-owned utility systems are the property of the City of Gambell. The code provides for a utility board. A few quarters ago a utility board was established and held a meeting. However, the utility board has not met as required. According to the utility ordinance, the board administers and enforces all rules and regulations pertaining to the utility. The board is not active in policy making and does not enforce utility policies. The utility clerk is the manager of the utility, but the manager needs training in utility management. Several meetings with representatives of the Village Safe Water Program and Alaska Department of Environmental Conservation have been held in the last several months. Both of these agencies have been closely working with the utility clerk, water operators, and members of the city council to move forward with the planned upgrades. The utility clerk received extensive training in QuickBooks Pro 2012 finance and accounting. The QuickBooks contractor trained the utility clerk in the use of all the necessary bookkeeping functions. After the training, the customers, vendors, employees, and payroll records as well as the accounts recoverable and payable, and all the necessary financial reporting were current. RUBA staff recommended the utility clerk contact the QuickBooks contractor with any question regarding finance and accounting. The city has an organizational chart that needs to be updated to reflect the current chain of command.

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.
No 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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The Gambell Water Treatment System does not have a certified water operator, but the main water operator has been actively working towards necessary certification by attending training and taking the test to receive a provisional water treatment and distribution certificate. However, the water operator will have to take several trainings to be in compliance with water and wastewater regulations for a class 1 water treatment system, class 2 distribution, and class 1 wastewater lagoon and wastewater collection system. The utility has an assistant water operator who is not certified. The utility has a preventive maintenance plan that was developed by an engineer. The operator uses checklists to verify that preventive maintenance is performed. The operator does not provide status reports on monthly operations and maintenance to the utility clerk/manager. The utility has a safety manual on file but RUBA staff is not aware of whether the new water operator attends the telephonic safety meetings provide by Alaska Municipal League Joint Insurance Association (AMLJIA). Last quarter, the system has suffered a major outage due to management issues. The shutdown of the system was for less than a week, but the shutdown was caused by lack of supervision and management. The utility is not listed in the quarterly significant non-complier list published in July 2013. The community confidence reports have been submitted to the Division of Environmental Health, Drinking Water Program. The utility has an inventory control list, but the list needs to be updated. The utility does not have a critical spare parts list on file. According to the utility operator, the utility has funds to order and replace parts and pumps when necessary.