Quarterly Report: 2012, October - December (Q2), 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:
681  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
1/31/2012 
Community Sanitation Overview:
The City of Gambell has operated a piped water and wastewater system since the 1990s. The water source is a shallow aquifer at the base of the Sevuokuk Mountain. According to a report released by the WHPacific in 2011, 'the existing water treatment system uses obsolete bag filters which do not meet EPA surface water treatment standards.' In response, the Division of Water together with ANTHC under the ARRP program secured funds and began to upgrade the system in 2011. The upgrade consisted of installing a new filtration system and major water plant replacements. Other recent upgrades included, upgrades to the lift stations and construction of a 1.3 million-gallon water storage tank. 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 honey buckets.  
RUBA Status & Activities This Qtr:
This quarter, Nome RUBA staff requested numerous times monthly financial reports, collection reports, monthly regular meeting minutes of the city council and documents showing that the water and wastewater department is up-to-date paying its bills. With the exception of the meeting minutes, RUBA staff has not received any of the requested documents. Without such documents, RUBA staff is unable to confirm whether the water and wastewater department has year-to-date revenues equal to or above those budgeted or if year-to-date expenditures are equal to or below those budgeted. The regular meeting minutes indicated that the water and wastewater department has not provided the city council with such documents either. Nome RUBA staff developed a work plan to address the unmet essential indicators on the RUBA assessment. However, RUBA staff had a difficult time contacting water and wastewater staff to work out the details of the work plan. Nome RUBA staff will continue to maintain contact with utility staff in order to mitigate the problems faced by the water and wastewater department. Due to the accounting system needing a total makeover, the City of Gambell was accepted as one of the communities for QuickBooks onsite installation. Nome RUBA staff will work with the QuickBooks contractors to set up travel dates in January or February 2012.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff will continue to work with the city council to implement a work plan that would modify certain management practices that could improve the long term health and sustainability of the water utility. RUBA staff will propose actions to be taken within 90 days and six months to remedy significant problems. RUBA staff offered to be available for further visits and assistance upon request.
Scores:
 
Essential Indicators:
11 of 26
Sustainable Indicators:
15 of 27
Total Score:
26 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.
No 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's 2012 budget lists all revenues and expenditures. After the adoption of the new water and wastewater rates, the FY12 budget is balanced and realistic. The budget projects $336,538 in revenues and $336,000 in expenditures, therefore a surplus of $538. For many years, the city council has heavily subsidized the utility. The city council has used the Norton Sound Economic Development Corporation Community Benefit grant dollars to fund the utility. The city council voted to continue appropriate subsidies to the utility budget, but much less. This fiscal year budget used $80,500 to purchase fuel. The fuel order was delivered on October 6, 2011. The utility has sufficient fuel to last until the next fuel delivery. Nome RUBA staff found that the utility staff has the knowledge to create monthly financial reports comparing year-to-date revenues and expenditures to the budgeted funds. However, RUBA staff has not received monthly financial reports for the last two quarters. The regular meeting minutes for the months of October and November indicated that the utility staff did not provide the city council with such reports. Without such documents, RUBA staff is unable to confirm whether the water and wastewater department has year-to-date revenues equal to or above those budgeted or if year-to-date expenditures are equal to or below those budgeted. In the past, the utility did not set aside money for repair and replacement costs. In the fiscal year 2011, the utility had to use money from other revenues to cover the repair and replacement costs. The FY12 budget includes a line-item for repair and replacement costs. The city council has made attempts to amend the budget at the beginning of this fiscal year, however without the financial statements it is unclear if they were made.

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.
No An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
No An accounts payable system is in place.
No 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
The utility billing and collection procedures are included in the utility ordinance which was adopted in 1996. The city council reviews the utility rates on a periodic basis and the rates are published in a separate 'Schedule A' page. Nome RUBA staff has a copy of the code of ordinances. The last rate change was adopted this quarter. Due to no financial reports being received by Nome RUBA staff and/or the city council, it is not known if the utility staff bills customers on a regular basis, tracks customers and reports past due accounts and amounts to the city council, and/or whether monthly bank reconciliations are completed for all utility accounts. However, the past records showed that even when the utility billed customers on a regular basis, it struggled with collecting past due amounts. According to the May 2011 accounts receivable report, total past due accounts were of approximately $29,300 which was equal to about 15% of the total estimated yearly revenues of $195,000, based on user fees. The delinquencies range between over one year and two months on past due accounts. To address this issue, the city council voted to contract the Alaska Native Tribal Health Consortium (ANTHC) billing services for a period of one year beginning July, 2011, but many elderly in the community complained that they were not satisfied with the new service. The city council indicated that the city may opt out of the billing service before June 2012, when the yearly contract is up. In October 2011, the city council did in fact opt out of the billing service. Two quarters ago, an account receivable and payable was in place. The utility upgraded to QuickBooks Pro 2011. Before the upgrade, it used QuickBooks 2008. Staff indicated that the QuickBooks 2008 accounts may have not been properly set up. Because of improper setup, staff uses Microsoft Excel spreadsheets to keep track of accounts receivable. The Excel spreadsheets provide detailed information on current month accounts due and accounts past due. At the advice of RUBA staff, utility staff contacted the RUBA QuickBooks contractor to have utility's QuickBooks setup reviewed. The contractor advised to create a new QuickBooks company beginning July 1, 2011. Due to the accounting system needing a total makeover, the City of Gambell was accepted as one of the communities for QuickBooks onsite installation. Nome RUBA staff will work with the QuickBooks contractors to set up travel dates in January or February 2012.

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
As of December 27, 2011, the Internal Revenue Service (IRS) reported that the utility is deemed non-compliant. Utility staff uses QuickBooks Pro 2011 and Microsoft Excel spreadsheet to calculate, track, and report payroll tax liabilities. As of December 27, 2011 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 and valid until July 1, 2012. The Notice of Insurance was posted in plain view in the city office. A copy of the city's personnel policies, which applies to all city employees, is on file with RUBA staff. The utility follows the personnel policies 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 policies. The utility maintains personnel files for all employees but the utility 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 an employee on the job. 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.
Yes 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.
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
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 utility board. Utility staff reported that the utility board has not met as often as it should. In fact, there is no utility board. However, the city council has been acting as the utility board and has been involved in monitoring and managing the utility. The city council and utility staff have not enforced the policies as per the code of ordinances. The city council includes the utility in the city council meeting agendas. For instance, the city council met with RUBA staff and other agency representatives in a special meeting. The city council also had two more meetings after the August meeting and adopted new user fees. The utility does not have an adequately trained manager. Monthly management reports have not been provided to the city council or the utility board since January 2011. According to the regular meeting minutes from February and March of 2011, the only reports the council received were those provided by the water operator. Those reports presented data on the total water use, production and storage, as well as fuel use. There was no mention of the status of the operations, maintenance and/or management of the utility. 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 operator and members of the city council to move forward with the planned upgrades. The city has an organizational chart but it needs to be updated. The utility has a utility clerk, but it is not known if the utility clerk keeps track of the utility finances. The bookkeeper is a full-time employee. She has held this position for the last three years.

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 utility has a certified operator. He holds level 1 water treatment and water distribution certificates that expire on December 31, 2011, however all continuing education units have been completed and certification will be renewed. According to the ADEC website, Gambell utility is classified as a level 1 in water treatment and a level 2 in distribution. The utility has an assistant water operator. He is not certified but he has worked for the utility on and off in the past. The utility has a preventive maintenance plan that was developed by an engineer. A copy of the plan is on file with Nome RUBA staff. The operator uses checklists to verify that preventive maintenance is performed. The operator submits a written monthly Operations and Maintenance report to the manager and the city council. However, RUBA staff found that a few Operations and Maintenance reports were missing or incomplete. In addition, according to the operator, a verbal monthly Operations and Maintenance report is made to the utility manager. RUBA staff has no confirmation of whether verbal monthly Operations and Maintenance reports are made. The utility has a safety manual on file, but the operator does not participate in monthly AML/JIA safety meetings via teleconference. The water operator reported that he has safety meetings with the assistant operator and they use AML/JIA safety meetings materials. According to the October 2011 Significant Non-Compliance list (SNC), the utility meets all required regulations. This is an improvement for the utility since the last SNC list was published in April of 2011. 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 the money to order and replace parts and pumps when necessary.