Quarterly Report: 2014, January - March (Q3), Coffman Cove

Community:
Coffman Cove 
Staff:
Lynn Kenealy  
DCRA Regional Office:
Juneau regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
10/25/2012 
Entity:
City of Coffman Cove 
Population:
163 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
12/14/2011 
Exp Date:
10/25/2014 
Last Updated:
4/17/2014 
Community Sanitation Overview:
Coffman Cove is located on the northeast coast of Prince of Wales Island 42 miles southwest of Wrangell. The City of Coffman Cove operates a Class 2 water treatment system and a wastewater collection system. The city also provides a solid waste collection service and dumps it at a landfill facility 35 miles away in Thorne Bay. Electricity for the community is provided by the Alaska Power and Telephone Company. 
RUBA Status & Activities This Qtr:
This quarter, RUBA staff visited the City of Coffman Cove to conduct the RUBA assessment of management indicators. This assessment is currently in draft stage. During the visit, RUBA staff discussed revisions to the city's personnel manual and the municipal code. Additionally, RUBA staff discussed Continued Education Unit (CEU) requirements for the operator’s re-certification, and upgrades to the system. RUBA staff met with available city council members who discussed the Open Meetings Act, executive sessions, council conduct, and conflict of interest. Also this quarter, RUBA staff provided assistance addressing several matters including an excise tax, residency of council members, executive session, vice mayor appointment, records retention, procurement, records requests, and personnel and timecard requirements. The city administrator and assistant city clerk both attended the RUBA Financial Management fur Rural Utilities training in Juneau in January. Finally, RUBA staff attended a Sanitation Deficiency Systems meeting, in which Coffman Cove was discussed. The community is seeking grant funding to assess possible extensions of the municipal wastewater system, and is finishing out two other grants for a raw storage tank and for lift station pumps and valves. There were also discussions of water rights issues; at the meeting the city is at times utilizing more water than is allowed in the current water rights agreement with Department of Natural Resources (DNR). 
RUBA Activities for the Coming Qtr:
In the coming quarter, RUBA staff will finish drafting the utility’s management assessment and provide it to the community for input prior to publication. RUBA staff has also been asked to provide further information regarding the Open Meetings Act and conflict of interest to the city council. RUBA staff will continue working with city staff on improvements to the personnel manual, and any other items that present.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
27 of 27
Total Score:
53 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. The FY14 budget was adopted on June 20, 2013. The budget estimates receiving the same amount in revenue for water/wastewater services as was estimated at the start of the previous fiscal year and slightly more than was actually received that year. The city anticipates spending $11,000 more in FY14 than it did in FY13 to provide these services, an increase mainly due to additional wastewater tank pumping costs. Anticipated utility expenses are slightly higher than the amount the city conservatively plans to collect in associated user fees; the remaining costs are met with Community Revenue Sharing funds. It should be noted that in the previous fiscal year, the city’s actual revenues generated by user fees exceeded expenses. The city contracts with Alaska Business Partners, a Ketchikan-based bookkeeping service, to have monthly financial reports prepared for the city council, which serves as the utility’s governing body. These reports include a balance sheet and a profit and loss statement which compares budgeted and actual values. The report also shows the gross profits, expenses, and net income of the city's utility enterprises for the relevant time period. A thorough, written manager's financial report is also provided to the council at each regular meeting. It explains income and expense amounts and narrates potential cost-saving financial strategies. The financial reports show that year-to-date revenues are at those budgeted and that year-to-date expenditures are below the amount budgeted for the relevant portion of the fiscal year. A profit and loss report for the period July 1 to February 5, 2014 identifies that 83.94 percent of projected income has been received, ahead of budget expectations for this point in the fiscal year. This may warrant a budget amendment ordinance, which is currently being drafted and considered by the council. With just over half of FY14 completed, 62.48 percent of budgeted expenditures have been spent. This is approximately on par with budget expectations, but may warrant some amendments, specifically to the budget category "Operating expense", which is running slightly above the amount budgeted for this period in the fiscal year. Alaska Power and Telephone (AP&T) provides electrical service to the City of Coffman Cove. RUBA staff reviewed five service statements and found that the utility is current in paying all of its electric bills to AP&T and that Power Cost Equalization (PCE) credits are applied as appropriate.

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
Bills for city services, including sanitation utility services, are mailed to customers the first week of each month on a postcard that includes the customer's name and address, the amount due for water and wastewater services, previous statement balances, late fees, net balances, and the due date. While the postcard billings have saved the city significant money on postage, standard statements enclosed in an envelope are provided to any customers with privacy concerns upon request. Customers have until the 25th day of each month to submit their payments by mail, in person during the city's business hours, by credit card, or through a regularly occurring 'auto-pay' charge system. If a customer does not pay within 45 days, their account is considered delinquent and the city actively enforces its adopted collections policy. That policy is outlined in Title VII of the Coffman Cove Municipal Code. The policy requires a late payment fee be assessed, disconnection, reconnection fees, and denial of other city services such as harbor, internet, and garbage service. Delinquent accounts may also be referred to a third-party collection agency. Customers may, however, appeal any decision resulting in these actions to the city council at its next regular meeting. QuickBooks accounting software is used to track accounts receivable and accounts payable, and to track payroll processes. Customers are offered a written receipt of their service payment from a receipt book that records the customer's name and address, the date, the payment amount, what the payment was for, the form of payment, and who the payment was received by. All payments are then recorded in a detailed logbook and the QuickBooks system which can clearly identify customers who are current in their payments and those who are 30 days, 60 days, or 90 days past due. The city's cash disbursement system consists of a logical chart of accounts, a purchase order process, and a check register. Carbon copy purchase orders are individually numbered, show how money will be spent, and include space for an authorizing signature. Section 4.04.050 of the city's code of ordinances only mandates that purchases of supplies, materials, equipment, or contractual services costing more than $2,000 require prior approval of the city council. However, purchase orders are completed by utility staff prior to every purchase and all purchases are closely monitored by the city administrator.

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 City of Coffman Cove contracts with Alaska Business Partners in Ketchikan who accurately calculates, tracks, and reports the city's payroll tax liabilities. The IRS Taxpayer Advocacy Office confirmed on March 17, 2014 that Coffman Cove is current in its filings and that the IRS has no liens against the city. The Alaska Department of Labor and Workforce Development confirmed on March 4, 2014 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
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
All city employees are covered by an Alaska Municipal League Joint Insurance Association (AMLJIA) workers’ compensation insurance policy. The policy covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage is posted at the city office. RUBA staff verified that the city is current in its payments to AMLJIA and that adequate funds have been allocated in the annual budget for payments over the remainder of the fiscal year. The City of Coffman Cove implements a comprehensive personnel management system with the mayor, vice mayor, and city council continually reviewing personnel matters. A personnel handbook adopted by resolution on March 15, 2002 outlines the hiring and evaluation process, conditions of employment, a probationary period, disciplinary and grievance procedures, and general workplace expectations. An outdated and unenforced personnel section outlined in their municipal code was formally repealed in August 2012 by ordinance. The same ordinance also permitted the city council to formally adopt and amend its separate personnel handbook by resolution. All city staff, including the water and wastewater operator, have formal written job descriptions that explain their position's purpose, duties, supervisor, and required skills and qualifications. The descriptions also list whether the position is full-time or part-time, whether travel is required, and the position's salary range. Each employee undergoes an annual performance review which evaluates how well the employee is meeting their position's duties on a one to five scale. The review also considers job knowledge, the employee's representation of the city, communication skills, and goals as agreed upon by the employee and city administrator. Signed copies of the job descriptions and performance reviews are filed in individual personnel files. The files also contain W-4 forms, Employment Eligibility Verification Form I-9, copies of relevant certifications, and letters of acceptance. The city continues to budget for and provide training opportunities to its staff when available. City staff have successfully completed several of the 32-hour RUBA utility management trainings, including Financial in January 2014, Planning in December 2013, Personnel in January 2013, Elected Officials in October 2012, and Utility Clerks in September 2012 and April 2012. Utility staff from Coffman Cove also attended a RUBA-sponsored QuickBooks class in February 2013. Further, RUBA staff has provided on-site training to the city council and staff as requested.

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 Coffman Cove owns and operates the community's sanitation systems. Ordinances giving the city the necessary operational and regulatory authority have been adopted and properly codified in Title VII of the local municipal code, which is readily available in print at the city office and online at the city's website. The seven-member city council is the city's governing authority and the utility's policy-making body. The council holds regular meetings as required by Alaska Statutes Title 29 on the third Thursday of each month. To comply with Alaska's Open Meetings Act, the city consistently posts notice of each meeting at least five days in advance at the city hall, the library, the post office, a local liquor store, and a local grocery store. Each notice indicates the type of meeting to be held, as well as its location, date, and time. The city council is active in policy-making for the utility, as evidenced in the six months of council meeting minutes reviewed by RUBA staff. The meetings minutes show that council is provided with written financial narratives, briefings on ongoing utility upgrade projects, staffing issues, training requests, and concerns of the public. The minutes also show that municipal acts, including resolutions and budget amendments, are adopted as necessary and in accordance with standard rules of parliamentary procedure. The city council has given itself the authority to amend its utility fee schedule and enter into billing arrangements and repayment plans with utility customers by resolution. All additional rules and regulations for water and wastewater service are outlined in Chapter 7.04 of the municipal code. The chapter's provisions are properly enforced; customers are assessed late fees, issued delinquency notices, and disconnected from service as required. The city administrator serves as utility manager. The administrator has received formal training from RUBA staff in the roles and responsibilities of public officials, ordinances and resolutions, budgeting, rate setting, Title 29 of state statute, the local municipal code, strategies for effective meetings, the Alaska Open Meetings Act, executive sessions, ex parte contact, and conflict of interest. From years of operating her own small business, the city administrator also brings critical financial management experience to the city. She and other city officials actively seek management assistance from RUBA staff when necessary and attend RUBA management trainings when available, as discussed in the Personnel System section of this report. Again as noted previously, the city utilizes the professional services of Alaska Business Partners in Ketchikan for most of its financial, accounting, tax-payment, and bookkeeping needs. Staff at Alaska Business Partners are willing and able to provide city officials with the financial resources and information that they need to effectively manage the community's utilities. Administrative staff are cross-trained whenever possible. The State of Alaska's Division of Water has rated Coffman Cove's water treatment system at the Class 2 level based on the plant's various components. Its primary operator is fully certified with a Level 2 endorsement that expires on December 31, 2015; the operator has already obtained the requisite number of Continued Education Units (CEUs)to renew certification. The city council has approved and formally adopted an organizational chart that reflects the current staff structure of the city.

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.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
As noted in the Organizational Management section of this report, the primary utility operator is adequately certified at the appropriate classification level for the city's water treatment and water distribution systems and continues to meet his CEU requirements on time. His current water treatment and water distribution certificates expire December 31, 2015. The primary operator is assisted by three uncertified, yet adequately trained, back-up operators. All utility staff follow a safety manual and preventative maintenance plan specific to Coffman Cove's equipment and participate in regular safety meetings. The meetings are documented on forms provided by AMLJIA that list the date of the meeting, the training topics discussed, the titles of any materials issued, and the names of employees present. Resources explaining general safety practices such as lifting and common workplace hazards are also available. Coffman Cove's sanitation facilities have not suffered any major outages due to management issues and continue to operate at the proposed level of service. City officials consult with the primary operator regularly and written utility status reports are given to the council each month. The utility now has an inventory control list, as well as a list of identifiable critical spare parts that includes the quantity on hand and quantity needed. It also includes a description of the parts as needed. Village Safe Water (VSW) staff recently conducted a site visit to observe the progress of the replacement of a leaky valve vault at a lift station in the community and installation of a new control panel. Original plans for project work needed to be changed to accommodate certain circumstances, but those changes were approved and the project is on track. The utility is not listed on the January 2014 Significant Non-Complier (SNC) list.