Quarterly Report: 2014, April - June (Q4), Port Alexander

Community:
Port Alexander 
Staff:
Ryan Wilson  
DCRA Regional Office:
Juneau regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Port Alexander 
Population:
66 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
5/2/2012 
Exp Date:
 
Last Updated:
6/27/2014 
Community Sanitation Overview:
The population of the City of Port Alexander fluctuates depending on the season. It is estimated that the average population is approximately 56 people. The City of Port Alexander operates and manages the community water utility (Public Water System Number: 130156). Certified by Regulatory Commission of Alaska (RCA), Certificate Number 6066. The city's water utility has 53 active hookups. There are some residents who do not wish to pay for or receive water through the city's water utility. The utility is currently expecting to have approximately 45 active hook-ups after disconnecting these residents. Wastewater services are not provided by the city. Each individual home provides their own wastewater system of varying sorts, including septic tanks, drainage fields, and out-falls. 
RUBA Status & Activities This Qtr:
In the most recent quarter, RUBA staff had limited contact with the City of Port Alexander. In May, RUBA staff notified the community about their Community Revenue Sharing (CRS) application, and provided instructions and assistance to the community in their efforts to submit the appropriate documents for CRS. In June, RUBA staff provided the Consumer Confidence Report (CCR) data information and the IWriter link to city staff, and encouraged the the staff to complete and distribute the CCR by the July 1st deadline. RUBA staff made several attempts to obtain a federal tax authorization form from the City of Port Alexander to verify tax compliance, but was unable to obtain the form. This may be due to the local fishing season and limited working hours of the city government staff.  
RUBA Activities for the Coming Qtr:
In the proceeding quarter, RUBA staff will work to improve the working relationship with City of Port Alexander staff. Port Alexander is due for a new RUBA assessment and RUBA staff is committed to working with the City of Port Alexander to arrange an on-site visit for the new assessment, but has had limited success contacting city officials thus far. RUBA staff will continue to provide assistance as requested.
Scores:
 
Essential Indicators:
23 of 26
Sustainable Indicators:
22 of 27
Total Score:
45 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 FY 15 budget, projected revenues and expenses reflect a balanced city budget. The budget includes sections such as locally generated revenues, grant revenues, and other outside revenues such as state revenue sharing funds. It includes expenditure sections for capital projects, administration, insurance, renovation and maintenance of city property, and a section regarding city utilities. However, there are some missing line items, and items of concern for the FY15 budget expenditures, most notably is the lack of an electric line item and a $5,000 reduction in fuel costs. The city utilities are clearly separated within the city's overall budget, but utility expenses and income are not compared in a separate enterprise budget. Thus it may not be clear to the utility's governing body upon review how exactly the city is balancing the utility's budget. The city projects a revenue ($6,300) far less, than projected expenses of the water utility ($43,950). The utility is not drawing enough revenue through user-fees to cover operating expenses, such as parts, chemicals, maintenance, labor, training, and testing. However, the city has successfully subsidized the utility with income from state revenue sharing programs. The utility has an informal 10-year plan for water subsidies and changes in the event of a reduction or loss of community revenue sharing program funding, though they have not formalized this plan. The utility charges a flat rate to all customers (both commercial and residential) of $100 per year. The utility has been charging this rate since 2007; previously the service was free. The budget reflects sufficient projected funding of repair and replacement costs for the utility, and the city describes themselves as always over-budgeting in most areas as a precaution. Indeed, the FY15 budget makes comparisons between the previous year's actual expenses and the coming year's projections, which are reflected in the utility estimates, slightly more money for repair and maintenance costs than were expended in the previous year, but a considerable less amount of money for fuel. The city reports they budget for utilities based on their 'most expensive year'. The city clerk, who also functions as the utility's clerk, provides monthly profit and loss year-to-date reports for the city council prior to every meeting. The expenditures and revenues are reflected in the monthly financial statements and compared to the budget. Utility staff report that a manager's report is provided by the city clerk to the mayor prior to every council meeting verbally and that this is documented in the city council meeting minutes. As of February, 2014, the utility had collected $400 more than the budgeted amount. As the utility charges customers once per year, this will likely be the full amount collected for FY14. The budget shows a general increase in expenditures/revenues from FY14 to FY15. The City Of Port Alexander has submitted documentation showing budget amendments are completed and adopted as necessary. The utility's power is provided on-site by diesel fuel generators. The community receives fuel on a regular basis by either a commercial provider or the Coast Guard. Individuals throughout the city, including the city and utility, purchase the fuel at point of shipment. The city and utility have not had any fuel shortages. When the commercial provider has been unable to provide a shipment, the Coast Guard has stepped in to provide the service. Shipments are sometimes delayed by weather, which has caused shortages for some individuals in the city. There is no bulk-fuel storage option, nor any local fuel retailers.

Accounting Systems

Essential Indicators
Answer Question
No 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
Chapter 9.02 of the City of Port Alexander's code of ordinances addresses public services and facilities. This involves multiple sections and sub-sections, including information regarding rates, disconnection, billing, and payments. Section 09.02.10 specifies that utility rates will be established in a separate document titled 'Schedule A', to be revised and approved by the Port Alexander City Council on a periodic basis. The current billing rate is a flat rate of $100 per year for both commercial and residential customers. Section 09.02.13(e) defines a schedule of billing, due dates, delinquency notices, disconnection notices, and date of disconnection. The utility bills customers yearly on December 31. As the utility had only been collecting fees since 2007, they have not yet followed their collection policy regarding disconnecting service to delinquent clients. However, city staff reports that they intend to begin putting the policy into effect this fiscal year. There are currently 53 active hookups. It is reported by city staff that eight of these hook-ups do not wish to receive and pay for city utilities. Therefore, these eight will be disconnected shortly. Once disconnections have begun, reflecting the utility's collection policy, this essential indicator will be met. RUBA staff was unable to confirm if these actions took place this quarter. The city clerk, who also functions as the utility clerk, uses QuickBooks to track accounts receivable, accounts payable, payroll, taxes, and cash disbursement. The city provided a QuickBooks-generated chart of accounts, separated into bank accounts, accounts receivable, other current assets, accounts payable, other current liabilities, equity, income, expense, and other income account types. The city utilizes an open invoice system to track accounts receivable and to track past due accounts and amounts, which includes an aging component in order to track delinquent accounts. The city and utility clerk provided a reconciliation summary, detailing balances and transactions, and reconciling the city's QuickBooks file with the bank's record of transactions. The clerk reconciles these accounts at least monthly. The city and utility clerk also provided evidence of a purchase order process, including a specific purchase order form, to be assigned a purchase order number and approved by the mayor. If the mayor is not available, the mayor pro-tem may approve purchase orders. City and utility staff may not purchase without prior approval.

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
The city was granted tax clearance from the State of Alaska on May 30, 2014. RUBA staff made several attempts to obtain a federal tax authorization form/signature. Authorization to check federal taxes were not obtained this quarter. There are no liens against the city at present. The utility calculates its tax payments using the QuickBooks accounting program.

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.
No The utility has adequate written job descriptions for all positions.
No 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
A copy of the utility's Employers' Notice of Insurance form was observed to be posted in multiple locations in the city, including in the city office, the utility/fire shed, the entry to Bear Hall (functionally the city hall), and the water treatment plant. The city and utility receive their insurance from Alaska Municipal League Joint Insurance Association, Inc. (AMLJIA). The insurance covers job-connected injuries, illnesses or death as provided by the Alaska Workers' Compensation Act, and was current and compliant as of June 24, 2014. AMLJIA also provides insurance coverage for risk property, earthquake, employers' liability, flood, and general liability, and a certificate of coverage is posted in public locations in Port Alexander. Title 7 of the city's code of ordinances outlines the utility's personnel policy. The policy addresses hiring, conditions of employment, travel and pay allowances, suspension, demotion, dismissal, maternity/paternity leave, leaves of absence, and grievances. The city's lawyer maintains a copy of the personnel policy, and any changes made are submitted to the city's lawyer for approval. The utility does not currently have written job descriptions for each position, though there is an organizational chart including all employees. The city's organizational chart reflects supervisory authority, chain of command, and management. The city has a written personnel evaluation process, though this is not tied to the job description, and the city is not currently following the evaluation process for all employees. Each employee has a personnel file including an I-9, a job application, and a W4. However, the city is not consistently using or filing a letter of acceptance for each employee. As evidence of hiring and understanding of the terms of employment, the mayor signs the job application and places this in the employee's personnel file. While the utility does have a probationary period and job training, these tools are not laid out specifically for the employee in a job description or letter of acceptance, thus risking inconsistency. Each department does have a manual which describes the responsibilities of the position. The utility provides training opportunities for staff, with the approval of the city council. The city clerk was recently approved to attend a RUBA Clerk's Management for Rural Utilities training in Juneau, and there is money allocated in the budget for the water operator to complete Continuing Educational Units, required to maintain certification.

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 Port Alexander code of ordinances addresses entity and ownership as well as authority to operate in chapter 09.02. Ownership and operation of the utility is designated to the City of Port Alexander, and management is designated to the governing body, which is the city council. Management of the utility is designated to the mayor. Management related issues are addressed by the mayor and policy changes are addressed in city council meetings. This chain of command is also established in the city's organizational chart, which establishes the mayor as manager of the utility, and supervisor of both the water operator and backup operator. The water operator provides weekly verbal reports to the mayor. The utility manager has hands-on experience working with the city's water utility. The manager has served on-and-off in the capacity of mayor and utility manager for the past 20 years. There is additionally one council member who also has hands-on experience working with the city's water utility. These two individuals can and have served as back-up for the water operator when needed. The primary water operator is certified at Water Treatment Level 1, the certification was renewed in April of 2014. The utility previously had a back-up water operator who was certified for Small Water Systems, Treated and up to date on CEU requirements. However, this individual has since left the community. To the best of our knowledge, the utility is currently in the process of hiring a replacement. The utility's bookkeeper is also the city and utility's clerk. This individual has experience and training in bookkeeping and clerk responsibilities, including five years of experience in the position. The bookkeeper's experience and knowledge of the system are reflected in the organized and thorough manner in which the utility's QuickBooks files and related documents are kept up to date and accurate. Budgeting for the water utility is based on the utility's most expensive year, in order to ensure that the utility will have sufficient funding to remain in operation. The city council meets regularly as per the Port Alexander code of ordinances Section 02.03.02. This stipulates that the council meet on the first Monday of every month at 7:00pm June through August, and 2:00pm September through May; at the city building (Bear Hall). The city also follows the Open Meeting Act for all meetings, as specified in their ordinances Section 02.02.04, wherein reasonable public notice is to be given for all meetings, including time and place of the meeting. There is no specification as to number of notices to be posted or location of notices, though the clerk reports posting in at least 3 public locations.

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.
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.
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 primary water operator is Water Treatment Level 1 certified and is currently working on meeting the CEU requirements. The utility is in the process of hiring a new backup operator, and intends to support this individual to obtain water operator certification. The utility's manager, as well as another city council member, are both experienced and knowledgeable with regard to the water utility operations, and can serve as backup in the interim. These individuals are not currently certified water operators. The primary water operator provides weekly verbal reports to the utility manager. The manager does daily spot checks of the water facilities on a regular basis, including looking over paperwork and the supply needs of all utility operations, and assessing for safety. The utility has a maintenance manual, which includes a list of necessary checks, job description, a weekly checklist, a monthly checklist, and a seasonal checklist. During spot checks and verbal reports, the manager and water operator are undertaking an informal safety meeting and considering safety issues. However, there is currently no formal process therein. There is an inventory control list, but no specific critical spare parts list. Again, this process is being undertaken informally between the water operator and the manager. Formalizing these procedures has been recommended. The water operator and the utility clerk complete and distribute the Consumer Confidence Report as required. The Port Alexander water utility was taken off of the Significant Non-Complier list as of January, 2013, and remains off.