Quarterly Report: 2014, January - March (Q3), Hughes

Community:
Hughes 
Staff:
Jeffrey Congdon  
DCRA Regional Office:
Fairbanks regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Hughes 
Population:
88 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
7/26/2013 
Exp Date:
 
Last Updated:
4/6/2014 
Community Sanitation Overview:
Hughes has completed phase II of a multiple phased construction project to provide piped water and wastewater to the community. Phase III, upgrades to the water treatment facility, was scheduled for construction in the summer of 2013, however a devastating flood in the community of Galena redirected supplies and ANTHC personnel. Phase III of the Hughes water and wastewater upgrade, with upgrades to the water treatment facility is now scheduled for construction in the summer of 2014. 24 occupied homes, plus the school, teacher's houses, the clinic and the city/tribal offices have piped water and wastewater. The majority of homes are hooked up to piped water and wastewater. There are 6 occupied homes using outhouses and hauling water from the watering point. Electricity is provided by Hughes Power and Light. There is one school in the community, attended by approximately 14 students. A local clinic is located in Hughes, tended by a health aide. 
RUBA Status & Activities This Qtr:
Hughes' city administrator attended a RUBA Planning Management course in Anchorage in February. RUBA staff continued work on updating Hughes ordinances for the municipality. Hughes personnel let RUBA Staff know that financial reports should be forthcoming around April 20. Municipal staff is currently (and at the time financial reports were requested) outside of Hughes  
RUBA Activities for the Coming Qtr:
RUBA staff anticipates a trip to Hughes in May or June for financial advice and for training and advising on ordinances, including updates to the public utility ordinances.
Scores:
 
Essential Indicators:
22 of 26
Sustainable Indicators:
21 of 27
Total Score:
43 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
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.
No 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
As of April 6. RUBA staff has not received financial information from the City of Hughes for the first quarter of 2014. The City of Hughes drafted, adopted, and submitted a realistic, balanced FY14 budget. All revenue and expenses for water/wastewater utility are listed in the budget. The city passed the FY14 budget on June 25, 2013. Finance reports are submitted to the city council monthly. These reports include a profit and loss statement as well as a statement showing budget vs. actual for the council. Councilmembers have an accurate financial picture of the utility. The water and wastewater utilities operate at a budgeted expense of $94,804. This is a reduction of over $7000 from FY13, with the majority of budget cuts in personnel. Projected incomes for FY14 water and wastewater utilities are $60000. The water plant is expected to operate at a loss of $45,000 this deficit is to be subsidized by heating oil sales. 2013 water utility expenditures surpassed the budgeted amounts. The utility operated over budget in fuel oil usage, salaries, and building maintenance. A monthly manager's report was prepared and delivered at the council meeting. The report consisted of a hard copy outline with verbal delivery.

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
Due to the recent installment of the distribution system, the utility has not had to turn off a customer's water as outlined in the collection policy. The utility actively follows the collection policy. The City of Hughes's bookkeeping personnel bills customers on a regular basis with an invoice for each service. Bills are sent out on the first of each month. Hughes utilizes QuickBooks 2013 for accounts receivable, payable, payroll, and for cash recording. QuickBooks accurately tracks past due accounts and amounts receivable. Accounts payable are entered into QuickBooks when paid; accounts payable are paid on a weekly basis. QuickBooks accurately tracks accounts payable. QuickBooks accurately tracks payroll, the utility also utilizes a cash receipt system. The chart of accounts correctly identifies categories; however the chart of accounts should be updated to be more streamlined. The bookkeeper reconciles and files all bank statements. All purchases are made by check, no petty cash is kept. Cash received as payment is stored in the city safe, and then deposited to the bank. Deposits are made on the 15th and at the end of each month. The city department heads are informed of the amounts of funding available, and of their financial situation(s) within the city's budget. The approval process for purchases requires the employee discuss the purchase with the administrator, and compare the purchase with the budget prior to purchase.

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 Hughes utilizes QuickBooks to calculate and track payroll liabilities. Hughes utilizes electronic fund deposits for 941 reporting and deposits. Bookkeeping staff utilize this paper record as well as electronic records through QuickBooks to ensure timely preparation and payment of federal and state tax reports and deposits. The utility is current with all IRS reports and payments for federal tax reporting and deposits. RUBA staff has not received requested information from Alaska DOL. Hughes is typically compliant.

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.
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
The City of Hughes has a posted workers compensation insurance policy in effect provided through AMLJIA which is valid as of 4/6/2014. The city utilizes a personnel policy handbook wherein adequate job descriptions are written for all positions, the utility hiring process and job evaluation process are included in the handbook. Job notices are posted with the job description and are advertised locally at least 14 days. RUBA staff was unable to verify contents of personnel folders. Employees are evaluated annually, by the administrator or mayor. The City of Hughes has a 90 day probationary period for all new hires; orientation, oversight, and job training are provided during the probationary period, ongoing training opportunities are provided as necessary.

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
No 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's ordinances identify the City of Hughes as the owner and operator of the utility. The city council meets regularly and receives reports on the utility operations. The city council enforces the utility policies when necessary. The utility manager is trained and the council approves the additional training if funds are available. The bookkeeper and operators are adequately trained. The utility has the necessary ordinances to give it the authority to operate. The utility does not have an organizational chart. The policy making body meets monthly and is involved in the utility management. The city complies with all sections of the Open Meetings Act for all meetings.

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 operator(s) actively work towards and continue to keep their certifications compliant. The manager and the utility operator communicate on a routine basis; Verbal reports are provided to the council. The water operator provides a written report to the council on at least a monthly basis. The city manager checks on the water plant facilities. City of Hughes personnel do hold safety meetings; they also participate in the monthly AMLJIA telephonic safety meetings. There are currently no unresolved major problems or outages within the utility facilities or distribution system. The water treatment plant is producing potable water, and is not on the January 2014 Significant Non-Compliance list. Hughes distributed the new CCR in June, 2013.