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

Community:
Akhiok 
Staff:
Jedediah Smith  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Akhiok 
Population:
71  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/10/2013 
Community Sanitation Overview:
The city of Akhiok has a water treatment plant that was built in 1982 and has two 10,000 gallon water storage tanks that service 25 water connections. Water is supplied from a 500,000 gallon reservoir and dam. Pressure pumps are needed to supply the water storage tanks as the tanks are near the same level as the water reservoir and water treatment plant. The distribution system has antiquated vales that are no longer serviceable. Within the water treatment plant one of the two media filters has collapsed leaving only one filter usable within the plant. A through backwash of the filter can drain the distribution system and put the psi level down to five psi throughout the system. A new treatment plant is being constructed and planned for installation in Spring 2014. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Akhiok to meet with the city administrator and tour the water treatment facility. The city has been on a boil water notice and has been on the significant non-compliance list for a number of years. The collection rate for water and wastewater service is very low. The city is relying on state revenue sharing to subsidize operations costs of water treatment as well as administrative overhead. The city is not using a computerized bookkeeping system such as Quickbooks. RUBA staff set up a spreadsheet in which the administrator could manually enter monthly expenditures and compare those with budgeted amounts for the year. The city administrator recently signed up for the IRS electronic employment tax payment filing system, but said he had not filed the quarterly 941 return form. RUBA staff encouraged prompt submission of the quarterly filing and will continue to assist the administrator in preparing the report. RUBA staff will also send the administrator blank invoices on cardstock for utility customers, as this will assist the administrator in creating an aging summary of accounts receivable. RUBA staff will also research pre-paid utility metering systems such as AMPY and Powerstat, as well as funding opportunities. This will increase the financial stability of the utility, as it currently depends almost solely on state community revenue sharing. 
RUBA Activities for the Coming Qtr:
RUBA staff will assist in pursuing funding opportunities for the community to install a pre-paid electric metering system such as AMPY, which will also be used to collect payment for the water utility. RUBA staff will also continue to work with the community to improve RUBA indicators and assist as requested.
Scores:
 
Essential Indicators:
21 of 27
Sustainable Indicators:
16 of 27
Total Score:
37 of 54

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No 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
No 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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Akhiok has adopted a realistic balanced FY13 budget. Although the water utility budget is not balanced, the revenue is stated to be $3,500 and the anticipated expenditures are expected to be $6,410. This leaves a deficit of $2,910 that is not listed in the overall budget. The city owns the electric generator that supplies electricity to the community and the water treatment plant. No monthly financial statements were not received and the council does not receive monthly financial reports. The administrator verbally updates the council on the financial status of the city. The water and wastewater revenues are not sufficient to cover operating expenses; therefore the city subsidizes the water and wastewater utility with a combination of the electric utility revenues and office space rental from the local native corporation. This subsidy is not listed on the budget. The water operator reports verbally to the council.

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
No 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
The city council has an adopted a water/wastewater ordinance that includes sections on billing and collections. The community has been notified that the council must begin enforcing collections. RUBA staff assisted the city in creating a manual system that is easy to use and helps get the billing out by the fifth of each month. Customers are charged $30 per month for combined water, wastewater and garbage service. Each monthly invoice shows the date of billing, a description of services, amount due, cost of service, amount paid and total balance due. A manual system is in place for tracking and reporting accounts receivable, accounts payable and payroll. Due to the small size of the community, this manual system for reporting is effective and sufficient. The current system for cash receipts is for staff to write a receipt of payment to the customer, enter the payment on the customer's account ledger and then the mayor or vice mayor makes a deposit to the bank. The city uses a checkbook register to record who checks are written to with payments entered on another ledger that tracks which class or account the funds are expended from. Monthly bank reconciliations are completed manually. Purchases for the utility are discussed by the mayor and vice mayor to confirm if the purchase is necessary and there are funds available in the budget. Major purchases are discussed by the entire council prior to ordering.

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.
No 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 September 11, 2013, a signed Authorization to Request Federal Tax Information indicated the city is in compliance with federal tax deposit requirements but has not posted filings for the second quarter (06) of 2013. The Department of Labor and Workforce Development, Employment Security Divisions granted tax clearance for the City of Akhiok on September 23, 2013. Akhiok is not listed on the March-April 2013 Lien Watch report.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
No 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.
No 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 Akhiok currently has a workers compensation insurance policy through Alaska Municipal League Joint Insurance Association (AMLJIA) as of September 16, 2013. The city does not have a personnel policy or current job descriptions for employees; however, the utility has requested RUBA assistance in creating a policy and job descriptions.The utility does not have a written hiring process. Job notices are posted with the job title and description for ten days. Interested applicants apply at the city office. The utility's personnel folders are orderly and contain the employees W-2, I-9 and other pertinent information. The files do not include a copy of the job application and description. Training opportunities to staff are provided as funds allow or opportunities by other sponsors become 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.
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 council strives to hold monthly meeting when a quorum is available. Although enforcing actions of disconnections has historically been difficult, the community currently understands the importance of the policy and is supporting the city on the policy. The current utility operator is trained and holds a Provisional certificates in both water treatment and water distribution; both are due to expire on December 31, 2013. The city adopted a water/wastewater utility ordinance that is based on the Regulatory Commission of Alaska (RCA) model utility ordinance.

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".
No 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
The preventative maintenance plan for the existing system is on file within the plant. The utility operator is trained and holds provisional certificates in both water treatment and water distribution, which expire on December 31, 2013. The utility operator reports to the council when there is a problem or he can foresee one. The utility operator and council try to keep needed critical spare parts on hand. There is a written inventory and spare parts list for the plant. The water system is on the April 2013 SNC list. Akhiok is unable to meet Surface Water Treatment Rule (SWTR) requirements due to inadequate treatment and filtration system. Existing aging and inadequate water system configuration does not meet SWTR. To return to compliance the community will need to install an adequate water treatment. The utility must continue to monitor for routine monthly Total Coliform Rule (TCR) and chlorine residuals and submit monthly operator report despite the BWN in effect.