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Capacity Indicator: Finances
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Essential Indicators
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Yes
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All revenues and expenses for the utility are listed in the utility budget. |
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Yes
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The utility has adopted a balanced realistic budget. |
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Yes
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Monthly financial reports are prepared and submitted to the policy making board. |
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Yes
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The utility is current in paying all water/wastewater electric bills. |
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Yes
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The utility has on hand a year's adequate fuel supply or it has a financial plan to purchase an adequate supply. |
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Yes
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The utility is receiving revenues (user fees or other sources) sufficient to cover operating expenses. |
Sustainable Indicators
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Yes
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The utility is receiving revenues (user fees or other sources sufficient to cover operating expenses and Repair & Replacement (R) costs. |
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Yes
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YTD revenues are at a level equal to or above those budgeted. |
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Yes
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YTD expenditures are at a level equal to or below those budgeted. |
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Yes
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A monthly manager's report is prepared. |
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Yes
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Budget amendments are completed and adopted as necessary. |
| Finances Comment: |
The FY13 budget was formally adopted by the city council on June 19, 2012. The budget lists anticipated income and expenses by city department with a comparison to the previous fiscal year's actual figures. Water, wastewater, and refuse collection enterprise funds are accounted for independently with realistic projections of associated revenues and expenses listed for each utility service.
FY13 expenses for water, wastewater, and refuse collection services are expected to be roughly equal to FY12 levels, with minor increases in personnel, travel, freight, and training costs. User fees cover approximately 89 percent of water and wastewater utility expenses, with the remaining costs me with a transfer from the city's general fund. Refuse collection service, however, operates at a profit with more than $47,000 transferred from user fees to the general fund. All interfund transfers are explicitly outlined in the city's budget.
The city administrator delivers verbal financial reports at each regular council meeting. Revenue and expense reports and balance sheets can be prepared upon request, however written financial reports are not routinely provided automatically. The administrator chooses not to present these documents on a monthly basis due to the time necessary to prepare such reports. This problem stems from the way the chart of accounts is integrated into the accounting system. Budgets and financial reports do not follow the same format. Instead, the budget lists revenue and expenses that are unique to specific enterprise funds under the appropriate fund, while the financial report clusters similar revenues and expenses from all utilities into one overarching utilities and services fund. Even though all revenues and expenses are allocated under a certain enterprise fund, these document layout issues make creating a budget versus actual profit and loss statement difficult.
The community offsets the cost of providing water, sewer, and garbage services by charging user fees. The unmetered single family water rate is $42.81 per month. The utility has several classes of commercial businesses and charges commercial water rates ranging from $39.50 to $528.96 per month, depending upon the type of business and the estimated water usage. A regressive per-gallon rate is charged for metered customers. The metered rate is $30.22 for the first 8,000 gallons, .0038 per gallon up to 100,000 gallons, and .0025 per gallon for amounts over 100,000 gallons. Wastewater rates are $46.00 for a single family residence and range from $43.69 to $450.95 for commercial business. Metered water customers are charged wastewater rates that are based on the amount of water used. These utility rates were last adjusted in 2006.
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Capacity Indicator: Accounting Systems
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Essential Indicators
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Yes
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The utility has adopted a collection policy and actively follows it. |
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Yes
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The utility bills customers on a regular basis. |
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Yes
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An accounts receivable system is in place which tracks customers and reports past due accounts and amounts. |
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Yes
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An accounts payable system is in place. |
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Yes
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The payroll system correctly calculates payroll and keeps records. |
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Yes
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A cash receipt system is in place that records incoming money and how it was spent. |
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Yes
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The utility has a cash disbursement system that records how money was spent. |
Sustainable Indicators
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Yes
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A chart of accounts is used that identifies categories in a reasonable, usable manner. |
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Yes
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Monthly bank reconciliations have been completed for all utility accounts. |
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Yes
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The utility has a purchasing system that requires approval prior to purchase, and the approval process compares proposed purchases to budgeted amounts. |
| Accounting Systems Comment: |
The city's adopted utility bill collection policy is outlined in Title 10 of the Klawock Municipal Code. In accordance with the policy, the city actively pursues delinquent utility accounts with a standardized letter and door hanger notice system, shut-off warnings, and late fees. Any customer who is more than 60 days past due, at the discretion of the city, may either be turned over to collections or have their service disconnected. However, the community does not favor water service disconnection and will do so only as a last resort. The city uses Ketchikan Credit Bureau Inc. as its collections agency. In addition to the consequences found in the collections policy, the city may establish repayment plans and allow for Permanent Fund Dividend (PFD) assignments in order for customers to avoid collection actions.
The utility bills customers each month. Bills typically go out on or around the 5th of each month, with payment accepted by cash, check, credit card, and credit-linked autopayment. In accordance with the terms of agreement with the city's bank, associated transaction fees are not passed on to customers who choose to pay by credit card; rather, the fees distributed amongst and aid for by all utility customers.
The city uses Cougar Mountain accounting software, which is designed for nonprofit and government entities for basic general ledger fund accounting. General ledger functionality includes an unlimited number of funds, departments, or grants, as well as inter-fund transfers and fund balancing. The software allows for multiple grants with varied year ends. A bank reconciliation function is included for reconciling bank statements with actual checks and deposits. The program consists of five integrated modules: general ledger, accounts receivable, accounts payable, inventory, and order entry. The city has also purchased Cougar Mountain's payroll and purchase orders modules separately. Each module provides standard reports such as income statements, balance sheets, cash requirement, and cash flow statements that provide sufficient financial information. But, these reports are not easily customized without an additional report generating software add-on. The general ledger contains internal controls such as permission settings and audit trails. The accounts payable module issues checks, manages vendor information, and interfaces with the purchase orders and general ledger modules to enable full encumbrance accounting. The accounts receivable module maintains customer account and payment information, documents customer payments, and reports past due accounts. The accounts payable module issues checks, manages vendor information, and prints 1099 and 1096 tax forms. The payroll module automatically posts payroll expenses to the general ledger and allows direct output printing for 941, W-2, and W-3 forms and meets payroll reporting requirements for Alaska. The program maintains payroll history for five quarters to allow processing of the current year's payroll before finishing W-2s for the prior year. Cougar Mountain continues to support the software with updates and provides annual IRS Circular E updates for current tax requirements at an extra cost.
The city uses a purchase order system for all purchases and maintains a cash disbursement system to track expenditures. In this system, department heads submit formal purchase order requests to the city administrator who assures that adequate funds are budgeted and are available to purchase the item. The purchase is approved if the city administrator deems it appropriate and a copy of the signed purchase order is sent to the item vendor. Vendor invoices and packing slips are then compared to the original purchase order, a payment is assigned to the appropriate account coding, and a dual signature check is issued.
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Capacity Indicator: Tax Problems
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Essential Indicators
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Yes
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The utility has a system to accurately calculate, track, and report payroll tax liabilities. |
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Yes
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The utility is current on filing tax reports. |
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Yes
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The utility is current on making tax deposits. |
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N/A
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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 Comment: |
The Internal Revenue Service's taxpayer Advocacy Office confirmed that Klawock is in compliance with all federal tax deposits and filings and that the IRS has no liens against the city as of March 15, 2013. The Alaska Department of Labor and Workforce Development confirmed on March 19, 2013, that all state tax payments are current as well.
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Capacity Indicator: Personnel System
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Essential Indicators
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Yes
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The utility has a posted workers compensation insurance policy in effect. |
Sustainable Indicators
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Yes
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The utility has adopted and uses a Personnel Policy, which has been reviewed by an attorney, AML or Commerce for topics and language. |
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Yes
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The utility has adequate written job descriptions for all positions. |
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Yes
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The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation. |
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Yes
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The utility has an adequate written hiring process. |
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Yes
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The utility has personnel folders on every employee that contain at least: I-9, Job Application and Letter of Acceptance. |
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Yes
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The utility has a probationary period for new hires that includes orientation, job training/oversight, and evaluations. |
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Yes
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The utility provides training opportunities to staff as needed and available. |
| Personnel System Comment: |
Current coverage for workers compensation insurance was verified through Alaska Public Entity Insurance Company (APEI). The FY13 policy is effective from July 1, 2012 to June 30, 2013. THe policy covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of policy coverage is posted in accordance with state statute in all public buildings. In addition to workers compensation insurance, the APEI municipality insurance program includes general liability, automobile, and property insurance, as well as coverage for public officials and law enforcement officers.
Every employee is expected to follow the city's adopted personnel policy handbook, though they are not required to submit a signed statement attesting that they have read and understand the handbook. The comprehensive, 46-page handbook covers a broad range of personnel topics, including, but not limited to: employee orientation and introductory periods, advertising of vacancies and hiring procedures, maintenance of personnel files, performance evaluations, pay, vacation, and sick leave benefits, holidays, time off to vote, timekeeping, pay schedules, safety policies, grievances, resignation, and termination. These policies and procedures have been formally adopted by the city council and is fully enforced. The city administrator continues to work with the city's workers' compensation insurance provider to consider amendments to sick leave accrual provisions.
The city has job descriptions to aid in the staffing, wage and salary administration, and training for all positions. These job descriptions are up-to-date and clearly outline each employee's required duties. Personnel files are well organized and in most cases, contain all the necessary employment documents. The city uses employment offer letters that define the type of position, salary, insurance and benefit policies, the extent of the employee probationary period, and information about the City of Klawock Employee Handbook. Copies of these letters and all other files connected with an employee are considered strictly confidential and are stored in a locked filing cabinet in the city clerk's office. To limit access, the key to the filing cabinet is kept in the office safe. The city clerk has reported that access to the personnel records are limited to only the employee, to those who have a job-related 'need to know,' and to those who have been authorized by the employee to see the file.
A probationary period for new employees lasts up to 90 days from the date of hire. During this probationary period, an employee may be terminated without advance notice and without cause. Upon satisfactory completion of the probationary period, the employee becomes a permanent employee. The probationary period also includes workplace orientation, job training, oversight, and performance evaluations.
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Capacity Indicator: Organizational Management
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Essential Indicators
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Yes
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The entity that owns the utility is known; the entity that will operate the utility is set. |
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Yes
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The policy making body is active in policy making of the utility. |
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Yes
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The policy making body enforces utility policy. |
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Yes
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The utility has an adequately trained manager. |
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Yes
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The utility has an adequately trained bookkeeper. |
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Yes
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The utility has an adequately trained operator or operators. |
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Yes
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The utility has adopted the necessary ordinances (or rules and regulations) necessary to give it the authority to operate. |
Sustainable Indicators
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Yes
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The utility has adopted an organizational chart that reflects the current structure. |
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Yes
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The policy making body meets as required. |
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Yes
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The utility complies with the open meeting act for all meetings. |
| Organizational Management Comment: |
The City of Klawock owns and operates the water, wastewater, and solid waste utilities. Title 10, Chapter 1 of the Klawock Municipal Code establishes the policies and procedures for the operation, regulation, and maintenance of the utility facilities. The city council is the formal governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utilities. The council meets the first Tuesday of each month and holds additional work sessions when necessary.
By city ordinance, the mayor is the chief administrative officer of the city; the mayor has, however, delegated the majority of the administrative officer functions and authority to the city administrator. The city administrator, under the direction of the mayor and council, performs administrative duties, supervises administrative staff, and is responsible for managing daily operations. In addition to these duties, the administrator serves as the city accountant, is responsible for maintenance of the books, and is the city's utility manager. The current city administrator has a bachelors degree in business administration, has successfully completed both the 32-hour RUBA 'Financial Management for Rural Utilities' and 'Planning Management for Rural Utilities' trainings, and regularly participates in statewide and regional sanitation utility conferences.
The administrator does share some of his utility management duties with the public works director. The public works director's duties include supervision of operational utility staff and the daily operations and maintenance of all sanitary facilities including water, sewage, garbage collection, and landfill services. The city clerk, who also serves as the utility clerk, completed the 32-hour RUBA 'Clerks Management for Rural Utilities' course, attends statewide municipal clerks conferences, and has received formal notary public training.
The city has an organizational chart which details the levels of authority between supervisors and subordinate employees in all city departments, including the public works (utility) department.
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Capacity Indicator: Operation of Utility
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Essential Indicators
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Yes
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The utility operator(s) are actively working towards necessary certification. |
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Yes
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The utility has a preventative maintenance plan developed for the existing sanitation facilities. |
Sustainable Indicators
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Yes
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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. |
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Yes
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The utility has a safety manual and holds safety meetings. |
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Yes
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Utility facilities have not suffered any major problems/outages due to management issues that are unresolved. |
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Yes
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The utility is operating at the level of service that was proposed. |
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Yes
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The operator provides status reports to the manager on a routine basis. |
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Yes
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The utility has completed and distributed its "Consumer Confidence Report". |
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Yes
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The utility is not on the "Significant Non-Complier" (SNC) list. |
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Yes
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The utility maintains an inventory control list. |
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No
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The utility maintains a critical spare parts list. |
| Operation of Utility Comment: |
The city encourages professional development training and the utility operators are adequately trained given the classification of Klawock's sanitation facilities. There are three operators responsible for operating and maintaining these sanitary systems and possess the following certifications: Bennett Charles: Water Treatment Level 2 Exp. 12/31/2014 Water Distribution Level 1 Exp. 12/31/2014. Harry Jackson: Water Treatment Level 1 Exp. 12/31/2013 Water Distribution Level 1 Exp. 12/31/2013 Wastewater Treatment 1 Exp. 12/31/2015 Wastewater Collection 1 Exp. 12/31/2015
A comprehensive outline of preventative maintenance duties are included in the job descriptions of utility staff. The department also utilizes a whiteboard system that charts out maintenance schedules and duties. Formal safety meetings are held at least once per month between utility staff and supervisors and are fully documented in meeting minutes that record discussion topics, actions taken, topics for future meetings, employees in attendance, and the time of the meeting. A review of three months of those safety meeting minutes shows that a wide range of important workplace safety issues are reviewed on a regular basis. The Klawock Public Water System is not listed on the most recent (January 2013) Environmental Protection Agency Significant Non-Compliance List. The utility properly distributes its consumer confidence reports (CCR) to customers with all the information required by the Safe Drinking Water Act. There has been no interruption of service related to management issues and the utility continues to operate at the proposed level of service. The utility department uses a rudimentary inventory control list to track equipment usage, but is in the process of developing a more formal system.
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