Quarterly Report: 2014, January - March (Q3), Brevig Mission

Community:
Brevig Mission 
Staff:
Leroy Seppilu  
DCRA Regional Office:
Nome regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Brevig Mission 
Population:
445 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
8/17/2011 
Exp Date:
 
Last Updated:
4/2/2014 
Community Sanitation Overview:
Brevig Mission completed construction of a 8.5 million dollar, 4-phased piped water and wastewater system and new landfill in November 2002. The water and wastewater system is rated as a Class A system. Water is supplied from Shelmon Creek and is treated and stored in a 100,000-gallon tank at the washeteria. The tank is filled monthly. Water is piped into the school from the washeteria.  
RUBA Status & Activities This Qtr:
RUBA staff provided technical assistance to the mayor, city clerk and city bookkeeper by phone this past quarter, mainly with financial issues. Two mayors resigned during this quarter. A new mayor was selected by the City Council, Tommy Teayoumeak. RUBA staff has been recommending to the mayor to have the city council continue making personnel cuts, especially with the work hours as it cannot afford to pay payroll taxes. The City continues to generate about $66,000 a quarter in payroll taxes. The Internal Revenue Service (IRS) has started to garnish payroll from the former council members who are deemed responsible for non-payment of past due tax liabilities. 
RUBA Activities for the Coming Qtr:
RUBA staff will travel to Brevig Mission at least two times to work with the City Council on its on-going financial issues, especially with the water and waste water department and the tax liability issues. The City Council will still need to make cutbacks with its payroll as it cannot afford to pay all of its employees and to pay the tax liabilities after payroll. Staff will update the new mayor and City Council about the financial issues and make recommendations for cut backs, especially with payroll and other major expenses.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
21 of 27
Total Score:
43 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.
No 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.
No 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.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The city passed FY14 budget in a timely manner, however it is not a balanced realistic budget. The expected deficit is about $120,000. The deficit last year was about $90,000.The City subsidizes the department expenses with sales tax, funds from Norton Sound Economic Development Corporation's Community Benefits Share Program and sometimes from the State's Revenues Sharing Program funds. Lately, the City has not made any monthly financial reports, as important as they are to inform the City Council and the public of the City's financial condition. The City has barely been able to get by with paying its electricity bills, especially for the water and waste-water department. RUBA staff has recommended to the past mayors to keep in touch with all its vendors, including and especially utility companies. The City has averted disaster by calling its electricity provider to keep from being disconnected, albeit at the last moment. The City's fuel is expected to last through the next barge delivery season. The City has had difficulty with meeting its financial goals lately. The revenues received by the water and waste-water department from services provided cannot keep up with the expenses, especially with the high costs of diesel and workers' compensation coverage. The department is heavily subsidized by the City with a huge and growing deficit.

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
The city has a fairly comprehensive water and wastewater utility ordinance and actively follows the collection policies that are in place. The bookkeeper bills all the customer once a month as required by the ordinance. The bookkeeper uses QuickBooks for tracking payments and aging of customers' accounts. QuickBooks is used for invoicing all payments made by the utility. The bookkeeper uses Quickbooks to correctly calculate payroll and payroll record-keeping. The utility clerk records all incoming funds and how it is spent. The utility keeps track of how funds are spend with QuickBooks. The utility finances have detailed chart of accounts used by the utility clerk. The clerk does monthly bank reconciliations regularly as bank statements arrive. QuickBooks is used as cash disbursement system for the utility's bank account.

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.
No The utility is current on making tax deposits.
Yes 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 uses Quickbooks to complete quarterly tax reports. The City made an agreement with IRS to at least submit quarterly tax reports. The city finally agreed to start keeping current on filing tax reports even if payments are not made. The IRS has started to garnish payroll checks from previous City Council members who it deems are responsible for the past due tax liabilities.RUBA staff is continuing to encourage the City Council to make cutbacks with its payroll. The rule of the thumb is that if the City pays all its employees but does not have enough to make a tax deposit, it can't afford to employ people. Once the tax is deducted and matched by the City, the money belongs to the IRS.

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.
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
The city has workers' compensation coverage to June 30, 2014 through Alaska Municipal League-Joint Insurance Association (AML-JIA). The city has a comprehensive personnel policies. The city will need to start having new job descriptions for all its employees. The city follows its written personnel evaluation for all its employees. The personnel policies has a written process to hire new employees. The personnel files for all the city's employees are fairly complete. The city has a three month probationary period and is reviewed by the city clerk who is the designated supervisor for all the city employees.

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.
No 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 council meets regularly and the water and wastewater issues are in its monthly meeting agendas. The city council is very active in policy making of the utility. The council usually decides on disconnecting customers who are behind on paying their utility bills by at least three months. The city clerk is the utility manager for the utility and may need training. The utility clerk is the bookkeeper and is adequately trained, however, may need some more training with QuickBooks and some other duties. The utility operators are certified to Provisional 1 for water treatment certification. The city has an organizational chart and is updated regularly as needed. The city council meets at least once a month and as needed to deal with utility issues. All meetings are open to the public. The City Council went through two mayors within six months as the financial issues have taken its toll on some of the members.

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
The utility operators certified to the level of the water and wastewater systems managed and operated by the city. The city clerk makes monthly reports on the status of each department, including the water and waste water department. RUBA staff has recommended to the city to attend Alaska Municipal Leagues Joint Insurance Association (AMLJIA) sponsored monthly safety meetings by teleconference. The water and wastewater operators have recommended to the city council to purchase at least 35,000 gallons of diesel fuel for use with the water and wastewater plants.