Quarterly Report: 2009, July - September (Q1), Chignik Lake

Community:
Chignik Lake 
Staff:
Earl Gibson  
DCRA Regional Office:
 
Gov't Type:
Federally Recognized Tribe 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
Chignik Lake Village 
Population:
117  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
11/17/2008 
Community Sanitation Overview:
Well water is piped directly to 32 households. An old wood staved storage tank has been dismantled and a large steel storage tank has been constructed farther from the community, at a higher elevation and close to a series of new wells. As part of the project, a new water treatment facility will also be built. The school has its own well. Approximately 70% of the homes are plumbed. Fifteen HUD homes are connected to a central sewer system with a waste pump and lagoon; the remainder use individual septic systems. Funds have been provided by VSW to develop a water and sewer Master Plan. Refuse is disposed of by residents in the new landfill. A power consolidation project was recently finished that generates power year-round from school district owned equipment, and is distributed to the community by Chignik Lake Electric. IGAP funded a project to install Powerstat prepay electric meters for residents in the village, which was completed in early 2006. 
RUBA Status & Activities This Qtr:
Contact has been made with the community, but little or no efforts have been made to move forward in fixing the defiencies in the RUBA assessment. RUBA staff continues to offer assistance to the community.  
RUBA Activities for the Coming Qtr:
The Chignik Lake Village Council has not met all of the essential capacity indicators. In order to meet them, the utility must take action to correcting those essential capacity indicators that make the utility compliant, i.e. Utility Finance, Operation of Utility, Tax Problems, Accounting System, and Organizational Management. RUBA staff will continue to offer assistance to the community. By implementing the above recommendations, the Chignik Lake Village Council will put itself into position to better meet unanticipated financial costs and ensure that employees are aware of their conditions of employment. Constant follow through of procedures and open communication between RUBA Staff and village staff will help to avoid repeated write-ups and create a successful compliant program for the community. The Chignik Lake Village Council staff was open and helpful with providing information to complete this assessment. They realize the importance of community health, financial stability, effective utility management practice and sustainability. RUBA staff will continue to be available to provide assistance for any essential and sustainable capacity indicators that are not currently being met.
Scores:
 
Essential Indicators:
15 of 27
Sustainable Indicators:
14 of 27
Total Score:
29 of 54

Finances

Essential Indicators
Answer Question
No 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.
No 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 financial and accounting elements of the utility's management are consistent with the assessment completed in November 2006. There is a mixture of manual and computerized procedures using QuickBooks Pro 2006 accounting software. There was a form of a budget for the water/sewer utility; however, was not sure if it had been adopted and entered into the QuickBooks program and the year-to-date revenue and expense data needed for monthly financial reports was not readily available. Without this information, accurate reports were not available for review by the council. This also made it difficult to know if the utility is receiving sufficient revenues to cover operating expenses. During the assessment, it was discovered that the water utility was not current with paying their electric bill. A significant amount is owed, and the balance has remained unchanged for some time, indicating the water utility has not been billed for the at least the last few months. In addition, the amounts that had been billed per month exceeded the budgeted amount for water utility electric for the whole year. The administrator did say that some of the residents are now on the new POWERSTAT (pre-pay) system and the rest of the community would eventually be put on the system. This action would help in collecting past due balances. She also stated that there was a plan to use an outside agency to do collections since there was a problem with collecting present and past due balances. This is something to be discussed at the next council meeting. There is a washeteria service operated from the water building with unreported revenues at this time. At this time there are no revenues available for repair and replacement costs, nor have funds for this been budgeted or set aside. Year-to-date revenue and expense data was not available, so it is unknown whether revenue and spending are above or below budgeted levels. The administrator just took over three weeks prior to this assessment, which meant that there is no written manager's report and very limited briefings 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.
No 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.
No 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 utility has an ordinance covering the operation of water, sewer, and garbage service utilities, which includes sections containing collection procedures. Due to a number of changes in staff personnel and the lack of available information, the new administrator is in the process of reviewing the system that was set up. She did state that there were a number of over due balances and a new process is going to be set up to collect those balances. Currently, they are collecting 5% of past due balance with each new purchase of power to pay off past due electrical billings. This is not done for the water utility billing but is part of their plan for increased revenue. An accounts payable system is not in use. RUBA staff left a form to help them document and track payments and balances for large, long term, or past due amounts. Current balances for known liabilities such as a fuel loan, purchased power from Lake and Peninsula Borough, and IRS indebtedness are not presented regularly to the council. A manual system is used for cash receipts. It does not offer an easy way to determine how much revenue had been received from the utility on a month-to-date or year-to-date basis. QuickBooks software contains a Chart of Accounts. The new administrator was in the process of verifying that monthly bank reconciliations were being done using the bank statements along with the check register in the QuickBooks accounting program. There is a purchasing system that utilizes prior approval or coordination with a budget. Supplies and parts are ordered by the operator as needed and billed through the administrator to the council for final 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.
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
The utility uses the QuickBooks program to calculate and track payroll taxes. At the time of this assessment, copies of recent Department of Labor quarterly reports were not provided; there were no current copies of IRS 941 quarterly reports available. An IRS request did show taxes being owed over a period of quarters. There is an outstanding federal judgment against the Chignik Lake Village Council. Village staff indicated this occurred as a result of a contractor using the village EIN number in connection with errors made on payroll reports and tax deposits during a road construction project. After a court appearance, the community has been deemed responsible for the outstanding balance. The community is working with IRS to pay owed taxes. RUBA staff is working closely with the community to make sure all payments are documented in their files.

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.
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
Worker's compensation insurance is provided by Alaska National Insurance Company, with a policy currently in effect for the Village Council from 8/31/2008 through 8/31/2009. The Chignik Lake Employee Policies and Procedures manual contains job descriptions, and a hiring process. Personnel folders are kept for each employee, and village staff indicated that evaluations are being completed. Village staff is taking advantage of training opportunities as time and finances allow. The administrator stated that a written performance evaluation is done for office staff, but not for the maintenance position. The administrator requested the council evaluate this position, and it is unknown whether it was done. A probationary period for new hires is utilized. Personnel folders are being updated as changes occur. Employment recruitment is done within the community first, as hiring locally solves the housing problem. When the need arises and an opportunity is presented, employees are encouraged to attend job-related training.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
No 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
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 Chignik Lake Village Council owns and operates the community's utilities; they meet regularly, and have demonstrated an interest and willingness to adopt the necessary policies and rules to operate them. However, in the area of collections, there is a lack of policy enforcement by the Council. Per the administrator, there are quite a few members in the community that have yet to bring their accounts current. The most current documentation available shows more than 50% of households delinquent on their utility bills. A plan to include water sewer utility payments in the Power Stat (pre-pay) system used by the electric utility should resolve this issue and will be introduced to the community. The new administrator, who performs many of the day-to-day management tasks, has received training in the past in fulfilling requirements of the Power Cost Equalization (PCE) program while working as the assistant, as well as RUBA's Financial Management for Utilities. The administrator would benefit greatly from further training in utility management, and the QuickBooks program. Increased familiarity and use of the QuickBooks program would resolve problems involving budgets and financial reports including accounts payable. An organizational chart was provided to RUBA staff showing all positions within the village community.

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
No 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.
No The operator provides status reports to the manager on a routine basis.
No 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 operator for the water/sewer utility is Operator in Training (OIT) certified, and has held the position for several years. The utility appears to be operating at a level of service acceptable to the community; however, their system no longer has a storage tank, and depends on a pump to maintain water pressure (24 hours a day). Some residents report occasional low water pressure; there is some concern about the availability of water for fire fighting. The administrator might receive a routine verbal status report from the operator. Administrator stated a current CCR had been completed, but there was no copy available from review. The utility is not on the current SNC list. Operation of the utility would improve greatly if there were monthly written operation and maintenance reports from the operator, and lists for inventory and critical spare parts were maintained. Safety would be enhanced with regular safety meetings and the implementation of a safety.