Quarterly Report: 2014, October - December (Q2), Wales

Community:
Wales 
Staff:
Iura Leahu  
DCRA Regional Office:
Nome 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Wales 
Population:
154 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
5/15/2008 
Exp Date:
 
Last Updated:
1/6/2014 
Community Sanitation Overview:
The City of Wales owns, operates and manages Wales Water System. The city operates two groundwater wells which were drilled in 2001. A water transmission line transports raw water to the water plant where raw water is filtered and treated. The washeteria and the water plant are located in the same building. Residents haul treated water from a 500,000 gallon storage tank at the washeteria. Some residents use untreated water from the Village Creek. Almost all residents use honeybuckets, and very few homes currently have plumbing. The city runs a honey bucket haul system. The school and clinic are served by piped water. There are two wastewater systems: one for the school and the other for the teacher's housing and clinic. A master plan to implement a piped system has been completed. The Village Safe Water Program secured funds to conduct a feasibility study to evaluate treatment alternative to remove naturally occurring uranium and fluoride from the two groundwater wells and build a new water plant and washeteria. CRW Engineering Group, LLC provided the city with a Water Tretment Plant & Washeteria Design Analysis Report in June, 2013. A Wales Water Utility Business Plan was prepared by Michael L. Foster & Associates, Inc. The plan identified the following proposed upgrades to the water system: new surface water source intake facility and infiltration gallery; new combined water treatment plant and washeteria facility; new on-site wastewater disposal systgem; waste hear supply from the Alaska Village Electric Cooperative; new supply and return piping between the existing water treatment plant and the proposed; new service boxes for the school, clinic, teacher housing. Building a piped water and wastewater system is not being considered at this time. There is no permit for the landfill.  
RUBA Status & Activities This Qtr:
On October 7, at the request of the Wales' city council, Nome RUBA staff provided on-site assistance to the acting city clerk, the newly appointed mayor, and the city council in preparing the city’s FY14 budget, which includes the honey-bucket, washeteria, and water plant budgets. Staff and the mayor reviewed the FY12 certified financial statement and the FY14 budget prepared by the former city clerk, and made corrections where necessary. The city council is the governing body for the water utility. Staff also participated in a special meeting of the city council where the mayor introduced the FY14 budget, the council approved the FY12 certified financial statement, and the council adopted a resolution correcting seat designations and terms of current city council members. Staff also provided elections training to the acting city clerk in preparation for municipal elections. Also this quarter, RUBA staff sent letters requesting monthly financial reports and meeting minutes to update the RUBA assessment. RUBA staff was provided with written documentation to update the assessment. The State of Alaska Village Safe Water Program is managing the Water Treatment Plant and Washeteria projects. This quarter, the Village Safe Water provided the city with the Wales Water Utility Business Plan, and recommended the city to contract the Cultural Resource Consultants LLC (CRC) to conduct an archaeological field survey. The archaeological survey includes inventory of the project footprint of the proposed water treatment plant and washeteria and the associated drain field and pipelines.  
RUBA Activities for the Coming Qtr:
At the request of the mayor, Nome RUBA staff will schedule an on-site visit to perform a RUBA assessment in the coming quarter. RUBA staff recommended that city staff and city council focus on three areas of concern: development of a financial management system which would ensure financial accountability, transparency and compliance with the Alaska statutory requirements; signing a RUBA agreement, developing and implementing an action plan to address managerial deficiencies and improve the score on the RUBA assessment; and codifying the code of ordinances to ensure compliance with the Alaska statutory requirements. RUBA staff is available to provide onsite and offsite public management and governance assistance to the Wales city staff, city mayor and city council.
Scores:
 
Essential Indicators:
12 of 27
Sustainable Indicators:
10 of 27
Total Score:
22 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.
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 of Wales adopted its FY14 budget and a copy was submitted to the Division of Community and Regional Affairs, Community Aid and Accountability Section. The budgeted revenues for the washeteria and water plant are lower than expenditures by $2,550. The honey bucket hauling budget is not balanced showing $1,500 in budgeted revenues and $30,540 in budgeted expenditures. The city council acted to provide subsidies to the utility. This quarter, the city clerk provided the council and RUBA staff with a list of revenues and expenditures pertaining to the water plant and washeteria. The three months presented in the report show that the water plant and the washeteria generated enough revenues to cover expenses. However, RUBA staff’s recommendation is to have a monthly financial report that compares actual year-to-date revenues and expenses to the budget. During the three (September, October, November) months the honey bucket haul wages were paid by another entity in Wales. The city will begin paying again the honey bucket haul wages. The city has not begun billing customers for the honeybucket service. The water plant and washeteria are current in paying water/wastewater electric bills. RUBA staff assisted with the city fuel order for the upcoming fiscal year. 8,000 gallons have been ordered and this amount will be enough to provide fuel to all the city departments. Since the city, water plant and washeteria do not use monthly financial reports, it is unknown whether the year-to-date (YTD) revenues and expenditures are balanced. No monthly manager report is being prepared. The city does not use the budget amendment process.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No The utility bills customers on a regular basis.
No 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.
No The payroll system correctly calculates payroll and keeps records.
No 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.
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 city is responsible for billing and collecting payments for the water, honeybucket, wastewater disposal, which is used by the school and clinic, and trash collection service. The city council and city staff has not enforced the collection policy. RUBA staff does not have verifiable information on whether customers have been billed on a regular basis, and if the city has an account receivable system. RUBA staff has not been provided with copies of honeybucket or water and wastewater bills or invoices when requested. A manual accounting system appears to be in place. Accounts receivable and payable are tracked manually, but due to lack of training and continuing turnover the manual system has not been kept up to date. RUBA staff observed that the city staff uses timesheets to keep track of hours worked. The existing chart of accounts does not identify categories in a reasonable and usable manner. There is no record that monthly bank reconciliations are being completed for all city and public utilities accounts.

Tax Problems

Essential Indicators
Answer Question
No 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
This quarter, the mayor signed an Authorization to Request Federal Tax Information form, and RUBA staff submitted it to the IRS. As of December 23, 2013, the City of Wales is deemed non-compliant by IRS. The city owes a significant amount in federal taxes. According to city staff, the city uses a manual payroll system to calculate taxes. According to the latest lien watch report (July 2013), the city has unresolved federal tax liens.

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.
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.
No The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The City of Wales has workers compensation coverage through the Alaska Municipal League Joint Insurance Association (AMLJIA). The city paid and updated its workers compensation coverage which is effective through the end of June, 2014. The city council adopted an at-will personnel policy. An AML attorney has reviewed it. A clause in the personnel policies states that all city employees will be given time to sign a new agreement with the city. Job descriptions are not up to date and do not outline employees' required duties. The new personnel policy outlines the process of personnel evaluation but there is no evidence that the city applies it accordingly.

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.
No The utility has an adequately trained manager.
No 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 of Wales is the owner of Wales Water System and the washeteria. The city council is the policy making body of the utility and responsible for managing it. The city council has been involved in the new water plant and washeteria projects. The council has been active reviewing the project plans and adopting necessary documents. However, the council does not enforce all of the utility policies. For instance, collection of payments for honeybucket service is not enforced and the honeybucket department operates under a significant deficit, which is subsidized with funds from other sources. There appears to be no one in charge of overseeing public utility departments, including the annual budget, monthly financial reports and management reports. The city and its utilities do not have an adequately trained manager and/or utility clerk/bookkeeper. The city and its departments do not have an organizational chart. This quarter, the city council has met as required and has been in compliance with the open meeting act.

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".
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
According to the Alaska Department of Environmental Conservation website, Wales Water System has two water operators. The primary operator has a Small Water System Treated certificate that expires 12/31/2014. The backup operator has a Water Treatment/Distribution Provisional certificate that expires 12/31/2014. According to the primary water operator, the utility has a preventive maintenance plan. RUBA staff does not have a copy of the plan on file at this time. The mayor is the manager of all city departments, including the utility. However, it is unknown whether the water operator provides the mayor with monthly operation and maintenance reports since the city has not provided city council meeting minutes requested by RUBA staff. The utility operates at the level of service proposed, but the water plant and the washeteria are very old and need to be replaced. RUBA staff was not provided with a copy of the Consumer Confidence Report. As of July 2013, the utility is on the Significant Non-Complier (SNC) list due to higher than normal levels of uranium. Village Safe Water issued a request for proposals in April 2012 for uranium treatment options. WWS maintains an inventory control and critical spare parts list.