Quarterly Report: 2011, April - June (Q4), Chignik

Community:
Chignik 
Staff:
Barbara Higgins  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Chignik 
Population:
81  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/3/2011 
Community Sanitation Overview:
Water is supplied by Indian Creek, which has a dam and a reservoir. Water is treated and piped into most of the homes and the school, and a well is available for back-up water supply. A second system serves the Trident fish processor, the airport area, and a few homes, and utilizes a groundwater well as a source. The project is now complete that eliminated the dual system by extending a new mainline from a new storage tank at one end of town to the airport at the other end of town. Improvements to the treatment plant are still in progress and include new filters and upgraded valves and chemical feed equipment. Piped sewage for most of the community is collected in three group systems into community septic tanks and wastewater is discharged via ocean outfall lines. Approximately 45 homes are served, and the remaining few homes use individual septic tanks. An improvement project replacing the multiple system structure with a unified sewer system for the entire community has been completed. A new permitted landfill and access road were recently completed. A feasibility study of hydroelectric generation at Indian Lake has been funded but requires an agreement with the local processing plant on FERC620 and water rights before the project can proceed. Electricity is provided by city owned Chignik Electric.  
RUBA Status & Activities This Qtr:
The city received and expended funding from the Alaska Native Tribal Health Consortium (ANTHC) for recent upgrades to the piped system and lift stations and for making a connection to the system between the east and west side of town. The water treatment plant's filtration system remains out of compliance due to the city's use of surface water. A new funding source is needed to bring this into compliance with upgrades to the treatment plant and filtration system. The city currently does not own the water source however it is in negotiations with the landowners to enter into a Memorandum of Understanding for conveyance of the water rights. The RUBA assessment will continue to ensure that the city is meeting grant expectations and sustainability and will allow the city to remain in the three year funding cycle. This quarter a city clerk has been hired and is on board. She has begun work on the personnel files, budgets, and monthly financial reports with the assistance of the deputy clerk. RUBA staff has assisted with guidance on essential indicators. An invitation to visit has been extended for next quarter to further provide assistance with roles and responsibilities of the clerk and meeting RUBA essential indicators.  
RUBA Activities for the Coming Qtr:
Based on this assessment, a work plan is being developed to deal with the problems. The work plan will be an effort to bring the community up to an acceptable management performance standard. Continued RUBA assistance to this community depends on the community meeting a baseline level of progress towards improvement. The Council needs to sign a RUBA Agreement that outlines the services this division will provide that stipulates the actions the city must take and continue to provide in order to receive the RUBA assistance.
Scores:
 
Essential Indicators:
26 of 27
Sustainable Indicators:
19 of 27
Total Score:
45 of 54

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
Yes 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.
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 adopted the FY11 budget on June 28, 2010. A copy of the approved budget was submitted to the Division of Community and Regional Affairs as required by law. The budget includes an income line item of $55,000 for residential customers. This amount is based on a one hundred percent collection rate: in fact, the collection rate has been 91%. RUBA staff has received copies of the reports for the previous quarter March 31, 2011 through this current reporting period May 31, 2011. The bookkeeper provided RUBA staff with copies of the monthly financial reports that compare YTD revenues and expenses to the budget, but RUBA staff has been unable to confirm that the reports were presented to the city council members. According to the last received monthly finance report May 2011 the utility is current with the electric bills. It is a line item journal entry from the utility to the electric company, as both utilities are owned by the city. Heating oil for the utility is delivered by barge two times per year. The utility uses an average of 600 gallons of fuel annually. The utility budget includes $2,500.00 for heating oil. According to the most recent available financial report May 2011, YTD utility expenses have exceeded YTD utility revenues and a budget amendment is needed. The utility does not have a line item for Repair and Replacement expenses in the budget or the monthly financial reports. Regularly scheduled meetings have not occurred on a regular basis as agendas and meeting minutes are not available from the city staff. Therefore the monthly manager's report does not meet the expectations of the indicator.

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 utility billing and collection procedures are included in the utility ordinance, adopted on September 24, 2008. RUBA staff has a copy of the approved ordinance on file. The accounts receivable reports indicate that there are no amounts more than 90 days past due. The city is proactive in collection for services and provides a number of services that require current accounts. A random review of account receivable files indicated that the utility bills are issued within the first week of each month, as required by the utility billing procedures. Staff uses QuickBooks for bookkeeping. Customer invoices and payment for each customer are entered into the accounts receivable program. The utility bookkeeper uses QuickBooks Pro 2010 for financial recordkeeping, including all payroll records. The bookkeeper is proficient in the use of QuickBooks: all payroll records are up to date through May 2011. The utility clerk writes a receipt for any income received. A copy of every receipt is kept in a permanent receipt book. At the end of the day, new data from the receipt book is entered into the utility's computerized account system. All payments are made by check. Every check includes an amount, an expense account and a description of what the payment is for. A copy of paid invoices are kept in the vendor files. The utility's chart of account identifies all asset account (undeposited funds, bank accounts, and accounts receivable), all liability accounts (current, long-term and payroll liabilities), and fund balances. Income and expense accounts are identified in a manner that matches the income and expenses line items in the budget. Bank reconciliations have been completed through May 2011. The utility does not require purchase orders for proposed purchases. There is a verbal understanding that all purchases that exceed $1,000 require the approval of the mayor.

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.
Yes 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 the QuickBooks Pro 2010 accounting program to accurately caculate, track, and report payroll tax liabilities. On June 27,2011 RUBA staff received confirmation from the IRS and Department of Labor that the city is current with all tax reports and deposits. The utility is not found on the most recent lien watch report (April 2011).

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.
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.
Yes The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The Notice of Insurance is posted in plain view in the city offices. According to the Notice of Insurance, workers compensation insurance is provided by the Alaska Municipal League Joint Insurance Association from July 1, 2010 to July 1, 2011. A June 09, 2011 check of the Division of Worker's Comp website confirmed that the policy remains in effect. A copy of the city's personnel policies, adopted October 14, 2006, is on file with RUBA staff. Job descriptions are up to date and expressly outline each employee's required duties. RUBA staff has copies of the job descriptions on file. The city does have a written evaluation process. Employees state they have not been formally evaluated annually. The hiring process is described in the utility's personnel policies adopted October 14, 2006. A copy of the policy is on file with RUBA staff. Personnel folders are not current or available for all employees. The probationary period or introductory period for new hires is three months, as described in the personnel policy. New hires are evaluated at the end of the introductory period. The utility budget includes an appropriation of $1,500. for staff 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.
Yes The policy making body is active in policy making of the utility.
Yes 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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The utility ordinance identifies the city as the owner and operator of the utility. Council meeting minutes confirmed that the council reviews policies and rates on an annual basis and makes changes as needed. Meeting minutes are not available for this quarter. The city's mayor fills the role of administrator. The mayor competently develops and oversees the utility budget, oversees the utility operator and the utility clerk, and has historically provided monthly reports to the governing body. The bookkeeper has over ten years experience on the job. She is quite competent and maintains all of the accounting systems in a professional and timely manner. The utility is a Small Water System/Treated. According to the Alaska Department of Environmental Conservation website, the utility operators have the required level of training and certification for this system. The city adopted a utility ordinance in September 2008. RUBA staff has a copy of the signed ordinance on file. The city has an organizational chart that is updated as needed. The copy of the organizational chart is on file. Regular council meetings have not been held once a month due to the commercial fishing in the area; special meetings are held as needed. This quarter lack of meeting files and minutes do not confirm that agendas are posted; meetings that did occur were open to the public as required by the Open Meetings 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
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".
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 primary operator has a Water Treatment-Provisional and Water Distribution-Provisional certification that expires December 31, 2013 but does not have the required number of CEU's. There is a backup operator with a Water Treatment-Provisional and Water Distribution-Provisional certification that expires December 31, 2012 and has the required number of CEU's. The utility has a preventative maintenance plan that was developed by the Remote Maintenance Worker. A copy of the plan is on file with RUBA. The operator uses a checklist to verify that preventive maintenance is performed. The mayor spot checks the utility on a routine basis. The utility has a safety manual on file. The mayor receives verbal updates weekly from the operator. RUBA staff has a copy of the 2009 CCR on file. According to the utility clerk, the CCR was mailed to all residents on June 24, 2010. The utility has an inventory control list and is on file with RUBA staff. The utility has a critical spare parts list on file. To prevent unnecessary outages, critical spare parts are kept in stock at the utility.