Quarterly Report: 2014, April - June (Q4), Mekoryuk

Community:
Mekoryuk 
Staff:
Fred Broerman  
DCRA Regional Office:
Bethel regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Mekoryuk 
Population:
201 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
8/7/2012 
Exp Date:
 
Last Updated:
7/6/2014 
Community Sanitation Overview:
The City of Mekoryuk has a population of about 215 and manages the water treatment plant and washeteria. In the 1970s, the community had an underground piped water system installed that failed due to winter freeze ups. Later, the city received an early version of the Cowater Flush Tank and Haul? water and wastewater systems which is still being used in ninety-six homes and eleven commercial establishments. Homes do not have washers and less than half city residences have working baths or showers. Therefore, the washeteria is used by nearly all city residents. The city has a nine million gallon lined reservoir, a hundred and twenty-five thousand gallon water storage tank, and a 4.2 acre wastewater lagoon. The Lower Kuskokwim School District has its own well but uses the city's wastewater lagoon. The city would like to be considered for funding for a piped water and wastewater system. 
RUBA Status & Activities This Qtr:
Bethel RUBA staff sent out quarterly RUBA information requests on June 20, 2014. The city provided most of the documents that were requested. Bethel RUBA staff visited Mekoryuk city offices from June 23-26, 2014. Bethel staff reviewed the city’s FY14 monthly financial report spreadsheet. The review included checking for formula errors and obvious inaccurate entries that might have occurred over the course of a year. A FY15 budget/multi-month financial report spreadsheet was prepoared. This was done by reviewing the classes and categories in the FY14 spreadsheet with the city administrator and then making improvements to the format and making changes such as adding a public safety department (class) for FY15. Then the administrator and RUBA staff began a thorough review of the city’s QuickBooks file. This started with looking critically at the city’s long list of classes (departments, enterprises, grants or projects) and questioning each class designation to determine if it really was a class or if it was actually a revenue or expenditure category (or account). The class list for FY15 was narrowed down to 8 entities (which included administration and finance, AVEC, city council, public safety, streets and roads, washeteria, a CDBG grant, and water and wastewater). Once the QuickBooks class list was cleaned up, the city clerk was included in a similar effort to critically review all the categories or accounts (revenue or expense line items such as salaries, electricity, supplies and incomes for each department/class) found in the QuickBooks file. Many unused or old accounts and subaccounts were hidden, deleted, renamed or merged with similar accounts. The review entailed several hours of work that included a lot of checking and crosschecking many QuickBooks entries. During the review, as changes were made to class and category designations in the city’s QuickBooks file, similar changes were also made in the FY15 budget/multi-month financial report. Having identical classes and categories in both of the city’s financial tracking tools will make updating the multi-month financial report go smoothly. The monthly discipline of running a monthly profit and loss by class report and entering its data into the multi-month financial report also serves as a check that often finds where there have been classification or category errors in QuickBooks entries. After the review was completed the city administrator and RUBA staff used the city’s FY14 budget/monthly financial statement to project anticipated revenues and expenditures for the city’s draft FY15 budget. Conservative budget estimates for FY15 show the washeteria’s expenditures exceeding its revenues by over $50,000. City council should continue to work at reducing costs related to operating the washeteria enterprise and along with raising user fees.  
RUBA Activities for the Coming Qtr:
Bethel staff is available to work with the municipality's administrative staff to bring the city's RUBA essential and sustainable indicators into compliance.
Scores:
 
Essential Indicators:
19 of 27
Sustainable Indicators:
17 of 26
Total Score:
36 of 53

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.
Yes 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.
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.
Yes YTD expenditures are at a level equal to or below those budgeted.
Yes A monthly manager's report is prepared.
N/A Budget amendments are completed and adopted as necessary.
Finances Comments
A copy of the City of Mekoryuk's FY 2014 Operating Budget and accompanying ordinance is on file at the Bethel regional office and it appears to be balanced and realistic. Minutes for March, April and May 2014 council meetings were provided. The minutes mentioned city council reviewing and accepting monthly financial reports. The city administrator provided the Bethel RUBA regional office with the city's FY14 budget/multi-month financial report spreadsheet updated through May 2014. The financial report indicates that the utility is receiving revenues (from customer payments) less than those budgeted and year to date expenditures are close to those budgeted. An July 2, 2014 phone conversation with Alaska Village Electric Cooperative (AVEC) indicated that the city has a $1243, 30 day past due balance on its electric accounts. On June 24, 2014, the city administrator indicated due to the mild winter of 2013/2014 the city had significant fuel remaining from the summer/fall 2013 purchase and felt heating fuel projections in the draft FY15 budget would cover fuel costs for the winter of 2014/2015 without needing a bulk fuel loan. The city's FY14 budget does not have a repair and replacement line item for the water and sewer department.

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.
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
An electronic copy of 'City of Mekoryuk Water and Sewer Utilities Credit and Collection Policy and Procedures' adopted on November 11, 2009 is on file at the Bethel regional office. According to the administrator, the city has established an unwritten policy that if a residential account for water and wastewater services has a balance over the cost of two water or wastewater hauls the city will not provide the next water or waste haul until the balance is paid down by the cost of one water or wastewater haul. However, a May 1, 2014 accounts receivable aging report for the utility indicates that 35 percent of the residential and commercial customers have delinquent accounts 30 days past due, 26 percent of the customers have delinquent accounts 60 days past due, and 33 percent of the customer base have delinquent accounts 90 days past due. This data indicates the city is not following the collection policy established by the November 11, 2009 Ordinance. City council should consider updating the collections policy so it matches the unwritten policy that is being used. When cash is received for utility payments, the customer receives a receipt and the transaction is entered into QuickBooks. The city does not have an accounts payable system in place capable of showing all vendors that money is owed to. On June, 24 and 25, 2014 Bethel RUBA staff worked with the administrator and clerk to streamline the city's Quickbooks file class list and chart of accounts. The classes and categories are now nearly identical to those found on the city's draft FY15 budget so the two can be easily compared. An in-house check request is required when an employee needs to purchase parts, supplies and equipment. The city provided the Bethel RUBA regional office with statements and reconciliation summaries to its general checking account for April and May 2014. An undated city document titled 'Purchasing Procedures' is on file at the Bethel regional office.

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.
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
A June 18, 2014 fax correspondence from IRS indicates the city is not compliant with federal tax payment requirements for the first quarter of 2014 . A July 2, 2014 email correspondence from Alaska Department of Labor's Anchorage office indicates that the City of Mekoryuk is compliant with its Employment Security Tax payments and reporting requirements through March 31, 2014. The city is not listed on the March-April 2014 LIEN WATCH: A Review of Small Community Liens.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
No 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.
No 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
While visiting the city offices June 24-26, 2014 Bethel RUBA staff reviewed the city's workers compensation and liability policy that expires in October 2014. A copy of City of Mekoryuk Utility Policies and Procedures (the city's personnel policy) revised on August 10, 2009 is electronically filed at the Bethel regional office. Documentation that the personnel policy has been adopted by city council has not been provided. Until the Bethel RUBA office is provided with verification that the city's personnel policy has been adopted by city council the first sustainable indicator of this section will be marked 'No'. Written job descriptions for the city administrator, bookkeeper, and washeteria supervisor were provided on July 24, 2012. But job descriptions for the maintenance supervisor, assistant and alternate operators and the washeteria attendants were not provided. Therefore, the sustainable indicator of this section which states: 'The utility has adequate written job descriptions for all positions' is marked 'No'. The city has not provided documentation that it follows a written personnel evaluation process that ties employees' job descriptions to their evaluations, or that it has an adequate written hiring process. Not including city council members, the city of Mekoryuk has about 12 employees. On June 18, 2012, Bethel RUBA staff reviewed three of the city's employee personnel files. None of the three folders had the employee's application or a letter of acceptance and one of them did not have an I-9. For RUBA compliance, all personnel files should contain the employee's application file, letter of acceptance (that includes the wages, benefits, expectations of the employer, classification of job, and date of hire) and a completed federal I-9 form. The city has sent its administrative staff to several RUBA sponsored trainings during the last two years.

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.
Yes The utility has an adequately trained manager.
Yes The utility has an adequately trained bookkeeper.
No The utility has an adequately trained operator or operators.
No 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
An electronic copy of 'City of Mekoryuk Water and Sewer Utilities Credit and Collection Policy and Procedures' adopted on November 11, 2009 is on file at the Bethel regional office. According to the administrator, the city has established an unwritten policy that if a residential account for water and wastewater services has a balance over the cost of two water or wastewater hauls the city will not provide the next water or waste haul until the balance is paid down by the cost of one water or wastewater haul. However, a May 1, 2014 accounts receivable aging report for the utility indicates that 35 percent of the residential and commercial customers have delinquent accounts 30 days past due, 26 percent of the customers have delinquent accounts 60 days past due, and 33 percent of the customer base have delinquent accounts 90 days past due. This data indicates the city is not following the collection policy established by the November 11, 2009 Ordinance. City council should consider updating the collections policy so it matches the unwritten policy that is being used. The city's water treatment plant is classified as a Water Treatment Class I facility. However, the city's washeteria supervisor only has a Small Water System Treated certification. Therefore, the washeteria supervisor will need to pass the Water Treatment provisional test and accrue on-the-job training hours before he can be certified to the level of the city's water plant. On August 30, 2012, city council adopted by resolution an updated organization chart for the municipality which is electronically filed at the Bethel regional office. City council attempts to meet at least monthly pursuant to Alaska Title 29. Public notification of meetings and the manner in which they are conducted are in accordance with Alaska's Open Meeting Act or otherwise stated in local ordinances.

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.
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.
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 city's water treatment plant is classified as a Water Treatment Class I facility. However, the city's washeteria supervisor only has a Small Water System Treated certification. Therefore, the washeteria supervisor will need to pass the Water Treatment provisional test and accrue on-the-job training hours before he can be certified to the level of the city's water plant. A Draft Operation and Maintenance (OM) Manual dated March 2012 is electronically filed at the Bethel regional office. The OM Manual contains a preventative maintenance plan and a critical spare parts list. An FY 2009-2010 Water and Sewer Inventory Control List is on file at the Bethel regional office. A more recent version should be submitted. The water operator reports to the city administrator the status of facility operations on a daily basis. A copy of the city's 2012 Consumer Confidence Report (CCR) is electronically filed at the Bethel RUBA office along with a certification form signed by the washeteria supervisor on July 22, 2013 indicating the CCR was distributed and posted in the community. The city's water treatment system is not on the April 2014 Significant Non-Complier (SNC) list.