Quarterly Report: 2013, April - June (Q4), Kasaan

Community:
Kasaan 
Staff:
Lynn Kenealy  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kasaan 
Population:
69  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/24/2013 
Community Sanitation Overview:
The City of Kasaan is a community of approximately 69 people, on the east side of Prince of Wales Island, on Kasaan Bay. The community is historically a Haida village, now composed of approximately half Haida and half non-Native community members. Water is derived from Linkum Creek, one of three creeks flowing near the city. The City of Kasaan operates and manages the following utility services: Water only, including water to school; Wastewater outfall, no treatment; Garbage haul (to the City of Thorne Bay landfill); and Fuel distribution and sales. 
RUBA Status & Activities This Qtr:
Juneau RUBA staff traveled to the City of Kasaan to conduct the RUBA Assessment of Management Indicators this quarter. After completing the assessment, the city successfully met three of the indicators it was not meeting at the time of the assessment. This quarter, RUBA staff also assisted with information regarding PFD garnishing for delinquent water customers, questions pertaining to minutes, ordinances, DOJ pre-clearance, federal tax compliance, FY14 budget, personnel, special meetings, and various other local government and utility questions. RUBA staff also conducted a water utility collection rate this quarter and concluded that over the past seven months, the water utility has a 94 percent collection rate, qualifying the city for an additional point on the SDS grants. This quarter, the city clerk and mayor both attended the RUBA Personnel UTM training in Ketchikan. 
RUBA Activities for the Coming Qtr:
In the next quarter, RUBA staff will assist utility staff in making improvements to the two remaining indicators it is not currently meeting; assist in training the new interim mayor; and provide any other assistance as requested.
Scores:
 
Essential Indicators:
25 of 26
Sustainable Indicators:
26 of 27
Total Score:
51 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.
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
Yes 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.
Yes YTD expenditures are at a level equal to or below those budgeted.
Yes A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Kasaan passed its FY13 budget in June of 2012, and has adopted amendments as needed since. The most recent amendment was adopted in February of 2013. The city's budget is thorough, and broken out into departments, such as EMS, Garbage, Water, etc. In revenues, water is delineated as a separate enterprise. Water expenditures are separated out into categories such as personnel services, travel, facility expenses, supplies, equipment, and other, and include sub-categories within each category, thoroughly budgeting all possible expenditures for the water utility. The city's expenditures such as personnel and electricity, which are allocated between departments, are separated out in the budget between departments, to provide the most accurate possible proportioning of the citys costs. For instance, though the city receives one electric bill per month, it allocates this expense between the departments utilizing said electricity. The utility treasurer provides financial reports to the council at all regular meetings, including a balance sheet, profit and loss budget versus actual, and a written report. The utility water operator also provides reports monthly to the council, and the utility manager, the mayor, attends all regular council meetings to provide any additional report needed. As of May 31, 2013, the city had received $21,119.60 in water utility user fees. In the same period, the water utility had expended $30,868.13. Both numbers are approximately in line with year-to-date budgets, with revenues exceeding expectations slightly and expenditures slightly lower than expectations. The budgeted revenue shortfall, currently amounting to $9,748.53, is sufficiently covered by Community Revenue Sharing, which in FY13 amounted $131,248. The city last raised its water rates in 2008, and is currently undergoing a water utility rate study to consider increasing water rates, particularly given the city now has a new water treatment plant to consider. Currently, the city charges its 19 residential customers at a rate of $60 per month; seven commercial/school customers at a rate of $70 per month; five senior customers at a rate of $40 per month; and one non-profit customer at a rate of $25 per month. December through June, 2013, the utility averaged a monthly collection rate of 94 percent. The utility has some past-due customers who no longer live in the community, and the city is in the process of collecting on these accounts. The City of Kasaan receives fuel shipments by road from Petro Marine as needed. When the company is driving through the area, they will often stop through and top off the citys tanks. The city then distributes fuel to the rest of the community, charging at a slightly higher rate. The city sufficiently budgets each year for all fuel-related needs. Electricity is provided to the city by Alaska Power and Telephone Company, and the city provided evidence of payment of electric bills.

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 collection policy is established in the city municipal code Chapter 2. Bills are mailed out in the first week of each month, by the fifth of the month. Customer payments are due to the city upon receipt, and are considered to be delinquent upon the next billing cycle. Within ten days of the account becoming delinquent, delinquency notices are delivered to each customer's residence, and fifteen days after the account becomes delinquent, water service is turned off. Delinquency notices are signed by the mayor on brightly colored paper, and the city keeps a copy for the files. The delinquent customer must pay their delinquent account before water service is restored. The city utilizes the QuickBooks program to track all city finances. Accounts receivable and payable systems, as well as a chart of accounts, are both in place in the city's QuickBooks file. Payroll is also tracked utilizing the QuickBooks program. All paid staff maintain a daily timesheet of hours, which the mayor (or council member if the mayor is unavailable) approves. The city clerk/treasurer then looks through the timesheets and inputs them into QuickBooks and processes all withholdings and payments. Cash is rarely disbursed by the city, generally only in the form of giving customers change if needed. Cash receipt and cash disbursement are both tracked via a double-accounting system. All incoming cash is hand-written into a daily registration form, and input into QuickBooks. The city treasurer generally receives such cash, then the mayor double checks all incoming and outgoing cash. Copies of receipts (which are all in numeric duplicate) or checks are also stapled to the back of the daily registration form. The city treasurer completes bank reconciliations for all accounts on a monthly basis, also utilizing the QuickBooks system. The city has a numeric duplicate purchase order form, which employees must complete for any requested purchase orders. The mayor approves purchases, then passes them back to the treasurer/clerk for purchase and processing. Reprimands are enforced if the process is not followed accordingly. Large purchases go to the city council for a resolution of support. Currently, there is not a specific dollar amount requiring council approval. However, the city is considering amending their ordinances to require council approval for purchases over $1,000.

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.
Yes The utility is current on making tax deposits.
N/A 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 system to calculate and track, and the EFTPS system to pay and report payroll tax liabilities. The State of Alaska granted tax clearance for the City of Kasaan on May 30, 2013. As of June 17, 2013, the IRS could not provide tax compliance, as the city was delinquent on their 941 form for the period ending 2012/12. The city claimed it had sent in the form and it has since been resubmitted. Until this has been cleared and confirmed by the IRS in the next quarter, this indicator is in non-compliance.

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.
Yes 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.
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 of Kasaan receives workers compensation insurance through AMLJIA, and posts notice of coverage in all regular work sites. Coverage was confirmed as of June 12, 2013. The city maintains an employee handbook, which has been reviewed by both AMLJIA and DCRA. The handbook was last updated on October 16, 2012. The handbook includes sections such as employment status, records, benefits, timekeeping/payroll, work conditions and hours, leaves of absence, conduct and discipline, etc. Job descriptions are also contained within the handbook. The utility personnel evaluation system is outlined in the manual. This includes a three-month introductory period, followed by a written evaluation, which is then placed on the employees file. Evaluations take place every year on the anniversary date of hire. Annual evaluations include information about strengths and needs, as well as a work plan which is evaluated for the past year and updated for the upcoming year. Pay raises are also linked to evaluations. The city's hiring process starts with a posting for at least two weeks of any open jobs. Applications are accepted and the mayor conducts interviews and checks references. This process is not yet written into the employee handbook, or anywhere else, thus this is an indicator the utility is currently working to rectify. After hire, employees are given the employee handbook and sign the first page as evidence of having read and understood the policies. They are also given a letter of acceptance which includes information about position, employment status, and wage and benefits. Employee packets and files include an I-9, signed employee handbook, copy of drivers license, job application, evaluations, and any written disciplinary actions. All employees receive on-the-job training, and are also encouraged to obtain certifications as needed. Employees are also encouraged to attend conferences and trainings as they come up, as evidenced by several employees having attended RUBA trainings (see Organizational Management for details).

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.
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 Kasaan owns and operates the communitys water utility. Authority to establish and operate the utility is set forth in the citys municipal code section 7.02.020; and ownership is established in the city's municipal code section 7.02.050. The city council is active in policy-making with regard to the utility, as needed, and enforces the policy through the city staff. The utility manager is the citys mayor. The mayor attends training and conferences as needed, as do the bookkeeper and water operator. The clerk/treasurer has attended the RUBA financial, clerks, personnel, and QuickBooks trainings, as well as public rural clerks public notary training. The utility manager has attended the RUBA clerks, planning, personnel, and financial training. The primary water operator has completed water treatment and distribution training and is certified as a Level 1 operator. The policy-making body for the water utility is the city council. The city council meets as required for one regular meeting every month, as well as special meetings and workshops as needed. The city clerk posts for council meetings in accordance with the Alaska Open Meetings Act, posting at the post office, library, and Organized Village of Kasaan building. The city council receives reports and updates on the water utility at each regular meeting. The city maintains an organizational chart, listing all employees and delineating lines of authority. The organizational chart was updated and adopted by resolution in June, 2013.

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 primary water operator is certified class one water treatment, and provisional water distribution. The city is now utilizing a new water treatment plant as of March 2013, which is classified as a class 2 plant. The water operator is currently working toward his class 2 treatment certification as a result. The back-up operator is certified provisionally for water treatment and distribution. The water utility had a preventative maintenance plan, safety policy and handbook connected to its previous water plant. Utility staff are awaiting a new preventative maintenance plan and safety manual from ANTHC, in conjunction with their new plant. The water utility manager visits the water treatment plant approximately every two weeks to conduct spot checks. Written reports are provided at least monthly to the manager and council. The utility previously conducted safety meetings, but discontinued them temporarily. In June 2013 they commenced with safety meeting, holding these meetings within their weekly staff meetings, and adopting and participating in the AMLJIA Loss Control Incentive Program, as approved by the council on June 19, 2013. The new facility has not suffered any major problems or outages since operations began in March 2013. The previous plant also did not suffer any recent major problems or outages. Leaks have previously been a problem throughout the distribution system. However, these have since been for the most part patched, and leaks and water loss are not a significant problem at this time. The system has a leak detector to help ensure this does not become an issue in the future. The utility is up to date on its Consumer Confidence Reports, and is not currently on the Significant Non-Compliance list. The water utility is in the process of integrating the CUPSS (Check Up Program for Small Systems) program, and will be having a site-visit from the program in August, 2013.