Quarterly Report: 2012, April - June (Q4), Shishmaref

Community:
Shishmaref 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Shishmaref 
Population:
573  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/26/2012 
Community Sanitation Overview:
The City of Shishmaref owns, operates and manages Shishmaref Water/Wastewater Treatment System (SWWTS). SWWTS uses a fill and draw process to obtain and store water over the winter. Raw water is obtained from a watershed reserve. The raw water is pumped over a four-month period, filtered and disinfected prior to being stored in two storage tanks. One water tank is used by the washeteria and local residents who haul water bought from the watering point. The other storage tank is primarily used by the local school. The water is being treated at the treatment plant located in the washeteria. The city also owns two pump houses. One pump house is used to transport water from the storage tank located near the washeteria to the storage tank used by the local school, health clinic, city hall and garage. Most residents haul their own water from the washeteria. In the summer, many residents collect rain from rooftops. In the winter, residents simply chop off chunks of ice from one of two ponds located about five miles away from the city, load it into their snow machines, and take it to their homes. Wastewater in the City of Shishmaref is treated at two facultative lagoons. The school owns the two-cell lagoon located west of the city garage. Wastewater from the school, city office, health clinic and garage discharges into the east cell. Another two-cell lagoon is owned by the city and is located north of the washeteria and the Water Treatment Plant. This lagoon is designed to be a percolating basin. The washeteria and the Water Treatment Plant discharge into the city-owned lagoon. Most of the city residents use honey buckets, with the majority of them disposing their honey buckets into bins that are located along the roads throughout the community. The bins are transported by the city to the honey bucket disposal cell near the west end of the island by an ATV during the summer and by snowmobile during the winter.  
RUBA Status & Activities This Qtr:
On May 29, Nome RUBA staff provided on-site local government and financial management assistance to the city staff, utility staff, and members of the city council. RUBA staff focused on the preparation of the FY13 budget and codification the code of ordinances. RUBA staff worked with the city bookkeeper in estimating revenues and expenditures for the next fiscal year. Microsoft Excel budget forms were used to create the budget. The goal was to prepare a balanced and realistic budget based on analyses of past budgets, monthly financial reports, and proposed new wage increases. In addition, RUBA staff worked with the utility clerk, city clerk, and bookkeeper creating separate monthly revenue reports for the honey bucket bin, wastewater box, wastewater septic, water and trash hauling services. RUBA staff gathered information on water production and use, types of customers, number of customers and collection rate. This information will assist RUBA staff and the city council to structure the utility departments in order to provide sustainable and affordable public services to residents of the city. RUBA staff presented the need to complete a rate study. RUBA staff had a work session with the members of the city council. The discussion focused on the changes proposed to the format of the budget. The city council agreed with the proposed changes and those changes will be applied to FY13 budget. The second part of the work session was dedicated to finalizing the codification process. RUBA staff discussed proposed changes to Chapters 40 to 68 of the current code. The council indicated that they needed more time to review the amendments and requested a copy of the code with the proposed amendments to be reviewed by the council within the next several months. RUBA staff will send copies as requested and schedule a return trip for additional assistance with codification. The Shishmaref Water/Wastewater Treatment System submitted the required financial, accounting, tax, and operation and maintenance documents to the city council, federal and state tax agencies as well as the RUBA program. Nome RUBA staff had frequent contact with city and utility staff this quarter.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff will travel to Shishmaref in the upcoming quarter to complete rate study for services provided by the public utilities. RUBA staff will recommend the city to be nominated for QuickBooks on-site installation.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
22 of 27
Total Score:
48 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 Shishmaref adopted the FY13 budget on June 27, 2012. A copy of the approved budget was submitted to the Division of Community and Regional Affairs. The Shishmaref Water/Wastewater Treatment System's budget is included in the overall city budget. The utility budget is realistic and includes all the revenues and expenditures for the FY13. However, the city council will have to use other sources of revenues to subsidize the deficit, which is $39,900. In the past, the council used the Payment in Lieu of Taxes (PILT) to subsidize the utility. The city bookkeeper prepares and submits monthly financial reports comparing actual year-to-date revenues and expenditures to the budget to the city council/utility board on regular basis and the reports are referenced in the meeting minutes. RUBA staff has received copies of the monthly financial reports this quarter (March, April, and May 2012). According to the most recent invoices from the electic utility, the utility is current paying the electric bills. According to the city staff, the utility has adequate fuel supply. The City of Shishmaref is part of the Norton Sound Economic Development Corporation bulk fuel purchase program. The city council ordered 23,000 gallons of heating fuel for the upcoming year and part of it is used to heat the utility. The FY13 budget shows that $20,000 was budgeted for heating fuel. Crowley delivers fuel via barge once a year, typically the end of August. The utility is receiving revenues from user fees (local school and clinic) and other sources and the revenues are equal to or above those budgeted, including the expenses. The FY13 budget has a line item indicating that $7,500 was set aside to cover repair and replacement costs. The city clerk is the supervisor of all employees of the city including the water plant operators. The city clerk and the water operators provide monthly reports on the operation, maintenance, and management of the utility. RUBA staff has seen copies of the reports as referenced in the city council meeting minutes. The city council/utility board is active in the budget appropriation process and has a good grasp of the fiscal reality of the city and utilities. The council makes informed decisions regarding utility finances because it receives and reviews monthly financial reports. According to the monthly city council meetings, the city council makes fiscal adjustments when necessary by amending the original budget. The bookkeeper continues to provided RUBA staff monthly financial reports.

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 City of Shishmaref Code of Ordinances includes billing and collection procedures for all public services provided by the city. Since the water and wastewater system in Shishmaref does not have residential customers connected to a piped system, the only two customers are the local school and the health clinic. The utility clerk sends out monthly invoices to the local school and clinic. However, the utility clerk is responsible to bill for the honey bucket bin rental service; wastewater box hauling service, water haul service, and trash and wastewater hauling services. The utility clerk is responsible for the cash receipt system and collections. The utility clerk keeps track of all payments by recording them in a detailed logbook. The utility clerk passes along the accounts receivable information to the city bookkeeper, who uses QuickBooks Pro 2010 to generate monthly financial reports, prepare monthly bank reconciliations and track payroll liabilities. The QuickBooks Pro monthly financial reports are converted to an Excel spreadsheet format which makes them easier for the council members to read and understand. The city clerk reported that all purchases are made in accordance with the budget. Nome RUBA staff provided the city clerk and utility clerk with letters of discontinuance of services and referral letters to collections services. However, the city offers customers deferred payment plans before taking legal or collection actions against delinquent customers.

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.
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 city and its public utilities use QuickBooks Pro 2010 to accurately calculate, track, and report payroll tax liabilities. The city has no past tax liabilities or liens recorded. On July 2, 2012, the Internal Revenue Service reported that the city is in compliance with federal employment tax filing and deposit requirements. As of July 2, 2012, the Alaska Department of Labor and Workforce Development confirmed that all state tax payments and tax filing requirements are current.

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.
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
All city employees are covered by an Alaska Municipal League Joint Insurance Association (AMLJIA) workers compensation insurance policy. The policy is valid until July 1, 2013 and covers work-related accidents and occupational diseases as per Alaska statutory limits for each occurrence. The city implements a comprehensive personnel management system with the mayor and city council continually reviewing personnel matters. The city and the utility follow the personnel policies in the day-to-day management of personnel. Each employee undergoes a performance evaluation review. The city maintains personnel files for the city employees. The city is in the process of updating all employees' files to include I-9 forms. The city and the utility have a probationary period for new hires that includes orientation, job-training/oversight and evaluation, which is completed after ninety days of an employee being on the job. The city and the utility provide training opportunities to staff as funds are available. The city clerk and a member of the utility board completed the 32-hour RUBA Organizational Management for Rural Utilities course in November 2011, as well as other RUBA trainings previously.

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 owns and operates the community's sanitation system. The city has a utility board which consists of members of the city council. The board is active in policy making and the city enforces the utility policies as per the code of ordinances. The city clerk and members of the city council reported that the board has monthly utility meetings. To comply with Alaska's Open Meetings Act, the city consistently posts notice of each meeting at least five days in advance in three public places. Each notice indicates the type of meeting to be held, location, date, and time. The city council is active in policy-making for the utility, as evidenced in the city meetings' minutes reviewed. Meeting minutes show that the city council is provided with written financial reports, briefings on ongoing utility projects, staffing issues, training requests and concerns of the public. The utility has a certified water operator, who is the manager and is supervised by the city clerk. The council hears monthly oral reports on the operation, finances and management of the utility from the operator. There is also an alternate water operator who works part-time or as needed. The operator has stated to RUBA staff he was proud to hold his job because the utility has provided good clean water to its residents. The city has a current organizational chart posted on the wall of the city clerk's office. Nome RUBA staff assisted in creating the organizational chart. Nome RUBA staff personally observed the city council review monthly financial statements and other utility related reports during the on-site visit in March, 2012. During the same meeting, the city council discussed solutions to the problem of water shortages at the school tank. The city council plays an active role in policy making. The city council asked for more assistance in setting rates. RUBA staff began collecting the necessary information to conduct such a study.

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.
No The utility has completed and distributed its "Consumer Confidence Report".
No 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
Shishmaref Water/Wastewater Treatment System (SWWTS) has a lead and an alternate water operator. The lead water operator has a Water Treatment 2 certificate which will expire on 12/31/2013. He also holds a Wastewater Collection Provisional (expiration 12/31/2012) and Wastewater Treatment 1 (expiration 12/31/2012). The lead water operator is pursuing CEU's to maintain his certification. The alternate water operator does not have a certificate but he has attended classes, has been actively working towards certification, and has a total of approximately five years of experience as a water operator. The utility has a preventive maintenance plan and a safety manual. According to meeting minutes, the utility holds monthly safety meetings by phone. The safety meetings are provided by the Alaska Municipal League Joint Insurance Association (AMLJIA). The utility has not suffered any major problems or outages for many years. However, the main pipe transferring water from the water storage tank by the washeteria to the school storage tank freezes almost every year during the winter. The first quarter, the main pipe froze and the city had to have two employees haul water from the main tank to the school tank for many days because the school tank was low on water. The utility bought a special hose (2,200 feet long) this fiscal year to transfer water via hose instead of hauling. The operator provides oral status reports to the city council and meets all required regulations. The utility is on the most recent (April, 2012) Significant Non-Compliance (SNC) list. According to the SNC, the utility is 'still having problems with higher total trihalomethanes (TTHM) due to disinfection problems (DBPs, TTHM).' SNC recommends that SWWTS to continue address the maximum contaminant level of trihalomethanes and continue collect quarterly trihalomethanes samples (TTHM, RAA, MCL; TTHM/HAA5).