Quarterly Report: 2011, October - December (Q2), Gustavus

Community:
Gustavus 
Staff:
Glen Hamburg  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Gustavus 
Population:
451  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
2/2/2011 
Community Sanitation Overview:
The City of Gustavus lies on the north shore of Icy Passage at the mouth of the Salmon River in the St. Elias Mountains. It is surrounded by Glacier Bay National Park and Preserve on three sides and the waters of Icy Passage to the south. The city has no public water system. Residents receive their potable water primarily from shallow ground wells or rain catchments. The city is still considering the annexation of the False Creek area for the development of a water source and as the site of a future water treatment plant. Wastewater is largely handled by individually-owned septic systems. The city does, however, operate a solid waste and recycling center. While there is no solid waste collection service in Gustavus, the city landfill is open four days a week for residents to dispose of their garbage. Electricity service is provided by the Gustavus Electric Company. 
RUBA Status & Activities This Qtr:
The City of Gustavus has no pending water or waste water projects, though RUBA staff continue to provide telephonic and on-site assistance as requested by the community. This quarter, RUBA staff provided the city with assistance completing its application for FY10 Community Economic Stimulus Funds and helped the city to interpret sales tax laws in Title 29 of the Alaska Statutes. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue working with the community to help sustain the current level of management capacity.
Scores:
 
Essential Indicators:
27 of 27
Sustainable Indicators:
23 of 27
Total Score:
50 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.
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
Gustavus' fiscal year runs from July 1 to June 30. The municipal budget is a segmented set of smaller budgets for all city departments, committees, and business-type activities, with each having its own income and expense projections. The budget ordinance does not include a comparative statement of actual expenditures and revenues for the preceding fiscal year, nor does it include a budget summary of consolidated revenues and expenditures for the city as a whole. Both the Gustavus Community Network (GCN) and the Gustavus Solid Waste Disposal and Recycling Center (GDRC) are accounted for independently. Both budgets adequately illustrate revenues and expenses for each utility service and have revenue projections equal to expenditures after a general fund transfer is applied. The Gustavus Code of Ordinances requires that the treasurer provide a balance sheet, as well as a profit and loss budget overview, to the city council each month. The city clerk, acting as the treasurer, follows this guideline by submitting an accrual-based budget vs. actual profit and loss statement and a detailed profit and loss statement to the utility advisory committees at their monthly meetings. The clerk has confirmed that the city is up-to-date with its payments to the Gustavus Electric Company. While approximately 90% of Gustavus' energy needs are met by its hydroelectric facilities, the community also has a privately-owned and operated bulk fuel facility. That facility is comprised of gasoline, aviation fuel, #1 diesel, and #2 diesel storage tanks. The city has adequate funds available and purchases fuel as needed from its vender, Gustavus Dray. The city reports that the Gustavus Dray fuel facility consistently meets the fuel capacity needs of the community. The community offsets the cost of providing internet and solid waste disposal services by charging user fees. Utility user fee revenues account for 100% of the internet enterprise and approximately 59% of the solid waste disposal utility budget. The governing body has elected to subsidize the solid waste utility with an annual appropriation. Financial reports show that the city has sufficient general fund revenues to sustain the solid waste utility and that the subsidy is sufficient to cover operating expenses and repair and replacement costs. The city has also established a reserve fund for the Gustavus Community Network and a landfill closure fund for closing and opening new cells at the solid waste disposal and recycling center.

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 has adopted a collections policy, which is outlined in Title 6 of the Gustavus Code of Ordinances (GCO). The policy clearly refuses service to non-paying customers. The Gustavus Disposal and Recycling Center (GDRC) will only accept checks collected when the customer disposes solid waste at the facility and the Gustavus Community Network operates with pre-paid membership fees. In the latter system, a customer may purchase a monthly, quarterly, or semi-annual membership. Prior to the end of the membership period, the customer will receive an email invoice and reminder to renew their membership. If the customer fails to renew their membership 20 days after the end of the membership period, the customer's internet service is automatically disconnected. The Gustavus Community Network (GCN) primarily receives customer payments through FreeSide, an online payment system. FreeSide is a billing and account administration package, specifically designed for Internet Service Providers. Customer payments and records are maintained with the FreeSide software. These payments are directly deposited into the GCN bank account. The corresponding deposits are reported to the city clerk monthly which are then recorded into QuickBooks as 'GCN income'. The GDRC discourages and rarely handles cash payments. When a cash payment is received, the transaction is recorded in the daily log and the manager then takes the cash to the post office to exchange it for a postal money order. Checks and money orders are turned over to the city clerk for deposit into the GDRC bank account. The utility rarely extends credit to customers using the facility. The only exception to the immediate payment for service policy is when a particular business has prearranged with the manager to be invoiced for solid waste services. Customer payments, invoices, and records are maintained in Excel and reported to the clerk monthly to be entered into QuickBooks. Invoices for solid waste services are given at the time of delivery. Reminder notices on past-due amounts are sent out monthly and future services are denied until prior obligations are met. The city clerk also reconciles the utility's bank account monthly and uses QuickBooks to manage the citys accounts payable and payroll systems. Gustavus uses a purchase order system for all purchases and maintains a cash disbursement system to track expenditures. Department heads complete purchase orders which are then submitted for approval. The clerk, mayor, and vice-mayor have approving authority over these purchase orders. The clerk reports that purchase orders are compared to the budget, and very close attention is given to the remaining budget and anticipated future expenditures. Further, the city has an adequate chart of accounts, which is customized version of the standard QuickBooks version. Some accounts have been added to accommodate the enterprise funds and to allow financial transactions to be properly classified. The chart of accounts lists all of the accounts in the general ledger and is identified by a four digit reference number.

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
Gustavus uses QuickBooks Pro to calculate, track, and report its payroll tax liabilities. QuickBooks Pro also allows the treasurer to makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). The city authorized RUBA staff to obtain federal tax information from the Internal Revenue Service (IRS) and employment security tax information from the Alaska Department of Labor and Workforce Development (ADOLWD). Based upon the information received from the IRS and ADOLWD, RUBA staff has found the City of Gustavus to be compliant with all state and federal tax reporting and deposit requirements. The community has not received any correspondence from the IRS or from ADOLWD requesting any further documentation within the last year.

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.
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.
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
Current coverage for workers compensation insurance was verified through Alaska Public Entity Insurance Company (APEI). That policy is effective from July 1, 2010 through June 30, 2011 and covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. The city clerk has posted proof of coverage at the city hall, the Solid Waste Disposal and Recycling Center (DRC), and the fire hall. In addition to workers' compensation insurance, the APEI municipality insurance policy includes general liability, automobile, and property insurance coverage. The city has adopted a personnel policy in Title 3 of the GCO. However, the policy has not been updated since 2004 and the city has not consolidated its policy into an employee handbook. The policy also does not provide adequate guidance for employees in the areas of hiring, conditions of employment, compensation, evaluation, discipline, grievances, employee benefits, travel, or training. The utility further lacks written job descriptions for all of its employees. The city does, however, keep records relating to its employees in a personnel file. RUBA staff reviewed sample personnel files and found that they are well-organized and contain all the necessary employee documents. The city clerk has also confirmed that all employee files are considered strictly confidential.

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
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 mission of the Solid Waste Disposal and Recycling Center and its subsidiary, the Community Chest, is to reuse locally or to recycle as much material from the community's waste stream as possible. What cannot be reused or recycled is disposed of in a safe and environmentally-responsible manner by either placing in the community's permitted landfill or shipping the waste out of the community. The Solid Waste Disposal and Recycling Center began operation in 1994, when the Gustavus Community Association received a permit to operate a landfill facility. In 1998, the Gustavus Community Association opened a thrift store known as the Community Chest. The purpose behind the Community Chest was to reduce the amount of waste deposited into the landfill. The Community Chest accepts reusable household items such as used clothes, household goods, books, hardware, and small electronic devices to be resold through their volunteer-staffed store, with all proceeds benefiting local projects. After the community incorporated as a second class city in 2004, the Gustavus Landfill and Community Chest became a city department under the oversight of the Solid Waste Disposal and Recycling committee. In 1996, Gustavus was one of six Southeast Alaska communities to connect to the internet as part of the SEAKNET program. Grants through the Alaska State Library and the National Technological Infrastructure Administration paid for the initial set-up, connection and a year of basic operating costs. By July 1997, Gustavus SEAKNET was completely self-supporting through user fees and became a function of the Gustavus Community Association. In January 2002, the network switched to a satellite service and was renamed Gustavus Community Network (GCN). After the community incorporated as a second class city in 2004, the Gustavus Community Network (GCN) became a city enterprise. The operational structure of the Solid Waste Disposal and Recycling Center (DRC) and the Gustavus Community Network (GCN) is that of an advisory utility board. The GCN and the DRC have board members appointed by the city council. Municipal code allows the utility board to set fees and prices for services. The utility board assumes most of the responsibility for the utility, while the council retains the right to make the final decision on all actions. The city council is the formal governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utilities. The city council meets on the first and third Thursdays of each month for work sessions and the second Thursday for regular council meetings. The council holds additional work sessions or special meetings when necessary. The city complies with open meeting requirements and posts meetings in accordance with local code and state statutes. Meeting notices are posted at the city hall, grocery store, and post office at least five days in advance of the meeting. The council has adopted all the ordinances necessary to own and operate the utility services. Title 6, Chapter 3, of the GCO establishes the policies and procedures for the operation and maintenance of the Disposal and Recycling Center (DRC). Title 6, Chapter 5, establishes the municipal Internet Service known as the Gustavus Community Network. The city does not have a current organizational chart for the utility services.

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 Gustavus Disposal and Recycling Center (GDRC) manager is certified through the Solid Waste Association of North America (SWANA) as a certified landfill manager. This certification expires April 6, 2012. SWANA is a national professional association which sponsors an annual conference, conducts training, and awards credentials for solid waste management professionals. The manager of the GDRC has a preventative maintenance plan for utility vehicles and landfill heavy equipment. There is also an Occupational Safety and Health Administration handbook on sight. While GDRC employees report being safety-minded, safety meetings are not held regularly. A daily log of significant activities is indeed maintained and monthly written reports for the city council and the DRC committee are prepared by the GDRC manager. Monthly reports include utility income and expenses, the pounds of solid waste and recyclables processed, the number of customers, the days of operation, and the amount of solid waste shipped out of the community. In addition to the monthly written reports, the manager prepares a detailed annual report for the council, DRC committee, and community members. The annual report provides narrative explanations, detailed customer-usage statistics, and an overview of the financial condition of the utility. City staff reports that both the GDRC and Community Network are operating at the proposed level of service. Neither utility has suffered any major problems or outages due to management issues. The community does not currently operate a public water system. Therefore, the sustainable indicators for the Consumer Confidence Report and Significant Non-Compliance list are not applicable to Gustavus' current management practices. The Gustavus Community Network and the GDRC both have an inventory control list and critical spare parts list. A detailed inventory of utility equipment and spare parts is also maintained at both utilities. These inventory lists provide replacement information, product cost, quantity, and the physical location of equipment and parts.