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

Community:
Pelican 
Staff:
Lynn Kenealy  
DCRA Regional Office:
 
Gov't Type:
First Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Pelican 
Population:
88  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/24/2013 
Community Sanitation Overview:
The City of Pelican operates and manages the following utility services: piped, treated water; wastewater collection and wastewater system; garbage collection; fuel dock; and electric utility. 
RUBA Status & Activities This Qtr:
The utility's clerk has recently retired, and the assistant clerk has taken her position. RUBA staff has provided much assistance and training through this process. This quarter RUBA staff provided assistance in a number of areas, including establishing local school contribution figures, proceedures for changing meetings, public records requests, city classification questions, Community Revenue Sharing application, budget number and proceedural questions, and assistance with writing a DOJ Pre-Clearance letter in relation to elections. 
RUBA Activities for the Coming Qtr:
The city council has requested a water utility rate study, once the new hydro power system has been online for a few months. It is hoped that the cost of the water utility will be reduced substantially by the new power system, and that the new rate study will assist the utility in setting the most appropriate rate for the community. RUBA staff will schedule the visit and rate study for summer, 2013.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
21 of 27
Total Score:
47 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 Pelican adopted their FY13 budget on May 18, 2012. The budget compared actual revenues and expenditures from FY10, FY11, and FY12, in order to establish estimates for FY13. The budget as presented to the council and community and adopted by the council also detailed any variance between the FY12 actuals and the FY13 estimates. The FY13 budget was realistic in that it budgeted for appropriate costs such as maintenance, parts, electric, fuel, labor, and other expenses for a water utility. Some amendments were adopted throughout the year as needed. Water utility revenues and expenditures are broken down within the overall city budget. Revenues for the utility are detailed within 'charges for service'. Water utility expenditures are detailed under 'public works', which also includes expenditures for other public works including harbor master, electricians, snow removal, trash, wastewater, and buildings. This can make it difficult for the decision-making body to establish exact costs of the water utility. However, it is possible to further break down the 'public works' category on the city's QuickBooks file and print up expenditures specifically for the water utility. The city estimated FY13 water and wastewater revenues to be identical to FY12 revenues and expenditures, with the exception of budgeting an additional $50,000 for maintenance in FY13. Financial reports include a balance sheet, as well as a profit and loss budget versus actual year-to-date. The city council also serves as the decision-making body for the water utility. Council members receive a copy of financial reports prior to each meeting. The city and utility clerks attend all meetings and provide a verbal manager's report when appropriate for the mayor and the council. As of February, 2013, both revenues and expenses related to the water utility were approximately 50 percent of the budget, reflective of the year just over 50 percent complete. Where revenues or expenditures are out of line with budget expectations, budget amendments have been made in the past, and recommendations are to continue doing so. The City of Pelican receives water/wastewater electricity from the Kake Tribal Fuel Corporation. City staff provided evidence of payment through April 1, 2012. Payments are made on a monthly basis. The city is purchasing the electric utility. City staff are already discussing ways to continue tracking electricity use of each utility. The City of Pelican has owned and managed the fuel dock for approximately nine months. The fuel dock receives fuel from Petro Marine every couple of months by barge. The city has not had any problems with maintaining an adequate supply of fuel and funds. The city sells fuel to the other individuals and businesses in the city as well. The city bills customers for water and wastewater service monthly. In January, 2012, the city of Pelican increased residential prices from $20 to $25 per month, and commercial prices from $30 to $35 per month. When the city took ownership of the water utility, charges were subject to Regulatory Commission of Alaska (RCA) and could not be changed. The utility is no longer regulated by RCA. This has allowed the city to begin implementing increases to the cost of water services. A utility rate study is recommended. The city estimates it is subsidizing the water utility by about $60,000 per year. The city uses Community Revenue Sharing (CRS) monies to perform this subsidy. Operating expenses and repair and replacement costs are included in the budgeted cost of the utility.

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 Pelican Municipal Code of Ordinances provides for the water utility's policies and procedures, including a collections policy under section 13.02.050. According to Subsection 13.02.050A, the city charges for water services per usage based on meter readings. The city is not currently charging per usage based on meter readings, but with a monthly flat fee. With this exception, the collections policy is being followed in accordance to municipal code. Billings are monthly and late charges are instituted when necessary. Disconnection of service is initiated when accounts are delinquent 90 days, but only after following a stringent billing and notification process. The utility allows for a repayment plan where economic hardship is identified, and city staff is more lenient during certain times of the year (such as winter), with the understanding that many customers have more income over the summer months, and have demonstrated an ability to pay back over-due bills in full upon commencement of fishing season. Such allowances are loosely permitted under Subsection 13.02.050J 'Deferred Payment Agreements'. The city water utility has a collection rate of approximately 97 percent, with severe delinquency from only 3-4 customers out of 106 billable customers. These customers are on a re-payment plan based on economic hardship. The assistant clerk creates monthly statements including charges for all utilities utilized by that customer, such as dock electricity, wastewater, trash, water. The assistant clerk also serves as the utility's accounts receivable clerk. She is experienced with QuickBooks, the accounting system utilized by the utility to keep track of customer accounts and overall finances. The clerk provided RUBA staff with a copy of the utility's chart of accounts, which is clear and categorized based on various account types, such as bank, assets, accounts receivable, equity, income, and expenses. The clerk provided documentation of monthly bank reconciliations. An accounts receivable aging detail summary used by the utility breaks down each customer into their past-due status: current, 1-30 days due, 31-60 days overdue, 61-90 days overdue, and over 90 days overdue. This format allows the clerk to easily identify which customers need relevant notices at the time of billing, and to track delinquent customers. The utility's accounts receivable system also includes a process for accepting cash payments, a safe in which to store all cash and other important documents, and a payment receipt form to provide to all requesting customers. Similar processes are used for the accounts payable system, including an easily-understandable vendor balance detail form. This form can be printed out to ensure all accounts payable invoices have been paid and are up to date. The same QuickBooks file is used to calculate payroll and make payments as appropriate. The city's procurement policy as outlined in Chapter 3.16 of Pelican's Municipal Code applies to the water utility as well. The city has a purchase order form, which the requesting staff completes and provides to the city clerk. If the purchase is for an amount over $200, the purchase order is approved and signed by the mayor both before and after purchasing. As all purchase orders go through the city clerk, any suspect orders under this amount will also be scrutinized using the same system. Any purchase exceeding $5,000 must receive prior approval by the city council. City staff undergoes bank reconciliations monthly, and provides monthly evidence to the council that this is complete. Evidence of reconciliation was provided as of March 5, 2013.

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 of Pelican uses QuickBooks to calculate, track, and report payroll tax liabilities. It then utilizes the online payment system to make all necessary payments. Federal tax deposits are made by the city through direct deposit and IRS 941 deposit slips and are submitted appropriately. RUBA staff confirmed on June 17, 2013, that the city is current in filing federal tax reports. Confirmation was provided on May 30, 2013, that the city is filing state tax reports and making tax deposits.

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.
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 City of Pelican receives its workers compensation insurance through Alaska Municipal League Joint Insurance Association Inc. (AMLJIA). RUBA staff confirmed insurance coverage online as of March 1, 2013. Notification of the policy was observed by RUBA staff to be posted in the city office in the main entrance and in the council chambers. City staff report that it is also posted at other relevant locations throughout the city. The utility's personnel policy was updated in November 2011, but has not been reviewed by an attorney, Alaska Municipal League, or DCCED. The city's personnel policy is codified in Title 2 of Pelican's municipal code. The utility has job descriptions for city council members, mayor/manager, city/utility clerk, and water operator. The utility will be revising job descriptions shortly, as they add new positions for the electric utility and other recently acquired utilities. The utility's hiring process is detailed in their personnel policy, and is practiced with every hiring cycle. The utility's probationary period is six to twelve months and is clearly covered in the personnel policy. Job training and oversight depends upon the specific position and previous experience of the employee. Training and shadowing opportunities are made available to employees, both through the city directly, and through the RUBA program. The mayor expressed enthusiasm about training, cross-training, and involving RUBA staff with the training of new-hires as appropriate. The mayor has been active in ensuring staff are trained, that ongoing training is available, and that certifications are sought and received where appropriate, such as for the water operator. Indeed, the city's primary water operator is certified at levels Water Treatment 1 and 2 through December 31, 2014, and has met all continuing educational unit requirements at this time; a provisional Water Distribution license, expiring on the same date; and Wastewater Collection 1, expiring December 31, 2012. The city/utility clerk has attended QuickBooks training and the 32 hour RUBA Financial Management for Rural Utilities training. The assistant clerk has attended an Emergency Planning and Response course and an Essential Records course. When neither clerks were able to attend the Utility Clerk's training in April 2012, the mayor and clerks were instrumental in getting RUBA staff to the community to provide an 8-hour one-to-one training on essential topics. There is currently no adopted written personnel evaluation process. The mayor has begun using a system of task sheets, which display goals for each employee. He follows up on these on a regular basis. If agreed upon and adopted by the city council, this system may serve as a personnel evaluation process. It is recommended that the city begin the process of adopting a written personnel evaluation process. Each employee has a personnel folder including that employee's I-9, job application, W2, disciplinary write-ups, pay scale, and documentation of raises. There is not currently any letter of acceptance being utilized and no adequate substitution as such. It is the recommendation of RUBA staff that a letter acceptance system be considered and instituted, both for new and existing employees.

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
Pelican's water utility was purchased from Kake Tribal Corporation, in compliance with the Regulatory Commission of Alaska. The city's code of ordinances provides for a water utility in Chapter 13. The city council reviews and enforces utility policies regularly. Meeting agendas and meeting minutes for the past six months of meetings were provided by the city, and evidence discussion of utility policies and enforcement where necessary. RUBA staff observed council members asking follow-up questions regarding water utility numbers during a council meeting, and answers were available and provided by the utility clerk. The council meets regularly once per month as required by ordinance. It also has special meetings when necessary and appropriate. The city clerk and assistant city clerk adequately post notice of all meetings and take minutes of all meetings which are made available to the public for review. Notices are posted at the post office, city office front door, library, and are faxed to the school to be posted there. City staff express a desire to learn more about open meetings requirements and have frequently contacted RUBA staff to ask questions regarding open meetings requirements, following recommendations as provided. The utility manager has recently shifted from the city's mayor to the new city administrator; and the bookkeeper is the city's treasurer, who also functions as city clerk. Both individuals enthusiastically seek training opportunities through the RUBA program and online. The water operator is adequately certified and keeps up on Continuing Educational Units (CEU) requirements. The utility manager has been in this position for just over one and a half years. This is an elected position. The utility clerk worked as assistant clerk for ten years, and has been lead clerk for two years. The city's assistant clerk has been in this role for nine months, and is cross-training on all lead clerk roles as well, including attending the upcoming Alaska Municipal Clerk conference in Anchorage. The city and utility's organizational chart is outdated. The chart displays city council, mayor/manager, operator, and city/utility clerk. However, there are more employees of the city; the chart needs to be updated to reflect the current structure, and to ensure that supervision and management of these new positions is clear.

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.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The city's primary water operator is certified for Water Treatment 1 and 2 through December 31, 2014, and has met all continuing educational unit requirements at this time; a provisional Water Distribution license, expiring on the same date; and Wastewater Collection 1, expiring December 31, 2015. The secondary operator is no longer with the city, though they are attempting to re-hire for this position. In the interim, the city's VPSO is functioning as support for the water operator, and is being trained on-the-job in tasks such as water sampling. The utility's preventative maintenance plan has the water operator performing daily spot checks of the water treatment facility and along water distribution lines. The assistant water operator also does daily spot checks, and the two confer daily to discuss any concerns and needs. There have been no major problems or outages since the water utility was handed over to the city. The main water operator has a desk next to the manager's in the city office; updates and status reports are regular, consistent, and ongoing. Reports are provided verbally, but written into city council agendas and meeting minutes when anything significant is brought up. Consumer Confidence Reports are prepared by the water operator and submitted by the city clerk. The water utility is not on the Significant Non-Compliance list. A Village Safe Water grant funded construction of the water treatment facility. Water is treated through a direct filtration system. The city previously used gas chlorine at the water treatment plant, but found it too expensive to keep up on the regulations. Therefore, they now have a salt chlorine generator, and make their own chlorine on site, through electrolysis of salt water. Both the water operator and the assistant water operator were able to demonstrate an understanding of safety measures, operating all machinery, and were able to identify the location all safety equipment and protocol. Minutes from council meetings indicate that safety committee meetings take place and minutes are provided to the city council at the next meeting. The water operator maintains a log of these minutes on his computer. Safety meetings do not appear to take place on a regular basis, but meetings are held and the manual updated via computer when necessary. The utility is not maintaining an ongoing inventory or critical spare parts list. The water operator is aware of what parts are currently available, and what parts are needed. The operator was able to provide a written inventory control list and critical spare parts list on the spot. When new parts are needed, the operator completes a purchase order and presents it to the city clerk. If a large purchase is needed, it may be presented to the whole city council.