Quarterly Report: 2014, October - December (Q2), Chignik

Community:
Chignik 
Staff:
Barbara Higgins  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
Lake and Peninsula Borough 
Agreement?
No 
Agreement Date:
11/22/2005 
Entity:
City of Chignik 
Population:
91 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
6/24/2013 
Exp Date:
11/22/2007 
Last Updated:
12/24/2013 
Community Sanitation Overview:
Chignik is located on the south shore of the Alaska Peninsula in the Lake and Peninsula Borough. The City of Chignik operates the community’s water and wastewater utilities. The community derives its water from a well and from the Indian Lake reservoir. The reservoir, which the city owns rights to, has a 14 foot high dam and a 7,700 foot long pipeline that delivers water to the treatment facility where the water plant filters out turbidity with gravel filters. Chlorine is added to disinfect the water before it is pumped into the 200,000 gallon storage tank. Fifty-four homes and several commercial facilities are connected to the system. The system is classed as a small water treatment system. The city also owns and operates the Chignik Wastewater Treatment Facilities under permit 2003DB0096-1011. The maximum volume of this system is 86,400 gallons per day. Five lift stations move the wastewater into community septic tanks at the end of the treatment process; discharge into the ocean occurs on the outer edge of the mixing zone, via an outfall line. The city operates a Class 3 landfill in the community and provides garbage hauls from city owned dumpsters placed throughout town that residents dump into. 
RUBA Status & Activities This Qtr:
This quarter RUBA staff provided advice on the adoption of resolutions by the city council, the utility’s governing body. New RUBA staff was temporarily assigned to the community on December 17, 2013. Since then, this temporary staff has worked to review the city’s FY14 budget, verify workers’ compensation insurance coverage and operator certification, and seek confirmation of employment security (ESC) tax payments. 
RUBA Activities for the Coming Qtr:
RUBA staff will contact the community in the coming quarter to offer any advice and assistance necessary to ensure the sustainability of sanitation services in the community. Specifically, RUBA staff will offer to help adopt a personnel evaluation process in line with job descriptions and a preventative maintenance plan.
Scores:
 
Essential Indicators:
23 of 26
Sustainable Indicators:
23 of 27
Total Score:
46 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
No 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 Chignik follows the State’s fiscal year running from July 1 to June 30. It adopted its FY14 budget timely by non-code ordinance on June 8, 2013. The budget compares projected income and expenses alongside actual FY13 values, which helps to ensure that FY14 figures are realistic. Water and wastewater functions are budgeted as an enterprise separated from other city business. In FY14 the city expects to spend roughly $53,000 on water and wastewater expenses, including payroll, taxes, insurance, testing, facility electricity and fuel, travel, supplies, and freight. It plans to collect $62,000 in water/wastewater user fees and for the city’s general fund to supply an additional inter-fund transfer of $10,000 to the water and wastewater enterprise, leading to a net water/wastewater income of more than $18,000 this fiscal year. The city averages about a 95 percent utility bill collection rate. Monthly financial reports comparing actual year to date revenues and expenses to the budget are created and included in the agenda packets for council members at their monthly meetings. A verbal financial report is also given to the council and is documented in the meeting minutes. A review of the financial reports shows that YTD income and expenses are in line with budget amounts. The city owns and operates the electric utility and makes the appropriate journal entries from the water/wastewater utility to pay its electric bills. When budget amendments are needed they are made, that transfer funds to line items that need the funds. The utility does not have a line item for repair and replacement expenses in the budget.

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.
No 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 bookkeeper uses QuickBooks Pro 2013 for financial recordkeeping processes, including payroll. The bookkeeper is proficient in the use of QuickBooks and all payroll records are up to date. The utility clerk writes a receipt for any income received. A copy of the receipt is kept in a permanent receipt book. At the end of the week, new data from the receipt book is entered into the utility's computerized accounting system. All payments by the city are made by check. Every check includes an amount, an expense account to be charged, and a description of what the payment is for. Copies of paid invoices are kept in vendor files. The utility's chart of accounts identifies all asset accounts (un-deposited funds, bank accounts, and accounts receivable), all liability accounts (current, long-term and payroll liabilities), and fund balances. Income and expense accounts are identified in a manner that matches the income and expense line items in the budget. Bank reconciliations are current. The utility does not require purchase orders for proposed purchases. Rather, there is only a verbal understanding that all purchases that exceed $1,000 require the approval of the mayor.

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.
No 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 uses the QuickBooks Pro 2013 accounting program to accurately calculate, track, and report payroll tax liabilities. The State's Department of Labor and Workforce Development confirmed on December 30, 2013 that the City of Chignik is current in its employment security (ESC) tax filings and deposits. However, RUBA staff has not received verification of the IRS taxpayer advocate’s office at the time of this report that the city is current in its federal tax filings and deposits. Relevant indicators have been marked ‘No’ until such verification is received. The utility is not listed in the September-October Lien Watch report.

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.
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.
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 Notice of Insurance is posted in plain view in the city offices. According to the Notice of Insurance, workers compensation insurance is provided by the Alaska Municipal League Joint Insurance Association from July 1, 2013 to July 1, 2014. A check of the Division of Workman's Compensation website on September 19, 2013 confirmed the policy is in effect. A copy of the city's personnel policies, adopted October 14, 2006, is on file with RUBA staff. Job descriptions are up to date and expressly outline the utility employee's required duties. RUBA staff has copies of the job descriptions for the utility on file. The city does have a written evaluation process. Employees state they have not been formally evaluated annually. The hiring process is described in the utility's personnel policies adopted October 14, 2006. Personnel folders are current and available for all employees. The probationary period or introductory period for new hires is three months, as described in the personnel policy. New hires are supposed to be evaluated at the end of the introductory period. The utility budget includes an appropriation of $1,000 for staff training.

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 utility ordinance, adopted in August 2011, identifies the city as the owner and operator of the utility. Council meeting minutes were provided to RUBA staff and confirm that the council reviews policies and rates on an annual basis and makes changes as needed. The city's mayor serves as the administrator, developing and overseeing the utility budget, supervising the utility operator and the utility clerk, and providing monthly reports to the utility’s governing body. The utility bookkeeper has held the position for a number of years and is experienced on the job. She is competent and maintains all of the accounting systems in a professional and organized manner. The Department of Environmental Conservation recognizes two sanitation utility operators in Chignik. The primary operator is provisionally certified in water treatment, water distribution, wastewater collection, and wastewater treatment. These certifications expire at the end of 2015. The backup operator has no certification. The city has an organizational chart that is updated as needed. A copy of the organizational chart is on file with RUBA staff. Records of city council meetings provided to RUBA staff indicate that the city conforms to Alaska’s Open Meetings Act as required.

Operation of Utility

Essential Indicators
Answer Question
Yes The utility operator(s) are actively working towards necessary certification.
No 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 utility states a preventative maintenance plan was developed by the Remote Maintenance Worker (RMW), though a copy was not available and RUBA does not have a copy on file. The mayor spot checks the utility on a routine basis and receives verbal updates weekly from the operators. The utility does not have a safety manual on file and does not participate in or holds safety meetings. RUBA staff received a copy of the 2012 CCR certificate and is not listed on the October 2013 Significant Non-Complier (SNC) list. The system has been actively working on maintaining the point of entry residual distribution at the required levels, but has pump issues. To prevent unnecessary outages the utility maintains an inventory control list and a critical spare parts list, both on file with RUBA staff.