Quarterly Report: 2007, January - March (Q3), Thorne Bay

Community:
Thorne Bay 
Staff:
Lawrence Blood  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Thorne Bay 
Population:
486  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/1/2007 
Community Sanitation Overview:
Water Lake, north of Thorne Bay, supplies water, which is treated and stored in a tank before piped distribution. The gravity sewage system includes secondary treatment before discharge into the bay. Approximately 75% of households are connected to the piped systems and are fully plumbed. Residents on the south side of the community use rain catchment, streams or springs, and a central water source is being designed for this area. Funds have not been secured to construct it. The City provides refuse collection services, a regional baler, a recycling facility and landfill, and participates in annual hazardous waste disposal events. Construction is underway to connect Thorne Bay and Kasaan to the Black Bear Lake Hydroelectric facility. Alaska Power Company provides electricity. 
RUBA Status & Activities This Qtr:
Juneau RUBA staff travel to Thorne Bay on February 6, 2007 at the request of the city council. The purpose of the trip was to present the RUBA Assessment of Management Capacity Indicators and discuss methods to correct current deficiences. The last Assessment of Management Capacity Indicators was performed on May 24, 2006. This Quarter, RUBA staff also provided telephonic assistance to the community on open meetings and executive sessions as the Council prepared to address the City / Utility Manger's job performance. RUBA staff also provided telephonic assistance to the city clerk.  
RUBA Activities for the Coming Qtr:
RUBA staff is scheduled to travel to the community on 2/6/07 to meet with the council and assist the Council with a rate setting analysis for the water, waste water and solid waste utilities. RUBA staff will continue to provide telephonic assistance as needed.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
22 of 27
Total Score:
44 of 54

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
No 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.
No 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 water, sewer and solid waste funds are all currently operating at a major deficit. The City is drawing down a Merrill Lynch investment account to subsidize utility operations. The investment account has a balance of approximately 2.3 million dollars. The combined funds for water, sewer and solid waste generate $196,000.00 in revenue with over $670,000 in expenses. At the current operating deficit, the City is expected to exhaust their investment account within 4 years leaving no funds to subsidize utility operations. The manager has estimated that a combined monthly charge $182.95 is required to balance all three funds. The last utility rate increase occurred two years ago. The City currently charges $90.00 monthly for residential water, sewer and solid waste. The council understands the need to reevaluate the current utility rates but is unwilling to increase to the amount necessary to balance the utility funds. Monthly financial reports are prepared and submitted to the City Council. The community has no bulk fuel storage facility. They purchase fuel from a vendor, with which they have a keep full contract.

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
Utility bills are sent out on a regular basis. The utility has an adopted collection policy and reports a 93% collection rate. The City Clerk is responsible for accounts receivable and the Accounting System Supervisor is responsible for all other accounting duties including collections, accounts payable and payroll. The community is currently using QuickBooks for their accounts receivable, accounts payable, and payroll. The community uses a manual receipt book system to record incoming funds, which is later entered into QuickBooks. The same receipt book is used for all funds coming into the community. The QuickBooks program appears to be working well for them with very few problems. The utility uses a purchase order system which requires review and signature by the administrator.

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.
No The utility is current on making tax deposits.
No 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 QuickBooks to calculate, track, and report payroll tax liabilities. The City of Thorne Bay was deemed non-compliant by the IRS. The City has an unpaid tax liability for the tax periods 01/2004 through 09/2004. The City presently has no repayment agreement with the IRS. It is unknown if the city is in compliance at this time.

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.
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
Thorne Bay has a well established and implemented personnel system and an adopted personnel policy handbook. The utility has a written hiring procedure with a 90 day probationary period for new hires. Job descriptions are updated and the personnel files are very well organized. The community appears to be providing adequate training opportunities to staff.

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.
No 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 City Council is the policy making body for the utility and meets as required and complies with the Open Meetings Act. The City has adopted the necessary ordinances to give it the authority to operate. The City Administrator was recently released from employment by the City Council. The Accounting System Supervisor is very well trained and has over 23 years of accounting experience. She often advises and provides assistance to other Prince of Wales communities on QuickBooks. The community has a new city clerk and she seems to be doing very well in her new position. The City has adequately trained utility operators and provides training as needed. The City does not have an adopted organizational chart for the utility.

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".
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
The utility operator consults with the administrator on a regular basis and provides formal O and M reports. The operator maintains an adequate level of supplies and spare parts for the utility, however does not maintain an inventory control or critical spare parts list. The City of Thorne Bay is on the Significant Non-Complier (SNC) list and the Alaska Department of Environmental Conservation issued a Notice of Violation (NOV) on 12/22/06 for failure to comply with provisions of the Stage 1 Disinfectant/Disinfection By-Product Rule. The NOV was issued for the water systems failure to monitor for Total Trihalomethanes (TTHM) and Haloacetic Acids (HAA5) and the exceedance of the maximum contaminant levels (MCL) for Trihalomethanes and Haloacetic Acids. The NOV requires that water system will collect TTHM / HAA5 samples each quarter, submit a plan of action for reducing TTHM / HAA5 and provide a public notice for the TTHM / HAA5 MCL exceedances. The earliest that the system can return to compliance is July-September 2007. The water utility completes and distributes its Community Confidence Report (CCR) The utility has returned to compliance and is no longer on the Significant Non-Compliance List for SWTR.