Quarterly Report: 2013, January - March (Q3), Wales

Community:
Wales 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Wales 
Population:
154  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
4/22/2013 
Community Sanitation Overview:
The City of Wales owns, operates and manages Wales Water System. The city operates two groundwater wells which were drilled in 2001. A water transmission line transports raw water to the water plant where raw water is filtered and treated. The washeteria and the water plant are located in the same building. Residents haul treated water from a 500,000 gallon storage tank at the washeteria. Some residents use untreated water from the Village Creek. Almost all residents use honeybuckets, and very few homes currently have plumbing. The city runs a honey bucket haul system. The school and clinic are served by piped water. There are two wastewater systems: one for the school and the other for the teacher's housing and clinic. A master plan to implement a piped system has been completed. The Village Safe Water Program secured funds to conduct a feasibility study to evaluate treatment alternative to remove naturally occurring uranium and fluoride from the two groundwater wells and build a new water plant and washeteria. Building a piped water and wastewater system is not being considered at this time. There is no permit for the landfill.  
RUBA Status & Activities This Qtr:
This quarter, Nome RUBA staff traveled to the City of Wales at the request of the mayor, the city clerk, members of the city council and residents of Wales to observe and assist the city clerk and election judges in conducting the special municipal election which was rescheduled due to regular election irregularities. On the day of the election, RUBA staff was present at the polling place and observed the election in its entirety. No election irregularities were noted. The city council is the utility board of the water and wastewater system in the community. RUBA staff urged the city council and city administration to hold a canvass committee meeting and certify the election results. RUBA staff has requested that city staff provide RUBA staff with documentation to update the online RUBA quarterly reports. Although the city staff indicated that such documents will be provided, RUBA staff has not received any documentation in the last several years. RUBA staff stressed the importance of meeting the essential indicators of management capacity, especially during the ongoing feasibility study managed by Village Safe Water. The city council was informed that Wales must meet all essential indicators prior to applying for a sanitation grant where state funding is being used, and must continue to meet essential indicators through the period of construction. For the last two quarters, a Village Safe Water (VSW) engineer has been working with the city on an ongoing feasibility study to find a new water source, build a new water treatment plant, and a new washeteria. The community has had issues with slightly higher than normal levels of uranium and fluoride in the groundwater wells water source. The plan is to find a new water source which would have less uranium and fluoride. The Village Creek has been tentatively identified as the new water source but more tests will be conducted this summer. The relationship of meeting deficient capacity management indicators prior to release of construction funds was again explained and stressed.  
RUBA Activities for the Coming Qtr:
After visiting the City of Wales this quarter, Nome RUBA staff recommended that city staff and city council focus on three areas of concern: development of a financial management system which would ensure financial accountability, transparency and compliance with the Alaska statutory requirements; signing a RUBA agreement, development and implementation of an action plan to address managerial deficiencies and improve the score on the RUBA assessment; and recodifying the code of ordinances to ensure compliance with the Alaska statutory requirements. RUBA staff is available to provide onsite and offsite public management and governance assistance to the Wales city staff, city mayor and city council.
Scores:
 
Essential Indicators:
8 of 26
Sustainable Indicators:
9 of 27
Total Score:
17 of 53

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No Monthly financial reports are prepared and submitted to the policy making board.
No 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.
No YTD revenues are at a level equal to or above those budgeted.
No YTD expenditures are at a level equal to or below those budgeted.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Wales adopted its FY13 budget and a copy was submitted to the Division of Community and Regional Affairs, Community Aid and Accountability Section. The Wales Water System FY13 budget has not been fully developed. For instance, in the enterprise section of the city budget there is a revenue line-item listing the bulk water sales of the utility. However, the city budget does not include the operation and maintenance expenditures related to the utility. The washeteria budget for FY13 lists both revenues and expenditures but the budget is not balanced. The city, the utility, and washeteria have not prepared monthly financial reports and do not submit them to the city council. RUBA staff has provided the mayor and city staff with a sample monthly financial report in Excel spreadsheet format, but the city has not yet implemented it. According to the city mayor, the city keeps up to date with the utility and washeteria electricity bills, but no invoices were produced when RUBA staff requested such information. According to the city mayor, about 5,000 gallons of diesel was ordered and delivered for the year and the city has about 10,000 gallons in its reserves. 15,000 gallons is adequate for remainder of the year. Since the city and its public service department, including WWS and washeteria, do not use monthly financial reports, it is unknown whether the year-to-date (YTD) revenues and expenditures are balanced. According to the city mayor, the city council continues to provide a large subsidy for the trash and honey-bucket haul services using funds from Norton Sound Economic Development Corporation's annual Community Benefits Share Program.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No The utility bills customers on a regular basis.
No An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
No An accounts payable system is in place.
No The payroll system correctly calculates payroll and keeps records.
No 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
No A chart of accounts is used that identifies categories in a reasonable, usable manner.
No 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 city is responsible for billing and collecting payments for water service, honeybucket service, wastewater disposal service used by the school and clinic and trash collection service. The city has adopted a new trash and honeybucket haul ordinance, but the city council and city staff have not enforced the collection policy. RUBA staff does not have verifiable information on whether customers have been billed on a regular basis. RUBA staff has not been provided with copies of honeybucket or water and wastewater bills or invoices when requested. A manual accounting system is in place. Account receivable and payable are tracked manually, but due to lack of training and continuing turnover the manual system has not been kept up to date. RUBA staff observed that the city staff uses timesheets to keep track of hours worked. The mayor is responsible for calculating payroll, making payments and filing tax reports. This quarter, RUBA staff requested the mayor sign an Authorization to Request Federal Tax Information form, but a signed copy has not been returned. The existing chart of accounts does not identify categories in a reasonable and usable manner. There is no record that monthly bank reconciliations are being completed for all city and public utilities accounts.

Tax Problems

Essential Indicators
Answer Question
No 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
According city staff, the city uses a manual payroll system to calculate taxes. The mayor files tax reports and makes tax deposits using Electronic Federal Tax Payment System (EFTPS). However, RUBA staff could not verify whether the city and its departments have filed federal tax reports and made tax deposits this quarter because the city staff has not signed the Authorization to Request Tax information form. According to the latest lien watch report (January - February 2012), the city has unresolved federal tax liens.

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.
No 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.
No The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The City of Wales has workers compensation coverage through the Alaska Municipal League Joint Insurance Association (AMLJIA). The city paid and updated its workers compensation coverage which is effective through the end of June, 2013. Recently the city council adopted an at-will personnel policy. An AML attorney has reviewed it. A clause in the personnel policies states that all city employees will be given time to sign a new agreement with the city. Job descriptions are not up to date and do not outline employees' required duties. The new personnel policy outlines the process of personnel evaluation but there is no evidence that the city applies it accordingly.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
No The policy making body is active in policy making of the utility.
No The policy making body enforces utility policy.
No The utility has an adequately trained manager.
No 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.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The City of Wales is the owner of Wales Water System and the washeteria. The city council is the policy making body of the utilities and responsible for managing them. The city council does not enforce all of the utilities policies. For instance, collection of payments for honeybucket service is not enforced and the honeybucket department operates under a significant deficit, which is subsidized with funds from other sources. There appears to be no one in charge of overseeing public utility departments, including annual budget, monthly financial reports and management reports. The city and its utilities do not have an adequately trained city clerk.

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
No 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.
No The utility has completed and distributed its "Consumer Confidence Report".
No 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
According to the Alaska Department of Environmental Conservation website, Wales Water System has two water operators. The primary operator has a Small Water System Treated certificate that expires 12/31/2014. The backup operator has a Water Treatment/Distribution Provisional certificate that expires 12/31/2014. According to the primary water operator, the utility has a preventive maintenance plan. RUBA staff does not have a copy of the plan on file at this time. The mayor is the manager of all city departments, including the utility.. However, it is unknown whether the water operator provides the mayor with monthly operation and maintenance reports since the city has not provided city council meeting minutes requested by RUBA staff. The utility operates at the level of service proposed, but the water plant and the washeteria are very old and need to be replaced. RUBA staff was not provided with a copy of the Consumer Confidence Report. As of July 2012, the utility is on the Significant Non-Compliance (SNC) list due to higher than normal levels of uranium. Village Safe Water issued a request for proposals in April 2012 for uranium treatment options. WWS maintains an inventory control and critical spare parts list. The 2011 CCR has not been completed.