Quarterly Report: 2012, October - December (Q2), Pelican

Community:
Pelican 
Staff:
Jennifer Nu  
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:
1/31/2012 
Community Sanitation Overview:
Pelican is located on the northwest coast of Chichagof Island along Lisianski Inlet, with the majority of the community built on pilings over the tidelands. Pelican has a maritime climate characterized by cool summers and mild winters. Summer temperatures range from 51 to 62 degrees Fahrenheit and winter temperatures range from 21 to 39 degress. In 2003, the city acquired its piped water system from Pelican Seafoods, a subsidiary of Kake Tribal Corporation. Water for the city is derived from a dam and reservoir system on Pelican Creek and is treated with chlorine. The city completed a piped sewage system with ocean outfall in 1989 and today connects about 75% of Pelican's homes. This system includes four 10,000-gallon septic tanks with the city hiring a disposal truck from Juneau to pump sludge approximately four times each year. The city provides garbage collection services and either recycles or incinerates the refuse at the city landfill. Electricity is provided by the Pelican Utility Company. 
RUBA Status & Activities This Qtr:
RUBA staff provided Pelican's assistant utility clerk with assistance in finding the federal wage rate for electricians. The city needs to set a wage for an electrician to work on their ice machine. RUBA worked with DCRA grants administrators in Juneau and Fairbanks to ensure that the correct wage rate was sent. The assistant city clerk was advised to verify that the grant agreement itself is in proper order by contacting the relevant grants administrator. RUBA staff is also in touch with Pelican's utility clerk and assistant clerk with regards to questions about their financial reports. RUBA staff will continue to offer assistance to ensure that financial reports accurately reflect the city's finances. RUBA staff verified this quarter that the city has made monthly payments to the Alaska Municipal League Joint Insurance Association for its workers compensation insurance coverage.  
RUBA Activities for the Coming Qtr:
RUBA staff will continue work with city officials to schedule RUBA trainings as requested by the city. Now that the RCA has approved the city's petition to no longer be economically regulated as a condition of operation, RUBA staff will also be available to assist the city in addressing its utility fee structure and in amending its utility ordinances.RUBA staff will continue to monitor financial reports in the coming quarter to ensure that accurate financial information is presented to the city council each month.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
20 of 25
Total Score:
46 of 51

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.
N/A YTD revenues are at a level equal to or above those budgeted.
N/A 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 adopted a balanced and realistic FY12 budget by non-code ordinance on May 31, 2011. Separate sections for water, sewer, and garbage services are included in the overall budget. Revenues and expenses are listed with their respective service. The FY12 budget projects an increase in revenue from water utility user fees of $7,000 when compared to FY11 figures. The FY12 budget also shows a cut in certain utility-related costs. The current monthly water utility user fees of $20 for residential customers and $30 for commercial customers do not produce sufficient income to cover utility operating expenses or repair and replacement costs. This rate structure originates from a financial arrangement made when the city acquired the piped water system. In 2003, Kake Tribal Inc. sold the water system to the City of Pelican and transferred the Certificate of Public Convenience and Necessity. As part of the transfer, the city agreed to be economically regulated by the Regulatory Commission of Alaska (RCA) until such time that the Pelican Seafoods processing plant had ceased operations for twenty-four consecutive months. Pelican Seafoods has now been out of operation for the twenty-four months cited in the agreement and the city petitioned the RCA to have the regulation requirement lifted. On August 4, 2010, the RCA granted the City of Pelican exemption from further economic regulation. With those regulations now lifted, RUBA staff will be able to assist the utility in addressing its utility fee structure should the city choose do so. Until then, funds from other sources, such as the city's general fund, are necessary to subsidize operating expenses and any savings are used for unexpected repairs. The firm Altman, Rogers and Co. performs an audit for the city annually. In order for the city to monitor its financial standing, the city council is provided with monthly financial reports that include a profit and loss statement and a balance sheet. A budget vs. actual profit and loss is not currently included. Accumulated errors in the city's QuickBooks accounting file in previous months has meant that those financial reports do not necessarily reflect the exact financial status of the city. The balance sheet, for example, understates current assets while the current liabilities may be overstated. The city clerk/treasurer is aware of the need to improve the accuracy and readability of financial reports, and will be in communication with RUBA staff for feedback. A QuickBooks contractor visited the community in April to help clear up these errors and to create a new QuickBooks account for the city. While the city clerk and assistant clerk have made significant progress in organizing the old and new acocunting files, further efforts to reorganize the city's finances will be necessary because the most recent set of financial documents still do not match the city's adopted budget. Water utility expenses and revenues are not adequately listed on the financial report, so the state of the utility's financial sustainability cannot be determined by the financial reports in their current state. The utility clerk has agreed with RUBA staff's recommendation to include detailed water and utility expenses and revenues on the profit and loss statement. The utility clerk will also include a profit and loss budget vs. actual statement in monthly financial reports in order for the utility's governing body to gain a clear understanding of the utility's financial situation. The community receives fuel shipments from Kake Tribal Fuel on a year-round basis. The fuel is stored at a bulk fuel storage facility owned by Pelican Seafoods, a subdivision of Kake Tribal Corporation. A sufficient level of fuel reserves is maintained at these facilities in order to accommodate the community's needs and adequate funds have been allocated in the city budget to purchase additional fuel as necessary.

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 of Pelican has adopted and actively follows a collections policy. That policy requires that utility bills be distributed on a monthly basis. The account receivables system documents customer payments and reports past due accounts with corresponding amounts. The city actively pursues delinquent utility accounts. Now that the water utility is no longer economically regulated by the RCA, RUBA staff will be available to amend the rate structures in the city's utility ordinance should such assistance be requested. Pelican uses QuickBooks Pro for its accounts receivable, accounts payable, and payroll systems. The city clerk/treasurer and the assistant city clerk are both familiar with QuickBooks, but their current system produces reports that contain minor errors. For instance, a profit and loss budget vs. actual statement showed budget values that did not match the current adopted city budget. The city clerk/treasurer is working towards correcting financial reports to ensure that the city council receives accurate, understandable financial reports upon which to base policy decisions. The city's utility clerk also agreed to RUBA staff recommendations that future reports include a profit and loss budget vs. actual statement and detailed information on utility revenues and expenditures. The clerk/treasurer received additional training at a RUBA Introduction to QuickBooks course in Juneau in April 2011 and formal utility finance training in August 2011. To back up the city's QuickBooks system, the city maintains a written receipt system to record incoming funds and other transactions. The city clerk is tasked with completing all monthly bank reconciliations. Additionally, the city uses a purchase order system for all of its purchases and maintains a cash disbursement system to track expenditures.

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 Pro to calculate, track, and report its payroll tax liabilities. RUBA staff confirmed on December 12, 2011 that the city is current in filing federal and state tax reports and in making its tax deposits. Federal payroll tax deposits are made by the city through direct deposit and IRS 941 deposit slips are submitted appropriately.

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.
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
The city currently carries workers compensation insurance through AMLJIA. That policy is valid until June 30, 2012 and covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. A copy of the workers compensation policy is posted in accordance with state statute at the city hall, the city shop, and the community library. Pelican implements its personnel policy. Written job descriptions for the utility department are in place, though they have not been updated for several years and the city is lacking in adequate job descriptions for all other municipal positions. The utility clerk is aware of this need and has prioritized updating job descriptions in the coming quarter. RUBA staff will be available to assist with this process should the utility staff request assistance. A formal evaluation process is only used for new hires and these evaluations do not correlate entirely to the duties set forth in employees' job descriptions. However, a satisfactory hiring process is provided for in the city's municipal code. There are also personnel folders for every municipal employee which contain the recommended documentation including an I-9 and the employee's original job application. The city only uses letters of acceptance for its utility positions. The city has a probationary period for new hires that includes systematic orientation, job training, oversight, and performance evaluations. Training is provided to employees on an as-needed basis, demonstrated by the city clerk/treasurer's participation in a RUBA 'Introduction to QuickBooks' class in Juneau April 11-15, 2011 and a 'Financial Management for Rural Utilities' course in Ketchikan August 15-19, 2011.

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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
As the primary policy-making body for the utility, the city council holds regular meetings on the first Tuesday of each month, with special meetings and executive sessions called as necessary. Meetings are held in accordance with the rules set forth in the Pelican Municipal Code. This quarter, the city clerk reported to RUBA staff that the council was unable to hold two of its regular meetings due to the holidays and other seasonal interruptions. The council is considering changing the council meeting date to a day that would ensure a quorum for future meetings. To comply with the requirements of the Open Meetings Act, the city clerk also posts notices that contain the date, time, and place of each meeting at least twenty-four hours beforehand. Utility policy is laid out in titles nine and thirteen of the Pelican Municipal Code. The utility's organizational chart is included in the utility business plan. The city and Village Safe Water have recently made significant improvements to Pelican's water treatment and distribution systems. With these improvements, the city's water system has moved from a 'Small Level T' (treated) drinking water system classification to a 'Class 2' system under the guidelines of the State of Alaska's Department of Environmental Conservation, Division of Water. The city's lead utility operator, Allen Stewart, is currently certified to operate only a 'Class 1' system and will need additional training to become certified in the operation of the utility's new equipment and processes. The utility operator currently has the following certificates: Water Treatment Provisional Exp. 12/31/11 Wastewater Collection 1 Exp. 12/31/12 Water Distribution Provisional Exp. 12/31/11

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
While the city had been periodically subjected to boil water advisories for inadequate chlorine contact time and filtration, those advisories were suspended indefinitely in June of 2010. Further testing on October 20 determined that the city did to return to the boil water advisory. After six months of water quality reporting compliance, Pelican has been removed from the EPA's Significant Non-Complier (SNC) list. With the assistance of Village Safe Water, the city has upgraded its water treatment and distribution systems which include a new 101,000-gallon storage tank. On June 25, 2010, DEC issued the city conditional approval to operate its new systems, though continued approval will be contingent upon further testing results and findings. The utility operators consult with the mayor on a regular basis and provide verbal status reports monthly. The mayor, who also serves as the utility manager, also visits the facilities and conducts occasional spot-checks for maintenance items. The utility completes and distributes its Community Confidence Report (CCR) in compliance with state and federal regulations. The operators maintain an adequate level of supplies and some spare parts for the utility. The operators do not maintain an inventory control or critical spare parts list; however the city's mayor confirmed that a spare parts list is currently being drafted and will be implemented in the near future. The operators have a safety manual and preventive maintenance plan for Pelican's sanitation facilities. These items are included in the larger utility operations manual. The operators meet daily and conduct safety meetings on a monthly basis. These meetings are annotated in a safety log which records the date, the issues addressed, and the names of the personnel present at that meeting. In addition to the safety meetings, potential risks and safety procedures are routinely discussed before the operators begin a project.