Quarterly Report: 2012, July - September (Q1), Wales

Community:
Wales 
Staff:
Leroy Seppilu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Wales 
Population:
136  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/26/2011 
Community Sanitation Overview:
Two new groundwater wells have been drilled and a pumphouse and watering point enclosure are needed. Currently, water is derived from Gilbert Creek during the summer, and residents haul treated water from a 500,000-gal. storage tank at the washeteria. Some residents use untreated water from Village Creek. Almost all residents use honeybuckets, and very few homes currently have plumbing. A honey bucket haul system is in place. The school and clinic are served by piped water. There are two septic systems - one for the school and a second for teacher's housing, the clinic, and the city building. A master plan to implement a piped system has been completed. There is no permit for the landfill. Village Safe Water is applying for sanitation grants for the community to upgrade the washeteria. The new facility will most likely be a multi-purpose facility to include the washeteria, water plant, and a new clinic. The condemned City dome will probably be torn down and its location used for the new multi-purpose facility. 
RUBA Status & Activities This Qtr:
On August 2, Nome RUBA staff traveled to the City of Wales to perform a RUBA management assessment. The initial assessment results identified several indicators that are not currently being met. One of the main issues is the need to increase the collection rate for the honey bucket haul service. The utility has at least 44 residential customers and charges them $20 a month. The city council requested RUBA assistance in helping them meet the unmet indicators. A draft assessment was sent to the city for a ten day review before being finalized.  
RUBA Activities for the Coming Qtr:
The City of Wales has not met all of the essential capacity indicators in the areas of Utility Finance, Accounting Systems, and Organizational Management. RUBA staff will continue to assist the city in meeting these indicators.
Scores:
 
Essential Indicators:
17 of 26
Sustainable Indicators:
21 of 27
Total Score:
38 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.
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.
No 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 Wales passed the FY 12 budget on May 26, 2011. Last year the city's revenues for the honey bucket haul service was $2,010 and expenditures $39,220, with a deficit of $37,210. The city charges a flat rate of $20 a month. If the collection rate was 100%, revenues would be about $10,560 a year. Last fiscal year (FY 11), the collection was approximately 19% ($2,010). It should be noted that the community of Wales leads a very heavily subsistence lifestyle and most of the honey bucket service customers do not hold permanent jobs and work seasonally, if at all. The city council feels that it is important to continue this service as it is a benefit for the health and welfare of the community it serves. With that in mind, the Wales City Council has determined that $20 is the best rate and customers could not afford more than that at this time. The city subsidizes the deficit from the Community Benefits Share Program that Norton Sound Economic Development Corporation runs and funds, as well as funds from the city's general fund. However the subsidy is not listed as a line item. In the past the city provided monthly financial statements to the city council and public. Mayor Crisci stated that the previous city clerk was making them. However, RUBA staff was not provided with the latest copy and cannot verify any financial statements are being presented to the council. The City of Wales purchases diesel through Norton Sound Economic Development Corporation's Community Benefits Share Program funds. The City has about 6,900 gallons of diesel fuel in its inventory from last year. The city was expecting to have an additional 6,500 gallons delivered. A monthly manager's report is prepared and presented to the council. Budget amendments are completed and adopted as needed.

Accounting Systems

Essential Indicators
Answer Question
No 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.
No 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 Wales will need to update its ordinances to include all services the utility offers. The city is billing the customers regularly each month, but does not actively make efforts to collect the past dues from the honey bucket haul service. All employee record-keeping, payroll and tax calculations are done manually. However, the city is behind at least one quarter with its payroll entries into its manually done payroll records. A cash receipt system is in place that records incoming money and what it was for, as well as, a cash disbursement system that records how much money was spent.

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
At the city's request and with its permission, RUBA staff called and spoke with an Internal Revenue Service (IRS) representative, as well as the State of Alaska's Employment Security (ESC) Division to clarify the city's status with quarterly tax reports, total tax liabilities and payments. The previous city clerk had made the IRS payroll payments for the first quarter but did not submit the reports. The city will need to submit the IRS Form 941 for the 2011 first quarter. The second quarter 941 Form will also need to be completed and payment submitted. The city clerk and office aide will need to follow procedures for submitting payments using electronic payments as set by IRS. The temporary city clerk, Jamie Ahkinga and RUBA staff searched the city's files and found a copy of the ESC quarterly report for the first quarter. The city needs to complete the second quarter ESC report and include a payment for the payroll tax liability.

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.
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 of Wales has Workers' Compensation coverage through Alaska Municipal League Joint Insurance Association (AMLJIA). It is effective through end of the 2011 calendar year. The city does not have job descriptions for positions. The city has a personnel policy and generally follows procedures for hiring employees; a two week notice is posted and if there are no qualified applicants, the city council approves to the mayor to re-post notices. Personnel folders contain at least: I-9, Job Application and Letter of Acceptance. The utility has a probationary period for new employees. The utility provides training opportunities to staff as needed and available, as funds are available.

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.
No 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.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The Wales City Council is the policy making body of the utilities. The council is active in policy making of the utility, but does not consistently enforce the policy they enact. The position of the city clerk also acts as utility clerk and bookkeeper. The clerk recently resigned. When she resigned, the city got behind with tax reports and payments. The mayor's seat is a paid supervisory position. He works two to three hours a day at the city office and makes the day-to-day decisions. The city council has hired a new city clerk who has experience with bookkeeping, payroll and tax record keeping. She previously worked for the City of Diomede. The utility has adopted an organizational chart. The policy making body meets as required and complies with the open meeting act.

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.
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 City of Wales' sanitation project is funded by Village Safe Water. The city is slated to have a new washeteria built within the next two years. The current washeteria is very old and in disrepair. The utility operator, Larry Sereadlook holds a Provisional 1 certification. His certification expires at the end of 2011. The City of Wales has completed the 2010 Consumer Confidence Report (CCR). The utility is not on the Significant Non-Compliance (SNC) list. They maintain an inventory control and critical spare parts list.