Quarterly Report: 2012, April - June (Q4), Larsen Bay

Community:
Larsen Bay 
Staff:
Brice Eningowuk  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Larsen Bay 
Population:
89  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/26/2012 
Community Sanitation Overview:
Water is supplied from two sources, a reservoir and a well that is groundwater under the direct influence of surface water, and is stored in a 200,000 gallon tank. A water supply line is also connected to the penstock of the hydroelectric plant and used a majority of the time to reduce utility expenses to both the service plant and the customers. All 40 homes are connected to the piped water system. A community septic tank with an outfall line serves these homes, and the majority of them are fully plumbed. Weekly refuse collection services are provided. The community incinerator is currently unusable and all refuse is deposited at the landfill site. A water treatment plant project from Village Safe Water (VSW) is nearly complete.  
RUBA Status & Activities This Qtr:
On May 29 to June 1, RUBA staff traveled to Larsen Bay to work with the city staff on creating monthly financial reports and to gather information regarding utility rates. RUBA staff met with city staff and addressed the errors in the memorized transactions list within QuickBooks. RUBA staff generated the collections rate for the water utility and submitted it to the Alaska Native Tribal Health Consortium (ANTHC) project engineer to put into the water utility business plan. The collections rate is at 99.97 percent for water utility customers. On May 30, RUBA and city staff addressed the Power Cost Equalization (PCE) monthly utility reports. The PCE program reimbursements are used to cover a loan from the Alaska Energy Authority (AEA). The water utility is subsidized by the fuel sales that AEA loan addresses. On May 31, RUBA attended a council work session regarding city finances and administrative duties. RUBA staff provided advice on the city budget that was introduced in the May 9, 2012. On June 26, Anchorage RUBA staff was contacted to create a water meter log similar to the Power Cost Equalization log used for billing and reporting power generation. The water meter log created uses the meter number customer name, the rate, and administrative fees to calculate how much to charge customers for their water usage. 
RUBA Activities for the Coming Qtr:
The city council has a signed RUBA assistance agreement. RUBA staff will continue on-site visits quarterly to assist the community to meet all of the unmet management indicators.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
20 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 FY12 budget has the water/wastewater income at $60,110 with a transfer from the city market in the amount of $11,200 and the expenditures are listed at $71,310. The FY13 budget has the water/wastewater income at $31,500 with a transfer from the city market in the amount of $10,000 and the expenditures are listed at $21,100. The utility manager is the primary utility operator. The manager provides a verbal report to the council in addition to a financial statement in a separate agenda line item.The water and wastewater utility electric bills are issued for the pumphouse and checks for payment are issued from the city to the city water utility. The city received sufficient fuel from Crowley to meet usage needs until the fall order. The utility has a repair and replacement (R and R) account, but funds are not listed as a line item in the utility expenditures. The YTD expenditures for the utility are equal to those budgeted as stated in the monthly financial report. Budget amendments are utilized when needed.

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.
No 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 staff is in the process of providing copies of the original ordinances to be codified. Amendments to the water and wastewater ordinances need to be codified. The city utilizes QuickBooks Pro 2012 and reports are made utilizing the program. The city accounts receivable report was generated and shows all transactions for the water and wastewater utility for all customers. The city accounts payable report was generated and shows no accounts to be paid currently. When the city receives cash, the customer is offered a receipt and the data is then entered into QuickBooks following the transaction with the ledger/receipt number. Every Monday, the city deposits the cash into the bank account. A chart of accounts was also generated and lists all current assets, liabilities and equities for the City of Larsen Bay. Monthly bank reconciliations were done at the end of the month by the previous city clerk; the new clerk is learning how to conduct bank reconciliations from the previous clerk and RUBA staff. All purchases are routed from the employee to the mayor for approval, and from the mayor to the clerk for processing.

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 IRS report dated May 31, 2012 and Electronic Federal Tax Payment System receipt dated June 6, 2012 show the city is compliant with federal tax filing, deposits and has no record of a lien against the city. The Department of Labor and Workforce Development, Employment Security Division's report from June 13, 2012 states that the city is in compliance with state tax filing, deposits and is not on the March-April 2012 lien watch.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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
The city has an insurance policy with Alaska Municipal League Joint Insurance (AMLJIA) from July 1, 2011 to July 1, 2012. AMLJIA has confirmed that the city will continue to purchase insurance coverage until July 1, 2013. A copy of the personnel policies was provided that has sample job descriptions, evaluation/hiring processes, and a probationary period of 30 days. The employee personnel files are kept in a locked file cabinet in the city clerk's office and have I-9, job application, and all appropriate employee and employer correspondence.

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 City of Larsen Bay is the owner/operator of the water and wastewater utility. The ordinances are updated as needed and those ordinances are followed in regards to collection policies. The primary operator is part-time as he is both the water/wastewater and electrical operator; he is scheduled to be at the pumphouse for two weeks and other operators cover the remaining weeks in a month. The city clerk oversees all the bookkeeping for the utility; the billing clerk receives and enters all incoming transactions into QuickBooks. The organizational chart is in the personnel policy manual and includes all employees with the exception of the city clerk and billings clerk in a separate branch under the mayor. The organizational chart does reference Title 29 and regulatory agencies in separate branches above the city council.

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.
No 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
There is an operations and maintenance manual for the existing pumphouse dated 1981. The new pumphouse is approximately 90 percent complete and once the project is finished, a new operations and maintenance manual will be provided. The city has a monthly safety meeting with the water/wastewater/electric operators. There have been no major outages other than electric power outages due to broken lines and city employees were able to assess the situation prior to the linemen from Kodiak arriving to repair the lines. The water utility is operating at a level proposed, but customer rates are set too low; the water utility is subsidized by the electric utility. The last CCR on file is the 2009 CCR. The water utility is on the April 2012 SNC list for failing to sample for nitrate, TTHM/HAA5, and VOCs, and failing to sample/renew waiver for SOCS. To return to compliance the utility must sample and comply with nitrate, TTHM/HAA5, and VOCs regulations and renew SOC waiver. The city does not have an inventory control list as there is a new plant that is near completion. There is no record of a critical spare parts list with the city.