Quarterly Report: 2014, October - December (Q2), False Pass

Community:
False Pass 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
Aleutians East Borough 
Agreement?
Yes 
Agreement Date:
5/9/2012 
Entity:
City of False Pass 
Population:
37 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
3/9/2011 
Exp Date:
5/9/2014 
Last Updated:
12/18/2013 
Community Sanitation Overview:
The City of False Pass is located in the eastern Aleutian Islands about 650 air miles southwest of Anchorage. The city provides piped water, electric, refuse collection, and landfill services. Water for the community is derived from a nearby spring and reservoir, treated at a Class 1 treatment plant, and then stored in two 60,000-gallon tanks. Most homes are connected to the piped water system with over 80 percent being fully plumbed. Most residents of False Pass also have their own individual wastewater tanks; however, many are experiencing leachfield failure. Though not currently operating, seasonal wastewater from seafood processing would normally flow directly into an outfall line. A community-wide wastewater system is designed and funding for construction is being researched. 
RUBA Status & Activities This Qtr:
Current RUBA staff began working with the community on December 2, 2013. Since then, RUBA staff has contacted city staff offering to update the city's utility management assessment, which was last completed in March 2011. RUBA staff has also worked to review monthly financial reports, council meeting minutes, and utility electric bills to ensure that the community continues to satisfy essential and sustainable indicators. Further, RUBA staff confirmed with appropriate entities that the city is current with its state and federal tax payments, and that it continues to hold a valid workers' compensation insurance policy.  
RUBA Activities for the Coming Qtr:
RUBA staff will communicate with the city to schedule an on-site visit to update its utility management assessment and will continue to offer any training and technical assistance necessary.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
26 of 27
Total Score:
52 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
Yes 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 city adopted its FY14 budget by non-code ordinance on June 28, 2013. The city projects in the budget to receive $10,850 in income from its water utility services over the course of the year and to spend $16,600 on water-related expenses, such as chemicals, testing, and parts. However, while additional city-wide expenses identified in the budget, for example insurance and bookkeeping expenses, likely also contribute to the cost of sanitation service in the community, they are not classified as utility expenses. With these other expenses instead included as line items in the overall city budget, it is not immediately clear what the total expenses associated with operating the water utility in False Pass truly amount to. Nonetheless, the city realistically plans in this overall budget to meet the cost of providing water to the community this fiscal year with a combination of user fees and subsidies from revenue derived from state revenue sharing and from alcohol, bed, sales, and raw fish taxes. RUBA staff has reviewed several months of monthly financial reports submitted to the city council, the utility’s governing body, and found them to appropriately compare budgeted amounts to actual year-to-date income and expense values. RUBA staff also verified that the city is current in paying its electric bills and is able to purchase heating fuel from Peter Pan Seafoods as necessary. A review of meeting minutes shows that the utility manager, who is also the operator, makes regular reports to the council on sanitation-related issues.

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 authority and responsibility to bill, collect, and disburse utility service fees have been duly adopted by the city council and included in Title 6, Chapter 6 of the city’s municipal code. Section 9 of this chapter also establishes specific monthly water service rates according to customer class, as well as connection fees and deposit requirements. A copy of these ordinances are readily available to residents on the city’s webpage. Customers are billed jointly for water and landfill services each month. A review of recent cash-basis financial reports indicates that the city’s collections policy is being enforced adequately, with income from user fees at the end of December 2013 exceeding the income expected in the budget prorated at six months. The city clerk, who also serves as the utility clerk, reported to RUBA staff that only a couple of customers do not pay their bills on time and in full. The city’s balance sheet shows that accounts receivable have decreased by more than 25 percent since the same time last year and that accounts payable amounts are negligible. The city utilizes QuickBooks for all financial accounting processes and the city clerk is experienced using the software. All cash received is appropriately kept in a safe within the city office and deposited to the bank on a weekly basis. The city issues receipts to each customer upon payment. Monthly bank reconciliations are done utilizing bank statements and QuickBooks. The chart of accounts lists all bank accounts, assets, liabilities, equities, income, and expenses. Purchase requests are reviewed by the clerk according to the budget and require authorization by the mayor.

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 Taxpayer Advocacy Office confirmed on December 16, 2013 that the City of False Pass was in compliance with federal employment tax filing and deposit requirements and that there are not recorded notices of federal tax liens against the city. The State of Alaska's Department of Labor and Workforce Development, Employment Security Division confirmed on December 17 that the city was in compliance with state tax filing and deposits due to that date. The city is not listed in the September-October 2013 Lien Watch.

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
RUBA staff verified on December 18, 2013 that the city of False Pass has a valid workers’ compensation insurance policy in place through the Alaska Municipal League Joint Insurance Association (AMLJIA). The city’s personnel guidelines are included in various chapters of the city’s municipal code. The roles and responsibilities of the council, the mayor, and the city clerk, who serve as the utility’s governing body, supervisor, and utility clerk respectively are included in their own separate code chapters. Title 9, Chapter 75 outlines additional personnel policies that apply to all city staff, such as the operator, and cover hiring procedures, employee classification, compensation, evaluations, discipline, leave, and other matters. Employee files, including formal job descriptions and I-9s, are locked in the mayor’s office. Training is provided to employees as needed and when funding is available; there is no allocation for training-related expenses in the FY14 budget.

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
Title 6 of the city’s code of ordinances clearly indicates that the City of False pass owns and operates the community’s sanitation utilities and gives the city the necessary authority to operate these utilities. A review of six months’ meeting minutes shows that the council, the utilities’ governing body, actively reviews utility finances and other issues, and financial reports indicate that collections policies are being adequately enforced. The council convenes the third Tuesday of every month for regular meetings and special meetings are called as necessary. The city posts meeting notices in accordance with Alaska’s Open Meetings Act by the city clerk/bookkeeper, who has more than five years of experience on the job. As noted in the Operation section of this report, the utility manager/operator is provisionally certified at the level required by the Alaska Department of Environmental Conservation for the classification of the community’s water system. The city has adopted an organizational chart.

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.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The utility’s lead operator, who is also the utility manger, is adequately trained to operate the city’s Class 1 water treatment plant and provides monthly reports to the utility’s governing body. The lead operator holds provisional certification which expires at the end of 2015, but has already met the required number of continuing education units (CEUs). Alaska’s Department of Environmental Conservation lists one other primary operator and two back-up operators with False Pass’s utility, but they do not possess any certification. The city participates in the AMLJIA safety meetings and has adopted a resolution to continue participation in safety meeting teleconferences. A copy of the CCR was distributed as required and the water treatment plant was not listed on the October 2013 Significant Non-Compliance (SNC) list. An Operations and Maintenance Manual submitted by the plant engineering firm in 2004 is kept on hand at the water treatment plant. There is a critical spare parts for the utility but no inventory control list. The operator is working on completing an equipment list and the critical spare parts list is being updated. There have not been any major outages due to management issues in the past three years.