Quarterly Report: 2011, April - June (Q4), Chignik Lake

Community:
Chignik Lake 
Staff:
Barbara Higgins  
DCRA Regional Office:
 
Gov't Type:
Federally Recognized Tribe 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
Chignik Lake Village 
Population:
117  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/3/2011 
Community Sanitation Overview:
Well water is piped directly to 32 households. An old wood staved storage tank has been dismantled and a large steel storage tank has been constructed farther from the community, at a higher elevation and close to a series of new wells. As part of the project, a new water treatment facility will also be built. The school has its own well. Approximately 70% of the homes are plumbed. Fifteen HUD homes are connected to a central sewer system with a waste pump and lagoon; the remainder use individual septic systems. Funds have been provided by VSW to develop a water and sewer Master Plan. Refuse is disposed of by residents in the landfill. A power consolidation project was recently finished that generates power year-round from school district owned equipment, and is distributed to the community by Chignik Lake Electric. IGAP funded a project to install Powerstat prepay electric meters for residents in the village, which was completed in early 2006. New prepay electric meters are scheduled to be installed sometime this year and 
RUBA Status & Activities This Qtr:
On June 15, 2010 the village council signed an agreement to transfer management of the water utility over to the Alaska Rural Utility Cooperative (ARUC). ANTHC has scheduled a septic tank replacement project for this summer construction season. Eighteen septic tanks have been scheduled for replacement and are in route to the community. The water treatment plant lost funding for the project and now there is not enough dollars to do the project. ANTHC will have to start the funding process again to regain funding for this project. Other projects are the water service lines that need replacement. There currently are five HUD homes that need water/sewer service and the homes have been set for occupancy in the fall. ANTHC will be working on the services to these homes. This quarter Deregulation of the electric utility was certified by RCA. In December 2010, Chignik Lake Electric Company requested Dillingham RUBA staff assist the company to regain power cost equalization (PCE) status with the Alaska Energy Authority(AEA). Part of the work included filing annual reports to the Regulatory Commission of Alaska. RUBA staff researched the utility's certificate of convenience and found the annual reports being required by the utility were for a regulated utility. Research found that in prior years deregulating the utility had been discussed however the process to deregulate had never taken place. Alaska Statues set forth a procedural requirement in 3 AAC 49.010-3 AAC 49.050, that require an election of the customers to achieve deregulation. The process has taken just over four months, several visits to the community and many hours devoted to the election process and requirements to make it happen. Today an order certifying the election results by the commission has been received and is on file at RCA. The order states that the Chignik Lake Electric Utility shall be deregulated. What this means to the utility; a regulated utility must get prior approval from the RCA in order to change its rates and policies. The approval process may take several months to complete. The Alaska Statues provides a mechanism whereby the customers of a power company may vote to become exempt from regulation. When a utility is exempt from regulation, the local governing body can decide on electric rates and policy changes without approval of the Regulatory Commission. A more simplified bookkeeping system can be used than when regulated as well reducing the burden of higher reporting requirements. Work is now underway to bring the utility back into compliance with the power cost equalization program with reporting. The utility is undergoing a complete revamping of its management and operational practices. RUBA staff will continue to provide assistance as the company reorganizes. 
RUBA Activities for the Coming Qtr:
RUBA will continue to maintain contact with Chignik Lake and ARUC as they strive to maintain compliance.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
27 of 27
Total Score:
53 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 utility budget is balanced and realistic. ARUC provides a subsidy when customer revenues fall short of expenditures. This quarter expenditures are exceeding revenues for the period ending May 2011. The subsidy is listed in the ARUC monthly financial reports and does appear in the budget. ARUC staff produces monthly financial reports presenting year to date activity. Manager's reports are prepared and budgets are amended when 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
ARUC bills customers monthly. They operate under an agreement with the village council and have in place an ordinance that includes a collection policy. ARUC maintains a workers compensation policy and uses computerized accounting to monitor and track finances for the community. All accounting is maintained in ARUC's main office and is under the direction of the utility manager. ARUC maintains a chart of accounts, reconciles bank accounts, and utilizes a purchasing system that requires approval prior to purchase.

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
On June 15, 2011 RUBA staff received confirmation from the IRS and Department of Labor that ARUC is current with all tax reports and deposits.

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
According to the Notice of Insurance, workers compensation insurance is provided by the AK National Ins Co from July 1, 2010 to July 1, 2011. A 06/09/2011 check of the Division of Worker's Comp website confirmed that the policy is in effect. ARUC abides by a comprehensive personnel policy, maintain personnel folders, utilizes a probationary period for new hires, and provides training opportunities to staff.

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
ARUC oversees water/wastewater utility management with the village council through written, contractual agreement, and actively enforces utility policy. According to the agreement, ARUC is to meet with an advisory council that includes representation from the community. ARUC continues to manage utility billing and collection services. There is a trained operator.

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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The operator for the water/wastewater utility is Operator in Training (OIT) certified, and has held the position for several years. The utility appears to be operating at a level of service acceptable to the community; however, their system no longer has a storage tank, and depends on a pump to maintain water pressure (24 hours a day). Some residents report occasional low water pressure; there is some concern about the availability of water for fire fighting. The administrator might receive a routine verbal status report from the operator. The administrator stated a current CCR had been completed, but there was no copy available for review. The utility is not on the current SNC list. Operation of the utility would improve greatly if there were monthly written operation and maintenance reports from the operator. Safety will be enhanced with regular safety meetings and the implementation of a safety policy which ARUC will provide.