Quarterly Report: 2013, January - March (Q3), Kasaan

Community:
Kasaan 
Staff:
Lynn Kenealy  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kasaan 
Population:
66  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
4/22/2013 
Community Sanitation Overview:
The City of Kasaan is located on the east side of Prince of Wales Island and is connected by gravel road to the island's other communities. Water for the community is derived from an infiltration gallery (impoundment) at Linkum Creek. The water is then treated at the city's Class 1 treatment facility and piped to all homes in the core area. All of these homes utilize individual wastewater tanks and 95 percent are fully plumbed. The city has a new water treatment plant and new water source currently under construction, with potential to begin operations in spring, 2013. The city collects and deposits refuse weekly at the Thorne Bay landfill. Electricity is provided by Alaska Power and Telephone Company.  
RUBA Status & Activities This Qtr:
RUBA staff traveled to the City of Kasaan this quarter and met with city staff to go over the current water utility rate structures and discuss possible future rate studies. The Alaska Native Tribal Health Consortium is currently building a new water treatment plant and has already completed the construction of a new water tank. The system is proposed to be fully operational by mid April 2013. RUBA staff was provided with a tour of both the new and old facilities. RUBA staff completed a utility work plan with city staff and also provided assistance with agenda, minutes, and ordinance writing. Personnel-related questions were also discussed. RUBA staff will return to the community in June to conduct a water utility rate study for the new water treatment plant. Staff will also provide council and staff training on water rate setting in June. Remote assistance was also provided this quarter with resolution wording, questions regarding mayoral power, disposal of city property, and the federal systems aware management registration program (SAM). The city had been contacted by a company asking for a $599 fee to register the community with a new federal reporting system, SAM (Systems Award Management). This new system replaces the previous CCR system. With the assistance of information from grants staff, RUBA informed the city that registration with SAM is required for federal funding projects and it is free of charge. The system is not user friendly however, and some communities opt to pay a private company to complete the registration. RUBA staff provided documents regarding registration. Kasaan currently has a large water utility project, partially federally funded and is required to complete the SAM registration. RUBA will assist Kasaan and other communities in registration and save them the private company registration fee. 
RUBA Activities for the Coming Qtr:
The City of Kasaan has requested a water utility rate study to be undertaken after the new water treatment plant has been functional for a few months. The plant is intended to begin operating fully in mid April, and a tentative travel date has been scheduled for June, 2013, to conduct the rate study. A new RUBA assessment of management indicators is also needed at this time, and will be completed during the same visit.
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 FY13 budget was formally adopted by the city council in a timely manner. In this budget, utility department income and expenses are included as part of the overall city operating budget and appropriate funds are allocated for supplies, equipment, fuel, payroll, travel, repair and replacement costs, and certain facility expenses. The FY13 budget does not include a capital replacement fund, though the community has adequate savings for unexpected repairs. While the utility budgets realistically consider all costs associated with operating the water treatment facility, revenue generated from user fees is not sufficient to cover these costs. Rather, the city has elected in FY13 to subsidize the water utility for approximately $54,000 in cost overruns from the general funds. This overall budget is balanced with year-to-date revenues regularly exceeding year-to-date expenditures. Whenever adjustments to the original budget have been required to allocate additional funding to any line item, the city council has adopted budget amendments. The mayor, who also serves as the utility manager, delivers both written and verbal financial reports to the city council at its monthly meetings. RUBA staff reviewed three months of these written reports and found that they include a current balance sheet as well as a year-to-date budget vs. actual profit and loss statement. The city clerk states that the reports have been effective in clearly outlining the utility's financial position. A written 'Public Works Report' is also provided to the council each month which details the amount of water produced by the treatment facility, the amount of fuel and chemicals used, and a breakdown of the operator's work hours. Electricity in Kasaan is provided by the Alaska Power and Telephone Company. RUBA staff reviewed all five of the city's electricity accounts, including the water treatment facility account, and found that all payments are current and include Power Cost Equalization (PCE) credits. The community also has a city-owned bulk fuel facility, which is comprised of propane, gasoline, and diesel storage tanks. The city receives fuel deliveries every one to three months from Petro Marine in Craig and then retails this fuel to community members on a 'break even' basis. Adequate funds have been allocated in the city budget to purchase fuel as 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.
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 has 29 customers receiving sanitation services. Customers are divided into three categories and charged uniform flat rates. Residential customers are charged $60 per month for water and $20 per month for garbage collection. Senior residential customers are charged $40 per month for water and $13.75 per month for garbage collection. Commercial customers are charged $70 per month for water and $20 per month for garbage collection. These rates are set and adjusted by the city council through resolution in accordance with the rules set forth in Title 7 of the City of Kasaan Code of Ordinances. Along with rate setting procedures and customer class definitions, Title 7 outlines utility billing procedures, results of delinquency, discontinuance of service, and all other utility-related ordinances. Utility bills are mailed to customers during the first week of the month of service. Statements include the customer's name and address, the amount due for water and garbage services, previous statement balances, late fees, total amounts owed, terms, and the due date. Bills are considered due upon receipt and all bills not paid by the next billing cycle are considered delinquent, unless a written agreement has been made with the city clerk or the bookkeeper establishing a different due date. At the time of assessment, utility customers could pay their bills either by mail or in person at the city hall. However, the city is considering adopting a credit card payment option in the coming months. Customer payments are recorded in a carbon copy receipt book that notes the customer's name and address, the date, the payment amount, what the payment was for, the form of payment, and who the payment was received by. Payment information is then recorded in a computerized system using QuickBooks accounting software. The software can clearly identify which customers are current in their payments and which are 30 days, 60 days, or 90 days delinquent. Delinquent bills are automatically subject to a two dollar 'late payment charge.' Customers who remain delinquent for ten days are to have their water service disconnected until payment is made in full. By actively enforcing its adopted collection policies, the city has maintained a collection rate average of over 90 percent each month. In addition to its accounts receivable system, the city uses QuickBooks software in its accounts payable and payroll systems. The utility's purchasing system starts with utility staff obtaining a numbered purchase order form. That purchase order number is matched to a separate 'Purchase Order Register' which records the form number, the date, the vendor, the department, the name of staff requesting the purchase, and a description of the items being purchased. The mayor reviews the purchase request, verifies funding availability, issues approval, and allocates the purchase to a specific account, as outlined in the city's chart of accounts. All approved purchases and accounts payable are then recorded in the QuickBooks software. The city clerk, who also serves as treasurer, reconciles bank accounts on a monthly basis. RUBA staff has reviewed recent bank statements and found that reconciliations are indeed current.

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 Kasaan uses QuickBooks Pro to calculate, track, and report payroll liabilities and makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). The Internal Revenue Service's Taxpayer Advocacy Office confirmed on March 8, 2013 that Kasaan is current in its federal tax reports and filings. The Alaska Department of Labor and Workforce Development confirmed on March 19, 2013 that all state tax payments are current. There are no past tax liabilities or liens against the city.

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
All city employees are covered by an Alaska Municipal League Joint Insurance Association (AMLJIA) workers compensation insurance policy, effective from July 1, 2012 to July 1, 2013. The policy covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage is posted in all areas of employment, including the city hall, the post office, the city shop, and the water treatment plant. RUBA staff verified that the city is current in its payments to AMLJIA and that adequate funds have been allocated in the city budget for payments over the coming fiscal year. On April 12, 2011, the city adopted the 'City of Kasaan Employee Handbook.' This handbook was compiled with the assistance of AMLJIA staff and covers a broad range of topics, such as nature of employment, employee conduct, immigration law compliance, conflicts of interest, hiring practices, personnel files, job descriptions, benefits, leave, pay, travel, training, work conditions, and discipline. The handbook must be read, acknowledged, and signed by all city employees. Hiring practices and the employment of city council members are further detailed in Kasaan's municipal code. In accordance with these established policies, the city conducts employee evaluations at the end of a 90-day probationary period for new employees and then annually for established employees. Evaluations are documented on standardized employee evaluation forms which address job knowledge, quality of work, work output, attitudes and relationships, initiative and reliability, leadership, accomplishment of goals, and a list of future goals of employment. Each section is rated as either 'Outstanding,' 'Satisfactory,' or 'Not Meeting Job Expectations.' RUBA staff verified that evaluations, I-9s, W-4s, work release authorizations, and all other necessary documentation are included in confidential personnel files. These files are kept in a secure filing cabinet with limited access in the mayor's office. The city continues to budget and provide training opportunities to utility staff as needed and available. The mayor, two council members, and the city clerk attended a 32-hour RUBA Elected Officials Management for Rural Utilities course held in Klawock. The mayor and city clerk both completed the 32-hour RUBA Financial Management for Rural Utilities training course in Ketchikan and the Clerks Management for Rural Utilities training in Juneau. The city clerk also attended the 24-hour Introduction to QuickBooks course in Juneau, a notary public training in Craig on September 30, and attends the International Institute of Municipal Clerks (IIMC) conferences. As noted earlier, the City Mayor recently completed the 32-hour RUBA Planning Management for Rural Utilities training course in December.

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 Kasaan owns and operates the community's water utility. Ordinances giving the city the necessary authority to operate are contained in Title 7 of the City of Kasaan Code of Ordinances. The seven-member city council is the city's governing authority and the utilities' policy-making body. The council holds regular meetings as required by Alaska Statutes Title 29 on the second Tuesday of each month and conducts additional work sessions when required. To comply with Alaska's Open Meetings Act, the city consistently posts notice of each council meeting at least five days in advance at city hall, the Organized Village of Kasaan tribal office, and the library. Each notice indicates the type of meeting to be held, as well as location, date, and time. The council is active in policy making of the utility, as evidenced in the six months of meetings minutes reviewed by RUBA staff. These minutes show that financial and public works reports are regularly provided to and reviewed by the council and that ordinances and resolutions amending utility policy are adopted as necessary. Since September 2010, the city has made it a priority to review and update its code of ordinances by addressing such issues as abandoned vehicle policy, mission statements, records retention schedules, city official compensation, fee schedules, municipal acts, garbage services, and water utility services. The manager for the sanitation utilities is the city mayor. The mayor has broad experience as a former business owner. She has also completed the 32-hour RUBA Clerks Management, Organizational Management, and Financial Management for Rural Utilities courses, attended a portion of the 32-hour RUBA Elected Officials course, recently completed the 32-hour Planning Management course and is planning on taking the remainder of the utility management course series to become a certified utility manager in the next two years. The city clerk also serves as treasurer and utility clerk. The clerk began working for the City of Kasaan in October 2010 and has significant bookkeeping experience as well. Two city employees operate the water utility and hold the following endorsements and Continued Education Units (CEUs): The Primary Operator holds certification in Water Treatment, Level 1 - Expires December 31,2015. The Back-up Operator holds certification in Water Treatment, Provisional - Expires December 31, 2015 and Water distribution - Expires December 31, 2014. The utility's lead operator also attended the Alaska Rural Water Association's 'Prince of Wales Drinking Water Source Assessment and Protection Workshop' as well as Northern Testing Lab's(NTL)'Alaska Water Treatment Systems Class' in Ketchikan. The secondary water operator successfully completed a 32-hour RUBA Elected Officials Management for Rural Utilities course in Klawock. The city has adopted an organizational chart that clearly indicates levels of authority between city staff.

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 operators' certifications meet the requirements of the State of Alaska's Department of Environmental Conservation (ADEC) Division of Water. The backup operator's water treatment provisional endorsement will be advanced to a Level 1 certificate after 1950 hours of on-the-job experience. Utility staff also participate in the AMLJIA's safety and risk reduction program. The utility operators consult with the utility manager on a regular basis and provide both verbal and written status reports to the city council each month. The written reports are simple, logical, standardized fill-in-the-blank forms that allow the operators to report on a given set of issues. The reports include water treatment and consumption information, fuel consumption figures, staff hours worked, any complaints by utility customers, identified problems, problems that have been resolved, and preventative maintenance tasks to be completed. Staff report that the utility is operating at the proposed level of service and has not suffered any major problems or outages due to management issues. The utility is not listed on the Environmental Protection Agency's Significant Non-Compliance (SNC) list. Consumer Confidence Reports (CCRs) are completed and distributed as required by the Safe Drinking Water Act and state regulations. The most recent CCR was distributed to utility customers on time and detailed the source of Kasaan's water supply, the level of contaminants, precautions to be taken before drinking, and other information to properly inform the community of the water's quality and safety. The utility has adopted a 'Safety Policy and Handbook' and holds formal monthly safety meetings. The safety handbook is extensive and includes information on fire prevention, emergency action plans, hazard communication, machine safeguarding, lockout/tagout, materials handling, personal protective equipment, electrical safety, confined spaces, blood borne pathogens, and numerous other safety-related topics. The monthly safety meetings are documented on forms provided by AMLJIA which record the date, training topics discussed, materials reviewed, and employees present. RUBA staff reviewed three months of these forms and found that the mayor, the bookkeeper, the city clerk, and both utility operators attended each meeting. The utility now maintains a critical spare parts list. This list includes necessary items to have on hand such as pressure gauges, transducers, circuit boards, etc. The list also itemizes how many spare parts the utility should have and how many they actually have on hand. It also includes an average lifespan of each item, and the approximate replacement cost.