Quarterly Report: 2013, July - September (Q1), 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:
10/31/2012 
Community Sanitation Overview:
Water is supplied from two sources, a reservoir and a well that supplies a 200,000 gallon tank. The well is classified as a groundwater under the direct influence of surface water. 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 July 20, Anchorage RUBA staff contacted the city clerk to inquire about city financial reports and was informed that the city is behind in paying and filing payroll taxes. Anchorage RUBA staff traveled to Larsen Bay from July 30-August 2, 2012 to work with city staff to provide utility financial report assistance with the certified financial statement for FY11, payroll taxes, election procedures assistance and Power Cost Equalization (PCE) program reporting assistance. City staff had started the FY11 certified financial statement and RUBA reviewed the document and made recommendations. There was a concern that city payroll taxes may not have been paid and the city clerk was not trained in processing city payroll taxes. RUBA staff contacted the RUBA QuickBooks consultants, the IRS Taxpayer Advocate Service, and reviewed the city's IRS Form 941 copies to determine if the payroll taxes are paid. It was determined that the payroll taxes have been processed for the quarter. The city received information from the Kodiak Island Borough regarding their elections. RUBA staff advised city staff to begin posting the borough information and generating the municipal election notices. RUBA staff assisted city staff in creating the municipal elections posting that follows the local code to include the appropriate council seats and terms. RUBA staff also provided assistance correcting errors in the PCE reports. The electric utility has been using the base rate for the electric utility and not the PCE rate established by the Regulatory Commission of Alaska. This error had the city providing local residents and community facilities a higher PCE subsidy, which the city has to subsidize. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue on-site visits quarterly to assist the community to meet all of the unmet management indicators. The city clerk's last day of employment is October 9, 2012. Travel to the community is planned for October 15-17, 2012 to assist the newly appointed city clerk.
Scores:
 
Essential Indicators:
25 of 26
Sustainable Indicators:
22 of 27
Total Score:
47 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.
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.
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 shows the water/wastewater utility is subsidized by the city-owned grocery store. Monthly financial reports have not been prepared and submitted to the council. The water and wastewater utility electric bills are issued for the pump-house 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. The utility has a repair and replacement (R and R) account, but fund deposits are not listed as a line item in the utility expenditures. The utility manager is the primary utility operator. The manager provides a verbal report to the council. 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 uses 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 has stated that the city is compliant with federal tax filing and has no record of a lien. A Electronic Federal Tax Payment System receipt shows the city has met the deposit requirements. 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 July-August 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
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
The city has an insurance policy with Alaska Municipal League Joint Insurance (AMLJIA) from July 1, 2012 to July 1, 2013. 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 and hiring processes, and a probationary period of 30 days. Employee personnel files are kept in a locked file cabinet in the city clerk's office and contain an 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; the city clerk and billings clerk are listed 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".
Yes 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. The water utility is subsidized by the electric utility. The last CCR on file is the 2009 CCR. The water utility is not on the July 2012 SNC list. 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.