Quarterly Report: 2011, October - December (Q2), McGrath

Community:
McGrath 
Staff:
Brice Eningowuk  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of McGrath 
Population:
315  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
2/2/2011 
Community Sanitation Overview:
McGrath operates a piped water system that serves nearly all 178 households; a few homes have individual wells or haul water. The FAA operates its own water system. The majority of residents use individual septic tanks; a limited City sewage system serves approximately 34 homes. Funds have been requested to expand the piped sewer system to the 144 houses and businesses currently using septic tanks. A private firm, McGrath Trash and Refuse, collects refuse for disposal at the City landfill. 
RUBA Status & Activities This Qtr:
On September 20, 2010, RUBA staff traveled to McGrath to conduct a RUBA management assessment of the public water system owned by the city of McGrath. A new assessment had been requested by the city as the last full on-site assessment had been completed four years prior. The community has received grants for water and wastewater improvements. The current water/wastewater project is now in the preliminary stage from Village Safe Water in the grant cycle of July 1, 2009 to June 30, 2014. An assessment will be drafted for review by the city. Initial findings of the management assessment show that all essential indicators are being met. While onsite, RUBA staff toured the community and the water treatment plant. On October 19, 2010, RUBA staff finalized and distributed to Tanana Chief's Remote Maitenance Worker, Village Safe Water Program Engineer, RUMA Program Manager and the city a copy of the assessment. The assessment showed that all essential indicators are currently being met. The only sustainable indicator deficient involves the adoption of budget amendments by the council. This community has very stable employees and a strong invloved city council. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue work with the city staff as requested by the administrator and council to meet any management capacity indicators that are not currently being met.
Scores:
 
Essential Indicators:
27 of 27
Sustainable Indicators:
26 of 27
Total Score:
53 of 54

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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
McGrath has adopted the FY11 operating budget with Ordinance 11-01. It is balanced and realistic with revenues and expenditures well defined for the utility department. The water utility revenues total $335,500 and the expenses total $297,218 for a surplus of $38,282. The water utility has a Repairs and Maintenance line item within the Water Utility Expenses. The surplus is due to an increase of service line hookups and additional customers to the service line. The sewer utility revenue totals $50,000 and the expenses total $79,847 for a deficit of $29,847. The deficit is due to a Village Safe Water (VSW) upgrade that has been prolonged and the sewer facility has been extended beyond its useful life with major repairs from the city while waiting for VSW to complete the project. The sewer utility has a high Repairs and Maintenance line item within the expenses that explains the majority of the deficit. Repair and Maintenance is projected to be $15,000. The washeteria revenue totals $22,000 with the expenses of $21,658, for a surplus of $342. The washeteria has a Repairs and Maintenance line item within the washeteria expenses. It has been stated that the excess revenue from the water utility and fund transfers from the General Fund, if needed, will be utilized to cover the costs of the sewer utility. Minutes, from July 29, 2010 council meeting, state that the certified financial reports have been adopted with Resolution 11-1. The meeting packet from August 24, 2010 shows that the Profit and Loss July 2009 to June 2010 Budget vs. Actual report for the entire entity with separate columns for the Water, Sewer. Washeteria utilities and other city programs were on the agenda. During the generation of recent financial reports, an issue was found on the QuickBooks installation. The city administrator stated that the QuickBooks consultant removed some classifications and added others to attempt to clear up redundant names and categories. In the process, some categories were broken out that should not have been. This has slowed the generation of the financial report as the bookkeeper and the administrator make corrections to the report that QuickBooks generates automatically. The Tanana Chiefs Conference (TCC) Remote Maintenance Worker (RMW) position assigned to McGrath is currently vacant and is receiving assistance from a RMW assisgned other communities. It was stated by the city administrator that budget amendments were not completed by the council. The council re-appropriates funds from the general fund as needed and without a budget amendment.

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 collection policy is in Title 13 of the McGrath Code of Ordinances. The city utilizes colored paper for delinquent customer notices to remind them of the overdue bill and also a colored door hanger notice of disconnect. During the onsite visit, a sample water utility bill was collected from the city administrator. McGrath utilizes QuickBooks Premier 2009, as a nonprofit, for tracking all financial transactions of the utility and other city finances are in separate classes within QuickBooks. The RUBA contracted QuickBooks consultant traveled to McGrath to provide assistance with a QuickBooks program rebuild. The city administrator stated that the consultant removed some classifications and added others to attempt to clear up redundant names and categories. In the process, some categories were broken out that should have not been. This issue is in the works to be fixed, but the time needed to do this is limited. A chart of accounts was also generated from QuickBooks for the McGrath and is able to track the utility revenue and expenditure transactions. Monthly bank reconciliations are made with the check register from QuickBooks and bank statements by the city administrator and the practice was verified by RUBA staff during the onsite visit. Purchases for the utility are discussed by the administrator and program lead to confirm if the purchase is necessary and that funds are available in the budget. Decisions made for purchases outside of budgetary line items are determined by the level of necessity and availability of the general funds. Although discussions are done with the mayor, the mayor has stated that this is not necessary. Emergency purchases are made on the spot and utilizes the city's general fund. Past emergency utility purchases include a replacement heat exchanger and sewer tank.

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.
Yes 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
A signed Authorization to Request Federal Tax Information was collected and sent to the Tax Payer Advocate Service. IRS reports that the City of McGrath is compliant with tax liabilities and has no record of a lien against the city. State ESC has also granted the City of McGrath a tax clearance.

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
McGrath has purchased workers compensation insurance with the Alaska Municipal League Joint Insurance Agency (AMLJIA). Coverage is from July 1, 2010 to June 30, 2011. McGrath has an employee handbook provided by AMLJIA that has a hiring and evaluation process, reference to personnel folders, a 90-day probationary period for all new hires and promotions or transfers and other important information for a newly hired or rehired city employee. The city encourages employee training for city employees.

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
McGrath owns the utility and has an ordinance code 13.04.010 which addresses service provided standards for the water utility and clearly states what and how services are provided. The McGrath city council members are active in policy making for the utility and enforces those polices. The city administrator acts as the utility manager, the utility foreman reports to the city administrator. The city administrator has over six years experience with the City of McGrath. The administrator has been awarded the 2005 AWWMA System Manager of the Year and has been recognized by Tanana Chiefs Council for outstanding dedication to the McGrath Water System. The utility foreman has three plus years of experience and has been with the city for the last year. There are two water operators employed by the city. One operator has certification in Water Treatment 1 and Water Distribution 1 due to expire December 31, 2012. The other operator has certification in Water Distribution Provisional and Water Treatment 1 due to expire on December 31, 2012 and has met the required continuing education units. The second operator was a water operator for McGrath, but left the community then returned after allowing the water certification to lapse. He is classified as an Operator In Training (OIT) for the City of McGrath. The bookkeeper has been at the position for over two years and is a certified municipal clerk with the Alaska Association of Municipal Clerks and also has clerks training from the Alaska Municipal League (AML).

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 City of McGrath has provided training funds within the utility budgets and actively ensures employee participation in training opportunities provided by outside agencies, such as TCC. A monthly preventative maintenance check list is generated for the water utility. The check list includes maintenance for the pumps, alarm battery backup system, exercising of unused valves, clean the chlorination injection point, chlorination vat of sentiment every six months and other maintenance of the utility equipment and facility. AMLJIA has provided the water utility with a safety check list and it is available in the utility and administrator's office. This is used as a guide for safety meetings. There have been no major problems or outages to date with the current utiltiy employees. The operators and foreman report to the administrator or directly the council when the administrator deems it is appropriate. The foreman or operator reports to the council when clarity is needed on specific information regarding the utility plant. Routine operations are reported to the administrator and then forwarded to the council at a council meeting. The City of McGrath has a current distributed CCR and a copy is on file at the utility. The City of McGrath is not on the current SNC list. The utility has an inventory control list and critical spare parts list and copies were provided.