Quarterly Report: 2014, October - December (Q2), Togiak

Community:
Togiak 
Staff:
Barbara Higgins  
DCRA Regional Office:
Dillingham 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Togiak 
Population:
842 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
12/9/2011 
Exp Date:
 
Last Updated:
1/8/2014 
Community Sanitation Overview:
Water is derived from two wells, treated, and stored in a 500,000-gallon tank. Approximately 125 households are connected to the piped water and wastewater system installed in 1976; the remaining homes have new individual wells and wastewater tanks. Roughly 61 units with private wells and wastewater systems are in the Togiak heights subdivision north of the main village. In all, approximately 200 homes are plumbed and 14 lack plumbing. The water system is 25 to 30 years old; however, trained public works staff continue to effectively maintain and renovate the system. 
RUBA Status & Activities This Qtr:
During this reporting period, assigned RUBA staff resigned and the community was temporarily reassigned to other staff. On December 17, RUBA staff received a telephone call from the Togiak city clerk requesting assistance in creating a accounts payable report in QuickBooks. RUBA staff walked the clerk through how to find and create the report in QuickBooks. RUBA staff also answered questions concerning accounts payable reporting. RUBA staff also responded to a call in December with information for city staff regarding access to information about grant payments made to the city by the state for capital projects. On December 31, Togiak personnel contacted RUBA staff for assistance organizing and codifying the City of Togiak code of ordinances, which include the ordinances for the water and wastewater utility. RUBA staff also provided a draft ordinance to amend Togiak's code on recognized holidays, ordinance procedure information, and the recognized holidays that the State of Alaska follows, as requested by city staff. RUBA staff is assisting the city in moving forward with these issues and proactively striving to meet essential indicators.  
RUBA Activities for the Coming Qtr:
A work plan needs to be developed to deal with utility deficiencies, based on the most recent RUBA assessment. Personnel issues been a major factor in the utility moving forward in a meaningful manner.The work plan is an effort to bring the community up to an acceptable management performance standard. The council has signed a RUBA agreement that outlines the services this division is providing and the actions the city is taking.
Scores:
 
Essential Indicators:
25 of 27
Sustainable Indicators:
20 of 27
Total Score:
45 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
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 city adopted the FY14 budget in June, 2013. A copy of the approved budget was submitted to the Division of Community and Regional Affairs. The budget includes a line item of $120,000 as income from residential customers. This is based on a 100 percent collection rate; however, the actual collection rate has been 68 percent. A monthly financial report that compares year-to-date revenues and year-to-date expenditures to the annual budgeted amounts is prepared and submitted to the policy making body. Annual operating revenues and expenditures are reported on a monthly financial report. YTD expenditures are exceeding revenues. Heating oil for the utility is delivered by barge in the fall. The utility uses an average of 3,000 gallons annually. The utility budget included $12,000 for heating fuel. The utility budget includes a line item for Repair and Replacement funds, however there is no evidence that Repair and Replacement funds are actually being set aside and accumulating as necessary. FY14 Budget amendments are currently not necessary. The administrator provides a written managerial report on the utility at the regular monthly meetings. Copies of the report are included in the agenda packets and in the meeting file. Copies of the reports and the meeting files and agendas are supplied to RUBA staff.

Accounting Systems

Essential Indicators
Answer Question
Yes The utility has adopted a collection policy and actively follows it.
No 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 utility billing and collection procedures are included in the utility ordinance adopted January 2004. According to the accounts receivable aging summary, there is a large amount past due of greater than 90 days. The utility states that they have taken steps to collect delinquent accounts; a disconnection of service policy is in place and said to be enforced. Payment agreements are in place for the delinquent accounts and were made available to RUBA staff. Review of the A/R does not reflect the utility is following policies. The review of accounts receivable aging summary indicates that the utility is not issuing monthly bills as required by the utility's billing procedures. QuickBooks accounting software is used to record customer invoices and payments in the accounts receivable program. QuickBooks is also used for tracking accounts payable; however, invoices are not being entered when received, and payments are not entered when made. The utility finance officer uses QuickBooks 2012 for financial record keeping, including all payroll records. The bookkeeper has received training in the use of QuickBooks through classes sponsored by the RUBA program. The city clerk writes a receipt for any income received. A copy of every receipt is kept in sequentially numbered permanent receipt books. It does not appear that data from the receipt book is entered into the utility's computerized accounting system. All payments are made by check. Every check includes an amount, an expense account, and a description of the payment. The data for every check written is recorded in the check register. A copy of paid invoices is kept in the vendor files. The utility's chart of accounts identifies all asset accounts (un-deposited funds, bank accounts, and accounts receivable) all liability accounts (current, long-term and payroll liabilities), and fund balances. Income and expense accounts are identified in a manner that matches the income and expense line items in the budget. Bank reconciliations have not been completed on all accounts. The utility adopted a purchasing policy in 2002. The policy requires approval from the administrator for purchases. There is a verbal understanding by staff that up to $5,000 will receive approval by the administrator: any purchases in excess will require council's approval.

Tax Problems

Essential Indicators
Answer Question
Yes The utility has a system to accurately calculate, track, and report payroll tax liabilities.
No 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
The city uses the QuickBooks accounting program to accurately calculate, track, and report payroll tax liabilities. The state Dept of Labor and the IRS have deemed the taxpayer compliant with tax requirements except for federal information returns for the tax period ending June 2013. The utility is not found on the most recent 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.
No The utility has adequate written job descriptions for all positions.
No The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation.
No 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 Notice of Insurance is posted in plain view in the city office, and indicates that workers compensation insurance is provided by the Alaska Municipal League Joint Insurance Association from July 1, 2013 to June 30, 2014. A copy of the City of Togiak's personnel policies, adopted July 2008, is on file with RUBA staff. Job descriptions have not been adequately written and are not on file with city staff. The utility does have a written evaluation process, however staff state they have not been formally evaluated for several years. The city's current hiring policy is historical and not written. Job notices are posted with the job title and description and interested applicants apply at the city office. During the most recent visit, RUBA staff confirmed that personnel files contained the required forms. The probationary period for new hires is not described in the personnel policy. The utility budget includes an appropriation of $1,000 for staff training.

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 utility ordinance identified the city as the owner and operator of the utility. Council meeting minutes confirm that the council reviews the utility policies and rates on an annual basis and makes changes as needed. Past meeting minutes also confirm that the city council takes an active role in enforcing utility policy. The city administrator fills the role of utility manager. The administrator develops and oversees the utility budget, the utility clerk, and provides monthly reports to the governing body. The city clerk/finance officer has two years experience on the job and has attended a QuickBooks training class sponsored by RUBA. The utility is a Class 2 Water Distribution Circulating System with 130 service connections. According to the Alaska Department of Environmental Conservation (ADEC) website, the utility operators have the required level of training and certification for this system. The city adopted a utility ordinance in February 2004 and RUBA staff has a copy of the signed ordinance on file. The city has an organizational chart adopted in the utility business plan. Regular council meetings are held once a month; special meeting are held as needed. Meeting files and minutes have been received to confirm that agendas are posted and that all meetings are open to the public as required by the Open Meetings Act.

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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
According to the Alaska Department of Environmental Conservation (ADEC) website the utility operates a level two water distribution system. There are two primary operators. The provisional certificate of one operator expires 12-31-15 and the other certificate expires 12-31-13. The utility operates a class one wastewater collection system with two primary operators. One certificate expires 12-31-2014 and the other operator certification expires 12-31-2015. The utility operates a wastewater treatment system that is a lagoon and no certificates are required. The utility states they have a preventive maintenance plan that was developed by the Remote Maintenance Worker. A copy of the plan is not on file with RUBA. The operator reports using a checklist to verify that preventive maintenance is performed. The preventive maintenance plan is posted on the wall of the treatment plant. The administrator spot checks the utility on a routine basis. The utility has a safety manual on file and holds weekly safety meeting. The administrator receives written updates weekly from the operator. RUBA staff has a copy of the 2012 CCR on file. According to the utility clerk, the CCR was mailed to all residents in June 2013. The utility does not have a published inventory control list. The utility does not have a published critical spare parts list on file. To prevent unnecessary outages, an extensive inventory of critical spare parts are kept in stock at the utility and were viewed by RUBA staff. The system is not the SNC List.