Quarterly Report: 2009, January - March (Q3), Selawik

Community:
Selawik 
Staff:
Margaret Hansen  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Selawik 
Population:
828  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/8/2009 
Community Sanitation Overview:
The community has piped water and sewer throughout the entire community; 96% of the homes are fully plumbed. Water plant upgrades and the river pump system are being evaluated now for possible future projects. DEC has been in Selawik to do a comprehensive evaluation of the water quality, which will be helpful in determining what changes need to be implemented.  
RUBA Status & Activities This Qtr:
Kotzebue RUBA staff traveled to Selawik in February to work with the council and staff to provide training and assistance on financial management. Working with local staff, worksheets were completed showing that the city currently has incurred a $428,733 debt while trying to save their 20 million dollar water/wastewater infrastructure. Another worksheet prepared by RUBA showed that in one month (January 2009) the city was billed by Alaska Village Electric Cooperative (AVEC) $69,300 for a fuel cost charge as part of their electric bill. We also completed an amended budget showing that they will have a deficit of $385,277 at year end with the amended budget. We modified that amended budget even further in order for the city to make a $10,000 payment each month to help pay off their AVEC bill. This new amended budget reduces the office hours of operation to three hours a day on Monday Wednesday and Friday so someone can be in the office on those days to receive payments. 
RUBA Activities for the Coming Qtr:
RUBA continues to monitor and assist staff in following through with improvements as identified in this assessment. RUBA staff plans to return to the community in June 2009.
Scores:
 
Essential Indicators:
14 of 27
Sustainable Indicators:
19 of 27
Total Score:
33 of 54

Finances

Essential Indicators
Answer Question
No 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.
No 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.
No 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.
No YTD revenues are at a level equal to or above those budgeted.
No 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
Although an amended budget was adopted, sufficient funds were not available for payment of the total AVEC bill by the end of this fiscal year. A payment of $10,000 each month has been budgeted, so they have passed a budget that is realistic for the funds they have coming in to operate. Although they are not receiving funds sufficient to cover their operating expenses mainly due to the electric cost, they had purchased enough fuel at the beginning of year to last until fall. A monthly managers report is prepared and the budget amendment has been adopted but because of the cost over-runs trying to save their water/wastewater system, there were not enough revenues to cover the expenses.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
Yes The utility bills customers on a regular basis.
No An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
No An accounts payable system is in place.
No The payroll system correctly calculates payroll and keeps records.
No A cash receipt system is in place that records incoming money and how it was spent.
No 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.
No 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
At the time of my visit, even though they bill the customers monthly, they had outstanding accounts receivable for water/wastewater of $24,036 so they are not actively following the collection policy. They were advised that they need to increase their water/wastewater rate from $130 to $150 immediately and may need to increase it to $200 a month next fiscal year to get out of debt. The bookkeeper uses quickbooks for all accounting needs, which she reconciles monthly and uses the budget as the chart of accounts to identify all revenues and expenses on an Excel monthly report in comparison to the budget. The utility has a purchasing system that requires approval prior to purchase but went way over budget to save their water/wastewater system.

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.
No The utility is current on making tax deposits.
No 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
Although QuickBooks is utilized to help track, report and pay taxes, payroll tax liabilities for the months of January or February had not been paid at the time of my visit. RUBA urged her to get caught up as soon as possible to avoid penalties and interest.

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 workmen's compensation coverage until June 30, 2009 that is posted in the city office. The city has not had any turnover in personnel so all personnel folders are still current with written job descriptions. The city had to hire temporary positions for the water/wastewater utility that have signed I-9 forms and acceptance of the job and rate of pay forms. The city still utilizes the approved AML policies that provides a written evaluation process, including probationary period. The administrator is planning to attend the QuickBooks training in Kotzebue on May 4th. The alternate water plant operator plans to attend training offered in Kotzebue.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
No The policy making body is active in policy making of the utility.
No 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
Although the city council adopted ordinances necessary to give it authority to operate, they have not been enforcing the collections policy allowing the accounts receivable to reach $24,000. The same city administrator, clerk, bookkeeper and operator have been working for over five years. The city has adopted an organizational chart that reflects the current structure and meets as required, complying with 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.
No The utility has a safety manual and holds safety meetings.
No Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
No 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".
No 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 is certified for wastewater treatment OIT, collection OIT, water distribution 1, water treatment 2 until 2011. Although the city has a preventative maintenance plan in place, not following it may be the cause of the financial problems they are having now. The city does receive a monthly report from the operator but the administrator needs to spot check facilities to see that maintenance items are being completed. At the time of my visit, the administrator could not reach the operator to find out if he has held safety meetings although there is a safety manual. Ninety percent of the system froze due to cold temperatures of around -60 and possible tripping of heat trace tapes being used since they could not find all the glycol leaks last summer. They have restored all but 40 homes and the Northwest Inupiat Housing Authority 20 apartment unit so it is not operating at the level of service that was proposed. The system has been on the SNC list because it needs new hardware to resolve the violations. This will require installation of a new recorder that records higher values. A new water treatment plant is in the early stages of design but insufficient funding has stopped progress for now. Inadequate operator attention combined with lack of automation and inadequate treatment capacity have resulted in the majority of the treated water quality problems.