Quarterly Report: 2011, April - June (Q4), Coffman Cove

Community:
Coffman Cove 
Staff:
Glen Hamburg  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Coffman Cove 
Population:
147  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/3/2011 
Community Sanitation Overview:
The City of Coffman Cove is located on the northeast coast of Prince of Wales Island 42 miles southeast of Wrangell. The city operates a Class 2 water treatment system and a wastewater collection system. A city-run solid waste collection service is also available, whereby garbage is collected locally and then dumped at a landfill facility in 35 miles away in Thorne Bay. Electricity is provided by the Alaska Power Company.  
RUBA Status & Activities This Qtr:
This quarter, RUBA staff continued to monitor Coffman Cove's utility finances and provide training opportunities to new hires following staff turnover. RUBA staff registered the city's new city clerk/treasurer, as well as the city administrator, at an upcoming financial management training. RUBA staff also worked to schedule a one-on-one city clerk training in the community. 
RUBA Activities for the Coming Qtr:
The City of Coffman Cove currently meets all of the RUBA Assessment's essential indicators and nearly all of the sustainable indicators. In the coming quarter, RUBA staff will nonetheless work to improve on this level of service by providing financial management and city clerk training to city staff, making sure that personnel files contain all necessary employee documents, and working with utility engineers to compile inventory control and critical spare parts lists.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
20 of 27
Total Score:
46 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 City of Coffman Cove uses a fiscal year that runs from July 1 to June 30. The city's FY11 budget was adopted by a non-code ordinance on June 17, 2010 with the utility budget as part of the overall city budget. Any revenues generated by the utility are included in the larger category of 'locally generated revenue.' Utility-related expenditures are listed separately as three different line items, including 'Water/Sewer Administration,' 'Water/Sewer Treatment Plant,' and 'Water/Sewer System and Lines.' Though these expenses exceed anticipated revenue by $47,000 in the FY11 budget, these figures are realistic and consider all potential costs associated with providing utility service in Coffman Cove. Section 7.03.050 of the Coffman Cove Municipal Code requires that water and sewer utilities topics are included as part of the agenda at every regular council meeting. Verbal operational reports and written financial reports are indeed provided to the council at the monthly meetings. Council members also receive monthly financial reports that include a balance sheet and a current month profit and loss statement generated from the QuickBooks accounting system. Budget versus actual reports are provided separately using an Excel spreadsheet. Electricity is provided through Alaska Power and Telephone Company. A visual inspection of the most recent electricity billings verifies that the city is current with all electric accounts for the water and wastewater utilities through June 2011. The city maintains small fuel storage tanks and receives fuel deliveries locally from R and R Fuel on an as-needed basis. The community has no bulk storage facilities; however, due to its location on Prince of Wales Island, supplies can also be obtained from Craig if local fuel supply runs short. The utility budget indicates that sufficient funds have been allocated for fuel and electricity payments throughout the year. The governing body is fully aware that user fees do not produce sufficient income to cover operating expenses or repair and replacement (R and R) costs. It has been a general practice for the city to use other sources, such as the general fund, to subsidize utility operating expenses. The community has adequate funds for unexpected repairs and equipment replacement.

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 has adopted and actively follows the collections policy outlined in Title 7 of the Coffman Cove Municipal Code. According to that policy, utility accounts more than 45 days delinquent are subject to the following collection actions: assessment of late payment fees, service charges, disconnection from water and sewer service, denial of other city services, e.g. harbor, internet, and garbage, and the account may be referred to a third party collection agency. Customers may appeal any decision resulting in a collection action to the city council at the next regular council meeting Utility bills are mailed to customers the first week of each month using an invoice or utility statement, depending on whether there are multiple services being billed or any past due amounts. Payments are then due by the 25th of each month and are considered delinquent after 45 days of nonpayment. The city is currently using QuickBooks accounting software for their accounts receivable, accounts payable, and payroll. The city uses a purchase order system for all purchases and maintains a cash disbursement system to track expenditures. Department heads complete purchase orders which are then submitted for approval. The city administrator and city clerk have approval authority for general purchases. Section 4.04.050 of the city code mandates that purchases of supplies, materials, equipment, or contractual services costing more than two thousand dollars require prior approval of the city council. Incoming funds and other transactions are recorded using a written receipt logbook system. In that system, city staff provide customers with a written receipt whenever funds are received for city services. The receipts detail the amount received, the date, and the payment's purpose. Payments are then recorded in a logbook and later entered into the QuickBooks accounting system. A comparison of the logbook and QuickBooks entries showed that receipts of payment are properly recorded and transferred each week. Bank reconciliations, however, are not performed regularly.

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 Coffman Cove uses QuickBooks to calculate, track, and report payroll liabilities and makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). RUBA staff visually inspected the community's last four 941s (employer's quarterly federal tax returns) and verified electronic debits. On June 16, 2011, RUBA staff verified that the city is current in its state payroll tax filings and that the city has no past due tax liabilities or liens with the Internal Revenue Service.

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.
Yes The utility has an adequate written hiring process.
No The utility has personnel folders on every employee that contain at least: I-9, Job Application and Letter of Acceptance.
No 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 currently carries workers compensation insurance through the Alaska Municipal League Joint Insurance Association (AMLJIA). That policy runs from July 1, 2011 through June 30, 2012 and covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage is posted in accordance with state statute in three areas of employment. The city also has a personnel policy outlined in Title 3 of the Coffman Cove Municipal Code which covers employment categories, personnel policies and procedures, pay, and employee benefits. Though the city does not have written job descriptions for all utility department positions, Section 3.03.060 of the city's municipal code details a written personnel evaluation process for each position. Formal performance evaluations are conducted at the end of an employee's probationary period. The municipal code states that 'the performance of all employees is generally evaluated according to an ongoing six month cycle, beginning at the fiscal-year end.' Yet in practice, employees are evaluated on an annual basis. Coffman Cove's employees are given the opportunity to provide input during the evaluation process by submitting an employee self evaluation. In addition the evaluation process, the city has a probationary period for new hires that includes systematic orientation, job training, oversight, and performance evaluations at the end of probation.

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 Coffman Cove owns and operates its water, sewer, and garbage collection utilities. The city council is the formal governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utilities. The council meets on the third Tuesday of each month and holds additional work sessions and special meetings as necessary. To comply with the Open Meetings Act, notice of these meetings are posted at least five days in advance in three regular public places. The city properly adopted the following rates for its water, sewer, and septic services: Water service up to 5000 gallons - $40.00 per month Sewer service - $15.00 per month Septic service up to 5000 gallons - 15.00 per month Note that water usage over 5000 gallons and bulk water purchases are charged at $10.00 per each 1000 gallon block. These rates were last reviewed by the city council in October 2010. During this review, the council increased the monthly septic charge from $10.00 to $15.00. The adopted rate structure and the payment enforcement policies are actively enforced by the city. Ronald Rusher, Coffman Cove's utility operator, maintains the following certifications and endorsements: Water Treatment Level 2 - Expires 12/31/12 Water Distribution Provisional - Expired 12/31/10 The utility also has access to a backup operator, though that operator's water treatment and distribution certifications have expired.

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
The utility has an ongoing project funded by Village Safe Water (VSW) to construct a new water source intake and a 500,000-gallon water storage tank, in addition to completing certain wastewater lift station improvements. The city's primary water utility operator maintains the necessary level of certification to operate the water treatment system and water distribution systems. The operator's water distribution certificate expired on December 31, 2010; however, distribution systems with less than 100 service connections and serve less than 500 people are exempt from water distribution certification requirements. The Coffman Cove water distribution system currently has 75 service connections and serves 141 people. The utility operator consults with the mayor and city administrator on a regular basis and provides a written status reports monthly. The operator also has a safety manual and preventive maintenance plan included in the utility operations manual. An adequate level of supplies and some spare parts for the utility are kept on hand, though the utility does not maintain an inventory control or critical spare parts list. Community Confidence Report (CCR) are distributed as required by state and federal regulations.