Quarterly Report: 2013, January - March (Q3), Port Protection

Community:
Port Protection 
Staff:
Lynn Kenealy  
DCRA Regional Office:
 
Gov't Type:
Community Non Profit 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
Port Protection Community Association 
Population:
48  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
4/22/2013 
Community Sanitation Overview:
Port Protection is an unincorporated community on the north end of Prince of Whales Island with a population of just under 50 according to 2010 US Census figures. The community and the few local services are managed by the Port Protection Community Association, a local nonprofit organization. Port Protection's water system consists of a concrete collection basin that directs water from Spring Creek into a 167,000 gallon water storage tank. This water is not treated. Most homes are fully plumbed, though there is no central electrical system in the community. Rather, electricity is provided by individually-owned and maintained generators. Residents use various wastewater disposal systems including individual septic systems, pit privies, and outfall pipes. 
RUBA Status & Activities This Qtr:
Port Protection is not currently seeking RUBA utility management assistance and therefore has not provided supporting documentation on a quarterly basis. Nonetheless, RUBA staff worked this quarter to verify the community association's compliance with state tax requirements and workers' compensation insurance coverage. All essential and sustainable indicators other than those in the tax section or relating to workers compensation insurance coverage have been marked 'No' until relevant documentation and verifiable information is received. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue to offer utility management assistance to the community and assist in evaluating sanitation service needs in the coming quarter.
Scores:
 
Essential Indicators:
4 of 26
Sustainable Indicators:
1 of 23
Total Score:
5 of 49

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No Monthly financial reports are prepared and submitted to the policy making board.
No The utility is current in paying all water/wastewater electric bills.
No 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.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The community association does not have a written budget. Purchases are considered on a case-by-case basis and approved by membership vote at monthly meetings. The organization's only source of general fund income is State of Alaska Community Revenue Sharing funds. The water utility, however, does have a written budget which is submitted to the Regulatory Commission of Alaska (RCA) as part of annual update for the utility's provisional certification. Being an untreated, gravity-fed water system with a volunteer operator, associated expenses are minimal. There are also no electricity or fuel costs associated with the service. Operational costs for maintaining this system and monitoring water quality amount to approximately $2,000 per year. The utility offsets these costs by charging an annual maintenance fee to its users. The fee is $125 for residential customers and $250 for commercial customers. These fees, totally nearly $4,750 annually, have proven to be sufficient to cover operating costs as well as any repair and replacement costs. All financial reports are delivered verbally by the association's treasurer each month.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No 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
No 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.
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
The utility uses a manual accounting system consisting of a business-type bank register for each bank account. The fields included on the register are designed to record detailed information including the date a transaction is made, the check number, fields to mark when each check has cleared the bank, a memo line for recording who or what a check was written for, and a field for recording the amount of the check or debit. The bank register has an additional field to record any deposits or credits to the utility account and a final field for carrying a running total balance. Considering the limited cash flow of the utility, these bank registers and its corresponding bank statements provide adequate financial record keeping for the utility. A billing and collection policy is outlined in the public water utility tariff. Water maintenance fees assessed annually. On or before January 20th each year, the utility sends out the utility bills to all customers. Payment on those bills is due upon receipt and bills are considered delinquent after 60 days. The utility may charge late fees on delinquent amounts and the water service may be disconnected for continued non-payment. The treasurer has reported that due to the seasonal nature of the community, the collections policy timeline is somewhat flexible, but all accounts are strictly enforced by the end of the year. The treasurer reports a 100% collection rate for annual water system maintenance fees and that all bank reconciliations are up-to-date. Any necessary purchases are discussed and approved by the board of directors at monthly meetings. Large purchases or construction projects are discussed at the corporation's annual meeting in October and approved by the association membership.

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 Port Protection Community Association manually calculates its payroll tax liabilities. The Internal Revenue Service's Taxpayer Advocacy Office confirmed that the community association is current in its federal tax reports and filings. The Alaska Department of Labor and Workforce Development confirmed on March 19, 2013, that all state tax payments are current as well. There are no past tax liabilities or liens against the community association.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
N/A The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation.
N/A 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.
N/A The utility has a probationary period for new hires that includes orientation, job training/oversight, and evaluations.
N/A The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The community association has no full time employees. Volunteers perform day-to-day activities such as accounting and the operation of the water system. The association will employ day labor as needed for manual labor such as repairing boardwalks. The association carries a workers' compensation insurance policy through the Alaska National Insurance Company. That policy covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Copies of the workers compensation policy are posted in accordance with state statute at the community building, Wooden Wheel Trading Post, and the water storage tank. The Treasurer is responsible for maintaining the personal files. She reports that all files contain the necessary documents including I-9 and W-4 forms. However because there are no full-time or permanent employees, the association does not maintain a personnel policy or provide any training opportunities or evaluations.

Organizational Management

Essential Indicators
Answer Question
No 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.
No The utility has an adequately trained manager.
No The utility has an adequately trained bookkeeper.
No The utility has an adequately trained operator or operators.
No The utility has adopted the necessary ordinances (or rules and regulations) necessary to give it the authority to operate.
Sustainable Indicators
Answer Question
No The utility has adopted an organizational chart that reflects the current structure.
No The policy making body meets as required.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The Port Protection Community Association owns and operates the limited public water system. The association's board of directors is the governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utility. The board meets the first Saturday of each month and holds an annual meeting the first Saturday in October. The community association provides meeting notices as required by their by-laws. The utility itself is managed by a three-person water committee, with a member of the committee making a verbal manger's report at each monthly meeting. This report includes operational information such as water testing results, water tank level, and any problems with the system. Highlights from the manager's verbal report are entered into the meeting minutes for the community association. The utility does not have an organizational chart.

Operation of Utility

Essential Indicators
Answer Question
No The utility operator(s) are actively working towards necessary certification.
No The utility has a preventative maintenance plan developed for the existing sanitation facilities.
Sustainable Indicators
Answer Question
No 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.
No 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.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The utility has two operators, Jack Mason and Dennis Shervey. Jack is certified at the appropriate level with a Small-Untreated System endorsement that expires December 31, 2013. Dennis is not currently certified. The utility has a very basic preventative maintenance plan due to the simplicity of the water system. That plan includes yearly tank cleaning and inspection and valve maintenance on the distribution system. The operators report that the system is operating at the proposed level of service and that there have been no outages due the management issues. Any problems are reported to the water committee. The utility does not maintain an inventory control or critical spare parts list. Some spare parts and tools are kept on hand but, due to the community's remote location and dependence on float plane air service, the level of critical spare parts may be inadequate to prevent a service outage. The utility does not hold regular safety meetings or have any kind of safety manual.