Quarterly Report: 2014, April - June (Q4), Togiak

Community:
Togiak 
Staff:
Jeffrey Congdon  
DCRA Regional Office:
Dillingham regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Togiak 
Population:
878 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Pending 
Assessment Date:
6/6/2014 
Exp Date:
 
Last Updated:
7/11/2014 
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. The water treatment facility is undergoing a major remodel during the summer of 2014.  
RUBA Status & Activities This Qtr:
In June, RUBA staff traveled to Togiak to conduct a RUBA assessment on the management of the water and wastewater utility providers, as well as provide additional on-site assistance including training on the codification of ordinances. RUBA staff completed the field portion of the RUBA assessment and found minor areas for improvement. A complete recommendation list is included in the RUBA report. RUBA staff recommends the city council raise utility rates for services provided to residents. Currently, the revenues are subsidized by local enterprise, such as wastewater pumping and maintenance, freeze-up repair and boiler service. The city could strengthen its repair/maintenance budget line item by charging residents the appropriate fees for services rendered, and putting the surplus in savings. RUBA staff recommends the city administrator conduct annual reviews for the employees. This would help in clarifying roles within their fairly substantial staff, as well as ensure that employees have goals to strive for including pay, or at least cost of living, increases. Further, RUBA staff spent time with the city clerk clarifying procedures for codification. 
RUBA Activities for the Coming Qtr:
RUBA staff will finalize the new assessment for Togiak, and Dillingham RUBA staff will assist Togiak as requested by the community.
Scores:
 
Essential Indicators:
25 of 26
Sustainable Indicators:
16 of 27
Total Score:
41 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
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.
No 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
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, as required. The budget includes a line item of $120,000 as income from residential customers. The budget has not been amended to reflect accurate income from residential customers Several line items in the budget vary by greater than 10% from the budget. Amendments to the budget have not been completed. The utility did receive revenues above the budgeted amount, due to an increase in construction and maintenance work over the amount budgeted. A monthly financial report that compares year-to-date (YTD) revenues and YTD 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 currently exceeding budgeted amounts. Heating oil for the utility is delivered by barge in the fall. The utility budget also includes a line item for critical parts, repairs and maintenance, and a capital replacement reserve. However, these funds are not accounted for separately. The administrator provides either a written managerial report, or a verbal report on the utility at the regular monthly meetings. Copies of the report are included in the agenda packets, or in the meeting minutes, and are in the meeting file. Copies of the reports and the meeting files, minutes, and agendas were supplied to RUBA staff.

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.
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 billing and collection procedures are included in the utility ordinance, adopted June 2004. According to the accounts receivable report, there are several past due accounts. The utility has taken steps to collect delinquent accounts; a disconnection of service policy is in place and is strictly enforced. Payment agreements are in place for the delinquent accounts and were made available to RUBA staff. Utility bills are issued within the first three business days of each month as required by the utility's billing procedures. Customer invoices and payments for each customer are entered into the accounts receivable program. QuickBooks is also used for tracking accounts payable. Invoices are entered when received and payments are entered when made. The utility finance officer uses QuickBooks 2013 for financial record keeping, including all payroll records. The bookkeeper 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 cash is deposited, and all payments are made by check and every check identifies an amount, an expense account, and a description of the payment’s purpose. 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, etc.) and 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 for all accounts. The utility adopted a purchasing policy and it was referenced in conversations with RUBA staff, however it was not provided to RUBA staff during the RUBA assessment.

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 uses the QuickBooks accounting program to accurately calculate, track, and report payroll tax liabilities. The state Department of Labor and Workforce Development, as well as the IRS, have deemed the city compliant with payroll tax reporting and deposit requirements. The utility is not named in the most recent Lien Watch report.

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 city has a valid workers’ compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA), and proof of coverage is properly posted. A copy of the City of Togiak's personnel policies (prepared with AMLJIA staff), was shown to 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 hiring policy that the city follows is not written down. Job notices are posted with the job title and description and interested applicants apply at the city office. During a recent visit to the community, RUBA staff confirmed that all but one personnel file contained the required forms (the clerk began tracking down the missing information during the site visit). 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
No 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 adopted a utility ordinance in June 2004. The ordinance identifies the city as the owner and operator of the community’s sanitation utilities. Meeting minutes confirm that the city council is hesitant to raise utility rates to an effective amount that will sustain the utility. Past meeting minutes show that the city council takes an active role in enforcing utility policy. The city administrator fills the role of utility manager by developing and overseeing the utility budget, supervising the utility clerk, and providing monthly reports to the council. The city clerk/finance officer has two years’ experience on the job The utility is designated a Class 2 Water Distribution Circulating System with 130 service connections. According to the Alaska Department of Environmental Conservation (ADEC) website, its utility operators have the required level of training and certification for this system. Regular council meetings are held once a month; special meeting are held as needed. Togiak did not supply RUBA staff with an organizational chart to reflect the current structure. 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.
No 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 2 water distribution system. The utility manager is certified Water Treatment 2 (expires 2016), Wastewater collection 2(expires 2014), Water Distribution 3(expires 2015), Wastewater Treatment 2(expires 2015) The primary operator is certified Water Distribution 1 (expires 2016), Water Treatment 1 (expires 2016), Wastewater Collection 1 (expires 2015), Wastewater Lagoon (expires 2016). The utility did not provide a routine maintenance plan to RUBA . 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 was provided with a copy of the 2013 Consumer Confidence Report (CCR). The utility does not have a published inventory control list. The utility does not have a published critical spare parts list on file, but does maintain a large inventory of parts and supplies. The utility is not on the April 2014 Significant Non-Compliance DEC list.