Quarterly Report: 2010, April - June (Q4), Galena

Jeremy Johnson  
DCRA Regional Office:
Gov't Type:
First Class City 
Agreement Date:
City of Galena 
Assessment Status:
Assessment Date:
Exp Date:
Last Updated:
Community Sanitation Overview:
Water is derived from wells and is treated. There is a 200,000 gallon reservoir and a community leach field There is a 200,000 gallon reservoir and a community leach field. Sixty one customers are connected to the fully piped system and fifty four customers have water delivered. Some customers only have water delivered as they have private septic systems while others pay the city to dispose of waste water on an as needed basis. The City began operating the landfill, located on the former Campion AFS grounds, in 1997.  
RUBA Status & Activities This Qtr:
Fairbanks RUBA staff traveled to Galena on June 29 through July 2, 2010 to conduct a RUBA management assessment and provide assistance with records retention. The assessment will be finalized this quarter and the online report will reflect the analysis. RUBA staff also traveled to Galena in April to assist the clerk with a variety of projects and to obtain the monthy finance reports required for the RUBA assessment. RUBA had sponsored onsite training by the QuickBooks Pro contractor and Galena remains responsible for sharing twelve months of monthly finance reports generated by QuickBooks. RUBA also assisted in locating financial data for an upcoming audit, locating various permits and fuel spill response manuals for EPA, and completing the Alaska Municipal League Joint Insurance Association (AMLJIA) insurance exposure questionnaire.  
RUBA Activities for the Coming Qtr:
Phone and email help as needed.
Essential Indicators:
23 of 26
Sustainable Indicators:
24 of 27
Total Score:
47 of 53


Essential Indicators
Answer Question
Yes 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.
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.
No 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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The FY10 budget was not balanced or realistic but the recently passed FY11 budget projects a net income of $1.39 million. As the RUBA assessment is specifically interested in the financial stability of the water/wastewater utilities the city has three enterprise classes: base water (the former Air Force base), sewer, and water. The base water class projects $74,853 in surplus, the sewer will be negative $4,704 and the water class will be negative $14,697, because two of the three classes that RUBA is specific to, the essential indicator is marked 'no'. The council is not provided with monthly financial reports, although, the city manager provides a financial interpretation to the council. The meeting minutes reflect the reports from the manager; RUBA has copies of the last three months of minutes. According to the QuickBooks accounts payable report the city is current in paying its bills. As the manager noted to RUBA staff, city departments are not charged for city services and it is his desire to make that change in the accounting procedures. The city has fuel on hand to last into the fall of 2011, the fuel supply was from the air force at the time of base decommission. As the fuel was not purchased, the city is not receiving Power Cost Equalization (PCE). The city stated that by summer 2011 enough revenue will be generated to purchase fuel and be eligible to return to PCE. At the end of the fiscal year the utility income was $3,244,564 and utility expenses were $352,120, a net surplus of $2.8 million, therefore, it appears that the city is receiving revenue sufficient to cover operating and repair and replacement expenses. The actual revenue is $3,211,564 while budgeted revenue was $3,335,450, a shortfall of $90,885 which is why the sustainable indicator, 'YTD revenues are at a level equal to or above those budgeted', is marked no. The utility expenditures are under budget by $725,379. The city has not passed any budget amendments. Due to the wide variance between the budgeted and actual amounts an amendment is recommended.

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.
Yes 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 of Galena uses QuickBooks Enterprise Solutions for all of its financial and accounting needs. The accounting staff consists of two people, a temporary financial director from Anchorage and an accounting assistant who is located in Galena. A collection policy is in place; city ordinance states that all city services will be discontinued until payment is made and the city is reinstating a finance charge on delinquent accounts. The Accounts Payable Aging Summary report for FY 10 shows that the city is current with bills, which is an improvement from the last assessment in 2008 as the city was delinquent with vendors. The city has outstanding debt, primarily a result of the base closure, but successfully received a one percent, 15 year loan, with the Alaska Municipal Bond Bank for a total amount of $2.45 million. As is standard with all QuickBooks products an adequate system is in place for tracking, recording, and reporting transactions. A wire bound receipt book is used for all customer payments and the receipt is given to the customer while they are in the office. The receipt book is used to enter payments against the customer balance into QuickBooks; this is a daily occurrence. Day-do-day purchases have been restricted; the city is taking a firm stance on purchases to control expenses. All purchase requests must be approved by the city manager who, along with the clerk, are the only employees with access to city debit cards.

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.
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
QuickBooks accurately calculates and reports payroll taxes. As of a July 1, 2010 phone conversation the Department of Labor deems Galena to be out of compliance. As of June 22, 2010 the IRS deems Galena to be out of compliance. Galena is listed on the January-February tax lien 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.
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.
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
Workers compensation insurance is provided through the Alaska Municipal League-Joint Insurance Association and is in effect until July 2011. RUBA has a faxed copy of the notice of workers compensation insurance coverage in the Fairbanks office. The personnel policy and procedure manual is comprehensive; a copy is provided to each new hire with a signature page that acknowledges receipt and is filed in the employee's personnel folder. RUBA staff has copies of job descriptions for city positions. The annual evaluations are based on the job description. RUBA staff and city staff were not able to locate a specific written hiring process. The current process is that a vacancy notice is posted in town at four locations and the notice is read on the local public radio station for ten days. Applicants submit their application and if there is more than one applicant, a list of interview questions is created for the interviewer. Galena Personnel Policies and Procedures Title 15.10.430 (A)(1) (this Title 15 document is separate from the Galena Code of Ordinances as Title 15 in the code has to do with building and construction) states that there are to be two separate personnel files for each employee, one public and one confidential. Between the two files, all necessary documents are retained. Included in the confidential files are evaluations, which are done after the six-month probationary period. New hires are provided with orientation and job-training, to the extent needed for the position. The personnel manual states that 'the city encourage[s] employees to avail themselves of training and educational opportunities directly applicable to their city positions in order that they may provide more effective service to the public.' The new city clerk was in Fairbanks for computer classes and spent approximately three days of intensive one-on-one training with RUBA staff.

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 is the owner of the water and electrical plants (Galena Code Title 13) and city employees operate both utilities. The city council is the policy making body, the city manager oversees the day-to-day management of staff. Mr. Ben Koontz is the utility manager, not necessarily in title but he essentially fulfills the duties. The city council is very active in setting and enforcing utility policy, as is supported by council meeting minutes. The city manager and 'utility manager' are fulfilling the job duties. The city uses an Anchorage based person to assist in completing the financial director duties, at a large expense to the city, the time necessary to fulfill the job functions cannot be met on a periodic, visiting basis and, while adequate, it is suggested to have a full time Galena based employee. The financial billing clerk has attended QuickBooks training and is doing well, to assure that details are not missed it is recommended that bills, payroll, and other minutia oriented functions be carried out away from distractions. The city has an organizational chart that shows the current structure, the policy making body (city council) meetings are open to the public with the exception of executive sessions as allowable by law.

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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
One water operator has a level one wastewater treatment certificate and a level two water treatment and water distribution certificate. The other water operator has a level two water treatment certificate. A preventative maintenance plan is located in the plant. The utility manager provides operation and maintenance reports to the city manager who includes them into a report for the council. AMLJIA provides telephonic safety meeting which are attended by city staff. Operations of the utility are functioning as intended and no major outages have occurred. The most recent CCR has been completed and RUBA obtained a copy. The city is not on the SNC list dated May 2010.