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

Community:
Marshall 
Staff:
Eli Jacobson  
DCRA Regional Office:
Bethel regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Marshall 
Population:
473 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Pending 
Assessment Date:
4/4/2014 
Exp Date:
 
Last Updated:
7/9/2014 
Community Sanitation Overview:
The City of Marshall services almost 100 percent of the 108 housing units with water and wastewater lines. However, water is hauled to the health clinic and Head Start building. A few older housing units could not be hooked up to water and wastewater lines, either. Water is drawn from three wells; one is the primary well and two are back-up wells that are periodically used. The water treatment plant has a storage tank and supplies water as needed.  
RUBA Status & Activities This Qtr:
A RUBA quarterly report request was sent on June 16, 2014. Up to this writing the requested documentation has not been received therefore several indicators are not in compliance.  
RUBA Activities for the Coming Qtr:
RUBA staff will continue to assist the city in its efforts to satisfy deficient utility management indicators.
Scores:
 
Essential Indicators:
12 of 27
Sustainable Indicators:
7 of 27
Total Score:
19 of 54

Finances

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.
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.
No A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Marshall has a fiscal year starting on July 1 and ending on June 30. The FY14 budget was adopted on June 28, 2013 by non-code ordinance 13-03. The FY14 budget was amended on February 26, 2014 by non-code ordinance 14-01 but is not balanced or realistic. The water/wastewater utility revenue is projected to be $100,000, and expenditures $80,456; therefore, the water/wastewater utility is balanced. Because monthly financial reports have not been submitted to the governing body since February 2013, it is not possible to track budget performance. On February 19, 2014, Alaska Village Electric Cooperative communicated that the City of Marshall is not current in paying its electric bills. The Mayor said that in the fall of 2013, the city received 12,500 gallons of heating fuel; this gives the utility a one-year supply. The city also has a credit with NorthStar Gas. The city does not have a repair and replacement fund established. Since the city does not have current monthly financial reports, year-to-date revenues and expenditures cannot be determined. Monthly manager’s reports are verbally given to the council. Historically, manager’s reports have been recorded in the meeting minutes. However, the last meeting minutes provided to RUBA staff are from March 2013. The policy making body meets the second Wednesday of each month and budget amendments are adopted as necessary.

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.
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
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.
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 Marshall has adopted a collection policy and included it in Section 4.04.060 of its municipal code. Residential customers are billed $60 a month unless, they are an elder; elders (65 and older) are only charged $30 a month. Commercial units are charged $120 a month and the school is charged $3,000 a month. Statements are sent to customers on the first of the month. An Excel spreadsheet is used to track customer accounts and the past due amounts. Currently, the spreadsheet only has about 90 percent of the customers listed. The city is planning on conducting a survey to update customer accounts. Some residential units have had tenants move out and new tenants move in and begin receiving service without signing a contract or making payments. The city does not have a complete list of vendors that money is owed to. Payroll is recorded on a ledger which includes all council members and administrative staff. This ledger is then entered into QuickBooks. All incoming money is recorded in a receipt book and entered into QuickBooks. All cash disbursements are done by purchase order and then also entered into QuickBooks. The city does not have a chart of accounts. Monthly bank reconciliations have not been completed for all utility accounts. The mayor can approve purchase up to $500. Purchases above $500 require council approval.

Tax Problems

Essential Indicators
Answer Question
No The utility has a system to accurately calculate, track, and report payroll tax liabilities.
No 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
The IRS deemed the City of Marshall non-compliant with federal tax requirements. The fourth quarter of 2012 has a balance due, and the second quarter of 2013 has a balance due. The third and fourth quarters of 2013 have not been filed. On March 11, 2014, the state Department of Labor verified that the City of Marshall is current on their Employment Security Contributions account. The City of Marshall is not on the Lien Watch report dated March-April 2014.

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.
Yes 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.
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
Marshall’s workers’ compensation insurance is through the Alaska Municipal League Joint Insurance Association for the period July 1, 2013 through to July 1, 2014. Proof of coverage is posted in the city office. The City of Marshall has a 40-page employee handbook that contains its personnel policy. The handbook was prepared by Alaska Municipal League Joint Insurance Association and is dated March 5, 2003. The ordinance adopting the handbook was not provided. However, the administrator refers to the handbook for all personnel related questions. The administrator also stated that the city is updating the personnel policy, changing some holidays and one employee’s job title. The utility has written job descriptions for all positions. Copies were provided for the city clerk, alternate city clerk, bookkeeper, water treatment plant operator, landfill operator, and garbage truck driver. The utility has not adopted a written evaluation process, or a written hiring process; however, an unwritten hiring process is known and followed. According to this process, a vacant position is first posted for two to four weeks. Then a four council member hiring committee conducts interviews and checks references. The city personnel folders do not include I-9s, job applications, and letters of acceptance for every employee. Personnel folders that were shown contained W2s, timesheets, and copies of identification. The city has a 90-day probationary period with an evaluation at the end that is historically known, but this is not written policy. On-the-job training and additional training opportunities are provided as necessary. In December 2013, the bookkeeper attended a RUBA-sponsored QuickBooks 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.
No The policy making body enforces utility policy.
Yes The utility has an adequately trained manager.
Yes The utility has an adequately trained bookkeeper.
No 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 of Marshall owns the utility and the city council is the policy making body. The utility policy is not currently being enforced. When enforcement is performed, it is done by the operator going out and shutting off water to customers who have not paid. The operator has not responded to the mayor’s contact attempts for a few months. During the two days that RUBA staff was in Marshall, the mayor made multiple phone calls to the operator and left messages. However, the operator did not respond. The mayor has been performing managerial duties since November 2012. The bookkeeper was hired in November 2013, has attended QuickBooks training, and is pursuing additional training. The operator has five and a half years’ experience. However, all three of the operators’ certifications (Water Distribution Provisional, Small Water System Treated, and Water Treatment Provisional) have not been renewed. The city’s system type/class also has higher requirements than the operators have previously been able to obtain. The water treatment system is designated Class 1 and the water distribution system Class 2. The city has adopted ordinances that give it the authority to operate, in particular, the authority to turn customers’ water off. The utility does not have an organizational chart. The policy making body meets the second Wednesday of each month. The city clerk posts meeting notices in the city office, the local store, and the post office, five days in advance.

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.
No 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 operators’ certifications have expired and have not attended necessary trainings, despite having been instructed to do so by the mayor. RUBA staff and the mayor went to the water treatment plant but could not get inside the building; therefore, it could not be determined if the utility has a preventative maintenance plan. Monthly operation and maintenance reports are not being conducted. The mayor cannot get into the building to spot check the facility. The utility does not have a safety manual or hold regular safety meetings. Several of the arctic boxes are not working. This has caused a disruption in service to the affected customers. It is the operator’s responsibility to maintain the arctic boxes. This has caused the utility to operate below the level of service that was originally proposed. A Consumer Confidence Report (CCR) has not been posted. The city is not on the Significant Non-Complier (SNC) list dated April 2014. Since entry to the water treatment plant could not be gained, it could not be determined if the utility has an inventory control or critical spare parts list.