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

Community:
Chefornak 
Staff:
Ken Berlin  
DCRA Regional Office:
Bethel regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Chefornak 
Population:
436 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Pending 
Assessment Date:
6/24/2014 
Exp Date:
 
Last Updated:
7/8/2014 
Community Sanitation Overview:
Chefornak, a village of approximately 418 residents, is located on the south bank of the Kinia River, at its junction with the Keguk River, in the Yukon-Kuskokwim Delta. Chefornak is 94 air miles southwest of Bethel and 490 miles southwest of Anchorage. The city operates a small water treatment plant which pulls water from a local well. Water is provided to the community from 12 watering points for 25 cents per 10 gallons via token purchase. Residents also use rain water and melted ice for drinking and domestic use. The community's water treatment facility provides piped water to the local school, health clinic, fish processor, and project camps. The city also owns and manages the landfill, lagoon, and electric company. The city owns and operates a garbage hauling services. A tank flush and haul service for $25 and water fill for $10 is provided on an as needed basis to 4 homes. Several of the home which were provided flush and haul systems are using honeybuckets as their systems are no longer working for various reasons. The operation of the uility and hauling services is subsidized by a 2% city sales tax, gaming, and Community Revenue Sharing. A new washeteria was completed in 2011 offering the community four dryer, three washers, and two shower plus a bathroom available via token purchase. 
RUBA Status & Activities This Qtr:
The city of Chefornak adopted its FY14 budget and it is on file and available in the DCRA website. The finance reports are up to date to April 2014 but lack year to date figures compared to the budget. Staff received a call from a city council person from the city of Chefornak requesting information on the ordinance process and if all city council members are required to be present in order for a city to introduce and adopt an ordinance. Staff explained how ordinances are worked on, introduced, public hearings, and adoption process and also sent information on the ordinance process from DCRA's website. RUBA staff traveled to Chefornak on May 21-22, 2014 and conducted a RUBA assessment. The finance essential indicators were good for FY14, but the accounting system in QuickBooks needs to be improved by combining the three systems into one. The administration and finance, water and wastewater, and the Naterkaq Light Plant are all on different systems. RUBA staff also met with the city mayor and the Naterkaq Light Plant manager. The mayor's concerns were with alcohol and drug policies of the city and land use issues. The Naterkaq Light Plant manager is requesting assistance in applying for grants to upgrade the electric generators and the distribution system and more bulk fuel storage capacity. Most of the residents are still on honey buckets, four residents are on CoWater haul system, the health clinic has piped water and wastewater haul, and the school is on piped water and wastewater. The water pump house and treatment plant was built in 1985, a new one is being planned. The community has 12 watering points. A new washeteria was built in 2011, and a new wastewater lagoon is being planned. LGS staff received a call from the mayor of the city of Chefornak concerning city council members missing meetings. The mayor wanted clarification of the city's ordinance on council members missing three consecutive meetings without being excused. The question concerning city council members missing three or more meetings was brought up by other council members and how this ordinance is enforced. The Authorization to Request Federal Tax Information was not submitted by the city in time to update this section, but the city was deemed compliant in January 2014. The state DOL/ESC was deemed complaint up to March 2014. The city is insured through AML/JIA up to July 2014. The city administration's position is vacant although a job opening has been posted.  
RUBA Activities for the Coming Qtr:
Follow up on the RUBA assessment findings and make corrective actions on the deficient indicators.
Scores:
 
Essential Indicators:
21 of 27
Sustainable Indicators:
20 of 27
Total Score:
41 of 54

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.
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.
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 Chefornak adopted its FY14 budget on June 25, 2013 a copy of the budget is available in DCRA’s website. The city’s water and wastewater and the garbage and landfill services have a combined expenditure budget, but the revenues are listed separately. The budget is balanced and realistic. The washeteria, water and wastewater, and garbage and landfill services are subsidized by gaming, sales tax, and community revenue sharing. The city clerk/bookkeeper provides the city council with monthly financial reports that begin with a bank balance for the beginning of the month, deposits made, deposits to be made, expenditures, and an ending balance for the month. The reports do not have budgeted amounts or year to date balances and this makes it hard to determine exactly where the city is financially. The Naterkaq Light Plant is owned by the city and the latest monthly billings were current. The Naterkaq Light Plant bulk fuel storage capacity is not adequate and it usually runs out by early spring and has to purchase fuel from a local distributor until the next barge delivery. The city is trying to get more bulk fuel storage capacity. The city administration and finance, water and wastewater, and the Naterkaq Light Plant are all on different QuickBooks systems, which make it hard to produce finance reports. It is recommended that the city network the computers and use one QuickBooks system. The city purchases fuel for the water and wastewater facilities on an on need basis from the local fuel distributor. Based on the city’s budget and current operations and finance reports the city appears to have sufficient funds to operate. The city does not have a Repair and Replacement account. The city administrator’s position is vacant and the manager’s reports have not been done.

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.
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
Ordinance 09-01: Title II Village Water and Sewer Department, adopted on January 21, 2009, includes the city's collection policy. Utility bills are sent to customers on a monthly basis on or before the last week of each month. All bills not paid within 40 days are considered delinquent. The city provides an option for deferred payment agreements for customers demonstrating an economic hardship; a signed agreement and one-third of the outstanding bill is required up front. The remaining outstanding balance, in installments, is required to be paid within 12 months of the signed agreement. This policy is actively adhered to. The city uses QuickBooks Pro 2012 for its accounting and payroll. An accounts receivable system is in place that tracks customers and past due accounts. The city's accounts payable is accurate and invoices are paid as received. Separate manual cash receipt booklets are used for different services provided by the city. A manual cash disbursement log is kept by month indicating the date of transaction, description, amount withdrawn or deposited and an ending balance. The city maintains a written and electronic chart of accounts for all budgeted revenue and expense categories. The city's accounting clerk completes monthly bank reconciliations. A sample purchase order system sample was sent to the city.

Tax Problems

Essential Indicators
Answer Question
Yes 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 city uses QuickBooks Pro 2012 to accurately calculate, track and report payroll liabilities. IRS release form dated January 9, 2014 listed the Chefornak Water and Sewer Utility compliant, but due to the lack of a more recent signed Authorization to Request Federal Tax information form by the city of Chefornak RUBA could not confirm compliance for this indicator. The state DOL/ESC deemed the city compliant up to March 2014. The city is not listed on the March-April 2014 Lien Watch. It was recommended to close the water and sewer utility EIN since it is operated under the city of Chefornak and the city has it's own EIN.

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.
Yes 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 is covered through Alaska Municipal League Joint Insurance Association (AMLJIA) workers compensation insurance coverage through July 1, 2014. Ordinance 09-02: Title II Chapter 2.8 Personnel Policy Requirements, adopted on January 21, 2009, outlines personnel policies for the City of Chefornak including topics such as merit system; classification and compensation; promotion; discrimination; nepotism; recruitment and hiring of personnel; work and pay schedules; evaluations; leave and holidays; resignation, layoff, and dismissal; and grievance procedures. Pursuant to the adopted personnel policy Chapter 2.84 Section 8, every original appointment and promotional appointment of a permanent employee is subject to a probation period of three months from date of appointment. RUBA staff reviewed detailed job descriptions for the water/pump house operator, water utility clerk, refuse hauler, sanitarian, and alternates for each position. Pursuant to Chapter 2.86 of the city's adopted personnel policy, all employees shall receive a written performance evaluation at the end of their probationary period and thereafter on their anniversary date. The city has a detailed personnel evaluation report and requires employees to also complete a self evaluation. The city manager conducts quarterly staff meetings to discuss current issues with employees. Chapter 2.84 of the city's personnel policy outlines the recruitment and hiring of personnel. Pursuant to policy, notice of permanent and temporary job openings of more than 2 weeks in duration shall be posted in at least three public places within the city. Notice shall include at a minimum the job title, rate of pay, duration of the job, and ending date of the recruitment period. Notice shall be posted for a minimum of three days. Review of three employee files indicated the city maintains personnel folders containing I-9's, job applications, and a letter of acceptance. The utility provides training opportunities to its staff on an as needed and available basis. City staff has successfully completed QuickBooks, Financial Management for Rural Utilities, and Small Water System and Distribution certifications.

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.
No 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
Ordinance 98-01 adopted in 1998 established the Chefornak Public Water and Sewer Department whereby deeming the city as the owner and operator of the utility. Ordinance 09-01 adopted on January 21, 2009, amends the original ordinance deeming the city council as the utility's authority further setting rates and regulations. The utility clerk/bookkeeper was hired in 2008 and is trained in QuickBooks and accounting. Currently, the administrator’s position is vacant. The city needs assistance in networking the computers and accurately setting up the QuickBooks accounting system. Both water treatment operators are certified to the class of the city's utility system. Council adopted the city's organizational chart in September 2011. Pursuant to state statute, the city council meets the first Thursday of each month and conducts special meetings to address city business as needed. The city complies with the Open Meetings Act by posting for council meetings in advance allowing for public participation and prepares meeting minutes of council proceedings.

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
Both water treatment operators are certified to the class of the city's utility system. Due to the system being 30 years old, there is no written and relevant maintenance plan; however, the operators are using checklists as a preventative maintenance plan to maintain their system. Monthly operation and maintenance reports from the utility operator are being completed, and routine spot checks of the facilities are conducted by the city mayor. Regular safety meetings are held, documented, and sent to RUBA staff for review. The community was not on the April 2014 Significant Non-Complier (SNC) list. A copy of the community's 2012 CCR is on file at DEC. The city was not able to provide RUBA staff with an inventory control list or a critical spare parts list.