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

Community:
Elim 
Staff:
Leroy Seppilu  
DCRA Regional Office:
Nome regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
8/12/2008 
Entity:
City of Elim 
Population:
352 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
9/12/2007 
Exp Date:
8/12/2010 
Last Updated:
7/1/2014 
Community Sanitation Overview:
Water is derived from a well and is treated. Water and wastewater systems built by BIA in 1974, along with housing provided by BIA and HUD, have provided residents with piped water and wastewater, indoor water heaters and plumbing and in-home washers and dryers. Waste flows out to a wastewater treatment plant with ocean outfall. The landfill is not permitted. The city needs a new water source, since water shortages occur and cracked PVC pipes need to be replaced. 
RUBA Status & Activities This Qtr:
A new city clerk was hired. She has had excellent past experience as city clerk and bookkeeper. Soon after she started working, she called RUBA staff and asked for an update on the city's finances. She agreed that the city's water and wastewater department may be getting low with revenue as the expenses arose due to higher fuel prices and higher electricity costs. The city's collection rate has slacked a bit as well as efforts to collect past dues were not made or followed aggressively the past couple of years. 
RUBA Activities for the Coming Qtr:
RUBA staff plans to make at least one on-site visit to review the city's finances, including the water and wastewater department. The new city clerk, who has worked before for the city as city clerk and city bookkeeper has asked RUBA staff to work with the city council and administration to review the water and wastewater's finances and make recommendations on the directions to take to keep the city and the department financially viable. RUBA staff will continue to work with the city council to revise the city's code of ordinances, including the water and wastewater ordinance.
Scores:
 
Essential Indicators:
25 of 26
Sustainable Indicators:
25 of 27
Total Score:
50 of 53

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.
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
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.
No YTD expenditures are at a level equal to or below those budgeted.
Yes A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The Water and Wastewater Department's revenues and expenditures are listed in the current utility budget. The last couple of years or so, the water and wastewater department's revenues and expenditures have been in the negative. Last year, the FY '14 "Actuals" for revenues were $117,000 and expenditures were for $132,000. The deficit being at least $15,000. The latest information is that the Year-To-Date (YTD) revenues are $62,500 and expenditures of $85,600, with a deficit of at least $23,000. RUBA staff has discussed the issue with the new city clerk and the mayor and their thought is to gradually raise the monthly residential rates from the current $75 a month to eventually $120 a month over the next several years to make the department financially solvent. The city has been using a monthly financial report in an Excel Spreadsheet that was recommended to be used a couple of years ago. the reports are made regularly by the city bookkeeper, albeit a couple of months behind. The city is current with paying all its major utility bills, including the electricity for the water and wastewater department. The city participates in Norton Sound Economic Development Corporation's Bulk Fuel Purchasing Program. Most of the fuel is delivered by early September and the Program charges the participating communities the landed cost of the fuel. Last year, the average cost was about $4.12 a gallon for diesel fuel. The city uses the revenues from NSEDC's Community Benefits Share Program. The current yearly revenue from NSEDC is $150,000 for the member communities. The city council is planning to gradually raise the monthly utility rates for residential customers gradually, but in the meanwhile, the city subsidizes the department from revenues from sales tax, Community Benefits Share funds, etc. The revenues for the department are still below the expected amount and the expenditures are still about the expected amount. The city clerk makes monthly reports to the city council. Budget amendments are made as needed and the council did not make any amendments for this quarter.

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 utility has a comprehensive collection policy and actively follows it. The utility bills customers on a regular monthly basis using QuickBooks. An accounts receivable system is in place which tracks customers and reports past due accounts and amounts. An accounts payable system is in place. The payroll system correctly calculates payroll and keeps records. A cash receipt system is in place that records incoming money and how it was spent. The utility has a cash disbursement system that records how money was spent. The city bookkeeper uses QuickBooks for billing, payroll and payroll taxes, tax reports and monthly financial report preparations. The City is expecting to take past due customers to small claims court. The past dues total about $15,000, some of it from the past year. The city has not pursued collection efforts to date.

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 has a system to accurately calculate, track, and report payroll tax liabilities. The city is current on filing ESC and 941 quarterly tax reports. The city is current on making tax deposits. The city does not have any past due tax liabilities. The city bookkeeper uses and is familiar with QuickBooks for use for all tax reports. The city subscribes to the monthly payroll updates with Intuit. Under IRS rules, the City is a once-a-month depositor. The City completed the W-2s and W-3T in a timely manner and submitted the forms to all its employees and copies to Social Security Administration in a timely manner.

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 has a current general liability and workers' compensation coverage through Alaska Municipal League Joint Insurance Association (AMLJIA). As required by State law, the city has a posted workers' compensation policy. The policy is in effect from July 1, 2013 to July 1, 2014. The city has extended the policy and paid for another year for workers' compensation coverage effective to July 1, 2015. The utility has adopted and uses a personnel policy. The utility has adequate written job descriptions for all positions. The utility has adopted and follows a written personnel evaluation process that ties the job description to the evaluation. The utility has an adequate written hiring process, and has personnel folders on every employee that contain at least a completed I-9 form, job application and letter of acceptance. The utility has a probationary period for new hires. Orientation and evaluations are conducted. The utility provides training opportunities to staff as needed and available. The city council recently revised its personnel policies to change the pay period from bi-weekly to weekly payday to attempt to deal with and control the payroll advances. Administration employees attend training classes as needed including RUBA-sponsored UTM workshops in the Nome region.

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 council is the policy making body of the water and wastewater department. Water and wastewater issues are included as an agenda item in its regular monthly reports. All the water and wastewater employees are adequately trained and able employees. In the absence of the mayor, the vice-mayor comes in daily to actively make day-to-day decisions affecting the water and wastewater department's issues. The water and wastewater ordinance is being revised, but will essentially remain the same. The new City Clerk acts as a utility manager and is experienced with the finances of the City, including the Water and Waste-water department.

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
The operators are certified to the level of water and wastewater service for the city. The operators work closely with the area Remote Maintenance Worker on operational issues. The employees attend the telephonic safety meetings sponsored by the city's workers' compensation provider. The operators work closely with the supervisor as needed and order supplies and equipment to efficiently operate the utility system. The city is not on the SNC list. The utilty maintains an inventory control list and a critical spare parts list.