Quarterly Report: 2011, October - December (Q2), Kasaan

Community:
Kasaan 
Staff:
Lawrence Blood  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kasaan 
Population:
63  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
2/2/2011 
Community Sanitation Overview:
The City of Kasaan operates and manages a piped water system. The City Council is the policy making body for the utility. Water is derived from a water infiltration gallery (impoundment) at Linkum Creek, is treated, and piped to all homes in the core area. Homes use individual septic tanks and 95% are fully plumbed. The City collects and deposits refuse weekly at the Thorne Bay landfill. Electricity is provided by Alaska Power and Telephone Company. Kasaan is connected via gravel road to the Prince of Wales Island road system.  
RUBA Status & Activities This Qtr:
RUBA staff traveled to Kasaan on August 25-26, 2010 to provide onsite assistance. After applying for a grant through Alaska Native Tribal Health Consortium (ANTHC) to construct a new water treatment facility and water storage tank, the community was notified that a current water utility business plan was required to receive project funding. Using the RUBA provided business plan template and financial workbook, RUBA staff assisted the mayor in drafting an up-to-date business plan for the water treatment and water distribution systems. The draft business plan was submitted to Village Safe Water (VSW) for a courtesy review prior to submitting it to the city council for approval. In addition to meeting requirements for grant funding, city staff recognized the value of having a current business plan as a planning tool for their utility. Juneau RUBA staff traveled to Kasaan December 7-9, 2010 and then again on December 14 to provide onsite assistance. RUBA staff work with the newly hired utility clerk by provided initial training on retention schedules, elections, codifying ordinances, and other clerk duties. The city clerk is inexperienced with municipal government and has never held the position of clerk before. RUBA staff also provided assistance to the clerk in drafting several resolutions, ordinances, and a non-code budget amendment ordinance in preparation for the next city council meeting. On December 14, RUBA staff provided city council training. The training consisted of ordinance procedures and parliamentary procedure which was presented at a work session prior to the regular council meeting. The training was reinforced during the council meeting with the council practicing the proper procedures for amending several resolutions and ordinances that were on the meeting agenda. The city council now has a better understanding of their legal obligations for public notices, the types of ordinances, and their ability to amend ordinances and resolutions. The city currently meets all essential management indicators with only two sustainable indicators still unmet.  
RUBA Activities for the Coming Qtr:
RUBA staff will continue to provide assistance as requested to maintain essential and sustainable indicators. RUBA staff will provide assistance with developing a critical spare parts list for the water and bulk fuel utilities.
Scores:
 
Essential Indicators:
27 of 27
Sustainable Indicators:
25 of 27
Total Score:
52 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.
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.
Yes 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 fiscal year for the city is July 1 through June 30. The FY11 budget was adopted by a non-code ordinance on June 25, 2010. The utility budget is part of the overall city budget. The FY11 city budget is balanced and all utility-related revenues and expenditures are reasonably listed. Anticipated utility-related expenses exceed revenues, however; the governing body elected to subsidize the water utility. Projected water revenues, which are exclusively user fees, are $13,950. The projected water related expenses are $28,196. The mayor, who also serves as the utility manager, gives both written and verbal operational and financial reports to the council at monthly meetings. Financial reports consist of a current balance sheet and a year-to-date budget vs. actual profit and loss statement. Electricity is provided through Alaska Power and Telephone Company. A visual inspection of the most recent electricity billings verifies that the utility is current with all electricity accounts for the water utility. The community has a city-owned bulk fuel facility, which is comprised of propane, gasoline, and diesel storage tanks. The city receives fuel deliveries from Petro Marine in Craig, then retails this fuel to community members on a break-even basis. The city has adequate funds available and purchases fuel as needed. The city usually maintains a one to three month fuel supply in the summer months and a slightly higher level of fuel reserve during the winter. The governing body is fully aware that user fees do not produce sufficient income to cover operating expenses or repair and replacement (R and R) costs. It has been a general practice for the city to use other sources, such as the general fund, to subsidize utility operating expenses. The council's willingness to subsidize the water utility is evidenced by the inclusion of $15,000 on the FY11 Community Revenue Sharing budget. The community has adequate savings for unexpected repairs and equipment replacement. The city offsets the cost of providing water and solid waste collection services by charging monthly user fees. Residential is $60/month for water and $20/month for garbage collection. Senior Residential is $40/month for water and $13.75/month for garbage. Commercial is $70/month for water and $20/month for garbage. Garbage rates were last adjusted in December 2008, and it has been several years since water rates were last modified.

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 is currently using QuickBooks Pro for their accounts receivable, accounts payable, and payroll. It was originally installed through a RUBA-sponsored QuickBooks onsite installation and training grant. Since the original QuickBooks install, the city has upgraded to QuickBooks Pro 2008. The city has an adopted collection policy, which is contained in Title 7 of the Kasaan Municipal Code. The city follows the collection policy and actively pursues delinquent utility accounts. Collection actions include the establishment of payment agreements, service charges to restore service, and a 7.5% monthly service charge on delinquent accounts. The 7.5% monthly service charge exceeds the Alaska statutory limit of 10.5% per year but has never been enforced. Disconnection notices are sent to customers five days after the account becomes delinquent, including the date of intended service disconnection. Service disconnections are imposed when possible but, for the most part, are an unenforceable provision of their collection policy. Due to the age and condition of the distribution system and lack of adequate planning and utility easements, a large proportion of the curb stops are inaccessible, inoperable, or unable to be located. The community has placed an increased emphasis on pursuing delinquent accounts and has resorted to using a collection agency for customers that have moved out of town. The increased emphasis on collections has resulted in an improved collection rate from 40% a year ago to the current 97%. The utility bills customers each month in the form of a statement that includes water, garbage, and any rental fees, along with invoices for services rendered. Bills are sent out on the first of each month. The statement clearly shows both current and past due amounts but fails to provide a due date. The account receivables system documents customer payments and reports past due accounts with the corresponding monetary amounts. The aging report includes all customers and shows total amounts due as well as whether it is 1-30 days, 30-60 days, 60-90 days, or over 90 days past due. The city has an adequate chart of accounts. They use a customized version of the standard QuickBooks chart of accounts. Some accounts have been added to accommodate the enterprise funds and to allow financial transactions to be properly classified. The chart of accounts lists all the accounts in the general ledger; they are identified by a four digit reference number. The bookkeeper reports that all bank accounts have been reconciled. The city uses a purchase order system for all purchases and maintains a cash disbursement system to track expenditures. Employees complete purchase orders, which are then submitted to the mayor for an approval after it has been compared with remaining budgeted funds. The invoice is attached to the appropriate purchase order, and checks are cut once a week.

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.
Yes 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 of Kasaan uses QuickBooks Pro to calculate, track, and report payroll liabilities and makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). The community was deemed in compliance with taxes and reporting requirements by both the Internal Revenue Service (IRS) and the Alaska Department of Labor and Workforce Development (ADOLWD) within the last year.

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
Current coverage for workers compensation insurance was verified through Alaska Municipal League Joint Insurance Association (AMLJIA). The policy is effective from July 1, 2010 through June 30, 2011. The policy covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Copies of the workers' compensation policy are posted in accordance with state statute in all public buildings and in areas easily accessible to employees. Kasaan has a new personnel policy that was developed with the help of RUBA and AMLJIA. The employee handbook provides adequate guidance for the community and employees in the areas of hiring, conditions of employment, compensation, evaluation, discipline, grievances, employee benefits, and travel and training. The personnel policy contained in the municipal code covers hiring policies and the employment of city council members. Personnel evaluations are normally conducted after 30 days and six months for new hires and annually for permanent employees. The city keeps records relating to employees in a personnel file. The personnel files are well-organized and contain all the necessary employee documents. RUBA staff reviewed personnel files and found all current employees contained required documentation. The mayor reported that all files connected with an employee are considered strictly confidential, yet, upon inspection, the files were found in an unlocked filing cabinet. The mayor made an on-the-spot correction by having utility staff place a hasp and lock on the filing cabinet, thereby securing the files and limiting access.

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 of Kasaan owns and operates the water and bulk fuel utilities. The council is the formal governing body and meeting minutes verify that it is actively engaged in making decisions on behalf of the utilities. The council meets the second Tuesday of each month and holds additional work sessions if necessary. The city complies with open meeting requirements and posts meetings in accordance with local code and state statutes. The manager for the sanitation utilities is the mayor. Her applicable experience and training includes being a former business owner, and she has management experience with the Kasaan Bay water shed. She recently completed a 32-hour Organizational Management course and is planning on taking the remainder of the utility management courses necessary to become a certified utility manager within the next two years. The bookkeeper is responsible for the maintenance of the books for all community services. This employee has only held the position since 2009; however, she has over 40 years of bookkeeping experience. She has completed several QuickBooks trainings and has worked as a bookkeeper for the U.S. Forest Service and the City of Thorne Bay. The city operates a small level T (treated) drinking water system. The city has one certified operator working on the sanitary systems. The operator is adequately trained given the classification of the facility. The utility operator Michael Escoffon has the following certificates: Water Treatment 1 Exp. 12/31/12 Water Distribution P Exp. 12/31/12 The council has adopted all the ordinances necessary to own and operate the utility services. Title 7, Chapter 2 of the Kasaan Municipal code establishes the policies and procedures for the operation and maintenance of the community water supply system; Title 7, Chapter 1 for garbage collection; and Title 7, Chapter 3 for the bulk fuel utility. The utility has adopted an organizational chart which is included in their utility business plan.

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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The operator's provisional water treatment and water distribution certifications exceed State of Alaska licensing requirement for a Small T water system. The operator is working towards his Level 1 certification; however, the next level of certification requires 1950 hours of on-the-job experience. The operator only spends two hours a day on water treatment and one hour a day with the water distribution system. The utility operator consults with the mayor on a regular basis and provides both verbal and written status reports. RUBA staff reviewed samples of the monthly written report. The report is a simple, well thought out, pre-prepared, fill-in-the-blank form that allows the operator to report a standardized set of information points. The report includes water treatment and consumption information, fuel consumption, personnel utilization, customer complaints, problems resolved, new problems identified, and preventative maintenance tasks not completed. The city participates in the AMLJIA safety and risk reduction program and has recently adopted a new safety manual. RUBA staff reviewed the most recent training documents, sign-in sheets, and meeting notes. The city keeps records on the types of training completed, the materials used, and the employees who attended the training. Recent trainings included 'Early return to work program,' 'Holiday fun, stress, and accidents,' and 'Back injury prevention and safe lifting.' The water operator reports that the water utility is operating at the proposed level of service and has not suffered any major problems or outages due to management issues. The utility completes and distributes its Community Confidence Report (CCR) providing drinking water quality information as required by the Safe Drinking Water Act and State regulations. The last CCR was reviewed by the ADEC drinking water program for completeness and was distributed to customers on June 17, 2009, by means of direct mail, posting in several public places, and delivering to other community organizations. The utility does not have a critical spare parts list but does maintain an inventory control list. The utility maintains a sufficient level of supplies and tools, but, due to the community's island location and dependence on air and ferry service, the level of critical spare parts may be inadequate to prevent a service outage. The FY09 utility budget has allocated zero dollars towards repairs and maintenance. The City is not listed on the Significant Non-Compliance (SNC) list as of October 2010