Quarterly Report: 2012, January - March (Q3), Kasaan

Community:
Kasaan 
Staff:
Glen Hamburg  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kasaan 
Population:
66  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/1/2012 
Community Sanitation Overview:
The City of Kasaan is located on the east side of Prince of Wales Island and is connected by gravel road to the island's other communities. Water for the community is derived from an infiltration gallery (impoundment) at Linkum Creek. The water is then treated at the city's Class 1 treatment facility and piped to all homes in the core area. All of these homes utilize 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.  
RUBA Status & Activities This Qtr:
RUBA staff traveled to Kasaan on February 8 to provide training on records management, financial reporting, and ordinance codification to the city's utility clerk. The trip also allowed RUBA staff the opportunity to lead a municipal code workshop session with members of Kasaan's city council, which serves as the utility's governing body. The workshop was the capstone of a nearly one-year effort between city and RUBA staff to collect, organize, retype, and amend the city's entire code of ordinances, with particular attention to the public utilities, personnel, administration, and elections titles. Further, RUBA staff worked with utility staff this quarter to clarify the city's debt issuing authority, outline city council executive session guidelines and public comment periods, and review joint maintenance agreements with the local tribe. The City of Kasaan meets all of the RUBA assessment's essential indicators and nearly all of its sustainable indicators. This quarter, however, RUBA staff continued to monitor the city's water utility monthly financial reports, state and federal tax payments, workers' compensation insurance coverage, and utility operator certification. 
RUBA Activities for the Coming Qtr:
Kasaan's mayor and city clerk are registered to attend the 32-hour RUBA 'Utility Clerk Management' training in Juneau April 2-6 and city officials have expressed interest in participating in the 'Personnel Management for Rural Utilities Training' in Klawock this May. Kasaan currently meets all of the RUBA assessment's essential indicators and nearly all of its sustainable indicators. Nonetheless, RUBA staff will continue to offer assistance to the city's utility staff to maintain the management capacity of the community's sanitation systems.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
25 of 27
Total Score:
51 of 53

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 city adopted its FY12 budget by non-code ordinance on June 22, 2011. The budget includes utility department revenues and expenses as part of the overall city operating budget and allocates appropriate funds for supplies, equipment, fuel, payroll, travel, and certain facility expenses. It does not, however, include a repair and replacement fund, though the community has adequate savings for unexpected repairs. While the FY12 budget realistically considers all costs associated with operating the water treatment facility, revenue generated from user fees is not sufficient to cover these costs. Rather, the city elected to subsidize the water utility by folding nearly $54,000 in FY12 cost overruns into the overall city budget. The city's FY11 budget remained balanced throughout the fiscal year and resulted in a prior-year cash balance of $124,682.61 for FY12. The city council has adopted budget amendments whenever adjustments to the original plan have been required. The mayor, who also serves as the utility manager, delivers both written and verbal financial reports to the city council at its monthly meetings. RUBA staff reviewed three months of these written reports and found that they include a current balance sheet as well as a year-to-date budget vs. actual profit and loss statement. The city clerk states that the reports have been effective in clearly outlining to council members the utility's financial position. A written 'Public Works Report' is also provided to the council each month which details the amount of water produced by the treatment facility, the amount of fuel and chemicals used, and a breakdown of the operator's work hours. Electricity in Kasaan is provided by the Alaska Power and Telephone Company. RUBA staff has reviewed all five of the city's electricity accounts, including the water treatment facility account, and found that all payments are current and include Power Cost Equalization (PCE) credits. The community also has a city-owned bulk fuel facility, which is comprised of propane, gasoline, and diesel storage tanks. The city receives fuel deliveries every one to three months from Petro Marine in Craig and then retails this fuel to community members on a 'break even' basis. Adequate funds have been allocated in the city budget to purchase fuel as needed.

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 has 29 customers receiving sanitation services. Those customers are divided into three categories with the following uniform flat rates: Residential: $60 per month for water and $20 per month for garbage collection; -Senior Residential: $40 per month for water and $13.75 per month for garbage collection; -Commercial: $70 per month for water and $20 per month for garbage collection. These rates are set and adjusted by the city council through resolution in accordance with the rules set forth in Title 7 of the City of Kasaan Code of Ordinances. Along with rate setting procedures and customer class definitions, Title 7 outlines utility billing procedures, results of delinquency, discontinuance of service, and all other utility-related ordinances. Utility bills are mailed to customers during the first week of the month of service. Statements include the customer's name and address, the amount due for water and garbage services, previous statement balances, late fees, total amounts owed, terms, and the due date. Bills are considered due upon receipt and all bills not paid by the next billing cycle are considered delinquent, unless a written agreement has been made with the city clerk or the bookkeeper establishing a different due date. At the time of assessment, utility customers could pay their bills either by mail or in person at the city hall. However, the city is considering adopting a credit card payment option in the coming months. Customer payments are recorded in a carbon copy receipt book that notes the customer's name and address, the date, the payment amount, what the payment was for, the form of payment, and who the payment was received by. Payment information is then recorded in a computerized system using QuickBooks accounting software. The software can clearly identify which customers are current in their payments and which are 30 days, 60 days, or 90 days delinquent. Delinquent bills are automatically subject to a two dollar 'late payment charge.' Customers who remain delinquent for ten days are to have their water service disconnected until payment is made in full. By actively enforcing its adopted collection policies, the city has maintained a collection rate average of over 90% each month. In addition to its accounts receivable system, the city uses QuickBooks software in its accounts payable and payroll systems. The utility's purchasing system starts with utility staff obtaining a numbered purchase order form. That purchase order number is matched to a separate 'Purchase Order Register' which records the form number, the date, the vendor, the department, the name of staff requesting the purchase, and a description of the items being purchased. The mayor reviews the purchase request, verifies funding availability, issues approval, and allocates the purchase to a specific account, as outlined in the city's chart of accounts. All approved purchases and accounts payable are then recorded in the QuickBooks software. The city's bookkeeper reconciles bank accounts on a monthly basis. RUBA staff has reviewed recent bank statements and found that reconciliations are indeed current.

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 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 Internal Revenue Service's Taxpayer Advocacy Office confirmed on March 19, 2012 that Kasaan is current in its federal tax reports and filings. The Alaska Department of Labor and Workforce Development confirmed on March 8, 2012 that all state tax payments are current as well. There are no past tax liabilities or liens against the city.

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
All city employees are covered by an Alaska Municipal League Joint Insurance Association (AMLJIA) workers' compensation insurance policy. That policy is effective from July 1, 2011 until July 1, 2012 and covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage and Equal Opportunity information are posted in all areas of employment, including the city hall, the post office, the city shop, and the water treatment plant. RUBA staff verified that the city is current in its payments to AMLJIA and that adequate funds have been allocated in the city budget for payments over the remainder of the fiscal year. On April 12, 2011, the city adopted the 'City of Kasaan Employee Handbook.' This handbook was compiled with the assistance of AMLJIA staff and covers a broad range of topics, such as nature of employment, employee conduct, immigration law compliance, conflicts of interest, hiring practices, personnel files, job descriptions, benefits, leave, pay, travel, training, work conditions, and discipline. The handbook must be read, acknowledged, and signed by all city employees. Hiring practices and the employment of city council members are further detailed in Kasaan's municipal code. In accordance with these established policies, the city conducts employee evaluations at the end of a 90-day probationary period for new employees and then annually for established employees. Evaluations are documented on standardized employee evaluation forms which adjudicate job knowledge, quality of work, work output, attitudes and relationships, initiative and reliability, leadership, accomplishment of goals, and a list of future goals of employment. Each section is rated as either 'Outstanding,' 'Satisfactory,' or 'Not meeting job expectations.' RUBA staff verified that evaluations, Employment Eligibility Verification Form I-9s, W-4s, work release authorizations, and all other necessary documentation are included in confidential personnel files. These files are kept in a secure filing cabinet with limited access in the mayor's office. The city continues to budget for and provide training opportunities to utility staff as needed and available. The mayor, two council members, and the city clerk attended a 32-hour RUBA Elected Officials course that was held in Klawock in March 2011. The mayor, city clerk, and bookkeeper all completed the 32-hour RUBA Financial Management for Rural Utilities training course in Ketchikan August 15-19. The city clerk also attended the 24-hour Introduction to QuickBooks course in Juneau April 11-15 and a notary public training in Craig on September 30.

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 community's water and bulk fuel utilities. Ordinances giving the city the necessary authority to operate these facilities are contained in Title 7 of the City of Kasaan Code of Ordinances. The seven-member city council is the city's governing authority and the utilities' policy-making body. The council holds regular meetings as required by Alaska Statutes Title 29 on the second Tuesday of each month and holds additional work sessions when required. To comply with Alaska's Open Meetings Act, the city consistently posts notice of each council meeting at least five days in advance at the city hall, the Organized Village of Kasaan tribal office, and the library. Each notice indicates the type of meeting to be held, as well as its location, date, and time. The council is active in policy making of the utility, as evidenced in the six months of meetings minutes reviewed by RUBA staff. These minutes show that financial and public works reports are regularly provided to and reviewed by the council and that ordinances and resolutions amending utility policy are adopted as necessary. Since September 2010, the city has made it a priority to review and update its code of ordinances by addressing such issues as abandoned vehicle policy, mission statements, records retention schedules, city official compensation, fee schedules, municipal acts, garbage services, and water utility services. The manager for the sanitation utilities is the city mayor, Audrey Escoffon. The mayor has broad experience as a former business owner and associate of the Kasaan Bay water shed. She also recently completed the 32-hour RUBA organizational and financial management courses, attended a portion of the 32-hour RUBA Elected Officials course, and is planning on taking the remainder of the utility management course series to become a certified utility manager in the next two years. The bookkeeper, Peggy Staton, is responsible for the maintenance of the books for all community services. Ms. Staton has been in the position since 2009 and has over 40 years of bookkeeping experience. She has completed several QuickBooks training sessions, completed the RUBA 32-hour Financial Management for Rural Utilities training, and has worked as a bookkeeper for the United States Forest Service and the City of Thorne Bay. Terry West is the city clerk and also serves as the utility clerk. Ms. West began working for the City of Kasaan in October 2010 and has significant bookkeeping experience as well. As noted in the 'Personnel System' section, Ms. West attended a 24-hour Introduction to QuickBooks course in Juneau April 11-15, the 32-hour Financial Management for Rural Utilities training in Ketchikan August 15-19, a notary public training on September 30, and travelled to Seattle this summer for additional clerk training. Two city employees operate this system and hold the following endorsements and Continued Education Units (CEUs): Michael Escoffon Water Treatment, Level 1 - Expires 12/31/2012, CEUs not yet met Water Distribution, Provisional - Expires 12/31/2012, CEUs not yet met Robert Baker Water Treatment, Provisional - Expires 12/31/2012, CEUs met Water Distribution, Provisional - Expires 12/31/2014, CEUs not yet met Michael Escoffon, the utility's lead operator, also attended the Alaska Rural Water Association's 'Prince of Wales Drinking Water Source Assessment and Protection Workshop' on May 13, 2008, as well as the NTL Alaska, Inc. 'Alaska Water Treatment Systems Class' in Ketchikan August 27-30, 2007. The other water operator, Robert Baker, successfully completed the 32-hour RUBA Elected Officials course in Klawock March 7-11, 2011. The city has adopted an organizational chart that clearly indicates the levels of authority between city staff.

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 operators' certifications meet the requirements of the State of Alaska's Department of Environmental Conservation (ADEC), Division of Water. Robert Baker's water treatment provisional endorsement will be advanced to a Level 1 certificate after 1950 hours of on-the-job experience. Utility staff have also participated in the Alaska Municipal League Joint Insurance Association's safety and risk reduction program. As outlined in the 'Organizational Management' section, both operators continue to receive additional training whenever possible. The utility operators consult with the utility manager on a regular basis and provide both verbal and written status reports to the city council each month. The written reports are simple, logical, standardized fill-in-the-blank forms that allow the operators to report on a given set of issues. The reports include water treatment and consumption information, fuel consumption figures, staff hours worked, any complaints by utility customers, identified problems, problems that have been resolved, and preventative maintenance tasks to be completed. Staff report that the utility is operating at the proposed level of service and has not suffered any major problems or outages due to management issues. The utility is also not listed on the Environmental Protection Agency's Significant Non-Compliance (SNC) list. Consumer Confidence Reports (CCRs) are completed and distributed as required by the Safe Drinking Water Act and state regulations. The most recent CCR for 2011 was distributed to utility customers on time and detailed the source of Kasaan's water supply, the level of contaminants, precautions to be taken before drinking, and other information to properly inform the community of the water's quality and safety. The utility has adopted a 'Safety Policy and Handbook' and holds formal monthly safety meetings. The safety handbook is extensive and includes information on fire prevention, emergency action plans, hazard communication, machine safeguarding, lockout/tagout, materials handling, personal protective equipment, electrical safety, confined spaces, blood borne pathogens, and numerous other safety-related topics. The monthly safety meetings are documented on forms provided by AMLJIA which record the date, training topics discussed, materials reviewed, and employees present. RUBA staff reviewed three months of these forms and found that the mayor, the bookkeeper, the city clerk, and both utility operators attended each meeting. The utility does not maintain a critical spare parts list. Some critical supplies and tools are kept on hand, but, due to the community's remote location and dependence on air and ferry service, the collection of spare parts on hand may be inadequate to prevent a service outage. The utility manager has acknowledged the need to compile a critical spare parts list and will work with the operators, RUBA staff, and engineers with the Alaska Native Tribal Health Consortium (ANTHC) to have one developed.