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

Community:
Adak 
Staff:
Brice Eningowuk  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Adak 
Population:
326  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/1/2012 
Community Sanitation Overview:
The City of Adak operates and manages a piped water and wastewater system. The city council is the policy making body for the utility. The surface water is derived from Lake Bonnie Rose, which is located approximately three miles southwest of the core town site. The water utility is operated as a Class A public water system and operates under filtration avoidance (Public Water System Identification Number 260595); therefore, the only treatment provided is chlorination with required detention for disinfection. Water is treated, stored in two 450,000-gallon tanks, and piped to facilities and housing units. If needed, two 500,000-gallon storage tanks provide additional water storage. The wastewater treatment system discharges through a marine outfall line to Kuluk Bay. One-hundred percent of homes have complete plumbing. The city collects and deposits refuse at Roberts Landfill, the municipal landfill, which is a permitted class III landfill with balefill. The City also provides road maintenance, airport maintenance, and a small boat harbor facility. Bulk fuel is provided by the Aleut Corporation, which maintains nine underground tanks with a total capacity of approximately 18,000,000 gallons of marine diesel, gasoline, and jet fuel. Cable television is provided by Adak Eagle Enterprises; electricity is provided by TDX Adak Generating, LLC. A feasibility study to provide recommendations for water and wastewater utility downsizing, upgrading, and future utility project planning for the City of Adak was completed in 2004 with two updates and the most recent being in 2011 with the Alaska Department of Environmental Conservation: Village Safe Water. The study is contracted to the Anchorage based Bristol Environmental and Engineering Services Corporation. Although the water treatment plant is operating and provides adequate potable water, the City of Adak is attempting to address numerous water and wastewater utility concerns including an aging infrastructure, chronic line loss, and maintaining a water/wastewater utility designed for a large user/customer base. The infrastructure was for a military installation and the population has dropped dramatically due to the military installation closure. The City of Adak uses the fiscal year that starts on July 1. 
RUBA Status & Activities This Qtr:
On February 27, Anchorage LGS was notified via email that Alaska Airlines will not be placing a bid to provide service to Adak. The last Alaska Airlines flight will be June 28, 2012. On March 8, the Adak City Manager visited RUBA staff in the Anchorage RUBA office. The manager stated that he is going to be meeting with Alaska Airlines on Friday, March 9 to see if Alaska Air can place a bid to continue to provide jet service to Adak. The manager is also meeting with a lawyer in regards to city business. The city of Adak has been granted funds to look into a hydro plant on island. As of December 31, 2011 the VSW project has depleted all grant funds. The manager has stated that a business plan for a water treatment plant was never generated. The City is near completing a business plan for a water treatment plant. The city has no debt liabilities with AEA and Adak Community Development Corporation. On March 21, Anchorage LGS was contacted via telephone in regards to executive session limitations. Anchorage LGS advised the city to follow the Open Meetings Act as stated in AS 44.62.310-312 and be limited to one topic described by motion of the council. There are only four subjects that can be addressed in executive session: 1) matters, the immediate knowledge of which would clearly have an adverse effect upon the finances of the government unit; 2) subjects that tend to prejudice the reputation and character of any person, provided the person may request a public discussion; 3) matters which by law, municipal charter, or ordinance are required to be confidential; 4) matters involving consideration of government records that by law are not subject to public disclosure. To limit any confusion, it was advised to have separate motions for separate topics and to summarize the motion without being to vague and not disclosing the issue at hand. Example: if the city wants to discuss multiple employee evaluations and the employees wanted the evaluations to be discussed in executive session, once motion that states employee evaluations will be discussed will suffice. But if the city wanted to also discuss confidential financial information, a separate motion should be stated by a council member. 
RUBA Activities for the Coming Qtr:
Maintain contact with the City of Adak and provide assistance as requested to maintain RUBA assessment.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
22 of 27
Total Score:
48 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
Yes 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 of Adak adopted the FY12 entity budget on June 1, 2011. There is a utility budget of $137,890 and and the expenses are $137,890. A transfer from the solid waste/garbage fund of $10,850 is listed on the solid waste/garbage enterprise as an expense and as a revenue line item in the water/sewer enterprise.A transfer from the general fund of $8,140 is listed on the general fund as an expense and as a revenue line item in the water/sewer enterprise. There is a Water/Sewer Replacement line item in the Maintenance Reserves in the amount of $10,000. The monthly financial statements have been received and show budget vs. actual of all revenue and expenditures for the city.

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 collection policy is located in Chapter 4.11 of the City of Adak Code of Ordinances. The City of Adak utilizes QuickBooks Pro 2011 for the accounts payable, accounts receivable and payroll entries. The cash disbursement and cash receipt system is also entered in QuickBooks and a manual receipt is issued upon payment received. Adak also has a firm contracted to handle all payroll tax liabilities along with the QuickBooks entries. A chart of accounts was generated from QuickBooks that shows all income, expenses, liabilities, assets, accounts receivable/payable and bank accounts. Monthly bank reconciliations are compelted by the clerk and manager, with cash flow statements provided to the council. There is a purchasing policy in the City of Adak Code of Ordinances, Chapter 4.05.

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 IRS report dated March 14, 2012 shows that the city is compliant with required federal tax deposits, filing and has no record of a lien. The Department of Labor and Workforce Development, Employment Security Divisions report from March 13, 2012 states that the city is in compliance with state tax filing, deposits and is not on the January to February 2012 lien watch.

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.
No 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.
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 of Adak has workers' compensation with Alaska Municipal League Joint Insurance Association (AML/JIA) from July 1, 2011 to July 1, 2012. Title V in the Adak Code of Ordinances provides the hiring process and the six month probationary period for the city. The manager has the authority to appoint, supervise, and remove employees with council approval. The manager has all employee folders filed in a fireproof locket cabinet within the city office. Training is offered to employees; due to the cost of travel, this is not always available. The city manager is working on updating job descriptions and the evaluation process with AML/JIA.

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 owns the utility and updates the ordinances as needed. The council directs employees to enforce the policies and ordinances. The utility manager is the water operator. The operator updates the city manager as requested and oversees the operator is certified in small water systems treated due to expire on December 31, 2013. The council meets the first and third Wednesday of each month and has a posting notice in ordinance of 24 hours. The city has an organizational chart and is under review with Anchorage RUBA staff to verify placement of each employee.

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.
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 water operator is certified in small water systems treated due to expire on December 31, 2013. No major incidents have occurred with the utility. Village Safe Water did upgrade PRV-1 recently. There are possible line loss as there are areas within the service area that that have connections to vacant and unusable housing. The utility provides updates to the manager and council on an as needed basis. RUBA staff requested the minutes from that meeting. The water system is on the January 2012 SNC list for Surface Water Treatment Rule and Stage 1: Disinfectants and Disinfection By Products Rule violations. System needs to submit completed operator reports to return to compliance. The city manager is working on finalizing a critical spare parts and inventory lists as these are in draft form. The Navy did leave behind an excess amount of parts but it is currently unorganized and needs to be inventoried.