Quarterly Report: 2014, January - March (Q3), Togiak

Community:
Togiak 
Staff:
Jeffrey Congdon  
DCRA Regional Office:
Dillingham regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Togiak 
Population:
878 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
12/9/2011 
Exp Date:
 
Last Updated:
4/17/2014 
Community Sanitation Overview:
Water is derived from two wells, treated, and stored in a 500,000-gallon tank. Approximately 125 households are connected to the piped water and wastewater system installed in 1976; the remaining homes have new individual wells and wastewater tanks. Roughly 61 units with private wells and wastewater systems are in the Togiak heights subdivision north of the main village. In all, approximately 200 homes are plumbed and 14 lack plumbing. The water system is 25 to 30 years old; however, trained public works staff continue to effectively maintain and renovate the system. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Togiak this quarter to assist the city in making regular payments and reports to the IRS, as well as reconciling accounts. Once RUBA staff arrived in Togiak, the city administrator informed RUBA staff of a situation regarding an existing sea-wall. The sea-wall needs an easement from the State of Alaska because it was constructed in the inter-tidal zone. RUBA staff worked with Togiak personnel to locate documents from the construction of the sea-wall. Togiak personnel contacted Department of Natural Resources staff and proceeded to follow the steps to get the necessary easement. RUBA staff was also informed during the visit of the need for a single-audit for Togiak. RUBA staff worked to prepare a Request for Proposals (RFP) and instructed Togiak staff to distribute the RFP to multiple eligible accounting firms. Togiak needs to have an audit of FY13 funds. The RFP seeks an aggressive timeline for the audit, and gives Togiak the opportunity to award the contract on a point-system to the most appropriate firm, rather than being forced to award to the lowest bidder. RUBA staff worked with Togiak’s city clerk to reconcile accounts, and found discrepancies in the recording of the transfer of funds between city accounts during the visit, as well. Further, RUBA staff attended a city council meeting, and observed that the council telephonically polls council members for consent, to pass resolutions. This current practice is not in accordance with the requirements of the Alaska Open Meetings Act. RUBA staff reviewed the payroll process, and the generation of reports for tax reporting purposes. Togiak appears to be reporting tax liabilities and paying those liabilities in accordance with IRS and State of Alaska Department of Labor requirements. Togiak personnel attended the RUBA program’s Planning Management for Rural Utilities training in February. 
RUBA Activities for the Coming Qtr:
RUBA staff anticipates conducting a RUBA assessment in Togiak this quarter, likely in the month of May. RUBA staff will also provide assistance to the community meeting any deficient indicators identified by the assessment.
Scores:
 
Essential Indicators:
26 of 27
Sustainable Indicators:
20 of 27
Total Score:
46 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 city adopted the FY14 budget in June 2013. A copy of the approved budget was submitted to the Division of Community and Regional Affairs, as required. The budget includes a line item of $120,000 as income from residential customers. This is based on a 100 percent collection rate; however, the actual collection rate has been 68 percent. A monthly financial report that compares year-to-date (YTD) revenues and YTD expenditures to the annual budgeted amounts is prepared and submitted to the policy making body. Annual operating revenues and expenditures are reported on a monthly financial report. YTD expenditures are currently exceeding revenues. Heating oil for the utility is delivered by barge in the fall. The utility uses an average of 3,000 gallons annually, and budgets $12,000 for heating fuel purchases. The utility budget also includes a line item for Repair and Replacement (R&R) funds, but there is no evidence that R&R funds are actually being set aside and accumulating as necessary. FY14 budget amendments are currently not necessary. The administrator provides a written managerial report on the utility at the regular monthly meetings. Copies of the report are included in the agenda packets and in the meeting file. Copies of the reports and the meeting files and agendas were supplied to RUBA staff.

Accounting Systems

Essential Indicators
Answer Question
No 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.
No 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 billing and collection procedures are included in the utility ordinance that was adopted in January 2004. Utility staff state that they have taken steps to collect delinquent accounts; a disconnection of service policy is in place and said to be enforced. Payment agreements are in place for the delinquent accounts and were made available to RUBA staff. However, a review of the accounts receivable and customer aging summary does not indicate the utility is indeed following policies. QuickBooks accounting software is used to record customer invoices and payments in the accounts receivable program. QuickBooks is also used for tracking accounts payable; however, invoices are not being entered when received, and payments are not entered when made. The utility finance officer uses QuickBooks 2012 for financial record keeping, including all payroll records. The bookkeeper has received training in the use of QuickBooks through classes sponsored by the RUBA program. The city clerk writes a receipt for any income received. A copy of every receipt is kept in sequentially numbered permanent receipt books. It does not appear that data from the receipt book is entered into the utility's computerized accounting system. All payments are made by check and every check identifies an amount, an expense account, and a description of the payment’s purpose. The data for every check written is recorded in the check register. A copy of paid invoices is kept in the vendor files. The utility's chart of accounts identifies all asset accounts (un-deposited funds, bank accounts, etc.) and all liability accounts (current, long-term, and payroll liabilities), and fund balances. Income and expense accounts are identified in a manner that matches the income and expense line items in the budget. Bank reconciliations have not been completed for all accounts. The utility adopted a purchasing policy in 2002. The policy requires approval from the administrator for purchases. There is a verbal understanding by staff that up to $5,000 will receive approval by the administrator; any purchases in excess will require council's approval.

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 uses the QuickBooks accounting program to accurately calculate, track, and report payroll tax liabilities. The state Department of Labor and Workforce Development, as well as the IRS, have deemed the city compliant with payroll tax reporting and deposit requirements. The utility is not named in the most recent Lien Watch report.

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.
No 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 valid workers’ compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA), and proof of coverage is properly posted. A copy of the City of Togiak's personnel policies, adopted July 2008, is on file with RUBA staff. Job descriptions have not been adequately written and are not on file with city staff. The utility does have a written evaluation process; however, staff state they have not been formally evaluated for several years. The hiring policy that the city follows is not written down. Job notices are posted with the job title and description and interested applicants apply at the city office. During a recent visit to the community, RUBA staff confirmed that personnel files contained the required forms. The probationary period for new hires is not described in the personnel policy. The utility budget includes an appropriation of $1,000 for staff training.

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 adopted a utility ordinance in February 2004 and RUBA staff has a copy of the signed ordinance on file. The ordinance identifies the city as the owner and operator of the community’s sanitation utilities. Meeting minutes confirm that the city council, the utility’s governing body, reviews the utility policies and rates on an annual basis and makes changes as needed. Past meeting minutes also show that the city council takes an active role in enforcing utility policy. The city administrator fills the role of utility manager by developing and overseeing the utility budget, supervising the utility clerk, and providing monthly reports to the council. The city clerk/finance officer has two years’ experience on the job and has attended a QuickBooks training class sponsored by the RUBA program. The utility is designated a Class 2 Water Distribution Circulating System with 130 service connections. According to the Alaska Department of Environmental Conservation (ADEC) website, its utility operators have the required level of training and certification for this system. The city has an organizational chart included with its adopted utility business plan. Regular council meetings are held once a month; special meeting are held as needed. Meeting files and minutes have been received to confirm that agendas are posted and that all meetings are open to the public as required by the Open Meetings Act.

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
According to the Alaska Department of Environmental Conservation (ADEC) website, the utility operates a Level 2 water distribution system. There are two primary operators assigned to this system. The provisional certification of one operator expires December 31, 2015 and the other operator’s certificate expired at the end of 2013. The utility operates a Class 1 wastewater collection system with two primary operators. One’s certificate expires December 31, 2014 and the other’s December 31, 2105. No certification is needed to operate the city’s wastewater lagoon. The utility states they have a preventive maintenance plan that was developed by the Remote Maintenance Worker (RMW), though a copy of the plan is not on file with RUBA. The operator reports using a checklist to verify that preventive maintenance is performed. The preventive maintenance plan is posted on the wall of the treatment plant. The administrator spot checks the utility on a routine basis. The utility has a safety manual on file and holds weekly safety meeting. The administrator receives written updates weekly from the operator. RUBA staff has a copy of the 2012 Consumer Confidence Report (CCR) on file. According to the utility clerk, the CCR was mailed to all residents in June 2013. The utility does not have a published inventory control list. The utility does not have a published critical spare parts list on file. To prevent unnecessary outages, an extensive inventory of critical spare parts is kept in stock at the utility and was reviewed by RUBA staff. The system is not the January 2014 Significant Non-Complier (SNC) List.