Quarterly Report: 2014, January - March (Q3), Pilot Point

Community:
Pilot Point 
Staff:
Glen Hamburg  
DCRA Regional Office:
Dillingham regional office 
Gov't Type:
Second Class City 
Borough:
Lake and Peninsula Borough 
Agreement?
Yes 
Agreement Date:
2/12/2014 
Entity:
City of Pilot Point 
Population:
70 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
4/1/2013 
Exp Date:
10/7/2012 
Last Updated:
4/17/2014 
Community Sanitation Overview:
The City of Pilot Point is located on the northern coast of the Alaska Peninsula, on the east shore of Ugashik Bay. The community relies on individual wells, cisterns, wastewater tanks, and outhouses. There is no central water or wastewater system, but all occupied homes are fully plumbed. More than half of the homes in Pilot Point are only occupied seasonally. The city provides wastewater pumping services and maintains a wastewater lagoon. It also operates a Class 3 municipal solid waste landfill and fuel station. Wind turbines supplement the community's electrical supply and there is a project underway to expand the service. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Pilot Point in January to assist in a number of utility management efforts. Working with the newly-hired city manager, as well as the mayor, clerk/treasurer, and public works and fuel department staff, RUBA staff assisted in drafting comprehensive policies and procedures governing the city’s wastewater pumping, solid waste collection, and fuel pumping and delivery services. RUBA staff also helped write administrative policies and procedures to guide the city’s purchasing processes, the operation of its QuickBooks file, check cashing procedures, computer and telephone use, staff travel, and the use of city equipment. Those administrative policies and procedures have since been formally adopted by the city council, the utility’s governing body. Further, RUBA staff assisted the city’s utility staff during the visit in preparing financial reports, understanding records retention laws, researching an EPA grant, obtaining a new email service, and re-programming the city’s time clock to abide by federal overtime laws. The visit also allowed RUBA staff to attend a meeting of the utility’s governing body, introduce to members the services available through the RUBA program, and collect supporting documentation for the city’s RUBA report. That documentation verifies that the city now meets several essential and sustainable indicators of the report that were previously deficient. In addition to this visit, RUBA staff assisted Pilot Point remotely this quarter by reviewing a draft request for proposal (RFP) for a generator, designing a work order request form and a city facility/equipment use form, encouraging the city clerk to develop a reasonable records retention system, and clarifying for city officials the requirements for reading proposed enactments at public meetings. RUBA staff also provided advice to the city manager on language to include in employee handbooks clarifying ‘at-will’ employment terms. Further, RUBA staff assisted the city in adopting a revised personnel handbook by helping to draft necessary ordinances and resolutions, outlining the process for those enactments’ adoption, and reviewing draft handbook language. RUBA staff also advised the city in the development of employee travel policies and provided sample policy language after having it first reviewed by the city’s workers’ compensation insurance provider. The city adopted its budget ordinance this quarter and the council now receives appropriate financial and manager reports at its monthly meetings. 
RUBA Activities for the Coming Qtr:
RUBA staff has been requested to make a quarterly visit to the community in April to assist in codifying utility-related ordinances. RUBA staff will use the visit to assist city clerk/treasurer in developing a records retention system, as well. In the coming quarter RUBA staff will also help see that adequate written job descriptions are available for all positions, that recently adopted administrative policies and procedures are functioning as hoped, and will see that employees are given the opportunity to attend utility management trainings as needed.
Scores:
 
Essential Indicators:
20 of 24
Sustainable Indicators:
15 of 24
Total Score:
35 of 48

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.
No 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 of Pilot Point follows a fiscal year beginning October 1 and ending September 30. The council adopted its FY14 budget by non-code ordinance on January 14, 2014. Though the budget was adopted late, it figures realistic estimates for income and expenses based on prior year actual amounts. The city expects to receive more than $383,000 in revenue from the various services it provides, including wastewater pumping services. Funds are allocated for fuel, salaries, payroll taxes, employee travel and training, equipment maintenance, and other necessary expenditures, except facility and equipment repair and replacement. The overall budget, which includes nearly $100,000 in Community Revenue Sharing (CRS) funds, is balanced, with the city anticipating FY14 revenues to exceed FY14 expenses by $10,901. The full cost of sanitation service in the community is subsidized by the CRS funds and other revenue sources, such as borough revenue sharing and fish taxes. The city has not submitted evidence that financial reports comparing budgeted and actual income and expenses are provided to the city council each month. Nonetheless, a year-to-date profit and loss report provided by the city shows that income and expenses are below budgeted amounts for this point in the fiscal year, and that the city is receiving income as scheduled and anticipated. As mentioned in the beginning of this report, the only sanitation service the city provides is as-needed wastewater pumping. That service does not require fuel other than gas for the pumping truck, which the city maintains an adequate supply of in town. The city also has a bulk fuel loan through the State of Alaska’s Division of Community and Regional Affairs. A June 2013 delivery by the fuel barge was made and will be enough to meet the community’s needs until spring.

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.
No 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 not actively followed its adopted policies governing payment and collection for city services, with accounts receivable totaling more than $31,000 according to a March 18, 2014 balance sheet. However, RUBA staff has observed that the city has drafted amendments to those policies which would require pre-payment for city services and regular payment toward past-due balances. Until that policy is adopted and fully enforced, the relevant indicator in this section is marked ‘No’. Bills are sent out according to the schedule included in adopted utility ordinances. The utility utilizes QuickBooks 2012, which allows it to track customer balances, past-due amounts, and monies owed to vendors. Past-due utility amounts are identified and reported, but those balances are currently still being reviewed back to 2009 to ensure they are accurate. The city’s has a functioning payroll system and keeps appropriate payroll records, with data correctly calculated and stored in a format that is used to generate necessary payroll reports. A cash receipt system is in place that records incoming money and how it was spent. A receipt book is utilized along with entries into the QuickBooks file. All payments from the city are made by check. Each check identifies an amount, an expense account, and the purpose of a payment. The date for every check written is also recorded in the check register in QuickBooks. A copy of paid invoices is kept in the vendor file and a chart of accounts allows revenue and expense categories to be identified in a reasonable, usable manner; all of the utility's financial transactions are placed in one of the categories included in the chart of accounts. The city has only demonstrated that monthly bank reconciliations for the utility are current through August 2013. The utility has a purchasing system that requires approval prior to purchase from the manager and purchases over the manager's limit requires council approval. However, because there is no adopted budget, it is not possible to ensure compare purchases to budget amounts.

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 utility uses QuickBooks 2012 to calculate, track, and report payroll tax liabilities generally and Pilot Point is not listed in the State of Alaska's most recent Lien Watch publication. The State's Department of Labor and Workforce Development confirmed on March 21, 2014 that the City of Pilot Point is current in its employment security (ESC) tax filings and deposits. The IRS's taxpayer advocacy service confirmed that all federal tax filing and deposits are current as well.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
No 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
RUBA staff verified on March 28, 2014 that the City of Pilot Point has an Alaska Municipal League Joint Insurance Association (AMLJIA) workers’ compensation insurance policy valid until July 2014. The city has drafted a new personnel handbook which outlines hiring processes, probationary periods, evaluations, and other important personnel matters. However, that handbook has yet to be reviewed by AMLJIA or RUBA staff and has not been formally adopted by the city council. Job descriptions are not up to date for all positions and the city has not demonstrated that it follows an employee evaluation process, either for new or existing employees. As mentioned previously in this report, the city has budgeted for staff travel and training. Utility staff are encouraged and continue to seek training opportunities.

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.
No The policy making body enforces utility policy.
N/A 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 utility ordinance identifies the City of Pilot Point as the owner and operator of the relevant sanitation services in the community. Meeting minutes confirm that the city council considers utility issues routinely. However, the lack of enforcement of the city’s utility bill collections policy, and the significant amount of accounts receivable which have resulted, indicate that the governing body is not adequately administering utility policy. A new city manager began serving on December 1 and brings significant experience in local government administration, accounting, and rural utility management. The city clerk/treasurer, who serves as the city’s bookkeeper, has received formal QuickBooks training through the RUBA Program, has attended the RUBA Clerks Management of Rural Utilities and Planning Management for Rural Utilities trainings, and has held her position for three years. With the city only providing a wastewater tank pumping service, and with drinking water supplied by private wells, there are no certified operators. The city has an organizational chart that is updated as needed; a copy of the organizational chart is on file with RUBA staff. Council meetings are held once a month and special meetings are held as needed. All required meetings for the current quarter have been held as scheduled and supporting documents received by RUBA staff show that they are fully noticed in accordance with Alaska’s Open Meetings Act.

Operation of Utility

Essential Indicators
Answer Question
N/A The utility operator(s) are actively working towards necessary certification.
No The utility has a preventative maintenance plan developed for the existing sanitation facilities.
Sustainable Indicators
Answer Question
N/A 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.
N/A The utility has completed and distributed its "Consumer Confidence Report".
N/A 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
Pilot Point does not currently have a sanitation system necessitating a certified operator or the distribution of Consumer Confidence Reports (CCRs), and without a water or wastewater utility, the community would not be placed on the Significant Non-Complier (SNC); relevant indicators in this section are therefore marked ‘N/A’. The city does operate a wastewater lagoon and wastewater pumping service. Watewater tank pumping occurs approximately once every three years for most residents, and therefore no monthly Operation and Maintenance reports are necessary. The maintenance plan is not written but it is part of the staff mechanic's job to keep city equipment in working order. Whenever sanitation services are requested and provided, a verbal report is given to the city manager. There is a safety manual and the operator actively participates in AMLJIA safety meetings. The utility does not have an inventory control list or a critical spare parts list for its wastewater tank pumper.