Quarterly Report: 2014, January - March (Q3), Port Heiden

Community:
Port Heiden 
Staff:
Glen Hamburg  
DCRA Regional Office:
Dillingham regional office 
Gov't Type:
Second Class City 
Borough:
Lake and Peninsula Borough 
Agreement?
Yes 
Agreement Date:
1/30/2012 
Entity:
City of Port Heiden 
Population:
118 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
3/17/2012 
Exp Date:
1/30/2014 
Last Updated:
3/19/2014 
Community Sanitation Overview:
Port Heiden is located on the Alaska Peninsula at the mouth of the Meshik River about 425 miles southwest of Anchorage. Most homes in the community have individual wells and wastewater tank systems. At last count, 31 of the 37 occupied homes were fully plumbed. The school operates its own well and treatment system. The city currently provides wastewater pumping services and collects refuse three times a week. The landfill is located 6.5 miles northeast of the community. Fuel is delivered twice a year by barge and stored in city-owned fuel tanks. The electric plant and distribution lines are owned by the city. 
RUBA Status & Activities This Qtr:
This quarter temporarily-assigned RUBA staff contacted Port Heiden's city administrator/clerk to schedule an updated utility management assessment and then to provide assistance meeting any unmet indicators identified. Because sufficient supporting documentation has not been provided by the city this quarter, the assessment will be an opportunity to clarify the status of the community’s utility management capacity. Until then though, or until appropriate evidence has is submitted, most indicators of this report have been marked ‘No.’ This quarter RUBA staff has also researched the city's state and federal tax compliance and tracked its fuel loan payments. The city bears a default judgment totaling $89,582 for unpaid tax liabilities from more than five years ago and has not kept current with monthly payments this quarter on a 10-month bulk fuel loan. With these outstanding liabilities undermining the sustainability of sanitation services in Port Heiden, RUBA staff has offered assistance clarifying tax and loan requirements and identifying repayment strategies. 
RUBA Activities for the Coming Qtr:
RUBA staff plans to travel to Port Heiden in April 2014 to conduct an updated utility management assessment and assist in correcting unmet indicators. Further, RUBA staff will offer assistance developing an FY15 budget that allows for repayment of outstanding tax and fuel loan liabilities.
Scores:
 
Essential Indicators:
6 of 26
Sustainable Indicators:
9 of 22
Total Score:
15 of 48

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No Monthly financial reports are prepared and submitted to the policy making board.
No The utility is current in paying all water/wastewater electric bills.
No The utility has on hand a year's adequate fuel supply or it has a financial plan to purchase an adequate supply.
No 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.
No YTD revenues are at a level equal to or above those budgeted.
No YTD expenditures are at a level equal to or below those budgeted.
No A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Port Heiden follows the State of Alaska fiscal year running from July 1 to June 30. Its FY14 budget was adopted two months late by non-code ordinance on August 30, 2013. However, copies of the budget ordinance available to RUBA staff cannot be read clearly. Further, the city has not provided RUBA staff with copies of monthly financial reports provided to the city council and therefore it cannot be determined whether finances are in line with budget amounts. The bookkeeper reports to provide the city council with monthly financial reports, but the reports do not compare actual YTD revenues and expenses with the budget. Until a readable copy of the budget is provided and reviewed, and until the city submits evidence that monthly financial reports comparing actual and budget amounts are given to the council monthly, relevant indicators in this section have been marked ‘No.’ Heating fuel and gasoline for the city is ordered twice a year and is delivered by barge in the spring and fall. The city has obtained loans from the State to pay for its fuel purchases, but is behind in its payments. The utility does not have a line item for repair and replacement costs in its budget. Meeting minutes demonstrating that a monthly manager’s report is still being made to the city council have not been provided.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No The utility bills customers on a regular basis.
No An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
No 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
RUBA staff does not have up-to-date information on the billing and collections polices related to the city’s sanitation services; relevant indicators in this section have therefore been marked ‘No’. RUBA staff is aware, however, that the city employs an AMPY pre-pay electric metering system, which is also set up to collect certain past due balances. The bookkeeper uses QuickBooks 2012 for financial recordkeeping. Customer invoices are entered into the accounts receivable function of the program and sales receipts are entered as services are rendered. A copy of every receipt is kept in sequentially-numbered permanent receipt books. The utility's chart of accounts identifies all asset accounts (un-deposited funds, bank accounts, and accounts receivables), all liability accounts, and fund balances. Income and expense accounts are identified in a manner that matches the income and expense line items in the budget. All purchases are approved by the mayor and council. The utility has not provided evidence that payroll and monthly bank reconciliations are current. It is not clear whether the delinquent fuel loan payments mentioned elsewhere in this report are due to an ineffective accounts payable system. Until that is determined, the relevant indicator has been marked ‘No’.

Tax Problems

Essential Indicators
Answer Question
Yes The utility has a system to accurately calculate, track, and report payroll tax liabilities.
No The utility is current on filing tax reports.
No The utility is current on making tax deposits.
No 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 to manage its tax liabilities and payments. The State's Department of Labor and Workforce Development confirmed on March 21, 2014 that the City of Port Heiden is current in its employment security (ESC) tax filings and deposits. However, RUBA staff has not been able to receive verification from the IRS’s taxpayer advocacy office that the city is current in its federal tax filings and deposits. RUBA staff has also not been able to determine whether the city has a plan to settle a default judgment from 2007 totaling nearly $90,000. Relevant indicators in this section have been marked ‘No’ until verification on these matters is received.

Personnel System

Essential Indicators
Answer Question
No 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.
No The utility has an adequate written hiring process.
No 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.
No The utility provides training opportunities to staff as needed and available.
Personnel System Comments
RUBA staff confirmed on March, 2014 that the City of Port Heiden has a valid workers’ compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA); however, RUBA staff has not been able to verify that proof of coverage is posted as required by state law. A copy of the city’s adopted personnel policies is on file with RUBA staff. These policies include an employee evaluation process conducted by the council on an annual basis. While the policies also describe a hiring process, a different policy is actual followed. Job notices are posted with the job title and description and interested applicants apply at the city office. Personnel folders only hold payroll information. There is no specific allocation for staff training included in the city’s FY14 budget.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
No The policy making body is active in policy making of the utility.
No The policy making body enforces utility policy.
No The utility has an adequately trained manager.
No The utility has an adequately trained bookkeeper.
Yes The utility has an adequately trained operator or operators.
No 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
It is known throughout the community that the city provides a service to remove wastewater from holding tanks. However, there are not necessary ordinances in place giving the city explicit authority to provide that service. The administrator/clerk, who serves as both manager and bookkeeper, has three years of experience on the job and has attended a QuickBooks training class sponsored by RUBA. Because RUBA staff has not yet had the opportunity to fully evaluate whether utility staff are adequately trained, relevant indicators are marked ‘No’. The utility has adopted an organization chart on file with RUBA staff. RUBA staff has verified that city council meetings comply 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.
No 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.
N/A The utility is operating at the level of service that was proposed.
N/A 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
The community currently does not have a sanitation system that requires a certified operator or the distribution of a consumer confidence report; as described previously in this report, residents rely on private wells and private wastewater tanks. RUBA staff has not been shown a preventative maintenance plan for the wastewater pumper equipment, nor inventory control or critical spare parts lists. There is no evidence of safety meetings being conducted at the City of Port Heiden. There have not been any major problems in the provision of sanitation services in the last three years.