Quarterly Report: 2014, April - June (Q4), Adak

Community:
Adak 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Adak 
Population:
283 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
7/9/2012 
Exp Date:
 
Last Updated:
6/27/2014 
Community Sanitation Overview:
The City of Adak lies in the northern half of Adak Island, approximately 1,300 miles southwest of Anchorage in the middle of the Aleutian Island chain. The city owns and operates the community’s sanitation services and its council services as the utility’s policy making body. Drinking water for the community is derived from Lake Bonnie Rose, treated at a small water system, stored in four holding tanks, and then piped to facilities and housing units. All housing units in Adak are fully plumbed. There is a wastewater treatment facility in Adak, but it has not been operating since the US Navy left the island; untreated wastewater is now simply piped to an ocean outfall in Kuluk Bay. The city also collects and deposits solid waste at a landfill. Bulk fuel is provided by the Adak Petroleum, which maintains nine underground tanks with a total capacity of approximately 18 million gallons of marine diesel, gasoline, and jet fuel. Diesel-generated electrical power is provided by TDX Adak Generating. The city is working with engineers and other experts on a project that would begin with disconnecting water service to the numerous unoccupied homes in Adak and include the installation of meters on water lines left operating. The meters will help the city determine how much water is being consumed in the community, which is essential for planning upgrades to, or replacement of, the existing water treatment facility in the future. The city reports that it is working to improve conditions at its solid waste burn dump in order to protect bald eagles; until those conditions are improved, it will be burying the community’s solid waste. 
RUBA Status & Activities This Qtr:
This quarter RUBA staff reviewed with the city manager, who serves as utility manager, healthcare options for utility employees, discussing the possibility of healthcare stipends, Health Insurance Portability and Accountability Act (HIPAA) privacy guidelines, taxable income parameters, and the availability of subsidies through online healthcare exchanges. RUBA staff also clarified for the city’s clerk requirements for the reading of ordinances at public hearings. Further, RUBA staff verified federal and employment security tax payments and continued workers compensation insurance coverage. RUBA staff confirmed with the city manager, as well as with the community’s assigned Village Safe Water (VSW) project engineer, that the city’s operators are now actively working toward their necessary certification; with these efforts the city now meets all essential indicators of its utility management assessment. 
RUBA Activities for the Coming Qtr:
RUBA staff plans to visit Adak July 13-17 to conduct a utility management assessment and assist in compiling inventory control and critical spare parts lists. RUBA staff will also provide any technical assistance necessary to correct any deficient indicators identified in the assessment.
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
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 its FY14 budget by non-code ordinance on June 2, 2013. The utility portion of the budget anticipates $123,510 in revenues and $122,687 in expenses for the year. Transfers from the solid waste, General Funds, and enterprise funds are listed within the budgets as subsidies to the water/wastewater utility. Utility bills from TDX Adak show the city is current with power utility bills. The city receives fuel from the Aleut Enterprise for public facilities on an as needed basis. There is a Water/Wastewater Replacement line item in the Maintenance Reserves in the amount of $5,000. The manager provides financial information to the council at council meetings and budget amendments are done as necessary, as evidenced by budget amendments adopted on June 17 and 26, 2013. The city has already drafted and introduced its FY15 budget ordinance.

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 outlined in Chapter 4.11 of the City of Adak Code of Ordinances. Water, wastewater, and garbage bills are generated and sent to utility customers at the end of each month. The city utilizes QuickBooks 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. The city also has an accounting firm contracted to handle all payroll tax liabilities along with the QuickBooks entries. The account listing generated from QuickBooks shows all income, expenses, liabilities, assets, accounts receivable/payable, and bank accounts. Monthly bank reconciliations are completed using QuickBooks. 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 Taxpayer Advocacy Office confirmed on June 15 that the City of Adak was in compliance with federal employment tax filing and deposit requirements and that there are not recorded notices of federal tax liens against the city. The State of Alaska's Department of Labor and Workforce Development, Employment Security Divisions also confirmed on June 13, 2014 that the city was in compliance with state tax filing and deposits due to that date. The city is not listed in the March-April 2014 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.
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
The City of Adak has a valid workers' compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA) current as of June 10, 2014. Proof of coverage is posted as required. The city's personnel policies have been removed from the municipal code and included in a separate personnel handbook adopted by reference. The city manager has the authority to appoint, supervise, and remove employees with council approval. The manager has all employee folders with I-9s, applications and letters of acceptance filed in a fireproof locked cabinet within the city office. Training opportunities are offered to employees, but the cost of travel to and from the remote community limits those 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.
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 and operates the community's sanitation utilities, which are governed Title 2, Chapter 25 of the Adak Code of Ordinances. The council directs employees to enforce applicable policies and ordinances. The utility manager is the city manager. The city has a public works foreman that oversees the water operator. The public works staff (water operator) updates the city manager almost daily. The city's primary and backup operators' certifications have expired, though they have adequate training. The council meets the first and third Wednesday of each month and posts meeting notices for the public. A review of council meeting minutes shows that the utility’s governing body is actively involved in monitoring utility-related issues.

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
While both the primary and backup operator are not fully certified, they are actively studying for and making necessary arrangements take the appropriate certification exams this fall proctored on-site in Adak. No major incidents have occurred at the utility recently and the utility is not listed on the April 2014 significant non-complier list. The operator updates the city manager almost daily on utility-related issues. The city manager reports to be finalizing a critical spare parts and inventory lists as these are in draft form. The US Navy, which once had a base on the island, left behind an excess amount of parts; however, these are currently not organized and need to be inventoried.