RUBA Community Status Report

Community Name: Thorne Bay


Community:

Thorne Bay

RUBA:

Yes

Staff:

Lynn Kenealy

Agreement:

No

DCA Region:

Juneau

Agreement Date:

Region:

Southeast

Exp Date:

Govt Type(s):

2nd Class City

Borough:

Unorganized

Assessment Date:

10/8/2013

Population:

496

Active Community:

Yes

Date Updated:

10/28/2013


Community Sanitation Overview:

Thorne Bay is a second class city of 508 people on the eastern coast of Prince of Wales Island, 47 miles from Ketchikan. The community is connected to other communities on the island through a road system which was developed from old logging roads, having evolved from a company-owned logging community to a municipality in 1982. The city now operates a class two water treatment system, class one water distribution system, class one wastewater treatment system, and class one wastewater collection system. Other city utilities and services include landfill and garbage haul; harbor and dock; public safety including VPSO, fire, and EMS; building and land lease including the health clinic, restaurant, and RV park; and a library and community hall. The city is divided into two sections, split by the bay, but both accessible by road: Thorne Bay and South Thorne Bay. The citys landfill is near South Thorne Bay. The main portion of Thorne Bay is hooked up to water and wastewater utilities with 143 active hook-ups in total; while South Thorne Bay, which consists of approximately 40% of the population, utilizes rain catchment systems and a watering hole. The water treatment plant also sells water by self-haul when needed. The treatment system has struggled to meet DEC regulations, due to difficult-to-treat surface water, and may seek financial and engineering assistance in modifying the system to be more easily treatable. Some ideas include a settling tank with sand filters prior to treatment, or a hydro-analysis to identify potable well water, as is being utilized in South Thorne Bay. Additionally, because the distribution lines were originally intended to be temporary, they are in need of upgrades, particularly to connect lines in a more sensible fashion and to get rid of dead ends  both of which would increase the efficiency of the water distribution system.

RUBA Status
and Activities
this Quarter:

RUBA staff completed this assessment October 8-9, 2013.

 

Capacity Indicator: Finances

Essential Indicators:

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:

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.

Comment:

The FY14 budget was adopted by the city council, which is the decision-making body for the water utility, on June 18, 2013. The budget includes a written summary from the city administrator, and delineates each department such as administration and finance, city council, EMS, fire, law enforcement, library, parks and recreation, streets and roads, RV park, water, wastewater, solid waste, and harbors and ports. Water/wastewater budgets are comprehensive and include all necessary revenues and expenses, including the cost of equipment maintenance and repair. The budget is balanced and realistic, based on actual revenues and expenditures from FY13, and anticipated changes in finances for the coming year, as outlined in the city administrators written report. The utility anticipates making more revenue in FY14 than in FY13, but this expectation is thus far realistic, as 25% into the fiscal year, water and wastewater have collected 28% of the budgeted amount. The utility has expended 26% of the budgeted amount, and amendments are needed to increase expenditure limits for chemicals, equipment maintenance and repair, overtime payroll, and workers compensation. The city adopts budget amendments as needed, and will be adopting the necessary budget amendment by December. Each month, the utility manager (the city administrator) provides a written report to the city council regarding water/wastewater and finances. The city clerk/treasurer also provides monthly profit and loss reports for that month. This financial report is not sufficient for the council to ensure revenues and expenditures are in line with budgeted amounts. Therefore, the city needs to begin providing profit and loss budget versus actual reports by fiscal year to date. Residential customers are charged a base rate of $49.50 for wastewater and $48.00 for the first 3,000 gallons of water used; and commercial customers are charged $80 for the first 5,000 gallons used. Every thousand gallons used over these amounts are charged an excess fee of $12.00. FY14 user fees are expected to cover 80% of the cost of water/wastewater operations. The remaining 20% (totaling $58,869.31) is being covered by revenues such as Community Revenue Sharing and PILT. User rates were last raised about three years ago. However, the cost of the water/wastewater system is remaining steady, despite inflation and increasing costs in general, due to increased efficiencies within the water system, such as patching up water leaks. Consideration is being given to increase water/wastewater utility rates to fully cover expenses. The citys budget appropriately covers the cost of all necessary fuel and anticipates increases in fuel prices. Fuel is provided to the community by Petro Marine, who fill fuel tanks throughout the community under a keep-full agreement. The city receives its electricity from Alaska Power and Telephone (APT), and pays this bill regularly each month. Electricity use is allocated on the APT bill per building, and the appropriate department is allocated for each buildings electricity costs  for instance, $1,274.76 to the wastewater department and $616.33 to the water department for August 29, 2013.

 

Capacity Indicator: Accounting Systems

Essential Indicators:

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:

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.

Comment:

The citys utility policy is set out in the Thorne Bay Municipal Code Title 13. The policy explicitly lays out the collection and delinquency policies, which according to city staffs description of the actual process, is being actively followed every month. On the first day of each month, the utilitys accounts clerk sends out a bill for the current month to all water/wastewater customers, with a due-date of the 20th of the same month. If payment is not received by this date, a .875% finance charge begins accruing. If payment is not made by the first of the following month, when the next months bills are sent out, a yellow slip is included with the bill, with a warning that the city will begin disconnection procedures on the 10th of the month if payment is not made. On the 11th of the month, a disconnection notice is sent out, and if payment is not received by the 20th, water service is disconnected. This timeline is just slightly off from the timeline provided in municipal code. None-the-less, the collection policy and practices are successfully achieving an 86% collection rate, as of October 9, 2013. The QuickBooks program is utilized to track accounts receivable and accounts payable, as well as payroll. The QuickBooks file is networked so that both the accounts clerk and the clerk/treasurer can access the file. Both have experience and knowledge with the QuickBooks system, and utilize the Turnagain Press QuickBooks hotline when necessary for additional assistance. The QuickBooks file delineates each department into a chart of accounts, including account types and descriptions. The clerk/treasurer undertakes reconciliation on a monthly basis, and provided evidence of reconciliations through FY13. There is a segregation of accounting duties between the accounts clerk and the clerk/treasurer, with additional supervision by the city administrator and city council. Cash is rarely received, but when it is, a receipt is given, and the money is applied to the till, and counted at the end of the day. When the amount in the till reaches over $100, the excess is delivered to the bank. Cash is distributed using the same process in reverse. When a purchase is needed, the employee requests a purchase order. The accounts clerk compares the requested expenditure with the budget, then creates a check, which is then approved and signed by the city administrator. The accounts clerk then allocates the expenditure to the appropriate account and department, which is later reconciled by the clerk/treasurer after payment. This detailed process follows the general guidelines provided by Thorne Bay Municipal Code Chapter 3.12, pertaining to purchasing.

 

Capacity Indicator: Tax Problems

Essential Indicators:

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.

Comment:

The utility utilizes the QuickBooks program to track tax liabilities, and utilizes the EFTPS program to make payments and file reports. On August 29, 2013, the State of Alaska Department of Labor and Workforce Development confirmed that the city is compliant on all state employment tax requirements. On September 12, 2013, Taxpayer Advocates confirmed that the city is compliant on all federal tax filings and payments. The city has no liens or past liabilities.

 

Capacity Indicator: Personnel System

Essential Indicators:

Yes

The utility has a posted workers compensation insurance policy in effect.

Sustainable Indicators:

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.

Comment:

Thorne Bay receives its worker compensation insurance through AMLJIA, and has paid from July 1, 2013, through June 30, 2014. Coverage was confirmed as of August 30, 2013. Notice of coverage is posted in all buildings where employees regularly work, such as the city office, water treatment plant, and wastewater plant. The city utilizes an employee handbook, which has been reviewed by the municipal attorney. The current handbook was last revised July 2009. In April 2013, the city administrator attended the 32-hour RUBA Personnel Management training, and is currently working updates and revisions to the citys employee handbook. Revisions will be reviewed by AMLJIA and RUBA staff, and will be approved by the city council. Revisions will include updates to wording and language, the updated organizational chart, several clarifications and additions, such as the inclusion of a cell phone policy, and a complete over-haul to the citys drug use policy, which is currently unenforceable. Until these changes are made, the current employee handbook does sufficiently cover several personnel-related items. Some personnel issues are also addressed in the Thorne Bay Municipal Code Chapter 2.24, including 2.24.020 which discusses hiring policies in detail. The city administrator is currently working on updates to all job descriptions. However, the job descriptions currently in place are sufficient to meet this indicator at present. Descriptions, such as that of city clerk/treasurer, include definition, supervisor, position summary, and duties. The city administrator utilizes a separate personnel performance evaluation form for different classes of positions in the city. For instance, a technical personnel evaluation is used for water operators, and an office/clerical personnel evaluation is used for office staff. Evaluations are completed after 6 months, which is the end of the probationary and training period; and annually there-after. Staff are encouraged to attend trainings and achieve appropriate certification levels where needed, and are given training and travel funds to do so through the citys budget. For instance, the city administrator has been sent to RUBA trainings and various conferences, and the city clerk is sent to the AML conference annually. The clerk/treasurer maintains all personnel files, and ensures each file has an I-9, job application, and hire sheet, which includes all appropriate information such as date of hire, pay, and PERS eligibility, among other items.

 

Capacity Indicator: Organizational Management

Essential Indicators:

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:

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.

Comment:

Thorne Bay Municipal Code Title 13 provides for municipal ownership of the water and wastewater utilities. The policy-making body for the utility is the Thorne Bay City Council. Title 13 provides for all policies and procedures related to the utility, and city staff follow the code closely. Changes are regularly made to the code to ensure it is kept current and relevant. Amendments go through the code-ordinance procedure, including introduction, public hearing, and council approval and adoption. The municipal clerk then codifies the municipal code regularly and e-mails the updated code to all council members and staff, with the date of codification included. Alaska statute requires councils to meet for a minimum of one regular meeting per month. Thorne Bay Municipal Code Section 2.04.130(a) provides for two regular meetings per month. City staff provided six months of meeting minutes as evidence of meeting this requirement. City staff also provided notices and agendas as posted in the community. Notices and agendas are posted with reasonable notice in six regular places in the community, far exceeding the minimum requirements of the Open Meetings Act. The utility manager has worked in this position for three years, and has attended conferences frequently, as well as the RUBA personnel training. Bookkeeping is completed by both the accounts clerk and the clerk/treasurer. The clerk/treasurer has worked for the city for almost nine years, and attends conferences and trainings when available, including the RUBA Clerk training. The accounts clerk has worked in the city for six and a half years and has also attended the RUBA clerks training. The primary water operator is certified level 1 water distribution in a level 1 system; level 1 wastewater treatment in a level 1 system; level 2 water treatment in a level 2 system; level 2 wastewater collection in a level 1 system; and has met all current CEU requirements. The back-up water operator is certified level 1 in all categories, and has met all current CEU requirements. The city has a current organizational chart, which clearly indicates a chain of command beginning with the public, then the city council, then mayor, then city administrator. The chart then indicates all departments under the city administrator, including utilities.

 

Capacity Indicator: Operation of Utility

Essential Indicators:

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:

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".

No

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.

Comment:

The primary water operator is certified level 1 water distribution in a level 1 system; level 1 wastewater treatment in a level 1 system; level 2 water treatment in a level 2 system; level 2 wastewater collection in a level 1 system; and has met all current CEU requirements. The back-up water operator is certified level 1 in all categories, and has met all current CEU requirements. The back-up operator is near his level 2 certification on water treatment. There is also a rover employee who assists with water operators when necessary. The utilitys manager is the city administrator. The administrator visits the utility plants regularly and also provides reports to the city council at its regular meetings. Utility staff attend Monday morning meetings twice a month, and a safety topic is discussed at each of these meetings. The utility is operating at the level of service proposed and has not suffered any major problems or outages. A preventative maintenance plan has recently been updated, approved by the state, and adopted. The utility produces 25,000-30,000 gallons of water per day, though it only uses 18,000-20,000. The system is designed to create far more water than is needed in the community, so some of the water produced is dumped. Several leaks throughout the distribution system have been patched over the past few years, and the system is operating more economically as a result of this and other improvements. There are still some inefficiencies the utility would like to improve upon, such as several dead ends, and a distribution system not intended for long-term use. The utility is on the Significant Non-Compliance list, due to the difficulty of treating the water being used. The utility would like to either install a pre-treatment filtration system such as a settling tank and sand filtration, or explore other water source options. The system has completed its 2012 Consumer Confidence Report, as confirmed by the State of Alaska Department of Environmental Conservation. There is not currently a maintained inventory control list or critical spare parts list. The water operator was able to list what critical spare parts are available. The utility also utilizes other water utilities on Prince of Wales Island for assistance with critical spare parts when needed, such as Klawock and Craig.

RUBA Activities for the Coming Quarter:

The full RUBA Assessment of Management Indicators will be scheduled and completed, as per the utility's request, in October 2013.