Quarterly Report: 2012, October - December (Q2), Hydaburg

Community:
Hydaburg 
Staff:
Glen Hamburg  
DCRA Regional Office:
 
Gov't Type:
First Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Hydaburg 
Population:
376  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
1/31/2012 
Community Sanitation Overview:
The City of Hydaburg is located on the southwest coast of Prince of Wales Island, 45 air miles northwest of Ketchikan. It is connected by paved road to several other cities on the island. Water is derived from the Hydaburg River, treated, and piped throughout the community. Funds have been requested to construct a new dam to increase the water supply. Piped gravity sewage is treated at a secondary treatment plant with an 800-foot outfall to Sukkwaw Strait. More than 95% of homes in Hydaburg are plumbed. The city operates a Class 2 water treatment system, a Class 1 water distribution system, and a Class 1 wastewater collection system. These system classifications are determined by the State of Alaska's Department of Environmental Conservation, Division of Water based on the type of components found in the treatment plant and the number of connections served by the water distribution and wastewater collection systems. Alaska Power and Telephone Co., based in Skagway, owns and operates diesel power systems in Hydaburg and Craig, which provide electricity to many Prince of Wales Island communities. 
RUBA Status & Activities This Qtr:
This quarter, RUBA staff assisted Hydaburg city staff in the process to formally adopt an FY12 operating budget at a special city council meeting in October. Since then, RUBA staff has also provided assistance in meeting the requirements for Community Revenue Sharing (CRS) and Payment in Lieu of Taxes (PILT), two outside sources of funding critical to the financial sustainability of Hydaburg's sanitation services. City and RUBA staff held various teleconferences this quarter to review the newly-adopted budget, utility personnel concerns, ordinance codification, and the results of a utility rate study completed by RUBA staff earlier this summer. Further, RUBA staff assisted the city administrator in clarifying the requirements for the proper disposition of municipal property and the process for appointing a permanent city/utility clerk according to state statute and the Hydaburg Municipal Code. RUBA staff also verified the city's compliance with federal and state tax requirements, workers' compensation insurance coverage, and utility operator certification. 
RUBA Activities for the Coming Qtr:
RUBA staff is scheduled to participate in a city council workshop via teleconference on January 6 to discuss the need for a budget amendment, utility rate adjustments, and potential new sources of city revenue. RUBA staff has also been asked to provide onsite training to the newly-hired city clerk/bookkeeper in late January or early February. QuickBooks training opportunities will be made available to city staff as well. Further, RUBA staff will continue to stress the importance of monthly regular city council meetings and will provide assistance codifying ordinances, updating the city's personnel policies, and addressing unmet essential and sustainable indicators in the community's RUBA Assessment.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
22 of 27
Total Score:
44 of 54

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.
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.
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.
Yes 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.
Yes A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
Though Hydaburg's municipal code stipulates that the city's fiscal year follow the calendar year January 1 through December 31, in practice, the city uses a fiscal year running from July 1 to June 30. The FY12 budget was adopted by non-code ordinance on October 4, 2011 after three months of postponed city council meetings. The FY12 budget is divided into separate funds with each fund listing anticipated revenues and expenses. The funds include a general fund, a capital project fund, a harbor deferred maintenance fund, a water sewer upgrade fund, a water-sewer-garbage fund, and a harbor and docks fund. While each fund's budget compares proposed income and expense amounts to the previous year's adopted figures, they do not include comparative statements of actual expenditures and revenues for the preceding fiscal year as recommended by RUBA staff and as required by Hydaburg Municipal Code. The water, sewer, and garbage (WSG) fund budget anticipates $118,000 in income from monthly user fees and $15,000 in inter-fund transfers. Anticipated expenses, however, total $317,650. When the difference is added to a negative beginning fund balance of $163,475 from the previous fiscal year, the city is left projecting the WSG fund to have a net loss of $348,125. The FY12 budget does not detail how these expenses will be balanced with any other revenues. The WSG fund budget does, however, appropriately list most costs associated with sanitation services in Hydaburg. Line items for the primary operator's salary and benefits, repairs and maintenance, travel, water treatment and testing supplies, emergency parts, vehicle gas, electricity, telephone, and various other expenses are all included. Yet the city also employs a second, part-time operator whose salary and benefits are not budgeted for. The city council has held only two formal meetings since the start of the fiscal year, though minutes from those meetings show that financial information is being reported. Monthly financial statements include a balance sheet and a budget versus actual profit and loss. The mayor, city administrator, and public works foreman also routinely provide both written and verbal reports on operational and financial issues concerning the water, sewer, and garbage utilities. Hydaburg's electricity is provided by the Alaska Power and Telephone Company of Skagway. A visual inspection of the most recent electricity billings verifies that the city is current with all electricity accounts for the water and wastewater utilities. The city also has two 275-gallon fuel tanks for heating fuel which are located at city hall and the water treatment plant. The city has allocated adequate funds in the budget to purchase heating fuel from Petro Marine as needed (typically, every one to three months).

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 utility has an adopted collection policy that is contained in Title 13 of the Hydaburg Municipal Code. In February 2010, the city council committed to enforcing collections on utility bills and discontinuing water service to past due customers. This increased effort has produced a stable source of income for the utility. Because the city continues to receive back payments from delinquent utility customers, the ratio of billed income versus collected income remains near 100 percent. QuickBooks Pro is used for the city's accounts receivable, accounts payable, and payroll processes. The accounts receivable system documents customer payments and reports past due accounts with the corresponding monetary amounts. An aging report includes a list of all customers, the total amount each customer owes, and whether a customer is 1-30 days, 30-60 days, 60-90 days, or over 90 days past due. A cash receipt log is used to record incoming cash payments and checks not accompanied with an invoice. In addition to this log, the customer is provided proof of payment with a written receipt. The city uses three different receipt books to separate funds and places account codes on all receipts to ensure incoming cash payments are recorded properly. The city's purchase order system requires the review and signature of either the city administrator or the mayor. To prevent overspending, the approving official compares the purchase request against remaining FY12 appropriations prior to approval. The city administrator reports that all bank accounts have been reconciled.

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 of Hydaburg uses QuickBooks Pro to calculate, track, and report payroll liabilities and makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). The Internal Revenue Service's taxpayer Advocacy Office has confirmed that Hydaburg is current in its federal tax deposits and that the IRS has no liens against the city. The Alaska Department of Labor and Workforce Development confirmed on November 14, 2011 that all state tax payments 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
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
Current coverage for workers' compensation insurance was verified through the Alaska National Insurance Company. The policy is effective from July 1, 2011 through June 30, 2012 and covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage is posted in accordance with state statute at City Hall, the harbormaster office, and the water treatment plant. The personnel policy was last reviewed and updated by the city council in January 2010. That policy includes a written hiring procedure with a six-month probationary period for new employees. All job descriptions are up-to-date and expressly outline each employee's required duties. Records relating to employees are kept in a personnel file. These files are strictly confidential and the city intends to purchase new fire proof locking cabinets for their storage. RUBA has staff reviewed the personnel files on a sample-basis and found them to be well-organized and containing all necessary documents. The city provides training opportunities when outside sources of training funds are available. Two city staff members attended a 32-hour Utility Clerks training in April 2010, a temporary city clerk received job training from RUBA staff in July of 2011, and the city has requested training assistance for new city staff in January or February of 2012.

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.
Yes The policy making body enforces utility policy.
Yes 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.
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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The City of Hydaburg owns and operates the community's water and wastewater utilities and the city council is the utilities' governing body. A review of six months of meeting minutes indicated that the council is generally engaged in decision-making on behalf of the utilities when the body meets. However, the city council did not hold its required monthly meetings for three straight months in the summer of 2011 and only held two meetings this past quarter. Hydaburg's budget ordinance wasn't formally adopted until October, three months into the fiscal year, and doesn't realistically consider all the costs associated with providing sanitation services. The indicator related to the governing body being active in policy making has been marked 'No' until the unbalanced budget is reviewed by the council and significant utility department cost overruns are addressed. At the advice of RUBA staff, the city did recently amend its code of ordinances to require that the council meet the first Tuesday of each month and may still hold special meetings and additional work sessions as necessary. The city complies with Alaska's Open Meetings Act by posting meeting notices at least five days in advance in three public places. All ordinances necessary to own and operate the utility services have been adopted. Title 13 of the Hydaburg Municipal code establishes the policies and procedures for the operation and maintenance of the community water supply system. The manager for the sanitation utilities is the city administrator. He is adequately trained in the administration and management of the utility. Due to staffing limitations the day-to-day bookkeeping duties were shared between interim city clerks and the city administrator since the summer of 2011, though a new, permanent city clerk/bookkeeper will begin working for the city in mid-January 2012. The relevant essential indicator in this section will be adjusted once the clerk has been adequately trained. Hydaburg's water operators travel to and participate in relevant water treatment and distribution trainings as needed and receive continual on-site training from a remote maintenance worker (RMW).

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.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The City of Hydaburg has one full-time operator and one part-time operator. The full-time operator is certified by the State of Alaska Department of Environmental Conservation (ADEC) with a Level 1 Water Treatment endorsement expiring 12/31/2012 and a Level 1 Water Distribution endorsement expiring 12/31/2012. He has already obtained the requisite Continued Education Units (CEUs) and is working towards becoming fully certified by attending Level 2 Water Treatment training. The part-time operator holds provisional Level 1 Water Treatment certification ADEC rescinded Hydaburg's two-year boil water notice in September of last year and the city is no longer listed on the Environmental Protection Agency (EPA)'s Significant Non-Compliance (SNC) list. The utility completed and distributed its Consumer Confidence Report (CCR) as required by the Safe Drinking Water Act on August 8, 2011. The utility has a critical spare parts list but does not maintain an inventory control list. The administrator reports that the utility maintains a sufficient level of supplies and tools, but, due to the community's island location and dependence on air and ferry service, the current level of critical spare parts may be inadequate to prevent a service outage.