Quarterly Report: 2014, October - December (Q2), Saint George

Community:
Saint George 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
1/6/2012 
Entity:
City of Saint George 
Population:
102 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
9/21/2011 
Exp Date:
 
Last Updated:
12/23/2013 
Community Sanitation Overview:
The City of St. George is located on the northeast shore of St. George Island, about 750 air miles west of Anchorage in the Bering Sea. Four groundwater wells provide drinking water for residents and the harbor, and there is storage capacity for 250,000 gallons. The existing piped water and wastewater system was constructed by National Oceanic and Atmospheric Administration (NOAA) back in the 1950s. Sixty residences are connected to the system and are fully plumbed. The city also provides refuse collection service.  
RUBA Status & Activities This Qtr:
New RUBA staff began working with the community on December 2, 2013. Since then, RUBA staff has contacted the city to request supporting documentation and offer any assistance necessary. RUBA staff did manage to obtain an overall profit and loss statement and balance sheet, as well as a list of year-to-date utility-related expenses, from the city’s contracted accountant; however, no information requested concerning utility income was provided. The city also did not return a request for authorization to obtain federal tax information. RUBA staff was able to verify state employment security tax filings and payments, workers’ compensation insurance coverage, and operator certification. The city appointed a new city clerk, who also serves as the utility clerk, this quarter. RUBA staff communicated with the clerk by phone and email to explain the various forms of assistance the RUBA Program provides, including training in the clerk’s numerous duties.  
RUBA Activities for the Coming Qtr:
RUBA staff will continue to offer assistance to the community and to seek supporting documentation for its utility management assessment. RUBA staff will make a particular effort to provide guidance to the newly-hired city clerk, to offer help in the development of monthly financial reports, and to assist in codification of utility ordinances as a requirement of state law and the Community Revenue Sharing program.
Scores:
 
Essential Indicators:
12 of 26
Sustainable Indicators:
12 of 27
Total Score:
24 of 53

Finances

Essential Indicators
Answer Question
Yes 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.
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.
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 St. George’s fiscal year follows the calendar year. It’s FY13 budget, though adopted late by non-code ordinance on May 30, 2013, is balanced and projects that the city will see a net profit of nearly $9,000 at the end of December 2013. As of November the city was still operating at a $76,000 net loss, which indicates that budget amounts may not have been realistic. Utility income and expenses are included as line items in the overall city budget. The city budgets to receive about $300,000 in commercial and residential utility user fees and budgets appropriately for payroll, contracted services, insurance, travel, repairs and maintenance, water sampling, and fuel. RUBA staff was able to obtain through the city’s contracted accountant a Profit and Loss statement showing that user fees alone for water and wastewater services, as of December 16, were insufficient to meet annual expenses. No budget amendment has been adopted to address discrepancies. The city has not responded to requests for copies of monthly financial reports submitted to the city council at its monthly meetings, nor copies of meeting minutes which could be used to verify that a monthly manager’s report is prepared. The city reports having enough fuel.

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.
No The payroll system correctly calculates payroll and keeps records.
No A cash receipt system is in place that records incoming money and how it was spent.
No The utility has a cash disbursement system that records how money was spent.
Sustainable Indicators
Answer Question
No 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 contracts with Aleut Accounting in Anchorage to maintain most of its bookkeeping processes. Aleut Accounting utilizes QuickBooks. The contractor was able to provide RUBA staff with current copies of an overall city balance sheet and utility Profit and Loss statements. However, that Profit and Loss only lists utility expenses; utility income is reported to be managed separately by the community’s AMPY payment operator who did not respond to requests for supporting documentation. Therefore, RUBA staff cannot determine whether all necessary accounting processes, such as a cash receipt system and reconciliation procedures, are in place. Nonetheless, because the city uses the AMPY payment system which requires residential customers to pre-pay for any utility services, it can be inferred that the utility bills customers on a regular basis. Commercial customers, though, do not use the AMPY system and without supporting documentation from the utility it is not clear whether these customers are routinely billed or whether there are outstanding commercial utility accounts. The community has reported that the collections policy, which is included in a utility ordinance adopted in 2008, is not consistently enforced. Utility rates have not been adequately raised to compensate for increased fuel costs. This issue needs to go before the city council, and devoting a portion of each council meeting to utility issues (structural, financial, and visionary) is an essential practice.

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.
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 city has not returned signed authorization for RUBA staff to verify federal tax filings and deposits. However, the State’s Department of Labor and Workforce Development confirmed on December 17, 2013 that the city is current in making its employment security (ESC) tax filings and deposits. The city is not listed in the September-October 2013 Lien Watch report.

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.
No 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.
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
RUBA staff confirmed on December 23, 2013 that the City of St. George has a valid workers’ compensation insurance policy through the Alaska Municipal League Joint Insurance Association (AMLJIA). There is an adopted personnel policy in place and written job descriptions, but in practice the city does not conduct regular employee evaluations or follow a standard hiring process. As the result of a small labor pool and geographic isolation, many city and utility positions in St. George are held by employees who lack job-specific training or experience. St. George nonetheless encourages and financially supports the training of its employees, as partly evidenced by budget allocations for travel and training and the utility operator having met certification requirements ahead of a 2014 deadline.

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.
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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
A utility ordinance was adopted by the city council in 2008 and establishes the city as the owner and operator of the community’s sanitation utilities. The city council does not meet monthly as required by municipal and state law, meaning that utility issues are not fully considered by its policy-making body. As described in other sections of this report, most bookkeeping functions for the city are conducted by the city’s contracted professional accountant.

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.
No The utility has a safety manual and holds safety meetings.
No Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
No 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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The State’s Department of Environmental Conservation recognizes one operator for the community. This operator is provisionally certified in water distribution until the end of 2014 and has already met renewal requirements. The utility does not have a safety manual nor do they hold safety meetings. A preventative maintenance plan was adopted by the city council in 2009. Saint George is not listed on the October 2013 Significant Non-Complier (SNC) list. The operator has completed inventory and critical spare parts lists.