Quarterly Report: 2012, July - September (Q1), Teller

Community:
Teller 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Teller 
Population:
229  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/26/2011 
Community Sanitation Overview:
The City of Teller does not have a piped water/wastewater utility. During the summer, water is piped in from Coyote Creek, a couple of miles east of the school. The water is treated and stored in a large storage tank. In the winter, treated water is delivered from the large storage tank at the washeteria, or residents use melted ice from area creeks. A few residents use their own ATV's or snowmachines to haul water. The school operates its own sewer system. Within the last few years, the City of Teller has formed a Planning Commission to meet periodically and discuss topics crucial to the wellbeing of the community. The commission has developed the Teller Local Economic Development Plan. The commission has prioritized several projects, with the Water and Sewer System Development at the top of the priority list. In February 2011, CE2 Engineers, Inc. released a draft Sanitation Facilities Master Plan which identified four options for the City of Teller. The first option proposed to keep the current status without making any changes to the system. The second option suggested building a water and wastewater haul system. The third option was to build a fully piped water and sewer service to Coyote Creek subdivision (28 houses), a watering point at the Townsite washeteria and a honey bucket collection system in Townsite (52 houses). The last option proposed construction of a fully piped water and sewer service to Coyote Creek subdivision (28 houses) and Townsite (52 houses). In April of 2011, the city council voted to approve the construction of a fully piped water and sewer service at the New Site and the Townsite. The Village Safe Water Program (VSW) is reviewing the Teller Sanitation Facilities Master Plan prepared by CE2 Engineers, Inc. If federal and state funding will be available, VSW will assist the City of Teller apply for grants in the spring of 2012.  
RUBA Status & Activities This Qtr:
On August 16, 2011, RUBA staff in Nome traveled to the City of Teller to complete the Organizational Management and Operation of Utility sections of the RUBA assessment. The water operator and city/utility clerk assisted RUBA staff in completing the assessment. On September 13, 2011, Nome RUBA staff traveled to the City of Teller to participate in a city council meeting and present to the city council the results of the RUBA assessment. Most of the non-compliant essential indicators on the RUBA assessment relate to the fact that the city does not operate and maintain the current water treatment plant. However, there is currently consensus among the city council, the School District and other related agencies to begin transitioning towards transferring the operation of the treatment plant to the city. The city council has already begun working with the School District in collecting information related to the cost associated with operating the facility and the available revenue. This year's budget does not have funds allocated to operate the facility.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff will continue to work with the city council and city/utility staff to implement strategies that would increase the collection rate for trash/honey-bucket service customers. Nome RUBA staff will work with the city council on a long-term action plan to resolve the outlined issues in the RUBA assessment as per the RUBA agreement. Nome RUBA staff will also begin working with city staff and the city council in a complete revision of the Codified Ordinances of Teller.
Scores:
 
Essential Indicators:
18 of 26
Sustainable Indicators:
21 of 27
Total Score:
39 of 53

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.
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
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.
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
Although the City of Teller is the owner of the water treatment plant, the Bering Straits School District (BSSD) has operated the plant for many years. The city does not allocate funds to the treatment facility and water service is not included in the overall city budget. Throughout the years, BSSD has allocated funds to operate the plant. BSSD pays all the bills, including electric and fuel. The utility does not have a separate budget. It is likely that BSSD has a budget, but no copy of the utility budget was provided to RUBA staff. Nome RUBA staff assessed other public utility services provided by the city. Those services include the washeteria, honeybucket hauling and landfill. The city adopted its FY12 budget by the deadline. The overall city budget is balanced and includes all revenue and expenditures for each department. However, based on financial data from the current budget and budgets of prior years, the washeteria, honeybucket hauling and landfill services have not generated enough revenue to cover all operating expenditures. The city council has voted to subsidize these services deemed essential by both the city residents and the city council. For instance, the honeybucket hauling expenditures for FY12 are $49,943, while the expected revenue is $30,000. The city budget shows that the total washeteria expenditures are $35,901, while the revenue is respectively $25,000. The city uses Payment in Lieu of Taxes (PILT) funds, Community Revenue Sharing Program funds and Norton Sounds Economic Development Corporation Community Benefit Share funds to subsidize these services. According to the regular meeting minutes for the months of February, March and April 2011, the city council has played an important role in the decision making process regarding the financial condition of the city and public utility services. The meeting minutes show that the city council was provided with monthly financial reports accompanied by financial analyses and comments given by the city clerk. The meeting minutes also show that the city council discussed each major financial transaction. The year-to-date revenues are at a level equal to those budgeted and the year-to-date expenditures are equal to those budgeted.

Accounting Systems

Essential Indicators
Answer Question
No 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
This section of the assessment reviews the accounting system of the public utility services provided by the City of Teller. Those services include honey bucket, landfill and washeteria. The city has adopted a collection policy which is outlined in Chapter 37 of the Code of Ordinances. In the collection section of the Code of Ordinances it is stated that the city council 'shall make efforts to settle the outstanding bills through deferred payments and alternate methods of payment.' And 'if customers owing past due bills still fail to settle their accounts, a final notice of payment shall be sent to their address on record by certified mail.' The city council 'shall begin legal proceedings to collect the balances owed,' if payment is not received within thirty days after the mail date of the final notice. The collection rate for FY 11 was approximately 45%. From January 2011 through March 2011, approximately 26% of residential customers paid their bills. The collection rate for the thirteen commercial customers is at 100%. The city council is aware of the low residential customer collection rate, but there is no evidence that the city council has enforced the collection procedures outlined in its local law. In addition to having a low collection rate the user fees are too low as well. The city council has been discussing a possible raise in user fees, according to the regular meeting minutes. The city clerk keeps current accounts receivable and payable, but the accounts receivable needs to be improved. The accounts receivable show a large number of delinquent honeybucket customers. According to city officials, the city council cannot stop providing the service due to greater health risks resulting from not providing the service. The city council is working on a plan to address this issue. The city clerk attended a RUBA-sponsored QuickBooks Pro training in Nome and successfully completed it. All payroll records are up-to-date through August 2011. The city clerk writes a receipt for any income received and a copy of every transaction is kept in receipts books. The data is than entered into Excel spreadsheets and QuickBooks. All asset and liability accounts are included in a chart of accounts. Bank reconciliations are completed at the end of each month.

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
On September 29, 2011, the Internal Revenue Service (IRS) reported that the city is in compliance with federal employment tax filing and deposit requirements. However, on September 29, 2011, IRS reported that the city has to pay off a civil penalty imposed in 2008. As of September 30, 2011, the Alaska Department of Labor reported that the city is in compliance with state employment tax filing and deposit requirements.

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.
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
The City of Teller has general liability and workers' compensation coverage. The workers compensation insurance is purchased through the Alaska Municipal League Joint Insurance Association and valid until July 1, 2012. Adequate funds have been allocated in the city budget for payments over the remainder of the fiscal year. The Notice of Insurance was posted in plain view in the city office. Chapter 57 of the Code of Ordinances addresses city's personnel policies. A broad range of topics are covered in the Chapter 57, including classification, compensation, recruitment, hiring performance evaluations, resignation, suspension, dismissal, disciplinary actions, grievance procedures etc. A copy of the city's personnel policies is on file with RUBA staff. The utility follows its personnel policies in the day-to-day management of city employees. Job descriptions are up-to-date and outline each employee's duties. The hiring and evaluation process is described in the personnel policies. The utility maintains personnel files for all employees but the utility does not have a Form I-9 for each employee. The city clerk reported that the city is in the process of updating all employees' files to include the I-9 form. The city and the utility have a probationary period for new hires that includes orientation, job-training/oversight and evaluation, which is completed after ninety days of an employee on the job. The city and the utility provide training opportunities to staff as funds are available. The regular meeting minutes also indicate that the city has been dealing with employee turnover, especially in the sanitation utility. According to the city clerk, in spite of the continuing employee turnover, the city office has been able to increase employees' longevity on the job. Among the factors that contributed to employment longevity with the city office has been appreciation shown for the performance of services and the addition of fringe benefits, such as monetary incentives. The city budgets for and provides training opportunities to city and utility staff.

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.
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
No 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
Chapter 37 of the City of Teller Code of Ordinances gives the city the necessary authority to operate 'all utilities owned by the City of Teller,' including the water treatment plant. The city owns the water treatment plant, water tank, washeteria, watering point equipment and all water and septic related equipment. However, the water plant has been maintained and operated by the local school for many years. There is no written agreement between the city and the school delineating city's and school's responsibilities regarding the operation and maintenance of the water plant. The city council acts as the policy making body and places sanitation issues in the regular monthly city council meetings. By city ordinance, utilities should have a utilities manager. However, the ordinance indicates that the manager could also be the city council and the manager 'is the chief administrative officer.' In the other part of the utility ordinance, however, it is stated that 'there shall be a manager and a clerk and such other employees of the City of Teller necessary to provide services to the citizens of Teller.' There is no manager. Over the years, the issue of water treatment plant operation and maintenance has been discussed by the city council. The regular meeting minutes of the city council indicated that the city council has discussed taking over the service. Since 2010, the city council has worked with several agencies and private companies on developing a plan to build a new water treatment and distribution facility. The city has been in contact with an engineering firm that tests the water and may be involved in the building of the new water treatment facility. The city operates a washeteria that is attached to the water plant. The washeteria employs two part-time washeteria attendants.

Operation of Utility

Essential Indicators
Answer Question
Yes 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
No 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.
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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The City of Teller has a small water system which treats water by adding one treatment chemical. The utility has one full time water operator who is certified as a water treatment operator in training and water distribution operator provisional. The utility also has a part-time water operator who is not certified. The full time operator's certification expires on 12/31/2011. The operator indicated that he is working on taking an exam before his certificate expires. Utility staff has not been able to produce a preventive maintenance plan, though the operator reported that daily preventive maintenance is performed and the utility has not suffered any major problems or outages. Nome RUBA staff observed that some pipes were leaking inside the facility. The manager does not receive a monthly O and M report from the utility operator and there is no routine check performed by the manager. The utility is not listed on the most recent (July 2011) Environmental Protection Agency Significant Non-Compliance List, but the utility has recently had reporting and sampling issues and may be included on the list. The latest Consumer Confidence Report was produced and mailed to customers this year. The utility does not maintain an inventory control or critical spare parts list. However, the operator orders the parts needed when required and the School District purchases replacement parts.