Quarterly Report: 2012, July - September (Q1), 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:
10/26/2011 
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:
RUBA staff travelled to Hydaburg twice this quarter, once on July 19 and again on September 29. During the first trip, RUBA staff provided training to the city's interim city/utility clerk on payroll tax filing, elections, council meetings notices, the ordinance and resolution adoption process, financial reports, meeting minutes, and other critical municipal processes. RUBA staff also used this trip to meet with utility operators to conduct a water utility rate study for the city. The study's comprehensive examination of the water department's annual operating expenses, its production levels, usage among classes, and collection rate were used by RUBA staff to compile a formal, written report of four 'break-even' scenarios for the city council to consider in its effort to meet the water utility's $160,000 in annual operating costs. On September 29, RUBA staff again travelled to Hydaburg to review the rate study with the city officials, assist in preparing all remaining municipal elections materials, train the city administrator in the absentee ballot process, and discuss budget and monthly meetings obligations with the city's mayor. RUBA staff also used this visit to help complete Hydaburg's Community Revenue Sharing and National Forrest Receipts applications, which together will result in more than $313,000 in outside funding to the city. Finally, RUBA staff collected and reviewed supporting documentation from the city for the RUBA online report, including proof of workers' compensation insurance coverage, meeting agendas, city administrator's reports, utility work orders, staff time sheets, and supply requisitions. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue to offer on-site training and orientation to new city staff appointed in the coming quarter. RUBA staff will also continue to guide the city through the budget adoption process, its efforts to amend and fully codify its municipal code, and adopt a more sustainable utility rate structure. Once the FY12 budget has received a public hearing and adopted by the city council, RUBA staff will note the progress 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.
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
Yes 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.
Yes A monthly manager's report is prepared.
Yes 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 FY11 budget was adopted by a non-code ordinance on July 20, 2010. The city's FY12 budget, however, has not been yet been adopted by the city council. The proposed FY12 budget is slated for a public hearing and final reading at an October 4, 2011 council meeting and, if adopted, will set forth the city's utility financial plan for the coming fiscal year. Until then, all budget-specific indicators have been marked 'No.' The FY11 and draft FY12 budgets are divided into separate funds with each fund listing proposed 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. Though the budgets compare the proposed budget amounts to the previous year's adopted amounts, neither includes a comparative statement of actual expenditures and revenues for the preceding fiscal year as recommended by RUBA staff and required by Hydaburg Municipal Code. Recent city council meeting minutes show that financial information is being reported on a monthly basis. Monthly financial statements include a balance sheet and a budget versus actual profit and loss. 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). The city council, as the governing body, is fully aware that user fees do not produce sufficient income to cover utility operating expenses or repair and replacement costs. It has been a general practice for the city to subsidize the utility's operating expenses and repair and replacement costs through other sources. The adequacy of the subsidy and the council's willingness to supplement the water, sewer, and garbage funds is evidenced through a $31,000 general fund transfer into the FY11 utility budget and the allocation of $50,000 from the FY11 Community Revenue Sharing payment. FY11 revenues and expenses remained in line with budgeted projections throughout the year, with the council regularly reviewing the budget and making amendments as necessary. The last budget amendment was adopted by the council on July 20, 2010. A review of city council meeting minutes for the last year shows that the mayor, administrator, city clerk, and public works foreman routinely provide both written and verbal reports on operational and financial issues concerning the water, sewer, and garbage utilities.

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 collection rate for the period July 2010 to the end of February 2011 was 127%. The city's contracted auditor reported to RUBA staff this spring that this rate will likely slow as customers resolve large outstanding balances. RUBA staff has not been able to receive collection rate figures from the city for the month of June. QuickBooks Pro is used for the city's accounts receivable, accounts payable, and payroll processes. The account receivables 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 FY11 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 September 8, 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 and a new, temporary city clerk received job training from RUBA staff in July of 2011.

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. However, the city council struggled to establish a quorum in June and has yet to hold a public hearing on its FY12 budget ordinance. The council is scheduled to convene a meeting in October to hold that public hearing and adopt the FY12 budget as required. Until the FY12 budget has been adopted, the indicator related to the city council being active in policy making has been marked 'No.' Usually, the council meets on the first and third Tuesday of each month and holds 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. The council has adopted all the ordinances necessary to own and operate the utility services. 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 are shared between interim city clerks and the city administrator. When the city council meets to appoint a permanent, fully-trained bookkeeper, the relevant essential indicator in this section will be adjusted. 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".
No 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 has the following endorsements from the State of Alaska Department of Environmental Conservation (ADEC): Water Treatment Provisional Expires 12/31/2012 Water Distribution Provisional Expires 12/31/2012 The full-time operator is working towards becoming fully certified by attending Level 2 training in Ketchikan in September 2011 and has already met the necessary continued education unit (CEU) requirements. The assistant operator is scheduled to undertake an 'Introduction to Water Treatment' training course and Level 1 exam in October 2011. While ADEC rescinded Hydaburgs two-year boil water notice in September of last year, the city is back on the EPAs July 2011 significant non-complier list for elevated haloacetic acid disinfectant byproducts. ANTHC will be working with the utility in the coming months to install new equipment at the treatment plant, including improved filter media that will hopefully reduce the byproducts. 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.