Quarterly Report: 2012, April - June (Q4), 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:
7/26/2012 
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:
RUBA staff traveled to Hydaburg on May 25 and met with city staff to review utility management issues and provide training to the city's billing clerk, who assists the primary city clerk. The training included a review of methods for researching topics in Title 29 of state statute and the Hydaburg Municipal Code, writing and codifying ordinances, the differences between types of voter propositions, and preparing for and conducting an election of the utility's governing body. During a management meeting on this visit, city and RUBA staff reviewed utility bill collections efforts, city personnel policies, ordinance codification, Hydaburg's draft FY13 budget, and monthly utility rate charges. RUBA staff verified that utility rate increases proposed by RUBA staff following a rate study in 2011 had been formally adopted by the council and that meaningful collections policies were fully enforced. This quarter, RUBA staff also provided the city with information on payment to elections judges, public hearing quorum requirements, property disposition ordinances, and the roles and responsibilities of city council members. Further, RUBA staff assisted the community in figuring its utility bill collection rate for sanitation project grant funding, verified tax filings and deposits, and helped ensure an FY13 budget ordinance was adopted before the start of the new fiscal year. The city clerk, who serves as Hydaburg's utility clerk, successfully completed the 32-hour RUBA Clerks Management for Rural Utilities training in Juneau April 2-6. 
RUBA Activities for the Coming Qtr:
The city's newly-hired billing clerk intends to participate in the next available introductory QuickBooks training sponsored by the RUBA Program, as well as a structured training in Microsoft Excel. RUBA staff will work to schedule a roundtable training for Prince of Wales Island municipal clerks, including Hydaburg's clerks, this summer. RUBA staff will also assist the community in the coming quarter to include all associated costs within its utility budget, prepare for the city's general municipal election, complete its Consumer Confidence Report (CCR) and begin the process of codifying local ordinances.
Scores:
 
Essential Indicators:
23 of 27
Sustainable Indicators:
20 of 27
Total Score:
43 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. At the time of this report, the city was still operating with the FY12 budget adopted by non-code ordinance on October 4, 2011. While that budget was not adopted until more than three months into the city's operating fiscal year, an FY13 budget was formally adopted on time by the city council on June 27, 2012. Both budgets are 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 FY12 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 outlined 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. In May of 2012, city and RUBA staff used a customer aging summary to determine that 85 percent of utility customers pay their bill on time and in full each month. 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. The 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 June 12, 2012 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 FY12 policy is effective from July 1, 2011 through June 30, 2012 and the FY13 policy is effective from July 1, 2012 through June 30, 2013. Both policies cover 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 city's 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 staff has 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. The newly-hired city clerk received onsite job training from RUBA staff in February, participated an introductory QuickBooks course, and successfully completed the 32-hour RUBA 'Clerks Management for Rural Utilities' training in Juneau April 2-6. The city supports utility staff seeking out and attending any necessary training opportunities, as evidenced by staff registrations at additional QuickBooks courses and a RUBA Planning Management For Rural Utilities training, as well as by appropriating adequate funds for staff travel in training in both the FY12 and FY13 budgets.

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.
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
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 continues to postpone its regularly scheduled monthly meetings. Hydaburg's FY12 budget ordinance wasn't formally adopted until October of 2011, three months into the fiscal year, and didn't realistically consider all the costs associated with providing sanitation services. The citys FY13 budget ordinance was adopted by the council on time, but also does not include all associated utility costs as noted in the Financial Management section of this report. 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 all utility department costs, including the wages of both operators, are included. 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. The day-to-day bookkeeping duties are shared between the city clerk, who has formal QuickBooks training and years of clerical experience, as well as the billing clerk. 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.
No 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 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 is not certified. Hydaburg's water utility is listed on the EPA's April 2012 Significant Non-Compliance (SNC) list for elevated levels of disinfection by-products (DBPs), though the operators continue to work with the Alaska Native Tribal Health Consortium (ANTHC) to improve filter media and system underdrains. Continued testing will demonstrate whether these upgrades will be sufficient to lower the DBP levels. The utility must also include the required information in its Consumer Confidence Report (CCR) to return to compliance. The utility completed and distributed its last 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.