Quarterly Report: 2013, July - September (Q1), Stebbins

Community:
Stebbins 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Stebbins 
Population:
585  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/31/2012 
Community Sanitation Overview:
The City of Stebbins has a Class 1 water treatment system. A water transmission line carries raw water from Clear Lake, a freshwater source about four miles to the east of the community. The water is filtered, chlorinated and stored in a water storage tank. Residents haul water from the watering point located at the washeteria. The Stebbins school and clinic are the only two buildings that have piped running water. The washeteria, school and clinic use septic tanks and drain field systems for treatment and disposal of wastewater. Residents of Stebbins use honeybuckets in their homes. The city collects the honeybucket bins and transports them to the honeybucket dump. The City of Stebbins has been working with the Alaska Native Tribal Health Consortium (ANTHC), the Alaska Village Electric Cooperative (AVEC), Kawerak, Inc. and the Division of Environmental Health and Engineering to create a community development plan addressing possible alternatives to building a piped water and wastewater system in the community. According to the Stebbins Community Development Plan released in April 2010, the city council accepted a four-phased water and wastewater construction plan. The first phase of the construction plan began in the summer of 2012 and the pile foundation for the new water treatment plant and the new 500,000 gallon tank were built.  
RUBA Status & Activities This Qtr:
On August 9, Nome RUBA staff traveled to the City of Stebbins to attend a joint public meeting addressing the consolidated fuel tank project. Due to criminal activity, STG Inc, the construction company contracted to build the fuel tank farm, had to put the project on hold for one week. The community was in jeopardy of not having sufficient storage for heating oil this winter. However, STG Inc returned to Stebbins and the project was completed as planned. The community has adequate fuel storage facilities which would prevent the community, city and its departments, including Stebbins Water Treatment System (SWTS) from experiencing fuel shortages during the winter period. This quarter, the Alaska Native Tribal Health Consortium (ANTHC) contracted STG Inc to begin phase one of the water and wastewater construction plan. STG Inc built both the pile foundation for the new water treatment plant and the new 500,000 gallon water tank. Next summer, the plan is to build the new water treatment plant and install the 500,000 gallon tank.  
RUBA Activities for the Coming Qtr:
This coming quarter Nome RUBA staff plans to travel to the City of Stebbins to work with the city staff and the city council on revising and updating monthly financial reports, revising an ordinance on honeybucket service, and revising and developing a new organizational chart.
Scores:
 
Essential Indicators:
23 of 26
Sustainable Indicators:
20 of 27
Total Score:
43 of 53

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
Yes 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.
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.
No A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Stebbins adopted the FY13 budget on May 23, 2012. A copy of the approved budget was submitted to the Division of Community and Regional Affairs. The Stebbins Water Treatment System FY13 budget is included in the overall city budget. As a whole the city budget is balanced. However, the utility budget is not balanced. The projected revenue is $59,000 and projected expenditures are $105,707, leaving a $46,707 deficit. City staff stated that the city council uses the Norton Sound Economic Development Community Benefit Sharing funds and State of Alaska Community Revenue Sharing payments to subsidize the utility. The city clerk prepares and submits monthly financial reports comparing actual year-to-date revenues and expenditures to the budget to the city council on a regular basis. RUBA staff received copies of the monthly financial reports this quarter. RUBA staff has seen the most recent invoices from the electric utility, and the utility is current paying the electric bills. Stebbins is part of the Norton Sound Economic Development Corporation bulk fuel purchase program. The city council ordered 25,000 gallons of heating fuel for the upcoming year and part of it is used to heat the utility. The FY13 indicates that SWTS budgeted $9,228 for heating fuel. Crowley delivers fuel via barge twice a year, typically in June and early September. According to the August financial report, the year-to-date expenses exceed revenues because revenue from user fees is not enough to cover expenses. However, according to the city administrator, the city council subsidizes the utility when expenses are higher than revenue. According to September council meeting minutes, the water operator provided a written report regarding water production and use as well as updates on operation and maintenance of the water plant. The honey bucket service is suffering major financial losses due to lack of collection enforcement and very low collection rates.

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
The City of Stebbins does not have an ordinance that clearly delineates the collection policy for the water, wastewater and honeybucket services. However, there is a waste disposal ordinance which outlines in general terms the collection policy regarding the honey bucket services which needs to be amended because parts of it are outdated and do not apply. RUBA staff proposed the city council adopt a comprehensive ordinance outlining the policy regarding collections. The city council has reviewed the ordinance but has not yet adopted it. However, the current ordinance indicates that 'bills will be sent to customers by the tenth of the month for the current month and are due by the tenth of the following month.' The same section of the ordinance writes that 'any customer who is three months or more overdue in payment is encouraged to sign an agreement with the city to bring the account up-to-date within six months from the date it became overdue.' The section continues stating that 'any customer who refuses to make such agreement or fails to abide by it is subject to action in Small Claims Court, at the option of the city.' RUBA staff proposed several steps to address the problem of collection for honey bucket hauling services. Although the city council has followed up on some of the RUBA staff recommendations, it did make a decision to forgive all past due accounts to all honey bucket customers as of July 1, 2012. The utility only recently began to bill customers on a regular basis. The utility uses QuickBooks to track customers and report past due accounts and amounts. A QuickBooks Pro 2010 accounts payable is in place. Some errors were detected in calculating payroll taxes, however, the utility calculates and keeps records of the payroll payments. A cash receipt system is in place. According to city staff, the city writes a receipt for any income received and a copy of every receipt is kept in a sequentially numbered permanent receipt book. The QuickBooks chart of accounts is in need of revision.

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
The city and utility staff use QuickBooks to calculate, track and report payroll tax liabilities. As of October 3, 2012, the Internal Revenue Service's Taxpayer Advocacy Office reported that Stebbins and its public utility services are in compliance with federal tax filing requirements. No recorded notice of federal tax lien against the city and its utilities has been located. The Alaska Department of Labor and Workforce Development confirmed that all state tax payments are current as of October 2, 2012.

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
The City of Stebbins has a workers compensation insurance policy with the Alaska Municipal League Joint Insurance Association (AMLJIA) valid through June 30, 2013. This is a comprehensive insurance which covers work-related accidents and occupational diseases as per Alaska Statutes. Proof of coverage is posted in the city office. The city personnel policies apply to all employees of the city. The city office has adequate written job descriptions for all city positions. The utility uses a written personnel evaluation process outlined in the Code of Ordinances. The hiring process is also described. Every city employee has a well-organized personnel file, which contains such documents as employee's original job application, reports on employee's work performance, and disciplinary actions. However, RUBA staff found that not all employees have I-9 forms in their personnel files. The utility provides orientation, job-training, oversight, and performance evaluation. The utility also provides for outside training opportunities. The city administrator has attended a Financial Management for Rural Utilities course and the city clerk attended an Organizational Management for Rural Utilities course, both offered through the RUBA program.

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.
Yes The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
According to Chapter 30, Section 3 of the Stebbins Code of Ordinances all existing and proposed water tanks, piping systems and facilities are owned by the City of Stebbins. The code states that 'the City Council of Stebbins shall oversee operation of this department,' and 'the council shall adopt rules, regulations, times, and days of use of water department facilities.' However, the code of ordinances does not contain the rules and regulations regarding the management and operation of the Stebbins Water Treatment System. The city code was last codified on May 21, 1984. RUBA staff found an ordinance dated March 11, 2000, which briefly discussed on two pages the services provided, fees for services, customer base, billing and collections. This quarter, the city council has been involved in the policy making of the water treatment plant, honey bucket, and washeteria operated by the city. The regular meeting minutes of August and September indicated that the city council discussed issues related to utility services. The city council reviewed the operator's monthly reports and monthly financial statements showing year-to-date financial standing of the public utilities in the city. According to the city administrator, the city council will also review and adopt the proposed waste disposal ordinance provided by RUBA staff. However, the city council has not enforced the collection policies outlined in the code of ordinances. The utility does not have a utility bookkeeper, but the city administrator and city clerk share the accounting and financial record keeping responsibilities regarding all public utility services. The city administrator acts as the general manager of all city departments. The utility has an adequately trained operator.

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
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".
Yes The utility is not on the "Significant Non-Complier" (SNC) list.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
Stebbins Water Treatment System has a primary water treatment operator. The operator's Water Treatment 1 certificate has expired. The operator has made attempts to renew the certificate but has not been able to pass the exam. Stebbins Water Treatment System has a peak day design capacity of 10,000 - 50,000 gallons per day. The water supply source is derived from a surface water supply, Clear Lake, located about four miles from the city limits. The system uses a single unit bag filter as well as granular media to filter the raw water. The system uses hypochlorite to disinfect the water and then stores it in a water storage tank. The utility has a preventive maintenance plan at the city office, but there was no copy of it at the facility. The water operator showed a water usage form which listed the housing units, the school, and the clinic which all use piped water service connections. The school and the clinic have an arctic box. Reports do not appear to be produced on a monthly basis. The operator provides both verbal and written status reports to the city administrator on a routine basis. The water treatment plant has completed and distributed its Consumer Confidence Report (CCR). As of July 2012, the utility is not listed on the most current Significant Non-Complier List. Although the water operator indicated that the city administrator and city council allocate funds when the utility needs critical spare parts, the utility does not maintain an inventory control list or a critical spare parts list.