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

Community:
Saint Paul 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of St. Paul 
Population:
479 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
7/18/2011 
Exp Date:
 
Last Updated:
12/23/2013 
Community Sanitation Overview:
The City of St. Paul is located on the south end of St. Paul Island, about 750 air miles southwest of Anchorage in the Bering Sea. Water for the community is derived from seven groundwater wells and is treated. There is capacity to store 850,000 gallons of water in tanks. An ocean outfall line was recently added to carry away seafood processing waste. The city collects refuse, and has started a solid waste reduction and recycling program. A landfill, incinerator, and sludge and oil disposal site have been recently completed. Three other landfills are located on the island. A $3 million power plant has been completed as well. There are three wind turbines located on the island supplementing electrical capacity. 
RUBA Status & Activities This Qtr:
New RUBA staff was assigned to the community on December 2, 2013. RUBA staff this quarter answered questions from city staff regarding the Family Medical Leave Act, provided advice on monthly financial reports for the city council, and communicated the importance of updating the city’s utility management assessment, which was completed back in July 2011. Also this quarter RUBA staff reviewed monthly financial reports and city council meeting minutes, verified workers’ compensation insurance coverage and tax deposits, and confirmed utility operator certification.  
RUBA Activities for the Coming Qtr:
RUBA staff is coordinating with the city to schedule an on-site visit in January or February to update St. Paul's management assessment. RUBA staff will also continue to provide any advice and assistance requested by the community.
Scores:
 
Essential Indicators:
26 of 27
Sustainable Indicators:
22 of 27
Total Score:
48 of 54

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.
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.
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
The City of St. Paul’s fiscal year follows the calendar year, and its FY13 budget was adopted timely by non-code ordinance on December 18, 2012. The budget compares projected income and expenditures to actual amounts for the past several years, which helps to ensure that allocations are realistic. City-run enterprises, including the community’s water and wastewater utilities, are budgeted for separately from other city functions. The city projects to spend roughly $393,000 on expenses related to water and wastewater, such as employee salaries and benefits, insurance, supplies, safety equipment, fuel, facility electricity, materials, training, repair and replacement, and contracted labor. The city plans to meet most of these expenses with a mix of customer user fees and equipment rental profits; however, the utility will see a net loss of about $24,000 necessitating subsidies from the city’s general fund. The subsidies are supported with Community Revenue Sharing funds and local taxes. The city clerk has reported that the council does not always receive proper financial reports at monthly meetings. A review of council meeting minutes shows, however, that a monthly manager's report is given to the council. RUBA staff requested copies of current financial reports, but was only provided figures for the city's general fund not including utility income and expenditures. Therefore it is not possible to identify whether revenues and expenses are on track with budget amounts.

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 charges flat rates for residential water customers; meters are installed for all commercial customers. The city has a collection policy outlined in Chapter 11 of the Saint Paul Code of Ordinances and includes the current water rates, which were adopted back in 2011. Billing takes place the first week of each month in accordance with those policies. A sample utility bill was provided by the city finance department and identifies the water, wastewater, refuse, sales tax, and electric customer charges. The residential water class has 241 customers. The City of Saint Paul uses the Multiple Operations Manager System (MOMS) 2005 for most of their accounting needs, though accounts payable is tracked in Microsoft Excel. The chart of accounts categorizes revenues and expenditures in a complete and understandable manner. Bank reconciliations are done with all checks, deposits, and bank statements on the first week of the month. The utility uses a purchasing system that involves a purchase requisition for any purchases over $500. In this process, a purchase requisition is first generated, then the public works director approves the requisition, and the city manager gives final approval.

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 issued RUBA staff authority to verify its federal tax filings and deposits in early December, though the IRS's taxpayer advocacy office did not return any information about the city's federal tax status by the time this report was written. Previous federal tax inquiries last quarter uncovered no outstanding tax liabilities. The State's Department of Labor and Workforce Development confirmed on December 17, 2013 that the City of St. Paul was current in its employment security (ESC) tax filings and deposits. The city is also 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.
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
RUBA staff confirmed on December 23, 2013 that the City of St. Paul has a valid workers’ compensation insurance policy through Alaska Public Entity Insurance. Personnel policies are found in the city’s code of ordinances and address, hiring, probation periods, responsibilities, authority, and other essential personnel matters. Employee files are kept in a locked cabinet in the city clerk's office and have all necessary employee documentation, including Form I-9s, job applications, and letters of acceptance. The city provides training opportunities as funding allows, which is evidenced by specific allocations in the water and wastewater budget for travel and training.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
Yes 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.
Yes 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 Saint Paul owns and operates the water and wastewater utility and its council meets every third Wednesday of each month. The council last adopted new utility rates in February 2011. The city uses utility ordinances to legitimize and enforce billing, collection, customer shut off, and reconnection policies. A review of council meeting minutes show that the governing body is actively engaged in monitoring the utility and addressing concerns as needed. The city has a trained public works director who has more than three years of experience. The public works director reports to the city manager, who then reports to the council. The city financial director is new, but has more than 10 years of experience in bookkeeping. There are three utility operators recognized by the Department of Environmental Conservation in the community. Neither of the two primary operators are current in any certification for water treatment, water distribution, or wastewater collection. The backup operator, however, holds Class 1 Water Treatment, Water Distribution, and Wastewater Collection certifications, and has more than one year to complete remaining certification renewal requirements. The organizational chart is detailed and has all city employees listed and shows the lines of authority for each position. The Open Meetings Act is followed with proper postings in at least three public places five days prior to the meeting.

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".
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
The information detailed in the Organizational Management section of this report demonstrates that at least one of the operators, the backup operator, has worked toward necessary certification. There are seven wells on island and each well has its own operations and maintenance manual with it in a sealed bag. Monthly reports are given to the city manager from the public works director, and operators have daily checks on the five of seven wells that are in operation. Safety meetings are held on the first Monday of each month. There have been no major outages of the utility due to managerial errors and the utility is not listed on the October 2013 Significant Non-Complier (SNC) list. There is no inventory control list, but numerous parts and materials are kept near wells 1 and 2, including pipes, fire hydrants and fittings. A critical spare parts list is in the process of being generated by the administrative assistant at the public works department.