Quarterly Report: 2013, April - June (Q4), Hydaburg

Community:
Hydaburg 
Staff:
Lynn Kenealy  
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:
7/24/2013 
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 communities 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 wastewater is treated at a secondary treatment plant with an 800-foot outfall to Sukkwaw Strait. More than 95 percent 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:
Juneau RUBA staff traveled to the City of Hydaburg this quarter to provide assistance around ordinances, codification, water utility ordinances, Community Revenue Sharing, FY11 Audit, elections, sales tax, local options, and the FY14 budget. RUBA staff also attended the city council meeting and provided information to the council regarding RUBA. Additionally this quarter RUBA provided remote assistance around personnel issues, audit and tax issues, codification, the FY14 budget, and staff changes. 
RUBA Activities for the Coming Qtr:
In the upcoming quarter RUBA staff will visit the City of Hydaburg and provide both on-site and remote assistance with improvements to the FY14 budget, personnel policies and procedures, and other RUBA indicators, as well as other matters as they present.
Scores:
 
Essential Indicators:
22 of 26
Sustainable Indicators:
22 of 27
Total Score:
44 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.
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.
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 Hydaburg adopted their FY14 budget by non-code ordinance on June 18, 2012. The budget is 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 wastewater upgrade fund, a water-wastewater-garbage fund, and a harbor and docks fund. While each fund's budget compares proposed income and expenses 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. Additionally, the adopted budget does not include proposed transfers from other fund sources for any of the account funds, thus making it hard to follow how the individual departments will be funded. The FY14 Water, Sewer, and Garbage fund budget anticipates $121,540 in income from monthly user fees, although only $105,305 was received in FY13. Anticipated expenses total $284,848, while the utility expended $314,697 in FY13. There is no reason to expect expenditures to be so much higher and revenues to be so much lower in FY14 than FY13. Additionally, the budget does not show any money from other fund balances being transferred in to cover the anticipated net loss. Collection rates of the utilities have increased over the past year and the council increased their rates in November 2012 based on the rate study conducted by RUBA staff. The rates increased from $40 to $80 each month. This increase will help, but likely will not fill the gap discussed above. The utility fund budget does 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. However, the city also employs a second, part-time operator whose salary and benefits are not budgeted in the utility fund. It is not clear whether this salary is accounted for in other departments such as Public Works or Sewer and Garbage. Monthly financial reports are not being provided to the council members in the meeting packet. Year-to-date figures cannot be accurately compared to what has been budgeted until the budget is amended to project realistic numbers based on previous years' actuals, and projections based on realistic estimates. However, the mayor, city administrator, public works foreman, treasurer, and clerk all routinely provide both written and verbal reports on operational and financial issues concerning the water, wastewater, and garbage utilities. The city is current on paying its electric bills. The city has two 275-gallon fuel tanks for heating fuel which are located at city hall and the water treatment plant. Funds have been allocated in the budget to purchase heating fuel from Petro Marine every one to three months. While the city is adopting budget amendment ordinances properly, with the most recent amendment to the FY13 budget being adopted in June 2013, the budget is still not balanced.

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 treasurer and city clerk have been working to increase the collection rate for the City of Hydaburg. Billing statements are processed and mailed every month. The utility administrative staff has begun reaching out to customers, showing them their willingness to accept partial payments if need be. As a result, they have begun to see an increase in payments over the past year. This might also be a result of the city public works staff shutting off the resident's water service for excessive non-payment. With the rate increase that was just passed in November 2012, the office has experienced some backlash and resentment from the customers. The treasurer and city clerk use QuickBooks software to track all accounts payable and receivables as well as to process payroll. The chart of accounts does not match all of the line items in the budget and should be corrected or revised when the budget is revisited. The payroll is accurately computed and employees are paid correctly. The accounts receivable system is also working correctly. Monthly bank reconciliations are now up to date following the October RUBA visit. In the last three years, 14 different people have held the position of clerk/treasurer for Hydaburg.

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 of Hydaburg uses QuickBooks Pro to calculate and track payroll liabilities and makes electronic payments using the Electronic Federal Tax Payment System (EFTPS). As of October 30, 2012 the system was upgraded to include the enhanced features of the Federal and State tax reports. The Internal Revenue Service's Taxpayer Advocacy Office provided tax clearance for the city on June 11, 2013. The IRS affirms that they have no liens against the city of Hydaburg. The Alaska Department of Labor and Workforce Development granted tax clearance on May 30, 2013.

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
Coverage for workers compensation was confirmed for the period of July 1, 2012 to June 30, 2013. Coverage remains with the Alaska National Insurance Company. There is proof of current coverage posted at the city offices, the water treatment plant and the harbormaster's office. Coverage levels are within statutory guidelines and include work related accidents as well as occupational diseases. The city's personnel policy includes a hiring procedure and a probationary period for new employees. They recently updated all of the position descriptions which now accurately outline the duties that are required for each position. Records relating to employees are kept in a personnel file. The city provides training opportunities when outside sources of training funds are available. The city clerk has attended the QuickBooks RUBA course; and the city administrator has attended Quickbooks, Personnel, and Planning RUBA trainings. The city has shown support for other utility staff who may seek necessary training opportunities, by appropriating adequate funds for staff travel in the FY14 budget. The city administrator was hired in October, 2012; the clerk in summer 2012; and the treasurer in June 2013. The city's administrator began holding weekly staff meetings on Mondays in order to address ongoing issues among staff, and in order to bring staff closer as a unit.

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 Hydaburg owns and operates the community's water and wastewater utilities and the city council is the governing body of the utility. The council meets monthly and reviews consumer rates for the utility services. Based on recommendations from RUBA staff, a rate increase was passed. The council minutes indicate that they are generally engaged in decision-making on behalf of the utility service. The city's FY13 budget ordinance was adopted by the council on time. 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 city administrator oversees the utility and is adequately trained in the administration and management of the utility. 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 is certified by the State of Alaska Department of Environmental Conservation (ADEC) with a Level 1 Water Treatment endorsement expiring December 31, 2015 and a Level 1 Water Distribution endorsement expiring December 31, 2015. He also holds a provisional wastewater collection provisional certificate which expires December 31, 2013 and a wastewater lagoon certificate which also expires December 31, 2013. The part-time operator holds both a Provisional Water Treatment and Provisional Water Distribution certificate. They both expire on December 31, 2013. Hydaburg's water utility is listed on the April 2013 Significant Non-Compliance (SNC) list for elevated levels of disinfectant by-products (DBPs), though the operators continue to work with the Alaska Native Tribal Health Consortium (ANTHC) to improve filter media and system underdrains. The utility completed and distributed its last CCR as required by the Safe Drinking Water Act for the year ending December 31, 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, and works in partnership with other communities on Prince of Wales to maintain a system that enables the communities to borrow and replace critical parts from each others' inventories. The inventory list has become an issue, as the storage facility that is used to store the parts has been leased to another entity and some parts are not currently locatable.