Quarterly Report: 2012, 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:
598  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/26/2011 
Community Sanitation Overview:
Residents currently haul water and deposit honeybucket waste in bins. During the summer, water is derived from Big Clear Creek and is treated and stored in a 1,000,000-gallon and 500,000-gallon steel water storage tank. There is a central watering point at the washeteria, distributed from the tanks via plastic pipelines. A reservoir is planned in order to alleviate winter water shortages. DEC has approved the landfill for use, although it is not permitted. Refuse is collected by the City from central bins. Electricity is provided by Alaska Village Electric Cooperative. The City of Stebbins has been working with the Alaska Native Tribal Health Consortium (ANTHC), the Alaska Village Electric Cooperative (AVEC), Kawearak, Inc. and the Division of Environmental Health and Engineering to develop a community development plan addressing 'possible solution to supplying year-round piped potable water and wastewater disposal to the community of Stebbins and a recommendation for the funding of those solutions.' According to the Stebbins Community Development Plan released in April 2010, the city council accepted a four-phased water and wastewater construction plan. The project's first phase was to begin in 2011, which would have included starting to build a new water treatment plant, install a new water storage tank (500,000 gallon tank) and build a wastewater lagoon at the estimated cost of $12 million. The project has not begun as scheduled in 2011. In 2012, the project will continue with installing circulating water distribution mains and low pressure wastewater collection mains at the cost of $10 million. The third phase is scheduled to begin in 2013 and it would include building a community lift station, wastewater force main, and connecting residential and commercial water and wastewater services at the approximate cost of $10 million. The last phase will begin in 2014. In this phase a new year-round water intake and access road are planned to be finished, plus a new additional raw water transmission line and in-home plumbing completed. The cost of the fourth phase is $12 million. A September 22, 2011 trip report provided by Alaska Native Tribal Health Consortium indicates that there are several 'obstacles which stand in the way of beginning the Water Treatment Plant (WTP) and Water Storage Tank (WST) project.' The report mentions non-compliance with RUBA Program requirements, lack of a city council approved business plan for the WTP/WST project, and the information that the State of Alaska did not approve the community development plan because 'the estimate user fees of $135 per month exceeded the 5% of household income threshold and the capital cost of $40.6 million was too large.' The report made five recommendations to the city council to act upon.  
RUBA Status & Activities This Qtr:
On August 25, 2011, Nome RUBA staff completed an onsite RUBA assessment of management capacity indicators for the City of Stebbins. The administrator, city clerk, and water and wastewater operator participated in the assessment.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff plans to travel to the City of Stebbins in the first week of December to discuss with the city council the results of the RUBA assessment and seek solutions to bring the utility in compliance with the RUBA requirements, including but not limited to creating year-to-date monthly financial reports, utility manager's report, seeking ways to balance public utilities budgets, etc. Nome RUBA staff will work with the city administrator and the city clerk to find ways to resolve the problem of collection. Nome RUBA staff will assist the city council in adopting a comprehensive utility ordinance. Nome RUBA staff will work with the city council on a short-term and long-term action plan to resolve the outlined issues in the RUBA assessment. Nome RUBA staff will also begin working with city staff and the city council in a complete revision of the Codified Ordinances of Stebbins.
Scores:
 
Essential Indicators:
17 of 26
Sustainable Indicators:
17 of 27
Total Score:
34 of 53

Finances

Essential Indicators
Answer Question
Yes 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.
No A monthly manager's report is prepared.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The Stebbins Water Treatment System FY12 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 revenues of the system are $55,000 and the projected expenditures are $85,574, a $30,057 deficit respectively. While all expenditures are listed in the utility budget, there is no budget line in its budget or the overall city budget showing how the city is going to cover the 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 grant to compensate for the deficit. The rest of the public utility enterprises will also operate with a deficit this fiscal year. For instance, the honeybucket shows a deficit of $24,735, respectively $4,000 in revenues and $28,753 in expenditures. The honeybucket revenue is less than one percent (1%) to expenditures. To its credit, the washeteria deficit is $4,392, a low three percent (3%) shortage. However, the combined deficit indicates that the public utility budgets do not reflect the fiscal reality of operation, maintenance and management of the public utilities. The monthly financial reports are sporadically presented at the regular monthly meetings of the city council. The monthly financial reports do not show the year-to-date revenues and expenditures or the year-to-date balance. Without such information, the city council's and staff's ability to monitor the soundness of the financial situation is hindered. According to the accounts payable, the utilities are current paying all related bills. The utilities have sufficient fuel to operate this fiscal year. Utility staff stated that when the utility is in need of repair or replacing parts, the city council reviews the request and allocates the needed funds. Since the utility does not produce monthly financial reports comparing the year-to-date revenues and expeditures to those budget, it is difficult to assess whether the utility's revenues and expenditures are equal to those budgeted. Nome RUBA staff was not provided with monthly manager's reports.

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
Nome RUBA staff found an ordinance dated March 11, 2000, which briefly discussed on two pages the services provided, fees for services, customer base and billing and collections. However, city staff and utility employees did not seem to know of the local written rules and regulations regarding public utilities. The current ordinance needs to be amended because parts of it are out-of-date and do not apply any longer. Section 4 of the Ordinances (Ordinance 00-03-07-01) writes 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.' In contrast to the Ordinance only eight percent (8%) of honey bucket residential customers' accounts are up to date. According to the August 23, 2011 QuickBooks Customer Balance Summary statement, some customers have not made any payments since 1988. 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 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.
No The utility is current on filing tax reports.
No 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 administrator uses QuickBooks to calculate, track and report payroll tax liabilities. As of September 29, 2011, the Internal Revenue Service's taxpayer Advocacy Office reported that the City of Stebbins and its public utility services owe federal taxes for the period ending June 2011. The city is deemed non-compliant by the Internal Revenue Service at this time. The Alaska Department of Labor and Workforce Development confirmed that all state tax payments are current as of September 30, 2011.

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.
No 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 worker's compensation insurance policy with the Alaska Municipal League Joint Insurance Association (AMLJIA) valid through June 30, 2012. This is a comprehensive insurance which covers work-related accidents and occupational diseases as per the Alaska Statutes. Proof of coverage is posted in the City Office. The city personnel policies revised in 2004 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 Chapter 75, Section 7 of the Stebbins Code of Ordinances. The hiring process is also described in Chapter 75. 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, disciplinary actions, etc. However, Nome 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 outside training opportunities. For example, the city administrator attended a Financial Management for Rural Utilities training in Nome in April 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.
No The policy making body enforces utility policy.
No 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
No 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. According to Chapter 30, Section 2 of the Code, 'the City Council of Stebbins shall oversee operation of this department,' and 'the council shall adopt rules, regulations, times, and days of uses 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. Stebbins' staff was not aware whether there were written policies and procedures on file. The Stebbins City Code was last time codified on May 21, 1984. Nome RUBA staff found an ordinance dated March 11, 2000, which briefly discussed on two pages the services provided, fees for services, customer base and billing and collections. However, city staff and utility employees did not seem to know of the local written rules and regulations regarding public utilities. The city council plays a minor role in the policy making of the water treatment plant, washeteria and some of the septic systems operated by the city. The regular meeting minutes of May and June briefly mentioned the water treatment plant; however, no other reports were presented to the city council, like monthly financial reports indicating year-to-date financial standing of the public utilities in the city. 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
The 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 use hypochlorites to disinfect the water and then store in a water storage tank. The water treatment plant employs a primary water treatment operator. Currently, the operator holds a Water Treatment 1 certificate with an expiration date of 12/31/2011. The operator stated that he will take an exam at the local school before the current certificate expires. 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, and the school, and clinic which all use piped water service connections. The school and the clinic have an arctic box. The reports did not appear to be produced on a monthly basis. The operator provides verbal 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 2011, 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.