Quarterly Report: 2012, January - March (Q3), 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:
5/1/2012 
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. The Alaska Department of Enviromental Conservation (ADEC) 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), Kawerak, Inc. and the Division of Environmental Health and Engineering to develop a community development plan addressing 'possible solutions 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.  
RUBA Status & Activities This Qtr:
On February 6, Nome RUBA staff traveled to the City of Stebbins at the request of the mayor and city council members. For the last several years, the water and wastewater system has not met all of the RUBA essential and sustainable indicators of management capacities. The city council agreed to sign a RUBA agreement in order to increase their management capacity and take advantage of the assistance provided by the RUBA Program. Nome RUBA staff proposed to implement an action plan with specific tasks and time frames based upon the RUBA's previous written assessment of the council's and utility staff's management practices. The work plan identified the unmet essential and sustainable management indicators upon which the council and utility staff should take actions to remedy the problems in the short term. Nome RUBA staff, the city council and utility staff will revisit the action plan in six months, July 2012, and make the necessary adjustments. The action plan also identified what assistance and training will be provided by Nome RUBA staff. The RUBA action was approved by the city council on February 15. On February 17, RUBA staff provided the city staff with a sample sanitation utility ordinance, which lays out the rules and regulations to provide for safe and healthy honey bucket waste disposal. RUBA staff recommended the city council repeal the current utility ordinance, which is obsolete and does not address the current issues of waste disposal. The sample ordinance is a comprehensive ordinance which will address every aspect of the honey bucket waste disposal, including collections, rate setting etc. On March 14, the city administrator stated that she was going to present it to the city council. During the onsite RUBA field trip, Nome RUBA staff provided assistance and training to the city clerk in the areas of financial and accounting management, specifically budgeting, financial record keeping, financial reporting, sales tax collection and accounting. Nome RUBA staff also provided training in drafting ordinances and resolutions, codification of city's code of ordinances as well as city council meetings, agendas and record keeping of meeting minutes. During the stay, RUBA staff toured the water plant facility, met with the water operator, and developed a plan with the water operator in order to prepare for the certificate examination. RUBA staff met with the water operator on March 27-28 to prepare for the certification examination scheduled April 6.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff plans to travel to the City of Stebbins in the second or third week of May 2012 to begin working with city staff and the city council in a complete revision of the Codified Ordinances of Stebbins.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
20 of 27
Total Score:
46 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 Stebbins Water Treatment System FY12 budget is included in the overall city budget. As a whole the city budget is balanced. However, the water and wastewater budget is not balanced. The projected revenues of the system are $55,000 and the projected expenditures are $85,574, leaving a $30,057 deficit. While all expenditures are listed in the utility budget, there is no budget line 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. According to the FY12 budget, the rest of the public utility enterprises will also operate with a deficit this fiscal year. For instance, the honeybucket service shows a deficit of $24,735, and the washeteria deficit is $4,392. The combined deficit indicates that the public utility budgets do not reflect the fiscal reality of operation, maintenance, and management of the public utilities. However, throughout this quarter (January - March) the city council and city staff have worked with Nome RUBA staff to address all of the issues discussed above. Based on the new monthly financial statements (the year-to-date revenues and expenditures and the year-to-date balance) implemented at the recommendation of RUBA staff, all sources of revenues and expenditures have been listed. Assuming that the monthly financial statements are accurate, it is evident that the water plant, honey bucket hauling and washeteria do not require the amount of subsidies mentioned during the meetings between the city council, city staff and RUBA staff. Since the monthly financial statements included the revenues and expenditures beginning July 1st, 2011, the city staff will have an accurate account of the financial standing of the three enterprise funds. The city staff will be able to develop a realistic and balanced FY13 budget during the three months (April - June) of the budget appropriation period. According to the city administrator, monthly financial statements were presented at the regular monthly meetings of the city council in February and March. The monthly financial reports show the year-to-date revenues and expenditures and the remaining year-to-date balance. According to the accounts payable, the utilities are current in 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. Nome RUBA staff was not provided with monthly manager's reports.

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 current waste disposal 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.' This quarter Nome RUBA staff provided the city staff and city council with a comprehensive utility sanitation ordinance addressing the waste disposal service (honey bucket hauling service). The city council is in the process of reviewing and adopting the new ordinance. Nome RUBA staff proposed several steps to address the problem of collection for honey bucket hauling services. The city staff and utility staff have followed the RUBA staff recommendation. According to the monthly financial statments the collection has improved significantly. For instance, in contrast to the past collection rate of approximately 8%, in the month of December the city staff collected 59% ($1,145 of $1,920) of the money and in February the collection rate was 104% ($2,016 0f $1,960). Although the collection rate appears to have improved significantly, it is not clear yet how many customers have actually paid their bills this quarter. It is possible that the amounts above include payments of past delinquent accounts. RUBA staff will need to receive the total number of customers to be able to have a clearer picture of the current collection rate. 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 March 28, 2012, the Internal Revenue Service's Taxpayer Advocacy Office reported that the City of Stebbins and its public utility services are in compliance with federal tax filing and deposit 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 March 28, 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 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.
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
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. 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. This quarter (January - March), the city council has been very involved the policy making of the water treatment plant, washeteria and the water and wastewater system (water plant) operated by the city. The regular meeting minutes of January and February 2012 indicated that the city council discussed in depth the issues related to the utility services. The city council reviewed the operator's monthly reports, 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. 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 uses hypochlorite to disinfect the water and then stores it in a water storage tank. The water treatment plant employs a primary water treatment operator. The operators Water Treatment 1 certificate has expired. In March, the operator attended a boiler operation class in Nome. Nome RUBA staff and the operator met twice to prepare for the certification examination, which the operator plans to take on April 6 at the Stebbins school. 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 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 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.