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

Community:
Saxman 
Staff:
Danielle Lindoff  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Saxman 
Population:
436  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/31/2012 
Community Sanitation Overview:
The City of Saxman is located on the west side of Revillagigedo Island, two miles south of Ketchikan on the South Tongass Highway. Water for the community is derived from a reservoir, then treated and stored in a 128,000-gallon tank. The city operates a Class 2 water treatment system, a Class 1 water distribution system, and a Class 1 wastewater collection system. 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 a treatment plant and the number of connections served by water distribution and wastewater collection systems. All homes in Saxman are fully plumbed. While the majority of wastewater is treated at a public treatment facility with an ocean outfall, a few homes utilize individual septic tanks. Refuse is collected by a private company and disposed of at the Ketchikan landfill and electricity is provided by Ketchikan Public Utilities. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Saxman on September 19, 2012 and met with the city administrator and the city treasurer. In an informal meeting, RUBA staff discussed the budget for FY13 which had been passed by the Council on September 5. RUBA staff also toured the new community center building which is now home to city hall. Saxman staff noted that they are interested in Planning and Elected Official training from RUBA and invited RUBA staff to host a training in their facility. The Saxman treasurer attended the Clerks Management for Rural Utilities training from September 10-14, 2012. 
RUBA Activities for the Coming Qtr:
The City of Saxman continues to meet all of the RUBA assessment's essential indicators and nearly all of its sustainable indicators. In the coming quarter, RUBA staff will continue to monitor the management of Saxman's utilities, provide guidance in the proper codification of Saxman's utility ordinances, and work with city officials to conduct a utility rate study if requested. RUBA staff will also notify the community regarding upcoming training opportunities.
Scores:
 
Essential Indicators:
26 of 26
Sustainable Indicators:
23 of 27
Total Score:
49 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.
Yes YTD revenues are at a level equal to or above those budgeted.
Yes 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 FY13 budget was approved and signed on September 5, 2012. The budget is comprised of three separate, independent budgets for the city's general fund, the water and wastewater systems, and the municipality-owned and operated Saxman Seaport. In each case, projected revenues are equal to proposed expenditures. The water and wastewater budget identifies revenue from water and wastewater service charges separately from other sources of revenue, such as NSF fees, late payment fees, and checking account interest. The utility's 38 associated expenditure categories, which include operator wages, payroll taxes, workers compensation insurance, chemicals, testing, utilities, licensing, travel, and maintenance costs, are separated from all other operations and expenses of the city. Having a separate utility budget allows the city to ensure that revenues generated from user fees are sufficient to cover all utility-related costs. For FY13, the city projects spending $128,904 to provide water and wastewater service to the community. The FY13 budget appropriately includes all associated utility expenses with comparisons to the previous fiscal year's actual figures. The city has nearly 70 customers receiving piped water and wastewater services. Those customers are divided into residential customers who pay a combined, uniform flat rate of $65 each month ($45 for water service and $20 for wastewater service) and commercial customers who pay a flat rate of $375 each month ($225 for water service and $150 for wastewater service). These rates are reviewed annually by the city council and were last adjusted in 2009. To keep the council informed of the utility's financial position, the city's finance officer prepares monthly profit and loss reports that compare actual month-to-date and year-to-date amounts with the revenue and expenditure figures originally budgeted. The reports also clearly indicate the percentage of funds already used in each line item and the dollar amount remaining for the remainder of the fiscal year. A review of the last two months of financial reports shows that year-to-date expenses are slightly above budgeted amounts and that year-to-date revenue is on target with that budgeted. Whenever adjustments to the original budget have been required to allocate additional funding to any item, the city council has adopted budget amendments. Ketchikan Public Utilities provides electrical service to the City of Saxman. RUBA staff reviewed eight service statements and found that the utility is current in paying all of its electric bills.

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
Utility billing statements are sent out to customers on or around the 26th day of each month. The statements include the customer's name and address, the amount due for water and wastewater services, previous statement balances, late fees, net balances, and the due date. Accounts are considered 'past due' if customers do not pay their bill by the 15th day of the month following the statement period. Customers have the option of submitting their payments by mail, in person to the finance clerk during business hours, or by placing it in a secure drop box in the front of city hall at any time of day. Additionally, the utility is set up to receive customer payments by Visa, MasterCard, Discover, and American Express credit cards. The credit card payment surcharge is not passed on to any specific customer, but rather is folded into the overall administrative expenses of the utility. The finance officer reports that the majority of customers pay by cash at city hall. The city has adopted and actively enforces an effective collections policy. In accordance with the ordinances adopted by the city council between 2002 and 2009, past due customers are first mailed a delinquency notice reminding them to make their payment. If payment is still not received by the 25th day of the month, a 10 percent late fee and a $10 'door notices posting fee' is assessed. Past due customers who have not signed a repayment agreement (which can include the voluntary assignment of Permanent Fund Dividends) within 90 days are referred to the Ketchikan Credit Bureau for collections and are disconnected from service. According to the utility's aged trial balance account summary, only two utility customers are in 'disconnected' status and approximately 11 percent of customers are more than 90 days past due. Frey accounting software is used for utility billing, accounts receivable, accounts payable, and payroll. This software encompasses three integrated modules: the Cubic utility billing and control system, the Chips payroll system, and the Bucs general fund accounting system. The finance officer has reported that together, these systems are sufficient for the utility's accounting needs. The software subscription includes 24-hour live technical support, which the city can utilize for operating assistance when needed. Customer payments are first manually entered into a triplicate receipt book that records the customer's name and address, the date, the payment amount, what the payment was for, the form of payment, and who received the payment. Payment information is then recorded in the computerized accounting software. The software can clearly identify which customers are current in their payments and which are 30 days, 60 days, or 90 days past due. The utility's cash disbursement system consists of a detailed and logical chart of accounts with 10-digit account codings, a purchase order process, and a check register. Purchase requisitions are first submitted to the finance officer who verifies funding availability, approves the purchase, allocates the purchase to a specific area, and assigns it the proper account code. The finance clerk then drafts a purchase order which must be signed by either the finance officer or the city administrator. The finance officer reconciles the city's bank accounts on a monthly basis. RUBA staff has received up-to-date copies of the city's general account, water/wastewater account, payroll account, and credit card account reconciliations. The separate credit card account is set up to receive credit card payments received for utility and seaport services. The city then transfers deposits made into this account to the appropriate enterprise fund.

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 Saxman uses Windows-based Frey accounting software to accurately calculate, track, and report its payroll tax liabilities. The Alaska Department of Labor and Workforce Development confirmed on September 13, 2012 that all state tax payments are current. There are no past IRS tax liabilities.

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.
No 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
All city employees are covered by an Alaska Municipal League Joint Insurance Association (AMLJIA) workers compensation insurance policy. The FY13 policy is effective from July 1, 2012 to July 1, 2013. It covers work-related accidents and occupational diseases up to the Alaska statutory limits for each occurrence. Proof of coverage is posted in all areas of employment, including the city hall, the community hall, and the water treatment plant. RUBA staff verified that the city is current in its payments to AMLJIA and that adequate funds have been allocated in the city budget for payments over the remainder of the fiscal year. The city implements a well-established personnel management system with the city administrator and the city council's personnel committee continually reviewing personnel matters. A personnel policy handbook was formally adopted by the city in 2005 and is required to be read by every employee. The handbook covers a broad range of topics, including recruitment, selection, the hiring process, transfers, promotions, under-fillings, demotions, work hours, pay, benefits, leave, holidays, career development, conduct, grievances, and performance reviews. The personnel policy also requires a 90-day probationary period for new hires in which an employee is provided orientation and is closely observed by the supervisor. At the end of the probationary period, copies of a performance report completed by the supervisor are to be given to the employee and filed in the employee's personnel file. The city council amended this provision by ordinance on April 27, 2011, to explicitly exempt elected officials from the probationary period in accordance with recent recommendations by a Public Employees Retirements System (PERS) auditor. Chapter IV, Section 1 of the City of Saxman Personnel Policy requires that formal utility employee performance evaluations be conducted not only at the end of the 90-day probationary period, but annually. The city administrator/clerk does keep the personnel committee apprised of all personnel-related issues, though annual written performance evaluations are not completed. Comprehensive written job descriptions have been adopted by the city for each utility operator and clearly define position titles, certification requirements, supervisors, qualifications, work hours, and duties. These job descriptions are included in the utility staffs' personnel folders, along with I-9s, W-4s, new hire packets, copies of certifications, and disciplinary warning memos. The city continues to budget for and provide training opportunities to utility staff as needed and available. The city administrator/clerk has attended personnel management, business administration, financial planning, and municipal clerk training courses and is active in the Sanitation Deficiency System (SDS) program. The city's finance officer attended the 32-hour RUBA 'Financial Management for Rural Utilities' training in August 2011. Utility operators are consistently provided the opportunity to undertake certification trainings and examinations and remain in contact with Alaska Native Tribal Health Consortium (ANTHC) engineers for on-site training with new equipment.

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 Saxman owns and operates the community's water and wastewater systems. Ordinances giving the city the necessary authority to operate these systems have been adopted, though they have not been properly codified into a cohesive utility chapter of the municipal code in a number of years. The city council is Saxman's policy-making body. The council holds regular meetings as required by Title 29 on the third Wednesday of each month. To comply with the Open Meetings Act, the city consistently posts notice of each meeting at least five days in advance at the city hall, the tribal office, the seaport, the South Tongass Service building, and the Cape Fox Corporation building. Meetings are also advertised in the Ketchikan Daily News and on three public radio stations. Each notice indicates the type of meeting to be held, as well as its location, date, and time. The city council is active in policy-making for the utility, as evidenced in the six months of council meeting minutes reviewed by RUBA staff and the eight years of utility-related ordinances passed by the council. The meeting minutes show that the council is provided with utility manager reports, briefings on ongoing utility upgrade projects, staffing and financial issues, training requests, and concerns of the public. The utility's rate structure and collections policy are reviewed annually and have been adjusted on five occasions since 2002. Provisions within the collections policy are strictly enforced; customers are assessed late fees, referred to collections, and disconnected from service as required. City residents are barred from elected office until all municipal debts have been paid, in accordance with the collections policy. The city administrator/clerk functions as the utility manager. She has worked for the city for approximately four years and is appropriately trained to oversee the day-to-day operations of the utility. She provides written monthly reports to the city council and holds staff meetings with the utility operators each Monday. The city's finance officer oversees the utility's financial and accounting systems. The finance officer has worked for the city for approximately two years and has significant financial experience from the public and private sectors. The State of Alaska's Department of Environmental Conservation, Division of Water has rated Saxman's water treatment system at the Class 2 level based on the plant's various components. The city's water distribution and wastewater collection systems are rated as Class 1; this level being determined by the number of connections served. The city's primary operator holds the following endorsements: Water Treatment, Level 2 - Expires 12/31/2013; Water Distribution, Level 1 - Expires 12/31/2012; Wastewater Collection, Level 1 - Expires 12/31/2013. The secondary operator holds certification in: Water Treatment, Level 1 - Expires 12/31/2013; Water Distribution, Level 1 - Expires 12/31/2013. The city utilizes an organizational chart that clearly indicates levels of authority and the relationship between supervisors and subordinates.

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.
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
As noted in the 'Organizational Management' section, the utility operators are adequately certified at the classification level of the city's water treatment and distribution systems. The primary operator successfully advanced his provisional wastewater collection certificate to a Level 1 endorsement this year. The back-up operator is also actively preparing to take a Level 2 water treatment examination. Both operators continue to meet DEC's CEU requirements and receive on-site training and assistance from Alaska Native Tribal Health Consortium (ANTHC) engineers. The city completed an upgrade of its water treatment facility with the assistance of ANTHC in May 2011. A preventative maintenance plan is included in the operations manual for the new facility's equipment. While the utility does not maintain a formal safety manual or hold standardized safety meetings, resources explaining general safety practices such as lifting and common workplace hazards are available. The utility manager also meets at least weekly with the operators, makes routine spot checks of facilities, and receives verbal reports from utility staff addressing any issues of concern, including safety topics. The utility has annual fire safety inspections and is considering the installation of protection fences around its fuel tanks. Saxman's sanitation facilities have not suffered any major outages due to management issues and continue to operate at the proposed level of service. The utility was also successfully able to submit one quarter of water quality tests without elevated levels of disinfection by-products (DBPs), which allowed the utility to be removed from the Environmental Protection Agency's Significant Non-Compliance (SNC) list. The utility continues to distribute its Consumer Confidence Reports that have included a boil water notice since December 21, 2006. The community's water system uses surface water, which, if inadequately filtered, may contain disease-causing organisms. Because the filtration system that was in place over the last several years did not meet the Surface Water Treatment Rule, the utility issued recommendations in accordance with DEC requirements that customers boil their water for at least two minutes before drinking. That notice listed the date of notice distribution, the state water system identification number, and a description of the potential adverse effects from drinking water that has not been boiled. The utility operators reported to RUBA staff that the last boil water notice was sent out on April 30, 2011. Further notices have not been necessary since the upgraded treatment system was brought online in May. Though the operators have kept some critical spare parts on hand, they have not maintained an inventory control list or a complete critical spare parts list for the old treatment system. The operators did, however, receive a collection of other spare parts with the completion of the new treatment system and the utility operators will work with ANTHC staff to develop necessary parts lists relevant to the new equipment.