Quarterly Report: 2014, April - June (Q4), Stebbins

Community:
Stebbins 
Staff:
Iura Leahu  
DCRA Regional Office:
Nome regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
11/15/2011 
Entity:
City of Stebbins 
Population:
593 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
3/25/2013 
Exp Date:
11/15/2015 
Last Updated:
7/7/2014 
Community Sanitation Overview:
The City of Stebbins owns, operates, and manages the Stebbins Water Treatment System, which is a Class 1 water treatment system. A water transmission line, designed for seasonal use only, carries raw water from Clear Lake, a freshwater source about four miles to the east of the community, to the school's 750,000-gallon water storage tank built in 1990. The water is filtered and chlorinated at the water treatment plant. The treatment facility was built in 1976, and it is reported to be inadequate to support the operation of a complete water system today. Residents haul water from the watering point located on the exterior of the washeteria. The watering point provides treated water. The Stebbins school and clinic are the only two buildings, other than the washeteria, that have piped water service connections and a shared piped wastewater system. The washeteria, school, and clinic utilize wastewater tanks and drain field systems for treatment and disposal of wastewater. Residents of Stebbins use honeybuckets in their homes. When the honeybucket is full the plastic bag is tied shut and transported to a collection bin. The city collects the honey bucket bins and transports them to the honeybucket dump. The city also maintains a solid waste disposal dump. The city council approved construction of a new water treatment plant and a new 500,000-gallon water storage tank. In the summer of 2012, the Alaska Native Tribal Health Consortium (ANTHC) built the pile foundation for the new water treatment plant and the water tank. In 2013, ANTHC built the new water treatment plant and the new water tank. This winter, the project will continue inside the water treatment plant. Management expects to have the new plant operational is the fall of 2014. 
RUBA Status & Activities This Qtr:
This quarter, RUBA staff requested the City of Stebbins and water and wastewater department submit monthly financial reports pertaining to water and wastewater, washeteria, and other services. RUBA staff also requested copies of meeting minutes of the city council. RUBA staff was not provided with written documentation to update the assessment. RUBA staff maintained contact with the city staff and the water operator. RUBA staff assisted the city and its utility with budget and certified financial statement matters and oil spill.  
RUBA Activities for the Coming Qtr:
This coming quarter, RUBA staff will continue to provide assistance to city staff, the council, and the mayor on implementing the RUBA work plan by resolution, and making progress on the codification project.
Scores:
 
Essential Indicators:
17 of 27
Sustainable Indicators:
17 of 27
Total Score:
34 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.
No 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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The City of Stebbins adopted its FY14 budget on May 16, 2013 and a copy was appropriately submitted to the Division of Community and Regional Affairs. The Stebbins Water Treatment System's budget is included in the overall city budget. The budget is realistic and includes all revenues and expenditures for the FY14. However, the budget is not balanced and the city council is using other sources of revenues to subsidize the deficit, which is approximately $54,000. The honeybucket hauling service portion of the budget, as well as other sanitation-related portions, is not balanced. The council has chosen to cover the deficits subsidizing the utility using the annual State of Alaska Community Revenue Sharing payments, Payment in Lieu of Taxes payments, and the Norton Sound Economic Development Corporation Community Benefit Sharing annual payments. The city bookkeeper prepares and submits monthly financial reports comparing actual year-to-date revenues and expenditures to the city council. The reports are also referenced in the meeting minutes. RUBA staff has not received copies of the monthly financial reports this quarter, and therefore cannot assess whether year-to-date revenues or expenses are on track with budgeted amounts. However, the previous quarter’s reports showed that revenues from utility customers were not equal to or above those budgeted, nor were expenses at a level equal to or below those budgeted. According to the city administrator, the city and its related facilities, including the water system, have an adequate fuel supply. The City of Stebbins is part of the Norton Sound Economic Development Corporation bulk fuel purchase program. The city council ordered 25,000 gallons of heating fuel for the upcoming year and part of it is used to heat utility facilities. Stebbins Water Treatment System is receiving revenues from user fees (local school and clinic) and other sources to pay for operating expenses and repair and replacement costs. The city administrator is the supervisor of all employees of the city including the water plant operators. The water operator provides monthly reports on the operation and maintenance of the utility. The city council is active in the budget appropriation process. According to the monthly city council meeting minutes, the city council makes fiscal adjustments when necessary by amending the budget.

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.
No 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
Chapter 33 of the Stebbins Code of Ordinances outlines the collection policy for its water, wastewater, and honeybucket services. The city council adopted a comprehensive ordinance outlining the policy regarding collections in 2013. The newly-adopted sanitation ordinance, which was included into the city’s code of ordinances, indicates that bills will be sent to customers by the 10th 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 three months from the date it became overdue. The section continues by stating that any customer who refuses to make such agreement, or fails to abide by one, is subject to action in small claims court at the option of the city. RUBA staff proposed several steps to address the problem of collection for honey bucket hauling services, included in a RUBA work plan. Although the city council has followed up on some RUBA staff recommendations, it made a decision to forgive all past due accounts to all honeybucket customers as of July 1, 2012 rather than enforce collections. This quarter, the city sent out statements to customers. An account receivable and payable system is in place, as well as cash receipt system that records incoming money and expenses. RUBA staff provided the city staff with the RUBA QuickBooks helpline contact information. 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 identified categories in a usable manner, but 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.
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 and utility staff use QuickBooks to calculate, track, and report payroll tax liabilities. The IRS Taxpayer Advocacy Office reported that the City of Stebbins owes federal taxes and has not filed the last quarterly report in 2013. No recorded notice of federal tax lien against the city or its utilities has been located. The Alaska Department of Labor and Workforce Development confirmed that all state tax payments are current.

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 workers' compensation insurance policy with the Alaska Municipal League Joint Insurance Association (AMLJIA) valid through June 30, 2014. This is a comprehensive policy which covers work-related accidents and occupational diseases as per Alaska Statutes. Proof of coverage is posted in the city office. The city personnel policies 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 the code of ordinances. The hiring process is also described. Every city employee has a well-organized personnel file which contains such documents as the employee's original job application, reports on the employee's work performance, and details of any disciplinary actions taken. The utility provides orientation, job-training, oversight, and performance evaluation. The utility also provides for outside training opportunities. The city administrator has attended the Financial Management for Rural Utilities course, and the city clerk attended an Organizational Management for Rural Utilities course, both offered through the RUBA program.

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.
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.
No 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. The code states that the city council of Stebbins shall oversee operation of this department, and "the council shall adopt rules, regulations, times, and days of use of water department facilities." However, the code of ordinances does not contain rules or regulations regarding the management and operation of the Stebbins water treatment system. The city code was last codified on May 21, 1984. The city council adopted a sanitation ordinance dealing with the honey bucket hauling utility which describes services provided, fees for services, customer base, billing, and collection. The city council has been involved in policy making for the water treatment plant, honey bucket haul, and washeteria operated by the city, as demonstrated by the city council unanimously voting last quarter to begin charging the local clinic and Head Start program for water ($0.07 per gallon) and trash collection. Minutes from the meeting where this decision was made indicate that the city council reviewed the monthly financial reports showing year-to-date financial standing of the public utilities in the city. However, the city council has not enforced the collection policies outlined in the code of ordinances. The city council voted the city clerk be a part-time city and utilities bookkeeper. 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
No 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 primary water treatment operator. The operator's Level 1 Water Treatment certificate has expired. Attempts have been made to renew the certificate but no certificate was issued. The utility manager (city administrator) intends to hire an alternate water operator who will be attending training and taking the test to receive a certificate. The utility has an outdated preventive maintenance plan. The utility intends to update the preventive maintenance plan for the new water plant. The water operator has daily, weekly, monthly, and annual tasks that involve the operation and maintenance of the utility. The utility keeps daily water sample and monthly lab test result records. The water operator also keeps records of the water usage of each customer, including the washeteria. Written reports to the management do not appear to be produced on a monthly basis, but the operator provides both verbal and written status reports to the city administrator on a routine basis. The utility has completed and distributed its Consumer Confidence Report (CCR) and is not listed on the April 2014 Significant Non-Complier (SNC). 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.