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

Community:
Bethel 
Staff:
Eli Jacobson  
DCRA Regional Office:
Bethel regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Bethel 
Population:
6278 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Pending 
Assessment Date:
6/12/2014 
Exp Date:
 
Last Updated:
6/30/2014 
Community Sanitation Overview:
The City of Bethel has water/wastewater lines running to approximately thirty percent of the town. The remaining seventy percent are serviced by water and wastewater utility trucks.  
RUBA Status & Activities This Qtr:
RUBA staff finalized an assessment on June 23 for Bethel. RUBA met with several different city staff and attended two council meeting during the assessment. The city has two remaining essential indicators to gain RUBA compliance. The city also did not pass eight of the sustainable indicators. 
RUBA Activities for the Coming Qtr:
RUBA staff will continue to work with the city on the remaining indicators.
Scores:
 
Essential Indicators:
24 of 26
Sustainable Indicators:
19 of 27
Total Score:
43 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.
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 Bethel uses Caselle computer softwear to create its budget and monthly financial reports. The city has a fiscal year (FY) starting on July 1 and ending on June 30. The FY14 budget was adopted on May 14, 2013. The budget is 112 pages long and does not contain a summary of all expenses and revenues. To get the total of the revenue and expenditures the finance director had to manually add up all department summaries. This is further complicated because the departments use different summary formats. Also, the department expense and revenue summaries are not labeled consistently which forces the reader to make assumptions about what the document means. Additionally, line items in the department are not labeled consistently. The finance director calculated total city revenue at $23,591,240 and expenditures of 23,371,871 leaving a positive balance of $219,369. However, the budget does not directly state this. The water/wastewater utility department records summary revenue of $5,948,373 and expenditures of $6,345,951 causing a deficit of $397,578. Therefore, the utility has to be subsidized. The budget does not show where the subsidy comes from. The budget also contains several columns and appendices such as the FY10 actual, FY11 actual, FY12 actual, FY13 budget, FY13 amended budget, Management Salary Schedule, and the City of Bethel Wage Scale. The inclusion of these documents further complicates understanding of the current year's budget. The monthly financial reports do not have the same budgeted amounts for departments as the city budget. The departments are also divided up differently in the monthly financial report than the budget and therefore cannot be used to accurately compare year-to-date revenues and year-to-date expenditures with annual budgeted amounts. Alaska Village Electric Cooperative (AVEC) bought the Bethel Utility Corporation and became Bethel's only electrical provider at the beginning of May 2014. The city pays its electrical bills to AVEC and is current on all accounts. The city has a budget total of $464,000 for fuel oil for both water treatment facilities and fuel is avaliable locally. The city has a budgeted amount of $135,000 titled fleet replacement for the utility trucks. However, the city does not have a repair and replacement fund established for either of the water treatment facilities. Since the monthly financial reports do not have the same budgeted amounts for departments as the city budget, accurate year to date revenues and expenditures cannot be determined from the report. Written monthly manager reports are given to the council at regular meetings, verbally explained, and recorded in the meeting minutes. The council makes amendments to the budget when deemed necessary.

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 adopted utility policy is found in chapter 13 of the Bethel municipal code. Residential customers are billed in one of four ways. Approximately 30 percent of residential customers are on unmetered piped water/wastewater. These customers are billed a flat rate of $125.08 per month regardless of usage. The remaining 70 percent of residential customers pay per delivery/removal. The amount billed is based on the water tank size and not the actual amount of water delivered and wastewater removed. The utility trucks do not meter the amount delivered. The wastewater removal is based on the water tank size. Also, a five dollar monthly subscription fee is charged for both water and wastewater services for a total of ten additional dollars per month. The solid waste bill of $15 per month is also included on this bill. City employees are charged a flat rate of $115 per month. If the employee is on delivered water they can receive up to three deliveries a week. If the employee is on piped water, the amount is unlimited. Commercial customer’s piped water/wastewater is metered. The rate is set at $26.50 per 1,000 gallons. For comparison, a residential customer on delivered service that has a 1,000 gallon water tank and receives water/wastewater service once a week is charged $344.57 per month for a total of 4,000 gallons. A commercial customer will only pay $230.96 for 4,000 gallons. A residential customer that that is on piped water/waste water receives an unlimited amount for a flat rate of $159.00. City employees pay only $115 for either unlimited piped water/wastewater or up to 10,000 gallons of delivered water. Customer accounts and past due amounts are tracked with Caselle softwear. The city has a complete list of vendors that money is owed to. Payroll is contracted out to the company Caselle. All incoming money is recorded into Caselle and the customer is given a receipt. All out going money amounts and what the money was spent on is also recorded in Caselle. The city has a chart of accounts. Monthly bank reconciliations are completed after statements come out for all utility accounts. Individual department heads approve purchases up to the amount of the department’s budget.

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
On June 16, 2014, the IRS deemed the City of Bethel compliant with federal tax requirements. On June 3, 2014 the state Department of Labor (DOL) was contacted. DOL verified that the City of Bethel is current on their Employment Security Contributions account. The City of Bethel is not on the Lien Watch dated March-April 2014.

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.
No 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
Bethel’s workers compensation insurance is through the Alaska Public Entity Insurance for the period from July 1, 2013 through June 30, 2014. Proof of coverage is posted in the city office. The City of Bethel has adopted a personnel policy which is found in chapter three of the Bethel municipal code. In addition to the municipal code, city employees work under the “Collective Bargaining Agreement Between The City of Bethel and The City of Bethel Employees Association, Local 6055, APEA/AFT July 1, 2011-June 30, 2014.” The city has written job descriptions for all positions. Copies were provided for the city manager, city clerk, finance director, and public works director. Article 7 in the bargaining agreement describes performance evaluations in general terms, but does not tie specific jobs to a specific evaluation. The city does not have a written hiring policy. The city personnel folders include I-9s, job applications, and the equivalent of letters of acceptance for every employee. The city has a 180-day probationary period. On-the-job training and additional training opportunities are provided as necessary. The City of Bethel owns the utility and the city council is the policy making body. The council is active in policy making and is currently going through the process of raising water/wastewater rates. The utility sends out bills on the fifth, and late notices on the twenty-fifth of each month. If the customer has not paid within fifteen days of the late notice, service is stopped. A fee is charged to reactivate service The public works director performs managerial duties for the utility. The finance department has multiple employees that take care of bookkeeping duties. The operators attend training regularly. The utility has adopted the necessary ordinances to give it the authority to operate. The city has an organizational chart that shows the lines of authority. The policy making body meets the second and fourth Tuesday of each month. The city clerk posts meeting notices in the City Hall, Post Office, Swanson’s Grocery, the AC Store and on the city website six days in advance.

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 Bethel owns the utility and the city council is the policy making body. The council is active in policy making and is currently going through the process of raising water/wastewater rates. The utility sends out bills on the fifth, and late notices on the twenty-fifth of each month. If the customer has not paid within fifteen days of the late notice, service is stopped. A fee is charged to reactivate service The public works director performs managerial duties for the utility. The finance department has multiple employees that take care of bookkeeping duties. The operators attend training regularly. The utility has adopted the necessary ordinances to give it the authority to operate. The city has an organizational chart that shows the lines of authority. The policy making body meets the second and fourth Tuesday of each month. The city clerk posts meeting notices in the City Hall, Post Office, Swanson’s Grocery, the AC Store and on the city website six days in advance.

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
There are four operators working at the two treatment plants. The head operator has 16 years’ experience and has the certifications water treatment level 3, water distribution level 2, wastewater collection level 1, and wastewater treatment level 1. This meets or exceeds all of Bethel’s utility system type/class requirements. The head operator coordinates the training and continuing education units for all the operators. The utility has a preventative maintenance plan in ledger form that is routinely gone over and checked off. The head operator reports regularly to the public works director. The director reports this information to the city manager and city council. The director also spot checks the water treatment plants. The utility does not have a safety manual or hold regular safety meetings. The facilities have not suffered any major problems or outages. The utility is operating at the level of service originally purposed and was built to meet a much higher demand to accommodate several years of population growth. A CCR is posted at the water plants. The city is not on the SNC list dated April 2014. The plant keeps a substantial amount of inventory and spare parts in the two plants, but does not have a written inventory control or spare parts list.