Quarterly Report: 2007, July - September (Q1), Saint Michael

Saint Michael 
Josephine Bahnke  
DCRA Regional Office:
Gov't Type:
Second Class City 
Agreement Date:
City of St. Michael 
Assessment Status:
Assessment Date:
Exp Date:
Last Updated:
Community Sanitation Overview:
Currently, water is pumped from Clear Lake, approximately 5 miles north of the community and stored in a 1.2 million gallon water storage tank. The water is then pumped from the 1.2 million gallon tank, filtered, disinfected, and stored in a 400,000-gallon water storage tank for consumption. Wastewater is collected at the vacuum plant and pumped via forcemain to a wastewater treatment area northeast of the community. A new sanitation system was completed during the summer of 2005 to provide piped water and vacuum sewer service, and residential plumbing to the homes in the community. At present, 99% of the homes are served by the new system. A washeteria upgrade was completed in 2004 that completely renovated the washeteria. The water treatment plant is under renovation to meet compliance with the Surface Water Treatment Rule and is expected to be completed in 2007.  
RUBA Status & Activities This Qtr:
Nome RUBA staff traveled to Saint Michael on April 19-20 at the invitation of Mayor Carl Otten. The purpose of the trip was to assist the Bookkeeper with monthly financial reports, finalize FY 06 budget amendments, conduct a RUBA reassessment of essential indicators, and present findings with City Council. At this time, the City of Saint Michael meets all RUBA essential indicators. With the assistance of RUBA staff, the City Council passed a budget amendment ordinance on April 25, 2006. On May 24, 2006, the City Council passed an ordinance to place the question of increasing the sales tax on the regular municipal election ballot on November 7, 2006. RUBA staff also worked with the Bookkeeper on the City's FY05 Certified Financial Statement. The Bookkeeper successfully completed the RUBA sponsored Introduction to Quickbooks class on May 22-26, 2006 in Nome. Operator Norbert Otten was certified in Level one Water Distribution and Water Treatment following training in March, 2006 in Nome. Operator Alex Tom was certified with OIT level Water Treatment. 
RUBA Activities for the Coming Qtr:
Upon the city's request, Nome RUBA staff will travel to Saint Michael next quarter to provide technical assistance or training as requested.
Essential Indicators:
27 of 27
Sustainable Indicators:
15 of 27
Total Score:
42 of 54


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
No 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
At this time, the ANTHC project is paying all water/wastewater electric bills. While total actual monthly cost is unknown, there is concern that the city will not be able to adopt a balanced utility budget in FY 07, when ANTHC transfers ownership of the sanitation system to the city. The ANTHC project has been paying for fuel and electricity costs associated with the vacuum plant, washeteria, and water treatment plant. An effort must be made by ANTHC and the city to communicate what the actual costs are, and how the increases will impact the business plan and overall financial status of the utility.

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 utility has adopted a collection policy and is actively following up with honeybucket haul customers prior to re-connecting to the system. Customers who owed prior to the January freeze-up have been written letters and encouraged to set up a re-payment plan. In June 2005, the city joined the ANTHC/DSO billing program. This has added consistency to their billing and collection process. The city bookkeeper is responsible for accounts payable, receivable and payroll for the city. Alaska Accounting Solutions is doing payroll for the current water/sewer project.The city uses a manual and computerized accounting system. The Bookkeeper utilizes two computers with different versions of QuickBooks software. Information from the 1999 Quickbooks version should be transferred to the 2005 version in upcoming months.

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.
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 bookkeeper uses a manual and computer system to calculate, track and report payroll tax liabilities. In the past year, the city has been timely with filing tax reports and making deposits. Completing these reports and making payments has been a priority task of the new bookkeeper. The current balance owed to IRS is six figures from old taxes from 1997-2000. Working with the Taxpayers Advocate office, the city has submitted an Offer in Compromise to the IRS. In the past, the account was closed and determined to be in 'not currently collectable' status with IRS, and is not active in collections. If the offer is accepted, the city will pay a portion of the actual tax owed and the liens will be removed.

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.
No 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.
No The utility has personnel folders on every employee that contain at least: I-9, Job Application and Letter of Acceptance.
No The utility has a probationary period for new hires that includes orientation, job training/oversight, and evaluations.
No The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The City has insurance coverage through the Alaska Municipal League/Joint Insurance Association and is in good standing.

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 Saint Michael is the policy making body that owns the water and sewer utility and washerteria. The City Council adopted an amended utility ordinance on January 10, 2006. A seperate ordinance providing for the establishment of utility rates and fees was adopted concurrently. The utility has two operators that are adequately trained, however more training will need to be diligently pursued with the upgraded system.

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.
Yes The utility has a safety manual and holds safety meetings.
No Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
No 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.
No The utility has completed and distributed its "Consumer Confidence Report".
No 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 two operators are actively working towards necessary certification. However, a freeze-up occurred in January and, according to the project engineer and RMW, the situation was preventable. Both indicated that lack of action on the part of the operator was the cause. At this time, the preventative maintenance plan consists of operators utilizing daily maintenance checklists for the vacuum plant, washeteria and temporary water treatment plant. According to Brad Rea, the upcoming ANTHC project this summer will create so many changes that a preventative maintenance plan will be completed once construction and modifications are finished. Monthly O and M reports are prepared and submitted to the city council.