Quarterly Report: 2010, April - June (Q4), Saint Mary's

Community:
Saint Mary's 
Staff:
Fred Broerman  
DCRA Regional Office:
 
Gov't Type:
First Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of St. Mary's 
Population:
549  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/17/2010 
Community Sanitation Overview:
Water is derived from Alstrom Creek reservoir and is treated. The majority of the city (156 homes and facilities) have complete plumbing and are connected to the piped water and sewer system. Waste heat from the power plant supports the circulating water system. A 1.7 million-gallon sewage lagoon provides waste treatment. Approximately 6 residences haul water and use honeybuckets; the city provides hauling services. The community is slated for funding for a water system upgrade which will include replacing water mains, hydrants and service lines during the summer of 2010. 
RUBA Status & Activities This Qtr:
Bethel RUBA staff visited Saint Mary's from May 18-21, 2010. The only first class city of the Yukon Kuskokwim Delta is recovering from an unfortunate frigid January. Three leaks occured in the city's main water lines, causing pipes to freeze in numerous services lines and leaving many homes without water for ten days. The community is slated for funding for a water system upgrade which will include replacing water mains, hydrants, and service lines during the summer of 2010. Despite all the problems associated with the freeze ups, the city's utility operator has done well in restoring normal service to the community. The water treatment plant was clean and well maintained, the lab was neat and orderly, and water sampling was up to date. The format of the city's current FY10 budget does not break out revenues and expenses for each of the city's departments, therefore it was difficult to determine how much subsidy was requried to cover expenditures for the water/wastewater utility. An accounts receivable aging summary for the utility revealed that of 206 accounts listed, 104 were 90 days past due. The city's main checking account has not been reconciling in over a year and monthly financial reports are not completed or provided to the council. An Anchorage based accounting firm was hired in January 2010 to get the city's books ready for the FY09 audit. A temporary clerk has also been hired to help with entering transactions so that bank statments can be reconcield. Bethel staff was asked to present preliminary RUBA findings at a May 21, 2010 special council meeting. Council memebers and the city manager were very appreciative of the on site visit, being informed of the findings, and of the advice and recommendations offered to correct the deficiences identified. 
RUBA Activities for the Coming Qtr:
Bethel RUBA staff will be working with Saint Mary's new city manager to help the city meet the financial and accounting essential indicators.
Scores:
 
Essential Indicators:
19 of 26
Sustainable Indicators:
18 of 27
Total Score:
37 of 53

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No 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.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
The format of the FY10 budget adopted on July 7, 2009 does not break out revenues and expenses for each of the city's departments, therefore it is difficult to determine how much outside revenue might be required to cover operating expenses for their water and sewer utility. Monthly financial reports have not been provided to the city council for over a year. The city's FY08 audit was submitted to DCRA's Juneau office in late March of 2010. On June 1, 2010, Alaska Village Electric Cooperative (AVEC), the electric utility for the community, indicated that Saint Mary's was more than 30 days past due for invoices of the booster pumping station and water service accounts. The city purchases fuel from Crowley, which has a fuel distribution tank farm located on city property. The city orders fuel twice a year, in the spring and in the fall. On April 4, 2010 the city ordered 23,000 gallons of heating oil for delivery during the spring and another 23,000 gallons for delivery in the fall of 2010. On May 18, 2010 the community had 2,400 gallons of heating oil at its disposal. In the past, Saint Mary's has subsidized the utility services with income from the general fund, specifically from gravel haul services and equipment rental income. This has allowed the city to purchase heating oil without bulk fuel loans. Minutes from past city council meetings were requested but not provided, therefore it wasn't possible to ascertain the content of monthly manager's reports.

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
There is a collection policy located in the city's code of ordinances. A copy of the ordinance is in the community file located in the Bethel regional office. The May 2010 accounts receivable aging summary for the utility revealed that of 206 accounts listed, 57 were 90 days past due for more than $200; 29 were 90 days past due for more than $500 and 18 accounts were 90 days past due for over $1000. A copy of a customer billing was provided, which is sent out on a monthly basis. Billing statements contain a starting balance, current billing for water, sewer and garbage collection. Past due sections for current amount due, 30 days, 60 days, 90 days and over 90 days past due are also included in the monthly statement. The city uses QuickBooks Pro for their accounting system and for tracking payroll taxes. A cash receipt journal is used for receiving check and cash payments; transactions are entered into QuickBooks. A copy of the chart of accounts was provided and is actively being used. A copy of their procurement policy, Chapter 4.05 was also submitted and is on file. The city's main checking account has not been reconciled for over a year. Copies of purchase orders were provided which reflect a pre-approval requirement for purchases; however without up-to-date monthly financial reports it would be difficult to determine if funds were available to cover the costs of potential purchases. An Anchorage based accounting consulting firm was hired on January 11, 2010 to get the city's books ready for the FY 2009 audit. A temporary clerk has also been hired to help with entering transactions so that bank statements can be reconciled.

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 January 27, 2010 Bethel RUBA office received correspondence from the IRS indicating Saint Mary's was in compliance for federal taxes from January 2007 through January 2010. The Alaska Department of Labor and Workforce Development reported that Saint Mary's had filed all required reports and deposits for the employment security taxes.

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.
No 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 St. Mary's is insured by Alaska Municipal League Joint Insurance Association, Inc (AMLJIA). Proof of the workers compensation insurance coverage was verified from the Department of Labor, Worker's Compensation website. A June 2, 2010 phone call to AMLJIA from RUBA staff confirmed that Saint Mary's is in good standing with coverage through July 1, 2010. A City of St. Mary's Employee Handbook was adopted in 1996 and needs to be reviewed and updated. Job descriptions for the following positions were provided: water and sewer utilities operator and assistant operator for the water and sewer services. A copy of City Ordinance Chapter 2.05 stipulating the powers, duties and responsibilities of the city clerk and city manager is on file. The city manager gives informal employee evaluations but not written evaluations. A written hiring process was not found in the Employee Handbook or the city's code of ordinances. The city's personnel files do not contain letters of acceptance; about half the files do not contain applications; and a few files lacked I-9s. The city's employee handbook briefly mentions a probationary period for evaluating new employees. Informal interviews with employees indicated training opportunities are provided by the city and staff are encouraged to develop and increase their skills.

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.
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.
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
A copy of Saint Mary's Code of Ordinances Chapter 2.13 Division of Freshwater and Wastewater Utilities System is on file. The city council is active in policy making for the utility, however they are not enforcing the collections policy. The council meets monthly at which time they receive status reports from the city manager and the water and wastewater operator about the utility's equipment, infrastructure and services. The May 19, 2010 accounts receivable aging summary indicates that the utility's billing and payment policy are not strictly enforced. Due to the recruiting efforts of the interim city manager, a new city manager has recently been hired and starts to work on June 7, 2010. The interim manager was hired in June of 2009 and will be leaving in June of 2010, but will continue on as a consultant until the new city manager gets settled in. The city clerk/treasurer was hired in November of 2008 and had taken a QuickBooks class prior to her city employment. She recently attended QuickBooks Intermediate and Payroll workshops held in the community. The Anchorage based accounting consultant hired by the city has been training and working very closely with the clerk/treasurer to set up QuickBooks in a format better suited for tracking the city's enterprises. The consultant has over 20 years of experience working with Alaska non-profit organizations. A second full time bookkeeper with QuickBooks experience may be required in order to handle the city's administrative and financial work load. The lead utility worker is well qualified; he has a bachelor's degree in aquatic resources and an associate's degree in fisheries technologies and has worked for the city for sixteen years. He also has the following state certificates: Water Treatment Level 3, Water Distribution Level 2 and a Wastewater Treatment Level 1, all expiring on December 31, 2010. He also holds a Wastewater Collection Level 1 Certificate which expires on December 31, 2011. A recently adopted organization chart for the city government was provided by the interim city manager. The city council holds regular meetings on the first Tuesday of each month and the meetings are open to the public. The meeting agendas are posted prior to council meetings.

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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
The utility worker has many training certificates including Water Distribution Level 4 with an expiration date of December 31, 2010. A sample of the inventory control list and task description for the water and sewer system for 2007 and 2008 was submitted. It was not clear whether or not safety meetings had been held. Saint Mary's is not on the Significant Non-Complier list. Copies of the Consumer Confidence Report and critical spare parts list are on file in the Bethel regional office.