Quarterly Report: 2014, January - March (Q3), Saint Paul

Community:
Saint Paul 
Staff:
Glen Hamburg  
DCRA Regional Office:
Anchorage regional office 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Saint Paul 
Population:
453 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
2/7/2014 
Exp Date:
2/7/2016 
Last Updated:
4/17/2014 
Community Sanitation Overview:
The City of Sant Paul is located on the south end of Saint Paul Island, about 750 air miles southwest of Anchorage in the Bering Sea. Water for the community is derived from seven groundwater wells, treated at a Class 1 facility, and piped to customers through a Class 1 water distribution system. The city’s water tanks have a capacity of 850,000 gallons. Wastewater is channeled through a Class 1 wastewater collection system to an ocean outfall. In addition to operating and managing these sanitation services, the city collects refuse and assists in recycling. The majority of the community’s electrical power is diesel-generated; however, there are now three operating wind turbines supplementing the remote community's electrical capacity. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Saint Paul in February to conduct a utility management assessment. The city’s last assessment was completed back in 2011. The new assessment stressed the importance of raising utility revenues to balance operating costs, holding monthly council meetings even during the summer fishing season, and developing and employing a utility maintenance schedule and inventory control list. The February visit also allowed RUBA staff to meet with utility operators about their certification requirements, discuss improvements to monthly financial reports with finance staff, propose a plan to codify the city’s ordinances, present RUBA program information to members of the city council, explain the utility management training series to utility staff, and provide advice on the conduct of a utility rate study. This quarter RUBA staff also provided city staff with a copy of RUBA’s Water Rate Calculator Guidebook, explained dispersal methods of outside funds subsidizing utility operations, advised staff on the process of updating city personnel policies, and clarified the process for certifying elections of the utility’s governing body. 
RUBA Activities for the Coming Qtr:
In the coming quarter RUBA staff will continue to offer assistance codifying the city’s utility-related ordinances, amending personnel policies to meet current needs, and preparing for a utility rate study. RUBA staff will also be sure to invite staff and officials to RUBA-sponsored utility management trainings.
Scores:
 
Essential Indicators:
25 of 27
Sustainable Indicators:
23 of 27
Total Score:
48 of 54

Finances

Essential Indicators
Answer Question
Yes All revenues and expenses for the utility are listed in the utility budget.
No 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
The City of Saint Paul uses a fiscal year following the calendar year, in accordance with its municipal code. The city’s CY14 budget was adopted timely by non-code ordinance on December 5, 2013. The budget ordinance authorizes the city manager to establish line item expenditures within an authorized departmental, fund, or project appropriation, and to transfer from one authorized appropriation to another amount which would not annually exceed 10 percent of that department, fund, or project appropriation. This rule allows the city to make minor adjustments to its funding/spending scheme within departments without always going through the budget ordinance amendment processes. Amending ordinances adjusting these numbers are, however, adopted after the city has completed its audit for that fiscal year. The city’s water and wastewater functions are budgeted apart from the city’s general fund as a separate enterprise. The water/wastewater enterprise portion of the budget compares actual amounts for the last several fiscal years alongside this year’s appropriations. In CY14 the city expects to receive just over $304,000 in water/wastewater revenues from user fees, contracted labor, and certain state grants. However, it expects to spend nearly $450,000 providing those services. So while the city’s adopted budget realistically includes all associated expenses (such as labor, insurance, fuel, chemicals, testing, safety equipment, shipping, telephone, office supplies, operator travel and training, and repair and replacement costs) it is not balanced and will operate at a significant loss this year. The city council, which is the utility’s policy-making body, is well aware of this budget shortfall and resolved at its February 2014 meeting to hire a firm in Anchorage to conduct a utility rate study before it raises customer rates to balance the enterprise budget. Chapter X of the city’s code of ordinances establishes the rates for water and wastewater services. Unmetered residential customers and unmetered small business of five or less employees are charged flat rates of $25 and $40 per month respectively for water service, and the same flat rate for wastewater service. Larger commercial customers are also charged flat rates, but according to tiers determined by the number of toilets on site. Metered customers pay $8.50 per gallon for water, except for the processing facility which is charge $7.00 per gallon. Other customer classes exist for off-seasons, closed buildings, and unauthorized connections. These rates were adopted in February 2011 by Ordinance 11-01. The city council receives a comprehensive budget analysis summary at each of its regular meetings. The report appropriately compares monthly and year-to-date actual income and expenses to year-to-date and annual budgeted amounts, as well as the percentage of the budgeted amount of the line item already used and the dollar figure amount remaining. The document is easy to read and honestly reflects the current finances of the city’s sanitation utility enterprises. The city provides the community’s electrical services, but appropriately accounts and pays for its own electrical use to the separate electrical utility enterprise. Statements and receipts provided to RUBA staff showed the city and its sanitation utility enterprises are current in their electrical service payments. Sufficient funds are allocated in the utility’s enterprise budget to pay for its electricity. The city budgets appropriately for its fuel purchases and deliveries have not been delayed due to managerial problems. The city manager gives detailed written and verbal reports to the city council at each of its regular meetings. These reports highlight issues related to the city’s sanitation utilities; the report given to the council at its February 2014 meeting addressed the need to evaluate current utility rates and identify the location of certain service lines.

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 city’s utility bill collections policies, as with its utility service rates, are outlined in Chapter X of the city’s code of ordinances. The city reports actively enforcing these collections policies as they are written. Utility bills, which are sent out monthly, include the customer’s name, billing date, the due date, the service address, meter readings, itemized charges, reminders of the interest charges and possible disconnection for lack of payment, and other appropriate information. Water and wastewater services are billed together with electric, solid waste, and other city services; customers cannot pay for one of these services on their bill and not others. The city is working to transition customers to AMPY pre-pay metering systems, even for payment of sanitation services. Letters were sent out to customers back in August 2010 explaining that customers’ AMPY accounts will track electric, water, wastewater, solid waste, and even sales tax charges due from the customer. Under the new system, failure to prepay for water and wastewater service will mean that the customer will not be able to draw electricity (it is not possible for only the water/wastewater service itself to be stopped for lack of payment). A percentage of past due utility account balances will also be assigned to the customer’s AMPY account according to a schedule outlined in the city’s system installation agreement form. Some – but not all – customers use the system already. Accounting functions are split among several finance department staff, including a purchasing/receiving clerk, a cashier, an accounts payable clerk, an inventory agent, an accounts receivable/utility billing clerk, and a controller/payroll clerk/grants coordinator. The department is headed by the finance director. These staff are well-trained, as detailed in the ‘Organizational Management’ section of this report, and follow appropriate processes for billing, payroll, receiving cash, and making purchases. The city uses the Multiple Operations Manager System (MOMS) for conducting most of its accounting processes, though Excel is used for certain specific functions. A standard purchase order system is used at the city. The purchase orders must first be reviewed by the relevant department head to determine appropriateness. After initial approval, the purchasing clerk assigns the proposed expense a code as defined by the chart of accounts, and then the finance director checks to make sure there are adequate funds available in the budget for the purchase. Purchases over $5,000 must also receive approval from the city manager.

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’s accounting staff accurately calculate, track, and report payroll tax liabilities. RUBA staff confirmed in January 2014 that the city is current in its federal and state tax filings and deposits. The State's Department of Labor and Workforce Development confirmed on March 21, 2014 that the city is current with its employment security taxes as well. The city is not listed on the most current Lien Watch Report published by the Department of Commerce, Community, and Economic Development (DCCED).

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 has paid for a workers’ compensation insurance policy through Alaska Public Entity Insurance valid until July 1, 2104. In accordance with state statute proof of coverage is posted in three conspicuous places of employment, including at the city offices and utility work sites. The city’s personnel policies are outlined in Chapter XI of its municipal code. The chapter explains the personnel policies apply to all municipal employees, and identifies the city manager or his/her designee as the personnel director; the city clerk has been assigned this role. The policies address: the maintenance of personnel records, position classification, employee conduct and general responsibilities, outside occupations, safety, travel and training, city vehicle and equipment use, job applications, promotions, non-discrimination, qualification testing, resident and veteran preferences, nepotism, employees with disabilities, work hours and holidays, pay periods, leave, probationary periods, performance evaluations, termination, grievances, and other essential personnel matters. The city manager is authorized by ordinance to develop and enforce drug and alcohol policies and testing procedures. The city clerk reports that its personnel-related ordinances have been reviewed by the city’s attorney. RUBA staff observed that personnel-related ordinances, as well as some other ordinances, have not been codified and that the paperwork for certain outdated/unenforced/repealed local laws remain in the code books at the city office. This seems to present confusion as to which laws are the most current. RUBA staff has agreed to work with the city staff to compile a complete, consistent, and up-to-date version of the code in order to streamline city staff’s and the public’s ability to reference the existing laws of the city. RUBA staff reviewed a three-page written job description for the Water/Wastewater Worker I position. The document gives a general overview of the position, specifies essential functions, and identifies the knowledge, skills, and abilities this employee must have, as well as their required education, experience, licenses, and certifications. The job description also identifies the employee’s working environment. A standardized ‘Performance Appraisal’ form is used in the evaluation of all employees. The form uses a rating rubric and point system to qualify the employee’s quality, productivity, job knowledge, reliability, availability, independence, creativity, and initiative, adherence to policy, interpersonal relationships, and judgment. It provides space for listing specific areas of improvement needed, recommendations for professional development, and frequency of absences. The appraisals are completed while considering the employee’s actual job description. As noted previously, the employee hiring process is outlined in Chapter XI of the municipal code. As part of that process, the city posts notices of any job openings that identify the position, its duties, wage, benefits, and qualifications, and the deadline for application. Standardized job applications are issued for each position and include space for the applicant to provide all necessary information. Each employee has a personnel file that contains and Employment Eligibility Form I-9 and evaluations. Not all employees have their original applications included in their files because they have been working for the city for decades and were hired at a time when formal applications where not necessary. In accordance with the code, new employees serve in probationary status for their first three months of employment, and are only promoted to permanent status after successfully completing a performance evaluation for the probationary period. New employees are given job training and orientation. The city spent approximately $2,900 on specifically water/wastewater related travel and training in CY13 and allocates $3,500 for CY14.

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.
No The policy making body meets as required.
Yes The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The city owns the community’s water and wastewater utility infrastructure. Its municipal code establishes a public works department with authority to operate and maintain public utilities. The code also identifies the rates customers are to pay for services the utility bill collection policies. The city council is the policy-making body for the utility. It meets regularly, passes annual operating budgets timely, and amends utility-related ordinances as necessary. RUBA staff attended a regular meeting of the city council in February 2014 where several important water/wastewater issues were being discussed, including the need to amend the customer fee schedule and the importance of identifying underground pipes. The adopted utility bill payment policies are fully enforced, with changes made to the policies as necessary. The city manager serves as the utility manager. The city manager position has experienced little turnover over that last couple of decades with the last city manager having served for approximately seven years. The current city manager was appointed in October 2013 and brings significant academic and professional experience. He holds a Masters degree in city management and a PhD in leadership and community development, and has served as the city manager in other cities in Alaska. The city clerk, who serves as the city’s personnel officer and performs the functions of a utility clerk, has held her position for more than three decades. As explained in earlier, the city’s bookkeeping operations are distributed among several staff members. At the head of the Finance Department is the finance officer who holds a degree in finance and has previously served as a business manager. The accounts receivable/utility billing clerk has years of on-the-job experience. The public works superintendent is fully certified to operate the city’s water and wastewater systems. He helps to supervise the other water operators who, while lacking in formal certification, are adequately trained, as demonstrated in part by the fact that the utility performs at the level of service promised, is not on the SNC List, and has not suffered service outages in the last five years because of improper operation. The city’s newest operator has recently attended operator certification training. The public works superintendent also serves as a council member and the public works director is consulted at length in the development of utility-related portions of the city budget. The city employs a routinely-revised organization chart that matches its current structure. The chart lists the names and positions of all employees and arranges them according to department. The chart also specifies the terms of each council member, the type of driver license each employee possesses, and whether employees are full, part-time, temporary, or seasonal. The city’s code only requires that the council hold one regular meeting per month; it does not specify which day of the month or time those meetings must always be. It was explained to RUBA staff that the regular meeting is usually scheduled for a day that no plane visits the island and when council members are able to attend. City staff stated that the council struggles to establish a quorum for meetings in July because of the fishing season and that January meetings, which follow the lengthy budget meetings in the December before, are routinely missed. The relevant indicator in this section has, therefore, been marked ‘No.’ The city nonetheless maintains that the public is always well-aware of its meetings. Meeting notices are posted at least five days in advance at all businesses, community facilities, the school, and city offices and are broadcast over the city radio. The notices include the date, time, location, and meeting agenda. The meetings themselves are also broadcast live over the local radio.

Operation of Utility

Essential Indicators
Answer Question
Yes The utility operator(s) are actively working towards necessary certification.
No 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.
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 previous section of this report illustrates that the operators continue to work toward their necessary certification. The public works director maintains contact with Department of Environmental Conservation to discuss operator certification requirements and understands well the importance of having operators adequately trained and certified. The city requires all operators to become certified and has, in accordance with personnel policies, terminated operators recently who have not been willing to gain necessary trainings and certifications. RUBA staff introduced to the operators and department heads utility management training available through the RUBA program and they asked to be personally contacted of any ones upcoming. Utility operators communicate regularly with the public works director and superintendent, who then forward any issues or concerns to the city manager. The superintendent also serves on the city council, ensuring that utility issues are raised and considered among the governing body. The city manager has only been in his position since October 2013 and has not yet had the opportunity to visit all utility-related sites (which include numerous well houses, the treatment plant, the shop, lift stations, etc.), but intends to. The city has recently established city-wide ‘safety committees’ made up of representatives from each department. The committees meet once per month to identify workplace hazards, discuss safety concerns, and formulate responsive actions. Utility staff also hold weekly safety meetings and the participants and issues raised during these meetings are recorded. Safety information is posted conspicuously around work all worksites, first aid kits and fire extinguishers are readily available, and information about the safe handling of chemicals such as MSDSs are on hand. At the February 6, 2014 city council meeting the importance of monitoring and testing safety devices such as fire extinguishers and fire alarms was discussed. As detailed in the ‘Organizational Management’ section, the water and wastewater utilities continue to operate at the level of service proposed, are not on the SNC list, and have not suffered any major problems/outages due to management issues. Utility staff report that occasionally water quality testing is delayed because weather or other problems delay flights to the remote island and slow water samples from reaching testing facilities on the mainland. The city clerk prepares and distributes the Consumer Confidence Report (CCR) each year before the required deadline. RUBA staff has recommended that other city staff, particularly the operators, learn how to complete the CCRs as well. Utility staff report not having a formal operation and maintenance schedule for the existing infrastructure, or inventory control or critical spare parts lists. The utility operators do keep personal log books of the work they do and record diligently all meter readings as needed. However, the schedule necessary for checking, testing, maintaining, and replacing system components is not written down in any complete document. Some spare/extra parts and chemicals, such as pumps, chlorine, and fluoride, are kept on hand, but are not systematically inventoried. Indeed, there are sometimes concerns of running out of supplies and not being able to get new shipments to the island in time because of transportation difficulties.