Quarterly Report: 2014, October - December (Q2), Nikolai

Community:
Nikolai 
Staff:
Roberta Eleazer  
DCRA Regional Office:
Anchorage 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
Yes 
Agreement Date:
6/10/2009 
Entity:
City of Nikolai 
Population:
88 (2012 DCCED certified estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
2/8/2010 
Exp Date:
6/10/2011 
Last Updated:
12/27/2013 
Community Sanitation Overview:
All 47 households and facilities use individual wells; of these, only two units lack plumbing. Thirty-three homes, including ten new HUD housing units north of the airport, are connected to the piped wastewater system. The remaining 15 homes use wastewater tanks. Funds have been requested for a master plan to rehabilitate the washeteria, develop two new wells, upgrade the landfill and expand the piped wastewater system. Nikolai does not have a piped water system; households rely on individual wells. 
RUBA Status & Activities This Qtr:
In December, RUBA staff received a call from the Taxpayer Advocate Service indicating the City of Nikolai's tax filing status had been resolved and a long outstanding tax bill had been credited. At some point during 2012, the IRS changed the City of Nikolai's employment tax filing status to 944. The community had been and continued to file 941 filings and payments, and the payments were not being credited to the community, resulting in an outstanding tax bill in late penalties and outstanding taxes. RUBA staff contacted the IRS originally in May of 2013 to change the City of Nikolai's tax status back to 941 and to credit all payments to the City of Nikolai. This process took several months. On December 16, RUBA staff received a call from the Taxpayer Advocate Service indicating the tax filing status had been changed, though the IRS did not have second and third quarter 2013 filings, nor did the IRS have a third quarter filing for 2009. RUBA staff had a copy of the second quarter filing from 2013. Anchorage RUBA staff provided the Nikolai City Clerk, Winchell Ticknor, with the following forms for the November election: General Municipal Election, Declaration of Candidacy, ballots, and an election calendar. It was reported that the election ran smoothly and three new council members had been elected. The long-term mayor was not reelected and a new mayor will be sworn in at the next council meeting. Nikolai City Clerk, Winchell Ticknor advised Anchorage RUBA staff that a special meeting was held on 12/17 to certified the November election and seat three new council members. A motion was passed to retain Joe Kimball as acting Mayor till the next regular meeting.  
RUBA Activities for the Coming Qtr:
The council requested an elected officials training for January/February. RUBA staff will assist in the 3rd quarter 941 filing and filing the missing 941 report from 2009.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
13 of 27
Total Score:
35 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.
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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
Financial indicators have been shifted to 'no' to reflect a lack of current documentation. These indicators will be changed when current information is received. Nikolai's FY14 budget was adopted by the city on July 9, 2013. The budget includes expenditures for the wastewater department. The City of Nikolai owns and operates the electric utility. The City of Nikolai receives fuel from Everts, Inc. on an as needed basis. All fuel orders are paid in full upon arrival. The City of Nikolai does not charge residents for wastewater service because only a small portion of the community is on the system. The city has instead chosen to subsidize the wastewater utility through the fuel and electric sales revenue. Manager/operator reports are given verbally when requested by the council. Because of the small labor pool in Nikolai, many city council members either work for the city or donate time to the city to complete needed jobs or tasks.

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.
No Monthly bank reconciliations have been completed for all utility accounts.
No 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 does not have an adopted collection policy for the wastewater utility because they do not charge the customers. They do, however, have an adopted collection policy that they actively and consistently enforce for the electric and fuel utilities; these utilities subsidize the wastewater utility. The city utilizes QuickBooks for accounts receivable, accounts payable and payroll. The QuickBooks system is set up properly and has been a reliable tool to monitor the city's finances. Bills are issued on a regular basis by the fifth of every month in accordance with the city's billing and collection policy. The city purchasing system requires prior approval from the mayor or city clerk depending on the purchase amount. Once approval has been given, a purchase order is issued; however, requests are not compared to the budgeted amounts. In August, the city purchased a new computer and updated its software with the most recent version of Quickbooks 2013.

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.
No 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
As of December 6, the city was not in compliance pending the return of the Authorization to Request Federal Tax Information. 941 forms for the third quarter 2013, and third quarter filing for 2009 need to be submitted. Tax clearance from the Alaska Department of Labor dated December 20, 2013 has been granted.

Personnel System

Essential Indicators
Answer Question
Yes The utility has a posted workers compensation insurance policy in effect.
Sustainable Indicators
Answer Question
No 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.
No 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 Nikolai has a posted workers' compensation insurance policy in effect with Alaska Municipal League Joint Insurance Association (AMLJIA) as of December 12/20/2013. The city's current hiring process is not written. Job notices are posted for ten days with the job title and description. Interested applicants apply at the city office. There is currently no probationary period for employees. Personnel folders contain: I-9, Job Application and Letter of Acceptance. Training opportunities to staff are provided as funds allow or opportunities by other sponsors come available.

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
No 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 Nikolai owns and operates the utility, and is active in policy making for the utility. The city council has been actively enforcing the fuel and electric utility policy. The city clerk has attended a QuickBooks training class sponsored by the RUBA program. The utility operator is adequately trained to operate the utility, but does not hold certification. The City of Nikolai has adopted the necessary ordinance to give it the authority to operate. The Nikolai City Council meets as required and complies with the Open Meeting Act for all 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.
No The utility maintains an inventory control list.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The utility operator is not certified, although the operator is actively working toward the necessary certification. A preventative maintenance plan for the existing system is on file in the city office. The City of Nikolai does not participate in AMLJIA monthly safety meetings or conduct other means of safety meetings. The utility operator reports to the mayor, vice-mayor or city clerk when there is a problem or when the operator can foresee one. The utility operator and council attempt to keep needed critical spare parts on hand but they currently have no written critical spare parts list.