Quarterly Report: 2013, April - June (Q4), Kivalina

Community:
Kivalina 
Staff:
Margaret Hansen  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kivalina 
Population:
398  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/24/2013 
Community Sanitation Overview:
Wells have proven unsuccessful in Kivalina. Water is drawn from the Wulik River via a 3-mile surface transmission line and is stored in a 700,000-gallon raw water tank. It is then treated and stored in a 500,000-gallon steel tank. Residents haul water from this tank. One-third of the residents have tanks, which provide running water for the kitchen, but homes are not fully plumbed. The school and clinic have individual water and sewer systems. Residents haul their own honeybuckets to bunkers. A new landfill and honeybucket disposal site was completed. The business plan is completed. Work started on the wastewater treatment plant last summer but encountered human remains and artifacts; the community had to bring out an archeologist, which slowed the project down. Only the foundation and bin walls were completed before they ran out of funding. Construction is approximately 50% complete. ANTHC and the city applied for an $850,000 CDBG grant but fell below the funding line. ANTHC and the tribe submitted an ICDBG grant for supplemental funding. A direct grant to USDA has also been prepared and submitted. The Water Treatment Plant Upgrade project is complete. In addition, funding from the State of Alaska FY 2012 Captial Budget for a $150,000 sanitation improvements master plan was approved. The City of Kivalina has recently signed a cooperative project agreement for a project to fund the construction of the interior components of the wastewater treatment plant. The ANTHC sent a project superintendent to the site in March 2012 to begin this work. The city is still pursuing funding for construction of the exterior portions of the plant. The ICDBG program did not select this project for funding. There is still the possibility that USDA might fund this work.  
RUBA Status & Activities This Qtr:
Kotzebue staff worked with the administrator via email to correct monthly financial reports submitted to RUBA that had formula errors. On June 10th the tanks levels were checked, they have approximately 80 days left of water using their current water usuage. They usually start pumping water into the tank second week of July. The drain field is finally open as of June 6 so the city was able to open the washeteria once again which will help to generate much needed revenue.  
RUBA Activities for the Coming Qtr:
Staff will continue to request information needed to document progress to come into compliance with the RUBA assessment. RUBA staff continues to make them aware she is available to travel to provide training and assistance just need to request assistance in writing.
Scores:
 
Essential Indicators:
22 of 27
Sustainable Indicators:
16 of 27
Total Score:
38 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.
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.
No Budget amendments are completed and adopted as necessary.
Finances Comments
The city did pass a balanced budget that lists all revenues and expenses for the utility but show that they expect the school district to pay them $197,193.00 for this fiscal year or .30 cents a gallon which is unrealistic since no current rate study has been performed. The last approved monthly financial report that RUBA received was for the months of April and May so are not timely. The May monthly financial report reveals that the water plant expenditures show no payment for electricity year to date. Kotzebue RUBA has been in contact with the city who stated that they do have their fuel scheduled to supply their water plant for the year. There are no known accounts which set asided funds for repair and replacement costs, the financial reports show that the revenues are not equal to those budgeted and expenditures are above those budgeted.

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 staff are actively following collection policies and billing customers on a monthly basis. QuickBooks is utilized for all their acounting needs - tracking accounts receivable, accounts payable, payroll, and recording incoming money and how it was spent. The adopted budget is used as a chart of accounts. The city has a purchasing system to check against the budget using monthly financial reports. It is unknown if monthly bank reconciliations are completed.

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.
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 uses QuickBooks to track and report tax liabilities; have not received the return tax authorizations from IRS or DOL so do not know if they are current with deposits and reports. In reviewing the Tax Lien publication, Kivalina still owes $136,735.00, from past liability; they are repaying this under a payment plan with the IRS.

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
According to AMLJIA, Kivalina is in compliance and has been issued new insurance coverage until June 2013 has paid her insurance in full. There have been no changes to personnel policies, which included an adequate hiring process that was reviewed by the Northwest Arctic Borough Lawyer when passed. All job descriptions are current and are tied to job evaluations. There has been no turnover, so all personnel files have in them information as previously reviewed. No employee evaluations have been documented as completed.

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.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
The city council is the known entity who operates the utility as adopted by ordinance. RUBA staff has received meeting minutes confirming that the governing body is enforcing utility policy. Kivalina has a staff of two in the city office, sharing bookkeeping duties; both have worked for the city for over five years. Their water operator is certified. They have adopted an organizational chart that reflects the current structure. I have received minutes showing that the council has been meeting lately but have noticed for the past nine months that they have had only five councilmembers present. It appears the city has two vacancies that they have not filled within 30 days of those vacancies; therefore violating their code of ordinance pertaining to filling vacant seats.

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.
No 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
Their main water operator is certified for Water Distribution, Provisional and Water Treatment, Provisional; CEU requirements have been met. The administrator receives a monthly operations report and routinely spot checks the facilities, but unsure whether they hold safety meetings. RUBA staff cannot confirm an inventory or critical spare parts have been purchased as RUBA staff has not been invited back to Kivalina since last May 2012. They are operating at the level of service proposed. The city has completed their CCR and is not on the SNC list.