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

Community:
Nikolai 
Staff:
Jedediah Smith  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Nikolai 
Population:
88  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
7/24/2013 
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:
On May 15, 2013, RUBA staff traveled to Nikolai to assist with IRS employment tax filings and to provide general technical assistance for the office administration. RUBA staff has been working steadily with the City of Nikolai for the past four months to resolve employment tax issues. The city's employment tax status with the IRS has been incorrectly classified, and the city had not yet registered for electronic filing. RUBA staff was able to recover the necessary 941 filings from 2010, as well as filings from the second and third quarter of 2012 that the IRS claimed it did not have on file. RUBA staff updated the virus protection on the city office computer and completed the necessary registration for the IRS EFTPS program. This will save the community significant money in late payment fees, as the IRS assesses penalties for traditional check payments. RUBA staff will follow up with the city clerk to ensure the city routinely and smoothly transitions to this new system.  
RUBA Activities for the Coming Qtr:
RUBA staff will continue to work with the City of Nikolai to ensure employment tax filing compliance. RUBA staff plan to work with the city and with the Quickbooks contractor to schedule another trip to assist with the reconciliation of the Quickbooks files.
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 FY13 budget has been carefully constructed and is adopted. 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.

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
The city is not compliant with required federal tax deposits and filing. The City of Nikolai has been making federal tax deposits, though due to problems with the city's filing status, the payments have not been properly credited. The city has recently engaged in electronic filing. RUBA staff continue to work with the IRS and with the City of Nikolai to clear up employment tax filing status and issues and hope the city will be compliant on all payments and filings by the third quarter of 2013. Tax clearance from the Alaska Department of Labor dated March 15, 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 from July 1, 2012 to July 1, 2013 with Alaska Municipal League Joint Insurance Association (AMLJIA). 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.