Quarterly Report: 2011, April - June (Q4), Noorvik

Community:
Noorvik 
Staff:
Georgianna Phillips  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Noorvik 
Population:
600  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
8/3/2011 
Community Sanitation Overview:
Water is pumped from the Kobuk River to the water treatment/utility building, and stored in a tank. From there, a pressurized circulating system distributes water in utilidors. Groundwater wells have proven unsuccessful. Noorvik has a vacuum sewer system in which waste is carried by air instead of water. Vacuum pressure pumps the sewage to the 60,000-gal. collection and treatment plant. The system requires special toilets and water valves which collect wastewater from the sinks, toilets and showers. Over 100 homes, the schools and businesses are served. Funds have been requested to connect and plumb the remaining 16 unserved homes on the south side of town and along River Road. A new landfill and access road is under development. Funds have also been requested to construct a multi-purpose facility, including a new washeteria, recreation center, Head Start, day care center, a restaurant, Native Crafts production and a food processing plant. The community is interested in using wind energy.  
RUBA Status & Activities This Qtr:
RUBA staff assisted the city clerk with information regarding the IRS tax liens imposed on the city for 2010 and 1st quarter 2011. The IRS officer explained that the IRS will still garnish councilmembers until the lien imposed on the city has been paid in full and is current. The IRS did garnish an employee's wage and was informed that it was an employee not a councilmember. The IRS garnished as the past employee was a signer and no response had been made by the city in regards to past and current councilmembers. Kotzebue Ruba staff also received a request from Alaska Village Electric Cooperative (AVEC) staff to encourage and assist the city in paying their utility electric bill. The city is struggling financially and will be disconnected from the electrical system unless a payment is made. AVEC and the city had previously agreed that the collected sales tax, which would normally be remitted to the city, would instead be applied to the electric bill, although a deficit continues to exist. RUBA staff informed AVEC that the council will be meeting with the Alaska Rural Utility Coopertative (ARUC) next week and is expected to sign an agreement with ARUC. The agreement would clarify that ARUC would be responsible for utility expenses in the future. No disconnects will be done pending the outcome of the Noorvik City Council meeting. RUBA staff will continue to monitor the situation and offer assistance. The council had hired an administrator and at the time the finance officer had gone to training for QuickBooks, upon returning to work the newly hired administrator resigned from his position. A councilmember also resigned during this period. RUBA staff was contacted by the Vice-Mayor for the city of Noorvik regarding notification of their gaming permit being suspended for not reporting its 2010 and quarterly report for 2011. The vice-mayor asked if there was anything that could be done in the interim, getting reports done. RUBA staff called the Gaming division to find out this information and was informed that until the reports are all done and turned in no gaming would be allowed. RUBA staff called the Vice-mayor and informed him that all reports needed to be completed or that they could loose their permit for gaming. The Gaming deparment of the city had hired a new bookkeeper and was able to refile corrected reports by constructing the day to day business of gaming. The city upon filing of the corrected reports was again allowed to begin gaming. The city finance officer and RUBA staff discussed the sales tax due to the city from gaming and the need to have them pay past due and the current sales. The finance officer will have the city clerk work with the gaming bookkeeper to resolve this issue. RUBA staff was also contacted via email from ANTHC stating that the city council had an emergency meeting in which AVEC also participated. As a result of the meeting the city of Noorvik signed an agreement with ARUC effective June 1, 2011 and understood that all past due bills were the responsibility of the city. The city council also dedicated funds from all past due bills collected to making payment to AVEC. The reports for gaming were done and submitted but were not correct. RUBA staff spoke with the finance officer and advised to make sure that the corrected reports be done throughly and correct. RUBA staff assisted the city staff in working with AML/JIA in regards to current insurance past due payment(s). RUBA staff spoke with a represenative from AML/JIA and asked if the city was to dedicated the additional revenue sharing slated for the city, if the policy cancellation could be avoided. Based on the budget signing by the Governor and no line-item veto of this supplemental revenue sharing the city was able to continue its insurance coverage. 
RUBA Activities for the Coming Qtr:
The City Council voted to go full ARUC in May, 2011. As of June 1, 2011 ARUC has begun billing and management of the water plant and system. The city clerk and finance officer have requested that RUBA staff assist in organizing and updating sales tax records so that they can make sure they are collecting the proper amounts from businesses. The Northwest Arctic Borough was allocated money for the City of Noorvik to construct a storage shed and shop.
Scores:
 
Essential Indicators:
24 of 27
Sustainable Indicators:
15 of 27
Total Score:
39 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.
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 of Noorvik has adopted a balanced realistic budget listing all revenues and expenses of the utility, but due to high turn-over and past practices no financial records have been produced that accurately portray the current financial status. With current staff in place, the finance officer has been able to develop reports for the council In talking with Alaska Village Electric Cooperative (AVEC) accounts are past due on all the electric accounts but has purchased enough fuel to last until next year's fall barge.

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.
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 utilizes QuickBooks with an accounts receivable system in place to track customers accounts. Quickbooks also provides them with an accurate accounts payable system, payroll system to calculate payroll, cash receipts system and a cash disbursements system. The City Council signed an agreement with Alaska Rural Utilities Cooperative May 1, 2011, and became effective as of June 1, 2011. They utilize their budget to categorize their chart of accounts in a usable manner. They use a purchasing system that requires approval prior to purchase comparing to budgeted amounts. The bank reconciliations are not yet complete.

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
Even though they use QuickBooks which accurately calculates, tracks, and report payroll tax liabilities, and they are current in filing tax reports, the previous administrator did not pay any taxes. In order to pay off the IRS debt the city passed a resolution to pay past due taxes with their Revenue Sharing for the next fiscal year. Before this resolution was passed a current Councilmember did have their refund garnished and applied towards the City tax liability. The IRS Agent has indicated that until the full amount of backtaxes are paid Councilmembers will see their private refunds garnished for the Trust Fund Balance. Current year taxes have been kept up.

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.
Yes 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
According to AMLJIA, the City of Noorvik has renewed their insurance and are on a payment plan. For this last quarter of the fiscal year the city had been unable to make payment for insurance and had been notified that their insurance would be dropped for lack of payment. RUBA staff worked with city personnel on solving this issue and because the state was supplementing the revenue sharing as an additional one time payment, the city was able to assign that supplemental revenue share to AML/JIA. The city has requested assistance in updating their personnel policies because the one they have is very old and has not been reviewed by an attorney that we know of. They do have an adequate hiring process as well. They do have updated job descriptions on file. Due to numerous staff turnover and change in council, the city has not been able to follow through with their personnel policies on evaluations. For the new hires, RUBA did not see any I-9 form filed in their personnel file nor were there letter of acceptance but the administrator was informed of them and will make sure this is done. The City staff has attended RUBA classes that were offered and their water plant operator has attended Kotzebue classes as well. Operators will also attend class in April.

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
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 is the known entity by ordinance who owns the utility who has not been active in enforcing their policies. The city council hired a past administrator as a temporary-parttime to fill the gap until a fulltime administrator is hired. The Remote Maintenance Worker and has a certiciate for water distribution and is attending class this next quarter.

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".
No The utility is not on the "Significant Non-Complier" (SNC) list.
No The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
Both the main operator and alternate plan on attending the next session here in Kotzebue and have been following the preventative maintenance plan for their existing facilities. The administrator/Mayor does receive the operations and maintenance report from the operator and routinely spot checks the facilities including meeting with their engineer and reviewing the water monitoring summary with the operator to make sure they are sent in timely. Operators provided a safety checklist and manuals but no safety meetings have been held. The Utility has not suffered any major problems that are unresolved so they are operating at the level proposed and have completed their consumer confidence report. They are currently on the SNC list because they are still struggling with TT violations for turbidity and had a first draw action level exceedance that has been resolved.