Quarterly Report: 2013, October - December (Q2), Nightmute

Community:
Nightmute 
Staff:
Eli Jacobson  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Nightmute 
Population:
289  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
2/8/2013 
Community Sanitation Overview:
The City of Nightmute's utility consists of a small water treatment plant with a fill point and a wastewater haul service for 42 residential units and 15 commercial units. The city water plant is on the significant non-complier list. Residents currently get drinking water from the local stream by manually hauling containers. Houses that have flush haul units have wastewater removed on a prepay basis. The school has its own sewage lagoon. A washeteria is not available. The Nightmute power plant was acquired by AVEC in March 1998. Electricity is provided by AVEC. 
RUBA Status & Activities This Qtr:
On October 16, Bethel RUBA staff traveled to Nightmute for the purpose of completing a RUBA management assessment. RUBA staff reviewed the requirements for compliance in the taxes and personnel sections of the RUBA assessment. A copy of the authorization to request financial tax information was given to the administrator for a council member to sign as the do not currently have a mayor. The main computer, which is critical to the operation of the city, was not functional. RUBA staff contacted a computer store in Bethel by cell phone. Using speaker phone, RUBA staff, the administrator, and the computer store employee agreed that the computer would need to be sent in to determine if it could be repaired or replaced. RUBA staff met the administrator at the community water treatment plant located on the east side of the community. The plant is in a state of severe disrepair. The building needs to be leveled, and the inside of the plant has been vandalized, with supplies and equipment scattered about the room or missing. The administrator has secured the front doors with a large chain and lock. The fill point can be accessed from the outside of the building and does not require payment. The plant has pipes running to the health aid station where the water is used for showers and toilets. The Nightmute water treatment plant is on the significant non-complier list, and the administrator said that the water is not potable. Members of the community stated that the water is unsafe to drink. Currently community members get drinking water from a stream located on the west side of the community. A shed has been built over the middle of the stream with a section of culvert in the middle of the floor that extends down into the water. Residents stand in the shed and dip water containers down into the culvert to obtain potable water. The containers are then manually hauled to houses. RUBA staff called the remote maintenance worker (RMW) for Nightmute. The RMW informed the administrator that the City of Nightmute needed to hire a water operator before an onsite visit could be planned. RUBA staff reviewed the assessment indicators that affect the sections of finance, accounting, management, and operation of the utility. While discussing the budget, it was necessary to call Juneau Division of Community and Regional Affairs Community Aid and Assistance staff and discovered the city is eligible for $378,333 from Community Revenue Sharing and payment in lieu of taxes (PILT). To access the funds, the city is required to complete a certified financial statement for 2010 and 2011 as well as budgets for FY12 and FY13. RUBA staff worked with the administrator on organizing the available documentation. A draft RUBA assessment report will be written and provided to the city soon for review and comment prior to finalization. RUBA staff will assist the city in recruiting council memebers and selction of a mayor, completing certified financial reprots and budgets to access the community revenue sharing and PILT funds, and attempting to recruit and hire a water operator. An additional trip was taken on December 18-19, 2012 that focused on completing the budgets and certified financial statements in order to receive available Community Revenue sharing and Payment in Lieu of taxes funds. A work plan is being established and further trips are being planned. Four council memappointed in December. 
RUBA Activities for the Coming Qtr:
RUBA staff are planning additional trips and establishing a work plan.
Scores:
 
Essential Indicators:
7 of 26
Sustainable Indicators:
7 of 27
Total Score:
14 of 53

Finances

Essential Indicators
Answer Question
No All revenues and expenses for the utility are listed in the utility budget.
No The utility has adopted a balanced realistic budget.
No 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 Nightmute has not adopted a FY13 budget for the period July 1, 2012 through June 30, 2013. Nightmute is eligible for $378,333 from Community Revenue Sharing and Payment in Lieu of Taxes (PILT). To receive this money the city needs to complete certified financial statements for 2010 and 2011, as well as budgets for FY12 and FY13. This funding will make it possible to create a balanced and realistic budget. Monthly financial reports that compare year-to-date revenues and year-to-date expenditures to annual budgeted amounts are not available. The monthly reports need to be submitted to the council and recorded in the meeting minutes. There was no documentation that the electric bills are being paid. Nightmute has a one-year supply of fuel. The city does not have a repair and replacement fund. Currently, year-to-date revenues and expenditures cannot be determined. The city has seven council members but still needs to select a mayor.

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.
No An accounts receivable system is in place which tracks customers and reports past due accounts and amounts.
No An accounts payable system is in place.
No The payroll system correctly calculates payroll and keeps records.
No A cash receipt system is in place that records incoming money and how it was spent.
No The utility has a cash disbursement system that records how money was spent.
Sustainable Indicators
Answer Question
No 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 of Nightmute has a collection policy and actively follows it. Customers prepay before receiving wastewater removal service. An accounts receivable and accounts payable system is not currently in place. The city does not have a system to calculate payroll and keep records. Nightmute does not have a cash receipt system. The city does not have a chart of accounts. Monthly bank reconciliations are not completed for all utility accounts. A purchasing system has not been established.

Tax Problems

Essential Indicators
Answer Question
No 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.
N/A 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 utility does not have a system to accurately calculate, track, and report payroll tax liabilities. A form requesting release of federal tax information from July 2008 to June 2012 was provided to the administrative staff during the assessment. Federal tax compliance cannot be verified until this form is completed and sent to the IRS. The state Department of Labor (DOL) was contacted on September 24, 2012. DOL verified that the City of Nightmute is not current on their Employment Security Contributions account. The City of Nightmute is not on the Lien Watch dated July August 2012.

Personnel System

Essential Indicators
Answer Question
No 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.
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
The City of Nightmute's workers compensation insurance was through the Alaska Municipal League Joint Insurance Association, Inc (AMLJIA), and is not current. A personnel policy has been adopted. The city has written job descriptions, a written personnel evaluation process, and a written hiring process. Personnel folders do not contain job applications, I-9's, and letters of acceptance. The city has a three-month probationary period in the personnel policy. On-the-job training and additional training opportunities are provided as necessary. Staff are encouraged to pursue further training opportunities.

Organizational Management

Essential Indicators
Answer Question
Yes The entity that owns the utility is known; the entity that will operate the utility is set.
No 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.
No 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.
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 of Nightmute owns the utility and is the policy making body. The city has seven council members and an acting mayor; the council will need to formalize a mayor selection. The city wastewater removal service operates on a prepay basis. The city administrator performs managerial and bookkeeping duties. The water utility does not have an operator. The city has adopted ordinances that give the utility authority to operate, however the city does not have an adopted organizational chart. City meetings are posted in three different public places and the requirements for the Open Meetings Act are met.

Operation of Utility

Essential Indicators
Answer Question
No 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
No 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.
No The utility is operating at the level of service that was proposed.
No The operator provides status reports to the manager on a routine basis.
No 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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
The City of Nightmute hired a new operator October 31, 2012 who needs to be sent to training. A preventative maintenance plan has not been developed for the water plant. The utility does not have a safety manual or hold regular safety meetings. The utility currently does not produce potable water. The city did not have a posted CCR. The city is on the July 2012 Significant Non-Compliance list. The utility does not have an inventory control or critical spare parts list.