Quarterly Report: 2014, October - December (Q2), Naukati Bay

Community:
Naukati Bay 
Staff:
Lynn Kenealy  
DCRA Regional Office:
Juneau 
Gov't Type:
Community Non Profit 
Borough:
 
Agreement?
Yes 
Agreement Date:
2/13/2013 
Entity:
Naukati Bay, Incorporated 
Population:
115 (2012 Alaska Department of Labor Estimate) 
Assessment Status:
Assessment Completed 
Assessment Date:
4/25/2013 
Exp Date:
2/13/2015 
Last Updated:
12/23/2013 
Community Sanitation Overview:
The community of Naukati Bay estimates a population of about 170 in the summer, and down to as low as 100 in the winter months, with 130 registered voters as of January 2013. The community is located on the west cost of Prince of Wales Island, in Southeast Alaska. The community's school enrolls 20 students, and is a part of the Southeast Island School District REAA. The community was originally settled as a logging camp, then used as a Department of Natural Resources land disposal site. The community now consists primarily of loggers, fishers, and oyster farm employees working locally, as well as residents commuting over 100 miles round trip for work in other communities on Prince of Wales Island, such as with the Southeast Island School District, US Forest Service, National Forest Foundation, Community Connections, Southeast Road Builders, Kewit Construction, and other businesses on the island. Naukati Bay can be accessed by float plane and by old logging roads which are in the process of being converted to state highways. There is a federal dock in the community, which is in the process of being transitioned to state ownership and community management. There is also a pending multi-source grant to convert the small dock facility to a more extensive marina facility. The community is predominantly run by Naukati Bay Inc., which runs the community's marina grants project and owns and operates the Naukati Bay Shellfish Nursery. Electricity is provided to the community by the Alaska Power Company, and the community receives Power Cost Equalization. The state is in the process of connecting the community to hydro-electric power lines from across the island. There is no water utility at present, and most homes and businesses are either on individual water catchment systems, or are self-connected to a local spring and use the spring water untreated. The community has undergone Village Safe Water assessments, and is interested in a decentralized water system, with individual home owners caring for their own water and wastewater systems. The current VSW assessment is aimed at assessing this option, and in particular a system of loaning money through Naukati Bay Inc. to individual low-income residents, at a low interest rate, then turning the money around to other residents as the money becomes available again, in order to develop individual systems throughout the community. A water storage and treatment plant near town, using a store and haul system, has also been considered, but is not felt by the community to be financially feasible or sustainable at this time. Because the community does not yet manage a utility, this assessment will focus on the management of Naukati Bay Inc., and of the Naukati Bay Shellfish Nursery. 
RUBA Status & Activities This Qtr:
Naukati Bay, Inc., undertook corporation elections this quarter, and now has a new president. The vice president and treasurer remain the same individuals. There was limited contact between the corporation and the RUBA program this quarter, due to the elections. 
RUBA Activities for the Coming Qtr:
The vice president of Naukati Bay is registered to attend the RUBA Financial Management 32-hour training in Juneau in the coming quarter. Additionally, RUBA staff will continue working with the community on improvements to RUBA indicators, and on identifying sources of research and funding for the water projects the community is interested in undertaking.
Scores:
 
Essential Indicators:
23 of 27
Sustainable Indicators:
17 of 27
Total Score:
40 of 54

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.
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.
Yes Budget amendments are completed and adopted as necessary.
Finances Comments
Naukati Bay Inc. follows the fiscal year of July 1 through June 30. The community's budget includes the categories of administration, insurance, EMS, fire hall, road maintenance, dock, July 4 celebrations, picnic building, community building, and grader fuel and maintenance, as well as miscellaneous income which mainly consists of donations. Each category is then broken out and detailed in an income/expense report which is provided to the board at each regular monthly meeting. All budget categories for FY13 were in line last quarter; however, attempts to document adoption of a new FY14 budget, and recent financial reports have been unsuccessful, therefore, several essential indicators are marked 'no' until such documentation can be obtained. The shellfish business is broken down in a separate financial document, which is also provided to the board at each regular meeting. Revenues received from grader rentals, Community Revenue Sharing, donations, the oyster business, and a yearly auction have been sufficient in the past to cover all expenses. Monthly manager's reports are also provided by the volunteer managers of each department, accompanying the financial reports. These manager's reports include information about bills, expenses, income, and any other relevant information that comes up over the course of the month. The community receives its fuel from Naukati Connections, a for-profit store within the community. Naukati Connections has its fuel trucked in from Craig by road as needed.

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 community does not at this time have a utility to collect fees; however, it does bill customers of the shellfish company. The community utilizes Quicken to track all finances, and follows a cash accrual method of calculating deposits and expenditures. The community hires a bookkeeper from outside of the community to track the payroll system, though this bookkeeper does not have access to the community's bank account or finances. The community does not accept cash, and requires two signatures on all outgoing checks (there are three approved check signers in the community). All bills are presented to the board at regular meetings and approved for payment before the treasurer pays, usually by check. The purchasing system requires that any purchase under $1,000 receives approval from the board president, and any purchase over $1,000 receives approval from the board. This process is detailed in the policies and procedures manual. The community's treasurer completes bank reconciliations monthly; however, the most recent documentation of bank reconciliations is from April 7, 2013.

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
The State of Alaska granted tax clearance for Naukati Bay Inc. on December 13, 2013. IRS confirmation of tax compliance was received on December 18, 2013. The city has no current liens. The community hires a bookkeeper to complete all payroll, who also reports back to the community what is due to the IRS and state for taxes. Checks and reports are then completed by the community's treasurer.

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.
No 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.
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
Proof of worker's compensation insurance was observed on September 25, 2013. Proof of insurance is posted at the oyster nursery, clearly displayed where all employees work. Naukati Bay Inc. is covered by LM INS Corp. Naukati Bay Inc. has job descriptions signed by all board members, and are currently working on job descriptions for part time seasonal oyster farm employees. The community has a personnel policy including policies regarding travel (advance request and approval required), non-discrimination, meeting conduct, employment agreement, employment application, and mileage records, as well as a few other related documents. All board members and employees are given a binder including all of these documents, and sign board job descriptions agreeing to all provisions. Naukati Bay Inc. encourages its staff and board members to attend trainings through the RUBA program and other opportunities that come up throughout Alaska. There is money set aside in the budget for travel and conferences, as such. The community does not currently have a written personnel evaluation process or job description for employees of the oyster farm, nor a probationary period. Each employee does have a personnel file which includes their job application and employment agreement (the equivalent to a letter of acceptance). However, I-9 forms are not currently being filled out for each employee.

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
Naukati Bay, Inc. is the entity which will own and operate the water utility once it is in place. The community currently owns and operates an oyster farm, and has received all of the appropriate business and operating licenses. The policy making body will be the Naukati Bay Inc. Board of Directors, which meets at least monthly and sometimes bi-monthly. The community currently has a volunteer manager and treasurer, both of whom have been in these positions for years and have the assistance of past managers and treasurers when needed. They are encouraged to attend trainings and conferences when available, and there is money in the community's budget for travel and conferences. One board member has attended the RUBA Planning course, and others are requesting to attend further trainings. Upon the building of a community water utility, the board will adopt any and all necessary ordinances, rules, and regulations to give it authority to operate. As it is a non-profit association, Naukati Bay Inc. is not required to comply with the Open Meetings Act. However, board members post in multiple places throughout the community, as well as e-mailing anyone who wishes to receive e-mails reminding them of both regular and special meetings. While the community does not have a formal traditional organizational chart, the board members sign onto job descriptions which clearly delineate chain of command and responsibilities.

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.
Yes The utility maintains an inventory control list.
Yes The utility maintains a critical spare parts list.
Operation of Utility Comments
Naukati Bay, Inc. has identified an individual in the community who could serve as a water operator in the event of the water utility being opened. This individual would work toward necessary certification, with the financial support of the community, as there is money available for travel and conferences. Other items such as a preventative maintenance plan would be provided by and through the construction of the facility. The oyster farm manager manages some part time staff, and observes the facility regularly to ensure all necessary processes are completed regularly. The community keeps inventory information for the oyster farm, grader, all equipment, and the water pump for the nursery. They also maintain a critical spare parts list, and all large critical spare parts are contained in a secured Connex container. The community is not currently undertaking safety meetings, though there was interest among many board members in beginning such meetings regularly.