Quarterly Report: 2014, January - March (Q3), Kivalina

Community:
Kivalina 
Staff:
Margaret Hansen  
DCRA Regional Office:
Kotzebue regional office 
Gov't Type:
Second Class City 
Borough:
Northwest Arctic Borough 
Agreement?
No 
Agreement Date:
 
Entity:
City of Kivalina 
Population:
402 2013 Department of Labor Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
5/12/2008 
Exp Date:
 
Last Updated:
4/2/2014 
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 two years ago 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 but that did not get funded as well. A direct grant to USDA has also been prepared and submitted. 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 no funding to complete this project. The draft of the sanitary master plan is complete. The tribe has cast their support for the recommended alternative (in-home low water-use alternative) by passing a resolution. IHS generally support the recommendations of the plan and would support funding for a small number of homes to receive in-home low water-use fixtures. The performance of these improvements would be monitored and documented over a defined period of time. After the completion of the report, the IHS may approve funding for community wide implementation. 
RUBA Status & Activities This Qtr:
Kotzebue RUBA responded via email after reviewing the October and November 2013 monthly financial reports. After discovering formula errors, possible typo errors and that the budget column differs from the budget that was submitted to our Juneau office as being approved, Kotzebue staff recommended to make the corrections. In addition, Kotzebue RUBA noted the administrator that the water and sewer revenue was alot less then the expenditures so recommended she amend the budget by increasing revenue and/or decreasing expenditures. Kotzebue staff told the administrator that once she makes the corrections in the October report, to amend the November report as well at which time Kotzebue RUBA will review the November report. The city administrator, Janet Mitchell had sent out an email requesting for financial assistance to help pay off a debt they had with the Alaska Native Tribal Health Consortium whom they had purchased parts from for their water and sewer department. Kotzebue staff contacted Janet to ask about the use of the NANA Village Economic Developement grant of $55,000. Kotzebue staff then met with the NANA staff who confirmed that she had used $50,000 of those funds to help pay for the water tank fill last fall. The city administrator Janet Mitchell provided Kotzebue staff with the months of financials for the month of December and January 2014. The minutes were not complete so is requesting the entire minutes before their RUBA assessment with be updated. The administrator emailed to get further clarification on how to include revenue entities paid out directly to vendors and purchase of equipment for the city. Kotzebue RUBA provided the administrator Janet Mitchell via email information as to how this revenue needed to be classified on the monthly report and why for insurance purposes knowing the cost and type of equipment purchased and provided to the city is important.  
RUBA Activities for the Coming Qtr:
Kotzebue RUBA will continue to work with the city staff to continue to meet their RUBA essentials.
Scores:
 
Essential Indicators:
26 of 27
Sustainable Indicators:
17 of 27
Total Score:
43 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.
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.
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 realistic budget that lists all revenues and expenses for the utility and has budgeted to pay for a year's adequate fuel supply but the utility is not receiving enough revenue to cover operating expenses. RUBA staff received copies of their December and January financial report in March so are not submitted to the policy making body timely. The city used their revenue sharing paying their electric utility bill in advance for the entire year. Kotzebue RUBA has been in contact with the city who stated that they did not have any funds to receive fuel by barge this year to supply their water plant for the year so they will have to purchase it locally as needed. 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.
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 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.
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 city uses QuickBooks to track and report tax liabilities; received the return tax authorizations from IRS which showed they owe $1002.00 which the administrator provided a EFTPS confirmation that it was paid in March 2014 and they were cleared for State tax. In reviewing the Tax Lien publication, Kivalina still owes $64,634.00, 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 2014 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.
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 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 not received the completed minutes for March 2014 but see that on the monthly financial reports that meeting fees are being paid.

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.