Quarterly Report: 2014, April - June (Q4), Nikolai

Roberta Eleazer  
DCRA Regional Office:
Anchorage regional office 
Gov't Type:
Second Class City 
Agreement Date:
City of Nikolai 
108 2013 DCCED Certified Estimate 
Assessment Status:
Assessment Completed 
Assessment Date:
Exp Date:
Last Updated:
Community Sanitation Overview:
Nikolai is located in Alaska's Interior Region, 46 air miles east of McGrath. All 47 households and facilities in the community use individual wells and all but two units are fully plumbed. 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. 
RUBA Status & Activities This Qtr:
RUBA staff traveled to Nikolai twice during this quarter. RUBA staff and the RUBA program’s QuickBooks contractor made an on-site visit in early May to train the new city bookkeeper. On May 20, RUBA staff traveled again to Nikolai to help the employee reconcile the monthly bank statement and to check payroll taxes. Once on-site, RUBA staff assisted in locating 14 2013-14 receipt books with gas, diesel fuel, washeteria, and electricity revenues and trained the bookkeeper on recording cash and credit card sales. The receipts were compiled by class and month for the certified financial statement and the FY15 budget. RUBA staff provided assistance to the Nikolai city council and city clerk on procedures for a special election this quarter, as well. The city council also updated RUBA staff regarding a solid waste management plan for the city. Presently, the city does not have a solid waste plan or ordinances regarding how waste is to be managed. The open landfill is located on wetlands near the river and there is some concern about erosion and leachate contaminating the river and ground water. Nikolai utilities policy addresses wastewater and the landfill. This quarter the city clerk requested clarification on how to conduct a land transfer or sale of land for the new clinic, which is being built this summer. After a review of site control, it was determined that the land was city land and the council voted to lease the land. The tribe declined a lease option with the city and relocated the proposed site. The mayor attended his first RUBA utility management training in Fairbanks this quarter and stated that he learned a lot and is ready to become a stronger community leader. The city is remodeling the lodge to provide housing for contractual staff who are often in the community. The lodge, whose rental revenues subsidize sanitation services in the community, has been painted. 
RUBA Activities for the Coming Qtr:
RUBA staff will complete the certified financial statement for FY13 and facilitate the development of the FY15 budget. RUBA staff will also continue to provide assistance in improving the essential and sustainable indicators. RUBA staff believes the development of the FY15 budget and on-site training of the newly-hired bookkeeper will provide improved financial management of the utility and correct payroll tax reporting. Further, RUBA staff will continue to work with the IRS tax advocate on payments of past due taxes and filing reports, provide assistance in regards to the upcoming special election, and develop a draft ordinance for the management and policies regarding the new landfill.
Essential Indicators:
20 of 25
Sustainable Indicators:
16 of 27
Total Score:
36 of 52


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.
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.
Yes A monthly manager's report is prepared.
No Budget amendments are completed and adopted as necessary.
Finances Comments
RUBA QuickBooks contractor and RUBA staff have completed the FY13 Certified Financial Statement and are in the process of developing the FY15 budget. All revenues and expenses have been classified and profit and loss by class reports have been supplies. Monthly financial reports will be provided for the monthly council meetings. Nikolai's FY14 budget was adopted by the city on July 9, 2013. 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 however, the new bookkeeper will be tasked with providing written financial reports.

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.
Yes 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 does not have an adopted collection policy for the wastewater utility because they do not charge the customers. They do, however, have an collection policy that they actively and consistently enforce for the electric and fuel utilities; these utilities subsidize the wastewater utility. The city uses the AMPY system for payments. The city utilizes QuickBooks for accounts receivable, accounts payable and payroll. 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.

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.
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
Tax clearance from the Alaska Department of Labor dated June 20, 2014 has been granted. The City of Nikolai has unresolved IRS tax payments and penalities from 09/2012 through 09/2013. There is no record of a lien in Division of Community and Regional Affair’s publication Jan-Feb 2014 Lien Watch Report.

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.
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.
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 with Alaska Municipal League Joint Insurance Association (AMLJIA) as of December 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.
N/A 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.
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 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. Certification of the utility operator is not required. All 47 households and facilities use individual wells. The utility extended the bookkeeper hours to 30 hours per week. RUBA QuickBooks contractors and RUBA staff provided 24 hours of on-site training for the new bookkeeper. The City of Nikolai has adopted the necessary ordinance to give it the authority to operate and the council moved to accept the City of Nikolai Organizational Chart. The Nikolai City Council meets as required and complies with the Open Meeting Act for all meetings although the council is not meeting regularly.

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
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.