Quarterly Report: 2013, July - September (Q1), Diomede

Community:
Diomede 
Staff:
Iura Leahu  
DCRA Regional Office:
 
Gov't Type:
Second Class City 
Borough:
 
Agreement?
No 
Agreement Date:
 
Entity:
City of Diomede 
Population:
107  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
10/31/2012 
Community Sanitation Overview:
The City of Diomede and Diomede Joint Utilities are responsible for the management of a seasonal washeteria serviced by a septic system and seepage pit, the Little Diomede Water System with a water treatment plant and 434,000-gallon steel water storage tank/watering point. The water tank is fed by water drawn from a mountain spring that is then filtered and chlorinated at the water treatment plant prior to being stored in the tank. The tank capacity is usually insufficient in the spring each year and residents are forced to melt snow and ice for drinking water. All homes use honey buckets, the waste of which is dumped on the beach in the summer and on pack ice in the winter. The local clinic is connected to the washeteria septic system. In September 2011, CRW Engineering Group, LLC prepared a Business Plan for Water Storage Tank Improvements. The City of Diomede, with funding and technical assistance through the Alaska Native Tribal Health Consortium (ANTHC), plans to construct an additional 350,000 gallon treated water storage tank. The tank will provide additional water storage throughout the winter and spring so that the community does not run out of water.  
RUBA Status & Activities This Qtr:
This quarter the city council managed to hold regular city council meetings. The city council is also the utility board of Diomede Joint Utilities (DJU), and as such it should oversee Little Diomede Water Supply Water System (LDWSWS). For the last several years, the regular monthly city council meetings have been irregular at best and often no quorum was present to hold such meetings. As a result, DJU has not been able to hire a permanent manager and utility clerk. This quarter, Nome RUBA staff maintained frequent telephone contact with the city administration, city employees and residents of Diomede. RUBA staff assistance ranged from personnel policies to fuel, elections and city finances. During two days, RUBA staff also worked with the city administrator on preparing the fiscal year 2013 city budget, reviewing the Certified Financial Statement (CFS) for the 2011 fiscal year and submitting CFS to the Community Aid and Accountability section of the Division of Community and Regional Affairs.  
RUBA Activities for the Coming Qtr:
Nome RUBA staff will continue to provide onsite and offsite management assistance to the city council and utility staff at the their request.
Scores:
 
Essential Indicators:
7 of 26
Sustainable Indicators:
8 of 27
Total Score:
15 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
Little Diomede Water Supply Water System (LDWSWS) is part of the Diomede Joint Utilities. Since August 2011, the Diomede Joint Utilities (DJU) has not had a utility manager and/or utility clerk. As a result, DJU has not prepared its fiscal year 2013 budget and/or LDWSWS. The City of Diomede has not adopted the fiscal year 2013 budget either. The current financial situation of the utility is unknown. Neither city staff nor utility staff has provided Nome RUBA staff with monthly financial reports showing the year-to-date revenues and expenditures. Nome RUBA staff is not aware of whether the utility is current in paying its bills. The city administrator informed RUBA staff that the Bureau of Indian Affairs, which typically assists the city with the purchase of fuel, has agreed to deliver sufficient fuel to the community. The city administrator reported that the City of Diomede received about 62,000 gallons of diesel fuel. DJU will use 45, 000 gallons, the city about 5,000 gallons and the local store, which is run by the local IRA, will use about 12,000 gallons. The city paid $50,000 owed to BIA for last year and will put $5,000 towards the current bill.

Accounting Systems

Essential Indicators
Answer Question
No The utility has adopted a collection policy and actively follows it.
No 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.
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
Currently, there is no utility manager or utility clerk to bill customers. However, according to the city administrator, part-time employees have send bills out to customer from time to time. The prior utility manager used QuickBooks to keep track of accounts receivable, payable and payroll records of all of Diomete Joint Utilities financial records. Financial reports used to be done using Excel spreadsheets.

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
Diomede Joint Utilities (DJU) uses its own Employer Identification Number (EIN) for IRS and State's Employment Security Division deposits and reports. On October 3, 2012, the Internal Revenue Service's Taxpayer Advocacy Office reported that DJU has not filed 941 for the second and third quarter for 2012, as well as for the 3rd and 4th quarters for 2011. IRS reported that DJU has not made deposits for the second and third quarter of 2012. No recorded Notice of Federal Tax Lien against DJU has been reported. The Division of Employment Security Tax reported that DJU is not currently compliant with filing Quarterly Contribution Reports and making deposits. DJU did not submit a quarterly tax report for the second quarter in 2010 and the third and fourth quarter in 2009.

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.
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 the city administrator and the Division of Workers' Compensation, the city has purchased a workers' compensation insurance policy through the Alaska Municipal League Joint Insurance Association. The policy is valid until June 2013 and covers work-related accidents and occupational diseases as per Alaska statutory limits. The utility uses the city's personnel policies, which are part of the Diomede Code of Ordinances. The policies outline the hiring and evaluation process, conditions of employment, a probationary period, disciplinary and grievance procedures, and general workplace expectations. Written job descriptions for all utility positions are included in the Code of Ordinances. There is no evidence that DJU or the city follows its written personnel evaluation process, uses its written hiring process or whether DJU or the city has personnel folders on every employee and follows the probationary procedures outlined in the Code of Ordinances.

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.
No The utility has an adequately trained manager.
No 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.
No The utility complies with the open meeting act for all meetings.
Organizational Management Comments
Chapter 36 of the Diomede Code of Ordinances outlines the rules and policies of the public utilities. The city council 'reserves unto itself the power and authority of approve or disapprove by ordinance all budgets, rates, and the acquisition or disposal of real property.' Chapter 36 also provides that the Diomede Joint Utilities Board will manage and operate all utilities owned by the City of Diomede. At this time, the city council is the acting board. The city council has not met as required and has not always complied with the open meeting act for all meetings. Chapter 36 provides that the board shall appoint a manager of the public utilities. However, as of August 2011, DJU has not had a manager. The city office was not able to hire a replacement and DJU does not have an adequately trained manager and bookkeeper. By ordinance, the manager prepares and manages the utility budget, oversees the water treatment operator, power plant operator, tank farm operator and assistant operators. He also prepares and provides monthly manager and financial reports to the city council.

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
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.
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.
No 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.
No The utility maintains a critical spare parts list.
Operation of Utility Comments
According to the Division of Water Alaska Certified Water/Wastewater Operator Database, the primary water treatment plant operator does not have a certificate and does not have the Continuing Education Units (CEU) to meet the requirements. The operator attended a boiler course in Nome in March 2012. He attended a utility certification course in Fairbanks in April and October of 2011. The operator did not pass the exam but he is working towards taking another exam in Nome. RUBA staff cannot confirm whether the operator provides status reports to the manager/city council on a routine basis. The utility has not completed its 'Consumer Confidence Report'. The utility system has been on the Significant Non-Complier list for many years. Due to remoteness, the water system is late in sending out water samples and the water exceeds the Nitrate Maximum Contaminant Level and Arsenic Running Annual Average of Maximum Contaminant Level. The City of Diomede has a small water system, which uses only one treatment chemical to treat water.