Quarterly Report: 2011, January - March (Q3), 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:
144  
Assessment Status:
 
Assessment Date:
 
Exp Date:
 
Last Updated:
5/4/2011 
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, 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. The proposed improvements will upgrade the water treatment plant and complete the construction of a new water storage tank next to the school. 
RUBA Status & Activities This Qtr:
The RUBA Program has filled the vacant RUBA staff position in December of 2010. RUBA staff has maintained frequent telephonic and facsimile contact with the city administrator and the utility manager since January of 2011. Nome RUBA staff provided technical assistance ranging from local government elections, amending of code of ordinances to financial, budget and interdepartmental borrowing. For example, RUBA staff assisted the city in creating monthly financial reports, payroll and W-2 reporting to comply with the tax requirements. The city's operations have been affected by a high personnel turnover and multiple city council resignations. However, the city administrator has returned to Diomede and her return has had a positive effect on the operations of the city office. If the weather conditions permit, a RUBA travel is scheduled April 25-28, 2011 to complete an on-site RUBA assessment.  
RUBA Activities for the Coming Qtr:
RUBA staff continues to provide teleponic assistance to the city council and utility manager. If the weather conditions permit, a RUBA travel is scheduled April 25-28, 2011 to complete an on-site RUBA assessment. RUBA staff will also assist the city in adopting and submitting the FY2011 and FY2012 budgets. In order to receive FY2011 and FY2012 Community Sharing Revenue funds, RUBA staff will help the city to gather the necessary financial information to submit the application to the Division of Community and Regional Affairs. RUBA staff will also assist the city to codify the city ordinances.
Scores:
 
Essential Indicators:
26 of 27
Sustainable Indicators:
25 of 27
Total Score:
51 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.
Yes 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.
Yes YTD revenues are at a level equal to or above those budgeted.
Yes 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
The city of Diomede did not adopt and submit a copy of the approved budget for the fiscal year 2011 to Department of Commerce, Community and Economic Development. The city failed to submit the Community Sharing Revenue application for the fiscal year 2011. However, Diomede Joint Utilities has adopted a separate budget for the fiscal year 2011. The utility manager submits monthly financial reports (MFRs) to the city council. The reports compare actual year-to-date revenues and expenditures. RUBA staff has received a copy of MFR for the month of February 2011. The MFR indicates that the utilities' revenues exceed expenditures by a large margin. According to the most recent Status Report of Diomede Joint Utilities Electric Fund (February 28, 2011), the Fund shows that revenues surpass expenditures. The utility manager indicated that the utility has sufficient fuel to last until this summer when fuel will be delivered. The fuel is barged in once a year. The utility manger reported that the utility has a past due bill of over $100.000 to the Bureau of Indian Affairs fro the fuel credit. However, the city council is aware of the past due amount. The city council is confident that the city will provide sufficient funds to pay off the amount due before next fuel order. The city council will also allocate sufficient funds to purchase fuel for the next year by using money received from the Community Revenue Sharing (FY2011 and FY2012) and Norton Sound Economic Development Corporation (NSEDC) Community Benefit grant. The utility does not have a line item for repair and replacement expenses in the utility budget. According to the utility manager and the city administrator, the manager has provided written managerial report on the utility at the regular monthly meetings. The February 2011 monthly financial report indicates that the utility is on track with the budget and no budget amendments are needed. The utility manager has very strong knowledge of the utility's finances and makes comprehensive monthly financial reports to the city council. The utility runs and provides local electricity, water treatment, water sales to the local school and a washeteria.

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 long-time utility manager is on advanced level with Quickbooks Pro use. All of Diomete Joint Utilities financial records are kept using QuickBooks. Financial reports are done using Excel spreadsheets. They are complete and comprehensive. According to the utility manager and the city administrator, the utility billing and collection procedures are included in the utility ordinance. Monthly bills are sent to customers. Delinquent customers receive letters with information about the steps to collect on delinquent amounts and possible disconnects. The utility uses both QuickBooks and Excel to track accounts receivable and payable. As of February 2011, the Financial Status Reports of the Diomede Joint Utilities indicated that the Fuel Management, Administration and Finance, Water and Electric Funds list the year-to-date payroll liabilities.

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
Diomede Joint Utilities (DJU) uses its own Employer Identification Number (EIN) for IRS and State's Employment Security Division deposits and reports. On April 4, 2011, the Division of Employment Security Tax reported that DJU is currently compliant with filing Quarterly Contribution Reports and making deposits. In fact, DJU has a credit of $630. However, DJU did not submit a quarterly tax report for the second quarter in 2010 and the third and fourth quarter in 2009. RUBA staff does not have tax information provided by the Internal Revenue Service at this time. However, according to the monthly financial reports, DJU has made payroll payments as of February 2011.

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
The utility provides a treated watering point for the community members, a washeteria, electricity, and has a full time utility manager. The utility uses the city's personnel policies. All utility personnel are hired by the city council and supervised by the utility manager.

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 acts as the utility board for the city-owned utilities. This coming municipal election, there will be five city council vacancies. although the election may be delayed due to the fact that the city clerk is stuck in Wales until the next available flight to the Island.

Operation of Utility

Essential Indicators
Answer Question
No 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.
Yes 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".
No 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
According to the Environmental Program Specialist assigned to Diomete, the water system has not had a certified utility operator for a while. 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 Natrate Maximum Contaminant Level and Arsenic Running Annual Average of Maximum Contaminant Level. Diomete has is a small water system, which uses only one treatment chemical used to treat water. The utility provides limited utility services to the community as it is very isolated and hard to reach community.