Quarterly Report: 2007, July - September (Q1), Wales

Leroy Seppilu  
DCRA Regional Office:
Gov't Type:
Second Class City 
Agreement Date:
City of Wales 
Assessment Status:
Assessment Date:
Exp Date:
Last Updated:
Community Sanitation Overview:
Two new groundwater wells have been drilled; a pumphouse and watering point enclosure are needed. Currently, water is derived from Gilbert Creek during the summer, and residents haul treated water from a 500,000-gal. Storage tank at the washeteria. Some use untreated water from Village Creek. Almost all residents use honeybuckets, and very few homes currently have plumbing. A honeybucket haul system is in place. The school, clinic, and city building are served by piped water. There are two septic systems - one for the school and a second for teacher's housing, the clinic, and the city building. A Master Plan to implement a piped system has been completed. There is no permit for the landfill. Village Safe Water is applying for sanitation grants for the community to upgrade the washeteria 
RUBA Status & Activities This Qtr:
The city has not complied with the Environmental Protection Agency's Administrative Order to comply with the U.S. Safe Drinking Water Act. The city has been on the Significant Non-Compliance list (SNC) for the last three years. EPA is now threatening to fine the city $27,500 - $32,500 a day for non-compliance. Nome RUBA staff had encouraged the mayor and city council to hire the former mayor who is fairly proficient with paperwork to make an action plan using the Requirement section of the Administrative Order as a guide. After the municipal re-election in April, a new mayor was appointed and he submitted his resignation a couple of months later after he found out that the city was having major financial problems and was on the significant non-compliance list with EPA. The washeteria's boiler/heater backup is in need of major repair, but the city has been able to use one of its grants from the State to purchase equipment and parts for the washeteria. The city had also requested an advance from the grants to pay for some parts and equipment for the washeteria, but the city's bank account has been deeply in red. The city deposited the grant money into its account but was not able to use it for its intended purpose as it was absorbed by the negative bank balance. The city still owed ANTHC's parts/equipment store for at least $3,800. There are other vendors owed unknown amounts of money from previous purchases made for the washeteria. 
RUBA Activities for the Coming Qtr:
Nome RUBA staff and Nome Region RMW are setting up a meeting for Oct. 11th with the Wales city council and IRA council to discuss the water treatment issue. EPA in Seattle will participate via teleconference and DEC/VSW engineer, DEC/DEH (from Fairbanks) have been invited to attend the meeting. During this same trip, RUBA will meet with the mayor to review FY '07 budget and other financial issues. RUBA will spend at least two days for this purpose.
Essential Indicators:
2 of 27
Sustainable Indicators:
0 of 27
Total Score:
2 of 54


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.
No 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 new city council decided not to start the bingo games and pulltab sales as recommended by RUBA staff. The earnings were to be used to run the general government and pay for washeteria operations as it has always been operated in red. The city has not passed the FY '07 budget yet despite reminders by Nome RUBA. Once it's passed and the FY '05 Certified Financial Statement completed and PILT Program participation resolution passed, the city will be eligible to receive close to $11,000 in PILT funds. The city is also eligible to receive $40,000 in Municipal Energy Assistance Program funds when the MEAP application is completed and submitted. The mayor has been slow in completing the required forms to participate in the programs.

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.
No 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 new mayor is not sending out trash and honey-bucket haul monthly bills as she is too busy doing other city business. The city does not have a city clerk. No one is accepting the city's checks in the community because the businesses know they will bounce. There are an unknown number of checks floating around in the community issued by the previous city clerks. The mayor, who is paid by the hour, does not have basic accounting skills so the city's bank accounts are not reconciled.

Tax Problems

Essential Indicators
Answer Question
No 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.
No 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 still has not submitted quarterly tax reports or made payroll tax deposits to either IRS or Employment Security Division. There are substantial amounts owed to IRS and ESD for past tax liabilities.

Personnel System

Essential Indicators
Answer Question
No 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.
No 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.
No The utility provides training opportunities to staff as needed and available.
Personnel System Comments
The new mayor is working as a paid employee of the city since the city clerk was hired and then quit because of lack of funds to pay her. The first washeteria operator quit after a dispute with the mayor over parts that were needed to replace parts and supplies for the washeteria boiler. A retired operator was rehired but has not submitted the required water samples to EPA or DEC for testing.

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.
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.
No 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
The mayor had asked Nome RUBA staff to provide utility management training for the new city clerk that was hired. But the new clerk quit because she wasn't being paid on regular basis. The AVEC electric plant operator was also not being paid due to lack of funds. However, the mayor has been paid on regular basis. The city council has been meeting at least twice a week to deal with the city's issues ex

Operation of Utility

Essential Indicators
Answer Question
No The utility operator(s) are actively working towards necessary certification.
No 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.
No Utility facilities have not suffered any major problems/outages due to management issues that are unresolved.
No 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.
No 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
The city's washeteria and water treatment plant has been under Significant Non-Compliant list for a very long time. Nome RUBA staff has been trying to work with the current mayor to hire a competent utility operator. The city did rehire a retired operator, but he does minimal work and has not sent in the required water samples for tests to EPA or DEC.