Quarterly Report: 2011, April - June (Q4), Diomede

Iura Leahu  
DCRA Regional Office:
Gov't Type:
Second Class City 
Agreement Date:
City of Diomede 
Assessment Status:
Assessment Date:
Exp Date:
Last Updated:
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:
Throughout this quarter, Nome RUBA staff worked closely with Diomede Joint Utilities' manager and city officials. The city resolved the financial issues related to ordering fuel and an order to purchase fuel for the fiscal year 2012 is in place. The city expects the arrival of the barge in the end of July or beginning of August. RUBA staff also assisted the city in preparing and submitting the fiscal year 2011 budget and the Community Revenue Sharing application for fiscal year 2010. Other assistance included ordinance drafting, legal research, and grant advise and research. In April of 2011, the utility manager attended and completed a 32-hours Financial Utility Management class sponsored by the RUBA Program.  
RUBA Activities for the Coming Qtr:
RUBA staff continues to provide telephonic assistance to the city council and utility manager. If the passenger air service will be available Nome RUBA staff will attempt to travel to conduct an onsite RUBA assessment this summer or early this fall.
Essential Indicators:
27 of 27
Sustainable Indicators:
24 of 27
Total Score:
51 of 54


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 council that acts as the utility board has adopted the fiscal year 2011 budget in May of 2011. The city administrator is preparing the fiscal year 2012 budget. However, the utility manager has prepared the utility budget and submitted it to the city council. As of May 31, 2011, the utility has a balanced budget and operates within the budgeted funds. According to the year-to-date financial statements, as of May 2011, the administration and finance department of the Diomede Joint Utilities had a positive balance of $44,985; the electric department had a positive balance of $108,820; the fuel department a positive balance of 8,458. The electric department collected revenues of $215,389 between May 1, 2010 and May 31, 2011. All of the departments have been subsides by the city council by using other funds such as state, non-profit and for-profit agencies grants. According to the utility manager, the monthly financial reports are prepared and submitted to the city council. The city council allocated $240,000 to the Diomede Joint Utilities (DJU) to purchase fuel for this fiscal year. According to the utility manager, the DJU has a year's adequate fuel supply.

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 May 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 June 28, 2011, the Division of Employment Security Tax reported that DJU is currently compliant with filing Quarterly Contribution Reports and making deposits. 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 May 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
Worker's compensation insurance is provided by the Alaska Municipal League Joint Insurance Association. A July 7, 2011 check of the Division of Worker's Compensation website confirmed that the policy is in effect. 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.
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 council acts as the utility board for the city-owned utilities. This coming municipal election, there will be five city council vacancies. Due to some city council members being absent, the utility board was not as active as it should have been during the fiscal year 2011. However, this quarter, the city council has had several meetings and has made some progress in tackling the issues related to the city and its utilities. The utility manager oversees Diomede Joint Utilities, which includes the eclectic, water and sewer and fuel management utility. 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
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
The water treatment plant operator attended a utility certification course in Fairbanks in April of 2011. He did not pass the exam but he working towards taking another exam in Nome by the end of this summer. 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. Diomede 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.