CRANE LAKE WATER & SANITARY DISTRICT (CLWSD)

BOARD OF MANAGERS’ REGULAR MEETING

December 7, 2005 – 7:30 P.M.

GROOMER GARAGE

The meeting was called to order by Chairman Rob Scott at 7:30P.M.

Members present:  Managers Bud Bystrom, Darrell Scott, Rob Scott, and Michael White.

Members absent:  Deena Congdon

Also present: Jim Pucel of RLK-Kuusisto, Kenny Winkler and Jim Pohlman of NTS, Clerk Jo Ann Pohlman, a reporter from the Timberjay, and 13 members of the community.

BUSINESS:

Opening Comments:  Chairman Rob Scott announced that Manager and Treasurer Deena Congdon had resigned from the Board of Managers after 10 years of dedicated service to the project and community.  Her contribution to the Board will be greatly missed.  A Flood Damage Corrective Action start-up meeting was held on November 16, 2005 to address the damages and repairs needed following the July flooding incidents.  The Work Plan, Project Funds, Levy and ESA would be topics of discussion at the meeting. The 2006-7 rates would be discussed with no decisions being made.

11/2/05 Action Items Review:  Chairman Scott reviewed the action items from the previous meeting.

A motion was made by D. Scott, supported by M. White, to approve the minutes of the Regular Meeting of November 2, 2005. Motion carried.

The correspondence was presented to the Board. A letter from Paul Hamblin was read as requested, addressing the Financial Plan and Rate Schedule.  A motion was made by B. Bystrom, supported by D. Scott, that the correspondence, including an E-mail from S. Harder dated November 9, 2005 be placed on file and acted upon as required.  Motion carried.

The Monthly Financial Statements were sent to the Board for review just prior to the meeting. Approval of the Treasurer’s Report was tabled until the next meeting. R. Scott made a motion nominating M. White to act as Treasurer until the January elections.  D. Scott seconded the motion. The motion carried. J. Pohlman presented the invoices on hand for payment approval.  A motion was made by B. Bystrom, supported by M. White, to approve payment of the following invoices:  Administrative:  RLK-Kuusisto – $757.50; Glorvigen – $4,000.00; Costin Group $500.00 & $500.00.  Plant Operations:  Hawkins – $559.95; Lake Country Power – $27.75 & $541.94; A-1 Services – $1,575.00, RLK-Kuusisto – $1,135.25. Flood Related:  NTS – $1,248.00, $1392.00, & $1,594.50; RLK-Kuusisto – $588.95, $745.00, & $817.75.  Gold Coast Project:  Cope & Peterson – $3,668.75; Glorvigen – $3,500.00; EFG – $1,250.00; Architectural Resources – $475.00; RLK-Kuusisto – $560.00;  USDA-RD Loan Payment – $15,080.55.  With payment of the following upon receipt of further information from NTS:  NTS – $4,004.25 & $1,248.00; Quality Flow – $2,069.51, $9,159.00 & $379.50.  Motion carried.  M. White indicated that November cash receipts will require adjustments between affected accounts.

RLK/NTS – Treatment Plant Update and Corrective Actions

• Insurance Claim Status:  Initial insurance claim checks were received with a $25,000 additional prepayment provided for corrective work to begin.  Some flooding bills have been paid.  Still forthcoming will be payment for NTS invoice No. 05-06290 and July, August, & September costs for daily on-site inspections.  Also forthcoming will be payment for RLK flood related charges on invoices 45 and 46.  Other invoices will be submitted as received.
• Corrective Action Meetings:  An initial Corrective Action meeting was held on November 16^th.  Minutes of that meeting were provided by RLK and R. Scott.
• Work Plan/Project Forecast:  J. Pucel reviewed the updated Work Plan and Project Forecast with the Board. A decision on plant enhancements was tabled until all outstanding project items are completed and any unanticipated items are identified.

RLK-Kuusisto Project Status Report

• Wells:  Petersen Drilling performed the liner installation simulation on the Zullick well, which resulted in a lack of supply from the well.  A letter will be written to Gayle Zullick by RLK asking for approval to hydrofrack the well.

• Capital Asset Plan:  RLK will complete the plan after plant improvements and enhancements are completed.  They will work with Scott Harder of EFG on the plan.

CLWSD Meeting Minutes 12/7/05

RLK-Kuusisto Project Status Report (Cont.)

• M. White asked about a copy of a letter to RLK received from Cope & Peterson regarding the Adams’ property easements.  J. Pucel responded that there are some questions on the Adams’ easements that need to be addressed with Cope & Peterson.
• Engineer Services Amendment #5:  The Board agreed that the decision at the November meeting to address the Amendment upon completion of the Capital Asset Plan still stands.  Resolution of easement questions must also be received.  J. Pucel stated that the Allen McKie easement work also needed to be done, as the grinder was installed after project work.  Also requiring is resolution related to the rock pile stored on D. Adam’s property.

NTS Project Status Report

• K. Winkler reported that the sand filter will be run in winter operation with two zones and continuous pumping; all standards are being met at the plant.
• Pipeline Locations:  NTS is checking with other entities to determine the best procedure for the CLWSD.
• Preventive Annual Maintenance Plan:  Inventory of equipment with O&M manual review is completed.  Plan completion is scheduled for December.

• Bergemann IPS Replacement:  The IPS should arrive soon.  J. Pucel is working with Wagner on installation.
• Hoff IPS Damage:  The contractor has ordered a replacement basin from Quality Flow.
• Grinder Winterizations:  Winterizations are completed for the year and notification letters have been sent.
• Preventive Annual Maintenance Plan: NTS will complete the plan this month.

• Two replacement recirculation pumps were received.
• Installation of Effluent Dissolved Oxygen controller and sensor.  Received data retrieval palm in November – completion December.
• Annual main lift station service with pumping of accumulated sludge completed.  Annual service of pumps and controls by Quality Flow completed.
• Winterization of the treatment plant is completed.
• Five more manholes need to be inspected.
• B. Bystrom asked that curb stop locations be identified.  RLK will provide that information.

EFG – Report

• 2006/2007 Forecast & Rate Review: The report from Scott Harder was not received by everyone on the Board. The Board agreed that more needs to be done before decisions can be made.  M. White indicated his concern related to the forecasted process flow volumes, and other assumptions used by S. Harder. Assumptions need to be validated before going forward.

Eastern Service Area

• ESA Outline:  M. White is working on an ESA Outline for the Board to move forward.  To work on the ESA project, the plant capacity and rate structures must be agreed upon.  Options discussed for the ESA have been holding tanks and a management plan.  The Town Board of Kabetogama recently hired a consultant related to an Environmental Subordinate Service District.  M. White suggested that the CLWSD should consider the District being under the Town Board as two separate groups, one for the WSA and another for the ESA. This would provide voter participation in Administrative Levy decisions.

Capacity Reservation Fees

• The subject has been discussed in the past with no decision to conclude at this time. M. White stated the Board appears to have given away 42 EDU’s with no related conditions.

Administrative Budget/Levy

• M. White stated that there is $70,000 to $75,000 anticipated 2005 cash balance for 2006 with $50,000 forecasted in expenses; which would leave approximately $25,000 until July 2007, when first-half levy money is received.  M. White recommended that the levy remain at $1,000 as submitted to the County in September.  A motion was made by M. White, supported by B. Bystrom, that the levy amount remains at $1,000 for 2006.  Motion carried.

CLWSD Meeting Minutes 12/7/05

Meeting Location

• M. White communicated with Roger Clapp of RD regarding accessible buildings in the Crane Lake area for meetings, explaining that the current arrangement was not suitable.  A recommendation was made that the meetings be held at the Crane Lake Chapel Fellowship Hall as before and accessibility adjustments be made within financial means.  A motion was made by M. White, supported by D. Scott, to return to the Fellowship Hall and approve expense for the assessment of the Chapel to provide the transition plan required by Rural Development. The work for the assessment to be coordinated by RLK.  Motion carried.

S. McKie Rock Issue

• RLK contacted S. McKie following the November CLWSD Board meeting asking him to contact the Town Board regarding the rocks in the right-of-way on Hilltop Road near the McKie property and the Adams’ property.  Stu and Mary McKie’s letter of December 1^st states that he did communicate with representatives of the Township, St. Louis County Planning and Zoning, Law Enforcement and a St. Louis County Right-of-Way Engineer on the subject.  They understood that the Township did not own the road.  A motion was made by M. White, supported by B. Bystrom, requesting that RLK and Cope & Peterson review the issue and develop a response to the McKies.  Motion carried.

Cerkvenik Contract

• Mr. Cerkvenik’s efforts to retain funding for the ESA were not successful. The congressional earmark request for $850,000 was not approved in the water and energy appropriations bill; however, reapplication can occur in 2007.  This would be done in March 2006.  Mr. Cerkvenik recommended that his contract with the CLWSD be suspended until the Board would need his services again.  A motion was made by M. White, supported by D. Scott, to suspend Mr. Cerkvenik’s contract by letter and ask that he be available on an as-need basis.  Motion carried.

Other Business – None

Action Item Summary

• Easement, Survey Pin, Rocks in Right-of-Way (RLK with Cope & Peterson)
• Late Fees (M. White & J. Pohlman)
• Meeting Location (RLK transition plan)
• Advisory Committee Notice (M. White & J. Pohlman)
• Gopher State One Call procedure (NTS)

PUBLIC COMMENT

Paul Hamblin presented the following questions.  M. White attempted to explain the Board’s actions to date related to Mr. Hamblin’s questions.

It appears from the financial statements of the CLWSD that the yearly special assessment levy, hookup fees and a portion of the base charge that were to be used for debt servicing, have been used to cover operating expenses.  Won’t this require an additional increase in rates to recover these monies?

Along the same lines, it appears that the prepaid special assessments have been used for other items rather than debt servicing.  Won’t this affect the rate increase?

Based upon my limited information, it would appear that a substantial rate increase will be required resulting in a doubling of the monthly user rates from 2005.  Does that appear to be a reasonable assumption?

If the Board was aware of the lack of revenue based on flow as early as February 2005 and had flow information presented in June of 2005, why is it that in December of 2005 there is still no new rate structure?

Is it your position that a proportional rate structure on volume is the best solution to solve the imbalance in the current rate structure?

Is it your opinion that the current financial plan is lacking and does not represent the interest of the community above all other?

CLWSD Meeting Minutes 12/7/05

PUBLIC COMMENT (Cont.)

Should the Board consider looking at other sources for outside expertise?

Do you have any explanation as to why the Board has been so slow or not acted at all on issues such as plant capacity, reservation fees, rate structure, and district procedures?

Bill Congdon indicated it was his opinion that process flow was the proper measurement of system operating expenses but the original EDU’s were a proper measurement of potential capacity for each property and should be used in allocating the long-term debt.

Rod Crain felt there should be an Impact Fee for developments to help cover expenses.  Bill Congdon felt it was more important to encourage new business by not having fees.

There being no other business the meeting was adjourned at 9:50PM.

J. Pohlman, Clerk

NEXT MEETING:            JANUARY 4, 2006 AT THE CRANE LAKE CHAPEL FELLOWSHIP HALL AT 7:30 P.M.