Duluth/North Shore Sanitary District – Board of Managers

Meeting # 60

Date: January 12, 2005 0700 French River Lutheran Church

Present: Lars Fladmark, Mary Ann Sironen, Scott Smith, Clare Carpenter, Kevin Bovee, Rick Certano, Mary Frances Skala, Eric Appelwick, Scott Harder, Mel Olson, John Miller, John Bowen, Jeff Cook, Duane Herold, Russ, Smith, Joe Mihalik, Carol Surine.

Minutes to: John Bowen, Tim Strom, Scott Harder, Greg Garmer, Jeff Cook, Al Katz, Wendy Gustafson, Duane Herold , John Schifsky, Sandy Woolum, John Kessler, Duluth Township, Lakewood Township, City of Duluth, Dan Neiman, Mark Herman, Bruce Berg, Dan Jacobson, Mary Frances Skala, Carol Surine, PLAWCS, Jane Gilbert, Laurie Johnson, Sue Lawson, Kevin Holm, Don McTavish, Dick Sigel, Clare Carpenter, Larry Moon, Scott Smith, Lynn Ann Hollatz, Duluth City Council, Nelson Thomas, Kelli Boedigheimer, Nancy Larson-St. Louis County, Mel Olson, Peg Sweeney, Patti Logergren, Tom Pulse, Joe McGaver, Pete Weidman, John Thomas, Mike Mahoney, Dale Schroeder, Dan Belden, Kurt Soderberg, Johnaton Thornton, Mark Schaus, Jim Anklam, Eric Appelwick, Mike Appelwick, Wayne Parson, Mark Gottwald, Darryl Bathel, Robin Whaley, George Sundstrom, David Pierson, Yvonne Rutford, Lars Fladmark, Kevin Bovee, Rick Certano, Mary Ann Sironen

Minutes by: Carol Surine and edited by Mary Ann Sironen

Approved: Signed: Chair Secretary

Item	Discussion	Action/Conclusion
Roll Call and Election of officers	All Board members present	The Nominating Committee presented the following slate of officers for 2005: Chair - Lars Fladmark, Vice-chair - Kevin Bovee, Treasurer - Rick Certano Secretary - Mary Ann Sironen. Nominations were requested from the floor, there being none presented, it was moved by M.Sironen and seconded by K.Bovee to approve the slate of officers. Unanimously approved.
Agenda Minutes	Agenda modified and approved	Motion by S. Smith and seconded by M. Sironen to approve the minutes of 12/7/04 meeting. Unanimously approved.
Treasurer's report	· Clare Carpenter distributed the Request to Pay invoices for a Total of $45,388.56 · Bank Balance – January 31, 2005 is $518,262.42 · The bill for US Bank comes to Lars Fladmark. Clare Carpenter put in an address change so that it comes to her. · A question arose about the ongoing amount of the D/NSSD bank balance. Clare Carpenter will call our representative, Brenda Brennan, at North Shore Bank to inform her of the Board’s estimate of the D/NSSD bank balances for collateralization purposes. · Eikill and Schilling, the accounting firm hired to assume that function for the Board, will bring their summary to the February meeting.			M.Sironen moved and S.Smith seconded a motion authorizing the Treasurer to approve necessary changes to and increases and reductions in securities collateralizing our bank balance as needed. Unanimously approved. Motion by R. Certano and seconded by M. Sironen to hire the State Auditor, Wayne Parsons, to complete the 2004 audit. Unanimously approved. The cost for this is expected to be about $10,000. Motion by S. Smith and seconded by K. Bovee to pay the December invoices and approve the Treasurer’s report. Unanimously approved.
2005 Budget	Scott Harder submitted an accounting of disbursements and a projection of the costs through the end of construction. From the initial contingency fund of $600,000 there is approximately $193K remaining. If cash flow is as projected, there should be sufficient funds available to complete the project. Mel Olson is comfortable that the rest of the construction should come in at projected costs. S. Harder advises that if the project stays within the current budget, the final cost will be within the original projected amount.
Legal Issues- Litigation with S.J.Lewis	Joe Mihalik, attorney for Fryberger, described the current status of the dispute with SJ Lewis that has already been through voluntary mediation. SJ Lewis had requested additional payment in excess of $700K and asked that D/NSSD give up claims to liquidated damages. After D/NSSD rejection of that offer, SJ Lewis filed a lawsuit and D/NSSD filed a counterclaim for liquidated damages based on S.J. Lewis’ failure to meet construction schedules. The lawsuit was filed in Lake County and Mr. Mihalik is waiting on scheduling and pre-trial discovery. He thinks DN/SSD may be ordered by the court to go to mediation again. To get ready for the trial which would probably not be scheduled until the fall of this year, he prepared a Litigation Budget, based on similar cases that required about two weeks of trial time and cost about $155,000. Discussion followed: · Legal fees would not be reimbursed if DN/SSD won this case. D/NSSD can incur debt to pay a judgement. · If the court orders more mediation the parties wouldn’t be required to use the same mediator. · The level of Board involvement in the trial is uncertain. Lars was nominated as the Board representative. · Independent contractors will be used on both sides as expert witnesses. .
Legal issues continued	1. M.F. Skala reviewed some changes to the bylaws. 2. D/NSSD lists the Duluth Town Hall as its official address.		1. Bylaws will be reviewed further at the February, 2005 meeting 2. The Board suggested and E. Appelwick agreed that the new address will be: NTS, 4511 W 1^st St, #3, Duluth, MN 55807.
Updates: I&I	Following up on people who haven’t responded to their Inflow & Infiltration inspections, Mary Frances reported several certified letters were refused/returned as undeliverable		Eric Appelwick will follow up on the letters. Jeff Cook had no further report from his work on I&I.
KR-LSD	1. Mary Frances and Scott Harder reported that a developer in Knife River is asking for information on how a private system might be connected to the sewer. The KR-LSD Board has implemented requirements that will ensure payment. 2. KR-LSD has a signed agreement with WLSSD but it is still unclear whether the Larsmont portion will be included. KR-LSD has hired Matrix Soils & Systems to do some testing in Larsmont, and early reports show that there are some imminent health concerns
Easements	· M.F. Skala has sent a letter to Mr. Nisswandt regarding the board’s policy concerning sewer hook-up. He remains ‘off the grid’ and has no power. · John Miller needs an extension on his contract to complete the Nisswandt easement and others. · Miller is concerned about the grinder pump at the Rosalind Andrews property (Old Forest Inn). It has burned so there is nothing to inspect.						A motion was made by S. Smith and seconded by M. Sironen to extend John Miller’s contract to the completion of the amendments to all necessary easements. Unanimously approved.
Construction	An extension/amendment is needed for the Ayres Associates contract. This includes Mel Olson as project manager along with the field and support staff.		· A motion was made by S. Smith and seconded by M. Sironen to extend the original agreement with increased costs of $184,700. Unanimously approved. · Mel will have a completed draft of projected expenditures at the next meeting.
Public Comments	From John Bowen: There’s not enough flow through the sewer pipes in the area near Ryan Road so there is septic odor at his house.		E. Appelwick will turn on the drum scrubber, which will control odor.
NTS Report	· Eric submitted a chart of D/NSSD flows from August-November. (S. Harder wants to use these NTS charts to adjust rates if necessary.) · Eric did a sampling event for WLSSD; encountered a frozen line between the building and the probe. A larger heater is required. Carry over discussion to the February agenda. · Recertified the fire extinguishers, updated odor control units. · There are $4,182.79 receivables 31+ days outstanding. Unpaid sewer bills will be charged against property taxes. Customers with outstanding bills will receive letters explaining this and given a timeline for reply. · Responded to 6 emergency calls. · Dodges Log Lodges’ has water seeping from the ground in an area apparently unconnected to the sewer drilling causing the driveway to be wet and icy. The sewer line is in the ditch 40’-50’ away. E. Appelwick is uncertain as to fix. Carry over discussion to the February agenda. (Comment by K. Bovee: There was something similar at Schaumbergs on the north side of the road.) · Newsletter was sent out. · Scott Smith requested a legend of the house numbers on the map. Eric will get them for all Board members
Communication and Correspondence	1. M. Sironen received a letter from WLSSD requesting that D/NSSD submit their I&I Reduction Plan by 12/31/04. 2. M. Sironen received a thank-you letter from Yvonne Rutford and offered her services for any special projects that may arise.				E. Appelwick will follow up on this WLSSD requirement and the timeline. K. Bovee asked who would issue the 1099 to Yvonne. C. Carpenter said she would do it.
Old Business
Property without water and septic.	There are currently 3-4 properties without running water whose owners have asked to be included in the D/NSSD and have been assessed. At the start of the project they were told that connection as one of the original customers would be less expensive than paying the hook up fee later. DN/SSD will not extend the sewer to land that is currently vacant, but will bring a line to an existing structure. The line will be installed and the 4” pipe will stub out to the surface. The pump will not physically be installed until there is water and electricity available					A motion was made by S. Smith and seconded by K. Bovee to allow the installation of the basin. When sewer service is needed the homeowner will pay the actual costs to complete the line into the structure as well as associated hook up costs. The monthly fee of $63.00 per month will begin when flow is established. Unanimously carried.
Devon Cook issue	D/NSSD had previously offered to pay $900 to repair the damage to her house, and the bill submitted was $1400.When the proposal was made, they didn’t realize the house needed an electrical upgrade to repair it. The upgrade would not have been necessary if the sump pump hadn’t been necessary					A motion was made by S. Smith and seconded by M. Sironen to pay the additional $500.00. Unanimously carried.
John Rowray issue:	A house under construction burned, and Mr. Rowray hit an unmarked stand pipe with his snow plow. D/NSSD billed him $2500 for the damage. Mr. Rowray objected, and didn’t think that hitting the fiberglass sleeve would render the pump non-functional. He wanted to buy the stand pipe and sleeve to use for his own new house. Mel Olson said that the damaged grinder pump basin had a hole in it and the fiberglass around that tear was "punky".. Another concern is that D/NSSD is responsible for any repairs that have to be done if it did fail.					Lars Fladmark asked E. Appelwick to talk to Mr. Rowray about insurance for the grinder sleeve. Board members expressed concern that our action here will be setting a precedent for future claims for damage.
New Business	ACEC (American Council of Engineering Consultants) is giving D/NSSD and Ayres Associates a joint award for the D/NSSD project at their dinner meeting on January 21. Lars Fladmark and M. Sironen have indicated that they would attend as representatives of the Board. The cost of the dinner is $70 each and could be reimbursed by the Board. S. Smith would be supportive of reimbursing them for the dinner, but suggested DN/SSD hold off any action until the next meeting when all members are present.
Meeting adjourned 0930. Next meeting is February 9 at 0700 at French River Lutheran Church.