July

							                                Big Lake Area Sanitary District
                               Monthly Board Meeting Minutes
                     July 11, 2011, 3:00 PM @ Sawyer Community Center


I.     Call to Order and Roll Call
       Chairman Rennquist called the meeting to order at 3:00 PM.

       Present:
       Rocky Rennquist, Chair
       Gary Harms                             Nancy Schuldt, Recording Secretary
       Wayne Dupuis                           Deb Gellatly, Accountant
       John Peterson                          Frank Yetka, Attorney
       Philip Johnson

       Absent



       Guest
       Kurt Besser                            Butch Michaud
       Kathy Michaud                          John Frederickson
       Dave Otterson                          Cliff Grindy
       John Fryc                              Chris Wagner
       Dick Rollefson                         Del Prevost
       Robert Westerlund                      Carol Nelson
       Carl Scharfe, MSA                      Frank Nelson
       Pete Weidman, MSA                      Dennis Peterson, FDL Legal
       Jim Owen, MSA                          Sean Copeland, FDL Legal
       David Wierzba, MSA


II.    Approve Agenda
       Motion (Dupuis/Johnson): To approve the July 11, 2011 agenda. Motion passed. G.
       Harms inquired about the nature of the “stipend adjustment” agenda item; R. Rennquist
       responded that it referred to attendance criteria for receiving full meeting stipend.

III.   Approve Minutes
       Motion (Johnson/Harms): To approve the June 13, 2011 board meeting minutes as
       recorded. Motion passed.
       Motion (Harms/Dupuis): To approve the June 29, 2011 special meeting minutes as
       recorded. G. Harms inquired if the change he requested had been made; it had. Motion
       passed.

IV.    Treasurer’s Report/Payment of Bills (D. Gellatly)
       D. Gellatly presented the monthly bank statement from CornerStone Bank, and the claims
       and invoices to be paid, totaling $5,293.06. Because BLASD received a Carlton County tax


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     payment, there was no need to move funds from savings to checking to maintain a minimum
     balance.
     Motion (Johnson/Harms): to approve Treasurer’s Report, payment of bills. Motion passed.
     D. Gellatly provided detailed breakdowns of payments to MSA through June 30, 2011.

V.   Engineer’s Presentation
     MSA was represented by Pete Weidman, Carl Scharfe, David Wierzba (Regional Manager)
     and Jim Owen (CEO). J. Owen opened with a statement regarding MSA’s 45 years of
     experience in wastewater treatment, acknowledging that each community’s needs are
     unique, and require unique solutions. P. Weidman reported that MSA was 90% done with
     the topographic survey work, 99% done with the home surveys; engaged in the USDA-RD
     financing application process, and had completed a preliminary layout of the collection
     system. He acknowledged board and community members’ concerns about why the process
     takes so long, and stated that typically, it takes 6-8, but up to 10 years to move from
     planning and design to finance, construction and operation of a system. While public
     perspective may have been that the project ‘stopped’, he noted that the board learned the
     county tax forfeit parcel intended for the WWTP was not viable. MSA worked with the
     board and Fond du Lac staff to identify a new parcel and revise the PER and ER, which
     were submitted in April and May, respectively; the BLASD documents are currently fourth
     in line for USDA-RD review.

     C. Scharfe discussed WWTP technology options considered at the new site, and went over
     several reasons they still recommend a recirculating sand filter (RSF) over a package
     treatment plant (membrane bioreactor or MBR). He stated that the current engineering
     design contract between BLASD and MSA is not based upon a percentage of project costs;
     when MSA looks at design and construction, they calculate a cost based upon what they
     think it will cost to accomplish each task. For the grant application (USDA-RD), they
     estimated a total engineering cost, not a percentage, but that engineering cost is roughly
     equivalent to 14% of the total project cost. Under the current Master Services Agreement
     contract, costs associated with meeting attendance are charged, because they are invoicing
     the board on a task by task basis rather than a flat fee, but when a new contract is in place,
     meeting attendance costs will not be charged. MSA uses conservative figures for cost
     estimates. The capital costs for RSF and MBR package plant are relatively equal; the major
     difference is in the long-term operation and maintenance costs. They consulted with their 16
     internal staff that operate many plants in the region, and determined that the RSF costs
     $46,000/year, and a package plant $128,000/year to operate and maintain. MSA received a
     quote from Smith & Loveless of $750,000 for a 2-train system, and costed out the same type
     of building as at the Northern Lights Casino in Walker. Their sludge hauling costs are
     actually $0.12/gallon; MSA had estimated $0.10/gallon. Operator costs are higher for the
     MBR plant than for the RSF.

     Why are the cost estimates higher at the new WWTP site (compared to the project costs
     estimated last year for the original site)? The plant is farther away; MSA reviewed the need
     for an effluent lift station to pump the treated effluent to the discharge point, and determined
     that it was necessary. Construction costs have gone up; recent bids for a similar project
     were slightly higher than last year. Cost estimates for a package plant included bringing in 3
     phase power.


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C. Scharfe described advantages for the RSF system: ease of operation, able to handle
fluctuations in flow such as the Big Lake area would experience seasonally and from week
to weekend. Regarding engineering requirements for RSF vs. a package plant, J. Owen
stated that it was dangerous to assume that there would not be engineering costs with a
package plant; a manufacturer does not necessarily have project specifics in mind. An MBR
plant does need to have design criteria for optimizing operations; all wastewater is ‘pushed’
through a membrane filter. MSA has designed 30 RSF facilities.

D. Wierzba discussed state and federal financing sources. In response to a question about
USDA-RD ‘penalizing’ a project for seeking other funding, he replied that there was no
penalty, but RD would likely reduce the grant portion of the financial package if other grants
were secured. He noted that different grant sources specifically target certain niches.

W. Dupuis reported that he had contacted staff at the Northern Lights facility, and was told
that the deterioration of some of the metal walkways surrounding the tanks was extreme and
they would need replacement. (This facility is less than 10 years old).

There were questions about timelines related to any changes in engineers, technology, and
the site; at this point in the USDA-RD finance application process, changes would result in
delays in the RD process. A community member inquired about maintaining existing septic
tanks as backup during a power outage; board members and the engineer can reconsider, but
had planned to abandon all existing tanks.

G. Harms announced his resignation from the board, effective immediately.

N. Schuldt provided a review of the information she learned while researching references
that T. Korby of LHB had urged the board to follow up with after the June 29 special
meeting. That review had been sent to board members prior to the meeting. It called into
question some claims regarding state financing availability, a commitment for a $400,000
interest-free loan from Great River Energy, operational & maintenance experience from the
Bluefin Bay resort for both a package plant and RSF, and WLSSD operational experience
with the MBR technology for mercury removal in a pilot test at their plant.

Several members of the community in attendance suggested that the board reconsider their
decision of last month to terminate the contract with MSA and move forward with a contract
with LHB.
Motion (Dupuis/ ): to review decision from special meeting and reconsider continuing to
work with MSA. Motion withdrawn.

Discussion of the two contracts with MSA; attorney Yetka clarified that the Master Services
Contract had a 30-day notice of non-renewal; the separate contract for design services is not
covered under that ‘escape’ clause.
Motion (Johnson/Dupuis): hold working session July 28th at 5 PM to develop a list of
questions for interviewing the two firms (MSA, LHB), and line up interviews prior to the
next board meeting. Motion passed.




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VI.    Correspondence
       Atty. Yetka had notified the board that they had filed a notice of nonrenewal with MSA for
       the Master Services contract. An invoice from MSA was received for $7,307.00.

VII.   Old Business
       N. Schuldt reported that Lora Eames, Perch Lake Township Clerk, had suggested that the
       board formally approve moving district information to the new website, as the township
       would then notify Carlton County to remove the district from their site.
       Motion (Johnson/Dupuis): to ‘go live’ with the www.blasd.org website. Motion passed.

       Atty. Yetka reported that the BLASD board requests for lease terms were accepted by the
       Fond du Lac RBC and the lease would run for 50 + 50 years, at a nominal cost of $1/year
       (plus property taxes, unless and until the Band puts the parcel in federal trust). The board
       requested that he email the draft lease agreement to Brian Boyda at USDA-RD.

VIII. New Business
      R. Rennquist brought up the issue of board member stipend adjustment; his position is that
      board members should stay for an entire board meeting if they want to receive the meeting
      stipend. There was general board member discussion about the issue.
      Motion (Dupuis/Johnson): to require attendance at entire meeting to receive meeting
      stipend. Motion passed.
      Motion (Johnson/Peterson): to accept G. Harms’ resignation. Motion passed.

X.     Public Comment
       Several members of the community provided comments about the process of selecting a
       district engineer and the proposed wastewater treatment facility/technology.

       P. Johnson noted an error in the finance report, related to the MSA invoice.

       Motion (Johnson/Dupuis): to amend the Treasurer’s Report to reflect the correct invoice
       amount of $3,011.71. Motion passed

XI.    Adjournment
       Motion (Johnson/Peterson): To adjourn at 5:20 PM. Motion passed.

       Next meeting August 8, 2011, 3 PM @ Sawyer Community Center.




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