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August 12, 2009 Meeting Minutes

MINUTES
of the
MEETING OF THE COMMISSIONERS
of the
BUFFALO RAPIDS BOARD OF CONTROL
Terry, Montana

August 12, 2009

The Fourth Regular Meeting of the members of the Buffalo Rapids Project Board of Control, at Terry, Prairie County, Montana, was held on the Twelfth day of August, 2009, at 7:00 p.m.

There were present and participating at the meeting:

Don Buxbaum
Ric Holden
Barry Rakes
Ray Roethle
Scott Sackman
James Whitmer

Also present and participating were, Pat Davis, Assistant Secretary, Tim Kortum, Allen Gierke, Bill Fleckenstein, Ben Benjamin, and Strad Benjamin.

President Roethle called the meeting to order, stating that all necessary and advisable business be conducted during this time and that notice had been received by each Board Member.

Thereupon, President Roethle announced that legal notice had been given and a quorum was present so that the meeting was legally and lawfully ready to transact business.

Ric Holden made a motion, seconded by Don Buxbaum, to approve the minutes from the July 08, 2009 meeting.

FINANCIAL REPORT:

Pat Davis presented current budget figures which included payroll and expenditures for August. A list of invoices to be paid was submitted and forms for the Prairie County Treasurer to transfer funds to cover payroll and invoices were signed. S.T.I.P. investment transfers were also signed to invest the remaining monthly District I and District II cash balances.
James Whitmer made a motion, seconded by Don Buxbaum, to approve the Treasurer’s report and the transfer of $81,708.99 for District I. Scott Sackman made a motion, seconded by Barry Rakes, that the Treasurer’s report and the transfer of $56,564.92 for District II be approved. Motions carried.

Pat presented to the Board of Commissioners a current invoice from Associated Employers Insurance Benefit Group, the current health insurance carrier. Pat included in the invoice the amount that each employee pays of the premium. The Board needs to have each employee contribute the exact same amount of the premium, or the Board pays the same amount of the premium for every employee to disclaim discrimination. The Board discussed the issue at length and on a motion from Ric Holden and seconded by James Whitmer it was

RESOLVED:
Buffalo Rapids will temporarily pay the entire premium for health insurance for every employee until a final decision can be reached at the next Board meeting in September.

Pat relayed letters to the President of District I, Don Buxbaum, and Chairman of the Board, Ray Roethle, from Stockman Bank President, Ron Pisk. The letters were letters of default on the District I Stockman Bank loan that was acquired last fall for one hundred and ninety one thousand dollars. The letter stated that District I was considered in default of their loan after Ron Pisk was in receipt of the District I’s unbalanced budget and the results of the June’s meeting of setting assessments for the 2010 operating year. The commissioners at the June meeting had set assessment at $34.50 per acre. The District auditors, Paul Strom and Associates, had recommended that assessment be set at $39.94 an acre for the 2010 operating year. The Bank made a decision at that time to hold District I in default of their loan. The commissioners of District I have 30 days to either raise their assessment or prove to Stockman Bank that their budget is balanced. The commissioners of District I and District II decided to hold a special meeting of each District to discuss the issue of the Stockman Bank loan at a later date.

Pat informed the Board of the financial situation of Buffalo Rapids at this time. The funds left in each District at the end of August are much lower than they should be at this time of year. She had informed the Board that the current year would be a hard one due to raise in assessments not being effective for a year after being set the previous year. She discussed with the Board the amounts that are still owed by producers, and the potential income for the Project for the remainder of the year. Pat then advised the Commissioners of both District I and District II that she felt that both Districts should please consider raising assessment more at the special board meeting to be held as soon as possible. She did not feel that the current increase in assessment was enough to protect the Project from any unforeseen or unexpected expenses.


MANAGER’S REPORT:
Dave was unavailable for a manager’s report due to an illness in the immediate family.

Agenda item #1 from Mr. Ric Holden: Change in Project managers spending authority, Off budget items require Board approval, Manager’s authority applicable to budgeted items, Board pre-approval of expenditures above a to be designated amount.

Ric Holden stated to the Project Board that he would like to set a spending authority limit for the manager of the Project. The manager at the current time has an unlimited spending authority for purchases needed for the Project due to a resolution passed by the Board of Commissioners in September of 2008. Don Buxbaum stated that he thought that Dave should be present to speak with when setting a spending limit, Barry Rakes commented that he did not want to micromanage. Don Buxbaum and Ric Holden expressed their opinion that they believed that Buffalo Rapids was in trouble financially because of no control on spending for the Project. Ric Holden expressed that the manager needs to communicate with the Board about any large expenditures before they are purchased. After much discussion and on a motion made by Ric Holden and seconded by James Whitmer it was

RESOLVED:
The Buffalo Rapids Board of Control establishes a ten thousand spending authority applicable to budget items and requires Board approval for non (or off) budget items.
5 in favor 1 against, motion carried.

Agenda item #2 from Mr. Ric Holden: Ric Holden made a motion that Buffalo Rapids Employees are allowed to use Buffalo Rapids Charge accounts for personal use provided that the items are paid for by cash or good check at time of purchase.

Buffalo Rapids employees are currently allowed to make purchases on Buffalo Rapids account, and then reimburse Buffalo Rapids Project for those purchases. With the discount that Buffalo Rapids receives on purchases, there is a benefit provided to the employee. Tim Kortum asked Ric Holden if he knew how much was carried on the books at this time of employee personal charges. Ric Holden stated that he did not. Tim asked him if he had researched the issue at any length. Mr. Holden stated that he had talked with his growers and that they felt Buffalo Rapids employees should not be charging at all on Buffalo Rapids accounts. Tim Kortum asked Mr. Holden how many growers felt this way, and how was he approaching these individuals about the subject. Mr. Holden stated that he did not know of any other public entity that lets employees charge on account. Tim replied to the Board that employee charging has been looked into by the current auditors and there is nothing wrong with the way things are being handled currently. Barry Rakes stated to the Board that if the Board keeps pushing the employees they may join the union, and that as a Board they needed to be careful with their dealing on employee issues. Tim Kortum expressed that the employees felt that they were being attacked by the Board. Mr. Kortum also stated that the employees do not abuse the personal charging and most pay on a monthly basis if not before hand. Don Buxbaum felt that the issue needed more discussion before a decision was made. Barry Rakes brought to the Board’s attention that the producers not paying their bills owed to the Project for months at a time is no different than the issue of employee charging. Tim Kortum told the Board that he had spoke with some of the employees that had been with the Project for twenty years or longer, and they stated that employees have been able to charge ever since they had been employed with Buffalo Rapids Project. Tim Kortum stated that he felt that all the Board’s issues with the employees started last year with the employee use of heavy equipment, and that he was concerned that the Board is starting to limit the employees’ benefits that they have had for many years. Barry Rakes commented to the Board that they do not realize what they have for employees and the job they do for the Project. Tim Kortum stated that the employees of Buffalo Rapids Project are dedicated and put in the amount of work the job requires regardless if their day ends at eight hours or not. Barry Rakes stated that Mr. Holden needs to talk to more than just a few growers on the project. Tim Kortum advised Ric Holden that maybe he needs to research the issue more and then go to the producers with all the facts. Mr. Holden stated that he had talked to more than one producer and that they felt the same way. Allen Gierke and Strad Benjamin asked what benefits were next to be taken away from the employee. Mr. Holden stated that he felt that it was more work for the bookkeeper and that he did not believe she should have to do the extra work of tracking the employee charges. Pat Davis commented that the recommended system Ric Holden had for tracking employee charges would be more time consuming than what was currently being used. Mr. Barry Rakes asked Mr. Ric Holden if he is actually running the meeting now instead of the President of the Board of Control. There being no second to this motion, motion failed with 1 yea and 2 nay.

District II President, Barry Rakes brought to the Board’s attention that Dave Schwarz, project manager, had built the machine shop shortly after taking the position at Buffalo Rapids Project. Allen Gierke, machine shop foreman, has kept record of the time and materials that the shop uses on the pumps and operations for the Project’s pumping plants. It has been calculated that the machine shop has saved the Project over twenty-nine thousand dollars on Glendive I pumping plant alone this year.

Agenda item #3 from Mr. Ric Holden: Ric Holden made a motion for the Board of Control to form a subcommittee established by the chairman for purposes of reviewing employee company procedures and benefits.

Mr. Holden then handed out, to all present, a copy of a typewritten list outlining policy issues. Stated as follows:
1. Open door policy for employees
2. Wage and hourly wage rate review
3. American Express credit card usage, other credit cards
4. Employee expense report submissions
5. Employee termination policy
6. Personal charging of employees on B.R. charge accounts
7. Personal use of company equipment
8. Personal use of company shop facilities
9. Personal use of company vehicles i.e..to and from work, other uses
10. Insurance benefits
11. Punching of mechanical time clocks

Mr. Holden stated that he would like to form a subcommittee that consists of two members from each District, plus a fifth member. He would like the committee to hold meetings with the employees to discuss issues to bring to the Board. Tim Kortum asked the Board if they had already gotten rid of the manager of the Project, Dave Schwarz. He stated that everything that Mr. Holden had listed he currently discusses with the project manager. Tim also stated that Mr. Holden should ask for an employee handbook before he put those issues down to discuss on a subcommittee. Ric Holden replied that he had been approached by producers that have concerns about employee benefits and policy and procedure. Tim relayed to the Board that employees currently spend their own time to help out the Project, but if they feel that they are being treated unfairly, that practice will probably stop and they will only deal with Buffalo Rapids issues on Buffalo Rapids time. James Whitmer said that it would probably be a good idea to review the current employee handbook and make updates if needed. Tim Kortum asked the Board if he should call them or Mr. Ric Holden because he will only deal with one project manager. Barry Rakes stated that the only reason that they want to form a subcommittee is to take something away from the employees. Mr. Ric Holden stood in objection to Mr. Rakes comment. Tim Kortum spoke that taking away the use of heavy equipment is excluding and taking away something from the employee. Pat Davis stated to the Board that a union negotiator would be the kind of person the employees would use to deal with the items listed on the paper that Ric Holden distributed. James Whitmer asked if they could just go to Dave Schwarz and ask him about the employee handbook and make changes if needed. Ric Holden answered that that would not be good enough. Don Buxbaum stated that they should read the employee handbook before they form a subcommittee. Tim Kortum asked if forming a subcommittee would save the Project money. Mr. Ric Holden stated that he did not know. Tim Kortum asked Ric Holden if he had asked Dave Schwarz about any of the items on the list. Mr. Ric Holden stated that he had asked him about a few of them. Mr. Holden also stated that he would be happy to discuss these items at a subcommittee meeting, but not now. Strad Benjamin asked if there was a problem with the way things were being done currently. Mr. Holden stated that he did not know. Barry Rakes said that he had not heard any complaints in his Division. Ben Benjamin and Bill Fleckenstein stated that they had not heard anything on their ditch either. Strad Benjamin commented that he felt it seems to be more and more complaints from the Board about the employees. James Whitmer and Don Buxbaum thought that the whole Board of Control should be involved and not form a subcommittee. James Whitmer stated that he would like to table the issues until the employees and the Board could discuss things together. Tim Kortum stated that he felt that the employees would be in agreement on that. There being no second to this motion, motion failed.

James Whitmer made a motion seconded by Ric Holden to establish a time for a November meeting for the Board to review the employee handbook and inform the employees of the time it will occur. All in favor.

Agenda item #4 from Mr. Ric Holden: Chairman to call for review of the bills by board members, with a motion and discussion relative to payment of the bill submitted. Mr. Holden stated he did not need a motion on this agenda item since it was already being done.

Agenda item #5 from Mr. Ric Holden: Set time of monthly meetings to 7:00 pm. Mr. Holden stated that this item did not need a motion since it was already established.

Agenda item #6 from Mr. Ric Holden: Call on report from Bill Fleckenstein to personally deliver at the August meeting, Outlining: Status of pipe ordering, current pricing policy, clarification of 15 percent surcharge, invoice billing and collections, board to review policy in place.
Bill Fleckenstein explained to the Board of Control how the EQIP billing was done. Bill Fleckenstein makes out the list of supplies used for each EQIP project and Dave Schwarz does the pricing for all EQIP invoices. Pipe and parts that are not EQIP items are added a 15 percent charge to every item. Everyone either on the Project or off the Project is added the 15 percent charge on top of whole-sale cost to the Project. Bill relayed to the Board that Buffalo Rapids Project gets a much cheaper price than most other companies could by materials for. Quotes that Bill Fleckenstein gives to customers are usually good for 15 days only. Bill Fleckenstein makes out the material list invoice with pricing and then has Pat Davis type up the list to mail to the customer. All collections come directly to the office where Pat Davis allocates them accordingly. Bill stated that he usually only carries the most popular items on hand so he does not have a surplus of inventory, but will order items if needed. Bill has had problems in the past of customers on the project refusing items they have ordered, but he usually makes a sale of them eventually to another customer.

Agenda item #7 from Mr. Ric Holden: District I to hold a public meeting to explain tax increases, unbalanced budget, current board policy changes.

Ric Holden stated that he would like to hold a public meeting to inform water users of any issues concerning Buffalo Rapids Project. Barry Rakes and Scott Sackman stated to the Board that they did not feel that District II needed such a meeting at this time. James Whitmer made a motion seconded by Ray Roethle to hold an annual meeting for District I in the fall of this year. All in Favor for District I.

Pat Davis was instructed by the Board to talk with Dave Schwarz and set up a time for a meeting to discuss the issue of tax assessment and the default letter from Stockman Bank.

Next meeting will be held on date to be determined.

There being no further business to be considered, and no objection, the said meeting of the Commissioners of the Buffalo Rapids Project Board of Control adjourned. ATTESTED:

________________________________ ____________________________________
Pat Davis, Assistant Secretary Ray Roethle, President

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