MINUTES
of the
MEETING OF THE COMMISSIONERS
of the
BUFFALO RAPIDS BOARD OF CONTROL
Terry, Montana
December 09, 2009
The Eighth Regular Meeting of the members of the Buffalo Rapids Project Board of Control, at Terry, Prairie County, Montana, was held on the Ninth day of December, 2009, at 3:00 p.m.
There were present and participating at the meeting:
Don Buxbaum
Ray Roethle
Scott Sackman
Jim Finneman
Barry Rakes
James Whitmer
Ric Holden
Also present and participating were, Pat Davis, Assistant Secretary, Dale Hubber, Buffalo Rapids Attorney at Law, Kay Braddock; Terry Tribune, District I and District II area producers, members of the public, and employees of Buffalo Rapids.
President Ray 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 James Whitmer, to approve the minutes, without corrections, from the November 18, 2009 meeting. Ric Holden made a motion, seconded by Don Buxbaum to approve the minutes with corrections, from the November 11, 2009 meeting. Ric Holden made a motion, seconded by James Whitmer to approve the minutes with corrections, from the November 03, 2009 meeting. James Whitmer made a motion, seconded by Scott Sackman to approve the minutes with corrections, from the October 20, 2009 meeting. All in Favor.
Mr. Dale Hubber, Attorney at Law, was asked to present findings concerning the payment of an invoice submitted to Buffalo Rapids Project for an audit performed for the Project. Upon Dale Hubber’s advice District II paid their portion of the invoice to Anderson ZurMuehlen and Associates invoice.
FINANCIAL REPORT:
Pat Davis presented current budget figures which included payroll and expenditures for December. 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. Transfers were signed from District II to loan District I $33,325.00 for the month of December.
James Whitmer made a motion, seconded by Ray Roethle, to approve the Treasurer’s report and the transfer of $91,249.55 for District I. Jim Finneman made a motion, seconded by Scott Sackman, that the Treasurer’s report and the transfer of $60,082.30 for District II be approved. Motions carried.
Pat informed the Board that they were able to retrieve all files and databases for the office computer. Pat also informed the Board that they would receive grant money for lateral 3.2 in District II and grant money for lateral 2.9 in District I. The D.N.R.C informed Dave Schwarz that the final ten thousand would not be available for the work done on lateral 3.2 until spring. Dave and Pat are working with the D.N.R.C. on getting that money available to the District right away since the pipeline is completed. Pat stated that Prairie County assessments were in, but Custer County and Dawson County would not be available until the middle of December. Pat explained that they had to rectify a mistake that had been made on Dave Schwarz’s P.E.R.S. since 2004. Pat was notified of the mistake by P.E.R.S. and enlisted the help of an accountant from Strom and Associates to correct the overpayment that was given to Dave Schwarz over the years. Pat asked for the Board to make a decision as to who they would like to perform the 2009 audit. She stated that she needed the audit done by June 1st 2010 for financial reports that needed to be submitted for the Department of Administration. It was decided that Pat and members of the Board would look into the financial costs of hiring a different auditor or staying with Strom and Associates. Pat asked all members of the Board to please have any agenda items into the office by the last day of the month so she has time to put it on the agenda and have notices ready to send out.
Pat spoke with the Board that as a Board she would like them to set some guidelines for her job duties. She explained to the Board that she would not be performing the managers’ duties, and was not comfortable with the Board asking her to do so. Pat Davis also expressed to the Board that with so many Board of Control and District meetings, along with subcommittee meetings being held, she would like some help in the office. The job requirements of attending the meetings and writing the minutes, along with her regular job duties were beginning to be too much for one person. She stated that she is now working overtime and on weekends to get everything done, but with the extra scheduled meetings and the length of the meetings, she does not believe she will be able to have everything completed on time with out help.
The Buffalo Rapids Board of Control spoke of splitting the two districts into separate entities and dissolving the Board of Control. Barry Rakes stated that it would be faster and more feasible to split mutually. Barry Rakes and Scott Sackman stated that they have talked to all of the producers in their divisions and they are in agreement to split. Jim Finneman expressed that he felt it should come to a ballot from the producers. Barry Rakes expressed that they should split peacefully, neither district can afford a fight. Barry also stated that he would like it done faster than three months if possible. Jim Finnemans asked if they had any figures worked up if they split. Barry replied that they did have a preliminary budget for District II. Ray Roethle asked for Mr. Larry Heimbuch to speak. Larry stated that they have to have written notice from District II that they intend to split from the Board of Control. He also stated that they would need a lot of help from the producers if they split. Larry Heimbuch stated state statute concerning splitting of the two districts. Mr. Barry Rakes spoke of different options that they should think about if they split. Larry spoke that the outbuilding are owned by the Bureau of Reclamation.
Ric Holden asked Barry Rakes what his take was on the meeting held for District I producers in Glendive. Mr. Rakes expressed that he felt District I did not believe enough work was being done in their district, and most of the work was being done in District II. He also stated that he did not believe that all of the producers in District I wanted to split. Barry Rakes and Scott Sackman stated that every one but two in District II want to split. Mr. Holden stated that he felt from the District I meeting that District I does not want to split, and he would not be in favor of the split without a solid business plan. Jim Finneman asked about the liability of the one hundred and ninety thousand dollar loan with Stockman Bank. Larry Heimbuch and Barry Rakes explained to Mr. Finneman that District II is not liable for the loan, because it was loaned strictly to District I. Barry Rakes stated that he would like to see the split done without tearing everything apart. Jim Finneman asked Mr. Jeff Wallace what he thought of the issue. Jeff Wallace stated to the Board that he was in favor of the split and felt that they had to do it. Mr. Wallace expressed that if they split then each District can work on what they believe should be done, and maybe get things done faster for their District. Jim Finneman asked Jeff if he felt it would be easier to manage if they split. Mr. Wallace stated that it is always easier to manage a smaller operation.
Mr. Allen Gierke, machine shop foreman, asked what they would do with the machine shop if they split. Barry Rakes replied that both district need the machine shop. Larry Heimbuch stated that they need the letter stating the intention to split before they could start the process to determine how to split. Larry Heimbuch explained to everyone present that the pumping plant power is already split with separate contracts with Western Area Power. Don Buxbaum stated that a split of the districts could benefit both sides, but also warned that it would cost the producers whether they split or not.
The subject of burning the ditch in the spring, and getting water on sooner, was discussed at length by everyone present. It was mentioned that maybe the producer will need to help with the burning in the spring. Tim Kortum and Allen Gierke spoke that there are a lot of issues they have to deal with when they are burning that the producer may not know about. Allen and Tim stated that they put in a lot of hours in the spring trying to get water on sooner. Tim Kortum expressed that there are days that the Sheriff’s office closes them down due to wind, they can’t burn due to weather, and many other things. Tim stated that with more and more pivots there is going to be more of a demand for water to be turned on sooner.
More discussion of the two districts splitting was brought forward. Ray Roethle spoke that if District II wants to split there is nothing that the other district can do. It was spoke of that the decision would not be made without a vote from the producers. James Whitmer stated that he would like to protect what was rightfully District I. Barry Rakes agreed. James Whitmer felt that it has been understated how difficult it will be to split the two districts apart. It was discussed whether they would need an appraiser for the assets owned by Buffalo Rapids Project. Ric Holden asked if Mr. Barry Rakes was going to bring back a management plan. Barry Rakes responded that District II already has a preliminary budget for the upcoming year. Mr. Holden stated that Mr. Rakes need a solid business plan and get back to District I with it. Barry Rakes responded that District II will have a meeting. It was stated that if the Board of Control could not work things out, that the Bureau of Reclamation would get water in the ditch. Barry Rakes expressed that they do not want the Bureau of Reclamation to take over, because they would like to see more charged for water than is currently being assessed.
Machine Shop Report:
Mr. Allen Gierke reported that all pumps have been pulled that were scheduled. He stated that the Terry #1 pump bearings were all good but two of them. The pumps will go to Billings to be worked on soon. Allen expressed that all the pump motors should be on a rotation schedule to be pulled and checked every six years. Allen reported that the Glendive II pumps have been pulled up and out of the water. Allen also expressed that they should look into locating a spare pump for District I. Allen stated to the Board that he had heard a rumor that they were not going to be able to work on pumps for Lower Yellowstone Irrigation. He called Lower Yellowstone Irrigation and expressed to them that they would be taking in outside work as long as there was time to have all of their own pumps done for water season. He expressed to Lower Yellowstone Irrigation that they would operate the same as they have in the past.
Shop Report:
Tim Kortum reported that they have completed Lateral 3.2 in Shirley, except for clean up and a meter instillation, which they will do when the weather is better. The crew will go on to Lateral 34.5 in Glendive and finish that pipeline when weather permits. Mr. Jeff Morrison is working on Lateral 2.9 in District I, and will start again when weather permits. Tim expressed that they do not want to attempt pipelining through Crissafulli trailer court until spring due to so many utilities located in that area. Tim stated that most of the employees are on vacation if they have any time accrued. Tim expressed that there are a handful of employees that are working in the shops doing inventory and other inside work that needs to be done. Jim Finneman asked Tim about the canal lining project. Tim stated that most of the product is bought to finish the project, but they had considerable problems with the system they had for applying the product to the canal. Tim expressed that the canal lining will work but they need to use a different technique.
Mr. Ric Holden passed for all present a list for CPA recommendations and Board of Control policy issues.
Item#1: Ric Holden made a motion that the project manager and Chairman of the Board signature stamps be given to the Board Chairman for destruction and that the Chairman of the Board of Control, District I and District II Board members be authorized to serve as checking account signors. Effective January 01, 2010. James Whitmer seconded the motion. All in Favor.
Item #2: Ric Holden made a motion that the project manager be removed as an authorized signor on Buffalo Rapids accounts. Effective January 1, 2010. Don Buxbaum seconded the motion. All in Favor.
Item #3: Ric Holden made a motion that the Buffalo Rapids “American Express” credit card be collected and given to the Board Chairman. Jim Finneman seconded the motion. All in Favor. Pat Davis requested that the Chairman of the Board collect the cards. Ray Roethle agreed.
Item #4: Ric Holden made a motion that travel expense reports be submitted by management and employees to explain costs and business purpose of the trip. James Whitmer seconded the motion. All in Favor. Mr. Holden passed examples of travel report forms to be copied and used for travel trips.
Item #5: Ric Holden made a motion that the project manager obtain pre-approval of travel costs and explain trip purpose to the Board of Control. James Whitmer seconded the motion. All in Favor.
Item # 6: Ric Holden made a motion that the Chairman of the Board collect all Costco membership cards. Jim Finneman seconded the motion. All in Favor.
Item # 7: Audit report page 3. “There is no system for tracking and recording inventory in the district’s accounting system. We also noted weak or non-existent physical controls over inventory of supplies, which are stored in the yard and shop.” “We recommend management gather physical count of inventory for budget financial records.” James Whitmer stated that what he remembered from the meeting with the CPA is that it would take a QuickBooks expert to assist the bookkeeper to install the inventory into the accounting system, and that at this time it would take time to do that. Mr. Holden was told that there is a physical count and an inventory done every year, and it was brought to the Board meeting when completed for the Board’s review if they so chose. It will be looked into further with an accountant at a later date.
Item # 8: Financial Reporting-Cash balance sheet-new Manager? Pat Davis reported that there is a balance sheet available in her accounting software. The Balance sheet read almost exactly like the cash balance sheet that she currently gives the Board every month. It will be looked into further with an accountant at a later date.
Item # 9: Grants-We need a “report to include, grants dollars amounts, amount received, amount remaining, construction progress, remaining timeline.” Mr. Holden was informed that those financial figures are currently available when Mr. Schwarz fills out the quarter reports for each grant file. Mr. Holden recommended to the Board that they hire Mr. Mike Carlson to go through the grant reports and give a status report to the Board. James Whitmer made a motion seconded by James Jim Finneman to contact Mr. Mike Carlson and see if he can give a grant report to the Board for less than five hundred dollars, and if more than that amount Mr. Holden is to report back to the Board with the estimate. All in Favor.
Item # 10: Employee Receivables-Personal use of Buffalo Rapids charge accounts.
A. Need a line item in the budget
B. Need to track employee personal use purchases as a receivable.
C. Need a written agreement with employees on paycheck withdrawls-On Hold
Pat Davis explained to Mr. Holden that there are line items already used for personal purchases and they are tracked through the accounting system, through the budget and as a receivable. The Board decided that the written agreement for withholding from an employees paycheck would be a union issue.
Item # 11: Payroll-employee benefit costs represent a 40 percent burden rate on payroll subject to union negotiation.
Item # 12: Ric Holden presented to the Board an authorized off-site backup company by the name of Carbonite. He requested that the bookkeeper be authorized to purchase and install the off-site backup program. Pat stated that she would contact her IT personal, Darryle Pisk, to ask his opinion on the subject.
Item # 13: Financial Results- year to date net loss of $170,000.00 as of September 25th, 2009. Recommendation-“The Board should work for proper budgetary review.”
Manager search sub committee report:
Mr. Larry Heimbuch passed handouts for the Board concerning revenue for machine shop since 2004, equipment rental revenue since 2004, and outside work revenue since 2004. Larry Heimbuch and members of the Board discussed the revenue figures on the handout and how they could pertain to the deficit in District I. Larry Heimbuch also handed for the Board’s review copies of Montana Code Annotated that discussed the issues of hiring a manager for an irrigation district. A contract was also passed for the Board’s review of the project manager for the Lower Yellowstone Irrigation Project. Larry expressed that they are not at this time actively seeking a manager for Buffalo Rapids Project until the Board decides if they want to split the two districts.
Union negotiating subcommittee report:
A subcommittee meeting will be held on December 10, 2009 with out representatives from the union. A meeting will be held on December 16, 2009 with representatives from the union. Mr. Barry Rakes stated that he had talked with Ted Handel, state mediator, and that he would be free for a speaker phone meeting with the subcommittee on that day. Barry also stated that he had asked Mr. Handel about the project hiring a lawyer, and he stated that there are cheaper ones just as good as the one that they are looking to hire, and if they would like he could get them a list of names.
Mr. Ric Holden brought to the Board handouts of a letter from Associated Employers, and emails from Department of Revenue. Mr. Holden also handed to the members of the Board a worksheet of compensated for the employees of Buffalo Rapids. Mr. Holden stated that he felt they needed to deal with the large liability of compensated absences that they have. Mr. Holden made a motion that the Buffalo Rapids Board of Control close operations during the holiday season for 15 wording days from ___________of December thru January __________, to allow the usage of first accumulated “comp time” and then second the usage of accumulated vacation time. This will represent time off with pay except for those employees without any or enough comp and/or vacation time then it will be time off without pay. After much discussion as to the feasibility of this and the practicality of all employees leaving the project for any predetermined period of time the motion failed due to a lack of a second. Tim Kortum shared with the Board that the employees customarily take the holiday season off if they have the time available, and that most employees take their vacations in the winter months if possible. Pat Davis will bring to the Board a year end compensated absences worksheet liability to the Board at the January meeting.
Ric Holden passed for the Board a copy a page of the managers’ contract that pertained to the vacation time given per year. Mr. Holden stated that in the contract it states that annual vacation of a period not to exceed 15 days, with pay, at such time as approved by employer. Dave is currently given vacation days according to state statute. Ric Holden had questions as to whether Dave Schwarz is entitled to his accumulated vacation time that he has accrued. It was stressed to Mr. Holden that he should possibly contact the Department of Labor or Dale Hubber as to the legalities of Dave’s vacation time accrued. Ric Holden made a motion for the Board of Control to authorize the Project Manager to take off 15 days of vacation beginning December 21, 2009 until January 12, 2010. Jim Finneman seconded the motion. After much discussion and urging to look into the legalities of forcing Dave to take vacation time Mr. Holden withdrew his motion. It was determined that they would talk with Dale Hubber and make a decision at a later date.
FINANCIAL REPORT:
Pat Davis presented current budget figures which included payroll and expenditures for December. 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. Transfers were signed from District II to loan District I $33,325.00 for the month of December.
James Whitmer made a motion, seconded by Ray Roethle, to approve the Treasurer’s report and the transfer of $91,249.55 for District I. Jim Finneman made a motion, seconded by Scott Sackman, that the Treasurer’s report and the transfer of $60,082.30 for District II be approved. Motions carried.
Pat informed the Board that they were able to retrieve all files and databases for the office computer. Pat also informed the Board that they would receive grant money for lateral 3.2 in District II and grant money for lateral 2.9 in District I. The D.N.R.C informed Dave Schwarz that the final ten thousand would not be available for the work done on lateral 3.2 until spring. Dave and Pat are working with the D.N.R.C. on getting that money available to the District right away since the pipeline is completed. Pat stated that Prairie County assessments were in, but Custer County and Dawson County would not be available until the middle of December. Pat explained that they had to rectify a mistake that had been made on Dave Schwarz’s P.E.R.S. since 2004. Pat was notified of the mistake by P.E.R.S. and enlisted the help of an accountant from Strom and Associates to correct the overpayment that was given to Dave Schwarz over the years. Pat asked for the Board to make a decision as to who they would like to perform the 2009 audit. She stated that she needed the audit done by June 1st 2010 for financial reports that needed to be submitted for the Department of Administration. It was decided that Pat and members of the Board would look into the financial costs of hiring a different auditor or staying with Strom and Associates. Pat asked all members of the Board to please have any agenda items into the office by the last day of the month so she has time to put it on the agenda and have notices ready to send out.
Pat spoke with the Board that as a Board she would like them to set some guidelines for her job duties. She explained to the Board that she would not be performing the managers’ duties, and was not comfortable with the Board asking her to do so. Pat Davis also expressed to the Board that with so many Board of Control and District meetings, along with subcommittee meetings being held, she would like some help in the office. The job requirements of attending the meetings and writing the minutes, along with her regular job duties were beginning to be too much for one person. She stated that she is now working overtime and on weekends to get everything done, but with the extra scheduled meetings and the length of the meetings, she does not believe she will be able to have everything completed on time with out help.
Pat asked the Board to please take a look at the proposed budget for the 2010 operating year. She informed the Board that the figures that she has in the 2010 budget are a starting point and that she wants the Board to become completely involved this year when determining the budget. She would like the Board to be responsible for the budget amounts that will be there for the 2010 operating year. Mrs. Davis recommended that they hold a separate meeting and for each Board member to sit down with her to see what revenues and charges are put into each line item on the budget. On a motion made by Mr. James Whitmer and seconded by Jim Finneman it was decided to table the 2010 budget until a date can be set at the next regular scheduled meeting in January.
Mr. Doug Buxbaum was present to speak with the Board, on behalf of the Dawson County Commissioners, about the back taxes owed to Buffalo Rapids for Rainbow Estates Subdivision. Doug explained to the Board that he had been contacted, the same as Buffalo Rapids, concerning the purchase of Rainbow Estates lots by an outside entity. Doug spoke that it would cost Buffalo Rapids some money to get the water to the lots, but he felt it would be worth forgiving the back taxes and cleaning the lateral to deliver water, to get the lots back on the payroll and receive income for those taxes from this year forward. Doug stated that the Dawson County Commissioners had already made the decision to forgive the Dawson County taxes and that included the back taxes owed to Buffalo Rapids. Mr. Buxbaum passed for all members copies of MCA codes that pertained to suspension/cancellation of property taxes. Doug expressed that the commissioners of Dawson County would like to work with Buffalo Rapids on the issue.
James Whitmer presented to Pat Davis an invoice for the services of Len Stanton of Associated Employers. Members of the Board have been using his services for management consultation over the past several months. Some of the members of the Board were under the understanding that his services were for free, but it was determined that only the first five hours on consulting were free, and any time after that was at the rate of $85.00 per hour. It was determined that his services will still be used at the rate per hour.
Next regular scheduled meeting will be held on January 13, 2010 at 3:00pm.
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
of the
MEETING OF THE COMMISSIONERS
of the
BUFFALO RAPIDS BOARD OF CONTROL
Terry, Montana
December 09, 2009
The Eighth Regular Meeting of the members of the Buffalo Rapids Project Board of Control, at Terry, Prairie County, Montana, was held on the Ninth day of December, 2009, at 3:00 p.m.
There were present and participating at the meeting:
Don Buxbaum
Ray Roethle
Scott Sackman
Jim Finneman
Barry Rakes
James Whitmer
Ric Holden
Also present and participating were, Pat Davis, Assistant Secretary, Dale Hubber, Buffalo Rapids Attorney at Law, Kay Braddock; Terry Tribune, District I and District II area producers, members of the public, and employees of Buffalo Rapids.
President Ray 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 James Whitmer, to approve the minutes, without corrections, from the November 18, 2009 meeting. Ric Holden made a motion, seconded by Don Buxbaum to approve the minutes with corrections, from the November 11, 2009 meeting. Ric Holden made a motion, seconded by James Whitmer to approve the minutes with corrections, from the November 03, 2009 meeting. James Whitmer made a motion, seconded by Scott Sackman to approve the minutes with corrections, from the October 20, 2009 meeting. All in Favor.
Mr. Dale Hubber, Attorney at Law, was asked to present findings concerning the payment of an invoice submitted to Buffalo Rapids Project for an audit performed for the Project. Upon Dale Hubber’s advice District II paid their portion of the invoice to Anderson ZurMuehlen and Associates invoice.
FINANCIAL REPORT:
Pat Davis presented current budget figures which included payroll and expenditures for December. 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. Transfers were signed from District II to loan District I $33,325.00 for the month of December.
James Whitmer made a motion, seconded by Ray Roethle, to approve the Treasurer’s report and the transfer of $91,249.55 for District I. Jim Finneman made a motion, seconded by Scott Sackman, that the Treasurer’s report and the transfer of $60,082.30 for District II be approved. Motions carried.
Pat informed the Board that they were able to retrieve all files and databases for the office computer. Pat also informed the Board that they would receive grant money for lateral 3.2 in District II and grant money for lateral 2.9 in District I. The D.N.R.C informed Dave Schwarz that the final ten thousand would not be available for the work done on lateral 3.2 until spring. Dave and Pat are working with the D.N.R.C. on getting that money available to the District right away since the pipeline is completed. Pat stated that Prairie County assessments were in, but Custer County and Dawson County would not be available until the middle of December. Pat explained that they had to rectify a mistake that had been made on Dave Schwarz’s P.E.R.S. since 2004. Pat was notified of the mistake by P.E.R.S. and enlisted the help of an accountant from Strom and Associates to correct the overpayment that was given to Dave Schwarz over the years. Pat asked for the Board to make a decision as to who they would like to perform the 2009 audit. She stated that she needed the audit done by June 1st 2010 for financial reports that needed to be submitted for the Department of Administration. It was decided that Pat and members of the Board would look into the financial costs of hiring a different auditor or staying with Strom and Associates. Pat asked all members of the Board to please have any agenda items into the office by the last day of the month so she has time to put it on the agenda and have notices ready to send out.
Pat spoke with the Board that as a Board she would like them to set some guidelines for her job duties. She explained to the Board that she would not be performing the managers’ duties, and was not comfortable with the Board asking her to do so. Pat Davis also expressed to the Board that with so many Board of Control and District meetings, along with subcommittee meetings being held, she would like some help in the office. The job requirements of attending the meetings and writing the minutes, along with her regular job duties were beginning to be too much for one person. She stated that she is now working overtime and on weekends to get everything done, but with the extra scheduled meetings and the length of the meetings, she does not believe she will be able to have everything completed on time with out help.
The Buffalo Rapids Board of Control spoke of splitting the two districts into separate entities and dissolving the Board of Control. Barry Rakes stated that it would be faster and more feasible to split mutually. Barry Rakes and Scott Sackman stated that they have talked to all of the producers in their divisions and they are in agreement to split. Jim Finneman expressed that he felt it should come to a ballot from the producers. Barry Rakes expressed that they should split peacefully, neither district can afford a fight. Barry also stated that he would like it done faster than three months if possible. Jim Finnemans asked if they had any figures worked up if they split. Barry replied that they did have a preliminary budget for District II. Ray Roethle asked for Mr. Larry Heimbuch to speak. Larry stated that they have to have written notice from District II that they intend to split from the Board of Control. He also stated that they would need a lot of help from the producers if they split. Larry Heimbuch stated state statute concerning splitting of the two districts. Mr. Barry Rakes spoke of different options that they should think about if they split. Larry spoke that the outbuilding are owned by the Bureau of Reclamation.
Ric Holden asked Barry Rakes what his take was on the meeting held for District I producers in Glendive. Mr. Rakes expressed that he felt District I did not believe enough work was being done in their district, and most of the work was being done in District II. He also stated that he did not believe that all of the producers in District I wanted to split. Barry Rakes and Scott Sackman stated that every one but two in District II want to split. Mr. Holden stated that he felt from the District I meeting that District I does not want to split, and he would not be in favor of the split without a solid business plan. Jim Finneman asked about the liability of the one hundred and ninety thousand dollar loan with Stockman Bank. Larry Heimbuch and Barry Rakes explained to Mr. Finneman that District II is not liable for the loan, because it was loaned strictly to District I. Barry Rakes stated that he would like to see the split done without tearing everything apart. Jim Finneman asked Mr. Jeff Wallace what he thought of the issue. Jeff Wallace stated to the Board that he was in favor of the split and felt that they had to do it. Mr. Wallace expressed that if they split then each District can work on what they believe should be done, and maybe get things done faster for their District. Jim Finneman asked Jeff if he felt it would be easier to manage if they split. Mr. Wallace stated that it is always easier to manage a smaller operation.
Mr. Allen Gierke, machine shop foreman, asked what they would do with the machine shop if they split. Barry Rakes replied that both district need the machine shop. Larry Heimbuch stated that they need the letter stating the intention to split before they could start the process to determine how to split. Larry Heimbuch explained to everyone present that the pumping plant power is already split with separate contracts with Western Area Power. Don Buxbaum stated that a split of the districts could benefit both sides, but also warned that it would cost the producers whether they split or not.
The subject of burning the ditch in the spring, and getting water on sooner, was discussed at length by everyone present. It was mentioned that maybe the producer will need to help with the burning in the spring. Tim Kortum and Allen Gierke spoke that there are a lot of issues they have to deal with when they are burning that the producer may not know about. Allen and Tim stated that they put in a lot of hours in the spring trying to get water on sooner. Tim Kortum expressed that there are days that the Sheriff’s office closes them down due to wind, they can’t burn due to weather, and many other things. Tim stated that with more and more pivots there is going to be more of a demand for water to be turned on sooner.
More discussion of the two districts splitting was brought forward. Ray Roethle spoke that if District II wants to split there is nothing that the other district can do. It was spoke of that the decision would not be made without a vote from the producers. James Whitmer stated that he would like to protect what was rightfully District I. Barry Rakes agreed. James Whitmer felt that it has been understated how difficult it will be to split the two districts apart. It was discussed whether they would need an appraiser for the assets owned by Buffalo Rapids Project. Ric Holden asked if Mr. Barry Rakes was going to bring back a management plan. Barry Rakes responded that District II already has a preliminary budget for the upcoming year. Mr. Holden stated that Mr. Rakes need a solid business plan and get back to District I with it. Barry Rakes responded that District II will have a meeting. It was stated that if the Board of Control could not work things out, that the Bureau of Reclamation would get water in the ditch. Barry Rakes expressed that they do not want the Bureau of Reclamation to take over, because they would like to see more charged for water than is currently being assessed.
Machine Shop Report:
Mr. Allen Gierke reported that all pumps have been pulled that were scheduled. He stated that the Terry #1 pump bearings were all good but two of them. The pumps will go to Billings to be worked on soon. Allen expressed that all the pump motors should be on a rotation schedule to be pulled and checked every six years. Allen reported that the Glendive II pumps have been pulled up and out of the water. Allen also expressed that they should look into locating a spare pump for District I. Allen stated to the Board that he had heard a rumor that they were not going to be able to work on pumps for Lower Yellowstone Irrigation. He called Lower Yellowstone Irrigation and expressed to them that they would be taking in outside work as long as there was time to have all of their own pumps done for water season. He expressed to Lower Yellowstone Irrigation that they would operate the same as they have in the past.
Shop Report:
Tim Kortum reported that they have completed Lateral 3.2 in Shirley, except for clean up and a meter instillation, which they will do when the weather is better. The crew will go on to Lateral 34.5 in Glendive and finish that pipeline when weather permits. Mr. Jeff Morrison is working on Lateral 2.9 in District I, and will start again when weather permits. Tim expressed that they do not want to attempt pipelining through Crissafulli trailer court until spring due to so many utilities located in that area. Tim stated that most of the employees are on vacation if they have any time accrued. Tim expressed that there are a handful of employees that are working in the shops doing inventory and other inside work that needs to be done. Jim Finneman asked Tim about the canal lining project. Tim stated that most of the product is bought to finish the project, but they had considerable problems with the system they had for applying the product to the canal. Tim expressed that the canal lining will work but they need to use a different technique.
Mr. Ric Holden passed for all present a list for CPA recommendations and Board of Control policy issues.
Item#1: Ric Holden made a motion that the project manager and Chairman of the Board signature stamps be given to the Board Chairman for destruction and that the Chairman of the Board of Control, District I and District II Board members be authorized to serve as checking account signors. Effective January 01, 2010. James Whitmer seconded the motion. All in Favor.
Item #2: Ric Holden made a motion that the project manager be removed as an authorized signor on Buffalo Rapids accounts. Effective January 1, 2010. Don Buxbaum seconded the motion. All in Favor.
Item #3: Ric Holden made a motion that the Buffalo Rapids “American Express” credit card be collected and given to the Board Chairman. Jim Finneman seconded the motion. All in Favor. Pat Davis requested that the Chairman of the Board collect the cards. Ray Roethle agreed.
Item #4: Ric Holden made a motion that travel expense reports be submitted by management and employees to explain costs and business purpose of the trip. James Whitmer seconded the motion. All in Favor. Mr. Holden passed examples of travel report forms to be copied and used for travel trips.
Item #5: Ric Holden made a motion that the project manager obtain pre-approval of travel costs and explain trip purpose to the Board of Control. James Whitmer seconded the motion. All in Favor.
Item # 6: Ric Holden made a motion that the Chairman of the Board collect all Costco membership cards. Jim Finneman seconded the motion. All in Favor.
Item # 7: Audit report page 3. “There is no system for tracking and recording inventory in the district’s accounting system. We also noted weak or non-existent physical controls over inventory of supplies, which are stored in the yard and shop.” “We recommend management gather physical count of inventory for budget financial records.” James Whitmer stated that what he remembered from the meeting with the CPA is that it would take a QuickBooks expert to assist the bookkeeper to install the inventory into the accounting system, and that at this time it would take time to do that. Mr. Holden was told that there is a physical count and an inventory done every year, and it was brought to the Board meeting when completed for the Board’s review if they so chose. It will be looked into further with an accountant at a later date.
Item # 8: Financial Reporting-Cash balance sheet-new Manager? Pat Davis reported that there is a balance sheet available in her accounting software. The Balance sheet read almost exactly like the cash balance sheet that she currently gives the Board every month. It will be looked into further with an accountant at a later date.
Item # 9: Grants-We need a “report to include, grants dollars amounts, amount received, amount remaining, construction progress, remaining timeline.” Mr. Holden was informed that those financial figures are currently available when Mr. Schwarz fills out the quarter reports for each grant file. Mr. Holden recommended to the Board that they hire Mr. Mike Carlson to go through the grant reports and give a status report to the Board. James Whitmer made a motion seconded by James Jim Finneman to contact Mr. Mike Carlson and see if he can give a grant report to the Board for less than five hundred dollars, and if more than that amount Mr. Holden is to report back to the Board with the estimate. All in Favor.
Item # 10: Employee Receivables-Personal use of Buffalo Rapids charge accounts.
A. Need a line item in the budget
B. Need to track employee personal use purchases as a receivable.
C. Need a written agreement with employees on paycheck withdrawls-On Hold
Pat Davis explained to Mr. Holden that there are line items already used for personal purchases and they are tracked through the accounting system, through the budget and as a receivable. The Board decided that the written agreement for withholding from an employees paycheck would be a union issue.
Item # 11: Payroll-employee benefit costs represent a 40 percent burden rate on payroll subject to union negotiation.
Item # 12: Ric Holden presented to the Board an authorized off-site backup company by the name of Carbonite. He requested that the bookkeeper be authorized to purchase and install the off-site backup program. Pat stated that she would contact her IT personal, Darryle Pisk, to ask his opinion on the subject.
Item # 13: Financial Results- year to date net loss of $170,000.00 as of September 25th, 2009. Recommendation-“The Board should work for proper budgetary review.”
Manager search sub committee report:
Mr. Larry Heimbuch passed handouts for the Board concerning revenue for machine shop since 2004, equipment rental revenue since 2004, and outside work revenue since 2004. Larry Heimbuch and members of the Board discussed the revenue figures on the handout and how they could pertain to the deficit in District I. Larry Heimbuch also handed for the Board’s review copies of Montana Code Annotated that discussed the issues of hiring a manager for an irrigation district. A contract was also passed for the Board’s review of the project manager for the Lower Yellowstone Irrigation Project. Larry expressed that they are not at this time actively seeking a manager for Buffalo Rapids Project until the Board decides if they want to split the two districts.
Union negotiating subcommittee report:
A subcommittee meeting will be held on December 10, 2009 with out representatives from the union. A meeting will be held on December 16, 2009 with representatives from the union. Mr. Barry Rakes stated that he had talked with Ted Handel, state mediator, and that he would be free for a speaker phone meeting with the subcommittee on that day. Barry also stated that he had asked Mr. Handel about the project hiring a lawyer, and he stated that there are cheaper ones just as good as the one that they are looking to hire, and if they would like he could get them a list of names.
Mr. Ric Holden brought to the Board handouts of a letter from Associated Employers, and emails from Department of Revenue. Mr. Holden also handed to the members of the Board a worksheet of compensated for the employees of Buffalo Rapids. Mr. Holden stated that he felt they needed to deal with the large liability of compensated absences that they have. Mr. Holden made a motion that the Buffalo Rapids Board of Control close operations during the holiday season for 15 wording days from ___________of December thru January __________, to allow the usage of first accumulated “comp time” and then second the usage of accumulated vacation time. This will represent time off with pay except for those employees without any or enough comp and/or vacation time then it will be time off without pay. After much discussion as to the feasibility of this and the practicality of all employees leaving the project for any predetermined period of time the motion failed due to a lack of a second. Tim Kortum shared with the Board that the employees customarily take the holiday season off if they have the time available, and that most employees take their vacations in the winter months if possible. Pat Davis will bring to the Board a year end compensated absences worksheet liability to the Board at the January meeting.
Ric Holden passed for the Board a copy a page of the managers’ contract that pertained to the vacation time given per year. Mr. Holden stated that in the contract it states that annual vacation of a period not to exceed 15 days, with pay, at such time as approved by employer. Dave is currently given vacation days according to state statute. Ric Holden had questions as to whether Dave Schwarz is entitled to his accumulated vacation time that he has accrued. It was stressed to Mr. Holden that he should possibly contact the Department of Labor or Dale Hubber as to the legalities of Dave’s vacation time accrued. Ric Holden made a motion for the Board of Control to authorize the Project Manager to take off 15 days of vacation beginning December 21, 2009 until January 12, 2010. Jim Finneman seconded the motion. After much discussion and urging to look into the legalities of forcing Dave to take vacation time Mr. Holden withdrew his motion. It was determined that they would talk with Dale Hubber and make a decision at a later date.
FINANCIAL REPORT:
Pat Davis presented current budget figures which included payroll and expenditures for December. 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. Transfers were signed from District II to loan District I $33,325.00 for the month of December.
James Whitmer made a motion, seconded by Ray Roethle, to approve the Treasurer’s report and the transfer of $91,249.55 for District I. Jim Finneman made a motion, seconded by Scott Sackman, that the Treasurer’s report and the transfer of $60,082.30 for District II be approved. Motions carried.
Pat informed the Board that they were able to retrieve all files and databases for the office computer. Pat also informed the Board that they would receive grant money for lateral 3.2 in District II and grant money for lateral 2.9 in District I. The D.N.R.C informed Dave Schwarz that the final ten thousand would not be available for the work done on lateral 3.2 until spring. Dave and Pat are working with the D.N.R.C. on getting that money available to the District right away since the pipeline is completed. Pat stated that Prairie County assessments were in, but Custer County and Dawson County would not be available until the middle of December. Pat explained that they had to rectify a mistake that had been made on Dave Schwarz’s P.E.R.S. since 2004. Pat was notified of the mistake by P.E.R.S. and enlisted the help of an accountant from Strom and Associates to correct the overpayment that was given to Dave Schwarz over the years. Pat asked for the Board to make a decision as to who they would like to perform the 2009 audit. She stated that she needed the audit done by June 1st 2010 for financial reports that needed to be submitted for the Department of Administration. It was decided that Pat and members of the Board would look into the financial costs of hiring a different auditor or staying with Strom and Associates. Pat asked all members of the Board to please have any agenda items into the office by the last day of the month so she has time to put it on the agenda and have notices ready to send out.
Pat spoke with the Board that as a Board she would like them to set some guidelines for her job duties. She explained to the Board that she would not be performing the managers’ duties, and was not comfortable with the Board asking her to do so. Pat Davis also expressed to the Board that with so many Board of Control and District meetings, along with subcommittee meetings being held, she would like some help in the office. The job requirements of attending the meetings and writing the minutes, along with her regular job duties were beginning to be too much for one person. She stated that she is now working overtime and on weekends to get everything done, but with the extra scheduled meetings and the length of the meetings, she does not believe she will be able to have everything completed on time with out help.
Pat asked the Board to please take a look at the proposed budget for the 2010 operating year. She informed the Board that the figures that she has in the 2010 budget are a starting point and that she wants the Board to become completely involved this year when determining the budget. She would like the Board to be responsible for the budget amounts that will be there for the 2010 operating year. Mrs. Davis recommended that they hold a separate meeting and for each Board member to sit down with her to see what revenues and charges are put into each line item on the budget. On a motion made by Mr. James Whitmer and seconded by Jim Finneman it was decided to table the 2010 budget until a date can be set at the next regular scheduled meeting in January.
Mr. Doug Buxbaum was present to speak with the Board, on behalf of the Dawson County Commissioners, about the back taxes owed to Buffalo Rapids for Rainbow Estates Subdivision. Doug explained to the Board that he had been contacted, the same as Buffalo Rapids, concerning the purchase of Rainbow Estates lots by an outside entity. Doug spoke that it would cost Buffalo Rapids some money to get the water to the lots, but he felt it would be worth forgiving the back taxes and cleaning the lateral to deliver water, to get the lots back on the payroll and receive income for those taxes from this year forward. Doug stated that the Dawson County Commissioners had already made the decision to forgive the Dawson County taxes and that included the back taxes owed to Buffalo Rapids. Mr. Buxbaum passed for all members copies of MCA codes that pertained to suspension/cancellation of property taxes. Doug expressed that the commissioners of Dawson County would like to work with Buffalo Rapids on the issue.
James Whitmer presented to Pat Davis an invoice for the services of Len Stanton of Associated Employers. Members of the Board have been using his services for management consultation over the past several months. Some of the members of the Board were under the understanding that his services were for free, but it was determined that only the first five hours on consulting were free, and any time after that was at the rate of $85.00 per hour. It was determined that his services will still be used at the rate per hour.
Next regular scheduled meeting will be held on January 13, 2010 at 3:00pm.
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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