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February 18, 2010 District I Meeting Minutes

MINUTES
of the
MEETING OF THE COMMISSIONERS
of the
BUFFALO RAPIDS DISTRICT I
Glendive MT

February 18, 2010
A Special Meeting of the Members of the Buffalo Rapids Project Board for District I was held on the eighteenth day of February 2010 at 7:00 pm in the Courtroom of the Dawson County Court House.

There were present and participating at the meeting:
Commissioner Don Buxbaum
Commissioner Ray Roethle
Commissioner James Whitmer
Member at large Rick Holden

Also present were Mike Carlson, Renee Mueller. Producers present at the meeting were asked to sign in. The two sign in sheets are submitted and made a part of these minutes as Attachment I; pages 1 and 2.

The meeting was called to order by Chairman Don Buxbaum. The purpose of the meeting was to inform the producers in District I of the progress they have made with District II and the possibility of the two districts splitting up

Don reviewed a letter from District II to District I expressing District II‘s intent to split with District I. This was the official letter from District II. The letter is the first step necessary for the split to take place. District I Commissioners have accepted the letter of intent. Don reported that the Board had made the decision to hire Mike Carlson to review District I pipeline projects along with Grants and EQIP funding status. He was also asked to put together an inventory of property to assist the split up the assets of the two districts.

Mike Carlson gave a presentation intended to update producers on the current status of District I Projects. The status of those projects was presented in a handout titled District I Projects. This hand out is submitted and made a part of the minutes as Attachment II pages 1,2,3,4. Mike went into some further detail on Lateral 34.5 Pipeline in District I.
This project being more complicated due to the need to cross under the Highway Interstate 94. through a trailer court under highway 16 under BNSF railroad tracks and is adjacent to many small subdivisions. The question was presented by a member of the crowd as to how this project became a priority. Larry Heimbuch stated that past practice was to have the Board review and approve all pipeline projects. Going back through previous minutes Larry found that this practice was dropped sometime between 2005 and 2006. Larry feels that the Board really didn’t know that this project was going on. Mike, addressing the reasoning for the project surmised that the fact was that of the ditches in question, 34-5 was all clay, at the beginning, further down the line all gravel and near Albertsons, all sand. So the reasoning was most likely due to the condition and the material content of the ditch in question. However, he stated that “we still need to be able to fund these projects.” “The more of these pipelines we can fund the more we can save on maintenance in the future.”

Larry Hass posed the question; Who is liable for the condition of the culverts under the highway etc. Don Buxbaum stated that the highway department is liable and that there were at least 3 culverts in very bad condition. Larry Hass felt that this should be confirmed for sure with the State. Don Buxbaum asked Larry Hass to check with the State Highway Dept to make sure that they are liable. He asked that we stay on track and gave the floor back to Mike Carlson.

Mike Carlson continued on in regard to the amount of paperwork BRID I and II will have to get done on all the projects that we have received grants on in the past. There did not seem to be a lot of record keeping going on in regard to the amount of labor being provided by BRIP. Mike stated that a revision in the plans on L 34-5 has been submitted. The plan is to stop this project for this year once the pipe is under the highway and railroad tracks and back into the ditch. It was stated that they are ready to move forward on this project weather permitting.

The Chair recognized Donnie Rau, who asked: Why were Lateral 2.9 and 7.6 combined into one grant. Mike stated that he was unable to find out the reasoning behind this move. This concluded Mike Carlson’s presentation.

Commissioner Ray Roethle gave an overview of Administrative and Management Changes for Districts I and II as well as the findings of the Fiscal Audit for 9/25/09.
The changes made were made effective immediately. The list of changes are submitted as part of these minutes as Attachment III. A few items were discussed at length. Item 1 The loan was suppose to be paid on as pipelines were put in and we got the EQIP money in. This didn’t happen, the loan was rolled over several times and only interest was being paid. The board made the decision to make a $31,193.88 payment on the loan to stay in the good graces of the Bank. We will have to borrow money to finish up our current pipeline projects as the grants and EQIP money will not cover all of the expenses. If we don’t finish them we would be required to return the $90,000.00 received on Lateral 34.5 pipeline project. The project and paper work need to be completed before we can receive the balance of the grant. Item 12. Don Baxbaum corrected the amount on the list from $5,000 savings to $6,000.00 saving. It was felt the services being provided by the GPS Company wasn’t worth the money that was spent. We were not receiving anything of substance for the money paid out. Item14. The issue of cell phones provided to BR employees’ wives will have to be addressed during union contract negotiations. To change it now may violate past labor practices, which could land us in a lawsuit brought on by the Union. Don Buxbaum stated that the board is working on an Employee Policy Book and By Laws for future guidelines.

The chair called upon Larry Heimbuch to give a report on the status of the EQIPment owned by both districts. A list was compiled and split. The committee for this task was:

DISTRICT I DISTRICT II
Bryan Robson Rick Harding
Donnie Rau Scott Sackman
Vic Dienes Ray Strasheim
Larry Heimbuch

This list has not been approved by both boards yet. Don Buxbaum and Barry Rakes will sort out the pickups. Machinery List showing the split of EQIPment submitted as part of these minutes as Attachment IV. Larry stated that both districts are going to work on projects that are in progress together and try to get them completed before we actually split up the employees between districts. This is an agreement that they are still working out the details on.

Regarding the Machine Shop, an agreement was reached on the value of the building, EQIPment bronze and other machine shop inventory (excluding the Stainless Steel Pump shafting). The value is $132,748.00. 58.5% of that is $77,657.00 which is the amount District II will owe District I. for their percentage of the Building transaction.

A tentative agreement was reached because District I owes District II for the pipe on the Brian Whittmayer pipeline project. The idea is to do a swap for the amounts we owe each other. When the EQIP money is received for the Whitmer pipeline project, it will be turned over to District 1. In turn District 1 will turn over their 58.5 percent share of the building EQIPment and stated inventory to District II. (Example) Out of the approximate $174,000.00 expected funds from EQIP, District I would have had to pay approximately $72.210.00 back to Dist II for the pipe loan. Instead of us paying them back for the loan and them paying us for the building they will turn over the EQIP funds to District I. Then District II will only have to come up with the difference between their share of the EQIP money, (approx $72,210.00) and the $77,625.00 they will owe us for our share of the building. A list of inventory included in this transaction is submitted as part of the minutes as Attachment V. A second part of the agreement is that District I and II will work together to complete this project as soon as possible. EQIP funds will be received after the project is complete. Also there is a mutual agreement that District I will bring work to the machine shop and District II will in turn do the work for us. Emergencies will be handled as emergencies.

As for the aforementioned Stainless steel pump shafting. It was agreed that both districts will own this property together. When it is sold the profits will be split as in the past 58.5% to District I and 41.5% to District II. The shafting will be stored in the machine shop with District II inventory until such time that it is sold. There is no agreement as to a charge to District I to store the pump shafting in the District II building.

The above proposal is pending the approval of both boards.

It was discovered that the office building is also owned by both District I - 58.5% and District II - 41.5%. There was no decision as to how this would be handled yet in the split. They may buy us out or possibly sell the building. This will be taken up at the next joint meeting along with the issue of other buildings EQIPment tools and pipeline inventory.

Union Negotiation Committee: Presentation by James Whitmer, Chairman

COMMITTEE MEMBERS

DISTRICT I DISTRICT II
Doug Buxbaum Barry Racks
Rick Holden Rick Harding
James Whitmer

In December this committee got together with the Union Reps in hopes of seeing a union contract. In stead the Union Rep requested that we go into a process called I.B.B. (Interest Based Bargaining) This is suppose to be a less confrontational type of bargaining. Because we are a public entity we can use a state mediator at no cost to us. So, the committee met with the mediator and it sounded like this may be a worth while way to go. In February we meet twice with the Union. This first meeting was a process of learning how to use IBB as well as getting some of the issues out on the table. This meeting did not go to well. The Union Rep was throwing out a lot of demands. This is not how the IBB process works. The mediator stepped in and he basically said we are going to have to play nice. So during the second meeting we tried to work things out. It just became clear to everyone that this was not going to work. Knowing that in a short amount of time we will be splitting apart. The District I negotiating members felt that there were going to be a lot of differences in the way District I will operate as opposed to the way District I and District II have been operated in the past. At this time what we were suppose to do was negotiate a contract for Buffalo Rapids District I and II. It would then spill over and be good for both districts after the split. We felt this was impossible and our mediator was astute enough to recognize this. So he separated the negotiation committee from labor and their union rep and posed the suggestion that we draft a Memorandum of Understanding that takes us to the time of the split. At that time each district would negotiate a separate contract. We felt that sounded good. This is where we are in the negotiation process.

FINANCIALS
Rick Holden reviewed the 2010 budget. The proposed budget and Cash Budget Balance Sheet for District I are submitted as part of these minutes as Attachments VI pages 1,2 and Attachment VII page 1.

This budget was built on the premise that we would have the same amount of employees for the first 6 months of the year. The second half of the year, we are calculating keeping 4 full time employees. This budget reflects a reduction in the area of the shop as that will all be handled by District II after the split. This budget could change if we don’t have money for four employees we won’t hire four employees. Under Administration we are fortunate enough to have two volunteers to take over as joint managers possibly till the fall of 2010. Those volunteers are Larry Hiembuch and Don Buxbaum. They are volunteering to do this for no pay; however, they do ask that we pay Workers Compensation and supply gas, mileage or a pickup to drive. We are expecting to have to hire an attorney to deal with union contract and to deal with the grants, so that is an extra cost to District I.

We have an emergency situation on the Rod Ashe place. The canal is leaking; it is at the top of a hill and is made up of gravel. It is almost to the point it could wash the whole canal out. If it washes out it would be all but impossible to get up there and fix. This needs to be repaired. We are estimating that we are losing approximately 4 acre feet. Rick asked for volunteers to help repair this problem. Larry Heimbuch has checked into a quick and temporary fix by using a clay, dirt and betonite mixture. This project is to be tackled as soon as possible. We will have to try to get a grant to do a permanent repair job. A question was posed as to why we don’t use the liner we already have and it was stated that when tried in the past it was a failure. To sum up Rick told the producers that the budget shows that we need a lot more money then we have.

DEBT SUMMARY is submitted as part of these minutes as Attachment VIII. The summary reflects the fact that District I is going to have to borrow some money from the bank and hopefully the bank will agree to this. The bank would like for us to have the payment made directly to them from the Treasurers office before they distribute our share of the tax revenues. The board believes this would work out for us. We are still awaiting an answer from the bank as to approval of the loan request. A question from the floor by Sandy Helmuth was if anyone had looked into getting another revenue bond or adding to the one we have for the new pumps. It was suggested that we could use the funds for construction expenses and spread those payments out over a longer amount of time. This could leave us more money in the budget for operational expenses. Larry Heimbuch stated that he believes it would take some time to get this done but that it was worth looking into. All the board members recognized this as a good idea and will look into that as a possibility. However, the debt we owe now needs to be taken care of so that we can complete the projects already started. Rick told the producers that the board is proposing an increase in the taxes for no less than $4.00 an acre at this time. This informational meeting was being held to inform producers what we are up against if we are to save this District.

Don Buxbaum handed out a list of committees and the appointees to each of those committees. He also handed out a sign up sheet to be turned back into him with those names of individuals interested in volunteering there time in this effort. Appointed and filled Positions too date list is submitted as part of these minutes as Attachment IX and a list of Open positions is submitted to the minutes as Attachment X.

PUBLIC COMMENT:
There was a lengthy discussion on the amount of comp time that has been accumulated. We will have to address this in our policies manual and it will also have to be negotiated with the Union. We cannot change any of our labor practices until the negotiations take place for our district.

A discussion regarding taxes going back down after debt is paid off. There was also some discussion on adding a sunset clause to the tax assessments. Rick Holden stated that is not necessary because the board has to reassess the budget every year and if the funds are not necessary they would automatically lower the taxes. He stated that none of the Board members from District I would be opposed to lowering taxes if possible.

Another question posed from the floor was if we could use contract labor to finish some of the projects that are already started. The board is looking into this too. Some projects have already utilized contract labor. Delmar Goosen was wondering about getting the L34-5 project completed. Mike Carlson feels the project is very close to being done. Jim Trangmoe asked if it wouldn’t take a while to get the tax money if we raised taxes now. Don Buxbaum said you can only raise the taxes in May. Rick Holden stated that we could get half of those the following November. Sandy Helmuth suggested again suggested that a Revenue Bond would really help out with the construction expenses.

All of the above will be considered and decisions made at the next regular meeting in March. No specific date was given.

There being no further business to consider and no objection the said meeting of the commissioners of the Buffalo Rapids Board for District I was adjourned at 10:15 PM

ATTESTED:


______________________________ _________________________________
Pat Davis, Assistant Secretary Don Buxbaum, Chairman

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