May 14, 2008

Minutes of the regular meeting of the Board of Trustees of the North Shore Sanitary District held on Wednesday, May 14, 2008 at 9:30 A.M. at the District Office of the Raymond E. Anderson Complex located in Gurnee, IL.

The meeting was opened with the Pledge of Allegiance.

On roll call, the following Trustees were present:

Daniel M. Pierce, President

Stephen J. Drew, Vice President

John R. Paxton, Treasurer

James E. Swarthout

Effie Wroten

Staff members present were General Manager Brian Dorn, Assistant General Manager Dave Miller, Attorney Jay Ukena, Director of Engineering Services Jai Gupta, Director of Laboratory Services Joe Robinson, Director of Operations Gary Sowma and Director of Technology Services Pete Russo.

There were no comments from the public.

President Pierce presented the Consent Agenda, as follows:

A. Approval of the Minutes of the Meeting held on April 9, 2008.

B. Consideration of Bills.

Wastewater Treatment Fund $3,303,729.12

Check Nos. 140687 through 140693, Check Nos. 140743 through 140809,

Check Nos. 140818 through 141036, Check Nos. 141039 through 141079.

C. Financial Report, March 2008.

D. Hearing Summary, April 8, 2008.

E. 1^st Quarter 2008 Worker’s Compensation Claim Update.

F. Worker’s Compensation Audit for Policy Year 12/15/06-12/15/07.

G. IPRF Safety Grant Award.

H. 2007 EAV, Tax Rates & Extension Summary.

I. IMRF 04/03/08 Memorandum regarding 2007 Investment Return and Impact on

Employer Contribution Rates.

J. Water Shutoff Extension, 2122 Grove Avenue, North Chicago.

K. Summer Help Wage Survey.

L. Correspondence.

1. 04/22/08 letter to Rachel Bose from Premier Title Company expressing thanks to

Krista Tighe.

M. Lake County News Sun.

1. ‘Sanitary district reinstates public tours’, 04/11/08.

N. Thank You Card.

1. Brian Kretschmer Family.

O. Authorize Payroll and Finance Department to issue District checks to meet expenses where

necessary for payroll and to avoid interest and/or penalties before the next Board Meeting.

It was moved by Trustee Swarthout and seconded by Trustee Paxton, that the items under the Consent Agenda be approved.

On roll call, all Trustees present voted "Aye". Motion declared carried.

President Pierce presented the President report as follows:

President Pierce reported that he attended the 2008 Clean Water Policy Forum Conference in Washington, D.C. President Pierce reported the conference was attended by many wastewater agencies across the country. It was discussed that there are going to be many more mandates in effect with less federal funds. President Pierce stated that one big concern is the abundance of pharmaceutical drugs in wastewater and their impact, on the Environment. President Pierce stated that our Agency is in better financial shape than many other agencies and that we should pat ourselves on the back.

General Manager Dorn presented the Management report as follows:

A. Presented the Adoption of FY09 Capital Improvement Plan.

General Manager Dorn reported that the FY09 Capital Improvement Plan had been distributed to the Board members to review the proposed capital improvement projects for the new fiscal year. General Manager Dorn gave a brief overview of the FY09 Capital Improvement Plan and asked the Board to adopt the FY09 Capital Improvement Plan.

It was moved by Trustee Paxton and seconded by Trustee Swarthout that the FY09 Capital Improvement Plan be adopted.

On roll call, all Trustees present voted "Aye". Motion declared carried.

B. Presented Engineering Agreement.

1. Clark Dietz, Inc., Gurnee STP Building 340 Switchboard Replacement, $44,790.00.

General Manager Dorn stated that this item was held over from the last Board meeting to review some of the legal language contained in the Agreement. This Agreement is to provide engineering services associated with the replacement of the existing 480 volt switchboard section of USS-2 located outside Building 340 at the Gurnee STP with a new switchboard located inside Building 340. General Manager Dorn reported that our legal staff had reviewed the Agreement and was satisfied with the revised language as written.

It was moved by Trustee Paxton and seconded by Trustee Drew that the Engineering Agreement with Clark Dietz, Inc., Gurnee STP Building 340 Switchboard Replacement in the not to exceed amount of $44,790.00 be approved.

On roll call, all Trustees present voted "Aye". Motion declared carried.

Trustee Swarthout addressed the Board about the Release with Donohue and Associates which had been presented at the March 2008 Board meeting and tabled at the request of President Pierce in order to allow further review by our legal staff on the contents of the Release. General Manager Dorn stated that the Release with Donohue and Associates was specific only to 65 items listed in the Release, and that Donohue was still responsible for any other potential contract issues not contained in the Release. General Manager Dorn stated that the language was originally too broad in the Release but had been thoroughly reviewed by our legal staff and was now acceptable after several revisions. Trustee Swarthout suggested that if our legal and management staff is satisfied with the language in the Release it should be put on the agenda for the June meeting. Trustee Swarthout feels that Donohue & Associates has been very fair with North Shore Sanitary District.

Assistant General Manager Miller presented the Administration Division report as follows:

A. Presented Request for Adjustment to User Charge Invoices.

1. John Terrell, 608 Ryan Place, Lake Forest.

Assistant General Manager Miller reported that the District was in receipt of a letter from Mr. John Terrell dated April 3, 2008 regarding the service address of 608 Ryan Place, Lake Forest. Mr. Terrell states his NSSD invoice dated March 8, 2008 was substantially higher than usual due to a running toilet. He indicated that he repaired the toilet himself and does not have the receipts.

Mr. Terrell is requesting NSSD to adjust his sewer bill for that quarter. Mr. Terrell’s average billed usage for the past year has been 18 units per quarter. Assistant General Manager Miller reported that an adjustment to Mr. Terrell’s account would result in a credit of $37.70.

It was moved by Trustee Paxton and seconded by Trustee Drew to approve the adjustment to the account of Mr. John Terrell, 608 Ryan Place, Lake Forest.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

2. Fred Bairstow, 800 Clayton Street, Waukegan.

Assistant General Manager Miller reported that the District was in receipt of a letter from Mr. Fred Bairstow dated April 10, 2008 regarding the service address of 800 Clayton Street, Waukegan. Mr. Bairstow stated that his outside water hose was running for a couple of months during the winter. He indicated that the water was directed down a hill behind his home and did not enter NSSD sewers. The City of Waukegan notified Mr. Bairstow about his high water consumption on his February 19, 2008 read.

Mr. Bairstow is requesting NSSD to adjust his sewer bill for that quarter. Mr. Bairstow’s average billed usage for the past year has been 9 units per quarter. Assistant General Manager Miller reported that an adjustment to Mr. Bairstow’s account would result in a credit of $234.32.

It was moved by Trustee Paxton and seconded by Trustee Drew to approve the adjustment to the account of Mr. Fred Bairstow, 800 Clayton Street, Waukegan.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

3. Fred Pinsel, 1261 Lynn Terrace, Highland Park.

Assistant General Manger Miller reported the District was in receipt of letter from Mr. Fred Pinsel dated May 1, 2008 regarding the service address of 1261 Lynn Terrace, Highland Park. Mr. Pinsel states that vandals opened his outside water valve and the water was running for a few days before he noticed it. Mr. Pinsel indicated that he never uses that water valve since he has an underground sprinkler system.

Mr. Pinsel is requesting NSSD to adjust his wastewater treatment bill for that quarter. Mr. Pinsel’s average billed usage for the past year has been 14 units per quarter. Assistant General Manager Miller reported that an adjustment to Mr. Pinsel’s account would result in a credit of $93.74.

It was moved by Trustee Paxton and seconded by Trustee Drew to approve the adjustment to the account of Mr. Fred Pinsel, 1261 Lynn Terrace, Highland Park.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

B. Presented Clarification to Bid No. 1287, Electrical Supplies – Steiner Electric Supply.

Assistant General Manager Miller stated that a two year contract for Bid #1287 Electrical Supplies was awarded to Steiner Electric Supply at the April 9, 2008 Board Meeting. Steiner Electric contacted the Purchasing Department on April 15, 2008 to discuss the price of steel-related products that were itemized in Bid #1287. Steiner Electric indicated that pricing for steel-related products has risen significantly since submitting their bid. The Purchasing Department responded by stating that the pricing submitted with their bid was firm and that North Shore Sanitary District would not accept any changes in pricing. Steiner Electric Supply responded that a letter was submitted with their bid requesting a discussion with North Shore Sanitary District when large fluctuations in market conditions occurs.

After review of the bid submittals, the Purchasing Department located the letter from Steiner Electric Supply which was missed during the bid evaluation process. The letter states that due to the current global conditions for raw materials, there have been numerous price fluctuations of raw materials mainly in steel, zinc, copper and petroleum based products. In the event of large raw material fluctuations, Steiner Electrical Supply would like to discuss alternative pricing.

Assistant General Manager Miller stated that typically the District does not accommodate a change in pricing but due to the fact that the District has had trouble getting bids in general, he recommended granting the contingency in pricing with the condition that the District would reserve the right to request quotes from other vendors. Should the prices go down, Steiner Electric Supply would then issue the District a credit.

It was moved by Trustee Swarthout and seconded by Trustee Paxton to approve the Clarification to Bid No. 1287, Electrical Supplies – Steiner Electric Supply based on what was discussed.

On roll call, all Trustees present voted "Aye". Motion declared carried.

C. Presented Sodium Bisulfite Storage Tank Agreement, Basic Chemical Solutions, LLS.

Assistant General Manager Miller reported that a three year contract for Bid #1268 Process Chemicals to supply sodium bisulfite to North Shore Sanitary District’s Sludge Recycling Facility was awarded to Basic Chemical Solutions at the March 21, 2007 Board Meeting.

Basic Chemical Solutions offered to supply North Shore Sanitary District with a 550 gallon storage tank with secondary containment to be used for the storage of sodium bisulfite throughout the term of the contract. Basic Chemical Solutions offered this tank free of charge without any additional costs to the District. When the storage tank was delivered to North Shore Sanitary District’s Sludge Recycling Facility, Basic Chemical Solutions provided onsite personnel with the Storage Tank Agreement, however this agreement was never forwarded to the Purchasing Department for review or action.

Basic Chemical Solutions has recently informed North Shore Sanitary District that the agreement is required and has asked that North Shore Sanitary District complete the agreement and return it as soon as possible. The District’s Attorney was provided a copy of the Storage Tank Agreement for review and did not object to any of the terms or conditions. It is recommended by Assistant General Manager Miller that the District execute this Agreement.

It was moved by Trustee Paxton and seconded by Trustee Drew to approve the Sodium Bisulfite Storage Tank Agreement with Basic Chemical Solutions, LLS.

On roll call, all Trustees present voted "Aye". Motion declared carried.

D. Presented OneBeacon Insurance Company Three Year Rate Guarantee.

Assistant General Manager Miller reported that OneBeacon Insurance Company has agreed to issue the casualty coverage as quoted for the 5/1/08 renewal on three year guaranteed rate annual installment basis. Assistant General Manager Miller stated that this is a policy extension that we have been requesting for a number of years without success until now. It is timely that this policy extension is being offered now as the insurance industry is very competitive at the present time. Should the insurance marketplace become less competitive, the District’s casualty insurance program will not be affected for the next three years. It is the recommendation of Assistant General Manager Miller that the Board accept this three year rate guarantee with OnceBeacon Insurance.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve the OneBeacon Insurance Company Three Year Rate Guarantee.

On roll call, all Trustees present voted "Aye". Motion declared carried.

E. Presented ICMA-RC Settlement Proposal.

Assistant General Manager Miller reported that the District received a letter from ICMA-RC, one of the District’s 457 Retirement Plan providers, regarding a settlement concerning improper trading practices that was made between the Securities and Exchange Commission (SEC) and the Massachusetts Investors Growth Stock Refund. This fund was previously included among the investment options in the District’s retirement plan.

A settlement fund was created to compensate plans that were affected by these improper trading practices. ICMA-RC has informed the District that it is entitled to $129.10 of this settlement and they would like the District to determine how to distribute this amount.

Assistant General Manager Miller reported that of the four alternatives offered, the District recommends that it proceed with the default alternative due to the fact that it appears to be the most equitable way to distribute the money to the employees that participated in the Massachusetts Investors Growth Stock Fund.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve the default alternative of the ICMA-RC Settlement Proposal.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

Director of Engineering Services Jai Gupta gave the Engineering Division report as follows:

A. Presented the following Bid Summary.

1. Air Cooled Chiller Installation Project for the Gurnee Administration Building, Amber Mechanical Contractors, Inc. of Alsip, IL in the amount of $72,840.00.

Bids were publicly advertised in the paper on April 22, 2008. On May 6, 2008 at 9:00 a.m. bids were publicly opened and read aloud. Responses received were as follows:

Contractor Total Bid Price

Amber Mechanical Contractors, Inc. $ 72,840.00

McDonough Mechanical Services, Inc. $ 79,497.00

Team Mechancial. $110,597.00

Air Con $129,710.00

Monaco Mechanical, Inc. $140,000.00

Martin Petersen Co., Inc. $144,900.00

Action Mechanical $148,000.00

International Piping System $175,000.00

Director of Engineering Services Gupta said that ELARA, the District’s Consulting Engineer for the project, has reviewed the NSSD Chiller Replacement Project bids submitted on May 6, 2008 and has subsequently spoken with the low bidder Amber Mechanical for clarification and conformance with the design intent. It is ELARA’s recommendation to award the bid to Amber Mechanical based upon their review.

It was moved by Trustee Swarthout and seconded by Trustee Drew to award Amber Mechanical Contractors of Alsip, IL the bid for Air Cooled Chiller Installation Project for the Gurnee Administration Building in the amount of $72,840.00.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

B. Presented the following Construction Change Orders.

1. C.O. No. 1, Roof Reconstruction at the Administration Building, J.J.L., Inc., d/b/a American Roofing and Repair, Increase of $15,591.00 and 141 Calendar Days.

2. C.O. No. 2, Identification Sign Fabrication and Installation at the Zion Sludge Recycling Facility and Clavey Road STP, Design Group Signage Corp., Increase of $675.00.

3. C.O. No. 10, Lake Forest Pump Station – Sewage Storage Basin, Keno & Sons Construction Co., Increase of 118 Calendar Days for Substantial Completion and 69 Calendar Days for Final Completion.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve C.O. No. 1, Roof Reconstruction at the Administration Building, J.J.L., Inc., d/b/a American Roofing and Repair, an Increase of $15,591.00 and 141 Calendar Days.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve C.O. No. 2, Identification Sign Fabrication and Installation at the Zion Sludge Recycling Facility and Clavey Road STP, Design Group Signage Corp., an Increase of $675.00.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve C.O. No. 10, Lake Forest Pump Station – Sewage Storage Basin, Keno & Sons Construction Co., an Increase of 118 Calendar Days for Substantial Completion and 69 Calendar Days for Final Completion.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

C. Presented the following Bid Waiver Requests.

1. BW-160, Disposal of Stabilized Sludge at Zion Veolia Landfill, $32.94/ton.

Director of Engineering Services Gupta reported that this Bid Waiver Request is for the disposal of fludge (District’s sludge stabilized with LaFarge’s fly ash) at Veolia’s Zion Landfill. This disposal has become necessary as the Dryer at the District’s Sludge Recycling Facility is functioning at a reduced capacity due to a leak in the heat exchanger coil. It is estimated that disposal to Veolia’s landfill will continue up to June 10, 2008 when the District is hoping to complete replacement of the existing coil with a new coil. Estimated total quantity of fludge to be disposed of is 23,500 tons at $32.94/ton.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve BW-160, Disposal of Stabilized Sludge at Zion Veolia Landfill in the amount of $32.94/ton.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

2. BW-161, Provide Technical Services of Andritz for Onsite Evaluation and Troubleshooting of Dryer Issues, $15,166.39.

Director of Engineering Services Gupta reported that this Bid Waiver Request was to have Andritz send its design engineer to the District’s Sludge Recycling Facility to study and resolve the problem of high bed temperatures in the Dryer. The design engineer visited the facility from 1/21/08 through 1/25/08 and provided the necessary help. The total cost associated with this visit is $15,166.39.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve BW-161, Provide Technical Services of Andritz for Onsite Evaluation and Troubleshooting of Dryer Issues in the amount of $15,166.39.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

3. BW-162, Replacement of Thermal Oil Piping and Support System at Zion Sludge Recycling Facility, $110,000.00.

Director of Engineering Services Gupta reported that this Bid Waiver Request is for the replacement of existing thermal oil piping and support system associated with the Dryer. The new heat exchanger coil proposed to be installed at the Sludge Recycling Facility has a different configuration for thermal oil pipe connections. This requires some of the existing piping and support system to be removed and replaced with new piping and support system. This work will be done on a time and material basis during the time when the existing coil is being replaced. Estimated total cost of this work is $110,000.00.

It was moved by Trustee Paxton and seconded by Trustee Swarthout to approve BW-162, Replacement of Thermal Oil Piping and Support System at Zion Sludge Recycling Facility in the amount of $110,000.00.

On roll call, all Trustees present voted “Aye”. Motion declared carried.

4. BW-163, Replacement of Dryer Heat Exchanger Coil at Zion Sludge Recycling Facility, $155,000.00.

Director of Engineering Services Gupta reported that this Bid Waiver Request is for the replacement of the Dryer’s existing heat exchanger coil at the Sludge Recycling Facility. The existing coil will be replaced with a new owner-furnished coil. This will inv