July 9, 2008

Minutes of the regular meeting of the Board of Trustees of the North Shore Sanitary District held on Wednesday, July 9, 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 on June 11, 2008.

B. Consideration of Bills.

Wastewater Treatment Fund. $2,322,029.45

Check Nos. 141750 through 141760, Check Nos. 141762 through 141791,

Check Nos. 141793 through 141795, Check Nos. 141797 through 141978,

Check Nos. 141987 through 142093.

Void Check Nos. 141761, 141792 and 141796.

C. Financial Report, May 2008.

D. Hearing Summary, June 10, 2008.

E. Spare Parts for Sludge Recycling Facility Dryer Sludge Distributors.

F. Correspondence.

1. Village of Green Oaks Sanitary Sewer Infiltration/Inflow Study.

i. October 8, 2007 correspondence from NSSD to Rezek, Henry, Meisenheimer and Gende regarding illegal sewer connections in Rondout area.

ii. January 24, 2008 correspondence from NSSD to Rezek, Henry, Meisenheimer and Gende regarding illegal sewer connections in Rondout area.

iii. June 9, 2008 correspondence from Village of Green Oaks to property owners regarding building inspection to identify illegal storm water connections.

G. Lake County News-Sun.

1. ‘Sanitary district hires pro to debug plant’, 06/13/08.

2. ‘Sludge Plant’, Talk of the County, 06/17/08.

3. ‘NSSD mistakes’, Talk of the County, 06/19/08.

H. 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 Paxton and seconded by Trustee Swarthout 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 feels it would be beneficial to recycle our treated wastewater. President Pierce stated that Northmore Golf Course currently has an agreement with the District and utilizes our Clavey Road effluent for their golf course. President Pierce stated that he recently approached Bob-O-Link golf course about utilizing our treated wastewater for their golf course but they felt it would not be cost effective at the present time. President Pierce stated that using drinking water for watering fairways seems an inefficient use of resources when North Shore Sanitary District has good water to offer.

General Manager Dorn gave the Management Report as follows:

A. Status of Minergy Winneconne Pilot Plant Vitrification Testing.

General Manager Dorn reported that he has asked Brian Jensen of Donohue & Associates to give a report based on the testing that has been performed last week with Milwaukee’s milorganite. General Manager Dorn felt it would be best to wait until the testing on our sludge was completed and give a complete report at the August meeting. General Manager Dorn did state the Milwaukee milorganite testing went well with no plugging and so far the testing with the District’s sludge was going well. General Manager Dorn also reported that the replacement of the coil on the dryer was ahead of schedule and should be completed within the week. General Manager Dorn stated that the dryer should be up and running at 100% very soon.

B. Presented Engineering Agreement.

1. Camp Dresser and McKee, Inc., Development of Framework for a Strategic Plan, $19,500.00.

General Manager Dorn reported that the purpose of this Engineering Agreement is to create a strategic plan framework for the NSSD for the future. General Manager Dorn stated that the Management Staff tried working on a strategic plan several years ago, but it was never completed. General Manager Dorn stated that by bringing in an outside source along with management staff and Board member input, the overall combined ideas would result in a plan for the future. Several of the items that need to be looked at are revenue streams for the future with rising costs of fuel, power, etc.; upcoming regulatory requirements; succession planning (i.e. current staff retiring, replacements, etc.) and an overall vision for the future of NSSD from both the Board and Staff’s perspectives. General Manager Dorn stated that Camp Dresser McKee, Inc.’s proposal would include a one day retreat with the District’s Management Team and one or more of the Board members to conduct an assessment and to establish the framework of a District-specific Strategic Plan.

Trustee Paxton inquired if any other firms had been looked into. General Manager Dorn replied that other firms had been looked into and that the cost to implement a full strategic plan was in the vicinity of $75,000 to $100,000. Trustee Paxton stated while he thought such a session could be useful, he questioned the amount of money for such a program for a one day retreat. Both Trustees Swarthout and Drew pointed out that the overall assessment involved 86 hours and included more than a one day retreat. Trustee Swarthout stated that he was for this plan, but did state that after the initial retreat and framework is developed that everything would be done in-house from that point on. Trustee Drew agreed with Trustee Swarthout. A short discussion followed with Trustee Swarthout stating that he wanted it noted that this is a one day workshop with Camp Dresser McKee, Inc. being approved with all future strategic planning being done in-house by District Staff.

It was moved by Trustee Drew and seconded by Trustee Wroten to approve the Engineering Agreement with Camp Dresser and McKee, Inc., Development of Framework for a Strategic Plan in the amount of $19,500.00.

On roll call, Trustees Wroten, Swarthout, Drew and Pierce voted “Aye”. Trustee Paxton voted “Nay”. Motion declared carried.

C. Presented The Pressure Pipe Inspection Company, F3 Condition Assessment.

1. Summary of April 2008 Testing.

2. Proposal for Failure Risk Analysis & Determination of Causes for Distress Wire Breakage & Pipeline Deterioration, $82,000.00.

General Manager Dorn reported that in April, 2008 the Pressure Pipe Inspection Company conducted an inspection of the District’s F3 Forcemain as required by a consent order issued by the State of Illinois and gave the following report. General Manager Dorn reported that in 2002 there were 59 pipes which showed distress with all of these being repaired using an internal carbon fiber wrap. Since the repair of these pipe completed in 2003, the inspection in April, 2008 indicates 27 new pipe exhibit distress and 4 pipe that were not identified as being distressed in 2002 now exhibit distress based on 2008 re-analysis of the 2002 data. Overall there are a total of 90 pipes exhibiting some level of distress which include the 59 pipe repaired in 2003. While there is a well-documented history of problems, including wire breaks, with the Interpace manufactured pre-stressed concrete cylinder pipe that was used in the F3 line, PPIC does not have accurate calibration information for the specific pipe used in the construction of the F3 Forcemain. The F3 pipe does not have any shorting straps; because of this there is a possibility that if the breaks are due to embrittlement, the total number of breaks could be overestimated. In addition, there are many variables that may have an impact on the rate of pipeline deterioration including operational stresses, environmental conditions etc. General Manager Dorn reported that because of the uncertainty of many of the variables mentioned that the District proceed to the next step in finding out the causes of the distress as well as to validate the wire break estimates.

General Manager Dorn stated that this further testing would involve excavating 3 or 4 pipes, chipping off the mortar and evaluating the wire. The cost to excavate and expose the pipe is not included in the PPIC proposal, and would be the responsibility of the District. General Manager Dorn requested that the Board approve the Proposal from Pressure Pipe Inspection Company for Failure Risk Analysis and Determination of Causes of Distress Wire Breakage & Pipeline Deterioration in the amount of $82,000.00.

It was moved by Trustee Swarthout and seconded by Trustee Drew to approve the Proposal for Failure Risk Analysis & Determination of Causes for Distress Wire Breakage & Pipeline Deterioration in the amount of $82,000.00.

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

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

A. Presented 2008 Connection and Annexation Fee Determination Report and Ordinance Change.

ORDINANCE

be it ordained by the president and board of trustees of the north shore sanitary district that ‘an ordinance establishing the fees and charges of the north shore sanitary district’ be amended as follows:

SECTION 2: CAPITAL RECOVERY FEES

2.1 Annexation Fees

As per an Ordinance Relating to Sewers and Sewer Systems, the following are the annexation fees for property to be annexed to the District. The fees will be calculated on the estimated population of the property to be served by the District, using the following schedule:

Each single-family dwelling sewer connection $1,360 per connection if annexed before 8/1/00

A condominium containing more than two bedrooms $1,508 per connection if annexed 8/1/00–8/31/02

shall be considered a single family dwelling $1,452 per connection if annexed 9/1/02–8/31/03

$1,820 per connection if annexed 9/1/03–8/31/04

$1,824 per connection if annexed 9/1/04–8/31/05

$1,728 per connection if annexed 9/1/05–8/31/06

$2,068 per connection if annexed 9/1/06–8/31/07

$2,004 per connection if annexed 9/1/07–8/31/08

$1,944 per connection if annexed after 8/31/08

Each two bedroom dwelling unit of a multiple $1,020 per connection if annexed before 8/1/00

family structure $1,131 per connection if annexed 8/1/00–8/31/02

$1,089 per connection if annexed 9/1/02 8/31/03

$1,365 per connection if annexed 9/1/03–8/31/04

$1,368 per connection if annexed 9/1/04–8/31/05

$1,296 per connection if annexed 9/1/05–8/31/06

$1,551 per connection if annexed 9/1/06–8/31/07

$1,503 per connection if annexed 9/1/07–8/31/08

$1,458 per connection if annexed after 8/31/08

Each one bedroom, efficiency single room $680 per connection if annexed before 8/1/00

dwelling unit of a multiple family structure $754 per connection if annexed 8/1/00–8/31/02

or condominium $726 per connection if annexed 9/1/02–8/31/03

$910 per connection if annexed 9/1/03–8/31/04

$912 per connection if annexed 9/1/04–8/31/05

$864 per connection if annexed 9/1/05–8/31/06

$1,034 per connection if annexed 9/1/06–8/31/07

$1,002 per connection if annexed 9/1/07–8/31/08

$972 per connection if annexed 8/31/08

Each industrial or commercial connection $340 per PE with 4 PE minimum if annexed before 8/1/00

For each population equivalent $377 per PE with 4 PE minimum if annexed 8/1/00-8/31/02

$363 per PE with 4 PE minimum if annexed 9/1/02-8/31/03

$455 per PE with 4 PE minimum if annexed 9/1/03-8/31/04

$456 per PE with 4 PE minimum if annexed 9/1/04-8/31/05

$432 per PE with 4 PE minimum if annexed 9/1/05-8/31/06

$517 per PE with 4 PE minimum if annexed 9/1/06-8/31/07

$501 per PE with 4 PE minimum if annexed 9/1/07-8/31/08

$486 per PE with 4 PE minimum if annexed after 8/31/08

2.2 Fair Capital Contribution Fees

As per an Ordinance Relating to Sewers and Sewer Systems, all property which was at any time exempt from ad valorem real estate taxes but becomes subject to said real estate taxes or any property obtained by another entity not required to be assesses ad valorem taxes shall pay the following fair capital contribution fees as a capital contribution to the plants and facilities of the North Shore Sanitary District:

Each single-family dwelling sewer connection $1,360 per connection if annexed before 8/1/00

A condominium containing more than two bedrooms $1,508 per connection if annexed 8/1/00–8/31/02

shall be considered a single family dwelling $1,452 per connection if annexed 9/1/02–8/31/03

$1,820 per connection if annexed 9/1/03–8/31/04

$1,824 per connection if annexed 9/1/04–8/31/05

$1,728 per connection if annexed 9/1/05–8/31/06

$2,068 per connection if annexed 9/1/06-8/31/07

$2,004 per connection if annexed 9/1/07-8/31/08

$1,944 per connection if annexed after 8/31/08

Each two bedroom dwelling unit of a multiple $1,020 per connection if annexed before 8/1/00

family structure $1,131 per connection if annexed 8/1/00–8/31/02

$1,089 per connection if annexed 9/1/02–8/31/03

$1,365 per connection if annexed 9/1/03 8/31/04

$1,368 per connection if annexed 9/1/04–8/31/05

$1,296 per connection if annexed 9/1/05–8/31/06

$1,551 per connection if annexed 9/1/06 8/31/07

$1,503 per connection if annexed 9/1/07 8/31/08

$1,458 per connection if annexed after 8/31/08

Each one bedroom, efficiency single room $680 per connection if annexed before 8/1/00

dwelling unit of a multiple family structure $754 per connection if annexed 8/1/00–8/31/02

or condominium $726 per connection if annexed 9/1/02 8/31/03

$910 per connection if annexed 9/1/03–8/31/04

$912 per connection if annexed 9/1/04–8/31/05

$864 per connection if annexed 9/1/05–8/31/06

$1,034 per connection if annexed 9/1/06–8/31/07

$1,002 per connection if annexed 9/1/07–8/31/08

$972 per connection if annexed after 8/31/08

Each industrial or commercial connection for $340 per PE with 4 PE minimum if annexed before 8/1/00

each population equivalent $377per PE with 4 PE minimum if annexed 8/1/00-8/31/02

$363 per PE with 4 PE minimum if annexed 9/1/02–8/31/03

$455 per PE with 4 PE minimum if annexed 9/1/03–8/31/04

$456 per PE with 4 PE minimum if annexed 9/1/04–8/31/05

$432 per PE with 4 PE minimum if annexed 9/1/05–8/31/06

$517 per PE with 4 PE minimum if annexed 9/1/06–8/31/07

$501 per PE with 4 PE minimum if annexed 9/1/07–8/31/08

$486 per connection if annexed after 8/31/08

2.3 Sanitary Sewer Connection Permit Fees

As per an Ordinance Relating to Sewers and Sewer Systems, the following are the fees to be charged for sanitary sewer connection permits:

Each single-family dwelling sewer connection $1,636 per connection

Each two bedroom dwelling unit of a multiple $1,227 per unit

family structure

Each one bedroom, efficiency single room $818 per unit

dwelling unit of a multiple family structure

or condominium

Each industrial or commercial connection for each $409 per PE with 4 PE minimum

Population equivalent

section 5.3 This ordinance shall be in full force and effect following its passage, approval, and publication as provided by law or on September 1, 2008, whichever date is later.

Assistant General Manager Miller reported that the 2008 Connection and Annexation Rate Determination Report results in a net increase in the Capital Recovery Fee and County Connection Fee. The last changes to these fees took effect September 1, 2007. Assistant General Manager Miller reported that this change also results in an ordinance change. Following Board approval, the ordinance change will be published in the Lake County News-Sun. The new rates may not take effect until at least 10 days after publication. To satisfy all legal requirements and remain consistent with previous ordinance changes, it is proposed that the new rates be implemented wi