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DRAINAGE DISTRICT MEETING

DISTRICT MILFORD #32

THURSDAY, JANUARY 27, 2011

The Story County Drainage District Trustees met in the public meeting room of the Story County Administration Building to consider action on a Preliminary Engineering Report from Fox Engineering (on file in the Auditor?s Office) recommending repairs to the open ditch in Drainage District Milford #32. Members present were Wayne Clinton, chair, Paul Toot, and Rick Sanders. Also present were Scott Renaud and Steven Soupir of Fox Engineering, County Engineer Darren Moon, Drainage Clerk Scott Wall, and 24 residents of the district or their representatives (see attached sign-in sheet).



Clinton called the meeting to order at 6:30 p.m. He stated that the purpose of the meeting was to provide those in attendance with information about the condition of the open ditch and collect feedback on what direction they would like the trustees to take. Clinton asked Renaud to present his report.

Renaud began with a review of drainage districts. Code of Iowa Chapter 468 covers drainage districts and their administration. It?s old law ? most of it was written in the late 1800?s and it has not been updated very much. Milford #32 was established in 1911. He explained that drainage districts are watersheds served by a tile or open ditch which is held in common by the residents of the district.

Renaud said the meeting tonight is taking place because there was a request by district land owners to repair damage to the open ditch. The trustees hired Fox Engineering to write a report on the condition of the ditch and recommend a course of action. Under the Code of Iowa, the county supervisors act as drainage district trustees and they are charged with administering the district. If the residents of the district don?t like the way the supervisors are handling the district they can elect their own trustees and run it themselves.

For repairs where costs are expected to exceed $25,000 the Code requires a report by a licensed engineer. This is why Fox Engineering was brought in. Renaud is a licensed civil engineer with 25 years experience working with drainage districts. Fox Engineering does preliminary reports like the one here, creates design plans, prepares bid documents, and oversees construction but they do not do the construction themselves. That work is awarded to independent contractors through competitive bidding.

The trustees must, by law, maintain drainage districts in their original design capacity. This is not an improvement but is simply to restore the original capacity of the ditch. The trustees cannot simply choose to do nothing once they are aware of a problem. Story County has relied on land owners to bring drainage problems to their attention as has happened here. Renaud walked the ditch 15 years ago and the recommendation at that time was to remove half a dozen beaver dams.

Milford #32 consists of open ditch and drain tile. The ditch is the only thing the trustees are considering at this time. The issues today are trees and brush within the banks of the ditch, bank sloughing, channel meandering, siltation, and cutbacks. Trees inside the ditch banks don?t hold the soil well, they provide beavers with easily accessible materials, and they shade the grass that can hold the banks in place. The banks of the ditch are extremely steep to minimize the amount of land needed by the ditch. They become highly unstable when saturated. Increased flows from the flooding we?ve seen over the last two decades has accelerated erosion and bank sloughing. Left alone the ditch will become wider and start to meander which takes adjacent land out of production. Siltation fills in the bottom of the ditch and buries the tile outlets. Field tiles are also being exposed as the water washes away the dirt around them. This erosion moves up the tile towards the fields it is draining. Renaud showed a series of photos from the report to illustrate the problems in the ditch.

Renaud is recommending that the trustees repair the ditch and set up a long-term maintenance program to control the growth of trees and brush in the future. The repair work would be performed in the winter to prevent crop damage and would take place over two years.

Renaud went over the cost estimates line by line. Cost estimates are based IDOT estimates for various types of work and on the 200 some projects Fox Engineering is involved with every year. Fox tracks the cost of projects they are involved with and Renaud?s experience is that this gives a good basis for estimating how much a new project will cost. Renaud tries to skew his estimates toward the high end so there are no unpleasant surprises when the bids come in. The current economic climate has made contractors hungry for work and bids on recent projects have been 10-25% lower than the estimated project cost.

Trees are cut at the ground, a root killer is applied to the stumps, and the trees are typically burned. Silt is spread in the fields along the ditch.

Because this project would be a repair and not an improvement the land owners cannot stop it if the trustees elect to proceed. An improvement would increase the capacity of the ditch beyond what it could originally drain. A repair merely restores the original capacity. There are a couple of options for land owners to have more control over the district. They could opt to become their own trustees. This would give them control over how the district is maintained. Once they are their own trustees they could also opt to dissolve the district. If the district were dissolved the ditch would become the property of those whose land it passed through and they could choose to maintain it or not.

The cost to each land owner in a district is based on the benefits that land was seen to receive from being in the district and was set when the district was established. In general the closer the land is to district facilities the higher the benefit as that land would have the most flooding if the district facilities did not exist. Milford #32 was established in 1911 and assessments are based on the 1911 classification. There is a $54,000 item in the cost estimate for reclassification (reassignment of benefits) but in Renaud?s experience having that done doesn?t change individual benefits to drainage significantly and it adds 6-9 months to the length of the project. Fox Engineering does not do reclassifications. There is an engineering firm in Jefferson, IA that does. Story County does not generally do reclassifications and Renaud recommends against it.

There are a few options on how to pay for a drainage project. The most common is a lump sum but most large drainage projects are in the $50-100,000 range and individual assessments aren?t as high as they will be on this one. The Code allows for the district to sell bonds with terms up to 20 years though most are 10-12 years. Banks buy the bonds which are tax free municipal bonds and a relatively safe investment. Renaud talked to Nevada State Bank and their current interest rate on bonds is 5.6%. He also talked to a bond security salesman who said bonds are available with rates as low as 3.5%. The trustees set the interest rate paid by the land owners.

The project could be broken down into smaller pieces. For instance one mile of ditch could be cleaned each year. Milford #32 has 3.5 miles of open ditch which would mean a yearly assessment for 3 years. This would be more affordable per year but the overall project cost would be higher because you lose the economies of scale that you have with a single project.

Renaud intends to spread the construction over two years. Work would be performed in the winter when the crops are out. Because that is the off season for construction, bids are typically lower than they are in the summer.

A land owner asked how the silt would be spread. What about CRP strips? Renaud said if there is a defined spoil bank the silt will be added to it. If not, it will be spread over the surrounding fields. The contractor is responsible for seeding the area when the dredging is complete. CRP lands require permitting from NRCS, DNR, FSA, and other agencies. There are usually restrictions on when certain types of work can be performed.

Will Renaud come out to see what the land owners are talking about if they have problems or concerns? Absolutely. If there are concerns with FSA Renaud can bring an FSA representative out with him to view the site. They take a lot of photos and video of conditions before and after the work to help with issues that may come up after the project is completed.

A land owner said the last time this ditch was dredged the contractor did a poor job and the banks were collapsing within 5 years. He hopes whoever does it this time will do a better job. Renaud said there are some products used today that help hold the banks in place until the seed takes hold.

Dave Stensland said the top mile and a half of the ditch is a man-made dredge ditch. After that it is the natural channel of Indian Creek. How important is it to continue the cleanout into the natural stream channel? Most of the problems are in the dredge ditch. Couldn?t we save a lot of money by focusing just on the dredge ditch which runs from the outlet to the old county home? Renaud said the estimates he has are pretty rough. The actual work will be tailored to the each part of the ditch depending on its condition. Some areas need more work than others. The natural channel is still part of the district and needs to be considered as part of the project. If the land owners along the natural creek bed don?t mind the meanders Renaud has no problem with that as long as the flow of water is not impeded.

A land owner asked if they ever used dynamite to clear channels. Renaud said that is not common practice because the permits required make it extremely expensive. They?ve used it to get through rock in the past but that won?t be an issue here.

How much has Fox billed the district to this point and who paid for it? Renaud said the billings so far are about $6,000. It will be billed out to the district just as any repairs will be.

A land owner asked why Renaud didn?t think reclassification was worthwhile. He?s going to be paying a large portion of this assessment and reclassifying might reduce what he has to pay. Renaud said he does not do reclassifications. The firm that does do them has done 50-60 and their experience has been that there is very little change to individual benefits. The engineers that did the original classifications were pretty meticulous. Also, there are significant costs so any savings an individual might gain would be used to pay for the reclassification.

Clinton asked if there are any tax benefits available to land owners when they are faced with costs like this. Renaud said since this is a repair he didn?t know of any tax exemptions that would be applicable.

Sanders asked Moon to confirm that Story County relies on land owners to let the trustees know of problems in the districts. Moon said that was correct. The owners have the responsibility to alert the trustees to district issues.

Toot asked Moon to explain why Fox was hired. Moon said they had received numerous complaints about trees in the ditch south of the old county home and of siltation to the north. His office went out to take a look and it became apparent to them that the work required would exceed $25,000. Once that threshold is reached the Code requires a preliminary engineering report and a hearing once the report is received.

Dick Pringnitz asked what a long-term maintenance program would look like. Renaud said the Engineer?s Office would monitor the program but an outside firm would be hired to do the work. Renaud had brought in a representative from a firm that specializes in brush killing to walk part of the Milford #32 ditch and that is where he got the numbers for his estimate. Typically what happens is they will do a kill 2 years after project completion and another kill 2 years after that. They then go to 5 year intervals for future kills.

Clinton asked about a cost scenario based on the 5-year maintenance schedule. Renaud said after the first few years you?d have a handle on the cost. He?d like the district to be levied annually so you could save up the money to pay for the maintenance but the Code only allows you to levy for work that has been done.

Sanders asked if the $9,000 for brush killing was for the initial kill and if that would be the cost for future kills or would the cost go down? Renaud said the estimate was for the first kill but he expected future kills to be similar in cost.

A land owner asked if the county was going to adopt a policy of regular maintenance for all the districts. Renaud said he would recommend that. He advises that a firm specializing in brush kills be used as he has asked the original project contractors to do the initial kill in the past and they?ve never done it right. Story County has 119 districts and, as work is done on each one, Renaud will recommend that follow-up maintenance programs be put in place.

Sanders said from his perspective the trustees need to start maintaining the districts on a regular basis. Toot concurred that this needed to be a priority for the current trustees.

An owner asked if any districts had a maintenance program now. Clinton responded that none did.

Sanders asked Moon if there were any models in other counties that we could follow. Moon said yes, there are some neighboring counties that have maintenance programs in place.

Toot asked if the county IVRM program could perform the maintenance. Moon said this was proposed a number of years ago and it never went anywhere.

A land owner asked what the procedure is now. What are the next steps? Clinton said the trustees would have to accept the report. This simply acknowledges the report has been received. It does not bind the trustees to follow its recommendations. The trustees will then ask for input from those present on what they would like to have happen and make a decision on how to move forward.

Sanders moved, seconded by Toot, to accept the Preliminary Engineering Report from Fox Engineering with the understanding that such acceptance does not bind the trustees to abide by the report?s recommendations. Motion carried unanimously (MCU).

Clinton opened the floor for anyone to give their comments on the project. Do you support it, not support it, support a portion of it? Now is your chance to provide your input.

Stensland said he is in favor of the project. One of his landlords wants to know if projects like this are eligible for FEMA or other federal funding. Moon said FEMA funds have been used in districts that have suffered damage from flooding, but that is not the case here.

Pringnitz, of Hertz Farm Management, represents Evergreen Lane, who would have the highest assessment if the project goes forward. They are in favor of the project.

Bill Couser is in favor of the project but has concerns about how people were made aware of the meeting and project. There are older people who don?t understand drainage districts and don?t have internet connections. They were confused by the December 20 letter. How can they find out what this is all about? He has also had people asking him if there will be a formal vote on what gets done. Wall said as far as a vote the trustees are the only ones who have that authority. If people have questions about the project the December 20 letter had the county website and Wall?s phone number. He received numerous calls after the letter went out and encouraged anyone to call if they have questions. He?ll be happy to take additional calls.

Sanders pointed out that if the land owners want more control they can petition to elect their own trustees and take over management of the district. Wall said the land owners could elect three trustees from amongst themselves who would then be bound by the Code just as the supervisors are. The Code states that the trustee positions default to the county supervisors if the land owners in the district decline to elect their own trustees.

Toot said his impression was that people were generally in favor of the project. The trustees did talk to someone this afternoon that is not in favor.

Sanders said a similar meeting on January 25 was much more contentious. He wanted the residents to know that, as a trustee, he feels strongly bound by the Code to bring the district back up to its design capacity and then consider a regular maintenance program going forward. He spoke about the January 25 meeting being fairly heated and said the end result was the trustees deferring a decision for two months so the land owners could consider their options. He is comfortable moving the project forward tonight but still allowing time for people to make their concerns known. The trustees will need some time to think about what options they want to consider for paying for this.

Clinton asked about drainage payments and how land owners arrange to pay in installments rather than a lump sum. Wall said he has no experience with bonding if the trustees take that route but individuals can spread their payments if they request it in writing for any parcel with an assessment over $100. The trustees set the time period over which payments can be spread which can be 10-20 years. It has typically been 10 years. Those assessments can always be paid off early with no penalty.

Clinton said because Renaud had given some options for paying for the project and doing the work in stages rather than all at once the trustees need to meet with Renaud, Moon, and Wall to discuss those options before a contractor is selected. He wasn?t sure what requirements the Code imposed for keeping land owners current on what is happening. Wall said any public meeting will require a mail notification. If the trustees direct Renaud to begin design plans and prepare bid documents a meeting will have to be scheduled for the bid opening and a mailing will have to be sent out notifying the land owners of the meeting.

Toot asked if the trustees had enough information to move forward. If there are people who don?t understand what is being proposed Toot would be happy to sit down with them or they can call Wall to get their questions answered.

Wall said if the trustees go forward tonight it is the beginning of a several month process. Renaud needs time to do the design work and he won?t be able to even start it until April then there has to be time to notify contractors that a project is available for bidding. When the bids come in the trustees could still decide to halt the project. Anyone with concerns or questions should have ample opportunity to get answers to their questions.

A land owner asked if she understood correctly that they would not be charged until the work was done. Renaud confirmed that was the case. The county accrues the funds and assesses at the end when the total cost is known. Wall said there will be an assessment this year as the district currently owes Fox Engineering for the preliminary report and, as Renaud begins the design work, there will be monthly billings to the district. Assessments go out on July 1st and are payable with regular taxes on September 30th.

Pringnitz asked where the money to do the project comes from if no one is assessed until the work is done. Moon said for a large project in Boone and Story Counties last year Boone County arranged financing through a local bank for the majority of the cost. Wall said some contractors will take these projects on with the understanding that they will earn interest until money is available to pay them. Smaller contractors generally can?t afford to do this and, given the scope of this project, a larger contractor wouldn?t be able to wait for payment either. The county engineer has paid for small projects in the past and been reimbursed by the district and Wall believes the Boone County Treasurer had picked up some of the costs of the project there.

Sanders said if the cost of the project could be lessened by bonding would Wall be the one the trustees direct to look into that. Wall said he had no experience with bonding but yes, he could investigate how that would work.

Renaud said Fox has held stamped warrants and collected interest on drainage projects as well. He feels bonding is worth investigating because of the size of the project. Sanders said those are decisions the trustees can make after this meeting. Renaud agreed. He pointed out that many people would pay a lump sum so for a $500,000 project the district might end up bonding for only $250,000. Also, that $250,000 could be paid off early without penalty.

Clinton said funding options would warrant a separate meeting with the trustees, Renaud, Moon, and Wall so they could bring something back to the land owners at the next public meeting.

Sanders wanted to be clear on the point that there will be an assessment this year to pay for engineering and other work that has been completed but the construction costs would not be assessed until the project is completed. Wall confirmed that.

One land owner said ten years would be too short a time frame for him to pay his projected assessment. Fifteen years would be better. Clinton said the trustees couldn?t tailor the number payments to individual land owners but would have to look at the district as a whole and see what seems best for the majority of the land owners. Sanders said, since there is no penalty for early payment, the trustees could set it up for fifteen years and people could pay it off as they are able.

Toot moved, seconded by Sanders, to direct Renaud to proceed with preparing design plans and bid documents as outlined in the Preliminary Engineering Report on Milford #32.

Clinton said the trustees would schedule a meeting as soon as possible to look at funding options.

Moon said the estimate includes reclassification and the trustees might want to specify that that will not be included as part of the project.

Sanders moved, seconded by Toot, to amend Toot?s motion to remove reclassification from the Milford #32 project.

Clinton asked for a vote on the amendment. MCU. Clinton asked for a vote on the original motion as amended. MCU.

Sanders moved, seconded by Toot, to adjourn. MCU. Meeting adjourned at 8:00 p.m.

Respectfully submitted,

Scott T. Wall