Range Association of Municipalities & SchoolsBoard Meeting MinutesThursday, June 22, 2017 – 6:00 P.M. (dinner available at 5:30)Northeast Service Cooperative Building

Call to Order:

President Paul Kess called the meeting to order at 6:00 P.M.

Roll Call of Board:

Present:Paul Kess (City of Ely); Jim Fisher (McDavitt Township); Pat Medure (ISD 318-Grand Rapids); Gregg Allen (Supts Assn); Glenn Anderson (City of Babbitt); Charlie Baribeau (City of Virginia); Bob Berrini (Morse Township); Dale Christy (City of Grand Rapids); Ben DeNucci (City of Nashwauk); Walt Hautala (ISD 2711-Mesabi East); Stuart Lehman (City of Buhl); Ray Marsnik (ISD 696-Ely); Kim McLaughlin (ISD No. 701-Hibbing); David Pace (Supts Association); Carlene Perfetto (City of Silver Bay); Kevin Scaia (City of Chisholm); Mark Skelton (City of Hoyt Lakes); Ione Tomasetti (ISD 695-Chisholm); Stacey Sundquist (ISD 706-Virginia); Dave Worshek (City of Aurora)

Absent:City of Hibbing; Great Scott Township; City of Mt. Iron; Nashwauk Township

Also Present:Terry Soderberg; Katherine Bobich; Barb Kalmi; Dr. Noel Schmidt

Review and Approve Agenda:

Moved by Perfetto and supported by Hautala to approve the agenda, as presented. Motion carried.

Approve Meeting Minutes:

Moved by Medure and supported by Fisher to approve the minutes from the Regular Board Meeting held on May 31, 2017. Motion carried.

Appearances:

Christine Towner, CPA, Fort & Company, reviewed the audit of the financial statements for the years ended December 31, 2016 and 2015, as follows:

As of 12/31/16 / As of 12/31/15
Total liability and net assets / $335,941 / $285,157
Total revenues / $207,602 / $189,688
Total expenses / $153,657 / $79,810
Increase in unrestricted net assets / $53,945 / $109,759
Net assets / $335,941 / $281,996

Notes:

Note 1Summary of Significant Accounting Policies

Note 2Defined Contribution Retirement Plan-Simple IRA Plan

The Association sponsored a Simple IRA plan, established in September, 2015, covering all employees who agreed to make contributions to the plan. The plan allowed employees to elect to contribute a portion of their compensation on a tax-deferred basis. The Association matched participant’s contributions up to 3 percent of the individual’s compensation. Total expense for the year ended December 31, 2016 and 2015 was $1,019 and $764, respectively. The Simple IRA plan had been discontinued as of June 2016.

Note 3Defined Benefit Pension Plan- PERA

Note 4 Lease Commitment

The Association leases office space for $565 per month. Rent expenses under the leases for the years ended December 31, 2016 and 2015 was $6,780 and $6,055, respectively.

Note 5Economic Dependency

The majority of the Association’s income is generated from taconite relief aid collected by St. Louis County. A material reduction or loss of this funding source would seriously jeopardize the Association’s ability to continue its operation.

Note 6 Evaluation of Subsequent Events

The Association has evaluated subsequent events through June 19, 2017, the date which the financial statements were available to be issued. No subsequent events were found through that date.

Misstatements were identified and journal entries were made to decrease net assets by $203.

Internal Control Deficiencies:

  • Material Weaknesses:

-RAMS does not have adequate financial expertise to prepare the financial statements and lacks the skills and knowledge to prevent, detect and correct a material misstatement to the financial statements. Suggestion: It was recommended that the Board review the financial statements and bank reconciliations on a regular basis.

-Lack of segregation of duties, due to limited number of personnel. Suggestions: The organization may want to segregate some of the accounting functions to more than one individual. The Board should review supporting documentation for normal recurring disbursements on a spot check basis.

  • Significant Deficiencies - None

Moved by Medure and supported by Fisher to accept the audit of the financial statements for the years ended December 31, 2016 and 2015, as presented. Motion carried.

Pat Medure stated the Finance Committee could review ways to reduce the material weaknesses in the audit.

Director Giorgi stated a meeting has been scheduled for June 26th with the Virginia and Eveleth/Gilbert schools to discuss sharing of services.

Dr. Noel Schmidt stated he has been employed by the Virginia School District as their Superintendent for 10 ½ months and provided his perspective on education in Northern Minnesota, as follows:

We need to establish and design systems for kids to help them live and work in the world that they will be living in.

Multiple avenues and opportunitiesmust be provided to make kids successful.

We need to help ourselves, as nobody will come to rescue us.

Discussion was held and it was agreed that it is necessary to bring school boards together to talk about resources and creative ways to enhance education. The challenge is to have consensus with the superintendents, as they are hired to manage their own district. Director Giorgi stated he would be willing to host an event for school members to begin these discussions. It was suggested that Joe Silko, Education Innovative Partners, be invited to a future RAMS meeting to discuss their program.

Director’s Report:

Director Giorgi provided an update on his activities during the month of June:

On June 7th, a forum was held to discuss the new wild rice/sulfate and mercury standards. Over 70 people were in attendance. The deadline to meet the new standards was extended by one year to January, 2019. Minnesota Power and Cleveland Cliffs are following up on wild rice studies and using their research to run their tests on wild rice waters. They have not found any negative impact in waters that are abundant with wild rice, as indicated under the MPCA study. Letters will be gathered from the RAMS membership regarding the new science and findings on wild rice standards and requesting that peer review be considered as part of the MPCA study. With the one year delay to meet the new standards, the cost analysis study will be available for viable treatment systems. The MPCA has hired an outside firm to process variances from the new standards. Regarding the mercury issue, any entities that discharge into Lake Superior waters will be challenged to meet the new mercury standards. The State Bonding Bill included an increase in PFA grant amounts. Director Giorgi will stay on top of this issue and look into a state wide variance that would extend the deadline to meet the new mercury standards.

On June 19th, a meeting was held with elected officials and businessmen on the potential withdrawal of Federal lands from mining exploration in the area adjacent to the BWCA. Congressmen Gosar, Westerman, Emmer and Nolan were in attendance. A letter has been sent to Interior Secretary Ryan Zinke and Secretary of Agriculture Sony Perdue, who oversee the Bureau of Land Management and the US Forest Service, asking them to rescind the mineral withdrawal application. They believe the proposed land withdrawal would have a significant impact on the State of Minnesota. It was recommended that the RAMS membership send letters to the Congressmen to express appreciation for their continued support of mining in Northern Minnesota.

On June 28th, a press conference and rally will be held at the Natural Food Coop in Virginia to express support for the public hearing by the US Forest Service on the withdrawal of Federal lands from mining exploration that will be held at the Virginia High School on July 25th. The strategy is to boycott the public hearing scheduled in St. Paul on July 18th and support the hearing in Virginia.

A letter to the editor was sent to all the newspapers in the RAMS area to support the Enbridge project to replace Line 3. A copy will also be sent to the Department of Commerce.

Old Business:

a.Electronic signatures for membership

Director Giorgi stated he met with the Iron Range Mayors and discussed the need to have electronic signatures on file for use by RAMS during the legislative session. There was no resistance on the issue. Director Giorgi will follow up with the Mayors to obtain the electronic signatures.

New Business:

a.Lobbyist designation for Executive Director

Director Giorgi requested permission to deactivate his status as a registered lobbyist, since RAMS hired Gary Cerkvenik to provide those services. He noted there are several reporting requirements for a registered lobbyist.

Moved by Baribeau and supported by Fisher to authorize Steve Giorgi to deactivate his status as a registered lobbyist. Motion carried.

b.Committee Updates:

1.By-Laws Committee

Director Giorgi stated the By-Laws Committee met and provided a recommendation to delete the following language in the RAMS By-Laws, Section 5, Vacancies:

“To fill a vacancy on the Board of Directors that occurs after the annual meeting, unless elected to the Presidency, Vice Presidency, or Secretary/Treasurer, primary consideration for vacancy replacement shall be given to Association member units who have not been represented on the board during the past 12 months”. It was noted that all member units have the opportunity to submit a nominee for a vacant position.

Moved by Perfetto and supported by Sundquist to recommend the deletion of language in the RAMs By-Laws, Section 5, Vacancies, at the RAMS annual meeting, as presented. Motion carried.

2.Working group to review taconite production tax formula

Jim Fisher, Pat Medure, Paul Kess, Charlie Baribeau volunteered to serve on a committee to review the taconite production tax formula. Gregg Allen will ask the Superintendents Association if anyone is interested in serving on the committee, otherwise, he will volunteer.

Board Member Updates:

Jim Fisher provided an update on activities in McDavitt Township:

The softball fields in Cherry were cleaned up in March. Other entities also utilize their fields.

Roads are an issue each year.

Regular maintenance continues in the parks, hockey rinks, ski trails and sliding hills.

Working with St. Louis County on selective logging.

Stacey Sundquist provided an update of activities for ISD 706-Virginia:

Stated the hiring of Dr. Noel Schmidtis a tremendous asset for the Virginia School District.

Enrollment continues to decrease over time, which means limited funding.

Excited about the possibility of working with another school district to provide the children with the best possible education.

Finance Committee Report:

Pat Medure reviewed the financial reports for the period May 25 through June 21, 2017:

Expenditures – totaling $12,996.31

Profit & Loss Budget vs Actual – January 1, 2017 to current

Balance Sheet

Moved by Fisher and supported by Skelton to approve the financial reports, as presented. Motion carried.

Other:

President Kess stated he and Ben DeNucci attended the Greenway Township meeting, who will vote on joining RAMS at their next meeting.

Bob Berrini stated he spoke with the Mayor of Winton and asked that they be sent additional information on RAMS and the service that our lobbyist provides on bonding bill projects.

Ben DeNucci stated he will be filing for the vacant seat on the Itasca County Board of Commissioners.

Director Giorgi stated he will prepare a letters in support of the Enbridge line 3 replacement project and the wild rice standards from the Iron Range Mayors. He also stated the candidates for the Governor race are being invited to the meetings with the Iron Range Mayors.

Kevin Scaia introduced Katherine Bobich, the new Chisholm City Administrator.

Kevin Scaia noted the “Slide the City of Chisholm” event scheduled for August 5th.

Bob Berrini encouraged the board members to attend the US Forest Service public hearing on the withdrawal of Federal from mineral exploration, scheduled for July 25th at the Virginia High School.

Next Meeting:

Moved by Sundquist and supported by Fisher to cancel the July RAMS Board Meeting. Motion carried.

The next RAMS Board Meeting was set for 6:00 P.M. on Thursday, August 24, 2017.

Adjournment:

Meeting adjourned at 8:10 P.M.

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