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Central Lakes Region Sanitary Distric takes step toward shutting down

ALEXANDRIA - After spending more than five years planning - and millions of dollars - steps are now being taken to shut down the Central Lakes Region Sanitary District.

In front of a crowd of more than 60 people gathered Thursday evening at Leaf Valley Town Hall, the CLRSD board voted unanimously to start "winding down" the district, which for months has been mired in controversy over its proposed multimillion-dollar sewer project.

Since December, five of the six Douglas County townships originally included in CLRSD have left the district, with the latest two - LaGrand and Moe Townships - voting to withdraw on February 2.

CLRSD board members approved the motion to begin the process of closing down after learning Thursday that area state lawmakers are working on legislation to dissolve the district entirely.

Speaking from his legislative office at the Capitol on Monday, Representative Torrey Westrom, R-Elbow Lake, confirmed he is working with fellow Representative Mary Ellen Otremba, DFL - Long Prairie, and State Senator Bill Ingebrigtsen, R-Alexandria, to craft a bill that would in effect dissolve CLRSD.

"Ultimately, the citizens spoke," Westrom said about his decision to statutorily disband CLRSD. "And I wanted to listen."

"The [local] townships starting to opt out was the ultimate confirmation that [dissolution] is where the people are," he said. "It's my duty to represent their interests, and this became the democratic interest of the majority of the people."

Westrom said the legislation, which he intends to introduce in the next seven to 10 days, will formally terminate the sanitary district as it exists today, but would also allow CLRSD to reconstitute itself under two conditions.

First, the sanitary district would have to change its governing board to elected instead of appointed positions.

And second, any large-scale wastewater treatment projects, such as a centralized sewer system, proposed by district officials would have to be approved in a referendum by local property owners before being pursued.

CLRSD would have to implement those changes by next fall in order to be able to re-form.

One question the legislation doesn't answer is what to do about the millions of dollars the district has already spent in planning and design for a proposed sewage plant.

That money has to be paid back - likely by the townships - but exactly how those costs will be divvied up remains unknown.

"Those are issues that we still have to iron out yet," with CLRSD officials, Westrom said. "Whatever it will be, it will be less than the cost the total project would've been."

The three-phase central sewer system has previously been estimated to cost up to $52.5 million.

CLRSD attorney John Kolb said some of the first steps in taking apart the district will be to identify its various financial obligations and assets, and then coming up with a plan to pay off the district's debts.

Kolb said he wasn't sure how long it would take to completely dissolve CLRSD, but it could end up being a six-month process.

"The last thing we want is for something to be missed," he said. "The bottom line on this is we've got to do this thing right. We can't just shut off the lights and lock the door and walk away from this."

Financial statements dated last Wednesday show CLRSD's total liabilities to be about $3.38 million, while counting roughly $1.92 million in assets.

Only about $303,000 of those assets is in cash, with the rest tied up in land, easements and previous construction.

"That $3.4 million has to be allocated to the member townships by a method established by the district," Kolb said. "Previously, it was established that it would make that distribution based on the tax capacity of the townships."

"There has been discussion as whether or not there's an alternative way to do that, as for dividing costs up by parcels," Kolb added. "Until the board sets an actual means of distribution, I don't know how much the townships will have to pay."

Before supporting the measure to "wind down" the district Thursday, CLRSD board member Lynn Timm, who represents Carlos Township, said she thought terminating the district was a mistake.

"Although the CLRSD and its board members have been discredited to the point that dissolution appears inevitable," Timm said, "the district remains a great management structure for wastewater infrastructure of any type.

"It is shameful that we are being forced to throw this opportunity away."

Dale Vollmers, Leaf Valley's CLRSD board representative, said given the large public outcry against the district's proposed sewer system, it is time CLRSD step aside.

"Obviously we came up with a plan that was too expensive and not workable with the environment of our community here," Vollmers said.