Jordahl: Item 6 on the agenda is business from Brandon Beaudry, Juvenile Court Services regarding an update on juvenile detention. Brandon, good morning.

Juvenile Court Services Case Worker Supervisor Brandon Beaudry: Good morning.

Jordahl: Oh, it looks like we also have Ms. Thompson here.

Juvenile Court Services Sixth Judicial Chief Juvenile Officer Carol Thompson: I'm bringing the calculator here.

Jordahl: Carol here. Calculator? Uh-oh. Wait a minute, is that related to money in some way?

Duffy: Looks like it.

Stutsman: Brandon, do you have an extra one for Joe? He's ill today.

Jordahl: Perhaps members of the public would be interested in these figures as well.

Lacina: If you charted this and you would project the ramping effect, that gets pretty ugly on those last numbers...

Stutsman: I think Joe definitely needs a copy of this to take with him in his new career.

Lacina: Yes, I agree.

Beaudry: Well our juvenile detention costs have continued to go up at a rapid rate and we wanted to make the Board aware of the fact that this year we're spending at a rate which is quite a bit higher than last year's rate. So far this year, as of the end of November, according to what the Auditor's Office has provided, we've spent $180,000. If we'd project that out until the end of the Fiscal Year, we will have spent approximately $430,000 on detention. Last year, we spent about $270,000. As I've indicated in this memo, the cost can be expected to go up in future Fiscal Years, not only because we see a greater number of children being involved in the juvenile court system, but also because if Johnson County does purchase bids from the new Linn County facility, that per diem is higher than what we usually pay. We generally pay $165 per diem with the detention centers that we currently use. We only use the Linn County facility about 10% of the time. The basic reason for that is because Linn County only has a capacity of 11 children. If they go 8 or above, into a weekend, they ask us to get any out of County kids removed from that facility and to put them into different facilities. As a consequence we generally don't put kids in that facility because the facility is generally at 8 or more. It's usually at capacity, but it's almost always at 8 or more going into a weekend. I've been told by Ivan Vonk that the projected opening for the new Linn facility is been pushed back until the first of August 1999. It appears, for this fiscal year anyway, our per diem will still average about 165 or 170. He has also told me that, probably the minimum that Johnson County will pay for guaranteed beds, that is beds that we would just pay for, would be $212. There's quite a difference in the per diem between 170 and 212. That will be an increase in costs. For the reasons that we see increase in detention costs over the past few years, I think that we're simply seeing a tremendous increase in the number of kids who are involved with the juvenile justice system. Part of that is due to that fact that Johnson County has an expanding population base. Part of the fact is that we simply see more and more kids in Iowa committing more crimes, which not only involves them in the system, but receives the court's very serious attention because they're committing crimes of very serious nature. They represent dangers to other people, to other people's property, or they're at significant risk to run away and not be available for future court hearings. Recently, several juveniles were charged with a murder that occurred in Iowa City. We have one juvenile recently who was charged with an arson offense in which, quite easily 2 children could have been burned to death. We have a juvenile recently who has been charged with an assault with a knife, which could have easily resulted in serious injury or death. These are just some examples of what has occurred in recent months. I have attached to this memorandum some information from the Johnson County Attorney's Office which has to do with the number of filings that have been made since... Deb Minot has been keeping records going back to 1989. I think you can see from those records that we are experiencing a significant increase in the number of delinquency petitions that have been filed and the number of amendments that have been filed. There's also been an increase in the number of waivers that we're filing. The total number of delinquency filings for this year is projected to be 271. That's a significant increase over the previous high that we had, which was 209 in 1996. This is reflective of the fact that we do have more children in the juvenile justice system who need the attention of the court, not just being handled informally, but need the attention of the court. I think that the Board should also be aware that there is gridlock in the juvenile justice system, particularly in the residential treatment component of that system. As I've indicated on the memo, State funding for residential treatment bits has seriously declined since 1992 and we had about 1,800 children in residential treatment. We now have about 1,100 children in residential treatment. During that time we have not seen any decrease in the number of referrals and the number of problems that we have with juveniles, in fact we've seen a significant increase. That has strained the capacity of the juvenile justice system to deal effectively with children. There has been an increase in funding for community based services but it has not covered the need for children to be placed in residential care. I think if you were to talk with anybody who works in the system, that is Juvenile Court Officers or Social Workers, I think they would all agree with that. In addition to the problems that we have with residential treatment, the Boy's Training School, in recent months, has exceeded its capacity. Its capacity is 185. It has had as many as 235 children in that facility in recent months. When the Boy's Training School exceeds its capacity, we cannot put anymore kids than what our capacity is for this district, in that training school. Our capacity for this district is 18 children. For Johnson County, in terms of it's proportion of population to the district, it would be about 4 kids that we can place in the training school. That includes evaluations. As a consequence, there have been some children that have needed evaluations at the training school or needed to be placed at the training school and we have not been able to utilize that resource or in some instances, we've had kids from this district, who've simply had to wait in detention until an opening occurs at the training school. In other words, we have to get below our cap in order for a child to go into the training school program. In addition, we're seeing some problems in terms of our day treatment programming for delinquent use, which is the ACE Program in Johnson County. For a number of months now, the program has been full and we currently have a waiting list of about 10 kids. The program itself only has 10 children so kids are waiting at least a month now to get into the program, sometimes longer than that. I think the pressure on community based resources simply adds to the gridlock that we're seeing in the entire system. In the last paragraph, I've indicated that I think that the court in Johnson County is placing children appropriately in detention. They meet the criteria in the Iowa Code. That is that we have to have probable cause that they committed a delinquent act and they must represent a danger to others, the property of others, or to be a runaway risk. It does not appear to me to be likely that we would be able to reduce the number of children initially placed in detention but I think there is some room for decreasing the length of stay of some of these children in detention. I've discussed this with members of my staff and with Judge Lewis, as well as personnel from the agency in Johnson County which manages the ACE Program, and I would like the Board to consider a proposal that it... think about purchasing 2 additional ACE slots to be used only for children who would otherwise be qualified for continued stays in detention. I think that some homes simply cannot provide the structure that would be needed to insure that the, as much as possible, that the children comply with the conditions of release imposed by the court and avoid law violations. I think those homes could, with additional structure, provided by a day treatment program in tracking, be able to have those children stay at home during times when otherwise they would have to stay in detention. If, under this proposal, children would be in the day treatment program from 3 to approximately 8 p.m. and that runs 363 days a year. Only Christmas and Thanksgiving are the days that they do not have the program running. The cost of the program is 65 per day currently under our ACE contract. If we added electronic monitoring, which would enable us, to know if the child leaves home without authorization, and there are some monitoring systems which would even be able to pinpoint the child's location, that cost would be approximately $5 per day. So we're talking a total cost of approximately $70 per day, as opposed to the minimum per diem that we're paying now of $165 per day.

Jordahl: Excuse me, you said 165 and we've got 65 here.

Thompson: That's 5 for the electronic monitoring.

Jordahl: OK, day treatment and detention. Right, OK. The 65 (inaudible). We had a typo going on here. That's just... those are 2 different programs.

Beaudry: The savings, if we're able to have the 2 slots filled with kids who would otherwise be placed in detention, would be approximately $70,000 per year. I've spoken to Judge Lewis about this and she's in agreement that at the front end of the system, that is where we initially place children in detention, she does not see much room for us to decrease the numbers but she does see some room for us to decrease the length of stay once a child is in detention. If we can be relatively certain that the services that we're providing will insure that the child complies with the conditions of release as ordered by the court. I think it's something that's worth considering by the Board. It's a potentially a cost savings measure and I think it's worth a try.

Lacina: If the judges would utilize it, that will be the big question. Obviously, the juveniles that committed the murder would not be somebody you would consider for something like this.

Beaudry: Exactly.

Lacina: But for those that made a one time mistake, it probably would be more effective to give them a hard shot than put them in this at a later point. As we looked at it from the adult standpoint though, we were going to try to recover the cost from the individuals. I don't know if that's possible through the families. In some cases, the families don't have any money and the kids are in trouble because of it.

Stutsman: You do do some of that, don't you?

Lacina: (Inaudible).

Thompson: We have them pay restitution for the crimes they committed but they don't usually pay for the cost of their care.

Beaudry: Parents sometimes do if they are placed in residential treatment. The State has a system where by they assess the parents as if they were not custodial parents in a dissolution case. They're assessed on child support guidelines.

Lacina: But the problem is if the family's broke and all of a sudden you're putting them at a greater hardship because of a crime of a juvenile... but it's something to look at for those that it would work for.

Stutsman: I know Bob Carpenter is looking at this electronic monitoring too for the adult population.

Thompson: They're going to charge the cost back to the client.

Stutsman: If there's any way we can look at some options or alternatives... I sure think it's worth a try. Those 10 kids that are in ACE, those are all kids that are referred from the Juvenile Courts.

Thompson: From the court, but not all have been in detention prior to going to ACE.

Stutsman: Right. They can take 2 more slots? They have licensing capacity, or whatever?

Beaudry: Yes. They can go up to 15. They have 10 in their program now. Their contract with the Armory allows them to have a total of 15 kids there.

Stutsman: Why don't we increase it to 15, or 5 more slots?

Beaudry: I'm not sure that we'd be able to use that number of slots. I'm not sure that we'd have that many kids eligible for this type of program because, as Steve was saying, we have some kids who simply would not be eligible for that, because of the seriousness of the crime or because of their pattern of behavior, or for other reasons. I think we should start off with a fairly low number to see how it works.

Lacina: Phase in.

Beaudry: I think the main problem in this would be that we would have to continually staff the child to insure that he remains a child who would otherwise be placed in detention because we're asking the County to pay for this service. It should only be done where the child would otherwise be placed in detention.

Thompson: Also, we don't want to mix so many seriously troubled kids into the ACE population that it disrupts that program. We have to be a little careful about who goes in there.

Lacina: Cross training.

Thompson: Yes. Brandon tried to look back at the kids that we had over the last year to see which ones we could have used this program for if we'd had it and that's how we came up with the number of 2.

Stutsman: OK.

Beaudry: I also spoke with Judge Lewis about this and she thinks that's a reasonable number to start with and she thinks the Court would look seriously at reducing the length of stay of some kids. Although, as I indicated, not initially, but after they've been in for a while, to reduce that length of stay. We do have some kids in detention for long periods of time. Recently, we had a boy who committed the arson I referred to earlier... It was very difficult to find a placement for him because most facilities simply don't want to accept any child who's committed arson. They're afraid he's going to burn down the facility. That child was in detention for approximately 3 months, waiting for a place to take him and to go through the court process. That's at about $5,000 a month. That's an extremely expensive process.

Lacina: Are there 2 slots for ACE in the budget request as it stand now? You think there will be a $70,000 savings with a diversion.

Thompson: You can use detention money to pay for the ACE slots you have to create a new line item in your budget and call it alternative to detention or something. So, it would require some action on your part, to approve this.

Lacina: The $433,000 projected that is without the 2 ACE slots and is that a worst case...

Reverend Bob Welsh: That's just a straight line projection.

Thompson: Here's the difference, last time we were here the same time of year for more money for detention because it was going up so rapidly and at that time we said that we couldn't really tell whether this was a blip, and we offered the hope to you that it might be, in fact we did spend all of increase that we (inaudible) almost all of it. and we even a little more didn't we.

Lacina: Well on one question, are you calculating the $400,000 at the $170 a day or are you are you calculating at the higher $212 that we're going to be paying Linn.

Beaudry: At the $170 a day.

Thompson: So, it's going to get bigger next year. Johnson County is growing and I don't see any way that this is going to change much, we can effect it a little bit with community programming but we can't make it go away.

Stutsman: It's the reality of a growing community.

Thompson: There is a lot of good things about growing too, but this is the down side.

Stutsman: So, what do we budget this year for, you'll be in for a budget amendment is that what...

Jordahl: Sure looks like it.

Beaudry: I think it's $290,000 this year for detention.

Stutsman: That's what budgeted.

Beaudry: That's budgeted.

Thompson: And we thought that was a pretty good increase over last year, but this rise in cases is just dramatic, and also the number of serious crimes you think that would be a blip because that's not common in Johnson County, but as we look back over the year its pretty well spread out over the year it's not just, you know, one black day a whole bunch of kids went out and did something and maybe that won't happen again, I think that we're going to continue to see that kind of crime.

Stutsman: I received a phone call from Ivan Vonk sometime last week saying that the Supervisors had directed him to begin talking with Johnson County about a contract and I thought we would have to deal with that after the 1st of the year when we had permanent Board Members in place, and we do need to start visiting with them, and Brandon I'm assuming you would be involved with that too.

Beaudry: I would like to be.

Stutsman: All right so we can put that on for discussion on who will be part of that negotiations and stuff.

Lacina: Since you have the calculator if you would take 42 and divide it by 170 and that would give you your percentage of increase for Linn County when we see that for (inaudible) so it's going to kick your $400,000 higher.

Stutsman: With these increase I'm going to have to see if even we can afford Linn County I mean this is, we'll have to see with the negotiations.

Lacina: If you don't locate them locally what happens is that you have a patrol car tied up in Lee County and you've tied up a car and a deputy and then they have to bring them back for a 15 minute arraignment and then they have to take them to care, and you basically tie up about a $45,000 unit for a taxi. All of a sudden they can say we can't house them anymore so hit the road, and we've had that happen to. We've been going to a place and get a radio call and send them to Scott or somewhere else.

Beaudry: That has happened frequently, not just at Linn.

Lacina: And we've had them refuse some of our clients too, they say come and get them and don't bring them back.

Beaudry: Because we then they get close to capacity they reserve those beds for the county on which the facility is located but if we purchased a certain number of beds from Linn County that should not be a problem, only if we exceeded the number that we purchased.

Jordahl: You're talking about a projection here, for this current year, you're projecting what the budget amendment is going to need to be to make sure that your program continues to function through out FY 99 but in our budget process now we're going to need to estimate what this cost is going to be for next year. Steve raises the excellent point that if we're paying for Linn County beds $212 a day starting in July or August and we're seeing a slope in the line that has continued form last year to like 65% or something increase over last years cost projected for this year, what do we project, or what do you project for FY 2000?

Thompson: Well we figured some of that cost into our projection but we were using 2 months when we did the budget.

Beaudry: I estimated $400,000 for detention but that was with only 2 months. I thought we would be able to get the cost down, and so far we have not been able to do that so far this year, not right now we only have 4 kids in detention which is kind of a major victory in a way because we've averaged 7, and there have been many days that we've had 9 and 10. So, maybe we'll keep the cost down so we won't have as much of an increase as it looks that we might have but I just don't know. There are so many variables in what happens I can't predict how many kids are going to commit serious crimes and need to be detained.

Jordahl: And this is the after the fact portion of the budget to look at what we're doing with the people who have created problems and this always said that it was more efficient to spend the money to prevent the things from happening in the first place if there is not a request here for money to do that and I'm wondering what role that plays in your projections.

Beaudry: There's half a million.

Thompson: Our office deal with kids after they've committed a crime so we're always on the back end. The juvenile justice task force and some of those part (inaudible) and you know we've had that Juvenile Crime Prevention Grant which has shown some good results in the younger children that's going to need continued funding after that State grant runs out and I don't know if we're ever going to address that.

Duffy: That's what I was going to bring up. That's what I was going to bring up Carol. Every year I do this, are we gaining on the enemy. By the enemy I mean that, when these kids get into trouble and serious crimes it really costs tax payer and upsets their whole life. Now, the average stay per bed is, it used to be 6 or 7 days straight.

Beaudry: It's about 14 days.

Duffy: It's about 14 days, but when you get one like 3 months that really does something. Are some of these young people tracked after they get through all of this but as they become adults how successful has a program been like this so that they won't commit a serious crime again or what. I don't know if you have any statistics on that or not.

Thompson: We do. We keep statistics on ACE kids going out several years, and we've done this for about 5 years now, and we find that somewhere around a third of them will show up in the adult correction system. For the kids are detained it would be a little higher because they have already had a serious crime as children.

Duffy: So maybe about 2/3rds walk the straight and narrow line after they. Well that's something.

Beaudry: I still think we are fortunate where we have at least some handle on how we treat delinquent kids. I was talking to Mark Day who is the treatment director at Eldora the Training School for Boys, and he had visited a facility which is basically a detention facility for youth in Illinois and he indicated that they had exceeded their capacity by a factor of 2 or 3, and that they can expect approximately 2/3 of those kids to become involved committing more crimes within a year. So their recidivism rate is simply much higher than ours is, and they simply have no control of what's going on there because they are just overwhelmed by numbers.

Duffy: Is that a new facility over there. I think we talked about that a couple of years ago. We were even going to drive over but I don't think we did.

Beaudry: The Linn County facility?

Duffy: No, Illinois.

Beaudry: He was talking about a facility and I can't recall if it was new or not, I don't think it was. It was one of the detention facilities and a significant portion of their children came from Cook County. They would usually get a busload of Cook County kids in everyday and there are 25 to 35 kids in the bus everyday.

Duffy: We got some information sent to us, but I know that it was Cook County.

Lacina: Well as far as the blip in our last 6th Judicial Board Meeting we were discussing the migration out of Chicago. Chicago is now getting tough on crime and so what it does it that it's causing a fleeing of the criminal and further out into the heartland an what we're seeing it through the 6th Judicial in Parolees and stuff and crimes in surrounding areas. We'll see a wave come our direction too, so I don't think it is a blip.

Beaudry: When I was working in Cedar Rapids, Steve, I had a child who was arrested for a very minor offense in Linn County, but in Chicago he was wanted for fleeing probation and his offense there was selling Crack Cocaine within 100 yards of a school, a very serious offense in Illinois, and they did not want him back. I even wrote a letter to the judge and got no response, they simply said we don't want him. Once they're out of their jurisdiction they don't want to see them again.

Lacina: Greyhound therapy though, buy them the ticket and send them on to somebody else.

Thompson: Even when we buy them a ticket and send them back they often reappear within weeks.

Stutsman: It's just a real problem and we don't know what that answer is. We talk about this migration and yet I don't know how you stop it. People come where there is a safe community, where there is an ability to, I don't know, just the way Johnson County is. It's a trusting community, it's a good place to live, and they know it too.

Thompson: I think Charlie's right, this problem didn't just come about over night. A lot of these kids that I see on the detention list now are names that I recognize from my days at DHS who's families were homeless because of the cut backs in housing money and who got on the daycare waiting list because there wasn't daycare money for them to be going to Headstart when they should have. This isn't a problem that we couldn't have foreseen in the past. We could see it coming.

Stutsman: There again it goes back to that prevention and that's where we always come up short.

Jordahl: Well I appreciate your creative approach to try to contain this cost and be as flexible as possible about who's treated where and when and that's certainly thinking in the right direction. I would like to see though the 2000 projection based on your graph of trends this year and including Linn County projected costs as a starting place for our conversation with Linn County.

Stutsman: Did Juvenile Court Services come in for budget hearing, I missed one day, and so I wonder if we need them to reschedule them to come after the 1st of the year to be hear.

Beaudry: We haven't come in for any budget hearing.

Lacina: And you need to roll the ACE proposals into that.

Thompson: And what about the ACE proposal for the rest of this year will you consider that on Thursday.

Jordahl: I don't see nay problem with that.

Stutsman: What will the cost of that be.

Thompson: You can save about $70,000 but that annually.

Beaudry: That's for the 2 slots on an annual basis.

Lacina: Is there a reason not to do it, I guess is the question. If we're going to save money it's going to be a better program for the kids is there a reason not to do it. The judges are going to support it. We're phasing into it. We're not going 5 slots, we're going 2.

Beaudry: I don't see a good reason not to consider it very seriously.

Stutsman: What will the cost will that be, and that will be addition to the amendment for the...

Thompson: It will have to be set aside a serrate line item for it.

Jordahl: The theory is though that it will be a negative cost. That we'll be saving money.

Stutsman: It's still an expenditure though.

Beaudry: The cost would be about $50,000 per year for those 2 slots.

Stutsman: How will that work Carol, will this be a budget amendment, but the separate line item we don't need to do that do we?

Peters: You'll need to visit with the Auditor's Office and then come back and see me.

Stutsman: So this will be $50,000 plus this additional cost above what we budgeted this year for detention.

Thompson: We could probably decrease the addition for detention by $50,000.

Beaudry: I think so.

Lacina: If the judge administers the penalty, they can either put them in detention at $170 or if they got the slot they can put them in ACE at the $70...

Thompson: We were thinking we would put them in detention first and then let them out as a privilege. Say to the child if you maintain your behavior here for a few days then you can get out instead of writing a long time in detention.

Lacina: And if the judge doesn't send them to the program the money isn't spent anyway.

Beaudry: Well I'm not sure how that would work, I think my vision was that the County would need to talk with LSS about the purchasing 2 beds, and the way I understood it was that you would be purchasing those 2 slots, and if they're not used I don't know if they would (inaudible) I would assume want the funding. Because they would have to increase their staff for that.

Lacina: I still think it would be wise move.

Duffy: Do some of these juveniles have jobs? They get into trouble... Are we talking about anybody below 18 years old.

Thompson: If they do once their detained they usually lose that job, because you have to be there in order to have a job.

Duffy: Well in the good old days of farmers, and farm background, I think some of these kids would get quite a work out, no what I mean.

Lacina: That was before liability Charlie.

Duffy: Yeah that's before liability is right, but that's the way it used to be, and it worked. But you're talking about serious crime, murders and something like that we would just have to do something more than what we've been doing.

Beaudry: Finding and maintaining a job is often a case plan that we have for the child unless they've been through court, especially if the child is not in school then we absolutely expect that child to get a job.

Stutsman: I think we need to talk to the Auditor's Office how we're going to handle this, you know, if we already have a contract with LSS and then that would to be increasing the contract, or would it just go through your budget. So I don't why we would...

Peters: What you would be looking at basically is increasing the funding, and they would be responsible for the contracting of the slots, because the money would go to...

Stutsman: I don't think we would be involved with the contract at all. We would just allocate the moneys and you guys would just increase the beds.

Peters: And you would need a budget amendment also for the 2 additional slots as well as the increased funding for detention.

Thompson: And when would we do that, would we do that when the regular budget amendment time comes up?

Peters: Basically yes, what they like to do is keep track of the requests for budget amendments, and then when there are several of them have a budget amendment hearing as opposed to taking them on a case by case basis, unless there is a definite cash flow crunch that would put us in violation of the (inaudible) and then it would be done on a one by one basis.

Stutsman: You might want to check with Rosemary to see when she's planing to do that next budget amendment. I wouldn't be surprised if she would hopefully wait until after the budget process was done. I don't know if you can wait that long.

Jordahl: This is a substantial budget amendment even though we're having it perhaps bundled with others and actually handled later as part of our consideration. What's our ending balance going to be, for example, going into this budget consideration we're going to want to know about $100,000 or so that we're going to be short.

Lacina: Linn County increases 24%, we'll take your $433,000 to about $541,000.

Stutsman: But not until the year 2000, that wouldn't be...

Jordahl: So that would not be in this budget amendment.

Peters: There's the other consideration of what percentage of the individual budget with the $50,000 or the additional detention costs, so there are several thing that are considered when you decide when an amendment needs to acted upon.

Jordahl: Just sort of a mental footnote for the Auditor's Office that we want to make sure that this included on what we're talking about in terms of what our ending balance is going to be as we go into Fiscal Year 2000.

Thompson: Is Rosemary the person in the Auditor's Office who does this.

Stutsman: It's Rosemary's last day. Are we ready to approve this then.

Peters: You can go ahead and take action on approving going forward with the 2 slots, and then you would have to make the budget amendment later on.

Stutsman: OK

Jordahl: OK, thank you Carol that makes sense.

Duffy: Keep up the good work.

Jordahl: Because we have a representative of the County Attorney's Office here at the present time, and we don't want to keep such well paid staff away from the office unnecessarily, I don't see anything else on the agenda that's keeping someone waiting do we?

Stutsman: I don't know if the individual from Mid-America was here, I thought I saw him come in.

Jordahl: Pat do you have someone here from Mid-America? We'll just stick to the agenda then.

Langenberg: Do you have the price comparisons that they presented on the (inaudible).

Lacina: It was in that blue folder, which was what, $5,000 a year savings if we sign the contract.

Langenberg: I was just wondering where we are standing on that, how you feel, you know, they really want something done before the first of the year and they said they could extend it 45 days (inaudible) January. It's my personal opinion though, what prices, what are they going to do, I see them increasing, I don't have my crystal ball in from of me I can't really predict that, so I think that one of the contracts, maybe the first one might be the way to go with not a real large risk to Johnson County. Does this just meet your concerns?

Lacina: School District already signed a contract with them, and basically it saves us, it gives us a reduction of what we're paying now up to $5,000 a year. If prices do go down there might be saving beyond that but I don't know how much.

Stutsman: If prices go down?

Jordahl: After deregulation. Steve you have been following this issue for the Board and have attended conferences and so fourth on it. I think we need to respect your thoughts on this do you have any background or detail you would like to present to put this in light.

Lacina: Well, one is that there is a lot speculation on deregulation, and the first question is that is it going to happened and we don't know. It's going to take legislative action and there are a lot of ‘ifs' out there. Trying to get rid of all the speculation and go right to the facts, we know that we pay X amount now, and we know that can reduce it by $5,000 a year if we sign this contract, so the roll of dice will prices go down more than the $5,000, I don't think so. I think Pat's right, that prices are going to go up. So if we can grab the saving now at least we got that $5,000 in the bank. It's not even a contract to keep us flat. We are seeing reduction enough from the money that goes out to pay the bill. So, I think it's a good offer.

Langenberg: And that restructuring, you know, I think they're guessing 4 to 5 years too, maybe even consider it maybe later, so I don't think that's set in stone either as far when that's going to be. So, if this 6 year contract was signed we'd be maybe out of here...

Lacina: You've got something to work for with future budgeting you're not going to see these blips. You know you have a contract with 5?

Jordahl: 5 year.

Langenberg: No, 6 year contract.

Lacina: 6 years. So, you've got a constant number you can work with.

Jordahl: Other thoughts on the matter. Does anyone form the public want to speak to the issue.

Welsh: What is the penalty if you avoid the contract.

Jordahl: I don't believe that was discussed, do we have that?

Stutsman: I don't know if there is a penalty we're just at whatever the going rate is. This is just locking at a cost. Like Pat talked about, it's a crystal ball, we just don't know what it's going to do, if prices are going to go down but they could very well go up.

Welsh: Don't most contracts have, if you want to break that contract, and shift.

Stutsman: Why would we break it if we signed it.

Jordahl: Hypothetically, if energy costs drop by 2/3rds would we try to get out of the contract. The (inaudible).

Stutsman: Will there be a contract that we sign, Pat.

Langenberg: I think they left one with us last time. There are 3 different proposals too which, you know, it depends which one you want.

Lacina: Do keep in mind though, that if you write the clause in there to break the contract and the prices go in the other direction then they decide we'll break the contract the door swings both ways. You kind of have to have good faith, it's like buying a oil. You could go out in the market and wing it from day to day or actually what we're doing is pre-purchasing that energy use for a lesser cost is what it amounts to. So, we have those units of energy stored at that price for when we're going to use them for 6 years.

Welsh: The only other thought that I had is that fact why are they making this offer. Most businesses do not make an offer unless they feel it's in their best interest.

Lacina: It is in their best interest, Bob. One of the things that they are trying to deal with is that energy is not storable, they are trying to guarantee a supply. It's a little bit like the airline they can sell some seats cheaper towards the end of the flight, because the plane is going to go anyway. Well if they can lock in a constant they can do a little gouging up here as long as they have that base and what part of that base do they know they'll have this continual stream of energy that they can commit to in the electrical grid system. So. yes it's in there best interest.

Welsh: Once they get enough large users it would discourage people from coming in.

Lacina: That's the other thing with Power Wheeling, they are very concerned about the outsiders looking in, if they can get these contracts they can give us a little bit better deal.

Stutsman: You know, and its an unknown, and we just don't know. And we just make our best judgement on what we think is going to happen. I hate to make projections, but I think energy costs are going to up. I think we in the Midwest are going to pay the price for cheap energy on both coals, but the large population centers us our, so based on that assumption this looks pretty good. But, who knows.

Lacina: And next year you may have a Power Wheeler come in here that will offer you half the cost, the following year be out of existence if you sign with a good company, and we have problems there, if its 5 guys sitting in suite in Des Moines Power Wheeling, here today gone tomorrow, there are all those thing. It isn't always cost it's dependability also.

Stutsman: Dependability too, we've worked with Mid-America as far as service and things you know, there again you don't know. I don't know if that would enter in. I'm not really versed on...

Langenberg: I don't think we'll ever lose that money.

Stutsman: The only other thing, is that in talking to Joe this morning, you know he talked about what Mid-America is going to for us as far as putting some programs in place to help us save energy and things. I know you've worked with them in the past, and maybe that could part of what we want from them as willing to sign this contract.

Jordahl: I think they have the motivation that they have to come in is not necessarily to sustain profit, as you might. I asked them this question too. Why would you come in here and offer us this rate if you believe the Department of Energy's projections that prices are going to go up, and the stability answer that Steve gave is the answer that they gave us when they came to talk about it. I think there is some credibility to that. I guess that I'm persuaded that we probably ought to go ahead and take advantage of this opportunity. Do you have a recommendation between the 3 contract options, Pat?

Langenberg: Looking at them I personally like the first one.

Stutsman: So they will present us with a contract then and that will be reviewed by the County Attorney is that how we're going to do that? But, for right now we're just saying that by a head count that we're ready to go ahead.

Jordahl: Whether we have a contract in hand or not, you said that they may have handed us one.

Langenberg: I believe they did.

Jordahl: Let's scare that up.

Langenberg: If not I can get another one.

Jordahl: So we'll tell pat that we're interested in option number one to maybe focus his thinking, and to spend more time with it. We'll put that on, can we get that by Thursday? If we want this done by January 1st I don't know if that option is still on the table.

Stutsman: You said we could get an extension of 45 days. Maybe if they know we're considering it we just have to review it and put it on for formal action maybe after the first of year is quick as...

Langenberg: I talked to them yesterday and they could extend it, you know. But, they said they wanted it done by the 31st.

Jordahl: Well, would you contact them for us and say that we're interested in this but we need to have it reviewed by the County Attorney and we'll put it on as soon as we get that back. Is that OK? All right then we'll wait to hear back from Pat I guess, let them know that we have kind of a time frame on that.

Duffy: I should make a phone call if you want to take a few minutes break here.

Jordahl: Anybody interested in taking a break?

Stutsman: Sure.

Lacina: Sure.

Jordahl: We'll recess for 10 minutes.

Recessed at 10:16 a.m.; reconvened at 10:38 a.m.

(Continued in Part 3)