The engineer informed the County Board that only (1) bid was submitted for Unit #, for the amount of $509.11. Motion by Jarchow, seconded Boyenga, to accept the bid, declared carried on a voice vote.
The Engineer also presented a Luverne Street construction update; no action taken.

The County Board discussed gravel tax issues as a follow up to the Public Meeting held on June 10th. After discussion, it was determined to table action until the July 2nd County Board Meeting.

Motion by Jarchow, seconded by Boyenga, to approve the June 4, 2002 County Board minutes, declared carried on a voice vote.

Motion by Boyenga, seconded by Erickson, to approve the following consent agenda items, declared carried on a voice vote.

1. Contract 22-533-02 with Pinnacle Programs Inc., to provide non-secure residential treatment for children. Rate is $117.13/day, and reflects a 10% increase from previous contract. Contract effective 7-01-02 to 6-30-03.

2. Foster Care relicensing Ð Rod and Lisa Rosin

3. Day Care licensing Ð Kammi Biber

4. Day Care relicensing Ð Kathie Hendricks

5. Voluntary Day Care closing Ð Crystal Tiesler

6. Resolution 23-02, implementing the Federal Transit Administration regulations on drug and alcohol misuse

The County Board acknowledged receipt of the Southwest Opportunity Annual Report with no action taken.

The County Board received a notice canceling the Rock County Pool meeting that had been scheduled for June 17th due to the receipt of no bids from the RFP. There were, however, two requests to delay the RFP process. The County Board took no action to these requests.

The County Board discussed Resolution No. 22-02, which sets a standardized amount for commodity rates: motion by Hoime, seconded by Boyenga, to approve Resolution No. 22-02, declared carried on a voice vote.

The County Board discussed the AMC Service Award for 2002; at this time no nomination was made.

Commissioner Hoime informed the County Board that he would be attending the NRCS meeting to be held in Slayton on June 19th.

Commissioner Erickson stated that he would be attending a meeting in Watonwan County involving the University of Minnesota Extension Service on June 25th @ 4:00 P.M.

The County Board discussed the notification process in regard to conditional use permits and the fees structure. After discussion, the Chair directed that the notification process should include a mail return receipt from all parties receiving the notification and to include that mailing expense in the conditional use permitting fee.

Motion by Boyenga, seconded by Erickson, to grant signature authority for the Water Plan to the County Administrator, declared carried on a voice vote.

The County Board of Equalization arose from recess; motion by Hoime, seconded by Erickson, stating that no business came before the Board of Equalization that was held on June 17, 2002, and no action was taken, declared carried on a voice vote.

With no further business to come before the County Board and the County Board of Equalization, the meeting was declared adjourned.

Jane Wildung, Chairman of the Board
ATTEST:
Kyle J. Oldre, Clerk to the Board
(7-3)

By Sara Strong
The dry weather caught up with the city of Luverne's water system this week.

As of Tuesday the city is imposing a water restriction. Lawns may be watered between the hours of 8 p.m. and 8 a.m., but residents are asked to limit their water use as much as possible.

Similar restrictions are in place in the surrounding area.

Despite the nearly 1 inch of rainfall late Tuesday and early Wednesday morning, the city's supply is still considered low enough to warrant restrictions.

There is an exemption to the watering restriction. The city will water the new sod just laid on the Freeman and Estey street project. The roots have to take hold before it can be left longer without water.

At Tuesdays Council meeting, members also:

Voted to amend the budget to include $37,000 for the new "Evergreen Park," or the former Christensen home, along North Blue Mound Avenue.

Most of the work will be completed this summer, with other additions, such as possible bathrooms, to be added later. The location is ideal, because Rock County is constructing a bike path along Blue Mound Avenue to Blue Mounds State Park this summer.

Discussed the possibility of banning parking on Freeman Street during the Rock County Fair. The street is typically crowded with parked vehicles and regular traffic during the fair, but the Highway 75 construction project this year will cause heavier traffic on main north-south streets such as Freeman Avenue.

The council directed staff to close the street to parking during the fair if the railroad crossing work causes both Highway 75 lanes to be closed. Staff will communicate with the local fire department, SheriffÕs Office and construction crews to determine if itÕs necessary to ban parking.

People interested in filing for elected city of Luverne or Rock County offices have until the end of the day Tuesday, July 16, to do so.

In the city of Luverne, the primary election ballot will show the north ward council seat, the south ward council seat and the office of mayor.

County offices that are open for election this year are county recorder, auditor/treasurer, sheriff, and county attorney.

County commissioner seats on the ballot are Districts 2, 3, 4 and 5.

Soil Water Conservation District 2 and 5 supervisors will also be on the ballot.

Those filing for office as of Wednesday morning, July 3, are:

Luverne mayor, Keith Erickson
Rock County Auditor/Treasurer, Lisa Ahrendt DeBoer
Rock County Sheriff, Ronnal M. McClure and Michael Winkels
Rock County Attorney, Donald R. Klosterbuer
County Commissioner District 2, Richard D. Bakken
County Commissioner District 3, Ron Boyenga
County Commissioner District 4, Robert (Bob) Jarchow
County Commissioner District 5, Jane A. Wildung
SWCD 2, Vicky Smook, SWCD 5, Donald P. Reker.

By Lori Ehde
Research continues on improvement options for Luverne Community Hospital and Medical Center.

Hospital Advisory Board members are working with Sioux Valley on an architectural study of the hospital and clinic campus.

According to hospital administrator Gerald Carl, the current buildings are not well-suited for new services offered to patients.

Further, he said hospital inpatient rooms are outdated, lacking amenities such as personal showers, which have become standard in most hospitals.

After several months of meeting with architects, three options have been identified as possible directions to pursue. Those options include:

oRenovating and expanding the present hospital and clinic on their existing campus.

oBuilding a new hospital on the parking lot to the north and expanding and renovating the clinic in its current location. This option would include closing Brown Street and new space for parking would need to be addressed.

oBuilding a new hospital and clinic facility on a completely different site. Planners haven't released possible options for a new location.

Planners also aren't releasing information on what might occupy the remaining hospital space if a new facility were to be built.

Sioux Valley Regional Health Services, a division of Sioux Valley Hospitals and Health System, has retained interim architectural services of Spitznagel Inc.

The Sioux Falls firm has done previous work on the Luverne Hospital and on Sioux Valley System hospitals.

Carl said the need for more and better space speaks well for Luverne's medical facilities.

"We have a good complement of doctors. The hospital's been busy. Not all communities can say that," Carl said when the study began in April.

"We are adding a doctor this summer, and we have specialists that come to Luverne from Sioux Falls to see patients locally. There are more who would like to come, but we currently don't have the available space."

As the study continues, Carl said work - regardless of which option is pursued - could begin as early as next spring.

"We want to get input from all parties involved, and whatever we do, we need to make sure everyone's on the same page and that the decisions made are the best ones to serve the healthcare needs of the Luverne area," he said.

"It's very clear Luverne Community Hospital and Medical Center will do what needs to be done to meet those needs."

By Sara Strong
The Rock County Board of Commissioners voted to implement a gravel tax last week.

Commissioners set the tax after additional discussion at their regular meeting Tuesday, July 2.

The production tax starts Jan. 1, 2003, and will be 10 cents per cubic yard or 7 cents per ton.

State legislation in 2001 changed the previous aggregate tax to allow any county to implement it, after a public hearing.

The aggregate material tax is a production tax on the removal of aggregate material, imposed on importers and operators.

Gravel pit owners and users will have to weigh or measure what they extract and report it to the county auditor.

The reporting wonÕt be easy to enforce, so pit owners will pay it on an honor system.

Rock County townships support it, because they will get a portion of the tax to help pay for roads in their small budgets.

State law calls for the county to receive 60 percent of the tax revenue, the townships to receive 30 percent and the remaining 10 percent to go into a fund for reclaiming gravel pits when they are abandoned.

Townships and the county discussed the tax and agreed on a further split. Of the township portion of the tax, half would be divided among the 12 Rock County townships and the other half would go toward the townships with active gravel pits.

The gravel tax was first discussed as a way to recoup costs of wear on roads used by heavy gravel equipment. It also considers that gravel is a resource that, once gone from the county, can't be replaced.

Rock County Commissioners reasoned that the county should benefit from a resource that is steadily leaving county lines.

Other area counties may follow suit with their own gravel tax. Murray, Pipestone and Nobles counties have expressed an interest, but are waiting to see Rock County's gravel tax results first.

Currently, 22 counties have a gravel tax in Minnesota.

By Lori Ehde
Construction on Highway 75 between Interstate 90 and Edgerton will begin Monday, causing detours in the city of Luverne and north of Hardwick.

Luverne's detour will begin soon after the project starts for the "mill and overlay" work in town.

This includes stripping asphalt down to the concrete, hauling it to a bituminous mixing plant three miles east of Hardwick, and reapplying the asphalt overlay.

The work in town also includes some curb and gutter repair and replacing railroad tracks two blocks south of Main Street.

Work north of the stoplights will allow traffic to pass around crews, but Highway 75 will be closed from I-90 to Main Street for three to four weeks - cutting off the lifeblood to many businesses operating along that stretch.

Bad for business
"That's really going to kill us," said Joyce Sandbo, manager of Pizza Hut. "I know it's going to put our sales way down, and if business drops off, we'll have to cut back on employee hours, too, so it affects all of us."

Sandbo said she hopes the road reopens in time for bike rally traffic heading to Sturgis, S.D., during the first week in August.

Country Kitchen owner Raney Israelson said he's disappointed with the timing of the project.

"July and August are our biggest months. In the summer time we really rely on our interstate traffic, which is 75 percent of our business in the summer," Israelson said.

"It's really poor timing on the DOT's part. I strongly believe that project could have been started in April or October. Tourists aren't going to come off the interstate when they see the barricades up saying the road's closed."

LeRoy Lindbloom, manager of Farmers Union Co-op Oil, is bracing for the construction, but looks forward to the end result.

"It will affect us, but what are you going to do? The work needs to be done," he said. "I suppose our local people will find us, but the traveling people will stay out by the interstate."

When asked about the timing of the project, Minnesota Department of Transportation project supervisor Ken Janovsky said tourism season always runs concurrent with road construction projects.

"We can't work on it in the winter," he said. "That's Minnesota, though, isn't it? There's winter and there's road construction."

He said crews will do their best to accommodate businesses and get the work done quickly.

Luverne detour
Traffic entering Luverne from the south on Highway 75 will be directed to turn left (west) on Gabrielson Road (by Taco John's).

Gabrielson loops around the west edge of town through the industrial area and connects with West Main Street (County Road 4) near the ethanol plant.

Detoured traffic reconnects with Highway 75 from West Main Street at the stoplights.

The other closed portion of Highway 75 will be between Hardwick and Edgerton as crews repair culverts along that stretch.

Rural detour
Motorists will be detoured five miles east through Hardwick on County Road 7 to County Road 2. This will take them north to Edgerton where they will turn east on Highway 268, which reconnects with Highway 75 six miles west of Edgerton.

That portion of the road will be closed roughly six weeks, depending on weather and construction progress. It will start about the same time Luverne's work begins.

Duininck Brothers Inc., Prinsburg, was awarded the state contract with a bid of $2.6 million. Some of the materials used for the work will come from the new quartzite quarry mined from the Marcella Scott pastures near Hardwick.

Janovsky reminds motorists to drive with caution in the work zones. "Stay alert, don't tailgate and be patient," he said. "Remember, the work zone crews are working to improve your future ride."

The last major Highway 75 improvement in Luverne was nearly more than 10 years ago, and the rural portion north of Luverne hasnÕt been redone since 1985, according to Janovsky.

Gordon Dale Spronk
Pipestone veterinarian and businessman Gordon Dale Spronk was sentenced to one day imprisonment and three years supervised release for making a false statement to a federally-insured bank.

He was also ordered to pay a $100,000 fine and to complete 300 hours of community service.

During his guilty plea in November, Spronk admitted that he assisted others in making a false statement to the First National Bank of Garretson, S.D., to influence the bank into making a $400,000 loan purportedly to GVI.

The loan was actually being used to purchase a $1.1 million problem loan of a radio broadcasting station in Sioux Falls, S.D., in order to deceive federal regulators.

Under terms of his plea agreement. Spronk, 46, provided $250,000 to the City of Pipestone to purchase a new pumper fire truck and other firefighting equipment; $100,000 in funds to Rock County to purchase and install road signs throughout the County to improve response to 911 calls; $50,000 to Luverne Public School System for the purchase of computers, projectors, and repairs; $50,000 to the Pipestone-Jasper School District for its elementary schools' computer labs; and $25,000 each to the Rock County and Pipestone County SheriffÕs Departments.

John Burgers
John Burgers, a former Rock County official responsible for land management and feedlot inspections, was sentenced to five months in a Sioux Falls, S.D., halfway-house and five months of home detention with electronic monitoring. He was also sentenced to three years supervised release and to serve 300 hours of community service.

Burgers pled guilty in December 2001 to mail fraud involving a deprivation of honest services in relation to his solicitation and receipt of bribes from GVI in exchange for GVI receiving preferential treatment.

Burgers, 48, Hills, admitted that in March 1996, he learned that debris and waste were being dumped by GVI and advised company officials to take care of the problem before he notified state officials.

A short time later, Burgers was in financial trouble and needed money. It was then that Logan arranged for Burgers to meet with Morgan, who arranged for more than $100,000 in preferential loans to Burgers.

When Burgers was asked to repay one of the loans, he met with Morgan, who provided Burgers with more than $5,000 in cash from GVI to pay down the loan.

Ronald B. Willey
and Thomas B. Willey
Pipestone businessmen Ronald B. Willey and his son, Thomas B. Willey, were also sentenced for acting as nominees in a $1 million fraudulent loan.

Ronald Willey, age 56, was sentenced to three years probation with 90 days of home detention. Thomas Willey, age 28, was sentenced to two years probation and ordered to pay a $25,000 fine. Both defendants received reduced sentences based on their cooperation with the government's investigation.

The Willeys owned and operated various Pipestone area businesses including Pipestone Lumber Company, Astro Propane, and Pipestone Rental Properties.

During their guilty plea hearing in February, the Willeys admitted that they allowed a fictitious company, Willey Contract Nursery Services, to be created as a nominee to obtain loans from First National Bank of Pipestone for use by GVI and its principals.

Through this fictitious company, GVI and its principals were able to circumvent federal regulations concerning lending limits and insider loans to obtain a $1 million loan.

Ronald Willey also pled guilty to intentionally failing to file a 1999 federal income tax return. As part of their plea agreements Ronald and Thomas Willey agreed to pay all outstanding tax liabilities, including penalties and interest. At his sentencing Ronald Willey paid $49,440 toward his tax liabilities.

Global Ventures Inc.,
Global Ventures Inc., was placed on probation for two years and ordered to pay a $150,000 fine. GVI was also ordered to pay $100,000 in extraordinary restitution, $50,000 to Pipestone County and $50,000 to Rock County for environmental and regulatory matters.

A representative of GVI pled guilty on behalf of the company in January to mail fraud for engaging in a scheme to obtain preferential treatment from Burgers.

The case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation.

Assistant U.S. Attorney Hank Shea prosecuted the case. Shea thanked several unheralded Pipestone and Rock County citizens who timely provided helpful information about the defendants' conduct.

He also praised the dedicated, professional efforts of FBI Special Agent Michael Dudley, who spent more than two years working on the complex investigation.

By Lori Ehde
Former Rock County Land Management Director John Burgers was sentenced Monday for his role in soliciting and receiving bribes from the Pipestone hog operation, Global Ventures Inc.

Despite the seriousness of the felony-level crime, Burgers' illegal actions were minor in relation to the sophisticated bank fraud conspiracy that centered around Global Ventures.

His sentence of five months in a halfway house and five months home detention is also light, compared with those levied against the ring leaders of the scheme.

Burgers appeared in U.S. District Court Monday for sentencing along with Global Ventures representatives and six Pipestone community leaders and businessmen, all involved in wide-ranging fraudulent conduct.

Two-year probe
reveals $13 million
in illegal loans
The orchestrated fraud schemes added up to more than $13 million of illegal loans made by a former president and director at First National Bank, Pipestone.

They also involved bribes taken by former officials with the City of Pipestone and Rock County; a ghost company created to deceive federal bank regulators; and lies to an FBI agent investigating corruption and bribes in the Pipestone area.

"Public corruption is at the heart of all the crimes for which these defendants were sentenced. As such, all the people of Pipestone and Rock County were the victims of these defendants' illegal conduct," U.S. Attorney Tom Heffelfinger said.

"We are very pleased that we were able to resolve this case in a manner that sends a strong message that public corruption will not be tolerated in Minnesota, and that ensures that the people of Pipestone and Rock County are partially and directly compensated for the damage done by their former community leaders."

The sentence orders for all involved parties were signed by Judge Michael Davis.

David S. Logan
David S. Logan, former Pipestone City Administrator and former CEO of Global Ventures I Inc., was sentenced to 71 months in prison and five years supervised release, which was the top of the sentencing guideline range. He was also ordered to pay a $250,000 fine, a $250,000 personal money judgment in forfeiture, and $100,000 in restitution to Nelson Minnesota Farms.

Under terms of his plea agreement, Logan also was ordered to pay the following in extraordinary restitution: $160,000 to the Minnesota Board of Soil and Water Resources and Rock County for the purpose of conducting a Level 3 feedlot inventory in Rock County; $55,000 to Pipestone County to augment current and planned county expenditures for feedlot technical assistance, feedlot upgrade cost sharing, and soil erosion prevention; $20,000 to the Midwest Environmental Enforcement Association for two environmental enforcement training seminars; $10,000 to Lincoln-Pipestone Rural Water System to augment current and planned system expenditures for ground water monitoring; and $5,000 to the Minnesota Office of Environmental Assistance for providing small grants for the implementation of environmental education programs.

Logan will surrender for service of his sentence on Aug. 9.

Logan, 54, from Pipestone, pled guilty in April to one count of conspiring to defraud the United States, one count of misapplication of bank funds, and one count of mail fraud by depriving others of the right to honest services.

Logan admitted that he and Michael Morgan, a former president and director of the First National Bank, Pipestone, conspired to violate banking regulations regarding lending limits and insider loans when Morgan caused a series of illegal loans to be made to companies controlled or created by Logan, including two in which Morgan also held an interest.

Logan also admitted to soliciting and obtaining a series of bribes and kickbacks, totaling more than $100,000, while he had served as the Pipestone City Administrator.

Michael Morgan,
Morgan was sentenced to 48 months in prison and three years of supervised release. He was also ordered to forfeit $250,000 to the United States, to pay $100,000 in restitution to Nelson Minnesota Farms, and perform 300 hours of community service. He will surrender for service of his sentence on Aug. 9, 2002.

Morgan, age 44, from Pipestone, pled guilty in March to one count of conspiracy to defraud the United States, one count of mail fraud, and one count of misapplying more than $13 million in federally insured bank funds. Morgan's sentence reflected a downward departure from his applicable sentencing guideline range based on his cooperation with the government's investigation.

Morgan, Logan, and others conspired to utilize the $13 million in bank funds for investing in hog production related businesses and concealing those investments from the Office of the Comptroller of the Currency, in violation of banking regulations concerning lending limits and insider loans. Morgan also used the monies to conceal non-performing loans and receive monies for personal investment and payment of personal debt.

William A. Winter,
William A. Winter, a retired Pipestone construction company owner who provided money to Logan for the purpose of obtaining preferential treatment regarding city contracts, was sentenced to two years of probation, pay a $50,000 fine, and serve 300 hours of community service.

Under terms of his plea agreement, Winter also provided $125,000 to the City of Pipestone to purchase four emergency warning sirens, a van, equipment for the city's recreation center, and other necessary equipment and materials; and $50,000 to the Pipestone-Jasper School District to purchase six computer servers. He also agreed to provide construction-related services, without charge, to Habitat for Humanity in Pipestone and Rock Counties.

Winter, age 62, pled guilty in November 2001 to making a false statement to an FBI agent who was conducting an investigation into bribes in the Pipestone and Rock County area. Winter falsely told the agent that he had never given money to Logan, when in fact he had provided money, services and other things of value in order to obtain preferential treatment on bids for job contracts under the control of Logan.

Beaver Creek farmers Clair Crawford and Carl Gehrke examine a soybean plant for signs of aphid infestation Wednesday, July 3, during field day at the Luverne Public School agriculture plot. The field day was sponsored by Rock County Extension Services to help educate farmers on how to combat the soybean aphid, an insect native to Asia, that threatened soybean crops last year and is expected to infest more fields this year.

Photo by Jolene Farley