MINUTES
OF MEETING
CORAL
SPRINGS IMPROVEMENT DISTRICT
A meeting of the Board of Supervisors of the Coral
Springs Improvement District was held on
Present
and constituting a quorum were:
Robert
Fennell President
Sharon
Zich Vice
President
Glenn
Hanks Secretary
Also
present were:
Dan
Daly Interim
Manager
Edward
Goscicki Co-Manager
-
Dennis
Lyles District
Counsel
Jane
Early CH2M
Hill
Sean
Skehan CH2M
Hill
Cory
Johnson CH2M
Hill
Jim
Aversa CSID
John
McKune District
Capital Improvement Coordinator
Randy
Fredericks CSID
Drainage Supervisor
Bob
Koncar
Brenda
Schurz
Pamela
Rower
Stephen
Bloom
Kay
Woodward CSID
Accountant
Jan
Zilmer CSID
Human Resources
FIRST
ORDER OF BUSINESS Roll
Call
Mr. Goscicki called the meeting to order and called the roll.
SECOND ORDER OF BUSINESS Approval of the
Minutes of the January 28, 2008 Meeting
Mr. Fennell stated each Board member received a copy of
the minutes of the
There not being any,
On MOTION by Ms. Zich seconded by Mr. Hanks
with all in favor the minutes of the
Mr. Fennell stated we received quite a few things
overnight via emails.
Ms. Zich stated I would rather they be in the package so
if I go back to them later, they are in the package and not all over. I did not start looking at anything until
Mr. Goscicki stated in defense of the engineer, Mr.
Skehan sent me these work authorizations a week and a half ago. We were still in discussion on some of these
things; going over the dollars and getting justification. I made the decision to get them on this
week’s agenda because they are important items.
We want to keep the docket going.
If they were not time sensitive, we would hold them until the next
meeting. If I see time sensitive issues
come up in the future, I will put them on the agenda as drafts. This way you can read the background and
understand it has not been finalized through the manager yet.
Ms. Zich stated the dates on here are
Mr. Skehan stated I certainly understand. Our efforts, as Mr. Goscicki said, will be to
have drafts, in advance, in the future if they are not finalized.
Ms. Zich stated that will be much better.
Mr. Skehan stated I agree with you.
Ms. Zich stated give us the finalized drafts and
highlight any changes.
Mr. Skehan stated we have been talking about some of
these items for over the last month as you can see by the dates. I can give you a quick synopsis of some of
those items.
Ms. Zich stated all of the accounting information is in
the package every month. I have the
opportunity to go to Ms. Woodward before we get to the meeting if I have any
questions. I did not know these were
coming up until this morning.
Mr. Goscicki stated Mr. Skehan and I have been talking
about having the engineer prepare a brief narrative as part of the agenda, giving an update on the capital improvement
projects. They will highlight any
changes or occurrences from the previous month.
This way we will have a good record.
You will have a document you can read at your leisure and not have to
spend a great deal of time discussing it at the meetings.
Ms. Zich stated I just want as much to be in the package
when we get it.
Mr. Hanks stated with the work authorizations and other
components, I do not know how hard it can be to put together a paragraph
summary of what it is we will be looking at and what the manager’s
recommendation is.
Mr. Goscicki stated it is something we should be doing on
a routine basis. We need to get our
scheduling together on this.
Mr. Skehan stated we are starting to get into the meat of
the work with several of the projects taking place. At this stage it is appropriate timing for
having a quick summary for each of the projects. This way we will see if we had a meeting,
what the results of the meeting are and what the status of the project is.
Mr. Goscicki stated we plan to bring up these three items
later in the agenda.
Mr. Fennell stated I agree with everything said
here. We have to get this timelier. This is not the old type of Boards where we
come in with a couple of projects and we are going to spend $10,000. We are now managing $40 million and we need
better information and timelier.
THIRD
ORDER OF BUSINESS Discussion
of Pension Plan Options
Mr. Fennel stated let us move forward with discussion of
pension plan options. I had given my own
definition, which is 80% of the salary less social security. A city job is $30,000 a year. After 35 years if there was no inflation,
that job would still be worth $30,000 a year.
At that point, the person will have $26,000 a year. If I look at this and say there were no
inflation and a 6% accumulation, you will have $26,139 per year. If you start at age 20, you will have $3,267
times 12. It looks to me like $39,000,
which is greater than $30,000 plus social security, which today would be
$15,000. If there were no inflation, it
would be $44,000. It will be more than
what the job pays. If a current salary
is $30,000, we can expect it to pay $84,000 in 35 years. At that point you can expect to get $42,000
from social security. Actually I get
$39,000 and $42,000. I end up with a
projected retirement of $81,000, 35 years from now.
Ms. Zich stated I looked at it, and thought about it, and
6% sounded good to me.
Mr. Fennell stated we are also contributing to another
index fund called social security. It is
the only retirement system, which has held up.
If you take someone who is 20 years old and is making $30,000, 35 years
from now the job will be worth $84,023.
It looks to me like $4,356 times 12 is close to $52,000 plus the $42,000
I have for social security. It comes out
to be $94,000.
Mr. Hanks asked what were the assumptions as far as
longevity once you reach 65? Is it a
401A plan we are looking?
Mr. Goscicki responded it is a defined contribution
retirement plan.
Mr. Fennell stated the real issue most retirees have is
they can outlive their money.
Ms. Zich stated we would hope employees would set some
money aside for themselves.
Mr. Hanks stated what I am getting at is here is the
approximate monthly income at age 65.
What were the assumptions used to reach this approximate monthly income?
Mr. Goscicki responded this is if you live to 90. The spreadsheet I worked out says you retire
at 65 and at 90 you run out of money.
The other consultants used more conservative numbers in terms of the
earning rate. If you raise it to 7% or 8%,
you can get a better return. If you are
age 30 now and making $30,000, just accounting for inflation at retirement your
salary at retirement will be $84,000.
When you look at the annuity you will be accumulating you will be
getting approximately 25% a year of the future based rate. Social Security will add on another 20%.
Mr. Hanks stated so the monthly income is 35 years out.
Mr. Goscicki stated it is at age 65. It is how much real money they will be taking
out in that year. It is not today’s dollars.
Mr. Fennell stated I think we have a fair plan. We need to encourage our employees to save on
their own. If we put in 1%, I expect
them to put in 2%. The problem is after
you turn 65, you start running out of money in 10 years because inflation goes
up 3% to 4% per year. You need more to
start with and the way to do this is with a type of matching contribution.
Ms. Zich stated I thought it was high. Unfortunately, I am not use to government
retirement plans. I would love 6%.
Mr. Goscicki stated one of the next steps I think will be
appropriate for us to take, is to look into a 457 plan for employees, which is
a government version of a 401K. Getting
it established will be an easy way for employees to allocate money. The Board can at some point look into making
matching contributions.
Mr. Zilmer stated we have an existing 457. They are suggesting we amend it into a 401A,
which allows us to make a contribution.
Mr. Hanks asked does the conversion of a 457 to a 401A
preclude the other retirement plans in place?
Mr. Zilmer responded no.
It is completely different.
Mr. Hanks asked what was the original drive to move
forward with changes to the pension plan?
Mr. Zilmer responded it is the biggest factor in
retaining utility employees.
Approximately 50% of the employees CSID has are either water or
wastewater operators. Those are the
hardest people to retain because they are going out for better retirement plans.
Ms. Zich asked what about health insurance? We have such a nice health insurance plan
here. We have health insurance and
dental. Nobody picks up all of these
things anymore.
Mr. Zilmer stated we seem to get more employees who have
already retired from other utilities.
They have their retirement now and they want to take advantage of our
benefits. There are restrictions on the
amount of hours they are willing to work.
It will be ideal to get younger people.
We have offered training programs and let them go through
internships. A number of them went to
other municipalities because of the retirement system. Mr. Petty wanted to start introducing the
Florida Retirement System a year an a half ago.
Mr. Hanks asked what type of costs do you see the
District incurring by switching to a 401A?
Mr. Zilmer responded it is minimal.
Mr. Goscicki stated most companies in the private sector,
which have 401K contributions will have a percentage maximum. The President was indicating you contribute
$2 we will contribute $1, but you would also have a total dollar or percentage
caps. Can you do some type of a match on
a 457?
Mr. Zilmer responded there is no provision for us to make
a match on a 457.
Mr. Hanks asked what is the down side of switching to a
401A from a 457?
Mr. Zilmer responded nothing. It allows us to make a contribution, but then
you have to determine what type of contribution.
Mr. Hanks asked what are the limits on the contribution
we can make?
Mr. Zilmer responded $44,000 or 25% of your gross
earnings.
Ms. Zich stated let us say we have a $90,000 employee, 2%
is $18,000. Will we match with $9,000?
Mr. Hanks stated I think we have to establish a number.
Mr. Zilmer stated I think $15,500 is the maximum you can
put in to have it tax deferred; although, there is a provision for people over
50.
Mr. Goscicki stated what I am hearing from the Board is
you are comfortable with the current plan of 6% contribution into the annuity
fund for the employees. You are willing
to entertain a matching 457 or 401A type plan.
We need to come back to you with specifics at the next meeting as to
what the 401A can look like, what the limitations are and what the
contributions will be under a proposed scenario. What I am hearing the Board talk about is a
50% match up.
Mr. Fennell stated I think the people we want to help
most are the people in the water waste area.
Mr. Goscicki stated we need to look at an investment
schedule on it for your contribution.
Mr. Fennell stated we have to present to the employees
what they actually have.
Mr. Zilmer stated we get everyone signed up and all of a
sudden they need to take out all of the money they invested. This is the only drawback to us contributing
to a 401A. With the Money Purchase Pension
Plan, they cannot take the money out unless they retire. This encourages them to continue to
work.
Mr. Fennell stated we want to encourage them to save
more. We have to sit back and say your
life is in your own hands. We should
entertain this now, and you can come back to us with something. You have a feel for what we are thinking
about. We are not in bad shape. We think we are fair.
Mr. Hanks stated let us be creative and open minded as to
how we are going to retain our employees.
Mr. Fennell stated we should also look at ways to pay for
continued education for all of our employees.
There are going to be four year programs at the community colleges. I would like us to look into this. One of the issues we always face is, we have
great utility workers, and they get to a point where they are no longer hands
on. They are actually managing other
people and they have to use their skills.
I believe the program at BCC will be like that. It is a bachelor degree in management and in
some type of technology. There is such a
degree that exists out there. It is
something we should look into. As our
people progress we have to make sure they have the right training. We all know after a while it is a question of
budgets.
Mr. Goscicki stated we will come back to you next month
with more details.
FOURTH ORDER OF BUSINESS Consideration to Award
Bid for Repair to WWTP Plant C
Mr. Daly stated we put a proposal out because Plant C
broke.
Mr. Hanks asked is the diffuser the part, which spreads
the sewage throughout.
Mr. Goscicki responded it is the pipe that pumps the air
in.
Mr. Hanks stated as opposed to an ocean diffuser, which
diffuses the sewage out.
Mr. Daly stated we had two
respondents to the bid. One was for
$40,000. The other one was Intrastate
Construction Corp., which came in at $34,000.
After Mr. McKune and Mr. Hyche discussed the fact they are onsite, they
were nice enough to reduce another 25% bringing the bid to $25,725. It has been 45 to 60 days since this has been
going on. We are going to need to do
this before it gets too hot. The last
time we did this, we had a letter from a resident who was not pleased with us
because of the odor. Before you are able
to support this, we will be happy to blanket the area with a letter stating it
might smell, but we are going to upgrade our odor control.
Mr. Hanks asked did the pipe break?
Mr. McKune responded the
issue is the diffusers and their attachments were supplied to us by the
supplier. The diffuser arms broke. The cause was the assembly parts provided by
the supplier. The supplier did not realize
this was going to happen. At the time we
repaired Plant C two years ago we elected not to redo it because we had the
other problem and it was summertime. We
decided to see how long it would last.
Mr. Goscicki stated this is a major maintenance renewal
and replacement item.
Mr. Hanks asked does Interstate Construction Corporation
have the capacity to handle this work?
Mr. McKune responded yes.
On MOTION by Mr. Hanks seconded by Mr.
Fennell with all in favor the award of bid to Intrastate Construction
Corporation for repair to WWTP Plant C at an amount of $25,725 was approved.
Mr. Fennell asked what is
the difference between a bid and request for a quote?
Mr. Lyles responded if this
were under $4,000 we could get a quote from a contractor, supplier or
maintenance operation and make a decision, as staff, that this is a good deal for the District.
If it is over $4,000, we need to advertise it and make sure it is
competitively bid. You typically award
the bid to the lowest qualified bidder.
Mr. Fennell asked is there a different between going out
for a bid and requesting a quote?
Mr. Goscicki responded we have a $4,000 bid
threshold. If it is under $4,000, we
will competitively price these jobs. We
will contact several vendors. The
difference is we are not soliciting the price from particular vendors. We have not opened up to the world. We are saying we worked with these companies
before. We will get prices from three
vendors we had work done by before. If
it is over $4,000, we put a public advertisement in the paper twice stating the
work we want done, requesting a sealed bid to be turned at a particular
location by a certain time and date. We
open the bids and see who the lowest responsive bidder is.
Mr. Fennell stated I heard there was a difference between
a bid and request for quote as well as a legal responsibility. With a bid we have to go with the price and
with a quote we can still negotiate with the price. Is this true?
Mr. Lyles responded competitive bidding means sealed bids
opened publicly and the low bidder wins if the bidder is a responsible bidder
and the bid is responsive to the specifications you put out. When you get quotes, it is an informal
process. What you cannot do in a
competitive bidding scenario is ask the second lowest bidder to drop their bid
to become the lowest bidder. It is
prohibited by state law. It is a
competitively bid public works contract.
Getting quotes is a less formal process.
Mr. Fennell stated so a private corporation can do a
request for quotes and negotiate with each one.
Our hands our tied if we do a formal bid.
Mr. Lyles stated you are stuck with the lowest bidder,
but if you want to change around the nature of the project a bit, always
staying within the four corners of the bid specifications you put out so you do
not put other potential bidders at a disadvantage, you can negotiate some
adjustments.
Mr. Hanks asked as a Board what discretion do we have
giving consideration to the reputation of some of these firms? You and I both know there are some firms out
there we want to stay as far away from as possible.
Mr. Lyles responded if it is competitively bid, you do
not have discretion in that regard. You
have the necessity that your staff and it is primarily the engineers who are
responsible for this, do a type set of bid specifications. You want responsible bidders. Someone with a pick up truck
and a tool belt is not responsible enough to do a complicated utility type
job. You need to make sure they have
sufficient experience qualifications, insurance and bonding capacity. As long as they are part of the bid
specifications and all the bidders get to compete on equal footing, you should
get qualified responsible bidders as opposed to someone you do not want to do
business with. The other process you can
go through, which is more time consuming and expensive on the front end, is to
do it on an RFQ basis. You get
qualifications and rank them. You then
start to have the ability as a government not to have to look away from some of
the intangibles. You assign a weight for
things such as experience, on time completion, on budget completion and other
things that are broader in scope than just the price.
Mr. Hanks asked when we go out to bid on these do we have
any guarantee or any other assurances that these people are going to be able to
financially perform the duties?
Mr. Goscicki stated when we do big projects we will
require a bid bond. We will also require
performance bonds. In addition to the
other qualifications, you require some financial surety.
Mr. Lyles stated the surety bond we are going to have on
every project we do like this will have a large insurer step in if the
contractor goes bankrupt or walks off the job, we have a surety bond. At that time, the surety takes it over and
brings another qualified contractor in to complete the job at their expense;
even if it is more expensive than the original contract.
FIFTH ORDER OF BUSINESS Consideration of
Award of Bid for PS 1 and PS 2 Improvements
Mr. Fennel stated we
received three bids. The lowest bidder
had to decline, leaving National Home Builders as the lowest bidder. I am surprised at Intrastate Construction and
their prices.
Ms. Zich stated that is terrible. Why are they so much more?
Mr. McKune responded we questioned him on it and he said
he priced it out.
Mr. Goscicki stated the two other bidders are close to
what the engineer estimated the project cost and Intrastate Construction came
in nearly double the figure.
Mr. Hanks asked have we ever dealt with National Home
Builders?
Ms. Early responded National Home Builders did work on
Heron Bay Commons last year for NSID. I
think the work was approximately $650,000.
Mr. Hanks asked how did they do?
Ms. Early responded they did a good job.
Mr. Hanks asked with this size job will we need a surety
bond?
Ms. Early responded not with a smaller job like this
where you have a smaller bid package. We
are doing the new roof and painting.
Mr. Fennell asked do we have the money to cover this?
Mr. Goscicki responded as soon as I received the proposal
I called Ms. Woodward and asked her to send me the current financials as well
as the budget. We know the money is
there. It will not go in the agenda
unless I have spoken with Ms. Woodward and the money is available.
Mr. Hanks stated we were
directing our engineers to pursue continued use of propane at this site. Is that where the direction came from? It was a power supply for the pump. We had talked about whether it was feasible
to take out the natural gas. I bring
this up because it was recommended to the SWCD to switch out the existing
propane tanks.
Mr. Goscicki stated it is a significant dollar issue.
Mr. Hanks stated we do not care about going with
electric. We do not have the reliability
where it is needed.
Mr. Goscicki stated the problem is FPL is not
reliable. Propane is good and it is
inexpensive.
Mr. Hanks stated what was curious were the numbers
presented to SWCD. It was presented as
if electric was the way to go.
Mr. Goscicki stated I was at the original meeting because
I sat there as District manager. The
engineer’s recommendation was not to move forward with electric. They just presented the two options. In SWCD it was a staff recommendation to move
forward. It was seven to ten years
before you saw the payback on it. They
have different geography in terms of where the FPL substation is compared to
there pump station. It is not a direct
comparison to our situation. It is a
significant payback period before you realize those savings.
Mr. Hanks stated it was a different recommendation and I
wanted to make sure we were all on the same page. I am comfortable going with propane.
On MOTION by Mr. Hanks seconded by Ms. Zich
with all in favor the bid for PS 1 and PS 2 Improvements was awarded to
National Home Builders in the amount of $393,420.
SIXTH ORDER OF BUSINESS Consideration of
Engineering Work Authorizations
Mr. Fennell stated these made the agenda, but were not in
the agenda package.
Mr. Goscicki stated we put them in as placeholders even
though we did not have the back-up finalized.
Mr. Hanks stated we use consultants for the surveys and
landscape architecture as it relates to this.
Initially it had been run through CH2MHill.
Ms. Early stated I believe you chose a surveyor to do
ongoing District work as needed.
Mr. Skehan stated what we are doing with the geotechnical
part of the investigation is we are subcontracting. We have a geotechnical engineer who has been
doing this for years who will look at the report and then compile a report
generated from that data. This is not a
report coming from them. We are
collecting data, and doing testing.
Mr. Goscicki stated we have permitting requirements
stating we need to have geotechnical evaluations. This is why this work authorization is being
presented to you. It is critical in
terms of the permitting and construction process.
Mr. Hanks asked is there a difference in the exposure we
have? If something were to go wrong, is
there any difference on how we will approach things?
Mr. Lyles responded I would not think so. The important protection or safeguard is
ensuring the professional negligence insurance is in place in case something
goes wrong. We know we have that with
CH2MHill. If we were to get a different
consultant, we would make sure we have the same type of insurance protection. If the issue becomes one of whether you
should have gotten another set of eyes as opposed to the firm involved, it is
more of a policy issue. It is not an
exposure or liability issue. It is an
issue of whether we are protected by malpractice coverage.
Mr. Fennell asked is Work Authorization 42 for the bid we
just passed?
Ms. Early responded it is for inspection of the pump
stations.
Mr. Fennell stated during construction for pump stations
#1 and #2. This is what we just passed.
Mr. Goscicki stated yes.
Ms. Early and I did go through this in detail in terms of staffing and
the workload. I recommend the Board move
forward with this.
Mr. Hanks asked do the repairs on pump stations #1 and #2
need to have an engineer overseeing them?
Mr. Goscicki responded it is only a part-time
inspection. It is at most two times a
week if not less than that.
Ms. Early stated it is less than that. The big item is the roof. We want to make sure we are getting the
correct materials and have a couple of inspections. There is a little electrical work. We have to do some review of the bypass
pipe. There were a couple of components.
Mr. Goscicki stated we had some significant problems with
NSID on roof issues. We had to go back
to contractors and have them rebuild roofs for us.
Mr. Lyles stated if the city inspector comes out to look
at a job like this and misses something which ends up being defective, the city
is immune. They have no liability to the
District on these types of inspections.
If there is a problem, the city is off the hook and we are on our
own. I have litigated on this before on
behalf of government inspectors.
On MOTION by Mr. Hanks seconded by Mr. Fennell
with all in favor Work Authorization #42 for stormwater pump stations #1 and #2
upgrades was approved.
Mr. Fennell stated now we are getting into the
wells. There is another permit in
here. Something about us transferring money,
some place.
Mr. Goscicki stated this is a financial issue we were
going to bring up under the Manager’s report.
Now will be a good time. We have
a couple of people here. I would like to
introduce Mr. Bob Koncar to the Board.
Mr. Koncar is the General Manager for our management services group in
Mr. Fennell asked next to you, are they part of your
group as well?
Mr. Goscicki responded Mr.
Bloom you may have met before. He is our
Accounting Manager. Ms. Rower you know
as our Fiscal Analyst. They are here to
talk about this particular issue. This
is a good news/bad news type of issue.
There is very little bad news.
The only bad thing is we overlooked the fact we had $500,000 sitting in
a construction account as we went through our new bond financing. This is leftover from our Series 2002 Bond issue. We brought our bond counsel into this. They said we need to get this resolved. This should have been applied towards
construction projects and spent. It has
not. The good news part of this is this
Board has spent $900,000 on construction.
These proceeds could have been used against them had we identified them
and earmarked them as such.
This resolution states we are going to take the $500,000
and reimburse ourselves for the $900,000 we already spent. We have earned significant interest on this
sitting in a bank account for the last six years so we are going to need to go
through an arbitrage rebate calculation on this to make sure the interest we
earned does not exceed the amount of interest we are allowed to earn from a
bond issue. We are going to be working
with Deloitte, which is the firm we use for CSID to do arbitrage rebate
calculations.
Mr. Hanks asked have you had a chance to review this?
Mr. Lyles responded I have reviewed this. I talked to bond counsel, Ms. Ganz about
it. It is ready for the Board to take up
the resolution before you. It lets us
use our money in a protected fashion.
Mr. Fennell stated let me see if I can restate to you
what you just stated to me. It looks
like we have $466,000 left there from a previous bond issue. We spent a great deal out of our normal funds
as we went along. Somehow we did not
spend this amount. So this is going to
go towards our general fund.
Mr. Goscicki stated no.
The water and sewer fund.
Mr. Fennell stated okay, but it is going to go in the
operating fund.
Mr. Goscicki stated since we are refunding ourselves the
$900,000 we spent out of operating reserves to fund this construction prior to getting
the bond issue in place.
Ms. Zich asked how could we have done this? How could we have not known? I do not understand how we could not know.
Mr. Goscicki stated that is the bad news; going six years
with $500,000 sitting in an account. The
person who was doing the accounting at the time knew where it was. That person is not here anymore.
Mr. Hanks asked were you here six years ago?
Mr. Goscicki responded no, I was not.
Ms. Zich but it should have been where everyone knew
where it was.
Mr. Goscicki stated we knew where the money was. It just had not been allocated to the
appropriate account. It is sitting there
as a construction fund and no one was reacting to it. Ms. Woodward, I do not know if you can add
any more to this from what you were able to dig up in looking at these things
in terms of the history on this. I know
I cannot speak anymore intelligently to the history.
Ms. Woodward stated nothing other than I was asked to
look back at the 2002 Bonds by Prager Sealy because they wanted to be able to
transmit certain information to bond holders with respect to the 2002 Bonds,
which is typical. If you are buying
bonds, you would like to have an update on how things are going. When they asked me to look back at the
account I noticed we had a 2002 construction fund. I was trying to determine whether we had any
old 2002 construction projects still out there and I could not locate any. At that point I contacted US Bank, our
trustee, and asked them to look back at their records to help me determine if
everything was okay on this account as well as how we were allowed to use the
funds. He contacted Ms. Ganz and
everyone proceeded forward to find an answer on what needs to be done with the
funds.
Mr. Hanks asked have you figured out a way to avoid
losing money like this in the future?
Ms. Woodward responded yes.
Mr. Fennell stated it was not lost. It was never spent.
Mr. Daly stated you did not have consistent financials
for who knows how long. Ms. Woodward has
it all listed. I was surprised it was
not caught when the Series 2007 Bonds were issued.
Mr. Fennell stated congratulations in finding it. Just do not tell me you lost $500,000. My last question is about the arbitrage. It is sitting in an account earning money.
Ms. Woodward stated yes.
Mr. Fennell asked what rate is it earning at?
Ms. Woodward responded it is earning the same percentage
showing on our accounts with US Bank.
Mr. Fennell asked why would we have to give any of the
interest back to anyone else?
Ms. Rower responded because they were issued as municipal
bonds we are not allowed to earn an interest rate higher than what we issued
them at. You cannot issue a 3% bond and
then earn 6% because the government has given these as tax exempt bonds. There is a calculation that if you earn
excess interest it is the government’s interest because they did not collect
taxes from the people who bought these bonds.
Mr. Fennell asked will we have to pay taxes if we made
money?
Ms. Rower responded if we earned arbitrage, which is
excess interest, we will have to refund that money to the IRS.
Mr. Fennell asked a higher amount or just a piece of it?
Ms. Rower responded just the excess interest.
Mr. Fennell asked suppose we made an extra $100,000, how
much do we get to keep?
Ms. Zich responded we could not make an extra
$100,000.
Mr. Goscicki stated I think the total interest was about
$43,000.
On MOTION by Mr. Hanks seconded by Mr.
Fennell with all in favor Resolution 2008-2 directing the transfer of certain
funds on deposit in the construction trust fund relating to the District’s
general obligation water and sewer revenue refunding bonds, Series 2002 Bonds
to reimburse certain expenditures relating to the District’s water and sewer
system paid or incurred prior to the date hereof, providing for severability
and providing an effective date was adopted.
Mr. Fennell stated lets step back and get an
overview. We spent $50,000 already
looking at a monitoring well.
Mr. Skehan stated we are talking about the dual-zone
monitoring well right now. What we found
through a preliminary investigation is that there is a leak in the existing
tubing. The lower tubing has a leak in
it. We looked at different ways to
repair it using what already exists there.
The final conclusion of all this is trying to repair what is there is
going to put us more at risk in the future.
We are not able to provide assurance the monitoring well will not
continue to have problems three, four or five years down the road. Looking at where we are now we met a couple
of weeks ago with Mr. Hyche and the DEP.
Some of the project delays tie into the bond refunding. The unavailability of dollars tied this up
for some time. The DEP is anxious to
have this move forward. They were about
ready to issue a violation as there was not something concrete in place
demonstrating there was progress moving ahead.
We suggested to the DEP the safest way to move forward was to design for
a new dual-zone monitoring well. It is a
standard procedure with injection well systems.
They were happy to hear this was the case because they are anxious to
move forward.
Mr. Fennell asked are we not going to repair the existing
well?
Mr. Skehan responded no, we are not going to repair the
existing well.
Mr. Fennell asked how much money have we spent to
determine we cannot repair it?
Mr. Skehan responded we spent approximately $60,000 not
just to find out we cannot repair it, but to evaluate the situation. The issue was, as far as water quality,
finding out there was a leak. We went
through a procedure holding a number of meetings with DEP to discuss it. We had water quality evaluations and looked
into what happened. This led us to where
we are right now. We are now putting
together a design for the new dual-zone monitoring well and getting it
permitted. There are mechanical
components to this. All analog data will
be changed over to a digital recording system.
There will be a small computer tied to the system, which will be
collecting data, pressure recordings required by DEP and flow recordings from
the injection well. We are going to get
the injection wells and monitoring wells tied together in a more comprehensive
data acquisition system.
Mr. Fennell asked how many wells are there? You have an injection well and a monitoring
well that is no longer monitoring correctly.
Are we going to add another injection well or monitoring well?
Mr. Skehan responded no.
We are going to plug and abandon the existing monitor well. We will have a design to replace this
well. Instead of a three zone well we
are going to have a two zone well.
Mr. Fennell asked how much is it going to cost?
Mr. Skehan responded about $1 million, which has been
budgeted as part of the capital improvement plan.
Mr. Goscicki stated the original project was to refurbish
the existing monitoring well. That was
estimated to be $700,000 to $800,000.
You are looking at a $300,000 increase to plug that well and build a new
well. We wanted to make sure the Board
understood the issues. We had
significant discussions on this along with the operating staff. The recommendation of your manager along with
your staff is to go forward with the new well.
If you stay with the old well, you can end up spending $700,000 and wind
up with something that does not meet your needs. We felt the prudent way to go was to invest
the additional $200,000 to move forward with a new monitoring well we know will
meet DEP requirements.
Mr. Fennell asked are we going to need a new injection
well in the future as well?
Mr. Skehan responded we are trying to avoid it as much as
we can. The cost of a new injection well
is over $6 million. Every effort we are
heading towards is to avoid it.
Mr. Goscicki stated $6 million for a new well is not part
of your program.
Mr. Fennell asked where will you place the new monitoring
well so if we ever needed to replace the injection well, we would not have to
build a new monitoring well?
Mr. Skehan responded we looked at this and gave it as
much evaluation as possible. The
difficulty is the two injection wells as they are located right now, one is at
the northwest side and the other is on the southwest corner, they are too far
apart to put the new monitoring well in between. The maximum distance the DEP will allow for separation
of the monitoring well and injection well is 150 feet. The two injection wells are separated by
approximately 600 feet. It is not
possible to use one monitoring well in between them.
Mr. Fennell asked if we had to put in a new $6 million well,
will it be close enough?
Mr. Hanks asked within the range of our new monitoring
well, is there the capability of putting in a new injection well?
Mr. Skehan responded we looked into this also. The way the site is laid out right now, the
only place there is room to place this monitoring well is up close to the canal
bank on the northwest corner. As you
move down towards the south side of the plant site on the west side, you have
the pond bank and the canal bank. You
have little room to do something like this.
Part of where we are going is a segue to one of the other amendments up
for consideration, which is the water use permit. We are striving to attempt to maintain use of
the Biscayne Aquifer . We talked about
it at a couple of Board meetings in the past.
What you are seeing with this overall capital improvement
plan is a complexity of some of the issues tied to the water use permitting and
injection wells. Everything is
related. What we are trying to get to
with the water use permit, is if we can stand a little bit the use of the
Biscayne Aquifer , it is the least expensive way to add more water, which will be going into the nano plant. As long as we can maintain this and
demonstrate to the Water Management District it is not going to affect anything
near the
Mr. Hanks stated the Biscayne Aquifer goes down 100 feet
or so.
Mr. Skehan stated 150 feet. The
Mr. Hanks stated you start to get fluorides and solids
all the way out there.
Mr. Skehan stated yes. Your total is all solids. Your TDS will go up over 10,000
milligrams. Ocean water is somewhere
around 35,000 to 36,000 milligrams. Water
exceeding 10,000 milligrams of TDS is not considered usable for typical reverse
osmosis application.
Mr. Hanks stated if we ever have to use the Florida Aquifer
well, we need to have this monitoring well to demonstrate we are not
contaminating the Florida Aquifer well.
Mr. Skehan stated that is correct. Going back to your question on whether there
is room out there to save $1 million by not having to drill another monitoring
well, it will be difficult to put an injection plant on the west side of the
plant. You need a huge area for a
drilling rig to come in. The drilling
rig, which will come in for the monitoring well, is a third of the size of what
would be used for an injection well. The
amount of space is limited. With new
injection well systems DEP has allowed a monitoring well to be used for two
injection wells, but they have been reluctant to do so. There is no guarantee in the future with
their questioning injection well systems.
A. Geotechnical Evaluation for the WTP
Improvements
Mr. Fennell stated we have this work authorization for
the geotechnical evaluation, which is to look at the soil samples.
Mr. Skehan stated it is going out there to do a
geotechnical investigation. It is for
the new Plant F on the wastewater side, taking some borings in the vicinity of
where the large tank has to go. We have
to test the soil and everything underneath it as well as the vicinity of
several of the structures for the nano building.
Mr. Hanks asked because we are concentrating all of the responsibility
and accountability with the design of the system with CH2MHill, will our money
be better spent having a geotechnical firm do the report themselves?
Mr. Fennell asked is this a one-time deal?
Mr. Skehan responded this is a one-time deal. We will be responsible for generating this
report. We are the responsible party;
otherwise, we will have to take exception to anything put in the report and go
through it. There are exceptions, which
will be made to it. We will be bringing
this back to the Board as well. It is a
whole other issue. From our standpoint,
working from a foundation up, this is the platform upon which these projects
will be built.
Mr. Hanks stated going back a couple of meetings one of my
comments and questions on CH2MHill’s scope of services - the answer was this
was not in the scope of services they were providing.
Mr. Skehan stated we did not have it in there at that
time because the assumption was we were going to be able to use the existing
data available. We learned
Mr. Hanks stated let us move on. Do we have a work authorization number on
this?
Ms. Early stated it is work authorization # 43.
On MOTION by Mr. Hanks seconded by Mr.
Fennell with all in favor work authorization #43 for geotechnical evaluation
for WTP improvements and WWTP Plant F was approved.
B. New
Dual-Zone Monitor Well – Amendment #1
Mr. Fennell stated Work Authorization #26 is effluent
monitoring well and new dual-zone monitoring well, which is your engineering
cost.
Mr. Skehan stated this is our engineering cost. This is also getting all of the data
digitized so it can be recorded into our computer system. We discussed this with staff and Mr.
Hyche. They want to be able to go from
the chart reports they have now. This
automation will assist them on the reporting side with data. It is a significant component.
Mr. Fennell asked where does the data go to?
Mr. Skehan responded the data goes into your operations
room. Your staff will be looking at it
on a monthly basis. There is a monthly
operating report compiled, which is required by the DEP. This data goes to the District.
Mr. Fennell asked do we have a computer, which accepts
this data?
Mr. Skehan responded that is a great question. Part of the answer to this is the software
and programming is not there now. Part
of this authorization will provide it.
As part of the construction component of this for the bid, will have the
requirement for the contractor to provide it.
Mr. Hanks stated it will be a permitting requirement.
Mr. Skehan stated absolutely.
Mr. Hanks asked is it a permitting requirement to go with
digital?