MINUTES OF MEETING

CORAL SPRINGS

IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, January 24, 2000, at 4:00 P.M. in the District Offices, 10300 N. W. 11 Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Robert Fennell President

Clinton Churchill Secretary

Karl Miller Supervisor

Also present were:

Gary L. Moyer Superintendent

Rhonda Archer District Staff

Roger Moore District Staff

Donna Holiday Recording Secretary

Dennis Lyles Attorney

John McKune Gee & Jenson

FIRST ORDER OF BUSINESS Roll Call

Mr. Fennell called the meeting to order at 4:05 P.M. with roll call and stated the record will reflect that all Supervisors are present.

SECOND ORDER OF BUSINESS Approval of Minutes of the November 15, 1999 Meeting

Mr. Fennell stated the second order of business is approval of the Minutes of November 15, 1999 meeting which you had previously received. Are there any comments or corrections?

On MOTION by Mr. Churchill seconded by Mr. Fennell with all in favor the Minutes of the November 15, 1999 meeting were approved.

THIRD ORDER OF BUSINESS Ratification of Permits

A. Lakeview West

Mr. Fennell stated the third item is the ratification of permits. The first one is Lakeview West.

Mr. Moyer stated Lakeview West is a development by Lennar and they are developing this land on the west side of Lakeview Drive between Atlantic Boulevard and the Eagle Trace clubhouse. It is adjacent to the Conservation Area. It is between the Sawgrass Expressway and Lakeview Drive, just north of Atlantic Boulevard. The request is that they be permitted to plant the west canal bank adjacent to the Expressway to buffer the sight and sound of the Expressway. You are familiar with the same type of request that was made by the Eagle Trace Homeowners Association for the portion lying north of this property for the District to maintain. We made it clear in this permit that we did issue administratively, and that is why we are asking for ratification, that they are solely responsible for the maintenance of that landscaping, irrigation and any appurtenances that are associated with the permit.

Mr. Fennell asked is that in the booklet?

Mr. Moyer replied the permit is in there and the Engineer's letter identifying certain issues that were made a part of the permit is also included.

Mr. Churchill asked does that responsibility pass on to successors too?

Mr. Moyer replied this permit runs with the land.

Mr. Churchill asked if it develops and is passed on, do they also hold us fault-free on maintenance?

Mr. Moyer responded you bring up a very good point that Mr. Lyles can review for us and that is whether this should be recorded in the Public Records with a legal description of the project so it is clear to any successor owners.

Mr. Churchill stated that is what we are dealing with on Eagle Trace because now we have successors involved in it that are trying to keep us involved.

Mr. Moyer stated that is correct.

Mr. Lyles stated I think we should revise it, attach the project description and have it recorded. That is a good idea.

Mr. Fennell asked do we need an amendment to this then?

Mr. Moyer replied you can approve it and direct Staff to take the necessary actions to record it in the Public Records.

Mr. Fennell stated the motion is to make sure that a right of succession and a County record of this is made.

On MOTION by Mr. Churchill seconded by Mr. Fennell with all in favor District Staff is directed to record the amended permit document to include right of succession in the Public Records of Broward County, Florida.

Mr. Fennell stated this is amended to have Staff prepare the proper words. Are there any further questions?

On MOTION by Mr. Miller seconded by Mr. Churchill with all in favor the modified Permit for Lakeview West was approved.

B. Venetian Isles Recreation Center

Mr. Moyer stated the next permit is for Venetian Isles Recreation Center. This is the tennis court complex on Lakeview Drive in Eagle Trace. This is an expansion of that and this is a surface water management permit which was reviewed by the District Engineers and found to be in compliance with our permitting criteria. This is for 1.8 acres of a recreational parcel. We would recommend approval of that. I have a map for your review.

Mr. Fennell asked what is it that they are doing? Are they putting in an addition?

Mr. Moyer replied it appears that way.

Mr. Fennell asked are they putting in four new tennis courts and a parking lot?

Mr. Moyer replied yes.

Mr. Fennell asked are any issues with that?

Mr. Moyer replied no. It is a standard drainage permit.

On MOTION by Mr. Miller seconded by Mr. Churchill with all in favor the Permit for Venetian Isles Recreation Center was approved.

FOURTH ORDER OF BUSINESS Approval to Schedule Final Hearing to Adopt Proposed Water and Sewer Utility Manual and Changes to Meter Deposit Policy

Mr. Fennell stated item four is Approval to Schedule Final Hearing to Adopt Proposed Water and Sewer Utility Manual and Changes to Meter Deposit Policy.

Mr. Moyer stated this is an issue from time to time that Staff wrestles with and Ms. Archer will make a brief presentation to you. It primarily deals with utility deposits.

Ms. Archer stated that is correct and then I also pointed out in my cover letter to the Board that this Utility Manual is a result of the Board instructing us to put all of our Resolutions as amended into one condensed manual. We worked on that, brought it back to you several times and then it faded away. When we were holding a public hearing to approve that, we did get auditor's comments on it, General Counsel's comments on it and while I was researching the deposit policy, I saw that we never took the final manual to public hearing so I thought we would clean it up all at the same time.

Mr. Moyer asked do you want to talk about deposits?

Ms. Archer stated I received a letter from a resident who had been a resident of the District for twenty years and he moved and in accordance with our policy, we refunded his deposit less his final bill and then we asked him for a bigger deposit for his new house because twenty years later our deposits have gone up and he was a little upset about that and sent us a note in the mail explaining that he has been a resident for twenty years, a good paying customer and he shouldn't have to post a deposit after all of this time. He is upset that we don't pay interest on those deposits and we have had this issue come up from time to time on some of our other Districts. What I recommended and what we did in those other Districts was to revise that policy with regard to interest and refunded those deposits after a period of time of good payment and that is what we are recommending to the Board that we do.

Mr. Fennell asked what is the time period?

Ms. Archer replied it was good payment for eighteen months.

Mr. Churchill stated I think I also read that you are going to talk about interest-bearing for that eighteen months. In real estate, that is one of the questions on the exam. I don't know whether that is a legal issue or not.

Ms. Archer stated right now we don't pay any interest on those deposits and we are recommending that we do. It is something that the computer will automatically handle for us. It is not going to be a difficult thing to do. There has been case law that indicates that we should be doing that. That is our recommendation.

Mr. Moyer stated heretofore our justification was that since this is a public utility, not investor owned, any money we make on those deposits go back into the system as rate stabilization. It ends up in the rate one way or the other anyway so if we paid the two percent, our rates would have to reflect that. There would be less income in your budget by two percent because we would be paying that as interest, so generally it is a zero impact to the District and that is how we get away without paying interest. It is something that has always been a hot item with not a lot of our residents but it is something that we address in various forms around the State from time to time. Ms. Archer's purpose today is not for you to take action; we are looking for the Board to say to go ahead with a public hearing on this next month so that we can notice it.

Ms. Archer stated that is correct.

Mr. Moyer stated under our enabling legislation we need to notice it as a public hearing in a newspaper ten days before you take action on it.

Mr. Fennell asked are there any further questions?

On MOTION by Mr. Churchill seconded by Mr. Miller with all in favor Staff was authorized to advertise for a public hearing at the February Board Meeting.

Ms. Archer stated I also told this resident that he could hold off on paying his deposit until the Board considered his request.

Mr. Fennell asked what is the current deposit now?

Ms. Archer replied we asked him for $120. We usually request the amount of a two-month water bill for a deposit.

Mr. Moyer stated the idea of that is under our shut-off policy, you could go two months before we would shut off the water. If somebody were here, didn't pay the bill and abandoned the property and took off, he could run up a bill of $120.

Mr. Fennell asked if that happens, what is our recourse if we are going to give them a period of eighteen months and then return the deposit?

Mr. Moyer replied you write it off.

Ms. Archer stated we have a budget item every year for uncollectible accounts receivable.

Mr. Churchill asked what is the provision in the manual to lien the property?

Ms. Archer stated I don't believe we can lien property legally under our Statute.

Mr. Moyer stated you may say that but again you are treading on an area of legality that is very questionable.

Ms. Archer stated I think the manual says it is an automatic lien on the property once the bill is rendered but we can't go out and record it in the records of Broward County. We do have the authority to discontinue service for nonpayment.

Mr. Fennell stated that occasionally gets us into issues. Somebody buys property, there is nonpayment and a big bill has been run up. They have gone to the courthouse and they thought they had gotten all of the bills and they hadn't.

Ms. Archer stated they don't find out from the courthouse; they find out when they come here to initiate water service that there may be $100 or $200 in outstanding bills and we collect the money before we reinstate service. Our act does say we can do that. Mr. Lyles and I were talking to some attorney for some man a few months back who was giving us a hard time telling us we couldn't do that.

Mr. Lyles stated it was a bank attorney.

Ms. Archer stated the bank had foreclosed on it and they said they foreclosed the lien and we can't withhold service. We said it says in our act in black and white that we can withhold service for nonpayment.

Mr. Lyles stated it is a good news, bad news situation. My recollection is cities and counties automatically have the lien that you are talking about for water service. It arises as soon as the service is rendered and by operation of law, the cities don't have to prepare a lien document and have it recorded to perfect it; it arises by law, however, they are not allowed to terminate or withhold service to subsequent purchasers for nonpayment of that past-due water bill. We do not have the automatic lien, however, but we have the right to require the subsequent purchaser of the property, in this case the foreclosing bank on the property, to pay it before we turn the water back on. We have a disadvantage in one way, we have an advantage in another way and it probably balances out.

Mr. Fennell asked is there any way if somebody checks the County records to put a note which says to check with us. That is usually the problem that they don't check with us.

Ms. Archer stated we have recorded that document in the public records for every District that says we are a Special District.

Mr. Moyer stated we have not for our Special Act Districts.

Ms. Archer asked only for the CDD's?

Mr. Moyer stated only CDD's are required to do that.

Ms. Archer stated maybe we should do the same thing as we did for CDD's that has the legal description of the District so that they would be on notice that if they are buying a house within this District, they should contact us for a number of things: water and sewer, and special assessments.

Mr. Fennell stated if we can do that, it will be something on record so that if somebody checks the County Records, they will know there is some place else to check beyond that and it might prevent a lot of problems. We usually get in a hassle with somebody who bought an apartment building that has several thousand dollars in back debts and doesn't want to pay off.

Mr. Lyles stated Community Development Districts under Chapter 190 as of this past year now have a requirement that they do something called a Notice of Establishment of a Community Development District either within ninety days of the establishment of the District, or if you are already up and running prior to 1999, within ninety days of the effective date of the act. What we could do is a similar type of notice because it contains a legal description. It tells you be aware, there is a District involved and instead of reciting Chapter 190 for the powers and the authority of the District, we could recite our Special Act. It would put people on notice that there is somebody they might want to check and since most of the work is done by real estate paralegals and clerks anyhow, they just have a program and if they see any reference to a District, they call and ask if there is any balance. It might cut off some problems for real estate transactions.

Mr. Fennell stated I think it is important that we do something like that because you know that in the past we have run into some significant issues with people suing us and counter-suits. It is one of the real reasons we have decided to revise this policy but if we revise the policy and people still don't know that they should be checking with us, we won't make much progress. I think you understand what we want to be able to do. If somebody goes through the County records, they need to be flagged that they have to call here to get all of the records.

Mr. Lyles stated I will try to prepare the form of something like that that will work and instead of going ahead and filing it, I will bring it to the next meeting and let you have a quick look at it to see if it suits everybody's intent and if it is okay, we can record it for the whole District at one time.

Mr. Fennell stated my intent is if somebody checks the records, this is going to pop up. Will that happen?

Mr. Lyles replied it should. It almost certainly will but there will probably be occasions where it doesn't for one reason or another, If somebody is just not careful or doesn't recognize it when they see it, but the way the records pop us is based on the legal description and if we have the whole District covered with the legal, then it should pop up for every property within the District.

Mr. Moyer stated I am sure Mr. Lyles will draft it in a fashion that makes it clear that there are these various authorities that levy taxes, levy assessments, rates, fees, charges, and discontinue service for nonpayment. I think it can be fairly inclusive of all of the things involved.

Mr. Fennell stated if this works, obviously it is something that should be spread to other Districts too which I assume run into similar problems.

Mr. Moyer stated we have been very lucky in the twenty-five years of the development of the CSID in that we haven't gotten crosswise with a lot of people on these types of issues. You are right that there are one or two.

Mr. Fennell stated usually they are significant where somebody has bought a large of tract of land and there are payments due from five or ten years ago and they say they won't pay us. In one case they were challenging our whole reason for being.

Mr. Moyer stated we will bring that back to you.

Mr. Fennell stated before we move to Staff Reports, I have an item which is that I have a conflict for the next meeting which is February 21 which is also Presidents' Day.

Ms. Holiday stated we do not get that holiday any longer. We get Martin Luther King day instead.

Mr. Fennell stated I can't make it on that date.

Mr. Miller asked do you want to do it the week after that?

Mr. Fennell replied we could do it the week after that.

Ms. Holiday asked what is that date?

Mr. Moyer replied the 28th.

Mr. Lyles stated I have a conflict.

Mr. Churchill asked how about a week earlier?

Mr. Moyer asked is the 14th okay?

Mr. Fennell replied yes. The only problem is that it is only two or three weeks from now.

Mr. Lyles stated the 14th is okay for me.

Mr. Fennell stated we are agreed that the next meeting will be on February 14th.

FIFTH ORDER OF BUSINESS Staff Reports

A. Attorney

Mr. Lyles stated I don't have anything new to report this month but it sounds as if I will be talking for awhile at the next meeting when I bring these items back. There are no new legal developments this month.

Mr. Fennell asked did you hear anything from the people concerning the berm?

Mr. Lyles replied the final outcome of that was Ms. Archer sent a letter to them enclosing an excerpt from the homeowners documents, as I recall, that makes it their responsibility saying if you have anything different from this, please call it to our attention so that we can review it and we haven't heard anything from them as far as I know. Has there been any change in that?

Ms. Archer replied no. We showed them in their homeowners documents that it was their responsibility to maintain that.

Mr. Moyer stated we suspected that but couldn't find the documentation but with a little bit of help, we found the documentation.

Mr. Lyles stated the letter went out on January 4th and they haven't told us anything to the contrary so we are assuming we have heard the last of that.

Mr. Moyer stated under Attorney's Report, Mr. Lyles and I can do a brief duet about the legislation. There has been a bill filed and after a lot of meetings, after some lobbying, the proposed bill that will go before the Delegation on February 1st is very similar to what this Board talked about two months ago in terms of not having a lot of impact in terms of turning powers and authority over to the cities but rather addressing how Supervisors are elected, the intent being they would be elected by the general populace in general elections and that we post notices in City Hall of when we are going to have our meetings which we already do, so that is not an issue. There is really not a lot in the bill that is different than this Board indicated they would support if it came out in that fashion. Mr. Lyles, do you want to get more specific?

Mr. Lyles stated I have a slightly different take on it because I don't think the Board ever said they were in support of it. My understanding of the Board's position was as long as it wasn't onerous in terms of your operating procedures and didn't attempt to terminate the District and turn all of the District's assets over to some other government entity, and it merely went to the method of election which would be by popular vote of the electors as opposed to a landowners election, and the timing of the elections which would be with the City Commission elections as opposed to November, so that was switched to March. It was those kinds of changes, that you would not want to vigorously oppose it, but you would want to have no bill, to allow you to continue to operate in the way that you have and using the sort of controls and policies that you have adopted always within the framework of the State Statutes and State auditing and Department of Community Affairs and other sorts of requirements that have all of our financial records, all of our dealings carefully filed with and monitored by the State, by City Hall, by all kinds of people, so that bill has been cut back to fit within the four corners of what you said you wouldn't vigorously oppose but your preference, as I understood it, was to have no bill because as I think we discussed once before, once this starts, where do you draw the line? Do they come back and say they need a little bit more of your authority taken away in following years and I think that the other people who represent Special Districts in this county envision that as the ultimate potential game plan for this one legislator. With that in mind I think other Districts are going to vigorously oppose this bill but because of the position that you have articulated in the past, having no problem with popular election of Board members, we are not going to vigorously oppose the bill.

Mr. Miller asked is that the only relevant change?

Mr. Lyles replied timing of elections.

Mr. Miller asked would we finish out the balance of our term which would be 2003?

Mr. Lyles replied yes, I believe so.

Mr. Fennell stated the only other issue I saw just because I was looking at the City Commission aspect is I was surprised that to run for the City Commission, you have to put down roughly $900 because you have to help pay for the election which is about $600 for one fee and another $150 for another fee, which at that point is an issue. I think part of it is State Law and part of it is City Law. Part of that is an issue in that a job that is $200 a month, I don't know that you can afford to make it very expensive for anybody to run for the seat.

Mr. Miller stated I believe you have to put down five percent.

Mr. Moyer stated I think they lowered it this last session of the Legislature to one and a half percent.

Mr. Lyles stated I don't remember the percentage but it is a sliding scale based on what the pay is for the elective office that you hold. It should be less for this District than for City elections.

Mr. Fennell stated the only other thing from a philosophical standpoint is that I think it is good that we have three people here from this District. In the City though, people are elected at large. There are five Commissioners. The actual degree of real representation is going to go down. I think the philosophy is to be more representative somehow. I am not sure that is going to happen.

Mr. Lyles stated I don't think either of us is prepared to answer if that is the correct philosophy behind this bill.

Mr. Moyer stated I will go out on a limb and say I think the rub by people that run for election, Representatives, Senators, City Commissioners have always viewed landowner elections with a little bit of disdain. They think everybody should go through the process that they had to go through to get elected so they think that doing it in a ballot format during a General Election encourages more people to participate in the process than through landowners elections.

Mr. Fennell stated we are having difficulty in Coral Springs even getting people to run for City Commission. I don't think anybody is running opposed. That is an issue. I was surprised at that. Even so, I was surprised to find out that there is still a Drainage District. I found out that in the City of Coral Springs who also operates the sewer and water system that apparently there is a Drainage District which still has a separate group.

Mr. Moyer stated that is Sunshine Water Control District. They just handle drainage. The City has no great desire to get into the drainage business. They wrote a letter to The Government Efficiency Committee which Ms. Archer and I just saw today. The tenor of the letter is, "You know, water and sewer looks sort of good to us. We might want to think about the water and sewer but we really don't want to do anything with drainage."

Mr. Fennell stated I don't think there is any money there. The other issue I saw as far as Coral Springs goes is that it is about a thirteen million dollar a year business to them. They pay out seven to eight million dollars to Fort Lauderdale to take the sewage and it looks like there is an amount of a couple of million dollars that they are claiming above and beyond that which doesn't go back. It looks to me as if they could probably cut the rates if they wanted to but they are using the money.

Mr. Moyer stated when you look at their budget, as Ms. Archer said, they have unallocated overhead. The Utility Department does pay money for the City Clerk, the City Manager and a lot of other things which keeps the millage lower because you are not doing it through millage, you are doing it on the rates that you charge on utility customers which is fairly standard for governments that operate utilities. That is the update on the bill. Mr. Lyles' clarification on our position is appropriate. We are not supporting it but we are not going to vigorously oppose it.

Mr. Lyles stated the hearing will be completed by the time you have your next meeting so I will have some firm information for you. This only really requires the Legislative Delegation in the County to approve it. It is a rubber stamp in Tallahassee.

Mr. Fennell stated going along with that, we were talking about doing some look-ahead as far as our rate schedule goes. I was wondering how that was going.

Mr. Moyer stated we talked about bringing that back in February or March. Given our capital projects requirements, the funding for that and our current rate structure, what could we reduce our rates by?

Ms. Archer stated part of taking that into consideration is if we decide to do away with these deposits and we don't have that revenue source coming into the system any longer, it will affect how much we can reduce our rates. We will be examining that position.

Mr. Churchill stated I think it will be substantial. I remember reading a statistic somewhere that the average home in Coral Springs sold every three years so you are talking about a big turnover of deposits which is a large sum of money.

Ms. Archer stated there is a lot of money in customer deposits.

Mr. Moyer stated if you have ten thousand accounts and each one has one hundred dollars in it, you are looking at about a million dollars.

Mr. Fennell stated we are looking for at least a preliminary proposal next month, what you are seeing and how you got there. We already saw one sheet last month.

Ms. Archer stated Gee & Jenson does our rate analysis for us. They have a model that they have been using since the beginning.

Mr. Moyer stated I think what Mr. Fennell and the Board are looking for more than anything is rather than spending a lot of money on coming up to the second decimal point, maybe just the back of the envelope type of an analysis. We have this much debt to pay and we have this much O & M cost and we are currently making this kind of money and that delta as a percent of the total, if we just run the system at break-even, would be an amount.

Mr. Fennell stated last month we had looked at forward construction projects. There is another alternative to this too and we can discuss this. As opposed to a pure rate cut, the other thing that we can do is what some mutual life insurances do and that is at the end of every year declare that there is a surplus and give a rate reduction at the end of the year and not necessarily be bound every year to tie it to a particular rate reduction.

Ms. Archer asked are you talking about a rate reduction?

Mr. Miller responded no, at the end of the year, like a rebate.

Ms. Archer stated that would be a nightmare.

Mr. Churchill stated it also removes the incentive for economies too. You end up with a mindset that says we have to spend this. Oh my God, we only have a month to go. If we don't spend it, we will have to give it back.

Mr. Miller stated if we lower the rates and we find that the said proposed improvements are going to be more expensive than we contemplated, we will be in the position of having lowered them and two years later raising them again.

Mr. Fennell stated that might be difficult but on the other hand, at least we would have lowered them for two years. What is the worst that can happen, that we will have a new group of Supervisors? What we are looking for next month is what the basis of that is going to be.

Mr. Miller asked I don't know if this is what is being considered but is there any way to increase the conservation charge for use of excess water? I know you have a base charge and then it gets more expensive. Is there any way to increase that and yet overall drop the rates?

Mr. Moyer stated the way we currently have our conservation rates set up is we assume everybody uses 9,800 gallons of water on average for a single family house. We said we will give everybody twenty-five percent grace on top of that so our conservation structure goes into effect when you get to 12,500 gallons of use and then it increases based upon a formula that represents the additional capacity that those people are using as it relates to that single family home, so if you are using 20,000 gallons and you are only supposed to be using 10,000 gallons, then under our conservation pricing scheme, they should be paying twice what the single family home is paying for that same amount. That is in theory how the penalty structure works but to answer your question, yes, we can lower the base rate from 12,500 but keep the conservation rate above the 12,500 at a fairly stiff level. What we have found, and the reason the system currently generates a million dollars plus or minus in surplus a year, is when we first instituted that system, we were running the system at break-even. If you go back and look, we were literally bringing this in almost to the nickel every year, revenues equal expenses. When we renewed our Consumptive Use Permit, South Florida Water Management District came to us and said you have to come up with this conservation policy so that is when we came up with this pricing. I think that unless it is significant, it has no effect in terms of usage. We generated a surplus because people continued to use exactly the same amount of water but paid the little bit extra. The penalty in the whole scheme of things is a little bit extra so instead of being a bill of $45 for 10,000 gallons and they used a lot more than that and had to pay $75, it never shows up on their radar screen. "It's okay, we will pay $75." If they had to pay $125 or $130 for that, it might have been different where people would have said I don't want to pay that anymore and we would have made a statement but it wasn't that dramatic and therefore people continued with approximately the same consumption habits just paying more for it and that resulted in a very good rate base for the District.

Mr. Miller asked how feasible is it to make it a bit more dramatic?

Mr. Moyer replied I think you are justified in doing it. Water is a resource and it is something that we ought to be conserving and I don't see how anybody is going to criticize you for doing that as long as you lower the rates on your base consumption. That is a politically acceptable position for the Board to take.

Mr. Miller asked how hard would that be to do?

Mr. Moyer replied it is easy.

Mr. Miller asked annually? Is this something we would be voting on next month?

Mr. Moyer replied not next month. We will come back with the information.

Ms. Archer stated you will see more residents in your Board meetings.

Mr. Fennell stated I think one thing you want to look at is what happened before is that this utility curve for water didn't change. We were trying to instruct people on how to use less water and it didn't work. They used more water and we got more money. I think what you want to go after is how we can conserve water, what actions we could take that would do that. Raising charges didn't do that.

Mr. Miller stated you are saying they weren't raised significantly enough to be noticed.

Mr. Fennell stated meanwhile what we want to think about is cutting the charges.

Mr. Miller stated cutting the base rate.

Mr. Fennell stated cutting the base rate probably won't increase water usage either. Other than changing rates, maybe there is some other action we should be taking to figure that out.

Mr. Miller asked are we going to have to vote on the rates?

Mr. Moyer replied yes.

Mr. Miller asked could we possibly get three alternatives to select from that will get us to the same place?

Ms. Archer replied we can bring you three options.

Mr. Fennell stated if you are really interested in conservation, the question is how to motivate that.

Mr. Miller stated if you tell people to conserve, they will.

Mr. Fennell stated maybe there is something else we can do.

Mr. Churchill stated the electric company provides surveys. Maybe it is something we can consider. We just had a plumber come out and look at our place to see where we might save some water. They found some things. With water, just a drip is a huge loss so maybe that is something we should consider. You don't need a professional plumber. You might have a service like that available that says if you want your house looked at, maybe we can tell you how you can save.

Mr. Miller asked who would pay for that?

Mr. Churchill replied that would be part of the District.

Mr. Fennell stated it might be better to spend $50,000 and we could serve more water that way.

Mr. Churchill stated before you could consider something like that, as I listen to the discussion, I am hearing it based on individual homeowners if they practice conservation, they are going to have a lower bill. How does that work with condos? I am thinking of a condo that has two segments in it. One side has ten buildings each with four residences and each building has a meter so there are four families on each meter. The other side has thirty-four families on one meter. Where is the base on that?

Mr. Moyer replied many condos contact us and ask if they are permitted to re-meter. Under our general law, they are not permitted to make a profit on it but in many cases they do re-meter so that all thirty-four of those residents know how much water they use. They take the bill and divide it by whatever their pro rata consumption is on the meter and that is how they pay the utility bill.

Mr. Churchill asked where is the benefit to condo owners? In any case their minimum is going to be over the 9,800 gallons.

Ms. Archer stated no. If there are forty units in the building, they get forty times 9,800. Their average consumption is actually around 5,600 gallons so they get forty times 5,600.

Mr. Fennell stated that is a good issue. Even if we change the rates, since the condo is paying for it, one person may not have any incentive to fix a toilet that is leaking.

Ms. Archer stated if they are re-metering on their side, there is an incentive for them to get after the people who are using more than their fair share of the water.

Mr. Miller stated back to economics, I think if you raise the conservation rate five hundred percent, you would probably get most of the people to keep their usage down dramatically. I am saying if you raise it zero percent, it would have no effect so I am saying there has to be some sliding scale where if you raise it fifty percent, it might have some effect but not be too draconian a change.

Mr. Churchill stated there is a fine line between conservation and punitive.

Mr. Moyer stated we will bring something back to you.

Mr. Fennell stated the other thing I would like to have for the next month is a comparison of our average rate compared with the City of Coral Springs and Tamarac. I saw one in the Coral Springs budget digest for the Utilities Department. I am looking for an apples to apples comparison of what our rates are, Coral Springs rates are and Tamarac rates.

Mr. Churchill asked how about rates and usage?

Mr. Fennell stated yes, rates and usage both. If you have any other breakdowns that can help us understand it, that would be helpful because I don't understand how much is a single residence and how much is business or townhouses and condominiums. If we are talking about twenty-five percent for condominiums, maybe there is an issue there.

Mr. Miller asked when was the last time the rates were changed?

Ms. Archer replied it has been about ten years.

Mr. Miller asked off the top of your head, what percentage of the people exceed the 12,500? Will you check if it is possible to discern that?

Mr. Fennell stated as we talk about this, it is going to become a two-step thing. Step one is, what kind of money could we return? Secondly, if we do that, how are we going to return it? Who should get what benefits and for what reasons? Should it be equal across the board? Should it be bent even more towards water conservation? Is there a possibility that we would actually go negative, that by lowering the rates, we increase water usage?

Mr. Miller stated there is a lot to think about.

Mr. Fennell stated it is important that we do it. I express once again my philosophy and that is that our business here is to provide the best utility we can at the best rate we can. We have been concentrating on getting the plant in shape and now we have to go back and look at the best rate and return the money to the people. Next is the Engineer's report.

B. Engineer

1. Monthly Water & Sewer Charts

2. Update on Construction

3. Y2K Compliance

Mr. McKune stated item B-2, the Update on Construction. We are currently in a hiatus. There is not a lot of activity. At the next meeting we will give you a schedule for the bidding and construction of the water plant modifications to the high service pump building and also the first phase of the wastewater which will probably be the addition of Plant "E" since that seems to be the most critical item now as Mr. Moyer and I have discussed recently.

Mr. Fennell asked do we have a decision there to make or not? At one time, we were deciding we were going to put in some new tanks and then we said with the surge tank in, we weren't so sure. I don't think we have concluded that.

Mr. Moyer stated we can discuss that next month as well. We did have some interim discussion about that, about how we could retrofit Plants "A" and "B" to get additional capacity and I think the general consensus from the Board was that it would still be better if we had the fifth plant. We can review all of that with you next month.

Mr. McKune stated yes we can. We will proceed with the fifth plant with the retrofitting of the two existing plants "A" and "B" which is critical, not because we want to get additional capacity from them but we simply need to refurbish them.

Mr. Fennell stated our issue previously was that we couldn't take those things off-line to do that without building a new facility.

Mr. McKune stated that is correct. That is why we would build this Plant "E" prior to doing any refurbishment so there would be no outage.

Item 3-B, the Y2K Compliance, it has come and gone. In your agenda package are three letters that were received by the District from various vendors including the electrical consultant wherein they say all of the facilities are in compliance with the Y2K requirements. They are forecasting that there should not be a problem.

Mr. Churchill stated I have two comments. I really liked Mr. Gonzalez's letter and secondly I notice you did not include these until after the first of the year. One thing on Mr. Gonzalez's letter that we might discuss is he said that we have some lift stations that don't have emergency connections. Should we have emergency connections on lift stations?

Mr. Moyer replied our staff should be complimented. Our field personnel manage our lift stations and what would happen if we lost power. That would be the problem if we lost power. On the emergency connections, there are two ways of doing that. One is by generator where you have a generator and you take it from station to station. The older parts of our system were not outfitted with generator connections but what we do have are gasoline driven three-inch pumps and we have a lot of them. That is better than having one big generator to have a lot of the three-inch pumps. They are not little; they are on wheels and you pull them behind a truck. That is how that would have been handled and in addition we have some other backup pumps located so that if we needed to make that call, we could have made that call.

Mr. Churchill stated we were not vulnerable.

Mr. Moyer stated we were not vulnerable.

Mr. Fennell asked are the computers installed?

Mr. McKune replied yes.

Mr. Churchill stated I would like to say well done on the Y2K matter, not only the preparation but what you did during the event.

Mr. Fennell asked was there any problem in accounting through Y2K after the initial issues that you solved?

Ms. Archer replied no.

Mr. McKune stated I have two other items. If you recall, in June of last year, we prepared and submitted to the EPA a rather lengthy document called the "Process Safety and Risk Management Program". The need for this was dictated by EPA because we store a toxic substance on site that is in excess of their threshold limits which is chlorine. We have chlorine stored out here in one ton cylinders. The deadline for submittal of that document was June 21st. We did submit by then. It was submitted electronically to EPA. Subsequent to that date, the FBI decided that there are portions of that report, our report and reports of every other water system in the United States, that if it were to fall into the wrong hands may constitute a security problem. Consequently, they have passed another law which disallows the distribution of electronic contents of those reports but the law also requires that each utility have a public meeting wherein they discuss and summarize the contents of this report. That makes them rather at odds but those are the requirements of the law. This summary must be made prior to February 1st of this year. After that, we have until June 5th of this year to submit a certification to the FBI that we in fact held this meeting and provided a summary at a public meeting. What I would like to do is read into the record the summary of this document.

Mr. Fennell stated please read it into the record.

Mr. McKune read the following:

The CSID utility site is approximately 26.35 acres and is centrally located in the community. Both the water and wastewater treatment facilities use chlorine gas in their processes. The water plant for disinfection and the wastewater facility primarily for odor control. The chlorination systems are separate from one another.

The water plant has a dedicated chemical building on site. The chlorine gas is stored on site in eight one-ton containers. The wastewater plant also has a dedicated storage area where one ton container is stored. The maximum chlorine inventory at the site is 18,000 lbs. The following characteristics of the CSID utility site require development and implementation of a Risk Management Program (RMP):

• The facility is a stationary source; and

• The facility handles, uses and stores a toxic substance i.e. chlorine gas; and

• The handling, use and storage of chlorine meet the definition of a "process"; and

• The chlorine is present in quantities above the threshold limits i.e. 1,500 lbs for chlorine gas.

The water plant is considered by the regulation to be a Program Level 3 which is the highest level program and requires the most extensive Risk Management Plan. The criteria for Program Level 3 are:

• That there are public receptors to residents within the distance to the endpoint for a worst-case scenario release; and

• The process is subject to OSHA standards since the chemical use type and flow exceed the threshold quantities in the regulations.

The Level 3 Risk Management Program is basically comprised of three sections:

• The Hazard Assessment, which is also known as the off-site consequence analysis; the Prevention Program and the Emergency Response Plan.

The Hazard Assessment for a toxic gas involves modeling the consequences of at least two release scenarios, the worst-case and an alternative case. The worst-case scenario involves the largest container of the substance being released into the environment over the period of ten minutes. The EPA's air model was used and simulated this worst-case scenario. The model uses input data to generate a distance from the point of release to the toxic endpoint. The toxic endpoint is defined for chlorine gas as the point where the concentration of chlorine gas in the air is 0.0087mg/L which is a very low amount. For the worst-case scenario the release rate was 110 lbs/minute and the results of the distance to the toxic endpoint was 0.9 miles, being the distance from the chemical building. The toxic endpoint is that point where you would smell the gas, it would burn your eyes, you would cough because of the irritation to your throat. You would definitely notice the release.

The alternative case release scenario is one that is more likely to occur than the worst-case but does have off-site consequences. Here two alternative case release scenarios were considered and both resulted in the distance to the toxic endpoint of 0.1 miles or approximately 528 feet which is barely off the plant property line.

The second section of the Risk Management Program is the Prevention Program. This section is the heart of the Risk Management Program and accounts for a large portion of that total document. The Prevention Program includes detailed information and discussion regarding the management system at the facility, five-year accident history, process safety information review, process hazard analysis, procedures for operation, training, maintenance, management of change, compliance audit, incident investigation, employee participation, and what they term "hot work". The Prevention Program provides documented guidance to facility staff regarding day to day operations regarding chlorine storage, handling and use. The Prevention Program is intended to educate staff and thereby reduce the probability of release due to improper operations, inadequate maintenance, ignorance of the hazards, or lack of safety awareness.

The CSID water and wastewater systems have employed chlorine gas as a disinfectant and odor control agent since 1972. There have been no uncontrolled releases of chlorine gas which caused injury or death to either on-site or off-site persons. The chlorination systems which use chlorine gas at the facility are vacuum operated. The system employs active mitigation devices which include vacuum induced gas withdrawal, fail-close valves, secondary check valves, isolation valves, sensors for high and low vacuum chlorine gas which are connected to an alarm system. There are pressure relief valves, ventilation systems and automatic container switchover system via vacuum regulators. These active mitigation devices have attributed to the successful and safe operation of the system since startup. The existing system is capable of continuing to provide the safe utilization of chlorine gas as a disinfectant and odor control agent. Improvements to the facility will include continued maintenance of the existing system and investigation into new technologies as they are developed.

The third component of the Risk Management Program is the Emergency Response Plan. This plan documents the activities to be performed in the event of an uncontrolled release of chlorine gas into the environment. The plan provides detailed how-to information regarding movement, notification, personnel accountability, site control, release remediation, first aid, personal protective equipment, and coordination with professional emergency responders. The facility staff is primarily responsible for protection of on-site persons and notification of outside organizations which will take steps to provide protection for off-site persons. The City of Coral Springs Emergency Response Coordinator and the Broward County Emergency Management Division will coordinate off-site activities and release remediation once contacted by the 9-1-1 dispatcher.

That is the summary of that plan. I will be more than happy to go into it on any detail that you would like.

Mr. Fennell stated the fact that the FBI was asking these questions probably brings up one other issue for me. All of the other things that you talked about were aimed at the normal operation but I think one issue might be an issue of sabotage and access.

Mr. McKune stated it is.

Mr. Fennell asked how do we stand there? Are there things that we should be doing, a bigger fence or something else? Obviously if they didn't want this to go over the Internet they had something in mind.

Mr. Churchill stated what you are asking is whether we have adequate protection now.

Mr. Fennell stated yes.

Mr. Moyer stated we keep people out much better now than several years ago. We spent a fair amount of money securing the plant site but does that mean that somebody could get in here if they wanted to? Absolutely.

Mr. Churchill asked is chlorine flammable?

Mr. McKune replied no.

Mr. Churchill stated I didn't think chlorine was flammable which makes a worst-case scenario.

Mr. McKune stated the FBI is more concerned with the larger storage facilities. Some larger water plants who store chlorine get it delivered to them in rail cars, fifty-ton rail cars. The City of West Palm Beach has fifty tons of chlorine sitting on a siding. That would be much more of a problem than our one-ton cylinder.

Mr. Fennell stated I think it would be wise to look at it again. Is there a fence around this? Is it just access to workers?

Mr. McKune replied it is an open air facility by design. It is what the Health Department prefers. There is an option. There is something new on the market and Mr. Moyer hasn't even seen it. It is similar to a decompression chamber that you put a diver in. You put these ton cylinders inside this chamber and then hook up and use it and if there is a break in the tank, it is contained within this chamber. That is something that I can give you some cost estimates on.

Mr. Churchill asked does only the tank that you are using go in there or all of them?

Mr. McKune replied just the one. If you use two tanks at a time, you would have to have two of these. They are equipped with a hinged front. The tank comes out and they provide its own conveyor that would take it out to the storage area.

Mr. Fennell stated I would like to know how much that costs. The problem is at that point you mentioned 0.9 miles for the worst case and we have people a couple of blocks from here so I think we ought to take a look at that. It sounds as if we have adequate facilities now but if there is a chance of even doing better than that, it might be worthwhile.

Mr. Miller asked how disruptive would it be to make it a lock or a code access for using the chlorine?

Mr. McKune asked at the current facilities?

Mr. Miller replied yes, I mean if you put a fence around it and say you could only get in with a certain code.

Mr. McKune stated that wouldn't be a problem.

Mr. Moyer stated that is not a problem. It is a fairly small area. Where we store the chlorine is half the size of this room. We can put a fence around it.

Mr. Fennell stated I think it would be the smart thing to do. We have to look at making it more secure.

Mr. Miller stated it should be where only a few people know the code to get in but not to make it so difficult to get in that it is effectively left open all of the time.

Mr. Fennell stated I assume there are pipes going to places where they are needed so when you get into this area it is just tanks probably.

Mr. McKune stated that is correct.

Mr. Miller asked do we need to have a motion on that?

Mr. Fennell state I think your motion is we would like to have Staff come back to us with an estimate of cost.

Mr. Churchill asked before we make a motion, what is the criteria for this being safe? Where two kids with wire cutters couldn't get into it overnight or with a dedicated semi-professional who wants to do damage can't get in and do anything overnight? How big a fence do we want? What kind of protection do we want to afford? Is it going to be electrified? Are we taking it that seriously or are we overreacting? Those are all questions to be answered. I don't know where we want to go with this. I don't want to be vulnerable.

Mr. Moyer stated any fence, gate and lock that you have I would envision that somebody who really wants to get in there, could get in there.

Mr. Churchill stated I am still li