MINUTES OF MEETING

CORAL SPRINGS IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held Monday, June 26, 2000 at 4:00 P.M. in the District Office, 10300 N. W. 11 Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Robert Fennell President

Clint Churchill Secretary

Karl Miller Vice President

Also present were:

Gary L. Moyer Manager

Rhonda K. Archer Finance Director

Dennis Lyles Attorney

Donna Holiday Recording Secretary

John McKune Gee & Jenson

Roger Moore Engineer

FIRST ORDER OF BUSINESS Roll Call

Mr. Fennell called the meeting to order at 4:00 p.m. and Mr. Moyer called the roll.

SECOND ORDER OF BUSINESS Approval of the Minutes of the May 15, 2000 Meeting

Mr. Fennell stated each Board member had received a copy of the minutes of the May 15, 2000 meeting and requested any additions, corrections or deletions.

There not being any,

On MOTION by Mr. Miller seconded by Mr. Churchill with all in favor the minutes of the May 15, 2000 meeting were approved as submitted.

THIRD ORDER OF BUSINESS Consideration of Change Order No. 1 for Pump Stations No. 1 and No. 2 for Engine and Pump Replacement

Mr. McKune stated In April we came before you with an estimate from the contractor who is replacing the storm water pumps in Pump Station No. 2. At that time we discovered damage to the 54" steel piping that goes through the concrete wall that separates the South Florida canal system from the District's canal system. The contract put together a quick estimate of what he thought it would take to replace those items and it came out to about $39,000. Since that time we had our structural engineers look at it and the contractor had a consultant look at it also and we found some additional damage in and around the concrete and we have decided to purchase new flap gates for each of the five pumps. Consequently the change order now reflects those current prices from the contractor based upon the details that are provided and that is $62,690. In addition to what you see in the change order in the agenda package, the contractor is requesting an additional 30 days to accomplish this work. We have approved the additional 30 days in the final version of the change order. It is a reasonable request for additional time, however, that should not delay the contractor from installing the first set of pumps. It should occur prior to the heave rains.

Mr. Moore stated we have had two engines delivered Thursday and two will be shipped next week.

Mr. Fennell asked how many of the new pumps have been installed?

Mr. McKune responded under this contract none have been installed.

Mr. Fennell asked what do we have as of today?

Mr. McKune responded we have two that have been replaced under the previous contract with one older pump. The engines are all the existing old engines.

Mr. Fennell stated in Pump Station No. 1 we are going to put in a new pump in the fourth spot and that hasn't been done yet.

Ms. Archer responded that is under the new contract.

Mr. Moyer stated the engine has arrived for that spare. We have the engine but have not installed the pump for the fourth bay for both pump stations.

Mr. Fennell asked what is the status on Pump Station No. 2?

Mr. McKune responded that is where the new assembly will be installed first. We have two new pumps in Pump Station No. 1. The first two on site will go into Pump Station No. 2.

Mr. Moore stated they are being coated with epoxy and we should have them in a few weeks.

Mr. McKune stated the change order items include breaking through that wall and until they actually do the work, we don't know how long it will take. This needs to be done before the pumps are installed.

Mr. Fennell asked how far along is that work?

Mr. McKune responded they have not done any work on the stations but they have started to manufacture the plates.

Mr. Churchill asked is there a possibility that we can't install the new pumps even if they are delivered? I am concerned that we will be further into the hurricane season and not be able to use the old or the new pumps because of the preconstruction work that we are doing.

Mr. McKune stated I don't foresee that being a possibility. They will not all be taken out of service at one time.

Mr. Fennell stated I was hoping we would be done by June but we are now finding more damage. Will the new pumps be impacted by the wall change?

Mr. McKune responded yes.

Mr. Moyer stated we will contact our pump supplier to make sure that we can obtain a hydraulic pump with a 50,000 gallon capacity if we have to. We have done that before.

Mr. Fennell stated the cement work will probably take 30 days and that gets us to the end of July and by the time we get the pumps in it could easily be the end of August. I can think of many hurricanes that have come in the last two weeks of August and the first two weeks of September. You have to do something to expedite this whole thing. We have to have the extra pump on site. I think Pump Station No. 1 is not in bad shape with the new pumps but does it also need the concrete work?

Mr. McKune responded yes. They are all being replaced because they all need to be done but they are not all equally bad.

Mr. Fennell stated if you take them all out of service and fix the concrete at one time we put ourselves in jeopardy. Can it be done one at a time?

Mr. McKune responded yes. They can be done sequentially. The contractor will not save that much time doing them all at once. They are separate installations.

Mr. Fennell stated every time you do one of these it takes one pump out of action. Are these ready to drop in once everything is here and ready to go?

Mr. McKune responded in a perfect world yes, but it will probably take a week to get it in and line it up.

Mr. Miller asked can this be delayed until after the hurricane season?

Mr. McKune responded I would not recommend it. As Mr. Moyer indicated earlier, we can rent a pump if we have to. I don't think we will have a problem installing at least one or two pumps before we are well into the hurricane season.

Mr. Fennell asked who is managing the scheduling?

Mr. McKune responded the scheduling is being done by Farmers Manufacturing with input from Mr. Moore and me.

Mr. Fennell stated Mr. Moyer needs to talk to Farmers Manufacturing. I think they need to get input from a higher level telling them that we are seriously concerned. Someone needs to manage the time frame of all of this and exactly how it all comes together. This is not a casual circumstance. There is a fair amount of jeopardy involved.

Mr. Moyer stated I will do that.

Mr. Fennell stated this has to be tightly managed. When the wall is done, the pump should already be there, everything should be pre-checked out. We can't afford to have a pump down very long.

Mr. Moyer stated I will make sure they understand that.

Mr. Miller asked have you ever had to bring in a replacement pump at a moments notice?

Mr. Moyer responded we have done that. We will make sure that we have a priority status. We have done that in the West Lauderdale District where we had basically the same issue when we were refurbishing a pump and motor during hurricane season and we had a rental pump sitting there on standby.

On MOTION by Mr. Churchill seconded by Mr. Miller with all in favor Change Order No. 2 as outlined above was approved.

FOURTH ORDER OF BUSINESS Questions and Comments on Proposed Budget

Ms. Archer stated we distributed the budget to you last month and the public hearing is scheduled for July. We anticipate assessments going up and most of it is related to having less carry forward surplus.

Mr. Moyer stated when we paid off the bonds we dropped the assessment down to a level that was lower than we normally could expect just in the operation and maintenance of the District.

Ms. Archer stated we did that because we had carry forward surplus funds available to us. We are recommending that we level the assessments at this point by putting aside some reserves annually to anticipate this future renewal and replacement program and keep the assessment level every year.

Mr. Fennell stated right now the assessment is $46.76 and you want to take it up to $63.34.

Mr. Moyer stated when we were amortizing our bonds the assessment was in the mid $80's. You are well under what it used to be but higher than what we have assessed in the last year or two.

Ms. Archer stated I would rather do it all at once and keep it at that level rather than bump it up a little bit each year.

Mr. Fennell asked what can anybody do about this when they get their notice?

Mr. Lyles stated they will receive the TRIM notice at the end of August telling them what last year's taxes and millages were and the proposed levies for the coming year are if they are all adopted in accordance with what the different government agencies have proposed at that point. That is the notice that everyone gets of their millage and assessments.

Ms. Archer stated that is related more to the ad valorem taxes rather than non ad valorem and it has all of the dates, times and places of the public hearings for all of the authorities levying an ad valorem assessment. It is not really related to the non ad valorem because the non ad valorem is not millage.

Mr. Lyles stated there will be a line item on who the District is and where to call to complain. They do get something in advance of December when it is too late to do anything about it. You don't have the same hearings in September that cities and counties are required to conduct.

Ms. Archer stated we try to get the assessments adopted before the TRIM notice goes out so when we finally do adopt our budget, our assessment isn't higher than what we put on the TRIM notice because the County won't put a higher assessment on the final notice than what we put on the TRIM notice.

Mr. Churchill stated I think we need the reserves.

Mr. Fennell stated walk us through how the reserves get increased.

Ms. Archer stated the carry forward surplus last year was $151,000 which reduced our levy. That was extra money we had at the end of the year. This year we are projecting that we will have $40,000. That is approximately $111,000 less than what we had the year before. The total expenditures are only going from $654,000 to $719,000 to pick up money for the engine sinking fund and the capital outlay for pumps and engines. There is $60,000 for pumps and engines and $18,000 for an engine sinking fund. That is detailed in the back of the budget.

FIFTH ORDER OF BUSINESS Consideration of Award of Contract for Underwater Diving Services

Mr. Moyer stated the low bidder on the bid tabulation is Anchor Marine.

Mr. Lyles stated there is a reference in the introductory portion of the agenda package indicating that one bid was submitted by fax from out of State and not strictly in accordance with the bid specifications and if you want to consider that one you have to as a Board waive the irregularity.

Mr. Fennell asked what is the bid?

Mr. Moyer responded $9,075.

Mr. Miller asked are you familiar with this firm?

Mr. Moyer responded no.

Mr. Miller asked what about Anchor Marine? Have we worked with them? There seems to be a big discrepancy between the high bid and the low bid.

Mr. Moyer responded the real number is Industrial Divers who has been doing the work for the District for years and who understands what is involved. Where the other ones come from is probably just a lack of understanding of the work that is involved. From Industrial Divers down, those are in the ball park. The proposal that is not shown on the bid tabulation is from Underwater Consultants in the amount of $9,075 which was faxed in instead of being received in a sealed envelope as required by the bid specifications. Having said that I think we can all tell you that this in no way prejudiced any of the other bidders; nobody had knowledge of this bid; nor did this particular bidder have knowledge of any of the other bids that were submitted. It is a technicality and as Mr. Lyles indicated if it is the desire of the Board to do that you will have to waive that technicality.

Mr. Churchill asked are we clear with the bidders of what they are bidding on? You said Industrial Divers set the standard for this. I don't know if they set the standard for finding what they should be finding.

Ms. Archer stated Industrial Divers inspects the culverts and prepares a report on how much of it is silted in and how much is not and what they ran into. They prepare a report on every culvert and that report is what is put out to bid. All of the other bidders have access to that report. Industrial Divers is going to be the most knowledgeable about it because they did the inspection but all of the bids are based on that report that shows which pipes are being cleaned out and how silted in they are and what type of debris is in the pipe. They are all working off of the same report.

Mr. Churchill stated that is my question. Is that what they are looking at or do we have them looking at structure and wear?

Mr. Moyer responded this proposal is to clean culverts and that is all.

Mr. Fennell stated we do a lot of inspections but we don't seem to catch things and we had a couple of pumps fail. We are missing something.

Mr. Miller asked who inspected the underwater part of the pump last year?

Mr. Moyer stated that was Industrial Divers.

Mr. Churchill stated we didn't send them in to look at it until one failed. It wasn't something that we did as routine maintenance was it?

Mr. Moyer responded we do have the pump stations inspected yearly.

Mr. Fennell stated there is something wrong either with what they are doing or how we specify what they are to look for. Something is not working right.

Mr. Miller asked what kind of guarantee do they give us as far as how they are going to do the job?

Ms. Archer stated you may have hit on it by asking how we spec it or how they are doing it. They indicated to us that they can't really go in and inspect the propeller unless they pull it out and sand blast it and they get all of the debris that is built up on it, off of it to see what the metal looks like underneath. That is not something they can inspect while it is in the water. They do what they can when it is in the water but to really inspect it they have to pull it out which is not what we told them to do, sandblast it and look at the metal and by the time they did that after we had the failure is when we showed you the pictures showing that it was worn out.

Mr. Churchill stated that is the answer. If there is a problem it doesn't lie with Industrial Divers, it lies with what we are asking them to do.

Ms. Archer stated the epoxy coating that we are having applied now, is supposed to help.

Mr. Moyer stated part of the recommendation is that every five years we are going to pull those pumps instead of pulling them every 30 years. We will pull them, inspect them, have them coated and reinstalled and that will be part of the maintenance budget for the District once we get them all in.

Mr. Churchill asked how do you compute reserves unless you have a realistic idea of what you need?

Ms. Archer responded I am planning the whole replacement of engines in those reserves and the whole replacement of the pumps based on what we are actually paying for them and how long they lasted the last time. Last time they lasted 30 years. I am assuming we can still make them as good as we used to and they will last another 30 years.

Mr. Fennell stated you are doing the right thing as an accountant. The accountant can only be so accurate in predicting a failure. The engineers should know how much of a lifetime we have left in these things.

Mr. Moyer stated in this year's budget we are actually amortizing this over a ten year basis because you have $60,000 in the budget so in 10 years you will have $600,000, which gets you into the ball park we are talking about. If there is a catastrophic failure for whatever reason, the District can do a tax anticipation note. It doesn't have to be for one year, we can do a five year note.

Mr. Churchill stated I mentioned the reserve in passing because I think we have to make every effort to know where our problems lie before they get deadly. Whatever we need in terms of inspections, we need to be doing it.

Mr. Fennell stated it is a preventative maintenance program and I don't know that we have it budgeted.

Ms. Archer stated our repair and replacement on our pump stations, the staff does the preventative maintenance. They have a schedule where they go out on a regular basis and oil this and lube that and that is routine and that is in the annual budget.

Mr. Fennell stated what I am looking for is something more proactive and at a higher level. It doesn't have to come from us but it may come from a larger firm that you work for. I am looking for someone from the outside to come in and do an inspection of our facilities for preventative maintenance in anticipation. There are all kinds of ways to do this but there has to be some firms that do this.

Mr. Miller asked how much do you think that would cost?

Mr. Moyer stated the first call I would want to make and it may not be directly on point but would be to talk to the field office of South Florida Water Management District who maintain a variety of very big, important pump stations and ask them to come out and take a look at that and that probably is a zero cost factor.

Mr. Fennell stated I think that is what we are looking for, even if we have to put it in the budget. I would think it would be in the $5,000 range for something like this. I also think we ought to do it on the water and sewer facilities. What you are looking for is an outside engineering firm that specializes in preventative maintenance. They will come and do an audit. They will have a form already prepared with the type of things you have for the types of things you do and are you making these kinds of inspections. They will bring an expertise that isn't the normal engineering expertise. This is a quality engineering, quality inspection expertise. I think we need it not only here but also for the water plant.

Mr. Moyer stated I think we have already identified a company that does the engineering on the water and sewer plant.

Mr. Fennell stated this is different. This is basically an outside quality department that looks at your procedures if you are doing the right thing. This is a different field of study.

On MOTION by Mr. Fennell seconded by Mr. Miller with all in favor staff was directed to find organizations that can do an outside inspection of our quality and inspections programs for both the water and sewer facilities and the drainage facilities and to bring back to the Board proposals for consideration.

Mr. Churchill asked are we satisfied that Industrial Divers has done an adequate job of what we have asked them to do?

Mr. Moyer responded yes. The issue you need to wrestle with is whether you award the contract to the lowest, qualified, and responsive bidder which on your bid tabulation is Anchor Marine for $9,700 or whether you waive the technicality of receiving a fax bid from Underwater Consultants in the amount of $9,075. Under our statute you need to award the contract to the lowest, responsive, responsible bidder.

Mr. Miller asked where is Anchor Marine located?

Ms. Holiday responded I believe West Palm Beach. There was really only one out of town firm and that was the bid received by fax.

On MOTION by Mr. Miller seconded by Mr. Churchill with all in favor the contract for underwater diving services was awarded to Anchor Marine in the amount of their bid.

SIXTH ORDER OF BUSINESS Staff Reports

A. Attorney

Mr. Lyles stated I advised you at the last meeting that we had received a notice of claim from Centex regarding the treatment plant next door to their project and we told you that we were sending this on to our insurer for them to review the claim and start that process. Since that time the matter has been assigned to an adjuster by Reliance Insurance Company, the adjuster has contacted me and we have spoken a couple of times at length about all of these matters and they are reviewing the entire claim but they have transmitted to the District a formal letter indicating that they are looking at it under reservation of rights, meaning that they do not agree at the outset that there is coverage for this loss or that they will be handling the claim and they asked us to acknowledge that they are doing it in that way and they pointed out certain coverage defenses that they believe they have under our policy and they have done everything in a technical and insurance practice nature to create for themselves the ability to say this isn't really a covered loss and this is not something we owe you a defense on and we won't be participating in the matter. However, they are going to do this all in good faith and in order to do that they will be fully investigating the claim. One of the things they indicated is they want to review all of the records that are housed in Orlando by Centex's main office, their general counsel's office and they will schedule that sometime in July. They indicated they would like me to participate in that with them. They are not saying what they will or will not do. They are not saying who they are going to assign the defense of the case to through their policy insurance if they do assign it to defense counsel. At this point all I can report to you is that in every way that we can we want to make sure that we don't miss a trick to jeopardize the coverage so we are cooperating with them but we do have to acknowledge that they are taking it under reservation of rights and they may have certain defenses that will allow them to walk away from this claim. If they do that I suspect they will file something called a declaratory judgment action. They will sue us. They will allege under the policy they are not obligated to cover this loss and they will ask us to also respond and a Judge will decide and issue a declaration in the nature of a final judgment whether there is or is not coverage and who stands where under this policy of insurance. It is not that uncommon especially where you have a big commercial policy and a sizable loss like this. That may happen and that may not happen. I am doing everything to indicate that there is coverage and they will be picking this up and we understand that and know they will do right by the District and we have paid premiums and you owe us this. One of the things we are having a little trouble with is defining the coverage period. There may be another company involved in the defense of this because of the time frame in that the old violations occurred. They are going forward with notifying the other company that had the previous coverage period and bring them into it if it is appropriate. At this time there is nothing definitive but none of the signals are positive from our point of view. We have an obligation to cooperate with them in every way, to assist them in the defense of the claim and probably just acknowledge receipt of the document they sent us saying what they said. We do not agree that there is a coverage problem. We certainly do not agree that they have a coverage defense. Our position is they owe us coverage and need to defend this claim and resolve it if it can be resolved and fight it if it needs to be fought. If they want me to get on a plane early in the morning and go with the adjuster to Orlando and come back that day, I will probably suggest that we ought to do that. Unless we can make some alternative arrangement through Mr. Moyer's office if he wants to substitute for me. They are trying to have us help them understand literally years of documents involving various agencies here, cities, counties and this District. I don't believe this adjuster has had a case like this. He has probably had some environmental claims but I didn't get the idea that he had something with these particular facts and it is such an unusual case I would be surprised if he did. I am not aware of a claim like this being made against another governmental agency. I think either through the Manager's Office or my office, we should agree to accompany them to this document review session that should take a full day in Orlando.

Mr. Churchill stated just to have someone there to tell the adjuster what he is looking at.

Mr. Lyles responded exactly. That is what he is asking for and I don't think it is unreasonable under these circumstances.

Mr. Fennell asked other than the claims adjuster is there a lawyer involved?

Mr. Lyles responded there is not a lawyer involved except me. He is relying on me at this point.

Mr. Fennell asked what can we do to strengthen our claim that we are covered by insurance?

Mr. Lyles stated if that kind of declaratory judgment action gets filed, we will defend that and we will do all the things that people do when their insurance company tries to take a hike on them. They took our premiums, they were happy with us as long as there was no claim and now there is a claim they are looking for ways to get out of it. There will probably be a report on this at every meeting for the next several months.

B. Engineer

1. Monthly Water & Sewer Charts

2. Update on Construction

Mr. Moore stated I received a fax from Farmers Manufacturing on the schedule of the pumps and I will fax it to you in the next day or two. When we talked a few weeks ago we accelerated a couple of those plates so that the pumps could be put in expeditiously.

Mr. Moyer stated we will get that to you and I will meet with them and let them know that it is important that they move as quickly as possible.

Mr. Churchill asked for a status report on the renovations to the plant.

Mr. McKune responded the interim renovations to Plants A and B are now complete. It is a question of how much money you want to spend in addition to that and I will get into that next month. What has been accomplished so far is doing a great job.

Mr. Moyer stated they all got a new air system and that is what this is all about.

Mr. McKune stated one was in much worse shape than the other.

C. Superintendent

There not being any, the next item followed.

D. Complaints

There not being any, the next item followed.

SEVENTH ORDER OF BUSINESS Supervisor's Requests and Audience Comments

Mr. Miller asked did the City put up the "Conserve Water" sign by Ramblewood Plaza or is that our sign? It is in poor shape.

Ms. Archer responded I believe the City put that up about 10 years ago. Maybe we can write them a letter and ask that they replace it.

EIGHTH ORDER OF BUSINESS Approval of Invoices

On MOTION by Mr. Miller seconded by Mr. Churchill with all in favor the invoices were approved for payment.

On MOTION by Mr. Fennell seconded by Mr. Miller with all in favor the meeting adjourned at 5:00 p.m.

Clint Churchill Robert Fennell

Secretary President