MINUTES OF
MEETING
SUNSHINE WATER CONTROL
DISTRICT
The recessed meeting of the Board of
Supervisors of the Sunshine Water Control District held March 8, 2006, was
reconvened on Thursday, March 9, 2006, at 6:30 p.m. at the District Offices,
10300 NW 11th Manor, Coral Spring, Florida
Present and constituting a quorum
were:
Russell Parks President
Philip Sobers Secretary
Also present were:
John Petty Manager
Bruce Cranmer Attorney
John McKune Engineer
FIRST ORDER OF BUSINESS Roll Call
Mr. Petty called the meeting to
order and called the roll.
SECOND
ORDER OF BUSINESS Bid
Openings
Mr. Sobers stated based on the numbers I
came up with the average bid was $4.149 million.
Mr. Petty stated we do
have a certain amount of understanding and confidence now that we have Arbor
Tree for the sister District, who passed all the tests and did the Performance
Bond, has their equipment on site and as you see tonight they are more than
willing to come and stand by whatever they have proposed.
We have not had time
to give American Environmental that opportunity. We are restricted in our choices, we must
award to the lowest responsible responsive bidder. It is up to our engineer with good enough
specifications that the responsible part can be looked at before construction
begins. The next ten days will be the
evaluation period. We are going to be in
a financial position to be able to change trains should one of them stall. We have an option of the work of any tree
removal which is still being considered by staff and has not been brought to
the Board for a decision.
Mr. Parks stated it
has to get of tap dead center and get moving because it is getting to a point
now where everybody is getting upset.
Mr. Cranmer asked when
did CSID award their contract?
Mr. Petty responded
they awarded last week and they just had their pre-construction meeting
yesterday. They almost started work
today and I believe we are expecting them here sometime tomorrow to try and put
the barge in.
Mr. Sobers asked would
you like to move forward?
Mr. Parks responded I
guess we have to. One of the conditions
is the low bid.
Mr. Petty stated
unless counsel can give you any other options.
Mr. Parks stated I
think they have done their due diligence in the engineering end of it. They must have looked into it pretty
carefully.
Mr. Petty stated they
will be in the next 10 to 15 days as the contract conditions must be met within
a certain time period.
On MOTION by Mr. Sobers seconded by Mr.
Parks with all in favor American Environmental Contractors as the lowest
responsive bidder subject to availability of funding for hurricane debris
removal and canal bank restoration was approved.
Mr. Petty stated on the matter of
finance which we have been discussing for sometime. We have distributed the commitment letter
from SunTrust Bank for our funding in this case. It is for an amount not to exceed $6.37
million, a short-term note convertible to a five, ten or 15-year mechanism. It is to be interest only the first year, to
be converted over to the short-term, mid-term, long-term mechanism. We are asking for the Board to allow staff to
prepare the documents with SunTrust and to allow the President of the District
be allowed to sign such documents and obtain the funding necessary for the
project as long as it does not exceed the parameters as stated in the
letter.
Mr. Parks asked is the rate still at
3.9%?
Mr. Petty responded it is a calculation
which has been done based on certain parameters of various financial standards. They will say it represents our market plus
one or plus two, etcetera.
Mr. Sobers stated so the current
rate is 3.9%.
Mr. Petty stated for the short-term
note yes. If you are looking for the
five year or 60 month it is 4.55%, ten-years 4.66% and 15 years 4.76%. This is all as of February 24th
and I know of no changes since then.
Mr. Parks stated this is what we
talked about the other night.
Mr. Petty stated yes, we have
reviewed the draft on previous occasions.
The bank has tightened up the interest rate, the closing cost are
minimal, the legal fees are at $10,000, there are some other ancillary cost to
be done and they will be brought to you on a case by case basis.
Mr. Parks asked what will we
eventually get from FEMA on something like this?
Mr. Petty responded from NRCS we
hope to get 75% of the cost associated with this job. It depends if Mr. McKune can be as
influential on this job award as he was for CSID, where he was able to convince
NRCS the amount of the award did represent actual cost conditions. He will propose the same case to NRCS on this
amount. Hopefully, he will have it back
to us within a week or so. If he gets it
our entitlement will be at 75% from NRCS and a possible additional 12.5% from
the State of Florida which will leave our exposure at the additional
12.5%.
Mr. McKune stated you may also add
you will be reimbursed 100% of our cost.
Mr. Petty stated it is in the
agreement we signed earlier when we said we would pay him up to $25,000 a month
and is why the amounts of the promissory note is at $6.37 million it considers
engineering and other outside cost the District may have to go to on a
long-term deal.
Mr. Sobers asked in your judgment
how long would you recommend this note be committed for?
Mr. Petty responded at this time I
would not commit. One of the truly
unique things about this mechanism is you are not required to commit to any
term until October 1, 2006. You
will not make any payments on this note until after you have fixed it, which is
October 1, 2006, and the first payment will be due after January, 2007.
Mr. Parks stated when does the
interest free for one-year period start?
Mr. Petty responded as soon as you
get the money. The October 1st
date as a note in the requirements we will have to commit to whether we want it
for a one to five-year, 10, or 15-year period at that time. This gives us five to six months to do due
diligence, our budget review and to understand the assessment impact and to
have special assessment counsel.
Mr. Parks asked can it be paid off
early?
Mr. Petty responded without penalty
at anytime with a 30-day notice.
Mr. Parks stated the thing which
bothers me about American Environmental is I cannot believe they can be almost
¾ of a million difference.
Mr. Sobers stated I am also
surprised as a matter of interest why one their representatives are not
here. We are talking about real money,
something like this I would make it my duty to send somebody.
Mr. Petty stated I do not know that
they know the meeting was continued to tonight.
Mr. Sobers stated come March 20th
they have to fill in their stuff.
Mr. Petty asked should over the next
10-days the apparent low responsive bidder not be able to qualify? What procedures do staff undertake before
going to the next lowest bidder? What
procedures would we like to follow?
Mr. McKune responded we normally
allow bidders some leeway in the time period because of the physical act of
getting the notification, sometimes the bonding company will not write the bond
until they sign a signed copy of the contract.
What we do require in this instance is some indication from the bonding
company they will write the bond.
Mr. Sobers stated if the 10-day rule
has been established and you make exceptions perhaps the 10-day parameters
needs to be revisited, because 10-days is not practical.
Mr. McKune stated anything in the
specifications can be waived.
Mr. Cranmer asked are you talking
about some kind of letter of intent within the 10-days?
Mr. McKune responded yes.
Mr. Cranmer stated it will
grandfather you into the 14th or 15th day when you get
the letter.
Mr. McKune stated in the advertising
it says the owner reserves the right to reject any and all bids with or without
cause, to waive technical errors and informalities and to accept bids which
best serve the interest of the owner. If
you wish to hold the 10-day rule to have the bond in hand I will call the man
tomorrow and tell him.
Mr. Sobers stated I would think so
because if you have established a rule and then you equivocate then the rules
becomes swallowed.
Mr. Petty stated if this bidder has
put in a bid of $3.5 million and apparently erred in his bid, has under bid and
will not be able to perform the job.
This would be the one mistake I think concerns us all the most. He has done work for other large agencies for
similar amounts, but a contractor who has erred on a large contract is the one
who scares me; they may be reputable but who can afford to lose $.5 million
dollars.
If we wish to find out this
contractors reliability as quickly as possible and we hold him to the 10-day
bond and he cannot obtain it let’s also give him leeway on if he cannot do this
within 10-days the bid bond is returned in whole.
Mr. Sobers stated it seems fair.
Mr. McKune stated we have done it
before because if there is an error he will want out.
Mr. Sobers stated in my motion I
should have made mention of the fact if American Environmental Contractors
fails to meet the criteria then we go to Arbor Tree.
Mr. Parks stated it is in the
document.
Mr. Petty stated it maybe in his
document we start negotiation and procedurally this is the way I would do it if
I wanted to cover all the bases. I would
call an emergency meeting of the Board to talk about the default, the engineer
will tell you how it defaulted, you would then be instructed by counsel on your
liability and exposure was, and then I would ask you to consider the second
lowest bidder and ask staff to negotiate.
At which time if you approve it we will send our engineer and counsel to
see if they can enter into an agreement with this entity.
Mr. Sobers stated in the event
American Environmental we previously said that perhaps in good faith we should
give them back their monies. My thing is
this give them back their monies yes, but it will cost maybe not 100% perhaps
1% or 2% for two reasons; you have wasted time, time is lost and you must pay
for your errors.
Mr. Petty stated this is exactly why
the bid bond is there so bidders do take this seriously and do not fool with
our time and normally I would be extremely supportive of it. In this case I am going to ask the Board to
think of the exceptional pressure that is on you for action and which may tilt
the scale to allow this instance be considered without penalty. This contractor will look at his penalty and
weigh it against a stall with a legal effort.
Mr. Cranmer asked do these companies
have bond ratings such that it will be a deterrent for them to stall if there
is a default and a claim on a bond? The
next time they go to bid it is going to cost them to much money and they are
not competitive anymore.
Mr. Petty responded they have
reputations with the bonding companies.
Mr. Parks stated it is usually
brought out in the meeting if they have not performed on their bond
before.
Mr. Petty stated we do not have a
bid bond we have a cashier’s check. We
do not of a ranking and whether it is good or bad. We have no leverage to think he is concerned
about his bid bond rating because he may not utilize it.
Mr. Cranmer stated it is a cash
bond.
Mr. McKune stated a cash bond or a
performance bond.
Mr. Parks stated I think he should
be held to the 10-days.
Mr. Sobers stated I am a firm
believer in the 10-days.
Mr. Parks stated we are way behind
and if we do not put parameters on a start and stop type thing, it is time we
said you have the stuff in and it is time to perform. If you do not perform we are going to someone
else.
Mr. Sobers stated my thought process
is tonight fax a brief notice saying you at a meeting held late tonight you
have been awarded the bid. Tomorrow you
will be contacted by a member of our staff.
This way whoever gets in first thing in the morning will see the fax and
we are being proactive.
Mr. Petty stated I suggest we ask
the engineer to issue notice of award as soon as possible. There are some issues we need to check to dot
the I’s and cross the T’s.
Mr. Parks asked you do not want to
it tomorrow?
Mr. McKune responded we could
indicate notice of award.
Mr. Parks stated I think we should
let them know they have 10-days.
Mr. McKune stated we will get it to
them in both written and fax form tomorrow.
We will indicate he must now provide the bond within x period of time.
Mr. Parks stated if they want the
job they are going to do it.
Mr. Sobers stated be specific, not
just 10-days, 10-days (March 20th 17:00 eastern standard time.)
Mr. Parks stated I do not think
there is going to be a problem.
Mr. Sobers stated from an audit
point of view in view of the fact we are now being looked at under the sunlight
by several people it can show we have documentation to show we notified them by
fax the very night it was awarded, we sent them correspondence via registered
mail or Fed Ex, we have identified the 10-days to expire on March 10th.
There
was discussion on Conservation Services when the tape resumed.
Mr. Sobers asked what day?
Mr. Parks responded Tuesday, the 14th.
Mr. Sobers stated at 7:30 p.m.
Mr. Petty stated at City Hall at
Margate.
Mr. Parks stated if we get back
early I will attend.
Mr. Cranmer stated I notified Mr.
Steinfeld by fax today in the spirit of our good neighbor policy. In further reading Chapter 164 it is
anticipated people come in and out because of their own private schedules, but
it says it can be continued. The three
of us can go and if we get nothing done we can adjourn and a couple of days
later we will have a quorum if we decide something, if we do not the next phase
is we select a mediator for the final phase.
Mr. Parks stated I do not understand
what they want anyhow. How many trees
are they talking about?
Mr. Petty responded I know it is
that area but I do not have a count.
The big issue we have had so far is
the desire to have Sunshine Water Control District enter private property to
remove material from this Act of God off the private property at taxpayer
expense. This is a huge precedent which
staff particularly counsel will not recommend to you at all. The ramifications will be such that this
District would no longer exist. It is
doubtful that any drainage district would under those conditions.
Mr. Cranmer stated I impressed on
the City Manager how would he like a precedent that affects the city’s budget;
they have trees in parks that fall on houses and into yards.
Mr. Petty stated this is factual
content of our disagreement and the rest is smoke and mirrors.
Mr. Cranmer stated the case law
tends to evolve gradually since a famous case in England involving a coach
accident in 1746, the whole doctrine of negligence and liability has been
expanding. Strict liability applies to
food, restaurants and hospitals, that kind of thing. As time goes on I am sure the courts will
evolve a doctrine abolishing the Act of God doctrine. I have no doubt in future cases they will
hold the tree owner liable for damage to adjacent property. It is not the law now unless it is coupled
with negligence which is based on forseeability and is why it is important
these leaners and hangers get addressed now before they do create the
negligence which throws our Act of God defense over the side.
Mr. Petty state since we talked
about this last night as well let me say since these leaners and hangers are
there as an Act of God it does not give us a right to go on private property
nor does it give us cause to put the District at risk for further damage in the
removal. What it says is we have an
obligation it and do due diligence to observe it and in due diligence to work a
way of removing the danger, now if that means contacting the owner to work out
a joint resolution and they do not wish to work with you I do not know that
they can get you for negligence if you could not remove this tree without
obvious danger and the homeowner would not assist in a more suitable removal
process. We still have this stage which
we have to get by and we are trying to.
We have a contractor ready to rock.
Mr. Cranmer stated last night I was
thinking about the Margate City Manager’s abrupt termination of our otherwise
productive meeting and it occurs to me in a perverse way they are kicking
themselves in the head because the City Manager’s original approach for Margate
was lets work out a permit, the City of Margate will go in to take care of this
and we will worry about who pays for it later; very constructive. We worked out a permit and he was very
professional about it. We went back and
forth, he made some changes, you made some changes, then we go to the City of
Margate and they suddenly pull the rug out from under it. If a nuisance now exists whose fault is it
that it is continuing. We offered to
allow them to remove the stuff and dump it on our land. They originally offered to front the money
and worry about who pays for it later.
Now you could perversely argue continuing maybe it is not our liability
maybe it is theirs because they closed the book on the progress we were making
under our permit. I would not want to
take it to court but it is an interesting argument.
Mr. Sobers stated I am wondering in
light of the fact I am the only Board member appearing perhaps I should make an
opening statement basically setting the foundation.
Mr. Cranmer stated these are simply
negotiations. You have authority from
the Board last night to listen and report back.
If some agreement is arrived at we abate the nuisance issue. If it happens you may get a positive proposal
and you can report back, we can schedule a meeting and pass it. What I expect to happen is nothing. It is a repetition of what happened before
where we are going to have screaming homeowners and busy sergeant at arms.
Mr. Petty stated let me the Board to
consider allowing Mr. Sobers to bring to the meeting a question of what is the
substance behind the formality of this meeting.
What is the matter being contested by the two parties because we are
unclear about what we are contesting from you and we are unclear of what you
are contesting from us. If there is not
a basis for it, this is something to bring back to the Board for future notices
from Margate of additional meetings but if we have no contesting subjects such
meetings are not required or allowed under statute. I guess they are allowed under statute.
Mr. Cranmer stated the statute says
you can have as many additional supplementals as you want.
Mr. Petty stated in resolution of a
conflict. I am unsure of what the
conflict is, they talked about a lawsuit but have since told you they really do
not think they have much to go on.
Mr. Cranmer stated the City of
Margate has no standing because the east outfall canal is within the City of
Coral Springs. He has a vague nuisance
theory but he may have considered the whiplash effect when they killed our
permit they maybe responsible for future falling of a hanger or leaner because
we had it resolved.
Mr. Petty stated it is something we
did not do because we went with the olive branch saying we are here to talk and
we were ready to answer questions. They
came at us with a machine gun of questions and if the answer was not to their
liking they took umbrage which caused the abrupt leaving of the meeting.
Mr. Parks stated it sounded like it
was already resolved.
Mr. Cranmer stated the City Attorney
and I had worked it out. When we got
there they said we are not spending a dime of city money to do any of this, which
is contrary to what the City Attorney and I had worked out.
Mr. Petty stated at the first
meeting while we acknowledged their correspondence which had a lawsuit demand
for entry to our property to remove what they consider to be a danger,
etcetera. We acknowledged it and I
brought to their attention that their actions by their elected body to press
and at their board meetings and scandalous accusations against this District
which runs by its high reputation and values nothing above its high reputation
with its residents resented what the City of Margate had done and would hold
them accountable for any lose of faith with our residents. Asking them at this meeting what the issues
are seems to be appropriate. I know we
are want to be as friendly as we can but one of the things you must be aware of
is the good name of Sunshine Water Control District which is everything in
government is at a strong risk under these issues.
Mr. Cranmer stated I would suggest
one tact we take aside from showing them we are moving along with the process
it is a once in a 42-years event and no government entity was prepared for
it. Aside from this if it gets rough
with the residents we can point out the two City Attorney’s had it worked
out.
Mr. Parks stated I think it should
be right up front.
Mr. Cranmer stated the City Attorney
for Margate said we are not going to argue who pays for it right now, we will
worry about it later, let’s get a permit and get it cleaned up. We did and they pulled the rug out.
Mr. Sobers stated this can be part
of my opening statement.
Mr. Cranmer stated we are still
willing to go through the permit process and we can argue about who pays for it
later. Down the line it might not seem
important but right now what is important is taking care of you people and we
are ready to do it.
Mr. Petty stated until it came to
entering private property then both the attorney and the City Manager were
adamant and said at our staff meeting neither would agree to go on to private
property.
Mr. Cranmer stated I am not so sure
Mr. Golub and Mr. Steinfeld had spoken before the meeting. As I watched there was some discomfort
there.
Mr. Petty stated they play a very
good – good cop/bad cop scene.
Mr. Cranmer stated why would they go
through the permit process in congeniality and then pull the rug.
Mr. Petty stated if you remember the
first letter was not a friendly letter.
They were accusatory and said if you are not doing it we want access to
the property, we demand access to the property, the Boards first impression was
what the heck is going on and our decision was to act as a good neighbor after
a crisis and allow our neighbor city access as we always allow residents access
to our property during these times if it benefited their safety. We ignored the threat and the accusation to
act as a good neighbor. I do not think
they expected it I think they expected a show of force, a show of anger, a show
of who do you think you are talking, too.
They then went to a second step which was to throw out a lawsuit and now
they are going to a third step which is a bill saying you must be
dependent. This bill written by the City
of Margate without City of Coral Springs openly, where the City Manager of
Coral Springs says I cannot condone the actions of Margate and their way of
going after the Sunshine Water Control District and we are not supportive of
the bill, which he said in an open session.
For them to submit a bill where they have no constitutional right to
cause work to be the responsibility of another municipality there is no
precedent for this. Only with the City
of Coral Springs coming out and supporting the bill does it even have a chance
of being heard.
The meeting with Margate is not to
be considered reasonable. The issue with
Margate is not considered reasonable.
Mr. Cranmer stated there were others
in the room. I am not sure who they
were, the city manager, the assistant city manager.
Mr. Petty stated the public works
director.
Mr. Cranmer stated there were people
at the far end at the table. Some of the
people who did not say anything certainly heard our point of view.
Mr. Petty stated it is totally
appropriate for counsel to be providing you with the opening statement. The only other thing I would ask you to
consider is an entry plan I would suggest we let counsel decide whether it will
be appropriate or under what circumstances we rise as a delegation and
leave. The reason I ask is because I saw
the Margate delegation do it at the last meeting and I wonder if we should have
a similar plan.
Mr. Cranmer stated we should be very
careful not to personalize this against the person who is in the hospital
because someone will grandstand now we are picking on the guy in the hospital,
then everybody will turn against us.
Mr. Petty stated I think in the good
neighborly fashion we have been conducting our business is the way we should
conduct it at this meeting. As soon as
our good neighbor ceases to be a good neighbor and you as counsel I have full
faith.
There being no further business, the
meeting was adjourned.
Philip Sobers Russell
Parks
Secretary Chairman