MINUTES
OF MEETING
SUNSHINE
WATER CONTROL DISTRICT
The regular meeting of the
Board of Supervisors of the Sunshine Water Control District was held on
Present and constituting a quorum
were:
Mary Macomber President
Dave Hulett Vice President
Philip Sobers Secretary
Also present were:
Ed Goscicki
Bruce Cranmer Attorney
Cedo DaSilva CH2M-Hill
Peter Colussy CH2M-Hill
Pamela Rower
Cory Selchan Field Superintendent
John McKune In-House Engineer
Doug Hyche District Staff
Rich
Michaud City of Coral Springs
Director of Public Works
Stiles Landscaping Company Representatives
Several Residents
Ms.
Macomber called the meeting to order and Mr. Goscicki called the roll.
SECOND ORDER OF BUSINESS Approval of the Minutes of
the May 9, 2007 Meeting
Ms. Macomber stated each Board
member received a copy of the minutes of the
Ms. Macomber stated the motion boxes
on the top of pages three and 23 identify the wrong Board members.
Mr. Goscicki stated these are Pine Tree
supervisors.
On MOTION by Mr. Hulett seconded by Mr. Sobers
with all in favor the minutes of the
THIRD ORDER OF BUSINESS Discussion on Management
Services
Mr.
Cranmer stated we received four management proposals. Everyone was on time and met the
requirements. Did the Board members
receive copies of the proposals?
Ms.
Macomber responded I did, but have not had a chance to review them. We should set up a procedure in how to deal
with them.
Mr.
Cranmer stated absolutely.
Ms.
Macomber asked do you have any suggestions?
Mr.
Cranmer responded you could review them and determine which ones you want to
discard and interview at the next meeting.
You could also rank them by ballot.
Mr.
Goscicki stated this is typical when selecting an engineering firm where you
review the proposals received and short list them or have all candidates give
presentations. Based on their
presentations, you will make the final determination through a ballot process
where you rank by your first, second and third choices. The firm with the highest number of votes is
selected as the first ranked firm.
Ms.
Macomber asked is it appropriate for us to bring a short list back to the next
meeting and then take a vote?
Mr.
Hulett responded sure. Since there are
only four candidates, I suggest having all candidates make presentations. I have not had a chance to go through the
proposals in any great detail. Perhaps,
the Board should schedule a special meeting, two weeks from tonight. After the presentations, the Board could take
a vote, perhaps as Mr. Goscicki recommends, having each supervisor rank the
firms. If a clear winner emerges, we can
proceed to the negotiation process as called for in the RFP. If there is a tie, perhaps the respondent
with the lowest number of votes can be dropped and we can have a second
voting. I want to move forward quickly
to get this behind us. I certainly have
no objection meeting two weeks from tonight.
Ms.
Macomber stated this is one way to pursue this.
I prefer reviewing the documents between now and the next meeting. We want to make sure we get this taken care
of in a prompt manner and I want to have time to review them between now and
the next meeting. Perhaps if we have a
short list, we can discuss the candidates we want to consider.
Mr.
Sobers stated I endorse having a short list by the next meeting. This will give us ample time to review the proposals.
Mr.
Cranmer asked do you want to have a presentation by the respondents after the
regular meeting?
Ms.
Macomber responded we do not need to have the presentations until such time as
we had a chance to review the proposals.
Mr.
Hulett stated this puts us a long way down the road.
Ms.
Macomber stated I prefer being prudent and taking our time. There is no urgency. We already have a management company in
place.
Mr.
Hulett stated we could hold a special meeting if everyone is available. Keep in mind, once a decision is made, there
is still a 60 day notice process involved with the present management company. It could be Thanksgiving before this process
is completed.
Ms.
Macomber stated I prefer my view.
Mr.
Goscicki stated not to imply we are trying to extend the process but keep in
mind, we are in the middle of the budget process and it is a matter of 30 to 60
days more to complete this process. I do
not recommend any change until we get through the budget process and the
assessment roll is completed. Even if by
some remote chance, we were not selected, I still want to stick around for a
long enough time as to get through the budget process.
Ms.
Macomber stated this is prudent.
On
MOTION by Ms. Macomber seconded by Mr. Sobers with Mr. Sobers and Ms. Macomber
voting aye and Mr. Hulett voting nay, the management proposals will be reviewed
by the next meeting, at which time, a short list of management companies will
be completed.
FOURTH ORDER OF BUSINESS Award of Contract for
Triploid Grass Carp
Mr. Goscicki stated we received
proposals from four different vendors.
Florida Fish Farms was the low bidder in the amount of $16,500, which is
below the budgeted amount. Mr. Selchan
and other districts worked with this firm in the past. We are comfortable with this bid and
recommend to the Board.
Ms. Macomber moved to award the Triploid Grass Carp contract to Florida
Fish Farms, Inc. in the amount of $16,500 and Mr. Sobers
seconded the motion.
Mr. Hulett asked is Mr. Selchan satisfied
with this contractor?
Mr. Selchan responded yes. We used this contractor in the past and they
delivered the fish in a timely manner.
On VOICE VOTE with all in favor, the prior
motion awarding the Triploid
Grass Carp contract to Florida Fish Farms, Inc. in the amount of $16,500 was
approved.
FIFTH ORDER OF
BUSINESS Consideration
of Permit Requests
A. Reynolds,
Smith & Hills – Eastern Financial Credit Union for Discharge into Existing
Drainage System and Ultimately into
Mr. DaSilva stated this request is for
a drainage permit for an Eastern Financial Credit Union in Castlewood. I provided our recommendation letter to the
Board for approval.
Mr. Sobers moved to approve the request from Reynolds, Smith
& Hills for discharge into an existing drainage system and ultimately into
District Canal L17-6 for construction of an Eastern Financial Credit Union and
Mr. Hulett seconded the motion.
Mr. Hulett asked does Mr. Selchan
have a problem with this request?
Mr. Selchan responded no. It is standard.
On VOICE VOTE with all in favor, the prior
motion approving the
request from Reynolds, Smith & Hills for discharge into an
existing drainage system and ultimately into District Canal L17-6 for
construction of an Eastern Financial Credit Union was approved.
B. CKE
Group, Inc. – Taco Bell Restaurant for Installation of Exfiltration Trench into
Existing Parking Area
Mr. DaSilva stated this request is
for a Taco Bell restaurant in the Royal Eagle shopping center. I recommend approval of this permit based on
our approval letter with our standard conditions.
On
MOTION by Mr. Hulett seconded by Mr. Sobers with all in favor the request from CKE Group, Inc.
for installation of an exfiltration trench into an existing parking area for a
Taco Bell Restaurant was approved.
C. Libertine
Capital, LLC. –
Mr. DaSilva stated this application
is for a right-of-way permit for
On
MOTION by Mr. Sobers seconded by Mr. Hulett with all in favor the request from Libertine
Capital, LLC. for the re-grading of a slope bank on Canal T in back of
SIXTH ORDER OF
BUSINESS Staff
Reports
A. Attorney
Mr. Cranmer stated I received a
letter dated June 5th from the City of Coral Springs requesting our
consent to abandonment of two rights-of-way; one in the Commerce Park of Coral
Springs and the other in the R&D Park.
The case numbers are Q1AR07 and Q2AR07.
When an abandonment is requested; all utilities who may have an interest
have to sign off on it. We may not have
an interest. I contacted Mr. DaSilva
regarding whether or not we have an interest in these abandonments and I
believe he made a determination we do not have any interest in retaining
them. The city is making this request. On one of the abandonment’s, the petitioner
is Sawgrass West Holding Corp. and the other is T&K Nezwek, LLC.
Ms. Macomber asked is one at the end
by the Sawgrass Expressway?
Mr. DaSilva responded it is at the
end of
Mr. Sobers asked near the trash
facility?
Mr. DaSilva responded yes.
Mr. Cranmer stated it is standard
procedure for all utilities to sign off.
Mr. Goscicki stated what is
encouraging is the city recognizes the District exists and has utilities.
Mr. Cranmer stated we had things
like this is the past where we had absolutely no interest. However, our name appeared on the plat of the
subdivision.
Mr. Hulett asked did you just
receive these requests today?
Mr. Cranmer responded no. I received them on June 5th and
faxed a letter to Mr. DaSilva on June 6th.
Mr. Hulett asked was there any way
to get this to the Board prior to the meeting?
Mr. Cranmer responded no.
Mr. DaSilva stated usually items
like this go to the District for approval.
They come to us first and we write a letter of no objection to the
applicant. I guess this one came
directly to the attorney.
Mr. Goscicki stated there was a
timing issue. Usually this type of
request would have gone to the District office rather than the attorney. We would have provided it to the engineer and
copied the attorney.
Mr. Cranmer stated I think of this
as an afterthought. This hearing is
scheduled for June 19th.
Mr. DaSilva stated I am more than
happy to write a letter of no objection for both parcels.
Mr. Hulett stated I want to see any documents
before they are brought before the Board.
This is the time of emails and faxes and there could have been
opportunity to provide them to the Board for review prior to the meeting. It makes good business sense.
Ms. Macomber stated I want to make
sure our experts review them.
Mr. Hulett stated we should be
looking at it at the same time.
Mr. Goscicki stated I appreciate the
Board’s comments. Very often if items
come in late, if it is not critical, they get deferred and we will not put them
on the agenda. We will make sure there
is adequate time for Board review.
Mr. Cranmer stated this is less of a
policy decision than administerial. Our
engineers do not have any interest.
Therefore, it is not worth arguing about it. If it was something critically important, I
would have provided it to you.
On
MOTION by Ms. Macomber seconded by Mr. Sobers with Mr. Sobers and Ms. Macomber
voting aye and Mr. Hulett voting nay, the request by the city for abandonment
of rights-of-way
in the Commerce Park of Coral Springs and the
Mr. Cranmer stated since the
management of the District changed, no one could find a resolution for the
maintenance tax as our minutes of February 5th indicated. I personally recall taking four copies over
to the former Chairman, Mr. Parks and then providing them to the Secretary who
is no longer with Severn Trent Services.
No one could find it. Therefore,
I prepared an affidavit of lost instrument and attached a copy of what was
passed. We know what was passed and how
much it was. The final draft was faxed
before the February 5th meeting and was brought to the meeting. I know Ms.
Mr. Hulett asked what is this
resolution for?
Mr. Cranmer responded in February,
when we consulted with Bond Counsel, Constitutional Law Counsel and SunBank’s
Counsel, we were required to pass certain resolutions. One of them was a Maintenance Tax Resolution
under Chapter 298.54. The agenda for the
February meeting shows it was passed.
The problem is no one can locate the four originals signed by Mr. Parks
in my presence. Therefore, I prepared an
affidavit showing the resolution was submitted and signed.
Mr. Hulett asked what was the
maintenance tax for?
Mr. Cranmer responded this was how
the process started for the SunBank loan.
Mr. Richard Masters filed a small
claims suit for $5,000 against Sunshine regarding our subcontractor, Stiles due
to mis-identification of trees. In other
words, good trees were identified as bad trees when they should not have
been. I sent letters to our carrier in
The General Manager for Stiles
Corporation acknowledged they made a mistake on the identifications and
apologized. They were hired by American
Earth Movers to perform an earth survey and six trees were mis-marked and cut
down. They notified the city in regards
to their actions and will work this out with them.
Ms. Macomber asked how will you work
this out?
The General Manager responded it is
a code violation and remediation has to take place. A copy of a letter sent to them was provided
to Mr. Cranmer.
Ms. Macomber stated we appreciate
you stepping up to your responsibilities.
Mr. Cranmer stated if I have to
attend the pre-trial conference, the Board has to give me authority to
represent the District. According to the
pre-trial conference rules, I need to have the authority to settle. I am hopeful to have this matter resolved by the
pre-trial conference. We are not
prepared to offer money at this time because we have indemnification provisions
in our contract with American Earth Movers.
If the Board will indulge me, I request you authorize me to contact Mr.
Masters and tell him what our position is and direct him to contact Stiles as
they have an offer to make. We can have
him sign a release; releasing the Sunshine WCD, CH2M-Hill, Stiles and American
Earth Movers and all of their agents and employees. We will give him a $5,000 check, which will
be provided by Stiles.
The last item I have is in regards
to what the city is going to do about the tree ordinance. Apparently these trees were on Mr. Masters
property and not in the right-of-way. If
they were on our right-of-way, we have a strong argument and not be liable. There were two errors; the survey line and identification
were incorrect. Mr. Colussy informed me
the trees were on Mr. Masters property.
We are hopeful the city will cooperate.
We believe they will. Our release
encompasses all of this. I wish to have
authority from the Board to contact Mr. Masters and for Stiles attorney to
contact me as soon as possible. July 16th
is only a pre-trial conference but the judge wants to get the case
settled. I have to present a list of
witnesses. The District does not want to
offer any money, even though we hired AEM and they hired Stiles.
Mr. Sobers stated in light of the
requirements, we need to give you authorization. Do we go after the appropriate documents with
the necessary indemnification prior to July 16th?
Mr. Cranmer responded yes. It is simply going to say: 1) Mr. Masters is
dismissing his suit with prejudice, 2) Receiving $5,000 from the subcontractor
and he in turn is releasing the contractor AEM, Stiles, CH2M-Hill and Sunshine
WCD and all of its agents and employees and 3) It is Mr. Masters responsibility
to deal with the city requirements. It
is by no means certain they are going to require him to do anything. If no one attends the pre-trial meeting, it
defaults. He sued both Stiles and
Sunshine.
On
MOTION by Ms. Macomber seconded by Mr. Sobers with all in favor the District
Attorney was authorized to prepare a letter and release to Mr. Richard Masters
and attend the pre-trial meeting, if necessary.
Ms. Macomber stated thank you for
bringing this matter to our attention.
Mr. Sobers asked when will the
letter be ready for our signature?
Mr. Cranmer responded I will prepare
the letter to Mr. Masters and provide a copy to Stiles. I will also prepare a release form. We can make the arrangements to hold the
release in escrow or hold the check pending the release being signed. I want this matter resolved prior to June 16th.
The General Manager said he will
have the check prepared by Monday for escrow.
Ms. Macomber stated thank you for
being here tonight.
Mr. Cranmer stated in the business
world of the 21st Century, to receive a letter from their Arborist
is quite refreshing. Phase II is an
expensive and complicated project and this will probably happen again.
Mr. Sobers asked what if any
procedures have been put into place to avoid something like this from occurring
again?
The General Manager responded the
Arborist looked at the other canals and corrected any other mistakes.
Mr. Cranmer stated there are three
entities watching this process. However
with all of the cross checks and balances, this still happens.
B. Engineer
– Evaluation of Stormwater Pump Stations 1 & 2
Mr. Goscicki stated prior to the
meeting, the Engineer requested we pull this item from the agenda in order to
obtain further information.
Mr. Hulett asked what are your
concerns?
Mr. Colussy responded we felt the report
could be polished further. We had some
questions, wanted to double check some figures and add more conclusions so you
can better understand the process.
Ms. Macomber stated we always
appreciate refinement and know it is in our best interest.
Mr. Hulett stated it is
disappointing not to have this report because part of the budget discussion has
to do with whether or not we are going to proceed with the repairs being
suggested for the pump stations in this fiscal year. I was hoping you had some recommendations for
us.
Mr. Colussy stated the
recommendations are going to be the same.
We wanted to make things clearer for you. The numbers will be the same. I do not foresee any changes. When you read the report, some items did not
match and pictures were out of sequence and did not match to the verbiage. What you have is correct. If you want to use something for budgeting
purposes, this is a good starting document.
Mr. Hulett stated what you have in
the report is critical for the operation of this District. The pump stations are in bad shape.
Mr. Colussy stated this is why we
wanted to give this report a second hard look.
You spent $30,000 and we wanted to make sure what was in this report was
correct.
Mr. Sobers asked will the revised
report be similar in format or substance?
Mr. Colussy responded mostly in
format and substance. The report itself
is correct but there are some typos and format errors, which might be
misleading.
Mr. Hulett stated you are saying the
basic conclusions and numbers for the estimated cost of repairs and items you
are suggesting to be fixed are not going to change. Correct?
Mr. Colussy responded they are not
going to change.
Mr. Sobers asked how will this
affect the passage of the budget?
Mr. Goscicki responded we allocated
more than sufficient funds in the capital budget because of this
recommendation. In fact, almost double the
amount was budgeted than what was in the report. We will determine what this means in terms of
the fund balance forward and the flexibility this gives you. We are in a good position with the loan and
you have the funds on hand to be able to proceed.
Mr. Colussy stated I have a map
showing the result of the tree removal.
Everything in green identifies what has been completed as far as the
tree removal program. We estimate the
District is 75% complete. We should be
completed with the entire District by the end of the month. We are currently performing some final
cleanup and touchups. At the very
latest, we should be 100% complete by the end of July. Other than this minor incident, this project
has been proceeding smoothly. Sunshine
is a complicated District and the contractor did a good job. When this happened, Stiles and AEM stepped up
immediately. We are pleased with what
has taken place. Unfortunately, there
was an incident, but they do happen.
Mr. Cranmer stated I spoke to an
official with the city who said they were happy with the progress and quality
of work.
Ms. Macomber stated that is nice to
hear.
Mr. Hulett stated having 75% done
and only one incident is good.
Mr. Selchan stated this is what we
hoped.
Mr. Cranmer stated someone who looks
authoritative can come into a backyard and say, “This is in our right-of-way
and are taking it down as we marked it and gave you ample time” and then finds
out a couple of months later it was not in our right-of-way. We do not know what is out there. Hopefully this is the only one.
Ms. Macomber stated we will keep our
fingers crossed.
Mr. Colussy stated the comments we
received from the residents have been positive.
Mr. Hulett stated I thought your
interview with the Sun Sentinel was good.
It was a nice piece of publicity for us.
Mr. Colussy stated thank you.
C. Superintendent
i. Discussion of SunTrust Loan Extension
Mr. Goscicki stated if you recall,
we took out a $5 million Line of Credit last year to be able to move forward
with these programs. One of the
decisions to be made was the loan repayment schedule. We put this item on the agenda prior to the
budget discussion because the loan repayment schedule determines what your debt
service is going to be, which impacts your budget. Ms. Pam Rower who is our Director of
Accounting Services for Severn Trent Services, who has been involved with the
financial alternatives as well as the budget preparation, will now discuss the
SunTrust loan extension.
Ms. Rower stated I provided the
proposed revised budget to the Board. As
an accountant, we are always revising to the last minute. In the proposed Debt Service Budget, we have
the options of a five, ten or fifteen year repayment. I recommend the Board choose the five year
option. Obviously the work has been done
and you do not want to extend the payments for a long period of time. Secondly, with a five year loan, there is no
requirement for a reserve in the bank.
My recommendation is to have the SunTrust Loan approved for a five year
term. I read the contract in detail and
we have the option to make early payments at any time with a 30 day
notice. I feel this is the best option.
Ms. Macomber asked are you
suggesting option 1?
Ms. Rower responded I am
recommending the five year term.
Mr. Sobers asked is there a
prepayment penalty?
Ms. Rower responded no. The only item on the table is the term of the
loan, so SunTrust can create an Amortization Schedule. The second phase is to look at the budget and
make internal decisions.
Mr. Goscicki asked do you have those
numbers?
Ms. Rower responded they are on page
three under Section 6Cii in your agenda package as part of the original budget.
On
MOTION by Mr. Hulett seconded by Mr. Sobers with all in favor the SunTrust loan
will be extended for a period of five years under the current terms and
conditions.
ii. Questions and Comments on Proposed Budget
Mr.
Goscicki stated the main reason for the change to the budget was to incorporate
the decision the Board just made. We may
have been somewhat presumptuous as we thought you might take our
recommendations so we plugged in the five year number. However, we can go back to our computer and
plug in another option if the Board so wishes.
Mr.
Hulett stated this was not unexpected based on our last meeting.
Ms.
Rower stated I want to focus on the expenditures because we have a zero balance
budget requirement. Therefore, the revenues
will become a function of what our expenditures are. In looking at the expenditures, the first
thing you look at is the debt service.
Those principle and interest payments are for the
In
back of the budget, there is an explanation of each item, except for the
supervisory fees, which are a calculated number. The attorney’s fee is based on the current
contract. The engineering fee was based
on what we anticipated for their hours for just the general engineering
contract, not for any special projects.
We based the annual audit on the signed engagement letter reflecting the
fee will not exceed $15,000. We took the
highest amount on the contract. It could
come in for a lesser amount as it is based on an hourly rate. Most items are similar to what you have seen
before. These are only the
administrative expenses. The field
expenses are for salaries and health insurance benefits. The only large items are repairs and
maintenance and operating supplies, which can be further broken out in the
backup.
Mr.
Sobers asked was the budget adjusted to include the postage increase?
Ms.
Rower responded yes, which is why the amount increased from $400 to $500.
Mr.
Sobers asked does this line item include Fed-Ex?
Ms.
Rower responded yes.
Mr.
Goscicki stated in terms of format changes, on the second page, the current
budget has a line item for capital projects.
However, when you look at the adopted budget for this year and your
expenditures, we allocated $879,000 for the Phase II tree removal. For next year, we did not propose any monies
for this line item. In this instance, we
pulled the capital out of the operating side of the budget and placed it below
the line. We looked at operating
expenses against the operating revenue, the fund balance and what is available
in the fund balance to pay for your capital improvement program. This will help you manage the fund balance
and make clear decisions on the type of reserve. We do not show the fund balance on the top
line as a carry forward surplus.
If
you go back to page one, on the revenue side, you will see we have no revenue
under the carry forward surplus. We felt
this was confusing to the Board because this number was not the total fund
balance. It was the fund balance after
we removed certain reserves in past practice.
The old budgets exposed what your total fund balance was because we
netted out required and recommended reserves.
We said “Let’s make sure we get a clear picture from this Board of your
cash position. We do this below the line
on page three to show what those fund balances look like. When we finalize this budget, we will have
the subtotals on page two.
Mr.
Sobers asked what prompted this change?
Mr.
Goscicki responded by managing districts like yourselves with ongoing capital
improvement programs and districts using reserve funds to fund capital. The old budget format did not give you or me
as the manager a good tool to work with.
It did not show what kind of money you actually have. It was difficult to tell with the old
format. In future budgets, we will
develop a five year program where you can evaluate not only your position this
year, but based upon what the engineers are coming up with as recommended
longer term capital improvements, how this program will work so we can manage your
money more effectively.
Mr.
Hulett asked if we want to move forward tonight with allocating $450,000 in
this fiscal year for the repair of the pump stations, will we have to add this
item under the capital improvement line item of the budget?
Mr.
Goscicki responded yes.
Mr.
Hulett stated this will show a reduction in the surplus balance of this loan.
Mr.
Goscicki stated exactly. Instead of
$879,000 as projected expenditures through the end of this year under the tree
removal line item on page two, you will have another line item for pump station
improvements. If you awarded the project
for $400,000, you will have this $400,000 placed under this line item, which
will reduce your projected fund balance at the end of this year by the
corresponding $400,000.
Ms.
Macomber stated this is very helpful.
Mr.
Hulett asked what is the timetable for the public hearing?
Ms.
Rower responded because this is a Water Control District, we met the timetable
in terms of the public hearing, which is scheduled for the July meeting. We have to send out TRIM notices to all
residents informing them we anticipated, based on the latest information, their
assessments will be $118. Once we send
out the TRIM notices on June 20th, we cannot exceed this amount by
more than 10% by law. This is what the
public hearing is for and why I looked at the budget in terms of the operating
portion and took the reserves separately.
We still can make decisions on the reserve but this is the operating
portion.
Mr.
Hulett stated you are trying to show us why the assessment amount is increasing
from $109 to $118.
Ms.
Rower stated correct. This is an 8%
increase.
Mr.
Hulett stated this will stay the same regardless of what we decide to do as far
as how much of the capital improvement program we want to get into.
Ms.
Rower stated correct, because we have a fund balance based upon what we are
anticipating of $4 million. With this $4
million, we can either pay down the loan or keep some funds in the
reserve. It gives us the option to have
money sitting in our fund balance or legally reserve it.
Mr.
Sobers asked has there been an established reserve percentage?
Ms.
Rower responded we can certainly have one.
Mr.
Goscicki stated some of the recommended reserves are to maintain two to three
months of operating expenses as an operating reserve when your reserves come in
from the Tax Collector. You need
operating capital at the beginning of the year at a bare minimum. Generally on a renewal and replacement type
of reserve, you want to have 5% of your capital investment. Several pieces of your equipment have a 20
year life. Therefore, you are reserving
5% each year to replace the equipment. You
want to build up certain reserves.
You
are currently in the position of going into a major renewal and replacement on
your Lift Station as you have the funds available through the loan. However, the policy decisions we will get
into as part of this budget and as you more forward into the year, will be
based on how much of this reserve you want to keep in place. What we are currently showing you is your
operating budget. If you want to fund
this budget at the current revenue, you will have a slight increase in your
assessments and a sizable amount of money in the bank. Therefore, you clearly have the option of not
increasing assessments and keeping them where they are currently by using
deficit funding or some of your reserves.
This is one option but not one we recommend to you today. We recommend you fund the current operations
with the current revenue and not tap into reserves. As we move forward during the year, we can
start looking at other options for you.
Mr.
Hulett stated I am confused. Are we
going to incorporate reserves into this budget to do the repairs on these pump
stations in this fiscal year?
Ms.
Macomber responded this is what they are recommending.
Mr.
Hulett stated we have been talking at the last couple of meetings about the
cleaning of the culverts. However, from
reading the report prepared by CH2M-Hill, these pump stations are in serious
need of upgrading and repair. I do not
understand why they were left in this condition or why these repairs were not
made. Aside from the fact, we need to
bring them up to standards and make them hurricane resistant and secure. I am disappointed we are not talking about
this tonight as it is an integral part of this budget, along with other
improvements.
Ms.
Macomber stated it may be appropriate after the meeting for you to go over with
the engineers what you suggested as we have a $4 million reserve.
Mr.
Goscicki stated I appreciate your comments.
On page three of the budget, we provided you a fund balance analysis
showing what we are projecting at the end of this current fiscal year and the
beginning of next fiscal year, which is $4,715,909. We recommend paying down $2 million of this
$4.7 million as we felt you did not need all of this money. You took out this loan because you needed to
move forward with your capital improvement program. Part of this will be the reimbursement from
NRCS. You received this reimbursement
and you have surplus capital. We
recommend you look at components of this fund balance and keep three months
working capital or $300,000 in the reserve; pay down $2 million of the SunTrust
loan; proceed with the canal dredging and repair of $850,000; pump station
improvements of $800,000 and budget $50,000 for monitoring stations and telemetry
for the pump stations. This gives you an
unrestricted fund balance of $715,909, which still gives you sizable working
capital to work with. We feel this is a
prudent amount and gives you some cushion.
You
could also pay down $2.5 million of the loan, which gives us $750,000. If there is another hurricane, this gives you
working capital and you will not have to take out another loan. Other districts we are working with do not
have $1 million in reserves to deal with unanticipated items. You are not relying on short term borrowing
agreements or carrying lines of credit you are paying fees on. You have working capital to earn interest on
and have for unforeseen emergencies.
Mr.
Hulett asked how does this work in terms of making some decisions tonight in
regards to what we want to show in our budget for next fiscal year for the pump
station improvements and canal dredging?
Ms.
Rower responded because the money is in reserve, we recommend you assess the
residents $118. We do not need to put
this money into the operating budget because we have the money on hand due to
the fact we took out the loan.
Mr.
Hulett stated I understand. You are
saying the Board at any point can make a determination as to when, where and
how much we want to assess based on the improvements without those numbers
being in the budget.
Ms.
Rower stated correct, because we have a reserve of $4.7 million. You can designate this money however you
wish. When it is designated, you can
change the amount later because we know we are keeping this large fund balance
in order to anticipate this.
Mr.
Hulett asked from an accounting standpoint, how do you explain to a resident
what we are doing next fiscal year in terms of our entire operation and the
fact we are planning to spend $450,000 to upgrade the pump stations and another
$800,000 for canal dredging and repair?
Mr.
Goscicki responded you will see a line item in the budget for capital
improvements, whether this number is $2 million or $5 million. For the final budget you will adopt at the
public hearing, we will pull those capital improvement programs into the
schedule so it will show on page two as the projected capital improvement
program, not as components of the fund balance on page three. Upon adoption of this budget, you will adopt
this capital plan. As Ms. Rower said,
this Board certainly has the option to change or modify this plan during the
year.
Ms.
Macomber stated these are expenditures and when we put in the fund balance, we designate
the funds for this purpose. We are
utilizing reserve monies, which we will build up over the years.
Ms.
Rower stated you would have built this up in other places. We knew we needed this money so it is sitting
in our bank account. It is still an
expenditure, however it is not coming from this years pay but from money we
borrowed or built up in reserves. This
will be a line item in the budget for next fiscal year. When you look at your budget, you are looking
at the total expenditures. If you decide
during the year to have a hydraulic system, which will cost $40,000, you are
allowed to move within line items by having a budget amendment.
Mr.
Goscicki stated what we are looking from the Board tonight is your agreement to
increase the assessment from $109 to $118 or a 10% increase and based upon the
capital improvement program for the next fiscal year, you will have
non-committed reserves of $715,000 to support this program.
Ms.
Macomber asked do you need us to vote on the first payment of the loan?
Ms. Rower responded it is not required at this time. We want to move forward and look at doing this in October. This budget assumes the payment is not due until November.