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, September 19, 2005 at 4:05 p.m. at the District Office, 10300 NW 11th Manor, Coral Springs, Florida.

 

            Present and constituting a quorum were:

 

            Bob Fennell                                                President

            Bill Eissler                                                   Vice President

            Glen Hanks                                                Secretary

           

            Also present were:

 

            Pete Witschen                                            Severn Trent Services

            Ed Goscicki                                                Severn Trent Services

            Dana Kaas                                                 Severn Trent Services

            Jean Rugg                                                   Severn Trent Services

            Janice Larned                                             Severn Trent Services

            Scott James                                                Severn Trent Services

            Mike Acosta                                              Severn Trent Services

            Joe Groseosy                                             Severn Trent Services

            Mel Entus                                                   Severn Trent Services

            Michael Pawelczyk                                     Attorney

            John McKune                                             Engineer

 

FIRST ORDER OF BUSINESS                         Roll Call

Mr. Goscicki called the meeting to order and called the roll. 

 

SECOND ORDER OF BUSINESS                    Approval of The Minutes of the August 9 and August 15, 2005 Meetings

            Mr. Fennell stated each Board member received a copy of the August 9, 2005 minutes and requested any additions, corrections or deletions.

            Mr. Eissler stated in the August 9th minutes, there is a breakdown of the services ST provides on page five.  Could you define what Severn Trent does with the General and Enterprise Funds accounting, finance and EDP?  The total amount comes to $320,000.

            Mr. Goscicki responded EDP is the data processing.  The $320,000 number is not correct.  The utility billing customer service costs $110,000 plus a deduct for our cost for use of Mr. Dan Daly’s time and other staff’s time, to come up with the management fee in the contract.  The total management fee under our contract is $219,000. 

            Mr. Eissler stated we never received a quote from Wrathell & Associates.  Is Mr. Doug Hyche still working for CSID?

            Mr. Goscicki responded 50% of his time is spent with CSID and 50% with NSID.  We asked Mr. Hyche to take on some additional responsibilities at his current salary while we brought Mr. Mel Entus on board.

            Mr. Eissler stated the rumor from the employee was his salary increased from $75,000 to $92,000.

 

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the minutes of the August 9, 2005 meeting were approved.

 

            Mr. Fennell stated each Board member received a copy of the August 15, 2005 minutes and requested any additions, corrections or deletions.

            There not being any, 

 

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the minutes of the August 15, 2005 meeting were approved.

 

THIRD ORDER OF BUSINESS                       Consideration of Drainage Permit Request Submitted by Amera 1800 Plus, Inc.

Mr. Fennell stated what concerns me is the site is designed with no emergency outfall and the zero discharge drainage system may flood during certain storm events.

Mr. McKune stated this is a common provision on all drainage permits when there is no discharge for the site.  The applicant’s engineer has made the determination the drainage system contained on site is adequate.  We do not dispute that.  The site is located along the old portion of the University Drive subdivision where there are many small commercial parcels.  We recommended approval of this permit based on the drainage provisions.  We noticed the building elevations as proposed, which this District has no say over, seems to be in conflict with the 100 year flood elevations in existence in this area of the District.  For our protection and the owner’s protection, I recommend we table this item until the next meeting to verify the builder understands what he may be getting into if in fact those elevations are not up to where they need to be.

Mr. Fennell asked if we do not control it, who does?

Mr. McKune responded the city, under a permit. 

            Mr. Fennell asked are you going to contact the city?

            Mr. McKune responded yes.

            Mr. Fennell asked does zero discharge drainage mean every time we get two inches of rain, we are going to have a flooded parking lot?

            Mr. McKune responded no.  Assuming the system functions as designed; the water will go down the storm drains, into the infiltration trenches and disappear into the ground water. 

            Mr. Fennell asked are you disputing whether or not there is adequate drainage?

            Mr. McKune responded no. 

 

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the drainage permit request submitted by Amera 1800 Plus, Inc. was tabled until the next meeting.

 

FOURTH ORDER OF BUSINESS                    Award of Contract to Interstate Construction Corp. in the Amount of $295,000 for Digester Modifications

            Mr. McKune stated on September 1st, one bid was received for fast track installation of blower systems for the existing digester from Intrastate Construction Corp. with a total base bid of $307,036.  The engineer’s estimate for this work was $285,000.  After review of the bids, we received an offer from Intrastate to reduce the amount of their bid by $12,036, as a result of negotiations with their subcontractors and suppliers.  A copy of the offer they made to the District to reduce the amount of the contract was provided to the Board.  We reviewed the bid and subsequent offer for the reduction and recommend the Board award the project to Intrastate Construction Corp. in the amount of $295,000.  This particular project is budgeted in the capital improvement program for $300,000. 

            Mr. Fennell asked what are these blowers for and why do we need them?

            Mr. McKune stated they will be adjacent to the existing concrete tank, which has been the subject of odor complaints.  The tank’s function will be changed from an anaerobic digester to an aerobic digester with the provision of flows mounted exterior to the tank along with, air piping systems, fusion headers, walkways, catwalks, concrete work and all the power necessary to tie into the existing control panels including the instrumentation and controls.

            Mr. Fennell stated the need for additional digestion has been vital in the treatment process to eliminate odors.

            Mr. Eissler asked do we need to build a new building?

            Mr. McKune responded we do not need a building for the new digester.

            Mr. Fennell asked are there any noise issues associated with the blowers?

            Mr. McKune responded the blowers are noisy but are in a self-contained enclosure with soundproofing on the interior.  There are DB restrictions on the equipment and we will do tests in the field.  If they do not meet code, we will add to the sound material inside of the enclosure.

            Mr. Eissler stated these are big blowers.

            Mr. McKune stated they are 125 horsepower blowers.

            Mr. Hanks asked was this one of the improvements the adjusters identified in your water treatment plant operation review from January?

            Mr. McKune responded yes.

            Mr. James stated Mr. Roger Moore identified it.  We only seconded the need for it.

            Mr. Fennell asked is the digester going to get us to the rotor thickener and then into the filter press?

            Mr. McKune responded yes.  It is going to greatly reduce odors and improve digestion efficiency and effectiveness.

            Mr. James stated it reduces your sludge volume.

            Mr. Eissler asked will it reduce sludge to any significant level?

            Mr. James responded as much as 10%.

            Mr. Eissler asked how many motors?

            Mr. McKune responded there is one unit.  There is another system under design, which will be a standby.

            Mr. Eissler stated this will save us money on perfume.  We spent $7,000 the first three months of the year for odor control.

 

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor contract for digester modifications was awarded to Interstate Construction Corp. in the amount of $295,000.

 

 

 

SIXTH ORDER OF BUSINESS                        Consideration of Encroachment of Easement for Maplewood Isle, Lot 63, Block E

            Mr. Fennell stated this item was discussed at the last meeting, however, the engineer had not reviewed the request.  There were several questions because it looked like the property had an encroachment until it was sold.

            Mr. McKune stated this lot is on a District waterway.  I provided the Board with a newer sketch from the surveyor indicating what is there and what is encroaching.  There is an existing platted utility easement within the lot on all three sides.  This is not a District easement and the District has no rights associated with it.  It is a standard utility easement required by plat.  There is a District maintenance area beyond the property line as is everything outside of the right-of-way.  The chain link fence is within the District’s maintenance area.  There also appears to be a small slab, which may have a corner extending beyond the property line but is insignificant.  A piece of wood deck extends into the District’s maintenance area.  We do not feel this is going to cause a problem to the District during their maintenance operations but we did include, in our letter of recommendation, a requirement whereby if and when it becomes a problem or burden to the District, we maintain the right to remove it at his expense.

            Mr. Fennell asked does the new owner know this?

            Mr. McKune responded the attorney at the last meeting represented the owner and understood this and even made this offer.  This is a term of the permit, whether he likes it or not.

            Mr. Eissler asked do we have an obligation to notify the new owner?

            Mr. Pawelczyk responded Mr. Lyles sent a form Encroachment Agreement to the attorney.  I checked last week and we had not heard back from him.  I am not sure how I can follow up on this.  Section 5 of the agreement contains the permit condition, indicating if the District requires any use of a portion of the encroachment or determines a continuation of such encroachment is not in the public’s interest, we can order them to remove the deck.  If they do not remove it, the District will remove the deck at their expense and place a lien on the property.

            Mr. Eissler stated it is only a small part of the deck.

            Mr. Hanks stated this is a platted utility easement for utilities.  Do we put utilities in platted utility easements?

            Mr. McKune responded only in unique situations.

            Mr. Hanks asked are we setting a precedent?

            Mr. McKune responded no.  We have done this in the past.

            Mr. Eissler stated I suggest we notify the new owner.

            Mr. Hanks asked has the property been transferred?

            Mr. Eissler responded last month it was pending.

            Mr. Goscicki stated our suggestion would be to give conditional approval based upon execution of this Encroachment Agreement by the current property owner. 

            Mr. Pawelczyk stated I do not know the status but we will follow up after this meeting.

 

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the request for encroachment of easement for Maplewood Isle, Lot 63, Block E was approved, based upon execution of the Encroachment Agreement by the current property owner and submittal of a legal description of the encroachment area.

 

            Mr. Hanks asked in regards to the drainage permit for University Drive, is there any provision in the Drainage Manual for existing sites at a higher elevation than required calculations?  For example, if the existing site is 12' and our flood contour is 11.5'.  Is there some flexibility in our permit manual?

            Mr. McKune responded I will check with our drainage staff.

 

FIFTH ORDER OF BUSINESS                         Consideration of Resolutions

A.        Resolution 2005-8 Appointing Pete Witschen and Jean M. Rugg as Assistant Secretaries

            There being no report, the next item followed.

 

B.        Resolution 2005-9 Removing Patti Powers as Treasurer and Appointing Janice Moen Larned as Treasurer and Ed Goscicki as Assistant Treasurer

            Mr. Goscicki stated Ms. Larned is our new Fiscal Manager and joined Severn Trent a couple of weeks ago.  In the past, Mr. Jim Ward was the head of our Fiscal Management Services as well as being involved in the City of Weston.  We recognized the need to hire someone to focus on our fiscal service to our clients.  Ms. Larned has been assisting on the accounting, budgeting, accounts payable and assessment roll.  We have added this item to a number of District agendas.

            Mr. Fennell asked what is the flow of approval on payments such as who signs off, what and where?

            Mr. Goscicki responded if it is an operational issue and field staff needs to order parts, equipments and supplies, they will submit their order and sign confirmation and receipt of their order.  The invoice would then be provided to the Accountant, Ms. Sue Walker who would compile the accounts payable list for invoices to be paid and forward to our A/P Department.  Instead of transferring paperwork back and forth, we would have our A/P Clerk meet with Ms. Walker once a week to review the invoices.  We had a problem last week where a new A/P person who came on board miscoded a few invoices between CSID and NSID.  However, Ms. Walker caught the errors before the checks were cut.

            Mr. Fennell asked how do the invoices get approved and by whom?

            Mr. Goscicki responded the authority runs through the Operations Manager, which at one time was Mr. Roger Moore.  Some of this authority is now delegated to Mr. Hyche.  Mr. Entus is also getting involved on a routine basis.

            Mr. Fennell stated I came from a large corporation where every level had a signature level.  For example, a $50 request to fill up a truck with gas, only requires a certain signature level.  Usually above a certain level, you need double signatures.  I am looking for a form stating the item ordered, who ordered it and the signature level.  When the item arrives, the invoice should be matched with the form.  Does this happen?

            Mr. Entus responded I am sure there is a required level such as $4,000 to bring items to the Board.  However, like any utility system, there are times when you have emergencies and cannot wait for a Board meeting.  I have such a situation, which I was going to discuss under the Manager’s Report.  Anything over $4,000 we have to obtain bids.  If there is an emergency situation, which would impact the production of water, there needs to be some means of waiving that.

            Mr. Fennell stated there is an approval and payment cycle and we were discussing about how those need to be separate. 

            Mr. Goscicki stated we created this separation by having a process where the field staff will initiate the requisition, it would go to accounting and when the invoice arrives, they match it up and it gets paid.

            Mr. Fennell asked is Ms. Larned going to be Treasurer?

            Ms. Larned responded yes.

            Mr. Fennell asked what is the role of the Treasurer?

            Ms. Larned responded I would have the authority to make properly authorized payments, which have been approved in the budget.

            Mr. Fennell stated every month we approve invoices.

            Mr. Hanks stated not only has it been requested, but received as well.

            Ms. Larned stated it is a matter of matching to confirm the appropriate signatures are in place with the appropriate approvals by the A/P department.  They would look for those signatures before paying the invoice.  Of course, they make sure there are adequate funds in the account before cutting the check.

            Mr. Fennell asked what does Ms. Walker do?

            Mr. Goscicki responded as the accountant, she verifies all of the records are here.  The invoices will come in, go to Ms. Walker, she will match them and provide the coding to each account.  The invoices go to accounts payable for independent review to make sure there is a properly executed invoice, signature verifying the equipment has been received and there are enough funds in the account and they will authorize the cutting of the check. 

            Mr. Fennell stated I like this process.

            Mr. Eissler asked who signs the checks?

            Mr. Goscicki responded the Treasurer.

            Ms. Larned stated you are authorizing at this point the signatory the bank will honor when the check is presented.

            Mr. Fennell asked will Mr. Goscicki remain as Assistant Treasurer?

            Mr. Goscicki responded yes, however, we can remove my name as Assistant Secretary and add Mr. Witschen.

            Mr. Eissler stated we need an Assistant Secretary.  Currently, Mr. George Keller is Assistant Secretary and we need to remove him.

            Mr. Goscicki stated each of the Board members are Assistant Secretaries.

            Mr. Fennell stated while we revise the resolutions, we will move to the seventh order of business.

 

SEVENTH ORDER OF BUSINESS                  Consideration of a Decision Structure

            Mr. Fennell stated we have been discussing for the last few months whether or not we should hire our own District Manager and keep Severn Trent on in another capacity.  Severn Trent was going to find additional people to fill these positions.  However, some of the Board members had other ideas. 

            Mr. Hanks stated I provided to the Board a list of action items we should consider in the future.

            Mr. Fennell stated at the last meeting, we interviewed Mr. Tom Good who is an excellent candidate.  Mr. Goscicki also has some candidates for us.

            Mr. Goscicki stated the Board asked us to discuss our proposal in terms of managing and operating this District and the value Severn Trent can bring to the table.  I suggest the Board forget about the history and look at how to move forward.  We put together a presentation and provided the Board with our statements of qualifications, which will be provided for the record.

Powerpoint Presentation by Ed Goscicki

·                    Introduced Ms. Jean Rugg, head of Administrative Department; Mr. Dana Kaas, head of Severn Trent North American operations; Mr. Mike Acosta, Senior Engineer - providing both engineering and operations support for the Florida region; Ms. Janice Larned, Fiscal Manager; Mr. Joe Groseosy, Vice President of Severn Trent – providing business development and client services; Mr. Pete Witschen, District Manager; Mr. Mel Entus, Consultant on operational issues for CSID and NSID and Mr. Scott Jones from the national technical services group.

 

            Issues:

·              Roles and responsibilities

§            Sharing of part-time employees

·              Continuity of management

§            District Manager turnover

§            Local knowledge

·              Cost of District management and operations

§            Services provided and how it relates to the contract

§            Value of dollars paid

§            Capital improvement program

§            Savings in relation to management services and operations

·              Cost versus quality of service

§            Guaranteed quality of service to current customers and future customers

 

            Roles & Responsibilities:

·              General management – Severn Trent responsibility

·              General accounting – Shared between Severn Trent and CSID

·              Utility billing – Shared between Severn Trent and CSID

·              Human resources – CSID responsibility

·              Records management – Severn Trent responsibility

·              Operations - CSID responsibility

·              Budgets - Severn Trent responsibility

 

 

            Management of District:

·              Contract employees

·              CSID employees

·              Part-time employees shared with other Districts

§            Employees shared with other Districts on operating side:

o       Karen Ellis – Finance

o       Steve Murrary – IT

o       Jean Rugg – Records

o       Jan Zilmer – Human Resources

o       Dan Daly – Utility Billing

o       Customer Service Reps (3)

o       Doug Hyche – 50/50 CSID & NSID

§            56 employees within the entire Districts, of which 12 are part-time employees

·              Severn Trent employees

o       Pete Witschen – District Manager for CSID & NSID with 30 years experience, 15 years experience as Assistant City Manager in Ft. Lauderdale

o       Mel Entus – Interim Operations Manager with utility expertise

o       Mike Acosta & Scott Jones – Licensed Professional Engineers providing engineering support

o       Janice Larned – Fiscal Manager assisting in capital planning and programming and with engineer on functional side

·              Senior Operations Manager

 

            Severn Trent’s approach to management and operations of CSID:

·              Create one unified team for management and operation of CSID

·              Provide clarity of purpose and values

·              Offer employment to all existing CSID full and part-time employees at comparable wages and benefits

·              Benefits of a regional network of 200+ utility operations professionals

·              Integrate the corporate resources of Severn Trent

·              Guaranteed multi-year fixed cost & performance

 

            Severn Trent’s fixed fee of $219,000 includes:

·              Saving the District a minimum of $350,000 plus opportunities for additional savings

·              Savings of $150,000 in the management of the District

·              Management

·              Accounting

·              Records management

·              Project Manager

·              Taking CSID employees on as Severn Trent employees

·              Complete fiscal and records management and IT services

·              Utility operations

§            Guaranteed performance, including meeting the permit requirements

§            All staff

§            Chemicals

§            Maintenance

§            Ownership of all vehicles (assuming leases or purchasing new vehicles)

§            Sludge disposal

§            Laboratory services

§            New qualified management in place

§            One unified team with consistent goals and value, focusing on providing excellent service to CSID

·              Utility operations support

§            On-Site staff

§            Capital planning

§            Process control

§            Safety and asset protection

§            Asset management

§            Staff development and providing opportunities for staff to grow and improve

§            Guaranteed cost and performance

 

            Mr. Hanks asked is there a savings in security?

            Mr. Goscicki responded it is not part of the $350,000 savings.  I will provide copies of this presentation for all Board members.

            Mr. Hanks asked how would you identify issues needing action we do not know about?

            Mr. Goscicki responded we are assuming a guarantee for the operations and therefore have significant motivation to make sure we meet all of the permit requirements, stay within a fixed dollar budget, the capital improvement program is in place and adequate to meet the goals of the organization.  We structured a contract, which is self-motivating for us to perform to our client needs by building in those constraints.  This is a positive motivator for us and positive assurance for you. 

            Mr. Kaas stated we have been to the plant and it is now operating in compliance.  If we went to the plant and found the equipment was not maintained and you were not in compliance, we would have a caveat to assess what needs to be invested.

            Mr. Goscicki stated one of the items we typically write into all of our operations contracts is a requirement for us to work with the District Engineer to develop an annual capital improvement program, update the program on a year-to-year basis and develop a realistic renewal and replacement budget to include the capital improvement program.  It is a much more detailed contract for our operating services than on the management side and we give you some specific details on what we are going to do and how we are going to get it done.  Communications is a big part of our operating contracts, establishing the strong formalized communications plan with the Manager and more importantly with the Board in terms of how you are kept appraised of what is going on, our needs and our activities.

            Mr. Hanks asked what would not be included in the base line contract?

            Mr. Goscicki responded we would probably exclude energy.  We included an energy cost to give you a light comparison of dollars but typically we would pull out your utility power cost because you can get utility without paying taxes, but we cannot.  We can purchase chemicals with no tax because it is used for water treatment but we cannot get power for no cost.  We also create a maintenance budget by looking at your historical maintenance activities and bring in our maintenance management expertise and look at what a good maintenance management program should look like, the cost in terms of your current facility and establish a maintenance budget in the contract.  We would look at the amount of money in our contract for maintenance and track all of our maintenance activities on a monthly basis and bill against the budget.  If we do not spend all of the monies allocated in the budget, it would be saved to the District.  However, if we need to go over the budget, we would come back to the Board and say, “we went over, here is what caused the variance and here is the additional maintenance activity”.

            Mr. McKune stated there are also approval limits of $5,000 per item, which would have to come before the Board for approval

            Mr. Entus stated this is very much like Change Orders.

            Mr. Hanks asked how would Severn Trent review Mr. McKune’s Change Orders and present to the Board for approval, rejection or referral without having an engineer in what used to be Mr. Moore’s position?  With the ongoing construction projects, there needs to be someone from Severn Trent monitoring Mr. McKune and his firm’s operations.

            Mr. Goscicki responded if you have a construction contract and there is a Change Order proposed as a betterment to the project, the question is whether we move forward with the construction Change Order.  This is a function we would get Mr. Acosta involved with the area Operations Manager to work with Mr. McKune.  We look to the engineer to validate the cost but in terms of its impact on the operations of the District, we would direct Mr. Acosta and our Operations Manager to review those activities.  If it became a specialized issue, we could bring in Mr. James or other members of our organization from an asset management perspective.  In terms of reviewing the engineer’s contract, this falls more to the manager in terms of whether they are proposing an amendment to their contract to cover additional costs, which our manager would negotiate. 

            Mr. McKune stated it is a question of whether we would undertake this risk or not. 

            Mr. Goscicki stated the construction side is the big issue.  The engineer’s fee on the construction side is straightforward.  Once a decision is made to move forward with the construction Change Order, the involvement needs to be at a much higher level in terms of getting the right people involved, which is where the big dollars are.  The engineering fee is a much smaller percentage but still needs to be reviewed.  This same dialogue needs to take place in deciding what projects go forward.

            Mr. Hanks asked do you foresee CH2M Hill’s role to be expanded under this scenario?

            Mr. Goscicki responded I see it staying the same.  I am not seeing any change in their role.  They are still the engineer of record for the District and responsible for the design and manage the construction.  Our job is to manage their contract to make sure they are doing their job on the management side and bringing in additional expertise.  We are not trying to diminish or increase their role but bringing additional value to the team to get better decisions.

            Mr. Hanks asked does Mr. McKune agree?

            Mr. McKune responded I do not foresee any change.

            Mr. Hanks asked what about the eight employees we share?

            Mr. Goscicki responded we would employ them.  Our goal is to make them full-time Severn Trent employees.  We would need to go back to NSID and work out some arrangement with them to get them off of the NSID payroll and be able to charge them appropriately for the services we are providing.  This is a risk we are willing to take.

            Mr. Eissler asked is the Sunshine Involvement District involved.

            Mr. Goscicki responded Sunshine gets involved on some of the drainage side and we have some shared employees.

            Mr. Eissler stated three of our people get three different checks.

            Mr. Witschen stated the services of Mr. Acosta, Mr. Jones, Ms. Karen Briden, Mr. Charles Bailey, Mr. Robert Dick, Mr. Frank Branch and Mr. Bruce White are not an additional expense.  They are part of our package.  If you use them once a year, that is fine or you can use them once a month.

            Mr. Groseosy stated we have not provided a performance bond.  Obviously we are more than bondable and would be happy to do so for the cost.  All of our employee issues, i.e. workers compensation, health benefits, 401K, pension are all on our side of the equation.  When we offer employment to existing employees of the city or District, we bring them over with their current years of seniority.  There are some minor adjustments in your benefits package versus ours but we have 14,000 employees worldwide and 5,000 in the United States and we are comparable to the industry in terms of our benefits package and pay rate. 

            Mr. Hanks asked have the employees been apprised of this proposal?

            Mr. Goscicki responded yes.

            Mr. Hanks asked do you have an alternate plan?

            Mr. Goscicki responded we always have alternative plants.  We are here to serve the District.

            Mr. Hanks asked how many utility plants are you involved in?

            Mr. Witschen responded I am personally involved in four utility plants and in 50 or 60 other plants as needed. 

            Mr. Hanks asked are they mostly in South Florida?

            Mr. Witschen responded they are exclusively in Collier County. 

            Mr. Goscicki stated part of Severn Trent’s business is utility operations and transitioning from government owned operations to functions we perform on a regular basis.  We have a structured process in place utilizing our national and local resources.  We utilize the concept of a transition team, made up of people not involved in the day-to-day management.  Mr. Jones would be part of our transition team and supported by a maintenance management expert from Indiana, our Safety Manager from Houston, our laboratory compliance expert from Indiana and our Human Resources Manager to work with the employees.  The transition team would conduct meetings with the employees and meeting with the employees spouses.  It is one thing to talk with the operator on duty and explain the benefits but if their spouse is managing the benefits program, you have not conveyed the message.  Not only do we do onsite meetings but meetings off site after normal work hours to bring the family in to answer questions.  We then bring in the other technical resources to work in regards to the maintenance program, safety program and improve process operations with separate teams so the day to day operations are not impacted.

            Mr. Groseosy stated the most important item in the transition is the focus on the people to make sure they know they have a job, their pay is not going to be hurt and they have good benefits.  It makes the entire transition 100% better.

            Mr. Fennell stated unfortunately your history has not been good for the past eight months.

            Mr. Hanks asked does this include the General Funds or just the Enterprise Funds?

            Mr. Goscicki responded the entire program.

            Mr. Fennell stated the proposed structure was the structure.  The problem is we took a large company structure and welded it to our small company structure.  There is a fair amount of discord with these employees and there are going to be some real issues.  Did Mr. Zilmer, Mr. Daly and Ms. Walker work for you at one time?

            Mr. Goscicki responded I do not think Ms. Walker was ever a Severn Trent employee but Mr. Zilmer and Mr. Daly were.

            Mr. Fennell stated we are going back to an old structure, which worked well for Severn Trent but not for our small company. 

            Mr. Kaas stated I mentioned at the last meeting that the prior administration with Mr. Rich Hans were focused on District management.  This was their expertise.  The management of the operation side was not important to them.  We now have a situation with the operations, which have taken place in Florida and changes within our own management structure to now be in a position to provide both of these services in a first class way because we have the strength of Severn Trent operating services and management services under one umbrella.  This is why it will work this time and be effective.

            Mr. Groseosy stated I ran the acquisition strategy for Severn Trent since 1992.  The objective in the acquisition of Moyer & Associates was far from our core strategy, which was to extend the management services business into water, operations, sewer services and equipment as a base business as yet another way to sell the services of Severn Trent globally.  The difference between then and now is the three employees, which were underutilized and had multiple jobs.  If you are concerned about whether these people may say “we are not interested in working for Severn Trent”, I disagree with you.  I do not think you can build a $5,000,000 a year operational program on three individuals. 

            However, our commitment is to offer a plan to these people to try to bring them back into our company and use their expertise under a set of values, objectives and goals we set as a company, not as individuals.  I heard the concerns of Mr. Goscicki and Mr. Kaas over the last couple of weeks in regards to management issues and people leaving our company.  Your issue about disjointments existing today result from the acquisition, which occurred many years ago.  In our day-to-day business, we work with the city or Board’s engineer or the city or Board’s attorney every day rather than having a manager with some consultants or subcontractors under us for one piece of the business.  We are offering you this benefit of scale to bring everyone under one management structure and one organization to insure everyone is on the same program. 

            Mr. Fennell stated the one fear every one of them had was to make this proposal.

            Mr. Eissler asked did Ms. Ellis leave the company?

            Mr. Goscicki responded no.  Ms. Ellis is still a Severn Trent employee but has relocated.  She is now telecommunicating and will continue in this role.  We do not intend to lose Ms. Ellis.  She is the third individual in our accounting staff who telecommutes.  The furthest one is in North Dakota.  I received an email from Mr. Zilmer where he states, “it looks like what we feared most is what we really needed” in regards to the new management team and what they were fearing in terms of Severn Trent’s involvement. 

            Mr. Fennell stated our problem is the employees are overpaid by their current combined salary levels from different Districts.  How are you going to contend with this?

            Mr. Groseosy responded we continuously study the markets and have a study to refer to.  We are looking at their capability, their ability to serve our company and our clients and making them an offer to join our company.

            Mr. Fennell asked would you make them offer at the value you think they happen to be at as opposed to what they are currently making?

            Mr. Goscicki responded we have a few employees who are beyond the salary ranges of what we have for these positions.  We would bring them in at their current salaries.

            Mr. Eissler stated the Accountant is a two-year college graduate but not an Accountant.  She is a bookkeeper making over $100,000 a year and cleans the building.  You made an offer to them you cannot possibly sustain.

            Mr. Goscicki stated you are absolutely right.  Our commitment is to ease the transition.

            Mr. Eissler stated we give you $8,900 a year per employee for benefits.  I do not know if your benefit package is more or less.  I doubt if it is more.  When you talk to these three employees, their qualifications are not going to come up to par.  For what we are paying, we are getting a bargain.  You are not.  Lets be honest.  I know it is not going to happen and it cannot happen.  However, these are issues, which should have been corrected years ago.  We need to come to some agreement as to how we make changes.  These employees are not ready for retirement.

            Mr. Goscicki stated we are ready and willing to take on the responsibility of dealing with these employees.  We are not going to say to them, “here is the deal, take it or leave it”.  We are going to work with them.

            Mr. Fennell stated this is what it comes down to.

            Mr. Goscicki stated we are giving them an initial offer to bring them in on a comparable level.  We are not going to have an Accountant managing three Districts.  We will have an Accountant managing seven Districts, which is the workload most of our other Accountants have.  This person will add other value to us and make use of their skills.  If this individual cannot perform at this skill level, this is our problem.  We are not going to turn around and say, “you cannot work here anymore”.  Our goal is to find the right roles for the right people.

            Mr. Eissler stated your heart is in the right place but these need to be sound business decisions.

            Mr. Kaas stated there are three or four people whose compensation is inconsistent for the rolls they are filling.  I realize there is no easy answer. 

            Mr. Eissler stated this is a good point. 

            Mr. Groseosy stated I ran the Utilities Department for 26 years and had 100 employees and a $22,000,000 Operating Budget.  What aggravated me more than anything was paying for something I did not get back in value.  I am an interim employee but the bottom line you are getting 100% for what you are paying.  Severn Trent has a good reputation as I have seen some of the plants they have operated.  In areas they have taken over operations where there have been these types of problems, even on a much bigger scale, they have done well and saved money.

            Mr. Eissler stated in all honesty, it would take the burden off the Board and be Severn Trent’s problem to solve. 

            Mr. Witschen stated I can tell you who the best and hardest workers are and who is overpaid and underpaid.  I have been through situations where you have good employees but they are getting paid over the market value.  It is how you deal with them, whether you transitioned them out appropriately and whether you can find them another job.  They may not like it, but they will respect it. 

            Mr. Fennell stated we can use a manager but have not officially pursued anyone for this job.

            Mr. Hanks stated in looking over the contract with Gary L. Moyer & Associates, there were some provisions about hiring and firing.  If we are not getting our monies worth with certain individuals who are outside of pay ranges, why haven’t we done something about it?

            Mr. Goscicki responded it has certainly come up in the last year since I have been involved.  It is clearly an issue this Board has dealt with.

            Mr. Fennell stated we have not dealt with these employee costs.  This was in the previous organization.  These people were asked to be transferred and for whatever reason were transferred into this organization.  Their pay levels were set up but Severn Trent was not aware of what they were.  You set them up for us paying them this much, NSID paying this much and someone else paying them.  It did not come from the Board.  I appreciate you willing to take this project back.

            Mr. Kaas stated this was simply not a matter of them being paid above scale but the increases they were receiving every year.

            Mr. Goscicki stated you are dealing with three individuals who have been 15 to 20 year employees.  We fully recognize this is an important issue we need to deal with. 

            Mr. Fennell stated what they are doing is not anything different than Severn Trent ST is doing.

            Mr. Kaas stated this organization was under Mr. Gary Moyer.  We purchased it and no one wanted to change it until Mr. Goscicki came along.

            Mr. Fennell stated those circumstances happened after the sale, not before.

            Mr. Goscicki stated they were always part-time employees.

            Mr. Eissler stated when Mr. Moyer was here it worked well. 

            Mr. Fennell stated I would like to hire an on-site manager and utility operator and give them three to six months to get a feel of the operation.  I like the fact we have additional accounting strength.  This was a real issue above and beyond anything else.  You still owe us and have owed us the big company benefits and we have not received those benefits.  Frankly, we did not see staff very often and should have seen a lot more.  We like local employees but we did not have much depth from the standpoint of quality, inspection and dealing with agencies.  We should have also received clarity of purpose and values in terms of what we are about, trying to do and where we are going.  We lost it mainly through the management than anything else.  We also should have received the corporate resources of Severn Trent.  The multi-fixed contracts and comparable wages and benefits are interesting concepts but I am looking for other alternatives.  The likelihood is the three employees will end up terminated one way or another.  There must be a more rational way to deal with shared employees.  I am looking for us being a smaller District with smaller management and the need for some of the functions you can provide. 

            Mr. Acosta stated this is Plan B, which we feel is a stronger plan.  We have several locations throughout the country where we provide a District Manager with staff still with the utility provider.  To be truthful, it is not efficient.  There is no impetus to change.  Mr. James identified changes required seven years ago, which did not happen.  We found this at other locations where we have taken over the entire responsibility, like we are proposing here.  It is incumbent upon us to do so because we will not realize the efficiencies we are committing to at the time we make the changes.  We operated your system but did not provide everything we advertised.  I do not believe you are going to see the change necessary to realize the $350,000 in savings.  One of the items we will likely pull out is the electricity because of the cost.  If we operate this plant more efficiently, 125 hp blowers may be put on-line without any increase in usage.

            Mr. Hanks stated if you do not operate the plant, we bare the cost.

            Mr. Acosta stated that is correct.  We have mechanisms in contracts where we guarantee a certain performance.  This is part of what we have to bring from a technical resources standpoint. 

            Mr. Groseosy stated you have us in a situation where we are your representative out in the field.  You are saying to us, “we want you to manage our Utility District”, inclusive of the management of the utility operations and of a human resource section, utility billing section and accounting section.  These 40 hour employees work for you and look towards you as their leader and us as their manager as opposed to their direct employer.  It seems to me the problem is with these three employees.  While we can bring this out to the field, in the role you have us in as your manager, we are not able to instill into those employees, the fostering of our values because they are not our employees.  We are just their manager.  The engineer can go to those employees and make a recommendation but he is not going to sell the corporate values of CH2M Hill to them. 

            In the focus of what the future is, both for this utility as well as these employees, all of the employees in the Utility District are offered a further opportunity to grow their personal depth in a company as ours because they cannot grow with you.  You are never going to grow bigger as a CDD.  In Severn Trent where there are 14,000 colleagues in the same business, they have the opportunity to grow and develop in the business of providing utility, water and sewer related services.  That is where we create good morale and team building and have people feel good about working for a company as well as delivering the service.  We are about change in taking these utilities over, transitioning over 2,000 employees, merging these businesses into ours and fostering development.

            Mr. Fennell stated you brought up an important point, which is whether our employees are working for Severn Trent or CSID.  I want them to work for CSID.  Therefore, this is a real issue.  I was hoping you would be able to take my viewpoint of fostering the identity of the CSID employees as opposed to them having to become a Severn Trent employee.  This is an issue and a strong one and one we have been facing and various people have had a problem with.  When people were fired from Severn Trent, it affected my employees morale.  I can see now where part of the thinking came from.  It came from Severn Trent.  I want you to run my company, not to recruit.

            Mr. Kaas stated none of these employees were let go.  They all resigned.

            Mr. Fennell stated you missed the perception.  The perception is who they worked for and what was happening within the company.

            Mr. Hanks stated I spoke with Mr. Witschen this morning and said to him, “it does not matter what the facts are.  What comes into play is what people’s perceptions are.”  What Mr. Fennell is talking about is the perception of the company.

            Mr. Kaas stated I take your point but by the same token, I will not perpetuate this perception.  I am not buying into it but I understand it.  We all hear what is being said today but are not walking out the door with the same conclusion or direction based on our perception of what was said.

             Mr. Fennell stated since you are in charge of acquisitions, it is your job to try to take us over.  Mr. Kaas tried to make the argument of, “unless you work for Severn Trent, we cannot do the job we should be doing.

            Mr. Groseosy stated that is not true.  If at the end of the day you want a CSID employee and manager to come in and manage the District, we have to look at the contract very closely and determine what our authority is.  CSID needs to start running their utility like a business and develop a firm HR strategy and firm set of mission statements for its employees.  You can adopt ours and work by those, but if at the end of the day, your mission is to build an organization, have employees and manage them, whether or not it is the business we are in, the executives will make this choice.  However, if we are going to foster it, we need to make sure our contract allows us to do so.  I think there is some misunderstanding in terms of our management authority in terms of the people working for you versus who we are managing.

            Mr. Fennell stated there is no misunderstanding other than you making mistakes and not being a good manager or having a turnover of managers.  The contract allows you to hire and fire, not indiscriminately.  The real issue was not with CSID.  All of the issues had to do with issues brought forth by Severn Trent.  I am not out to get Severn Trent.  In fact, I would rather see you fade to the background and have the employees think they work for CSID and their loyalties lie here.  I want them protecting our canals and waterways because I live in this District.  I do not intend to create a great multi-mega company with 2,000 employees more a year.  What I want is good sewer systems, water systems or my canals to flood.

            Mr. Goscicki stated the issue here is the difference between who the employees work for and who they serve.  Our goal is to have all of our employees serve CSID.  We think we can provide better service and create a better service mentality to the Board and more importantly the customers of the District with them being our employees.

            Mr. Fennell stated I am looking for you to take this same attitude but think of them as building up a CSID team that is unbeatable. 

            Mr. Eissler stated one of the main issues was the minimum savings of $350,000 a year.  This is a major point you should take into consideration.

            Mr. Fennell stated I think this can be done.

            Mr. Hanks stated there are other ways of approaching this.  One would be to have a District Manager who works directly for the CSID and rely on services provided by Severn Trent as a consultant on a contract basis to perform the safety audit, operational analysis and accounting as well as maintaining the CSID staff. 

            Mr. Kaas stated you are suggesting a situation in which the only employee who would be a Severn Trent employee would be the Operations Manager.

            Mr. Hanks stated not on the operational managing side.

            Mr. Kaas stated if the District Manager is going to be a CSID employee, the only role I see left under the current arrangement is one of being the Operations Manager.

            Mr. Hanks stated I see three or four employee positions.  In some respects CSID is overstaffed but the positions are not readily there.  I am looking at the services provided.

            Mr. Kaas stated I am trying to understand the role of Severn Trent.  It seems to me you are proposing only having one employee from Severn Trent.

            Mr. Hanks stated I was not proposing one employee.  I was proposing procuring services.  We would look to Severn Trent to come in and do a safety audit of our plant or an analysis on the operational efficiency of our plant.  

            Mr. Kaas stated we provide this as part of our scope of providing contract operations but also adhere to carry it out.  We commit to being able to do so because this is how we save you money.

            Mr. Witschen stated I have been on the job for two weeks and do not profess to be an expert.  Whether you have Severn Trent or CSID, as the District Manager, the Board controls the District.  I am going to bring you the best management advice.  Hopefully the troublesome employees are the least of what I have to worry about.  There are probably going to be efficiencies offered.  If this Board decides to change the structure, please do so.  I am going to feel empowered by you to bring you the advice you paid for and will develop this relationship with you.  This started a week ago.  You will see me in the office on a regular basis and at these monthly Board meetings.  You are paying me for my management advice and you will receive it.  Hopefully I will be able to develop a trust in you that I have been able to develop in other Boards.  I plan to meet with you to see if there is a common ground to move forward.  When the contract says the manager is empowered with the ability to manage and not irresponsibly, I am going to presume this is what you want me to do.

            Mr. Fennell stated we need to get our new Operations Manager approved by us officially because we currently have a contract with Severn Trent.

 

On MOTION by Mr. Fennell seconded by Mr. Hanks with all in favor Mr. Pete Witschen was appointed District Manager for CSID.

 

FIFTH ORDER OF BUSINESS                         Consideration of Resolutions

A.        Resolution 2005-8 Appointing Pete Witschen and Jean M. Rugg as Assistant Secretaries

 

On MOTION by Mr. Fennell seconded by Mr. Hanks with all in favor Resolution 2005-8 Appointing Pete Witschen and Jean M. Rugg as Assistant Secretaries was adopted as amended.

 

B.        Resolution 2005-9 Removing Patti Powers as Treasurer and Appointing Janice Moen Larned as Treasurer and Ed Goscicki as Assistant Treasurer

            Mr. Goscicki stated the reason for appointing Ms. Larned as Treasurer and me as Assistant Treasurer is because some banks require two signatures on the checks.  However, 99% of the time, Ms. Moen will sign the checks.

 

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor Resolution 2005-9 Removing Patti Powers as Treasurer and Appointing Janice Moen Larned as Treasurer and Ed Goscicki as Assistant Treasurer.

 

            Mr. Fennell stated we solved the immediate structural problems, but have not solved the longer term ones.  I need to review and understand where this money falls.  I am not so sure this money is not there.  We are in a situation where we have overpriced employees and we need to figure out how to solve this matter.  I am sure they realize the issue.

            Mr. Eissler stated they are well aware of it.

            Mr. Goscicki stated as part of this year’s annual salary review, we are bringing in a matrix salary structure.  One of our jobs is to administer this salary program.  The matrix structure will look at an employee’s current salary and performance and utilizes both factors to determine their merit raise.  The philosophy is if you are already at the top end of your salary range, above average performance is an expectation.  You should know your job very well if you have been doing it for 15 to 20 years.  Therefore, the merit increase would be less for a good performance at a high salary.  We will bring forward salary ranges for each of these positions.  For example, if you are at the low end of the salary range, performing very well, you would get a bigger raise then if you were at the top end of the salary range and performing equally well percentage wise.

            Mr. Fennell asked do we need an Interlocal Agreement with NSID?

            Mr. Goscicki responded you do not need one because they are not your employees.  They are only part-time employees.

            Mr. Hanks asked if we were to hire them full-time, would we need an Interlocal Agreement?

            Mr. Pawelczyk responded yes.

 

EIGHTH ORDER OF BUSINESS                     Staff Reports

A.        Attorney

            Mr. Fennell stated I just signed the Statewide Mutual Aid Agreement.  I would like to make sure Mr. Witschen has a copy of this agreement and we have the appropriate forms for him and others so when an emergency arises, the District Manager does not need to search for forms.

            Mr. Pawelczyk stated we sent the agreement into the state.

B.        Engineer - Monthly Water & Sewer Charts

            Mr. Fennell stated we need something to look at each month to tell us whether we are doing good or bad and providing good service to our customers. 

            Mr. Eissler stated what we are looking at is minimum/maximum on where we are in reality.  We are always in the middle.

            Mr. Fennell stated if you have any suggestions, we are open to hearing them.

            Mr. Goscicki stated we can make these flowcharts more readable and meaningful to the Board.  I think you have good information on the water/quality side.  One of things you want to know is what the water quality your customers receive.

            Mr. Eissler stated this is good information and tells us what we need to know.

            Mr. Goscicki stated you are currently good on the color side, soft on the hardness side and elevated on the Ph side.

            Mr. Eissler stated we could be much better on color. 

            Mr. Goscicki stated the water has a yellow tinge. 

            Mr. Eissler stated some day we can improve the color with a different system.  We are doing well with the hardness.  The Ph is fine as we always tend to run high.  Eventually you are going to wear out the enamel on your teeth.  We should strive for better color and improve the Ph.  We certainly meet all of the standards.  It should level out eventually.

            Mr. Fennell stated I would also like suggestions on the drainage.  We do not have a chart.  We need something telling us we are in good shape.

            Mr. Eissler stated one of the high points is the drainage.

            Mr. Hanks stated one concern I have is when we pre-pump for large storm events, such as Hurricane Katrina, we should see where the high water line is.  Can we pump down 2 to 3' because we did not receive a great deal of rain?

            Mr. Eissler responded you cannot forecast that.  I am glad we lowered the water because the canals are full.

            Mr. Fennell stated a week later the water was back up.  Where did the water come from?

            Mr. Entus responded we have quite a bit of capacity in those pumps.  Take a close look of what the potential rainfall is and see where it falls relative to the criteria we established.  The west outfall canal on Riverside Drive was down 3'. 

C.        Manager

            There not being any, the next item followed.

D.        Complaints Received/Resolved

            There not being any, the next item followed.

 

NINTH ORDER OF BUSINESS                 Supervisor Requests and Audience Comments

      There not being any, the next item followed. 

 

TENTH ORDER OF BUSINESS                 Approval of Invoices

 

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the Water and Sewer Fund invoices for August, 2005 in the amount of $1,377,581.39 were approved.

 

            Mr. Eissler stated I provided a letter to our attorney for comments next month.

            Mr. Entus stated the Board approved a well rehab by GIC Water Systems on well number two.  When the contractor went to repair the canal, he noticed the bottom part of the shaft fell down inside of the well casing.  I have a Change Order in the amount of $5,920 in order to pull the shaft out, fabricate it and redevelop the well.  This occurred on August 18th. 

            Mr. Hanks asked was this one of our older wells?

            Mr. Entus responded yes.  This is not critical.  We are operating without it now but you do not want to be without a well.

            Mr. Fennell stated this is typical.

            Mr. Entus stated we have used this contractor in the past.

 

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor the Change Order to GIC Water Systems in the amount of $5,920 for Well 2 was approved.

 

            Mr. Fennell stated I would like to thank Severn Trent for giving us this presentation.  Frankly, you stepped up and gave us your best shot.  We understand where you at and what you are proposing and we will give it due consideration.  Welcome to CSID!

 

ELEVENTH ORDER OF BUSINESS               Adjournment

 

On MOTION by Mr. Fennell seconded by Mr. Hanks the meeting was adjourned at 6:35 p.m.

 

 

 

 

                                                                                                                                                      

Glen Hanks                                                               Robert Fennell

Secretary                                                                   President