MINUTES
OF MEETING
CORAL
SPRINGS
IMPROVEMENT
DISTRICT
The regular meeting of the
Board of Supervisors of the Coral Springs Improvement District was held
Present and constituting a quorum
were:
Bob Fennell President
Sharon Zich Vice President
Glen Hanks Secretary
Also present were:
Dan Daly Interim Manager
Ed Goscicki Co-Manager –
Dennis Lyles Attorney
John McKune Engineer
Jane Early CH2M-Hill
David Green CH2M-Hill
Randy Fredericks Field
Supervisor
Doug Hyche District Staff
Mona Slaughter
FIRST ORDER OF BUSINESS Roll
Call
Mr.
Goscicki called the meeting to order and called the roll.
SECOND
ORDER OF BUSINESS Organizational
Matters
A. Oath
of Office for Newly Elected Supervisors
Ms.
Slaughter being a Notary Public of the State of
Mr.
Fennell stated I know Ms. Zich is interested in resigning. I was hoping some candidates wanted to take
your place but unfortunately this has not occurred. We will look for someone. However, it will help us if you stay until a
replacement is found.
Mr.
Daly stated we can place a notice on the website saying this District is
actively seeking candidates.
Mr.
Fennell stated this Board has a lot to be proud of from the standpoint for the
last six months; we have gone through numerous things with the District. What the Board should be proud of the most is
the hurricane cleanup. I think we have
done a good job. The reason why no one
is here is because this is a strong Board and is respected by the community. Thank you all.
B. Election
of Officers
Mr.
Fennell asked can we change the officer structure at any time?
Mr.
Lyles responded typically the officers are elected after the landowner’s
election.
Mr.
Fennell stated at this time, I am probably better off serving as President.
Mr.
Hanks stated you are better suited for the political aspects.
Mr.
Lyles stated if there were to come a time when Mr. Fennell wished to no longer
serve as President, he can resign from his seat, have a vacant seat and the
remaining Board can discuss filling of vacancy by a member of the Board. Meaning the Board members can elect another
President for the rest of the term.
There is probably an easier way to do this, if Mr. Fennell decides to no
longer serve as President. However, the
Act contemplates having the election immediately after the landowner’s meeting.
Mr. Hanks nominated Mr. Fennell as
President and Ms. Zich seconded the nomination.
There being no further nominations, with all in favor Mr. Fennell was
elected President.
Mr.
Fennell stated the next office we should consider is Secretary as they are
required to sign documents. The Vice
President has the easiest job. Since Ms.
Zich plans to move on, I recommend Mr. Hanks serve as Secretary.
Ms. Zich nominated Mr. Hanks as Secretary
and Mr. Hanks seconded the nomination.
There being no further nominations, with all in favor Mr. Hanks was
elected Secretary.
Mr. Fennell nominated Ms. Zich as Vice
President and Mr. Hanks seconded the nomination. There being no further nominations, with all
in favor Ms. Zich was elected Vice President.
THIRD ORDER OF BUSINESS Approval of the Minutes
of the
Mr. Fennell stated each Board member
received a copy of the minutes of the
Ms. Zich stated on page one, Mr.
Daly is listed as working for Severn Trent Services. Is this correct?
Mr. Daly responded no. I work for CSID.
Mr. Hanks stated on the bottom of
page six, the “
On MOTION by Mr. Hanks seconded by Ms. Zich
with all in favor the minutes of the
Mr. Fennell stated each Board member
received a copy of the minutes of the
There not being any,
On MOTION by Mr. Hanks seconded by Mr. Fennell
with all in favor the minutes of the
FOURTH ORDER OF
BUSINESS Presentation
by CH2M-Hill of the Final Conditions and Assessment Report for Pump Stations 1
& 2
Ms. Early stated at the last
meeting, we distributed the final report.
Since that time, we met with District staff, Mr. McKune and Mr.
Fredericks and went through the itemized list.
We removed the items we do not want to do at this time. This is just a discussion item as far as if
there is money available to move forward with some of these improvements and
repairs to the pump stations. The items
in blue are the ones FPI is providing the labor for. Because they are so late, they agreed to
provide the labor for us. Do you know
what the labor cost savings are?
Mr. McKune responded they have not
given us a breakdown.
Ms. Early stated we just have to
divide the parts. There are 17 per
station. We decided to remove the
mustard colored items after the meeting with District staff. The items in yellow are high priority with the
pump stations needing to be repaired, improved and replaced.
Mr. Hanks asked is the fencing
replacement for the exterior of the trash rack?
Ms. Early responded yes.
Mr. Fennell asked how often do we
need to replace the LP gas tank?
Mr. Hanks responded we should speak
to FPI about extending its life.
$100,000 can go for in terms of extending its life.
Ms. Early stated we decided not to
do it.
Mr. Fennell stated six or seven
years ago, we replaced the pump. I
thought we replaced the LP gas tank at the same time.
Ms. Early stated I could not find
any history.
Mr. Hyche stated I do not recall us
doing so.
Mr. Fennell stated Mr. Roger Moore had
an issue with was who was going to do the replacement. There was a great deal of discussion about
the contractor supplying the gas owning the tank. What determination do you make when you
replace it?
Ms. Early responded one of the
issues was the amount of storage for fuel and how many days we can operate the
pumps without fuel. Currently we can
operate for two to three days but we were trying to increase it to six days, if
we were hit by a hurricane. However,
after we saw the cost, we changed our minds.
Mr. Fennell stated this is an
entirely different question. At the
plant we have enough fuel to last us a week, maybe more. If you are saying we only have enough fuel
for the pumps for two to three days, this is a big issue.
Mr. Hanks stated keep in mind; you
have this emergency flap gate, which Mr. Hyche says needs to be repaired.
Mr. Daly asked what is the capacity?
Ms. Early responded I do not know
how much water it can hold.
Mr. Fennell stated good question.
Ms. Early stated it is not going to
be as much as you pump.
Mr. Fennell stated the way our
models work; we are counting on the rain lasting over two to three days. On the third day, we run out of gas.
Mr. Hanks stated we need to contact
a gas company to see about getting a line to supply the gas.
Mr. Hyche stated the problem with
running a line is we do not have an easement.
Mr. Hanks stated the easement is not
going to be the issue but how we are going to get the gas in there. The question is one of liability and whether
the fuel trucks can get through.
Mr. Fennell asked was there a
rationale for three days?
Ms. Early responded originally we had
this item on the task list but after the last meeting and looking at the
budget, we decided this was a big ticket item.
I do not think they are leaking.
They are operating.
Mr. Hyche stated if you want, we can
test them.
Mr. Fennell stated I think this
should be done immediately. The real
issue is to get an LP truck back there and down the canal in order to get gas
in there. This has to occur on the
second day after a hurricane.
Mr. Hanks stated you have a few days
leeway. How many hours will it run
continually?
Mr. Hyche responded a few days.
Mr. Hanks asked when was the last
time you had those pumps on continual run for two days?
Ms. Early responded never.
Mr. Hanks asked is this with three
or four pumps running continually?
Mr. Hyche responded you are not
allowed to run four pumps continually.
Mr. Fennell stated if you receive a
warning, they will be pumping at least the day before. Make sure we can get a truck in there. After the rain comes, depending on how bad it
is, you will be pumping like crazy.
Mr. Hanks stated every storm within
the last three to four years; we have not received more than six inches. If you run it for two days, by the third day
you are tapering out.
Mr. Fennell stated the lower the
intensity of the hurricane, the more rain you are going to get because it does
not move on. Some have been known to
back up, come back and hit us again.
Mr. Hanks stated keep in mind, all
we are looking at is a 1% chance.
Mr. Fennell stated we saw we could
not get supplies in here for several days and we did not even get hit hard.
Mr. Hanks asked did they come in
with propane?
Mr. Hyche responded propane was not
a problem. Diesel was a problem because
Port Everglades was shut down.
Mr. Fennell stated we need enough fuel
to get us past two or three days and up until a week.
Mr. Hanks stated we do not have
enough money in the budget.
Mr. Fennell stated this is a
different budget.
Mr. Goscicki stated we placed
$580,000 plus some contingency for this project into your upcoming fiscal
year’s budget.
Ms. Zich stated this is a revised
budget because the backup is not correct.
Someone sent me this budget. If
you look at the old budget, the numbers are right.
Mr. Daly stated I apologize.
Mr. Hanks asked are these projects
allocated in the 2007/2008 budget?
Ms. Early responded not all. We took the LP tank out. The bright yellow and blue items are what we
totaled.
Mr. Hanks stated $261,009.75 is in
the proposed budget. The items not
highlighted are what we removed, including the LP gas tank replacement.
Mr. Fennell asked is this an
operating budget as opposed to a capital budget?
Mr. Goscicki responded both. This is the General Fund Budget, including
both your operating and capital expenses.
We tried to wrap all of the financing onto one page to show what dollars
you have left at the end of the day.
This is what Mr. Daly and I were working with on last Friday. We wanted to come up with a better
presentation. The bottom line of what
the Board needs to know and the reason why we placed this pump station
discussion before the budget discussion was because it has a budgetary
impact. We currently allocated $580,000
for this project for next fiscal year.
We recommend you not increase your assessments and keep them level at
$150.71 per unit. At the end of next
year, you will be down to a $217,000 uncommitted fund balance. You are going from a fund balance of $1
million at the beginning of this year, down to $217,000 in uncommitted fund
reserves. You still have another
$264,000 in reserves to cover your first quarter operating expenses. You are spending reserves that have been
here.
Mr. Hanks stated you do not have any
cash on hand for any hurricane cleanup.
Mr. Goscicki stated you are left
with $217,000.
Mr. Hanks stated at the last
meeting, we discussed what you thought was a reasonable reserve. As you recall, we were talking about $1
million.
Mr. Goscicki stated we were talking
in this order of magnitude.
Mr. Hanks asked has anything changed
with regards to discussions with this amount being a target?
Mr. Goscicki responded no. This is a good goal to get to but not
something you expect to have tomorrow.
You have $217,000 and are carrying this cash reserve to bridge your revenue
stream. This revenue comes in as a lump
sum a couple of months into your fiscal year and will be there after the first
couple of months to deal with emergency situations. You are not broke as you have some operating
capital.
Mr. Hanks stated this is fine if we
do not get hit with a hurricane early in the season. We are still five months from getting money
from the Tax Collector. As much as we
are talking about being proactive with the pump stations, we need to be
proactive with our finances and have the funds on hand and available so we can
respond.
Mr. Goscicki stated this is why we
presented the budget in this fashion. We
wanted to keep your assessments at the same level; with you getting a nominal
investment of $200,000 in reserves. You will
be funding this amount every year. The
way we structured this budget, if you get the same operating expense, you can
put in another $200,000 and carry it over.
Mr. Fennell asked how many reserves
do we currently have?
Mr. Goscicki responded at the
beginning of this fiscal year, we are showing $1.2 million. We are estimating at the end of this fiscal
year, you will have $400,000. In the
last two years, you have been dealing with hurricane issues.
Mr. Fennell stated I am looking at
some items as a capital improvement. We
should be paying for it. I do not think
we want to spend down reserves. If we
are going to expend this money, we should be charging for it. What do you think, Ms. Zich?
Ms. Zich responded yes.
Mr. Goscicki stated I will pull out
a calculator before we get to this budget item and figure out some recommended
increases for you.
Mr. Fennell stated we are saying, “If
we are going to be spending $500,000, we should obtain another $10,000 in
revenue”, which ends up being another $40 to $50 per unit.
Mr. Goscicki stated I ended up with
$11,600. The question is whether you
need the money all at once or build it up over seven years.
Mr. Fennell stated the problem is
with the maturation of the plant. We
have done a good job of keeping the pumps going but frankly the physical parts
like the buildings are 30 years old and are dilapidated.
Ms. Early stated ASE put out a
report about the Katrina pump stations, which said their doors were not
hurricane proof. This is why we are
recommending hurricane proof doors. There
is a door but it is not hurricane proof.
Mr. Hanks stated if the doors go,
you lose the integrity of the roof and you get water inside of the building,
causing your motors to break down and losing your pump capacity.
Mr. Goscicki stated we budgeted $600,000
for emergency repairs.
Ms. Early stated the only item not
budgeted for is the LP gas tank.
Mr. Goscicki stated if you increase
your assessments, we have to send a first class notice to every resident
saying, “We are increasing your assessment”, just as the state came in and said
“We are dropping your property tax”.
This is one of the reasons we tried to give you a balanced budget with
no increase in assessments this year.
One of your neighboring districts, Pine Tree WCD is in a tighter
situation than you are. Pine Tree WCD spent
down their reserves due to hurricane remediation and tree removal
replanting. They are taking out a Line
of Credit with SunTrust. It will cost
them a few dollars to maintain but they did not want to have a significant assessment
increase. However, they need to have an
assessment increase just to stay even.
You have a reserve. If we need to
get into an additional reserve, rather than creating cash, we can enter into a
Line of Credit to give us more security.
Mr. Hanks stated we tried a short
term funding for the Enterprise Fund. Is
the Enterprise Fund any different than the General Fund?
Mr. Goscicki responded this is like
a short term loan. In this case, we set
up a Line of Credit and not borrow any money.
If we borrow $5 million, we want to have the ability to access this
money but you would not access it unless you have a hurricane. It is essentially an insurance policy. You are taking it from a bank and will be
paying fees.
Mr. Hanks asked what fees are we
talking about to maintain the relationship with the bank?
Mr. Goscicki responded if I recall,
Pine Tree WCD paid $10,000 to $15,000 to set up the program and for maintenance
costs.
Mr. Fennell stated we can set the
assessment to any amount. What is the
current amount per unit?
Mr. Goscicki responded $150.
Mr. Fennell asked at the next
meeting when we pass this budget, can we set the assessment?
Mr. Goscicki responded the Board can
certainly increase the assessment. If
the Board wants to approve a budget with a requested increase in assessment, we
are required to send a notice to every property owner notifying them of this
increase in assessment and the date when the public hearing is held.
Mr. Lyles stated we used the
property tax roll for our assessments.
Chapter 197 of the Florida Statutes applies to the adoption of a budget
and setting of assessments. One of the
provisions has been construed by the appellate courts to mean if you adopt an
assessment for the first time or increase an existing assessment by any amount,
you are required to notify every landowner/taxpayer within your jurisdictional
limits by first class mail. The letter
will state the amount of the increase, the reason and the date, time and place
of the public hearing. We can have the
budget hearing with just a notice in the newspaper. This is what will occur at the July
meeting. However, if you increase the
assessment, we will have to follow the appellate court decision requiring
individual mailed notices by first class mail.
This is what staff has suggested.
Mr. Fennell stated by doing this we
are saying we spent more money than we budgeted for.
Mr. Goscicki stated you spent more
money this year and last year with hurricane mitigation. Your reserves were used for all the hurricane
mitigation work. Even though you
received significant reimbursement, you spent a great deal of money.
Mr. Hanks asked when are we going to
be back up to the target reserve?
Mr. Goscicki responded at this rate,
it will take three to five years to reach $1 million.
Mr. Fennell stated we had a reserve
of $1 million last year, which helped us.
Some districts did not have enough money in their reserves to do their
mitigation work. Their big concern was
money.
Mr. Goscicki stated some districts
took out a loan for $5 million for the hurricane mitigation work. You are correct; they did not have funds on
hand but were able to get some funds fairly quickly.
Mr. Fennell stated I would not want
to see us spend down our reserves. If we
need more money, we will have to send out notices to the taxpayers saying we
are going to do this. We can also take
out a bank loan.
Mr. Hanks asked can we increase
their assessment after 12 months to pay off $5 million?
Mr. Goscicki responded yes.
Mr. Hanks stated for years, we have
been under the assumption we have not had to worry about cleaning costs. The truth is we are going to have to increase
assessments either before a hurricane hits to be proactive or pay additional
fees to borrow money from a bank and incur assessments after a storm.
Mr. Fennell stated I applaud the
City of
Mr. Hanks asked how much harm will we
do the District if we had to wait a month or two?
Mr. Goscicki responded the option we
are looking at is for you to take out a Line of Credit so you have the funds if
needed next year.
Mr. Fennell stated we have $1
million in reserves. Correct?
Mr. Goscicki responded you started
the year with $1 million but by the end of the year, it will be around
$300,000.
Mr. Fennell stated we need to
balance the budget for the items we need to have. Therefore, we need to increase assessments in
order to do so. We either pay now or
later. I wonder whether we should do
long term financing. Many of these items
are maintenance related.
Ms. Zich stated we had $1 million at
the end of last year and have $400,000 now.
This means we spent $600,000 on extra items due to the hurricane.
Mr. Fennell stated we spent $430,000
for hurricane cleanup.
Mr. Goscicki stated by raising
assessments, you will raise $400,000, which is significant. This goes right into the reserves. Do you need to move on this quickly? You did not build your initial $1 million
overnight. You are currently in a solid
financial position. You are not deficit
spending. You spent your reserves on
appropriate capital reserves items; not for funding operations. Other districts were funding their operations
out of reserves for two years. I do not recommend
doing this. You are funding your current
operations out of your revenue and putting money towards reserves with your
current revenue. I recommend against
doing a 20% increase in assessments at this time in this climate. I want you to think long and hard about
whether or not you want to do this.
Mr. Hanks stated we are talking
about it taking three to five years to bring us back to having $1 million in
reserves at our current assessment.
Mr. Goscicki stated correct.
Mr. Hanks asked if we were to
increase our debt assessments by $10, would we be looking at it taking two to
four years to build up our assessments to $1 million?
Mr. Goscicki responded $10 per unit
will bring $100,000 per year in revenue.
Mr. Fennell stated the fact is, we
have not received any increase in revenue since the last time we raised
assessments. This is a per unit
assessment.
Mr. Goscicki stated correct.
Mr. Fennell stated we kept our rates
where they should be and do not have excess funds.
Mr. Hanks stated this year we can
increase the assessment per unit by $40 and next year decrease it.
Ms. Zich stated I am concerned about
raising assessments.
Mr. Daly asked is there a concern
because you are also raising the water and sewer rates?
Mr. Fennell responded yes.
Ms. Zich stated the residents have
to see we have not raised the rates in 15 years.
Mr. Goscicki stated some of the
arguments you will get from residents is why they are paying for you to amass
$1 million to pay for contingencies they will never get the benefit of.
Mr. Hanks stated you could live here
the rest of your life and never receive any benefit.
Ms. Zich stated everyone here received
the benefit of the $600,000 we used.
Mr. Fennell stated I think we should
put out a notice of increase in assessment and find out what the residents have
to say. Maybe they will come to the
public hearing and say, “No Way!” or maybe they will say “Yes”. When is the public hearing?
Mr. Lyles responded July 16th. In order to put all of this into play, you
have to approve by resolution, the proposed budget with these changes by
resolution. Staff has to prepare a 20
day written notice to the property owners.
Mr. Hanks stated in the minutes,
there was some reference to CDDs versus Special Districts and the noticing
requirements. I recall the minutes
saying we needed 30 days.
Mr. Lyles stated we are looking at
20 days. You are confusing this with a
CDD who has to provide the budget to the county 60 days before the public
hearing. They do not approve it or
disapprove it. It is informational but
there has to be a 60 day gap between approving the proposed budget and setting
the public hearing for adoption of the final budget. In our case, since we are not a Chapter 190
CDD, we have a much shorter time period.
We have to publish the advertisement in the newspaper twice, two weeks
before the public hearing. If you
increase assessments today, by virtue of this amendment to the proposed budget,
there will be a 20 day mailing period in order to meet on July 16th.
Mr. Fennell stated I want to modify
the budget to a point where the funds are coming from the reserve but from
straightforward surplus and increase assessments. The funding is not for the normal operations
but we want to pay for the capital improvements listed on the task list
provided by the engineer. We already had
staff go through this and they pared it down to something more than we wanted. The question is how to pay for the capital
improvements.
Mr. Hanks asked when was the last
time the assessment was changed?
Mr. Fennell responded we changed it
right after the hurricane hit.
Mr. Hanks asked is this the second
increase?
Mr. Fennell responded yes. Once we paid off our bond issues, we lowered
the amount we were charging the residents.
We had cash reserves until Wilma came along. We can put out a bonds issue, but for a
couple of million dollars, this is probably not worth doing. I propose we fund our capital improvement
through an assessment.
Ms. Zich stated I hate to do
this. This is why I am sitting on the
edge of whether or not to do this. We
just increased the water rates.
Mr. Hanks asked did our Fire
Assessment increase?
Mr. Daly responded it was proposed
to increase.
Mr. Hanks stated we are talking
about our assessment increasing from $150 to $190 per unit.
Mr. Fennell stated for the entire
year, which is only an increase of $4 per month or $1 per week.
Mr. Goscicki stated when we get to
the budget discussion; we will add a specific dollar amount to the budget and
set the public hearing.
Mr. Fennell stated staff did a great
job looking at pump stations 1 and 2 and figuring out what we need to do in
order to keep them running. It has
always been the option of the Board to make sure they work well and there are
no problems. We know from our flood
studies, we cannot let them break down.
There is no wiggle room, especially in the eastern part of the District.
Mr. Hanks stated considering some of
those costs we were contemplating.
Mr. Hanks asked is there room on the
site for an additional propane tank?
Instead of doing a total replacement, we can take one out of
service. We have to consider the
excavation cost versus the installation cost.
We will not have any disposal fees.
How much does an additional one cost?
Mr. Hyche responded around
$1,200. I can check on the cost for a
pressure tank. You are required to
replace the fuel system every five years.
Mr. Hanks asked for the above
ground?
Mr. Hyche responded for the below
ground ones.
Mr. Fennell stated we will know more
by the time this comes back to us. Mr.
Hanks has a good idea of adding another tank of the same size next to it. We are looking for a proposal at the next
meeting for the additional tank along with some other ideas.
SIXTH ORDER OF
BUSINESS Staff
Reports
A. Manager
Mr.
Fennell asked what is the status of our bond issue?
Mr.
Goscicki responded we are moving along.
An item we were not able to get onto the agenda was the engagement of
Bond Counsel. We also have a work
authorization for the engineers to complete the Bond Feasibility Study. We are still looking at both short-term and
long-term bond issues. Bond Counsel
along with your Underwriter and Engineer are working diligently with your
current bondholders to restructure our current bond resolutions, allowing for
this new debt structure. I received
emails this week from Prager, Sealy indicating this process is moving along
fairly well. They had some meetings with
the current bondholders and insurance agency.
We need to have the Board approve a Bond Counsel Agreement, which I
received the day after your agenda packages went out. You will see this item at the next meeting as
I need time to review it.
Mr.
Fennell stated we received an amended agenda.
Mr.
Goscicki stated it was probably mailed out to you as a separate item.
Mr.
Lyles stated the concern was you needed time to look at it. However, if you received it as a supplement
to the agenda package, you may act on it now.
It is up to the Board.
Mr.
Fennell asked is time of the essence?
Mr.
Goscicki responded absolutely. They are
working and want to formalize the relationship.
You already authorized and selected Ruden, McClosky as your Bond
Counsel. As we worked through the
initial states, they kept track of their time.
However, they got to the point where they wanted you to formalize their
agreement at a lump sum price. We
reviewed the agreement and feel comfortable with it. It is not an insignificant sum of money; however,
this is a relatively complicated bond issue by having to do an original Bond
Anticipation Note, follow-up bond, dealing with your existing bond resolutions
and existing covenants. The other issue
we need to take up today is authorizing the engineer to complete the
Feasibility Report, which they are currently working on in good faith.
Mr.
Fennell asked what does the attorney think?
Mr.
Lyles responded I reviewed the letter and discussed it with Mr. Goscicki. It is a significant fee but as he explained,
it is a significant undertaking. There
are at least two components; the BAN and pre-bond issue structure. The reason for the two components is in
virtually every bond deal; Bond Counsel receives the larger fee of any
professional involved. Disclosure
Counsel is sometimes called Underwriter’s Counsel. The Underwriter is Prager, Sealy and they
typically have a law firm, prepare the Offering Memorandum, advising the
Underwriter and playing the role. What
is proposed here is having Bond Counsel serve as Disclosure Counsel. They will prepare the documents, file with
the regulatory agencies and provide the continuing obligation to disclose
material changes in the financial structure.
They combined this into one law firm with two components to the
fee. As explained in the letter, their
fee does not get paid unless they have the bond closing. If you change your mind and decide not to go
forward, they will want to be reimbursed for the labor they put forth. They also issue tax opinions to the security
and investors market to get these bonds sold at the lowest possible rate they
can. They are tax exempt. This is a complex undertaking in the broad
scope. I worked with this firm and this
attorney on a number of occasions, including your refunding a couple of years
ago. We know we will get top notch
performance from them.
Mr.
Hanks stated the fee we are paying is $150,000.
Is this fee ordinary?
Mr.
Goscicki responded it is on the high side, based on the complexity of the
current situation as we are going out for new water and sewer bonds. If it was for the existing debt in place,
this would be a significantly lower fee and simpler process.
Mr.
Hanks stated we are looking at a fairly time consuming process.
Mr.
Goscicki stated correct.
Mr.
Lyles stated this fee is in line with several financings done in NSID over the
past 24 months for a similarly complex issue.
In some cases, it involved infrastructure and not a Water Plant.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the engagement letter with Ruden, McClosky to serve as
Bond Counsel was approved.
FIFTH ORDER OF BUSINESS Current Status and
History of Open Work Authorizations
Mr.
Fennell asked which ones do we need to approve?
Mr.
Goscicki stated this item is not for approval purposes but informational. The Board asked for this item to be placed on
the agenda on a monthly basis. Your engineers
are doing an unbelievable amount of work and this is a nice way for you to see
where they are on each activity and the amount of money spent to date. This is a good tool for your staff and
managers to review with the engineers what they are doing.
Mr.
Hanks asked does this reflect the $156,000 recently voted on for CH2M-Hill?
Mr.
Goscicki responded yes.
Mr.
Fennell asked what about the work authorization you asked me to sign last week
for $32,000?
Ms.
Early responded this was a new work authorization.
SIXTH ORDER OF
BUSINESS Staff
Reports
A. Manager
i. Distribution
of Proposed Budget for Fiscal Year 2008 and Consideration of Resolution 2007-6
Approving the Budget and Setting the Public Hearing
Mr.
Goscicki stated the budget was distributed to the Board. It reflects an assessment of $150 per
unit. The Board has been considering
whether or not to increase this assessment to generate additional revenue in
order to help re-build your reserve funds.
What we need from the Board at this time is a motion approving the
budget for purposes of setting the public hearing. If the Board approves an assessment greater
than $150, we will need to send out individual notices to the affected property
owners. We are planning to hold the
public hearing at your next meeting, based upon action you take today.
Ms.
Zich stated at the last meeting, we said we are going to set aside $75,000 for Vegetative Management. I do not see where this was added. We talked about adding this item under
repairs and maintenance.
Mr.
Goscicki stated you are correct. It will
need to be added.
Ms.
Zich stated add it under repairs and maintenance.
Mr.
Fennell asked what is wrong with making a separate line item?
Ms.
Zich responded the accountant said there were only certain accounts you can
use.
Mr.
Goscicki stated we get into chart of account issues and the charts we can use
for budgeting. However, we can certainly
show this in the backup.
Ms.
Zich stated list it separately like the other items under Repairs and Maintenance on page 12.
Mr.
Goscicki stated the way the budget is developed; we look to see how the numbers
balance out with the dollars available.
We go through a process to try to find something workable.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the proposed budget was amended to reflect $75,000 will
be added under Repairs and Maintenance for Vegetative Management.
Mr.
Hanks stated I am interested in seeing how we are going to handle this. Just because we have it in the budget does
not mean we have to spend it.
Mr.
Fennell stated the other item we wanted to amend in this proposed budget is not
using the carry forward surplus and increasing the assessment levy so we can
pay for our improvements.
Mr.
Goscicki stated you currently have $600,000 in your budget for next year, which
can be allocated for the pump station 1 and 2 improvements. This money is on hand, which we can use if we
get hit by a hurricane next week.
Mr.
Fennell asked what number do we want to increase the assessment to?
Mr.
Goscicki responded I am looking for an assessment level this Board is willing or
“desire” to move to. We are talking
about building a reserve. The question
is what assessment level you are comfortable moving to. We will re-work the budget using this number. This is the number we need to know in order
to send out the public notice in the next 10 days. The current assessment is $150.71. Every $10 is going to generate $110,000 of
additional revenue for the Board.
Mr.
Hanks asked do we currently have a projected fund balance of $430,000?
Mr.
Goscicki responded this is what we project to have at the end of this
year. With your current assessment,
assuming you went forward with an improvement program, you will have an
uncommitted fund balance at the end of next fiscal year of $217,500, which is
the last line under Field Operations for Reserves for R&R and Emergency.
Mr.
Fennell stated I propose we increase the budget by $37.00 per unit to $187.70.
Mr.
Goscicki stated this should put your revenue at $600,000 by the end of next
fiscal year.
Mr.
Fennell stated this balances us out to where we do not spend any carry forward
surplus.
Mr.
Goscicki stated you are only spending half of the carry forward surplus. You are starting out with $430,000 and ending
the fiscal year with $217,000.
Mr.
Fennell stated we could take anything out of reserves and try to balance it out
and not have an excess. What are our exact
reserves?
Mr.
Goscicki responded I cannot tell you as we do not know.
Mr.
Hanks stated keep in mind; we have capital projects out there, which we agreed
should be done. They have not been
approved and we have those funds available.
Mr.
Fennell asked do we?
Mr.
Goscicki responded yes. We budgeted
$580,000 for these pump station improvements.
Mr.
Fennell asked do we have any projects for next fiscal year?
Mr.
Goscicki responded no.
Mr.
Fennell stated we received a task list from the engineers for longer term
projects such as an interconnect and digging canal connections.
Mr.
Hanks stated you are not looking at anything being handled by the
assessments. You are also not talking
about something under $1 million. It is
going to cost $10 million or more.
Therefore, you want to think long and hard about whether we are going
forward with these assessments.
Mr.
Goscicki stated Mr. Daly pulled up your assessment history over the last three
years. In 2004-2005, the assessments
were $82. In 2005-2006, the assessments
were $91.38 and in 2006-2007, we increased them to $150.
Mr.
Fennell stated because of the hurricane.
Mr.
Hanks asked where has this money been going and why were we not paid back in
the reserves?
Mr.
Daly responded a lot of the funds went into the canal bank restoration, which
was not NRCS funded.
Mr.
Hanks stated since this project was completed, we have not done any other canal
bank restorations.
Ms.
Early stated we spent $580,000 for the pump stations.
Mr.
Hanks stated we might as well call for the assessment increase. Can we always drop back down the assessment
per unit from $187.70 to $160 after we hear public comment at the public
hearing and decide we do not need to raise assessments to $187.70?
Mr.
Lyles responded you can always go down.
Mr.
Goscicki stated you cannot go up.
Mr.
Hanks stated I want everyone here to think of ways to drop down the
assessment. Four raises in assessments
in six years is not a good track record.
However, I want to bring the reserves back up as we need to make
improvements to the pump stations. It
may be a different story, once we get the reserves back up.
Mr.
Goscicki stated this is one item we discussed in-house and doing an analysis of
what is critical and in poor condition and needing to be dealt with first. We are trying to do better prioritization and
we may be able to trim down the list.
This is not saying we will not do these items but we may not do them all
this year. We can take on Phase 1 this
year and Phase 2 next year or the year after.
With this budget, you are generating $200,000 in additional reserves
every year. This is why we show this
amount in the reserve and expense column.
Mr.
Hanks stated I want to be careful about generating fat in the budget.
Mr.
Fennell stated there is another way to look at this, which is we took out
$430,000 but then put back $270,000.
Mr.
Goscicki stated you are correct. We have
been working on re-formatting the budget to give you a better view of this fund
balance. With the maturity of this
District and as you get into capital planning and programming, it is important for
the Board and management team to see the balance clearly laid out. In prior budget presentations, the way the
dollars were shown, those dollars were not there. The most significant change we made from the
previous budget was to move the reserve dollars down below the expense line to
show you what you have to work with.
Mr.
Fennell stated this is still confusing because you added your cashflow. In other words, you are taking out the
$430,000 carry forward surplus out of the revenues. Then you are saying we have a reserve for
first quarter operating of $264,000.
This means we need to take money out of the bank in order to pay for
this quarter. Then we are going to put back
$217,000.
Mr.
Goscicki stated the $264,000 is the expense you are going to have during the
year. It is being shown as an
expense. The way we want like to move
forward with this budget is to drop the reserve out of the operating expense
and show below the line. The way we
recommend going forward is to show the revenue with no carry forward
revenue. We only show your assessments,
interest income, other miscellaneous revenue, current revenues and current
expenses. You are going to generate a
positive cashflow flowing to this reserve item.
Off of this reserve, comes any capital improvements or committed
reserves you have to put aside. Your
bottom line is the uncommitted fund balance going forward, which will build
each year. This is what we are trying to
get to in terms of budget presentation.
It clearly shows what your working capital is to fund your capital
improvement programs and the fund balance for emergency purposes. In this year’s budget, we netted all this out
in terms of what you expect to have at the end of this year. You started this year with $2 million in
uncommitted reserves and are going to wind up with $400,000. We took this $400,000 and put it past the
revenue for this upcoming fiscal year but showed the expenses and the fact you
need $264,000 for operating capital until your revenue comes in and another
$217,000, which is your balancing number.
This is the number balancing out your current revenue to keep the
revenue fixed, run all of your expenses and the $217,000 is what closes the
gap.
Mr.
Hanks asked can we compare the $-784,000 with the $217,000 and say we cut
$900,000 out of the budget?
Mr.
Goscicki responded yes. In this current
fiscal year, you tapped into your reserves by $784,000 because you spent $1.6
million in Repairs and Maintenance
for hurricane activities. You only
received $300,000 in revenue from NRCS this year. The other revenue was bumped to the previous
year. Even though you received it this
year, it was last year’s revenue. This
is how you ended up with $1.2 million in carry forward from last year
Mr.
Hanks asked where is the $1.2 million in the budget?
Mr.
Goscicki responded it shows as your unaudited fund balance at the end of the
fiscal year. This item previously showed
on the top line as carry forward surplus on the revenue side. In the first column “Adopted Budget
2006/2007”, you were showing cash forward surplus of $250,000. We are now saying, “You really started the
year with $1.2 million”. This is due to
how we booked the revenue received this year.
It did not show as NRCS revenue.
It showed as cash from last year, which is confusing. You spent $1.6 but you had some revenue
returned to you, which we carried forward.
You
are ending this year with $400,000 in reserves, which is not a bad place to be
for the size of this operating budget.
This is six months of operating reserve funds and not an insignificant
sum of money. You are funding next year
with $600,000 in capital improvements and with $200,000 plus in reserves. You are funding the capital improvement,
somewhat out of reserves but mostly out of your current revenue stream. Your revenue stream at $115 per assessment is
sufficient to cover $500,000 plus in capital improvements, plus borrowing
$200,000 as you are still generating $400,000 in reserve funds. If you funded no capital improvement, you
would be generating $400,000 towards your reverse funds with your current level
of assessment. This is why I am
recommending you use your reserve funds to pay for your capital improvement
program.
Mr.
Fennell stated there are items we can put off until next year like those
tanks. We still have a great deal left
to do out there. I see us having spent a
good amount; this year and next year in order to get those pump stations up to
speed. Maybe we have not taken on major
revisions, which I do not see this changing.
The Board is not comfortable with the $200,000 reserve.
Mr.
Goscicki stated it depends on where the Board wants to go with the revenue.
Mr.
Fennell stated someone could argue there are not many trees left.
Mr.
Hanks stated keep in mind; it is not the amount of trees left to remove but
maintenance of the trees not removed.
The city is probably going to have the same expectation as the
residents.
Mr.
Fennell stated we should increase the assessment from $150.70 to $187.70. We can look at assessing less at the public
hearing.
Mr.
Hanks stated we welcome public involvement.
Mr.
Fennell stated we should be funding these improvements.
Ms.
Zich stated we need to do a lot of replacements.
Mr.
Hanks stated we should also keep in mind whether or not it makes sense to
rehabilitate the existing structures, I did not see anything on the task list
about improving the tie downs for the roof.
Ms.
Early stated there was a roof replacement.
Mr.
Hanks asked is this contemplating re-straps and tie downs and making sure there
is adequate reinforcement in the walls to ensure the roof does not blow off in
a hurricane? There are other issues
associated with these buildings.
Ms.
Early responded you want to make sure they are hurricane safe.
Mr.
Hanks stated if you take an existing building and replace the garage doors, you
are still going to have weak links. If
your roof goes, it does not matter if your garage doors are still intact. You still have water in the building. I want to be careful as we go forward with
the capital improvements.
Ms.
Early stated one of the notes I made was on what you are talking about.
Mr.
Fennell stated I think you have an excellent point. One of the problems I have seen before when
you are scraping monies out of every corner, after awhile you get to a point
where you are eliminating things you should not be eliminating.
Mr.
Hanks stated it is not a question of trimming down this list. It is a question of if we spent $200,000,
whether we are getting the level of protection we really need. We may want to build a new building outside
of the current one and bring the roof to code.
Mr.
Hyche stated
Mr.
Hanks stated please share this with me, once you receive it.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor Resolution 2007-6 Approving the Budget and Setting the
Public Hearing for July 16, 2007 at 4:00 p.m. at the District Office, 10300 NW
11th Manor, Coral Springs, Florida was adopted as amended, changing
the Assessment Per Unit amount from $150.70 to $187.70.
Mr.
Goscicki stated we will be sending the assessment letters out in the next 10
days.
Work Authorization for Feasibility
Study
Mr.
Goscicki stated this work authorization is number 38 with CH2M-Hill for
preparation of an interim funding evaluation report as well as preparation of
the engineering reports for the District’s Series 2007 water and sewer bond
issue.
Mr.
Hanks asked what is this all about?
Mr.
Green responded in support of issuing the bonds for the water and sewer system,
we have to prepare an Engineer’s Report.
We have also been told by Prager, Sealy if we want to get the interim
funding, we need to prepare another report in order for them to change the
covenants and allow them to issue additional bonds. This work authorization is for the interim
funding report as well as the engineering report for the bond issue.
Mr.
Fennell stated we already have one of the reports.
Mr.
Goscicki stated they will use this report to prepare the engineering report
talking about need and cost to support this bond program.
Mr.
Hanks stated so this is above and beyond what we have already contracted with.
Mr.
Goscicki stated correct.
Mr.
Fennell asked do we need to do this to get the bond?
Mr.
Green responded yes.
Mr.
Goscicki stated we feel this is a reasonable amount for the work involved. They originally had a work authorization for
just the bond feasibility but added a few thousand more to do the interim
report.
Mr.
Hanks stated we paid $36,000 for the rate study analysis, which told us if we
needed to increase our rates. Now we are
spending $32,000 to prepare an engineering report. Are you saying Prager needs something
different?
Mr.
Goscicki responded yes. You are taking
the rate study analysis and translating it to something Prager, Sealy will
understand on why you need to spend the money.
It goes beyond this. It paints
the picture of the entire situation the District is in and where this bond
program fits with the current situation in terms of your capacity, need and why
you are doing the program. It is much
more than justifying why you are spending the money than in terms of something
being broken and needing to be fixed and why.
Mr.
Green stated it is mostly to make sure the people who are going to review this
report; the bond insurers and rating agencies understand it.
Mr.
Lyles stated there is one other element.
One decision that has not been totally made yet but we have been
discussing the issue of validation of these bonds. Bond Counsel believes, based upon your
Special Act and history, it is not required for these bonds to be
validated. However, we have also
discussed the utility and the wisdom of going through a court validation process. This is where I bring a complaint to Circuit
Court to validate these bonds and we would have a final judgment blessing all
of this. A city or Chapter 190 CDD
absolutely has to validate these bonds.
However, because of peculiar language in your Special Act, you are not
required but may validate these bonds.
We think by doing these financings and people questioning how things
were done, it would be wise to have the bonds validated. This is the recommendation we are going to
make to you. This report will assist in this
effort and be part of the record entered into in the back of evidence by
stipulation potentially resulting in testimony by this engineer at a bond
validation hearing in Circuit Court.
On MOTION by Ms. Zich seconded by Mr. Hanks
with all in favor Work Authorization No. 38 to CH2M-Hill for preparation of engineering reports for the District’s
Series 2007 water and sewer bond issue in the amount of $32,231 was approved.
iii. Monthly Water & Sewer Charts
iv. Utility Billing Work Orders
v. Complaints Received/Resolved
There not being any, the next item
followed.
B. Attorney
Mr. Lyles stated I am pleased to
tell you, NSID’s amendment to their Special Act, which are identical to your
amendment was approved last week and signed by the Governor. For some reason, CSID’s amendment is not on
the Governor’s desk. We were given an
update on the status this afternoon. We
were told this is not a negative sign and it does not have any significance,
other than the way things are getting processed through in the special
session. It seems almost certain, with
the NSID one having been signed; your bill will be signed and tentatively
become a law without the Governor’s signature between now and the next meeting.
Mr. Hanks stated so no news is good
news.
Mr. Lyles responded the news that
the amendment for NSID was approved is good news.
At the last meeting, President
Fennell and Mr. Hanks had questions about the insurance company who was listed
in support of a proposed contract for a project. The questions were in regards to the rating of
the insurance company and what cities were requiring in terms of the coverage
on their contracts. We looked at several
city contracts including
Mr. Hanks asked can anything be done
in the future in regards to our desire to have this type of rating?
Mr. Lyles responded yes. You can require in your bid specifications
for all your contracts a best rating of A.
It is a matter of changing the form of the bid specifications for your
public works contracts to make this a requirement.
Mr. Hanks asked do you think this
will have any material effect on the budget?
Mr. Goscicki responded it will limit
the contractors bidding on smaller projects but will not have any effect on the
larger ones.
Mr. Hyche stated the question you had
was for the Fish Tech bid, which is a smaller project.
C. Engineer
There not being any, the next item
followed.
SEVENTH ORDER OF
BUSINESS Supervisor
Requests and Audience Comments
Mr. Hanks asked did the contractor
starting the work on the culvert cleaning?
Mr. Fredericks responded yes.
EIGHTH ORDER OF BUSINESS Approval of May Financials
and Check Registers
There not being any questions,
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the financials and check registers for
NINTH ORDER OF BUSINESS Adjournment
Mr. Daly asked in our continuing
efforts with the city, I spent three hours at a program they had on hurricane
preparedness.
Mr. Goscicki stated we received a
call from the Public Works Department wanting to know what we have done
preparing from a treatment side in anticipation of this hurricane season. Mr. McKune is putting a report together
detailing some of the significant expenditures and improvements the District
made. Not only dealing with old problems
but mitigating future problems. We will
be submitting this report to them this week.
They want to give this report to their City Council.
Mr. Fennell asked how are you doing
with finding a replacement for your position?
Mr. Goscicki responded I am
trying. It is a pleasure working with
the Board and staff. We are actively
looking. The person you want for this
position is one who has public sector experience and understanding of
government processes. It is like filling
a City Manager role but still having the utility and stormwater management
background to deal with the day to day management issues.
Mr. Fennell asked Ms. Zich, are you
going to officially tender your resignation next month or hold off?
Ms. Zich responded I will hold off
for a couple of months.
There being no further business, the
meeting was adjourned.
Glen Hanks Robert
Fennell
Secretary President