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, July 18, 2005 at 4:08 p.m. at the District Office, 10300 NW 11^th Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Bob Fennell President (by phone)

Bill Eissler Vice President

Glen Hanks Secretary

Also present were:

Ed Goscicki Severn Trent Services

Roger Moore Severn Trent Services

Dana Kaas Severn Trent Services

Jean Rugg Severn Trent Services

Dan Daly District Staff

Jan Zilmer District Staff

Ward Crowell District Staff

Doug Hyche District Staff

Dennis Lyles Attorney

John McKune Engineer

Marcia Moore Guest

Shawn Frankenhauser Resident

FIRST ORDER OF BUSINESS Roll Call

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

SECOND ORDER OF BUSINESS Approval of June 20, 2005 Minutes

Mr. Eissler stated each Board member had received a copy of the June 20, 2005 minutes and requested any additions, corrections or deletions.

Mr. Fennell stated on the bottom of page two, the fourth sentence should say, “at this point in time, we have not received aid from the county, state or the federal government.” At the end of the meeting, did we summarize because there was a problem with the tape?

Ms. Rugg responded yes.

Mr. Hanks stated on the bottom of page seven, the word “deficiencies” should be “efficiencies”.

On MOTION by Mr. Eissler seconded by Mr. Fennell with all in favor the minutes of the June 20, 2005 meeting were approved as amended.

THIRD ORDER OF BUSINESS Public Hearing to Consider the Adoption of the General Fund Budget for Fiscal Year 2006 and Levy of Non Ad Valorem Assessments

Mr. Eissler opened the public hearing.

Mr. Fennell asked why are we being charged for rent from Severn Trent?

Mr. Goscicki responded in the General Fund budget there is a $4,800 rent charge for office space in Coral Springs. In the Water and Sewer Fund budget, which is not up for approval today, there is a $3,800 credit for rental space in this facility as this item is included in the management fee as part of the general overhead cost we have within our operations, which we allocate to all of our clients as stated in our contract.

Mr. Hanks asked does this budget provide for the repair and ongoing maintenance of the stormwater management system?

Mr. Moore responded yes. There is an R&R Fund for the annual cleaning and culvert inspections and for the pumps. Later on in the agenda we will be replacing some pumps and creating a fund for this purpose based on the life expectancy.

Mr. Goscicki stated there is specific capital outlay of $118,000 for capital improvements as stated on page 15 of the budget. In addition, there is another $216,000 in reserves.

Mr. Fennell stated page 19 also has a breakdown of the reserves.

Mr. Hanks asked at the end of the next fiscal year, will we have over $1,000,000 for future expenditures for pump and canal maintenance?

Mr. Moore responded yes.

Mr. Fennell stated we are going to spend $500,000 of this $1,000,000 later in this meeting.

Mr. Hanks stated the non-ad valorem assessment increased from $82.04 to $86.26, which is a four to five percent increase.

Mr. Fennell stated our canal bank maintenance costs are still fairly hefty.

Mr. Eissler stated Mr. Moore was going to give us an explanation.

Mr. Moore stated two meetings ago, the amount was $130,000. However, I believe you will find at this point in time, the amount is less combined with the canal dredging and general maintenance, according to page 13. One of our sister District’s entered into a joint program with the city allocating $50,000 to a $100,000 a year project to clean the canal banks. This year, I allocated $35,000. You may have $50,000 left over from the culvert inspection and cleaning for a total of $85,000.

Mr. Hanks asked are you also considering the removal of exotics?

Mr. Moore responded yes. We should probably look at increasing this line item over the next couple of years as this will be a city wide shared program.

Mr. Fennell asked has the city agreed with us?

Mr. Moore responded I was told they are interested. However, since there are three Districts, I am not sure we can receive a share from each of the three Districts. It may be a shorter number from their side. If you meet with them to come up with a number they agree to match, I believe you may have some success in negotiating with them.

Mr. Fennell asked who can do the negotiating for us?

Mr. Moore responded I will work that out with someone in the next week or so. I do not think they have the money this year because they allocated another $50,000 towards their next budget. This is something that needs to be looked at with them over the next several months so they can allocate their share nine months from now. Their budget could be amended if we get with them shortly, but they more or less are concentrating on the northeast corner of the city for the test programs.

Mr. Fennell stated it is worth a phone call to see if they are interested.

Mr. Moore stated I will call them tomorrow.

Mr. Eissler stated I heard Mr. Keller is leaving. Have you made any progress on a replacement for Mr. Keller and Mr. Moore?

Mr. Goscicki responded for Mr. Moore’s position, we are doing a regional wide search throughout Florida and already have some candidates. Obviously if we need to, Severn Trent will bring someone in to serve in the interim while we are recruiting to fill this position on a permanent basis. With regard to Mr. Keller’s position, I will be serving in the interim while we go through the process of getting someone on board.

On MOTION by Mr. Eissler seconded by Mr. Fennell with all in favor the public hearing was closed

Mr. Goscicki stated the resolution before the Board is 2005-5 adopting the final budget for fiscal year 2006.

On MOTION by Mr. Fennell seconded by Mr. Eissler with all in favor Resolution 2005-4 adopting the General Fund Budget for Fiscal Year 2006 was adopted.

Mr. Goscicki stated the next resolution for the Board’s consideration is 2005-5 levying a non ad valorem assessment for fiscal year 2006.

Mr. Fennell asked how do we stand with the rest of Coral Springs as far as the non ad valorem assessment?

Mr. Moore responded on Wednesday night the Sunshine Water Control Board set their non ad valorem assessment at $83. Last year’s assessment was $53. The reason for the large increase was due to non-reimbursement from FEMA. There would normally be a $6 to $8 increase.

Mr. Hanks stated the difference in these budgets is the age of the system, extent of owned canals versus ditches and swales privately maintained and the area of canals and water systems to be maintained by the District.

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor Resolution 2005-5 Levying a Non Ad Valorem Assessment for Payment of Maintenance Costs for the Period October 1, 2005 through September 30, 2006 was adopted.

FOURTH ORDER OF BUSINESS Consideration of Change Orders with Intrastate Construction Corporation

A. CO#1 & Final for Water Plant No. 1 and Filter No. 6 Rehab for a Net Increase of $1,034.01

Mr. McKune stated Change Order No. 1 is for the small water plant. The only backup to this item is Pay Request No. 9, which is final and shows a reduction in the allowance amounts. There was a small overrun, however this completes the project.

Mr. Fennell asked what was $1,000 for?

Mr. McKune responded for installation of the pipe and 8-inch gate valves.

Mr. Fennell asked was it also for the screen enclosure?

Mr. McKune responded the screen enclosure was an additional cost, as well as the pipe work, which was not included in the original amount bid. As a result, there was an excess of $2,150. For the valves, there was an excess of $1,375. Seven items were removed from the allowance which were part of the contract. When you add up the allowance items, plus $2,150 and $1,375, you come up short by $1,000. This is a balancing change order.

B. CO#3 for Wastewater Plants C and D Rehab for a Net Increase of $43,010.87

Mr. McKune stated this change order is for the following items:

Item one is for an additional backup pumping system for Plant D to return activate the sludge, which was requested from the operator.

Item two is the labor the contractor provided to unclog some operating pump systems.

Item three represents additional labor to demolish and remove the concrete slab at the bottom of Plant D. This work is similar to work done to Plant C. There was no indication on the as-built drawings the contractor used for bidding showing there was three feet of concrete. The concrete has been there for 15 to 20 years and is hard. It was difficult for the contractor to remove it and not crack the remainder of the slab. It took a great deal of labor.

Item four is similar to what was done for the rehab on Plant C to install new walkway supports along the existing circular clarifier wall. The existing wall was not secure throughout its circumference and we had to do a great deal of field adjusting and welding to make these supports coherent with the configuration of the wall.

Item five is for scum collection in the transfer system in Plants C and D. After dewatering these plants, we discovered they were inoperable and not worth repairing and had the contractor demolish them and install a new system. The way the plant is configured, the new installation will work better than the original systems if repaired.

Item six is for the contractor to clear sand, sludge and rags from the bottom of both Plants C and D. This work was not in the original contract.

Item seven is the work done after item six, which is the removal and disposal of the sand, sludge and rags found in the bottom of Plants C and D. There is an allowance in the original contract amount of $25,000 to do this work; however, there was more work than anyone realized and the $10,000 represents the additional amount over and above the allowance. This amount was determined by man-hours observed at the job site.

Mr. Fennell asked what happened to the debris?

Mr. McKune responded it was dewatered on-site and hauled out to the landfill.

Mr. Hanks asked is there a way of writing the contracts when we go out to bid to not have change orders for field adjustments or do you feel we are getting a better value by having change orders? The reason why we are rehabilitating the plants is because they are in need of repair.

Mr. McKune responded we can write the contracts so the contractor bids a lump sum and is responsible for giving us a finished product. We can tell him under the specifications he is responsible for making whatever site visits are necessary and to give us a complete bid. However we may end with a high bid amount because there are some estimates he may not be able to determine, especially those items that are below ground. There will also be a statement, which says, “the contractor shall be responsible for any and all things occurring during the project”. I would rather keep track of contractor hours and expenses and pay him for the work he does.

Mr. Eissler stated if the contractor bids everything, he will put a colossal fee in his original bid because he cannot predict the unknown.

Mr. Fennell stated you need some type of contingency.

Mr. Eissler stated until we get into the new plant and start working with the foundation, we will not know what is going to happen.

Mr. Goscicki stated even on a lump sum bid, you still pay for on-site conditions. The contract could not reasonably anticipate several items.

Mr. McKune stated regardless of how you word the specifications, normally the contractor has his attorney review the plans and specifications before he submits his bid.

Mr. Fennell stated if he is smart, he will put in something to cover unforeseen expenses.

C. CO#7 for Water Treatment Plant Improvements for a Net Increase of $51,286.62

Mr. McKune stated this is a final change order to the old water treatment plant expansion program which was a $1,500,000 project. There are two items in this change order. The first is by far the larger of the two items and represents a totally new structure for housing the bulk fluoride delivered to the plant and used in the water treatment system. When this job was originally bid, it was anticipated we would continue using the existing bulk fluoride storage facility. However, after we installed the new fluoride feed pumps, it became apparent the old system was not going to continue in a reliable manner.

We, therefore, told the contractor we would revise the plans to allow him to construct a totally new structure. This would be a small structure, approximately 200 square feet at best. It is a complete structure with foundation, roof, electrical, items that require permits from the City of Coral Springs. We did the design, put in for permitting and started construction but then we had a couple of hurricanes. This building has been under construction for two and a half years. The contractor stopped and started many times, which I would like to say due to contractor’s inefficiencies, but cannot because he went through enumerable subcontractors to get the roofing tile approved and obtained. It took him six months to get an engineer to design and certify the trusses for the roof, which is totally absurd but was a requirement of the city. If we had to do it again, we would have simply done whatever modification was necessary to the old structure and rebuilt it. It also includes the location of the existing piping. In some areas we dug down 12' to find some piping and could not find it. We decided not to dig any deeper because it would have caused other problems. He finally completed the work a month ago. The amount of this change order is $44,844.30.

Mr. Fennell asked is this for the fluoride?

Mr. McKune responded it is for the hydrofluosilic acid or bulk fluoride as delivered.

The second item is due to the city refusing to give us a permit on the existing water plant facility because the old bathroom, which has been there for 25 years, is not ADA compliant. We ended up having to break out one of the walls of the bathroom and move into the laboratory, reconstruct the laboratory cabinets and make sure we could gain access with a wheelchair. In addition, we had to put some ADA acceptable wheelchair ramps at the entrance to this building before the city would finally give us a CO. This is a continuation of the permitting difficulties we had with the city. It seems like every time they send a new permit reviewer to look at the plans, we get another opinion and when they send the inspectors out, they do not always agree with the reviewer’s opinions.

Mr. Eissler asked who negotiates with the city on these matters?

Mr. McKune responded Mr. Moore and I both tried to negotiate with the city. Mr. Moore has done a great job. We complete the plans and before we go to bid on the project, we sit down with the City Building Department and give them a preliminary set of plans, ask them to review them and pay them overtime for their review. After the contractor receives the award of contract, he goes back to the city and gets the building permit; at which time we receive more comments and end up having to revise the plans, which normally involves change orders. Largely it is a matter of opinion on some of the items they want to add but if we do not add them, we do not receive the permit.

D. CO#14 & Final for Phase 1 Wastewater Plant Improvements for a Net Decrease of $10,778.85

Mr. McKune stated this is for the large Plant E project for a reduction in the contract amount of $10,778.85. The reduction is due to a metals allowance of $10,778.85, which was not used. This number was originally $50,000 as part of the bid amount.

On MOTION by Mr. Eissler seconded by Mr. Fennell with all in favor Change Order No. 1 & Final with Intrastate Construction Corporation for Water Plant Number 1 and Filter Number 6 Rehab for a Net Increase of $1,034.01; Change Order No. 3 with Intrastate Construction Corporation for Wastewater Plants C & D Rehab for a Net Increase of $43,010.87; Change Order No. 7 with Intrastate Construction Corporation for Water Treatment Plant Improvements for a Net Increase of $51,286.62 and Change Order No. 14 & Final with Intrastate Construction Corporation for Phase 1 Wastewater Plant Improvements for a Net Decrease of $10,778.85 were approved.

FIFTH ORDER OF BUSINESS Consideration of Award of Contract for the Replacement of Five Storm Water Pump Engines

Mr. Moore stated we have five engines that are more than 15 years old in pumping stations one and two. Three pumps and engines were replaced in the last three years. You now need five more engines replaced, one which actually broke down and is now sitting in the building. We bid the engine replacements and took bids three weeks ago. We received bids from two companies, whereby FPI had the lowest bid at $452,045. I recommend awarding the contract to the lowest responsible bidder. This company has been doing all of the work for our sister Districts and CSID for the past five years. You currently have $870,000 in your R&R fund. This expenditure takes the amount down to half. Based on the coating we are putting on the pumps and servicing them every seven years, the pumps should last 50 years. Right now the engines are getting anywhere from 10 to 15 years.

Mr. Hanks asked is that normal?

Mr. Moore responded yes. We only use them during hurricane season. They are heavy industrial engines and we do not use them anywhere close to capacity. For some reason, the engines do not seem to last as long but you can probably get 10 to 15 years out of them. We have been planning for this expenditure for eight or nine months.

Mr. Fennell asked what shape are the five engines in right now?

Mr. Moore responded you actually have seven engines but are only permitted to run six at one time. One of the spares is down. The other engines are less than three years old but they need replacement. However, they will get you through the next three or four months because they are currently running.

Mr. Fennell asked what is the schedule for replacement?

Mr. Moore responded they are expediting one of the engines for us, the one that is down and it will hopefully be here in six weeks or less. The other four will take 10 to 12 weeks for delivery.

Mr. Hanks asked is the longevity of these motors a function of them being run by propane as opposed to diesel?

Mr. Moore responded there are three different heating values between the diesel, propane and LP. The Caterpillars are the only ones running by LP, which is a modified diesel engine with a different carbonation set up. It burns hotter but that does not seem to be the problem with the engine failure. They just seem to wear out.

Mr. Fennell asked what is the difference between replacing and rebuilding?

Mr. Moore responded we received a price to rebuild the broken system for $20,000. For $50,000, you will get a new engine. Rebuilding is taken on a case-by-case basis after you have longevity. They have a five-year warranty. I had occasions in other Districts and here where a piston rod broke and I went through the crankshaft.

Mr. Fennell asked how are the engines maintained and on what schedule?

Mr. Moore responded the oils are changed fairly regularly and exercised once or twice a month during non-hurricane season. In hurricane season you are maintaining by operations.

Mr. Hanks asked what is included in the $452,000 estimate?

Mr. Moore responded the removal and installation of five engines and the labor.

Mr. Hanks asked are we looking at a unit price of $90,000 per engine?

Mr. Moore responded yes.

Mr. Hanks asked are these pumps matching what was previously installed?

Mr. Moore responded we performed a pump test to make sure we obtained the proper size engine for this station.

Mr. Hanks asked will the pump curve match our permitted discharge?

Mr. Moore responded yes. As a matter of fact, it matches more closely than some of the existing ones.

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the contract for the replacement of five storm water pump engines was awarded to FPI in the amount of $452,045.

SIXTH ORDER OF BUSINESS Questions and Comments on Proposed Water and Wastewater Fund Budget for Fiscal Year 2006

Mr. Eissler stated we do not have to approve this budget today.

Mr. Lyles stated the Board approved the proposed budget at the last meeting and set a public hearing for the next meeting.

Mr. Fennell stated according to page six, the money we have in the bank is generating poor returns.

Mr. Eissler stated we addressed this matter a few months ago.

Mr. Fennell stated we thought it would do better. We have $8,000,000 and we are going to receive $133,000 in interest. I am looking for someone better to come in who knows how to invest. I know we are going to be paying out some money this year but I think most of the money market funds are paying 2%. Mr. Keller was able to get us more money. I think we were only talking about interest income of $80,000 to $90,000 a few months ago. Even so, there has to be something better than 1%. Is this money we cannot do anything with?

Mr. Eissler responded yes.

Mr. Goscicki stated we do a lot of fund management for Districts around the state. I can get with our Fiscal Manager. The majority of our Districts utilize state pools.

Mr. Fennell stated I know we are going to spend some money this year but I do not think we are going to spend more than $2,500,000 this year and we are still going to have $300,000 to $400,000 coming in. You can purchase at least six months worth of CD’s from the Treasury.

Mr. Eissler asked are we limited to what we can do?

Mr. Lyles responded Chapter 218 of the Florida Statutes provides for limitations on any local government’s ability to invest surplus funds and determine which funds not needed immediately to fund operations. This does not apply to bond proceeds. There are four categories of ultra safe investments. The default provisions are the ones the statute says any local special district can invest its funds in. If you want to invest funds in a different kind of investment vehicle, there is a process by which you apply to the state and get permission. If you want to increase the yield on the funds you have, the one path left open to you is to get a plan approved for investment of your funds. They will certify if it is a safe investment.

Mr. Goscicki stated we currently do a passive rather than active investment strategy.

Mr. Fennell stated if we are investing in T-Bills, we may not be doing the right thing.

Mr. Goscicki stated we will get back to you next month.

Mr. Fennell stated tell us what we are getting right now and explore what else we can do.

Mr. Lyles stated as a requirement of the special act, the Board needs to approve the proposed budget by Resolution. By title, Resolution 2005-6 reads:

“A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE CORAL SPRINGS IMPROVEMENT DISTRICT APPROVING THE PROPOSED WATER AND SEWER ENTERPRISE FUND BUDGET FOR FISCAL YEAR 2005/2006”

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor Resolution 2005-6 as stated above was adopted.

SEVENTH ORDER OF BUSINESS Staff Reports

A. Attorney

There being no report, the next item followed.

B. Engineer - Monthly Water & Sewer Charts

Mr. Moore stated the security cameras and the automatic opening for the gate should be working by this Friday and you will receive your passes at the next Board meeting. At that point in time, you can discuss what you want to continue doing with security services as we discussed in the past.

Mr. Eissler asked did we approve the fence?

Mr. Moore responded yes. It should be installed in the next couple of weeks. The work has been authorized by your last approval and permits are currently being pulled from the city.

Mr. Fennell asked when do we officially end our services with Navarro?

Mr. Moore responded according to the contract, you have a 30 day registered receipt of cancellation of their contract.

Mr. Goscicki stated we recommend the Board wait until the new system is installed and working.

Mr. Moore stated I will give you a report next month.

Mr. Fennell asked did we receive any additional feedback from Navarro?

Mr. Moore responded they complained to Mr. Keller and we never heard another word from them.

Mr. Eissler asked what are we doing about the gatehouse?

Mr. Moore responded the city asked me to move it in order to receive the permit. It cannot be permitted where it is. We put the “ugly white tent” back up but one of the hurricanes ripped it apart. Since we are not going to have the gatehouse, we decided to put the green shelter back up so we have some protection for the security guards. They have to give me a 30 to 90 day notice to remove it and no one has complained about it.

Mr. Fennell stated we will not need it in 30 days.

Mr. Moore stated that is what we planned on. As of the middle of last week, the sodium hydrochloride building is working. We are ecstatic. It seems like all of the operators like it and it is somewhat convenient and safe.

Mr. Eissler stated we still have some canisters on the ground.

Mr. Moore responded since the chlorine has been working on the water plant side for three or four weeks, I suggest we watch it in the next month to make sure it works properly. At that time, we will start mixing some of the gas and using all of our cylinders until we have two cylinders, one for water and the other for wastewater. After three months, we will have only one cylinder on each side, expand the last cylinder and keep one cylinder for a spare for six months. If we have no problems after six months, we will remove the last cylinder. What is nice about the sodium hydrochloride is we can put it in a cart, carry it around and pump it in case of an emergency. We might want to change the schedule or possibly keep the equipment as a backup but I do not think you want the wear, tear and maintenance of a vacuum system. We want to ultimately get the cylinders out of here and eliminate the equipment.

Mr. Eissler stated in the event something did go wrong, we could procure canisters again fairly quickly.

Mr. Moore stated as long as we have the vacuum device.

Mr. Hanks asked what are the costs to maintain the backup system?

Mr. Moore responded there are no extra costs because the chemical is already there. However, if it went dormant for a year or two, you incur an expense to bring them back online.

Mr. Goscicki stated you would not want to keep the chlorine any longer than you need to. The whole purpose for the chlorine was to eliminate the safety problem. The challenge with the sodium hydrochloride is the complexity of the feed pump mechanism as there are nine different feed points.

Mr. Eissler stated there are actually 20 different feed points.

Mr. Goscicki stated if something happened, you can put in a bunch of inexpensive pumps to pump directly. It would not be optimum but it could be done more easily than putting your system back up.

Mr. Moore stated the system has been running flawless in the last week. If it runs flawless for the next 30 days, you can make bigger decisions.

Mr. Goscicki stated our engineers are confident this is the right direction to go in.

Mr. Fennell stated it is dangerous to have a chlorine system as a backup.

Mr. Moore stated since this is my last meeting, I would like to give the Board a placemap with a city map on one side and an aerial, topography map on the other. You can use these maps to reference different projects. When Mr. Hanks joined us, he asked for a schematic flow diagram of how the water and wastewater plants work. Therefore, we put together a flow diagram of the plants, showing how the water and wastewater plants work with the deep well and water wells offsite.

Out of the five Districts we applied to FEMA for, one District received no money, CSID only received 5% of their money while the other Districts received 100% of their monies. We are filing some appeals through the normal process. If necessary, we may have to get legal involved, but at this time this is a non-legal matter.

Mr. Eissler asked how much money are you planning to receive?

Mr. Moore responded $83,000 for CSID. We currently received $5,000 to $8,000. I appreciate the opportunity to be able to be of service to you. Hopefully in the years we have been here, we have made a couple of dents in all of the problems. It has been a pleasure serving the Board.

The Board thanked Mr. Moore.

Mr. Eissler asked did we receive the new generator pumps?

Mr. Moore responded we have not received them but we ordered them after the last meeting.

C. Manager

Mr. Goscicki stated I would like the Board members to know Mr. Keller has left Severn Trent. We wish Mr. Keller the best. Obviously this has created some transition issues for us and I will be filling in as the District Manager until we can get a permanent replacement. We are also actively proceeding to find a replacement for Mr. Moore. If we do not recruit someone between now and the time Mr. Moore leaves, we will use existing staff within Severn Trent in the interim.

Mr. Eissler asked who is the contact person for Severn Trent?

Mr. Moore responded there is no contact person. I would like to introduce Mr. Ward Crowell who is the Field Operator maintaining the force mains and lift stations. Mr. Doug Height who has been my “right hand man” for the last six or seven months is in charge of operations. I am turning most of my day-to-day operations over to Mr. Height in the interim and getting him involved in some of the drainage activities. Finally, I would like to introduce Sean who is one of our drainage workers. These are the guys who keep the plant running and receive the calls on the weekend.

Mr. Eissler asked can we contact these individuals in Mr. Moore’s absence?

Mr. Goscicki responded no. We will appoint someone before Mr. Moore leaves to take on that responsibility. We would not expect the Board or the public to have to figure out who to call. We will either appoint a permanent replacement or bring someone in the interim.

Mr. Eissler asked before you do so, will the Board be notified?

Mr. Goscicki responded yes. We will send you a letter between now and the next Board meeting to let you know what we are doing.

Mr. Hanks asked when is Mr. Moore’s last day?

Mr. Moore responded August 16^th.

Mr. Hanks stated I would like to ride along with Mr. Moore so we have some continuity. Transitioning to another staff member can be difficult.

Mr. Goscicki stated there has been discussion at prior Board meetings regarding management services and our roles and responsibilities. I had the opportunity to meet with each Board member individually along with Mr. Keller prior to the last meeting to further discuss some of our roles and responsibilities as Manager of this District. One of the issues we were concerned with was the role of supervisor. By contract, we are required to supervise and manage the employees of the District. For the last several months, there have been some issues and concerns, some which have resulted in some significant changes. We had an altercation between two employees several weeks ago that was extremely serious. One employee resigned as a result and we are still evaluating the appropriate course of action for the other employee. We want to provide you with the management and supervision our contract requires. We are going to be moving more assertively and proactively to make sure we are providing this supervision and address issues on a proactive basis and not have continued miscommunications or multiple communications.

Mr. Fennell stated we need certain defined rules and guidelines regarding altercations.

Mr. Goscicki stated absolutely. The current personnel policies deal with these types of infractions. The investigation the company is still conducting deals more with the level and extent of responsibility of the individual parties. In terms of an open door policy, Severn Trent Services openly welcomes input from any and all of our employees throughout the organization in terms of bringing forward positive suggestions, but also has a formal structured program for a whistleblower type of program. We have employees who have identified concerns or issues within the organization, within their operation and within the service we provide. Severn Trent, as a company, takes this matter very seriously and welcomes input from our employees and the employees we manage as part of our District services. It is the way we assure we are not only getting the positive influence but to know where things are going bad, whether it is something we are doing or others are doing. We want to make sure our employees and the District employees have a safe environment to be able to bring these issues forward.

Mr. Fennell stated I think we should see what the policy looks like. We should have a similar policy in place for CSID.

Mr. Goscicki stated we will happily share that with Mr. Jan Zilmer. We need to make sure we do not have staff moving off in different directions, whether that is operational, financial, staffing or otherwise which has not been sanctioned by the Board and/or approved as appropriate by the manager.

Mr. Hanks stated I am looking for a written statement we can include as part of our policies.

Mr. Goscicki stated this is not a policy. This is what our contract requires us to do. We skirted around this issue because of some interpersonal issues. You are saying this is causing more problems than it is fixing. You pay us to manage CSID and we need to be the manager.

Mr. Hanks stated three key staff members have left within the last six months.

Mr. Goscicki stated part of the concerns we share is we have a situation, which has gotten worse not better over the last several months. There has been confusion among staff as to who to report to and what responsibilities they have. As manager, we need to clarify we are the manager, staff reports to us, not to the Board. We have a grievance process employees can go through. Part of this process is to bring matters to the Board.

Mr. Eissler stated I do not have any problem with that. The problem is we do not have a manager. We have gone through two managers in a few months. Until Severn Trent gets organized and we have a manager who stays awhile, it is hard for the employees to know who they report to.

Mr. Goscicki stated they report to me. In the meantime, I will be taking on the role of interim manager. I will be here as often as I can and I will not be more than a phone call away. I manage operations around the state and do not see my managers on a day-to-day basis. We have capable people working for the District and I am able to manage them through telephone conversations, emails and other meetings.

Mr. Fennell stated a local manager is not necessarily our manager. This is a change for all of us. When Mr. Moyer was our manager, we were talking to the boss. In this case, we do not know who the boss is. Even though we may approve of a particular manager, there may be someone else who is actually the manager. This is the issue we are concerned about and one that we have not come to terms with.

Mr. Goscicki stated I take exception because your manager has full and complete responsibility for meeting the needs of their clients. Other people in the organization support them. If they want to make changes to our contract, there are internal review and approval processes. Not only are they limited from meeting all of the requirements of our service agreement with you, they are expected to make sure all of requirements of our service agreement are met.

Mr. Hanks stated sometimes when we were looking for an answer from Mr. Hans or Mr. Keller, we did not receive an answer at the meeting and they would always say they needed to do some research. I understand the need for further research but on some issues that does not leave a comforting feeling.

Mr. Goscicki stated the only items that should be checked up on are contractual issues. Issues outside of the contract come to me for review and approval to make sure it is consistent with how we are dealing with other clients.

Mr. Hanks stated this issue came about when we started asking about what services Severn Trent provides, its roles and responsibilities. When we asked Mr. Keller, he put the issue on hold.

Mr. Goscicki stated some of that was due to Mr. Keller being relatively new and not being familiar with some of the additional services we provide from our operating services side of the business. You were looking for something Severn Trent Services as a company does versus what we are doing right now under our contract.

Mr. Hanks stated we were asking him what was going on under the current contract so we had a better understanding.

Mr. Eissler stated when Mr. Moyer was here if there was a question, it was answered and everyone accepted it. We have not had that happen since he left because we have not had a District Manager who has been around long enough. The two managers we had ending up having to go to someone else for an answer. Until these issues are resolved, there will be problems.

Mr. Goscicki stated if there is an issue where a manager needs to review and resolve issues internally with the company that is a learning curve on the part of the District Manager. This in no way changes the relationship of the manager to the District employees. The District employees still have a responsibility to work through the manager and the manager has a responsibility to find the answer to the questions.

Mr. Eissler stated from a practical standpoint, Mr. Moore is gone. In regards to the people who run the day-to-day operations, if there is a question or problem there is no Mr. Moore to talk to.

Mr. Goscicki stated there will be. Before Mr. Moore leaves, a person will be appointed to take over his duties.

Mr. Eissler asked will they be an engineer or P.E.?

Mr. Goscicki responded not necessarily. Mr. Moore does not perform engineering functions. Perhaps you should hear from Mr. Kaas who is my boss.

Mr. Kaas stated in listening to the discussion, one of the items Mr. Goscicki has not talked enough about is on the operating side, which Mr. Goscicki is responsible for. The O&M of the water and wastewater system is something we do day-to-day across the state and have in excess of 250 employees at other plants throughout the state. The resources Mr. Goscicki is referring to within the company include P.E.’s who can provide support to the existing employees as part of the day-to-day operations. Beyond that, we have a Technical Services Group, which we have not used to troubleshoot problems encountered at the site or at these facilities within the fenced area or in the distribution collection systems. Those resources are available and part of our contract.

Mr. Eissler stated people need someone to contact.

Mr. Goscicki stated we need a single point of contact the employees can go to for questions. This point of contract will have the resources of Severn Trent to resolve any issues.

Mr. Eissler stated it sounds good and I hope it works.

Mr. Hanks asked did you have a clear understanding of Mr. Keller’s job?

Mr. Eissler responded no. I spoke to him but he was not here long enough. He was a very nice person, but he was inundated with work, traveled a tremendous amount, etc.

Mr. Fennell stated I felt he did a good job as far as handling his employees.

Mr. Eissler stated he delegated responsibility well.

Mr. Fennell stated he was listening to his employees and gaining their confidence.

Mr. Hanks stated it has to be hard coming into an organization where people have been around 10 to 15 years.

Mr. Goscicki stated the manager’s job is similar to the job of a city manager. They are the city manager for the Board who are the elected officials. Your comparable role is as city council. As in any city, the city’s manager does the planning, coordinating and control of the organization including the staff, monies and determines how to best apply those to the goals of the organization. There is a great deal of coordinating, delegating, reviewing and checking to make sure there is an understanding of what the issues are, that we are putting the right resources to address those issues and moving forward in terms of addressing the goals of the organization.

Mr. Eissler stated we will see what happens next month after Mr. Moore leaves.

Mr. Goscicki stated Mr. Moore is going to be one of our clients now.

Mr. Eissler stated on the monthly water and sewer charts the readings are right where they should be.

D. Complaints Received/Resolved

The report is attached hereto and is a part of the public record.

EIGHTH ORDER OF BUSINESS Supervisor Requests and Audience Comments

There not being any, the next item followed.

NINTH ORDER OF BUSINESS Approval of Invoices

On MOTION by Mr. Eissler seconded by Mr. Fennell with all in favor the General Fund invoices for June 30, 2005 in the amount of $1,200.00 and the Water and Sewer Fund invoices for June 30, 2005 in the amount of $1.614,483.62 were approved.

Mr. Eissler presented Mr. Moore with a plaque of appreciation.

Mr. Hanks stated for the next meeting we should discuss how we want this organization to proceed for the future and how Severn Trent is going to structure the organization. I am going to be spending more time with staff in regards to operations.

Mr. Goscicki stated over the last year we have been getting Mr. Moore more engaged with the resources of Severn Trent Services. Mr. Moore participates on a weekly conference call with other operations managers around the state as he gets the benefit of participating with other managers in learning about their issues and vice versa. Mr. Scott Jones and Mr. Mike Acosta performed an evaluation of the facility in terms of cost savings and we would like to bring their findings to the Board for further discussion. We feel there are some real opportunities we can move forward on. When you hire Severn Trent you should feel you are hiring the entire company. For five of the last six years, you were not receiving those services. In the last year, we tried to give you the benefit of our operational expertise. Our ongoing goal is to make sure you are receiving the full value of what you are paying for from Severn Trent and have this resource available to you.

Mr. Hanks stated we currently are paying you $220,000.

Mr. Goscicki stated our total fee is $199,999 when you take the pluses and minuses. You were paying $240,000 in 1996. Now 10 years later, you are paying $40,000 less in terms of our fee structure.

Mr. Eissler asked is that for both funds?

Mr. Goscicki responded yes, for the General Fund and the Water and Wastewater Fund.

Mr. Hanks asked what does this amount include?

Mr. Goscicki responded management, accounting and fiscal services, records management, field support, technical support, rent, computer fees, etc.

TENTH ORDER OF BUSINESS Adjournment

On MOTION by Mr. Eissler seconded by Mr. Fennell the meeting was adjourned at 5:39 p.m.

Glen Hanks Robert Fennell

Secretary President