MINUTES
OF MEETING
CORAL
SPRINGS
IMPROVEMENT
DISTRICT
The regular meeting of the
Board of Supervisors of the Coral Springs Improvement District was held on
Present and constituting a quorum
were:
Bob Fennell President
William J. Eissler Vice
President
Glen Hanks Secretary
Also present were:
Michael Pawelczyk Attorney
John McKune Engineer
Doug Hyche District Staff
Ilana Rabone Severn
Janice Moen Larned Severn
Cedo DaSilva Ch2M-Hill
Bill Bensen Keefe, McKullough
Mr.
Fennell called the meeting to order and Mr. Petty called the roll.
SECOND ORDER OF BUSINESS Approval of the Minutes of
the April 17, 2006 Meeting
Mr. Fennell stated each Board member
received a copy of the April 17, 2006 minutes and requested any additions,
corrections or deletions.
On page 13, in the seventh line, the
word “food” should be “flood”.
Mr. Petty stated on page four in the
first sentence, “not” should be deleted.
On MOTION by Mr. Eissler seconded by Mr. Fennell
with all in favor the minutes of the April 17, 2006 meeting were approved as
amended.
THIRD ORDER OF BUSINESS Hurricane Debris Removal
and Canal Bank Restoration Status
Mr. Petty stated I will discuss this
item in two parts. The first part is the
status of the debris and the bank material.
We are past the halfway point.
The contractor has been very responsive on the main part of the
contract. He turned out to be a very
smart operator in making sure he gets paid the proper amount of dollars. We do not exactly get the bargains we like to
get from our contractors, but the work he is doing is very good. The equipment he is using is also very
good. He has been responsive other than
a few scheduling problems in the first month as they were trying to get into a
rhythm. We are now working on time.
Mr. McKune stated as of this
morning, the contractor is totally complete in removing all of the trees. The entire District is clear. Now they are shaping the banks and adding
fill. They expect to be totally complete
within 30 days, but are aiming for three weeks subject to the weather. As Mr. Petty said, they are doing a great
job.
Mr. Petty stated our punchlist is
going to be minimal.
Mr. Hyche stated there will be a few
sod replacements.
Mr. Eissler stated they did a good
job.
Mr. Petty stated as part of the
process, Mr. Hyche had the water management guys follow the contractor to
inspect each canal as they were cleared.
Staff notified the residents of our impending entrance into the canals
for the removal of the debris. In turn,
the residents have been contacting us to see if they can get a free irrigation
system. Most of them were good about it
and understood what was going on and did not have an issue. Out of all of the canals, we may have had
less than 25 people calling in angry about their irrigation system.
Mr. Eissler stated that is terrific.
Mr. Fennell stated it is a huge
relief.
Mr. Eissler stated if there is
another hurricane, there will be a lot less trees in the canal.
Mr. Fennell stated we made our
mid-May commitment.
Mr. Petty stated which was
optimistic at the time.
Mr. Fennell stated this is good
news.
Mr. Petty stated as we discussed,
there are still quite a few trees standing which is a potential threat to the
drainage system of equal nature to what we saw after Hurricane Wilma. If we are going to be pro-active, we
discussed going after those trees. After
spending this much money, you have to look at the trees as a threat in this
area. To what degree they are a threat,
we discussed this adamantly. We obtained
actual bids from competitive companies since the prices we received from Arbor
Tree seemed high. I think they estimated
$1,400,000. It appears the apparent low
bidder is Styles Landscape Company who will remove all living tree material in
our easements and rights-of-way for $937,000.
I asked Mr. McKune to do this before the land was actually cleared. He would have preferred to remove the trees
after the land was cleared to get better count of the trees but we had some
timing issues.
Mr. Fennell asked how long is this
quote good for?
Mr. McKune responded 90 days.
Mr. Eissler stated for $937,000 they
are going to remove trees and shrubs for 25 miles of canals from the canal bank
15 feet back.
Mr. McKune stated from right-of-way
to right-of-way.
Mr. Fennell stated in some cases, it
may be more than 15 feet.
Mr. Eissler asked will they remove
everything?
Mr. McKune responded yes.
Mr. Fennell stated there are still
some Australian Pines out there.
Mr. Eissler asked how much does it
cost per tree?
Mr. McKune responded between $800
and $2,000 per tree.
Mr. Eissler asked to remove the trees
and stumps?
Mr. McKune responded right to the
stump. The Australian Pines cost $15,000
to $20,000 per tree for removal.
Mr. Petty stated the one outside of
the water plant building cost $6,000 to $7,500 to remove.
Mr. Eissler asked will FEMA pay?
Mr. McKune responded NRCS covers
75%. However, they will not pay for the
second job.
Mr. Petty stated until we have the
money, there is no guarantee.
Mr. Fennell asked when do we get
money from the Federal Government?
Mr. McKune responded unfortunately
the contractor has yet to submit a pay request.
In fact, we agreed with him that he is approximately 100% completed with
the tree portion, which is more than half the job.
Mr. Petty stated since we inspected
the work as he has been going along, paying so much all at once does not bother
me. If we had not been doing the
inspection all along, I would be concerned about this much money going out the
door before we completed the punchlist.
Mr. Fennell asked when do we get
paid?
Mr. McKune responded as soon as we
turn his request for payment into NRCS.
We are told repeatedly the wait will not be too long.
Mr. Fennell asked what is the timing
of the cashflow?
Mr. Petty responded we are getting
no guarantees from NRCS. We are hoping
to get the money after we pay the invoices.
Once the money goes out the door, within 90 days we are hoping to get
the money back.
Mr. Fennell asked how soon do we
have to pay Arbor Tree?
Mr. Petty responded we have to pay
them. We can only get reimbursement from
NRCS on a paid invoice submittal.
Mr. Eissler stated we have to be 90
days out. Are we going to have to borrow
money?
Mr. Fennell responded no. Do we have $1,950,000 in reserves?
Mr. Petty responded we have
$1,000,000 in the Reserve Fund for our drainage.
Mr. Fennell stated according to last
month’s statements, there was another $950,000.
Mr. Petty stated we may have cash,
but I do not think we have another $900,000 in unaccounted carry forward. Between what is in the Reserve Fund for
drainage and in the Enterprise Fund for capital projects, we have more than
enough cashflow for this current situation.
Mr. Fennell stated if you look at
the first page of our financials, for the General Fund there is $951,000 in the
State Board of Administration. Are these
our assets?
Mr. Petty responded yes. That does not include what vendors may be due
to be paid.
Mr. Fennell stated I understand but
we have $1,900,000 somewhere.
Mr. Petty stated we do not want to
start allocating anything out of that fund other than the $1,000,000 reserve at
this time. If you have monies in your
bank account from this year or prior years budget where you saved a few dollars
and now you have $400,000 in an unreserved carry forward, you never want to
take that money and spend it unless it is from the audit. We should pull this number from the audit
because it comes from a closed book year.
Anything current we may get a bill for.
The fact of spending over budget this year does not guarantee at the end
of the year you will still have this money.
We can have a hurricane next month.
You do not spend the money before the audit. I do not have a number.
Mr. Fennell stated I see a number
designated for reserves and unreserves of $840,000. It looks like we have $1,900,000 in total
assets. They account for how much we
normally spend.
Mr. Petty stated before we allocate
the funds, I would make sure this was carry forward. I apologize for not having this information
for this Board meeting but I did not verify this number.
Mr. Fennell asked when do you spend
the reserves?
Mr. Petty responded whenever you
want.
Mr. Eissler stated maybe never.
Mr. Fennell stated we have
$1,000,000 in designated reserves. Is
there a cashflow issue as far as what is in our General Fund budget?
Mr. Petty responded there is no
program the spending has been allocated for.
In regards to the reserves, it depends on what this Board decided as a
policy. You may recall in our
discussions on emergency preparedness and what levels we would be able to stand
this year, we discussed increasing the reserve.
Mr. Fennell stated I am looking at
the General Fund budget which has been pro-rated for this year to
$965,000. How much do we have in
reserves?
Mr. Petty responded you would have
to look at last year’s audit. We do not
have a finished audit for this year. It
is almost ready to be reviewed by staff and management so we can comment on a
management level.
Mr. Fennell stated it looks like the
State Board of Administration has $1,900,000 of our dollars. This is who we invest with.
Mr. Petty stated this is not the
only source. It is the only source we
can do for an overnight account over the short term. There are other sources approved by the state
for short term use. We can do CD’s.
Mr. Hanks asked what do we have to
maintain in terms of cash on hand to be in compliance with our bonds?
Mr. Petty responded we do not have
an issue on the bonds since they are paid off.
There is no reserve required.
This would be a separate fund. I
apologize for not bringing this number to you, but I was comfortable with our
current financial position.
Mr. Fennell stated we have some
short term bonding potential. We
actually spent $1,400,000 with Arbor Tree.
Mr. Petty stated correct as well as
engineering fees.
Ms. Larned stated $1,900,000 is reflected
in the report we provide to the Board each month. The monthly revenues and expenditures at this
point in time show more revenues than expenditures which is adding to your fund
balance, but it is not for the entire year.
We brought over from last fiscal year $1,400,000 in reserves. This is why you do not want to look at what
is falling at the end of the month because you still have to go the rest of the
year. You can count on the $1,400,000
and how it was audited. Perhaps at the
next meeting, we will be able to answer any questions.
Mr. Petty stated between the Utility
Fund and General Fund, we have more than adequate monies to not only do the
existing tree removal program but also consider removal of the standing
trees. We can either remove all of the
trees or some of the trees. Our sister
District, Sunshine, approved at their meeting last week of removing all the
trees. This is not to influence this
Board in one direction of another, but the issue is already out there for
one-third of
Mr. Fennell stated they are looking
for some consistency.
FIFTH ORDER OF BUSINESS Consideration of
Right-of-Way & Surface Water Management Permit for Expansion of Sawgrass
Expressway to Six Lanes from Atlantic Boulevard to Coral Ridge Drive
Mr. DaSilva stated we are in
discussions with the consultant. Since
we received direction from the Board to model the entire District, we asked
them to provide 10 year and 100 year discharge calculations. We are trying to finalize the numbers so we
can include it in our model. We divided
the District into sub-basin drainage areas and identified any pipes, culverts
and canals. We also calculated the
actual land use at Mr. Hanks request and taken similar size lots and averaged
the square footage. We completed the
west basin and we are half way into the east basin. Once those numbers are finalized and we have
tables and percentages, we can plug those numbers including the discharges from
the Sawgrass and model how the pumps are going to operate under a 10 year
condition as well as a 100 year condition.
Mr. Fennell asked is there an
urgency to approve this permit?
Mr. Petty responded no. We are not asking for a vote at this
time. We have issues with this, but
nothing is coming before the Board for a decision today.
SIXTH ORDER OF BUSINESS Consideration of Work
Authorization No. WA-30 for CSID Storm Water Update
Mr. Petty stated this work authorization
is for the hydrology profile.
Mr. Fennell stated we authorized $30,000
at the last meeting.
Mr. McKune stated this is a request
for $20,000 estimated per month plus surveying.
Mr. DaSilva received two surveying proposals.
Mr. DaSilva stated I would like to
take them back with me because there are differences between the two. For certain work, the District is going to
end up paying anywhere from $200 to $300 per cross section for the survey.
Mr. Fennell asked how many sections?
Mr. DaSilva responded 12 miles.
Mr. Petty stated to do a hydraulic profile
for a portion of the District does not make any sense. How much will it cost the District?
Mr. DaSilva responded $80,000.
Mr. Petty stated this is what I
anticipated.
Mr. DaSilva stated The C-14 canal has
a four mile stretch and there is no elevation difference. You may be able to survey every 1,000 feet.
Mr. Hanks stated you do not need to
do a cross section because we do not see the sludge in the C-14. This is SFWMD’s concern.
Mr. DaSilva stated the C-14 has a
catching swale within the right-of-way at the property line. Some sections are already built. Our property line is flat and varies within
six inches. I do not foresee you having
any more than that. We can be pro-active
and say, “we do not need to survey every 100 feet or 500 feet”. We can survey every 2,000 feet and drive
around with the surveyors so they understand what we are looking for. We are looking for low and high points.
Mr. Fennell stated a surveyor came
to my neighborhood last week and we drove down the outfall. They removed three to four feet from the
Mr. Petty stated there was a berm
constructed to retain water.
Mr. Fennell stated it was not an
isolation berm; it was the top of the canal.
Mr. Petty stated the top of canal is
80 feet with a three foot high berm at the property line to separate us from
Mr. Fennell stated these outfall
canals separate my area.
Mr. Hanks stated I am concerned
about the canals at Sunshine than I am with the C-14.
Mr. Fennell stated the height of the
C-14 actually backs up this canal to
Mr. Hanks stated it depends on how
much they are pushing up because you will have a hydraulic radiance across the
east outfall canal. The north end better
have a higher end than the south.
Mr. Fennell stated this is one
issue. I would like to know the height
of the area. I am surrounded by the C-14
on at least two sides. We are going to
have to talk to the city about the permit.
We keep talking about street drainage but there are big pipes flowing
from one street to another, to the inner canals. My entire street is drained by one 30 inch
main going over NW 1st. We
are supposed to have another inlet in the middle of the block but we could not
find it. The water flows to
Mr. DaSilva stated agreed but we
need to focus on what we can control and what we can change.
Mr. Fennell stated we can change
anything through permits. The city draws
their permit for us for these drains.
Mr. Hanks stated my understanding is
the streets were originally owned by Coral Ridge Properties who then sold off a
master development to homebuilders. They
retained the services of an engineer to the District.
Mr. DaSilva stated an HOA was never
formed. Usually they take care of the
drainage. When you have an HOA, the
homeowners are responsible for the water.
Mr. Petty stated there is no statute
saying the drainage is going through an HOA.
Government is the primary source of drainage. HOA’s sometimes pay for private
infrastructure behind a locked gate but will not handle residential drainage
systems on a street unless it is a private street. The City of
Mr. Fennell stated this was a great
study. It is already revealing not only
issues we have to address but some issues we have to work with the city on. I do not think the city going to initiate the
study. It is going to come from us and
when the study is completed, we will be able to talk to Mr. Levinson and others
at the city and say, “We need to work on this to make sure our city is safe”.
Mr. Petty stated we may get involved
in the repair work since we know how to do it.
One of the reasons we suggested this study is if flooding ever occurred
and we had localized flooding from catch basins filling up, when people inform
us their drainage is backed up and they are flooded out, we have very sound and
scientific reasons for what actually happened.
This is a good reason for us to do the model besides making sure water
flows during a rainfall event, more extreme than what we experienced in the
last 30 years because we have not had flooding other than localized in 30
years.
I am bothered by the engineer’s
proposal for payment because the $30,000 was based on us asking for a ballpark
figure. The survey work was discussed
but we were asking for ballpark figures.
I prefer the proposal from CH2M-Hill have a not to exceed number for the
work. Secondly, they need to decide
whether they will perform the survey every 100 feet or 1,000 feet. I recommend spending the $80,000 in surveying
to try to save $5,000.
Mr. Hanks asked what is the scope of
the survey?
Mr. DaSilva responded surveying 25
feet from the property line.
Mr. Hanks asked around the Sawgrass
Expressway and C-14, Sunshine east outfall, Sunshine west outfall, both sides
and the north boundary?
Mr. DaSilva responded you start from
the property line and go 25 feet on each side.
Mr. Hanks asked 25 feet into platted
Mr. Petty responded we thought we
would have engineering for $20,000. Now you
are asking for a survey costing $80,000 that appears to take longer than a
month to complete. Mr. McKune, Mr. DaSilva
and Ms. Early have done a great job, but I worry about this type of procedure.
Mr. Hanks stated if we sent this out
for competitive bid, we are talking about some serious changes. How is it going to affect our timeliness in
getting this project bid?
Mr. Petty responded I would not mind
doing this but timeliness means something to us. We have to follow the CCNA process since it
is an engineering firm doing specialized work.
Of course we can do it and we have the time to do it. Our engineers can write the specifications
for the survey so we know there are no problems.
Mr. Hanks stated the specifications
were already completed because we received two proposals.
Mr. Petty stated I do not believe we
should concentrate on the $80,000 number because we can look at this number,
prepare another survey and figure out if it is reasonable in our minds. My concern is with the monthly figure versus
the not to exceed number.
Mr. Hanks stated I agree. As far as coming up with a monthly not to
exceed number, we are talking about $30,000 for this study.
Mr. McKune stated $35,000 was
authorized to start the surveying so we would not have to wait until this
meeting to approve the work authorization.
Mr. Hanks asked of the $30,000 we
authorized, how much has already been expended and into what tasks?
Mr. DaSilva responded our fees are
probably $15,000 for the past month, including breaking up the entire District,
adding and subtracting areas and preparing the model.
Mr. Fennell stated this takes us out
a long way because we get our model but we do not have new data. The real question is how much of the new data
works versus the 30 year data.
Mr. DaSilva stated the data has not
been modified.
Mr. Petty stated the original permit
was issued in 1975.
Mr. Fennell asked how valid is the
old data?
Mr. Hanks responded it is not a
question of having old data but having enough data.
Mr. Fennell stated we have enough
data to do a model.
Mr. Hanks stated we have assumptions,
which is what we had in 1975. Our
request to CH2M-Hill was to verify the assumptions made in 1975 were being
followed and the effect of the developed condition.
Mr. Petty stated you are referring
to as-builts.
Mr. Fennell stated as-builts are
different.
Mr. McKune stated the canal
configurations are much different.
Mr. Fennell asked are the heights
significantly different in each area?
Mr. McKune responded yes.
Mr. Petty stated you saw this on the
east outfall.
Mr. Fennell asked were any diagrams
done when the bank was removed?
Mr. McKune responded drawings were
done.
Mr. DaSilva stated we have a berm
elevation for the east outfall canal.
Mr. Fennell stated the question is
how accurate our data is. They have
diagrams showing how it was supposed to look, but no diagram taking three to
four feet off the top of the canal. If
this is true, then we do not know anything.
Mr. Petty stated we have our
history. There are very strong points on
why we should do the model. I agree the
$30,000 amount was to get started. I am
looking for a cost not to exceed number so I am not stuck paying $20,000 a
month for the next year and a half. I
would like this Board to make a decision based on a ballpark number from our
engineer on what the survey will cost.
The engineer should understand the work within our District, not the
exact cost of the survey. However, in
pursuing the calculations and the computer model, he should have enough data to
provide me with a not to exceed number.
Mr. McKune stated we can give you a
very good not to exceed number for the formation of the model and option one or
two. You can play the “what if” game for
a long time but if two pumps go down for repair, I want to do the work on an
hourly basis at your request. The
majority of our work is building the model, which Mr. DaSilva and his staff are
doing right now.
Mr. Fennell stated build the model.
Mr. DaSilva stated the two models
should not exceed $40,000. We should
have the model for the next meeting.
Mr. Petty asked do you think the
survey work will be done that quickly?
Mr. Fennell responded this is
without the survey work. You come back
and put the data in before the survey work.
Mr. Petty asked will that be another
two months?
Mr. DaSilva responded no. It is an assumption of what would happen if
we lowered it down and raised it.
Mr. Petty asked what is the not to
exceed number for CH2M-Hill’s side of the work sans the survey?
Mr. McKune responded it is the cost
of the data. We will give you a number
in a couple of days.
Mr. Fennell stated Mr. DaSilva gave
us a number of $40,000.
Mr. Petty stated without knowing how
much money had been spent to date.
Mr. Eissler stated I like the idea
of having a not to exceed number but they do not know what is going to
happen. Mr. McKune is very good at
submitting change orders. If they said a
not to exceed number and the job is not completed, we are not going to go
anywhere else. I know what you are
trying to determine and agree with you, but from Mr. McKune’s standpoint,
unless they give us some numbers it is not going to make a difference because
we are going to pay to get the job done.
I am all for saving money on the survey work. I can survey the C-14 canal. The elevation cannot change by inches and I
can see saving money by not going every 500 feet. We are going to have to rely on our
consultants to determine the cost because we want the data.
Mr. McKune stated we do not have a
problem with a not to exceed number when we can thoroughly define the
work. If we have an open ended
agreement, someone will cancel on us. We
end up giving you a not to exceed number and coming back to you for overruns.
Mr. Fennell stated surveying is not
in the scope.
Mr. McKune stated the sub-consultant
fee is for surveying.
Mr. Eissler asked will the surveying
be bid out?
Mr. Petty responded Mr. McKune
already bid it.
Mr. McKune stated we need a local
surveyor.
Mr. Hanks asked what companies have
you received proposals from?
Mr. DaSilva responded from Douglass
Levin & Associates and Dean Gershire.
One was for $80,000 and the other was for $100,000 or $300 per cross
section compared to $150.
Mr. Hanks stated as a Civil
Engineer, I approached Dean Gershire and other firms providing surveying
services for a third party. He is good
but I found his prices to be on the high end rather than at the middle or low
end. As part of my duty to the community
to keep an eye on the budget, I have seen numbers from various firms at half of
what is out there. You got a good
differential of high and low bids.
Mr. McKune stated the main thing is
competency, not cost.
Mr. Fennell stated I suggest we
approve the work authorization with the conditions CH2M-Hill not exceed $40,000
and the sub-contractor not exceed $60,000.
If you need more money, come back to the Board but that should get you
started.
Mr. Hanks stated I agree but I
request another condition as to who will own the model and the results so if we
need to get the work done in five or ten years from now, we will have ownership
of the model.
Mr. Fennell stated this is a good
point.
Mr. Petty stated CSID will own the
model.
On MOTION by Mr. Fennell seconded by Mr. Hanks
with all in favor Work Authorization No. 30 for water management evaluation of
the District’s primary drainage system in an amount not to exceed $40,000 plus
sub-contractor services in an amount not to exceed $60,000 with the District
owning the model was approved.
Mr. Hanks stated I recommend putting
out an RFQ for surveying services so we have the ability in the future to
select a qualified firm.
Mr. Petty stated I discussed with
Mr. Hyche last week having a pre-approved list of contractors. If the Board approves, Mr. Hyche will
finalize this list and speak with counsel.
Mr. Pawelczyk stated you can do a
continuing contract for surveying services as long as you can define the scope
of those services in the RFQ.
Mr. Hanks stated many municipalities
will send out a request for qualifications.
They may not have any one project at that instance, but they send out a
request for qualifications to identify qualified consultants.
Mr. Pawelczyk stated on a rotating
basis. It is up to the Board. It is probably easier to find a qualified
surveyor and use this surveyor. You can
have a continuing contract and issue task orders to them. You can define your scope of work, which I
feel is important under the CCNA process for advertising services to indicate
what this surveyor is going to do. Even
though it is not problem specific, it is District specific.
Mr. Petty stated there are two kinds
of surveying; the type of surveying we are referring to today, which has to go
into the model and be extremely accurate, and the survey identifying sewer
lines and pipes.
Mr. Pawelczyk stated it would be a
non-exclusive agreement whereby if ABC Corporation cannot do the surveying, Mr.
McKune can hire a sub-consultant or we can do another RFQ.
Mr. Petty stated we would probably
do a bid specifically with that quality in mind. We would be happy to start the work.
SEVENTH ORDER
OF BUSINESS Distribution
of Proposed General Fund and Water and Sewer Fund Budgets for Fiscal Year 2007
and Consideration of Resolution 2006-1 Approving the Budget and Setting the
Public Hearing
Mr. Petty stated we would like to
pull this item from the agenda at this time as we are still working on this
budget.
Mr. Fennell asked what about setting
the date for the public hearing?
Mr. Petty responded you should do
that after you adopt the proposed budget, not before. We can start the process by simply stating we
are adopting last year’s budget but we have time to wait.
Mr. Fennell asked when do we have to
do this by?
Mr. Petty responded at the next
meeting. We need to set the assessments
by the second week in September.
FOURTH ORDER OF
BUSINESS Report from
Mr. Fennell on District Accounting Procedures
Mr. Fennell stated our accounting
firm is here to report on our accounting services.
Mr. Benson stated I am a partner in
the accounting firm of Keefe, McCullough & Company. We provide ongoing annual financial services
to the city. We were asked to perform a
special project for Severn Trent. I met
with Ms. Larned, Mr. Petty and the Board President to make sure we understood
what you were looking for, which gives you the best opportunity for an outcome
meeting the Board’s needs. We decided to
update our understanding of the internal accounting control system, adequacy of
the system and whether the controls were designed properly and operating as originally
intended. In addition, there were
specific pieces of information brought up at meetings or to Board members and
District management regarding items residents and vendors reported on including
the timeliness of accounting, accounts payable processing functions, disbursing
funds to vendors, whether or not the accounting codings were going into the
appropriate accounts from the general ledger and other items relating to cash
disbursement. Staff wanted to understand
better whether these were substantive allegations or misinformation to the
people at large.
There were also questions regarding
whether or not the current workload of the accounting staff was appropriate and
how many hours they charged to CSID, what they were paid and whether or not it was
appropriate based on our knowledge of the accounting market locally. We took a quantitative approach to answering
these questions to help you make good decisions as you move forward in an
organization. Also, we evaluated what we
currently use from an IT perspective in terms of how up-to-date the hardware
and software are, who owns it, upgrade costs and whether or not we should be
considering migrating to software other than what you are currently using. We reviewed the accounting backup procedures in
terms of how adequate it was based on what we know as an accounting firm and
what is taking place on a daily, weekly and monthly basis at the District;
contingency plans for turnover in accounting personnel; exposure with the
management company and business disruptions due to storms.
We had a post procedure meeting with
the Board President, District Manager and Treasurer prior to this meeting where
we revealed what I consider to be confidential information. I wanted the Board President and District
staff to understand the basis of our opinion.
Anything we are withholding from this public forum is what we feel is
confidential information and not appropriate to be disseminated to the public
at large.
In terms of our understanding of the
internal accounting control system and whether or not it is adequate for this
size organization, we believe it is, with the exception of possible segregation
of duties as we feel the opportunities are somewhat limited. Other than segregating of some duties, you
have a good control environment. We had
a separate series of questionnaires and standardized checklist for an
organization like this. We find the flow
of information and accounting funds, check disbursements and cash receipts are
good. With regards to processing of the accounts
payable function and timeliness of vendor payments and accuracy of general
ledger codings, we noted no real delays.
We calculated the number of days
from the vendor invoice date to the date of the check and from the date of the
check to the date it cleared the bank statement. I informed President Fennell, some people do
not cash their checks right away and others put it in their drawer for three
months and it does not clear the bank for another 90 days. The average time from invoice date to check
cut date was 32 days, which I did not feel was inappropriate. On the General Fund side, the average time
was 20 days. In addition, the average
number of days on the water and sewer side was 10 days from the date the check was
cut to when it comes back through and eight days on the General Fund side. If someone is saying we never pay, I beg to
differ based on the sample. The size of
samples we are using is for the size of this organization. We also found no instances where items were
coded to the wrong places. As a matter
of fact, the people who are coding, seem to understand their job
responsibilities and where items should go within the general ledger.
In terms of the current workload of
the accounting staff and number of hours devoted to CSID, we determined 70% of
the accounting staff’s time gets charged to your District. In a 40 hour workweek, this is 28 hours a
week. There is a 60/40 split, where 40%
is the General Fund. We discussed at
length with Mr. Fennell and Mr. Petty, the amount of money the District pays
for accounting services. I feel strongly,
the fees are reasonable based on the market.
You have a well trained person. I
am not saying there are not issues, but I think the District Treasurer agrees
with my assessment. She is a seasoned
person and it is a tight market. You
could not hire someone on a full-time basis for what you are paying
currently. The duties performed are
check writing, bank account reconciliation, general ledger, creating the
monthly statements and involvement in the ongoing budgeting. They know the specific dollar amounts being
charged. The District Manager has all the
information. You can question our
assertions on whether or not you come to the same conclusions, but I feel
strongly you are going to find they are reasonable.
Mr. Fennell stated throughout CSID,
we need to have better accounting of who is being charged for what. We have many shared employees. When I was involved in engineering, we filled
out time cards on a project basis. I
believe we need to do this so we know who is working on what and for how much.
Mr. Petty stated we did not discuss
the billing process. We were talking
more about making better calculations by supervising and monitoring. The Board will receive a detailed analysis of
this process during your budget process.
We also discussed the sharing of people with other districts. CSID has a paternal stance with the
facilities and everyone else relies on your strength. Therefore, all of these positions should be
owned by CSID and be self supportive through CSID through an Interlocal
Agreement. Mr. Hyche is a good example
of a CSID asset as he originally came from NSID. Now that he is with us, a certain percentage
of his time is being spent on NSID. I
asked him to start working on his replacement.
An allocation of his time is shared with NSID for a limited period of
time but CSID gets the benefit. He
should receive a slight benefit in his pay but that is based on the Board’s
position. He is your employee for 40
hours a week. You can share him with
another District, as long as it is mutually beneficial to the other District,
CSID and to the employee.
Mr. Fennell stated the concept of a
split employee where they work for either us or someone else and we charge out
their time.
Mr. Eissler stated I think it
benefits everyone.
Mr. Hanks asked is this allowed
under the Florida Statutes?
Mr. Pawelczyk responded it is not
disallowed. It is more or less an
interlocal arrangement.
Mr. Petty stated we should do this
by written agreement instead of by oral agreement.
Mr. Fennell stated make it clear who
you work for or we could find ourselves buying services from NSID. I am pushing for us to have as many services
as we can and if we need to have an agreement with other districts, we would
sell those services. We sell floor space
to other districts. I think we need to
formalize this. Otherwise, we are
dealing with one name firms who do not work for anyone.
Mr. Petty stated we have good
employees who have strong loyalties.
However, the loyalty is with four or five girls and we want them to like
us best.
Mr. Benson stated this came out of
many discussions we had. The good news
was when people thought the person was working for four or five districts it
was only 70% for our District. I think
the supervisors should know that.
Whatever you do, you need to put the correct supervisory controls over
the workers.
Mr. Fennell stated we are going to
get to a point where we know who the employees work for, how their time is spent
and how to charge the services out.
Mr. Eissler stated I am all for
making this formal. My observation over
the past four years is we have made out very well at CSID for what we pay our
employees.
Mr. Fennell stated we are going to
find out.
Mr. Petty stated I am sure there
have been one or two instances where we have responded to a need and have not
adjusted the percentages the way the agreements should be done just because
things were happening too fast. Also, there
were many times when this industry was growing so fast it was difficult to
track.
Mr. Benson stated statements like this
should be taken in context. If you look
at four years ago versus today, there is some tightness in the accounting
industry and as a result, what you pay to get someone today versus four years
ago might be two different things. At
the current time, I believe the arrangement you have is definitely fair to the
District. The Board President as well as
the District Manager and the Treasurer have a handle on the accounting.
With regards to hardware and
software, there were some discussions relative to who owned what machine, what
software was on it, whether it is adequate, outdated, could be thrown away or a
new one could be purchased. We tried to
ascertain who owns the equipment. We
have an AS400 machine, which was purchased in 1999 and has a 70 gig hard
drive. At that time, the machine was
eight years old. It was actually owned
by Severn Trent. The contract has a
“Right of First Refusal” provision so if Severn Trent ceases to provide
services to the District, the District could negotiate with Severn Trent to
retain the machine. The price will have
to be determined at the time based on the age of the machine. The software is slightly antiquated and there
are some upgrades available to it. We
called the software manufacturer to see what is available and you may want to
consider an upgrade to the newest version.
A decade in software time is many lifetimes. As a result, the conclusion is there are some
potential benefits to the District if they turned around and considered
upgrades. The drive you have is a good
system but we are up to 84% capacity.
Your findings are typical of what you find at other companies. The current District Manager is on top of
where we are and has some ideas for the supervisors in terms of where we go
next. It will cost approximately
$165,000 for a new machine along with the licensing and upgraded software. This gives you more power than you need but
five years from now, I will probably be back telling you to do this again.
Mr. Fennell asked what is your
recommendation?
Mr. Benson responded Mr. Petty has a
proposal for possible replacement of the server, which I feel you should
consider because you are fairly close to capacity.
Mr. Petty stated this is our initial
recommendation. What is holding us back
is the customization to make it work for Special Taxing Districts. We used all of our expertise in the late
1990’s building this system to work for us.
We are competent enough to work with the software supplier into building
equity into the upgrades, but we need to hear it from them first before we can
positively recommend this. We planned to
do this before coming to you with your proposed budget at the next meeting.
Mr. Fennell stated the machine only
costs $20,000 to $30,000. Most of the
expense will be in the licensing.
Mr. Benson stated there was a great
deal of discussion about whether or not the machine was ever backed up. The machine is backed up daily. There are two employees who have tapes that
leave the building with them. In
addition, we mail tapes periodically to Severn Trent's offices in
In terms of contingency planning, we
felt if there was turnover in the accounting personnel department, the
requirement to replace this individual falls to Severn Trent. This is one of the benefits of having a large
company behind you. Although Ms. Larned
has spent a tremendous amount of time here, it will probably take six to nine
months to have someone trained in any capacity.
Some of this vulnerability comes from the size of this
organization. If you have a one person
accounting department and lose the one person, you do not have any
opportunities for cross training.
Therefore there is some vulnerability with regards to your current
management company and they will probably assist you in this turnover. We also discussed what needed to be done in
replacing your management company. You
would have to do an RFP, which is a big undertaking, especially considering
your current arrangement with many of the employees. You have a unique arrangement. I am not saying it does not work, but it is a
unique organization and one that will require a great deal of thought and care.
Mr. Petty stated you are not
required to do an RFP for management services.
You can do this through a selection process at the Board’s
pleasure. We are exempted from this
process. Should anything happen to Severn
Trent, I am sure District Counsel will walk you through this process
comfortably. As part of Severn Trent’s
commitment, Ms. Larned and I brought over a senior accountant. We felt vulnerable after going through the
audit.
Mr. Eissler asked does Mr. Dan Daly have a good idea of where everyt