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
Sharon Zich Secretary
Also present were:
John Petty Manager
Dennis Lyles Attorney
John McKune Engineer
Cedo DaSilva CH2M-Hill
Randy Fredericks Field
Supervisor
Doug Hyche District Staff
Mr.
Fennell called the meeting to order and Mr. Petty called the roll.
SECOND ORDER OF BUSINESS Approval of the Minutes of
the November 20, 2006 Meeting
Mr. Fennell stated each Board member
received a copy of the
There not being any,
On MOTION by Mr. Fennell seconded by Ms. Zich
with all in favor the minutes of the
THIRD ORDER OF
BUSINESS Award of
Contracts
A. Light Ford Trucks
Mr. Fennell asked did we approve those
trucks last month?
Mr. Petty responded the Board
approved something similar. These trucks
are for the water management supervisors.
These are the next level of trucks.
The first level were our standard work trucks. These are 4x4’s and XLT.
Mr. Fennell asked did you receive
one bid?
Mr. Petty responded Chevrolet did
not bid. We normally receive bids from
Chevrolet and Ford. Aid these bids
comparable and did they beat the state bid prices?
Mr. Hyche responded yes.
Mr. Petty stated the state puts out
a contract each year for these vehicles and for each class (standard, work
truck, 4x4, etc). We track our bids to
theirs to see if we received as good as or better deal than they did. These prices from Ford Plantation who
supplied us with leased trucks in the past, beat the state bid price.
Mr. Fennell asked does more than one
Ford dealer ever bid?
Mr. Petty responded occasionally we
get more than one dealer to bid.
Typically there is a Fleet Manager who understands the process better
than most. It is all in the
understanding of how these bids work.
Most Ford salesman are not looking at the public notices section of the
newspaper. The dealer who understands
how to sell these trucks through their Fleet Manager is the best and has the
most knowledge is able to price these trucks according to their inventory.
Ms. Zich stated these are good
prices.
On MOTION by Ms. Zich seconded by Mr. Fennell
with all in favor the contract for the purchase of light trucks (4x4 & XLT)
was awarded to Plantation Ford.
Mr. Fennell stated next time we
solicit bids for trucks, please obtain bids from more than one dealer.
Ms. Zich stated I agree.
Mr. Fennell stated you should be
able to compete one Ford dealer against another.
Mr. Lyles stated they solicited more
than one bid but this is the bid they received.
They did not receive a bid from another dealer.
Mr. Fennell asked did we place an ad
in the paper to solicit bids?
Mr. Petty responded we did a notice
and contacted any dealers who contacted us in the past.
Mr. Lyles stated they complied with
the legal requirements for competitive bidding.
If we only receive one qualified bid, then there is no constraint upon
you to go out for more.
Mr. Fennell asked did you contact
Sawgrass Ford?
Mr. Hyche responded we contacted Sawgrass
Ford and Maroone.
B. Landscape Maintenance
Mr. Petty stated this is for the
on-site landscape maintenance contract.
We have not done this type of bid in over 12 years. The current contractor mows the grass but
does not fertilize, plant flowers or trees.
His fee has not been adjusted in over 10 years. As a result, he stopped doing much of the
work he needs to be doing to the plant.
The grass needs to be fertilized and the beds need to be taken of. It has not been mulched in four years. After Hurricane Wilma when the area was
exposed by lack of tree cover/canopy, we decided a landscaper doing minimal
work needed to be replaced. We took the
original specification and re-bid them.
The lowest price by a responsible contractor was from JLS Landscape
Maintenance in the amount of $39,785 annually.
Mr. Fennell asked what were we
previously paying?
Mr. Petty responded $8,000 a month.
Mr. Hyche stated depending on what
they did. He was only billing directly
for the work he was doing. We want the
quality.
Ms. Zich asked who is the current
contractor?
Mr. Hyche responded Nanak.
Ms. Zich asked are you familiar with
JLS?
Mr. Petty responded they performed a
field investigation. Mr. Hyche
interviewed them and found their qualifications to be in order. Nanak is what is left of an old company I was
familiar with 15 years ago that maintained Turtle Run and
Ms. Zich stated as long as they
check out, I approve.
On MOTION by Ms. Zich seconded by Mr.
Fennell with all in favor the landscape maintenance contract was awarded to JLS
Landscaping at the lowest responsive bid of $39,785 per year.
C. Potable Water Flocculent
Mr. Petty stated I request we pull
this item from the agenda as it is still under consideration at this time by
staff.
Mr. Fennell asked what does
flocculent mean?
Mr. Petty responded it is an aid in
the settling of material in the water treatment plant.
FOURTH ORDER OF BUSINESS Consideration of Request for
Surface Water Management Permit for Phase II Water Treatment Plant Improvements
Mr. Petty stated this item was
approved at the last meeting.
FIFTH ORDER OF BUSINESS Canal Bank Restoration
Status
Mr. Petty stated I provided a change
order to the Board for consideration. It
was not included in your agenda package because it was just completed with
Stiles Landscaping for the Phase 2 tree removal hurricane preparedness
project. I am happy to close out this
project. We have been highly productive
in our hurricane prevention program, which is discussed at almost every
meeting. We removed enough tree material
within our drainage areas to give me the ability to say if a hurricane
approaches, reasonably speaking, we should not have any concerns from trees. Yes there are still some trees out there, however,
we removed the vast majority of all concerned trees. The remaining trees are few and are more
towards the top of the bank than the water or are of a nature such as Coconut
Palms, which have a root structure we are not concerned with. We have a low risk as far as we are concerned
from trees and flooding concerns in the future.
This is something we need to monitor and maintain. We feel this has been a successful and hard
fought program and are happy to see it complete. Mr. McKune will give you the status of the
change order.
Mr. McKune stated CH2M-Hill is
prepared to certify approximately 83% of the originally contracted trees have
been removed. This is the amount of the
contract we are recommending payment for.
This change order deducts $157,000 from the original contract amount and
this finalizes the contract.
Mr. Fennell asked does Stiles have
any issues with us?
Mr. McKune responded no.
Mr. Petty stated this is in
consideration of any issues they have and part of the negotiation between the
engineer and contractor to close out any contracts.
Mr. Fennell stated this problem snuck
up on us. Going forward, how do we prevent
this problem from re-occurring?
Mr. Petty responded we initiated
policies for our staff to be responsible for the removal of all new growth
within rights-of-way.
Mr. Fennell asked do we need
approval from the Board to direct staff to perform the removal?
Mr. Petty responded you already gave
this approval. Instead of relying on an
ordinance of the city, which is political in nature to protect this interest,
we are directing staff. If staff sees
new seedlings of Australian Pines or any other nuisance species, they
immediately write it down in a report and the District does the removal either with
our staff or the contractor. It should
be removed by staff because these will remain small if we stay on top of it.
Mr. Fennell stated I want to have a
yearly survey of all banks with any problems they perceive. This report should be due on July 1st.
Mr. Petty stated under this contract
we have an inventory for all trees within the District. We can certainly do an annual review. I suggest the Board authorize this in the
form of a proposal.
Mr. Fennell stated I came onto the
Board not knowing a great deal about trees.
There will be other supervisors following us who will not be familiar
with the history. I want to set a precedence
so they have insulation against my negligence in the future. I do not want to make the same mistake twice
for at least another 20 years.
Mr. Petty stated for newer Special
Taxing Districts, CDD’s in particular, the state requires a Public Facility
Report each year showing the status of the drainage facilities. I think this is what you are asking for.
Mr. Fennell stated we can make a
proposal directing staff to provide a tree status report in the Public
Facilities Report every year.
On MOTION by Mr. Fennell seconded by Ms.
Zich with all in favor District staff was directed to provide a status report of
the trees in the yearly Public Facilities Report.
Ms. Zich asked how did we save
$157,000?
Mr. Fennell responded we did not cut
all the trees down. The canals are 87% pacified
and we are declaring victory.
On MOTION by Mr. Fennell seconded by Ms.
Zich with all in favor the change order with Stiles Corporation for a savings
of $157,000 was approved.
Mr. Fennell stated the Sunshine WCD
has a canal going down as low as 11’.
Who is responsible for the canal bank?
I bear responsibility for protecting the residents in my District.
Mr. Petty responded Sunshine is
responsible for its drainage, the same way CSID has responsibility for its
drainage system. We have been discussing
the east outfall with Sunshine because we looked at the plans and know there was
a berm on the Coral Springs side that is no longer there, although there are
homes there. Instead of a berm, you now
have a slope. This is what we have
left. Sunshine conceptually agreed to
perform a Hydrologic Analysis but they do not need it for discussion purposes
until January. CSID has the same
responsibility because we have a similar issue.
On the north portion of CSID there
is a border canal behind Walgreens between Coral Springs Drive and University
Drive. The canal is owned by Sunshine
from top of bank. However, from the edge
of water it becomes CSID property. The
water is not supposed to drain into the canal from the back of those
houses. It is supposed to go back out to
the front of the yard. There used to be
a berm but it does not exist anymore.
CSID should have had a berm there.
An issue we still need to look at is whether the berm was put in by
Sunshine or CSID and whose property it was on.
I believe we are going to end up working together with them on the
issue.
Mr. Fennell stated since it is 11’
on the east outfall canal and given we have been discussing flood levels of 12’
and not knowing for sure if the C-14 canal will go higher. I see this as a significant problem. I can be convinced from an engineering
standpoint how rigid this is. The north
canal needs to be addressed immediately.
I want strong facts on what we are going to do and how we are going to
do it. Fortunately the area north of us
is NSID property. If this canal fails,
it does not hurt them at all.
Mr. Petty stated the canal on the
north is owned by Sunshine. We are
separated by Sunshine on the east and north.
Since the canal is past the pump station on the north and is at the same
level as the C-14 canal, if they do nothing it does not hurt them. The only entity who will possibly get hurt if
there was an issue is this District. I
am not sure whether they have the urgency they should have. I looked at where the canal meets the C-14
canal to see whether or not this is a real problem and there are two 8’
culverts where the water flows both ways.
You do not have to worry about Sunshine.
Even if Sunshine was walled off with concrete, you are still connected
to the C-14 canal and you cannot stop the water from coming the other way.
You have some issues to address with
due diligence. Do we need to rush into
them as an emergency condition, I do not believe so. We have 30 years experience with this same
system. This just did not happen in the
last six months. Experience has shown
the system can and does operate well. According
to our engineers, the system is functioning well and they have options to make
it function even better by simply making some adjustments at the pump station
instead of limiting each pump station.
To balance them out, we get better flow on the eastern side. Our permit is based on a total number, not on
a pump house number. Our overall goal of
looking at redundancy of outfall pipes and basins is something we should pursue. We should do this in a straightforward
manner. I do not think we have to
rush. We have time to look at it.
Mr. Fennell stated I would like an
answer before the next meeting. I saw a
number of 11’ according to the survey, which on any of those canal banks is
unacceptable.
Mr. Petty stated this has not
occurred. You are talking about whether
or not there is a wall 13’ high at the District’s boundary or 2’ back on the residents’
property. This elevation only occurs at
the building pad. You end up with a
curved line.
Mr. Fennell stated I want to have
this re-confirmed and to know the severity of this problem from the engineer. If it is 11’, then there is a real
issue. However, if there is something
behind it, which means the top of the dyke is 13’, then this is a different
issue.
Mr. Petty stated I believe he is
measuring the high points within the 20’ area.
Mr. Fennell stated let’s find out
for sure. If it is 11’ then we have a
problem because there is no way you can handle the water inflow and could not
pump it out fast enough into the C-14 canal.
Mr. Petty asked if the C-14 canal
was at 11’, could you pump out of CSID?
Mr. Fredericks responded the pumps will
probably be under water. I am sure it
will be difficult.
Mr. Petty stated I do not know
whether the levy is major issue but the 11’ water table in the C-14 canal is
not the issue. You are not going to be
able to pump out.
Mr. Fredericks stated you will be
pumping but whether you will be pumping 50,000 gallons per minute would be
questionable. My flapper is not going to
be flapping in mid-air.
Mr. Petty stated they are moving
water. They do not do it at a high
pressure. It is variable pressure so if
there is any back pressure, the flow is going to go down considerably.
Mr. Fennell stated I was told we
could pump into a back pressure of at least 2’.
Mr. McKune stated it depends on the
differential. If the C-14 canal comes up
too high, it will give you back pressure.
If your canal surface goes up in conjunction with the C-14 canal, then
you still maintain a positive flow. The
pumps add so many feet by virtue of the pump.
You are both correct. It depends on
the relative elevations.
Mr. Fredericks stated there is a
flapper on the end of those pumps. If it
is under water, obviously it is not going to be flapping.
Mr. Fennell stated if you have
enough pressure on one side, it will lift it up.
Mr. Fredericks stated it will still
pump but the gallons per minute will be cut down.
Mr. Fennell stated this straightens
my argument for water flowing in from the C-14 canal. Please check on this and let me know. I am still trying to understand the severity
and extent of this problem. So far all
the data keeps coming in worse rather than better.
Mr. Petty stated one item we have
not discussed, which needs to be discussed in this report is there has to be
staging. In our practices for handling
flood control, we monitor weather reports.
If we see a rain event coming, we will start to pump based on
severity. The intensity of the pumping
is gauged towards the anticipated event.
As the rain starts to fall, we try to monitor our pace ahead of it. It is key for us to maintain our pace because
we cannot start pumping when the event starts.
We must start ahead of it. Our
policy must have stages where we are going to pump and then there will be a
period of time where it is no longer practical to pump and it is time to
abandon the station.
Mr. Fennell asked what do you mean
by “Abandoning the station”?
Mr. Petty responded there will be a
time when you cannot pump anything and it is time to move out of the
station. We have people whose lives may
depend on it. We need to have a policy
saying, “If the canal gets up to ‘x’ we get out”. We have to consider this since we could have
a hurricane with an 18” rainfall event in a six hour period. No one is going to be able to keep up with the
water and South Florida will flood. This
is a possibility and we must plan for it to minimize the loss of life. In other words, we are not going to be able
to build a drainage system to handle every single storm so we must have a
policy specifying the time we expect to tell our staff and the residents of Coral
Springs they must evacuate.
Mr. Fennell asked do we have remote
controls?
Mr. Petty responded after an event,
you would not trust remotes, even if we had them.
Mr. Fennell stated I trust it more
than having the pump station shut off.
Mr. Petty stated these are run by
diesels or propane. Even if you had a
radio connection, cranking it up remotely is difficult. If it is electric, you may be able to run it
by telephone or some other means of telemetry.
Again, it is very doubtful under these conditions. When you abandon a station, you will not want
to take it down to move the guys two miles inland. You want to move it north of Okeechobee. There will not be any radio power or
telephones left.
Mr. Fennell stated there is going to
be a lot of people left.
Mr. Petty stated hopefully not.
Mr. Fennell stated they will never
get out.
Mr. Petty stated I do not think we
have enough roads but hopefully there will be a plan.
Mr. Fennell stated I think you are
asking an excellent question. What are
you recommending?
Mr. Petty responded as part of our
concern for the importance of what we do next, staging is an issue we should
have the engineer look at.
Mr. Fennell stated I agree. So far we have been considering the 18” storm
over 36 hours. I do not think this is
the 100 year flood but more like the 50 year flood. If we actually hit a 100 year flood, there
will be 18” to 20” of rain in a 24 hour period.
Luckily we have a model. We can
go back and say, “What should we do in this case”. I have to believe we really cannot get out of
here based on when I tried to get out of here when Hurricane Andrew was
approaching.
Mr. Petty stated during these
events, we meet with the city and county emergency response crews. They are constantly asking us what the
situation is. There will come a point in
time where Mr. Fredericks will know if a situation is hopeless or not and it is
his responsibility to report back to as many government agencies still in
operation that is time to go. We should
know this as well based on the design of the system and the hydrologic review.
Mr. Fennell asked is there anything
other agencies can do for us? I do not
think so from what I saw.
Mr. Petty responded FEMA is more
like a revenue resource than anything else.
Mr. Fennell stated they are more
like an insurance company.
Mr. McKune stated SFWMD is currently
updating their Lower East Coast Water Supply Plan, as they do every five years,
which controls our Consumptive Use Permits and how much water we can discharge
from the pump station into the canal. They put out a draft of what they want to
recommend through the year 2025. There
are measures requiring various utilities to spend millions of dollars for what
I consider in some cases to be marginal.
One of the items they are looking at is the interconnection of drainage districts. This means connecting directly to Sunshine,
which connects directly to NSID. We
looked at this in the past. In fact, we
currently have one interconnection between NSID and Pine Tree WCD. There is a one way connection benefiting
us. It has never been used but it is
there. I agree this needs to be done in
stages but we may need to include whatever recommendations we come up with this
grand plan of the SFWMD’s and vice versa.
Mr. Fennell stated I do not believe
in being too passive. I am more than
willing to be politically active and push for anything we think will benefit
us. Someone up there is putting together
those plans and we can decide how we want to influence them or whether or not
we approve of them. Keep us
appraised. Mr. McKune has a good
point. We need a plan for a worst case
scenario. Is this what you are asking
for?
Mr. Petty responded if we do
improvements, the staging level should rise.
You should have material benefit from putting in secondary pipes.
Mr. Fennell stated at the point when
we call it a day; we are going to give up draining the area. Do we even have to?
Mr. Fredericks responded it is
difficult to figure out how to drop the level of the water in these canals with
the weather reports you get on the TV and even with conferences with the
SFWMD. Usually they are more accurate
than what you hear on TV. However, sometimes
they call for 10” of rain yet we only received 3”. I go by the information from SFWMD because
they are more reliable.
Mr. Fennell asked how do you know
how much to pump?
Mr. Fredericks responded we start
the pumps up at a certain time period before a storm hits and try to lower the
water level 1’ to 3’, depending on how much rain is expected. Hopefully when the storm ends, we do not end
up with any water in the canals.
Mr. Fennell asked have we used the
model CH2M-Hill prepared as a predictor of outflow? He needs a predictor of how many hours to get
the canal down to a certain level if we receive 4” of rain. He can have a model rather than relying on
his own experience, which is considerable.
I want to see this model showing actual flow-out versus rainfall cases.
Mr. McKune responded it is hard to
predict this because it depends on how saturated the ground is with rainfall
previous to this event.
Mr. Petty stated I think we can do
it. There are two different programs. One program is one he can use as an operator
so when he runs the pumps, it shows where the water level will be after
4”. He will be able to look at his
elevations. It does not tell him how to
do his job but gives him suggestions such as what might happen based on
hydrologic flow. He has to balance this
with what he sees. At least it gives you
something else to make your analysis on.
If he knows the discharge elevation, he knows what his pumps can
do. It is a fairly simple calculation we
can write on any machine and make available to him. Before he sits down and talks with the other
government agencies or us, he can run this calculation and say, “I have another
2’ in the C-14 canal, my canals are looking good and the rainfall is not
heavy”.
Mr. Fennell stated we need to keep
investigating in areas to give him better predicted tools. We have other pieces of data he can use such
as the wells. Mr. McKune talked in the
past about how those different well levels go up and down, which are a real measure
of the saturation level. There might be
a correlation. We can also dig test
wells around the city. I do not know
what it will take as far as a model but there is no reason why we cannot obtain
this type of data.
Mr. McKune stated the model is
predictive. What I am envisioning for
Mr. Fredericks to use is a series of simple graphs showing how long to run the
pumps based on the number of inches of rainfall within an hour.
Mr. Fennell stated you need to have CH2M-Hill
talk to Mr. Fredericks about what he wants from a model and prove to him it is
valid. He is the guy who is going to
turn the valve and needs to believe this is going to help him.
Mr. McKune stated he knows how fast
he can take the canal down when he turns on the pump. We can match the inflow to his knowledge of
how fast he can take the level down.
Mr. Fennell stated I think this will
be one of the most beneficial things we can do for him. When we were talking about different pumping
levels, he said, “It takes a long time to take down the west area”. He is correct because the west area holds
more water. Therefore, if you make a
decision too late, you still have an issue of trying to take down the water
level because you started too late and have to pump out more water in order to
get the water out. I think there are
some issues of when you start and how much water you take out of one canal over
another.
Mr. Fredericks stated I received
calls last Thursday about the water levels in the canals because of the heavy
rain.
Mr. Fennell stated I thought the
canals were high.
Mr. Fredericks stated no one was close
to flooding. Someone said, “I lived here
for four years and never saw the water this high”. I told him I lived here for 30 years and the
water has definitely been this high before.
Mr. Fennell stated I want to see us
moving ahead on predicting whether we are safe and have an operating condition
to do better. Let’s make sure we have a
good model to control the total amount of water we can pump.
Mr. McKune stated I will email you a
copy of the program.
SIXTH ORDER OF
BUSINESS Staff
Reports
A. Attorney
Mr. Lyles stated as we speak, the
Broward County Legislative Delegation is meeting to consider the first public
notice of the local bills filed this year including your bill. Tonight’s meeting is more of a
formality. They will just introduce the
item and the sponsors. The actual public
hearing and the debate is expected to be held in January when they have the
full public hearing. They have this bill
on their agenda today and it is making its way through the process. We expect it to be read and introduced. There may be a few preliminary
questions. We are on our way.
Mr. Fennell stated we will see what
happens.
B. Engineer –
Drainage System Study Update
Mr. McKune stated I spoke with Mr. DaSilva
earlier and nothing additional has come to the Board. There was additional survey data on the
perimeter but no additional modeling runs.
I want to incorporate your recommendations in a request to them to make
sure they run together. We had a good
meeting with Mr. Fredericks at the pump stations evaluating what condition they
are in so we can make recommendations.
Mr. Petty stated one item I have
been discussing with the engineer is our deep wells for water and sewer. Over the last year we had a pump and motor
under repair and have been going back and forth with the manufacturer. The bottom line is we decided to purchase
spare parts so we can replace parts as they break down because we had some down
time that put us into trouble. As we
have gone back and forth with the manufacturer, Mr. McKune who was working with
CH2M-Hill at the time, started negotiations.
Now he is working for us as our CIP.
He closed the deal and we are going to be receiving a new pump for
$3,000, which will be the backup for our deep injection well. I thought I would mention this since Mr.
McKune did so well over a year’s time of negotiating with the contractor.
C. Manager
i. Discussion of Water and Sewer Rate
Sufficiency
Mr. Petty stated we have not
adjusted the water and sewer rates since the early 1990’s. The graph before you summarizes the rate
sufficiency analysis. The analysis is
based on the same conditions and priorities of the rate study performed in the
early 1990’s. In this rate study, there
were three basic categories; a Renewal
and Replacement category of $285,000, Compliance
Funding category of $550,000 for innovations and corrections to the plant
process so we can meet DEP requirements and Capital
Improvements. We decided we better
start saving some money in our rate structure to handle those items needing to
be replaced or repaired. In total, we will
receive $1,000,000 in Capital Improvements
to our system in the rate study.
The Capacity section of the rates, which is the monthly fixed minimum,
will be tied to debt service only. As
you may recall, it costs $10 for water and $10 for sewer per month for every
single family home. The Commodity portion of the rates will be
calculated based on our operating cost, which varies to some degree or another
based on how many gallons we make. Capacity is supported by debt and Commodity is supported by operational
cost. We wanted to include Capital Projects, Compliance Funding and Renewals and Replacement into the rate
structure at a rate of $1,000,000 per year.
This is what the early 1990’s rate study considered. When you include the current budget it is
askew. Under the Commodity section we have costs exceeding the capability cost per
thousand gallons.
Mr. Fennell asked what is the theory
you are trying to reach?
Mr. Petty responded we are looking
at the sufficiency to see if we can meet the criteria from the early 1990’s,
which is to pay for operating costs, debt service and the new line items of
$1,000,000 worth of capital expenses.
The answer is the Commodity
portion is not balanced. Our operating
costs exceeded our cost per thousand gallons, which is $1.90. Therefore, you see a Commodity Offset where we
have to transfer $3,699 into Capacity. In other words, we had to shift some of the
operations costs out of Commodity and
transfer into Capacity where we had
some room because we paid off some bond issues.
I do not have the debt in Capacity
to support the $10 for water and $10 for wastewater per month. I am trying to see if in total, we make the
same dollar amount and just askew on Capacity
and Commodity. I have taken what was askew in Commodity and put it into Capacity to see if Capacity can handle it. It
could only handle a piece of it, not all of it.
Mr. Fennell stated I do not know if
I am following this as well as I should.
I understand fixed costs.
Mr. Petty stated your intentions
were to have $835,000 each year available for capital projects. This is where you are supposed to be. You are currently at a negative
$753,000. This means you are not
building a Capital Projects Fund anymore and are feeding off of any past year’s
surpluses. We show this in this year’s
budget.
Mr. Fennell asked are there fixed
costs in Commodity?
Mr. Petty responded Commodity has variable costs and Capacity has fixed costs, relatively
speaking. In the early 1990’s, Capacity did not just have fixed
costs. The only costs were debt service
costs. Typically in a rate study, Capacity is assigned to fixed
costs. Fixed costs usually include debt
service but also manpower since this is typically a fixed cost. Whether I do 4,000,000 or 4,500,000 gallons a
day, I still have the same guys working here.
I cannot adjust my personnel based on the gallons made. Our growth is not severe enough anymore for
me to even do it on a yearly basis. It
stays fixed every year.
Mr. Fennell asked is Commodity Offset the money we have
coming in?
Mr. Petty responded this is the
money you have to pull out. You can
handle $3,000,000 with the Commodity Fee
of $1.90 per thousand gallons. One
category, Plant Operations is $3,969,835.
I have to pull a full $3,700,000 out of Commodity and transfer it someplace else to make this system
work. We also have Administrative Costs of $1,345,795 and Field Operations of $1,369,614.
The total for all these items is $6,000,000. If I charge $1.90 per thousand gallons for
5,000,000 gallons per day, which is what we are doing, I come up with
$3,000,000. The Commodity Offset is saying we are askew in Commodities by $3,699,256.
We are going to put this onto Capacity
because maybe it has room for it. With
the Capacity we pay off debt.
Ms. Zich asked is this the first
year this has occurred?
Mr. Petty responded this is the
first year we have done an analysis.
Mr. Fennell stated we have been
making money for the last 10 years.
Mr. Petty stated in total we had the
money. The Board asked us to determine
the impact because we knew we had a big pot of money. We built up a $7,000,000 construction account
and this is why the Board decided we cannot do a rate increase. This was the result of a Capital Improvement
Plan, which was done piecemeal and was fairly economical. These problems did not appear until we did
the rate sufficiency. When we did this
year’s budget and saw we were using some of last year’s carry forward, this was
a sign for us to do the rate sufficiency.
This is why we did this review.
You have been diligent about paying off debt. The $20 per month ting from every single
family home generates a considerable amount of revenue of approximately
$4,300,000 from our current user base.
This is fixed because we are at build-out. This eats up almost all of the $3,600,000 and
we are now $750,000 short.
The difference between fixed and
variable costs is not reflective of today’s conditions but this does not raise
everyone’s monthly amount. I need
$750,000 to break even plus the cost of a capital improvement program. We are looking at an increase to break even
and will need a larger increase to pay for a Capital Improvement Plan. According to the Usage Data, you have
breakpoints. This is our conservation
rate, which we get 5% to 10% of our revenue from. The intent is to charge people above a
certain amount to process the water from an alternative water source. It is supposed to encourage
conservation.
The first class with 12,600 gallons/month
is for single family homes. SFWMD would
like for us to have this number at 8,500 gallons/month as it is more reflective
of today’s technology with fixtures in homes and more acceptable for the
lifestyle and education program ongoing for the last decade. This in turn lowers each category so there
are fund increases by going to today’s breakpoints in the conservation
rate. Currently we give away a minimum
of 3,000 gallons/month with our monthly minimum. This means when you pay $20 for water and $20
for sewer, we do not count the first 3,000 gallons of use. We want to remove this free usage of 3,000
gallons, which goes back to the 1970’s.
We feel this will bring in a considerable revenue supply without raising
the monthly minimums to each user. Finally we want to look at the rates and
updating Capacity and Commodity to show you what rate
increases will generate revenue as far as the Capital Improvement Program so
the Board can look at their options.
The final result of this rate
sufficiency analysis is staff is recommending to the Board authorization to do
a rate study with three options. The
first option is to do it in-house with current staff where we update and
modernize the existing rate study. This
can be done by Severn Trent Services your Contract Manager or CH2M-Hill your
Contract Engineer. It can also go out to
an independent specialist. There are a
couple of firms nationally who do this for a living. The higher up the scale you go, the higher
the fees. In-house the cost is included
in your budget. If you outsource to Severn
Trent Services and CH2M-Hill, the cost will increase to $30,000. Is the CH2M-Hill cost similar?
Mr. McKune responded it will range
from $40,000 to $60,000.
Mr. Petty stated they have a unit
specializing in this matter. If we go
outside, it typically goes over $100,000.
Our suggestion is you do this in-house and keep the current methodology
as it gives you all the options you need.
Ms. Zich asked do we have someone
in-house?
Mr. Petty responded yes, the same
person who did this study. We can update
and modernize this and give you options to consider. Certainly you do not need to make a decision
at today’s meeting.
Mr. Fennell stated I have a hard
time understanding this format.
Ms. Zich stated I understood it
until I realized the Commodity Offset
was transferred to another category and then added to the revenue. The difference was a negative amount.
Mr. Petty stated we are taking money
from carry forward. That does not mean
you are getting in revenue and the numbers before you are incorrect.
Ms. Zich stated he is saying we had
a surplus in prior years and it never caught up with us. Now we are pulling it out so it is catching
up with us.
Mr. Fennell stated I am looking for
data over a long period of time showing the revenue projections for five
years. Do you perform a rate study for
five or ten years?
Mr. Petty responded five years.
Mr. Fennell stated we know what our
revenue is because we prepare the budget every year.
Mr. Petty stated there are
projections based on actual spending and the conditions to be calculated. It is only just based on the budget for the
past five years.
Mr. Fennell stated it will give us a
good idea of what revenues we have as well as the costs.
Mr. Petty stated one year’s revenue
is all we need. I do not need to go back
five years. Our rates and units are
fixed and our usage is the same as the last five years. Our usage has been decreasing over time
because we have conservation rates. This
means we are actually selling less water for the same cost. If you conserve, you end up paying for the
conservation at the end of the day. This
project is built-out and I know what my revenue is going to be, unless everyone
wants to use double the water tomorrow.
I looked at our water usage between last year and what was calculated in
the five year report created in the early 1990’s. The numbers are fairly close, although we
have dropped usage slightly. The five
year report is not going to give you any revenue projections.
Mr. Fennell stated it tells me where
we are going. It is easier for me to see
variable costs such as labor and chemicals, which give you a product cost. Then you have the debt service and capital
costs.
Mr. Petty stated the variable cost
is determined by an independent authority based on what is variable and what is
fixed. For example, you have a fixed
amount of pressure that I have to get a pump attached to before I can even get
one drop of water into the line. There
is a breakpoint on my electrical cost.
After the breakpoint, it is variable once I hit it. The same with chemicals. This is how the lime softening plant
works. The same with chlorine. While you may call them variable costs, they
have a fixed portion to them. This is
why it is not as easy as it looks and why they charge six figures.
Mr. Fennell stated the costs to run
the plant are operating costs. Then you
have capital costs, which are made up of debt service and capital. In some ways, these are overhead for the
operation. Nevertheless, we still have
to pay these costs but this is where the money comes from. Up until now, we had a surplus and have been
paying down the debt. You are saying
there is going to be an increase in capital spending and there will be a debt
projection of where you think we are going to go.
Mr. Petty stated let’s throw this
out of the picture because we are $753,000 in debt without even talking about
building one piece of the plant. I am
not talking about collecting $835,000 per year of capital improvements so I can
prevent disaster in the future. I am
spending $753,000 before I even break even.
You add both numbers to find out how far off you are with the 1992
analysis. Under the 1992 analysis, we
were approximately $1,500,000 off.
Mr. Fennell stated I hear what you
are saying about the bottom line but I am trying to understand this from the
standpoint of what revenues are coming in.
I am correlating it to the budget we just passed and understanding where
the money came from.
Mr. Petty stated you have
approximately $400,000 in Miscellaneous
Income and over $200,000 in Revenue
Reserve. Delinquent Fees, Processing Fees and Lien Revenue Fees are part of the calculation since they are cost
recovery items. You do not include them
in your rates. They depend on the work
you do.
Mr. Fennell stated they are not
significant fees; neither is Technology
Sharing and Contract Personnel
Service. Those are income items. I see $866,000 and debt service of
$2,000,000. This leaves us with
$6,600,000.
Mr. Petty stated there is a line
item in your adopted budget under revenues; Transfer
in for Renewal and Replacement of $200,000.
We are not looking for action at today’s meeting. This is for discussion purposes only as one
supervisor is not in attendance. We can
bring this back to the January meeting as an agenda item for discussion. We looked at the rate sufficiency and
discussed it among staff and our engineer and were of the opinion it is
substantially correct in form.
Mr. Fennell stated I need to reconcile
what you are telling me and compare to the budget. You believe there is a rate insufficiency
problem. There is an issue going forward
with the Capital Improvement Plan.
Mr. Petty stated we believe there is
a split between the fixed and variable cost allocations, which are askew. The rates are insufficient to get you what
you listed as your goals in 1992.
Certainly we have new goals in the capital improvement program that have
yet to be listed.
Mr. Fennell stated we have to take
those into account. Please give us a
current list of various competing groups within Coral Springs as far as cost
per monthly averages. Take our monthly
average and show the cost for living in NSID or Tamarac.
ii. Monthly Water & Sewer Charts
iv. Utility Billing Work Orders
v. Complaints Received/Resolved
Mr. Petty stated these items are
standard in nature. We wish you a very
happy holiday.
Mr. Fennell asked were any
complaints received and/or resolved?
Mr. Petty responded there is nothing
material.
Mr. Fennell asked what is under the
utility billing work orders?
Mr. Petty responded those were corrections
and re-reads on the meters. There is
nothing out of the normal scheme. There
is also nothing out of the ordinary on the monthly water and sewer charts,
which track our chlorine, infiltration, hardness and color.
SEVENTH ORDER OF
BUSINESS Supervisor
Requests and Audience Comments
There not being any, the next item
followed.
EIGHTH ORDER OF BUSINESS Approval of December Financials
and Check Registers
Mr. Fennell asked do we actually
have to approve the invoices?
Mr. Petty responded you do not have to approve them per se. However,