MINUTES OF SPECIAL MEETING
CORAL SPRINGS
IMPROVEMENT DISTRICT
A special meeting of the Board
of Supervisors of the Coral Springs Improvement District was held on
Present and constituting a quorum
were:
Bob Fennell President
Glen Hanks Vice President
Sharon Zich Secretary
Also present were:
Dan Daly Interim Manager
Ed Goscicki Co-Manager –
Dennis Lyles Attorney
John McKune Engineer
Isabello Rodriguez CH2M-Hill
Jane Early CH2M-Hill
Sean Skehan CH2M-Hill
Randy Fredericks Field
Supervisor
Doug Hyche District Staff
Dan Daly District Staff
Diane Manza
Mona Slaughter
Marilyn Murphy
Pamela Rower
FIRST ORDER OF BUSINESS Roll
Call
Mr.
Goscicki called the meeting to order and called the roll.
SECOND ORDER OF BUSINESS Review of Management
Services Contract with
Mr.
Fennell stated you may have received something in the mail from Mr. Daly. I asked him to provide a report on the search
routine for District Manager.
Mr.
Hanks stated I have not seen it
Ms.
Zich stated I have not seen anything either.
Mr.
Daly stated I only sent it to the President.
I apologize.
Mr.
Fennell stated Colin Baenziger & Associates is an executive recruiting firm
for government personnel. They hired a
County Manager for Baker, Florida; City Manager for Cutler Bay, City Manager
for Lake Worth and County Administrator for Martin County. There is a search engine we can use. I do not know how much they charge. Do you know anything about this firm?
Mr. Goscicki responded they are one
of a handful of firms who specialize in government recruiting for City and
Mr. Fennell stated this is one
possibility. We can advertise for one
ourselves.
Mr. Daly stated they interview
potential candidates. You are paying for
the time involved.
Mr. Hanks stated the first item to
discuss is Severn Trent Services management contract. We are getting ahead of ourselves.
Mr. Fennell stated we need to talk
about what services Severn Trent Services provides to us, what we need, what we
want in the future and which services we want to bring in-house. This is a planning meeting. What are our current services?
Mr. Goscicki responded the three
basic services ST provides are the general management, finance and
administration of the financial program and recording services. The engineer services are provided by
CH2M-Hill. You have a staff accountant
who provides the day to day accounting. We
provide records administration including taking the minutes and managing all
the files.
Mr. Hanks stated we need to know the
present scope for management services and what we envision the scope to
be.
Mr. Fennell stated we want personnel
management.
Mr. Hanks stated one of the duties
spelled out in the contract is direction and supervision of all District
employees. What is written in our
contract is the obligation to supervise and provide direction to the employees,
involving the hiring and firing.
Mr. Fennell stated another key
management function is planning.
Planning and controlling are the two basic functions.
Mr. Goscicki stated it is always
difficult to itemize management services.
You can talk about planning, organizing and directing in the general
management of the organization and overseeing the management of those
issues. Associated with this is the
relationship with our neighbors and regulatory agencies. The list is exhaustive and is not listed in
the contract for this reason. We also provide
the financial and records administration side to make sure the District is
moving smoothly. Dealing with current
and projected issues is what management is all about.
Mr. Fennell stated planning,
organizing and controlling are general functions. The plan is either going to be carried out by
engineering or supervising engineering.
Mr. Hanks stated you need to have
someone directing the leaders in the pursuit of certain goals and
identification of goals and putting them to identifiable tasks, along with
evaluating the costs and benefits of different alternatives. The engineer should be designing, providing
alternatives and preparing the costs associated with it. It should be up to management to add their
own advice with the fiscal component, add the advice of legal council and
present recommendations to the Board for the final decision.
Mr. Fennell stated we have a number
of managers appointed within CSID who provide the day-to-day operational
controls such as strategic and operational thinking.
Mr. Hanks stated your operational
management oversees the lower and middle managers, which are Mr. Frederick and
Mr. Hyche. They make sure we have enough
Sodium Chloride on hand and determine how the Lime Softening looks today. The internal managers oversee numerous
employees who perform defined tasks.
They report to your middle level managers who provide recommendations to
the manager.
Mr. Fennell stated in the past we
had a breakdown between the operation and strategic levels. I want to see more on-site operational
management. I do not think you are a
good operational manager.
Mr. Hanks asked are you saying in
the overall picture and function of the plant, we need to be doing more or less
or are we doing the right thing?
Mr. Fennell responded this is what I
call the strategic vision, which the Board participates in.
Mr. Hanks stated if the bill
currently floated through the legislature gets approved, there will be changes
to the competitive bidding thresholds. The
decisions we make in terms going out for competitive bid, will be handled
internally by staff. Those decisions will
be taken on by the Board in order to focus more on bigger issues.
Mr. Fennell stated the Board has to
vote on short amounts of money. In many
ways operational items are almost always voted on by the Board.
Mr. Goscicki stated the Board can
address this through a procurement procedure delegating certain levels of
authority to the manager. The manager
through the same process could delegate certain authorities to other key
staff. This is well within the current
ability of the Board. We do this in
districts with sizeable operations by formulating the procurement code and putting
together a report for the Board’s approval.
Mr. Lyles stated the problem is this
Board has a cap on this type of purchase.
As Mr. Hanks mentioned, our special act is pending before the
legislature, which will put us in line with other local government districts
like CDD’s. Within the authority of our
special act, you can establish procurement code methodologies. You are not required to spend the full
$150,000 but you may want to establish levels well below but they have to come
to the Board and meet certain criteria.
Mr. Hanks stated we need someone to
handle the operational side, which are the day to day operations. I want to make sure we are not focusing on
one aspect of our District at the detriment or neglect of other
components.
Mr. Fennell stated the way this
Board is set up, it is not a one man operation.
The Board actually takes an active part in this. We only meet once a month.
Mr. Hanks stated our normal meetings
last anywhere from an hour to an hour and a half.
Mr. Fennell stated our goal is to
set the general direction of where we want to see the Board go. There should be operational, management and
strategic viewpoints. We need an
architect to figure out where it is going to go.
Mr. Hanks stated we are the ones
providing the direction.
Mr. Fennell stated we are providing
the approval and there is a general feeling we want to convey.
Mr.
Hanks stated keep in mind; all of our seats are coming up for election in three
months. Who knows what will happen. Direction should be given by the manager.
Mr.
Fennell stated we need to think about the right way to form this business so it
is an ongoing business and can survive by having a different manager in a
period of 24 months. The Board is the
stabilizing factor.
Mr.
Hanks stated that is scary.
Mr. Fennell stated I know. We can be voted out every three to four
years. We need to form a continuing
structure going forward to withstand the business structure of the
organization.
Mr. Goscicki stated what you are
discussing is no different than any local government, with an elected body such
as a Board of County Commissioners or City Council providing policy direction
to a City or County Manager. The
stability in those organizations is in the business systems you establish and
put into play to assure the day-to-day business keeps going, the bills get paid
and the Water Treatment Plant continues to operate. You have accounting and financial systems in
place. Managers will come and go. The average tenure for a City or
You are seeing more and more of this
shift in local government. Twenty years
ago,
Mr. Hanks stated it is an active
rather than passive role.
Mr. Goscicki stated absolutely.
Mr. Hanks stated you will be a
manager rather than an administrator.
Mr. Goscicki stated exactly. You have an excellent Operations Manager with
Mr. Doug Hyche. When I was not here, I
relied completely on Mr. Hyche to manage the day-to-day operations and he
provided feedback to me in conference calls as far as any issues and
concerns. The District Manager we
provided does not perform those operations.
They insure the samples are being taken for the discharge monitoring but
making sure we have the systems in place to make sure the permits are being
met, completing the Wastewater Treatment Plant expansions and making sure we
have the right engineering firms on board to keep all of the permits on file.
Mr. Fennell stated part of the
problem we had in the past was too much of this system did not look like CSID;
it was more set up to Gary Moyer/Severn Trent Services standards. The identity of the firm and the business
entity lost its flavor.
Mr. Fennell stated he started off
this way and then grew the business. He
had over 200 districts before selling to Severn Trent Services. There was a question from the employees over
who they were working for whether it was NSID, CSID,
Mr. Goscicki stated a few years ago,
I gave a presentation showing the mix we have.
We have CSID employees, shared employees and ST employees. Over the past year we have done an excellent
job of bringing all of those employees in.
Mr. Hanks stated there are no clear
management structures in place or hierarchy.
Mr. Fennell stated at the time, one
of the solutions presented to us was to have everyone report to Severn Trent
Services. One good solution came about
afterwards, which was for CSID to take on the responsibility of the
employees. The sharing of services with
other entities will continue but there will be a clear line of authority to the
home District, which is CSID. We are
currently trying to figure out what new services we want and what our
organization should be going forward. I
still think there is an issue in American businesses for the proper alignment
of services. The key strength of
American business is the one man/one rule principle; unfortunately you are
limited to what one person can do, how good he is and how good your firm
is. This is the problem with General
Electric. They try to get around those
problems. They are one of the few firms
who can actually produce more than one product.
Most
Mr. Hanks stated like balancing out
the quickest way to get the most short-term results versus the long-term. We need to determine whether we want to get
our results quickly or have long-term results.
It may take us longer or more investment to get there.
Mr. Fennell stated we are a
utility. Are we going to be here 20
years from now? I think so. We better be here for the foreseeable future.
Mr. Hanks stated we plan to be. We should also be planning for natural
disasters. We have to live like today is
our last day but plan to live to 100.
Mr. Fennell stated we issue
long-term bonds. People buy our bonds
because they believe we will be here 30 years from now.
Ms. Zich stated our chance of not
being here is so minute. Someone is
going to be here in 20 years.
Mr. Fennell stated we need long-term
structures and to take management changes or people getting promoted and going
other places. Not only do these things
happen but sometimes people purchase the company. It happened with Mr. Moyer.
Mr. Hanks stated you have the same
uncertainty with an individual or direct hire.
There are so many different opportunities out there. You say you are going to be here and I am
going to be around but you never know what is going to happen. There is no certainty in a person. It is within the structures set up. Let’s think about those structures and the
best way to structure it.
Mr. Fennell stated we should split
what we are doing from operations. We
need an operational side of the management of the employees and a strategic
side. The question will be whether one
needs to report to the other. I spent a
great deal of time in
The criticism of the Japanese
operations has been they are slow making decisions because they have to get
consensus from everyone to figure out what they are going to do. Proposals actually start from working groups,
engineering groups and marketing. It can
take them a long time to make decisions and everyone has to work together. The management is not so much the decider as
a consensus maker. They make good
decisions in the long-term but are slow on making them.
Mr. Hanks stated there is a
difference in the corporate philosophy by the Plant Operators all the way up to
the manager. There is another business
philosophy where there is a disconnected relationship between management and
the corporation. You will see this in
all types of companies.
Mr. Fennell stated I think we have
great operational leadership and abilities within CSID, better than anyone
outside of us.
Mr. Hanks asked is it the people who
make it better or the structure? Mr.
Frederick has 32 years experience and Mr. Hyche has 15 years experience. You have pluses and minuses on both
sides. The plus side is between them,
they have 50 years experience in the District.
The downside is one of them can choose to retire. They can retire next year or in five
years. Is the reason we like how this
business being run because of Mr. Hyche and Mr. Frederick or because of the
structure? Can someone come in and fill
either Mr. Hyche or Mr. Frederick’s place and still please us with their
results?
Mr. Fennell responded maybe so but
we have enough design to where we can promote people within the
organization. We should be doing
this. This is one of the advantages we
have. When we cooperate with other
districts, we have the ability to expand.
Some people have actually made the leap from the operational side to the
strategic side. We need an operational
side and operational management within CSID.
There is still a strategic element above and beyond the normal
operations occurring every day. Issuing
bonds and raising money are issues you do not normally get into with the Water Treatment
Plant. We have other types of consulting
services. I think we need a dual
role. We should have an Operational Manager
who we will call a District Manager who all employees report to. Maybe Mr. Daly can fill this role. The question is who is in charge?
Mr. Goscicki responded I think you
are 90% there already. You have an Operations
Manager who is your employee overseeing all of the operations. All of your day to day field operations are
made up of CSID employees who get strategic direction and support from Severn
Trent Services through our abilities to deal with those utility issues and the
expertise we can bring. The only other
aspects are on the financial side with the accountant you have on board. We provide the financial strategic side in
terms of providing oversight and direction on how a financing plan can be put
together. I am not pleased with where we
are right now and we have some issues, which we will discuss under other
business. We have the process in place. The IT side is 100% under your control. You have taken it over and separated it from Severn
Trent Services whereas before it was a shared operation. It is your employee, your software and your
customer service representatives. It is
similar to the field operations side and specific to your operations. We currently have a structure in place where Severn
Trent Services as your manager deals with the fiscal oversight and
planning. The one day to day activity we
continue to provide for you is records administration and management.
Mr. Fennell stated we had problems
with records administration and asset allocation. We are having problems keeping track of
everything we own and where they are located.
Mr. Goscicki stated issues came out
of GASB-34, which required certain records keeping in terms of identifying
fixed assets. I always thought we should
also include within our service, the complete financial service and not
bifurcate the fiscal planning from the accounting. We had the bifurcation of responsibilities
where some things were getting done and some were not. From what I understand from our meeting
yesterday, we are currently caught up.
This is the first part of a true asset management program in terms of
not only identifying the value but getting a complete description of the asset
and where it is located. If it is an ongoing
asset, you start getting into the replacement value aspects as the condition
and capacity of the equipment plus the overall quality. This is something we routinely do for our
clients on the operating services side.
We do an asset inventory of the physical assets, rate the equipment,
come up with a replacement valuation on the equipment and create a schedule for
doing the replacement.
Mr. Fennell stated I can certainly
see most of the management structure is within CSID. For decisions on policies or financial
issues, we can hire outside people. I do
not know if there is any one manager who can do bond issues. We usually hire Bond Counsel.
Mr. Lyles stated you have Bond
Counsel. You also have an Underwriter
who supports Bond Counsel. They serve
significant roles. You need to have
someone within the organization, either as an employee or as a consultant to
maximize your benefit and make sure everything is done correctly. You will need to have someone on the
management side with significant bond experience; whether you have a full-time
governmental management expert or a consulting arrangement with someone who has
experience with the District and its finances, otherwise you run the risk of
wasting time and money. The District
Engineer also plays a significant role.
Mr. Hanks asked is this something
our present District Engineer has experience with or is it outside of their
expertise?
Mr. Skehan responded working with
you on your rate structure and doing the rate analysis, we have plenty of experience. At present, the limit of what we have been
doing is narrow.
Mr. Hanks stated I know it is not
within your project scope but CH2M-Hill is a large company.
Mr. Skehan stated we can certainly
help with bond issues. This is certainly
a feature we can offer.
Mr. Lyles stated Ms. Early and Mr.
McKune with CH2M-Hill have been involved in a number of bond transactions for
CSID and NSID. I am not referring to the
engineering role as much as the role the manager plays. For example, if these bonds are going to be
pledging assessments, we need to have the appropriate notices and assessment
hearings. Part of this is my job but the
other part is the manager relying on previous experience. The Board will be pledging rates showing the
need for increases, which will be the method of paying back and amortizing the
bonds. This is a role the Board needs to
be comfortable with the manager and financial consultant filling for you.
Mr. Goscicki stated the
Underwriters, Bond Counsel and Investment Bankers will all tell you that you
need this function. They look for
someone to create bridges between their expertise and their specialty to make
sure all of the pieces come together.
They want to know your advocate is also looking at this. Everyone has their own vested interest in
this process. It gives everyone comfort
when your manager is a key player in the process and saying, “I looked at this
and it is a good deal”. No one is taking
advantage of the process for their single benefit.
Mr. Hanks stated this is the role
you want your manager to take, whether for legal counsel or engineering
services.
Mr. Lyles stated there is a specific
section in the Offering Memorandum stating who serves as District Manager and
their duties. Investors for bonds we or
any other district issue reviews this document to determine whether or not they
want to invest in our bonds. It affects
the rate we pay. Whoever fills this role
will have to provide a certificate or sign off on certain documents as District
Manager as part of the closing process for the sale of the bonds.
Mr. Hanks asked are there any
qualifications or designations for District Managers? There are a variety of trades out there.
Mr. Goscicki responded there is no
certification for District Managers.
There is an Association of District Managers but they are more involved
in Fire Districts. The association is
pushing an agenda to create some type of certification. A City Manager belongs to an Association of
City and
Mr. Hanks stated in some ways, it is
like looking for a CEO. You can hire
someone who does not have a business degree who dropped out of college and
formed their own company. We are looking
at the actions of this person.
Mr. Fennell stated obviously they
should have some kind of training. This
is not so much an operation because we have people who provide operations. The experience has to be in leading,
organization, strategy, finance and how to tie this to our customers. Severn Trent Services is more inclined to have
a person who goes up to
Mr. Goscicki stated we are not
lobbyists but part of our business is certainly intergovernmental
relationships. It is not in the nature
of our company to lobby when we are not lobbyists and is not part of our
expertise. However, we are working with
the City of
Mr. Hanks stated you mentioned the
person who is assigned as the manager of these bond issues may have the
potential to affect the rate. Is this so
much of an issue when it is an appropriation?
Mr. Lyles responded I am not sure I
understand the question. Typically what
you see is a corporate entity involved in the issuance of these bonds, irrespective
of the type of Special District. They
are not a named individual. They are
typically a management company.
Obviously in a larger district having its own staff, they will identify
the District Manager by name.
Mr. Hanks stated maybe this is different
with SFWMD as they are a state agency.
They have a board and a manager as opposed to a management company.
Mr. Lyles stated correct. It is a different order of magnitude.
Mr. Hanks stated Mr. Pat O’Quinn is
affiliated with the Plantation W.C.D. He
is their employee and their manager.
Mr. Lyles stated correct, unless you
needed to have a corporation as your manager.
In NSID, Turtle Run and other Special Districts, there is a section in
the Offering Documents pertaining to who manages the project and makes sure
things are done correctly now and in the future. Investors are interested in the quality and
security but also whether or not the community is going to continue to be
properly run and maintained and whether it is more or less likely they might
have to foreclose one day. If the
community is properly maintained, it is virtually impossible for the investors
to look at something as drastic as foreclosure.
Mr. Hanks stated if Mr. Mike Levinson
resigned or retired, at the point of transition where you are bringing in a new
manager, depending on what level of experience he has, you could see a chance
in how this is received in terms of the rating.
Mr. Lyles stated probably not in
something like the City of
Ms. Zich stated we definitely need a
consultant for the bonds as they are technical.
Mr. Goscicki stated you currently
have a team in place with Bond Counsel who is Ms. Denise Ganz with Ruden,
McClosky.
Mr. Lyles stated you have this now
with Severn Trent Services. They portray
this management role in this and other financings around the state. This is something they offer to you. If you are amending or revising the
management contract, this is one portion you may want to have a continuing
relationship with in connection with the financings of the District. You do not pay anything but if you need it,
you have access to it. This has not
traditionally been part of what Severn Trent Services has been involved
with. It is separate.
Mr. Fennell asked what should our
structure be going forward?
Ms. Zich responded this is the first
time I realized Severn Trent Services provided these services.
Mr. Fennell stated they are listed
in their contract. Some of them are
occasional services. We have not gone
out for bonds in 15 years. We have been
paying them off.
Mr. Goscicki stated you are getting
ready to pay them off.
Mr. Fennell stated since I have been
on the Board, we probably paid off half of the bonds. We do the accounting but Severn Trent
Services does the financial reporting.
Mr. Lyles stated there are two
different contracts. You used to have an
agreement with Gary L. Moyer, P.A. and a separate agreement with District
Financial Services, which was Ms. Rhonda Archer’s company. When Severn Trent Services acquired Gary L.
Moyer, P.A., it also acquired District Financial Services. Both of those agreements were taken over by Severn
Trent Services with your approval. They
merged the financial and management services when the acquisition took
place.
Mr. Goscicki stated all of our
current contracts with our clients; we have a single contract combining all of
these services.
Mr. Hanks stated I did not mean to
be concerned.
Mr. Lyles stated I do not think you
need to be concerned about it.
Mr. Hanks asked what is their order
of magnitude? Could the District Manager
have an impact on the rates?
Mr. Lyles asked are you referring to
when you go out and issue new bonds and have a new manager with no credentials?
Mr. Hanks responded yes.
Mr. Lyles stated it would catch the investors’
attention. The biggest and most
significant factor we have and CSID has is we have all of these completed
residential structures and they are sitting on
Mr. Fennell stated we need two lists;
one from an accounting standpoint and another from a business standpoint. It is obvious whether or not we continue with
Severn Trent Services; we need to rewrite this contract to reflect what we are
doing today and what we think we will need in the future. I want to have our operational managers go
through this list, decide what they are comfortable doing in-house and what
services they what to see. For example, in
looking at what Ms. Archer provided; we are doing the accounts payable ourselves,
risk management is an insurance issue, we work on the annual budget internally
but it has to meet certain specifications.
We pay Severn Trent Services for bond compliance but it may require a
different viewpoint. Why do we need
special assessment services?
Mr. Goscicki responded you need to
update your assessments each year. I do
not want you to underestimate that.
Mr. Fennell stated we are doing the
utility billing management and human resource management in-house. We should have two different types of
services; financial services and the general strategic management services. We should decide what we can do
in-house. Frankly we are more
comfortable with other services. I am
not saying Severn Trent Services will be the manager but we will have those
services.
Mr. Hanks stated we are limited on
being able to discuss items.
Mr. Fennell stated we need to have
our own staff. We will take what makes
sense in-house. Maybe we should contact
other districts. The first thing we
should do is come up with a decent list of what we want in terms of services.
Mr. Hanks stated keep in mind we are
not the only district who has been affected by personnel changes at Severn
Trent Services. We supply services to
two other districts and we need to think about the implications of our
decisions on them.
Ms. Zich asked can we be separate
from the other districts?
Mr. Goscicki responded we have
separate contracts with each district.
One of the complicating issues is you have staff who at one time were shared
employees. They were paid half by NSID
and half by CSID. Some were paid by
other districts. You have no Interlocal
Agreements tying them together. At one
point some of the employees became Severn Trent Services employees and others
became District employees. Right now the
situation has evolve to where everyone on-site is a District employee but you
are providing services without any contract on a handshake deal to NSID where
you have a number of employees plus you are providing utility billing services. You are currently providing utility billing
services to our clients. You have your
own hardware and software and will be migrating those out.
Mr. Fennell stated the fact is we
need to step up and get those Interlocal Agreements.
Mr. Hanks stated you are saying we
need to formalize any agreements we have handshake deals on.
Mr. Fennell stated correct. This individual needs to be a CSID employee.
Mr. Hanks asked with regards to
what?
Mr. Fennell responded with the
operational services.
Mr. Hanks stated my concern is we
are in the process of evaluating the management contract. If we were not having this discussion about Severn
Trent Services and the management services being provided, I would not have
even thought about formalizing these agreements.
Mr. Goscicki stated Mr. Hyche is
shared between CSID and NSID. What has
always been the common link facilitating this was when it was with Gary
Moyer. When it was with Severn Trent
Services, there was a common manager who oversaw and provided direction to this
employee who is now a CSID employee.
There was a comfort zone by all of the boards involved saying, “My
manager is overlooking the staff providing support to me”. Whether this was my staff at NSID or staff at
CSID, the common manager acted on the common interest of both districts. This is the advantage Mr. Moyer created by
having shared employees. He chose to do
so at the time rather than having them as his employees. We will now make them our employees and share
them out. This way we keep the
responsibility to not only manage those employees but assure equitable
distribution to our clients. The common
manager is what made this process work in the past.
Mr. Fennell stated I think we need
someone like that.
Mr. Hanks stated being the person
who is coordinating with the various districts.
Mr. Fennell stated as well as with
our own services.
Mr. Hanks stated this may be a role
or responsibility of someone on staff.
Mr. Fennell stated our job should be
to make sure we do the best we can with the services we have. This gives you a chain of command including
the employees who report to you. We
should coordinate and perform those services ourselves. From a strategic standpoint, we need outside
services, whether this by Severn Trent Services or someone else. We need to go through this and decide which
services we want to have. As we have
discussed this, it is becoming clear we need such an individual, not just from
an operational standpoint but from a personnel standpoint.
Mr. Hanks stated we need to have a
well organized structure and be supportive of our people. If you do not have the right people and there
is a breakdown between one person and another and one leaves, you are going to
be in trouble. In the end, we are only as
good as our employees.
Mr. Goscicki stated even though you
have shared employees and shared functions, in terms of looking at your
activities, I suggest looking at CSID first.
Otherwise, you are making significant assumptions as to what other independent
entities may or may not do. This is
putting a burden on your staff. You are
asking them to go through this analysis to change your structure and assume
they will fall into line with whatever process you come up with. It is best if you look at what is best for
CSID from your perspective and how this works for you. Once you go through this analysis and
discussion, if you choose to move into other areas, you can determine how you
will provide support or service to others.
Mr. Fennell stated I want to
maintain the same services we are already providing.
Mr. Hanks stated we need to be
careful because we currently have people working for us in-house. The supervisors can do what they want but I
am thinking about what is going to be best for the employees.
Mr. Fennell asked what do you think
we should do? Now is the opportunity to
make some changes.
Mr. Hyche responded in my opinion,
you seem to be moving in the right direction.
Mr. Hanks asked is this the right
forum to have people discussing what is right?
I hate for someone to get burned because we chose to do something
different.
Mr. Fennell stated I still what to
hear their opinions. This is the only
forum we have.
Mr. Hyche stated operationally the
districts are fine. For many years, I operated
the districts between Mr. Jan Zilmer, Mr. Dan Daly and myself as well as Mr.
Frederick, Mr. Selchan and the other employees.
We brought people in who were running the plants before I was in this
position and they are doing a good job.
The infrastructure is there and we are bringing them up. How you want to handle the other services is
entirely up to you. I do not think I can
handle it. It is not my expertise.
Mr. Frederick stated I agree.
Mr. Daly stated I agree with Mr.
Hyche and Mr. Frederick. We run without
direction. Our employees do their
jobs. This is a function of the Board
planning and through no fault of the management company, has been fragmented
over the years where you were going in one direction with one manager and then
a new District Manager came in. Some
projects may not have seen their completion and some items on the agenda may
have been revisited a month or two months later. The Board needs to look at what leadership
they want and who they want to report to.
You can hire someone from Severn Trent Services who can go out and hire
someone or you can hire another management company. Most of what management companies are capable
of doing, we are doing. Some of the
things they cannot do in-house and should be doing in-house but do not have the
expertise to do in-house, we need to look at whether you hire a national
company or outside consultants. They can
work for us on a fee basis.
Working with Severn Trent Services is
fine but I agree with whatever direction the Board wants to take. The longevity and direction has to be
separate due to employee differences with the management company. It can actually happen with someone you hire
off the street. I would think the Board
wants to take one of the long-term employees such as Mr. Hyche, Mr. Frederick,
Mr. Zilmer or myself and get them involved in some of the meetings, whether
they be finance, planning, budget or capital improvements. Unfortunately with the absence of Mr. Petty, no
one knows what the plan is. The District
is actually at a disadvantage by playing catch-up. You only know what you hear. My recommendation is for a person do their
normal job and then structure it so they can do some of their duties through
some of their employees and be involved in the meetings. At least there is another set of ears and
eyes so if something happens where they were in an accident or moved there is continuity
and someone knows what was taking place and the direction the District is going
in.
Mr. Hanks stated Mr. Daly and I had
some discussions over the past week. You
mentioned many issues were left off the table.
Sometimes it is too good to leave a project unfinished. We need to have the right focus and realize
we are working on the right one. We need
redundancy in the District management, which needs to be in-house. It is not a redundant position at a
management company. Dealing with
corporations, you may or may not have this individual there to continue the
relationship. If there was ever any
personnel issue, hopefully things can be worked out so we could have a
reasonable transition and both parties will not be transitioning at the same
time. I want the Board to consider this
when we are structuring things. It may
mean some additional personnel costs.
This person cannot be on every conference call but certain key elements need
to be identified. Whatever firm is
providing management services need to buy into this concept.
Mr. Fennell asked are there any
other comments?
Mr. Petty responded you are looking
at the broad spectrum and trying to decide where to put your focus. It is a big task because you are starting
from scratch. If there is something in
the past history you think is applicable and you want to look at it fresh, it
is going to take some time. There is
some work involved. I cannot say whether
or not it is positive or negative. If
you have positives such as your operational staff, it gives you a point of
demarcation. You do not want to look at
your entire operations. If your
operations are fine and you are looking at the management, finance and
administrative services under the contract, you have a clearer view of where
you need to go. However, I can see much
of the discussion is going in a bigger circle.
I do not know if I can give you any direction since there appears to be
a bigger picture.
Mr. Goscicki stated you have come a
long way in this agreement in terms of where you were two years ago. You institutionalized your operational staff
being part of your employees. From what
I am hearing and what you described, I think you are there in terms of what you
have. You have a management company
within Severn Trent Services dealing with high level strategic issues and
providing oversight and direction. You
have on-site management operations employees, whether it is field operations
and customer service operations. Those
employees are here on-site. I think you
have the mix you need in terms of how you work it. You have a proposal on the table in terms of
how you close more of the gap with having a manager but not seeing him often
enough. One of the things we would be
more than happy to do would be to sit down and re-structure the contract and
give better definition. The current
contract is from 1992 or maybe earlier.
It certainly is not a contract we use today. We do not feel it accurately describes the
relationships we have. We welcome the
opportunity to come back to you with a rate structure better defining those
roles and relationships. I think you
evolved to a mix providing you the input, operations by your people on-site as
well as the management services the Board is looking for from a management
company, the expertise the management company brings and how you bridge this to
the day-to-day operations in the field.
Mr. Hanks asked what are we doing in
the meantime?
Mr. Fennell responded we already
made some changes such as appointing Mr. Daly our District Manager. We also have management services from Severn
Trent Services, which we have not terminated.
From our discussions today, I feel we need our own on-site day to day
operational manager. This person will be
our employee. He is here when we have a
natural disaster like a hurricane. On
the other hand, we need strategic thinking and management from a finance and
operations point of view in terms of dealing with all the issues we have. There are some real strategic issues; not day-to-day
operations issues requiring some real thinking.
The only real issue is how those two individuals work together.
Mr. Hanks stated you have experience
with more organizations than we have.
Mr. Lyles stated you ultimately need
to have one person in charge. The trick
is having two functions because both are necessary to CSID’s short-term and
long-term operations. The detail is
going to be in a service contract. If it
is going to be Severn Trent Services, there needs to be a contract spelling out
when and under what circumstances they are going to be needed and how they are
going to get paid. Telling them they are
needed is going to have to come from here or from the day to day manager or
administrator. You do not want to have
to guess who the responsible person is.
You want to have one person to talk to whose job it is to make sure the
in-house staff is appropriate and knows what they are doing. If they need to go outside under this
Consulting Services Agreement, he or she will hold Severn Trent Services accountable
and get those tasks completed for you.
Mr. Fennell stated I hear you. Is there a possibility for us to appoint two
people, a District Manager and an Assistant District Manager, one from a
consulting company and the other from on-site staff?
Mr. Goscicki responded if one is the
manager, you need to define their relationship where one is the District
Manager and the other is the Assistant District Manager and define their
roles. The confusion is where you try to
have co-managers and mixing their responsibilities.
Ms. Zich stated I agree. When you said two people, I thought we only
needed one person.
Mr. Fennell stated it is not just
the people but there would be two different groups; one representing Severn
Trent Services and their interest and the other representing CSID. There can be issues where those interests can
conflict. What is best for CSID may not
be the best for Severn Trent Services.
For instance, we had an issue with Severn Trent Services, which was an
in-house issue that lost us our District Manager and Financial Advisor. It had nothing to do with us. It was not a CSID issue. There are conflicts like this, which do not
necessarily serve one versus the other.
We have two different organizations with different goals.
Mr. Goscicki stated you have the
same conflicting issues even if it is an individual. If you hire an individual to be the General
Manager, this individual will have their own personal interest as well as the
interest of the District. You always
have this dichotomy whether it is a company or an individual. What you are looking for with the company is
whether the ethics or cultural and values are there saying “We are in the
business of supporting our clients and are going to do what is right for our
clients”.
Mr. Hanks stated keep in mind; we
are trying to build a great organization.
Some of the best ideas come about as a result of tension. Look at some of the documents we have had for
the last 200 years such as the Constitution or Declaration of
Independence. Those were not formed in a
time where there was no discussion or when everything was in harmony. There were serious issues being discussed at
that time. There is something to be said
about tension between entities. You are
giving conflicting or different viewpoints on items but the Board in the end is
the deciding factor. We can benefit from
having two different viewpoints. We have
to be careful and clear on the responsibilities and accountability of the
different positions or people involved but we can benefit greatly from having
an extra voice.
Mr. Fennell stated I think so. An example of this is having a general staff coming in and making joint decisions, like the Germans do. Our own staff is modeled after them. Many times you need another viewpoint; an operational v