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
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
David Green CH2M-Hill
Sean Skehan CH2M-Hill
Cory Johnson CH2M-Hill
Randy Fredericks Field
Supervisor
Doug Hyche District Staff
Mona Slaughter
Daryl Kissoon
FIRST ORDER OF BUSINESS Roll
Call
Mr.
Fennell called the meeting to order and called the roll.
SECOND ORDER OF BUSINESS Approval of the Minutes of
the March 19, 2007 Meeting
Mr. Fennell stated each Board member
received a copy of the minutes of the
There not being any,
On MOTION by Ms. Zich seconded by Mr. Hanks
with all in favor the minutes of the
THIRD ORDER OF
BUSINESS Presentations
by CH2M-Hill
A.
Rate
Study
Mr. Green from CH2M-Hill provided the
following PowerPoint presentation on the water and wastewater rate analysis,
which will be made a part of the official record:
• Overview
of rate development process
○ Utility revenue requirements
○ Revenues to be recovered from user
charges
• System
revenue requirements
○ Cash basis
○ Projected operating costs, renewal and
replacement funds, existing and new debt service requirements through 2012
• Capital
improvement program
○ $54.3 million
▪ First phase (now): $39.6 million for 7.4
mgd nano water treatment, A&N wastewater plant, solids handling and monitor
well
▪ Second phase (2012): $14.7 million for
reclaimed facility/conveyance and operations building
• Capital
improvement funding
○ First revenue bond - $44.6 million
▪ 3.1% issuance cost with insurance
▪ 4.2% interest rate
▪ 30 year debt repayment schedule
▪ 2 years capitalized interest
○ Second revenue bond - $44.6 million
▪ Issued
▪ 3.1% issuance cost with insurance
▪ 4.2% interest rate
▪ 30 year debt repayment schedule
• Bond
repayment schedules
• Total
system revenue requirements with new debt service
• Revenue requirements with new debt
service and projected revenues under existing rates
• Required
change in rate revenues with new debt service
• Additional
rate revenue requirement options
○ Option 1: Keep current rate structure;
apply uniform change in all rates
○ Option 2: Recover new debt service costs
through annual institutional charge or assessment; recover other costs through
uniform adjustment in current rates
○ Option 3: Rate structure revisions to
reflect cost of service
• Recommendations
and conclusions
○ Current rates will not support projected
costs of utility operations and new debt service requirements
○ Adjust rates and other sources of income
to cover projected costs and other financial commitments
○ Schedule public hearing to consider
proposed rate adjustments
• Scope
of work
B.
Capital
Improvement Program Summary Report
Mr. Skehan provided a report on the
capital improvement program.
SIXTH
ORDER OF BUSINESS Consideration
of Work Authorizations
A. No. 34.1 for 8-MGD Nano-Filtration Water
Treatment Plant
Mr.
Hanks asked what is the cost differential; capital and operational for a Lime
Softening Plant and Nano Filtration Plant?
What happens if there is a gasoline spill within our wellfield? Are the regulations adequate to address
environmental contamination?
Mr.
Skehan responded the lime softening is less likely to do this.
Mr.
Johnson stated if you were to have a contamination spill of gasoline, there are
going to be volatile organics and some made up of soluble water. The water soluble ones are going to be
removed by a nano filtration membrane because the molecules are large enough to
be removed. If they are gaseous, they
are volatile. There is a good chance
some of them will be removed in your aeration system.
Mr.
Hanks stated it is a “what if” scenario.
Mr.
Johnson stated the flip side is if you were not doing some type of nano
filtration. Lime softening is not going
to give you the removal a nano filtration plant would.
Mr.
Fennell stated the EPA will still come out and shut us down anyway. I hear what you are saying but I am not sure
they are going to believe us.
Mr.
Skehan stated you will be shutting down one well; not your entire system. One well may possibly be contaminated. Because you have a number of wells in your
wellfield and there is some redundancy to what you have for your wells, the spill
potentially taking place will not be large enough to contaminate your entire
wellfield; unless you are sprayed with gasoline for some period of time. This is not likely.
I
do not mean to say the future regulation is the most significant item, but it is
a significant item. On the water quality
side, organics, water and color removal are significant. You disinfect byproducts as you chlorinate
and get some color into your water. You
have to be careful about what those by-products are. Those by-products have come under very close scrutiny
from a regulatory standpoint over the past several years. Being able to maintain adequate contact time
for your water supply in the system and making sure you have adequate residual
out into the furthest extent of your system are extremely important. With nano filtration, it will be easier to do
this because you do not have concern over those by-products being present as
you would in the lime softening.
Mr.
Fennell stated I thought you said you reduced the chlorine content in the
water.
Mr.
Johnson stated you currently chlorinate.
By doing this, you add chlorine and there is ammonia in the water, which
does not form by-products. The problem
is there is not sufficient ammonia. This
will allow you to have a pre-chlorinated system rather than a chlorinated
system. They typically have to do more
flushing due to potential biological re-growth in the system. I am not sure whether or not you have a
problem with this.
Mr.
Fennell stated if we go through the nano filtration process, how will it give
us healthier water? What is the benefit?
Mr.
Skehan responded I provided a handout to the Board going through great detail
with respect to some of these questions.
Mr.
Hanks asked what are potential impacts to the water distribution system?
Mr.
Johnson responded you are going to remove significantly more organic matter
from the water. It is a stronger oxidant
and should have less chance for biological re-growth in the system. In addition, we can tailor the water. Whenever you change the water quality going
into the distribution system, it changes the scale.
Mr.
Hanks asked can you explain what scale is?
Mr.
Johnson responded yes. When you have a
certain amount of calcium content in the water, scale will form inside pipes
through calcium precipitation. You will
see scale when you replace your hot water heater every couple of years. We can tailor the water to whatever calcium
content we need for the system. I
believe this plant does not have a significant scale problem because you have
phosphate.
Mr.
Hyche stated we started the phosphate process three years ago.
Mr.
Johnson stated
Mr.
Hyche stated so does the City of
Mr.
Hanks stated it is just a matter of how we are treating it. I wanted to put this on the record to see
whether or not this will have any impact.
Mr.
Johnson stated certainly a distribution system likes a stable or consistent
water quality. When you make the switch
from a Lime Softening Plant to a Nano Filtration Plant, your water quality may
be different for a period of time.
Mr.
Hanks asked do we have the ability to pull PH as the water flows out of the
plant?
Mr.
Johnson responded yes, but the design will need to incorporate some type of PH
adjustment on the front and back side of your treatment system. We may have some acid on the front side to
help with hydrogen sulfide removal, however, as we get deeper in the design, we
can flush this out. On the back side, we
will add sodium hydroxide. This will
give you the flexibility to adjust your PH to a more stable level.
Currently
the regulated by-products are methanes and acidic acids, which were a large
effort for the EPA because they performed studies on those chemicals and found
cancer causing issues. They regulated
those at 60 mgd and your plant is well below this level because you
chlornaminate and the weaker oxidant does not attack the organics in the
water. EPA is starting to look at the
chlornaminated by-products in the water.
From the preliminary tests performed, they found disinfection may
actually be worse than the previous by-products.
Mr.
Fennell asked what do you mean by worse?
Mr.
Johnson responded it is worse as far as the long-term effects of ingesting
these by-products. The regulation of
these are further into the future as it has to go onto the contaminate
candidate list. It is not inconceivable
20 years from now; you will have regulations on those.
Mr.
Hanks stated 20 years ago, all you were looking at was how much chlorine you had
going out and whether you had bugs in the system.
Mr.
Johnson stated correct. Years ago,
utilities were bleaching the color out of the water. They would apply massive doses of chlorine
and it would react to these organics and people were ingesting these carcinogens
in large quantities.
Mr.
Fennell stated no one admitted to doing so.
Mr.
Goscicki stated I can name three facilities in
Mr.
Johnson stated the bulk of the current utilities facing what you are currently
facing are starting to look at newer technologies like lime softening with an
added filtration process. It is a more
cutting edge process to install. We have
not been doing as many lime softening designs because most utilities are moving
in the other direction. Some examples are
Mr.
Goscicki stated the City of
Mr.
Fennell stated you are implying there may be some hidden health costs that we
do not know about.
Mr.
Goscicki stated you are buying some insurance with nano filtration because you
are getting a treatment process, which is much more inclusive in the removal of
soluble material at a much higher degree where lime softening is precipitating
out your hardness. You are getting a
degree of insurance and paying for it.
Mr.
Fennell stated it costs 10% more to do this.
It will be $25 million versus $18 million. When you think about it, $25 million is half
of our bond issue.
Mr.
Hanks stated we are going to be using a certain portion of our plant for lime
softening or nano filtration. Another
consideration is the cost of real estate.
Mr.
Fennell asked will this process get us a new plant or a re-built plant?
Mr.
Skehan responded both. Some components
will have to be re-built and some parts are new.
Mr.
Fennell stated it will still be good for 30 years.
Mr.
Skehan stated we do not know based on the unknowns with where the regulations
are going.
Mr.
Hanks stated assuming everything is equal and the regulations remain constant,
the physical plant will last 30 years.
Mr.
Skehan stated correct. One of the things
you do not see is the ease of operations and maintenance. There is a significant difference between the
operations and maintenance of a Nano Filtration Plant. The key item is it is a consistent operation,
less operator intensive, eliminates your sludge handling and is highly
automatable. There are cost savings
built into each of those items. You do
not have any more sludge handling. From
an operator’s standpoint, you can potentially operate with fewer staff. The automation component speaks for itself as
far as staff and the consistency. One
significant item in your cost for operation is the chemicals.
Mr.
Goscicki asked have you done an analysis looking at both the capital and
O&M costs?
Mr.
Skehan responded not a detailed one. We
anticipated some questions and doing a justification between these two
different technologies and moving into nano filtration. This question is important in trying to make
sure the dollars you are spending are going to be the best dollars for the technology
as an insurance policy and will take you through these benefits. It has been done to some level of
detail. We talked earlier today with Mr.
McKune and Mr. Hyche to try to get some of the costs but we did not have enough
time to digest those numbers to where we are comfortable.
Mr.
Hanks asked what is the capacity?
Mr.
Skehan responded 7.4 mgd.
Mr.
McKune stated this is the current maximum plus 10%.
Mr.
Hanks asked what about redundancy for compliance with the permits? What additional capacity do we need in order to
meet the regulations?
Mr.
McKune responded it will be sufficient based upon the size of the train.
Mr.
Goscicki stated you build multiple trains in the Nano Filtration Plant and you
size it.
Mr.
Hanks stated this is giving us enough plant capacity to meet the permit
conditions for DEP, whether it be for nano filtration or lime softening.
Mr.
Skehan stated it will leave some portion of your lime softening system
intact. You do not want to lose all the
capital. Your newest train on the lime
softening will maintain it so there is some balance of the nano filtration and
lime softening of the water.
Mr.
Johnson stated the 7.4 mgd will cover your current capacity needs plus 10%.
Mr.
Goscicki asked is the 7.4 mgd the nano filtration or the nano and the existing
portion of the lime softening?
Mr.
Skehan responded just the nano.
Mr.
Johnson stated you will have a lime softening train set in standby mode in the
event of a catastrophic event, which is highly unlikely and you need to bring
the plant back online so you have flexibility.
Mr.
Goscicki asked what are you doing with the waste stream from the nano plant?
Mr.
Skehan responded fortunately you have two injection wells. The waste stream from the nano filtration is
not the most aggressive waste stream as far as the concentrate. Up until the time we know more details, it
could potentially be brought back into our reuse system so there are no loses
from the nano filtration process.
Otherwise, this will go into the injection well system.
Mr.
Goscicki asked is there sufficient capacity in the existing injection well to undertake
this?
Mr.
Skehan responded yes.
Mr.
Fennell asked does the $25 million include any necessary updates for the lime
softening? Some of these components are
in bad shape.
Mr.
Skehan stated one component does not need much work. The holder components are where the significant
amount of the work will be. One
necessary component is the sludge handling.
This will go away if you are minimizing the use of the lime softening
facility and the watering which was considered part of an upgrade and
maintaining what you currently have for the lime softening system.
Mr.
Hanks asked what cost savings will we have in our capital improvement plan if
we go with nano filtration?
Mr.
Skehan responded the capital improvement plan is currently structured with the
nano filtration. This is the assumption
we used.
Mr.
Hanks asked was the sludge and dewatering related to the waste stream and not
the line sludge?
Mr.
Goscicki responded yes, certainly on the wastewater side.
Mr.
Hanks asked where does our lime and sludge go?
Mr.
Skehan responded I am not sure where it is being hauled off to.
Mr.
Hyche stated DRD hauls it to farms up north.
They have their own permitted areas to haul the sludge to.
Mr.
Fennell asked are you coming back to us with a proforma statement reflecting
our current operating and proposed costs?
Mr.
Skehan responded yes.
Mr.
Fennell stated I want an estimate of our operating costs for nano filtration
for year one because I have to justify $6 million. If we are going to get a 25% to 30% reduction
in operating costs, this makes it an equal expenditure. It is great if we can get an operating
benefit.
Mr.
Goscicki stated I assume the rate model did not go into great detail of
assuming cost efficiencies from one operation.
You just escalated the current budget.
Mr.
Green stated we have a budget to 2011 and estimated a $400,000 savings in
operating expenses.
Mr.
Skehan stated we have a generalized schedule.
In a report we will provide to you, there is a much more detailed
schedule covering each of the projects.
For ease of discussion, you have several projects such as nano
filtration, Wastewater Treatment Plants A&B, solids and handling. We started earlier this year and moved
forward quickly with the validation for the nano filtration and Lime Softening
Plant. This is part of the report; not just
the benefits of nano filtration. The
design will be taking place in April, assuming we start right now. We brought with us a task order to do
this. The design will take us out until
January or March of next year and then the construction period will take us out
to 2010. The other projects will have a
much shorter term, taking us out into early or mid 2008. The solids handling will go out to mid
2008. These are the bulk of the projects
in Phase 1 or $39 million phase of the capital improvement plan.
For
Phase 2, there is a great deal of unknown.
There have already been discussions taking place between the Water
Management District and the City of Coral Springs in looking at different
options because the Water Use Permit requires evaluation of reuse. The current Water Use Permit is a component
of what we are doing to be able to maintain the allocation from the Biscayne
Aquifer. The current operating permit
for the Wastewater Treatment Plant will have to be renewed in three years. There was a great deal of difficulty
obtaining this permit the last time we renewed it due to the reuse
component. As part of this permit, DEP
has called for implementation of some level of reuse. You are seeing the gathering storm with the
Water Management District and DEP in pushing reuse because of drought
conditions, water considerations and being located next to the everglades and
maintaining environmental considerations.
All of these items play into what is taking place in CSID and NSID. The cost for the project is $39.1 million for
Phase 1 and $14.7 million for Phase 2 bringing us to a total of $54 million for
the entire capital improvement plan.
Mr.
Fennell asked how much of this project can we currently cover?
Mr.
Goscicki responded none of this is covered.
You started obtaining a loan as the District does not have enough funds
in the bank to complete the current $6.8 million project. This is why we are working quickly on the
rate increase and the short-term financing to keep this project going and then
rolling the remaining funds into the long-term finance to pick up the bigger
program.
Mr.
Fennell stated I noticed we have $3.6 million in investments and $2.4 million
in the State Board Administration Account.
What is this money doing for us?
Mr.
Goscicki responded your balance sheet gives you a picture of the money you have
on hand. You received all of your
revenue for the year, which is reflected on the balance sheet. You still need to cover your O&M expenses
for the balance of the year out of the Revenue Fund.
Mr.
Fennell stated this is for the General Fund.
The water and sewer are paid every month and we still have funds flowing
in. I see $6 million. Are you telling me I cannot spend it?
Ms.
Rowan responded I have not seen those financial statements.
Mr.
Fennell stated I liked the format. They
finally got them down to a business form, which I can read.
Mr.
Goscicki stated you cannot look at the assets.
You have to look at the net payment.
If you look at the assets, you have to subtract out the liability.
Mr.
Fennell stated we have $3.6 million in investment restricted cash and $2.4 in
the State Board Administration Account.
Mr.
Goscicki stated correct. You have to
look at page two and all the liabilities you have on the book and the last two
lines of the fund balance. This is where
you have no money left.
Mr.
Fennell stated this is money already invested.
Mr.
Goscicki stated the fund balance designated for reserve. The non-reserved funds are all you have to
work with. Everything else is committed.
Mr.
Fennell asked what is the $6 million committed to?
Mr.
Goscicki responded I will have to review the financials in detail.
Ms.
Rowan stated you have debt service payments due at the end of this month for
our bond payments due on June 30th.
Mr.
Goscicki stated this is a difficult format to look at to fund capital
improvement programs off of. I spent an
hour with Ms. Kay Woodward last week going through these financials and asking
her to show me where the money is. You
start at fund equity of your unreserved funds and then determine what you
anticipate spending. Mr. Daryl Kissoon
is working with Ms. Woodward and Ms. Rower to put together a five year cashflow
analysis, which takes your total revenue, operating expenses and debt service and
throws in your bond payments or any cash for any capital projects you are doing
for the year and comes up with a total.
You either come up with a fund balance forward or a negative number. If you end up with a negative number, you
have to borrow money. We are trying to
put all of this into a one page spreadsheet, summarizing it down to something
readable. We did this for a number of
our other districts. Mr. Kissoon
provided me with a preliminary copy this morning but I did not like the
numbers. We are verifying the fund
balance forward for the beginning of this year.
Ms.
Rower stated I request Mr. Daly to work with us because of the fact the
financial information is generated here by Ms. Woodward but in order for us to
get this information, we need to work together.
Mr.
Fennell stated we need a flow of funds and use of funds type of report, which
is usually the third stage of any financial report. I like this balance sheet but we also need a
cashflow sheet.
Mr.
Goscicki stated we typically do this on an annual basis and make it part of
your budget process going forward. We
take the CIP and any debt service associated with it and roll it into
this. We will put additional tabs in
your budget so you are approving the capital budget for the upcoming year as
part of your budget process; know where the impacts are going to be, what you
are going to be paying out of your R&R funds and what is coming out of debt
service. It is an easy document to work
from.
Mr.
Fennell stated you need to provide us with a cashflow of funds every
month. This is going to be more
important to us than seeing an operating statement or balance sheet. The reason why it is more important is
because the operations will not change much and the balance sheet only shows
the assets.
Mr.
Goscicki stated the balance sheet is nothing more than an annual report on a
month to month basis. If you are a
finance person, you will like it.
Mr.
Fennell stated I want to see what we owe, what we pay every month and how it is
going to be covered.
Mr.
Rodriguez stated you have the capital improvement program in the evaluation
report, which shows the recommended spending.
Mr.
Fennell stated I currently have a project taking place and I want to know where
the money will come from to pay for it and when do I have to tell them to
stop. Can you provide this information
to us?
Mr.
Goscicki stated I was hoping to do it at this meeting. However, we still need to verify some of the
accounting information before I can provide it to you. We will be working tomorrow with Ms.
Woodward. This needs to be a priority
issue because we need to do this.
Ms.
Rower stated this is why I asked for direction from Mr. Daly.
Mr.
Fennell stated I do not think Mr. Daly will have any problem helping you. I want to see as well as the rest of the Board
a cashflow sheet every month showing what programs are taking place, how much
we have left to pay and what money can be used to pay for these programs.
Mr.
Goscicki stated I could not agree more because as your manager, you look to us
to figure out whether or not you have enough money to pay for these projects. I do not know and I want to be able to give
you those answers.
Mr.
Fennell stated I understand what you are saying but it looks like I have $6
million tied up somewhere, which I cannot use and cannot get a good return on. When can you get back to us? Obviously, we are going to get some money
from the rate increases. When do we have
to go out for the bonds?
Mr.
Goscicki responded we are moving as quickly as we can.
Mr.
Fennell asked if we have the rate hearing next month and are lucky enough to
get approval, can we vote on the rates?
Mr.
Goscicki responded yes.
Mr.
Fennell asked how soon could we have the bond money?
Mr.
Lyles responded we have a short-term financing that is going to be in the form
of a Bond Anticipation Note. This note
can be $7.5 million, which you can receive within 30 days.
Mr.
Fennell asked do you think this can still happen?
Mr.
Goscicki responded yes. We are planning
on a short-term finance. We need to get
the rate approval first because when you roll the short-term financing into the
long-term financing, it will result in a rate increase. You need to have the rate increase approved
first before taking out the short-term loan.
Mr.
Lyles stated we will go to a larger bond issue, which is going to require
validation. This will be a 60 day
process.
Mr.
Goscicki stated there will not be a time crunch because you will have working
capital with your Bond Anticipation Note or short term financing. It is functionally the same. It anticipates when you do your long term
funding, you will take the short-term note out.
Bond Counsel has been working with us on the appropriate
resolutions. This gives us time to work
through the long-term financing, get better numbers from the engineer,
structure the program and move it through.
Mr.
Fennell asked how soon will the long-term funding arrive?
Mr.
Goscicki responded I am hoping within 30 days.
Mr.
Fennell stated by June, you can have a whole new Board. I do not want to pass this on to a new Board.
Mr.
Hanks asked how can we speed this up?
Mr.
Goscicki responded by June, you will have already approved the rates and they
will be in effect. You already
authorized staff to move forward with the short-term financing.
Mr.
Lyles stated we need a bond resolution from Bond Counsel allowing me to file
the necessary proceedings in Circuit Court for validation of this larger bond
issue. This will occur after the rate
hearing next week and will be a 45 to 60 day process. There is no way to reduce it.
Mr.
Fennell asked is this for the $7 million?
Mr.
Lyles responded no, for the full amount.
Mr.
Fennell stated I assume we need money to cover current construction.
Mr.
Goscicki stated correct.
Mr.
Lyles stated the money is due no later than the week before your June meeting,
which is the election.
Mr.
Fennell asked who will be on the Board in June?
Mr.
Lyles responded it depends on how you want to structure it. The Special Act requires there an election in
June. Traditionally, it has been in
connection with the June Board meeting but it is not required. You can have your regularly scheduled June
meeting as a business meeting and schedule your landowners election, which is
separately noticed at a later time in June.
Mr.
Goscicki stated it can be at the end of the regular June meeting.
Mr.
Hanks asked is there a concern the way we schedule it will affect how we will
be able to meet our obligations?
Mr.
Lyles responded the short term money will be meeting your short-term needs.
Mr.
Hanks stated we would feel a lot better if we can move forward quickly on the
short-term funding. What do we need to
do to get everything in line for the short term funding in order to proceed as
quickly as possible?
Mr.
Lyles responded call a special meeting in two weeks.
Mr.
Hanks asked what will the topics for this meeting be?
Mr.
Lyles responded the public hearing on the rate study, bond resolution and
authorization to proceed with the long term funding process. Theoretically you can complete it by the end
of June before the election.
Mr.
Hanks asked when are our obligations due?
Mr.
Goscicki responded you are drawing against funds. We need to look at when we reach the point
where we have to tell the contractor to stop working until the funding is in
place.
Mr.
Hanks stated my preference is to structure this so we do not have to do that.
Mr.
McKune stated this should not be a problem.
Mr.
Fennell asked how quickly should we pursue this?
Mr.
Goscicki responded as quickly as possible.
It will be appropriate to schedule a special public hearing to address
the rate study and conduct the regular meeting afterwards to deal with any
resolutions we need to get into place in order to proceed with the long-term
financing.
Mr.
Fennell stated I am available the first Tuesday in May.
After further discussion, there was
consensus from the Board and staff to schedule the rate hearing for Wednesday,
May 2, 2007.
Mr.
Skehan stated I provided to the Board the projected rate adjustment to the
Board, which gives you each item on a percentage basis. For the current year, the increase is $5 per
month for the average user. In 2009, the
increase will be less than $6 per month.
In 2010, it will increase to $7 per month.
Mr.
Hanks asked has it increased over the prior year?
Mr.
Goscicki responded yes.
Ms.
Zich asked is this the total increase?
Mr.
Skehan responded yes.
Mr.
Green stated we slightly changed those percentages.
Mr.
Skehan stated this was the 14%, 14% and 14% as originally discussed. This projection gives you a look into the
future. If you are staying with the
Phase 1 component, the increase is less than $3. Keep in mind, the 2008 rate increase is
capturing what you have to do for your current operation and debt service. This is not for the capital improvement plan
at all. The capital improvement plan is
tied to an increase of $13 over a two year period.
Mr.
Goscicki stated this is good for the 5/2 meeting.
Mr.
Fennell stated we have a public relations firm and we need to explain this to
our constituents. We should send out a
PR release as well as an informational sheet to provide to the residents at the
next meeting explaining why we are doing this and what the benefits are.
Mr.
Goscicki stated I have a conference call meeting with Ron Sachs and will get
these items to you ASAP.
Mr.
Fennell stated you have sold the Board but we represent over 40,000 people and
need to relay to them this is the best thing to do. We need to get the word out to them and take
proactive measures.
Mr.
Daly asked do you want to explain anything to the city?
Mr.
Fennell responded we can but lets get the PR statement out first. We can put something out on our website. As soon as this gets out, you are going to receive
phone calls. Explain to them what we are
doing, why we are doing it and what the benefits will be. Everyone should have a copy of this PR
release.
Mr.
Goscicki stated we need to have this release before public notification goes
out.
Mr.
Lyles stated the proposed legislation modifying our Special Act cleared the
three committees with positive recommendations, most recently as last
Thursday. The next step is running this
by the House and the Senate. I am not
going to make a prediction but while we have a piece of legislation pending,
someone may say this Board is increasing rates substantially. It would be better if these two things were
not going on at the same time. I am not
cautioning you or telling you this is going to happen but I would be remiss if
I did not point this out, as remote as it might be.
Mr.
Fennell stated you are correct but I do not think there is anything we can
do. The Board’s responsibility is to
keep this going. We need to do what we
have to do. This is all the reason why
we need to have a clear statement of what we are doing and why we are doing
it. We should probably have a couple of
paragraphs about the current legislation and other things occurring in CSID.
Mr.
Hanks asked is there anyone we can call in the legislature to assist us?
Mr.
Lyles responded no. CSID has quite a
record. I do not think anything more
needs to be said. If a problem were to
arise, we could point to the lengthy discussions and input from the engineers
as to why this is appropriate and necessary.
This is as out in the open as it can possibly be.
Mr.
Skehan stated the work authorizations are tied into the work taking place in
the capital improvement plan.
Mr.
Fennell stated I do not wish to authorize any more money.
Mr.
Skehan stated this is tied into the short-term funding.
Mr.
Fennell stated I want to see the money in my pocket first.
Mr.
Skehan stated when the short-term funding is in place, we will come back to the
Board with these work authorizations.
This is the guidance I need.
FOURTH ORDER OF
BUSINESS Consideration
of Investment Banking Agreement with Prager, Sealy & Co.
Mr. Fennell asked do we need to
consider this agreement tonight?
Mr. Goscicki responded yes.
Mr. Fennell asked why are these the
best people to go with?
Mr. Goscicki responded they have the
history with the District. As we looked
into this and had discussions with Bond Counsel and District Counsel as well as
with SunTrust, the general consensus and my recommendation is we need their
history. The complexities of your
existing bonds, limitations and peculiarities of your enabling legislation in
terms of what you can and cannot do, we felt we were best serving the District,
particularly in the tight time frame we are dealing with. If we were moving in a more leisurely pace, I
would say “Let’s go out and solicit proposals”.
There are only two firms dealing with CDD bond issues; Prager, Sealy and
Bank of America. Our recommendation is
to stay with Prager, Sealy. They served
this District well in the last 30 years and bring their expertise to the table.
Mr. Hanks asked do we need to go out
for proposals?
Mr. Lyles responded no. This is a specialized consulting service,
which does not need to be bid and is not the subject of an RFQ process. It is not apparent from the agreement in your
agenda package the payment is contingent on the closing of the bonds. They have to do all of their work for you
satisfactorily before your obligation to pay arises.
Mr. Hanks asked do you have any
concerns with this firm?
Mr. Lyles responded no. I worked with them many times.
Mr. Fennell stated the cost of
issuance is $1.685 million, which is 3% of the total cost of the bond. Why is this a good deal?
Mr. Goscicki responded it is not a
great deal but it is the usual deal. If
we shop around, we might be able to pay less but this is the current rate.
Mr. Fennell asked what does this
agreement do?
Mr. Lyles responded it authorizes
Prager, Sealy to proceed as your Investment Banker with putting together the
bond financing program both short-term and long-term to accomplish the funding
of the program as described to you by your engineer and managers.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the Investment Banking Agreement with Prager, Sealy
& Co. was approved.
FIFTH ORDER OF
BUSINESS Consideration
of Resolution 2007-3 Issuing Tax-Exempt Bonds to Finance Improvements to the
Water and Sewer System
Mr. Goscicki stated Bond Counsel
recommended putting this resolution forward.
It recognizes the fact you are going to be spending monies on this
short-term financing, which is then going to be taken out by a long-term
financing. They wanted to get this
resolution on the record so the Board recognizes we are moving forward.
Mr. Hanks asked does the attorney
have any issues with this resolution?
Mr. Lyles responded no. Going into any significant detail on this
resolution will require Bond Counsel to be present. Everyone was in agreement this early step was
not necessary. This resolution declares
the Board’s intent to proceed with this program. Because of some of the restrictions in the
old bonds, predating my involvement in this District, there are strings
attached to being able to take funds out of certain accounts and putting them
into others. This is a step to make it
clear, we are intending to do this. I
recommend the Board adopt this resolution.
On MOTION by Mr. Hanks seconded by Ms. Zich
with all in favor Resolution 2007-3 Issuing Tax-Exempt Bonds to Finance
Improvements to the Water and Sewer System was adopted.
SEVENTH ORDER OF BUSINESS Discussion Items – June 18,
2007 Landowners Election
Mr.
Fennell stated each Board member received a sample copy of the landowners
proxy.
Mr.
Lyles stated we looked at the proxy form and made some suggestions, which Mr.
Daly incorporated and distributed. You
are not a Chapter 190 CDD but you are operating in a similar way. Some of the legislation we have pending
brings you more into line with Chapter 190.
It is not required by your Special Act; but is required in Chapter 190
on a proxy, where you indicate all requested information and in addition,
provide the street address, legal description of the property or the tax parcel
ID#. I request the Board add these lines
to the proxy. If the Board is in agreement,
we will modify the form.
On MOTION by Mr. Hanks seconded by Ms. Zich
with all in favor the proxy form for the landowners meeting scheduled for June
18, 2007 will be amended to reflect a line for the street address, legal
description of the property or the tax parcel ID.