MINUTES
OF MEETING
NORTH
SPRINGS IMPROVEMENT DISTRICT
A
meeting of the Board of Supervisors of the North Springs Improvement District
was held on
Present and constituting a quorum were:
Steve Mendelson President
David L. Gray Secretary
Vincent Moretti Assistant
Secretary
Also present were:
Edward Goscicki Interim
District Manager
Dennis Lyles Attorney
Jane Early Engineer
Doug Hyche Utilities
Director
John McKune Capital
Improvement Coordinator
Nick Schooley NSID
Brenda Schurz
Terri Lusk
Sean Skehan CH2M Hill
Mike Stokes
Marie Fergie
FIRST ORDER OF BUSINESS Roll Call
Mr.
Goscicki called the meeting to order and called the roll.
SECOND
ORDER OF BUSINESS Approval
of the Minutes of the December 5, 2007 Meeting
Mr. Goscicki stated each Board member received a copy of the
minutes of the
There
not being any,
On MOTION by Mr. Gray seconded by Mr. Mendelson with all in
favor the minutes of the
THIRD
ORDER OF BUSINESS Discussion
of
Mr.
Goscicki stated I want to give the Board an update in terms of where we are
with the construction activities in the area as well as where Tousa Homes is
at. As the Board knows from the last
meeting we have a contract with Florida Sewer and Water to undertake certain
improvements for the District within the area.
We have a funding agreement with Tousa/Engle Homes, which provides for
them to fund the construction as the invoices come in from Florida Sewer and
Water. At this point we have invoices
totaling an approximate amount of $1.2 Million from Florida Sewer and Water to
the District, which we have not paid.
We
have not paid them because, per our funding agreement with Tousa Homes, we
forward the invoices to Engle Homes as they come in. They have five days to forward us funds to
make the payments. We have not received
any funds from Tousa Homes since August or September. As discussed last month, we sent a demand
letter to Tousa Homes for this amount telling them they are in default of their
agreement. We received a corresponding
demand letter from Florida Water and Sewer.
At
the last Board meeting we heard Tousa Homes might still move forward with
construction. Their underwriter, GMAC,
may move forward with the construction and take a leadership role. At this point we are not hearing this
anymore. We have indirect
responses. Mr. Lyles, I do not know if
you had any direct conversations with them on this regard.
Mr.
Lyles stated I met with a representative of Tousa Homes about this
subject. I presented him, again, with
copies of the funding agreement; where we were and what we needed. This is on the financial end. He was not the president of Tousa Homes in
Ultimately,
the assessments you already levied against the property will provide a funding
vehicle when and if bonds are sold as well as when and if some kind of inner
financing is brought before the Board. We
are not recommending this today. We are
not bringing this to you today. I will
tell you in light of the continuing bad news coming from Tousa Homes end of
things; I contacted our bond counsel who represented us in previous bond
matters taken up in other divisions within NSID. I discussed with her the possibility of
interim financing.
We
are going to look at it as a way to go forward, but as of right now I cannot
report anything to you more positive than we already heard from the
manager. Tousa Homes does not look as if
they will have funds due to many obligations it has as an entity. It is possible they will do what other
corporate entities do, which is reorganization in a bankruptcy proceeding. This funding contract we have with them could
get tied up in this kind of proceeding for an extended period of time. I do not think we will recommend to you that
you wait and rely on that. The timing is
not going to be right for you and for your plans.
We
will attempt to find alternate sources for a portion of the work that has been
done. We will continue to negotiate with
Florida Water and Sewer. We will arrange
a schedule of payments. This is the
approach we will be recommending; however, I want to assure the Board none of
the recommendations you will hear from staff will involve going into other
general funds of NSID so residents outside of this community are ultimately
responsible for the infrastructure improvements benefiting the
Mr.
Goscicki stated the infrastructure we are talking about paying for is all
infrastructure, which will be owned and be part of the overall water, sewer and
drainage infrastructure of the District.
We are not building homes. We are
not building onsite improvements on individual lots. The infrastructure we are talking about is
for the District infrastructure as approved.
Mr.
Mendelson stated it will be ours eventually and we are going to have to manage
it anyhow. It is what it is, as long as
we are not paying an exuberant amount for something that is dead in the water.
Mr.
Gray stated they told us at the last meeting they were going to make a payment
in the next two weeks.
Mr.
Lyles stated that is correct.
Mr.
Gray stated it did not happen.
Mr.
Lyles stated the president of the corporation, for
Mr.
Gray asked when you say we will attempt to do partial funding, are you talking
about funding from bonds or where are you suggesting we get the funds?
Mr.
Goscicki responded we have existing revenue through capacity fees we collected
on the water and sewer system in other areas of the system. The approach we have taken is we have one
consolidated water and sewer system. The
intent for this area is as these properties are sold we will collect capacity
fees from these properties and it will be sufficient to cover the cost of this
infrastructure. We have a fund balance
in the water and sewer fund we can use to help mitigate this. We do not have the confidence we have this
fund balance within the general fund. As
your attorney pointed out we do not have a consolidated general fund except on
the drainage portion, but we cannot use funds we picked up for drainage in one
area in another development. It is not a
benefit, which accrues to the people who contributed those funds. On the general fund we have different issues
of how we will have to come up with money.
We might look at a short term financing line of credit. We are talking about $500,000 to $800,000. There are avenues we are approaching to help
get you interim financing to get this money in place in order to move forward
and clean up this issue.
Mr.
Moretti asked at what point do you think we will use the bonds?
Mr.
Goscicki responded the process is to stop dead in the water by the underwriters
for eight months now. We are looking at
the general market and where it is.
Where the market is today, we cannot sell a bond. Where Tousa Homes is today, we cannot sell
these bonds. Until a developer comes in
and resurrects the property where there is an indication homes will get built,
we will not be able to assess the properties.
Mr.
Lyles stated when we did these bonds there was a different owner of this
property and the developer. After the
bonds had been validated and the assessment proceedings had all been completed,
the property was sold to Tousa Homes as the developer, but the landowner is
GMAC. There is nothing wrong with GMAC
financially. They are not going anywhere
and they are going to continue owning the land.
Our expectation is they will either pursue their own resources to do
something with it or they will bring in another developer. It is not like we have nobody to look to.
Mr.
Gray stated Tousa Homes does not own the land.
They just signed the agreements for the development.
Mr.
Lyles stated they are the developer. As
the project would have evolved they would have taken down a group of lots that
do a component sale and taken down in phases.
GMAC is the land banker of this project.
Mr.
Gray asked is the current case that GMAC is the one who has the obligation?
Mr.
Lyles responded yes.
Ms.
Fergie stated I spoke with Ms. Ghita from GMAC today. She informed me Tousa Homes never provided
GMAC with any billing; therefore, they had no idea these invoices were
outstanding until I made a phone call.
They are still doing due diligence before they proceed any further on
this project. She could give me no
idea. Our contract does not state
anything about us getting paid based on any of this advanced funding. We give our invoice to the engineer, the
engineer presents it to the District and then within less than 30 days we were
paid. I am sitting out there with
invoices going back to August and September, which we are still waiting
on. GMAC has been notified now, but they
have no intention of paying anything. I
have a concern about where our liability lands with how we left the job
site. There is material onsite now. We were told to leave the job site by the
Tousa Homes representative.
Mr.
Goscicki stated your contract is not with Tousa Homes.
Ms.
Fergie stated we do have a contract with Tousa Homes.
Mr.
Goscicki stated you have a second contract with Tousa Homes. I just want to clarify for the record NSID
did not direct you to stop work.
Ms.
Fergie stated no. I never received a
stop order from NSID, but then again I am not getting paid by NSID.
Mr.
Goscicki stated my understanding from the last meeting is you stopped work due
to lack of payment.
Ms.
Fergie stated we were told by a Tousa Homes representative to finish up that
days work and to stop working. I have
materials onsite. I have sanitary
installed. We cannot protect it. When we do go back to finish the job it is
going to end up NSID, which I am sure is going to eventually charge whoever is
in charge of the stop, additional money.
I want the Board to be aware of this and we should not be leaving the
site in the condition it is in.
Mr.
Gray asked are you saying it is unsafe or are you concerned about damage to
what has already been installed?
Ms.
Fergie responded both.
Mr.
Mendelson asked what can we do as a Board?
Mr.
Goscicki responded we intend to sit down and continue negotiations with Florida
Sewer and Water on how to proceed with this.
We fully recognize everything you said.
What you heard us tell the Board is we recognize there will be no money
coming in the short term from Tousa Homes or GMAC and we will need to deal with
this issue. We intend to sit down, meet
with you and look at how we can mitigate this situation as best we can with the
available resources we have, recognizing we do not have sufficient resources to
cover this entire project at this time. There
is intent to work with you, try to mitigate the problems and move forward.
Mr.
Gray stated as far as liability goes we are not the landowner so I assume we do
not have any liability.
Ms.
Early stated even though the subdivision roads are not owned by the District,
the infrastructure piping is. I do not
know if there is a stub out or something sticking out that someone can trip on.
Mr.
Lyles stated we are hearing a great deal about ownership and liability. This is not something to make a matter of
record on. We do have a dispute. We have received a claim letter from the
contractor. There can be
litigation. We do not take possession
and title to these things until the projects are completed. It is not completed. While they are destined to be NSID pipes,
they are not now. The less we discuss
these kinds of issues in this public setting having told you we are continuing
to try to work with the contractor and trying to work out various ways of
getting partial payment now and full payment later. We are working actively on those things and
we will continue to do everything in the best interest of the District. The more we talk about this the more we are
opening up a can of worms, which will be difficult to put back together at some
later time. You heard input. Staff has told you where we are. I am not going to suggest you take any action
today of any kind other than to continue to press us to keep you apprised of
what is going on, as well as what the options are. We will do that.
FOURTH
ORDER OF BUSINESS Consideration
of Award of Contract for Coral Ridge Drive Forcemain Valve Replacement
Mr. Goscicki stated this is a ratification. I stepped outside my bounds a little because
we had a construction contract, which this Board approved us to go to bid on. Bids come in, which were underneath the
engineer’s estimate. We did not want to
hold up the award of this contract due to the Board’s schedule. This should have been on last month’s
agenda. I am not sure how we missed it,
but we did. This is essentially asking
the Board to ratify the award of this construction contract for valve
replacement. Ms. Early can describe the
specific project.
Ms.
Early stated I brought this up a few meetings ago. There were three forcemain valves on Coral
Ridge Drive needing to be changed out. We
wanted to quickly get this out to bid, but the meeting was canceled. We awarded the contract, but we need the
Board to ratify it.
On MOTION by Mr. Mendelson seconded by Mr. Gray with all in
favor the award of contract to Capitol Contracting in the amount of $74,619 for
the Coral Ridge Drive forcemain valve replacement was ratified.
FIFTH ORDER OF BUSINESS Consideration of
Permit Requests
A. Parkland
Village Commercial/Mixed Use – Surface Water Management System
Ms. Early stated this is a commercial piece within Parkland
Village. They are moving forward with
their project. This is a typical surface
water management permit request. We
reviewed it and recommend approval with our standard comments. There is no funding agreement associated with
this project.
Mr.
Gray asked is the road construction anticipated for Parkland Village necessary
to open up the parcel when we give it partial access?
Ms.
Early responded I do not think so because they are going to have access off of
Pine Island Road.
Mr.
Goscicki stated they are the same ones who own the condominium property to the
south.
Ms.
Early stated I do not know.
Mr.
Goscicki stated the point is we think there may be some opportunity for us to
talk with this developer offline.
Ms.
Early asked to see if they might want to help finish the road?
Mr.
Goscicki responded yes.
Mr.
Lyles stated it does not have anything to do with whether you approve or
disapprove this permit. It is part of
the whole picture.
On MOTION by Mr. Mendelson seconded Mr. Gray with all in
favor the Parkland Village Commercial/Mixed Use surface water management system
was approved.
B. Home Depot
– Drainage Permit
Ms. Early stated the next one is for the new proposed Home
Depot in Coral Springs. They required
revised plans and calculations. We
reviewed it and recommend approval.
On MOTION by Mr. Gray seconded by Mr. Mendelson with all in
favor the Home Depot drainage permit was approved.
C. Pine
Trails Park (Phase III) – Drainage Permit
Ms. Early stated this is a surface water management permit
for phase III of Pines Trails Park. This
is the City of Parkland park off of Pine Island Road and Trails End. This is a typical surface water management
permit. We recommend approval with our
special conditions.
Mr.
Mendelson asked have we discussed this before?
Ms.
Early responded this has come before the Board a few times.
Mr.
Schooley asked where is the drainage going?
Ms.
Early responded I know they have marked off lakes and they are connected under
Trails End.
Mr.
Schooley stated on all of these we get a $2,500 trash bond. There is no water involved and there is no
inspection for me to do. They hook up
the pipe, cover it over and there is nothing for me to see. Do you want to continue collecting the $2,500
trash bond and return it when they complete the work?
Ms.
Early responded it is a good idea. You
never know. They might drop something on
the right-of-way.
Mr.
Goscicki stated they may break a pipe.
They may do something. It is not
a bad practice.
Mr.
Schooley stated my problem is how to clear it.
How do I know there is a broken pipe there? We do not own the pipes. It is hard to go onsite and look for
something.
Mr.
Goscicki responded you and I need to discuss this offline on how we want to
handle this.
Mr.
Mendelson asked why?
Mr.
Goscicki responded I need to be prepared to talk to you guys. Is there another way to deal with this? How else might we do it procedurally? If we are not going to do it, who makes the
decision that we are not going to do it for this project, but we will for
another project? There are many
administerial issues we will need to work out to make sure we are treating all
of our customers equally.
Mr.
Mendelson stated the Board has established this fee as a policy. It is a fee the Board charges for all of
these. It is difficult to decide we are
not going to charge it in one particular case.
There is more to it.
On MOTION by Mr. Mendelson seconded by Mr. Gray with all in
favor the drainage permit for Pine Trails Park Phase III was approved.
D. University
Drive/Trails End Improvements – Right-of-Way Permit
Ms.
Early stated this is a right-of-way permit.
They are putting in some turn lanes off of University Drive and Trails
End. Our letters state the standard
conditions.
On MOTION by Mr. Gray seconded by Mr. Mendelson with all in
favor the right-of-way permit for University Drive and Trails End Improvements
were approved.
SIXTH
ORDER OF BUSINESS Consideration
of Approval of Standard Engineering Services Agreement
Mr.
Goscicki stated this is a more substantial issue. This is consideration of the Board’s approval
of a revised standard agreement for engineering services with CH2M Hill. One edit we need to make to this before the
Board takes action is this states this is an agreement between CH2M Hill and
the District. This is really an
amendment to their existing agreement.
We will need to get the verbiage changed before it is executed.
CH2M
Hill, through Gee & Jenson as their predecessor, has been the District
engineer for 30 years. We have been
operating under a standard engineering agreement. We recognize we need a better updated
agreement, which more succinctly defines roles, responsibilities, liabilities
and risk. We negotiated this agreement
with CH2M Hill. Your attorney has been
involved with the negotiation and review of these terms and conditions. CSID just approved the same agreement with
CH2M Hill for the same reasons.
This
agreement provides a framework for them to do additional work. Anytime they have work to do, they will come
in with work authorizations. They will
put in a dollar amount and a schedule to be approved by this Board. We would typically do
one work authorization at the beginning of each fiscal year for the general
services such as attending meetings and routine permit reviews. As we get into other activities such as consumptive
use permitting, design of pump station improvements and other capital projects
they will be done as separate work authorizations. This way we will provide one common framework
for doing this work.
The
work authorizations will either be approved under a lump sum basis or under an
hourly basis. If they are done on an
hourly basis, there is a fee schedule as part of the agreement. This fee schedule is approximately a 10%
increase over their existing fee schedule.
There existing fee schedule has been in effect for approximately three years
now. I looked at this in comparison with
other engineering rates and fees within the community. This is a competitive rate schedule. When you look at the high end rates, the
higher end salaries are people who are seldom used on a project. Most of the people involved are in the middle
band of the salaries you see.
We
will use this agreement going forward.
Any and all new work, as we have done in the past, will still come
before the Board for approval on a work authorization basis. The rate schedule for hourly rates will be
automatically adjusted on an annual basis based upon a CPI index. We agreed upon what the appropriate CPI index
will be.
Mr.
Mendelson asked do you have anything Mr. Lyles?
Mr.
Lyles stated as the manager said, we participated in the drafting of this
agreement. We reviewed it. It is similar to other engineering services
agreement for similarly sized districts with the same level of complexity. This is an amendment to an existing
agreement. You have a contract with CH2M
Hill to provide all of these services.
There is nothing new in terms of hiring CH2M Hill as evidence by this
document. It merely updates and
clarifies some of the language of the relationship you already have with them. As the manager explained there is the new rate
schedule and there is the annual CPI index.
On MOTION by Mr. Mendelson seconded by Mr. Gray with all in
favor the amendment to the standard engineering services agreement with CH2M
Hill was approved.
SEVENTH ORDER OF BUSINESS Staff Reports
A. Manager’s
Report
Mr. Goscicki stated there are two quick items, which are not
on the agenda. I wanted to let the Board
know Ms. Rabone, your recording secretary, is no longer with Severn Trent. Ms. Demarco, who was the former recording
secretary for the District, will be picking up those responsibilities. I will try to get her at the next meeting so
you can be introduced to her.
I
also wanted to let the Board know we had some correspondence over the last two
months from the Pelican Isles HOA. There
was concern about landscaping maintenance on the far side of the lake abutting
the Sawgrass Expressway. We received a
letter from the HOA asking us to maintain the property and have it cleaned out
because it is District property. We
responded to them by pointing out their HOA bylaws, which specifically require
they maintain the property. It
recognizes the property is owned by the District, but establishes through their
bylaws they are responsible for the maintenance of the area.
Mr.
Mendelson stated I was under the impression Cumber was supposed to maintain
it. Even though those homes were sold,
that piece of property was supposed to be maintained by Cumber.
Mr.
Goscicki stated it is written in the deed restrictions and covenants for the
community that the HOA is responsible for maintaining it. We have not received a follow up response to
our response, but we did let them know this was their responsibility and we
copied the section of their covenants stating this. We think this issue has gone away.
Another
issue raised by the same community has to do with concerns about erosion of
some of the lake banks by the properties.
Mr. Schooley has reviewed this.
The erosion is minor. The erosion
is all on our property and is not impacting any private property. We are structuring a response for the
property owners saying this is not a private property issue, it is within the
District, it is not impacting the District in any way and it is not impacting
their private property. We do not
consider it severe enough to warrant any actions.
Mr.
Mendelson asked is the property we are discussing on the west side of the big
lake, on the Sawgrass Expressway side?
Mr.
Goscicki responded no. It is on the east
side. It is on the homeowner side. In doing this we uncovered what looks like
some landscape structure retainment walls, which might have been built on NSID
property.
Ms.
Early stated I think they obtained a permit for that a long time ago.
Mr.
Goscicki stated this is private property.
Mr.
Mendelson stated this is the piece of property from the homes for that
lake. Did they get approval from the HOA
to do this?
Mr.
Goscicki responded we do not know.
Ms.
Early stated I doubt it, but I cannot confirm.
Mr.
Mendelson stated they have to deal with the HOA.
Mr.
Goscicki stated it is incumbent upon us to send them a letter as part of our
response saying we have seen these structures, they are within the right-of-way
as well as possibly the property of the District and they will need to get a permit
approved by us or if they have one, renew it.
Mr.
Mendelson stated I agree with you because a couple of years ago they made a big
fuss. You could not put a light switch
in. I never go back to the area, but you
are showing me something I do not think was approved by the HOA. Are we going to correspond with the HOA?
Mr.
Goscicki responded we are going to respond to the HOA who brought the issue of
erosion up to us. We will bring this
issue to their attention, but we will also send a separate letter voicing our
concern as well as their need for a permit.
Mr.
Gray stated they are on NSID property.
When you say a permit, do we allow a permit for someone to put this on
their property?
Mr.
Goscicki responded no.
Mr.
Gray asked then do they just need to remove it?
Mr.
Goscicki responded this is not an erosion issue.
Mr.
Schooley stated I would never go in back of the homes to use the
right-of-way. I do all of my work from
the boat.
Mr.
Goscicki stated that is not the point.
You cannot bring up these comments without bringing them up to me
first. We have property rights there we
have to protect. That is an obligation
of this District. We cannot have
individual property owners abrogating those rights and taking over property
this District owns. Regardless of
whether or not we are using it now or are going to use it three years from now,
it is still our property.
Mr.
Gray asked do we need to send them a notice saying they are not allowed to be
on our property?
Mr.
Goscicki responded I need to confirm it is our property and not just a right-of-way.
Mr.
Lyles stated what we typically do is say, “If you have received a permit from
NSID to erect this structure, please provide us with a copy. Our records do not indicate you have one.” They need permits from the city as well and
approval from the HOA. There are
multiple layers being ignored.
Mr.
Schooley stated you cannot see it in the picture, but there are boat docks
there.
Mr.
Mendelson asked there are boat docks there?
Mr.
Schooley responded yes sir. There are
boat docks throughout the District.
Mr.
Lyles stated you have a firm policy prohibiting this. You have to enforce the policy in an even
handed way.
Mr.
Mendelson asked does that come through NSID or Coral Springs Code Enforcement?
Mr.
Goscicki responded I believe we both have jurisdiction in that regard. We have jurisdiction in that it is our
property and they are essentially trespassing on our property. Coral Springs Code Enforcement has
jurisdiction in terms of them building structures without going through a
permitting process within the city, which will permit them to build certain
structures and make certain improvements without approval.
·
Report on Broward Working Water Solutions Conference
Mr.
Goscicki stated this conference was sponsored last month by the Broward County
Environmental Protection Department along with the county commission. They had participation by the Regional
Planning Council, SFWMD and a broad spectrum of panelists from academia,
political through technical. I attended
on your behalf because I was concerned about what the direction of permitting
was by SFWMD. I apologized to Mr. Skehan
today at a staff meeting and I want to apologize publicly. Mr. Skehan brought this to my attention
months ago saying the direction water management has gone at is they have
established a rule saying the water you used in April of 2006 is all the water
they are going to permit you to use going forward. This is regardless of what you had
permitted. If you have seven MGDs
permitted, but you only used three, going forward they will only allow us to
use three.
My
reaction is this is absurd. How can they
come back and say they gave us a permit in the past for seven MGDs, we as a
District relied on the permit and now they are going to tell us we can only
have three MGDs. That is what the rule
says. What flabbergasted me was the
strong support at the county commission level, at the Regional Planning Council
level and by the majority of participants in this forum. The underlying issue is SFWMD is now years
behind in implementing the Everglades Restoration Program. The Everglades Restoration Program was designed
to be a platform and the analysis platform as well as the tool to be used to
figure out how we allocate water between the municipal use, the Everglades, the
farmers and other environmental uses.
They do not have an answer yet.
They do not have solutions in place yet.
At
a certain point the Water Management District had to say they need a policy on
how they are going to permit water consumptive use going forward for municipal
use. They are making a policy saying as
of April 2006, what you get is all you get.
There is no science to support it.
There is no model to support it, but it is the policy out there. I asked them, “How do you implement
this? How do you get one community that
has water to work with the community next door that does not?” There only answer was they need to begin
combining cities.
The
impact to this District is potentially significant. We have a seven MGD water treatment plant, seven
to ten MGDs of well fueled capacity based on a seven MGD consumptive use permit
and going forward we may not be able to get more than 3.5 MGDs. To meet additional obligations we will be
forced to find alternative water.
Alternative water can be reclaimed waste water you use for irrigation to
mitigate your consumptive use for potable uses.
It can be desalinization. The
most likely and simplest alternative is to go down deeper to the Florida Aquifer
and pull your water out of there. The
impact to us again is we have a seven MGD treatment plant and we may have to
replace half of it because of this permitting issue.
Yesterday
we submitted our consumptive use permit application for renewal of our permit. We requested our full allocation of seven
MGDs from the Biscayne Aquifer. We
started the process with the Water Management District and expect them to come
back saying they will only give us what we used in April of 2006 going
forward. I want to make you aware this
is the situation. This is not going to
be a short process to go through to get this permitted and resolved. I am absolutely amazed that every utility in
Broward County has not screamed bloody murder, taken it to their Board and
lobbied the State Legislature to fire all of the Water Management District
personnel, but this has not happened.
As
we told one other District, this ship has sailed. This is a rule they approved and we are now
living under it. It can have a
potentially serious financial impact on the water and sewer fund. There is grant money available from the Water
Management District to help mitigate this.
We will be working with our engineers who are taking a lead on the
permitting process, but it has a potentially significant down side in terms of
the water and sewer rates. The worst
case scenario is we will need to get $20 Million worth of bonds to build
additional water treatment plant capacity and bump your consumers’ rates
significantly to pay for it. That is the
bad news.
Mr.
Mendelson asked what is the good part of this?
Mr.
Goscicki responded the good part is you wind up with a brand new reverse osmosis
treatment plant, which will give you better water quality and meet some other
criteria. There is not a great deal of
positive news on this. We are going to
push this as hard as we can to represent the District and make sure we push
this envelope to see what we can get to maximize our current investment. The mitigating circumstances we have is we
have infrastructure in the ground and we built the infrastructure based upon
the current permits from the Water Management District. You are not alone. The Cities of Hallandale, Sunrise and Miramar
are in similar situations right now.
They are facing similar challenges.
·
SBA Account Status
Mr.
Goscicki stated we told the Board at the last meeting we have $18 Million of
District funds deposited within the SBA account. Back in early to mid December there was a run
on the account by a number of governmental entities within the state. The SBA froze the account and said we could
not take money out. They did that for a
period of a couple of days as they went in to reassess where they were and what
they have. The challenge they have is a
portion of the funds they invested on all of our behalves, which is
approximately 13% to 14%, are invested in products dealing with sub-prime mortgages. When wind of that got out people started
pulling their money out. This is why
they froze it.
The
SBA came back with a set of rules as to how you can get your money out. They set up two funds; an A Fund and a B
Fund. The A Fund is 86% of the total
amount in there. It is all backed by AAA
rated investments. It is secure and they
do not think it is a problem. The other
14% is problematic and they are not going to allow us to touch the 14%. Of our $18 Million, they are not allowing us
to pull 14% of it. Further compounding
it, the remaining 86% of our funds has restrictions on it. They said we can take out up to 15% of the
money or $2 Million, whichever is greater, on any of the individual funds we
have invested. We immediately pulled as
much money as we could. This was
approximately $2.9 Million because we have the $18 Million spread over five or
six different funds. If we want to touch
the remaining funds, there is a 2% penalty fee to take our money out.
A
great deal of this money is there to reimburse WCI Communities for their
advance funding agreements on other utility infrastructure they put in on other
projects. Other funds were funds we were
looking to use to fund ongoing capital improvements. We had a stormwater pump station project we
were getting ready to put out for bids.
We have pulled that off the shelf until we can resolve how much money we
have in the general fund to be able to pay for these kinds of
improvements. We are moving forward with
some designs with CH2M Hill for water treatment plant improvements, but
obviously we will not move forward with any construction until we can get some
resolution.
The
good news on this, compared to other governmental entities who had operating
funds in those accounts, is all of the funds we have in those accounts are
essentially capital funds or are related to funding agreements and reserved
funds put aside for capital. It is
impacting our ability to move forward on capital improvements, but we are not
short on how we will cover payroll next month, which some governmental entities
were faced with. We are continuing to
track this diligently to see where we are.
Ms. Lusk, do you have any further updates?
Ms.
Lusk responded we checked the website yesterday and there was still no news.
Mr.
Goscicki stated the reason why we pulled $2.9 Million out immediately, even
though they were saying these were safe investments, is our concern that they
can change the rules again. We took out
everything we could and placed it in an interest bearing account. We are looking at other long term investment
strategies for this District for the balance of funds when we can withdraw them
without penalty or if we get to the point where we need to take them out with
penalty, we will have alternative investment strategies. There is no action required by the Board on
this. I wanted to make sure you were all
up to speed on this. It is a significant
issue. It is a huge issue for some other
governmental entities who have over $100 Million such as the School Board who
runs the state in particular. They
invested in the SBA. The astounding
thing to me on this, almost as astounding as the Water Management District
permitting rules, is this was the safe haven for local governments. This was where you put your money so you did
not have to go out and hire an investment manager to manage your
investments. Here was the tool for you
to do it where the state was managing your investments in a conservative fiscal
perspective by a state organization.
They were not as conservative as they implied they would be.
B. Attorney’s
Report – Status of Special District Bill
Mr. Lyles stated I briefed you last month on the pending
special legislation proposed by Senator Ring that would have the Broward County
Study Commission to review the status, operations, finances and every other
angle of special districts, including this one, in Broward County. At the final public hearing, in the face of
many objections from various districts and people interested in the districts,
Senator Ring withdrew the bill. There
will be no further attempt to put special districts out of business in Broward
County or have them face an inquisition trying to justify their existence. At least for this year. It is something, which comes up from time to
time. I suspect we will hear about it
again, but for now the bill which would have affected 92 different special
districts in Broward County alone has been withdrawn. We will not have to go through the time
consuming and potentially expensive process.
C. Engineer’s Report
There
being no report, the next item followed.
EIGHTH ORDER OF BUSINESS Approval of October
Check Registers
Mr. Goscicki stated you will note we did not include the 20
page financial report this month. We
gave it to you last month because we wanted to show you we are doing detailed
financials. What we are working on now,
and Ms. Lusk as well as Mr. Bloom are taking the lead on this, is coming up
with a meaningful, simplified report, which adds value to the Board members in
terms of being able to look at the financials rather than giving you 20 pages
of detail. We are working on it and it
will probably not be ready for the next Board meeting, but it will likely be
ready for the meeting after that. If the
Board at any time wants to see current financials, you know the details are
available for you. We did include the
check register.
On MOTION by Mr. Gray seconded by Mr. Mendelson with all in
favor the October check register was approved.
NINTH
ORDER OF BUSINESS Supervisors’
Requests and Audience Comments
There not being any, the next item followed.
TENTH ORDER OF BUSINESS Adjournment
There being no further business,
On MOTION by Mr. Mendelson seconded by Mr. Gray with all in
favor the meeting was adjourned.
David
Gray Steve
Mendelson
Secretary President