MINUTES
OF MEETING
NORTH
SPRINGS IMPROVEMENT DISTRICT
The
regular meeting of the Board of Supervisors of the North Springs Improvement
District was held on
Present and constituting a quorum were:
Salvatore J. Mendolia President
Steve Mendelson Secretary
Also present were:
Ed Goscicki Interim Manager -
Dennis Lyles Attorney
Jane Early Engineer
Pam Rower
Brian Shields
Jason Jerolick WCI
Communities
Glen Hanks CSID Board Member
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 April 12, 2007 Meeting
Mr.
Goscicki stated each Board member received a copy of the minutes of the
There
not being any,
On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all
in favor the minutes of the
THIRD
ORDER OF BUSINESS Consideration
of Change Orders
A. No.
1 –
Mr. Goscicki stated this change order was tabled from the
last meeting and we are requesting you defer this item again until we resolve
some issues regarding the financing on this project.
Mr.
Mendolia stated I cannot see us paying $58,000 for the tennis courts. My feeling is whomever is doing the job
should take this into consideration. It
is a great deal of money. I want us to
look at where the money is coming from.
B. No.
2 & Final –
Mr.
Goscicki stated this change order is for a net decrease of $276,878.81.
Ms.
Early stated this job was originally bid through the District. The low bidder decided he did not want to do
the job. We had some questions about the
second bidder. WCI came in afterwards to
negotiate the bid of the third bidder, which was Florida Sewer & Water;
with the understanding the water and sewer portion will not exceed the low
bid. They negotiated the water and sewer
portion to exactly what the low bid was.
This is a WCI contract; not a NSID contract and they will be reimbursed
at some point through an Acquisition Agreement for the water and sewer portion. I just wanted to update the Board that this
is final and was an actual decrease to the contract.
FOURTH ORDER OF BUSINESS Consideration
of Work Authorization No. 174 for
Ms.
Early stated this is for the portion of
Mr.
Mendolia asked is there any additional money from what was proposed?
Ms.
Early responded this is just for the re-design of the road. We have not bid it yet and there is no
contract. We wanted to revise the plans
so it would meet future requirements.
Mr.
Mendolia asked do we have money for the original road?
Ms.
Early responded yes.
Mr.
Mendolia asked can we recover money from the original road?
Ms.
Early responded we never built the original road. We re-designed it. Now we have to change it so we can re-permit
it through
Mr.
Mendelson asked is the amount of the construction the same?
Ms.
Early responded we put the construction fee in there. Hopefully it will come in at the same amount.
Mr.
Goscicki stated at this point, I do not think we are concerned about the
overall balance of the bond issue. It
anticipated designing and constructing this road. What the CDD Engineer is bringing to you now
is a work authorization to design the remainder of the road and re-design the
one small portion of the road already designed up to the new standards they are
getting from the county in anticipation of what is going to be required. When the road design is complete and we need
to look at the cost estimate, we will have to make sure we have sufficient
funds before proceeding with the construction.
On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all
in favor Work Authorization 174 for County Line Road Modifications in the
amount of $36,000 was approved.
FIFTH
ORDER OF BUSINESS Discussion
of Refinancing Options for Heron Bay Commons Debt
Mr. Goscicki stated we continue to work on this issue. In fact, I met with Bond Counsel this
afternoon to work through some of the issues.
I will contact Bond Counsel from the original bond to get some
opinions. The concerns we have revolve
around the tax exempt financing of the original bonds and how this plays into
any refinancing to make sure we do not do anything to jeopardize this
status. We are continuing to work on
this issue and will report back on any progress at the next meeting. There is no requirement to do this. We looked at this as a potential refinancing
like your mortgage. There is an
opportunity to get us some lower rates.
No action is required by the Board.
SIXTH ORDER OF BUSINESS Staff Reports
A. Manager’s
Report
i. Discussion of Broward/Palm Beach Annexation and
Service Area Considerations
Mr. Goscicki stated in the audience with us tonight is Mr.
Brian Shields from Palm Beach County Utilities.
Mr. Shields and I and the Palm Beach County Utilities Director met a
couple of months ago in anticipation of this annexation moving forward. We looked at some options at
Mr.
Mendolia stated it is in progress.
Mr.
Shields stated we were approached by the Parkland Utilities and asked if we
were interested in this because it is our service territory. We are built capacity to service this area. They obviously do not have the capacity to
serve 2,800 units and 10,000 feet of commercial space, which is what was
ultimately proposed on the triangle.
When they approached us and said “It would be much more expensive for us
to serve this area, would you consider bulking this water and bulking
wastewater services”. Obviously we said
yes. We provided them with our standard
cost agreement. We offer many
municipalities, entities and Special Districts our standard bulk rates for
water service, which includes capacity charges, commodity rates and the cost of
pipeline. In this case, we need to
extend a pipeline across the
At
a
Mr.
Mendolia stated I have no objection.
Mr.
Goscicki stated we will continue staying in touch with the City of
Mr.
Shields stated we built the capacity and can provide much more competitive bulk
rates than you trying to build your own capacity. The county will force you to use the Florida
Aquifer and use reverse osmosis. We
already have this in place. This is
something the District will not have to invest in.
ii. Distribution of Proposed Budget for Fiscal Year
2008 and Consideration of Resolution 2007-3 Approving the Budget and Setting
the Public Hearing
Mr. Goscicki stated I have copies of the proposed budget and
will provide them to the Board and staff but will ask the Board not to take any
action at this time. Normally, we ask
you to adopt the resolution for the purpose of setting the public hearing. However, I received this budget two hours
before the meeting and have not had a chance to review it. We have issues in terms of some of the
capital improvements, which are not reflected in this budget. Fortunately, this District does not have the
time constraints that other CDD’s have where you are required to have a 60 day
period between the time you approve the budget to the time you adopt the
budget. At this time, I will provide the
budget to the Board for review but hold off on adopting the resolution until
the next meeting.
iii. Consideration of Resolution
2007-4 Designating Signatories
Mr. Goscicki stated this item is administerial in
nature. The purpose of Resolution 2007-4
is to Ms. Rower and me as authorized signatories for your financial
transactions. We have not changed the
names from Mr. Petty. This reflects the
fact we have changes with our management team within ST and get our names as
authorized signatories.
Mr.
Mendolia asked do they have to be ST employees?
Can it be someone from the District?
Mr.
Lyles responded it can be someone from the District but you have former ST
employees as your authorized signatories and those need to be replaced with
current ST employees under your management contract. Having an authorized signatory who is also an
employee of the District is certainly acceptable.
Mr.
Mendolia stated I think it should be.
Mr.
Lyles asked do you want to propose a third individual?
Mr.
Goscicki responded we can certainly add one of the Board members.
Mr.
Mendolia stated I want an employee of NSID.
Mr.
Goscicki stated the District does not have anyone serving as a District employee
in a senior management position. I can
see where you might want to have a Board member as an authorized
signatory. You only have operating staff
at your Water Treatment Plant as District employees. For example, Mr. Doug Hyche is not an NSID
employee. He is a CSID employee. I do not feel it would be appropriate to have
a CSID employee as an authorized signatory.
We can let this go for now but we should think about it. We should have some checks and balances. I appreciate that. We have a number of Boards where we have
Board members as additional signatories.
Mr.
Mendelson stated I think it is a good idea to have a District employee as a
signatory to provide checks and balances.
Mr.
Goscicki stated you are required to perform an outside audit every year. Not every organization is required to do
this. They provide your checks and
balances by coming in and literally go through everything done for the year to
make sure there are no improprieties or inappropriateness in the way we conduct
business.
Ms.
Rower stated in regards to this resolution, we are talking about the
individuals who have the signature authority.
We have procedures in place where Mr. Hyche reviews invoices and
requisitions and warrants. The Board
approves the checks provided in the agenda package to make sure they are okay
to pay. This actually pertains to the
signature and getting the checks out to the A/P process. There are many procedures in place such as
field operations reviewing your invoices and the Board reviewing the check
registers.
Mr.
Goscicki stated excellent point. When we
are signing off on work authorizations, I will not sign off on a construction
contract until the engineer has signed off on it. Then I will sign off on it and it goes to our
Finance Department to make sure we have enough funds to cover it. In terms of authorizing payments and creating
an audit trail, we have multiple levels of review looking at whether the money
is there and it is appropriate to pay.
The purpose of this resolution is the bank needs a signature when they
cut a check. The banks usually only
require one signature but we like to have two signatories. Their name is usually on the check.
On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all
in favor Resolution 2007-4 Designating Ms. Rower and Mr. Goscicki as
Signatories was adopted.
iv. Consideration of Engagement Letters with
Berger, Toombs, Elam, Gaines & Frank to Perform the Financial Audit for
Fiscal Year Ending September 30, 2006 & September 30, 2007
Mr.
Goscicki stated the current audit firm is presenting to the Board their
engagement letter for fiscal year 2006 and 2007. The fee is the same fee as last year with a
3% increase for cost of living. They do
an extensive audit as this is a complex District financially. There are six different funds within the
General Fund as well as the Water and Sewer Fund. Their work effort is significant compared to
other districts having only one fund.
Mr.
Lyles stated as the manager explained, you have large assessment areas and
funding going with them. It is a
complicated District financially. You
are required to have this audit performed by independent Auditors so you will
know exactly how the money is being handled, make sure everything is in
compliance with applicable accounting standards of state law. I reviewed the engagement letters and I do
not have anything to say about the cost of living increase. The form of the agreement is in order and
similar to other engagement letters I have seen.
On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all
in favor the Engagement
Letters with Berger, Toombs, Elam, Gaines & Frank to perform the financial
audit for fiscal year ending September 30, 2006 & September 30, 2007 were
approved.
B. Attorney’s
Report
Mr.
Lyles stated our bill has passed the full House and Senate. It has been sent to the Governor for
signature. I already had a couple of
inquiries from the Governor’s office regarding details and background
information, which we responded to. Mr.
Mendolia submitted a letter requesting the Governor to consider the bill and
sign it into law. We should hear any day
now. We are staying on top of this.
C. Engineer’s Report – Continuation of Discussion
of Request from WCI and NSID to Take Over Maintenance of Medians on University
Drive & Trails End
Mr.
Goscicki stated I met with the City of Parkland City Manager and their staff
along with representatives of WCI Communities and CH2M-Hill a week and a half
ago. It was not a very successful
meeting. WCI Communities is working with
a couple of HOA’s in an attempt to identify additional sections of these roads
that might be taken over by the HOA for the maintenance of the median. We identified areas that WCI is not doing any
building on and has no control versus other developers out there doing the
work. The city agreed they will contact
those builders and try to move this agenda forward. We made a little progress and identified
where we agreed to work and areas where we agreed to disagree. We are continuing to move forward and work
through this issue. WCI has taken the
lead on trying to move this agenda item forward. It is a challenging situation. I think the city is concerned about potential
rollbacks, property taxes and where they will fund it. When we point out if the District has to do
it, the same residents will be paying the same costs. However, at this time they have not yet
accepted the roads.
Mr.
Mendolia stated you know my feeling on this.
A water company should not be involved at all. In all my years of building, when you
dedicate a road, it goes to the county or city and they maintain it. It is that simple. The other factor here is WCI Communities. Maybe they can do something since they are
still building. The water company is too
involved.
Mr.
Goscicki stated we understand and will relay this opinion to them. The District should tell the city they are
changing the rules after the fact. If
the City of Parkland wanted someone else other than them to maintain the
medians, there was ample opportunity before those roads were built to make this
known and get it into the process. Now
we are in a situation where the roads are build and the medians are landscaped
and as part of the takeover of those roads, now we are discussing, maintaining
those medians. We are continuing those
discussions. We made some progress but
not as much as I hoped.
SEVENTH
ORDER OF BUSINESS Approval
of Requisitions and Invoices
On MOTION by Mr. Mendolia seconded by Mr. Mendelson with all
in favor the check registers for the month of April for the General Fund in the
amount of $973,728.64, Heron Bay in the amount of $138,245.10, Parkland Isles
in the amount of $16,543.36 and the Water & Sewer Fund in the amount of
$1,492,188.40 were approved.
EIGHTH
ORDER OF BUSINESS Supervisor’s
Requests and Audience Comments
Ms.
Kate Gray stated I am here in regards to the tennis courts for the
Commons. Two representatives from WCI
Communities were planning on giving money towards these courts. However, in the months following this pledge,
their support has been withdrawn. The
cost of the tennis courts is supposedly $746,000 and $50,000 to $75,000 for the
de-mucking. This will be a considerable
amount of money if we do not have the money in our funds already to pay. I was wondering how much money would be added
to our tax bill in order to have these four tennis courts and how fair is it to
the 3,100 homeowners who will be billed for this facility, when only 60 people
use this facility. I heard about how
great this will be to WCI Communities and their selling process. This is true but the Commons is owned by NSID
and not WCI Communities. We want to
protect the taxpayers. I would love to
have four more tennis courts. There are
people here who are not willing to pay for them. I am wondering whether we are going to get
$300,000 from WCI to help us to pay for these courts.
Mr.
Mendelson stated this is a WCI project.
If a certain group is using the courts and you are all in one
development, why would it be unreasonable to re-assess everyone to have them
pay for a facility they are going to use?
Ms.
Gray responded the reason we need them is because we have 60 ladies in a league
and they are taking up court time to where there are not enough courts for the
casual user. Apart from these 60 ladies,
there are 3,100 homes and all homes will be assessed to pay for this
project. When this project was
authorized, it was because WCI was going to be giving us half of the
money. It seems to me once this went
forward with the idea we were going to get the four courts, then WCI had
financial problems and this money is not earmarked for us and not going to be
given to us.
Mr.
Mendelson asked does this need to be discussed with WCI Communities?
Mr.
Mendolia responded in a case like this WCI Communities should be involved.
Mr.
Goscicki stated there is currently no funding anticipated from WCI Communities
and they have made no commitment to this Board to fund this project.
Mr.
Jerolick stated I work in the Property Management Department. I represent the residents of the Heron Bay
Community Association. My understanding
is the decision to build the four courts was a decision brought through the
District and not part of WCI Communities.
It was not an issue of whether WCI Communities was paying for it as it
was on District property. This is news
to me. I thought this was an impetus
through the District coming up through past minutes and the construction of the
tennis courts. I was not privy to any of
this but it does not mean it is factious.
I am here more as an observator to see how it came about that there were
going to be four tennis courts and how we got to where we are at now.
Mr.
Goscicki stated it reached the point now where we have concerns about the
financial viability of moving forward with these and the impact it is going to
have on the budgets. This is one reason
we pulled the budget back and said, “We need to run these numbers and see if
this is going to impact the assessments”.
If it is, we need to provide public notification as part of the
assessment process. This is a fairly
public process, which we are required to do by law. It has not happened yet. This project is sitting on hold. I have not seen any activity.
Ms.
Gray asked is there any way you could look through the former District
manager’s notes to see about this? In
speaking with Mr. Petty, we were supposed to be getting 50% of the cost from
WCI.
Mr.
Goscicki responded quite honestly, past notes regarding a conversation Mr.
Petty may or may not had with WCI, does not mean anything. We spoke with WCI about this issue and as of
this point in time; they are not planning on contributing.
Ms.
Gray asked who suggested the four tennis courts?
Mr.
Mendolia responded they me with us and said, “I know you had tremendous
problems with the tennis courts and are trying to reduce the problem by adding
four additional tennis courts. We
checked and found out there was supposed to be some funds available. There is no money. This is why we pulled this change order. We are trying to get the money.
Ms.
Gray asked were there additional surplus monies?
Mr.
Goscicki responded there were some additional bond revenues for construction of
the original facilities and remaining dollars in those bond revenues, which
were available to use for this type of construction. From what we have been able to ascertain, the
thinking was there might be sufficient revenues available to do this project
without increasing the assessments.
However, based upon my review, we do not think this is true and this is
why we suspended construction until we can verify where the dollars are, how
much money we have and whether there will be an impact on assessments. If there will be an impact on assessments,
then there needs to be community input and make a decision as far as the budget
process.
Ms.
Gray asked have we received all of our monies owed to us from WCI for
management of the money?
Mr.
Goscicki responded I cannot speak to this at this time.
Ms.
Gray stated these are funds we may be able to use.
Mr.
Lyles stated I believe all owed monies were paid by WCI.
Ms.
Gray asked what was the total amount?
Mr.
Lyles responded a year ago, their records were audited by District staff who
confirmed $45,000.
Ms.
Gray stated in the newspaper it stated $40,000.
They anticipated they were going to be more.
Mr.
Goscicki stated this occurred almost two years ago. There was an audit done and a Settlement
Agreement between the District and WCI saying, "We are now satisfied this
is as much review as we need to do”. This
is my recollection.
Mr.
Lyles stated the settlement was WCI Communities was required to pay every penny
we could identify, which the District was legitimately entitled to. We did not compromise or reduce this number.
Ms.
Gray asked has our $40,000 been paid back?
Mr.
Lyles responded yes.
Mr.
Goscicki stated the settlement was we agreed not to go forward with additional
auditing. We felt we had done enough and
had a good understanding of the numbers.
Ms.
Kathy Marinelli asked are we planning to renovate the Clubhouse because there
is a great deal of money in renovations?
I would like to have the opportunity to say whether I want the tennis
courts or the clubhouse renovated. I did
not think it was necessary because it was fine before.
Mr.
Mendolia stated originally there were plans to renovate the Clubhouse due to
hurricane damage.
Ms.
Martinelli asked is there insurance for hurricane damages?
Mr.
Mendolia responded yes.
Ms.
Martinelli stated I am hearing there will have to be $500,000 in renovations.
Ms.
Early stated the insurance reimbursement was $200,000 minus the $50,000
deductible. The pool had to be
diamond-brighted. We had our Architect
go through the entire club and provide a list of recommendations.
Ms.
Martinelli stated in the future, there should be opinions from the residents on
where our money goes.
Mr.
Goscicki stated you are in absolutely the right forum. The procedures is discussion with the Board,
the Board making decisions as far as the budget process on what their goals and
objections will be for the District for the next year. There is a public hearing on the budget every
year. It is advertised yearly in the
newspaper during the July timeframe.
Ms.
Martinelli stated in past budgets we had reserves. Were these reserved used in the renovations
or earmarked for something else? There
is no line item for reserves for this year or next year. Where did the reserves go and what are we
going to do in the future as far as renovations?
Mr.
Goscicki responded it is important for the community to understand the
difference between NSID and the HOA.
NSID has an agreement with the HOA for management of the facility. As part of their management, they establish
the budget. The details are within the
HOA structure.
Ms.
Martinelli asked why are we hiring WCI Communities to manage this
facility? They should report to the
Master Association. Should they manage
under your direction and not have to report to the Master Association? The Master Association should not make decisions
on what happens with an NSID facility.
Mr.
Lyles responded that is not how it is set up.
This is one feasible structure but taking a step back, this Improvement
District does infrastructure financing.
We are here to run the infrastructure program, do the financing, put the
water and sewer lines into the ground, build roads and build the recreation
facility from bonds. We typically do not
get involved in the day-to-day management, with the exception of utility
plants. We run a water system because
this is what we are in the business to do.
We are not a recreation district or property management company. With the long-term goal of having the owners
control their own fate, we entered into an agreement with the POA giving them
the power on behalf of the District to manage the month in and month out
operations, prepare the budgets, hire the employees and maintain the tennis
courts and the Commons. They do this
through an agreement with the District.
If
at any time, they are not doing their job appropriately to make this facility
the best it can be and are not satisfying the Board and management staff; we
can step in and terminate the agreement.
We went through a period of review, amendments and modifications to the
Management Agreement; stepped in and renegotiated some of the terms and entered
into a new agreement last September. As
a Special Improvement District of the State of Florida, we do not typically get
involved in the day-to-day operation of the facilities.
Ms.
Martinelli stated if WCI had not been re-hired and you hired a management
company, they would not report to another association. The Master Association has a vested
interest. They do not want trainers at
the new facility. They want them to stay
at the Commons, which they have been at for the past five to six years and pay
10% to the Commons for usage. When they
go to the new facility, they will be paying 30% back to WCI. The residents want to keep their instructors
where they currently are versus being sent elsewhere.
Ms.
Gray stated I refer to this as a recreation facility and now I am hearing it
called a tennis facility. This is our
recreation facility and what we bought into.
We enjoy it.
Ms.
Martinelli stated it has been remodeled.
Ms.
Gray stated I am hearing this facility referred to as a tennis facility. I did not buy into a tennis facility. This bothers me.
Mr.
Jerolick stated there are a few mis-representations. I am hearing many of these issues for the
first time.
Mr.
Goscicki stated if there are concerns from the community about the management
of the facilities, let’s schedule a meeting with the Property Manager and
representation from the community to go through these issues. As was pointed out, this is not an issue for
the Board to talk about the day-to-day management. If there are continual problems in the
management of the facility, we need to revisit our contract but the issues you
are raising needs to brought to the HOA’s attention. I would be happy to participate at that
meeting to make sure the message is getting back to the Board.
Ms.
Martinelli stated I came here to find out where the money went for the tennis
courts.
Mr.
Goscicki stated I do not think the money went away. When I became involved and we started looking
at the financials, my main concern was there were not sufficient funds. We went through a detailed review of the
financials. The plan was to go out and
do additional borrowing to make this happen.
A short term borrowing was being anticipated for this District by the
previous manager. This was always the
plan. The concern was when we looked at
the short term borrowing; we realized this will have an impact on the
assessments. It was always anticipated
we would have to borrow some money to complete this project but when we looked
at what it will do to the assessments, we wondered if this would fit within the
existing assessments. If we cannot fit
it, it will trigger a notification procedure.
Our concern is to make sure we do this in the Sunshine and not do things
behind closed doors. This is a
governmental entity and we were concerned if we did not slow this project down
or suspend it, we would be getting ourselves into trouble.
Ms.
Martinelli asked are we getting tennis courts or not?
Mr.
Goscicki responded currently it is in limbo.
Mr.
Mendolia stated there is no money. If
there was money you would have them.
Ms.
Martinelli asked what is it going to take?
Mr.
Goscicki responded we are currently doing a financial analysis, which will be
incorporated into the budget. If this
means there needs to be an increase in assessments, we will go through the
public hearing to get it approved. You
are looking at a couple of months from now to go through this process.
Ms.
Martinelli stated Mr. Petty was supposed to do a line by line analysis about
the expenditures in the Commons budget.
Is there any way you can make this presentation to us?
Mr.
Goscicki responded we do not prepare the Commons budget. The HOA does.
NINTH ORDER OF BUSINESS Adjournment
Mr.
Goscicki stated I would like to introduce Mr. Glenn Hanks who is a Board member
of the Coral Springs Improvement District.
Mr.
Hanks stated I wanted to stop by and introduce myself. Even though we have been next door to each
other, very few of us get to know members from other Boards.
Mr.
Goscicki stated this meeting room is part of the CSID facility. We share staff with CSID on the utility side
of the business as well as the management side.
We also share many common issues with CSID in terms of drainage, water
treatment and wastewater reuse. As CSID
starts moving forward with their programs, this will become more appropriate
when we start looking at some of the water resource management issues. Since you have common management, we can keep
the communication going.
There
being no further business,
On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all
in favor the meeting was adjourned.
Steve
Mendelson Salvatore
J. Mendolia
Secretary President