MINUTES OF MEETING

NORTH SPRINGS IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the North Springs Improvement District was held Tuesday, July 11, 2000 at 4:00 p.m. in the District Office, 10300 N. W. 11 Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Bill Bell President

Thomas L. Grossjung Secretary

Also present were

Rhonda Archer Manager

Dennis Lyles Attorney

Donna Holiday Recording Secretary

John McKune Engineer

Jane Early Engineer

Roger Moore Engineer

Chris Richard WCI

Joe Burke Ryan, Inc.

FIRST ORDER OF BUSINESS Roll Call

Mr. Bell called the meeting to order at 4:00 p.m. and called the roll.

SECOND ORDER OF BUSINESS Approval of the Minutes of the June 1, 2000 Meeting

Mr. Bell stated that each Board member had received a copy of the minutes of the June 1, 2000 meeting and requested any additions, corrections or deletions.

There not being any,

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the minutes of the June 1, 2000 meeting were approved as submitted.

THIRD ORDER OF BUSINESS Public Hearing to Consider the Adoption of the Budget for Fiscal Year 2001 and the Levy of Non Ad Valorem Assessments

Mr. Bell stated item three is the public hearing to consider the adoption of the budget for fiscal year 2001 and the levy of non ad valorem assessments.

Ms. Archer stated I have a certification from the Property Appraiser indicating the number of assessable units in the District. When I originally distributed the budget I used last year's assessable units and indicated that when we received the new certification we would have more units which would lower the assessment. It is complicated because we have different assessment areas. The first page is the certification from the County and it is difficult to understand because they list it in all of the different assessment areas.

The total proposed expenditures for the year are $700,882 for the general fund which is for the operations and maintenance of the District. Last year's budget was $666,927. The net tax levy after subtracting all of the other available sources of income, such as interest income, is anticipated to be $682,882. We add on to that 5% to cover discounts and collections for a total levy of $718,823. We break down the assessment between the administrative and maintenance because there is a portion of the District, referred to as North Springs 6, that isn't currently benefiting from the water management system and only pay an administrative assessment. All other areas in the District pay an administrative and maintenance assessment. We have a total of 11,676 administrative units and 10,978 maintenance units. In addition we have the Heron Bay mitigation program and that is 2,210 mitigation units and is assessed only for the Heron Bay mitigation budget which is broken down separately on page 3 of your budget and that gross assessment is $46,166.32. The assessment for the regular units is going from $52.98 to $60.39 and the reason is that we have less money in carry forward funds going into this fiscal year than we had last year. Last year we budgeted surplus funds of $111,730 but we ended the fiscal year with a real surplus of funds of $120,948. We are planning to expend those funds and not have any surplus funds to carry forward into this next fiscal year which is why the maintenance assessment has to go up. In reality, this is the level at which the maintenance assessments would be every year if we spent our budgeted expenditures and didn't have any money left over. This is our natural assessment level with no carry forward surplus.

In addition to the general fund budget and the maintenance assessments, we have all of the various debt service fund budgets starting with North Springs Unit 1 which pays for the Series 1973 Bonds. At the bottom of each debt service fund schedule, we have indicated which areas are included in that bond issue. For example, North Springs Unit 1 includes North Springs 1, 1A, 1B and 1C for a total of 6,986 units. Last year those areas had 6,654 units. Even though the maintenance assessment is going up, the debt service assessment is going down, from $45.39 to $40.38 for the properties in North Springs Unit 1.

North Springs Unit 2 pays for the Series 1990A Bonds which is in Supplement Area No. 1 and Includes North Springs Area 2A and 2B for a total of 163 units. There haven't been any changes in that area because that area is platted and we don't anticipate any changes in the future. The debt services is a little bit higher this year because the principal and interest payments are going up from $98,094 to $99,844 which causes approximately a $10 increase in the debt service assessment per year. That is based on the amortization schedule on the bonds. It goes up and down a little bit each year because you have to call bonds in $5,000 increments. Some years it is a little bit more and some years a little bit less but it has always been in that range.

North Springs Unit 5 is the supplement No. 3 area and includes North Springs 5 and 5A for a total of 1,022 units. Last year we had 869 units. The debt service assessment to pay the Series 1994B Bonds will decrease from $367.21 per unit to $312.89 per unit.

The Heron Bay Commons budget is similar to the prior year's budget. In total we are still budgeting $625,000 in revenue. On a line item by line item basis we reallocated some of these funds. This is the budget provided to us by Heron Bay Commons and we incorporated it into our budget. If you recall we told them in the past that we will levy the assessments on the tax roll along with the debt service assessments but they would have to provide us with the budget. That comes out to $250 per unit which is the maximum annual assessment we indicated to the property owners that we would levy for maintenance when we issued those bonds. I will point out the assessments are based on a total of anticipated 2,500 units to be constructed and for those units not currently platted, they will get a per acre assessment on the tax bill so that the total adds up to the 2,500 anticipated units.

Mr. Bell asked did they discontinue the maintenance supervisor that is listed in last year's budget?

Ms. Archer responded they never hired the person that was in the budget the first year when we tried to identify all of the different functions that would have to be covered at Heron Bay Commons and some of the responsibility has been taken up through the janitorial maintenance person and the assistant administrative person. They don't need that position filled. They have also set up reserves for the tennis courts, painting, pool & spa, roof and parking lot, similar to what a homeowners association would do if they had recreational facilities to maintain.

Mr. Bell asked what is the difference between a contingency and reserves?

Ms. Archer responded reserves are specifically set aside for those purposes and contingencies are for unforeseen maintenance expenses and not included in the budget.

Mr. Bell asked will there be carry forward surplus in this budget?

Ms. Archer responded I didn't do an analysis of where we are going to be at year end but I anticipate there will be carry forward surplus. We budgeted last year to carry over working capital for the first quarter of each year until the assessments start coming in. For your next meeting I will put together a year to date financial statement showing budget to actual.

Mr. Bell stated you expect there will be carry over dollars.

Ms. Archer responded yes.

Mr. Grossjung asked is there a summary page showing how much it is going up in each segment?

Ms. Archer responded I didn't prepare that schedule.

Mr. Grossjung stated I don't understand that if the number of units are going up in most segments and debt service is going down, other than overhead, what is causing the increase?

Ms. Archer responded the increase on the maintenance side is we don't have carry forward surplus funds.

Mr. Grossjung asked resulting from what?

Ms. Archer responded because we are spending all of the money that we said we would spend during the fiscal year. In the prior year we didn't and we had $120,948 left over. We carried over the $120,948 into the current year's budget and with the budgeted expenditures we anticipate that we will not have any carry forward surplus funds going into next year.

Mr. Grossjung stated in fact we have exceeded our $666,927 budget and anticipating spending $737,615. What did we spend that on?

Ms. Archer responded that is what we anticipated spending all along.

Mr. Grossjung stated the big item under the maintenance budget is $55,000 for capital outlay. What does that represent?

Ms. Archer responded that represents the purchase of the pumps. We are replacing a pump that is approximately 20 years old that is in Pump Station No. 1. That came about when we started having problems with the pumps in the C.S.I.D. pump stations that are also 20 years old and we did an inspection on the Sunshine pump stations and found a similar problem. The pump we are replacing is the same age and has the same problem. Anything that we replace is going to come out of the operating budget. Any new construction would come from the issuance of a bond. The renewal and replacement fund is in the O & M budget.

Mr. Grossjung stated I am concerned about a 13% increase to 11,000 property owners without a better understanding of the allocation of the surplus funds.

Mr. Bell stated we actually carried forward $120,948 from last year. What did we not spend during last fiscal year?

Ms. Archer stated I don't have those figures in front of me but it is normally the chemical budget for the maintenance of the canals. We put together a chemical budget for the year and we don't know until you are in the summer months and adopting the budget for the next year, how much we are going to use in chemicals to treat the vegetation in the canals because they don't start growing until the summer months. You treat them after they start growing. It is not until the July, August, September time period that you start spending the chemical budget.

Mr. Richard stated you could have that same situation at the end of this year.

Ms. Archer responded we could, going into the growing season we don't know what problems we are going to have. We always budget that we are going to spend the entire chemical budget but sometimes we do end up with surplus.

Mr. Bell asked would we have approved a budget two years ago with a carry forward line item?

Ms. Archer responded yes.

Mr. Bell stated two years ago in the right hand column this Board approved something that showed a carry forward dollar amount as a part of the budget.

Mrs. Archer stated that is correct.

Mr. Bell stated not only did we spend those carry forward funds we continued to carry forward a substantial amount. My point is along the lines of what Mr. Grossjung said and that is a substantial amount of money differential in the 13% but I am thinking it is more than that based on the fact that two years ago we were able to operate and still have a significant carry forward amount.

Ms. Archer stated I think where we are getting confused is that every year if we have a carry forward surplus, regardless of what it is, it goes up and down all of the time, that is used to reduce the next year's assessment levy. The reason we are spending the carry forward surplus is because we have reduced every year the assessments that we levy to take into consideration that we have left over funds from the prior year. Every year our assessments have been going down because of the carry forward surplus funds that we credit against the annual assessment. Every year your O & M assessments are going down because you have a carry forward surplus funds. This year we don't anticipate having any carry forward surplus funds so the assessment is going up to where it should be and where they were before you had any carry forward surplus.

Mr. Grossjung stated not necessarily. I don't buy the argument, where they should be. If you have more units, the cost per unit shouldn't necessarily rise unless the incremental cost of running the District is rising at a faster pace.

Ms. Archer responded your budget has increased from $666,928 to $700,882.

Mr. Grossjung stated that was my next question. Things like health insurance went up $5,000 and some other insurances are up. Were these increases not anticipated in the budget? What do they represent?

Ms. Archer responded they represent rate increases that we received from the carriers of the health insurance.

Mr. Grossjung asked is that rate increase simply passed through as an add on cost or do we need to look at what the insurance coverage provides and try to maintain it within our budget that we agreed to?

Ms. Archer responded there are several components to it. They don't just say, they want more money and we pay them more money. We look at providing other insurance and whether we can get comparable coverage at a lower rate and we have to think about the coverage we are offering our employees. We have to continue to be competitive in the market with the other utilities because as soon as we pay our employees less per hour or provide less benefits, they will go to the next utility. One of the problems we have with changing health insurance companies is that we have a couple of people on our health insurance who have pre-existing conditions that the new carriers will not pick up. If they pick them up, the premium they are asking is even higher than what we are paying. We are working on this but we are budgeting what our current carrier has indicated our premiums will be next year.

Mr. Grossjung stated that is in the proposed budget. I am talking about the difference between the 1999 budget versus what you are projecting you will spend in 1999.

Ms. Archer stated it is based on our actual cost due to rate increases.

Mr. Grossjung stated that is where I am suggesting that we need to look and maybe not spend the carry forward if that is an alternative. Operating items like pump replacement may not be an alternative. If we have these expenditures above and beyond the budgets, do we discuss these at the Board level, you have projected that it will come in at $572,248 but it came in higher.

Ms. Archer responded that is what we projected. It is only a projection.

Mr. Grossjung stated this increase is based on the projection and assumption that we will spend all of the carry forward. With six months left in the year, do we have to spend all of the carry forward surplus and if we cut that amount in half and it is only $50,000 that we have to carry forward, the reduction that would come to the homeowners would be half of the 13% increase. If we spent $55,000 of the projected $111,000 already on pumps is there any latitude in any of these other areas for the second half of the year to have some carry forward going into the next budget?

Ms. Archer responded we already have a very tight budget. You have a budget for chemicals and our staff apply the chemicals that they need to apply. If we have to replace a pump before hurricane season starts to protect property we need to do that. Where do you want me to cut costs since that is the largest item?

Mr. Grossjung stated you started the presentation by saying the biggest reason we have an increase is because we don't have a carry forward from last year, we are spending all of the money. I am trying to ascertain, have we done a thorough job to see if there is a necessity to spend all of this money or is there still some latitude in the second half of this year so that we don't spend it all?

Ms. Archer responded we have reduced this year's assessment levy that we are currently in by the carry forward we anticipated last year which is $111,000 which means if you spend what you budget for this year, that spends the $111,000 because you have reduced your assessment levy by that amount already.

Mr. Grossjung stated that is what we budgeted last year, $537,197 to include the $111,000.

Ms. Archer responded if we didn't have any carry forward surplus funds it would have been in the neighborhood of $637,000+ because you had $111,000 left over from the prior year and reduced the assessment levy down to $537,000. Without the carry forward surplus, it would have been $648,000.

Mr. Grossjung stated our budget for this year was $666,927 and that includes $111,000 carry forward but we are going to spend $737,000 so we are going to spend more than what was in the carry forward last year.

Ms. Archer responded the reason being is to pay for the pump. You will see under revenues $53,656 for the engine sinking fund. That is money to be set aside every year to replace the pumps. Since we are replacing a pump we are pulling that money in from the engine sinking fund under revenues to replace that pump. We are spending that and need a source of funds for that expenditure. If you look at this revenue against that expenditure being a wash, because moving the money from the engine sinking fund is going to pay for the replacement of the engine. That takes the total down by $54,000 and makes a better comparison to the current year's budget. The only other difference is that instead of $15,000 in interest income we invested the funds and anticipate that we will get $25,000 in interest.

Mr. Bell asked isn't Heron Bay aquatics impacting these numbers? There is $27,000 listed.

Ms. Archer responded they were posting it to the Heron Bay Aquatics in the financial statements and they have their own budget so I took that out.

Mr. Bell stated in the proposed budget there is $44,717 for that line item.

Ms. Archer responded I pulled that out at the bottom of the page because I have handled that separately and levied it against the units in Heron Bay.

Mr. Bell stated on page 1 the total budget is $700,882 which corresponds to the total. Is that the total of $537, 698 and $163,184?

Ms. Archer responded yes.

Mr. Bell stated where does the net tax levy of $682,882 come from?

Ms. Archer responded after you take the $700,882 and subtract $3,000 for permit review fees and $15,000 for interest income, the net tax levy is $682,882. You have to gross it up for discounts and collections of 5% because the Tax Collector allows a 4% discount for early payment and they charge 1% to collect it. We will only receive the $682,882 but we have to levy $718,823 in order to receive the net amount to balance the budget. The $718,823 is divided between three components, the administrative, maintenance and Heron Bay Aquatics. I show on the side the percentages and the Heron Bay Aquatics is 6.38%.

Mr. Grossjung stated every unit receives under this budget $60.39 maintenance assessment.

Ms. Archer stated that is correct except if you live in Heron Bay you pay another $20.75.

Mr. Bell stated I still don't quite understand where in the line items if you go back two years, how they compare to the line items on this budget which would account for the carry forward funds. I understand not having the carry forward funds. We should be zeroing out and we are not in the business of keeping a savings account other than contingencies and reserves, but you said earlier if you made a comparison it would be in the herbicide area.

Ms. Archer responded it usually is but I will put together a comparison for you based on the actual revenues and expenditures for each year and give you a spread sheet that showing the last couple of years and how the carry forward funds were generated so you can see where they came from.

Mr. Grossjung stated I think that would be helpful. Also a schedule of what increases or reductions have happened to the unit owners over the last three to five years. The question is the magnitude. Is it better to increase it 2% per year for five years or stay constant and pay them all at one time. I think we ought to see what we have done in an historical perspective.

Ms. archer stated I will prepare the spread sheet and send it to you that shows where the surplus funds were generated and I can also give you the history of the annual levies. I will go far enough back so you can see the trend. Because this Board meets early in the month, if you want to continue this public hearing to next month's meeting to adopt the final assessments we can do that because I have to certify the levy to the Property Appraiser in early August and you meet in early August. We can continue this meeting until then and I will get those schedules to you.

Mr. Grossjung stated I won't be here August 3.

Ms. Archer stated we can make it later in August. I will put these numbers on the TRIM notice and we can't exceed what we put on the TRIM notice. You are looking for a way to make it lower, so that will work if you are okay with me putting these numbers on the TRIM notice. By the time I have to certify the final numbers the first week in September, we will have met later in August and I can certify the final numbers.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the public hearing was continued to Thursday, August 17, 2000 at 4:00 p.m. at the same location.

FOURTH ORDER OF BUSINESS Consideration of Award of Contracts

A. Culvert Cleaning and Repair

Ms. Archer stated the bid tabulation was contained in your agenda package and the low bid is in the amount of $9,095.36 received from Underwater Engineering out of Port St. Lucie. Our estimate was $15,000 for that work.

Mr. Bell stated that is a significant difference. Have they done work for us before?

Ms. Early responded yes, they have. The reason the estimate was $15,000 is because I originally called Industrial Divers to get a feel for what it would be and he is normally low and I was surprised when I got two bids under the estimate. I had a third bid that was lower but his bid was submitted 15 minutes late so it was non responsive. This project is for four or five culverts located in Parkland Isles.

Ms. Archer stated this isn't our normal culvert cleaning bid.

Ms. Early stated Parkland Isles is nearing completion and we had Industrial Divers check the culverts to make sure everything is clean before turning it over to Mr. Schooley for maintenance. We found several culverts that were blocked and when they gave us the price for cleaning them, we felt we should put it out for bid because it is over your bid limit. This will be paid from the Parkland Isles Special Assessment because it is the final cleaning before we turn it over for maintenance.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the contract was awarded to Underwater Engineering in the amount of their low bid.

B. Heron Bay East Lakes

Ms. Early distributed the bid tabulation and stated the engineer's estimate for the project was $5,403,000. Four bids were submitted and the low bid was submitted by Ryan, Inc. Triple R was the second low bid and as you can see their bids are within $800. We recommend that we not award the project at this time. This project is both WCI's and the District and only 20% of the project is the District's portion. Digging the lakes down to elevation -5 and demucking of the lakes, the canal bank shaping and a small portion of the mobilization. The remaining work is WCI's. If you look at the unit prices it appears that Ryan is getting their money upfront and they have 9¢ per cubic yard for embankment which is a large portion of what WCI would pay for. In essence the District would pay $1.52 per cubic yard for digging the material which is almost twice as much as Triple R has in their bid for that. We feel the bid is unbalanced.

Mr. Grossjung asked could we award the contract to someone other than the lowest bidder?

Ms. Archer responded we would rather throw out all of the bids and negotiate something with WCI where they do this contract and allow the District to reimburse WCI for our portion of it. Our portion to WCI wouldn't be more than what is in Triple R's bid.

Mr. Lyles stated we wouldn't award the contract to anybody. WCI would go forward and do the whole project and we would enter into an agreement with WCI to acquire the infrastructure portion of it that we are responsible for with the understanding that it would be a net savings to the District because that price is going to be less than any of the bid prices for the District's portion. It is a savings to the District because we will pay less on a unit price basis and we are not going to supervise the job with our engineers and our staff so we will not incur those costs as well. It will be a savings to the District to do it that way and WCI has indicated their willingness to go forward on that basis. Since they are willing to do that and front the cost, we have no need to bid it.

Mr. Richard stated it is the same thing that we have done in the past. We will go back to the last public bid that was done that the District bid and we will take a 10% cut on it and reduce the price. Parkland Isles is the last publicly awarded contract.

Mr. Lyles asked in terms of these unit prices is that more or less?

Mr. Richard responded it is less.

Mr. Lyles stated they are going to take a lower unit price and then a 10% discount so it is double net savings to the District.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor all bids for this project were rejected.

FIFTH ORDER OF BUSINESS Consideration of Construction Related Items

A. Acceptance of Utility Easement on Lots 50 & 51, Wyndham Lakes South Parcel A

Ms. Early stated the applicant did submit a revised easement that I reviewed and it is acceptable. My letter states that we want them to diaper two joints on both sides of the house. A contractor did come in and I gave him the detail. He said he was going to do it and I told him I needed to know when he was going to do it so that I could send someone out there but I haven't heard from him.

Mr. Lyles stated this item came up at your last meeting and it was postponed for a month because you have a house that has a corner that is slightly within a District easement and we want to make sure that we address that in terms of any future work. The understanding was that they would revise the description of the easement boundaries and also make the modifications that Ms. Early described. Because they were asking for it last month and they said it wasn't an emergency I assume this month they need approval. If you want to accept the easements subject to the District Engineer confirming the diapering of the joints and if that has been done, we can finalize the acceptance. If not we will bring it back to the Board at the next meeting.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the revised utility easement on lots 50 & 51, Wyndham Lakes South Parcel A was accepted subject to the conditions outlined above by Mr. Lyles.

B. Acceptance of Conveyance of Water Distribution and Wastewater Collection System for "In The Pines" from Parkland Building Co., Including Non-Exclusive Easement Agreement, Bill of Sale, and No Lien Affidavit

Ms. Archer stated this is something that you probably haven't seen for a long time but is something that we routinely do when water and sewer lines are put into a subdivision, not by this District but by a developer and then he will convey those improvements to us for ownership and maintenance. He put it in at his own expense and he doesn't want to be reimbursed for it but he doesn't want to continue to own them either. Throughout the process our inspector, inspects all of the construction to make sure it is constructed in accordance with our specifications and signs off on the system as completed and then the Developer turns it over to the District. In part of that turn over package we have developed these standard affidavits, bill of sale, a price sheet indicating the cost of the improvements so we can add that to our books for accounting purposes. We will own and maintain those lines just as we do in all of our other subdivisions that we build.

Mr. Grossjung asked why would a builder do that?

Ms. Archer stated because he doesn't want to go through our bid process and to save time to do it himself and be done with it. There are several others out there that have done this. It is just that we haven't been able to get them to fill out the paperwork to turn them over. They think once the subdivision is done, they will walk away from it and not worry about it. They actually continue to own and have maintenance responsibility for those lines.

Mr. Bell asked are they not eligible for the reimbursement program after the fact?

Ms. Archer responded no. They would have been if they did it before the fact, then we would put it out for bid, use our contractor to construct it, use his money to do it and put him in our reimbursement program to be reimbursed.

Mr. Bell asked why did we reimburse after the fact on one of them?

Mr. Lyles responded we didn't totally. That particular individual had a problem with notification regarding the existence of the program, it's availability to his subdivision and he made a case before the Board that once he was made aware of all of the terms and conditions he did in fact go through the District program and he would have had he had the full information prior to that. One that was further in time and different in nature you did not approve and one that everyone agreed including Mr. Martin that he probably would have gone through our process had he known about it, you approved for a retroactive application of the program.

Mr. Bell asked how much was the amount?

Ms. Archer responded the water distribution system and sanitary collection system was $133,025 which is a small project.

Mr. Bell asked how long does it take to go through our system?

Ms. Archer responded this one was just recently completed. There are a lot of them that have been completed and they just left and not turned them over to the District.

Mr. Bell stated if you wanted to go through the reimbursement program, what is the time frame?

Ms. Archer responded as part of our process we have to put it out for competitive bid and that takes a couple of months to put it out for bid, get the bids in and award the contract. Maybe this developer had a price from a contractor and was ready to go that day. There are just 28 units in that project.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the documents conveying the water distribution and wastewater collection system for "In the Pines" were approved.

C. Change Order No. 1 & Final for Heron Bay Six for a Net Increase of $2,507.00

Ms. Early stated this is the typical balancing change order to adjust the quantities to as built numbers.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Change Order No. 1 and Final for Heron Bay Six Contract for a net increase of $2,507.00 was approved.

D. Change Order No. 1 for Heron Bay Boulevard 9 and 10 for a Net Increase of $107,224.00

Ms. Early stated the majority of this change order is WCI's and it includes an exfiltration trench in the medians which was an additional item requested by the City of Parkland. On page 2 the majority of the cost which is $102,133 is WCI's. A WCI advance which is a District cost that they are advancing the money for the water and sewer portion is an increase of $5,091 to the District. We decreased the force main from a 10" to an 8" and we added an additional 600 linear feet of the 10" water main off of Heron Bay Boulevard to extend it past this project.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Change Order No. 1 for Heron Bay Boulevard 9 and 10 contract for a net increase of $107,224.00 was approved.

E. Permit Request for Temporary Encroachment into West Dike Right of Way at Heron Bay Six

Ms. Early stated WCI needs to construct a slab for their sales trailer. They want to have a 20' encroachment into our 66' right of way where our existing dike is located. We don't feel that will have any effect on the maintenance of the District's facility. They will stay away from the dike by about 5'.

Mr. Bell stated from an engineering standpoint there is no concern?

Ms. Early responded no.

Mr. Grossjung asked is there a legal need to cover us in the event we have to break that slab and get into the area?

Ms. Early responded I believe the actual permit has language to the effect that if we need to get in that area, that it is at the cost of the permittee.

Mr. Lyles stated it does but it is a little different because our standard language contemplates a permanent encroachment and it says that any time the District needs to get in there and take something out, if it needs to be broken up and reinstalled, it will be at the cost of the owner.. This is for a temporary encroachment.

Mr. Davidson stated it will probably be between 18 months and 2 years.

Ms. Early stated I met with them on the site to locate it.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the permit for a temporary encroachment into the West Dike right of way at Heron Bay Six was approved subject to the conditions listed in the Engineer's review letter and that the time not exceed two years and that the site be restored to its original condition.

F. Permit Request to Encroach into a Utility Easement with Privacy Wall and A/C Slab - Heron Bay Estates

Ms. Early stated there is a sketch in your agenda package where the A/C slab and privacy wall is proposed to be located. I did verify that that is an easement on the plat so we do own the easement. Based on our review we recommend approval. We don't feel there will be any adverse effects on the District's water main.

Mr. Bell asked how far away is the water main?

Ms. Early responded I believe it is 8'.

Mr. Bell stated you could get a backhoe in that area.

Ms. Early stated that is correct and we will use the same wording, if we need to remove the structure it will be at the permttee's expense.

Mr. Grossjung stated I am concerned because we have taken a hard posture about encroachments.

Ms. Archer stated that is usually related to drainage. This is an encroachment into a utility easement.

Mr. Grossjung asked are there legal concerns?

Mr. Lyles responded we set a strong precedent with respect to encroaching into canal and lake banks. It is not inconsistent with the precedent you have been following on fences encroachments. The permit application and permit itself indicates that if for any reason we want to get in there they are obligated to take it out at their expense. Is this a standard utility easement?

Ms. Early responded yes and there is a water main located located within it.

Ms. Archer stated it is between two houses.

Mr. Bell stated when this lot was looked at as it relates to a structure, they want to put an A/C unit on both sides of the house. They didn't take into consideration the easement.

Ms. Archer stated if they were to build that slab and wall out to the water main, we would have a lot more concern about it. They are staying away from the main. Just having someone digging in the area can cause problems. We have some areas where the water main is under driveways and when they start digging around the driveway we had an instance where they hit the main.

Mr. Grossjung stated if the unit owner immediately to the right decides to put a slab adjacent to the slab that is proposed in this application, there would be 3' between the two slabs at that point. Why would we grant this unit the ability and the unit next door deny it. Is it first come, first served? I think we have an obligation to consider whoever the unit owner will be on the other side.

Ms. Archer stated when we are approving this it is not a detriment to the District. If they came in next door and asked for the same thing in the same location that would be a detriment.

Mr. Grossjung stated in that case it is a matter of first come, first served.

Mr. Bell stated it also has to do with how the lots are platted.

Mr. Lyles stated the applicant is Toll Brothers and not an individual homeowner. How many of these homes are Toll Brothers building along this street? Probably a number of units.

Mr. Grossjung asked how many more are we going to have coming to us for the same issue because in their plans for these homes they didn't allocate enough space to put up a slab for an A/C unit?

Mr. Lyles stated you usually see both units on the same side of the house shared by the same privacy wall. This is an unusual way to build. There may be something unique or maybe it is too late to put it with the other unit and this is their only option and it may be totally different from the others they are building. We can always protect ourselves by requiring them to pay for everything and waiving the right to any claims for loss to the slab, the A/C unit or the wall if our line has a leak. Maybe we should defer this and find out.

Mr. Bell asked will we send someone out to look at it again? Will we ask for clarification in writing as to the rationale and is this anticipated to be in multiple units?

Mr. Lyles stated I don't think you need to send anyone to inspect. I think some kind of justification for the variance other than they just want to do it would be appropriate and staff can ask for that.

Ms. Early stated they can give us the layout of the home next door.

Mr. Lyles stated you want to know why this is unique as in this is the only one like it.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor this item was deferred to the August 17, meeting.

G. Change Order No. 1 for the Potable Water Storage Tanks for a Net Increase of $28,420.00

Mr. McKune stated we took bids on these two storage tanks in March 1999. Prior to that time we sent signed and sealed plans and a few checks from the District to the City of Parkland after speaking to their Planning Director, David Lee, so that we could get all of the approvals necessary to allow us to build these tanks. Mr. Lee told us that he received everything he needed. We took bids and awarded the contract to Crom Corporation. We told Crom Corporation that everything was in order and we established a preconstruction meeting in May 1999. He filled out his building permit application, gave it to the City of Parkland and they told him to forget it, you can't build this until you have the property platted and go through a rezoning process in the City of Parkland. We begged and pleaded. We eventually found our original submitted drawings and check at the City, I was told they were mislaid, but they had been laying in the engineer's office for some time and they gave them back to us. Since that time we have been going through the rezoning and platting process. We have successfully done that. In the process we have greatly increased the amount of landscaping to be provided at the site which took the Community Appearance Board meeting, Planning and Zoning Board meeting and the City Commission meeting all of which had different opinions on the amount of landscaping to be provided. We now have an agreement. This change order is a request from the contractor, Crom Corporation, for an increase in the contract price of 3 1/2% of the original bid amount, which represents the increase in the Engineering News Record Building Construction Cost Index. It is what I term a standard in the industry used when you compare costs from one period to another, similar to the consumer price index. In my opinion this is a fair request. It represents an increase in the amount paid to Crom Corporation of $28,420. If we consider the time involved, which is over one year, we have earned assuming a 4% interest rate on the $800,000 in the construction trust fund which is the amount of the contract, $32,000. They are asking for $28,420 to cover their increase in costs. I consider that to be a fair request.

Mr. Grossjung asked given the amount of time since this was bid, how is this contract going to hold up? Don't they have a completion time?

Mr. McKune responded we never issued a notice to proceed and everything is predicated upon the date of the notice to proceed. The time frame is still valid from the date of notice to proceed. He agreed to work with us with the understanding that we would consider his increase based upon the index.

Mr. Lyles asked is he obligated to keep his prices for some particular period of time?

Mr. McKune responded 90 days.

Mr. Lyles stated he could have walked away from the contract nine months ago which would cause us to rebid which is an expense and we could have received higher bids.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Change Order No. 1 for the Potable Water Storage Tanks Contract for a net increase of $28,420.00 was approved.

SIXTH ORDER OF BUSINESS Consideration of Work Authorizations

A. Work Authorization No. 53 for the Preparation of Construction Drawings for Excavation of Approximately 24 Acres of Lakes and Drainageways

Ms. Early stated our original work authorization for Heron Bay Lakes was for 54 acres of lakes which I believe was before the Board at the last meeting. After the Board meeting, we met with WCI and they wanted to increase the lake areas and that is what we put out to bid. This work authorization covers that work.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Work Authorization No. 53 was approved.

B. Work Authorization No. 54 for the Preparation of Water Distribution and Wastewater Collection Construction Drawings and Specifications for Heron Bay East

Ms. Early stated this is for the design portion of the water and sewer and this will require a funding agreement. There will be 360 units. Paving and drainage design will be paid for by WCI. This will require a funding agreement to advance fund for the design of the water and sewer.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Work Authorization No. 54 was approved along with the engineering design agreement for Heron Bay East.

C. Work Authorization No. 55 for the Preparation of Engineering Data Necessary for Development of Series 2000 Water Management Bond Issue for Supplement No. 3

Ms. Early stated since WCI is going to pay for the Heron Bay contract with Ryan that was on the agenda earlier in the meeting, there is no urgency to approve this work authorization.

Mr. Lyles stated due to Board action taken earlier in this meeting you do not need to take any action on this item. It will come back to you when it is necessary.

No action was taken on this item.

D. Work Authorization No. 57 for the Preparation of Engineering Data Necessary for Development of Series 2000 Water and Sewer Revenue Bond Issue

Ms. Archer stated we met and talked about where we are with this plant expansion and when we are going to run out of water again and started backing into the things that need to happen. Based on that time line and all the preparation work to get us there, it is time for us to start working on the next bond issue so that we will have the money in place to do the design and specifications and planning work that we need to do for the next plant expansion that was anticipated in 1998 when we issued our bonds.

Mr. McKune stated in 1998 it was anticipated to happen in 2005. In 1995 we did a rate study, a planning document, forecasting a need for expansion in 1998 which we are now constructing. We are starting the process a little bit early to make sure that we have everything in line and we don't come up short. One of the main reasons for looking at this at this time is to develop a more accurate look at the need. We need to get into what the other major landowner, which is Lennar Corporation, think they may do within the District. We think we know what they are going to do and when they are going to do it but their plans will definitely impact this need.

Mr. Bell asked where is their property located?

Mr. McKune responded they are in the north end of the District.

Mr. Grossjung stated the farther you go out the less accurate your assumptions have to be. Planning for a five year time line is a lot different than planning for a three year time line. Whatever planning you do now, would that drive us toward anticipating a higher bond amount? when is that actual decision made?

Mr. McKune responded we can estimate the amount of the bonds closely. What we do at the next expansion is close to a mirror image of what we are building now and we have a good idea of the costs. We may determine that we want to include in this bond issue some repayment amounts and those we know precisely. We back test the entire water and sewer rate structure to see how much we can do in new bond issue money so that we don't have to raise the water and sewer rates. That is the first plateau. If we need additional money beyond that point then we start coming back to you indicating if we do these projects then the water and sewer rates would have to go up by approximately X amount. You have one opinion on rates, the developer has an opinion on rates from a marketing perspective. All of this gets factored in and we end up making a decision but at least we know beforehand what we have to do with the rates.

Ms. Archer stated it is nice to not have the additional costs of a new system until we have the additional units to pay for those costs so that it doesn't negatively impact the current users of the system. It is a timing issue. In the past we have completed our expansion at the moment in time when we were bringing on new users and the expansion was paying for itself.

Mr. McKune stated one of the biggest issues is the rate at which people will buy homes. Over the past several years we had a great economy and people have been selling homes a lot faster than had been anticipated and that uses up the capacity. It is great from a financial perspective because you collect the connection charges and the water and sewer rates but suddenly you are out of water. The philosophy of the District is that you don't build a lot of excess unused capacity because that is money that is idle and you have to pay the carry on that.

Ms. Archer stated we need to also look at the impact of having two potential major developers to work with in the District. We have one major developer, he has his idea of how much inventory he is going to have on line at any point in time and that may increase when you have another major developer creating another product type. We could find ourselves in a position where they are selling twice as many houses if the market is there.

Mr. Grossjung stated I believe that is valid. I want to make sure the time line for the planning process is commensurate with the costs associated with doing that. With interest rates moving who knows where, you don't want to sit down two years from now and say, throw this budget and this plan out because things have changed and we have spent the time and money associated with doing that plan, unless you feel there is enough value now with enough true facts.

Mr. McKune responded there is sufficient value now.

Ms. Archer asked is WCI suggesting that we move ahead with this and they will fund this and be reimbursed out of a future bond issues? Or are you suggesting that we have enough money in the current bond issue to do this study?

Mr. McKune responded there is sufficient money in the current bond issue to fund this work authorization.

Ms. Archer stated it is not like we are going to spend our operating funds to start taking a look at this.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor Work Authorization No. 57 was approved.

SEVENTH ORDER OF BUSINESS Staff Reports

A. Attorney

There not being any, the next item followed.

B. Engineer

There not being any, the next item followed.

C. Manager

Ms. Archer stated at the last meeting we talked about sending out letters to all of the residents asking them to observe some water conservation restrictions on a voluntary basis. We noticed a significant decrease in consumption, almost as much as 1 mgd over the weekend. The residents really did respond and responded immediately to our request. We received a lot of calls with questions about the letter but for the most part everybody was very receptive to our request. It has been several weeks since we have had to use the interconnect with the City of Coral Springs on a weekend. We did have to open it a couple of times in the beginning when the peak usage was so high on the weekend that our tanks were practically depleted of all the water and we had to open the interconnect and fill the tanks because we couldn't produce it fast enough to meet the Monday morning demand. We did that a couple of times with the City. Our letters went out, the consumption went down immediately and we haven't had to open the interconnect since and now we have started getting our afternoon showers which helps a lot. We are back on track with getting our construction underway. We have received the building permit from the City. That is in process.

Mr. Moore stated we had our first transfer pump installed and it was tested yesterday. Crom mobilized and they are grading the site and they will set the foundation this week for the off site tanks. Our first six wells will hopefully, be up and running in the next couple of weeks. FP&L has a transformer on site. We also had a successful meeting with the Health Department on everything we have done and they are working with us very well. We had a meeting yesterday with the Health Department and they liked all of the data that Gee & Jenson provided on the up-rating. They basically gave us a verbal okay on the up-rating and as soon as we finish the up-rating on the second plant, we will have a total package for an up-rating of the entire system. Once we get two more wells on line I think we will be getting closer. It is looking very positive.

Mr. Bell stated as a resident is there a need to go through the expense and the development to send out another letter? Is there a need to continue to conserve?

Ms. Archer responded yes there is. Until this plant expansion is completed we feel there is a need to conserve until we have the additional capacity on line. Even though the rainy season has started and that has helped us out quite a bit, if we can continue to be conscientious about our water use, it would be helpful. We noticed that people put their sprinklers on timers and they don't adjust the timers when the rainy season starts. The letters help them be a little more conscientious about the fact that their sprinklers are on timers and they turn the timers off and only turn them on when they need it. Things like that really help our present situation.

Mr. Grossjung stated I thought you were leaning toward an appreciation letter rather than another notice.

Mr. Bell stated I wasn't, just sort of an update with the fact that there was no longer a need. Common sense will tell most of us that there is no need to, however, you are saying capacity says otherwise.

Mr. Grossjung stated would another letter reminding them that even though the rainy season appears to be here that they should continue to conserve so there is no slippage in that behavior pattern and at the same time say we have done great things in the past and keep it up.

Mr. Bell asked did the letter talk about plant expansion or any rationale for decreased capacity or was it strictly weather, drought related? People may make the assumption that now that the rainy season has started, they don't need to be as conscientious.

Mr. McKune stated our experience has been that when you put out a letter asking for voluntary reductions, you do get an immediate positive response that degrades over time, they go back to their old habits unless they have made some adjustments to their automatic timers. We prefer to see those adjustments remain forever because the majority of the conservation items in that letter represent rational reductions and give them all the water they need. If you cut back by half in most areas for lawn watering, that is all you need to water. This represents a good, positive approach to water conservation.

Ms. Archer responded the letter did reference a combined storage capacity problem in the North Springs plant facility along with the unusually long dry season. It might be a good idea to send out another letter that is more of a water conservation type letter and I can get some information from S.F.W.M.D. and reference what they recommend for watering, and thank them for their conservation efforts and that type of combination letter.

Mr. Bell stated I think that is a good idea. I am sure the technology exists for some sort of underground meter on sprinkling systems.

Mr. Davidson stated there is a rain sensor and in the summer time I suggest that everyone turn their irrigation systems off. There may be a few dry days in the summer but generally you should not have them on automatic during the summer.

Mr. Richard stated in the homes we are building, all the new construction have rain sensors on them. Rain sensors don't always function 100%. The best thing to do is say during this time you don't need it. It is very good to let people know that they are appreciated but I question sometimes about asking them to continue to do more because that gives them a feeling that there is some impending doom. I like the idea if you use the S.F.W.M.D. criteria then it makes it seem as if they are part of the community and it is a good thing for everyone rather than something which is potentially harmful. It is more positive.

Mr. Grossjung stated general conservation today is a popular item.

Mr. Richard stated that is why I am suggesting that it be very general.

Ms. Archer stated there are a lot of cities in Broward County that do not let you use potable water for irrigation. I will send out a general conservation letter.

EIGHTH ORDER OF BUSINESS Supervisor's Requests And Audience Comments

There not being any, the next item followed.

NINTH ORDER OF BUSINESS Approval of Invoices and Requisitions

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the invoices were approved.

On MOTION by Mr. Grossjung seconded by Mr. Bell with all in favor the meeting adjourned at 6:00 p.m.

Thomas L. Grossjung William Bell

Secretary President