MINUTES OF MEETING

NORTH SPRINGS IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the North Springs Improvement District was held Thursday, June 1, 2000 at 4:10 p.m. in the District Office, 10300 N. W. 11 Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Bill Bell President

Matt Lauritzen Vice President

Thomas L. Grossjung Secretary

Also present were

Rhonda Archer Manager

Dennis Lyles Attorney

Roger Moore Engineer

Chris Richard WCI

Patti Hitchcock WCI

Armondo Goenaga WCI Communities

FIRST ORDER OF BUSINESS Roll Call

Ms. Archer called the meeting to order at 4:10 p.m.

SECOND ORDER OF BUSINESS Organizational Matters

A. Oath of Office for Newly Elected Supervisors

Ms. Archer being a Notary Public of the State of Florida administered the oath of office to the newly elected Supervisors. A copy of each signed oath will be made a part of the official record.

B. Election of Officers

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor Mr. Bell was appointed President.

On MOTION by Mr. Bell seconded by Mr. Grossjung with all in favor Mr. Lauritzen was appointed Vice President.

On MOTION by Mr. Bell seconded by Mr. Lauritzen with all in favor Mr. Grossjung was appointed Secretary.

On MOTION by Mr. Bell seconded by Mr. Grossjung with all in favor Ms. Archer was appointed Treasurer and Assistant Secretary.

THIRD ORDER OF BUSINESS Approval of the Minutes of the May 4, 2000 Meeting

Mr. Bell stated that each Supervisor received a copy of the minutes of the May 4, 2000 meeting and requested any additions, corrections or deletions.

There not being any,

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor the minutes of the May 4, 2000 meeting were approved as submitted.

FOURTH ORDER OF BUSINESS Consideration of Award of Contract for Underwater Diving Services

Ms. Archer stated included in your agenda package is the tabulation of bids we received for the underwater diving services that we bid every year. The low bidder indicated is Industrial Divers Corporation and they are the diving company we have worked with in the past. We are familiar with their work and are satisfied.

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor the contract for underwater diving services was awarded to Industrial Divers Corporation in the amount of $17,250.

FIFTH ORDER OF BUSINESS Consideration of Award of Contract for Nob Hill Road

Mr. McKune stated these bids were recently received and we were unable to get it into the agenda package. This is for Nob Hill Road extension. We received seven bids for the project. The lowest responsive bid was submitted by Sonic Engineering, Inc. in the total amount of $862,386. The engineer's estimate for this work was $1,039,266.50. We have reviewed the bid and recommend the Board award the contract to Sonic Engineering in the amount of their bid. As a side note, we have never worked with Sonic before. They are a relatively new contractor. They have only been in business since about 1996. We called on their other projects and all of their other work has been acceptable and we see no reason to doubt that they can do the job. They are simply a young contractor seeking to make a name for themselves. We have no reservations on any of the work.

Ms. Archer asked did they act as subcontractors on some of our other projects?

Mr. McKune responded I don't know.

On MOTION by Mr. Lauritzen seconded by Mr. Grossjung with all in favor the contract for Nob Hill Road extension was awarded to Sonic Engineering in the amount of their low bid of $862,386.

SIXTH ORDER OF BUSINESS Consideration of Construction Related Items

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

Mr. McKune stated apparently there is a building encroaching approximately 5' into the utility easement which has not yet been accepted by the District. In our letter of May 11, we indicated that the easement needed to be dedicated to the District since it was overlooked in the past by the Developer. We recommend acceptance of the easement and the encroachment of that one particular building in that it did not interfere with the functioning of the easement.

Mr. Grossjung asked how can a building be built over an existing easement whether it has been dedicated or not?

Mr. McKune responded someone missed it. It is just a corner of a building and someone missed it.

Mr. Grossjung asked someone in the City missed it?

Mr. McKune responded probably someone in the City plus we, as the District, had not accepted the easement and it may not have appeared on the plat.

Mr. Grossjung asked wouldn't the easement have been there irrespective of whether it had been dedicated, it would have been picked up as an easement owned by someone.

Mr. McKune responded if it is recorded, yes.

Mr. Bell asked when was the water line put in?

Mr. McKune responded it was put in several years ago.

Ms. Archer stated the water line was put in by the developer and not the District. If it were put in by us, the easement would have been there.

Mr. Lyles stated you may want to have someone describe the easement and carve out this encroachment so that you don't have an encroachment. If the building is too close and we have an 8" water line and those things have been broken in the past, the reason for the easement is to keep building away so that if the water line needs to be dug up or there is a break, we don't damage the building. In my mind I have a couple of questions of how we can best go about doing this. Is this time critical?

Mr. McKune responded no.

Mr. Lyles asked can it be carried over to the next meeting so that we can do some background check on this?

Mr. McKune responded yes.

Mr. Lyles stated the easiest thing to do might be to redo the legal description and carve out the encroachment.

Mr. Bell asked how do we limit our exposure?

Mr. Lyles stated I am not telling you that you have a problem on your hands. I am just saying it is possible. I have litigated cases where lines like this that are in easements adjacent to residential properties have a problem and part of the house falls down or gets structurally impaired and they have to go in and backfill and do things to support the corner of the structure. Not knowing any more about it than what I just heard today, it may be that we want along with the easement some representation from the developer that if there is ever a problem they are responsible and not the District. If the developer still owns the property and the property hasn't closed yet then in the grant of easement they can represent that they recognize if something happens to the line and the building is damaged because it is too close to the easement or words to that effect, or there may be another solution. I just don't know enough about it to give you good advice on how to best insulate the District from a problem. At this time there is no action required of the Board since they have not submitted an easement to take action on.

B. Consideration of Plat Exemption for Heron Bay South

Mr. Richard stated Heron Bay South is directly across the street from the Falls and is adjacent to the guardhouse. The easements are for water lines and drainage.

Ms. Hitchcock stated this is conceptual approval of plat exemption as to the location of the easements. Actual documents will be submitted to you with descriptions. It is somewhat unusual for this to be on the agenda but we are submitting to the City for plat exemption approval. We may end up fine tuning some of the locations of the water and sewer easements.

Mr. Richard stated we are just looking for a letter from the District for approval of the easements, not really acceptance. They are in the locations that are acceptable to the District for future acceptance.

Mr. McKune stated Ms. Early sent a letter to the District indicating that she reviewed the referenced plat exemption and sees no issues.

Ms. Hitchcock stated as plats come before the Board you accept the easements but a plat exemption usually is not on the agenda. Normally we work with BellSouth, FP&L, Cable TV and the District identifying the location of the easements for site plan and plat exemption and if those are acceptable we move through the City process and during the City process when we know that we can legally describe these easements and they are not going to move, then we come to the District with the actual grant of easement and a legal description which you will take action on and they will then be recorded and reflected on the plat exemption. I don't know that you need to take action on this until we bring the legal documents to you in the form of a plat and grant of easement.

Mr. Lyles stated there is no back-up and you use the term exemption and what you are really describing is you are locating lines within easements that are yet to be formally prepared and finalized and it is not really an exemption of any requirement. It is going to be where it needs to be. If you want to keep the process moving based on the background information you have received, you can just accept Ms. Early's letter as District Engineer indicating no objection at this point and take no action other than that. As the process goes forward it will come back to you as the engineering and legal work gets done. Probably everybody wants to be able to tell the City, we had this on a District agenda and it was approved by the Board. You won't be approving it this time, you will just accept Ms. Early's letter.

C. Change Order No. 4 for the Potable Water Supply Wells for a Reduction in Retainage

Mr. McKune stated two meetings ago we issued a change order to the well drilling contractor to allow for the placement of larger pumps and motors to give more yield in the wells. All of this has caused the contractor's time to progress and the length of the contract has been extended. This change order is based on the contractor's request to reduce the retainage from 10% to 5% of the work completed to date. Normally, we retain 10% through conclusion of the work but this is a reasonable request based on the length of this contract.

Mr. Grossjung asked is 5% reasonable?

Mr. McKune responded yes, it is 5% of the work completed to date. There is work not yet completed but that is not considered for reduction at this time.

Mr. Grossjung asked is the 5% being retained, sufficient to cover any problems we may encounter?

Mr. McKune responded it will cover any work not done.

On MOTION by Mr. Lauritzen seconded by Mr. Grossjung with all in favor Change Order No. 4 for the Potable Water Supply Wells Contract for a reduction in retainage was approved.

D. Consideration of Permit for Surface Water Management, Elementary School Site D-6

Mr. McKune stated D-6 is the proposed school at the intersection of Nob Hill Road and Trails End. We reviewed the plans submitted by the applicant, being the School Board's engineer. The project involves three drainage outfalls into the District's S2-2 Canal. Based upon our review of the plans and calculations submitted, we are of the opinion that the project meets the District's drainage criteria and will not adversely impact the District's facilities. The letter also includes our standard special conditions which will be made a part of the permit. We recommend the Board approve the project.

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor the permit for the surface water management and drainage outfalls for School site D-6 was approved subject to the conditions listed in the engineer's review letter.

E. Consideration of Request to Quit Claim Portion of C-2 Canal

Ms. Hitchcock stated we have almost reached completion of the Heron Bay Four community and have discovered that one of our models has difficulty fitting on the lots, particularly along the C-2 Canal. We are about five feet short. We are requesting the District to quit claim five feet of the canal right of way which was previously conveyed to the District and we will reserve that as an easement for drainage and maintenance purposes. There will be no structures located within that easement. It is really only necessary for three of the lots along that canal but the City would prefer it be in a straight line therefore we submitted this request.

Mr. McKune stated we have reviewed this request and do not see any problems.

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor the grant of a quit claim deed as outlined above was approved.

F. Work Authorization No. 54 to Renew South Florida Water Management District Use Permit

Mr. McKune stated the District currently has a water use permit from the S.F.W.M.D. which requires renewal every five years. This is a work authorization to authorize us to proceed with the technical back-up and submittal process required to accomplish the conditions of that permit. The scope of services is outlined in the work authorization.

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor Work Authorization No. 54 was approved.

SEVENTH ORDER OF BUSINESS Questions and Comments on Proposed Budget

Ms. Archer stated we distributed the proposed budget at the May meeting and we will ask you to adopt that budget at the July meeting. If you have any questions or comments if you want to send those in to us between now and then we will work on that.

EIGHTH ORDER OF BUSINESS Staff Reports

A. Attorney

Mr. Lyles stated probably a combined report between the Attorney and Manager will cover the hearing on the proposed agreement that you authorized at the last meeting with the City of Coral Springs for emergency water and a second agreement for the purchase of water in bulk to supplement our capacity. It turned out that the City was not ready to take action on the second agreement. They did approve as submitted to you the emergency water purchase agreement which is limited to emergencies when we have to open a valve between the District and the City and water pressure drops below a safe point which is needed for potential fire fighting emergencies or unusual drought conditions and things of that nature. At the City Commission meeting they made it very clear that at that point they were not prepared to go any further than just handling a true, acute emergency as opposed to the longer term period of months problem that we outlined for the Board at the last meeting with our rated capacity and Broward County's discussions with our engineers as to how much water we are pumping versus how much we are permitted to pump and where our plans are for expansion of the plant capacity and things like that. The City Commission is letting this go forward. They authorized staff to hire a consulting engineer to examine what they need to do and process an amendment to their permit to allow them to pump water out of the ground because although as we told you they have excess water capacity, they have to modify their permit to pull more water out of the ground in order to flow it into the District in this interim period while our plant is being upgraded and expanded. We didn't get action on that at the meeting which we expected and in fact it is not set for action at the present time. We still have a problem. They have authorized their staff to go forward with the engineering exercise to increase their consumptive use permit which will allow them to pull more water out of the ground but they have not indicated at all that they intend to enter into an agreement with the District to sell us water at that surcharge we talked about at the last meeting so that we can in turn provide it to our customers and residents. This will be a continuing problem that we will see through. I don't know if Mr. McKune has additional information to add to that. We will continue to negotiate with the City and at least a couple of Commissioners had some strenuous objections to doing this. The Manager has written or will write a follow-up letter and request that this item be brought forward as soon a practical for action by the Commission and urging them to authorize the agreement but we don't know how it is going to end up at this point. We are getting a squeeze from two different ends that the County is questioning how much water we are pumping and the ongoing closings and C.O. issues with both the City of Coral Springs and Parkland and the unincorporated area. We don't have a solution yet that has been approved by the City but instead of saying no, they have at least are seeing about increasing their consumptive use permit so they will be in a position to do this if they decide they want to but they have definitely not said they are going forward with this bulk water agreement with the District.

Mr. Lauritzen asked are we still having problems getting permits for the plants?

Mr. McKune stated the City has a completely different view. They are signed off on the permit, the permit is not in hand yet. The City is now telling the contractor they are completing the accounting of the overtime necessary to review the permit and they will give the contractor a bill for those services at which time they will also hand him the building permit. It shouldn't take much longer for their bill preparation process.

Mr. Lauritzen stated that seems to be the source of this whole problem.

Mr. McKune responded it is part of the delay but it is not the sole source. I might add that we are pursuing a parallel agenda. The Health Department views this bulk water agreement with the City of Coral Springs as a guarantee of capacity. They view that as the immediate answer to the problem. The key is their perception of the guarantee of additional capacity. As you know we are going forward right now with an upgrading program of the existing facilities which when completed on schedule, it is a two phase program, the first phase will be completed within 30 days, at which time assuming the program goes as planned, we will have a rated capacity in excess of what we are currently putting out through the system. However, the Health Department does not view that with the same degree of positive perception as they would a contract for additional capacity with the City. We are going through every unit process in the water supply, treatment and pumping system and documenting to the Health Department the reasons why they should feel equal comfort with our system and we are telling them why they should, why we are going to have that upgraded capacity available to us even if the largest unit that we have is out of service for maintenance or repair, we can still meet that operating capacity. We will have sufficient emergency supply capabilities in conformance with state and federal law. Those are the two items they require of any water system. If we can provide that with our upgraded plant, there is no logical reason why they shouldn't get as much comfort from that as they would the contract.

Mr. Lauritzen asked what happens if we don't provide them with this comfort feeling they are looking for?

Mr. McKune responded I can't speak for them but they will continue I think to view the contract with the City as the primary goal in their mind. They want to see that contract in existence because they view that as a guarantee of additional capacity. It is not a guarantee even though they may have signed a contract because if lightning can strike at our plant and disable one of the treatment units, the same thing can happen at the City. The City has a back-up unit. We, too, have back-up units and that is the point I am trying to make with the Health Department.

Mr. Grossjung stated if this process doesn't work and the City does not sign the contract what is our alternative? Does that impact platting and so forth?

Mr. McKune responded I don't think so. We have and the head of the Health Department will acknowledge that we have the ability to treat the water. We are not in danger of putting out water that is inadequately treated. That is not a bother to him. What is a bother to the Health Department is that as we go forward in the absence of rain what if lightning strikes and suddenly we can't produce the water that we are currently producing, we have no guarantee capacity. Now we have at least step one. We have the emergency interconnect agreement and if we were to be struck by lightning and lose a well, the City would open that interconnect and we would be receiving water but that is only on an emergency basis.

Mr. Grossjung asked are there any other Districts we could approach that would have excess capacity such as Sunshine or C.S.I.D.?

Ms. Archer responded the Sunshine District which is immediately south of North Springs is the City of Coral Springs utility. Further south is the C.S.I.D. utility which means if you wanted to send water to North springs we would have to enter into an agreement with the City to allow us to send it through their line up to North Springs which is sort of the same thing.

Mr. Grossjung asked wouldn't the City consider that to be a pass through and not their water?

Ms. Archer responded they would have to approve it and they would probably charge us for using their lines. It is an option. One of the other things that we looked at is we do have an interconnect to the south of C.S.I.D. with Tamarac so that even if C.S.I.D. ran out of water and we needed to buy it from Tamarac we could flow it through the C.S.I.D. system, through the City system up to North Springs, but Tamarac doesn't have a lot of excess capacity either to sell us. We have the emergency interconnect but we need additional back-up. In theory if we took a million gallons of water out of the City system and put it into North Springs, we could put a million gallons of water out of the C.S.I.D. system into the City system to replace it and then work it out between the two Districts.

Mr. Grossjung stated we should exhaust the potential with the City first before we go for the other alternatives.

Ms. Archer stated the City alternative is a better alternative and I think that is what the County wants. I think if we can show the County that we have back-up plans and equipment and availability of water with a sister district to the south, I think we should be able to give them some level of comfort.

Mr. McKune stated we just did a request to the Health Department which they honored for 8 lots within one development. The Health Department up until that time had viewed that development as representing 116 new connections to the system. We requested by letter 8 of those 116 that they would expect to have c.o.'d through the month of October. That sat much better with the Health Department than just a single block of 116. That is how we are proceeding on a daily basis. We have worked very closely with the Developer. We have a projection of the amount of C.O.'s to be expected through December of this year and we have used those projections along with the projections from the other developers and come up with a total flow requirement for the N.S.I.D. system. We gave these to the Health Department and they have seen that and agreed that the upgraded capacity of the N.S.I.D. system will be in excess of the total N.S.I.D. need for that year.

Mr. Grossjung was the objection of the Commissioners based on litigation that is going on now and their perception of the main property being benefited by this?

Mr. Lyles responded litigation was not mentioned specifically but the primary beneficiary of the water being a developer as opposed to this District was very specifically discussed. They were in a public meeting on the record, I think they were somewhat careful in their comments in that regard but they made it very clear they were not happy about this. They were not ready to agree to it and in fact at that moment indicated they were not going to agree to it. I think the staff is recommending that we at least explore how this can best be done for the public which we are all supposed to be serving and we don't know what the outcome is going to be. The reason I wanted to make sure I clarified all of this today is because I think we told you at the last meeting that we have these two agreements that we wanted you to approve them and we anticipated action by the City at their next meeting which was before this meeting. They only agendad the emergency agreement and we didn't anticipate discussion of the other agreement but the Commissioners brought it up, not the staff, not the memo, not the background information. It was debated and I think I would say they are grudgingly letting this engineering preview take place to see about increasing their permit. I will also tell you that I anticipate they will come back to the District and expect to be reimbursed for any costs they incur for engineers to increase their permit for what they perceive to be the District's benefit. I am sure that is going to come back at some point and we will deal with that when that happens. The ultimate downside if everything goes bad is that the Health Department says you don't have enough water and c.o.'s don't get issued and development stops and the District gets criticized for not adequately planning for the future and everybody is going to forget what it took to get permits approved and all of that. I am sure your engineers as well as your legal and administrative staff all consider this a top priority. Hopefully, we will have better news for you at the next meeting.

Mr. Goenaga stated it is painfully obvious to me from having seen the tape that the City is really not interested in approving this. I am concerned and I would like to suggest that we pursue the suggestion that the City be a conduit. I don't know what their motivation is but that would be a very hard thing for them to reject If it is just water flowing through their system. They should have the best interest of the public at hand. There are people living in North Springs that they represent. In the event that the bulk water agreement with the City doesn't fly, I would like to have a plan B or plan C ready because that would be difficult for them to deny.

Ms. Archer stated we will pursue that as things progress. It might be appropriate to set up a meeting with the group we met with originally to see where things are. If we are asking for 2 mgd for two years and staff has a feeling that is a little too much for too long, maybe we back it down to 1.5 mgd for 18 months. Maybe they will feel better about that, see what makes them more comfortable. In addition, we can offer to pay them a reservation capacity fee and add money to their revenues. These are a few alternatives that we can make the agreement a little more attractive for the City to think about. It might be time to meet with staff and see what they think.

Mr. Grossjung stated at least get it on the C.S.I.D. agenda for them to conceptually agree and to see if they have excess capacity to cover our needs.

Ms. Archer stated we will take a look at that to see if that is a possibility.

Mr. McKune stated every positive step that we take makes the Health Department feel that much better. As indicated earlier they are getting people coming to them demanding c.o.'s and there are other people saying, shut them down. He is trying to get through this the best he can. We need to give him positive things to grab onto.

Ms. Hitchcock stated it appears that the City is using all of the capacity of the consumptive use permit so it would be in their best interest to increase that anyway so that they have adequate reserves. I bring that up so if they start to point fingers at N.S.I.D. that they are having to go through this effort strictly because of your request, that doesn't appear to be true. I think if they were prudent in their planning for water demands, this is something they should be doing now anyway.

Mr. McKune stated you need to keep in mind when you talk about the allowable pumping in the consumptive use permit, you have to demonstrate the need for the amount of gallons you are requesting. You just can't ask for more because you want to have a bigger cushion. You have to demonstrate on an annual basis how many units you are going to have constructed and what the flows are going to have to be to serve those units. If the City can't demonstrate additional units, then they can't justify a higher number. Adding us to their base obviously justifies a larger number.

Mr. Grossjung asked is this the same City that wanted to bring all of the Districts under their control?

Ms. Hitchcock stated that is why I raise it because I would be very careful about the spin they are trying to put on your situation. It may be somewhat self serving.

B. Engineer

There not being any, the next item followed.

C. Manager

Ms. Archer stated I have an item regarding the Parkland Isles Special Assessment Bonds that we issued in 1997 to do the Parkland Isles Improvements. We are nearing completion of the project and we identified early on that we have an extra approximate $2.3 million of surplus proceeds from that bond issue. We are asking the Board to authorize us to transfer those excess funds into the redemption account so that we can call bonds with it. As soon as we do that we stop paying interest on it, it lowers the prepayments that are required to come from each lot. We have conservative numbers that we have identified that we are going to set aside to complete the construction of the project. We are very comfortable that the $2,356,259 is the amount of surplus funds that we can transfer to redeem bonds with.

Mr. Grossjung asked are you comfortable with the contingency?

Ms. Archer responded I am comfortable with the contingency and as a back-up I have asked WCI to provide me with a letter that indicates that for any unforeseen reason there is an additional expense that has to be incurred by the District to complete one of these projects that they will pay for that at their cost.

On MOTION by Mr. Grossjung seconded by Mr. Lauritzen with all in favor the $2,356,259 of the Parkland Isles bond proceeds were declared as surplus funds and staff was authorized to transfer same to the redemption account and to call bonds when possible, subject to Mr. Lyles review of the letter forthcoming from WCI as outlined above.

NINTH ORDER OF BUSINESS Supervisor's Requests And Audience Comments

Mr. Lauritzen stated I will be on vacation in July and August. I will be available by phone if need by in August but I understand Mr. Grossjung will be here in July. If August is a problem I can be available by phone.

TENTH ORDER OF BUSINESS Approval of Invoices and Requisitions

On MOTION by Mr. Lauritzen seconded by Mr. Grossjung with all in favor the invoices and requisitions were approved.

On MOTION by Mr. Lauritzen seconded by Mr. Grossjung with all in favor the meeting adjourned at 5:20 p.m.

Thomas L. Grossjung William Bell

Secretary President