MINUTES OF THE MEETING
OF THE PORT OF THE
COMMUNITY IMPROVEMENT DISTRICT
The regular meeting of the Board of Supervisors of the Port of the
Islands Community Improvement District was held
Present and constituting a quorum
were:
Richard Gatti Chairman
Ted Bissell Assistant
Secretary
John Robinson Supervisor
Also present were:
Craig Wrathell District
Manager
Dan Cox Attorney (By Telephone)
Ron Benson Engineer
Tim Stephens Utilities Director
Tom Marcella Assistant Utilities
Director
Several Residents
FIRST
ORDER OF BUSINESS Roll
Call
Mr. Gatti called the meeting to order and
Mr. Wrathell called the roll.
SECOND ORDER OF BUSINESS Approval
of the Minutes of the
Mr. Gatti
stated that each member of the Board had received a copy of the minutes of the
Mr. Bissell stated my only correction
is what Mr. Benson said on Page 4, on the 2nd line from the bottom in Paragraph
2, the words, induce should be changed to reduce.
Mr. Benson stated it seemed to
me that some of the comments later in the discussion that were attributed to
Mr. Robinson were probably Mr. Cook. If
it is okay, I will send Mr. Wrathell a markup.
Mr. Gatti
stated that would be great.
On MOTION by Mr. Bissell seconded by Mr. Robinson
with all in favor the minutes of the
THIRD ORDER OF BUSINESS Designation
of District Staff to Receive Car Allowance in Accordance with Newly Adopted
Administrative Purchasing Policy
Mr. Gatti stated I believe Mr.
Robinson has the most information with regard to the new car allowance for the
staff.
Mr. Wrathell stated the purchasing policy that we have
been drafting over the last several months provides for a car allowance. As part of that there is a section that
basically provides that the Board designates who is eligible to receive those
car allowances. I am going under the
assumption that Mr. Stephens obviously is one of those individuals who
qualify.
You may want to discuss designating Mr. Stephens and whom
he recommends on his staff that currently utilizes cars for on-calls and such.
Mr. Gatti asked if I understand
correctly, the mechanism is already in place? We have already approved that. All we have to do is designate who would
receive that car allowance and in what circumstance.
Mr. Wrathell responded you may want to just say anyone
who is on call, but I would prefer that it was naming the individuals.
Whereupon, Mr. Burgeson
joined the meeting at this time.
Mr. Gatti stated unless you
feel otherwise Mr. Stephens will be on the list and you and Mr. Stephens can
decide who else should be on that list.
Mr. Bissell stated I do not think that Mr. Stephens or
his assistant are too happy with it.
Mr. Stephens stated it is not a good thing. You just hired this man for $40,000 with a
truck and gas and now you are going to take it away from him. He is not going to stay.
Mr. Gatti stated we are not
going to negotiate this in a public setting.
Mr. Stephens, Mr. Wrathell and Mr. Bissell
please get together and sort out something that is agreeable. We will not argue this at this time. Mr. Wrathell can come up with a
recommendation.
Mr. Wrathell stated the purchasing policy can be changed
as we go along.
Mr. Burgeson asked is there a
set way for how the other C.D.D.'s do it?
Mr. Gatti responded we have a
policy in place. If there is something
wrong with it, let them work it out rather than negotiate here and now.
Mr. Wrathell stated the purchasing policy; I do not have
any other District with this. This is
probably the first one we have done where a District has its own purchasing
policy. Mr. Bissell had expressed some
concern with regard to some financial controls.
I agreed with his points and said perhaps we could develop this
purchasing policy to provide that level of comfort. Part of that was utilization of District vehicles
and not being able to track mileage and such.
This is a component of that purchasing policy. The idea was to give a car allowance to
replace utilization of District vehicles outside of District boundaries.
Mr. Gatti stated you folks can
work that out and come back with something.
You said that was gas and a truck for District activities. That is one of the things I wanted you to
look at.
Mr. Wrathell stated we established that the District
purchasing policies would provide for that.
The vehicles are to be utilized within the District and for outside
there is a trip ticket. This was to
provide that additional. The allowance
was on top of that.
FOURTH ORDER OF BUSINESS Discussion
and Adoption of Capital Improvement Program Presented at February 20th Meeting
Mr. Gatti stated we need to
take a look at the capital improvement program.
Mr. Bissell stated I reviewed Mr. Cox's comments in the
minutes. I think in order to do a proper
job; we should have a Board workshop with Mr. Wrathell and Mr. Cox at least by
telephone, as needed. There is too much
to discuss in a short period of time.
Mr. Gatti stated we have talked
about this capital improvement program and established priorities for it. Are you saying you disagree with the
priorities?
Mr. Bissell stated Mr. Cox has three different ways that
things can be funded.
Mr. Gatti stated the funding is
another matter. We have been doing this
every time and in the meantime, nothing is being done.
Mr. Bissell stated that is my point. We need to sit down as a Board and decide
where we want to head.
Mr. Gatti stated we can do
that. Turn to your five-year capital
improvement program. There are two
approaches to this. One is items we must
have in order to operate the facilities.
It would seem to me that is the information we
need. What do we have to have?
Next is what we would like to have and what needs to be
done, but could be postponed. Then, what
do we have to have in that capital improvement program? Look at that five-year program.
Mr. Benson stated I put this list together and
prioritized them based on my discussions with Mr. Stephens. On the first page, the renewal and
replacement, the ones that have the lowest number in the priority, like the
ones and t woes. Those are things we are
really going to have to do.
Most of these projects are
ones we had had in various annual reports for many years and we keep putting
them off. If you look at the first page
in the second section, there are 22 projects.
The first and second are both items that the DEP has required us to do,
so we need to do those. These are
conditions to keeping our permits.
Three and four are related to the fire and irrigation
system regarding liability and is part of our fire protection. We need those for reliable fire
protection. As you start going down the
list in order, in one regard, they are all needed. To my understanding, I was asked to come up
with a priority, which was going to be discussed here today. If we start having money available we know
which projects we can work on this next year.
Mr. Gatti stated there are two
sources of funding, the general fund and the water and sewer fund. Do we have to keep those projects separate?
Mr. Cox responded my suggestion is you can fund these
completely separately so we do not get into a situation where we are robbing
that account to do other things.
Mr. Wrathell stated I agree with Mr. Cox. What we can do, which will result in
increases in your water and sewer rates and charges. In your general fund, my suggestion would be
for Benson to prioritize over the next one to three years and take out these renewal and replacement items and place them in our
budget as actual line items. The actual
cushion we have had as far as having that reserve, the renewal and replacement
showing in the budget, we should leave that there. We seem to be under funding that. We need to look to adjust our assessments to
be fully funding these projects moving forward into the future.
I think Mr. Cox probably will agree that we include them
as a line item to the budget to be done and look at how we need to adjust our
assessments in our water and sewer rates to make sure we can pay for that.
Mr. Gatti stated we now have
the priorities. Does anybody on the
Board disagree with the priorities?
Let's look at the general fund first.
Storm water drainage system is number one. I am very familiar with that.
Mr. Benson stated at the last meeting you approved
spending about $8,500 of that $10,000.
Mr. Gatti stated that is this
patch right out here. For the benefit of
the people in the audience, 25 years or so ago as
storm sewer systems were put in they used corrugated metal pipe. 25 years later, today, those are
corroding. That is evidenced every time
you go down the road and you get a big bump in it. There is one that Mr. Benson that is
referring to here and that is what it was.
It is all over the County. We are
talking about a total of $35,000 for storm water drainage improvements. Does anybody have a problem with that?
Mr. Bissell responded I do not think it is enough, but it
might be. What does Mr. Benson
think? We have so many of these.
Mr. Benson responded on the second page in the general
fund there is an addition $125,000 for storm water to be determined. If we start looking into storm water, we are
going to find more stuff. That is why I
put the ones that I thought were immediate as $10,000 for pipe and another
$25,000 for swale maintenance. My
original guess was we would need $160,000.
We will put $35,000 under an immediate and the rest of it in capital
improvement, which are more long-term.
Mr. Gatti asked so we have to
designate a line item in the capital budget for storm water improvements; is
that right?
Mr. Wrathell responded yes, it is.
Mr. Gatti stated we do not know
what that number should be exactly.
Let's put a piece of it in.
Mr. Wrathell stated as we are talking, this is becoming
clearer in my mind. If we can go through
these lists today, on the second page we have on the flip side those capital improvements
listed separately. We have one that is
listed as renewal and replacement and then we have some there that were talking
about deeming as specific special benefits to only certain areas of the
community, but we may want to talk to Mr. Cox.
There are a few of these, as long as we have them all
programmed in, if we are addressing storm water as part of the entire system or
going through and having a phased approach in the next three to five years of
taking these all on, this is a legal call.
I feel comfortable with programming all of that under the general fund
rather than having a special assessment sitting on the tax bill and going
through all that process.
Mr. Cox laid it out very well. You can do your on-roll assessments versus
off-roll. I think we program a lot of
these projects into the budget. We are
starting the budget process in the next month or two. We can program the hotter projects to get
going immediately that is not specifically benefiting only certain
properties. I am going to use a perfect
example. We talked about the storm water
drainage, the big issue we had. We
looked at the $125,000 project costs along the back of people's properties, Mr.
Wolsky's issue.
That situation is a little more delicate, but some of
these other projects I think we can say are a little more programmed into the
overall storm water system. I think we
can program those and include it in the general fund budget and just make them
actual expense items in the budget and then we would include that in the draft
of the budget and show you what the impact would be on the assessments in the
broader picture.
We would also have to understand that we are going to
have to bump up the budget so we plan to physically fund everything. We have always had the cushion there that we
never quite had the money to spend on these renewal and replacements capital
improvement items. I think if you folks
can identify a list of projects maybe I can get with Mr. Benson and outline what
is going to be included in this year's budget.
We can say this will cost this much money and in the future years do it
through the general fund. We could also
take as many as we can, include them in the budget and see what the impact
is. After we see what the assessment
needs to be to accomplish that we can pull some of the projects out to the next
year. That is my simple suggestion.
If we do it on the tax roll as new assessments for new
projects, we are not going to have another roll until 2005. If we bill directly we will have the same
ongoing issues with collections, giving someone a big bill directly. We will have to go through foreclosure
procedures. It is cleaner to keep this
through the tax collector. If these
projects can be justified we can program them into the general fund and water
and sewer budget and just make whatever rate adjustments we need to make it
happen.
Mr. Gatti stated in order for
us to have specific numbers for specific projects we will have to do an
engineering study. Do you agree with
that, Mr. Benson?
Mr. Benson responded I have tried to prepare something
cheap here to do that.
Mr. Gatti stated I suggest we
put aside or earmark "X" number of dollars for storm water
improvements every year and whatever comes up we try and do it that year, then
if we do not have enough money for it, we carry it into the next year.
Mr. Benson stated another possible approach is, we have tried to identify the total amount of money here
that we feel needs to be spent over the next five years. If the Board decided how much we wanted to
spend in which year, we can then take it to the next step and say, based on
operations and engineering concerns, we would say put these projects in those
years to use that money.
We have tried not to tell you how much to spend each year,
but which things are more important than others.
Mr. Gatti stated you add up
what it will take in five years, divide it by five and use that as a
target.
Mr. Benson stated it is about $1.8 million in total.
Mr. Cox stated that is what we have done for the last ten
years and we did not collect the money and the money did not get saved and was
not spent. It is critical that we
proceed under a separate assessment program.
That is my opinion.
Mr. Bissell stated I agree.
Mr. Gatti stated you are talking
about the funding, which is fine.
Mr. Benson stated I am not talking about the funding, but
the priority.
Mr. Gatti stated we are
referring to two different issues. Let
the Board identify how much they want to spend a year for the next five
years. Was it $1.8 million?
Mr. Benson responded yes, sir.
Mr. Gatti stated there is no
way we are going to come up with $300,000 a year. I suggest we put aside for storm water
facilities "X" amount of dollars that is reasonable we can target for
and we can do it as much as we can as we go along. I appreciate your point, Mr. Cox. We are not putting aside that money each
year. We need to do it, but we are not
going to come up with $300,000. That is
not going to work.
Mr. Cox stated I think you may have to.
Mr. Gatti asked we have to come
up with $300,000 a year?
Mr. Cox stated it has to be done or your assets will
begin to deteriorate. They are already
beginning to deteriorate. We have tried
to budget for some monies to have set aside.
I am afraid it has now reached the point where we really have to bit the
bullet and take the bull by the horns and run.
Mr. Wrathell stated from my perspective I am looking at
this in a bit more of a phase approach.
For this fiscal year the total assessment per unit is $379.50. We have 1,059 assessable units. If we add $200,000 worth of costs it is
pretty easy to see that that impact will be.
As part of the budget process, if you tell me we want to program in
$150,000 for storm water improvements in next year's budget, we will have to
evaluate the budget and look at increasing the assessments to more than cover
the bad debt and all these other items that we have not been funding in the
past in addition to that $150,000.
If we take that approach, that puts you in a position
where you are physically moving forward with these improvements, but you are
not killing people with trying to pay for $1.8 million for the capital
improvement plan in the immediate term.
Mr. Gatti asked does that $1.8
million include all of it, the roadway and the storm water system?
Mr. Benson responded yes, if you look at the first page,
the total was $855,000. To divide that
by 5 years, that is $170,00 a year. A few years ago in my recommendations in my
annual report, I put that we need to budget and spend $40,000 a year on roads
and we needed to spend $95,000 a year on water, sewer and irrigation.
There was a report showing how
we can up with those numbers. That is
$135,000. We have not spent that
$135,000 for the last four or five years when it was identified, so we are
behind. Now we only have to spend for
this part of it, $170,00 a year. It is not that much more than what we
originally said we should be spending, but that is probably the catch up. The second page is a separate group of projects. It is things like sidewalks and some of the
projects that we definitely need at build out of the community. The larger projects, we call capital
improvements. This is money that we have
always identified needed to be spent. It
is just a question of when.
The first part was identifying
we needed to spend that each year and we did not do it. The other is stuff that we identified we
would need to spend eventually.
Mr. Gatti
stated to go back to the numbers, in order to view your capital improvement as
you recommended we need to spend $170,000 a year.
Mr. Benson stated that is the
first page.
Mr. Gatti
asked that is $855,000.
Mr. Benson stated that is
divided by five years.
Mr. Gatti
stated that is $170,000.
Mr. Benson stated right and
that is part of the projects that were identified in my reports in the
past. If we were spending $135,000 a
year we would have been about right. The
second page is projects that have been identified in annual reports as being
needed at some point in time.
Mr. Gatti
stated with the Board's permission, we will work with the first page. $170,000 a year. Say we have 1,000 units out here that is $170
a year per unit.
Mr. Cox stated you ought to
base that on something around 800 because of the situation.
Mr. Gatti
stated 800 units comes to $200 a year. With the Board's concurrence, let's raise the
rates to cover $200 a year and get on with it.
Mr. Wrathell stated we must
keep in mind also that with the loss of units that Mr. Cox mentioned, what you
were assessing before was based upon 1,059.
You are basically increasing what your costs were for this fiscal
year. You will have a twenty-percent
increase on that.
Mr. Gatti
stated that is fine. We are working with
$170,000, 800 units and that is $200 a year per unit.
I suggest that we increase the
cost to cover that $200.
Mr. Robinson stated it is more
than that. You have the twenty-percent
increase.
Mr. Wrathell stated we are
going to have a loss of units as a result of the bankruptcy proceeding.
Mr. Cox stated you will
basically end up roughly doubling your assessments.
Mr. Gatti
asked are we talking about $400 a year?
Mr. Cox responded yes.
Mr. Gatti
stated we have to do this. I suggest we
get on with it. Mr. Bissell, you went
through some numbers the other day, talking about sewer and water.
Mr. Wrathell stated keep in
mind that a large component here is just water and sewer expense. There might be two ways.
Mr. Bissell stated $400.
Mr. Gatti
stated if we do not do this, then our community is going to begin to deteriorate
and that is not what we want. I do not
mind taking some heat for this. This
roadway is deteriorating fast. If we do
not repair the roadway, it goes up exponentially and triples the next year and
goes up nine the next year. That is the
way a road deteriorates.
Mr. Benson stated the cost of
asphalt and roadwork goes up just like gasoline prices.
Mr. Gatti
stated we are talking about $400 a year.
Are my numbers right?
Mr. Wrathell responded yes.
Mr. Cox stated those are the
right numbers if you fund it over the five-year period. The other question is do we want to try to
find some sort of short-term financing to get some of these projects done
quickly and then use that money to repay them.
Mr. Wrathell stated that is
another good option. We might be able to
find a five-year line of credit and utilize that note. We can pay down that line of credit. We can do projects immediately that will be a
special assessment.
Mr. Gatti
asked how does the Board feel about that? As a municipality we can probably borrow
money at about three percent.
Mr. Wrathell stated it is
definitely pretty cheap right now.
Mr. Cox stated most short-term
money goes for around 4.75.
Mr. Gatti
asked is that tax-free?
Mr. Cox responded yes.
Mr. Wrathell stated we might want
to consider the fact that for your present bonds, in May of this year, you do
not have to pay a premium any more to redeem the bonds. If you refinance the premium, there is no
premium. Your bonds were issued in 1990
and the redemption, when you start out there are time-frame elements that are
established in the bond covenants that basically stated it was 102 percent, so
you have to pay 102 percent on top to redeem the bonds.
At this point, if you reach
May of this year, you will require no redemption price. You may be able to get with Bank of America
and Prager, Sealy and see if we can take your
existing bonds, refinance those and maybe incorporate the capital improvements
into that. That is another possibility.
Mr. Gatti
stated I am looking for a motion or direction by the Board to staff to come up
with funding at $400 a year per unit.
How you accomplish this, we will look for your recommendation.
Mr. Wrathell stated I will
need to contact the bond underwriters and see what kind of interest is out
there. Obviously, we have the issue with
the properties on the north side versus the south side, so I do not know how
that will work out, but if I can interest one of the bond underwriters in
refinancing one of these bonds, the savings you may accrue from that could
actually pay for a great deal of these projects alone, based upon these
savings. That is something we can
investigate. This is a two-tiered
approach, which is incorporated directly into the budget in the general fund
and the water/sewer fund or look at wrapping it into the refinancing option.
Mr. Gatti
asked Mr. Cox, do you have any problems with that?
Mr. Cox responded that is an
excellent idea. We are closing a
refunding of a bond issue on March 31st and I wanted to see what the interest
rate was on that.
Mr. Gatti
stated we will let you folks work that out.
Right now we are giving you a philosophical direction of what we want to
accomplish. We want to come up with $400
a year to implement the five-year improvement program outlined by Mr. Benson.
Mr. Wrathell stated if we were
to refinance these bonds and extend the life back over another twenty or thirty
years, take these projects, wrap them into that and extend them over that life
span, you are not looking at $400 a pop.
If an analysis is run properly, you may be in the same ballpark. You may not get zinged. Instead of an immediate $400 impact on
individuals in the community, it could be $75 or $100. That is something to keep in mind as a strong
option.
Mr. Bissell stated we would be
paying interest on that money for all those years.
Mr. Wrathell stated that is a
decision for you to make.
Mr. Gatti
stated we will look for your recommendations as to how to implement what we
need to accomplish.
Mr. Burgeson
stated Mr. Benson said according to this note, the engineer recommended a
budget of $95,000 per year established for utility-related projects and $40,000
for road projects. He stated that was
never spent on that. Was that ever
collected?
Mr. Benson responded the
reason it was not spent was it was not collected.
Mr. Burgeson
stated I wanted to make sure it was not collected.
Mr. Wrathell stated as we go
through the fiscal year, the budgeted expenses for day-to-day operation, that
money gets used. Because of
delinquencies or non-payment issues the money that you budget for these capital
improvements pretty much goes unfunded because we do not have the money at the
end of the year. That is why we have not
really put any money to it. It is paid
out to running the day-to-day operations of the District. By the time we come to it, there is no money
left.
Mr. Gatti
stated I am going to break the rules a bit with the Board's permission and
accept audience comments.
Mr. Burgeson
stated if we do this now, will that money be earmarked so it cannot be used for
something else?
Mr. Wrathell responded yes, we
would have to do that. Secondly, if we
were to say we wanted to fully fund everything these last several years, our
assessment are artificially low. They
were not high enough to overcome the repairs.
When we look at your actual assessment collection we would have to
adjust your assessments to reflect non-payment.
We have to go with what is historical.
If it gets better, that is great, but we have to adjust the assessments
to allow for that and thereafter adjust the assessments to guarantee the basic
funding of these new projects as well.
Mr. Burgeson
asked when you drop to 800 is some of that compensation?
Mr. Wrathell stated that
helps. That is basically taking that
out.
Mr. Bissell stated what about
the special assessment debt bond service.
We have not done anything with that for years.
Mr. Cox stated we have been
assessing and collecting and the people who have been paying, the trustee is holding
the money for a source of funds to continue to finance the litigations. When all of this is done and the air clears,
that will straighten out on its own.
None of this and none of the assessments related to the bonds will
change.
Mr. Bissell asked what do they
mean by total bond principal and interest due annual of approximately
$750,000? The debt service reserve
balance is $12.00. The required balance
is $700,000.
Mr. Cox stated that is because
of the deficiencies in collections from the north side of the road and cost of
the litigation. It is not a reflection
of anything on the south side of the property.
It is not pertinent to this discussion of the capital service plan.
Mr. Wrathell stated when these
municipal bonds are issued in almost every instance, if it is a $7 million bond
issue; the debt service reserve is equal to or larger than you annual debt
service payment or ten percent of your total bond issue. That is where that $700,000 is. When the bonds are defaulted upon, the first
sources of revenues to pay the bondholders is the reserve fund until that is
drained down. That is why you have the
$12. The trustee will be the one that
directs payment of the bonds to the bondholder.
Mr. Gatti
stated I am going to open this up to comments on this subject only.
A resident stated I think the
thirty-year bond issue is the way to go here.
If you put a reserve on it, that would cover everything. It sounds great to me.
Mr. Gatti
asked you want to go with a thirty-year rather than twenty-year?
A resident responded yes.
Mr. Green asked what is your
interest rate that you are talking out for refunding?
Mr. Wrathell responded the
bonds that were issued in 1990 to fund the capital improvements were a $7
million bond issue with a nine- percent interest rate. That bond expires in 2010,
however we have had a problem with keeping up with debt service payment due to
non-payment.
Mr. Gatti
stated we are trying to work on reissuing those bonds under more current
interest rates. Do you have anything to
tell us on that?
Mr. Schrugel
responded I thought Mr. Cox could give us an update after contacting
Mr. Meehan.
Mr. Gatti
stated do you have anything to tell us on the reissuance,
Mr. Cox?
Mr. Cox responded I spoke with
the gentleman that Mr. Schrugel directed to call me,
gave him the information that I have and told him my understanding of the
background, so he would know the situation with the state of financial
emergency and all of that. I then asked
him to contact Mr. Wrathell for details on the retention base and when he could
redeem without the penalties mentioned earlier and so forth. That was about a week ago and I have heard no
other comments.
Mr. Wrathell stated I placed a
call to Mr. Meehan and has not yet received a call back.
Mr. Gatti
stated we are trying to renegotiate that interest rate and it would be in
everybody's best interest and we could save a lot of money.
Mr. Schrugel
asked does anybody have a ballpark idea what that new interest rate might be?
Mr. Wrathell stated I
recommend you have an underwriter sophisticated in the C.D.D. area. With our state of financial emergency, we
would have to look at most delinquent debt sitting across the way. If we could find a way to separate the
residential component which has been paying its assessments and make the
underwriter comfortable with that, we could be somewhere in the fives.
I doubt we could obtain MBI
insurance, but if we could separate it properly with all this residential,
purely a residential loan, typically they look and say if it is eighty-percent
or more owned by individual residents you could possible obtain MBI
insurance. This could reduce it
further. It is just from the marketing
perspective that the District is in a state of financial emergency. It is how they sell it and the response of
the bondholders that could really affect it.
A resident stated estimating
that a bit further to the $4 million outstanding balance, is that in the
ballpark?
Mr. Wrathell responded that is
also part of the issue we have to look at.
When you are looking at a bond issue that makes the numbers feasible,
you are usually around the $6-7 million number.
I would say that is probably low.
These bonds have real high issuances costs, meaning that the refinancing
you would have those high issuance costs and the debt service reserve
requirement. When you get all that
thrown together you have to analyze and decide if it is worth it because of all
the additional costs. That would have to
be factored in. Since there is no
redemption premium on this any more, we have to ask how much do we refinance
and do we include new projects?
Maybe with the inclusion of
new project in with that, that would get it up high enough for it to make sense
for you to refinance and issue additional bond proceeds.
A resident stated as a
follow-up or guesstimate such a savings might be taking the delinquent funds
into consideration, a dollar amount.
Mr. Wrathell stated it would
not be appropriate because I do not know what the future interest rate would
be. I think potentially if we do it
right, we could refinance this and convince the bond community that this is
something they are interested in, at least save three percent over the six if
we have that type of difference. Wrapping these projects into that I would tell you that we may be
in a position that instead of looking to increase everybody's assessment to
$400 a year, whether it is assessments and/or water and sewer rates to equate
the $400 years per unit.
We might be able to wrap it
all into one. You might be looking at
$50 to $75 dollars. It depends on
whether you mind having a twenty-year bond issue or thirty years. Depending on the length you decide to go,
that will affect the assessment, which can reduce that.
Mr. Gatti
stated for the next meeting if possible our target is to have money to
implement this capital improvement plan.
Right now we are looking at $400 a year per unit. We will aim at that and if you can come up
with a better year to accomplish this, that is fine. If it takes a twenty-year bond issue the
Board will consider that. You guys come
up with a way to do it. I have some
nods. It appears to be the Board's
concurrence that we aim for $400 and direct staff to implement the capital
improvement bond as outlined.
Mr. Burgeson
asked what would happen if you directed them to work into their budget, the
capital improvements and not put an amount, but that we want this adopted into
the budget and whatever they come up with, as long as it does not exceed $400,
we will use.
Mr. Wrathell stated you and I
are on the same wavelength. I am
probably going to take the $170,000 and put it in the budget and see what the
impact is on that. Then maybe as an
alternative I can look and say $100,000 is in the general fund, $70,000 is in
water and sewer and here is the impact.
Mr. Burgeson
stated we just want this done.
On MOTION by Mr. Burgeson
seconded by Mr. Bissell with all in favor staff was directed to incorporate
into the budget, the amounts needed for the general fund and the renewal and
replacement fund on the five-year period, not to exceed $400 per unit.
FIFTH ORDER OF
BUSINESS Staff
Reports
A. Attorney
Mr. Cox stated we are still
pending a hearing toward the end of March.
There have been no major changes in the status of any of the issues of
any of the foreclosures or the bankruptcy proceedings since the last
meeting.
Mr. Gatti
asked is a new plan being considered?
Mr. Cox responded it has not
been submitted, but I understand there may be changes to the plan.
Mr. Burgeson
asked has there been anything done on the property fronting 41 as far as
whether it is going to be sold or anything like that?
Mr. Cox asked are you
referring to Northport?
Mr. Burgeson
responded yes.
Mr. Cox stated that is still
in discussion. I was expecting to hear
back either yesterday or today. I am
hoping I will hear something this afternoon.
B. Engineer
Mr.
Benson stated to follow-up on last month's discussion, Mr. Bissell brought up
some suggestions and ideas regarding rates.
One of the things I mentioned was on the water rates that we made; in
the future you might want to consider inverted block rates. Mr. Wrathell will provide you with some
information on rates and other utilities they are using. One of the things in that information shows
what an inverted block rate is. That is
basically a water conservation-type rate whereas if you use more water, the
rate you pay per gallon increases.
As
part of our renewal of a water use permit, that is something that South Florida
Water Management District is requiring for everybody.
Mr.
Gatti stated the other piece of that is the more
water you use, the less it costs in increments of ten
or twenty. It cuts off at twenty and
then from there on it stays the same. I
am just talking about the City of
Mr.
Benson stated the sewer rate is usually flat.
It is the water rate that goes up.
There are a couple of components here.
One is it encourages conservation and potentially, the way you implement
it, that could bring in some more revenue.
You do not charge more per gall for the small user. People who conserve do not have to pay extra,
but people who do not conserve pay extra, which also brings in more revenue.
Mr.
Gatti asked where are we on that?
Mr.
Wrathell responded based upon our conversation about financing the capital
improvement component, it would be appropriate for me to come back at the next
meeting and show what the general fund would look like with those increases and
then show perspective rates that could be charged to help cover our current
costs for capital improvements we mentioned today.
Mr.
Gatti asked are you going to work with that, Mr. Bissell?
Mr.
Bissell responded yes, but I do not want it to take month after month. We are losing so much revenue by just waiting
and waiting.
Mr.
Wrathell stated I believe it is good to have a bit of a rate study tied to why
we are increasing the rates. I am saying
that I think what we are talking about here is a first step in that process. That is, we have identified some capital
improvements to include in that, which has a significant impact on your rates
and what they should be.
Mr.
Gatti stated part of the budget consideration is
going to be the rate increase that we have to implement in order to do what is
in the budget.
Mr.
Wrathell stated that is correct.
Mr.
Robinson stated I have a question for the residents who are at the hotel
because they are not metered separately.
Obviously the hotel, as a whole, will be way up here in Block 6 or Block
5. How would that be handled?
Mr.
Wrathell responded for discussion purposes, I probably would rather not budget
based upon the block scenario at the beginning.
I would rather assume we are going off one rate, then as part of this
discussion, if the Board wants to establish the block rate scenario that is
fine. I do not want to assume from a
budgeting perspective that certain customers are going to pay me certain
amounts. I would rather just have it a
flat rate and base my budget numbers upon that.
If
we do the block scenario and escalate prices for that, I would rather consider
that icing on the cake. It is
appropriate for Mr. Benson to bring this up and it warrants some discussion as
part of the rate adjustment process.
When you get the big picture solidified then we can say this is what the
rates will need to be and on top of that we can have our conservation rates.
Mr.
Gatti stated you have to do it that way because you
could not assume what all the differences will be.
Mr.
Wrathell stated exactly if we do the conservation and it is a financial boom to
the District, that is great, but I do not want to assume that.
Mr.
Benson stated regarding Mr. Robinson's question, for larger users like the
hotel or complex, they have different size blocks before the rates go up which
is equivalent generally like how many units they would have. Each ERU has a certain block. In
Those
things are usually incorporated in that structure. The only reason I mention it is if we do a
rate change, this would be the time to implement this part of it.
Mr.
Gatti stated we have to be fair to the individual
however we handle it. We will take that
into consideration.
C. Manager
Mr.
Wrathell stated I read the minutes of the last meeting and there was a question
with regard to protection from an insurance perspective. I believe Mr. Bissell asked that. You have general liability and errors and
omissions liability. The omissions
liability typically protects. If I
understand your concern it was whether the Board members could be sued for
something.
Mr.
Bissell asked is that $25,000 per occurrence, per Board member?
Mr.
Wrathell stated the errors and omissions had a $1 million limit. I am not sure what it is per occurrence, but
it indicates it is a $1 million.
Mr.
Gatti asked what is typical for someone like you?
Mr.
Benson responded Mr. Cox could answer that better than I.
Mr.
Cox responded I think it is in the area of $2 million, with $1 million for
damage.
Mr.
Gatti asked do you want to look into that a bit more?
Mr.
Bissell responded I believe Mr. Wrathell and I can discuss that on the phone.
Mr.
Wrathell stated Mr. Cox forwarded a memo with regard to an agreement. Is that appropriate for today?
Mr.
Cox responded that is up to you. We can
wait until the next meeting to give you time to
circulate it. I had trouble with
e-mailing some of the Board members.
Mr.
Gatti stated we should do that in executive session
anyway.
Mr.
Wrathell stated I do not think that an executive session is appropriate for
this.
Mr.
Cox stated the only thing you can discuss in an executive session is actual
litigation.
Mr.
Burgeson stated I did not receive an e-mail.
Mr.
Cox stated I do not have your e-mail address.
Do you have it handy?
Mr.
Wrathell stated I have extra copies here today.
Maybe we can pass it out today and discuss it at the next meeting.
Mr.
Cox responded that sounds good.
Mr.
Wrathell stated I reviewed this and it is actually very standard. The only issue is on the exhibit and the
prices. I feet that is
more than fair.
Mr.
Gatti stated Mr. Bissell has been working with Mr.
Wrathell on this. We will look for your
direction on this.
Mr.
Bissell stated as of now, I would like Mr. Cox to know I am in agreement with
your legal service fees. My opinion is
that is very fair to both of us.
Mr.
Gatti stated we will look for your direction at the
next meeting.
D. Field Manager
Mr.
Stephens stated first, I would like to introduce Mr. Marcella. He is the new water and wastewater
operator. I have a verbal quote from
Cobb Construction regarding the aerator in the river. To do that he wants $5,000. That is for the inland suction.
Mr.
Gatti asked could you obtain that in writing?
Mr.
Stephens responded yes.
Mr.
Bissell asked does that include everything?
Mr.
Stephens stated it includes sending a diver down and inspecting it. Because he did not know how to fix up a
floater, he wanted to turn it up two feet, put a 45-degree pipe on there, elbow
and then turn it up two feet to get it out of the mud.
Mr.
Bissell stated that is a lot of money for just that.
Mr.
Stephens stated if you can find someone cheaper, we will do it. The diver alone wanted $1,500 to go down
there and video the pipe, the inlet and the condition.
Mr.
Gatti stated divers are not cheap.
Mr.
Stephens stated also, it takes two divers.
They cannot dive by themselves.
Mr.
Bissell stated I thought we were talking about around $300.
Mr.
Stephens stated we will see what happens.
I just got the word yesterday and was rather shocked myself at the
$1,500.
Mr.
Gatti asked should we take quotes on this? In order to
take quotes we have to identify what we want on some plans and specs, right?
Mr.
Benson responded that is right.
Mr.
Stephens stated it is not easy to find people who do that work.
Mr.
Cox stated I know a gentleman at extreme diving. He is pretty good.
Mr.
Gatti stated we do not need to get into that
now. I do not like the idea of a verbal
quote. We do not know where we are with
that.
Mr.
Stephens stated this was just to give you an idea of the probable cost. He said he would do it for that. I can get it in writing and bring that to you
next month.
Mr.
Gatti stated the watering season is just about over
so we have some time.
Mr.
Stephens stated it is still important to get that out of the mud so we do not
get the controls muddied up.
Mr.
Gatti stated see if you can get in touch with a
couple of other outfits. I know Kyle is
a good contractor, but try and get some other people.
Mr.
Stephens stated I will see what I can come back with next month. I wanted to let you know that I did find Unifirst and cut a deal with them for the uniforms.
Mr.
Gatti are you working with
Mr. Bissell on that?
Mr.
Stephens responded we discussed that and it is pretty much set. We received our mixer that you approved. Also Mr. Marcella both need
to go to school next month. I wanted to
see if it was all right for each of us to go.
It is in
Mr.
Gatti asked you have to do this for your license,
right?
Mr.
Stephens responded yes.
Mr.
Gatti stated there is no question about that then.
Mr.
Stephens stated that is only part of it.
We still have the water; wastewater and I have mosquito control. There is a bit more schooling to you, which I
will bring to you as it comes up.
Mr.
Gatti stated Mr. Wrathell will include that in the
budget.
SIXTHTH
ORDER OF BUSINESS Supervisor's
Requests and Audience Comments
Mr.
Gatti asked Mr. Robinson, is anything happening with
the hotel?
Mr.
Robinson responded no.
Mr.
Gatti stated the property across the canal from me
there is a strip of land. That is
involved in the legal issue. Did that
piece of land show on what you folks bought?
Mr.
Burgeson responded I do not know.
Mr.
Gatti stated I would like to see this roadway
paved. It is going bad fast. If we do not pave all of it, that is fine,
but we have to at least pave the major part of it. Every year I see it getting twice as bad.
Mr.
Bissell asked were we going to wait until construction is completed or are we going
to start doing a section of it now.
Mr.
Gatti stated we have to go through the budget process
and get the money first. All I am doing
is throwing that out.
Mr.
Bissell stated there was a comment last meeting about monitoring for lead and
copper and it being an expensive process.
We had to do this in
Mr.
Stephens stated I am fixing to do that and I will put you on the list for
collection.
Mr.
Bissell stated you do not have to do that.
Mr.
Stephens stated I was going to do that so you will know what lead content you
had in your house.
Mr.
Bissell stated where I come from we have copper pipes and there was a problem
there. Down here everything is mostly
plastic.
Mr.
Benson stated you will probably not have a problem, but you have to do a number
of tests. The state has adopted their
rules from the federal.
Mr.
Gatti stated we hired a laboratory some time back
about this time last year. Are they the
ones who will do this test for us?
Mr.
Stephens responded yes, we have used them for years to do that test.
Mr.
Gatti stated I believe we approved a contract for
them last year.
Mr.
Bissell asked have you found any way for the County to take our sample, Mr. Cox?
Mr.
Cox responded I have not, but that is on my list. I have not been in one spot long enough to
get that done.
Mr.
Bissell asked do you think we can get that by next month?
Mr.
Cox responded I will do my best.
Mr.
Bissell stated it is expensive for Mr. Stephens to run up there when he can
just go into