MINUTES OF THE MEETING

OF THE PORT OF THE ISLANDS

COMMUNITY IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the Port of the Islands Community Improvement District was held Friday, April 16, 2004 at 10:00 a.m. at the Egret Room, 25000 Tamiami Trail, Naples, Florida.

Present and constituting a quorum were:

Richard Gatti Chairman

Ted Bissell Supervisor

Richard Burgeson Supervisor

John Robinson Supervisor

Also present were:

James DeCocq District Manager

Dan Cox Attorney (by phone)

Ron Benson Engineer

Tim Stephens Utilities Director

Tom Marcella Assistant Utilities Director

Numerous Residents

FIRST ORDER OF BUSINESS Roll Call

Mr. Gatti called the meeting to order and James DeCocq called the roll. Commissioner Colletta, a good deal of the public staff, the fire department representatives and the County Manager will be here. The Commissioner will arrive about 11:00. We will conduct the C.I.D. business and then proceed with other business on that basis.

SECOND ORDER OF BUSINESS Approval of the Minutes of the March 19, 2004 Meeting

Mr. Gatti stated that each member of the Board had received a copy of the minutes of the March 19, 2004 meetings and requested any additions, corrections or deletions.

On MOTION by Mr. Burgeson seconded by Mr. Bissell with all in favor the minutes of the March 19, 2004 meetings were approved as amended.

THIRD ORDER OF BUSINESS Discussion of Recommended Rate Adjustments to Fund First Year of Capital Improvement Program

Mr. Gatti stated for the benefit of the audience, anything we do here affects the whole community. If there are problems we want to know about it so we can fix it. This agenda item is related to the capital improvement program.

Some of the infrastructure in the community has been here for quite a while. A lot of the sewer, water and roadway systems are beginning to deteriorate and we need to take steps to repair them. We need funds to do that. The one source we have is the revenue from sewer and water. This is what we will discuss to raise those rates to accommodate the capital improvement program.

The engineer has been with the District for many years and has done annual studies to determine our infrastructure needs. We are looking at those capital programs that they recommended over years.

We have discussed this rate increase and I do not know that we are prepared to move on that today.

Mr. Bissell stated we still have some work on those numbers yet. Mr. Cox gave us this March 16, 2004 letter on the alternative of collecting assessments.

Mr. DeCocq stated Mr. Wrathell briefed me and I have read this over. I am James DeCocq with Severn Trent, your contract District management. I am not yet fully up to date on everything yet, so I appreciate your patience.

I looked at this and I sat in on a meeting a couple of months ago where you discussed this. You do have some infrastructure issues that you need to address. The Board has analyzed all the issues we compiled and said there are some that are required and some that are extra items to be addressed down the road when funds are available. These are not safety health, or environmental issue.

We have broken those items out and calculated how much money we need to make these things happen.

Mr. Gatti stated we were talking about $300,000 a year.

Mr. DeCocq stated we have taken that money and looked at two ways to do this. We want a general, guaranteed amount of assessments as opposed to user fees. The idea is that you have a sewer standby fee and assessment. Everybody pays a set rate per year, per ERC, which is equivalent residential connection.

We have increased that rate to approximately $378.77 annually. That will guarantee you about half of what you need according to our calculations. The other half will come into your standard assessment. The thought process of using the standby fee is that those funds are generated to help with those specific types of issues. This is versus doing a user fee.

With a user fee, if people chose to use less water, then you would have "X" amount less of funds to do the necessary improvements on a per annum basis.

Mr. Gatti asked can we back up a moment? Did you say $378 per year?

Mr. DeCocq stated I'm sorry, that is the current rate. The proposed new rate is $542. The increase is approximately $163.73.

Mr. Gatti asked that is per year, per ERC?

Mr. Bissell stated I have a problem with that.

Mr. Gatti stated we will get into that.

Mr. Bissell asked where did this $378 come from?

Mr. Gatti responded that is the existing.

Mr. Bissell stated that is not what it says in the last audit.

Mr. DeCocq stated I will look into that to verify the numbers. There was a number of $309 put in your general assessment according to your audit last year. I see $379 here. This seems to be a scrivener's error. Mr. Wrathell drew these numbers directly from your assessment rolls.

Mr. Gatti stated to make it easier, if we talk in proximity within a reasonable range we do not have to be exact this morning. We will get the concept established and continue from there.

Mr. DeCocq stated you will have verified numbers at the next meeting.

Mr. Gatti stated we are going from $370 per year to about $550 per year, which is the proposed.

Mr. DeCocq stated your current number of ERC's is 1,027.9 and you are going to adjust those down to about 884.9 because of the sale of the trailer property. That is probably going to be purchased by the tax appraiser and that would come off of your rolls. Part of the other issue is now you have less people paying for more.

This is related to your financial crisis situation. There are monies in arrears and the burden to take up that slack unfortunately falls onto the general populous.

Mr. Gatti asked that goes to how many?

Mr. DeCocq responded that goes down to 884, so we have fewer units to raise that extra money. We have a current charge of $378.77 with a current number of ERC's of 1,027.9. That gives you gross revenues of approximately $389,337 with net revenues of $365,997. The new proposed gross water and sewer standby fee is $542. You have the adjusted assessment units of 884, which would give you a gross revenue of $480,058 and net revenue of $451,254, for additional revenue of $85,000 a year.

That gets us to the number we are looking for. According to Mr. Wrathell, you were looking for $170,000. This is to generate approximately $170,00 a year for your capital improvement program.

Mr. Gatti asked so that gets us halfway there.

Mr. Benson stated part of the reason it was only generating $170,000 is that there is already money in the budget of $95,000 for utility renewal and replacement and $30,000 for road replacement, assuming you collect your revenue.

Mr. DeCocq stated that is reflected in the minutes and is exactly on with what was said at the last meeting.

Mr. Gatti stated now we are proposing to set that aside each year. We have never used it because we have never had it. Has anything changed?

Mr. DeCocq responded once we take care of the bad debt issues, that money should become available to you. If you are setting aside $135,000 a year for capital improvements and you are not spending it now, we are just using that money to just keep you afloat.

Basically, we mirror the same issue in your current general fund O & M assessments, $379.50. Your current assessment units are at 1,059. Gross revenues are $401,890. Net revenue is about $377,770.

The new proposed gross operations and maintenance assessment is up to $537. Once again you have the adjusted units down to 916 because that property's going to be sold. You then get a gross revenue of $491,000 and a net of $462,000, which gives you $84,601 or approximately a $157 increase. My understanding was the Board wanted to keep this below $400 a year and right now you're standing at about $310 roughly. We tried to keep it under that $400 yearly and still raise what we need for the program.

Mr. Gatti stated we have to rethink that upper limit. There are certain things we have to do in this capital improvement program. We have the water treatment plant improvements, some work at the wastewater treatment plant. Those are things we have to do along with the roadway system, which deteriorates exponentially. Two units are bad the one year, four units are bad the next year and sixteen units are bad the next year.

If we want to start some of these improvements what do we have to do? Where does the money come in?

Mr. Benson responded for a number of years we recommended this $135,000 a year, which has not been spent on capital project. That is the reason we have not spend double that to catch up. The minimum would probably be to at least do what we have identified in the past as the level of expenditure.

Mr. Bissell stated you have two proposals here for collecting this money. If we went with the County, putting it on the tax roll, what percentage would they get of this total?

Mr. Cox responded I believe we have an agreement with the tax collector that they can get up to three percent. I am not sure what they actually charge you.

Mr. Bissell asked which one would you recommend

Mr. Cox responded they both have their advantages and disadvantages. The advantage to putting it on the roll is that the tax collector has the certificate sales mechanism for insuring we collect our money. In other words if our assessments were not paid, then we can get our money a bit later on in the process when the tax certificates are sold on the property.

We have the properties north of the road where tax certificates are not selling right now. That is kind of built into the formula of discounting the number of assessment units and accounting for the nonpayment of both.

It is possible that we are going to have those properties straightened out by the end of this budget year and should be able to count on full payment of those assessments, hopefully starting with the next budget cycle. The disadvantage is that you have the property appraiser and tax collector's fees we are contractually obligated to pay.

The other method is to directly assess the property owners instead of putting it on the tax roll. This has advantages and disadvantages. The advantage is that we do not have to pay the tax collector. We would also get our money faster, depending on when we adopted the assessments. If we do not get this ironed out before the end of this budget year, as we adopt the next budget cycle, we would not be able to put it on the tax roll. If we can get this done in January or February, then we can direct assess that.

The disadvantage is if someone does not pay that direct assessment we have to go in and establish a lien against the property and go through foreclosure as opposed to relying on the tax certificate sales process. It is potentially going to be more expensive legal fees to enforce against the properties that do not pay than it would be to pay the tax collector their percentage of the assessments to put it on roll as the other mechanism for collection.

Mr. Gatti statement I do not think there is any question that we have to put this on the roll. There are too many “ifs” on the direct assessment. Our likelihood of getting all of that money is close to none.

When we put it on the tax roll we do not have to be involved in anything. Three percent is nowhere near the potential loss we risk with direct assessment.

Mr. Cox stated there is one other advantage to putting it on roll. If we decide we want to try to find a financing source to start some of these improvements, your lenders are typically more comfortable with the revenues being generated through the on roll assessment through the tax collector. They know this mechanism for collection is more certain. That is another aspect we need to think about, whether we may want to do some additional financing to pledge these revenues for repayment.

Mr. Gatti stated we can dissect this one piece at a time. Is there any question in anybody's mind that we should put this on the tax roll?

Mr. Bissell responded no.

Mr. Gatti stated that is set. We will proceed by putting it on the tax roll.

On MOTION by Mr. Bissell seconded by Mr. Robinson with all in favor collection of revenues through the direction assessment method was approved.

Mr. Gatti asked what is the next step?

Mr. Cox responded we have to hold a series of public hearings on these assessments. Since this is an assessment that has not been levied before we will have to amend the agreements with the tax collector to get these on the tax roll. We can start that process for you to have a proposal for next month and to have the agreement in place.

We can hold the public hearings in conjunction with our budget hearings in May, June and July and look for finalizing at the August meeting when we adopt our next fiscal year budget.

Mr. Gatti asked when does that give us money?

Mr. Cox responded the money that you levy to this fiscal year's budget should be available November 1st and becomes delinquent April 1st. The difference between gross revenues and net revenues includes the discount that people can receive by paying their assessments and taxes in November or December. You receive a three- percent discount if you pay in November, a two percent if you pay in December and one in January. The full amount is due in February and then we begin to assess a penalty each month following that.

You should receive the bulk of your money between November and December. That is usually the way it works. You will have more monies trickle in during January through March. In general, money beyond that point you will not collect until the tax certificate sells around June 15th or so.

Mr. Gatti asked what action do you need from the Board on this?

Mr. Cox responded we have direction from the Board to move forward to include these in your budget and schedule the additional public hearings in conjunction with the budget. Is the manager comfortable with that?

Mr. DeCocq responded I am comfortable with it. The only question then becomes what sort of assessments do we want to do?

Mr. Gatti stated I do not understand.

Mr. DeCocq stated as far as the amounts we have here. That is what I need to know.

Mr. Gatti asked what else?

Mr. DeCocq responded if you want to split this between your standby fee and your general O & M. I will include the caveat that these numbers are today's numbers if we do not change anything in O & M. There may be increases in standard O & M that would drive your overall cost up a bit if you decided to do some other projects or something happened that Mr. Stephens needed money for in the budgeting process.

We feel comfortable with the standby numbers, but the O & M can change depending on how you want to design your budget.

Mr. Bissell stated we cannot do anything yet anyway. What about if we finalize this at the next meeting and I can work with Mr. Cullis and come back with definite figures.

Mr. Gatti asked do we need a motion, rather than verbal direction on this?

Mr. Cox responded we will prepare a resolution for your adoption at the next meeting that will begin the process and there is plenty of time once we start it.

Mr. Gatti stated as soon as Commissioner comes in at 11:00, we will proceed with you folks, if that is all right. You have action on that and I assume everyone is comfortable. We are going to review the numbers and proceed on that basis.

Mr. DeCocq asked if the numbers are accurate are you comfortable with this or do you think I need to go in any other direction? We are collecting only what we feel is needed to get the absolutes done.

Mr. Gatti stated Mr. Bissell has monitored this pretty closely. He does a great job for us. We will let him run with his discretion and if at some point you need the Board's involvement, we will step in.

Mr. Bissell stated that is fine. Do we want to move on this if the figures are correct?

Mr. DeCocq stated that would give me a comfort level so I can start working on the budget if the numbers are good.

On MOTION by Mr. Bissell seconded by Mr. Robinson with all in favor the proposed assessment increases were adopted pending confirmation of numbers and/or any necessary adjustments at the May meeting.

Mr. Gatti stated for the new faces in the audience, an ERC is an equivalent residential connection. My single-family home is one single-family connection. If you live in a condominium the rationale is that you use less water and sewage than a single-family home, so you pay eight-tenths of an ERC.

If you live in an RV unit you pay four-tenths of an ERC. Mr. Burgeson owns a lot of units and he pays a lot of units. The hotel has sixty.

Mr. Burgeson stated it has 84.

Mr. Gatti stated for every dollar we put in the hotel puts 84.

FOURTH ORDER OF BUSINESS Consideration of Legal Agreement with Daniel H. Cox

Mr. Gatti asked would you like to get into your legal agreement, Mr. Cox?

Mr. Cox responded we just need to approve it.

Mr. Bissell asked am I correct that, if you do research for us and we pay you for that we do not, in the future, have access to that? Do you keep that yourself?

Mr. Cox responded that becomes the public record of the Board. As far as reuse of documents and research and those things, I am not representing to you that anything I have prepared for a specific purpose is suitable for any other similar purpose that you may do.

For instance, if I prepare a deed for you to sell something and you later decide to sell something to someone else. I am not saying that deed would be suitable if you simply change the name.

Mr. Gatti stated anything you or the engineer does becomes the property of the C.I.D.

Mr. Bissell stated if you decided to drop us as a client, you would turn over any records that we request.

Mr. Cox responded I would turn over everything I have that is related to the District.

On MOTION by Mr. Bissell seconded by Mr. Burgeson with all in favor the legal agreement with Mr. Cox was adopted.

FIFTH ORDER OF BUSINESS Consideration of Extreme Divers Inc. Proposal

Mr. Gatti stated Mr. Stephens will bring us up to date on the Extreme Divers proposal.

Mr. Stephens stated the intake for the irrigation station in the river is covered three-quarters over with silt. The diver wants to dredge out all around it and expose it with no mud or silt around it and then clean out the intake pipe and the clear well where the water goes in. That has silt also.

For this fee, that is what he will do. Once he sees what is there he would like to make another proposal to put a ninety or forty-five degree pipe on there, which should be sufficient. He would run it up a couple of feet off of the bottom so this does not happen again.

Mr. Gatti stated we do not have enough information. We will start to get less and less water in that canal because of all the changes going on. Has that been taken into consideration?

Mr. Benson responded I do not think anyone knows exactly what is going to happen once they start damming up some of the areas. In some regards it will probably reduce the flow part of the year and may increase it part of the year. We are not sure. I do not think that impacts us.

Mr. Gatti asked are you okay with this proposal?

Mr. Bissell responded yes. They want $2,000 to do the dredging and the cleaning; is that right?

Mr. Stephens responded yes.

Mr. Bissell stated they will submit a proposal to put the elbow on.

On MOTION by Mr. Bissell seconded by Mr. Burgeson with all in favor Mr. Stephens was authorized to hire Extreme Divers Inc. for a fee of $2,000.

Mr. Bissell asked would you have the cost proposal for the ninety-degree elbow for us by the next meeting?

Mr. Stephens responded I hope to.

Mr. Gatti stated this concerns the irrigation. The irrigation is from the potable water and from the river and the canal. Soon we will be using the reclamation water from the treatment plant if we get that hooked up. We will have to address that pretty quickly. We are still waiting for some EPA approvals on that.

Mr. Benson stated no I talked to them.

SIXTH ORDER OF BUSINESS Staff Reports

A. Attorney

Mr. Cox stated we have a meeting scheduled with the Collier County Code Enforcement. A couple of months ago they contacted us about our signs and requested that we bring them into conformance. I have a meeting with them on April 29th for what is necessary to bring them into code.

Mr. Gatti asked what signs?

Mr. Cox responded all of them. There are signs on Route 41 that say Port of the Islands.

Mr. Gatti asked does that include the big wall signs we have out there?

Mr. Cox responded that is correct. Then there are the entrances to the neighborhood. They were just never permitted. I have to prepare the legal descriptions to obtain the appropriate easements and then obtain the approval.

We need to have a committee in the community prepare some sort of a design that they would like to have for these signs in order to unify the sign plan.

Mr. Gatti asked that is entry signs, streets signs and all the rest of the signs throughout the entire community, right?

Mr. Cox responded right, but the only signs we need be concerned about as far as the County, are the ones on Route 41. You do not have to worry about your internal signs.

Mr. Gatti stated we do need volunteers from the community if you are so inclined. We are trying to accomplish symmetry throughout the community. We could use three or four people to assist with this.

Mr. Cox stated we have also discussed meeting with the County to discuss additional testing that will be required for irrigation purposes. That is in the works. I hope to meet with the County manager on that by the 29th or the thirtieth. We want to put that into effect as soon as possible. I will be attending the Board meeting in person next month and for the rest of the budget year I believe I can call in.

B. Engineer

Mr. Benson stated my first item is in response to a question last month regarding the engineering agreement dating back to 1991.

Mr. Gatti stated if you do not mind, we can set that aside and you and Mr. Bissell and myself can work on that to get the Board up to speed. That will take a bit of discussion.

Mr. Benson stated it could. You mentioned the permit for the wastewater treatment plant, which allows reclaimed water treatment for irrigation. We received that permit. It was issued on March 30, 2004. We have been expecting this for quite a while. The permit is basically what we expected. There are a couple of items we need today. They are both related items that have been in our engineer's report as well in our CIP program.

Mr. Gatti stated for people in the audience, this relates to the wastewater treatment plant and using the cleaned water for irrigation purposes. We received a chunk of money from the South Florida Water Management District to do this. We have implement part of it and are now in the final strokes of hooking up the plant.

Mr. Benson stated there are a few items we have to do under this permit. They were projects WW12 and WW4 on the capital improvement plan. One of them was to abandon a groundwater monitoring well that has been out here for many years and was damaged. That has to be abandoned according to DEP rules, within thirty days of the issuance of this permit.

We have to install three new groundwater-monitoring wells within ninety days of the issuance of this permit. These were all planned. Now that it is in writing, we have to do it. I have some proposals here. The work required is to drill these wells. Once they have been drilled there is a completion report that has to be signed by a professional engineer or geologist. It must be surveyed after the well is installed for elevation of the top of the casing and then proper reports and documentation are sent to the State.

I obtained a price from Water Resource Solutions who works with us for Collier County on similar work. That is the first of the two packages. The proposal is for $12,950. I have also provided you with a proposal from our firm for the supplemental agreement under our contract for $1,500 for a total of $14,450. In order to try to get a competitive price I went to a local company here in Naples. Naples Well Drilling also does business as D & G Soil Test.

They submitted us a proposal for part of that work for $4,500. Sanders Laboratory, who does the monitoring of your wells currently, gave me a proposal for part of the work for $5,823. The amount of work that our firm would have to do increases though, because we would have to prepare the report and some other things that Water Resource Solutions would have done. Our cost is estimated at $2,500, bringing the total to $13,073. We need to complete part of this work within thirty days and the rest within ninety days.

If possible, we really should approve either option today.

Mr. Gatti asked Sanders Laboratory has been working for us for a couple of years now. Are you happy with them?

Mr. Bissell asked if we have the County do the testing would this be different?

Mr. Benson responded no, the County does not do this type of testing. When the County has us to do this work, which we do on a regular basis whenever they need it, we use Water Resource Solutions. That is who the County uses for geology. I got you a competitive price anyway.

Mr. Bissell asked are those set fees? You will not be billing us for anything else on this project, correct?

Mr. Benson responded we will be billing you for actual hours spent with a not-to-exceed amount as presented. It may be less.

Mr. Gatti stated we have about $200,000 tied up in this and are not operating, so this is very necessary.

Mr. Benson responded it is in your permit. You must do this. We have budgeted $15,000.

On MOTION by Mr. Bissell seconded by Mr. Burgeson with all in favor the proposal for monitoring wells in the amount of $13,073 as presented by the District engineer was approved.

Mr. Benson stated regarding the easements we prepared the legal descriptions for a couple of months ago, some of them were for monitoring wells; have we received those back from the owner? We cannot drill them until we receive the easements.

Mr. Cox responded we have to go to the court. I will get that set for hearing as soon as I can.

Mr. DeCocq asked is there anything else you need to do before we are operating on reclaimed water?

Mr. Benson responded yes, and I will cover that next. On the permit under schedules is recycle pump, replace the south pump within thirty days of permit issuance. That is a pump we had in the annual report for a few years. It is in the CIP as WW-4, estimated at $15,000. I believe you can buy the replacement pump for less than that. We bought some other new pumps recently.

We recommend a company who sells those pumps for that manufacturer that will match what we are now using. We can get a price from that company to match the like kind. I am not sure there are really that many options.

Mr. Gatti asked what about installation?

Mr. Stephens responded we put the other one in, but I am not sure we can do it in that time frame.

Mr. Benson stated I have a suggestion there. We have Kyle Construction, who did the work at the wastewater plant for the reuse system. You approved an addition to the allowance that was in their contract for $4,000 a few months ago. We approved a payment of $2,500 approximately and there is some money left. We could hire them to do it if you increase that amount a bit. They have to come out for one other item.

We were waiting for this permit to put the last pipe in. The DEP said we could do it as long as we did not connect. The contractor has to come out and make the tie-in at those last couple of places and he may agree to install those pumps for a reasonable price. This could be done by increasing the contracting allowance.

Mr. Gatti asked can you give us a fair figure?

Mr. Benson responded $1,500 seems reasonable. I have to ask them.

Mr. Bissell asked what is this for?

Mr. Benson responded to install the pumps.

Mr. Bissell asked these other things he is doing are within the original contract, right?

Mr. Benson responded correct, there may be a valve or something we might buy.

Mr. Gatti asked are we talking about $3,000?

Mr. Benson responded if you increase that contract another $2,000 or so we might be able to do it.

Mr. Gatti stated I suggest we go with it.

Mr. Bissell stated I agree, as long as they honor their original contract.

On MOTION by Mr. Bissell seconded by Mr. Burgeson the purchase of the replacement pump and increase of the existing contract with Kyle Construction to perform the installation was approved.

C. Manager

There not being any, the next item followed.

D. Field Manager

Mr. Gatti asked can you tell us about the low pressure we experienced over the last month or so?

Mr. Stephens state we bought a new valve to let the water in from the storage tank into the clear well where the pumps get their water. After it happened a couple of times we figured it out. It was the ball valves that control the water coming in that were set too close together. It slipped.

Mr. Gatti asked are we okay now?

Mr. Stephens responded we are okay now.

Mr. Gatti asked where are you on the other pump or motor? Are we okay there?

Mr. Stephen responded we have several that we need. We ordered a tin horse jockey pump for the irrigation station. It is a tin horse jockey pump. We have one pump at the water plant being rebuilt.

Mr. Gatti asked is that in our capital improvements plan, Ron?

Mr. Benson responded yes, we have pumps at the water plant.

Mr. Gatti stated we aim to have the residents understand all the things we deal with. This stuff does not just happen. People like Mr. Stephens are behind this and handles all of this.

Mr. Cox responded I am going to hang up.

SEVENTH ORDER OF BUSINESS Supervisor's Requests and Audience Comments

There not being any, the next item followed.

SEVENTH ORDER OF BUSINESS Approval of Check Register

Mr. Gatti stated that each Board member received a copy of the check register and requested any comments.

Mr. Bissell stated I recommend approval.

On MOTION by Mr. Bissell seconded by Mr. Robinson with all in favor the check registers were approved.

EIGHTH ORDER OF BUSINESS Adjournment

On MOTION by Mr. Burgeson seconded by Mr. Bissell with all in favor the meeting adjourned at 11:00 a.m.

Secretary / Assistant Secretary Chairman / Vice Chairman