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, September 24, 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 Vice Chairman

Richard Burgeson Assistant Secretary

John Robinson Supervisor (by phone)

Dale Lambert Supervisor

Also present were:

Mr. DeCocq District Manager

Dan Cox Attorney

Ron Benson Engineer

Tim Stephens Operations Manager

David Black (via phone) Goldstein, Zugman, Weinstein & Poole

Numerous Residents See attached list

FIRST ORDER OF BUSINESS Roll Call

Mr. Gatti called the meeting to order and Mr. DeCocq called the roll.

Whereupon, the Third Order of Business was addressed out of order.

THIRD ORDER OF BUSINESS Acceptance of the Audit Report for Fiscal Year 2003

Mr. DeCocq stated I have on the line, Mr. David Black who will field any questions you have. At the last meeting we request any questions you may have. I did not receive any, so I am assuming there is nothing specific. At this time I will ask Mr. Black to give a presentation on the audit and if you have any questions, we will address them afterward.

Mr. Gatti asked could you give us a brief overview of the audit and explain it and then the Board will ask any questions they have.

Mr. Black stated when we perform an audit we are making sure that the financial statements are not materially misstated. We determine what we feel is material based on your total revenues and your total assets. We are going to try and pick out if there are any errors in the accounting. If we should find some, we propose adjustments to the accounting people, make those adjustments and put together financial statements. In addition to that, we keep an eye out for violations of laws or bond covenants and that type of thing.

Mr. DeCocq asked can you give us a synopsis of your findings this year?

Mr. Black responded they have an unqualified report. The financial statements are not materially misstated. We have two reports in the back. One is called report on internal control and compliance. We have what we feel are material weaknesses in the system and then material compliance violations of the laws and covenants, bonds or grants or anything like that. Basically, all the reports are clean from the audit. Should I go through financial statements? I will need that in front of me.

Mr. Gatti responded I do not think that is necessary unless the Board wants to go through that detail. I do not think that is necessary. We have had an opportunity to look at the report and the Board can speak for themselves. Is there something we should be concerned with? Are there any pitfalls in what we have done or what we propose to do financially?

Mr. Black responded remember when you say what we propose to do, the audit is looking at things through September 30, 2003. We are almost to the end of another year. I have not seen your budget yet for the coming year. I think I have a plan for your budget, but all in all everyone knows the biggest problem in the District over the past years is that, several of the large landowners did not pay taxes for whatever reason.

The burden of making the revenues and carrying the opposition of the District fell on the other landowners and the other citizens of the District. Management tries to gather enough money to run the operations of the District and not have a lapse in services to the best they can. We will be having recommendations if we could think of any. It is a struggle to find the suggestions and manufacture when it is not forthcoming in some cases.

It is a difficult situation and over the last four years the management of the District and the bondholder and their attorneys and everything have made great efforts in trying to turn things around. Moving with that, it is a slow process.

Mr. Gatti asked are there any questions? Does staff have any questions?

Hearing none,

Mr. Gatti stated we need not go into further detail without having a special meeting for that. We are at the point where we need to accept the audit.

On MOTION by Mr. Lambert seconded by Mr. Bissell with all in favor the audit for Fiscal Year 2003 was accepted.

FOURTH ORDER OF BUSINESS Consideration of Invoice from Goldstein, Zugman, Weinstein & Poole, LLC for Additional Auditing Procedures

Mr. DeCocq stated if you turn to Section 4, there is an invoice for an additional $1,000 on each side; is that correct?

Mr. Black responded yes.

Mr. DeCocq asked could you explain the additional cost and time for preparing this?

Mr. Black responded before I do that I want to say that five years ago, before things started getting crazy with the tax monies and the District filings, we were doing okay with the audit and making money on it. Over the last four years the costs of doing the audits have been outrageous. It has been in excess of $20,000 to do the audit and we are billing the District in the neighborhood of $10,000 or $11,000.

We look at this as pro bono work. When we add on a little bit for out of the ordinary work, it takes a lot for us to add on anything. It is not easy for us to ask for extra money like that. The two items we felt worthy of that request were extra time spent on trying to get the money received from taxes allocated to the proper funds.

There were I believe, around seven landowners who did not pay their taxes and they got directly assessed for their debt service amount, but not for their general fund maintenance costs and their stand-by fees. Those came through the tax collector. That is a complication that we discovered two years ago. When those amounts were not paid, they were being spread through the three funds, but they should not have been into the debt service fund.

This was very complicated and we tried to teach Ms. Rutter how to properly allocate the money. We had them do our review and discovered the situation and figured out how to solve it, then we had to teach Ms. Rutter how to account for it and figure things out right. It took an inordinate amount of time to do that. We could have just fixed it, but when we start getting into the books, it is like getting into management and we cannot afford to be management because then we would be considered as auditing our own work and would lose our independence and our ability to write those opinions that attach to the financial statements.

That was one of the issues. The other issue was the bond amortization schedule, was putting the bond payments into the wrong years. We tried to get a new amortization schedule made up and that effort was refused so we had to build our own. Again, with Ms. Powers, we were telling her we needed a new amortization schedule. Here is what it should look like. We let her do it, then we reviewed it. It took us a couple of times to go back and forth. Those were the two major areas. We could have done those things ourselves, but our standards will not allow us to do that, so we taught the Severn Trent people how.

Mr. Bissell stated if you did this five years ago and then you bid this last year, why did you not bid your actual cost of what you wanted instead of coming to us now for more money? Also, last March when this audit was due, I asked our manager, Mr. Wrathell, about it being ready. He contacted your office and your office then started contacting Severn Trent for information. They had asked for no information before that time. That is what Mr. Wrathell was told along with Ms. Rutter.

Why did we not receive it on March 30th or no information was given to us that there would be a delay? There was no request for additional funds to do additional work.

Mr. Black stated when an audit approaches the end a review process goes on. A staff auditor, who is highly qualified, works on the audit and he supervises throughout the process. When we get to the end, we have a review process. Sometimes things are discovered at that time and more time is needed to get it right. That is what I do and sometimes you just look over something and everything is right and something comes to you.

That is the best explanation I can give you for that. If somebody said that we did not request any information until March, I cannot even respond to that. We are ready to go on these things in October.

Mr. Bissell stated the contract was March 30th and that was not honored and we were given no reason at that time for delay. Is there a reason for that?

Mr. Black responded no, sir.

Mr. Gatti stated I appreciate that you are on the spot. Having been there myself, I can sense what has happened. Let us talk it over and if the Board has any more questions, we will let you know.

Mr. DeCocq stated I have one more question. We have your next engagement letter here and I notice that your cost is still $11,500. Would you like us to hold this for further conversation? Do you feel comfortable in proceeding in the light of the costs in the past and what it actually takes to do the audit? How would you like me to handle the letter? I can table it for further discussion. You can reconsider and resubmit, if that is appropriate. If not, we can consider it today, if you feel no revision is necessary.

Mr. Gatti stated especially in light of the fact that you told us it costs you $20,000 to do this audit. Did I understand that correctly? Is the difference pro bono?

Mr. Black responded that is right. We have picked up the slack.

Mr. Gatti stated I do not mean to put you on the spot. I will ask the other Board members to get involved and we will get back to you, but why would you do that?

Mr. Black responded we have been doing the audit for this District since 1991. Everything was okay for most of those years. The District fell into a period of unpleasantness financially and we are basically weathering it out with all those people, the majority of the people in your District who have had to suffer through this. We feel there will come a time in a few years that things will be back to normal. This is a job where we have very busy periods of time and times when we are less busy. Some of it can be done in those less busy times. It is economically feasible for us to just take it.

Mr. Gatti asked do I understand that you put your younger people on this and there was some training involved?

Mr. Black responded the man who worked on this job is a CPA and an attorney and has been with us for thirteen. He passed the CPA and the bar exam back to back the first time. He is very qualified. We might sometimes have new people that Para-professional type work under supervision, but the main guy is the person I just described to you. He cannot be any more qualified.

Mr. Gatti stated we appreciate that and certainly appreciate your talking to us.

Mr. Lambert asked when did the audit report go out as complete from your office?

Mr. Black asked the one you have in your packet?

Mr. Gatti responded yes.

Mr. Black stated I believe it was in June.

Mr. Gatti stated we can track that by the date of the report and when we received it. We are going to talk this over and Mr. DeCocq will contact you with the results. We will discuss your request for extras and secondly, the reappointment consideration. The only other comment I would make is, in our business we always ask for extra before doing the work. I suppose the timing did not allow that. Do you understand what I am saying?

Mr. Black responded yes, I understand. We get in there and these things are the kinds of things that you do not know what the hours required are until the job is done. It is conceivable on both of these items I could have said what I said the beginning and described what I needed in general terms, got back exactly what I wanted and there would not have been a bunch of times.

It turned out what I got back was not what I wanted. It was a back and forth time type of thing. It did not appear in the beginning that it was going to be significant.

Mr. DeCocq asked do you anticipate anything else out of the ordinary due to implementation of GASBE 34?

Mr. Black responded yes, the implementation of GASBE 34 is a real serious thing. What we did was time consuming and what have you. What we have done so far is the management company has hired a different CPA firm to collect information about the District's fixed assets, which is a big part of the way the financial statements are put together previously and now.

In addition, they are looking at how the financial statements have to be reformatted for GASBE 34. My fee grew 15 percent over last year to help defray the cost of reformatting the financial statements.

Mr. DeCocq asked do you feel comfortable at this point or would you like me to table this letter until next month?

Mr. Black responded yes, table the letter until next month. That would be good.

Mr. Gatti stated thank you, Mr. Black. Mr. DeCocq will get back to you. To take this one step at a time, there is $1,000 extra here, as I understand it, for what they did not anticipate.

Mr. Bissell stated that is $2,000.

Mr. DeCocq stated it is $1,000 for each fund.

Mr. Gatti stated I though they said they had to train some people. Was that your people?

Mr. DeCocq stated the way that it was being done was not the way that we needed to see it done. They explained it to my people internally. We need to see the schedule. We prepare the schedules and if the schedules are done in the fashion the auditor needs it, a lot of times they will request it in a different fashion. Most auditors, we are pretty much conformed to the way they are going to do it because we deal with the same auditors over and over.

This is the only District that these auditors have at this point. They must have requested a different format. We do not charge for that. It is part of our standard accounting fee. If they ask us for 1,000 schedules, we will give it to them. They could have created the schedule, but they would be auditing their own work, so they told us how they needed it done. It came in and was not done right. They kicked it back and reviewed it and kicked it back until it was correct.

Mr. Bissell asked it took them five years to do this? They just now decided they needed a change?

Mr. DeCocq responded they do not audit every single line item. This is not the way it is done. They request a reasonable, random sample that meets the standard. They look at that and if a flag is raised in those initial studies, then they dig in deeper to find out where the problems are and then they fix those. No audit is ever a line-by-line audit. It is simply a scientific random sampling within the confines of the statutes.

This may be something they discovered this year and said no, we need it to be done this way.

Mr. Bissell stated last year we took bids and went from $3,000 and some hundred to over $20,000. Against my better judgment, the Board continued with this firm.

Mr. DeCocq stated I have no problem with that, if that is the Board's desire. It is a healthy exercise. I would say if you have such a range, then there are certain people who are bidding that do not understand the job. Just keep that in mind. Do not assume $3,000 is feasible.

On the average for easy Districts, we are looking at $10,000 to start in simple startup Districts at this point due to the GASBE34. That is across the board and they go up from there depending on difficulty and what is involved.

Mr. Bissell stated they contracted for a certain amount of money. They did not come back to us with problems during the year. They did not honor the contract to March 30th and as far as their request for additional funds.

Mr. Bissell MOVED to deny the auditor's request for additional funds.

Mr. Gatti stated for us to switch horses, it will cost us money. Do not misunderstand. I appreciate your point, but they have another submittal to us that says they will do the same thing next year for the same amount of money.

Mr. DeCocq stated that is $11,500. It says that in their lump sum. You can say, you know what you are getting into. You have the GASBE 34, so they already put the 15% in.

Mr. Gatti stated a lump sum is a two-edged sword. If you can do it cheaper than you say you can do it, that is all profit. If it costs you more, then you lose money. You have to make up your mind, which way you want to go.

Mr. DeCocq stated that is a twenty- percent.

Mr. Lambert stated he did say they were going to have to do some additional things this year.

Mr. DeCocq stated the GASBE 34 is a requirement.

Mr. Lambert stated that is this year. I am saying that these extras are twenty percent over.

Mr. DeCocq responded right, if you want to look at the $2,000 over the $10,000, absolutely, that is extra.

Mr. Lambert stated I am not talking about extra. I personally do not want to make the decision if I am here for one more meeting. It should be up to those guys.

Mr. Gatti stated there is a motion and there is no second.

Mr. Burgeson stated we could go somewhere in between. A twenty- percent failure seems like a lot of money.

Mr. Gatti asked what does Mr. Bissell think? They have to come back with a second and we can give Mr. DeCocq direction to take another look at this and, off the record, ask them to cut it in half. We are willing to meet half way. How do you feel about that?

Mr. Bissell responded I will agree with the rest if that is their wish.

Mr. Gatti stated we can resubmit and if it comes back to us on a fifty-percent basis, we will consider it. Does Mr. Harrell have any problems with that?

Mr. Bissell asked are we going to ask for bids?

Mr. Gatti responded perhaps we should hold off on that.

Mr. Burgeson stated I have never heard of anybody allowing, in my business, a lump sum bid. Like I said, either you take it or you do not. You take it and if you made money you keep your mouth shut. If you lost money, you cannot come back for it.

Mr. Gatti stated let's prepare to take bids. Is that a major event for you?

Mr. DeCocq responded not for us, because we usually do this bi-annually.

Mr. Gatti stated let's ask for bids because we asked for this last year.

Mr. DeCocq stated absolutely, it is just a matter of putting it out and the time frames for advertisement and whatnot. If we could just take Number Five and I could get a motion and seek proposals, I will do so within the confines and statutes.

On MOTION by Mr. Bissell seconded by Mr. Lambert with all in favor staff was instructed to bid out the auditing services for the Port of the Islands C.D.D.

Mr. Gatti stated before we move on I wrote Mr. Bissell a letter of apology regarding the way I spoke to him at the last meeting and I want to do this publicly also. I do not apologize for what I said, but I do apologize for the way that I spoke to Mr. Bissell.

Given the time and dedication that you give to this community, you deserve much better than that. I felt an apology was appropriate.

Mr. Bissell responded All right. I accept that.

Whereupon, the Second Order of Business was addressed out of order.

SECOND ORDER OF BUSINESS Approval of the Minutes of the August 20, 2004 Meeting

Mr. Gatti stated that each Board member received a copy of the minutes of the meeting of August 20, 2004 and requested any additions, corrections or deletions.

Mr. Cox stated there was some discussion on how many units for the Northport property that somehow got interpreted as dollars.

Mr. Gatti asked where is that?

Mr. Cox responded it is on Page 11, one-third of the way down. We were discussing the conversion of the ERC's the number of multi-family units that can be constructed within the confines of the ERC's as opposed to how much the zoning allows.

Mr. DeCocq asked so that needs to continue down where it says, that is right. It is 146 units.

Mr. Cox stated there was another comment where I am not real sure that is what I said. On Page 19, the last couple of paragraphs before the engineer's report where we were talking about the conversation that I had with the potential developers of the North Hotel. I had asked them what was their time line probability of success and do I need to sit here?

I do not think they had given me the impression that it was a waste of my time. I do not know what was said.

A resident stated I remember that was it.

Mr. Gatti asked what would you like the correction to be?

Mr. DeCocq asked what is the gist here?

Mr. Cox responded they were asking for a delay. The people proposing the North Hotel were asking us to delay proceeding with our foreclosure items. So, I was asking them. If we want to delay this, what kind of time line are we looking at? What is your probability of success in getting your funding and all of this kind of stuff? Maybe I was asking them if they were serious of not.

A resident stated I remember you saying that.

Mr. Gatti stated I have not a correction to the minutes, but to something I said.

Mr. Cox stated if it is an issue, we can get back to the tape, but I do not think it is that important.

Mr. DeCocq asked would you be happy if I strike, do I need to sit there?

Mr. Cox responded yes.

Mr. DeCocq responded it is gone.

Mr. Gatti stated where it says a resident asked can we have an option to call Mr. Stephens. It was Mr. Lambert. My response was absolutely you can call Mr. DeCocq. That is true, but we have to qualify that a bit. Board members, comment as appropriate. If we need information from staff or if there is an emergency like a broken main or something, obviously, it is appropriate to call staff. If one of the Board members needs some information that is not going to cost a lot of money to generate, it is appropriate to call staff.

However, assume that I went to Mr. Benson and asked him to do a survey out here and determine the elevations level. It will cost $20,000. I do not have authority, nor does anybody on the Board have authority to do that. My point is, if anything and individual Board member wants to do that will generate significant cost, you do not have authority to do that on an individual basis.

I guess it calls for a bit of judgment. If there is information requested, that is fine. If it is information that is going to cost $10,000 to generate, then fine. I guess that is the proper response.

Mr. Lambert stated I sent Mr. DeCocq an e-mail Monday morning, requesting some information, which I believe is probably existing, for my own information, being a new member. I did ask him to get back to me if that was something that would be a problem.

I do not think that falls into the category of costing a lot of money, but I certainly think in order to get up to speed this information would be helpful.

On MOTION by Mr. Bissell seconded by Mr. Robinson with all in favor the minutes of the meeting of August 20, 2004 we approved as amended.

SIXTH ORDER OF BUSINESS Consideration of Proposal from Hole, Montes & Associates for Engineering Services

Mr. Gatti asked we asked Mr. Benson for a number of proposals. Have you put them together?

Mr. Benson responded yes, I have listed the projects that, to my understanding, were some recommendations that Mr. Stephens and I jointly made as to some of the projects that should be done first. We talked about that at the last few meetings. There was some input regarding doing the extension of fire and irrigation lines to Newport Cay and Morning Star Cay, at the end of Newport Drive. I know where the services are, but there would be a piece of the line on Newport Drive.

We need to do that this year if possible. What I have done here is prepare the proposal to describe the projects that I would give priority to, which are the irrigation pump station, modification of DEP's requiring what they have to do in order to put that part of the system together with the effluent reuse system, which you have to do both really to have a truly effective system. That is the first project. The second project is the fire and irrigation line extension we just talked about. The third was the water resurfacing.

There are two projects here that, if you were to do the, you would more than likely do it as one project although you may for financial reasons, wind up bidding it where you can select to do just part of the work if that is all the funding you have.

The fifth was the refurbishment and installation of the effluent filter of the wastewater plant. If you remember four or five years ago, Sarasota County had some salvage and surplus equipment t hat we picked up at no cost. We needed some to transport to our plant. It has been in storage for a number of years. At this time, we need to get with the manufacturer of the unit and do an assessment of what it is going to take to put that back into service.

Since it has been a number of years since it has been t here, we better do that before we go any further. If the cost comes back that we refurbish it to high, we need to look at other options. At this point, we need to have an assessment of that. There were some assessment items, replacement below the one that is worn out. It is over ten years old.

The second reuse pump, we put in one pump this year, knowing that we would gradually need to add a pump with that money. The transfer pump for the water plant will need to be replaced at some point. There is special equipment there. There would be some potential assistance to help you get the pricing and installation of that.

That is mostly Mr. Stephens' responsibility. Then there is always anticipated storm water drainage system improvements that we cannot predict this time because the Board has not really made a decision as to what you want to do with your overall storm water management system. That is just a kind of a placeholder in the budget.

I came up with a plan of the amount of work involved in each of these activities, itemized that as to what we would be doing with the proposed fee. I developed what would be a competitive fee for that work and made a proposal for each of the line items. That is what you have here. It does describe what we anticipate the work to be on the design permit and the actual bidding of the work.

Generally I proposed a lump sum fee there for the system administration of the construction contract inspection, I suggested that would be a time and expense item. It depends on how much level service you would like. In the past, we have pretty much done no inspection or minimum inspection work and we have in the past had residents come back ask why was there not an inspection. My answer was always; we were not paid to do the inspection. At this point I put an estimate on what I think is a nominal amount.

The total of the projects on the first page is $580,000 and the middle of the engineering proposal for those same items is $85,000. That is a total of $665,000. I believe that is a little bit more than what the budget was this year as the two line items being the additional $500,000 that you had authorized. I think it was $135,000 that we had never budgeted in the past because we did not have the cash to spend. That was $635,000 is what we were potentially talking about.

Mr. Gatti asked what is the total construction cost again?

Mr. Benson responded the total is $580,000 and the engineering is $85,000.

Mr. Gatti asked what percentage is that?

Mr. Benson responded I think it was less than fifteen percent, which is less than what I budgeted at. I then came up with that in the annual report as a way to estimate the cost of the project.

Mr. Gatti asked so that fifteen percent includes design, permitting, bidding and construction supervision?

Mr. Benson responded yes, you have to remember these are fairly small projects and they tend to have a higher percentage. I feel I put together a very competitive price. I do not think there is a lot of fluff in there at all.

Mr. Burgeson asked so the $85,000 includes the estimate of inspections.

Mr. Benson responded yes.

Mr. Burgeson responded that can fluctuate.

Mr. Benson stated if you do not want us to answer questions of the contractor and look at his invoices, we will not do it if you do not want us to. If you want us to, we will identify a budget, so you could pay us.

Mr. Burgeson asked that person would be the project manager, right? Also, I did not put a schedule because I did not know which of these projects you want done and when during the year because obviously, it will relate to when you have the money available to do the work. I anticipate there would be a certain number of these projects you want to go ahead and have us to and have them ready for when you do have funding.

Mr. Gatti responded yes, we do. What is it going to take you to put these plans together? The resurfacing, that will not be anything. The resurfacing will take a little bit.

Mr. Burgeson stated for Number 2 on the list, I have about six sheets of drawings for $11,000.

Mr. Gatti asked what about Number 1? What is that going to take?

Mr. Burgeson responded Number 1 is the one that is going to take the most time. It is $25,000 anticipated work.

Mr. Cox stated with that $25,000 you are also saying that the District would be responsible for payment of the FDEP permits.

Mr. Benson stated yes, this is pretty typical. You like to check for the permit fee directly to the DEP. I am not going to pay the fee.

Mr. Gatti stated what kind of multiplier are you using?

Mr. Benson responded our multiplier is around three.

Mr. Bissell stated for clarification, are you saying on this number one that we cannot start using our wastewater like we planned and spent all that money on until we do this?

Mr. Benson responded no, I am sorry if I implied that. We have made arrangements with DEP that we can start up the wastewater effluent, reclaimed water system as long as we close the main valve along the road here that would separate us into two halves. One half of our system, which would basically be Stella Maris and Cays, would utilize the water from the wastewater treatment plant, the reclaimed water, along with water from our potable water wells.

That would be a separate system. The canal water system now has to be separate. They will not let us have one system, which is what you really need for liability, which you need for a lot of reasons. The only way to put it in service was to separate the two. They would do that. I am going to get ahead of my report. There were a few items on my report today. The City of Naples approved this month between our two meetings during our testing.

The monitoring wells you need are being installed this week. I went over and I did not see the hole in the ground, so the guy must be coming today.

Mr. Bissell asked do we have a contractor for that monitor well?

Mr. Benson responded yes, you authorized us to do that work.

Mr. Bissell stated I was wondering if that is the same figures.

Mr. Benson stated we are just to the point where Mr. Stephens can turn on the system for that part of the community.

Mr. Bissell asked when you put in the fire and irrigation pump system is it going to be elevated enough if we do have a hurricane some day, that is not inundated and we are out? Also, we have generators here to take care of our water and sewer system.

Mr. Benson responded you have a generator at your wastewater treatment plant that powers both the wastewater treatment plant and the water treatment plant. You have a generator there.

Mr. Stephens stated we have one at the fire and irrigation station.

Mr. Benson stated yes, so you have one and you do not have any generators for your lift stations, just the same as Collier County and the City of Naples do not have every lift station that has generators.

Mr. Lambert asked do we have a portable generator that can be used to plug those in?

Mr. Stephens responded we need one.

Mr. Benson stated that is something that just over the last month is becoming more of a concern in the State around the east cost, Palm Beach County, which is a large County and Martin County. They basically had no power for almost a week in a lot of areas. All these lift stations did not have power and generators, even these large utilities, may have just a few generators they can take out to lift stations because everybody in the business in Florida has always said the odds of having to call our system out for an extended period of time are not that high.

Mr. Gatti stated to get back on track; I suggest we build that into our priorities. You make a good point.

Mr. Bissell stated I agree.

Mr. Gatti stated Mr. Stephens and Mr. Benson can meet and come up with a recommendation for size and cost and everything and we will consider that.

Mr. Benson stated I will bring that back at the next meeting.

Mr. Cox stated I had a meeting the other day of the Florida Rule of Order Cooperative. I represent several Districts in northern Florida that are thinking of this. Many are saying it became such a problem, they are ready to buy generators to redistribute and have available for emergencies, a certain amount on hand. They are negotiating a bulk purchase and if we let them know we may get in on that.

Mr. Gatti stated as a community, we have the right to piggyback on any of those programs. Collier, the City of Naples or any of those programs if they take bids buying trucks or anything we can piggyback those programs.

Mr. Benson stated the original question was could you use part of the system now. This though, is very important to your overall system. The DEP, what they want in the first place, we just did not have the money.

Mr. Bissell asked do we want the new Board involved in the decisions on these or do we want to do it now? We get no money until the first of January or something like that. The Board sits the first meeting in November.

Mr. Gatti responded the only thing we can do now today is direct Mr. Benson to proceed with, in certain priorities, the preparations of plans and specifications. That does not mean we are going to start construction when he comes back with those plans and specifications. That means in three or four months he will be ready to start looking at bids. By that time, the Board will be here. Those plans will be on the shelf ready to go when we need them.

With the new Board we can direct when the construction is going to start. Also, I will ask, do you have any problem with this?

Whereupon, the Board members indicated no.

Mr. Lambert stated I have one question regarding that, when preparing them ahead of time, if we would decide we were going to push it off for a couple of more years, you have prepared them; now we are going to decide when we are going to implement it. How good is that information two years down the road? What does it take to bring that current?

Mr. Benson responded I would not expect that something like fire and irrigation lines would change much.

Mr. Gatti stated the thing that could affect that the most is regulations on permits; if the DEP decides we need this and that.

Mr. Benson stated this one main thing; we are really putting in this purple pipe for reuse because it will eventually be a reuse line. On the road resurfacing, that is an area. If we do the plans for road resurfacing, we have identified the standard that we are asking the contractor to do as far as the roads. We also then identified the places where there are specifics that need extra work other than what is described and identified.

If that sits on the shelf for a year or two, you may have potholes or something the developed and were not on those plans. Yes, then you would have to update the plans two years from now to some extent.

Mr. Gatti stated let me share one other point, which goes to what you are saying. I am directly involved in this on a daily basis. The concrete costs $79 a cubic yard today. October 1st it will be $85 a cubic yard and December 1st, it will be $90 a cubic yard.

Mr. Benson stated a year ago, it was about half of that.

Mr. Gatti stated I have two or three houses in every stage of constructions and we have to figure this in. That is what we were looking at. What is asphalt?

Mr. Benson responded it changes all the time. I would not even guess.

Mr. Gatti stated that is an oil product and that is going to go crazy too.

Mr. Benson stated we based this on what we know we are bidding. There is a lot more to be done, so if the money is there, we should do it.

Mr. Gatti asked what is the Board's pleasure?

Mr. Bissell stated if that is what the other Board members feel, I think Mr. Benson should start planning on Number 1 and Number 2. Number 3, I would say in another two or three years down the road. Have you checked those culverts? How many culverts are there that are corrugated?

Mr. Gatti stated that is Number 7.

Mr. Benson stated in the area where there are some culverts crossing the road, we would identify those on the plans at that time.

Mr. Gatti asked is it included in here?

Mr. Benson responded yes, it is included in Number 3. Number of items, five. It says drainage pipe replacements details. Then near it, above it says it is proposed in places where existing corrugated metal cross the roads that they be replaced. Please identify that they be replaced with either plaster or concrete.

We have identified on those drawings, points at which there are pipes and note that they leave the plate and provide the details for the contractor to follow.

Mr. Bissell asked after they were replaced, it would be filled in and they would be allowed to settle for a period of time before it is resurfaced, so we would have a smooth surface?

Mr. Benson responded there are trade-offs on how you do these things. We could have a contractor come in and redo the corrugated pipes. They could be compacted in the median. You just put a patch on it for a while and later you do t he road resurfacing. There are things we can do, but if we break it up into small pieces, we have more and more trouble getting contractors to do the work, bid on the work and cost for it, a small job becomes much bigger because you are paying a lot for the mobilization to bring the guy out.

I tried to group these. If you are going to go ahead, I suggest you try to combine three and four or at least when you bid it, get a price. They have it in such a way that the price is more than you have as far as money. You can just authorize and do the first part.

Mr. Gatti asked how about three, four and seven?

Mr. Benson responded putting those off?

Mr. Gatti responded no, as packages.

Mr. Benson stated I do not know what we are going to do for seven.

Mr. Gatti responded that is good.

Mr. Benson stated $25,000 capital and engineering, I would suggest, just to get it in the budget.

Mr. Bissell stated to do Number one and two we are talking about $50,000-60,000 worth of work. That would take them a month to do that would it not?

Mr. Cox responded no, the design and permitting are $36,000. The other $20,000 does not come into play until the job is done and we are actually doing the monitoring, testing and contract administration. That also includes all three; design, permitting and bidding.

Mr. Bissell stated Number 1 and 2 are my priority right now.

Mr. Gatti stated we set up a process to try and get things done. To try and get us dragging our feet is not the way to go. We are asking for things to be prepared so when we have the money we can proceed.

Mr. Burgeson stated the idea is we have these are the things that we're going to do.

Mr. Lambert stated I have a copy of the prior sheet. There were some items listed on here that are required like solar security lights. Should we be taking care of that sort of thing?

Mr. Benson responded yes, some of the items on there, we've already done. They are not here.

Mr. DeCocq asked could you give us an updated version, leave those on there, write complete and we will begin to track this as we go through?

Mr. Benson responded on the first page of the proposal, after each item, I put I-3 and I-1 on that list and Item 2, it is I-4 on that list. I tried to correlate in this proposal what those items are in that same list.

Mr. Gatti asked did you make a motion on 1 and 2?

Mr. Bissell responded no, I just suggested we get started on that.

Mr. Lambert asked are there any other items we are going to be required to do by rules and regulations and all that?

Mr. DeCocq responded I think we tried to tackle all that.

Mr. Benson stated Number 1; I think we need to do. We are trying to negotiate this. We were working with DEP over a year ago.

Mr. Burgeson stated he is asking in addition to that, if there is anything other than this 1 through 6.

Mr. Benson responded yes, there is a whole other year of projects.

Mr. Burgeson stated but that has not been approved, right. This money covers the things that you need to be done this year, according to the DEP and whoever else. We grouped it into this year and we set aside this much to do this work and I think we should go ahead and do it. We have the money there.

Mr. Lambert asked is what he said correct?

Mr. Benson responded on this list I put the numbers 1 through 7. That was my order of priorities.

Mr. Gatti stated that is the $600,000 that we told you about.

Mr. Benson stated yes, to do all of them, plus all the engineering at $665,000, which is a bit more than what your budget is. The reason I did it was the engineering has to be done before you do the construction. He may have us do one of these projects and it may sit for three or four months until you have money, which may get to you even in the next year.

We would not bid the projects until you have money in the bank.

Mr. Gatti stated we directed you to do so.

Mr. Benson stated one of the items we want to make sure is clear is Number 5, what it would take to work with the manufacturer of that surplus equipment to get a detailed list of what it is going to take to fix it and how much it will cost for us to come back to you and say is it worth fixing it or by a new one, whatever the analysis would be. This one should be done so we have an assessment.

We have a piece of equipment that has been sitting there for five years. It has been sitting there, just rusting. It is possible by the time we get to the analysis we may find we have to spend twice as much for something brand new then I could bring that back to you.

Mr. DeCocq stated there are two questions, is there anything the Board does not see as being important on this list and secondly, is there anything that you see in the master list that you see as more important than anything else. This is the professional's opinion on what we feel needs to get done with your money, but if the Board has no objection on what they see or has no modifications, it is a matter of a motion as to how much you want to start moving on right now.

My suggestion is move on it all because it all needs to be done.

Mr. Bissell asked is Number 3 a priority?

Mr. Benson asked you do not want the road resurfaced?

Mr. Bissell responded yes, but there are a lot of other things to be done first. We have to put in the irrigation system down there and the fire system.

Mr. Stephens stated if we do all that the only thing he would do is get the information ready when that came up.

Mr. Bissell stated if that is the way it is, I agree.

Mr. Gatti stated we would obviously do the irrigation project before we did the resurfacing. We would obviously do the storm water project before we do the resurfacing project. That is why they should be packaged, because in all likelihood, you can get the guy that is going to do all of this in one package.

Mr. Benson stated yes; two, three and four may have someone potentially doing all of them. At different times we are saying when you have a project that is primarily a road project. The guy that does that, he only does that. If you put the pipe work in with the road work you may actually pay more because someone is having to sub to someone else and mark it up. It depends on the market right now.

Mr. Gatti stated we would look to your recommendation on that.

Mr. DeCocq stated no matter what is appropriate to either, we get those items taken care of at the time or at least sleeve for them, so you do not have to tear the road apart.

Mr. Gatti stated when a roadway starts to deteriorate it does so exponentially. If there is a pothole this big and it is growing that much every year, it is not going to grow twice as big next year. It is going to be four times. Once it starts to deteriorate it goes. When you have a little problem and take care of it, it is one thing, but if you let it go, it is a huge problem.

Whereupon, a discussion was held off the record.

Mr. Benson stated we have tried, over the years to give you estimates and prices of things like this road resurfacing. Every few years, we bump it up a bit more because it keeps not getting done. Part of that is because the price of materials is going up and asphalt goes up a lot. We also have the condition of the road and how much work it will end up really taking. That is not what an engineer does. I am not guaranteeing. That is my best estimate.

Mr. Burgeson stated we need to do this year. That was our whole thing, everybody paying extra money.

On MOTION by Mr. Burgeson seconded by Mr. Bissell with all in favor the proposal from Hole, Montes & Associates was approved as presented.

Mr. Gatti stated we need to get off the ground and start doing the work.

Mr. Bissell asked they just resurface the roads here, right?

Mr. Stephens responded they normally do not reseal.

Mr. Bissell stated where I come from they reseal, spray it down and put white gravel on here. I am just asking if they do that, not can we do it.

Mr. Gatti stated Asphalt oxidizes. When you see it go from black to white you know the sun is cooking the asphalt out of it. When you reseal it, you revitalize that surface. Asphalt does not have intensive strength. In other words, if there is no sub-base that carries the asphalt there is nothing you can do that will do any good. Mr. Benson has directions to go with this now. Could you give us a bit of a timeline, or is that unfair?

Mr. Benson asked just engineering, right?

Mr. Gatti responded yes, here is the thing that is involved. Mr. Benson did some estimates from experience, but when he does the final plans he may see more or less than what those costs are reflected here. Is that a fair statement? You really cannot come up with an accurate estimate until you have plans and specs in front of you. That could change too.

Mr. Benson stated as far as the schedule to do the work; that is somewhat flexible. It depends on when you want to start bidding some of these projects, once the funds are available.

Mr. Gatti asked can you give us a bit of an overview? Take into account what we have in the kitty.

Mr. DeCocq responded to talk about your process for finances, typically what you wee when you go out on the tax bill is that you will not receive the lion's share of that money at least until September, most likely January. You have a four-month lag time, the reason being that you have that four-percent discount when you first start.

Many people wait until the last minute to pay their taxes. You get close to ninety percent of your money in any standard District in that time frame. With some of the unburdening that has occurred this year, you hope that your percentage has increased. You can probably look safely to at least receiving 75% of what you anticipate in January. So, you can be prepared to take advantage of that.

Also, you will start to see on the financial, how that money is trickling in. If it happens sooner, we can pull the trigger sooner. Once the money comes in, it is your money. We are putting the money in the line item that we have set aside for this improvement.

Mr. Benson stated at that point you would know how much money you have so you could prioritize things. You might think I am assuming the worse, but based on the past, there is always the possibility you may have used up all the money and at that point, you may say, I will do one less project.

Mr. DeCocq stated that is the beauty of having the full plan and thinking to the future of the five years and what you need to get done. Just because we have approved a move on these, you may decide six months down the road, because of the financial situation you are in or an environmental reason or maybe extenuating circumstances, we put this one on the shelf and moved the other one forward.

There is reason for not getting projects done. If you are ready to pull the trigger you will know over the next two to three months what kind of financial shape we will be in. There is no reason we should not be collecting this money. It is on the tax roll and that is the reason we put it on the tax roll. It is a good mechanism for collecting the money up front.

Mr. Burgeson asked can you give us the amount?

Mr. DeCocq responded right now according to your financials ending on July 31st in your unreserved fund balance in the general fund, you have about $180,000. Th