MINUTES OF MEETING

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 on Friday, October 18, 2002 at 10:00 a.m. at the Egret Room, 25000 Tamiami Trial, Naples, Florida.

Present and constituting a quorum were:

Richard Gatti Chairman

Bernard Wolsky Supervisor

Ted Bissell Supervisor

John Robinson Supervisor

Also present were:

Darrin Mossing District Manager

Daniel Cox District Counsel

Ronald Benson District Engineer

Tim Stephens Field Manager

Numerous residents

FIRST ORDER OF BUSINESS Roll Call

Mr. Gatti called the meeting to order. Mr. Mossing called the roll and indicated a quorum was present.

SECOND ORDER OF BUSINESS Continuation of Attorney/Client Session

(There being none, the next agenda item was addressed.)

THIRD ORDER OF BUSINESS Approval of the Minutes of the September 20, 2002 meeting

ON MOTION by Mr. Wolsky, seconded by Mr. Bissell, with all in favor, the minutes of the September 20, 2002 were approved.

FOURTH ORDER OF BUSINESS Consideration of the Request to Use Signs at the Newport Drive Entrance

Mr. Gatti asked here is something I do not know anything about, what is that about?

Mr. Cox responded we have been talking for, I guess, about a month-and-a-half trying to figure out who owns the sign that is on the west side of Newport Drive. I am 99 percent sure that it is within the area that the District owns, from looking at the tax map at the Property Appraiser's Office. What they want to do is put a sign out for the restaurant, at their expense.

They would have the sign put on the little monument there to catch some of the drive-by traffic now that the season has started to pick up to try to get some additional traffic in for the restaurants.

Mr. Gatti asked first of all, does the Board have any problems with this?

Mr. Bissell responded no.

Mr. Gatti stated I do not either and, as a matter of fact, just yesterday or the day before, it occurred to me that without a sign, I do not see how the restaurant can really pick up additional business.

Given that, the sign and all aspects of it comes under the County jurisdiction, so whatever is done there has to be in accordance with County code.

Mr. Cox stated that is correct.

Mr. Gatti asked what do you need from us, an approval?

Mr. Cox responded yes.

ON MOTION by Mr. Bissell, seconded by Mr. Wolsky, with all in favor, the use of a sign at the Newport Drive Entrance was approved.

Mr. Gatti asked subject to meeting County codes?

Mr. Bissell responded right. You will probably need a letter to that effect.

Mr. Cox stated we will put something together.

Mr. Gatti asked what is the name of the restaurant going to be?

Mr. Cox responded Manatee Bar and Grill.

Mr. Gatti stated I am sure everybody here has been in the restaurant, but for anybody who has not, it is a good experience. They are doing a good job.

Mr. Bissell stated excellent food at a reasonable price.

FIFTH ORDER OF BUSINESS Staff Reports

A. Engineer

Mr. Benson stated I need to give you an update on our reclaimed water project and permitting status.

On Wednesday, I met with the DEP and brought Clarence Tears with the Big Cypress Basin South Florida Water Management District along to the meeting.

Everyone remembers Clarence as a supporter of what we are doing down here and he is the director of that agency and that is the agency who had provided us here at Port of the Islands a grant to help fund the construction of this reclaimed water irrigation project.

The meeting was probably a couple of hours. We covered a lot of ground. The outcome of the meeting was that the DEP says that they have their rules that they have to abide by and that we have to comply with those rules, even if, you know, there may be some disagreement as to the rules between the Water Management District and the DEP as far as practicality.

What the DEP has agreed to do is work with us to some extent to allow us to implement that with the minimum amount of effort, although it is still going to require some.

There is the irrigation pump station over here that takes the water out of the canal and that is currently our irrigation source. The water in the canal has a different quality at different times of year just as any water body. There are algae and different sediments and things in that water.

I think sometimes there has probably been comments in the past at meetings here about sometimes there being stuff in the water that plugs up sprinkler heads and things. Basically, DEP's concern is the quality of that water, so they want us to have some type of filtration system on that source of water.

In doing that, that would make the water a better quality. I mean, irrigation systems for agriculture and for golf courses when they use water from canals often times do put types of strainers and filters on the system so they do not plug up the sprinkler heads and things, so that is something that we would have to comply with that rule and also periodically test that water to show that it meets the standards the DEP puts on the water.

The part where the Water Management District is different is they are the ones who have given us the permit, historically, for that water source and they do not require that we meet any certain water quality. That is just not part of their rules, but we will have to comply with that.

What DEP has agreed is that we can modify the application, which allows us to have a phased project where the first phase of the project would be that the reclaimed water from our waste water plant gets highly treated, along with untreated well water from our well field could be used for irrigation as long as during that first phase we do not intermix the water from the canal.

They understand that we have large pumps on the canal for fire protection and that if there was a fire and there was a high demand of water, that those pumps would come on and they would be able to pump into the pipes.

They understand that and they said that they will work with us to write an operations protocol to get us around that part of the rule because, you know, technically sticking with the rule, they would say that we had to treat even that water, so they are going to work with us on that.

What we would do then is a second phase which would be we put in this treatment system. Basically, it would be some type of a strainer filter system and also a bleach injection system to put chlorine in that water, which, again, would provide cleaner and safer water coming out of the canal.

That would be the second phase of the project and Mr. Tears suggested in the meeting that there is a new round of grants. The applications have to be in by November 8th and he said why not suggest to Port of the Islands that they apply for a grant for the second part of the project, which, again, is a matching grant, so there is not going to be additional costs in order to comply with all the things.

There is a benefit, as I said. The water that you will get from the canal will be cleaner than what you currently are getting.

An unidentified speaker asked what about salt-water intrusion?

Mr. Benson responded when we have the salt water situation that filter will not take out the salt, but, Mr. Tears and I talked about this while we were riding up to Fort Myers together on Wednesday and we are both in agreement that the likelihood is going to be in the future after the rehydration project north of here that you probably would have less likelihood to have that salt water intrusion in the future than you would today because when you rehydrate that whole area, the canal will not be fluctuating up and down as much on the north side and that is really what causes that salt water to go up.

In the long term, you probably will not have as much of that problem.

Mr. Gatti asked what do you need from us? Do you need a direction to apply for that grant?

Mr. Benson responded yes. I need you to tell me to go ahead and apply for the grant. I am going to respond to DEP and they have agreed to process the paperwork in an expeditious manner. We had the head folks up there of the DEP in our meeting. We had a whole group of them.

They have agreed to put that as a priority project in getting the permit processed, based on the discussion that we had, so we will get a permit.

Mr. Tears is working to help us make sure that we do not jeopardize the grant we already have. He understands that process. He is going to help us to get this other grant, so I think that we are in good shape there. I guess what I would ask is that I will fill out the application and that I will get it to Mr. Gatti for signature and we will get it submitted.

I am working on the technical aspects of that right now. I do not have the costs that it is going to have. We have to get that in order to get this grant application in.

Mr. Gatti stated that November 8th is not a problem because that grant is not much. It is just filling out some paperwork.

Mr. Benson stated right and we filled one out for you a couple of years ago and we will update some of the stuff in there.

Mr. Wolsky asked what do you need, a motion?

Mr. Benson responded I need probably a motion that you will allow me to fill out the application and Mr. Gatti will sign it.

Mr. Wolsky asked can I make a motion that we apply for the second grant?

Mr. Gatti responded authorize our engineer to apply for that grant.

ON MOTION by Mr. Wolsky, seconded by Mr. Bissell, with all in favor, the engineer is authorized to apply for a second grant to help fund the construction of the reclaimed water irrigation project and have the Chairman execute said grant application.

Mr. Benson stated I would like to add just one thing. Like I said, the interim measure would be that we would rely on the new system for irrigation in the interim until the second project is complete.

We would make up that shortfall between what is produced at the waste water plant's reclaimed water work, with the well water from the well field and the technical aspects of that we have to work out, Mr. Stephens.

Mr. Gatti asked in rough numbers, now, what are we talking about our share? This is a matching grant; is it not?

Mr. Benson responded yes, it is a matching grant. I am going to say it is going to be at least another $50,000 of your money. I mean I have to give you a rough number. I do not have a cost put together yet.

Mr. Cox stated they just had two districts that put in new filtration systems on their irrigation systems and one is quite a bit larger than this district and theirs was about $85,000 and one is maybe about the same size per volume and I believe it was around $50,000, like you said, so you may be somewhere in that range.

Mr. Gatti asked $50,000 is total?

Mr. Benson responded no. It is $100,000 total, which we would put up $50,000 and they would put up $50,000.

Mr. Mossing asked is it again going to be that we have to put up the full $100,000 up front and then apply for the $50,000?

Mr. Benson responded yes. That is the way their grants work and that is going to be a year. We will probably be doing this a year from now.

Mr. Mossing asked when will we be required to put up the $100,000?

Mr. Bissell asked has the grant we already havebeen extended?

Mr. Benson responded yes. We are working with Mr. Tears to make sure that we do not have a problem with the funds.

Mr. Gatti stated South Florida is very accommodating. I have a grant with them on swale restoration in the City and they work with you and they are good people to work with. The only problem is, do we have the $50,000 or will we have the $50,000.

Mr. Mossing stated we really need the $100,000.

Mr. Gatti stated we could borrow the $50,000 on an interim, but within our own funds.

Mr. Benson stated I guess what we need to decide on this is the timing of when we spend the money. It would have to be worked out as far as availability of the money.

Mr. Gatti stated we have to do it, so I think we should go ahead.

Mr. Benson stated just one other general comment and I think it is something we probably need to talk about in the future. We do not need to do it today.

If during water restriction when the District puts out water restrictions, I assume everybody here will comply with that. We need to just encourage that. I mean, obviously, Mr. Tears said anything we can do to conserve water as part of this program also and I said that we understand that.

The other thing in order to make this work would be potentially how we can set up the timing throughout the irrigation period to spread out the irrigation where it does not happen over just three or four hours during the night, but it would happen over a longer period and that relates to when timers go off for both the irrigation that the District controls, as well as coordinating with different homeowners associations out here so that not everybody is irrigating from 2:00 p.m. to 4:00 p.m. and to spread that irrigation period out.

It does not reduce the amount of water, but it reduces the size of the pumps and potential stress on that system and that is something we will need to talk about.

Mr. Gatti asked anything else?

Mr. Benson responded I think that was the major item I had on my list.

B. District Manager

Mr. Mossing stated I just remind the Board on November 15th we have a landowners election coming up which will be conducted at the same time the Board meeting is. It is to fill Mr. Bissell's position and to just remind the Board that I have ballots available. If people are not going to be here, I also have proxies that I can provide if anyone needs one or in their absence if they wanted someone to vote for them.

Mr. Gatti stated because with the sale of the properties and everything else, I do not know who has how many votes anymore. I know the hotel is pretty well fixed and the north side is pretty well fixed.

Mr. Cox stated we will have the assessment roll with us and that is really what we need to utilize for ownership, so just send it to me so instead of having to count them all. When I get here I can have that number.

Mr. Gatti stated just as a matter of information, Mr. Bissell's seat will be up for re-election. Mr. Wolsky and I were elected at the last meeting.

Mr. Wolsky stated we ran unopposed, so we automatically were elected.

C. Field Manager

Mr. Stephens stated I do not have anything.

Mr. Gatti asked you took down the stop signs because I am going back two meetings and all of that?

Mr. Stephens responded we added some signs over on the north side.

SIXTH ORDER OF BUSINESS Supervisor's Requests and Audience Comments

Mr. Gatti asked any comments from the audience or requests?

Mr. Wolsky stated I was ready to climb all over the gardener for running my sprinkler for longer than he usually does and I just wanted to know how that came about and I think there should be some way of informing people this happens before it happens.

An unidentified speaker stated the question has come up of how can we inform people. Mr. Gatti had referred a number of people to me for copies of minutes and so forth.

Two meetings ago, or three meetings ago, when Mr. Petty sat in for you we discussed the whole subject and we asked whether it was possible to put up a web site where we could put copies of the minutes PDF format that anybody who was interested could read the minutes on the web site.

Mr. Petty said that he was going to set up a web site and I would like to put into the record here that we would really like to have a web site with the minutes up there so that people and everybody else can access, to the extent they are interested, what is going on. Mr. Mossing will follow up with that and see and that would answer your question.

An unidentified speaker stated no because I do not have a computer and I do not subscribe to the television.

An unidentified speaker stated that same meeting we also said that we would keep the meeting minutes at the front desk and we have since then and about a week before this meeting takes place, I get the book and you can go back to the last meeting and those will always be available at the front desk about a week before this meeting.

An unidentified speaker stated there should be a bulletin board or something like that.

Mr. Gatti stated the other thing I think is possibly when people get back here we will resurrect a newsletter. Not only is it a fun thing and people like to get it, but it is also a directory.

Marilyn Loughren had said she would do it, but we will see how that comes together when everybody gets back. The web site is really the best idea.

An unidentified speaker stated in view of all the rain we have had in the last month, I would like to compliment Mr. Stephens on keeping the mosquitoes down. We have not had that many mosquitoes.

Mr. Gatti asked anybody else?

An unidentified speaker responded I was wondering if there was any update on the bankruptcy litigation.

Mr. Gatti stated we are going to an executive session and our attorney is going to update us, but that precludes everybody sitting in on it. Can you do something of a general nature?

Mr. Cox responded the last major thing that happened in the litigation is we had each filed Motions for Summary Judgment, which basically say, here is the law of the case and here are the facts as we see them. Based on these facts and the law of the case, you do not really have a choice. You do not need to hear it all, you know, you should rule in our favor.

We all get in there and we argued our motions before the judge. The judge says basically that it sounds like we have some disputes as to what we call material facts the facts that lead to the determination of the case, so I cannot rule on summary judgment. We have to have a full-blown hearing on the case.

He gave us a few deadlines. One of them is coming up on October 25th and we have to file a list of all of the people that we intend to call as witnesses and all of the exhibits that we intend to present. They will do the same thing and then we will go into a period called discovery.

We will get to go in and look at all of the documents that they want to use in the case and the sources of information that they have used. We get to interview their witnesses in what are called depositions that are taken before a court reporter and can be used to either impeach a witness on the stand if they say something different than what is said in the deposition or to support your position and what could essentially be another Motion for Summary Judgment at a later time.

We can turn around and file this again and say now we know these are the facts because in deposition they admitted A, B, and C.

We have those depositions tentatively scheduled for the second and third week of December. Most of them will be here in Naples. Some of them will be in, probably, Coral Springs. There is a potential that we will have a couple that may have to happen in Orlando, if they indeed hire the expert witness, an economist that I think they have for testimony.

Trial is set for January 15th, 16th, and 17th at the Federal Court House in Fort Myers. That is basically it. We are just at this point moving forward to plan all the little games that we do.

An audience member asked would that be the final decision then in January?

Mr. Cox responded yes. After that hearing the judge will enter his Final Order and there is always the potential then that either side may appeal that decision.

In bankruptcy you go actually to the District Court and that would be the Middle District of Florida in Tampa and, you know, it could go on that route. It is just depending on what the judge rules that it could be whoever loses that says I am tired of this and we are just going to move on.

Mr. Gatti stated if there are no more comments from the audience, then let us go into executive session.

An unidentified speaker asked what is the status of on the piping underneath the storm water pipe?

Mr. Benson responded I am going to meet with Mr. Stephens right after we leave and it should be happening this month.

We are going to need to get some easements and official documents so that pipe is on an easement to the CID and I need to talk to you about that also.

Mr. Bissell stated we had talked a couple of months ago about some palm trees and you showed some interest that CID could use them over here somewhere.

Mr. Gatti stated yes, absolutely.

Mr. Bissell stated there are four tall palms over there that the people would like to get rid of. It would be no cost other than the cost to CID to move them.

Mr. Stephens stated I have looked at those palms and they were close to the buildings that it would cost more than what the palms are worth to remove them as far as digging them up and moving them. They are just too close and need to be cut down.

Mr. Gatti asked what kind are they?

Mr. Stephens responded they are Washingtonians.

Mr. Bissell stated they were put in after the place was built.

Mr. Stephens stated I know that, but they are huge and they are within three or feet to the building and for $200 you can buy twice those trees. I will check with the landscaping people, but they would not recommend it.

Mr. Gatti stated let us go into executive session.

SEVENTH ORDER OF BUSINESS Financial Statements and Approval of Check Register

Mr. Mossing asked can we approve the check register?

Mr. Gatti responded yes.

Mr. Bissell stated yes. After close review I move that we approve.

ON MOTION by Mr. Bissell, seconded by Mr. Wolsky, with all in favor, the check register was approved.

EIGHTH ORDER OF BUSINESS Adjournment

ON MOTION by Mr. Bissell, seconded by Mr. Wolsky, with all in favor, the meeting was adjourned.

Secretary / Assistant Secretary Chairman / Vice Chairman