The regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held Monday, June 18, 2007 at 4:00 p.m. in the District Offices, 10300 NW 11th Manor, Coral Springs, Florida.


            Present and constituting a quorum were:


            Bob Fennell                                                President

            Sharon Zich                                                Vice President

            Glen Hanks                                                Secretary


            Also present were:


            Dan Daly                                                    Interim Manager

            Ed Goscicki                                                Co-Manager – Severn Trent Services

            Dennis Lyles                                               Attorney

            John McKune                                             Engineer

            Jane Early                                                   CH2M-Hill

            David Green                                               CH2M-Hill

            Randy Fredericks                                       Field Supervisor

            Doug Hyche                                               District Staff

            Mona Slaughter                                          Severn Trent Services


FIRST ORDER OF BUSINESS                         Roll Call

Mr. Goscicki called the meeting to order and called the roll. 


SECOND ORDER OF BUSINESS                    Organizational Matters

            A.        Oath of Office for Newly Elected Supervisors

            Ms. Slaughter being a Notary Public of the State of Florida administered the oath of office to the newly elected Supervisors.  A copy of the signed oaths will be made a part of the public record for this meeting.

            Mr. Fennell stated I know Ms. Zich is interested in resigning.  I was hoping some candidates wanted to take your place but unfortunately this has not occurred.  We will look for someone.  However, it will help us if you stay until a replacement is found.

            Mr. Daly stated we can place a notice on the website saying this District is actively seeking candidates.

            Mr. Fennell stated this Board has a lot to be proud of from the standpoint for the last six months; we have gone through numerous things with the District.  What the Board should be proud of the most is the hurricane cleanup.  I think we have done a good job.  The reason why no one is here is because this is a strong Board and is respected by the community.  Thank you all.

            B.        Election of Officers

            Mr. Fennell asked can we change the officer structure at any time?

            Mr. Lyles responded typically the officers are elected after the landowner’s election.

            Mr. Fennell stated at this time, I am probably better off serving as President.

            Mr. Hanks stated you are better suited for the political aspects. 

            Mr. Lyles stated if there were to come a time when Mr. Fennell wished to no longer serve as President, he can resign from his seat, have a vacant seat and the remaining Board can discuss filling of vacancy by a member of the Board.  Meaning the Board members can elect another President for the rest of the term.  There is probably an easier way to do this, if Mr. Fennell decides to no longer serve as President.  However, the Act contemplates having the election immediately after the landowner’s meeting.


Mr. Hanks nominated Mr. Fennell as President and Ms. Zich seconded the nomination.  There being no further nominations, with all in favor Mr. Fennell was elected President.


            Mr. Fennell stated the next office we should consider is Secretary as they are required to sign documents.  The Vice President has the easiest job.  Since Ms. Zich plans to move on, I recommend Mr. Hanks serve as Secretary.


Ms. Zich nominated Mr. Hanks as Secretary and Mr. Hanks seconded the nomination.  There being no further nominations, with all in favor Mr. Hanks was elected Secretary.


Mr. Fennell nominated Ms. Zich as Vice President and Mr. Hanks seconded the nomination.  There being no further nominations, with all in favor Ms. Zich was elected Vice President.




THIRD ORDER OF BUSINESS                       Approval of the Minutes of the May 2, 2007 Special Meeting and May 21, 2007 Regular Meeting

            Mr. Fennell stated each Board member received a copy of the minutes of the May 2, 2007 special meeting and requested any additions, corrections or deletions.

            Ms. Zich stated on page one, Mr. Daly is listed as working for Severn Trent Services.  Is this correct?

            Mr. Daly responded no.  I work for CSID.

            Mr. Hanks stated on the bottom of page six, the “Coral Springs facility” should be “CSID facility”.  We have our own facility for sewage treatment.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the minutes of the May 2, 2007 special meeting were approved as amended.


            Mr. Fennell stated each Board member received a copy of the minutes of the May 21, 2007 meeting and requested any additions, corrections or deletions.

            There not being any,


On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the minutes of the May 21, 2007 meeting were approved.


FOURTH ORDER OF BUSINESS                    Presentation by CH2M-Hill of the Final Conditions and Assessment Report for Pump Stations 1 & 2

            Ms. Early stated at the last meeting, we distributed the final report.  Since that time, we met with District staff, Mr. McKune and Mr. Fredericks and went through the itemized list.  We removed the items we do not want to do at this time.  This is just a discussion item as far as if there is money available to move forward with some of these improvements and repairs to the pump stations.  The items in blue are the ones FPI is providing the labor for.  Because they are so late, they agreed to provide the labor for us.  Do you know what the labor cost savings are?

            Mr. McKune responded they have not given us a breakdown.

            Ms. Early stated we just have to divide the parts.  There are 17 per station.  We decided to remove the mustard colored items after the meeting with District staff.  The items in yellow are high priority with the pump stations needing to be repaired, improved and replaced. 

            Mr. Hanks asked is the fencing replacement for the exterior of the trash rack?

            Ms. Early responded yes.

            Mr. Fennell asked how often do we need to replace the LP gas tank?

            Mr. Hanks responded we should speak to FPI about extending its life.  $100,000 can go for in terms of extending its life.

            Ms. Early stated we decided not to do it.

            Mr. Fennell stated six or seven years ago, we replaced the pump.  I thought we replaced the LP gas tank at the same time.

            Ms. Early stated I could not find any history.

            Mr. Hyche stated I do not recall us doing so.

            Mr. Fennell stated Mr. Roger Moore had an issue with was who was going to do the replacement.  There was a great deal of discussion about the contractor supplying the gas owning the tank.  What determination do you make when you replace it?

            Ms. Early responded one of the issues was the amount of storage for fuel and how many days we can operate the pumps without fuel.  Currently we can operate for two to three days but we were trying to increase it to six days, if we were hit by a hurricane.  However, after we saw the cost, we changed our minds.

            Mr. Fennell stated this is an entirely different question.  At the plant we have enough fuel to last us a week, maybe more.  If you are saying we only have enough fuel for the pumps for two to three days, this is a big issue. 

            Mr. Hanks stated keep in mind; you have this emergency flap gate, which Mr. Hyche says needs to be repaired. 

            Mr. Daly asked what is the capacity?

            Ms. Early responded I do not know how much water it can hold.

            Mr. Fennell stated good question.

            Ms. Early stated it is not going to be as much as you pump.

            Mr. Fennell stated the way our models work; we are counting on the rain lasting over two to three days.  On the third day, we run out of gas.

            Mr. Hanks stated we need to contact a gas company to see about getting a line to supply the gas.

            Mr. Hyche stated the problem with running a line is we do not have an easement.

            Mr. Hanks stated the easement is not going to be the issue but how we are going to get the gas in there.  The question is one of liability and whether the fuel trucks can get through.

            Mr. Fennell asked was there a rationale for three days?

            Ms. Early responded originally we had this item on the task list but after the last meeting and looking at the budget, we decided this was a big ticket item.  I do not think they are leaking.  They are operating.

            Mr. Hyche stated if you want, we can test them.

            Mr. Fennell stated I think this should be done immediately.  The real issue is to get an LP truck back there and down the canal in order to get gas in there.  This has to occur on the second day after a hurricane.

            Mr. Hanks stated you have a few days leeway.  How many hours will it run continually?

            Mr. Hyche responded a few days.

            Mr. Hanks asked when was the last time you had those pumps on continual run for two days?

            Ms. Early responded never.

            Mr. Hanks asked is this with three or four pumps running continually?

            Mr. Hyche responded you are not allowed to run four pumps continually.

            Mr. Fennell stated if you receive a warning, they will be pumping at least the day before.  Make sure we can get a truck in there.  After the rain comes, depending on how bad it is, you will be pumping like crazy.

            Mr. Hanks stated every storm within the last three to four years; we have not received more than six inches.  If you run it for two days, by the third day you are tapering out. 

            Mr. Fennell stated the lower the intensity of the hurricane, the more rain you are going to get because it does not move on.  Some have been known to back up, come back and hit us again.

            Mr. Hanks stated keep in mind, all we are looking at is a 1% chance.

            Mr. Fennell stated we saw we could not get supplies in here for several days and we did not even get hit hard.

            Mr. Hanks asked did they come in with propane?

            Mr. Hyche responded propane was not a problem.  Diesel was a problem because Port Everglades was shut down.

            Mr. Fennell stated we need enough fuel to get us past two or three days and up until a week.

            Mr. Hanks stated we do not have enough money in the budget.

            Mr. Fennell stated this is a different budget. 

            Mr. Goscicki stated we placed $580,000 plus some contingency for this project into your upcoming fiscal year’s budget.

            Ms. Zich stated this is a revised budget because the backup is not correct.  Someone sent me this budget.  If you look at the old budget, the numbers are right.

            Mr. Daly stated I apologize.

            Mr. Hanks asked are these projects allocated in the 2007/2008 budget?

            Ms. Early responded not all.  We took the LP tank out.  The bright yellow and blue items are what we totaled.

            Mr. Hanks stated $261,009.75 is in the proposed budget.  The items not highlighted are what we removed, including the LP gas tank replacement.

            Mr. Fennell asked is this an operating budget as opposed to a capital budget?

            Mr. Goscicki responded both.  This is the General Fund Budget, including both your operating and capital expenses.  We tried to wrap all of the financing onto one page to show what dollars you have left at the end of the day.  This is what Mr. Daly and I were working with on last Friday.  We wanted to come up with a better presentation.  The bottom line of what the Board needs to know and the reason why we placed this pump station discussion before the budget discussion was because it has a budgetary impact.  We currently allocated $580,000 for this project for next fiscal year.  We recommend you not increase your assessments and keep them level at $150.71 per unit.  At the end of next year, you will be down to a $217,000 uncommitted fund balance.  You are going from a fund balance of $1 million at the beginning of this year, down to $217,000 in uncommitted fund reserves.  You still have another $264,000 in reserves to cover your first quarter operating expenses.  You are spending reserves that have been here. 

            Mr. Hanks stated you do not have any cash on hand for any hurricane cleanup.

            Mr. Goscicki stated you are left with $217,000.

            Mr. Hanks stated at the last meeting, we discussed what you thought was a reasonable reserve.  As you recall, we were talking about $1 million.

            Mr. Goscicki stated we were talking in this order of magnitude.

            Mr. Hanks asked has anything changed with regards to discussions with this amount being a target?

            Mr. Goscicki responded no.  This is a good goal to get to but not something you expect to have tomorrow.  You have $217,000 and are carrying this cash reserve to bridge your revenue stream.  This revenue comes in as a lump sum a couple of months into your fiscal year and will be there after the first couple of months to deal with emergency situations.  You are not broke as you have some operating capital.

            Mr. Hanks stated this is fine if we do not get hit with a hurricane early in the season.  We are still five months from getting money from the Tax Collector.  As much as we are talking about being proactive with the pump stations, we need to be proactive with our finances and have the funds on hand and available so we can respond.

            Mr. Goscicki stated this is why we presented the budget in this fashion.  We wanted to keep your assessments at the same level; with you getting a nominal investment of $200,000 in reserves.  You will be funding this amount every year.  The way we structured this budget, if you get the same operating expense, you can put in another $200,000 and carry it over.

            Mr. Fennell asked how many reserves do we currently have?

            Mr. Goscicki responded at the beginning of this fiscal year, we are showing $1.2 million.  We are estimating at the end of this fiscal year, you will have $400,000.  In the last two years, you have been dealing with hurricane issues.

            Mr. Fennell stated I am looking at some items as a capital improvement.  We should be paying for it.  I do not think we want to spend down reserves.  If we are going to expend this money, we should be charging for it.  What do you think, Ms. Zich?

            Ms. Zich responded yes.

            Mr. Goscicki stated I will pull out a calculator before we get to this budget item and figure out some recommended increases for you.

            Mr. Fennell stated we are saying, “If we are going to be spending $500,000, we should obtain another $10,000 in revenue”, which ends up being another $40 to $50 per unit.

            Mr. Goscicki stated I ended up with $11,600.  The question is whether you need the money all at once or build it up over seven years.

            Mr. Fennell stated the problem is with the maturation of the plant.  We have done a good job of keeping the pumps going but frankly the physical parts like the buildings are 30 years old and are dilapidated. 

            Ms. Early stated ASE put out a report about the Katrina pump stations, which said their doors were not hurricane proof.  This is why we are recommending hurricane proof doors.  There is a door but it is not hurricane proof.

            Mr. Hanks stated if the doors go, you lose the integrity of the roof and you get water inside of the building, causing your motors to break down and losing your pump capacity.

            Mr. Goscicki stated we budgeted $600,000 for emergency repairs.

            Ms. Early stated the only item not budgeted for is the LP gas tank.

            Mr. Goscicki stated if you increase your assessments, we have to send a first class notice to every resident saying, “We are increasing your assessment”, just as the state came in and said “We are dropping your property tax”.  This is one of the reasons we tried to give you a balanced budget with no increase in assessments this year.  One of your neighboring districts, Pine Tree WCD is in a tighter situation than you are.  Pine Tree WCD spent down their reserves due to hurricane remediation and tree removal replanting.  They are taking out a Line of Credit with SunTrust.  It will cost them a few dollars to maintain but they did not want to have a significant assessment increase.  However, they need to have an assessment increase just to stay even.  You have a reserve.  If we need to get into an additional reserve, rather than creating cash, we can enter into a Line of Credit to give us more security. 

            Mr. Hanks stated we tried a short term funding for the Enterprise Fund.  Is the Enterprise Fund any different than the General Fund? 

            Mr. Goscicki responded this is like a short term loan.  In this case, we set up a Line of Credit and not borrow any money.  If we borrow $5 million, we want to have the ability to access this money but you would not access it unless you have a hurricane.  It is essentially an insurance policy.  You are taking it from a bank and will be paying fees. 

            Mr. Hanks asked what fees are we talking about to maintain the relationship with the bank?

            Mr. Goscicki responded if I recall, Pine Tree WCD paid $10,000 to $15,000 to set up the program and for maintenance costs. 

            Mr. Fennell stated we can set the assessment to any amount.  What is the current amount per unit?

            Mr. Goscicki responded $150.

            Mr. Fennell asked at the next meeting when we pass this budget, can we set the assessment?

            Mr. Goscicki responded the Board can certainly increase the assessment.  If the Board wants to approve a budget with a requested increase in assessment, we are required to send a notice to every property owner notifying them of this increase in assessment and the date when the public hearing is held.

            Mr. Lyles stated we used the property tax roll for our assessments.  Chapter 197 of the Florida Statutes applies to the adoption of a budget and setting of assessments.  One of the provisions has been construed by the appellate courts to mean if you adopt an assessment for the first time or increase an existing assessment by any amount, you are required to notify every landowner/taxpayer within your jurisdictional limits by first class mail.  The letter will state the amount of the increase, the reason and the date, time and place of the public hearing.  We can have the budget hearing with just a notice in the newspaper.  This is what will occur at the July meeting.  However, if you increase the assessment, we will have to follow the appellate court decision requiring individual mailed notices by first class mail.  This is what staff has suggested.

            Mr. Fennell stated by doing this we are saying we spent more money than we budgeted for.

            Mr. Goscicki stated you spent more money this year and last year with hurricane mitigation.  Your reserves were used for all the hurricane mitigation work.  Even though you received significant reimbursement, you spent a great deal of money.

            Mr. Hanks asked when are we going to be back up to the target reserve?

            Mr. Goscicki responded at this rate, it will take three to five years to reach $1 million.

            Mr. Fennell stated we had a reserve of $1 million last year, which helped us.  Some districts did not have enough money in their reserves to do their mitigation work.  Their big concern was money.

            Mr. Goscicki stated some districts took out a loan for $5 million for the hurricane mitigation work.  You are correct; they did not have funds on hand but were able to get some funds fairly quickly.

            Mr. Fennell stated I would not want to see us spend down our reserves.  If we need more money, we will have to send out notices to the taxpayers saying we are going to do this.  We can also take out a bank loan.

            Mr. Hanks asked can we increase their assessment after 12 months to pay off $5 million?

            Mr. Goscicki responded yes.

            Mr. Hanks stated for years, we have been under the assumption we have not had to worry about cleaning costs.  The truth is we are going to have to increase assessments either before a hurricane hits to be proactive or pay additional fees to borrow money from a bank and incur assessments after a storm.

            Mr. Fennell stated I applaud the City of Coral Springs.  After the first time they got hit with a hurricane, they had money set aside from the collection of assessments for the cleanup.

            Mr. Hanks asked how much harm will we do the District if we had to wait a month or two?

            Mr. Goscicki responded the option we are looking at is for you to take out a Line of Credit so you have the funds if needed next year.

            Mr. Fennell stated we have $1 million in reserves.  Correct?

            Mr. Goscicki responded you started the year with $1 million but by the end of the year, it will be around $300,000.

            Mr. Fennell stated we need to balance the budget for the items we need to have.  Therefore, we need to increase assessments in order to do so.  We either pay now or later.  I wonder whether we should do long term financing.  Many of these items are maintenance related. 

            Ms. Zich stated we had $1 million at the end of last year and have $400,000 now.  This means we spent $600,000 on extra items due to the hurricane.

            Mr. Fennell stated we spent $430,000 for hurricane cleanup.

            Mr. Goscicki stated by raising assessments, you will raise $400,000, which is significant.  This goes right into the reserves.  Do you need to move on this quickly?  You did not build your initial $1 million overnight.  You are currently in a solid financial position.  You are not deficit spending.  You spent your reserves on appropriate capital reserves items; not for funding operations.  Other districts were funding their operations out of reserves for two years.  I do not recommend doing this.  You are funding your current operations out of your revenue and putting money towards reserves with your current revenue.  I recommend against doing a 20% increase in assessments at this time in this climate.  I want you to think long and hard about whether or not you want to do this.

            Mr. Hanks stated we are talking about it taking three to five years to bring us back to having $1 million in reserves at our current assessment.

            Mr. Goscicki stated correct.

            Mr. Hanks asked if we were to increase our debt assessments by $10, would we be looking at it taking two to four years to build up our assessments to $1 million?

            Mr. Goscicki responded $10 per unit will bring $100,000 per year in revenue.

            Mr. Fennell stated the fact is, we have not received any increase in revenue since the last time we raised assessments.  This is a per unit assessment.

            Mr. Goscicki stated correct.

            Mr. Fennell stated we kept our rates where they should be and do not have excess funds.

            Mr. Hanks stated this year we can increase the assessment per unit by $40 and next year decrease it.

            Ms. Zich stated I am concerned about raising assessments.

            Mr. Daly asked is there a concern because you are also raising the water and sewer rates?

            Mr. Fennell responded yes.

            Ms. Zich stated the residents have to see we have not raised the rates in 15 years.

            Mr. Goscicki stated some of the arguments you will get from residents is why they are paying for you to amass $1 million to pay for contingencies they will never get the benefit of.

            Mr. Hanks stated you could live here the rest of your life and never receive any benefit.

            Ms. Zich stated everyone here received the benefit of the $600,000 we used.

            Mr. Fennell stated I think we should put out a notice of increase in assessment and find out what the residents have to say.  Maybe they will come to the public hearing and say, “No Way!” or maybe they will say “Yes”.  When is the public hearing?

            Mr. Lyles responded July 16th.  In order to put all of this into play, you have to approve by resolution, the proposed budget with these changes by resolution.  Staff has to prepare a 20 day written notice to the property owners.

            Mr. Hanks stated in the minutes, there was some reference to CDDs versus Special Districts and the noticing requirements.  I recall the minutes saying we needed 30 days.

            Mr. Lyles stated we are looking at 20 days.  You are confusing this with a CDD who has to provide the budget to the county 60 days before the public hearing.  They do not approve it or disapprove it.  It is informational but there has to be a 60 day gap between approving the proposed budget and setting the public hearing for adoption of the final budget.  In our case, since we are not a Chapter 190 CDD, we have a much shorter time period.  We have to publish the advertisement in the newspaper twice, two weeks before the public hearing.  If you increase assessments today, by virtue of this amendment to the proposed budget, there will be a 20 day mailing period in order to meet on July 16th.

            Mr. Fennell stated I want to modify the budget to a point where the funds are coming from the reserve but from straightforward surplus and increase assessments.  The funding is not for the normal operations but we want to pay for the capital improvements listed on the task list provided by the engineer.  We already had staff go through this and they pared it down to something more than we wanted.  The question is how to pay for the capital improvements.

            Mr. Hanks asked when was the last time the assessment was changed?

            Mr. Fennell responded we changed it right after the hurricane hit. 

            Mr. Hanks asked is this the second increase?

            Mr. Fennell responded yes.  Once we paid off our bond issues, we lowered the amount we were charging the residents.  We had cash reserves until Wilma came along.  We can put out a bonds issue, but for a couple of million dollars, this is probably not worth doing.  I propose we fund our capital improvement through an assessment.

            Ms. Zich stated I hate to do this.  This is why I am sitting on the edge of whether or not to do this.  We just increased the water rates.

            Mr. Hanks asked did our Fire Assessment increase?

            Mr. Daly responded it was proposed to increase.

            Mr. Hanks stated we are talking about our assessment increasing from $150 to $190 per unit.

            Mr. Fennell stated for the entire year, which is only an increase of $4 per month or $1 per week.

            Mr. Goscicki stated when we get to the budget discussion; we will add a specific dollar amount to the budget and set the public hearing.

            Mr. Fennell stated staff did a great job looking at pump stations 1 and 2 and figuring out what we need to do in order to keep them running.  It has always been the option of the Board to make sure they work well and there are no problems.  We know from our flood studies, we cannot let them break down.  There is no wiggle room, especially in the eastern part of the District.

            Mr. Hanks stated considering some of those costs we were contemplating.

            Mr. Hanks asked is there room on the site for an additional propane tank?  Instead of doing a total replacement, we can take one out of service.  We have to consider the excavation cost versus the installation cost.  We will not have any disposal fees.  How much does an additional one cost?

            Mr. Hyche responded around $1,200.  I can check on the cost for a pressure tank.  You are required to replace the fuel system every five years.

            Mr. Hanks asked for the above ground?

            Mr. Hyche responded for the below ground ones.

            Mr. Fennell stated we will know more by the time this comes back to us.  Mr. Hanks has a good idea of adding another tank of the same size next to it.  We are looking for a proposal at the next meeting for the additional tank along with some other ideas.


SIXTH ORDER OF BUSINESS                        Staff Reports

            A.        Manager

            Mr. Fennell asked what is the status of our bond issue?

            Mr. Goscicki responded we are moving along.  An item we were not able to get onto the agenda was the engagement of Bond Counsel.  We also have a work authorization for the engineers to complete the Bond Feasibility Study.  We are still looking at both short-term and long-term bond issues.  Bond Counsel along with your Underwriter and Engineer are working diligently with your current bondholders to restructure our current bond resolutions, allowing for this new debt structure.  I received emails this week from Prager, Sealy indicating this process is moving along fairly well.  They had some meetings with the current bondholders and insurance agency.  We need to have the Board approve a Bond Counsel Agreement, which I received the day after your agenda packages went out.  You will see this item at the next meeting as I need time to review it. 

            Mr. Fennell stated we received an amended agenda.

            Mr. Goscicki stated it was probably mailed out to you as a separate item.

            Mr. Lyles stated the concern was you needed time to look at it.  However, if you received it as a supplement to the agenda package, you may act on it now.  It is up to the Board.

            Mr. Fennell asked is time of the essence?

            Mr. Goscicki responded absolutely.  They are working and want to formalize the relationship.  You already authorized and selected Ruden, McClosky as your Bond Counsel.  As we worked through the initial states, they kept track of their time.  However, they got to the point where they wanted you to formalize their agreement at a lump sum price.  We reviewed the agreement and feel comfortable with it.  It is not an insignificant sum of money; however, this is a relatively complicated bond issue by having to do an original Bond Anticipation Note, follow-up bond, dealing with your existing bond resolutions and existing covenants.  The other issue we need to take up today is authorizing the engineer to complete the Feasibility Report, which they are currently working on in good faith.

            Mr. Fennell asked what does the attorney think?

            Mr. Lyles responded I reviewed the letter and discussed it with Mr. Goscicki.  It is a significant fee but as he explained, it is a significant undertaking.  There are at least two components; the BAN and pre-bond issue structure.  The reason for the two components is in virtually every bond deal; Bond Counsel receives the larger fee of any professional involved.  Disclosure Counsel is sometimes called Underwriter’s Counsel.  The Underwriter is Prager, Sealy and they typically have a law firm, prepare the Offering Memorandum, advising the Underwriter and playing the role.  What is proposed here is having Bond Counsel serve as Disclosure Counsel.  They will prepare the documents, file with the regulatory agencies and provide the continuing obligation to disclose material changes in the financial structure.  They combined this into one law firm with two components to the fee.  As explained in the letter, their fee does not get paid unless they have the bond closing.  If you change your mind and decide not to go forward, they will want to be reimbursed for the labor they put forth.  They also issue tax opinions to the security and investors market to get these bonds sold at the lowest possible rate they can.  They are tax exempt.  This is a complex undertaking in the broad scope.  I worked with this firm and this attorney on a number of occasions, including your refunding a couple of years ago.  We know we will get top notch performance from them.

            Mr. Hanks stated the fee we are paying is $150,000.  Is this fee ordinary?

            Mr. Goscicki responded it is on the high side, based on the complexity of the current situation as we are going out for new water and sewer bonds.  If it was for the existing debt in place, this would be a significantly lower fee and simpler process. 

            Mr. Hanks stated we are looking at a fairly time consuming process.

            Mr. Goscicki stated correct.

            Mr. Lyles stated this fee is in line with several financings done in NSID over the past 24 months for a similarly complex issue.  In some cases, it involved infrastructure and not a Water Plant. 


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the engagement letter with Ruden, McClosky to serve as Bond Counsel was approved.


FIFTH ORDER OF BUSINESS                         Current Status and History of Open Work Authorizations

            Mr. Fennell asked which ones do we need to approve?

            Mr. Goscicki stated this item is not for approval purposes but informational.  The Board asked for this item to be placed on the agenda on a monthly basis.  Your engineers are doing an unbelievable amount of work and this is a nice way for you to see where they are on each activity and the amount of money spent to date.  This is a good tool for your staff and managers to review with the engineers what they are doing. 

            Mr. Hanks asked does this reflect the $156,000 recently voted on for CH2M-Hill?

            Mr. Goscicki responded yes.

            Mr. Fennell asked what about the work authorization you asked me to sign last week for $32,000?

            Ms. Early responded this was a new work authorization.


SIXTH ORDER OF BUSINESS                        Staff Reports

            A.        Manager

i.       Distribution of Proposed Budget for Fiscal Year 2008 and Consideration of Resolution 2007-6 Approving the Budget and Setting the Public Hearing

            Mr. Goscicki stated the budget was distributed to the Board.  It reflects an assessment of $150 per unit.  The Board has been considering whether or not to increase this assessment to generate additional revenue in order to help re-build your reserve funds.  What we need from the Board at this time is a motion approving the budget for purposes of setting the public hearing.  If the Board approves an assessment greater than $150, we will need to send out individual notices to the affected property owners.  We are planning to hold the public hearing at your next meeting, based upon action you take today.

            Ms. Zich stated at the last meeting, we said we are going to set aside $75,000 for Vegetative Management.  I do not see where this was added.  We talked about adding this item under repairs and maintenance.

            Mr. Goscicki stated you are correct.  It will need to be added.

            Ms. Zich stated add it under repairs and maintenance.

            Mr. Fennell asked what is wrong with making a separate line item?

            Ms. Zich responded the accountant said there were only certain accounts you can use.

            Mr. Goscicki stated we get into chart of account issues and the charts we can use for budgeting.  However, we can certainly show this in the backup. 

            Ms. Zich stated list it separately like the other items under Repairs and Maintenance on page 12.

            Mr. Goscicki stated the way the budget is developed; we look to see how the numbers balance out with the dollars available.  We go through a process to try to find something workable.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the proposed budget was amended to reflect $75,000 will be added under Repairs and Maintenance for Vegetative Management.


            Mr. Hanks stated I am interested in seeing how we are going to handle this.  Just because we have it in the budget does not mean we have to spend it.

            Mr. Fennell stated the other item we wanted to amend in this proposed budget is not using the carry forward surplus and increasing the assessment levy so we can pay for our improvements.

            Mr. Goscicki stated you currently have $600,000 in your budget for next year, which can be allocated for the pump station 1 and 2 improvements.  This money is on hand, which we can use if we get hit by a hurricane next week.

            Mr. Fennell asked what number do we want to increase the assessment to?

            Mr. Goscicki responded I am looking for an assessment level this Board is willing or “desire” to move to.  We are talking about building a reserve.  The question is what assessment level you are comfortable moving to.  We will re-work the budget using this number.  This is the number we need to know in order to send out the public notice in the next 10 days.  The current assessment is $150.71.  Every $10 is going to generate $110,000 of additional revenue for the Board.

            Mr. Hanks asked do we currently have a projected fund balance of $430,000?

            Mr. Goscicki responded this is what we project to have at the end of this year.  With your current assessment, assuming you went forward with an improvement program, you will have an uncommitted fund balance at the end of next fiscal year of $217,500, which is the last line under Field Operations for Reserves for R&R and Emergency. 

            Mr. Fennell stated I propose we increase the budget by $37.00 per unit to $187.70. 

            Mr. Goscicki stated this should put your revenue at $600,000 by the end of next fiscal year. 

            Mr. Fennell stated this balances us out to where we do not spend any carry forward surplus.

            Mr. Goscicki stated you are only spending half of the carry forward surplus.  You are starting out with $430,000 and ending the fiscal year with $217,000.

            Mr. Fennell stated we could take anything out of reserves and try to balance it out and not have an excess.  What are our exact reserves?

            Mr. Goscicki responded I cannot tell you as we do not know.

            Mr. Hanks stated keep in mind; we have capital projects out there, which we agreed should be done.  They have not been approved and we have those funds available. 

            Mr. Fennell asked do we?

            Mr. Goscicki responded yes.  We budgeted $580,000 for these pump station improvements.

            Mr. Fennell asked do we have any projects for next fiscal year?

            Mr. Goscicki responded no.

            Mr. Fennell stated we received a task list from the engineers for longer term projects such as an interconnect and digging canal connections.

            Mr. Hanks stated you are not looking at anything being handled by the assessments.  You are also not talking about something under $1 million.  It is going to cost $10 million or more.  Therefore, you want to think long and hard about whether we are going forward with these assessments.

            Mr. Goscicki stated Mr. Daly pulled up your assessment history over the last three years.  In 2004-2005, the assessments were $82.  In 2005-2006, the assessments were $91.38 and in 2006-2007, we increased them to $150.

            Mr. Fennell stated because of the hurricane.

            Mr. Hanks asked where has this money been going and why were we not paid back in the reserves?

            Mr. Daly responded a lot of the funds went into the canal bank restoration, which was not NRCS funded.

            Mr. Hanks stated since this project was completed, we have not done any other canal bank restorations.

            Ms. Early stated we spent $580,000 for the pump stations.

            Mr. Hanks stated we might as well call for the assessment increase.  Can we always drop back down the assessment per unit from $187.70 to $160 after we hear public comment at the public hearing and decide we do not need to raise assessments to $187.70?

            Mr. Lyles responded you can always go down.

            Mr. Goscicki stated you cannot go up.

            Mr. Hanks stated I want everyone here to think of ways to drop down the assessment.  Four raises in assessments in six years is not a good track record.  However, I want to bring the reserves back up as we need to make improvements to the pump stations.  It may be a different story, once we get the reserves back up.

            Mr. Goscicki stated this is one item we discussed in-house and doing an analysis of what is critical and in poor condition and needing to be dealt with first.  We are trying to do better prioritization and we may be able to trim down the list.  This is not saying we will not do these items but we may not do them all this year.  We can take on Phase 1 this year and Phase 2 next year or the year after.  With this budget, you are generating $200,000 in additional reserves every year.  This is why we show this amount in the reserve and expense column.

            Mr. Hanks stated I want to be careful about generating fat in the budget.

            Mr. Fennell stated there is another way to look at this, which is we took out $430,000 but then put back $270,000.

            Mr. Goscicki stated you are correct.  We have been working on re-formatting the budget to give you a better view of this fund balance.  With the maturity of this District and as you get into capital planning and programming, it is important for the Board and management team to see the balance clearly laid out.  In prior budget presentations, the way the dollars were shown, those dollars were not there.  The most significant change we made from the previous budget was to move the reserve dollars down below the expense line to show you what you have to work with.

            Mr. Fennell stated this is still confusing because you added your cashflow.  In other words, you are taking out the $430,000 carry forward surplus out of the revenues.  Then you are saying we have a reserve for first quarter operating of $264,000.  This means we need to take money out of the bank in order to pay for this quarter.  Then we are going to put back $217,000.

            Mr. Goscicki stated the $264,000 is the expense you are going to have during the year.  It is being shown as an expense.  The way we want like to move forward with this budget is to drop the reserve out of the operating expense and show below the line.  The way we recommend going forward is to show the revenue with no carry forward revenue.  We only show your assessments, interest income, other miscellaneous revenue, current revenues and current expenses.  You are going to generate a positive cashflow flowing to this reserve item.  Off of this reserve, comes any capital improvements or committed reserves you have to put aside.  Your bottom line is the uncommitted fund balance going forward, which will build each year.  This is what we are trying to get to in terms of budget presentation.  It clearly shows what your working capital is to fund your capital improvement programs and the fund balance for emergency purposes.  In this year’s budget, we netted all this out in terms of what you expect to have at the end of this year.  You started this year with $2 million in uncommitted reserves and are going to wind up with $400,000.  We took this $400,000 and put it past the revenue for this upcoming fiscal year but showed the expenses and the fact you need $264,000 for operating capital until your revenue comes in and another $217,000, which is your balancing number.  This is the number balancing out your current revenue to keep the revenue fixed, run all of your expenses and the $217,000 is what closes the gap.

            Mr. Hanks asked can we compare the $-784,000 with the $217,000 and say we cut $900,000 out of the budget?

            Mr. Goscicki responded yes.  In this current fiscal year, you tapped into your reserves by $784,000 because you spent $1.6 million in Repairs and Maintenance for hurricane activities.  You only received $300,000 in revenue from NRCS this year.  The other revenue was bumped to the previous year.  Even though you received it this year, it was last year’s revenue.  This is how you ended up with $1.2 million in carry forward from last year

            Mr. Hanks asked where is the $1.2 million in the budget?

            Mr. Goscicki responded it shows as your unaudited fund balance at the end of the fiscal year.  This item previously showed on the top line as carry forward surplus on the revenue side.  In the first column “Adopted Budget 2006/2007”, you were showing cash forward surplus of $250,000.  We are now saying, “You really started the year with $1.2 million”.  This is due to how we booked the revenue received this year.  It did not show as NRCS revenue.  It showed as cash from last year, which is confusing.  You spent $1.6 but you had some revenue returned to you, which we carried forward. 

            You are ending this year with $400,000 in reserves, which is not a bad place to be for the size of this operating budget.  This is six months of operating reserve funds and not an insignificant sum of money.  You are funding next year with $600,000 in capital improvements and with $200,000 plus in reserves.  You are funding the capital improvement, somewhat out of reserves but mostly out of your current revenue stream.  Your revenue stream at $115 per assessment is sufficient to cover $500,000 plus in capital improvements, plus borrowing $200,000 as you are still generating $400,000 in reserve funds.  If you funded no capital improvement, you would be generating $400,000 towards your reverse funds with your current level of assessment.  This is why I am recommending you use your reserve funds to pay for your capital improvement program. 

            Mr. Fennell stated there are items we can put off until next year like those tanks.  We still have a great deal left to do out there.  I see us having spent a good amount; this year and next year in order to get those pump stations up to speed.  Maybe we have not taken on major revisions, which I do not see this changing.  The Board is not comfortable with the $200,000 reserve.

            Mr. Goscicki stated it depends on where the Board wants to go with the revenue.

            Mr. Fennell stated someone could argue there are not many trees left.

            Mr. Hanks stated keep in mind; it is not the amount of trees left to remove but maintenance of the trees not removed.  The city is probably going to have the same expectation as the residents.

            Mr. Fennell stated we should increase the assessment from $150.70 to $187.70.  We can look at assessing less at the public hearing.

            Mr. Hanks stated we welcome public involvement.

            Mr. Fennell stated we should be funding these improvements.

            Ms. Zich stated we need to do a lot of replacements.

            Mr. Hanks stated we should also keep in mind whether or not it makes sense to rehabilitate the existing structures, I did not see anything on the task list about improving the tie downs for the roof.

            Ms. Early stated there was a roof replacement.

            Mr. Hanks asked is this contemplating re-straps and tie downs and making sure there is adequate reinforcement in the walls to ensure the roof does not blow off in a hurricane?  There are other issues associated with these buildings.

            Ms. Early responded you want to make sure they are hurricane safe. 

            Mr. Hanks stated if you take an existing building and replace the garage doors, you are still going to have weak links.  If your roof goes, it does not matter if your garage doors are still intact.  You still have water in the building.  I want to be careful as we go forward with the capital improvements.

            Ms. Early stated one of the notes I made was on what you are talking about.

            Mr. Fennell stated I think you have an excellent point.  One of the problems I have seen before when you are scraping monies out of every corner, after awhile you get to a point where you are eliminating things you should not be eliminating.

            Mr. Hanks stated it is not a question of trimming down this list.  It is a question of if we spent $200,000, whether we are getting the level of protection we really need.  We may want to build a new building outside of the current one and bring the roof to code.

            Mr. Hyche stated Tamarac built all new electric pump stations.  They have stainless steel pumps.  I received a preliminary cost of less than $1 million.  We are currently getting the paperwork on the bid and analysis on the type of fuels they use. 

            Mr. Hanks stated please share this with me, once you receive it.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor Resolution 2007-6 Approving the Budget and Setting the Public Hearing for July 16, 2007 at 4:00 p.m. at the District Office, 10300 NW 11th Manor, Coral Springs, Florida was adopted as amended, changing the Assessment Per Unit amount from $150.70 to $187.70.


            Mr. Goscicki stated we will be sending the assessment letters out in the next 10 days.

            Work Authorization for Feasibility Study

            Mr. Goscicki stated this work authorization is number 38 with CH2M-Hill for preparation of an interim funding evaluation report as well as preparation of the engineering reports for the District’s Series 2007 water and sewer bond issue.  

            Mr. Hanks asked what is this all about?

            Mr. Green responded in support of issuing the bonds for the water and sewer system, we have to prepare an Engineer’s Report.  We have also been told by Prager, Sealy if we want to get the interim funding, we need to prepare another report in order for them to change the covenants and allow them to issue additional bonds.  This work authorization is for the interim funding report as well as the engineering report for the bond issue.

            Mr. Fennell stated we already have one of the reports.

            Mr. Goscicki stated they will use this report to prepare the engineering report talking about need and cost to support this bond program.

            Mr. Hanks stated so this is above and beyond what we have already contracted with.

            Mr. Goscicki stated correct.

            Mr. Fennell asked do we need to do this to get the bond?

            Mr. Green responded yes.

            Mr. Goscicki stated we feel this is a reasonable amount for the work involved.  They originally had a work authorization for just the bond feasibility but added a few thousand more to do the interim report.

            Mr. Hanks stated we paid $36,000 for the rate study analysis, which told us if we needed to increase our rates.  Now we are spending $32,000 to prepare an engineering report.  Are you saying Prager needs something different?

            Mr. Goscicki responded yes.  You are taking the rate study analysis and translating it to something Prager, Sealy will understand on why you need to spend the money.  It goes beyond this.  It paints the picture of the entire situation the District is in and where this bond program fits with the current situation in terms of your capacity, need and why you are doing the program.  It is much more than justifying why you are spending the money than in terms of something being broken and needing to be fixed and why.

            Mr. Green stated it is mostly to make sure the people who are going to review this report; the bond insurers and rating agencies understand it.

            Mr. Lyles stated there is one other element.  One decision that has not been totally made yet but we have been discussing the issue of validation of these bonds.  Bond Counsel believes, based upon your Special Act and history, it is not required for these bonds to be validated.  However, we have also discussed the utility and the wisdom of going through a court validation process.  This is where I bring a complaint to Circuit Court to validate these bonds and we would have a final judgment blessing all of this.  A city or Chapter 190 CDD absolutely has to validate these bonds.  However, because of peculiar language in your Special Act, you are not required but may validate these bonds.  We think by doing these financings and people questioning how things were done, it would be wise to have the bonds validated.  This is the recommendation we are going to make to you.  This report will assist in this effort and be part of the record entered into in the back of evidence by stipulation potentially resulting in testimony by this engineer at a bond validation hearing in Circuit Court.


On MOTION by Ms. Zich seconded by Mr. Hanks with all in favor Work Authorization No. 38 to CH2M-Hill for preparation of engineering reports for the District’s Series 2007 water and sewer bond issue in the amount of $32,231 was approved.


                        iii.        Monthly Water & Sewer Charts

            iv.        Utility Billing Work Orders

            v.         Complaints Received/Resolved

            There not being any, the next item followed. 

B.        Attorney

            Mr. Lyles stated I am pleased to tell you, NSID’s amendment to their Special Act, which are identical to your amendment was approved last week and signed by the Governor.  For some reason, CSID’s amendment is not on the Governor’s desk.  We were given an update on the status this afternoon.  We were told this is not a negative sign and it does not have any significance, other than the way things are getting processed through in the special session.  It seems almost certain, with the NSID one having been signed; your bill will be signed and tentatively become a law without the Governor’s signature between now and the next meeting.

            Mr. Hanks stated so no news is good news.

            Mr. Lyles responded the news that the amendment for NSID was approved is good news.

            At the last meeting, President Fennell and Mr. Hanks had questions about the insurance company who was listed in support of a proposed contract for a project.  The questions were in regards to the rating of the insurance company and what cities were requiring in terms of the coverage on their contracts.  We looked at several city contracts including Ft. Lauderdale and found they provide $1 million general liability coverage.  The rating for Great American Insurance Company is A & Best, which is an industry rating of excellent.  Standard & Poors in their terminology gave them a strong rating.  Moody’s gave them a rating of A3, which is good and Finch gave them an A plus rating, which is hot.  The average of all of those ratings is A.  Therefore, I think you can be comfortable with Great American Insurance Company.

            Mr. Hanks asked can anything be done in the future in regards to our desire to have this type of rating?

            Mr. Lyles responded yes.  You can require in your bid specifications for all your contracts a best rating of A.  It is a matter of changing the form of the bid specifications for your public works contracts to make this a requirement.

            Mr. Hanks asked do you think this will have any material effect on the budget?

            Mr. Goscicki responded it will limit the contractors bidding on smaller projects but will not have any effect on the larger ones.

            Mr. Hyche stated the question you had was for the Fish Tech bid, which is a smaller project.

C.        Engineer

            There not being any, the next item followed.


SEVENTH ORDER OF BUSINESS                  Supervisor Requests and Audience Comments

            Mr. Hanks asked did the contractor starting the work on the culvert cleaning?

            Mr. Fredericks responded yes.


EIGHTH ORDER OF BUSINESS                     Approval of May Financials and Check Registers

            There not being any questions,


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the financials and check registers for May 31, 2007 for the General Fund in the amount of $43,401.07 and for the Water and Sewer Fund in the amount of $756,567.29 were approved.


NINTH ORDER OF BUSINESS                       Adjournment

            Mr. Daly asked in our continuing efforts with the city, I spent three hours at a program they had on hurricane preparedness.

            Mr. Goscicki stated we received a call from the Public Works Department wanting to know what we have done preparing from a treatment side in anticipation of this hurricane season.  Mr. McKune is putting a report together detailing some of the significant expenditures and improvements the District made.  Not only dealing with old problems but mitigating future problems.  We will be submitting this report to them this week.  They want to give this report to their City Council.

            Mr. Fennell asked how are you doing with finding a replacement for your position?

            Mr. Goscicki responded I am trying.  It is a pleasure working with the Board and staff.  We are actively looking.  The person you want for this position is one who has public sector experience and understanding of government processes.  It is like filling a City Manager role but still having the utility and stormwater management background to deal with the day to day management issues.  

            Mr. Fennell asked Ms. Zich, are you going to officially tender your resignation next month or hold off?

            Ms. Zich responded I will hold off for a couple of months.

            There being no further business, the meeting was adjourned.





Glen Hanks                                                               Robert Fennell

Secretary                                                                   President