MINUTES OF MEETING

CORAL SPRINGS

IMPROVEMENT DISTRICT

 

            The regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, December 17, 2007 at 3:00 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

            Brenda Schurz                                            Severn Trent Services

            Dennis Lyles                                               District Counsel

            Sean Skehan                                              CH2M-Hill

            Jane Early                                                   CH2M-Hill

            Daniel Bohorquez                                       CH2M-Hill

            Cedo DaSilva                                             CH2M-Hill

            Doug Paton                                                Hockman Attorney

            Jim Aversa                                                 CSID

            John McKune                                             District Capital Improvement Coordinator

            Doug Hyche                                               CSID Utilities Director

            Randy Frederick                                         CSID Drainage Supervisor

            Kay Woodward                                         CSID Accountant

            Jan Zilmer                                                   CSID Human Resources

            Andrew Hockman                                      Resident

 

FIRST ORDER OF BUSINESS                         Roll Call

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

 

SECOND ORDER OF BUSINESS                    Approval of the Minutes of the December 17, 2007 Meeting

            Mr. Fennell stated each Board member received a copy of the minutes of the December 17, 2007 meeting and requested any additions, corrections or deletions.

            Mr. Daly stated on page 15 second sentence we have 60 days not six.

            Mr. Hanks stated page 4 should be existing stage not irrigation.  On the bottom page five strike with the modeling through the Everglades DRI method. 

            Ms. Zich stated on page 14 in the motion box Mr. Hanks moved and seconded the motion.  The second should be Mr. Fennell. 

 

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the minutes of the December 17, 2007 meeting were approved as amended.

 

 

THIRD ORDER OF BUSINESS                       Request of Mr. & Mrs. Hockman for an Easement Variance at 433 NW 115th Terrace, Lot 54, Summerwind    

            Ms. Early stated Mr. Hockman submitted a revised survey which shows the 32’ easement.  He is proposing to use the first nine feet of the easement; leaving the District 23 feet.  The only thing we can come up with that we may need in the future is perhaps a reuse line and Mr. Hyche and I feel 23 feet will be sufficient.  It does say there is a landscape buffer and a drainage easement but 23 feet is sufficient. 

            Mr. Hanks stated a concern for the future with easements I know they can always ask us to relocate lines. 

            Ms. Early responded the easement is not in their right-of-way. 

            Mr. Hanks stated what I am saying is we have water or sewer facilities within Coral Ridge.  What is the likelihood or probability the county will ask us to renegotiate rather than make accommodations within the right-of-way? 

            Ms. Early responded I cannot recall they have asked us to relocate anything.  I do not know if this is just going to be an encroachment agreement because you do not want to give up the easement. 

            Mr. Lyles stated the term used in some of the preliminary discussions has been variance and I think it fits the item before you.  I think the Board is aware a variance means a variance from a zoning or land use condition not a variance. Technically there is no such thing as a variance from an easement; You can either give back part of the easement, you can abandon the area, or what I would suggest, is enter into an encroachment agreement which allows them to install the types of improvements they want to within the District’s easement and provide that if for any public reason the full extent of the easement is ever needed by the District in the future then in that event the matter will come before the Board and any improvements installed within it will have to be removed at the owner’s expense.  This is how this type of matter is typically handled.  The alternative would be to abandon the easement altogether to the extent of the nine feet requested.  I do not know for the reasons previously discussed if that is what you are considering today but the safest course would be an encroachment agreement.  An encroachment agreement is a fairly standard type of document we have prepared for other types of easement issues.

            Mr. Hockman stated I think it would be foolish to put a pool in when you know 20 years down the road you might have to take it out.  I really do not feel, in response to Mr. Hanks, the road has quite a lot there as far as right-of-way and landscape buffer,  and there is a permanent wall abutting the whole development and I do not think you are going to come any closer to our property than that wall.  My thought would be if there is anyway you can abandon from that line to my lot line and you can maintain the neighbors or anywhere else in the subdivision, but not in my lot line.  Is there a way to write it up if you are maintaining your rights to the easement everywhere except for my property boundaries? 

            Mr. Hanks asked is the proposed encroachment consistent with those on the adjoining properties?

            Ms. Early responded the 32 feet goes all along Coral Ridge Drive so if you abandon the nine feet you will have a jog in the easement. 

            Mr. Hanks stated there will be four other property owners affected by that who could in turn come back and say we want this as well. 

            Mr. Fennell asked you said there is a history of other people having this, what is  it that they have? 

            Mr. Hockman responded the neighbor to the south does have one to the eight foot line. 

            Ms. Early stated I do not think it was vacated I believe it was a letter. 

            Mr. Hockman stated again, I am just being realistic, given your expertise in the matter what is the likelihood it is going to hinder us 10years down the road, I cannot see what you may need it for and if you can give me some logical explanation to what you would need. 

            Mr. Fennell responded I believe we could think of a lot but the real case here is to be consistent with others.  If we have allowed an encroachment with the conditions of someday whatever happens.  Things do change and to be honest I do not know that things will change that much but you never know.  We could run out of land, in 20 years we could go through an amazing redevelopment of all of South Florida.  If you look at areas such as Ventura, we are not just talking about the ocean we are talking a half mile in there are all kind of high-rise apartment buildings.  It is not unforeseeable here and the fact that they are putting up large-scale high rises near the Everglades is an amazing thing to me. 

            Mr. Hanks stated just south of Sample Road they are redeveloping that. 

            Ms. Zich stated they are trying too. 

            Mr. Fennell stated I feel there is negligible risk on our side.  I really do not feel it is going to be that big of an issue but I do not know if we want to take the risk.  I think what I would propose is the encroachment. 

           

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor authorizing District Counsel draft an Encroachment Agreement for nine feet across the Hockman property and authorizing District officials to sign the agreement. 

 

            Mr. Lyles stated I will prepare an agreement you will need to sign it and have your signature notarized.  If you own it jointly with another person they also need to sign; however the signatures appear on the deed.  You will return it to me and we will have the District sign it and it will be recorded in the public records of Broward County. 

            Mr. Hockman asked will it be sent to me? 

            Mr. Lyles responded yes. 

            Mr. Hockman stated thank you. 

 

FOURTH ORDER OF BUSINESS                    Consideration of Change Orders with Intrastate Construction Corporation

            A.        Change Order No. 3 for Blower Improvement and Associated Modifications to the Wastewater Treatment Plant for a Net Increase of $99,868.95

            Mr. Goscicki stated as background the two change orders are for an existing project here.  The engineer reviewed this in detail with both Mr. Daly and myself last week. 

            Mr. Skehan stated on Change Order No. 3 the most significant item is the change of blowers for approximately $65,000.  The original blowers selected were found to be not acceptable after an initial blower had been purchased by the District and installed.  To the consequence, we had some difficulties with it and after several months of difficulties we decided, with the operations people, to change what we had in the specifications to look at a different design and model of the blowers so the continued problems would not be present with the newer blowers. 

            Mr. Hanks asked were the original blowers recommended? 

            Mr. Skehan responded the original blowers came from us.  It was in combination of working with Barney’s Pumps and the supplier to Barney’s Pumps.  They said this is a new blower design, it is better than what you have, it is self-adjusting and certain features of it were attractive for our design flow.  What we do is list 10 to the suppliers and looking at the specifications it seemed to make some sense.  After putting it in operation it was found to not work. 

            Mr. Hanks asked did it specify the performance standards?  Are we dealing with performance based specifications for risk, requirement or obligation to provide a particular pump at least to specification? 

            Mr. Skehan responded performance wise it was meeting performance standards, but what was not meeting performance standards was the operation of the equipment itself; it broke down on multiple occasions.  Mr. Hyche or Mr. McKune can speak to it more than I can but the number of times the manufacturer had to be called out to provide service for the equipment just did not make sense and gave a strong sense of a not needing to have four more blowers of the same design specifications. 

            Mr. Goscicki stated the good news on this is the District moved forward initially with this one blower, separate from this project as a trial case thinking this is new and better technology and a better price.  What was discovered through the operation is the reliability was not there so where staff and the engineer moved forward initially with this one blower thinking of saving money and getting better technology proved that was not the case.  The specifications for this current project though were based upon that blower so as they have gone into the test period of operating this new blower staff reached the decision this blower is not reliable and is not the quality the District needs and are now recommending changing the other four blowers being proposed for this contract before they go in so we do not live with the same problem.  The other good news is there is a credit from the manufacturer for the existing blower of $15,000. 

            Mr. Skehan stated along with leaving the blower in place for staff to use as spare parts as needed. 

            Mr. Goscicki stated the point I am trying to make is it is an additional cost but some of the additional costs involved with this is the fact that you are getting a more expensive piece of equipment.  Originally, we tried going with a lower cost piece of equipment thinking it would be as reliable or actually better, finding it was not the case and moving back up to what was a more traditional design.  It is not a penalty because a big part of this is buying more expensive equipment. 

            Mr. Fennell asked how much have we already sunk into this? 

            Mr. Skehan responded the blower itself was around $30,000 initially when it was purchased by the District through a Purchase Order to Barney’s Pumps. 

            Mr. Fennell stated we put out $30,000 found it did not work, we are getting $15,000 back and we are out $15,000.

            Mr. Skehan responded plus you keep the existing blower.  I need to note this is going to be brought to you in two parts in that the contractor is not able to quantify exactly what his changes will be at this point up until the time this approved to be able to move forward. 

            Mr. Hanks asked are you comfortable with the difference in the exclusions?

            Mr. Skehan responded yes. 

            Mr. Hanks stated one says motors and starters and the other just says control panel. 

            Mr. Skehan stated this is provided as backup from what was there to what is there now currently.  We have gone over this over the last month and a half rather extensively to make sure the District was getting what they are looking for and what we wanted to be able to see here from an operational standpoint.   

            Mr. Hanks stated you are keeping the other blower around, is it compatible with the other blowers? 

            Mr. Skehan responded the parts will be compatible.  From what I understand of the blower itself there are different ways the blower can be set up. 

            Mr. Hanks stated you have the blower and then the motor. 

            Mr. Skehan stated they were not going to see any value in trying to bring it back.  I did go back and forth with them on a number of occasions saying this will be pulled from consideration from future work not that we are going to have a lot of future work here with blowers and such. 

            Mr. Hanks asked were these 100 or 125?

            Mr. Skehan responded 100. 

            Mr. Fennell stated please review again why we are doing this.  It was not part of the original package.

            Mr. Skehan stated initially there were five blowers as part of the package.  One of the blowers was pre-purchased by the District to be able to continue with operations needed at that particular time.  The one blower was not part of the entire package but we had specified the other four blowers as part of the current project to be the same so you would have similar equipment.  We then found after going through the design period and then the permitting period this initial blower was not acceptable. 

            Mr. Fennell asked do we have to go back to do anything?

            Mr. Skehan responded the slabs will have to be reoriented as there is a bit of a different layout for the slabs and how the blowers and piping are situated.  We do not have the final reconciliation from Interstate to be able to pull this together right now.

            Mr. Fennell asked how do you make a mistake like this? 

            Mr. Skehan responded it is not really a mistake.  You try to continue to improve on the equipment.  In looking at what they were providing and what they were recommending for use it is pretty much standard procedure to be able to move forward in looking for recommendations from suppliers.  As Mr. McKune and Mr. Goscicki pointed out this was a more cost effective design initially but evidently, it was not as tried and true as what had been used in the past. 

            Mr. Hanks stated what you are saying is the down time and likely lifespan of this piece of equipment is going to negate the 41% increase we are realizing. 

            Mr. Skehan stated the replacement blowers now recommended are going to be more tried and true and the amount of downtime is not expected to be significant, whatsoever. 

            Mr. Fennell asked how do you know that this time when you did not know it the last time? 

            Mr. Skehan responded this is going back and looking at a design, which is an older design, older features for the blowers than what this particular blower arrangement was. 

            Mr. Hanks asked what were we using at the plant?

            Mr. Skehan responded more similar to what these blowers are. 

            Mr. Hanks stated it is something we knew worked and we are used to working with.  Has anyone quantified if these tried and true blowers are going to give us 41% better life? 

            Mr. Skehan responded we have worked through it very closely with Mr. Hyche and Mr. McKune.  There have been numerous discussions with the supplier and their confidence level with this is very high at this point.  We have gone back to the manufacturer also, although they remain solidly behind their new design, they will provide what we want and also the credit. 

            Mr. Fennell asked who on staff worked this?

            Mr. Skehan responded Mr. Jim Aversa and myself. 

            Mr. Aversa stated we took into consideration the noise factors, this was supposed to be a low noise level blower.  Once we started running this blower we realized the frame was not beefy enough and kept throwing the belts consistently giving us an odor problem, which we do not want.  After numerous times of having Barney’s Pumps out to repair this we decided this was not in our best interest, we need the other kind of blowers we are used to. 

            Mr. Hanks asked how of10did you throw a belt on the old blower? 

            Mr. Aversa responded you do not. 

            Mr. McKune stated the manufacturer finally admitted they used this blower to test the standard.  They had not told us the changes they made during the tests. 

            Mr. Hanks stated you are not satisfied with their specifications.

            Mr. McKune stated no, personally, I am not because they beefed up some items but the basic flaw began with the arrangement. 

            Mr. Hanks asked how many suppliers do you have in South Florida? 

            Mr. Skehan responded there are several different ones. 

            Mr. Hanks asked but as far as blowers go, how many?

            Mr. Skehan responded three or four.  We costed this out with one of the other suppliers and costing was comparable, I do not have the specifics, this is something which predates my involvement. 

            Mr. Hanks stated for what it is worth most of the pumps I end up specifying end up getting spec’d through Barney’s Pumps because they have the support staff available.

            Mr. Skehan stated they are local and serviceability is a key thing.  They were responsive, Mr. Bob Weatley from Barney’s was out and maintains he is here and has been here for the long term. 

            Mr. Daly asked are they just the local service representative and not the manufacturer? 

            Mr. Skehan responded that is correct.

            Mr. Daly asked what is the timeframe involved?

            Mr. Skehan responded 10 to 14 weeks.  There will ultimately be a time extension tied to these but right now up to the time we get the order placed or Interstate is able to place the order, as we are awaiting this decision to be able to move forward.  10 to 14 weeks to be able to get on site and it will be the last item going in as part of this project.  Everything else has moved forward and is on a schedule, which represents where we are. 

            Mr. Fennell asked what about money? 

            Mr. Goscicki responded that is the only good news that comes out of this contract.  The contract actually had a $250,000 allowance in it.

            Mr. Skehan stated it was actually larger than that and was probably about $500,000 worth of allowances.  I will point out after going through both of these as we close on this between both of these change orders, assuming you decide, there is about $500,000 worth of allowance and with these two change orders most everything will be captured under those allowances. 

            Mr. Goscicki stated as I recall we have used about ¼ of the allowance. 

            Mr. Skehan responded that is correct. 

            Mr. Goscicki stated there is about $250,000 left in the allowance, which will cover the two change orders.  It is not great news but we are still less than you approved. 

            Mr. Fennell asked where does the allowance show up? 

            Mr. Skehan responded on the pay request, which comes through, and the allowance on the unit price items in the contract with Intrastate.  One choice would have been to potentially have deducted these particular items from the allowances but, from my perspective, it is much better to be able to bring items of this size to the Board attention so everybody is on the same page moving forward. 

            Mr. Fennell asked is the original contract $6.89 million to $7 million?

            Mr. Skehan responded it would be but this does not take into consideration what is left in the allowances.  Ultimately, once we do an adjusting change order which comes at the very close of the project we would not be seeing the full significance of the $200,000 change order.

            Mr. Fennell stated I would rather see the allowance taken now, not later, if that is what you are saying.

            Mr. Skehan stated we can take the change order and save the change order to them and deduct it from the allowance. 

            Mr. Goscicki stated it is essentially what you are doing.  You are raising the contact amount by approving the change order but recognizing we are holding on to this $250,000 allowance.  Making sure we do not spend anything out of it unless it is absolutely mandatory at this point with the anticipation we do a close out change order to recover the $250,000 at the end. 

            Mr. Fennell asked can we do it the other way which is to use the allowance now? 

            Mr. Goscicki responded we can do that. 

            Mr. Fennell stated I like that better because there is no money on the table to grab. 

            Mr. Goscicki stated typically the allowances are there for certain items, it is not just a pot of money for the engineer to say I will go build blowers.  If there are specific dollar amounts or unit prices for additional types of work such as ground drainage, pipe, curb, gutter, the things you have trouble estimating during construction.  The intent is if something comes up in the field you do not have to wait 30 days to get on a Board agenda to approve it, they can authorize it off of the allowance.

            Mr. Fennell stated you say we had $500,000 and we have used some of that already. 

            Mr. Skehan stated looking at this from a broader perspective right now there have only been approximately $100,000 in change orders executed.  Not that it is ever ideal to be spending extra money, typically in the grand scheme of things, the goal is from 3% to 5% of the project value.  Thus far, there has been only $100,000 and these are rolled up in the allowances.  We really do not see too much more out there right now.  Most of the significant items underground where the unforeseen features would be are pretty much behind us. 

            Mr. Hanks stated explain to me why we are keeping this blower that was there originally for spare parts.  It looks like on this change order were are getting five blowers versus four. 

            Mr. Skehan stated it is five blowers.  One of the blowers will be replacing the existing blower and four, which need to be installed.

            Mr. Hanks stated the one being replaced is the first line item. 

            Mr. Skehan stated yes.

            Mr. Hanks stated we are going to keep the old pump for parts and we are getting four new.

            Mr. Skehan stated four new blowers.  They were part of the design as it currently sits in the plans and specifications. 

            Mr. Hanks stated it looks like you are getting five on this change order. 

            Mr. Skehan stated you are getting five.  Four are in the plans specifically to go to four different slots.  The existing spot was blower number five that is replacing the one purchased before. 

            Mr. Hanks stated I am not comfortable with the idea we have gone ahead and  items that were hundreds of thousands of dollars were pushed.  I realize you have to rely on the owner’s representative or the manufacturer. 

            Mr. Fennell stated these are huge items.  What kind of legal boundaries are there?

            Mr. Lyles asked in terms of what?

            Mr. Fennell asked can we just make these change orders?

            Mr. Lyles responded we have an existing contract that was bid and has line items in it, some of which were specified some of which are allowances, changes within the four corners are reasonably necessary to accomplish the purpose of the four corners of the original contract are up to you.  In terms of your legal footing, it is solid either way. 

            Mr. Fennell stated I think we should use up the allocations.  To me this looks more like a design flaw. 

            Mr. Goscicki stated what we would do is issue this change order and come back with another change order to reduce the allowance. 

            Ms. Zich stated for my understanding has the $15,000 credit already been used to reduce Change Order #3? 

            Mr. Skehan responded yes, it has been used as part of this.

            Mr. Goscicki stated you are not writing a check for this amount it is an authorization to change the contract amount.  They will continue to make partial payment requests as work is completed and it will run through accounting.  This has no impact on accounting except to change the contract amount. 

            Mr. Fennell asked is the actual funding for this from our bond issue? 

            Mr. Goscicki responded some is from the bond issue and some is from existing resources. 

            Mr. Fennell stated this is the one, which pushed our timeframe forward.  If we do nothing with these blowers what happens?

            Mr. Skehan responded you have the potential to end up with a blower you pre-purchased before; the same blower, four more of the same blowers, and potentially have the same maintenance issues that came with that. 

            Mr. Daly asked did you say they actually realized they had a design flaw and made some corrections? 

            Mr. Skehan responded that is correct, but overall I believe our comfort level is not there with where they are right now. 

            Mr. Fennell asked do we still need the fans right now?

            Mr. Skehan responded yes.  Moving forward with the project there will be additional time.  One change order will provide the contract with approval to be able to move forward and/or a decision.  The decision is then to get the order placed, the submittals in and go through the whole process, which is a 10 to 14 week timeframe from where we are right now once we give them the approval to move ahead. 

           

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor Change Order #3 for Blower Improvements and Associated to the Wastewater Treatment Plant for a Net Increase of $99,868.95 reducing the contingency by the same amount was approved.

 

            B.        Change Order No. 4 for South Drainage Area Improvements for a Net Increase of $113,700

            Mr. Goscicki stated the reason for this one is the City of Coral Springs is making us do it. 

            Mr. Hanks asked what are they making us do? 

            Mr. Skehan responded to keep the project moving forward a package was submitted and permitting was taking place at the same time.  Once the permitting was finalized, the City came back and said you need to be able to get permits from the local permitting agency.  The local permitting agency is right here and ultimately the City was not going to sign off on any of the permits up until the District provided their own permits. 

            Mr. Hanks asked did this actual permit come to us a year ago?

            Mr. Skehan responded yes. 

            Mr. Hanks stated the water quality provisions we are providing by the use of a exfiltration trench.  What are we doing? 

            Mr. Skehan responded we are doing regular treatment.  Initially the effort was to move forward without any of this as a cost savings.  When the City came back they had all of these requirements from the site drainage and collection standpoint.  What you have with the two sets of drawings are the drawings which we submitted initially and then the transition to the drawings that were ultimately approved and installed. 

            Mr. Hanks asked where do we stand on construction?  How much is completed?

            Mr. Skehan responded not what you want to hear.  At the time they ran into the roadblock of work having to be done at the time and this should have been brought to the Board’s attention. 

            Mr. Hanks stated this is not the first thing that should have been brought to the Board’s attention.  Just last month we had another one of these situations with a site plan.  We said lets find out some more about it.  How can we, as a Board, act responsibly on these items when they are already done?  We are getting here is our change order or here is our bill.  That begins with Severn Trent, as well, we are talking about trying to keep our cost under control, trying to keep on top of everything as far as what is going to what location, who is doing what, are we working on the right stuff. 

            Mr. Skehan stated this is why I brought it to the Board’s attention because it was not brought to the Board’s attention when it should have been.  I did not want this to pass through as a going against the allowance.  This is would have been one of those items that was debatable to present as a change and would have been acceptable under the allowance descriptions.  Due to the amount it needed to be brought to your attention. 

            Ms. Zich asked do we have any choice on this?

            Mr. Skehan responded I would say no.

            Ms. Zich stated I feel the same way Mr. Hanks does.  I am getting a little frustrated with hearing about bills somebody is going to charge us after the fact; we should have known before. 

            Mr. Goscicki stated we appreciate the Board’s concern on this and Mr. Skehan and I along with Mr. Daly and Mr. McKune have met on this issue.  One of the things we have initiated is a standing monthly meeting to review the status of all construction to make sure the entire management team is aware of what is going on.  As Mr. Skehan indicated, this change order could have been interpreted under the contract to be funded out of the allowances and the engineer could have taken it under their own purview to authorize the work within the allowances on the unit prices and then came back to do an adjusting change order at the end of the job saying we did this and that.  We said we need to bring full disclosure in front of the Board, this is a significant amount of money, and we do not want to do this through net out change orders at the end of the job.  We fully recognize this should have been brought to the Board six months ago.  We think we have a process in place now that will keep this from happening in the future.  We are getting into the beginning of a major construction program, we are all onboard that this is not an acceptable practice, there is no authorization to proceed with any construction without the manager’s sign off and there is no authorization to proceed without any construction change orders the Board has signed. 

            Mr. Hanks stated my understanding of construction change orders is in the end because this is a required improvement the Board/Owner would be responsible for paying for that whether there was a mistake on the engineer or not. 

            Mr. Lyles stated that is not correct in a pure government setting where we find ourselves.  I am going to give you a general overview and I am not going to comment specifically on this particular one because we have already established as the record here we are dealing with something that, from an engineering standpoint, could have come under the existing contract under the allowances sections.  Let’s talk about hypothetical situations with a contract where that is not an issue.  Change orders are undertaken by a contractor at the contractors risk in dealing with the government because the contract itself was noticed, and bid into by a government body, such as this one, approving it.  This again is speaking in generalities that says though it is seldom done and means a change order could conceivably come before you and you might say well I think staff probably meant well when they looked at this and the contractor probably had the best intentions but we did not sign off on this expenditure and we did not approve it at the outset and we are not going to approve it now, we are not going to pay it. 

            Mr. Hanks stated it is different for the private sector. 

            Mr. Lyles stated it is different for the private sector.  In the private sector, you have lien rights and all kind of things you do not have in the government sector.  This is not to say at the conclusion of the process that the property owned by the government has been improved and there is a value associated with the improvement that they could not sue and get the value of the increase in the government’s property.  However, the fact a change order is reviewed and approved by staff including engineering consultants does not mean you are stuck with it as elected officials of this body.  I thought it was important this be entered into this discussion and maybe staff have it in the back of its mind when it is dealing with these change orders and these contractors.  I know this Districts reputation and our staffs reputation are important in the contracting community and we do not want to jeopardize that, but I do not want to sit by and let you think you have no choice but to approve it.  You have remedies the private sector would not have. 

            Ms. Zich stated it bothers me that this could happen next month and the following month. 

            Mr. Fennell asked what was the process for going forward?  Who decided to go forward? 

            Mr. Skehan responded the gentleman who approved going forward is no longer with the firm. 

            Mr. Fennell asked how does that happen?  What is our procedure? 

            Mr. Goscicki responded it is approved in the field, it gets approved at the engineering hearing level.  The manager may or may not have been involved.  I can tell you the procedure going forward as I stated earlier.  Having worked in government I fully understand it is not a change order until  the Board has signed it, it is not a contract until this Board has signed it.  I do not have that authority and the engineer does not have that authority and our process is if it is not absolutely in the allowance it comes to the Board as a change order approval. 

            Mr. Hanks stated we are still dealing with a balancing act in authorization of change orders and getting t it done in a timely manner.

            Mr. Goscicki stated one of the things we will want to talk to the Board about as we start bidding these other projects is how we deal with that,  and how we structure the allowance.  The allowance on this project is very much unit price and very typical in the industry for unit pricing and we may need to provide some other latitudes,  though we have not even started to scope that out yet in terms of how that will work.  Most of the other governmental entities struggle through this with getting in front of their board and getting change orders approved.  Governments hate change orders because they are time consuming to get through the bureaucracy and they impact on construction. 

            Mr. Fennell asked what is our policy?

            Mr. Goscicki responded I think our policy at this time is all change orders need to be approved by the Board prior to any initiation. 

            Mr. Fennell asked what about this nebulous allowance? 

            Mr. Goscicki responded if it is an allowance issue it has always been approved by the Board in the contract.  We tell the contractor we want you to allow in your price for this quantity of material, you quote back to us the unit prices and it is part of the bid tabulation.  You asked for a price per linear foot for different size pipe. 

            Mr. Hanks stated the allowance mechanism is there to allow you to take into account different things that can happen in the field so if you have to put in an extra 5’ of pipe to get your catch basin so it does not conflict with the water maintenance or whatever, you have it built into the contract and it can be an allowance rather than saying hold up, we have to wait a month for the Board’s approval. 

            Ms. Zich asked how many months ago was this done?  

            Mr. Skehan responded a year ago or more. 

            Mr. Fennell asked who decides to spend the allowances and signs off?  We are not talking four or five dollars we are talking about $100,000. 

            Ms. Zich stated which was a year ago. 

            Mr. Fennell stated I agree there needs to be some extra reviews but I do not know that I know who actually decides to move ahead and spend the money.  Was it our manager?

            Mr. Goscicki responded it would be the manager in concert with the engineer.  The engineer is the one who needs to make the engineering determination that yes, this is required.  The contractor will come forward to say I need this additional 5’ of pipe to avoid this conflict and there is an additional cost, the engineer would make the engineering determination to say I agree it is an additional cost or I do not agree it is an additional cost with that determination made at we have set up is we expect the engineer to bring that to the manager to keep us informed of moving forward with the allowance but it would be an informational thing and then we would bring it to the Board at the next Board meeting as an informational item so you are up to date as to where we are on those line items. 

            Mr. Fennel stated I believe we need something more than just information. 

            Mr. Hanks stated some kind of a level of comfort with the way these change orders or changes to a contract.

            Mr. Goscicki stated these are not the change orders just the allowance. 

            Mr. Hanks stated change orders are changes to the scope of work. 

            Mr. Goscicki stated changes in the scope of work would come to the Board prior to authorizing any work done in the field.  In the case of the blower it is a perfect example, the work has not started, we brought it to the Board to say we need your authorization, we are not moving forward without the Board approving it and if you do not approve it we do not include it.

            Mr. Hanks stated as far as the dollar amounts we are considering we have to go ahead in terms of what was brought before us a year ago in terms of permit plans that CH2MHill had prepared.  We knew that was coming and authorized CH2MHill to prepare those plans needed for the permit, so we knew this was coming down the road.  

            Mr. Fennell stated we have loophole as to how much money can be spent, by who and when.  This Board is strapped with $4,000 every time somebody wants to go out to bid something and yet when we have allocations we have a $500,000 slush fund and suddenly someone can just willy-nilly for informational purposes spend $500,000. 

            Mr. Goscicki stated it is limited in what you can use with that allowance.  You cannot use the allowance to pay for these blowers, so we could not within the four corners of the contract say I have an allowance for pipe, curb and gutter and I am going to use that money to pay for this. 

            Mr. Fennell stated I understand needing flexibility for money to be spent I just think we need a firmer procedure than we currently have. 

            Mr. Goscicki stated this is one of the reasons we wanted the change order in front of you.  This could have been buried in the weeds and brought back as part of a closing change order but we wanted this policy discussion with the Board as to how we move forward because we are just starting on a huge program and we need to understand what the Board wants as we start structuring these new contracts.  You recognize a need for an allowance but you want some way ,up front ,as we are putting the contract together: how much of an allowance are we putting in, what are the constraints, what is the decision making process, how are you informed as to where we are in the allowance and what has it been used for. 

            Mr. Daly asked is this anything new?

            Mr. Fennell responded usually what happens is every month there was a report but it was usually current.  Usually we do not see $100,000 spent a year ago and then find out. 

            Mr. Daly stated this is where the disconnect is.  I know you had change orders before and I know Mr. McKune has brought them to the Board before.  I know this has been a pretty smooth operation were he would come forward with this information, what I do not know is where the disconnect happened. 

            Mr. Fennell stated the disconnect happened and $100,000 was spent.  Somebody decided to revise the plans and John knew about that.  Somebody in engineering said that or somebody in management said that; is that what happened?  Is there at least that?  Somebody signed off on it?  If Mr. Petty is the man who signed then Mr. Petty is the man who said okay do it.  I understand the need for this money but anytime I think you have spent more than about $25,000 there has to be a signature from the chief engineer, a signature from the operating manager on the fact that you are going ahead and it has to be reported at the next Board meeting. 

           

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the engineer and manager were directed for items $25,000 or greater to be accompanied by signatures from the engineering firm and management has to be reported at the next Board meeting.   

 

            Mr. Hanks asked who has reviewed these numbers? 

            Mr. Skehan responded we have.

            Mr. Hanks stated explain to me how gravel bedding for 1,000 tons on the original proposal was quoted at $2,000 and in the final change order it is $30,000. 

            Mr. Skehan stated it goes from a completely different design.  You have the French drains there that were not there before and on the markup copy it is not one of the features in the first design. 

            Mr. Hanks stated gravel bedding is listed in both.

            Mr. Skehan stated gravel bedding but the amount of gravel bedding was significantly more.

            Mr. Hanks stated you changed the amount.  You still got 1,000 but you changed the units from linear feet to tons. 

            Mr. Skehan stated there are two numbers which have jumped up significantly the other is the marafi used to wrap around the whole thing. 

            Mr. Hanks asked who was the engineer of record for these findings?  It is not listed as far as the engineer of record, it says approved by Mr. McKune.  I will not take up the Board’s time with technical matters but in looking at these plans, I have some concerns about how we ended up going through with it.  How did we get to this point on this particular one because I see in the future with the proximity of some of our planned expansions we are going to run into trouble and a year from now we will tear out those pipes. 

            Mr. Skehan stated not with what we have right now. 

            Mr. Hanks stated it is moving away from Plant E but it is moving real close to Plant F. 

            Mr. Skehan stated it was taken into consideration as well as Plant F.

            Mr. Hanks stated I do want to talk to you about this and some of the features, particularly some drainage components. 

            Mr. Skehan stated there is one other area that at some point in the future out in this immediate vicinity around the building that will need to be addressed and will be addressed as part of Plant F.   

            Mr. Fennell stated once again I guess my concern is funding, taking it out of the allocation as we did with the previous one. 

            Mr. Skehan stated I will have to see how close it is so we have an accurate accounting of it, then move forward.  I will move forward with both Mr. Goscicki and Mr. Daly to be able to know what the numbers are. 

            Mr. Fennell stated we only have so much money.  We were using the assets already paid for and in place, now we have to go out and find new assets.  We only have so much money to do it and cost overruns are going to be looked at hard and they are going to be hard to get so you better make sure you really need it and looking very carefully at every bit of construction cost that goes on because we really cannot afford it.  I know you have allocations in here and money they feel should just be spent somehow by the end of a project like a budget.  We really need to manage the money for all of these projects.  We have to be tough and if you are going to spend it there had better be a very good reason. 

 

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor Change Order #4 for South Drainage Area Improvements for a Net Increase of $113,700 reducing the contingency by the same amount was approved

 

            Ms. Zich asked are there anymore of those out there?

            Mr. Skehan responded no. 

 

FIFTH ORDER OF BUSINESS                         Update of Water Use Permit

            Mr. Skehan stated we are moving forward with responding to the questions from the SFWMD.  Mr. Goscicki, Mr. McKune and myself have talked about getting together to schedule a meeting with SFWMD on ground water modeling and how reuse will impact a lot of this.  The modeling is a big feature of all of this. 

            Mr. Fennell asked do they have a modeling plan?

            Mr. Skehan responded they have a modeling plan that is not necessarily what is being used for their planning but not for their calibrated planning.  They have a conceptual plan for overall Broward County and that plan is what they require the utilities to go back to confirm and calibrate against specific data that will be provided from low lying wells. 

            Mr. Fennell asked is this a real engineering plan that has an engineering model, a computerized model that predicts what happens? 

            Mr. Skehan responded it is a computerized model, generic in nature, that they are using general numbers for a vicinity or locality that have not been confirmed against specific numbers for one utility to the next utility.  The expectation is they are using broad numbers and using these assumptions and they want their assumptions to be confirmed by localized data. 

            Mr. Goscicki stated I went to the Broward Water Policy Summit, a week ago Friday, and it was exceedingly discouraging.  What I saw there from the water management district, from South Florida, Broward County, the Department of Environmental Protection and the South Florida Regional Planning Council representatives is you have a permit process that is being driven by policy not by engineering and not by modeling it is being driven by policy because the modeling will not support the policy so they will not use the modeling.  The modeling will not show if you put this well field in and double the size of the well field the modeling will not show that you are having a negative impact on the Everglades.  It is not significant enough of a withdrawal to show in a model you are having any impact on the South Florida Everglades system at all but the policy says we are going to limit you to the amount of water you had April, 2006.  Fortunately for this District you are in pretty good condition; you are nearly built out, you have most of your consumptive use, we may need some incremental more but NSID is between a rock and a hard place.  They have capital investment in the ground today that they are still paying debt service on and will be paying for the next 10 plus years on that they are not going to be able to use.  If this policy continues forward, and it seems everyone has bought into from the policy perspective, they have buy in up and down and I looked like a radical there by suggesting how do you get people to pay $5,000 more per household for communities like North Springs who are going to have to tap new water sources because the will not be allowed to use the Biscayne aquifer anymore and will have to tap alternate water sources.  The good news is we have most of the water we need but we may need a little more and may need to figure out how we are going to do it.

            Mr. Fennell stated I met with Senator Jeremy Ring this month.  There were two points of interest that came up; one was he was concerned about the number of districts that are around and how they are spending the money and whether or not they are spending it wisely.  Word had got out that he was going to start an investigation of different districts.  Actually, we got along fairly well.  I told him about our District, what the policies are, what we are doing, we have a great Board, I gave him copies of our budgets and that kind of information.  He was not accusing us of any particular thing but he was interested in general that he thought maybe these small districts are not managed correctly.  From that standpoint, although, I started talking about some of our own concerns which have to do with water and how to manage it.  It turns out he is also sitting on some type of board.  One of the things we said we would do is come back to him with some questions we would like to ask the water board on some of our main concerns.  I thought one of those was modeling and we need to understand the modeling not only for the water usage but also for water drainage, which, correct me if I am wrong, we still have not received any good information on. 

            Mr. Hanks stated this is policy driven and politics and the engineering is not supported. 

            Mr. Fennell stated we have two areas we have to be active on politically going forward, one is obviously the state but somehow we have to become politically active with SFWMD because that is where we get our permits from and frankly we are probably in a good position to materially contribute what they should or should not be doing as far as the needs of the people go as well as anybody else.  We probably are going to have to form alliances with other groups around us.  I think we need to do it and I think we need to form a policy, have a specific plan, form a lobbying group and have people going.    

            Mr. Hanks stated you are mentioning formal alliances with people and gathering together to share thoughts on things.  There are a number of organizations out there that have considerable representation from the independent districts as well as different utility districts; I believe it is a Technical Advisory Committee or Water Advisory Board. 

            Mr. Fennell stated my point is we, as a Board, are going to have to become more active in doing certain things.  We do have some in the budget for a travel budget.  We can put some budget in for special counsel and the such. 

            Mr. Hanks stated with that being said the TAC meeting with the Utility Directors from Plantation, Sunrise, the Old Plantation Water Control District, South Broward Drainage, whether it be the attorneys from those entities, or engineers or managers, showing up they are discussing all of these various issues from water modeling of stormwater to water sources. 

            Mr. Fennell asked how would you like to be our representative? 

            Mr. Hanks responded I am going Friday.  I am a bit surprised in talking with these people we have not had a representative from the District attending these meetings. 

            Mr. Goscicki asked which meeting is this?

            Mr. Hanks responded the Technical Advisory Committee. 

            Mr. Lyles stated it is basically the county. 

            Mr. Hanks stated there are representatives from SFWMD and DEP; the very people we have to cooperate with to resolve many of these other issues.  Some of the issues we are dealing with on the C-14 canal somebody may have address or figured out a way of dealing with the C-11 canal or someplace else. 

            Mr. Fennell stated we really need someone to become one of the Board members.  We really need to look at, from a political standpoint, how we can influence the Board to your point , it is policy driven opposed to engineer. 

            Mr. Hanks stated they are making an engineering decision on a timeframe of 30-years and the policy decisions are being changed every year.  The direction we are going is if we start the ball rolling here all of a sudden regulations change and we are headed the wrong way, we spent millions of our capital improvement project dollars on a project that cannot be utilized.  It is a common theme being stressed, not only from your standpoint, but also from other districts and other utilities. 

            Mr. Goscicki stated you are making 20 and 30-year capital investments based on five-year consumptive use permits. 

            Mr. Fennell stated we obviously need to do some of these and I will ask counsel and managers what we need to do to get more active in this.  Obviously there is an engineering questions we want answered and we have talked about before we are not getting very good answers from SFWMD.  I want to know what the maximum height of the C-14 canal is going to be, what their 100-year flood model is and I cannot get an answer.  They are giving us flippant answers I know to be incorrect.  Two, obviously from a political standpoint, Broward County and the Districts we represent we have to get more involved.  Right now that board has a $800 million budget and it is being driven by several different forces with the environmentalists and the farmers but as far as I can see the cities and us are not being well served. 

            Mr. Goscicki stated I am honestly shocked as I have become engaged here in the last year in terms of this District and NSID with the water use permitting that the municipal organizations are not screaming bloody murder, but they are not.  We need senior level policies changes in the way we use water and we need to look for alternate water sources.  There is a strong political buy in to that at the county, state, regional planning council level and there is not an outcry.  They are saying this is not right why should I be getting more expensive water why don’t you make the farmers get it.  I have been away from this issue in Broward County for 10 years and the issues have not changed but the tenor of the discussions have.  I think the ship is already pretty far down the canal in terms of policy direction.  It is not encouraging for the local governments and I am not sure at this stage what is available.  The big challenge the water management district is facing is the Everglades restoration program was supposed to be the matron of the district to create a balance and allocate water to municipal use and protect the Everglades and the environment and then create the balance.  The plan is seven years behind schedule and water management district board moved forward with some policies they are implementing through permitting regulation ,now to say we cannot wait another six years until this grandiose plan is in place here is how we are fixing it today.  I am not sure how you fight against that decision. 

            Mr. Fennell stated I think this is what we are going to have to deal with and I think part of it is because of the numerous water control districts and frankly most of the time we just keep our heads down and say are we doing the job within our group and is pretty much what we think of and is pretty much what we have defined our responsibility as being and hoping there was some great father figure up there watching out for us all. 

            I think Senator Ring will welcome our input on the topic.  He would like to get some coaching or ideas.  I think we as a Board should come up with our own ideas on what we think the policies should be and we have to become more politically active from a bigger standpoint, which I think with us, North Springs and others we can actually have some clout if we come up with some policies.  Coming back to what is the best way for us to do this; Senator Ring is obviously one way.  One thing I did say  to him is the best thing to do with water is not for us to be shipping it down several thousand feet, what we  should be doing is just pushing it back into the Everglades going through a mile or two of filtering and letting it flow back.

            Mr. Goscicki stated there was a levy for doing that but the cost of doing it is about three times the cost of pulling water out of the Biscayne aquifer.  They are pushing exactly those kind of solutions and they are good solutions the question is who pays for them.  

            Mr. Fennell stated their sense is to reuse the water and not for the Everglades. 

            Mr. Goscicki stated if you put it in the Everglades you are ratcheting up another two levels of treatment.  You cannot put it directly into the Everglades, you put it to the canal system or you can recharge the ground water system but not directly into the Everglades. 

            Mr. Hanks stated for that treatment level you are faced with $10 million of treatment per MPD of treatment capacity on top of your secondary treatment. 

            Mr. Fennell stated I thought there were natural treatment plants I have seen like the San Francisco Bay and other areas. 

            Mr. Goscicki stated the facility we operate in central Florida and CH2MHill actually does the wetlands monitoring.  It is an artificial wetland which the state shut down and said we are not going to let you use it anymore because you are violating the DO profile coming out of the wetland.  Going into the wetland the wastewater was fine coming out of the manmade wetland they did not like because they are pushing reefs so they shut this thing down that is a manmade wetland.  We could talk all day on this and may need some workshop time. 

            Mr. Skehan stated it is the regulatory levels they require you to get to even go to the Everglade so they would never allow that. 

            Mr. Fennell stated I saw in the paper last week someone is trying to shut down dumping in the ocean by Broward County.  I do not think we have too many choices but to formulate policy. 

            Mr. Hanks stated again we are dealing with predicting the future, looking at developing capital improvements that have a life of 30-years based on policy that will be changing in the next year or two.  We are much better off looking at getting the bang for our buck.  $10 million to give you an example, toilets in most houses are six to eight gallons per flush and now days they are 1.6 gallons.  Do you know how many toilets we can buy and cut down on consumption and there are other ways we can look at this but it all comes down to really how much we can pay. 

            Mr. Fennell stated one of the things, which became obvious to me as you are talking about flood control, is the amount of actual water we use per day compared to the amount of water we have in the canals.  It is really not the significant water issue at all , the significant water issue is maybe some of what we treat, but how much the canals have; that is where the real water is at.  We can double our water consumption and make no dent in the water levels of South Florida.

            Mr. Goscicki stated this is why they will not use the modeling because it shows if you double it nothing changes. 

            Mr. Fennell stated up until now we have been able to say what the heck, we have our water and are  doing our job.  The storms are gathering on the horizon. 

            Mr. Lyles stated I think the top thing is what Mr. Goscicki has already alluded to which is the ship is sailing and I do not think we are going to get the ship back, I think they are going to look us square in the eye without any hesitation say if you want to operate your system you are going to have to find a way to bear the costs of operating a system in the real South Florida of the 21st Century.  It is policy ran by politics as well as press which is another big factor in all of this.  The press is full of stories about how we are sucking the Everglades aquifer dry and we are going to turn the taps and nothing is going to come out.  The people who get elected to not only the county and city commissions but also the people who sit on the SFWMD board do not want bad press like that.  I think it is a difficult problem and there is not a clear path to a solution if you are trying to operate in good faith a system like you own.  I am listening to this and feeling the frustration but I do not have constructive solutions to offer from my perspective. 

            Mr. Skehan stated then going about the fight to fight any particular request they may have of you becomes time consuming and frustrating along with all of that. 

            Mr. Lyles stated all of this is going to feed into a later agenda item you have already open discussion about a little bit which is the special district analysis that is going to go on with Senator Ring.  With this big problem we have we would not be better off, as the populous of South Florida, to roll all of the special districts into one super elected government run operation. 

            Mr. Goscicki stated one of the members of the South Florida Regional Planning Council suggested to solve some of the water problems was to consolidate cities.  We need to consolidate cities in Broward County no less districts because it is the only way to get the 28 different utilities in Broward County to work together.  I heard that and I am hearing Senator Ring and I am wondering what other agendas are out there. 

            Mr. Hanks stated if it is the same political body, it does not mean the water runs from Coral Springs to Hallandale.  Technically the opposite is even if you shut off the outfalls supposedly you are going to be down between your automatic demand and what you have that was formerly going out to tide but it is not a reality. 

            Mr. Goscicki stated in terms of this issue we are moving forward with the Consumptive Use permit.  We are asking for all the water we think we need off the Biscayne aquifer and have them say no and then we will get into the formal discussions with them but we are going to ask. 

            Mr. Fennell stated I explained to Senator Ring we are here because frankly nobody else would put up the money and is the reason for most of the special districts.  The city does not come forward with the money, not the county nor frankly did the state.  The only people really are the people who live in this District as far as the bond issues and as far as the taxation goes.  I also pointed out most of the cities when they do take over the districts add on an extra 10% and of that they do not manage those areas very well.  Plus, we already pay a considerable amount of money to the City of Coral Springs just in utility tax, which as a side issue I am not sure what they are doing with that money. 

            It was a good discussion, we talked for about an hour, I think he is a sincere individual.  He actually has more of a marketing background and I think we need to follow up with a letter thanking him for his time.  I would like to ask him what he can do to help us to investigate exactly what has happened with the SBA funds.  I know he is in a position where he is concerned about corruption in government and certainly I have $500,000 I cannot get my hands on I would like to find out why.  I think we should also ask our agent because we are concerned about the funds we cannot get to and we do not understand why they are being held up.  I have read everything, but frankly how did it get to that point. 

            I went to the SBA site – the local government newsletter.  I looked to see how much of the funds were in where I thought they should have been and less than 1% are in US Government agency funds which is where I thought we should be.  Most of the rest is in commercial paper, liquidity notes, corporate variable rates, commercial paper of all kinds, in other words that is not a government bond fund at best ,it is a commercial fund and how did it ever get to that position.  As I understand it we are under restrictions of where we can put our funds and the SBA was touted as one of those.  The other concern I have is the funds we do get from the state as I understand it they are not insured so who is going to stand behind that money.  Those are concerns I have, he is our State Representative, and I am not sure who else we go to other than the Governor to look into this and I think we need to express our concerns. 

            Mr. Goscicki stated as we discussed before the meeting we will be preparing next month to give you a report on what we are looking at in terms of this District and other districts we manage who have funds.  In terms of investment opportunities, we are looking at it if you need to pull your money out we have some alternative strategies we have worked out some things with Wachovia.  Wachovia has agreed essentially to a loan program that they will make good on whatever dollars the state is locking up at some rate.  I need to bring it back with my finance people and talk to you about it.  I want to get with Ms. Woodward to go through the details on this and how we can bring it back to the Board at the next meeting. 

            Mr. Fennell stated thank you to our management for sending us different pieces of information about this.  What are our restrictions on where we can invest our funds? 

            Mr. Goscicki responded I do not know those off the top of my head and would have to get the finance people in. 

            Mr. Fennell stated I was led to believe SBA was one of the few places we could put our funds. 

            Mr. Daly stated you can go to the state site and it lists all of the banks with a guarantee where you can put it.  Any bank who wants to come in to handle the funds has to be approved by the State of Florida to do so.  Wachovia is one and SunTrust as well. 

            Mr. Hanks stated we were supposed to go with SBA.

            Mr. Lyles stated I do not have that particular part of the Florida Statutes with me but going back the better part of decade when California had celebrated problems with Orange County and derivatives, the State of Florida passed a bill that became general law and applies to all local governments and special districts in the State of Florida and it essentially says for your unneeded operating revenues, this does not apply to trust funds like your bond fund, but your ongoing operations accounts and things of that nature you are required to either come to the State of Florida and have approved a plan for investing  your surplus funds.  They will review what you intend to put it in and approve it or not,  or the alternative they had a statutory provided default series investments you could put the money into and it had four categories which I cannot recite to you, but one of them is the SBA.  Very conservative type of investment vehicles intended to use the state’s ability to limit what local governments can do to keep them safe and preserve the principal amounts.  You do have the ability to go to  other places but, you have to go to the state to have an investment plan approved.  I do not know of a local government entity that has actually gone to the trouble of having an investment plan approved by the State of Florida.  I suspect many will be lining up to do it now but so far everyone has used one of the four investment categories the statute authorizes you to use without having a formal plan.  You would have to have a consultant advise you, develop a plan, go to the state to go through the process and nobody wants to fool with that and that  is how we got to where we are. 

            Mr. Goscicki stated the question that gets asked is who has been watching the state fund and the question gets asked of us why are you not watching the state fund.  As Mr. Lyles just pointed out the state fund was set up to circumvent the need to have us create an investment plan.  It was set up so you had a professional investment program run by the state that was secure and was the great safeguard because they did not trust us local governments to be able to do this on our own and is the crime of the situation. 

            Mr. Hanks stated when you look around at Citibank, Wells Fargo, whatever, everybody is having this kind of trouble. 

            Mr. Fennell asked is the state insured?

            Mr. Goscicki responded this fund is not an insured fund so the state has not put the full faith and credit and this is what is going on in the financial industry right now.  There is some pressure being put on the Governor’s office saying the State of Florida cannot allow this to default in any way, shape or form it would be essentially even if the state did not put full faith and credit behind it everyone has worked this way in this is a safe agency, state sponsored investment and creditability of the state would be forever damaged if they do not deal with this situation.  The financial industry is very concerned that the state is not moving aggressively enough. 

            Mr. Hanks stated you have a portion of the Citizens Property insurance invested in the pool, it state retirement funds invested and operating funds for counties and cities. 

            Mr. Goscicki stated the scariest scenario we have heard of and I have not heard if anyone was actually in it but some of the property appraisers may have actually ran their operating funds through this, Broward has not, but we are hearing other counties may have so they are collecting assessments and placing them in this fund where they are now locked up and they cannot give you your money.  I do not know if it is true any place in the state, I know it is not true here but this is how bad it could get. 

            Mr. Fennell asked what should we do?

            Mr. Goscicki responded again, we are analyzing and one of the things we are recommending to all of our boards is the flexible amount we do have, the 14% you can take out without penalty, we think you should take it out now.  Take it out and get it into a bank account until we come back with an investment strategy.  The bulk of it you cannot touch without penalty and we need to do additional analysis before we come back with a recommendation on that. 

            Ms. Woodward stated 86% is the portion you can take out without penalty.  The 14% is the portion at risk.  On the 86% you are allowed on an account-by-account basis, this District has three accounts with the SBA, and we are in a position to take out tomorrow, if you should so desire, we would be in a position to transfer out almost $2.5 million.  There is a total balance in our three funds of $3.9 million, we can pull out the $2.5 million on the balance between the $2.5 and the $3.9 which is in Fund, A which is supposed to be the safest, and most secure AAA we would have to take that out over time.  The portion that is truly locked up and potentially at risk is a total of $571,000. 

            Mr. Goscicki asked is there a limit on it of $2 million or 86%?

            Ms. Woodward responded it is 15% of the balance but you may take out dollar for dollar up to $2 million.  In the case of one of our particular accounts for the water and sewer fund the Fund A portion is $2.9 million and with 15% of the lesser number I can pull $2 million out. 

            Mr. Fennell asked is there any penalties with that? 

            Ms. Woodward responded no.  If you pull out above and beyond that you do have a 2% reduction fee that applies. 

            Mr. Goscicki stated NSID is 15% and is where I got this reversed.

            Ms. Woodward stated correct. 

            Mr. Fennell asked where would we put it that it would be safe?

            Ms. Woodward responded that right now is what we have to start researching. 

            Mr. Goscicki stated we are recommending to our clients to pull it out, put it in Wachovia, SunTrust or wherever and we will come back with a strategy for longer term. 

            Ms. Woodward stated at Wachovia because there are three operating accounts are basically public depository funds the first $100,000 is going to be FDIC insured everything above that is through the Florida Insurance Trust.  It is secure and what happens is that currently, as of today, these operating accounts are non-interest bearing.  One of the things we had talked to Wachovia about is the fact that we are in a position, if we so desire, to convert these three operating accounts to a different tier which is referred to as a Government Advantage Interest Checking account.  What this means is to the extent that we keep at least $100,000 in each account as a minimum balance, which is not a problem for us, that you are a position to lock in a T-Bill rate where interest will be earned on the idle operating cash balances.  It will at least offset any current monthly bank charges that are assessed to the District, which is averaging about $250 a month or about $4,200 per year so we would eliminate that fee and any excess would net us interest and be posted to the account.  It is not going to replace the interest rate you have seen in the past but it is going to partially offset and buy you the time in order to do a true cash flow analysis of your idle cash sitting there for three months or six months while you determine how you are going to alternatively find a better way to generate revenue. 

            Mr. Hanks asked what are the most current published rates with the state? 

            Ms. Woodward responded the state published their last rates on December 15 and in Fund A it is 4.98% and Fund B is 5.05%.  This rate gets posted and updated everyday. 

            Mr. Hanks stated it is 4% to 5% and we will have to cut down to 3% if we go someplace else.  This still has to be one of the approved locations by the state?

            Mr. Lyles responded yes. 

            Mr. Fennell stated I think our budget only planned for 2% interest. 

            Mr. Hanks asked do you think the safe portion is really safe? 

            Ms. Woodward responded I am hearing that but the problem we have right now is going to be accessing the SBA website.  In the past, you could access it using one of the account numbers and you could see everything posted in the way of activity through yesterday.  The problem is now when you access it the only thing new is a quotation of this remodeled interest amount gets recomputed everyday.  The balances currently showing as of this morning are October 31, the only additional information that has been added to the balance information is to take the October 31 balances and arbitrarily divide them into this new Fund A AAA rated and Fund B potential problem.  Nothing else has been posted I cannot tell you what activities have transpired for the month of November. 

            Mr. Fennell read an update from the SBA for the record:

           

We are pleased to announce that the LGIP will reopen on 12/6/07 at 7:30am.  As you know, the LGIP was closed to redemptions on 11/29/07.  At the direction of the Trustees, the SBA engaged an independent investment advisor to review the situation and recommend the best way forward.

The SBA engaged BlackRock for the assignment. BlackRock is the largest publicly traded asset manager in the United States with over $1.3 trillion of assets under management.  They are also one of the largest managers of cash and liquidity in the world, with over $290 billion under management; including almost $220 billion of traditional money market assets under management in the United States.  Their charge was to optimize participants’ value in the fund, to provide the greatest possible liquidity to participants and to give us the best chance of creating anew LGIP that will rebuild participant confidence and be an ongoing entity.

BlackRock’s plan was presented yesterday to the Trustees and was accepted by unanimous vote.  At that meeting, the LGIP Advisory Committee also recommended that in order to restore confidence in the fund, management of the assets be moved from the SBA to a world-class manager with deep experience in money market funds.  The Trustees named BlackRock as the new manager for the assets in the fund on an interim basis (meaning that the permanent manager will be named within 90 days).  Below is a participants’ guide to the plan.  It describes how the LGIP will be restructured under the plan, how it will work and where you can turn should you have additional questions.

We thank you for your patience and support during these difficult times. It has been an unprecedented time in the capital markets and for the SBA, and we know that the issues with the LGIP have created difficulty for you; and for that we are sorry.  However, we believe we now have a very positive way forward and we look forward to working with each of you in meeting your needs.”

           

            Mr. Fennell stated also the president of the SBA resigned. 

            Mr. Hanks stated we just went with PGIT; is it invested in the same?  

            Mr. Daly responded I will have to find out. 

            Mr. Hanks stated I want you to find out because I do not want to have everything in the SBA. 

            Mr. Fennell stated I looked at their newsletters which they  publish to tell you what they are investing in.  It has been fairly open but it looks like it is just generally commercial paper.  Obviously what they did was invested some of the commercial paper into people who were actually giving loans, basically, for housing.  They did not invest directly in the mortgages but from what I can see they invested in people who gave the mortgages and is where they got caught.

            For on-hand money to have 99% of your money not in commercial paper and only 1% in T-Bills even junk bonds do not do that, they have at least 5% in T-Bills not to mention overseas funds.  This is not a reasonable thing to do for people who need short-term investments.  I wish the Governor had stepped up stronger instead of we will back this with a full faith credit of the State of Florida, he has not said that, he backed away from using the funds from employees retirement because somebody stepped in and said don’t touch it.  He is going through a case now where he is trying to cut taxes.  There are reserve funds the State of Florida has but I do not know that he has made a very strong stand behind this, I just do not see it. 

            Mr. Daly stated BlackRock is their shield and the reputation BlackRock has.  We need to find out what direction the Board would like us to take with the initial $2 million plus the water and sewer part and the additional accounts.  Should we leave it another month?

            Ms. Woodward stated there is another item we need to add to the list and that is last Friday Broward County did their wire transfer for the assessment revenues they collected on behalf of the District.  If you recall from our budget it is more than $2 million.  $1.3 million went into our operating account last Friday and in prior periods that would have been something available to be temporarily parked in an SBA account but we now have it in our operating account so we need to address how to divide it temporarily at least. 

            Mr. Daly stated it is not generating any interest in our operating account right now. 

            Mr. Hanks stated the $1.3 million is in a separate entity. 

            Mr. Goscicki stated it is in the bank account right now. 

            Ms. Woodward stated what you are looking at is roughly 60% of our budget for the year for the general fund. 

            Mr. Hanks stated I would like for you to come back with a recommendation for the $1.3 million in terms of what will satisfy the state statute. 

            Mr. Fennell stated I would say we should take out the funds we can from the SBA and put it in a safer place. 

            Mr. Goscicki stated with the SBA account is what in there now appears to be backed by pretty secure investments the concern we had is the state came in and set some arbitrary rules last month saying you cannot take 15% of your money and the concern is they can say we changed it to 30%, 50% or whatever.  Who is to say what the percentage is going to be; we are not big players in this fund compared to other entities and we think it is just safer to take the hit on the interest in the short-term, pulled the money out and see where this goes.  We cannot afford those kinds of hits and we will come back with some investment strategies. 

            Ms. Zich stated I have someone who teaches international business who came to me and said surely you do not have your money in that.  He said if you do get it out as soon as you can.  I am definitely voting to get it out.   

           

On MOTION by Ms. Zich seconded by Mr. Fennell with Ms. Zich and Mr. Fennell voting aye and Mr. Hanks voting nay to withdrawal the maximum allowed from the SBA fund was approved. 

 

            Mr. Fennell stated Mr. Goscicki I would like to have you work with Ms. Woodward to come up with a uniform policy and bring it back to us next month with what you think we should do.  We need it from a standpoint of cash flow and a strategy going forward. 

            Mr. Hanks asked if we make a deposit to the SBA where do those funds go? 

            Ms. Woodward responded my understanding is Fund A.  Supposedly, they have identified those items at risk and they have been isolated into two funds.  We can certainly hope any new monies are not going to pour into the investments in Fund B, therefore new deposits should go into Fund A.  Any new deposits will always be accessible according to the new rules. 

            If I take the funds out tomorrow and move them into our checking accounts I want to remind you that currently there is no interest on that or do you want us to consider the interim?

            Mr. Fennell responded at this point no interest for a month is fine just take your time figuring out what we should do and come back to us next month. 

            Mr. Goscicki stated if there are any changes in the interim. 

            Mr. Fennell stated where the money is safe is the only real criteria we have. 

            Ms. Woodward stated $500,000 I cannot pull out, we have to leave it. 

            Mr. Hanks stated it is at risk whether we leave it or not. 

            Ms. Woodward stated the only thing we can take out is what I identified as AAA funds. 

            Mr. Hanks asked are we going to get AAA rated investments?

            Mr. Fennell responded I can tell you if we get into a treasury rated T-Bill fund, yes.  You are going to get together to form a group consensus, come back with what our options are and meanwhile we would like to have a letter to Senator Ring giving him an overview of our situation, we have $500,000 of our funds stuck there.  Frankly we are concerned there was no insurance and the state did not back this, there seems to be a criteria change.  I know they have formed groups to investigate but frankly, if you must investigate something this is what we want you to investigate. 

            Mr. Lyles stated I want to be sure I understand.  I am assuming this is for your signature.

            Mr. Fennell stated correct.  

            Mr. Lyles asked are we asking Senator Ring to do his own investigation of this situation?  I think it is somewhat predictable that he is going to say the Governor, the Chief Financial Officer and the Attorney General are all over this.  They have launched their own review and are issuing a position and I will defer to them.  I do not know that we want to make a request of him.

            Mr. Fennell responded I do not want the same people who are running it to investigate themselves. 

            Mr. Lyles stated the person who was running it resigned. 

            Mr. Hanks stated it would be the same thing if we were investigating the manager’s operations here as a Board. 

            Mr. Lyles stated something like that. 

            Mr. Fennell stated we are looking for a Senate legislative investigation on this issue and something independent of the political process that is responsible for such.  All of these guys are political appointees.  I have read the clarifications and such and I really do not see where they are explaining the decision.  As far as I can see frankly, there are questions on the State Retirement Fund also. 

            We are asking our representatives to have an independent investigation of what happened to those funds and why it occurred, why were the funds not guaranteed and why isn’t the state standing behind it. 

            Mr. Lyles stated I am going to work with the manager and try to pull a draft together for your review. 

             

 

SIXTH ORDER OF BUSINESS                        Report from Landscape Architect on Site Plan Amendment and Landscape Plan Upgrades for Utility Plant Site

            Mr. Skehan stated we had this  discussion this past week with Mr. Daly and Mr. Goscicki and circled around this specifically.  Right now we are going to pull this plan back to take a closer look at it in conjunction with a cost estimate we had from the contractor to be able to initiate those changes. 

            Mr. Hanks asked are these the trees around the perimeter? 

            Mr. Skehan responded that is correct.  We are going to take a closer look at it and it is not going to be a change order to the current contract.  We are going to look at this as putting it out as a separate package. 

            Mr. Hanks stated it is the installation of landscaping.

            Mr. Skehan stated yes and providing the trees.  We are looking at trying to do it much more cost effectively. 

            Mr. Hanks stated we are bidding out. 

            Mr. Skehan stated yes.  At this point, it is not moving forward as we had initially thought and after discussion thought it would be much more effective to do it this way. 

            Mr. Fennell asked are there any changes to the plan? 

            Mr. Skehan responded that is what we are going to look at also.  I had a discussion this morning with the Landscape Architect.  I had some questions about what was on the plan versus what was required, the types of plants, number of shade trees, et cetera.  He has a memo he has prepared partially and I needed more information to be able to bring back to the Board so you have a better idea.  It is not something that is pressing right now that has to be done and we want to be able to do it in conjunction with some of the site plans which are going to be taking place before they become necessary with the now plan.  We are taking a look at what has taken place, what will take place and how to put this all into something more comprehensive and still at the same time satisfy the needs of some of the local political interests. 

            Mr. Fennell asked is there anyway to create more of a berm as opposed to just trees? 

            Mr. Skehan responded we have a berm already as part of the site plans.  Part of the question is the density of the shade trees and Areca palms.  The city does have some specific requirements and they are requiring a shade tree every 40’ along the perimeter and that is just meeting the desires of the local planning council.  At this point it is making sure the Oak trees proposed as part of the plan are probably the most wind and hurricane resistant and they are recognized for that but providing for adequate clearance.

            Mr. Hanks stated have the discussion with them that Oak trees grow out and if they grow out are they going to be banging into or limiting our ability to maintain our facilities.  How we better off mixing in Cypress, Mahoganies or whatever.  I think rather than go with monoculture we should have a diversity. 

            Mr. Skehan stated I did not get in the specifics of our discussion. 

            Mr. Fennell stated we do not need limbs blocking our way in and out; we are a facility that has to operate and you have to take that into account.  We cannot have 10 nor 15 years from now a disaster on our own facilities where we cannot get out which frankly is what happened to the rest of the city.  There were streets you could not go down just because of the trees and it did not take a Class 2 hurricane it barely took a Class 1.  They have to get out to the pump stations, we know the power is going to go out and we need the pumps to keep the sewers from backing up. 

            Mr. Hanks stated what we do here in the selection of trees is not going to affect the majority of access.  The majority of the access issues we cannot control. 

            Mr. Fennell stated we had problems getting out of the plant because of the trees down on the street and we had to cut trees to get down the roads.  I think you need to take that kind of an attitude and you need to look at this as a Class 2, Class 3 hurricane proof to keep us functioning and these trees cannot be an issue for us. 

            Mr. Hanks stated or look at it in the terms of placement in working on the city on where we put the trees rather than the species. 

            Mr. Skehan stated there are certain trees which are much more resistant to the higher wind velocities and certain varieties of palms are much more resistant but palm trees do not classify as shade trees also. 

            Mr. Fennell asked why do we need shade? 

            Mr. Skehan responded it is one of the requirements. 

            Mr. Fennell stated we are not going to have picnics. 

            Mr. Hanks stated I would rather see us comply with the best of our ability with these requirements to cooperate with the city.  There are placements that will allow for resistance to stronger winds.

            Mr. Fennell stated I do not think they take into account wind forces on trees. 

            Mr. Skehan stated they do.  We will be coming back to the Board with it and to look at how to approach it more cost effectively than where it was initially. 

 

 

SEVENTH ORDER OF BUSINESS                  Consideration of Final General Engineering Services Contract

            Mr. Goscicki stated this is an update for CH2MHill’s Engineering agreement.  At this time we are working under an old agreement dating back to Gee and Jenson’s time.  The purpose was to create a new standard engineering agreement.  This is a carryover from the last Board meeting; it has been reviewed by myself and Mr. Lyles’ office.  The structure of this agreement forms the basis for all future work and essentially codifies the way we are currently working where the engineer every time we are ready to undertake a new program, we get a work authorization from the engineer with a cost and schedule.  Either we would authorize the work on a lump sum basis or we would use the rate schedule attached hereto.  The thought being we would enter into a work authorization at the beginning of each year for general services; attending the meetings, permit reviews would be done on the hourly rate basis and as we are getting into other substantive projects we negotiate a separate lump sum and do it as a separate work authorization approved by this Board. 

            Mr. Hanks asked are you a Sr. Professional?

            Mr. Skehan responded yes.

            Mr. Hanks asked and Ms. Early, Mr. DaSilva and Mr. Bohorquez?  

            Ms. Early responded Mr. Bohorquez under engineer and Mr. DaSilva under project manager.

            Mr. Fennell stated it is too much. 

            Mr. Hanks stated there is a lack of engineering out there and with the cost of living that has been going on within South Florida it is hard to find engineers unless it is something where you can pay their salaries. 

            Ms. Early stated people steal them and want to give them a 30% increase. 

            Ms. Zich stated this is a 30% increase. 

            Mr. Skehan stated our rates have not been increased for five years so we have been working under rates that go back quite awhile and over the last five years as much as some of the other things have gone up in the market for fuel, materials to manpower, insurances and such our rates are competitive in the market now with other firms and we find it very difficult right now to find qualified people. 

            Mr. Hanks stated college students do not see engineering as a viable profession.  They have to work to hard and salaries coming out of it are not as competitive as other areas.  They are high when you compare it to teachers but as your development occurs at a certain point you top out and there are degrees much more lucrative than engineers, such as doctors or lawyers.  Whenever I see a contract with the hourly rates I try to think how we as a profession continue to provide appropriate rate structures so the profession can grow. 

            Mr. Goscicki stated we have looked at the rates and compared them with some of the firms we deal with around the state and the rates are competitive.  We purposely put the comparison in which was provided by CH2MHill to be able to show you what the current rates are and what NSID is but at NSID we are going back next month with the same agreement to get them up to date. 

            Mr. Hanks asked how hard would it be to find somebody with Ms. Early’s talents?  How quickly could you find another engineer in Broward County? 

            Mr. Goscicki responded you cannot.  I get calls from recruiters at least once a week just because I happen to have P.E. behind my name and it is that type of market around the state right now. 

            Mr. Fennell stated you make it hard to negotiate. 

            Mr. Hanks stated negotiate or not I am trying to maintain the appropriate talent. 

            Ms. Zich stated I am amazed but I do not know what other companies, I am not familiar with engineers’ salaries. 

            Mr. Goscicki stated I can tell you the salaries of the individual is take these and divide them by three and that is the salary of the individual.  Typically engineering firms of CH2MHill’s size operate under a salary times a multiplier basis.  The multiplier covers the fact that you have office rent, overhead, insurance, employee downtime and non-billable hours being the biggest part.  Small mom and pop firms are 2.5.  I think it is important for the Board to know your engineers are not bringing home salaries of $150,000 to $300,000 a year. 

            Mr. Hanks asked Mr. Lyles have you looked over this agreement? 

            Mr. Lyles responded I have superficially reviewed it.  My office worked with Mr. Goscicki on this.  We see a lot of engineering service agreements and my only comment which I made to Mr. Goscicki is in terms of what you are actually doing we are looking at an existing agreement that is in place with existing terms, conditions and rates.  They have been modified from time to time since it is a freestanding rate schedule.  What we are doing is amending the agreement, not entering into a new agreement with CH2MHill.  To do that we have to go through the proposal process so we will accept the changes as an amendment to the existing engineering services agreement along with whatever rates the Board authorizes and it will have to be put into the form of the existing agreement to be executed by CH2MHill and the President on behalf of this District.  To keep the lines straight on what we are actually doing here so the minutes reflect that we have never gone out and looked to enter into a total new agreement with anyone to do that we have to go through a notice and proposal process.  This is strictly an amendment to the current agreement, which is in effect and has been for a long time. 

            Mr. Hanks asked is there anything in here that is a time constraint as to when we could go out for additional engineering services? 

            Mr. Lyles responded no, I think you can consider it at any time and the notice period is 30 days.  Anytime you decide you want to change engineers and go out to get proposals it is 30 days.

            Ms. Zich asked does it hurt to go out for proposals? 

            Mr. Lyles responded engineering services in the State of Florida have to go through something called a Competitive Negotiation process.  CCNA is the acronym for Consultants Competitive Negotiation Act.  It applies primarily to engineers, architects, surveyors, people who do that type of technical work.  What that entails is published notice that you are interested in proposals from qualified engineering firms to perform the service of engineer for this District.  Engineering firms will give you their background, qualifications and credentials and you with the assistance of your staff would typically rank those proposals, select the top three you think are qualified, rank them in the order of one, two and three, and then it is up to staff to negotiate a fair contract and bring it back to you.  This is when the dollars and the rates come in.  If they are unable to do that with the first ranked proposer then they go to the second and then third and if that does not work you go through the whole thing again.  However, the process takes several months.  Can you, any time you want to under the current contract you can certainly do that but what you will get in turn for that process is not prices you will get qualifications, experience, background and that sort of thing. 

            Mr. Hanks stated it is not a question of are we happy with the price we are getting from CH2MHill it is are we happy with the quality of the product and services if that is what you are interested in doing. 

            Mr. Goscicki stated the way CCNA works is you make your selection first on qualifications as Mr. Lyles just described and then you would negotiate price and only if you could not negotiate price you would go to your number two firm.  I would suggest to the Board now is not the time you would want to change engineers.  You have authorized CH2MHill to move forward on your consumptive use permit, and the pre-design for the nanofiltration plant.

            Ms. Zich stated that is why it would seem like if they were going to come to us with this kind of increase if it had been six months ago. 

            Mr. Goscicki stated the authorizations the Board approved have been lump sum amounts based on a percentage of construction.  It is not this hourly rate. 

            Ms. Early stated the majority of the work we do is lump sum. 

            Mr. Skehan stated where this was recognized was last January or February when we were looking at initially and were being negotiated with Mr. Petty at the time.  It was recognized that the contractual agreement was not current and there was not something there that would protect the District and we were looking to take everybody’s interest into consideration with a new contract and modifying what we had so the language was there for everybody’s interest.  There have been a number of things which have taken place since that time and we have been trying to move this on to the agenda for some time. 

            Mr. Hanks asked one of the concerns I had on the previous renditions of this was the maximum liability as well as the indemnification.  Did it get struck out, added? 

            Mr. Skehan responded it was struck. 

            Mr. Lyles stated the draft here has a provision for cross indemnification but the indemnification on the part of the District is only to the extent of our own members that causes harm.  If that is the case and it is our negligence, then they would be indemnified to the extent our law allows and there are limitations not the least of which is your sovereign immunity cap on your ability to indemnify.  It is narrowly tailored to when we are at fault or our employees screw up or something that is our negligence.  We absolutely insist on them indemnifying us for their professional negligence if there is any. 

            Mr. Hanks asked what about the time limit if a deficiency manifested itself within one year or something like that? 

            Mr. Skehan responded that was captured within the general overall conditions and what would be reasonable for a particular situation. 

            Mr. Hanks stated you and I both realize something on a plant this size may not become within one year or the timeframe.  Has that portion been removed? 

            Mr. Skehan responded it was modified such that it would be capturing the interest of the District and protecting the long-term interest. 

            Mr. Fennell asked do you really think it is the right price?

            Mr. Hanks responded there is one I do not agree with.  I think Mr. Skehan and Ms. Early should be billed at $120, I think it is a fair price for their services.  Is there anybody in your organization who is a Principal or Sr. Project Manager?

            Mr. Skehan responded we have people who are in the $220 to $250 range that would fit into that category. 

            Mr. Hanks asked who did the Water Rate Water Use Study?

            Ms. Early responded Mr. Ed Greene. 

            Mr. Skehan stated he would be a Senior Project Manager.

            Mr. Hanks stated most of the people we deal with are in the $95 to $145 range.

            Mr. Skehan stated yes.

            Mr. Hanks stated most of our contracts are lump sum. 

                       

On MOTION by Mr. Hanks seconded by Mr. Fennell with Mr. Hanks and Mr. Fennell voting aye and Ms. Zich voting nay the General Engineering Services Contract with CH2MHill was approved. 

 

            Mr. Hanks stated I would like to go out for proposals to see what else is out there in terms of engineering services.  I think you have done a great job but we are about ready to undertake $43 million worth of improvements.  Maybe this would be the time to get another look at the project to see if we are approaching it in the right way.  I also have some concerns on how we have approached, which has been sort of an ongoing arrangement, how we have approached the drainage site events.  I think at least at a minimum we should go out for the drainage side; we may still end up keeping CH2MHill for the Enterprise fund but for the drainage I would like to go ahead and open that up.  I would like to have them separate so we can make the appropriate selection. 

            Mr. Fennell asked why would you separate them? 

            Mr. Hanks responded different firms have different focuses on their expertise.  We may find somebody who has an expertise in drainage but does not have it in the water and sewer side.  We are considering going through a capital project for the drainage side to take care of some of the identified deficiencies.  Unfortunately, what is happening is we have had Gee & Jenson, CH2MHill from the beginning and every time I come across one of these issues or problems we did not foresee and why are we resolving it now whether it be for the drainage problems on the east basin or for University Drive.  I would like to see a little more foresight into taking care of those areas, being proactive to come up with appropriate modifications to the drainage manuals to reflect the fact we are in a build out position and we are looking to make some improvements within parts of our system.  I felt it was bit of a tug of war trying to get the Drainage Criteria Manual updated to reflect some very minor changes where it reflects the amount of storage actually required. 

            Ms. Early stated on the animal hospital we tried to get them to bring it up and it was a financial burden. 

            Mr. Hanks stated many of these projects have been built and we are dealing with existing situations.  We should have something appropriate for a tiered system by way of, you go ahead and put in a paved area to increase your parking spaces for handicapped you do not have to bring the whole site into compliance.  Try to come up with some different tiers, it should not be coming down where we are getting a permit project, I want the engineers to be recommending here is where we have a deficiency in our permit criteria manual and here is how I think we should solve it. 

            Mr. Fennell asked do you think this will help solve the problem?

            Mr. Hanks responded I want to see who is out there. 

            Mr. McKune stated we have never done it in my experience. 

            Mr. Fennell stated we have changed engineering but it was not our choice. 

            Mr. Goscicki stated you have changed engineering firms and I think you are seeing some of that now in the change from Gee & Jenson to CH2MHill.

            Mr. Hanks stated it brings another question of as a Board do we want to consider again how we have our internal structure in the District?  Do we need to have someone internal who is a CSID employee who is providing management or engineering services or brings management and engineering expertise to the table?  Mr. McKune you are an outside consultant yet when we have these change orders coming through or these other issues and they are months down the road were you involved in the process to try to stay on top of things for the Districts interest to say listen to this, it  needs to be taken care of?  I am going to cast a very big net because I think there are a lot of issues we have right now from the reporting of the change orders to where we are specifying materials.  I also would like to consider the management contract as well.  Do we want to have an internal position that is the District Manager, do we want to go ahead and see what other proposals are out there? 

            Mr. Fennell responded we have not changed engineering firms for a long time, actually we never did.  I do not know if as much information as I would have liked came from Gee & Jenson when it went into CH2MHill.  I think the real issue is are we happy with what we have or not and you do not seem like you are happy.

            Mr. Hanks stated I am not. 

            Ms. Zich stated I do not see where it would ever hurt to go out. 

            Mr. Hanks stated I am not going to reserve my comments for just CH2MHill.  Over the last year or so we have worked our way through the transition of various managers.  It was a bumpy road and we have gotten through it but where I feel we have not been getting the right focus is for years I have been asking where we have been looking for other insurance.  It has always been there is not another company.  Mr. Daly looks and realizes a considerable savings on the insurance. 

            Mr. Goscicki stated I responded to each of the Board members on that we did not manage your insurance.  Your internal accountant managed it and when she was gone, Ms. Woodward picked it up and did a great job.  One of the reasons I have the scope of services in front of you tonight is that it is really important for me and for the Board that we decide on a scope, decide on roles so we can work better together as a team because we still bump into each other and tonight’s discussion were some of those items.  We have not been working together we have been working parallel paths here and we need to work joint paths on these things, particularly on the financial side.  This is the only district we manage we do not do the accounting for and it creates a different dynamic of how we pull that together.  I am not suggesting changing that I am saying we need as a Board you to define those roles so we know where we fit and know what our responsibilities are to be proactive on those and if it not our responsibility we will oversee it to the extent you want us to and if you do not want us touching it we will not touch it.   

            Mr. Fennell stated let us take one issue at a time.

            Mr. Goscicki stated right now you have authorized CH2MHill to move forward with certain major projects for you.  I think it is incumbent we continue to move forward.  If you were going to look at a new engineer and it sounds like you are considering a new engineer for general engineering services saltwater and general engineering services around water and sewer utility and still continuing to move forward with the current authorizations we have with CH2MHill for the design of the water and wastewater plant. 

            Mr. Fennell stated I think this is a good idea and I am not sure I even understand what we are committed to with CH2MHill.  I would like to have a list of what we are committed for.

            Mr. Hanks stated this is something we can tackle in January.  It just seems like the time to go ahead. 

            Mr. Fennell stated I will ask management to put it on the next agenda for discussion.  What I would like to understand is what is our commitment and I think you raised a couple of questions in what is our current structure and current relationship.  What I think we start with engineering procedures and who does what.  We already ran into an issue tonight with the allocations of funds and how those get signed off.  We need to understand what the current commitments are, what is our current engineering structure and if you have any recommendations. 

            One of the other issues is all along we have felt we needed a District Engineer to monitor programs, to be our monitor and I am not sure how this all fits in now.  Part of it has to be whoever the manager is has to be very confident with who the engineer is.  There has to be a working relationship going on and we have to look at that, too. 

            Mr. Hanks stated ideally I would like to have a position where we have a technical consultant and a separate technical engineering consultant, not someone who is hearing the recommendations but is actually doing the designs. 

            Mr. Goscicki stated I do not think you can afford that level of expertise within the District.  I understand the concept but to afford the level of expertise you are looking for to lay out conceptual designs and they way you are going to move is an expensive undertaking.  That is the kind of individual who is not walking around out there and I do not think you need them.  You need that now because you are in this big capital improvement program, which we need to get through but two years from now your conceptual design is done, you are cranking out final work and you are not going to build another project like this for years.  

            Mr. Hanks stated or  are we are going down the wrong path, clarifiers of any of those miscellaneous technologies.  It is a small piece of insurance, a small price to pay for peace of mind to have another consultant who is familiar with those technologies to say that is not a bad solution. 

            Mr. Goscicki stated what many organizations do is hire another firm to do some value engineering and to bring a third party in who oversees.  Now would be the time to do it during the preliminary design phase to bring a third party in who has that value expertise, it is not going to be is it the right technology, we have reviewed that and made that determination but in terms of we are 23% complete design is there a better way to build this mousetrap and get more for your money. 

            Mr. Hanks asked are we paying attention to right items?

            Mr. Skehan responded case in point, today, we sat down with Mr. McKune, Mr. Goscicki and Mr. Daly with our architect and lead engineer for the nanofiltration plant to look at some of the features initially being considered for the architecture of the building and looking at what is taking place.  The architect had spoken with the Coral Springs people along the lines of what you are suggesting and looking to see what those requirements are.  We were discussing different ideas; different thoughts of some of what the initial concepts were on paper to say do we need to go this direction or that direction, what are some of the considerations we need to take in account for the neighborhood with houses, noises and visual considerations.  All of those things were on the table this morning in trying to make sure from our perspective the interest of the District are being looked at in advance of any kind of design.  I think it speaks to one particular point.

            Mr. Fennell stated we will table it until next month but I think the general question is how to form our engineering services going forward for the next few years.  My particular concern is program management and that it is well done.  I am looking for cost charts and all that kind of stuff that I know exist and ties it all together and part of that is also management services.  I am not sure if this all comes from local consultants or whether or not we rely upon more management services.  I guess what we are looking for is an overall plan. 

 

EIGHTH ORDER OF BUSINESS                     Discussion of Emergency Bulk Potable Water Agreement with the City of Coral Springs

            Mr. Fennell asked did you have a chance to look at it?

            Mr. Lyles responded we did and we are down to a second update.  Our concern is focused primarily on the mechanism the city initially proposed for pricing and paying for any necessary repairs, replacements or things of that nature.  Right now they have the ability under this proposed agreement to go ahead to do it, decide what the price is and we pay 50% of it.  In other parts of this agreement for instance construction of a project we get bids and CSID is part of the process and we can say we do not believe this has actually been put on a City Commission agenda yet for vote and we think we can go back to say to them we would like to have some ability with some reasonable period of time to look at a proposed repair costs to make sure it is reasonable.  On the other hand it is a small point if they do something and you want to say it has already gone down the path this far let’s just go with it.  We can live with the other provisions in here but that is the one I wanted to put in from of you.  It is on page three of eight, Section 2.05(b). 

            Mr. Hanks stated I think we are okay with that. 

            Mr. Fennell stated this is just for the repair if something goes wrong or goes bad they will pay 50% and we will pay 50%. 

                       

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the Emergency Bulk Potable Water Agreement with the City of Coral Springs was approved and authorized for execution. 

 

NINTH ORDER OF BUSINESS                       Staff Reports

            A.        Manager

                        i.          Review of Severn Trent Scope of Services

            Mr. Goscicki stated the scope of services was handed out to you tonight and I also emailed each of the Board members, Mr. Daly and Mr. Lyles a copy.  I sent you a redlined version, which show the changes Mr. Daly and I came up with when we went through the original scope I presented to the Board.  The way we went through this is the concept we put forward is Severn Trent will serve as your manager and supplementing the manager would be, my terminology, a Director of Operations who would oversee all of the staff within the District and provide day-to-day administration of the District’s personnel and service contracts.  It is essentially the role Mr. Daly is serving in now even though he is overlapping into some of the management services. 

            Mr. Hanks asked would the manager be a Severn Trent position?

            Mr. Goscicki responded yes. 

            Mr. Hanks asked the Director of Operations?

            Mr. Goscicki responded would be a District employee.  What we have set up is we are providing the higher-level policy implementation oversight, the general administration which is routine stuff from coordination to managing and implementing budget directives to coordinating bidding services.  It is the implementation of policy at the overall direction of the Board is what we see our role as.  Where the Director of Operations is more involved with administering contracts and directing and supervising personnel.  If you like we can walk through this conceptually if you have not had a chance to read it.  The basic programs are general administration dealing with items such as implementing budget directives, and as part of the budget here are the things we want to accomplish this year.  It is our job as manager to make sure those things get done.  It sounds trite but it is an important issue in terms of what an overall management responsibility is, to assist you with negotiating any contracts, we will not administer contracts but it is our job to assist with developing and negotiating those contracts whether it is with CH2MHill or with your uniform vendor for uniforms for the operations staff, we provide the annual disclosure information, we prepare correspondence.  We have correspondence there because it ties in with our records management.  The second major issue is policy implementation; I think one of the things you look at a District Manager for is to make sure we are staying abreast of what the current issues are out there from a water management issue, to a fiscal policy issue from any other major issue of general government we see facing the Board and we will bring those issues to you in a proactive way, and we are dealing with them in a proactive way and offering our recommendations to the Board on how to deal with those.  We will coordinate with you in that regard and provide administrative and financial analysis such what is the best investment policy.  We identify those policies, analysis them, prepare plans and procedures on how to implement those policies, prepare staff reports and advise the Board on where we are with the implementation.  The third major element we are discussing a lot tonight is capital program administration.  We see that as a basic part of our responsibility and we are going to coordinate with the District Engineer on the capital improvements, we are not going to define them that is the engineers responsibility, but we will coordinate and something I think we have done a lot of in the last year is working with the engineers on what the program needs to be and what does it look like.  We will provide an independent review of the engineers proposed capital improvement and provide our own recommendations to the Board.  We will prepare the fiscal plan that supports the capital improvement program including the bonding we have gone through.  With the District Engineer we will schedule the capital improvement program implementation and we are going to administer the various engineering and construction contracts. 

            Mr. Fennell asked what do you mean by administer? 

            Mr. Goscicki responded we are not managing the contracts, the engineer is actually managing the construction contracts but the administration will run through us in terms of assuring dealing with the change order process is in place, that monies are not being expended without appropriate authorization, the documentation is flowing where it should, and that the records management is being kept.  It is an administrative function we are not trying to take on the engineer’s role. 

            Mr. Hanks asked who signs off on costs?

            Mr. Goscicki responded the engineer signs off the work that has been done and is a legitimate payment and we sign off that there are monies available to pay this and that it is being paid from the appropriate funds.  There is a dual sign off on all capital payments. 

            Mr. Fennell stated with the capital sign off the engineer can say yes the work is done but it does not get paid. 

            Mr. Goscicki stated until we sign off also.  Again, we will obtain financing as necessary to make sure things are in place, ensure proper accounting procedures, administer and implement the capital program financing.  I think we have gone through a lot of that in helping getting the bond issue in place.  Clerking support, we essentially we are your clerks; the city clerk for the District.  We prepare all of the advertisements, distribute agendas, transcribe all of the meetings, we maintain the District seal – actually it is maintained here but I would propose we maintain it within Severn Trent.  We review all documents being presented to the Board, we authenticate the District documents for appropriate signature, and we retain all public records and arrange appropriate storage.  As part of that we also get into the records management aspect of that so not only are we providing the clerking function we are your records management organization.  We have a document management system protecting the integrity to ensure compliance with state law, promote sharing of information and work collaboratively with District staff, provide public record searches as requested, provide the Board with all CSID records.  In financial services, we looked at our standard scope of services we normally provide and broke out the accounting aspects and said the District is going to provide the accounting.  We left what we think needs to remain with your management company; we will review the budgets as prepared by District staff to ensure compliance with the Districts objectives and fiscal policy.  We think you want an independent third party review of the budget before it comes to you.  We assure the establishment and maintenance by the District of government fund accounting systems, which is in compliance with the accounting laws.  You happen to have an excellent accountant who knows all of this.  Ms. Woodward could leave tomorrow and decide she wants to work in Ohio.  I think you want to look to your management firm to make sure whatever is going on with your accounting staff is in compliance, being done correctly and there is that oversight.  Let me emphasize this is not a matter of trust or we do not think these people are good people or competent people this is a matter of checks and balances and how are you protected as a Board where you have systems and processes in place and are not just reliant on we have a great individual that we trust and love and beyond that you need to have systems and processes as a governmental entity.  We think we are providing some of those checks and balances.  A lot of services on the financial services side is providing the checks and balances we normally do through a separation of those authorities in our own shop.  We prepare the required investment policies procedures, of course with state statute, we would prepare and coordinate the application of banking services as directed by the Board and coordinate and facilitate the debt service payment. 

            One of the things we have added at the Board’s request is that we conduct an annual risk analysis on an annual basis as part of the budget process.  The fiscal risk analysis will be a high-level overview of how much money do you have, were is it or living from cash in hand or borrowing from reserves to make payments would be part of an annual financial report to look at your financial position and financial risk.  Special assessment services.  The SBA is a state sponsored account it is set up to provide a safe haven and your monies are there. 

            Mr. Hanks stated it would have been nice to have heard or got an email from the District Manager saying hello, this is happening, we would like to let you know about it. 

            Mr. Goscicki stated I could not agree with you more and is why the scope is in front of you.  We did that for the Districts we do the accounting for and have been on a constant email stream with those Districts.  I need to bridge this here, for your benefit we need to bridge this. 

            Mr. Daly stated I do not want to be the bad guy in this. 

            Mr. Goscicki stated there is no bad guy in this, you are moving this way and we are moving parallel.  It is not that you are running off in this direction and we are running this way, we are running parallel directions and we need to get those together. 

            We are special assessment management firm; we do your rolls on an annual basis.  We manage the rolls if anyone calls with concerns we are the ones they are calling and we continue to handle that.  Operational oversight is a new area at the request of Mr. Fennell.  I have to tell you we have had some internal issues over this.  It is certainly an expertise Severn Trent has and in fact, I provided the Board today with a copy of a safety program we did at the Board’s request in November.  These are the kind of services we provide to our operating services clients so if you contracted with Severn Trent to be your contract operator to take over the operations of your water and wastewater plant these are the kinds of things we would do as part of the normal fee structure.  You are essentially asking us to give you some of the expertise from our operating services side that we normally do not do on the management services.  We kicked it around and said we are happy to do this kind of stuff as long as we keep it at a pretty high level.  Assuming the Board approves us moving forward with this scope I would work with Mr. Lyles on some of the language.  When we take over a contract operation we take on the liability for the operation and they are our employees and safety becomes our liability, if it is not in compliance with permits that is our liability.  If there is a risk management problem and we are not in compliance, it is our liability.  We are happy to provide the oversight and provide you some reports, but we are not willing, through a management services contract, to say this is all inclusive and we would stand behind it if something occurred down the road as a result of we did the safety audit and two months from now there is a safety problem.  We need protection in our contract that you cannot come back to say Severn Trent why did you miss that.  We are not operating at that level in a safety audit or a compliance audit within our management services to provide you that level.  The only way we do that in our operating services is literally we are the operator and it is our people hands on. 

            Mr. Daly stated I think the safety audit was primarily for outside oversight which is what you are providing; it was not a matter of liability. 

            Mr. Fennell stated I think it is an interesting question because obviously any discussions were within Severn Trent.  My own experience has always been it is good to have somebody else come in to get a fresh look.  I can tell you everything they asked for is going to be fixed.  However, I do not know that I really understood that you did not feel responsible for that stuff before. 

            Mr. Goscicki asked for a safety audit?

            Mr. Fennell responded as the manager. 

            Mr. Goscicki stated absolutely not. 

            Mr. Fennell stated I think I really have to think about what are you not responsible for. 

            Mr. Hanks stated it is the exclusions that kill you. 

            Mr. Goscicki stated we have put it in here now. 

            Mr. Fennell stated that is interesting. 

            Mr. Goscicki stated the historical operation here in going back to Mr. Gary Moyer days was the reason he did not want to own the operating staff was because as a management company we do not have that expertise.  You will not find any other management company out there that can give you any of this operational oversight.  It happens to be an expertise Severn Trent brings and is willing to bring as a value added to the table because we happen to have this other side of our company that does this around the world.  You will not find any other management company that can bring that skill and expertise to the table.  We are happy to bring it because we think it is a value added and a particular skill we can bring we just want to caveat that with just as we described in that this is an overview assessment and identification of where you may need to look to improvements but it is not designed or meant to be an in-depth, here is everything that could possibly go wrong and we have identified every little nook and cranny, that would be way outside the kind of scope we could provide; we do not have the numbers of people and time available to have them provide that level.  That gets into hiring an engineering consultant to do that level of analysis.  I think it is value as you have seen in this where we have gone through to identify what a safety program should look like, we have evaluated your current program against those multiple elements of communication, training, standard procedures, and documentation.  We have created a structure and evaluated where you are against that structure, identified where you are doing well, identified areas where you could do better and identified some very specific little safety things that need to be picked up.  We do the same thing on environmental compliance monitoring and some of the other issues. 

            Mr. Daly stated going back to the scope of service, in deference to Mr. Goscicki, we were on very different sides of the table when we first started this because it was based on what point of view you are taking.  When the scope of services said this is what we do, this is what I looked like to me anyway, it looked like going forward this is what we suggest the Board hire us as the management company to do.  From that scope of service I think pretty much every point in here is right on.  We can go back and argue about what happened with the multitude of managers and the poorly managed employees that were here, that is behind us and we need to go forward.  Taking it from a coming to the middle of the table and looking at these point-by-point oversight is kind of a glittering generality type of word, however it is needed in a lot of areas.

            Mr. Fennell stated what I think we need is another page that covers what is not covered. 

            Mr. Goscicki stated what is not covered in our contract is covered by provided services. 

            Mr. Hanks stated that is your position.

            Mr. Fennell stated it is a general manager concept of management is responsible for everything. 

            Mr. Hanks stated District provided services can kind of lead us to believe it is something internal whether it be Mr. Hyche, Mr. Fredericks or whoever.  You should have specific exclusions. 

            Mr. Goscicki stated we do not have any contracts where you put in negative scope, where we specifically write in we are not doing this or that.  The only thing from the management of the District that we are not doing is what we have shown as District provided services.  I think if there are other issues that come up and it is why were you not doing that, we thought you were, we need to address them as they come up because I could not give you a list now of that we have saying these are the things we do not do as managers; we see ourselves as your managers.  Taking all functions coming with management we would see our function, going back to the safety issue, we always saw our management function as ensuring you had a safety program, we know you do and we have reviewed your safety program with Mr. Hyche, what we have not taken on is the technical expertise of coming in and saying how good is your safety program because it is not a management function anymore that is now a technical expertise.  That technical expertise did not reside in the management company it happens to reside in our operating side. 

            Mr. Hanks stated even if it was not your job to provide the technical expertise it should have been the manager’s responsibility to let us know that it should have been done.  If we have not had a safety audit in 10 years, you should hire somebody to provide the service. 

            Mr. Fennell stated it sounds like there was a lot of good discussion going back and forth.  I think the oversight items are great but I think it also puts us  right back on us the need for a strong District Director of operations.  What you are saying is we are management but we are not responsible for certain things. 

            Mr. Goscicki stated we are happy to take the whole thing on but it has been clear to me, from my nine months sitting in this chair, you are very comfortable with dividing up these responsibilities and it is the Board’s desire to have a senior-level staff person on site who is your employee who manages those day-to-day functions while Severn Trent provides senior-level management oversight. 

            Mr. Daly stated the Board was satisfied with Severn Trent for the longest time and then there happened to be a change in the Severn Trent management cycle. 

            Ms. Zich asked are you going to continue to be our manager? 

            Mr. Goscicki responded no.

            Ms. Zich stated I thought you were interim and that we would have someone else by now, actually. 

            Mr. Goscicki stated me, too.  We are rapidly coming to that point and what I have told this Board and the commitment I have made to the Board is I will be here as long as I am needed to make sure there is continuity and a smooth transition.  I am not leaving Severn Trent or anything like that and I will still be involved.  We are looking at two options as to who will take over.  I envision no less than a four-month transition program between me and the new manager.  I know it was not easy for me to walk in cold and I would not do that to my successor. 

            Mr. Fennell stated you really were not cold. 

            Mr. Lyles stated as a reminder under the old, existing and proposed future management services agreement with Severn Trent the Board retains the right to approve whoever the District Manager from Severn Trent will be.  It is not the kind of contract where you will hire Severn Trent and whoever the stick in is there, you have to accept or else fire Severn Trent.  It has been structured this way for a long time and you will either have a comfort level or you will not and you get to approval the individual within the purview of the Severn Trent management contract. 

            Mr. Fennell stated what we need to be doing staff wise is strengthening staff, by that I mean I think we have a policy for school or training, if we do not I would like to see us have one.  There are programs for utility training and such but I think for additional business training and things like that we should encourage staff to get the additional training they need.  We are big enough where we need to have our own staff progressing.  We need to encourage not only internal but external kinds of education where they are going back to school to get an MBA or a degree.  The other problem we have is we need somebody like you not a junior level. 

            Mr. Goscicki stated there will not be a junior level person taking over.  The two people we are considering right now are both former public works directors and former county administrators.  Otherwise, I will never get out of here and I will be coming to every meeting for the next five years.  I will be happy to continue as a consultant to my manager and is certainly one of the things that will go on.  Clearly, I am in the middle of the capital improvement program working with the engineer and it is a role I will continue to serve as we go through the design.  This will not be abandonment on my part because I have too much personal commitment here already.

            Ms. Zich stated it does not have any numbers. 

            Mr. Goscicki stated the first thing I need is some agreement from the Board that this scope sounds reasonable and the way you want to move forward then I will put together a price.  What I was hoping to get tonight was agreement from the Board that this scope sounds like the way you want to move forward.  The structure has been worked out by CSID staff and myself.  Mr. Daly and I think it presents a good balance of what the Board was looking for in terms of optimizing the expertise you have, keeping your accounting in house, keeping your operations in house, providing the linkage which is Severn Trent’s expertise where we can bring that in as a value added, creating the linkages rather than parallel trains.  Parallel trains are not bad they are just parallel.  With the Boards concurrence this sounds like a good idea and meets your criteria I would ask you have the attorney start looking at the form of the contract we submitted a couple of months ago and at the same time we will put together a price structure to go with this and give it to the Board at the next meeting. 

            Mr. Fennell stated I do not think it is voting on anything.

            Mr. Lyles stated call it a green light. 

            Mr. Goscicki stated yes, where we are putting together a price on this where we are somewhere not in left field.

            Mr. Fennell stated the costs are not in here and the only other thing I saw that will become a tough issue for us is how do we handle the political relationships.  I do not think you want to get into the politics from what you told me before. 

            Mr. Goscicki stated we have in here our role is to coordinate with local governmental entities but we are not lobbyists we are your advocate so as your manager we are advocating on your behalf but we are not lobbying the legislature and getting involved at that level. 

            Mr. Hanks stated we need somebody to be involved on the various committees with Broward County and other entities so our voice is out there and heard.  I only have a certain amount of time I can dedicate. 

            Mr. Goscicki stated this is very much a shared responsibility among District staff who need to be engaged and your manager needs to be engaged. 

            Mr. Hanks stated we should have representation at one or more of these committees. 

            Mr. Goscicki stated Mr. Hyche sits on the South East Utility Council, which is an organization I created, of utility directors from all of Broward County and some from Dade and Palm Beach.  It was created to address just this issue; they are not as effective as they used to be. 

            Mr. Fennell asked are there any comments from staff?

            Mr. Daly responded we wish to do whatever the Board feels is best.  We feel this program Mr. Goscicki and I put together is all encompassing. 

           

                        ii.         Discussion of Cash Flow – Cash Transactions Analysis

            Mr. Fennell stated I think the big thing is the $1.5 million is not going to go to the SBA fund.  From what I saw, it looks like we had an extra $300,000 come in from the $41 million.  We came out with a favorable variance of about $400,000 for the month above and beyond what we would expect.

            Ms. Woodward stated we have $164,000 interest income generated.

            Mr. Fennell stated it is interesting we have already capitalized on interest.

            Ms. Woodward stated it is hard to say how favorable this trend is just by looking at this only because you would be making the assumption that our requisitions are coming in at an even pace and being paid at an even pace.  All I can say is as requisitions have came in they are being currently processed. 

            Mr. Goscicki stated when you look at your plant operations you are under budget for the first two months by $242,000.  I do not think that trend will continue I think you are seeing you are two months into the fiscal year and some of your purchases have not gotten all the way through the system yet but it is still a good place to be.

           

                        iii.        Request for Payment of Additional Services Fees for 2008 Bond Issue

            Mr. Goscicki stated this was a hold over from last month for the $15,000 requisition for our services during the capital financing and bonding which we did not tell you about ahead of time and asked you to pay after the fact. 

            Mr. Fennell asked is this real money?

            Mr. Goscicki responded this is real money.  Talk to your bond counsel, your general counsel, your engineers, and your special counsel.  We did a lot of work. 

             

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the request for payment for additional services for the 2008 bond issue was approved. 

 

 

                        iv.        Monthly Water & Sewer Charts

                        v.         Utility Billing Work Orders

                        vi.        Complaints Received/Resolved

 

 

B.        Attorney – Status of Special District Bill

Mr. Lyles stated the first reading of the bill occurred about 10 days ago without comment or discussion and without Senator Ring being present for the delegation meeting.  This moves it to a second reading and public hearing, which is going to occur Thursday evening.  There are a number of people who are opposed to this bill and who are going to speak against it.  From the report I received regarding your meeting with Senator Ring he is not interested in withdrawing or modifying at this point.  He is going forward with it.  Again, the bill is to create a commission at the county level of people who will be primarily appointed by Broward County Commission to review on a case-by-case basis all the special districts, community development districts, drainage districts, anything that has the word district associated with its names within the jurisdiction of Broward County.  The process the bill anticipates will take no longer than the year 2012, each district will be notified when it is going to be taken up by the commission and would be permitted to make a presentation and will be obligated to provide extensive documentation of its operations, budgets, and salaries and benefits of its elected officials as well as its top administrative consulting personnel.  This of course then goes to the Florida Legislature and ultimately to the Governor’s desk. 

Mr. Fennell stated I told Senator Ring we are not in favor of this.  We will cooperate but we are not in favor of it.  They have some information on some districts they think have done the wrong things.  If that is the case to it over to the state but a general hunt among all people becomes a witch hunt.  If he knows specific cases of wrongdoing turn those people in.  Frankly, I think there are much bigger fish to get at the state level. 

Mr. Hanks stated I would like to include in the letter to Senator Ring the provision for excluding anybody with any sort of contact or experience with the districts; if you are going to review special districts you have experience with special districts and how they should be run. 

           

C.                 Engineer

There being nothing further, the next item followed. 

 

 

TENTH ORDER OF BUSINESS                       Supervisor Requests and Audience Comments

            There not being any, the next item followed. 

 

 

ELEVENTH ORDER OF BUSINESS               Approval of November Financials and Check Registers

           

On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor the November check register was approved. 

 

 

TWELFTH ORDER OF BUSINESS                 Adjournment

            There being no further business,

 

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the meeting was adjourned.

 

 

 

 

                                                                                                                                                      

Glen Hanks                                                               Robert Fennell

Secretary                                                                   President


MEETING NOTES:

 

JANUARY AGENDA

SBA Funds investment options

Change Order Processes

Discussion of Engineering Services

Discussion of Management Services