MINUTES OF MEETING

CORAL SPRINGS IMPROVEMENT DISTRICT

A regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, August 17, 2009 at 3:05 p.m. at the District Office, 10300 NW 11^th Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Robert Fennell President

Sharon Zich Vice President

Glenn Hanks Secretary

Also present were:

Kenneth Cassel District Manager

Dennis Lyles District Counsel

Jane Early District Engineer

Sean Skehan CH2M Hill

Gerrit Bulman CH2M Hill

Dan Daly Director of Operations

Doug Hyche Utilities Director

Kay Woodward District Accountant

Jan Zilmer Human Resources Manager

Joe Brown Lazlo /Intrastate

John Piscitelli Intrastate Construction

Knickeita Vassell-Bullock ICMA-RC

FIRST ORDER OF BUSINESS Roll Call

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

SECOND ORDER OF BUSINESS Approval of the Minutes of the July 20, 2009 Meeting

Mr. Fennell stated each Board member received a copy of the minutes of the July 20, 2009 meeting and requested any corrections, additions or deletions.

Ms. Zich stated I have one on page 24. I stated, “I thought the problem was the city” and it says “I though the problem was the city.” On page 24, we need to put ‘thought’.

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the minutes of the July 24, 2009 meeting were approved as amended.

THIRD ORDER OF BUSINESS Supervisors’ Requests and Audience Comments

Mr. Fennell asked are there any Supervisor requests?

Ms. Zich responded not yet.

Mr. Fennell asked other than those who are in the agenda, are there any audience comments?

There not being any, the next item followed.

FOURTH ORDER OF BUSINESS Public Hearing to Consider the Adoption of the Water and Sewer Budget for Fiscal Year 2010, Resolution 2009-9

Mr. Fennell stated I would like to open this for public comments on the budget. Are there any comments from anyone on the water and sewer budget?

There not being any,

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the public hearing was closed.

Mr. Fennell asked does the Board have any comments? I think it is pretty much like we saw before. Is that correct?

Mr. Daly responded with a few changes you asked for; bumping up a few items.

Mr. Fennell stated okay.

Mr. Hanks asked just to clarify, have you taken a look through our revenues and are our revenue projections based on a reduced amount of water consumption, but with the rate increases which are in place?

Mr. Daly responded that is correct.

Mr. Cassel stated yes.

Mr. Fennell stated it looks better than it should because we paid off part of the bond this year rather than next year. Where it shows a projected surplus of about $1,235,000; that is because we spent approximately that much, or less than that, this year paying off the bonds early. Because of that we saved $100,000. Is there anything else we need to look at or are there additional comments?

Mr. Hanks responded nothing as it relates to the budget. I do have a question for Mr. Daly with regard to the merchant fees we are getting charged and whether it makes sense for us to continue with the credit cards since we are getting charged approximately $22,000 a year in merchant fees.

Mr. Daly stated I will be happy to address that later.

Mr. Hanks stated okay.

Mr. Fennell asked are there any other comments? Then I will entertain a motion to adopt Resolution 2009-9.

On MOTION by Ms. Zich seconded by Mr. Hanks with all in favor Resolution 2009-9, adopting the water and sewer budget for fiscal year 2010, was adopted.

Mr. Daly stated Mr. Hanks, I think it was in April of 2004 when I presented myself in front of this Board. Mr. Hans was the manager, at which time we did not have credit cards. One of the things I have always been proponent of is if you are going to spend money, you need to make it someplace else. On average we are between $4,000 and $5,000 per month in delinquencies. At the time you folks granted going forward with the credit cards, I said we will fund it with delinquent fees if I could please put that in our policies, which we did. When you figure, what we have so far for revenue in the delinquent fees, it more than takes care of…

Mr. Hanks stated it is also a convenience we are providing to the customers of this utility.

Mr. Daly stated you would be surprised at how many people pay us as a regular cause of habit, such as myself. It is the way of the world right now. Everyone pays with credit cards.

Mr. Hanks asked are the merchant fees automatic withdrawals?

Mr. Daly responded there are some of those also, but I am not sure how that is categorized or if it is included in there or not. Is that all merchant fees?

Ms. Woodward responded yes.

Mr. Daly stated yes, so it would be.

Ms. Zich asked how many customers pay by credit card? Do most people pay through their credit and their checking account?

Mr. Daly responded when I originally set this up there were two thresholds. One is unlimited. You figure we only have 10,000 customers, I am not going to go with unlimited because they are not going to use it, because that was like $600 off the bat every year, or it cost $2.99 for 500 a month. It was working out great. We were always somewhere approaching 500 a month. Now we are at about $800 a month. It has a lot to do with the economy and a lot with how aggressive we are with delinquent turn offs. It is only $.10 or $.15 per item afterward so it is not a bad deal. The bill per District is about $65 that we pay for credit card fees. It is not so bad. $65 is going to be more than $600 a year. I would have to take another look into the program, but for the most part it is paid for. It is because of credit cards being used so often that you really have to offer it these days.

FIFTH ORDER OF BUSINESS Staff Reports

C. Engineer

· Consideration of Work Authorization No. 54(9-15-09) – Pre-Disaster Mitigation Grant Application in the Amount of $24,000

Mr. Fennell asked what is this about and what do we get for it?

Mr. Skehan responded it is for four or five applications for grants for mitigation efforts, which is out there for some of these piping and culvert projects we talked about at various times at other Board meetings. When the opportunity came up we submitted this back in May and one of the initial applications to one of the FEMA organizations was accepted. These projects were listed for potential funding. Each of these grant applications we have listed in this authorization. The grant application has to be completed by September 4, 2009. Right now it is broken down to five applications. They cost about $4,500 each to be able to get them done and make sure they are going to meet the standards. Each of the applications are 34 or 35 pages long and we have to make sure everything is laid out properly.

Mr. Hanks asked are these grants you are pursuing action funds?

Mr. Cassel responded they are 75/25; 25 for CSID and 75 for the funding source.

Mr. Skehan stated there is a great opportunity for funding for projects you have given consideration to in the past.

Mr. Hanks asked if you had to throw a probability or likelihood at what our chances are of getting some of the funding, what do you think we are looking at?

Mr. Skehan responded from what I have seen, I have been directly tied into a couple of FEMA applications in the past and I am familiar with several others, each of the grant applications put in for mitigation were funded. They just took a long time to get there. We took about a year to get there, as far as the final funding and getting all of the questions answered. It is really a laborious process if you go through four of these grant applications, but one of the grant applications I got before was for mitigation at two different locations. One of them was for $1 Million and one of them was for approximately $250,000. That was funded on the same basis; 75%, 25%. So if you landed one of these projects, and one of these projects was $1 Million, and each one of them had the potential to be at least that, you have money in the bank right across the Board.

Mr. Fennell stated if you got them all, it would be like $6 Million to $6.5 Million.

Mr. Skehan stated that is right.

Mr. Fennell stated we have been running these projects anyway and we have been trying to save up some money. We did not want to do any bond issues. This may be the way we can actually get it.

Mr. Cassel stated the other item is; even though you may qualify for the grant, I believe there is still an out if you do not want to do it. In other words; if we get grant funded for something, say we decided not to do the tree removal and wait until a storm event, we could always decline that, but if we did not put in for it, you would never know if you got it. As the grants come out, when you figure out what you qualify for, we can prioritize which grants we are going to potentially proceed with and which grants we want to place on the backburner or discount.

Mr. Fennell stated the FEMA one would be a good one because I suspect if we actually have done some work ahead of time, if we had a grant like this in, we would be actually be able to get our money a lot quicker than we did the last time.

Mr. Skehan stated you would be way ahead at that point.

Mr. Fennell stated because we actually look like we have done some pre-thought.

Mr. Skehan stated mitigation ultimately is performed in advanced. You get the funding and then you go about executing the work. That is the whole purpose of mitigation; looking at those opportunities where it is going to prevent a potentially larger problem.

Mr. Cassel stated we are going to have to pay attention to the timing of the grants and our funding in our reserves and what we have set aside. If they all came in at the same time, it is going to squeeze us to the point where we are going to be really tight or not be able to do all of them. We may have to come in and prioritize which ones are the biggest bang for the buck and will have the most impact on the District.

Mr. Daly asked my question would be is there a start date? Do they do the 12 months before you can start after you have been granted it? That would be great.

Mr. Cassel responded we could stagger them.

Mr. Fennell stated we did not raise our rates this year, but we kept them high because we knew there was some work we really wanted to do. If we can actually get this, we can actually end up doing the work without having to go for bond issues.

Mr. Hanks stated I have some concerns about the pursuit of the tree removal program. Where do we stand? We had a lot stuff come down after Hurricane Wilma. Have homeowners been putting things up within the right-of-ways?

Mr. Daly responded not to my knowledge.

Mr. Hanks stated I know we have that issue over by the Coral Springs Auto Mall. Has that been addressed?

Ms. Zich responded no.

Mr. Daly stated they have been trimmed back and I think it is to the satisfaction of the city.

Ms. Zich asked they have been trimmed back?

Mr. Daly responded yes they have. Mr. Frederick is never going to be happy until they are removed.

Ms. Zich stated I happen to live across the street from them.

Mr. Daly stated he told us they had been trimmed back and the city was somewhat satisfied, which is fine.

Mr. Hanks asked do we really have an issue with trees on the canal banks?

Mr. Daly responded we have more than one issue. If there are trees there, we obviously have an issue. If we plan on taking them away, we have even more of an issue if you recall what happened after Hurricane Wilma with Mr. Petty.

Mr. Fennell asked you know the far west canal right along the expressway?

Mr. Hanks asked behind Eagle Trace near the expressway?

Mr. Fennell responded yes.

Mr. Hanks stated okay.

Mr. Fennell stated I think we still have some issues along there. Anyway, it sounds like you need $24,500 from us to potentially get $4 Million or $5 Million.

Mr. Hanks stated a maximum of $24,500 based on your availability to meet the schedule.

Mr. Skehan stated we will be meeting the schedule. It is critical for the schedule to be met in order for the grant application to be accepted. If we are not meeting the schedule, then…

Mr. Hanks stated then do not count on a dime if you do not meet the schedule and get the application in.

Mr. Cassel stated trust me I will not pay them if they do not get the application in. Mr. Skehan has been there before.

Mr. Hanks stated just being clear.

Mr. Skehan stated that is fine.

Mr. Fennell stated moving on, I would like to entertain a motion.

Ms. Zich asked Mr. Skehan, what are our chances? Is there a 75% or 80% chance?

Mr. Skehan responded it is very difficult. I would be amiss in going way out on a limb to give you a percentage, but based on what I have seen in the past the chances are very good.

On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor Work Authorization No. 54(9-15-09) for pre-disaster mitigation grant application in the amount of $24,500 was approved.

· Project Status Report

Mr. Fennell stated they are actually doing something out there. Right? I saw somebody removing sod out there.

Mr. Skehan stated that is correct.

Ms. Zich stated I saw some dirt moving other than the shovels we picked up.

Mr. Skehan stated per your previous request at the last meeting you have Mr. Brown and Mr. Piscitelli.

Mr. Fennell stated okay. Since you gentlemen are here, why do you not tell us what is going on?

Mr. Brown stated I represent Lazlo Construction down here and Intrastate Construction. We broke ground now on the water treatment side. That is why you were seeing the dirt move. We have the permit now. It was picked up here this afternoon so we can move forward. We have already built around, obviously, on the wastewater portion.

Mr. Piscitelli stated at our last progress meeting we had with CH2M Hill and everyone we talked about, this is referring to the waste water plant on the back side, a three week look ahead. We did every item on that look ahead so far. We pretty much hit every milestone on the three week look ahead. Things are “going to town” so to speak on the waste water side. Things are moving along greatly. Some contractors are on site rebar replacement. All the imbedded items for the tank itself, or the fabrication of the steel tank, are on site. We have our scheduled pourer, which is the slab. We are looking for a one shot deal; beginning of the day it is not here, the end of the day it is here. It is scheduled for August 31, 2009. So far it is looking very good.

Mr. Fennell stated you will have a bunch of trucks coming in here.

Mr. Piscitelli stated a bunch of trucks coming in.

Mr. Fennell stated we need to tell the neighborhood.

Mr. Cassel stated this department has been working on coordinating with the city.

Mr. Hanks asked how is this going to coordinate with school? That is going to be a big issue.

Mr. Piscitelli responded it is going to be a huge issue. On those lines, there is a city ordinance for work hours. There is another contractor outside of Layne, which is working 24/7 to get the wells done, as you are aware of. What we are looking for with the city is to work with them on days of concrete placement where we have hours where we can work starting at 10:00 p.m., which gets us out of the school time. If we start at 10:00 p.m. on a night pour, we can get all of our traffic in, concrete trucks in and out. When school starts, they are out of the way.

Mr. Brown stated our target date is starting at 10:00 p.m. on Sunday, August 30, 2009, rolling right into the morning of August 31, 2009, being done around 6:00 a.m. before school.

Mr. Hanks stated my concern is not so much the morning. It is the afternoon.

The record will reflect the recording picked up several people talking at the same time.

Mr. Piscitelli stated safety, ease of operation; there are so many things to look at. That is what we are going for with the city. We do not anticipate any problem. We do not have the blessing yet, but we do not anticipate a problem on that one. Moving past the pour, we have the slab in place, now we go right into the tankage manufacturing. All the plates are on site, all the raw materials for the tank itself are here, the welders are in place and everything is ready to go. It is going to move swiftly on the waste water side. The water side, as we all know, we got the permit today.

Mr. Hanks asked which permit? The permit with the city?

Mr. Cassel responded the city. The rest of them we already have. We are ready to go.

Mr. Fennell stated thank you to the City of Coral Springs.

Mr. Skehan stated the city worked very close with us over the last two to three weeks and right from the end of July to where we are right now. I know Mr. Cassel called, I know I spoke with them and Mr. Johnson was talking with them on a regular basis. Mr. Brown and Mr. Piscitelli were there. I think we blanketed them pretty heavily and we cleared up any questions they had.

Mr. Fennell stated the deal is, this kind of reminds me of last time, we borrowed the money two years ago. We are paying interest on it so we really want to get our assets on the ground. We do not make money with money sitting around anymore. Time is of the essence here and I am sure from a contractor’s standpoint, you guys must be hungry. Is there a real issue with permits with you guys mobilizing?

Mr. Browne responded we are totally mobilized.

Mr. Fennell asked do you have any manpower issues?

Mr. Browne responded no, no manpower issue at all. It was mainly that we did not have permits for the other side. We concentrated on the one milestone of getting the plant up and running. That is where we focused all of our concerns. That is actually on the way. We will move right over to the water side and we will push that now. You will see both of them move in time.

Mr. Piscitelli stated we have resources on both sides.

Mr. Fennell asked what can we do to make your job go better?

Mr. Browne responded pay us faster.

Ms. Zich stated get more work done and we will pay you faster.

Mr. Piscitelli stated no actually it is fine. It has been good.

The record will reflect the recording picked up several people talking at the same time.

Mr. Piscitelli stated this started back in January; working with the city. It was a major hurdle.

Ms. Zich stated we did our first shovel full of dirt in April thinking we were going to be starting soon.

Mr. Piscitelli stated so did we.

Ms. Zich stated we just want to make sure it gets going.

Mr. Piscitelli stated exactly. We do not like waiting anymore than you do. The permit is what slowed us up.

Mr. Fennell stated thank you very much for coming in today. We appreciate it. We would like to have you back again two months from now.

Mr. Piscitelli stated sure.

Mr. Fennell stated come in and tell us again…

Mr. Piscitelli stated the progress.

Mr. Fennell stated come in with photographs of what you are doing and the progress. Is that alright? We will get you right to the front of the agenda. We will get you in and out.

Ms. Zich stated this is very important.

Mr. Fennell stated we are setting our tone for our part of the town for the next 30 years. We just mortgaged ourselves for $50 Million, basically, and with interest on that it is $84 Million. It is important to us that the money be well spent and our citizens be set for the next 30 years.

Mr. Piscitelli stated we have no problem.

Mr. Fennell stated so let us do that. I think two months will be fine.

Ms. Zich stated see you in October.

Mr. Fennell stated thank you very much for coming.

Ms. Zich stated thank you.

Mr. Fennell asked is there anything more from engineering?

Mr. Bulman responded I would like to make a quick comment from an engineering standpoint working on the monitor wells. The process and time for CSID on applications for payment to contractors when they have been reviewed and approved by the engineer is certainly quick. I am amazed at how quickly they are approved and payment is made to the contractor.

Mr. Fennell stated well we have an excellent accounting department here. Are there any other comments?

Mr. Skehan responded just a general update.

Mr. Bulman stated the monitoring well is going well. Last month we applied for and were approved for an alternate testing method due to the larger borehole band of the pilot hole in the monitoring well. That alternative method was approved. We tested and received the water quality results. We wrote a monitoring zone selection request to DEP, which asks for the actual zones we are going to be monitoring; basically, the way the final well will be constructed. That was approved in a matter of three days by the state; another record for turn around time.

Mr. Fennell asked were the results good?

Mr. Bulman responded the results were good. The zone, I will not get into it technically, but it was deeper than we anticipated. With as many wells as we have on site the interface between the underground source of drinking water and that which is below it is actually a couple 100 feet deeper.

{At the September 21, 2009 meeting it was clarified that the USDW, underground source of drinking water, is a defined interval within the Floridan Aquifer throughout the state. It is not particular to this site. It is governed by water quality that has a total dissolved solids concentration of less than 10,000 milligrams. It does not have anything to do with the District’s drinking water.}

Mr. Fennell stated you got a new view of the different layers as you go down is what you are saying.

Mr. Bulman stated yes.

Mr. Skehan stated we got a more accurate view of what was there than what had been done years ago. What has really taken place in the last 10 or 15 years is the regulatory environment has become much more rigorous in their request for data relative to, as Mr. Bulman mentioned the 10,000 TDS interface. That is a rather arbitrary line or point in the subsurface where it is above 10,000 or below 10,000. If it is above 10,000, it is considered a potential drinking water source. If it is below 10,000, I’m sorry, it is the other way. If it is less than 10,000, it is a drinking water source and if it is above it, it is not.

In the past DEP did not look for a great deal of information when these wells were being constructed. Now they are looking to fill their files with as much information and data as they can get. Of course, this transpires into this testing Mr. Bulman mentioned which is much more rigorous than what it used to be. We go through a great deal. The testing will go on 24 hours a day for a couple of days at a time. Being available to look at the information is not easy.

Mr. Hanks stated so this monitoring well measures or obtains samples from the various levels in the aquifer. Is that what you are saying? You get one from the upper Biscayne, one from the lower Biscayne and then…

Mr. Bulman responded actually; neither one is from the Biscayne. They are all from the Floridan Aquifer. The Biscayne is separated from the Floridan aquifer by Hawthorn Formation, which is the confining unit that separates the water quality from those aquifers entirely. The Floridan Aquifer is under artesian pressure because it is confined. Technically, when you drill into it, that water level wants to be 30 feet above land surface. You can actually have water blowing up through the well and through the drill pipe. The construction is actually a challenge for that reason. We were working under those pressures. The fact we are monitoring one is to have early warning if you did have a leak in your injection system or in the formation so that effluent is not being exposed and the injection will start to migrate up through the lower Floridian and then you would see it first below its own and the upper zone’s position immediately above or in the base of the USVW.

Mr. Skehan stated the whole concept from DEP’s standpoint is such that the treated effluent going down the injection well is not supposed to migrate vertically up so it would have some potential influence on a drinking water source.

Mr. Fennell asked if everything is under lots of pressure, would anything that goes down naturally migrate up anyway, unless there is some kind of a steel layer? It seems like the natural case could be that things would migrate up.

Mr. Bulman responded preferentially, it would go towards your higher permeability zone so you inject into a zone which is extremely porous and permeable. Water is going to choose the path of least resistance and will go toward lower pressure water as opposed to a higher pressure. It would go outward laterally in that storage rather than go vertically upward. You have 100s of feet of defining intervals.

Mr. Skehan stated that is the general concept; to isolate the effluent from potential drinking water. The monitoring well serves as an early indicator to see if it is or is not affecting those drinking water sources.

Mr. Fennell stated thank you very much. I guess the good news is the projects are now well under way. The City of Coral Springs has really come through and helped us out a lot. Thank you to the City of Coral Springs again. We will be looking forward to continual help.

A. Manager

· Discussion of Changing from Money Purchase Pension Plan to ICMA-RC 401A

Mr. Cassel stated as I put forth in my cover memorandum to you, over the last 12 months I have been working with Mr. Zilmer and Mr. Daly. We have been looking at different ways to make sure the pension plan meets some of the criteria you were all looking for about employees being able to contribute as well. Also, the ability for CSID to reduce its potential fiduciary responsibility to the plan, make it even, make it portable, a number of things. We looked at a number of different ways to look at it and have come up with the fact that in our opinion ICMA-RC meets the criteria we are looking for and we are also able to, with all four districts, set them up as all within ICMA-RC leaving each one as a stand alone within the group so we have no connection to NSID’s pension funds, or SWCD’s, or PTWCD’s, so that each one stands alone on its own within the ICMA-RC pension system. Ms. Bullock is here from ICMA-RC. She is out of the local office in Coral Gables. She would be our account manager. They also have the ability to come here, help train all the employees and give them all kind of information. I have included some of the information in the packet and I believe Ms. Bullock may have some other things with her as well. I will turn it over to Ms. Bullock at this time.

Ms. Bullock stated I am your local representative. I am also a local representative for the City of Coral Springs as well as Coconut Creek and many others in this area. We are very experienced. We were created in 1972 with a grant from the Ford Foundation to provide services exclusively for the benefit of public sector employees for their retirement plan. Our entire focus has been on providing these services. We specialize and focus exclusively on this so we are able to provide a lot of services that other programs and companies are not able to provide. We are providers, currently, for a 457 plan as well as a 401A plan for the City of Coral Springs. I am also the administrator at Broward County, the City of Fort Lauderdale and Tamarac. Those are just a few of the ones I currently service. We are prepared to provide the same level of service for CSID. I have personally been involved in the transition of such program takeovers from other vendors as well.

Mr. Fennell asked is ICMA-RC a non-profit organization?

Ms. Bullock responded yes. We are a not for profit organization.

Mr. Fennell asked are you a bank or advisor? What exactly is your function? Where is the employee’s money?

Ms. Bullock responded it is held in a trust fund for their protection, as well as from our own, insolvency. We are a mutual fund company; we are an investment advisory firm, in addition to this. Your money is actually held separately and in trust apart from ICMA-RC. We created that as protocol.

Mr. Fennell asked Vantagepoint Funds?

Ms. Bullock responded Vantagepoint Funds are proprietary funds we utilize. It is one of the investment options available. We currently use outside managers from brokerage firms such as Fidelity or Brown Capital Management. There are a few listed in the package you have. The Vantagepoint Funds are managed through sub-advisors. We are a manager who manages the fund to fund management for the proprietary funds. We do offer a comprehensive list of funds in addition to the Vantagepoint Funds from outside firms and not just Vantagepoint Funds. Although it is one available option, it is not the only option.

Mr. Fennell asked so where is the money actually held?

Ms. Bullock responded it is actually held in a trust.

Mr. Fennell asked is it a bank? Is it Vanguard?

Mr. Bullock responded with a different firm.

Mr. Fennell asked so you would buy 50,000 shares in SPX?

Ms. Bullock responded well we can pick a fund. The structure of the investment is in a mutual fund. So the way a mutual fund works is just like with the stock market. You have shares in a given company and so the money is invested in these shares. The mutual fund may have anywhere from 100 to 500 different holdings as underlying companies have invested in. The fund manager will then go ahead and purchase shares of whatever the company is. If it is, for example, S&P 500 or the 500 sub-index fund, you are going to purchase shares of the 500 companies which are listed on the S&P 500, which would be the 500 largest publicly traded companies in the US. They purchase those relative to the same shared consideration as the S&P 500 index itself to make sure we actually have a ration which is consistent with that. The objective of the fund is to duplicate or to track the performance of the 500 index fund.

Mr. Fennell asked so are you saying it is a fund to fund?

Ms. Bullock responded it is a fund to fund.

Mr. Fennell stated so you have a fund which buys other funds. If I am looking at the bond fund…

Ms. Zich asked how have things been doing?

Ms. Bullock responded I have to say that assessment is not entirely it. When I said it is a fund to fund, we manage fund managers which manage underlying mutual funds. The way any mutual fund would work is that mutual fund would buy individual holdings in a company. We oversee the fund managers which make the buy and sell decisions to invest in a company or not.

Mr. Fennell stated so somebody going to decide to buy 10,000 shares of something. It looks like this is mostly funds here, not individual stocks.

Ms. Bullock stated we actually buy the fund. I am sorry, we are not buying the funds. We are the actual funds manager. We actually manage the investments which purchase the individual stocks in the companies. The manager decides whether or not to purchase public or to purchase…

Mr. Fennell asked so do you have your own mutual fund? Somebody has their own mutual fund.

Ms. Bullock responded yes. That is correct.

Mr. Fennell stated so you are not buying Vanguard’s funds.

Ms. Bullock stated that is correct. Vantagepoint Funds is actually a mutual funds company.

Mr. Fennell stated okay.

Ms. Bullock stated this is a sample of our standard enrollment kit for the 457 plan. In the right pocket there is a sheet, which will provide you with a list. This is a sample fund sheet. This is a list of the investment options for the standard plan. This is available for the 401A and 457 plans. If you look, for example, where it says US Stock Bond, it says Vantage Trust American Century Fund. In this case of the VT Fund, that is a mutual fund which is buying shares with another mutual fund. The trust is actually invested in these mutual funds which are purchase insured. In the case of the Vantagepoint Funds, the trust is purchase insured in the Vantagepoint Fund itself. Vantagepoint is actually a mutual fund company as well. The first page lists all the funds which are available.

Mr. Fennell asked can I as an employee allocate my own percentage in one of these?

Ms. Bullock responded that is correct.

Mr. Fennell stated you have several different model funds, which are then applied to something.

Ms. Bullock stated absolutely. The employee then directs their own investment strategy. They are able to go online and make decisions on whether they want to be or do not want to be in one of these funds. It is a self directed fund. It completely eliminates the liability, if you will, of CSID for investment choices.

Ms. Zich asked what if an employee does not want to be in stocks and bonds and just wants to be solid?

Ms. Bullock responded we have a few investment options for that. In addition to what is listed here is a safer value fund; the Plus Fund and the Cashland, which would be the equivalent of a money market fund. We also offer CDs through Bank of America. If an employer wanted to allow investments in CDs, it is an available option which has to be done as a positive election by the employer. In addition to this, if the participant does not feel they are able to make a decision by themselves or if they do not want to direct their own investments, we actually offer what is called Guided Pathways. An employer may choose to offer this to their employees where the employee can have a professional manager manage their account and they can make decisions within the vehicle. There is an additional fee to the employee who decides to elect that program

Mr. Fennell asked how often can they trade funds?

Ms. Bullock responded employees are able to redirect their allocations for any money coming into the plan on a daily basis or bi-weekly basis, depending on your schedule.

Mr. Fennell stated that is for the money coming in. What if they decided they wanted to sell?

Ms. Bullock responded as far as existent funds, you can always get out of a fund at any time. We do not restrict you as to what you can get out of a fund. The problem comes in when an employee decides to trade within their account. To discourage market timing there is redemption being imposed against certain funds. Those are the funds where the employee would suffer the most from short term holders who try to market time. That redemption period can be anywhere from seven days to as long as six months.

Mr. Fennell stated so it varies on the fund.

Ms. Bullock stated it depends on the fund. You mentioned something about frequent trading. As far as that goes a participant may elect to get into a fund at any time, but if they choose to get out and make a round trip, I believe we define market timing and frequent trades as two or more round trips within a 90 day period. At that point we issue a letter to the participant discouraging them to do this. If they decide they want to continue doing that, we eventually hinge their ability to trade within that particular fund. It is done on a fund by fund basis and it would be just for that participant.

Mr. Fennell asked suppose I retire, I am 62 years old, I have this thing here and I am not ready to take out all of my funds yet; do you have additional services above and beyond that? Do you have checking or that kind of things which are adjacent to these accounts?

Ms. Bullock responded we do not really offer checking accounts or check writing privileges to the 401A or 457 accounts. The participants are limited to having distributions done either via direct deposit into their checking or savings account, or by having a check mailed to them every month, every quarter or every year depending on their decision. It is a completely flexible plan. It is designed at distribution for the employee based on their own selection as well. The employee is able to direct their distribution option.

Mr. Fennell stated okay so I am in this fund. I can either take on one of your allocation things or I can decide to do it myself. Right?

Ms. Bullock responded that is correct.

Mr. Fennell stated these are the choices I have if I decide to do it myself.

Ms. Bullock stated that is correct. Because these funds are within an institutional plan and they have been negotiated directly with the mutual fund company, you are not going to have redemption fees on the funds with the exception of the ones I mentioned to you. You are able to exit the fund as well. You mentioned something else as well. You mentioned the Milestone Funds, the 2015. The way these funds work is they are kind of a unique approach to investments. We created these a few years ago because we have a lot of participants who sign up on day one and do not visit us again for another 20 or 30 years at the end of their career. These funds are target funds.

In general we have four different strategies someone can use to select their own investment. The first part is to create your own portfolio. The second one would be the model portfolios. Participants can choose from the Savings Oriented Fund, which is the most conservative. Then you go to the Milestone Funds, which are the target funds based strictly on timed horizon. Both of these provide the solution of providing diversification.

The Milestone Fund is a little more customized because it is based on a specific target or retirement age. In addition to this we have the Guided Pathway, which I alluded to earlier. This particular strategy allows participants to use a customized folder where they are able to tell us when they are retiring and what their specific objectives are. That strategy has an additional fee; however, it is also an additional value added for the participant. We go ahead and select from what is called the “best of the best fund”. In addition to everything they have from Vantagepoint they also have a selection from the other funds we have available. We use a CPA called Edison. They are a Morningstar company. They do the portfolio and management for that particular participant. This type of system will completely eliminate the current liability you have because you are making the investment decisions for the participant.

Mr. Fennell asked is there a cost?

Ms. Bullock asked is there a cost for what?

Mr. Fennell asked is there a service cost per account that you have to pay every year?

Ms. Bullock responded yes. It is .55% or 55 basis points.

Ms. Zich stated so half a percent.

Ms. Bullock stated a little over half a percent. I am not sure of the fee you are currently paying with your other provider.

Ms. Zich asked is that of all the assets?

Ms. Bullock responded yes.

Mr. Hanks asked is it the District who will be paying that?

Ms. Bullock responded no. That is per participant. Who is the other provider you currently have?

Mr. Zilmer responded Royal Alliance.

Ms. Bullock stated their expenses start at over 1%. The typical administration fee for another provider is usually over a full percent. For insurance companies, in general, you are looking at more than 1.5% usually, per participant.

Mr. Daly stated earlier when you talked about Vantagepoint; there is typically a fee when you go into a mutual fund. Is that correct?

Ms. Bullock responded yes. You have underlying mutual fund expenses.

Mr. Daly stated so your mutual fund is buying those mutual funds; actually if you are in a mutual fund, you are probably buying three other mutual funds. Where do the expenses get carried over to the participant at that level? How many times are we paying a commission fee?

Ms. Bullock responded you are not paying a commission fee to ICMA-RC because our model is a little different. Because of the fact we are a not for profit agency they actually do not get paid commission. You are not paying commission to me or to the company to manage your account. I will address the different tiers of fees. In general you have underlying mutual fund expenses. This is what Vanguard would charge or Fidelity. In addition to this you may have an annual fee of a certain dollar amount of $18 or $50 depending on the company. Then you may have an additional fee such as the administrator fee, which would be maybe another 1% to 2% higher. This is all on the participant level. On the level of the District there is a fee we charge, which is $500 per year, to the District to offer these services to the District; however, depending on the balance of the funds you have we waive the fees at times. I am not sure if that will be the case here or not. If you were with a private broker, they would charge you additionally for commission. The commission may come from the third party administrator’s fee in addition to other expenses you have. This is anywhere from 2% to 3% per year. If it is an annuity, it may be up to 8% per year for the first five to seven years. Because ICMA-RC is unique in what we do and how we do it, we are able to charge you only .55%.

Mr. Hanks asked if you were to bookend the fee that one of our employees would be paying if we were to sign up with ICMA-RC, what would be the minimal percentage and what would be the maximum percentage? What is the range?

Ms. Bullock responded it depends on the fund. If you look on page four, this will address the typical distribution charges. ICMA-RC does not charge any. Most of your other providers will charge distribution fees. The fees you typically see with your resale investor, we do not have any of those. There is no exchange fee between funds. You also have plan fees. This is, on a participant level, $36 per year depending on the amount of access of management. Then you look at a mutual fund where it says management preparation fees is .55%. Plus fund management fee would be an example of the very first fund on that fund sheet, which is .45% and the annual operating expenses of .01% and then the standard third party service fee of .15%.

Mr. Hanks asked what is third party mutual fund service fee?

Ms. Bullock responded that would be the underlying fund manager who may manage a portion of the fund. This would be an additional fee the third party administrator would charge for managing a part of the mutual fund. This is an example of the typical investor’s fee in a trust fund.

Mr. Hanks stated that would be around 1.16% if you add it up.

Ms. Bullock stated that is correct. That would be for the trust fund. You would see the .15% on that. You would not have the third party charge in it. If you turn the other page to page six, I want to pick a fund which would have an equity fund. If you go across to where it says other mutual funds…

Mr. Hanks stated let us go to Calvert because that is actually easier to read there.

Ms. Bullock asked social investments?

Mr. Hanks responded yes.

Ms. Bullock stated .7% would be the advisory fee plus .51% for total of 1.21%. That would be the final expense of that purchase order fund.

Mr. Hanks stated and I suppose year in and year out, regardless of the performance of the fund.

Ms. Bullock stated that is correct.

Mr. Hanks stated of course that is industry practice.

Ms. Bullock stated yes. I want to mention that these fees are negotiated and you are actually paying less for the administration of the same exact fund through this program than if you went to a Calvert or if you went to a fidelity.

Mr. Hanks stated so we are getting wholesale as opposed to retail.

Ms. Bullock stated that is correct.

Mr. Hanks asked if someone switches employers, do they have the ability to keep funds with you if they have a certain amount or are they required to move things around? Let us say, Mr. Hyche goes to NSID and NSID is not participating in this.

Mr. Cassel responded I still have 457 funds with ICMA-RC from 10 years ago.

Mr. Lyles stated but you cannot add to them.

Mr. Cassel stated because it was owned by someone else.

Ms. Bullock stated because of the payroll deducted and sponsored pretax contribution you would not be able to make your own contribution. Remember any money you have in your checking and savings account has already been tapped. That is after tax money. Money which enters into these plans are usually not on a pretax basis and for that reason you are not allowed to make any contributions, outside on your own. It must be through employer payroll deduction. One of the points you raised was on portability. That is why allow a participant to have the ability to move the money if they did not want to be with us. If they wanted to move it to another provider, they can certainly do that once they leave CSID. If they wanted to retain their assets while they are somewhere else, they could certainly do that just as Mr. Cassel has done.

Mr. Hanks asked let us say Mr. Frederick does not want to participate in this thing, does he have the opportunity to go with a different plan or is he required to participate in this as an employee of the District? Is it this or nothing?

Mr. Cassel responded it is more of a policy decision. If we move all of our employees to this plan, it is a policy of the Board to move to this plan.

Ms. Bullock stated for 401A plans, you typically do not have two providers for a 401A plan. If, for example, Mr. Hyche decided he does not want to participate, the employer can decide he does not have to participate, but if he does want to participate in a 401 plan, this is the one available. He would have a choice of whether to participate or not to participate.

Mr. Hanks stated he could not go to Smith Barney or whoever.

Ms. Zich stated maybe if he did it on his own.

Ms. Bullock stated the 401 plan has additional protection from the trust. An example of that would be OJ Simpson. He had a major lawsuit filed against him. The Goldmans won the civil suit, yet he still receives $37,000 from the NFL pension plan because of the trust which protects that pension plan.

Mr. Fennell asked why are you better than Vanguard?

Ms. Bullock responded because we are the non-profit option that provides public sector retirement plans to build retirement security for public sector employees. Vanguard is not that. Because of the District and the unique position you are in, in the public sector, and because of the fact we have a focus on the public sector, I know we would definitely be the better option over Vanguard. This is our expertise and we have the capabilities to provide services to you more effectively than Vanguard. In addition to this you have onsite representation through your local representative; myself as well as another person who is in Coral Gables. We would be your local service team and Vanguard does not offer that for a plan this size.

Mr. Hanks stated so you are providing the contact to go ahead and make these different investments.

Ms. Bullock stated that is correct.

Mr. Hanks stated that is really what your specialty is. Your specialty is not so much in managing which investments to get into, but in providing what services are available based on the individual managers.

Ms. Bullock stated I am an investment advisor representative. As a retirement corporation we are capable of doing that as well because we are also a fund manager as well as an investment firm. We are able to provide this service and we do it through the Vantagepoint fund.

Mr. Hanks asked is there a surrender charge with this?

Ms. Bullock responded no. The participant has complete portability. We were created in 1972 by the International City Managers’ Association and so we still bear their name through the grant I mentioned. They wanted a plan which was portable and flexible for the city managers whose terms were limited by political issues if you will. They created ICMA-RC to serve this unique need and, through their creation, our focus has been to exclusively provide services for the public sector. In addition to this, to maintain our not for profit status we are required to be mission focused as well.

Mr. Hanks asked Mr. Zilmer, what other programs have you looked at or considered?

Mr. Zilmer responded we have looked, once before, at the Florida Retirement System. It is a plan that if you are locked into, you cannot get out of it. It will cost you a fortune. This seems to be a good plan. One of the things I really like about it is so many of the other municipalities around here are in it so it is portable if an employee comes from another municipality.

Mr. Hanks stated so many other municipalities were in the SBA.

Ms. Zich stated that is what is so scary about all of this. We thought SBA was so safe that we did not have to worry about a thing and look what happened.

Mr. Hanks asked how is this different from what we presently have?

Mr. Zilmer responded the employees have no investment choices in it so we remain very conservative in it because of the liability.

Mr. Hanks asked so you are looking for preservation of capital?

Mr. Zilmer responded yes. I think as far as salaries go we do really well here. We are excellent in benefits and healthcare. One of the main issues we hear from employees is about the pension plan and it is quite true.

Mr. Hanks stated we visit this issue about twice a year.

Mr. Zilmer stated I really believe if these employees have the opportunity to make their own investment choices….

Ms. Bullock stated I want to add something as well. From a liability standpoint, the Pension Protection Act of, I believe, 2007 addresses judiciary responsibility of any direct liability of planning the triggers for a direct participant or employee contribution and their investment option. It is a huge liability on the improvement District. I am sure you are aware of this.

Mr. Zilmer stated it is and this plan we have now, all the other districts are under the umbrella of it. I think we have a liability, not only for our own employees, but the employees of other districts.

Mr. Hanks asked will we be able to make this change unilaterally or since we have other districts’ employees participating under our umbrella, do we have to get any sort of approvals from the other districts before we proceed?

Mr. Zilmer responded no. If they decide they want to continue with the Money Purchase Pension Plan, then everything becomes their liability.

Mr. Hanks asked so NSID could take on their own Money Purchase Pension Plan?

Mr. Zilmer responded yes.

Mr. Hanks asked but we are not obligated?

Mr. Zilmer responded exactly.

Mr. Hanks stated we can say we are going to go this way and they can jump on in with us, but they do not have to.

Mr. Zilmer stated exactly. We can continue to calculate their pension and send in the check. We just will not have the liability.

Mr. Hanks asked how will this work for some of our employees who have been here for 20 years? If I were coming into this, I would think it works great for me. How is this going to work for someone who has 20 or 30 years of service?

The record will reflect the recording picked up several people talking at the same time.

Ms. Zich asked does everyone have to go into the new plan?

Mr. Zilmer responded they would have to.

Mr. Cassel stated whatever value you have associated with your account would move over.

Mr. Zilmer stated I think right now we have close to $1.3 Million, CSID, in the account allocated to maybe 50 employees.

Mr. Hanks stated Mr. Fennell, you were asking about where these funds reside and how these funds are kept. Where are they kept right now? Is there going to be a different means of protection?

Mr. Zilmer responded the employees will be making their investment choices.

Mr. Cassel stated I guess what he is asking; is with ICMA-RC it is held in a trust, who is holding it now? Is it in a trust or just with a broker?

Mr. Fennell asked who holds the trust because we worry about that?

Ms. Bullock responded that is definitely reasonable. It is probably held separately. You are not able to comingle retirement plans anymore. I think one of the biggest issues was in Orange County, California when that particular entity became bankrupt, then the employees had their accounts in jeopardy as well. That created the requirement, if you will, to have money held separately.

Mr. Fennell stated we got to a point where we are worried about the banks.

Ms. Bullock stated right and that is definitely reasonable. You also have SIPC, the Securities Investor Protection Corporation, which protects against insolvency.

Mr. Hanks asked Mr. Hyche and Mr. Frederick, what do you think about this? I am sorry; there is Ms. Woodward back there. You are our representative employees right now.

Mr. Hyche responded I would love to control my own destiny. It would be nice.

Mr. Fennell stated there is another defense here too. They cannot contribute any additional funds to it, right?

Mr. Zilmer responded they can.

Mr. Cassel stated no, today.

Mr. Zilmer stated now they cannot.

Mr. Fennell asked so it is only what we put in?

Mr. Zilmer responded that is correct.

The record will reflect the recording picked up several people talking at the same time.

Mr. Fennell stated explain to me the difference between a 401A and a 457.

Ms. Bullock stated a 401A allows for additional control on the part of the employer. The employer is able to control the investment schedule of the participant’s money for the money they allow the employer to put in addition to that. The normal contribution is about three times higher for a 401A than they are for a 457. It allows for greater flexibility as well for the employer to make contributions on the behalf of the employee. In addition to this, there is a difference in the age requirement for distribution.

Mr. Hanks asked what about if, let us say, Mr. Frederick or Mr. Hyche want to make some catch up contributions, do they have the option to contribute above and beyond what the District is putting in?

Ms. Bullock responded they do have the option that is determined by the employer as to the amount a participant may contribute, but there is an option there for it.

Mr. Zilmer asked is there a maximum?

Ms. Bullock responded the maximum is about $40,000 per year.

The record will reflect the recording picked up several people talking at the same time.

Mr. Hanks asked so are we still staying with a 457?

Mr. Zilmer responded the 457 belongs to the employees basically. CSID does not make any kind of contributions to it.

Mr. Fennell asked the 457 is under what plan?

Mr. Zilmer responded through Hartford.

Ms. Bullock stated I want to propose you also consider terminating that plan and moving it over to ICMA-RC as well.

Mr. Zilmer stated some employees might object.

Ms. Bullock asked do you currently receive an employer statement saying how much is under management for the 457 as well?

Mr. Zilmer responded no, not really. It is driven by the employees.

Ms. Bullock stated it is driven by the employees, but the 457 just like the 401A is held in the employer’s trust and should be held in a separate trust by the employer as well. That money, although it is not the employer’s money, the IRS sees a 457 contribution as being an employer contribution and it is held in trust by the employer. Although it is a separate plan where the employee is instantly vested 400% of the contributions since it is their money, you still have a certain amount of fiduciary responsibility. You should be getting statements as well.

Mr. Zilmer stated I think eventually it will be ideal to have the 457 transferred over to ICMA-RC as well.

Mr. Hanks asked so this pamphlet says 457 enrollment form, but we are not restricted to the 457, we are looking at the 401A?

Ms. Bullock responded the 401A is the primary. I was asked to bring for you the making a sound investment decision, so I felt in addition to that I would bring you the typical user kit.

Mr. Hanks asked District manager?

Mr. Cassel responded having seen ICMA-RC plans through a number of different cities, working with a number of different city managers, a number of cities have their own; either defined benefits plans or defined contributions plans. A significant number of them have continued to move over to ICMA-RC in the fact that it is portable. If you lose an employee to another city they go over there. Their account transfers and it is all done. You do not have to worry about those kinds of issues. They have been stable through the years and as an employee being able to self direct, you can choose. When I had the 401A piece, you can even go in and say you want this company and this company making up your own pie. They will administer it that way for you. You can do a number of different things as the employee; whatever your risk factor is. It allows the employee to benefit from their own efforts or they can say they do not want to mess with it and leave it alone.

Mr. Fennell stated it sounds like they have a better program for that.

Mr. Zilmer stated we had talked once before and one of the things you had said you would like to see was the employee make a contribution. With this, if we could maybe get into, then we could maybe redefine it. We are putting in 6% right off the top; maybe we would lower the contribution if the employee did not want to contribute. I believe it is the City of Deerfield Beach which has a minimum contribution of 4% if you put in nothing. If you put in a percent, they put in another percent up to a certain amount. Theoretically the maximum is 7% and if you put in 3%, you get 10%.

Ms. Zich stated that is how companies used to do it.

Ms. Bullock stated your public sector, your local government employers like the City of Coral Springs, Parkland, Coconut Creek, Tamarac, they are all allowing for a match as well for an employee contribution in addition to the employer contribution. I think it would behoove you to encourage a participant or the employee to make a contribution themselves. The cost of living is growing steadily every year.

Mr. Hanks stated you mentioned the surrender charges. I have been burned on surrender charges through Equitable, but with this there are no surrender charges. District manager, what do you need from us to make this happen?

Mr. Cassel responded Board action directing staff to proceed forward sending a 30 day notice to our current plan and start the enrollment process.

Mr. Fennell asked should we be looking at something else besides this?

Mr. Zilmer responded I have to say I love this plan. I really do.

Mr. Fennell asked so you do not think so?

Mr. Zilmer responded no.

Mr. Fennell asked what do you guys think?

Mr. Frederick responded I did not really have a chance to look at it, but from what I am hearing here it is a good plan.

Mr. Fennell asked Ms. Woodward, what do you think?

Ms. Woodward responded this is the first I heard of it. I would like to take a look at another plan, but I do not know if they have looked at other plans.

Mr. Fennell stated this is obviously on the table, but I do not know.

Mr. Cassel stated I have been in some other plans and I have been in ICMA-RC. I like the way you can handle the ICMA-RC plan. Even the other 401 plans I have been, the self directing and the amount of ability to communicate with a local representative was not there. As an employee you are trying to call somebody on the phone or get online to try to figure out what you want to do for yourself. It is a disadvantage to what I have seen in the other plans I have been involved in.

Ms. Bullock stated we distinguish ourselves from other providers in the fact we work on employee education. We actually have an educational program we utilize with different employers depending on the need of the employees. This is also directed by the employer.

Mr. Fennell asked how big are you and what percentage of this business do you have?

Ms. Bullock responded we have over $29 Billion under management. We have close to 8,000 plans sponsored and almost 10 million participants.

Mr. Fennell stated there are a lot of government employees in the world, but it is mostly the local stuff. I guess the Federal Government has its own plan.

Ms. Bullock stated it is exclusively local government. We do not service any other market sector apart from the local government.

Mr. Fennell stated we want to encourage people to save.

Ms. Bullock stated I have a sample of employee contributions based on two different income levels. I was asked to prepare this by Mr. Zilmer. This is in support of employee contributions and it just shows you some of the benefits employees can receive if they actually choose to contribute a certain amount. It is a proposal for different contribution levels. The first one shows an example of a participant who earned $50,000 a year. The second one shows an employee earning $25,000 a year. I did not know what the average compensation was here.

Mr. Hyche stated years ago the employees were able to contribute to their own plan here as well. For some reason they gave that money back. I remember we talked about some special district tax and it was not legal.

Mr. Zilmer stated that audit firm came through and said our plan was not designed for that and it was actually illegal. We had to reimburse all the employees.

Mr. Lyles stated I met with staff and discussed some of these issues. I will tell you I have had some experience over the years with public employee pension plans. I also had involvement, a long time ago, with ICMA-RC. First of all, I want to tell you I have listened to a lot of presentations and heard a lot of people advise boards such as this one over the years. You received a very thorough and complete presentation from somebody who really knows her stuff. You should have some confidence in that. Second of all, we would not have to do anything in terms of insuring compliance with our special act. All of this is in compliance with our special act. For my particular narrow perspective as your counsel, I would tell you the sooner you can get out of the business of running a pension plan individually as one single plan sponsor the more comfortable I will be.

Mr. Hanks stated okay.

On MOTION by Mr. Hanks seconded by Ms. Zich District staff was directed to implement the transition over to ICMA-RC and the proper District officials were authorized to execute any necessary documents.

Mr. Zilmer stated we will be able to move forward October 1, 2009. Because we would carry the Money Purchase Pension Plan into the next fiscal year we would have to go through audit fees and everything else. We can actually set this up so we can make the transition effective October 1, 2009.

Mr. Fennell stated we would like to invite you back so we can have our employees in and you can give them a presentation.

Mr. Cassel stated they will do an employee training workshop.

Ms. Bullock stated we are definitely committed to having additional resources to make sure every participant will get the information needed.

Mr. Lyles stated one of the things which is typically negotiated during one of these transitions is a periodic education/enrollment presentation by the plan administrator. I think you will want to ensure this not only on the transition, but on an ongoing basis; at the very least annually and maybe twice a year. You do not have a lot of turnover here, but you need to have the employees aware of the opportunity they have, how this all works and it is something you are paying for and ICMA-RC is capable of providing. This is part of the negotiations we will have.

Mr. Hanks stated okay.

Mr. Fennell stated I think we have done a good thing for our employees. Thank you very much.

· Personnel Policy Clarification

Mr. Fennell asked is this a personnel manual issue?

Mr. Cassel responded yes. It is an item we have come across having not had a situation of this nature in the past, but we are experiencing an area where we potentially have a hole in our policy as to how long we cover an individual’s insurance for his family when they are out on a short-term/long-term disability and how long we hold a position open with the District. We have gone through some iteration with Ms. Delegal from Mr. Lyles’ office. Mr. Zilmer, Mr. Daly and I looked at others and obtained some information from other cities’ policies and private entities’ policies. I believe what is presented here in the memorandum, with either of the options, will be appropriate for the District to set as a policy.

Mr. Fennell asked have we actually blessed this book yet?

Mr. Cassel responded no. We are revising the book. This would go into the book as we are revising it. We have a number of issues we are revisiting in the book since we initially gave it out to you for review.

Mr. Hanks asked this was included in the package, right?

Mr. Cassel responded it is in the package. It was behind the ICMA-RC information.

Mr. Hanks asked what is FMLA?

Mr. Zilmer responded Family Medical Leave Act.

Mr. Hanks stated thank you.

Mr. Fennell asked there are probably some laws on this first off, right? So there are some constraints there.

Mr. Daly responded after FMLA and short-term disability, long-term disability kicks in. FMLA says we are going to hold your job for 12 weeks. So what do you do on the 13^th week? This is where we are.

Mr. Lyles stated they are in compliance with the federal requirements from FMLA. They are proposing to you a couple of options they think, given at least one real life experience they are in the middle of right now, the Board may want to consider which are in excess of FMLA, but still reasonable under the circumstances for the District to consider. This is what is before you; not something which will bring them into compliance. They are in compliance, but the compliance threshold is the minimum. These options are above the minimum.

Mr. Fennell asked do we have long-term disability?

Mr. Cassel yes.

Mr. Fennell asked when does it kick in?

Mr. Zilmer responded the 13 is short-term.

Mr. Fennell asked at that point is it half day or what is it?

Mr. Zilmer responded it is actually 60% up to a maximum of $1,000 per week.

Mr. Fennell stated so short-term is up to then and then long-term kicks in.

Mr. Daly stated long-term can be years. My question is; that takes care of his pay or a portion of it, what do you do when you have a family which is on our insurance plan? Does it stop on the 13^th week? We also, during FMLA, hold the job position. What happens when you enter into long-term? We need to come up with a policy. Here is the thing. You have a person who does not know how long they will be out. If you were to cut them loose, it does not look good for the District with regard to the morale of our employees. “Oh you use them, chew them up and spit them out.” That is not how we are. On the other hand if you say, “I like whoever, we are going to carry them for another year,” we have residents who do not have insurance for a year. We really cannot do this either.

Mr. Fennell stated the long-term disability is meant to be that act. It is meant to take over. It is pretty typical of most businesses I have worked for.

Mr. Cassel stated but it does not cover their health insurance.

Mr. Fennell stated long-term disability covers that particular person. I suppose COBRA could kick in at that point. Usually at that point employees cannot work anymore. Normally what happens is if they cannot work, the job is not there and we have to find someone else to do the job. We cannot keep a job open if there is no work getting done.

Mr. Daly stated well if the COBRA kicks in, you have to terminate.

Mr. Zilmer stated yes. That is the issue. The employee has to be terminated for COBRA to kick in.

Mr. Hanks stated after my daughter was born my wife resigned.

Mr. Zilmer stated she resigned. There has to be a termination whether it is voluntary or involuntary.

Mr. Daly stated Ms. Delegal had looked at a couple of other counties and cities, some similar to our size and some not, and came up with a different of ideas of how people in other establishments like this are handling this.

Mr. Fennell stated this is an issue I wish President Obama would go ahead and pass the insurance thing so we could get this thing off the backburner. Typically, whether it is us or Motorola where I used to work, cannot afford health insurance for people who are essentially not working there unless they are retired.

Mr. Hanks stated even then they cannot.

Mr. Fennell stated I retired from Motorola a few years ago it was like $60 for my insurance now it is $350 a month for insurance. Typically speaking we cannot carry this forever. No one can. So how long do we go? Are we going to go 2 years, 4 years, 5 years or $20 years? I do not think we can carry it forever.

Mr. Cassel stated what you have before you are two options. One option is that the District would cover it for two months and then the employee could pick up the third month before they would have the six months worth of timeframe. Then they would either resign and go COBRA or whatever, but their insurance would be lost for their dependents or we could pick up the three months we are required by FMLA and then three months by the District, which would be for holding a position for them for a period of six months. After six months we are pretty much going to know if the individual is going to be able to come back or not come back. If they cannot come back, they will go COBRA and if they are out on long-term disability after six months there are other options for them with other disability insurance which can come into play.

Mr. Fennell asked is there such an insurance on insurance? I guess there is no such policy on that. If I am right, if you have a family of four and you were to buy insurance on your own, it would be at least $1,200 or $1,400 a month.

Mr. Cassel stated or $1,500. I have been there.

Mr. Fennell stated we have a hole here where there used to not be a hole.

Mr. Cassel stated I think the hole has always been out there. It is just the first time the District has had to address this scenario. At this point in time we have this scenario and we need to decide what the cutoff period is.

Mr. Hanks stated you do not worry about a spare tire until you have a flat.

Mr. Fennell stated so at 13 weeks long-term disability begins. At that point health insurance would normally stop. Is this what you are saying? Is that what currently happens?

Mr. Cassel responded we do not have a policy right now.

Mr. Zilmer stated according to FMLA we have to grant them 12 weeks of unpaid leave, but we do have to maintain their insurance. We have that liability for a three month period. FMLA is 12 weeks, but our short-term disability runs for 13 weeks. There is a difference.

Mr. Fennell asked do they have health insurance up to the 13^th week?

Mr. Zilmer responded yes.

Mr. Fennell asked so the question is what do we provide after the 13^th week?

Mr. Zilmer responded yes and for how long.

Mr. Fennell stated there is one problem, which is if you have a health problem. How long can COBRA go for?

Mr. Zilmer responded 18 months.

Mr. Fennell stated and they can still be on our insurance policy they just have to pay for it.

Mr. Zilmer stated that is correct.

Mr. Fennell stated the real problem comes in after COBRA runs out.

Mr. Hanks stated I am thinking about how I ended up in Florida. It was when my mother-in-law had leukemia. She was diagnosed in October. We moved down here in January and she was pretty much out of commission and not able to work until about 9 months to almost a year later. That being said, she is still alive and working for Nova University right now. You do have an opportunity to go ahead; at 18 months if you are in that dire straight, you will have opportunities to go back and find something. How many situations are we going to be running into and how much money are we going to be faced with in terms of the additional insurance?

Mr. Cassel responded it is about $2,700 if we cover for the additional three months.

Mr. Hanks stated we are looking at $3,000 on a $10 Million company.

Mr. Fennell asked when would COBRA start?

Mr. Zilmer responded upon termination. That is what we have to establish. If we are creating a family personal leave policy which allows them to have another 12 weeks off, then what is the outcome? Termination.

Mr. Cassel stated it would have to be a resignation or termination at the end of that period. Basically they are either going to be able to come back to work after six months or they are not. If they are not going to be able to come back to work after six months, they need to resign.

Ms. Zich asked how are we going to force someone to resign?

Mr. Daly responded it is job abandonment.

Mr. Lyles stated technically if you do not come back after your assigned leave, you lose your job.

Mr. Fennell asked how long would that be for medical leave?

Mr. Cassel responded six months from the time they went out because you have the 12 weeks of the FMLA requirement and then you would have the other three months we would cover.

Mr. Daly stated it would go a long way to have the crew understand we do not just chew them up and spit them out. We do care about the people who are working day in and day out.

Mr. Zilmer stated we just cannot necessarily promise the same position.

Mr. Hanks stated I am thinking if it was to be you, Mr. Daly or Ms. Woodward, we certainly could not survive having that position open for six months or a full year. We are going to need someone in that position. We are going to need to get somebody in there, whether it be temporary, to fill that position.

Mr. Fennell stated so explain the two proposals again.

Mr. Cassel stated one would be we would hold a position for the individual for a period of six months; not their position, but a position if they could come back.

Mr. Lyles stated which is three additional months.

Mr. Cassel stated which is three additional months more then what we are required to by Federal Law. The difference in the option is on those extra three months we would either pick up the insurance for two months and the employee would pick up for one month or we would pick up all three months on their insurance.

Mr. Hanks stated I say we do it for all three months because if somebody is in this situation, they will have trouble. I wish there was a way we could do it longer, but at that point it becomes a bigger issue.

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the Board directed Mr. Daly and Mr. Zilmer to implement Option Two as presented in the Personnel Policy manual as the policy of the District with respect to continuation of health insurance and job holding after the three month FLMA period.

· NSID Services Update - Discussion

Mr. Cassel stated I emailed you a memorandum and printed out a hard copy in case you did not bring a hard copy with you. It is just a status update of the impact regarding the changes with NSID and the potential ripple effect on CSID. The bottom line on CSID is there is not adverse financial impact once the transition occurs. We will be picking up accounting services for NSID and the attorney has been working on the interlocal agreement, which he has passed out to you as well as an initial draft to formalize the relationship between CSID and NSID for services rendered either by CSID or by NSID for the other and how it will take place.

Mr. Fennell stated congratulations to Mr. Hyche. I think we need to think about this more. We are blessed with a lot of talent in this District in a lot of different areas. We only have so much area to grow and people are going to nab our really good people. We will just have to grow some more. We look forward to working with Mr. Hyche closely in the future. He is going to be the manager over there.

Mr. Hanks asked is Severn Trent Services still going to be maintaining you as a local presence?

Mr. Cassel responded yes. I am not going anywhere.

Mr. Fennell stated I got to talk to some of the people over at NSID since there was a little bit of a conflict of interest between Severn Trent Services and things which were going on. I had to be fairly active in this.

Mr. Cassel stated I purposely have stepped back on a number of things and let staff, Mr. Fennell and the attorney work through some of the issues so there was not a perceived conflict of interest in issues.

Mr. Fennell stated I think we have worked it out here. We will be providing some accounting services thanks to Ms. Woodward and her crew here. We think we can take this on without any additional people. We have had a computer system here with other types of back up systems. We had previously decided to fund with the idea we would have more than enough capability to do things. I think it will work out. I know they are working on a list of things we can do and things we do not want to do. We are going to handle this through the interlocal agreement. We will be selling services and we may buy some services back also. I directed staff to look at how we are going to do this. We have two additional people coming back. We have to figure out how we are going to absorb them and put them in. I am not sure of how the manpower works out. There are a lot of different things to do. I think it will work out fine for us. Are there any questions on this?

Ms. Zich asked is Mr. Hyche going to be located over there?

Mr. Fennell responded probably so. With the current policy we have we will hire out employees and we will buy back time, but we will not have people be employees of both districts. We are far away from that. He will probably spend some time back here too. From our own management standpoint we need to decide how we are going to staff up here. I am going to leave it up to my own manager to figure it out. I was able to talk to him as well as some other personnel from NSID. I think it will work out well. It is probably exciting times over there at NSID with the change order. I was not able to talk to you guys directly or even through intermediaries because of the Sunshine Law so I had to just step up and hope you were getting some information.

Ms. Zich stated I was surprised. I had no idea. I know Mr. Hyche is a good employee, but I wish he was not going to NSID.

Mr. Fennell stated they have some people who take action at NSID and they are, so they are going to go ahead and do it. Are there any other questions on this? Do you need any more direction from the staff or from us?

Mr. Cassel responded no. It was just an update unless we want to jump to the interlocal agreement at this time which the attorney has already worked on.

Mr. Lyles stated we were already working on an interlocal agreement which was going to formalize the relationship that has been renewed each year through the budget process between NSID and CSID and reduce it to an interlocal agreement to cover the existing services provided to NSID for which NSID pays this District. This change in management structure and direction at NSID came about in the midst of all of that. We have prepared a different type of draft. It is a working draft. It is informational and we are not asking you to take direction on it. I do want to tell you what we anticipate as a timeframe.

The initial acute need of NSID’s part for a manager is being that because Mr. Hyche is going to be a fulltime employee of NSID. The second acute need is for accounting services, which they do not have a way of providing starting toward the end of next month. This initial cut of this agreement contains the detailed exhibit, Exhibit A, that spells out the kind of accounting services, the scope of the accounting services and a payment provision. Initially what we are going to have at the end of the month of September is an agreement we hope you will be in a position to authorize and execute at your next meeting which will specifically cover accounting services and provide the framework for a follow up in about 60 days or so from now, which will cover a lot of the existing services which have been approved through the budget process which need to be defined and added as Exhibit B to this agreement.

There will be an amendment, which will cover those other things. For now, we need to get the accounting services up and running in late September so we start the new fiscal year and the new period after Severn Trent Services’ notice period expires with NSID. Both staffs provided input in this process telling me what they need and want. You will start with the accounting and then we will go on to all the other services shortly thereafter. NSID will, probably at their next meeting, approve this document. It will be refined and ready for signature. It will come back to you. You will approve it ready for signature and the latter part of September it will be finalized and signed.

Mr. Fennell asked is there anything we can do today to ensure we go forward wit the financial services?

Mr. Lyles responded I think we can handle this on the staff level.

Mr. Fennell asked do you need any direction from us?

Mr. Lyles responded I think you indicated you want to proceed in this fashion based on the discussion today and we are. She will be gearing up, but it will formally take effect when these documents get approved and signed by the two Boards.

Mr. Fennell asked are there any problems with this Mr. Hyche? Are we all in good shape?

Mr. Hyche responded yes.

Mr. Cassel responded we are all working together towards the transition.

Mr. Fennell asked so we do not have to do anything today?

Mr. Lyles responded no sir.

Mr. Fennell asked are there any questions? Do you have any comments Mr. Hyche?

Mr. Hyche responded no.

Mr. Fennell stated I do wish you the best of luck.

· Meeting Schedule for Fiscal Year 2010

Mr. Fennell stated the only thing I saw is we are meeting the fourth Monday in January and the fourth Monday in February.

Mr. Hanks stated during the year if we wanted to change this, we could do so later on.

Mr. Fennell asked are there any other comments on the schedule?

There not being any,

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the meeting schedule for fiscal year 2010 was approved as presented.

· Hurricane Status Update

Mr. Cassel stated I will turn it over to Mr. Daly and then Mr. Hyche, but basically the crew is ready to go and everything is in place on the high level of it. Mr. Daly, do you have any other issues?

Mr. Daly responded no. We all watch the news and we get all the notices from the city from Mr. Maslan. When we came in today we already knew Hurricane Bill was probably going to go across Bermuda and was going to miss us, but still the fuel trucks came and everything is tapped off.

Mr. Fennell asked how much fuel do we have again? How many days?

Mr. Hyche responded approximately 17 days.

Mr. Fennell asked we had to get a special permit to do this, right?

Mr. Hyche responded yes. With the nanoplant coming on, it will be even more. There will be another tank underneath that generator.

Mr. Fennell stated the more the better because we all know exactly what can happen.

Mr. Hyche stated they do have new reporting criteria at Broward County Emergency Management. We have staff already trained. They have my number as a contact.

Mr. Fennell asked has NSID been able to increase their…

Mr. Hyche responded not at this time.

Mr. Fennell stated I highly recommend it. I did not really understand until later what was going on. There was a lot of diversion. It was not obvious who was getting the oil. I understand FHP was in there deciding who got it. It was a pretty iffy situation. We are going to avoid that.

Mr. Skehan stated the permitting for additional fuel onsite has changed also since the last time that permitting effort went through. It has become easier to have more fuel onsite than in the past.

Mr. Fennell stated good. I do not know if people know this, but a number of gas stations have to be down by about two thirds. The actual amount of gas and oil stored around the local area is small. Okay, so we are good there. We have the money out in the safe and all of that stuff?

Mr. Hyche responded satellite phones are functioning and ready to go. All of our radio systems are going.

Mr. Fennell stated the less we have to do. The canals are still high.

Mr. Frederick stated we went up a little bit. We were getting close to normal before the weekend and then we got some rain over the weekend. I do not want to jump the gun too soon because once it is gone we cannot get it back.

Mr. Hanks stated we had a dry spell going for a week, which is unusual. In a couple of more weeks we are going to be in September.

Mr. Frederick stated we are not going to let it get much higher than what it is right now.

Mr. Fennell asked what about our portable power stations?

Mr. Hyche responded they are all set and ready to go. They have been serviced.

Mr. Fennell asked is there anything else we need to think about?

Mr. Daly responded we have a detailed hurricane preparedness manual. In fact, people have looked at it and said “wow”.

Mr. Fennell asked this place here can go out and keep going with power, right?

Mr. Cassel responded yes.

Mr. Hanks stated this place can stay going on power as long as this building still stays. That is another project.

Mr. Hyche stated there is a film out there we can put on there. Dade County uses it to put on these other buildings.

Mr. Fennell stated I think we should do that.

Mr. Daly stated we will look at it in December. We cannot do it now.

Mr. Fennell it is basically big tape.

Mr. Hyche stated I can go ahead and get quotes.

Mr. Fennell stated I think we should; otherwise, we are going to have to put up shutters. At least this thing can take a hit. It will still stay there and hold it.

· Discussion of Interest on Water and Sewer Deposits

Mr. Daly stated we are paying 2% and have been.

Mr. Cassel stated back in 1995 the Board had made a decision at that time, since they were earning interest on the deposits, to pay interest on peoples water deposits we were holding. Since that time, with everything going down, the City of Coral Springs does not pay any interest on deposits. Most other entities do not either. We are still paying 2% on those deposits. We wanted to bring it to the Board to see if you would agree with us going to 0% on the deposits as well.

Mr. Fennell asked what are we getting for the money we actually have in the bank now?

Mr. Cassel stated 0%.

Ms. Woodward asked what is the closest you can get?

Mr. Hanks asked is it going to save us in the end? Efforts in computing what people will?

The record will reflect the recording picked up several people talking at the same time.

Mr. Hanks asked what difference does it make?

Mr. Daly asked what difference does it make that they are getting interest?

Mr. Hanks responded it all comes out of our own pocket; left pocket or right pocket, which pocket do you want it from?

Mr. Daly responded that is true with this. The fact is we are not trendsetters here. This is what most of the other communities around do. They get 0% interest and any interest there is goes back into the system for the benefit of all. It is really easy to take that two percent off. It only amounts to $460 a year. Because it is only people who leave and people who pay their bill on time after 18 months that get their deposit back with interest. It was only about $460 last year. It is not a lot of money.

Mr. Fennell stated no. Forget it.

Mr. Daly asked just forget it meaning do not give it?

Mr. Cassel responded leave it alone.

Mr. Fennell stated I think in six months you are going to see things back to normal.

Mr. Hanks asked do you want to talk about the City of Coral Springs?

Mr. Fennell responded the City of Coral Springs and the Building Department was kind enough to respond about their effort and what their participation has been in bringing things forward. We may have made some comments which may not have been helpful as we would have liked and we will take those back. I want to really thank the City of Coral Springs and their Building Department for doing everything they can to move these projects forward. I think they are trying to help us out and I think they will continue to do so. Thank you for their interest in writing the letter and we will try to respond as best as we can.

· Monthly Water and Sewer Charts

Mr. Fennell stated the one titled Water Data Billed to Distribution; billed money we bring in.

Mr. Hyche stated yes.

Mr. Fennell asked is distribution the amount of water which went out?

Mr. Hyche responded yes.

Mr. Hanks asked what is RAA?

Mr. Hyche responded running annual average.

Mr. Fennell asked why is there inconsistency?

Mr. Hyche responded flushing, breaks, amount of water being used in the plant. If we take a tank down, it is water loss.

Mr. Hanks stated changes in pressure.

Mr. Hyche stated changes in pressures.

Mr. Hanks stated in December and January you were keeping the pressures down a little bit so you would have less leakage coming out of any joints.

Mr. Fennell stated they just had to fix one in front of my house.

Mr. Hyche stated yes.

Mr. Fennell stated I do not think I ever realized how small that pipe was. It is basically a plastic pipe. In my area and in your area too, everything is filled in. I was basically in a flood zone before they filled in the area.

Mr. Hanks asked do you mean the soil?

Mr. Fennell responded yes. The soil is about three or four feet of fill, which means it has all kinds of coral rock in it. What they did this time was they out another plastic outer pipe and then they ran the pipe through it.

Mr. Hanks asked what is the situation with, I saw some of the work being done at some of the schools?

Mr. Daly asked in Taravella?

Mr. Cassel responded meters.

Mr. Daly stated we have nine meters there and every month there are different work orders put out because the meters are always broken, damaged or they cannot get to it. The more I thought about it, I thought we have a meter replacement program, I do not know why we do not just throw a couple of six inches in two corners and they can do whatever they want with the inside. We do not own the lines inside. We are not supposed to be in there reading them. That is private property. We went ahead and talked about it. Mr. Cassel was also involved. It was an ongoing project, probably about six months. There were some issues, but we did a lot of work arounds. There were no backflows on those, but all the inside meters have backflows and now it is up to the School Board of Broward County to stick them on the big ones. We are compliant. Now we are on the big meters and we do not have to read the little ones.

Mr. Hanks stated we really should be pushing for that because when we do a new development the separation between public and private systems is meant to be a backflow. We need to get a letter off to the School Board of Broward County.

Mr. Daly stated they are well aware of it.

Mr. Hanks asked is the health department involved in it as well? They regulate the water.

Mr. Hyche responded they are the regulator of the water.

Mr. Hanks stated the other one is the mall where you have a million meters or something like it. Is that a bit more difficult situation to correct?

Mr. Daly responded we cannot do it. Every individual store in there gets an individual bill.

Mr. Hanks asked do we have easements taken care of on the mall?

Mr. Daly responded I could not tell you.

Mr. Hyche stated we had a lawsuit at one time. Someone stepped into a meter hole. It is still ongoing as to where the easements were.

Mr. Lyles stated the short answer is we basically do not have easements where these meters are. That lawsuit is still going. I received another report last week with a bunch of pleadings and discovery documents from the attorneys representing us. One of the fallout issues from that is; what do you mean we do not have easements? We are on private property and we can get pulled into this lawsuit when we thought our involvement ends way out at the public right-of-way. That is a problem which right now does not have a solution. The good news is we did find an insurance policy requirement on the part of the Burger King where this happened. They were supposed to cover things. Everybody is going to let Burger King’s insurance, hopefully, take the lead on the defense. In that individual case there was some good news, but the bigger problem is where the easements end, why is our meter not in our easement and what do we want to do, if anything, about pulling them back and putting them in our easements, which is something we do not want to do in the middle of a piece of litigation, but it will be coming back in the future.

· Utility Billing Work Orders

This item is for informational purposes only.

SIXTH ORDER OF BUSINESS Approval of July Financials and Check Registers

· Summary of Cash Transactions

· Projected Cash Flows

· Engineering Projects

Mr. Fennell asked are there any questions on this? It looks like things are coming through good.

Mr. Hanks responded I did have a question. It was on the tax receipts we were receiving. Did we have a fee due this month or something like it?

Ms. Woodward responded yes. That is a 1% charge the county has been assessing over the past couple of years. It is a new charge and it goes to Ms. Lori Parrish at the tax assessor’s office. It has all been basically budgeted within that one account so I basically separately stated in that list.

Mr. Hanks stated I just noticed on July 22, 2009 there was a $3,913.53 commission in fee, but no corresponding revenue.

Ms. Woodward stated that is correct and I am intentionally not hiding it in the revenue so that you can tell it is a separate item. What you will notice is typically around January or February they will assess that because the bulk of the collections have already come in. Then every couple of months as they collect more, they will do a smaller billing to you on that. Those get paid as those invoices come in.

Mr. Hanks asked so in less commission and fees if it is in parenthesis, does that money come back into us or is it still money going out?

Ms. Woodward responded the less commission and fees, that minus $18,000 in January and the minus $3,900 in July is money going from us to Ms. Parrish.

Ms. Zich stated Ms. Woodward you are doing a great job. We have got it so refined now that it is really easy to look at.

On MOTION by Ms. Zich seconded by Mr. Hanks with all in favor the financial statements for July 2009 were approved.

SEVENTH ORDER OF BUSINESS Adjournment

There being no further business, the meeting was adjourned.

Glen Hanks Robert D. Fennell

Secretary President