MINUTES OF MEETING

CORAL SPRINGS

IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, August 15, 2005 at 4:09 p.m. at the District Office, 10300 NW 11^th Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Bob Fennell President

Bill Eissler Vice President

Glen Hanks Secretary

Also present were:

Ed Goscicki Severn Trent Services

Dana Kaas Severn Trent Services

Jean Rugg Severn Trent Services

Dennis Lyles Attorney

John McKune Engineer

Ron Luzim Luzim & Slatkin, LLP

Tom Good Applicant

FIRST ORDER OF BUSINESS Roll Call

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

There are two additions to the agenda, a presentation by Mr. Good and discussion of an open door policy.

SECOND ORDER OF BUSINESS Approval of The Minutes of the July 18, 2005 Meeting

Mr. Fennell stated each Board member had received a copy of the July 18, 2005 minutes and requested any additions, corrections or deletions.

There not being any,

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor the minutes of the July 18, 2005 meeting were approved.

THIRD ORDER OF BUSINESS Public Hearing to Consider the Adoption of the Water and Wastewater Fund Budget for Fiscal Year 2006

Mr. Fennell opened the public hearing.

Mr. Goscicki stated staff is proposing some minor changes dealing with shifting of the funds, increasing the dollar amounts for sludge, decreasing the Renewal and Replacement Fund and keeping the same total bottom line.

Mr. Hanks stated how does the reduction of the Renewal and Replacement Fund and increase for sludge hauling affect our capital improvement plan?

Mr. Goscicki responded only $10,000 was shifted around and was immaterial.

Mr. Hanks stated I noticed we had the same revenues as last year with a slight increase and/or decrease in operating expenses. We also discussed at one point changes to the rate structure for water and sewer.

Mr. Goscicki stated the current budget assumes continuation of your current rate structure. As we move into this fiscal year, I recommend the Board look at the entire rate structure, which has been in place for 10 to 15 years. Based on the Board’s comments of wanting to look at the equity for the first $3,000 of the based fee, rather than doing an update, which is what your engineer does every year in terms of revenue sufficiency, it may be worthwhile to look at the structure in its entirety for the upcoming fiscal year.

Mr. Hanks asked can we amend the budget to reflect changes in the rate structure?

Mr. Lyles responded the rate structure has to be revised pursuant to a separate public hearing and notice process. We adopt our rates by resolution. Before you is a budget incorporating the current rate structure. If we go through the process to adopt changes to the rate structure, we can have a hearing to amend this budget and reconcile any differences.

Mr. Hanks stated realistically we have to hold two public hearings, one to adjust the rate structure and another to amend this budget.

Mr. Goscicki stated you may not need to amend the budget. The current rate structure is sufficient to generate the revenue you need. The purpose of looking at a new rate structure is not to increase revenue, but to look at the equitable distribution and collecting revenue according to the benefit and costs.

Mr. Fennell stated at the present time our projection for next year shows sufficient funds coming in. Our real issue is the long-term capital issue.

Mr. Hanks stated we have some large expenditures coming up in the future.

Mr. Fennell stated we are eliminating some of our security services, which was a $300,000 a year expense. Operational wise we are still in good shape. Maybe there are more things we can do about that in the future. The real test will be the capital expenditures; however, I do not know if this can be determined until we are all in agreement on where we are going. At this point, we need to determine whether this is a good budget.

Mr. Hanks stated I think this is a good budget and we should go forward with it. At our last meeting, we discussed some concerns in terms of where the money is going.

Mr. Goscicki stated we are confident this is a conservative budget in terms of whether there is sufficient revenue to meet the projected requirements. As the Board discussed at the last meeting there are opportunities for cost savings. Severn Trent Services submitted a report identifying some cost saving opportunities such as a long-term capital improvement requirement as well as additional expense requirements in future years. However, in terms of the current year and making sure the Board is in a good fiscal position, you have a solid budget. We reviewed it at the management level and feel you can move forward comfortably as the budget covers the needs of the District for this upcoming fiscal year.

Mr. Fennell stated I do not think we can spend $7,000,000 to $8,000,000 in the next year.

Mr. Eissler stated we are going to have to raise our water rates in the near future. This budget is fine for this year, but with the improvements to the plant we are either going to have to issue a new bond to raise money or raise our water rates. Our rates have not increased in almost 20 years. We are one of the lowest Water Districts in South Florida, which is not good. I do not want to be sitting here when we have a 20% increase and have people yelling at us. I would rather see us increase the rates on a periodic basis in small increments.

Mr. Fennell stated we paid down some of the debt and we are still in good shape. However, I understand your point of having incremental increases as opposed to having a large increase when we find ourselves in debt. I also agree with Mr. Goscicki’s idea of doing a study this year. Once we get our new Manager and go over our projected expenses, we can figure out how to fund it.

Mr. Goscicki stated you should look at your rates on a three to five year basis, see what the CIP is, projected requirements and the cash and bonding capacities. If you know you will have a major expense three years from now, I recommend you start modifying your rate structure in advance and issue a 20% increase.

Mr. Eissler stated there are some items in the budget where I do not know where the numbers came from. Who do I need to talk to regarding a line-by-line review of the budget?

Mr. Goscicki responded you can speak with me and if I cannot get you an immediate answer, I can refer you to the operations staff.

Mr. Eissler stated who do we pay Project Management Services and Professional Consulting and Computer Time to?

Mr. Goscicki responded Project Management Services was Mr. Moore’s position. These are the services we provide for field operations and engineering services.

Mr. Eissler asked what are Special Consultant Services under the water and sewer fund?

Mr. Goscicki responded this line item is used to pay for a lobbyist. From time to time we have to hire a lobbyist. I would be happy to schedule some time with you in the next couple of days to work through this budget with you.

Mr. Hanks stated I looked at the General Fund and Water and Sewer Fund and separated who was on the CSID payroll and Severn Trent Services payroll.

Mr. Fennell closed the public hearing.

Mr. Goscicki asked has it been past practice to adopt the budget at the September meeting?

Mr. Fennell responded yes.

Mr. Lyles stated we do not need to adopt the budget at the September meeting. We advertised and held the public hearing today whereby the Board received a resolution formally adopting the Water and Sewer Budget for the upcoming fiscal year.

Mr. Fennell stated the quicker we adopt this budget, the quicker we can proceed with the assessment process.

Mr. Hanks stated as long as we can amend it.

Mr. Fennell stated we can amend it any time during a meeting, as long as we publicly notice it as a public hearing. Is that correct?

Mr. Lyles responded yes. Usually we do reconciliations during the course of the fiscal year. The state requires us to do an amendment to the budget with a resolution if there are differences at the end of the year. We are talking about something funded by rates and not by assessments on the water and sewer side. The General Fund Budget is funded by assessments. The only time we recessed the public hearing and reconvened it for September was to continue the General Fund Budget when there was a desire to adopt both budgets at the same time. As far as I am concerned, the process for this budget is complete today with the adoption of the resolution.

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor Resolution 2005-7 Adopting the Water and Sewer Enterprise Fund Budget for Fiscal Year 2006 was adopted.

FOURTH ORDER OF BUSINESS Consideration of Encroachment of Easement for Maple Wood Isle, Lot 63, Block E

Mr. Goscicki stated the engineer has not had an opportunity to review this request. The cover letter reflects the encroachment is 1.33', but in looking at some of the setbacks there may be some other issues. Therefore, we will table this item until next month so the engineer can review this request.

Mr. Luzim stated I do not have any objections. I am here on behalf of my firm representing the seller of this transaction. The buyer and seller of this transaction entered into an agreement, which was provided to the Board along with a copy of the survey. The agreement is somewhat time sensitive as the buyers are looking at a non-disturbance type of agreement. The buyers and sellers cannot close until this transaction is completed. Therefore, I request an early consideration. I have a certified copy of the survey.

Mr. Fennell stated there is an encroachment. Was there permission for the encroachment prior to the sale?

Mr. Luzim responded this happened right before the closing. We have the approvals of Bellsouth who had no problem entering into a non-disturbance agreement. Advanced Cable also indicated their approval.

Mr. Fennell stated we are still going to have our engineers review this request. It looks like the pool and wood deck are built close to the water’s edge into the right-of-way.

Mr. Luzim stated the concern only has to do with the hot tub, which is constructed into the ground. The wood deck is not involved. I understand from reading the notes, they are requesting a non-disturbance agreement as the 1.33' projects slightly into the utility easement, which allows more than sufficient room for whatever activities CSID needs in the future.

Mr. Fennell asked is this a utility easement or land owned by CSID?

Mr. McKune responded it may have been dedicated as part of the plat. It is a canal maintenance area. According to the Property Appraiser, the encroachment is shown as city property.

Mr. Goscicki stated my recommendation is for your engineer to do further research because there are multiple issues. You have a fence line encroaching on District property, a hot tub and deck encroaching on the utility easement and a fence line that does not appear to follow the property line.

Mr. Hanks stated there were no encroachments before this occurred. Did this only come about when they sold the property?

Mr. Luzim responded that is my understanding, other than the parties acknowledging this does not apply to the wood deck.

Mr. Hanks stated I cannot see us putting a water main in the 10' utility easement.

Mr. Eissler stated it may not be a water and wastewater utility easement. It could be an easement used by Comcast, FP&L or AT&T.

Mr. Fennell stated it would be up to Mr. Luzim to see if there are other utilities. It sounds like someone built the hot tub and wood deck without obtaining any approvals. Did this come about as a result of your client doing a title search?

Mr. Luzim responded there was a closing and apparently the buyer had a survey conducted. We are requesting a non-disturbance agreement for this 1.33' encroachment. However, we reserve your rights if you so choose to pursue other issues you are concerned about, if in fact they are legitimate concerns. The wood deck is not part of the request. The buyers and sellers have entered into a conditional closing, which requires us to attain non-disturbance agreements from various entities.

Mr. Lyles stated I assume Mr. Luzim has not seen the encroachment agreement.

Mr. Luzim stated I have not seen anything.

Mr. Lyles stated staff must have put the documentation into your agenda package for the Board’s information, without providing it to the applicant. What you will be receiving from this District is an Encroachment Agreement saying we are going to allow the encroachment to stay so long as the area does not need to be cleared out for some District purpose. If we need to access the property for District purposes, the current owners will be required to remove the encroachment at their expense. If they do not remove it, we will remove it and a lien will be placed against the property for the cost of removing the encroachment. The matter before the Board is an Encroachment Agreement not a Non-disturbance Agreement. I was not aware the engineers have not had a chance to review this request. What I am seeing is the 1.33' encroachment of the hot tub into a utility easement, which may involve our utility operations. I am also seeing a fence and large section of deck in our lake maintenance easement at the edge of the water. I do not know whether this is a problem or not, but I see the need for an Encroachment Agreement if it is going to remain or its removal. The District never allows decks or docks to be built in easements. I am not saying there is a problem, but I see the survey and think there may be a problem.

Mr. Fennell stated the Board will remain vigilant on these encroachments. We recognize the client wants to go forward with this closing, but this is an opportunity to correct encroachments into District property. We have to wait until staff has a chance to look at this and establish whether or not the space remaining from the fence to the lake hampers the stormwater management operation.

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor the request for Encroachment of Easement for Maple Wood Isle, Lot 63, Block E was tabled until the next meeting

Mr. Lyles stated I will transmit a form of Encroachment Agreement to Mr. Luzim for review. This document will need to be executed and recorded.

Mr. Hanks asked does the District own the lake? It shows up under the same ownership as the streets, which are owned by the city. On the plat, Parcels C, D, N and Q were dedicated to CSID under fee simple ownership. It looks like two of those properties were upland parks. I do not think we should be in the business of owning parks.

Mr. Fennell stated we donated parks to the city.

Mr. Hanks stated according to the aerial, there are a number of large trees in the area.

• Open Door Policy

Mr. Fennell stated I drafted the following open door policy:

“CSID is committed to retain open communications and maintain a respectful chain of command between associates within the organizational management structure. That management structure may be either through direct or contract employment services. If you have a concern about a job related issue, a frank discussion with your immediate supervisor usually is the best way to deal with this problem. If you and your supervisor are not able to reach a satisfactory resolution of your concern, you are free to take the matter to the next level of management. If you choose this next step, inform your immediate supervisor and then prepare a written statement including the facts of the complaint or problem; if applicable, the details, procedures or practices which have been mis-applied or actions taken against you without reasonable cause; the actions you believe should be taken to satisfactorily resolve this issue and the reasons why your supervisors response is not satisfactory.

The next level of management will contact you and set up a meeting to discuss this matter. You should receive a response within two weeks. If more investigation is needed, more time may be set aside. If you are not satisfied with the response, you may use the same procedure to go to the next level of management. This can continue to the next highest level of the management chain. It is expected that almost all issues will be resolved at these levels, so long as this procedure is followed. Then letters may be addressed to the Board of Directors. There will be no discrimination or adverse action taken for voicing your complaint or concern in a reasonable businesslike manner. Even though you may be in disagreement, you are still expected to follow your supervisor’s instructions pending outcome of the complaint”.

Mr. Fennell stated we should have this policy added to our human resource manual.

Mr. Goscicki stated you currently have a personnel handbook and it will be appropriate to amend this handbook to include this policy.

Mr. Fennell stated I would like Mr. Goscicki and human resource management to take this matter under advisement to see if there needs to be any changes and come back to the Board next month. If everyone is in agreement, we will add this policy to the manual. This policy can cover almost any type of complaint and provides a general procedure on how people can voice complaints.

• Tom Good Presentation

Mr. Fennell stated I provided a resume to the Board from Mr. Tom Good who applied to the open position.

Mr. Good stated thank you for having me here. I am a true native of South Florida as I was born in Miami and raised in the Hollywood/Davie area. I spent six years in the US Navy and I received my Masters Degree in Engineering and Science at the University of Florida. I am married with two children who bring a great deal of joy to me. I have 20 plus years of government service experience. I started out 20' below the pavement digging grease out of a sewer manhole to break a stoppage and even dived into the water to repair water line breaks. I was able to manage a utility operation from withdrawal, delivery to disposal and gained a good reputation, mostly due to the fact that I love a challenge. I always maximize operational effectiveness and efficiencies. I have supported major capital projects by project managing them. Most importantly, I owe my success to the investment I am making to people. I also developed and implemented strategic plans and budgets for full service operations, including water, sewer, stormwater, building maintenance, fleet maintenance, street maintenance and sanitation. I am constantly looking for opportunities to grow my knowledge base and 110% committed to contributing with integrity, credibility and reliability in everything I do.

Mr. Fennell stated there are two positions available and Mr. Good is only interested in the manager’s position. He has a degree in mechanical engineering but has practical experience in utilities. Do you have an operational license?

Mr. Good responded the operational licenses I have are the PCOA type, but I have a Type A Water, Wastewater and Collection Distribution License. A Type A license is the highest license you can get through a state voluntary program. Eventually this will be a mandatory program.

Mr. Goscicki stated currently the state mandates licensing for water and wastewater treatment plant operators. However, there is a move in the industry to spread this certification to the collection and distribution system. The local Florida State Operators Association started a voluntary program to certify individuals as collection system or water distribution system operators, which is the certification Mr. Good is referring to. This is similar to the Society of Mechanical Engineers giving you a certification for achieving a certain skill. You are being recognized by the association as having this skill, but right now the state does not have a water and wastewater collection or distribution system license program.

Mr. Fennell stated he is obviously knowledgeable enough to be a manager.

Mr. Eissler asked is he an analogical engineer?

Mr. Good responded I studied engineering of sciences, which deals with electrical type matters.

Mr. Hanks asked do you currently work for the City of Hollywood?

Mr. Good responded I work for the City of Miramar. I previously worked for the City of North Miami Beach and Dade County Public Schools.

Mr. Fennell asked did you work for Mr. Jack Strain?

Mr. Good responded yes. He is now working for Tamarac.

Mr. Eissler asked why would you want to leave such a good job?

Mr. Good responded this job is just as good or ever better.

Mr. Eissler stated to be honest with you, this position does not have a salary range. You are also going to have some tough competition. No decision is going to be made today; however, you are well qualified and your resume reads well. How did you meet Mr. Fennell?

Mr. Good responded Mr. Pat O’Quinn, who is head of a Florida Special Districts group, knows many people throughout the state. From time to time, Mr. O’Quinn and I introduce membership through a state organization. I called Mr. O’Quinn who referred me to Mr. Fennell.

Mr. Eissler stated the way this normally works is Severn Trent Services hires our District Manager. We have had four District Managers in four years for various reasons. It is my firm belief, engineering should be separated from general management operations. However, not everyone agrees. We also have an engineer who may be interested. Until the Board decides whether or not to allow Severn Trent to do the hiring or the Board to hire a CSID employee, we are in limbo. You will certainly be considered. We should make this decision within the next month. If it is a Severn Trent employee, they will be paid by Severn Trent. However, if the Board decides to hire a CSID employee, we will pay the salary. The three Board members will make the decision.

Mr. Fennell stated up until now, we have been sharing our resources with NSID and other groups. A benefit to sharing is it actually takes the control out of our own group and spreads it across other groups. We have been able to pay more money and get better people, but on the other hand they are working for other groups. At this point, the Board would like to have our own manager. Severn Trent Services has been good enough to say “okay, whatever you want to do, we will support you and make sure any transitions are there or provide any services you need from us or come back to us two years later. Whatever you want to do, we will work with you”. It is an issue of how we are going to structure ourselves. Frankly, the right thing for us is to find the right candidate, whether it comes from Severn Trent or not and put him to work for us. The structure will follow the best candidate.

Mr. Eissler stated Mr. Goscicki is our acting District Manager from Severn Trent.

Mr. Good stated I did not come here without doing some minor research. I am more aware today than I was a week ago regarding the structure here and some of the established relationships as well as some of the potential concerns you will have going forward. I made a clear choice to be here knowing what was going to occur. I want you to know I am interested and I recognize it is probably going to come down to a single person. To be perfectly honest with you, in my understanding of utility operations, 12 years is how long the rate structure has been the same, which says a lot about your staff and the company managing you. You do not see that in this industry anywhere. You have done well.

Mr. Eissler stated we have good people. Many of our people have been here 25 years. However, we are going to have a $17,000,000 expansion in the next five years.

Mr. Good stated some very important issues need to be addressed.

Mr. Hanks stated we need to discuss today whether or not this is a management structure we want to pursue and if we decide to change the management structure, how we go about finding the right people for those jobs.

Mr. Fennell stated part of the problem is whether we can find people ourselves who will be capable of learning this job. The answer is we can. Thank you for taking the opportunity to come here. We really appreciate it.

Mr. Goscicki stated we interviewed a candidate this morning and if he works out, we would like to bring him to meet with you prior to the next meeting. We are moving expeditiously at finding a permanent replacement. The individual we are speaking to is a former City Manager who brings a wealth of experience in terms of overseeing utility and public works, budget and financing. We also have two individuals on the engineering operations side to fill in while we continue to recruit. Believe it or not, it is actually harder to find the Technical Managers than the General Managers.

Mr. Eissler asked if you were to find a person you liked as District Manager, will it fit into all of the other Districts?

Mr. Goscicki responded yes. We looked for a management team to encompass a part-time District Manager who will be a City Manager type individual with 20 plus years of experience to dedicate 20% of their time to this District. We will also have an Operations Manager to dedicate 50% of their time onsite on this project. We will support this person with an engineering staff to support the managers in terms of capital planning and programming review on an ongoing basis as well as our technical service and support groups to provide safety audits, review and compliance on an ongoing basis. We will provide a security analysis for the facilities as well as process control and updates. We will get involved on a much more active basis than in the past.

Mr. Eissler asked is that a Sarasota engineering group?

Mr. Goscicki responded we have two licensed professional engineers working on environmental and regulatory compliance, capital planning and programming for some of our clients. I am also a licensed professional engineer and I will oversee the project. I have a personal connection to CSID, having been involved with CSID and NSID from my Broward County days and a resident of CSID for nine years. I was one of the few individuals who did not propose that CSID become part of the county system. CSID had an established utility and the idea of incorporating made no sense at the time. It is a well run program compared to NSID, which did not have an existing wastewater program. We will also do all of the finance and accounting and human resource management as part of our base services. We would be happy to talk with you on how we can incorporate this model, which will be a savings to you in terms of your current budget.

Mr. Eissler stated I have no doubt there will be some savings. The question is whether we are going to do this ourselves or go with Severn Trent or a company like Severn Trent.

Mr. Goscicki stated we are moving forward to hire a permanent District Manager.

Mr. Eissler asked what happens if we hire a District Manager at the same time?

Mr. Goscicki responded we can have this individual work with our other clients. However, we feel we have a candidate who will be a good fit here.

Mr. Fennell stated we only need a manager 20 to 30% of the time and an operations manager to perform 50% of the time. You can either have one person fill both positions or have part time people.

Mr. Goscicki stated in looking at the management structure, you will have a full time person in the management role between the Operations Manager and the District Manager and other technical support we bring. The question is whether we can accomplish this with one person who will meet all of the requirements and provide the continuity and support or do it through contract operations through multiple people who can draw on broader resources.

Mr. Eissler stated we can get consultants for anything we need. It may be cheaper because we are going to be paying for services we may not use through Severn Trent Services.

Mr. Goscicki stated we only contract with you for the services you need and provide a more expanded scope. The existing scope is generic in nature. As we matured over the years, we developed more detailed scopes to resolve some of these communication issues.

Mr. Eissler stated if you told me we were getting accounting services and utility billing, I can identify but you are doing our accounts payable.

Mr. Fennell stated I agree. We need to define the amount of time for the services we are getting.

Mr. Eissler stated there may be engineers available on a part time basis who are highly qualified and would love to dedicate 30 to 40% of their time for a reasonable fee.

Mr. Goscicki stated we agree and would like to put together a better scope giving you this definition.

Mr. Kaas stated in the case of the District Manager, Mr. Goscicki, Mr. Rich Hans and Mr. George Keller were representatives of the organization. However, they did not do the accounting work or AP work or Recording Secretary work for Severn Trent. The staff existing within Severn Trent did all the work. There are 140 people within Severn Trent providing all of these services.

Mr. Eissler stated I understand but we do our own utility billing. We also have our own HR person, which we probably do not need who is competent. We run this place independently.

Mr. Kaas stated I look at this as being the operating services piece of the water and wastewater facility. The District Manager provides the Recording Secretary and accounting work. The other aspect is the operations of the water and wastewater plant collection distribution system, which includes the HR and billing collection functions. This is where I believe you need an Operations Manager as opposed to an engineer.

Mr. Eissler asked do we have this type of individual?

Mr. Kaas responded Mr. Roger Moore filled that role.

Mr. Fennell stated before Mr. Moore we had someone in this role but he was not an engineer.

Mr. Goscicki stated you had an Operations Manager who was Mr. Bill Joyce. However, when Mr. Joyce left, in order to save money for the District, we incorporated this function into Mr. Moore’s position.

Mr. Hanks stated Mr. Doug Hyche is the chief operator for the water plant, Mr. Jim Avisa is the chief operator for the wastewater plant and Mr. Randy Frederick is the Field Manager.

Mr. Eissler asked was it Mr. Moore’s recommendation for Mr. Hyche to be the Operations Manager?

Mr. Goscicki responded he recommended him on an interim basis to serve in this role.

Mr. Hanks stated Mr. Hyche knows the plant operations very well and has the knowledge to interact with the regulators on a state and local level to discuss technical aspects of compliance and upcoming regulatory changes. I do not think you can fill this position with a manager or plant operations person. You need someone who has a technical background to provide interface with the regulatory agencies. Most of the efforts at the plant are to provide water, sewer and maintaining storm drainage.

Mr. Goscicki stated Severn Trent operates municipal water and wastewater services through a private venture. Most of the operators are licensed and understand the nature of the work. There is a difference between an operator and an engineer.

Mr. Hanks stated they are licensed meaning they have a state license to provide engineering services. An engineer is someone who has a technical and environmental backgrounds. A technician is someone who makes sure the District is in compliance.

Mr. Kaas stated when I said license I was referring to someone who has been certified by the state to operate the water and wastewater facilities. This is the type of technical background they need to have. If there is a problem such as the clarifier not working, they will use outside engineering resources. Within Severn Trent, we have a technical services group at no cost to the client because it is built into our pricing where we come out and troubleshoot. We also recommend repairs, upgrades or retrofitting. If it becomes a fairly substantial repair, we recommend bringing in outside engineers. Our purpose is to hire the operations people to run the plant in the most efficient fashion. We have an HR person who is responsible for securing new personnel and managing the HR function in totality. We have a person down the street, who does that for us and for all of our projects. Resources relating to doing safety checks are part of our service. We also have people who look at the facility if it is not in compliance to determine what should be done to bring it back into compliance as well as dealing with regulatory agencies.

Mr. Fennell stated CH2M Hill also provides some of these functions. There has been a good working relationship up until now because the engineers know each other. We also have a consulting engineering group.

Mr. Goscicki stated they are complimentary rather than conflicting. Regulatory compliance is an ongoing issue. We have a full time person on staff who works with our Project Managers on regulatory compliance matters including permit renewals, compliance monitoring requirements, etc. We are not there to design the facility as this is CH2M Hill’s job. Our job is to identify what needs to be done and determine the most optimum solutions.

Mr. Eissler asked does Mr. McKune perform some of these functions?

Mr. McKune responded yes, now that we are part of CH2M Hill. We are in competition with Severn Trent. In addition to the design function, we have operating and design departments. Whereas Severn Trent is capable of running your operation, so could we. I am not saying we should replace Severn Trent, but we do keep up with the regulatory agencies and can offer operation assistance. We worked with Mr. Moore and came in upon request.

Mr. Fennell asked did Mr. Moore work for your organization at one time?

Mr. McKune responded no.

Mr. Fennell stated up until now, CH2M Hill reviewed all of our compliance issues. They retain all of our records.

Mr. Hanks stated even with the consideration of the managerial structure, we still need to keep the CH2M Hill relationship ongoing because of the service they provide to us.

Mr. Fennell asked how many part time employees do we have, other than the manager and Mr. Moore. Some of the part time employees we have are Mr. Jan Zilmer, Ms. Susan Walker and Ms. Joni Hayworth.

Mr. Goscicki responded we identified 12 shared employees paid by the District, excluding Mr. Moore and the District Manager because they are Severn Trent employees.

Mr. Fennell stated I count 40 employees just on the operation side.

Mr. Goscicki stated you have 56 employees according to the budget.

Mr. Eissler stated we pay for insurance for 120 people.

Mr. Fennell stated my concern is we started looking not so much like a small business but as a large business. In other words, we took on a number of employees under a large business structure as opposed to a small business structure. The HR Director position should have been combined with another manager’s job. Office resources should be combined into other positions. We do not need five people sharing one job.

Mr. Hanks stated we have 50 people in plant operations.

Mr. Fennell stated we want to have more of a CSID identity as opposed to a Severn Trent identity. I received more complaints about CSID than Severn Trent with people leaving, which had more to do with legacy operations from Severn Trent and/or Mr. Moyer’s old operation. I want to lean towards only sharing employees we absolutely have to share, but I do not mind having Interlocal Agreements with other groups to assist them in times of crisis. We should probably have formal agreements with these Boards. We also need a chain of command and know who from Severn Trent is in command. For example, if there is a two step chain of command, which is the local Project Manager and local District Manager, we should have in writing who these individuals are. From an accounting standpoint, Ms. Walker needs to coordinate with the accountant regarding a signature path. The biggest question we have to face is whether we can afford our own manager.

Mr. Eissler stated next month I will provide the Board with a written proposal.

Mr. Fennell stated I would like the attorney to discuss the Sunshine Law rules and how they relate to applying for a job within the District.

Mr. Lyles stated obviously you cannot be on the Board and be employed by the entity the Board runs. The comprehensive provisions for public officials in Florida, Chapter 112, prohibit you from doing so. You also cannot vote in advance to support such an arrangement and take advantage of it at a later time because you are voting on a matter benefiting your own personal gain. There is nothing in your special act or the rules applying to Special Districts superceding those. If a current serving Board member decides to apply for a position, they can do so, but they either have to resign from the Board or have no involvement favoring one candidate versus another. However, at the same time if you have a candidate and this person happens to be a serving Board member, they are not prohibited by a waiting period like lobbying restrictions typically apply to specific public officials when they immediately begin to represent interests before you. I do not believe there is any such period applicable to any employee or consultant. In the upcoming weeks we will find this individual for you, but right now, you do not have a situation where there is a violation either out there or eminent.

Mr. Fennell stated it is beneficial to know individuals like Mr. Good are available. He currently makes $93,000 and it is probably going to cost $110,000 to $120,000 to hire him full time. Will it be worth $30,000 to this organization to have such a person employed full time?

Mr. Goscicki responded you need to look at the fact you are paying $230,000 for management services, which includes the manager, operations, accounting, budget, fiscal management and administration. If we are going to continue providing these services, we need to price out what you do not need. I feel those are all viable options, but it is hard to determine the cost of one position.

Mr. Fennell asked can we afford a full time manager?

Mr. Eissler responded probably not at this level. We can probably afford a consultant. For example, we have an engineer who dedicates 30% of his time performing these functions.

Mr. Hanks stated we can probably get both.

Mr. Eissler stated there is a great deal of talent out there.

Mr. Hanks stated you can hire someone in a full time managerial position for $100,000 a year. Recognizing they may only be managing 20% of their time, there are other tasks in the District, which are currently being performed by shared employees with other Districts. Therefore, there are many tasks you can consolidate into the District Manager’s position. You are not maintaining any accountability, but there is a savings without the salaries you are paying out.

Mr. Eissler stated this is not insurmountable. If you want a full time person, we should go to Severn Trent.

Mr. Fennell stated we have enough facts to make a decision.

Mr. Eissler asked am I prohibited from bringing in a written proposal?

Mr. Lyles responded the Sunshine Law does not prohibit written communication being submitted to the manager and distributed to other Board members for review and in advance of the meeting.

Mr. Fennell stated we can have an item on the agenda for the next meeting called “decision structure”.

Mr. Lyles stated just make sure you do not discuss it or obtain feedback in advance.

Mr. Eissler stated could it be discussed at the meeting?

Mr. Lyles responded yes.

Mr. Hanks stated should interested parties make themselves known to one or more Board members, a resume could be circulated to the Board.

Mr. Lyles stated that is correct.

Mr. Fennell stated we are looking to Severn Trent to announce the candidate. We will then have to decide whether or not we like what is proposed or we have something better and come to a conclusion.

Mr. Eissler stated if we do not come to a conclusion, at least we will be able to discuss it. It may take a separate meeting to resolve this matter. I would like to conclude it before year-end.

Mr. Goscicki stated the Board’s actions and discussion over the last month have gone a long way to resolving some of these internal communications. I met today with management support staff and everyone is clear in terms of the communication level, the manager in charge of the District, what their relationship is in terms of communications and reporting on a very positive note.

Mr. Fennell stated provide this information to our HR person for their review. We will start to have an understanding of where the policy is coming to the board and what we are looking for. I agree with Mr. Kaas whereby we may still need another engineer as a consultant to monitor the construction. However, this is an operating plant and you need a strong individual to operate on a day-by-day basis. The management structure is in progression. We need to make sure we have the right people making the decisions.

Mr. Eissler stated I thought we had the right people.

Mr. Fennell stated we have some people, but we are missing the leader who will make the decision to drain the canals and turn off the water supply.

Mr. Hanks stated we are mainly looking for reporting structures and recruiting an hourly person.

Mr. Fennell stated we need Severn Trent to provide some names to us.

Mr. Fennell stated I would also like to discuss the accounting functions. There is a question regarding where we want to go financially. We can stay with Severn Trent, go outside or bring someone in-house.

Mr. Goscicki stated you need to look at your entire fiscal management program. Ms. Walker, Ms. Ellis and I met to discuss how this process is going to work to make sure the files come back here and that all documents are executed. Ms. Walker will sign off on the check. I think we have closed the loop on accounts payable and have a good process in place.

Mr. Fennell stated I would love to see that happen. If not, we are going to have to establish some other procedure or audit two or three times per year.

Mr. Hanks stated on the invoice list, 40 or more invoices were over 30 days old when they were finally paid.

Mr. Goscicki stated we need management structures in place for signatures and management.

Mr. Fennell stated I would also like to see us purchase our own computer.

Mr. Eissler stated we can pay it off within two years. The only issue is Severn Trent has a different computer and software. If the Board decides to remain with Severn Trent, we need to stay compatible.

Mr. Goscicki stated there are two components; the utility billing system, which runs on your computer and fiscal management software only unique to three Districts. The utility billing system can be a standalone software package running on your AS-400 and has a journal entry into the finance system. This is fairly common practice in many of our operations. If you keep it internal to the organization, you have the software package, but should look at buying our computer. If you just keep the utility billing system, this is a much simpler sub-ledger off of the general ledger.

Mr. Fennel stated by running our computer system in house, there is more than just utility billing. Where should fiscal responsibility reside?

Mr. Goscicki responded you can separate the function, but it may not be large enough. You need someone to do your bookkeeping and keep track of capital expenditures.

Mr. Hanks stated 90% of your budget is going to come out of the capital improvements and the operation and 10% for salaries.

Mr. Goscicki stated the fiscal management is not so much the complexity of putting the budget together. It is having day-to-day familiarity with the budget and the financial transactions. When you are looking at the capital program, budget or the fiscal plan, you have people on board who work with your engineers. It is the higher end fiscal planning programming you want from your management firm. You do not get that unless we are doing your accounting because then it becomes an additional consulting service. In essence, you will be paying someone to do your accounting plus a consultant to analyze. We do this for every District. It is core of what we see ourselves doing, which is being responsible for your overall fiscal management.

Mr. Fennell stated up until now you have been handling our expenses and the budgets once a year. CHM2 Hill tells us what they are spending, but I do not know that the managers have gotten involved in watching the expenses of the projects.

Mr. Goscicki stated we spent a great deal of time this year working with the engineer on the capital improvement program. There was negotiation back and forth on when we were going to move the project forward to make the overall financing work. This is part of the senior management level function. The engineer identifies the need and financial, risk analysis and engineering decisions need to be made, which is part of our management function when we are working on the financing.

Mr. Eissler stated the easiest thing for us to do is to have Severn Trent run this entire operation. The fallacy is you will lose total control over everything because once they take over, you have no outside input. If I was Severn Trent, I would want complete control over this operation because it allows me to increase my revenue. Now we have some of our own people and our own input. From an ease standpoint, you should give control to a management company. However, from a practical standpoint, if you are concerned about the operation now and 20 years from now, you want input and some of your own people. If Severn Trent was making the decisions, they would say they do not have the money to refurbish the plant and wait three years. This happens in every major corporation. When we purchased the generators, we did not need four new generators, but we purchased them because WE wanted to have backup generators. If it was a management company decision, you would not see all of those generators.

Mr. Goscicki stated from a standpoint of management contract operations, it is not about control. We do not want to control the policy and direction of the organization. It is very much of a public/private partnership. Our goal is to provide quality operations and management.

Mr. Eissler stated your first goal is to make money for your stockholders. If that is not your goal, there is something wrong with Severn Trent.

Mr. Goscicki stated you are absolutely correct. If we cannot make money, we will not stay in business. The only way we will stay in business is if we satisfy our clients. If our clients are not happy with what we are doing, we will lose them.

Mr. Eissler stated the difference between private industry and a utility is the only control is the Board of Supervisors who are elected and come and go. If Severn Trent does well and controls these Districts, with the goal of making money, they know this Board will change. If you have total control, the new Board is going to come in and will not know anything. They will not be engineers. They will be citizens who run for office and get elected. I am holding out for some CSID employees because I feel it benefits the community and keeps everyone honest.

Mr. Fennell stated you are building the value of the community.

Mr. Eissler stated when I dealt with management companies, we gave them total control and it never worked. It is like having an engineer and a General Manager. Forty-five years of experience says it does not work. It is always better to have someone looking in from outside.

Mr. Goscicki stated we could not agree more. There needs to be accountability. If you gave us a contract and we had no accountability back to this Board and no way to show and demonstrate to the Board the value we are bringing to management services or operations, that is a bad contract.

Mr. Eissler stated this is not an attack on your credibility.

Mr. Goscicki stated I am not taking it that way. It is a matter of how we conduct business.

Mr. Eissler stated the Board wants some CSID employees to keep an eye on everything.

Mr. Fennell stated as part of our open door policy, we need to have input. Mr. Eissler is correct whereby most organizations fail because they fail to listen to someone within the organization.

Mr. Goscicki stated we talked last week about another client going through a similar process and we are working with them on getting one of their people on board to be a District Coordinator or administrator. We are very supportive and feel it is a very workable model. Their key connection with the Board is their employees report to them directly, we provide them the support services and a part time Assistant Manager will work with this individual to carry out the services.

FIFTH ORDER OF BUSINESS Staff Reports

A. Attorney

There being no report, the next item followed.

B. Engineer - Monthly Water & Sewer Charts

Mr. Hanks stated in regards to the wastewater treatment plant flow, I would like to see how the data compares to last year to see if we are making any improvements with the re-lining of the pipes and lift station linings. It would be specific to areas and address the entire flow.

Mr. McKune stated we did see some benefit from the relining of the eight-inch main sewer pipe, but it was not as much as we had hoped as reflected by the city’s experience with a much larger program. The biggest problem we have in the District relates to flow from the main line to the property line. Those lines are broken and require $3,500 to $4,000 for each fix.

Mr. Goscicki stated I will get a report from Mr. Moore.

Mr. Eissler asked if a property owner has a sewer line break from their home to the street, who is responsible for the repair?

Mr. McKune responded the District owns up to the property line. From the property line out is the homeowner’s responsibility.

Mr. Fennell asked is it to the property line or the meter?

Mr. McKune responded to the property line.

Mr. Eissler stated on my street, there was a sewer line break and the homeowner did not pay anything.

Mr. McKune asked was it the stormwater line?

Mr. Eissler responded the stormwater line broke in the process of repairing the sewer line. The storm sewer line was in the wrong location and broke. However, the actual sewer line from the house to the street was on the property and the homeowner did not pay. We have to take down trees and pay when it is not our responsibility.

Mr. Hanks asked do we have a security fence update?

Mr. Goscicki stated I will obtain an update from Mr. Moore.

Mr. Fennell stated there is a device we push to gain access to the plant but we may need to have a divider. We should get this resolved before terminating the security service as we do not have a way to get in.

Mr. Goscicki stated we informed the Board we would not terminate the security service for at least 60 days after the new system is up and running until we were competent it was functional.

Mr. Fennell stated I am not sure it is done or that it works. See if you can determine how to get through the gate without the guard being there. Every time I drive up here, there are at least two people in front of me dropping off money.

Mr. Hanks stated at some point, we need to approach the city about having a cul-de-sac installed. They have some right-of-way with the ownership of the park.

Mr. Fennell stated there was a plan to install a turn around.

Mr. Goscicki stated we had a couple of designs. I am meeting with Mr. Moore tomorrow and will discuss this matter with him.

Mr. McKune stated you also need to talk to Mr. Moore about the stormwater pump motors that were authorized two months ago.

Mr. Kaas stated you may want to take one in better condition than the ones you are replacing and spend the money to refurbish it to keep as a spare.

Mr. Fennell stated it costs $20,000 to refurbish them.

C. Manager – Meeting Dates for Fiscal Year 2006

Mr. Fennell stated February 20^th is President’s Day. I do not have a problem meeting on President’s Day.

There was Board consensus to meet on February 20^th.

On MOTION by Mr. Hanks seconded by Mr. Eissler with all in favor the meeting schedule for fiscal year 2006 was approved.

D. Complaints Received/Resolved

Mr. Goscicki stated billing questions were higher in July than in prior months, but there is nothing inordinate.

Mr. Hanks asked are there any odor issues?

Mr. Fennell responded we usually have problems during the summer.

Mr. Goscicki responded the only time we had any significant odor problems was when we were taking units down as part of construction. Otherwise, the plant has been operating well.

SIXTH ORDER OF BUSINESS Supervisor Requests and Audience Comments

There not being any, the next item followed.

SEVENTH ORDER OF BUSINESS Approval of Invoices

Mr. Eissler stated on chemicals for odor control we spent $7,400 during June and July. We usually spend a total of $25,000 a year on odor control chemicals, but just spent a third of that in two months.

Mr. Goscicki stated this is the time of year we add chemicals in the collection system for odor control.

Mr. Eissler stated these chemicals were strictly for the mister. I would like to find out the cost.

Mr. Fennell stated we were actually spending $200,000 a year when we first installed the misters because this was our solution to the odor problem. We have the misters if there is an issue.

Mr. Eissler stated maybe there was a price increase on the chemicals.

Mr. Goscicki stated I will check on that.

Mr. Hanks stated security is running $12,000 a month. Is this the reduced fee?

Mr. Goscicki responded yes, because it was normally running $24,000 a month.

Mr. Hanks asked did the public storage go through a bidding process?

Mr. Goscicki responded I do not know. I will look into it.

Mr. Hanks stated there is an invoice for Shenandoah for lift station and manhole cleaning. Is that ongoing? Was it competitively bid?

Mr. Goscicki responded I will check.

On MOTION by Mr. Eissler seconded by Mr. Hanks with all in favor the General Fund invoices for July, 2005 in the amount of $44,007.92 and the Water and Sewer Fund invoices for July, 2005 in the amount of $1,362,397.01 were approved.

EIGHTH ORDER OF BUSINESS Adjournment

On MOTION by Mr. Fennell seconded by Mr. Hanks the meeting was adjourned at 6:10 p.m.

Glen Hanks Robert Fennell

Secretary President