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, May 17, 2010 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

Susan F. Delegal District Counsel

Jane Early District Engineer

Dan Daly Director of Operations

Kay Woodward District Accountant

Randy Frederick Drainage Supervisor

Ed Stover Water Department

David Macintosh Wastewater Department

Gerrit Bulman CH2M Hill

FIRST ORDER OF BUSINESS Roll Call

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

THIRD ORDER OF BUSINESS Approval of the Minutes of the April 19, 2010 Meeting

Mr. Fennell stated each Board member received a copy of the minutes of the April 19, 2010 meeting and requested any corrections, additions or deletions.

Mr. Daly stated on page three in the middle of the page it says, “Mr. Stover responded we just designed and provided SDC for a six engine ERL.” That comment and the three below it were made by Mr. Johnson and not Mr. Stover.

On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor the minutes of the April 19, 2010 meeting were approved as amended.

Mr. Hanks asked I have one question on terminology. QAPC procedures?

Mr. Bulman responded it is probably QAQC, which is quality assurance.

THIRD ORDER OF BUSINESS Supervisors’ Requests and Audience Comments

There not being any, the next item followed.

FOURTH ORDER OF BUSINESS Amendment #2 (Final) to Work Authorization #51 for Services during Construction on Monitoring Well #3

Mr. Fennell asked can you tell us what this is about.

Mr. Cassel responded yes. Monitoring Well #3 is the well project that the contract portion was originally issued to Layne Christianson for the engineering work. You will remember at one point we had a dropped pipe as well as some other issues, which came up. As we went through with the contractor we basically told the contractor any delays in time would come out of potential claims or potential money he might be entitled to under the contract. He had to cover his lost time, his lost issues as well as my engineering time. This was going on back in September. We have held them to that. They have agreed all the way through the project.

Since we have a contract with the contractor and we have a contract with the engineering firm, by taking the money back from the contractor I have to utilize the dollars which would have normally gone to the contractor and pay the engineering fees. The bottom line is the original estimate for the total contract budget was $2.142 Million and some change. We are coming in at $2.112 and some change. So we are about $30,000 under. The total budget for the project has not changed. It is just the allocation of the budget.

Mr. Fennell asked so who is getting what money?

Mr. Cassel responded CH2M Hill is getting an additional $27,500 under this agreement. The original $72,150 was to carry them theoretically until November. They managed to stretch those dollars all the way until March. This will cover the end of March, April and May closeout of the project on time with the project. There were several things towards the end that delayed the project. When they went to plug and abandoned Monitoring Well #2, when they opened it up, whoever had performed it in the past did not do it in a typical manner.

Mr. Bulman stated no. There was a transition in pipe materials so that they had to flange a continuous piece of pipe, which means they had to elevate the well and they could not put pressure on it. They had to bring in a larger crane to hold the casing in place while they removed the well, which is a little bit of a feat to do out there.

Mr. Daly asked who was the engineer on that project? Do you know?

Mr. Bulman responded I do not know who did the engineering at the time.

Mr. Daly asked was it a different firm? No matter who it was it was signed off.

Mr. Cassel responded the modifications done at the time, for whatever reason, the problem is whatever records we had did not indicate that occurred inside. You cannot tell from the outside of the case.

Mr. Fennell asked is the project now complete with all the punch list?

Mr. Bulman responded no. There are two outstanding punch list items. They are very minor and we are waiting on asbuilts drawings for controls in electrical as well as the final submittal on the operations and maintenance manual. Once we receive those things, which we have already reviewed, it will be complete on the contract.

Mr. Hanks asked is there anything out there that would compromise or affect our ability to approve this work authorization?

Mr. Cassel responded no. The contractor is already fully aware of the dollars which will be removed out of his final change order. He has verbally signed off on that.

Mr. Hanks stated the contractor is agreeable to it.

Mr. Cassel stated yes.

On MOTION by Mr. Hanks seconded Mr. Fennell with all in favor Amendment #2 and final to Work Authorization #51 was approved.

FIFTH ORDER OF BUSINESS Consideration of Bid Award for Replacement of Pumps at Pumps Station #1

Mr. Fennell stated we first started off replacing all of the engines. Is that right?

Mr. Frederick responded the engines are all replaced.

Mr. Fennell stated then after a while we started on the pumps.

Mr. Frederick stated we did the pumps, but we kept two of the original pumps that were in the best condition. Now the pumps we refurbished are starting to have some problems. We had a leak in one. The gear heads are getting kind of noisy when we run the pumps. We want to upgrade the last two existing pumps to what we have with the other existing pumps.

Mr. Daly stated apparently we have two different manufactured pumps.

Mr. Fennell stated I am looking at this tabulation sheet. Are we talking about the same pumps?

Mr. Frederick responded yes.

Ms. Zich asked is that not incredible?

Mr. Fennell asked are they the same manufacturers?

Mr. Frederick responded yes. Farmers is the one we went with to replace the other six and they are half the price. It is unbelievable.

Mr. Fennell asked are we absolutely sure they are the same pumps and there is not a difference in horsepower or something?

Mr. Cassel responded we bid this earlier and we had an issue with the bids so we had to re-bid it. Both bidders were fairly aware that FPI was probably going to be in the neighborhood they ended up coming in at because they were in the same area on the last bid they put in. So they came back in the same area. The other guy just did not come down to meet him.

Mr. Fennell asked does this include installation costs or something?

Mr. Frederick responded it includes everything.

Ms. Zich asked were the other pumps we replaced before similarly around $70,000 each?

Mr. Frederick responded yes. I think they were approximately $75,000.

Mr. Hanks asked looking back at what you have done for the repairs, would you say the repairs were worthwhile and cost effective or should we have considered replacing them all at that time?

Mr. Frederick responded I would have liked to replace them all, but it was not my call back then. I was not in charge when it was done.

Mr. Fennell asked when was it done?

Mr. Frederick responded those two pumps were refurbished in 1999.

Mr. Fennell stated that was 11 years ago.

Mr. Hanks asked how much was spent?

Mr. Frederick responded I am not sure what the cost was.

Mr. Hanks asked was it $20,000?

Mr. Frederick responded no. It was more than that. We just went out to bid to possibly refurbish and it is approximately $30,000 to $35,000.

Mr. Hanks stated it is about half of the price.

Mr. Fennell asked did FPI put in the last pumps?

Mr. Frederick responded yes. They have done six of them.

Mr. Fennell asked how did they do?

Mr. Frederick responded they are good. I have not had any problems with them so far. The gear heads that are on the existing pumps are the original gear heads. They have been rebuilt many times and we cannot get parts for them anymore. It is very hard to get pumps. The new gear heads we have are a lot quieter. They work very well. We have not had any problems with the new pumps at all.

Mr. Fennell stated I cannot believe Moving Water Industries more than doubled the price. Who makes double the price?

Mr. Frederick responded the last time we went out for bids, like Mr. Cassel was saying we had a problem, they were told. We took a bid for refurbishing and replacing to see what the cost comparison was. Each manufacturer was aware of what the other guys bids were at the time.

Mr. Hanks stated Farmers is hungry and Moving Water Industries has enough work apparently.

Mr. Frederick stated I guess so.

Mr. Hanks asked was there any commitments in terms of bid documents or in their responses as to when these parties would be able to take action on this?

Mr. Frederick responded it is going to take eight to ten weeks to get the gear heads. They will start manufacturing the pumps right away. I told them I need to have three pumps operational at all times. When they bring one pump in they will pull that pump, repair the discharge pipe with that pump.

Mr. Hanks asked so are we still going to have our full permitted capacity through the pump station?

Mr. Frederick responded yes. Plus; if there is a storm out there and it is getting anywhere close, we are not going to do anything. We will just leave it as is and take our chances with what we have right now.

Mr. Fennell asked are the two pumps that are there now operating?

Mr. Frederick responded they are operational, but you never know what is going to happen. One is in pretty bad shape. The other one is not super bad.

Mr. Hanks asked are there funds available for this Ms. Woodward?

Ms. Woodward responded yes. These are funds we have been accumulating in our designated list. You have roughly $2.3 Million in designated funds. We are going to pull the money from that and use it to pay for this project.

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the replacement of pumps at Pump Station #1 was awarded to the lowest bidder, Farmers Pump Incorporated.

Mr. Cassel stated you would think if you know what your competitor is going to be bidding at, you should get close to them.

Ms. Zich stated that is why I wanted to make sure the other bid was right and that they did not get together.

Mr. Fennell stated they must be selling to somebody.

Ms. Zich stated somebody who only receives one bid. That is what is scary. What if we would have only received the one bid.

Ms. Delegal stated that has happened.

Mr. Cassel stated that is where you look back at historical documents of what you paid before.

Ms. Zich stated that is why I had asked what we paid for the others; even if it was years ago. At least you know if it is in the ballpark.

SIXTH ORDER OF BUSINESS Distribution of Proposed General Fund Budget for Fiscal Year 2011 and Consideration of Resolution 2010-5 Approving the Budget and Setting the Public Hearing

Ms. Zich stated Ms. Woodward and her staff did an excellent job.

Mr. Fennell stated I think the idea is we are going to keep the fees the same again.

Mr. Cassel stated that is correct.

Mr. Fennell stated there is no increase and there is no decrease.

Ms. Zich asked how often do we replace the carp? It is $12,000 in the budget.

Mr. Frederic responded I am not seeing a lot of weeds out there and I do not want to order a bunch of fish that are not going to have anything to eat.

Mr. Daly stated they all died.

Mr. Cassel stated the weeds died. The carp survived.

Mr. Frederick we pulled eight of them out of one canal. I do not know what happened. They were not full grown yet.

Ms. Zich stated I think we should have them in the budget just in case we need them, but I was just curious.

Mr. Frederick stated I do not want to overstock and not have enough food to feed them.

Mr. Hanks stated I was surprised at our proposed budget for chemicals and how it has gone up $20,000. Is that a 20% increase this year?

Mr. Frederick responded well one year we took over Lake Coral Springs, which added some costs to my budget and then last year I went over budget. We have had eel grass and we have been able to treat it with Aquathol Super K. It comes in a 25 pound pail. We have to order quite a bit of that and I am not sure what the cost is per pound.

Mr. Hanks asked is that eel grass something we are concerned about clogging the pumps?

Mr. Frederick responded it is spreading throughout the District and I do not want to let it get out of control. It might be hard to get rid of. It is almost like the Hydrothol thing we went through years ago and it could start spreading, clogging everything up. The last time we pumped, SWCD had a lot of eel grass come down in their area. It was mounds of it they were pulling out. It could potentially cause pump problems.

Mr. Fennell stated looking at the total revenues in the general fund proposed budget I see a carry forward of $96,842, which brings the total to $2,156,794. This is less than the actual for fiscal year 2009. Was there actually a projected carry forward in those numbers? It does not really add up.

Ms. Woodward responded there was not a projected carry forward. The reason we have the carry forward showing for fiscal year 2011 is if you look at the field expenditures under capital improvements, which is the very last line of the expenditures, we are projecting to spend $289,000 in fiscal year 2011. This represents the potential replacement of both of the LP tanks at pumps stations #1 and #2 for a total cost of $289,000 and in addition to that there were expenditures needed at both of the pump stations for resurfacing asphalt and fixing some things. Because in past years we have not allowed any excess budget drop to the bottom line so that we can accumulate funds, we have $2.3 Million of designated funds we have accumulated over the last two years. If we do in fact go out to do this work that is projected at the bottom of the field expenditures, we will to the extent we have not utilized other lines in the budget, we will be using the excesses there, and should we need to we will draw on some of those funds we accumulated in prior years. That could potentially be the $90,000 figure.

Mr. Fennell stated I guess the number I was not sure of was when I looked at the total revenue numbers at the bottom, it says $2.29 Million. I do not see how that adds up.

Ms. Woodward asked where?

Mr. Hanks responded on the left hand of the page.

Mr. Fennell stated it is like you are missing something. Should that be $2.090 Million?

Ms. Woodward stated I would have to recheck the math on it.

Mr. Daly stated most likely.

Mr. Fennell stated okay. That is the issue. There is a typo there. I am surprised because it is usually done on a spreadsheet.

Ms. Woodward stated this was carried over from a prior schedule and I should have rechecked it. What you look at for assessment revenues is not your total revenue, but the top line, which has been roughly running about the same.

Mr. Fennell stated we are putting in exactly the same amount as in 2009.

Mr. Hanks asked where is the 1% or 2% for property appraiser and revenue collector?

Ms. Woodward responded if you look at the very bottom of the page after you see the field operations in the reserves, down at the bottom of that block it basically indicates we have a net tax levy of $2,030,195. That number represents after all of the discounts have been taken. That 7% represents the assumption that everyone pays in the first month and takes the full 4% discount, 2% for the tax collector and 1% for Ms. Parrish’s office.

Mr. Fennell stated we have been trying to build up the reserves which were depleted by the last hurricane. We are trying to get to a point where there were some additional changes that we wanted to make to the flow of the water. We wanted to interconnect two different canals. Are we anywhere near having that amount of money yet to be able to do that?

Mr. Cassel responded we are working on the grant. Has it been approved yet?

Ms. Early responded out of all the grants submitted only one, which was one of the CSID ones got chosen to go to the next level for potential funding. That was the 1,700 linear foot of 84 inch interconnect. This was the largest one we recommended. I am waiting to hear with regard to the first phase. The other grants we submitted had three different phases of culverts. They said to resubmit next year. We knew we were not going to get funded on everyone. NSID did not get funded on any of theirs. The big one for CSID was chosen. I am just waiting to hear how much they are actually going to give.

Mr. Fennell asked where do we find out about that?

Ms. Early responded hopefully in the next month or two. I originally thought we were going to hear in January whether one was selected. I just heard about three weeks ago that one of our projects was selected. Hopefully in the next month or so we should know something.

Mr. Fennell asked is there any additional things we should do, go talk to anyone or get additional political support?

Ms. Early responded I do not really think you can. I will look into it, but once you submit all of the data.

Mr. Fennell stated It is not like that. I happen to know the City of Coral Springs would use some of the…

Ms. Early stated it is FEMA.

Mr. Fennell asked I know, but if it was not just us asking, if it was us and the city asking, would that help at all?

Ms. Early responded I can send you the email information I have of who we deal with.

Mr. Fennell stated okay.

Ms. Early stated I can send you the contact information. I do not think it is going to make a difference.

Mr. Fennell stated I know we had told Commissioner Gold about this three or four years ago. He has actually brought it up twice in conversations with regard to what we are actually doing about this. He has always taken a high interest in clean waterways. If we needed an additional push, I am sure he would help us out. How much would this actually fund of the project?

Ms. Early responded I think we asked for $2 Million.

Mr. Fennell stated I forget how much we were saying this was. We were saying about $4 Million or something like that.

Ms. Early stated the original entire project was approximately $9 Million to do all of the culverts. Then we broke it down to different phases. Phase one was just this one pipe because we felt that was the most important one. If we could get any of them; that was the one we wanted. I think it was $2.2 Million.

Mr. Cassel stated for the total project. Is that right?

Ms. Early responded yes.

Ms. Woodward asked how much would be the District part of that?

Ms. Early responded I think the funding is 75%.

Mr. Cassel stated it is either 60/40 or 70/30.

Ms. Early stated I think it is 70/30.

Ms. Woodard asked is the total $2 Million?

Mr. Cassel responded a little over $2 Million. Our portion would be 25% to 40% of that.

Ms. Early stated and we are getting great construction prices. We did that estimate last year and it is high.

Mr. Hanks asked any ideas as to how SFWMD would perceive these modifications and move the new numerical standards if we are pursuing a change to the system without any improvements to water quality treatment?

Ms. Early responded I think if we keep the water within the District and we are not pumping out into their system, they could see it as a benefit. In NSID we added a pump so we could pump from the west to the east so we keep as much water within NSID as possible without pumping to the L-36. That was approved right away.

Mr. Cassel stated if we can balance between the east and the west basin versus having to pump on the east basin, let it charge the west basin, it is that much less water we have to discharge.

Mr. Fennell asked is that even possible to do?

Ms. Early responded anything is possible. It just costs money.

Mr. Cassel stated part of what this interconnect does is it connects right out here in this canal, goes across by the school and over into the other side.

Ms. Early stated that is a culvert.

Mr. Fennell stated that is all in the east basin so it just connects two of the canals in the east basin.

Ms. Early stated that is right.

Mr. Fennell stated I was wondering if it was possible to connect the east and west basin.

Ms. Early stated you can. You just have to go to a pump station or something.

Mr. Hanks stated you also have a flood control elevation difference. Do we not Mr. Frederick?

Ms. Early responded that is why NSID would put a pump at the amil gate. It was easy there because we had an amil gate already.

Mr. Hanks stated you do not have another jurisdiction separating the two.

Ms. Early stated and you do not have anything to pump over.

Mr. Hanks stated you have a directional bore underneath with a large diameter pipe and you are able to do it. You may not have all the future capacity, but you can do it.

Ms. Early stated it does help.

Mr. Fennell stated I remember the reports we had looking at the east and west basin and how there is a big difference in the water area. The west basin has much more bigger lakes.

Ms. Early stated it is the same case in NSID. There is a lot more water in the west basin. We topped the east basin and we gained a foot in the east basin in no time at all. We only dropped maybe two-tenths of a foot in the west basin. That is how much water there is.

Mr. Frederick stated in our situation, as far as pumping, I can draw from the east side fast, but the west side takes quite a bit of time. To help that situation I can start to pump and when we get the well at that level we can open the interconnect.

Mr. Hanks stated before we do anything I would take a bit of investigation from our engineers. You are going to be dealing with water quality issues at that point. Water qualities in the east basin do not apply to water qualities in the west basin as well as a couple of other things.

Mr. Fennell stated in looking at the issues we saw with flooding and potential flooding and how to balance out these things. It sounds like it might be this canal interconnect.

Ms. Early stated the 84 inch culvert.

Mr. Fennell stated actually interconnecting the two systems could have a whole lot of benefits.

Mr. Hanks asked counsel, what is the procedure on this? Do we need to accept the budget first and then set the public hearing?

Ms. Delegal responded there is a resolution, which is attached to your back up. It is resolution 2010-5. I think it has been amended. What this resolution does is accepts the proposed budget and sets your public hearing.

Mr. Cassel stated there is actually a supplemental resolution. It will be Resolution 2010-6. There is one in front of you. We moved the date of the public hearing up to June 21, 2010.

On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor Resolution 2010-6, approving the proposed general fund budget for fiscal year 2011 and setting the public hearing for June 21, 2010 at 3:00 p.m., was adopted.

Mr. Fennell asked are they any other corrections to the proposed budget?

Mr. Hanks asked do we have to set the amount?

Mr. Cassel responded a copy of the proposed budget will be attached to the resolution. This will be forwarded to the county.

Ms. Woodward stated looking back at the differential in 2009 the number printed there is actually correct. The reason why it does not add up is because there is a line that accidentally got dropped after the line that says assessment revenues budgeted. What should be inserted between that and interest income is a line which says assessment revenues excess collected. The difference, which is roughly $210,000, represents the amount that was paid in as a result of people paying late and having to forego the discount. Once that line gets added back in it will change no other detail on this page.

Mr. Hanks asked does this have any impact on the proposed budget for fiscal year 2011?

Ms. Woodward responded no. It does not because the assumption we always make on the budget is very conservative. We assume we are going to receive the least amount of money possible and that everyone pays on day one.

Mr. Hanks stated okay. Thank you.

Mr. Fennell asked so this is the proposed budget, but it will be corrected?

Ms. Woodward responded that line will be corrected.

Mr. Fennell asked is there anything else we should correct or that you want to change?

Ms. Woodward responded one item which is new this year and you may not have noticed because it is a small number is under administrative expenditures. There is a line item halfway down called Actuarial Computation – OPEB. There is a new ruling under GASB-34, which indicates health insurance benefits which may potentially be provided to retirees require actuarial computation. This happens to be the year CSID is required to make this computation. You have to make it once every few years to determine if there is any potential liability to the District.

Mr. Fennell stated this should get us to a good point. I see the reserves will go up again next year; even though we just spent $50,000 on pumps.

Mr. Hanks stated one of my biggest dilemmas is for Mr. Zilmer to again look into keeping down our insurance costs.

Mr. Daly stated we are actually meeting with our representatives tomorrow.

Mr. Hanks asked so what do we have next?

Mr. Fennell responded we approve this as the preliminary budget.

On MOTION by Mr. Fennell seconded by Ms. Zich with all in favor the preliminary budget was approved.

SEVENTH ORDER OF BUSINESS Staff Reports

A. Manager

· Consideration of Filter Piggyback

Mr. Cassel stated in one of our filter beds we have some cracked tile which is allowing the filter media to get into the pipes. We suspected and knew we had some cracks and some issues, but when we opened up one of the pipes during the construction to do an interconnect Mr. Stover noticed we have filter material in the pipes.

Mr. Hanks stated ‘definitely’ being the key word.

Mr. Cassel stated yes, definitely above suspected. It was definitely time to address the filter bed. We looked at bidding it out ourselves. We also looked at different issues. We have become a member of a cooperation that goes out together and bids different projects between other municipalities. Mr. Stover was able to find the City of Sunrise had done a filter system and found the low contractor there was willing to extend pricing and structure such that we can meet the criteria of having been publicly bid and get the best price at the same time.

Mr. Hanks asked does this meet the requirements for the piggyback?

Ms. Delegal responded yes. It does.

Mr. Fennell asked what is the urgency?

Mr. Stover responded Filter #9 is a 16 by 16 filter. It is one of our big ones.

Mr. Daly stated you all walked passed it last month.

Mr. Stover stated there is a big hole where the tiles have come out. All of the media has fallen into that.

Mr. Cassel stated that is one of the reasons why when we were out there last month that filter bed is offline.

Mr. Stover stated we took it offline at the end of March.

Mr. Hanks asked so do those filter bricks sit on top of these half pipes with channels?

Mr. Cassel responded no. They are buried underneath.

Mr. Stover stated all of the black media you see over there, underneath that is garnet and different types of stones. Underneath of that is three or four layers of sand. Then you have that actual under drain there. When the under drain cracks or breaks, and you can see we have some tiles we show that we pulled out of there, all of that will fall down into there and of course it goes into the outflow.

Mr. Fennell asked is any work being done now or are you waiting on us?

Mr. Stover stated we are waiting for you.

Mr. Hanks asked is this system substantially similar?

Mr. Stover responded they are a lot smaller, but they have a bank of six. We have a bank of three and it is only Filter #9 that is damaged.

Mr. Fennell stated we obviously have to do this, but we were talking about how much more work we were going to do going forward in keeping these things going; even when we get in there and do water filtration. What effect does this have on that decision and should we be doing more if that is our plan?

Mr. Cassel responded this is the larger filters and we are going to be keeping as we are repairing Plant #3, which is our larger plant. That is going to be the section of the total treatment system on the lime softening that we are going to keep in service the longest. We will be taking out one, two and three in the smaller plants as the nanofiltration system comes on board, but we will keep Plant #3 as the last one we would decommission in the sequencing. Repairs to this at this time are good insurance; if we have an issue with the nanofiltration plant, that plant can come online and take care of the lion’s share of what we need to do.

Mr. Hanks asked what is the continued lifespan for the large lime softening plant?

Mr. Cassel responded there is a ten year cycle for changing the filter media. With doing the repairs we are doing to the main bridge and motor thing we probably have what Mr. Stover?

Mr. Stover responded we will get five or six years out of it. We are going to have a new aeration basin. We are going to do some work on the aeration trays. All of the struts underneath that have been rotted out will be replaced. The walkway will be replaced and then the rails will be put back on. The weir that are rusting out in the top three feet of the ring there is going to be sandblasted clean and painted.

Mr. Hanks asked so this is an approximate $100,000 of repairs which is expected to keep that section of the plant as it relates to the filter going for another how many years?

Mr. Cassel responded if we keep the filter ten years, it will be good for at least ten years.

Mr. Hanks asked what sort of motion do we need on this?

Ms. Delegal responded I just want to ask one question for clarification. This a unit pricing contract for the City of Sunrise, is that right? So are we going to be basing our relationship on the same unit pricing that is in the contract between the City of Sunrise and this contractor?

Mr. Stover responded that is correct. It is just blown up a little bit because our filters are a little bigger.

Mr. Cassel stated we have the total price of proposal of what the bottom line numbers are.

Mr. Stover stated they came back with a bid of $136,000, $137,000. I called them and we renegotiated. Now it is technically $127,570.

Ms. Delegal asked is this consistent with the unit pricing with the City of Sunrise?

Mr. Stover responded it is consistent with the unity pricing of Sunrise.

Ms. Delegal stated what we will actually do Mr. Fennell is enter into an agreement with the same contractor whereby we would just recite the fact we are using the statute which allows us to piggyback and we would attach the Sunrise contract, incorporate all of the various provisions we are going to use and make a few changes such as contracting with CSID. We will tailor it. It will be a short contract which will incorporate the Sunrise contract. If you want to do this, you should authorize the preparation of an agreement as I have stated with All State Filter Rehab. It is an individual doing business as All State Filter Rehab, Mr. Denis C. Kull.

On MOTION by Mr. Hanks seconded by Ms. Zich staff was authorized to prepare an agreement with All State Filter Rehab using the City of Sunrise’s award of contract as a basis for preparation for $127,570.

Mr. Fennell asked do I need to sign this?

Mr. Cassel responded there will be a separate signature.

Mr. Fennell asked so we do not have to re-bid this?

Mr. Cassel responded no.

Mr. Fennell stated we have approved the bid.

Ms. Delegal stated you have piggybacked on their project.

Mr. Hanks stated Sunrise has already gone ahead and put that out. They were the responsive low bidder.

Ms. Delegal stated it has already been competitively awarded and you are entitled to piggyback on to that.

Ms. Zich asked are the funds there?

Ms. Woodward responded yes. The funds are there.

Ms. Zich stated this is repair and replacement.

Ms. Woodward stated that is right. We have in our renewal and replacement fund, even though the original engineer’s report indicated we should have $1 Million, we actually have $2 Million in that account; partly in anticipation of the fact we were not certain of what the final deadlines would be for completion of the nanoplant and Plant F.

Mr. Fennell asked how many gallons per day is this facility capable of?

Mr. Stover responded 7.2 MGD. We can max it out at 7.2 MGD.

Mr. Fennell stated that is pretty good.

Mr. Stover stated we are geared to do 5.5 MGD with the tanks and the plant.

Mr. Fennell stated so if the nanofiltration plant headed for disaster someday for something, we could actually get by on this.

Mr. Stover asked are you talking about the lime softener?

Mr. Fennell responded yes.

Mr. Stover stated it is well worth keeping this big plant operating.

Mr. Fennell stated it is an inexpensive insurance policy.

Mr. Hanks stated we are required by State Law to maintain certain amount of redundancy here within the plant in terms of excess capacity.

Mr. Daly stated it is either build a plant or build a new storage container.

Mr. Fennell stated well we were trying to think about what to do with the old facilities. There are other facilities there. What are their capabilities?

Mr. Cassel responded the two smaller plants will match the capacity of Plant #3.

Mr. Stover stated Plant #3 has maximum of about 2,800 to 3,000 gallons a minute. The two smaller plants combined are about 2,800 gallons a minute.

Mr. Hanks stated and that translates to roughly 7 MGD as a combined total.

Mr. Cassel stated this is why we are saying Plant #1 is the oldest with the filters that are in the worst case scenario. This is why if you take that out of service first as you decommission, then you would decommission Plant # 2 and you would keep Plant #3 as the last one; when you get to the point of wanting to decommission it completely.

Mr. Fennell asked is there anything else we can do with those two plants?

Mr. Stover responded I can do some investigation into what some of the other plants have done with their old plants, but a lot of them have not been taken care of. When Margate did their renovation they tore it down and build it up again. They went from an 8 Million gallon clarifier to a 13 Million gallon clarifier. They tore everything down, got rid of all the metal and built it up again from scratch.

· Monthly Water & Sewer Charts

Mr. Fennell asked where is the intrusion from the water coming from and do we know how much?

Mr. Cassel responded we are still in the process of finalizing that. We gave Mr. Hanks some additional flow data last week. We are still in the process of making sure that before we go down some rabbit hole that creates a bunch of expense with no benefit, we make sure we are chasing the right rabbit down the right hole. We are doing this with additional field observations and information we have given to Mr. Hanks as well as we have sent it to Mr. Schwarz at CH2M Hill to look at as part of their I&I report information.

Mr. Fennell asked are you actually making any progress in figuring out how much it is?

Mr. Hanks asked how much infiltration?

Mr. Fennell responded yes. We were actually going backwards other than what we have coming into the plant. It was less accurate the longer we went.

Mr. Hanks asked what, the infiltration?

Mr. Fennell responded our ability to actually figure out what we have.

Mr. Cassel stated part of the issue is depending on some of the numbers, and Mr. Hanks is aware of this as well as anybody, depending on the numbers you start with, if you are using run times, but your run times are not really reflective of the gallons you are pumping because the pump is inefficient because of either the impellor, blow-by or things like that, you are going to get inaccurate numbers in where you think it might be. You think it is in area A that your influence is coming from; in reality you are looking at meter run times for electricity, but your pumps may be inefficient. You think you are pumping 450 gallons a minute, but you are really pumping 200 gallons a minute because of blow-by inefficiency.

Mr. Fennell stated that is where we were a couple of months ago.

Mr. Cassel stated we have done some field testing. We have a Doppler meter we are looking at. We are pulling that information to gather, basing it against run times and pump efficiencies, seeing what our head pressures are that we are pushing. Depending on the head pressure, your pump efficiency can decrease so again you think you are pumping 400 gallons and you are only pumping 300 gallons. All of those have to be looked at and accounted for as far as what we really think in each section. What we have taken is what appear to be the worst areas first. We are trying to make sure that if those are, then we chase it, but if they are not, the data we put in our analysis is faulty data going in. You are chasing something you should not be chasing. So you have to verify the fact of what you thought was correct data, is in fact the correct data. That is what we are solving through those issues right now.

Mr. Hanks stated I think what one of the items we are looking at or, I should say Mr. Schwarz is looking at, is whether or not the issue is your dry season type of infiltration that is the main issue or is it you are immediately following a storm issue, which can give you indications as to where to look for the problem. It is just like with a car. Does it give you trouble starting up cold or starting up hot?

Mr. Fennell asked how much does it take to actually measure the real flow out of each one of these stations?

Mr. Hanks asked with a Doppler meter?

Mr. Fennell responded it sounds like part of our problem is we really do not know the flows other than what actually comes into the plant.

Mr. Hanks stated I think we are getting the flows fairly accurate on those Doppler meters now.

Mr. Cassel stated we are.

Mr. Hanks stated what was happening before was they were basing it off of run times, which are not accurate at all.

Mr. Fennell asked what does it cost us to actually get real good data all the time? You were hinting that we may not actually know where the problem is at.

Mr. Hanks responded knowing we have a problem at the lift station is defining it to a particular region. Identifying exactly where along those sewer lines the break is, that is where we are going to be taking a separate issue.

Mr. Cassel stated some of the mainlines have been lined already, but the laterals have not. The service connections, which go up to the houses have not. This is where we are looking at if it is a rain type event when groundwater comes up. In other words, are our flows in a dry season when the groundwater is low not an issue? We are trying to determine what our canal elevation is, our invert elevations, to say when we are at, say level 8, we get the peaks, when we are at 7.5 we do not get the peaks. Then you start looking at which connections are above that or below that elevation and start concentrating there.

As a back up we have also looked into several different companies that can line anything from ¾ inch water pipes to 36 inch storm drain pipes. There are entities out there who can do the laterals as well as look at the mains. We are looking at different companies like that to see if they also do the investigation work. When we get to a point we are already looking at potential suppliers to be able to come in, narrow down and correct our issue even further.

Mr. Fennell asked do we need meters in every lift station?

Mr. Hanks responded these are portable. You do not need to have data 24 hours a day, 7 days a week, 365 days a year. Ms. Woodward can address each section as it comes along. (At the June 21, 2010 meeting Mr. Hanks clarified this statement was in reference to the financial aspect) You do not need to be spending. What do each one of those meters cost?

Mr. Daly responded they cost between $12,000 and $18,000.

Mr. Fennell stated there must be mechanical flow meters that can actually be put into these things.

Mr. Cassel stated the issue with wastewater mechanical flow meters is they create other issues such as clogs and accumulation of debris.

Mr. Hanks stated this is why you go with the Doppler meters; just like different ways of measuring water flow, depending on what volumes you are talking about.

Mr. Fennell asked so when will we know?

Mr. Cassel responded we are going to keep pushing on it. We should have a better handle on which area of a section we want to take a further look at within the next 30 to 60 days.

Mr. Fennell asked are the flow meters actually giving good results? Can you correlate it to something?

Mr. Cassel responded that is what we are looking at now; the last batch of data we got during a rain event and during a dry event. We are now being able to compare the two systems.

Mr. Daly stated it is pretty much between lift stations one through eight. There is one in there that is probably a decent one. He can tell that also by what the electric bill is every month versus another. There is one area I found this is happening to. We want to go in with cameras and see where the break is and things like that. We may never catch them all.

Mr. Hanks stated you never will catch them all. The trick is to identify whether the volume of flow is causing a health risk. Are we at risk during certain rainfall events for exceeding the pumping capacity of the lift station and risking overflow into our canal system? This is one issue. Another issue is whether the quantity of flow coming through in excess of our baseline flows. Is this costing us as a District more than it would cost us to fix the problem? How much does it cost us to treat that amount of water and then take a look at how much the repairs will be? The solution may be to shift more of our stormwater burden over to the west basin and help keep the east basin lower. This may be a solution.

Mr. Fennell stated it would be an interesting solution.

Mr. Daly stated it would be easy to get the money for that since it is the general fund.

Mr. Hanks stated we may want to consider, after we get this report, put out a request for bids for investigation.

Mr. Cassel stated pilot projects scenario.

Mr. Hanks stated yes.

Mr. Fennell stated let us first get the right data.

Mr. Bulman asked has this additional data not been provided to Mr. Schwarz yet?

Mr. Cassel responded I think we sent him something…

Mr. Daly stated last Tuesday or Wednesday.

Mr. Cassel stated yes. Last Tuesday he received additional information from Mr. Crowell.

· Utility Billing Work Orders

Mr. Cassel stated they are tracking about where they normally did this time of the year.

Mr. Hanks stated you are off over March. What is happening there?

Mr. Daly responded I do not know.

Mr. Cassel stated we are lower than last year.

Mr. Daly stated it is pretty much more calls. It turns out there were leaking toilets and things like that where we had to send our crew out to do bypass.

Mr. Cassel stated mis-reads are down from 11 this time last year to 3.

Mr. Hanks stated okay. Good.

· Discussion of NatureScape and Broward county Incentives

Mr. Cassel stated this is a basic discussion of the NatureScape conservation water program that we have been involved in for several years. At this point in time no action is required. We have participated in it and we do get some credit from SFWMD as far as a conservation component in our permits. The big takeaway here is the potential expense to remain in this program as we go further. If you look down you will see the total is $20,000.

Ms. Woodward asked is that an annual amount?

Mr. Cassel responded yes. That is the annual amount. Mr. Daly, is this in the budget as an item?

Mr. Daly responded it is not because this budget was prepared before we got this, but I do not know this is cast in stone. This will probably hold the same for every one of the communities, districts and cities on there. Their budgets are being prepared now. This is something which is proposed. A lot of them have already been passed so I am sure this will probably take effect in the 2012 budget.

Mr. Hanks stated my one caution is that in the back up materials to this water conservation program, the resolution that is in there, they are referencing a deduction in per capita of water use as much as 28,000 gallons per year.

Mr. Fennell asked per capita?

Mr. Hanks responded yes. That is big time mistake. It means every man, woman and child in the county would be basically using 23 gallons of water a day. If you figure how many times you go to the bathroom and you flush the toilet at 1.8 gallons per flush, you have basically used it up. Forget about showering, bathing, cooking and laundry.

Mr. Daly stated we tell our customers it is an average of 100 gallons per person, per day, per household; so 3,000 basically per person, per month.

Mr. Hanks stated I put in a call to Dr. Jurado to find out where that number came from.

Mr. Daly stated the other side of the coin would be there are districts and cities such as us who have bonds out there and their rates and their volume is supposed to pay for their debt service. Now when you have a third of it left, what do you do?

Mr. Hanks responded I just wanted to bring it to everyone’s attention that is not an achievable number. If you are extremely eco-conscious, forgot to shower everyday and did not use your dishes, you might be able to achieve that. Practically speaking, that is not an achievable number.

Mr. Fennell asked this is a ridiculous number, but even so; given the amount of water we have in Florida and the fact 99% of it goes out into the ocean, how would this actually do any good?

Mr. Hanks responded what it will do good for us is if the water that actually goes out to the ocean surface water, it would require a more extensive treatment than what we have for use of the Biscayne Aquifer.

Mr. Fennell asked which eventually drifts down to where?

Mr. Hanks responded eventually they are also benefiting from the filtering features of 60 feet of limestone. From that perspective, is the $20,000 in conservation, that is based on how much citizens are utilizing the program as well. What is it; $10,000 base fee cost?

Mr. Cassel responded yes.

Mr. Fennell stated it looks to me like the cost of incentives are about $500,000 out of the $868,000 so there is another roughly $370,000 that are going to overhead, administration, Broward County consulting assistance full-time staff person.

Mr. Daly stated and that is just to start.

Mr. Fennell stated I do not know efficient this thing is.

Mr. Daly stated I kind of just glanced through it and it is mostly toilets and those sorts of things. Which town do you think is going to benefit the most by replacing toilets; a newer area of town or someplace old? This is a slew of cities up and down the cost here.

Mr. Fennell asked so who actually gets these incentives and who actually gets the money?

Mr. Daly responded my point is who would actually want to cash in on them and that would be the older eight gallon a flush toilets in some of the older Pompano areas.

Mr. Hanks stated or here too.

Mr. Fennell stated but you cannot buy the old ones anymore if you have to replace it.

Mr. Cassel stated people can rehab the internal parts out of them.

Mr. Fennell asked do the new toilets actually save water? Do you not have to flush them twice as often?

Mr. Cassel responded it depends. In certain brands a one flush works and in other brands it will take two or three flushes to clear. The bottom line is you might end up using the same amount of water depending on the brand of water closet you purchase.

Mr. Hanks stated the translation is you get what you pay for.

Mr. Cassel stated even some of the higher ones do not flush that well. It is a particular brand and design of flow.

Mr. Hanks stated they are getting better as the years progress.

Ms. Zich stated maybe we should let our people know which ones are the best ones to get.

Mr. Daly stated we do not know yet. We would have to change everybody’s. Europe has had, for years, two buttons on their toilets; one for big flushes and one for little flushes. They are now selling them at Sam’s Club for $158.

Mr. Bulman asked did you say 28,000 gallons per capita?

Mr. Hanks responded we are talking approximately 78 gallons per day.

Mr. Bulman asked not a reduction, but rather a use of 78?

Mr. Hanks responded no. It says reduction.

Mr. Bulman stated so you would be going from an average of 100 gallons to 78 gallons.

Mr. Hanks stated no.

Mr. Cassel stated a reduction of 78 gallons. Reduce it by 78 gallons.

Mr. Hanks stated somewhere along the line, some politician got it mixed up.

Mr. Bulman stated rather than a reduction to, it is a reduction of.

Mr. Hanks stated yes. I am sure that is what the case is.

Mr. Fennell asked so what do we have to do here?

Mr. Cassel responded nothing. It is just an ‘FYI’ at this point in time. Later as it comes through we will come back and cycle for your action or non action at a later date.

Mr. Fennell asked is there anything else?

Mr. Cassel responded that is it under staff reports. The other information I will relay to you underneath the engineer’s report.

B. Attorney

Ms. Delegal stated the only thing I wanted to advise you of, I know at the last meeting Mr. Lyles reviewed a couple of bills; one potential constitutional amendment. There were two of them I noticed in the minutes. One of them had to do with public notices being able to post on a website for advertisements and publishing notices, which would have probably been a good thing, but that died in committee. It did not pass, nor did the potential constitutional amendment which would have required members of boards with the power to levy ad valorem taxes to be elected. That also died in committee. My review shows no bills of any affect on this body that were passed by the legislature this year.

Mr. Fennell asked is there anything else?

Ms. Delegal responded that is it.

Mr. Fennell stated I think the idea to post things on a website is a good one. I think we should go ahead and do it anyway.

Mr. Cassel stated we post the meeting dates on there already.

Mr. Daly stated just as long as that did not negate from the actual letter of the law, which says it has to be published in the newspaper.

Ms. Delegal stated the bill would have allowed you to do that as a substitution. You can still do that, but you still must go through your normal newspaper notices like you always have.

Mr. Daly asked supposing it does not make it to the website, but it makes it to the paper; what happens? Are we on the hook for anything?

Mr. Cassel responded no.

Ms. Delegal stated as long as you have met your newspaper requirements.

Mr. Daly stated I can easily put that on.

Mr. Fennell stated sometimes we bid things out and we do not get many bids back. If it became known that we were doing this, we might actually see more responses or it might be easier for people to get information.

Mr. Cassel stated one of the things we do a lot of times is staff and/or with consultation from the engineering firm or from my background of contacts with others, we know of different companies out there which do the work; so besides the advertisements a good number of times we have contacted these companies directly letting them know a bid is coming out. It helps as far as getting people to come in and at least look at the bids to decide whether they want to bid on it so you do not get stuck with a one bid scenario. We have been fairly diligent by staff trying to make sure we get at least two or three competent bidders that are actually going to look at the document and bid for us.

Mr. Fennell stated it may speed things up too. Email bids there and if you have to get it there by post or by hand delivery, it could be a couple of days, or if you have revisions. You might be doing that now. It just may be a more efficient way of doing things.

Mr. Cassel stated addendums after the bid has started is sent out via email to those who came in and signed in for their package.

Mr. Hanks stated the one thing I would caution on is our potential pitfall if you were to accept bids electronically. That is opening up a whole can of worms. Any kind of public notices that we put in for engineering services always have to be delivered in hard copy. There is no debate because they stamp it in at the clerk’s office this way there is no argument for the email server going down.

Mr. Bulman stated there was an article this month in the Florida Water Resources Journal written by a contractor about how bids can be made more attractive in case you are interested.

Mr. Hanks asked did it have to do with email?

Mr. Bulman responded no, but it did have suggestions about providing lists of vendors and suppliers.

Ms. Woodward asked we are not saying we are going to be supplying the bid documents by email or on the website?

Mr. Cassel responded no.

Ms. Woodward stated my problem is if we are required by law now to do everything on paper and if a guy goes to the paper and gets his information five days after the guy who goes onto your website, we now have a problem with the fact that we did not provide things equally to everyone.

Mr. Daly stated that is exactly what I was trying to bring up earlier.

Ms. Woodward until the law changes I would say do it the way you were doing it.

Mr. Cassel stated the paper would precede anything you would put on your website. The website would just be a back up. If the notice runs on Friday the 15^th, you put it on the website on the following Monday as a courtesy. If you wanted to put it on the website, you would always put it at least one business day after it ran in the paper. What the original proposed law was; you could do either the newspaper or your website. Since the law did not change we still go with the newspaper. It would just be a courtesy if we wanted to put it on the website, but my recommendation would be to put it on one business day after.

C. Engineer

· Project Status Report

Mr. Cassel stated Mr. Johnson was going to be back, but he had a death in his family and could not make it back in town. This is a higher level flow chart of the schedule review of the project that you can look at and review.

Mr. Fennell asked is the monitoring well actually operating?

Mr. Bulman responded yes.

Mr. Fennell stated so we have issues to clean up there, but we have to keep that going.

Mr. Fennell asked what about Plant F?

Mr. Cassel responded we had a meeting two or three Mondays ago with the contractor, the District, CH2M Hill, Mr. Lyles and the attorney for the contractor. We discussed the design of Plant F, the welds of Plant F and some of the issues. As you come down to the bottom line of it, it was concluded the steel itself is within the structural integrity of the design criteria. The issue came as part of the welds in that the welds would be the weak point. We decided as a District it became evident it was necessary for the District to do its own third party testing, in case we get into a brouhaha with the contractor, to confirm or deny if the welds are good or not good.

We contracted with a radiological testing lab that came out and did a number of x-rays of the welds in Plant F which are defective. The contractor was verbally notified last Tuesday that he has issues with the welds. They were told verbally in a meeting I had with them that they have to come up with a solution and CH2M Hill has finally received from the testing lab their report. They are putting a letter together to the contractor in written format stating that according to the criteria the welds are defective and asking them what they are going to do to make it right.

Mr. Fennell asked are they repairable?

Mr. Cassel responded my understanding is they are repairable. You have to set up a criteria in a process for how you are going to open the welds up, repair them, make sure they are good welds and go forward.

Mr. Fennell asked why would the same problem not happen again?

Mr. Cassel responded the contractor should have done some non destructive testing from the beginning; either radiological or ultrasound testing according the contracts. They chose not to. Their welding inspector said the welds were good by a visual, but when you do the radiological testing the welds are actually defective.

Mr. Fennell asked what percentage of the welds is it?

Mr. Cassel responded out of 37 feet of horizontal weld only 7 feet were good.

Mr. Fennell stated that is very significant.

Mr. Cassel stated yes. I was in the trailer the Friday before last looking at the x-rays and it is evident when you see the two pieces of steel lying side by side, you will see the two pieces of steel with a gap. When a weld is good you do not see a gap or a line in the x-ray. All there would be are hairline openings or larger openings that when they took the x-rays you could see the fact it does not meet the standards of a full penetration weld. One of the first questions asked at the meeting on Tuesday was what was CH2M Hill’s solution to repair it. It is not CH2M Hills design of the plant. CH2M Hill did not design the plant. The contractor’s engineer designed the plant. I told the contractor at the meeting that it is his engineer’s problem to figure out and fix according to his contract specifications if there is any defective well. They have to come up with a program and parameters of how to repair it as well as what repairs are necessary to make it correct.

Mr. Hanks asked do we still have the opportunity to go review their proposed fix and accept it or reject it?

Mr. Cassel responded yes. Their proposed fix will be reviewed by our engineering firm to confirm or deny that it should fix it.

Mr. Fennell stated well that was just on a sample. We have 1,000 feet of welds, is that right?

Mr. Cassel responded yes. We did about 60 to 70 feet of vertical welds and a good section of the vertical welds were also defective. Some of the girder splice welds, when you look at the x-ray, you can see there is weld, but there is not penetration on half of the steel. There is material there, but it did not penetrate. It is hard to see from the photographs the defect of the weld per se.

Mr. Fennell asked was this a random sample?

Mr. Cassel responded we told the RT guy to look at the welds on the north side of the tank. They did a section of vertical and horizontal welds. Then to get a better feel for how prevalent this is we told them to do a random spot on the other side of the tank and do another section of x-rays, which they did. Consistently there are significant issues with the integrity of the welds.

Additionally while they were onsite, to save on mobilization costs and knowing we had some issues with Digester #1, which Intrastate is supposed to be working on a repair for us, I had them do three shots on Digester Tank #1. This is the project which was completed about a year ago. There are issues with those welds as well.

Mr. Fennell asked are these cosmetic issues or are these real integrity strength issues?

Mr. Cassel responded they are strength issues. They are structural issues. The steel is designed for 36,000 PSI. The PSI that is in the design calculations is about 24,000 to 28,000. This takes into the fact that if it is a full penetration weld that is fused properly, the weld is going to be as strong as the steel adjacent to it. When you have welds which are not full penetration to the right quality, those become your weak points.

Mr. Fennell asked does the contractor agree to the severity of this issue? Does he understand or is he still not convinced?

Mr. Cassel responded they really did not say anything back. They are probably going to wait until they get the formal written information of rejection of their wells. What is interesting is their welding inspector has come out and is now signing off on the date he supposedly visually inspected the welds. Some of the welds in the pipe were ones which were visually inspected and we had the x-ray guys do; they are defective as well.

Mr. Hanks stated so some of these which were indicated you actually had the RT people take shots of the ones which were visually approved and they do not meet the specifications.

Mr. Cassel stated that is correct. The reason I went on a limb for the District was because I wanted to make sure if we got into this, as to who needs to repair what and why it needs to be repaired, I do not have engineering company A over here and engineering company B over here fighting. I want for the District to say it is either good or it is bad. This is why the District contracted directly with the RT company. In order to do it we did a straight pass through, through CH2M Hill, to get them on board.

Mr. Hanks stated it is no different than if you were doing a paving job and you go out there to collect a sample of the limerock base.

Mr. Cassel stated or doing a core sample split on a concrete pour. It is the same scenario; just independent verification by the owner.

Mr. Fennell asked what is the diameter of this thing?

Mr. Cassel responded I believe it is a total of 135 feet in diameter.

Mr. Fennell asked do all the welds need to be redone?

Mr. Cassel responded they need to be examined and determined as to which ones are good and which ones are not. From our perspective it is clearly a contractor issue. There are parameters within the contract that they are supposed to do certain testing and certain inspections regardless of whether we ask for them or an individual overlooking the project is asking for reports. They are supposed to do certain things according to plans and specifications.

Mr. Fennell stated but you have also shown, at least in several cases, where the individual inspection was in suspicion.

Mr. Cassel stated that is correct.

Mr. Fennell stated that cannot be relied upon so now they have to step up to some kind of continuous x-ray. So what are the next steps? We obviously have to send them a letter. Is our legal department going to get heavily involved in this?

Mr. Cassel responded yes.

Mr. Fennell stated we are essentially asking for a major re-work here.

Mr. Cassel stated in order to track it I had Mr. Lyles set up a separate billable account for issues on this so the invoice comes in for his time spent on this type of issue so we can track it in the case we do get into any litigation we will have a good handle on the amount of time, money and legal fees that were expended upon by enforcing the contract.

Mr. Hanks asked are the engineers also following the same procedure?

Mr. Cassel responded the engineers are also keeping track of every hour and every issue they do.

Ms. Woodward asked are they going to be issuing that on a separate invoice?

Mr. Cassel responded no. They are tracking it. There will be a separate invoice coming in for the RT time.

Ms. Woodward stated the issue to me is it sounds like these are costs which can be run through the bond construction. As a result of that, in order for us to pay them and get reimbursed or have the payments made directly out of the bond funds, we need to do it by requisition. My preference is that we do not have apples and oranges on an invoice that I place in for requisition. I want a pure invoice which is literally just for bond work if it is possible.

Mr. Cassel stated yes. The invoice for the RT company will be coming through separate. The invoice for CH2M Hill’s time to evaluate what they have put together from the RT is coming in as a separate invoice from CH2M Hill.

Ms. Woodward stated I think it is what we really need to do. This way we have a pure trail.

Mr. Fennell asked do you have such thing as a project number you can assign to these things or subproject number?

Ms. Woodward responded I can track it. That is not the issue. The issue is to make sure it is not commingled on an other invoice with other types of items which are being paid through operational cash or paid through some other source.

Mr. Cassel stated I will get with you in the morning. Because this is also separate from the engineering services during construction for the project. This is separate so it is all coming in totally separate from their normal billing situation.

Mr. Fennell asked do we need to allocate additional funds to you for any additional inspections?

Mr. Cassel responded no. At this time we have spent approximately $12,000 on the RT time thus far.

Mr. Fennell asked will this be assigned to the construction project?

Mr. Cassel responded it will come out of bond funds.

Ms. Woodward stated this is all part of the project cost.

Mr. Cassel stated that is where we are at this point in time.

Mr. Fennell stated it is sounding like the only satisfactory thing is they are going to have to redo all of the welds and they are going to have to be all x-rayed. I do not what kind of cost it will be.

Mr. Cassel stated it comes up to what their design engineer believes is an appropriate fix for the issue.

Mr. Fennell stated but even so we obviously cannot take this inspector’s word. We need a way of verifying this.

Mr. Hanks asked do we need to notify Intrastate that the visual inspections which have been represented to us as passed have been determined to be faulty by an independent company>

Mr. Cassel responded I believe I conveyed that to them on Tuesday and it will also be part of the letter by CH2M Hill from us as the owner’s representative.

Ms. Delegal stated if anything, I am going to encourage good documentation of everything going forward; complete details.

Mr. Fennell asked what kind of copy should we be sending to you?

Mr. Cassel responded we send Mr. Lyles’ office copies of everyone of the letters we have sent to Intrastate in the past.

Ms. Delegal stated everything that gets conveyed to them orally should be confirmed in writing to create this record we will need to have.

Mr. Fennell stated I do not understand what it will take to re-weld the whole thing. Does anybody have an idea?

Mr. Cassel responded I am not sure what the timeframe is. My understanding is there is some kind of arc something or other where they go back over the weld and they basically arc burnout the existing weld and re-weld it. This will have to be done on the inside and on the outside.

Mr. Hanks responded if you have a solution like that, I would like to have the input from CH2M Hill’s welding specialist because if you start reheating that metal, you are changing the characteristics of that metal. You can make it more brittle. You can make it more ductile.

Mr. Cassel stated that is just one of the things I heard they can potentially do. Again, it is back to their engineer to come up with a solution which fits the criteria that makes the tank design fit what we need it to do.

Mr. Fennell stated the tank was supposed to be ready last month. It is obviously not ready this month. I am betting it will not be for several months. How do we stand as far as being able to handle our system out there? Will we be able to keep going?

Mr. Macintosh responded yes we should be able to keep going.

Mr. Fennell stated that is good to know so we can make sure this gets done right.

Mr. Cassel stated one other issue they are addressing in Plant F, and I have not seen the repair of it yet, I do not remember if when you were all out there we talked about the topping in the inner tank.

Mr. Fennell asked do you mean the cement?

Mr. Cassel responded yes.

Mr. Hanks asked the grout?

Mr. Cassel responded the grout. There were a lot of hollow spaces.

Mr. Hanks stated yes. I remember that.

Mr. Cassel stated about 50% of it did not bond so they had to remove it all and they are going to be reworking that. It is another issue as to their oversight of their project. It does not really hold up.

Mr. Fennell asked who is their engineer?

Mr. Cassel responded he is over on the west coast.

Mr. Fennell asked did you ever get to talk to him?

Mr. Cassel responded he was at the meeting three Mondays ago. He was in town.

Mr. Fennell asked what did he have to say.

Mr. Cassel responded basically the steel designs is where we came down to. If there is anything there is an issue on, it is the welds. If the welds are weak or not complete, then that is the weak point in the design. The steel itself should meet the criteria; with the weak point being the welds. This is why we focused in on getting the diagnostic testing of the welds to make sure whether they were good or not.

Mr. Fennell asked so when do we learn more about this? What is the next step?

Mr. Cassel responded the next step is the letter which goes out to them and their response.

Mr. Fennell asked and you said the letter will go out this week?

Mr. Cassel responded the letter should be out this week. If it were some other contractors I would expect a response within a few days. Their response time seems to be extremely lagging so I do not expect a response for at least two weeks.

Mr. Stover asked do we have to double monitor them on their construction over here at the nanoplant now?

Mr. Cassel responded they are two different scenarios. The nanoplant was designed by CH2M Hill and by their specifications. They are inspecting it and making sure it meets the criteria; their design, their specifications, their plans, the steel, the notes, the placement, all of that was done by CH2M Hill on the nanoplant.

Mr. Stover stated whereas on Plant F it was just that we needed a 2.4 Million gallon per day treatment plant.

Mr. Cassel stated a package plan designed by the contractor, engineer or package plant supplier to meet these criteria. Even in that criteria and the design criteria in the eight volumes of improvements there were specifications as to types of steel, types of welding, full penetration weld, types of coatings that were supposed to be specified, parameters that had to be met in this design. They can design it how they want, but it has to meet this criteria. What we are finding is some of the criteria are not being met. Also when they build it, it needed to be built within these criteria and they are not doing some of those things.

Mr. Fennell asked what was the error?

Mr. Cassel responded one section of the specifications stated a certified welding inspector would be onsite inspecting the welds while they are being constructed and that every weld would be 100% visually inspected as well as a percentage of them that are supposed to be RT or non destructive tested. What they should have been doing, if you really look at the specifications, when they started putting the plant together, they should have taken some x-rays or RT shots.

Ms. Zich asked have we had problems like these on other ones?

Mr. Cassel responded when we did the shots on Digester #1 we have some issues with the welds.

Mr. Hanks stated Digester #1 also has some structural issues.

Mr. Cassel stated one of the questions raised in the meeting was that they had built other things. My radar would not be as high and confidence as low if we did not have problems when we tried to operate Digester #1 like you are supposed to be able to operate it and the wall buckled. That caused me to look at it and question whether we got what we were supposed to get over there by their design. Clearly they are aware their design on Digester #1 was insufficient. A different engineering firm has stepped up to the plate. They redid the design and they redid the specifications. They put together a plan of how to fix it and it is being reviewed by CH2M Hill as we speak to see if it meets the criteria of that project’s specifications. Again, it was a different project with similar specifications. Does it meet the criteria to be a proper repair?

Ms. Woodward asked what else have they built out here?

Mr. Daly responded Plant E.

Mr. Cassel stated Plant E back in 2000 or 2002.

Ms. Zich asked did we ever look at those welds really closely?

Mr. Daly responded it is still operational.

Mr. Cassel stated once we get Digester #1 up and Plant F up, I recommend we take Plant E down, clean it have the RT guys come in and do some random shots on the welds to see what kind of condition they are in. Then we can go back to see what we may or may not need to do on that plant.

Mr. Hanks asked do we need to do any notifications to the bonding company?

Mr. Cassel responded I am not sure at this time.

Ms. Delegal stated it depends on where we are. At some point we will need to do that, but right now it sounds like we are in the diagnostic phase. We will keep it in mind.

Mr. Cassel stated the surety has been made aware because we have had other issues with subcontractors on payment issues. We have been copying the bond company on those issues and they will be copied on the defective weld scenario because they not only hold their pay and performance bond, but they also hold their surety bond as well.

Mr. Fennell asked who would have looked at the x-rays they should have taken?

Mr. Cassel responded they would have been looked at by the testing laboratory and they would give you a report. By looking at the report you can see if it has met the criteria.

Ms. Zich asked do our engineers, CH2M Hill, typically test it so that they know if it is right?

Mr. Cassel responded the tricky part on this is that the guy in the field is looking at it to see if it is welded. It is not CH2M Hill’s responsibility to verify the quality or integrity of the weld. That is the responsibility of the contractor to make sure the weld is proper.

Mr. Fennell stated what I am seeing here is a lack of a quality plan. What I do not see is a continuous set of inspections. There should have been a flag somewhere showing they did not run any x-rays.

Mr. Cassel stated if CH2M Hill as our representative onsite, or me or one of us is asking them where their reports are, they can come back and say we are interfering with their means and methods of construction. The attorney will say that is not a place where we want to go because we end up taking liability.

Mr. Fennell stated there is a significant problem here. If you do not have a quality person who goes in and looks at the construction as it goes on, can ask for results and can look at the results, then we do not have a quality plan.

Mr. Cassel stated the QAQC is the responsibility of the contractor.

Ms. Zich stated I am thinking the same thing. If we have CH2M Hill out there, but their hands are tied if they think the welds are not right. I just want to get it right.

Mr. Hanks stated I think we have had Mr. Johnson present it back to us in many different occasions whether it be the nanoplant or Plant F; how many times he has asked for documentation and how reluctant this company has been to provide documentation. The issue was brought to our attention; not by anyone sitting up here at the table, but by our engineers. They were the ones who said they were looking gat it and it was not right. They brought in their welding specialist to come in and take a look at it. Is it later than we would like to see it? Yes, but I am very glad CH2M Hill is out there and caught it at all.

Ms. Zich stated I am so thankful they caught it too.

Mr. Hanks stated in terms of that I think we are in good shape having CH2M Hill out their in the field. That being said, CH2M Hill; it would have been a lot nicer to have caught this when the plant was half up.

Mr. Fennell stated it looks to me like you did not have a separate quality overview as we go through from a construction standpoint and I think it actually has to be tied to payment. It is not just a question of whether the work is complete, but if the work is verified as good.

Mr. Hanks asked the other thing we need to look at is what scope of services did we contract with CH2M Hill to perform?

Mr. Fennell responded I was under the impression there was a quality plan in there that would be inspected as it goes. If you are afraid to raise your hand because you might interfere with the guy doing his job, I do not see how you can be a quality inspector. Even when your building a house you have to leave a ladder for someone to go up to your roof and do and inspection. I design products and I have to tell you every step of the way I have to meet certain quality specifications. I did all kinds of different stuff before I could ever ship a product out the door. It was not just at the end. I had peer reviews and all kinds of things I had to do before I could ship a product. We are making a big product here. We need quality inspection as we go. It needs to be tied to money and other kinds of criteria. If we did not have that, then we have a problem and we may have a problem coming up in our newer stuff. I am asking for a quality plan tied to money.

Mr. Hanks stated Mr. Cassel, I think what ties into Mr. Fennell’s request is I would like you to take a look at our contracts with CH2M Hill and look at the scopes we are working with them on. In light of our events which occurred on Plant F and digester #1, take a revisit at those. Is the scope presented in those work authorizations compatible with the needs we perceived today?

Mr. Cassel responded I will look at it and see.

Mr. Fennell stated you have to have a quality plan as you go.

Ms. Zich stated and this was supposed to be done by April 3, 2010 and now we are near the end of May and we are just now establishing this. It seems awfully late to be establishing this.

Mr. Cassel stated the contractor has been aware that we have had issues with their welds prior to our last monthly meeting where we did a walkabout. They have been aware of the issues raised by CH2M Hill. It basically started on the piping and then we started looking at it more so, that they had issues they needed to answer back to us. It took us until three Mondays ago to have this meeting to finally get them to the table to sit down and talk to us. They are very slow in responding to any request you have to get the project done.

Mr. Fennell stated we have a project in the works. We obviously have to do something about this and we have to decide how we are going to inspect the major repair job. I am not going to rely upon the manufacturer anymore to do that. Yes he should be doing it, but we need to inspect. We need to tie this into our future contracts. We have a current project going on, which we may have an issue as far as what we do, but I think we have to devise a quality plant for it too. There should be certain key points as we go along where there is certain manufacturing, strength or criteria we should be able to test for. It does not have to be 100% inspection. It could be quality. You can do inspections, but it should be tied to money too.

Mr. Cassel stated there are certain parameters in several of the charts which require the contractor to do testing at certain levels at certain times.

Mr. Fennell stated it is not just testing. He is going to have to turn that over.

Mr. Cassel stated the reports are supposed to come in. Some of those reports are still slow.

Mr. Fennell stated then he does not get paid then. You are going to have to make sure those reports become imperative.

Mr. Daly asked when they are visual and they still do not match, what good is a report?

Mr. Fennell responded there are supposed to be radiology reports too.

Mr. Daly stated but he signed off on it and he has his license on the line so that is supposed to be good enough.

Mr. Fennell stated we are seeing in hindsight this guys own quality plans are not good enough. It is going to cost him plenty of money too. He probably does not realize he is messing up. His plan by itself was not good enough.

Ms. Woodward asked if we have it built in there that they are supposed to test something by these RTs, can we ask them for that report? Is that interfering? If that is something they are supposed to give us, why can we not ask them for it?

Mr. Cassel responded we have asked them for a number of reports on a number of issues on a lot of things. Some of it we have not seen yet and other parts they have said their interpretation is different. We are telling them they are wrong and what it is. We have been battling an interpretation on some of the issues between the contractor’s interpretation of what the specifications say and what we say they are.

Mr. Fennell asked are there any other issues we need to vote on tonight?

Mr. Cassel responded no there are no issues you have to vote on at this point in time other than the financials.

EIGHTH ORDER OF BUSINESS Approval of the April Financials and Check Registers

· Summary of Cash Transactions

· Projected Cash Flows

Ms. Zich stated I have looked at these and they are fine with me.

On MOTION by Ms. Zich seconded by Mr. Hanks with all in favor the financials for the month of April were accepted.

SEVENTH ORDER OF BUSINESS Staff Reports (Continued)

C. Engineer (Continued)

Mr. Hanks stated I understand a little bit of what is going on because I joined them after the last meeting. Ms. Woodward, did you have a question?

Mr. Fennell responded I think she was asking why we did not get this stuff turned over.

Ms. Woodward stated I thought someone had made the comment that our asking them for something can be perceived as interfering with the process, but to me it is like; if I am paying someone to give me something, can I not at least ask if I can have it. I do not see where that is interfering with the process. That is just asking where we are.

Ms. Delegal stated I am sort of at a loss here because I was not involved in any of the discussions, but it seems to me we have identified an issue at this point; regardless of where we are at in the project. We are in a negotiation stage with this particular contractor. We know there are things wrong. We are going to take some remedial steps as far as at least identifying some of the things you suggested as far as getting someone in there to do some forensic work at this point in time. I think we need to work with the engineer and really go through the contractual obligations to see because it is all tied to money. If they do not do what we think they need to be doing or not doing the work right, then we are not going to be paying them. To me, that is a great motivator as far as getting them to give us reports and giving them deadlines. If they are looking for any kind of continued payment, because he who holds the money sort of has a little bit of an advantage.

I am sure Mr. Lyles is going to be working with your manager’s office to go through the contract and see where we do have some leverage here. The number one thing is to document it all because we would like to be able to work something out with these people if we can, get them to do what they need to do, understanding they are the ones who designed it and not CH2M Hill, but they can do the review. To the extent that we need to bring someone else in to look at this and see where we are in the project, then that should be done. If we can work it out, fine. We put the bonding company and the surety on notice as soon as possible so there are no opportunities for any kind of disclaimers on their part. Just be mindful of what our remedies are under the contract. If we need to invoke them, then we will do so. Hopefully, we will try to work it out before we get to that stage.

NINTH ORDER OF BUSINESS Adjournment

There being no further business,

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

Glen Hanks Robert D. Fennell

Secretary President