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, November 15, 2010 at 3:07 p.m. at the District Office, 10300 NW 11^th Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Robert Fennell President

Sharon Zich Vice President

Glenn Hanks Secretary

Also present were:

Kenneth Cassel District Manager

Dennis Lyles District Counsel

Jane Early District Engineer

Dan Daly Director of Operations

Randy Frederick Drainage Supervisor

Kay Woodward District Accountant

David Macintosh Wastewater Department

Ed Stover Water Department

Gerrit Bulman CH2M Hill

Jim Ravenue CH2M Hill

FIRST ORDER OF BUSINESS Roll Call

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

SECOND ORDER OF BUSINESS Approval of the Minutes of the October 25, 2010 Meeting

Mr. Fennell stated each Board member received a copy of the minutes of the October 25, 2010 meeting and requested any corrections, additions or deletions.

Mr. Hanks stated on page 20 it says ‘affluent’ well. It should be ‘effluent’. We also have “lime ponds” and un-lime ponds” on page 21.

Mr. Bulman stated it should be corrected to lined and unlined.

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the minutes of the October 25, 2010 meeting were approved as amended.

THIRD ORDER OF BUSINESS Supervisors’ Requests and Audience Comments

Mr. Fennell asked are we going to have somebody else give us a status?

Mr. Cassel asked on the construction status?

Mr. Fennell responded yes. Mr. Cassel stated I will bring you up to date on that. We had a meeting last Thursday with the Lanzo representatives, the representative from the bonding company for Intrastate, CH2M Hill and I were at the meeting discussing the issues with Plant F. We walked the site and looked at the conditions and the issues. In the paperwork situation they ask for an executive decision. The meeting we held last Thursday was the first part of it. We agreed to meet again on December 3, 2010 at which time the bonding company is supposed to be coming back on or before December 3, 2010 with a solution to the weld issues and the other issues which have been brought up with the air piping and etcetera.

Mr. Fennell asked who is this gentlemen?

Mr. Ravenue responded I am Jim Ravenue from CH2M Hill. Mr. Johnson asked me to come here today. He could not make it so I am filling in for him today.

Mr. Hanks asked you are filling in for Mr. Johnson?

Mr. Ravenue responded I am filling his position in here for the meeting if anything needs to be addressed.

Ms. Zich asked have you been working here?

Mr. Ravenue responded yes. I have been associated with the project since the inception of it. I have been onsite once every two weeks on an average over this past year.

Mr. Cassel stated Mr. Ravenue has been in the loop with all of the issues.

Mr. Fennell stated as I gathered; there was a thought they might be able to fix the well. Did that come out in the meeting?

Mr. Cassel responded their initial response was they think they can fix the wells.

Mr. Ravenue stated it was our contention all along that it cannot be, but we are willing to entertain anything they come up with. In our last correspondence we asked them to give their final recommendation on how they are going to repair this or address this issue. With The Hartford coming on Board and with Lanzo stepping in a more prominent role, we agreed at the meeting last Thursday to give them an additional timeframe for The Hartford and Lanzo to prepare their response or their rebuttal. That is where we are now. We have given them additional time to see how their bonding company and Lanzo are going to address this issue and we are going to take it back up on December 3, 2010.

Ms. Zich asked what about the thickness of the steel?

Mr. Ravenue responded that is pretty much the main item discussed with Lanzo and the bonding company. If the thickness of the steel, which we contend, is inferior, then they have to take it out. That is where the bonding company obviously is getting involved. Obviously it boils down to dollars.

Mr. Fennell stated but there is also the issue of not just the thickness, but the grade of steel. Is that right?

Mr. Ravenue responded no. The grade of steel is what they brought up. They are bringing up this new item on a different grade of steel. The tensile strength of it is more superior to what was specified and what we thought we had. In our opinion it does not really matter because it boils down to the weakest link, which is the weld. If you have an inferior weld; yes you can go out and cut all of those welds out and reuse the steel which is there, but it gets to how are you going to cut the weld out, what damage are you going to do to the steel which is there by heating it, cooling it and cutting it and also we have a code issue that says in black and white the minimum size is 5/16 inch.

Ms. Zich asked and is this ¼ inch, correct?

Mr. Ravenue responded yes. We are offering them the opportunity to respond since Lanzo has taken a more prominent role and The Hartford is involved. Short of encasing it in 12 inches of concrete or coming up with some wild idea like that, our contention is it needs to be taken down. We will see what they come back with.

Mr. Hanks stated so CH2M Hill has been through the design procedure the tank designers have referenced in their calculations. Is it the professional engineering opinion of CH2M Hill that the thickness is not meeting the requirements of the code as specified?

Mr. Ravenue responded yes. That has been our position all along from day one.

Ms. Zich stated we need to get moving on this because it has just been sitting there month after month.

Mr. Ravenue stated we realize that and I think we brought that up. We agreed at this meeting we had last Thursday to another seven days for these new parties to get involved and that we give them an opportunity of seven more days to come up with something since they were new parties to it. We will see what they come up with.

Mr. Hanks asked do you have it in your procedures that any solutions presented will be checked versus the reference and codes, whether it is the LRFD or reliable strength design method, it will be checked versus that to see that it is compatible?

Mr. Ravenue responded yes. Anything that comes up now we are going to look at it very closely.
Mr. Hanks asked where do we stand in terms of the rest of the sewage treatment plant operations without Plant F being online?

Mr. Macintosh responded we should not have any issues right now we are entering the dry part of the season. I do not know how long we are looking at with Plant F, but we have gone through almost a year without Plant F and we have been able to keep up with the flows.

Mr. Hanks asked are we still meeting the conditions of the permit in terms of redundancy?

Mr. Macintosh responded yes. We are meeting the conditions of the permit.

Mr. Hanks asked are we under the permitting capacity by 20% to 30%?

Mr. Macintosh responded yes.

Mr. Fennell asked are there any other comments about this?

There not being any, the next item followed.

FOURTH ORDER OF BUSINESS Staff Reports

A. Manager

· Red Flag Identity Theft Prevention Program, Resolution 2011-1

Mr. Fennell asked who is putting forth this resolution?

Mr. Daly responded the Federal Trade. It is actually something that was up for two or three years. Each time it would come up and Congress would vote on it, the parties got together afterwards and said they could not do this and needed an extension. It has been extended out and right now the latest target date is December 31, 2010 that everyone is supposed to have one. It is pretty much free form, free flowing identity protection for the residents we serve. We map out and put down exactly how we do things here, what we do not do, who we will notify and etcetera.

Mr. Fennell asked what is our responsibility?

Mr. Daly responded our responsibility is to know who is actually living in a home and to know who is actually paying a bill or calling us.

Mr. Cassel stated also to protect whatever data we do have about the individual homeowner and to ensure we do not take false social security numbers and other things like that, as part of our protecting their identity; being able to verify the person in the home is the proper homeowner or renter without taking too much information, which can be used in identity theft.

Mr. Fennell asked how do you know if someone is not there under a stolen identity? How do you know if they are who they are?

Mr. Daly responded you do and you do not. We do not expect them to show up here because we are closed to the public. We cannot expect them to show up here when they want to open a new account, pay the deposit, have all the documentation and paperwork that is needed for us to know, including IDs. We cannot do that. What we can do is make an effort or an attempt to acquire, when they say they are a tenant, a copy of the lease and then contact the owner of the property to verify it is being leased to this person. It is kind of a backdoor effect which is going to cost us a little money as far as man hours go.

Mr. Fennell asked do we have to investigate people?

Mr. Daly responded yes; to a degree.

Mr. Fennell asked is this not a police function?

Mr. Cassel responded a number of these things we have been doing already. We do check to see if it is a renter. We do try to get a confirmation.

Mr. Fennell stated we do that for our own business.

Mr. Cassel stated that is correct. This is not requiring us to do a whole bunch more than what you would do in standard business to make sure you have the right person paying the bill, that the right person is attached to the property you are billing as we would normally do in our day to day operations.

Mr. Fennell asked if you find something is wrong, what are you going to do?

Mr. Daly responded then we contact the City of Coral Springs Police Department and/or other agencies.

Mr. Lyles stated there is a bit more to this than informing the resident the proper person. There are some criterion factors that the FTC has published that we are going to, by this resolution, adopt as our own guidelines, which sort of give an indication that you might be getting inquiries about account information from someone other than the true account holder. If those boxes get tipped, then we do not disclose the information over the phone. It is a way of not giving information we do have to anyone who asks for it. We do have that kind of burden, but it also benefits the public and it puts it a little further out of reach for at least the casual identity thief who wants to use utility information to get, potentially a credit card number or social security number. It should not be involved in our database.

Mr. Daly stated we have never taken social security numbers.

Mr. Fennell stated I can understand us keeping information, but it also makes us have to figure out who people are, do identity checks and then report. If we find someone, do we report them? Is that the idea?

Mr. Daly responded pretty much, yes.

Mr. Lyles stated we make an attempt to confirm with the proper account holder that something is going on and confirm their status as well as whether they want the information released or not. It certainly puts a bigger burden on the staff here.

Mr. Hanks asked do you have any concerns about how this is structured?

Mr. Lyles responded I think it is one of those typical Federal Government programs where they are saying they insist everybody do this. Yes, I think we would be better off not doing it than doing it, but I do not think we have an option.

Mr. Fennell asked what if we decided not to?

Ms. Zich asked what if we do not accept the resolution?

Mr. Daly responded we actually wrote the resolution. It is our own encumbrance and it is pared down considerably to what other agencies or other cities are doing.

Mr. Lyles stated Mr. Daly worked a lot on this with Mr. Pawelczyk at my office and I think it would be fair to say that you shaped this to a form and a format that I think our staff can handle.

Mr. Daly stated and pretty much is handling anyway.

Mr. Lyles stated and is doing anyhow to a certain extent. We did not just accept this blindly.

Mr. Cassel stated it was not something where we had to do whatever they said. We customized it to do 99% of what we were already doing; to check that we do not give out the wrong information about someone and that we do check that whoever is in the house is the proper person.

Mr. Hanks stated even some of the things you have listed here such as “limit access to employees with a legitimate business need.” That makes common sense. It is a fairly common sense document. Yes it is a little bit of “extra work”, but I would hope we were doing this anyway.

Ms. Zich stated that is why I was wondering why we really needed the resolution.

Mr. Fennell asked what is the consequence if we vote no?

Mr. Daly responded we would not be in compliance with the FTC.

Mr. Lyles stated I cannot tell you whether there is a fine associated with that or not. I did not consider that the Board might not want to do this so I regret to tell you I do not know what the penalty is if you vote no. Based on what I received as input from staff, it is my understanding these are things we are reasonably doing and can do and it is not a big burden for the District. That was my understanding. I think Mr. Daly is confirming this.

On MOTION by Mr. Hanks seconded by Ms. Zich with Mr. Hanks and Ms. Zich voting aye and Mr. Fennell voting nay Resolution 2011-1, adopting the red flag identity theft prevention program, was adopted.

Mr. Lyles stated I will have a report on the penalty for your next meeting. If there is no penalty, I will advise you of that. You can always rescind a resolution which has been passed.

· Discussion and Action on the Purchase of Hypochlorite Tanks

Mr. Cassel stated I would like to postpone the discussion on this for a few minutes because we do not have some of the information with us. In the meantime I would like to bring up a couple of things. This is a notification you will be receiving in the mail regarding elevated levels in one of our testing situations. This is one of the requirements for compliance. We have to mail this out to every consumer. If you look at it, the important part is at the bottom where it says “What is being done.” We have done analysis of sampling, handling and chain of custody. We looked at some double blind sampling detections to try to find out why the anomaly occurred. Five percent of your samples can fail. We had one more than five percent fail so it triggered a re-test, which failed. Then the re-test of the re-test passed. So we are not sure whether it was an issue with the chain of custody.

Mr. Hanks asked how did this fall relative to the change in laboratories we authorized?

Mr. Daly responded it was after.

Mr. Hanks stated we were with Spectrum and then we went to somebody else, Xenco. It was after we had changed, but not directly after.

Mr. Cassel stated not immediately.

Mr. Daly stated the laboratories are supposed to be pure. We still think it has to do with the change in custody and not what was coming through people’s pipes. The problem is this happened in September and all of a sudden we were contacted by the Department of Health telling us to put this letter out. They did not tell us why we had to do it 45 days later when there was no danger; based on the fact we had subsequent tests which passed. Again, it has to do with bureaucracy and things are written in stone.

Mr. Fennell asked where were the samples taken?

Mr. Daly responded we have 45 different samples of places.

Mr. Fennell asked are they out in the field?

Mr. Daly responded it is always out in field and persons homes. Suppose a dog was near the outlet before hand to see. It is really interesting to see. Even when you pop the top of it if your finger gets on the cap, it could have contaminated it.

Mr. Cassel stated if you breathe or sneeze or anything.

Mr. Fennell asked is this in the same area?

Mr. Daly responded no. It is throughout the District.

Mr. Cassel stated we had one site that failed so it caused a re-test. The re-test failed, but then the re-test of the re-test passed and the subsequent re-tests passed again. Why did it fail the two times? No one can really pinpoint the reason.

Mr. Hanks asked was it the same location?

Mr. Cassel responded it was the same location.

Mr. Daly stated we have even gone so far as to take dual samples for the November testing and send it to both laboratories so we can compare them side by side. It may cost us more money, but the fact is our hands are tied. If we think we are doing everything possibly that is in the right category, yet we are held accountable to something that happens after it leaves here. I even contacted Xenco to see how much it would cost for them to do the full chain of custody. They take the samples, transport it, test it and give us the results. That would be an additional $23,000 a year.

Mr. Fennell asked was this the same location each and every time?

Mr. Daly responded I believe it is. I think one or two they changed because when trees and shrubs grow up around it and you cannot get to it any longer, you have to go to a different location.

Mr. Cassel stated on this sample cycle it was the same location. It you exceed the five percent you have to do a re-test and then two tests after that. The first test failed so then we had to do a re-test and then another test at the same location. The third and fourth tests and I believe the fifth test at that site, all passed.

Mr. Fennell stated okay, but there were six failures total from all of those tests.

Mr. Cassel stated we take 45 and we ended up to 58 because we had to take some re-tests for the ones that failed. All of the rest of them passed except for the one site that we had to continue to test, which pushed us over the thresholds.

Mr. Daly stated Mr. Stover is here. He is our Chief Operator. At these sites that were tested, where the failed samples all from the same site?

Mr. Stover responded yes.

Mr. Fennell stated this is someone’s house.

Mr. Stover stated yes, but it is outside. The taps were outside.

Mr. Fennell asked who takes the samples?

Mr. Stover responded we do. It is done every month. You have to be in compliance. You have a certain percentage of your population; ours is five percent. That is 40 tests we take every month.

Mr. Fennell asked do these people know we take samples?

Mr. Cassel responded yes. The homeowners know we take samples.

Mr. Hanks stated it is not unusual. Every so often a utility comes up with one of these issues.

Mr. Cassel stated occasionally it is an anomaly you cannot pinpoint.

Mr. Fennell stated I am wondering if he might have a real problem at his house.

Mr. Cassel stated all of these samples need to be taken where the water enters the house.

Mr. Stover stated what happens between the times that my sampler touches it, puts it in the ice and it gets to the lab, there might be 8 to 15 people who handle it. We were in compliance. We only failed 2 out of 40 so we are in compliance. When I called to find out why they are making us do this again if we are in compliance, they told us we had to re-sample. Four of the six re-samples were out of compliance. You have to take upstream and downstream for the two addresses so that is six samples for those two. That put us over the five percent. When that happens we have to get this letter written.

Mr. Fennell asked what else can you do to look around that area and try to determine what may have caused this?

Mr. Stover responded they are not ongoing the same. We change them every year. The addresses are changed every year.

Mr. Cassel stated but the months prior to and the months subsequent to the testing issue all passed. We are looking at it as an anomaly on the samples of that site. Something went on with the samples at that site. Something occurred that triggered that particular site.

Mr. Stover stated it really has nothing to do with what is going on in the area. It has to do with the handling procedures. Florida Spectrum has a school. That is how they train. If you get a finger smudge on it, there are oils. This is why we re-test.

Mr. Hanks stated I would not worry too much about this. I was doing a job out by the Coral Springs Medical Center. The background samples failed and the line it was in passed, but the Health Department was giving us grief about the background. We re-tested it several times and at the end it was a problem with the laboratory. Just keep an eye on it.

Mr. Fennell stated it does say there was a problem. I thought it was in the water or in the laboratory, but with that many things, there was a problem.

Mr. Cassel stated this is why we took the actions we did; to try to figure out and minimize.

Ms. Zich stated they keep re-testing so they would catch it if it was happening again.

Mr. Fennell asked is it the same location?

Mr. Stover responded yes. We do the upstream and the downstream.

Mr. Fennell stated okay; discussion and action on the purchase of hypochlorite tanks. I think you showed us something. There was something about the connections were such that they deteriorated or something.

Mr. Cassel stated we initially went out to get some quotes for repairs and replacement of the tanks. It exceeded our threshold so we went out to bid. We had two people show up for the mandatory pre-bid meeting at which time one of the individuals walked out of the pre-bid meeting and we only had one individual stay and one bid come in. We had anticipated that some of the prior accounts’ cost estimates were about $30,000 to replace the tank, but it did not include removal and disposal of the existing tanks. The bid that we received includes not only supplying the tanks, installing the tanks, but removal and disposition of the new tanks. That bid came in at $55,706.

Mr. Fennell asked is it for both tanks?

Mr. Cassel responded all three tanks.

Ms. Zich asked can we do it with just one bid?

Mr. Lyles responded yes. If the process was followed, published two times as specified in your special act and only one bidder shows up, then you can accept the single bid or negotiate with the bidder if appropriate. If you only have one, it actually gives you more flexibility then if you have several.

Ms. Zich asked is $55,000 reasonable? You said it was $30,000.

Mr. Cassel responded it was about $30,000 on several of these.

Mr. Stover stated some of these initial quotes were just for the tanks themselves. There are different applications you need to apply to them for them to work properly.

Mr. Hanks asked refresh my memory; are these sodium liquid chlorine tanks?

Mr. Stover responded that is correct.

Mr. Hanks asked when were these installed?

Mr. Cassel responded 10 years ago.

Mr. Hanks asked has it been that long?

Mr. Cassel responded yes.

Mr. Hanks stated I remember the discussion about getting rid of gaseous chlorine that we had onsite. We were trying to get rid of it along with the sodium hypochlorite.

Mr. Cassel stated according to the records it was replaced in 2000-2001.

Mr. Daly stated it could have happened in 2001, but it was probably completed in 2002 or 2003 like most of the projects in here.

Mr. Hanks stated that may be why. So they have to be pulled out and new ones have to be put in. How long should they be lasting?

Mr. Stover responded they have a five to ten year life expectancy. This is simply because the space where the sumo fittings go, those holes are weak. They are not the full shell and unless you use a certain fitting in there, like a titanium fitting which they did not do in the original, that will happen. They will still cracking at all of those holes and that is what happened over there.

Mr. Daly asked so are you saying they are only going to last five to ten years we use?

Mr. Stover responded these may last a little longer because they are a little bit better strength than they were back then. We are going down from 8,000 gallon tanks to 5,000 to 6,000 gallon tanks, which put less head pressure on that.

Mr. Hanks asked what are the poly tanks? We do have a building that has the containment in it and that has good poly tanks.

Mr. Cassel responded these are the poly tanks.

Mr. Hanks asked they are cracked?

Mr. Cassel responded yes.

Mr. Hanks stated actually around the fittings.

Mr. Fennell stated it is not so much the tank itself. It is the fittings.

Mr. Stover stated that is correct. Once they are gone you cannot do anything else with them.

Mr. Hanks asked how much are we talking about?

Mr. Cassel responded $55,706 was the bid. We would like to get approval for that amount and authorization to negotiate with the contractor and see if we can negotiate them down on it and then go ahead and make it happen.

Mr. Fennell asked how do you know this contractor can fit it correctly?

Ms. Zich asked have we used him before?

Mr. Cassel responded no we have not.

Mr. Stover stated he has some good references.

Ms. Zich asked have we checked them out?

Mr. Stover responded yes.

Mr. Cassel stated we have also done some investigation in-house with the tank manufacturers as to proper ways to installation with flexible couplings, types of fittings and etcetera to make sure what the manufacturer says should be going into the tank is what we get from the contractor.

Mr. Hanks asked was this followed before?

Mr. Cassel responded I am not sure what was followed before. The before was hard piped in. The information we received said it should have had flexible fittings between the fitting and the pipes; for whatever reason, what is out there is not.

Mr. Hanks asked have these been built into the ongoing maintenance of the plant?

Mr. Cassel responded not yet.

Mr. Hanks stated you know where I am getting at. We are going to be in an ongoing situation. We need to figure out how much it takes to maintain this.

Mr. Cassel stated now that we are aware of it I think we can build it into our ongoing long term repair and replacement program that we need to set money aside for.

Ms. Zich asked is the money there?

Ms. Woodward responded yes it is. It is in renewal and replacement.

Mr. Hanks asked what happens if we do not do anything with this?

Mr. Cassel responded if one of them splits, you have a lot of sodium hypochlorite all over the place.

On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor the purchase of hypochlorite tanks was approved and staff was authorized to negotiate with the bidder.

Mr. Cassel stated before we go into the water charts there is one other thing I want to bring up for the Board. Each of you needs to get with Mr. Daly on a direct deposit because we have gone to direct deposit on all of our expenses. Sometimes in the next 30 to 40 days, please give Mr. Daly the proper information so your checks can go direct deposit for your compensation.

Mr. Daly stated it is a matter of security. About six months ago we had a check come through, cashed by the bank, written years ago, signed by Mr. Moyer and Ms. Archer. If have an employee leave our facility, we send him a final check, then he calls two months later and claims he never received it so we send him another check, they can go cash another one a year later.

Mr. Cassel stated or two years or five years.

Mr. Lyles asked can you void the first check?

Mr. Daly responded you can void it, but the bank will still cash it.

Ms. Zich asked does the check say on them, void after 60 days?

Mr. Daly responded it does not matter.

Ms. Woodward stated no. They do not say on there they are not good after 180 days because they are good.

Ms. Zich asked do we still have the same checking account?

Ms. Woodward responded yes.

Mr. Daly stated we have a few of them out, which never showed back up. It does not amount to a lot.

· Monthly Water & Sewer Chart

Mr. Hanks asked who made this first one?

Mr. Cassel responded Mr. Stover.

Mr. Hanks stated I like the old format more.

Mr. Stover stated I can go back to the basic format.

Ms. Zich stated I thought it was pretty interesting.

Mr. Fennell stated I think the interesting thing is there is an influent, total hardness; calcium hardness and alkalinity also vary as the water is available. So it depends on how much water we have.

Mr. Stover stated the more water you have, the more lime you need to treat that water. Then your alkalinity and your hardness will fluctuate with that flow.

Mr. Fennell stated that is like a total amount. So it should vary with the amount of water.

Mr. Stover stated that is correct.

Mr. Fennell asked what does this mean to us? Can I draw any conclusions from this?

Mr. Stover responded I can draw conclusions from it. It is just telling you the progress of the plant on a monthly basis.

Mr. Hanks stated your PH is high compared to New York City water.

Mr. Stover stated it is not really that high. We keep it around 9.0. When the nano plant comes in, the way that is treated, your PH comes way down out there so consumers are going to taste a different kind of water. This is one of the best waters in South Florida.

Mr. Hanks asked Mr. Stover, are you doing the distribution versus bill chart or is that Mr. Daly?

Mr. Stover responded I do the chart based on the billed numbers.

Mr. Hanks asked can you throw in a 12 month running average?

Mr. Stover responded yes.

· Utility Billing Work Orders

This item is for informational purposes only.

B. Attorney

Mr. Lyles stated I just have one quick follow up item. The President asked that we try to find out again what was behind the request for certain information regarding elections and other things from Mr. Porth’s office. It originally came to Mr. Daly from their Mr. Dailey. We did finally get a response that was essentially not very informative. They were satisfied and happy with the information they received. They did not have any follow up and did not have any information to provide us with respect to how all of this came about or whether or not there was something particular on their mind; only that they were satisfied with what they heard back from staff, Mr. Daly and our office. They thanked us very much, but that is all we got. They are not saying and you can only push something like that so far.

Mr. Fennell asked what was the information we provided?

Mr. Daly responded they wanted to know about elections and when they took place.

Mr. Lyles stated they do not intend to elaborate and it was clear that no further information would be forthcoming.

C. Engineer

· Consideration of WA-55 Amendment (Final) for Injection Well Pump Station Mechanical Evaluation

There being no questions or comments,

On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor WA-55 Amendment (Final) for injection well pump station mechanical evaluation was approved.

· Monthly Aerial Photographs

· Project Status Report

Ms. Zich asked how are we doing on our nano plant? I know we were supposed to be finished in November.

Mr. Bulman stated November 23, 2010 is substantial completion. Obviously we are not there yet. The roof trusses are all on right now. They are finishing with the painting and the final securing of them. They say we will have some roof decking on there by Thanksgiving. Then they will be able to put equipment inside. Once the decking is on and they consider it is dried in, they can start putting electrical and mechanical equipment inside. From there it is a lot of mechanical and electrical work which needs to be done. With the roof on a lot of areas will be opened up for many of the subcontractors to be working simultaneously. The electrician and mechanical people can all be working on a piece of the project. A lot of regular walls will need to go up in the control room area of the building.

Mr. Hanks asked what is your best guess as to when it will be completed?

Mr. Bulman responded I do not have it in front of me, but I think they are saying they are six months behind or eight months behind.

Mr. Cassel stated the last I heard on the analysis from Mr. Johnson was close to six months. That was 30 days ago. I do not know where they are right now.

Mr. Bulman stated we are thinking from the January 24, 2011 final completion date about a June timeframe. We are looking at about five months behind. With Lanzo taking more of a hold on this project we are hoping that a lot more attention from them gets put on this job and we actually start meeting some of the deadlines they said. That is our hope at this time.

Mr. Cassel asked are we at a point and time where once the deck gets on they can really kick it in high gear?

Mr. Bulman responded once the deck is on, yes. The electrician is foaming at the bit to start putting equipment in there. Once he sets his equipment he has a lot of work to do. This will open a lot of work for him. Right now he has just been onsite doing what he can to keep a couple of people. Once the deck is on he can get a good crew in here to get some work done.

Mr. Cassel stated so mechanical, electrical and other items can kick in at high gear.

Mr. Bulman stated then we can start talking about putting the motors on where right now it does not make sense to do it because it would be in the weather. Either the finish or the weather would get the equipment damaged. Now we can start talking about getting some equipment in and not worrying about it getting wet or damaged. We can start wiring and connecting it.

Mr. Cassel asked do we have a date on the skids delivery?

Mr. Bulman responded the skids are here as far as I believe.

Mr. Ravenue stated they are not onsite.

Mr. Bulman stated most of that has been released and I think we are just waiting for a place to put it for it all to be shipped here or shipped by the manufacturer to here.

Mr. Cassel stated okay.

Mr. Bulman stated they come in 8 inch diameter tubes and they are 15 to 20 feet long. Each tube is separate and then they set them on a ‘tree’ as we call it. All of that has to be assembled. There is some mechanical work which needs to be done. With a roof on, you can have a crew in there doing all of that work while the electrician is doing something.

Mr. Cassel asked do you know if it is the intent of the contractor to boost his personnel on all of the subs after he gets the roof on or have you gotten any word back from them?

Mr. Bulman responded we have not gotten any word back from them on that. I called just before this meeting. The electrician really wants to get busy. When they have the roof on they will be able to get the electrician’s crew in there. It is still a very confined space so if you put 30 electricians in there, it will be counterproductive.

Mr. Cassel stated I understand that.

Mr. Bulman stated you get a reasonable number that can work in there and then we will get some progress in moving forward with this. At the same time that is going on the outside finishing will continue; the painting and the side work. It can go parallel to what they are doing inside. We should start seeing a lot more progress.

Mr. Fennell asked what about the canal side; the joining of those two canals? Is there anything further along on that?

Mr. Cassel responded we received the agreement from the FEDs to be executed last week. You all had made the motion to go with it. There are a couple of things we need to change in it such as who they have listed as the project manager and where some of the information is supposed to go. There are a couple of other things we need some clarification as to some of these Federal registers and the Cash Management Act of 1990; some of the other parameters they are saying we have to comply with to make sure we understand what they are saying.

Mr. Lyles stated one of the things we are going to get clarification on before we bring it to you for a signature is that design is covered by this grant and their share will go towards design. There is a budget that is proposed which shows a design cost, but yet other parts of the agreement seem to speak to them funding only hard construction costs. We do not know the answer to that and until we get the answer we do not feel comfortable taking it any further and getting it signed. We have a little bit of addition work to do with the engineer’s help. This grant has serious strings attached to it and we have learned the hard way what can happen years later with an audit.

Mr. Fennell asked do you think there is something we need to do additionally with this? Do we need to have someone part-time just to watch how the money flows in this thing?

Mr. Woodward responded this is the first I heard that we had this to look at so I am not sure how to answer that.

Mr. Cassel stated it is one of those things we are going to have to seriously consider on how we administer this grant to make sure we have all of the documentation; however we build it, whichever method we choose to have it actually constructed, we want to make sure we have all of the documents for the five years so we make sure they cannot come back five years later asking us for them.

Mr. Fennell stated I am just saying one of the overhead expenses we may need to do is get someone to watch this thing continuously.

Mr. Cassel stated it may be advantageous to us to have someone handling that for the duration of the project.

Ms. Woodward asked what is the loan amount on this grant?

Mr. Cassel responded this is a $2 Million grant. This is the grant from FEMA with an estimated dollar they will fund up to $2 Million of the project. They will fund 75/25 of the project that we had gone out for. They came back and awarded the grant to us and they sent the documents for us to execute, but there are a couple of things in their document to execute that raise some questions to ensure we do not get hung out to dry.

Mr. Fennell stated we think we have enough money in our account to actually pay for this, which is what we have been trying to build up to doing it. The fact that we were able to get this grant, we should be able to pay for that. This is the thing we thought we could do that would help us have a better drainage district.

Mr. Hanks stated we should also keep in mind, on this drainage endeavor, that if we think it is a good project with the Federal money, we should think it is a good project with our own money. If we do not think we have a good project and a valuable project where we are getting our monies worth in it, even if we were paying 100% of the bill, if we do not think that, then we should not go after it.

Mr. Cassel stated understood.

Mr. Fennell stated I think it is good. I think the real question is the amount of money we have on the project. My feeling was that we need to do this project, which will probably cost us $2 Million to $3 Million to do. In the meantime we always want to have a fairly comfortable reserve for the next hurricane that comes along because we saw that cash in hand aid the ability to clean up your areas is what counts.

Anyway, I think it is a good project. It is the best thing we could do around here. I am still concerned as I go looking at the canals with the number of trees which in the past five years are still growing up on the edges of canals. We are still going to have to do something about that too. I do not think we actually voted to go ahead on this.

Mr. Cassel responded you voted to apply and I think we voted to accept the grant, but the execution documents were coming in. We were waiting for the documents to come in so we cold execute them.

Mr. Fennell okay, because I have not signed anything.

Mr. Cassel stated no. This is why we are not bringing it to you to sign until we figure out a couple of more questions we have.

Mr. Fennell stated one of the things we want to see is we are going to have set up one person either by name or position, who is going to track all of these funds, working with Ms. Woodward not only from a project standpoint, but also from a financial standpoint.

Ms. Woodward asked are we comfortable with the $2 Million that is being allowed in the grant? Is that what this is going to cost or is it just a maximum they will allow?

Mr. Fennell responded there was an estimate from the engineering group of what it would be. We actually have not gone out to bid on this.

Mr. Lyles stated the estimates put it at $2,750,000, which is our $750,000 plus the Federal government’s $2 million budgeted for the whole project, including design.

Mr. Fennell stated until we get Plant F nailed down I am hesitant to push anything else. I think there is some more work to do out there; such as revising the streets and/or some of these pumps back here. I want to see the finances get straight first on Plant F. Do you guys think that way too?

Ms. Zich responded definitely.

Mr. Hanks stated I think we should just bear in mind what kind of expiration there is on this grant.

Ms. Zich stated yes. Work with the grant, but as far as any other ongoing projects.

Mr. Fennell stated I see that completely as separate because it is from a separate pot. It is not the same money at all.

Ms. Woodward stated it is coming from drainage.

Mr. Fennell stated the drainage is separately funded. As far as the other side goes, we need to get Plant F completed. I think there are things we should be doing, but I do not want to do it until we, you know.

Mr. Hanks stated we need to concentrate on resolving Plant F issues, getting that resolved, and once that is cleared up then we have direction to where we are freed up and we can start. Collectively, engineers, counsel, management has a limited amount of time, realistically speaking, that we can all throw at those issues. I agree 100% on that.

Ms. Zich stated I definitely want to get Plant F figured out; at least a solution to the problem. That is the number one priority. Number two priority is getting the nanofiltration plant finished.

Mr. Hanks stated we need to keep in mind, as far as having the nanofiltration plant, what happens because we are adding another 500,000 gallons into the monitoring well. That issue is kind of tied in as well. We cannot lose sight of them, but we still have to be careful where we focus our energies.

Mr. Cassel stated there is one more thing I would like to update you on. If you remember, we had the interlocal agreement with the county on the feasibility study. We sent our paperwork in.

Mr. Hanks asked was this the re-use feasibility?

Mr. Cassel responded yes. It was a re-use feasibility study.

Mr. Fennell stated there was a report on that.

Mr. Cassel stated there was a report on that. We accepted the report. The main report went off with our wastewater permit that is up there waiting for review. The information went to the county. I spoke with the county last Friday. They received it. There was a typo. We corrected it and they are in the process of cutting a check back to us for the county’s share of that study. We should get the reimbursement within the next three or four weeks for 50% of that.

Mr. Hanks stated I was talking with our friends at NSID and they are going forward with some reclaimed up there. What do we know about that?

Mr. Lyles responded they plan to put it into the wedge only when they purchase it and start developing. They will have re-use only for the wedge.

Mr. Hanks asked where is that coming from; the county?

Mr. Daly responded I do not believe so.

Mr. Lyles asked where is what coming from?

Mr. Hanks responded the re-use.

Mr. Lyles responded it is all going to be generated within NSID at the expense of the properties generally known as the wedge.

Mr. Hanks stated I was just wondering where the source of the reclaimed water was coming from. Is it going to be sourced from the county’s plant?

Mr. Daly responded their own wastewater treatment plan.

Mr. Hanks stated oh, they have their own.

Mr. Lyles stated they do not. This is going to be part in parcel of (unintelligible). Apparently the county, in the long term, is not interested in continuing to have a large amount of users and handling all of the waste. They want to push it back to the District. It involves ocean outfalls and all kinds of issues.

Mr. Fennell stated so they must be talking about bond issues. I bet they are talking about $20 to $30 Million.

Mr. Lyles stated I do not know the figure.

Mr. Fennell stated they have to do wastewater treatment. They have to put in pipes. They have to put in secondary treatment of the water.

Mr. Hanks stated it is a lot.

Ms. Zich stated it would have to be a lot.

Mr. Fennell stated the only other thing was a request from our counselor on increased rates.

Mr. Lyles stated I submitted to the manager, prior to the beginning of the month, a new fee schedule that we had reluctantly, but after seven years, felt we had to adjust our fees. I think you saw the letter submitted to the manager and indicated it was going to be taking effect November 1, 2010. It is significantly less than the changes in the CPI published by the Department of Labor. I submitted some statistical data along to support that. We only adjusted our fees once over the last 14 years. This would be the second time.

Mr. Hanks stated I get the opportunity to work with a variety of attorneys throughout South Florida. When I do get to see their fees, Mr. Lyles is not even close to what we see elsewhere.

Mr. Fennell stated you are saying it is fairly priced.

Mr. Hanks stated more than fairly priced and his service is up there.

On MOTION by Mr. Hanks seconded by Ms. Fennell with all in favor the District attorney’s new fee structure was approved.

Mr. Fennell stated but we have to keep seeing Mr. Lyles.

Ms. Zich stated you are staying with us.

Mr. Lyles stated there could be occasions where there might be a conflict. I am your primary attorney and intend to stay that way for the indefinite future.

Mr. Fennell stated we have been well served. Thank you and your firm very much for the effort you have done. You have not only protected us. You have protected the people also. Thank you very much for all of the efforts you have done.

Mr. Lyles responded you are welcome.

Ms. Zich stated I also thank you.

FIFTH ORDER OF BUSINESS Approval of October Financials and Check Registers

Ms. Woodward stated for the October financials we expanded some of the detail in the water and sewer fund. The major thrust of financial information is that we need to meet the bond covenant requirements that we generate sufficient revenues in water and sewer to cover not just operations, but after operations are paid for there are sufficient funds left over to pay off the debt service for the year; plus an extra little buffer of 10% in case something else comes up. Because those financials run for three or four pages and it is easy for it to get lost in the detail, we added a summary in a section at the end of the water and sewer financial statements that allows you to see the detail summarized to prove to you that every month we are looking to make certain that we are on track to cover the debt service requirements. The bond covenant for us is that we need 1.1 coverage. As you can see from the financials we have 1.63 coverage. This gives you a brief recap of what we are looking to accomplish in that fund.

Mr. Hanks asked okay and is it saying we have some excess revenue for this month above the expenses?

Ms. Woodward responded yes. This is going to fluctuate during the year. The issue for us is that when you look at it you should try to determine that we are not going down, down, down and getting marginally close to the 1.1. That allows us in that particular month to start looking to see if there is a true issue or if it is just the timing on when revenue and expenditures were being recognized. We thought this might assist you if you just wanted to see this little recap, it might be sufficient and if you want to delve into the detail, you can go line by line in the financials.

Ms. Zich stated I think this is very nice. Thank you.

Mr. Fennell stated I do too.

Ms. Zich stated it really shows you and you do not have to think about what you are looking at.

Mr. Hanks stated it looks like you did some things different on the proceeding page as well on the presentation.

Ms. Woodward stated yes. We re-sorted the order in which it was presented so that the reserve information pops up separately, and so would the debt service, and it would allow you to see how this computation is derived. I suggest next month we add more detail on the general fund. The general fund does not require a large summary section as the water and sewer does. The general fund is slightly different in that you are trying to make certain that when the assessments come in, they are sufficient to cover all of your expenditures for the year. Even though there is no debt service associated with that, we want to make sure that we are not marginally close to meeting a budget amendment at year end. This allows us to see what our status is.

Mr. Hanks asked can you explain to me why at the very bottom we have excess revenues for the actual month ending October 31, 2010 in the amount of $210,506 and then we have an unfavorable balance of $267,160 in the next column order?

Mr. Fennell responded it says, “available for debt service” and it says it is a negative $267,160. To me it looks like the reserve for R&R and our profit together, which is actually how much we made.

Ms. Woodward stated it should be positive. I put a wrong formula in there.

Mr. Fennell asked is that the first month we had our rates in?

Mr. Daly responded yes.

Ms. Zich asked how are our customers feeling about it?

Mr. Daly responded we received a lot of calls from people wanting to know why their water bill went up.

Ms. Zich asked what about our newsletter?

Mr. Daly responded the last we talked Mr. Fennell I think we said maybe January.

Mr. Fennell stated yes, but I think we might need to explain a little bit about the increased rates. We need a good explanation to tell people what we are doing. In order for us to build a new plant we need to come up with more capital and payoff capital and in order to do that we had to raise the rates. I think we need to do that.

Mr. Daly stated I think maybe in the message from the President.

Mr. Fennell stated we need to tell them the truth; we have not been charging as much money as we need to in order to keep building capital. We actually pay back our bills, but the amount of money that was invested initially is gone. We do not actually have a capital reserve per se. Then we go and borrow it again. We have discussed a couple of times whether this is a good thing or not, but we do not. Every time we need to do something new we have to raise capital, which means we have to go out and borrow again in order to borrow that money we have to raise rates.

Mr. Daly stated unless we retire the debt.

Mr. Fennell stated even then you still have to account for the amount of capital that you should still have in a firm. A publicly traded firm would in fact keep the capital in there. We do not actually go out and put out stock per se. Other utilities do. We kind of get away with low rates for a while, but that is partially due to the efficiencies of the people running it. Enough of that; it looks like we are in good financial shape. Is our water billing back up to where it was historically?

Mr. Daly responded it looks like it is about the same. We are doing some more meter change outs with some of the bigger meters. We replaced it and now a couple of years later it seems like the two inch meters were not performing properly in that the District was at a disadvantage. So we just did two of them last week again. We are talking about a million gallons that we were not getting. We spotted it quickly and gave an estimated bill as opposed to just giving the low bill. The consumption is being billed. We are spending a lot more time trying to be analytical.

Mr. Hanks asked how much is one million gallons in terms of revenue?

Mr. Daly responded it depends on how many ERCs. The whole idea is when we are looking at billed versus made, a million gallons is a million gallons. When you look at it and find a few of those it can help out. One of the mall meters is in. It was a tough deal where they had to rent a lot of equipment to shore up the sides so that we were compliant with safety issues. The other meter by Washington Mutual they are going to try to get done before the Christmas rush because once Black Friday hits they are open until 11:00 p.m.

Mr. Hanks asked have you taken a look at the plans for the mall and can they be sourced from the north side? Do they have a loop running down?

Mr. Cassel responded it is a loop, but there is no way to isolate it.

Mr. Daly stated they are actually looking to use a couple of fire hydrants just for that period of time. They are trying to be a little inventive because otherwise, it is going to be an all nighter. They did this a couple of weeks ago. They started at 8:30 p.m. and ended at 5:30 a.m. We had two crews out there.

Mr. Hanks stated it may be a situation where you would want to investigate using a line stop.

Mr. Daly stated they did do all of that. Once they were doing that they went ahead and put a new valve or two because they knew what they had further down was either covered, abandoned or broken.

Mr. Fennell asked anything on the check register?

Ms. Zich responded everything looks good.

On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor the financials and check registers were approved.

SIXTH ORDER OF BUSINESS Adjournment

There being no further business,

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

Glen Hanks Robert D. Fennell

Secretary President