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, February
28, 2011 at 3:06 p.m. at the District Office, 10300 NW 11th 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
Kay Woodward District Accountant
Jan Zilmer Human Resources
Ed Stover Water Department
Randy Frederick Drainage
Supervisor
Cory Johnson CH2M Hill
Pete Colussy CH2M Hill
Michael Bone Lanzo Construction
Joe D’Alessandro Lanzo
Construction
William Benson Keefe,
McCullough & Co.
Mark Grace Keefe, McCullough & Co.
Jill Vaspasiano ACS Phone
Systems
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 January 24, 2011
Meeting
There
not being any,
On
MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the minutes of the
January 24, 2011 meeting were approved.
SIXTH ORDER OF BUSINESS Acceptance of Financial Audit for Fiscal Year 2010
Mr.
Benson stated I want to thank you for the opportunity to present the financials
that represent the District. I would
like to go through a few of the more meaningful statements. There are going to be things that were new or
different this year and some observations we had in performing the audit. We were able to take the financials we were
getting from your staff, which we think are really good. The quality of what has been going on
in-house over the last couple of go arounds has been excellent. We look at that and the internal control
structure. We also look at what
challenges the District is facing over the next few years and what we should be
telling you as financial people, that you should be aware of.
Our audit opinion appears on page
two. If you read that opinion it says we
are rendering an unqualified opinion, which means we are able to conduct the
audit and satisfy ourselves that these financial statements accurately
represent where you were at the end of the year as well as the results of the
operation for that year. I am going to
point out a few items. If you look at
the table on page five, it shows me year over year a very condensed snapshot. If you look at the balance sheet up on the
top half of the page, all the way on the top right corner, last year the total
current and other assets were $12,840,263.
This year they were $18,081,534. If
you look at the bottom of the table, net assets at the beginning of the year
were $34,809,159.
At the end of this year they were
$38,858,362. If you look at the
statement of activities at the bottom, the first sub-caption is total revenues
of $12,761,804. This year it is at
$13,626,390. If you look at the net
change below it was $2,583,031 a year ago.
It is $3,963,899. Then you turn
the page because there are non operating items.
So the total net change in assets at the top of page six; last year was
$2,730,233 and this year it is $4,049,203.
Our 2007 issuance of the water and
wastewater revenue bonds requires us to keep 110% of the upcoming debt service. If you look on page 27 and look at the upcoming
annual debt service, why is it skewed so that it is $4,005,029,
$4,007,904? It is skewed like that
because we are paying off the last of the 2002 issue in the next four
years. It goes from four years of $4
Million and then it drops down to $3 Million for the next 20 thereafter. I am pointing this out for a reason.
We had a rate increase as of October
1, 2010 which is not reflected here. We
need to raise rates to meet the minimum that is provided for in our bond
indenture. We have that rate increase
coming online. Thank goodness we do have
that increase coming in October 1, 2010.
The last one is coming in a year from now. We need to stay after it; especially during
this four year window because we have some hefty bond maturities going on. As a result, we need to show strong financial
results. I wanted to point it out
because it is a common thing someone might bring to your attention and you
might not have thought about it in a while.
The District is performing very well.
I do not want to create the wrong perception, but it needs to be
performing well right now based on promises we have out there.
Mr. Fennell stated the Board is well
aware of this. We did not want to be in
a position where we would be drawing down out of assets in order to pay off
current bond expenses. $4 Million of
bond repayment is a hefty amount for a $12 or $13 Million company. We wanted to make sure we could do that. Our rates will still be reasonable as
compared to our surrounding areas. If we
are going to be here 30 years from now, we need to pay those things off and we
need to be in a strong position to do it.
Mr. Benson stated not to tell you
your business, but I tend to agree with the comment. For years we were below the market so even
with the rate increase, we are just coming closer up to the market. That being said, we have to be mindful, and I
am not second guessing. I got that you
understand the financials. I am just
saying when I am looking at something, if I issue a draft and a strong
accountant that works at a client brings something to my attention, I am glad
they do. I do not want to work without a
safety net. I take all of the good input
I can. I am sure you considered
this. I saw it when I was reviewing the
draft this year and thought it was something I needed to comment on and
emphasize.
One of the pages I think I pointed
out in the past, but I like it and it is something I think is really important. If you go to page 16 in the financial
statements, this gives you an overall in terms of what we did from operating
cash flows. If you look, we had
$11,075,700 from customers, what we paid out to employees and for different
services, and what our cash was from operations, which is strong. Then if you look where we went with that; in
other words, what did we use those funds on? We invested in capital assets, we
paid down some bond principal, and we paid our bond interest, etcetera. It showed what the decrease was in our total
overall cash from the beginning of the year to the end of the year. It is a good, strong, financial performance;
especially at a time when there are districts having problems all over the
place.
I wanted to make sure I mentioned
there is a new pronouncement and it is reflected in your financials. That is on page 29 where it talks about
post-employment benefits. At the moment
we do not have anyone. A lot of
governmental organizations have never really encompassed or tried to dollarize
and record their post employment benefits.
If they were promising employment benefits to people, they were not
recording it as they went along. Even
though this one is required to be recorded, it is more ephemeral. We have people in the State retirement system. The fact that they are aging every year is going to impact our rates at
some point in the future. The real true
effect of having those people on our books right now is more than just their
payroll. When those people, and your
employees did not do anything wrong, this is in every organization, you go out
and get an actuary and he looks at a census of all of your work force and how
many years they have been working for you and how many years they have until
normal retirement and they say on the day that person retires and they go into
the State retirement system, you are not going to write any direct checks. If you put 100 employees into the State
retirement system, your rate would go up.
As a result of that there is a cost associated with it.
This actuary report we did is small. It is $37,000 that was recorded this year for
your work force as they stand right now.
The actuary to the computation of the people that are there, number of
years of service, and how many years they have to go until retirement. Like I said, I do not want to create the
impression that you did anything wrong or that your employees did anything
wrong. It is a requirement. In your case it is not a major item. In some governmental organizations it is
extremely material because the promises they made are extremely expensive to
fulfill. If you look at the pages that I
detailed out, it starts on page 29 with a wrtitet up of what it is and then it
goes all throughout page 30 and halfway down page 31. It basically says we hired an actuary who has
looked at the age of your work force for your State retirement employees and
did a calculation to figure out the cost associated with that. They recorded that $37,000.
Mr. Fennell stated it actually says
$253,000 in actuarial accrued liability.
Mr. Benson stated I believe there is
a credit against that. I think the State
gives you credit for what is actually in for the people. I believe the unfunded liability at the end
of this fiscal year was $37,000. That is
not a significant amount of money.
Mr. Fennell stated it says Funded Status and Funding Progress, the
funded status of the plan as of October 1, 2010 was as follows: actuarial
accrued liability is $253,000.
Mr. Benson stated based on my
understanding there is not a way for you to fund that at this point in
time. You have a work force. They are doing a forward looking projection
based on the work force you have. If
those people enter at normal retirement age in the State retirement system,
they are doing a projection of what your rates would do. As a result they are attempting to say the current
cost of that and then they are saying the current year increase to that
unfunded liability is $37,000 for the current year. The 253,000 is cumulative for all of the people
from all of the years. I do not believe
with the State retirement system, as I understand the pronouncement, there is
not a way for you to mail the $253,000 if you wanted to.
Mr. Daly asked can you explain what
the State retirement system is?
The
recording picked up several people speaking simultaneously.
Ms.
Zich stated Mr. Zilmer works with the pension plan so let him tell you.
Mr. Zilmer stated we are not with
SRS.
Mr. Benson stated I am going to have
to think about what they were evaluating when they turned around.
The
recording picked up several people speaking simultaneously.
Mr. Zilmer stated we do not offer
any post benefits at all.
Mr. Benson stated I will have to get
you an answer, but we hired an actuary.
The actuary did an evaluation of our post employment benefits and they
determined the current year cost as $37,000 and the total unfunded cost for all
of the years combined as $253,000.
Mr. Zich stated they are trying to
figure out how that can be.
Mr. Benson stated I got that. At first I was thinking it was SRS. If you are doing ICMA individually based on your
employees, then I have to think about and get you an answer on what this post
employment liability is.
Mr. Grace stated it basically has
nothing to do with the actual state pension or health benefits. Even if you do not provide health benefits to
retired employees, there is a cost associated.
If someone works for a district or a city, they might not even provide a
health benefit. Because they are a
government, they can still apply for governmental type benefits under the State
plan that you are not paying for, but they associate a cost because it raises
rates for everybody.
Mr. Benson stated let me get you a
written answer so you understand it and I will also tell you whether or not
there is a way you can fund it if you so desire. I do not believe you are obligated to base it
on this actuary report.
Ms. Zich stated we do not understand
what we would be funding.
Mr. Benson stated let me get you an
answer. There may never be a day when
you get an invoice to pay. I am saying
it might be a calculation of the true impact of having your work force now and
you are using that work force at a younger age and as that work force gets
older and rates get more expensive. Does
that make sense? As a result, they are
trying to measure that impact. It essentially
results in a liability in that earlier period.
If you are using ICMA all the way, let me figure out. We hired an actuary and he did an evaluation
of our benefits.
Mr. Fennell asked did he ask? It sounds like he thought we were in the SRS. Did he ask?
Mr. Daly responded yes.
Ms. Zich asked is this $37,000 on
our books as a liability?
Mr. Benson responded yes.
Ms. Zich asked Ms. Woodward, do you
understand it?
Ms. Woodward responded yes. Basically what you are dealing with here is
the requirement that as employees retire from the District we are required to
offer each of them the ability to participate in the existing health insurance
plans that all of the current employees have.
When we offer them the right to participate they pay their own
premiums. We are not paying their
premiums. They become part of your
population that determines how much the rates are. Because they are retired they are an older
population, which means the rates for your current employees go up as a result
of that. This is an attempt to put a
dollar amount to the potential increase in premiums that your current employees
may have been required to pay on their behalf as a result of being asked to
provide this to your retired employees.
Mr. Hanks asked why is it on today’s
dollars if we are not having that cost today?
Ms. Woodward responded you are
required now by GASB to make an attempt to disclose a potential liability so if
this number becomes large, it is a way of making you aware of the fact there
may be an un-booked liability in the past that might actually result in higher
expenses. You are not going to fund
this.
Mr. Fennell stated it is inherently
unfair from the insurance standpoint to not spread the risk over all the
population as opposed to just the population that is working. Since all of us intend to get older sooner or
later, it would seem like that would be an intentional misguided way of
charging insurance rates.
Mr. Benson stated that is why I made
the comment that your employees did not do anything wrong. I think it is a numerical thing.
Mr. Fennell stated what you are
talking about is the inherent unfairness of the current insurance system and
how we are going to have to pick that up sooner or later.
The
recording picked up several people speaking simultaneously.
Mr. Benson stated I think they are
also attempting to measure their belief that costs will continue to go up and
the costs in 2040 might be much greater than they would have been in 1990. As a result they are attempting to measure
that. I am not selling the
pronouncement. I am telling you the
thought process behind the pronouncement.
If it is a pronouncement, you are required to adhere to it. I want to point it out to you. I did a terrible job at the beginning by
making the mistake of thinking about the Florida Retirement System. We will confirm Ms. Woodward’ explanation.
Mr. Fennell stated thank goodness we
avoided that system because it is one of the mismanaged systems right next to
the SBA. Both are amazingly mismanaged
systems.
Mr. Hanks stated let us get past
this thing. Are there any other issues
we should be aware of? Did we come back
with basically a clean report from the auditors?
Mr. Benson responded we did. If you look at pages 34 through 37, there are
two reports which talk about required communications we have with you as
Supervisors about the internal control over your financial reporting. In addition to that there is a second report,
which is the Report to District Management.
It contains the number of items that we are required to look at and see
if you had any of these specific conditions about the investment of public
funds. We had a clean report there.
There is one thing I want to point
out about this year. I know we recently
got a large new grant from FEMA. I
believe that is going to require a single audit next year, which is a different
animal because it is Federal funds. I
think it is great that you got it, but from an audit standpoint it is going to
change a few items as it relates to our testing. We have to do specific testing on just that
grant.
Mr. Fennell asked what should we do
for that? Should we have a bookkeeper
doing nothing but keeping track of that?
Mr. Benson responded I think you want
to have a mechanism in-house. I have a
host of different clients that have a wide range of different methods of doing
that. Some people say they are going to
set up a separate bank account. I tell
them they are not required to do that, but they say it is their way of tracking
it. In their mind they feel they have a
tracking mechanism there. What I would
say to you is; keep track of it. That
could be the inside of a manila folder that shows every monthly receipt or the
day of the receipt and which item specifically got charged against it.
Ms. Zich stated we are not going to
have any trouble doing that. It is not
going to be difficult to track that.
Mr. Benson stated I do not believe
so. If you want, Mr. Grace can meet with
Ms. Woodward to make sure the system she is proposing will meet our
requirements for the audit. Probably
what Ms. Woodward has thought in her mind to keep track of it will be
satisfactory. If we are accepting the
money, we have to agree by those buckets delineated in the grant. As a result it will probably require us to do
a testing of just those funds. I am not
saying this to concern you. I am just
saying it is something I saw was coming up and will be a little different in
the upcoming year.
Mr. Fennell asked are we going to
have a separate auditor from the Federal Government?
Ms. Woodward responded no. We have gone through single audits
before. Anytime you receive grant money
from the State or from the Federal Government you go through this. When we had hurricane money come in we were
subject to the audit and Mr. Grace conducts them both when he is out here.
Mr. Benson stated there is a
possibility the Federal Government will send someone here to check because that
is their mechanism to check you and to check us. We issue reports saying we looked at the
requirements of the grant, what funds came in and what expenses came out. They had a FEMA auditor after one of the
hurricanes down here going around different districts and municipalities
checking the work. They were spot
checking people’s work to make sure what we were doing complied with the
requirements. We do not have anything to
hide. I would rather have discussion
about it and feel comfortable with what we are doing. I want it to go right.
Mr. Fennell stated there are a
couple of follow up items. We want you
to talk to Ms. Woodward about what you recommend for the Federal grant. Also we want more information on what this
$253,000 liability thing is.
Ms. Zich stated and the $37,000 we
have to put on the books.
Mr. Benson stated I will get back to
you on the GASB-45 post employment benefits and what it is attempting to
measure. Secondly; we will meet with Ms.
Woodward on what the plan is for the FEMA funds and what she will do to track
it.
Mr. Fennell stated thank you for
your presentation.
Mr. Daly asked do you have to move
on this?
Mr. Lyles responded there are two
significant follow up items coming your way.
While you always do ultimately accept the audit, if you wanted to wait
until the follow ups are in place, there is no legal requirement for you to
accept the audit this month as opposed to next month after you receive the
supplement information.
Ms. Zich stated that is a good idea.
Ms. Woodward stated with all of our
requirements for filing with various agencies, including the State, we need to
have this in by March 31, 2011.
Ms. Zich stated we are going to have
a meeting in March.
Ms. Woodward yes, but I have several
different places where this needs to be filed.
Ms. Zich stated the only thing we
are questioning is the $37,000. We might
have to adjust it for that, but I do not think it is significant. Is it?
Mr. Benson responded I think you are
entitled to a full and complete explanation, but you are not going to adjust
the statement.
Ms. Zich stated well it is not $37
Million.
Mr. Benson stated I know. We are recording it off of what the actuary
did from a study of your plant. I am not
saying that you should not wait until you have satisfactory follow up.
Mr. Lyles stated I was not
recommending that. I was just saying
there is an option out there. I do not
think there is any legal impediment to accepting it with the presentation you
heard.
Mr. Fennell asked will you be back
next month with an explanation if we accept this?
Mr. Benson responded yes.
Mr. Hanks asked is there a problem
with accepting a revised report next month?
Mr. Lyles responded no.
Ms. Zich stated we can always amend
the $37,000 we put on the books next year.
Mr. Benson stated I am pretty
confident it is going to be staying there.
I may not be doing the best job of explaining it, but I am pretty
confident it is there correctly.
Ms. Zich stated if it was $37
Million I would be more concerned, but with $37,000 we will accept it with the
thought there might be an adjustment.
On MOTION by Ms. Zich seconded by Mr.
Hanks with all in favor the financial audit for fiscal year 2010 was
accepted.
SEVENTH ORDER OF BUSINESS Representative from Windstream
Mr. Daly stated I would like to
introduce Ms. Vaspasiano. She is with
Advanced Communications Solutions. She
also writes phone programs for Windstream as well as others, including
AT&T. Because I did not do such a
good job last month in peppering the conversation with all the great things
Windstream does and the fact that Mr. Hanks knows someone who had an experience
with Windstream, I thought we would have Ms. Vaspasiano come in and answer some
questions regarding their service. We
are currently paying $2,200 a month just in phone service here. This does not count long distance.
Mr. Fennell asked is the total price
$757.59 that we talked about?
Mr. Daly responded we have to nail
down how many copper lines we are going to have coming in the building. I am not going to say that is iron clad
because we have 11 copper lines coming in to the campus right now and I think
we could probably go down to six.
Ms. Vaspasiano stated it is exactly
what you have right now. We are talking
about replacing your current services by only replacing the carrier. Your carrier right now is AT&T. Windstream resells to you AT&T
products. The only thing you are going
to experience is our technician will come from ACS and will do another cross
connect in your phone room. You will not
notice downtime with the simple phones around the campus. It will simply be a central office change and
a billing change. All of the services
are going to come in on AT&T’s copper.
They own the last mile. When I
started in the business some time ago it took me a while to understand that
phone services are wholesaled. That is
basically what it is. Windstream buys it
at a discounted price and resells it to the public the FCC says you have to be
competitive. This is why we can offer
the rates we do.
Mr. Fennell stated so you are
getting a wholesale price, which you are not marking up as much as AT&T and
selling it to us.
Ms. Vaspasiano stated that is
correct. AT&T manages all of the
copper. Windstream does not have all of
the overhead that comes along with Verizon, SBC or AT&T because they do not
maintain the copper in the ground. AT&T
does.
Mr. Fennell asked if something goes
wrong, a line goes down, who do we call?
Ms. Vaspasiano responded you call
Windstream or me, ACS. We have 24/7
service at our office.
Mr. Fennell asked what kind of
service organization do you have to come out and do something like this?
Ms. Vaspasiano responded we get in
touch with Windstream. They will do some
testing to find out if it is their equipment, which would only be on the phone
system that is here and not any of the copper lines that are around the
campus. If it is not their equipment,
they call AT&T.
Mr. Fennell asked do we own the
copper lines that are on campus and they have to take care of it?
Ms. Vaspasiano responded no. AT&T owns the copper lines. It will just be a billing change for
you. It is amazing. If you do not have dial tone or services at
any of the remote sites on campus, the first call should be to ACS. We will take it from there.
Mr. Fennell stated a T1 line is a
big pipe. I asked last time and online
data does not go through there.
Mr. Daly stated that is correct.
Mr. Fennell stated we are going
through something else.
Ms. Vaspasiano stated you have
basically created a redundant environment where your internet access is going
to be cable modem from Advance Cable and your dial tone is coming in on
different facilities, which is the copper from AT&T.
Mr. Fennell asked could we if we
wanted to?
Mr. Daly responded of course. She wanted to sell us that service, but I am
against it. If there is a problem with
AT&T, we have no cable, no internet access and we have no telephone
service. We are out of luck. To dissect it the way I have, we will always
be able to get out an email even if the phone lines are down, or vice versa.
Mr. Fennell asked is it additional
money if we want to put data over this T1 line?
Ms. Vaspasiano responded this is
particularly a voice product. It is
exactly what you have. It is an ICN
circuit. It will only carry voice. You do not want to put data on it. If you wanted to do data, you would have to
bond two T1’s together; part of it for voice and part of it for data. If it goes down, you do not have any data for
your internet access and you have no voice.
Mr. Daly stated Mr. Silva actually
put our phone system together. He took a
couple channels off of the point to point from our building and the NSID
building so we are able to do phone as well as data out there because they did
not have any way to get internet to that particular building at the time. There are ways to do it. My recommendation is to not marry the two and
put ourselves in a corner so if something happens on the AT&T network, we
would still be able to communicate with the world via email or the internet. It is important because people pay their
bills here online.
Ms. Vaspasiano stated a T1
environment is an expensive environment.
It would be more expensive for you to add another T1 than it would be to
maintain the cable access. If you are
going need to have someone come in and reprogram all of your IP addresses,
every computer and your whole network, it is a big expense to change your
carrier. If it is not broken, do not try
to fix it. It is fine. Just take what you can and save some money. That is basically what we did. We have references in there. You will see the City of Orlando has
Windstream. There were some concerns
about the size of Windstream. Seminole
County Schools have 500 stations. That
is a lot.
Mr. Hanks asked do we need to give
you authorization to enter into an agreement with Windstream?
Mr. Lyles responded an authorization
to execute an agreement.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the Board authorized staff to enter into an agreement
with Windstream for phone service.
THIRD ORDER OF BUSINESS Supervisors’ Requests and Audience Comments
Mr. Bone stated as you can see there is
semblance of a roof up there. We got the
electrical rooms done in the RO plant.
Ms. Zich asked is it dried in now?
Mr. Bone responded it is dried in
over the electrical room and then they have 46% on the material as of
Saturday. It should be done this week. The electrician is working in there. It is getting painted. We had to work through a few issues. I have not platted the last schedule. I know we are probably going to have to move
some panels down.
As far as Plant F, we were over
there doing some radiographs on the welds that need to be replaced. We have to submit a weld procedure so we need
to know specifically which welds need to replaced. We are going to work on the remaining air
header welds on Wednesday. We have plans
in place to replace them twice. We have
to get in position where we can defend it against other foes we might have such
as subcontractors that perform welds.
As far as the grout, we were
scheduled to start demolishing the interior next week. I understand CH2M Hill wants to come and take
a couple of samples. We may move
that. I do not think it will impact the
end date of it.
Mr. Hanks asked when are we looking
for Plant F to get on line?
Mr. Bone responded I think three and
half to four months.
Mr. Fennell asked what have we
agreed upon and what do we need to agree on?
Mr. Bone asked as far as Plant F?
Mr. Fennell responded yes. The water plant we see is slower than we
wanted, but it is proceeding. Where is
Plant F?
Mr. Bone responded everywhere I turn
I hit another wall, but it is going forward.
I have not gotten a written response from Mr. Cassel on our
remediation. I have two things about
that; one is stability of the plants for CSID and the other one is to protect
Lanzo’s rights, which I have done. It
was not my intention to upset anybody. I
have to do that. Hopefully everything
will get hammered out to everyone’s satisfaction. I think we are in this alone. I know you all sat out here in June of last
year and said: what is the contractor going to do? Can he afford to pay for this? Is it going to be $1 Million? What is the bonding company? Is it an insurance company? It is assured? You are going to get it done.
Mr. Fennell stated those questions
are still going through my mind.
Mr. Bone stated we are standing here
alone doing this. We feel we are not
culpable for everything; especially with the array of characters that have been
in our past, subcontractors and such. We
are standing here alone to get it done and we intend on doing it. If we have to work a few things out to get it
done, we will. We intend on getting it
done.
Mr. Fennell asked are you guys in a
position to get this done? I am worried
about you guys running out of money.
Mr. D’Alessandro responded we
are. We need some more money.
Mr. Fennell stated you see our
hesitancy because you are here today to see if we release some money. We are hesitant to do that when we have not
gotten what we wanted. How do we resolve
that issue?
Mr. D’Alessandro responded you need
to understand the position we work within also.
Everything to do with Plant F is self absorbed and we fire the extensive
corrective measures which need to be done.
I took the position to hire Mr. Bone, come here, kick the other guy out
and take over the job. He has been
mitigating with Mr. Cassel and the engineer.
I met with Mr. Cassel two weeks ago and gave him my commitment this job
will get done. We will do what we have
to do to get the job done. This is why I
am here in person.
Ms. Zich stated we wish it was
already done. I see a lot of work out
there yet to be done. Have we not paid
you everything up to date?
Mr. Bone responded you have paid up
to date, but there is an extensive amount of retainage. I took an extensive amount of money from my
company to put into the project. I need
some of the retainages given to me to go along with paying suppliers to get the
work done.
Ms. Zich stated I have worked in a
lot of construction and 10% is generally given when it is complete. That is why the retention is there.
Mr. D’Alessandro stated it is
generally given on projects of this magnitude.
The
recording picked up several people speaking simultaneously.
Mr. D’Alessandro stated you have
verbiage in the contract which allows for it.
Ms. Zich stated we also have
verbiage in the contract on when it was supposed to be finished. All we really want is to have it
completed. That is our main
objective. We do not want to be not
giving you money you think you need. We
are just concerned that we want to have it finished.
Mr. D’Alessandro stated I just took
control of the project 100% five months ago.
We were also relying on a major subcontractor to handle most of this
project. By the time I found out he was
in trouble it was a little bit too late.
We have a three and a half month delay on the roof alone. We had extensive problems with the design of
the roof.
Mr. Fennell stated that we
understand. It has been close to 10
months since we started to see issues arise.
What are you going to do with the money from the retainage?
Mr. D’Alessandro responded I am
going to pay some of the subcontractors and other bills on this project.
Mr. Fennell asked what is holding up
Plant F as far as the subcontractors?
Mr. D’Alessandro responded he is in
the process of securing everything now.
Mr. Bone stated I submitted the
subcontractors that we were going to use with the remediation team. The only thing holding them up is their scope
of work. They want to come in here and
get it done. I have to say to them; you
are going to do every one of these verticals and you are going to do from here
to here on the horizontals. That is what
I have to give to them. I have to give you
a procedure detailing that and I have to base this on something. We are getting the results right away from
the radiographs. We will have everyone
we want completed by Wednesday. The
longest thing out here is the air head because it is going to take two months
to fabricate it out. We are having it
outsourced.
Ms. Zich stated it says you want to
reduce the retainage 5%. I would prefer
a figure versus 5%.
Mr. Fennell asked retainage for
what; this one particular project in Plant F or the entire project?
Mr. Bone responded the whole
project. Right now it is at 10% and that
is not a contractual amount and then 5% is the requirement by Florida Statute.
Mr. Hanks stated let us hear what
our manager has to say.
Mr. Cassel stated as with every construction
project when you have one that has issues and as you try to work through it,
the contractor has the ability to request a reduction in retainage. There is a fine line of, shall we say,
choking the contractor and working with the contractor to get the project
completed. This is where we find
ourselves at this point. If we reduce
retainage, how do we reduce it so that the vendors impacted get their retainage
and yet we still maintain leverage with making sure the project gets completed
in a timely fashion?
Mr. Hanks asked is the idea of the
retainage to hold back funds so if there is an issue, there are funds for us to
take care of it.
Mr. Cassel responded it is a
combination of funds to do that, but you also have on this project a
performance bond from the main contractor as well as from his
subcontractors. You go after the bonding
company to step up to make it right.
What you end up doing is using the retainage to help fund the fight to
get the bonding company to do what they have to do. Is that a correct assumption?
Mr. Lyles responded it could
be. It is not necessarily the case
here.
Mr. Hanks asked Mr. Johnson, what
are your thoughts on this?
Mr. Johnson responded several months
back Mr. Bone sent a letter to CH2M Hill asking for the retainage to be reduced
to 5%. In researching Florida Statutes
we looked to see if this was something we needed to do, have to do or if it was
even advisable. What you find out is
that under a typical construction project you would reduce it from 10% to 5%. When you have amounts of money that are
subject to a bad faith dispute…
Mr. Lyles stated excuse me. This is important. It is a good faith dispute. The statute provides an out if there is a
good faith dispute between the contractor and the owner over the work and what
is going to be done to correct it. That
is a threshold that has to be met. I did
not want to interrupt you, but I wanted the record to be clear that is what the
statute calls for.
Mr. Johnson stated we looked at the
cost of finding issues with Plant F, the amount of letters from suppliers
claiming they have not been paid, as well as the overall schedule of the
project. At that time we responded there
were a handful of things that need to happen in order for us to recommend to
the District to reduce the retainage. I
agree with Mr. Cassel in there is a fine line between hindering the contractor,
and also projecting your own interest in the matter. My recommendation is to not turn it
loose. That is based solely on all the
issues we have in hand.
Mr. Hanks asked what is the dollar
amount we are faced with?
Mr. Johnson responded I think it is
$750,000. The contract is
$18,155,000. Some of that is not
subjected to the 10% retainage. There
are allowances so it is $17.5 Million and 10% of that is $1.7 Million. I think we are currently 60% or 70% spent. That would be probably close to $600,000 to
$700,000.
Mr. Fennell stated here is what I
suggest; we release 2.5% right now with the condition that it go to the
contractors you have to pay for Plant F.
Once Plant F is working we will go down another 2.5%.
Mr. D’Alessandro stated from what I
understand you have $400,000 to $500,000 in contract money you have to pay out. I paid all of the subcontractors that had all
the work to do and they went away on me.
They do not exist today. I am
stepping up to the plate having to mitigate all of this bad work. It has come to be $300,000 to $400,000. I paid everybody. If you give me 2.5%, it will be about
$350,000 to $400,000. That will be
enough to pay for Plant F deficiency. I
am not going to be able to pay the subcontractors. I still have to take $300,000 to $400,000 out
of my pocket, which I plan to do for Plant F.
I cannot take that amount out of my pocket plus another $400,000 to pay
subcontractors. The money is in the
contract. I need to start getting access
to something. We were told a couple of
months back that if we showed progress and we started mitigating solutions for
Plant F, they would recommend it.
Mr. Fennell stated Plant F has not
changed in six months. Where is my lever
here that I need?
Mr. D’Alessandro responded you will
still have $1 Million left.
Mr. Hanks asked what has changed in
Plant F physically in terms of a construction that is up and standing? What has changed out there in the last six
months? Have we gotten any closer,
physically speaking? I know a lot of
this has been discussions as to what the acceptable condition was and what
needed to change. Physically speaking;
what has gone on out there in the past six months?
Mr. D’Alessandro responded I had
someone else managing this project six months ago. Mr. Bone was not working here. When they discovered all of the problems with
Plant F, that person was fired. It has
taken Mr. Bone three months to figure out whether these problems are really
problems. It has taken a few months for
him to come to the conclusion that some of it is real and some of it is
not. You made me pay the subcontractor
and you made me give waivers for our subcontractors. Now you come back and say you took another
look at it and you do not like the levels, you do not like this, you do not
like that.
Mr. Fennell stated you are actually
making my argument for me as to why I should not give you anymore money.
Mr. Hanks stated so what you are
saying is you had pay requests. They
were approved. You got paid. You paid the subcontractors and then the
sequence of events is it got re-inspected and there were issues on it.
Ms. Zich stated not only did we do
that, but we had our engineers out there on the project to make sure everything
was going right.
Mr. D’Alessandro stated that is what
I say.
Mr. Cassel stated right now there is
a total retainage of $1.36 Million on the entire project. Of that $271,000 is retainage on plant F. The other $1,089,000 is retainage on the nano
plant. There is $466,000 left in Plant F
to reach the contract price of Plant F.
Right now with the retainage and what is left to pay on Plant F, there
is about $700,000 sitting there.
Mr. Bone stated there are a few
things outside of the tank that is part of Plant F. There is paving, the guard rail and other
things.
Mr. D’Alessandro stated we are
trying to deal with the bonding company for the contractor who went away to
help come up with some of the cost for Plant F.
We are running into resistance as of Friday. That is going to be my battle that has
nothing to do with you. This is why you
saw me out there earlier walking. I want
to see what has to be done. I am going
to have to step up to the plate and fix this.
I am going to have to fight with someone. It is going to be the bonding company. It might be CH2M Hill. I realize I have that coming. If you want to help me help you get it done,
once you told me there was about $400,000 still available for Plant F, there
are not more bills for Plant F, I paid them all, but that $400,000 is probably
enough to make the repairs. I need the
other retainage reduction for the rest of the project; to tighten up some of
the other bills. I am not going to keep
a nickel of it. I am taking money out of
my pocket. I will have all of the bills
paid off if you give me the retainage.
You can keep the other 5% until we are all done. I will never be in this room asking you for
another nickel.
Mr. Hanks asked counsel; what is
your take? Help shed some light on this
because I understand some of Mr. D’Alessandro’s issues. I hope he also understands our position and
our issues on this.
Mr. D’Alessandro stated I understand
you are there trying to make a decision.
Mr. Hanks stated we are trying to
make sure we reach a decision that is responsible. At the end of the day we want to get Plant F
up and running. We do not want to shoot
ourselves in the foot or step on our own toes with whatever acronym you want to
use on this that would cause things to slow.
By the same token we have to help make sure our interests are protected
because just as you have trouble with some of your subcontractors, and I am not
suggesting you are in that position, but it is possible that we go ahead,
release those funds and then; where is Mr. D’Alessandro?
Mr. D’Alessandro responded we have
been in business for 45 years and we plan to be around another 45 years. I have 45 years and never defaulted on a
project. We do 100% municipal projects.
Mr. Fennell asked what is Intrastate
doing now? Are they out of business?
Mr. D’Alessandro responded I hired
whatever people they had left because they had knowledge of the project. I hired a manager. I took over all of their equipment. I absorbed them and the project.
Mr. Cassel stated in your statement
you said all of the subcontractors for Plant F have already been paid up to
date; you have nothing outstanding or any claims on Plant F. So what you are really looking for is assistance
to get out of the hole that Intrastate dug you into on the nano plant. That is where most of the vendors are still
out there.
Mr. Lyles stated it is as if you
have two separate requests for reduction in retainage from 10% to 5%. The two projects are in entirely different
postures in terms of your tolerance for analyzing such request, I think. You have one that is relatively clean in
terms of payment, substance suppliers and you are at the point where
contractually you could be favorably considering a reduction of 5%.
Mr. Cassel stated that would be
based upon the turnaround that has occurred on that with Mr. D’Alessandro
bringing Mr. Bone in and taking over the project. The nano plant has turned around considerably
from where we were at before, but he has that hole he is still trying to catch
up and dig out of.
Mr. Lyles stated then you have Plant
F and we are not aware of any suppliers or subcontractors out there that need
to get paid. They have been paid. You have a good faith dispute on the job, how
to resolve it and whether the remediation plan is going to be implemented since
it has been signed off on. We will
provide something that can be inspected and final by CH2M Hill at the end.
Mr. D’Alessandro stated what I am
proposing on Plant F and whatever contract dollars are left there are to
possibly to take a schedule out of the repairs we are going to do. As we make the repairs, release those funds
so I can pay for those repairs. Plant F
will take care of itself as we start making the repairs.
Mr. Lyles stated one small
complication on all of this is on Friday I was made aware of a request for
mediation had been filed by counsel hired to represent Lanzo. Now we have a 30 day period to digest this
and another 30 days or so after that to have a mediation between Lanzo and the
District, which is a step towards resolving claims and avoiding litigation or
it is pre-litigation and a way to get cheap discovery and find out where
parties really are on both sides before you file a lawsuit. Sometimes it is one, sometimes it is the
other and we cannot tell you for sure which way this is ultimately going to go. You do have something new in this mix, which
is geared toward the litigation route initiated by Lanzo. Backing some of this up would be some
responses to some opinion correspondence indicating we will do this for
mediation element, but it is going to take us an extra ‘X’ months and it is
going to require extra payments to be calculated. It is not that all of the details regarding
Lanzo stepping up and doing the remediation at its expense have been conceded
or agreed to. These things are still up
in the air to a certain extent.
Mr. Bone stated we had to file that
within 30 days of getting the written remediation from Mr. Cassel. There were some outstanding issues. I tried to describe exactly what we were
doing. They were not really significant
as far as what we were identifying. I
have to protect our rights. There are so
many timely notices in this contract that if I did not do it, I would not be
doing my job.
Mr. Lyles stated by the same token;
if I do not relay to the Board that I work for that these other things are
happening now and that attached to these notices are time increments on the
order of four months for each of the things you responded to, it is part of
trying to make sure you have the whole picture.
In terms of calculating the amount that is the one the manager and the
engineer can live with on the retainage; I do not know that we have done that
yet.
Mr. Cassel stated we have not
calculated an amount.
Mr. Lyles stated I am worried you
would be comfortable with a binding process being signed off on by the
contractor for getting payment from this reduction in retainage to the
remediation efforts you described you are going to have to sub out. That is a mechanism you probably want to
explore. It helps us get from here to
there quicker using the funds that are there to pay. That kind of thinking is what I think you
have been looking for from everybody working on this project, including your
staff.
Mr. Hanks stated to recap here you mentioned
we have two projects and two retainage reduction requests.
Mr. Lyles stated we have one request
overall. What I am saying is it makes
more sense to treat it as two.
Mr. Hanks stated I think the rest of
the Board would agree that we are looking at this as two separate projects. You mentioned a couple of different
conditions and that one is more complete than the other and the other you are
trying to dig out of a hole. Which one
do you have concerns about reducing from 10% to 5%?
Mr. Cassel responded overall there
are some concerns; however, in trying to get the project accomplished with the
subcontractors that are out there and have been out there, Mr. D’Alessandro
found himself behind the eight ball trying to dig out and keep the project
moving. I do not think I would have on
the nano plant as much issue of reducing the retainage from 10% to 5% providing
that the dollars as they went out were potentially two party to the vendors so
we can make sure whoever is out there gets paid. Either that or a legal agreement stating that
every dollar will go to these following people.
Part of the concern of getting the project done is if the contractor
keeping the subcontractors going, the subcontractors are not going to perform
in a timely manner, which just drags your project out. That is part of my concern with getting the
nano plant going as fast as we can. We
know Plant F has been sitting stagnant for eight or nine months. We know, potentially, how to get it
fixed. We still have money to pay for
that and we still have retainage on that.
I am in favor of lowering the retainage on the nano plant portion to the
5% with an agreement from the contractor that it is going to these subcontractors
in these amounts of money. This way he
can cut the check, he can get a release and that gets the people off our
backs. It brings him up to date and
gives him some breathing room to proceed and push the project harder.
Mr. Fennell asked are there other
payments we are making as we go along?
Mr. Cassel responded we just cycled
them out last week.
Ms. Zich stated we have been paying
for everything as we went so we are not behind.
Mr. Cassel stated the most recent
payment went out February 16, 2011. It
is the January payout. The February
payout has the proposed reduction in it.
Mr. Lyles stated so the
recommendation would be to leave the Plant F retainage as is where we have this
long standing project. In order to get
the whole thing moving and keep the subcontractors, suppliers and vendors
interested in performing on schedule, I believe the manager’s recommendation
with the retainage going straight to vendors, subcontractors and suppliers is
to reduce that one to 5% and leave Plant F at 10%.
Mr. Cassel stated that is correct.
Mr. Fennell stated you are looking
at it as one project versus another, but I think the same pocket for him is
paying for both projects. I do not know
how that works for him.
Mr. D’Alessandro stated it would be
close enough as long as you would consider taking the remaining contract
dollars on Plant F and let us schedule the repairs so as I do them I can pay
for the repairs. Then I am ready to
fight with whomever I have to in order to get my money back; whether it is the
bonding company or Mr. Johnson. It has
nothing to do with the Board.
Mr. Fennell stated we went too long
trying to come to an agreement on Plant F.
I say nothing happens until you guys sit down and nail it; you know
exactly what you are going to do and what is going to happen. Then we con move forward. I have to see that first. We still have too little things happening
here. There are still some things we
have not figured out.
Mr. D’Alessandro stated the
remediation process started last November.
We had our first meeting a couple of weeks before Thanksgiving. I made a presentation on December 3,
2010. The big question was whether or
not the 5/16 plate was required for the construction of that tank. Until that was determined we could not go
forward with anything. It would have
been futile. We only got the written
response on February 2, 2011 and we had a meeting. The letter was dated January 28, 2011. I do not remember exactly when the meeting
was. We could not do anything until we
got that back.
Mr. Cassel stated I received
Wednesday from them what they are going to do with the clarifier grout, what
they are going to do with the stainless steel and what they are going to do
with the steel tank shelf. The only thing
that has not been hashed out in any formal written part is the issue about the
curbing at the bottom with the exterior wind, which is the wind girder situation. That detail has to be worked out as to how it
will be handled. Mr. Johnson; in the
contract with the things that are left to do, is there anything that could be
reassigned? Could they rework their
schedule values?
Mr. Johnson responded that is a good
question. I have to go back and talk to
some people.
Mr. Hanks stated or we can run afoul
of the bonding people.
Mr. Johnson stated the bigger issue
is we are taking $400,000, which is withheld for some reason.
Mr. Cassel stated the retainage on
Plant F is $271,000. The $466,000 is the
amount left against the Plant F lump sum.
Mr. D’Alessandro stated there is
$53,000 worth of costs that we have outside of the remediation that I have
identified we would have to do.
The
recording picked up several people speaking simultaneously.
Mr. Cassel stated I misspoke on the
$466,000. It does include the retainage. There is $270 retainage and about $270,000 of
work left.
Mr. Hanks asked do we have any idea
in terms of magnitude costs what it would run to do the repairs?
Mr. Johnson responded we put
together an internal estimate at CH2M Hill.
We came up with an estimate of $1 Million or more. They are proposing to try to repair the welds
in place. That will be less than $1
Million. What it is going to cost them
to do the re-welding and replace the grout as well as the other things involved
in that, it would be irresponsible of me to throw out a number. I know it will be less than $1 Million.
Mr. Hanks stated let me ask Mr.
D’Alessandro or Mr. Bone. What do you
think it is going to be?
Mr. Bone responded it is $137,000 to
replace the air header. It is $60,000 to
do the grout, which is $22,500 to demolish and take the dirt out. I have quotes from a subcontractor for
$14,000 to do concrete, grout work and the remainder is divided. I have a price from HMT to do all of the
verticals and all of the horizontals for the tank walls for $177,000. I have a quote from Surface Painting for
$80,000 to re-blast the paint on the wells and re-coat. The grand total is probably around $430,000.
Mr. Daly stated all of that added up
to $480,000.
Mr. Bone stated I do not know the
exact amount of the general conditions, which we put on there to have a superintendent
out there and a project manager out there.
Mr. Hanks asked do you have a
concern when it gets released? Are there
any concerns about operating in that matter?
What can we do internally to help facilitate them moving forward with
Plant F?
Mr. Cassel responded I think in
order to get the project done, for that work to get done, is a segregated draw
scenario. I do not think it would be an
outrageous request or an outrageous way to do it in such that it continues to
get the job done and get us to the point where we have a plant that is
operating and everyone has been paid. The
other issues; we sit down at the table and work them out after that.
Mr Hanks stated and that would be a
situation that we would be faced with regardless of whether or not we had a 5%
retainage or 10% retainage.
Mr. Cassel stated you still have the
delay issues and all the other component pieces in the contract that you have
to work your way through.
Mr. Fennell asked did we get a
recommendation from our staff?
Mr. Hanks responded I believe Mr.
Cassel was supportive of reducing retainage on the nano plant from 10% to 5%.
Mr. Cassel stated that is correct.
Mr. Lyles stated the only note I
want to circle back to is there was some discussion that there is a condition
attached to that, which is assurances of where the money is going to. There has been some discussion about an
agreement. I think the original thought
was a two party check.
Mr. Cassel stated either an
agreement or a two party check.
Mr. Lyles stated when you have an
agreement you end up with a dispute over what the agreement means or whether
there was performance. If it is a two
party check, then you know where the money went.
Mr. D’Alessandro stated a two party
check sends bad signals out there. I am
always going to pay the bills on this project.
I will give you consent from my surety company. I would rather have it that way.
Mr. Lyles stated they are looking on
a recommendation from staff on that one.
If you are comfortable with that, then we will make it work.
Mr. Cassel stated the surety is
ultimately responsible to us. SO if
anything does not go right and the surety has already guaranteed it upfront in
writing that all of this money went to these individuals and it does not, then
the surety is upfront acknowledging something that they are on the hook for
more than they are normally on the hook for.
Mr. Hanks stated Lanzo has come
in. They have not been the cause of all
the problems. They have inherited some
from their subcontractors. At the end of
the day we want to keep things moving.
Mr. Fennell asked I understand, but
what are we getting?
Mr. D’Alessandro responded you are
getting the ability from me to push the subcontractors and suppliers to hurry
up and get it finished fast.
Mr. Hanks stated we are helping them
have the means to go ahead and get the ball rolling on not only the nano plant,
but also Plant F.
Ms. Zich stated I am having a hard
time with this. Have I not been pushing
from the very beginning? Nothing has
been going well. I wish they were both
up and running right now, but that is not going to make it happen.
Mr. D’Alessandro stated I sympathize
with you and wish the same thing, but I cannot change the past. I can change the future if you give me the
opportunity.
Ms. Zich asked how far behind are we
on the nano plant? Is everyone paid up
to date on the nano plant?
Mr. Cassel responded no.
Ms. Zich asked how far behind is it?
Mr. Cassel responded that is what
part of this reduction is.
Mr. D’Alessandro this reduction will
put me in the position to catch up on all of this.
Ms. Zich asked how far behind are we
on the nano plant? We paid you for it,
but you have not paid the subcontractors?
Mr. D’Alessandro responded you have
held retainage on me. You do not
understand. When we hit the $8 Million
mark, which was $5 Million ago, we would have had retainage reduction and I
would not owe anybody. Because of the issues
we had we were not supported in the retainage reduction so I was not able to
pay everybody.
Mr. Bone stated a large part of this
is that Lanzo was paying Intrastate. Intrastate’s
inability to utilize the money to pay their subcontracts prompted notices from
their suppliers, which prompted us to get involved. When we got involved we were further behind
than we could have imagined.
The
recording picked up several people speaking simultaneously.
On MOTION by Mr. Hanks seconded by Mr.
Fennell with Mr. Hanks and Mr. Fennell voting aye and Ms. Zich voting nay the
Board approved reducing the retainage on the nano plant portion of the project
from 10% to 5% on the condition that the District receives assurances from
Lanzo’s surety and their agreement it is going to pay the subcontractors,
suppliers and generally all vendors.
Mr. Hanks asked do we need a motion
on Plant F and I am looking for some guidance on how to word it as per the
direction with Mr. Cassel working with Lanzo on the pay requests for the
remedial work on Plant F?
Mr. Lyles responded I do not think
you need a motion. Staff has heard the
discussion today. I think it is a matter
of administration that it be implemented along the baselines for the motion you
just passed. If you want to be clear on
the record that you are not approving the request for retainage to be reduced
from 10% to 5% as to Plant F, than that motion can be made.
On MOTION by Mr. Fennell seconded by Mr.
Hanks with all in favor management is directed to pay out the additional money
needed on an appropriate basis in order to consummate the repairs of Plant F.
Mr. Lyles stated and as to the
request for retainage to be reduced with respect to Plant F; you have approved
the nano plant retainage reduction. The
request is still before you and you do not want to consider that
favorably.
On MOTION by Mr. Hanks seconded by Mr.
Fennell with all in favor the request to reduce the retainage on Plant F was
denied at this time.
Ms. Zich asked how long until Plant
F is functional?
Mr. Bone responded about three and
half to four months.
Ms. Zich asked both of them?
Mr. Bone responded I thought you
said Plant F.
Ms. Zich stated I did, but I wrote
down before you said the plant would be ready in three and a half to four
months.
Mr. Bone stated I do not think it
will be final. We are still mowing
through the root of the programming and controls out there. We are looking at being able to do the start
up process in late May. I do not know
that I would get Mr. Johnson to concur with that, but that is where we have it
scheduled. We will not be able to
process water, but we will be able to fire the plant up in late May or early
June.
Mr. Fennell stated we understand you
had some issues here. We actually bailed
you out so go make us whole.
Ms. Early asked when you pay them
this retainage; on the next pay estimate should they bring in a release from
everybody saying they are all caught up?
Mr. Cassel responded that is one of
the things Mr. Johnson and I will discuss after the fact. We are going to drop from 60 days to 30 days
for a release.
FOURTH ORDER OF BUSINESS Discussion of Reduction of Retainage on the WTP and
WWTF Project
The above item
was discussed under the third order of business.
FIFTH ORDER OF BUSINESS Plant F Update
The above item
was discussed under the third order of business.
EIGHTH ORDER OF BUSINESS Consideration of Piggybacking from Florida Sheriff’s
Association for a 4X4 Loader
Mr. Cassel stated originally in the
agenda package was an agreement based on
a bid from the Florida Sheriff’s
Association. In looking at it and having
discussions with Mr. Lyles we need to get it from a municipality versus a Florida
Sheriff. It is on state bid as
well. All we need is the approval and we
can get the actual contract documents of how the State bid it. Typically the State bid is the generally
accepted process.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor staff was authorized to purchase the construction back
up by piggybacking off a State competitively bid contract.
NINTH ORDER OF BUSINESS Consideration of Work Authorization #60 for Phase I
Stormwater Culvert Improvement in the Amount of $285,000
Mr.
Fennell stated this is a lot of money.
What are you going to do with it?
Ms. Early responded it is going to
be a difficult culvert. There are
monitoring wells, a lot of utilities and existing storm drains we are going to
have to relocate. I have to get the
easements from the property owners. We
were originally thinking of going on the residents’ side, but we do not think
it is a good idea. We think it is better
to go behind the strip center. That is
where the monitoring wells are.
Mr. Hanks asked have we pulled the
plats for all the affected properties?
Mr. Cassel responded we have the
surveyor surveying both of them and looking for all the easements. I engaged Brewer and Associates three or four
weeks ago. He is waiting on the easement
search at this point. We looked at our
internal drawings. I have also been in
contact with both property owners. One
of them sent me a breakout of their utilities onsite. It appears it will be a complicated task to
get through there because they have their own gravity. The shopping center with Sam’s Club has its
own lift station. We are probably going
to have to look at a different path. The
question is separations and if we can get it down their parking lot or in the
area. That is going to be the tricky point. Having said that; some of that should have
been looked at when the initial grant recommendation was made.
Mr. Hanks stated we should not be
looking at where we are going to put this pipe now.
Mr. Cassel stated I understand that.
Ms. Zich stated I am also concerned
about the date. I asked Ms. Woodward for
a copy of the contract.
Mr. Cassel stated that is in front
of you with all of the end dates and timeframes that were in the proposal.
Ms. Zich stated when I asked Ms.
Woodward when the contract was executed she said she does not have an executed
contract.
Mr. Cassel stated we do not. The state is executing the contract and is
supposed to send me back a copy.
Ms. Zich stated we signed it in
October. The only reason I am concerned
about this is; how long is this going to take once we start the work because
the contract states the agreement shall begin on the date of execution and
shall end October 31, 2012. That does
not give us much leeway and we do not have anything that seems to be going in a
normal pattern. Everything is
later. Are we definitely sure we can do
this by October 31, 2012?
Ms. Early responded I feel we
can. I did talk to FEMA about that
because of the timeframe and not getting the signatures. They told me that 90 days prior to the
deadline, if there is a hold up for some reason, we can contact them and they
will give us an extension.
Mr. Cassel asked can we request an
extension now since they have not executed and it took them three and a half
months just to get us the executed document?
Ms. Zich stated I am concerned by
the time we get whatever we have to get done with engineering, by the time we
get the people who are going to do it, you are talking about October 31,
2012. We are now in March of 2011.
Ms. Early stated I do not think that
is unreasonable simply because of the signatures. They backdated it when we sent it in. We do not have a signed contract. I do not think it is unreasonable to ask for
an extension.
Ms. Zich stated after what has been
going on since I have been here with construction I am getting freaked out
about a deadline that we have to have this done by. We can go to them 90 days before for an
extension and they decline us.
Ms. Early stated I also contacted
him with regard to anytime Ms. Woodward or Mr. Cassel spend time on this
project documenting or filing for the payments or they need me out in the field
and we attend meetings; if all of that is documented by the District, it can go
towards the District’s 25% you have to kick in.
In other words if there is $100,000 and CSID has to pay $25,000, but $15,000
they can show they used labor, that is the $15,000. I will send the email I have from them to Mr.
Cassel where they agree to this.
Mr. Cassel asked did you do the
level of effort I requested?
Ms. Early responded yes. I have it.
Mr. Fennell asked do you actually
have a new proposal?
Ms. Early responded no. We walked it.
We think we can get it in there.
We are going to have to put in a couple of manholes and maneuver it a
little bit. That culvert was identified
as the most beneficial location. That is
how we came up with the location. Any
location in the District is going to be difficult because everything is built. That is why I put so much money in for
construction because I figured there was going to be a lot of utility
relocation.
Mr. Hanks stated this $285,000 is
just for design and permit. Is that
correct?
Ms. Early responded design and
specifications, any utility relocation plans, the headwall design, getting the
easements and working with the property owners.
Mr. Fennell asked is this $285,000
for engineering?
Ms. Early responded this is for
engineering. The other engineering that
was separated because Mr. Cassel did not want to do was permitting. We might find the permitting is not going to
be that difficult. Maybe that will be
incidental. I do not know.
Mr. Fennell asked is $285,000 the
total for engineering services for the entire project?
Ms. Early responded no. It is not for inspection services. We are doing the preliminary permitting. I am going to show you what I got approved.
Ms. Zich asked once we dig the first
shovel, how long does it typically take to do this?
Ms. Early responded we are hoping
they will do it in 60 days because we have companies that we do not want to be
out of business. We have to get across
Ramblewood Drive quickly. We cannot put
that out of service.
Ms. Zich asked so the whole project
will be 60 days?
Mr. Hanks responded it depends on
what you are really dealing with in terms of the route. You might go into an area where you have
roots from trees.
Ms. Early stated this is why I
brought Mr. Colussy. He did the removal and I think they actually had to relocate a
tree.
Mr. Hanks stated that is 60 to 90
days right there.
Mr. Fennell stated so you are
thinking the construction is going to be $2.2 Million and the total $2.75
Million. That will be about $540,000 for
engineering.
Ms. Early stated that is correct,
but we are not going to use that. I put
that in as a high number in case something unforeseen comes up. If it costs more for the construction and we
do not use the money for the engineering, they will still include it. It is a total cost. The engineering that was approved is $412,000
just for the design. The $285,000 is for
the design specifications and preliminary permitting.
Mr. Hanks stated I understand three
quarters of this is going to come from Federal Funds, but I still have a hard
time understanding $285,000, even though it is a ground field development or
redo, to run it down a shopping center parking lot, identify the crossings and
the conflicts and get it permitted. I
think it is seriously out of the range that is reasonable for that.
Ms. Early stated I had five other
people look at this in my company. I did
not do this by myself. We started at
$310,000. Mr. Cassel and I went through
it and took some things out. We
negotiated and got it down to $285,000.
That includes getting the easements, working with the surveyor and there
are several monitoring wells. I think we
are going to have to do some drainage calculations along Ramblewood Drive on
the Sam’s Club side
Mr. Hanks stated I just looked at
this and there is over nine months for a design period. We have 12 to 18 months of total time from
your authorization until it has to be done and have the paperwork to FEMA. Three months are going to be for
construction. One month towards the end
is going to be for finalizing the paperwork.
From 18 months we are down to 14 months.
You are going have a big push to collect the information for the
existing utilities. You are going to
have a big push to get the design done.
There are no hydraulic calculations that you need to do.
Ms. Early stated I do not know. I am concerned about the drainage on the
south side of Ramblewood Drive.
Mr. Hanks stated if we look at the
drainage on the south side of Ramblewood Drive, it is a volume metric count. That is an hour or two of a professional’s
time. We are not talking days. We are not talking weeks. We are not talking months. Seeing the price on this I am absolutely
shocked. Are tree removals and
replacement included in this lump sum, in terms of permitting? What other components are falling outside of
your scope of services?
Ms. Early responded the only things
not covered under this are inspections services and final permitting. This is a lot of money. We might find out permitting is not going to
be anything and I will not come back to ask for additional permitting. If there is a fiber optic cable or something
we require with the monitoring wells
that will take some additional time, then I will come back. Otherwise, I am hoping we can get this
designed and ready to go to bid, and not in nine months. We want to fast track this.
Mr. Hanks stated I am looking at you
two right now and thinking if you cannot get a design together and turn this
around to get it into the agencies within a month, 60 days tops, why are you in
engineering? This is where I am looking
at the majority of the funds going. You
cannot have that many people working on the project.
Ms. Early stated that is why I gave
you a list of people who are going to be working on it. I will need a structural engineer for the
head rolls.
Mr. Cassel stated surveying is
already underway.
Ms. Early stated I actually brought
Mr. Bohorquez back from the Keys to work on this project. I am bringing him back here in a week to get
started on this. We want to fast track
this. We do not want to sit on this
project for nine months. We want to get
it in and get it done. It would be great
if we could get it done before the rainy season comes.
Ms. Zich asked are we positive we
are going to get the signed contract back?
Mr. Cassel responded I received an
email from Mr. Williams this week saying it was executed and they were sending
it back this next week.
Ms. Zich asked what if someone
decides they are not going to give out any funding?
Mr. Fennell responded we are stuck.
Ms. Early stated we might get
started and find out their property owners do not even want to work with
us. We do not want to draw anything
until we contact the utilities and the property owners.
Mr. Cassel stated I contacted the
two property owners. Their initial
response is they want to know where the pipe is going. They do not have a big issue with it. Once I assured them there was not going to be
any cost assessed to them, they were both amenable to getting the information
and taking it to the appropriate parties they have to take it to in order to
make it happen. I already started that
ball rolling. I do not think there will
be an issue.
Mr. Hanks stated it is just the $285,000;
the District could hire their own engineer, pay the insurance, pay the other
stuff and have somebody here for a full year to take care of it. Granted, they are not going to have some of
the specialties you guys have, but they will have someone available to take
care of other issues as they come up. I
just do not see this as being a complicated project; not $285,000 complicated. If we go ahead and lunge into this, as far as
establish the utility location, let us start nailing that stuff down.
Mr. Fennell asked do you want to
negotiate the cost of this?
Mr. Hanks responded I think $285,000
is too much.
Mr. Fennell asked do we have the
time to negotiate this?
Mr. Hanks responded I do not know.
Mr. Fennell stated we can authorize
a certain amount of money, like $50,000, to get this started and then you can
negotiate the terms of the price. How is
that?
Mr. Hanks responded I think we can
work with that.
Mr. Cassel stated I received an email
last week that says,”I should be able to have a scanned signature page no later
than next Wednesday.” The original copy
will be mailed to us.
Mr. Hanks MOVED to authorize $50,000 for
CH2M Hill to start the stormwater culvert project while Mr. Hanks discusses specifics
on the scope of service and Mr. Fennell seconded it.
Ms. Early asked are we going to
negotiate by the next meeting?
Mr. Fennell responded yes.
Ms. Early stated we cannot invoice
unless we get something signed.
Mr. Cassel stated we can authorize
$50,000 against work authorization 60 with the balance to be negotiated and
determined. That would give us the
ability to start invoicing against the work authorization.
Ms. Woodward stated I am not sure
how much of an issue this is going to be.
If no work has been done on it, it will be a month before I pay my first
invoice on it anyway. You will be back
here for a meeting.
Mr. Hanks stated but Ms. Early is
going to need something to track and charge it against.
Ms. Early stated I need a signature
to do something within CH2M Hill.
Mr. Cassel stated we can give you a
copy of the motion from the minutes to start the $50,000 against work
authorization 60.
Mr. Daly stated make work
authorization 60 for $50,000 and then have a second work authorization for the
rest.
Ms.
Early stated I have a question. Work
Authorization 60 does say a lot of stuff for $50,000.
Mr. Hanks stated with the
understanding, as a point of clarification on Work Authorization 60, that
$50,000….
Ms. Early asked why do you not just
authorize scope one through six for $45,000?
On Motion by Mr. Hanks seconded by Mr.
Fennell with all in favor the previous motion was amended to approve items one
through six from work authorization 60 for a total cost of $45,000.
The
record will reflect Mr. Fennell left the meeting.
TENTH ORDER OF BUSINESS Staff Reports
A.
Manager
·
Monthly Water
& Sewer Chart
Mr. Cassel stated we are internally
continuing to try to nail down our numbers.
Mr. Stover and his crew are doing some analysis and calibration on our
meters to make sure we understand what our readings really are and make sure
they are correct. Again; if we do not
have good data going in, we are going to get skewed lines. We are trying to nail down every gallon we
have.
·
Utility Billing
Work Orders
Mr. Cassel stated the inquiries are running a
little bit higher than last year, but the misreads and meter calibration tests
are running about the same as this time last year.
Mr. Daly stated point of note
regarding the calibrations and verifications; the city charges $25 and they
want to make it $50. We do not charge
anything so we might want to look into that in the future.
Mr. Hanks asked does that negatively
impact our performance?
Mr. Daly responded no, it does not. In a lot of cases we already check the meter
before the bill is sent out. We try to
contact them by phone. We already tried
to check it, but then they want the calibration and another check. You have a half an hour for two crew members
to go out and check.
Mr. Hanks asked is their a fair
amount of repeat for calibration? Do we
have people who frequently utilize this?
Mr. Daly responded we do. So it is something to think about.
Ms. Zich stated as long as we do not
have to go out too many times I think it is kind of nice to talk to the person
every once and a while.
Mr. Hanks stated at the end of the
day if we have someone go out and check things, it is another set of eyes that
is out there in the area to see if there is another issue that is going
on. I do not think we can assign a
dollar value to that person being out there.
It may be an inconvenience, but it may also send the message that we are
going to identify the issue.
Mr. Cassel stated it is a lot of
positive PR that we are out there being proactive.
B.
Attorney
There being
nothing further to report, the next item followed.
C.
Engineer
·
Monthly Aerial
Photographs
·
Project Status
Report
Mr. Johnson stated there is still a
fair amount of work to do inside. We
have worked with them and gave them some leniency on installing equipment
before the room is on. In talking with
my inspector and construction manager, he said they are doing a good job of
protecting the equipment in there. This
has actually helped them in trying to mitigate further delays. A lot of the current issues are going to
surround electrical. They are going to
have to start setting switch gear panels and what have you, and pulling wire. There is quite a bit of wiring in there.
Ms. Zich asked when do you see that
being complete?
Mr. Johnson responded to the point
where we have completely turned everything over to the District and we are
offsite, six to eight months; especially given the road blocks they continue to
run into out there. If everything goes
perfectly; maybe four to six months, but I have a tough time believing that.
Ms. Zich stated so do I.
Mr. Johnson stated I do not know
that four to six months is for substantial completion or final completion
because final completion is another month to two months on top of that. Another area we are helping them out with is
programming. We are allotted by contract
150 days to do the programming. We
actually did the programming outside of the server so we can be 90% done with
the programming and then all we have to do is install it in the computers and
PLCs. We still have not gotten that
equipment from the contractor. This is
something we are waiting on.
We are trying to work as hard as we
can to help the contractor not have additional delays, but when we are waiting
for equipment to show up that we need for our piece of the work, it makes it
difficult. We are hoping to have the
equipment here on March 7, 2011. We can
drop the programming into that computer, start doing our portion and hopefully
have it back to the contractors as soon as possible so they can wire it
up. There is a substantial amount of
work left to do.
Mr. Hanks asked is there anything
else? I have a couple of items. Tuesday night was the Taste of Coral Springs. I ran into our Mayor who is making a
remarkable recovery. He wanted to remind
me that he is looking for the District’s help again this year on the Waterway
Cleanup. That is occurring this
Saturday, March 5, 2011 at Riverside Park.
I just wanted to pass that along to everyone.
Mr. Cassel stated we already
notified Mr. Daly and staff.
ELEVENTH ORDER OF BUSINESS Approval of January Financials and Check Registers
Ms. Zich stated I think we are looking pretty
good. Our debt service is 1.6. That is great. Everything seems to be going along well.
Mr. Hanks asked are there any
concerns Ms. Woodward?
Ms. Woodward responded no. We have aligned ourselves so that we will
have our finances in order with the debt service coverage. That is really the overwhelming thing you
have to be concerned with over the next four years. It runs just over $4 Million a year and that
is for a four year period before it drops back to just over $3 Million a
year. A lot of what we are going to be
collecting in the way of increased utility revenue is earmarked for debt
service. It is not additional money to
do additional projects with. We are on
target. We watch it and tackle any
things that look like they will become a problem on a monthly basis.
On MOTION by Ms. Zich seconded by Mr.
Hanks with all in favor the financials for January 2011 were approved.
TWELFTH 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