MINUTES OF MEETING
NORTH SPRINGS IMPROVEMENT DISTRICT

The regular meeting of the Board of Supervisors of the North Springs Improvement District was held Wednesday, October 7, 2009 at 4:55 p.m. in the district office, 10300 N. W. 11 Manor, Coral Springs, Florida.

Present and constituting a quorum were:

Steve Mendelson President

David Gray Secretary

Vincent Morretti Assistant Secretary

Also present were:

Doug Hyche Dennis Lyles Jane Early Rod Colon Jan Zilmer Kay Woodward • Dan Daly Sean Skehan Nick Schooley Joe Sabino K.C. Sentz Mary Oviedo

District Manager District Counsel District Engineer Director of Operation Human Resource Director Accountant CSID Director of Operations CH2M Hill Drainage Supervisor HBC Clubhouse Manager

FIRST ORDER OF BUSINESS Roll Call

Mr. Hyche called the meeting to order at 4:55 p.m.

SECOND ORDER OF BUSINESS Approval of the Minutes of the September

2, 2009 Meeting

Mr. Hyche stated the next item is approval of the minutes of the September 2,

2009 meeting. Are there any questions or comments on the minutes? There not being any,

On MOTION by Mr. Mendelson seconded by Mr. Gray with all in favor the minutes of the September 2, 2009 meeting were approved as submitted.

THIRD ORDER OF BUSINESS Consideration of Audit Engagement Letter

with Berger, Toombs, Elam, Gaines & Frank for the Period Ended September 30, 2009

Mr. Hyche stated the next item is consideration of the audit engagement letter

with Berger, Toombs, Elam, Gaines & Frank for the period ended September 30, 2009. Mr. Gray stated the fees described in this letter will not exceed $35,000 unless the scope changes. Is that within the price range we had anticipated?

Mr. Hyche responded this is the auditor who does your audit every year and that is basically the same price as last year.

On MOTION by Mr. Gray seconded by Mr. Mendelson with all in favor the engagement letter with Berger, Toombs, Elam, Gaines & Frank to perform the audit for fiscal year 2009 was approved.

FOURTH ORDER OF BUSINESS Consideration of Interlocal Agreement

with Broward County Providing for Landscape and Irrigation System Evaluation to be Conducted within the Water Utility Service Area by Broward County NatureScape Irrigation Service for a Five Year Period with a Cost Share Support in the Total Amount of $18,848 Beginning December 6, 2009

Mr. Hyche stated the fourth item is consideration of an interlocal agreement with

Broward County providing for landscape and irrigation system evaluation to be conducted within the water utility service area by Broward County NatureScape Irrigation Service. You enter into this every year. They look at your common areas and some of your irrigation and give suggestions on how to conserve water.

Mr. Gray asked do we get any benefit out of this? Is this something we are required to do?

Mr. Hyche responded it is required under a BMP and is used in your consumptive use permit application as a conservation method.

Mr. Gray asked does everybody participate every year?

Mr. Hyche responded yes.

On MOTION by Mr. Gray seconded by Mr. Mendelson with all in favor the interlocal agreement with Broward County for landscape and irrigation system evaluation within the water utility service area by Broward County Naturescape Irrigation Service for a five year period with a cost share support in the total amount of $18,848 to commence December 6, 2009 was approved.

FIFTH ORDER OF BUSINESS Approval of Right of Way/Surface Water

Management Permit(s)

A. County Line Road West Phase 1

Outfall from County Line Road West Phase 1 Stormwater Drainage System to the District C-2C Canal Located West of Nob Hill Road, North of the Booster Station and FPL Facilities, City of Parkland

Mr. Hyche stated the fifth item is approval of right of way/surface water

management permits. Section A is the County Line Road West Phase 1 outfall from County Line Road West Phase 1.

Ms. Early stated this is the section of County Line from Nob Hill Road west towards FPL and we are in to Broward County for permits and they require a surface water permit and North Springs approves the surface water permits.

On MOTION by Mr. Mendelson seconded by Mr. Gray with all in favor the surface water management permit for County Line Road West Phase 1 was approved subject to the conditions listed in the engineer's review letter dated September 22, 2009.

B. Parkland Reserve

Construct Entry Feature within Tract R-1 Located within the Center Median of East/West Road at Nob Hill Road

This item was tabled.

SIXTH ORDER OF BUSINESS Award of Contracts

A. Drainage Pump Station No. 2RTU

Mr. Hyche stated item six is award of contracts. The first one is for drainage pump station no. 2RTU, the telemetry.

Mr. Mendelson asked when did these bids go out? Were these bids in the paper? Mr. Colon responded on this one we obtained competitive quotes.

Mr. Mendelson asked does it go out to a preferred bid list?

Mr. Colon responded we sent it to as many people as we could who are competent to perform the project and we received two quotes. ADS Engineering is doing work for us now on other projects.

Mr. Mendelson asked Nick, have you checked this and do you know what is going on with pump station no. 2?

Mr. Schooley responded basically I do, we have to do this under the permit.

Mr. Colon stated South Florida Water Management District gave us a grant many years ago to have this work done and the work was never executed. A couple of months ago you authorized pump station no. 1 to have some telemetry put in and now they are requiring us to put it on pump station no. 2 and two of our amil gates so there will be more to come but we have asked them to help us out and the agreement was pump station no. 1 and no. 2 this year and next year we will do the amil gates. They have agreed to expand the project a little bit and allow us some time to fund it.

Mr. Mendelson asked the low bid is $34,000?

Mr. Colon responded yes from ADS Engineering. ADS Engineering is the one that did all the telemetry for our meter replacement program and they are doing pump station no. 1 right now.

Mr. Gray asked are they doing a good job on the first one?

Mr. Colon responded they are doing a good job.

On MOTION by Mr. Gray seconded by Mr. Mendelson with all in favor the contract for the drainage pump station no. 2RTU was awarded to ADS Engineering, PLLC in the amount of $34,800.

B. Stormwater Pump Station No. 1 Improvements

Mr. Hyche stated the next item is stormwater pump station no. 1 improvements.

Ms. Early stated this is the bid we took a few months ago and discarded the low bidder and went with Florida Sewer and Water who has since gone out of business. Rod contacted some people who are qualified and was able to obtain two bids. Intrastate Construction Corp. is the low bid at $270,000. It is more than we awarded the first bid, which was about $229,000.

Mr. Colon stated at the last meeting you voted to reject all bids. We then contacted the people who had bid before.

Mr. Gray stated I remember Intrastate was one of the bidders before.

Mr. Lyles stated I think the point is in-between the time this project originally went out and last month when it came in and we had not the first but the second problem with an. apparent low bidder Florida law changed and increased the threshold that would allow you to solicit direct proposals and negotiate directly with a contractor up to $300,000. Staff made a determination based upon the issues that had arisen with the first two to ask the board to reject all bids, which it did and allowed staff to directly negotiate so long as they were under that $300,000 threshold. They came back with somebody they can represent to you as a qualified, experienced bidder in this particular area of expertise.

On MOTION by Mr. Mendelson seconded by Mr. Gray with
all in favor the contract for stormwater pump station no. 1

improvements was awarded to Intrastate Construction Corp. in the amount of $270,000.

SEVENTH ORDER OF BUSINESS Staff Reports

A. Manager

i. Request for Water, Wastewater & Drainage Services

Mr. Hyche stated the first item is informational and is a request for water, wastewater and drainage services from a landowner in the wedge property. This is his letter to the district requesting that we provide water and wastewater and drainage services to him and to be included if the district expands its boundaries.

Mr. Lyles stated at your most recent meeting you authorized staff to proceed with the necessary background work and put together a package and it is an extensive package you have to put together and submit to the legislative delegation to get a boundary amendment or any other amendment to our special act. We contacted the staff and gotten this lined up to go. We have been working with several property owners and their representatives and on the way here I had another conversation with the engineer who is preparing a revised boundary for the district to take into account these parcels of property that we expect to come in. There are a couple that may or may not and there are three that are firm at this point and have submitted written requests to be included.

Mr. Colon stated we have received letters from WCI, Bruschi and also from Huizinga Holdings to be included in the district. It is really up to the board if we want Mr. Lyles to proceed to expand our jurisdictional boundaries. I think it is actually a good thing because it will eventually bring revenue into the district. It corresponds with the package I have in front of you now. At the last meeting Mr. Gray had asked to see a copy of the LEC plan and in the LEC plan we are mandated to put in a 3 mgd R.O. plant. We don't want to end up like Palm Beach County where they have extra capacity. We want the customers to go along with that and I think expansion is always good if we are going to have the revenue base to pay for these projects. It is seldom that

we are presented with an opportunity to have people asking us to come into our district. If we have to build a plant anyway we can build it to accommodate some extra future growth and get some extra revenue for the district.

Mr. Lyles stated they all understand there are certain basic assessments they have to pay just to be part of the district and then once they start to develop and need lines installed, drainage, and things like that, that is going to be a higher assessment they are going to see from the district for whatever the benefit is to their property. We are proceeding with that based on direction at the last meeting. We have three written requests with legal descriptions to come into the district from substantial parcels of property and their owners. There is a fourth substantial owner of agricultural property owned by a farmer names Hendricks that is being actively used as agricultural and they are not sure they are ready yet. They know that one day they are going to want to develop that property or something else will be done with it but they are not sure whether they want to do it now or maybe do it later. In another week or two we are going to be past the deadline to file what we have to file. Maybe in a year or two they will come back.

Mr. Mendelson asked will building take place after this guy jumps in or out, it is not going to start before?

Mr. Lyles responded it could.

Mr. Mendelson stated that could reshape what we have to do financially if this guy is holding off and then says we want in.

Mr. Colon stated one of the points that Mr. Lyles made to him is we can't guarantee that he is going to have water or wastewater or drainage services if he holds off.

Mr. Lyles stated he has a lot more property on our boundary than the wedge property. The initial discussion that I had is the wedge property and what is going on right now but what he wants to talk about and consider is all of that property. It is a bigger decision for him than just the relatively small piece of his at least in the wedge property. We are having discussions. They understand there is no commitment on our

part to do anything for them including amend our boundary if a few years from now they want to come in and resize the plan and the lines. Whatever it ends up costing to do it to make up for the fact that he didn't come in is going to be on his dime.

Mr. Colon stated he is zoned agricultural right now and I don't think he wants to pay $100 per acre.

Mr. Lyles stated I have talked to his planner and his lawyer and they know the issues and they know what our deadline is. Eventually we know what they want to do, it is a question of when.

ii. Discussion of Heron Bay Commons Management Contract

Mr. Hyche stated item two is discussion of Heron Bay Commons Management contract and Mr. Colon has put together a PowerPoint presentation. The board has requested that we look at the numbers.

Mr. Colon stated the contract expired on September 30th. At the last meeting the board requested that we do an analysis as if we wanted to bring it in-house or renew the contract. Right now they are operating without a contract. The three options are to renew the contract with WCI, bring it in-house or go out to bid. We did an analysis of the existing contract and there are 21 category areas. We concentrated on the fixed areas which is six areas we felt could be influenced. Out of the six areas the biggest one is the management fee. At the present time we are paying $60,265 to WCI. If we were to take it in-house it would be zero dollars. However, when it comes to personnel costs we set up a matrix of what it would actually cost if we were to bring those employees in and have them be NSID employees. It would cost us $309,000 per year as opposed to $265,000 for WCI so it would be more money to bring these employees in-house based on the benefits package. We factored all of that in and these are pretty solid numbers.

Mr. Mendelson asked when would that take place? What is the transition plan?

Mr. Gray stated it is $265,000 versus $309,000 so it is a difference of $44,000 more.

Mr. Colon stated yes but you have to take into consideration that we are not paying the $60,000 management fee. Towards the end of the PowerPoint I did a

breakdown of what it would actually cost. The first area is management fee, the second is personnel cost and the third one is telephone. We had a meeting with Mr. Sabino and he said we could eliminate two phone lines that he is not using and by eliminating the two phone lines we would pay $4,800 opposed to the $9,000.

Mr. Gray stated we could do that with WCI as well.

Mr. Colon stated we could but we are coming up with areas that can be improved. Certain things can't be improved such as FPL. Because the district gets preferred pricing on things such as chlorine by taking the pool and spa maintenance in- house we think we would be able to cut the cost by more than half.

However, the insurance cost would go up. It is going to cost an extra $14,000 to bring this in-house. You are dealing with lifeguards and general liability so it is going to be an increased cost of $14,000.

The final cost just on those areas it is $348,000 if we were to go with WCI or $338,000 if we were to bring it in-house so it is only a savings of $9,000. The question we really want to ask is, is it worth the aggravation for $9,000.

Mr. Gray asked can we get bids from other management companies?

Mr. Colon responded yes, that is one of the options. You can renew the contract, take it in-house or we can go out to bid.

Mr. Mendelson stated one of the things that is very important to the people who go there is P.R. and whoever is going to run this has to be up on that because they are paying for a luxury and they don't want to know what's wrong they just want to be able to use it. If we talk about a management company it has to be a super competent company that has done this before and the personnel who work for them have to understand this is a people to people business.

Mr. Sabino stated I don't have to remind the board that the tennis program is a sensitive area. We give a lot of attention to the people who play tennis and the tennis program. There is also the management of banquets.

Mr. Colon stated Mr. Sabino had written a letter that he wanted to remain confidential until today that I will pass out to the board. He had some other ideas that were not incorporated into the PowerPoint presentation.

Mr. Gray stated regardless of who manages it the savings you were talking about such as the telephone and chemicals you could achieve anyway.

Mr. Colon stated they outsource their pool cleaning. It would be like us trying to sell chemicals to the outsourced company which is probably what they were trying to make money off of. This scenario was bringing the pool cleaning in-house.

Mr. Mendelson asked who do we have in-house to do that?

Mr. Sabino responded I am qualified to run an aquatic facility.

Mr. Mendelson asked what kind of fee do they have for chlorine?

Mr. Sabin responded now we are paying a pool company and whether it is this pool company or another one we have taken bids from they are basically giving us a discount off of retail price. We are getting a 10% to 15% discount off retail price for our pool chemicals. It is cheaper than a private company buying chemicals.

Mr. Mendelson asked is there a generator set up for the pool?

Mr. Sabino responded there is no generator.

Mr. Mendelson stated do you think it would be wiser to go in-house?

Mr. Sabin responded I think it is wiser to go in-house because we would have more control.

Mr. Gray stated I would like to sell the facility to the association when the economy turns around.

Mr. Colon asked what about the bonds?

Mr. Lyles stated other CDDs and special districts have at the request of the homeowners facilitated a conveyance. The homeowners agree to issue whatever the bond amount is to pay for it, to purchase it essentially.

Mr. Gray stated my goal long term would be to sell it to the association.

Mr. Lyles stated in essence it would be a reimbursement since we have already issued bonds to build it and they could reimburse us in some way, shape or form and do a financing as the association.

Mr. Gray stated I wouldn't want to take it over because I think it is an aggravation that is not part of our main job description so to speak. It is not something we do.

Mr. Lyles responded that is true and since Mr. Colon asked me for any input I might have I would also point out that our numbers go up, there is cost of living increases and things. If we renegotiate the existing contract and lock in some of these savings that Rod and staff have identified I think you can get the cost of having it done by the current management structure down to where it would be comfortable and reasonable for the residents. At the same time they handle the problems and they by all accounts have been doing a more than adequate job since they have been involved. I think just the fact that it is a pool and it has the kind of liability exposure even with the insurance increase in the premium that also is something we won't control year over year. This is just a baseline number and in our case it is probably going to go higher than what we will negotiate and lock in for a contractor to do and eliminate any liability for the district. What is more likely to happen is the second or third year of this arrangement they are going to flip and you are going to see our numbers have gone up more than theirs have.

Mr. Colon stated we can always go back to WCI and have them lower their price

too.

Mr. Gray stated let's rebid it and if you want to keep them negotiate it lower. I don't see us saving $10,000 since half of that was just on the phones, which we can save anyway. So we are only saving $5,000 and for $5,000 I wouldn't do it. I would like to get bids from other management companies and then we can renegotiate with WCI if we choose to do so.

Mr. Hyche asked are we going to competitively bid this?

Mr. Gray responded yes.

iii. Update on the Wedge

This item discussed earlier in the meeting.

iv. Water Production Reports

Mr. Hyche stated the next item is the water production reports copy of which are included in your agenda package.

v. Utility Billing Work Orders

Mr. Hyche stated the next item is the utility billing work orders copy of which are included in your agenda package.

B. Attorney

There not being any, the next item followed.

C. Engineer

i. Consideration of Work Authorization No. 192 Preliminary Stormwater Design for the Wedge Property for the Lump Sum Cost of $8,000

Mr. Hyche stated this work authorization is for preliminary stormwater design

for the wedge property, however, I think at this time we need to table this until we actually get the boundaries moved. This may be a little premature.

Ms. Early stated this is not for the entire wedge, this was just for Huizinga Holdings. Craig Unger wanted to know for his 650 acres what the impact would be. Huizinga Holdings agreed to reimburse the district for the cost because they wanted this hydraulic model to include their property. That is what this is, it is not for the entire wedge, it is just preliminary for the one parcel.

Mr. Lyles stated they are willing to front the money and if the district is successful with the annexation then they want credit for it.

Mr. Colon stated they want to pay for it and only if we are successful in getting our jurisdictional boundaries expanded then we would reimburse them under a developer's agreement.

Mr. Gray asked do we have something in writing from them saying they will do that? Do we have an agreement?

Mr. Lyles responded no but I suggested to the manager if he wanted to take this up today and have the board approve it contingent upon that very provision being in the development agreement that they have asked us to work on which outlines the responsibilities of the district and them going forward and hooking up and things like that your approval would be contingent upon the necessary language being developed and the agreement being approved and signed by both the board and the developer.

Mr. Gray stated as long as the agreement is that they will pay us back regardless of the result.

Mr. Hyche stated if there is no movement of the boundaries there is not going to be an agreement so they are stuck for that cost.

On MOTION by Mr. Gray seconded by Mr. Mendelson with all in favor work authorization 192 for the preliminary stormwater design of the Huizinga Holdings property in the lump sum amount of $8,000 was approved subject to an agreement that the developer will be responsible for the payment of the cost of the work authorization and to be reimbursed only in the event that the district boundaries are expanded to include said property.

Ms. Early stated we also have an amendment to work authorization no. 186 which I have distributed to the board.

Mr. Skehan stated this is an amendment to an existing work authorization to add front end documents to the specifications that were not included in the previous work authorization. The increase is in the amount of $4,800.

Mr. Gray stated we are already doing the booster pump station.

Ms. Early stated we did the design.

Mr. Gray asked what is the expected cost of the booster pump station? Mr. Colon stated we believe it will come in around $280,000.

Mr. Gray stated so it is $4,000 on a $280,000 budget.

Mr. Colon stated the total cost that we have paid to CH2M Hill on the work authorization was $97,540 so they are asking for an additional $4,000 for the bid documents.

Mr. Skehan stated these were excluded from the scope of work of the original work authorization.

On MOTION by Mr. Mendelson seconded by Mr. Gray with all in favor the amendment to work authorization no. 186 in the amount of $4,000 was approved.

ii. Project(s) Status Report

Mr. Skehan stated as additional information on the alternative water resource grant application that was submitted to Broward County several months ago, that application was recommended for approval and approved by the Water Advisory Board of Broward County. That was a planning document we have talked about in the past with Mr. Colon and Mr. Hyche and Broward County has approved a 50% funding of the work authorization for that estimated originally at $120,000 the grant would represent approximately $60,000 to the district.

iii. Discussion of Rate Study

Mr. Skehan stated the last item is the rate study. We have pretty much come to the conclusion on the modeling work to get the different components together for the rate study and we are going to have a conference call tomorrow with the bond team and as a follow-up to that we plan to sit down with Mr. Colon and Mr. Hyche next week to work through any questions and give a presentation as to what is in the model and how it works. This is another aspect of what we will be tying closely to the other planning

document that Broward County is part of and it ties into some future planning and also into the wedge and potential expansion.

EIGHTH ORDER OF BUSINESS Approval of Financials and Check

Registers

On MOTION by Mr. Gray seconded by Mr. Mendelson with all in favor the check registers were approved.

On MOTION by Mr. Mendelson seconded by Mr. Gray with all in favor the meeting adjourned at 5:35 p.m.