MINUTES OF MEETING

NORTH SPRINGS IMPROVEMENT DISTRICT

 

            The regular meeting of the Board of Supervisors of the North Springs Improvement District was held on Thursday, March 8, 2007 at 4:30 p.m. at the District Office, 10300 NW 11^th Manor, Coral Springs, Florida.

 

            Present and constituting a quorum were:

 

            Salvatore J. Mendolia                                 President

            Steve Mendelson                                        Secretary

 

            Also present were:

 

            John Petty                                                  Manager

            Dennis Lyles                                               Attorney

            Jane Early                                                   Engineer

            Isabello Rodriguez                                      CH2M-Hill

            Ed Flavin                                                    CH2M-Hill

            Kevin Alvarez                                             CH2M-Hill

            Cory Johnson                                             CH2M-Hill

            Sean Skehan                                              CH2M-Hill

            Rob Hungate                                              CH2M-Hill

            Randy Fredericks                                       Field Supervisor

            Doug Hyche                                               District Staff

            John McKune                                             District Staff

            Warren R. Craven, Jr.                                TOUSA Homes

            Marie Ferngren                                           Florida Sewer & Water

 

FIRST ORDER OF BUSINESS                         Roll Call

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

 

SECOND ORDER OF BUSINESS                    Approval of the Minutes of the February 8, 2007 Meeting

            Mr. Petty stated each Board member received a copy of the minutes of the February 8, 2007 meeting and requested any corrections, additions or deletions.

            There not being any,

 

 

 

 

THIRD ORDER OF BUSINESS                       Discussion of Capital Improvement Program

            Mr. Petty stated the engineers are doing the preliminary work but I believe they are prepared to delve into the bureaucracy of obtaining a permit for expansion of our Water Treatment Plant.  Many new homes are being built and it is time to build up the plant to handle the flow.

            Mr. Skehan stated we have been working closely with Mr. McKune and Mr. Petty on some of the preliminary issues tied to how you are looking to the future for your water supply.  Your Water Use Permit, which is the cornerstone for any utility, expires in January of 2008.  It has been permitted for 6.4 mgd.  For any possible expansion, you are looking at potentially adding another 3 mgd to your needed capacity and allocation.  The key is your allocation, which will be coming from the Water Management District, as it has in the past. 

            Unfortunately, where you are and some of the other utilities are, in looking into the future, SFWMD has gotten a tight grip on small utilities in the lower east coast.  What was possible in the past from a permitting standpoint and the ease of permitting is not possible or feasible in the future.  What used to be a fairly simple straightforward process has now become a complex process manifesting itself more and more into the future because you will have to deal with getting more water out of the ground.  SFWMD is beginning to implement rules and not tying into the physical component of how the utility will be operating.  There are governmental and legal aspects in trying to get this additional water as well as stormwater issues, which will tie into this in the future. 

            The District prided itself over the years since its inception, of being able to stand alone and be an independent provider to get to where you currently are.  SFWMD pushed so many utilities to this regionalization concept.  What we think is going to be necessary is standing up and saying, “We want to be able to find out where NSID can go to pursue their resources independently and be able to do so for the next 20 years.  This is where many of the Water Use Permits are going.  However, with discharges going into the Everglades and water quality issues, reuse is becoming a significant factor.  We talked about this issue with staff.  I predict there will be a fight down the road.  At this stage, we want to get a close understanding of the issues and the complexity and bring it back to you.  The first step will be to initiate the process for the Water Use Permit, which will be the cornerstone for how some of these other issues get resolved.  We suggest authorizing the engineers to bring a Water Use Permit task order to the Board to begin to pursue this issue for you and tackle some of the other issues tying into this.

            Mr. Petty stated we talked over the years about how SFWMD was going to tax the taxpayers in the state because of their loss in the courts over their handling of the Everglades.  The current estimate for their current program is over $9 billion, which is not funded at this time.  They have been discussing for the last decade how it is going to be funded.  We talked about possible impacts to the District.  It appears SFWMD pulled the trigger, within the last few months.  They are not allocating any additional water out of the Biscayne Aquifer over and above what your maximum day was in the last five years.  We are one of the only growth communities left in Broward County and were the only ones affected by this. 

            If we do not have access to the Biscayne Aquifer and this good water source, we must consider an alternative water source for our water treatment.  The one being pushed by SFWMD is the Florida Aquifer, which is a dirty water supply; made up of chlorides and dissolved solids.  As a former reverse osmosis treatment operator, I would not want to tap this aquifer.  Even with the membrane process, you are looking at high pressure, heavy following, and heavy pre-treatment style water before it can be delivered to our residents.  I project cost increases of 100% or more to our residents by using this aquifer.  This is why we asked the engineer, after hearing these rumors, to talk to the SFWMD and begin the preliminary conversation of quickly bringing a capital improvement program to the Board.  Mr. McKune, the engineers and I personally spoke to SFWMD.  There is not a simple matter to resolve by any stretch of the imagination but you have a good team and are the ones to resolve it.  SFWMD said to us:

“We are going keep our water consumption exactly where it is because the Everglades now has priority.  No water out of the Biscayne Aquifer will move down, which in effect will take a small amount of water out of my conservation area impacting the Everglades to a small degree.  There will be no impact to the Everglades; therefore you cannot have any more water.  You can only have more water if you use effluent reuse and bring the water back.”

 

            This is a balancing act.  They are saying the Everglades has priority over any growth matters, which means our residents.  Staff needs to work hard.  We agree with the engineers, our first effort should be to quickly apply for our Water Use Permit because even though the new rule has not been adopted, SFWMD is still imposing those requirements.  While they are in a transition mode, we feel we have the best opportunity to address our existing condition and need.  The engineers and staff can work with SFWMD on doing the right thing by not getting involved in a costly political answer to a problem we had nothing to do with, which is the SFWMD’s handling of their facilities.  We can manage our water to the best effort possible and return water to the area so it does not leave and we do not adversely affect the water shed. 

            We request the Board consider authorizing the engineers to start the capital improvement program through a two part process.  The first part authorizes them to apply for a Consumptive Use Permit in an amount not to exceed $12,000.  At next month’s meeting, the engineers will provide a work authorization to the Board on a capital improvement program covering the water plant expansion, any regionalization and any other water balancing acts.  Tonight we only want the Board to authorize the engineers to start the process of obtaining the Consumptive Use Permit for our water plant, which we need to have by January of 2008.  It typically takes three to four months to receive approval of the permit under normal conditions.  However, since these are not normal conditions, we wish to start as soon as possible. 

            Mr. Mendolia asked do we have any legal ramifications?

            Mr. Lyles responded no.  This is strictly an engineering exercise.  Mr. Petty said they are in the process of changing their rules and tightening their requirements.  It is going to be difficult in the future if they pass this rule and it does not apply to us or similar districts to get water treated and turned into potable water.  Moving now and not waiting is to the District’s advantage. 

            Mr. Mendelson asked did you say $9 billion?

            Mr. Petty responded the last I heard, SFWMD’s cost estimates were around $9 billion.

            Mr. Mendelson asked how will NSID be affected?

            Mr. Petty responded we cannot touch the water table one more inch and will have to use the Biscayne Aquifer.  This will cost our residents double of what they are currently paying for water.  SFWMD is not asking for a contribution to the $9 billion, they are trying to enforce rules moving them incrementally forward.  They do not care what it costs us.  Their concern is applying credits to the problem they have, not to the problem we have. 

            Mr. Mendelson asked has the District been following the law as far as this project?

            Mr. Lyles responded yes.

            Mr. Petty stated we have been good partners with SFWMD.

            Mr. Mendelson stated it seems like Tallahassee is dumping on us.

            Mr. Petty stated I think SFWMD is dumping on us.  If we cannot solve this problem locally, we will have to go to Tallahassee to solve it.  The first step is working with your partner to the best of your ability.

            Mr. Lyles stated SFWMD is a regulatory body covering the southern part of the State of Florida and eight counties.  Many of the areas are undeveloped but include Miami-Dade, Broward and Palm Beach counties.  They have a problem to deal with and are going to impose stricter requirements on the independent water management and drainage districts.  They have taxing authority but can only increase the tax so much without getting political heat.  They do not produce water or sell utility services to anyone; but only regulate the entities who do.  By making us go through some additional and expensive steps to get the water to the point where it can be delivered to consumers and homes for drinking purposes, helps them to solve their problem at no additional expense to them but puts the cost onto people like us.

            Mr. Mendolia stated Mr. Petty is saying we will be paying double.

            Mr. Petty stated we are not the only utility in Broward County currently seeking a Consumptive Use Permit.  The policy of SFWMD is to direct all utilities to an alternative aquifer other than the Biscayne Aquifer, unless there is a balancing of water so there is minimal to no impact to the existing water table.  This is a harsh policy but one we think we can work with.  SWFMD pulled the trigger and the impacts for their issues are starting now.  This is not the last you will hear of this.  We will come to you at a later date to talk about how your drainage program must be brought into consideration and how other people’s drainage systems may also be included in the calculation.  You may decide to take a more regional style approach, however we need to be careful of any benefit going outside as we may not be able to control it entirely.  We do not want to build improvements for others with our resident assessments.  We want to start this now rather than later and plan on working diligently with SFWMD.  This is a tough problem we have to work through.  We just need it to be reasonable to the District; not unreasonable.

            Mr. Mendolia asked do we have a choice to say “no”?

            Mr. Petty responded I believe you have a choice; but one based on policy, not engineering.

            Mr. Lyles stated you have the choice to say “no”.  You will incur expenses on the items Mr. Petty and the engineers are recommending but in the long run, you are probably going to have greater expenses if you wait for SFWMD to do whatever it feels like doing.  You are the policy makers and always have the ability to direct staff to do something.

            Mr. Mendelson stated it will be a good idea to implement this now.

            Mr. Lyles stated correct.

            Mr. Petty stated whatever course of action we take in the future, this is a step we recommend taking now.  If we reach a problem going through the rule process, which we believe to be unreasonable or unfounded, the engineers were instructed by staff to bring this back for consideration by the Board.  If they think policy direction is necessary, you can have District Counsel look at this.  However, if you feel this is a political matter, you should be given the opportunity to consider it.  The alternative is to comply.  If we hit anything we consider to be unreasonable, we will come back to the Board.

            Mr. Mendolia stated I am thinking about the residents.  If they hear what we are saying, you will have a riot.

            Mr. Petty stated this comes from SFWMD and their issues.  However, I agree with you.  One of the reasons we entered into a contract with a public relations firm is because of what we said is possible in the next year or two.  It came earlier than we thought.  You are starting to see ads on TV where kids are singing, “Save our Swales”.  This is the beginning of the concept of educating the public on the water resource and its value so as these costs come in, people accept them more readily.  Our Drainage District is going to be referred to as a pollutant source.

            Mr. Mendolia asked is there any way we can have a referendum where people can get involved?  If we make a decision like this, everyone is affected.

            Mr. Petty responded yes.  Your manager had those same thoughts and is anxious.  If SFWMD pushes this issue in their meeting with us eight days from now, I will have to come back to the Board to see if you wish to put out information to the residents to get their input.

            Mr. Lyles stated if you have a town hall meeting where people can come to complain about what is happening when SFWMD is not in the room; all you are doing is to make the District look like the bad guys.  We are trying to be the good guys and stopping things from happening, to the extent we can.  I feel Mr. Petty’s approach of having the meeting, obtaining concrete information and putting the information together and providing to the residents so they know what is going on, will make the situation better.

            Mr. Mendelson stated I am also looking at this from a health aspect.  We should implement this now.

            Mr. Lyles stated we are not going to help them implement the plan to cause these outrageous price increases.  We are trying to get our Consumptive Use Permit renewed; taking into account we are a growth area as opposed to a built out area.  Pushing this process as hard as we can and as fast as we can is our best first step.  If it looks like they are not listening to us, we may have to let our residents know we have this problem and what the consequences are but we are working to make it have a different ending.

            Mr. Mendolia stated I agree.  Will we look at this again at a future date?

            Mr. Lyles responded you are going to hear about this for the next couple of months.

            Mr. Mendolia stated I always worry about the residents because they are going to come to the next meeting and scream and holler.

            Mr. Petty stated we are not proposing anything outside of our master plan.  The Consumptive Use Permit will allow us to use the Biscayne Aquifer for high quality water.

 

 

 

FOURTH ORDER OF BUSINESS                    Consideration of Resolutions

            A.        Resolution 2007-2 Declaring Tangible Personal Property Surplus Equipment

            Mr. Petty stated these are the tangible personal property items we turned over to the District.  As you recall, our contract calls for the HOA to be the managers and supply all the internal elements; including the furniture and exercise equipment.  We have these items in a warehouse.  This resolution allows us to have a surplus sale to bring money back into the District if there is any value for this equipment.  If there is no value, the item will be discarded.  You need to handle this as an asset of the District.

            Mr. Mendolia asked is someone evaluating the value?

            Mr. Petty responded it is stated in our bond, after eight or nine years, we are off of the depreciation schedule.  I looked through the list and feel we are going to get a good response. 

            Mr. Mendolia asked is there a published list?

            Mr. Petty responded there is a list on our website.  We also placed an advertisement.  It will be run as a silent auction.

 

 

            B.        Resolution 2007-3 Relating to Membership into the Florida Retirement System

            Mr. Petty stated this item will be pulled from the agenda.  We allocated funds in the budget for a Florida Retirement System, however, District Counsel told us to take another look at the program.  The cost of the benefit does not bother me but the cost of following a bureaucracy and their new rules, may get us into trouble.  The 9.75% pension they currently offer and the defined benefit package does not bother me because we are going to have to be competitive.  However, I do not think we want to participate in a program dictating so many policies and procedures to where we may have to add staff just to address those policies and procedures.  In these forms, they ask for an administrator of the program to be defined and a Registered Agent.  Instead of asking for this upfront, they should ask when I tell them how many people I have and what they make.  They want this in the whereas clauses.  I want to table this item until we can find something less rigorous but having similar benefits.  We thank District Counsel for his suggestion.

            Mr. Lyles stated it is a big change to put all of the employees into the Florida Retirement System.  It looked like a good change because it is a bigger plan but there are some strings attached to it, which staff needs to look at before giving their final recommendation.  We may come back and say this works but at this point we want to examine it further. 

 

FIFTH ORDER OF BUSINESS                         Consideration of Award of Contract for Heron Bay Wetlands Mitigation Bank

            Mr. Petty stated we talked to the Board in the past about this item.  Eight years ago, there was a Broward County requirement for the developer to install certain eco-friendly plant materials such as birds and fish when they build water facilities, which they were in the process of doing in partnership with us.  From a water management perspective, as part of our drainage and flood control, this is not a bad thing to do.  We went along with it and when Westinghouse turned their facilities over to the District, we accepted it and took over the management.  We then hired a contractor because our guys are flood control specialists and not aquatic plant specialists.  Although they can kill the plants fairly well, growing them was a different story. 

            At the end of nine years, we discovered Westinghouse never received a permit sent to them in 1996 and never fulfilled the permit requirement.  The mitigation program they thought they complied with in the mid-1990’s was reviewed again.  As a result, they had newer and stiffer requirements.  We looked at the mitigation areas and discovered we lost half of the plants.  Typically you lose 25% of the plants as water levels go up and down and spraying for algae causes a burn zone.  Our budgets did not include a planting program over the last 10 years.  We expected to lose some plants but we were losing plants in the round areas, which meant the maintenance company was not doing their job.  We have been working with WCI on their conforming to Broward County specifications to obtain the permit, which they were supposed to receive in the mid-1990’s.  We worked with them on getting a better maintenance contractor.  I have now assigned our team led by Mr. Nick Schooley, who is a 30 year veteran, to oversee not only the drainage and flood control but also water management.  Mr. Schooley is very educated and attentive to detail.

            Mr. Mendolia asked is this an additional duty for him?

            Mr. Petty responded yes.  From a staff perspective, we expect Mr. Schooley to build up his staff to handle this.  He will do this by contract as reflected in the current bid specifications.  The bid specifications submitted a few months ago came back at a much higher cost.  Our engineers worked with WCI and their engineers on this issue and re-submitted.  This time the bids came back as estimated.  Staff supports the engineer’s recommendation for the lowest responsive bidder to be awarded the contract to repair and extend the mitigation area and provide a two year maintenance program.  These items are considered part of the budget and monies are available.

            Mr. Mendolia asked is this an increase from the last contract?

            Mr. Petty responded it actually decreased, probably because the contractor is installing the plants.

            Mr. Mendelson stated we are only going to benefit from it. 

            Mr. Petty stated it makes the water management system look natural and aesthetically pleasing while it is a beneficial process.

            Ms. Early stated I agree.  Miller, Legg investigated the lowest responsive bidder thoroughly because I am not familiar with them.  They worked with the contractor on other projects and were comfortable with them.

 

 

SIXTH ORDER OF BUSINESS                        Consideration of Change Orders

            A.        Change Order No. 6 & Final – Florida Sewer and Water, Inc. for Banyan Isles and Sable point for a Net Decrease of $125,243.94

 

            B.        Change Order No. 7 & Final – Florida Sewer and Water, Inc. for Banyon Isles and Sable Point for a Net Decrease of $12,890.52

            Mr. Petty stated these change orders are for two segments of the same contract.  The engineer recommends approval, subject to administrative review. 

            Ms. Early stated on the last page of the change orders; you will see the split for the WCI portion and NSID portion.  This is a decrease to both parties.  WCI had an increase on Change Order No. 7 and NSID has a decrease.

            Mr. Petty stated the contract amount is less than what was approved at the last meeting, due to these change orders.

 

 

SEVENTH ORDER OF BUSINESS                  Consideration of Work Authorization No. 172 for SFWMD Permit Modification – BMP Requirements

            Mr. Petty stated the recommendation from the engineer is to be authorized to work on this matter.  We believe it is justified and recommend it.  We wanted to talk to the Board about the implications.  This issue came up at the last meeting and the Board authorized an extension as we wanted to discuss it further.  SFWMD provided us with a letter for us to respond to within 90 days.  We asked for the extension but have not been grated it to date, although they are meeting with us in less than two weeks to discuss and acknowledged they received the extension before the 90 days expired.  We are working with our engineers on the impact.  SFWMD is telling us if we pump to our permitted outfall; conservation area 2A, the only way they can allow us to do so if we comply with the recent water quality efforts, which our engineers tell us is impossible to do.  We cannot possibly reduce the nutrient loading in the canal system.  This means we have to look for an alternative discharge area.  NSID, being at the end of the development cycle in Broward County, was not allocated any space in the C-14 or Hillsborough Canals.  The only way we are allowed to pump to either canal is if other permittees are not pumping their full load.  Therefore, we only get to discharge water in NSID under a rain event if someone is not using their allocation.

            Mr. Mendolia asked how will we know?

            Mr. Petty responded this is why we feel this is an extremely serious issue for the District and we sent a letter to SFWMD with our findings.  This means, there may not be drainage available to existing homes.  When I asked SFWMD the question, they said we should be good for at least the next couple of years.

            Mr. Mendolia asked how will the residents react?

            Mr. Petty responded I thought it would be nice to tell the homeowners who bought their homes this year their drainage rights are good for at least two more years.  This is why we are taking this matter seriously.  Since all water is now being combined, whether it is stormwater or coming out of the Biscayne Aquifer or bleeding over from the conversation area through the levy, we need to start the permitting process.  Staff will meet with SFWMD to listen to them say, “This is no big deal, you are good for a year or two” and see if they can expand this out three or four years.  They think the stakeholders include everyone who lives in Broward and Palm Beach Counties.  I do not know how they became part of the NSID system because I have not seen any money coming in from them but I am willing to send them a bill.  I recommend the Board approve this work authorization because this will be an expanded work program from what BMP had stated in the past.  This is a bureaucratic process in the cost of doing business with the SFWMD to be a good partner.

            Mr. Mendolia asked do we have time to consider this work authorization?

            Mr. Petty responded the engineers have to come back to us with specific tasks and authorization for funding.  This work authorization gives them the authority to work on this modification and then come back to you.

            Mr. Mendolia asked do we have the funds?

            Mr. Petty responded yes, for the $5,000 one but I will look harder for funding for the $50,000 one.

 

EIGHTH ORDER OF BUSINESS                     Staff Reports

            A.        Manager’s Report - Short Term Financing

            Mr. Petty stated in regards to our efforts to look at short-term financing to fund the completion of the tennis courts, as the Board may recall, we had $250,000 in our construction account.  We looked at the demand and built tennis courts because there was a strong demand.  We are looking at short-term funding for this issue, which we do not think is going to be a problem.  We looked at the budget and it should fit in nicely and be competitive.  As a matter of fact, we just spoke with WCI and even with this short-term note for the tennis courts, our rates for the commons should still be below what they are charging for the new clubhouse.

            Mr. Mendolia asked when are the tennis courts going to be completed?

            Mr. Petty responded I never thought it would take this long.

            Ms. Early stated they had a difficult time obtaining permits from the City of Coral Springs.

            Mr. Mendolia asked why?

            Ms. Early responded they wanted modifications to the permit.  When it was approved by the Zoning Department, they did not tell the Building Department.  When the builder went down there, he was told they could not get the permit until zoning approved it. 

            Mr. Petty stated this is the process you have to go through in Coral Springs, which reached the zenith of their building era a long time ago.  We are getting the scaled down version of the process.  The days of getting a seven day turn around are long gone.  The engineers are constantly trying to push the issue.  I want to see them dig up some dirt.

            Mr. Mendelson stated I want to see a sign saying they are done.

            Mr. Mendolia stated if you need any assistance dealing with the City of Coral Springs, let me know.  I had good success with them.  With the last house I built they were knowledgeable, honest, fair and quick.  I thought we had the funds.

            Mr. Petty stated we do.

            Mr. Mendolia stated you said it cost $741,000 for the tennis courts.

            Ms. Early stated there is $250,000 in the remaining bond issuance.

            Mr. Petty stated in the bond issue for the commons, which we need to put into a construction program for a capital asset.  The tennis courts were perfect for this.  This amount covers a third of the contract.  We need to cover the other two-thirds.  Keep in mind, the commons is a small separate assessment area from the rest of North Springs and their books have to be separate.  We need this funding in our budget.  We went through those reserves in the repair and remodeling of the facility, which cost $600,000.  We used up most of our reserve, if not all of it and I do not feel comfortable going further into our reserves.  What we are looking at doing is getting short-term funding benefiting the District.  We have been working on this for other entities and brought it into its own under NSID. 

            I have a commercial note with SunTrust bank.  It is a revolving Line of Credit, which gives us the ability to draw small amounts of money; $5 million or less in less than 30 days for periods of five years or less.  District Counsel can tell you the reasons why we have those limits.  This is based on a percentage of the LIBOR rate, which is a standard currently used.  The rate currently brought to us and in this agreement makes us better than their best commercial customer, which we expected to be.  We think this is a good instrument, which gives us great flexibility.  It saves the District from asking its residents to fund reserves for a possibility which may or may not occur, instead of using this Line of Credit available to them.  In this case, we wish to use some of this money to complete the tennis courts.  It is going well as we are talking with the banks, finalized the language and we are ready to provide to District Counsel for his review.  At the next meeting, we hope to have a finished document both staff and District Counsel can recommend to you for consideration.

            Mr. Mendolia asked can we approach WCI and request to a donation towards the tennis courts?

            Mr. Petty responded we spoke to WCI last week about NSID.  As the Board is aware, many of the original members are gone and most of the employees are there less than a year.  We spoke to Mr. David Wolfe who has been there four or five years.  According to Mr. Wolfe, the tennis courts were not perceived to be of any marginal benefit to Mr. Wolfe’s efforts, in particular to the new clubhouse, which he felt was going to end up taking quite a few of the residents.  I do not agree.  I think our facility currently looks good and the last time I was there, the residents were thrilled with the tennis courts and using it extensively.  It adds a good flavor.  The bar looks wonderful and inviting.  He was not interested in the additional tennis courts.  At one time, there was a gentleman from the west coast who came to our meetings but he is no longer with WCI.

            Mr. Mendolia asked is he not in favor of the tennis courts?

            Mr. Petty responded he was of the opinion the current model applied to the commons for its management to be better used.  He has a vision of what it may be used for, which is more akin to the Tennis Center in Coral Springs and opening it up to tournaments to bring in outside money.  I told him we are amenable to discussing with him any and all such options as long as residents were in favor of it.  We have not asked them to contribute.

            Mr. Mendolia stated they should contribute because those tennis courts are a great asset to WCI.  When people look at houses, they see the tennis courts.  The new clubhouse will not have any tennis courts.  They will be an asset to the current residents, future residents and WCI.

            Mr. Petty stated we talked to Mr. Wolfe about Funding Agreements of the subdivision lines and how we wished to come to conclusion on this matter and do a one time payment to clear up the last 10 years worth of agreements.  If we have excess funds after this calculation is done, they may or may not be applied to WCI.  We are not happy with the continued relationship we have with WCI after we paid and are calculating what we think is due to WCI.  We asked them to consider a different type of agreement for subdivision lines and they are amenable to doing so.  It is one where they will not fund it and look for us to collect fees and then pay them back because we are just exchanging the same money.  They will bill for the subdivision lines and donate those to the District.  We will not charge subdivision connections for those lines and will be working with District Counsel on the preparation of those agreements.  We are trying to calculate the numbers so we can say to WCI, “This fulfills all of our commitments over the prior years for water and sewer lines.”  We will work with them on getting the proper transfer of title, ownership, deeds, rights-of-way and all other instruments associated with fixed assets.  They are amenable to this and I have no trouble bringing up the tennis courts with them.  We will bring this note back to you.

            We received interest from Mr. Cathwell, a resident of NSID, to fill the vacant seat.  I have copies of his letter for consideration as well as a resume.  District Counsel can inform you of the requirements of the position.  You are not mandated to fill this position but you may consider it as you deem appropriate.  The vacant seat expires in June of 2008.

            Mr. Lyles stated this is the seat created by the resignation of Mr. Matt Lauritzen and a resident of Parkland is required to fill this seat.  They must also be a citizen of the United States and the State of Florida.

            Mr. Petty stated it is nice to have such interest from the residents.  I do not know if this resident meets the requirements for living in Parkland but if he does not, I request he be notified during the landowner’s election so he may participate as we are changing the law.

            Mr. Mendolia asked why do you want to be on this Board?

            Mr. Cathwell responded I do not have any experience serving on Boards but I am hard working and open minded.  I felt it was time for me to get more involved in the District as my youngest child is five years old and starting school.  I have been an attorney for over five years.  This is an interest of mine.

            Mr. Mendolia asked are you a Real Estate Attorney?

            Mr. Cathwell responded I handle personal injury, workers compensation and real estate type cases.  I also have a real estate license.  Is the requirement of the resident living in Parkland a part of the law being changed?

            Mr. Petty responded for the Board to be properly represented there was a requirement put into place for one of the Board members to live in Parkland, another living in Coral Springs and one living in the entire District.

            Mr. Cathwell asked is this mandatory?

            Mr. Petty responded the seats are assigned to those requirements.  The vacant seat must be filled by someone who lives in the City of Parkland.

            Mr. Lyles stated this District is authorized and operates under a special act of the Florida legislature in effect since the early 1970’s.  It has always required one resident on the Board living in Parkland, one from Coral Springs and one elected at large.  We filed a bill to convert from a landowner’s election where only people who own property can vote to a popular election where every registered voter can vote.  In the initial version of the bill, we did not have a requirement for anyone to live in a particular District or city.  When this bill came up for consideration before the Legislative Delegation in Broward County, the City of Parkland represented to the legislators and us they are concerned and thought we should continue to have this requirement.  At the request of the Legislative Delegation, we inserted this mechanism into our bill.  If it passes and we convert to a popular vote run by the Supervisor of Elections, the seats will still have residency requirements, like a District in a City Council election. 

            Mr. Cathwell stated I am fine with a temporary appointment.

            Mr. Lyles asked are you a resident of Parkland?

            Mr. Cathwell responded I live in Wyndham Lakes.

            Mr. Mendolia stated Wyndham Lakes is in Coral Springs.

            Mr. Lyles stated under the legislation establishing the District and qualifications for members of the Board, you do not meet the requirements for the open seat.

            Mr. Cathwell asked is this only for the election to the Board?

            Mr. Lyles responded it is for an appointment as well.  In order to hold the office, you have to meet the requirements of the office.

            Mr. Petty stated this does not mean you should stop your interest in the District. 

            Mr. Mendolia asked did anyone recommend you?

            Mr. Cathwell responded when I went to pay my water bill online, I saw the minutes.

            Mr. Mendolia stated we will hold onto your resume and see what happens.

            Mr. Petty stated no action is required by the Board.

            B.        Attorney’s Report

            Mr. Lyles stated the legislature is in session as of this past week.  So far they have done no harm to us with our proposed bill.  Of course, we are monitoring this as it goes through the legislature.  These bills tend to be picked up towards the end of the session.  We have not run into any road blocks or obstacles and are moving along.  This has been a quiet month on the legal side.

C.        Engineer’s Report

            There not being any, the next item followed.

 

NINTH ORDER OF BUSINESS                       Supervisor’s Requests and Audience Comments

            Mr. Craven stated at the last meeting, the Board awarded the contract for Parkland Village infrastructure to Florida Sewer & Water with conditions.  What is the status?  The contractor executed the contracts and provided them to TOUSA Homes.  I should be able to deliver them to the Board tomorrow.  We were originally looking at a start date of March 19^th.  All of the permits from the city should be in order by then.  Can we move forward?  I know there is an issue with the agreements.

            Mr. Petty responded Mr. Craven is going to be at our meetings quite frequently now.  He has always been instrumental in the development of NSID.  We have been working with him for some time.  We do not foresee any problems.

            Mr. Craven stated I did not know if the Board took further action.

            Mr. Petty stated we are not asking for any further responsibilities or changes.  At the last meeting, we looked at the funding agreements and reported the subdivision lines were going to change.  The rest are the same because they go through bond funds.

            Mr. Craven asked will we be able to obtain a Notice to Proceed?

            Mr. Lyles responded we had the agreements and permitting in place and were ready to go but I raised the issue of whether there was a defined funding source to make the payments called for under the contract.  The Board previously authorized and District Counsel validated the bond issue.  We were waiting for them to have a bond closing.  Currently, there are no funds available to make payments under those agreements until we have the bond closing, generate the funds through the sale of the bonds and put the funds into the construction fund account.  This is the outstanding issue.

            Mr. Craven stated this is for the special assessment.  There are three funding sources involved; water and sewer, refunding and special assessment.

            Mr. Lyles stated as long as the manager is satisfied there is a source of funds for the contract, there is nothing more to do as the Board authorized it to be signed subject to identification of a funding source.

            Mr. Petty stated I agree with District Counsel, it is conditional upon funds being available as stated in the agreement.  You know as well as we do, there is an outstanding bond.  In regards to whether or not we can move forward for bonds issued, the answer is I see no reason why.  I see no restrictions.  You are good about coming to us and working with us on the issue of the subdivision lines and your client described how they wished to go further.  We have had nothing but a great working relationship.

            Mr. Craven stated as far as the special assessment bonds, those do not exist.

            Mr. Petty stated there is no entitlement unless they are issued.

            Mr. Craven stated TOUSA is obligated to fund this portion until those bonds are available.  I wanted to make sure the other issues were covered.

            Ms. Early stated the contractor signed the contracts, they are at TOUSA Homes and then they come to the District for signature.  Since we did not have a bond issue, we needed those funding agreements to be in place.  I do not know if TOUSA Homes signed them.  This is the funding mechanism until the bonds are sold.  This is my understanding.  There was one for water and sewer and one for the roadwork.

            Mr. Petty stated there are no projects management is considering.  Of course, you are the one who sends them to me.  However, if they are not covered by an existing funding source, the District has no funds available of its own from a General or Enterprise Fund available to this outside of the outstanding bond issue construction account.

            Ms. Early stated on the last agenda, there were advance funding agreements for different segments of the work because there was no bond issue.  Does TOUSA have them?

            Mr. Petty responded I cannot tell you if TOUSA has them.

            Ms. Early stated I am afraid to send them to you if these funding agreements are not signed.

            Mr. Petty asked what do you want for the Board to consider?

            Mr. Lyles responded the Board already did what it needs to do by awarding the contract, subject to management identifying a specific funding source.  The bonds are not closed so there are no bond funds.  Ms. Early is saying before the construction contract is signed and issuing a Notice to Proceed, make sure the fully executed advance funding agreements are there as a substitute for the closing of the bonds.  It has to be one or the other because there are no other sources of funds. 

            Ms. Early stated I do not have a copy of them, which is why I am concerned. 

            Mr. Petty stated we can talk after the meeting and get you a copy of whatever you need.

            Mr. Craven stated I have no problem assisting them.

            Ms. Marie Ferngren stated I am with Florida Sewer & Water.  We have a long standing relationship with the Board as we have done a great deal of water, sewer and drainage infrastructure at Heron Bay and Parkland Country Club.  We appreciate all of the business.  I spoke with Mr. Petty about this issue but was not happy with his response.  I have invoices dating back to September.  I do the work, your employee, Mr. Andy Waypa approves my quantities and at the end of the month, gives me a sheet of the approved quantities, which I attach to my invoice and provide to Ms. Early.  Her inspector then approves it, Ms. Early does a split sheet and it is then sent to either Ms. Walker or Mr. Petty’s attention.  One invoice is dated September 30^th.  The letter was sent to NSID on October 3^rd and another on October 5^th.  What is the process?  I am getting involved in more work at larger dollar amounts involving more suppliers.  I do not feel it is realistic for a supplier or contractor to wait five months for payment.  I have not found out any information other than Ms. Walker is no longer with this division.  In the meantime, I have been dealing with Ms. Kay Woodward but have not been able to get many answers from her.  I am looking for direction from the Board and Mr. Petty.  What does the Board consider to be reasonable?

            Mr. Mendolia asked do we have any input in regards to paying them?

            Mr. Petty responded certainly the Board can make a policy on the objectives.  We have such a policy, which is to pay the bills as quickly as possible.  We had several issues with the handling of diverse products and services we offer.  If it was a singular entity, we did a special audit internally and it came back saying there must be multiple individuals working on this for checks and balances because if your accountant gets sick or leaves, we have problems.  Ms. Walker, who is considered to be a chief asset of the District, is currently working on what we consider to be our biggest priority, which is the $100 million in fixed assets we built over the past decade and trying to organize this into a manageable system.  In the meantime, we tried to produce the checks and balances we deem to be required of a public agency.  I notified all vendors including Florida Water & Sewer of this procedure in order to protect the District’s interest for due diligence and send out correct payments as soon as possible.

            Mr. Mendolia asked is there a problem with their request for payment?

            Mr. Petty responded there have been problems with request for payments where they had to go back and be re-assigned to the proper contract or there needed to be a Change Order from the Board or other material changes.  We have no problem with the quality of their work.  We are talking about due diligence and the processing of millions of dollars.  We believe our checks and balances are reasonable, which comes from our 40 years experience with government agencies accounting and auditing. 

            Mr. Mendolia stated we never had this problem before.

            Mr. Petty stated we always had an invoice, which went unpaid for three to four months.

            Ms. Ferngren stated we have been in business with the District for 12 to 13 years.  The average wait time for invoices to be processed is 60 days.  When things were running smoothly, they were processed in 45 days.  However, there was no occasion where we had anything going over 90 days in the last 18 months.  On the rare occasions when we approached 60 days, I was able to find out why.  This is the first time I am hearing about problems with my invoices.  I do not want Florida Sewer & Water to get a reputation of not paying their suppliers and subcontractors but at the same time, five months is a long time to wait and not have a concrete answer.

            Mr. Petty stated it is not standard for every invoice to wait five months until they are paid.  If an invoice is five months old, there has to be a reason for the delay, whether it was lost, stolen, misplaced or not paid.  We can investigate and provide due diligence, which is what we are currently doing.  However, to imply payments always takes five months to process is incorrect and I do not want the Board to have this impression.

            Mr. Mendolia stated she said this one is taking five months.  Prior invoices were paid within 45 to 60 days.

            Mr. Petty stated on average, it is within a 30 day time frame.

            Mr. Mendolia stated then the ones she has are problem ones.

            Ms. Ferngren stated I spoke with WCI and the process is for Mr. Petty to sign off on the invoice and is then submitted to WCI for advance funding.  Invoices presented to Mr. Petty’s office on February 1^st still have not approached WCI for advance funding.  This is where my concern is.  We are at five weeks and WCI needs an additional three to four weeks to process them.  They do not pay me directly; they pay NSID.  NSID usually takes another week to pay me.  At best, we are already looking at an additional four weeks, which puts me nine weeks out from the date of my invoice.  The problem is when I spoke with Ms. Woodward; no answer could be given to me.  Therefore, I cannot respond to my suppliers with proper information.

            Mr. Petty stated we have a vendor who wants us to commit to a time certain when we can pay bills and due diligence will not allow me to give you a date.  Even if the Board directed me to, I am afraid I could not provide one because of the due diligence issue.  If there is a problem with the bill, it is going to take longer than 30 days.  We try to pay the bills as soon as we can through our checks and balance system, which we think is not unreasonable.  It involves a fairly complicated system; involving funding from WCI, the engineer or two contractors on a specific project.  We may be partners with WCI if the invoice is for water management and roads.  The Board sees the paperwork every month.  I cannot tell you how many bills I get for less than $5,000.  The invoices have to go through due diligence.  I cannot give a better answer than this.

            Mr. Mendolia asked are there any other companies in the same predicament as Florida Sewer & Water?

            Mr. Petty responded they are unique.

            Ms. Ferngren stated there are also outstanding invoices with Triple R. Paving.  We are the only two contractors doing the majority of WCI’s work.

            Mr. Petty stated I can remove the checks and balances.  Right now, my signature is required on those documents and there is no way I am signing documents without going through due diligence.  However, my signature can be removed and the engineer can be authorized to sign requisitions.  We can then do the checks and balances at their office.

            Mr. Mendolia stated it has been working well until now.

            Mr. Petty stated when there was a single entity of Ms. Walker, the checks and balances were not being done.  Part of the in-house audit was to check this process because this was our determination as your manager and we had the auditors independently do this.  They came back with the same response.  Ms. Walker has been here for a very long time and we cherish her but this work has gotten so complicated, I had to put three people into the position of doing proper checks and balances.  Even though Ms. Walker worked hard for us, she was not able to do the proper checks and balances.  Instituting those and doing the work to the degree we wanted to and responding as quickly as we think the vendors deserved, took this many people.  We think we are responsive.  Without those checks and balances, I cannot sign requisitions and invoices.

            Ms. Ferngren stated I do the work and it is approved by an inspector who is an NSID employee.  We are not going over the contract quantities.

            Mr. Petty stated this is why we had Mr. Waypa out there for the last 15 years checking quantities.

            Ms. Ferngren stated I want the opportunity to know when there is a problem so it can be resolved in a timely manner.

            Mr. Petty stated we tried to convey to the vendor we are doing due diligence.  This is not us trying to pick on them.  We are just trying to manage the funds of the District professionally.

            Mr. Mendolia stated with 15 years of service, if there is a problem, tell her what the problem is.  She will have to wait.

            Ms. Ferngren asked is it reasonable to not be told what the problem is?

            Mr. Mendolia responded no.  If you have a problem you have to say what it is.

            Ms. Ferngren stated I request Mr. Petty say, “Your invoice is being held up because…”.  I can then approach Ms. Early to re-do it.

            Mr. Petty stated it is not going to be Mr. Petty who is doing this.  It is going to be the accountant or one of the three employees who took over for Ms. Walker.  If the issue has to do with the engineer, we will not share this with the vendor because we do not wish to put any blame on someone else.  We are going to say it has been pushed back in the process.  If the invoice comes to us three months after the job is completed because it was on someone’s desk or a quantity has changed, this does not constitute an emergency on our part.  We are still going through due diligence.  If I have the issue and the answer, I will relay it to you.  If it is in process, I will tell you.  When you ask me when it is going to come up, I will tell you, “Once it has gone through due diligence”.

            Ms. Ferngren stated as a business person, this is an unreasonable answer because I am responsible to pay my suppliers.

            Mr. Petty stated I find this unbelievable since you are a contractor who has to work with other agencies who are far more complex with checks and balances going way beyond what we do. 

            Ms. Ferngren stated I do not understand the additional checks and balances.  I am being informed by Ms. Woodward; invoices are sitting on desks and not being processed.  Is there a way we can communicate so I have an idea, once it passes through Ms. Woodward and it goes to Mr. Petty’s desk, what is reasonable to expect?

            Mr. Petty responded the timeline is difficult and I cannot guarantee it.  As your manager, I work on other districts.  This is part of the reason why the price is what it is.  If I am working on another district, I can be out of the office for two or three days.  Sometimes I have invoices sitting on my desk.

            Mr. Mendolia asked how many invoices are you referring to?

            Ms. Ferngren responded I have two invoices from September, one from January and five from the beginning of February.  The older invoices are not large amounts and are not affecting many people.  The more current invoices are for larger amounts to where I am dealing with 10 suppliers and sub-contractors who I need to answer to.  Telling them the answer Mr. Petty is giving to me is very difficult.

            Mr. Mendelson stated according to the financials as of February 26^th, they paid a $31,000 bill.

            Mr. Mendolia stated there was another invoice for $16,564. 

            Ms. Ferngren stated I have not received those checks.  I spoke with Ms. Woodward on Monday and she informed me she was waiting for information so she could pay me.

            Mr. Lyles stated this was the report on checks cut and sent.

            Mr. Petty stated I will be glad to look into it.  We are not intentionally keeping their money.

            Mr. Mendolia stated Ms. Ferngren has a valid point.  We show two invoices as paid.

            Mr. Petty stated if she would like to know where the checks are, I am sure we can track them.  If there is an issue with the mail or they came back to us, I am sure we can give her this response.  Telling her what the issue is when it is known, we will gladly do.  However, giving her a date certain on when she will receive an answer is something I cannot do.

            Mr. Mendolia asked will the five invoices be in the same category of problem invoices?

            Mr. Petty responded yes, since they are applied to the same contract.  We can look at the balance of the contract.  If we reviewed the contract and do not have a change order on file, we will contact the engineer and request the change order.  If we do not have the change order, typically the engineer will come back and write a change order for the Board’s consideration.  In any case, the bill is going to sit there.  This has happened in the past.  We do not have a system of holding vendors bills above and beyond any other vendor’s bills.  The process of bond funds and funding agreements is a complex one.  The checks and balances we installed are the bare bones minimum and they take time.  You just saw two final change orders for the same contract today.  We knew what it was for because we were able to talk to the engineer.  For the items we were not involved with, coming to us from a contract assigned two years ago, we have to stop what we are doing and verify.  Every once in awhile, we will bring to the Board a sheet showing what our balance is.  This sheet takes a great deal of work and checks and balances.  In the past, Ms. Walker relied 95% of the time on Ms. Early’s recommendation to pay.  I am not comfortable with this while my name is on it as Ms. Early is not an accountant; she is an engineer.  If my name is on the invoice, I am going to make sure it is done the way it should be.  If my name is not on it, I am sure we can expedite the process by relying on the engineer.

            Mr. Mendolia stated this sounds like an individual case but she also mentioned Triple R. Paving.  We do not want the contractors coming to us and saying we owe them money, unless there is a real problem.  We should have open communication.  They all cannot be in the same category.

            Mr. Mendelson stated she may only be holding a part of what has not been paid or maybe the check was cut and not sent out.

            Mr. Petty stated it would not be typical.  She did not contact me to ask these questions and I did not know she was coming before you with this issue.

            Ms. Ferngren stated Mr. Petty asked me not to contact you.  He told me in our last phone conversation, if I had any issues to talk with the Board.  I chose not to approach you last month because I spoke with Ms. Walker and knew a $300,000 check was being issued.  However, when I received the check, I realized there were still two lingering invoices.  This is why I decided to present myself today.  I apologize for not giving you proper notice.

            Mr. Mendolia stated see what you can do for Ms. Ferngren.

            Mr. Petty stated right now, I want to get my name off of their form.  I have never been accused of holding anybody up or not being able to count.  I do not like the concept.

            Mr. Mendolia stated no one is accusing you.  If they ask a question, answer it.

            Mr. Petty stated this is the only client I have where I sign requisitions.  If this is necessary, I am going to provide due diligence.  I have seen enough cases on these requisitions to where it is a good thing we do.  If a vendor comes in and says the due diligence we are providing is causing them angst, while I am sympathetic to their concern, I do not know if I can make any changes.  When they demand time schedules I cannot provide, I do not know what to tell them.  If they ask for or demand such statements and I cannot give them an answer, the only thing I can do is defer them to the Board, even though I hate to do so.  I want to be able to solve their problem.  If they will not accept my answer or the policies I instituted in the District, it becomes a Board decision.  I will be happy to work with all the vendors, but I have been working with them.  Our offices are always open.  Ms. Ferngren is able to talk to Ms. Woodward or any of the other accountants.  She was able to talk with Ms. Walker, up until the time she took over the new process of fixed assets.  The issue of doing checks and balances has been contentious between the two of us, since we implemented it.  I find it to be a benefit to the District.

            Mr. Mendolia stated I agree, except if an invoice is six months old.  We need to pay them as soon as we can.  I know you are busy but make them understand you are assisting them.

            Ms. Larned stated we have been looking at this process for quite some time.  Frankly the checks and balances were not in place prior to a few months ago.  The reason why it worked smoothly is because there were no checks and balances.  We had instances where I had to research to make sure there were adequate funds in the account.  Going forward, we brought in someone who on a project assignment basis began to work closely in the existing system to determine where the weaknesses were.  This was a result of the special audit.  As a result, we tried to institute new procedures bringing forward those checks and balances.  However, we ran into resistance from the vendors.  It has to do with the bond funds, advance funding agreements and very large dollar amounts for the projects. 

            What complicates this is there are shared contracts, contracts split between different entities and all the paperwork is not in one place.  When we instituted these new checks and balances, we had to go back and re-formulate the prior history to bring the old projects forward.  This is going to be fairly time consuming and we work diligently to bring this into focus as quickly as possible.  We felt going forward, the communication lines between the engineer and the vendors did not need to be disturbed.  We understand the pressure the vendors are under to pay their suppliers, but what is more important is the public trust perspective and our fiduciary responsibilities to make sure those public dollars are being spent as so ordered by the Board.  It has taken us some time to do so.  You have certainly given us the direction and approval to move forward.  We believe this will get faster as we move forward but we have a great deal of work to clean up.

            Mr. Mendolia stated this is the way it should be.

            Mr. Petty stated hopefully the troubles we had in the past are behind us.

            Ms. Ferngren stated I will leave my card.  If you have any information, it will be greatly appreciated.  I need to inform my suppliers.

            Mr. Petty stated I do not know what information I can give you that you can give to your suppliers.

            Ms. Ferngren stated I was informed by Ms. Woodward; the paperwork is sitting on your desk waiting for your signature.  When you sign them and they are heading to WCI for my advance funding, please call me.

            Ms. Larned stated I will be happy to look into this matter and speak with Ms. Woodward.  I can guarantee you they are not sitting on Mr. Petty’s desk.  If they are sitting on Ms. Woodward’s desk, it is because she is waiting for information from either the engineer or you.  She has come to me with briefings if not every day, every other day.  When they are ready to go before the District Manager, they will but because of this time schedule, they do not sit on his desk.  They have not completed due diligence until this step is met.

            Mr. Mendolia stated Ms. Woodward may have mis-spoke.

            Ms. Ferngren stated I appreciate your aggressiveness and I can only respond with the answer I was given by your employees.

            Ms. Larned stated Ms. Ferngren has been very aggressive and while I respect this, we are trying to protect the public’s interest.  I do not want to sit here and see this dog fight.  This is inappropriate.  I will be happy to speak to Ms. Ferngren beyond this Board meeting.

            Ms. Ferngren stated I appreciate it.

            Mr. Mendolia stated thank you.  We have to consider what Ms. Ferngren said.

            Mr. Petty stated I had to give her the option of coming to the Board.

            Mr. Mendolia stated whatever Ms. Woodward told her, she should not have said.

            Mr. Petty stated I am sure she told Ms. Ferngren the next step was for the paperwork to be on the manager’s desk.

            Ms. Larned stated I think she mis-interpreted and I am more than happy to work through those issues with her.

 

TENTH ORDER OF BUSINESS                       Approval of Requisitions and Invoices

            There being no questions or comments,

 

 

ELEVENTH ORDER OF BUSINESS               Adjournment

            There being no further business,

 

 

 

 

 

                                                                                                                                                     

Steve Mendelson                                                          Salvatore J. Mendolia

Secretary                                                                      President