MINUTES OF MEETING

NORTH SPRINGS IMPROVEMENT DISTRICT

 

            The regular meeting of the Board of Supervisors of the North Springs Improvement District was held Thursday, April 7, 2005 at 4:00 P.M. in the District Office, 10300 N. W. 11 Manor, Coral Springs, Florida.

 

            Present and constituting a quorum were:

 

            Matt Lauritzen                                            President

            Bob Miner                                                  Supervisor

 

            Also present were:

 

            George Keller                                             Manager

            Dennis Lyles                                               Attorney

            John McKune                                             CH2M-Hill

            Ed Goscicki                                                Severn Trent Services

            Roger Moore                                             Severn Trent Services

            Patti Hitchcock                                           Town Center

            Joni Hayworth                                            District Staff

            Dan Daly                                                    District Staff

            Jean Rugg                                                   Severn Trent Services

            Michael Hollander                                      Resident

            Commissioner Udine                                   Parkland City Commission

 

FIRST ORDER OF BUSINESS                         Roll Call

            Mr. Lauritzen called the meeting to order at 4:00 p.m. and called the roll.

 

EIGHTH ORDER OF BUSINESS                     Discussion Items

D.    Room Rental Charges at Heron Bay North with WCI

            Mr. Keller stated this item is continued from previous meetings and relates to not only the focus on the room charges, but some issues and questions raised about the agreement NSID has with the Heron Bay Community Association that the association has in turn with WCI Property Management.  We have taken some time in the last month to look at the issue, talk with the staff involved and looked at the contractual issues.  Mr. Lyles will relate more on that, and staff is pursuing what we think are some of the issues and questions.  To do that and go over a period of some six years it is going to take more than the 30 days we had so far. 

            Under the contract NSID has with the Heron Bay Community Association it calls for an annual independent audit to be conducted if requested.  That has not been done in the past it has been requested.  We received written response that it has been started and initiated and is to be completed within 60 days of the initial request, which will place it 45 days from now.  Additionally, administratively we are going to continue to look at things as your management company in terms of some of the practices and some of the things that are happening or not happening to address some of the issues and questions.  Thirdly, the management company, Severn Trent, is going to bring in an outside firm to do more of an operating forensic audit, in terms of business practices and things they are doing at the association and at the property, to take a specific look at the operational side not just the financial side. 

            A contract exists between the District and the Association in terms of how the property should be managed, they in turn are contracting with WCI Management Company.  Quite frankly we believe that though there may have been good reason six years ago to have another agency act as the contracting agent for the District to have a property manager deal with that because it is something they specialize in, it is our recommendation at this time that the District have more direct control of the operations of the commons property and that is a good thing as far as practice and business right now to ensure things are done in a way we feel are best and in the interest of the District, being a public agency and publicly owned property.  Under the contract it is probably best we pursue working with the association and WCI Property Management to dissolve the agreement, take direct control of it and acquire a property management company we have a direct working relationship and control of.

            Mr. Lyles stated the contract authorized in 1999 was in concept so this staff and Board that you pay, primarily Severn Trent, would not become involved in the day-to-day operations of the clubhouse facility that serves a very limited part of the NSID.  It was proposed and believed at the time that the community association would be taken over and operated by the residents who are paying the assessments that fund the operations of this facility rather than having it done by the District itself and the Districts management company.  At this point with the questions being raised concerning compliance with the contract and how invoices are handled, a large part of this seems to be there are a lot of hands and a lot of processes.  There is a property manager who hires a subcontractor to do operational matters; the property manager then goes to the community association for budgeting and administrative guidance who ultimately reports to this Board, this District and this management company.  There are too many layers involved as this matter has evolved.  The manager’s recommendation, and I certainly join it, is that we look into dissolving the relationship with this community association.  It has not worked out as being less cumbersome; it is getting to be more cumbersome than we envisioned and if you let Severn Trent, as your manager, directly supervise operations and the finances of the Heron Bay Commons facility we will streamline the whole matter both operationally and financially.  We will need the approval and direction of the Board to approach WCI and initiate the discussions regarding dissolving the contractual relationship with the community association since they still control the community association.  We bring it up for your consideration.  You do not have to take action on it today.  We still have the audits, the forensic operations audit and the separate financial audit of Heron Bay Commons in the process.  This is where it seems to be headed and I want you to at least be aware that is the thinking we have and you can either authorize staff to go forward with that plan today, wait to see how the audits come out or wait one meeting to see what response you get.  We would not just terminate the agreement; we would only terminate the cause.  We feel there is a mutual termination that works in everyone’s best interest and is the way we would approach it.   

            Mr. Lauritzen stated I appreciate your thinking.  To be fair to WCI we should see the audit first.  I appreciate the good work you gentlemen have done on this.  To raise it to our interest because if it is not being run as efficiently as it should be, then there is a problem and to be fair to everybody I would like to see the audit.  I do like the idea of making Severn Trent our property managers to have more direct accountability for it.  It makes a lot of sense. 

            Mr. Miner asked how close are we to the HOA taking it over completely?  Is $1,000,000 or $200,000 left on the bond?

            Mr. Lyles responded we do not know the answer to that question, but apparently there is a substantial amount of construction left before they reach the point of a mandatory transfer to the residents from WCI. 

            Mr. Miner asked if it is close enough can’t we just say get rid of it?  Say here is your final assessment and if you want it you can have it.  I want to know how close it is to being paid off.  If it is $100,000 then assess everybody in the community what you have to assess them and say you can have it.  If it is $2,000,000 then it is a different story.

            Mr. Lyles stated I believe it is more than $100,000 to $200,000.  The amortization schedule is at least 20 years and we are only five years into it.  At this point it is a substantial amount to pay off those bonds. 

            Mr. Miner asked is there anyway to find out?

            Mr. Lyles responded we will get the underwriters to run some numbers for us. 

            Mr. Udine asked who is paying for the audit?

            Mr. Keller asked are you talking about the independent financial audit?

            Mr. Udine responded correct.

            Mr. Keller responded my understanding is it will ultimately end up with the District under the provisions of the contract. 

            Mr. Udine stated if you choose to pay for it that is your business but I think you should make WCI Property Management pay for the audit since you have not asked for one for five years and the only reason you need one is because there are potential possible mistakes in management.  The Heron Bay Community Association should not pay for it either.  There should be a separate charge and WCI Property Management should be paying out of their standard budget and not pass it off to the residents of either your District or the Heron Bay Community Association. 

            Mr. Keller stated let me clarify my response.  The District is the owner and ultimately the responsible party for the Heron Bay Commons facility and it is an operational expense of Heron Bay Commons for this special audit, in accordance with the management contract; that is what the contract provides for. 

            Mr. Miner asked who is paying for the original audit?  You said there is the original audit we are doing according to the contract and another forensic audit so I understand there is two audits going on.

            Mr. Keller responded the forensic operational audit is something Severn Trent is conducting right now and we believe it is an appropriate thing to do and worth the investment. 

            Mr. Udine stated my second question is with respect to the documents.  I know they have not been giving you all the documents or at least that is what your staff has represented and I cannot figure out why.  In connection with my conversation with Mr. Lyles, WCI Property Management to the extent they are in that building they are a public entity the same way the District is and subject to Sunshine Law and public records law.  The excuses they are giving you that they cannot find certain things, that you did not find certain things and I did not find certain things in my capacity we would have big problems and you should not be accepting those same kind of excuses that you have employees in that facility who are subject to confidentiality agreements which are against Florida public policy when you are dealing with public records and those are things that should be looked at.  In that regard you are doing an excellent job.  You have taken an issue that has been lying around for a long time that people have been aware of through reading minutes of your meetings and I know it is not a comfortable thing.  It is not a comfortable thing for me to bring all this stuff up I do not want to deal with it, but I think it is time we all get our hands around this and fix the problem. 

            Mr. Keller stated the combination of the independent financial audit, the operational audit and the administrative work in looking for some of the records and asking for information.  If it is there, we should be able to have it; if it is not, we need to know why, and if it is public record it should be there. 

            Mr. Hollander stated first I want thank Mr. Keller for our meeting the other day and the time that Mr. Lyles spent with me on the phone.  I also ask this Board to get a criminal authority in to look at the criminal activity going on.  I have two bills from 2002 which were approved and paid for.  If you look at these bills, and I know Mr. Lyles is familiar with them, this is called stealing.  I urge this Board now for the second month to get a criminal investigation into this matter.  It is just not fair and too much stealing is going on.  They are running private businesses out of there.  If you approve a bill and pay for it, are you getting back the money?  When I came to you a year ago and told you they were running private businesses out of that building you did nothing about it.  I do not know, maybe this Board has problems. 

            Mr. Miner stated I would watch what you say.  You will not accuse me of stealing.

            Mr. Hollander stated I am not accusing you of stealing.  That invoice to me is stealing my money. 

            Mr. Miner stated if somebody has taken something, we have a lot of integrity and we will find out.

            Mr. Hollander stated a year ago when I came here and told you they were running a profitable business out of a non-profit facility, $400,000 and the community gets nothing back what did this Board do? 

            Mr. Lauritzen responded I appreciate your concern.  We have two audits going on.  To be fair let’s get the results of the audits.

            Mr. Hollander asked no criminal?

            Mr. Lauritzen responded this could be a bad entry into a logbook, we do not know what this is yet. 

            Mr. Miner stated I would like to apologize if I lost my temper.

            Mr. Keller stated we are going to take care of business and do what needs to be done for the benefit of the District and all of its constituents.  Any information we come across that moves things in one direction or another we will tell you and we will take the appropriate action to follow up on it.

            Mr. Lauritzen stated I have all the confidence in the world that it will happen.

 

THIRD ORDER OF BUSINESS                       Consideration of Agreements

A.     Commercial Utility Maintenance Agreement with North Springs Plaza, LLC

Mr. Moore stated as we do commercial sites in North Springs we now have an agreement, which we have the owner sign that we still own and maintain the lines, but it limits our liability, making it their responsibility for all repairs above the lines.  It is a fairly standard agreement we came up with approximately a year ago.  We did forward it to Mr. Lyles, we have used it four or five times and I recommend we approve. 

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the Commercial Utility Maintenance Agreement with North Springs Plaza, LLC was approved.

 

B.     Construction Trust Fund Agreement #403 for Heron Bay North Two Drainageways

Mr. McKune stated this item was on the agenda last month, but there were some typos in the agreement and they have been corrected.  This is an agreement for drainageway work and Mr. Lyles is familiar with this issue. 

Mr. Lyles stated this is another standard form of agreement.  There were some corrections needed by staff and our engineers and those have been made.  It is now ready for your consideration at this time.  

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the Construction Trust Fund Agreement #403 for Heron Bay North Two Drainageways was approved.  

 

SECOND ORDER OF BUSINESS                    Approval of the Minutes of the March 3, 2005 Meeting

            Mr. Keller stated each Board member received a copy of the minutes of the March 3, 2005 meeting and requested any additions, corrections or deletions.

            There not being any,

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the minutes of the March 3, 2005 meeting were approved. 

 

FOURTH ORDER OF BUSINESS                    Consideration of Work Authorization #141 Parkland Village Bond Issue and Engineer Design Funding Agreement #404

            Mr. McKune stated this is authorization for the engineer to assist District staff with preparation of the preliminary statement, cost exhibits and testifying at bond recordation hearings for an area of development known as Parkland Village.  We estimate it to cost approximately $15,000 with the work being done on an hourly basis. 

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor Work Authorization #141 Parkland Village Bond Issue and Engineer Design Funding Agreement #404 were approved. 

 

FIFTH ORDER OF BUSINESS                         Consideration of Change Orders

A.     No. 2 with Triple R Paving, Inc., for Nob Hill Road, University Drive (Phase 2 and County Line Road for a Net Increase of $179,722.76

Mr. McKune stated on this change order the detailed backup represents approximately 140 items of change requested in the construction contract by Broward County.  The total net cost of the change order will be paid for and it is an obligation of WCI.  This change order results in a reduction of the District’s portion of the project and we recommend approval.

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor Change Order No. 2 with Triple R Paving, Inc for Nob Hill Road, University Drive, Phase 2 for a net increase of $179,722.76 was approved. 

 

B.     No. 5 with Triple R Paving, Inc., for Heron Bay North Drainageways for a Net Increase of $24,000

            Mr. McKune stated this also is a total WCI cost and represents work WCI wanted to contract to basically clean up the site at Meadowbrook.

 

On MOTION by Mr. Miner seconded Mr. Lauritzen with all in favor Change Order No. 5 with Triple R Paving, Inc., for Heron Bay North Drainageway for a net increase of $24,000 was approved. 

 

C.     No. 6 with Triple R Paving, Inc., for Heron Bay North Drainageways for a Net Increase of $272,070

Mr. McKune stated this is also total WCI costs and represents the addition of quite a bit of mitigation area from the shallows along Nob Hill Road. 

 

On MOTION by Mr. Miner seconded Mr. Lauritzen with all in favor Change Order No. 6 with Triple R Paving, Inc., for Heron Bay North Drainageways for a net increase of $272,070 was approved. 

 

Change Order No. 8 with Florida Sewer and Water, Inc. for Heron Bay North Plat 1 Phase 1 Access Roadway Plan and Lift Station TPC #9 (Cypress Point) for a Net Increase of $6,750

            Mr. McKune stated early this week we had a request from WCI to add another change order for this meeting.  It did not make the agenda package, which is a little off specification based on our current process.  I indicated I would bring it before the Board today to see how you would like to proceed.  If Mr. Keller would like, I can hand out copies so that you can look at them.

            Mr. Keller stated if I may, we had some discussion on these kind of issues before, where things come in at the last minute.  We are not trying to be difficult about this and the reason we recommend we do not entertain these unless they are in the mode of being a life safety emergency is all other agendas go through the process, this being a public agency with public interest, so that we have a chance to properly research the information and be able to give you a recommendation, that it is timely, appropriate, accurate, etc. and that you make the policy decision on the record and you do that based on good sound information.  When they come at the last second we cannot do that and I recommend you not take those kind of actions because it is just not a good business practice and I suggest we return this, if it is not a life safety emergency, back to the applicant and tell them to meet the same deadline as everybody else. 

            Mr. Lauritzen stated Mr. McKune does not do this too often. 

            Mr. Keller stated I understand he was gifted with it from somebody else. 

            Mr. Lauritzen asked is it something that needs to get done right away?

            Mr. McKune responded this is about $6,000 worth of demucking work.  If we do not get it approved today, it means that the subcontractor is going to wait thirty days to get paid. 

            Mr. Lauritzen asked is it a WCI expense?

            Mr. McKune responded yes. 

            Mr. Lauritzen stated let’s go ahead and do it this time with a heads up for them the next time that we would like to slow down on that, but there is no reason to keep a subcontractor unpaid; I do not want to be a part of that. 

           

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor Change Order No. 8 with Florida Sewer and Water, Inc. for Heron Bay North Plat 1 Phase 1 Access Roadway Plan and Lift Station TPC #9 (Cypress Point) for a Net Increase of $6,750 was approved subject to management review.

 

SIXTH ORDER OF BUSINESS                        Consideration of Permit Requests

A.     Heron Bay North – Banyan Isles – Drainage Outfall into Canal C-4N

Mr. McKune stated this is a fairly proforma drainage outfall request.  This is the next development area for WCI and they will be discharging into the District canal system.  We have written our letter of recommendation with usual requirements.

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor Heron Bay North - Banyan Isles – Drainage Outfall into Canal C-4N permit was approved, subject to the conditions outlined in the Engineer’s letter dated March 10, 2005.

 

B.     Parkland Golf and Country Club POD 11 – Drainage Outfall into S2-4

Mr. McKune stated exactly as the previous item for this area. 

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor Parkland Golf and Country Club POD 11 – Drainage Outfall into S2-4 permit was approved, subject to the conditions outlined in the Engineer’s letter dated March 2, 2005.

 

SEVENTH ORDER OF BUSINESS                  Consideration of Quit Claim Deed for Parkland Village

            Mr. Lyles stated this request involves an existing right-of-way for a canal previously conveyed to the District prior to the property being developed.  The property is now in the process of being platted so it can be developed.  The applicant has a representative here to give you further detail, but essentially it is a very simple transaction by which they are asking us to quit claim the original dedication of the canal right-of-way back to the current landowner so the landowner can design with a new alignment with modern engineering principals for a canal, outfall and all the stuff that goes along with a drainage project to serve his development at which time it will be reconveyed to the District through the platting process. 

            Ms. Hitchcock stated the right-of-way we are speaking of is the S2-1N and it is presently a substandard right-of-way.  It does not comply with the 130’ wide requirement.  The culverts are in at Trails End and are going in on Nob Hill so we do have the two fixed point; however, with the proposed plat of the property there will be a bend in the conveyance systems along with some widening.  The conveyance of the right-of-way to the District should be on your agenda next month.  We will be giving you more than you are giving us.

            Mr. Lauritzen asked what are you going to be building there?  What kind of density?

            Ms. Hitchcock responded I hope the city will approve 177 single-family homes, 78 age restricted condominiums, 45,000 square feet of commercial, 10 units above the commercial and a 12-acre elementary school site.  The 12-acre elementary school site is proposed to be given to the Broward County School Board. 

            Mr. McKune stated to wrap up this particular item, we have a letter we can put in the record indicating we reviewed the item. 

           

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the Quit Claim Deed for the Parkland Village was approved. 

 

EIGHTH ORDER OF BUSINESS                     Discussion Items (continued)

A.     NSID – Pine Tree-SFWMD Interconnect Project

Mr. Moore stated I wanted to bring you an update.  As you remember I have been approached by SFWMD to participate and give us half the funds to have an innerconnect between Pine Tree and east face of the NSID.  We are going to do that at approximately the intersection of Riverside and Sawgrass Expressway.  It has to be constructed by October 1st.  We mentioned we could possibly change the order of one of the North Springs projects so we could have our consultants prepare a set of plans.  This came in this morning and they have indicated the culvert will connect at the two closest points between Pine Tree and NSID.  It consists of approximately 300’ of pipe with a 36” control structure.  Once it is constructed we will go to Pine Tree and Cocomar and possibly get some recharge.  The primary use of this will be instead of allowing Pine Tree to discharge to the Hillsboro canal we will hopefully be able to take some of their excess water instead of dumping it to the ocean.  We anticipate this cost to be somewhere between $50,000 and $75,000, of which half will be paid by SFWMD.  We do not have an exact cost estimate yet and what we want to do is update you at the next Board meeting. 

 

B.    20” Water Main Plant Transmission Line Project

            Mr. McKune stated as you understand we do have a water treatment system for North Springs.  Before development occurs on an adjacent parcel we would like to put in some additional piping that we have been talking about for ten years.  There is a commercial parcel to the southeast of the plant that is now being talked about for development.  What we would like to do prior to the next expansion of this plant is put in a second discharged water line from the plant that is sorely needed.  On a temporary basis we will come out with a short piece of pipe that will be used prior to the next expansion and then put in a permanent 20” extension that goes across the north side of the plant and then into the commercial parcel.  It will go into the commercial site, up the western boundary and tie into the North Springs water main on Westview Drive.  We estimate this will cost approximately $75,000 to $100,000.  We can either put this job out to bid separately or perhaps change order it into an existing project.  We will look at it both ways to see which is the most advantageous to the District.  This is a discussion item to make you aware of what we would like to bring before you. 

 

C.    Parkland Isles Special Assessment for Landscape Maintenance

Mr. Keller stated we had some discussions on this item the last time regarding the formally landscaped berm owned by the District in the Parkland Isles area that suffered a good deal of damage and loss of landscaping and trees during the windstorms/hurricanes of last fall.  The Parkland Isles Association has voted to assess themselves to restore and re-vegetate the trees and landscaping.  We are trying to get a grasp on the best mechanism by which to do that.  I do not know if we have made much more progress on determining what we have done in the past, whether we pursue a special assessment in the near future to secure those funds, or do we roll it into the uniform method at the tax collectors office in the fall and do it after the fact since it is not an emergency condition, or whether we advance funds from the District and look for reimbursement through the uniform method later on to save the extra expense time and work to do a special assessment. 

Mr. Moore stated staff has discussed this with former staff members and we have done this before some time ago in one of the other districts; they checked the bond documents and it can be done.  We would ask legal counsel to verify that and this can be done by having a special hearing.  The special hearing has to be specific on what the charges are going to be and also recoup the cost of mailing.  It is not that simple but that is pretty much it.  The HOA did tell us that is what they want even though the public hearing will notify each and every homeowner and they will have the ability to come here and either say pro or con against the assessment.  It is a lot simpler, from staff’s standpoint, to assess it in October on the tax bill.  If we wait to do the improvements until that time they will not happen until December or January.  The HOA in this particular area would like to have it done prior to that.  We have an opportunity since funds are available to possibly advance fund it.  We think it is feasible; we do not know if it is possible. 

Mr. Keller stated it will also allow us to have a fall planting schedule which is good and you don’t have to try to rush it during peak summer.  What approximate dollars are we talking about?

Mr. Moore responded $40,000 for replacement.  They approved an assessment of around $70 a unit of the three options available.

Mr. Udine responded I was at the Parkland Isles association meeting last month.  They have a landscaping committee and they are in agreement with this.  They want to pay and have it done, but it is your property so you have to deal with that.  This is something the community wants and factors into your decision.

Mr. Lyles stated as Mr. Moore said we have not internally gone through this to lay out the exact process to follow.  You have three options: the classic public notice, hearings, mailings and for a one time assessment of $70 a unit that seems like a lot.  We can advance funds with a repayment as a result of the budget process.  We can, as a third option, do short term borrowing as a District for up to two years.  Staff would like to find the quickest way to get the improvements done at the least financial and administrative cost to all concerned.  At this point the advanced funding by NSID and going through the $69 assessment process, as part of the budget is the quickest, cheapest and simplest to do it, unless something pops up in which case we will have to go to plan B.

Mr. Keller stated we will bring final information to the next meeting. 

 

NINTH ORDER OF BUSINESS                       PowerPoint Presentation by Severn Trent Services for Management Services

            Mr. Keller stated at last month’s meeting we said we would follow up with a PowerPoint  presentation in terms of your management company, Severn Trent Services, as well as a look at how the District is working and is organized.

            Mr. Lauritzen asked do you want Mr. Mendolia here for this?

            Mr. Keller responded I think it has value to show it now from a timing standpoint.  We are running in a cycle similar to CSID and then if you want a workshop for more detail because there are some shared issues and resources and a lot of inner tangling that would be good to know to keep it in a good coordinated timeline.  We can always present it again to him, we would be more than happy to do that. 

            Mr. Keller introduced Mr. Ed Goscicki of Severn Trent Services.

            Mr. Goscicki stated by way of introduction I am the Vice President and Regional Manager of Southeast US Operations for Severn Trent Services.  The Board requested we talk to you about who Severn Trent is, who is this management company that morphed over the years from Gary L. Moyer & Associates, as he grew and we bought the firm out seven years ago, to who is the parent company and how do we work and who are we.  There we some issues facing the District in terms of the change over, some concerns about who staff is, how we organized and who are the players.  NSID is really all about water utility and drainage services.  They have 9,600 customers, operate a 7 million gallon a day water treatment facility, maintain water for the collection and distribution systems, have over 1,000 acres of lakes as part of the drainage systems and amenities in the property.  Over 7,000 acres of land, 43 wastewater lift stations, 14 miles of gravity sewer, 2,000 sanitary force mains and 1,300 pipe ins.

            STS holds our values very high in everything we do.  This is not just a plaque we put on the wall.  It is not just our mission, vision, value statement in hopefully every office of Severn Trent you walk into because it truly does define how we operate from the top of our corporate structure down through.  The important elements are we value hard work, honesty and teamwork.  The parts that are important to you are that we hold ourselves accountable to the highest standards of ethics, trust and quality.  We are very happy to be part of the solution with the issues that have come up and the ethics, trust and quality are telling you how we conduct business.  We respect and always strive to do what is right for our customers, our employees, our suppliers and the communities we serve.  Not only are we in the business of trying to make a profit but we are in the business of working as a team with our employees, with our staff, with the community and doing what is right comes first and foremost for us in terms of our customers, employees and community.  Who are we?  We are a large corporation, Severn Trent Services, and we are part of Severn Trent PLC, our parent company.  Our parent company is British owned and traded on the UK stock exchange.  It was originally an outgrowth of Severn Trent Water, which is one of seven major now private water utility companies in the UK.  To give you an idea of the size of what went on in the UK, in the 1970’s the UK, with France following shortly after, took over the utilities within the country and regionalized them.  Picture if you took all of the utilities in Florida and regionalized them onto the water management district’s and that is essentially what they did.  They created new entities called major regional utilities and gave them all utilities.  Severn Trent is one of those, so it is a large organization.  Severn Trent Services is a US based company headquartered in Fort Washington, Pennsylvania just outside of Philadelphia and our business is primarily in the water and wastewater industry.  We are in the business of producing some water and wastewater equipment, disinfectant equipment.  We have a metering service group; we have a contract operations group where our primary business around the US is we provide contract services for water, wastewater and utilities, so we would be your contract operator.  We have a pipeline services group that does specialty work in water, wastewater collection, distribution, analysis and correction.  Hydrostop is another specialty equipment group and we have the management services group which is the group you are most familiar with.  It is primarily in Florida.  We have a group in Florida and a group in Texas, which does HOA management.  Our group in Florida is the group you know who are involved in district management and some municipal management services. 

            In terms of Severn Trent and Severn Trent Services operations, we are spread around the country where there are major population centers; our regional headquarters in Florida is in Sarasota, the bulk of our employees are in Coral Springs.  We have 350 people in Florida both in operations and management services.  I head up both operations and management services in Florida.  In management services we have over 120 employees, most of them work down the street in the University Drive building.  We have over 60 employees on fiscal management, records management and IT services.  The management issues have been bouncing around as far as roles and responsibilities and we will get into it a little bit in terms of what is our job as your manager and what you are paying us to do. 

            Shared staffing issues have arisen, such as who are your employees, who are our employees, who are other employees, who are the people actually involved as your staff as district employees, the cost of services, how that is being applied and of course we are interested in continuing excellence in our operations.  In terms of what we do we have two separate contracts with the District.  One is for management services and the other is for financial services dating back to 1996.  The management services contract, and these come right out of the contract in terms of services we are providing, management, consultation, coordination and policy implementation, the kind of things Mr. George Keller does with you on a regular basis, board meeting preparation, attendance, the development and analysis of your budget, contract negotiations and administration of the contracts, and we consult on operation and maintenance.  We do not manage your operations and management.  You have your own staff operating your facilities, but we have our own technical staff as well as Mr. Roger Moore on site who provides consultation and oversight.  We supervise and manage your district employees.  We are responsible for records management, and records management as we talked today involves a lot more than Ms. Jeannie Rugg showing up and making sure the minutes get done and the agendas get out.  It is making sure all of your records are available in compliance with Sunshine Laws and Public Records Law.  The financial services are responsible for accounting, budgeting, your risk management program, insurance requirements, special assessments, utility bills and the customer service associated with it.  The accounting function we will talk about as we move forward. 

            STS personnel -- who are the people involved on this project; in terms of general management, Mr. Gary Moyer is still a contract employee of Severn Trent and actively engaged with Severn Trent on a retainage basis and stays actively involved in CSID, NSID, a few of the districts here and a few of the districts in the Orlando area where he lives now.  He keeps a role with us as a senior consultant, special counselor and also does a few other activities.  Mr. Keller has been with us for a year and I have been with the firm for three years now.  As a unique part of my background and of relevance to this District, in the former part of my career I was the executive director of environmental services for Broward County, I am quite familiar with the NSID structure and relationship with county government, how it all works and I have a working familiarity in environmental services with response to water, wastewater, drainage and solid waste.  I personally have a decent understanding and history and used to live right down the road.  Under records management Ms. Jeannie Rugg is backed up by 14 recording secretaries.  Budget and fiscal analysis, Ms. Karen Ellis, who you have not met yet, heads up our accounting department, we have some 22 accountants working under Ms. Ellis providing accounting services for all of our districts.  Mr. Michael Szymonowicz is responsible for budget and budget analysis.  Mr. Mike Murphy is in our Sarasota office, his particular expertise as part of our operating services was as a CFO for a private utility for some 10-15 years, and brings a particular background in helping to put together the budget for this District having done that on the private utility side.  Assessment roll people are in this building, Mr. Luis Hernandez, Ms. Luvinia La Cap and Ms. Reesa Weaver.  Technical support, some of whom CSID has seen and who have been involved with a few other districts, is a benefit you have not seen much of in the past and these are our operating service technical support people who we are trying to bring more in to service to our management service clients.  They are technical experts on water and wastewater issues, utilities operations, design and construction, who can work with you and your engineers to help on some of your operations.  We point all of that out because you are used to seeing two and three people and many of our districts think Severn Trent are the three people who show up at their meeting.  It is important for you to see there is this large support organization behind them and there are a number of people actively working on your programs on a day-to-day basis that you do not see and who are supported by an even larger group who are available if we need to bring people in. 

            How are you organized?  Board of Supervisors obviously sits on top, you have three tiers supporting you.  You have your attorney, your management company and your engineer, the three primary entities and all of them are contracted to the Board.  They are there to meet your day-to-day needs in running the District.  This is where it gets a little confusing, where you go beneath the management services company, and it is really unique to a number of the districts in the Coral Springs area and the history of the company and how this evolved.  You have a number of employees who are strictly Severn Trent as part of the management team and then you have a number of other staff members who are shared employees.  These are your employees, CSID employees and in some cases other district employees.  Ms. Joni Hayworth is one of those employees, and she is unique because she is a part-time employee of yours, CSID and a part-time employee of ours. 

            Mr. Lauritzen stated I like to think of Ms. Hayworth as a star player.

            Mr. Goscicki stated we have several other staff members like that; Mr. Dan Daly is an employee of both CSID and NSID.  Mr. Jan Zilmer as your HR Manager and Ms. Susan Walker as your accountant are shared employees.  What is unique about this is they are not our employees; they are not really your employees.  They are really independent employees who are part-time for you and other districts.  At one point in time they were our employees.  There have been transitions back and forth on some of those key employees in terms of when they were District employees, Severn Trent employees and now they are District employees again. 

            When the districts first started coming together this made a lot of sense in terms of how the districts were organized and structured.  You did not have to hire at North Springs Improvement District an IT Manager to manage your utility billing system; you could share that expense and resource with other districts and you had Gary L. Moyer and then Severn Trent Services as the coordinator of that activity, so even though they were not our employees we coordinated and pulled them together and got them operating as a cohesive group providing services to those individual districts.  The challenge now is the Boards have grown, you are no longer WCI, and you are a resident controlled Board.  When this first started it was the same developer over everything.  You can turn around tomorrow and say we want to do something different with our utility billing system, we would like to outsource it, we would like to take it all in house, we would like to do whatever, we would like to have Severn Trent do it.  If you were to make that decision it would have a significant impact now on CSID because CSID is the other half of that coin and you have no contractual relationship with each other at all, no interlocal agreements between you about the sharing of resources and the resource is really independent and the management team is the one who has pulled it together and created that efficiency.  It is not a bad plan but you need to be aware of the liabilities associated with it.  You are getting the efficiencies from it but the liability is that CSID can pull the rug out from under you or vice versa, independent of any consideration on your part because there is no legal relationship right now.  There are several other shared employees that exist down through the operating side; field staff, customer service staff and utility service billing are shared.  It is not just the three staff members sitting on the side.  Again, there is some value in sharing the expertise and not having to go out independently to hire all of that expertise on your own.  You have a combination of staff.  You have shared staff, NSID employees, and your contracted employees. 

            From 1996 through today responsibilities have shifted between NSID and Severn Trent Services, as some of these staff members have moved from side to side.  We still have responsibility for general management, and the accounting function has become kind of a shared function now.  At one point the accounting staff was ours and we owned that.  You now have an accountant, Ms. Susan Walker, and we have kind of separated this responsibility where we have Ms. Walker doing accounting and we are doing budgeting and fiscal analysis.  In this transition we reduced our fees to compensate for the fact that you have now taken on an additional employee.  Mr. Jan Zilmer at one time was our employee and is now back to being a District employee, so human resources was on our side and it is now your side of the ledger and again the fees were adjusted accordingly.  Records management is ours.  Utility billing is a shared responsibility where we are involved and Mr. Daly is your employee but we own the computer and you own the license on the software, we have the license on the software, we own the hardware and you own the staff.  We are a team. 

            Historically Severn Trent staff have transitioned back and forth between NSID and Severn Trent, principally Mr. Zilmer, Mr. Daly and Ms. Walker as well as Ms. Hayworth.  With that, our fees have shifted back and forth.  As we have shifted staff to you we have reduced our fees.  We have looked at this and think there is some reconciliation that needs to be done.  Some issues we need to look at are our accounting services we are charging you and we need to look at it in light of what you are doing with your own accountant.  If this is the way the Board wants to continue we probably need to adjust our fee down a little bit more.  That is one area in particular we need to look at just because the way our contract is structured our fee is approved as part of your budget each year.  It is a good working system but it does not create great documentation unless you go back through the budgets and look at the formation.  Again, we have talked about the shared personnel, general accounting, Ms. Walker, utility billing and customer service, human resources and operations.  Moving forward we need to further define roles and responsibilities.  We have some concerns with accounting being an isolated function; you have a single accountant doing your work and we feel as your manager we have financial responsibilities to you.  The employee doing the accounting and responsible for day-to-day transactions is not ours and has no accountability back to us.  We need to look at that issue and get some resolution there.  We need to determine options for service delivery; what is the best way to do these things.  Utility billing is an issue only in terms of we have pulled a lot of other functions off of the computer, and Severn Trent’s need for this computer.  We used to keep a lot of financial management on there and we have centralized it on one system; we need to talk as we move forward as what is the best way to deal with utility billing for you.  Do you want to buy that computer, meanwhile who buys it because you use it, CSID uses it and eight other districts also have utility billing on there.  We need to realign the contract with the services we provide and make sure what is in our contract is representative of the services we are actually providing and the fees are in line.  Again, we are not seeing any major problems in terms of the structure; we just want to make sure the Board understands what the structure is and who the employees are.  We are ready to move forward and we see this as an evolutionary process and not a revolutionary process. 

            Your budget process coming up now is probably the best time to start addressing some of these issues, getting clarification in place and getting those discussions in front of the Board.  The purpose of today was to let you know a little bit about Severn Trent; who we are, the kind of services we can provide, and then talk to you about the structure here and how it was put together. 

            Mr. Keller stated the last point was valid and important in that whatever we want to adjust in line for services with contract organization as can do through the budget process and we can start to have the information to you and a workshop in the very near future as a venue to do that.

            Mr. Lauritzen stated you cleared up some things for me as far as whose employee is whose.  I understand it better now and it makes a little more sense. 

           

TENTH ORDER OF BUSINESS                       Staff Reports

A.           Attorney

Mr. Lyles stated other than the matters we already discussed, we are close to having our Codification Bill through the process in Tallahassee.  I had to rewrite part of the bill twice this month.  It is in the hands of the Legislative Bill Drafting staff now and they have their own set of concerns.  They call me, email me and give me a status report daily because of the critical point we are at.  As I said I had to make changes at the request of the legislature staff, nothing that works to our determent, but as we knew there were some outmoded provisions in the bill because it is 35 years old.  For instance, we had a special statute of limitations shorter than for other public agencies or private parties in the State of Florida and they are saying that is prohibited by general law, you cannot have that.  I said I know but it is a codification bill and I cannot change it.  They said we can and we are going to and we wanted to let you know we are doing that because of our finding it is superceded by general law, so instead of just wiping it out they agreed to let me rewrite part of it to make it very specific that this District is covered by the state’s sovereign immunity and we are an agency of the state and therefore all of the limitations on liability for the District and officers of the District apply to us.  They accepted the provision we prepared and we have had some back and forth like that.  Everybody has given a green light at staff level, we have our sponsors, we are expecting to have it passed and modernized by the next meeting.

 

B.           Engineer

There being no report, the next item followed. 

           

C.           Superintendent

Mr. Keller stated the group that Mr. Goscicki described is working the budget process this year and doing it in a more collective fashion than may have been done in the past, which we think will be a benefit to the District and the Board to get a lot more eyes on it to make sure it is a comprehensive process.  We look to probably next month to have a preliminary draft for you and give you a starting point to work from.  Then in June hold an actual workshop session, if you like, on the budget which we recommend and will be happy to do as a very valuable exercise, with additional feedback in July and hold the public hearing in the July/August timeframe.

 

ELEVENTH ORDER OF BUSINESS               Supervisors Requests and Audience Comments

            Mr. Lauritzen stated I would just like to say for the record with these difficulties we had the last couple of months with WCI and the management of Heron Bay, I appreciate your job as the manager and Mr. Lyles I appreciate your job.  As I have said before we have all been upside down here with management changes and WCI management changes and all of that and the timing of all of this stuff.  Yeoman’s job and thank you very much.  You all are doing a great job on this and I have all the confidence in the world that it will all be taken care of and done right.

 

TWELFTH ORDER OF BUSINESS                 Financial Statements and Approval of Requisitions and Invoices

            There being no questions or comments,

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the invoices and requisitions were approved. 

 

THIRTEENTH ORDER OF BUSINESS          Adjournment

            There being no further business,

 

On MOTION by Mr. Miner seconded by Mr. Lauritzen with all in favor the meeting was adjourned at 5:34 p.m.

 

 

                                                                                                                                                      

Salvatore Mendolia                                                 Matt Lauritzen

Secretary                                                                President