MINUTES OF MEETING
NORTH SPRINGS IMPROVEMENT
DISTRICT
The regular meeting of the Board of Supervisors of the North Springs
Improvement District was held on
Present and constituting a quorum were:
Salvatore J. Mendolia
President
Steve Mendelson
Secretary
Also present were:
Ed Goscicki
Interim Manager -
Dennis Lyles
Attorney
Jane Early
Engineer
Pam Rower
Brian Shields
Jason Jerolick
WCI Communities
Glen Hanks
CSID Board Member
FIRST ORDER OF BUSINESS
Roll Call
Mr. Goscicki
called the meeting to order and called the roll.
SECOND ORDER OF BUSINESS
Approval of the Minutes of the April 12, 2007
Meeting
Mr. Goscicki stated each Board member received a copy of the minutes of
the
There not being any,
On MOTION by Mr. Mendelson seconded by
Mr. Mendolia with all in favor the minutes of the
THIRD ORDER OF BUSINESS
Consideration of Change Orders
A. No. 1
–
Mr. Goscicki
stated this change order was tabled from the last meeting and we are requesting
you defer this item again until we resolve some issues regarding the financing
on this project.
Mr. Mendolia stated I cannot see us paying $58,000 for the tennis
courts. My feeling is whomever is
doing the job should take this into consideration. It is a great deal of money. I want us to look at where the money is
coming from.
B. No. 2
& Final –
Mr. Goscicki stated this change order is for a net decrease of
$276,878.81.
Ms. Early stated this job was originally bid through the District. The low bidder decided he did not want
to do the job. We had some
questions about the second bidder.
WCI came in afterwards to negotiate the bid of the third bidder, which
was Florida Sewer & Water; with the understanding the water and sewer
portion will not exceed the low bid.
They negotiated the water and sewer portion to exactly what the low bid
was. This is a WCI contract; not a
NSID contract and they will be reimbursed at some point through an Acquisition
Agreement for the water and sewer portion.
I just wanted to update the Board that this is final and was an actual
decrease to the contract.
FOURTH ORDER OF BUSINESS
Consideration of Work Authorization No. 174 for
Ms. Early stated this is for the portion of
Mr. Mendolia asked is there any additional money from what was
proposed?
Ms. Early responded this is just for the re-design of the road. We have not bid it yet and there is no
contract. We wanted to revise the
plans so it would meet future requirements.
Mr. Mendolia asked do we have money for the original
road?
Ms. Early responded yes.
Mr. Mendolia asked can we recover money from the original
road?
Ms. Early responded we never built the original road. We re-designed it. Now we have to change it so we can
re-permit it through
Mr. Mendelson asked is the amount of the construction the
same?
Ms. Early responded we put the construction fee in there. Hopefully it will come in at the same
amount.
Mr. Goscicki stated at this point, I do not think we are concerned about
the overall balance of the bond issue.
It anticipated designing and constructing this road. What the CDD Engineer is bringing to you
now is a work authorization to design the remainder of the road and re-design
the one small portion of the road already designed up to the new standards they
are getting from the county in anticipation of what is going to be
required. When the road design is
complete and we need to look at the cost estimate, we will have to make sure we
have sufficient funds before proceeding with the
construction.
On MOTION by Mr. Mendelson seconded by
Mr. Mendolia with all in favor Work Authorization 174 for County Line Road
Modifications in the amount of $36,000 was approved.
FIFTH ORDER OF BUSINESS
Discussion of Refinancing Options for Heron Bay Commons
Debt
Mr. Goscicki
stated we continue to work on this issue.
In fact, I met with Bond Counsel this afternoon to work through some of
the issues. I will contact Bond
Counsel from the original bond to get some opinions. The concerns we have revolve around the
tax exempt financing of the original bonds and how this plays into any
refinancing to make sure we do not do anything to jeopardize this status. We are continuing to work on this issue
and will report back on any progress at the next meeting. There is no requirement to do this. We looked at this as a potential
refinancing like your mortgage.
There is an opportunity to get us some lower rates. No action is required by the
Board.
SIXTH ORDER OF BUSINESS
Staff Reports
A.
Manager’s Report
i.
Discussion of
Broward/Palm Beach Annexation and Service Area
Considerations
Mr. Goscicki
stated in the audience with us tonight is Mr. Brian Shields from Palm Beach
County Utilities. Mr. Shields and I
and the Palm Beach County Utilities Director met a couple of months ago in
anticipation of this annexation moving forward. We looked at some options at
Mr. Mendolia stated it is in progress.
Mr. Shields stated we were approached by the Parkland Utilities and asked
if we were interested in this because it is our service territory. We are built capacity to service this
area. They obviously do not have
the capacity to serve 2,800 units and 10,000 feet of commercial space, which is
what was ultimately proposed on the triangle. When they approached us and said “It
would be much more expensive for us to serve this area, would you consider
bulking this water and bulking wastewater services”. Obviously we said yes. We provided them with our standard cost
agreement. We offer many
municipalities, entities and Special Districts our standard bulk rates for water
service, which includes capacity charges, commodity rates and the cost of
pipeline. In this case, we need to
extend a pipeline across the
At a
Mr. Mendolia stated I have no objection.
Mr. Goscicki stated we will continue staying in touch with the City of
Mr. Shields stated we built the capacity and can provide much more
competitive bulk rates than you trying to build your own capacity. The county will force you to use the
Florida Aquifer and use reverse osmosis.
We already have this in place.
This is something the District will not have to invest in.
ii. Distribution
of Proposed Budget for Fiscal Year 2008 and Consideration of Resolution 2007-3
Approving the Budget and Setting the Public Hearing
Mr. Goscicki
stated I have copies of the proposed budget and will provide them to the Board
and staff but will ask the Board not to take any action at this time. Normally, we ask you to adopt the
resolution for the purpose of setting the public hearing. However, I received this budget two
hours before the meeting and have not had a chance to review it. We have issues in terms of some of the
capital improvements, which are not reflected in this budget. Fortunately, this District does not have
the time constraints that other CDD’s have where you are required to have a 60
day period between the time you approve the budget to the time you adopt the
budget. At this time, I will
provide the budget to the Board for review but hold off on adopting the
resolution until the next meeting.
iii. Consideration
of Resolution 2007-4 Designating Signatories
Mr. Goscicki
stated this item is administerial in nature. The purpose of Resolution 2007-4 is to
Ms. Rower and me as authorized signatories for your financial transactions. We have not changed the names from Mr.
Petty. This reflects the fact we
have changes with our management team within ST and get our names as authorized
signatories.
Mr. Mendolia asked do they have to be ST employees? Can it be someone from the
District?
Mr. Lyles responded it can be someone from the District but you have
former ST employees as your authorized signatories and those need to be replaced
with current ST employees under your management contract. Having an authorized signatory who is
also an employee of the District is certainly acceptable.
Mr. Mendolia stated I think it should be.
Mr. Lyles asked do you want to propose a third
individual?
Mr. Goscicki responded we can certainly add one of the Board
members.
Mr. Mendolia stated I want an employee of NSID.
Mr. Goscicki stated the District does not have anyone serving as a
District employee in a senior management position. I can see where you might want to have a
Board member as an authorized signatory.
You only have operating staff at your Water Treatment Plant as District
employees. For example, Mr. Doug
Hyche is not an NSID employee. He
is a CSID employee. I do not feel
it would be appropriate to have a CSID employee as an authorized signatory. We can let this go for now but we should
think about it. We should have some
checks and balances. I appreciate
that. We have a number of Boards
where we have Board members as additional signatories.
Mr. Mendelson stated I think it is a good idea to have a District
employee as a signatory to provide checks and balances.
Mr. Goscicki stated you are required to perform an outside audit every
year. Not every organization is
required to do this. They provide
your checks and balances by coming in and literally go through everything done
for the year to make sure there are no improprieties or inappropriateness in the
way we conduct business.
Ms. Rower stated in regards to this resolution, we are talking about the
individuals who have the signature authority. We have procedures in place where Mr.
Hyche reviews invoices and requisitions and warrants. The Board approves the checks provided
in the agenda package to make sure they are okay to pay. This actually pertains to the signature
and getting the checks out to the A/P process. There are many procedures in place such
as field operations reviewing your invoices and the Board reviewing the check
registers.
Mr. Goscicki stated excellent point. When we are signing off on work
authorizations, I will not sign off on a construction contract until the
engineer has signed off on it. Then
I will sign off on it and it goes to our Finance Department to make sure we have
enough funds to cover it. In terms
of authorizing payments and creating an audit trail, we have multiple levels of
review looking at whether the money is there and it is appropriate to pay. The purpose of this resolution is the
bank needs a signature when they cut a check. The banks usually only require one
signature but we like to have two signatories. Their name is usually on the
check.
On MOTION by Mr. Mendelson seconded by
Mr. Mendolia with all in favor Resolution 2007-4 Designating Ms. Rower and Mr.
Goscicki as Signatories was adopted.
iv. Consideration
of Engagement Letters with Berger, Toombs, Elam,
Gaines & Frank to Perform the Financial Audit for Fiscal Year Ending
September 30, 2006 & September 30, 2007
Mr. Goscicki stated the current audit firm is presenting to the Board
their engagement letter for fiscal year 2006 and 2007. The fee is the same fee as last year
with a 3% increase for cost of living.
They do an extensive audit as this is a complex District
financially. There are six
different funds within the General Fund as well as the Water and Sewer
Fund. Their work effort is
significant compared to other districts having only one
fund.
Mr. Lyles stated as the manager explained, you have large assessment
areas and funding going with them.
It is a complicated District financially. You are required to have this audit
performed by independent Auditors so you will know exactly how the money is
being handled, make sure everything is in compliance with applicable accounting
standards of state law. I reviewed
the engagement letters and I do not have anything to say about the cost of
living increase. The form of the
agreement is in order and similar to other engagement letters I have seen.
On MOTION by Mr. Mendelson seconded by
Mr. Mendolia with all in favor the Engagement
Letters with Berger, Toombs, Elam, Gaines & Frank to perform the financial
audit for fiscal year ending September 30, 2006 & September 30, 2007 were
approved.
B.
Attorney’s Report
Mr. Lyles stated our bill has passed the full House and Senate. It has been sent to the Governor for
signature. I already had a couple
of inquiries from the Governor’s office regarding details and background
information, which we responded to.
Mr. Mendolia submitted a letter requesting the Governor to consider the
bill and sign it into law. We
should hear any day now. We are
staying on top of this.
C.
Engineer’s Report – Continuation of Discussion of Request from WCI and
NSID to Take Over Maintenance of Medians on University Drive & Trails
End
Mr. Goscicki stated I met with the City of Parkland City Manager and
their staff along with representatives of WCI Communities and CH2M-Hill a week
and a half ago. It was not a very
successful meeting. WCI Communities
is working with a couple of HOA’s in an attempt to identify additional sections
of these roads that might be taken over by the HOA for the maintenance of the
median. We identified areas that
WCI is not doing any building on and has no control versus other developers out
there doing the work. The city
agreed they will contact those builders and try to move this agenda
forward. We made a little progress
and identified where we agreed to work and areas where we agreed to
disagree. We are continuing to move
forward and work through this issue.
WCI has taken the lead on trying to move this agenda item forward. It is a challenging situation. I think the city is concerned about
potential rollbacks, property taxes and where they will fund it. When we point out if the District has to
do it, the same residents will be paying the same costs. However, at this time they have not yet
accepted the roads.
Mr. Mendolia stated you know my feeling on this. A water company should not be involved
at all. In all my years of
building, when you dedicate a road, it goes to the county or city and they
maintain it. It is that
simple. The other factor here is
WCI Communities. Maybe they can do
something since they are still building.
The water company is too involved.
Mr. Goscicki stated we understand and will relay this opinion to
them. The District should tell the
city they are changing the rules after the fact. If the City of Parkland wanted someone
else other than them to maintain the medians, there was ample opportunity before
those roads were built to make this known and get it into the process. Now we are in a situation where the
roads are build and the medians are landscaped and as part of the takeover of
those roads, now we are discussing, maintaining those medians. We are continuing those
discussions. We made some progress
but not as much as I hoped.
SEVENTH ORDER OF BUSINESS
Approval of Requisitions and Invoices
On MOTION by Mr. Mendolia seconded by Mr.
Mendelson with all in favor the check registers for the month of April for the
General Fund in the amount of $973,728.64, Heron Bay in the amount of
$138,245.10, Parkland Isles in the amount of $16,543.36 and the Water &
Sewer Fund in the amount of $1,492,188.40 were
approved.
EIGHTH ORDER OF BUSINESS
Supervisor’s Requests and Audience Comments
Ms. Kate Gray stated I am here in regards to the tennis courts for the
Commons. Two representatives from
WCI Communities were planning on giving money towards these courts. However, in the months following this
pledge, their support has been withdrawn.
The cost of the tennis courts is supposedly $746,000 and $50,000 to
$75,000 for the de-mucking. This
will be a considerable amount of money if we do not have the money in our funds
already to pay. I was wondering how
much money would be added to our tax bill in order to have these four tennis
courts and how fair is it to the 3,100 homeowners who will be billed for this
facility, when only 60 people use this facility. I heard about how great this will be to
WCI Communities and their selling process.
This is true but the Commons is owned by NSID and not WCI
Communities. We want to protect the
taxpayers. I would love to have
four more tennis courts. There are
people here who are not willing to pay for them. I am wondering whether we are going to
get $300,000 from WCI to help us to pay for these courts.
Mr. Mendelson stated this is a WCI project. If a certain group is using the courts
and you are all in one development, why would it be unreasonable to re-assess
everyone to have them pay for a facility they are going to
use?
Ms. Gray responded the reason we need them is because we have 60 ladies
in a league and they are taking up court time to where there are not enough
courts for the casual user. Apart
from these 60 ladies, there are 3,100 homes and all homes will be assessed to
pay for this project. When this
project was authorized, it was because WCI was going to be giving us half of the
money. It seems to me once this
went forward with the idea we were going to get the four courts, then WCI had
financial problems and this money is not earmarked for us and not going to be
given to us.
Mr. Mendelson asked does this need to be discussed with WCI
Communities?
Mr. Mendolia responded in a case like this WCI Communities should be
involved.
Mr. Goscicki stated there is currently no funding anticipated from WCI
Communities and they have made no commitment to this Board to fund this
project.
Mr. Jerolick stated I work in the Property Management Department. I represent the residents of the Heron
Bay Community Association. My
understanding is the decision to build the four courts was a decision brought
through the District and not part of WCI Communities. It was not an issue of whether WCI
Communities was paying for it as it was on District property. This is news to me. I thought this was an impetus through
the District coming up through past minutes and the construction of the tennis
courts. I was not privy to any of
this but it does not mean it is factious.
I am here more as an observator to see how it came about that there were
going to be four tennis courts and how we got to where we are at
now.
Mr. Goscicki stated it reached the point now where we have concerns about
the financial viability of moving forward with these and the impact it is going
to have on the budgets. This is one
reason we pulled the budget back and said, “We need to run these numbers and see
if this is going to impact the assessments”. If it is, we need to provide public
notification as part of the assessment process. This is a fairly public process, which
we are required to do by law. It
has not happened yet. This project
is sitting on hold. I have not seen
any activity.
Ms. Gray asked is there any way you could look through the former
District manager’s notes to see about this? In speaking with Mr. Petty, we were
supposed to be getting 50% of the cost from WCI.
Mr. Goscicki responded quite honestly, past notes regarding a
conversation Mr. Petty may or may not had with WCI, does not mean anything. We spoke with WCI about this issue and
as of this point in time; they are not planning on
contributing.
Ms. Gray asked who suggested the four tennis
courts?
Mr. Mendolia responded they me with us and said, “I know you had
tremendous problems with the tennis courts and are trying to reduce the problem
by adding four additional tennis courts.
We checked and found out there was supposed to be some funds
available. There is no money. This is why we pulled this change
order. We are trying to get the
money.
Ms. Gray asked were there additional surplus
monies?
Mr. Goscicki responded there were some additional bond revenues for
construction of the original facilities and remaining dollars in those bond
revenues, which were available to use for this type of construction. From what we have been able to
ascertain, the thinking was there might be sufficient revenues available to do
this project without increasing the assessments. However, based upon my review, we do not
think this is true and this is why we suspended construction until we can verify
where the dollars are, how much money we have and whether there will be an
impact on assessments. If there
will be an impact on assessments, then there needs to be community input and
make a decision as far as the budget process.
Ms. Gray asked have we received all of our monies owed to us from WCI for
management of the money?
Mr. Goscicki responded I cannot speak to this at this
time.
Ms. Gray stated these are funds we may be able to
use.
Mr. Lyles stated I believe all owed monies were paid by
WCI.
Ms. Gray asked what was the total amount?
Mr. Lyles responded a year ago, their records were audited by District
staff who confirmed $45,000.
Ms. Gray stated in the newspaper it stated $40,000. They anticipated they were going to be
more.
Mr. Goscicki stated this occurred almost two years ago. There was an audit done and a Settlement
Agreement between the District and WCI saying, "We are now satisfied this is as
much review as we need to do”. This
is my recollection.
Mr. Lyles stated the settlement was WCI Communities was required to pay
every penny we could identify, which the District was legitimately entitled
to. We did not compromise or reduce
this number.
Ms. Gray asked has our $40,000 been paid back?
Mr. Lyles responded yes.
Mr. Goscicki stated the settlement was we agreed not to go forward with
additional auditing. We felt we had
done enough and had a good understanding of the numbers.
Ms. Kathy Marinelli asked are we planning to renovate the Clubhouse
because there is a great deal of money in renovations? I would like to have the opportunity to
say whether I want the tennis courts or the clubhouse renovated. I did not think it was necessary because
it was fine before.
Mr. Mendolia stated originally there were plans to renovate the Clubhouse
due to hurricane damage.
Ms. Martinelli asked is there insurance for hurricane
damages?
Mr. Mendolia responded yes.
Ms. Martinelli stated I am hearing there will have to be $500,000 in
renovations.
Ms. Early stated the insurance reimbursement was $200,000 minus the
$50,000 deductible. The pool had to
be diamond-brighted. We had our
Architect go through the entire club and provide a list of
recommendations.
Ms. Martinelli stated in the future, there should be opinions from the
residents on where our money goes.
Mr. Goscicki stated you are in absolutely the right forum. The procedures is discussion with the
Board, the Board making decisions as far as the budget process on what their
goals and objections will be for the District for the next year. There is a public hearing on the budget
every year. It is advertised yearly
in the newspaper during the July timeframe.
Ms. Martinelli stated in past budgets we had reserves. Were these reserved used in the
renovations or earmarked for something else? There is no line item for reserves for
this year or next year. Where did
the reserves go and what are we going to do in the future as far as
renovations?
Mr. Goscicki responded it is important for the community to understand
the difference between NSID and the HOA.
NSID has an agreement with the HOA for management of the facility. As part of their management, they
establish the budget. The details
are within the HOA structure.
Ms. Martinelli asked why are we hiring WCI Communities to manage this
facility? They should report to the
Master Association. Should they
manage under your direction and not have to report to the Master
Association? The Master Association
should not make decisions on what happens with an NSID facility.
Mr. Lyles responded that is not how it is set up. This is one feasible structure but
taking a step back, this Improvement District does infrastructure
financing. We are here to run the
infrastructure program, do the financing, put the water and sewer lines into the
ground, build roads and build the recreation facility from bonds. We typically do not get involved in the
day-to-day management, with the exception of utility plants. We run a water system because this is
what we are in the business to do.
We are not a recreation district or property management company. With the long-term goal of having the
owners control their own fate, we entered into an agreement with the POA giving
them the power on behalf of the District to manage the month in and month out
operations, prepare the budgets, hire the employees and maintain the tennis
courts and the Commons. They do
this through an agreement with the District.
If at any time, they are not doing their job appropriately to make this
facility the best it can be and are not satisfying the Board and management
staff; we can step in and terminate the agreement. We went through a period of review,
amendments and modifications to the Management Agreement; stepped in and
renegotiated some of the terms and entered into a new agreement last
September. As a Special Improvement
District of the State of Florida, we do not typically get involved in the
day-to-day operation of the facilities.
Ms. Martinelli stated if WCI had not been re-hired and you hired a
management company, they would not report to another association. The Master Association has a vested
interest. They do not want trainers
at the new facility. They want them
to stay at the Commons, which they have been at for the past five to six years
and pay 10% to the Commons for usage.
When they go to the new facility, they will be paying 30% back to
WCI. The residents want to keep
their instructors where they currently are versus being sent
elsewhere.
Ms. Gray stated I refer to this as a recreation facility and now I am
hearing it called a tennis facility.
This is our recreation facility and what we bought into. We enjoy it.
Ms. Martinelli stated it has been remodeled.
Ms. Gray stated I am hearing this facility referred to as a tennis
facility. I did not buy into a
tennis facility. This bothers
me.
Mr. Jerolick stated there are a few mis-representations. I am hearing many of these issues for
the first time.
Mr. Goscicki stated if there are concerns from the community about the
management of the facilities, let’s schedule a meeting with the Property Manager
and representation from the community to go through these issues. As was pointed out, this is not an issue
for the Board to talk about the day-to-day management. If there are continual problems in the
management of the facility, we need to revisit our contract but the issues you
are raising needs to brought to the HOA’s attention. I would be happy to participate at that
meeting to make sure the message is getting back to the
Board.
Ms. Martinelli stated I came here to find out where the money went for
the tennis courts.
Mr. Goscicki stated I do not think the money went away. When I became involved and we started
looking at the financials, my main concern was there were not sufficient
funds. We went through a detailed
review of the financials. The plan
was to go out and do additional borrowing to make this happen. A short term borrowing was being
anticipated for this District by the previous manager. This was always the plan. The concern was when we looked at the
short term borrowing; we realized this will have an impact on the
assessments. It was always
anticipated we would have to borrow some money to complete this project but when
we looked at what it will do to the assessments, we wondered if this would fit
within the existing assessments. If
we cannot fit it, it will trigger a notification procedure. Our concern is to make sure we do this
in the Sunshine and not do things behind closed doors. This is a governmental entity and we
were concerned if we did not slow this project down or suspend it, we would be
getting ourselves into trouble.
Ms. Martinelli asked are we getting tennis courts or
not?
Mr. Goscicki responded currently it is in limbo.
Mr. Mendolia stated there is no money. If there was money you would have
them.
Ms. Martinelli asked what is it going to take?
Mr. Goscicki responded we are currently doing a financial analysis, which
will be incorporated into the budget.
If this means there needs to be an increase in assessments, we will go
through the public hearing to get it approved. You are looking at a couple of months
from now to go through this process.
Ms. Martinelli stated Mr. Petty was supposed to do a line by line
analysis about the expenditures in the Commons budget. Is there any way you can make this
presentation to us?
Mr. Goscicki responded we do not prepare the Commons budget. The HOA does.
NINTH ORDER OF BUSINESS
Adjournment
Mr. Goscicki stated I would like to introduce Mr. Glenn Hanks who is a
Board member of the Coral Springs Improvement District.
Mr. Hanks stated I wanted to stop by and introduce myself. Even though we have been next door to
each other, very few of us get to know members from other
Boards.
Mr. Goscicki stated this meeting room is part of the CSID facility. We share staff with CSID on the utility
side of the business as well as the management side. We also share many common issues with
CSID in terms of drainage, water treatment and wastewater reuse. As CSID starts moving forward with their
programs, this will become more appropriate when we start looking at some of the
water resource management issues.
Since you have common management, we can keep the communication
going.
There being no further business,
On MOTION by Mr. Mendelson seconded by
Mr. Mendolia with all in favor the meeting was
adjourned.
Steve Mendelson
Salvatore J. Mendolia
Secretary
President