MINUTES OF MEETING
The regular meeting of the
Board of Supervisors of the Coral Springs Improvement District was held on
Present and constituting a quorum were:
Bob Fennell President
Sharon Zich Secretary
Also present were:
John Petty Manager
Dennis Lyles Attorney
John McKune Engineer
Cedo DaSilva CH2M-Hill
Randy Fredericks Field Supervisor
Doug Hyche District Staff
Mr. Fennell called the meeting to order and Mr. Petty called the roll.
SECOND ORDER OF BUSINESS Approval of the Minutes of the November 20, 2006 Meeting
Mr. Fennell stated each Board member
received a copy of the
There not being any,
THIRD ORDER OF BUSINESS Award of Contracts
A. Light Ford Trucks
Mr. Fennell asked did we approve those trucks last month?
Mr. Petty responded the Board approved something similar. These trucks are for the water management supervisors. These are the next level of trucks. The first level were our standard work trucks. These are 4x4’s and XLT.
Mr. Fennell asked did you receive one bid?
Mr. Petty responded Chevrolet did not bid. We normally receive bids from Chevrolet and Ford. Aid these bids comparable and did they beat the state bid prices?
Mr. Hyche responded yes.
Mr. Petty stated the state puts out a contract each year for these vehicles and for each class (standard, work truck, 4x4, etc). We track our bids to theirs to see if we received as good as or better deal than they did. These prices from Ford Plantation who supplied us with leased trucks in the past, beat the state bid price.
Mr. Fennell asked does more than one Ford dealer ever bid?
Mr. Petty responded occasionally we get more than one dealer to bid. Typically there is a Fleet Manager who understands the process better than most. It is all in the understanding of how these bids work. Most Ford salesman are not looking at the public notices section of the newspaper. The dealer who understands how to sell these trucks through their Fleet Manager is the best and has the most knowledge is able to price these trucks according to their inventory.
Ms. Zich stated these are good prices.
Mr. Fennell stated next time we solicit bids for trucks, please obtain bids from more than one dealer.
Ms. Zich stated I agree.
Mr. Fennell stated you should be able to compete one Ford dealer against another.
Mr. Lyles stated they solicited more than one bid but this is the bid they received. They did not receive a bid from another dealer.
Mr. Fennell asked did we place an ad in the paper to solicit bids?
Mr. Petty responded we did a notice and contacted any dealers who contacted us in the past.
Mr. Lyles stated they complied with the legal requirements for competitive bidding. If we only receive one qualified bid, then there is no constraint upon you to go out for more.
Mr. Fennell asked did you contact Sawgrass Ford?
Mr. Hyche responded we contacted Sawgrass Ford and Maroone.
B. Landscape Maintenance
Mr. Petty stated this is for the on-site landscape maintenance contract. We have not done this type of bid in over 12 years. The current contractor mows the grass but does not fertilize, plant flowers or trees. His fee has not been adjusted in over 10 years. As a result, he stopped doing much of the work he needs to be doing to the plant. The grass needs to be fertilized and the beds need to be taken of. It has not been mulched in four years. After Hurricane Wilma when the area was exposed by lack of tree cover/canopy, we decided a landscaper doing minimal work needed to be replaced. We took the original specification and re-bid them. The lowest price by a responsible contractor was from JLS Landscape Maintenance in the amount of $39,785 annually.
Mr. Fennell asked what were we previously paying?
Mr. Petty responded $8,000 a month.
Mr. Hyche stated depending on what they did. He was only billing directly for the work he was doing. We want the quality.
Ms. Zich asked who is the current contractor?
Mr. Hyche responded Nanak.
Ms. Zich asked are you familiar with JLS?
Mr. Petty responded they performed a
field investigation. Mr. Hyche
interviewed them and found their qualifications to be in order. Nanak is what is left of an old company I was
familiar with 15 years ago that maintained Turtle Run and
Ms. Zich stated as long as they check out, I approve.
C. Potable Water Flocculent
Mr. Petty stated I request we pull this item from the agenda as it is still under consideration at this time by staff.
Mr. Fennell asked what does flocculent mean?
Mr. Petty responded it is an aid in the settling of material in the water treatment plant.
FOURTH ORDER OF BUSINESS Consideration of Request for Surface Water Management Permit for Phase II Water Treatment Plant Improvements
Mr. Petty stated this item was approved at the last meeting.
FIFTH ORDER OF BUSINESS Canal Bank Restoration Status
Mr. Petty stated I provided a change order to the Board for consideration. It was not included in your agenda package because it was just completed with Stiles Landscaping for the Phase 2 tree removal hurricane preparedness project. I am happy to close out this project. We have been highly productive in our hurricane prevention program, which is discussed at almost every meeting. We removed enough tree material within our drainage areas to give me the ability to say if a hurricane approaches, reasonably speaking, we should not have any concerns from trees. Yes there are still some trees out there, however, we removed the vast majority of all concerned trees. The remaining trees are few and are more towards the top of the bank than the water or are of a nature such as Coconut Palms, which have a root structure we are not concerned with. We have a low risk as far as we are concerned from trees and flooding concerns in the future. This is something we need to monitor and maintain. We feel this has been a successful and hard fought program and are happy to see it complete. Mr. McKune will give you the status of the change order.
Mr. McKune stated CH2M-Hill is prepared to certify approximately 83% of the originally contracted trees have been removed. This is the amount of the contract we are recommending payment for. This change order deducts $157,000 from the original contract amount and this finalizes the contract.
Mr. Fennell asked does Stiles have any issues with us?
Mr. McKune responded no.
Mr. Petty stated this is in consideration of any issues they have and part of the negotiation between the engineer and contractor to close out any contracts.
Mr. Fennell stated this problem snuck up on us. Going forward, how do we prevent this problem from re-occurring?
Mr. Petty responded we initiated policies for our staff to be responsible for the removal of all new growth within rights-of-way.
Mr. Fennell asked do we need approval from the Board to direct staff to perform the removal?
Mr. Petty responded you already gave this approval. Instead of relying on an ordinance of the city, which is political in nature to protect this interest, we are directing staff. If staff sees new seedlings of Australian Pines or any other nuisance species, they immediately write it down in a report and the District does the removal either with our staff or the contractor. It should be removed by staff because these will remain small if we stay on top of it.
Mr. Fennell stated I want to have a yearly survey of all banks with any problems they perceive. This report should be due on July 1st.
Mr. Petty stated under this contract we have an inventory for all trees within the District. We can certainly do an annual review. I suggest the Board authorize this in the form of a proposal.
Mr. Fennell stated I came onto the Board not knowing a great deal about trees. There will be other supervisors following us who will not be familiar with the history. I want to set a precedence so they have insulation against my negligence in the future. I do not want to make the same mistake twice for at least another 20 years.
Mr. Petty stated for newer Special Taxing Districts, CDD’s in particular, the state requires a Public Facility Report each year showing the status of the drainage facilities. I think this is what you are asking for.
Mr. Fennell stated we can make a proposal directing staff to provide a tree status report in the Public Facilities Report every year.
Ms. Zich asked how did we save $157,000?
Mr. Fennell responded we did not cut all the trees down. The canals are 87% pacified and we are declaring victory.
Mr. Fennell stated the Sunshine WCD has a canal going down as low as 11’. Who is responsible for the canal bank? I bear responsibility for protecting the residents in my District.
Mr. Petty responded Sunshine is responsible for its drainage, the same way CSID has responsibility for its drainage system. We have been discussing the east outfall with Sunshine because we looked at the plans and know there was a berm on the Coral Springs side that is no longer there, although there are homes there. Instead of a berm, you now have a slope. This is what we have left. Sunshine conceptually agreed to perform a Hydrologic Analysis but they do not need it for discussion purposes until January. CSID has the same responsibility because we have a similar issue.
On the north portion of CSID there is a border canal behind Walgreens between Coral Springs Drive and University Drive. The canal is owned by Sunshine from top of bank. However, from the edge of water it becomes CSID property. The water is not supposed to drain into the canal from the back of those houses. It is supposed to go back out to the front of the yard. There used to be a berm but it does not exist anymore. CSID should have had a berm there. An issue we still need to look at is whether the berm was put in by Sunshine or CSID and whose property it was on. I believe we are going to end up working together with them on the issue.
Mr. Fennell stated since it is 11’ on the east outfall canal and given we have been discussing flood levels of 12’ and not knowing for sure if the C-14 canal will go higher. I see this as a significant problem. I can be convinced from an engineering standpoint how rigid this is. The north canal needs to be addressed immediately. I want strong facts on what we are going to do and how we are going to do it. Fortunately the area north of us is NSID property. If this canal fails, it does not hurt them at all.
Mr. Petty stated the canal on the north is owned by Sunshine. We are separated by Sunshine on the east and north. Since the canal is past the pump station on the north and is at the same level as the C-14 canal, if they do nothing it does not hurt them. The only entity who will possibly get hurt if there was an issue is this District. I am not sure whether they have the urgency they should have. I looked at where the canal meets the C-14 canal to see whether or not this is a real problem and there are two 8’ culverts where the water flows both ways. You do not have to worry about Sunshine. Even if Sunshine was walled off with concrete, you are still connected to the C-14 canal and you cannot stop the water from coming the other way.
You have some issues to address with due diligence. Do we need to rush into them as an emergency condition, I do not believe so. We have 30 years experience with this same system. This just did not happen in the last six months. Experience has shown the system can and does operate well. According to our engineers, the system is functioning well and they have options to make it function even better by simply making some adjustments at the pump station instead of limiting each pump station. To balance them out, we get better flow on the eastern side. Our permit is based on a total number, not on a pump house number. Our overall goal of looking at redundancy of outfall pipes and basins is something we should pursue. We should do this in a straightforward manner. I do not think we have to rush. We have time to look at it.
Mr. Fennell stated I would like an answer before the next meeting. I saw a number of 11’ according to the survey, which on any of those canal banks is unacceptable.
Mr. Petty stated this has not occurred. You are talking about whether or not there is a wall 13’ high at the District’s boundary or 2’ back on the residents’ property. This elevation only occurs at the building pad. You end up with a curved line.
Mr. Fennell stated I want to have this re-confirmed and to know the severity of this problem from the engineer. If it is 11’, then there is a real issue. However, if there is something behind it, which means the top of the dyke is 13’, then this is a different issue.
Mr. Petty stated I believe he is measuring the high points within the 20’ area.
Mr. Fennell stated let’s find out for sure. If it is 11’ then we have a problem because there is no way you can handle the water inflow and could not pump it out fast enough into the C-14 canal.
Mr. Petty asked if the C-14 canal was at 11’, could you pump out of CSID?
Mr. Fredericks responded the pumps will probably be under water. I am sure it will be difficult.
Mr. Petty stated I do not know whether the levy is major issue but the 11’ water table in the C-14 canal is not the issue. You are not going to be able to pump out.
Mr. Fredericks stated you will be pumping but whether you will be pumping 50,000 gallons per minute would be questionable. My flapper is not going to be flapping in mid-air.
Mr. Petty stated they are moving water. They do not do it at a high pressure. It is variable pressure so if there is any back pressure, the flow is going to go down considerably.
Mr. Fennell stated I was told we could pump into a back pressure of at least 2’.
Mr. McKune stated it depends on the differential. If the C-14 canal comes up too high, it will give you back pressure. If your canal surface goes up in conjunction with the C-14 canal, then you still maintain a positive flow. The pumps add so many feet by virtue of the pump. You are both correct. It depends on the relative elevations.
Mr. Fredericks stated there is a flapper on the end of those pumps. If it is under water, obviously it is not going to be flapping.
Mr. Fennell stated if you have enough pressure on one side, it will lift it up.
Mr. Fredericks stated it will still pump but the gallons per minute will be cut down.
Mr. Fennell stated this straightens my argument for water flowing in from the C-14 canal. Please check on this and let me know. I am still trying to understand the severity and extent of this problem. So far all the data keeps coming in worse rather than better.
Mr. Petty stated one item we have not discussed, which needs to be discussed in this report is there has to be staging. In our practices for handling flood control, we monitor weather reports. If we see a rain event coming, we will start to pump based on severity. The intensity of the pumping is gauged towards the anticipated event. As the rain starts to fall, we try to monitor our pace ahead of it. It is key for us to maintain our pace because we cannot start pumping when the event starts. We must start ahead of it. Our policy must have stages where we are going to pump and then there will be a period of time where it is no longer practical to pump and it is time to abandon the station.
Mr. Fennell asked what do you mean by “Abandoning the station”?
Mr. Petty responded there will be a time when you cannot pump anything and it is time to move out of the station. We have people whose lives may depend on it. We need to have a policy saying, “If the canal gets up to ‘x’ we get out”. We have to consider this since we could have a hurricane with an 18” rainfall event in a six hour period. No one is going to be able to keep up with the water and South Florida will flood. This is a possibility and we must plan for it to minimize the loss of life. In other words, we are not going to be able to build a drainage system to handle every single storm so we must have a policy specifying the time we expect to tell our staff and the residents of Coral Springs they must evacuate.
Mr. Fennell asked do we have remote controls?
Mr. Petty responded after an event, you would not trust remotes, even if we had them.
Mr. Fennell stated I trust it more than having the pump station shut off.
Mr. Petty stated these are run by diesels or propane. Even if you had a radio connection, cranking it up remotely is difficult. If it is electric, you may be able to run it by telephone or some other means of telemetry. Again, it is very doubtful under these conditions. When you abandon a station, you will not want to take it down to move the guys two miles inland. You want to move it north of Okeechobee. There will not be any radio power or telephones left.
Mr. Fennell stated there is going to be a lot of people left.
Mr. Petty stated hopefully not.
Mr. Fennell stated they will never get out.
Mr. Petty stated I do not think we have enough roads but hopefully there will be a plan.
Mr. Fennell stated I think you are asking an excellent question. What are you recommending?
Mr. Petty responded as part of our concern for the importance of what we do next, staging is an issue we should have the engineer look at.
Mr. Fennell stated I agree. So far we have been considering the 18” storm over 36 hours. I do not think this is the 100 year flood but more like the 50 year flood. If we actually hit a 100 year flood, there will be 18” to 20” of rain in a 24 hour period. Luckily we have a model. We can go back and say, “What should we do in this case”. I have to believe we really cannot get out of here based on when I tried to get out of here when Hurricane Andrew was approaching.
Mr. Petty stated during these events, we meet with the city and county emergency response crews. They are constantly asking us what the situation is. There will come a point in time where Mr. Fredericks will know if a situation is hopeless or not and it is his responsibility to report back to as many government agencies still in operation that is time to go. We should know this as well based on the design of the system and the hydrologic review.
Mr. Fennell asked is there anything other agencies can do for us? I do not think so from what I saw.
Mr. Petty responded FEMA is more like a revenue resource than anything else.
Mr. Fennell stated they are more like an insurance company.
Mr. McKune stated SFWMD is currently updating their Lower East Coast Water Supply Plan, as they do every five years, which controls our Consumptive Use Permits and how much water we can discharge from the pump station into the canal. They put out a draft of what they want to recommend through the year 2025. There are measures requiring various utilities to spend millions of dollars for what I consider in some cases to be marginal. One of the items they are looking at is the interconnection of drainage districts. This means connecting directly to Sunshine, which connects directly to NSID. We looked at this in the past. In fact, we currently have one interconnection between NSID and Pine Tree WCD. There is a one way connection benefiting us. It has never been used but it is there. I agree this needs to be done in stages but we may need to include whatever recommendations we come up with this grand plan of the SFWMD’s and vice versa.
Mr. Fennell stated I do not believe in being too passive. I am more than willing to be politically active and push for anything we think will benefit us. Someone up there is putting together those plans and we can decide how we want to influence them or whether or not we approve of them. Keep us appraised. Mr. McKune has a good point. We need a plan for a worst case scenario. Is this what you are asking for?
Mr. Petty responded if we do improvements, the staging level should rise. You should have material benefit from putting in secondary pipes.
Mr. Fennell stated at the point when we call it a day; we are going to give up draining the area. Do we even have to?
Mr. Fredericks responded it is difficult to figure out how to drop the level of the water in these canals with the weather reports you get on the TV and even with conferences with the SFWMD. Usually they are more accurate than what you hear on TV. However, sometimes they call for 10” of rain yet we only received 3”. I go by the information from SFWMD because they are more reliable.
Mr. Fennell asked how do you know how much to pump?
Mr. Fredericks responded we start the pumps up at a certain time period before a storm hits and try to lower the water level 1’ to 3’, depending on how much rain is expected. Hopefully when the storm ends, we do not end up with any water in the canals.
Mr. Fennell asked have we used the model CH2M-Hill prepared as a predictor of outflow? He needs a predictor of how many hours to get the canal down to a certain level if we receive 4” of rain. He can have a model rather than relying on his own experience, which is considerable. I want to see this model showing actual flow-out versus rainfall cases.
Mr. McKune responded it is hard to predict this because it depends on how saturated the ground is with rainfall previous to this event.
Mr. Petty stated I think we can do it. There are two different programs. One program is one he can use as an operator so when he runs the pumps, it shows where the water level will be after 4”. He will be able to look at his elevations. It does not tell him how to do his job but gives him suggestions such as what might happen based on hydrologic flow. He has to balance this with what he sees. At least it gives you something else to make your analysis on. If he knows the discharge elevation, he knows what his pumps can do. It is a fairly simple calculation we can write on any machine and make available to him. Before he sits down and talks with the other government agencies or us, he can run this calculation and say, “I have another 2’ in the C-14 canal, my canals are looking good and the rainfall is not heavy”.
Mr. Fennell stated we need to keep investigating in areas to give him better predicted tools. We have other pieces of data he can use such as the wells. Mr. McKune talked in the past about how those different well levels go up and down, which are a real measure of the saturation level. There might be a correlation. We can also dig test wells around the city. I do not know what it will take as far as a model but there is no reason why we cannot obtain this type of data.
Mr. McKune stated the model is predictive. What I am envisioning for Mr. Fredericks to use is a series of simple graphs showing how long to run the pumps based on the number of inches of rainfall within an hour.
Mr. Fennell stated you need to have CH2M-Hill talk to Mr. Fredericks about what he wants from a model and prove to him it is valid. He is the guy who is going to turn the valve and needs to believe this is going to help him.
Mr. McKune stated he knows how fast he can take the canal down when he turns on the pump. We can match the inflow to his knowledge of how fast he can take the level down.
Mr. Fennell stated I think this will be one of the most beneficial things we can do for him. When we were talking about different pumping levels, he said, “It takes a long time to take down the west area”. He is correct because the west area holds more water. Therefore, if you make a decision too late, you still have an issue of trying to take down the water level because you started too late and have to pump out more water in order to get the water out. I think there are some issues of when you start and how much water you take out of one canal over another.
Mr. Fredericks stated I received calls last Thursday about the water levels in the canals because of the heavy rain.
Mr. Fennell stated I thought the canals were high.
Mr. Fredericks stated no one was close to flooding. Someone said, “I lived here for four years and never saw the water this high”. I told him I lived here for 30 years and the water has definitely been this high before.
Mr. Fennell stated I want to see us moving ahead on predicting whether we are safe and have an operating condition to do better. Let’s make sure we have a good model to control the total amount of water we can pump.
Mr. McKune stated I will email you a copy of the program.
SIXTH ORDER OF BUSINESS Staff Reports
Mr. Lyles stated as we speak, the Broward County Legislative Delegation is meeting to consider the first public notice of the local bills filed this year including your bill. Tonight’s meeting is more of a formality. They will just introduce the item and the sponsors. The actual public hearing and the debate is expected to be held in January when they have the full public hearing. They have this bill on their agenda today and it is making its way through the process. We expect it to be read and introduced. There may be a few preliminary questions. We are on our way.
Mr. Fennell stated we will see what happens.
B. Engineer – Drainage System Study Update
Mr. McKune stated I spoke with Mr. DaSilva earlier and nothing additional has come to the Board. There was additional survey data on the perimeter but no additional modeling runs. I want to incorporate your recommendations in a request to them to make sure they run together. We had a good meeting with Mr. Fredericks at the pump stations evaluating what condition they are in so we can make recommendations.
Mr. Petty stated one item I have been discussing with the engineer is our deep wells for water and sewer. Over the last year we had a pump and motor under repair and have been going back and forth with the manufacturer. The bottom line is we decided to purchase spare parts so we can replace parts as they break down because we had some down time that put us into trouble. As we have gone back and forth with the manufacturer, Mr. McKune who was working with CH2M-Hill at the time, started negotiations. Now he is working for us as our CIP. He closed the deal and we are going to be receiving a new pump for $3,000, which will be the backup for our deep injection well. I thought I would mention this since Mr. McKune did so well over a year’s time of negotiating with the contractor.
i. Discussion of Water and Sewer Rate Sufficiency
Mr. Petty stated we have not adjusted the water and sewer rates since the early 1990’s. The graph before you summarizes the rate sufficiency analysis. The analysis is based on the same conditions and priorities of the rate study performed in the early 1990’s. In this rate study, there were three basic categories; a Renewal and Replacement category of $285,000, Compliance Funding category of $550,000 for innovations and corrections to the plant process so we can meet DEP requirements and Capital Improvements. We decided we better start saving some money in our rate structure to handle those items needing to be replaced or repaired. In total, we will receive $1,000,000 in Capital Improvements to our system in the rate study.
The Capacity section of the rates, which is the monthly fixed minimum, will be tied to debt service only. As you may recall, it costs $10 for water and $10 for sewer per month for every single family home. The Commodity portion of the rates will be calculated based on our operating cost, which varies to some degree or another based on how many gallons we make. Capacity is supported by debt and Commodity is supported by operational cost. We wanted to include Capital Projects, Compliance Funding and Renewals and Replacement into the rate structure at a rate of $1,000,000 per year. This is what the early 1990’s rate study considered. When you include the current budget it is askew. Under the Commodity section we have costs exceeding the capability cost per thousand gallons.
Mr. Fennell asked what is the theory you are trying to reach?
Mr. Petty responded we are looking at the sufficiency to see if we can meet the criteria from the early 1990’s, which is to pay for operating costs, debt service and the new line items of $1,000,000 worth of capital expenses. The answer is the Commodity portion is not balanced. Our operating costs exceeded our cost per thousand gallons, which is $1.90. Therefore, you see a Commodity Offset where we have to transfer $3,699 into Capacity. In other words, we had to shift some of the operations costs out of Commodity and transfer into Capacity where we had some room because we paid off some bond issues. I do not have the debt in Capacity to support the $10 for water and $10 for wastewater per month. I am trying to see if in total, we make the same dollar amount and just askew on Capacity and Commodity. I have taken what was askew in Commodity and put it into Capacity to see if Capacity can handle it. It could only handle a piece of it, not all of it.
Mr. Fennell stated I do not know if I am following this as well as I should. I understand fixed costs.
Mr. Petty stated your intentions were to have $835,000 each year available for capital projects. This is where you are supposed to be. You are currently at a negative $753,000. This means you are not building a Capital Projects Fund anymore and are feeding off of any past year’s surpluses. We show this in this year’s budget.
Mr. Fennell asked are there fixed costs in Commodity?
Mr. Petty responded Commodity has variable costs and Capacity has fixed costs, relatively speaking. In the early 1990’s, Capacity did not just have fixed costs. The only costs were debt service costs. Typically in a rate study, Capacity is assigned to fixed costs. Fixed costs usually include debt service but also manpower since this is typically a fixed cost. Whether I do 4,000,000 or 4,500,000 gallons a day, I still have the same guys working here. I cannot adjust my personnel based on the gallons made. Our growth is not severe enough anymore for me to even do it on a yearly basis. It stays fixed every year.
Mr. Fennell asked is Commodity Offset the money we have coming in?
Mr. Petty responded this is the money you have to pull out. You can handle $3,000,000 with the Commodity Fee of $1.90 per thousand gallons. One category, Plant Operations is $3,969,835. I have to pull a full $3,700,000 out of Commodity and transfer it someplace else to make this system work. We also have Administrative Costs of $1,345,795 and Field Operations of $1,369,614. The total for all these items is $6,000,000. If I charge $1.90 per thousand gallons for 5,000,000 gallons per day, which is what we are doing, I come up with $3,000,000. The Commodity Offset is saying we are askew in Commodities by $3,699,256. We are going to put this onto Capacity because maybe it has room for it. With the Capacity we pay off debt.
Ms. Zich asked is this the first year this has occurred?
Mr. Petty responded this is the first year we have done an analysis.
Mr. Fennell stated we have been making money for the last 10 years.
Mr. Petty stated in total we had the money. The Board asked us to determine the impact because we knew we had a big pot of money. We built up a $7,000,000 construction account and this is why the Board decided we cannot do a rate increase. This was the result of a Capital Improvement Plan, which was done piecemeal and was fairly economical. These problems did not appear until we did the rate sufficiency. When we did this year’s budget and saw we were using some of last year’s carry forward, this was a sign for us to do the rate sufficiency. This is why we did this review. You have been diligent about paying off debt. The $20 per month ting from every single family home generates a considerable amount of revenue of approximately $4,300,000 from our current user base. This is fixed because we are at build-out. This eats up almost all of the $3,600,000 and we are now $750,000 short.
The difference between fixed and variable costs is not reflective of today’s conditions but this does not raise everyone’s monthly amount. I need $750,000 to break even plus the cost of a capital improvement program. We are looking at an increase to break even and will need a larger increase to pay for a Capital Improvement Plan. According to the Usage Data, you have breakpoints. This is our conservation rate, which we get 5% to 10% of our revenue from. The intent is to charge people above a certain amount to process the water from an alternative water source. It is supposed to encourage conservation.
The first class with 12,600 gallons/month is for single family homes. SFWMD would like for us to have this number at 8,500 gallons/month as it is more reflective of today’s technology with fixtures in homes and more acceptable for the lifestyle and education program ongoing for the last decade. This in turn lowers each category so there are fund increases by going to today’s breakpoints in the conservation rate. Currently we give away a minimum of 3,000 gallons/month with our monthly minimum. This means when you pay $20 for water and $20 for sewer, we do not count the first 3,000 gallons of use. We want to remove this free usage of 3,000 gallons, which goes back to the 1970’s. We feel this will bring in a considerable revenue supply without raising the monthly minimums to each user. Finally we want to look at the rates and updating Capacity and Commodity to show you what rate increases will generate revenue as far as the Capital Improvement Program so the Board can look at their options.
The final result of this rate sufficiency analysis is staff is recommending to the Board authorization to do a rate study with three options. The first option is to do it in-house with current staff where we update and modernize the existing rate study. This can be done by Severn Trent Services your Contract Manager or CH2M-Hill your Contract Engineer. It can also go out to an independent specialist. There are a couple of firms nationally who do this for a living. The higher up the scale you go, the higher the fees. In-house the cost is included in your budget. If you outsource to Severn Trent Services and CH2M-Hill, the cost will increase to $30,000. Is the CH2M-Hill cost similar?
Mr. McKune responded it will range from $40,000 to $60,000.
Mr. Petty stated they have a unit specializing in this matter. If we go outside, it typically goes over $100,000. Our suggestion is you do this in-house and keep the current methodology as it gives you all the options you need.
Ms. Zich asked do we have someone in-house?
Mr. Petty responded yes, the same person who did this study. We can update and modernize this and give you options to consider. Certainly you do not need to make a decision at today’s meeting.
Mr. Fennell stated I have a hard time understanding this format.
Ms. Zich stated I understood it until I realized the Commodity Offset was transferred to another category and then added to the revenue. The difference was a negative amount.
Mr. Petty stated we are taking money from carry forward. That does not mean you are getting in revenue and the numbers before you are incorrect.
Ms. Zich stated he is saying we had a surplus in prior years and it never caught up with us. Now we are pulling it out so it is catching up with us.
Mr. Fennell stated I am looking for data over a long period of time showing the revenue projections for five years. Do you perform a rate study for five or ten years?
Mr. Petty responded five years.
Mr. Fennell stated we know what our revenue is because we prepare the budget every year.
Mr. Petty stated there are projections based on actual spending and the conditions to be calculated. It is only just based on the budget for the past five years.
Mr. Fennell stated it will give us a good idea of what revenues we have as well as the costs.
Mr. Petty stated one year’s revenue is all we need. I do not need to go back five years. Our rates and units are fixed and our usage is the same as the last five years. Our usage has been decreasing over time because we have conservation rates. This means we are actually selling less water for the same cost. If you conserve, you end up paying for the conservation at the end of the day. This project is built-out and I know what my revenue is going to be, unless everyone wants to use double the water tomorrow. I looked at our water usage between last year and what was calculated in the five year report created in the early 1990’s. The numbers are fairly close, although we have dropped usage slightly. The five year report is not going to give you any revenue projections.
Mr. Fennell stated it tells me where we are going. It is easier for me to see variable costs such as labor and chemicals, which give you a product cost. Then you have the debt service and capital costs.
Mr. Petty stated the variable cost is determined by an independent authority based on what is variable and what is fixed. For example, you have a fixed amount of pressure that I have to get a pump attached to before I can even get one drop of water into the line. There is a breakpoint on my electrical cost. After the breakpoint, it is variable once I hit it. The same with chemicals. This is how the lime softening plant works. The same with chlorine. While you may call them variable costs, they have a fixed portion to them. This is why it is not as easy as it looks and why they charge six figures.
Mr. Fennell stated the costs to run the plant are operating costs. Then you have capital costs, which are made up of debt service and capital. In some ways, these are overhead for the operation. Nevertheless, we still have to pay these costs but this is where the money comes from. Up until now, we had a surplus and have been paying down the debt. You are saying there is going to be an increase in capital spending and there will be a debt projection of where you think we are going to go.
Mr. Petty stated let’s throw this out of the picture because we are $753,000 in debt without even talking about building one piece of the plant. I am not talking about collecting $835,000 per year of capital improvements so I can prevent disaster in the future. I am spending $753,000 before I even break even. You add both numbers to find out how far off you are with the 1992 analysis. Under the 1992 analysis, we were approximately $1,500,000 off.
Mr. Fennell stated I hear what you are saying about the bottom line but I am trying to understand this from the standpoint of what revenues are coming in. I am correlating it to the budget we just passed and understanding where the money came from.
Mr. Petty stated you have approximately $400,000 in Miscellaneous Income and over $200,000 in Revenue Reserve. Delinquent Fees, Processing Fees and Lien Revenue Fees are part of the calculation since they are cost recovery items. You do not include them in your rates. They depend on the work you do.
Mr. Fennell stated they are not significant fees; neither is Technology Sharing and Contract Personnel Service. Those are income items. I see $866,000 and debt service of $2,000,000. This leaves us with $6,600,000.
Mr. Petty stated there is a line item in your adopted budget under revenues; Transfer in for Renewal and Replacement of $200,000. We are not looking for action at today’s meeting. This is for discussion purposes only as one supervisor is not in attendance. We can bring this back to the January meeting as an agenda item for discussion. We looked at the rate sufficiency and discussed it among staff and our engineer and were of the opinion it is substantially correct in form.
Mr. Fennell stated I need to reconcile what you are telling me and compare to the budget. You believe there is a rate insufficiency problem. There is an issue going forward with the Capital Improvement Plan.
Mr. Petty stated we believe there is a split between the fixed and variable cost allocations, which are askew. The rates are insufficient to get you what you listed as your goals in 1992. Certainly we have new goals in the capital improvement program that have yet to be listed.
Mr. Fennell stated we have to take those into account. Please give us a current list of various competing groups within Coral Springs as far as cost per monthly averages. Take our monthly average and show the cost for living in NSID or Tamarac.
ii. Monthly Water & Sewer Charts
iv. Utility Billing Work Orders
v. Complaints Received/Resolved
Mr. Petty stated these items are standard in nature. We wish you a very happy holiday.
Mr. Fennell asked were any complaints received and/or resolved?
Mr. Petty responded there is nothing material.
Mr. Fennell asked what is under the utility billing work orders?
Mr. Petty responded those were corrections and re-reads on the meters. There is nothing out of the normal scheme. There is also nothing out of the ordinary on the monthly water and sewer charts, which track our chlorine, infiltration, hardness and color.
SEVENTH ORDER OF BUSINESS Supervisor Requests and Audience Comments
There not being any, the next item followed.
EIGHTH ORDER OF BUSINESS Approval of December Financials and Check Registers
Mr. Fennell asked do we actually have to approve the invoices?
Mr. Petty responded you do not have to approve them per se. However, we request you do so if we get materially above the budget percentage requirements where a budget amendment is made, but we do not get it to you within the 30 days of the close of the year, we can refer to it as a budget amendment since you approved it. This is basically a safety concern for administrative issues.
NINTH ORDER OF BUSINESS Adjournment
Mr. Fennell stated we have been through a great deal in the last year. CSID staff and management have done an excellent job over the past year; everyone from the attorney, manager to our accountants. Thank you very much!
There being no further business,
Sharon Zich Robert Fennell