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 Vice President
Glen Hanks Secretary
Also present were:
Dan Daly Interim Manager
Ed Goscicki Co-Manager –
Dennis Lyles District Counsel
Jane Early District Engineer – CH2M-Hill
Shawn Skehan CH2M-Hill
Isabelo Rodriguez CH2M-Hill
Cedo DaSilva CH2M-Hill
Daniel Bohorquez CH2M-Hill
Kevin Mulshine Prager, Sealy & Company
Denise Ganz Ruden, McClosky, et. al.
John McKune District Capital Improvement Coordinator
Doug Hyche CSID Utilities Director
Randy Frederick CSID Drainage Supervisor
Jim Aversa Chief Operator – Wastewater
Kay Woodward CSID Accountant
Jan Zilmer CSID Human Resources
Dave Hulett Sunshine WCD Supervisor
Craig Wrathell Wrathell, Hart, Hunt & Associates
John Hart Wrathell, Hart, Hunt & Associates
Bill Benson Keefe, McCullough
FIRST ORDER OF BUSINESS Roll Call
Mr. Goscicki called the meeting to order and called the roll.
Mr. Goscicki introduced Mr. Hulett from the Sunshine Water Control District.
Mr. Fennell stated welcome Mr. Hulett. We are happy to have you here.
SECOND ORDER OF BUSINESS Approval of the Minutes of the July 16, 2007 Meeting
Mr. Fennell stated each Board member
received a copy of the minutes of the
Ms. Zich stated are Ms. Woodward and Mr. Zilmer Severn Trent Services employees?
Mr. Daly responded no, they are CSID employees
Mr. Fennell stated on page two, the sentence halfway down the page should say, “The way we collect revenues is by charging each household a certain amount of money for canal maintenance”, not water. On page three, “$175,000” should be “$75,000”.
Mr. Daly stated on pages 25 and 26, “Mr. Hoffnagel” should be “Mr. Halperin”. The next paragraph should say, “Most people use 100 gallons per day or 3,000 gallons per month per person”, not 2,000.
Mr. Hanks asked is the 2,000 gallons per day in the sentence above correct?
Mr. Daly responded no, it should be 3,000 gallons.
THIRD ORDER OF BUSINESS Presentation of Keefe,
McCullough & Co., LLP Audit for Fiscal Year Ended
Mr. Benson stated the Board members previously received copies of the audit. I looked at the financials for the prior year and wanted to point out one or two items and answer any questions from the supervisors. The table at the bottom of page five of the financial statements, shows on a consolidated basis, the entire District for the year. The right two columns, Total Primary Government show under Change in net asset a decrease of $611,178 versus $102,507 last year. For the operations of the District, you make a great deal of free cash flow. However, in recent years, you have been taking those free cash flows into your Water Treatment Plant for refurbishment, replacement and repairs. At a meeting of the Board I attended last year, there was discussion about the upcoming bond issue and the long range plan for the bond to provide the necessary capital. We will not be taking all our free cash flow every single month and pouring it into repairs to keep the assets going.
On the top of page 15 is the CASH FLOWS FROM OPERATING ACTIVITIES, which shows we made $2,701,644 from operations. In addition, we received grants of $498,416. This means realistically on a month to month basis, we made $3.3 million. Then we paid off $1,340,000 in bonds and put $2,062,485 into our Water Treatment Plant and paid interest of $689,917. The good news is we made $3.3 million. The bad news is we spent $4,092,402 for the Water Treatment Plant. I think there is talk of going out and circulating bonds in order to have the capital necessary to have a long range plan to protect the capital assets and not taking our monthly cash flows and pouring it into the Water Treatment Plant. You are along the lines of where you need to be as a District. Things are going well. Do the supervisors have any questions? This is your statement and you need to accept it so the District Manager can file it with the appropriate governmental agencies.
Ms. Zich stated this is August 20th and the audit says September 30th of last year.
Mr. Benson stated correct.
Ms. Zich asked does it usually take a year to receive this report?
Mr. Benson responded not in most instances.
Ms. Zich asked what is the normal time to receive this report?
Mr. Benson responded typically for a September 30 year end client, we are usually in and out of the field before November and December and provide the annual statement by January 31st.
Ms. Zich stated we are receiving ours in August.
Mr. Benson stated I can discuss this with you off the record.
Ms. Zich stated I did many of these and I am amazed at the amount of time it took to complete the audit.
Mr. Goscicki stated you can expect to see a significant improvement in next year’s financials.
Mr. Benson stated this is a function of two things; a function of the auditing firm and what they are auditing and how quickly information is provided.
Ms. Zich asked were there many problems?
Mr. Benson responded we had some issues, which we addressed with staff. I think they made some changes. I feel comfortable about the statement and there being improvements in the future.
Ms. Zich stated I was surprised to see the date of this audit.
Mr. Daly stated Ms. Woodward our in-house CPA is with us today. We have one more month to go after this one until year end.
Ms. Zich asked when will we see the audit for this fiscal year?
Mr. Daly responded as soon as our audit firm can get it out.
Mr. Benson stated we will do all of the field work in the October through December time frame. Therefore, I think it is realistic to see a draft in January. Last year, when we came in November or December, the documents were not available and it took a considerable amount of time to obtain. We have gone through all of this in great detail with staff and I feel comfortable going forward with them.
FOURTH ORDER OF BUSINESS Distribution of Proposed Water and Sewer Budget for Fiscal Year 2008 and Consideration of Resolution 2007-9 Setting a Public Hearing
Mr. Goscicki stated we distributed the proposed Water and Sewer Budget to the Board in order to set the public hearing for the next meeting. Staff did a great deal of work in putting this budget together. Mr. Daly in particular, worked through the details with Mr. Hyche. This is probably a better budget than you have had in quite some time in terms of the information and comfort we have with it. It fits within the framework of the overall revenue we are predicting with the rate increases. The debt coverage you will see projected in the Engineer’s Report is consistent with this budget.
Daly stated I want to give special thanks to Mr. Hyche and Mr. Zilmer and most
importantly Ms. Woodward for their assistance involving this budget. As far as wages, there was a 6% increase
across the board. Historically it has
come in much lower than the 6%. This is
one of the determinations made. I
provided to the Board a copy of an article published in July in the Sun
Sentinel showing a 4.4% cost of living increase in
Mr. Fennell stated in the end, we will have to review all of the salaries.
Mr. Daly stated there are a handful of employees who are maxed out. I am one of them as well as Mr. Zilmer who will not receive any raise other than a cost of living increase. Last year, the pension was 9.8% of salary and was approved with the idea the pension plan will be taken elsewhere. However, it remained at 6% even though it was budgeted at 9.8%. This year, it was at 8% for discussion purposes. Some employees came back to us because they heard about the 9.8% pension. However, it turned out this was not the best thing for us and we can go in this direction. This will be a decrease from last year but an increase from last year’s actual.
Mr. Fennell stated one of the issues we have going forward is the need to become cost conscious. We just went through the hurricane debris removal. We are no longer in the position to where we have cash balances. It is going to have to be this way. We cannot take a 7% increase every year in operating costs, which is what we have been doing. Hopefully we can decrease some of our costs in water filtration.
Mr. Daly stated the next increase will be in electricity.
Mr. Fennell stated although at this point, the electricity costs are substantially higher than last year. They were already high last year.
Mr. Daly stated if you want to put more new Water Treatment Plants online, it will most likely raise the electricity cost, according to Mr. Hyche and Mr. McKune. One of the high points is Mr. Zilmer has been working with our Insurance Broker in regards to health insurance. What was the original cost?
Mr. Zilmer responded they came in with an increase of 18.8%. Every year we go through this. They are saying it is non negotiable. We bid the insurance out and received a good plan from Blue Cross/Blue Shield for 80 cents more than what we are currently paying. In the budget, there was a 15% increase.
Ms. Zich asked is it equivalent coverage?
Mr. Zilmer responded it is actually better.
Mr. Fennell asked are we approving this budget?
Mr. Lyles responded you are approving it as a proposed budget and setting the public hearing for September 17th.
Mr. Fennell stated the only other issue I have is the interest from the State Board funds, which we are projecting at 3%. This always bothers me. Interest earned from the money market account was 4%.
Mr. Hanks asked are there any guarantees on the capital improvement costs for next year?
Mr. Daly responded I went to CH2M-Hill and asked them to provide an estimate on the capital improvement costs. On the onset of this capital improvement plan, they have to know what is going to be done next. They should be able to produce a number so as not to be two or three times higher later. In past years, there was a collection pot with all of this extra engineering work and it is never accounted for. In this budget, I broke out Mr. McKune’s time in a separate line item so it was not misconstrued as engineering work. We have an engineering firm who supplied me with a number to put into the budget, which they feel is accurate at this point in time.
Mr. Goscicki stated the bulk of the engineering fees are not in this budget. They will be charged in the capital improvement program for the bond financing.
Ms. Zich asked is the Capital Projects Coordinator part of the capital program?
Mr. Goscicki responded we will be charging this back against the bond proceeds but we wanted to identify it separately in the Operating Budget.
Ms. Zich asked is this an expense?
Mr. Goscicki responded yes.
Ms. Zich asked is it part of the project expense?
Mr. Lyles responded it is an expense they are identifying for you but if I understand correctly, it is 100% chargeable to the project and what we pay for bond proceeds and not your assessment program. It will be a capital charge; not an O&M charge.
Ms. Zich asked why is it in there?
Mr. Fennell responded it does not have to be just for the ongoing projects. This is for our engineer as opposed to the Capital Projects Coordinator.
Mr. Daly stated for example, for canal bank maintenance.
Mr. Lyles stated not out of this budget.
Mr. Goscicki stated the main reason for putting it in this line item was to identify the fee so the Board can see what we are doing, rather than burying it under a $40 million capital improvement program. The real reason was to expose it to the Board.
Mr. Hanks stated our expectation is for there to be additional engineering fees in the Capital Improvement Budget. We already know there are additional fees associated with the General Fund.
Mr. Goscicki stated you have engineering fees in the General Fund. What we went through with Mr. Daly and the engineer, was in the Water and Sewer Fund; we did not see any significant engineering work outside of the major capital improvement program and did not see other engineering activities. Therefore, we kept $50,000 in this line item. Quite honestly, I will be surprised if we hit this number this year. The engineers have been busy moving the capital improvement program forward.
Mr. Fennell stated it is a field expense.
Ms. Zich stated so long as it is not just for projects. I was concerned we were using the funds for another purpose.
Mr. Goscicki stated you are absolutely correct. We could theoretically roll 100% of Mr. McKune’s contract into the capital improvement program but we wanted to expose it to the Board.
Ms. Zich stated $80,000 is a great deal of money to put in there.
Mr. Goscicki stated some of his expense needs to be taken from this line item. We have not figured out how much of his time was spent doing water resource permitting associated with the reuse plan. It may or may legitimately be capitalized. However, some percentage will need to remain in this line item.
Mr. Lyles stated let me remind everyone, this is just a proposed budget and you are not adopting this budget. Between now and the public hearing on September 17th, they can work with this number.
Ms. Zich stated thank you!
Mr. Fennell asked are there any other concerns?
Not hearing any,
Mr. Goscicki stated Resolution 2007-9 by title is:
“A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE CORAL SPRINGS IMPROVEMENT DISTRICT APPROVING THE BUDGET FOR FISCAL YEAR 2008 AND SETTING A PUBLIC HEARING THEREON PURSUANT TO FLORIDA LAW”
FIFTH ORDER OF BUSINESS Consideration of Certain Documents Related to the Issuance of New Bonds
Mr. Fennell asked what are we considering?
Ms. Ganz responded the Amending Resolution, Subordinate Bond Resolution, Reimbursement Resolution and the Engineer’s Report.
Mr. Lyles stated you will be accepting the form of the Engineer’s Report but the resolutions are formal resolutions of the Board.
Mr. Goscicki stated with us tonight is Mr. Skeehan from CH2M-Hill, who will give a brief overview of the capital improvement program; Ms. Ganz, Bond Counsel and Mr. Mulshine with Prager, Sealy & Company.
Mr. Skeehan from CH2M-Hill provided the following presentation on the capital improvement plan, which will be made a part of the official record:
● Why is CIP important to CSID?
○ Provides highest level of service to customers:
▪ Affordable rates
▪ High redundancy and reliability
▪ Replacement of aging infrastructure
○ Meet current and future regulations:
▪ Implementation of advanced water treatment technologies and effluent reuse in the future.
▪ Responsibility to regional aquifer recharge through reuse in connection with Water Use Permit.
▪ Preserve the surficial aquifer allocation
● CIP goals
○ Replacement of aging infrastructure in water and wastewater plant.
○ Proposed projects
○ Providing high level of service to customers
● Costs by project and phase – Phase 1 - $39.6 million:
○ Solids Handling - $7.5 million
○ Nanofiltration Plant - $24.8 million
○ Rotoguard/Belt Press - $1.5 million
○ Wastewater A&B - $3.9 million
○ Reclaimed Water Facility - $400,000
○ Monitoring Well - $1.5 million
● Costs by project and phase – Phase 2 - $14.7 million:
○ Reclaimed Facility/Conveyance - $13 million
○ Operating Building Expansion - $1.7 million
○ Uncertainty of what is required for this work – dependent upon agencies and Water Use Permit.
● CIP schedule:
○ Expended over a three year period
○ Changed timeline to reflect starting period in October rather than April and ending in September of 2010, with exception of solids handling which is currently underway.
○ Estimates are from prior presentation in May and pertain to 2008 dollars.
○ A $5 increase on water in 2008, $6 increase in 2009 and $7 increase in 2010. Significant drop in 2011 and into the future. As part of bond covenants, 3% is required, which is included in the increases.
○ As part of the bond covenants, 3% is required in 2011 and 2012.
Mr. Goscicki stated the first three years reflect the increase the Board approved two months ago. Mr. Skeehan is reflecting in years 2011 and 2012, there will have to be a 3% increase to keep up with the cost of living.
Ms. Zich stated these increases are from July 1st through June 30th.
Mr. Skeehan stated correct.
Mr. Fennell stated another way of looking at this is taking the rate of inflation and saving 3.5% per year and figuring out the last time you increased rates.
Mr. Skeehan stated this was 12 years ago.
Mr. Fennell stated you are projecting this out another eight years beyond the 12 years. For 15 years, we were able to keep rates flat by using our own infrastructure and not having to pay it off. Eventually the infrastructure got worn out. This is still reasonable as far as what we paid originally and what most people pay now as reflected in Section 4.4 of the Engineer’s Report compared with other districts. We are still at the median price.
Mr. Skeehan stated I provided a quick overview of the general process of the utility cost allocations and revenue requirements.
○ 2008 - $5.17
○ 2009 - $5.90
○ 2010 - $7.20
○ 2011 - $2.76
○ 2012 - $1.74
● Overview of rate development process (from
Utility cost allocations
○ Utility revenue requirements
▪ Revenues to be recovered from user charges
▪ Other system revenues
▪ Allocations of revenue requirements to utility functions
▪ Customer class user characteristics
▪ Allocation of costs to user classes
▪ Design of utility rates
● Projected operating expenses from 2003 to 2012 with annual increases – being addressed with the rate changes.
● Existing debt service
● CIP funding – 1st Revenue Bond:
○ $44.6 Million - $39 million going towards capital projects
○ 3.1% issuance cost including insurance
○ 4.2% interest rate
○ 30 year debt repayment schedule
○ Repayment of bonds wrapped around existing debt
○ 2 years capitalized interest
● CIP funding – 2nd Revenue Bond:
○ Bond Issued in 2011
○ $14.7 Million
○ 3.1% issuance cost including insurance
○ 4.2% interest rate
○ 30 year debt repayment schedule
○ Repayment of bonds wrapped around existing debt
● Required change in rate revenues with new debt service:
○ 2007/08 – 15%
○ 2008/09 – 14%
○ 2009/10 – 14%
○ 2010/11 – 5%
○ 2011- 2014 – 4%
● Rates compared to other local communities:
○ 2008 analysis
○ CSID in lower ranking of rates with the 15% increase
Mr. Fennell stated the new
construction areas in Port St. Lucie and Bel Glades have to charge $80. We can charge less until we need to increase
our rates. When there are new
communities, you have to step up and pay the new costs. Now we need to increase our costs but even
so, we are still less than the City of
Mr. Skeehan stated clearly CSID has been on the right track for a number of years and this chart reflects this very well.
● Projected debt coverage with proposed rate revenue adjustments for FY 2008 through 2015:
○ Addresses all components in the Engineer’s Report for revenues and operating expenses.
○ Money for debt service is meeting the requirements for the new bond.
● Projected bond coverage without Series 2010 bonds
Ms. Ganz stated assuming the bonds are issued now and in the future to finalize the program, you will have certain rate increases to support this program, which is shown in the first table. The second table shows the bond coverage without Phase 2, which will have a more limited rate increase to support the Phase 1 capital improvement program.
Mr. Skeehan stated the schedule of the draw down, as included in the Engineer’s Report, shows the monies allocated to the bond. It was modified slightly to work within the three years required by the bond. Ultimately, you are in the perfect position in order to continue providing this high level of service to your customers, meet the current and future regulations and provide class 1 reliability across the board.
Mr. Fennell stated the Board has heard this presentation before in more detail.
Mr. Skeehan stated correct.
B. Engineer’s Report
Mr. Lyles stated a motion to accept the Engineer’s Report, as presented by the Consulting Engineer is in order at this time.
Mr. Fennell stated in the report where you discuss how much water was used, you said “millions of gallons”. This should be “thousands of gallons”.
Mr. Skeehan stated we will have this corrected.
A. Amending Resolution (2007-10)
Ms. Ganz stated my firm serves as Bond Counsel for the District and we created the financing documents you need to support your CIP. In terms of the documents to proceed with the financing, staff looked at the existing bond resolutions. You have the water and sewer bonds from 1992, which are outstanding under a general bond resolution. Those bonds have a lien on the water and sewer revenues generated by the system. When we looked at the documents, we realized unlike other more typical situations; we could not just issue more debt. We needed to complete a coverage task to make sure you had enough revenue to pay your existing debt within the new bonds. The 1992 and 2002 bonds could have financed some of the earlier new money to build the Water Treatment Plant. However back in 1972, when these bonds were issued, they were approved in a referendum. Not only are they secured by water and sewer revenues, but they are backed up by the District’s full faith and credit, meaning if for some reason revenues were ever short, you have to pay the bonds. Of course this never happened and never will.
This resolution is limited because it was approved in a referendum back in 1972 where only $30 million was approved. This has already been issued. The bonds currently outstanding are funding the original debt. This means you have a limit on it. However, once you issue the $30 million in bonds, other than the financings, you will not issue any more debt with a lien. Of course, this makes it more complicated but we will figure out something because you need to issue bonds to improve your system.
We decided with your Underwriter and District staff to issue bonds on a subordinate basis to the existing bond. In order to do this, we need to amend the existing bond resolution so when water and sewer revenues flow into the District to pay debt service on your existing bonds and operating expenses, they open a spot to pay these subordinate bonds. The old documents did not have this “spot”. To do this, we need consent from a percentage of the bondholders of the senior bond. We were looking at how this will happen and had the Underwriter talk to the bondholders who will need to consent. While we were looking at amending the senior bond resolution to allow this money to come in to pay the subordinate debt, we suggested modernizing the flow of funds and bring it up to date to give the District more flexibility and ability to better manage those water and sewer revenues, which were trapped in your Enterprise Fund. The way this was set up before, they were trapped at the bottom of this fund after you paid the debt in a way, which was not working for you. We said “Let’s talk to the parties who have to consent to see if they will consent to this amendment and change of the flow of funds”. We worked with the bond insurer of the existing debt; one of the holders of the 1992 bonds.
The first resolution before you is an amendment to the existing water and sewer bond resolution to permit the money to come in up to a certain point to pay the outstanding debt and create new bonds. There is a complete description in the overview circulated to the Board. The redline resolution was provided to you so you can see the changes. The consent is attached as an exhibit to the resolution.
The other item we have to take care of is to draft the bond resolution to the subordinate bond. We wanted to give you a more up to date bond resolution, similar to the senior bond resolution so it will have a flow of funds. However, in 2014 when the existing senior bonds were paid in full at their final maturity, the bonds issued under the subordinate bond resolution will only receive bond revenues and the other bonds will go away. This created a complication because I had to draft the resolution to work while they were junior bonds so when the old bonds were gone, you did not have to do anything more to this resolution. You had it all in place. This made the resolution somewhat complicated but it had the same flow of funds built into the senior resolution. Now you have a Rate Stabilization Fund for surplus funds and Renewal and Replacement Funds, which you can use annually in accordance with your Consulting Engineer’s recommendations.
There are two phases of improvements in this capital improvement plan, which the engineers are recommending. The first phase is what you want to finance now. The subordinate bond resolution gives you the ability to issue bonds without a limit to fund the water and sewer system, as long as you meet certain tasks. Obviously, you have to be able to pay the debt service on your bonds with some extra coverage. This is what the bond insurers require. The first series of bonds you issued are the 2007 bonds for the Phase 1 improvements, which are the projects totaling $39 million. This resolution puts a mechanism in place for us to move forward and get those bonds marketed and sold without having to take any further action. Attached to this resolution are the following documents we will be using in connection with the sale of the bonds:
● Prospectus prepared by Disclosure Counsel
● Bond Purchase Agreement prepared by Underwriter; subject to parameters as set forth in the subordinate resolution:
▪ Setting a par amount
▪ Setting the interest rate
▪ Delegating authority to the President to award the bonds to Prager
▪ Finding the negotiated sale is in the best interest of the District
▪ Putting into place what you need to do to get this bond issue in place
All we are authorizing today are the 2007 bonds. If you decide to do the second phase of improvements, we will have the opportunity to consider a bond issue, which requires an Engineer’s Report to estimate the cost of those projects. We will then come back to you with a financing plan for the next series of bonds. Keep in mind, the bond resolution is a general framework for future bonds.
In conclusion, we request you amend the senior bond resolution so we can get the junior bonds issued, fix your flow of funds, set up a mechanism for you to issue additional bonds for new improvements to your system and authorize the first series of bonds to be marketed and sold. We are hoping to have the bonds sold in September.
Mr. Fennell stated sounds good to me. Does the attorney approve?
Mr. Lyles responded I was part of the working group who developed these documents, have seen all of the drafts and revisions to the drafts and participated in conference calls. I can tell you from the standpoint of District Counsel; these documents have been refined to the point of where they are state of the art. They will accomplish the goals described in the Engineer’s Report and outlined from the technical financial side by Bond Counsel. I have no further comment or input on the resolutions described by Ms. Ganz.
Mr. Goscicki stated we have been working on these documents for at least three months and working through the structure and the process. I think counsel did a good job working with the bond team to get these documents structured to give us the additional flexibility we are looking for as well as getting these bonds in place. This was not a simple undertaking and Ms. Ganz makes it sound simple. We had to get approval from the existing bondholders in order to amend your existing resolutions to go out and create new debt. It was an arduous process.
Mr. Hanks asked is this going to make future bond issues easier?
Ms. Ganz responded yes. All of hurdles in the documents will be behind you and you will be left with a simple set of documents. When we get to Resolution 2007-11, Mr. Mulshine from Prager, Sealy & Company can give you a simple overview.
C. Subordinate Bond Resolution (2007-11)
Ms. Ganz stated the resolution you are being asked to approve today is identical to the one provided to the Board in the agenda package. We made some cleanup changes.
Mr. Goscicki stated this is what authorizes staff to proceed with this new debt.
Ms. Ganz stated it delegates the authority to you to execute the Bond Purchase Agreement, within the parameters of the bonds.
Mr. Mulshine stated this way they do not have to wait for another meeting to issue the bonds.
Mr. Lyles stated this resolution identifies several documents; one of which is an Offering Statement. If it is determined something is wrong with the Offering Statement without minor revisions being possible, they may have to come back before the Board. If the interest rate parameters cannot be met, they may have to come back. I had this happen twice in the past 30 days. If the bonds get ready to close but they cannot sell them for the interest rate cap the Board approved, we have to come back to you. The assumed interest rate is 5%.
Mr. Mulshine stated these are parameters on an issuance the residents approve through a Preliminary Offering Statement. This has to be sent to investors prior to anyone being allowed to purchase bonds. This document will be sent out in the next couple of days. As early as next week, we will be able to set prices on the bonds, set the actual interest rates and sign the contract with the District. However, we are looking at the week of September 3rd to close and wire transfer the funds. The entire transaction could be finalized as early as next week and funded the week after.
Mr. Hanks stated it gives us the flexibility so we do not have to wait 30 days but does not give the President the authority to go out and issue $10 million more in bonds.
Mr. Mulshine stated exactly.
Mr. Fennell asked what is the interest rate?
Ms. Ganz responded it was reflected in the Engineer’s Report.
Mr. Fennell stated I saw 4.75%.
Mulshine stated if you look at the MMD Index, which is the highest rated bonds
by the state of
Mr. Hanks asked does the structure of the bond allow us to pay them off early or refinance if the situation presents itself?
Mr. Mulshine responded there are no provisions to pay them off eight or nine years from now but you always have the ability to refinance them. There are provisions where if interest rates go down, you can refund them.
D. Reimbursement Resolution (2007-12)
Ganz stated we want to make sure until you get the bond issued, if you were
expending funds, you want to get reimbursed and evidence your official intent
to get those funds from the bond issues.
This is a requirement in the Federal Tax Code. In April of this year, you indicated your
intent to reimburse certain expenditures from the bond issue but at the time
the reimbursement cap was $7.5 million, which was not enough. I felt more comfortable supplementing it and
making sure we bring it up to your standards for issuing the 2007 bonds. All the resolution does is gives you the
ability to get reimbursed for expenditures prior to
Mr. Hanks stated we are still paying for it but it helps our cash flow.
Ms. Ganz stated the way this works is these bond funds will be held by the trustee and you will be able to requisition out of the bond funds. If you can get your requisitions together, you can have cash to spend for hard construction costs incurred since March 19th and soft costs. You will be able to recoup those out of the bond issues. The way it was explained to me, the Engineer’s Report took into account expenditures we expended to date, which we thought you could be reimbursed for.
Mr. Fennell stated I want to make sure we pay for projects we have online.
Mr. Goscicki stated exactly. A year ago the Board looked at the possibility of some short term financing to fund projects currently underway. This allows you through the resolution you already passed, to recoup expenses back to February you already incurred against the project.
Mr. Hanks stated such as the solids handling, which is an ongoing process.
Mr. Goscicki stated exactly.
Mr. Fennell stated so we will not have any short term financing.
Mr. Goscicki stated correct.
Mr. Mulshine stated your finance team; legal and bond counsel restructured all of your resolutions and obtained all consents and insurance. It was an incredible task to pull off. Ms. Ganz did a great job on the documentation.
Mr. Fennell stated we did a great thing today. We insured a community, CSID of 40,000 people and 11,000 units will remain viable. I am sure our engineers will make sure we meet our goals. This is the money you have to work with.
E. Form of Rate Study
This item was not discussed.
F. Other Documents
There not being any, the next item followed.
SIXTH ORDER OF BUSINESS Current Status and History of Open Work Authorizations
This item was not discussed.
SEVENTH ORDER OF BUSINESS Consideration of Non-Exclusive
Easement Agreement for
Mr. Hanks stated if we had a non-exclusive easement, my specific concern was FP&L, Bellsouth and Comcast will be allowed to access our property and should anything happen, we are responsible for the damage. If we vote on this item, I suggest we exempt the easement agreement as an exclusive easement, subject to receiving the corrected documentation.
Mr. Fennell asked who reviewed the documentation?
Ms. Early responded Mr. Andy Waypa. This is just a Bill of Sale. Like a commercial easement for water and sewer, Mr. Waypa does an inspection. He approves it and then it is turned over to the District for maintenance. I do not know if we want a non-exclusive easement as the lines go under the pavement but it is in the parking lot.
Hanks stated usually the City of
Mr. Lyles stated the Bill of Sale you are referring to is necessary because it is being installed in an already existing utility easement. In this one, they are creating the easement so you need both. You need some means of not only taking title to the water and sewer lines, which the Bill of Sale accomplishes but we also need a way to go in there and do necessary repairs and maintenance in the future and we cannot do this without an easement.
Mr. Fennell asked are there other facilities in there?
Ms. Early responded not to my knowledge.
Mr. Lyles stated from the sketch, it looks like there are not any lines but I do not know.
Ms. Early stated I do not know if FP&L has any lines running perpendicular.
Mr. Hanks stated perpendicular crossings are usually not an issue but you do not want anything within the easement itself.
Mr. Fennell asked how do we resolve this?
Mr. Lyles responded the way Mr. Hanks described, which is approving the request as an exclusive easement. If we can get this documentation worked out with the applicant, fine. If not, we will have to come back to you.
EIGHTH ORDER OF BUSINESS Staff Reports
i. Meeting Schedule for Fiscal Year 2008
Mr. Fennell stated I suggest we move the meeting time to rather than
Mr. Daly asked when do you want to start?
Mr. Fennell responded next month.
Mr. Lyles stated in order to start next month; you have to run a new newspaper advertisement. If you start in October, you will only have to run one advertisement for the next 12 months.
Mr. Fennell stated we will start it in October.
C. Engineer – Consideration of Updated General Engineering Services Contract
Mr. Goscicki stated we tried to find the original engineering agreement with CH2M-Hill, which probably goes back 30 years to when they did business as Gee & Jensen. Quite honestly, we cannot find it. We know there is an agreement and it has been executed but we do not have one in our records. Therefore, we asked CH2M-Hill to prepare an amended General Engineering Services Agreement replacing any existing agreement and serving as the umbrella for the work authorizations. The way the current engineering agreement is structured, we have a General Engineering Agreement and then the Board authorizes individual work authorizations on the framework of this agreement. I request the Board hold off taking any action on the General Engineering Agreement as District Counsel still needs to review it and we are still discussing some issues in terms of insurance levels for professional liability insurance. You have a copy of this agreement and we will bring it back to you at the next meeting to approve.
We also have two work authorizations, which we request the Board approve; Work Authorization No. 34.2 for the design on the Nanofiltration Water Treatment Plant, which is the key element of your bond program and Work Authorization No. 34.1 for the replacement of Plants A and B. I reviewed these work authorizations and recommend approval as they are consistent with the general provisions set up in the blanket work authorization for this project. We are anxious to get started on the design and spend some of the money we are getting ready to borrow.
Mr. Hanks asked are they not to exceed amounts?
Mr. Goscicki responded there is a 7% engineering fee based on a draw down schedule. This is a number the Board already reviewed and approved as part of the master work authorization and is a competitive rate. In looking at similar projects, you may be able to do somewhat better on some items and on others you may do worse. I am comfortable with 7% for these two projects. For Water Treatment Plants A and B, you may be able to negotiate less because of the design. For the Nanofiltration Plant, 7% is a good deal. Therefore, I am comfortable recommending those work authorizations to the Board.
Mr. Hanks asked does this include the construction observation?
Mr. Goscicki responded no, only the preliminary engineering and design services.
Mr. Hanks asked preliminary and final?
Mr. Goscicki responded yes.
Mr. Hanks asked does this include permitting?
Mr. Goscicki responded I do not recall.
Mr. DaSilva stated it does not include permitting.
Mr. Hanks asked what does the permitting involve and how much additional cost are we looking at?
Mr. DaSilva responded 5% of the engineering fees.
Mr. Hanks asked what will the construction observation cost?
Mr. DaSilva responded 15% of the engineering fees.
Mr. Fennell stated we should have an explanation of costs.
Mr. McKune stated in December of last year, we agreed to 7.5% at one Board meeting for each Water Treatment Plant for construction costs as appropriate. We are currently in the negotiation process to bring this down to 7% each, which is a good price. I believe the permitting will be incidental for the cost of the project. A good deal of the permitting effort is currently being done now as part of the Water Resource Permit.
TENTH ORDER OF BUSINESS Approval of July Financials and Check Registers
Mr. Fennell stated I saw an invoice for $1.4 million. What was this for?
Ms. Woodward responded for repairs and maintenance. I thought we discussed this. Under the repairs and maintenance category in your financial statements, there was $1.4 million in non-reimbursable hurricane expenses, engineering fees of $260,000, a contract with Stiles for $780,000 and a contract with Intrastate Construction for $406,000. This was not a budgeted expenditure but we reflected this on a separate line so you can track it.
Mr. Fennell stated this money came from two sources; funds we already accumulated and funds we received from NRCS.
Mr. Fennell stated this is the most productive meeting we ever had.
EIGHTH ORDER OF BUSINESS Staff Reports (Continued)
Ms. Zich asked how is our Bill doing
Mr. Goscicki responded it did not pass.
Ms. Zich asked why?
Mr. Fennell stated the Governor vetoed it. He passed the bill for NSID but vetoed ours.
Mr. Lyles stated correct.
Mr. Fennell stated the NSID Board is now being paid twice as much as we are, has other benefits and when they want to, they can convert to a one man/one vote method.
Mr. Lyles stated he did this in spite of recommendations and almost insistence on the part of staff.
Ms. Zich asked is that it?
Mr. Lyles responded for now.
Mr. Fennell stated there was so much talk about going to one person/one vote and when we finally try to do it, we fail. We are still under the land voting process to where if we ever want to do it, 5,000 people have to agree to change from this voting system.
Mr. Hanks stated we are lucky to get 5,000 people to agree in a citywide election.
Mr. Lyles stated it did not work.
Ms. Zich stated I did not know about this. I thought you said we had no problem getting the Bill signed.
Mr. Lyles stated it was approved by the full House and Senate; every government relations and policy committee and every staff member. We thought this was going to happen because the Governor signed the NSID bill.
NINTH ORDER OF BUSINESS Supervisor Requests and Audience Comments
Mr. Hulett stated I have not had a chance to visit with the Board since I came on the Sunshine Water Control District Board back in April. I thought I would come to your meeting and introduce myself to see “how the other half lives”. I wanted to let you know we made some changes. We have a new District Manager coming on board on October 1st. Of course, I cannot speak on behalf of Ms. Macomber and Mr. Sobers but on my behalf, we are looking forward to continuing the wonderful spirit and cooperation we have with CSID. I just wanted to come by and introduce myself.
Mr. Fennell stated thank you very much for coming. We look forward to working closely with you in the future for any services we can offer. With our District Counsel, we are looking at having a more formal arrangement with our sister districts and we should just go ahead and do so to be assured the services we are receiving, we will continue to receive. We will help out in any way we can.
Mr. Hanks stated at some point we
should have a joint meeting. We can also
sit down and discuss the overall regional issues not only affecting CSID and
Sunshine but the entire city of
Mr. Hulett stated I think this is a
great idea. We are here to support the
Mr. Hanks stated we can involve the city in those citywide issues.
Mr. Hulett stated exactly.
Mr. Hanks stated some issues cannot be resolved by just one district.
Mr. Hulett stated I personally want to do this.
Mr. Fennell stated there are some common issues the city always has trouble dealing with and I think we need to come up with some common issues such as drainage, trees, etc.
Mr. Hulett stated I will bring those comments back to my Board.
Mr. Fennell stated good to meet you.
EIGHTH ORDER OF BUSINESS Staff Reports (Continued)
A. Manager (Continued)
ii. Discussion of Cash Flow- Cash Transactions Analysis
Mr. Goscicki stated we have this analysis completed but have not had a chance to review it with staff. I rather not provide it to the Board because we have not proofed it. We worked out a five year cash flow.
Ms. Early stated I submitted a work authorization for the pump station improvements to Mr. Daly and Mr. Goscicki but I asked them to hold it due to the cash flow.
Mr. Goscicki stated we are tight in the General Fund until we get into the next fiscal year.
Ms. Early stated we completed the Feasibility Study on the proposed pipes. I will give you the report and we will discuss it at the next meeting, since there is a time constraint.
The last item is in regards to the dike. I brought Mr. DaSilva and Mr. Bohorquez with me to do a short presentation, which we can table until the next meeting. We did more studies on the Sunshine outfall canal. They have a presentation to show you the water levels under certain storm events.
Mr. Fennell stated the concern was
the outfall canal was 3’ lower on one side than the other. Unfortunately the lower side is on the
Mr. Hulett stated your discussion of the capital improvement program was helpful to me because we are preparing our engineering reports in regard to some very serious construction improvements in the Sunshine W.C.D.
A. Manager (Continued)
iii. Monthly Water & Sewer Charts
iv. Utility Billing Work Orders
v. Complaints Received/Resolved
There not being any questions or comments, the next item followed.
ELEVENTH ORDER OF BUSINESS Adjournment
There being no further business,
Glen Hanks Robert Fennell
AGENDA ITEMS FOR NEXT MEETING
1. Work Authorization for Pump Station Improvements
2. Feasibility Study on Pipes