A regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, November 13, 2008 at 3:05 p.m. at the District Office, 10300 NW 11th Manor, Coral Springs, Florida.


            Present and constituting a quorum were:


            Robert Fennell                                                President

            Sharon Zich                                                     Vice President

            Glenn Hanks                                                   Secretary


            Also present were:


            Kenneth Cassel                                               District Manager

            Dennis Lyles                                                   District Counsel

            Jane Early                                                        CH2M Hill

            Sean Skehan                                                    CH2M Hill

            Brenda Schurz                                                Severn Trent Services

            Dan Daly                                                         Director of Operations

            Jim Aversa                                                      Chief Operator, Wastewater Plant

            Doug Hyche                                                    Utilities Director

            Randy Frederick                                             Drainage Supervisor

            Kay Woodward                                              District Accountant

            Jan Zilmer                                                       Human Resources Manager


FIRST ORDER OF BUSINESS                             Roll Call

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


SECOND ORDER OF BUSINESS                        Approval of the Minutes of the October 20, 2008 Meeting

            Mr. Fennell stated each Board member received a copy of the minutes of the October 20, 2008 meeting and requested any corrections, additions or deletions.

            Mr. Fennell stated the only thing I have is a correction on page 27.  It is not $3.2 Million.  It is $3.2 Billion. 

            Mr. Hanks stated in the same paragraph, I am not sure what we mean by “the lining of trees.”  Do you have any idea?

            Mr. Fennell responded yes.  It is supposed to be lining of the pipes.

            Mr. Hanks stated I would like to change the order of two words on page two.  The sentence stating, “Mr. Hanks stated you will get a couple of gallons, test them side by side and see how it goes.”  It is a question, “will you “and not “you will”.


On MOTION by Mr. Hanks stated by Mr. Fennell with all in favor the minutes of the October 20, 2008 meeting were approved as amended.


THIRD ORDER OF BUSINESS                            Consideration of Resolution 2009-1, Amending the General Fund Budget for Fiscal Year 2007-2008

            Mr. Fennell asked is this last year’s budget?

            Mr. Daly responded yes.

            Mr. Cassel stated at the end of every budget year you do a balancing amendment.  You put in the line items and throughout the year you may have to do some adjustments from one line item to another line item.  It does not impact the bottom line of your budget, but it is a budget amendment to do the adjustments. 

            Ms. Woodward stated you will notice we chose seven or eight specific line items in the fiscal year 2008 budget.  We did not go line by line for every last little item.  We decided to go through and on the specific expenses where you were able to reduce through negotiations or watching our expenses throughout the year where we had literally saved real dollars in the budget, we decided to take those items, take the excess and show it as a reduction of those expense lines and transfer them into reserves.  One of the things over the past few years after the various hurricanes we had was the concern the District wanted to build up reserves for emergencies and for hurricanes. 

            Last year we had initially indicated we were going to fund an extra $301,000 into a designated reserve we wanted to have available.  This would have brought our balance on December of 2008 up to approximately $875,000.  In addition to this, the $426,000 we are moving out of the other line items will allow us to bring it up to $1.3 Million.  It will allow us to bring to you, within the next couple of months, the program plan for what we believe will be the overall way we need to address any emergencies as well as future expenditures.   


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor Resolution 2009-1, amending the general fund budget for fiscal year 2008, was adopted. 

            Mr. Hanks stated thank you for putting those into the reserve.  I feel much better knowing we recently completed a hurricane season and now have $1 Million in the bank for future issues.


FOURTH ORDER OF BUSINESS                        Staff Reports

            A.        Manager

                        i.          Annual and Monthly Water and Sewer Charts

            Mr. Cassel stated you will notice the water supply reports, water loss projections and water billed.

            Mr. Hanks stated Mr. Hyche, clue me in on the September hardness.

            Mr. Hyche stated go by the left column.  It is not the right numbers.  That was raw water which did not get put in.  Your hardness on that was basically 80 mg/l. 

            Mr. Hanks asked is the maximum permitted 100 mg/l?

            Mr. Hyche responded yes. 

            Mr. Hanks asked what is the raw water ph?  Do you know approximately?

            Mr. Hyche responded 7.2, 7.1, 6.9 mg/l.


                        ii.         Utility Billing Work Orders

            Mr. Hanks asked Mr. Daly, are you happy with the number of mis-reads we have been encountering?

            Mr. Daly responded I would like them to be zero.  We really have to look at the fact there are 9,500 bills out there.  It is not too bad of a job.  To be honest with you, one of the guys figured a place was empty for three months and it was going to be the same reading.  It turns out it was not the same reading.  We had that this week.  You know, they get a little sloppy and you take them to the side and talk to them.  For the most part, it is not that bad.

            Mr. Hanks stated I see they came down from where they were in 2006.

            Mr. Daly stated overall, it has not changed much when you look at the questions requiring re-reading; if you look all the way across the Board.

            Mr. Hanks stated in the last four years you have been staying between 40 and 60.

            Mr. Daly stated if you look over last year, August of 2007 went up.  What went in?  New rates. 

            Ms. Zich stated the new rates went in this year too.  Nobody questioned us this year.

            Mr. Daly stated maybe it is because everything else in the household went up too this past year. 


B.                 Attorney

            Mr. Lyles stated it has been a quiet month.  I have nothing new to report.


            C.        Engineer – Monthly Project Status Report and Charts

            Mr. Skehan stated as of yesterday the contractor informed us all the testing on the construction is scheduled to be completed December 1, 2008.  It will be substantially complete at this point.  This is the current construction project, which is ongoing right now.

            Mr. Hanks asked is it the wastewater plant?

            Mr. Skehan responded the wastewater plant.  This work is very close to being complete.  They are working on punch list items.  We are going to get a formal punch list as we get closer to the end.  We discussed all of this yesterday.  The contractor is being cooperative and helpful along the way.  This is Intrastate Construction Corporation.  The bidding of the water plant work is underway.

            Mr. Fennell asked are we out to bid?

            Mr. Skehan responded we are out to bid.  A prequalification list was completed.  We started out with a list of approximately 20 contractors who called and expressed interest.  There were contractors from all over the map.  The list got whittled down to ten who requested the package.  We finalized the list of qualified contractors to six of the ten who requested the packages.  One of the ten was a roadway contractor, a very large contractor, but from the Midwest.  He did not really know what it was.  They were not qualified so they had no RO projects.  Another local contractor was an asbestos mitigation firm that was interested in bidding the work.  We said their qualifications do not have anything related to water plant work and RO work.  This is the range in differences we saw in contractors through the whole process of whittling down the number of contractors; ultimately down from 20 to 6.  It worked out very well. 

            We have six contractors we feel are qualified.  All of them have worked in water plants before.  They have RO experience.  They are all local; from Southeast Florida for the most part.  We are proceeding with the bid.  The bid is scheduled to be received on December 9, 2008.  The Board meeting is December 15, 2008.  Our goal is to have a recommendation to the Board and to Mr. Cassel before that weekend.  There was a significant ground swell of requests to have the bid extended from four weeks, which was going to be placing it two days before Thanksgiving, and they needed an extra week or two.  We are giving them two extra weeks to be able to bid out the project,  make sure they have adequate time to compile all of the numbers they have and at the same time not have any reason to say they did not have enough time to bid. 

            We have the bid package put together for the new monitor well and the testing which will be required for it.  DEP has that package.  We are waiting for one final response from them.  This package will probably be out to bid the beginning of December.  I think you can anticipate for the December Board meeting that we will try to have a services during construction authorization for your consideration.  We will be able to keep moving with the project.  The goal on the construction plant work for both water and wastewater works is to have this underway by mid January to the first part of February for the notice to proceed. 

            Everything we have seen with other projects which have been bid, this is from our construction people, is there is a great interest in the market as the 20 contractors we saw.  The price of materials has come down.  The price of fuel has come down.  The price of labor just for contractors to maintain their workload to keep their people busy.  I think we are going to see good bids. 

            Mr. Fennell asked when did we do the bond issue?

            Mr. Skehan responded September a year ago.

            Mr. Fennell stated okay, so essentially we have had the money around for a year.  At that point we were looking at the price of cement and other things from a year and a half ago. 

            Mr. Skehan stated those prices have certainly adjusted.  PVC, any kind of piping, stainless steel, reinforcing rods, concrete block, copper for electrical components; all of those things wrap up into panels, wiring and motors.  It is a good time to be bidding a project. 

            Mr. Hanks stated that is all good with the bidding.  Where do we stand with the city? 

            Mr. Skehan responded we were advised today that they completed the review.  They are returning it to us on Monday.  They have a couple of questions on ADA issues, disabled access.  This is what we were told today.  It is fairly insignificant.  We already have the permit from DEP for the wastewater work.  We already have the permit from Broward County for the wastewater work and we also have the health department checked off for permits. 

            Mr. Hanks stated that should be fun.  You say that is it.  You brought something through with that ADA comment from the City of Coral Springs.  You are going to have fun.

            Ms. Zich stated I agree.  You cannot say things are going well until you have them in hand. 

            Mr. Skehan stated we will cross that bridge on Monday. 

            Mr. Hanks stated at the last meeting I requested you provide Mr. Cassel with a listing or schedule of what transpired as far as the other plant.

            Mr. Skehan stated we have not completed it as of yet.  Mr. Cassel and I spoke about it and we will definitely have it wrapped up for you.

            Mr. Hanks asked do we need to have a meeting with the Assistant City Manager so we are all on the same page as to what their expectations are as far as permitting?

            Mr. Skehan responded we will wait until Monday to see exactly how extensive these are.  They were, thus far, pretty cooperative.  They were forthcoming with what things were and how things were.  It has been about three weeks since they had the package so it is a fairly good turnaround.  It was an extensive package they had to look over. 

            Mr. Fennell asked we do not have to spend the money if we do not need to, do we?  Suppose the bids come in at $33 Million and we actually went out for $34 Million, we just have to build what we are supposed to build.  Is that right?  As far as the bonds go.

            Mr. Cassel responded that is correct.

            Mr. Daly stated by the way, to put a feather in Mr. Skehan’s hat, he came to the rescue of the city through me and a couple of other people last week.  They were screaming because they had something which had to be in.  Mr. Skehan was the one who had the answers for them.

            Mr. Skehan stated it related to some of the modeling work.  We were able to establish a relationship with Mr. Michaud over at public works.  He called.  I missed his initial call.  He called Mr. Daly and Mr. Daly got a hold of me.  Working with their other engineer, Mr. Eckler, he had questions for us that we wanted to work out.  They tied into both CSID and ultimately NSID.  There was information we had.

            Mr. Daly stated you came to the rescue for them.  They had a time constraint.

            Mr. Skehan stated it related to their water use permit and tied to per cavity use, the population expectations and their capacity demands.

            Mr. Hanks stated every couple of years The Board of Community Affairs, or someone at the state level, require cities to provide them with an evaluation and appraisal report, which is based on their comprehensive plan.  When they do these updates they have to contact the water service providers. 

            Mr. Skehan stated the questions were straight forward and we were able to answer them straight forward.  Our modeling work tied into this also, which is for CSID, the City of Coral Springs and NSID.  It is proceeding along fairly well.  We expect to have it wrapped up by the end of December, but not earlier.  We will have some clear idea of what the requirements will be from the South Florida Water Management District and how all three of the different utilities will have to either bow down to the South Florida Water Management District and/or what the requirements will be at the time. 

            Mr. Fennell stated we have not had that meeting yet.

            Mr. Skehan stated no we have not. 

            Mr. Fennell stated we keep holding that off.  Do we have to get this together?

            Mr. Skehan responded that is the best thing to do. 

            Mr. Hanks asked when you say “bow down” with regard to the South Florida Water Management District, what do you mean?

            Mr. Skehan responded wait to see, number one, what they will be looking for as a result from the modeling and base a response on it.  So often they have taken an awful lot of, “you have to do this, you have to do that,” and everything is with the Floridian Aquifer.  You cannot have anymore surficial aquifer.  There seems to have been, over the past month or so, some retreat from their advocacy of requiring utilities to go to the Floridian Aquifer.  There is a greater emphasis being placed on the credits, one-to-one credits potentially, with reuse which helps to elevate the viability of being able to reuse where in the past you may not have gotten the one-to-one reuse ratio.  If you get one gallon of water reuse, you will get one gallon of credit from the surficial aquifer.  That is very positive.  In the past it might be a half of a gallon or a quarter of a gallon.  There was really no clear form with what they were doing.  When they start talking about one-to-one ratio, it is much more beneficial for any utility out there which is looking for surficial aquifer and/or are required by DEP to implement some level of reuse. 

            Mr. Fennell asked how does the City of Coral Springs do this when they do not even process their own water?  What are they going to reuse?

            Mr. Skehan responded that is where the South Florida Water Management District has tried to promote some regularization in this particular area.  We will see how the well field withdrawals unify, looking at the holistic approach instead of separate; how it really looks with the South Florida Water Management District.  They will put something on a map over this region and see what the effects really are. 

            Mr. Fennell stated it sounds good.  Is there anything else?

            Mr. Skehan responded there will be some things coming to you in the next Board meeting.  We will have a bid, I believe, at that time which will be ready for you to take a look at. 

            Mr. Fennell asked do you have an actual model we can look at when we go through and talk about where we are going to spend our money?

            Mr. Skehan responded absolutely.  What do you want to see models on?

            Mr. Hyche responded individual components.

            Mr. Fennell stated make it simple for us. 

            Mr. Hanks stated we are not talking $35 Million to $40 Million for a model.

            Mr. Skehan stated the project, we are hoping, is more in the lines of $22 Million to $24 Million.  Just for clarification.  There is other project work going on which is taken from the total also.  The current construction work, which is part of the bond work, is approximately $7 Million. 

            Mr. Hanks asked have we reached an agreement with the city with regard to the berm and the sign off?

            Mr. Cassel responded there is no hold up on the sign off on any COs or anything with the current projects we are using.  The balance of what landscaping on the perimeter for the entire site will have to be accomplished with the next project.  There is no hold up on getting the COs.  What is our CO date for the chemical building?

            Mr. Skehan responded we have the knock box in and the wiring all done for it.  The inspection is next week so the CO will be by the end of the month. 

            Mr. Cassel stated good.

            Mr. Hanks stated the stormwater management permit you brought before us last month was turned over to Mr. Eckler.  Where does it stand?

            Mr. Cassel responded they requested additional information.  There was a breakdown in the flow of information back to Mr. Eckler.  We have it for him.  We should have a response by the end of next week. 

            Mr. Hanks asked did anyone pick up in the paper that FEMA is requesting a reimbursement from either Delray or Boynton Beach?

            Mr. Daly responded Delray Beach.  They are requesting $500,000.

            Mr. Hanks asked are we in good shape?  Do we have any concerns?

            Mr. Cassel responded I will have to look back and check.

            Mr. Hyche stated not that I am aware of.  I have not gotten any feedback or any emails.

            Mr. Hanks stated there was an audit performed based on the cubic yards coming into their processing center as opposed to cubic yards actually leaving the center.  The disposal was based on basically fluffed up cubic yards. 

            Mr. Skehan stated they are talking about going back to the contractor for reimbursement, but the likelihood of that is slim to none. 

            Mr. Hanks stated I see the Mobil on Atlantic Boulevard and Coral Springs Drive is back open for business.  Did they go ahead and put in the required exfiltration trench?

            Mr. Hyche responded I guess.  We never got the plans.

            Mr. Daly stated we got them today.  Ms. Phillips talked to the young lady today.  She told us to send out the information and they will get a check out to us for the permit.  They are open.  The city did nothing, but they will have it certified with us.

            Mr. Hanks stated so the city is not upholding their end of the bargain, which is they should not be allowed to reopen without a stormwater certification.

            Mr. Daly stated it is probably the first time they heard of it.  They would have had to check.

            Mr. Hanks stated this is one of the things I would like to put on a list of things to discuss with either the building official or assistant city manager. 

            Mr. Daly stated Mr. Frederick, Mr. Cassel and I were speaking about this.  Because it is a French Drain System, if we are going to ask that everyone certify and have it looked at, it will probably double the list we currently have that was put together by CH2M Hill because they do not actually empty into our canal system.  They empty into the ground, which eventually ends up there.

            Mr. Hanks stated exactly and it is important we address all systems.  We have the responsibility delegated by South Florida Water Management District to be a reviewing agency for all projects under 40 acres. 

            Ms. Early stated whether it discharges or not.

            Mr. Hanks stated we as a government body are responsible for ensuring, for example, the water quality is provided; that the adequate flood attenuation or onsite retention for your larger storms is met.  In individual projects, even if they do not discharge directly into a canal, if those systems are not maintained they will clog up.  The pollution remediation which is afforded by different mechanisms will sit there.  The end result will be localized flooding and water quality issues.

            Mr. Daly stated which eventually ends up in someone else’s drain.

            Mr. Hanks stated the other point, especially in a gas station, if you eliminate the catch basin so with the slightest bit of rain it fills up, it overflows it.  Where does it go?  Right into the city’s street system, which goes right into our canals.

            Mr. Daly asked so did we have any questions on this?  We were wondering if we had any legal grey areas on this.

            Mr. Cassel responded if we are the review agency, we need to work with the city to make sure we have this in their process.

            Mr. Daly stated we will go back and review all of the drainage areas which we did not submit a letter for.  Right now we have put out 90 letters and 46 responded with money, which means they are well along the way; actually with permits.  So they are in process and we are making some headway on it.  We will probably double what we are going to do and it is not a problem.

            Mr. Hanks stated and that will be one other item I would have a discussion about with the city, which is to find a way because we do not really have any hammer, shall we say, to enforce these regulations.  We will be looking to the city to help us enforce the water quality requirements, which affect everyone in the city. 

            On the investment side of things, I heard about Broward County tax certificates.  Is this something we can make an investment in or is it not on the approved list?

            Ms. Woodward responded I would not suggest it.  How it works is when March passes and a person has not paid their real estate tax bill for the year, it goes into delinquency.  They will put the tax certificate up for sale.  Broward County does not care who they collect those taxes from.  Typically, investors will come in and pay the certificates for a particular group of properties or a single property.  They pay whatever those taxes are.  The taxes related to us get remitted to us.  If the homeowner wishes to take care of it so they do not lose their property, they will pay back to the county the taxes which have already been paid by a third party with interest.  It is a way for investors to make a higher interest rate than they would normally make.  By the same token if you do not know what you are paying taxes on, you can have a property which has heavy pollution and needs to be cleaned up.  No one is going to pay it back and you are stuck out of pocket for money for a long time. 

            Mr. Lyles stated there are a lot of complications.  Complication number one is you may recall from time to time we have approved an investment plan and we use the most conservative state approved investment vehicles.  Even those have proven not to be as secure as we thought.  In order to make the kind of investment with the operating funds we are discussing, we would have to prepare and submit an amended plan to the State of Florida so they can approve and qualify it for this District to undertake.  The whole question of whether we are really allowed to be in that business under our special act powers would arise at this point.  While in the past, as Ms. Woodward says, this type of investment has been a way to make money when the homeowner comes in, corrects it and pays interest, currently it is more a matter of getting title to property you want to do something with.  That is outside the scope of our authority. 


FIFTH ORDER OF BUSINESS                             Approval of October Check Registers

            Ms. Woodward stated due to the fact this month was shorter because we are having our meeting earlier the financials were not ready by the time the agenda book went to press.  They will be with next month’s financials.

            Mr. Fennell stated I did see something from US Bank.

            Ms. Woodward stated I told them the Board needed information in order to have an in depth discussion of plans they want to make financially.  Those are the questions I sent to him and those are his responses.  He is addressing how the bond funds have been invested.  It has nothing to do with our operating cash sitting in Wachovia or any of our money market funds we have set up over the past year.  This is strictly how the bond funds were taken care of.  At the last meeting Mr. Fennell asked for a general idea as to what the investment involves and how it typically works.  This letter is a response to that. 

            Mr. Fennell asked so our $40 Million is at US Bank, is this correct?

            Ms. Woodward responded yes.

            Ms. Zich stated that part is in good shape.  It is Wachovia and the money market we are concerned about. 

            Mr. Hanks asked what is this on the First American Funds?

            Ms. Woodward responded this happens to be the investment US Bank uses for your bond fund.  According to what Mr. Schuhle says in the letter, it is my understanding that it is initially scheduled to end at the end of December.

            Mr. Hanks stated there was a school in Wisconsin or Minnesota which was really messed up with unusual investments.  Are you concerned that, with the way these are invested, in six months or a year from now the funds will not be available?

            Ms. Woodward responded my caveat is that I am not 100% familiar with exactly how the fund works.  I am comfortable it is tied to the US Treasury Temporary Guarantee Program and that we are basically with one of the strongest banks.  My area of expertise is not on the investment side.  I will have to read up and catch up to understand how it works.  My real concern is on the operation side where we have funds in money market accounts with Wachovia.  Because of the way the market is right now, of course with what is happening with various financial institutions, the concern has been as you recall from the last meeting where Severn Trent included a letter on the overview of how Qualified Public Depositories work, one of our concerns is if Wachovia or, if we were with another bank, another bank fails and we have CDs locked up with them, how long before we can unlock the fund and have it available for operations.  A good idea for us to address this concern is to sit down with pencil and paper and say, these are the monies we are going to need over a 45 day period and a 90 day period and we need to know that we can get our hands on it and protect it while other things are being processed.

            Mr. Hanks asked would this be accomplished by spreading our accounts between different institutions? 

            Ms. Woodward responded you can, but one of the odd things about the new FDIC insurance is they bumped up the limitations and they go back to the old limitations a year from now.  I would like to make the assumption we will stay with the lower limit and get it lined up in about five or six banks so I know I can operate for two months.  You can probably select a handful of banks where you are comfortable that if you put it in an FDIC insured vehicle, you are covered.  The issue is not that it is safe.  The issue is it is safe, but when will I have access to it.  The fact I can protect $4 Million is great, but if I need $1 Million of it over the next three months and I cannot touch any of it without filling out paperwork and waiting four months to get it, it becomes an issue.  I think we need to get a game plan on this and we really need to put it in force.  The truth is you are not going to select the perfect plan.  The point is you need to plan and get started on it.  We will fine tune it as we go. 

            Mr. Fennell stated we probably need two cash flow analyses.  One for the project; what will be the projected funds we will need to disburse according to the construction schedule?  Then we need to have cash flow for our operating side, which is what we are talking about now. 

            Mr. Hanks stated keep in mind we will still be acquiring revenues in through our rates.  That is still coming in periodically.  The other issue I see, where we have a big in source at one point and time being November, December and January, is our general fund. 

            Mr. Fennell stated but the outflow is different.  Generally what we are looking for here is more like a conservative projection for operating.  Even though we are in the utility business, our in flows go up and down based on nothing more than watering of lawns.  During a recession we can end up with many people not paying.  We had so much money already in there and we already know what the project expenses are.  How much money do we have?  Home much will we need in the next 30 days, 60 days or 90 days?  Maybe we can buy a T-Bill for a year or two years. 

            Ms. Woodward stated the projects are already covered by the bonds.  You have approximately $33 Million which is already on deposit in the construction account with US Bank.  That is basically what is going to be paying for the new plant we will be starting shortly.

            Ms. Zich stated we are not concerned about that one.

            Ms. Woodward stated no.

            Mr. Fennell stated but we still need a cash flow analysis for it. 

            Ms. Zich stated but that bank we are good with.  It is the operation side we are wondering if we should diversify and where to move the money.  Mr. Cassel, do you have any suggestions?  Do you have people working on this at Severn Trent?

            Mr. Cassel responded we are looking at this in a number of districts; which banks do you believe are the safest?  That is, in some respects, anybody’s guess.  Typically, you give a selection of three to five banks that appear to be the most solid and then let the District choose which ones are their choices. 

            Ms. Woodward stated the issue now is not how much interest you will earn or not earn.  The question is whether the principal will be there. 

            Ms. Zich asked speaking of that, did we get any place with SBA over the past month?

            Ms. Woodward responded we got $2,600. 

            Ms. Zich stated talking about putting money some place and not being able to get to it.  Look at this.  We are under $200,000, right?

            Ms. Woodward responded yes.  I think we are at approximately $150,000.

            Ms. Zich stated this is like pulling teeth and this is the state we were sure about where we were putting our money.  This is why it is so scary.

            Mr. Hanks stated I think we should split the operating fund between three different banks and roll with the dice.  For the amount of money we are considering, government guarantees are not going to be there.  Who knows which one is going to go where and who knows which bank is going to merge with which bank. 

            Ms. Zich asked how do we know what banks are the good banks to be putting it in?  I heard an awful lot of stuff about Wachovia’s bad mortgages. 

            Mr. Daly responded you are going to hear things about everybody else. 

            Mr. Fennell stated what you do with the money you can put out there is you go out and buy T-Bills.  At that point you are just believing in the United States.  After that, the only thing you can do is buy gold. 

            Mr. Daly stated if we are trying to attack our cash flow for a three month period of time, we are using about $880,000 a month.  My understanding is FDIC is guaranteeing up to $250,000.  If we open three accounts in three different banks, we will be triple covered.  We still have $750,000 to $800,000 coming in our water and sewer operating fund.  We can pretty much leave it alone and see what happened out there. 

            Mr. Fennell stated we really do not project using any of the money we have set aside with the upcoming funds.  We can do a cycle analysis.  We project our income.  I believe $5 Million to $6 Million is the amount from one account to the other.

            Ms. Woodward stated yes.  We have $4.2 Million in water and sewer and the balance is in the general fund.  The balance in the general fund represents what we were just talking about.  We want to make sure we protect it because we worked hard to get it there. 

            Mr. Hanks stated if you take a look at the reserve fund, it can take many different forms.  If we spread it among different institutions and recognize there is a risk out there, we are being prudent and reducing the risk.  We cannot eliminate it. 

            Mr. Fennell stated if we were really going to be super concerned, I do not think anyone can pick the right banks.  The right thing to do is figure out how much cash you really need to have flow.  We will put that amount into these accounts.  After that we will buy three months, six months or one year of T-Bills.  There is no good reason why we should not do that.  I cannot think of anything safer.  I guess we could buy yearly T-Bills.

            Ms. Zich asked how are the delinquencies?  How bad are the delinquencies?  If someone owes us $200 in back water bills, do we ever collect that $200?

            Mr. Daly responded we usually collect it.  I say this with pride.  We are pretty ruthless because Mr. Smith and Mr. Jones are paying their bills regularly and never default.  We are doing it for them. 

            Ms. Zich asked how bad are the delinquencies right now?

            Mr. Daly responded we put out 900 door hangers between two districts because we mesh our employees.  Last Wednesday we turned off 185 people between the two districts. 

            Mr. Hanks asked in one day?

            Mr. Daly responded in one day for the month.  This is double what the norm was a year ago.  Our highest shutoff days usually had 40 in CSID and 45 in NSID.  There are probably 60% more renters in this mix than there used to be.  It is tough out there.  We probably spend 30% to 40% more of our time on a weekly basis looking after the delinquencies.  It has become a full-time job and we are still doing it with the same staff.  It is a matter of priority number one. 

            Ms. Zich stated I just wanted to see if we lost the money.

            Mr. Daly stated no.  Mr. Lyles, Mr. Cassel and I had a conversation recently about this.  There is a trigger mechanism of sorts that says when a place is sold they have to contact the District to see what is owed.  We go after the title company or we ask the new owner to do so.  They have title insurance.  This should have been taken care of.  When it is a rental situation and the renter leaves, we say it is part of the property and you are using the property as a business.  They still owe us the money before we turn it back on. 

            Ms. Zich stated okay.  I wanted to make sure you have that.  With this many people it is a lot of money.

            Mr. Daly stated the whole idea we were able to go with credit card payments is a lifesaver.  The fact we are close to the public has been a life saver too because we would probably need three extra employees just to talk to the line of people at the counter.  Everything is done over the phone or the internet.  It is really easy and the good part is if they owe a $200 bill, they can call “Uncle Bob” in New York with a different last name and we will still take their payment on our website because they will notify us in two days if it is fraudulent.  We take pride in the fact we painstakingly pay attention to every account out there. 

            I recently received a listing of the house foreclosures in our District as well as NSID.  We are going line by line to see how many of them are rented.  If it is in foreclosure, the renter is going to eventually leave because he is paying the rent to the owner who is just pocketing the money.  It has seriously become a full-time job, but we do it with a smile on our face.  We just put out another 40 of them for CSID yesterday and another 60 for NSID, this is just for renters who are behind, for shutoff next Wednesday.  We expect to put out another 800 to 900 door hangers.  We do this the last week of every month and we shut off the first Wednesday of every month. 

            With our economy the way it is going it is not going to get any better.  Mr. Cassel and I were speaking this afternoon about arrangements with some old property owners, not renters, if they need to have it.  It is the holiday season and these are supposedly long time customers.  The fact is they cannot really go anywhere else.  You have to look at it one by one.  Unfortunately, it could become you get the nod and you do not.  We do not like to enter into this, but there are circumstances sometimes when we have to look at it that way. 

            Mr. Fennell stated I think the input from us is we would like to see a cash flow analysis next month.  The general idea is to look at the cash flow for funds, how we can diversify the money we need within the next six months among various banks and after that we should look at what we need to do to buy T-Bills.  We are perfectly authorized to buy them.  We will not make much on them because everybody is buying them.  Other than that, the answer we got back from the bank is basically to trust them.  With regards to bankruptcy it is beyond my scope and I would defer to counsel. 

            Mr. Lyles stated Mr. Schuhle is the National Head of the Public Finance and Trust Operation for US Bank.  I think you should take it with a grain of salt.  You have probably the most knowledgeable guy they have on this subject, but he is also not going to allow himself to get pinned down anymore than he has to.  He is in a very responsible position.  He devotes his time and effort to public finance issues like our bonds. 

            Ms. Zich stated the SBA has taught me a lot.

            Mr. Fennell stated the guy who is the head of that is going to be running for president.  He and two others were actually in charge of the Board.  I cannot believe they have not looked at the state retirement.  The same people run the same thing.

            Ms. Zich stated everyone assumed because it was the state it was going to be there. 

            Mr. Fennell stated it was not professionally run. 

            Ms. Zich stated I am going to say one more word about finance.  I am going to congratulate Ms. Woodward.  Did you know the field audits for this year that just ended September 30, 2008 are done?  Do you know how incredible that is?  When I first came on the Board it was in June and you gave me the audit for the September before in August.  I was horrified.  Ms. Woodward has the field audits done already.  This means our auditors have already been in here and are out preparing our final audit.  It is incredible and she deserves a lot of praise for it.

            Mr. Fennell stated Ms. Woodward, thank you very much and thank you for recognizing that. 

            Mr. Daly stated thank you for taking that off my kudos list. 

            Mr. Fennell stated item five is the approval of the check registers.


On MOTION by Ms. Zich seconded by Mr. Hanks with all in favor the October check registers were approved.


SIXTH ORDER OF BUSINESS                             Administration of Bond Funds

            This item was discussed under the fifth order of business.


SEVENTH ORDER OF BUSINESS                      Supervisors’ Requests and Audience Comments

            Mr. Daly stated I have Mr. Lyles and Mr. Cassel looking at a contract for CSID to provide billing services for another district on the west coast. 

            Mr. Fennell stated that is great.  We need to encourage that.  We are going to be in a strong position going forward to take on more services and we should.  We have infrastructure to do it and to make our cost more viable we need to be taking on more things.  I am going to encourage you all to actively go out and spread our services.  

            Mr. Hanks asked Mr. Frederick, did you have any progress with the culvert on Riverside?

            Mr. Frederick responded we are going to bid for that.  We are doing some work on the trash racks.  We will also include having those two pipes inspected on that contract.  We are having a pre-bid meeting on November 19, 2008 and then the bid opening will be December 3, 2008. 

            Mr. Hanks asked where do we stand with the gentleman who was here a couple of months ago with the trees?

            Mr. Frederick responded they are still there.

            Ms. Zich stated we gave him 90 days. 

            Mr. Frederick stated he has one more month.  We are watching him.

            Mr. Fennell asked any more comments?

            Mr. Daly responded the newsletter was supposed to have been presented to you today.  Unfortunately, there was an illness and death in the family of someone who was helping with it.  I expect that you should have something emailed to you next week, or at least, maybe, put at your door.  It will most likely be a final version.  If there is anything major on it, you can give me a quick holler or send me an email.  We want to present it to the printer no later than Thursday of next week for mailing around December 1, 2008. 


EIGHTH ORDER OF BUSINESS                         Adjournment

            There being no further business,


On MOTION by Mr. Fennell seconded by Ms. Zich with all in favor the meeting was adjourned.








  Glen Hanks                                                                  Robert D. Fennell                              

  Secretary                                                                       President