A regular meeting of the Board of Supervisors of the Coral Springs Improvement District was held on Monday, July 26, 2010 at 3:10 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                                             District Engineer

            Dan Daly                                              Director of Operations

            Randy Frederick                                    Drainage Supervisor

            Kay Woodward                                     District Accountant                  

            Jan Zilmer                                             Human Resources                    

            Cory Johnson                                        CH2M Hill


FIRST ORDER OF BUSINESS                     Roll Call

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


THIRD ORDER OF BUSINESS                   Approval of the Minutes of the June 21, 2010 Meeting

            Mr. Fennell stated each Board member received a copy of the minutes of the June 21, 2010 meeting and requested any corrections, additions or deletions.

            Mr. Hanks stated on the bottom of page seven it states, “It eats up hydraulic capacity, but there is no significant amount of EOD.”  Where you referring to BOD?

            Mr. Johnson responded yes.

            Mr. Hanks stated this may be something we should do under Supervisors’ Requests.  Last month when we voted to authorize Mr. Cassel to enter into negotiations with the debris removal companies, I would like to clarify we were working with companies and they have the capacity to deal with removals from inside the canals.  A lot of our work last time was from the water.

            Mr. Cassel stated we are going to be looking at a change in that.  We just had a meeting with FEMA on Friday.  They were originally telling us we could not piggyback, but to clarify that; they frown upon piggybacking on the actual contract, but we can piggyback off of a bid.  We threw  our bid together quickly and briefly discussed it with Mr. Lyles.  We may be better served at utilizing the bid that was done by Pompano Beach who also has canals.

            Mr. Lyles stated all of which is not a part of the minutes because it has happened since the last meeting time.  There is going to be  substantial discussion on this during the course of the regular meeting.

            Mr. Hanks stated on page 23, two-thirds down the page where we are discussing Treatment Plant F, references to ‘wells’ should be ‘welds’.


On MOTION by Mr. Hanks seconded by Mr. Fennell with all in favor the minutes of the June 21, 2010 meeting were approved as amended. 


THIRD ORDER OF BUSINESS                  Supervisors’ Requests and Audience Comments

·         Mr. Jose Rivero – 382 NW 112 Avenue

            Mr. Fennell asked is Mr. Rivero here?

            Mr. Daly responded he could not make this meeting.

            Ms. Zich asked did we talk to Mr. Rivero?

            Mr. Daly responded I did.  He is a gentleman who has the canal issue.

            Ms. Zich stated I know, but we never cleared it.

            Mr. Daly stated we addressed it in two different letters; one from Mr. Cassel and one from me.  We also had a discussion, but he still wants to address the Board. 

            Mr. Hanks stated I have a question as it relates to this topic as well as the numerical quality standards being thrown around out there.  Does the approach we take with regards to docks on our canals have any impact on how we are classified and what numerical standards we are potentially required to meet?

            Mr. Cassel responded from what I have read so far I do not believe it does.  We have taken the position that originally they were never constructed as fishable or swimmable canals.  They were for drainage, stormwater handling, storage and dissipation only.  I believe it helps us in a way because we are continuing to enforce what we originally were and that they are not fishable or swimmable waters.  They are for stormwater drainage and stormwater management functions only.

            Mr. Hanks stated so if the Board was to take a different tactic as to docks within our right-of-ways, it could potentially harm our case.

            Mr. Cassel stated I suspect it would open the door for the regulators to say you are encouraging swimmable and fishable water; recreational versus drainage. 

            Mr. Hanks stated which could trigger a lot more in terms of regulatory compliance issues.

            Mr. Cassel stated that is correct.

            Ms. Zich asked have we asked Mr. Rivero to take it down?

            Mr. Daly responded yes.

            Mr. Cassel stated in both letters.


FOURTH ORDER OF BUSINESS              Distribution of the Proposed Water and Sewer Budget and Consideration of Resolution 2010-9 Approving the Budget and Setting the Public Hearing

            Mr. Lyles stated you have to first take action approving the proposed budget, previously distributed by the manager, and in that resolution also set the public hearing for a date and time certain, which will be published in the newspaper,  twice in advance of the public hearing.

            Mr. Fennell stated one of the things I noticed is we are bringing forward $2 Million in order to bolster up the budget.  We are running a budget, paying out money and are not actually being covered by the funds coming in.  I think we need to look at an increase in revenues. 

            Mr. Daly stated Mr. Cassel and I thought about this also when we were doing the budget.  We were not going to put any revenue figures in unless the Board had a chance to see what they thought about it and at what level the increase might, or might not, take place. 

            Mr. Fennell stated when we originally went out for bonds three years ago there was a note about what the original ideas were for increases we needed to do in order to support the bonds and go forward. 

            Ms. Woodward stated if you look at section five you will see the paperwork.

            Mr. Fennell stated part of the issue is the original projection thought we would have revenues this year of $12 Million; however, we have $10 Million.  That is a $2 Million difference right there.

            Mr. Daly stated the assumption formulated when this study was done was based on the current figures they had and they just extrapolated forward, but whoever thought we would have the situation with the  economy that  we have.  The difference is not necessarily in rates, but in consumption.  We looked back at a lot of the consumption over the last few years and every year it increased 12% over the previous year; even though we had 12%, 14% and 15% increases in our rates.  You can drive up and down University Drive to see the proof of it.  There are businesses which are closing and staying closed.  There gas stations with car washes that are now owned by the  banks.  There are a lot of foreclosed homes, which are not using any water. 

            Mr. Hanks stated there is a restaurant, which is now a church. 

            Mr. Cassel stated several restaurants which longer exist. 

            Mr. Daly stated they are only averaging 6,000 gallons per bill. 

            Mr. Cassel stated in addition to this; three years ago you did not have the mandatory year-round water restrictions, which have also cut into your volumes.  All of it impacts your sales. 

            Mr. Daly stated the whole idea that the engineering report called for a rate increase of 3% for the next few years is as valid as the revenue I projected for the next five years.  I think the rate increase needs to be looked at because 3% will only get us about 1.5% if we look at what happened with our 15% increase, which actually turned out to be 12%.

            Mr. Fennell stated obviously we need to balance this thing. 

            This brief portion of the minutes could not be transcribed due to failure of the recording equipment.

            Mr. Cassel stated the recording is back on.

            Mr. Fennell stated I was talking about my thoughts on the budget and what we should do.  I think we need to get our revenues up to a point where we have a long term run where revenues meet expenses, which to me looks to be another $1 Million.  We are still going to be short $4 Million over the next four years, which we could pay out of the funds.  I think at a minimum we have to do that.  It will probably require somewhere between a 5% to 7% increase in water and sewer.  This budget needs to be increased revenue wise.

            Ms. Zich asked Ms. Woodward, what do you propose for the percent increase?

            Ms. Woodward responded if you look at what we are projecting for fiscal year 2011 for your water and sewer revenue, you are looking at roughly $10 Million.  So the question is whether you want to come up with $500,000 or a full $1 Million.  That is between 5% and 10%.  That is assuming you will reap the benefit of 100% of that increase because there will be someone out there who will cut back on consumption. 

            Ms. Zich asked are we looking at doing this over a couple year period or do we just want to do one increase because of the fact we just had three years of increases a couple of years ago?  I think we should just do one increase.

            Mr. Fennell responded I do not know.

            Ms. Zich stated I look forward to the future when we have no more construction.

            Mr. Fennell stated there is a high uncertainty here.  We really do need these funds in case of an emergency.  We may eventually get repaid for money, but it is kind of like going through a hurricane.  If you have money in hand, you can get things done. 

            Mr. Daly stated if a lift station goes during a hurricane, it is big dollars out of pocket. 

            Ms. Zich asked did you see the dam that just broke in Iowa?

            Mr. Daly responded yes.

            Ms. Zich stated they were not expecting it.

            Mr. Fennell stated to actually balance the budget you need a 20% increase. 

            Ms. Zich stated that is too hefty. 

            Mr. Hanks asked Mr. Daly, what has the change been, volume wise, in terms of the water billed over the last two years?

            Mr. Daly responded I would have to look at those figures.  I have not looked at that recently so I could not answer that.

            Mr. Hanks stated I am trying to determine whether we have seen more of a drop in consumption due to the economic downturn or due to the rate increases.  There are three things going on here.  We have mandatory water restrictions, the economic downturn and we have a rate increase. 

            Mr. Daly responded I was looking into things today and it turns out 6,060 gallons was the average bill each month last year.  We originally said in our engineering report the average person has a 7,000 gallon bill.  I was just looking at residential.  That is down from three years ago where it was closer to 6,800 gallons per bill. 

            Mr. Fennell stated there is a general movement around us to conserve water such as advertisements on television and low threshold toilets.  It looks to me like we need a 20% increase, but I agree that is a little too much to swallow at one time, given that we have money in the reserves.  What do you think about 7.5% to 10%?  If we do 10%, that is half.  We are still $1 Million short.

            Mr. Daly responded you can do 10%, 5% and 5%.

            Ms. Zich stated let us do 10% and see where we stand next year.  Can we do that?

            Mr. Hanks asked where do we stand in terms of our projections with addressing the debt service we have?  Do we need to look at structured increases for a long time?  What was in the bond report?  What were the recommendations there?

            Mr. Fennell responded go to exhibit A.

            Ms. Woodward stated the original recommendations were 3%, 3% and 3% if we did not go out for the second bond issue.

            Mr. Fennell stated and that was if we were $2 Million more in income.

            Ms. Woodward stated that is correct.

            Mr. Daly stated we did not make it last year either.  We are $1 Million and change short this year.  Next year’s budget we will be $2 Million and change short.  We are already $3 Million behind the mark.

            Mr. Fennell stated this shows you the principal amount and interest amounts as well as the total debt service for the year.  That is the debt service for the 2002 Series.  There is also the interest we have to pay for the 2007 Series Bonds. 

            Mr. Hanks asked should we really be looking at exhibit E?  That brings us to a longer term.  If you look here in 2015, that balloons another $1 Million.

            Mr. Fennell responded no.  In 2014 we pay off the 2002 Bonds.  You can see what the principal amount is.  That was intentionally structured that way so we would have that.  There is $2 Million a year from the old bonds, Series 2002, and $ 2 Million a year, essentially, from the new debt service.  That is how we get the $4 Million.  When we finally get out to 2015, we drop back to $3 Million. 

            Mr. Hanks stated okay.  So these are different scenarios.

            Mr. Cassel stated yes.

            Mr. Fennell stated we have to pay off the 2002 Series.  It is structured pretty heavy; $4 Million a year is a high load on a company that is $10 Million.  You can see who the real owners are.  The real owners are the bondholders. 

            Mr. Cassel stated you will also remember we had the prior series, which was the 1992 Series which was laddered in until we paid it off.  We managed to pay it off early, but we would have been carrying a higher debt service for the last three years or so had we not paid those off early.  You would have been very close to your same total debt for your bond service payments, but by knocking that off early it allowed us to put the extra funds aside.

            Mr. Fennell stated to be fair; Ms. Woodward as well as others have  been warning us for a long time that we had this looming bond issue coming up.  We are basically going to be paying out 40%.  We have the luxury of not having to go to a 20% increase and balance this because we have some money in the bank.  We need to be prudent and get this thing under control as soon as possible to get money flowing to cover this.

            Mr. Cassel stated one of the things we need to consider is if you go for an increase this year and then come back for an increase next year in a public hearing scenario, it is a harder sell rather than setting it up once with increases for the next three years.  You will either do one this year or you set it up where you do three smaller ones over the next three to four years.

            Mr. Hanks stated strategically speaking; if we go ahead and hold a public hearing for a series of rate increases for the next four years, just for an example, and let us say we implement the first one and then the economy kicks back up where we do not need to implement the second one.  Are we obligated to implement the second increase?  What are the ramifications?  Do we have any flexibility at that point?

            Mr. Lyles responded there is a legal component to this having to do with the bonds that we issued back in the 2005 time period when we had the public hearings and embarked upon this plan.  Part of our obligation to the bondholders and part of our offering documents included the layered scheduled increases which create the flow of funds allowing them to assess whether or not to buy the bonds.  That had a positive effect.  It reduced the interest we would have otherwise paid.  We have fulfilled our obligation there.  What we have an obligation to do now is to keep it sound.  If we find out in the second or third year that the rate increase is not necessary, we can always refrain from it.  We do not have to do it once we have a public hearing because we are not obligated to the bondholders or anyone else to do that. 

            Mr. Hanks stated we have exceeded our obligations at that point to the bondholders.  We have met those obligations.  This year is just for sound mind.

            Mr. Lyles stated no.  This year we are looking at the scenario where we are obligated to keep the system financially sound.  We are hearing from administration there needs to be a rate increase, but it is not quantified.  There is something which needs to be done, but it is not a quantified element of our budget process.  You just do what the Board determines to be a sound thing.  There is still something of an obligation, but it no longer is to raise the rates to the percentage numbers we put into all of our public hearings way back when.

            Mr. Hanks stated so it refers back to the Board’s prerogative based on the advice of all of our advisors.

            Mr. Lyles stated yes sir.

            Mr. Fennell stated we are going to put this out in a public notice.  If there is a rate increase, there has to be a public notice.

            Mr. Lyles stated the fixing of rates for the water and sewer system is done pursuant to part of your special act.  It requires two published notices of a public hearing and they have to start at least two weeks ahead of the hearing. 

            Mr. Fennell stated and as I vaguely remember if we say we are going to do 15% and then decided to do 10%, we can do that, but if we published 10%, we could not do 15% without another notice.  Is that correct?

            Mr. Lyles responded there is a municipal requirement that goes like that, which has to do with the TRIM notice that goes out by mail.  You do not have the same limitation on your ability to adjust the budget at a final public hearing once all of  the information is in front of you. 

            Mr. Fennell stated for some reason I thought we could go less at the public hearing, but not more.

            Mr. Lyles stated I think you and predecessor Board members as well as administration have always taken the position that you only want to go down and not up from what is put out in the notice. 

            Mr. Fennell stated this might have been for the taxes as opposed to the rates. 

            Mr. Hanks asked what is the timing for adoption of our budget and where do we have to be with regards to the rate hearings relative to the budget?  How does this all work out?

            Mr. Cassel responded you need to have the budget adopted by the September meeting because it goes into effect October 1, 2010.  Having the rate increase and the budget adopted at the same time would be the ideal because then you could enact your rate increase October 1, 2010 as well as your new budget. 

            Mr. Fennell stated I am thinking of a 10% increase.

            Ms. Zich asked should we do it over more than one year?

            Mr. Fennell responded no, 10% now. 

            Mr. Hanks stated I think we still have some unanswered questions out there.  We still have not nailed down this infiltration issue.  Is it something we want to spend the money on?  Does it make sense from an environmental standpoint, a health standpoint and an economical standpoint?  Does it make sense for us to tackle any improvements or any changes to the existing gravity sewer system?  Is it something we want to consider having money in there for?

            Mr. Fennell responded what I am proposing will only be $4 Million.  You have a good point because if the water usage rates are dropping and our sewer rates will be dropping, we now have a problem of paying for the sewage.  You are right.  We might be better off paying money in infiltration, which would be a one time shot. 

            Mr. Hanks stated I think we should consider having it out there for rate increases over the course of three years and tackle it in one public hearing.  I am open to staff’s recommendation of 10% for fiscal year 2011 and then based on staff’s recommendation do we do 10% in fiscal year 2012 or 5% in 2012? 

            Mr. Daly responded if you did 10%, it would give you $1 Million which is our increase in debt service for the next four years.  So for each of the next four years we have the original 10% to make up for the $1 Million shortfall.  We have had no problem with the $3 Million we have had all along.  We have four years worth of additional $1 Million that would bring that in.  The second year of an increase would be; let us say another $1 Million or 10% and that would be ear marked toward this other project. 

            Mr. Hanks stated there may also be potential energy increases.  We just do not know where things are going on that end.  Granted, our budget was for $700,000 in electrical costs where this last year it was about $500,000. 

            Mr. Daly stated we received a big credit.

            Mr. Hanks stated we have some extra space in that portion of the budget. 

            Ms. Zich asked what are Ms. Woodward’s thoughts?

            Ms. Woodward responded I am confused about this 10% increase that everyone is talking about covering our debt service for the next four years.

            Mr. Daly stated the additional 10% would bring us $1 Million a year.

            Mr. Fennell stated it covers half of it.  There is still half that is not covered. 

            Ms. Woodward stated we have covered it.  We have the money in the bank.

            Mr. Fennell stated the normal way I like to run a firm is income equals outcome.

            Ms. Woodward stated that is true, but what I am saying is if you look at your current budget, what we are having to carry forward from prior periods to cover the fiscal year 2011 budget is $2.1 Million.  $1 Million of what we are carrying forward has already been set aside in real dollars to pay for that increase debt service coverage for next year.  What we are really trying to cover now is the remaining $1.1 Million, which includes the fact there may be other revenues we may not be able to count on to the same degree, the fact that we may have additional operational expenses for the nanoplant which we do not have tied down and we have certain filtered items that need to be provided which can run between $400,000 and $500,000 a year.  I just want to make sure we understand the debt service is covered, but once that money is spent we do not have a way of building up our funds for other projects. 

            Mr. Hanks stated that is exactly what our concern is.

            Mr. Fennell stated I do not see us going out for another bond for at least 10 years so the money we have, is all we have.  So what do you think? 

            Ms. Zich asked do you really think we are that close to needing to do other projects that we should allocate for those too?  I am thinking 10%.

            Ms. Woodward stated that covers operations assuming nothing goes wrong and everything is just normal maintenance.  The instant you have another project you feel needs to be addressed, short of going out for new bonds, you would not have a way of accumulating the funds to take care of it.  You really need to take care of more than just operational items that you are looking at just for next year.  I actually wrote down 10%, 5% and 5%.

            Ms. Zich stated I think 10% to cover what we have going on now and I see no problem with the 5% and 5% for the future. 

            Mr. Fennell stated you and I live in a 30 year old housing area.  There are some who live in a 35 year area.  If we really have to go start tearing up those streets and doing things, it is going to be expensive.  We will try to do everything we can, but the I&I is getting to a point where frankly, it is embarrassing.  It is a pretty high number. 

            Mr. Hanks stated the other side I do not like the looks of is our line losses in terms of what we are putting out in the plant and what is actually getting built. 

            Mr. Fennell asked so what do you think?

            Ms. Zich responded I am happy with 10% right away and we do have to save money for future problems.  If Ms. Woodward is saying 10% is just going to make us even, then 10%, 5% and 5% sounds good to me. 

            Mr. Cassel stated we will adjust the budget based on 10% immediately.

            Mr. Hanks asked do we need a motion to set a hearing?

            Mr. Lyles responded the resolution we started with is in your agenda package. 

            Mr. Fennell stated I think we need to amend the proposed budget first.

            Mr. Lyles stated the proposed budget is the one submitted by the manager.  He is indicating to you that he is amending his proposed budget to conform to the 10%, 5%, 5% phase increase.  At that point a motion to approve the proposed budget as revised by the manager will come first.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor the proposed budget was approved as amended by the manager to include the 10% increase.


            Mr. Lyles stated now we take up Resolution 2010-9, which accepts the revised proposed budget and sets the public hearing for a date to be determined, which should be September 20, 2010.

            Ms. Zich stated the August meeting.  It has to be the August meeting; otherwise, we will not have it ready.

            Mr. Lyles stated they can both be in August or September.

            Mr. Cassel stated your next meeting is August 16, 2010.  We are hard pressed.

            Mr. Lyles asked do you have a concern about getting it in the paper in time?

            Mr. Cassel responded yes.  My concern is the advertising.

            Ms. Woodward stated twice is just two weeks.

            Mr. Cassel we can run it.

            Mr. Fennell stated let us get this done.

            Mr. Cassel stated we will set it for the August 16, 2010 meeting.  We will also do the public hearing addressing the subsequent rate increases at the same time. 

            Mr. Lyles stated I am looking at your Special Act and also calculating what the logistics are.  There are different ways to look at this.  You have a two week publication requirement for both the budget public hearing adoption and the rate increase.  So if you can make one, you can make the other for your August 16, 2010 meeting if you want to do it that way.  You might want to split the two. 

            Ms. Zich stated without the rate increase we cannot adopt the budget.

  Mr. Lyles stated you can adopt a budget that proposes to increase rates.  In any event, I think having the two on August 16, 2010 makes the process efficient.  I cannot think of any legal impediment, or publication impediment, to that.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor Resolution 2010-9, approving the proposed budget for fiscal year 2011 and setting the public hearing for August 16, 2010 at 3:00 p.m. at the District Offices, was adopted. 


            Mr. Hanks asked do we need a motion to set the public hearing for the rate increase?

            Mr. Lyles responded yes, of 10%, 5% and 5% for the same date time and place.


On MOTION by Mr. Hanks seconded by Ms. Zich with all in favor a public hearing to consider 10%, 5% and 5% rate increase for water and sewer was set for August 16, 2010 at 3:00 p.m. at the District Offices. 


FIFTH ORDER OF BUSINESS                   Discussion Regarding the Enactment of the Last Three Water and Sewer Rate Increases as Outlined in the Bond Report and Setting the Public Hearing to Enact the Rate Increase

            This item was covered under the fourth order of business.


SIXTH ORDER OF BUSINESS                   Staff Reports

            A.        Manager

·         Discussion Regarding Change in Health Insurance Providers

            Mr. Cassel stated typically your insurances come up in October or November so you have to set your budget not knowing what your rate increases are going to be.  Mr. Daly and staff have been working on trying to move forward so we would have a better idea of what our insurance rates were going to be while we were budgeting.  We managed to move them up to August.  Because of our loss rate ratio over the last two years our current carrier came in with a rate increase somewhere between 55% and 65%. 

            Mr. Hanks asked who is our current carrier?

            Mr. Cassel responded Aetna.  We talked to our agent to go back out and see what he could find for us.  Several carriers do not want to work with us due  to our loss ratio.  We ended up with Blue Cross Blue Shield as the one provider that would allow comparable coverage to what we have.  It is a little bit different.  Some of the co payments are up a little bit, but it is as close as we could get keeping the cost to the District as low as we could on it.  We are actually going to be presenting three plans for the employees because we are maxing out on the amount the District will cover as far as total cost of insurance per employee.  We are capping it at what we currently have in the budget per employee as a maximum contribution.  Anything over that is covered by the employee.  We have nine employees with full family coverage and they are currently picking up the difference between what the District covers and what the actual cost is.  I believe that went up over $100 a month depending on the plan.

            Ms. Zich asked were we aware of how bad this was going to be?  As I look at this, Cigna was poor risk, unable to be in the realm of their underwriting guidelines. 

            Mr. Cassel responded we had an inclination since we had, within the employees that are covered, two major losses.  One had a brain tumor and hospitalization.  He is on COBRA currently.  Another one had heart bypass surgery.  We had an inclination.  Also, the first year we went with Aetna, the day after, an individual had heart issues and died.  It cost the carrier more than the premium we paid for the year. 

            Ms. Zich stated this came as a real shock to me.  I thought we were doing really well with Aetna and now our individual employees are going to be paying a lot more.

            Mr. Fennell asked did any recent laws get passed?  Because they are essentially discriminating on the basis of trying to take small losses in small firms and get rid of them.  From a statistics standpoint that is not right.  There are lots of small firms and therefore, there is an average across all the firms.  They are just cherry picking which is inherently, to me, unfair, illegal and actually it does not follow insurance guidelines.  Is there anything we can do about this?

            Mr. Lyles responded the best way I can answer that question is by telling you our law firm, independently of me and those who deal with CSID, is primarily involved in insurance defense litigation.  We work with insurance companies and represent large institutional defendants, small drivers of cars and everyone in between.  We have had the same experience with our insurance for our employees that you are addressing right now.  There is nothing you can do about this except to try to find the best deal you can or look for a way, especially with a governmental employer, to roll it into a larger plan of some kind.  Make your employees part of a larger group.

            Mr. Hanks stated roll into the Florida Association of Special Districts and see if they have something along those lines.

            Mr. Lyles stated there are Florida League of Cities sponsored plans and things like that.  In terms of saying how can you take one bad year and then jack our rates sky high based upon one employees misfortune, because we are a smaller group they can and they do.  It is universal. 

            Mr. Fennell stated it is inherently and statistically wrong.  It does not even make sense, other than they can get away with it.

            Ms. Zich stated that is the problem with all small companies right now. 

            Mr. Fennell stated I was hoping there were going to be some new laws to fix that. 

            Mr. Zilmer stated we are considered a large group because we are over 100.  We looked at the other side of it, breaking up the districts, because we have always combined the districts to qualify as a large group, which supposedly gives better rates.  We looked into breaking up the districts for groups less than 50.  We obtained quotes for NSID, PTWCD and CSID.  Based on the census, the fact is we have a lot of employees who are getting older because there is a lot of longevity here.  They look at your census, they look at your age and every one of those that declined us have to insure you if we go into a large group.  They will insure us, but the rates are higher and you also have to fill out a medical questionnaire.  So if you have high blood pressure or something else, they have the right to decline.  They can come back and say the quote they gave us is not going to be correct because we have employees with medical issues so they can either increase the premium they initially offered us or they can say they do not want us.  It is one of those give and take things.

            Ms. Zich asked so bottom line; from Aetna last year to what we are projecting this year, how much is it rising?

            Mr. Zilmer responded about 23%.  We were looking at a 66% increase or a 23% increase.  The important thing to remember is the rate we are being charged right now is not much different than the rate we had a few years ago.  Three years ago Aetna came in and gave us this killer rate.

            Ms. Zich asked is our coverage with Blue Cross Blue Shield the same coverage as Aetna?

            Mr. Zilmer responded it will not be the same coverage.

            Ms. Zich stated that is what I mean.

            Mr. Zilmer stated it is still good though.

            Ms. Zich stated a co payment for a specialist used to be $40.  So you are not just thinking about what it is going to cost the company.  You are thinking about what it is going to cost the employees.

            Mr. Zilmer stated that is exactly what we try to do.  Another thing to remember is even if we would have taken the 66% increase with Aetna, we would not have the same plan.  That plan does not exist anymore.  They change plans constantly.  The new plan they offered had all the co payments going up. 

            Ms. Zich stated you are talking about it going up 23% for us, but I am thinking of all the individual employees out there too.  What they are going to pay is a lot more. 

            Mr. Cassel asked is 23% the overall premium?

            Mr. Zilmer responded yes.

            Ms. Zich stated that is the overall premium if no one ever goes to the doctor.  You are talking about the coverage.  There is a big difference in coverage.

            Mr. Zilmer stated not plan 5762.  The other two plans have more deductibles and co payments, but I think overall 5762 is a good plan.  Aetna would have gone up to a $25 co payment.  This is going up to $30. 

            Ms. Zich stated that is for a regular physician. 

            Mr. Hanks stated this is happening across the Board.  In our family it went up 20% or 30%. 

            Mr. Fennell stated it turns out insurance companies also have insurance.  It is a very strange thing.  They have major medical behind it.  They also go to other larger insurance policies to have that.  Can we do something like that also?  I know it sounds kind of strange.

            Mr. Cassel responded you would be trying to stack what they have already provided.  They may already have that covered with secondary insurance on their plans. 

            Mr. Fennell asked so what are our choices here?  Nothing really.

            Mr. Zilmer responded the only other carrier that would accept us was Vista and it was terrible.  From my understanding most doctors do not even accept it. 

            Mr. Fennell asked are there some larger associations?

            Mr. Zilmer responded not to my knowledge.  It would have to be within the state.  I do not think you could do it out of state.

            Mr. Cassel stated we can check into it for future policies or a potential change later in the year.  Mr. Zilmer will start researching to see what is required. 

            Mr. Fennell stated maybe we can join Coral Springs, the county or something like that.  Is that possible?

            Mr. Cassel responded depending on who you join with, you also lose control of what policies are issued. 

            Mr. Fennell asked do you think we are in control now?

            Mr. Cassel responded you are in control as far as what your plan is composed of.

            Mr. Zilmer stated we actually had several plans presented to us.  We tried to compare apples to apples and thought this was a reasonable plan based on what we had with Aetna.  There is a choice.

            Mr. Cassel stated which goes back to Ms. Zich’s point.  We could have gone through it and looked at a stripped down plan, but then out of pockets and co payments for the employee would be through the roof.  For those who never get sick it is a great deal because the premium is low, but if someone does get sick then what does it do economically to them as an employee?  One of the things Mr. Zilmer and staff have discussed is they looked at it to see how to best offer a similar plan to the employees without making it unbearable to the District or on the employee as they are picking up the additional costs. 

            Mr. Fennell asked so what do we need to do here today?

            Mr. Cassel responded we were just informing you that we are changing the plan.

            Mr. Fennell asked do we need to approve this?

            Mr. Lyles responded I think if you are talking about changing carriers as opposed to a premium increase, the Board would typically approve that.

            Ms. Zich stated I think this is terrible.

            Mr. Fennell asked do you think we can do better?  What do you want to do?

            Ms. Zich responded I know that we cannot do anything.  I just think this is absolutely ridiculous. 

            Mr. Fennell asked do we have any choices here?

            Ms. Zich responded I do not think so.  Do you see any choices Mr. Lyles?

            Mr. Lyles responded in my own experience with a similar size group; no, I do not. 

            Ms. Zich stated I also know a similar sized group that if you have insurance for yourself, the company covers it.  The minute you go to any family members you have to totally pick up the difference, which is a lot better for the company, but I realize that government agencies do not normally do that.  That is a private company, but they figure they have to do that because it has gotten so huge. 

            Mr. Fennell stated at least Blue Cross Blue Shield is supposed to be a non-profit organization.  I do not know if that makes too much of a difference.

            Ms. Zich asked is that true.

            Mr. Fennell responded yes.  There are different Blue Crosses, but yes. 


On MOTION by Mr. Hanks seconded by Mr. Fennell with Mr. Hanks and Mr. Fennell voting aye and Ms. Zich voting nay staff’s recommendation to change the insurance carrier to Blue Cross Blue Shield was approved. 


·         WWTP Plant F Review

            Mr. Fennell asked where do we stand?

            Mr. Cassel responded we have CH2M Hill’s final report based upon the information and discussions all the way back to February, which clearly identifies we have issues out there.  I think they have done a good job as far as delineating the issues with the welds, alignments and what should be looked at as far as corrective measures.  We finally received on late Friday afternoon a response from the contractor.  We have not had a chance to start evaluating that.  We briefly looked at it.  Mr. Johnson received it late Friday afternoon.  His people have not had a chance to look at it yet.  I do not think at this point we are ready to make any recommendations as to which way it needs to be done or repaired; other than the fact that we need to continue to move towards a satisfactory repair or redesign of the plant.

            Mr. Hanks asked at this point are we in an evaluation mode with regards to what their proposed fix is?

            Mr. Cassel responded yes.  They just got it to us on Friday afternoon. 

            Mr. Hanks stated so we are not dictating what the fix is.  We are just in a position to say this is potentially acceptable or not. 

            Mr. Cassel stated they were made aware in the February meeting of these issues and there was a formal report to the owner stating what their position was; that it needs to be repaired and it is not adequate the way it is.  We just received their initial response as to what their proposed fixes are to the issues which were brought up in the report you have. 

            Mr. Fennell stated we need someone on the Board to actually look at this a little closer.  I can look at the electrical wiring, but that is not an issue.

            Ms. Zich stated and I could look at the numbers, but that is not what the issue is either .  There is one person on the Board who can look at this.

            Mr. Fennell asked do we have any way of compensating Board members for extraordinary things?

            Mr. Lyles responded no. 

            Mr. Fennell asked can we hire a Board member?

            Mr. Lyles responded no. 

            Mr. Fennell stated it needs a closer look.  We are going to have to come back and make a decision what needs to be done. 

            Mr. Hanks stated one of the questions I think we need to have out there is what should we do about this welding inspector who supposedly inspected and certified the welds?  Do we need to go talk to their registration people and express concern over that or do we need to talk to BPR about the way the different companies or individuals have acted in this matter?  Those are the type of questions which are out there. 

            Mr. Fennell asked do you have the time or am I asking too much?

            Mr. Hanks responded I can work with Mr. Johnson.

            Mr. Johnson stated we are available whenever you need to discuss this. 

            Mr. Cassel stated we will give CH2M Hill a few days to kind of digest what they have as to what is proposed and then we will come back with it. 

            Mr. Johnson stated we are planning to have a response by Wednesday afternoon or Thursday morning. 

            Mr. Hanks stated the other questions I have for CH2M Hill are; I trust that you are on top of everything over at the nanoplant like a wet blanket and that you are verifying everything.  Is the rebar the correct strength?  Are they getting you the concrete cylinder test results you need to demonstrate that?  Do they have the tally beams in the right space?  Do they have the right columns?  Do they have the right amount of reinforcement in all of that stuff?

            Mr. Johnson responded yes sir.

            Mr. Hanks stated I do not want anything slipping through the cracks in the nanoplant and touching it just about when they are ready to turn it over to us. 

            Mr. Johnson stated yes sir. 

            Mr. Cassel stated I think the differing issue there is the water treatment plant was totally designed by CH2M Hill and the other was designed by the contractor.  That is where you have the conflict.  Should we ever do one of these again and I am around, we will design it with one firm.  We are not going to go this route of having the contractors do a design build unless they do a total liability design build scenario.  Because the situation we are currently in due to decisions made three, four or five years ago, does not put the District at its best position. 

            Mr. Hanks stated some of the development processes we had in place are not necessarily the best fit for this District.

            Mr. Cassel stated one of the things I am trying to make sure we change and modify is our procurement.  How we find products, contractors and etcetera to make sure the District is well served by whatever we do. 


·         Monthly Water & Sewer Charts

            Mr. Fennell asked did you ever buy those meters so you can figure out what is flowing?

            Mr. Daly responded I was mistaken by the price of the meters.  We were using the current Doppler meter we have and we received an email from Mr. Schwarz saying they do not need more reports right now.  We are at the point right now of what kind of data do we need, who do we get it to and how useful will it be when it gets there.  We have not had an event so it is all the same numbers. 

            Mr. Hanks asked was he able to get the data into a meaningful format?

            Mr. Daly responded he has it in excel now. 

            Ms. Early stated he is evaluating the new data and said he will have an update for the next meeting.

            Mr. Fennell asked can we accurately measure flows from these pump stations?

            Mr. Hanks responded yes.

            Mr. Fennell asked on a continuous basis?

            Mr. Daly responded yes.

            Mr. Fennell asked how are we doing this?

            Mr. Daly responded we have a meter we move from one place to another. 

            Mr. Hanks stated if I may interject here; part of it is we do not want to have continuous data from lift stations over the course of the month because we will be bogged down with so much data.  We want to have a snapshot of a dry period and a snapshot of a wet period.  You do not need to see five weeks of dry or five weeks of rain.  They are going to be fairly similar. 

            Mr. Daly stated we are currently putting it at one lift station for a week and the next week it goes to a different lift station.

            Mr. Fennell asked how much are the meters?

            Mr. Daly responded I think they are like $6,000.

            Mr. Fennell asked a piece?

            Mr. Daly responded I think so.  We spoke about buying half a dozen or so last month.

            Mr. Fennell stated not only for the canal, but if we actually go out and do something, we want to be able to measure the improvement.  A couple would be good. 

            Mr. Hanks stated just to give you an idea; when we are dealing with traffic studies, counting cars and trying to figure out how a roadway is performing, the counties will pick one day.  They will do one day of counts.  That is it.  That is their representative data for that roadway.  Then if there is an incident they come back, but they really just try to look at that one day.

            Mr. Fennell stated that is because the event period of time is pretty fast with a car going by every few seconds.  It does not rain everyday. 

            Mr. Hanks stated when you think about it you have continual flow in a highway and you have continual flow in a sewer.  There is not much difference.  They are fair analogies. 


·         Utility Billing Work Orders

            This item is for informational purposes only. 


            B.        Attorney

            There being no report, the next item followed.


            A.        Manager (Continued)

·         Monthly Water & Sewer Charts (Continued)

            Mr. Hanks stated the water loss we have incurred over the last year averages 14.5%.  What should it be for a tight system?  Where should we be with those numbers?

            Mr. Cassel responded I think it is somewhere within 3% to 5% or 5% to 7%. 

            Mr. Hanks stated so we are about double what we should be.

            Mr. Fennell asked do we have theft out there?

            Mr. Daly responded we do not know.

            Ms. Zich stated we do not have people without meters.

            Mr. Hanks asked where is this going?

            Mr. Cassel responded that is what we have been trying to determine.  We think we have adjusted time of billing.

            Mr. Daly stated 400,000 gallons a day go in our plant.  Sometimes it is a little bit more.  We did not know that.

            Ms. Zich asked was that counted in this?

            Mr. Daly responded no.

            Mr. Cassel stated it is in the distribution, but it is not in the bill.  We should make an adjustment to the chart and back out the 400,000 gallons per day.

            Mr. Johnson asked where does the 400,000 gallons go?

            Mr. Daly responded primarily to the water plant. 

            Mr. Johnson stated from the water plant.

            Mr. Cassel stated it goes out the distribution system.  It is pulled off.

            Mr. Johnson asked after the meter?

            Mr. Cassel responded yes.

            Mr. Johnson stated I had asked Mr. Stover about that and he said it was before the meter.  I was never able to verify where the flow comes back around.  Is that to feed the chlorine system?

            Mr. Cassel responded it is the chlorine, it is part of the lime, it is processed water that keeps re-circulating. 

            Mr. Johnson stated it is a matter of where you monitor it.

            Mr. Cassel stated we have added meters throughout the plant to determine where that is and look at how we can adjust the numbers for the chart. 

            Ms. Zich stated the distribution should take out the water we use here before you even say distribution because we do not have a chance to bill it. 

            Mr. Johnson stated it is not something you actually lose.

            Ms. Zich stated but we cannot distribute and bill the same amount.  It should be just net distribution. 

            Mr. Hanks stated that makes a huge difference in terms of where that water is actually coming off.  If it comes off after the meter, we are down to the 3% loss. 

            Mr. Johnson stated my understanding from Mr. Stover is that it pulls off before the meter so you would not even see it do that.

            Mr. Cassel stated we will verify it.

            Mr. Hanks stated it needs to be verified because that single number makes a difference from a 14.5% loss which is unacceptable and a 3% loss which is perfectly fine.

            Mr. Daly stated we are going to have a meeting tomorrow and we will see.

            Mr. Cassel stated we will address it tomorrow.  

            Mr. Fennell stated you were working on some data as far as the average values for the canals.  You were doing some statistical analysis.

            Mr. Cassel stated that is out there and they are already way beyond that information for the nutrient level issues.

            Mr. Fennell stated somehow I want to say this is our recommendation to somebody.

            Mr. Cassel stated we did.  We sent a letter off.  There is still some debate.  I received another email on Friday afternoon.  They are still working on the nutrient levels.  One of the things the Florida Association of Special Districts was pushing was reclassifying, as you brought up earlier Mr. Hanks, the canals which are for drainage only; that a new class is created which is non recreational.  This would allow a higher nutrient level than others because they are performing the task they were designed and constructed for versus being utilized for something else.  They are in the process of trying to get it changed right now. 

            Mr. Hanks asked on the idea of canals, is the District on top of plantings and also the shrubs over by the Coral Springs Auto Mall?  How are we sitting with regards to that in terms of hurricane preparedness?

            Mr. Frederick responded I have been keeping an eye on the auto mall.  They have been maintaining it pretty well.  The trees are still there, but they have cut the lower limbs and they are maintaining the bank.

            Mr. Hanks asked were the trees supposed to be limited to a certain height?

            Mr. Cassel responded that is a city thing.

            Ms. Zich stated I know they are supposed to be trimmed.  I live very close to there so I can see them and they look huge.

            Mr. Frederick stated yes.  They are big, but the lower limbs are gone.  They are not blocking the canal like they were before. 

            Mr. Cassel stated we can check with the city.

            Mr. Hanks stated check our own records to see what the agreement with the city was as to how that was to be maintained.  Are there any areas of concern?  I saw your crews out there pulling out some screw pine or something along those lines near St. Marie Magdalene.

            Mr. Frederick responded that was something that was growing there.  The church was complaining about it and it was on the right-of-way on the bank of the canal so they asked if we would remove it. 

            Mr. Fennell asked how are we set up for hurricane status?

            Mr. Cassel responded I think we are in good shape.  We have gone through our plan.  All of our stuff is set up.  Crews are all ready to go.  We have also done a complete survey of all the canals on any docks or other structures that might be out there.  They have all been sent letters to remove them.  We are looking at the canals to make sure we do not have things growing.  There are some trees in the right-of-way, but we are trying to make sure people are not planting new vegetation or putting things there which they should not be. 

            Mr. Frederick asked do you have your radios and everything you need?  Do you have money set aside in case you need to buy things?

            Mr. Daly responded yes.  We put $10,000 aside.  We have radios, CB radios, satellite radios and telephones. 


            C.        Engineer

·         Monthly Aerial Photographs

·         Project Status Report

            Mr. Fennell asked what about the interconnection to the canal dual project you were trying to get $2.1 Million for?

            Ms. Early responded I am still waiting.  They asked for some additional information so we put that in the e-grants.  You have to go online to do it.  We submitted that.  Now we are just waiting.

            Mr. Fennell asked what do you think the probability is?

            Ms. Early responded I am hoping we will get something out of all the ones we submitted.

            Mr. Fennell stated that is the one we really wanted.

            Ms. Zich asked how much is it for?

            Ms. Early responded we asked for $2.1 Million.

            Mr. Fennell stated I think it is like a $4 Million project.

            Ms. Early stated no.  It is a $2 Million project.  That is what we put in because I think they will fund up to 75%.

            Ms. Zich asked what did we spend to go into all of these?

            Ms. Early responded approximately $35,000. 

            Mr. Fennell stated we had to fund engineering to write up all the proposals.

            Ms. Early stated the original one was about $7,000.  Then they came back and asked for traffic studies and all of this additional information.  We had to upload information on this quite a few times.  The last time it took us about two hours.  They wanted a couple of explanations on some things.  It is a big process.

            Mr. Fennell stated if we actually get it, it was one of the few things we saw we could do that could actually help us out. 

            Ms. Early stated it was the one which had the most benefit.


SEVENTH ORDER OF BUSINESS             Approval of the June Financials and Check Registers

·         Summary of Cash Transactions

            Ms. Zich stated we have an update from Mr. Cassel on US Bank.  We are not going to get a lot of money, but at least it is in something now.  As of when is it effective?

            Mr. Cassel responded it was effective as of this past week. 

            Mr. Fennell asked what are they doing?

            Mr. Cassel responded we managed to get it invested within US Bank and we laddered it to match the potential drawdown of the project.  We also have it flexible so if the project either comes in earlier or drags later, we can shift funds.

            Mr. Fennell asked what are you laddering?

            Mr. Cassel responded it is a money market fund on part of it. 

            Ms. Zich asked Ms. Woodward, what did we originally think we could earn on this?

            Mr. Fennell responded 3% to 4%.

            Ms. Zich stated that is right.  Now it is like nothing, but we have a big amount there so we will at least get something. 

            Mr. Cassel stated the bonds originally presented approximately $250,000 a year in interest, which you are not getting.  That is another part of your revenue loss.


On MOTION by Ms. Zich seconded by Mr. Fennell with all in favor the financials and check registers for June were approved.


            Mr. Fennell asked is there anything else?

            Mr. Cassel responded just that you have aerial photographs.  We have walls.

            Mr. Fennell stated there are things going up out there.  I saw you all feel we are three months behind, but on the other hand we are not six months behind.

            Mr. Cassel stated kudos to Mr. Easton.  He is on top of the plant out there.  He is the construction engineer out there.  He is working on issues; even on the texture of the blocks.  He is looking at every piece of steel, every poor joint and making sure the designs and calculations all meet the criteria. 


EIGHTH ORDER OF BUSINESS                 Adjournment  

            There being no further business,


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






Glen Hanks                                                 Robert D. Fennell

Secretary                                                    President