MINUTES OF MEETING
NORTH SPRINGS IMPROVEMENT
DISTRICT
A meeting of the Board of Supervisors of the North Springs Improvement
District was held on
Present and constituting a quorum were:
Steve Mendelson
President
David L. Gray
Secretary
Vincent Moretti
Assistant Secretary
Also present were:
Edward Goscicki
Interim District Manager
Dennis Lyles
Attorney
Jane Early
Engineer
Doug Hyche
Utilities Director
John McKune
Capital Improvement Coordinator
Nick Schooley
NSID
Brenda Schurz
Terri Lusk
Sean Skehan
CH2M Hill
Mike Stokes
Marie Fergie
FIRST ORDER OF BUSINESS
Roll Call
Mr. Goscicki
called the meeting to order and called the roll.
SECOND ORDER OF BUSINESS
Approval of the Minutes of the December 5, 2007
Meeting
Mr. Goscicki
stated each Board member received a copy of the minutes of the
There not being any,
On MOTION by Mr. Gray seconded by Mr.
Mendelson with all in favor the minutes of the
THIRD ORDER OF BUSINESS
Discussion of
Mr. Goscicki stated I want to give the Board an update in terms of where
we are with the construction activities in the area as well as where Tousa Homes
is at. As the Board knows from the
last meeting we have a contract with Florida Sewer and Water to undertake
certain improvements for the District within the area. We have a funding agreement with
Tousa/Engle Homes, which provides for them to fund the construction as the
invoices come in from Florida Sewer and Water. At this point we have invoices totaling
an approximate amount of $1.2 Million from Florida Sewer and Water to the
District, which we have not paid.
We have not paid them because, per our funding agreement with Tousa
Homes, we forward the invoices to Engle Homes as they come in. They have five days to forward us funds
to make the payments. We have not
received any funds from Tousa Homes since August or September. As discussed last month, we sent a
demand letter to Tousa Homes for this amount telling them they are in default of
their agreement. We received a
corresponding demand letter from Florida Water and Sewer.
At the last Board meeting we heard Tousa Homes might still move forward
with construction. Their
underwriter, GMAC, may move forward with the construction and take a leadership
role. At this point we are not
hearing this anymore. We have
indirect responses. Mr. Lyles, I do
not know if you had any direct conversations with them on this regard.
Mr. Lyles stated I met with a representative of Tousa Homes about this
subject. I presented him, again,
with copies of the funding agreement; where we were and what we needed. This is on the financial end. He was not the president of Tousa Homes
in
Ultimately, the assessments you already levied against the property will
provide a funding vehicle when and if bonds are sold as well as when and if some
kind of inner financing is brought before the Board. We are not recommending this today. We are not bringing this to you
today. I will tell you in light of
the continuing bad news coming from Tousa Homes end of things; I contacted our
bond counsel who represented us in previous bond matters taken up in other
divisions within NSID. I discussed
with her the possibility of interim financing.
We are going to look at it as a way to go forward, but as of right now I
cannot report anything to you more positive than we already heard from the
manager. Tousa Homes does not look
as if they will have funds due to many obligations it has as an entity. It is possible they will do what other
corporate entities do, which is reorganization in a bankruptcy proceeding. This funding contract we have with them
could get tied up in this kind of proceeding for an extended period of
time. I do not think we will
recommend to you that you wait and rely on that. The timing is not going to be right for
you and for your plans.
We will attempt to find alternate sources for a portion of the work that
has been done. We will continue to
negotiate with Florida Water and Sewer.
We will arrange a schedule of payments. This is the approach we will be
recommending; however, I want to assure the Board none of the recommendations
you will hear from staff will involve going into other general funds of NSID so
residents outside of this community are ultimately responsible for the
infrastructure improvements benefiting the
Mr. Goscicki stated the infrastructure we are talking about paying for is
all infrastructure, which will be owned and be part of the overall water, sewer
and drainage infrastructure of the District. We are not building homes. We are not building onsite improvements
on individual lots. The
infrastructure we are talking about is for the District infrastructure as
approved.
Mr. Mendelson stated it will be ours eventually and we are going to have
to manage it anyhow. It is what it
is, as long as we are not paying an exuberant amount for something that is dead
in the water.
Mr. Gray stated they told us at the last meeting they were going to make
a payment in the next two weeks.
Mr. Lyles stated that is correct.
Mr. Gray stated it did not happen.
Mr. Lyles stated the president of the corporation, for
Mr. Gray asked when you say we will attempt to do partial funding, are
you talking about funding from bonds or where are you suggesting we get the
funds?
Mr. Goscicki responded we have existing revenue through capacity fees we
collected on the water and sewer system in other areas of the system. The approach we have taken is we have
one consolidated water and sewer system.
The intent for this area is as these properties are sold we will collect
capacity fees from these properties and it will be sufficient to cover the cost
of this infrastructure. We have a
fund balance in the water and sewer fund we can use to help mitigate this. We do not have the confidence we have
this fund balance within the general fund.
As your attorney pointed out we do not have a consolidated general fund
except on the drainage portion, but we cannot use funds we picked up for
drainage in one area in another development. It is not a benefit, which accrues to
the people who contributed those funds.
On the general fund we have different issues of how we will have to come
up with money. We might look at a
short term financing line of credit.
We are talking about $500,000 to $800,000. There are avenues we are approaching to
help get you interim financing to get this money in place in order to move
forward and clean up this issue.
Mr. Moretti asked at what point do you think we will use the
bonds?
Mr. Goscicki responded the process is to stop dead in the water by the
underwriters for eight months now.
We are looking at the general market and where it is. Where the market is today, we cannot
sell a bond. Where Tousa Homes is
today, we cannot sell these bonds.
Until a developer comes in and resurrects the property where there is an
indication homes will get built, we will not be able to assess the
properties.
Mr. Lyles stated when we did these bonds there was a different owner of
this property and the developer.
After the bonds had been validated and the assessment proceedings had all
been completed, the property was sold to Tousa Homes as the developer, but the
landowner is GMAC. There is nothing
wrong with GMAC financially. They
are not going anywhere and they are going to continue owning the land. Our expectation is they will either
pursue their own resources to do something with it or they will bring in another
developer. It is not like we have
nobody to look to.
Mr. Gray stated Tousa Homes does not own the land. They just signed the agreements for the
development.
Mr. Lyles stated they are the developer. As the project would have evolved they
would have taken down a group of lots that do a component sale and taken down in
phases. GMAC is the land banker of
this project.
Mr. Gray asked is the current case that GMAC is the one who has the
obligation?
Mr. Lyles responded yes.
Ms. Fergie stated I spoke with Ms. Ghita from GMAC today. She informed me Tousa Homes never
provided GMAC with any billing; therefore, they had no idea these invoices were
outstanding until I made a phone call.
They are still doing due diligence before they proceed any further on
this project. She could give me no
idea. Our contract does not state
anything about us getting paid based on any of this advanced funding. We give our invoice to the engineer, the
engineer presents it to the District and then within less than 30 days we were
paid. I am sitting out there with
invoices going back to August and September, which we are still waiting on. GMAC has been notified now, but they
have no intention of paying anything.
I have a concern about where our liability lands with how we left the job
site. There is material onsite
now. We were told to leave the job
site by the Tousa Homes representative.
Mr. Goscicki stated your contract is not with Tousa
Homes.
Ms. Fergie stated we do have a contract with Tousa
Homes.
Mr. Goscicki stated you have a second contract with Tousa Homes. I just want to clarify for the record
NSID did not direct you to stop work.
Ms. Fergie stated no. I
never received a stop order from NSID, but then again I am not getting paid by
NSID.
Mr. Goscicki stated my understanding from the last meeting is you stopped
work due to lack of payment.
Ms. Fergie stated we were told by a Tousa Homes representative to finish
up that days work and to stop working.
I have materials onsite. I
have sanitary installed. We cannot
protect it. When we do go back to
finish the job it is going to end up NSID, which I am sure is going to
eventually charge whoever is in charge of the stop, additional money. I want the Board to be aware of this and
we should not be leaving the site in the condition it is in.
Mr. Gray asked are you saying it is unsafe or are you concerned about
damage to what has already been installed?
Ms. Fergie responded both.
Mr. Mendelson asked what can we do as a Board?
Mr. Goscicki responded we intend to sit down and continue negotiations
with Florida Sewer and Water on how to proceed with this. We fully recognize everything you
said. What you heard us tell the
Board is we recognize there will be no money coming in the short term from Tousa
Homes or GMAC and we will need to deal with this issue. We intend to sit down, meet with you and
look at how we can mitigate this situation as best we can with the available
resources we have, recognizing we do not have sufficient resources to cover this
entire project at this time. There
is intent to work with you, try to mitigate the problems and move
forward.
Mr. Gray stated as far as liability goes we are not the landowner so I
assume we do not have any liability.
Ms. Early stated even though the subdivision roads are not owned by the
District, the infrastructure piping is.
I do not know if there is a stub out or something sticking out that
someone can trip on.
Mr. Lyles stated we are hearing a great deal about ownership and
liability. This is not something to
make a matter of record on. We do
have a dispute. We have received a
claim letter from the contractor.
There can be litigation. We
do not take possession and title to these things until the projects are
completed. It is not
completed. While they are destined
to be NSID pipes, they are not now.
The less we discuss these kinds of issues in this public setting having
told you we are continuing to try to work with the contractor and trying to work
out various ways of getting partial payment now and full payment later. We are working actively on those things
and we will continue to do everything in the best interest of the District. The more we talk about this the more we
are opening up a can of worms, which will be difficult to put back together at
some later time. You heard
input. Staff has told you where we
are. I am not going to suggest you
take any action today of any kind other than to continue to press us to keep you
apprised of what is going on, as well as what the options are. We will do that.
FOURTH ORDER OF BUSINESS
Consideration of Award of Contract for Coral Ridge Drive Forcemain Valve
Replacement
Mr. Goscicki
stated this is a ratification. I
stepped outside my bounds a little because we had a construction contract, which
this Board approved us to go to bid on.
Bids come in, which were underneath the engineer’s estimate. We did not want to hold up the award of
this contract due to the Board’s schedule.
This should have been on last month’s agenda. I am not sure how we missed it, but we
did. This is essentially asking the
Board to ratify the award of this construction contract for valve
replacement. Ms. Early can describe
the specific project.
Ms. Early stated I brought this up a few meetings ago. There were three forcemain valves on
Coral Ridge Drive needing to be changed out. We wanted to quickly get this out to
bid, but the meeting was canceled.
We awarded the contract, but we need the Board to ratify it.
On MOTION by Mr. Mendelson seconded by
Mr. Gray with all in favor the award of contract to Capitol Contracting in the
amount of $74,619 for the Coral Ridge Drive forcemain valve replacement was
ratified.
FIFTH ORDER OF BUSINESS
Consideration of Permit Requests
A.
Parkland Village Commercial/Mixed Use – Surface Water Management
System
Ms. Early stated
this is a commercial piece within Parkland Village. They are moving forward with their
project. This is a typical surface
water management permit request. We
reviewed it and recommend approval with our standard comments. There is no funding agreement associated
with this project.
Mr. Gray asked is the road construction anticipated for Parkland Village
necessary to open up the parcel when we give it partial
access?
Ms. Early responded I do not think so because they are going to have
access off of Pine Island Road.
Mr. Goscicki stated they are the same ones who own the condominium
property to the south.
Ms. Early stated I do not know.
Mr. Goscicki stated the point is we think there may be some opportunity
for us to talk with this developer offline.
Ms. Early asked to see if they might want to help finish the
road?
Mr. Goscicki responded yes.
Mr. Lyles stated it does not have anything to do with whether you approve
or disapprove this permit. It is
part of the whole picture.
On MOTION by Mr. Mendelson seconded Mr.
Gray with all in favor the Parkland Village Commercial/Mixed Use surface water
management system was approved.
B. Home
Depot – Drainage Permit
Ms. Early stated
the next one is for the new proposed Home Depot in Coral Springs. They required revised plans and
calculations. We reviewed it and
recommend approval.
On MOTION by Mr. Gray seconded by Mr.
Mendelson with all in favor the Home Depot drainage permit was
approved.
C. Pine
Trails Park (Phase III) – Drainage Permit
Ms. Early stated
this is a surface water management permit for phase III of Pines Trails
Park. This is the City of Parkland
park off of Pine Island Road and Trails End. This is a typical surface water
management permit. We recommend
approval with our special conditions.
Mr. Mendelson asked have we discussed this before?
Ms. Early responded this has come before the Board a few times.
Mr. Schooley asked where is the drainage going?
Ms. Early responded I know they have marked off lakes and they are
connected under Trails End.
Mr. Schooley stated on all of these we get a $2,500 trash bond. There is no water involved and there is
no inspection for me to do. They
hook up the pipe, cover it over and there is nothing for me to see. Do you want to continue collecting the
$2,500 trash bond and return it when they complete the
work?
Ms. Early responded it is a good idea. You never know. They might drop something on the
right-of-way.
Mr. Goscicki stated they may break a pipe. They may do something. It is not a bad
practice.
Mr. Schooley stated my problem is how to clear it. How do I know there is a broken pipe
there? We do not own the
pipes. It is hard to go onsite and
look for something.
Mr. Goscicki responded you and I need to discuss this offline on how we
want to handle this.
Mr. Mendelson asked why?
Mr. Goscicki responded I need to be prepared to talk to you guys. Is there another way to deal with
this? How else might we do it
procedurally? If we are not going
to do it, who makes the decision that we are not going to do it for this
project, but we will for another project?
There are many administerial issues we will need to work out to make sure
we are treating all of our customers equally.
Mr. Mendelson stated the Board has established this fee as a policy. It is a fee the Board charges for all of
these. It is difficult to decide we
are not going to charge it in one particular case. There is more to it.
On MOTION by Mr. Mendelson seconded by
Mr. Gray with all in favor the drainage permit for Pine Trails Park Phase III
was approved.
D.
University Drive/Trails End Improvements – Right-of-Way Permit
Ms. Early stated this is a right-of-way permit. They are putting in some turn lanes off
of University Drive and Trails End.
Our letters state the standard conditions.
On MOTION by Mr. Gray seconded by Mr.
Mendelson with all in favor the right-of-way permit for University Drive and
Trails End Improvements were approved.
SIXTH ORDER OF BUSINESS
Consideration of Approval of Standard Engineering Services
Agreement
Mr. Goscicki stated this is a more substantial issue. This is consideration of the Board’s
approval of a revised standard agreement for engineering services with CH2M
Hill. One edit we need to make to
this before the Board takes action is this states this is an agreement between
CH2M Hill and the District. This is
really an amendment to their existing agreement. We will need to get the verbiage changed
before it is executed.
CH2M Hill, through Gee & Jenson as their predecessor, has been the
District engineer for 30 years. We
have been operating under a standard engineering agreement. We recognize we need a better updated
agreement, which more succinctly defines roles, responsibilities, liabilities
and risk. We negotiated this
agreement with CH2M Hill. Your
attorney has been involved with the negotiation and review of these terms and
conditions. CSID just approved the
same agreement with CH2M Hill for the same reasons.
This agreement provides a framework for them to do additional work. Anytime they have work to do, they will
come in with work authorizations.
They will put in a dollar amount and a schedule to be approved by this
Board. We would typically
do one work authorization at the beginning of each fiscal year for the
general services such as attending meetings and routine permit reviews. As we get into other activities such as
consumptive use permitting, design of pump station improvements and other
capital projects they will be done as separate work authorizations. This way we will provide one common
framework for doing this work.
The work authorizations will either be approved under a lump sum basis or
under an hourly basis. If they are
done on an hourly basis, there is a fee schedule as part of the agreement. This fee schedule is approximately a 10%
increase over their existing fee schedule.
There existing fee schedule has been in effect for approximately three
years now. I looked at this in
comparison with other engineering rates and fees within the community. This is a competitive rate
schedule. When you look at the high
end rates, the higher end salaries are people who are seldom used on a
project. Most of the people
involved are in the middle band of the salaries you see.
We will use this agreement going forward. Any and all new work, as we have done in
the past, will still come before the Board for approval on a work authorization
basis. The rate schedule for hourly
rates will be automatically adjusted on an annual basis based upon a CPI
index. We agreed upon what the
appropriate CPI index will be.
Mr. Mendelson asked do you have anything Mr. Lyles?
Mr. Lyles stated as the manager said, we participated in the drafting of
this agreement. We reviewed
it. It is similar to other
engineering services agreement for similarly sized districts with the same level
of complexity. This is an amendment
to an existing agreement. You have
a contract with CH2M Hill to provide all of these services. There is nothing new in terms of hiring
CH2M Hill as evidence by this document.
It merely updates and clarifies some of the language of the relationship
you already have with them. As the
manager explained there is the new rate schedule and there is the annual CPI
index.
On MOTION by Mr. Mendelson seconded by
Mr. Gray with all in favor the amendment to the standard engineering services
agreement with CH2M Hill was approved.
SEVENTH ORDER OF BUSINESS
Staff Reports
A.
Manager’s Report
Mr. Goscicki
stated there are two quick items, which are not on the agenda. I wanted to let the Board know Ms.
Rabone, your recording secretary, is no longer with Severn Trent. Ms. Demarco, who was the former
recording secretary for the District, will be picking up those
responsibilities. I will try to get
her at the next meeting so you can be introduced to her.
I also wanted to let the Board know we had some correspondence over the
last two months from the Pelican Isles HOA. There was concern about landscaping
maintenance on the far side of the lake abutting the Sawgrass Expressway. We received a letter from the HOA asking
us to maintain the property and have it cleaned out because it is District
property. We responded to them by
pointing out their HOA bylaws, which specifically require they maintain the
property. It recognizes the
property is owned by the District, but establishes through their bylaws they are
responsible for the maintenance of the area.
Mr. Mendelson stated I was under the impression Cumber was supposed to
maintain it. Even though those
homes were sold, that piece of property was supposed to be maintained by
Cumber.
Mr. Goscicki stated it is written in the deed restrictions and covenants
for the community that the HOA is responsible for maintaining it. We have not received a follow up
response to our response, but we did let them know this was their responsibility
and we copied the section of their covenants stating this. We think this issue has gone away.
Another issue raised by the same community has to do with concerns about
erosion of some of the lake banks by the properties. Mr. Schooley has reviewed this. The erosion is minor. The erosion is all on our property and
is not impacting any private property.
We are structuring a response for the property owners saying this is not
a private property issue, it is within the District, it is not impacting the
District in any way and it is not impacting their private property. We do not consider it severe enough to
warrant any actions.
Mr. Mendelson asked is the property we are discussing on the west side of
the big lake, on the Sawgrass Expressway side?
Mr. Goscicki responded no.
It is on the east side. It
is on the homeowner side. In doing
this we uncovered what looks like some landscape structure retainment walls,
which might have been built on NSID property.
Ms. Early stated I think they obtained a permit for that a long time
ago.
Mr. Goscicki stated this is private property.
Mr. Mendelson stated this is the piece of property from the homes for
that lake. Did they get approval
from the HOA to do this?
Mr. Goscicki responded we do not know.
Ms. Early stated I doubt it, but I cannot confirm.
Mr. Mendelson stated they have to deal with the
HOA.
Mr. Goscicki stated it is incumbent upon us to send them a letter as part
of our response saying we have seen these structures, they are within the
right-of-way as well as possibly the property of the District and they will need
to get a permit approved by us or if they have one, renew it.
Mr. Mendelson stated I agree with you because a couple of years ago they
made a big fuss. You could not put
a light switch in. I never go back
to the area, but you are showing me something I do not think was approved by the
HOA. Are we going to correspond
with the HOA?
Mr. Goscicki responded we are going to respond to the HOA who brought the
issue of erosion up to us. We will
bring this issue to their attention, but we will also send a separate letter
voicing our concern as well as their need for a permit.
Mr. Gray stated they are on NSID property. When you say a permit, do we allow a
permit for someone to put this on their property?
Mr. Goscicki responded no.
Mr. Gray asked then do they just need to remove it?
Mr. Goscicki responded this is not an erosion
issue.
Mr. Schooley stated I would never go in back of the homes to use the
right-of-way. I do all of my work
from the boat.
Mr. Goscicki stated that is not the point. You cannot bring up these comments
without bringing them up to me first.
We have property rights there we have to protect. That is an obligation of this
District. We cannot have individual
property owners abrogating those rights and taking over property this District
owns. Regardless of whether or not
we are using it now or are going to use it three years from now, it is still our
property.
Mr. Gray asked do we need to send them a notice saying they are not
allowed to be on our property?
Mr. Goscicki responded I need to confirm it is our property and not just
a right-of-way.
Mr. Lyles stated what we typically do is say, “If you have received a
permit from NSID to erect this structure, please provide us with a copy. Our records do not indicate you have
one.” They need permits from the
city as well and approval from the HOA.
There are multiple layers being ignored.
Mr. Schooley stated you cannot see it in the picture, but there are boat
docks there.
Mr. Mendelson asked there are boat docks there?
Mr. Schooley responded yes sir.
There are boat docks throughout the District.
Mr. Lyles stated you have a firm policy prohibiting this. You have to enforce the policy in an
even handed way.
Mr. Mendelson asked does that come through NSID or Coral Springs Code
Enforcement?
Mr. Goscicki responded I believe we both have jurisdiction in that
regard. We have jurisdiction in
that it is our property and they are essentially trespassing on our
property. Coral Springs Code
Enforcement has jurisdiction in terms of them building structures without going
through a permitting process within the city, which will permit them to build
certain structures and make certain improvements without
approval.
·
Report on Broward Working Water Solutions
Conference
Mr. Goscicki stated this conference was sponsored last month by the
Broward County Environmental Protection Department along with the county
commission. They had participation
by the Regional Planning Council, SFWMD and a broad spectrum of panelists from
academia, political through technical.
I attended on your behalf because I was concerned about what the
direction of permitting was by SFWMD.
I apologized to Mr. Skehan today at a staff meeting and I want to
apologize publicly. Mr. Skehan
brought this to my attention months ago saying the direction water management
has gone at is they have established a rule saying the water you used in April
of 2006 is all the water they are going to permit you to use going forward. This is regardless of what you had
permitted. If you have seven MGDs
permitted, but you only used three, going forward they will only allow us to use
three.
My reaction is this is absurd.
How can they come back and say they gave us a permit in the past for
seven MGDs, we as a District relied on the permit and now they are going to tell
us we can only have three MGDs.
That is what the rule says.
What flabbergasted me was the strong support at the county commission
level, at the Regional Planning Council level and by the majority of
participants in this forum. The
underlying issue is SFWMD is now years behind in implementing the Everglades
Restoration Program. The Everglades
Restoration Program was designed to be a platform and the analysis platform as
well as the tool to be used to figure out how we allocate water between the
municipal use, the Everglades, the farmers and other environmental uses. They do not have an answer yet. They do not have solutions in place
yet.
At a certain point the Water Management District had to say they need a
policy on how they are going to permit water consumptive use going forward for
municipal use. They are making a
policy saying as of April 2006, what you get is all you get. There is no science to support it. There is no model to support it, but it
is the policy out there. I asked
them, “How do you implement this?
How do you get one community that has water to work with the community
next door that does not?” There
only answer was they need to begin combining cities.
The impact to this District is potentially significant. We have a seven MGD water treatment
plant, seven to ten MGDs of well fueled capacity based on a seven MGD
consumptive use permit and going forward we may not be able to get more than 3.5
MGDs. To meet additional
obligations we will be forced to find alternative water. Alternative water can be reclaimed waste
water you use for irrigation to mitigate your consumptive use for potable
uses. It can be
desalinization. The most likely and
simplest alternative is to go down deeper to the Florida Aquifer and pull your
water out of there. The impact to
us again is we have a seven MGD treatment plant and we may have to replace half
of it because of this permitting issue.
Yesterday we submitted our consumptive use permit application for renewal
of our permit. We requested our
full allocation of seven MGDs from the Biscayne Aquifer. We started the process with the Water
Management District and expect them to come back saying they will only give us
what we used in April of 2006 going forward. I want to make you aware this is the
situation. This is not going to be
a short process to go through to get this permitted and resolved. I am absolutely amazed that every
utility in Broward County has not screamed bloody murder, taken it to their
Board and lobbied the State Legislature to fire all of the Water Management
District personnel, but this has not happened.
As we told one other District, this ship has sailed. This is a rule they approved and we are
now living under it. It can have a
potentially serious financial impact on the water and sewer fund. There is grant money available from the
Water Management District to help mitigate this. We will be working with our engineers
who are taking a lead on the permitting process, but it has a potentially
significant down side in terms of the water and sewer rates. The worst case scenario is we will need
to get $20 Million worth of bonds to build additional water treatment plant
capacity and bump your consumers’ rates significantly to pay for it. That is the bad
news.
Mr. Mendelson asked what is the good part of this?
Mr. Goscicki responded the good part is you wind up with a brand new
reverse osmosis treatment plant, which will give you better water quality and
meet some other criteria. There is
not a great deal of positive news on this.
We are going to push this as hard as we can to represent the District and
make sure we push this envelope to see what we can get to maximize our current
investment. The mitigating
circumstances we have is we have infrastructure in the ground and we built the
infrastructure based upon the current permits from the Water Management
District. You are not alone. The Cities of Hallandale, Sunrise and
Miramar are in similar situations right now. They are facing similar challenges.
·
SBA Account Status
Mr. Goscicki stated we told the Board at the last meeting we have $18
Million of District funds deposited within the SBA account. Back in early to mid December there was
a run on the account by a number of governmental entities within the state. The SBA froze the account and said we
could not take money out. They did
that for a period of a couple of days as they went in to reassess where they
were and what they have. The
challenge they have is a portion of the funds they invested on all of our
behalves, which is approximately 13% to 14%, are invested in products dealing
with sub-prime mortgages. When wind
of that got out people started pulling their money out. This is why they froze
it.
The SBA came back with a set of rules as to how you can get your money
out. They set up two funds; an A
Fund and a B Fund. The A Fund is
86% of the total amount in there.
It is all backed by AAA rated investments. It is secure and they do not think it is
a problem. The other 14% is
problematic and they are not going to allow us to touch the 14%. Of our $18 Million, they are not
allowing us to pull 14% of it.
Further compounding it, the remaining 86% of our funds has restrictions
on it. They said we can take out up
to 15% of the money or $2 Million, whichever is greater, on any of the
individual funds we have invested.
We immediately pulled as much money as we could. This was approximately $2.9 Million
because we have the $18 Million spread over five or six different funds. If we want to touch the remaining funds,
there is a 2% penalty fee to take our money out.
A great deal of this money is there to reimburse WCI Communities for
their advance funding agreements on other utility infrastructure they put in on
other projects. Other funds were
funds we were looking to use to fund ongoing capital improvements. We had a stormwater pump station project
we were getting ready to put out for bids.
We have pulled that off the shelf until we can resolve how much money we
have in the general fund to be able to pay for these kinds of improvements. We are moving forward with some designs
with CH2M Hill for water treatment plant improvements, but obviously we will not
move forward with any construction until we can get some resolution.
The good news on this, compared to other governmental entities who had
operating funds in those accounts, is all of the funds we have in those accounts
are essentially capital funds or are related to funding agreements and reserved
funds put aside for capital. It is
impacting our ability to move forward on capital improvements, but we are not
short on how we will cover payroll next month, which some governmental entities
were faced with. We are continuing
to track this diligently to see where we are. Ms. Lusk, do you have any further
updates?
Ms. Lusk responded we checked the website yesterday and there was still
no news.
Mr. Goscicki stated the reason why we pulled $2.9 Million out
immediately, even though they were saying these were safe investments, is our
concern that they can change the rules again. We took out everything we could and
placed it in an interest bearing account.
We are looking at other long term investment strategies for this District
for the balance of funds when we can withdraw them without penalty or if we get
to the point where we need to take them out with penalty, we will have
alternative investment strategies.
There is no action required by the Board on this. I wanted to make sure you were all up to
speed on this. It is a significant
issue. It is a huge issue for some
other governmental entities who have over $100 Million such as the School Board
who runs the state in particular.
They invested in the SBA.
The astounding thing to me on this, almost as astounding as the Water
Management District permitting rules, is this was the safe haven for local
governments. This was where you put
your money so you did not have to go out and hire an investment manager to
manage your investments. Here was
the tool for you to do it where the state was managing your investments in a
conservative fiscal perspective by a state organization. They were not as conservative as they
implied they would be.
B.
Attorney’s Report – Status of Special District
Bill
Mr. Lyles stated
I briefed you last month on the pending special legislation proposed by Senator
Ring that would have the Broward County Study Commission to review the status,
operations, finances and every other angle of special districts, including this
one, in Broward County. At the
final public hearing, in the face of many objections from various districts and
people interested in the districts, Senator Ring withdrew the bill. There will be no further attempt to put
special districts out of business in Broward County or have them face an
inquisition trying to justify their existence. At least for this year. It is something, which comes up from
time to time. I suspect we will
hear about it again, but for now the bill which would have affected 92 different
special districts in Broward County alone has been withdrawn. We will not have to go through the time
consuming and potentially expensive process.
C. Engineer’s
Report
There being no
report, the next item followed.
EIGHTH ORDER OF BUSINESS
Approval of October Check Registers
Mr. Goscicki
stated you will note we did not include the 20 page financial report this
month. We gave it to you last month
because we wanted to show you we are doing detailed financials. What we are working on now, and Ms. Lusk
as well as Mr. Bloom are taking the lead on this, is coming up with a
meaningful, simplified report, which adds value to the Board members in terms of
being able to look at the financials rather than giving you 20 pages of
detail. We are working on it and it
will probably not be ready for the next Board meeting, but it will likely be
ready for the meeting after that.
If the Board at any time wants to see current financials, you know the
details are available for you. We
did include the check register.
On MOTION by Mr. Gray seconded by Mr.
Mendelson with all in favor the October check register was approved.
NINTH ORDER OF BUSINESS
Supervisors’ Requests and Audience Comments
There not being
any, the next item followed.
TENTH ORDER OF BUSINESS
Adjournment
There being no
further business,
On MOTION by Mr. Mendelson seconded by
Mr. Gray with all in favor the meeting was
adjourned.
David Gray
Steve Mendelson
Secretary
President