MINUTES OF MEETING

NORTH SPRINGS IMPROVEMENT DISTRICT

 

            The regular meeting of the Board of Supervisors of the North Springs Improvement District was held on Thursday, November 9, 2006 at 4:30 p.m. at the District Office 10300 N.W. 11th Manor, Coral Springs, Florida.

 

            Present and constituting a quorum were:

 

            Salvatore Mendolia                                           President

            Steve Mendelson                                              Secretary

 

            Also present were:

 

            John Petty                                                        Manager

            Dennis Lyles                                                     Attorney

            Jane Early                                                         Engineer

            John Carter                                                      WCI Communities, Inc.

            Warren Craven                                                 Tousa Homes

            Jason Engleman                                                Tousa Homes

            Paul Brewer                                                     Paul E. Brewer & Associates

            John McKune                                                   Consultant

            Jean M. Rugg                                                   Severn Trent Services

            Janice Larned                                                   Severn Trent Services

            Sandra Demarco                                              Severn Trent Services

                                                                                               

FIRST ORDER OF BUSINESS                               Roll Call

            Mr. Mendolia called the meeting to order and Mr. Petty called the roll.

 

SECOND ORDER OF BUSINESS                          Approval of the Minutes of the October 11, 2006 Meeting

            Mr. Petty stated each Board member received a copy of the minutes of the October 11, 2006 meeting and requested any corrections, additions or deletions.

            There not being any,

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor the minutes of the October 11, 2006 meeting were approved.

 

 

 

 

 

THIRD ORDER OF BUSINESS                             Consideration of Release of Canal Reservations

            A.        Heron Bay North Plat 1

            B.        Heron Bay North Plat 2

            Ms. Early stated this is a typical release of easements.  We review them when new development is taking place.  There is a recommendation letter in the agenda.

            Mr. Mendolia asked has this been processed through the system?

            Ms. Early responded yes.  They send it to us to verify we will not have a problem.

            Mr. Lyles stated the end of the process is for you to approve it after staff has reviewed it and made recommendations.

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor the release of canal reservations for Heron Bay North Plat 1 and 2 were approved.

 

FOURTH ORDER OF BUSINESS                          Consideration of Change Orders

A.        Change Order No. 1 with Triple R. Paving for Parkland Village Drainageways for a Net Increase of $15,005

             Ms. Early stated if you recall, we did the lakes for the Parkland Village development in May.  This change order is for new criteria.  We need to install fences as required by NPDES.  A portion of it will be Tousa Homes’ cost and a portion of it will be NSID’s cost.  The NSID portion will be $6,300.

            Mr. Mendolia asked did you know about this?

            Mr. Petty responded no sir.  Parkland Village is an area being undertaken by Tousa Homes.  We approved them as an inheritor of WCI Communities, Inc.’s arrangement with us for funding.  They are doing the work out there and I believe this has to do with a funding agreement.  We do not have any money to pay for this. 

            Ms. Early stated this change order is incorporating the NPDES requirement for stormwater prevention.  They need to have sediment control for the existing catch basins around the system.  They need to have wash areas for the trucks when they enter and leave the site.

            Mr. Petty stated because we granted Tousa Homes the same privilege of working with us on funding agreements, if they get a change order they bring it to our attention for approval.  The intention is at some point we will issue bonds for this particular parcel in which these types of projects, certified by the engineer and approved by the Board, will be paid for.  The funds are not coming from us now, but we are committing to them.

            Mr. Lyles stated they will not come from your general revenues.  If and when we close on the bonds you previously authorized, it will be paid for from that particular area.  It will come out of bond proceeds.  At this point you are agreeing to work cooperatively with them.  The financial risk is the developers.  It will never become a general obligation of the District.   

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor Change Order No. 1 with Triple R. Paving for Parkland Village drainageways for a net increase of $15,005 was approved.

             

B.        Change Order No. 2 with National Home Building and Remodeling Corporation for a Net Increase of $41,950

            Mr. Petty stated this is our contractor working on The Commons.  The contractor miscalculated the shingles and roofing materials.  He is asking for a change order after checking his calculations.  The engineer recommends we approve the change order.  This is an honest mistake.  He is openly admitting his fault and agrees to abide by our decision.  The roof will be paid for by our insurance carrier and FEMA funds.  Our concern is he will cut back on quality if we do not approve the change order.

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor Change Order No. 2 with National Home Building and Remodeling Corporation for a net increase of $41,950 was approved.

 

FIFTH ORDER OF BUSINESS                               Consideration of Permits

            A.        Rayel Estates

            Ms. Early stated this is a typical surface water permit.  It is a re-submittal.  When they do a development they have to submit for a drainage permit.  We have to go through the calculations and make sure they meet requirements. 

            Mr. Mendolia asked why was this not done sooner?  Houses are being developed in the area.

            Ms. Early responded I was not aware of this.

            Mr. Petty stated they are not supposed to be able to pull a building permit until they get our approval for a drainage permit. 

            Ms. Early stated they cannot get a stamp until they have a permit from us.  I do not believe they can develop without this permit. 

            Mr. Petty stated we will check and make sure he has not started construction. 

            Ms. Early stated I will go over there.  I do not see how he could have pulled a permit to start building without our permit. 

            Mr. Brewer stated they started constructing houses. 

            Ms. Early stated the City of Parkland needs to issue them a permit.

            Mr. Brewer stated they did. 

            Mr. Petty stated we need to talk to the city and make sure our process is put in there so they do not give permits without our drainage permits.  Our permit should be part of their checklist before issuing a building permit. 

            Mr. Mendolia asked do you want to table this?

            Mr. Petty responded I would hold off until we find out what is going on.

            Mr. Mendolia stated I agree.

            Ms. Early stated there is no problem with the permit application.  They meet the criteria. 

            Mr. Lyles stated there seems to be a miscommunication or a gap at the city in processing the permits they issue.  There is no problem with the application before you for which you have jurisdiction.  With the engineer’s positive recommendation you can approve it.  Staff has indicated we will get to the bottom of the problem with the city.  If we hold this up, it is possible the city will red tag the project when we go to the city.  The applicant did not do anything wrong.  I feel with Ms. Early’s commitment to talk to the city, you can approve the application before you today. 

            Mr. Petty stated I agree with counsel and I do not want to hold anyone up.  A great deal of this is done in faith.  When they submit an application we assume they are doing so honestly and according to our criteria.  The plans Ms. Early reviewed are on fair ground.  It will now have to be as built conditions.  The calculations before you build and after you build, change.

            Mr. Brewer stated the number of houses is calculated in the design. 

            Mr. Petty stated I suggest we give approval conditioned upon the engineer’s further review. 

 

On MOTION by Mr. Mendolia seconded by Mr. Mendelson with all in favor the permit for Rayel Estates was approved pending further review by the engineer.

 

 

 

            B.        Revised Plans for Elementary School ‘Z’

            Ms. Early stated this is the elementary school on the southwest corner of University Drive and Trails End.  They made revisions to their plans and resubmitted them.  We reviewed the calculations and recommend approval of the permit.

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor the revised plans for Elementary School ‘Z’ were approved.

 

SIXTH ORDER OF BUSINESS                              Staff Reports

            A.        Manager’s Report – Bids for the Purchase of Light Trucks

            Mr. Petty stated we put out competitive bids for trucks.  In the past we leased them.  Leasing costs have crept up year after year.  The prices have become so high, it is less expensive to buy.  We put them out to bid and the price is phenomenal.  We recommend award of bid to the lowest responsive bidder, which is Plantation Ford. 

            Mr. Mendolia asked how many?

            Mr. Petty responded we are looking to purchase two.  If we need more, we will come before the Board.

            Mr. Mendolia stated it is a good price.

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor the bid for purchase of light trucks was awarded to Plantation Ford in the amount of $14,688.75 for a 2007 Ford Ranger and $16,299.75 for a 2007 Ford F150 4x2.

 

            Mr. Petty stated I have a slide show for you.  This is informational only.  We are not asking for action at this time.  We will ask you for direction.  It has to do with Heron Bay.  This is a recent issue brought to us by our engineer.  We received a call from WCI Communities, Inc. approximately two days after our recent bond issue.  They told us they are going to stop some contracts or slow down.  We just closed on the bonds with an absorption schedule, which did not anticipate a slow down. 

            Funding comes from a close interaction between ourselves and WCI Communities, Inc.  We look to them for part of the funding because we want a completed development where people can live.  It is what substantiates the assessments on the lots and secures our long term debts.  We have a close knit partnership with WCI Communities, Inc.  When they change their development timeframe we also look to it. 

            The issue is there is a change in development status.  It is not a big change in the industry.  We always had hot times and cold times.  We are currently in a cold time.  WCI Communities, Inc. is looking to slow down or stop and we discussed whether the District should slow down or stop its corresponding contracts as well.  Will WCI Communities, Inc. participate in further funding?  If due to an industry wide slow down, should the District continue with the Parkland Village Bond?  We are going forward and we wanted you to know it.  We will carefully move ahead with your permission.  If we are in a material slow down in the industry, Tousa Homes may ask us to slow down in the future as well. 

            We planned approximately 852 units in this bond issue.  There are 102 units sold.  There are 164 units in construction and they are near completion.  There are 336 units completed, which is WCI Communities, Inc.’s inventory to sell.  There are approximately 250 undeveloped units.  This will put over 500 units in WCI Communities, Inc.’s inventory.  We have a bond issue out to make ready if WCI Communities, Inc. completed there part of the financing as well. 

            We talked with WCI Communities, Inc. and their slow down/stop will affect the areas known as the 50’s, 65’s and 75’s.  The other areas should be completed because we are so far along, it will be silly not to complete them.  The money in the bond funds will sit until the period of time until the market changes or until such time actions are required by the bond.  We do not want to get ahead of WCI Communities, Inc.  We want to be shoulder to shoulder as they go along.  They do not want excess inventory because if we put the money in the ground, assessments will hit them hard.  If the money can sit and earn interest, it will offset these costs.  There are limits to how far we can go, but it is what we would like to do. 

            We have the issue of Parkland Village, which is Tousa Homes.  They are doing their work and planning ahead.  We have a bond issue planned for them and our underwriter is actively going ahead.  Staff is working with the engineer  and would like to work with the underwriter as well as the developer.  We want to discuss their schedule.  We do not want to do a bond issue prematurely and have their timeframe shortened in a soft market.  If you concur, staff will work with counsel to work with our contractors in order to slow them down to the same pace as WCI Communities, Inc.  We will do it through negotiation and will follow up by change order.  If it is felt the contract should be cancelled, we will need to come back to you for consideration because there will be costs and concerns.  Mr. Lyles and I had a brief discussion about it.  We would like your permission to talk with the contractors and negotiate a slower schedule. 

            Mr. Mendolia asked did you have a meeting with  WCI Communities, Inc. and Tousa Homes in reference to Parkland Village?

            Mr. Petty responded we have not met with Tousa Homes, but we did meet with WCI Communities, Inc.  This happened recently.  It is a soft market.  Because WCI Communities, Inc. is a public player open in the stock market, they are getting battered.  We wanted to check with them first.  Tousa Homes has not spent a great deal of money.  They are starting on their earth work. 

            Mr. Mendolia stated we still need to talk with them.

            Mr. Petty stated yes sir. 

            Mr. Mendolia stated if any problems come up, we will discuss them. 

            Mr. Craven stated I represent Tousa Homes on this project.  Our plan is to move at the pace we originally discussed.  We are actively finishing the infrastructure plans and hope to have them out to bid within the next 30 days.  We do not anticipate a slow down at this point.  We would like to sit down with the District Manager as well as the  bond team to go over details because we would like to proceed with the bond issue.  It sat in limbo waiting for permits.  We now have all the permits to start working.  We would like to move forward. 

            Mr. Mendolia stated there may be a problem because they are not WCI Communities, Inc.  They want to go full speed ahead.

            Mr. Petty stated it is set up so the land receiving the benefits pays for it.  The risk is borne by the landowner. 

            Mr. Carter stated I am the Vice President of Development for the east cost for WCI Communities, Inc.  They have a blank slate and are coming off the ground.  We have over 2,300 units in Heron Bay.  We have a backlog in place and we would like to see some of the inventory move before we commit to adding to the inventory.  Tousa Homes is coming off the ground and they do not have this situation.  We do not want a complete shutdown.  Our desire is to look at this on a phase by phase situation.  We will work with the District and the contractor. 

            Mr. Mendolia stated it is fine with me.

            Mr. Craven stated I agree we are in different situations.  I will call next week to set up a time.

            Mr. Petty stated that will be good. 

 

            B.        Attorney

            Mr. Lyles stated we met the deadline and had the final version of our amendment to the special act filed with the Broward County Legislative Delegation.  We did not get a sponsor for our bill yet because of the elections.  We are working on getting sponsors and so far it is smooth sailing. 

            I want to go back to the matter Mr. Petty brought to your attention regarding the two developments, the assessment areas and the bond issues.  He brought this issue to me approximately 10 days ago.  I had a number of calls with bond counsel and Ms. Early.  We are on this to make sure it is handled in a correct way.  We have certain potential downsides to terminate or slow down the project.  If we negotiate something with a little cost involved, it will come out of the bond proceeds. 

            The key thing is to not have something happen, which is a benefit fault or a material change we have to report to our dissemination agent as well as the investment community.  We have a schedule, which carries through 2009.  We see no indication from WCI Communities, Inc. that the overall schedule will not be met.  It may not be as front loaded as originally anticipated.  There is a three year period you can run into trouble with arbitrage and lose some interest earnings, but the risk is with Tousa Homes and WCI Communities, Inc. 

            The properties they own are the source of the assessment payments to retire these bonds.  If the program is slower, it is their choice.  They will be writing a check to the District to pay these assessments as opposed to a future homeowner.  Although it is unusual to bring this to you and point this out, it is being carefully reviewed.  Bond counsel knows if certain things fall through, it has to be the subject of a report through the investment community.  There is no reason to tell you there is trouble.  It is an adjustment we are going to make on your behalf and if anything happens, it will come before you. 

 

            C.        Engineer

            Ms. Early stated I have to discuss the mitigation bid we were doing with WCI Communities, Inc.  The existing mitigation area in Heron Bay is not up to standards.  They have died off and have not been taken care of.  There are additional mitigation areas they have to build.  We had meetings with Mr. Carter regarding the cost.  He agreed to a 50/50 split to cover the costs because the District had a contract with the maintenance company to maintain the mitigation area and it resulted in some loss .  We bid the project.  Miller Legg’s estimate was $280,000.  I had one bid for $688,000. 

            Mr. Petty stated our recommendation is to reject the bid. 

            Ms. Early stated I talked to Miller Legg.  He will revisit his plans and possibly make them more detailed.  There may be some things they did not understand.  We might have a pre-bid meeting as well. 

            Mr. Mendolia asked were you aware of this?

            Mr. Petty responded we accepted this approximately 10 years ago.  WCI Communities, Inc. built it.  It was one of the first conditions of the county to put plants in the water management system.  The District hired a contractor to maintain the plants.  No one replaced any of the plantings as they died off.  WCI Communities, Inc. did not get their permit approval at the time.  The county came out and looked at the mitigation area, which does not look good.  I talked to you about this during the budget process.  We have money in the budget to do this.  WCI Communities, Inc. was doing the bid specifications with the engineer.  The problem is Ms. Patton was doing this and she is no longer with WCI Communities, Inc.  We need to discuss this with her replacement.  We need to re-bid this and stay within our budget. 

            Mr. Mendolia asked do you need us to do anything?

            Mr. Petty responded we need you to reject the bid. 

           

On MOTION by Mr. Mendolia seconded by Mr. Mendelson with all in favor the bid received for the mitigation area in the amount of $688,000 was rejected.

 

            Ms. Early stated I have one more item regarding the insurance claim for the clubhouse.  The original claim Travelers wanted to give the District was $83,103 minus the $50,000 deductible.  We received a check for $33,000.  Early public adjusting has it up to $182,000.  Travelers agreed to this number.  We are trying to get an additional $10,000.  They agreed to $182,000, which means minus the $33,000 check we received as well as the $50,000 deductible we will receive a check in the amount of $99,315.

            Mr. Mendolia asked is this subject to approval?

            Mr. Petty responded this is just for status.

            Ms. Early stated I received the final plans for the tennis courts today from the architect.

            Mr. Petty stated we are progressing slower than we hoped, but we are doing well by other people’s standards. 

            Mr. Mendolia asked will we have something by next month?

            Ms. Early responded it depends on what we want to do.  I can get a bid from the contractor currently working on the clubhouse.  I am having trouble getting bids. 

            Mr. Petty stated in the past the Board directed us to bid this as soon as possible.  We were waiting for the site plan approval from the City of Coral Springs before bidding it because we needed to know what the layout was going to be.  Now that we have it, you gave us instruction to put it out to bid as soon as possible for all four courts subject to funding.  It is our job to get funding for you by the time you award the bid. 

            Ms. Early stated I have to do the specifications and I do not know if I will have it for the next meeting. 

            Mr. Mendolia asked why can we not submit the architect’s plans for the bid specifications?

            Ms. Early responded I can get a quote from the contractor who is currently working on the clubhouse. 

            Mr. Petty stated our normal procedure is to advertise the bid.  Tennis contractors are well known in the area.  I see no reason why we cannot invite them to bid.  It may help out the process, but we are still stuck with 30 days.  We will put these out to bid as soon as Ms. Early finishes the specifications.  We will hopefully have it at the next meeting.  If not, we will have it the soonest possible. 

 

SEVENTH ORDER OF BUSINESS                        Approval of Requisitions and Invoices

            There being no questions or comments,

 

On MOTION by Mr. Mendelson seconded by Mr. Mendolia with all in favor the requisitions and invoices were approved.

 

EIGHTH ORDER OF BUSINESS                           Supervisor’s Requests and Audience Comments

            There not being any, the next item followed.     

 

 

 

 

NINTH ORDER OF BUSINESS                             Adjournment

            There being no further business,

 

On MOTION by Mr. Mendolia seconded by Mr. Mendelson with all in favor the meeting was adjourned.

 

 

 

 

                                                                         

 Steve Mendelson                                                            Salvatore J. Mendolia

 Secretary                                                                        Chairman