SESSION OF THE TOHOPEKALIGA WATER AUTHORITY BOARD OF

SUPERVISORS MEETING HELD WEDNESDAY, NOVEMBER 12, 2003 AT

THE CITY OF KISSIMMEE CITY HALL, COMMISSION CHAMBERS LOCATED

AT 101 NORTH CHURCH STREET, KISSIMMEE, FLORIDA

Present were Chairman Van Meter, Supervisor Moody, Supervisor

Description Wells, Ex- Officio Member Mayor Gant, Attorney Davis, SupervisorArrington, Supervisor Reich, Executive Director Wheeler, Ex Officio

Member Commissioner Owen was absent.

COMMISSION CHAMBERS CITY OFDate , 11/ 12/ 03 Location

KISSIMMEE

TIME ' ITEM MINUTES

6: 00: 29Meeting called to order by Chairman Bruce Van Meter. PM

6: 00: 38INVOCATION

Supervisor Arrington lead the Invocation and Pledge of

PM Allegiance. E

6: 01: 43 ' HEAR THE! None

PM AUDIENCE

6A. RESOLUTION 03- 034 - A. Approval of Minutes

October 22, 2003; B. Cost Proposal from Professional

Piping Services, Inc. for the cleaning of the

CR532/ CR545 Force Main; C. Approval of Purchase of

pipe for the Sandhill Road Relocation; D. ICMA 457

Deferred Compensation Plan — Resolution 03- 035; and

E. Approval of SFWMD Alternative Water Supply GrantContract. Chairman Van Meter asked Brian Wheeler

what guidelines were being followed to place items onthe Consent Agenda. Brian Wheeler stated that he was

6: 01: 55 CONSENT placing the same items that he had placed with the City. PM AGENDA but if the Board felt that the items were not appropriate

Mr. Wheeler would like some feedback from the Board

as to what they would like to see in that category. Typically, the type of thing that would be put on theAgenda would be some purchasing things like bids or avery minor type of purchase. The ICMA Resolution was

a standardized boiler plate type of item. Other items

that would be placed would be things that are prettystraightforward. Things that staff would consider routine

type that are obvious as to what staff was doing. Sunervisor Arrinaton moved for annroval of Resolution

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03-034

Motion

yet).

and Supervisor Moody seconded the motion. passed 4 to 0. ( Supervisor Wells had not arrived

8A. AMENDMENT TO SUPPLEMENTAL BOND

RESOLUTION FOR THE SERIES 2003A BONDS —

RESOLUTION 03-036. At our previous Board meeting, we talked about doing a short term note to buy thereceivables and unbilled revenue from Florida Water

and at that time we talked about getting a bank loan. Supervisor Arrington had requested we investigate

using Commercial Paper, which our financial advisor, Toby Wagner, did and reported back to Brian Wheelerthat a bank loan would be cheaper. Subsequently, afterwe were getting ready to proceed with that, numberscame back from Florida Water on the receivables and

unbilled revenue at a higher level than what our

financial people originally estimated and so when goingback and investigating financing, Toby Wagner had adiscussion with our bond counsel, Robert Freeman and

it came around that in our Series A bonds we had $ 13. 4

million we borrowed as a Construction Fund that we are

not going to spend by the next thirty or forty days butrather is going to be spent over a couple years' periodand it was possible for us to use that 2003A fund to

basically borrow from ourselves to pay that and thenpay back to the Construction Fund. Robert Freeman

looked into that and said that we could do that. That

saved us from having any expenses in turns of

borrowing but we' ll lose a little bit of interest because it' sin a trust account and we will be getting less than 1% interest. This resolution authorizes this change in the

Supplemental Resolution which allows us to borrow the

money from the Construction Fund and then pay backthe Construction Fund as we receive that money. Supervisor Reich moved for approval of Resolution 03-

036 and Supervisor Arrington seconded the motion.

Motion passed 4 to 0.

9A. INTERIM LETTER AGREEMENT WITH KUA-

Resolution 03- 037. This Resolution is related to the

Customer Service Agreement. The Department of,

6: 06: 23 NEW ; Water Resources had contracted with KUA to do our.

PM BUSINESS meter reading and customer service since KUA hasbeen formed. The Agreement expired November 1,

2003 and within that agreement it automatically'. renewed itself and has an 18 month cancellation'

clause. When KUA approached Brian Wheeler about

renegotiating the agreement, Mr. Wheeler felt that therewere too many things on the plate at that time andwould prefer to let the agreement automatically renew, itself until we got Toho on the ground and got past the

Florida Water acquisition. KUA had a concern that with

the Florida Water acquisition and taking on an

additional 11, 000 customers that transition is not a

small job for them to accomplish. They asked if wewould do an Interim Letter Agreement to cover their,

costs of bringing the Florida Water customers into their, billing system and we would then renegotiate a newcontract starting the first of the year. What this contractdoes is say that we will reimburse KUA for thoseexpenses they are going to incur in transitioning FloridaWater customers into their billing system for water andsewer. Most of them are already in their system aselectric customers but they will have to test out thebilling system for water and sewer. ( Supervisor wells'

arrived at this time). Supervisor Arrington. inquired as to

if they bill customers that are not their customers suchas Harmony. They are doing all the customers. Since

1987 they have been billing outside the city. In'

renegotiating the contract we will have to differentiate' cost wise between an electric and a non -electric'

customer. Supervisor Reich inquired about where was

this going long term. I had a new meter installed and ithad a transmitter? Our long term vision is to move intoautomatic meter reading. We are investigating using alow frequency radio that goes into a satellite receiver; that then collects signals from a mile radius and then

boosts those into a central location. This would give

you the ability to read every meter in the system withoutever having to send anyone out to read them. Can read

a meter once a day, twice a day, or on a weekly basis. With our large tourist commercial customers we have

many bill adjustment discussions. As this is not an

inexpensive proposition, we are looking into doing thisas a multi- year phase in type of thing starting with ourmost costly to read meters and most difficult andworking down to our less costly as we go. In our

preliminary discussions with KUA what is going to driveus economically is when they redo the contract they aregoing to charge us higher costs for those hard readmeters which is going to justify going to those metersfirst ani the mPtPrc that ara aaciPr fnr them to rpgd

Mayor Gant stated that KUA had considered going toautomatic read meters but the cost was prohibitive. It' s

I technology for the future. The Authority will find that theworking relationship with KUA will be good. They will goto electronic meter reading sometime also. Brian

Wheeler stated that to cut our cost in the future, meters

going into new construction are the electronic type tmeters so we are not going to have to go back andretrofit. Forty to 50% of our costs in the KUA contract

are for meter reading. There is a cost benefit to KUA

because 60% of our customers are a combination KUA

water and sewer customers. We will be looking at whatother companies such as Severn Trent charge for the

service. Reading the language Supervisor Reich

wondered about the uncapped costs that would be

reimbursable to KUA, it' s kind of open ended. KUA will

have to document before we will reimburse for cost.

KUA has estimated a ballpark figure of $ 30, 000 for the

programming and inputting of records. Mayor Gant

talked about Financial Statements which are provided

to KUA at their monthly meetings and the possibility ofwhen the Authority moves away from the City using JoeHostetler from KUA to teach our employees about

financial statements. Brian Wheeler mentioned that he

has instructed Rick Figueroa to put together some

preliminary type of monthly financial and will be lookingfor feedback that it is in the framework of what the.

Board wants to see. We can look at KUA' s report to

see what kind of details they have in theirs. Rick

Figueroa has been working with one of our in- houseaccountants to help him put together some format to'. present to the Board in December. Supervisor Wells

moved for approval of Resolution 03- 037 and

Supervisor Reich seconded the motion. Motion passed

5to0.

6: 12: 47 NEW

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9B. EMPLOYEE COMPUTER PURCHASE PROGRAM

RESOLUTION 03- 038. The program was started in

1995 by the City and is basically a no interest, revolving' loan that was originally set up to make employees morecomputer literate. Employees can borrow up to $ 2, 500

and is paid back through Payroll Deductions in 36

months. Presently, 25 employees have outstandingloans of almost $ 29, 000 money that will have to be paidback to the City. Brian Wheeler proposed a pool of

about $ 45. 000 for Authority emrnlovees. Emnlovees sign

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up to get on a waiting list and if they don' t get on the listin the quarter then they roll over to the next quarter. Theprogram also features a vacation cash out but

employees cannot cash in all their vacation. Supervisor

Arrington moved for approval of Resolution 03- 038 and

Supervisor Moody seconded the motion. Motion

passed 5 to 0.

9C. APPROVING A GAIN SHARING PROGRAM FOR

THE AUTHORITY — RESOLUTION 03-039. The

program was started in 1997 and only covered Water. Resources employees. It' s an incentive bonus

program, public employees Profit- sharing type program. Once the budget is adopted if we stay within ourrevenue limits and we save money against the budget, 25% of the savings in the budget go into a pool that is

then available for employee bonuses. Each quarter the

employees have a set of performance standards based

on groups of employees, if they are met they get

1$ 125. 00 a quarter. Up to a $ 300 annual bonus and it

i steps down based on meeting the performance

E standards. If the employees meet their performance

standards for all four quarters then they would get themaximum $ 800. 00 bonus. With the City, 25% of the

savings went into the fund for the bonuses another 25%

went to the General Fund for the City and the other; 50% went into Reserve for future capital outlay. A little

history on the program, following 911 no bonuses; andlone year were losing and had exceeded our budget.: Because of a lawsuit of almost $ 1 million combination

payout and legal fees. We had two good years one year

we wrote the City Commission a check for $ 175, 000

and another year was $ 100, 000. The total savings this

past year was $ 250, 000. Chairman Van Meter stated

that the backup references the City of Kissimmee andhe would like that cleaned out - rewrite policy so that itreflects Toho Water Authority. Chairman Van Meter

asked if Brian Wheeler had looked at handing out theannual with the quarterly check. Look at giving thepeople the money sooner, motivation quicker. Brian Wheeler would like to throw it

out to the employees to see what their reaction would

be to Chairman Mr. Van Meter' s suggestion.

Supervisor Reich inquired as to what was meant under

the performance standards for Engineering and

Administration what No. 4 says return phone calls within

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48 hours ( working time). What does working timemean? It means business days. Supervisor Reich

asked that this be changed excluding weekends justcall it workdays. How is this tracked? It' s up to RobertPelham to track with his people. Robert Pelham spoke

to the Board and said that the Engineering Division ismonitored at least once a month. They are on the honorsystem. Supervisor Wells asked that if e- mails could be

added to the performance standards. Supervisor Wells'

commented that if the employees are doing a good jobthey deserve credit but on the Administrative level it ismore difficult to gauge than on the working level whereit is easier to measure. And hopes that it is spread

evenly across the board in giving everybody a fair, chance at getting a bonus. Brian Wheeler' s major

initiative in the coming year is to work more ondeveloping a performance management system withinthe workforce and to be able to develop measurable, performance standards. Mayor Gant - the ideal `.

situation but in government rarely works. You get moreout of your employees if you pay your employees wellbut this needs to be monitored carefully. Does not workin a lot of places. Will be in place one year and gone

the next. Supervisor Reich mentioned tying theamount of incentive as a percentage of salary. Need'

more work on the Administrative side as the standards

are weak. Don' t want it to look like the administrative

employees don' t have as much to hold up to as the fieldemployees. Supervisor Arrington stated the goal of the

program is to save money on the budget not to givethem incentive for good work it' s to give them incentives

to save money. Their reward for saving money is theirbonus and the bonus is given determined on their

performance. Supervisor Arrington moved for approval'

of Resolution 03-039 and Supervisor Wells seconded

the motion. Motion passed 5 to 0.

9D. TRAVEL AND TRAINING REIMBURSEMENT

POLICY. Mike Davis informed Brian Wheeler that there

is a Florida statute that already covers this but did notmake it into the agenda packet. The highlighted areas':

in the Travel and Training policy reflect the changesthat are proposed. The Board by resolution can changethe reimbursement amounts. Per diem to $ 75. 00, $ 10

for breakfast, $ 10 for lunch and $ 20 for supper. Thelegislature recently allowed the deviation and those are

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the ones that are addressed in the resolution. The

Authority under the Special Act provides that the Board' be reimbursed for actual expenses. Supervisor.

Arrington did not agree with the fact that the Board!

would be treated differently than the Authority' employees. Much discussion about having the

reimbursements be different based on location of travel. I

Attorney Davis said that the Board can elect to setlimits. Mayor Gant mentioned that KUA covers their

travel and training with a credit card and this hasworked out very well for them. No alcohol can be

charged on the card. The Board did not see why boardmembers and employees should be given different

standards. There will be some things that the Board

might want to go to which should be put in the Budget

beforehand. One of these would be the International

Water Conference in June in Orlando and the State

Water Resources Conference which is going to be heldin the spring at the Gaylord Palms. Supervisor Wellsrequested a two- week continuance on this Resolution.

Need to look at something that is more reasonable than29 cents for mileage. Reasonable reimbursements for;

tips for meals, taxi cabs, per Mike Davis, the Executive

Director would have the authority to set different ratesfor higher cost areas but does not have the authority todeviate. Supervisor Wells made a motion for

continuance until meeting in December with a two- tier' meal allowance and tips. Only get the per diem if youchoose not to use the actual costs. Supervisor Arrington

seconded the motion. The attorney to bring back theresolution which would treat the employees the same

as the Board with changes for lunch higher amount to

15, and dinner to $ 25 and mileage to 32 cents. Look at

what other entities are doing. Motion passed 5 to 0.

9E. APPROVING A CONSULTANT SELECTION

PROCESS. Staff is looking for some direction from theBoard as to how to select consultants. An outline was

provided as the procedure used by the City. The

procedure begins by sending out an advertisement for, qualifications outlining the specific type of engagementwe were looking for, accepting the submittals from thedifferent consultants then using a staff committee which'. was composed of staff members of the department or in

this instance will be Toho Water and then some other

staff members from other denartments tvnically the

Airport, Public Works or Community Development.

Somebody who had some knowledge of what we weredoing and could provide good feedback. Reviewing thequalifications, short listing an interview pool of

anywhere from three to six depending on the number ofselections and then going through an interview processand then ranking and short listing the top three andbringing those in to the City Commission for approvaland when the City commission approved that list beginnegotiations with the top ranked firm and work your waydown. Question was posed if the Board wanted to

continue to use the same process as the City orwhether they would want a different process or modifythe process. This is what staff is seeking direction fromthe Board on. The following questions were posed, When staff short lists do they also rank? Yes Are

rankings discarded before the presentation? Yes. What

is meant by numerical scoring? Staff has a checklist

and we assign so many points to different areas. Eachcommittee member would independently score andwhen they do the ranking take their numerical scoreand use it? Do you use the numerical score or the

numerical ranking? Is it done by category? There was

some discussion about the numerical ranking. Board

wanted to know if there was any room for citizenvolunteers to assist in the process? Mayor Gant

suggested that it be kept within staff to begin with.

Discussion then turned to RFPs. The biggest issue with

the RFP is the cost issue. The Board would like to be

advised beforehand when we are going out for bids. Try to adjust the size job with the firm. Try to rotate thefirms that we work with and try to use one from OsceolaCounty. The Board would like the process to be asfollows: Use a 5 -member committee, keep committeeinternal, and use one ex -officio member. Supervisor

Arrington moved for continuance of the Consultant

Selection Process until the next meeting and SupervisorMoody seconded the motion. Motion passed 5 to 0.

9F. TRANSITION AGREEMENT WITH FWSC -

RESOLUTION 03- 040. Florida Water Services

7: 42:07Corporation will continue to bill the customers and wire

PM the money to us. This will continue until December 31 stand then at the beginning of the year will turn it over toKUA. The services will cost us $ 29, 000 a month. One of

the areas of concern is that customers apt aood

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customer service. We are in the process of running anad to let customers know about the transition. Toho will

advertise with Telemundo, Osceola Star, and will be

mailing a flyer to all the customers. In the advertisingconcerning the transition, will be numbers that

customers can call; 7am to 5pm to our Field Operations

and after hours will be the KUA number. Supervisor

Wells moved for adoption of Resolution 03- 040.

Supervisor Arrington seconded the motion. Motion

passed 5 to 0.

NEW VEHICLE PURCHASE - Executive Director.

Wheeler discussed the purchase of a new vehicle.

Background on this purchase was that TWA had

negotiated with FWSC for the purchase of five vehicles.

One of the service trucks had a bad transmission and

high mileage. Due to these problems, TWA chose not

to purchase that vehicle and was faced with the need to

purchase a new service vehicle. Under the State

Contract, the vehicle would cost $ 25, 008 but would take

from four to six months to deliver. Staff checked with

4 Coggins Chevrolet who had a vehicle that we couldpurchase for a price not to exceed $ 26, 600 and be

delivered within 10 days. Supervisor Wells moved for,

item to be put on the agenda and Supervisor Arrington

seconded the motion. Supervisor Arrington moved for

approval to purchase new vehicle not to exceed

a $ 26, 600 and Supervisor Reich seconded the motion. Motion passed 5 to 0.

FDOT 17/ 92 DEPOSIT — This item might not require

Board action. DOT is getting ready to do improvementswith 17- 92 north of the Orange County line and thenfrom the Orange County line to Osceola Parkway. As

part of that, when DOT is doing a road project we enterinto a JPA which is a joint participation agreement

which allows our utility work be done by the DOTcontractor. Typically, it is much more efficient to thatthan to have the road contractor do the utility work.: DOT has a very set of guidelines that are very narrowas to how to have things done, very inflexible. The waythe process works, they design the work for us, they getan estimate of the price and then before they bid the' project we have to send the money and they hold themoney with a contingency and they pay out of that andthen if there is any money left over they send it back to. us. We do earn interest on it. After thev bid the nroiect_

i

if their estimate was wrong we have to send them moremoney and if they use the contingency they estimate' what it' s going to take to finish the job and then we send

3

them more money. There is no flexibility in the process. When the School board was ready to open up theSchool for the Arts it turned out that they did notadequate fire protection for the school. The line that

was out there would not meet the fire code

I requirements for fire protection for the school. In the

improvements with 17- 92 we were going to run a 16" water line up to have more fire flow to Tupperwarebefore it became the school and then also to provide a

future interconnection with Orange County and merge

E the interconnection with Orange County at the OrangeCounty line. The School Board asked us if we could

move up the construction of that line back in thesummer so we could get the line in to provide the fire

protection so the school could open on time. We went

to DOT and said this is what we want to do and they, agreed. So we bidded out as a separate project got the

water line constructed and made it just about on time to

get the school opened. It cost us about $ 200, 000.

DOT had told us that they would take that work out ofthe contractor since they had already gotten their bidsset up back in the summer, they had to bid the entireproject and we had already sent our money in. The

only way we could get our money back was if they wereJo bid and then later on give us our money back. It

turned out that their bids came in over what their

estimate was and then they wanted an extra $ 56, 000'

and we already have twice as much money in their' hands as what it is to cost them the portion of the

project that is left. We have been arguing with themwhy should we send them more money. And they havebeen citing the rules that the rules say we can' t write achange order to give your money back until we awardthe contract and we can' t award the contract till we

have all the money in hand. We' ve gotten Don

Smallwood involved to try to argue with DOT over thisissue and so DOT will agree if we send them $ 50,000'

for now and then give us the $ 6, 000 later. Brian'

Wheeler has told Robert Pelham that he wants to fight'

with them. Brian Wheeler does not want to just write'

them a $ 56, 000 check. It is ludicrous to give another'

56, 000 when they already have an additional

onn nnn that thav ( Inn' t Pvan nPPd rinht nnw What'

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Mr. Wheeler proposed to do is to continue to fight with

ahem. If we lose out, then we would send them the

50,000 so they would go ahead and award thecontract and get the job going. For right now there is no

reason to send them any more money. Brian Wheeler

wants to continue to negotiate. Mr. Gant said that the

person they need to be talking to is Mike Snyder, bossEof the district. If you go to the boss of the district and he

says that he is not willing to bend the rules then youshould go ahead and pay the monies.

CANCELLATION OF NOVEMBER 26 AND

DECEMBER 24 MEETING. Supervisor Arrington

moved for cancellation of the November 26th and

December 24th meetings. Supervisor Wells seconded

the motion. Motion passed 5 to 0.

Brian Wheeler is going to look into moving our 2ndmeeting date to another day of the week because itpresents a conflict for Mayor Gant. Will bring backsome alternatives and let the Board decide as to

whether they want to do that or not.

Strategic Planning Session. Brian Wheeler would likethe Board to meet with Senior Staff sometime in

January and would suggest a Saturday morning orafternoon and take a three or four hour time to have a

big picture strategic planning because staff will begetting ready to enter into the budget process and thestaff would like to get the benefit of the Board' s ideas

and direction on where you see the Board going andthe Board could see where the Senior Staff is going. Maybe get a facilitator. Supervisor Wells suggested

having it in a different room/ different format. Board

agreed. Tours for the board to see some of our

facilities. Two half days for tours; one in January beforethe Strategic Planning and one in March.

REPORT ON OUC WATER USE PERMIT

CHALLENGE — Brian Wheeler gave a brief overview of

the Water Use Permit Challenge by OUC. OUC filed to Eintervene in the process. Lake County feels that OUCwill be taking their water. COK/ TWA did not have anytechnical basis to oppose the permit. The intervention

by the City of Kissimmee and the County is not that theyare intervening; however, if you are not part of the

hearing process then you cannot step up and object.

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REPORT ON WATER SUPPLY PLANNING — Brian,

Wheeler gave a brief overview on this subject. Orange

County did not look at the 20 -year demand from othersystems. SJWMD did not look into this. On the ten-year'

planning, DWR had a continuing contract with CH2MHill and Staff would like to continue this contract. Brian

Wheeler recommended to the Board that CH2M Hill

perform this segment of the process.

Chairman Van Meter commended Toby Wagner,

Financial Advisor for a job well done.

There being no further business to come before theboard, chairman van meter adjourned the meeting at8: 20 pm.

ADJOURNED

Chairma

I Bruce N. VantMeter

Secretary: Jobpt. Moody

E.