Ken Davis, Director of Engineering, accepted Mr. Depascale's service award, a 7-piece wine carafe, with the members' appreciation.

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1 Page 996 MINUTES OF REGULAR MEETING of KISSIMMEE UTILITY AUTHORITY HELD WEDNESDAY, APRIL 28, 1993, AT 6:00 PM, BOARDROOM, ADMINISTRATION BUILDING, 1701 WEST CARROLL STREET, KISSIMMEE, FLORIDA Present at the meeting were Chairman Hord, Vice-Chairman Gant, Secretary Bobroff, Assistant Secretary Lowenstein, Director Jones, Mayor Pollet, Attorney Brinson, President & General Manager Welsh, and Recording Secretary Rundio. A. MEETING CALLED TO ORDER at 6:00 PM by Chairman Hord. B. AWARDS AND PRESENTATIONS YEAR SERVICE AWARD - WILLIAM GROOVER Mr. Welsh introduced Bill Groover who began working with the City of Kissimmee as a Lineman's Helper on April 29, He will be celebrating 30 years of steady employment with the electric utility system. He emphasized "steady employment"... who, in those 30 years, has not missed a day's work! To report for work is part of his steadfastness and nature to get the job done. Bill advanced to Apprentice Lineman in November 1964 and to Lineman in May In October of 1984 Bill was promoted to Foreman on a Line Crew; he is a very hard working and productive employee. His family was present for this honor. Bill has also contributed significantly to the community and working with his Church Youth/Mission group assisting in rebuilding churches in Florida, especially helping rebuild the electric system in the City of Homestead after Hurricane Andrew. To quote Bill's Supervisor, "Bill is easy going with a great sense of humor, and having a talent to bring light even to the darkest of times. His co-workers have great respect for Bill." He is an asset to KUA, his family, church and community. Bill, we're very proud to have you with us! The Board members congratulated Bill and he was presented with a gift of his choice, a solid brass revere bowl. General Manager Welsh also presented Bill with a Discretionary Award of one day off, with pay, for perfect attendance YEAR SERVICE AWARD - ROBERT DEPASCALE Mr. Welsh stated that Bob Depascale, SCADA/Communications Technician, was attending the SCADA Factory Acceptance Test in San Jose, California and was unable to be present for his award. The System is undergoing testing which he is overseeing. Ken Davis, Director of Engineering, accepted Mr. Depascale's service award, a 7-piece wine carafe, with the members' appreciation YEAR SERVICE AWARD - MARIA MERCADO Maria Mercado was unable to attend tonight's meeting due to a previous commitment of attending her daughter's school function. Ms. Beck accepted the gift of a 7-piece beverage set in her stead to be presented to Maria later. The Board expressed best wishes to Maria on her contributions to KUA YEAR SERVICE AWARD - NEVILLE TURNER Neville Turner, Director of Personnel & Risk Management' has served KUA in many and varied areas for five years as a steadfast and loyal employee. Mr. Turner reports to Mr. Welsh, who acknowledged his dedication and professionalism over the years and expressed his thanks to Neville.

2 Page 997 The Board members also extended congratulations and best wishes to Mr. Turner and presented him with a 5-year service pin. 5. EMPLOYEE OF THE MONTH - LARRY CROUCH Larry Crouch, Meter Reader, was also unable to be present for this auspicious occasion because of another auspicious occasion--the birth of their baby girl recently! Larry was nominated and elected by his fellow employees as Employee of the Month for May. He is an outstanding employee, and reads a large number of meters on a daily basis with great accuracy. He willingly assists his co-workers in finishing their routes. Congratulations are certainly in order on both occasions and we wish Larry and his wife much happiness on this future KUA customer! Chairman Hord asked Ms. Beck to present Larry with his plaque and a $100 Savings Bond, advise him of a day off with pay, as well as having access to a "reserved" parking space during May. C. HEAR THE AUDIENCE D. PUBLIC HEARING - None E. INFORMATIONAL PRESENTATIONS (REQUIRING NO ACTION) F. OLD BUSINESS 1. BOGGY CREEK SUBSTATION PROPERTY OFFER To recap, we have been evaluating two potential sites for the Boggy Creek substation - one on Boggy Creek Road, the other on Osceola Parkway, as detailed in the Agenda Item. Mr. Ken Davis stated that the feasibility to do the transmission construction on Osceola Parkway was ruled out. By the Board's earlier direction, our concentration turned to the Boggy Creek parcel in detail. An appraisal was done by and received from the firm of Clayton, Roper and Marshall. The market value for approximately five acres is $620,000. The selling price offer is $410,000. A Phase I Environmental Audit was performed and no problems were found with the property. The feasibility analysis from an Engineering standpoint indicates the parcel is suitable for a substation, assuming it is permitable by various agencies. Construction is not planned until approximately Mr. Davis said a slight concern might be the permitting between now and construction time. The Attorneys representing the owners of parcels H and J, immediately behind the parcels we are examining, stated that they felt there was an implied grant of right-of-way required due to the owners being landlocked because of how the parcels were foreclosed. We might be obliged to sell them a right-of-way across the property, but we don't foresee that happening. Another party was interested in purchasing part of the property from us. About two acres would remain from that to be used for the substation, but more research may need to be done on drainage requirements, retention, etc. Brief discussion followed on the impervious areas required by the County, and whether heavy crushed rock (pervious) might be used to avoid using retention ponds.

3 Page 998 Mike Simpson, Black & Veatch, stated that semi-pervious rock for surfacing can be used, and is accepted by the permitting agencies. He said the permitting environment is constantly changing so this is a small concern in connection with selling a portion of that land in perhaps restricting our ability to permit the property in the future, Chairman Hord asked what the limits were in permitting. Mr. Simpson said there are generally no limits. Its possible to do clearing one year, installing a fence the next year, etc. to keep the permitting effective and in good standing. There are construction time restraints for completing a project. Chairman Hord thought it might be a good idea for us to go through the motions and expend a limited cash flow and some construction to stay within the required limits. Director Gant said many construction firms do this kind of limited work. Mr. Welsh felt we could do this also. Mr. Davis said if we do have the substation tied down, our longest time frame would be for the transmission right-of-way so some of this preliminary work could be done. Attorney Edward Brinson stated, for the record, that the owner has been put on notice by the so-called "landowners" east of us. He asked if there was any problem if we should sell or be required to furnish them a right-of-way to be able to still site the substation. Mr. Simpson said it depended on how much land we would want to sell to a third party. Brief discussion continued. Mr. Davis said we entered into a purchase agreement with the Bank on this property. If we do not give them indication that we do not want the property, we're basically buying it and will require setting up a closing. May 1, 1993 is the deadline for giving them notification and he did not feel we required an extension. Motion by Director Jones authorizing staff to proceed immediately with the steps necessary to purchase the Boggy Creek property for the total selling price of $410,000. Further, authorize a transfer of funds in the amount of $410,000 from Reserve for Future Capital Outlay. Seconded by Director Lowenstein. In response to Director Lowenstein's inquiry, Mr. Brinson said that KUA cannot mortgage the property. Director Gant declared a conflict of interest and filled out a Conflict of Interest Form 83 (attached to the Minutes). G. NEW BUSINESS Motion carried 5 - O 1. AGREEMENT WITH THE CITY OF KISSIMMEE FOR THE USAGE OF EFFLUENT AND DISCHARGE OF WASTE AT CANE ISLAND Mr. Welsh stated that we will be able to utilize the City of Kissimmee's wastewater effluent for cooling at Cane Island, rather than using ground water. The wastewater would then be discharged back into the City's effluent pipeline. Lengthy negotiations over nine months have been held between Black & Veatch, the City s Water and Sewer Department and our staff. The City Commission has approved and executed the agreement on April 20, 1993.

4 Page 999 Mr. Ben Sharma, Director of Power Supply, cited that this effluent would be used for Unit 2. He highlighted the process that will take place and stated that Florida Power Corporation has accepted the fact that we have first right-of-refusal for the effluent. Attorney Brinson has reviewed the agreement as to form and legality; Black & Veatch and staff are also satisfied. Three agreements have been signed pertaining to this effluent: one is between the FPC and the City; another is a letter of agreement between FPC and KUA, and this agreement between the City and KUA. We have also contracted for first right of refusal, so that the City cannot or will not contract away the use of this effluent without first coming to us with an offer. Motion by Director Bobroff approving the agreement with the City of Kissimmee for the usage of effluent and discharge of waste at Cane Island; and further authorize the Chairman and Secretary to execute the same. Seconded by Director Lowenstein. Motion approved 5 - O B. STAFF REPORTS 1. MONTHLY PROGRESS REPORT ON ENGINEERING PROJECTS The report was accepted as written. 2. CONDENSED FINANCIAL REPORT Mr. Joseph Hostetler, Director of Finance, gave a presentation on the Financial Report, as included in the Agenda Item. Chairman Hord stated he assumed during the upcoming budget in 1994 we will take into account the trend seen in 1993 and also the fact that whatever money we do have invested with little return on it will certainly affect the bottom line under interest income. Mr. Welsh explained how we do our forecasting. Director Lowenstein inquired how the rental monies from the second floor offices of 8 Broadway are being utilized. Mr. Welsh said that money goes into a General Fund. Director Lowenstein then asked if we have considered leasing out the third floor of this Administration Building. Mr. Welsh said we could but it would entail renovations and improvements, the type of leasing necessary to warrant it and numerous other considerations should be noted. Chairman Hord thought Director Lowenstein's point a good one, that this is a capital asset and could be utilized. He suggested it could be leased in its present unfinished state to our mutual agreement. Discussion followed on various scenarios. Staff's intentions had originally been to use the third floor space for future expansion; however, staff did state that we don't anticipate needing it for perhaps 10 years. Director Bobroff suggested we retain our flexibility by leaving the remaining portions of this building unfinished, that leasing it may hamper our future plans. Director Lowenstein said this was only a suggestion for future consideration. We might approach the city, county, the school board or state agencies, all with the same type of make-up as this utility. This would reduce taxes. Tax ramifications were discussed. Mr. Welsh stated its the City Commission's prerogative, as written in their and the KUA charter, that a motion by the City Commission would require KUA to assume responsibility for any other City utility.

5 Page 1000 Chairman Hord estimated the revenue to be about $120,000 a year unimproved if you can find a tenant and its worth pursuing. It entails about 20,000 sq.ft. Director Jones strongly felt the vacant space should be leased since we have no present need for it. Director Gant felt it might be to our financial advantage without getting taxed on it and that maybe we should pursue this. Chairman Hord stated we should package it (with a plan showing parking area, security gates, layout of general area, etc.) to the entities mentioned above, or others. Mr. Welsh thought maybe we should check out the space planning projections first to see if leasing is justified. The members concurred. Director Gant's suggestion was for us to design the third floor for future use and use the design to lease it to someone. At the end of ten years it would be paid for. 3. MONTHLY REPORT ON POWER SUPPLY DEPARTMENT PROJECTS Brief discussion was held on COPA reporting, possibly having the previous month's billed COPA numbers along with the current figures for comparison purposes. Chairman Hord inquired whether we are on track considering there were delays in the delivery of the SCADA project. Mr. Sharma replied that we are on track and that Ray Brennick and Bob Depascale are checking out the system (Factory Acceptance Testing) on the West Coast. Mr. Ed Nobrega, Project Manager, Landis & Gyr, assured us the pre-factory Acceptance Tests were good. 4. AS/400 PERFORMANCE UPDATE Dennis Wick, Director of Information Systems, gave an informational update on the AS/400 as a follow-up to what was discussed during the 10-Year Plan and the Goals and Objectives concerning some of the money budgeted for this year for some enhancements. Mr. Wick briefed the members on batch processing and our interactive response times. He explained our total response time for local work stations and that during the last six months for cash receipts it went from very acceptable to an average of one to four seconds. This builds up significantly over a day for response time for handling between customers' transactions. Mr. Wick answered questions from the Board. At the conclusion of his presentation, Mr. Wick stated that staff planned to do some research on disk storage, in particular, as opposed to a model upgrade and within the next quarter bring a recommendation back to the Board. Mr. Welsh stated this was anticipated and it is covered in the budget but that we tried delaying it. Chairman Hord said we all understood his recommendation. 5. AUTOMATED MAPPING/FACILITIES MANAGEMENT PRESENTATION Mr. Davis supplemented his Agenda Item with a very thorough and in-depth presentation on automated mapping and facilities management. He stated we are very near completion of the conversion process of transferring our existing paper maps into digital format for the AM/FM system. This project was begun in 1989 and he gave an overview of what was involved, the purchase of software/hardware, conversion process and history. Using overheads, Mr. Davis explained how this system is being

6 Page 1001 utilized within Engineering and future uses and applications of it. Approximately 7,000 manhours (2 people) were spent on the conversion process over two years. Mr. Davis summarized the cost. $73,000 was spent on software, $55,000 on hardware, totaling approximately $130,000 to get the project completed (compared to prices of from $500,000 to between $2 and $4 million used by some firms). Discussion followed and Mr. Davis answered questions. Mr. Welsh added that we have a very accurate and precise system. He commended Ken Davis and Ken Beville for their grueling dedication and hard work ensuring the system is done right. Mayor Pollet left the meeting at approximately 7:45 p.m. A recess was called from 8:15 to 8:28 p.m. 6. SELECTED DEPARTMENT HIGHLIGHTS/MATERIALS MANAGEMENT This report was given by Jim Tillman, Director of Materials Management, in response to a request by Chairman Hord at an earlier meeting as to the status of our inventory. Mr. Tillman used overheads to show our inventory level history and minimum/maximum levels and what's on hand. The reports covered issues such as safety equipment, janitorial supplies, meter supplies, office supplies, pole yard inventory, etc. He stated we have some excess ($200,000) and emergency stock ($300,000) plus regular inventory, overall totaling about $3 million, about a two years' supply. Discussion was had on various categories and factors of inventory, as well as bar coding, excess inventory, write-offs, etc., and attempting to track inventory monthly. Chairman Hord stated the message being sent to Jim Tillman is that as sales decline everything else should go with it. When sales go up you only go up as you need to, not as you used to. Mr. Welsh asked Mr. Tillman to add some priority to the min/max analysis. 7. POTENTIAL OVERBUILD OF FPC TRANSMISSION LINE This additional item was added to "STAFF REPORTS" by Engineering. Mr. Davis said we had our last meeting with Florida Power Corporation (FPC) as to what would need to take place prior to doing joint construction at Cane Island. Primarily, the major issues were costs and ownership. FPC said that based on their taxing requirements they would have to add about 30 percent to the construction costs for income taxes, but they would check it further. At issue was the concept of who would own the particular line, whether they or KUA would own it. We wanted to ensure they were aware we would not pay a wheeling cost, which they agreed to. Another issue was permitting, both from environmental agencies and from the County to reconstruct the line. FPC said that the income tax issue is there on which they would have to pay taxes. Three tasks had to be met: 1) If FPC did the work for a tax-exempt municipal it was not taxable; 2) If they were not making a profit off of it was not taxable and they would pass that along to us. 3) The facilities being constructed are not being used by their customers in any way. So, they are relatively confident this does not come under a taxing requirement. An indemnification clause would need to be included in any agreement made. FPC sees no problem with permitting.

7 Page 1002 Regarding the costs, FPC is more than willing to work with us and construct it as an overbuild situation. FPC indicates a cost in the $1.3 to $1.4 billion range, tax exempt. He further went through the numbers for costs, right-of-way acquisition, appraisals, etc. The parcels cost $41,000 plus 10 percent. We had no acquisition expenses as yet; this could double the $41,000 if going through condemnation. Mr. Davis highlighted the ramifications of going the route of overbuilding and the problems and delays that would be incurred. Mr. Brinson said there were 14 parcels and property owners. The Judge might authorize us to get the property and he explained how it might go, that courts are unpredictable which way they can go. He said Mr. Davis could go before the court and say it wasn't cost effective. Mr. Davis said the Clay Street substation is not serving anything except importing power from Cane Island and is not affecting any distribution load. Chairman Hord asked if it s the consensus of the Board to go on our own on this. Director Lowenstein agreed, as did the other Board members. This was the direction given to staff. I. CONSENT AGENDA Director Gant moved to approve the Consent Agenda (items 2, 3, 4, 5, 6, 7 and 10), with the exception of item 1 pulled by Director Bobroff, and items 8 and 9 pulled by Director Lowenstein. Seconded by Director Jones. 2. AWARD OF CONTRACT FOR THE SUPPLY OF UNIT SUBSTATION EQUIPMENT FOR CANE ISLAND UNIT 1 - IFB # AWARD OF BID FOR THE SUPPLY OF INJECTION WATER TREATMENT SYSTEM EQUIPMENT - CANE ISLAND, IFB # AWARD OF CONTRACT FOR SITE DEVELOPMENT WORK AT CANE ISLAND, IFB # AWARD OF CONTRACT FOR FURNISHING THE FIELD ERECTED TANKS FOR CANE ISLAND, IFB # SELECTION OF VENDOR FOR FURNISHING AND ERECTING PREFABRICATED METAL BUILDINGS AT CANE ISLAND, IFB # INSPECTION & REPAIR OF GAS TURBINE COMPONENTS, IFB CANE ISLAND SUBSTATION 230 KV GAS CIRCUIT BREAKERS Director Gant asked, if we made a decision now, whether some of these items would be placed in inventory with a long lead time, or would they be designed to be delivered when we need them. Mr. Sharma replied that, concerning items 2, 3, 4, 5 and 6, as soon as they are delivered they will be ready to be installed and will not be inventoried. The injection water treatment is a stand-alone unit. Site development is of primary concern and is needed immediately for the access road. Motion carried APPROVAL OF MINUTES OF FEBRUARY 24, 1993 REGULAR MEETING Director Bobroff stated he had a question on the March 24, 1993 Minutes wherein it said, "Mayor Pollet commended Ms. Beck on having done a good job representing KUA during public hearings at Commission meetings". He asked why Ms. Beck was attending these. Mr. Welsh stated

8 Page 1003 that the City Commission was holding public hearings on rate changes on their water and sewer deposits and they were doing this to accommodate the changes we wanted to do. 8. CONTRACT APPROVAL-SUBSTATION SWITCHBOARDS, CLAY STREET SUBSTATION PROJECT, IFB # CONTRACT APPROVAL-SUBSTATION STRUCTURES & EQUIPMENT FOR CLAY STREET SUBSTATION, IFB # Director Lowenstein felt these items should have been listed under "OLD BUSINESS". Mr. Welsh stated that item 8. is a contract for approval of the substation switch gear at Clay Street. Director Lowenstein asked why approve it if we don't have a line to go in it, or approve it with the understanding that the only time it goes into being when you need it. Mr. Welsh said we'll be building the substation, acquiring right-of-way and constructing transmission lines concurrently. Mr. Davis said time-wise, if we don't award this bid and give them notification first of next month, the bid is no longer valid and it will have to be rebid. When permitting is received for us to make the May time frame for Unit 1 to come on line we must begin constructing the substation concurrently with the transmission. We may need to file condemnation and obtain the property, as well as the equipment for the substation. Mike Simpson, Black & Veatch, said there is a six-month lead time on this item. Director Lowenstein had a problem with this equipment being ordered and not being used. Mr. Welsh said that instead of proceeding in a parallel mode we can proceed in a sequential mode. Director Gant stated we may be influenced by our previous discussion about the importance of that substation, which is extremely important to the City even though it will not be hooked into anything other than bringing power in immediately. And even though we decided not to go with FPC, we will immediately go ahead and bring it in. Moved by Director Lowenstein to approve items 8. and 9. of the Consent Agenda. Seconded by Director Gant. J. HEAR GENERAL MANAGER, ATTORNEY, DIRECTORS GENERAL MANAGER Motion carried 5-0 Mr. Welsh stated that during the licensing of Cane Island, it might be beneficial to utilities and environmental concerns and development, of which we're a part, to establish a dialogue with a need to proceed cautiously without having a detrimental effect on the environment. This was apparent in working with the South Florida Water Management District Board. Mr. Welsh had been asked, as President of this Utility, if he would sit on a Board of Directors of the Governor's Environmental Education Foundation established several years ago with representatives within Florida. Their purpose is to foster and to promote environmental education. They are a fund raising group as well as a directing type of group and that Ms. Leah Schaad, of the SFWMD Board, had asked him to consider this appointment. She is a former member of the Florida Audubon

9 Page 1004 Society. Mr. Welsh informed her that he would consider it, but first would discuss it with our Board for their reaction. He felt it would be beneficial to represent the utility industry on that Board. It would involve spending about four meetings a year in various parts of the state and it is an opportunity for us to have a presence in the environmental community throughout the regulatory agencies. He said if the KUA Board had no objections he would proceed in this direction. Director Gant said people like this make the process unclear on many occasions. When a person looks at an issue from an emotional point of view rather than from facts and figures, it makes it extremely difficult and he did not feel Mr. Welsh would do that. On the other hand he also felt it would be a great opportunity. Director Lowenstein suggested he take it. Chairman Hord asked whether a membership fee and what other type of expenses were involved and whether they would he borne by KUA. Mr. Welsh stated there would be no membership fees but there would be some expenses, adding he would be representing KUA. He was uncertain as to the term of office. He was directed to proceed. Mr. Welsh felt chances were good he would get the appointment. The Board members were in agreement that he "go for it". Mr. Welsh reminded the Board we would be reviewing three Owner's Representatives the following evening at 6:00 p.m. (April 29th). ATTORNEY - No comments DIRECTORS Director Lowenstein asked the status on the bonding. Mr. Welsh stated that he and the financial team would be going to two rating agencies, Standard & Poors and Moody's, this Monday, in New York City. He was asked what the target date was for being ready to go to the market. Mr. Hostetler replied that we should have the rating on Friday, and we would be poised to enter the market on May 10th or 11th when it would be most advantageous. We would time the market, price the deal and call a Special Meeting of the Board for approval of the deal. Therefore, a Special Meeting might be held by May 12th or 13th. Mr. Welsh reminded the Board of the KUA ground breaking on Friday, May 14th, at 11:00 a.m. at Cane Island. Chairman Hord stated to the President and his staff, on behalf of the Board, that they are not trying to be critical on how we're running our business. They are trying to be constructive and he felt it pertinent in today's fiscal world that we all be fiscally responsible. Mr. Welsh stated we do take it constructively and that their input is greatly appreciated. K. ADJOURNMENT: Meeting adjourned at 9:30 p.m.

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