Executive Director Brian Wheeler gave the Invocation and. Hord asked for removal of Item 7D for discussion. Supervisor.

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1 w Description Regular meeting of the Tohopekaliga Water Authority. Present at the meeting were Supervisor John Moody, Supervisor Jim Wells, Attorney Mike Davis, Supervisor Fernando Val verde, Chairman Bruce R. Van Meter, Supervisor Dick Hord, Executive Director Brian Wheeler, Executive Assistant Nilsa C. Diaz, and Supervisor John Reich. Commissioners Jerry Gemskie and Michael Harford were not present. Date 3/11/ 2009 Location City of Kissimmee Commission Chambers Time ; ITEM f MINUTES 5:02: 04 PM Meeting called to order Meeting called to order by P.M. Chairman Bruce R. Van Meter at 5:02 5:03: 04 PM IInvocation and Pledge of Allegiance Executive Director Brian Wheeler gave the Invocation and Supervisor Valverde led the audience in the Pledge of Allegiance. 5:03: 08 PM Executive Director Wheeler added an Item for the Administrative Building under Old Business to be numbered 9E. SupervisorApprovalof Moody moved for approval of the Agenda with the addition of Item the Agenda 9E. Supervisor Valverde seconded the motion. Motion carried 6 to 0. 5:04: 25 PM ' Public Hgea rin None 5:04: 28 PM Hear the Audience No one came forth. 5:04: 35 PM Supervisor Wells asked for the removal of Item 7E and Supervisor Hord asked for removal of Item 7D for discussion. Supervisor Wells moved for approval of the Consent Agenda with the removal j of Items 7D and 7E. Supervisor Reich seconded the motion. Motion 7D. APPROVAL OF CONSENT FOR HELPING OTHERS Consent Agenda MAKE THE EFFORT INC. H. ( M. O. E.) TO SECURE A LINE 1OF CREDIT USING THE PROPERTY AS SECURITY - Supervisor Hord asked for the history of how the Authority's Martin Street property came to be sold to HOME. Executive 1 Director Brian Wheeler explained that in 2006, County 1 Commissioner Paul Owen had asked that the property be sold to H. M. O. E. in order to make them eligible for a grant. HOME has constructed improvements on the property, eleven ( 11) apartments for homeless single mothers and their children, and are planning to construct additional units. H. M.E. O. is now proposing to secure a 50,000 line of credit with the property as security. After' discussion, Supervisor Reich made a motion that the request be

2 granted with the stipulation that the mortgage subordination not exceed $50,000. Motion died for lack of a second. Supervisor Hord made a suggestion that the person who heads H. M. O. E. come before the Board to explain what they are doing, where they are going, and what their status is in being able to procure grants. Supervisor Wells made a motion to continue the item until the next meeting. Supervisor Hord seconded the motion. Motion carried 6 to 0. 7E. APPROVAL OF OFFICE SUPPLIES & EQUIPMENT CATALOG BID AS PART OF OSCEOLA COUNTY PURCHASING COOPERATIVE Supervisor Wells expressed having a problem with the local vendor preference policy and that the School Board and KUA have not adopted a policy yet. He added that the Authority already has a coop agreement with Houston and now with Tennessee and he does not approve joining the Osceola County Purchasing Cooperative. Executive Director Wheeler advised Mr. Wells that the Authority has already joined this co-op and that this agenda item is seeking a bid approval. Supervisor Wells inquired as to how the Authority can get out of this bid and was told that it is for 3 years with a 2 year renewal option and further wanted to know that if we don't'. accept the bid are we obligated to make purchases through this coop. Chairman Van Meter added that he we thought had the option to participate but were not obligated. Executive Director Wheeler suggested continuing the item until next meeting. Supervisor Moody motioned for continuing until next meeting. Supervisor Wells seconded the motion. Motion 5:23: 06 PM 9A. APPROVAL TO ADVERTISE PUBLIC HEARING NOTICE FOR RATE ADJUSTMENTS IN THE TORO H SYSTEM ( HARMONY) AND TORO III WATER ONLY UTILITY SYSTEMS ( CONSISTING OF THE LAKE AJAY, BAY LAKE ESTATES, FOUNTAINS, INTERCESSION CITY, PINE RIDGE, TROPICAL PARK, AND WINDSONG) Mike Rocca from Brown and Caldwell was present to answer any Unfinished Board questions. The discussions centered on utilizing the Business Harmony Joho II system) rate structure and adjusting the rates in an effort to achieve a uniform rate for all the Toho systems. Six of the Toho III water systems could be adjusted to the proposed rate system but the Pine Ridge System would experience a significant increase for most customer bills. The rate consultant proposed to adjust the Pine Ridge rates in two steps to merge them with the new Toho II system. The Executive Director advised the Board that the proposed rate equalization will result in around $ 100,000 loss in

3 revenue. Supervisor Wells moved for approval to advertise a public hearing for rate adjustments with the stipulation that Harmony rates be increased to accelerate revenue neutral immediately. Supervisor Hord seconded the motion. Motion 9B. APPROVAL OF THE INVESTMENT STRATEGY - Steven Alexander, PFM ASSET MANAGEMENT - presented a I PowerPoint presentation which outlined their recommended investment strategy for the reserves Authority's and other funds. Mr. Alexander recommended the Authority invest in portfolio which includes primarily Treasury and other federally backed or, insured securities with laddered maturities. Supervisor Reich moved for approval of the Investment Strategy as recommended by PFM Asset Management and Supervisor Valverde seconded the motion. Motion 9C. REQUEST TO ADVERTISE FOR A PUBLIC HEARING' TO ESTABLISH A MONTHLY FEE AND INDEXING FACTOR FOR CONNECTION OF EXISTING RESIDENCES TO THE AUTHORITY WATER SYSTEM - At the last Board meeting, the Board proposed revisiting its policy of not assessing interest for the amortization of connection charges and line extension connections for existing residences in areas desiring water service. After discussing different options, the Board recommended utilizing the 30 year municipal bond index with a 5 year moving line extensions. average with a 20 year amortization period, to include Supervisor Hord moved for approval of the request to advertise for a public hearing. Supervisor Wells seconded the motion. Motion 9C. ALTERNATIVE WATER SUPPLY STRATEGY - Continued until Friday, March 20a' at 1:00 PM. 9D - TOHO WATER AUTHORITY ADMINISTRATIVE' HEADQUARTERS - The Executive Director reported that Balfour Beatty submitted a letter dated March 11, 2009 ( copy provided for all Board members) providing a revised Guaranteed' Maximum Price Proposal. The revised GMP was reduced by approximately $ 200,000 through eliminating of the dyed white concrete finish and a reduction in the contract general conditions 0 by $90,000. The letter also provided estimate summary price breakdowns, clarifications and assumptions, and a project schedule update. Supervisor Wells asked about the status of acquiring an

4 owner's representative firm. Executive Director Wheeler reported that six ( 6) firms had submitted in response to the solicitation. Staff will interview all six of the firms if all the submittals are responsive. Supervisor Wells stated that he was not prepared to approve hiring a construction manager E representative was on board to review the pricing questioned why the Board was being time. until the owner's of the GMP. He asked to take action at this Chairman Van Meter said that approving the GMP would speed up the process of getting the building project underway. Approval of the GMP would allow the Authority to initiate the site work and any future changes from value engineering by the owner's representative could still be adjusted at the subcontractor level. Executive Director Wheeler said that if the Board could approve the GMP today and reduce the construction price through value II! I engineering reductions in scope that maintain the building functionality while the site work was proceeding because most of the proposed changes in scope were on the inside of the building. The Board discussed the GMP and the price reduction in the general conditions portion of the pricing. Supervisor Hord expressed support to approve the revised GMP submitted by Balfour Beatty and proceed with the project while continuing to look for to opportunities reduce costs where possible through reasonable modifications to the specifications. Chairman Van Meter said that the project can be started and that there would be plenty of time to develop and evaluate cost reduction alternatives. Supervisor Moody inquired about the city's schedule for the space' presently occupied by the Authority within City Hall. Executive Director Wheeler said that the city has approved the contract to build the new fire station and the plan is to have the fire administration move into the Authority's area upon completion of the new fire station. Supervisor Moody asked what was needed to proceed with the Administrative Building project. Supervisor Moody motioned for approval of the Guaranteed Maximum Price taking advantage of Balfour Beatty's proposal. Supervisor Valverde seconded the motion. Motion carried 5 to 1, with Supervisor Wells voting against the motion. Executive Director Wheeler said that next step is to do a contract with Balfour Beatty and work out a partial Notice to Proceed with value engineering and move forward in procuring a Developer's Agreement with the city. 6:26: 36 PM 10A. EXISTING SMALL BUSINESS EXPANSION WATER AND WASTEWATER IMPACT FEE PAYMENT OVER C~ TIME

5 To reduce the initial financial burden on existing small businesses, Staff recommended the Board approve a policy to allow these small businesses to finance impact fee payments over a five year period for expansions of up to 500 gallon of water and wastewater capacity. After discussions the Board decided to not act on the staff proposal. 10B. APPROVAL OF THE TWO RESOLUTIONS RELATING TO THE PROPOSED INTEREST RATE SWAPS Toby Wagner, Southeast Investment Securities, Financial Advisor to the Board had proposed that the Authority consider entering into two different interest rate swaps. The two interest rate swap alternatives were a Basis Interest Swap and converting the existing one month LIBOR swap to a three month LIBOR swap. Mike' Garner of Echo Financial Products, the Authority's SWAP advisor, was present to explain both swaps, the risks and benefits. The Board engaged in a lengthy discussion of the risks and benefits of the Basis Swap. After hearing all the pros and cons related to the Basis Swap, Supervisor Hord moved for not doing anything with the Basis Swap; Supervisor Reich seconded the motion. Motion Chairman Van Meter asked the Executive Director if he felt' comfortable proceeding with the 3 month LIBOR swap. The Executive Director recommended that the Board consider approving changing from the existing one month LIBOR swap to a three month LIBOR swap when the conditions are favorable. Toby Wagner said that they would amend the existing fixed rate from one month to 3 months and only do the transaction when the market is favorable. Supervisor Moody moved for approval of Resolution which supplements Resolution (" Swap Resolution" adopted December 13, 2006) authorizing the 2007A'. Swap and amends the floating Libor to 68% of three month Libor. Supervisor rate index from 68% of one month Valverde seconded the motion. Motion carried 5 to 1, with Supervisor Wells voting against it. 7:50: 55 PM Staff reports None 7:51: 02 PM ' Board Officials 7:52: 53 PM Supervisor Wells moved to continue the meeting to March 20th at Continuance 1:00 PM. Supervisor Moody seconded the motion. Motion 0

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FID12.. Alter. 1u1111* 1-11} 951 Martin Luther King Boulevard, Kissimmee, FL. www. tohowater. com Board of Supervisors

FID12.. Alter. 1u1111* 1-11} 951 Martin Luther King Boulevard, Kissimmee, FL. www. tohowater. com Board of Supervisors FID12.. Alter 1u1111* 1-11} 951 Martin Luther King Boulevard, Kissimmee, FL www. tohowater. com 407. 944. 5000 Board of Supervisors Present: Vice Chair Tom White Secretary Clarence Thacker Supervisor John