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Minutes 06/19/2019 MINUTES OF MEETING KEY MARCO COMMUNITY DEVELOPMENT DISTRICT The regular meeting of the Board of Supervisors of the Key Marco Community Development District was held Wednesday,June 19, 2019 at 8:30 a.m. at the Key Marco Community Center, 505 Whiskey Creek Drive, Marco Island, Florida. Present and constituting a quorum were: Mary Beth Schewitz Chairperson(Former Vice Chair) Luanne Kerins Vice Chairperson(Former Supervisor) Maureen McFarland Treasurer/Assistant Secretary(Former Chair) Corrie Grado Assistant Secretary Dawn Aitkenhead Assistant Secretary Also present were: Justin Faircloth District Manager Greg Urbancic District Attorney Bob Koncar General Manager, Inframark Several Residents The following is a summary of the discussions and actions taken at the June 19, 2019 Key Marco Community Development District's Board of Supervisors Meeting. FIRST ORDER OF BUSINESS Roll Call Mr. Faircloth called the meeting to order and called the roll. A quorum was established. SECOND ORDER OF BUSINESS Approval of Agenda The following changes to the agenda were requested by Vice Chairperson Schewitz: • Approval of the April 17, 2019 Meeting was moved up in the agenda to he item 4. • Supervisor's Requests was moved up as item 5. On MOTION by Vice Chairperson Schewitz seconded by Supervisor Grado with all in favor to amend the agenda as outlined above. On MOTION by Supervisor Kerins seconded by Supervisor Grado with all in favor the agenda was approved as amended. June 19, 2019 Key Marco CDD THIRD ORDER OF BUSINESS Public Comment on Agenda Items Mr. Glen Hanke commented on CDD expenditures for maintenance of private properties, two of which are on both sides of the entry and the other is on his lot. He wants his property natural the way it was originally. Mr. Faircloth stated he will follow up as private property should not be maintained by the CDD. FOURTH ORDER OF BUSINESS Approval of the Minutes of the April 17, 2019 Meeting The Board reviewed the minutes of the April 17, 2019 meeting and the following changes were made: • Line 63, Add, The Board requested a consultant be researched and presented to the Board for options on addressing speed limits, speed enforcement and impact on wildlife. • The sentence starting on line 118 and continuing on line 119 was changed to read Chairperson McFarland discussed the upcoming policy date. The District Manager was requested to obtain insurance proposals for Fiscal Year 2020. • Chairperson Shewitz suggested line 124, second sentence, be revised to read, Chairperson McFarland made an oral presentation to the Board and audience regarding the standards of best practice for CDD management. She expressed concern that the Key Marco CDD was not adhering to best practices and suggested we are deficient in the areas of securing bids,possibly inefficient in processing FEMA claims, and possibly deficient in oversight and compliance with new regulations. She reported that Inframark had provided her with a proposal to provide the CDD management, which included eight hours on site per month at an annual cost of$15,000. Discussion focused on the CDD's history with remote management as well as the limited scope of services described, as well as the lack of transparency in sharing such a proposal, only in oral discussion. The community members present expressed positions, both against and supportive of hiring remote management services, based on notes she took during the April 17,2019 meeting. • Mr. Urbancic stated the minutes can be revised as appropriate to reflect the substance of the meeting. He tried to cover what was pertinent in the notes he took at the meeting. Boards differ on the type of detail they like in their minutes.As an attorney it is his 2 June 19,2019 Key Marco CDD opinion that less is more. If there is something that is an accurate reflection of what was said in the meeting, it can be included. • Chairperson McFarland did not agree with the suggested changes made by Chairperson Shewitz with regard to item g under Supervisors' Requests and Comments. • There was consensus to revise the second sentence of line 124 to read Chairperson McFarland made an oral presentation regarding a proposal from Inframark to provide District Management services for $15,000. Discussion was had regarding best practices. • Line 131, insert to commence on June 1, 2019 after District Management services. On MOTION by Supervisor Kerins seconded by Supervisor Grado with Chairperson Shewitz, Supervisor Kerins and Supervisors Grado and Aitkenhead voting aye and Chairperson McFarland voting nay, the minutes of the April 17, 2019 meeting were approved as amended. FIFTH ORDER OF BUSINESS Supervisors' Requests and Comments C. Key Marco CDD Dissolution Discussion The following was discussed: • Chairperson Shewitz commented that in the past she was a proponent for maintaining the CDD due to financing that could be provided by FEMA in the event of a hurricane. There is a break-even point of approximately 14 lots that go delinquent, which pay for the cost of the CDD. From that perspective it seemed to be cost neutral and that FEMA reimbursement would be a big swing item. There is no guarantee there will be a ten- year gap between hurricanes and there is no way to know what level of destruction a hurricane could extract on the island. The money claimed from FEMA for Hurricane Irma was approximately $170,000. If that is spread over a couple of years, there is justification for keeping the CDD. If that amount is spread over a longer period of time, it is her opinion that it is costing residents more to maintain a CDD. • Chairperson Shewitz further commented there are endless burdens on the Board with regard to legal logistical issues involved. Board members are serving longer than they would like and it is hard to get residents to serve on the Board. 3 June 19, 2019 Key Marco CDD Vice Chairperson Schewitz MOVED to proceed with dissolution of the CDD and Supervisor Grado seconded the motion. • Chairperson McFarland requested Mr. Urbancic's legal opinion. • Mr.Urbancic distributed a copy of Chapter 190.046, Florida Statutes, a copy of which is attached hereto and made a part of the public record. He noted he did not agree with everything Hopping, Green and Sams opined with regard to dissolution of the CDD. By Statute, there are two ways the CDD can be dissolved: Option 1) Upon the transfer of all the community development services of the District to a general-purpose unit of local government. This means the CDD would transfer its assets to the City or the County, presuming they would accept them. In his discussions with Collier County they have stated if they take them, they will set up an MSTU and replace the CDD with another special district. He does not feel approaching the City to take over the assets is what the CDD residents will want. Option 2) If a District has no outstanding financial obligations and no operating or maintenance responsibilities, upon the petition of the District, the District may be dissolved. Mr. Urbancic noted he has dissolved districts before; however, those districts were in their infancy and had not issued bonds or had assets. The CDD would have to get rid of its financial obligations or operation and maintenance responsibilities. That is the challenge to dissolve the CDD is how to get rid of operation and maintenance responsibilities. The CDD is a public entity and cannot give away its public property and assets to a private entity like the HOA. That would be a violation of the Board's fiduciary obligations as public officials. • Vice Chairperson Schewitz asked if the CDD can sell its assets. Mr. Urbancic responded they could conceivably sell the assets to a private entity, but they would have to look at what process to go through to make sure they get fair market value. If the CDD sells it assets, there would be public funds from selling those assets that the CDD would have to figure out what to do with. • An excerpt of the May 11, 2017 minutes was provided to Mr. Urbancic and read into the record. The question was asked as to the meaning of a transfer of assets, whether • it would be an arm's length sale or just removing surplus property from the CDD. Mr. Earlywine indicated that it depended upon the type of assets, which in this case would include cash on hand and physical infrastructure as well. Statute 190 clearly 4 June 19, 2019 Key Marco CDD provides the authority to transfer and dispose of property, and what he would contemplate for the Key Marco CDD is the transfer of assets at no cost to the HOA with a transfer agreement in place with them, and then simply do a deed for the real property, a bill of sale for the balance of the infrastructure, and then a transfer of the reserve which would be held in trust for the use of its original designation. That money would also be repurposed for purposes of the budget hearing. • Mr. Urbancic respectfully disagreed with Mr. Earlywine's conclusion and suggested such action would be a violation of Chapter 190.046, Florida Statutes. • Chairperson McFarland stated when she and Mr. Carl Midkiff from the HOA were pursuing this, they were told by Hopping, Green and Sams, as well as JP Passidomo, there are steps to take to do it,hut if they had to give a percentage of whether it would work, it would be 50/50. As more CDDs mature over time and pay off their bonds, there will be more pressure from CDDs with no financial obligations to change the Statute. • Mr. Urbancic confirmed there have been no changes to legislation addressing Chapter 190.046. • There was discussion regarding obtaining an opinion from the Attorney General. Mr. Urbancic provided an overview of the process and stated the CDD would have to provide research when asking the question from the Attorney General. The District can expend funds in research and then the Attorney General can decline to give an opinion. It was noted that the Attorney General has significantly reduced the number of opinions they provide in recent years. • Ms. McFarland reviewed her research into this matter, a summary of which was included in the agenda package. Having infrastructure as a government entity, such as the bridge,that can severely be impacted by a hurricane allows for FEMA assistance. • Discussion ensued on whether or not to pursue an Attorney General Opinion. • Supervisor Grado asked for a show of hands from resident audience members in favor of dissolving the CDD. A record will reflect a majority of those present were in favor of dissolving the CDD.The floor was opened to resident comments on the issue. 5 June 19, 2019 Key Marco CDD • Conflict of interest and transfer of management was discussed. Mr. Urbancic stated his opinion on the matter was not a legal conflict of interest. He also stated many CDDs have arrangements with HOAs to manage their assets. • Ms. McFarland questioned whether FEMA would cover any hurricane damages to CDD assets if they are maintained by the HOA. Mr. Urbancic responded it may give them an easy argument that the CDD is not responsible for it. He noted he was currently fighting FEMA on a similar issue in another community. His argument to FEMA has been that the CDD is ultimately responsible because they own the assets. Vice Chairperson Schewitz amended her previous motion and MOVED for an exploration between Mr. Urbancic and Mr. Earlywine to discuss with representatives from the CDD and HOA Boards to understand the details of the solicitation of the Attorney General Opinion on the interpretation of the Statute for dissolving the CDD with a cap of$10,000 in legal fees and Supervisor Grado seconded it. • Chairperson McFarland asked Vice Chairperson Schewitz if she is willing to attend on behalf of the CDD. Vice Chairperson Schewitz agreed. On VOICE vote with all in favor the motion as previously outlined was approved. A. Key Marco CDD/Key Marco HOA Agreement Termination Discussion B. Key Marco CDD/Inframark Contract Discussion The Board reviewed and discussed the contract with the HOA as well as the contract with Inframark. • Chairperson McFarland stated the contract with Inframark is for district management services and is not to replicate something. • Vice Chairperson Schewitz wanted to make sure the services covered under the previous contract with the HOA are covered under the Inframark contract. She reviewed the following items included in the HOA contract that were not included in the Inframark contract: 0 Administration of website compliance, uploads and document retrieval. Inframark provides items that need to be posted to the webmaster,such as the agenda package, 6 June 19, 2019 Key Marco CDD but does not administer the website. Inframark noted several issues with the website that needed to be addressed to be in compliance with State Statutes and communicated that to the webmaster. Chairperson McFarland clarified the CDD contracts with Exploritech for website services. Inframark will provide oversight to ensure compliance. > Designation of Registered Office and Agent with the Secretary of State. This is normally done by the District Attorney. Mr. Urbancic will check to see if he is listed as the Registered Agent. > Conduct surplus property sales and disposition of public assets. This is for surplus equipment/property that needs to be declared as surplus and properly disposed of in accordance with Florida Statutes. Mr. Koncar reviewed the process and indicated Inframark can work with Mr. Urbancic on surplus property. > SFWMD — The CDD has a number of permits Mr. Faircloth has been researching. The water use permit the CDD obtained prior to 2010 was renewed under the HOA. Because of that, the HOA has responsibility for any reporting requirements because they own the property where the wells are located. There are currently no reporting requirements because they are under 3 Million gallons per month in usage. As the District Manager,Inframark interfaces with various agencies on the CDD's behalf. • Vice Chairperson Schewitz stated if you look at the provision of services in the HOA contract and compare them with Inframark, then it can be concluded those services are at a lower cost through Inframark; however, there were many functions provided by the HOA District Manager which are not included in either contract. Primarily, they are the on-site aspects of the job. She suggested entering into a smaller, different contract with the HOA to provide on-site management services at a reduced cost. • Chairperson McFarland asked if Mr. Faircloth felt he needed help. Mr. Faircloth responded he did not. He noted has been interfacing with Crawford Landscaping in regards to items they should be doing under their contract, noting his job is to interface and work with all the CDD's vendors ensuring they are in compliance with their contracts. Mr. Faircloth also noted he was in the process of reviewing contracts with Mr. Urbancic which are missing documentation required by Chapter 119, Florida Statutes. Additionally, it was noted that there were also protections that need to be 7 June 19,2019 Key Marco CDD included in various contracts such as naming the CDD as an additional insured. Mr. Faircloth noted that even though the contract with Inframark states they will be on-site only 8 hours per month,he continues working on CDD matters when not on-site. • Vice Chairperson Schewitz requested the services provided by the outgoing HOA/District Manager and promised to get with Mr. Faircloth to review the various items. Mr. Faircloth will send the list on to the rest of the Board for review. SIXTH ORDER OF BUSINESS Inframark Introduction to the Board • Mr. Faircloth introduced himself and stated he looked forward to working with everyone. • Mr. Koncar introduced himself to the Board and provided his contact information. He stated he looked forward to working with the CDD. • Chairperson McFarland stated lnframark has been providing accounting services since January of 2018. The services and programs provided by Inframark have been excellent. She asked how many CDDs Inframark provides both accounting and district management services for. Mr. Koncar responded that Inframark currently manages 85 districts throughout the State as well as HOAs along with a special services component to its operation out of the Fort Myers office for public works services. SEVENTH ORDER OF BUSINESS Old Business A. Three Way Stop Sign at Blue Hill Creek Drive and Whiskey Creek Drive • Mr. Pierre Nareth stated it would be helpful to have an ability to stop speeding traffic through the intersection. Mr.Faircloth stated the CDD has the ability to post stop signs. • Chairperson McFarland expressed concern for Mr. Nareth's property and whether he would be affected by noise from trucks braking suddenly. • Mr. Nareth suggested a warning at the top of the hill that the outlet is the next left. • Chairperson McFarland suggested placing a cone in the middle of Blue Hill Creek Drive,concerned that visibility of a sign could be lost. • Further discussion ensued and there was consensus to install a standard DOT sign that says No Outlet on the south side of the road. 8 June 19,2019 Key Marco CDD On MOTION by Supervisor Aitkenhead seconded by Chairperson McFarland,with Vice Chairperson Schewitz, Supervisor Kerins and Supervisors McFarland and Aitkenhead voting aye and Supervisor Grado voting nay, installation of a DOT No Outlet sign on the right side of the T at the Blue Hill Creek Drive and Whiskey Creek Drive intersection was approved. EIGHTH ORDER OF BUSINESS New Business A. Separation of CDD & HOA Expenses Discussion • Mr. Faircloth stated he expressed concern to Mr. Urbancic because as a CDD,they are only permitted to spend money on public property. The CDD should not expend funds for private property unless it can be determined there would be a benefit to the CDD. There are several items such as the electricity bill, landscaping services and irrigation currently in place,which violate this principle. • Mr. Urbancic commented that the CDD needs to spend public funds where it has property or easement rights for which it has an obligation. The CDD needs to look into these areas and address them. One of the items being looked at is re-bidding the landscaping under new specifications. • Mr. Faircloth will bring back a recommendation to the Board of his findings. He also noted he has made public records requests for CDD documents from the HOA and is still awaiting to receive them. B. Crawford Landscaping Letter Dated April 25,2019 Mr. Faircloth reviewed a letter from Crawford Landscaping indicating they will no longer be responsible for lost plant material. It was noted that since Crawford operates and maintains the irrigation system, they should be responsible for dead landscaping as a result of water issues and that the CDD should only be held responsible if it fails to act in a timely manner to repair the system they rely on, as in the case of the irrigation pump that needed to be repaired. Mr. Faircloth suggested responding back to Crawford with this feedback. The Board agreed. A. Crawford Landscaping Chinch Bug Application Proposal Mr. Faircloth reviewed the chinch bug application proposal from Crawford Landscaping. He suggested asking what the CDD's proportion would be for application on CDD property. He also noted the vendor needs to include verbiage regarding public records as required by Statute, but that this information could be added as an addendum. 9 June 19, 2019 Key Marco CDD On MOTION by Supervisor Aitkenhead seconded by Vice Chairperson Schewitz with all in favor the proposal from Crawford Landscaping for chinch bug application was approved with the request that costs be broken out between the HOA and the CDD so that the CDD can invoice the HOA for their portion. D. Crawford Landscaping Hurricane Season/Storm Clean Up Proposal Mr. Faircloth reported when he was on-site touring the property,he inquired whether the CDD had any hurricane preparedness contracts in place authorizing Crawford Landscaping to do hurricane cleanup work. Crawford Landscaping provided the proposal included in the agenda package. Mr. Faircloth noted that the hourly rates and equipment costs appear are high compared to another such contract he has previously reviewed and recommended negotiating with Crawford for potential better terms. On MOTION by Supervisor Aitkenhead seconded by Supervisor Grado with all in favor the District Manager was authorized to negotiate the terms of the proposal provided by Crawford Landscaping for hurricane season/storm cleanup for better rates. E. Gatehouse Status i. Koala-T Painting,Inc. Estimate On MOTION by Chairperson McFarland seconded by Supervisor Aitkenhead with all in favor the proposal from Koala-T Painting, Inc. for the gatehouse for a total cost of$5,750 was approved. ii. Status of Planters There was brief discussion regarding the status of the planters at the gatehouse and whether they can be given to the HOA as surplus property. On MOTION by Vice Chairperson Schewitz seconded by Supervisor Grado with all in favor the planters at the gatehouse were declared surplus property to be given to the HOA with C3 Gardens to be notified to stop maintenance of those planters on behalf of the CDD. F. Annual Landscape Contract Discussion The Board requested Mr. Faircloth research the previous request for proposals and bring this item back at the next meeting for discussion. 10 June 19, 2019 Key Marco CDD G. District Engineer Discussion The CDD currently does not have an engineer of record. Mr. Faircloth stated it is in the CDD's best interest to have an engineer. The CDD will have to go through the CCNA process as required by Statute and the CDD Rules of Procedure. This requires the RFQ process along with evaluation criteria for review of the qualifications received. The Board requested Mr. Faircloth place a draft RFQ for engineering services on the next agenda with the corresponding evaluation criteria. NINTH ORDER OF BUSINESS Attorney's Report A. Draft Rules of Procedure Mr. Urbancic reviewed a draft Rules of Procedure for the CDD and the following was discussed: • The suggested niles would provide organization on how to conduct CDD business. • Mr. Urbancic requested the Board begin reviewing the rule for ongoing discussions and consideration. • Once the CDD is ready to adopt the Rules of Procedure, the public hearing procedure will have to be followed. • Chairperson McFarland stated there are a few items that are a good idea to highlight. She asked if Mr. Urbancic can revise and reduce the draft material. • Mr. Urbancic stated there is a portion of Section 1, which can be eliminated. Purchasing procedures are important to have. • This item was tabled until the next meeting. B. Consideration of Resolution 2019-06, Relating to Maintenance and Repair Expenditures Mr. Urbancic reviewed Resolution 2019-06, which was discussed at the last meeting. • There is an existing resolution, Resolution 2017-03, which addresses maintenance expenditures outside of a regular meeting when circumstances arise. • This resolution includes a provision under Section 4 for emergency expenditures. • Under this resolution the District Manager will be able to authorize necessary expenditures to resolve the emergency, provided Treasurer gives consent. • Chairperson McFarland suggested changing the verbiage to state provided by either the Treasurer or the Chairperson. The Board agreed. 11 June 19, 2019 Key Marco CDD On MOTION by Chairperson McFarland seconded by Supervisor Aitkenhead with all in favor Resolution 2019-06, relating to maintenance and repair expenditures, was approved as amended to include the Chairperson as well as the Treasurer to approve emergency expenditures outside of a meeting. TENTN ORDER OF BUSINESS Manager's Report A. Approval of the Minutes of the March 20,2019 Meeting On MOTION by Chairperson McFarland seconded by Supervisor Aitkenhead with all in favor the minutes of the March 20, 2019 meeting were approved as presented. C. Special Event Request YMCA of South Collier Letter Dated April 25,2019 Chairperson McFarland stated the CDD has a resolution which allows for two special events within the community. The annual Tour de Marco was held February 27, 2019 and the Marco Half Marathon was held March 17, 2019. This request is for the Tour de Marco to be held February 23,2020. On MOTION by Chairperson McFarland seconded by Vice Chairperson Schewitz with all in favor the request by the YMCA for the February 23, 2020 Tour de Marco was approved. C. Acceptance of the Financials Mr, Faircloth reviewed the financials. • The fund balance looks good and the CDD is collecting assessments well. • It was noted that $32,900 in assessment revenue was outstanding. • A few expenditures were noted over budget. On MOTION by Chairperson McFarland seconded by Supervisor Aitkenhead with all in favor the financials for April and May 2019 were accepted. E. FY 2020 Proposed Budget Mr. Faircloth noted the following: • Mr. Faircloth noted he has observed that there are some invoices being allocated to certain line items,which do not appear to be correct. Utilities—Electric includes sewer 12 June 19,2019 Key Marco CDD expenditures that are being applied to it. He recommended either renaming the line item to just Utilities or adding additional line items to accommodate the other expenses. • He also recommended having a narrative for every line item in the budget. This will be clearer for everyone to see how District funds are being spent. • It was also noted that a miscellaneous contingency line item is effective,specifically for field services. As there are times when an unforeseen expenditure may occur and this would allow a line item for such an expense. • The Board agreed to Mr. Faircloth's suggestions. F. Consideration of Resolution 2019-08, Election of Officers The Board reviewed the Slate of Offices. • Chairperson McFarland requested to step down as Chairperson. • Vice Chairperson Schewitz was nominated as Chairperson. • Supervisor Kerins was nominated as Vice Chairperson. • The other Supervisors were nominated as Assistant Secretaries. • Chairperson McFarland was nominated as Treasurer in addition to being Assistant Secretary. • Mr. Faircloth will be Secretary and Mr. Baldwin will be Assistant Treasurer. On MOTION by Chairperson McFarland seconded by Supervisor Aitkenhead with all in favor Resolution 2019-08, electing officers as outlined above, was adopted. G. Report on the Number of Registered Voters (58) This item is for informational purposes only. D. Follow-Up Items iii. Gatehouse LPR Cameras Installation iv. FEMA Update v. Website Discussion • Mr. Faircloth confirmed all FEMA funds were received. • The LPR cameras have been installed. Mr. Kerins noted one of the cameras was missing and may have been mistakenly thrown away. • Mr. Kerins will finish the camera install and provide Mr. Faircloth with the information necessary for him to obtain access to the cameras. 13 June 19, 2019 Key Marco CDD • The website was previously discussed. Mr. Faircloth reviewed the changes he has requested to the website in order for it to be in compliance. ELEVENTH ORDER OF BUSINESS Audience Comments The floor was opened to audience comments: • Mr. Clement asked about the streetlights. Chairperson Schewitz stated it should have been in this agenda as a tabled item. Mr. Faircloth will look into this item and it will be included in the next agenda. • A resident addressed changes made to on site management of the CDD. Chairperson Schewitz stated she will go through a list of services expected from an on-site manager and will review those with Mr. Faircloth to see if they fall under Infrainark's scope of services or if necessary for the CDD to develop additional on- site services. She also welcomed feedback from residents. • Various residents discussed the irrigation system. • Mr. Bill Aitkenhead expressed appreciation for the professionalism Mr. Faircloth and Inframark have provided to the District.Noting that compliance and oversight is very important. TWELFTH ORDER OF BUSINESS Adjournment There being no further business, On MOTION by Supervisor McFarland seconded by Supervisor Aitkenhead with all in favor the meeting adjourned at 11:53 a.m. stin aircloth Mary B th Schewitz Secretary Chairperson 14