The above referenced meeting of the Utility Board of the City of Key West, Florida, convened at 5:00 P.M., on the above date and location and was called to order by Chairman Padron. Present and answering to the roll call were Utility Board members: Peter Batty, Charles Bradford, Mona Clark, Lou Hernandez and Robert Padron. Also present at the meeting: Nathan Eden, Attorney; Lynne Tejeda, General Manager & CEO; Jack Wetzler, Assistant General Manager & CFO; Alex Tejeda, Customer Services Director; Suzanne Greager, Director of Management Services; Dale Finigan, Director of Electrical Operations; David Price, Director of T&D and Stan Rzad, Compliance Administrator.

ORGANIZATIONAL MEETING
Chairman Padron opened the Organizational meeting.
Elect Vice-Chairman to the Utility Board
Motion was made by Mr. Batty and seconded by Ms. Clark to elect Mr. Lou Hernandez
as Vice-Chairman to the Utility Board. The motion passed unanimously.
Committee Appointments – The appointments are as follows:
COMMITTEES APPOINTMENTS
Fiber Optics Peter Batty
Excess Property/Redevelopment Peter Batty
Horizons Lou Hernandez
Employee Issues Lou Hernandez
Legislative/Regulatory Robert Padron
Financial Planning Charles Bradford
“KEYS” Performance Evaluation Process Mona Clark
Governmental Liaison Robert Padron
Audit Committee Robert Padron & Peter Batty
Ms. Clark expressed that she would also like to serve on the Employee Issues
Committee. Ms. Clark was added to serve on the Employees Issues Committee.
Mr. Padron indicated that he would like Mr. Batty to serve on the audit committee
for Fiscal Year 2005, but would then ask Mr. Bradford to.
Other Business
There being no further business the Organizational meeting was adjourned and
the regular meeting resumed.

PRESENTATION
Agenda Item #4 – Presentation
a) Assisted Care Living Facility – Mr. Ed Swift
At this time Ms. Sandy Higgs, Board Director for the Florida Keys Assisted Care Coalition, Inc. addressed the Board. Ms. Higgs proceeded to introduce the members:
Co-Chairs
Ed Swift
Joan Higgs
Vice Chair
Molly Shallow
Secretary
Lucie Adams
Treasurer
Peter Batty
Board Members
Eward Block
Bud Brewer
John Dolan-Heitlinger
Robert “Buddy” Estes
David Eyer
Kitty Green
Steve Henson
Liz Kern, R.N.
Karen Lockwood
Robin Lockwood, M.D.
Roberta Marko, R.N.
Joe Smith

Ms. Sandy Higgs stated that the members of the committee were very dedicated to this project. At this time Ms. Higgs introduced Ms. Joan Higgs.

Ms. Joan Higgs gave the Board a brief background on how the program started. Ms. Higgs told the Board that only seventeen assisted-living beds exist in the Keys from Marathon to Key West. The seventeen beds are located at Bay Shore Manor. Ms. Higgs asked the Board for their continued support regarding the piece of property located on Angela Street known as the Key West Diesel Plant and Substation to be used for the assisted living facility.

Ms. Higgs introduced Mr. Ed Block to report on the financial status to date. Mr. Block told the Board that there would be no tax payer investment required for this project. A firm named Haskell from Jacksonville, Florida has been hired to perform a feasibility study, Phase One has been completed. Mr. Block stated that the money for the planning effort was donated by the Board of Directors and one foundation grant. Approximately $80,000 has been donated for the first phase of the planning study. Mr. Block stated that another $80,000 will be forthcoming from donations. The cost Haskell Group fee will be approximately $160,000. Mr. Block stated that a detailed plan will be presented to the City of Key West and to Keys Energy Services in the fall. Mr. Block thanked the Board for their continued
support.

Mr. Batty asked if the association would qualify to apply for a donation by the KEYS’ Sponsorship Program. Ms. Tejeda stated that the Sponsorship Guidelines are written under the Advertising Policy and was not certain if they would qualify. Ms. Tejeda stated that staff would look at the guidelines and inform if the association qualifies for a donation.

Ms. Sandra Higgs introduced Mr. Ed Swift. Mr. Swift stated that the diesel plant property was integral for the success of the Assisted Care Living Facility. Currently 5.4 acres are available between the City and KEYS’ property for the facility. Mr. Swift proceeded to give the Board a brief background on the firm (Haskell) selected to perform the feasibility study. Mr. Swift told the Board that from Marathon to Key West 146 beds can be supported, 44 of those beds will be identified for assisted care, 50% of those 44 beds will be for low and very low income people. The others will be available for those who can afford to pay more. There will also be independent senior living and fee-based living.

Mr. Swift stated that the site was the best site for this facility because it offers the best connection to the community. He also informed the Board that there will be housing for staff within the facility. Mr. Swift thanked the Board and said that the project would not be taking place without their participation.

Chairman Padron informed that the land use study was completed in 2005 and the results indicate that the property is suited for the Assisted Care Living Facility. Mr. Swift thanked the Board and asked if they still supported the project. Chairman Padron responded that he did support the project and the other Board members responded that they also supported the project.

INFORMATIONAL ITEMS
Power Supply Report
Mr. Dale Finigan reported that since the January 25, 2006, Utility Board meeting there have been no transmission outages, four distribution outages, and two reclosure outages.
Mr. Finigan stated that the tie line separation to replace lightning arrestors in the Marathon Substation was still ongoing. The FKEC crews changed out two of the four remaining arrestors on Tuesday and plan on completing the work on Friday morning. Mr. Hernandez inquired about an article in the paper regarding pole inspections. Chairman Padron stated that the Florida Public Service Commission approved a proposal to require every investor-owned electric utility to conduct wood pole inspections on an eight-year cycle. At this time, the PSC decided not to include municipal electric utilities and electric cooperatives. Ms. Tejeda informed that there are approximately 9,700 wooden poles in the KEYS service which would cost about $500,000 to inspect over the eight-year period. Mr. Finigan stated that crews do report any findings. KEYS is performing inspections to some extent but not an official one.Ms. Tejeda stated that the Florida Municipal Electric Association and the Florida Municipal Power Agency are working together to possibly determine options for pole inspections and issue a bid through the Joint Purchasing Committee.
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Generation Report
Mr. Dan Cassel informed the Board that the CT#4 project is moving forward as scheduled. The equipment is currently being loaded in Houston, Texas and the arrival date is still scheduled for the week of February 22, 2006. Mr. Cassel stated that staff is working on the Construction Agreement for the unit. Mr. Cassel stated that CT#1 remains out of service for the compressor repairs. The turbine and compressor is scheduled to ship to KEYS the first week in March. Currently KEYS is in the process of acquiring a reliable price for the compressor case replacement. This will be brought back before the Board for approval. All other generation is available. Chairman Padron asked a question regarding insurance which was answered by Mr. Cassel.

At this time Ms. Tejeda introduced Ms. Erica Zarate who was promoted to the
Collections Supervisor position in December.

Advisory Committee
Ms. Tejeda informed the Board that the vacancy on the Advisory Committee for District I due to Mr. Charles Bradford being appointed to the Utility Board, has been advertised and the applications are due next week. The appointment of the new Advisory Committee Member will come before the Board on February 22, 2006.

Key West Steam Plant Project
Ms. Tejeda informed the Board that Mr. Ed Swift would be making a presentation to the Board at the February 22, 2006 Utility Board meeting regarding the affordable housing and market rate housing. Mr. Swift has offered to conduct a tour of theconstruction site prior to the Board meeting.
SO2
Ms. Tejeda stated that to date, the SO2 allowances have not been sold. The market has softened considerably since the last Utility Board meeting. The highest quote for the strip KEYS is selling was $525.00 and the lowest was $400.00 per allowance. Staff will continue to watch the marked and will act if the opportunity presents itself, but it is possible that staff will have to wait until the fall or December when the price may rise again.
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Emergency Purchase Orders from Hurricanes
Ms. Tejeda informed that she had approved two Change Orders for ongoing work with contractors, Dillard Smith and Shaw Construction for Hurricane Wilma clean up. The change orders were significant; Dillard’s change order was in the amount of $190,000 increasing the original purchase order to a total of $290,000 and Shaw’s change order was in the amount of $180,000 increasing their original purchase order to a total of $300,000.
Ms. Tejeda stated that during an October 2005 Board meeting, Mr. Carl Jansen discussed his concern that he was approving large sum emergency contracts and wanted to confirm that the Board was comfortable with his approving them and reporting after the fact. The Board, at that time, said they were satisfied. Ms. Tejeda said she wished to bring to the Board’s attention some ongoing work and change orders to contracts with Dillard Smith Construction and Shaw Construction that she was concerned was outside of their intent.. Chairman Padron gave a brief history on why this process was approved. The intent was for emergencies and he felt that the change orders was stretching it somewhat. Chairman Padron requested that the Change Orders for Dillard Smith and Shaw Construction be brought back before the Board for ratification. The expenses are reimbursable by FEMA and from that standpoint it would be better if there was Board approval.

A brief discussion ensued regarding what constitutes an emergency. Ms. Tejeda stated that the items would be presented to the Board at the February 22, 2006 for their approval.

Waiver of Impact Fees
Ms. Tejeda informed the Board that the City Commission passed a resolution on February 7, 2006 asking the Utility Board and the Florida Keys Aqueduct Authority to consider waiving impact and other fees for developers of affordable and workforce housing with Key West. If it is the Board’s desire to accommodate the City’s request, staff is prepared to look into crafting such an exemption that narrowly defines what will be waived. Mr. Bradford asked a question regarding the City of Key West waiving their impact fees. It seems reasonable that before KEYS looks into a way to waive the impact fees that the City will also be willing to waive their fees.
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Chairman Padron stated that he would support the issue in some degree. However; the area in which costs can be reduced lies within the City Commission. If the City is not going to waive their fees why should KEYS waive any fees. Mr. Hernandez stated that if KEYS is going to give anything away that KEYS employees should be included in the affordable housing and use the same formula the City or Florida Keys Aqueduct uses for their employees. KEYS employees have the same needs.
Ms. Tejeda stated that she understood that the City currently does not have a mechanism to waive any fees. If the City waives fees perhaps that could be a part of the Board’s’ criteria. The current CIAC fee is $350 and the meter charge is $100 for residential. The resolution specifically states that it could be other fees for developers and that could include underground line extensions, which is a large price tag. Staff has concerns with this request. There are a lot of issues. Chairman Padron expressed that he had issues waiving fees for line extensions. Mr. Batty stated for the record, that he would have a difficult time voting in favor of waiving an impact fee if it was beneficial to the developer and not the homeowner.

Some discussion ensued on waiving of impact fees for governmental agencies. There were no further informational items to come before the Board
CONSENT AGENDA
Item #6 – Consent Agenda
a) Approval of Minutes – Regular Meeting – January 25, 2006
b) Approve Disbursements Report
Motion was made by Mr. Batty and seconded by Ms. Clark to approve the following
items under the Consent Agenda:
a) Approval of Minutes – Regular Meeting – January 25, 2006
b) Approve Disbursements Report
There being no discussion, the motion passed unanimously.
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ACTION ITEMS
Item #7 – Action Items
a) Approve Florida State Contract Lease Mailing Machine and Mail Inserter
from Pitney Bowes
Ms. Tejeda told the Board that staff was seeking approval to lease two separate machines, a mail inserter and a mail machine which weighs and imprints postage. This is a state contract and the total annual lease price is $13,596.00 for a four year contract.

Motion was made by Ms. Clark and seconded by Mr. Hernandez to approve the Florida State Contract Lease #600-760-00-1 for a D1500 Mail Inserter and a DM800 Mail Machine from Pitney Bowes for four (4) years in the amount of $13,596.00. There being no discussion the motion passed unanimously. The Agenda Summary Sheet is attached.
b) Approve State Contract Purchase of one ½ Ton Pickup Truck from Garber Chevrolet, Inc. and Declare Vehicle #73 as “Surplus”
Ms. Tejeda stated that four months after Hurricane Wilma KEYS is still dealing with vehicles. In December, the Board approved the surplus of thirteen vehicles that were damaged and purchasing twelve vehicles as replacements. There are ten vehicles that are questionable as far as their being declared a total loss by the insurance company.
Ms. Tejeda stated that staff is requesting approval to declare Vehicle #73 as surplus and approval to purchase a one ½ ton pickup truck from Garber Chevrolet, Inc. in the amount of $13,998.00 under a Florida State Contract. Motion was made by Mr. Batty and seconded by Ms. Clark to approve the Florida State Contract purchase of one ½ ton pickup truck from Garber Chevrolet, Inc. in the amount of $13,998.00 and declare vehicle #73 as “surplus”. Mr. Hernandez asked if staff had considered leasing vehicles. Ms. Tejeda stated that some bucket trucks were leased but it was not cost effective to lease the other vehicles. Chairman Padron asked if FEMA would reimburse any of the vehicle costs.
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There being no further discussion the motion passed unanimously. The Agenda Summary Sheet is attached.
7c) Approve Results of Worker’s Compensation Insurance Audit for FYE 09/30/2005 and Additional Premium
Ms. Tejeda informed the Board the Florida Municipal Insurance Trust has completed the annual Worker’s Compensation Insurance Audit for FYE September 30, 2005 and has assessed an additional premium as a result of the excessive overtime worked throughout the year.
Ms. Tejeda stated that the audit is performed on an annual basis and the cost is typically under the $25,000 Board approval level, however, this year the amount was $25,887.00. The Workers Compensation premium was approved by the Board in September 2004 and the original amount was $200,717.00, the adjustment will increase the total premium to $226,604.00 for FYE September 30, 2005.
Motion was made by Mr. Hernandez and seconded by Mr. Batty to approve the payment to Florida Municipal Insurance Trust, in the amount of $25,887.00 for the additional Worker’s Compensation Insurance premium for FYE September 30, 2005. There being no discussion the motion passed unanimously. The Agenda Item Summary Sheet is attached.
OTHER BUSINESS
Ms. Tejeda informed the Board that KEYS employees were recognized at the Annual Chamber of Commerce Awards Banquet. Mr. Julio Barroso proceeded to read the inscription on the plaque.
Mr. Batty asked if staff had contacted the Public Service Commission regarding implementation of rates for customers who do not reside in KEYS service area on a year round basis.
Ms. Tejeda responded that R.W. Beck was doing some research on this matter and at this time it does not appear to be favorable. A full report will be presented to the Board once it is received.
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ADJOURNMENT
There being no further business to come before the Board the regular meeting of February 8, 2006 was adjourned at 6:10 p.m.
APPROVED:
_________________________________________
Robert R. Padron, Chairman
ATTEST:
____________________________________
Lynne E. Tejeda, Secretary
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