MINUTES OF THE DECEMBER 13, 2007 EMERGENCY MEETING

FOR THE MATLACHA/PINE ISLAND FIRE CONTROL DISTRICT

Call to Order: The meeting was called to order at 1:19 p.m.

Roll Call: Commissioners Cox, Cole, Elder and Cammick were present. Commissioner Peckinpaugh was excused absence.

Chief Bradley, Attorney Pritt, Jeff Tuscan (Consulting Auditor), Capt. Crotty, Eng. Cook, Eng. Rossman and Administrative Assistant Richter were present.

Business: Discuss and enact actions regarding the financial and banking matters of the district.

Commissioner Elder: The reason I called this emergency meeting is the latest development of our financial situation, we received from the Lee County Tax Collector indicating that some $745,708.83 has been withheld from our tax deposit as SBA Non Liquidity Allocation. Combined with the $225,000 that has already been withheld that brings us to $970,000 that’s currently withheld from our access. (Summary Budget pages were handed out to commissioners for this workshop and are on file.) If you walk through the fruition that we receive the money that actually comes in without going through all the reserves and so on we have approximately $5,200,000 income for the district for the fiscal year, so if in the worse scenario this $970,000 that’s withheld from us then gets compounded a little bit because in the budget we have interest income. The $970,000 being taken away from us we don’t have that interest income that would come with that so you have to put another 5% on it and it gets to be about 20% of our total income for the fiscal year. If we were without this money for the entire fiscal year and the district continues just as we are, we do everything as we planned we exhaust the $1,500,000 credit line and will be out of available funds by the end of the year. We had planned to be into that credit line at the end of the construction cycle as we stand. The $970,000 may pare down, I had a conversation with Vicki Peters, Lee Co. Tax Collectors office yesterday that $745,000 is representative of both the 14% set aside fund and the 15% withdraw allowance. The $2,123,556.18 was the tax hit that money was in the SBA as a part of the Tax Collector total deposits with the SBA. If you combine that $2.1 million

figure with the $1.55 million that we had it gets close to $3.7 million if you then pulled 14% of that number aside and assume that would be the net amount that they end up in that 14% non accessible fund and we get the remainder of it back that will leave us short about $518,000 plus the interest impact on the $518,000 and the interim of the rest, if the SBA goes ahead and let’s allocation to continue at some %. Brief discussion follows as to whether SBA was allowing withdraws. If we’re going to be fiscally responsible since we can’t hold that money in our hand we probably shouldn’t consider that we’re going to have that $970,000 until somebody frees it up. Since those monies were the districts money eventually when it shakes out it will be combined at the SBA level. Commissioner Cammick: One thing we have to find out is if any of this money this $740,000 is penalty money. I don’t think we should be paying their penalties, but if that 2% that is something we may never get back the 14% that should be in B shares along with our portion which at the best case scenario is you will get all of it back and the worse case you will probably get 60 to 75% of it back and loose the rest. What I’m trying to figure out is what is that 15% they came up with and where is that money, did they just take it to offset all their losses, or where is that 15%. Is that added to the B shares and we won’t get it back or what. Commissioner Cox: When was this deposit of $2.1 made? Linda: It is going to be made on the 14^th. It is from Lee County Tax Collector that’s in the SBA and transferred to us. Commissioner Cox: So they have been putting their money there too. Commissioner Cammick: Yeah and they want us to pay for their loss.

Commissioner Cox: That helps me to understand the whole picture. Commissioner Elder: There are a number of issues on the table (1) It is the responsibility of the Tax Collector to invest theses revenues and funds pending their timely distribution to various state and local agencies and taxing authorities (taken from tax collectors website) so the question is should they have been doing anything with this tax money other than putting it in an escrow account . Commissioner Cammick: Well they probably collect interest. Commissioner Elder: That’s probably a second question.

Jeff Tuscan: I can answer your question Mr. Cammick. They’re allowed to invest that money and historically they always have. It used to be local but they put it in the SBA and historically it was viewed as bullet proof, it survived Enron and that whole group of frauds, their interest earnings went way down but there was never a run and nobody lost principal. In the years when the derivate issue came up same thing happened. So government essentially saw that as a guaranteed investment. The interest they earn gets split among the district s proportionally on the amount they invest. The tax collector has a zero budget; they distribute it back to every government they collect for. You get a check at the end of the year called excess fees and that is what it is; interest earnings, penalties, whatever, refunds, discounts, whatever. Commissioner Cammick: So they are doing us a favor by investing the money, they think then when they invest it wrong we take the hit. Commissioner Elder: But for today’s purposes we’re missing $970,000 that we can’t put our hands on. The question is how we deal with that and what do. Commissioner Cammick: What is it what is the sum of that money they took away? Is it B shares or what? Jeff Tuscan: A lot of my clients were invested in this so from one or the other we have been picking up how this is working and when we learned the tax collector was invested up there, the tax collectors as a group went to the SBA. If you’re going to put this limit of $2 million or 15% whichever is greater, even though the money goes to a bunch of individual governments. So they came up with a plan and they were supposed to give them 5 hours on Monday before the Tuesday when they opened it up to transfer laterally; to take tax collector money and transfer into accounts and then those members could move the money out of their accounts but they cut them off after 3 hours, they got some of it transferred and some of it they didn’t. So all the tax collectors where trying to do that; the ones invested there. So what we were told by the tax collectors office is they did 3 hours and then they shut them off and Tuesday came and people withdrew what they could withdraw what was in their account. Tax Collector withdrew what they could based on the 15% so your loan that they withheld is a combination didn’t fit into necessarily the A or B Fund it was just what they didn’t get transferred . Commissioner Cammick: Why didn’t they let us make that decision? If we knew taking $2 million tomorrow was going to cost us $300,000 we might of said why don’t you keep the $1 million for 6 more months and we’ll let the $300,000 stay there. Jeff

Tuscan: From what we were told, when the SBA came up with the emergency plan their consultants they didn’t fully comprehend or have time to analyze that all the tax collectors had money up there too it wasn’t all individual governments with individual pots of money. The general theory was if you had your reserves invested there, since it was about the time tax collectors were going to start distributing November’s collection the consensus was most the governments would be able to short term cope cause they can’t get all their investment they’ll get this tax influx they didn’t understand the tax money was up there as well. Commissioner Cammick: I don’t know what that extra 15% is and where the money is and are we ever getting it back or not. Commissioner Elder: It’s a mixed computation but it’s because of the $2 million less the 15% or the 15% withdrawal. We were limited by $2 million at a maximum or 15% of the fund. Jeff Tuscan: You were she had $474 million. Commissioner Cammick: But where did they put the money where is that 15%. Brief discussion follows in regards to the 15% and where money is.

Jeff Tuscan: My guess is they are trying to analyze, let the dust settle, and you can see this is another transfer date 12/14. Individual governments haven’t been able to do any more transfers

but apparently they are working with the tax collector and let them move some money. So my guess is once they do that, just guessing here hypostasizing that they are going to let the individual governments withdraw some of this money once it gets moved over. Commissioner Cammick: Have they actually given any thought to the fact the tax collector invested their money poorly no matter how big an excuse to say how good it was, why don’t they pay their error instead of taking the money from us. Jeff Tuscan: I don’t know if they’re insured for that kind of thing or not. The tax collector is an individually elected official and they have a zero cut of their own money, total zero everything. Commissioner Cammick: So they have to increase taxes to pay ourselves back.

Jeff Tuscan: Right or if they have some insurance. Commissioner Cammick: Okay I’ve got it.

Commissioner Cox: We should assume that we will get the answers in the next few weeks and decide on what we will do about our crisis. Commissioner Elder: And that’s what we have to do. One more point on they tried to transfer the funds to our account, as I read this the fund withdrawals are Fund A 15% or $2 million of our assets, if they had combined the 2 funds if they had combined the Lee Co. Tax Collectors fund of our money plus the money we already had in there we would have had $3.7 million and we would have only been able to draw out $2 million. As we stand today we got the $1.3 plus we’ve got another $1.3 so technically we’re $700,000 ahead of the game where we would have been if they would have combined them. I believe they’re going to catch all that up and figure it out over the next few weeks. I would anticipate we’re not going to look forward to seeing any money from the SBA until that cycle catches up, because we’ve already used up our first $2 million and we’ve already got more than we should have got. Commissioner Cox: So we shouldn’t resolve the situation. Commissioner Elder: We’re missing $970,000 and the question is how much of that $970,000 do we need to look at as far as making the rest of this year work. I think Mr. Tuscan’s got to get involved there, what you think we should do with this budget. Jeff Tuscan: Finding out what they are doing on the tax collector money is kind of breaking news, so I haven’t had a chance to talk to chief or Linda at all. What I have been trying to figure out we are finishing the 4^th quarter reports that we do for you. We were basing off of that it looked like you were going to close the year roughly around $2 million in fund balance. You had about $800,000 from the prior year carryover roughly $1.2 rolling into 08. I don’t know how much of that you will have used up in October and November. Linda: I didn’t pull any of that information. Jeff Tuscan:

If you carry your budget , you budgeted about $5 million in income and spend in payroll and operations about $4.2-$4.3 so you divide that by 12 that is about $400,000 a month say you used roughly $800,000, I’m guessing then you should theoretically have about $1.2 and $200,000 of that

is in reserves in the SBA Fund B Shares. Commissioner Cammick: So we could use up all our reserves, sick pay, equipment & improvements, operating reserves all that money we’d use that all up. Jeff Tuscan: In 2 months but. Commissioner Cammick: That would make up for this loss.

Jeff Tuscan: Yes. And the SBA supposedly aren’t taking deposits so you have to believe the tax collectors not sending any more money up there. Commissioner Cammick: We should be able to tell them we don’t want it to go there. Chief Bradley: I had her call yesterday and the next draw we get will be straight. Commissioner Cammick: She called a while back to do that. Linda:

Not for Lee County Taxes. Chief Bradley: Yesterday when we received this I asked her to call and find out if the next transaction would be affected by the SBA and it’s not. Commissioner Cammick:

No but the $700,000 she called and made sure that would go to our bank and they said it couldn’t be but then they did. And now this next one $2 million ended up coming out of SBA instead of coming to us. Chief Bradley: Right but the next one will not be affected by the SBA. Brief discussion follows in regards to where Lee Co Tax Collectors are banking now. And brief discussion regarding those banks follows. Commissioner Cammick: We have enough to pay all this but then we would have used all our reserves. All we’ve been doing for the last few years building this reserve up we will wipe it all out if the money never came back obviously. If it comes back then we get to build it back up again. Bob Pritt: The build up of the reserves was that something that could be used for this type of a crisis? Jeff Tuscan: As long as the board at an announced meeting makes the decision to re-designate which you will need to do. We don’t have exact numbers so we are just talking generality. If you started the year with $2 million in reserves ; which looks like what could happen and you budget $400,000 a month payroll & operations not capital we should have theoretically used up $800,000 so far because taxes dollars never start flowing till now. Commissioner Cammick: Okay the year just started. Jeff Tuscan: So basically you to fund operations in the new fiscal year from your reserves, any government does. You usually have to fund Oct., Nov., Dec. from reserves and then your taxes start flowing well enough to fund you and repay your reserves. If that’s they way you budgeted. If we used up $800,000 and the tax dollars start flowing to you we should end up break even or still with some reserves positive if we maintain our expenses the way they’re budgeted. Let me throw a few kinks at you. You should break even or with some reserves if you don’t take if for capital, you operate out of your reserves, and the expenses happen randomly. Commissioner Cole: What do you mean don’t take it for capital. Jeff Tuscan: Spend it to build the building. Commissioner Cox: Beyond what we’ve budgeted. Commissioner Cammick: We didn’t budget reserves for the building. Commissioner Cox: If we have $2 million in reserves and we’ve already seen where we are going to loose $1 million and we do as we’re supposed to do according to the budget, correct me if simple math is not right, when we get to the end of the year we’re a million plus in our reserves because we only lost $1 million based on our budget. So your equation if it’s $400,000 a month $800,000 we should be at our reserve level or some what above, we still have a crisis we want to buy property that we’ve got money in the budget for and do we move forward, we make intelligent decisions based on these things. The whys, the reasons and the how comes will come to us as we progress though the year without question. Jeff Tuscan: If anything ever happened that ever proved a government should have reserves this is it. Mr. Pritt: We said that in 2004 after Hurricane Charley. Jeff Tuscan: Right. But you still hear it constantly. Mr. Pritt: It’s an example of a kind of crisis you never anticipated. Jeff Tuscan: If I stood here and tried to get you to do reserves 2 years ago cause I said this may happen nobody would ever believe it. Commissioner Cammick: We would this group. Commissioner Cox: No and especially with the different board.

Commissioner Elder: You are talking about the reserve balances if we go to the budget $1,810,000 was the Equipment & Improvement Reserve. Chief what is in that number? Chief Bradley: $1.5 proceeds from debt, $300,000 bay expansion transferred because we carried it from last year, $1 million we had in the budget for the station 3 and $187,960 in carryover, which gives us the total of $2,687,000. Commissioner Elder: My point is that $1.8 is not a real number that $1.8 million is proceeds from debt. Jeff Tuscan: But you did this budget before the year ended. We’re just looking at numbers that are going to be audited now, we’re preparing the books for your auditor, and you had to approve this budget prior to the end of the year. The way it shook out is that it looks like you ended up with $1.2 million net income at the end of 07, roughly and you carried $800,000 in. Commissioner Elder: The reason I think that happened was because the delay of the construction process. Jeff Tuscan: Yes it did its not the proceeds from debt. Commissioner Elder: And that’s the problem. Jeff Tuscan: That’s not the problem. Commissioner Elder: The problem with the delay of the construction project is the construction cycle still gets finished in this fiscal year so that pickup you made at the end of the fiscal year is now going to get spent this year. Jeff Tuscan: That’s why I said in my example taking capital out cause that’s the one controllable thing, that you have control over without damaging response times and lives. Commissioner Elder: You mean if we stop the construction cycle. Jeff Tuscan: Slow it down.

Next week the SBA may free up the money and this is a mute point. That’s the thing you can control. Commissioner Elder: We control that at a cost, if we start slowing the construction process or ask them to stop we spend a lot of money. Jeff Tuscan: I agree. Commissioner Cammick: The simplest way to look at it is and we don’t have those figures, the sick pay account that money is total reserve it’s just cash and that’s like $225,000 and then we have our operating reserve which that’s pure cash we can have that for anything we want $206,000, and then Impact $72,000 but we can’t use that and Equipment & Improvement $187,960 was carryover so you have over $600,000 of cash that technically we could take out and then replace it. Jeff Tuscan: You can also draw on the Equipment because you’re not going to pay that full bill. Commissioner Cammick: No we lease it. Jeff Tuscan: At the same time so you can draw it and as your tax money comes rolling in for the rest of the year you restore it. Commissioner Cammick: So there’s $600,000 so if we kept doing exactly what we’re doing right now and out of that $900,000 that the SBA has taken gives us $300,000 over the next 6 or 8 months we are exactly in the same shape except we don’t have this big chunk of money. Part of this chunk of money of course is in Fund B so that does throw a little wrench in it cause we can’t get Fund B out, but we also get a lot of tax money in as well to make up for that, even though we don’t want to be using our reserves I think to do all our budget that’s what reserves are for. So between this $600,000 and our $1.5 million credit line I think we can take our time and make sure we do whatever we do. Jeff Tuscan: Only other capital purchases that are not and you will have to decide as a board if you are going to slow construction and you’re right it does cost, whether you are going to take out other debt to keep it moving or you’re going to slow down other capital purchases that are not necessarily crisis at this point till you find out how SBA shakes out. Commissioner Elder: If we were to look at this budget as a total and determine, let’s say we took the conservative position and assume that we’re going to get all but the $518,000 back and someday if we get the $518,000 back we can put it back in. Which is where I think we should end up going, I would take the gamble on the other $400,000 to get to the $970,000 that we are probably going to get that back but I truly believe that $518,000 because that’s the 14% of the $3.7 million to be pulled out of the budget. If we’re to pull that out my recommendation would be to do that across the whole budget. Here’s the reason why the capital improvement projects if we slow or stop Bokeelia that’s going to cost us money and it gains us nothing because that can be reallocated over a longer period of time, it’s a single one time purchase you spread it over time as you pay the cost of the improvement project back. The capital improvement projects will be fairly simple to figure out how to reallocate it’s the operating expense part of the budget that gets tough I think this board has to decide how much of that $518,000 we’re going to take as a hit, catastrophic loss and how much of it are we going to roll into the budget. Commissioner Cammick: It’s almost impossible to loose more than 50% of that Fund B I would think. You’re planning on losing 100% of that. That would be a significant hit. Commissioner Elder: I don’t know that we’re going to loose 100% but I don’t think you can say with confidence it’s going to be 50%. Commissioner Cammick: No but I feel pretty comfortable with 40-50% we would end up with. Commissioner Elder: That’s why I said the board has to decide, what is the amount of money that this board is willing to just accept as a casualty loss? Whatever that amount is has to come out of the budget and if it comes back to us we are money ahead. Jeff Tuscan: As your financial advisor looking at the SBA issue as a total you have to figure interest income is going to be down because you are not going to earn it on the money they are holding and the other investment vehicles that are absolutely rock solid aren’t paying that kind of interest. Commissioner Cammick: They are reinvesting in short term, money market type things. Jeff Tuscan: Right. The interest income is going to be down so you have to look at that in the budget. The numbers you find every source we look at find out how much money the SBA really had is like grabbing at jello. One number that seems fairly consistent is they had $190 billion out of it $131-132 billion was FRS

(Florida Retirement System where your retirement plan is). Commissioner Cole: Is that stable?

Jeff Tuscan: That’s the issue. Commissioner Cammick: People can’t take a whole bunch out of that. Commissioner Elder: Have you been notified. Rich Crotty: The only thing I ever read the FRS didn’t have that large of % that it was really going to make a difference. Commissioner Cammick: They can’t have runs on it. Jeff Tuscan: The fund didn’t. It’s the run that cost the loss not the investment. Commissioner Cammick: They just increase the % we have to pay to make up for the reduced amount in the pot. Jeff Tuscan: Every year they do an actuarial study on that. Actuarial study says you’ve got to have X amount of money gong in to keep this thing healthy and funded. If they continue funding it the way they have been you are going to probably have really low investment earnings this year so that means contribution rates are going to go up. As a board you’re talking about cutting expenses your expenses may go up because contribution rates on FRS go up. The general feel of the whole fire community that its going to be a bad brush season which is overtime, operating expenses, retirement. So when you say cut over the budget in the line of work you’re in you’re 80-90% personnel cost it’s difficult to cut across the board when what you are here for is personnel cost. Commissioner Cammick: I’m not real happy about the fact that the tax collector invested money and they loose it and they want us to pay. Now if we do the same thing cause we invested the money in something that lost we lost $227,000 that we can’t have access to, so do we do the same thing the tax collector did and make other people pay for our error? Mr. Pritt: Not to stick up for the tax collector. Commissioner Cammick: That was a for instance. Mr. Pritt: Let’s not Monday morning quarterback this issue for one second, before this all happened 2 months, 3 months ago, a year ago, 2 years, 3 year ago the place that you would put your money where you thought it would be the safest, right here this was the place the default place it’s the state agency this is why there is so much government money in there because it was every bodies belief until a couple weeks ago that it couldn’t be any safer other than in treasuries. Jeff Tuscan: Absolutely that’s what I said earlier it was considered bullet proof. Commissioner Cammick: That’s why they call it investing and not collecting money there’s risk in everything and I only brought it up for the fact that we did the exact same thing and I don’t like what they did it and we’re trying to get our main budget is payroll trying to get our payroll to pay for our error that cost us $227,000. Mr. Pritt: Well don’t kick yourselves either this was the place. Commissioner Cammick: No that’s just they way it is. Mr. Pritt: It would be kind of like the Federal Government saying you ought to put your money in treasuries and all of a sudden have a problem with treasuries. Commissioner Elder: Yeah but it’s come to us as a surprise that this $2.1 million was in the SBA, in our conversation a week ago we believed that tax money was on it’s way to us. The discontent that Commissioner Cammick is expressing is we may have decided to put that tax money in the SBA but don’t decide for us, let us make our own decisions. Mr. Pritt: It’s a little bit like a sweep account. You don’t want the tax collector collect money and just have it sit there. Commissioner Elder and Cammick state now we do. Jeff Tuscan: It was considered safer than a bank. If you put it in Bank of America the difference is the state had the power to stop the run, if you put your money in Bank of America and there’s a run it’s gone. That’s why I recommended the other day don’t put it in one bank when you pull it out of SBA, because nobody can stop that run except the feds. Commissioner Elder: Back to where we are today; which is what I thinks important. We’re here regardless of how this mess got laid in front of us it’s in front of us and we are short $970,000 period and some interest that’s going to go with it. I do not believe that it would be fiscally responsible for us to move forward just like we are and use up the fund reserves and exit this year well into that $1.5 million credit line with nothing to operate on and in fact leaving the money that’s at risk being the sick account, the accounts Commissioner Cammicks talking about is true enough I disagree with exposing that, and I realize it’s all in one account it’s just numbers on a page but I think it’s wrong. I think it’s to aggressive I believe if you want to talk about bullet proof the sick account should be set aside and never touched cause it’s not our money. I think this is exactly why we talked about doing something else with that one of these days because the board can just reach in there and grab it if they want to and I think it’s wrong. Commissioner Cox: I don’t think we’ve begun to climb the walls of worry that’s going to be in front of us as the next 3 – 6 weeks and 2 – 3 months shake down. I don’t see an immediate reason to cut the fireman’s pay and to pull in the sick plate I think we need to continue if we have to go on basis of emergency meeting to monitor what’s going on if we reach a point in February we have to simply stop construction, capital whatever account we will have to do so. I really think an attitude of there’s not a lot here today that we can do except understand and learn and let’s plan on getting back together as soon as possible to share. Commissioner Cammick: What I need to know to make a decision and what every here needs to know is exactly what that money was when it came out and when we can expect to get it out, what was 14% of this 14% of that why was it 35% and not 14 and is that 15 just going to come back to us in 6 months so unless we know all those facts it would be nice that we could go along the way we are because we’re going to get some of that money back and then truly only use sick account, operating and those accounts just very big emergency if we needed some short term cash. Without that information I cannot make a good decision on what we should cut what we shouldn’t cut. Plus taxes are coming in now so we’re not going to have to worry about money for another few months so it does give us time to straighten everything out. I’m sure the chief has places he can find money as well. Commissioner Cole: I don’t think we’re going to know the answer to John’s questions for a couple of years. Commissioner Cammick: You don’t know my question then. Commissioner Cole: You wanted to know all the dots of the I’s and t’s of the dollars in the columns of what they were going to add up to be what we were going to get back what we weren’t and what our precise lose was going to be relevant to this budget that we had anticipated of $5.2 million of income. Commissioner Cammick: No that’s not what I actually wanted. Comment: Let him finish John. Commissioner Cole: I think we need to prioritize for the district over the next couple years what is most important to accomplish what we view as the mission. We are going to have the January 29^th thing even though special districts are supposedly exempt some how that’s going to get in there. This is a way for the politicians to get consolidation savings of tax dollars on special districts. I think it’s important that we set our priorities on the assumption that we don’t know where the exact monies. What the deficit is but it is going to be less. it is going to get tighter and tighter over the next couple of years. The one thing we cannot afford is a run on our staff, we cannot afford to send a message that we are not going to try to, we’ve been 2 years getting these salaries that they deserve, the sick account the stability for our personnel I feel like we were trying to put something together that they could live with. The last thing we want to do is send a message that well sorry folks we’re going to back peddle on this because of whatever reason. The budget we’ve got $600,000 budgeted for Station 1 Expansion now is Station 1 Expansion essential for our mission. We’ve got $400,000 budgeted for Station 4 land every body has to ask how essential is that. I can tell you my own feeling is that a Matlacha Station is essential for our mission. For our response times and for what we are trying to do to cover the district. I question whether $600,000 to expand station 1 is going to enhance our mission by that much. I would say for sure in my mind it is not worth reducing salaries, reserves, all these other things for $600,000. I’m with Bob on this reserve thing I think just as we find ourselves in this pickle after the 29^th of January we might find ourselves in another pickle. And we may need reserves to figure out what we’re going to do until October 1 of next year. This $600,000 that Bob’s pulled out of these various reserve accounts maybe what we’ve got to do to get that balanced because at some point we’re going to have to have a referendum to the people and say folks all the tax money all these referendum issues have been settled out the Millage the homestead etc. we cannot run this district and we need for you to approve an increase in funding this thing. That’s going to be 2-3 years down the road. My approach is to say which of these things can we cut out to not jeopardize our mission and to keep the best qualified firefighters we’ve got with the best equipment we can get them to do the job. Commissioner Elder: I think Dr. Cole you’re correct on the question of station 1 on the expenses, again the infrastructure cost is one time. If we’re going to go to Matlacha and expand Bokeelia like we’re doing we really, if there is something we could give up here potentially it might be that back meeting hall, but we have got to do something with the offices, if we’re going to have staff. That doesn’t have to be paid for in one year that can be spread over a number of years. I believe we can find a way to do the infrastructure things and push the expense out and maybe it is a referendum to finance the whole project but I think if Jeff sits down with the chief those infrastructures cost can be pushed over time. Just as the firefighters don’t want to impact their wages I also don’t think they want to see us start back peddling on services like you said. We want to be able to give the community what we’re trying to give them.

When the chief and I 3 years ago started talking about how to collect the money and make the district work with 4 stations in order for it to work we needed to build the stations, do the infrastructure cost and then add staff because if you had staff to man all that simultaneously to spending money for the buildings the budget was broke, we couldn’t do it. We could pay the staff that we need to operate the district if the infrastructure was paid for. Which is where we started going; and now this has put a major wrench in our thought process and that’s why I said that Mr. Tuscan and the Chief need to sit down and put pencil and paper and figure out how to juggle these numbers and if some bodies going to risk, if the firefighters want to get involved and say sure put some of our money at risk to keep us moving forward that’s their decision. I don’t want to make that call with their funds. Commissioner Cammick: The sick pay money whether the monies there or not it’s just a bookkeeping thing that our auditors would like to see, tax dollars guarantee their sick pay. It’s always guaranteed. Before we make all these decisions and what we plan on building and what we don’t plan on building you actually have to know the facts, we still don’t know the facts no one has given me any facts since the last time I asked 5 minutes ago, we need someone to give us facts on how much that money we expect to get in the short term, what it is and why they did what they did, until we get that we shouldn’t be talking about station 1 and expand that expand this. I’m a numbers person and I’m not going to make any decision without the numbers and we don’t have them. Commissioner Elder: Here’s why we have to talk about it. Jeff Tuscan: We have a budget that’s broke. Commissioner Cammick: Yeah but it might be broke and we know we’re worse shape off now than when we started the year you don’t know how much you don’t know if you’re $500,000, $300,000 or $900,000 until we get an idea of that you’re not going to know what to do, you know that we have places in the budget that there’s money that can be cut that isn’t going to affect anyone. New chief he’s not going to start October 1 cause it’s already past October 1^st so there’s money in the budget that was paying him. So there are all kinds of things in the budget that if we didn’t owe that could be adjusted. Commissioner Elder: That was fine when we were talking about the $225,000 but today we’re talking about $970,000 and with that kind of number whether it ends up being 500 or not the budget, I believe the budget has to be redone, we have to do a budget amendment to address it cause if we move forward blindly we’re not being responsible as Commissioners. Commissioner Cammick: Do a budget amendment set a meeting to do it but get the figures so I can participate. Commissioner Elder: I don’t think you are going to have the figures because the state won’t give them to us. Commissioner Cammick: No we know the figures we know what the figure is if I was to call down to the or drive down to Wilkinson’s office I’ll find out what that 15% is and I’ll find out how it works and get exactly when and why it’s like that. I already know the 14% I sat was on the meeting when they described bonds and % and what we expect. Commissioner Elder: At the risk of being tripe income isn’t until it does. There’s $970,000 out there that we cannot put in the palm of our hand. Commissioner Cammick: You can’t put our future tax dollars in the palm of your hand either. Commissioner Elder: It’s much more dependable than that $970,000 we can’t put it in the palm of our hands so we have to decide how much to that 970 that we’re going to count on the balance. Commissioner Cammick: You know how I feel and I’m not doing anything unless I get more information and so that’s it. Commissioner Cox: If we could amend the budget today to take care of this crisis with a vote of 3 to 1 then we could let the fourth person who didn’t vote go to Ken Wilkinson’s tomorrow and get the answer and when we met next week. Commissioner Elder: I’m not going to suggest we do the budget amendment today. Commissioner Cox: I agree. Commissioner Elder: What needs to happen Jeff and the chief need to sit down? Chief Bradley: I’m going to emphasis on that I want to back up a little bit FRS typically the rates change in July so we are potentially looking at a change of rates for FRS for 3 months right now it’s at 20.92% because of the drop that could be another shortfall for 3 months of the budget year so we need to consider that but it’s very important. Jeff’s going to learn every day now because other districts are involved also. What I am going to ask him right now when is a good time he and I can go sit down and go over my budget and report back to you on what we can do. Comment: This afternoon. Commissioner Elder: We have a workshop scheduled for Monday, we will probably be discussing this; we have a meeting on next Wednesday. Mr. Pritt: Why don’t you continue this emergency meeting till Monday, workshop you don’t normally take action. Commissioner Elder: I don’t know that we need to take any action before next Wednesday. But we do need to continue these discussions and be ready to take some kind of action by next Wednesday. Mr. Pritt: Wednesday is your regular meeting. Comment: Monday Workshop is at 9a.m. and Wednesday 19^th meeting at 5p.m. Chief Bradley: It will give you a chance to over the last quarter reports, look at what I anticipate as carryover if it is real or not compared to the budget. Jeff Tuscan: That would be a good time for amendment for the actual amount of carryover from 06-07. Cause it’s an estimate. Chief Bradley: I haven’t seen it he just brought it in to us. Commissioner Elder: Our expenditures in 08 are going to go up because of the construction dollars the pickup you saw at the year end is because we started late on the construction. Commissioner Cox: I think we have the talent the brains and the time guys to move forward with this over the next few days and weeks. I think and I could stay here the rest of the day but I think we are done. Commissioner Elder: We’re done. I want to say one thing because communication with Mr. Pritt and Mr. Tuscan if we need, the board if we have to declare and emergency and do something with the budget do a cut to make the district whole for the year we have the power to do that in an emergency situation. I’m saying this to get a message to these guys if there’s something you see something you know about that’s out there that’s worth dollars talk amongst yourselves contribute be involved this is all of us. This is not a mess we made in our own back yard this was made for us. I would suggest you have your people investigate your pension account. Commissioner Cole: From a cash flow stand point we are all right for the next month there are no problems that you see with meeting our obligations? Linda: No. Commissioner Cammick: We’ve got $2 million in cash. Commissioner Cole: I want to be sure people leaving the meeting understand even though we’re talking about emergency meetings and major changes there is nothing that we’ve got facing us that we can’t continue with our weekly and monthly commitments. Commissioner Elder; Right but remember the window to repair a short fall whatever short fall ends up being the window gets shorter as we move towards the end of the year so the sooner that we decide how we’re gonna handle this the softer the blow will be to all of us at whatever happens has to happen. Commissioner Cole: We won’t be fiscally sound by the end of the month one way or the other. Mr. Pritt: This is a state agency but it is not backed by the state.

We will keep our ears to the ground also we have several clients tied up in this also. Bottom line is you need to solve your problem. There is this provision where you can go to Wachovia they’ve cut a deal with the state you can go there and borrow funds. Commissioner Cammick: You are borrowing against the A Shares so you don’t have to pay a penalty. Mr. Pritt: You get to pay interest on the interest you should have been getting. Commissioner Cole: Bob are you hearing that the state is going to have to make it whole and at least get it to square one? Mr. Pritt: No. I’m not hearing that at all. Things are tough all over including the state and remember the state is down $1.5 billion when things get tough all over. Commissioner Cole: Things are tough. I think that underscores. Jeff Tuscan: That is one of the things that came out on the press release they sought to have the state guaranteed. Commissioner Cole: I just think that underscores our need a year or 2 down the road not just this minute. Mr. Pritt: This might just soften the legislature and you all need to start putting some pressure on the legislature. It happens to be at the same time that the legislature and the governor are doing a bad number on all local governments, budgeting and January 29^th thing all these things that they have been pounding on the local governments and now something like this and no body ever anticipated is really hurting you so I would be pounding on the legislature. Comment: The union and fire chiefs association are. Jeff Tuscan: The way they are trying to balance the state budget to this tax services and they keep saying it doesn’t hurt anybody but all the industries you don’t pay tax on. Brief discussion of this follows. Commissioner Elder: If tax collector should have invested the money the way they should have. From the time when did this $2.3 get deposited and the SBA knew they had a failure and allowed the heavy tax season to get deposits in November should they have been doing that? Is that responsible on their part? Or should they let us know immediately that they had a problem. Commissioner Cox: Dr. Cole’s comment I think this is going to take at least 2 years to shake it all out. Commissioner Elder: That’s the legal question but we don’t have to solve that tomorrow, it wouldn’t do us any good to get the answer. Mr. Pritt: No because if there is liability there would be a lot of people filing the same lawsuit and joining in. Commissioner Cox moves to adjourn with Commissioner Cole to second. Motion passed unanimously.

Meeting adjourned at 2:29p.m.

Respectfully submitted,

Linda Richter

District Administrative Assistant

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James Cole, Secretary