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15 MINUTES OF MEETING VISTA LAKES COMMUNITY DEVELOPMENT DISTRICT The regular meeting of the Board of Supervisors of the Vista Lakes Community Development District was held on Thursday, May 9, 2013 at 10:00 A.M. at the Vista Lakes Clubhouse, 8841 Lee Vista Boulevard, Orlando, Florida. Present and constituting a quorum were: Renee Hale Vice Chair Gary Schuett Assistant Secretary Jason McCright Assistant Secretary Frank Sebestyen Assistant Secretary Also present were: Gary L. Moyer Manager: Moyer Management Group Scott Clark Clark & Albaugh, LLP. Barry Roy Bowyer-Singleton Brian Smith Severn Trent Services (by phone) Russ Simmons Field Staff FIRST ORDER OF BUSINESS Roll Call Mr. Moyer called the meeting to order at 10:00 A.M. and stated all Supervisors were present with the exception of Mr. Cumello. SECOND ORDER OF BUSINESS Approval of the Minutes of the February 14, 2013 Meeting Mr. Moyer stated each Board member received a copy of the minutes of the February 14, 2013 meeting and requested any additions, corrections or deletions. Mr. Sebestyen stated the paragraph under the first order of business says I was not present, but I was present at the last meeting. On page 6, there was a motion regarding compensation for the Supervisors of $200. Was this correct? I thought the Supervisors were paid $200 per year. Mr. Moyer stated under the Statute, each Supervisor is entitled to receive $200 per meeting. However, if you view this as being a volunteer for the community, you can waive the $200.

16 May 9, 2013 Vista Lakes CDD On MOTION by Mr. Schuett seconded by Ms. Hale with all in favor, the minutes of the.february 14, 2013 meeting were approved as amended.. THIRD ORDER OF BUSINESS Public Hearing on Adoption of District Rules of Procedure Regarding Connection to the Master Surface Water Management System by Third Parties (Resolution ) Mr. Moyer stated we had lengthy discussion about this issue at the February meeting. Mr. Clark suggested adopting a rule to give us some leverage in these connections and some standing with St. Johns in regards to the approval of these connections. Mr. Clark stated the District had an informal policy for several years to go through a review process before entering into easements to allow third parties to drain into the system. We have some obligation to take drainage from the south of Vista Lakes, which historically has flowed through the basin and this property. We have to be reasonable. We are not adopting this rule to tell everyone to stay away, because this would be subject to challenge. We codified the procedure the District followed over a number of years where applications submitted to the District are reviewed by the Engineer to determine whether there would be any water quality or quantity problems. We took this step because St. Johns issued a permit for use of the 24 inch pipe, which suggests anyone using it has to follow rules adopted by Special Districts. I thought this was an invitation to take our procedure and codify it into a rule. This will give us some leverage if we think we are going to have a problem. There have been concerns about heavy rainfalls in the District and the way they sometimes tax the system to its limit. I recommend the Board adopt Resolution , which adopts Rule of Procedure 2.0. This is numbered 2.0 because the District already has Rule of Procedure 1.0 in place, which covers administrative matters, bid processes and other matters. The Statutes require us to hold a public hearing. At this time, it would be appropriate to open the public hearing for comments. After the public hearing, we will close the public hearing and the Board can ask questions or have discussion. Mr. Moyer stated at this time, we will open the public hearing. Not hearing any comments from the audience, we will have discussion from the Board. resulted? 2 Mr. McCright asked how often has the system been over taxed and how much flooding has

17 May 9, 2013 Vista Lakes CDD Mr. Clark responded during my tenure here, I am only aware of two occasions where the design capacity was exceeded and this was after extraordinary rain events. After those events, it took awhile for the water to run off the roads because there were low spots. I do not think we ever determined whether there was a defect in the system. It is designed to hold a certain amount of rain and when it goes over this amount, it takes some time to equalize. Staff has been diligent to make sure pipes are clear and systems are maintained so it can operate through its peak efficiency. However, if we had someone come in and add a volume of water, which would eventually lower the capacity of the system; we would have to carefully look at this. Mr. Roy stated the only area I know of is the isolated cul-de-sac where the short duration high intensity storms over tax the system. As far as the general master drainage system of Vista Lakes, I believe it is performing the way it was designed. We are just trying to insure any outside parcels do what they are required to do before discharging into the collection system leading to Vista Lakes. There are still several undeveloped parcels and they will be required to go through the St. Johns permit to retain their water quality on-site and have sufficient capacity to limit their discharge into the pipe; including the City of Orlando when they improve Narcoossee Road. Mr. McCright asked does anyone have recollection of the times the system was over taxed, which resulted in any flooding or damage? Did it ever get to this level or did we just have water in the streets? water damage. Mr. Roy responded you had water in the streets. One car parked in the street did get some Mr. Moyer stated it was fairly significant. Mr. McCright asked was it from Tropical Storm Debbie? Mr. Roy responded tropical storms are of a long duration and this is what the system was designed for. It was basically designed for these intense four and five inches of rain per hour storms, which we had on two occasions over 23 years. Mr. Moyer stated the analogy is like a sink or bathtub and the drain is an inch and you turn all of the spigots on full blast. It will keep rising until you turn the spigots off. Mr. McCright stated I am intimately familiar with these types of flooding issues. Did this come about because there are people petitioning to tap into our system? 3

18 May 9, 2013 Vista Lakes CDD Mr. Clark responded I am not aware of any specific requests, but I think we understand there is going to be development. The market is improving and we wanted to get ahead of it before we received a request. Mr. Roy stated prior to this we had four requests for individual parcels discharging. One of the last ones was the City of Orlando's retention ponds for Narcoossee Road. We reviewed their drainage calculations. There was a dispute between the City of Orlando and the Super Stop site. This is where the re-analysis of the system came up and the new permit was issued based on flows established years ago and verified. Everyone has to abide by the criteria. Mr. Clark stated in the Super Stop matter, some of the original written complaints suggested we were obligated to take a higher volume than we felt like we were, which was why it was brought up for discussion. Mr. Roy stated they were supposed to hold a 100 year storm on their site and slowly discharge or bleed it off. This is what everyone along this corridor should be doing. Mr. Sebestyen asked how do you envision this procedure working? I recall Mr. Cumello saying there was going to be fairly significant development along Narcoossee. We have a number of different developers looking for permits. Are we going to set up a subcommittee or have expert help to get us through this process? Mr. Roy responded they need to submit a Checklist Application Form, which requires two sets of drainage calculations and construction plans. Everything is then submitted to Mr. Moyer who forwards it to us. We review it and send it back to them. They are responsible for reimbursing the District for review time. Mr. Sebestyen asked what about the Board members? Mr. Clark responded ultimately the process result is the Board approving an easement based on the Engineer's recommendation. You are going to know either way because you have to approve the easement. It will ultimately be your duty if the Engineer has concerns, to deny the request or request additional work. Mr. Sebestyen stated it is almost like a Zoning Board. Mr. Clark stated it is not as discretionary as a Zoning Board. When you go for zoning, the Board can say with little or no reason they do not want it here. You will not have this discretion. If

19 you say no it will be for specific reasons as identified by the Engineer. 4 Mr. Moyer stated this was a good discussion. Are there any other comments?

20 May 9, 2013 Vista Lakes CDD Mr. Sebestyen responded yes. Item 6B seems to imply existing systems will have to submit an application. Is this the intent of the rule? and codes. Mr. Clark responded not making an application, but things have to be according to permits Mr. Sebestyen asked is someone looking at connections to the system? Mr. Clark responded I do not know it would be fair to say we are actively looking at connections and determining if there are problems. But, we would want the ability if we have a problem to go back and- say "Helve is why the problem exists and it is because this owner upstream violated the conditions of the permit they were issued." Mr. Sebestyen stated someone should look into it. Mr. Moyer stated there are certifications necessary from the owner and owner's Engineer. When the City and St. Johns permits it, we are part of the loop. As part of the final inspection process, those certifications are given. Mr. Roy stated there is ongoing monitoring of the system for maintenance in accordance with the plans. In the past, residents noticed dirty water entering the system and an issue was found offsite needing to be resolved. It is usually brought about by residents seeing something happen at the lake they are not used to seeing. There being no further comments, On MOTION by Mr. Sebestyen seconded by Mr. Schuett with all in favor, Resolution Relating to the Adoption of Rule of Procedure 2.0 Regarding Drainage Connections to the Vista Lakes Master Surface Water Management System was adopted. FOURTH ORDER OF BUSINESS Presentation of Fiscal Year 2014 Proposed Budget A. Fiscal Year 2014 Budget Mr. Moyer stated this starts the budgeting process for fiscal year We are governed by the provisions of Chapter 190 of the Florida Statutes, which requires the Manager to provide a budget to the Board on or before June 15 of each year. After your review of this budget and have discussion, you need to approve the budget. I differentiate `approve' from `adopt'. You are not adopting the budget with your action today. You are simply approving it for the purpose of setting a public hearing, which we are recommending for the August meeting. This Board 5

21 May 9, 2013 Vista Lakes CDD traditionally has had budget workshops between May and August where we will go through each line item. We are looking at keeping assessments the same as prior years. The administrative part of the budget has been fairly consistent over the years, but there was a minor adjustment to Staff Compensation. The biggest adjustment was for Insurance because we do not know the loss history on the group we insure through. I would be surprised if we see any drastic swings in the administrative budget. The other part of your budget is broken out into field services; where you have Field Management Contracts, Lake and Wetland Contracts, Onsite Maintenance, Electricity, Water and Sewer, Street Lights - Gated and Non-gated Communities, Common Area Renewal and Replacement, Sidewalks and Contingencies. These are well covered by existing contracts so you are not going to see much variation in these line items. We budget Reserves based on the Reserve Study. The original Reserve Study was completed in 2007 and updated in Based on previous discussions, I requested an update for the Reserve Study for this fiscal year. I should have this report well before the budget workshop. The $96,700 Reserve may increase or decrease. Interestingly enough, the last time we updated the Reserve Study, the Reserve amount decreased. There is an item on today's agenda for a fence replacement, which I recommend we pay for out of the Fence Replacement Reserve. The Reserve Study is working well for us and the purpose is to keep building up the reserves over time. This is a brief overview of the budget. We do not anticipate increasing assessments for the next fiscal year. Are there any questions or comments? Mr. Sebestyen asked why is there a $20,000 increase in Miscellaneous Assessment Collection Costs? Mr. Moyer responded the reason for this is under current law, the Property Appraiser and Tax Collector can take 2% of what we put on the tax roll. Orange County charges on a per parcel basis. We know we are over budgeting, but if they decide they are entitled to this money and bill us for $23,000, we are covered. Mr. McCright stated all it takes is a new Tax Collector to make changes. Mr. Sebestyen asked do you consider inflation in your budget projection for 2014? Mr. Moyer responded previous Boards wanted to see actuals for the prior fiscal year. This is why we have the 2012 column. The 2013 column is what we are currently operating under and the last column is what we anticipate for next fiscal year. 6

22 May 9, 2013 Vista Lakes CDD Mr. Sebestyen asked can you explain the graph on Page 9? Mr. Moyer responded the graph came from the Reserve Study and shows how they anticipate us spending the $96,700. We build it up and then will spend it down. Mr. Sebestyen asked what are they anticipating for 2037? Mr. Moyer responded I suspect they are looking at road replacements. You will understand this better when we receive the updated Reserve Study and discuss at your budget workshop. B. Consideration of Resolution Approving the Budget and Setting a Public Hearing Mr. Moyer stated if there are no further questions, I request the Board consider Resolution , which sets the public hearing for August 8, 2013 at 10:00 A.M. at this location. On MOTION by Mr. McCright seconded by Mr. Schuett with all in favor, Resolution Approving the Proposed Budget for Fiscal Year 2014 and Setting a Public Hearing for August 8, 2013 at 10:00 A.M. at the Vista Lakes Clubhouse, 8841 Lee Vista Boulevard, Orlando, Florida was adopted. C. Consideration Scheduling a Budget Workshop Meeting Mr. Moyer stated I assume the Board would like to schedule a budget workshop for June or July before your public hearing. Staff will contact you to coordinate your schedules. FIFTH ORDER OF BUSINESS Acceptance of the Audited Financial Statements for Fiscal Year 2012 Mr. Moyer stated I distributed the Audit for fiscal year ended September 30, 2012 from Grau & Associates. I will not get into the numbers unless you have any questions, but I would like to read some of the Auditor's findings. The first one is the Independent Auditor's Report. In the third paragraph the Auditor stated "In our opinion, the basic financial statements referred to above present fairly, in all material aspects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2012 and the respective changes in financial position thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America". This paragraph is typically referred to in the industry as a clean audit opinion, meaning the financial records we 7

23 May 9, 2013 Vista Lakes CDD provided to the Auditor as of the end of September 30, 2012, fairly represented our financial position of the District. This is an unqualified opinion on behalf of the Auditor. There are other reports the Auditor is required to make either by State Law or the Rules of the Auditor General. On page 22 is the Report on Internal Control Over Financial Reporting. As it relates to internal controls, the Auditor performed checks and balances to assure our financial reporting fairly reflect what we are doing. At the end of the fourth paragraph, the Auditor stated "We did not identify any deficiencies in internal control over financial reporting that we consider to be a material weakness, as defined above". Under Compliance and Other Matters, including compliance with laws, rules, contracts, Trust Indentures and bond documents; the Auditor states "The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards". The last item is the Management Letter, where certain findings are required either by State Law or the Rules of the Auditor General. This is also an opportunity for the Auditor to bring to the attention of management certain items that may not rise to the level of a material weakness of internal control. In the current fiscal year, they did not have any findings or recommendations. This was also the case last year. In Footnote 8, the Auditor stated "The District has not met one or more of the financial emergency conditions described in (1), Florida Statutes ". This particular statute defines what constitutes a financial emergency, one of which is you do not pay principle and interest on your bonds or have a significant decrease in the Fund Balance. By them saying we have not met one or more of the conditions of , you are not in a state of financial emergency. Page 20 of the Audit shows a snapshot of our activities in 2012 in terms of how much we levied in assessments, how much we collected and our total revenues. What is interesting is Miscellaneous was almost $23,000 more than we budgeted. It also shows our expenditures. Under General Government, which is the administrative part of your budget, we are $37,000 under budget. A majority of this amount comes from the Property Appraiser and Tax Collector collections. The field part of your budget was also well under budget. Overall, from last year's activity, we were able to set aside $167,000 in the Fund Balance. However, a portion of the $167,000 was Reserve funds. The bottom line is we had a good year and we added funds to the Fund Balance. With these clean reports, I request a motion to accept the audit and authorize me to file it with the appropriate State agencies. 8

24 May 9, 2013 Vista Lakes CDD On MOTION by Mr. McCright seconded by Mr. Schuett with all in favor, the audit from Grau & Associates for Fiscal Year 2012 was accepted and staff was authorized to file said audit with the appropriate State agencies. SIXTH ORDER OF BUSINESS Discussion Items: A. Discussion of Proposals to Replace Fence on Chelsea Harbor Drive Mr. Moyer stated the first discussion item is to discuss proposals to replace the wood fence on Chelsea Harbor Drive, which was severely damaged last month in a storm. Mr. Jeb Stewart and his staff came out and tried to save as much of the fence as they could, but the end result is the fence cannot be repaired. There are proposals in your agenda package, which Mr. Smith obtained. This expenditure falls well under your formal bid threshold of $195,000. When we reach this threshold, we have to place a notice in the newspaper and go through a formal procedure. We are not bound to take the lowest bid. Because Mossy Oak and Fence Outlet are close in price, I recommend the Board give Mr. Smith the discretion of choosing the vendor, based upon how fast they can get the work started and completed. Mr. Schuett asked did anyone consider a vinyl fence rather than wood? Ms. Hale responded the original fence was wood and lasted 12 to 13 years. Mr. Smith stated we considered a vinyl fence, but it gets dirty very quickly. It needs pressure washing two to three times a year. The wood fence would only have to be treated with a sealer once a year. In addition, wood lasts longer than vinyl. Ms. Hale stated with Mr. Smith's discretion, I agree with getting this fence installed as soon as possible due to all of the activity back there. On MOTION by Ms. Hale seconded by Mr. Schuett with all in favor, Mr. Smith was authorized to choose a vendor to replace the wood fence on Chelsea Harbor Drive. B. Ratification of Proposal from Reserve Advisors for Reserve Study Mr. Moyer stated as I indicated to the Board earlier in the meeting, since the Reserve Study had been budgeted as part of our Reserves, I authorized Reserve Advisors to undertake this work for $2,900. We will be receiving their report shortly. I would like Board ratification of this proposal. 9

25 May 9, 2013 Vista Lakes CDD On MOTION by Mr. Sebestyen seconded by Mr. McCright with all in favor, the proposal from Reserve Advisors in the amount of $2,900 was ratified. SEVENTH ORDER OF BUSINESS A. District Manager Manager's Report i. January, February and March Financial Statements Mr. Moyer stated through March 31, 2013, we budgeted $1,188,894 and collected $1,110,341, which is 93% of our non ad-valorem assessments. According to the notes in the financial statements on Page 8, this is exactly where we were last year. This does not include distributions from the Tax Collector, which may have been made from collections received in late March. Taxes are due at the end of March and I would expect the vast majority of the other 7% to arrive with the distribution made in April. On the expense side, there is nothing of significance to highlight. We are well under budget for administrative expenses, slightly over budget by $10,000 for field expenditures, but well under budget for landscaping. Overall, we are $80,000 under budget at this point in time. ii. Check Registers Mr. Moyer stated the check registers were provided to the Board. After the Board's review, I request a motion to approve. On MOTION by Ms. Hale seconded by Mr. McCright with all in favor the financials and check registers for January, February and March were approved. iii. Discussion of Action Item List Mr. Moyer stated the Action Item List was provided to the Board. Some items have been completed while others are ongoing. B. Field Operations i. Field Management Report ii. Agronomist Report Mr. Smith stated I provided a Highlight Report to the Board. If you have any questions, I would be happy to answer them. We are making repairs to all of the lighting and transitioning to the LED fixtures. We have only replaced one so far and will replace others as they need 10

26 May 9, 2013 Vista Lakes CDD replacement. There is no labor cost. You are only being charged for the fixture, which costs $150. I am going to ask Mr. Simmons to give his assessment of the irrigation system. Mr. Simmons stated we only have one problem with a valve underneath the sidewalk, which is not functioning properly. We had to cut a portion of the sidewalk out to replace the valve. Everything else is running smoothly. C. Attorney's Report There not being any, the next item followed. D. Engineer's Report There not being any, the next item followed. EIGHTH ORDER OF BUSINESS Supervisors' Requests Mr. McCright stated in terms of the Water Management District, in the future we are going to be handling more stormwater issues for a regular or excessive event. FEMA provides funding for projects falling into the category of hazard mitigation and are taking steps to prevent future storm damage. It is not necessarily hurricane damage, but it could be heavy rain. One of the primary functions of this funding was to improve the stormwater systems. I would like for the Board to look at our current stormwater system. If it just takes a heavy rain event to come close to straining it and as we start to take on more development, we should look at whether there is anything we can do to improve capacity. FEMA will cover 75% of the cost of a project if it falls under the category of mitigation. Those funds are distributed by State Law through a County by County process of a Local Mitigation Strategy Group through the Orange County EOC. The members of the Local Mitigation Strategy Group are shareholders throughout the community. Most of them are Government agency representatives of major towns in Orange County, UCF, School Districts and hospitals. As a Special District, we would be eligible to apply for this funding. I know so much about this because I have been a Manager of the State for five years up until February. Participation in the Local Mitigation Strategy Group is voluntary and they meet quarterly. It is triggered by a Presidential declared disaster. I do not think Orange County has had a disaster since the 2004 hurricane season. Seminole and Volusia Counties were declared disaster areas due to damage caused by Tropical Storm Debbie and the floods occurring in It is not under the realm of possibility for Orange County to obtain access to this funding in the future. I just want us to position ourselves to be eligible to go after it, if there are improvements we can 11

27 May 9, 2013 Vista Lakes CDD make to the stormwater system, which FEMA could pay for. Obviously if the Federal Government will pick up 75 cents on the dollar towards the cost of the project, this is something definitely worth considering. Normally, the jurisdictions receiving this funding are those who participate throughout the year. The question I have for the Attorney is whether we can participate as a Board. I would like to volunteer since I know the most about this program. There is an unwritten rule where if you do not participate when money becomes available, you are the last in line when the money is distributed. Therefore, it would be prudent to look into this, especially as we are seeing hurricanes get worse and worse. Florida has been lucky in dodging a bullet with Isaac, Irene and Sandy; but our luck is going to run out next year if not this year. We are so long overdue for a storm to hit. Of course, Charlie, Francis and Jean taught us Central Florida is not immune as we once assumed we were. I want this Board to be aware this funding is out there and we are in the position to ask for it. This is something I would like the Board to consider because next month we start the next hurricane season. Mr. Moyer stated maybe I misunderstood. I think I heard you say monies are available to make corrections to existing systems before a storm event, but then you said we could not get the money until the event was declared an emergency by presidential decree. I do not see how those are consistent. Mr. McCright stated the money is designed not for the system impacted by the storm. Let's say we have a hurricane this year and there is damage. The Federal dollars would come from public assistance to repair the damage to infrastructure. You can also improve it while you are preparing. This program has a mitigation grant program only for those areas not directly impacted by the storm. What I am recommending is to get involved in the planning process at the County level before a storm hits. Mr. Moyer stated I understand. Thanks for the clarification. Mr. Clark stated to answer Mr. McCright's question, there is nothing to prevent the Board from appointing a delegate to serve on this Local Mitigation Strategy Group. I am not familiar with the process and how it works, but the Board could appoint Mr. McCright to attend and report back. 12

28 May 9, 2013 Vista Lakes CDD On MOTION by Mr. Sebestyen seconded by Mr. Schuett with all in favor, Mr. McCright was appointed Liaison for the Local Mitigation Strategy Group to attend meetings on behalf of the Board. Mr. Roy stated for clarification purposes, the St. Johns permit was amended to the predevelopment flows. Therefore, as these adjoining properties develop, there should be no more water leaving their site than currently in the unimproved state. The system should already be experiencing the water flowing through there, provided they have the proper retention systems on their properties. I believe Vista Lakes went through three hurricanes and several tropical storms in 2004 and the system functioned fairly well. I do not know of any other flooding besides the one culde-sac and this was not during those hurricanes. This was due to a shortterm, high intensity storm. As far as the overall system, I believe it functions well. The City of Orlando is currently going through a FEMA map review and revision, but I do not know when this is going to be completed. This has been in process for several years and all of the properties in Vista Lakes had previously been filled to an elevation such that they are out of the flood plain. However, there may be a back corner adjacent to a conservation area, which is slightly lower. I think the system performed well over the years, but it is always good to be prepared. The only damage we have had has been wind damage in the community to fences, walls, trees and landscaping. Mr. Cumello witnessed several hurricanes. He lives across the street from the main lake. The lake does stage up, but the fluctuation is going to be four feet so in a hurricane event, this lake will be up four feet from where it is currently and a foot below the observation deck. It should bleed out down through the canal system providing everything in the canal system functions the way it has been and does not have fallen trees or obstructions downstream. Ms. Hale stated some guys were here in March ripping all of the drains out. I asked them what they were doing, but they did not give me much of an answer. Mr. Roy stated this was a City-wide drainage review where they were taking elevations. Ms. Hale stated they did not seem to know where each drain flowed to. The one by my property does not flow anywhere. I thought they would know this basic information and they did not know. 13

29 May 9, 2013 Vista Lakes CDD Mr. Roy stated the City should have provided them with the as-built plans. Those were all submitted when the project was built. It was a mad rush at the end of the job and the City brought in a bunch of people who were not familiar with the area to complete the job. Ms. Hale asked the Mockingbird property between Vista Lakes and S.R. 528 has not been developed because of the bombs. Was it ever released from the City? There was supposed to be a big project. I am curious as to whether or not it was ever approved for development. Mr. Roy responded to my knowledge, most of the property south of Vista Lakes are wetlands and not for development. I know the City released other properties; such as the one at Chickasaw Trail and Lee Vista Blvd., which were planned for townhomes. NINTH ORDER OF BUSINESS Audience Comments There not being any, the next item followed. TENTH ORDER OF BUSINESS There being no further business, Adjournment On MOTION by Mr. Schuett seconded by Ms. Hale with all in favor, the meeting was adjourned. ary L. Moyer Secretary V-ierr-Chairman 14