MINUTES OF MEETING DEER RUN COMMUNITY DEVELOPMENT DISTRICT The regular meeting of the Board of Supervisors of the Deer Run Community Development District was held Wednesday, June 7, 2023 at 6:05 p.m. at the Island Club, 501 Grand Reserve Drive, Bunnell, Florida. Present and constituting a quorum were: David St. Pierre Chairman Gail Lambert Vice Chairperson Darrell Broom Supervisor Andre Poulin Supervisor Greg Dean Supervisor Also present were: Howard McGaffney District Manager Katie Buchanan District Counsel Peter Amans District Engineer Kayla Rinker RMS Rich Gray RMS Alison Mossing RMS Darrin Mossing GMS Several Residents FIRST ORDER OF BUSINESS Roll Call Mr. McGaffney called the meeting to order at 6:05 p.m. and called the roll. SECOND ORDER OF BUSINESS Public Comments Ms. Jones stated I have questions about item 9, allocation by unit type. I tried to figure out how our fee structure came about and most of what I find is about ERUs. Does anyone know what the initial offering stated, which is how they set up this fee structure? There is a motion to accept the proposed budget and in that propose budget I believe you would have to change the methodology. Is there any kind of vote that is going to happen or is this already decided and we DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 2 are going to push through the new budget based on a new methodology but no one seems to know what that is. Mr. Mossing stated it was based on equivalent residential unit factor, which is common in our industry for allocating capital assessments to lots based upon their lot size. Many years ago they went through those calculations for water, drainage, roadway trips and they went through a more complicated detailed calculation, now they have kind of wrapped those all into an ERU factor, equivalent resident unit, which captures all of those details into one unit and they are assigned based upon lot size. Generally speaking, a 50-foot lot would be 1 ERU and a factor below that would be a 40-foot lot at .8 ERU and the larger lots would be a factor of that. Ms. Jones stated that explains the question that everyone has that is dividing us as a community. If that is how it is derived and it is not because you have more and I have less or you use the amenity center and I don’t. I think it is important for everyone to understand what an ERU is and how this methodology came about. Mr. St. Pierre stated to answer the second part of your question, the methodology is not being changed at this moment, nor is the budget being finalized tonight. We are going to talk about the budget later and make some adjustments to it tonight with a high-end number to go forward for our public hearing. We have a meeting in July and in August we will adopt the budget. Ms. Jones stated we haven’t done a study of our capital assets to know what we need to be reserving for future maintenance. Do we have a baseline? How do we know where to set our budget? Mr. St. Pierre stated before we were an all resident board, we had no reserves. Last year was the first year we added reserves. There is going to be some capital improvements we will address later in the meeting. We are still new at this and we are working on it Ms. Fetner stated I want to address no. 9 as well. Ms. Buchanan stated the top reflects the existing methodology, the bottom reflects the budget if everyone had the same ERU. Ms. Fetner asked on the bottom one, are we going to have a public hearing and as a property owner will we be able to vote or is the vote by the five board members? Ms. Buchanan stated if the board decides tonight that they would like to move forward with a change to the assessment methodology everyone in the community would get a letter DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 3 describing the change and notice of a hearing date at which everyone could again come and provide public comment either in writing or in person, then this five-member elected board would vote. Ms. Fetner stated let’s address the elephant in the room, David, Andre, Greg, Gail and Darrell, you were elected by the homeowners to be our voice and I hope you would cast your voice as the voice of the community, the voice of the majority. Mr. Rumbers stated as I look at the variable rate, the 40,50,75 foot lots versus the identical rates for each one for maintenance. We have a five-member board that will make the decision as to whether we change it, it seems that two members of the board are in the 75 foot lot category and they would be influenced by having a cheaper rate if they vote for the uniform assessment. I suggest those two members not vote for that particular item and let the other three members of the board vote. Mr. St. Pierre stated we all have an interest in what the rates are. Mr. Poulin stated I live on a 75-foot lot and will recuse myself from voting. I do support the flat funding. Ms. Lambert stated I also have a 75-foot lot and have been here since 2018. I will also be recusing myself. I do believe it is an unfair system. Mr. Broom stated I am a 50-foot lot owner, there are two pieces to it, one will not change, the other piece is what we are talking about potentially changing. The 50 and 75’s would save and the brunt of the increase is on the 40-foot lots, of which DR Horton is the majority owner. Mr. Lawson stated when we moved in we were given a cost of these fees and what we would pay and what we would expect to be charged annually. Why are we having this discussion on no. 9 when we knew that in the first place? Why are we trying to change something when the information was given to us and it was accepted and moved on at that point? Mr. St. Pierre stated we have gone from a DR Horton board to a resident board. The discussion tonight is if we change the methodology how it impacts everybody. Mr. Lawson stated we are in a 50-foot lot and we stand to gain from this but I am not in favor of it at all. I would rather pay my share and not screw that group over. You have two people who recused themselves. What is the policy on voting when you don’t have a full board vote? Ms. Buchanan stated the majority of the voting members. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 4 A resident stated we all came here knowing what we were walking into and we should just live with it and not try to change anything. We are a community. Ms. Marshall stated no one on the board owns a 40-foot lot so no one will be harmed by the vote. There are people here who will be harmed by that vote. We signed a contract understanding how much we were going to pay. It is like have a 30-year fixed rate mortgage that suddenly changes to an adjustable rate and we have a say about it. Ms. St. Pierre stated I want to discuss the pickleball courts. Why we have to take it off the calendar and go to first come first served, I don’t understand. It is a community building, it is open, anybody in the community can come and play. Why is it okay to reserve bocce courts but not pickleball? Mr. Poulin stated it is later in the agenda, but we are going to change that and allow it to be listed. Mr. Boswell asked what was the relationship with DR Horton? Ms. Buchanan stated the history is complicated. In 2007 the district was established by the landowner and they essentially abandoned the project, that is why there were only six homes. It stayed inactive for a large number of years then I think it was in 2017 DR Horton bought the property and based on the statutes the landowner gets to control who is on this board until two things are met: six years from establishment, which had passed, and 250 registered voters. At the time there were only six homes so Dr Horton controlled the board until four years ago. The statute that requires that you start rotating board seats to residents that live here happens two at a time until a full resident board is in place. There were five years where Horton was in charge of developing the property as the landowner and their representatives also served on the board. What they were able to do at that time was issue debt in 2018 to get additional funds to finish things like this amenity center and they were in a position to establish a lot of the fundamentals that this board is now working with to make their own. Ms. Reese stated I want to see how it was implemented to use the ERU to assess the O&M fees. Mr. Lambert stated what we are talking about now is operations and maintenance costs. We all get the same benefit for different costs. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 5 A resident stated everybody is a Flagler County resident, they all use the parks, but they all pay a different property tax. I think item 9 should be tabled until the county and the city charge the same tax to everybody in the county. A resident asked who made the decision to make everything equal when we came in we knew what we were going to pay. I don’t think anybody should be paying for the difference to make it equal. Build a park or basketball court, something for the community rather than raising everyone’s taxes to make it equal. Mr. St. Pierre stated we had a budget workshop in April and a lot of people came in and the idea of changing that came out of the budget workshop. We sent it to management, they came back with numbers and that is on the agenda tonight. Nothing has been decided. A resident asked when was this board formed? Mr. St. Pierre stated Gail has served for four years, I replaced someone I’m going into my third year. Andrew and Greg and Darrell were elected this past fall. Ms. Buchanan stated there has been a board since 2007 but that was the original landowner who then became DR Horton a decade later. DR Horton appointed Gail to have a resident voice on the board and they did the same with Bob Barnes. DR Horton appointed a few before they had to, then in 2020 the first two seats were put on the general election ballot. Going forward there will be alternating even years either three or two on your ballot for residents to vote for. A resident asked how do we see the minutes of all these meetings? Ms. Buchanan stated if everyone will look on the agenda you will see deerruncdd.com, that is the district website. Every month the agenda package that the board has in front of them should be posted on this website so you can see more than just this agenda page, you can see all the documents that the board is going to be considering. As to the minutes specifically you will have in the agenda package the draft minutes from the last meeting. They don’t become final until the board approves them. The meetings are advertised in the newspaper and they are also listed on the website. A resident asked when was the changes to the lot size fees first talked about? Ms. Buchanan stated this history is when the district issued bonds in 2018 they established with mail and published notice and a hearing the ERU allocations that we used for the bond. Subsequent to that time the district has applied that same ERU allocation to its DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 6 operation and maintenance budget. What that means is that every year the district will meet and have a hearing on the assessments and the budget, that I believe is scheduled for August. They decided in May/June this is what we think the budget is going to be and it is generally the maximum that they expect. If that max causes assessments to increase from the previous year, everyone will get a mailed notice of what their proposed assessment would be and the hearing date and time. What we are doing tonight is giving the board an opportunity to talk through this in public because they can’t talk to each other outside of the meeting. The reason they have to talk about it tonight is because they have to determine which column they want to go down for their proposed budget they are approving tonight. A resident asked are you talking about property taxes? Ms. Buchanan stated they are on your property tax bill, but they are special assessments levied by the district. A resident asked when did the board decided they wanted to make this change? Ms. Buchanan stated as David described it came up at the budget workshop in April, but they have not yet made a decision. I’m talking about the change the assessment allocation, it is not the amount of costs the district has, it is how do we break it apart. We have had a lot of conversation about that tonight. Another agenda item we will consider is the proposed budget and that is going to be the approval of all the costs, which are increasing because everything is more expensive now. It is a two-pronged approach for everyone to keep in mind. Some of the numbers you may have seen probably incorporated both the change to the allocation of the assessments and the proposed increase due to increased costs to the district. We will do our best to highlight that. Mr. Wishell stated the ERU is not used to allocate the operations and maintenance assessments for amenities; it is spread out equally. If one part can be done equally why aren’t both parts done equally? A resident stated I don’t think that proposed change is fair to the 40-foot lots. A resident asked I don’t know how you arrived at the lot size to be the running factor on raising the costs? Shouldn’t it be justified in square footage of your home versus the lot? Mr. St. Pierre stated we inherited the methodology as it is and our discussion tonight is dealing with changing the methodology. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 7 Ms. Buchanan stated every CDD we represent does it based on lot size compared to square footage of the home. The logic for that is the infrastructure the CDD built, operates and maintains, the costs related to that are generally in line with lot development as compared to home size. That is the basis of using lot sizes compared to residential size. Ms. Lambert stated the other option would be to have it all equal. Ms. Boyd asked are we anticipating more operating and maintenance expenses in the future? Mr. St. Pierre stated absolutely. Ms. Buchanan stated I want to be clear, the owners of all the lots pay assessments whether they have a house on it or not. Additional houses aren’t necessarily going to contribute more to the budget because they already pay towards the budget now. But, there may be additional costs related to heavier usage of the amenity center or there might be more cars on the road that damage landscaping and irrigation so there will be costs due to growth but not necessarily because you are getting more houses. Ms. Boyd asked do we have any other choice or do we just have the one choice? Do you need more time to come up with other alternatives? Mr. St. Pierre stated I don’t think this is going away any time soon, the budget is never going away. We love having people participate, everybody on the board has a committee they work with on things such as contracts and landscaping. This is the only choice we have right now, but we will always explore other avenues as we move forward. Ms. Braun stated on item 12, discussion of amenity room rentals, every community I have lived in we all had the opportunity as a member of the community to have a birthday party or anniversary party in our clubhouse because we feel that we own this clubhouse. I heard rumors that we are shutting that down and we will not be able to do this anymore. If that is the case, I think that is wrong. We can eliminate outsiders coming in but for us who own this property we should be able to have a birthday party and invite friends and relatives. Mr. St. Pierre stated we suspended the rentals for 90 days so we could look into it with the staff. They are going to have recommendations about that tonight. We had a lot of issues with rentals on holidays and our residents were not able to use the facilities. THIRD ORDER OF BUSINESS Discussion of Amenity Suspension Privileges DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 8 Mr. McGaffney stated you were notified of an incident that spanned back to April. The suspension is still active, I have notified the resident and his wife that the suspension of privileges still stands until the board can get together. Unfortunately, as a result of the incident, a court case has been filed, it is still ongoing and my recommendation based on discussions with staff is continue the suspension. The other members of the house can still use the amenity facilities but the one individual should still be suspended until that case has worked its way through. If you want to do more than that you can talk about that and Katie can guide you through any legal questions. Mr. St. Pierre stated I was witness to a few instances at the amenity center the last couple weeks and I’m concerned about people’s behavior when approaching our staff. Our staff is paid to be here and the amenity rules are the law of the land, the staff are the final say as far as I’m concerned. I witnessed very poor behavior from adults showing disrespect to our staff. That can’t happen anymore. I’m going to recommend to Alison that we start formalizing a policy that if we get into a situation we start losing our privileges. I recommend we start taking action against people who don’t want to follow our rules. On MOTION by Mr. Dean seconded by Mr. Poulin with all in favor the suspension will stand until the case works its way through the court system at which time it will be addressed by the board. FOURTH ORDER OF BUSINESS Consideration of Audit Committee Ranking of Proposals for Fiscal Year 2023 Audit On MOTION by Mr. St. Pierre seconded by Mr. Broom with all in favor the recommendation of the audit committee of Berger Toombs being ranked no. one was accepted. FIFTH ORDER OF BUSINESS Consideration of Aquatics Management Proposals Mr. Gray outlined the services in the proposals for lake management services from the different vendors. On MOTION by Mr. Dean seconded by Mr. Broom with all in favor the proposal from JJ Aquatics in the amount of $2,0893 was DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 9 approved and district counsel was authorized to prepare the agreement for this scope of services. On MOTION by Mr. St. Pierre seconded by Mr. Dean with all in favor staff was authorized to terminate the agreement with Applied Aquatics in accordance with the terms of the agreement upon the successful negotiation with JJ Aquatics. SIXTH ORDER OF BUSINESS Consideration of Proposals for Internet and Phone Services Mr. Broom stated I had to adjust some of these figures. Looking at switching from AT&T and Direct TV and moving to Spectrum for telephone, internet and TV. Currently we are paying close to $385 per month with an internet speed of 120 mg and the quote from Spectrum with 635 mg, the wireless internet backup phone and TV with 1 HD box would be $191.15 per month for the first year. That will save us roughly $114.45 per month. There is $20 extra per line that still brings year one at $271.15. Roughly $1,373 savings per year. Year two that will go to $281.15 which still saves us $94.30 per month or $1,131.72 per year. I propose we switch to Spectrum and there will be no need to increase the budget for the phone and internet at the amenity center. On MOTION by Mr. Broom seconded by Mr. Poulin with all in favor staff was authorized to terminate services with AT&T/Direct TV and to switch to Spectrum for phone, internet and TV at the amenity center. SEVENTH ORDER OF BUSINESS Consideration of Yellowstone Proposals A. Phase 4 Addendum This item tabled. B. Amenity Center Mulch This item tabled. EIGHTH ORDER OF BUSINESS Discussion of Operations and Maintenance Assessment Allocation by Unit type DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 10 Mr. McGaffney stated in your agenda is a comparison of what the current budget would look like as presented. The top three tables represented what it would look like if we went with the current ERU, status quo; the far right table that says combined and you can see the increases by the units. The board asked at the workshop to look at changing to an equalized 1 ERU for the admin, O&M and reserves as well as the amenities and the totals are in the bottom right hand corner table. Ms. Buchanan stated to help everyone follow along the two numbers you are going to compare, the column heading is, per units gross. You would look for the lot size you are interested in and track it along to the column that says, per unit gross and do that at the top of the chart and at the bottom of the chart and that is how you see the difference between the two assessment allocations. Mr. McGaffney stated those are the gross, there is an opportunity if you pay your tax bill in a timely fashion you could receive up to a 4% discount. The county charges a 2% collection fee, that is why it is grossed up 6%. Mr. St. Pierre stated I asked a couple times about the golf course and commercial lots. Somebody was supposed to get back to me on how we increase reserve contributions to us. Mr. McGaffney stated, currently the contribution of the golf course is based off the cost share methodology of the cost share agreement and that revenue is included in there, for the commercial and golf the assessment is based off the ERU factors. Mr. St. Pierre stated I asked about the contract on that, how we can change their assessments. Somebody was supposed to get back to me on that. Mr. McGaffney stated I did look into that and I’m working with the engineer because there are new ponds coming over from Phase 4 or 5 that might impact the golf course as well. From the current review of the agreement there is nothing more that can be changed from it unless they have an impact on the cost share part of it, unless they pick up more pond frontage on their site. The agreement is sound, there is nothing I can change out of it. Mr. St. Pierre asked Katie, legal opinion? Ms. Buchanan stated the agreement has been negotiated and signed. We could also propose an amendment to it, but the golf course may not agree to it and then our only ability to DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 11 try to say, this agreement shouldn’t stand is a more data driven analysis that shows that for some reason the golf course uses the stormwater system more intensely than they are paying for. Mr. Poulin stated everyone who reached out to us by email, text and by phone, thank you for the input. There were a lot of comments and different ways that people thought this was being built. I will share three things with you. Someone quoted that everyone is assessed property tax based on square footage and value of their home and that is how the CDD assessment are. There was a highlighted email that I was sent that talks about dimensions and road frontage. There are three frontages, 40-feet, 50-feet and 75-feet. All that talks about is your road frontage and different areas of the community. It has nothing to do with our lot size, nothing to do with how deep or wide your lot is, it doesn’t talk about how big your house is. The property tax is based on a lot of different things such as the size of your house, the value and things like that. In the community the lots are all different, some bigger, some smaller, some deeper, some on angles. The CDD assessment is based on the street frontage. People in the 40- footlots will take a hit if we change it. There are 444 homes to be built that are 40-foot lots and now there are about 130+ that have been sold and occupied. To get fairness into the community where everybody pays the same, we are asking you to pay another $111 per year. Somebody did a calculation and it is 30¢ a day. You are taking a beating this year with mailbox issues, pond issues, drainage issues and now we are asking to possibly spend more money and I’m sorry about that. This whole system was designed by DR Horton, it wasn’t designed by this board, numerous times at the board meeting DR Horton was asked to talk about it and they didn’t want to do it because it helped them out, it helped sell the bigger lots and move the pricing up. I’m going to recuse myself, I think it is only fair, I do have something to gain financially and I’m here to represent all of you, not just a small neighborhood. I encourage the three board members who are left to make a motion and pass this so we can have a public hearing and hear more from the residents as to how it may or may not affect them. Mr. St. Pierre asked Katie, will we only have a public hearing if we pass this? Ms. Buchanan stated you will have a public hearing on your budget, which will include any increased costs you will have. You will have a public hearing on your assessments, which we levy operation and maintenance assessments every year and if you choose to change your methodology you would have a third public hearing. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 12 Ms. Lambert stated I said at the beginning that I will recuse myself, but I would like to second what Andre said. Mr. Dean stated so that everyone understands the magnitude of everything. The development is designed for 444 40-foot lots, 338 50-foot lots and 61 75-foot lots. Actual residents at this time 40-foot lots is 143, 368 50-foot lots and 61 70-fot lot owners for a total of 572 lots out of 843 total. The remainder, roughly 300 lots, DR Horton owns and they pay as a 40-foot lot. If we keep everything the same the numbers are as is. If we change the methodology then the difference would be the 40-foot lots $112 more than what was stated earlier, 50-foot lots would be $61 less and 75-foot lots would be $488 less. There is a lot of misinformation going around about it, so those are the numbers we are looking at. I could possibly make an argument for either side. We are looking at the piece of the puzzle that has to do with what you can enjoy out of the community, the pool, amenity center and taking care of the roads and common areas. The other piece of your CDD fees is the bond repayment and that is not going to change. Mr. Broom stated like Greg I can make a case either way. The $112 is a lot to some folks and I think this is something we should look at doing but I’m wondering, is now the time to look at it. Should we be getting our budget in line that we inherited, rein stuff in to get a better idea of our budget before we start moving stuff around. Mr. McGaffney stated if you did nothing and kept the ERUs the same I don’t think there is a motion. We are going to make that motion when we review the budget and assessments. If you are going to change it now is the time to do that and give direction to staff to begin that work and I believe there will be some additional costs from the legal side and our side to prepare that methodology so it can be ready for the August public hearing. After the discussion a motion was not made, and Mr. St. Pierre stated there is no motion so the matter is not moving forward. The board took a short break after which the meeting was reconvened. NINTH ORDER OF BUSINESS Consideration of Resolution 2023-06 Approving the Proposed Budget and Setting a Public Hearing Date to Adopt DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 13 Ms. Buchanan stated the board has already had a budget workshop where they sat down, reviewed the numbers and came up with what they believe to be a proposed budget. That budget is in the agenda package and copies of it were distributed to some of you. The board is going to go through that proposed budget and decide whether they want to make any modification and right now they can increase it, decrease it, allocate money between line items. Once this meeting is closed the proposed budget serves as a cap at a maximum amount. That is a maximum both to the assessment level that will be levied against individual homes and the maximum amount as to the expenses that the district is going to spend. Once that proposed budget is finalized if it results in an increase in assessments and only if it results in an increase in assessments then a letter will be mailed to every person who lives in the community or owns a lot in the community explaining your annual change. It will say our assessment last year was X and your assessment this year is going to be Y. It will also identify what unit type you have and if you have a question you can see that on the notice and it will include your ERU allocation. We talked about that a lot and that way you can go through and see all if this information on the notice. Most importantly, it will notify you of the date, time and location at which time the board will adopt its final budget and levy its annual O&M assessments. Unlike your debt, the board considered O&M assessments every year so we cannot ever assume that the O&M assessment is going to stay the same, it will likely change just because costs are increasing, the level of service you want may change, but that is why you will get an annual notice if your assessment increases. When the board comes back in August there will be the hearing, you will have an opportunity to provide comment on the assessments that will be levied against your property. The budget, whether that be individual line items in the budget, the totality of the budget, whatever you would like you can make those comments at the public hearing in August. After the board has received your comments in August they will adopt a resolution which finalizes the budget and that will start their fiscal year for October 1. That is the budget year, October 1 through September 30. Mr. McGaffney stated the board and probably most everyone here has a copy of the summary of impacted items on the budget and things that are going to change and those are the things you should talk about and focus on unless you have other items you want to discuss. I have given descriptions of those changes; this is not the first time the board has seen it. In the best interest of your time, I probably won’t go over each of these individual items but generally DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 14 speaking the capital reserve contribution of $100,000 is a big impact to the budget as well as the landscaping, which we previously talked about and I factored that in as well as an additional $6,000 in pond maintenance for additional ponds for Phases 4 and 5 when they come on. That is the aquatic side, not the landscape side. Those are the main big impacts to the budget. Obviously, you can see there is more than that, that go up or down. The changes for contracts are built into the summary as well. I will answer any questions you may have. During the discussion of reducing the budget line items, the following action was taken by the board. On MOTION by Mr. Dean seconded by Mr. St. Pierre with three in favor the Ms. Lambert and Mr. Poulin opposed staff was authorized to remove the pump and water feature at SR 100. The board discussed certain line items that resulted in the following: Under maintenance: reduce water and sewer to $16,000, landscape maintenance $185,400, landscape contingency $3,000, tree pruning $4,500, lake maintenance and repairs $24,476, maintenance contingency 0. Amenity center: cable/internet & telephone services $6,000, amenity electric $16,000, amenity water and sewer $23,000, holiday décor $2,000, create one-time capital project fund of approximately $190,000 to take care of the irrigation system. The changes outlined results in a 28% increase for the 40-foot lots, $31% for the 50-foot lots and 34% increase for the 75-foot lot, 47% for commercial and 47% for golf course or: an increase for the 40-foot lots $257.54, for the 50-foot lots $318.79 and 75-foot lots $469.62, commercial would increase of $228.52 and golf course would have an increase of $772.39. These are the increases over fiscal year 2023. Ms. Buchanan stated the commercial and golf course don’t pay for amenities. Mr. McGaffney stated they have their own irrigation system and have zero access to the amenities. On MOTION by Mr. St. Pierre seconded by Mr. Poulin with all in favor Resolution 2023-06 approving the proposed fiscal year 2024 budget, declaring special assessments to fund the proposed budget pursuant to Chapters 170, 190 and 197, F.S setting the public DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 15 hearing, for August 26, 2023, addressing publication, addressing severability and providing an effective date was approved. TENTH ORDER OF BUSINESS Consideration of Resolution 2023-07 Setting a Public Hearing Date to Adopt Revised Rules of Procedure On MOTION by Mr. St. Pierre seconded by Mr. Poulin with all in favor Resolution 2023-07 setting the public hearing for August 23, 2023 was approved. ELEVENTH ORDER OF BUSINESS Discussion of Amenity Center Room Rentals Mr. Dean stated we had a group that has been meeting since the first of the year to talk about the amenity center, the usage and what we are doing here and how busy it is. Alison’s group takes care of the amenity center and they helped us come up with these guidelines and changes we are going to talk about. Some of the civic groups that use the amenity center has been an issue. Currently the Rotary and girl scouts use the amenity center and we recommend that no more civic groups be allowed to use the facility; one group doesn’t live here and it has been an issue and we don’t want that problem. We will give them notice that after June 30th they will no longer be able to use the amenity center. Ms. Buchanan asked could they use it without a reservation? Mr. Dean responded no. There was a lot of discussion about the pickleball group, how they work, how they do things, there are three groups that use it regularly and a lot of people just come up and use it. It is well organized. One recommendation was to no more reserving the pickleball courts, but we would like to allow the pickleball groups be able to put their schedule on Kayla’s monthly schedule. We want to keep that going and have that stay. There were a lot of concern about the pickleball courts being used by non-residents and many times we talked with them and it is not a problem. There were non-residents with residents and the ratio was never over the guest limit. No smoking right now is only in the building and pool area, the fenced in area. We recommend that everywhere on the property tobacco products, including vape not be allowed. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 16 One of the biggest issues was reservations at the amenity center. This building is very busy, all the groups are residents and the reservations for birthday parties, etc. have become a major issue. They don’t clean up well, people have made reservations for other groups and all the problems we have been having along with the fact that the building is so busy, the reservations would be a challenge to do. We recommend that the entire reservation policy be taken out of the amenity system. There was a lot of discussion, we took a lot of suggestions from the group that runs the amenity center and that is one of the things we recommend. Lastly, to help the staff we recommend that the group that has been meeting to do these changes at their monthly meetings that the interest to schedule a resident’s group room reservation shall be completed by the room reservation that they have and shall be reviewed by the amenity activities group during their monthly meeting for review and approval. Something to help Alison and her staff out to make sure the rooms are being rented properly. We looked at all the groups that are presently here and asked them to do a sign-up sheet, the vast majority of them are residents. You can have a guest with you, that was not a problem. There was one exercise class we did not sign up. Ms. Mossing stated it was a class that was regularly canceled and there was not a lot of participation. She didn’t post a Saturday class and the feedback from residents was that they wanted a Saturday class, so we are going to work with the other instructor to provide a Saturday class. A resident asked how is this going to be communicated so that we don’t have chaos about the change in policies? Mr. St. Pierre stated we will have Alison coordinate with Kayla an email blast. A resident asked does the instructor for zumba and yoga charge people who attend? Ms. Mossing stated yes. A resident asked does the instructor pay to rent the room? Ms. Mossing stated not currently. Mr. Dean stated we talked about that a little bit, but we wanted to at least get some things done. That is on our next meeting. On MOTION by Mr. St. Pierre seconded by Mr. Dean with all in favor the amenity policy changes were approved. DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 17 TWELFTH ORDER OF BUSINESS District Management Letter to SJRWMD – Phase 5 Future Ownership & Maintenance Informational only. THIRTEENTH ORDER OF BUSINESS Discussion of Pickleball Play on Community Calendar This item taken earlier in the meeting. FOURTEENTH ORDER OF BUSINESS Staff Reports A. Attorney Ms. Buchanan stated the legislature passed a bill requiring supervisors after January 1, 2024 to have four hours of ethics training. B. Engineer – Annual Engineer’s Report Mr. Armans stated I handed out a report on what we have been working on. We have been extremely busy for this district over the last two months. I want to update the board on the St. Johns River Water Management District compliance coordination. We did start talking again with the water management district, they assigned a new person to manage the case. We are bringing them up to speed, and they requested a field meeting to visit each of the sites to make a final determination. Our meeting is scheduled for the 23rd, we are going to have our environmental scientist, myself and the St. Johns representative visit all the sites to make a final determination. Everything else on the memo is for your reference so you can see what we have been working on. On MOTION by Mr. St. Pierre seconded by Mr. Dean with all in favor work authorization 2023-1 from Dewberry Engineers, Inc. to provide the annual engineer’s report in an amount not to exceed $4,500 was approved. C. District Manager There being none, the next item followed. D. Operations Manager - Report DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 18 Mr. Gray updated the board on the irrigation, the pump has been received and it will be installed sometime after the 16th. He reassured me that he will get back to me with a specific date. There were a few issues at the pool, Kayla and I were able to correct those issues, we had a new inspection from the health department and there were no violations. I have been working with Jerry as well as Mr. Dean; I’m trying to figure out the flow issue with the pool. I have done everything I can to figure out the flow rate and it is either the sand in the sand filtration system probably needs to be changed or the pump is going out. That runs about 5-7 years on that filtration system and it is coming up on that process now. After everything I have done, those are the only two things it could be. I was told it would be between $3,000 and $5,000 to replace all the sand in the sand filtration system, however that would be another 5-7 years before it would have to be done again. Changing the sand is something that can’t be avoided if you want to keep the pool open because if the flow rate drops down too far the health department will shut it down until it is back up to code. Mr. St. Clair stated as far as the sand you can get with Mr. Dean about that and he can bring it to us at the next meeting. Mr. Gray stated all the palm trees on the pool deck have been pruned and the fronds were removed. I noticed today there was some staining in the parking lot due to the palm trimming. I contacted Yellowstone and they are going to remove the stains from the parking lot free of charge. The dead shrubs on Grand Reserve Way by the lift station are being replaced next week. I had two 18-inch box drains installed on the backside of the bocce ball court and tennis court to help with the erosion issue. One of the district engineer’s will be onsite tomorrow to inspect all the stormwater systems. E. Amenity Manager - Report Ms. Rinker gave an overview of the amenity manager’s report, copy of which was included in the agenda package. FIFTEENTH ORDER OF BUSINESS Supervisor’s Requests Additional items: have panic button system installed at the amenity, Mr. Dean will work on ideas to improve community communications, work with field manager on pool pump/filter DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 19 issues, update on park pond, Phase 4 Yellowstone proposal breakout cost on trimming and ensure it does not include the backside of ponds. SEVENTEENTH ORDER OF BUSINESS Public Comments Additional comments: does irrigation system repair go out to bid, lack of maintenance on system, number of houses in new section, description of the phases, ownership of streets, review of water bills, repair of barbeque, possibly replace mulch with stone, ownership and location of cluster mailboxes. EIGHTEENTH ORDER OF BUSINESS Approval of Consent Agenda A. Approval of the Minutes of the March 22, 2023 Meeting and April 27, 2023 Workshop B. Acceptance of the Minutes of the March 22, 2023 Audit Committee Meeting C. Balance Sheet as of April 30, 2023 and Statement of Revenues and Expenses for the Period Ending April 30, 2023 D. Assessment Receipt Schedule E. Approval of Check Register On MOTION by Mr. St. Pierre seconded by Mr. Broom with all in favor the consent agenda items were approved. NINETEENTH ORDER OF BUSINESS Next Scheduled Meeting – 07/21623 at 6:00 p.m. at the Island Club Mr. St. Pierre stated the next meeting will be held July 21, 2023 at 6:00 p.m. in the same location. On MOTION by Mr. Broom seconded by Mr. Poulin with all in favor the meeting adjourned at 9:11 p.m. Secretary/Assistant Secretary Chairman/Vice Chairman DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C June 7, 2023 Deer Run CDD 20 DocuSign Envelope ID: 8B65AFDB-DF28-4C0A-ADCE-C5EDC236B89C