SOUTH VILLAGE COMMUNITY DEVELOPMENT DISTRICT

The regular meeting of the Board of Supervisors of the South Village Community Development District was held Tuesday, August 4, 2020 at 6:30 p.m. at the Eagle Landing Residents Club, 3975 Eagle Landing Parkway, Orange Park, Florida

Present and constituting a quorum were:

Chris Payton Grant Krueger Kelly Hennening Randy Smith Rick Smith

Chairman  Vice Chairman Supervisor Supervisor Supervisor

Also present were:

Jim Oliver Katie Buchanan Keith Hadden Jim Hahn
Matt Biagetti Jason Merritt Emma Gregory Dean Vincent

District Manager
District Counsel (by telephone) District Engineer
General Manager, Honours Golf Director of Operations, Honours Golf Hopping Green & Sams (by telephone) Hopping Green & Sams (by telephone) East West

The following is a summary of the actions taken at the August 4, 2020 meeting.  A copy of the proceedings can be obtained by contacting the District Manager.

FIRST ORDER OF BUSINESS	Roll Call
Mr. Oliver called the meeting to order at 6:30 p.m. and called the roll.

SECOND ORDER OF BUSINESS	Audience Comments
There being none, the next item followed.

THIRD ORDER OF BUSINESS	Affidavit of Publication
A copy of the affidavit of publication of the public hearing was included in the agenda package.

FOURTH ORDER OF BUSINESS	Approval of the Minntes of the July 7, 2020
Meeting

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the minutes of the July 7, 2020 meeting were approved as presented.

FIFTH ORDER OF BUSINESS	Acceptance of Minntes of the July 7, 2019
Workshop

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the minutes of the July 7, 2019 workshop were accepted.

SIXTH ORDER OF BUSINESS	Update Regarding Open Items
State Attorney Investigation Regarding Fire Destruction of Trailer with Stored Pine Straw
Mr.  Hahn stated we  have been  in contact with Jason Kelley,  who  is handling the case in
the state attorney's office and he informed us that they feel they have enough evidence to charge one of the individuals involved, not all four. He would not release any other information. He asked  if we were asking for any restitution  and  I told  him we thought  about $6,000 restitution,
$4,500 for the trailer and $1,500 worth of pine straw. Just because they charged one and not all four that doesn't mean we can't take action against the other people involved if they are residents. I have also asked the gentleman to remove his trailer and he was going to get back to me.
I told him our goal was to get it out of here immediately.

Sidewalk Repair/Completion
Mr. Biagetti stated the AT&T box was moved out of the missing sidewalk section and Comcast drove by last night and they painted a little arrow from the box to move it closer to the road. I haven't heard back on the rest of them, but they are getting eyes on all of them.
Mr. Payton asked even if AT&T and Comcast moved the other boxes, who is going to pay
to replace the sidewalks? It is not CDD property. I appreciate the effort, but then we are going to have holes in sidewalks that we caused and we don't have a plan to fix those holes. I think the board requested to have that one section that hasn't been filled on Autumn Pines. My understanding is that you have someone who will put in that portion of the sidewalk for free.

Mr. Hadden stated I'm going to talk to one of the contractors that we have worked with  and ask that when they are doing work over here to do that, it is a 30-minute fix.

Additional Streetlights
Mr. Biagetti stated unfortunately the gentleman I was working with is out sick.

Oakmont Easement
Mr. Payton stated you and I both need to sign that and have it notarized and we can do that here in the office. Thanks for sharing that amendment, none of us have seen that in all the years we have lived here and all the easement encroachments we have approved, probably weren't necessary.

Storm Drains Cleanont
Mr. Hahn stated at the last meeting we were asked if there were any issues related to storm drain cleanout, is it an ongoing problem or have they been maintained over the years. We had a company come out and give a cost to blow out all the exits and entrances into our lakes and it is about $8,000. We have Lake Doctors checking all our exit points on every lake and it is in their monthly report and they verify they are clear and there are no problems with any of those. Matt and Scott also check it on a monthly basis and other than one time we had a slow drain, we haven't had any issues. I don't think we need to have them all blown out.

Weir Repair Options
Mr. Hadden stated we will clean up the part of the weir that is still there and reconstruct the part that is blown out. I will put in a grid of concrete rebar and change the number ofbleeddown pipes. Because it is such a small job I only received one proposal and it is very high. You can approve a not to exceed amount and authorize one supervisor to work with staff to negotiate the
contract.
Mr. Payton stated I prefer to wait and talk to more contractors rather than approving a not
to exceed amount.
Mr. Hadden will advertise and have bids available for consideration at the next meeting.

The next item taken out of order.
EIGHTH ORDER OF BUSINESS	Update Regarding Terms of Draft Agreement
to Purchase Cottages Parcel
Ms. Buchanan stated earlier today we circulated an updated contract incorporating the March 1st closing date that we think is generally better for the district. I will go through the deal points and then we can talk about it and ask any questions.
This form of agreement contemplates that on March 1, 202lwe would close on the Cottage
lots, which is the tract of land that you understand to be the Cottage lots but will also include the adjacent pond area. The purchase price is $438,000. Initially it was offered for sale for $638,000, which is roughly equal to $370,000 based on the appraisal plus the approximate $318,000 necessary to pay off the special assessments. They also contemplated that part of the purchase price could be comprised of $200,000 contribution paid by the HOA to the CDD and from the CDD to the seller. This agreement does not provide for this flow of funds, but it does include a condition that unless at or before closing the HOA pays that $200,000 to the developer, the developer is not obligated to sell the property to the CDD. Because the $200,000 isn't included, the purchase price is reduced from the negotiated $638,000 to $438,000.
One of the additional clauses requested was a deposit of $25,000 that would go to their
closing agent, which is Mr. Torn Carr. At closing on March 1st, the CDD would pay $300,000 against which the deposit would be credited. The reason for the March 1st closing is that it enables the CDD to be fully collected for the upcoming fiscal year, meaning you are going to have the bulk of your tax bill money in hand by March 1'1 and that will allow you to use the money you've previously set aside and the money you've allocated in next year's budget. The balance of the purchase price less the $300,000 would be in the form of a note from the developer to the CDD so that the CDD would then owe the developer the balance of the purchase price and then an additional 5% interest on top of that balance. The 5% interest rate was proposed by East West. I informally spoke with a commercial lender and commercial real estate lawyer and neither found 5% to be an unreasonable interest rate.
The inspection  period  runs for 90 days and that will give the CDD the time to do the  due
diligence.The one thing I will point out is if we choose to terminate the contract during the inspection period then the CDD would be responsible for the due diligence costs. The only other point to add is the closing date of March Ist for the reasons we discussed, the conditions of closing in section 5 would include a warranty deed, execution of the assignment  of and assumption of the

development rights, a title statement, the estoppel letters from the CDD relating to the assessments and how they are going to be divvied out, and representation and warranty with the seller that the contract. These are standard documents.
The last thing would be the conditions for closing: payment by the HOA of $200,000 to the seller and a change to the due date for the debt service assessments on the Cottage lots. Your indenture requires that you collect your debt for assessments 30 days before debt service payments are required to be made to the trustee. The trustee  requires that those payments are due on May 1st so we could move the debt service assessment due date to April 1st .  The benefit to the Sellers is that is that they won't have to make an incremental annual debt service payment.
Mr. Merritt stated as currently drafted if the seller and HOA does not reach an agreement regarding the payment of the $200,000 contribution the seller would have the r ght to terminate the contract, they would  not be obligated  to sell the property for the $438,000.'   There would  be out of pocket costs the CDD would have incurred and there currently is not a provision in the contract to refute those costs. There would be some exposure to the CDD for certain out of pocket costs.
Mr. Randy Smith asked would it be unusual to include those out of pocket costs if something doesn't come through between the HOA and the developer?
Mr. Merritt stated I don 't think it would be unusual oftentimes when we have conditions like this there is a little bit of back and forth on the part of the parties, the seller would likely say this is something outside their control they don't want to be potentially on the hook for what they might regard as an excessive amount of costs.
Mr. Randy Smith asked is there an estimate of what that might be?
Mr. Merritt responded it may be in the range of $15,000 to $25,000.

Mr. Vincent stated understand I did not propose the $200,000 as a structure, your attorney proposed to us from a standpoint that it would make it easy for you and I'm all about easy, but I don't like the direction are we going to structure the deal with the HOA. We presented this in the last week and said it would work better for you if you could get the $200,000 directly from the HOA and I'm sitting here thinking we haven't even explored this. We have to go to the HOA and make a deal and we are more than willing to go to them and start to engage their counsel, but that is part of what a due diligence period is about. Due diligence from your side and due diligence

from our side. In terms of costs we have already done the survey, we presented the survey some time ago and we continue to resurvey and I have absorbed the cost of that. That is not going to cost you. Specifically your costs at this point is what you are going to spend on Phase 1, which is not a lot of money on a raw piece of land that has been out there for a long time. I pay for these  all the time. You don't have to do a title search on it because you need to get clear title.  Those  two are the biggest expenses with whatever you choose to pay your corporate attorney to do their work. We have been providing this information all along and we would provide that information during the due diligence. We were asked to do this, we will engage with the HOA along this route. The second point I really have to make is we came to the $638,000 prior to us making the O&M for 2019 and 50% at the end of last year and then the two installments this year. It is being suggested that the price goes down based on what we have already paid and we will talk about that. I have asked that the number be confirmed, but I'm not certain why the $638,000 goes down only as a result of the outstanding debt service assessments.
Mr . Rick Smith stated I'm in favor of the HOA spending up to $200,000 in projects and we would not spend that money so we would have that money to apply towards the purchase price.
Mr. Payton stated at the last board meeting the discussion between us and it was suggested by Grant that the HOA could reimburse them for the park, their activities in the park thereby reducing their costs to the park and reducing our costs here. I have spoken with a member of the HOA board so should the agreement between East West and the HOA fall through there is a backup plan that the HOA could directly  give us $200,000.  The board voted to purchase the property for
$320,000 plus the payoff amount. We didn't agree to purchase it for $638,000, we agreed to purchase it for $320,000 plus the payoff.
Mr. Vincent stated to me that is not a deal breaker.
Mr. Oliver stated it has to change because the original closing date was set for December 1st because the deal was that East West was not going to make any assessment payments beyond FY 20, this current year and that is the way Katie has structured the latest version of the deal with no assessments to be collected before the March 31st closing so nothing has changed there at all. The debt payoff was always an estimate because you have to have a precise date because of interest earnings to know what the payoff is going to be. It didn't change at all the only thing is it has been solidified because we are honing on an exact date. This has not changed a bit.

Mr. Vincent stated if you look at the tax bill we have been paying for years, what this parcel and the pond are, is what I have sent you from the standpoint of the physical survey we have done but it also includes a lot of acreage in conservation easements. They have always been out there and it is the rest of our holdings and we are researching that in such a way to where that is deeded over to you as well. It is to clean up the whole tax situation. There is a lot of acreage so when you get this and we get through the due diligence that is the conservation easements that are still in place.
Mr. Payton asked does the board have any issue with the closing date? Is there any issue in paying $25,000 in escrow to their closing agent? Any other issues with their response to the contract? What do we need to do regarding the contract since it seems we are in acceptance of their updates?

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the purchase contract for the Cottages parcel was approved with a closing date of March 31, 2021, $300,000 due at closing balance of approximately $138,000 due March 31, 2022, seller to hold note at 5% interest rate, terms to include due diligence period.

SEVENTH ORDER OF BUSINESS	Update Regarding Phase 6 Construction
Matters
Update Regarding West Bank Construction
Mr. Vincent updated the board on the Phase 6 subdivision construction , the large park and the pocket parks, landscape installation and monument signs.

Consideration of Series 2019 Requisitions

On MOTION by Mr. Payton seconded by Mr. Kreuger with all in favor Requisitions 70 - 73 were ratified.

Consideration of Change Orders

On MOTION by Mr. Payton seconded by Mr. Kreuger with all in favor change orders 8 and 9 with Baker Construction were approved.

NINTH ORDER OF BUSINESS	Ratification of Approval of Agreement for
Security Patrol Services
This item deferred.

TENTH ORDER OF BUSINESS	Consideration	of	Resolution	2020-09
Accepting Contribution in Lieu of Capital Assessments
Ms. Buchanan stated the resolution in your agenda package goes through the history of those transactions on the Phase 5 property in the amount of $1,990,000, that is the $10,000 per lot assessment. The assessments were intended to fund a portion of the improvements related to Phase 5, specifically for the 5B improvements. To date Dream Finders has paid $960,000 and the district has in tum used that money to partially fund the 5B improvements that Dream Finders is constructing. I feel very comfortable that $1.8 million in infrastructure has been constructed in Phase 5B. Keith is in the process of evaluating whether there is an additional $184,961 that would then completely eliminate the capital assessments. You can table this pending Keith 's determination that the total amount has been contributed or you could approve it in the amount we feel comfortable at, which is approximately $1.8 million, that would leave Dream Finders to continue to collect that $10,000 at each lot closing until that deficit is made up. That being said we could come back with a supplemental resolution to acknowledge the other $184,961. I assume Keith is not ready to make that determination yet.
Mr. Hadden stated correct. I am in the process but haven't finished it yet. I would love to hold 18 lots worth at $10,000 per lot, that amount in the interim . I have no problem returning the other money.
Mr. Payton stated aside from signs, roadway improvements are complete except for the top layer of asphalt which goes in next year. It is not like they are not going to do that; the county requires that.
Mr. Hadden stated they had to post a bond for that.
Mr. Randy Smith stated I don't see why we wouldn't hold the $180,000.
Mr. Payton stated we are going with that option, approve the $1.8 million to release and continue to coHect the rest for now.
Ms. Buchanan stated okay, the blanks will be filled in with $1,805,039.

On MOTION by Mr. Payton seconded by Mr. Randy Smith with all in favor Resolution 2020-09 was approved as amended.

Ms. Buchanan stated one point of clarification if Keith is able to make a determination on the balance of the $184,961 I would like the board to feel comfmtable and understand that we will no longer need to collect that $10,000 at closing even though we may not adopt another resolution until the next board meeting. I don't want us to over collect.

ELEVENTH ORDER OF BUSINESS	Public Hearing Adopting the Budget for
Fiscal Year 2021
Mr. Oliver stated the budget is essentially the same budget you reviewed in June and July. The per unit assessments stay the same; we just have more units this year and more assessment funds to work with. The general fund budget stays essentially the same at $182,000. Total expenditures and community appearance is up about $36,000, due to maintenance of the additional common areas. The next page shows the assessment tables showing the assessment rates stay the same amd platted lots increasing from 1,332 to 1,494. Following the general fund budget are line item descript ions and the various debt service funds for the series 2016 A1, A2 and A3 bonds and the Series 2019 bonds for West Bank. These fund the semi-annual interest payments and principal payment for each debt service funds. The last several pages are the budgets for the golf fund, recreation fund and the capital reserve fund. As Jim and Matt described at the previous meeting, both the golf fund and recreation fund are forecast to generate operating surpluses at the end of the Fiscal Year 2020/2021.

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the public hearing was opened.

There being no comments or questions from the public on the budget, the board took the following actions.

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the public hearing was closed.

Consideration of Resolution 2020-10 Relating to the Annual Appropriations and Adopting the Budget for Fiscal Year 2021

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor Resolution 2020-10 was approved.

Consideration of Resolution 2020-11 Imposing Special Assessments and Certifying an Assessment Roll for Fiscal Year 2021

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor Resolution 2020-11 was approved.

Consideration of Agreement for Direct Collection of Special Assessments for Fiscal Year 2020/2021

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the direct collection agreement was approved.

TWELFTH ORDER OF BUSINESS	Staff Reports
General Manager - Report
A copy of the operations report was included as part of the agenda package and included the operations of the amenity center, athletic center, tennis facility, golf and clubhouse operations, common areas and retention ponds and landscaping.

District Counsel
There being none, the next item followed

District Manager - Discussion of Proposed Meeting Schedule for Fiscal Year 2021

On MOTION by Mr. Payton seconded by Mr. Krueger with all in favor the fiscal year 2021 meeting schedule reflecting meetings on the first Tuesday of the month at 6:30 p.m. was approved.

TIDRTEENTH  ORDER OF BUSINESS	Supervisor's Requests

The following issues were brought up and discussed: the rower in the athletic center is broken, retain same guest policies given the pandemic, irrigation line by the bathroom is not yet fixed, possibility of using range fee money on range improvements rather than capital reserve, reminder to residents of golf cart registration, classes for proper operation of golf carts, if trail sticker had a number there would no need for another registration sticker, shower heads drip, cafe to maintain normal schedule, Tuesday and Thursday program schedules, double billing issue taken care of, damage caused by army worms to #17 tee and other areas will be re-sodded with shade tolerant sod, the back range has not been cut as consistently as other tees, clean up #10, take better care of the bunkers, need better drainage between 1 tee box and 10, district counsel to prepare cost share agreement with Armstrong CDD for pond maintenance, possibility of creating tennis membership for non-residents in the future and an update on PGA certification process for staff, hydraulic leaks on golf course, golf course superintendent to prepare of list of equipment to be purchased, beverage cart.

FOURTEENTH ORDER OF BUSINESS	Audience Comments
There being none, the next item followed .

FIFTEENTH ORDER OF BUSINESS	Financial Reports
Balance Sheet as of June 30, 2020 and Statement of Revenues and Expenses for the Period Ending June 30, 2020
The balance sheet and income statement were included as part of the agenda package.

Assessment Receipt Schedule
The assessment receipt Schedule was included as part of the agenda package.

Approval of Check Register

On MOTION by Mr. Payton seconded by Mr. Randy Smith with all in favor the check register was approved.

SIXTEENTH ORDER OF BUSINESS	Next	Meeting	Scheduled	for	Tuesday,
September 1, 2020 at 6:30 p.m. at Eagle Landing Residents Club

Mr. Oliver stated the nest meeting is scheduled for September 1, 2020 at 6:30 p.m.

On MOTION by Mr. Payton seconded by Mr. Krueger with all favor the meeting adjourned at 9:24 p.m.

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