Community Development District

Board of Supervisor's
2017-2018 Budget Hearing and Regular Meeting

August 24, 2017 at 8:30 a.m.
505 Whiskey Creek Drive Marco Island, FL 34145

AGENDA

Note: Requests to address the Board on all subjects, which are not on today's agenda, will be accommodated under "Public Comments".

Any person who decides to appeal a decision of this Board will need a record of the proceedings pertaining there to and may need to ensure that a  verbatim record of these proceedings  is made  at their expense.

Any person requiring special accommodations at this meeting because of a disability of physical impairment should contact the District Office at 239 -394-4346 at least five days prior to the meeting.

Call to Order
Roll Call
Approval of Agenda
Audience Questions and Comments on Agenda Items
Approval of May 11, 2017 Regular Meeting Minutes
Specific Items of Old Business
Specific Items of New Business
Resignation of Supervisor Richard Perry
Appointment of New Supervisor

Staff Reports:
District Counsel — Greg Urbancic
Resolution 2017-05 — A Resolution Amending Resolution 2017-04 to Reset the Date of the Public Hearing on the Proposed Budget for Fiscal Year 2017- 2018.
Resolution 2017-06 — Support and Legal Defense
Amended and Restated District Management Agreement with Dorrill Management Group
District Consultant — Dorrill Management Group
District Manager
Johnson Engineering Pavement Condition Report
Policy Relating to Use of District Counsel
Adoption of Public Records Policy
Key Marco Triathlon Request for Approval — October 1, 2017
Board Approval of 2017-2018 Key Marco CDD Proposed Meeting Schedule. 3rd Thursday of Each Month at 8:30 a.m.
Request for Approval for the lowest and responsible bidders for:
Bridge & Sidewalk Repairs Quality Enterprises  — $13,723.75
Aggressive Vine Removal Crawford Landscaping  — $10,400
Gatehouse Roof Replacement Robert Kettelle Roofing — $14,550
Insurance Renewal — PRIA $27,658
Supervisors Request and Comments
Discussion of CDD Dissolution and Vote
Financial Report — Dorrill Management Group
Board Approval of voiding check #3234 dated November 15, 2016 KM HOA to KM CDD $7,825.00
Financial Statement ending April 30,  2017
Financial Statement ending May 31,  2017
Financial Statement ending June 30,  2017
Board Approval of Audited Financial Report (AFR) for the Fiscal Year Ended September 30, 2016
Approval of Proposed 2017-2018 General Fund Budget

Resolution 2017-07 - Annual Appropriations Budget beginning October 1, 2017 and ending on September 30, 2018.
Resolution 2017-08 — Assessment Levy and Roll Call for Fiscal Year 2017 -2018
Audience Questions and Comments
Schedule Next Meeting Date and Time
Adjournment

Community Development District

REGULAR BOARD MEETING MAY 11, 2017

The Board of Supervisors of the Key Marco Community Development District met at 8:30 a.m. on Thursday, May 11, 2017, at the Key Marco Community Center, Marco Island, Florida.

APPEARANCES:

ALSO PRESENT:	Maureen McFarland, Chairman/Treasurer Johanna Parkes, Supervisor/Assistant Secretary Richard Perry, Supervisor/Assistant Secretary

Katie Maline, Manager
Greg Urbancic, District Counsel
Neil Dorrill, Dorrill Management Group
Jere Earlywine, Special Counsel for the Board	

ABSENT:	Corrie Grado, Supervisor Patricia Quartuccio, Supervisor

ROLL CALL/APPROVAL OF AGENDA

Mrs. McFarland indicated that a quorum was in attendance, and that the meeting had been properly noticed.

On a MOTION by Mr. Perry and a second by Mrs. Parkes, the Agenda as presented was unanimously approved by the Board.

PUBLIC COMMENT

There was no public comment received at this point in the meeting.

APPROVAL OF MARCH 16, 2017 REGULAR MEETING MINUTES

Mrs. Maline asked that anyone who wished to speak from the audience should speak up and state their name for the record.

On Page 5 in the third full paragraph the wo rding in the last line should be corrected as it does not read properly.

On Page 5 in the third line of the third paragraph, Mr. Parkes should read Mrs. Parkes.

It was noted also at this point that Mrs. Aitkenhead decided not to serve on the Landscaping Co mmittee.

On Page 6, in Item A in the Attorney's Report, the fourth line should read, "The Manager will have the ability to authorize an amount of up to $5,000..." On Page 11 in the last paragraph, second line, the word "disbanded" should read "dissolved".

On Page 12 between the first and second paragraphs, it appears to be only one paragraph.
On a MOTION by Mrs. Parkes and a second by Mr. Perry, the March 16 minutes were unanimously approved as corrected.

SPECIFIC ITEMS OF OLD BUSINESS

There were no items to address under old business.

SPECIFIC ITEMS OF NEW BUSINESS

There were no items to address under new business.

STAFF REPORTS

Greg Urbancic, District Counsel

Mr. Urbancic read Resolution 2017-3 into the record, which explained it as a resolution of the Bo ard of Supervisors establishing a policy and procedure for certain maintenance or repair contracts and work, and authorizing the District Manager to execute them. This Resolution was done at the request of the Board to bring back up a resolution to address Key Marco's general policy on the manager's  authority  for maintenance or repair contracts. The important part of this is in Section Two, and it  can be  modified to meet the Board's intent, but the general intent was to note that any approved expense would not exceed
$5,000. Mr. Urbancic also added an overall cap of an aggregate $20,000 for any contractor during a particular fiscal year, to be part of a budgeted line item. This can be added or not, as the Board wishes. If there is an approval, then it will be put on the agenda for informational purposes at the next meeting, and there can be modifications made to the Resolution as well.

Mrs. McFarland read it and thought it was excellent, and on a MOTION by Mrs. McFarland and a second by Mrs. Parkes, Resolution 2017-3 was unanimously approved by the Board.

District Consultant — Dorrill Management Group

Mr. Dorrill briefly walked the Board through the Bridge Inspection and Evaluation Report, indicating that there was a  lot of good news in the report. From a  total replacement standpoint, the bridge is estimated   at $5,000,000, and represents the single largest asset of the community. The main tenance that has been performed over the course of the last five years has also enhanced the value of the bridge.

The financial considerations on Page 5 of the summary show some minor maintenance aspects that Mrs. Maline may have already received bids on. The  bridge has some  large rubber expansion joints, and in  one location these expansion joints have separated, and need to be resealed to prevent the leakage of water that will eventually affect the concrete. Mr. Dorrill felt that this was the most importan t  maintenance item.

There is some early evidence of spalling on the face of the pilings, which may not need repair at this time, but in his opinion, should be looked at when the expansion joint repair is done.

There is money in the budget for this work.

The contractor was asked to look at the bridge from a  net present value, life cycle cost, which is shown     on Page 5  of the report. They indicated that within the next ten years the  bridge is going to need close    to $200,000 of preventative maintenance. The bri dge was repainted recently, and with the harsh sun and salt environment at Key Marco, Mr. Dorrill felt that it would be amazing if the  painting lasted ten years.     In terms of the Capital Recovery Program, he suggested that they begin to set some money aside , or designate within their contingency fund some future maintenance costs for the bridge so the cash will be available when it becomes necessary.

Mrs. Parkes indicated that within the report it noted that there are no r eferences to determine what  weight the bridge will bear, and she felt that this would be  important to know in  determining the  value  of the bridge. Mr. Dorrill agreed, noting that Mr. Barksdale had had concerns about this as well, anticipating the amount of construction that will eventually occur on Key Marco. To actually have the bridge load rated would be very expensive, but suggested that he and Mrs. Maline could work on this to  get some proposals for this analysis.

Mrs. Parkes also noted that the load ra ting was looked for, and nobody could find one, which amazed her as it would seem to be a very crucial bit of information. Wilson, Miller were the original engineers for the community some 20 years earlier, and he was not sure if they designed the bridge o r if they had a sub- consultant design it, but  an effort will be made to get that information. Mrs. McFarland noted that on   Page 3  of the report it  says that based on the date of construction the live load design truck is  most    likely the HS20 Vehicle, 36-ton semi-trailer truck configuration. The report  also indicates that performing   a load rating of the bridge at this time is possible, but much more expensive, and is not

required at this time. Mrs. Parkes reiterated that she felt this information could become very important if there are a lot of heavy loads coming over the bridge, and also in terms of how long the bridge lasts.

Mrs. McFarland noted once again that the contractor i ndicated that they did not feel that a load rating needed to be done at this time, but if in the future deficient conditions become apparent during an inspection, it would be required.

Mrs. McFarland and Mrs. Parkes felt that they should follow the recomme ndation of the contractor, and  Mr. Dorrill indicated that staff's recommendation would be to authorize the manager to proceed with the two minor repairs as noted in the report, and also if the Board wished, to  include  in the Motion that  within the contingency fund $18,000 a  year will be set aside for the next ten years to ensure that the   cash will be available for the recommended future repairs.

Mrs. McFarland asked if the money would have to be specified, and indicated  that  perhaps  a  contingency fund  for the bridge could be  created and have it  used as acquired. Mr.  Dorrill noted that  this is what he was referring to, and felt as well that for budgeting purposes they should have a capital reserve to accumulate money. This year the Board could begin to set as ide $18,000 per year, and Mr. Perry suggested that it could be done that way, or they could set aside funds that they already have for  the bridge contingency fund.

Mr. Dorrill advised that if at the end of their budget process, the Board wished to segregate a portion of their contingency fund for capital reserves, that would be an appropriate course of action.

On a MOTION by Mrs. McFarland and a second by Mr. Perry, the Report was unanimously accepted, and the Manager was authorized to proceed with the maintenance items as recommended.

Mr. Tsandoulas noted that the  last time the bridge was  inspected it was given a  very good rating, and  he asked if that had changed. Mr. Dorrill indicated that it had not, and that it continued to have a very good rating, and in the opinion of the  engineer, has  been well maintained. The  two minor repairs should be done  in Mr. Dorrill's opinion to keep them  from becoming bigger problems down the road.   Mr. Tsandoulas suggested that the next time the bridge is inspected, that a  grade of A, B  or so on as   the government provides in their inspections be given to this bridge. As it has to be  inspected every three years, Mrs. McFarland recommended that the next time it is inspected, that Mr. Tsandoulas' suggestion be taken.

Mrs. Esposito asked what was going to be done with the concrete blocks on the bridge that were loose,   and Ms. Maline indicated that she had a couple of contractors come out and look at the bridge, and they advised her that they were six-inch-thick slabs that sit on haunches which is why they wobble. Mrs.  Esposito thought that they used to be attached in various ways, and Ms. Maline noted that they were  looking at various options, such as bushings or a neoprene pad to keep them from rocking.

Ms. Maline also noted that a comment was made at a previous meeting that the bridge inspection report had to be filed with the DOT, and after confirming with DOT, she found that this was not required.

District Manager's Report

Johnson Engineering Services Agreement/Pavement Condition and Management Plan

Ms. Maline advised the Board that they will soon be on the schedule for this work to be performed by Johnson Engineering. They will be reviewing all the paved area and drainage basins on CDD property. Proposals for any necessary repairs will be obtained, especially for the edges of pavement where the cyclists ride. This service from Johnson Engineering is basically a reserve study and will tell the District  how long the present paving is expected to last and what the estimated annual costs will be for maintenance.

In response to Mrs. McFarland's question, Ms. Maline indicated that the repair of the street edges will be
$8,402.  Re-striping  and  replacing  fire  hydrant  reflectors  as  well  as  other  yellow  reflectors  will cost
$27,984 for the entire property. The total for t hese two repairs will  be  approximately $35,000.  Ms. Maline also requested a repair estimate for the damaged concrete at the  bridge at  $6,413, but  that is  still being bid on.

Member, Rick McDonnell indicated that there was a problem where people come out of Blue Hill at the intersection of Whiskey Creek, and cut the corner. This makes it dangerous, and it was suggested that it a lane divider be painted on the pavement which also will keep people in their lane. The Board agreed that this would be a good idea.

Front Gate Improvements

Presently, the Gatehouse and surrounding areas are being pressure cleaned along with cleaning out the planters and improving the irrigation. The roof at the guard gate is in very bad shape and was loaded    with leaves and branches and many of the tiles have been  damaged. Ms. Maline suggested that  some  bids be obtained from roofing companies to replace the roof, and added that the  original work was  sloppily done with concrete rather than flashing. The mudding was not smoothed out, so d irt and debris catches on it as well and the concrete holds  moisture which is damaging the  roof sheathing below  the tile. Roofing bids will be on the agenda for the June meeting.

Fire Wise Email

An email was received from Mr. Tsandoulas which indicated tha t he had been concerned in 2009 that the Fire Department did not know where the on/off valves for the hydrants were  located.  Ms.  Maline  contacted the City of Marco Island's Fire Code Official, Ray Munyon, who indicated that he  remembered  this situation clearly, and everything has been corrected. All the hydrants work, new lines have been installed, and an above ground double check back flow preventer is at the intersection of Blue Hill Creek  and Whiskey Creek. The inspection was done by the Naples Fire Serv ice in March of 2017.

Ms. Maline urged everyone to go onto the Forestry Division website and learn how to fire wise their homes. Ms. Maline will send out an email to all residents addressing these concerns, and advising them  to check the website for fire wising their houses.

The Fire Department has visited Key Marco twice and EMS twice to re -familiarize themselves with the area.

White Fly

A communication was sent out to the membership about options for  handling  white  fly,  which included chemicals, root wash and inoculations. The  Conservancy has  recommended that  white  fly not be treated, but allow it to run its course, otherwise, something nat ural should be used to treat it such as a peppermint insecticidal soap that is sprayed on the trees. Crawford can be called to treat  trees on private property and a contract price has been received from them. The price depends upon  the dimension of the tree, and the work is warrantied for six months, at which time retreatment may   be required.

Several of the trees are on HOA property, so the Joint Environmental Committee is in the process of deciding which option will be used. The trees in question are tag ged with pink survey tape and are generally gumbo limbos. Ms. Maline measured from the center of the  road to  private property and  in most cases right on the property line.

In response to a question regarding any consensus  of  opinion regarding treatment for  the  white  fly, Ms. Maline indicated that there was a definite difference of opinion between the arborists and the Conservancy as to what should be done. She added that she did not find in any documents where the Conservancy had control over chemical appli cation and Mrs. McFarland added that they are not the District's source for tree maintenance as that is not their mandate.

After a  general discussion on the problem, Ms. McFarland indicated that they have been told that many   of the gumbo limbos on the stre et have been hit hard by white fly as pesticides and herbicides are used along the grass in that area and the tree roots are being affected by them. The gumbo limbos on the    back of Key Marco look very good, however.

The question arises that if a new chemical is  used to fight white fly, will that in turn affect some other  part of the environment. (Inaudible comments) Apparently injections are not the best choice  for  this  area as the hole created by an injection leaves the tree open to invasion by other insec ts, but systemic treatments seem to work the best. Mrs. Parkes asked if the District was getting advice from an expert, such as an arborist, who was not trying to sell them anything for the problem, and Ms. Maline indicated that she bid this out and Crawford came in at the lowest cost, while Harps  came in at  $5,000 for the  same 131 trees. Ms. Maline also spoke to one of the five arborists in Collier County, a Mr. Buck from Crawford, and has confidence in his assessment.

Mrs. McFarland stressed the importance of using a certified arborist for this information, and noted that she had spoken to both her brother and her father, both certified arborists, about this issue.

There was a discussion about the three offered choices; the first being to do nothing, secondly to use a natural peppermint spray, or third, to use a systemic injection on trees that may or may not be on CDD property, and it was agreed that some years were worse than oth ers. Ms. Maline treated her trees once  the previous year and has not had a recurrence of the problem. (Some audience participation was inaudible.)

Mrs. Parkes agreed that something needed to be done, as white fly had the capability of spreading throughout the community, and Mr. Perry agreed that the trees needed to be treated. The Board agreed that they would treat the trees on CDD property with the systemic chemical. Additionally, they strongly recommended that the HOA Board treat their trees as well at th e same time if possible.

On a MOTION by Mrs. McFarland and a second by Mrs. Parkes, the Board unanimously approved spraying the trees on CDD property with the systemic insecticide.

Securitas Training

Ms. Maline met with the account manager of  Securitas and made some requests of them. She  asked that the post orders be rewritten and updated for 2017, which has been completed, and that all three     of the guards read, sign and acknowledge that they understand the rule s.  Ms. Maline also suggested that all three of these individuals have the same training.

One of the people at the gate is being encouraged to be more gate friendly, and Ms Maline  also emphasized with them that she wanted to  be  able to  get an answer if she  called the gate and asked  who had come through.

Security cameras are going out to bid for the HOA and the Gatehouse cameras have been put on hold.

Ms. Maline asked those present to let her know directly if they have any issues with anyone at the gate, and she will address it.

Mr. Perry indicated that he had a situation where someone came to the gate and pulled into his property, backed into the wall and cracked it. He caught them on his security cameras, and went down to the gate and asked if they got the person's license plate number. He was advised that the guard had turned the system off early, and the plate was not caught on tape.

Mrs. McFarland noted that they have had  a  number of issues with the gate personnel, and Ms. Maline   has had an issue as  well.  Mrs. Parkes added that she had come  in at least twice at closing time and  there was no one at the gate. Mr. Perry noted that they sometimes left just a little before the shift was over. Ms. Maline indicated that he had closed the computer down at 6:25, and she had explained to him that the computer does not get shut down until 6:30, and then the building is secured and then they      can leave. There was one incident where Ms. Maline allowed Anthony to go home early as Golden Gate, which is where he lives, was on fire that day, and they were being evacuated.

Mrs. McFarland indicated that Ms. Maline had taken over as supervisor for the gate  personnel, and has been working with them. Over time, the Board may want to consider having their own personnel at the gate, as they do pay $22 an hour to Securitas for the gate guards. If the District provided it s own gate personnel, they would not pay that much, but there would be benefits to pay for. This will be looked at    as an option in the future.

Registered Voters as of April 15, 2017

A letter was received from the  Supervisor of Elections, Jennifer Edwards,  which indicated that pursuant  to  Chapter 190 of the Florida Statutes, the  following notice needed to  be made part of the record: Per  the Supervisor of Elections as of April 15 of 2015, Key Marco had 52 registered voters who reside within  the CDD.

Mr. Urbancic indicated that the reason this is done is because once they pass the threshold of 250 registered electors, then they pass into qualified elector voting rather than property owner voting.

Marco Island Half Marathon

The Marco Island Half Marathon, a non-profit, sponsored a half marathon which included a  section  through Key Marco. An agreement was signed, a copy of their insurance certificate was provided, and a deposit was received. When they initially came in, a  series of circles and arrows were sp ray painted on  the street. They were advised immediately that they had to be cleaned up, and two months later, it has   not yet been done.

The previous evening Ms. Maline received an email from the Board of Realtors asking what they should     do about this, and she advised them that it was their responsibility to get the neon spray paint off the roads. The District has two options. One is to keep the deposit of $250, and the other is to hire someone    to clean the street and file an insurance claim.

Mrs. McFarland felt that the deposit should be higher in the future, as $250 is not going to be enough to get the paint off the roadway. Half a dozen emails have been sent regarding this issue, and Mrs.  McFarland felt that they should be given until the end of the month to remove the paint, or else the  District will have it removed and send them the bill. She asked the Board if they had any additional thought on handling this, and Mrs. Parkes felt they should be advised that they won't be allowed to hold this event on Key Marco again.

Mrs. McFarland was not sure if there would be a CDD issue with this, but  Mr. Urbancic said that the  policy was created for just this sort of problem, and the CDD can deny facilitating this sort of  event in  the future, although they could not be denied entrance to Key Marco. However, access could be  controlled to the point that they would not want to hold a race on Key Marco.

Ms. Maline will send them a letter advising them of the deadline and the consequences of not getting the roadway cleaned.

After a brief discussion of the most effective course of action, Mr. Urbancic advised that they may want  to use the deposit and bill them for the difference. If it is not paid, t hey may have to be taken to small claims court to settle the issue.

SUPERVISORS' REQUESTS AND COMMENTS

There were no requests or comments from the Supervisors at this time. DISCUSSION

OF PROPOSED DISSOLUTION PROCESS OF THE KEY MARCO CDD

By way of background, Mrs. McFarland indicated that the previous spring she and Mr. Midkiff had been appointed by the Board to research whether it was in the best interests of Key Marco to continue with a CDD. A limit of $25,000 was given to them to use fo r  legal expenses to  research this option. Through  the end of March, Mrs. McFarland and Mr. Midkiff used the services of two law firms at a total cost of
$16,000.

The Key Marco CDD was established in 1992 and bonds were issued by the Key Marco CDD. In  Decem ber  of 2013 the bonds matured. The developer established the  CDD in order to provide the  infrastructure for the new development, which consists of  a  gatehouse, the roads and adjacent property along the roads,  and the bridge. This is what the CDD owns.

The CDD by definition is an independent, special purpose unit of local government, and in Key Marco's case, it was established by Collier County. There are three primary benefits of a CDD, which includes the ability to issue tax exempt bonds, sovereign immunit y protection, and the ability to levy and collect assessments on the tax roll. As a special purpose government, there are numerous regulations and recording fees and other requirements. Maintaining the Key Marco CDD structure costs, conservatively, about $65,000 a year.

Now that all the CDD bonds have matured, there are no financial liabilities, so the question becomes should the CDD be  maintained, and if so, why is it  justified. In order to make this determination, the  CDD benefits should be discussed. Fir st, do tax exempt bonds need to be issued? Key Marco has about
$1,100,000 in cash, the bridge is estimated to be viable for another 75 years, and the roads are being reviewed. Mrs. McFarland suggested that there are options available to issue debt which co uld be as cost-efficient as those available to a CDD.

The next benefit is sovereign immunity protection, and right now Key Marco insures for that. Mrs. McFarland felt that because of that insurance, this benefit is limited. Mr. Tsandoulas (inaudible), and Mr. Urbancic indicated that the insurance covers exposure, with some overlap, primarily due  to attorneys'  fees which the CDD would have to pay itself. When Key Marco says it  carries insurance, it may not carry  as much as it would have with sovereign immuni ty, but it does carry insurance. Mr. Urbancic further explained that it is nice to  have sovereign immunity, but if Key Marco was  sued, sovereign immunity  does not protect it from legal fees in that lawsuit even if the case  is  invalid.  Mrs.  McFarland also indicated that right now as a CDD, public access into the community must be allowed. If

a cyclist comes into Key Marco and uses the bike path and is hit by a branch overhanging the path, Key Marco can be sued.

The third benefit is the ability of the CDD to levy and assess collections from a tax roll.  This is a  benefit  for Key Marco, and if that was removed, the annual break-even is 14 lots a year not paying the assessment, given the $65,000 maintenance costs.

Mr. Perry added that one of the concerns was if Key Marco had to collect its own assessments, what kind    of default rate would they face.  He  checked with Hideaway, and even in the  2008 downturn, there was  not a large default rate, and Mr. Perry did not feel that there was a big risk in this area. Mrs. McFarland noted that the HOA had experience in collecting their fees, and they have been la rgely successful.

Mrs. McFarland then went over the negatives, the first being that it  is costing the members $65,000 a   year just for the CDD infrastructure. Additionally, it forces a second Board onto this small community of  less than 30 houses with both a HOA and a CDD. Finally, the  Sunshine  Law restricts conversations with this small number of neighbors on relevant topics.

It is difficult to find ten residents to fill the seats on two boards, and because of the Sunshine Laws, it would be virtually impossible for two CDD Board members to sit on the HOA Board. The community is small, and there is now a manager who is handling the day to day operations and implementing the Boards' decisions. Mrs. McFarland noted that from her perspective, having two separate boards for such   a small community, with the restrictions attached to the CDD Board, makes it very difficult. It also imposes a significant burden on this small community to comply with all the governmental regulations  and guidelines. For example, there are two treasurers for Key Marco, two websites, two financial accounts, there are some members on Key Marco who take on a sig nificant burden to make sure that things happen properly, and felt that it makes more sense to simplify the structure of this small community of only 134 lots.

Mrs. McFarland felt that for this community it makes sense to simplify and be more efficient, no t only  with finances but with interaction, time and communication. Such a cumbersome structure for such a  small community seems to result in at times, confusion and un -neighborly behavior.

Mrs. Parkes asked how much time would actually be  saved with having  one board as opposed to two.   She agreed that the idea sounded good and made a lot of sense, but she wanted to hear all possible arguments against it that anyone may have before a decision is made.

Mrs. McFarland agreed and noted that this is what they wer e doing today, outlining the pros and cons,  and opening the topic to the floor for discussion. She also asked Mr. Earlywine from Hopping, Green and Sams in Tallahassee to address those present. Mr. Earlywine introduced himself, indicating that his firm represents over 200 of the 600 CDDs in Florida, as well as a number of other special districts. They also represent residential boards such as the one at Key  Marco, and many other entities, on all  issues affecting them, including dissolutions.

In terms of the dissolution itself, he noted that he is a fan of CDDs, but that there are circumstances where CDDs don't make sense, and Mrs. McFar land has outlined a number of reasons why it may not make sense in this context. There are several types of dissolution processes provided by the law, and   Mr. Earlywine recommended a very straightforward one for Key Marco.

Essentially, they would transfer or dispose of any public property rights and assets. This could be done by transfer to the Community HOA, and a  public hearing would be held later in the summer in connection    with Key Marco's budget hearings. After the transfer is completed, then the disso lution itself would be  done, which consisted of adopting a plan of dissolution involving the transfers as noted above, and would address outstanding contracts, final audits, and disposal of public records or retention of them by  the State. Once most of that is completed, the Board would come back in approximately six months, adopt     the final resolution, announce that it was going to become inactive, and send notices to the County and State. At that point, the County would take the appropriate action to disso lve  the  CDD.  Mr. Earlywine  then indicated that he would be happy to answer any questions those present may have.

In response to a question from  Mrs. Esposito, Counsel advised that the law does provide for  dissolutions of CDDs, and has several statutory pro visions regarding the transfer of assets, public rights, and things like that. The  statute does spell out a  couple of ways that the CDD can be  dissolved. Mr. Earlywine  noted that they had done a number of dissolutions where a District never really got up a nd running and was dissolved, and another where the District was never completed and ultimately was dissolved. He did like the administrative, inactive process for dissolution that they are talking about for Key Marco, and noted as well that as the assets were transferred to the HOA some adjustment time will have to be considered as issues may pop up, so this is a good process for this District.

The question was asked as to the meaning of a  transfer of assets, whether it would be an arm's length    sale or just removing surplus property from the CDD. Mr. Earlywine indicated that it depended upon the type of assets, which in this case would include cash on hand and physical infrastructure as well. Statute  190 clearly provides the authority to transfer and dispos e of property, and what he would contemplate for the Key Marco CDD is the transfer of assets at no cost to the HOA with a transfer agreement in place with them, and then simply do a deed for the real property, a bill of sale for the balance of the infrastr ucture, and then a transfer of  the reserve which would be  held in trust for the use  of  its original designation.  That money would also be repurposed for purposes of the budget hearing.

In response to Mrs. Esposito's question, Mr. Earlywine indicated that t his was new ground, and  there  have been dissolutions similar to Key Marco's, but the inactive process will give them  much  more flexibility, and the Board will control the process a little bit more in terms of timing.

Mr. Tsandoulas asked if there was any case law that covered dissolutions, and Mr. Earlywine indicated that there wasn't any litigated, but there were clear statutory provisions. His firm has done work very similar to this one, and although it is an active petition rather than inactive and the c ontext may be different, there are many similarities. In his opinion, there is not a lot of interest in suing over a dissolution, as the reality is that there is a lot of equity and fairness in this type of dissolution. Mrs.

McFarland also noted that this dissolution is not up for membership voting, but per the Statutes, the CDD Board votes on the dissolution.

Mrs. McFarland also stated that she and Mr. Midkiff have spent hours going through the two pertinent statutes, and she highly recommended the membership to go through them as well, as they lay out in a well written manner what it all means. Some of the detail may be somewhat disconcerting on how the   CDD is actually dissolved, but they would rely on Counsel to do that for them. Both Mr. Earlywine and      his partner have walked through it with Mrs. McFarland and Mr. Midkiff as to exactly what the process would be. The estimate of costs from the point forward wou ld be an additional $30,000, Counsel has put together a memo for the Board members which lays out step by step what  the process is, and  if the  Board decides to go forward with the dissolution, the next step would be  having the memo reviewed by  the Board and anyone else who is interested in it, and then having another Board meeting a  month later  to give everyone a chance to read Statutes 189 and 190 and then get together for another question and answer Board meeting.

Mr. Tsandoulas questioned whether the Board had the sole determination on whether the dissolution is done, as by his reading of 190, (section inaudible).

He was advised that the portion he was reading from was the active petition process, where the County would be petitioned for the dissolution. There is also an inactive petition where once the District is inactive, then the County will take the appropriate action. Technically Mr. Tsandoulas is correct, but the decision to go inactive would be made by the CDD Board.

Mrs. Esposito asked what the role of the HOA would be in terms of this agreement, and Mr. Earlywine noted that there would be a transfer agreement in place with the HOA, where the HOA would accept certain assets for the maintenance of the bridge and those types of things.

Mrs. McFarland noted that an update of the HOA documents just took place, and prior to that they had an attorney go through the documents to make sure that the HOA documents could accept the assets. The proposed budget for the coming year was on the agenda, and in respo nse to a question from a  member, and as the Board has not acted on the dissolution, he suggested that they just adopt the budget at this point. If a hearing is held to approve the dissolution and transfer of assets, the budget can be adjusted at that point  to be transferred to the HOA, whose year ends on a  calendar year basis and the cash will have  to be accepted at the right time.

In response to a request for clarification from Mr. Tsandoulas, Mr. Earlywine indicated that they were discussing the transfer of assets from the CDD to the HOA as provided for in the statutes.

(Over talk)

When asked about the timing of the transfer, Mr. Earlywine noted that if the Board acts in June, the property transfer hearings and repurposing hearing for the reserve monies can be  in August, and then the transfer itself at the end of the year. Mrs. McFarland indicated that the $1,100,000 in cash will be

put in a reserve account that will go over to the HOA, which can use that money to maintain the assets that are being transferred.

(Over talk)

A brief discussion was held as to what the reduction in fees would be for the  residents  and  the elimination of explanations to newcomers as to the differences between the HOA and the CDD and their respective purposes which were confusing.

In response to Mrs. Esposito's question about any unexpected adverse results from the transfer, Mr. Earlywine indicated that there are never any guarantees, but the statutes make it clear and give direction on what must be done, and he does not expect issues.

Mr. Dorrill noted that to him it sounds like they are pursuing a surplus property disposal, which he is presently involved in with another CDD. In order to dispose of CDD property, it  must be advertised by   the Board in a newspaper of general circulation that it will be auctioned. The Lely CDD is offering these several items the following week, and to the exte nt that it is appropriate, Mr.  Dorrill  asked  Mr. Earlywine to distinguish between a sale in the track Key Marco is headed, as opposed to the surplus property angle that he is familiar with, in lieu of what might just be a simple vacation of the assets. Mr. Earlywine indicated that there are differences in the types of  assets that  you would be  dealing with,  and the statute dealing with tangible personal property that  have  advertising requirements are  not  what Key Marco has in this case. The  real property is  less defined in terms of what is dictated by   Florida law in terms of disposal or transfer. In this situation, Mr. Earlywine felt that the best process would be as previously outlined.

Mrs. McFarland noted that in 190.011 it states that the general powers o f the  CDD Board are to, "dispose  of real and personal property or any estate therein". This allows the Board to dispose of real and personal property.

Mrs. Esposito asked if the 2018 budget would then be affected by this transfer, and if the assessments would be less for HOA.

(Overtalk)

Mrs. McFarland indicated that the CDD has the cushion of money that they have collected over time by charging a  little more for assessments than is required for expenses. This cushion is needed in the event  of some major issue for Key Marco, but at some point, they may wish to ask whether this pool of money  has become excessive, unless there are major expenses pending.

With the dissolving of the CDD and the transfer of assets to the HOA, there would be one Board, one president, one treasurer, and a clearer understanding of the management of Key Marco and how money is being spent and what the reserves are.

Mrs. Esposito asked Mr. Earlywine what this would mean in terms of communication for all members, so they can understand ahead of time all the issues and whether they were fully thought  out.  Counsel advised that if the Board were to proceed with the dissolution at  the June meeting, there  would be  notices in the newspaper and on the website, as well as a mail notice.

It  would describe what is  being proposed and what the meeting is about, and to the extent that there  are any issues going forward, those would be posted on the website as well. By the time the August meeting would be held there would be a  clear understanding of what the  meeting was all about and  what the process would be.

Mrs. Esposito felt that this open communication was critical and would remain so going forward, (inaudible.) Mrs. McFarland expressed again the importance of people being involved in this process, as the community is small and everyone's input was important.

The Board discussed what the next step should be, and whether they felt they should move forward with  the dissolution. Mrs. Parkes was not clear on when the decision would be made for dissolution, and was advised that it would be in August. She felt it would important to have at  least four  Board members  present as this was such a major decision, and added tha t she would not be in Florida at that time. The Board members discussed this issue, which was a continuing problem, and although there would probably  be a  quorum in August, it was hard to get people here, as there were only three Board members at    today's meeting. Mr. Perry felt that they could get Mrs. Grado and Mrs. Quartuccio to attend, and asked if Mrs. Parkes could participate via speakerphone. Mrs. McFarland asked each Supervisor if they felt that     the Board should continue to consider the dissolution o f  the  Key Marco CDD, and  three Supervisors  agreed to continue.

It was agreed that the June meeting would be set for the 29th at 8:30 a.m., and Mrs. McFarland once again asked everyone to read the statues and email her with any questions they may have betwe en this meeting and the next. A document will be sent out to all members giving information on this issue in layman's terms. On the 29th of June, a resolution will be stated to declare the Board's intent, and a preliminary plan will be broadly sketched out as to what will be done next. The meetings will be had in August to adopt all the final documents and the HOA transfer agreement.

Mrs. McFarland indicated that if they have the meeting on June 29th and the Board decides to go forward with the making the transfer and ultimately dissolving the CDD, then there is enough time to do the  advertising for the two additional hearings in August. The CDD Budget hearing will be held on the 17th of August.

Mr. Earlywine was thanked for his presence and information toda y.

FINANCIAL REPORT — DORRILL MANAGEMENT GROUP

Coleman, Yovanovich and Loester PA Statement 99

This item was informational only and no action was required from the Board on this. March,

2017 Financials

Mr. Dorrill provided a brief overview of the March midyear financials for the Board, indicating that
$1,087,000 in cash was shown on the balance shee t. There is an additional receivable shown that he will discuss with Ms. Maline and Mrs. McFarland at the conclusion of the meeting,  against  $43,900  in payables.

On the income statement Mr. Dorrill pointed out to the Board that at the end of six months they had actually received $485,000 in taxes, which is lower than Mr. Dorrill would have  hoped  for.  They  contacted the tax collector's office to see if some people had come in and paid on the last day , but the funds were not deposited booked and sent on in April. The District at this point had received about 81 percent of its assessments. It appears that 15 to 20  parcels have not  yet  paid their taxes by midyear,  and while Mr. Dorrill did not  feel that  it was a  big deal yet as  they will be receiving the proceeds from  the tax certificate sale, it was worth watching.

Otherwise, interest revenues were tracking a little above average, and year -to-date expenses were slightly above budget by about $3,900. Mr. Dorrill will share the information from  the tax collector's office regarding the number of certificates that have been prepared for  auction with  Ms.  Maline  and Mrs. McFarland once he receives it.

On a MOTION by Mrs. McFarland and a second by Mr. Perry, the March financials were unanimously accepted by the Board.

2017/2018 Draft Proposed Budget

In anticipation of further deliberations concerning the dissolution, Mr. Dorrill did a rough cash  flow  analysis and it appears that the District is going to have some where between $750,000 and $800,000 in cash at year's end, which was enough cash to address some maintenance issues.

In terms of the proposed budget, Mrs. McFarland had suggested that for the current anticipated expenses   in the budget of  $622,000, to divide that number by 134 for purposes of advertising the budget hearing    in August. This is a straight-line maintenance budget with no anticipated expanded service requests or significant repairs.

Mrs. McFarland divided the expenses by 134 and came up  with the  number $4,642, which will round up to $4,700.

On a MOTION by Mrs. McFarland and a second by Mrs. Parkes, the Tentative Budget was approved and Resolution 2017-4 was adopted which would establish August 17 at 8:30 a.m. as the formal hearing for adoption of the Budget on a unanimous vote of the Board.

Mr. Urbancic reminded the Board that the Budget must be transmitted to the appropriate governmental entities and then posted on the website.

AUDIENCE QUESTIONS AND COMMENTS

There were no further questions or comments received from the audience.

ADJOURNMENT

On a MOTION by Mrs. McFarland and a second by Mrs. Parkes, the meeting was adjourned at 10:29 a.m.

Kati e M aline

From:	Richard Perry <rperrycdd@gmail.com>
Sent:	Friday, June 16, 2017 10:39 AM
To:	Maureen McFarland; Corrie Grado; Johanna Parkes; Patricia Quartuccio
Cc:	Katie Maline; mschewitz@aol.com
Subject:	My Resignation From The CDD Board

Follow Up Flag:	Follow up
Flag Status:	Completed

Please accept my immediate resignation as vice chairman and supervisor effective today upon receipt of this email.

I have very much enjoyed serving the community during my time as a CDD supervisor where we have seen major progress.

My reason for resigning is that I want to dedicate my time and skills to improving the image and reputation of Key Marco as a whole. This can be done by creating a marketing and communications plan that both boards can support. Not being on the CDD board also frees me up to work with everyone in the community and both boards. I do understand that my contribution in this area does depend on the boards agreeing to let me help in this area. I will be active in securing that support.

Of course I will be available to the current CDD board members and the board in general to assist in any manner needed.

—  Anticipating that my  resignation  would create a vacancy I  have talked to/Mary Beth Schewitz who has agreed to  fill my ..ipot pending agreement by the rest of the board members. She is a very -C.-alboa -re profesSionil with executive and communication expertise who will contribute greatly to our efforts. Thank you, Mary Beth, for serving!! Very much appreciated.

Please remove me from all email lists, forwards, copies, and other communications of an official CDD nature. And remove my name and info from the CDD and HOA websites if applicable. This email will remain valid for one month.

After that, you are welcome to contact me at my personal address which I think most of you have. Sincerely,
Richard Perry

Richard Perry rperrycdd@gmail.com

1

R E S O L UT I O N 2 01 7 -

A RESOLUTION OF THE BOARD OF SUPERVISORS OF KEY MARCO COMMUNITY DEVELOPMENT DISTRICT AMENDING RESOLUTION 2017-4 TO RESET THE DATE OF THE PUBLIC HEARING ON THE PROPOSED BUDGET FOR FISCAL YEAR 2017-2018; RATIFYING THE ACTION OF THE DISTRICT MANAGER TO PROVIDE NOTICE THEREOF; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE

WHEREAS, the District Manager has heretofore prepared and submitted a proposed budget to the Board of Supervisors ("Board") of Key Marco Community Development District ("District") for Fiscal Year 2017-2018; and

WHEREAS, on May 11, 2017 at a duly noticed public meeting, the Board adopted Resolution 2017-4 approving the Fiscal Year 2017-2018 Proposed Budget and set a hearing thereon pursuant to Florida law for Thursday, August 17, 2017 at 8:30 a.m., at Key Marco Community Center, 505 Whiskey Creek Drive, Marco Island, Florida 34145; and

WHEREAS, the Board was unable to obtain a quorum necessary to conduct business and desires to change the date of the public hearing to August 24, 2017 at 8:30 a.m.; and

WHEREAS, the District Manager reset the public hearing on the Fiscal Year 2017-2018 Budget to August 24, 2017 at 8:30 a.m., at Key Marco Community Center, 505 Whiskey Creek Drive, Marco Island, Florida 34145; and

WHEREAS, to set the new budget hearing, the District Manager caused additional notice of the public hearing to be given pursuant to Chapters 190 and 197 of the Florida Statutes and other applicable law; and

WHEREAS, the Board now desires to ratify the District Manager's action in resetting the public hearing.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF KEY MARCO COMMUNITY DEVELOPMENT DISTRICT;

SECTION 1. RECITALS. The foregoing recitals are true and correct and incorporated herein as if written into this Section.

SECTION 2. AMENDED PUBLIC HEARING. Resolution 2017-4 is hereby amended to reflect that the public hearing as declared in Resolution 2017-4 is reset to the following:

DATE:	August 24, 2017
HOUR:	8:30 a.m.
LOCATION:	Key Marco Community Center
505 Whiskey Creek Drive

Marco Island, Florida 34145

The District Manager's actions in causing publication of the notice of the public hearing in accordance with Florida law, with the new date and time, are hereby ratified.

SECTION 3. SEVERABILITY. Should any sentence, section, clause, part or provision of this Resolution be declared by a court of competent jurisdiction to be invalid, the same shall not affect the validity of this Resolution as a whole, or any part thereof, other than the part declared invalid.

SECTION 4. CONFLICTS. All Sections or parts of Sections of any Resolutions or actions of the Board in conflict are hereby repealed to the extent of such conflict.

SECTION 5. EFFECTIVE DATE. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED this 24th day of August, 2017, by the Board of Supervisors of Key Marco Community Development District, Collier County, Florida.

KEY MARCO LAKES COMMUNITY
Attest:	DEVELOPMENT DISTRICT

Secretary/Assistant Secretary	Maureen McFarland, Chair

RESOLUTION 2017-__

A RESOLUTION SETTING FORTH THE POLICY OF KEY MARCO COMMUNITY DEVELOPMENT DISTRICT BOARD OF SUPERVISORS WITH REGARD TO THE SUPPORT AND LEGAL DEFENSE OF THE BOARD OF SUPERVISORS AND DISTRICT OFFICERS AND PROVIDING FOR AN EFFECTIVE DATE.

WHEREAS, the Board of Supervisors ("Board") and the officers of Key Marco Community Development District ("District") are constantly presented with the necessity for making decisions regarding various phases of District policy and management; and

WHEREAS, it is absolutely essential to the effective operation of the District that such decisions be made in an environment where the threat of personal liability for the Board and its officers is maintained at a minimum; and

WHEREAS, the Board wishes to formalize a policy with regard to the support and legal protection of the Board and its officers so as to reduce the threat of personal liability to such individuals and allow for an effective decision-making environment.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF KEY MARCO COMMUNITY DEVELOPMENT DISTRICT THAT:

As set forth in this Resolution, the District, in accordance with Florida law, agrees that the following Board members and officers of the District shall be provided the benefit of the indemnification, support and legal defense provisions provided in this Resolution:

All members of the Board of Supervisors; and

The District Manager, Secretary and Assistant Secretaries, Treasurer and Assistant Treasurers, and other District officers.

As set forth in this Resolution and in accordance with Sections 111.07 and 768.28, Florida Statutes, the District hereby agrees to provide legal representation to defend any and all civil actions, including federal civil rights and other federal civil claims, arising from a complaint for damages or injuries suffered as a result of any action or omission of action of all Board members and officers, present or former, arising out of and in the scope of his or her employment or function, unless, in the case of a tort action, the Board member or officer acted in bad faith, with malicious purpose, or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. Defense of such civil actions includes, but is not limited to, any civil rights lawsuit seeking relief personally against any Board  member or officer for an act or omission under color of state law, custom or usage, wherein it is alleged that such Board member or officer has deprived another person of rights secured under the Federal Constitution or laws, including, by way of example, actions under 42 U.S.C. § 1983 or other federal statute. The District hereby further agrees to provide legal representation to defend against any other litigation arising against a Board member or officer from the performance of their official duties while serving a public purpose, including civil, administrative or criminal actions as permitted by law. By these provisions, the District does not waive any immunity from liability or limited waiver of such

immunity as granted under Florida law. Rather, the District is stating that to the extent the State does not through its laws protect the Board and its officers from liability, the District is committed to doing so to the extent described in this Resolution and as permitted by law.

The District may insure itself in order to cover all reasonable costs and fees directly arising out of or in connection with any legal claim or suit that directly results from a decision or act made by a Board member or officer while performing the duties and functions of his or her position.

This Resolution is intended to evidence the District's support of Board members and officers who perform acts and render decisions in the good faith performance of their duties and functions. The District will neither support nor defend those actions or omissions committed by an individual outside the scope of his or her office or committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. By adoption of this Resolution, the District Board member(s) and/or officer(s) in question are each presumed to have acted within the scope of his or her office and are presumed to be acting in good faith, without a malicious purpose and not in a manner exhibiting wanton and willful disregard of human rights, safety or property. The District's Board of Supervisors may overcome this presumption only by unanimous vote of those participating and voting, in accordance with Section 7 herein.

In the event that the District has expended funds to provide an attorney to defend a Board member or officer who is found to be personally liable by virtue of actions outside the scope of his or her employment or function, or is found to have acted in bad faith, with malicious purpose, or in a manner exhibiting wanton and willful disregard of human rights, safety, or property, the individual shall be required to reimburse the District for funds so expended. The District may recover such funds in a civil action against such individual.

The District agrees to pay any final judgment, including damages, fines, penalties or other damages, costs, and attorney's fees and costs, arising from any complaint for damages or injuries suffered as a result of any action or omission of action of any Board member or officer as described in Section 111.07, Florida Statutes. If the action arises under Section 768.28, Florida Statues, as a tort claim, the limitations and provisions of that section governing payment shall apply. If the action is a  civil rights action arising under 42 U.S.C. § 1983, or similar federal statutes, payment for the  full amount of judgment may be made unless the individual has been determined in the final judgment to have caused the harm intentionally. The District agrees to pay any compromise or settlement of any claim or litigation described in this paragraph, provided, however, that the District determines such compromise or settlement to be in the District's best interest.

To rebut the presumption of the automatic payment of judgments or provision of legal representation pursuant to this Resolution, at least one of the following determinations shall be made by a unanimous decision of the District's Board of Supervisors participating and voting:

The actions of the Board member and/or officer were outside the scope of his or her duties and authority; or

The acts or omissions of the Board member and/or officer constituted bad faith, malicious purpose, intentional infliction of harm or were done in a manner exhibiting wanton and willful disregard of human rights, safety or property; or

The Board member and/or officer received financial profit or advantage to which he or she was not legally entitled.

To ensure the provision of legal representation pursuant to this Resolution, the following must be met:

A copy of the summons, complaint, notice, demand letter or other document or pleading in the action, or a letter setting forth the substance of any claim or complaint, must be delivered to the District Chairman, Vice Chairman, District Manager or District Attorney within fourteen (14) calendar days after actual receipt of any such document together with a specific request in writing that the District defend or provide representation for the Board member and/or officer; and

The Board member and/or officer must cooperate continuously and fully with the District in the defense of the action.

Any indemnification, legal defense or other protection provided pursuant to this representation shall not extend to:

Consulting or other outside professional or business activities for which the Board member and/or officer received financial or other material compensation, which are outside the scope of his or her District duties and authority; and

Any independent contractor for whom defense or indemnification is not authorized pursuant to Section 1(b) of this Resolution, unless the Board votes to authorize such indemnification, legal defense, or other protection; and

Any fine, penalty or other punishment imposed as a result of conviction for a criminal offense, and any legal fees and costs incurred to defend criminal prosecution in which a conviction is obtained; and

Any indemnification or defense prohibited by law.

In the event legal representation or defense is provided pursuant to this Resolution, the Board member and/or officer may either:

Retain legal counsel appointed by the District, in which case legal counsel shall be paid directly by the District; or

Retain legal counsel chosen by the Board member and/or officer, in which case the District shall have the right to:

Approve, in advance, any agreement for legal fees or disbursements; and

Pay all or part of the legal fees, costs and other disbursements and to set a maximum for legal fees, costs and other disbursements; and

Direct the defense and settle or compromise the action or claim; and

Reduce or offset any monies that may be payable by the District by any court costs or attorneys' fees awarded to the Board member or officer.

The benefits of the policy adopted in this Resolution shall not enlarge the rights that would have been available to any third-party plaintiff or claimant in the absence of this policy.

To the extent permitted by law, this policy shall inure to the benefit of the heirs, personal representatives and estate of the Board member and/or officer.

The District reserves the right to change, modify or withdraw this Resolution in its sole discretion, except as to actions, demand or other claims based on acts or omissions that occurred before the effective change, modification or withdrawal of this Resolution.

This Resolution shall be effective as of its adoption on the date listed below and shall apply to any acts or omissions occurring after that date.

PASSED AND ADOPTED this	day of August, 2017.

KEY MARCO COMMUNITY
Attest:	DEVELOPMENT DISTRICT

Secretary/Assistant Secretary	Maureen McFarland, Chair

AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT

THIS AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT (this
"Restated Agreement") is made and entered into as of the 1St day of March, 2017 ("Effective Date"), by and between KEY MARCO COMMUNITY DEVELOPMENT DISTRICT ("District") and DORRILL MANAGEMENT GROUP, INC., a Florida corporation ("DMG"). DMG and District are sometimes individual referred to herein as a "Party" and collectively referred to as the "Parties".

R E C I T A L S :

WHEREAS, District and DMG previously entered into that certain District Management Agreement dated as of June 26, 2007, as amended (the "Original Agreement") for the provision of management services for the District; and

WHEREAS, District has engaged Key Marco Community Association, Inc., a Florida not-for- profit corporation ("HOA") to provide district management services to District through the HOA's personnel. As a result of the said engagement, the services required by District from DMG have changed; and

WHEREAS, District desires to engage DMG to provide certain management advisory and accounting services described herein; and

WHEREAS, this Restated Agreement shall amend, restate, and replace the Original Agreement in all respects as of the Effective Date.

NOW, THEREFORE, for and in consideration of the mutual promises contained in this Amended and Restated Agreement, the Parties agree as follows:

Recitals. The above recitals are true and correct and incorporated herein by this reference.

Term. The term of this Restated Agreement shall be for seven (7) months, commencing upon the Effective Date and ending September 30, 2017 ("Term"). The District shall have the option to extend this Agreement for an additional six (6) months ("Extension Term") on the same terms and conditions, provided that not less than thirty (30) days prior to the end of the Term, District provides DMG with written notice of its option to extend this Restated Agreement.

Scope of Services. District hereby retains DMG to provide those management advisory and accounting services set forth on Exhibit "A" attached hereto and made a part hereof ("Services"). DMG shall devote the amount of time necessary throughout the Term (and Extension Term, if applicable) to complete the Services and fulfill its duties, responsibilities and obligations to District.

Fee. As consideration for the Services that DMG agrees to provide hereunder, District agrees to pay to DMG a flat monthly fee of $1,850.00 per month ("Management Advisory Fee") during the Term (and, if applicable, the Extension Term) for the Services, commencing on the Effective Date of this Restated Agreement. The Management Advisory Fee shall be paid by District in one payment per month, which payment shall be paid on or before the fifteenth (15th) of each month, continuing through the expiration of this Restated Agreement or earlier termination hereof. DMG is an independent contractor and fees paid pursuant to this Restated Agreement shall not be subject to the customary withholding of income

AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT PAGE 1

taxes and other employment taxes. DMG shall be solely responsible for reporting and paying any such taxes as an independent contractor.

Insurance. DMG shall obtain and carry, at all times during its performance of the Services hereunder, the following insurance:

Workers' Compensation insurance on behalf of all employees, as required under applicable Florida law.

Commercial General Liability insurance on comprehensive basis including but not limited to bodily injury, property damage, contractual, products and completed operations, and personal injury with limits of not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) aggregate.

Commercial Crime insurance with a per loss limit of one million dollars ($1,000,000).

Professional Liability insurance with an aggregate limit of one million dollars ($1,000,000).

District shall be named as an additional insured on the commercial general liability policy and the policy shall be endorsed that such coverage shall be primary to any similar coverage carried by District. Certificates of insurance acceptable to District shall be filed by DMG with District prior to the commencement of the Services.

Independent Contractor. This Restated Agreement does not create an employee/employer relationship between the Parties. It is the intent of the Parties that DMG is an independent contractor under this Restated Agreement and not District's employee for all purposes, including but not limited to, the application of the Fair Labor Standards Act minimum wage and overtime payments, Federal Insurance Contribution Act, the Social Security Act, the Federal Unemployment Tax Act, the provisions of the Internal Revenue Code, the State Workers' Compensation Act, and the State unemployment insurance law. DMG shall retain sole and absolute discretion in the judgment of the manner and means of carrying out DMG's activities and responsibilities hereunder provided, further that administrative procedures applicable to the Services performed shall be those of DMG, which policies of DMG shall not conflict with District, or other government policies, rules or regulations relating to the use of DMG's funds provided by this Restated Agreement. DMG agrees that it is a separate and independent enterprise from District, that it has full opportunity to find other business, that it has made its own investment in its business, and that it will utilize the skill necessary to perform the work. This Agreement shall not be construed as creating any joint employment relationship between DMG and District and District will not be liable for any obligation incurred by DMG, including but not limited to unpaid minimum wages and/or overtime premiums. DMG shall not incur expenses on behalf of District, enter into any contract on behalf of District, either written or oral, or in any other way attempt to obligate or bind District except upon the express prior written approval of District, which approval may be granted, conditioned, or withheld in District's sole and absolute discretion.

Termination. This Restated Agreement may be terminated by either Party upon sixty (60) days prior written notice to the other Party. Further, this Restated Agreement may be terminated by either Party upon a material default of the other Party, if after twenty (20) days written notice, the defaulting Party has failed to cure the default stated in the notice. Any default notice under this subsection shall state the nature of the default and give the defaulting Party twenty (20) days after the date of the written notice to cure the default. In the event of a termination hereunder, DMG shall be entitled to payment for work performed pursuant to this Restated Agreement through the date of termination; provided, however, in the

AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT PAGE 2

event of a termination after default, the non-defaulting Party shall be entitled to all remedies available at law or in equity. Upon the termination date (whether after default or for convenience), DMG shall immediately discontinue all services and deliver to District copies of all documents and such other information and materials as may have been accumulated by DMG in performing the Services.

Public Records. In connection with its services to District, DMG agrees to fully comply with the provisions of Section 119.0701, Florida Statutes pertaining to Florida's Public Records Law. Said compliance will include DMG taking appropriate and necessary steps to comply with the provisions of Section 119.0701(2)(b), Florida Statutes including, without limitation, the following:

DMG shall keep and maintain public records required by District to perform the services hereunder.

Upon a request for public records received by District, DMG shall provide District with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided in Chapter 119, Florida Statutes or otherwise provided by law.

DMG shall ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the agreement term (and any extension) and following completion of this Restated Agreement if DMG does not transfer the records to District.

Upon completion of this Restated Agreement, DMG shall transfer, at no cost, to District all public records in possession of DMG consistent with Florida law. All records stored electronically by DMG must be provided to District, upon request from District's custodian of public records, in a format that is compatible with the information technology systems of District.

Failure of DMG to comply with Section 119.0701, Florida Statutes may subject DMG to penalties under Section 119.10, Florida Statutes. Further, in the event DMG fails to comply with this Section or Section 119.0701, Florida Statutes, District shall be entitled to any and all remedies at law or in equity. The following statement is required to be included in this Restated Agreement pursuant to Section 119.0701(2), Florida Statutes:

IF DMG HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO DMG'S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS RESTATED AGREEMENT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS AT KATIE MALINE C/O KEY MARCO COMMUNITY ASSOCIATION, INC., TELEPHONE: 239-784- 5110, EMAIL: KATIE@MANAGERKEYMARCOHOA.COM AND MAILING ADDRESS: 505 WHISKEY CREEK DR., MARCO ISLAND, FL 34145 (OR APPLICABLE SUCCESSOR), WITH A COPY TO COLEMAN, YOVANOVICH & KOESTER, P.A., ATTN: GREGORY L. URBANCIC, ESQ., EMAIL: GURBANCIC@CYKLAWFIRM.COM, AND MAILING ADDRESS: 4001 TAMIAMI TRAIL N., SUITE 300, NAPLES, FL 34103.

Assignment. Neither Party may assign this Restated Agreement without the prior written consent of the other Party, which consent may be withheld in the other Party's sole and absolute discretion.

Entire Agreement. This Restated Agreement contains the entire agreement and understanding among the Parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Restated Agreement may not be modified or amended other than by an agreement in writing.

Amendment or Modification. This Restated Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by both Parties, or their respective successors or permitted assignees.

Severability. If any provision of this Restated Agreement shall be held invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable, but only if the remainder still gives effect to the purpose of this Restated Agreement. If a court finds that any provision of this Restated Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

No Waiver. The failure of either Party to enforce any provision of this Restated Agreement shall not be construed as a waiver or limitation of that Party's right to subsequently enforce and compel strict compliance with every other provision of this Restated Agreement.

Applicable Law. This Restated Agreement shall be construed in accordance with and governed by the laws of the State of Florida. It is the Parties' intent and direction that Florida law governs this Restated Agreement and that the sole and exclusive venue for any litigation involving this Restated Agreement shall be in Collier County, Florida.

Attorneys' Fees. The prevailing party in any lawsuit brought to enforce or interpret the terms of this Restated Agreement shall be entitled to recover its attorneys' fees and costs from the non- prevailing party, including on appeal.

Notices. Any notice required to be given hereunder, shall be in writing, and may be given by personal delivery, regular United States mail, commercial overnight delivery service (i.e. FedEx or UPS), or by email. Any notice required to be given to District and/or DMG pursuant to this Restated Agreement shall be sent to the following addresses:

If to District:	Key Marco Community Development District Attn: Katie Maline
505 Whiskey Creek Dr. Marco Island, FL 34145
Email: katiemanagerkeymarcohoa.org	

If to DMG:	Dorrill Management Group, Inc. Attn: Neil Dorrill
5672 Strand Court, Suite
1 Naples, FL 34110 Email: Neil®dmel.com	

Any notice to District shall also be sent to the Chairman of District at the home address of the Chairman within Key Marco (currently Maureen McFarland, 1230 Blue Hill Creek Dr., Marco Island, FL 34145, mmmcfcdd@gmail.com), or at such other address as District shall specify hereinafter in written notice to DMG. Any notice, request or other communication shall be effective upon actual receipt, or shall be deemed to be given: (i) upon receipt or refusal to accept, in the case of hand delivery, (ii) upon transmission in the case of email; (iii) one (1) business day following deposit of such notice with a commercial overnight courier service, or (iv) three (3) days following deposit with the U.S. Postal Service.

Titles not to Affect Interpretation. The titles of sections and subsections contained in this Restated Agreement are for convenience only, and they neither form a part of this Restated Agreement nor are they to be used in the construction or interpretation hereof.

Execution in Counterparts. This Restated Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any Party whose signature  appears thereon, and all of which shall together constitute one and the same instrument. This Restated Agreement shall become binding when the counterparts hereof, taken together, bear the signatures of all of the Parties reflected hereon as the signatories.

(Remainder of page intentionally left blank. Signatures appear on next page.)

Date.

IN WITNESS WHEREOF, the Parties have executed this Restated Agreement as of the Effective

DISTRICT:

KEY MARCO COMMUNITY
Attest:	DEVELOPMENT DISTRICT

By: _________________________
Secretary/Assistant Secretary		Chairman/Vice-Chairman Dated:   	

D M G :

DORRILL MANAGEMENT GROUP, INC., a
Florida corporation

By: _________________________ Name: _______________________ Title:   	

Dated:   	

AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT PAGE 6

Exhibit "A" Scope of Services

Management Advisory

Coordinating, consulting and assisting the District and the HOA (as provider of district management services to District) with administrative matters of the District and fulfillment of applicable legal and regulatory requirements applicable to the District.

Advising and assisting the District on all CDD compliance matters.

Prepare Fiscal Year 2017-2018 Preliminary and Final Budgets and any amendments thereto.

Attendance at, and participation in, four (4) meetings of the Board of Supervisors during the Term. (In the event the District exercises its right for the Extension Term, attendance at, and participation in, four (4) meetings of the Board of Supervisors during the Extension Term.)

Transition of all records and files of the District to the District and its management, as necessary.

Accounting

Assist the District with all CDD accounting needs, including establishing and maintaining Government Fund Accounting System for the District in accordance with the Uniform Accounting System prescribed by Department of Banking and Finance for Government Accounting, Generally Accepted Accounting Principles (GAAP), Government Accounting Standards Board (GASB) and any rules of the Auditor General.

Preparation of annual financial report for applicable units of local government and distribution to the State Comptroller.

Preparation of all required schedules for the District's year-end audit and coordination with the District's auditor in the performance of the annual audit.

AMENDED AND RESTATED DISTRICT MANAGEMENT AGREEMENT PAGE 7