Board of Commissioners - Regular Meeting

fire.

All right. Good evening everyone. Want to welcome you to the Kawa County Board of Commissioners meeting for January the 26th of 2026. And thank you for being here this evening. Our first order of business, we'll have our invocation. And we've got Pastor Brandon Thomas from Calvary Advent Christian Church with us this evening. And we'll follow that with our pledge of allegiance with Commissioner Patrick Starn. So, pastor, come to the podium. Yes, sir. Let's pray.

Father God, I'm so thankful for a local government that has decided to come to you first before making any other decision. Your word tells us that we are to pray for our leaders. And Lord, we do that. I pray that you give tremendous, wisdom, insight, clarity, and compassion to every single person, Lord, that you would help them to be quick to understand, Lord, that you would help them choose their words carefully in ways that would honor you. coming together, united with one simple purpose, Lord, to help people. So I pray that you would work through them to bring hope, help to this community. It's in the mighty name of Jesus we pray. Amen.

Amen. Amen. Salute. Pledge. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. All right. Thank [clears throat] you everyone. Pastor Thomas, thank you for filling in this evening, but we appreciate you being here. All right. Are there any amendments to our agenda this evening? No amendments. Good. So, do I hear a motion that we adopt the this evening's agenda as presented?

Mr. Chair, I move that we accept this evening's agenda as the county manager has presented. Any other comment or discussion? All in favor say I. I. Any opposed? And that motion carries. And our first item on the agenda this evening is recognition of our story. And uh we have Paige Counts with us this evening for that recognition. We got a lot going on here gentlemen. So give me just a second.

Yes ma'am. First, I want to say thank you to you as a board because two years ago, you recognized the importance of America's 250th birthday and you approved a grant for this display in the hallway. So, thank you for taking that initiative then. I'm not going to say that I would have thanked you every day during this process, but [laughter] I thank you now. But there's been a lot of work going over the past two years into this display. I am grateful to Kirsten Banks who's our social media strategist because she had the vision to design it. We gave her a whole lot of facts and she produced what you see out here. I would still be standing at staring at a black wall going, I've got 36 pages. How do I fit them on this wall? But she had a vision and she condensed all that. So, I'm grateful to her. We're also grateful for facility services. All of those frames had to be hung by someone and they came in and they w willingly hung them up. But like I said, we're really proud proud of our story. We're proud of the work that went into it. We're proud of our committee who worked on it. But one of the things I'm most proud of, well, is that in that display, this map shows a notation for every community mentioned, for every community, every photo, it tells you where that location is. And if you'll look at that map, you'll see that we've pretty well covered Cowell County.

Yeah. And that's what I'm proud of because when we came down to the end and we had a hole somewhere we were I mean it was like okay we need a picture of Dudley Scholes we you know or we actually one of them was we need a picture of Malberry. So we I mean we went out and we searched for those pictures so that we could have representation. It's not a Lenor thing. It's not a Hudson thing. It's not a Granite Falls thing. It's a Cowell County thing. And I'm really proud of that. And I hope that what one thing this display will do is not only educate people about Cowell County, but it'll encourage them to go to our history museums to reach out to take time to go out to Fort Pines or the Coal Heritage Museum, the Granite Falls History and Transportation Museum, the Gable History Museum, and the Hudson Depot Museum. We want people to reach out and learn more because what we did was scratch the surface. You can't cover more than 250 years in that amount of wall space and tell you everything that's happened. You just can't do it. But we tried to scratch the surface and include as many communities as possible. And the people behind that are the people we're here to recognize tonight. So, if you guys will come down front and join us. certificates and hopefully they're in order.

I hope

if they're not just, you know, they can sort them out later. [laughter] Again, I do want to say thank you to this committee. They have spent hours and hours sitting with me, working with us, looking through pictures, proofreading the display, um, advocating for their community. So, they have been a major part of this. We have not done this alone. This has been a group effort. So, we want to recognize all of our committee members tonight. And the first one is Kirsten Banks. [applause] Like I say, Kirsten's been the driving force behind it. Sometimes she was the the person that, you know, kind of kicked me in the butt.

We also have Nelson Brookshire that helped us, [applause]

Sharon Br. [applause] Yes, please stay.

Um, Pam Smith Cook. Pam is, if you don't know, she is Stay [applause] on the Pam is the I'm gonna call her the curator of Cowwell County Archives. So, all those photos you see online, that's Pam. Linda Richards Crowder. [applause] Linda is I'm call her the Granite Falls historian. You need something about Granite Falls. This lady knows it. Cindy, I didn't practice.

You didn't practice. Okay, Nelson. It's okay. They're a little bit of an unruly committee. Um Cindy Hedrickk Day. Cindy [applause] is Cindy is coordinator of the Cowell County Heritage Museum and advocate for King's Creek if you don't know that. Mayor Joe Gibbons [applause] and if I can get him out of control room, Eric Stafford. I don't know if Eric can pop out and join us or not. [applause]

He's sneaking out. I also want to I want to mention the committee members who were not here with us tonight. And those are Amber Bryson, Brenda Floyd, and Sherry Hartso Sigman. So, we did have a few that couldn't be here, but if everybody could gather together here, we will um we'll get a photo. I'll stand.

Yes. Thank you all. [applause]

Thank you.

[laughter] Mayor K mean.

All right. Thank you everyone and again we appreciate all the efforts that's gone into that and looks great and we appreciate everyone's participation so much. Next, we've got a presentation this evening about the Charlotte Interbation Transfer Update, and Mr. Anthony Star from Western Peont Council of Governments is here to assure us that we're fighting tooth and nail to keep this from happening and have been for a long time. The first time it came up several several years ago and now as much as recently. So, thank you for coming and giving us an update this evening.

Thank you, Mr. Chairman, commissioners, and staff, appreciate the opportunity to join you this evening. And as you mentioned, this is a a new fight that we started in the spring of 24 when Charlotte began this process. And of course, Calwell County has been an important and early uh participant in that coalition to uh fight this uh this effort by Charlotte that will have potentially very serious consequences for all the communities up and down the river chain of the Kataba River. So what we wanted to do tonight is present you with some information. Uh you you guys have seen uh many updates over the over the months and last year and a half uh on some of this information will be familiar to you. Some of it will be new. Uh so but I just wanted to provide an update and we want to keep this issue at the forefront. So we'll talk a little bit about in a few just a few minutes. to take about, you know, 15 minutes maybe to talk about uh the background of this, the Kataba River Basin, Charlotte Waters request, the alternatives, a little bit about our coalition, and the legislative study that's underway. So, for the benefit of the public, let me just talk momentarily about what an interbasin transfer or an IBT is. And what it is is when a community such as the city of Charlotte withdraws water from the Kataba River or another river chain, uses it and then discharges it into a different river basin. In some cases, they will pull the water out, return part of it through the wastewater treatment process. But in other parts, they may transfer it over a ridge line, use it, and then it not get returned. So when we talk about the interbasin transfer, we're not talking about all the water they pull out of the Kataba River and return. We're only talking about the water that they push across the river bas the the the ridge line into a different river basin and doesn't return. That is what the IBT is that

we're talking about. So what does the academic literature say about IBTS? Our team has done research in this. We've got a team of consultants that is working on this uh that Cowell County and the other local governments uh support. Uh and basically two key things is uh um it has both economic and environmental negative impacts on the source basin and we're the source basin the Kataba River and so there we the the research is pretty consistent about that across different scenarios throughout the country. So currently uh Charlotte Water has a 33 million gallons per day IBT certificate that was issued in 2002. Concord Canapapolis that was the one that was a big fight about 15 years ago uh with sought to withdraw 30 something million gallons per day. They were eventually approved for 10 million gallons coming out of the Kataba River uh and another 10 million coming from uh the the Yadkin. And then the town of Morsville also has a pre-existing uh allowance of 9 and a half million gallons per day. Morsville sits right on the ridge line. A little bit different situation with them. Um so about the Kataba River Basin the way we look if you look at this is the map of the inter ba the the major river basins and the subbasins as designated by the state. Um and we're in green there on the on the western part of the state. You'll know the Kataba river basin is actually one of the smaller river basins in the state. Uh but these are how these are regulated when you transfer water across those lines under the state. About the Katabra River Basin, it was the first river basin completely planned and developed for electricity in the United States. U has we have 11 reservoirs or lakes as we call them up and down the the uh the uh the river about 1,800

miles of shoreline. Um, and we have usable storage of about 252 billion gallons, but we can't get to I mean that to all the storage is there. So, it's limited. Um, and it's about 7% of our annual rainfall we store. And that's important because that comes up in drought conditions. Uh, often Duke uses a it a lot for their energy production, but it's also the most densely populated river basin in North Carolina. [clears throat] [snorts]

Now, why is this uh a factor and why is this important? Well, at the end of the day, the Kataba River is a threatened river. In fact, twice in the last couple of decades, it's been labeled as the most endangered river in the United States, primarily because of the unprecedented demand for clean water associated with the exponential population growth in the Charlotte metro. Now that [clears throat] comes up really and becomes important during drought conditions, right? And our our Duke Energy manages our river system together. So our lakes are that storage during those drought conditions. Um and so lake Lake James, Lake Rodius, Lake Hickory, all these lakes, they're they're managed together. And so Duke will pull water down the river chain to supply the needs uh as we go. Uh Lake James is basically our Alamo. That's the largest lake in the river chain and it is the one that is our is our fail safe during extreme droughts. The way to read this chart, this is from the US drought monitor. It shows the droughts in North Carolina going back to the late 1990s. The way to read this chart is the higher the bar on the chart, the more the greater percentage of North Carolina was in that drought, the darker the color, the more severe the drought was. So we had s two severe droughts uh in the last uh 25 plus years. The 98 2002 drought and the 2007 to 2009 drought. Now when how does this come into play? This is a diagram we put together. If it's shows like a water treatment plant uh say Granite Falls or Lenor for example uh at the top on the right they have an intake on the bottom uh there that you see on the on the chart. The blue line represents the normal elevation of our lakes. The red line

represents the critical reservoir elevation. And basically when we reach that point uh if the water gets too low then we are not able to pull water out of the lake for drinking water and other public uses at that point. So that's why it's our our critical level. The rest of the water below that line we can't really use because our intake is not low enough. Plus it has a lot of uh turbidity which is a fancy term for mud and dirt and water and so it makes it expensive to use uh and treat. So about the 98 2002 drought, uh that was one of the largest p uh deficits of rainfall uh on record. Uh this map shows you where the most severe areas were in terms of flows in our streams and rivers. Uh the way to read that is the pink area was the area that was hit the hardest. that was you will note that that 98 2002 drought was centered mostly in western North Car in western Piedmont our area going down uh towards uh south of us as well. So uh has a lot of uh impacts when we reach these droughts and we have to manage that. And then you about this 0709 drought. That was the most severe drought on record uh for North Carolina. And and at that point, Hickory was putting out press releases that they were trying to reduce consumption by 20%. Our our lake levels dropped by 8 to 10 feet during that drought. Lake Norman uh dropped to just 3.1 feet above the water intake for cooling water for the nuclear power plant. That's kind of important. So, uh, meanwhile, at the same time, Charlotte is pulling water from the Kataba River and it loses about 19% of every gallon it takes through leaks in its system and other inefficiencies. And so, every system has water loss, but they are on the high side. And we

believe that they ought to fix their leaks and have a lower water loss percentage before they try to transfer water out of the river basin. Now Anthony, um not mean to cut you off, but in the 2008 2002 2008 or 2009 drought that that 2008 year, that's what caused the city Lenor to expand their intake into Lake Rotis because they made modifications to they made modifications to push it out further into the lake so they could draw more water in the future.

Correct. Yes. So about um Charlotte might say, well, you know, us transferring IB water out of the this IBT, it's not that significant. It's not that much water. And here's the way I would put it in perspective, right? Because these are big numbers. Charlotte Water publishes its water conservation goals like a lot of all of our utilities. And their goals say that extreme drought, they hope to conserve 10 to 20% of the water, reduce their consumption by 10 to 20%. They use about 125 million gallons of water per day. So that equates to about 12 a.5 to 25 million gallons per day that they would hope to conserve during an extreme drought. Well, they are proposing to transfer up to 63 million gallons per day. So that is two and a half to five times more than their conservation goals during extreme droughts. So either the IBT is a significant amount of water being transferred out or their drought conservation goals are not adequate. So about their request, so they have an approval, as I mentioned before, for 33 million gallons per day. That was supposed to last them the 2030. They're approaching that limit and they have published a notice that they may want to increase it up to 63 million gallons per day. Uh if you look at the map on the right of Mechinberg County that they produced, uh you can see where they pull the water out with the red dots along Mountain Island Lake and Lake Norman and they treat at their water treatment plants and the blue squares and then that they're transferring a portion of it across the ridge line which is that purple line on the right side of the map. that is basically in the eastern third of Mechenburgg County and uh that's about 30 million gallons of water they want to push across additional 30 million gallons per day they want to push across the ridge ridge line that will serve about 300,000 more people. So basically what they're saying is they

want to put about another 300,000 people in eastern Meckenberg County. Uh so our whole region is about 375,000 to put that in context our 4ount area. Uh, and that's their business, right? But we shouldn't have the negative consequences for our region, for their growth. We're not against their growth. We just don't want it to be at a cost for us. So, Charlotte's Water has both econ economic, financial, and legal consequences for other communities up and down the river chain. You can see here that the population growth on the eastern side of Mechmberg County is substantial. And that's part of what's happening there with the adjacent counties and the growth that is spilling over there. And as part of what's driving this, at the same time, you look at the so there's this group called the Kataba Watery Water Management Group. It was established uh after the last IBT battle and the rek relly licensing uh with Duke Energy a number of years ago and it's all the communities that produce water up and down uh the Kataba Watery River in North Carolina and South Carolina. They put out a water supply plan in 2014. They're they're charged with coordinating and and and doing planning for the river system. And what that study cited was research that uh we will reach the safe yield for our basin's reservoirs uh by 2050 during droughts. So uh that means what that means is that during droughts we won't have enough water by midentury. I will tell you I think we may reach that point sooner because the growth rates assumed in those studies have been exceeded by Charlotte and and since that study was produced. And so our research has actually went back and looked at the water flow of the Kataba River to the 1960s. And so we're not even dealing with a consistent amount of water. What the data shows

there on the chart on the right is that the flow of the Kataba River is actually in a decreasing over time from the 1960s until now. So Charlotte wants to transfer more water out of the river basin at a time when our water flow is actually decreasing. So we're going to reach our limits sooner and our availability of the water may be declining according to this data. At the same time, Charlotte has more affordable water. Uh their rates are more affordable as a percentage of median household income than 90% of all other utilities in North Carolina. Uh their customers pay less for the same amount of water. At the same time, Charlotte loses about 19% of its water treated annually. And a way to read this chart on the right, it's an index of affordability. Uh the the uh the dark black line of dot on the right is the average or the median for North Carolina. The blue one is is the utilities in our region. And then Charlotte's that orange dot on the left side of the chart. Uh and so they have uh you know very cheap water uh and that means they have the ability to increase their cost to do the right thing. The bottom line the the IBT means cheaper water for Charlotte but more expensive water for other communities on the Kataba River Basin as a result. Now, we're concerned about the legal impacts of continuing to approve these IBTs because we keep setting a precedent for this and it's going to keep happening. So, we're that's why we want to put the brakes on this uh from continuing to happen because we're just going to exhaust this uh resource limited resource that we have. Charlotte has alternatives uh right now. So they uh they they they their IBT ba basically proposes maximum harm to the Kataba River Basin communities and maximum benefit to Charlotte as two primary alternatives. They can look at uh take water from the Yadken River Basin either by produ creating its own water treatment plant or purchasing water from

an existing utility or return its waste water back to Kataba River by discharging the water into a stream uh that flows back to the Kataba River. Again, as I mentioned to you before, we don't count as an IBT if the water is returned back to the Ricataba River. Both of these options require infrastructure. And they looked at this back in 2002 when they did their initial IBT certificate. And back then, they said the cost would be either 16 million or 82 million for uh those options. And now they're saying as of recent information that they put out a couple of years ago, that both options would cost over $800 million. And that seems like a really large number. And we're not saying that we accept those estimates as being right at this point, but for argument's sake at the moment, let's assume that they are correct. Uh consider that Charlotte Water has an annual budget of $651 million. Not the city of Charlotte. Charlotte Water has an annual budget of $651 million. They plan $2.3 billion dollar in infrastructure projects over the next five years for Charlotte Water. So if you take the options, one of the options to avoid this IBT, they can achieve that by a 12% increase in their capital budget over the next 15 years. We think that's a reasonable request. We're not talking about making it an unsustainable rates for their system. they can do the right thing and absorb the cost. Now, Charlotte has not invested alternative water source projects in this century. And at the same time, Charlotte leaders backed a sales 1 cent sales tax increase for transit infrastructure. Uh Charlotte received also $141 million in pandemic related funding that could be used for water and sewer infrastructure, but they said they

were not they did not use that money for that purpose. So the bottom line is Charlotte pays less for water, receive federal funds for water infrastructure, but didn't use it for that purpose. Supports a tax increase for other nonwater infrastructure. They have the means to do the right thing but just have not chosen uh not the desire to do the right thing on this and avoid the IBT. So about the Kataba River Coalition, the local governments in our four county areas plus Mcdow County and Cowell County of course uh requested the council governments uh facilitate the uh efforts to fight this IBT. And so, uh, thank you for your support along the way, uh, and from the very beginning of this when we started back in February or March or whatever it was in 2024. And and and your staff has been on the steering committee along the way that's guided the efforts on this. And so, uh, we've tried been trying to give you regular updates about this along the way. And uh what we're doing tonight is going uh like meetings like this is going around and giving an update publicly just to keep the issue in the forefront uh that you have been tracking all along. So um the local government like as I mentioned we're coordinating this. The environmental management commission is established by state law. They're the entity that is appointed by state leaders to uh approve and review uh potentially these IBTs amongst other things. uh they will hear uh the there'll be an environmental impact statement and a public hearing at some point that may happen in I think with the moratorum they'll talk about momentarily uh as early as sometime in 2027. Uh so uh we we'll continue to monitor that. It's kind of the steps. Our key points about this is that our region's growth could be limited because of these large IBTS. We're concerned

with the the supply of water gets exhausted. That uh some federal or state agency is going to say to our water utilities, you can't expand your water treatment plant because too much water is already being pulled out of the Kataba River. And the more that we do these IBTs, the faster we're going to reach that limit. So, we're not opposed to Charlotte growing. We just don't want that growth to occur at our expense. And the limited resources of of the Kataba River should not be used to subsidize huge growth outside of our river basin. And Charlotte has and the ability and should implement policies and infrastructure improvements to avoid these IBTs. And these IBTs will make the impacts of severe droughts worse for communities along the Kataba River. So as I get near the end here uh about the there was a legislation passed last year house bill 850 uh interbas and transfer moratorium. So it placed a moratorium on these large IBTS of 15 million gallons per day or larger that were going to be increased or new new IBTS. Uh it directs it directed the uh North Carolina Collaboratory at UNCC Chapel Hill to do a study and provide recommendations to the general assembly. Uh and it's in the early stages. The moratorum lasts until March of 27. The study is due due with its recommendations I think in January of 27. So we're working and tracking on that. There's a couple of uh things that's required that has the the collaboratory has to study the current statutory process for how these IBTS are approved and they have to provide recommendations on how the process should be changed and what factors should be used. We're asking for two a number of different things but two key things through all this is one that large IBTs ought to have a shot clock to use basketball vernacular right is that

uh they should be temporary and time limited and say 15 years or so uh and you get an IBT to accommodate a growth a growth spurt uh and then but you have to build the infrastructure uh to eliminate that IBT before that period ends and then also if you do have an IBT, a drought mitigation fund funded by that utility that requested the IBT should be established where impacted communities could use the money to make themselves more drought resilient. That might involve lowering the intakes further on the lakes, which is an expensive process, or providing uh interconnections between utilities so that if one community has a an emergency worse than another, we can turn on some valves and get a greater supply of water in those situations. So, what we're asking our coalition members to do is to respectfully engage our state legislators using these key points um that we provided and we're also asking you to engage the collaboratory to share your local perspective. We'll send you some information about that that you can use and what we're asking is all of our local governments to to to write a letter to the collaboratory at some point here soon. We'll follow up with you on that uh to talk about what your concerns are and what you want to see out of this. the end of the day, the next 50 years of growth in our region will be determined by this issue. And so we want to keep this in the forefront of everyone's minds. So again, thank you for your support of the COG in general, as you always are, very supportive in the partnerships because as you know, you're one of the owners of the COG. Our purpose is to serve our local governments and that's what we're trying to do with this effort and facilitating this. Uh, and so thank you for your support along the way from the very beginning on this process and your your efforts to uh, work on this. So I'll be glad to answer any questions you may have.

All right. Has anybody got any questions of Anthony?

Yeah, I do. Um, so thank you Tony. I mean, Anthony for all the um updates because you guys have done a good job with it and I want to assure the citizens that from day one that Cwell County and the board of commissioners has been heavily involved in this and we've supported it from day one. Um couple things I've been I went to a couple of the public meetings and the public um they had I think they had handful of them. So I attended some of those and early on one of the concerns was that they're required to do a study on the need study. You know they have to do a need study

right why they need it but what was not required at the time was the impact there was not they didn't they didn't have to do an impact study on what the impact was downstream. So has that been resolved or has that been or is that still in play? So they have to produce a document called an environmental impact statement that is supposed to look at the impacts. And so what happens with the process when it goes to the EMC, the MC has a hearing and then stakeholders like ourselves are given an opportunity to say how their statement, their report basically is not adequate or it should consider other things. And then the EMC takes into account all that information on one to decide whether or not to approve the IBT and two what conditions it might place on the entity requesting it.

Okay. And I know that and you mentioned this a couple times and this was our this was our argument early on is that the 19% loss they have in city of Charlotte um if they would repair that infrastructure to your point they would almost have enough to cover their what they're asking for

substantially reduce it for sure. I mean I mean the average nationwide is like 14% or something you know and they're at 19%. And we just think your system should be efficient before you want to transfer more water out of the out of the basin. And and I think, you know, my argument from day one has been the fact that you go back to when they the first the first one and made all these recommendations and Charlotte hasn't done anything to they might have done a few things, but for the most part, they've not done nothing but transfer this burden or want to transfer this burden because it's easy. They think it's the easiest path, but it's not our responsibility and the burden to put the burden of their their mismanagement of their growth on the on the rural counties of western North Carolina. That's just and we all support that. I know I'm speaking with the rest of us. We all support the fact that, you know, we're going we're going to fight this to the, you know, tooth and nail. So, I can assure the citizens of this county that you've got um all the commissioners in this that's sitting here today are fully involved and highly involved and know what's going on and we're engaged in it and we're not going to let this happen if we have anything if it has anything to do with us. We're not going to let it happen.

Thank you for that support. I got a quick Well, I was just going to say my rough math on that 23 million gallons a day they're losing. Yes. Yes, that's right. At 19%. Yeah, that's 23 million gallons a day. That's right. That's a lot of water. That's more water than any of our utilities, the city of Hickory, City of Lenor, it's more water than they produce for their entire system. So, they lose more water each day than any of our utility systems make. And I'm I'm pretty confident that the state is um I mean, they're heavily involved in this, too. So, they're they're aware of what's going on. And I don't think um you know, the I don't I don't feel like that um this has just been ignored by anybody. So

what kind of people sit on this IBT committee? I mean is this legislators? Is this just water people? So the environmental management commission is a state commission appointed by state leaders and um I believe the governor and legislative leaders have opportunities to appoint different members on the what's called the EMC and then they have subcommittees on the EMC that deal with different topics. But it's a stateappointed agency like a lot of our state boards and committees. And to Jeff, to your point, we are very fortunate, very blessed to have a local Cwell County citizen who is an engineer who is sitting on that board. Yes,

Anthony. I want to say thank you for your presentation. This is not the only time you've you've come and and and shared this information. And I'm thankful also that I sit on the uh uh COG board and um been involved in the IBT. Um I want to say thank you to our legislators all up and down the Kataba River Basin because I I believe every legislator, be it House Rep or senator, are directly involved and and they helped with this House Bill 850. So I'm I'm thankful for for all of that. Again, we've been against the IBT for since the inception, but I want to share a little tidbit of history that maybe someone doesn't know, but back before 2007, this county had the forethought to go purchase land up in Happy Valley.

Good point. That had millions of gallons in an aquafer and we were just about to pay it off and I believe I was in It was paid off. It was p. Yeah. I I believe was I the only member on the board at that time when it was sold. You were. And I I I may have been the only no vote to not to sell that land for pennies on the dollar.

Now, there may have been some debate uh whether how we could get that water out of Happy Valley into Leno or Granite Falls, but you know what? If you're in a drought situation, you don't have any water, who cares? Because what is the thing that we all have to have is water. So this county and this this is commission boards way before my time or anybody else's time had the forethought to buy hundreds of acres that had aquafers there and were plans to build a reservoir and then it was sold that that commission board and I was on it but I voted I was the only no vote not to sell that because I thought that um yeah it's going to come back. could someday come back because it's not about me. It's not about my children, but it's about our grandchildren and because it's 50, 40, 50 years down the road. And I would have loved to have had 300, 400 acres up in the Happy Valley community full of pristine water. What we did with it, we'll figure that out. But now you don't have it. And now we're in a situation like this fighting like the Dickens to to keep Charlotte out of our water. And so, but thank you so much for everything that you do. You you have done and continue to do. We've got attorneys on our side. We've got counsel on our side that are top-notch. They they deal with these IBTs. So, we've got a we've got a really strong team that are supporting all the counties up and down the chain. And again, all the counties are participating. It's costing us money and it will cost Cwell County money, but that's penny again, pennies on the dollar what that means to to fight something like this and we will continue to fight. Um, yeah, as long as it takes, we won't stop. But thank you.

To follow that up, Mike, I had a conversation with Joe Dah yesterday and that that still could be on the table up there to buy it to buy it back. I don't He talked about he still had all the plans and stuff and Yeah, I talked to Anthony about it earlier. So, it's Well, when we sold it, we lost money. We sold it. We sold it for less than we paid for it. Yeah. Because the previous commissioner, the comment was made that they didn't think we needed it. So, and now guess what? We need it. When people go to the faucet to turn on the water, all they care about is the water coming out, you know? So, yeah. Can't make it without water. No. All right. Well, thank you. Thank you again, Anthony.

Thank you, Anthony. Appreciate it. Great job. Our next item is tax leans on real property. Mr. Josh Angel is with us this evening. Welcome, Josh.

Good evening, Chairman, Commissioner. In accordance with North Carolina General Statute 105369, I'm reporting the number of accounts and dollar amounts of unpaid taxes for the 2025 tax year that are leans on real property. The following numbers have been revised as of today and this report is considerably improved from the original memorandum you received. The total number of outstanding accounts for 2025 is $6,936. The sum of these accounts is 3,271,525.82. An alphabetical listing of these accounts is available in the county tax office. I am coming before the board to report this information and to request the authority to advertise the 2025 property tax leans.

All right. Is there any questions of Josh? If there's not, I'll make a motion for the tax administrator to advertise the tax leans for 2025. So, is there any other comment about that? All in favor say I. I. Any opposed? And that motion carries. So, thank you Josh. And appreciate all your hard work, too. Thank you.

Yes, sir. And next is our presentation this evening with Martin Stars. I think Santa uh are here, but our presentation of the audit for the fiscal year 2425 and our county manager, Mr. Shane Fox, is leading that up. Well, I will lead it by introducing [laughter] our auditor here and be glad to answer any questions. Our director, Tony Hilton's in attendance as well for any follow-up questions that I'm sure that you'll have after she finishes her presentation. All right.

Good evening, chairman and commissioners. Thank you for allowing Martin Stars and Associates to continue as your auditor. We value our relationship and look forward to working with you in many years to come. We have issued a clean onmodify opinion for fiscal 2025 audit. Uh an on an on modify opinion is issued when an auditor can state with without reservation that the financial statements are fairly presented in all material respects in conformity with the gap. We appreciate Tony and the county staff for being prepared and pleasant to work with. There were no material weaknesses, no significant deficiency. Here is an overview of the general fund budget to actual revenues were over budget by 923,000 mainly in sales and services. expenditures were under budget by 9.5 million mainly in general government, public safety and human services. um other for other financing sources and uses. The budget includes 8.5 million of appropriated fund balance and the actual includes transfers from other funds of 671,000 lease liabilities issued of two excuse me 828,000 and long-term debt issued of 1.7 million offset by transfer out of 21,000. And this is your general fund revenues. The total revenue is 98.6 million in

2025. Avalar taxes is approximately 57% of the total revenue. Restricted restricted intergovernmental includes federal and state grants which is 16% of the total revenue and local option sales tax is 12% of the total revenue and the remainder revenues is 16% and this consists of other taxes l and licenses on restricted intergovernmental revenue permits and fees and sales and services um investment earnings and miscellaneous. Here is an overview of the expenditures for general fund. The total expenditure is 100 million in 2025. Public safety is made up of 30% of the total expenditure. Human services includes DSS and health is approximately 23% of the total expenditure. Education is approximately 19% of the total expenditure and the other expenditures is the remaining 28% and this includes general government um environmental protection, economic and physical development, cultural and recreational and debt service. Here is a comparison of the county's tax collection and percentage for the last three years. The current year change is comparable to prior year. The fund balance for general fund is consisting of the followings. For restricted, the majority is state

statute of 6.7 million. Um non-spendable is only consists of inventory. Assigned is for subsequent years expenditures or appropriated fund balance for the next year. The remainder is on assigned. The available fund balance is [sighs and gasps] the fund or money the county has left at year end for a future expenses or emergencies. This is the calculation utilized as the basis for comparing you to other units. In 2025, available fund balance and percentage increased by 1.7%. The LGC uh minimum threshold or excuse me, the LGC minimum fund balance available percentage is 20%. So you are above that. The water funds operating performance is showing revenues, expenses, and resulting operating income or loss along with cash generated from operations. This also highlights capital project spending to show how operating results translate into investment in system infrastructure. here. Um, cash from operations includes cash received from customers, cash paid for goods and services, and cash paid for or on behalf of employees. This is a quick comparison of the quake ratio for water for the water fund. The LGC is concerned with a quick ratio less

than one. Um in this case you are above that. Uh current assets excludes restricted cash prepaids and inventory. Current liabilities excludes compensated absences and liabilities payable from restricted assets. Here are some general performance indicators. Your report was submitted and approved by the LGC within the required time frame. There was a stable property tax valuation and collection percentage. Water net income excluding depreciation and debt service principle is about 655,000. Um the LGC is concerned with a negative net income. Um, water unrestricted cash as a percentage of expenses is 175,000, excuse me, 175.82%. The LGC is concerned with a percentage less than 16%. Um, and lastly, um, the county's water capital assets condition ratio is 23%, uh, which is below the LGC threshold of 50%. uh you'll see or you should see this ratio increase once the water tank project has completed and in service. Um the county will need to write or provide a written response with corrective action to the LGC within 60 days of the audit presentation for the 23% uh capital assets condition ratio for this year. All right. And once again, it has been a great

pleasure working with Tony and the county staff this year. Um, this concludes my presentation. Are there any questions? Anybody have any questions from [clears throat] Miss Wilson? Just a clarification, you did say that once that water tank is installed and operating that that that will come back into in the perfect line. Okay. Yeah. So you'll see that percentage increase from 23% to um however much but we won't know that for sure yet. So yeah, go ahead. And if I can um add that that um is scheduled for disinfection this week, if not next week because of the weather and then once that's completed the tank will be filled and that will be online as well. So within the next one to two weeks, we'll have that tank online.

And just for folks to know to clarify, this is the water tank in Collinsville. That's correct. uh that was recently constructed and we have a final cost on what that tank is. Anybody I think Tony might be able to. It's over 4 million. I knew it was going to be over $4 million. Yeah. So now put up a water tank. He has a lot.

But that's great for the Collinsville community. It is very good. It's going to it should solve that problem they've had out there for years. Um, one I guess one of my questions is and I I've still I don't know that I truly understand it because years ago it was 8% that the LGC recommended then it went to 20%. I think we had some discussions last year regarding that and then and it's always been my understanding that it's a state regulated thing. the state says, "Well, you got to have this." Right? But then I understand that it's really not statemandated that it's just a recommendation, right? So, can you clarify that a little bit because it's we seem to be getting some miscommunication all over everywhere. And you're referring to the the

the fund balance. The fund balance. Oh, okay. Undesated. Undes. Yeah. Yeah. Um Yes. [clears throat] I mean, like what you said again, it was just um a recommendation from the LGC. it's not really something that um is required. Um maybe Shane or Tony can chime in on that as well.

Certainly. Yeah. So years ago 8% was the magic number. That's one month's worth of reserves. And then sort of after that a period of time um some suggestions were made at the state level of of putting entities within a peer group. So we're within a peer group typically by population and by budget. and from that peer group, whatever their available fund balance is, the average, you know, the median, etc. is what they refer to now. So, they just don't want to see a county getting too far outside of what their peer groups percentage is. So, available fund balance, you were mentioned earlier, I think, is around 20% for our peer group. So, we're we're right there at 21%. But, um, it's a it's a kind of a a moving average is what it is within the peer group, but that's subject to change each year. Yeah. Depending on how our other counties do within our peer group. But but again that's just a recommendation. It's not it's not statemandated or any kind of general statute type thing because we've always been

now correct me if I'm wrong but we've always understood that it was a you know kind of a a hard line a hard line in that number that you couldn't go below that and and it wouldn't be healthy anyway. I mean I could see maybe where somebody would take would make that a mandate because you don't want to go below that. I mean, you want to have additional funds and reserves to to handle things that we've also been told that if we didn't maintain that, it affected our borrowing power and bond issuance and all kind of things goes along with that. How does that play into that?

And to an extent that is true. So, um, if we were to be bond rated, part of that rating is looking at our peer groups to see where we stack up. Again, as long as we're not too far from the average of what that's looking like, it's not going to be a negative thing to us. But that is a part of of of the overall bond rating process. I've been through that process and they do look at how we stack up not only from a fund balance perspective, but looking overall at the balance sheet, how we are from a budgeting perspective. There's a number of different factors they look at within that, but but again, it's it's more recommendations and it's more making sure that we're within a com comfort zone of what our peers are. And again, our peers this year are more in that 20% range, which is where we are, 28%. [clears throat] Well, I would, you know, make a suggestion that as we go into budget season, which is right around the corner again, is that when we have our budget sessions, we had, I believe, six of them last time open to the public and I think one citizen came uh to to the six of them. So, um uh hopefully more citizens will come because we went line by line on on everything. But maybe this board can get u a range of of uh fund balance where we feel comfortable and you know whether it's 21 or it's 18 or it's 18 and a half or whatever that number is and I think we need to maybe decide that within ourselves and as we're as we're moving forward with the budget as we're moving forward with capital capital taking care of our employees improving our infrastructure those things. So, I I think that would be a helpful uh and and and uh Shane, I think that would be great with your experience in financial and and Tony yours too that we can come together and and get a consensus on what that number should be. Um and hopefully uh my my hope would be provide some tax relief for people next year as we kind of figure figure all that out because it looks like our numbers are doing well

again this year. And so, um, it's okay. You know, we'll we'll we'll address it this coming. Uh, but, you know, I encourage, uh, all citizens when when all when those, um, uh, meetings are posted, please come. I mean, again, we had one citizen total of all six planning sessions that we had and she was a great lady. She asked some questions and stuff like that, but we had all department heads in here and we went line by line, did we not, gentlemen? Yeah.

We went line by line and one citizen came. So, it's not that we're not trying. Uh, but thank you so much for everything that you have done. You've done a great job and uh it's good to have a um no no findings. This county is always has been a clean audit. Yep. And that's that's important because I know of a lot of counties in the state that don't have clean audits. And uh and that's a tribute to Tony and his staff and everybody working hard and making sure the tees are dotted and the eyes are crossed. Eyes are dotted. Tees are crossed. Something like that.

Something like that. But you know when we're not going to agree all the time on finances and that's okay, you know, but I I just don't want to be in an that county that has problems with an auditor because no, that's not that's not good. But thank you so much. It does seem like a few years ago we got fussed at pretty hard, didn't we, Tony, for at the not having that 20% when it just sort of throwed they throwed it on us last. Yeah, they when we borrowed the money for the animal shelter, they were brought that up and and the state auditor at the time voted against letting us borrow that money because we were a little bit below. Does your audit cover our debt service? Does it go through that? Yep.

It's pretty low, isn't it? compared to other counties. Compared to other counties. Yes. Yeah. Yep. I mean, that's that's pretty strong. I mean, we could actually pay off all our debt from our fund balance if we wanted to, but I mean that that's that's a good use of taxpayer money to be low in debt and that that's a good thing.

And I think too to your to your point, Mike, I think um a lot of times people get confused about debt and and I'll county manager can share more on this. Debt's not a bad thing. Now, too much debt is a bad thing, but just having some debt is not a bad thing, you know. Well, and the debt we do have, what one and a half percent, one and a quarter percent. And that's, you know, Tony went back and and refinanced a lot of those debts for us. And u I mean, you're not going to find you probably never see that again. And so why, you know, why would you want to pay it off really? Because that's um you know, we're making more money now on our interest income. So that debt that debt interest is really not costing us anything. So you know, awesome. Yeah. Great.

Go ahead. you want to say something to to the point I we Tony had prepared a um series of things here of different potential metrics that could be asked tonight of comparisons and and debt was one of those um at 26 million is where we are in total debt and our debt annual debt expense is much less than that but total debt at 26 million within our peer group puts us second lowest. Wow. Um so Wilson County is a little bit lower than us but you have some as as as high as 211 million which is Chattam County. So you can see the different growth methods and stuff there of course but everything from 19 million to 211 includes school debt includ and college debt college various things that it's not just county debt correct with us.

Good point Mr. Chair and more of that debt will be rolling off in a couple of years. Yeah. So in great financial shape. Yeah. Thank you Shane. Thank you. Thank you so much. All right. Thank you. All right. Uh that brings us then to our consent agenda this evening, Mr. County Manager.

Yes, sir. Thank you, Chair. We have a number of good things here within the consent agenda. We'll start with [clears throat] a few grants. The first two are both cyber security grants. Grant number one is for $200,000. Um again, these grants do not require any local match. of these are 100% state funded grants with no local match required, no tax money locally going to it. First one's $200,000 going to be utilized by our IT department to put together a secondary environment to back up our current cloud. So we have the county that's ran in a cloud. This will provide us the ability to have a secondary cloud for redundancy purposes. The second um grant is another cyber security grant. $128,000 total for that. Again, no tax um local tax money going to match. This is state money 100%. That's going to be utilized for some critical needs and redundancy with backup servers again. So one grant, the first one is for the cloud, the second one is for the actual um material itself, the servers, the the actual asset. Both of those again through the state of North Carolina. The third grant, again, um not utilizing any local taxpayer money um for this grant. No match required, $60,000 um for uh the use of uh purchasing equipment for Wilson's Creek. This is through the Forest Service. Our fourth budget revision is not a grant, but it is um based on general statute 9-1, which is titled the jury commission in each county, and the membership of those jury commissions must be paid a sum of $250 per year. There's a total of three of those individuals that serve um the county, the Cwell County. So, a total of $750 is being requested by you all to be approved by our clerk of court, Angela Kidd, for this year. Again, the reason that's coming to you is not the dollar amount, but the general statute does require you to vote on that tonight. Um, number eight, um, is or number nine on consent agenda is the purchase of web

accessibility software. This is the approval of the contract, the amount, and the total that is presented in front of you. Um, the $9,86.60 was put into the budget and was already approved by you all. It's just approval [clears throat] of the contract is what is required tonight. Um, number 10, the conveyance of surplus vehicle by private sale. The sheriff's department is looking to sell a 2018 Ford Explorer to Foothills Medical Transit Company for $4,000. This is a 2018 Ford Explorer that has been decommissioned. 153,994 miles for the sum of $4,000. Just for reference, the value per Kelly Blue Book does put that $4,000 right in the range of what that vehicle is worth. And so again, that's asking through general statute 168266 for the commission here to approve the sale of that vehicle for $4,000 um to the Foothills Medical Transit Company, which is a nonprofit. So it does allowed for that.

I wanted you to throw that in there. A nonprofit. Yes, sir. Yes, sir. [laughter] Number 11, the Soil and Water Conservation District is um needing approval for you all uh request to apply for the STRAP funding. Of course, that is our stream restoration money. Um this year [cough] the um Cowell County is in a high needs area which the potential cap of that grant is 1,496,250. Again, that is not a guarantee, but it your approval tonight does allow them to apply for those monies and go after the full amount of 1.4 million.

And we've been very blessed to get quite a few of those through the years. Absolutely. [clears throat] And um again, Cow County because of Hurricane Elen is um classified as a high needs or high demand area. So I think um the soil and water folks feel like there's a good possibility of getting the majority if not all of that money hopefully brought to CW County. Number 12, budget revisions, sheriff's department salary adjustment request for approval for 5% increase for departments 4310, 4311, 4315, 4316, 4317, 4318, and 4320. That'd be effective February the 1st and go through the end of the year and obviously pick up you moving forward. That's a total cost of $224,000 for the remaining five months um before you. And then item 13 is approval of the minutes from December 1st, 2025 board of commissioners meeting, which feels like it has been a long time since we've had that meeting.

Long time since we had that meeting. That's probably the longest stretch I've ever had between meetings. I almost make you forget it. Yes. [snorts] Mr. Chair, that concludes the consent agenda. All right. So, hearing the conclusion of the consent agenda, what's the pleasure of the board in adopting that this evening? Mr. Chair, I move that we accept this evening's consent agenda as the county manager has presented.

Any other comment or discussion? All in favor say I. I. Any opposed? And that motion carries. And that brings us to our final item this evening, which is we're going to enter into a closed session uh pursuant to North Carolina General Statute 143-318.11A4. And so I'll make that motion that we go into that closed session. Okay. Uh, Commissioner Storms. Uh, I want to thank all of y'all that's been involved in this storm. From the sheriff's department to the EMS to the fire departments, anybody that wires blue that's got us through this.

I understand everybody was safe. And I appreciate you taking care of the county and doing your jobs. And I It just means a lot because I think we all go to bed and forget. I think we think the world is shut off from us, but it's not. That's right. So, I just I appreciate that and we've got some more coming, I think, guys. And hang in there.

Very well stated and we do appreciate everyone that keeps us safe. All right. So, with that, the motion is to enter into a close session this evening. And I'll call the question. All in favor signify by saying I. I. Any opposed? And that motion carries. We don't expect any decisions out of that for anybody that uh would like to stay uh just to hear coming out of that closed session. So that way it'll cut you loose. But I do appreciate everyone being here this evening and those watching by YouTube, TV, and any other mode. So we're in close session.