Board of Commissioners - Special Meeting

I call this Derek County special commissioner meeting to to order today, May 11th, 2026, 8:30 a.m. Uh, let us stand for the pledge, please. 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.

Commissioner Balance u is not able to be with us this morning. She had a prior commitment and uh Commissioner Creef is uh delayed. He'll be here shortly. With that being said, county manage, I'll turn the meeting over to you.

Good morning. Um, two things on the agenda. One was with regard to the Bucks and Beach Nurseman, and the other is uh the audit contract for fiscal year June 30, 2026. Um, I'll talk about real brief about the Buckton Beach nourishment. Then Matt will take you through some details on some slides and then he'll talk to you about the audit contract as well. Um, in Boston. We you all approved at our two meetings ago, I think, allowed us to move forward with a 1.3 million cubic yard project or a 2 million cubic yard project if we got FEMA money. Um, where we are now is we've two things have happened. One is Matt has gotten uh the bids for our financing and our interest rate was a little bit lower. So, we've got some money from that.

I I was just curious, Matt, what were the bids that came in versus what was in our initial thought or plan? So, the volume is 4%. Yes, sir. So, the straight five year amortization is 3.41 41 and the the amount with the call is 3.62. Got it. Thank you.

Um so we have that um we have a little bit of money in the fund from the COVID spike and then on top of that we we've worked hard with FEMA through lots of sources to try to get the FEMA money and it looks like now we're close. Um and very optimistic that we would get the FEMA money. just don't know when. Um, with all that said, what we would like to do is move forward with a 2 million cubic yard project. We can do that in the model with or without the FEMA money. Um, and still keep our commitments to the towns and keep our commitments in the model to our other projects. um because of the again the interest savings and because of the uh excess money in the fund from the COVID spike. And so with all that said, he's going to take you through the the numbers, take you through the dynamics of that. But at the end, that that's what we want to do and it'll allow us to go ahead and tell Great Lakes now to do that while we've got them so that they won't say, "Hey, we don't have enough time on the back end or whatever to do it." we waited another month or something, then they may not have time uh to get that done. So anyway, that's where we are with that. Matt, I'll turn it over to you. Do you have others? Cool. All right. So, I'm going to this these slides are just going to support everything that Bobby just said. Um, and this is the agenda. So, as as it relates to beach nourishment, there's two asks. One, that you approve the larger sand volume and then that you authorize

Bobby, myself, and Bob to execute the related capital project ordinances once we finalize um the financing amounts. So in April you had approved a 375,000 cubic yard project volume for Avon and the plan to work north from the north to the south to give us time um to optimize the sand volume and work with FEMA. As Bobby said, we've made good progress with with FEMA. Our project is in congressional review, but has not yet been obligated. So the RFP for the private placement of the debt um as he just said gave produced better interest rates than we had in the model. So we have some capacity when we stressed the model to calculate and establish the reserve in April. We did that with a 1.9 million cubic yard project in Buckton and we proved that the fund could handle that in the next four project cycles. So basically through 2041 um without the FEMA funds. So the reduction in the interest rate will allow us to do the full permitted amount of 2 million cubic yards. The differential between the baseline and the 2 million cubic yards is roughly $7.8 million. We did consider, this is prior to the recent momentum with FEMA, the idea of just doing the baseline project and then coming back later within the permit and doing a second project. The downside of doing that is that you have to pay the mobilization twice. So in this project, the mobilization is $12 million. So all things being equal, that second project

would cost us 20. I'm going to go out on a limb and say that doesn't seem like a good idea. Am I It's my financial acumen coming through. Okay, you've got it. I'm quick that way.

So this is the details of the project. So in red you can see the incremental sand volume in Buckton to get us to 2 million. Um I highlighted the cost of issuance. We're still negotiating that and we've made some good progress with our attorneys. So I expect that to come down to be closer to 100,000 for this. Um but you can see our debt issuance is $55,95,000. So total project cost for Buckton is the $42,157,822. Avon is 7,733,124 and NAGS head with the cost of issuance allocation is 13,96,86. So project total is just under $63 million. This chart is just showing you the call option that we negotiated. So, we expect to get the FEMA funds and when we do, we want to be able to pay off the debt that we just borrowed. Um, so there is a slight premium in that interest rate. That's why you have the 3.62 instead of the 3.41. But in doing that, we will save 1.825 million in interest when if we get the FEMA funds. If we don't get the FEMA funds, it will will have cost us around $170,000 for that option. So,

just forgetting the amount that we're looking for from FEMA. Do you recall? Yeah, it's going to be it's going to be calculated based on the project, but it's roughly $30 million.

Roughly 30. Okay. Thank you, ma'am. So, and you can see that you know in 2028 our debt service payment with the call is 37 million. So, you could think of it as this project cost us the 12 plus the 37 minus 30 for FEMA minus the Nags head piece. So, um it's a it's a substantial amount of the the Buckton project. So, this is a summary of the anticipated capital project ordinances. So, we're not going to have you vote the actual ordinance because we're going to finalize the numbers, but this is just a reminder that you have voted in the past a capital project ordinance already for the Buckton and Avon project and that was so that they could initiate all of the engineering and design. I think that happened in 24. And then in April, we amended the Buckton project ordinance to allow for debris removal this $2 million. So, so all things being equal, we'll expect that we'll have a Buckton capital project ordinance amendment for this 38.566822 million. an amendment for Avon for the 6.536124 and NAGS head will be the initial capital project ordinance and the amount of the total project so that is the summary. Um

one quick time. Yeah, for sure. Uh the total from two slides earlier was 62 million. Call it 63 million. We're within rounding change, right? Yep. So the three projects that I'm looking at appear to total 38 12 39 45 48 58 million. Yeah. And that's because you've already approved the the 1.6 and the 1.2 2 and then another 2 million for the debris. So in that 62 million is the cse design fees and then the debris removal $2 million budget. So So those are already approved. I remember we did that.

Yep. These are the new approvals which will total the 63 million for the entirety of the project. Exactly. Okay.

All right. Right. So, if there's no other questions, we're going to ask you to approve the sand volume and then to authorize us to execute those capital project ordinances. Anyone have any additional questions on that? I'll make a motion to approve. Okay. There's a motion then on the floor um by the vice chair to approve. It's been seconded by Commissioner uh Baitman and Burus. any further discussion.

I just think this is outstanding that we were able to to do this um because Buckston definitely needs it and uh I can definitely uh in my opinion relate this back to the fine uh financial calculations of staff and having this done. Um, I would say, you know, because of the way we've been conservative in our budgets leads to this particular instance and I'm glad we we were able to do this for Buckston. So, anyone else? Okay. All those in favor signify by saying I. I post like sign. Motion carries unanimous.

Thank you. Quick question on timing, Bobby. Do we know now that we've got the bids in and we've placed Do we have any idea what the timing might be on the commencement in Avon and working south? Um, they're mobilizing in Avon as we speak. They're supposed to start that before the end of the month and they think that by I think the second week of June that they'll be starting in Buckton. Oh, it's great. End end of this month. Thank you. The bids on the groin are due in this month. We're going to try to have before the June board for approval. So, so we'll have bids on the buck on the groin project. Still don't have the permit, but we're like any day. We're thinking that's coming. So, okay.

Bobby, so one cannot hold the other one up. They're done independent on that. For that reason, they're going to build the groin first, right, Bobby? Uh, simultaneous. Simultaneous. Mhm. Okay. just want to make sure that groin's there when we pump that sand because that's what supposed to hold it. But well, there was some question whether we'd even get to build it. So, we didn't want to run them. No, I got you on a different schedule. Couldn't miss the window for the nourishment. So, plus I would think it'd be a little bit cheaper to to build the groin after the sand is there. So, they're not

Well, they're going to build the groin by in place. they'll they'll build some and creep out on the groin and do it. So, they don't have to have the beach there to do it. Um, but we we want it there as quick as we can get it to hold that sand in place. Oh, yeah. All right. Does that bring us back to the audit contract? It does. But you need

So, we need approval and this is you've done this every year. This is just authorizing you um to sign both the contract and the engagement letter and um for Rob to sign um the contract and the contract is a North Carolina process with the LGC. So we have to show them that we have contracted with an auditor and that our board is aware um and has been part of that decision. So we had negotiated a fee with our auditor for four years. This is the fourth year of that. So right

any questions to that? Yes, this is something we have to do by state statute. So yeah, we're going to do it. I just curious on a coralary. Are the are there smaller local entities? I remember a year or two ago they were having grave difficulty finding anyone who would audit them. They couldn't find any auditors. That's a problem statewide. And in fact, it's such a problem that I believe the LGC on some of the small communities relaxed the rules. There's something short of a full audit. I forget what it's called.

A review. Yeah. a and allow them to do that because there's the audit comp the the accounting firms don't want to do these fullfledged audit especially the smaller ones we bid it and we this is our best bit so and I think I'm pretty happy with Dan and and the firm I know they've merged and got a fiveletter initial whatever name now but I like Potter company. It was easy. I could remember. They've done a good job for a number of years. They really have. I' I've been impressed with them. So, I have no objections from the audit committee.

Do we have a motion to approve? Okay. There's a motion on by V uh Commissioner Baitman. Is there a second? Second by vice chair. Floor is open for further discussion. Hearing none. Those in favor signify by saying I post like sign. Motion carries unanimous. Thank you. That's all we have. Mr. Chairman. Okay. Need a motion to adjourn until June the what? 9th. So moved. Okay. Motion on the floor by the vice chair. Seconded by second. Commissioner Bur. Those in favor of the motion signify by saying I post like sign. Motion carries unanimous.