City Council - Regular Meeting

Okay, welcome to Canapapolis City Council meeting tonight for April the 13th, 2026. Uh we have a call to order here and we're going to ask uh Mr. Daryl Jackson to please lead us in the pledge. All stand on our flag. I aliance 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.

Okay. Council, we have an an agenda in front of us. What is your pleasure? Move for approval. Mayor. Thank you, Mr. Jackson. Second, Miss Dixon with the second. All in order, if you will, please all in favor, please raise your hands. Okay, that's unanimous. U speakers from the floor, Miss Scaggs.

Yes, sir. Thank you. So, as a reminder, if you'd like to address city council, there are cards located outside of these doors. I need you to fill out these cards. You'll have four minutes to speak, and you'll see the lights um on the podium and in front of you. They'll light up yellow when you're nearing the end of your speaking time. The first person I have to speak is Lahi Forny. Good evening, mayor and city council. My name is Lahi Forny. Do you still need addresses?

Still need my address. Say your address. Yes, please. Thank you.

1668 Barbara Circle, Canapapolis. Um, I just wanted to rise to speak on the park that was planned for the east side of the city. I'm on the east side of the city as well as a lot of other people. I think it would be well served um to follow up with that park. Um, and also, um, on that side of town, I live off Little Texas Road, and I would like to know, uh, what is the progress on the sidewalks there. Thank you.

Thank you. Next card I have is for Sophia Wilkerson.

Good evening, Mr. Mayor and members of the council. My name is Sophia Wilkerson. I reside at 314 Esther Circle, Canapapolis, which is in the Little Texas community. And that's why I stand before you tonight. First of all, I want to thank you all for such a wonderful job you're doing. But as you discuss your 2627 budgets and in particular funding, funding for the east side park on Mid Lake Road and the Little Texas sidewalk and transportation services that might be affected or cut. We really need all of these services in our community because there's nothing over there. They want they always talk about a healthy canoplas and walking and I see all of these pictures but I never see anybody walking on the east side. Everything is over here. That's because we have nowhere to walk that's safe. So, if you would consider and discuss this in your budget, in particular, those three things, the East Side Park, Little Texas sidewalk, and transportation services, and keep the members of our community a breast as to what's going on cuz I have numerous, maybe dozens of people to call me to ask me what is going on with the sidewalk because we don't see anything. And I know we get a water bill or a utility bill every month. If you could just give us some updates in that paper as to what's going on because people are really getting disenchanted with the city because it's beautiful over here, it's beautiful over there, but like exercising and getting out for a healthier lifestyle, we don't have that privilege right now over there. So as

you look at your budget for 2627 and thereafter, please please in particular look at the funding for our park, our sidewalks and our transportation services. Thank you. Thank you.

Next card I have is Daryl Hinnett. Good evening, Daryl Hinnett, 1106 Sunset Drive, Canapapolis, North Carolina. Thank you for your time. Proverbs 31:8-9 commands believers to act as advocates for the vulnerable. Stating, "Speak up for those who can't speak for themselves, for the rights of all the destitute. Speak up and judge fairly. Defend the rights of the poor and the needy." I'm here tonight to speak up for the riders of CK Transit. In 2024, they paid 415,000 trips. In 2025, they paid 399,000 trips. To minimize the need for a bus system, some voices have suggested that that doesn't mean 400,000 people. It really doesn't. But it surely does mean hundreds of thousands of poor and needy people. In Canapapolis, why do you ride a bus? because there's no other choice. They cannot afford a car or transportation otherwise. They use transit to get to work, to go to school, to get groceries, and to get to go to healthc care appointments. Why would this council act to make their lives more desperate? Some of you have professed to want to help the homeless. The effort to kill transit in Canapapolis will create many more homeless people. For every adult who rides the bus, there is one to three children in that family. Why negatively impact those kids? Look at the wrership of CK writer. Approximately 90% of them are African-Americans or Hispanics. Racism is defined as attitudes, behaviors, or policies that foster unfair treatment or systemic disadvantage for specific ethnic groups. Toward the end of each council meeting, at least one of you regularly mentions

how transparent you want to be with the citizens. Your le your mayor sent a letter to the mayor of Concord about six weeks ago telling Concord how Canapapolis Council had decided not to support CK Ryder in the future. This was decided in close session without any discussions with the citizens of Canapapolis. You didn't review all the options. You knew and your manager knew that on demand transportation would require a significant investment in additional funds, but that is inconsistent with your goals to cut cut cut taxes. You should be honest with the citizens. You have been told that there's no way to cut taxes without a meat access a meatax approach to programs. You believe that nobody cares about the riders of transit and you believe that you'll get very little push back. So you're not So you are cutting them recklessly. This is about bad choices. You committed to moving $2 million to modify the Wells Fargo building to a welcome center and a history museum. That $2 million could pay for transit and to build that east side park that was just mentioned. It is ridiculous to consu to con to choose to send $500,000 back to the state that you received as a grant for that part. Lastly, we know what is really about this commitment is to a failed policy of Cabaris County has been adopting for years. Party bosses believe that cut cut taxes is a solution for everything. Now the county finds itself in a deficit for the next year's budget and budgets to come. So in addition, they have strangled school systems. So that school systems estimate now that $1 billion is needed for schools. Canapolis citizens suffer when most schools in the northwest part of the county have attendance caps and can't get schools built in our area.

This council chooses to follow the same failed policy. Canapapolis citizens, I'm speaking to you. I'm speaking to you directly. Stand up and don't let this council intentionally fail. Follow a failed policy that was dictated to them by a party boss. Call your friends. Call your neighbors and let them know the bad choices this council is making. Thank you. Thank you. Last card I have is Phil Goodman.

Phil Goodman, 105 Central Drive, Canapapolis. Got two different ways to go here tonight and I'm trying to decide how. Uh the first thing is I get calls almost weekly, multiple calls, not because I'm someone special, just because I know some folks in the town and they ask me about things and if I don't know the answer, I'll call someone sitting right up here and get the answer or you'll refer me to someone else. I can tell you as a response to that, unlike what others may think, I find that most of the people in Canapapolis are thrilled to death with the city council that we now have. They're seeing fast reaction to situations. They're seeing practical decisions. And I just wish that when people come to this microphone, instead of just giving their personal opinion, they would state facts of all the facts. Uh, for example, the $500,000, why was it given back? Uh, there was a reason for that and it was practical and it was good business sense to do it. I particularly believe that we're in much better shape now than we've been in the last 15 or 20 years. You folks are doing a phenomenal job. And when you're doing a good job, you're going to make people mad. You're going to make people angry. Everything is on uh video now. I mean, on uh YouTube now. I've had so many people say that it is wonderful that they can see the city council meeting without having to come up here. So, I would congratulate you. I think you're doing a phenomenal job. Everything is not perfect, but I do believe from my understanding, fire trucks, a fire tower, and other emergency equipment takes precedence over other things that have to be done. So, I appreciate all that you're doing, and I think I represent a large majority of the city. Thank you.

Thank you. That was the last card I had, Mayor. I think Mr. Spitzer is going to do it to us again. He It's got to be some kind of penalty or something for this.

No cookies for you.

Thank you. I really had not planned to uh speak tonight u but uh I feel compelled to. Um last meeting um I thanked you for the policy that you put in place in terms of the uh prayer at the beginning of the meetings. Um I thought it was wellcraftrafted. I thought it was ecumenical in its nature. I was saddened to see, in all due respect, I was saddened to see that in the invocation, the reference to Jesus leaves out a whole swath of this community who does not believe in Christianity per se. And I would look to the future as is the case in many of the boards that I sit on in many of the activities that I attend that the invocation is to God. That does leave out some but a much smaller number. Um I would like to see that done going forward so that all of the people uh in Canapapolis can join in the prayer comfortably. Thank you. Thank you, sir.

Mayor, I did get one more card and it is for K. Grant. Good evening, council and the city of Canapapolis. My name is K Grant. Address 816 China Grove Road, Canapapolis, North Carolina 28083. I'm coming up here um as a city resident with four children. I'm deeply passion passionate about the opportunity presented several years ago about the opportunity for a park on the east side of the city as well as the sidewalks and the cut of transportation. This initiative is the utmost important and a necessity as it will provide our families with res residing in the area with greater accessible to a park in close proximity. Currently for people that live on the east side of Canapapolis, we have to travel 2 and 1/2 to 3 and 1/2 miles to the closest park which is Veterans Park, Village Park, or Bakers Creek. That is something that I would look into when it comes to convenience, especially with the cost of living and the economy taking a a huge hike. Um, with the park being in close proximity for the families that live on the east side, this provides us with an opportunity to enjoy some of the luxuries that other residents on the other side of Canapapolis get to enjoy more frequently. Um people on the east side have to consider not only distance cost to get there but activities that take place. When those activities take place, it sometimes limits us on what we have access to. So we have events that take place that are wonderful, but what about

those who don't want to go to those events and don't want to be in those kind of crowds? What about our health and our well-being? um having the ability to go outside, enjoy, spend time with your family or just for instance our aging population having a place safely to go and enjoy themselves. That's important for our health and our mental health. I believe this opportunity presents a significant advantage for our new residents who are coming. We've grown in the matter of years. We're at about 60,000 residents. You have people coming here. You want things to attract them. So when you have families moving here, these are things that they consider. Grocery, gas, schools, parks, health, and other necessities that are very much important to them. If you take this opportunity away, what does it look like for us, especially when we really do need other things in this area that benefit the residents? We're the ones who pay the tax dollars. We're the ones who invest just as much as you all. This is important to us. These kids being able to be kids and be free and enjoy. That's something that probably all of you had the ability to do. But now it's getting dangerous. You can't play in the streets. People don't believe in stopping. People don't believe in being cautious of those areas. Having the parks, having sidewalks, that's important. It cuts back on accident. cuts back on someone getting hurt or someone not paying attention because you're separating the two. Please consider what it looks like to our future kids, your grandkids or those who may enjoy that opportunity and the luxury especially our aging population. Now speaking with 37 seconds, I'm a social worker. We have a lot of clients

on the east side of Canapapolis. A lot of them don't have transportation. A lot of them don't have access to Medicaid transportation. So, if you cut our transportation for them, what does that look like? Do you really care about our aging population who paved the way for us to get to where we are now? I need you all to take that those things and those ideas and my opinion in consideration as well as other residents. Thank you for your time. Thank you. That's it. I believe that's it. Yes, sir.

All right. We move ahead now to proclamations and recognitions. We've got three different proclamations tonight. And we're going to start with Miss Barry. Could Holly Morton come up and join me, please? And her co-workers. I only got two hands, but I want to thank all three of y'all. Hello. Thank you very much. Sure. Okay. It it should be on

testing. Okay. Okay. I I want to say um I'm very glad that I was asked to read this proclamation because last year I participated in the fire citizens fire academy with Canapapolis. And one of our nights we spent the whole night with or the afternoon with uh telecommunicators. And I always wondered what they did up there. I knew it had to be hectic, but I had no idea. They have two or three screens. The calls are coming in. You got people hectic and they keep their calm. Five. Okay. Five screens. Sorry. They keep but they're calm. They speak to everybody in the most professional manner. And it was just amazing to witness what really goes on. So, my level of respect has grown tremendously for what y'all do. Thank you.

Takes a lot of dedication and a whole lot of patience. So from the office of the city council, Canapapolis, North Carolina proclamation national public safety telecommunic telecommunicators week. Whereas public safety telecommunicators are the vital link between the public and emergency services serving as the first point of contact in times of crisis. Whereas these highly trained professionals answer emergency and non-emergency calls, dispatch law enforcement, fire and emergency medical service personnel, and provide critical in instructions that save lives and protect property. Whereas the public safety telecommunicators demonstrate extraordinary patience, skill, and dedication while working under the intense pressure and often handling life-threatening situations. Whereas their work requires specialized training, professionalism, and a commitment to public service that is essential to the safety and well-being of our community. And whereas the safety of our public officers, firefighters, emergency medical personnel, and the public depends significantly on the accuracy, judgment, and reliability of public safety telecommunicators. And whereas the safety of our public pol our police officers, firefighters, emergency medical personnel, and the public depends significantly on the accuracy, judgment, and reliability of public safety telecommunicators. Now therefore, the city of Canapapolis, North Carolina, does hereby proclaim the week of April 12th through the 18th, 2026 as National Public Safety Telecommunicators Week in Canapapolis, and encourage all residents to join in honoring these dedicated individuals for their service and commitment to protecting our community. And witness thereof, I, Mayor Doug M. Georgia Douglas Wilson

on behalf of Canapapolis City Council has caused the great seal of the city of Canapapolis to be affixed this 13th day of April 2026. Thank you very much. EVER DO let him come around. Yeah.

Thank you very much. Thank you. Thank you already. Thank you very much.

Miss Dixon has a the next one for us. Thank you. I'd like to have Joe Crapster and the um staff from Duke Energy to please come forward and stand with So, I believe all of us in the city of Canapapolis benefit from the services uh that Duke Energy provides. We go into our homes and we flip on the lights and and and there let there be light. And so, we're so grateful to you and and your staff for the service that you provide on a daily basis, 24 hours a day, uh 365 days a year. So from the office of city council, Canapapolis, North Carolina, this proclamation reads, "National line worker appreciation day. Whereas line workers play a critical role in maintaining and repairing the electrical infrastructure that powers our homes, businesses, schools, and hospitals. And whereas these highly skilled professionals work in challenging and often hazardous conditions, including severe weather, natural disasters, and emergency situations to ensure reliable delivery of electricity. And whereas line workers frequently put their own safety at risk to restore power and support their communities during times of greatest need. And whereas their work requires extensive training, technical expertise,

and a steadfast commitment to safety, prevision, and service. And whereas the contributions of a blind workers are essential to the economic vitality, public safety, and quality of life in our community. And whereas it is important to recognize and honor the dedication, courage, and professionalism of these individuals who often work behind the scenes without widespread recognition. Therefore, the city council of the city of Canapapolis, North Carolina does hereby proclaim April 18, 2026 as National Line Worker Appreciation Day in Canapapolis and encourages all residents to recognize and thank line workers for their invaluable service and commitment to keeping our community powered and connected. In witness thereof, Mayor Daryl, Mayor George Douglas Wilson, on behalf of Canapapolis City Council, has caused the great seal of the city of Canapapolis to be affixed this 13th day of April, 2026. Please join me in saluting. Thank you for everything.

Thank you.

Good seeing you. Yes, sir.

Now, Miss Hatchel. would Nina Glass join me up here. Hey buddy, Nina, I just want to thank you for bringing this to our attention because um I think it's something that many in our community struggle with and oftentimes it's a silent pain that a lot of people don't recognize. So, thank you for bringing the awareness to Canapapolis today. from the office of city council Canapapolis, North Carolina. Proclamation National Infertility Week. Whereas National Infertility Awareness Week is observed to raise awareness about infertility, a disease that affects millions of individuals and couples across the United States and around the world. And whereas infertility is a medical condition recognized by leading health organizations impacting people regardless of age, gender, race, so social and economic status or geographic location. And whereas individuals and families facing infertility often experience significant emotional, physical, and financial challenges and may encounter stigma or misunderstanding in their journeys. hand. Whereas increasing public awareness and understanding of infertility can help foster compassion, reduce stigma, and encourage those affected to seek appropriate medical care and support. And whereas advances in medical science and reproductive health have provided many pathways to parenthood, including assisted reproductive technologies while highlighting the ongoing need for the equitable access to care. And whereas it is important to recognize and support all individuals and families navigating infertility while promoting policies that improve access to diagnosis, treatment, and emotional support services. Now therefore, the city of the the city council of the city of

Canapapolis, North Carolina does hereby proclaim April 20th through the 26th, 2026 as National Infertility Awareness Week in Canapapolis and encourage all citizens to support those affected and help create a more compassionate and informed community. Thank you. Okay, council, we have a consent agenda now. What is your pleasure on this?

Motion to approve. Motion to approve. I'll second it. Second, Mr. Payne. All in favor, if you'll please raise your hand. It's unanimous. Okay, let's move on to the business agenda. Uh, Mr. Smith, I believe, has a report for us.

Good evening, mayor, members of council. Thank you for your time this evening. I got a few items for you, and I'll try to make them as expedient as smoothly as I possibly can. Uh, fortunately, none of these involve zoning issues that the pastor prayed for earlier, so you're okay on that. So, um, the first item we have on your agenda tonight is related to a honorary bridge designation. Uh, and first on the list there, I've got the checklist that we use for this. Uh, I think we circulated that to you last week, just so you kind of have an idea of what staff has to do to present these to DOT. We've done two previous bridge namings, uh, honorary namings, uh, Corine Cannon being one and Linda Johnson being the other. Uh, one has been approved by DOT, the other one's forthcoming with DOT's board. Uh, but we do have one before you tonight as well, requested by the family and community. Uh it's for the Lane Street Bridge at Interstate 85. And the request we have for you before you tonight is to adopt a resolution requesting the honorary designation of the Lane Street Bridge at Interstate 85 to the officer Roger Dell Carter Bridge. So with that, I'll be glad to answer any questions you have. Mayor, does anyone have a question? No questions. Okay. Um, at this moment, if the if the family would like to speak, I'm going to make an opportunity for you to come if you would like. It's up to you.

I spoke to Mr. Carter. He said he said enough in the letter, but if you want to hear anything from him, certainly let him know. It's up to the family.

Okay. Uh Roger Dell Carter was my baby brother. Um Bodgege. He was raised with my children because he was so much younger than me. My wife and I, we worked in cannon mills. I worked in went to work in 58 and worked in Canon Mills till it closed and we lived in Canapapolis but we couldn't get a bigger mill house so we had to to move so we bought a little place but our heart was always here in Canapapolis. I was in that Al Brown marching band and I was so proud of that. And Roger Dale, he like I said, he he was raised with my kids. He was he was more like he was more like my son than my brother. And on Christmas cards, he would say, "Thank you, Bodgege, for being a daddy and a brother." And then the bridge situation came up and I saw it was uh building a new bridge down there and I I mentioned it to uh Vicky Graham and she said well said uh there's some other other people interested in that and I said we don't want we don't want we don't want to mess with that then. So, it was suggested that the the bridge over Interstate 63 be named in in his recognition. And I'm just honored to be even here tonight to to speak speak to y'all. I

had no idea this was coming up till today. And we we would we would love we would love for him to receive this recognition if it's if it's desirable for the city council. And uh I guess that's about all I can say right now. I just I'm all for it and I hope hope you all will consider it and I thank you for even considering it. Thank you.

I'll make that motion. May I'll second it. Hatchel. Right. Okay.

Next item on your agenda, mayor, is a voluntary annexation request for 6304 and 6320 Moresville Road and 6165 Pagemont Road. Uh, this may look familiar to you because it was on your agenda back in February, but it got pulled because the previous property owner decided they didn't want to be a part of the annexation until the property actually sold. So, we now have the new property owners. Uh Phil Hamill and Scott Hamill have made the uh petition for that's before you tonight. It does involve three parcels. The acreage is approximately 109.166 acres. It's considered a non-ontiguous annexation. Uh it is located in our future growth area of the city and uh it is proposed for a golf course development. It' be a par three course. Very well designed. Uh we've already seen schematics for it and everything too. Um this kind of gives you an idea where it's at. Morel Road near Sty Road. The area that's more gray on the maps there is the existing city limits. Uh and of course this property across the street from the existing existing city limits in that particular area there very close by. This is a survey of the property had three parcels involved in the original annexation here. The request before you tonight is to hold a public hearing and then certainly u I'll be glad to answer any questions you have before or after the public hearing. Mayor, do

we have any questions from Mr. Smith before we go into this public hearing? Mr. Jackson, Richard, is um is there room for residential um growth out there around there? There is. And there's actually uh some subdivision lots that are proposed for this site. It will not have sewer. It'll have city water, but would not have city sewer out there. And approximately how many of those do you know? Um roughly between 15 and 20. Depends on the overall uh soil testing and such because it will be septic system out there. So, thank you sir. Yes, sir. Anyone else? Do we need a public hearing? Yes, sir. Yes sir.

All right. I'm going to open a public hearing. If you want to speak on this topic, please come. If not, we'll go forward. But this opportunity now is to speak. All right. I don't think anybody wants to speak, so I'm going to close it. Okay. Council. Uh, we need a motion to extend the corporate limits. Mr. Payne, Mr. Jackson. All right. Got it. Oh,

yeah. Okay. I think we're good. Yes. Well, everybody voted. I'm sorry. Okay. Now, I think this is uh going to be a kind of an involved presentation, Mr. Anderson. So, here we go. Well, thank you. Uh thank you, Mr. Mayor, members of council. Um I want to kind of give you a quick background before we introduce the consultants to talk through the water and wastewater master plan and CIP update. Several months ago, the city undertook updating our existing master plan and looking at that long range water and wastewater capacity needs and also looking at um upfitting and just general operations and maintenance rehabilitation on our our water and sewer system. What you're going to see today from um the water and wastewater consultants is going to be a condensed version of what was shared in the uh retreat just because that was several hours of glorious water and sewer stuff. Um so our water and our wastewater consultants are are right back here. Our wastewater consultant is Jonathan Williams. He's with Garver. And our water uh consultant is Adam Kiker with LKC Engineering. Also in the room is Will Dan and Davenport representing our financial and our rate side. They'll speak at the end after we kind of go through the the technical pieces of wastewater and water capacity. And with that, I will turn it over to Mr. Jonathan Williams to discuss wastewater. Good evening, mayor, council members. Thank you for having me this evening. Again, my name is Jonathan Williams and I am Garver's uh engineering's water and uh wastewater practice lead for the state of North Carolina. So, it's a

pleasure to be with you and we appreciate the opportunity to have the chance to work with your utility uh on helping plan for the next uh 20 years uh into the future of Canapapolis. So, I'm going to talk tonight a little bit about uh the CIP process and and the evaluation and how we came up with the CIP uh for your overall uh wastewater system and then my counterpart um Adam Kiker with LKC will share information on the water side for your utility. So, we'll dive right in. Um really the the the projections the basis of this plan is built around your move Canapapolis forward 2030 plan. Um and that's what we use to update wastewater flow projections. You'll see on the presentation here uh there was a previous master plan that the water and sewer authority of Cabaris County uh had developed um several years back that came up with projections uh through the year 2050 of wastewater flow uh and wastewater treatment needs that would be needed here for Canapapolis. Um and obviously as you know in that time uh things have changed. you've uh continued to grow and you've also adopted a new comprehensive plan. And so what we've done now is taken that previous work and then merged that with the future land use plan uh to project what the anticipated uh sewer capacity needs are going to be over the next uh 10 and 20 years. And so you'll see here basically we show growing from about 4.61 61 million gallons per day or MGD of projected wastewater flow um in the current uh environment to uh by the year 2030 uh needing uh 7.15 MGD and that's showing aggressive growth over the next several years. A lot of that can be attributed to uh the land use plan and development that you already have on the books. Uh development that is uh currently ongoing or development that may be weight listed for additional sewer capacity. I'll talk a bit more

about that uh in a moment. Um and then by the year 20 240, according to your uh move Canapapolis forward 2030 plan, um extrapolating that growth out, by 2040 we look at needing just over 9 mgd of uh sewer treatment capacity. And then finally almost 11 million gallons by 2050. I want to really focus though on the year 2030 because those are the near-term needs. Those are the kind of the immediate projects that are going to be needed by Canapapolis to meet that uh growing sewer demand. So the master plan looked at not only the collection system but also treatment needs. I want to talk uh specifically though about your uh collection system. So those are all the sewer pipes, the lift stations, everything like that that's collecting that sewer to ultimately transfer that to the water and sewer authority of Cabaris County. And so um basically what we did was we were able to identify and then prioritize those collection system uh capital improvement projects. We went through a four stage uh prioritization effort. Um basically with uh tier one priority projects being the most uh needed most um pressing projects and then tier four being uh the ones that were um maybe less of an immediate concern. And so from that we um also determined that by the year 2050 there uh Canapapolis could require up to 6.36 million gallons per day of additional treatment capacity. And so um what that really shows is in the near term by the year 2030 you're going to need about 2.5 uh million gallons more treatment capacity than you currently have. and then looking out into the future looking at needing 6.36 million gallons per day more than the current um current treatment capacity. And so while we've looked at the collection system, we've

come up with projects that are going to help address capacity needs as well as a recurring investment into rehabilitation of your existing sewer system because obviously those pipes in the ground aren't getting any younger. And so there has to be continual investment into th into the existing system to make sure it will last into the future as well. But on the other side of it too, we also have to look at what are those future treatment needs. And so we looked at three different scenarios that were considered to address the wastewater treatment capacity concerns. The first is uh a continued partnership with the water and sewer service or water and sewer authority of Cabaris County or WASAC at your Rocky River regional wastewater treatment uh expansion. Uh and so that looked at a phase expansion of the Canapapolis allocation from the Rocky River Regional Wastewater Treatment Plant. of course you have a portion of the treatment capacity at that plant. Um and that uh that also that expansion that would be coming up as you know you're going through an expansion right now that by the year 2027 you're going to get additional uh sewer capacity right at a million gallons per day of additional treatment capacity. You have just under a million gallons per day of remaining capacity from that plant. Um so you're looking at about 2 million gallons per day, 1.8 or so. and what you saw from the previous projection. So, there's still a little bit of a gap there. And that's what I want to talk about as well because this would be an additional expansion of 2 million gallons per day um at the Rocky River uh facility. And that 2 million gallon per day expansion though, you would only get a portion of that, your pr-rated portion of that. The other thing about that is that plant at that point with that next expansion that would come up has to have nutrient removal upgrades to it for the entire plant. And so the cost per gallon of investment in that is extraordinarily

high because of those nutrient removal upgrades that are going to have to happen for the overall plant. Okay, so keep that in mind. The next is to connect to Salsbury Rowan Utilities and divert a portion of wastewater flow back to SRU to be treated at Salsbury Rowan Utilities wastewater treatment plant. What that would be would be conversion of the Canapapolis Crossing wastewater lift station to pump flow uh back to SRU for treatment and that would include converting the lift station capital buyin to Salsbury rowing utilities for that portion of capacity that you need and then wholesale uh sewer treatment cost. I know Mr. Anderson shared with you at your workshop some of what those costs broke down to. And again, while it's very cheap to connect to SRU on the capital side, the cost for a wholesale agreement with them is still going to be fairly high, making these first two options costwise relatively similar, a relatively similar cost per gallon of wastewater treatment plant uh capacity. And then the final one is looking at a joint Canapapolis Landisowned wastewater treatment plant. And that would be a new green field wastewater treatment plant uh that would be jointly owned by both Canapapolis and Landis of approximately 1.6 million gallons per day with uh Canapapolis getting um 800,000 gallons per day or half of that capacity. Uh that would be contingent upon an approval of a new NPDES permit from NCDEQ. That's probably the biggest challenge. Um but not certainly not insurmountable. Um, but the key here is on a dollar per gallon basis is that cost is significantly less. It's about $2 more less per thousand gallons than the other two options. Okay. So, the key here though, I think, is that a combination uh phased approach is

recommended to combat Canapapolis sewer uh treatment capacity concerns. And so what that means is you're going to need more than just a uh one one solution. Uh you're really going to have to look at combining some of these solutions. And so as I mentioned earlier, you'll see the WASAC phase 4 expansion is ongoing in construction that will come online in 2027. That will get you additional capacity. You also have a right to purchase some of Charlotte Wat's capacity for sewer treatment at the Wasach plant uh which would allow you to uh to meet some of the additional sewer uh capacity concerns. So that comes online next year by 2028 you could conceivably have a connection to SRU but albeit at that higher cost. And then by 2020 30 or 2031, you could have a Landis Canapapolis wastewater treatment plant online and operable. That's that additional uh 800,000 gallons per day of capacity. Okay, so those really start to address the near-term concerns. The next expansions at WASAC though get considerably more expensive. And the reason why is because they're larger expansions. WASAC would propose to expand in 9 million gallon per day increments. And so you would be a pr-rated portion of about 28% of that capacity. So it would get you significant additional capacity. But because those uh expansion phases are so large, they represent significant capital costs going into the future. So all of that to say is there's a lot of investment that would need to happen to continue to provide sewer capacity for future growth that aligns with your um your comprehensive plan. Um, and so I think for the board, you know, the the options to consider are, do you continue to aggressively follow your comprehensive land use plan? Is there a throttling of that? Is there some combination of that that helps you get

to the ultimate goal of continuing to grow Canapapolis, but doing it at a uh at an affordable measure and one that you feel comfortable with. And so uh with that, I'm going to uh turn it over. I'll invite Alex back up, Mr. Anderson and appreciate your time and uh floor is yours. Thank you. Thank you. Um if if council has any questions for uh the wastewater consultant, we'd be happy to take them. And if not, we can move right on into water. Any questions? All right. Thank you. So again, uh this is Mr. Adam Ker with LKC Engineering. Thank you,

Mayor. If I could add, one of the things that uh I'd like to just bring uh to everyone's attention that certainly uh Jonathan pointed out uh is uh what you just heard and what you will hear are all based upon our land use plan. So uh and that and that's going to be the theme that you're going to hear this evening is based upon your current land use plan. So, I think that's an important part to understand and have some conversation relative to if you choose or want to make modifications. We we probably need to hear some of that this evening so we can plan appropriately um if there's if there's thoughts from council. So, I just wanted to point out that again. Okay.

Very good. Good evening, mayor, members of council. Thank you for the opportunity to be here. We enjoyed working on this project uh with with Alex and Gerald and your team and and thankful for the opportunity to to work together with John and his team. Uh our our I'm Adam with LKC. Uh we've been working with uh with with Wilmer and Alex for the better part of a decade on on water and sewer projects. Uh we were tasked with covering the water part of the master plan. And what similar to what John did, I'll give an overview. I recognize you've seen a lot of the details. uh really exciting details that that keep you up at night. Uh so we we're going to hit the high spots today and then answer any questions you have. Um so when we our our process for the water master plan, we kind of broke this down into four tranches. Uh and I'll talk briefly about each of the four. The first being what is your current water supply and what is the projected need and if there's a gap there uh how do we uh how do we tackle that? Similar to what John covered with your sewer. Uh the second is uh was a scrub of your the 2030 comp plan. Making sure that your water system has the components in it that are needed to support the type of land use that the comp plan recommends. Uh especially things like your activity centers at at certain intersections or certain hotspots of the city, making sure you had the appropriate uh infrastructure in place. The third was was known rehabilitation efforts. These are things in your system that are are you know you're going to have to address at some point and the cost is too large to really budget for. So what we do is we wrap those up into uh capital projects of certain sizes. We'll cover some of those. And then the last is uh there was interest I think among staff and and you as a council about evaluating the potential to extend service along roads or neighborhoods that don't currently have service that maybe they're in the city limits, maybe not, but they're kind of on the they're kind of inside your general service boundary

but don't have water service at the moment. So those are the four buckets. We'll talk about water supply first. Uh and that just a brief uh kind of background here. your current available supply, forgive me for the the tabs not lining up, uh is is calculated at 15 15.6 million gallons per day. You have four uh uh sources that you have capacity to allocated. The largest of which is your your water plant that you own and operate uh which is shown at the top there. Uh the other three are are different sources. Cotle Creek is coming from uh from the reservoir. Second creek actually comes from uh up near the Yadkin River and then of course you have access to a portion of the water purchased from the city of Albamarl. I will note that the biggest of of those four your water plant there is a little bit of uh greyness to that capacity. There have been some reports recently that we've reviewed with your team that that indicate that that 8.5 MGD really should be evaluated more closely to to make sure you feel comfortable uh with that number and if not make sure that you're adjusting accordingly. Uh now so a total available supply of 15.6 MGD. So what's our projected and your team's projected 30-year uh need is 16.1. So a small gap there, nothing of of any magnitude. And we'll talk briefly about how we get there. We looked at two alternatives. Uh both of these would add 2 million gallons per day uh each. So a total of four. One is uh connecting actually the pipes are already connected but entering into a a permanent relationship with the city of Salsbury uh to buy water from them. And then the the other alternative is uh to expand your relationship yours and Concord's relationship with the city of Albamarl uh to basically double that that current contract amount. Uh so sometimes graphically it's easier to see here. So

uh we we thought this was a helpful chart. The blue line represents the expected peak day demand of your growth of your system over a 35-year period. Uh the dark solid red line is your current supply of 15.6 and then we broke that. The dotted line is 90% of that. The excuse me, the dashed line is 90% of that. The dotted line is 80%. So you kind of get a feel for this is this is not a concern next year or the year after. Right? This is a little bit far out before this becomes a very real and practical operational issue. Uh you just recognize these water supply projects, they can take uh five to eight years to implement. So planning is important and you see the green line shows how your supply would change uh if you added two million a day from Salsbury and then added 2 million from Albamar and how that gets you uh uh to where you need to be within the planning horizon. The next project type we looked at uh how does how is your water system prepared to uh to provide for the type of land use that your 2030 plan predicts or or uh promotes. So it's it's a exercise on our side of looking at your current system compared to the type of coverage or the type of uh of service in certain areas and identifying any gaps. Uh our team and your team we have a hydraulic model computer model of your water system. So we we evaluate that and just look at where the deficiencies are and then we interface with your team on alternatives and what we think is the best way to get the level of service you need. And this is where we come up with ideas. not ideas, but alternatives like do we need new elevated storage in in what locations? Are the pipelines big enough? Do you not have pipelines in some areas where the 2030 plan recommends water service? That was part of it. And then are your pump stations large enough to convey the water that would be expected uh in those service zones. The uh the third kind of bucket of of

project types would be major rehabilitation projects. Again, these are not uh things like painting a water tank or replacing an electrical panel. These are significant multi-million dollar uh but we uh projects but we call them rehabilitation because they really don't have a capacity component to it. Uh these are mostly frankly at your water treatment plant. Uh and and things that you know that are upcoming that will need to be addressed. I think there were five or six capital projects in the in our list at the water plant itself. Uh the fourth bullet uh there replace 2-in water lines. That's an interesting one. You do have a significant amount of 2-in pipe in your system that doesn't meet the regulatory standards. And uh you're not alone in this. There are communities all across the state and these water lines were installed decades, perhaps even over a century ago. Uh so over some time frame there there's a recommendation and an investment to upgrade those pipes to meet uh current levels of service and then there is a water meter replacement. Several of your water meters uh have far exceeded their useful life and so an investment in that is included. The last uh bucket of projects that we looked at is serving these new neighborhoods. Again, these are uh roads and neighborhoods that are generally if you were to draw one big circle around your service area, these would generally be inside that circle. Uh some of these are in the city limits, some aren't u but so the there has been interest in in extending water service there. So, we had a list of uh of several projects. I think there were seven of them or six of them uh that had expressed interest and I think staff and council has expressed interest in. Uh, so those were were on our list of capital projects also. Uh, I believe that is it for me. Yes. So, uh, I'll turn it back over to Alex and if there are any questions, we're happy happy to answer. Thank you,

Mr. Mayor. Um, members of council, as Adam said, if if you have any questions on water, we'd be happy to take them now. And if not, we'll turn it over to Brian to start the financial portion of the presentation. Mr. Jackson, I have one question, Alex. On the um Albamar water line, is that a a physical upgrade it to upgrade the capacity?

Yes, sir. It's so the the plan would be to expand their water plant. So, the pipeline that we built several years ago is sized appropriately as well as the u the ground level storage tank. And there may be some minor pump improvements at the joint pump station, but the vast majority of the dollars that would be involved in in expanding that amount of water capacity would go directly to Albam Marl's Tucker Town facility just because it's we need to expand it 5 million or how we could go up to 5 million. So, thank you,

Councilman Jackson. I'd add to per our existing agreement uh once we reached 50% of our uh of the demand on that line then we were required to start this next phase and stage of uh improvements and that's and that's where we are right now is that we're currently utilizing half that initial capacity. If you remember we had 10 million gallons of water that were coming that we were able to pull from that location through that line. Well, we're at that 50% of that capacity now. So we need to begin the planning and expansion phases in accordance with our agreement with them. Would would that be a joint effort with Concord? Yes, sir. It would be. Okay. Thank you.

Yeah, Mr. I do have a question just about serving the new neighborhoods. I'm just trying to remember from our retreat. My understanding is if we did extend lines out there, they would not be forced to connect to Cass City water. Is that correct?

Yes, ma'am. So, the staff's intent or or kind of our goal, if you will, if there's uh any um desire for council to consider extending into those neighborhoods would be actually go talk to the neighborhoods, have community meetings maybe here at city hall, but also have them locally. And if there is a majority that want the water um service, then we would explore that. If the majority do not desire it, we wouldn't want to extend it and try to move into some sort of forced connection situation. Okay. Thank you, Miss Nixon.

U Alex, I I just want to thank you and the uh presenters for this remarkable information. Um I serve on the uh WASAC board and it has been just a tremendous learning curve for me and so having these presentations regarding the the uh financial aspect the the flow and the the PIS and the MGDs has really uh opened my eyes as to how to uh we need to vote and consider uh the information that's coming to us. So, thank you very very very much. I really appreciate that. Thank you.

Okay. All right. With that, I'll turn the presentation over to uh Mr. Roberts.

Good evening, everyone. I'd like to take this time to introduce Mitch Begrio with Davenport and Company. Just for a little bit of background, Davenport has been our financial adviser for several years. Mitch in particular has been a part of several of our debt issuances going back probably about 15 years or so. And this evening, Mitch's presentation will discuss the background and options available for the water and sewer fund. So, with that, I'd like to introduce Mitch. Well, good evening, Mr. Mayor, um, city council. Thank you for having us this evening. Um so you all just heard a lot about the potential needs uh capacity and capital needs of the water and sewer system. Um and you're going to hear a little bit of more about the financial planning associated with um potentially addressing some of those needs. um thought it would be helpful from a financial perspective to give you a sense of some of your options to finance these projects and in particular understanding that there may be a need to borrow um some funds to address these capital needs. um give you some perspective on what goes into borrowing um or financing water and sewer projects and what are some of the key things that lenders and others will take into consideration um when deciding whether or not they will lend those funds to you to fund these projects. So, um that's kind of the basis of my presentation and hopefully it'll give you a little bit of perspective for what you're going to hear from others this evening. So, um, starting out, um, page one of my presentation, very high level, um, on the credit ratings of water and sewer utility systems. And think about it this way, in our personal lives, if we want to buy a house or we want to buy a car,

um, we may need to go get a loan to do that. And when we go to do that, the bank is going to pull our credit score to determine whether we are creditw worthy to lend money to and at what interest rates they would be willing to lend us that money. A credit rating for a municipal government like yourselves is very similar, right? it. They're going to look at the city's finances, operations, and assign a score to the city that is a measure of their willingness to lend to the city relative to other cities and towns nationwide. Um, the city's general fund or general obligation issuer level rating is a double A2A um for Moody's and Standard andors. These are two of the most frequently used national rating agencies. That's a very good rating. You can see in the chart on the left, the gold is the city's issuer rating. That is two steps away from the highest rating of a AAA. So, general fund is in very good shape um in terms of accessing the markets if you choose to do so. In the light blue box is where the city's water and sewer revenue bonds were previously rated. The city does not have any publicly outstanding water and sewer revenue bonds. Right now, all of your water and sewer debt is with a bank loan or is through a state revolving loan. So, you do not have or need a bond rating for the water and sewer revenue bonds at this point. This is not an outstanding rating. However, the most recent ratings you had were from 2023 and those are highlighted in blue, the A1 A+. So that is if you're looking at that chart on the left, two steps below where the city's general fund or issuer rating is currently rated. Okay, so just

little bit of perspective starting out. Um the next page um page two kind of shows you how um Moody's investor service in particular rates um cities nationwide and in North Carolina. And I shouldn't say cities, I should say water and sewer systems because not all these water and sewer systems are cities. Some are county water and sewer systems. Some are standalone water and sewer systems like water and sewer authority of Cabaris County. So these are more broadly water and sewer systems. Um and you can see uh the distribution of these ratings on the left. Um again you all were most recently rated in that single A category. Um so looking at single A or higher you know nationally about a third of all water and sewer systems are in that single A category about 2/3 or higher rated. And on the right you get a sense of all of the rated North Carolina water and sewer systems. Um and at that single A rating you would have been on the lower end um of the rated water and sewer systems in North Carolina. The bulk are rated in the double A category. There's but that's you you can see there's only 26 listed there for Moody's. There's a lot of water and sewer systems like yourselves now that don't have publicly rated debt, don't have bond ratings outstanding. So, this is just a picture of those that are currently rated. What goes into that rating? Right? I think this is the important part to think about as you go forward for planning purposes. what are the key credit factors that these rating agencies or lenders will be looking at um when they think about their willingness to lend funds to fund

capital projects to your water and sewer utility. Um the left hand side outlines Moody's investor service rating methodology. These are the key things that they look at um when they first evaluate your rating. And I'll talk off of the green highlights. Um the first is system characteristics. This makes up 30% of the overall rating. So I'm on the top left here um of page three. System characteristics represents 30% of the overall rating. These are not things that you all as a council have direct control over as part of the current budget process. Right? These are broader metrics, you know, the the condition of your overall system, uh, wealth indicators of the service area, the overall size of your water and sewer utility. Certainly, there are things planning wise, um, economic development wise that you can do to try to grow the size of the system, increase um, salaries around the city. But there's nothing you can not one thing you can do to immediately change these metrics. So you can kind of see there the check boxes are more of a longer term control or I'd say longer term influence that you can have on these but nothing directly immediately. Um the remainder of these items you do have a little more control over um financial strength. So this is measured by your the liquidity, your cash reserves of the utility system, uh your debt service coverage. So essentially what this means, and we'll go into this in a little more shortly, but essentially you collect revenues from the water and sewer system, you pay your

operating expenses, and what's left over is available for debt service. and what you have available left over for debt service. Debt service is your principal and interest payments on your water and sewer debt. How many times can you pay that debt service from what's left over after paying expenses? This is a really important metric and you're going to hear more about that later this evening. Um those are kind of the key things financial strengthwise and you all do have control over that as part of the budget. It's part of setting your rates and charges, managing your expenses, deciding what capital you fund. All of those things influence these financial this financial strength category. And that is 40% of the overall rating, excuse me, management is 20% of your overall rating. Um, so rate management, that's willingness and ability to raise rates and set rates and charges where they need to be in order to meet these financial strength metrics and regulatory compliance and capital management. Are you addressing the capital needs of the system? Are you keeping it well-maintained? Addressing capacity, addressing regulatory requirements in recent years, I'm not the expert here. These guys are, but there's been a lot of regulations come out from the federal government on water and sewer utilities that increase capital requirements significantly. Are you staying on top of those? Are you funding them or are you deferring them such that you have a major expense coming up that isn't reflected in your current financial strength? So, that's another 20% of the overall rating. And then the final 10% is is a little more on the legal nature of things. When you issue water and sewer revenue bonds, you are contracting

with the borrow with the lenders to maintain certain things associated with the water and sewer system. And this 10% is tied to the levels that which you set in those contracts to borrow money. So really, you know, the focus is on financial strength and management as the 60% of the rating that you have direct immediate control over. Okay, feel free to stop me along the way if you have questions. I'm going to keep rolling because I know you got some more coming. Uh page four is just a look at your current water and sewer um debt profile. So the graphic in the top left is a look at your principal payments in the dark blue and your interest payments in the light blue. When you borrow money, you have to pay that money back plus an interest rate plus an interest expense. And overall, you can see um current fiscal year, it starts with current fiscal year 2026 on the far left. And you can see for the next two years, there's a little bit of an increase in those payments. That's as um the debt payments on the spillway, the most recent financing come online, you have to manage um your debt payments as they start to pay back. It peaks in fiscal year 28 and then it generally stays roughly flat there for the foreseeable future. So next couple years you do have a slight step up in your debt payments that will need to be addressed. Overall 60.6 6 million of debt outstanding. All of that's paid back within the next 20 years, 2046. Okay. Um page five, I mentioned uh the legal requirements associated with borrowing um for water and sewer credits. And I think this is really

important for you all to be aware of. I know it's a little bit in the weeds, but I'll go quickly. Just bear with me here. The city historically has chosen to fund its water and sewer capital needs through a water and sewer revenue bond. Unlike how we financed this building that we're in, that was an installment financing, which means it was a mortgage on this facility. So, you all um have to appropriate payments. You have to budget for payments on this facility every year. If you do not budget for the payment and you do not make the payment, the bond holders can come and foreclose on this building. Just like we take out a mortgage on our homes or a car loan on our cars, if we don't pay, the bank takes it. Same premise with this building. With the water and sewer system, it's it's a little different. It is a pledge of the net revenues generated by the water and sewer system. And there's a lot of reasons for that, but it all comes down to the fact that your ability to generate revenue from the water and sewer utility stems from your ability to provide those services. If you're not sending water to people's homes, you can't build them. If you're not collecting and treating wastewater, you can't build them. So, when we finance a utility capital improvement, what we're pledging is the net revenue of the system. What I referenced earlier, the revenues that come in minus the expenses that you pay is the net revenue available. And the reason why lenders and um bond investors prefer or

like that structure is because it really ties the payment of their revenue bonds to the operation of your water and sewer system. Your revenues are generated from the expenses that you incur delivering the water, collecting the wastewater. So what you are pledging to the bond holders and this is a contractual agreement that you have entered into. You are contractually obligated to do this is you will maintain rates and charges at a level that will generate 1.2 times debt service coverage on your revenue bonds and 1.0 times coverage on all indebtedness. I'm going break it down in very simple numbers. If you've got $4 of net revenue and $2 of expenses, you have $2 of net revenue available to pay debt service. $4 of revenue minus $2 of expenses equals $2 of net revenue available to pay debt service. If I have $1 of debt service to pay, that those $2 can pay for that two times. That is two times debt service coverage. I can pay my debt twice from those net revenues. Contractually, you are required to generate 1.2 times your revenue bond debt service. And you have some state revolving loans that are not revenue bonds per se. They're not on the same level. They are considered other indebtedness. So, you only have to meet those one times. For every dollar of debt service, you have to have a dollar of net revenue. Those are your minimum contractual requirements. Another important piece of this is that to protect bond holders, you have agreed that you will not issue any future debt

unless you can demonstrate that you will meet these minimum requirements after that debt has been issued. So, bringing it back to the capital improvements that you just walked through, if you want to issue debt to fund any of these capital improvements, you have to be able to demonstrate that your rates and charges are sufficient to contractually meet those minimum debt service coverage levels. Okay, I'm going to keep rolling. If you have questions, let me know. Um, in addition to those minimum financial contractual requirements, the market investors, lenders are generally going to want to see you holding yourself to a higher standard than that. They, you know, if you're at the absolute contractual minimum, there's not a lot of room for any hiccups, right? So, they like to see higher levels. Your financial policies kind of mirror those contractual requirements. They really set the minimum at which you can operate the system. So your debt service coverage policies follow those contractual requirements and they also establish a minimum liquidity or reserves in the utility system equal to 25% of operating expenses. So if revenue stops, you can't deliver deliver water, you can't treat waste water, the minimum of 25% of operating expenses means you could operate your system for an additional quarter before you rolled through all of your reserves. That is establishing an absolute minimum. From a planning perspective, like I said, lenders are going to want to see you hold yourself to a higher standard. What you're going to see here in a little bit in the financial projections is a minimum target of 1.5 times debt service

coverage. So for every dollar of principle and interest you have to pay, you need to have a $1.50 of net revenues and at least 50% or a half of a year of utility operations in cash reserves. Those are kind of the planning targets that you all are working towards. Okay, how is that stacked up historically? Well, we took a look at the last five years um of your audited financial statements and the resulting history of these two key ratios, debt service coverage and cash liquidity. We've done the debt service coverage calculations for you. Revenues on line one, expenditures on line three. give us net revenue available for debt service on line five. So in fiscal year 25, 27.4 million of revenues, 20.7 million of expenses left you with 6.6 million of net revenues available to pay debt service. You had you had 5.6 6 million of revenue bond debt service, 130,000 of revolving loan payments for a total of 5.7 million of total principal plus interest payments. So the resulting debt service coverage, let's just look at total debt service coverage on line 12, was 1.2 times. That's 6.6 6 million of net revenue compared to the 5.7 million of debt service gave you gave you 1.2 times coverage getting pretty tight right to those contractual minimums. So you can see going back to 22 you were as high as 2.3 times and that's come down over the last

few years which is not uncommon as we've seen extreme inflation particularly in water and sewer utilities operating expenses have increased um and that's really um brought down the margin of revenues versus expenses. And so now we're kind of at a point where we really don't have a lot of room to meet those contractual requirements. If we're going to be looking at issuing debt in the future, we're going to need to have a little more room under that debt service coverage in order to bring the new debt service online. Right? We're already at 1.2 times. There's not a whole lot more debt service that we can handle before we're out of our contractual requirements. Well, you talk about this all the time, Mitch, but what happens if we're out of those contractual requirements? Well, the a third party trustee on behalf of the bond holders can ask you to bring in a third-party rate consultant and implement the recommendations required in order to bring those um back up into compliance. So really, you know, it's either you all determine what's needed or somebody else comes in and determines what's needed in order to meet those bond requirements. From a cash and liquidity perspective, um you can see your your cash unrestricted cash on line 15. It's been as high as over 14 um.8 million um in the past. ended last fiscal year at just just at $10 million of cash and liquidity. That represents about just under 50% of the annual operating budget of the utility system, right? So you're kind of right at that planning target of 50%.

But that doesn't leave us with any cash to really invest in capital projects, right? So that means we either a need to borrow to fund capital if there's any capital that you want to fund and therefore that impacts our debt service coverage. So we got to have more net revenue or we got to come up with more revenue and net revenue to be able to cash fund capital projects. Right? So, I think the point is we've kind of maxed out our affordability under the current revenue structure and as we consider more capital in the future, we're going to have to look at increasing the gap between revenues and expenses. Okay. We do have for you just graphically um on page eight the debt service coverage ratio that we talked about. That's on the left. I think we've covered that pretty well. We do compare that for you to your uh minimum policy and your planning levels. You can see we're still above the red line minimum policy, but we are below that one and a half times planning level. And then for perspective on the right, I think this is really kind of the key point of this slide is, you know, you can see at your current levels compared to those nationally rated water and sewer systems, national are in dark green and then North Carolina only are in the light green. The medians of all those people that are rated, right? So this is the median. half or higher, half are lower, but you can see how you stack up and you're really kind of right in line with that North Carolina single A median, but below all the others, right? And this just kind of reinforces what we saw on the prior page that we don't have a lot of room to take on new requirements under our current financial structure.

Um, the minimum of the single A is a 1.2, 2, which is right where you're at. The minimum um for any double A rated North Carolina system is a 1.6 times. So even if we hit that target level of one and a half, we're still below um the lowest double A in North Carolina. But I think one and a half times is a good planning level to target. Um similarly on liquidity right cash as a percent of operating expenses as we saw we have been declining there but we're right on top of that 50% planning target currently and even at that 50% target you can see that does put us below all of the medians. Um these medians are done in days cash on hand. It's the same calculation. You know 100% of operating revenue is 365 days cash on hand. So 50% is 180 days cash on hand. You can see the lowest North Carolina doublea in the bullets down below is about 62 days. So we are above the minimum there on the cash perspective. Um but you know the median is like 740 days give or take. So well below that at roughly 180 days cash on hand. So again thought this would be helpful perspective for y'all as we think about funding capital. We may need to enter the capital markets to borrow money for the water and sewer system. These are some of the key things that lenders are going to be looking at that rating agencies will look at and will really drive our ability to number one access the markets for the money to fund capital and number two influence the interest rate at which we can get which ultimately drives what our annual

payment is. Right? So the higher the interest rate, the higher our annual payment, the more net revenue and revenue we have to generate um to be able to issue those revenue bonds. So ultimately planning for the 50% cash, the one and a half times debt service coverage, I think is is really where we need to be to make sure we have access to the capital markets at reasonable levels of interest. Happy to answer any questions you all have. I know that was a lot. I'm always available for follow-ups, but hopefully that sets you up for for what you're going to hear next.

Our um credit rating. Yes, sir. That that's basically based on our revenue size of our revenue. Um so it's based on a couple things, right? It's based upon things you can control and can control, right? It's the things you don't have immediate control over are your system size, customers, expense size, revenue size. It's based upon the demographics of your service area, population, salary, per capita, personal income levels. Um, and it's based upon the condition of your system. Yeah.

Right. So, that's kind of the things you don't have control over. And then to your point, yes. the the revenue size compared to your expenses, the reserves that you have, cash that you have on hand. Those are the other key metrics. Those financial metrics represent 40% of the overall rating. So, the lenders seem to be be really covered. Yes, sir. I mean, from a lender's perspective, right, the revenue is really important, but if your expenses are equal to your revenue, that doesn't leave them any room to actually receive their bond payment, right? So, what they really care about is that net revenue, what's left after you pay expenses, right? Like two and a half times.

Yes, sir. You got it. Thank you. Anyone else? Barry, you have anything? Yes. Okay. All right. Thank you, sir. That's a lot of information. Thank you for your time. Yes, sir.

Well, we got one more presentation. Brian, you're going to bring up now. You've heard about all the needs that we have, the desire uh based upon a language plan, how our lenders look at us and how we're gauged uh against our peers in the industry. And now we're going to provide you with if you want to go down and you want to do the projects, how do you pay for them? No.

Thank you, Mitch. So at this time I'd like to introduce Michael Cronin with Will Dan Financial Services. Michael has worked with our team over this past about 18month period to develop the rate study model will be getting ready to present and ultimately be able to show you what some bill impacts are along with as Wilmer addressed the necessary rate adjustments if you like to do certain projects.

Thank you Brian. Good afternoon, Mayor Wilson and members of the council. My name is Michael Cronin. I'm uh senior financial advis or I'm a senior uh project manager with Wildam Financial Services. And today we'll be discussing uh like you've heard previously from LKC Garver and Davenport some CIP priorities and how that impacts actual rates and bills. So we'll start with some rate study goals and objectives. So, we want to evaluate the financial health and stability of the water and sewer utilities uh which we did through developing a 10-year financial plan for both the water, sewer, and combined utility system. We want to provide funding for our current and future operating and maintenance expenses as well as our capital projects and our water and sewer master plans that have been identified. We want to maintain those adequate cash reserves that was mentioned by Davenport as well as meeting our annual debt obligation requirements. All right. So now we'll discuss the financial plan drivers and considerations. So as we know just like anything in life, right? We have rising operating costs. So we have rising cost of equipment, supplies, power, chemicals, water purchases, water treatment, etc. We're currently assuming those costs are going to grow at about 7% annually. We also have some periodic increase in lawack operating costs from wastewater treatment plant expansions. Uh we're currently assuming uh a wastewater train plant expansion completed in fiscal year 2027 that will result in additional operating costs of $600,000 in 2027 to the sewer utility system. And we're anticipating another expansion being completed in fiscal year 2031 for the WSAC expansion that would result in about another $1.98 million in annual operating costs to the sewer utility system. We also need to make sure we're meeting our existing and future annual debt service payment requirements. And we also need to make sure that we're meeting our debt and cash reserve policy objectives that you just heard from Davenport, such as the 180 days cash on hand, as well as maintain that 1.5

minimum debt service coverage requirement. We want to make sure that we're funding our ongoing critical obligatory and RNR capital projects identified in those master plans that we saw from LKC and Garber. And we also want to consider funding short and long-term expansion capital projects identified in the recently conducted water and sewer master plans. All right. So, what we're going to look at here, so we're going to look at some status quo projections and the financial metrics under our status quo scenario, which essentially means we operate the utility system as it is today under our existing rate structure. So, you're going to see a similar trend that was mentioned by Davenport. So, if we look at the graphic up top, which is representative of our revenues over our expenditures, excluding any capital cost. Uh, as we can see, our dark blue bars here represent our revenues. Our light blue bars represent our expenditures and that black line you see represents our net operating results. And as you can see that's below zero every single year. So if we don't increase our rates, we won't generate enough revenue to cover our operating expenditures. If we move down to the bottom left graphic, which represents our total days cash on hand or our total cash reserves, that blue bar that you see represents our total cash balance. The black line that you see there represents our targeted days of O andM which is currently set out 180 days of cash on hand. And as you can see through 2031, we currently do not meet our targeted days cash on hand. And actually by 2029 fiscal year, we're projecting running out of money and actually running a negative cash balance through 2031. If we move to the bottom right graphic, which is our debt service coverage ratio, the blue bar represents our actual uh coverage ratio calculation. And once again, as you can see, that falls below that black line, which is our minimum debt service coverage ratio target of 1.2 times and also below our coverage target of 1.5 times. So what we can see from this graphic is that doing

nothing is not an option because if we do nothing, we're not going to meet our financial goals such as gen enough revenue to cover our operating expenditures. We're not going to meet our days cash on hand targets and we're also not going to meet our reserve or our debt requirements that we need to have for our bond holders currently. All right. So now we'll talk about some methodology and projections. So this slide we're looking at here is our general rate study methodology. I'm actually going to speak to this slide backwards and start at the bottom and work our way to the top because that's typically how we conduct the rate study analysis. So first we'll look at the green bubbles there you see which represent our total revenue requirements. Those are made up of our onm expenditures, our annual debt service payment as well as our debt service coverage requirement, our capital expenditures and then our cash reserve policy objectives. So once we define our total revenue requirements, we then back out other revenue sources which are made up of things such as connection and tap fees, miscellaneous revenues, interest earnings on investments, etc. So once we back out our other revenues from our total revenue requirements, we know how much of those revenue requirements need to be generated from our actual user rate revenues. So we determine our user rate revenues by applying your customer units and the associates usage and volumes to the actual existing rates to determine how much user rate revenues we're getting from our existing rates. And then we compare that to the remaining revenue requirements that we need to recover from our user rates. Which leads us to that gray bubble off to the right that you see there where when we have revenue shortfalls, we engage in what we call revenue adjustments or rate adjustments to make sure that we're meeting and satisfying our total revenue requirements. So now we're going to look at the CIP by funding source. So this is essentially a summary of the funding source of the CIP. So we'll start with the water system. So through 2036, uh these numbers are represented in thousands by

the way. So as you can see, uh our total water CIP is about $25.5 million through 2036. Of that, we're assuming about 171 million will be funded through some kind of debt issuance. and that the remainder will be funded from PIGO, which essentially means it'll be funded from user dollars or cash reserves. We'll now look at the sewer system uh through 2036. We're looking at a total capital expenditure cost of about $70 million. Once again, 50 million of that will be we're anticipating will be funded through some kind of bond or debt issuance and the remainder about $19 million will be funded from cash or cash reserves. So that leads to a total capital expenditure cost of $275 million. So that's a lot of money that we got to come up with over the next 10 years or so. And of that since three quarters of that we're assuming is to be funded through debt. That's why it's very important that we meet the financial metrics that Davenport had referenced previously to make sure that we have the capability to take on new debt as well as look favorably to the financial markets as well as the rating agencies. So this slide just calls out some of our major critical infrastructure projects such as the water treatment plant rehab. So there's three phases for that currently that we have in here. So we have our POS removal which is our forever C for our forever chemicals. We're anticipating that project taking place in fiscal year 2029 for an approximate cost of $16 million. We're anticipating a water treatment plant rehab phase 2 project part A in fiscal year 2029 as well of about $1.6 million. And then we're anticipating another phase 2 rehab project for the water treatment plant for parts B and C which are anticipating will take place in fiscal year 2032 as well as in 2035 for another 12.7 million. The last two bullets you see there are related to the sewer system. So we have our Landis Canapapolis wastewater

treatment plant project anticipated to take place in fiscal year 2028 of about $29 million. And then we also have our SRU Canopapolis crossing list station improvement project anticipated to take place in fiscal year 2028 for about $6 million. And the reason we wanted to call it these specific critical infrastructure projects is because they make about 50% of the total water and sewer CIP through 2031 and they make up about a quarter of the CIP through 2036. So these projects alone have a significant impact on our our capital plan. So now we're going to look at the 10-year financial plan overview. So we'll look at our 10-year projected customer account and customer growth assumptions. We'll look at our 10-year inside city water and sewer monthly bill and rate impact under various capital funding scenarios uh for a typical residential customer using 4,000 gallons of monthly usage. And we actually determine that by looking at your historical billing data to determine that average use per customer. We'll then look at the 10-year projected financial metric results such as the debt service coverage ratio and the days cash on hand that you heard mentioned previously by Davenport. We'll then look at a synopsis of this and a comparison slide so that way we can see how all the bills are impacted under each capital scenario. And then finally we'll look at how the existing and the fiscal year 2027 projected bills are compared to our neighboring utilities in the area. So first like I said we'll start with the projected water and sewer customer accounts. Uh the blue bars represent our water customer accounts and the green bars represent our sewer customer accounts. And currently our water customer accounts are estimated about 22,675 accounts. We're anticipating by 2036 that will increase by about 5,000 customers to about 27,600 customers. For our sewer customer accounts, we're currently looking at about 20,979

accounts and we're anticipating that'll increase by about four uh 4.5,000 accounts to about 25,000 account or 26,000 accounts somewhere in that range. All right. So, we're going to look at our operating and maintenance costs only scenario. So, this means we're just keeping the lights on. We're not funding any of the capital projects that you heard beforehand. This is what we need just to make sure we could keep operating utility system as it stands today. So, one thing I do want to point out here uh before I get into the rates themselves, we look at the monthly base charge as well as the the volumetric charge per thousand gallons of water is that both fees are increasing. And the reason that is is for one, we want to increase the base fee because we want to promote revenue stability of the system since the majority of a utility costs are inherently fixed. But we also want to increase the volumetric rate to allow the users to have some control over their bill through their monthly water usage. So we want to make sure we have that good balancing act to provide revenue stability as well as like I said giving revenue or giving customers some control over their bill through their monthly water usage and promoting conservation. So with that said the monthly base charge under our operating maintenance cost only scenario is currently $8.30. We're anticipating that going to $9 even in 2027 and then by 2036 we're anticipating that monthly base charge being $14 per month. We'll now look at the volumetric charge. The city currently has what we call an inclining block rate structure, which means that as you go through different tier thresholds of usage, you pay more per unit of water. So currently the tier one threshold is 0 to7,000 gallons of water for an inside city residential customer. So they currently pay $7.31 per,000 gallons of usage. In 2027, that will go to $7.60 per,000 gallons of usage. And by 2036, that will go to $10.82

per thousand gallons of water usage. For the tier 2 threshold, anything over 7,000 gallons of usage, that rate is currently $7.60 per thousand gallons. It'll go up to $7.90 per thousand gallons in 2027. And then by 2036, we're anticipating that rate will go up to $11.25. So that would bring a water bill for a customer using 4,000 gallons of water per month. Currently, the bill would be $37.54. In 2027, that bill would go to $39.40. And by 2036, that bill will go up to $57.28 for a water bill. So now, if we look at the sewer system, you'll see that similar trend of both the base fee and the volumetric rate going up. So the monthly base charge will go from $7.20 on the sewer system up to $12 in 2027 and then by 2036 that rate would be $2169. The volumetric charge is currently $745. In 2027 it would go to $823 per thousand gallons of usage. And then by 2036 that rate would be $12.77 per,000 gallons of usage. So, the total monthly sewer bill for a customer using 4,000 gallons a month is currently $37 per month. Next year would go to $44.92 per month. And by 2036, that bill would go to $72.77 per month. So, currently, if you're a customer using both water and sewer service, your existing bill will be $74.54. In 2027, that bill would go to $84.32. And by 2036, that bill will go to $130.85 for a a user with combined water and sewer service. So if we look at the monthly bill

adjustment in 2027, that bill will go up by $9.78 in 2027, which is an increase of about 13%. And also, you'll notice the same trend in this slide as well as the subsequent capital slides, is that the revenue adjustments are more front-end loaded. And that's one because of the COVID era as we know uh and this was across the country. This isn't unique to the city of Canapapolis, but there was an effort to mitigate cost on residents because we're in an area of high inflation. And we also wanted to defer rate adjustments and keep them arbitrarily low so that way we didn't have to put that extra cost burden on the customers who already were experiencing inflation. So, we're kind of in this postcoavid era catchup, you could say, based off us keeping rates low during that period of CO. So, scenario one is our critical projects that we're going to look to fund plus our operating and maintenance costs that we just saw on the previous slide. Uh, so similar trend, our monthly base charge is currently $8.30 for water. It'll go up to $9.50 under this scenario and by 2036 it would go up to $16.81. 81. The volumetric charges once again are $731 and $7.60 respectively. In 2027, they would go up to $7.71 and then $82 respectively. And by 2036, uh, tier one rate would be $1.90 per,000 gallons and then $12.37 per thousand gallons per tier 2 usage. So that water bill once again is $37.54 currently. It will go up to $40.34 in 2027 and by 2036 that bill will be $6441 for the sewer system. Once again, the base charge currently is $7.20. That bill would go up to $12 for the monthly base charge. And then by 2036, that rate

would go to $3048 for that monthly fix fee or that monthly base charge. for the volumetric charge. Once again, that rate is currently $745. That will go up to $8.29 per thousand gallons in 2027. And by 2036, that rate will go up to $1612 per thousand gallons of usage. So that current bill of $37 will go up to $45.16 in 2027 and then up to 94 almost $95 by 2036. So, our combined water and sewer bill would which is currently $74.54 will go up to $85.50 in 2027 and then go up to about $159 by fiscal year 2036. And once again, you'll see that same frontend loading taking place. Oh, apologies. I don't know what button I just hit. All right. So, now we'll go on to our scenario two. So, this is going to include all of our priority one projects, those critical projects, and it's going to include our renewal and replacement projects as well, which we're considering our priority two projects. So, once again, that $8.30 charge for the monthly base charge for water would go up to $10 even, and then it would go up to $19.54 by 2036. The tier 1 and tier 2 rates for water would go up from $731 to $797 and from $7.60 60 to $8.29 and then by 2036 those rates would be 1353 and 1407 respectively per,000 gallons of water usage as we move to those tier thresholds. So the water monthly build that's now currently $3754 will go to $41.88 and by 2036 it will be $7366 for our sewer system. Once again, that $720 charge for the base fee will go up

to $12. By 2036, it'll go up to $31.32. And that volume charge that is currently $745 per thousand gallons of usage will go up to $853 per thousand gallons and then up to $17.68 per thousand gallons. So once again, that $37 existing charge for sewer customers will go up to $4612 next year. And then by 2036 that bill will go up to about $102 for just that sewer bill. And as you can see, this is mainly driven like we talked about by those WASAC costs and things of that nature. So that will be something we'll get to in the preceding slides is some of those projects and the actual bill impact that they have just so you could see and highlight how individual specific projects are actually impacting especially the sewer side. So once again, that combined bill at 4,000 gallons per month is currently $74.54. That'll go up to8 $88 even in 2027. And then by 2036, that bill would be right around $176 for a combined water and sewer bill for a customer that's an inside city customer using 4,000 gallons of usage per month. All right, so now we'll move on to our scenario three. So, this is going to include all of our critical projects, our priority one projects, all of our RNR priority 2 projects, as well as our short-term expansion capital projects, which we're going to call our priority three projects. So, once again, that existing base charge for water will go up to $10 and by 2036, it'll go up to $19.77. And then the volume charge will go up to $84 in 2027 for that tier one rate. And then for the tier 2 rate, it'll go up to $8.36. And by 2036, we're looking at a tier one rate of $14.31 per thousand gallons. And the tier 2 rate would be $14.88 per thousand gallons. So that water bill

now, that's $37.54. We'll go up to $42.16 in 2027, and then up to $77 by 2036. For the sewer system, that $720 base charge is still going to go up to $12 in that preceding year. And then by 2036, it'll go up to $3163. The volumetric charge per,000 gallons of $745 will go up to $857 in 2027 and then up to $18.24 per,000 gallons by 2036. So that $37 sewer bill once again will go up to $46.28 28 and then it'll go up to about $104.60 by 2036. So once again, that year one increase to 2027, we're looking at about a $14 increase to get us to a monthly water and sewer combined bill of $8844. All right, so now we're going to go to our scenario four scenario. So this is going to include all of our capital projects. So this is our priority one critical projects, our RNR priority 2 projects, our short-term and long-term expansion capital projects. So this is everything in the kitchen sink. So for our base charge, once again, that $830 charge is still going up to $10. You're not really going to see the impact here till the later years, especially because the long-term capital expansion projects, we're not assuming those take place until the early mid 2030 range. So we're still quite a ways away from that. So the 2036 rate for the base charge will go up to $20.24 for the water system. The volumetric charge for tier one will go up to $14.65. And the tier 2 rate will go up to $1523 by 2036. So we'll still have the same bill of $42.16 for the water system in

2027. And that bill will go up to $78.84 by fiscal year 2036. For the sewer system, we still have that $7.20 20 cent base charge that jumps to $12. And by 2036, that bill would go up to $3241 just for the base fee. And then for the volumetric rate, that $745 charge per thousand gallons would go up to $857 per thousand gallons. And then by 2036, that bill would that rate would go up to $18.71. So that sewer bill once again will go up from $37 to $46.28 by 2027 fiscal year. And by fiscal year 2036, that sewer bill will go to $107. So once again, our current existing water and sewer bill for a residential customer that's inside city receiving 4,000 gallons per month is $74.54. That'll go up to that $8844 again. And in 2036, that bill will now be $186. So now we're going to look at our key financial metrics under each scenario. So this boils down to what you just heard discussed by Davenport of maintaining a debt service coverage ratio target of 1.5 times. So as you can see there's some highlighted yellow cells on the table. Those are areas where we're falling just short of our target of 1.5 times. So, as you can see, we're meeting that debt service coverage ratio target in a majority of the years for a majority of our scenarios. Scenario one does fall a little shy of that 1.5 times, but we're still in the ballpark. But to make up for that, if we now transition to the bottom section of this table, we have our combined water and sewer utilities days cash on hand. So once again, we want to maintain 180 days of cash on hand just like we do in our personal savings account where we maintain at least 3 to six months of

personal savings based off our monthly expenditures. So as we can see currently uh we fall short of that 180 days. In 2027, we still fall short, but we're progressing toward that 180day target. So we're making a step in the right direction. And by 2028, for all scenarios other than our operating and maintenance cost scenario, we are meeting that 180day cash requirement. we fall a little short in fiscal year 29 through 2031 for scenario two which is our critical and RNR project scenario. Uh but in scenario one where we see our debt service coverage fall short we do have stronger days cash on hand. So that's the good thing. So we can maybe use some of that cash to offset some of the debt service. So that way we're meeting both of those targets. And then once again, we stay true all the way through fiscal year 2036 and maintain at least that 180 days cash on hand. All right. So this slide is really just a synopsis of everything we saw before. Just once again relaying what that combined bill at 4,000 gallons per month was for a water and sewer customer who is an inside city residential customer using 4,000 gallons per month of water usage. So now we're going to look at this utility comparison at 4,000 gallons a month. Once again for an inside city residential customer receiving 4,000 gallons of service per month. Uh the black line that you see going across the comparison utilities, that's actually the average. So the average water and sewer bill of the comparison group included here in is $73.32. The city of Canapapolis, as you see, falls right in the middle currently, right at the average, just slightly above at $74.54. Under our O and M scenario, we jump statesville up to $84.32. And under our scenario one, we stay in that same spot, but that bill increases

by about another dollar up to $85.50. Under our scenario two, which like I said includes our critical infrastructure projects, our renewal and replacement projects, that bill goes up to $88. And we also jump High Point Thomasville at that point. And then for our scenario three and four projects, which include the long-term and short-term expansion capital projects, that bill goes up by another 84 by another 44 cents to get to $8844. And we stay right in that same realm. So we do get to the higher range of this comparison graphic under scenarios 2, three, and four. So now we're going to look at the capital project estimated bill impact based off specific capital projects and how they actually impact or will potentially impact an estimated bill for our current water and sewer customers. So we'll start with some water neighborhood expansion projects. So a lot of these projects fall in the priority three priority four range. Uh other than our Charlotte water interconnect, I think that's a priority one project from what I recall. As we can see the total aggregate if we look at the column all the way to the right at our additional monthly cost per account column these total projects sum up to about a $146 as an impact to the monthly bill on an existing customer. Then we have our Tucker AB waterline project which results in about another 38 increase to the monthly cost of a bill which brings our total to about $247 when we include that 1.5 debt service coverage target that we want to meet. So these projects alone cause an additional monthly cost per account potential impact of $247 per month. We'll then move on to our water critical projects as well as some RNR projects and the mus estimated monthly bill impact they'll have. So the first two projects are our priority two projects.

These are renewal replacement projects. So we have the 16in connection under railroad tracks downtown which will increase the monthly bill by about 62 cents. We then have the Glenn AB waterline project which will increase the monthly bill by about $2.19. And then when we get to the next three, these are our priority one projects and the biggest impact is the water treat plant rehab phase one POS removal project which is also the forever chemicals that has been federally mandated. And unfortunately there has as what we've seen now been not any federal relief to help offset this capital cost. So unfortunately it's on the burden of the city to meet this federal mandate and have to pay for this capital project since there isn't currently any grant funding or anything else that we've been seeing to help offset this. And once again this is not unique to the city. This unfortunately has been an impact to municipalities and utilities that we work with within the state of North Carolina as well as across the country. So we're seeing this universally and the burden this is placing on utility systems to find a way to fund the POS removal projects. So as you can see that project alone has an impact of about $4.83 to a monthly customer's bill. So then we have the water treatment plant rehab phase 2 project for part A which increases the monthly bill by about 50 cents. And then we have our North Carolina DOT project which adds about a cost of additional 16 cents per month. So that comes to a total of about $8.28 per month increase to a water bill for a typical customer. And when we apply our 1.5 times debt service coverage ratio to that, we then end up with a monthly bill increase of about $1243 to a water customer account. All right. All right. So, now we'll discuss some sewer capital projects and the estimable impact they'll have. Uh this is where we're really going to see uh bigger numbers, especially compared to the water side. Uh so, we're going to start with the SRU pump station. Uh that

additional cost per month per amount is going to be about $1.97. When we apply our 1.5 times debt service coverage ratio target to that, it results in an additional cost to the monthly bill of about $2.96. We have the WASAC 34 to 36 MGD treatment explan expansion. That's actually built into the sewer's annual operating expenses. That's why you don't see a debt service coverage ratio target applied to that since that's factored into our actual operating cost. So that increase is just going to be $7877 based off the existing number of accounts of 20,979 accounts. And then the biggest impact is going to be the LA the Lance wastewater treatment plant project. So that is currently going to add an additional monthly cost estimated of about $948. So once we apply that 1.5 times debt service coverage ratio target to that, we're looking at about an increase of $14.22 per month. So these three projects alone total an increase about $25 to a sewer monthly bill. All right. So with that said, does anybody have any questions? I'd expect some.

Michael, I think it's important that you mention on the Landis one that we've talked about that assumes that we're paying all the cost and that we we don't get any assistance um with helping to fund that project.

That is correct. So, currently, and I should uh elaborate on that, that this is worst case scenario. So, we're assuming that all this burden is on the city to come up with this monies and that we don't have any relief from grants or outside monies that may help offset these capital costs related to the city. And as we know based off the land use plans like you've heard discussed before that will have a material impact on how these bills are impacted because we may defer these projects and push them out. So, there wouldn't be a cost burden to the customers currently if we decide to adjust our land use plan depending on how aggressive we do or don't want to be with growth. Go ahead, Mr. Jackson.

Is this the good news? That is the good news, I guess you could say. Council member Jackson, this is the worst case scenario. We don't want to hear bad news. Okay. Yes, sir. This is worst case scenario. This is assuming and the city is actively trying to find outside monies, alleviate these costs. Obviously, like I said, the land use plan will have a big impact on this and how aggressive we want to be toward growth. So all that will play into this worst case scenario that was presented that you saw tonight. Well, I just hope we have some time to digest all of this and get together and have some really good um talks on exactly what we need to do. I agree here. But uh we we really need to look at this seriously. This is a lot of good information. I mean, it's almost like drinking from a fire hose, but

Yes. Yes, sir. It's a lot of information. So, uh like even you heard from the other folks, if you have any followup questions, feel free to let Mr. Melton know or any of the staff and have them reach out to me and I'm more than happy to provide any thought that y'all may want or anything else that you may need to help cuz like you said I know we're drinking from a fire hose tonight because that was a lot of information and that was a lot of capital priority scenarios that we had gone through tonight. Thank you. Thank you very much.

Yeah, I just wanted to thank all of our presenters tonight for giving us so much information but making it very simple for us to understand but more importantly for the residents of Canapapolis so they can go back, watch this, get this information. And I'm sure this will be public so that our residents can also understand the different things that we're facing. So I really appreciate you guys breaking it down for us. So thank you to all everyone, not just you, but everybody. So thank you very much. Thank you guys. Have a good night. Thank you.

Mayor, if I could add, uh, so Brian and Kristen and I have worked really hard as well as everybody on the team, Alex and everyone. And under scenario one, we've actually we we've got that worked into the budget. Um I think Councilman Jackson, you mentioned that, you know, you wanted time to digest. We certainly no actions necessary tonight on anything. We wanted to get this before you heard it at the retreat. We've had some general conversations. You've uh we've emailed this information out, but I think now is where we we'd like some feedback from you. uh once you have an opportunity and you've reviewed the information in more detail, give us some sense of the scenarios that you would like us to kind of work from and then we can come back and we'll work those numbers in. Uh as you saw from each one of the presentations, scenario one, we've got covered. That's that's a we have to do it. Uh essentially, we need to meet those debt coverage ratios. We need to be able to pay for the additional cost for chemicals that we have to treat our water and um the cost to treat sanitary sewer. But if you want to expand, if you want to add projects, those are th I mean those are the ones when you get into scenario two, three, and then four, how aggressive you want to be with that. And we can come back to you with some recommendations. Perhaps it's a combination of those projects. But without question, I think what you're seeing from this and you saw from the each one of the presentations, the driver here today is sanitary sewer.

Thank you.

Anyone else? Last item on your agenda and last one I have for you tonight too, mayor. So, um, last thing to discuss is utilities connections outside of city limits and, uh, hopes that we could possibly set a more formal process for establishing voluntary process for acquiring city services. Um, I'll spend just a few minutes or so on this map here. Just want to kind of orient you better. Some of you may or may not know the um, future growth areas that we established years past. uh in the areas of western Cabaris County, northwest Cabaris County, and of course in Royan County, uh what was previously known as our ETJ area, but also or or I say previous will be after June 30th. Uh we also have an agreement with Landis about our future growth area as well. And we did that uh back when we had the legislative land swap with them about four years ago. Uh the areas to the west that are our future growth areas. Uh so highway 73 is the border if you will for the area north of that. It is our future growth area. South of that Concord except the area of uh Canapapolis Parkway. That's their future growth area. We do have a annexation agreement not only with the town of Landis but we have one that has been in effect for some time with the city of Concord. Uh so the blue the light blue you see on the map you see the line running through the map there that's the county line but all the light blue in Rowan and Cabaris County is our future growth area. The area shown in that lighter green color is actually our existing city limits area there. So this map gives you an idea of the utilities that are in those uh growth areas uh out in Cabaris County. We don't have much in the way of utilities in Rowing County that are outside of our existing city limits, but it kind of gives you an idea if you look closely there as far as the blue lines. It's kind of faint on the map there, but uh you squint, you can kind of see it there type thing, too. So now this map uh I'm

not going to bore you with the details of every zoning district that's out there, but this is one for me that's very important to point out to you. Uh particularly for the areas in Cabaris County. So if you look west there, the teal color area, the Kelly green color area, those are areas in Cabaris County that have the uh CR designation or the AO zoning designations. Those are larger lots areas of Cabaris County. in those zoning districts of Cabaris County in order to connect to municipal services. Uh they have to be annexed into the city. So the county has a rule in place in their zoning district that says you cannot connect to municipal services unless you're in the municipal jurisdiction. Uh so we've we've honored that by way of our voluntary annexations. The purple area you'll see on the map, especially in the Fisertown area, that's an area that's actually zoned like LDR. So that's the lower density residential. Uh and as you'll see on this next um schematic here, uh those districts are what I mentioned there, the AOCR and LDR. So under the first two, you see that they're basically uh do not permit uh public water and sewer in those areas. So annexation is the only way to get those services where whereas the LDR district, it's an optional uh connection. Uh I will tell you that third option is basically only applicable to smaller lot sizes. Any bigger development that occurs would still have to be annexed in because the county again does not allow public uh septic services. They prefer sewer service which would be a public entity itself. They don't don't do like community systems any of those. They would not approve that. So our current procedure and we've been doing this for some time is a resident will contact the city regarding water and sewer connections. uh typically contact my office and my staff. Uh we will talk to those folks. I'll normally meet with them about the annexation process. Uh the standard operating procedure is for

the application to be made for voluntary annexation prior to getting utilities connected to the site uh to the house. If it's an existing house or if it's a vacant lot, then certainly in that case uh as well. uh benefits of this procedure. It basically helps us get a return on our past infrastructure investments in these areas made by the city 20 years ago. Uh western growth area in particular. Uh let me go back to the map real quick because I probably should have pointed this out. So if you look at the uh green finger area, if you will, that's Lake House. So the entire area west of Bar Road and the entire area east of Odell School Road, that that's pretty much a bowl. That's a watershed bowl. So, we're not going to see much in the way of utilities ever being extended those area uh areas. We leaprogged the lake, extended services out to that shallow church road, Odell school road area west to the county line. We can't annex into Meckenberg County, so we wouldn't do any of that anyway. We've done that as well as Concord has to extend services that in years past. We eventually started going further north there to the Wayne brothers property as well. So, you know, somewhat of a previous um investment if you will of of city in the past. So this kind of helps that and ensures our future growth in that area continues. Uh these guidelines would be consistent with Cabaris County guidelines. Uh and then with the pending ETJ removal in Royane County, the only method, this would be the only method to ensure future growth in Royan County as well. So it kind of helps that part of the process. Here's some common questions I get in my office uh or my staff does as well. Uh what's the fee to annex? There's no fee to annex. There is a fee for reszoning. there is a fee for you to survey your property. Okay? So, that does come into play there. But folks generally they're okay with that. And I will tell you a lot of times folks talk to us about extending utilities, but some of them come talk to us as the golf course that was here tonight that you approved. They just want to be in the city of Canapapolis. They think it's the place to be. They like to have the address and they like what we got going

on. So, they just wanted that presence in Canapapolis. So, uh second question, how long does the annexation process take? Generally, 30 days. You know that we have a first reading in one of your meetings. second meetings when you do the public hearing. Uh, are there fees associated with connecting to city water and sewer? Well, you just had nauseium went through that, so I'm not going to have to elaborate on that. Uh, how long does it take to connect to city water sewer? It really depends on the workload and various other multiple factors there, if you will. Um, will my taxes increase? Of course, yes, there's a next layer of taxes because we're a city and we basically the way I always tell folks is counties by state statute are mandated. Cities are not. So, we are incorporated. So, when folks live here, they opt to live here under those guidelines which include zoning, which include, you know, these types of taxes and the services you just talked about for about an hour there as well. So, uh other common questions, uh, and we get this a lot, does the city extend sewer service if it's not in front of my house? uh the individual or the developer is responsible for doing those extensions. Can I connect to my neighbor's sewer and water? That's a common question we get. They cannot do that. They have to basically establish the service for themselves there. Uh do I have to pay the fee all at once or is there any financial assistance? The fees are typically due all at once. We do have some grant opportunities through our community development uh office. In addition to that, the city has in the past uh and we are looking at further uh exploring financial possibilities as far as financing goes uh and the possibilities of doing that. We're coordinating that through our our various departments and such too. And then lastly, um how much does a survey cost? We can give them a range in my department because we deal with these uh prices, but that's typically up to the property and the shape of it and size and of course the surveyor as well. officer. Uh so the proposal I would have with you is if you're okay with it, would we move uh forward at your next meeting with a proposal from staff that basically uh ask city council to adopt a resolution that basically says it's

consistent with current county guidelines. It memorializes our current practices to ensure the city's future growth in areas where utilities are presently located or can be extended to. So really want to extend basically establish it more as a formal policy. Right now it's a standard operating procedure based on the county zoning, but we wanted to further solidify that. So with that, I'll be glad to answer any questions you have related to what what I've mentioned here. So any questions? No questions. Okay. Guess we'll see you the next time about this. Yes, sir.

Uh before we go to Mr. Melton, I was aiss I should have mentioned this in the beginning of the meeting. You notice Mr. Davos's not with us. He's probably with his two brand new daughters somewhere. him and his wife just welcomed two little twin girls last week. So, keep them in your thoughts and prayers. I think everything's going pretty good. I can't imagine him holding a wrench in one hand and a girl in the other. We'll see how this going to work out. We We'll see. I think everybody's doing really well. So, I just want to make sure you all knew that. And Mr. Melton,

thank you, Mayor. Uh earlier in the meeting, there were some questions regarding the sidewalk projects. I thought I would give an update. In fact, at one of our prior meetings, uh there was questions relative to the timing. Uh so I wanted to share with you uh Little Texas Road, kind of where we are right now and when we anticipate getting to a construction phase of that. I know it seems seems as though it's been an extremely long time uh since we began the project uh to actually seeing uh concrete on the ground and I do agree it certainly needs sidewalk in that area. But as I mentioned at prior meetings, I think there's a lot of excitement when we first get these grants. But I think when you start talking to residents and understanding what the true property impacts are, that that's when it becomes reality that uh well, wait a minute, to build that sidewalk, there's going to have to be some impact to my property. And with that, we are at Little Texas right now. We're in the rightway acquisition phase. We have those with the city attorney and we anticipate to have all those finalized in the next three weeks uh so that we'll have everything recorded. Once we have all of those rightaways recorded on Little Texas, we then can begin our utility relocation uh for the project. We anticipate that to begin July of 2026 uh and then have that complete by January of 2027. I know that seems like it's a long time again, but it does take time when you're going to have to move utility lines. You may have to move other utilities that are in the way that impact whether it be gas or it may be water that we're having with sidewalks. We typically don't worry about the water too much, but you certainly don't want to have a utility pole that's in the middle of your sidewalk area. So, that's uh that's where we are there. The actual let date for construction, we expect that to be March of 2027. So, first quarter 2027 on that Midlake Road sidewalk. If you remember, we've got a surface transportation grant that was

$5.8 million for that project. We expect to have the municipal agreement to city council for consideration in July of 2026. Uh preliminary engineering to begin in the first part of 2027. right ofway um second quarter of 2029. I know that's two years from the time frame that we first started, but again, you can imagine when you've got design work and you're trying to get to rightway phases, it does take time to get that uh utility relocation, we expect that to be uh April of 2031 and then the let date is uh December of 2031. And that again is the Midlake Road sidewalk project that we don't currently have agreements on yet, but we hope to have a little bit later uh or at the beginning of our fiscal year. Beth Page Road sidewalk is very similar to uh Little Texas Road. We've been working on that one for a while. Um we anticipate right away to be complete soon on that. Uh probably we I think we're looking at uh February uh of 2027. utility relocation will begin on March 2027 with that work to be complete in September of 2027 and then a let date of November of 2027. The last thing that I'd like to mention as a part of my report is we had a meeting this past uh weekend uh with the Fiser Town community with Richard talking about annexation. Uh, Councilwoman Dixon and I uh, attended a meeting there and heard from the community about their continued desires and interest in being in the city limits of Canapapolis. Answered many of the questions that Richards talked about relative to utilities services that they would uh, receive as being a part of a city resident in Canapapolis. So, it was really well attended. Uh, and I think there's some continued and renewed interest in the community about being Canapapolis residents. And that's all I have. Mayor

Okay. I first want to thank everyone that spoke today and expressed their concerns. I just want to try to clarify a point with East Side Park. And uh Mr. City Manager, please correct me if I'm wrong. Um but we did not say no to the East Side Park. We just said not right now. Yes, we did receive federal funding for $500,000, but to build the park was going to cost us about $6 million on top of the annual operation cost, which is estimated at $300,000 a year. That means the 500,000 is less than 10% of the overall co cost. We love our parks. We want to continue to provide these amenities to our residents, but at this moment, there are other critical areas that need our focus, like some you heard tonight and public safety. We need to make sure our fire and police are taken care of so they can provide you all the highest level of safety you all need. We did not say no to the park. We just said not right now even though some individuals may be spreading information without the full context. That's all I have to say.

Yeah. I just want to clarify too um Mr. Melton, I know a couple of city councils ago we did have the where we talked about the historical society with the Wells Fargo and well not the historical society but having the historical place with Wells Fargo and I know there was some budget numbers in there. Um but like we discussed I just want the public to hear that that did not mean that's how much it would cost. Like that $2 million is not how much that is going to cost. Is that correct? That is correct. That's money that we had allocated for uh the purpose. The building again is in relatively good shape. So in addition to that, we're also looking at grant opportunities, working with some others so we can help offset that cost, but that does not reflect that that's what it will cost. We we have that available should we need it.

Okay. Just want to make sure that was clear for everyone. And um also too there we talked about transportation. I remind me if I'm wrong, but we talked about transportation both days of our retreat that was public like Mr. Goodman was there. Um, so those meeting notes are available for anyone if you guys want where we stood with transportation. Um, as most people know when we have to deal with an attorney because of contract we have to go into close session. So, um, other than that, the rest of it was very transparent. I do want to thank a couple of people, a couple of our departments though. I had the pleasure of riding along with their fire department on Saturday. I just was very impressed with the care that they give to our community. But more than that, I also thankful for the dispatchers that we had here earlier and I'm looking forward to spending some time with them this week because uh without dispatchers, the firemen wouldn't know where to go. So, it was good to have them here tonight. And honestly, it the best part of it is knowing that when our residents are truly having their worst day, we have the best in Canapapolis to answer the call, to be the call, to answer their questions. And then when I saw the care that the firemen gave to each of the people that they reached out to, it was amazing. So, we are in good hands and canapples and I'm thankful for that for our residents. Thank you.

Uh yes, thank you so much. Uh recently, um Councilwoman Hatcher and I had the distinct privilege of of sitting in on the CAPTA reertification for the Canapapolis Parks and Wreck. And the two words that just resonate continue to resonate with me is that Canapapolis met the co gold standard that they were stellar in their operation. In their uh there are 10 standards that uh each parks and wreck uh commission is to um hold that they're held accountable for. And I just uh pencil a few of them. their human resources, their onboarding of staff and support of staff, their financial management, their land use, their uh unique activities and programs, their environmental impact. Um and they specifically uh mentioned the um gym theater as being a jewel for our city and that the um their connections with uh Gary Mills and his staff was outstanding. And so I just want to say Gary's not here, but I see a member of his staff that is here to let you know that that I really enjoyed hearing the report of the uh accreditate reacreditation uh commission. And I I think um Councilwoman Hatcher would agree with me that just hearing um the way that the our parks and wreck is um operated that we are definitely to be proud of Gary and his staff.

I miss Barry. Okay. Motion to enter into close session pursuant to NCGS 143 31811 A3 to consult with an attorney in order to preserve the attorney client privilege. Is there a second? Mr. Payne, all in favor, please raise your hand. We are now in session. Thank you for coming.