Board of Commissioners - Regular Meeting

Commissioner's regular meeting is now called to order. I do ask that you turn off all cell phones and devices and please keep the inside of our conversations to the minimum. Um I will begin with our invocation and pledge of allegiance by Bishop Viggers. Please stand and join us if you choose to. Good evening everyone. Good evening. Such an honor and privilege to come to serve you tonight and to offer a prayer on behalf of our community of our nation and for each other such an essential part of life. I want to thank the mayor and everyone for inviting me, giving me this opportunity again to pray with you and for you. Let us pray now. Father, in the name of Jesus, we thank you, God, for being so merciful towards us. You're always providing for our needs, our desires, even our wants. We thank you today, God, that we are redeemed. Father God, we thank you for your saving grace. Father, we just ask you now, God, holy, for your blessing, God, upon this community, upon our leaders, God, we thank you now, God, for the leadership that you have put in place, Father God, of the mayor and our team, God, of committee, God, of council. We bless your name for their lives, God, and all that they contribute, God. to enhance living our community, our safety, our wellbeing. So we thank declare that this

evening. We ask now, Father, that you would remember those that are sick, Lord God, that you will continue to heal and deliver. We especially look up to you our homeless population. And we ask you now, God, for the provisions, God, to meet their needs, God, you know what the weather is like. Oh, we just want to give you thanks this evening. We want to take a pause out to tell you how wonderful you are to us. Oh God, we pray for those that are grieved in heavy heart. Be the lifter of their heads, God. Bind up everyone. We just love you, God. You always take care of us. We too give you glory and we give you honor. In Jesus name we do praise. Amen.

Amen. Amen. Aliance to the flag of the United States of America and to the stands. One nation under God, indivisible, with liberty and justice for all. Thank you so much.

Once again, it is extra lovely to see our boardroom filled and that we're pulling out additional seats. So, I know we have a bunch of special guests in the audience today, but I highly encourage you to not let this be your last time attending these meetings. This is your community and we need you to be involved. We can't make all the decisions alone. Although we are residents, we can't do it alone. We need you. We need your participation. So, let's continue to keep this boardroom built. All right. So I will move on to agenda item three additions or deletions or excuse me and deletions to the agenda. I move to amend the agenda to add a close section for personnel pursuant to NCGS 143-3181 A6 that will become a new business agenda item D and everything else we I'm sorry we'll do we'll make the agenda item Jende

thank you appreciate the Well, as I like to add a discussion item for public comment. uh so we can discuss it to let the citizens know. We hadn't talked about it, but I think that for that public comment, we need to do something about it to let our citizens know when they come up that we need to get back with them to let them know that we're looking into their concerns. This will be another agenda item for new bases and we will do that. Let's make that one B and then move everything. No, I won't. Let's make that one agenda item A and everything else will follow the financial discussion A and everything else. So it'll be under 8A will be discussion regarding close or excuse me public comments.

Are there any other additions or deletions to the agenda? Hearing none, I'll move on to approval of the agenda. I make a motion that we approve the agenda with two additions. Second, commission Thompson. I second. Any discussion? All in favor?

All in favor? We did use our hands. It's kind of helpful to see signal. Motion carries. Now I understand a motion to approve the consent items which are the draft minutes of the January 12th, 2026 regular meeting budget amendment BA12 for 2026 and our quarterly reports. The second order for fiscal year 2025 2026. So there any discussion discussion

um needed discussion on budget amendment um 12 fiscal year 26 as well as um for the report looks fine but the budget amendment 12 is a question a discussion about it just the budget amendment. You want to do it now when we

I'm not sure um if I'm doing this correctly, but for the draft minutes of January 12, 2026, I want to make a motion not to approve.

I Right. You don't want to approve the minutes for the January 20 or for January 12th? No. No. Okay. So, let's start with uh Mayor Bend's. Now, did you want to move that to discussion? Take it out of consent items and move it to a discussion item.

Yeah. Well, I don't want it to be approved because I'm not going to approve it. I'm not understanding the budget amendment. And there was some concerns uh about the dollar amount that's on here. I mean, to just not approve it and then come back and discuss it at another time. We're during a work session. What I can do is I can remove it from um the consent items. Okay. Thank you. And we will um Okay. Just another page. Okay. One.

So wait a minute. Let me finish with Okay. So yes, if you can just remove item eight and then we could come back and discuss it in more detail. Thank you. So, we're going to remove the draft amendments for discussion at a later time. Yes. And we're going to move the court or the budget amendment to new business for discussion tonight.

Right. Motion or restate it with the addition. So um we will for the budget amendment we will move back to do a lot of scratching on this one. So we'll make that an agenda item B 8 is the budget amendment discuss the discussion for VA2 FY2026 and remove um the draft. So we'll only be approving other items our quarter moving forward.

So I will withdraw my previous motions and then I will move for said um corrections. Second. Any discussion? All in favor? Oh, too much here. I don't miss Jackson. I I can't lead up. I can't see you and I can't distinguish. Are you in favor?

Yes, I am. I I wanted to comment on that. I'm not exactly sure with us raising our hands if that is appropriate for the statues and stuff. So, I would suggest that just in case until we can find out and make sure we're doing things in decent order that everybody may just move your mics closer to you and speak into the mic. There's no problem. All right. Motion carried. Did you?

We'll now move on to our public comments. Please limit your remarks to three minutes. The board of commissioners will not reply to questions taken during this time. Um, a followup will be presented to you at a later date. We'll begin with Miss Aiana Washington. Is this introduction a little peace and blessings y'all name again Washington? I do I have to say my address? Okay, I live but um I'm 26. I'm a spring native and I really just wanted to introduce my business. I have a personal chef business called a social supplers. Um I cater personal and corporate events. I have personal chef events where I do date nights or meal preps to families that need them. Um I also have an organization called a sustains that I'm doing. It's short for a community sustain. Last year we were able to partner with Thomas Green Lake for their fall festival and I was able to feed the community for free. We were able to 80 85 people thanks to support from donors. This year we're trying to take it up a couple notches, not one notch, a couple. We're working a partnership to start a community garden here in K County and we're looking for support. So whether you're able to sew a seed into this mission to help bridge this gap of food insecurity that is plaging our community right now. Um or you're looking to volunteer to upcoming events. I just want to introduce them. I have some cards if anybody wants to talk. Could you read your cards with our clerk, please?

Absolutely. Thank you. Thank

good evening my dear. Good evening to all of you. All of you. I'm happy to Valentine Day. But anyway, know my name. My name is Debbie Sanders and I would like to say that have a few things that I need to find out why we're not doing and I'm sure that you will get back with me on it. Thank you is the voting. Why are we going to bed to vote? Why don't we have a place over here in Spring Lake? I've been living in Spring Lake ever since um 95 and I haven't had to go to bed. you all that focus over here in Spring Lake. So, we need to get that taken care of. The other thing is we have a lot of homeless people here and we have a lot of things that's going on. People are building houses and apartments and stuff like that and they say it's supposed to be for low income, but I don't think so because I checked some of the prices and people are renting houses for 117 and all like that. You got people that are on on fixed income that cannot afford that. So what are they doing walking the streets and I think we need to do something about it. Okay. Um the other thing is we have the Kinsey house. I would like for us to support Keny house because that is something that they have been helping to do with the people here that comes in homeless people that don't have food don't have clothes you know things like that. You'd be surprised the people that live in their cars and they don't have anywhere to stay because the rent is so high in the houses, the apartments that are over on Chapel Hill Road. How much are they?

I don't see anybody moving in there. You got for lease and then you got for rent. I thought those houses, those apartments were supposed to be for low income. And if it's supposed to be for low income, that's what it needs to be. So that people that have fixed income should be able to move in those houses. And I'll let that one minute go to somebody else. You're welcome. We will now move on to our presentations. Uh beginning with our Black History Month proclamation. There we go. Sorry. And I will read this Black History Month proclamation. Uh whereas Black History Month is observed annually in February to recognize, honor, and celebrate the rich history, culture, and enduring contributions of African-Americans to the social, economic, political, educational, and cultural development of the United States. And whereas African-Americans have played a vital role in shaping the history and progress of North Carolina and the town of Spring Lake, demonstrating resilience, leadership, and excellence in the face of historic and ongoing challenges. And whereas the observance of Black History Month provides an opportunity for all residents to reflect upon the struggles for justice and equality to acknowledge achievements too often overlooked and to promote greater promote greater understanding, unity, and respect among all people. And whereas celebrating Black History Month strengthens our community by honoring diversity, encouraging civic engagement, and inspiring future generations to work towards a more inclusive and equitable society. And whereas the town of Spring Lake is committed to fostering a welcoming community that values the contributions of all residents and

recognizes that diversity is a source of strength and pride. Now therefore we proclaimed by the town of Spring Lake Board of Commissioners that the month of February 2026 is hereby recognized that as Black History Month in the month or town of Spring Lake it further proclaimed that the board of commissioners include encourages all residents, schools, civic organizations and businesses to observe this month through educational programs, community events and activities that celebrate African-American history, culture and achievements adopted this 26th day of January 2026. I don't have to stress any importance because I'm sure everyone here understands the magnitude of that proclamation. So now we get to go to the fun stuff, my favorite parts of our board meeting, and we get to do some certificates of recognition for some of our star athletes um in the town of Spring Lake. So, I've got a bunch of them here. Um, and we've got our volleyball championship winners, the Spring Lake Vipers. If you can stand up, tell me where our Spring Lake Vipers.

Can we get our Vipers here? Our Vipers. But what we will celebrate by Viper by acknowledging Gabriel Barton, Audrey Khis, Urelli Colon Green, Scarlet Gross, Abigail Myra, Elizabeth Saias, Joel Saias, and Madison Williams. Give them a round of applause. And we also have some soccer superstars in the building. We got soccer superstars here.

Some soccer superstars. Can you please stand? Our soccer superstars. When I call your name, you can come up and get your certificate in line by the flag. We're going to take some pictures. So we've got Kase Dodd, Cole Conjurs, Marcus Arcade Jr. K. Townsen, Ian Sanchez, Singleton Prince, Emmanuel Peg, Pegasus,

by the flag. Come on. That's okay. Alias Hodson Hodson Clifton Hackett Marquan Johnson Knight Jr.

Jalisa Livingston and Gideon Marshall. Congratulations. Thank you. And I've got Congratulations. Congratulations. Congratulations. Congratulations. Congratulations. Congratulations. I do remember you. Everybody can see everybody. Yes, ma'am. One, two, three.

parent. We got a bunch of parents.

Y'all can get closer if you want.

Get pizza. Awesome. Congratulations Let me get my

I promise you guys make this job worthwhile to know something for you. It makes it all better. Um so we will now move on to new business and we'll go with 8A discussion regarding public comments. Yes ma'am. Thank you

for several years for um with the public comments. I'm just accustomed if a citizen comes up with a public comment and a concern that we get back with them letting them know that we have taken their uh concern in consideration and looking into it. And I think that we need to send a letter out to them to let them know that we have discussed it and their concerns is very important. I work for the citizen of his great town of Spring Lake. as well as all our employees and we wouldn't have a job if the taxpayers and we didn't get back with them. So, it's very important to me as a board member that we take your concerns and considerations and it's very important that we let you know that we're concerned about your concern and we're going to look into it and not just leave it as it is as it's been stated. Um, Regina Zadu was the last one on the 12th to speak asking the same question. Why is it that we never get back with the citizens when they get up with their concerns? So, I think, uh, as a board, um, we need to take that in consideration to at least get a letter out to them and look into their concerns because they're very important. discussion. We will move on to agenda item 8B and this is discussion regarding budget amendment VA12 FY 2026.

Oh, I'm sorry. No, you took the draft off. Sorry about that. You're fine. May present.

Thank you. Um the budget amendment 12B, it was on the um January 12th as well. But looking over, it's for the grant for Cullen County Arts. It was $4,000. Looks like they gave to him. But when I look at the budget amendment, so if we can understand it a little bit more, it look like it's saying here that $7,000 need to come from the budget.

Yes. Areas. And um then if you go over here and you see the amended budget, which is $11,000. go for some explanations because this is not enough for me to kind of understand besides I know the front page states that u they awarded them with a grant of 4,000.

Okay. Each year the Arts Council gives us a grant of $4,000. That grant of $4,000 that they give us every year has already been included in the original budget this year. A few weeks ago, they gave us an additional grant of $7,000. Now, Jones statutes require that all money that we receive and spend has to be budgeted. The $7,000 additional grant, which we did not anticipate, was not included in the original budget because we didn't know we were going to get it. So, we are increasing that uh grant from the arts council from 4,000. add seven that makes it 11,000 all in revenue. In our expenses, we had 10,000 in our parks and wreck department, which is this is the only thing in parks and wreck because uh faithful Cumberland County has taken over parks and wreck. Well, this and the debt service on the wreck building are the only thing in parks and wreck. We had 10,000 already budgeted that we spent. That was the 4,000 grant this year plus the money we had left over from last year. And then we're appropriating the $7,000. Um so that'll bring our expenses to $17,000. Uh it is yet to be decided what you're going to spend the $7,000 on.

Yeah. That is for the whatever committee does that or for you ladies and gentlemen to decide. But before we spend any of it, we have to budget it. And so we're just adding that grant to the original budget and then you can decide how you wish to spend it uh whenever you get around to it. Okay. This item is uh for approval and it's only stating that the approval is for the 4,000. No ma'am the approval is for the 75000 and the 7,000

but we don't have we don't have any documentation stating that they had gave it to us because you said you didn't know that we was going to receive it. I have a copy of to check in my office and the grant and the grant agreement. Uh they're giving us an extra $7,000. That's what's being approved. The 4,000 has already been approved

right on the 12th. Okay. I just didn't see any documentation in here. Um the 4,000 was already approve approved on the 12th and then I seen the 7,000. didn't really know what it was coming from because the way this is printed and I think for clarification so we would know a little bit more then we should kind of put that in there as well have a doc in here so I wouldn't have had to ask that but thank you Mr. Jackson, you said the $10,200 was for the recreation center.

No, ma'am. That is for uh a mural or or whatever. We got some donations last year for the mural plus the payable Arts Council grant. We spent that money on the mural over here. The um over here, I forget the name of the building. Time.

Stitching time. The mural there. we had money left over from that grant and all of those donations uh that the dentist uh raised for us. So that plus the 4,000 grant and the money left over from last year, that's the 10,000 that we have already in the budget for this year. We're adding another $7,000 to it for this new grant. So um and please forgive me if I'm asking something crazy, but so the 10,000 the $10,000 came from donations from the grant and and donations and donations. You don't break that down on the budget so you can see exactly how much came where and where it came from to add it up or you just

the donations were in last year's budget now, not this year. This is just the amount carried over and and then plus the 4,000 we've already received for this year. Uh this grant they've written us a check for $5,600. uh out of this $7,000 they will pay us the remaining uh $1,400 when whatever project you approved is completed. I thought you said you had a check in I have a check for 5600 I have a check for $5,600. Oh

okay the grants are even seven but they withhold the the balance until the project is finished. So on the budget then, and again, forgive me, why why aren't the numbers broke down so we can actually see, what is going where, how much is here, how much is there? Uh not to say we don't trust you or anything, but just saying how come it's not broken down. Well, first off, you have not approved what you're going to spend it on, so I don't know what you're going to spend it on yet. You don't have a breakdown of how it comes in. It's a check. I just told you it's a check for 5,600 and then they give it another check for 1,400. We just finished.

You also said donations too. I don't see the word donation on here. How many how much donation we receive? Because I'm not amending the donations. The donations were received in last year's budget, not this year's budget. Yeah, I'm I'm sorry I asked questions. I'm sorry if I offended you. Are there any other questions? Thank you, Mr. Overton. Yes. I recommend that we approve the budget amendment and then you can decide how we spend the money uh to improve the looks of the town.

So, now that we've had our questions answered, can we go ahead and approve the budget amendment? I don't know. We're just literally No, I'm saying I'm saying go ahead. Go ahead.

I just want to make sure that you understand what we're doing. We got the money. This is just so that we can figure out what we're going to do with it. So there isn't a breakdown yet cuz all we got every year they give us the $4,000. They spontaneously increase it. And so we don't have all we this is us pretty much just saying yes we're accepting the check from the arts council so that it can go into the budget and then whenever we decide to spend it that's when you the arts council gave 4,000 already which was approved. We're talking about the the money now he said it was in his office the 7,000 but then he said it was only 5,000 and he's going to wait on the 14,000. So we can make the motion.

So I'll entertain a motion now to approve budget amendment. um BA12 FY2026. So is there a second? I second. Any discussion? All in favor? Any opposed? Okay, ladies and gentlemen, we can't spend the money. It's just going to send your account at this particular time. We'll revisit it. Budget number 11.

Um, yeah, we're going to move.

We just voted down to not take the money so we can put it in our budget. We just voted down not to take the money now, but we we didn't say we wasn't going to take it. We said we have questions. We have been carry on. We will carry on. All right. Um number eight C. amendment and FY 2026 construction.

Okay. Um several years ago the towns uh there was some property uh in between Spring Lake and Fagatville that was annexed including some streets. So, Spring Lake and Fagatville were entitled to get some additional power bill money because of those streets that were annexed several years ago. Under the interlocal agreement, um the money goes to uh Fagville, but then they give us 30% of it. Okay. So, they've given us a pile reimbursement of $94,000. Okay. for this year. We did not know how much that was until Fable gave us a check. Okay. Um, we have a backhoe in the street department and I'm sorry, the backho is 24 years old. I'm sorry it says 10 years. I picked the wrong backhoe. It's a 24 year old backho that's about to worn out. We have a estimated price of about 136,000 to buy a new back to replace that. And we want to use the pile bill money we've gotten from the city of Fville plus um some money we got from selling some old scrap material and selling some vehicles of 16,000 and take that money to buy a new backho. This backhoe is completely worn out. It's caused a lot of repairs and it's 24 years old. So, we're asking for your approval to spend this money to purchase a newbot to approve budget amendment 10 2026.

Is there a second? I second. Any discussion? Discussion. Mayor.

Thank you. uh looking at the budget amendment which again not enough clarification on the document it's stated here you you clarify was of the state for the 10 years I have highlighted of the repairs it's $7,000 for the back holes I see on the budget amendment 10 where it says power bill reimbursement to 94,800 I go down to the budget amendment and only thing that I can see with no clarification. I see the justification to appropriate the power bill for reimbursement from the city of Fedville and the proceeds from the capital excess for the back hole. And again, if you go down to the next line, it says this will replace the 2016 John Deere black back black backho, which need of 7,000. With me looking over this with no other um numbers of you saying we can use the rest of it, which I don't know what the rest of it is. It should have been documented for accountability purposes. I took the 94,000 took7,000 away from it and the rest of the money that we can use would have been 87,800. I wouldn't have been asking the questions if I would have known that just talking about the rest of the monies and it says the rest of the money's on here as well. So that's a little confusing to me as well besides you getting up just explaining it because when I was going through the documents of the budget and then looking at the um the amendment we had the 7,000 which have no problem purging that just

trying to make sure the money is uh accounted for in a proper manner that we can understand and know what we're proving. Is that a question? That was a concern. My question was the 7,000 here. I I asked a question. You missed it. Well, if you look at the budget amendment, it's not talking about the rest of the money that he just talked about, which is the 87,800. He said he made a mistake with the years.

But only thing that I have here that you want us to approve, it says the 7,000 here and it says request for action is approval, but it's not telling me anything about where the other monies is. Ma'am, I will do my best to answer your question. The 7,000 is the estimated cost to repair the old backup. Exactly. That's what it says.

Okay. The old backup. Okay. All right. The old backho, the correct one is is 24 years old. That 2016 backhoe was a backhoe in another department. I apologize for that error. Okay. Where the money's coming from, 94,000 from the city of Fville. We received $2,000 from selling some sprout material.

We we sold three vehicles last month. We got 16,500 for the sale of those old vehicles. and we all right that comes to 94 and 16 is 110 + 2 is 112 so I need 23,000 more from fund balance to make up the difference those numbers add to 137,000 of revenue additional revenue that we received plus fund balance program graded of 23,000 that's 137 the estimated cost of the new backho is about 136,000 I rounded it up to the nearest thousand because I always round my budget amendments up so that make sure they're there adequate. Okay, that is where the money is coming from from those additional revenues and 23,000 from fund balance. Okay, the 94,800 I don't have anything for how much that back hole is going to cost. I don't have any documents. So that's why I'm asking. Only thing I have is the 7,000. So that's what I had to go by when I was trying to figure this up. But then you just stated, but I don't have anything that it's going to the back hole is going to cost how much? About 136,000. I've got the exact quote in my office.

Once we decide what we're going to do with the rest of the money, you say it's up to us, but definitely the recommendation. The recommendation is to replace 24 year. The recommendation is to replace a 24y old worn out backhoe with a new one using the money that we have received.

What are we going to do with the old? I would my recommendation would be to declare it a surplus and get rid of it and sell it for whatever you can get for it. That's typically what's done when we decommission a vehicle. We place an ongo and try and sell it. Are there any other questions? All in favor? Any opposed? We we are voting against taking money

at this particular time. We are at what time do we take it then? This is ma'am I got a right to vote the way I feel like I absolutely do and I'm not going to have a discussion and debate with you and I don't think that's a discussion or a debate. I have to make sure that the public is aware that right now we're going to speak from well you cut me off and I don't know why you keep cutting me off. I didn't but I want make to make sure the public is aware that we are now twice voting against money that we have received

already. We'll move on to our next agenda item which is my license. So, Commissioner Jackson,

um just want the community to know that we are not voting to not protect the money. We're voting because it's not specified on the documents, how the money is being spent. We've had problems with the money before with LGC and everybody else not knowing what's going on. And when you approve a budget amendment, you're just not approving numbers. You're approving where they're going. And since it's the town's money, we would like to know where it's going. So the to rectify the problem is do the budget amendment over and put every dime where it's supposed to go where it's supposed to go. That's all we're doing

and we're going to revisit that another time. We're not we're not denying Commissioner Cooper. Thank you. Um so we we decided that we would get the agenda a day earlier than normal and in that time is when you to ask for additional documentation if you have questions. That is the reason why we get our agenda early so that if we have questions or want more information, we can ask for it to be added to the agenda before we get to the meeting. So I would hope going forward if there's documents that you want added if they ask that they be added so we can move forward with the business of the day cuz that's why we asked for the the information early. Thank you. I understand that cuz that's what I requested so we can get it ahead of time so no one is printing stuff to say that we said something that we didn't say. Uh so I can compare with that but at this particular time Miss Sutherland has made I've already voted not given any money back clarification we can revisit it. We call special meetings and no one wanted to show up for the special meeting.

This is we're going to we're going to move on. Thank you. Uh agenda item 8 C budget amendment B1. Mr. over.

Okay. We have approximately 4,000 water and sewer customers within the town. I actually have about 4,500, but about 500 of those are inactive now because the apartments or homes are vacant. So, we have about 4,000 meters. A water meter will last about 10 years. In order to replace water meters, we need to replace about 400 every year so that we can replace all 4,000 of them in a 10year period before they wear out. As meters get old, they have uh sand and grit and silt that gets in the meter and slows the meter down and it doesn't record accurately. We have a lot of old meters. We've already spent 225,000 this year replacing meters. I talked to Mr. Renee last week. Uh we have two boxes of meters left. There's only six in each box. So we have 12 meters left to replace any broken or worn out meters. We're asking for a budget amendment of 160,000 to replace the additional uh 400 additional 400 meters. So that the meters and the cost about 400 each times 400 that's 160,000. Uh the revenue we used to pay for that. Uh we increased the rates at uh for um outside customers at uh overs they were paying less than uh what our out other outside rate customers were paying. We've increased their rates to the same as all the other outside customers. That's brought in an additional 124,000 revenue uh for this year. Uh bulk water, we also uh raise the rate of bulk water.

They were paying less than what uh the town was buying the water from um payable PWC. So we increased their rates. That's bringing in an additional 20,000 in revenue. Plus we've had a few new customers who have gone water and sewer taps 4,000 and 5,000. and we sold another vehicle in the water fund for 6,600. So, we're taking that 160,000 of additional revenue and requesting that we use it to buy 400 and replace 400 old meters at a cost of about $400 each. And we only have a dozen meters left as of last week. Yes, ma'am. Thank you very much. Um, Mr. Oakton, for clarification for the citizen as well as a new board member, uh, 400. How many new uh, when I served on the board prior, we started getting those new meters. I do believe we need new meters for they can be average and caring since the water bills are so high. Uh, so how many new meters do we still need in the town of Spring Lake?

I would I don't know have an accurate number. I don't know how many we've actually replaced in the last two years. We've replaced a couple routes. Rory has a more accurate number than I do. Spreadsheet out. you might have available for me. So I can give you by percentage and years of service I don't have available tonight. I'll be glad to share that with you.

Thank you. And for discussion I like to be transparent and to know everything that we're doing. Uh this document says for a request for just for information only. So if the next time it's rung back um then we will know as well as the citizens will know. Um Is there any other discussion? I'll not entertain a motion to approve BA1 FY2026. So move second. Any discussion? All in favor? Any opposed? motion here. We'll now move on to agenda item AB, financial statements ending FY June 30th, 2021, 2022, and 2023. Mr. Okay, ladies and gentlemen, we're now will try to present to you our unodudited financial statements for fiscal years 20, 22 and 23. Um these statements are not audited. Uh they were prepared by myself. Uh I am a certified public accountant. I have been an auditor for and government finance officer for 45 years. Um, but I cannot audit my own work. I'm not allowed by standards to audit my own work. So that's why these are unaudited. Okay. Now, a lot of these slides are written in accounting jargon, which is a

foreign language to most people. I will do my best to translate it into English. Okay. All right. Now, the status of our current audits. Our last audit was completed for the fiscal year ended June 30th, 2020. It was completed on March 31st, 2021. Uh it was due in October, so it was uh 5 months late. Okay. The local government commission uh waved the requirement for an audit in 2021. The reason for that is the town's accounting records were in such poor shape that they were not able to be audited. So they basically said we're not going to require audit for that year. Okay. Uh they awarded a contract to Cherry Beckard and Holland to complete the 22 audit. Um my last communication with Cherry Becker, they said they would have the audit report maybe by the middle of this month. That's probably not going to happen. So hopefully we will have it by the by February 28th. Uh few months ago we awarded a contract to audit uh 23, four and five to Carl Rigs in England uh CPAs out of Goldberg. Um they were low they were low bid. Um we sent it out to uh five different CPA firms. We got three bids back. Car rigs in England. It was the low bid and they are well qualified. Okay. All right. Now I'm going to tell you now the types of opinions we make that you can get on an audit. Uh usually what you get is an unmod unmodified or clean opinion. That means that the financial statements are fairly presented in all material respects that there are no material errors in the financial statements.

That is the opinion that you want. That's called a clean opinion. A modified opinion are financial statements that are fairly presented except for certain items that may not be correct. And an example of that is probably going to be Spring Lake Property Acquisition, which I'll get into more detail later. An adverse opinion. An adverse opinion means the financial statements are not right. That there are material errors in the statements. So therefore the auditors are saying that these statements are not correct. A disclaimer of opinion. This is the reason we didn't have a audit require audit requirement for 2021. The books were in such bad shape that they were not able to be audited. So the auditor can't form an opinion. So they disclaim an opinion. Okay. Um there is a a misconception among the public that if financial statements are audited that they are correct. That is not true and it never has been. Okay. Um what it what the auditor is required to do is to study your internal control and make recommendations on improvement and then audit your financial statements and make them as close as they can get them so that they are fairly presented that they're not misleading. It doesn't mean they're correct. It means they're close to correct. Okay. uh the auditors what they do is they do not test all transactions. They don't have time to test everything. So they test uh a sample of transactions and material account balances and confirm those and and then they test your internal control. They try to achieve a take a statistical sample to achieve an

assurance rate of 95% that the account balances and the transactions are recorded correctly. That means there's a possibility of 5% that they're incorrect. But they as long as they can get that 95% satisfaction, they can still give you a clean or unmodified opinion. So it's not accurate, but completely accurate, but it's very close. Okay. Uh there's a thing called a component unit. Uh we have one component unit that is spring lake property acquisitions. There are two types of component units. A discreetly presented component unit is a separate legal entity that is shown in a separate column from the uh primary government. It's not included in the government's total. It's in a separate column all to itself. In that case, the primary government may have some control but not complete control over the component unit. Uh they do have to have more than 50% control. Uh and the primary government may provide some funding to the organization but not all of the funding. They're not completely finished. Examples of that, the Cumberland County ABC board. It is a component unit of the county but the county appoints some of its board members but it doesn't have complete control. Also the county does not provide the revenue to the ABC board. Their revenue comes from the sale of liquor. They're required to give that money back to the county. Whatever profit they make after their expenses. Another example would be the economic development commission. uh it is uh controlled somewhat by the county and somewhat by the city of Fagville in that they receive money from each organization and each organization appoints board members but neither neither organization

has complete control. A blended component unit that is Spring Lake property acquisitions that in that case the primary government the town of Spring Lake has complete control of the organization. They appoint uh all of the board members. Those uh officers are employed were employees of the town. The uh Spring Lake Property Act petition acted under the direction of the town and its only source of revenue was contributions from the town. They had no funding of their own. So they were completely dependent upon the town. when when they are completely dependent and controlled by a town, that's a blended component unit. To make that simpler, the primary government, the town, that's the parent. The the blended component unit, that's the child. The discreetly presented component unit, that's the stepchild because it's controlled by you and the other parent. All right. Before we could begin working on these financial statements for 21, 22, and 23, we had to make some significant corrections to fiscal year 20. These are called prior period adjustments. These are some of the corrections that we made. In the general fund, we actually increased the general fund by 200,000 272,000. We decreased all of the other funds by the prior period adjustments. And then there was one other priority adjustment I discovered in 2022. What that was that in 2014 the town barred obedient five to make street repairs and they spent that money in 2014. They had $120,000 left in a bank account. They closed that account

in 2014 and transferred the money to the general fund. However, that transfer was not recorded in the street capital project fund for seven years. Nobody recorded it. So, that's a correction that had to be made. Uh, and you see the fund balance is restated. Uh, other prior period adjustments, the town is is exempt from sales tax. We don't we have to pay sales tax in the year we can get it back. Uh dur during those years, the town did not file form E85 with the Department of Revenue for 5 years to request a refund of the sales tax. Greg Eley and his employees file those returns. However, uh they were 5 years uh back returns. The return each form request for refund is due in December at the end of six months after the end of the year. However, the Department of Revenue will still give you the money up to three years late, but since they hadn't filed it in five years, two years, we did not get our sales tax refund for 2015 and 16. So, we lost by not filing those returns at almost $93,000 in sales tax refunds. Okay. Uh the previous auditor, like I said, they looked at some transactions, not all. Uh there were a bunch of small miscellaneous accounts receivable that had not been updated in several years. Some had been updated since 2014. Uh one of those old receivables, the wastewater treatment plant used to accept septic tank waste from the companies that pump out septic tanks. They discontinued that service in January of 2021. We had 13,000 accounts receivable from those septic tank haulers still on the

books. It's still there now. Well, it's not now, but we wrote it off cuz we'll never collect that. It's 5 years old. Okay. Um, see, the taxes receivable that were collected by the county in June uh and then remitted to us in July were also not reported in 21. uh acred salaries, that's the salaries we owe at the end of the year for the days from the last payroll to the end of the month. They had not been uh updated since 2018, so they were two years behind. We had several capital project funds, pro capital projects that had been completed and finished, but the assets that were built were still in construction and progress. They had not been transferred to fixed assets. no depreciation had been calculated on it. Um and so we had to transfer that um and calculate that depreciation. That was several hundred,000 adjustment. Um few years ago, the Department of Transportation widened Fort Bragg. In order to do that, they relocated the town's water and sewer lines along Fort Bragg Boulevard. Okay. at a cost of 633,000. The town had to reimburse them over a period of 3 years. We had to pay them 211,000 each year for 3 years uh ending in 21. That was the last payment. Uh, the water lines were not recorded. The debt was not recorded. The depreciation on the water lines were not reported. And the $200,000 payment that we made each year was posted to repairs and maintenance instead of debt service only note, which hadn't been recorded. That

was another adjustment. uh in fiscal year 2023 uh they did not file a solid waste materials management report which is due every year. It's a report to the department of environmental quality of the amount of garbage tonnage that you collected and put in the land deal. That's due every year. If you don't file a report, then you don't get your solid waste tax next year. So, we lost $9,000 by not filing that report. Okay. And then I already mentioned the 120,000 and 22 that was still sitting on the books that had been transferred six years earlier. Also in 21, if you look on page 60 and 61 of your 21 report, um you had three funds with deficit fund balance, then you don't have that report in front of you. You know, you don't have it right now. It's a huge 200page report. Um,

but we had three funds. All right.

We had three funds in fiscal year 21 that had deficit fund balances. The spring cleaning fund had a negative $3,951. The recreation capital project that had been completed had a negative 144,000. A water and sewer capital project that had also been completed had a 543,000. General statutes require that in next year's budget you appropriate money to eliminate any funds with deficit balance. That was not done until 2023. Okay. And there are the prior period adjustments for the water uh for the governmental activities and business activities. I'll get to that in a minute. You can see a whole list of all these prior period adjustments on pages 99 and 100 of the 2021 statements. Okay. Governmental activities. Governmental activities include the general fund, the Spring Lake Property Acquisition Fund, the American Rescue Plan Grant, and all of our little non- major funds. They're all included and combined into what's called the governmental activities in exhibit one of your financial statements. If you look and see at um 2021, your net position or your fund balance or your deficit was 1.5 million in the hole. Now the problem is that's the total fund balance or deficit was was 1.5 million. That includes your investment in capital assets. Investment in capital assets is the value or cost of your land, building, equipment minus the depreciation and the debt. That's 2.8 million. That 2.8 million is the value of equipment and buildings. It's not

cash. You can't spend it. So when you take that out, um, that reduces your cash. Also, we had 2.8 million of restricted money. Restricted money is your accounts receivable reserved by state statute. You cannot spend that until you actually collect it. So that's restricted. You also have restrictions for power bill. Your power bill money can be spent but can only be spent on street repairs. It can't be spent on anything else. We had uh grant money from the county to pay the debt service on the fire station. Uh that's also restricted. it has to be spent on the debt for the fire station. And we had uh the USDA requires you to put in a savings account uh an amount equal to one year's payment on your debt owed to US Department of Agriculture. So that's the 2.8 billion restricted. When you take those two out, your unrestricted fund balance, the amount you can spend any way you choose in 2021 was 7,261,000 in the hole. that your cash deficit uh of unrest of money that you can spend any way you want. You see again it was 7.2 million in 22. It's reduced to 4.7 million in 23. You see finally in 23 the total fund balance is finally positive at 2.7 million. All right. This is your income statement for your governmental activities. In 2020, the town had a net loss in the middle of the page of 1.6 million. Just so you know, any numbers in here that are in brackets or in red, they're bad. Okay. In 2021, the town had a loss of $1 million.

In 22, uh, under the control of the LGC, they cut expenses drastically and turned it around. We had a profit of of 926,000. In 2023, uh, our net income was 3.4 million, but there was one exception here. If you look at the grant, the line item grants, you will see as 2023, it was 4.5 million. That's way up from the previous years because that is the year we received the American Rescue Plan grant from the US Treasury of 3.8 million. Had we not received that 3.8 million grant in 23, that loss would have been 300,000 negative instead of 3.4 million to the good. All right, your business activities. These are the uh services that you charge customers for that they pay a fee. That includes the water and sewer fund, the sanitation fund, and the uh storm water fund. This is all of those funds combined. Okay? And you see there the the business activities are in a lot better shape. The net position in 20 was $7,975. It improved to 11,000 over the 3-year period. It's 11,084. Okay. However, this is your income statement uh for your business activities. You have a net loss in 2020 of 216,000 172,021 uh because they increased the rates when the local government commission took over and they cut some expenses. income

increased to 1.2 million in 2022. In 2023, our net income was just a little over 2 million. But also look at the line out of inter fund transfers. In all the other years, the water and sewer and sanitation storm water were transferring money to the general fund to cover their share of overhead. In this year, they got 1.4 4 million transferred to the water, sewer, sanitation, and storm water fund from the American Rescue Plan. So that's a one that American Rescue Plan is a one-time grant. You only get it once, we'll never get it again. So that is why 2023 looks so much better. That one time grant that we won't receive again. Here's your general fund by itself. You see the fund balance in the general fund in 2020 was $631,000. However, there was a million37,000 restricted by state statute. That was your account receivable at uh June 30th, 2020. Also at that time 265 was restricted. That was your unspent power bill funds. Okay. All right. Now at that time in 2021 your total fund balance was 607,000 but your un unassigned fund balance that is the amount that you could spend however you choose that is entirely up to you how you spend it was 1.5 million in the whole 1 1 million 489

uh you had a million 367 7 restricted by state statute your receivables 500,000 power bill funds that had not been spent and 200,000 restricted for debt service for the USDA loan and the fire station loan. Also in 2021 the actual cash in the general fund at that time was $225. That was the petty cash drawer in Rene's water and sewer department that they used to make change for customers. That's all the cash you had in the general fund was $225. Now, if you look on Okay. Also at that time, if you look on page 28 of your audit of your financial statements at that time, um it shows cash, restricted cash in the general fund, $726,000. Well, the problem is they general fund didn't actually have that cash. The general fund had to borrow a million dollars from the water fund to pay its bills. So the only cash they had available was the 225 cash. We had to show an inter fun loan of a million87,000 to take care of the restricted cash and the other expenses uh in the general fund. In 2022 that unassigned fund balance was only 642 in the hole. And then due to the American Rescue Plan grant in 23, it's finally positive at a million 156. All right.

Okay. This slide shows at the end of 23 your fund balance in the general fund. restricted by state statute. Your accounts receivable, you can't spend that because you have to collect it. That was 36% of your total fund balance. Your restricted fund balance, that's the pile, bill, and debt service money that can't be used for anything else, was 30% of the total. Uh to balance the 2024 budget, the town appropriated fund balance of 414,000. That's 9% of your fund balance. And that left 25% or a million 156 that you can spend however you choose. Okay. This is your general fund statement of revenues and expenses. Uh the general fund had a net loss of 1.1 million in 2020. It had a net loss of 297,000 in 21. It had a profit in 222 of a,603. And the reason for that, look at the expenditures line. The second line was over 8 million in 2021. When the LG GC took over, they stopped spending and they cut it down to 5.6 million. So that's the reason the net income went up because they cut out a bunch of spending. Was back up to 7 million spending. and 23 you had a net income of 2,374. But that again that transfer in of 3 million that's the money from the American Rescue Plan that was transferred in plus the money from the other funds for overhead. Remember I told you you had a bunch of capital project funds that had deficit balances in 21. In 23 the general fund had to transfer out a million dollars to cover those three uh funds that had a deficit.

So, um, those are one-time transfers. We won't get American Rescue Plan money again. Hopefully, we won't have to transfer out money to cover deficits again. Okay. Your general fund revenue. Okay. Uh, the numbers here are a little small, but what you see is the blue, the dark blue, that's your property tax. That's 40% of your total revenue. The gray, your state shared revenues, that's the money we receive from the department of revenue. Your sales tax, franchise tax, your beer and wine tax. That's 3.6 million or 46% of your revenue. In most towns, property tax is your number one revenue. Sales tax and franchise tax are usually your second largest revenue. But due to the fact that we have uh a low average home value in Spring Lake, property taxes is our second largest revenue rather than our largest for these for this year. Next year that's going to be really different because uh Cumberland County has switched us from um distributing sales tax on population where we get 2% of the county sales tax to odd because our property values are lower. We only get 1%. So that sales tax revenue is going to be cut in half next year. Well, it's going to be about 54% of what it was in 25. So instead of being 3.6 million, it's probably going to be 1.7 or 1.8, something like that. So that's a huge loss of revenue. Next year, property taxes will be your largest source of revenue. Uh we also received um federal and state

grants of 8% of our revenue and all other revenues combined were only 6%. Our expenses in the general fund, public safety, which is police, fire, and inspections, amounts to 65% of our total expenses. Okay. Uh general government, this includes the governing body, administration, finance, human resources, information, technology, and public buildings, and legal expenses. That amounts to 14% of our expenses. Debt service, the payment on our debt in the general fund is 8% of our expenses. Transportation is 11%. That's the streets and the power wheel money. And then parks and wreck is only 2%. This is for 23. The reason it's only 2%, 23 was the year that we turned over parks and wreck to Fagville and Cumberland County. So our expenses for parks and wrecks went way down that year. economic development that year. That's planning and zoning. Uh we only spent 28,000. So that's close to 0% or less than 1% of our budget. Okay. Next thing, property. This is a schedule of your property tax values and collections for the last four years. In the first three years, your property tax rate was.7. In 2023, it dropped to 65 cents. That's the year that we gave parks and wreck to Cumberland, Fable County, Cumberland and the city of Fable. Uh we reduced the property tax rate by 5 cents, but Cumberland County added a 5 cent recreation tax. So our citizens are still paying.7, but 5 cents is going to Cumberland County and pay it bill instead of us and they're managing our parks and wreck. The only thing left

in parks and wreck now is the payment on the wreck building 131,000 a year and the grant that we received from the arts council. Okay. Um Cumberland County collects our taxes for us and they do a very good job of collecting taxes. They're kind of slow paying us for it, but they do a good job of collecting. um their collection percentage each year is 98 or 99%. So they collect just about all the property taxes for the current year. As of December, they've only collected 75% of this year's property tax levy. Have not received the property tax collection for January yet. So hopefully it'll be up around 90% when we receive January's revenue. But again, it's 99% a year. Uh taxes receivable general statutes allows you to collect taxes for 10 years. After 10 years, you have a statute of limitations. You cannot collect the taxes anymore. Okay? You can't force anybody to pay it after 10 years. Usually the the most recent three years, you will collect most of those. Anything that's outstanding four or more years, you probably will never see. So that's why we have an allowance for bad debts. You see in the current year 47,943 that's the seven oldest years of taxes receivable. The net taxes receivable of 47,000 that's the most recent three years. So um and 1 cent of property tax equals 46,000 only $46,000. So if you raise property taxes by a penny you only get an additional 46,000 revenue. If you cut property taxes by a penny, your revenue only goes down

46,000. The last thing I want you to notice is the first line, the assessed property value. 457 million in 20 and 466 million in 23. That's an increase in 3 years of less than 2%. What that means is the town is not growing. We're not adding new homes. We're not adding new property value and therefore that makes the burden on the existing property owners greater because we're not don't have the growth uh to support u new expenditures. Okay, this is your revenue for the water and sewer fund. You see uh the third line down operating loss. This is operating revenues. That's the money money you charge your water and sewer customers. The expenses, that's the expenses directly associated with providing water and sewers. Operating loss in 2020 was almost 600,000. That means your revenues were short of your expenses by 600,000. In 21 it was only short by 17,000. uh because of rate increases uh we did have a operating income of 594 and 22 and 218 and 23. You see the total was after other expenses and grants you had a net loss in 20 and 21. Okay. And you see that transfer in of a million 112,000 that's the American Rescue Plan money one time only. You won't ever get it again. So without that we would not have had million3 uh income that year. Sanitation fund you see it also has a

loss in 2021 of 77,000 and 90,000 has an income of 127,022 and 340,23. Again the transfer in is the American Rescue Plan money. Uh, our sanitation fee is $396 a year or $33 a month. That's what we charge our customers. That includes the $1 fee for uh litter control. Stormwater fund. It's a little better. It only had a loss in 2020 of 34,500. Uh it has a net profit of 45 in 21 and 267 in 22 and 356 and 23. Again a one-time transfer from the American Rescue Plan of 188,000. Power bill funds are the gas tax that is collected every time you buy gas by the North Carolina Department of Transportation. They distribute that money back to the towns based on the miles of streets you have and your population. Okay? That money can only be spent on street and sidewalk repairs, snow removal, and other uh street expenses. Cannot be spent on anything else. Okay? You see our cow bill ending fund balance uh in 21 was 500,000 800,000 in 22 953,00023 and a million1 165 in 24. Why is the power bill fund balance going up every year? It's very simple. Pile bill allocation is two or 300,000 every year we receive from department of transportation. In 2023

the town spent 158,000 to buy a backup. Okay. In 24 the town spent 134,000 of power bill money to pay the debt service on the street bonds that were borrowed in 2014. That debt payment was 150,000 a year, but only 134 was allocated to power bill. Um, you see the line highlighted in red in the middle. The only money spent on street maintenance in 203 and 24 was $8,575 out of a million165 when I first got here last year. Third Street behind Zachbies was just one giant pothole. I got dirt paths on my farm that were in better shape than Hedgemore Drive. But yet we spent nothing on street repairs in four years and we have a million65 that can't be spent on anything else. Now the other problem with power bill this is these numbers come from your power bill expenditure report. Every one of those reports from 21, 22, and 23 are wrong. Those were done by your previous finance officers, the previous CPAs, and they're all wrong. The reason they're wrong there, you see, there's no interest income for power bill in the first three years. State statute requires that you allocate interest income to all funds that have money in the savings account. No money was allocated to power bill for three years and it should have been. I did the 24 and I put 300 thou uh to 22,000 interest income in there. Also remember I told you we had an interlocal agreement with the city of Fagville for streets that they annexed that we could have and they give us 30% of the money

each year. That's the amount of money we receive from Fagatville each year at the bottom line. None of that was put on the pile bill report. I expect that if power bill money sent to pay a bill is restricted just like it is to us and that should have been on the pile bill report each year. It was not. So however we did not go back and amend these for the reason this the other thing that's not on here for the other three years is the debt service paid on the street bonds. So that money we got from Fagville was used part of it to pay those street bonds. So that money was spent on streets. It just wasn't put on the report like it should have been. Right now as of June 30th uh 25 your power bill balance was 1,272,000. Uh in 25 we issued a contract to Highland Paven for 859,000. So far we have paid them 409,000. They have resurfaced Third Street. There are no potholes there except that one that they got marked off. They have repaired the storm water and resurfaced Hedgemore Drive and several other streets that were vastly in need of improvement. Uh we still have about 400,000 left on that contract. Uh they cannot pour uh asphalt when temperatures are below freezing. So they hopefully will start back in March when it warms up and have that contract finished by June 30th. Uh, one other caution, power bill money. You cannot accumulate more than five years worth of power bill money. If you have more than five years that you didn't spend, they won't send you your power bill money next year. As of today, we have $1.6 million in the power bill fund. That is in excess of five years. So, we need to spend that

money before June 30th or we won't get any pile of bill money next year. Okay. I've talked to you several times about the American Rescue Plan grant. It's a one-time grant we received in 22 and 23 for 3.8 million. It earned 111,000 in interest for a total of 3.9. And this is the amounts that were transferred to each fund uh to help pay for salaries and benefits. This money was originally intended to be spent on water and sewer improvements, but the LGC said, "Let's spend it all on salary and benefits." That was another allowable expense. You won't have this money to pay salary and benefits going forward. All right, we're getting near. Pension and retirey health insurance. Uh we have two pension funds and retirey health insurance for some of our uh older employees. the North Carolina local government employees retirement system. We're required to contribute 14.4% of payroll for all our full-time employees to this pension plan. The employees pay 6%. Law enforcement officers, we are required to pay 16.8%. The local government has increased this by 75 and 1% every year for the last five or six years. Our contribution used to be 7 and 8%. They've raised it to 14 and 16. Well, they've ra they just sent out an email yesterday there or Friday. They're raising it again next year by another uh 7.75% for general employees and another 1% for law enforcement officers. So next year it's going to be 15 and 17% instead of

14 and 16. That will cost us an additional 30 to 35,000 in retirement contributions next year. Um now you see the liability of 2.4 4 million. That is our share of the state's liability. We will never have to pay that liability. That is the state's liability. It's not the town's. All the town is required to do is pay the 14 and 16% payroll contribution each year. The state pays the retirement benefits to retirees. But we are required by accounting principles to show our share of the state's liability even though we don't have to pay it. So, our share is 2.5 million. Um, that's a liability, like I said, that you'll never have to pay, but your annual contributions keep going up. Now, the other two we do have to pay. The law enforcement officer special separation allowance is a retirement plan exclusively for police officers. They get a check each month equal to a percentage of their final salary from the time they retire until their 62nd birthday. Right now, we only have one employee that is currently receiving that um benefit. Last year, we had two. One was your former police chief, but he reached age 62 a few months ago. So right now we only have one, but our estimated liability in the future to pay officers that aren't eligible yet is 387,000. OPE, that's other postemployment benefits. That's your retiree health insurance. Our estimated liability for that, according to our actuaries, is $4.5 million. We have no money set aside for that. All we do is we pay the premiums for those retirees as they come due. Okay.

All right. This is a list of our outstanding debt in 2023. Our total outstanding debt was $9.6 million. All right. the BB&T street bonds a balance of 150,000 that was paid off in full in 2024 so that debt is gone. The other one the enterprise police cars are 109,000 that was the first 15 police cars we paid those off this year and we purchased those police cars for about $1,500 each. next to nothing, but they are six or seven years old and they are in need of a maintenance. We had budgeted to replace them, but the LGC will not approve a loan so we can buy some more. Uh we're hoping when the audit reports are done that we can replace those police cars. The rest of the debts, uh the USDA debt on the rec center, we have 21 years left on that payment, 130,000 a year. Okay. the USDA debt on the water and sewer, we also have uh till 2047 or 21 years to pay that off. The fire trucks, uh we bought two fire trucks in 2022 or 23. There's seven years left on that. The loans from the North Carolina Department of Environmental Quality for Water and Sewer Improvements, they will be paid off in four years, 8 years, and 9 years. The three different loans there. Uh the garbage truck, we paid that off in 2021. And the loan that I mentioned that wasn't recorded of $2,11 each year for three years, that was paid off in 2020.

But ladies and gentlemen, we've got debt payments going out 21 years and 18 14 more years on the um Manchester Fire Station. Um we're not going to get out of debt anytime soon. So, we're going to have these debt service payments for many more years. And we've got to borrow more to replace equipment and repair water and sewer lines. Now, we're going to get to the reasons that I told you that we probably won't give a clean opinion. If I was your auditor, I wouldn't give you a clean opinion for this reason. Spring Lake Property Acquisitions. So, first, let me give you just for those of you new a little history. Uh, in 2019, the town purchased option on about 18 different tracks of land for 48,000. In April of 2019 and July, the town actually bought two parcels of land for 287,000. The plan was to get a loan from VB&T to buy this property. These two pieces of property were purchased before the loan closed. So, the town paid for these. These two pieces of property are in the name of the town. Okay. In August 27th, they actually closed on the loan and borrowed $3.5 million from BB&T. Then for the next two years, they purchased 18 trackcts of land or a total of 166 acres for $3,000. So the total real estate owned by Spring Lake Property Acquisition and the town comes to 3.4 million uh including 14,000 of bank closing fees. Okay. The town paid the interest on this loan for about a year and a half. Then the LGC took over and said, "You didn't get our approval for this loan." So they

stopped the payments on the loan. So on August 22nd, when the first principal payment was due, Spring Lake Property Acquisitions defaulted on the loan. In December of that year, BB&T took the 360760,000 left in the estro account that was supposed to be used to pay back the town for the first two pieces of property we bought. the DB&T took the money and applied it to the loan because we didn't make the payment. Okay. Then four years go by and the town pays nothing on this loan. We defaulted on all four principal payments. So on August 28th, Mr. Aurora negotiated a settlement with Spring Lake with with uh Truist who took over BB&T and we purchased this note receivable with a current balance of 3.4 million for only 450,000 saving the town and Spring Lake property acquisitions 2.9 million. That's the debt that's truest bank wrote off that we don't have to pay them. Okay. Then on September 19th, one of the two tracks that was in the town's name, we sold it for 75,000. Okay? And we used that money. We also didn't pay the property taxes or the um um sanitation fees on any of this property for 6 years. We took that 75,000 and paid off six years of back taxes and solid waste fees. So those are paid in full as of October of this year. Okay. Now, originally for the land options and the original two pieces of land, Spring Lake Property Acquisitions owes the town 337,000 plus we bought the note for 450,000

this year and we paid off the property taxes for about 50,000. That's a total that Spring Lake Property Acquisition owes the town of 836,000 minus the 7500 that we got from the 75,000 we got from the sale of the land and 2,000 of that went to pay the lawyer to handle the sale. So, as of right now, Spring Lake Property Acquisitions owes the town $763,000. Okay. Now, the local government commission and Greg Eley's uh CPA firm, that original uh loan was 337,000. They wrote it off as a bad debt because Spring Lake Properties Acquisitions had no money. They had no source of income. We put it back on the books because we hope to eventually sell the land and at least recover some of that money. So, I don't want to write it off as a bad debt yet. Okay. Now, Spring Lake property acquisitions, all of the land there is an impaired asset. And what do I mean by that? It is not worth what we paid for it. The reason for it, the LGC decided since they didn't approve the loans that Spring Lake Property Acquisitions is a separate entity. they said is not part of the town. It uh and so they just basically chose to just forget about it, just pretend that it never happened. So they neglected it under the two or three years that they were in control of the town. And the result is this. All of that 160 acres of land became an illegal trash dump. And here are the

piles of trash, just some of them. two uh boats left there.

Three or three boats. Another pile of trash. Okay. On December the 22nd, 2022, not only did they dump trash on this land, they let all the houses on this land deteriorate to nothing. No repairs done, no upkeep. Uh squatters moved in. Uh the houses became dilapidated. in December 22, windows broken out, roofs caving in. Uh they're in terrible shape. So Cumberland County Planning Department, this is their sign where they said, "We're condemning every piece of uh real every house on this land is now condemned." Now, they also assessed a penalty on each house of $250 a day per house for violations of the minimum housing code. That's from December 22nd till now. That's 1,153 days times 15 houses times $250 a day equals $4.3 million in outstanding fees owed to the county. These are some of that's one dilapidated house. There's one of the dilapidated trailers. There's another. So now they've made no effort to collect that and I don't think they will, but technically there's $4.3 million of uh fees out there for violation of minimum housing code. What are we going to do about it? All right. Now in asset, this is the original cost of the buildings 1.7 million. The land cost 1.7 million. That's your total of 3.4 4 depreciation for from 2019 to 2023 386.

So the book value of the land is now 3,55,000. The land is recorded and the buildings in these financial statements at his historical cost minus depreciation. General statutes require I mean generally accepted accounting principles require that you write an impaired asset down to its fair market value. Now I am not a real estate appraiser. Neither are the auditors. Neither one of us are certified to tell you what this land is worth. But the tax value on it is $3.5 million as of the latest revaluation because they raise the property value of everything in Cumberland County by about 60%. The cost was $3.4 million. The appraised value is 3 and a2. What is the fair market value of a condemned house that you can't live in because it doesn't meet minimum housing code?

0. It's actually less than zero dollars because I got to pay somebody to tear it down. So, I don't know how much that's going to cost. What's the fair market value of land that's an illegal trash dump? I don't know, but I bet I would guess that it's somewhere less than 3.4 million. Now, what are we going to do about it? Well, thanks to Commissioner Lackman, and you owe him a big debt of gratitude for organizing this. Uh the town employees, some soldier volunteers from Fort Bragg and other volunteers from the community spent several Saturdays out there cleaning up this property. We had we got bids of 800,000 to have a contractor do it. We did it with volunteers and town employees for way less than that and they picked up over a 100,000 pounds of trash off of this 160 acres. We've hired an attorney to for that foreclosed on that note uh that we bought from Truist Bank. Uh he's currently working on doing the title searches. I wish he'd work a little bit faster. Um but anyway, we're hoping he'll get that done soon. Then once we get all this property transferred to the town's name, then we can demolish the buildings. Don't know how much that's going to cost. and then we can sell the land and hopefully recover some of that se or maybe all or some of that 763,000 instead of writing it all off. But um you owe a big debt of gratitude to Commissioner Lackman, the employees and the volunteers and to Mr. Rory for negotiating saving us $3 million that truest gave on that loan. Okay, now I'm getting to the end. In 2021

at the end of the financial statements is your compliance reports. Compliance reports are a report on your internal control. Well, I will tell you and it lists your material weaknesses or the things that need improving in your internal control. In 2021, there was no internal control. It was completely non-existent. Okay, these are the uh deficiencies that they found. Segregation of duties. That means one person isn't supposed to be responsible for everything. You're supposed to divide up the duties between different employees. So, there's some checks and balances. Everything was done by the finance director and not done correctly. Expenditures over budget. On page 61 of your report, you will see a list of expenditures over budget. The total on that page is 1.5 million spent over and above the budget. Ladies and gentlemen, this is your 2021 budget. It is over 400 pages long. So, somebody went to a great deal of effort to prepare this budget document. And you know what they did with it? They set it on the shelf and they never looked at it again.

So that was a huge effort wasted because they never looked at it again. Uh and then they went over budget in almost every department. Bank wrecks were not done. If the bank wrecks had been done, it would have caught the 567,000 that was embezzled by Miss Tucker. I didn't mention that anywhere else in here, but that happened in a previous year. But bank wrecks hadn't been done for years. They're supposed to be done every month. Uh pre- audit process. When you spend money, your state statute requires you to look at your budget and see if you got any money left to buy it. That was not done. Uh credit card receipts not turned in. Invoices not paid on a timely basis. Uh we had vendors when I first got here that said, "We will not do business with the town because we don't get paid on time." We still have vendors that don't want to do business with us because of that. The invoice is not paid on time. Fable Public Works, one of our biggest vendors, in three years, they were paid late 12 times. It's not $25 late fee like we charge our customers. It's $2500. Cost the town $30,000 in late fees of simply not paying for pay bill because it works on time. Okay. We also had uh state and local government retirement benefits a few times that were paid late. Cost the town another $4,000. Uh material journal entries were not made. Year-end entries weren't made because the finance director at that time didn't know how to do them. So they the auditors had to do them all. Audit reports not filed. Well, we're still four years behind. Hopefully, we'll be caught up in the next few months. And a cell phone allowance was

paid to the economic development director. $10,000 is supposed to be $100 a month. And he got a check for $10,000 and claims he didn't notice it. He lied. If bank wrecks had been done, that would have been caught, too. pay it back. Okay. Now,

one thing I mentioned, Miss Tucker, pre in previous years, uh, embezzled, according to the state auditor over 567,000. In 2023, we did receive a check from the insurance company to reimburse us for that. However, that was only 135,000. So, that still leaves you 400,000 in the home. Okay, that is the end of my presentation. I'm sorry I took so long, but you need to know where we stand and where we come from. In conclusion, I want to say one thing, couple things. This report was bad, but it is getting better. You can see the improvement each year. A lot of that improvement was due to LGC. A lot of these priori adjustments were found by Greg Eley and his employees. They found some of them. I found some of them. They didn't find them all. But the town also spent $1.8 million to have Greg Eley's sperm fix the books. And they did a good job, but they didn't fix everything. They fixed some of it, but it cost you $1.8 million over about a year and a half for them to do it. Um, now Spring Lake Property Acquisitions, you know, they chose to just ignore it. We got mail, it just got thrown in a box. Just pretending it doesn't exist is not a solution. It's actually irresponsible and lazy. We cannot leave a trash dump for our children and grandchildren to clean up. We've got to fix this problem. and it is awed component unit because at the time it was in force it was controlled by the board. Um now going forward I hope to have the 24 statement done by the end of this month. Then we'll start on 25. I hope to have all

the audits completed by June 30th of 26. That depends on if the auditors can get here but we're starting the middle of tax season. So, I can't promise that because they may be busy doing tax returns, but our audit report for 26 is due in December, and we're going to have that one done on time. I hope so. And we're also I plan to submit the 26 audit to the government finance officers association to get a certificate of excellence for achievement in financial reporting. Um, we need to get this bad reputation of finances off the town's back. So, that would go a long way into accomplishing that. And ladies and gentlemen, the last thing I would say is the citizens of this town deserve better than what I just presented to you.

Thank you very much for your attention.

Wow. That was um exactly what we needed to hear uh an overview of what this town has gone through um for the past several years. Um I can't imagine how hard that work was. Again, as you stated at the LGC um said our 2021 audit was inauditable and thank you uh Mr. Overton for taking the time to go through and get us ending balances so that we can properly move forward on solid footing. Again, just thank you. Thank the staff. A major highlight to Commissioner Lackman. Um, as you seen that he he was adamant every uh meeting he came up here to tell us how much trash was picked up and that number steadily increased every time. So again, thank you to everyone who volunteered with you. Thank goodness for story that $3.5 million deficit turned into only $450,000. That in itself is huge. So again, is there any other questions or comments from the board?

Thank you, Madam Mayor. Thank you, Miss O. Um I think we may do that. uh we call the um state LGC and my understanding they gave the power back to the town of Spring Lake. It's a overview uh with the LGC. They was on it as well talking about those dollar amounts. Bring it back up today for a reminder for people to understand where we are. That's why we did not approve those budget amendments so we can understand for future reference when I called them years ago for the budget as well as Miss Cooper was serving on this board of 12. So as we continue to go forward, we're going to be adamant about our dollar amount. Taxpayer here town of Spring Lake for many of years. And we want to make sure we look out for your tax dollars and make sure for accountability purposes. And I want to thank those neighbors in the neighborhood that continue to clean up their trash in their community. And as dumps and trash has been uh dumped in those areas, Sheriff Enis and uh Cland County put that out there. Then our officers are if it's not in the county. Not sure where that area is. I think it's over there off of Grog Street.

No, it's Manchester. Manchester Road. Yes. Off Manchester.

Oh, I'm farther down. where we had that big water leak one time and I know exactly where it is, where that land was. But anyway, thank you. Going forward, um, as a new board member, my colleague, we will always want to understand where our tax dollar is going. um he stated and then I think uh January the 12th, I was surprised to know that the recreation center had been taken over in the town of Spring Lake was not receiving anything. the lease of 1312 249 went out and hopefully we'll get some information about that soon because at that particular time at that meeting it was just a request for action to send that out. So anyway, we're going forward. So thank you so much for the update. Thank you. Any other questions or comments from the board? Um, I do want to point out that we are still on the unit assistance list with the LGC. We are still we do get to make decisions, but they're still watching us closely. Um and um we have to be mindful that we what decisions we make uh could determine whether or not they come back in here. So we just need to be mindful of that. We are not in the clear. Um and that's all right. We'll now move on to agenda item 8. Uh E.

our asset inventory assessment. Uh Mr. Rory and I do want to um state that there was a very detailed meeting uh held to deliver the results of our AIA and MRF um led by Mr. Rory uh there and our um engineering staff. So that was not recorded but it was available for detailed um information. So we will probably move through this a bit more briefly seeing as the information was already

that is my goal is to be as brief as possible. Um this is nothing more than more bad news. Um, and so after listening to the financial statements, recognizing where we're at, forgive me if I read the cover sheet for the agenda, so that everybody is aware at least where we're coming from. And so in the summary description on our cover sheet, it says that the town of Spring Lake is currently on the local government commission unit assistance list. The town was awarded a $250,000 grant to evaluate the overall conditions of its water and sewer infrastructure and to identify capital planning needs. The AIA provides a clear assessment of systems positions and outlines the financial realities and constraints the community faces in maintaining a functional and sustainable water and sewer system. Um, so the question has to be asked, why did someone give us a $250,000 grant to assess the mission of our water and sewer system that has to be asked to talk as we move forward. So tonight I'm going to give you a brief overview regarding the assessment asset inventory assessment. There are two components of it and I'm also going to do a brief overview of what we refer to as a system development feeds analysis. Um all total the water portion is about 70 some pages. The sewer cup portion is another 80ome pages. So we're about 181 pages of documents. My numbers are going to be off. So they're not absolute. Um, but I think it's worth recognizing that there's a lot of information and I'm going to condense it down to just a couple of highlights. Um, it is my intent to instead of reviewing both water and sewer, I'm going to do the water. I'm going to skip the sewer. Both these reports will be loaded onto our

website for public review tomorrow. There are still draft reports, but there have been some modifications since we have the draft reports. Um the reports have been uh reviewed by DEEQ at the state level and have been uh kind of confirmed that they meet the scope requirements to grant. So therefore they're considered to be official just thousand words. Um thousand words that's all you got to do. Old pipes 70 years 50 years 40 years 30 years. um a system of uh in a in a very difficult uh poor state of repair and maintenance and it causes us problems every day. Um you got to look at in the water report there are high priority projects listed one and first and foremost it's a valve isolation project so that we can go throughout the community and isolate how we're going to cut the water off. Right now we have to hunt valves and there are some places where valves don't exist or the valve location was buried with the public works director from 20 years ago. um we just don't know where they're at. And so we're having to deal with this and so we budgeted in this AIA basically a $250,000 project. This is really a lowhanging fruit project. And this budget is already been budgeted in our current budget to do this valve isolation project throughout this uh throughout the city. And it highlights just one location there. You'll see that the all the colors basically that's all the different zones and that one location is Deerfield and includes the one valve one valve big enough to isolate deer deer field and cut it off.

Um a water line replacement project Oell Road I know there are folks that are constantly um emailing us about the water leaks along the road corridor. All right, which also includes everything from some of the back street and the areas of Big Goodear Regina. You'll hear us talk about those, but think about this as the Odell Road corridor. Um, you'll see that the current probable opinion of opinion of probable cost for that one project 4.4 million. Say it with me. One project for water line replacement 4.4 4 million. I'm not going to be talking about the sewer line project for another three4 million. I'm just going to focus on the water project right now. Opinion probable cost. You'll see to the right picture to include new year Virginia some of those areas up in there replacements. Um, right now you funded it this year, it would be $4.4 million. If you wait a year and defer the funding for that, it's obviously going to go up because we face the same inflationary pressures as everybody else does. Construction cost goes up. If you wait 10 years, it goes from 4.4 million to the opinion and probable cost of $6.2 million. Um, what I chose to show down here was just some simple loan documents. If we borrowed that $4.4 million and did it right now, um, and did it over 10ear period with an interest rate of 3%. Our annual payment would be $517,000 a year. Um, over the course of that

10ear period, it would be 5.1 million for a total interest payment of $770,000. One project, one project and one project. Max Street, different name, same game.

$3.7 million on the Max Street. Different name, same game. We wait, if we delay, those costs are going to escalate over time. This is a simple time value money. Everything's going to go up. We're not exempt from that. The summary of the AIA asset inventory assessment calls for a capital improvement plan that eclipses $36 million. Just water. 36 million over a 10year period. Do it now. do it later. But those costs are always going to be back and forth between what those costs are. 36 million water leaks. The reason for this is the condition of the pipes. I was recently asked if we had capacity to do something in terms of sewer and water. Capacity is not our issue. Distribution is our issue. When we fail to invest in our underground assets. They will not sometimes, but they will always become underground liabilities. It's just a question of when um you fail to invest in those assets liabilities. Here's a case in point. The latest Max Street leak, these are numbers are coming from Jason, our public works. The cost for the max street link was $28,759. The cost for spring and fifth that some of you aware of a week ago, two weeks ago at about $48,000. We haven't got actual cost on that. These are only estimated costs. One le spring and a lot of people without water. Um that means

those meters aren't turning. They're not getting that water. Therefore, there's revenue coming. Um it is not in our interest to turn the water off except blow it all over the place. Uh there's the sewer report. Keep in mind what I just said. Water and water only 36 million. Okay. The sewer report is a sister report to this. That's going to be closer to around 40 something million. I think 43 million to be exact. Same game. the projects that cost 43 million to sewer CIP. Now, if you're tracking that, um, I want you to talk think about how these revenues support the business like activities. You just heard Jimmy talk a lot about business-like activities in terms of enterprise. Here's a case in point. We are expected to replace a sewer line. Um, and it's on new street. This is all public information, so forgive me. I'm not sharing anything. There are six properties being fed by this sewer line. The cost to replace this sewer line to include some demo or building pan what have you is $83,000. The property tax referred to as at the lower on those properties generates roughly $1,000 a year on all the properties. $1,000 a year on all city properties. Um the water revenue for those properties is about $3,600. When you look at the the rates, you see $50, $70, $37. Those $37 is close rate because all they're doing is paying rates for

usage charges involved with that. That project at $83,000 with $33,600 a year in revenue. The break even point on that is 23 years. And we absolutely have to do it. We owe it to the fix. Absolutely have to do it. Even though I crunch and crank and talk about numbers, how do you tell someone that your house is not um I don't have how do you tell them that we're not going to carry sewage? We're not going to replace the sewer in the ground. We're not going to replace these pipes. You simply just can't do it. That's their homestead. That's their lifestyle. And so we've got to be able to focus on that. But this is just one example of a sewer propon associated with $43 million. Um this is a big chart. We'll go through this. I'll simplify all this. You can't see it. It is in report. These reports have been provided by staff the board via email that will be posted on our website tomorrow for public review. This is what I'm trying to get to. Water and sewer. Both of these um reports develop de developed a CIP a capital improvement plan with six projects back street here and there water line replacement sewer line replacements upgrades water tank improvements for pressure and volume issues. Um, forgive me for reading to you, but some may not be able to see. It's difficult for me to see it. Revenue increases for the water sewer fund required to sustain the AIA generated capital improvement plans result in

customer rate generated revenue increases of 20% in the first year of the planning period followed by 18% in the second year then 15% in each of the next six years followed by 7% in year 9 and 5% in year 10. This translates into a monthly 5,000galon residential water and sewer bill increasing an average of 2952 monthly in each of the first five years 115%. At the end of the day, the only thing that really I think is important to recognize is that the residential bill from year 1 through year 10 is going to increase to $342 a month, which is a 268% increase. concerns. Um, this is one of the few times I asked finance director to actually put this into a spreadsheet for me so that you can see it. I hate spreadsheets, but there it is. Verify this.

Can you guys hear the sound? But in any case, that means if you follow the recommendations of the CIP based on the asset inventory assessment, the customer using 5,000 gallons a month will have a water and sewer bill 10 years from now that is over $4,000 a year. Wow. Um clearly can't do that. Our consulting engineer who's in the house um did the AIM assessment and one of the things that he's recommended is an alternative plan. That alternative plan is basically trying to stabilize the rate increases to do what you can, but it simply means deferring some of the maintenance and replacement. And so, in other words, you're not going to do it now, but you're going to do it later. We're not going to pay for it now, but we're going to pay more for it later. Um, and so that's trying to take and make sure that their bills are less anywhere from 2 and a half% or to 4% of their what is it? Median house median household income in spring. an alternative model, but that alternative model to keep it within those reasonable rates is doing $40 million worth of projects, not $80 million worth of projects. And so you're still having to see these rate increases year over year over year funding. The way they do this alternative is say, "Okay, we're just not going to do project five and project six. We'll defer that till later to year 11, year 12, year 13. Somewhere down the road, we'll take and deal with that

issue. Right now, we're just not going to focus on because it's not as high priority as some of the others, but note project deferral will increase the risk of potential failure. Um, I don't know how you increase the risk of potential failure what we're already facing, but somehow know you do. That alternative model is about reducing the CIP, but it still calls for a 20% increase in fiscal year 27, an 18% increase in 28, a 15% increase in 29, and a 5% increase in 30 followed by 5% increases from then on out for the next five years after that. basically 10 or overall a 49% increase um in the rates for that 10ear period. I also want to respond to comments and questions that I frequently hear. Um I did and heard it at the last meeting about this. Well, why don't we get grants for you? they get to $250,000, right? So that do an assessment on this. Um, and so I would be kind of how well has that worked out for us in the past years. Everybody is in a state of infrastructure flux.

It's not just spring. That's right.

It's everybody across the nation. Uh, engineers are giving ratings on roadways. So we talk about bills. We can talk about this. We can talk about all these different things, but every community is in this state of how do we maintain the infrastructure. I find no reason or no value inident in identifying faults. The only value I find is how do we move forward to provide the services that are sustainable to include quality drinking water, protecting the environment from sewer leaks and dumping, you know, excess stuff into our rivers and streams. Um, that's important. So then it comes down to he also shared with you this concept of our debt service. I'm not going to get out of debt anytime soon. You cannot cash flow these projects. You just simply cannot do it. Okay. Right now, to the best of our ability, talked about some of the budgets. To the best of our ability, we're only talking about possibility between $500,000 and a million dollar per year of cash flow in these projects to fix stuff. You see that you get them one day, you know, $28,000, next day $50,000. All those are coming out of the fund. Um, and we're cash flowing those projects through fixed maintenance and repair affairs. None of that is dead. So when you start talking about 4 million, 10 million, 20 million, whatever million you want to talk about, debt has to be used as an instrument to fund these repairs, maintenance, upgrades, whatever you want to call it, fixes in today's dollars, not 10 years from now dollars, because every year that goes by, the value of that dollar declines. So we got to weigh the odds between using the D as an

instrument and then not using it or even doing the repairs. Um critical to that is that um this concept of we that I hear about we didn't do this, we didn't do that. Um we didn't do a lot of things. Uh we could have done more but we didn't. So, at what point do we focus on fault and focus on we and what can we do to make a difference in this community? I know I'm just beginning to preach, but I get kind of aggravated when I hear a lot of that stuff. Um, but if you look at this little highlighted document here, it says that if you go for these grant funds, the clean water state revolving fund, federal state conditions and LGC approval required. We went to borrow $700 and some odd thousand to buy police cars and the local government commission flat out denied it. Said no. So we can't even borrow $700,000 for police cars. How do you expect us to borrow a million, $5 million or $10 million to fix and you can't cash flow it? There's just not enough cash there to do it. Um, and you'll notice those are highlighted in every one of those. Drinking water statements off the revolving fund. Um, LGC approval, state reserve program, the LGC approval. Um, LGC did some good things, but when you want to talk about weed, we we didn't do anything. Now we're going to have to pay a lot more money because we didn't do anything. The whole pow building up balance and then, you know, all of a sudden the risk not getting those dollars. So, she didn't do anything. public works. We're at the mercy of PC to purchase our water from them at a bulk water rate. We are talking about renegotiating the contract. Um it's due time, but that's not going to save us money. It's simply going to change about

how we borrow and how much water we get allocated to us. Um it's from PWC because we don't get it from a lot of other places. We try to get more from Mark County. There's a gap on that. there's a limit how much we can get from our account. Um, but if you look at this, they're already going to raise our rates by 21% in July, effective, July 26. That means that if we do nothing, we're going to take and have about a $300,000 loss. It's 276 up there. basically um according to finance numbers about $300,000 loss that we're going to need. So that $300,000 that we're using to fix stuff cash flow just like that. That $300,000 from the utility fund that we're transferring to the general fund to support overhead. Just like that goes away. So when we choose certain things, we just need to be choosing wisely about what that means. And so um I made a recommendation before that we increase the water rate in December and it was uh declined by the board. I'm going to make that same recommendation and it's still the choice of the board. The board still makes that decision. Um staff does not make it but we want to make sure informed decisions. We share that information. It remains staff's uh recommendation to increase the water rate by 4.93% to adjust the CO 21% um increase purchase water increase will be effective beginning June 1, 2026. So we would hold off until June 1, 20. The impact of that rate increase would basically is just to cover the increased

p purchase cost and to cover the transfer and cover some fixing stuff on a cash basis. Uh at the end of the day, if you do that increase, it's going to go up about $58 a month. Another is uh an analysis of what a $20 million loan would look like. In order to fund a $20 million loan for 20 years at a low interest rate of 2.5%, you're looking at a rate increase of about 23%. Just looked at for 20 years. Um, y'all, this is what I think they deal with every day, 24/7 attorney here, so the numbers can glaze over. Um, I can't get I I can't can't get away from it. All right, it is a huge concern. Um, can't get away from his staff recommendation. Now, this one's tricky. All right, this is tricky because I got another recommendation after this. That to increase the TOSSL water and sewer rate by 3% to cover the debt service for a 20 million capital improvement loan. The increase will be effective beginning December 1, 2026. That does a couple of things. Number one, in order to get LGC approval, you're going to have to have those done. So, it's it's a times machine. Got to have that done or you're not going to get LGC approval on anything. And I'm fully aware of that. I just think this is something that needs to be thought about on the horizon for two reasons. All right. Um in the absence of the audit, we have no bond rating. So pursuing bonds, revenue bonds or whatever they may be um is really not on the table for us. We can go up to 10 million um but we can't get to 20 million to do

water and sewer unless we get to the bond market and do different things. And we're not going to do that without a bond ready based on our financial statements and what we can do. So it's another piece of the puzzle you got to be thinking about. Um I don't know that we've ever had a bond regist. Um and a final recommendation is the last remaining piece that's missing from the asset inventory assessment is a sister project known as the merger regionalization feasibility study. Um it is a goal of state government right to combine water and sewer systems into regional providers so that you don't have little folks with 4,000 customers trying to fund an $80 million liability to water and sewer repairs. So, a final recommendation would be to sell this $80 million liability based on appraised value. Um, how much would the appraised value be if you're looking at a million liability? I've got no idea. I have zero clue. Clearly, it's not worth 80 million. Think back to the SLPA property, you know. Um, I hate I hate to say it. You know how I got got them to settle for 450? I went to the bank and said, "Please foreclose on this." They said, "Where's that utility in?" Because they have to clean it up. That's how we got to get the settle for $450,000. Those are the three recommendations. I think we need to focus on some modest rate increase at this point just to continue to fund the transfers over to the general fund. In the absence of that transfer to the general fund, that's about a 5centent tax increase. That's

the supported by utility fund. Um, in the absence of that small 4.93% increase, that's $300,000 of repair maintenance that you're not going to be able to do. Um, there are bad news. I know there is what it is. So, those are the recommendations. Um, I will leave it at that. Um, I put this up there. What is the board of commissioner's direction? But at 8:30 at night, um I would humbly ask if you would entertain this later, not tonight. Okay. I would ask if you would do that. Um system development fees. Um final comment on this is that this was really simple. We currently have in our budget charging the system development fee. you'll see here of about 120 if it's over 200 bedrooms in apartments $125 per bedroom for a three-bedroom house is $625. Basically, anybody who's hooking to our sewer system, our water system has to pay a fee to hook up because everybody else who created that system have already paid for that. Now, anybody who's new come to town shouldn't have to be subsidized by those who've been paid for it. they should pay their fair share. That's what system development needs are about. It's not about maintenance. You can't use these fees for any maintenance, but we've done a part of assessment. And here's a perfect example. This piece of property right here is on Manchester. This piece of property right here is on Manchester. This piece of property here with my little mouse or anything at the bottom of your page is in the town of Spring Lake. Across the road is in Cumberland County. And so we have people that are in Cumberland County, not in the town of Spring Lake, want to hook up to the assets that belong to all of our

rent payers in Spring Lake, and they want to do it dirt cheap. No, I don't know why there is, but it is good catch. I'm glad he did instead of you. Yeah.

But uh Yeah. And so there's the uh uh yes it is not county yes but it is it is in cover county and so I was asked well if they did that would they have to annex absolutely yes I think you have to annex and so that's another decision the board would have to make that's not something a staff can make and they're proposing to turn it into residential instead of work. Just keep that in mind. Um, as it stands that this this uh every BRU equivalent residential unit will pay a system development of $1,715 for water and sewer. The purchase of that, the reason for that is so they can pay for expansion in the future. not right now, but if you need to change the water line from a 6 in to an 8 in, different things to carry that district, they're paying for that expansion in the future. Um, that sounds really, really good until you actually think about it. If you did a 200 unit apartment complex, it'll be $34,000. But note in the past two years we've only we've only completed 82 cos which means that we generated $140,000 that could go toward expanding the capacity. Um it ain't going to go far. So that's the financial impact. That's the raw numbers of what we're talking about here. Needs to be something and it has to have a rational nexus. We can't just come up with a number, put it out there. It has to be evaluated. It has to be considered about what that expansion will be. What's the capacity? How do you add to that system? Um, and with that, I'm going to give you one thing. And the

reason why I'm bringing this up tonight is because by statute, we have to advertise a post for comments and a method to provide written comments in regards to this system development fee for 45 5 days at expiration of that 45 that five day period the the board can have a public hearing and then they can adopt it um and put it into your annual budget. Our annual budget is underway right now. Everybody in staff that's here received all their budget documents um last Friday or Thursday or Friday. Monday.

Y we have these weather impacts and so all these things going on. So, they're working on them right now. The board will receive their budget documents tomorrow. Um, and so you guys will have to start considering what those things are. But all of this ties into how do we reduce a budget and how do we get it moving forward. We can't just do something arbitrarily. We got to be focused on it. We got to have these debates. We got to have these discussions. With that, um I would humbly ask not to entertain this tonight except for one thing. Um for the board to provide us direction at the very next meeting in regards to developing these as they share with you this analysis of this report. if there's anything. So that is a juncture in terms of budget development. um get my thoughts ready. Um the stand up development fee and you probably went over so much. I just received this document. She just sent it to me at 8:23. But anyway,

I sent it on January 14th. Yeah, but I received it. Oh, okay. So, on this um page 42 and you said for the units it says for example a 200 unit apartment development would generate approximately that's 343 343,000. Yes, ma'am. And you stated prior that it would generate 200 and something. So which one what what do you have on your two 200 units and 343? Right. So I think there same thing.

Okay. And then the standard development fee excess and a lot of this stuff that we're getting and when you throw out just the initials what it should mean that 1,715 per unit. Can you just elaborate a little bit on that? that that stands for equivalent residential unit and the assumption is onebedroom, two bedroom or threeb with our current system development fees that are suspect in our so that's what eru means basically an equivalent residential unit so that would apply to a single family level right one fee a duplex would be two erus so that would be two fees and then an apartment building with 200 would be 200 ft that will get you to 3400

thank you Stanford was she had inerated about these apartments that's coming up and not affordable and stuff like that. So those units that we have on Fourth Street as well as Spring Avenue and the other ones they putting up is this already in place. This would only apply to new construction to new they come out once this is approved. Yes, ma'am. Cuz those are new but they're not new. This is issue that building permit. So those permits have already been issued. That would not apply to those. Okay.

Only those that were permitted beginning 45 days vote period adoption program. All right. But we did get something out of those units. We didn't get a thing out of those units. Nothing was out of those units. Nothing out of those units. Why?

Because our system felt that these in the budget have been considered to be suspected. They do not meet the requirements of analysis from the general section. So we did not But now he this does. Yes, this report does. Okay. Thank you. Any other questions from the board? All right. We'll now move on to our rate reports and I will get through this as quickly as I can. Focus group four met on January 21st. Our next meeting will be Wednesday, um, February 25th at 6:00 a.m. here in the boardroom. Um, I attended our fast stakeholders meeting where we were presented with alternative routes um, for transit coming into Spring Lake. Um, I will bring that up at a later date once we get more information from fast so that uh we can potentially um it's a it's a far ask due to budget restrictions um about us bringing transportation through pass back to our community but we are working with um fast transit to see how um if possible we can move forward with bringing our bus system back. Um, I was also able to attend the Fed Billo Cumberland County Economic Development um, Commission's data center information briefing and I highly encourage um, our residents to become educated on AI and data centers um, potential risk and risk and benefits of having one. Uh, because AI is here, technology is moving forward um, and it's either we get on board or we get left behind. Um, so I encourage you to look into that because in the near future, I'll be bringing um information about data centers back to the town. Um, Wednesday the 11th and 12th, I will

be with uh at our North Carolina Makers Association um winter meeting where I am on the board of directors. On the 18th here at town hall, we'll have coffee with the commissioners. This is open to the public and I highly encourage you to come ring your neighbors. This is our time to talk directly with our Cumberland County uh commissioners and express our um concerns or comments to them directly. So again, that'll be on Wednesday the 18th at 6 p.m. right here in town hall. We also have our uh rule rule committee which I chair um here Thursday uh on the 19th at 10 a.m. So if you are interested in plans for Fort Bragg and how that affects surrounding communities and counties, you can attend that this Thursday at 10:00 a.m. here in the boardroom. Lunch with the mayors will be Wednesday the 25th, 12:00 p.m. at Ruby Tuesday. Um and Miss Sanford is gone, but I did want to address the early voting sites. Um I have myself as along with uh along along with other board members uh and community members have gone to the board of elections on multiple occasions to advocate for our community. Um we have always been an early voting site for midterm elections. However, um this time we were not approved. Uh it was a split vote at the Cumberland County Board of Elections, which means that this process goes to the state board of elections in Raleigh. Um that meeting happened last or a week before last where again the state board of Connecticut elections denied Spring Lake having access to early voting site. Um I will continue to fight for us to have equal and equitable voting access. Um but it is a long road ahead of us and again I I can't do it alone. I need the support of the community um to stand up with us uh to

advocate on on our behalf. I'm also putting out a call far in advance. Um there are some decisions being made surrounding our local schools. Um there are talks of decom or excuse me closing down Manchester Elementary and moving those students to WT Brown. I personally feel um that is an extreme disservice to our community um to they've already closed Lilian Black and if they want people to enroll at Manchester Elementary then bring the ele Manchester Elementary up to the proper standards. um closing down an elementary school would have impacts to our town economically. Um that will rapidly put us on the road to closure. Um people don't move to an area where there's no schools. Um and so I need you guys to stand up with me. This fight is coming and I am told, "Oh, it's way it's way down the line, but I don't want to hear any talks of schools closing in Spring Lake after we've already lost one." So, um, I'm putting up a call now. If you have any more questions about that, please get with me offline. Um, and I'd be glad to arm you and equip you with information because the fight might be in town. And that is all I have. Tips. Thank you, Madam Mayor. Just want to thank everybody for coming out. I know it was a long meeting. And uh, thank you all to give us the opportunity to understand what we're talking about and we're not just making motions and approving motions and not understanding. So, I thank you all. I appreciate you all coming out. Thank you for the work that you do and continue to work hard for this great town in Spring Lake.

Commissioner, um yes, this past Saturday, myself, former commissioner um Lackman and Mr. Charles went out and he said, "Here's a picture right there with four of us. It was cold out there. Um I know a lot of people always, you know, request for areas to be um cleaned up, but we do solicited volunteers and participants come out there. So, next month, we'd love to see you out there and bring a friend. stay. That's all. Mr. Jackson,

I want to piggy back off of the um closing of the Manchester school. Um I had a representative go up there to the board today to let them know they had a special meeting that we are concerned about our schools being closed. So March the 10th is the next meeting up at the board. So um I'm looking forward to having everybody come up there. We will be up there speaking to let them know that that is not what we're looking for from the time of spring. Commissioner, I appreciate everybody staying as long as they have. Last meeting was long, so maybe in the future they won't be this. But thank you for coming.

Thank you, mayor. Um, I just have one thing. I was recently uh appointed to Cumberland County um mid area mid Carolina agent advisory council and I will be attending my orientation on February 20th at the mid Carolina regional council office I'm going to defer and actually ask members of staff to come up and give a quick very quick briefing um and so Stephanie would you go first please from the building inspection department in regards to minimum housing. Um, this this this kind of tags on talks about what we're trying to do in the community for our property values for cleaning up the community, everything associated with files and stuff in regards to code.

All right. So, I just wanted to give a quick update on um demolition that has been occurring here in the town of Spring Lake. Um so, the the first one and we have pictures of this is demolition is actually in progress right now. So, it's the Liberty Estates. Um I don't know you guys all know about it. It's five North. Um it's, you know, D Street and Nolan Street. And um I think there was about 17 structures total. Uh seven have been torn down already by the property owner. He's actually out there tearing them down himself. We have driven past multiple times saying, "Hey, thank you. Thank you."

Um and he is he's hoping to get everything cleaned up and then he's going to put back um more mobile homes, newer, better, you know, better looking. So these were just some of the um pictures that I took. So I was trying to get like exact views, but you know, we got the before and after. Um here's another one. before after they're just I don't know if you guys driven down the streets before, but it is really

So here's like overall site cleanup. So here's some before pictures and then here's some after pictures. So I encourage you to just drive down and just look at it. It's quite remarkable. Um, another one we've got a contractor came in, bought the Rose Hill Park property. So, it's like North and South Connor Street, uh, Sigma Street, and Lesley Street. There's 19 structures total. Uh, so demolition permits were issued to them January 23rd of this year. So, I haven't driven past it to see if they started it, but they're tearing it all down. And then the next one is going to be so Rosewood Rentals, it's the White Eagle Lane and Missy Circle. Uh we actually went through the whole process. We got uh demolition ordinances against him to tear tear down those um structures because he wasn't he wasn't moving on it. Um recently we did have a meeting with the owner and um we're going to try to or we're trying to work with him. We're trying to be, as John puts it, uh be part of the solution and not part of the problem. So, uh we should be uh we're going to be tearing down two of his structures hopefully in the next couple weeks. We're going to get that set up now with the cold weather being being out of here. And then he's going to tear down one himself. So, we're going to just see how how this whole process works. But he's he's willing to work with us and we're willing to work with him. I believe that is it.

Share the hallway comments in regards to going through this problem. Say what? What were you told in regards to going to this problem? Uh that I will be shot on set. Thank you very much. Yes. When I met with him, I told him to come talk to me. Well, outside of that that last little bit, thank you Stephie for being the bearer of good news. You're welcome. They made it, man. They made it off. How is everyone doing tonight?

It's been a busy past five months. Um, I will say this, this keeps me busy. Um I took on this position about five five months ago. This PowerPoint is a is a timeline on of some of the problems, some of the issues that I've encountered over the past five months. Some um have solved a lot of them. I've closed out a lot lot of stuff. Um this first slide here um All right. This one. It was Octo October 1st uh 2025. This is This was my first uh this is my first day. We had 27 code enforcement violations as of today.

Can I get you to speak into the mic?

Oh, people can hear. I'm sorry. As of February 9th, uh, today there there there has been since October 1 until now, there's been I've closed out 833 code enforcement violations. Um, there are currently 74 cases. Um, and I I feel that we that we're getting a lot of cases closed. We're getting a lot of a lot of cases closed out. The reason we still have the reason we still have 74 is that I try to work work people. I know people have lives, they got kids, they got a job. So, I try to work I try to work with um this next slide here 1325. Um, We had 30 Spring Lake employees that took the streets of the Deerfield neighborhood. We gave out 318 bridge compliance compliance uh plaques. There were 120 brand violations. These violations were they consisted of junk piles. They consisted of vehicles in the in the rightway. Um had a couple of high grass. Um it was a variety of things. Now, this violation here, I wanted to give you guys a couple of examples of some of the things that I encounter on a on a daily basis. Um, this violation here is 116 North Rock. The violation, um, when I first noticed this, this was back on November 6, 2025. Um, the residents that live there, I've tried to work with them. I've given them all verbal warnings. And as you can see here in my note here, a letter has been sent. A letter has been mailed out. A letter

has been hand delivered as well. The letter the letter was mailed out and hand delivered on January 28th which tomorrow coming little tomorrow. This individual will be given a criminal citation. So that's the method of how I kind of been dealing with things. We have yet to sit down and see as far as the finding goes of how we're going to find people, what's going to be the timeline and stuff like that. This next house, this next violation is 213 Love Cop Street. I opened this case on January 13, 2026. I hand um I a letter was mailed mailed out. A letter was hand delivered as well. Um the letter was mailed out on fe on on February 5th on 218. This gentleman will be issued a criminal citization as well. Um as you can see in the yard, he he pretty much has a salvage yard in his yard. I've had a verbal conversation with him. So he has a little little more time before he is issued a criminal side. some of the closed violations here which I know you all are familiar with 1159 North North I mean for the past five months I have opened and closed this case uh I' I've opened and closed this case three times um finally made contact with Brandon Alma Murray which I've tried to work on but it's gotten to the point to where um I like I said hey eat enough is enough so finally they're in the works of this week Um they're going to put a barrier of We've also also talked to um a chief our our LPR we're going to put our LPR out there. So anybody that comes out there that

they're trying to um dump dump stuff it will either alert me or alert chief and uh say if if I'm not on ship I'll be able to let a patrol unit go out and if we have to sight that person or we have to take them to jail or we're going to find them we will go from up there. It's a license plate. It's license plates reader. It's the little scanner that these have that they can read your license plates from a long distance.

Yes. Which we currently have two now. Um we're going to we're going to we're going to put put up one. I know I talked to my chief about it. It'll be here in the weeks to welcome. We will have a um LPR that should deter a lot of this stuff. So, um, and as you can see, um, they they cleaned this up last Friday on on February 6, but uh, but like I said, um, it's been a constant thing with with them, and I'm hoping that that this will be it. This is another closed violation here. This is 1631 on Eagle Street. Incident was open on 11625. Uh again it was closed on 1216. Um she had a accumulation of tra bags. It was all over the yard. But um but this is just a few things. I mean I feel like with code enforcement we're really getting a lot of I feel like we're going in the right direction as all my town because I mean we're really getting this place. It's a slow it's a slow like as of right right now with just being and me you know it's a slow it's a slow I would say it's a slow process right now but the fact that we started this November I started this position October 1st of last year and we've already closed out 33 on my case so I feel like we are getting somewhere with it because it's a lot different when you show up at somebody's house and they know that they can be uh not only can they be fine but it can be criminal charged as well. So, I really feel like we're going in the right direction with this. Any questions?

Just to close out that is focus group two. Code enforcement is focus group two in our strategic plan and infrastructure infrastructure. All right. So um focus group one is the AIA infrastructure in terms of all stuff and three starts to talk about housing affordable housing and then four is finally economic development at the end of the day it's really about rising ties we got to look at this citywide we cannot just location we want to be part of the solution not Mr. I have nothing left that covers a lot of

um all right a motion to go into close session pursuant to NCGs 1433181186 personnel there motion to go into session I make the motion commissioner Jackson any discussion all in favor motion carries for session. Thank you all for coming out and staying to the end of this meeting.

We got motion session. Is there a second? I any discussion? All in favor? What is What are we making?

I make a motion that the board of commissioners terminate the appointment of the contract of the town manager and be there. Second. Any discussion? Motion was made to terminate the contract of our town manager. We haven't finished this one yet. All in favor? I can we show hands? Any opposed? Motion carries. Commissioner Jackson,

I'll make a motion that the board of commissioners appoint Dennis England English as interim town manager effective immediately with the authority and duties prescribed by law and subject to the terms approved by the board. I got a discussion is out there. A motion was made. All in favor? I'm sorry. discussion. It wasn't second either. Second. All right. Discussion. Can I ask a question? You absolutely can. So, sir, who contacted you? Um, I don't think I don't think she can ask the question.

You can't do that. We can't talk to to the people out there. We haven't been able to before. Is that is that right, attorney? We haven't been able to do that before. We haven't been able to do that before. We're not going to do that now. That's illegal. We can't do that. You can't express my motion with the people out there in the state to you as well. Point of clarification for the motion ready to pay. Um yeah, just so we know pointing someone as a town manager. I'm assuming that he's not he's a intern, not a town manager. You still have to pay intern.

I understand that. But he's an And we said and we and the the motion was I move that the board of commissioners appoint Dennis England as interim town manager effective immediately with the authority and duties prescribed by law and subject to the terms approved by the board. So we will meet again to approve all of that. But for tonight we want to recognize him as interim town manager. I didn't hear that last question. Okay. I'm sorry. All right. There was there was a lot going on. Okay. All right. M um Commissioner Burgess P second. All in favor? No discussions. She that was a discussion.

Did you have discussion? Please let her know she cannot discuss inside the um commission commission. Um mayor, can we can we have some order? Please. We can't. I'm I'm talking to the commission attorney. I'm talking to the attorney. So

you have to be recognized. you will be quiet and do that because I can do that. You know, Commissioner Cooper, um I just want to say I am indently against this. Um I feel like Spring Lake is going to go back and this could be the dissolution of this community, a community where my family uh were some of the first founders. Um I will also um add that I think this is a terrible decision that's being made. We are allowing ourselves to repeat the same mistakes that got us right here in the first place. We have no plan. We have no foresight. We have people who have not worked with Mr. Rory deciding the fate of this town. We've seen what happened before and we will head there again. This is the wrong decision for this town. All in favor?

I. Any opposed? Motion carries. Any