Council - Regular Meeting

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Good morning, Surf City. Welcome to the town of um Surf City work session. This is December the 19th, 2025 and we're going to call the meeting to order. At this time, I'm going to ask you all to please stand and Trudy Solomon, if you would please lead us in the invocation, and John Kowski will lead us in our pledge. Dear heavenly father, thank you for bringing us all here today. We just really want to um celebrate this time of year with a a heart of gratitude and peace and um love on those around us. Lord, we're thankful for all of the leaders in our community, all the people who keep us safe, all the people who look out for our needs, um who just uh lend a helping hand and and our community is so good at that. And thank you for just filling us our our our town with with those types of people. Um, Lord, I just ask that you uh keep us um take care of our our first responders and their families and give them some time together even though I know we're all busy. Lord, I know there are some people who are experiencing loss at this time of year and ask that you comfort them, Lord. And during this these meetings and these times of of when we have our our town offices open, Lord, I ask that you um just fill our our our rooms and our desks with um all the knowledge that we need and great discernment for the um the good of our town, the good of our community, and how we can love on the communities around us. We ask these things in Jesus's name. Amen.

Amen. [clears throat] I pledge allegiance to the flag of the United States of America. and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. [clears throat] At this time, I want to call on our um Bella from Parks and Brack to come out and describe the holiday business desk decoration contest that we had along with our resident residential contest that we had.

Thank you. Good morning, Mayor and Council. Um, as the mayor mentioned, this week we just wrapped up our first annual holiday decorating competition. Um, I just wanted to say thank you to all of the residents who nominated yourself or your neighbors um, and voted in this competition. So, our best business display is going to go to Sears Landing. Um, and then for our residential display is going to the Bland family of 818 New North New River Drive. [applause] Mr. Bland, would you like to make any comments about your beautiful home and your decorations? Did you do it all?

Uh, yeah. My wife put me up to it. She's like, "You got to do it." [laughter] Yeah. So, my my daughter just uh she had a heart transplant over the summer and she just got back. So, we're like, "Oh, we got to make a big thing for for Rosie." So, she uh she got back home in September. So, she was like, "You got to make sure it's nice this year." So, went all out. Sorry. So, but yeah, it was uh it was pretty much for her. But good. Appreciate y'all. Thank y'all so much. Appreciate everybody. Merry Christmas. Yeah. Merry Christmas. Thank y'all. [applause] Okay. At this time, um, are there any public comments? Adopt the agenda. Do we have a motion to adopt the agenda? I'll make a motion to adopt the agenda.

I'll second. We have a motion and a second. All in favor say I. All those opposed, same sign. Motion carries and there are no public comments. So, we're gonna move forward. We have 19 items right now on the agenda. So, um item number one is facilities expansion project update and Dr. Reynolds has been um doing these facility expansions and Cal Brew will give us our update.

Thank you, Madame Mayor, and good morning. Good morning, council and and public um and staff, of course. Uh just want to give a quick update on the two projects that are uh ongoing. Uh station 25 uh as a reminder uh adding a bay and a vestibule uh to that structure. Um so we are uh at a at a portion in which uh we're going to start seeing some vertical construction soon. Um the building pad is in and concrete footings have started. Uh looking ahead, uh building erection will start in approximately two weeks uh after the slab is poured. Um and the budget on the project is uh generally the same. Uh we're about at about 85% buyout of all uh trade and and subcontractors. Um we're waiting on painting and framing. Um so we are under excuse me, yes, under budget um by almost $150,000 at this point. Surf City Public Utilities building. Um, this one is a little bit ahead. Uh, the buyout uh for trades uh, etc. is at about 90%. Um, the building and concrete uh, has been demoed. Plumbing underground is uh, completed and electrical underground uh, has been completed and footings uh, the slab and roofing. And if you uh drive by there and take a notice, um some of the framing is is being uh completed interior. Um and looking ahead, the exterior framing will begin. So you'll start to see the uh outlines of of new uh windows. The interior framing will continue and the electrical and mechanical roughin uh will be started. Um we are anticipating a completion of Jul in July um of 26. So, moving right along with that. Um, and we are under

budget on this, uh, project by, uh, $712,000. So, that project is also looking good. Uh, we met with Dr. Reynolds this week to start looking at, um, finishing, um, items for the public utilities building. Um, they're going to get gather some more, um, material choices for, uh, staff to start reviewing. And um I think the mayor has uh volunteered her expertise uh to assist in in that um selection process, but um we'll try to remain as consistent as we can with uh existing um facilities such as town hall to have some consistency throughout town. So uh with that being said, that is the update on the facilities expansion project at this time.

Anyone have any questions for Kyle? You may have said it, Kyle. What's the target date on a station 25? Uh 25 uh that'll be about 8 months, I think. Uh once they um get really rolling on it. So um it'll be right right there in the summertime. Um I don't think it'll extend too far into the fall and and that one's going to move pretty quickly and um there's not a whole lot of detail that goes in with that with the new bay being added uh in that vestibule. It's it's a fairly fairly simple construction process. You you said it was under budget. Yes, sir. How much? Both projects are under budget. Um 25 at this point. Um again, budgets remain fluid, but um $146,766.

Thank you. Fantastic. All right. If no other questions, um [clears throat] we don't need a consensus there. We'll just That was just an update. Just an update. Yep. So item number two is the resolution opposing the Fquway Verina inner basin transfer request and Cal will deliver this as well.

Yes. So [clears throat] um what has been happening uh in our region and really the eastern part of the state and and especially um specifically targeting the uh Kayfir River basin um as part of uh DEEQ rules um you can't pull from one water source and take it to another uh water basin. So that's it's called an interbasin transfer and the key word being transfer. Um the town of Fugquway Verina has requested a interbasin transfer uh from the Capefir River but then not replenishing that uh volume of water uh from the noose back into the Capefir. The town of Surf City does not rely on the Capefir River for its water source. However, um having uh adequate uh drinking water um in our region uh supports other communities, economic development uh within our region, etc. So, this is sort of a a regional item that has been uh brought to the town's attention. Our uh council of governments has adopted a resolution and has also asked its member jurisdictions to adopt uh a similar resolution um to be added on as a larger effort to um seek some stabilization in that. And the other thing I did want to highlight um is that removing a volume of of water from that source also um provides the ability to concentrate um different things that are potentially in that water like PAS and um a lot of investment has gone in into some of our neighboring jurisdictions to treat that and um if that concentration level um goes higher then the treatment uh components that have been put in become obsolete. So, um pretty pretty major issue um not directly for Surf City but certainly uh indirectly and uh this resolution in general is to support that larger effort um and making sure

that uh if water is being taken out it's being replenished. Anyone have any questions concerning the town of Surf City um doing the resolution opposing the FUK verina interbasin transfer request? This is just a consensus if that we move forward.

I just had one one quick comment. Um in the actual resolution itself, it uh it's going to be adopted at the next meeting which is in uh January, but we make reference to meetings requested in December of this year. We probably want to eliminate that at it's in the very last paragraph of the uh the resolution. You see that Carla? But the resolution was um copied and it's basically the one that every surrounding town and county has adopted um and or will be adopting and they're aware that it's on our January um consent agenda that if it did pass and I would obviously notify them the next day, but they're all they're very aware of it and are still going to reference that we will be that it's on our agendas. is

okay. But I'll look at it and see. Yeah. Yeah. We're we're asking them to do something after the fact, right, that they can't do because time has already passed, right? So, I'll check with them if if council would like and see if they'd like that change before it gets passed.

Okay. Any other questions or concerns, comments? All right. Um, next item would be the resolution to dissolve GTC AAAC and Carla will present. Okay. This was a committee that was formed in 2018 which had a designated board member from North Topppsil, Surf City, Topsel Beach, and Holly Ridge. And each council would individually vote on their delegate for that committee for three years at a time. Um, so we did do that in 21 and in 24, but the actual committee has not met since 24. And in reaching out and discussing this with the other towns, the other boards are not interested in continuing it. But we did have a resolution to adopt the committee. So we would need a resolution to dissolve the committee. That's housekeeping basically.

Um, is there consensus to dissolve the committee? Yes. Yes. Yes. Okay. Hate to be the stick in the mud here. Um I'm not familiar with the committee. I understand that it says that um their mission has been accomplished. What was the mission? It was a basically they met um monthly to just discuss inner town issues and any other happenings within the town for each one and any mutual things that they could work on. Mayor, if I may. Yes sir. [clears throat]

Um in my experience in in communicating with representatives from that committee, there was um never not to my knowledge an agenda directives um or objectives in which the committee was going to um work on or I think it was set up that they would bring back issues to each individual town and um it really just went went dormant in my opinion. um staff generally was not involved in the committee and they met when when they could I guess. Um so there's there's been no activity with this group uh for quite some time.

And how is this different than uh agenda item number six, the four town meetings? So the four town meeting uh is more of a voluntary um informal type of uh get together. A for town meeting is um at least in in my experience it has been towns in whole uh meet and give updates on what they've been working on or or whatn not. Um usually shared a meal with each other etc. uh and that was all representatives from each town uh if they could make it could attend that meeting. Uh the GTCAC was simply one individual member from each uh governing board from the four towns that would meet.

Is there an alternative mechanism to help the towns coordinate

and inform each other? So, I I'll be happy to address that um in the fortown meetings uh in when we get to that item. Um I I well, if we want to hold off on that, we can. Um but there has been from our knowledge uh other towns that have already moved forward in getting rid of the GTCAC. So um I take that is that the structure of how that was set up is not um desirable from the other towns. So um I do from a professional standpoint think that uh the towns still need a mechanism in which we are u meeting communicating and bringing up in items of interest to all four towns. Um I don't think that we work well in silos. I think is kind of a

okay as long as we maintain some way to communicate amongst the the various towns and with shared interests and priorities it we don't want to give that up but if if this is not an effective way of doing it then yeah get let's get rid of this yeah and I and I sense that um the town the town of Surf City's um opinion on this and and you all as a council can reaffirm this is that um the town still does have indeed have a desire to maintain maintain those relationships especially in in some level of strategic initiative um you know so that we're all communicating working towards common goals that have not necessarily been um presented in that fashion good thank you

thank you I have consensus to dissolve the GTCACCC yes thank you um item number five is appointment of the Eastern Carolina Council delegate and Carlo will present. We'll do four first. Four. Kate Fear. Okay.

Kate Fear, which they're they're basically the same. Um you have your we're a member of both. And for the Kate Fear Council of Governments, um we can do delegate only or we can do delegate and alternate. Um but we are required to appoint that each year. Currently, it's Mayor Bats. Um for the Cape Fear Council. So I need

just to give we meet um about once um a quarter every other once a quarter on Monday mornings for about 3 to four hours. Um we have a a seat at the executive table with with this committee and we just review items between all four counties and any municipalities that are in those counties. Um which is a very informative meeting. I've enjoyed sitting there as a delegate. um they have voted me as the the delegate this year to remain. Um but if we want to have an alternate, we need to know that name. John, would you like to

Yes, I would uh I would uh enjoy doing that, I think. Yes, definitely. Having a delegate is a good idea. I mean, alternate. Sorry. Yeah. Consensus. That's a That's just a consensus. Yeah. Yes. Andy, I'm good. Okay. Um, next item number five, which is Carl appointment of the Eastern Carolina [clears throat] Council delegate, which um, again, basically the same thing. They do not ask for an alternate there. Um, and that's for currently Councilwoman Solomon is filling that position. Good with that, Trudy.

Yeah, same kind of story as the Cape Pier. Um this is um represents the Enso portion of Surf City. Um so we're part of both councils uh you know um both COGS but um it's actually worked out pretty well. It's yeah it's approximately every quarter sometimes a little off more often. Um their meetings are on Thursday evenings in Yuburn. You can dial in but I typically go to their offices downtown Yuburn on Thursday evenings and and meet with everybody there in person. it just goes a little bit better for me to to have some sideline conversations and such and just be there to ask questions and and so I'm fine with continuing that. It's it's actually been um been a good group. It it's changed over the past year and they they they really were it was a group that was not as vibrant, but it's been gaining um attendance and I'm happy to see that. So,

we have consensus for Trudy Solomon to remain as the council delegate. Yes. [snorts] Thank you. Item number six, four town meetings. And we touched on that um obviously, but

um again, something that just has not happened uh since April of 24 was the last meeting that we all held together. I believe that was hosted by Topsel Beach. Um I can find records as far back as 2004 when this meeting was started which at the time was obviously necessary for there the communication was very different then um than it is now but they did meet quarterly. Um each town would and this is North Topsville Topsville Beach Surf City and Holly Ridge and each town would host one of those meetings throughout the year. Um and again it was where we had usually a lunch. Um, we usually would discuss town businesses and then have at I I don't think it started at the beginning, but towards the end of it, most of the meetings would have at least one speaker to speak on something that all towns had in common, whether it be I know we had someone from insurance, we had um I think tax assessor was there at one of the meetings, but just common interests. So, I'll excuse [clears throat] me. Um, I'll pick pick back up uh on this one. And basically my suggestion or recommendation to the board and and again I think I sense where the board would be at with this is that um if if this is a the only mechanism in which we have to connect the four towns um we need to make sure that we are uh at least offering the ability to work collectively work cohesively. uh we we cannot force the other towns to meet with us. Um I do meet with uh my colleagues um somewhat regularly uh the

just the the town managers meet to talk about things. If you recall we we work collectively on our solid waste contract and again I I think that there is larger items in which the four towns should be working on. I don't have a list of those specifically but I would I would say that we need to figure out a way in which we maintain communication um maintain opportunities to uh seek those strategic initiatives that are make going to make this micro region stronger um and each town has assets that they can bring to the table um depending on whatever topic it is that that gets brought up. So, I will be happy to um work with with uh my colleagues again with the other three towns, get their inputs on this because I think that there's some um perhaps directions from other towns that they don't want to do this at all and and I think that that's a disservice to uh our our little area here. Um so again I think that the format in which we were meeting um to go over uh projects you know typically the managers would give this report about what's happening in the town and then like the clerk was saying we would hear a presentation on something um was becoming a burden for folks and I think that they were not seeing any any true benefit out of it and I think that we have the opportunity to identify what that potential benefit is and then communicate that um to the other three towns. I think we will have to be the leaders in this and I think that this council is going to need to uh communicate the the desire for uh that communication uh with the other towns uh to get their get their buy in with it and and understand what they're going to

be willing to do um and willing to take on. But again, I we can't force the other towns to do this. However, um, in my professional outlook, I think that we have to be communicating with the other towns. So, I I don't want this town to sever those communications in any form. There's a lot of new members in some of the other correct governments as well. So, it's probably good to at least

stay on track because it gives everybody an opportunity to learn what's going on in the other areas that might not have been privy to it for the past how many years. So I've have offered um to try and meet with again with my colleagues um brainstorm a outline of how this may look um and if it is developing some potential regional ideas, regional strategies um and bring that back to our boards. I'm I'm more than happy to go to other towns to discuss this um with, you know, hopefully representation from from this board um to sort of stress the the importance of it and figure out what the what the long-term uh outcome of this is going to be because again, I I don't want to see anything go away. Um however, if there's change that's needed, then always open to whatever those changes are. So,

so I would be happy to volunteer to help you in this effort. I've had uh during the campaign talked with a variety of leaders in other towns and the some of the leadership has changed and [clears throat] there is in my opinion an interest in at least having a forum where ideas can be exchanged and we can share best practices. we can uh organize activities particularly when it comes to development infrastructure uh the multi-use path as an example connecting it to Holly Ridge these are types of things we uh we need to have that opportunity

absolutely I I share those same thoughts and would be happy to work with you if if you all would like to see that um my my next step just to let you know was to try and get my colleagues together discuss the town and I've inform formally talk to them about it, but stress the town of Surf City's desire to maintain this moving forward. And I will communicate to them that this board wants to appoint a member to help rejuvenate this this whole outcome of of the [snorts] four towns uh coming together and and getting things done. I mean like I do

we have consensus basically for um our town manager to meet with and start the conversation to to with the other um town managers about the importance of the four town meetings. Um knowing that communication and education is the answer, we just need consensus for him to go back and do so. Yes. Yes, definitely. Okay. Next item number seven, annexation petition town of Surf City and Carla will present.

So we recently adopted an agreement or revised an agreement that we have with the town of Holly Ridge. Um, as previously we did not annex properties in Enslo County, but [clears throat] the town of Sir City owns several properties in Enslo County and Holly Ridge has agreed and revised the agreement. Um, so we're looking to annex three of our properties in and their partial numbers are given and I'll be happy to myself or Mr. Price answer any questions. Well, I was just going to add that these properties are all um essentially related to our wastewater treatment plant and um spray fields uh and subsurface out there, our our infrastructure. And um what we had run into in the past was uh we did a a project that required an electrical permit and had to go to the town of Holly Ridge and then they flagged it and required us to to then um get a special use permit uh from the town adding additional layers of may I say bureaucracy to the process. Um, and by annexing the properties, we we it's not like we're trying to skirt any rules, but we will follow our guidelines from from the zoning perspective um as it being a governmental uh use out there and um Mr. Price can can follow through with his project efficiently um as as we need to. So,

any questions concerning the annization petition? So, these are non-ontiguous, right? Um, no. They're all they're all contiguous parcels in in contiguous to Surf City. Oh, no, no, no, excuse me. They they are satellite um non-ontiguous voluntary annexation. Yeah. And they're zone G, right? Uh they once they get annexed into the town, that'll be the recommended zoning district. Yes, sir.

Yeah. This would just be um because we we will follow the normal process for annexing in. So, this is basically us petitioning to ourselves and going through that process. Um, and then from this point, it would be direct the clerk to investigate and I would go through all the necessary things to make sure everything's sufficient and we would still have a public hearing and go through all the steps. Right. If there are no other comments, do we have a consensus for annexation petition? Yes. Yes.

Okay. Next item, rules of procedure update and that is Carla as well. Um this is in reference to the council rules of procedure uh which has been recently updated but since we've opted to change the times of the meetings um which are specifically addressed in this the rules of procedure it's my suggestion that we just refer to regular council meeting or council work session and that would not state a specific time. That way if at any point you change times again, it would not have to be addressed again. So it's just changing language to mirror what we're actually doing. Housekeeping.

Yeah. Anyone have any questions? If not, do we have consensus? Yes. Yes. Andy, I'm good. Yes. Sorry. Um item number nine is beautifification enhancement committee appointment. and Carla will present.

Okay. Uh beautifification enhancement committee. We currently have three openings. We have advertised per um the committee handbook and we've advertised that twice. Applications have been sent to council for review and so we're requesting appointment to go on the consent agenda. There are four applicants and it was requested that we vote by ballot. So I will hand those out to you. The expectation is we pick three out of four.

Correct. You have to pick three out of four. I'm I'm wondering are any of the applicants in the room? No.

Okay. [snorts] You're welcome. [clears throat] [snorts] Okay. So, we do have a majority for Barb Wessleman, Renee Bennett, and Kim Padshaw. And I'll put those appointments on the consent agenda for January.

Have consensus now to move forward with those that were nominated. Yes. Yes. Thank you. Thank you, Carla. Um, item number 10, the personnel handbook language update, and Lydia, [cough] our [clears throat] HR director, will come up and present.

Morning, Mayor and Council. So, this is just additions to our personnel policy that the League of Municipalities on a couple of the cases have recommended that we put in our policy because we did not have them. And the others are the addition of the appendix for our career ladders which are in place and have been in place but they have never been part of the handbook as part of the for everybody to see. So the that's what we're asking to do is add a language um concerning workplace conditions which is the reasonable accommodations for individuals with disabilities and the pregnant workers fairness act and then adding the two definitions uh about career ladders that are not currently in the policy and then just the uh addition of the four departments facilities and grounds fire police and public utility career ladders to our policy.

This was a recommendation by the U as far as the reasonable accommodations and the Pregnant Workers Fairness Act, that would be from the League of Municipalities, which is where the the recommendation for the wording on those come from. [snorts] Anyone have any questions? Um, out of curiosity, are there any implications of these additions or changes in terms of personnel costs? Not with these. No. Okay.

So, what we what we do during the budget process is identify employees that are specifically on career ladders that would um potentially qualify for advancement throughout the through the next fiscal year. So, if uh Chief Wilson, just because he's got his uniform on today, you know, if if he has firefighters that um would potentially qualify to go from a one to a two, he's going to uh represent that uh early in the budget process under the personnel side of it. So, we would then know what the fiscal impact would be uh year-over-year.

This is just showing the standard of what is required to move um up the career ladders within each department. Okay. And I assume that it has implications then for retention and also for for recruitment. I mean having a career ladder is an important part of of rewarding employees for success and and motivating them to to strive for improvement. So absolutely good. I'm sorry. These are not new. They are just now being published into the

I think fantastic. [laughter] We have um like in facilities and grounds that would be one of our newer career ladder opportunities and especially to have meaningful impacts for certifications that can advance an employes's ability to function at a higher level, do more things for the town that um there's that that tradeoff there that we would see. And um the other side of this is that it it creates that path forward for somebody that again we'll use the fire department that that may want to make a career out of being a firefighter but may not want to uh obtain an officer position. Um the the other side of this is the merit-based program that we work. Um so these employees on career ladders um even though they still have goals that they have to meet during their evaluation period um would not be subject to merit-based pay. They would be subject to advancement through career ladder. So just as a a reminder and how that structure would work.

Thank you Lydia. Is there any any other comments? If if not do we have consensus to add the language to the personnel handbook? Yes. Thank you for doing this Lydia. Thank you. Thank you, Lydia. All right. Next item is the spring event and Mr. Frank with our parks and rec director will present. [clears throat] Good morning, Mayor and Council. How are you? You good? Hope you are. [laughter]

Sorry, it's habit. Um, I just wanted to present, you guys should have the same presentation in your packet, but with pet and parks, recreation, and tourism staff, we've [clears throat] identified April 18th as a day in which we'd have the least amount of um resistance from staff to be able to accommodate a large event and the time and location uh or just again through conversations. uh coming up with a theme was a goal through P set uh and obviously we want to try to replace uh an older uh event and in Bridge Jam. We're not going to be able to do the same exact thing obviously, but we've listed out some of the preemptive work done by staff and pet to try to funnel our entertainment vendors and activities at this event. Um and really just looking to make sure we have consensus to move forward. um staff has identified the people they want to um kind of lock in moving forward, but just looking to make sure that you guys are on board with this as is as presented. And I'll just add um as part of the annual planning meeting last year, the developing a shoulder another shoulder season event uh was a an objective for the promotion special events and tourism committee uh to come up with. So the general idea of this being batted around within the committee and being brought uh forward um specifically to highlight that shoulder season to bring e additional economic activity within the town um and then also addressing just the the general desire to get out and do things in the community um and and hopefully uh bringing in both out oftowners but also something that our residents can enjoy as well. So I just want to add that. And just to clarify a couple things, I know there might have been some concerns regarding the boat ramp. Um, Belle has done a good job with our events this

past summer kind of reconfiguring the setup. We are going to make sure we staff a volunteer or work with PD if needed to make sure that vehicle entrance to the park is um monitored so pedestrians can safely cross that area. um putting all of our activities, all the um porta johns and any event related items within the park so you don't need to exit the park at any point. Um limiting the crossover to that boat ramp entrance. Um also making sure that that area stays open for the businesses to function and still allow participants to go back and forth through the businesses and the event itself. And this is a free event, correct? Mhm.

See, by looking [clears throat] at the map that the it's it's it's really wise to put the food trucks where you're putting them Yes, sir. there because that that impedes problems with the boat ramp. If the boat ramp was still open, that creates a big problem. So, eliminating them and putting them where they are is probably perfect. Yes, sir. Good idea. So, uh paid parking starts then. Are we going to we're not going to wave the paid parking fee for folks parking there? No sir. Um the food trucks, we will speak with pivot parking to make sure that's not an issue, but as far as um people coming to the event, we're not waving the paid parking fees.

And do you have a a budget in mind? And are we going to be able to offset the the cost of the town with fees and for vendors or or selling tickets for games and things like that? Is that will we anticipate zero impact on budget or are we allocating budget from

so through fund 21 um this was this event was budgeted for um we do have a vendor fee of $25 to participate our food trucks pay that and then um as far as a a net zero uh that is not necessarily the goal but we are looking to provide a free event for the for tourists and the public to come to this park. Um the approved budget has already been discussed and that was prior to my arrival, but um that is all allocated. Do you have a number? Um I believe it's 10,000 total and I don't believe we're um exceeding we're coming close to exceeding that at all.

I think you've done an outstanding job with the free events like the movies in the park. Um meet me at the you know meet me at the sound. I mean, those events throughout the summer have been awesome for the community. Large crowds come. It's free for everyone. And it's a it's it's a service that we're providing to not only our residents, but to um people that live close by or just here for the weekend to come out and bring their their children and their families to have a free a free event in our town and then go out and have dinner or enjoy enjoy the rest of the evening afterwards. So, so one thing though, did you know that April 18th is husband appreciity day? [laughter] So, so wives bring their husband.

Unfortunately, you ruined the surprise for me, but [laughter] you were going to have a kissing booth. Right. There you go. There you go.

Wives only. No, [laughter] and I I did want to comment on that a little bit and and some of the work that um staff has been been working on um and also to bring pet involved in in the whole um assessment of events and you know we've been able to look at some uh data especially in the shoulder season in which paid parking is still in effect and some of our high points uh within paid parking revenue in those shoulder season and months that paid parking is in effect have a direct correlation with events whether that be townled events or private events. Um so we we will look forward to um hopefully working with PA implement a um scorecard per se on on every event that the town does uh to provide the um financial outcome as just one element to the the over overall success of what a program can bring to the community. So, um, we hope to to continue to refine and hone in on that with, um, suggestions from our pet committee, especially ones that are on that committee that really love the data analysis side of of all of this. So, we have good tools in place, good partners with our, uh, local businesses to help us um, generate some additional data sources. And um I think that after hopefully by the time we get done with this event, we'll be able to um identify generally speaking what the what the report card would be on it and how the town did overall. So

April 18th is a Saturday.

Yes, sir. way. The only comment is when we have town events like this and we have a concerted effort and we using our space and our resources. Um I always think about what we can use that time and energy for and representing kind of education needed in the community and it is the beginning of the beach season so to speak or whatever. And so you know having I don't know the fire or police or whatever out I know they're out there a lot, but any kind of um message that they wanted to share with anybody walking by or whatever and even the turtle hospital maybe be having a a tent or something and talking about what we need, you know, what we want to encourage residents to think about as turtle season approaches and things like that. Just as we have people in a in an area, what can we just offer a presence for? So, so

it's um it's recently come to light that we can be more proactive about that in incorporating our own either services, education or local businesses. Um there's a concerted effort to make sure that moving forward any external event we ask if we can be a part of and then any internal event we promote ourselves especially with a themed event like this.

Okay. I was thinking with summer coming, you could certainly talk about turtle news and things like that and what um we'd like the oceanfront people to help us with. And then I think about um our ocean rescue team, you know, what are they really responsible for and doing out there and you know how because that that um effort has changed over the past couple years and I think it's something to brag about and of course we talked about bike safety, you know, every time we turn around all the stuff. So yeah, and Frank and Bella have identified a great opportunity to work with Oceanfest and they're open to it to have

um you know a booth, a tent, whatever you want to call it. And even just to highlight something like a storm water project or some of the efforts that we have underway with resilience or beach nourishment or like you're saying all the other ideas, there's there's such an opportunity to be able to do that throughout all events, not just ours. Um right. Okay, good. So yeah. Yeah, I think we've identified that there's an opportunity to educate uh as passively, you know, offer it for um people that are attending our events, just make it available. Um and then being there, being present uh as far as representing the town in that capacity is the easy part.

Yeah, I think the visibility is is important and you don't know what you don't know and so if you walk by and have that opportunity. Yeah. Thank you. [clears throat] There are no other comments. Do we have a consensus to move forward with the spring event um backyard beach bash on April 18th? Yes. Thank [clears throat] you. Thank you. Thank you. All right. The next item is um Melissa, our finance director, will pre present November financial report.

Good morning, madame mayor and council. So, as part of our audit process this year, we sat down with Austin, who is our direct contact for our audit firm, and um we have to go over all our procedures and internal control things. And one of the questions that came up was, "What do you present to the town council so they know your financial situation on a monthly basis?" Um, and most times some of you guys stop in and see us, but there's never anything formal included into the minutes. So, one of the improvements that they asked us to present to you guys was a formal report that shows you where our revenues are each month, where our expenditures are each month. And this month, you only got an expenditure and a revenue report because we're in between fiscal years for the audit. But once we get last year closed, next time part of your pro um packet will also include a trial balance. So you can see our balance sheet accounts, how much cash we have, that type of thing. But right now, we had anticipated you having the audit before today and you don't. So if you would have got that report, you would have been calling me and say, "The audit says you got $18 million and your report says you got 16 because there's year-end transactions." So we just didn't include them this time.

One reason why we don't have is because of the government shutdown.

So we receive grants. I love them. and they require at certain thresholds single audits. And although we like to say we receive those grants from the state, they're federal funded grants that passed through the state of North Carolina. And even though your audits are supposed to be due October 31st, before the government shutdown, they had still not produced the compliance supplement that lists all the steps the auditors are supposed to take to ensure that we are complying with the grant agreement. So when the government shut down and no compliance supplement, they could not finish anybody that got grant fundings audit. So as of yesterday when we were on the state treasurer's conference, only nine counties have been able to submit their budgets. Out of 100 out of 551 municipalities, only 198 have been able to submit. So once the government reopened, it took a lot of time to get reopened. So, the compliant compliance supplements came out about two weeks after the federal government reopened and they immediately submitted our um once they got finished and we didn't have any findings. So, we were in compliance with the supplements. But, um they submitted it last week and they came back with some questions. They had questions about the banks channel um grant that we had. For some reason, the LGC felt like that money came from FEMA, which it did not at all. So, we've had to be in communications with LGC about the funding source for that, provide grant agreements, all those kinds of things. And they finally agreed that that money was not from FEMA. I'm not sure why they felt that money was from FEMA, but so it was resubmitted this morning. Um hopefully since they've already had questions and we've

addressed all those questions, they will accept it within the next week hopefully. Well, it's Christmas time, so maybe they'll accept it by January. So, it's very un it's not efficient for us because we have to maintain 2025. It's still open, which means everything that's on your books for 2026 is out of balance. So, we're maintaining two years and now you've wrapped a budget process up in that as well. So we have three problems going on in our finance system right now. So three headaches right now for you. Three headaches.

But this is the financial report. One thing Austin did talk about was because this may not be the most friendly looking report. They want to make sure it's not altered. So what we give to you is directly out of MCSJ. They don't want us to make it look prettier or change it in any way. So if they were to take this out of the minutes and run the report for the same month, they would get the same numbers. So they want us to make sure that this is unaltered when we give it to you, that it's a system generated report. Um MCJ, MCSJ, that's our finance software. What is MCSJ?

It's our finance software. I don't know what the acronym stands for. Frank, what is the acronym? Software is good. Software is good. What? That was the first question Frank asked us. What does it stand for? I said, I don't know. I never looked it up. So, he looked it up for us. He looked it up. [laughter]

Um, so yes, that's our financial software. So, this is a report to you. If you have any questions, I'll be glad to answer them if I can answer them. If not, I'll make a notation and get back to you. Um, this needs to be included in the minutes. And I will tell you where some of this is coming from. 15 years ago, only two governments in the state of North Carolina had ever been overtaken by the LGC. If you're not performing, and as a board, you will not do what you're supposed to do. The LGC will come in and do it for you. And that is becoming more prominent. And the board say, "Oh, I didn't know. I didn't know." So auditors want to know that you know.

So Melissa, we get were we going to expect to get this every month then? Sir. Yes sir. Okay. And it becomes a public document and is will it be on the website? It will be part of the agenda packet in the minutes. Oh it's accessible to anyone that wants it. Only thing I would say and um would be we'll we'll add a list of accounts um like the first two numbers so that you all have a better understanding and you don't have to go back and try to seek the sources like 10 is general fund or 21 is accommodations or 30 might be water or sewer but um we'll we'll do that I think would be okay.

Yeah, we can get you a chart of accounts that say here are your phone numbers, here are your department numbers. Sometimes you can guess, [laughter] but if you have any questions, I'll be glad to answer. So this this represents the first five months of the fiscal year. Then as of November 30th,

that doesn't mean all the expenditures that we've acred are reported, right? in that if we did something in November, but we aren't going to send a check until December, we we're not going to see that here. Correct. Or if you sales tax is a good example. Your sales tax will be behind drastically because the state is three months behind in Oh, okay. So, our sales tax number here, although it's end of November, it probably reflects receipt of uh our part through September, right? Yeah. Okay. So it this is a nice snapshot but don't make decisions on it. Correct. Yes.

Yeah. Um there's one line item here. Uh sale of timber. Uh I'm assuming that is David's That is correct. That is enterprise fund. So we stays there. Yeah. So we'll keep Yes. He's selfish that way. Um [laughter] but but no the the land in which that is operations are being conducted on are all all t part of the enterprise asset. Um so we we allow him to keep those monies there. So so we have so nice of you.

It is we have we have to allow David to keep all his money. Um, most of your grant agreements that you receive for enterprise funds clearly state that you cannot transfer money from those enterprise funds into other funds. So, indicating we've tried to What page was that? [laughter] What page was that on what page was that on um Andy? Which uh it's 31822 461467203. So if you go down H3, are we going to see this every year then?

Um well just yeah so we'll have a um it's under a full management plan. Um so as we timber we then come back and reforest. Um so yes the thought is uh land management and uh you know depending on the the timber market that that number will will fluctuate and we will select uh portions of the land to harvest when uh timber prices are good and and try to be as strategic with that as we possibly can. So, we've got a good good consultant that uh provides that that oversight and um his payment is uh taken from proceeds uh from the timber sales.

Anyone else have any questions concerning the November financial report? I like it. Thank you for Yeah, it was great. All right, if hearing none, do we need a consensus to accept this or it was just a presentation? Yes, consensus. Yes. Okay, I agree. Yes. All right. Um, number 13 is also Melissa and that's the fund balance policy. Good morning, Madame Mayor, [laughter] council. Um, so we've talked about the fund balance policy since the first morning I walked in Kyle's office. Um, which was when? March. I don't remember.

Yes. There's been way too many things. Yes.

Um, so we'll get started. Um, I'll give you a little bit of background on the fund balance policy. Um, like I said, it's been a discussion since I got here. We really began the process back in January of 2024 when we had our retreat and talked to you guys about it. Um it's a recommendation for the from the LGC that you have a fun balance policy. It's also a recommendation from our auditors. Um we discussed the goals with you guys back in 2024. We reviewed so after we left you guys. We reviewed fund balance policies from other towns, cities, counties. We've had lots of discussion with the auditors. Um we've done a lot of examination and deter uh how do you decide what you actually need? Um so we determined the for a formula that I deter determined my formula that I feel like represents the true needs of our town. Um you're probably not going to agree with that and I'm not going to be upset, but I'm going to show you how I got where I went. Um we're always sitting ducks for a major catastrophe and we have to address that. Um we had additional discussion with Chazo from Fresh Trion. He's our financial advisor. Your fund balance is going to have huge impacts if we need to go for bond ratings and borrowing money can impact the um interest rates that we have. So it's very important and over the last few months we have developed the proposed policy that you are presented today. So, um, we're gonna, so a lot of terms have been thrown out a lot of times. So, I'll pick on Hugh USA. Fund balance is reserve. And I'll say yes because it really is. But when we start talking about technical terms and how we're going to name them and things like that, fund

balance is not reserved. So, we're going to try to clear some of that up for you guys today. Um, when I took governmental accounting at the School of Government, Gregory Allison teaches it and he's extremely passionate about government accounting. He's been there over 30 years. The first thing he says to you is, "Forget everything you know about accounting. Every debit and credit you were taught in college, you're going to do the absolute reverse and you're not going to do anything that you learned in um, college." So, that was very interesting. Um, so let's talk about what a fund is. We talk about fund all the time. So finances in government is run based off funds. So a fund is a distinct physical and accounting entity. Essentially a self-balancing pool of money with its own assets, liabilities, resources established to carry out specific activities achieve particular objectives according to set rules like the general fund. Special revenue funds, capital project funds as defined by the North Carolina general statute 159-12 and related statutes. These funds ensure money is segregated for designated uses such as schools or utilities, preventing co-mingling or ensuring accountability for special government funds. We had a lot of conversations with our auditors about co-mingling funds. So there are three types of funds. Governmental account governmental funds, proprietary funds, and fiduciary funds. So let's talk about governmental funds. So there are five major types of governmental funds. Capital project funds. It accounts for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by priary funds or fidiciary funds. Capital

outlays financed for the general obligation bond proceeds should be accounted for through a capital project fund. So a good example of this is the fire station we're doing now. When we have first started that project, we co-mingled it up. We said, "Okay, here we got a budget for all three of these facilities, the fire station, the public works building, and what's the other? The community center." And the auditor said, "No, no, no. You can't have David's project in with the other two." So, we had to establish a separate capital project fund for him. Um, debt service funds. This would be if we had a major amount of debt, we would set up a fund and go ahead and set aside the funds to pay those payments. Um, the general fund, which we have, it accounts for everything that is not categorized as something else. Special revenue funds account for the proceeds of a specific revenue source other than debt service or for major capital products that are legally restricted to expenditures for a specific purpose. So you have to as a board set these up. I'll get example is your beach nourishment fund. You have to identify the source and the expenditures and that's the only thing it can be used for. And the last one is a permanent fund which is not something that we have. Your proprietary funds are either an enterprise fund which is self-explanatory. It is it's like we run it like a business. We're here to make money in those funds. Um we have water, sewer, and storm water. Um they have to be self-sufficient. We can't take money out of water and put in sewer. vice versa. We can't decide that we're going to make the water fund cover the extra expenditures of the general fund this year with a transfer. We can't do those types of things. Um internal service fund, we don't operate

any of those. A good example of those would be uh like a garage that Enslow County or Pender County has. So they provide repairs to the cars for the other departments and expense it out to them. You said we do not have that. We do not have not yet. Not yet. It is in the plan. Okay. Further down the road. And then fiduciary funds. We don't have any of these. This is where and we don't want any of these. Um this is where we're managing somebody else's money in most cases. A good example when we were at the county and you have fostered children that

don't have we run their money. Um, a lot of people have these for your postemployment benefits which we don't offer. So, so let's talk about fund balance definitions. Fund balance is the different between difference between a government's funds, assets, liabilities and it represent representing its accumulated financial strength categorized into non-spendable, restricted, committed, assigned and unassigned. So fund balance is your total assets minus your liabilities. Non-spendable non-spendable is things that are tangible that you own. Like we don't maintain large inventories now, but we're probably going to go to that with the water system and that would be booked as an asset on our um balance sheet because it's got a huge value, but you can't spend it. So um restricted, it's used and limited by ex uh external parties. Uh your grants will be considered here the PAL bill. Um most of your grants are reimburseable though. So you don't get your money until after you spend it. Um committed this takes formal action by the highest authority like the council. It dedicates it for a specific action. So like your beach nourishment, y'all said, "Hey, we're going to take 10 cent off the tax rate and you've got to put it towards the beach nourishment project." And then assigned its intent to use for specific purposes less formal than committed. So like your next year's budget, that's assigned. Um if you set a budget for the fire department expansion, that's assigned. And then unassigned is what is under your control to use for anything you would like. Um it's available for any purpose.

So terms you've not heard me say and all of those is reserve funds. So reserve funds in local government are designated savings accounts for specific future expenses, primarily capital projects or unexpected financial shocks established by local boards through thermal formal resolutions to ensure funds are saved and used transparency for the purposes like those eligible for bond issuance. Improving physical stability and planning. These funds provide financial resilience allowing savings for large future needs or emergencies. So we currently do have two reserve funds. One is the disaster operation reserve fund which is got just over $775,000 in it and then a capital reserve fund which has just over 1.3 million in it. I think the first year I was here or maybe was the was the second year that you guys had established that. And how that was established was as debt came off your general fund, instead of using that to balance the budget, we transferred it over into a capital reserve fund um to help address future capital needs. So, you got types of reserve funds. You have operating reserves, capital reserves, debt service reserves, and rate stabilization reserves. Those are the types of reserve accounts that you can establish. Now, when it says operating reserve, those are pretty much established for people like David. So, he could bank his savings now. So if you had a major catastrophe and your water collection was wiped down to 50% of what it is today, he would still be able to function. Capital reserves, we know what that is.

We've talked about debt set off rate stabilization reserves. So we kind of that's also towards David, but we've kind of implemented that into a tax stabilization that you'll we'll talk about a little bit later um as part of our policy. So we pulled the audited documents as well as the fund balance policies if we could find them for every coastal or riverfront town. Well, what we believe is every coastal and riverfront town in the state of North Carolina. So, this tells you what their fund balance is, what the percentage of their fund balance is, if they have a fund balance policy, all that fun stuff. So if you notice we, you know, we like to say 80 some percent 80% is high and you have people that have well over 100% some people that have over 200%. So we did look at all our peers. Um I find it very interesting that so this is pulled from the LGC website. They compiled this information for you. So this would be for 20 fiscal year 2024. Um Ballhead Island is not reporting. Um so then we compared us to similar populations. So Surf City Cities right in the middle. Um we put five picked five that had lower populations than us and five that had higher populations than us. So you can see their fund balance uh fund balance percentage. So a lot of these are in Carter County. And I would like to point out Carter County assist with the beach nourishment projects that go on. We do not really have that option with

Pender or Ensley. So tax revaluation has a huge implement implement that word anyway on the process. And of all those towns we listed, only us and these three are on a eight-year pro uh cycle. And of course, Topppsel is part of Pender County. So, how do we determine what our unassigned fund balance should be in my opinion? So, Kyle and I have really analyzed this back and forth a lot, a lot of debate. Um, so we what does it look like after a storm? What do we lose? What do we no longer have? So we looked at our assets who total over just over 25 million. And we said, okay, what if a storm wipes out 40%. That's still not a majority. That's less than a majority. It's not even half. 10 million dollars of our assets would be wiped out. So we got with James and looked at what the Sanhal cost us last time in Hurricane Florence and we looked at the CIP and inflation and figured what that same sand would cost us today. We did the same thing for the emergency response and the debris claim. And we estimate that a major storm would cost us $26 million and you have 19. So based off that, your fund balance percentage should be 137%. Now, I cited all my sources here. Do I believe you're going to approve a policy that says 137%. No. But I don't think it's unrealistic for

you to realize we would be wiped out in two months with a storm. So the proposed fund balance um policy that you were given today would set ours between 75 to 100%. It also states that the town manager would keep you informed of the fund balance at the end of each fiscal year and he will but your auditors are required by law to come and make that presentation to you. Um if the unsigned fund balance is near the lower range the town manager and the finance officer will make presentation recommendations of corrective action. It establishes a policy to direct and the proposal. It establishes a policy after we receive the audited number. Let's say it's $2.5 million. 50% of that would go into our capital reserve. Um the council would formally establish a budget stabilization reserve fund at the end of the fiscal year. This fund would receive 25% of that of any prior year operating surplus as calculated as part of the prior fiscal year audit. And then it establishes a policy to direct the remaining 25% of the annual operating surplus into the disaster oper operations reserve fund because we all know $775,000 is not going to cover maybe a week in a disaster. Um, and we would of course re-evaluate this as we build that, if you agree to this, as we build your disaster operations fund, we would probably adjust these rates. If you have any questions, [clears throat] I will try to answer them. Well, and if

I may, Madame Mayor, real quick, I just wanted to include, you know, we have just this looming unknown that I so wish uh we had completed because I think it changes the the total financial landscape of what we are looking at in the future and what we're be what we're able to plan for and that's the Army Corps project. Um when that is in effect and the assignment of responsibility is converted over to the federal government as opposed to the local government. Uh that's going to play a big piece into what we would anticipate. Um, I'll just use it the 137. Um, we would not be responsible for those uh sand hall projects, emergency repairs. It all falls under the the FCC uh funding um that gets enacted after a name storm. That doesn't mean we won't have operations and maintenance to uh address immediately following that event. Uh but if if we were a year down the road and looking at this policy and we had 6 million cubic yards of sand on the beach and were under that opice of the coastal storm risk management program, I think this looks much differently. Um but at but right now you know those are the re those are generally the realities in which we are looking at. Um, so I just want to kind of bring that up is like this is like I don't want to say a cloud by any means, but it's just something that's hanging

out there that needs to be completed and resolved before we start well say before we do anything but as just a consideration in regards to the fund balance policy and where monies are being directed. Um, you know, the the capital improvement uh fund like like Melissa had mentioned was set up in in extremely good intentions. Uh, but what we've seen is we have not designated uh additional debt and therefore revenues going into that fund are are not really existent because we're nothing's coming off the books. We don't have anything on the books in the general fund for um for debt service. So that's kind of just to add a little bit of background to it. I think Melissa's done a good job at at her research and in a lot of this stuff and the policy itself can go in in a lot of different um directions certainly. Um, but I think that what's been presented is um a very conservative uh policy for council to consider and I would say that this is a todo item uh once we get this beach project uh completed and we are under the the CSRM uh oversight. You know, I don't think this is a oneanddone type of thing. we got to continuously work on this policy and the future financial health of the town. Um, which is which is a a positive future at this point. Um, so I just want to provide the additional insight there as we before we have our deliberations and discussions about the policy. So

I also point out something. Please do.

So we're instead of talking about the capital reserve, we're trying to develop a capital improvement plan that goes out 20 years. So you guys and that's in the early stages and it's going to take a lot of time because that's a totally new concept that you're asking people to visualize your town in 20 years and it's doubled in five. Um so that's what David says. Um part of that part of our thought process is we would say to you, okay, each year 3 cents of this year's budget is for capital improvement. By doing this, we would be able to say, okay, we're not going to have to put those capital items into the budget. They're going to be in the capital reserve budget. And hopefully if this worked correctly and stop me if I'm wrong like you know every year we're going to buy a certain number of police cars that would already be set aside in the capital reserve. Um it's one of the many projects that we're working on and the reliance on FEMA. So everybody says oh during the storm FEMA is going to show up and they're going to pay us. First off they're not going to pay us direct. They're going to pay the state of North Carolina. And in Enslow County, we had a $10 million claim for debris and FEMA reimbursed the state of North Carolina. The state of North Carolina sit on that payment for nine months before they sent it to us and we had to fight for our money during Florence. side.

And I will say as we we discussed it also too at the last TISPC uh meeting is this um FEMA reform act of 2025 um is going to change some of the things hopefully in a positive for efficiencies but it's just another um sort of political external uh thing that that could have an impact on what we do. James and I have started looking through um each section of that that reform act so that we can provide comments back to um you chair Snyder and and he can funnel it through our uh TISPC lobbyists. But you know that's that's the other thing is is we're going through this this FEMA FEMA reform and um reliance on government on federal government is going to be something that is uh challenged and debatable I think as administrations change. So, um, again, it's a it's a system in which we have we understand because we have experience in it, but it's never predictable, I would say. So, and FEMA only picks up 75% of your cost. The state of North Carolina reimbures you the other 25%. A lot of other states do not do that. And North Carolina with changes in direction can also decide they don't want to give you the 25% and then we're on the hook for that.

[clears throat] But if you have any questions about the actual policy, Kyle and I will attempt to assist. [clears throat] Recommendations.

Can can I I I'd like to make a comment and ask a question. I think I'm going to make the comment first. We are creating three funds. Two already three new funds. Two already sort of exist. One is going to be new, the stabilization fund. Um, and I think each one of these funds needs its own policy with regard to where the money comes from, what the target is, uh, and how it can be spent. So, separate, don't have one policy, have four. Now, they they could look and breathe and be alike, but and and philosophically they should be. Uh though, if we're going to sequester specific uh sections of our reserve requirements, then we ought to have a policy for each one. That That's it. Um if we had four reserve funds, can you give me examples of how the general fund would be spent on what? Your general's fund is normally is your operating budget, right?

So, it's spent on shortfalls in budget by a timing thing. For example, we don't collect all our our property taxes all at once. They don't come in until January. So, we need money in reserve or we need money in the in the checking account to pay for salaries while we're still collecting the new revenue. That is that that's one one reason why we have this.

Yes, but all your money does sit in one checking account. So it so in reality because we have plenty of fund balance we don't have to rely on other funds. But let's say you didn't have that fund balance and you were a town or a county that didn't have a surplus. As you collect taxes it grows. But at the beginning of the year of course you don't have any tax revenue. You're going to use other funds money because it's sitting there. your checking. What I'm saying to you is your checking account on your books will be in the negative, but you're not in the negative because you're using

somebody else's money. So, could you give me two examples of when council will be asked to approve a budget ordinance amendment to spend money in the one the general fund part? The general fund is its own entity. If we wanted to buy a new vehicle that you didn't budget for, that would be a budget amendment. Why wouldn't that come out of the capital?

It was unaccounted for. So, just for example, if uh we had a a vehicle accident with two police cars and and we weren't anticipating buying those two, it would it would come out of the general fund because that capital would be set aside for future new vehicles to add to a fleet as opposed to um replacing existing when it didn't meet its useful life at that point. I hope I'm answering that correctly.

Yes. But I can give you a different example. I'll give you a good example that I'm going to come before you now because we got so much grant funding and did not realize how many single audits we were going to have to conduct. I think we had to do three. A single audit cost us $4,000 a pop. So, we only budgeted for one. So, I'm going to have to come back to you and say, "Hey, I need $8,000 more to pay for the audit." Okay? So, that's an unexpected operating expense.

Your general fund is your operating budget. That's what houses your operating budget. And then another good example would be if Chris underestimated his supplies for your beach accesses and he ran out of supply money, he would have to come back before you and say, "We have a short file in operating supplies. We need additional funds."

Okay. Unexpected operating expenses. That's what that fund is intended for. So the fund balance ought to reflect what our operating costs are. So the question I have then Melissa is how do you calculate that number the operating expense because there's different scenarios for example one is the total operating budget which is 19 million and change the other is the operating budget for recurrent but uh not for budget transfers we have the beach nourishment transfer of 2 million so it's it shouldn't be based The denominator shouldn't be 19 million. It should be 17 million. We also have other transfers that we we take out. So are which what is the denominator you are using to calculate the 75%.

I would I personally in my opinion would be I would use the 19 million.

That's not necessarily the uh the the Gazsby approach. It looks at operating as opposed to regularly scheduled transfers. So what we're doing is we're calculating our reserve requirement based upon regularly scheduled transfers that are coming out of different areas. They're not operating expenses at all. So that that's that's a little problematic is what what is the denominator and how it should be calculated. So when we present a fund balance number to you that is a number prepared by our auditors. So they would have backed out that transfer. So when we give you an audit to you it has a fund balance number that is they have taken that into account. No, I I I understand that. The question is when we say we want to have 75% of our operating expense, what is classified as operating expense? Does it include the regularly scheduled transfers or does it back those out first?

We will take guidance from you as to what as a book council as to what you want us to do. If you want do not want us to I feel like I'm gonna make that in my personal opinion. I'm going to make that transfer. So I need to include it. Now Gazsby may say not to do that as a board. If you do not want us to do that, then we will not include the transfers when we determine the fund balance number. So that's that's a decision we're going to have to make is how do we calculate uh the denominator when we calcul and then we have to set the target and the last thing we need to do is establish clear guidance as to where the money comes from and I would encourage us to use it. It comes right out of general revenue right to fund it. Okay. and then how we can spend it as a council. What are the the guard rails so to speak? Um can we transfer it to the multi-use path as an example?

That would be part of the capital improvement [clears throat] that we would be planning in advance for. Yeah. Right. Well, then that wouldn't be in the general reserve or the general fund. It would come out of capital. Yeah. If if it's been if the money has been budgeted within capital to fund that project in in a whole then then absolutely it would be fully programmed and and the project budget would be established out of that capital reserve fund. Um in that sense

and we could transfer general revenue I'm going to use the term reserve because I'm used to using that. we could transfer that to the capital reserve account as a source and then from the capital account into the fund 55

as as long as um you all are making those decisions as they're presented and um I think absolutely and and uh even though they become assigned that it does not mean that through action of this board they can become unassigned or assigned in a different fund. Um, you know, just for the the general sense, like if if we said, well, you know, okay, we we want to take some out of capital and put it put it into the stabilization or emergency preparedness and response, you you all still could do that. Um, so long as you wanted to to accomplish that goal. Um I I think that what you're saying about having the policies for each one of those funds is absolutely something we we can do. Um you know and then we will present back to y'all you know depending on what that percentage is you know if it's 75 to 100% uh where do where based on our priorities where is council going to want that next year at 75 or you know we present it back to you and say we're at 85 etc. and we'll be able to have you all will be able to have that opportunity to make those types of decisions. Um, which you know I think would would be welcomed in that sense. So,

right. So, you the flexibility on how these monies are allocated will be left with council uh as opposed to setting them in stone. So we retain flexibility within council to to make uh the appropriate decisions given the set of circumstances. Yes.

The the and the last comment I'm going to make because I don't want to drag this on too long is the source of funding for the three new accounts are predicated on a proportion of a surplus. These surpluses vary over time. they and they may not happen or they may happen in much larger amounts. I think it's appropriate to establish a funding target with respect to the need rather and and fund it as a budget line item as part of the annual budget process and not rely on surpluses alone. Surpluses could generate the revenues to allow us to fund that. But when you start to allocate uh based on on the amount of your surplus uh you lose uh all sorts of uh fungeability and that that's it it you know so if we do generate a surplus which I think Melissa you and I have looked at some of the numbers and there's potentially a significant surplus that's going to show up in the audit report. We don't know the size of it. Um, I think if we when we get the SIP, we figure out what our capital outlays are going to be and then we're going to set uh a budget process to say this year we're going to need a million dollars allocated to the capital reserve fund, not 25% or 50% of the surplus because we have no idea what that's going to be or what that is. Well, and that's where I would see that um the initial fund balance percentage, that's where that interaction then occurs to say, you know, this year, uh we know we we'll just use the million-doll capital and we've got 500 in the capital reserve account. You

know, through our recommendation, the it we are anticipating the fund balance to be at 75% because we're going to make sure that we are are moving that money into capital reserve account to adequately fund the needs that have been expressed by this board through input from staff etc.

Right? So the the the target balance ought to be expressed in uh some type of a financial number x number of dollars based for example in the capital right if if we know we're going to have x number of dollars of expenditures over the next five years to to pay for the the sips that we prioritize and we need to reserve y number of dollars every year to afford that.

Sure. And then we figure out where the heck that money is going to come from. [laughter] If if it comes out of uh a a budget surplus, that's fine. If it comes out of increasing fees or uh other revenue sources, so be it. We can make we we will need to make those decisions. But to simply rely on the surplus and a percentage of the surplus is a shell game and and that's not going to work for us.

Sure. Sure. Well, this this at least gives the initial direction, but then the the workings in which the budget is developed and uh we are funding these reserve accounts for specific things is going to have to happen subsequent to you know the policy being set. Um but yes, I I agree because that that that leads it to the the view that we're just going to uh overestimate expenditures and underestimate under spend just so that we have this this surplus in order to shell into the reserve accounts. That is not the that is not the objective

and and and there is no transparency in that. Understood. Yeah. Yeah. So and and there's an expectation I think from our community that we do this in a manner that is understandable and and appropriate. So uh I would encourage us not to use the percentage of surplus as a as a funding criterion but rather a monetary amount uh based upon specific [clears throat] needs as identified.

Sure. Uh, as far as the uh emergency fund, um, historically, at least the argument was made that the that money came out of the general fund. And if we're going to use or create a separate fund for that particular expenditure, then our reserve target for our general revenue should be reduced in that the general revenue doesn't have to pay for this anymore. Yes. And it it it the target is reduced and the money can be moved to fund that particular uh reserve requirement in emergency the emergency fund. Right.

And I would agree with that if if we have a set dollar amount associated to the assets that are outside of the operational expenditures for the town. So uh building A gets wiped out. Building A is is that asset. We're going to have to rebuild that, rely on a reimbursement months, maybe years down the road. That's taking away from the potential operational funding that would be necessary to continue to pay salaries, to continue to put gas in vehicles, etc. during that time frame, truly serving as that savings account when we need it.

I have a question. So in your opinion, the general fund balance policy is for us to know in the event that we have a fund balance, we have a preset percentage for things to go so that we don't willy-nilly and excess throw stuff into accounts that we want. It's not an end all beall and we still have the ability in budget season to be able to make adjustments to the budget to reflect things that we actually need. So that's where these could potentially change. But this is just saying we're not planning to have a fund balance, but if we do, we know 50%'s going to go here, 25 and 25, and and we know that those places are going to get that little bit of money, whatever it is left over, but we always have the ability to make changes if needed. And with the capital improvement project and outline that we're working on, we will know better what our needs are. But we also are kind of in a rears in that process as well. So we can't really say we know what we need in capital improvements right now because we are growing so much and changing so much. That's kind of a project in the works. This is just something to say at least we now have a policy in place but it's also not set in stone. We have the ability to go back and change it as needed. This just gives us a marker for right now moving forward. I feel like right is this correct? Okay. And [clears throat] so as we talked about, you know, we said 50 and 25 and 25. As you were to build that disaster relief fund and you got to a target, this should be plenty of money to cover a disaster, you would re-evaluate and say, okay, we're not going to put that much money. Maybe we don't put any money in the disaster relief fund anymore. We just leave it at this. And you know, you it would be something that would need to be evaluated every year. And even in talking about um beach nourishment and

what happens after the Army Corps comes in and does that project, we still have disaster recovery things that we have to take into consideration that may have nothing to do with something that the Army Corps is going to come back in and fund as far as a project. Yeah, it could be secondary impacts um crossovers uh you know that that we would have to do if you know the the welcome center or streets and you know all these other things would all build into that and that's where I think that uh I I hear you on all of it and I I I generally agree with all of it is you know if you if from what Melissa had presented in this like we'll take that 40% of assets that's at 10, what was it, 10 million or something? And if that uh recovery was sitting at 10 million, yeah, we we then are going to say, okay, we we feel comfortable enough uh from the conservative standpoint, we always have to be conservative of this that we do not need to move any additional money into that account and we're focusing on capital. We're focusing on stabilization because we don't know what's going to happen with reval cycles, etc. that's that's where that would be triggered. Um but yeah relying on on surplus annual

well my preference for example using the disaster relief fund as as the example um we have an estimate of what it would cost to recover right from we have Florence experience we have other towns experiences so let's say it's $3 million then the policy ought to use $3 million as our target adjusted for inflation over time and then The policy should also provide for the source. We want to be at $3 million. Three years from now, we're going to allocate a million dollars out of each budget cycle into that fund. So, at the end of three years, we have $3 million and we can make adjustments on an annual basis during the budget process. So, um, rather than saying 50% of of your surplus, which I mean your surplus could be $2 million and your or you could in in fact if something really went wrong and we didn't do a good job in budgeting, we could end up with a deficit. How do we pay for the deficit then?

Correct. Do we [clears throat] take the money back out of that fund? Yeah. No.

No, we don't. Well, we can't. So the the fund balance policy, I think, is different than us setting up criteria and standards that we want for each of these reserve accounts, which it sounds like is what you're trying to say. So we if we have a reserve account that we want to set specific criteria as far as dollar amounts for, then that's something that we do separately because the reserve account might, like you said, might not be enough to do that. We might be having to pull that from an actual budget and and making changes in that regard. So, because we can't always look at this and say like if you want to have a certain dollar amount in in a reserve account every year, then we can't assume that the fund balance is going to give us everything we need for that. That's a that's a budget decision. That's not a fund balance specific decision.

So, if you have a shortfall, if we were to spend 17 million this year and collect 16 million, that million comes out of your unassigned fund balance. Well, no, no. I I I agree. I agree. That's that's what it's there for, right? Or I don't know about this this rate stabilization fund. I haven't seen the criteria that you expect to use on how we spend that. If if it's a budget deficit, does it come out of rate stabilization to avoid a tax increase or does it come out of the the general fund?

Yeah, that that would be up to up to you all on on what decision you would want to make with that. But the theory behind that is that yes, if if there's an operational need that is not um being satisfied through existing revenue sources and and there's no ability to create a new revenue source, then we would try to provide that guidance to say, okay, well, uh this is this is this is where we have the level of comfort to fund operational expenditures with the understanding that the reval happens, we'll just say two years from now, and and that operational expense is $100,000 per year. That $200,000 out of that that fund can come over to make sure there is a stabilization and and we don't have to raise taxes knowing that uh that rate is going to be evaluated in two years. This is the this is the stretch in which um you know the town is forced with the county have you know making those reval uh decisions and and lengths in which uh you know we have to

so so my my hope and expectation is that we that staff uh creates or develops the fund balance policy specific to each fund that each fund balance policy include the target of what is it that we want in how much do we want there over what period of time that it specifically outlines the source of revenue that's going to go into that and then the uh types or specifics of what expenditures that fund is responsible to use. So I have to play devil's advocate. So I hear you and I understand you. But so lots of time and energy was focused on the fact that we did a tax increase. So if we start budgeting, if we say we want to ensure no matter what, whether they're surplus or not, we're going to transfer a million dollars from the general fund into the capital reserve fund. you are identifying that funding source as your tax base and other fees.

So if you do not have enough other funding sources, you're going to increase your taxes to transfer to the capital reserve fund. So by saying and committing in the general fund that you're going to ensure every year whether you have surplus or not that we're going to transfer a million dollars to the capital reserve fund. You are taking the chance that you may increase taxes to transfer to a reserve fund. Well, no. We don't like I'm going to respectfully disagree with that. Can I ask Can I ask something real quick? Is there any reason I'm assuming this is

mirrored after other towns and council government best practices and whatnot. Is there anything that says I'm directing this to Kyle the U that as each budget cycle comes up if this policy is the way it is now where it's somewhat fluid and and gives us the ability to maneuver and we decide okay this fund is a little lighter than we want we're going to create a line item there's nothing that prevents us from doing that correct that's correct okay

thank Hugh you're exactly right it gives us the flexibility ability budget year to budget year to adjust it. The policy simply states what we want, how we're going to get it, and how we're going to spend it. The budget policy doesn't say this is how much you have to do this and in terms of its its funding. So if we do come up short hue then we can reduce the amount going into the reserve understanding that uh with the exception of the general fund reserve because there's specific criteria right there's replenishment criteria right

it goes below the percentage allocated. Yes. and and and that's important for the three reasons you cited earlier which is we need security, we need the ability to support any debt uh or or yeah the financial stability to be able to support any borrowing. Uh, and we need to be able to manage and to pay for operational expenses during times where there's an unexpected operational expense or to maintain operational viability of the town even in the event that our tax revenues uh are lagging behind our our our budget needs. That's that's what that's for.

You say you disagree with me. So during the budget process, if I say I'm going to budget a million dollars for the capital reserve fund, which is did I misunderstand? [clears throat] So we're going to in the general fund, we're going to budget a million dollars to transfer to the capital reserve fund. I have to balance the budget. So what is the funding source for that million dollars? Well, it's the same funding source we we have for everything else we pay for. It comes from taxes.

Okay. So, if I budget a line item for a capital reserve transfer for a million dollar and we So, that makes the budget $20 million. I don't have any built inspection fees to give you. I don't have anything to give you as a revenue source other than taxes. That is going to require you to increase taxes. No, it's going to require us to decide whether an increase in taxes is warranted to meet those uh policy um [clears throat] expectations.

I think what's going to happen is the more layers of lines in the sand that we draw and the lack of fluidity is going to create unintended consequences that we're just not going to recognize and back ourselves in the corner is what I think is getting ready to happen. if we if we if we add too many layers to this process. I agree. Yeah. Uh I want to give Trudy a chance to or anyone else a chance to make comments. I I I got my answers. Okay.

So I I want to say at the beginning of your presentation, which I thought was very very well organized and put together, um it was recommended at 137%. Why wouldn't we go at 137%. We have been a healthy community. We need to remain a healthy community. Looking back at um just examples of that we should anticipate and plan for the unpredictable. So, knowing that we are going to have natural disasters, knowing that we're going to have our beach nourishment issues, knowing that we're going to have utility system breakdowns, knowing that we're going to have legal and regulatory changes, knowing that we're going to have insurance and liability costs, personnel costs, contract to services, infrastructure failures, funding, revenue timing. Um all this brings us to basically we have to plan for these shortfalls and having that 137% in as a reserve I think is being very responsible for our town and then splitting it down into a percentage like you instead of a a number a percentage for your different um categories on the fund policy because if you say you know it's going going to be a a certain number. Um I think it's a mistake. So I like your recommendation. We I trust you.

Um you've been you know your your numbers have been anything that we ask for our auditor. You're you are you know you play by the books. You you look at the books and you've done a great job. Right. So, I like your recommendation and I would um request that we follow um our finance director's recommendations on this.

I think it's better to have it and not need it than need it and not have it. And from where we live and what we've been lucky, and this is the wrong thing to say, we've been very, very lucky since Florence. And hopefully we can be luckier in the future. But if we There's always that one coming. Everybody tells me it's not if, it's when.

Well, I'll comment. I went to the city vision conference this year and the entire conference was centered around what western North Carolina had been through. There wasn't one meeting that I attended that that wasn't the talk and every town there was had was was recovering and you know there was a heavy um concentration of of of attendance from the western part of the state because they wanted to come and and encourage everybody else to prepare for this. They were not prepared. And yeah, the realization is this happened in Ensley and Brett can speak to this. Their school systems were wiped out during Hurricane Florence. And they came to us wanting millions of dollars. 50 million.

$50 million. And we didn't have $50 million that we could just It wasn't liquid. We couldn't give it to them. You couldn't get it out of your investments. And schools operate on a different level than we do. And they said to us, "Well, go to the got borrow it. Go just go borrow it. Get it." And we had to get senators involved. We had to get the LGC on the phone. Like we're not going to be able to go borrow money un just because you don't have money to support the storm. There's a whole process to borrow money through the LGC. And so even here people have faced this. We it was a very uncomfortable unsure situation for quite some time. Um I don't know how else to explain that. Um so you quickly get wiped out with the storms. Um, I know they've made special arrangements for some of the towns in the western part because they were annihilated. There's nothing left. There's no tax base. There's nothing. Um, that's the next thing. You're going to lo, if you have a hurricane, we're talking about these expenditures, you're going to lose tax base. I know with North Topsel when after the Florida no Fran after hurricane Fran how much tax base they lost when I you know it was a huge impact so there's a lot of factors that we haven't even talked about this and this is a draft we want you to tell us what you want um I didn't mention it during the presentation we were heavily compared to Rightsville Beach notice rightful beach percentage is 180 some% % their fund balance. So that um there were, you

know, a lot of people talking about how high ours was for coastal towns. We were further down the line. We were much further down the line. And I'm not bashing anybody, but you might want to say, "Oh, well, Emil is extremely low. I also know who I's auditors are and they were ours at one time and I don't have any faith in that auditor." I'm sorry. It's a public meeting, but I said it. I think again the the answer um that a lot of the community is looking for as well is transparency and they're looking for that constant community community communication to where they are regular regularly informed about the disaster risk the infrastructure needs so that they understand why reserves are so important and that they they can be flexible. We can adjust those if necessary. But so if if if I had to leave here right now, I know we we have to have a consensus or we talk about this some more. I I think we we shoot high um at your first recommendation of 137% and you know, do your percentages on instead of like putting number exact numbers, do your percentages. So I don't know what everyone else's thought. I'm going to start down the line with Trudy. I said I you know I attended that conference and um it was it I was it was yeah just mindboggling what um they had they didn't know you know how to prepare for that and they so many lessons learned and like I said it was just very um gracious of them to spend so much time coming and talking to other towns about how to do it better and so I say aim high also. So

I have one question really quick. So we have these three um funds that we are planning to give a percentage from any overages are we can allocate funds to those from other sources as well. It's not just coming from as long as they're not I'm sorry [laughter] as long as they're not restricted. Yeah. So like if if accommodations plays into one of those, not even the disaster recovery part.

Okay. But but in general, we could pull from some other fund to so this is just saying this is the percentage if we have any overage that we're putting into these. I I agree that I think we need to set some standards for these accounts and what we want them to look like and what we want to have in them, but I don't necessarily think that that's part of this. I think that's a a budget discussion that we can maybe talk about at the um

meeting. Yeah. Um, but yes, and I I I think 137's a lot. I'm I'm good with it. Um, because I also feel like based on what we talked about numbers wise right now, we're kind of below the curve for what we would really need to have. Um, compared to what we currently have sitting. So, I think pushing for more right now is probably better, especially until we get through the the nourishment project and then we can kind of reassess that.

Changing that. Yeah, we can change that. I'm I'm very comfortable with the with [clears throat] the fund balance policy as presented. The fact that it is a I don't want to say an involving document or policy, but the fact that we'll review it annually, if not more often.

Um I'm I'm very comfortable with this 75 to 100. If anything, I would I might bump the 75 up a little bit, but I'm comfortable with the 100 cap right now until this is new. Get a feel for it, evaluate it. Obviously, we can adjust it as as need be, but I'm comfortable with the fun balance policy as it is. I am completely comfortable and support exactly what you want to do. I have all the faith I need in what you do. Andy Bio.

Well, I'm going to be the outlier. I don't agree. I don't think that policy is uh there is not sufficient detail in the current policy that allows us to make a decision. I I would like to see more detail specifically targets uh source of uh revenue for those uh fund balances and then uh some criteria as to how those fund balances can be used. If we were to go with the mayor's 137% recommendation, we'd have to find $6 million somewhere to bring the fund balance up to where the target is. And that's before we try to fund any of the other three. Um, I don't think that that's rational. If we remove uh the requirements out of the general fund balance uh for certain activities that we would normally have used to other fund balances, then we ought to add those fund balances all together and calculate what the uh the ratio is as opposed to requiring uh the general fund uh reserve to ma uh meet that uh target criterion. Um, so I'd like to see a more detailed formal policy statement for each individual fund. And I'm going to give you an example here. Here's where the problem is using surpluses. Surpluses uh happen if we collect more money than we anticipate. Uh, and we've already seen that in your November report that we anticipate collecting more in advorum taxes than we have in the budget. um I'm not sure where sales tax going to end up. And we've also seen historically that we've underspent our our budget. So we've we've generated surpluses on a routine uh basis when uh you under or overestimate spend.

I'm going to give you an example, and I don't mean to pick on on uh David or or or Chris, but imagine uh we allocated $200,000 to facilities and grounds to fix potholes. um in the canals. Imagine we did that. And let's say for some reason we couldn't get enough of the patching material and we only got half the potholes filled. We only spent half the money. All right. At the end of the year, now we still have potholes. Uh and we didn't spend $100,000. What do we do with that $100,000? Well, according to the policy, it goes into well, half of it goes into capital and half of it or and some of it goes into emergencies, but we still have $100,000 worth of potholes.

I think that's accurate what you just said, Andy, in my brain. And correct me if I'm wrong. If it's written, it's written. If you're accurate, I apologize for calling it out, but if we've assigned $200,000 for a specific task and something has created a scenario where that specific task was not completed, that money stays with that task until whatever resources are available to complete that task that that Yes. If it is inc what Andy's saying, if it's encumbered, if it is in a uh general fund expenditure account and they only spent $100,000 of it, the $100,000 then the residual would have to be rebudgeted that next fiscal year.

Unless we have a written contract with a service provider, then that money is encumbered and we it it doesn't revert back to a surplus. It's just it's a it's a liability. Get the materials. we would just abandon that in in this scenario [laughter] because then you have a POW bill fund that could that is a going to be recurring. So we have to find the $100,000 again. Well, it would it would it could go into a POW bill reserve account if it was POW bill money.

If it was POW bill money. Yes. So again, it it just there's a lot of different factors in it, but I understand what you're saying. If if uh we budgeted $200,000 for for vehicles and uh we only spent 100,000 of it, well, that's a capital project. Anyway, there's different scenarios that we could come up with. There there is the scenario where it unspent money becomes a surplus and the unspent or the uncompleted or incomplete activity is still a priority and needs to be assigned uh budget in the following year those scenarios occur.

Wouldn't we have the ability to assign that reassign that those funds to to complete that task? Yeah, you could. And and that's where you would you could that's where I like the fluidity of generally say that you know as long as we're meeting ordinance you know because it would have to be done through ordinance that this body is identifying that and reallocating

in that scenario Chris would need to say to us if you want to make a part of the actual budget process okay I'm only going to complete in 2026 I'm only going to complete $100 $100,000 of that. I'm going to need $100,000 again in 2027 and that will make it part of the budget process. If he forgot to make it part of the budget process and you were passionate about it and we want the potholes fixed, we're going to come to you with a budget amendment and say, "Hey, we forgot to put this back in the budget, but we need the $100,000." And you do a budget amendment and amend the ordinance. Thank you. six. [clears throat]

Okay. So, at this time we have one, two, three, four, five or four like I don't can't count myself consensus and one just for I don't know that we do because there's a few with 137 and a few that had 75 to 100 as presented is what I understood. So I just want to make sure that that's the 75 to 100. Right. Okay. So I don't we're

to me we're be coming to you today to present the policy and ask for guidance. So I don't know that it does not need to be revisited. I mean, are you Well, from what I hear, I think it it warrants probably additional discussion and and from what Councilman Plle is saying in regards to policy for how those funds can should be spent or or will be spent unless you all move that money. We can absolutely write that policy to accompany this. So it provides even more additional clarity on how that function would would work.

Um I mean that's something we absolutely can can draft up for each one of those additional funds that become assigned you know unassigned fund balances not going to have you don't want to you don't want to restrict yourself in that in that sense. So, um, maybe I can suggest that my myself, Andy Plle, um, Melissa and Kyle, and maybe one other council person sit down and discuss this further. We'd be happy to accommodate it. Um, sure. Just let us know. And, um, we will pick this back up and bring it back to the board, um, in January

for discussion and and consensus. um to move forward and even by that point we we might have an audit uh to look at and

that would be helpful too. some real numbers and I think that may give a little bit more sense of um you know understanding as to the scenario and and how this is going to play out and and a a catalyst to you know a budget season um on how we are looking financially and moving forward and and again we wish we had had that for you and typically we would by now but I think timing might be good to um move this to January with an intermediate intermediate discussions to try and craft this based on the conversations that this board has um so we can put it on the agenda for further discussion for the January

work session work session or or do you want to do it you don't want to do it at the general meeting with all I mean I work session okay so that's in order for us to have a meeting and and draft policy I just I would that's a little bit too rushed for me anyway so I think we covered great amount of ground. Thanks to you, Melissa. Thank you for everything you put in place. But I do see that we have some gaps and some questions. This is not an impossible task and it's and I am 100% in favor of having a cogent reserve policy that protects our town against unexpected events and helps us plan for the future. Please don't misunderstand.

Concerned about process. I thought it was a very good healthy discussion. [clears throat] All right, let's move let's move on to item number 14 which is also Melissa the micro purchase [laughter] threshold res resolution before we before we do this are you are you cool enough now cuz Chris [laughter] I understand Chris take the air conditioning thanks Chris dying I was dying in this plastic jacket too believe me plastic and I wasn't even under pressure yeah polyester plastic

so um currently I'll give you a little bit of background on this the c the town holds pecard s for a lot of our employees that allows them to go run make small purchases of things that you don't want to tie them up in a purchase order procedure to go run get a pack of tape for lack of a better example. Anyway, so they hold pecards. Currently, our pecards are housed with First Citizens. Um, I'm sure at the time the decision was made, that decision was based off the fact that First Citizens is who we bank with. Um, North Carolina, the state of North Carolina has a contract with the Bank of America to provide PECard services to the state of North Carolina. And they also may part of that contract include a piggybacking option. So towns like us or counties, anybody that wants to piggy back off of it can get on the state contract. Um, we encounter a lot of issues with the pecards and passwords and approval processes and it's very cumbersome and time consuming. Um, we've had a demonstration from the Bank of America and their system is a lot more userfriendly. Um, it should lessen the amount of time that we're spending on PECAR transactions. Um, I think it may I also, if we spend enough, offer us a rebate, which is something that First Citizens does not do. Um so to make that transition we have to have this resolution of town council of surf cities authorizing increasing the micro purchase threshold which you've already done. We altered the purchase policy in February of this year and increase those to match the

state policy which is what this resolution is saying we're going to do. We've already done that, but the state of North Carolina will not let us piggy back unless we send them this resolution. So, we are asking you to uh a consensus to have this resolution added to the January 6 meeting so we can get enrolled in the PCARD program with Bank of America. So, it's really a technicality. Your purchasing policy already says this. It's just the resolution that the state requires. Just so I'm clear, we're look, we're talking about switching from First Citizens to Bank of America. And what that brings us is the ability to be more efficient, ease of use, and potential money savings.

I agree. There you go. I'm on that. Sure. Full consensus. Yes. Thank you very much. Thank you. All right. Item number 15, negotiated easement resolution, and Kyle will present.

Yes. Uh once again uh good good morning madame mayor and councel. Um this is a resolution to essentially authorize uh the mayor and I to uh work with property owners along uh segment one of the tops and connector. Um in our discussions uh there may be some things that come up um you know minor items uh landscaping um you know moving a ditch line uh minimizing impacts from the project um and that's going to be discussed on a parcel by parcel basis. We've we've held um several meetings now to date um to introduce the project uh if they did not get our original mailer uh understand what the impacts are going to be and prepare them for um future easement acquisition from the town. And that comes in the form of uh right-of-way needs uh uh temporary drainage easement, temporary construction easement or permanent drainage easements. Uh just depends on where you're at within the project. This resolution provides a little bit of coverage for the mayor and I to have those discussions. What this resolution does not include is uh the ability to offer any sort of financial payment um to property owners along this segment. Um we we do not offer that because we don't have authority for that. So um you know in simp simplistic terms this is covering our discussions um and potential negotiations to obtain easements or rightway for the project without financial major financial contributions. We can build in small things to the project cost which you all would see when we get to contracting uh when we we let this project u when we get to the final design. So happy to

answer any questions. Um overall uh discussions have been going well um with property owners. Um people are are generally excited about it. um feedback that we've gotten and I've talked to our police chief about this is you know what are going to be the rules of the road per se um when we do establish this multi-use path um in regards to enforcement regulations ebikes uh non-motorized uh vehicles uh motorcycles etc. Um, so those are been some of the major concerns and then also just seeing what we can do to renegotiate or redesign portions of the project to minimize the uh right-of-way impact. So um overall it like I said has been going well. Um and this resolution in my opinion was was sort of necessary as we continue to progress through those discussions.

Anyone have any comments or questions for Kyle hearing? None. Do we have a consensus to move forward? Yes. Yes.

Okay. Item 16, um, David Price will present and it's the water and wastewater allocation policy. Mayor, council, uh, in your packet, you got the, uh, water and waste allocation annual review. I'm not the best speaker, so I might use the abbreviation for this or just call it the policy. I cannot say that over and over again without messing it up. But uh the um policy was adopted uh December of 2024. Uh and part of the policy is the annual review to see if there's any changes that need to be made. And uh I'll like to go through exactly what the policy lays out now and some of the fruits of it throughout the year. The policy um reserves 50% of u available capacity for residential neighborhoods, 30% for non-residential and 20% for reserve. Therefore, we never truly run out. And reserve would also be used for expansion of government uh policies. Oh, excuse me, government facilities or anything else the council deems worthy. Uh 13 projects were submitted this year. Uh six of these projects were already allocated under existing permits. This is typically uh our parcels to uh existing units such as um a shopping center or something of that nature that got permitted before the policy. They're just fulfilling. uh anything along what we call the phase one and phase two plans uh which are original system from 88 [clears throat] which includes um most of the island little Kinston uh the 99 uh permit which extends all the way up to food line so anything within there would have already been permitted

those are six of the projects two projects were allocated under the policy and made it all the way through the site plan and I'm going to go through those and five projects are currently under review. Uh now the way this works is they submit and when they submit the site plan if they're getting new capacity they will get a certain number of points based on the criteria based on use. You should have a copy of both criterias within your packet residential and non-residential and whatever difference they need to make up they make up for with amenities that help the community. So, five of those projects are currently going through the process and uh before they you see them with the site plan for approval, they will have a uh W criteria next to them. The two that got approved were Colonial Heights. This is a 10,000 foot residential lot size. So, that automatically gave them 20 points. They needed to meet 30 more points in order to qualify. In order to do this, they added two benches to the multi-use path, addition of a clubhouse, a pool, and a tot lot. Um, forgive me, I had to look up what that is. I haven't, but it is a playground for little kids. Uh, they are required to build 10 10% more open space than otherwise required. I dedicated right away. And if you need to know the importance of that, I'd be glad to go into that. That's a little bit of a side conversation. a minimum of 25 ft setbacks in addition to what's already required from our wetlands and an additional 1,240 linear feet of multi-use path. So that's above and beyond what they were required to build in order to qualify for those points is what they agreed to. The Apple would trace um non-residential section. This is the

um retail shop that's going out on 17. Um they need to make up 10 more points in order to qualify and they did this by committing to between 16 to 100 new jobs. So that is the summary of this year. Uh like I said, if there's any changes or any discussion, like glad to have it. Some of the ideas that were brought up at least to me over the last uh year is the issue of mixed use. Should we make it part of the policy that if somebody is claiming mixed use that they commit to building commercial first? Uh a lot of this is favored toward non-residential to encourage job creation. Uh if someone is going to claim that should that be a stipulation in the policy. Something else, something I noticed is in the non-residential criteria, uh, in the job creation bracket brackets, you have 0 to 25, then 16 to 100, that overlap doesn't make a whole lot of sense. I want to change that second bracket to 25 to 100.

And any other um, if you want to go ahead and review the evaluations we have on each type of use, residential is relatively easy. Um, we encourage low density. Therefore, the lower the density, the more base points you get. And same thing with um non-residential. Um, based on the competency land use plan survey, the residents of uh, Surf City and visitors said they would prefer retail and restaurant. Therefore, they are valued at 30 points. government, administration, child care if those are urgent needs. That's uh 50 50 points. Uh something that I would like to bring up that was part of discussion is next next to um 20,000 square foot mixed use is rated the highest. I just want to make sure that that is consistent with the council's desire. That seemed to be a uh point of conversation throughout the year. Say that again.

If you look at both criteria, mixed use is on both of them. And on the non-residential uh next to child care and government facilities, mixed use is second highest rated. And on the residential, next to 20,000 square foot lots, mixed use is second highest rate rated. So, I just want to make sure due to the conversations I've had and this came up a couple times over the year that mixed use is still valued that highly.

I'm not not [clears throat] advocating to say it should or should not. The only thing I would say regarding mix true mixeduse development types is that it provides goods and services within close proximity to the residents um that that may be part of that. and may minimize things like trips on the roadway or other factors. So, you know, that's where this development type may seek favor. Um, that's that's all I really want to mention about the mixeduse type of thing.

I have a a question on this. The suggestion is that uh this falls under uh the non-residential. So, the mixed use falls under non-resident. It depends on the the ratio. So if it's 30% of the square footage of the area is commercial is non-residential. If it's less than 30% it falls under residential. Okay. So it's just a square footage kind of thing. It's a square footage calculation. Yes. Which is I I was thinking about what a Xander guy is going to do. He's doing that mixed use next to uh the bar there. Um that did not fall under this but it's a good example.

Yeah. So downstairs is retail, upstairs is is uh apartments or condos or whatever. I thought that was a great great idea. It's very European by the way. Um would it have fallen under this or not? If it was a if it was already permitted by existing it was already permitted. So it did not. But if it was say it was out on Highway 210 for example, it would have fell under this. So we would have considered more than 30% of usable land being commercial in that the footprint is all commercial.

In that particular case, you have um I'd have to look at it. It just depends on square footage is if um 30% or greater is commercial, it would have been counted as commercial. I'd have to look at the actual breakdown of the property, but it would have fell under those criteria if it was located somewhere else. It's split up on the total square footage of the project as a whole. So if it's 100,000 square foot, 30,000 of it has to be commercial in order for it to be considered commercial space. This is stacked,

but it's still like the residential was upstairs. So if there's 20,000 foot of residential and only 5,000, you know, that's that's where your breakdown happens. It's not on the usable lot size. It's the actual square footage of the structures being built on the project as a whole. Is that correct? Or make building. Yes. If we talk about mix facilities, commercial out front and residential behind. That applies as well. Total that's total square footage. We're going to get into the weeds here. But okay. I'm just trying to figure out Yeah. who falls in what bucket because we have different allocations in terms of percent of the available sewer, right?

Yeah. So what the way it applies is say you got like Councilwoman Harley said you got 100,000 square foot this area square footage uh building area dedicated parking lots everything is commercial 30% has to be dedicated to commercial in order to qualify if they do not meet that threshold it's all considered residential even the commercial and then the order of development I know we had talked about this uh the expectation is that we develop the commercial first that is what I'm seeking from council today to see their wishes.

I think that's important. I think with us sitting on wait listing for sewer right now to let a mixed use come in and develop just residential first with the potential of a project being abandoned at some point is a little tricky. So I I mean that's what we did with one of the projects and set additional criteria is that in order for them to get CO on residential, the project has to maintain at least 30% commercial as you move through the project. No, I I would agree with that. That's been coming up more and more. Yeah. I mean, if if if the council doesn't mind, if I could just get a sense consensus on each point, I just mark them off. Sure.

On commercial first. Commercial first. Yes. Yes. Yes. And the changing the job creation bracket, it needs to be 26 otherwise you have 25 twice. [laughter] But yes, 26. Okay. And um like I said, the last point was just a general review. Any changes and priorities between the residential and nonresidential? anything you've seen that was questionable?

Well, like I mentioned is the the mixed use seem to have got a lot of attention this year. And when I was u doing the review, I just um noticed that that is our second most liked residential and non-residential use. I just want to make sure that confirms with your wishes. Um [sighs] so that is really encouraged.

I may suggest I think that um as an internal process that that we can do um is when we readopt a strategic plan is to look in there and see if there's additional guidance that can be found um for these community type of uh needs. uh and and that way we can get them added into the um menu list of options. I think that would just be a good opportunity anytime that we have public input being received um andor council input or departmental input. Um I think that's just a good tool for for Price to take a look at um you know in order to to modify that list. Um, but at any point if if you all have suggestions or ideas, just send them our way and and we'll be happy to um take a look at it. I think the annual review process um being the first year is um a really positive thing uh for this council to to be able to look at and make those adjustments um or provide direction back to price as he implements this. And I think what we've seen is is a a net benefit um you know based on the policy. So

yeah, I'm sorry. I did not read this sentence. I skipped it. But this u the original intention with this was to encourage uses based on compens plan. I just realized I skipped this sentence. Out of 13 projects submitted, four were residential, eight were non-residential and one was mixed use. So it is has this intended goal of encouraging non-residential use. So I would count it as a success in that aspect. Just looking for consensus there as well. Um, yeah. Well, if there's no uh other changes, I think I got what I needed. Good. Everybody good? Yep. Yes.

Thank you, David. All right, David. Number 18, CIP ranking criteria here on system development fees. Madam,

system development fees. I'm sorry, the fee study presentation. Um, so this is me as well. Um, over the past six months, the town has partnered with Weathers Ravvenol to conduct a system development fee analysis. Like I said, I'd like to go through that with you and get your guidance. So, system development fees are governed by chapter 162A article A. And this fee only applies to new developments acquiring new water through capacity. um fee must be updated every five years. Uh we last one we did was 2017. This law changes a lot. Um that is a new aspect that we did not catch until recently. That's why it's a 8year and not a every 5year. Um the feed analysis and study must be prepared by a financial professional or licensed professional engineer. That's why I went with those ravenol. are both the idea behind a system development fee is that growth pays for growth. Um as new infrastructure is needed, we want that cost to be passed on to the newcomers coming to town. We don't want to saddle our existing rateayers with this cost. Uh these new revenues can only be used for certain things. um new infrastructure that that expands capacity. Rehabilitation of existing uh infrastructure that expands capacity. Um land purchases for that expands capacity. We can't go buy land and make it into a park unless there's well unless there's a capacity component to it. I had to clarify that one. Uh we cannot use these funds for anything else. We can't use them to pay salaries.

We can't use them to buy me a new truck. It has to be capacity related and spec specifically new capacity. And like I said, the idea behind it is um the lesson of burden on the rateayers. Um those on the the island and rolling like said the existing permitting holders, they've already paid their fees. We had assessments. They've paid impact fees back when we had impact fees. They don't need to be charged paid for new infrastructure. Let's pass this cost on to the new people coming in. I think I broke it. Okay. So, who pays system development fees? um only the developer or the home builder the first time a parcel or unit connects to utilities. Once them fees are paid, they don't get charged again ever um for that unit of service. There are a couple caveats to that that sometimes confuse people. Um, if you buy 10 acres and you have one house and you pay system development fees on one house and you subdivide and you add another house, you don't have to pay on that original house again, but you have to pay on that new house. Also, if you have a change of use, uh, say you got a retail now and you need a 3/4 inch meter, this person moves out or they convert it to a restaurant, they need a 1inch meter, they got to pay the difference in system development fees because they're getting a larger service. Uh, when can system development fees get collected? This is extremely important and this plays into plays into a lot of other budget conversations later on. It can only be collected at time of building permit or when service is committed, whichever is later. That's

the only time we can require it. So if you're building a house, you need it at construction, you buy a building permit. But if you're building a shell building and you don't need it, you're building a metal structure, you don't need water right now, we can't require you to do that. It's and that comes in later like um strip malls this happens a lot too where they pay for one and then every new one they need gets passed on to the tenant. That's their right because we only make them pay when they need the water. So, so there's three methodologies for calculating this. One is the buyin method. That's where we pretty much say hey we've invested this much money. This is how much is depreciated over time. This is how much capacity we got left. We divide that number by the main capacity the residents are buying in. The other is incremental. We have this CIP. Uh we know how much we're going to invest, how much capacity that's going to yield and the new um residents of town pay in based on that CIP amount. And the combined method which takes them both. We are using combined method. We do have some existing capacity that has already been paid for and we do have a very robust CIP with multiple projects that have a y that were yield a certain number of gallons per day. So we combine the two.

David, so on say a complex um that has 15, let's just say 15 rental units, commercial rental units in it. Um, and they give me give me an example. We talk about a hotel or we talking about like a let's just say um like um Wellman's okay so they go in they they when they get their co they pay for their on that one unit they pay their system development fees and then the next unit they don't pay until they connect.

Yes. Well, what if that one combines the wall to the second one, then combines the wall to the second one, and then you end up with one large complex when we've we've already put in the utilities at the beginning of construction. We we put it we've had the upfront cost of doing all of it with the expectation of we're going to get paid per unit.

We got we got a couple different things going on there, mayor. Um, one is system development fees and tap fees are two different things. Uh, when you pay a tap fee, that is what the real cost of uh, utility staff going out and laying that line. That is separate from system development fees. That's that's a cost that gets changed every year based on current cost of doing that job. System development fees is the downstream upgrade to pump stations and treatment plants for a certain number of gallons. So therefore, if they combine everything and they only need a 3/4 inch, they're only taking that many gallons away from the system. Does that make sense? So you got two more costs here. One is the cost of the taps and they're paying for that separate and you got the cost for the capacity utilized. Okay. Uh all right. So yeah, we did combine method. So, we're going to go off of the 3/4 inch meter cost. That is the most common meter in town. That's about 90% of our meters. Uh, that is your standard household meter. Our current fees are 3,000 for water, 9,200 for sewer. This was the maximum allowed back in 2017 under last analysis. So, anytime someone buy uh builds a new house in Surf City, they're paying 12,200 into the system of fees for new infrastructure. The maximum allowed under this study is 9,200 and $10 for water and 19,980 for approximately 30,000 per house. Uh this considers all qualifying capital improvement projects we currently have in a hopper. I as staff is are not recommending that right now. Uh these are we have to do a new system

and fee study every five years. Staff is recommending only consider the projects that we know we're going to get done in the next 5 years. Uh in calculating that that brings us out to 4,000 for water and 16,000 for sewer. I'd be glad to go through those projects if you like if you want to look at which projects those are. Um and that also allows us to build in a rate of inflation of 2%. I think I put down I look at my notes my calculation is 3%. Uh every year if we need to to make sure that we are keeping up before our next study. So this is a full chart based on current the max we could charge and the recommended. I don't want to go through all these but that just shows you the range in which now the way these are multiplied is the the P is multiplied by the volume hydraulic volumetrics of the water pipe. So a 1 inch meter can get 1.67 more water through it than a um 3/4 inch meter. So therefore the V is multiplied by 1.67. It's all about capacity. How much water or CO can we push through that larger diameter pipe? That is how the fees are based. This is a comparison to some of our neighbors. Uh this isn't the extent list. The full list is in the the study that I sent you, but just for comparison. And I'll go through some details here. Currently, we are right here compared to our neighbors around the state. recommended will be here and this is our max. Uh some of the things to consider is a

very utility there's a economy of scale. If you have 100,000 paying customers and you could build something on a larger scale you save money. We do not have that luxury here. We do not have 100,000 paying customers. We have approximately 10 or 6,000 6,000 accounts, excuse me. So that's something else too to consider is Southport is probably our closest similarly they're a very similar situation to us, but a lot of these places they're boxed in. They're not growing anymore. Um Caroline Beach, they have the utilities, they might get some development, but they're not seeing development like we are. We're expanding. They're not. So December 9th, we started the public comment period. Um, we've received some public comments. I'll be glad to share those with you. Well, we've received one public comment. I should not deceive. Um, we're at town council meeting now presented to you. Uh, December 23rd, public comment period ends. We will share those results with you and with our analysis team. And on the February 2nd, uh we are hoping to bring a recommendation to this council for public hearing adoption and to change the fee schedule in that night to adopt the new fees. Uh let's see if you had any questions and if you guys had any desires on which way you want to go with the system development fees. you. So the increase is essentially those monies are there for capital improvement projects for these specific enterprise accounts

and you've got it based on projected capital improvements over the next 5 years. Do you have like a buffer built in there for inflation or anticipated increase of costs? Are your projects kind of set to where you know where they're going to lie? No. Um that is very dynamic. It is very hard to calculate. Uh we went off our CIP or the engineered cost estimates of today. Okay. Um, a 3% three should accommodate some of that, right? Well, the 3%'s a option for this council to raise assistance bill fees every year if they so choose under this plan and that would be presented in your fee schedule along with the budget adoption process. I like the idea of having that as as a pad.

Um, I think that's because we don't know. I mean great if it goes down in cost but if it goes up then we haven't really done our due diligence on [laughter] that part. It's not gonna go down in price. Yeah. Nothing goes down. So the the legal guidance is that we are supposed to do this routinely every five years. Five years. Yes. Uh the process by which we do the evaluation is set with specifics. Weathers revenue use that process to come up with a number. This number also reflects a discount, right? Because they they take into consideration the future cash flow of the service itself. So it's 75% Yes. of the investment cost.

So we invest $100, the maximum fee is a $75 reimbursement. The other $25 has to come from somewhere else. Right? If we don't charge the maximum, then every dollar we don't collect on the maximum is a dollar that we have to find somewhere else. The somewhere else is the $10 a month additional charge on uh current residents water bill, right? We have that that $10 a month that's going into the capital expansion project. Isn't that where it goes, Kyle? $10? No, not that I'm aware. I'm not sure what you're referring to. You're talking about

there's a $10 sewer fee. No, not the $6 sewer fee. So, that's that is uh your storm water fee. No, that's the $6 fee. Yes. There's another fee. A $10. I thought that could be an You got a cross connection consolidation program for irrigation and that's only Is that what the $10 is going to? That should be on your irrigation bill. that does is it allows a town to

I take that back. But regardless, so for every dollar that we spend on on increasing capacity, uh that dollar has to come from somewhere without increasing it to our maximum. Every dollar that we don't collect that we could collect is a dollar has to come from somebody else. So I'm going to advocate we max that out.

Sure. because there's no reason why our current residents who get current water service who have already paid for their services should subsidize a new developer. That's that's my position. Uh both as a resident paying a water bill and as a council member uh that represents the uh the folks that live in town. On the surface, I think that sounds perfect as far as um not subsidizing, but I think there's other risk involved. If we go to our max um

well the concern would be that if you have the max was based on projects um beyond the five-year outlook in regards to capital improvement projects. What we're saying is that okay, we want to look at uh 75% of of that total um fee because that is that that is what's programmed into capital projects in our schedule to be completed. There is a potential that certain project would not be pursued even though it's in our capital improvement plan. And that's where the the difference is coming into play. So our concern and this is what our recommendation is based on is that we then set a system development fee that uh encompasses future projects that we that we do not do. And then what is the potential clawback in regards to somebody who has paid a higher system development fee for a capital improvement that has not come to fruition. That's that that is solely the our sole concern on the maximum fee that has been presented from Withers Ravvenol the the consultant that did this. Now, I'd have to look to our legal counsel in regards to potential future clawback in regards to that scenario and what that may look like.

I could certainly research that. Okay. Yeah, that's not something I'd be prepared to. Sure. So the what you're the question that I I'm hearing is if we charge an SDF that exceeds the ultimate expenditure that we had used to predict what the SDF should be, those who paid the higher SDF could come back to us and ask for a refund. That's that's the potential. That's the question. That's the question. Yes, absolutely. That was a big part of the analysis. Like I said, um if you see in there, the NPDS project is included in that CIP. That is, uh currently valued at $150 million project. That's the biggest chunk of

That's the biggest chunk. I remove that to come up with these fees. Uh the reason behind that is if we are unable to achieve that. Uh how are we going to explain that? I do not want to, don't get me wrong, if you guys will allow me to charge more, I'd love it. [laughter] But I do not want to put the town under liability of saying that we're going to do something and us not to be able to achieve it. The fiveyear outlook I currently have in the recommendation is stuff that I know I could achieve in five years.

Right? So that number of 20 grand or whatever it is uh for the two together is a reasonable estimate uh a conservative reasonable estimate that doesn't include pie in the sky possible future. Right. I I probably shouldn't have said it that way. Um yeah, I mean it it's not the optimistic best case scenario. It is the it's got a possibility of failure, right?

Yes. And and I think that dedicating ourselves to the statutory 5-year um review of this would give us that potential opportunity to see where we're at in five years because our our hope, which probably isn't a good word either, but our our program projects moving forward are anticipated to be well underway andor completed. And we then have the ability to evaluate future expansion of our system which may not even be a desire. We don't know you know at that point

right and then then it becomes it doesn't it's it's the first way of allocating or assessing the fee as opposed to the marginal cost fee because we're not going to have to build more capacity. We have existing capacity in five years to accommodate that. So it's the average total cost kind of thing that we're going to do, right? Councilman, if we get to the end of the five years and we have the capacity we need and we're not no longer investing in that, then we go into a buyin method. Yeah. Y which makes sense. Um is there a waiting between the two methods that we did? Is when you you calculated method A and method B and then you came up with some waiting between the two?

It's a combined method between the two. It's within the report. I'll be glad to go through that with you. this kind of drive for this venue, but I'd be glad to go through that with you. Okay. Okay, then we'll just continue on. I I still advocate that uh we max out the what the the law says we we can do simply because any dollar that we don't collect that way, we have to collect somewhere else and and we'll work with legal counsel and and allow him if there's a downside risk with regard to clawback and what that risk is. If it's simply returning the money, that's different than a penalty associated with it or the lawyer going to jail. I don't know.

Yeah. And we [clears throat] don't have you're not making a decision today anyway. That's in February. So, I'll make sure you have that information prior to your February meeting. Well, well, clearly when it I mean public comments are going to become part of this process and I'm sure I'm not going to be the only one that's going to ask that question. Yeah. So, I just maybe I was the first one to ask it. Yeah. No, I I think it's to have a clear response to it and and a logical response. Um because both s I think both sides present a logical um expectation of what the fee could become, we will be prepared to provide that.

Would these fees um provided whatever happens February, they go into effect that day? So any new building permits would or is current stuff that's already approved going to default back? No. Um there is a grandfather clause in effect that if they're already submitted by the time that we sub um approve these we cannot attach it. Is that for communities or is that for individual like permit? Individual houses. Okay. Yeah. So that's a building permit application. Yes. Not an approved building permit.

Building permit application. If they've gone ahead and submitted the building permit, we cannot assign these. But any day after that that they submit, they apply. So for the developments that we have in in play right now that are doing land clearing or whatever else, if they have not applied for a building permit for a specific home, then the new one applies, but if they throw 300 applications in between now and February, then they get the old rate. Okay.

Or decide to pay system development fees upfront, which is always their choice. Um and that typically was the way that we would see things operate. Um but the the general assembly in in their wisdom said no you you cannot force that upon somebody only when that allocation is or when that um flow is allocated at time of the building permit but they always have the choice to do that. Okay. David, thank you for your presentation.

Thank you. Okay. Number 18, CIP ranking criteria and Kyle will present.

Yes. Thank you, Madame Mayor. And um appreciate the uh input in regards to all the items uh today. What what I wanted to present to you as we move into our uh budget process is to uh put some level of analysis on capital improvement uh plan items that are submitted to uh the finance officer and myself uh for review and then to be able to provide some sort of ranking uh or weighted criteria um when we do our annual planning meeting uh at the end of January. This would generally uh be considered that uh quantitative analysis. You all then would be provided a a uh opportunity uh for your input and then we will [clears throat] uh then provide scores and and figure out where things sit. This does not uh force your hand into saying only uh things that meet a certain criteria are going to be funded. Um and it doesn't all it doesn't set in stone that says that um we're going to build a tot lot as opposed to buying a fire truck because we have no fire trucks by any means. So um again presenting this to you uh we have built this into a uh complex uh Excel format um to where uh these evaluations will will be assigned uh criteria scores and then uh once again presented back to you. So uh first thing being alignment with adopted plans by the governing board. Um that can be a comprehensive plan, strategic plan, uh something else that this board has said yes, we agree with this plan um and the items that are contained with it. Are we eliminating or or preventing or reducing an immediate

hazard or uh to safety? Um does it assist the town in meeting existing or new mandates, laws, and regulations? Uh continuation of a project currently underway uh or related to other high prior priority project. Is there some nexus between this project and an existing project? Um enhancing the economic development in the town. Uh that either indirectly or directly adds to the tax base. Um you know justification would be needed in order to determine uh what that that point system would look like. Um necessary for continuation of providing one or more town services. Improvement to the quality of existing service. improvement to the quantity of existing service. Um how many residents, you know, in a percentage- wise does that affect? Are there obstacles that would prevent implementation of the project? Will the project be used by the town andor residents often? Um is there outside non-financing funding sources or generated revenue? So, grants or or fees associated with the capital improvement item. Um so, those would be the the basic criteria that we would like to uh implement. uh when we start collecting capital improvement items uh that are due December 31st. So happy to uh receive some input on these and um we'll be more uh pleased when we can start running these things through the uh process and then presented back to y'all. Um right now you get projects uh submitted for the capital improvement plan um with justifications, with descriptions, etc. But this just provides additional information, additional uh waiting to help you make uh those those types of decisions. So,

okay. Any questions for Kyle? Any comments concerning the CIP workshop scoring matrix? Well, I have an observation I'd like to share and this the the process they're using is great because gives you the appearance of some type of a u arithmetic metric that you can hang your hat on. It does require a couple of assumptions that I think we need to be aware of. First is this is what's called an unweighted compensatory decision model. It's one of a variety of models that are used in consumer behavior research and things like that. by un uh unweighted meaning that each one of the 14 criteria are equal in importance. So a high score uh you know so there there's no prioritization of what criteria are more important to us than than uh another. So each one is equal. And the other thing is it's compensatory in that if you score high on one of the criteria, you can also score low on another criteria and still have a higher net score than somebody that scores consistently in the middle. So uh bad performance on one is compensated for good performance on another. Uh and that's what you have. And I'm going to give you an example here. And I used this in one of the classes I taught. I And it's about how consumers make decisions. Imagine you're buying a car. All right? And in your mind, you've got three things you're looking for. One is um what kind of gas mileage am I going to get? How much is it going to cost me to maintain it? And what color is it? Okay, assume these are three cars that you have to choose from. And each one costs exactly the same. So cost is no longer a factor. Uh, one gets good gas mileage, doesn't cost a whole lot, but it's blue. It's your favorite

color. That scores X number of points. Another car gets absolutely fabulous gas mileage. It's a hybrid. It almost nothing to maintain it, and you can do it in your own garage, but it's pink. Personally, I would not drive a pink car regardless of how good the gas mileage is or how good the maintenance is. are any of these criteria like that where if it had doesn't have that score or scores a zero that we absolutely should never consider it. So that's called a conjunctive model. It's a little bit different. So if there are criteria that we you have to have at least a minimum score before it's considered, we should identify those. If there are rankings of importance, we should also identify those to give a little bit more information as to what the score means. That and that's all I'm going to say. Um I think it's a great start. And if and if you want to keep it this way, I I'm not going to raise a create a ruckus.

Well, I I think um thank you for the input uh first and foremost. Um, I think we're also going to see, you know, the challenge that I've had with it and in looking at this is in prioritize or assigning points to something my outcome is inherently going to be different than Melissa's I think with some of these things. So that's where the in my opinion the the biggest challenge is going to be in presenting objective scoring based on the worksheet because I think it depends on who's doing the worksheet and what their potential opinion is. if there's not concrete evidence to to say uh something different, you know, if the the scenario that has that I've contemplated with this is, you know, you look at a segment of multi-use path and what is the percentage of residents that have either used that or or have access to it? Do you say 100% because it's a physical public access that's available 24 hours a day, 7 days a week or is it do you try to delineate only people who enjoy walking or riding a bike that are going to use it? Um, you know, so those are some of the challenge that challenges that I've had. Uh, I do look forward to to sort of seeing where things shake out and then making any sort of modifications that we might want to do in the future if this does not work for us. And

so we'll be able to see the scoring on each of the attributes. Absolutely. Okay. Then we can make decisions about well good score on this. And for example, if we had to choose between a swimming pool or a skate park, correct? I don't use the skate park, but I would use the swimming pool. the amount of people using one versus the other, but the ongoing operating cost of a swimming pool is outrageously more. So, there's going to be different opinions on all but the the um the thing about this is that I have a pink car that Mary pink car I worked hard for that pink [laughter]

that's the Mary Kay car. So, so the the the other side of this that that you all will get to participate in is um the level of support, you know, that goes back to that that qualitative the the side of the evaluation and you know, does how does council feel about a certain project versus another that the color I would say in your example um you all will get to be able to choose that pink car or not choose the pink car. I I think the criteria are pretty good. I I mean the the uh they're very encompassing. I I I don't I can't I couldn't see anything that I would add. Thank you. So, thank you for your input. Yes.

And it's not something you all are voting on. It's just a hey FYI. This is something we're we're working on. So, thank you, Kyle. Thank you. We're going to see these CIPs at the end of January. At the end of January. Okay. All right. Mr. Wilson, our fire chief, Alan Wilson, has been very patiently waiting along with some of his firemen that are here today. That's all right. They saved the best for last. That's right. That's right. So, it is technically still morning. So, Madame Mayor, members of town council, [laughter] morning,

members of the community, thank you for the opportunity to speak with you this morning. Uh I am here today to uh at the mayor's request to review the fire on Northshore Drive as well as to address some recent criticism that might have been directed at our firefighters following that response. I want to be clear at the outset. Constructive uh constructive review and accountability are appropriate and necessary in public service. However, criticism must be grounded in an accurate understanding of the realities firefighters face, the hazards inherent to structural firefighting, and the operational limitations imposed by staffing and resources. Structural fires are among the most dangerous environments any profession encounters. Firefighters operate in conditions that are immediately life-threatening. Extreme heat, toxic smoke, structural instability, zero visibility, and rapidly changing fire behavior. Modern fires burn hotter and faster than those of past decades due to the synthetic building materials and furnishings. These conditions dramatically increase the risk of injury, long-term illness, and death. From a health standpoint alone, the dangers are significant. Firefighters are routinely exposed to carcinogens, toxic gases, and particulates that penetrate protective gear and are absorbed through the lungs and the skin. Even short duration exposure can have lasting health consequences. Firefighters accept these risks knowingly, but it is critical that decision-making on the fire ground balances property conservation with the preservation of life, both civilian and firefighter. Another reality that must be acknowledged is staffing. Fire ground strategy is directly tied to the number of trained personnel available on scene. Limited staffing restricts what can be safely and effectively accomplished. Tasks such as interior attack, search and rescue, ventilation, water supply, and rapid intervention require adequate

personnel operating simultaneously. When staffing is insufficient, incident commanders are ethically and professionally obligated to limit operations to those that can be performed safely. Criticism did not does not factor in these constraints oversimplifies an extraordinarily complex and dangerous operation. Firefighters do not choose conditions, building construction, fire load, or response time. They do not control staffing levels once the alarm is received. What they do control is how they manage that risk. And the accepted standard in the fire service is clear. We risk a lot to save savable lives. We risk little to save savable property and we do not risk lives for property that is already lost. The firefighters involved in this incident followed that principle. Their decisions were based on training, experience, and nationally recognized safety standards. Those decisions were made in real time under extreme stress, with incomplete information, and with the responsibility of ensuring that every firefighter went home at the end of the call. It is easy to analyze a fire after the fact with photographs, videos, and the benefit of time. It is far more difficult to make those decisions in the moment inside a burning building while managing life safety, fire spread, and limited resources. Our firefighters serve this community with professionalism, courage, and a deep sense of duty. They deserve fair evaluation, informed discussion, and the support of their community and elected officials. If this community desires different outcomes in the future, like faster containment, more aggressive operations, or expanded capabilities, those outcomes require investment in staffing, training, and equipment. They cannot be achieved through conjecture alone. I fully support the men and women of the Surf City Fire Department for their actions during this fire and the two others that we've experienced since then, which

haven't received much attention. Our firefighters performed outstandingly given the circumstances and available resources. Our fire ground operations differ from other departments because we are unique. Though we're a career fire department, we do have limited staffing. We do not have 17 or 28 personnel arriving within 8 to 10 minutes of a structure fire is recommended by NFPA standards. Because we simply like the resources, we don't have fire stations every few miles or four or five person engine companies at every station. Our geographic isolation means that we are not surrounded by nearby resources. Mutual a companies are miles away and can only respond from specific directions. To meet these challenges, we develop our own operational guidelines that prioritize our personnel safety and effectiveness based on the situation. Our methods may differ from those of larger departments because we don't fit into their typical models. And if anyone has specific informed questions about our tactics or priorities, I invite them to talk with me or any of our other chiefs. We would be happy to discuss our approach. I ask the council and the community to stand behind the men and women who stand between you and catastrophe. Support them, listen to them, and ensure that discussions about their performance are grounded in fact, not frustration. Thanks. I appreciate your time for that. We'll move right into the presentation. So, we'll talk about timeline, resources, mutual aid, as well as some of our tactics and outcomes, some contributing factors, as well as our water supply and hydrant maintenance system at the end. Uh, as you can see, our alarm time came in at 5:48. Uh, processing time at the dispatch center was just uh under a minute, which is well within national standards. Uh we got dispatched at uh

5:49 where our units first a unit checked uh in route at 551. 2-minute turnout time still within our national standards. Arrival time for our first engine was just 3 minutes later at 554. Uh engine 25 arrived at 558. Uh rescue 25 and tower 25 just a few minutes after. And our last unit cleared initially cleared at just after midnight that night. We'll show some pictures and videos here in a minute, but I want to give you some additional uh arrival times as well. North Topsel Beach Engine arrived at 5:55, which is a little bit unusual. Uh but they were actually had to be happened to be in their truck at the time, saw the smoke, knew they were going to be responding. So, actually, they they went ahead and started this way. So, their response time is much quicker than it would normally be. much the same as engine 14 from Pender EMS and fire as they were at Lowe's when the call came in. So, two of our mutual aid engines actually got there much sooner than they would normally get there. Uh, Captain Citerelli arrived with a bunch of additional offduty personnel at 610, Topsel Beach engine at 611, Holly Ridge at 6:14. We did get a battalion chief to help with incident command at 616 from Pender MS and fire. One thing I want to note is we had 10 personnel within 10 minutes. The national standards, as we've talked through the budget process and working with our ladder truck staffing plan, the national standards requires 16 to 17 people on that initial alarm within 10 minutes. We don't have that and we still have all these other companies coming. So, we know we have limited staff. We have limited personnel that are going to arrive. That's why we create our own guidelines to operate the way we do. It took 25 minutes to get 30 people on scene. That's not unusual because our people have to drive and travel from far away. But again, looking

at the NFPA standard 1710, it requires for a lowhazard home 16 to 17 people within that first alarm 10-minute arrival time. We didn't meet that because we don't have the personnel to meet that. But additionally, this home here doesn't meet the low standard threshold either. A low st low low hazard threshold is a singlestory single family home. This is a four three-story home elevated actually meets the minimum h the the medium hazard threshold which is actually 27 to 28 firefighters. So you can see how far we are behind the eightball just on staffing and how well our firefighters did with very limited staffing. Some additional agencies we had had a bunch of folks from Surf City Public Works, PD, Emergency Management, Jones, Enslow, Pender County Fire Marshalss, and the Burgall Fire Marshall also came out to help. This is a a list of just how many people we had from each fire department. All total we had 37 uh six of those being volunteers. Uh 31 career. One of the things I want to point out is we had 12 offduty surf city firefighters come to this call. That's 75% of our career staff that weren't working that left their home to come and help because they knew we needed it. [snorts] So, just a brief timeline. Uh, we've already talked about some of these things, first arrival units. What I want you to see is we we had fire attack operations within 4 minutes of arriving on scene. We had some exposure knockdowns with within four minutes, 6 minutes. We had search and rescue going on within 20 minutes. These are very significant times because we had to operate within multiple areas of this fire. When we get to some of the videos, I'm going to point that out. Again, fire under control uh just a

little bit later and we didn't clear until just after midnight. Any questions on response times before we continue on? All right. So, I wanted to go over just a little bit about our tactical priorities. When we look at what we have to do in terms of when we arrive to a structure fire, rescue is always going to be our top priority. Is there a rescue that needs to happen? Um or then then we move down to exposures. A lot of times uh the fire itself is not necessarily the biggest hazard especially when we talk about the island especially when we talk about fully involved structure fires that that are already that way when we get there exposures become our next uh major priority and then it's confinement extinguishment and overhaul. [snorts] So as we look at this video this is the fire actual fire starting video. You guys have the video in front of you. So if you look at the top right corner just underneath the time stamp you'll see the fire. [snorts]

So I want you to also understand and look at the time stamp because what you'll see is it's 5:46. Do you remember what time I said the fire was reported? 5:48 548. Correct. So I want you to see how fast this fire grows. Once it gets going, you'll see that it's a free flowing a free forming and wind driven fire. You ever tell me what started that? We'll get to that. [laughter]

But the short answer is no. Cause is still undetermined. However, we know where it started. But fire can grow in optimal conditions. It can double in size every 30 seconds. So think about a trash can. It can double in size every 30 seconds. But then in 30 seconds that trash can is now a roll cart. And then that roll cart 30 seconds less later is now a dumpster. So um that's just how fast fire can grow. But you're going to see here in just a few seconds it's going to actually light off. It's actually starting underneath the home. It's going to light off the exterior of the home. [snorts] You can start hearing some glass popping, some fall down. So now it's getting to the exterior of the home.

Amen. Nobody's Nobody hasn't called 911 yet. Now 911 is is receiving its first call. Jeez. Yeah, but we haven't even been dispatched yet. So, you'll start to see you can hear glass breaking. You'll start to see uh parts of the home falling down. Jeez, starting to go over here, too. And again, still haven't been dispatched. And that's kind of what you would call fully engulfed, right?

Well, you can't quite see the front from this picture, so I wouldn't want to assume. Uh, but when you look at this one, that's fully involved, I would say. So,

so this is what we found when we arrived. I've already told you that the call taking time frame, the the call processing time, the turnout time, and the response time are well within the national standards. But this is what we found when we arrived. Jesus, this home is lost. There's absolutely nothing we can do to this home. There's if there's somebody in that home, they are unsavable. That is not our priority. Our priority is the home on the north side, the south side, and the one across the street. So, I've already talked about having limited personnel and limited staff. That's for one fire. Technically, I have four fires here. I have the main fire. I have fire at each exposure beside it. And I have fire across the street. So now I'm having to split my crew up even more to be able to handle all four situations. There's not a lot that we can do to the middle fire. But what we can focus on is the exposures. But this is what we found when we arrived. I'm not going to show this whole video. It's on Facebook. you can find it or I'll send it to you. But what I do want to show you and what I want to talk about is the exposures. This is the exposure on the south side, which is what we would call the Bravo side of the home. Boat totally lost. The boat hasund I think 175 fresh gallons of gas in it. Never lit off. The boat's gone, but we didn't have that hazard because we were able to cool that fire enough to keep that from exploding. You will see there's significant damage on the side of the home. All the windows are are melted or are broken out. You can tell that the sophet and eaves are burned away. But what I want you to understand is look at the inside.

This home is savable. Sorry, I went too far. This home is savable. A lot of their personal belongings are saved. This is the the room directly adjacent to the fire. Our firefighters were able to save this home and this property for this homeowner. We can move to the north side exposure. You can see a little bit more damage on the the exterior decking and structure. We did get fire in the attic of this home. Understand that firefighters were inside of this house at the time. They had to pull this ceiling down to put the fire out inside of this attic. Fire crews were inside this home at the same time you had that huge fire right next door. So they put their lives on the line to be able to do that. They had we did have to remove the the ceiling in the living room area and the kitchen area to put that fire out. But look at the other bedrooms. Again, this home is savable. a lot of their property, a lot of their personal belongings were able to be saved because of the firefighters of the work that they did. Investigative findings, we did have the fire marshall's office here in Surf City, uh, Pender County, Burgall, and is and including the investigators from the insurance companies, uh, were able to determine the origin, but not the cause. So, we'll talk about some contributing factors. Um, I I like to say proximity, but proximity is going to be a huge issue for us on the island in general. Uh, basically because of the location of homes and as close as they are to each other. But I also want to talk about geography. I want to talk about geography because we're we're landlocked, if you will. We don't have uh fire companies within 360 degrees of us. We only we can only get resources

from the north, the south, and the west. And they only have one access to get to us. We don't have units converging from all areas like you would say in the middle of the state or even in Burgal, if you will, where you have fire departments strategically located all the way around you. We only have departments located on three sides of us. So that's a contributing factor. weather. This was a wind driven fire. You can see in that arrival video, the wind is pushing that fire directly across the street. We did have fire across the street. Um it wasn't as substantial as the fire on each side, but we did have fire across the street. Bystander assistance was really uh it was a thorn for this fire. We had citizens climbing on fire trucks, pulling fire hoses off of fire trucks, climbing on top of fire trucks trying to get equipment off of our fire trucks. We had to utilize personnel to keep those citizens away from the fire trucks. We actually had to have people removed from the fire scene. That takes away even more limited staffing that we have to to address those situations. So, that did play a role in the operations of this fire. We got a lot of complaints and a lot of arguments about how y'all look so unprofessional. You had people in plain clothes jumping on fire trucks. Well, I can assure you they weren't firefighters with us. They were citizens that had no business being there. Building construction, uh we we see a lot of light frame uh construction these days, open concepts, vinyl siding, they all generate a faster fire growth. Uh that's a problem that we're seeing across the country. Uh but it's definitely a contributing factor these days. All the synthetics, fires just burn hotter and quicker these days than they ever have before. So definitely a contributing factor here. Uh, when you look at how fast that fire spread and grew just on the outside of that home,

fuel load. Island homes are great. I love a raised home, but what do we do underneath? We store any and everything. We store cars. We store golf carts. We store surfboards and grills and propane tanks and we store all that stuff. Just adds to the fire load. So, that's a a problem that we had as well. Any questions before I move into our water system and hydrants? So I want to address also some concerns raised about water supply and hydrants. Water supply is a crucial part of our tactical approach. Since each each situation varies, it requires a different tactical plan including the water source. The surf city fire department operates in five different water systems. The town of Surf City Public Utilities, Pender County Water and Sewer, Onslow County Water Authority, private water systems, as well as water hall and tanker shuttles. Hours of training, hydrant maintenance, and flow testing help the department better understand the water availability within all areas of our fire district. As a firefighter, I wish we had unlimited water. Uh, but unfortunately, that's that's not feasible. All systems have limitations, but we prepare by training and deploying specific tactics aligned with our priorities and water supply available. Each of our handlines deliver between 160 and 250 gallons of water per minute, while our master streams and blitz lines range from 500 to a,000 gallons of water per minute. There is a limit to how many lines we can deploy simultaneously. Additionally, when multiple trucks draw from the same water system, you know, that hinders that makes the issue, you know, a little bit worse. However, it does not hinder us as we understand this and trained to handle these scenarios. During this fire, we heard multiple times that we should have done things differently regarding water supply or handline choice. I assure you, our officers

selected the best operational tactics available at the time considering the water and personnel we had. We did not face a water supply problem at this fire. Of course, we wish for unlimited volume and pressure, but the water we had did not negatively affect the fire's outcome. One of our mutual a companies did connect to a malfunctioning hydrant that was on Anasa's system, but they they did not panic. Instead, we abandoned that hydrant and utilize the next hydrant downstream. These are contingencies that we plan for. We have just under 800 hydrants within our system uh between all of our water supply partners that we that we work with. Uh one of the things that water supply is very important in the fire department, not only from a fire protection standpoint, but also within our ISO rating. Um when we look at an ISO rating, some may ask, "What is that?" Well, that's a rating that the insurance service organization gives to fire departments to determine what your fire insurance premiums are going to be. Uh, ratings range from 10 to one. 10 meaning that you really don't have a rated fire department. One being you have the the best rated fire department. We currently are three, which is a really good rate for a small town fire department. Uh, we and we have that across our whole fire district, not just Surf City. Uh but when we look at how that rating is is determined that 40 points out of a 100 is solely water system. 10 points of the hundred is based on the county's uh dispatch center which we have no control over and 50 of those points are within the fire department specifically whether it's response equipment training staffing those types of things. But then we can break down those 40 water system points. 30 of that is just a system as a whole. How much how much static pressure how many gallons of reserve do we have? What does our system look like? Three of those points are for hydro distribution.

How many hydrants we have, how close they are, or how far apart they are from each other. And then seven of of those points, which really is the only thing the fire department has control over, is is the hydrant inspections and flow testing. We have to inspect each hydrant every year to gain maximum points. We also have to flow test them every 5 years to gain maximum points. So we have the we have our entire water system divided into fifths and we flow test a fifth of those hydrants every every year to maintain our 5-year rotation. But that's really where the fire department's involvement in hydrant maintenance uh it kind of falls. That's where our responsibilities are through the ISO and some other recognized standards. Um, if you have any questions specifically, more than happy to get David Price to talk about the, you know, repair, the maintenance as well as replacement of our fire hydrants within the town. Do we have any questions?

Madame Mayor, I Excuse [clears throat] me. Um, Chief, thank you for that presentation. I think that for the benefit of the board and for the public, I think it it's important for um Price to come and talk about our hydrants, especially ones on the island um and some of the challenges that we have and how we are addressing those challenges because I've specifically asked him to make sure that we communicate this to the public on our website about our fire hydrant maintenance and replacement program. So, I think that if if you'll entertain Mr. price to talk about that.

I just have I just have one thing I like to tell Allan and the fire department as well as the police department. I think for our town, we have one of the most organized well well done departments. I mean, I've been to a few of the fires after they've occurred, you know, and the organization and the dedication of the firefighters, the policemen in this town. And I think we should uh I would just like to give you [applause] kudos because I tell you what, very impressive. Very impressive. I appreciate it. Like I said, Mr. P a little bit. Uh talk about the maintenance. Um there's a huge partnership. Full credit to the guys respond, but I also like to give credit to TJ who I believe your maintenance program.

Uh whenever something's down, he calls us immediately. Uh we got a term called blackback hydrant. means a hydrant's down. You got black bag on. It's not to be used. I I challenge any of you all to see how many of those are in Surf City. It doesn't happen. Fire department does a great job notifies us. Typically, they're up the same day. We have a huge reserve that inventory Miss Mill was talking about earlier. That's where that comes into play. Making sure we have inventory to fix it on the spot. Um uh like I said, also like to give credit to um the fire marshal, John Barton. The design comes in heavy on these things with developments. Um chief talked about fire hydrant placement. Every 500 ft in surf city is a hydrant. It is the largest size hydrant that they build which is 5 and a/4 foot valve. Um storage we maintain twice the required limit in the air. That costs money. That's the investment surf city made years ago to ensure that we have that much water in the air at any time. twice as we sit today not when decision was made in 2004 twice what we're required to have today that's foresight um the maintenance like I said that is a a issue like I said uh that is split between us any minor maintenance the fire department handles greasing stuff like that we supply material and they to handle that for us that is a huge thing that a lot of firefighters won't do that is due their credit they help us out on that anything major that involves construction we handle a lot of Our hydrants are from the 60s uh when the original water system was built. We do have a plan in place, $60,000 a year. You'll see it in this year's budget as the previous year budgets that we replace hydrants. That pays for about five hydrants a year. We're fixing to start that cycle again um the second week in January. The reason we do that that time of year is because a lot of times we have to plan water outages. We don't want to do that in the middle of summer. We want to do that in the cold

and winter and have minimal downtime, less traffic, less interruption to full-time residents. Uh, second week of January, you'll see a lot of public notices. I'm sure a lot of people be calling you yelling, "I got no water. I got discolored water." This is what we're doing. We're replacing this 1960s hydrants. Um, the uh, chief mentioned something about the pressure and the flow. Sir City, this is um Tree Burton's um area. He requires between a,000 and500 gallons a minute on all new hydrants to be on our system. If I'm not mistaken, that's three times our neighbors.

Mhm. Our static pressure in our system is at the lowest 65 PSI, at the highest 80 PSI. That's two to three times the state requirement. So, like I said, all credit to the fire department. It's not just what they do that night. It's what they do year round. Appreciate it. Hey, David. David. Did we replace five hydrants last year? We did not. Okay. Um got a little busy. We missed last year year before, but I mean that's been an ongoing thing.

It's been ongoing thing for three years. We did replace three the year before. The issue we run into is uh material. Um there's a material in the ground that they used in the 60s that we're figuring out a good way to replace. How many uh 60s a hydrates do we have left on our system? 200. Thank you. That's 200 out of the 800 or is 200 out of the 400 that we have? Yeah. So so the 800 includes Anasa as well as Pender County, right? So if I if I remember right, SE city has about 600 of those hydrants. Okay. Is this new water line we're talking about that used to go where the where the old bridge was? Is that roof things? I mean,

drastically, like I said, there's a um now this particular fire um just to let you know how it typically works. They're doing all the hard work. I monitor from my house [laughter] uh to make sure that all the um water is. They didn't even put a dent on us. They flowed and flowed. It wasn't a water issue that I could tell. Um, but even with that, um, the next closest one I could do is a peninsula. That one put a hurt on us. Y,

something like that. Is this instead of running a 10-in 1968, uh, line underneath the waterway, which we have now, it's going to be a 12 in and it's going to be interconnected more often. So, the more pathways you have for that water to get to where it's going, the better. So, this is going to dramatically improve that. So the rumor or the rumor that the things that pop up on Facebook or wherever they pop up that we don't have sufficient water, we don't have pressure. I think that's an ongoing thing because on my street I think it was in 171 18 we had a tremendous fire and that was one of the things that surfaced the ugly head and I was there and there was no lack of water. People say, "Well, the fire hydrants didn't work." And this is just something I think they they jump on and and put it out there for God knows what reason. But,

well, I can't speak to I'll let Chief speak to that, but the pressure issue I've been trying to figure out for a while. Uh, my personal opinion, it's perspective. Um, like I said, we our lowest pressure on average is 65 PSI. That's the dead end of by the tops of beach line. That's just the furthest point away from our tower. Um, when people say they got low pressure, I'm not sure if they mean that they actually have low pressure or it went from 65 to 55,

right? So, uh, that that's how all I can think of pressure. I've never seen it below 55. And that's what I think of the EC 10 pound difference. They think they got low pressure. They're not used to living in some of the more country places that have 30 pounds of pressure. If that I would like to um just make a request that at the time that we do the new waterline project down northshore to was it Dolphin or Shell right through there will all those be replaced when that new water line goes in like the hydrants on that street.

There'll be additional hydrants that will be replaced. A lot of those hydrants are relatively new. We replace those in 99. Um we can go and add that if you like but they're only about halfway through the life. But if if they need to, y'all would would do them at that time. We will be adding a bunch of new hydrants as part of that project. And thank you for for supplying water or we couldn't put out these fires. That's right. And thank you to the council that supports all the departments in in servicing our town. So,

thank you. Well, I can now say good afternoon. It's our city. Um, thank you for for bearing with us. Um, I think we got a lot of um answers today and a lot of guidance on how to move forward on different projects. And um, I just wanted to say merry Christmas. Um, I know it's a special time of year for a lot of people and there's a lot of changes this time of year as far as who's with us, who's not with us, as far as a loss in family. Um, but it is a special birthday. It's it's just Jesus's birthday. And I'm sure who else has a birthday in between the holidays that just gets caught up? Anybody here? John does. John shares a birthday with baby Jesus. [laughter]

And I just want to say happy birthday to John. Thank you. Andy, when's your birthday? Oh, middle of the summer. Middle of the summer. [laughter] I didn't want to leave anybody out. So, if everyone could say on the count of three, happy birthday, John. One, two, three. Happy birthday, John. Thank you. Thank you very much. Um, if there are no other comments, can I have a motion to adjurnn? I'll make a motion to adjurnn. Second. All in favor say I.

I. Same sign. We are adjourned. [music] [music] Heat. Heat. [music] [music]