1. Board of Commissioners (BOC)

TOWN OF PITTSBORO BOARD OF COMMISSIONERS JUNE 26, 2023 REGULAR MEETING MINUTES PAGE 1 OF 5 TOWN OF PITTSBORO The Pittsboro Board of Commissioners met in Regular Session on Monday, June 26, 2023, at 7:00pm in the meeting room at the Chatham County Agriculture and Conference Center with Mayor Pro Tern Pamela Baldwin presiding. The meeting was called to order at 7:01 pm. Mayor Pro Tern Baldwin requested a moment of silence with the recitation of the Pledge of Allegiance led by Commissioner Farrell. ELECTED TOWN OFFICIALS PRESENT: Mayor Pro Tern Pamela Baldwin, Commissioners John Bonitz, Jay Farrell, Kyle Shipp, and James Vose. ELECTED TOWN OFFICIALS ABSENT: Mayor Cindy S. Perry TOWN STAFF PRESENT: Town Manager Jonathan Franklin, Town Attorney Paul S. Messick, Assistant Town Manager/Director of Engineering Kent Jackson, Chief of Police Shorty Johnson, Public Information Officer/Emergency Management Coordinator Colby Sawyer, Director of Planning Randy Cahoon-Tingle, Finance Director Heather Meacham , Water Treatment Supervisor Cory Saulsbury, Customer Service Specialist Kirsten Pavlich and Town Clerk Carrie Bailey. Mayor Cindy Perry arrived at 7:03pm. ADOPTION OF THE AGENDA Mayor Perry called for a motion to either approve or modify the agenda as proposed. Commissioner Farrell made a motion to approve the Regular Agenda, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion carried unanimously. CITIZEN MATTERS 1. Manager Updates Assistant Town Manager/Director of Engineering Kent Jackson introduced new Public Works Director Daniel Snipes. 2. Mayor and Commissioner Updates and Concerns Mayor and Board members gave updates on the committees and boards on which they serve. 3. Public Comment None. 1  TOWN OF PITTSBORO BOARD OF COMMISSIONERS JUNE 26, 2023 REGULAR MEETING MINUTES PAGE 2 OF 5 CONSENT AGENDA Mayor Perry called for action on the Consent Agenda. The Consent Agenda contained the following items: 1. Minutes of the June 12, 2023 Regular Meeting of the Board of Commissioners 2. Minor Corrections to Mellot & Grantham Rezoning Ordinances-REZ-2022-03 and PB-23-25 3. A-2023-01 Voluntary Noncontiguous Annexation Petition for PIO 61066 4. ACE LLC Code Enforcement Contract FY 2023-2023 5. Acceptance of APRA Grant Offer-Find It-Fix-IT Sewer Rehabilitation 6. Budget Amendment to Reverse ARP Coverage 7. Budget Amendment for ARP Funds 8. Budget Amendment for Sanitation Services 9. 2023 Planning Board Calendar Modifications 10. Budget Amendment to Sanford Regionalization Project Commissioner Shipp made a motion to approve the Consent Agenda, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion carried unanimously. PUBLIC HEARINGS Commissioner Shipp made a motion to open Public Hearing for Regional Utility Merger- Town of Pittsboro and City of Sanford, seconded by Commissioner Bonitz. Vote: Aye-5 Nay-0 Motion carried unanimously. 1. Regional Utility Merger-Town of Pittsboro and City of Sanford Assistant Town Manager/Director of Engineering Kent Jackson shared updates of merger which entailed customer focused discussions, benefits of the proposed merger including sewer capacity, additional water source, rate stabilization and a strong partnership. Jackson shared potential risks associated with a potential merger such as staff impact for secure jobs, funding strategy for capital projects, process for resolving disputes and water quality action plan . Jackson highlighted another important aspect to consider is Chatham Park integration as planned development supports future rates, future reuse water commitment 3M, and sharing previously reserved capacity. Commissioner Bonitz voiced concerns of water quality, specifically pollutant goals or limits, capital improvement details within the agreement, rate considerations and providing more information for public access. Mayor Pro Tern Baldwin was also concerned about water quality and time-frame on installation of GAC system , merger page and employee retainment. 2  TOWN OF PITTSBORO BOARD OF COMMISSIONERS JUNE 26, 2023 REGULAR MEETING MINUTES PAGE 3 OF 5 Commissioner Vose requests technical submittals to indicate water quality provided by City of Sanford. Commissioner Shipp addressed concerns of sporadic unregulated contaminants and having a water interconnection would be critical for times of contamination prior to the Western Intake Partnership availability. Shipp shared the proposed merger would address rate stabilization and eventually parity with the City of Sanford. Shipp stressed the need to work together better going forward with regional partnerships but shared the willingness of City of Sanford to work together. Shipp also encouraged everyone to look into the merger information page posted at www.pittsboornc.gov/merger. Commissioner Farrell asked about timeline on rate parity and recommended to increase the annual meeting to semi-annual. Farrell inquired about hydrant testing with the fire department. Jackson shared the agreement would be the City of Sanford Utility Department would perform the required hydrant tests and monitoring. Public Comments: Greg Stafford, 901 Jordan Hills Loop, Pittsboro spoke in favor of the merger to provide sewer capacity for growth of downtown Pittsboro. Elaine Chiosso-1076 Rock Rest Road, Pittsboro, delivered concerns of water quality from Haw River and Deep River which join to the Cape Fear River. Dr. Jessica Merricks-126 Evergreen Drive, Pittsboro, shared concerns of water quality, pollutants and levels of PFAS and 1,4 Dioxane in the water levels provided by City of Sanford . Randy Voller-21 Randolph Drive, Pittsboro shared support of the proposed merger personally, as a Board member of the Orange Chatham Association of Realtors and also supplied a letter of support from the Labor Caucus of the North Carolina Democratic Party. John Foley-644 Millbrook Drive, Pittsboro shared his support of the proposed merger to support affordable housing for Pittsboro residents. Jack Pendergraph-964 East Street, Pittsboro, expressed supporting the proposed merger for water and sewer capacity as a top priority for new and existing industries who are looking to grow or locate in the town. John Wagner, 210 Jessamine Lane, Pittsboro, expressed concerns of water quality standards, goals and timelines while addressing PFAS and health standards. Please see written remarks that are attached at the end of this meeting minutes. Commissioner Farrell made a motion to exit Public Hearing, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion carried unanimously. 3  TOWN OF PITTSBORO BOARD OF COMMISSIONERS JUNE 26, 2023 REGULAR MEETING MINUTES PAGE4 OF 5 Mayor Pro Tem Baldwin made a motion to open Public Hearing for Conditional Rezoning Request-, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion carried unanimously. 2. Conditional Rezoning Request-PB-23-178: RA Residential Agriculture to MR-CZ Multi- Family Residential Conditional Rezoning Planning Director Randy Cahoon-Tingle presented the item, noting minor last-minute changes and reviewed the rezoning request. Nick Robinson, Attorney with Bradshaw Robinson Slawter and Rainer, LLP representing Chatham Park Investors, LLC for the conditional rezoning request will allow and anticipated three hundred to three hundred thirty-eight (300-338) affordable house units on this parcel and adjoining parcel. Mayor Pro Tem Baldwin made a motion to close Public Hearing, seconded by Commissioner Shipp. Vote: Aye-5 Nay-0 Motion carried unanimously. Mayor Pro Tem Baldwin made a motion to approve request, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion carried unanimously. OLD BUSINESS 1. Downtown Advisory Board Appointment Town Manager Jonathan Franklin presented the item. Commissioner Farrell made a motion to recommend Shannon Plummer, seconded by Mayor Pro Tem Baldwin. Vote: Aye-3 Nay-2 Commissioner Vose and Bonitz. Motion carried. NEW BUSINESS 1. None. MISCELLANEOUS 4  TOWN OF PITTSBORO BOARD OF COMMISSIONERS JUN.E 26, 2023 REGULAR MEETING MINUTES PAGE 5 OF 5 1. Holiday and Leave Absence Policy-Article VII. Section 2 2. Amended Recruitment and Employment Policy-Article IV. Section 4 3. Amended Separation and Reinstatement Policy-Article VIII. Section 2 4. Amended Holiday and Leaves of Absence Policy-Article VII. Section 26 5. Paid Parental Leave Policy-Article VIII. Section 27 Commissioner Farrell and Shipp had some clarifying questions and minor suggestions for improvement. CLOSED SESSION 1. None. ADJOURNMENT Commissioner Shipp made a motion to adjourn at 8:32pm, seconded by Commissioner Vose. Vote: Aye-5 Nay-0 Motion passed unanimously. ATTEST: ~ A&!i~ CindyS.PerMayor ~ L&_{) Carrie L. Bailey, Town Clerk ~ 5 -re.. 70 Teal Trace Court Pittsboro, NC 27312 June 23, 2023 TO: Town of Pittsboro, Town Clerk ATTN: Carrie Bailey PO Box 759 Pittsboro, NC 27312 SUBJECT: Public Comment Input - Pittsboro/Sanford Systems Merger Dear Ms. Bailey: My name is Arthur Masson. I live in the Chapel Ridge Development and am a Chatham County resident and tax payer. As a Chapel Ridge resident I use and am a customer of Aqua who uses water supplied by the Town of Pittsboro and operates Chapel Ridge's infrastructure for water and wastewater treatment. My research indicates that, today, we are paying one of the highest costs for water and waste water treatment in the state of North Carolina. I am grateful for the Town's recent investments (and future plans) addressing both PFAS and 1,4 Dioxane contaminates in our supplied drinking water. I believe this merger will take considerable financial pressure from the Town, better support future growth, and permit additional investments in contamination reductions for PFAS and 1,4 Dioxane. I also recommend the town seriously consider acquiring and merging the current Aqua water and wastewater assets into this proposed merged utility (Item 4 below). I therefore fully support the Town's plans for this proposed merger with the following conditions and understandings: 1. This merger will result in a much larger customer base for the more regional merged utility supplier, and as such the Town's current water customers will benefit from lower water rates due to the inherent efficiencies due to economies of scale for the larger, merged utility. 2. Any and all achieved water cost reductions will apply to ALL current Town Utility customers including Aqua as a bulk rate, outside city limits customer. This will directly reduce the high water costs I pay to Aqua today. 3. The town will insist that any additionally sourced water delivered from Sanford by the new Merged Utility will have the same levels of PFAS and 1,4 Dioxane contaminate reductions as delivered by the Town today for PFAS and as planned for 1,4 Dioxane. In other words, there will be no decrease in delivered water quality to all water customers currently served by the town. 4. Additionally the Town will consider integrating (and purchasing) the current Aqua water and wastewater assets serving the Chapel Ridge, The Parks at Meadowview, and Laurel Ridge developments. Including these Aqua assets and operations as part of the merged utility would provide still more opportunity for economies of scale benefits to all current Pittsboro water customers. This would also set the stage for a larger utility serving more of Chatham County which would be better able to support future growth north of Pittsboro in a fully integrated way and without a "for profit" additional utility provider involved. Sincerely, Art~ si ~ 224-227-3678 (cell) Carrie Bailey From: Henry Adleman < henryadleman@gmail.com> Sent: Friday, June 23, 2023 3:19 PM To: Carrie Bailey Cc: Dawn Cross; Tom heneghan; Gail Cell; Elaine Chiosso Subject: [EXTERNAL] Public Comment Input- Pittsboro/Sanford Systems Merger - June 26, 2023 BOC Meeting 658 Chapel Ridge Drive Pittsboro, NC 27312 June 23, 2023 TO : Town of Pittsboro, Town Clerk ATTN: Carrie Bailey PO Box759 Pittsboro, NC 27312 SUBJECT: Public Comment Input- Pittsboro/Sanford Systems Merger Dear Ms. Bailey: My name is Henry Adleman. I live in Chapel Ridge Development and am a Chatham County resident and taxpayer. As a Chapel Ridge resident I use and am a customer of Aqua who uses water supplied by the Town of Pittsboro and operates Chapel Ridge's infrastructure for water and water treatment. We are paying one of the highest costs for water and waste water treatment in the state of North Carolina. lam grateful for the Town's recent investments (and plans) addressing both PFAS and 1,4 Dioxane contaminates in our supplied drinking water. I believe this merger will take considerable financial pressure from the Town, better support future growth, and permit additional investments in contamination reductions for PFAS and 1,4 Dioxane . I also recommend the town seriously consider acquiring and merging the current Aqua water and wastewater assets into this proposed merged utility (Item 4 below). I therefore fully support the Town's plans for this proposed merger with the following conditions and understandings: 1. This merger will result in a much larger customer base for the more regional merged utility supplier, and as such the Town's current water customers will benefit from lower water rates due to the inherent efficiencies and economies of scale for the larger, merged utility. 2. Any and all achieved water cost reductions will apply to ALL current Town Utility customers including Aqua as a bulk rate, outside city limits customer. This will directly reduce the water costs I pay to Aqua today. 3. The town will insist that any additionally sourced water delivered from Sanford by the new Merged Utility will have the same levels of PFAS and 1,4 Dioxane contaminate reductions as delivered by the Town today for PFAS and as planned for 1,4 Dioxane. In other words, there will be no decrease in delivered water quality to all water customers currently served by the town. 4. Additionally the Town will consider integrating (and purchasing) the current Aqua water and wastewater assets being served by Aqua for the Chapel Ridge, The Parks at Meadowview, and Laurel Ridge. Including these assets and operations as part of the merged utility would provide st i 11 more opportunity for economies of scale benefits to all current Pittsboro water customers . This would also set the stage for a larger utility serving more of Chatham County which would be better able to support future growth north of Pittsboro in a fully integrated way and without a 'for profit' utility provider involved . 1  Sincerely, Henry Adleman Sent from Mail for Windows CAUTION: This message originated outside the Town of Pittsboro - Do not click links or open attachments unless you recognize the sender and know the content is safe. 2 To: The Mayor and Board of Commissioners of the Town of Pittsboro The Haw River Assembly is concerned about the proposed Pittsboro-Sanford drinking water merger. We hope you will consider these points below as you make your decision. 1. The Current Status of Pittsboro Drinking Water: The Town of Pittsboro is now using GAC to remove PFAS and many other chemicals in its drinking water treatment of source Haw River water. Last Fall the State Fiscal Recovery Funding awarded the Town with $12,224,000 for Ultraviolet-Advanced Oxidation Process (UV-AOP) to reduce 1,4-dioxane levels in the finished water (GAC does not remove 1,4-Dioxane). These advanced treatments, along with the efforts by the Haw River Assembly to get Burlington and Greensboro to reduce PFAS and 1,4-dioxane in the wastewater discharges, will bring Pittsboro's drinking water to a safe level. 2. Sanford's Drinking Water and PFAS: Sanford"s drinking water treatment plant is on the Cape Fear River, which means it is polluted by industrial contaminants from both the Haw River and Deep River, which join together to form the Cape Fear River. Sanford's 2022 Water Quality report for its drinking water shows levels of 17 PFAS chemicals, several of which are close to the EPA guidance limits . We are concerned about the cumulative effect on human health of the combined 17 PFAS chemicals in that drinking water. Sanford proposes to use GAC in its expanded water treatment, but exactly when will that be in place? 3. Sanford's Drinking Water and 1,4-Dioxane: Sanford reports that 1,4 Dioxane is below detection levels in their finished drinking water, but in the past there have been incidents that exceed the .35 ug/I EPA guidance for this chemical. Asheboro is upstream of Sanford on the Deep River, and has some of the highest levels of 1,4 dioxane in the state. In addition, as we have seen with the Haw River and Pittsboro's drinking water, 1,4 dioxane has come through in large "slugs" from upriver waste water treatment plants, and is not always captured in monthly sampling. 4. What other chemicals are in Sanford's drinking water? Sanford's drinking water plant is 15 miles downstream from their wastewater treatment plant. Sanford's sewer system combines industrial wastewater from factories with residential wastewater, along with leachate from landfills including the Brickhaven coal ash landfill in Chatham County. The Environmental Working Group's 2021 Tap Water Database 2021 Report for Sanford found 14 chemicals that exceeded their health guidelines . 5. Giving up water authority to Sanford: There are many aspects of the proposed agreement between the City of Sanford and the Town of Pittsboro that seem troubling in terms of ceding authority to Sanford . This includes decisions about Pittsboro's current drinking water plant, the transfer of responsibility for the ownership, construction, operation, maintenance, management, and financing of the Town Utility System from Pittsboro to Sanford and many parts of Section 1.03 Right to Operate. Is turning over the present and future drinking water system to Sanford truly in the best long-term interests of Pittsboro residents? We realize that the Town of Pittsboro wishes to find a larger water supply source as it grows and especially in context of the exponential future needs of Chatham Park. But it seems that the current advanced GAC treatment of Haw River water and installation of the UV-AOP treatment (using the grant money allocated) could give Pittsboro a sufficient and safe water supply for the upcoming years. The anticipated construction of the new Jordan Lake intake by the Western Intake Partnership, which Pittsboro is part of, is expected to take place in 10 years. That new water source would give Pittsboro a much expanded and safe water supply, while maintaining authority over this vital resource for its citizens. Sincerely, Elaine Chiosso Executive Director Haw River Assembly P.O.Box 187 Bynum NC 27228 (919) 542-5790 info@hawriver.org www.hawriver.org Our 41 st Year Working for Clean Water! Cc: Kent Jackson, Assistant Town Manager/Engineering Director  -- ~ O RANGE CHATHAM Association of REALTORS® June 26, 2023 Mayor Cindy Town of Pittsboro 635 East Street Pittsboro, NC 27312 Dear Mayor Perry, The Orange Chatham Association of Realtors ("OCH AR") currently has 623 members and 26 affiliates in Orange and Chatham and is currently headquartered in Orange County. As OCH AR' s current President, I am reaching out to you on behalf of our board and membership regarding the proposed utility systems merger with the City of Sanford: We are aware that the Town of Pittsboro adopted a resolution on May 23, 2022 for the express intent of regionalizing the public water and wastewater system of Pittsboro through the merging of infrastructure with the City of Sanford. We applaud the careful process the Town has subsequently followed through its consultant Freese and Nichols to evaluate the challenges and financial impacts of the regionalization and merger of its utility system with the City of Sanford. OCHAR supports the merger and the execution of the proposed interlocal agreement to merge the water, reclaimed water and sewer systems of the Town of Pittsboro and the City of Sanford especially in light of the current and future growth in the Town of Pittsboro. This growth will require extensive capital improvements and efficiency, quality of service and stable utility rates best delivered through an economy of scale that a merged system will provide to the user base. In addition, we further note that the supply of housing options in Chatham County is very strained. Only seven percent (7%) of listings in May were under $374,999 and only three (3%) under $249,999. This is contrasted by a Chatham market that had thirty-three (33%) percent of its listed inventory in May over $ I ,000,000 as compared to sixteen ( 16%) of the same inventory in Orange. Furthermore, the trend over the past twelve months of sales indicates that the market is moving toward a majority of listings and sales above $750,000. This state of the market clearly shows a "missing middle" along with dwindling workforce housing options. This current reality  ultimately hinders the ability of public, private, and non-profits players to address the lack of workforce housing through public policy creation and implementation. (I have provided a breakdown of the market below.) OCHAR supports workforce housing in its many forms as well as strategies to address the "missing middle" in Orange and Chatham counties. In closing, we support the regionalizing of the public water and wastewater system of Pittsboro through the merging of infrastructure with the City of Sanford. This will be a driver of economic development for the community; a method to provide the best possible quality, service and stability to the rate payers; and an affirmative move forward to address the long term and vexing utility issues that have artificially placed limits on the real estate market in and around Pittsboro. Limited infrastructure options create challenges in developing mixed use density as well as a full array of housing options for the community. CHATHAM Listings in May 2023 Sales past 12 months 0-124,999 0% 15 1% 125 ,000-$249. 999 3% 11 76 6% $250,000-374,999 4% 16 130 10% $3 75,000-$499,999 12% 50 249 20% $500,000-$624,999 11% 45 214 17% $625,000-$749,999 12% 48 229 18% $750,000-$874,999 10% 41 122 10% $875,000-$999,9999 15% 61 93 7% $1,000,000-$1,999,999 27% 108 122 10% $2M and up 6% 25 13 1% Total= 406 1263 We stand ready to work collaboratively with Pittsboro and Chatham County on these issues. Best Regards, R chael Elliott, President  June 26, 2023 LABfflR Mayor Cindy CAUCUS -OFTHE- NORTH CAROLINA Town of Pittsboro DEMOCRATIC PARTY 635 East Street Pittsboro, NC 27312 Dear Mayor Perry, I am contacting you as the current President of the Labor Caucus of the NCDP regarding the Town of Pittsboro's move to regionalize the public water and wastewater system of Pittsboro through the merging of infrastructure with the City of Sanford. This effort aligns with the 2020 and 2022 platform of the NCDP and the goals of our current administration in Washington regarding infrastructure. This is from page 13 of the current platform adopted in 2022 by the Resolutions and Platform Committee and State Executive Committee on June 18, 2022 in Durham, NC: INFRASTRUCTURE: We support increased investment in repairing North Carolina's crumbling infrastructure, this should include green infrastructure, such as smart grids. We support infrastructure for climate change and disaster preparedness. We support regional cooperation between counties and municipalities to address important and critical needs for stormwater management, reuse water, potable water, and sanitary sewer. In addition the proposed merger should provide future economic benefits to the region and the state which aligns with this section from page 12: ECONOMIC DEVELOPMENT: We believe North Carolina must continue to attract and foster both new and traditional industries while encouraging growth from within the State. We support restoring film industry incentives. We support attracting new green energy businesses. We support continued efforts to provide a skilled and educated workforce, a solid infrastructure, a competitive business climate, and a quality of life that attracts and creates good new jobs to provide a higher standard of living for all North Carolinians- especially in our low-wealth communities. We believe in a balanced approach to offering incentives to grow local businesses and to attract new business. We believe that economic incentives should result in a real net benefit for North Carolina citizens We believe that the merger will provide more infrastructure options to the market and we want it to align with the following from page 15 of the platform regarding workforce housing: AFFORDABLE AND WORK.FORCE HOUSING: We believe in affordable housing, including the dream of homeowners, for all people of North Carolina, regardless of economic status, race, ethnicity, age, gender, gender identity or expression, sexual orientation, familial status, or veteran status. We support incentives for the construction of apartments and houses that accommodate our diverse population and combat against gentrification. We support housing cooperatives and subsidized housing that allows people.with lower incomes to live side by side with people with higher incomes. We oppose discriminatory practices by income and race, such as red lining. As Democrats, we also believe that counties and municipalities should be granted flexibility by the North Carolina General Assembly to combat these issues. Finally, it is important that public infrastructure projects focus when possible on buying American made products and employing workers in our state and region to the benefit of the people of North Carolina and more specifically the working men and women of Chatham and Lee counties. To that end, livable wages, job safety, and the ability to organize matters to us and as reflected on pages 16 and 17 of the adopted platform: LIVING WAGE: We support a living wage to ensure that all workers (including tipped employees) can adequately provide for their own wellbeing and that of their families. We support a minimum wage of at least $15/hour indexed to inflation. We oppose wage discrimination in all forms including by the payment of subminimum wages. We support legislation outlawing requiring wage history on job applications. JOB SAFETY/ILLNESS AND INJURY: We demand strict enforcement of workplace safety standards and the routine inspection of North Carolina workplaces in order to ensure adequate protection for all workers. We support just compensation and adequate care for the victims of occupational diseases and work-related injuries. We particularly support efforts to reduce and eliminate the risk of long-term injury resulting from repetitive job-related activities. The Department of Labor should be an advocate for legislation that promotes safety in the workplace. Safety is a vital component of a productive, profitable workplace. UNIONS: We support the right of working people to organize and join unions including labor, professional, and civil employees, and to collectively bargain for wages and working conditions without any unfair interference or threats from employers. We support legislation to protect and strengthen the ability of unions to organize, protect their members health and welfare, and bargain on an equal footing with employers. We oppose the so-called "Right to Work " laws intended to weaken unions and deprive working people of their rights. Ultimately, we see this as a method to enhance economic development in the community and the best pathway to provide quality, service and stability to the customers. In closing, the Labor Caucus of the NCDP supports the regionalizing of the public water and wastewater system of Pittsboro through the merging of infrastructure with the City of Sanford. President of the Labor Caucus of the NCDP Comments on utility merger agreeement, 6/26/23 Liz Cul/ington, 390 Rocky Hills Road, Pittsboro I should point out that at the very start Pittsboro officials seemed to believe that the "merged" utility would be jointly operated (no), and that Sanford's lower rates would offset Pittsboro's future expansion costs on top of our already high rates (no.) Meanwhile I have been following this merger issue as best I can but I still see many issues not satisfactorily addressed. I am equally worried about what is not in the agreement as I am about what is. In addition I am disappointed in various ways that official information is clouding the reasons and effects of the merger. If I understand correctly the point is not the extra capacity, which was planned for already, but the Town's lack of huge cash reserves, loans and grants, and current revenue to fund all these capital projects up front. Thus the actual effect of the merger is not so much the extra capacity but getting it more affordably, two different ways. The first is the effect of some partial additional funding for a merged system, but the second more important one would be that Pittsboro would not have to fund these projects up front, instead Sanford would, and Pittsboro would repay over time through rates and connection fees for new development. If Pittsboro cannot get needed wastewater treatment capacity (and some additional water) any other way, the merger agreement still has to address a number of seemingly unresolved issues. Water Quality: All that the agreement commits Sanford to is that water quality would be the same in both systems. That does not guarantee that in future PBO's water, from any source, would be up to the standards that Pittsboro spent so much time and money to achieve. If the agreement ensured Pittsboro's current treatment standards would continue to be maintained in a merged system it would benefit the customers in both towns. Just adding GAC to Sanford's water plant doesn't ensure the quality of that future water source for Pittsboro. It would require setting high removal targets, testing, and GAC replacement based on test results. What little discussion there has been by the Sanford City Council about this merger, their emphasis seems to be on cost-savings, not the health impacts of their water. Once Sanford is in charge of the Town's Haw water treatment plant they would set the water quality standards, and the whatever GAC replacement triggers or simply schedule. Haw River Plant: Several years ago Pittsboro abandoned plans to expand the Haw River WTP from 2MG to 6MGD(?) based on a faulty cost comparison with water from Sanford, assuming only cost of the line and then wholesale purchase, but the secondary argument at that time was that this could allow Pittsboro to send 3 MGD more wastewater to Sanford without getting an lnterbasin Transfer Permit (see below) and additional water more cheaply. It most definitely wasn't to replace the current capacity of the Haw WTP/ I don't believe that 3 MGD from Sanford would be enough. C.Park's Small Area Plan for its "North Village" states that its total water needs would be 2.04 MGD, which would be 1.04 more than the Haw Plant could supply on top of only current Town needs. Sanford water alone could not be adequate for current Town's needs and C.Park's "North Village" (with no additional Town growth and nothing for the "South Village)." It doesn't seem like Sanford grasps Pittsboro's needs, plans, or agreements, but they sure have a thing against the Haw River plant for unknown reasons. Besides the fact that it seems like Sanford wants Pittsboro to be solely dependent on Sanford located water and wastewater capacity, the prospect of them selling the Haw Plant (and 1 getting any portion of the proceeds) is mind-boggling, and has not been explained. Do they have a plan to sell the plant to someone like Aqua (or CPI?) to serve whom? Part of C.Park's North Village? As stated before, this would mean having to completely rejigger Pittsboro water distribution system and the agreement doesn 't say who has to pay for that very significant cost. I might add that that cost could far exceed the incremental advantage of "lower operating costs" at Sanford's expanded water plant. Haw Plant UV-AOP: Earlier Pittsboro got a grant to install UV-AOP at the Haw WTP but then voted to switch those funds (if DWI would approve) to partially fund the water line from Sanford. So now some of us have lots of questions. 1) Did DWI in fact approve that? 2) What is the plan regarding adding UV-AOP treatment to the Haw Plant? 3) Since the merger seems to mean Pittsboro not having to pay for that waterline upfront, the funds should be spent now as intended. If necessary, this should be clarified as allowed under this agreement, particularly if there are contracting or other delays, with completion by Sanford if for some reason it takes more than a year! Section 5.05 states that any "third-party funding" for that plant could be switched to the other Pittsboro-Sanford connection projects only if it is closed down, but if it sold, only 87 .5% of the proceeds would. be used that way. This isn't even clear as to what "third-party funding" (that has not already been spent) this could mean. One interpretation is that it refers to the DWI grant and that having to be used for UV-AOP only as long as the plant is operational. Another possibility is that it refers to additional litigation proceeds, or additional grants. This needs to be clarified. Bottom line: UV-AOP needs to be installed at the Haw Plant. Pittsboro needs that capacity, and, in the past, water demand has been low enough that operators could avoid 1,4 dioxane in the intake water. This is because of advance notification, but also because until now demand did not require the plant to continuously withdraw and treat water. As the Town grows, with C.Park able to expand before all this new wastewater infrastructure is in place, that may not always be the case. Jordan Lake Allocation and Intake: The agreement doesn't specify that the entire allocation (or even some part of it) will be used to supply Pittsboro's service area rather than that of Sanford. From their past minutes (12/13/22) it appears that this issue was not settled early, and in addition, that a big selling point for Sanford for this merger was getting access to a secondary water source. Somewhat puzzling were statements by Freese and Nichols to Sanford (12/13/22) that in an emergency they could reverse flow in the Sanford > PBO waterline. Besides the logistics of how that could ever be feasible, are two big questions. 1) Pittsboro would presumably be reliant on that water from Sanford, even if not all its Jordan Lake allocation, right away. 2) It would take the entire Jordan Lake allocation to meet Sanford's own needs with none for its partners in the expanded plant. So while I understand that interconnectivity of water systems is always desirable, the fact that Pittsboro's continued entitlement to that allocation is not spelled out in the agreement makes me fear that Sanford will simple assume it all under the transfer of assets, and Pittsboro in future would only get whatever part of it that Sanford allows, and/or Pittsboro can pay for in future. This should have been clarified and settled early on. Rates and Utility Fees: There are all kinds of official misinformation out there about the effect of the merger on rates. Lower current Sanford rates are immaterial in the immediate future since Pittsboro's rates and fees will have to pay for all these high cost capital improvements, and, according to Freese and Nichols, at an accelerated rate. Their earlier statement that rate 2 increases (no decreases!) could be levelized at 2% a year was based on the Town adopting the maximum recommended System Development Fee. However since the approved amount was more like half, and are incorporated, initially, in the agreement, even levelized rates would be higher than 2%, or SDF fees will have to be much increased, very soon. Earlier I raised the issue of whether Sanford's customer policies were better or worse than Pittsboro and was told by the manager that their reconnection fee was a fraction of Pittsboro's, only $25. However, the agreement states in Section 5.02 that "except for system development fees, the rates, charges, fees, deposit rates, penalties shall be no higher than those set by the Town in its FY2024 Budget Ordinance." Thus there seems no guarantee that they will be significantly lower, and this isn't limited to any time period. As for new development connections and related System Development Fees (SDF) it appears that Sanford will be able to raise those as needed, but it is not clear when they could start to do that. In addition while Section 5.03 says that the Town can pay the difference (for rates and/ or SDF fees) it appears that for SDF fees this might for all, and not the ability to separately subsidize SDF fees for certain projects like affordable housing. There have been questions raised about some aspects of these fees as they apply to connections other than single-meter residential units but there is no provision for either staff or the Board to participate in whatever method Sanford uses to calculate SDF fees, and which they might use in future. Rate Parity: This Section (5.04) is very worrisome. Under what possible scenario could the Pittsboro service area rely solely on piped water from Sanford? All previous Pittsboro planning has seemed to rely on all three sources, Haw, Sanford, and Jordan Lake (which is not mentioned in this section). Nowhere in the Phase I or 2 capital projects list is the additional cost of completely refiguring Pittsboro's water distribution system. Currently everything is designed to originate from the Haw Plant. There could also be gravity issues mean that even if water from Sanford were sufficient the entire system would mean water having to go uphill all the way. More importantly, in every other context it is lifecycle costs that matter, not just day to day operating costs. Both the Haw plant and its first 1 MGD GAC system are fully paid for. Sanford's expanded water treatment is not, and that construction cost and the cost of constructing and maintaining the water line from Sanford have to be included as part of the cost of that water, compared to the cost of water from the Haw Plant if Sanford is allowed in any way to use cost factors in considering whether to mothball or sell the Haw WTP. Sanford Water Plant Expansion: It appears that Sanford got various sources of funding for their water plant expansion project in which Pittsboro is still to purchase an ownership share (3 MGD) through construction cost, along with other partners. Sanford got a state allocation of $17 million from the legislature, and a low interest loan of $85 million with $9.6 million in loan forgiveness (Sanford minutes 4/21/23). So there are two questions. The cost of the total plant expansion is cited as $257 million. Does Sanford plan to allocate these freebies and any additional merger funding equally across all partners or to allocate as much as they can towards Sanford's share of additional capacity-to keep costs low for their current and future customers? This will still very much matter in a merged system since Pittsboro customers and new development will have to pay for the Town's share in that expanded plant. 3 Expansion of Sanford Wastewater Plant: Years ago when the Pittsboro Board was persuaded to get 3 MGD water piped up from Sanford, in order to send an extra 3 MGD of wastewater south for treatment, it seemed to me that Pittsboro officials assumed that that additional wastewater capacity would be available, and on the same terms as the first 2 MGD. Now Sanford and this agreement require Pittsboro ratepayers to fund an equivalent share of an expanded WWTP or even a replacement larger plant. This unknown cost is one of the Phase II capital improvements. But it also yet another example of how Pittsboro has been gradually inching to this crisis point based on poor assumptions, and such things as the failure of Freese and Nichols to report back immediately a few years ago that Sanford was no longer interested in selling Pittsboro water but wanting its partners to pay for their share in the plant in advance. (I don't believe that they have conveyed Sanford's more recent interest in Pittsboro's Jordan Lake allocation, the hypothetical use of this F&N seem to have promoted to Sanford.) CPl's sewer plant: Since Pittsboro doesn't own that plant, it would seem that it would not transfer ownership to Sanford under this merger, unless Sanford has arranged separately to buy it, which they don't apparently have to do for Pittsboro's other facilities. However, there has to date been no apparent written commitment by CPI to expand that plant from 250,000 GPO to 1 million GPO, to utilize the Town's NPDES permit. CPl's Small Area Plan for its "North Village" area states that it would need 1. 7 MGD of wastewater treatment. Between their needs and current town needs, 250,000 plus 2 MGD Sanford Force Main is simply not enough. Even with expansion of CPl's plant, the much larger "South Village" area is going to need more and could use much of that additional 3 MGD wastewater capacity in Sanford in future. A firm commitment from CPI to expand their plant is essential before this agreement is finalized. Sanford would have no interest in expanding that plant because they would rather get all our wastewater money. (And apparently have zero concern over which type of wastewater treatment plant might have a "cleaner" discharge.) IBT: In the past this option was dismissed as some impossible barrier to sending more than 2 MGD wastewater to Sanford, even though apparently neither officials nor staff knew the first thing about it and never bothered to learn. This has frankly been driving me nuts for years. Firstly, DEQ has a handy guide to make it easy. Secondly the cost is likely to be very low for this particular situation, and a tiny fraction of the ever-rising cost that Pittsboro proceeded to incur as an alternative. Thirdly, any "transfer" would be between sub-basins of the same main (Cape Fear) basin, not between say the Cape Fear and the Neuse. Fourthly, the costs and complications are directly related to who would be affected by any "missing" water, and hearings in that location. There is no water intake that would be or would have been affected as water would be withdrawn from Haw and/or Jordan Lake, wastewater would go to Sanford Plant, and the balance would be made up before it reached the Sanford WTP intake (or anyone else downstream). Sanford's lower rates may not be a plus: Throughout Sanford discussions per their minutes, and now this agreement, the emphasis has been that this merger will not affect Sanford's low rates, and that "economies of scale" will benefit them also. While Pittsboro's specific immediate new project costs would appear to be paid off over time through only Pittsboro area rates and new development (System Development Fees), I fear that Sanford's emphasis on "economies of scale" and low rates for Sanford will mean less emphasis going forward on those things that could affect the combined system, and the operating costs of Pittsboro's system, in addition to water quality. Sanford as sole source and planner: Several sections of the agreement appear to give Sanford total and exclusive control over water and sewer capacity planning, for any new facilities, beyond or besides those listed, where, which to expand, which to shut down. While it 4 requires Sanford to consult with Pittsboro "at least" once a year (Section 5.03), this appears to be limited to rates. Pittsboro's Board needs to be able to have more frequent consultations as needed, and to have more input into future capacity planning. Standards for new utility infrastructure: Pittsboro staff put in extensive work to develop engineering standards for new utility and other infrastructure. The agreement needs to require an initial period of collaboration between Pittsboro and Sanford staff to compare standards and to amend Sanford's standards if they appear deficient in any area. Following "transfer" Pittsboro staff (and officials) need to retain the right to be consulted about and participate in future revision of those standards and to initiate changes as future problems might arise under Sanford's control regime. (This amendment should be part of Section 2.01 .) PFAS litigation proceeds: Why should Sanford get any portion of any PFAS settlement? (Section 3.07) Wasn't this supposed to repay Pittsboro for the expense of installing the GAC treatment system? I don't know if this was paid for out of general funds, some capital improvement fund, or the enterprise fund. Regardless of how it was paid for it appears that Sanford gets to own the Haw WTP with GAC system. (I still don't understand how they get all this stuff for free.) Meanwhile here's an analogy, I am gifting or selling a car that had to have its engine replaced and per a legal settlement the manufacturer is or will be required to pay me all or part of that cost. The money may arrive before or after the ownership of the car is transferred . Meanwhile, the new owner wants not only the new engine which I paid for but also the money from the manufacturer to (partially) repay me. That is clearly nonsense. More directly related, Sanford may have PFAS in its intake and finished water and to be eventually going to install GAC, but they didn't participate in the litigation, so tough luck. Enterprise Fund (?) : I believe that this is what the utilities reserve fund is called, however, I thought I heard in the last audit that this had a "healthy balance" and I don't believe this entire fund should be transferred, certainly not without specific agreement as to how it will be used, for the Pittsboro service area and facilities only (or new ones). If there is a minimum amount that the Town is required to have in that fund, Sanford should get either that or something above it. Otherwise, wouldn't we be giving Sanford a reserve that was the result of Pittsboro 's acknowledged higher rates? And without dedicating it towards Pittsboro's service area. Transfer of assets: Many of us are stunned that Pittsboro would be giving Sanford our utility assets for free , and if they are being valued, for what purpose? Is the value to be deducted from future capital costs for Pittsboro ratepayers? Termination: Down in the legalese in the final section we find that the agreement is either permanent or 99 years but that (per Section 7.07) "All property, real or personal, shall remain with the City [of Sanford] upon termination or expiration of this Agreement." I would want the agreement to have to be renegotiated at intervals, even if those are long, like 15 or 20 years, in order that mistakes and problems can be sorted out. Meanwhile if no ownership reverts, wouldn't it mean that Sanford would continue to own and operate but would not be bound by the terms of the agreement? Which could be even worse for Pittsboro compared to Sanford. What is disturbing is that Pittsboro would have no right to terminate this perpetual agreement altogether and could only insist under Section 7.01 that some agreed-upon performance be met. All the more reason to ensure that these outstanding issues are addressed in the agreement. 5