MINUTES OF THE REGULAR SCHEDULED MEETING
OF THE EMERALD ISLE BOARD OF COMMISSIONERS
TUESDAY, MAY 13, 2003 – 7:00 P.M. – TOWN HALL

Present for the meeting was Mayor Schools, Commissioners Marks, Eckhardt, Farmer, McElraft and Messer. Others present were Town Attorney Derek Taylor, Town Manager Frank Rush, Assistant Town Manager/ Finance Officer Georgia Overman, Town Clerk Carolyn Custy, Building Inspections Planner Carol Angus and the newly appointed Town Clerk Rhonda Ferebee .

After roll call all who were present recited the Pledge of Allegiance.

ADOPTION OF AGENDA

Mayor Schools asked to add Board of Adjustment Appointments as Number 12 on the Agenda because some of the terms of members expire in the later part of May.

Commissioner Eckhardt made a motion to accept the agenda with the addition of Board of Adjustment Appointments. The board voted unanimously, 5-0. Motion carried.

PUBLIC ANNOUNCEMENTS

Mayor Schools announced that Doug Fleming, a member of the Fire Department, has the good news that his daughter received a $6,000 State Firemen’s Association Scholarship. Charles Culbertson, also of the Fire Department, also has good news that his son received a $12,000 scholarship from the State EMS Association. The Reforestation Committee will hold a revegetation workshop on June 13 similar to the one they had last year. There will be a Blood Drive on June 6^th at the Parks and Recreation Center.

Mr. Rush welcomed Rhonda Ferebee, the newly appointed Town Clerk to the meeting. Mrs. Ferebee was promoted from the Planning and Inspections department and will replace Carolyn Custy upon her retirement on July 2, 2003.

CONSENT AGENDA

a. Minutes of Regular Meeting – April 8, 2003

b. Minutes of Special Meeting – March 27, 2003

c. Minutes of Special Joint Meeting with Planning

Board – March 27, 2003

d. Resolution Authorizing Contract Award for Dune

Crossover Reconstruction

e. Resolution Authorizing Application for CAMA Public

Access Grant Funding for Improvements at Western Ocean

Regional Access and Station Drive

f. Resolution Authorizing Waiver of Dune Crossover

Construction Permit Fees

g. Resolution Authorizing Application for USFA Fire

Grant Funding for New Fire Engine

h. Resolution Authorizing Agreement with NCDOT for Transportation

Enhancement Funding for NC 58 Bicycle Path

i. Capital Project Ordinance - NC 58 Bicycle Path

Commissioner Marks made a motion for approval of the Consent Agenda.

Commissioner Farmer asked to talk about the parking area at the Pointe. Mr. Rush divulged that there is a vacant lot available on the corner of Station Drive. It is a single-family lot that will not perk. The lot is about $30,000. The town is intending to put in for a CAMA Grant to buy that lot and create parking spaces there somewhere in the neighborhood of 10 to 15 parking spaces. It is a couple of blocks back from the Ocean but in the town’s opinion, it represents the most affordable solution to provide parking in that area. The town does have the matching funds in the amount of $9,375.

Commissioner Farmer noted this is probably one of the things she hears the most about. There is really no parking at the Pointe at all and she feels it would be great if the town could provide parking there.

Mr. Rush also noted that the town would make the parking area very attractive in the neighborhood. If anyone down at the Pointe is concerned about the way it would look, the town will make is look as nice as it can so more people can enjoy the Pointe area. It is a long walk since it is about 1800 feet from the Pointe.

Commissioner McElraft asked if Mr. Rush has approached the owner to see if he would donate that lot to the town since it would not perk and is of no value to him. Mr. Rush said he has had some conversations with the owner of the property and none of the options were feasible.

Commissioner Messer said the people who own the lot also own the house next door so the lot does have some value as an addition to the property the house is on.

Commissioner Eckhardt made note there was a vacant lot just to the West of that one. Commissioner Messer said there was a vacant one just to the North of it on the opposite corner.

Commissioner Eckhardt asked if where all the trees are, if that were another lot? He thinks the house seems to be on a third lot.

Mr. Rush said there is a house South to this vacant lot. Commissioner Eckhardt noted there is a empty lot across the street and a empty lot to the North and the house to the South and it looks to him like there is an empty lot to the West.

Commissioner Messer interjected he thinks the hedgerow is there as part of that lot and the next thing is the house. It is a pretty good size corner lot.

Mr. Rush said the town would want to keep that as an attractive site in the neighborhood.

Mayor Schools called for a vote in the adoption of Consent Agenda. The board voted unanimously, 5-0, for approval. Motion carried.

PUBLIC COMMENT

None.

PRESENTATION OF HWY 58 COMMITTEE FINAL REPORT

Mr. Ed Johnson and Mark Brennesholtz gave the presentation of the Highway 58 Committee Final Report. Members of this committee were Mark Brennesholtz, Ed Dowling, Emily Farmer, Brad Fischer, Fred Fremaux, Ed Grant, Nita Hedreen, Jerry Huml, Ed Johnson, Doje Marks, Jim Ramsey, Pat Patteson, Ronnie Watson and Nancy Williamson.

The Committee was appointed by the Board of Commissioners in April 2002 and first met in May 2002. The objective was to develop a vision for the Emerald Drive Corridor. Three subcommittees were selected. They were Streetscape, Pedestrian and Bike Safety and Legislative.

The Town of Emerald Isle is an island community bisected by NC 58. The Town resides along 8 miles of 58 and is referred to as the Hwy 58 corridor, or Emerald Drive.

The Committee Scope contains the western section of NC 58, which runs from the Langston Bridge to Town Hall and is the primary business district. Within this district Reed Drive and Crew Drive parallel Emerald Drive. Future consideration should be given to expanding the scope east of Town Hall and west to Emerald Woods Park on Coast Guard Road.

The corridor concerns were appearance, pedestrian and bike safety, vehicle traffic, access to businesses and parking. The vision of the committee was a long-term focus of Emerald Isle and is to enhance the natural beauty of this family beach environment by providing a venue for safety pedestrian and bicycle recreational activity. This would be accomplished by the creation of 7 miles of landscaped paths from the park on Coast Guard Road to Town Hall. Crosswalks would be provided for safe, continuous access across 58 to commercial areas for guests and residents. In addition, amenities and landscaping will improve the appeal of the commercial areas while vehicle parking will be enhanced. In addition to appearance of the roadways and sidewalks, commercial architecture will be attractive and sites will be developed with adequate vehicle and pedestrian access, vegetated setbacks, and controlled lighting.

Signalized intersections at present are Coast Guard Road, Mangrove, Loon and Bogue Inlet drives. Each poses its own safety challenges to pedestrians and cyclists. The committee was created in part to address these safety concerns, as well as appearance and traffic issue.

Plantings will be placed along roadsides, sidewalks and bike paths to enhance the natural beauty of the island. Several landscape plants named to be used were Indian Hawthorn, Nerium Oleander, Oleander, Carolina Cherry Laurel, and wax myrtle. Two native trees that grow in beach areas are Holly, Live Oak in addition to others.

A sidewalk project will be funded for approximately 1580 feet of sidewalk. It will connect the north side of Emerald Drive from Live Oak Street to the signalized Bogue Inlet Drive intersection. It is also recommended that a pedestrian crosswalk across Emerald Drive at this signal light be installed.

The report also touched on architectural appearance, crosswalks and amenities such as seats and lampposts along the paths. Site development touched on separation between buildings, require sidewalks on commercial development sites, provide loading zones, require vegetative buffering in front and between buildings, restrict curb cuts and driveway width and restrict new subdivision of commercial property on Hwy 58 to a minimum of 150 feet wide to provide for quality development.

Benefits achieved from these recommendations are improved appearance, better opportunities for recreational shopping, healthful exercise and safer crossings. Funding by State and Federal grants and matching funds, private grants, private donations, and the inclusion of Hwy 58 Corridor projects in Town’s budgeted capital improvement program.

Mayor Schools thanked the Highway 58 Committee members for the good job they have done on this project and the Town Board will hold a public hearing at the June 10^th meeting on these recommendations.

PRESENTATION OF THE FY 2003-2004 RECOMMENDED BUDGET

Mr. Rush presented the Board with the Budget Message and the proposed Budget for Fy 2003-2004. The budget does not include a tax rate for this year. The budget message follows and is self explanatory:

May 13, 2003

Dear Honorable Mayor Schools and Commissioners:

I am pleased to submit the FY 2003-2004 Recommended Budget for your review and consideration. The total Recommended Budget across all funds is $8,965,887, including the special district tax collections and debt service payments associated with the Emerald Isle Beach Nourishment Project.

The largest portion of the total budget is the General Fund. The total General Fund budget is $6,332,701; a $1,119,876, or 21.48% increase in expenditures over the FY 02-03 original budget. Although the total budget is significantly higher than FY 02-

03, there are several expensive capital items in the budget that cause the total budget to reflect a large increase. As you know, the FY 02-03 budget included very little capital spending in order to achieve a minimal tax rate increase. This Recommended Budget places a priority on the restoration of capital outlay funding for necessary replacement items. As you review the budget, you will find that aside from capital outlay items, there are only minimal increases in other areas of the budget. I am pleased to note that the FY 03-04 Recommended Budget is balanced with a General Fund tax rate of 18.5 cents per $100 of assessed value, which is identical to the FY 02-03 rate. At your direction, I made it a priority to develop a Recommended Budget with no tax rate increase, and the staff and I have worked diligently to limit expenditures to the maximum extent practical.

As you know, the Town also levies special district taxes to finance the debt service payments on the bonds used to finance the Emerald Isle Beach Nourishment Project. FY 02-03 was the first of 9 years that these taxes will be levied, and I am also pleased to note that the special district tax rates remain unchanged. Property owners in the Primary Benefit District will continue to pay an additional 48-cent tax in FY 03-04, while those in the Secondary Benefit District will pay an additional 3 cents.

The only fee increase impacting all Town property owners is a $5 increase in the annual solid waste fee. This translates to a monthly increase of $0.42. This increase will raise the fee to $135 annually, or $11.25 per month. This fee increase was preliminarily authorized by the Board of Commissioners in conjunction with the recent revisions to the Towns’ solid waste ordinance.

For the first time, the Recommended Budget also includes a detailed Capital Replacement / Improvement Program to effectively plan for future capital needs that carry a significant price tag. The Board should note that the Capital Replacement / Improvement Program included in this document reflects projects already initiated and my personal recommendations for major projects over the next five years. While I believe I have included many projects aimed at addressing the Board’s priorities, the Board should thoroughly review and amend this plan before adoption so that it adequately reflects your priorities. The Board should also solicit public input in order to create a more meaningful plan that reflects the collective goals of the community. I am pleased to note that the proposed Capital Replacement / Improvement Plan is not expected to result in a significant additional tax burden on our property owners.

As noted earlier, I am extremely pleased to present this Recommended Budget to you with no tax rate increase. I am also pleased that this Recommended Budget enables the Town to remain current with capital item replacement and initiate additional needed projects that will enhance the efficiency and effectiveness of Town services and enhance the quality of life for our residents, property owners, and numerous visitors. As you will read in a moment, the presentation of a Recommended Budget with no tax rate increase would not be possible without anticipated additional sales tax revenues associated with the beach nourishment special tax districts. The following pages include a detailed discussion about the Recommended Budget and the many issues impacting the budget.

FY 03-04 BUDGET GOALS

The Board of Commissioners held a special planning workshop in February to discuss its priorities for the coming year. Following that meeting, I compiled the following list of the Board’s expressed goals heading into the FY 03-04 budget process:

1. Present a Recommended Budget with no tax rate increase,

2. Restore funding for necessary replacement capital items to avoid equipment failures and frequent large capital expenditures in future budget years,

3. Maintain, and if possible, increase the Town’s undesignated fund balance levels,

4. Move forward with the purchase of a new Fire pumper truck to replace an existing mini-pumper,

5. Move forward with efforts to improve yard waste collection services,

6. Initiate necessary repairs to the Community Center, and

7. Initiate efforts to insure that Town employees are compensated fairly and competitively.

The Board has expressed numerous other goals at the workshop and over the past year, however, I interpreted the seven goals identified above as the Board’s primary budget concerns. I am pleased to note that the Recommended Budget should enable the Town to accomplish all seven of these goals in FY 03-04.

GENERAL FUND

As noted in the opening paragraphs, the total recommended General Fund budget is approximately $1.1 million more than the FY 02-03 adopted budget. This increase is somewhat deceiving due to the nature of the items causing the increase. Approximately $940,000 of this increase is associated with large capital outlay items. The remaining $160,000 increase is divided between salary increases ($105,000), 1.25 new positions ($21,000), and miscellaneous operating expenditure increases ($34,000). Aside from capital outlay items, most department budgets are only slightly higher than FY 02-03.

The Town’s revenue situation is surprisingly positive this year, due primarily to the additional sales tax collections anticipated as a result of the beach nourishment districts and the additional half-cent sales tax authorized in December 2002. Overall, other General Fund revenues are expected to remain relatively stable with modest growth, with the exception of interest earnings, which continue to be on the decline for nearly all governments, businesses, and individuals. One negative impact on the revenue side is the need to replace $163,000 of reserve funds (from the old Beach Nourishment Fund and old Storm Water Fund) used to balance the FY 02-03 budget.

REVENUE ISSUES

Additional Sales Tax Anticipated

Actual sales tax collections for FY 01-02 were approximately $717,000. The amount of sales tax that the Town received that year was actually a decline from the prior years after reaching nearly $800,000 in FY 99-00. The primary reason for this slight decline is the large property tax rate increase enacted by the County in FY 99-00, and other relatively larger property tax rate increases enacted by some Carteret County municipalities and fire and rescue districts. Because of the way the sales tax distribution formula works, a larger “slice” of the sales tax “pie” is allocated to those local governments that levy a larger amount of property taxes.

With the creation of the new beach nourishment special districts in FY 02-03, the Town began levying an additional $1.95 million of property tax (nearly double our previous levy) that will cause the Town to receive a larger “slice” of the sales tax “pie”. Because there is a 9-month lag in the sales tax distribution formula, the Town expects to realize this impact beginning with the 4^th quarter sales tax distribution for FY 02-03. (The FY 02-03 budget anticipated an additional $125,000 of sales tax revenue as a result of this.) FY 03-04 is the first year that the Town will realize these additional sales tax revenues for an entire year, and, as such, an additional $375,000 (beyond the $125,000 in FY 02-03) is projected to balance the FY 02-03 General Fund budget. The total annual increase resulting from this phenomena is approximately $500,000, or the equivalent of approximately 3.6 cents on the Town’s tax rate.

The second largest positive impact on the Town’s revenue picture is also associated with the sales tax. In December 2001, the County began levying an additional half-cent sales tax, bringing the total local sales tax to 2.5 cents per dollar. This additional half-cent sales tax was authorized to replace reimbursement revenues previously distributed by the State to counties, cities, and towns. While most local governments broke even, and some experienced a net loss, Emerald Isle is one community that emerged as a big winner in this trade-off. The Town lost approximately $75,000 in reimbursement revenue, but will realize approximately an additional $175,000 in sales tax revenue from the additional half-cent. The net increase is approximately $100,000, however, because the Town did not budget any of the reimbursement revenue last year the actual budget impact is approximately $175,000.

Need to Replace Reserve Funds Used to Balance FY 02-03 Budget

In an effort to reduce the FY 02-03 property tax rate down to the 18.5 cent rate adopted, the Board utilized approximately $163,000 of reserve funds in the old

Beach Nourishment Fund and $38,000 of reserve funds in the old Storm Water Fund to balance the FY 02-03 budget. These revenues effectively helped to keep our property tax rate down for a one-year period until the additional sales tax revenues could be realized and used to stabilize the General Fund budget and tax rate.

Because these revenues were “one-time” revenues used to fund recurring expenditures, the FY 03-04 budget must address this revenue reduction. For simplicity, it is reasonable to view the additional half-cent sales tax as essentially offsetting this revenue loss.

Fund Balance

As you know, it is very important to maintain a healthy fund balance to deal with emergency situations, maximize interest earnings, and maintain our strong bond rating, which enables us to secure a lower interest rate on our debt issues. The Town ended FY 01-02 with an undesignated General Fund balance of approximately $1.38 million, which was a slight increase over FY 00-01. I am projecting that the Town will finish FY 02-03 with an undesignated fund balance level of approximately $1.44 million, due primarily to higher than expected revenue collections overall.

I have made it a priority to avoid the use of General Fund balance to fund recurring expenditures. The FY 03-04 Recommended Budget does rely on a total of $50,000 from General Fund balance specifically for the repair and renovation of the Community Center exterior façade. As this is a one-time capital project, and because the Town expects to add approximately $62,000 to the undesignated fund balance in FY 02-03, I am recommending the use of $50,000 for this project. I estimate that the use of this fund balance will still leave the Town with a total undesignated General Fund balance of approximately $1.39 million.

State Budget Actions Appear to Have No Major Impact; Further Debate on State Budget Could Still Impact Town Budget

The FY 03-04 State budgets proposed by Governor Easley, and those approved by the NC House and NC Senate do not include any budgetary decisions that will have a significant negative impact on the Town’s FY 03-04 budget. However, the recent reports of poor State tax collections and a widening State budget gap could result in changes that negatively impact the Town’s budget. We all must remain aware of and actively protest any attempts at the State level to balance their budget on the backs of local governments.

$5 Increase in Annual Solid Waste Fee

The FY 03-04 Recommended Budget includes a $5 increase in the Town’s annual solid waste fee. This increase would raise the Town’s annual fee to $135.

This increase is expected to generate an additional $30,000 to fund a new employee in the Public Works Department to enforce the solid waste ordinance, provide free roll-back of containers for second homeowners, and assist Public Works crews with other duties. The Town’s annual solid waste fee equates to $11.25 per month for all solid waste services, including trash collection, recycling collection, beach strand collection, yard debris service, enforcement, and roll-back. This monthly fee is still very low compared to other communities.

One-Time Collection of Solid Waste Container Fees

As you know, the Town is distributing standard 90-gallon and 65-gallon roll-out containers to all property owners who do not currently own the appropriate number of containers. The Town will then bill these property owners $40 per container on their FY 03-04 annual solid waste bill. The Recommended Budget reflects anticipated revenues of approximately $168,000 to cover the Town’s cost of providing the new containers. This amount is simply a “pass-through”, however, it does contribute to the inflated bottom-line for the FY 03-04 budget.

Installment Financing Proceeds

The Recommended Budget relies on a total of $435,000 of installment financing proceeds to meet two large capital needs. First, a total of $350,000 is anticipated to fund the purchase of a new Fire pumper truck to replace an existing, undersized 20-year old mini-pumper truck. The Recommended Budget assumes that this new debt will be retired over a 5-year period, and sufficient funds for the first year’s debt service payment are included.

The second item to be financed is the purchase of a new automated brush truck. The estimated cost of this heavy equipment is $85,000, and this debt would also be retired over a 5-year period. The additional debt service payments associated with this truck are less than the anticipated savings that the Town will enjoy by providing this service with in-house personnel.

The FY 03-04 Recommended Budget includes several other capital outlay items, including replacement Police vehicles, and none of these will be financed with installment financing agreements. All vehicle purchases will be made with pay-as-you go general revenue sources. As noted in the attached Capital Replacement / Improvement Program, the Town is scheduled to purchase a relatively constant dollar amount of vehicles each year, and should budget a relatively constant amount from general revenue sources each year.

Other Revenues

The majority of the remaining General Fund revenue sources are projected to remain fairly constant in FY 03-04. Modest growth is projected for most revenue sources. There are, however, a few notable items to point out to the Board. First, the Town’s annual Powell Bill distribution continues to decline due to reductions in the Highway Trust Fund at the State level. The redirection of Highway Trust Funds to other programs results in less funds to distribute to the State’s municipalities. Emerald Isle is expecting approximately $148,000 in FY 03-04, down from approximately $171,000 in FY 02-03. As you know, the Powell Bill is our sole source of funding for the annual resurfacing of our streets, and we strive to resurface 1/20^th of all Town streets annually to maintain a 20-year resurfacing cycle. The FY 03-04 Recommended Budget allocates $138,000 of the Powell Bill revenues specifically for resurfacing, and this amount may or may not be sufficient to resurface 1/20^th of our streets next year. If additional funds are necessary to meet our annual resurfacing goal, I may recommend the use of additional Powell Bill reserves when the contract is awarded next spring. I project that the Town will have a balance of approximately $69,000 in the Powell Bill Reserve at June 30, 2003.

By the time FY 02-03 is complete, it will be a record year for building permit fees. I am conservatively projecting a total of $194,000 for the entire year. (As of May 7, we have already collected $180,000.) In light of an expected drop-off in new construction, and offset by proposed slight increases in building permit fees, the FY 03-04 Recommended Budget anticipates a total of $150,000 in building permit fees.

For budgeting purposes, the Town’s total tax base as reported by the Carteret County Tax Office, and estimated by the Town (for motor vehicles and utilities) is $1,393,416,594. The growth in the Town’s tax base over the past year will result in approximately an additional $30,000 of property tax revenue compared with the FY 02-03 adopted budget amount, which was slightly ambitious.

EXPENDITURE ISSUES

Funding Included for New Fire Pumper Truck

The Recommended Budget for the Fire Department includes $350,000 to purchase a new full-size pumper truck to replace the existing mini-pumper. The existing mini-pumper is now 20 years old and will also not be sufficient to meet ISO rating criteria during our next ISO rating. The new pumper truck will augment two existing full-size pumper trucks and the ladder truck, giving the Town a total of four pieces of large fire apparatus. As noted in the attached Capital Replacement / Improvement Program, we are expecting at least a 20 year life for each of the four pieces of large apparatus. As noted above, the new pumper truck would be financed for a period of 5 years. The Recommended Budget (in the Debt Service Fund) includes a total of $79,000 for the first year’s debt service payment (or to be used as a down-payment). As noted, this debt should be retired in FY 08-09, when we expect to replace another Fire pumper truck. This truck would then be financed for a 5-year period until the next truck is scheduled for replacement. This approach will enable the Town to keep its annual expenditures relatively constant.

As you know, this purchase was originally scheduled for FY 02-03, however, due to budget constraints, it was delayed until this fiscal year.

Capital Outlay Funding Increased

The FY 02-03 adopted budget only included approximately $50,000 for capital items, and did not include funding for the replacement of any Town vehicles. This approach was prudent in a tight budget year, however, continued deferral of capital needs will likely result in higher maintenance costs, more frequent equipment failures (and resulting disruptions in quality services), and frequent large expenditures all at once in future budgets.

The FY 03-04 Recommended Budget includes funding for the replacement of 3 Police patrol cars, a replacement vehicle for the Fire Chief, and a replacement vehicle for the Planning and Inspections Department. The 3 Police patrol cars have over 80,000, 107,000, and 110,000 miles on them, and the Fire Chief’s vehicle is now over 7 years old. The Planning and Inspections Department has been using a surplus Public Works truck for the past year, however, this vehicle continues to be a problem. The Recommended Budget includes $11,000 for the purchase of a small pickup truck (Ford Ranger, Chevy S-10, or similar) to replace this truck.

Other smaller capital items included in the Recommended Budget include a new radio system to improve emergency communications on the far eastern end of Town, repairs to the Public Works building, replacement of a mower in the Parks Maintenance Division, the replacement of playground equipment at Ocean Oaks Park, and the construction of one pedestrian bridge over the canal at either Loblolly, Live Oak, or Holly Streets.

Big Improvements Planned for Yard Waste Services

A big source of complaints at Town Hall stem from yard waste services. As you know, the Town offers twice per month yard waste collection for our property owners who sign up in advance. There are many times when the workload exceeds the time allotted (two days) by Waste Industries, which results in yard waste not being picked

up in a timely manner. Depending on when the property owner calls, it may take nearly one month to get the yard waste collected. Many people are not satisfied with this delayed response.

Waste Industries also has strict guidelines about the preparation of the yard debris, and there are many instances when yard debris is not prepared properly, and it is not collected.

Waste Industries collects yard waste manually, which takes considerably longer per stop than other methods. Town staff have researched other options for yard waste services, and we are recommending that the Town remove this service from its contract with Waste Industries and provide this service with in-house personnel. In order to accomplish this, the Recommended Budget includes $85,000 for the purchase of an automated brush truck. This new truck would be financed over a 5-year period, and the annual debt service payment is estimated at approximately $19,000 per year. The new truck requires only one man to operate, as it uses a long mechanical arm to pick up yard waste of any size (i.e., it will not need to be cut into small pieces as is now required). According to other towns, one man using the truck can complete up to 200 stops per day. The current system used by Waste Industries services between 100 and 200 stops each month, and utilizes more employees. The Town pays Waste Industries approximately $27,000 annually for yard waste services.

These savings would be redirected toward the debt service payments on the new brush truck.

Town staff believe that yard waste service can be provided in-house with existing personnel, so there are no additional personnel costs associated with this proposal. Also, the Town pays approximately $5,000 annually in tipping fees for the collected yard waste. Town staff have made arrangements with a local contractor in Cape Carteret to accept the material free of charge, resulting in additional savings. In total, this approach will enable the Town to provide more frequent, more convenient yard waste services to our citizens for less money. The new automated brush truck will also be helpful for hurricane recovery efforts if necessary.

The Board should note that the Town is currently under contract with Waste Industries for yard waste services until June 30, 2006. In exchange for eliminating this service for the contract, Waste Industries is requesting a one-year contract extension on all other solid waste services until June 30, 2007. While I do not favor any additional contract extensions, I am comfortable with this extension because it will enable us to implement a much better yard waste service.

Community Center Repairs

A total of $50,000 is included in the Recommended Budget for needed repairs to the exterior walls of the Community Center. As you know, significant water and termite damage was discovered last year after a minor water line break in the building. The Town’s consulting engineer has recommended a complete reconstruction of the exterior walls and exterior façade. The total estimated cost is approximately $50,000.

Fortunately, the structural integrity of the building is not in jeopardy because it is supported by steel beams. It is essential, however, to complete the necessary repairs in order to prolong the life of the building and provide a comfortable facility for our citizens.

Preliminary plans call for the use of cedar-shake vinyl siding to improve the appearance of the exterior façade.

As noted above, a one-time appropriation from General Fund balance would fund this expenditure.

Employee Salary Adjustments

The budgets for each department include a 3.1% cost-of-living increase for all full-time employees. The Consumer Price Index for the 12-month period ending March 31 indicated an inflation rate of 3.1%, and the recommended salary increases are intended to help our employees maintain their existing standard of living. The total estimated cost of these salary increases is approximately $62,000, not including benefits.

The Town does not utilize a current pay and classification system for its positions, nor do we have accurate job descriptions. Past and present salary adjustments have been based primarily on comparisons compiled by the North Carolina League of Municipalities, which are very useful, however, these comparisons do not reflect the differences in different jobs in different municipalities. Another problem is that not all municipalities respond to the surveys, and it can sometimes be difficult to compare Emerald Isle with all other NC beach towns, for example. To rectify this problem, I have included $10,000 in the Recommended Budget to hire a consultant to complete a pay and classification study for the Town.

I have also included an additional $42,000 in the Recommended Budget (in the Nondepartmental account) for additional salary increases for targeted positions and employees. This amount is equal to approximately 2% of the Town’s full-time payroll.

Any additional salary adjustments would be determined after considering current market conditions, changing job duties, and job performance over the past year. Although I plan to make some limited salary adjustments prior to the completion of the pay and classification study, most of these funds will be reserved for salary adjustments based on the outcome of the study.

As I know you’re all aware, it is extremely important to maintain competitive salaries to retain our top employees and recruit high quality employees to our vacant positions.

Health Insurance Premiums Decrease

Contrary to historical and national trends, the Town’s employee health insurance premiums are decreasing by approximately 6% in FY 03-04. The monthly premium expense will decrease from $332 to $312. Although some less common co-payments will increase slightly, the Town is also able to decrease the employee’s co-payment for primary care providers from $20 per visit to $10 per visit.

The total savings to the Town is approximately $13,680. The Board should determine whether or not the amount of the Board’s monthly health insurance stipend should decrease to $312 or remain at $332.

Other Notable Expenditure Items

The Recommended Budget also includes funding for several other notable items:

· $26,000 to match a $104,000 grant for the NC 58 Bicycle Path project,

· $19,000 to match a $56,000 grant to complete needed parking lot improvements at the Western Ocean Regional Access,

· $9,000 to match a $28,000 grant to purchase and construct public access parking on Coast Guard Road at Station Drive; this lot will provide the closest public parking to the Point area,

· $4,000 for the purchase of a computer projector to improve presentations at Town meetings,

· $28,000 for the purchase and installation of a new telephone system, including voice mail.

OTHER FUNDS

BEACH NOURISHMENT DEBT SERVICE / RESERVE FUND

This is the second year of the Beach Nourishment Debt Service / Reserve Fund, which is used to account for the special district tax collections and principal and interest payments on the beach nourishment bonds. The total budget for this fund is $2,705,880 in FY 03-04. Of this total, nearly $1.5 million is allocated for principal and interest payments, with the balance allocated to fund balance.

The Beach Nourishment Debt Service / Reserve Fund is expected to have a fund balance of approximately $2.55 million at June 30, 2003. FY 03-04 is the first full-year of debt service payments on the bonds, however, an additional $1.25 million is expected to be added to the fund balance, bringing the estimated total fund balance to approximately $3.8 million by the end of FY 03-04. As you know, this fund balance accumulation is intentional in order to stabilize the special district tax rates over the entire 9-year period that they will be in effect. This fund balance will be depleted in the latter years of the debt service schedule.

DEBT SERVICE FUND

The Debt Service Fund accounts for all other debt service payments. The total budget for this fund is $712,853. Approximately $163,000 of this total is earmarked for the one-year debt for the purchase of new solid waste containers. If this item is removed, the total Debt Service Fund budget for FY 03-04 would be approximately $549,000, which is just slightly higher than the FY 02-03 amount of $517,000.

FY 03-04 is the final year of debt service payments on the Emerald Isle Woods / Coast Guard Road Storm Water Project land purchase.

SPECIAL SEPARATION ALLOWANCE FUND

The FY 03-04 budget includes an increase in the annual contribution to the Special Separation Allowance Fund to $11,000. The Town’s auditor estimates that this level of funding over the next five years will provide sufficient funds to meet the Town’s projected liabilities. As you know, the fund is used to reserve funds for future special separation allowance payments for retiring law enforcement officers.

SPECIAL DRUG FUND

This fund accounts for restricted Police Department revenues resulting from drug seizures. The actual revenue collections in this fund are highly variable; thus a total of $7,500 is anticipated in FY 03-04, equal to the amount projected for FY 02-03. These funds may only be used for Police Department equipment.

REGIONAL BEACH ACCESS FUND

This fund will be used to budget and account for the Western Ocean Regional Access parking lot improvements and the Station Drive / Coast Guard Road public access parking lot project.

LOOKING AHEAD

Looking ahead to FY 04-05 and beyond, the Town’s budget situation appears to be relatively stable. I have put considerable effort into planning for future expenditures and reasonably anticipated revenue adjustments. There are a few principles that I believe we should adhere to in order to stabilize our General Fund budget and tax rate:

· First, we should avoid the use of one-time revenues (fund balance, reserves, etc.) to fund recurring expenditures. This practice often yields positive short-term benefits that have a habit of catching up with us in a negative manner down the line.

· Second, we should diligently plan for future significant capital expenses in an effort to avoid multiple, large capital expenditures in one particular year. The

· attached Capital Replacement / Improvement Program is my initial effort to maintain a manageable level of capital spending each year.

· Finally, we should maintain, and if possible, increase our undesignated fund balance in the General Fund. The presence of a healthy fund balance will make it significantly easier to stabilize our tax rate over time by providing necessary funding for emergency situations or one-time large capital expenditures.

As you will note on the attached 5-year forecast, I am projecting a need for a slight tax rate increase to approximately 20 cents in FY 04-05. However, I believe my projection is conservative in nature, and I am hopeful we will be able to avoid that possibility when FY 04-05 arrives. You’ll note that the projected tax rate decreases back down to approximately 19 cents in FY 05-06, primarily due to the full retirement of an outstanding installment financing agreement in FY 04-05. The Board should note that the attached 5-year forecast incorporates the recommendations in the Capital Replacement / Improvement Program and the Debt Service Forecast.

I want to reiterate the importance of the additional sales tax revenues to our FY 03-04 budget. Without these additional revenues, we would either be facing a tax rate increase or painful expenditure reductions. The Board should continue to monitor sales tax collections on a routine basis, and should also be mindful of any efforts at the County level or by other municipalities to change the distribution formula, which has obviously worked in our favor. A switch from the ad valorem method (our current distribution method) to the per capita method could have significant negative impacts on the Town’s budget. I don’t envision this occurring, as the County would also lose if the formula is changed, however, circumstances change and anything is possible.

CLOSING

As I noted earlier, I am extremely pleased to present a Recommended Budget that maintains the current General Fund tax rate. The Recommended Budget limits operating expenditures to the maximum extent practical, restores funding for replacement capital items, and invests the available discretionary funds in our employees, and in capital items that will have a noticeable impact on the quality of life in our community and / or the efficiency and effectiveness of our services.

I have once again included several charts and graphs in the budget document to better educate our citizens and property owners about the Town’s budget and our services and programs. I hope that the public will find this information useful as they review and critique the Recommended Budget. I sincerely want to do everything possible to educate our citizens and property owners about the Town’s activities, issues, and budget. I ask you to encourage any members of the community with questions or interest in the budget to contact me directly. I am happy to make the time to explain the Town budget to anyone who is interested.

Finally, I’d like to once again express my sincere appreciation to the department heads and all of our employees for their daily efforts to contribute to the excellent quality of life in Emerald Isle. I am truly blessed to work in such a wonderful community and with a truly excellent Town staff. I also want to thank the Mayor and each member of the Board of Commissioners for your support and guidance as we all give our best to make Emerald Isle an even better place than it already is.

I look forward to reviewing the Recommended Budget with you in the coming weeks. Obviously, I hope that you will concur with these recommendations, but I sincerely encourage you to adjust this Recommended Budget in any way that more clearly articulates your priorities for FY 03-04 and your long-term vision for the community.

Respectfully submitted,

Frank A. Rush, Jr.

Town Manager

A copy of the proposed Budget is attached at the end of these Minutes.

Mr. Rush presented the Board with dates for Budget Workshops. The first one was May 22, 2003, the next one May 30, 2003 and a Public Hearing on the Budget on June 3^rd to get the public comments and concerns. If no further workshops are in order, the budget will be considered for adoption at the regularly scheduled meeting of the Board on June 10, 2003.

Mr. Rush added that this Budget needs to be the Board’s Budget addressing what their priorities are. He volunteered to answer any questions at this point.

Mr. John Wootten, 103 Eagles Nest, complimented the Town Manager. Mr. Wootten has been through this process several times and the way this budget is laid out shows where all the money is coming from and where it is going and he should be congratulated for a job well done.

BOGUE INLET CHANNEL RELOCATIONS/ WESTERN NOURISHMENT

a. Resolution Authorizing Amendment to Contract with Coastal Planning and Engineering (CPE) for Additional work associated with the Bogue Inlet EIS.

Consideration of a resolution authorizing contract amendments with Coastal Planning and Engineering (CPE) for additional permit coordination, design services, and environmental studies is presented. The attached resolution authorizes an additional $271,400 for this purpose. Second, the Board will consider a capital project ordinance amendment to allocate additional funds for this purpose. Third, the Board will consider a procedural budget amendment to the “old” Beach Nourishment Fund that is related to the capital project ordinance amendment.

Resolution Authorizing Amendments to Contract with Coastal Planning & Engineering for Additional Work Associated with the Bogue Inlet EIS

Mr. Rush began by saying the Board has previously authorized a total of $490,700 for environmental studies, permit coordination, and design services. An additional $137,500 is budgeted for final design reports (construction plans and specifications), bid documents, and construction administration, but has not yet been formally awarded to CPE. The total amount allocated for all of these services is currently $628,200. The authorization of these contract amendments would increase the total, formally authorized contract amount to $762,100, with an additional $137,500 not yet authorized but anticipated once we near the construction phase. The total amount necessary for all of CPE’s services (including these contract amendments) to bring this project through to completion equals $899,600.

There are two contract amendments included in the resolution. The first amendment equals $170,000, and is primarily related to the one-year delay in completing the EIS and securing the necessary permits, as well as additional services required of CPE that are outside the scope of the original agreement. A letter from CPE dated April 1, 2003 includes an explanation of the factors responsible for this contract amendment. To summarize, these factors are as follows:

The decision to prepare a full EIS rather than an EA. Although this was a wise decision, it has resulted in additional work that neither CPE nor the Town anticipated.
The additional year of time devoted to completing the EIS and securing the permits.
The use of the Project Delivery Team process, which has resulted in significant additional effort and expense for CPE in terms of attendance and preparation.
Additional feasibility level design work based on comments from the Project Delivery Team and the public scoping meeting.
Development of a Biological Assessment, which was not included in the original scope of work.

The Board should note that a letter and proposal dated April 1, 2003 has a bottom-line total of $275,000. Please note that the Board has already authorized $105,000 of this work in January 2003 to expand the pre-project biological monitoring program. The total additional funds required for this contract amendment equal $170,000.

The second contract amendment equals $101,400, and provides additional bathymetric, topographic, and habitat mapping of areas in and adjacent to the permit area. Recent Project Delivery Team meetings have revealed that this information will be required to complete the EIS and secure a permit for the project. The attached letter dated May 9, 2003 outlines the additional scope of work included in this contract amendment. To summarize, the additional items are as follows:

Additional coordination of CPE personnel and subcontractors to collect the necessary data and produce reliable maps
Aerial photography of an approximate 14 sq. mile area, delineated as the “survey area”.
Topographic and bathymetric surveying and mapping in the area delineated as the “survey area”, with more intense mapping occurring in the “permit area”.
Marine and estuarine habitat mapping in the area delineated as the “survey area”, with more intense mapping occurring in the “permit area”.

The contract amendment includes aerial photos depicting the “survey area” and the “permit area”. The level of effort will be greater in the “permit area” than the “survey area”, however, the Town and CPE will still be collecting valuable information in the “survey area”.

The scope of work for the second contract amendment has been developed based on input at the Project Delivery Team meetings and frequent and extensive one-on-one conversations between CPE personnel and regulatory agency personnel. Although the nature and amount of additional information requested can sometimes change, CPE is confident that the level of effort outlined in the attached contract amendment will satisfy the regulatory agencies’ concerns.

Mr. Rush presented a copy of the revised project schedule prepared by Tom Jarrett, CPE. CPE and the Town have been operating under an earlier version of this schedule since the inception of work on the EIS, and the schedule has now been adjusted again to accurately reflect the projected schedule at this stage of the process. The schedule anticipates receiving necessary permits in October 2004, with construction occurring between November 2004 and February 2005. Mr. Rush indicated he was still somewhat concerned about this schedule, as it is tighter than would be preferred. CPE believes this schedule is reasonable at this point, and is hopeful that they have been overly conservative in the time frames allocated for certain steps. Everyone hopes that is the case and that the project will be completed by February 2005.

Mr. Tom Jarrett said when they submitted their proposals back in May, they did not envision the rather detailed process that was going to be put upon this project. Much of the experience CPE has had in Florida and what he remembers during his days with the Corps, generally an applicant would go out and prepare a document and then submit it for agency review. What was happening in the old process was the trauma period was loaded at the end. In the particular case for the Bogue Inlet Project, the Corps of Engineers is actually the agency responsible. for the preparation of the Environmental Impact Statement. CPE was approved by the Corps as a third party preparer of that EIS and CPE was recommended to the Corps by the Town. Mr. Jarrett said the bottom line is CPE spent a lot of time and effort going to Project Deliver Team Meetings to coordinate the Federal EIS project. As a result of these coordinating meetings, there has been a lot of additional tasks and requirements placed upon this project that was not envisioned from the beginning. It has originally been planned to use the EIS to supplement the Bogue Banks Beach Nourishment Project and this is what the first submittal was based on. After they got into the process, a meeting with the Corps back in August and they laid out the process, it became obvious that thing was going to drag out a lot longer than anticipated and this was a completely a new permit. It was thought that the town could tag onto the existing Bogue Banks Project Permit but that was not the case.

Mr. Jarrett said the preconstruction biological monitoring program is much larger than was expected.

Mr. Jarrett said they have come forward to ask for additional funding to support this project. CPE has made substantial efforts at this point and will continue to make substantial efforts to pull this project out and complete it.

Mayor Schools expressed a concern that when the Board was sitting here about this time last year the board was told the time frame was OK and the goal was OK. Neither one seems to be close.

Mr. Jarrett said they probably did indicate that although he did express some concern to Frank earlier on that they had an ambitious schedule and probably on past experience on other projects, not knowing what they we getting themselves into in terms of the PDT process. Mr. Jarrett called the Corps this morning to see how long this the PDT process had been going on because he was not familiar with it. He had been with the Corps 35 years and it turns out that Col. DeLoney implemented this procedure that all major projects would go through this project deliver team process. He also called the person who did the Mason Inlet Project and asked what was involved in doing an EA. They were not really doing a form of project deliver team process but they did have something going on very similar. All of the federal projects that Mr. Jarrett was associated with did not have this particular process in place. All of the work Craig Kruempel has done is not what they do in Florida. They do it basically the way that was proposed. The proposal was based on the assumption that there was probably adequate information out there to identify what the resources were, that it can be identified through analysis what the impact on those resources would be and the result of those two make conclusions in regard to the existence of the impact of the project to those reasons. Mr. Jarrett said the schedule proposed by the Corps and the project deliver team meeting once a month for about 6 meetings, CPE knew they were inadequate with what they had proposed. The proposal was an honest proposal based on the experience Mr. Jarrett had and based on the experience CPE had with other projects.

Mayor Schools asked if they had tried to negotiate the level of detail requested by the agencies, and did they think the requests were reasonable? Mr. Jarrett answered that they had tried to negotiate the levels of detail and Craig and Erin had done a really good job paring down what was originally thought to be coming from the agency.

Craig Kruempel, CPE’s Director of Environmental Studies, said that generally speaking when it comes to a federal project and there is the same situation with the State of Florida Resource Protection Agencies, there is one of two avenues that can be pursued. You can either try to reach a reasonable compromise that they are willing to accept or you can tell them “We cannot do it” at which point they continue to get into additional requests which prolong ultimate permit issuance and with the importance of this project affects. At the Pointe, they are trying to reach a compromise and Mr. Kruempel thinks in the proposal that was presented in the second half of this presentation tonight, he feels they have come to a compromise with them. If the town believes CPE needs to go back to them and present an alternative, they would be more than happy to put that together for the town.

Mr. Kruempel said the SAV's, the submerged aquatic vegetation maps were deemed inadequate. CPE has used similarly dated material in other areas but the State recommends additional investigations for those particular habitats and you can either say no, what we have is what we have, and CPE will prepare their evaluation based on that or the process can be expedited by moving forward. Expedition of the process turns out to have associated costs with it as well.

Commissioner McElraft asked if there were any funds from the agencies that were requiring so many things on this project that they do not require on others – are there any funds they would like to chip in? The answer to this was “No”.

An example of preferred monitoring and the monitoring that is already included is the State indicated there was data out there but not enough to really evaluate project impact. The town had implemented a very enthusiastic biological monitoring for programs that was coordinated over a period of several months with various State and Federal agencies.

If the agencies know something is going on, they want to know about as much as they can about the system to make sure if they permit this thing they do not turn around and cause more harm to the resources they are trying to protect.

Commissioner Farmer noted, “We are the ones who want to do it”. She also asked how would you know what you are doing out there if you do not know what is there in the first place. Nature may move the channel around but nature does not usually scoop up the sand and place it on the beach. Commissioner Farmer said another thing was, when they were looking at the Bogue Banks Project, the whole permit area, one of the areas they were talking about going into was the inlet. All of the agencies said not even to go there because it is going to get very complicated.

Mr. Kruempel, made note that one of the points that may be of benefit is that what you are looking at now as far as the process moving forward could be viewed as the 1^st floor of future building that is going on. If the town elects to maintain the inlet channel in that location, having this comprehensive baseline data set will allow the town to look at future projects with open eyes and the potential for mitigation for on this project and they have a refreshing agency opinion in North Carolina that he has never seen elsewhere which is “We want to evaluate project impact on Marine Fishery Service personnel. We want to evaluate project impact after the project is constructed as opposed to up front mitigation for projects”.

Commissioner Farmer said, she assumes too that the information that comes out of this will also be useful for the 50-year project. Hopefully what is being paid for now is stuff that will not have to be paid for at a later date.

Mayor Schools said there had been confusion about what the project area was and the permit area, and how much was required of each. He asked Mr. Kruempel if he was comfortable with the info now or if that needs to be looked at more? Mr. Kruempel answered he thinks they are in pretty good shape. He thinks they understand what the Corps is looking at and the agencies are looking at as far as the survey area, which is a much broader area. There have been comments about the channel potential for the channel being shoaled in with this change. Some of the impacts to Bear Island, Hammock Beach State Park, as well as the project area all the way back to the Intercoastal Waterway. This is what is being proposed for the survey. If this picture is kept in mind, then we go to a permit area, which is a smaller area, more concentrated and focused investigations. Based on Mr. Jarrett’s evaluation and the other work folks at CPE have done, the area of impact and affect is probably limited in the western channel and in the eastern channel and in the first 8,000 feet of Bear Island. Accretion on Bear Island with movement of sediments. This is the area that will be focused on when it comes to the survey. In the broader survey area, what is being looked at is less detail with gross characterization of those areas in order to give them some assurances and provide the town again, with the information that is needed to either say “Yes or “No” to more impacts outside that permitted area and they were caused by another fact. Mr. Kruempel noted he believes it is achievable in the schedule and scope that CPE proposed.

Commissioner Marks said her understanding is this is a federal navigation channel and Mr. Krumpel’s answer was “Right”. He also went on to say if the town is interested in having that sand transferred at some future point as part of the long term shore protection, this may be an opportunity for the town to find future quality sand for future projects.

Commissioner Marks noted it seemed to her the town was having to pay the bill for a federal navigation project, the town would like the sand to go for the nourishment project. She asked why couldn’t the Corps add something into the pot for the channel relocations? Mr. Jarrett answered that his understanding is for the 50-year project, they would look at Bogue Inlet as a source of sand for the periodic nourishment for portions of that. There would have to be some consideration of patching material for Bear Island. It would be in a regular basis that material would be removed from that to maintain both the navigational channel and provide sand for beach nourishment. The Corps is supposed to be including Bogue Inlet in their overall plan for the 50-year project.

Commissioner McElraft asked if the data that is being collected now could be used for any credit from the Corps. Mr. Jarrett answered, “Not unless you have an agreement with the Corps”. You could try to get some congressional consideration for any In-Kind type services added after that.

Commissioner Eckhardt was having a hard time reconciling the supply. On one hand, there is not enough sand out of the post project to actually nourishment the western reach. On the other hand it is being looked at as a great source. On one hand the town is being told there is not enough and then Mr. McIntosh of the Corps is looking it as a 50-year source. Mr. Jarrett said he does not know what Mr. McIntosh is doing. If he (Mr. Jarrett) was doing it and he thinks what has been done in this report, they have gone through the proposed channel that the town is looking at which is about 1 million years and then tried to predict what the shoaling rate would be in that channel and how long the channel would stay open before it needs dredging. Mr. Jarrett only counted about 12 months but he hopes he is wrong. Maybe it will last two years. The town is not going to get a lot of material and it is not going to satisfy the requirements of all Bogue Banks. There may be 250 to 300 thousand cubic yards out of the channel that could supplement the nourishment requirements for the west end of Bogue Banks Emerald Isle. Some of that material is going to have to be shared with Bear Island because this inlet does share sand from one side to the other.

Commissioner Eckhardt noted he did not want people to get the idea there is some inexhaustible source sitting out there. Mr. Jarrett said a reasonable number to look to is approximately 340 thousand every two or three years and then again you are going to share it to each side of the Inlet. The biggest thing about it is that it will not only be good for navigation but it will come to the Pointe because you are not going to faced with the problem there hopefully again.

Mr. Krumpel said one other item that he thinks probably the Mayor and Mr. Rush as aware of, but he does not know if the rest of the Commissioners are and this is a thought to get the town through its project. It does not include the post construction monitoring that may be considered or required by the State and Federal agencies. When the permits are acquired, one thing the Marine Fisheries has talked about is a 2-year post construction evaluation of the shoal lane and probably could be kind of forced under aerial photography and some ground truthing but having that occur 2 years after the project in order to evaluate the mitigation are items that the town should be aware of as potential post construction costs associated with the project.

Commissioner Farmer asked if there was any way of estimating what those costs would end up being? Mr. Krumpel answered they think they have an idea as far as that particular cost, you can see some of those reflected in the proposal provided but that is one aspect. They still have to have the folks from the State Fish and Wildlife Service and several other of the agencies weight in on this issue and they may fall right in line with this additional monitoring, which may work out to be fairly limited.

Mr. Rush said when Mr. Jarrett was here the last time and presented his revised budget, the town did have the post project monitoring in there and including the post project monitoring, they came up with $250-$270 thousand dollars short overall. Mr. Rush did not know how much the post monitoring of the project has changed since that time but it was felt that $200 thousand dollars set aside in the last couple of weeks could be used for post project monitoring.

Commissioner McElraft asked if Mr. Rush was saying that even with the increased cost the town is still within the budget except for an estimated $50 thousand dollars and Mr. Rush answered “Correct” at this point in time.

Commissioner Farmer asked how much the town is affected by things that happened at Mason Inlet? Mr. Jarrett said he could not speak for that project as to if it has performed or not performed but from a visual point, it seems to be functioning well. He guesses there are problems with public access and berms and things like that. He thinks the contingent this year is with the permit requirements for other access and things like that. They would proceed cautiously on this project to make sure that in their minds, they do not get burned again.

Commissioner Farmer commented that going into this, she thought the time line to do this project this fall was incredibly cutting and probably non-doable but she agrees there is no discussion about doing it next fall. The town just cannot wait. She hoped that CPE is comfortable with the time line that the town has. At the meeting that was held, they knew what they were asking and the town knew what they were asking and now we can move on. She hopes the time line we have now can be viewed as the “TIME LINE” and we can move on.

Commissioner Marks said there have been allegations that the board is dragging their feet on this. You can’t just hire a dredge to go in there tomorrow and move the Inlet and as the Board is trying to get this done as quickly as possible, she thinks everyone hopes it would not be this way. The board does not have any choice in the matter. She thinks everyone supports getting the channel moved. CPE are the experts and that is why the town hired them.

Mayor Schools, in reference to the schedule, said he had much rather see Mr. Jarrett put a schedule down that they would have to work hard to beat because he thinks the town is at the point now where it needs to meet every schedule and needs to set the goals high so we can get there and he does not know what will go wrong but something will. He had rather know that there is 16 to 30 days in there for whatever is going to go wrong, rather than have a schedule with a lot of cushion.

Mr. Krumpel said there are steps that could be taken and he and Mr. Jarrett have talked to Mr. Rush about some of those things like maybe noticing the contractors who do this type of work. They have a mailing list at their office that you could send them out and say here are the project details, this is the project area and we are looking at bidding this project in November. If you tell them about that soon they will put you on the list and they will hound you as the time gets closer and closer wondering where the bid package is and how the project stands and how they can be the first through the door. There are opportunities to put the contractors on notice and get your project on the radar screen. This is something that could be done very quickly. Mr. Krumpel has, on a monthly basis, contractors asking what project is scheduled in 2006. He feels the schedule the town has now is reasonable. There was a question about the 90 days for the EIS. He thinks they can both do their homework up front or develop a program and product that meets everyone’s expectations or they could deliver something that is less than what they are expecting. Mr. Krumpel also commented that starting Friday, this will be his number one priority.

Commissioner McElraft made a motion to approve the Resolution Authorizing Amendments to Contract with Coastal Planning and Engineering for additional work associated with the Bogue Inlet EIS.

Commissioner Eckhardt commented that Ed Murphrey had suggested the possibility of tying this to some State importance incentive. Commissioner McElraft wanted to know on who’s part because the hands of the permitting agencies are really tied. Commissioner Eckhardt said he does not know who the town would tie it to. He thinks it should at least be discussed. He does not even know if it is legal or not.

Mr. Jarrett said the things that they have control over are – and they are already working on the preliminary draft. So far he has not heard from EDC and the report he forwarded this evening. Hopefully they will have some comments because that report is the basis of all of the others. He hopes they are happy with it but he needs their comments anyway. Mr. Jarrett should hear from the EDC and the Corps by the dates given but the other dates they do not have any control over. Once they get to the Corps portion of the project when they have to take some action, it will probably turn these things around in the time in there. Mr. Jarrett said CPE will adhere to the schedules the Corps provided back in April. Mr. Jarrett said the State permitting could take 1 day or 150 days. They took the middle row.

Mr. Kumpel said what happens is the legal sufficiency and the compliance with the Corps document regulations does not occur until the FEIS is submitted with the recommendation from Wilmington to their “Higher Authorities” at the division level and then at Headquarters in DC. They will come back with legal questions, comments, formatting and etc. Even that 30 days could be enthusiastic depending upon how much work their comments entail.

Commissioner Farmer said she thought the reason to go with an EIS was it was very appealing so the town would not get stuck in a three or four year process.

Commissioner Farmer said she thinks what is being heard from Ed Murphrey and from the Board is we don’t have any more time and we don’t have any more money.

The board voted unanimously with a vote of 5-0. Motion carried.

c. Capital Project Ordinance Amendment

Capital Project Ordinance Amendment

As noted in the capital project budget ordinance amendment, there are two sources of funding earmarked for the additional cost associated with the two contract amendments ($270,000). First, there is currently a balance of $114,856 in the “old” Beach Nourishment Fund that I am recommending be transferred to the Bogue Inlet / Western Nourishment Project. This transfer would fully deplete the “old” Beach Nourishment Fund, and the fund would be closed. The remaining funds would come from the Contingency line in the project budget. A total of $156,544 would be transferred from the Contingency for these contract amendments. This transfer would leave the Town with only $70,456 remaining in the Contingency for this project.

Mr. Rush is somewhat uncomfortable with reducing the Contingency to this low amount, however, these are the two most reasonable funding sources for these contract amendments. The alternatives are 1) not doing the work, which would essentially stop the project, 2) appropriate money from General Fund balance, which is not advised, or 3) allocate funds from the special district taxes for the project, which is also not advised at this point in time.

Commissioner McElraft made a motion to Authorize the Capital Project Ordinance Amendment and the board voted unanimously, 5-0. Motion carried.

c. Budget Amendment – Beach Nourishment Reserve

Budget Amendment – Beach Nourishment Fund

If the Board approves the capital project ordinance amendment described above, they will also need to adopt the attached budget amendment which simply transfers the remaining $114,856 in this fund to the Bogue Inlet / Western Nourishment Project. This budget amendment is essentially procedural in nature.

Commissioner Messer made a motion to approve the Budget Amendment – Beach Nourishment Fund and the board voted unanimously, 5-0. Motion carried.

Mr. Jarrett said CPE was committed and they will be there to make sure the town gets its permits because there will not be one little thing they did not do to prevent the town from getting the permits. They appreciate the town’s support and Mr. Jarrett guaranteed that CPE is aware of the town board’s support in this project and they appreciate the support the town is giving CPE.

Mr. Rush noted that there was a typo in the Budget Amendment for Beach Nourishment Fund. The larger number of $114,476 on the Revenue side is appropriated from Fund Balance and the Grant revenue is the $380 and those were backwards.

Commissioner Messer amended his motion to take the $114,476 from the Revenue is appropriated from the Fund Balance and the Grant revenue is $380. The board voted unanimously, 5-0. Motion carried.

PRELIMINARY/FINAL PLAT – SPINNAKER’S REACH PHASE IV

Ms. Carol Angus, Planning Director, explained that the preliminary plat was submitted back in 1996 and was approved at that time. The 29 lots have no land disturbance, the roads are already there and have been in since 1996 early 1997. There will be an additional fire hydrant installed at the request of the Fire Chief and another hydrant that is already in place will be moved a little further to the south so there will be even better fire protection for that subdivision. The zoning is RMH and allows single family and duplex dwellings. The lots are a minimum 12,500 square feet and there is 40-foot wide streets that are private. The subdivision meets all the current requirements and all the information has been instituted so there was no reason for the staff or the Planning Board to recommend approval of the preliminary and final plats.

Commissioner Farmer said she had a problem, which was not Mr. Randy Campbell’s fault at all. Unfortunately there is an ordinance that says a storm water management plan has to be provided and in this case she believes it has to be certified, with the submission of the preliminary plat and it is quite specific.

Attorney Derek Taylor was asked whether or not a storm water plan process would apply to a subdivision of this nature. It was his opinion that under the description of subdivision, if and when there is a subdivision, would, in order to qualify for a subdivision, would have to have a storm water plan to go with it.

Commissioner Farmer said unfortunately, that was not what Mr. Campbell was told and there is the same problem with the next item on the Agenda. Commissioner Farmer talked to Mr. Rush this afternoon on the phone. She said she would be more than willing to have this come up on one of the budget meetings that is going to be held. It could start out at the beginning of the budget meeting so the town board can, assuming the Planning Board approves the storm water plan at the next meeting, go ahead and approve it.

Commissioner Farmer reiterated it was not Mr. Campbell’s fault. It was a miscall in town hall.

Commissioner McElraft brought up the fact that the ordinance is for a new subdivision. The ordinance they are talking about includes streets, etc. Those streets have already been put in and each lot has it’s separate storm water plan. She does not think it can be called a new subdivision.

Attorney Taylor said his opinion is that this says new subdivisions and you go back and look at what it considers to be a subdivision and if the definition under that ordinance match that would be the platting either large enough or small enough so that would be a new subdivision. He knows what Commissioner McElraft is saying and at first it was his opinion as well and the way this thing is drafted right now, if you have a subdivision, you must look at the total impact of the whole subdivision on the storm water plan.

Commissioner Farmer also said it goes on to talk about that in fact in a subdivision where this has been done, the individual lot owners may not in fact have to do it on the plan. The subdivision plan may help it.

Commissioner McElraft asked how someone could get a storm water plan when they do not know how much impervious surface is going on each lot? How could you possibly do a storm water plan that would replace the individual storm water plan? That would be wonderful, but she does not think that is going to happen because each lot is different, each impervious surface is different, each house is different, each dune is different. If they put fill, they have to have a storm water plan. She cannot imagine this is going to replace the storm water plan.

Attorney Taylor explained the way it is drafted, is it requires the developer to prepare a plan based on maximum build-out of those lots. That is the way the solution was created in this particular ordinance. Attorney Taylor does not know what this board intended when they did it but that is the way it is currently drafted.

Commissioner McElraft replied, the discussion was that streets and curbs and those kinds of things. Those things have already been put in. She does not understand how a storm water plan for a subdivision that has streets already in could even be feasible when you have individual lots that are going to develop?

Commissioner Farmer said if you look at the language, it is specifically talking about build-out of the individual lots.

Mayor Schools asked if the way it is presented tonight, if it qualified for a storm water plan? Attorney Taylor answered yes.

Mr. Rush interjected that when the storm water ordinance was written in March 2002, the intent was to apply to new subdivisions that involved roads and other public or private infrastructures. He does think there is certainly a case to be made. When that language was initially drafted, the intent was that at the subdivision stage, the applicant would provide their best questimate of what impervious surfaces would occur at full build-out of that subdivision and if possible make arrangements to have ditches, retention ponds and what have you so the individual lot owners would not have to have a retention system on each individual lot. This is one approach. Another approach would be for the individual, the applicant, to come with a plan and each lot would have it’s own storm water management system. Mr. Rush prefers that it be a brand new subdivision with roads and those kinds of things, then there must be a more comprehensive plan at that time but it was acceptable, when that ordinance was drafted, to allow a plan that could be as simple as having each lot have it’s own individual storm water management system.

Commissioner Farmer said she and Mr. Rush disagree on that. Mr. Rush said that was fine but he was explaining the intent and the process behind drafting that ordinance and when this came into play at the staff level, the staff acted on the applicant’s retention requirements that each lot have it’s own individual storm water management plan. That is why the staff made the decision along with the Planning Board that they basically stated their intention of having storm water management system for each individual lot. Mr. Rush asked should they have required a written plan on it? He answered “Perhaps”.

Mr. John Odum, Prestige Engineering, has studied the storm water ordinance pretty hard this afternoon. He found that under Section 16-8, under Procedures and Fees, it talks about projects requiring formal planning board and town board review shall not be subject to the thirty-day requirement. Approval of storm water management plans for these projects shall be determined in conjunction with the planning board’s and town board’s formal review process. Mr. Odum submitted to the town board that they had done that. They came and submitted their plan to the town review committee and also to the planning board who has approved it. Mr. Odum said they are asking that the town board approve it tonight based on that.

Commissioner Farmer indicated she appreciated that but the problem is that the ordinance, if the town board approves it tonight they are violating the town ordinance. Mr. Odum replied that he does not think so. Commissioner Farmer said that the ordinance says “a storm water plan must be submitted and approved before a preliminary plat is approved. The board is not only approving a preliminary plat, they are approving a final plat. Mr. Odum said it also says that a storm water plan for new subdivisions, regardless of the proposed land use, shall include calculations of and incorporate design features to control the total volume of storm water runoff projected after full build-out of the subdivision. Mr. Odum said that has been provided as well. Mr. Odum said this particular project has a state storm water approval that was approved in 1994 prior to this similar ordinance and it met the town ordinances at that time. There again, Mr. Odum thinks they have submitted all of this and it has been approved as per the procedures defined in section 16-8.

Commissioner Farmer said she cannot answer the question of whether this is a new subdivision or part of an old. She has to leave that up to the Town Attorney.

Commissioner McElraft asked the Town Attorney would he not think a subdivision has already been approved, one that has roads in it and they have been developed for some years now?

Attorney Taylor said he is going by the ordinance. Whether or not the board intended this to be the outcome of this creation of this ordinance, he does not know but the definition of subdivide under 16-4 means to divide the ownership of a parcel of land, whether improved or unimproved, into two or more continuous lots or parcels of land, whether by reference to a plat, by metes and bounds or otherwise, or, if the establishment of a new street, easement, or right-of-way is involved, any division of a parcel of land”. He said it seems that the board is looking at both situations. So there is the creation of lots. That is what is before the board. The word “New” for subdivision, it does not say what a subdivision versus a new subdivision is and Attorney Taylor does not have anything else to go on. If this board wants to provide that that test, as far as this board is concerned, interprets this ordinance to be a new subdivision or something other than what subdivide is actually defined in this ordinance as being, he believes the board has that flexibility but it will have to do the same for every applicant that comes before it unless a change in the ordinance is made. Attorney Taylor is telling the board what he has read according to this ordinance.

Commissioner McElraft asked what kind of storm water plan can they have after all of the roads are already done? Mr. Odum said the only thing you could do is an individual lot by lot storm water plan which the board is going to require anyway, even if they did one and it says in the ordinance that the building inspector can still require an individual plan for each lot if they do not meet the current ordinance or if he does not feel like it is enough. They will end up doing individual lots anyway. They are much more specific than what they would do now. Mr. Odum went on to say that right now they were going to say the State is going to permit the last 4600 square feet per lot impervious codes. There is that much on the lots but it will probably never be used but that is what he has to design for initially. They give individual topos on the lots, they do individual house particular situations for each lot and that is the time to do that especially in this case and the next one. They have existing streets that you put lots on. All you can do is require individual storm water and that is what they plan on doing.

Commissioner Farmer commented that in cases of new subdivisions, even without the streets, she thinks the time to be looking at storm water, and she feels that it is the purpose of this, is before you do any of the developing – where that storm water is going to run.

Mr. Odum said what they have done is a generic plan. They have identified certain areas, each individual lot would retain its own 2 inches of water of their impervious areas and have identified were it will go to the wetlands area.

Commissioner Eckhardt asked if the town staff has looked at this? Mr. Odum said he received a call today at 3 PM and he then went to Mr. McLean’s Office and made up the plan and sent to Mr. Rush at 4:45. Mr. Odum does not think anyone has looked at it and it is certainly not anything in detail.

Commissioner Eckhardt mentioned that there are about three things that can be done. (1) The board can disapprove which is not fair to the applicant, (2) the board can approve it which to him sounds like they would be following the ordinance whether they board likes it or not. They can argue with the ordinance but that does not make any sense right now. (3) The other thing is that it can go back to the planning board with its staff recommendation like is normally done and put this on one of the Special Meeting Agendas. He would favor this one. If the board does approve, as Attorney Taylor has said, forever more we head this all the time and whether you are talking about the planning board or whether the board, “well we did it before, let’s do it again”.

Mr. Odum felt it all boils down to the problem of new subdivision not being defined. Subdivision is defined. Commissioner Eckhardt said we can argue with the ordinance but that does not make any sense.

Mr. Odum felt with the ordinance being like it is, it leaves the interpretation up to the board whether they interpret it to be a subdivision period or a new subdivision. Once you define a new subdivision, he felt that everyone would agree that a new subdivision as far as the board is concerned would be one that is building new streets.

Commissioner McElraft actually went back to the Minutes from the old discussion during the storm water process and when Mr. Almeida was talking about new subdivisions that is defined as when you have a new subdivision that you are putting streets, ditches and curbs, etc and plan ahead. In the discussion then it was really hard if you do not know what is going to go. It is going to be an estimate. That is a brand new subdivision.

Mr. Odum said that is kind of what Commissioner Farmer is saying to address those individual lots. Then if you see that you need a way to get across that street then you can address that. Mr. Odum implied they do not have that option there. Each individual has to deal with his own water. That is all he is asking the board to do. Abide by the ordinance. In one place it says every lot has to do its own stormwater plan and in the next place, it says the subdivision has got to do it and it may or may not provide that owner with a subdivision plan or storm water plan when the time comes. He may have to go back and do another one anyway.

Commissioner Messer indicated he has a problem calling it a new subdivision. Mr. Odum mentioned that on a lot in Phase IV, Mr. Campbell has been paying a tax bill on it for two years now. Even the tax office recognizes it as old Spinnaker’s.

Commissioner Eckhardt said she does not see the purpose of having a subdivision storm water plan when they already have the streets in. Unless you address each individual lot it is a waste of time.

Commissioner Farmer asked to get away from the discussion of whether this is a new subdivision or old subdivision and go back to Section 16-7 Storm Water Management Plan. It says “Approval of a storm water management plan must be submitted and approved before a preliminary plat is approved”. Now the board has this, which no one has looked at.

Mr. Odum reminded Commissioner Farmer that the preliminary plat was approved in 1996. All they are doing is doing a final now just like they did the other three phases. They came in and did a final on three other phases. They got a preliminary in 1996 and then later that year or early 1997, they came in and got a final on Phase I and then they build all of the streets based on that preliminary. He submits that they have done that.

Commissioner Eckhardt said it makes it harder on the others that have been given their approvals too.

Ms. Angus said the original request had been for a final plat approval but because more than a year had passed from the time the preliminary approval until the final approval, Mr. Harvey, who is not present, felt it would be in the best interest of the applicant to submit the preliminary and the final together so that the board might look at everything again and that is the rational as to why we didn’t have just the final because non of this board had seen the preliminary.

Commissioner McElraft said it could have been justifiable. Ms. Angus answered, “Yes it could have been” but they were afraid it would be an issue of being more than a year since the preliminary plat had been approved and she thinks Mr. Campbell can attest to the fact that the year has been an issue because of the issuance of septic tanks and it has been a long hard going procedure with the County. That is why you got a preliminary and final.

Commissioner McElraft asked what if they deleted the preliminary part of this and just go to the final? Commissioner Farmer said they are a new subdivision. The question is are they Spinnaker’s.

Mr. Rush spoke with Mr. Harvey late in the afternoon to make sure he was still comfortable with this original recommendation and he said he was.

Commissioner Eckhardt commented that the board has had some recommendations where they know that possibly someone is going to have to look at the ordinance again about interpretations. He asked if there was a hardship with going back and doing it per the ordinance through the town staff with their recommendations to the planning board, and possible approval based on the planning boards recommendation as normal procedure.

Mr. Odum replied that the board is talking about time and about money. He does not know that they can get a comprehensive storm water plan like the board is asking for in that time frame. Mr. Eckhardt said he was not asking for it. The ordinance is asking for it. He does not know what a storm water plan looks like so he relies on the staff and planning board to make that recommendation.

Mr. Odum related there is nothing they can do with the streets already there. Even if they found an area that was a problem they would have to build with it in that area. They are not going to be able to put it somewhere else. They have to deal with it where it is. This is what they will be doing on individual lots anyway.

Commissioner Farmer said the question is does the storm water that will be generated by this Phase IV have any impact on the layout of Phase IV. Mr. Odum said he does not know. Mr. Odum submitted that with individual lots, they will not have a choice. Either you contain the 2 inches on site or you don’t get a permit. That is what the ordinance says. Each individual lot has to do an application for storm water purposes.

Commissioner Farmer’s question to Attorney Taylor was “what can we do that does not weaken the ordinance?” Do they magically wave a wand and say this is an

old subdivision because of Phase IV? Attorney Taylor said in his opinion, this is the board that created this ordinance; it has therefore had a lot of input into its design. He has given his opinion as to what this ordinance says based on what he has before him but it has also been agreed that there is no definition of a “new subdivision”. If it is decided that this board did not intent for this kind of development, which is really laying out lots, where each lot will have to go through the storm water process itself even though it was not intended to be in this ordinance, he believes this can be passed tonight without going through that.

Commissioner Farmer said she thinks it was intended to be in the ordinance. What she is focusing on is this, as Phase IV a new subdivision or it is a continuation of an old one. If it is the continuation of an old one – Attorney Taylor interjected that he can say it is a subdivision under the definition, whether or not it is a new subdivision – Mr. Odum interjected there is no doubt a continuation of an old subdivision or it would not be called Phase IV and the streets would not be in.

Commissioner Farmer said she does not want to encroach the ordinance and Mr. Odum said he is not encroaching the ordinance. Commissioner Farmer said Attorney Taylor is telling them that they are.

Ms. Angus has a preliminary plat that verifies that every lot that is being looked at tonight was on that preliminary plat from the very beginning. This has not now been carved out of a parcel that was just hanging out there. These lots were brought up so this is a continuation. They were shown before on the preliminary plat.

Commissioner Farmer said the intent of the ordinance is what she wants to protect which is when a new subdivision comes before the planning board, the developer should be looking at all of the storm water. She does not care whether there are roads, sidewalks, etc., the whole cumulative impact on the development on all of those lots in that subdivision should be looked at at the development level and if it means that down the road when the individual lots are developed, those people can just refer to the developers storm water management plan and not have to do their own, that is wonderful. That is the way is should be done. That is what the ordinance is saying.

Commissioner Messer commented there has never been a storm water plan, actual overall plan, on individual lots. Mr. Odom replied it has to be individual.

Commissioner McElraft commented that Mr. Odom does not show what the topography is. Mr. Odom answered, “But we do know what the topography is but they don’t know individual specifics which is where are you going to get the best plan site. Regardless of what is done at the subdivision level you are going to still require that individual lot owner to keep the 2 inches on his lot regardless of what is done which is the better plan. Mr. Odom agreed it needed to be looked at overall but board needed to look at it overall when they have the opportunity to do something about it. Right now they do not.

Commissioner Farmer agreed this was all fine but she is still back to the problem. If it would weaken the ordinance by going ahead and approving this, she would rather have it go back to the planning board and then to the town board on May 30^th.

Commissioner McElraft commented she thinks it all comes back to the interpretation of a new subdivision and the discussion during the time the board put this ordinance in affect. If you go back to the notes, it is absolutely the idea was when you are putting the roads in is when you can do those other kinds of things because that applies to the extra storm water thing. There are already roads in what are you going to do? Commissioner Farmer stated she did not think the roads had anything to do with it but she does not think that was the intent.

Commissioner Eckhardt commented to consider Osprey Ridge and what the board ran into there.

Commissioner McElraft noted that most of the lots in Spinnaker’s will have some kind of wetlands on them that will help with storm water retention. Commissioner Farmer disagreed that it would not, it would just add to the wetlands the water level would go up higher.

Commissioner Marks said she has concerns about the wetlands since there was such a big problem with Spinnaker’s Reach.

Commissioner Messer asked where the problems were in Spinnaker’s and Commissioner Marks replied that you have just about as much wetlands as there was dry land. She does not want to see another Lot 113 in Dolphin Ridge called a buildable lot. Forgetting the rain fall, the town is drawing water from he aquifer and it is being added to the water table and every time you add another house the water table is being raised because you are taking underground water bringing it to the surface. Lawn watering, washers, showers, etc comes from the aquifer and is added to the surface water. She thinks there are alternatives. Some of the lots might have to be redrawn so there is more buildable land. Mr. Odom noted that from Mr. McLean’s letter on storm water today indicated they would not redraw any of the lots and that the board would be shown the plan on every one of those lots and individual lots the same on those individual lots when the permitting starts. He said that they would show the board a plan on every lot showing the house and driveway.

Commissioner Eckhardt agreed that this document can go back to the town staff and they can then take this to the planning board who would come back and say we approve the storm water plan and then the planning board comes to the town board with their recommendations, then he could agree with Mr. Odom.

Mr. Odom asked who was qualified to review the plan? Commissioner Eckhardt said he has no idea but that is why they have the staff. Mr. Rush said Mr. Daniel has been put on the staff committee as a planning board member. Mr. Rush said he would like to have a professional engineer on retainer for the town but unfortunately the town has not gotten to that point yet.

Mayor Schools asked if this could be approved contingent upon the planning board approving the storm water plan. Commissioner Farmer answered “No. I am not going to do that.” If the planning board is willing to meet before May 22^th meeting. Mr. Odom said Mr. Daniel was the one who would have to review it and bring it back at the next meeting if that is what it is going to take. Mr. Daniel is the only one that knows what he is looking at. Mr. Odom asked why he is being held at the “fire” when no one else but Mr. Daniel knows what he is looking at. He went on to say that the planning board had a chance to review it and if they had fault of the storm water plan they would have instructed you.

Commissioner Eckhardt replied they are trying to come up with some compromise because you in good faith went ahead thinking you did not need a storm water plan. Commissioner Eckhardt said they want to honor the ordinance to take the time to go back to the planning board, whether it be Art Daniel or someone else on the planning board, he does not know. Let’s go back to the planning board through the town staff with their recommendations.

Mr. Rush offered it might be reasonable to have Art Daniel in his capacity of the planning board chairman and with a quasi-staff person with engineering expertise to review this storm water plan and if he is comfortable with the storm water plan, then possibly bring it back on May 22^nd without entire planning board review. With all due respect to the planning board members, Mr. Rush does not feel they are any more qualified to review the storm water plan than the board or he and that may be a reasonable compromise.

Ideally, the way this process should be working is that storm water plans should be approved at staff level by an engineer who is qualified to view those and then on to the planning board and town board and yes if it is ok or no it is not ok. None of them are really qualified to do that.

Commissioner Eckhardt agreed that was a good idea if the planning board would go along with it. Anne Erikson, planning board member, said she could not speak for the rest of the board members but she would be very comfortable with that because Mr. Daniel is the expert. She would say it was OK because she believes in Mr. Daniel.

Mr. Rush said he can’t speak for others either but he does know that the process is working.

Commissioner Farmer said she never planned on a detailed review. She just asked the question “Where is it?”

Mr. Rush replied he was not saying that she did. He is just saying that in light of the process that he would like to have in place kind of takes another step in implementing as a compromise.

Ms. Erikson suggested asking Mr. Daniel his opinion on this before making a decision for him. He may not go along with it.

Mr. Campbell asked if he were to sell a lot the implications he is kind of unclear on. He asked if they have to go through the regular process when someone wants to build a house or are they off the hook? Commissioner Farmer said she cannot honestly say that this meets the ordinance. Mr. Odom said he does not think it does and Commissioner Farmer agreed.

Commissioner Farmer also said she feels they are wiggling all over the place to try to meet the ordinance as much as they can and still cut Mr. Odom and Mr. Campbell a break because they were told information that was incorrect.

Mr. Odom said the answer to Mr. Campbell's question is no, it does not elimintae the necessity for an individual lot plan. Commissioner Farmer said the answer to his question if all the T’s were crossed in a subdivision storm water plan and the property owner ended up putting up a house and putting down impervious surfaces that were pretty close to what the storm water management plan for the subdivision said would go on there, she would see no reason why the town would not say that is close enough. You are off by a minimal amount of storm water; you are showing you are handling the 2 inches that the ordinance requires. We are not going to require anymore from you. Commissioner Farmer continued that if a 3200 square foot turns out to be a 6000 square foot house duplex, she would think that town hall would be saying you are going to have a lot more difficulty meeting the requirements than was shown on the subdivision storm water plan, No you have to add in additional infiltration somewhere.

Mr. Billy Farrington entertained that the town is covered all the way through the ordinance. If you go to 16-7 Submittal and Approved, it says a storm water management plan must be submitted and approved before: a preliminary plat is approved; an existing drainage system is altered, rerouted, or deepened; and you have to get a building permit. Anything under 5,000 square feet, the homeowner can do it himself. Anything over 5,000 square feet, you have to get an engineer to do it. If you have a blanket plan for everyone on one of the subdivisions, coming with a different driveway or a different size house, the calculations have to be intact. They cannot be used this way or that.

Mr. Rush implied he thinks a lot of this is over a technicality. He thinks all that is required is a general storm water plan. This provision was intended to deal with something with new streets, new infrastructure of a new clubhouse or what ever and the intent behind it as he recalls, was so that instead of having everybody come back and put in a individualized storm water system at the time of construction, then you could address everything up front and then you could have the water running, you would not have to worry about the driveway being sloped back or whatever, have the water going into a catch basin into a swell and then to a pond and therefore that would solve the problem so that the person who bought that lot would not have to spend $1,000 or $2,000 on the storm water plan. That was the intention behind it. As far as the storm water plan, it is that we read this ordinance to say that they need to submit a storm water plan, that this is a subdivision. Mr. Rush thinks it is a subdivision according to the language in the ordinance and he agrees with that interpretation but this storm water plan is going to be as simple as them giving us something that says that these lots are going to use underground infiltration systems, here is how much storm water is going to be generated, here is the calculations, in terms of meeting the technical requirement of the ordinance. Mr. Rush said the staff does not expect that person to be locked into building a 2,000 square foot house just by virtue of this storm water plan and it is a technicality. Mr. Rush did not think it was going to tell the town anymore now than will it will know 2 years from now when the lots are sold.

Mr. Rush agrees, in this instance, it is better to have the storm water plan at the time of development but in terms of technical nature of the ordinance, what is required, he felt it does require a plan. Perhaps the town did error by not requiring a written plan. They have tried to get a written plan today.

Ms. Angus commented that if the board did have a very detailed plan in front of them for each and every lot, it would be a generic. When that particular person comes in for their building permit, she can just about guarantee that Mr. Taylor and Mr. Fischer are going to say you have a little bit of curve in your driveway and that changes everything. I want a whole new plan.

Commissioner Farmer said she would expect that they would be looking more at the volume of storm water generated than anything else. Ms. Angus said they do not have the expertise to do that. That is why the plan is presented to them. Commissioner Farmer said she thinks that is why they are talking about engineering help with those. Ms. Angus said they do not get that with every individual lot. If it is more than 5,000 square feet that has to be displaced then that is when the engineer comes in on it but if it is under that Mr. Taylor and Mr. Fischer are not going to be comfortable with it. Commissioner Farmer said if it is over 5,000 square feet the property owner has to get a certified storm water plan but she is saying that the town needs the engineering help in town hall. Ms. Angus agreed.

Commissioner Eckhardt called a halt to the discussion on interpretation and asked why doesn’t the board go ahead, see if Mr. Daniel is willing to go ahead and take a look at the plans, every storm water plan, using the interpretation and based on neutral positions tonight, give that to Mr. Daniel if he is willing to go ahead with it based on the planning board being comfortable with it, and then put it on the agenda for May 22^nd?

Mr. Rush asked if this was the board’s desire?

Commissioner Farmer asked if Mr. Daniel could take a look at it early and make sure early enough information here according to what the ordinance is looking for, that would be greatly appreciated.

Mr. Rush said he would contact Mr. Daniel tomorrow morning.

Commissioner Farmer said her concern is she doesn’t want the board to set a precedence of ignoring an ordinance that maybe everybody on the board doesn’t feel is an important ordinance but she does.

Mr. Odom felt that everyone on the board shows support but they also show some common sense in interpretation. Commissioner Farmer replied that common sense interpretations have gotten Emerald Isle into a lot of trouble over the years.

Commissioner McElraft said down the road there would be more of this kind of thing, Phases. Ms. Angus said the board could eliminate Phasing. Commissioner Farmer related it is her understanding that Phasing was a request by the County Health Department. Commissioner Farmer said it may mean the town needs a definition for phased subdivisions.

Attorney Taylor said the issue remains and he thinks that if this is not what this board intended for this ordinance to do, it needs to be clarified to the point that we can take these out of it but that would need to be addressed in a separate action.

Commissioner Farmer made a motion to send the storm water plan, or a version of it, to the planning board chairman to hopefully,- - - - - -

Mr. Rush said he prefers to look at Mr. Daniel as a staff member as opposed to the planning board chairman. Attorney Taylor said the ordinance does not say exactly where the approval has to come from. He believes this issue could be addressed to Mr. Daniel specifically if the board wanted to.

Commissioner Farmer said she was happy with Planning Board Chairman. She wants the planning board – that’s the way we do it. The planning board that approves the preliminary plat to come to the board and they should have looked at the storm water plan and with that information approve the preliminary plat to send on to the board. Mr. Rush explained that in his opinion the planning board should have made sure that the storm water plan was done and with town staff approval, would do the storm water plan.

Mayor Schools asked Commissioner Farmer if her motion was to send it on to Mr. Art Daniel, planning board chairman and to schedule it on the agenda for May 22^nd Special Board Meeting. She confirmed it was and the board voted unanimously, 5-0. Motion carried.

PRELIMINARY /FINAL PLAT – SOUTH BEACH SUBDIVISION

Ms. Angus said this preliminary/final plat for South Beach Subdivision, in block 14, which is between Pier Point and the old dog leg on Ocean Drive. There will be no significant land disturbance. It is not comparable to what was just looked at because there are no roads cut through that the developer did. The road that is there was cut during 1950’s or 1970. They are going to front Ocean Drive and Emerald Drive.

There is a provision on Lots 1,2,3,4 and 5 for a driveway easement should the buyers of those specific lots want to take advantage of that. It is encouragement for a shared driveway to cut down on impervious surface. The R-2 zoning was done in 1999 but it had been a campground up until that time. Planning board staff, as in the last situation, has no particular problems with it. There will be an additional fire hydrant here as well and the access from Pier Point affords fire protection from the East side. The fire hydrant has been installed.

Commissioner McElraft asked if these were dedicated town roads and Ms. Angus answered “Yes”. Commissioner Farmer said this is a new subdivision so she doesn’t have problems with that issue.

Commissioner Eckhardt asked if the board was back to where they were before and Commissioner Farmer indicated they were. Mr. Billy Farrington said they needed some guidelines in the ordinance to tell them what size storm water system the board wants them to have engineered. They cannot do a blanket storm water plan on this subdivision. They do not know what is going to be put on there. They will sell these lots and will not know what is going to be put on there. The ordinance needs to be looked at because the contractors will not know what is going to be put on these lots. Commissioner Farmer replied they know they will have four duplexes – Mr. Farrington answered, “No we don’t”. Commissioner said it is likely you will though. Just because it is likely doesn’t mean it will happen and if a plan for 4,000 square feet of house is engineered, they go to the expense of doing that, they get that permit and then someone comes in and they want to build a 1500 square foot house or if they want to do a 7,000 square foot house, those plans will have to be changed. What will be given to the board will not be able to be used. Commissioner Farmer implied they will have to shape up for whatever it is on their own lot. Mr. Farrington said they would have to do a whole new plan. Commissioner Farmer said they will have to do an individual plan.

Mr. Farrington asked what is the board accomplishing by having this? Commissioner Farmer said if Mr. Farrington would like to bring to the planning board a discussion of this ordinance she thought that would be great. He could bring it before the planning board and suggest changes, that is fine. Right now what they have to work with is this ordinance and what it is saying, and they are back to the same thing again, that a storm water management plan has to be submitted and approved before a preliminary plat is approved. Mr. Farrington asked, storm water plan on what? He said they do not have any improvements on the whole subdivision. There is nothing that they can survey. Commissioner Farmer said it talks about that under new subdivisions.

Mr. Ricky Farrington said under 16-7(d) says if you have 5,000 square feet of disturbance and they have zero disturbance. Commissioner Farmer read, if the projected impervious surface at full build-out of the subdivision is greater than 5,000 square feet, and she thinks probably with those lots it will be significantly more than 5,000, or if the subdivision is for commercial use, which it is not, the storm water management plan must be completed by a North Carolina Registered Professional.

Mr. Farrington asked to go to 16-7 on the first page of that says a professional designed storm water management plan, designed and sealed by a registered design professional, shall be required for all proposed development, including, but not limited to single family and duplex residential dwellings with 5,000 square feet or more of impervious surface. Proposed residential projects with less than 5,000 square feet of impervious surface shall also be required to submit a storm water management plan, however, it need not be designed nor sealed by a registered design professional, provided that, in the judgment of the inspections department, the proposed storm water management system will meet the standards outlined in section 16-6.

Mr. Billy Farrington asked what they should go by? Commissioner Farmer said the residential side, they are talking about individual lots there. Under the new subdivision, they are talking about a subdivision showing calculations of an incorporated design to control total volume of storm water run-off projected after full build-out of the subdivision. That is what you are talking about. You are not talking about a house. They are doing a subdivision, not building houses. People that are doing the subdivision are TBF, LLC and RBF, LLC. Commissioner Farmer said under this section the town code it says for new subdivisions which is what you have. You have to do a storm water management plan that projects the total volume of storm water run-off after full build-out.

Mr. Ricky Farrington said they too got a 3 P.M. call today and they have a Power Point presentation they would like to show the board. The planning board never asked for one. Commissioner Farmer interrupted and said then you have the same exact problem that Mr. Campbell has and it is not your fault but the board still has an ordinance. She said it is ridiculous they were given the wrong information. The ordinance is crystal clear on this one. This is a new subdivision.

Commissioner McElraft said we are talking about the full intent of the ordinance and she did not agree with Commissioner Farmer. She said if you go back and read the Minutes and listen to the recording, it has every word in it.

Mr. Ricky Farrington asked to be allowed to share it with the board tonight showing what they are trying to do, what they feel is a very environmentally friendly project. They have absolutely no touching of the land to do the development. How much more naturally can you be? They know if they exceed 5,000 square feet, they have to do an engineered storm water plan for each lot. What the problem is they do not know what is going on each lot.

Commissioner Eckhardt asked why was the board arguing against the ordinance? If there is a problem with the ordinance, the board should go back and change the ordinance. Mr. Ricky Farrington related in the meantime they have a storm water management note that if they exceed 5,000 square feet, it will be a professionally engineered on the final plat and on the restrictive covenants.

Commissioner Farmer read that if the impervious surface at the full build-out of a subdivision is greater than 5,000 square feet – Mr. Farrington said they were going to be greater than 5,000 on each. They were going to have to have one for each lot.

According to Commissioner Farmer, they are going to have to have a storm water plan for the subdivision. Mr. R. Farrington said the board is asking him to do an engineered one for each lot that he does not know what he will be doing with it and he knows he will have to do one if he exceeds 5,000 feet. Commissioner Eckhardt commented the board was not asking Mr. Farrington for anything. Commissioner Eckhardt is personally not asking for anything. He is asking that they abide by the ordinance – which Mr. Farrington thinks is ambigious – and Commissioner Eckhardt asked if he agrees with that what are they going to do about it. Are they just going ahead and pass something based on the fact of the ambiguity in the ordinance?

Mr. Farrington said he was going to show the board a storm water plan that, the one he thinks they may be using, which is an engineered plan. Commissioner Eckhardt asked if the town staff has seen the storm water plan? Mr. Farrington said it was drawn this afternoon and he can show it on the power point presentation. No one in the planning board other Anne Erickson who is at this meeting. He asked what they were supposed to do. Commissioner Eckhardt said he thinks Mr. Farrington should work that out with the town staff as to what the requirement is. He does not know what it is. He has just told Mr. Farrington that he would not know one of these from a Will but he is going to go back and take the recommendations of the planning board.

Mr. Odom noted that the recommendation of the planning board did recommend approval. Mr. Billy Farrington asked what guidelines he and Ricky would use to do the storm water plan? You say maximum build-out. So they maximize each lot and do a storm water plan on that? Commissioner Farmer said that is what the ordinance is saying on page 960. Town staff can help them if they are having trouble understanding what the town ordinance says. Commissioner McElraft said in the discussion maximum build-out was saying that you would have a building on each lot. It did not say it would be 5,000 square feet or 2,000 square feet. That is why they are having an individual one. Commissioner Farmer said that is why you have an individual comprehensive plan on each lot.

Mr. R. Farrington said it would be in vain because when a person purchased a lot they would have to do it again. It would be engineered both times and doubling the expense.

Commissioner McElraft said that is the point and Commissioner Farmer disagreed. She said the point is doing what the ordinance says. Commissioner McElraft said “new” would be construction of roads, curbs, etc as that was the discussion. Commissioner Eckhardt agreed it was a new subdivision.

Commissioner Farmer said the board was not going to argue anymore. She said this is newly subdivided land. Mr. Odom asked about Spinnaker’s reach and Commissioner Farmer said this was not Spinnaker’s Reach, this was South Beach which has never been South Beach before.

Commissioner Farmer apologized because it was not their fault. Mr. Odom commented he did feel it was followed and Mr. Rush also said he felt it had been followed.

After some more discussion on this issue, the town board agreed to ask Mr. Art Daniel to look at a storm water plan for this subdivision along with Mr. Rush, Ms. Angus, Billy and Ricky Farrington to get it resolve once and for all and come back to the board on May 22^nd as with the previous issue.

Commissioner Marks made a motion to table this issue until May 22^nd and the board voted unanimously, 5-0. Motion carried.

Commissioner McElraft asked what could be done about the ordinance? Commissioner Messer said the individual lots are going to do a better job of storm water run-off than some blanket overall plan for the whole project. He thinks this should be generated also. If it is done on the individual lot basis, you are going to do a better job with it and you know what you are talking about. You have no idea what you are talking about when you say give me a blanket storm water control plan. He would not know what it is. Commissioner Messer feels the board should look at the ordinance again.

Commissioner Eckhardt stated the planning board needs to look at the ordinance. Mr. Rush said he could schedule that for the next planning board meeting.

APPOINTMENTS TO BOARD OF ADJUSTMENT

Commissioner Eckhardt made a motion to appoint Kathie Koren from Alternate 1 to replace John McEnaney on the board who has resigned for a term until 2006, reappoint Winton Smith and Joseph Quigley to serve until 2006 and to appoint Russell Adams to Alternate 1 to replace Kathie Koren to 2005. The board voted unanimously, 5-0. Motion carried.

COMMENTS FROM THE TOWN CLERK, TOWN ATTORNEY AND TOWN MANAGER.

There were no comments from the Town Clerk.

Town Attorney Taylor let the board know that all the condemnation suits that were filed against property owners along the oceanfront, the time to answer has expired. Mr. Taylor went before the judge last week and he granted default judgment on everyone who had not answered except for one who’s time has not quiet expired until the end of the civil term and he would not allow Mr. Taylor to get back in front of him. The one that is remaining is the person who owns that 5-foot strip that seems to be left behind. Mr. Taylor has sent him a deed to deed it over the 5-foot strip to the town. He had said he would be willing to do that. Mr. Taylor has not been able to get up with him recently to try to get that deed in hand so as far as Mr. Taylor is concerned, the town is in a very good position unless there is a good argument why a default judgment should be overturned and Mr. Taylor thinks they can finally close out Phase I.

Mr. Rush, Town Manager, commented on the Solid Waste Containment Program began its delivery of trash cans this morning. He doesn’t feel they made as much progress as they had hoped but it is still hoped the cans will be delivered by Memorial Day. That will be an on-going process until they are done.

The sidewalk project has started. There is a small patch by Bits and Pieces and near Live Oak Street. No work was done today and he was unable to contact anyone to see why that had happened. They were to finish everything along Emerald Drive before Memorial Day. Due to a mutual agreement, they have decided to wait until after Memorial Day to come back.

14. Comments from Board of Commissioners and Mayor

Commissioner Marks thanked the folks for coming to town board meetings. She has never seen it like this in the past.

There were no comments from Mayor Schools, Commissioners Messer, Farmer, Eckhardt and McElraft.

15. Adjourn

Commissioner Messer made a motion to adjourn and the board voted unanimously, 5-0. Motion carried.

Meeting adjourned at 10:30 P.M.

Respectfully submitted,

Carolyn K. Custy, CMC