181  Dunn City Council Special Meeting Tuesday, August1 16,2021 6:00 p.m., Dunn Municipal Building  Minutes  PRESENT: Mayor William P.1 Elmore Ir., Mayor Pro Tem Dr. David L. Bradham, Council Members J. Also present: City Manager. Steven Neuschafer, Assistant City Manager Mathew Boone, Finance Director. Jim Roberts, Public Utilities Director Heather Adams, Public Works Director Vincent Washington, Communications Mayor Elmore opened the meeting at 6:00 p.m. and Council) Member McLean gave thei invocation. Afterwards, Motion by Council Member Turnage ands second by Mayor Pro' Tem Bradham to adopt the August 16, 2021 Acceptance of Revised Golden LEAF Foundation Grant forl Inflow: and) Infiltration. Assessment In 2019, the City applied for and received Hurricane Florence Recovery Grant funds from the Golden LEAF Foundation for the purpose of funding an Inflow and Infiltration assessment of the City's wastewater collection system in order toi identify areas of damage, resulting from the effects of Hurricane Florence. In 2020, the City was awarded additional fundst tor repairs sewer linest that were: identified during the assessment Thel bids for the project came in over budget sot the City requested additional funds to cover thel higher than expected construction costs and wasi recently awarded: ana additional $50,0001 from Golden LEAF. Golden) LEAF Motion by Mayor Pro Tem Bradham and second by Council Member Gaulden to accept the revised Golden LEAF grant agreement int the amount of $506,086 and make the applicable assurances contained therein. Motion unanimously approved. Ad copyo ofthe Agreement hasl been fled with the City Clerk. Presentation: and Acceptance of Citywidel Pavement Condition: Study The City of Dunn entered into an agreement with SEPI, Inc. to conducta citywide pavement condition: studyt to assist staffa ando council ini makingt ther mosti informed decisions when selecting future paving projects. Anthony Roper and Chris Corriher of SEPI presented the draft report The assessment was prepared on 661 miles of paved streets, 750s street segments. The overall Pavement Condition Index (PCI) for the Cityi is 65 with 27.37 miles ofs streets ing good condition and 44.1 miles inf fair condition.. 2.67 miles were poor and failed while 2.04 miles were excellent. Corriher shared the top threes service defects whichi includes oxidation, fatigue cracking, and transverse cracking. He talked about the various miles and the type of treatment including the cost for each section with the total cost of all repairs, if the city handled right now, at $15,593.757. The final 1) Proactive implementation of a pavement management system with a mix of rehabilitation and 2) Preservaton/Preventatiye Maintenance strategy for the good" roads- crack seals, surface patching, 3) Rehabilitation strategy for "poor" and "fair" roads Repairs + Overlays (Plant Mix or Micro- Micro-surfacing assumes 5-mile minimum contract quantity and requires technical support to 4) Develop: strategic plan fori future funding to address routine maintenance (drainage, patching, crack 5) Plan for future pavement evaluations on regular intervals (3-5 years +/-) so that the status of the Council Member Turnage shared that int the past, the Council focused ont the worst roads first and this change inf focus would definitely require extra communication and education with our constituents. Roper shared the plans for mixed repairs should also include repairs to the worst areas. He also recommended piggy backing with NCI DOT for as many repair projects as possible. After feedback from staff and council, the final The presentation! by) James E. Sanderson Jr, Senior Vice President of Davenport & Company LLC provided an overall financial review of both the general fund and the water and sewer fund, including a peer group analysis, ar review ofe existing debt) profile andi fund balance trends, an analysis oft the affordability of potential Sanderson talked aboutt thel local government ratings A, AA and AAA. Dunn's past rating went awayi in 2017 because thel Ioans requiring the ratings were paid. He reviewed the current debt service and recommended looking ato opportunities for borrowing atal lower rate tos save funds ands get fixed rates such as witht the Select Bank and the UCB loans where the rates mature prior to the loan payoff so the market will dictate, att that  Wesley: Sills,April Gaulden, Frank McLean, Billy N.Tart, and ChuckTurnage. Coordinator. Kaitlin Adkins, City Attorney Tilghman Pope, and City Clerk Tammy Williams.  CALLTOORDER ANDI INVOCATION Mayor Elmorel ledi int thel Pledge of Allegiance. AGENDA. ADJUSTMENT AND APPROVAL  meeting agenda as presented. Motion unanimously approved.  increased thet total awardf from $456,0861 to$ $506,086 with nol local match.  recommendations were] presented toi increaset the overall PCI: preventativer maintenance: activities.  ands seals. surfacing).  ensure quality workmanship.  seals, etc. as well as pavement preservation: andi resurfacing). roads system can ber monitored: andi maintenance: plans altered as necessary.  document willl be completed andj presented ataf future meeting. Presentation onl Bonds and) Long Term Debt by Davenport & Co.  futurel borrowings, and a review of potential opportunities tor refinance existing debt.  time, what ther new rate willl be.    182  Thej payout ratio is at 62% which isa good rate. He reviewed debt service and assessment property value whichi isr righti inl line with AA: at. 92%.1 Debt servicet to expenditures ratioi is 7.51% and anything less than 8% is considered verys strong. He statedt trendsl lookg goodi int the general fund andt the general fund balance looks good at 27% when comparing unrestricted tor revenues and expenditures. He addedt the dollar amount ist not Hep presenteda al Debt Affordability. Analysis assuming borrowing: $101 million at 3.5%1 for 20 years and another $101 million at4 4%1 in 2025." This borrowing would resulti in an 8.42 taxi increase initially and then end up with atotal of14.16i increase after thes second loan. This increase does notl have tol bej justi in raising taxes but the He then. reviewed the water and sewer fund and recommended looking at lowering debt service by refinancing existing debt." Thel loan at BB&T at $1.699 million could possibly bel lowered. The payoff rate of 779i is verys strongf for a utility fund meaningt the city has the ability to replace that debt service. Reviewing the debt service ratio, there is 124 days cash onl hand, whichi is also very strong. You want the utility fund to bes self-supporting: sos you do not! have to use thes generalf fund for utility expenses. Sanderson: sharedt thata5% increase would ber needed tos service $6.11 million inc debt service. The! 5% assumes no revenue increase from Hel highlighted three loans to look atf for refinancing and savings. Those were the 2014 Select loan in the generalf fund andi in water ands sewer- the 2009: Statel Revolving loan and the 2018 BB&T loan. The city would Consensus from Council was fors staff to go through the process tos seei ifr refinancing these loans would result Council Member Sills asked about bonds. Sanders responded that borrowing with bonds would be al little longer process. The city's rating would! have tol be reinstated: and ther rates are more expensive. It wouldt take four mouths plus and the process could not begin until the audit is available. Ifcouncili is interested: in! bonds, this information would need to be presented and the council would need to go through the various options. He addedt that public transactions should mostly be considered for $5 million or more. Mayor Elmore asked what is involved in reinstating the city's rating and Sanderson replied that it would require a credit presentation and conversation with the LGC and rating agencies. A fee is associated that could be  that muchs soi itreflects thatt the cityi ist notl hoardinga a lot ofr money.  neededi revenue can bef from others sources.  others sources.  needt tor realize atl least 3% savings fori ittor makes sense tor refinance.  ins savings for the city.  incorporated with thel bonds. Amouncemamt/laiomaton  Mayor Elmorea announcedi upcoming events and activities.  Motion by Council Member Turnage and second by Mayor Pro Tem Bradham to enter closed session for the purpose toi instruct the staff concerning the negotiation oft the price and terms ofa contract concerning the acquisition ofreal property ina accordance with [N.C.G.S.1 143-318.11(a)(5). Motion unanimously approved.  Mayor Elmore recessed the meeting at7 7:58 p.m. The meeting wasi reconvened.  Motion by Council Member Turnage and second by Mayor Pro Tem Bradham to make an offer on NI McKay Ave property, PIN #1517-71-6247, approximately 8.32 acres for the purpose of using the property for municipal purposes according to the terms of the purchase contract presented. Motion unanimously approved. A copy ofthe Offer tol Purchase and Contract, Page 1is attached tot these minutes as Attachment #1. With no further business to discuss, motion by Council Member Sills and second by Council Member Tart to  adjournt ther meetinga at8 8:18) p.m. Motion unanimously: approved.  CE 7CORPORAN SEAL CAROI  William P.E Elmore] Jr. AEPR/ Mayor  Attest:  Tmonuy hhtraan  Tammy Williams/CMC City Clerk